As filed with the Securities and Exchange
Commission on January 24, 2012
Registration
No. 333-169533
UNITED STATES SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C.
20549
Amendment No. 5
to
Form S-11
FOR REGISTRATION UNDER THE
SECURITIES ACT OF 1933
OF SECURITIES OF CERTAIN REAL
ESTATE COMPANIES
Cole Credit Property
Trust IV, Inc.
(Exact Name of Registrant as
Specified in Its Governing Instruments)
2555 East Camelback Road,
Suite 400
Phoenix, Arizona 85016
(602) 778-8700
(Address, Including Zip Code and
Telephone Number, Including Area Code, of Registrants
Principal Executive Offices)
D. Kirk McAllaster, Jr.
Executive Vice President, Chief Financial Officer and
Treasurer
Cole Credit Property Trust IV, Inc.
2555 East Camelback Road,
Suite 400
Phoenix, Arizona 85016
(602) 778-8700
(Name, Address, Including Zip
Code, and Telephone Number, Including Area Code, of Agent for
Service)
Copies to:
Lauren Burnham Prevost, Esq.
Heath D. Linsky, Esq.
Morris, Manning & Martin, LLP
1600 Atlanta Financial Center
3343 Peachtree Road, N.E.
Atlanta, Georgia
30326-1044
(404) 233-7000
Approximate date of commencement of proposed sale to the
public:
As soon as practicable following
effectiveness of this Registration Statement.
If any of the securities registered on this Form are to be
offered on a delayed or continuous basis pursuant to
Rule 415 under the Securities Act, check the following
box:
þ
If this form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act,
check the following box and list the Securities Act registration
statement number of the earlier effective registration statement
for the same
offering.
o
If this form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following
box and list the Securities Act registration statement number of
the earlier effective registration statement for the same
offering.
o
If this form is a post-effective amendment filed pursuant to
Rule 462(d) under the Securities Act, check the following
box and list the Securities Act registration statement number of
the earlier effective registration statement for the same
offering.
o
If delivery of the prospectus is expected to be made pursuant to
Rule 434, check the following
box.
o
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated
filer, or a smaller reporting company. See the definitions of
large accelerated filer, accelerated
filer and smaller reporting company in
Rule 12b-2
of the Exchange Act. (Check one):
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Large accelerated
filer
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Accelerated
filer
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Non-accelerated
filer
þ
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Smaller reporting company
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(Do not check if a smaller reporting company)
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The Registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective
date until the Registrant files a further amendment which
specifically states that this Registration Statement will
thereafter become effective in accordance with Section 8(a)
of the Securities Act of 1933 or until the Registration
Statement becomes effective on such date as the Commission,
acting pursuant to said Section 8(a), may determine.
The
information in this prospectus is not complete and may be
changed. We may not sell these securities pursuant to this
prospectus until the registration statement filed with the SEC
is effective. This prospectus is not an offer to sell these
securities in any state where the offer or sale is not
permitted.
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SUBJECT TO
COMPLETION, DATED JANUARY 24, 2012
®
Cole Credit Property
Trust IV, Inc.
Maximum Offering of 300,000,000 Shares of Common
Stock
Minimum Offering of 250,000 Shares of Common Stock
Cole Credit Property Trust IV, Inc. is a Maryland
corporation that intends to invest primarily in income-producing
necessity retail properties that are single-tenant or
multi-tenant power centers subject to long-term
triple net or double net leases with national or regional
creditworthy tenants. We intend to qualify as a real estate
investment trust (REIT) for federal income tax purposes, and we
are externally managed by our advisor, Cole REIT Advisors IV,
LLC, an affiliate of our sponsor, Cole Real Estate Investments.
We are offering up to 250,000,000 shares of our common
stock in our primary offering for $10.00 per share, with
discounts available for certain categories of purchasers. We
also are offering under this prospectus up to
50,000,000 shares of our common stock pursuant to our
distribution reinvestment plan at a purchase price during this
offering of $9.50 per share. We will not sell any shares unless
we sell a minimum of 250,000 shares to the public in our
primary offering by
,
2013, which is one year from the effective date of this
offering. You will not receive interest on your subscription
payments unless we fail to sell the minimum number of shares.
Any shares purchased by our advisor or its affiliates will not
be counted in calculating the minimum offering. We will offer
these shares until
,
2014, which is two years after the effective date of this
offering, unless the offering is extended. We may need to renew
the registration of this offering annually with certain states
in which we expect to offer and sell shares. In no event will we
extend this offering beyond 180 days after the third
anniversary of the initial effective date, and we may terminate
this offering at any time. We reserve the right to reallocate
the shares we are offering between our primary offering and our
distribution reinvestment plan.
See Risk Factors beginning on page 19 for a
description of the principal risks you should consider before
buying shares of our common stock. These risks include the
following:
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The amount of distributions we may pay, if any, is uncertain.
Due to the risks involved in the ownership of real estate, there
is no guarantee of any return on your investment in our common
stock, and you may lose your investment.
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We are a blind pool, as we currently own no
properties and have not identified any specific properties for
purchase, and we have no operating history.
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This investment has limited liquidity. No public market
currently exists, and one may never exist, for shares of our
common stock. If you are able to sell your shares, you would
likely have to sell them at a substantial discount to their
market value.
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You should consider an investment in our common stock a
long-term investment. If we do not successfully implement our
exit strategy, you may suffer losses on your investment, or your
shares may continue to have limited liquidity.
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The offering price for our shares is not intended to reflect the
book value or net asset value of our investments, or our
expected cash flow. Until such time as our shares are valued by
our board of directors, the price of our shares is not intended
to reflect the net asset value of our shares.
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We may pay distributions from sources other than cash flow from
operations, including borrowings and proceeds from the sale of
our securities or asset sales, and we have no limits on the
amounts we may pay from such other sources. Payments of
distributions from sources other than cash flows from operations
may reduce the amount of capital we ultimately invest in real
estate and may negatively impact the value of your investment.
As a result, the amount of distributions paid at any time may
not reflect the current performance of our properties or our
current operating cash flows.
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This is a best efforts offering. If we are not able
to raise a substantial amount of capital in the near term, we
may have difficulties investing in properties and our ability to
achieve our investment objectives could be adversely affected.
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There are substantial conflicts of interest between us and our
advisor and its affiliates. Key persons associated with our
advisor perform similar duties for other
Cole-sponsored
programs that may use investment strategies similar to ours
creating potential conflicts of interest when allocating
investment opportunities. In addition, our advisor and its
affiliates have substantial discretion in managing our
operations, and we pay them substantial fees.
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Although you will be provided with information about our
investments after the investments have been made, you will be
unable to evaluate the economic merit of future investments,
including how the proceeds from this offering will be invested.
This makes an investment in our shares speculative.
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Our board of directors may change our investment objectives and
certain investment policies without stockholder approval.
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We expect to incur debt, which could adversely impact your
investment if the value of the property securing the debt falls
or if we are forced to refinance the debt during adverse
economic conditions.
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We may suffer from delays in our advisor locating suitable
investments, which could adversely affect our ability to pay
distributions and the value of your investment.
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If we fail to qualify as a REIT, cash available for
distributions to be paid to you could decrease materially.
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For qualified accounts, if an investment in our shares
constitutes a prohibited transaction under the Employee
Retirement Income Security Act of 1974, as amended (ERISA), you
may be subject to the imposition of significant excise taxes and
penalties with respect to the amount invested.
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This investment involves a high degree of risk. You should
purchase these securities only if you can afford a complete loss
of your investment.
Neither the Securities and Exchange Commission, the Attorney
General of the State of New York, nor any other state securities
regulator, has approved or disapproved of our common stock, nor
determined if this prospectus is truthful or complete or passed
on or endorsed the merits or demerits of this offering. Any
representation to the contrary is a criminal offense.
The use of projections in this offering is prohibited. Any
representation to the contrary, and any predictions, written or
oral, as to the amount or certainty of any future benefit or tax
consequence that may flow from an investment in this program is
not permitted. All proceeds from this offering are held in trust
until subscriptions are accepted and funds are released.
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Selling
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Dealer
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Net Proceeds
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Price to Public
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Commissions
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Manager Fee
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(Before Expenses)
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Primary Offering Per Share
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$
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10.00
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$
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0.70
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$
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0.20
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$
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9.10
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Total Minimum
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$
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2,500,000
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$
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175,000
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$
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50,000
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$
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2,275,000
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Total Maximum
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$
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2,500,000,000
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$
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175,000,000
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$
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50,000,000
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$
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2,275,000,000
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Distribution Reinvestment Plan Per Share
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$
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9.50
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$
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$
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$
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9.50
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Total Maximum
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$
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475,000,000
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$
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$
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$
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475,000,000
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The dealer manager of this offering, Cole Capital Corporation, a
member firm of the Financial Industry Regulatory Authority, Inc.
(FINRA), is an affiliate of our advisor and will offer the
shares on a best efforts basis. The minimum
investment generally is 250 shares. See the Plan of
Distribution section of this prospectus for a description
of such compensation. We expect that up to 10% of our gross
offering proceeds, excluding proceeds from our distribution
reinvestment plan, will be used to pay selling commissions,
dealer manager fees and other expenses considered to be
underwriting compensation.
, 2012
SUITABILITY
STANDARDS
An investment in our common stock is only suitable for persons
who have adequate financial means and desire a long-term
investment (generally, an investment horizon in excess of seven
years). The value of your investment may decline significantly.
In addition, the investment will have limited liquidity, which
means that it may be difficult for you to sell your shares.
Persons who may require liquidity within several years from the
date of their investment or seek a guaranteed stream of income
should not invest in our common stock.
In consideration of these factors, we have established minimum
suitability standards for initial stockholders and subsequent
purchasers of shares from our stockholders. These minimum
suitability standards require that a purchaser of shares have,
excluding the value of a purchasers home, furnishings and
automobiles, either:
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a net worth of at least $250,000; or
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a gross annual income of at least $70,000 and a net worth of at
least $70,000.
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Certain states have established suitability requirements in
addition to the minimum standards described above. Shares will
be sold to investors in these states only if they meet the
additional suitability standards set forth below:
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Alabama
Investors must have a liquid net
worth of at least ten times their investment in us and similar
programs.
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California
Investors must have either
(i) a net worth of at least $250,000, or (ii) a gross
annual income of at least $75,000 and a net worth of at least
$75,000. In addition, the investment must not exceed ten percent
(10%) of the net worth of the investor.
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Iowa and Ohio
Investors may not invest, in
the aggregate, more than 10% of their liquid net worth in us and
all of our affiliates.
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Kansas
It is recommended by the office of the
Kansas Securities Commissioner that investors in Kansas not
invest, in the aggregate, more than 10% of their liquid net
worth in this and similar direct participation investments. For
purposes of this recommendation, liquid net worth is
defined as that portion of net worth that consists of cash, cash
equivalents and readily marketable securities.
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Kentucky, Michigan, Oregon, Pennsylvania and
Tennessee
Investors must have a liquid net worth
of at least 10 times their investment in us.
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Maine
The investment in us (plus any
investments in our affiliates) by an investor must not exceed
10% of the net worth of the investor.
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Nebraska
Investors must have (excluding the
value of their home, furnishings and automobiles) either
(i) a minimum net worth of $100,000 and an annual income of
$70,000, or (ii) a minimum net worth of $350,000. In
addition, the investment in us must not exceed 10% of the
investors net worth.
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North Dakota
Investors must have a liquid net
worth of at least ten times their investment in us and our
affiliates.
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Because the minimum offering of our common stock is less than
$297,500,000 Pennsylvania investors are cautioned to evaluate
carefully our ability to accomplish fully our stated objectives
and to inquire as to the current dollar volume of our
subscription proceeds.
In the case of sales to fiduciary accounts, the minimum
suitability standards must be met by either the fiduciary
account, by the person who directly or indirectly supplied the
funds for the purchase of the shares, or by the beneficiary of
the account.
Our sponsor and affiliated dealer manager are responsible for
determining if investors meet our minimum suitability standards
and state specific suitability standards for investing in our
common stock. In making this determination, our sponsor and
affiliated dealer manager will rely on the participating
broker-dealers
and/or
information provided by investors. In addition to the minimum
suitability standards described above, each participating
broker-dealer, authorized representative or any other person
selling shares on our behalf, and our sponsor, is required to
make every reasonable effort to determine that the purchase of
shares is a suitable and appropriate investment for each
investor.
It shall be the responsibility of your participating
broker-dealer, authorized representative or other person selling
shares on our behalf to make this determination, based on a
review of the information provided by you,
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including your age, investment objectives, income, net worth,
financial situation and other investments held by you, and
consider whether you:
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meet the minimum income and net worth standards established in
your state;
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can reasonably benefit from an investment in our common stock
based on your overall investment objectives and portfolio
structure;
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are able to bear the economic risk of the investment based on
your overall financial situation; and
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have an apparent understanding of:
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the fundamental risks of an investment in our common stock;
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the risk that you may lose your entire investment;
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the lack of liquidity of our common stock;
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the restrictions on transferability of our common stock;
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the background and qualifications of our advisor; and
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the tax, including ERISA, consequences of an investment in our
common stock.
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Such persons must maintain records for at least six years of the
information used to determine that an investment in the shares
is suitable and appropriate for each investor.
Restrictions
Imposed by the USA PATRIOT Act and Related Acts
In accordance with the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of 2001 (the USA PATRIOT Act), the shares offered
hereby may not be offered, sold, transferred or delivered,
directly or indirectly, to any Unacceptable
Investor, which means anyone who is:
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a designated national, specially designated
national, specially designated terrorist,
specially designated global terrorist, foreign
terrorist organization, or blocked person
within the definitions set forth in the Foreign Assets Control
Regulations of the U.S. Treasury Department;
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acting on behalf of, or an entity owned or controlled by, any
government against whom the United States maintains economic
sanctions or embargoes under the Regulations of the
U.S. Treasury Department;
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within the scope of Executive Order 13224 Blocking
Property and Prohibiting Transactions with Persons who Commit,
Threaten to Commit, or Support Terrorism, effective
September 24, 2001;
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a person or entity subject to additional restrictions imposed by
any of the following statutes or regulations and executive
orders issued thereunder: the Trading with the Enemy Act, the
National Emergencies Act, the Antiterrorism and Effective Death
Penalty Act of 1996, the International Emergency Economic Powers
Act, the United Nations Participation Act, the International
Security and Development Cooperation Act, the Nuclear
Proliferation Prevention Act of 1994, the Foreign Narcotics
Kingpin Designation Act, the Iran and Libya Sanctions Act of
1996, the Cuban Democracy Act, the Cuban Liberty and Democratic
Solidarity Act and the Foreign Operations, Export Financing and
Related Programs Appropriations Act or any other law of similar
import as to any
non-U.S. country,
as each such act or law has been or may be amended, adjusted,
modified or reviewed from time to time; or
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designated or blocked, associated or involved in terrorism, or
subject to restrictions under laws, regulations, or executive
orders as may apply in the future similar to those set forth
above.
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ii
QUESTIONS
AND ANSWERS ABOUT THIS OFFERING
Below we have provided some of the more frequently asked
questions and answers relating to an offering of this type.
Please see Prospectus Summary and the remainder of
this prospectus for more detailed information about this
offering.
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Q:
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What is a REIT?
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A:
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In general, a REIT is a company that:
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pays distributions to investors of at least 90% of
its taxable income;
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avoids the double taxation treatment of
income that generally results from investments in a corporation
because a REIT generally is not subject to federal corporate
income taxes on its net income, provided certain income tax
requirements are satisfied; and
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combines the capital of many investors to acquire a
large-scale diversified real estate portfolio under professional
management.
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Q:
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How are you different from your competitors who offer
non-listed finite-life public REIT shares or real estate limited
partnership units?
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A:
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We believe that our sponsors disciplined investment focus
on core commercial real estate and experience in managing such
properties will distinguish us from other non-listed REITs. We
use the term core to describe existing properties
currently operating and generating income, that are leased to
national and regional creditworthy tenants under long-term net
leases and are strategically located. In addition, core
properties typically have high occupancy rates (greater than
90%) and low to moderate leverage (0% to 50% loan to value).
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We intend to invest primarily in income-producing necessity
retail properties that are single-tenant or multi-tenant
power centers, which are leased to national and
regional creditworthy tenants under long-term leases, and are
strategically located throughout the United States and U.S.
protectorates. Necessity retail properties are properties leased
to retail tenants that attract consumers for everyday needs,
such as pharmacies, home improvement stores, national
superstores, restaurants and regional retailers. We expect that
most of our properties will be subject to triple net and double
net leases, whereby the tenant is obligated to pay for most of
the expenses of maintaining the property. Through our
investments in core commercial real estate, we expect to achieve
a relatively predictable and stable stream of income, which will
provide a principal source of return for investors in our common
stock, and the potential for capital appreciation in the value
of our real estate assets.
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For over three decades, our sponsor, Cole Real Estate
Investments, has developed and utilized this investment approach
in acquiring and managing core commercial real estate assets in
the retail sector. We believe that our sponsors experience
in assembling real estate portfolios, which principally focus on
national and regional creditworthy tenants subject to long-term
net leases, will provide us with a competitive advantage. In
addition, our sponsor has built a business of over
275 employees, who are experienced in the various aspects
of acquiring, financing and managing commercial real estate, and
that our access to these resources also will provide us with an
advantage.
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Q:
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Will you invest in anything other than retail commercial
properties?
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A:
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Yes. We also may invest in other income-producing properties,
such as office and industrial properties, which may share
certain core characteristics with our retail investments, such
as a principal creditworthy tenant, a long-term net lease, and a
strategic location. Our sponsors disciplined investment
focus on core commercial real estate historically has included
office and industrial properties. To the extent that we invest
in office and industrial properties, we will focus on core
properties that are essential to the business operations of the
tenant. We believe investments in these properties are
consistent with our goal of providing investors with a
relatively stable stream of current income and an opportunity
for capital appreciation. Our portfolio also may include other
income-producing real estate, as well as real estate-related
investments such as mortgage, mezzanine, bridge and other loans
and securities related to real estate assets, provided that such
investments do not cause us to lose our REIT status or cause us
to be an investment company under the Investment Company Act of
1940, as amended (Investment Company Act). Although this is our
current target portfolio, we may make adjustments to our target
portfolio based on real estate market conditions and investment
opportunities. We will not forgo a high
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quality investment because it does not precisely fit our
expected portfolio composition. Our goal is to assemble a
portfolio that is diversified by investment type, investment
size and investment risk, which will provide attractive and
reasonably stable returns to our investors. See the section of
this prospectus captioned Investment Objectives and
Policies Acquisition and Investment Policies
for a more detailed discussion of all of the types of
investments we may make.
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Generally, what are the terms of your leases?
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A:
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We will seek to secure leases from creditworthy tenants before
or at the time we acquire a property. We expect that many of our
leases will be what is known as triple net or double net leases.
Triple net leases typically require the tenant to pay all costs
associated with a property in addition to the base rent and
percentage rent, if any, including capital expenditures for the
roof and the building structure. Double net leases typically
hold the landlord responsible for the capital expenditures for
the roof and structure, while the tenant is responsible for all
lease payments and remaining operating expenses associated with
the property. This helps ensure the predictability and stability
of our expenses, which we believe will result in greater
predictability and stability of our cash distributions to
stockholders. We intend to enter into leases that have terms of
ten or more years and include renewal options. We may, however,
enter into leases that have a shorter term.
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How will you determine whether tenants are creditworthy?
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A:
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Our advisor and its affiliates have a well-established
underwriting process to determine the creditworthiness of our
potential tenants. The underwriting process includes analyzing
the financial data and other information about the tenant, such
as income statements, balance sheets, net worth, cash flow,
business plans, data provided by industry credit rating
services, and/or other information our advisor may deem
relevant. In addition, we may obtain guarantees of leases by the
corporate parent of the tenant, in which case our advisor will
analyze the creditworthiness of the guarantor. In many
instances, especially in sale-leaseback situations, where we are
acquiring a property from a company and simultaneously leasing
it back to such company under a long-term lease, we will meet
with the senior management to discuss the companys
business plan and strategy. We may use an industry credit rating
service to determine the creditworthiness of potential tenants
and any personal guarantor or corporate guarantor of the tenant.
We consider the reports produced by these services along with
the relevant financial and other data relating to the proposed
tenant before acquiring a property subject to an existing lease
or entering into a new lease.
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Q:
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What is the experience of your sponsor and your advisor?
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A:
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Our sponsor, Cole Real Estate Investments, is a group of
affiliated entities directly or indirectly controlled by
Christopher H. Cole, including Cole Capital Advisors, Inc. (Cole
Capital Advisors), Cole Capital Partners, LLC (Cole Capital
Partners) and other affiliates of our advisor. From
January 1, 2001 to December 31, 2010, Cole Real Estate
Investments sponsored 68 prior programs, including 65 privately
offered programs, and Cole Credit Property Trust II, Inc.
(CCPT II), Cole Credit Property Trust III, Inc. (CCPT
III) and Cole Corporate Income Trust, Inc. (CCIT), all
publicly offered REITs. These prior programs had raised
approximately $5.3 billion from over 106,000 investors and
had purchased 1,359 properties located in 45 states and the
U.S. Virgin Islands at an acquisition cost of $7.3 billion
as of December 31, 2010. CCPT III currently is raising
capital pursuant to a follow-on public offering of shares of its
common stock, CCIT commenced its initial public offering of
shares of its common stock in February 2011 and Cole Real Estate
Income Strategy (Daily NAV), Inc. (Cole Income NAV Strategy)
commenced its initial public offering in December 2011.
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For over three decades, our sponsor, Cole Real Estate
Investments, has developed and utilized a conservative
investment approach that focuses on single-tenant commercial
properties, which are leased to name-brand creditworthy tenants,
subject to long-term net leases. While our sponsor
has used this investment strategy primarily in the retail
sector, our sponsor has also used the same investment strategy
(single-tenant commercial properties subject to long-term net
leases with creditworthy tenants) in the office and industrial
sector. We expect that our sponsors prior experience in
applying this conservative and disciplined investment strategy
in both the retail and corporate sectors will provide us with a
competitive advantage, as our advisor, an affiliate of our
sponsor, acquires and manages, on our behalf, a portfolio of
necessity retail properties. In addition, our sponsor has built
an organization of over
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275 employees, who are experienced in the various aspects
of acquiring, financing and managing commercial real estate, and
we believe that our access to these resources will also provide
us with a competitive advantage. A summary of the real estate
programs managed over the last ten years by our sponsor,
including adverse business and other developments, is set forth
in the section of this prospectus captioned Prior
Performance Summary.
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Our advisor is Cole REIT Advisors IV, LLC (CR IV Advisors), an
affiliate of our sponsor that was formed solely for the purpose
of managing our company. The chief executive officer and
president of our advisor, and other key personnel of our
advisor, have been associated with Cole Real Estate Investments
for several years. For additional information about the key
personnel of our advisor, see the section of this prospectus
captioned Management The Advisor.
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Q:
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What will be the source of your distributions?
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We may pay distributions from sources other than cash flow from
operations, including from the proceeds of this offering, from
borrowings or from the sale of properties or other investments,
among others, and we have no limit on the amounts we may pay
from such sources. We expect that our cash flow from operations
available for distribution will be lower in the initial stages
of this offering until we have raised significant capital and
made substantial investments. As a result, we expect that during
the early stages of our operations, and from time to time
thereafter, we may declare distributions from sources other than
cash flows from operations. Our distributions will constitute a
return of capital for federal income tax purposes to the extent
that they exceed our earnings and profits as determined for tax
purposes.
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Q:
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Do you expect to acquire properties in transactions with
affiliates of your advisor?
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A:
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Other than as set forth below, our board of directors has
adopted a policy to prohibit acquisitions and loans from or to
affiliates of our advisor. First, from time to time, our advisor
may direct certain of its affiliates to acquire properties that
would be suitable investments for us or our advisor may create
special purpose entities to acquire properties that would be
suitable investments for us. Subsequently, we may acquire such
properties from such affiliates of our advisor. Any and all
acquisitions from affiliates of our advisor must be approved by
a majority of our directors, including a majority of our
independent directors, not otherwise interested in such
transaction as being fair and reasonable to us and at a price to
us that is no greater than the cost of the property to the
affiliate of our advisor (including acquisition fees and
expenses), unless a majority of the independent directors
determines that there is substantial justification for any
amount that exceeds such cost and that the difference is
reasonable. In no event will we acquire a property from an
affiliate of our advisor if the cost to us would exceed the
propertys current appraised value as determined by an
independent appraiser. In no event will our advisor or any of
its affiliates be paid more than one acquisition fee in
connection with any such transaction.
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Second, from time to time, we may borrow funds from affiliates
of our advisor, including our sponsor, as bridge financing to
enable us to acquire a property when offering proceeds alone are
insufficient to do so and third party financing has not been
arranged. Any and all such transactions must be approved by a
majority of our directors, including a majority of our
independent directors, not otherwise interested in such
transaction as fair, competitive and commercially reasonable,
and no less favorable to us than comparable loans between
unaffiliated parties.
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Finally, our advisor or its affiliates may pay costs on our
behalf, pending our reimbursement, or we may defer payment of
fees to our advisor or its affiliates, neither of which would be
considered a loan.
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Notwithstanding any of the foregoing, none of these restrictions
would preclude us from paying our advisor or its affiliates fees
or other compensation in connection with internalizing our
advisor if our board of directors determines an internalization
transaction is in the best interests of our stockholders. See
the section of this prospectus captioned Management
Compensation Becoming Self-Administered.
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3
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Q:
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Will you acquire properties in joint ventures, including
joint ventures with affiliates?
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A:
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It is possible that we may acquire properties through one or
more joint ventures in order to increase our purchasing power
and diversify our portfolio of properties in terms of geographic
region, property type and tenant industry group. Increased
portfolio diversification reduces the risk to investors as
compared to a program with less diversified investments. Our
joint ventures may be with affiliates of our advisor or with
non-affiliated third parties. Any joint venture with an
affiliate of our advisor must be approved by a majority of our
independent directors and the cost of our investment must be
supported by a current appraisal of the asset. Generally, we
will only enter into a joint venture in which we will approve
major decisions of the joint venture. If we do enter into joint
ventures, we may assume liabilities related to a joint venture
that exceed the percentage of our investment in the joint
venture.
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Q:
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Will the distributions I receive be taxable as ordinary
income?
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A:
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Generally, unless your investment is held in a qualified
tax-exempt account, distributions that you receive, including
distributions that are reinvested pursuant to our distribution
reinvestment plan, will be taxed as ordinary income to the
extent they are from current or accumulated earnings and
profits. We expect that some portion of your distributions in
any given year may not be subject to tax because depreciation
and other non-cash expenses reduce taxable income but do not
reduce cash available for distribution. In addition,
distributions may be made from other sources, such as borrowings
in anticipation of future operating cash flows or proceeds of
this offering, which would not be currently taxed. The portion
of your distribution that is not currently taxable is considered
a return of capital for tax purposes and will reduce the tax
basis of your investment. This, in effect, defers a portion of
your tax until your investment is sold or we are liquidated, at
which time you likely will be taxed at capital gains rates.
However, because each investors tax considerations are
different, we recommend that you consult with your tax advisor.
You also should review the section of this prospectus entitled
Federal Income Tax Considerations.
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Q:
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What will you do with the money raised in this offering
before you invest the proceeds in real estate?
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A:
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Until we invest the proceeds of this offering in real estate, we
may invest in short-term, highly liquid or other authorized
investments. We may not be able to invest the proceeds from this
offering in real estate promptly and such short-term investments
will not earn as high of a return as we expect to earn on our
real estate investments.
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Q:
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How does a best efforts offering work?
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A:
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When shares are offered to the public on a best
efforts basis, the dealer manager and the broker-dealers
participating in the offering are only required to use their
best efforts to sell the shares and have no firm commitment or
obligation to purchase any of the shares. Therefore, we may not
sell all of the shares that we are offering.
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Q:
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Who can buy shares?
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A:
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In order to buy shares of our common stock, you must meet our
minimum suitability standards, which generally require that you
have either (1) a net worth of at least $70,000 and a gross
annual income of at least $70,000, or (2) a net worth of at
least $250,000. For this purpose, net worth does not include
your home, home furnishings and automobiles. You may be required
to meet certain state suitability standards. In addition, all
investors must meet suitability standards determined by his or
her broker or financial advisor. You should carefully read the
more detailed description under Suitability
Standards immediately following the cover page of this
prospectus.
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Q:
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For whom might an investment in our shares be appropriate?
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A:
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An investment in our shares may be appropriate for you if, in
addition to meeting the suitability standards described above,
you seek to diversify your personal portfolio with a real
estate-based investment, seek to receive current income, and
seek the opportunity to achieve capital appreciation over an
investment horizon of more than seven years. An investment in
our shares has limited liquidity and therefore is not
appropriate if you may require liquidity within several years
from the date of your investment or seek a guaranteed stream of
income.
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4
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Q:
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May I make an investment through my IRA or other tax-deferred
account?
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A:
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Yes. You may make an investment through your IRA or other
tax-deferred account. In making these investment decisions, you
should consider, at a minimum, (1) whether the investment
is in accordance with the documents and instruments governing
your IRA, plan or other account, (2) whether the investment
would constitute a prohibited transaction under applicable law,
(3) whether the investment satisfies the fiduciary
requirements associated with your IRA, plan or other account,
(4) whether the investment will generate unrelated business
taxable income (UBTI) to your IRA, plan or other account,
(5) whether there is sufficient liquidity for such
investment under your IRA, plan or other account, and
(6) the need to value the assets of your IRA, plan or other
account annually or more frequently. You should note that an
investment in shares of our common stock will not, in itself,
create a retirement plan and that, in order to create a
retirement plan, you must comply with all applicable provisions
of the Internal Revenue Code of 1986, as amended (Internal
Revenue Code).
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Q:
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Is there any minimum investment required?
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A:
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The minimum investment generally is 250 shares. You may not
transfer any of your shares if such transfer would result in
your owning less than the minimum investment amount, unless you
transfer all of your shares. In addition, you may not transfer
or subdivide your shares so as to retain less than the number of
shares required for the minimum purchase. In order to satisfy
the minimum purchase requirements for retirement plans, unless
otherwise prohibited by state law, a husband and wife may
jointly contribute funds from their separate individual
retirement accounts (IRAs), provided that each such contribution
is made in increments of $1,000.
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After you have purchased the minimum investment amount in this
offering or have satisfied the minimum purchase requirement of
any other Cole-sponsored public real estate program, any
additional purchase must be in increments of at least
100 shares or made pursuant to our distribution
reinvestment plan, which may be in lesser amounts.
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Q:
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How do I subscribe for shares?
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A:
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If you choose to purchase shares in this offering, in addition
to reading this prospectus, you will need to complete and sign a
subscription agreement, similar to the one contained in this
prospectus as Appendix B, for a specific number of shares
and pay for the shares at the time you subscribe. After you
become a stockholder, you may purchase additional shares by
completing and signing an additional investment subscription
agreement, similar to the one contained in this prospectus as
Appendix C.
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Q:
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Who is the transfer agent?
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A:
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The name, address and telephone number of our transfer agent is
as follows:
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DST Systems,
Inc.
P.O. Box 219312
Kansas City, MO 64121-9312
(866) 907-2653
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To ensure that any account changes are made promptly and
accurately, all changes, including your address, ownership type
and distribution mailing address, should be directed to the
transfer agent.
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Q:
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Will I be notified of how my investment is doing?
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A:
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Yes. We will provide you with periodic updates on the
performance of your investment with us, including:
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three quarterly financial reports;
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an annual report;
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a annual Form 1099;
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supplements to the prospectus during the offering
period; and
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5
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notification to Maryland residents regarding the
sources of their distributions if such distributions are not
entirely from our funds from operations, which will be sent via
U.S. mail in connection with every third monthly distribution
statement and/or check, as applicable.
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Except as set forth above, we will provide this information to
you via one or more of the following methods, in our discretion
and with your consent, if necessary:
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U.S. mail or other courier;
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facsimile;
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electronic delivery, including email and/or CD-ROM;
or
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posting, or providing a link, on our affiliated
website, which is
www.colecapital.com
.
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Q:
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When will I get my detailed tax information?
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A:
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Your Form 1099 tax information will be placed in the mail
by January 31 of each year.
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Q:
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Who can help answer my questions?
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A:
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If you have more questions about the offering or if you would
like additional copies of this prospectus, you should contact
your registered representative or contact:
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Cole Capital
Corporation
2575 E. Camelback Road, Suite 500
Phoenix, Arizona 85016
(866) 907-2653
Attn: Investor Services
www.colecapital.com
6
PROSPECTUS
SUMMARY
This prospectus summary highlights some of the material
information contained elsewhere in this prospectus. Because it
is a summary, it may not contain all of the information that is
important to you. To understand this offering fully, you should
read the entire prospectus carefully, including the Risk
Factors section and the financial statements, before
making a decision to invest in our common stock.
Cole
Credit Property Trust IV, Inc.
Cole Credit Property Trust IV, Inc. is a Maryland
corporation, formed on July 27, 2010, which intends to
qualify as a REIT for federal income tax purposes beginning with
the taxable year ending December 31, 2012, or the first
year in which we commence material operations. We intend to use
substantially all of the net proceeds from this offering to
acquire and operate a diversified portfolio of core commercial
real estate investments primarily consisting of necessity retail
properties located throughout the United States, including
U.S. protectorates. We expect that our retail properties
primarily will be single-tenant properties and multi-tenant
power centers anchored by large, creditworthy
national or regional retailers. We expect that our retail
properties typically will be subject to long-term triple net or
double net leases, which means the tenant will be obligated to
pay for most of the expenses of maintaining the property.
Frequently, our leases will be guaranteed by the tenants
corporate parent. Through our investments in core commercial
real estate, we expect to achieve a relatively predictable and
stable stream of income, which will provide a principal source
of return for our investors in our common stock, and the
potential for capital appreciation in the value of our real
estate assets.
We also may invest in other income-producing properties, such as
office and industrial properties which may share certain core
characteristics with our retail investments, such as a principal
creditworthy tenant, a long-term net lease, and a strategic
location. We believe investments in these types of office and
industrial properties are consistent with our goal of providing
investors with a relatively stable stream of current income and
an opportunity for capital appreciation.
In addition, we may further diversify our portfolio by making
and investing in mortgage, mezzanine, bridge and other loans
secured, directly or indirectly, by the same types of properties
that we may acquire directly. We also may acquire majority or
minority interests in other entities (or business units of such
entities) with investment objectives similar to ours or with
management, investment or development capabilities that our
advisor deems desirable or advantageous to acquire. See the
section of this prospectus captioned Investment Objectives
and Policies Acquisition and Investment
Policies for a more detailed discussion of all of the
types of investments we may make.
We believe that our sponsors experience in assembling real
estate portfolios, which principally focus on national and
regional creditworthy tenants subject to long-term leases, will
provide us with a competitive advantage. We believe that another
competitive advantage is our ability to purchase properties for
cash and to close transactions quickly. Cole Capital
Corporation, the broker-dealer affiliate of our sponsor, had
raised approximately $4.0 billion on behalf of CCPT III as
of January 11, 2012, and we expect that, through their
well-developed distribution capabilities and relationships with
other broker-dealers, Cole Capital Corporation will be
successful in raising capital on our behalf in this offering.
Our offices are located at 2555 East Camelback Road,
Suite 400, Phoenix, Arizona 85016. Our telephone number is
866-907-2653.
Our fax number is 888-805-1070, and the
e-mail
address of our investor relations department is
investorservices@colecapital.com.
Additional information about us and our affiliates may be
obtained at
www.colecapital.com
, but the contents of that
site are not incorporated by reference in or otherwise a part of
this prospectus.
Our
Sponsor and our Advisor
Our sponsor is Cole Real Estate Investments, a trade name we use
to refer to a group of affiliated entities directly or
indirectly controlled by Christopher H. Cole, including Cole
Capital Advisors, Cole Capital Partners and other affiliates of
our advisor. Our advisor, CR IV Advisors, a Delaware limited
liability
7
company, is responsible for managing our affairs on a
day-to-day
basis, identifying and making acquisitions and investments on
our behalf, and recommending to our board of directors an
approach for providing our investors with liquidity. Our
chairman, chief executive officer and president, Christopher H.
Cole, is the indirect sole owner of our advisor. See
Summary of Prior Offerings below. Our
advisor will use its best efforts, subject to the oversight of
our board of directors, to, among other things, manage our
portfolio. Management of our portfolio will include making
decisions about the active management of our portfolio,
including decisions to acquire or dispose of real estate assets.
Our advisor is responsible for identifying and acquiring
potential real estate investments of our behalf. All
acquisitions of commercial properties will be evaluated for the
reliability and stability of their future income, as well as for
their potential for capital appreciation. We expect that our
advisor will consider the risk profile, credit quality and
reputation of potential tenants and the impact of each
particular acquisition as it relates to the portfolio as a
whole. Our board of directors has delegated to our advisor broad
authority to manage our business in accordance with our
investment objectives, strategy, guidelines, policies and
limitations; provided, however, that our board of directors will
exercise its fiduciary duties to our stockholders by overseeing
our advisors investment process.
Our
Dealer Manager
Cole Capital Corporation, which we refer to as our dealer
manager, is an affiliate of our sponsor and a member of FINRA.
Our dealer manager has distributed shares of many of our
sponsors prior real estate programs, and has built
relationships with a large number of broker-dealers throughout
the country, which participated in some or all of those prior
offerings. Our dealer manager will distribute the shares of our
common stock on a best efforts basis, and will
advise us regarding this offering, manage our relationships with
participating broker-dealers and financial advisors and provide
assistance in connection with compliance matters relating to the
offering, including compliance regarding any sales literature
that we may prepare.
Our Board
of Directors
We operate under the direction of our board of directors, the
members of which are accountable to us and our stockholders as
fiduciaries. We have three directors, Christopher H. Cole, J.
Marc Myers and Scott P. Sealy, Sr. Two of our directors,
Messrs. Myers and Sealy, are each independent directors. Our
charter requires that, upon and after the commencement of this
offering, a majority of our directors be independent of our
advisor. Our charter also provides that our independent
directors will be responsible for reviewing the performance of
our advisor and determining the compensation paid to our advisor
and its affiliates is reasonable. See the Conflicts of
Interest Certain Conflict Resolution
Procedures section of this prospectus. Our directors will
be elected annually by our stockholders.
Investment
Objectives
Our primary investment objectives are:
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to acquire quality commercial real estate properties, net leased
under long-term leases to creditworthy tenants, which provide
current operating cash flows;
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to provide reasonably stable, current income for you through the
payment of cash distributions; and
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to provide the opportunity to participate in capital
appreciation in the value of our investments.
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See the Investment Objectives and Policies section
of this prospectus for a more complete description of our
investment objectives and policies, and investment restrictions.
We may not achieve our investment objectives. See
Summary Risk Factors below.
8
Summary
Risk Factors
Following are some of the risks relating to your investment:
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The amount of distributions we may pay, if any, is uncertain.
Due to the risks involved in the ownership of real estate, there
is no guarantee of any return on your investment in our common
stock, and you may lose your investment.
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We are a blind pool, as we currently own no
properties and have not identified any specific properties for
purchase, and we have no operating history.
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This investment has limited liquidity. No public market
currently exists, and one may never exist, for shares of our
common stock. If you are able to sell your shares, you would
likely have to sell them at a substantial discount to their
market value.
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You should consider an investment in our common stock a
long-term investment. If we do not successfully implement our
exit strategy, you may suffer losses on your investment, or your
shares may continue to have limited liquidity.
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The offering price for our shares is not intended to reflect the
book value or net asset value of our investments, or our
expected cash flow. Until such time as our shares are valued by
our board of directors, the price of our shares is not intended
to reflect the net asset value of our shares.
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We may pay distributions from sources other than cash flow from
operations, including borrowings and proceeds from the sale of
our securities or asset sales, and we have no limits on the
amounts we may pay from such other sources. Payments of
distributions from sources other than cash flows from operations
may reduce the amount of capital we ultimately invest in real
estate and may negatively impact the value of your investment.
As a result, the amount of distributions paid at any time may
not reflect the current performance of our properties or our
current operating cash flows.
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This is a best efforts offering. If we are not
able to raise a substantial amount of capital in the near term,
we may have difficulties investing in properties and our ability
to achieve our investment objectives could be adversely affected.
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There are substantial conflicts of interest between us and our
advisor and its affiliates. Key persons associated with our
advisor perform similar duties for other Cole-sponsored programs
that may use investment strategies similar to ours creating
potential conflicts of interest when allocating investment
opportunities. In addition, our advisor and its affiliates have
substantial discretion in managing our operations, and we pay
them substantial fees.
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Although you will be provided with information about our
investments after the investments have been made, you will be
unable to evaluate the economic merit of future investments,
including how the proceeds from this offering will be invested.
This makes an investment in our shares speculative.
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Our board of directors may change our investment objectives and
certain investment policies without stockholder approval.
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We expect to incur debt, which could adversely impact your
investment if the value of the property securing the debt falls
or if we are forced to refinance the debt during adverse
economic conditions.
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We may suffer from delays in our advisor locating suitable
investments, which could adversely affect our ability to pay
distributions and the value of your investment.
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If we fail to qualify as a REIT, cash available for
distributions to be paid to you could decrease materially.
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For qualified accounts, if an investment in our shares
constitutes a prohibited transaction under ERISA, you may be
subject to the imposition of significant excise taxes and
penalties with respect to the amount invested.
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9
Before you invest in us, you should carefully read and consider
the more detailed Risk Factors section of this
prospectus.
Description
of Real Estate Investments
We currently do not own any investments, and our advisor has not
identified any investments we will make with the proceeds from
this offering. For information regarding the types of
investments we intend to make, see the section of this
prospectus captioned Investment Objectives and Policies
Acquisition and Investment Policies.
Borrowing
Policy
Our charter limits our aggregate borrowings to 75% of the cost
(before deducting depreciation or other non-cash reserves) of
our gross assets, unless excess borrowing is approved by a
majority of the independent directors and disclosed to our
stockholders in the next quarterly report along with the
justification for such excess borrowing. Our board of directors
has adopted a policy to further limit our borrowings to 60% of
the greater of cost (before deducting depreciation or other
non-cash reserves) or fair market value of our gross assets,
unless excess borrowing is approved by a majority of the
independent directors and disclosed to our stockholders in the
next quarterly report along with the justification for such
excess borrowing. There is no limitation on the amount we may
borrow against any single improved property.
Estimated
Use of Proceeds of This Offering
Depending primarily on the number of shares we sell in this
offering and assuming all shares sold under our distribution
reinvestment plan are sold at $9.50 per share, we estimate for
each share sold in this offering that between approximately
88.1% (assuming all shares available under our distribution
reinvestment plan are sold) and approximately 86.7% (assuming no
shares available under our distribution reinvestment plan are
sold) of gross offering proceeds will be available for the
purchase of real estate and other real estate-related
investments, including repayment of any indebtedness incurred in
respect of such purchases. We will use the remainder of the
offering proceeds to pay the costs of the offering, including
selling commissions and the dealer manager fee, and fees and
expenses of our advisor in connection with acquiring properties.
We may pay distributions from proceeds raised in this offering
in anticipation of future cash flows, and we have not placed a
limit on the amount of net proceeds we may use to pay
distributions. We will not pay selling commissions or a dealer
manager fee on shares sold under our distribution reinvestment
plan. The table below sets forth our estimated use of proceeds
from this offering:
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Minimum Offering
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Maximum Offering
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Maximum Offering
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(Not Including Distribution
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(Including Distribution
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(Not Including Distribution
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Reinvestment Plan)
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Reinvestment Plan)
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Reinvestment Plan)
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Amount
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Percent
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Amount
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Percent
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Amount
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Percent
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Gross Offering Proceeds
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$
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2,500,000
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100
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%
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$
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2,975,000,000
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100
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%
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$
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2,500,000,000
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100
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%
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Less Public Offering Expenses:
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Selling Commissions and Dealer Manager Fee
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225,000
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9.0
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%
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225,000,000
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7.6
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%
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225,000,000
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9.0
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%
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Other Organization and Offering Expenses
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50,000
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2.0
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%
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59,500,000
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2.0
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%
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50,000,000
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2.0
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%
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Amount Available for Investment
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2,225,000
|
|
|
|
89.0
|
%
|
|
|
2,690,500,000
|
|
|
|
90.4
|
%
|
|
|
2,225,000,000
|
|
|
|
89.0
|
%
|
Acquisition and Development:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition Fee
|
|
|
43,372
|
|
|
|
1.7
|
%
|
|
|
52,446,394
|
|
|
|
1.8
|
%
|
|
|
43,372,320
|
|
|
|
1.8
|
%
|
Acquisition Expenses
|
|
|
10,843
|
|
|
|
0.4
|
%
|
|
|
13,111,598
|
|
|
|
0.4
|
%
|
|
|
10,843,080
|
|
|
|
0.4
|
%
|
Initial Working Capital Reserve
|
|
|
2,169
|
|
|
|
0.1
|
%
|
|
|
2,622,320
|
|
|
|
0.1
|
%
|
|
|
2,168,616
|
|
|
|
0.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount Invested in Assets
|
|
$
|
2,168,616
|
|
|
|
86.8
|
%
|
|
$
|
2,622,319,688
|
|
|
|
88.1
|
%
|
|
$
|
2,168,615,984
|
|
|
|
86.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10
Conflicts
of Interest
Our advisor will experience potential conflicts of interest in
connection with the management of our business affairs,
including the following:
|
|
|
|
|
Our advisor and its affiliates will receive substantial fees in
connection with the services provided to us, and, while those
fees are approved on an annual basis by our independent
directors, the approval process may be impacted by the fact that
our stockholders invested with the understanding and expectation
that an affiliate of Cole Real Estate Investments would act as
our advisor;
|
|
|
|
The management personnel of our advisor, each of whom also makes
investment decisions for other Cole-sponsored programs, must
determine which investment opportunities to recommend to us or
another Cole-sponsored program or joint venture, many of which
have investment objectives similar to ours, and such persons
must determine how to allocate their time and other resources
among us and the other Cole-sponsored programs; and
|
|
|
|
We have retained Cole Realty Advisors, Inc. (Cole Realty
Advisors), an affiliate of our advisor, to manage and lease some
or all of our properties.
|
Our executive officers and the chairman of our board of
directors also will face conflicts similar to those described
above because of their affiliation with our advisor and other
Cole-sponsored programs. See the Conflicts of
Interest section of this prospectus for a detailed
discussion of the various conflicts of interest relating to your
investment, as well as the procedures that we have established
to mitigate a number of these potential conflicts.
The following chart shows the ownership structure of the various
Cole entities that are affiliated with our advisor immediately
prior to this offering.
|
|
|
(1)
|
|
Cole Holdings Corporation, an affiliate of our sponsor,
currently owns 20,000 shares of our common stock, which
represents 100% of the outstanding shares of common stock, as of
January 24, 2012. Pursuant to our charter, Cole Holdings
Corporation is prohibited from selling the 20,000 shares of
our common stock for so long as Cole Real Estate Investments
remains our sponsor; provided, however, that Cole Holdings
Corporation may transfer ownership of all or a portion of the
20,000 shares of our common stock to other affiliates of
our sponsor. After this offering, Cole Holdings Corporation will
own between 8% of our common stock, assuming a minimum offering,
and less than 0.01% of our common stock, assuming a maximum
offering, including the sale of 50,000,000 shares pursuant
to the distribution reinvestment plan.
|
11
|
|
|
(2)
|
|
CR IV Advisors currently owns a 0.1% limited partner interest in
our operating partnership. After we begin admitting investors in
this offering, that limited partner interest will be reduced. CR
IV Advisors is a disregarded entity for federal tax purposes,
and its activity will be reported on the federal tax return of
Cole Holdings Corporation.
|
|
(3)
|
|
Our operating partnership will file its own federal tax return,
separate from our federal tax return.
|
Summary
of Prior Offerings
The Prior Performance Summary section of this
prospectus contains a discussion of the programs sponsored by
Cole Real Estate Investments from January 1, 2001 through
December 31, 2010. Certain financial results and other
information relating to such programs with investment objectives
similar to ours are also provided in the Prior Performance
Tables included as Appendix A to this prospectus. The
prior performance of the programs previously sponsored by Cole
Real Estate Investments is not necessarily indicative of the
results that we will achieve. For example, most of the prior
programs were privately offered and did not bear the additional
costs associated with being a publicly held entity. Therefore,
you should not assume that you will experience returns
comparable to those experienced by investors in prior real
estate programs sponsored by Cole Real Estate Investments.
Concurrent
Offerings
Our sponsor, Cole Real Estate Investments, is sponsoring CCPT
III, which currently is raising capital pursuant to a follow-on
public offering of shares of its common stock, CCIT, which
currently is raising capital pursuant to an initial public
offering of shares of its common stock, and Cole Income NAV
Strategy, which commenced its initial public offering in
December 2011. For additional information regarding concurrent
offerings sponsored by Cole Real Estate Investments, see the
section of this prospectus captioned Conflicts of
Interest Interests in Other Real Estate Programs and
Other Concurrent Offerings.
The
Offering
We are offering up to 250,000,000 shares of common stock in
our primary offering on a best efforts basis at
$10.00 per share. Discounts are available for certain categories
of purchasers, as described in the Plan of
Distribution section of this prospectus. We also are
offering under this prospectus up to 50,000,000 additional
shares of common stock under our distribution reinvestment plan
at a purchase price of $9.50 per share during this offering, and
until such time as our board of directors determines a
reasonable estimate of the value of our shares. Thereafter, the
purchase price per share under our distribution reinvestment
plan will be the most recent estimated value per share as
determined by our board of directors as described in the
Summary of Distribution Reinvestment Plan section of
this prospectus. We reserve the right to reallocate the shares
of common stock we are offering between our primary offering and
our distribution reinvestment plan. We will offer shares of
common stock in our primary offering until the earlier of
,
2014, which is two years from the effective date of this
offering, or the date we sell 300,000,000 shares; provided,
however, that our board of directors may terminate this offering
at any time or extend the offering. If we decide to extend the
primary offering beyond two years from the date of this
prospectus, we will provide that information in a prospectus
supplement; however, in no event will we extend this offering
beyond 180 days after the third anniversary of the initial
effective date. Nothing in our organizational documents
prohibits us from engaging in additional subsequent public
offerings of our stock. We may sell shares under the
distribution reinvestment plan beyond the termination of our
primary offering until we have sold 50,000,000 shares
through the reinvestment of distributions, but only if there is
an effective registration statement with respect to the shares.
Pursuant to the Securities Act, and in some states, we may not
be able to continue the offering for these periods without
filing a new registration statement, or in the case of shares
sold under the distribution reinvestment plan, renew or extend
the registration statement in such state.
We will not sell any shares unless we sell a minimum of
250,000 shares of our common stock by
,
2013, which is one year from the effective date of this
offering. Our directors, officers, advisor and their respective
affiliates may purchase for investment shares of our common
stock in this offering. However,
12
purchases by our directors, officers, advisor or their
respective affiliates will not count toward meeting this minimum
threshold. Pending satisfaction of this condition, all
subscription payments will be placed in an account held by the
escrow agent, UMB Bank, N.A., located at 1010 Grand Boulevard,
4th Floor, Kansas City, Missouri 64106, in trust for
subscribers benefit, pending release to us. If we do not
sell at least 250,000 shares of our common stock to the
public in our primary offering
by
,
2013, which is one year from the effective date of this
offering, we will terminate this offering and promptly return
all subscribers funds, without a deduction for escrow
expenses, within ten days thereafter. Funds in escrow will be
invested in short-term investments that mature on or before
,
2013, or that can be readily sold or otherwise disposed of for
cash by such date without any material reduction of the offering
proceeds invested. You will not receive interest on your
subscription payment unless we fail to sell the minimum number
of shares, in which case, we will return your subscription
payment to you with accrued interest. If you are a resident of
Pennsylvania, see the Plan of Distribution
Special Notice to Pennsylvania Investors section of this
prospectus for special escrow requirements relating to the sale
of shares to Pennsylvania investors.
Compensation
to Our Advisor and its Affiliates
Our advisor and its affiliates will receive compensation and
reimbursement for services relating to this offering and the
investment, management and disposition of our assets. All of the
items of compensation are summarized in the table below. We will
not pay a separate fee for financing, leasing or property
management, although we may rely on our advisor or its
affiliates to provide such services to us. See the
Management Compensation section of this prospectus
for a more detailed description of the compensation we will pay
to our advisor and its affiliates. The selling commissions and
dealer manager fee may vary for different categories of
purchasers. See the Plan of Distribution section of
this prospectus for a more detailed discussion of the selling
commissions and dealer manager fees we will pay. The table below
assumes the shares are sold through distribution channels
associated with the highest possible selling commissions and
dealer manager fees, and accounts for the fact that shares are
sold through our distribution reinvestment plan at $9.50 per
share with no selling commissions and no dealer manager fee.
|
|
|
|
|
|
|
|
|
Estimated Amount for Minimum
|
Type of Compensation
|
|
Determination of Amount
|
|
Offering/Maximum Offering
|
|
Offering Stage
|
Selling Commissions
|
|
We generally will pay to our affiliated dealer manager, Cole
Capital Corporation, 7% of the gross proceeds of our primary
offering. Cole Capital Corporation will reallow 100% of the
selling commissions to participating broker-dealers. We will not
pay any selling commissions with respect to sales of shares
under our distribution reinvestment plan.
|
|
$175,000/$175,000,000
|
Dealer Manager Fee
|
|
We generally will pay to Cole Capital Corporation 2% of the
gross proceeds of our primary offering. Cole Capital Corporation
may reallow all or a portion of its dealer manager fee to
participating broker-dealers. We will not pay a dealer manager
fee with respect to sales of shares under our distribution
reinvestment plan.
|
|
$50,000/$50,000,000
|
13
|
|
|
|
|
|
|
|
|
Estimated Amount for Minimum
|
Type of Compensation
|
|
Determination of Amount
|
|
Offering/Maximum Offering
|
|
Reimbursement of Other Organization and Offering Expenses
|
|
Our advisor, CR IV Advisors, will incur or pay our organization
and offering expenses (excluding selling commissions and the
dealer manager fee). We will then reimburse our advisor for
these amounts up to 2.0% of aggregate gross offering proceeds,
including proceeds from sales of shares under our distribution
reinvestment plan.
|
|
$50,000/$59,500,000
Of the $59,500,000, we expect to reimburse our advisor up to $25,000,000 (1.0% of the gross offering proceeds of our primary offering, or 0.8% of aggregate gross offering proceeds, including proceeds from shares issued under our distribution reinvestment plan) to cover offering expenses that are deemed to be underwriting expenses, and we expect to reimburse our advisor up to $34,500,000 (1.2% of aggregate gross offering proceeds, including proceeds from sales of shares under our distribution reinvestment plan) to cover non-underwriting organization and offering expenses.
|
Acquisition and Operations Stage
|
Acquisition Fee
|
|
We will pay to our advisor 2% of: (i) the contract purchase
price of each property or asset; (ii) the amount paid in respect
of the development, construction or improvement of each asset we
acquire; (iii) the purchase price of any loan we acquire; and
(iv) the principal amount of any loan we originate.
|
|
$43,372/$52,446,394 assuming no debt or $173,489/$209,785,575
assuming leverage of 75% of the contract purchase price.
|
Advisory Fee
|
|
We will pay to our advisor a monthly advisory fee based upon our
monthly average invested assets. Monthly average invested assets
will equal the average book value of our assets invested,
directly or indirectly, in equity interests in and loans secured
by our real estate, before reserves for depreciation and
amortization or bad debts or other similar non-cash reserves,
other than impairment charges, computed
|
|
The annualized advisory fee rate, and the actual dollar amounts,
are dependent upon the amount of our monthly average invested
assets and, therefore, cannot be determined at the present time.
Based on the following assumed levels of monthly average
invested assets, our annualized advisory fee will be as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
by taking the average of such values at the end of each business
day, over the course of the month. After our board of directors
begins to determine the estimated per share value of our common
stock, the monthly
|
|
Monthly
Average
Invested
Assets
|
|
|
Annualized
Effective
Fee Rate
|
|
|
|
Annualized
Advisory
Fee
|
|
|
|
advisory fee will be based upon the value
|
|
$1 billion
|
|
|
0.75%
|
|
|
$
|
7,500,000
|
|
|
|
of our assets invested, directly or
|
|
$2 billion
|
|
|
0.75%
|
|
|
$
|
15,000,000
|
|
|
|
indirectly, in equity interests in and loans
|
|
$3 billion
|
|
|
0.7333%
|
|
|
$
|
22,000,000
|
|
|
|
secured by our real estate as determined
|
|
$4 billion
|
|
|
0.7250%
|
|
|
$
|
29,000,000
|
|
|
|
by our board of directors.
|
|
$5 billion
|
|
|
0.7100%
|
|
|
$
|
35,500,000
|
|
|
|
|
|
|
|
|
The advisory fee will be calculated according to the following
fee schedule:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Monthly
|
|
|
|
|
|
|
Average
|
|
Annualized
|
|
|
|
|
Invested
|
|
Fee Rate for
|
|
|
|
|
Assets Range
|
|
Each Range
|
|
|
|
|
|
$0 $2 billion
|
|
|
0.75%
|
|
|
|
|
|
over $2 billion $4 billion
|
|
|
0.70%
|
|
|
|
|
|
over $4 billion
|
|
|
0.65%
|
|
|
|
14
|
|
|
|
|
|
|
|
|
Estimated Amount for Minimum
|
Type of Compensation
|
|
Determination of Amount
|
|
Offering/Maximum Offering
|
|
Operating Expenses
|
|
We will reimburse our advisor for acquisition expenses incurred in acquiring each property or in the origination or acquisition of a loan. We expect these expenses to be approximately 0.5% of the purchase price of each property or the amount of each loan; provided, however, that acquisition expenses are not included in the contract purchase price of a property.
We will also reimburse our advisor for the expenses incurred in connection with its provision of advisory and administrative services, including related personnel costs and payments to third party service providers; provided, however, that we will not reimburse our advisor for the salaries and benefits paid to our personnel in connection with services for which our advisor receives acquisition fees, and we will not reimburse our advisor for salaries and benefits paid to our executive officers.
|
|
$10,843/$13,111,598 estimated for reimbursement of acquisition
expenses assuming no debt or $35,600/$43,048,000 estimated for
reimbursement of acquisition expenses assuming leverage of 75%
of the contract purchase price. For all other reimbursements,
actual amounts are dependent upon the expenses incurred and,
therefore, cannot be determined at the present time.
|
Liquidation/Listing Stage
|
Disposition Fee
|
|
For substantial assistance in connection with the sale of
properties, we will pay our advisor or its affiliates an amount
equal to up to one-half of the brokerage commission paid on the
sale of property, not to exceed 1% of the contract price of the
property sold; provided, however, in no event may the
disposition fee paid to our advisor or its affiliates, when
added to the real estate commissions paid to unaffiliated third
parties, exceed the lesser of the customary competitive real
estate commission or an amount equal to 6% of the contract sales
price.
|
|
Actual amounts are dependent upon the contract price of
properties sold and, therefore, cannot be determined at the
present time. Because the disposition fee is based on a fixed
percentage of the contract price for sold properties the actual
amount of the disposition fees cannot be determined at the
present time.
|
Subordinated Performance Fee
|
|
After investors have received a return of their net capital
invested and an 8% annual cumulative, non-compounded return,
then our advisor will be entitled to receive 15% of the
remaining net sale proceeds. We cannot assure you that we will
provide this 8% return, which we have disclosed solely as a
measure for our advisors incentive compensation. We will
pay a subordinated fee under only one of the following events:
(i) if our shares are listed on a national securities
exchange; (ii) if our company is sold or our assets are
liquidated; or (iii) upon termination of the advisory
agreement.
|
|
Actual amounts are dependent upon results of operations and,
therefore, cannot be determined at the present time. There is no
limit on the aggregate amount of these payments.
|
Distributions
To qualify as a REIT for federal income tax purposes, we are
required to, among other things, make aggregate annual
distributions to our stockholders of at least 90% of our annual
taxable income (which does not necessarily equal net income as
calculated in accordance with accounting principles generally
accepted in the United States (GAAP)). Our board of directors
may authorize distributions in excess of those required for us
to
15
maintain REIT status, depending on our present and reasonably
projected future cash flow from operations and such other
factors as our board of directors deems relevant. We have not
established a minimum distribution level. Distributions will be
paid to our stockholders as of the record date or dates selected
by our board of directors. We expect that our board of directors
will declare distributions with a daily record date, and pay
distributions monthly in arrears. In the event we do not have
sufficient cash flow from operations to make distributions, we
may borrow, use proceeds from this offering, issue additional
securities or sell assets in order to fund distributions, and we
have no limits on the amounts we may pay from such other
sources. Payments of distributions from sources other than cash
flows from operations may reduce the amount of capital we
ultimately invest in properties, and negatively impact the value
of your investment. As a result, the amount of distributions
paid at any time may not reflect the performance of our
properties or our current operating cash flow.
Liquidity
Opportunities
Our board of directors will consider future liquidity
opportunities, which may include the sale of our company, the
sale of all or substantially all of our assets, a merger or
similar transaction, the listing of our shares of common stock
for trading on a national securities exchange or an alternative
strategy that will result in a significant increase in the
opportunities for stockholders to dispose of their shares. We
expect to engage in a strategy to provide our investors with
liquidity at a time and in a method recommended by our advisor
and determined by our independent directors to be in the best
interests of our stockholders. As we are unable to determine
what macro- or micro-economic factors may affect the decisions
our board of directors make in the future with respect to any
potential liquidity opportunity, we have not selected a fixed
time period or determined criteria for any such decisions. As a
result, while our board of directors will consider a variety of
options to provide stockholders with liquidity throughout the
life of this program, there is no requirement that we commence
any such action on or before a specified date. Stockholder
approval would be required for the sale of all or substantially
all of our assets, or the sale or merger of our company.
Distribution
Reinvestment Plan
Our board of directors has approved a distribution reinvestment
plan, pursuant to which you may have the distributions you
receive from us reinvested in additional shares of our common
stock. The purchase price per share under our distribution
reinvestment plan will be $9.50 per share during this offering
and until such time as our board of directors determines a
reasonable estimate of the value of our shares. Thereafter, the
purchase price per share under our distribution reinvestment
plan will be the most recent estimated value per share as
determined by our board of directors. No sales commissions or
dealer manager fees will be paid with respect to shares sold
under our distribution reinvestment plan.
If you participate in the distribution reinvestment plan, you
will not receive the cash from your distributions, other than
special distributions that are designated by our board of
directors. As a result, you may have a tax liability with
respect to your share of our taxable income, but you will not
receive cash distributions to pay such liability.
Share
Redemption Program
Our board of directors has adopted a share redemption program to
enable you to sell your shares to us in limited circumstances.
Our share redemption program would permit you to sell your
shares back to us after you have held them for at least one
year, subject to the significant conditions and limitations
summarized below and described in more detail in the section
captioned Description of Shares Share
Redemption Program.
Our share redemption program includes numerous restrictions that
limit your ability to sell your shares. Generally, you must have
held your shares for at least one year in order to participate
in our share redemption program. Subject to funds being
available, we will further limit the number of shares redeemed
pursuant to our share redemption program as follows: (1) we
will not redeem in excess of 5% of the weighted average number
of shares outstanding during the trailing 12 months prior
to the redemption date (provided, however, that while shares
subject to a redemption requested upon the death of a
stockholder will be included in calculating the maximum number
of shares that may be redeemed, shares subject to a redemption
requested
16
upon the death of a stockholder will not be subject to the cap);
and (2) funding for the redemption of shares will be
limited to the net proceeds we receive from the sale of shares
under our distribution reinvestment plan. In an effort to
accommodate redemption requests throughout the calendar year, we
intend to limit quarterly redemptions to approximately 1.25% of
the weighted average number of shares outstanding during the
trailing
12-month
period (provided, however, that while shares subject to a
redemption requested upon the death of a stockholder will be
included in calculating the maximum number of shares that may be
redeemed, shares subject to a redemption requested upon the
death of a stockholder will not be subject to the cap), and
funding for redemptions for each quarter generally will be
limited to the net proceeds we receive from the sale of shares
in the respective quarter under our distribution reinvestment
plan; however, our board of directors may waive these quarterly
limitations in its sole discretion, subject to the 5% cap on the
number of shares we may redeem during the respective trailing
12 months period. Any of the foregoing limits might prevent
us from accommodating all redemption requests made in any
quarter, in which case quarterly redemptions will be made pro
rata. Following such redemption period, if you would like to
resubmit the unsatisfied portion of the prior redemption request
for redemption, you must submit a new request for redemption of
such shares prior to the last day of the new quarter.
Unfulfilled requests for redemption will not be carried over
automatically to subsequent redemption periods.
During the term of this offering, and until such time as our
board of directors determines a reasonable estimate of the value
of our shares, the redemption price per share (other than for
shares purchased pursuant to our distribution reinvestment plan)
will depend on the price you paid for your shares and the length
of time you have held such shares as follows: after one year
from the purchase date, 95% of the amount you paid for each
share; after two years from the purchase date, 97.5% of the
amount you paid for each share; and after three years from the
purchase date, 100% of the amount you paid for each share.
During this time period, the redemption price for shares
purchased pursuant to our distribution reinvestment plan will be
100% of the amount you paid for each share. After such time as
our board of directors has determined a reasonable estimate of
the value of our shares, the per share redemption price (other
than for shares purchased pursuant to our distribution
reinvestment plan) will depend on the length of time you have
held such shares as follows: after one year from the purchase
date, 95% of the most recent estimated value of each share;
after two years from the purchase date, 97.5% of the most recent
estimated value of each share; and after three years from the
purchase date, 100% of the most recent estimated value of each
share. During this time period, the redemption price for shares
purchased pursuant to our distribution reinvestment plan will be
100% of the most recent estimated value of each share.
Upon receipt of a request for redemption, we may conduct a
Uniform Commercial Code search to ensure that no liens are held
against the shares. We will bear any costs in conducting the
Uniform Commercial Code search. We will not redeem any shares
that are subject to a lien.
Our board of directors may amend, suspend or terminate the share
redemption program at any time upon 30 days notice to our
stockholders.
Cole
Operating Partnership IV, LP
We are structured as an umbrella partnership real estate
investment trust (UPREIT). As such, we expect to own
substantially all of our assets through Cole Operating
Partnership IV, LP (CCPT IV OP), our operating partnership.
We may, however, own assets directly, through subsidiaries of
CCPT IV OP or through other entities. We are the sole general
partner of CCPT IV OP, and our advisor is the initial limited
partner of CCPT IV OP.
ERISA
Considerations
You may make an investment in our shares through your IRA or
other tax-deferred retirement account. However, any retirement
plan trustee or individual considering purchasing shares for a
retirement plan or an individual retirement account should read
the Investment by Tax-Exempt Entities and ERISA
Considerations section of this prospectus very carefully.
17
Description
of Shares
Uncertificated
Shares
Under our charter, we are authorized to issue shares of our
common stock without certificates unless our board of directors
determines otherwise. Therefore, we do not intend to issue
shares of common stock in certificated form. Our transfer agent
will maintain a stock ledger that contains the name and address
of each stockholder and the number of shares that the
stockholder holds. Stockholders wishing to transfer shares of
our stock may request an application for transfer by contacting
us. See the section of this prospectus captioned Where You
Can Find More Information. With respect to transfers of
uncertificated stock, we will continue to treat the stockholder
registered on our stock ledger as the owner of the shares until
the record owner and the new owner deliver a properly executed
application for transfer to our transfer agent at the address
set forth in the application for transfer. Any questions
regarding the transferability of shares should be directed to
our transfer agent, whose contact information is set forth on
page 5 of this prospectus and in the application for
transfer.
Stockholder
Voting Rights and Limitations
We will hold annual meetings of our stockholders for the purpose
of electing our directors and conducting other business matters
that may be properly presented at such meetings. We may also
call special meetings of stockholders from time to time. You are
entitled to one vote for each share of common stock you own.
Restriction
on Share Ownership
Our charter contains restrictions on ownership of the shares
that prevent any one person from owning more than 9.8% in value
of the aggregate of our outstanding shares or more than 9.8% (in
value or number of shares, whichever is more restrictive), of
the aggregate of our outstanding shares of common stock, unless
exempted by our board of directors. These restrictions are
designed, among other purposes, to enable us to comply with
ownership restrictions imposed on REITs by the Internal Revenue
Code. These restrictions may discourage a takeover that could
otherwise result in a premium price to our stockholders. For a
more complete description of the restrictions on the ownership
of our shares, see the Description of Shares section
of this prospectus. Our charter also limits your ability to
transfer your shares unless the transferee meets the minimum
suitability standards regarding income
and/or
net
worth and the transfer complies with our minimum purchase
requirements, which are described in the Suitability
Standards section of this prospectus.
Investment
Company Act Considerations
We intend to conduct our operations, and the operations of our
operating partnership, and any other subsidiaries, so that no
such entity meets the definition of an investment
company under Section 3(a)(1) of the Investment
Company Act. Under the Investment Company Act, in relevant part,
a company is an investment company if:
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pursuant to Section 3(a)(1)(A), it is, or holds itself out
as being, engaged primarily, or proposes to engage primarily, in
the business of investing, reinvesting or trading in
securities; or
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pursuant to Section 3(a)(1)(C), it is engaged, or proposes
to engage, in the business of investing, reinvesting, owning,
holding or trading in securities and owns or proposes to acquire
investment securities having a value exceeding 40%
of the value of its total assets (exclusive of
U.S. government securities and cash items) on an
unconsolidated basis. Investment securities excludes
U.S. Government securities and securities of majority owned
subsidiaries that are not themselves investment companies and
are not relying on the exception from the definition of
investment company under Section 3(c)(1) or Section 3(c)(7)
of the Investment Company Act.
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We intend to acquire a diversified portfolio of income-producing
real estate assets; however, our portfolio may include, to a
much lesser extent, other real estate-related investments. We
also may acquire real estate assets through investments in joint
venture entities, including joint venture entities in which we
may not own a controlling interest. We anticipate that our
assets generally will be held in wholly and majority-owned
subsidiaries of the company, each formed to hold a particular
asset. We intend to monitor our operations and our assets on an
ongoing basis in order to ensure that neither we, nor any of our
subsidiaries, meet the definition of investment
company under Section 3(a)(1) of the Investment
Company Act.
18
RISK
FACTORS
An investment in our common stock involves various risks and
uncertainties. You should carefully consider the following risk
factors in conjunction with the other information contained in
this prospectus before purchasing our common stock. The risks
discussed in this prospectus can adversely affect our business,
operating results, prospects and financial condition, and cause
the value of your investment to decline. The risks and
uncertainties discussed below are not the only ones we face but
do represent those risks and uncertainties that we believe are
most significant to our business, operating results, prospects
and financial condition. You should carefully consider these
risks together with all of the other information included in
this prospectus before you decide to purchase any shares of our
common stock.
Risks
Related to an Investment in Cole Credit Property Trust IV,
Inc.
We
have no prior operating history or substantial financing
sources. Further, this is a blind pool, as we
currently own no properties and have not identified any specific
properties for purchase. For this and other reasons, an
investment in our shares is speculative
We are a newly formed entity with no operating history. As of
the date of this prospectus, we have not made any investments in
real estate or otherwise and do not own any properties or have
any operations or financing from sources other than affiliates
of our advisor. Since we currently own no properties and have
not identified any specific properties for purchase, this is a
blind pool. You will not be able to evaluate the
economic merit of our investments until after the investments
have been made. As a result, an investment in our shares is
speculative.
You should consider our prospects in light of the risks,
uncertainties and difficulties frequently encountered by
companies that are, like us, in their early stage of
development. To be successful in this market, we and our advisor
must, among other things:
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identify and acquire investments that further our investment
objectives;
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increase awareness of the Cole Credit Property Trust IV,
Inc. name within the investment products market;
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expand and maintain our network of licensed broker-dealers and
others who sell shares on our behalf and other agents;
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rely on our advisor and its affiliates to attract, integrate,
motivate and retain qualified personnel to manage our
day-to-day
operations;
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respond to competition for our targeted real estate and other
investments as well as for potential investors;
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rely on our advisor and its affiliates to continue to build and
expand our operations structure to support our business; and
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be continuously aware of, and interpret, marketing trends and
conditions.
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We may not succeed in achieving these goals, and our failure to
do so could cause you to lose all or a portion of your
investment.
An
investment in our shares will have limited liquidity. There is
no public trading market for our shares and there may never be
one; therefore, it will be difficult for you to sell your
shares. You should purchase our shares only as a long-term
investment.
There currently is no public market for our common stock and
there may never be one. In addition, we do not have a fixed date
or method for providing stockholders with liquidity. If you are
able to find a buyer for your shares, you will likely have to
sell them at a substantial discount to your purchase price. It
also is likely that your shares would not be accepted as the
primary collateral for a loan. You should purchase our shares
only as a long-term investment (more than seven years) because
of the generally illiquid nature of the
19
shares. See the sections captioned Suitability
Standards, Description of Shares
Restrictions on Ownership and Transfer and
Description of Shares Share
Redemption Program elsewhere in this prospectus for a
more complete discussion on the restrictions on your ability to
transfer your shares.
You
are limited in your ability to sell your shares pursuant to our
share redemption program and may have to hold your shares for an
indefinite period of time.
Our share redemption program includes numerous restrictions that
limit your ability to sell your shares. Generally, you must have
held your shares for at least one year in order to participate
in our share redemption program. Subject to funds being
available, we will further limit the number of shares redeemed
pursuant to our share redemption program as follows: (1) we
will not redeem in excess of 5% of the weighted average number
of shares outstanding during the trailing 12 months prior
to the redemption date (provided, however, that while shares
subject to a redemption requested upon the death of a
stockholder will be included in calculating the maximum number
of shares that may be redeemed, shares subject to a redemption
requested upon the death of a stockholder will not be subject to
the cap); and (2) funding for the redemption of shares will
be limited to the net proceeds we receive from the sale of
shares under our distribution reinvestment plan. In an effort to
accommodate redemption requests throughout the calendar year, we
intend to limit quarterly redemptions to approximately 1.25% of
the weighted average number of shares outstanding during the
trailing
12-month
period (provided, however, that while shares subject to a
redemption requested upon the death of a stockholder will be
included in calculating the maximum number of shares that may be
redeemed, shares subject to a redemption requested upon the
death of a stockholder will not be subject to the cap), and
funding for redemptions for each quarter generally will be
limited to the net proceeds we receive from the sale of shares
in the respective quarter under our distribution reinvestment
plan; however, our board of directors may waive these quarterly
limitations in its sole discretion, subject to the 5% cap on the
number of shares we may redeem during the respective trailing
12 months period. Any of the foregoing limits might prevent
us from accommodating all redemption requests made in any fiscal
quarter or in any
12-month
period. Our board of directors may amend the terms of, suspend,
or terminate our share redemption program without stockholder
approval upon 30 days prior written notice or reject any
request for redemption. See the Description of
Shares Share Redemption Program section
of this prospectus for more information about the share
redemption program. These restrictions severely limit your
ability to sell your shares should you require liquidity, and
limit your ability to recover the value you invested or the fair
market value of your shares.
Two prior real estate programs sponsored by Cole Real Estate
Investments have suspended redemptions under their respective
share redemption programs, although one of the programs
subsequently resumed its share redemption program. The board of
directors of Cole Credit Property Trust, Inc. (CCPT
I) determined that there was an insufficient amount of cash
available for CCPT I to fulfill redemption requests during the
years ended December 31, 2008, 2009, 2010 and 2011. CCPT I
continues to accept redemption requests which are considered for
redemption if and when sufficient cash is available for CCPT I
to fund redemptions. The board of directors of CCPT I will
determine, at the beginning of each fiscal year, the maximum
amount of shares that CCPT I may redeem during that year.
Requests relating to approximately 313,000 shares remained
unfulfilled as of September 30, 2011, representing
approximately $2.4 million in unfulfilled requests, based
on the most recent estimated value of $7.65 per share. On
November 10, 2009, CCPT IIs board of directors voted
to temporarily suspend CCPT IIs share redemption program
other than for requests made upon the death of a stockholder.
CCPT IIs board of directors considered many factors in
making this decision, including the expected announcement of an
estimated value of CCPT IIs common stock in June 2010 and
continued uncertainty in the economic environment and credit
markets. One June 22, 2010, CCPT IIs board of
directors reinstated the share redemption program, with certain
amendments, effective August 1, 2010. During the three
months ended September 30, 2011, CCPT II received valid
redemption requests relating to approximately 5.8 million
shares, including approximately 1.9 million shares that had
been submitted in previous periods, and, subsequent to
September 30, 2011, requests relating to approximately
1.5 million shares were redeemed for $14.2 million at
an average price of $9.27 per share. The remaining redemption
requests relating to approximately 4.3 million shares went
unfulfilled, representing approximately $40.2 million in
unfulfilled requests, based upon a $9.35 per share redemption
price.
20
The
offering price for our shares is not based on the book value or
net asset value of our investments or our expected cash
flow.
The offering price for our shares is not based on the book value
or net asset value of our investments or our expected cash flow.
Our board of directors does not intend to provide a reasonable
estimate of the value of our shares until 18 months after
the end of the offering period, which could include a possible
follow-on offering. Until such time as our board of directors
determines a reasonable estimate of the value of our shares, the
price of our shares is not intended to reflect our per share net
asset value.
We may
be unable to pay or maintain cash distributions or increase
distributions over time.
There are many factors that can affect the availability and
timing of cash distributions to our stockholders. The amount of
cash available for distributions is affected by many factors,
such as the performance of our advisor in selecting investments
for us to make, selecting tenants for our properties and
securing financing arrangements, our ability to buy properties
as offering proceeds become available, rental income from our
properties, and our operating expense levels, as well as many
other variables. We may not always be in a position to pay
distributions to you and any distributions we do make may not
increase over time. In addition, our actual results may differ
significantly from the assumptions used by our board of
directors in establishing the distribution rate to our
stockholders. There also is a risk that we may not have
sufficient cash from operations to make a distribution required
to maintain our REIT status.
We may
pay some or all of our distributions from sources other than
cash flow from operations, including borrowings and proceeds
from asset sales or the sale of our securities in this or future
offerings. Payments of distributions from sources other than
cash flows from operations may reduce the amount of capital we
ultimately invest in real estate and may negatively impact the
value of your investment.
To the extent that cash flow from operations is insufficient to
make distributions to you, we may pay some or all of our
distributions from sources other than cash flows from
operations, including borrowings and proceeds from asset sales
or the sale of our securities in this or future offerings. We
have no limits on the amounts we may pay from sources other than
cash flows from operations. To the extent distributions are paid
from sources other than cash flow from operations, we may have
less capital available to invest in real estate and other real
estate-related investments. This may negatively impact our
ability to make investments, reduce current returns and
negatively impact the value of your investment.
Because
we may pay distributions from sources other than our cash flows
from operations, distributions at any point in time may not
reflect the current performance of our properties or our current
operating cash flows.
Our organizational documents permit us to make distributions
from any source, including the sources described in the risk
factor above. Because the amount we pay out in distributions may
exceed our cash flow from operations, distributions may not
reflect the current performance of our properties or our current
operating cash flows. To the extent distributions exceed cash
flow from operations, distributions may be treated as a return
of the investors investment and could reduce a
stockholders basis in our stock. A reduction in a
stockholders basis in our stock could result in the
stockholder recognizing more gain upon the disposition of his or
her shares, which in turn could result in greater taxable income
to such stockholder.
We may
suffer from delays in locating suitable investments, which could
adversely affect our ability to pay distributions to you and the
value of your investment.
We could suffer from delays in locating suitable investments,
particularly if the capital raised in this offering outpaces our
advisors ability to identify potential investments
and/or
close
on acquisitions. Delays we encounter in the selection
and/or
acquisition of income-producing properties likely would
adversely affect our ability to pay distributions to you and the
value of your overall returns. The large size of our offering,
coupled with competition from other real estate investors,
increase the risk of delays in investing our net offering
21
proceeds. Our stockholders should expect to wait at least
several months after the closing of a property acquisition
before receiving cash distributions attributable to that
property. If our advisor is unable to identify suitable
investments, we will hold the proceeds of this offering in an
interest-bearing account or invest the proceeds in short-term,
investment-grade investments, which would provide a
significantly lower return to us than the return we expect from
our investments in real estate.
In the
event we are not able to raise a substantial amount of capital
in the near term, we may have difficulty investing the proceeds
of this offering in properties, and our ability to achieve our
investment objectives, including diversification of our
portfolio by property type and location, could be adversely
affected.
This offering is being made on a best efforts basis,
which means that the dealer manager and the broker-dealers
participating in this offering are only required to use their
best efforts to sell the shares and have no firm commitment or
obligation to purchase any of the shares. As a result, we may
not be able to raise a substantial amount of capital in the near
term. If we are not able to accomplish this goal, we may have
difficulty in identifying and purchasing suitable properties on
attractive terms in order to meet our investment objectives.
Therefore, there could be a delay between the time we receive
net proceeds from the sale of shares of our common stock in this
offering and the time we invest the net proceeds. This could
cause a substantial delay in the time it takes for your
investment to realize its full potential return and could
adversely affect our ability to pay regular distributions of
cash flow from operations to you. If we fail to timely invest
the net proceeds of this offering, our ability to achieve our
investment objectives, including diversification of our
portfolio by property type and location, could be adversely
affected. In addition, subject to our investment policies, we
are not limited in the number or size of our investments or the
percentage of net proceeds that we may dedicate to a single
investment. If we use all or substantially all of the proceeds
from this offering to acquire one or a few investments, the
likelihood of our profitability being affected by the
performance of any one of our investments will increase, and an
investment in our shares will be subject to greater risk.
You
will not have the opportunity to evaluate our future investments
before we make them, which makes an investment in our common
stock more speculative.
While we will provide you with information on a regular basis
regarding our real estate investments after they are acquired,
we will not provide you with a significant amount of
information, if any, for you to evaluate our future investments
prior to our making them. Since we have not identified specific
properties that we intend to purchase with the proceeds from
this offering, we are considered a blind pool, which
makes your investment in our common stock speculative. We have
established policies relating to the types of investments we
will make and the creditworthiness of tenants of our properties,
but our advisor will have wide discretion in implementing these
policies, subject to the oversight of our board of directors.
Additionally, our advisor has discretion to determine the
location, number and size of our investments and the percentage
of net proceeds we may dedicate to a single investment. For a
more detailed discussion of our investment policies, see the
Investment Objectives and Policies Acquisition
and Investment Policies section of this prospectus.
Because
our initial capitalization is thin, we are dependent upon the
net proceeds of this offering to conduct our proposed business
activities. If we are unable to raise substantially more than
the minimum offering amount, we may not be able to invest in a
diverse portfolio of real estate and real estate-related
investments and an investment in our shares will be subject to
greater risk.
Our initial capitalization is $200,000; therefore, we currently
do not have sufficient capital to invest in a diverse portfolio
of real estate and real estate-related investments. Because our
initial capitalization is thin, we are dependent upon the net
proceeds of this offering to conduct our proposed activities. As
such, our ability to implement our business strategy is
dependent, in part, upon our dealer manager and participating
broker-dealers to successfully conduct this offering and you,
rather than us, will incur the bulk of the risk if we are unable
to raise substantial funds. This offering is being made on a
best efforts basis, whereby our dealer manager and
the broker-dealers participating in this offering are only
required to use their best efforts to sell shares of our common
stock and have no firm commitment or obligation to purchase any
of the shares of our
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common stock. In addition, the broker-dealers participating in
this offering also may be participating in the offerings of
competing REIT products, some of which may have a focus that is
nearly identical to our companys focus, and the
participating broker-dealers could emphasize such competing
products to their retail clients. As a result, we do not know
the amount of proceeds that will be raised in this offering,
which may be substantially less than the amount we would need to
achieve a broadly diversified portfolio of real estate and real
estate-related investments.
If we are unable to raise substantially more than the minimum
offering amount, we will make fewer investments, resulting in
less diversification in terms of the number of investments
owned, the geographic regions in which our investments are
located and the types of investments that we make. In addition,
our fixed operating expenses, as a percentage of gross income,
would be higher, and our financial condition and ability to pay
distributions could be adversely affected if we are unable to
raise substantial funds in this offering and invest in a diverse
portfolio of real estate and real estate-related investments.
If we
do not meet the minimum offering requirements for this offering,
you may earn a lower rate of return on your escrowed funds than
could have been achieved from an alternative
investment.
We will take purchase orders and hold investors funds in
an interest-bearing escrow account for up to one year until we
receive purchase orders for at least $2,500,000 of shares of our
common stock. If we do not receive purchase orders for the
minimum offering amount within one year from the date of this
offering, this offering will terminate and any funds that you
deposited into escrow will be returned to you along with any
interest earned thereon. The interest rate on the funds
delivered into escrow may be less than the rate of return you
could have achieved from an alternative investment.
The
purchase price you pay for shares of our common stock may be
higher than the value of our assets per share of common stock at
the time of your purchase.
This is a fixed price offering, which means that the offering
price for shares of our common stock is fixed and will not vary
based on the underlying value of our assets at any time. The
offering price for our shares is not based on the book value or
net asset value of our current or expected investments or our
current or expected operating cash flows. Therefore, the fixed
offering price established for shares of our common stock may
not accurately represent the current value of our assets per
share of our common stock at any particular time and may be
higher or lower than the actual value of our assets per share at
such time. See the section of this prospectus captioned
Investment Objectives and Policies Dilution of
the Net Tangible Book Value of Our Shares for further
discussion.
There
is no fixed date or method for providing our stockholders with
liquidity, and your shares may have limited liquidity for an
indefinite period of time.
Due to the unpredictable nature of future macro- and micro-
economic and market conditions, we have not set a fixed time
period or method for providing our stockholders with liquidity.
We expect that our board of directors will make that
determination in the future based, in part, upon advice from our
advisor. As a result, your shares may continue to have limited
liquidity for an indefinite period of time and should be
purchased only as a long-term investment.
If our
advisor loses or is unable to obtain key personnel, including in
the event another Cole-sponsored program internalizes its
advisor, our ability to achieve our investment objectives could
be delayed or hindered, which could adversely affect our ability
to pay distributions to you and the value of your
investment.
Our success depends to a significant degree upon the
contributions of certain executive officers and other key
personnel of our advisor, as listed on page 64 of this
prospectus, each of whom would be difficult to replace. Our
advisor does not have an employment agreement with any of these
key personnel and we cannot guarantee that all, or any
particular one, will remain affiliated with us
and/or
our
advisor. If any of our key personnel were to cease their
affiliation with our advisor, our operating results could
suffer. This could occur,
23
among other ways, if another Cole-sponsored program internalizes
its advisor. If that occurs, key personnel of our advisor, who
also are key personnel of the internalized advisors, would
become employees of the other program and would no longer be
available to our advisor. Further, we do not intend to
separately maintain key person life insurance on Mr. Cole
or any other person. We believe that our future success depends,
in large part, upon our advisors ability to hire and
retain highly skilled managerial, operational and marketing
personnel. Competition for such personnel is intense, and we
cannot assure you that our advisor will be successful in
attracting and retaining such skilled personnel. If our advisor
loses or is unable to obtain the services of key personnel, our
ability to implement our investment strategies could be delayed
or hindered, and the value of your investment may decline.
If our
board of directors elects to internalize our management
functions in connection with a listing of our shares of common
stock on an exchange or other liquidity event, your interest in
us could be diluted, and we could incur other significant costs
associated with being self-managed.
In the future, we may undertake a listing of our common stock on
an exchange or other liquidity event that may involve
internalizing our management functions. If our board of
directors elects to internalize our management functions, we may
negotiate to acquire our advisors assets and personnel. At
this time, we cannot be sure of the form or amount of
consideration or other terms relating to any such acquisition.
Such consideration could take many forms, including cash
payments, promissory notes and shares of our stock. The payment
of such consideration could result in dilution of your interests
as a stockholder and could reduce the net income per share and
funds from operations per share attributable to your investment.
Internalization transactions involving the acquisition of
advisors affiliated with entity sponsors have also, in some
cases, been the subject of litigation. Even if these claims are
without merit, we could be forced to spend significant amounts
of money defending claims, which would reduce the amount of
funds available to operate our business and to pay distributions.
In addition, while we would no longer bear the costs of the
various fees and expenses we expect to pay to our advisor under
the advisory agreement, our direct expenses would include
general and administrative costs, including legal, accounting,
and other expenses related to corporate governance, including
Securities and Exchange Commission reporting and compliance. We
would also incur the compensation and benefits costs of our
officers and other employees and consultants that we now expect
will be paid by our advisor or its affiliates. In addition, we
may issue equity awards to officers, employees and consultants,
which awards would decrease net income and funds from operations
and may further dilute your investment. If the expenses we
assume as a result of an internalization are higher than the
expenses we avoid paying to our advisor, our net income per
share and funds from operations per share would be lower as a
result of the internalization than it otherwise would have been,
potentially decreasing the amount of funds available to
distribute to you and the value of our shares.
As currently organized, we do not directly have any employees.
If we elect to internalize our operations, we would employ
personnel and would be subject to potential liabilities commonly
faced by employers, such as workers disability and compensation
claims, potential labor disputes and other employee-related
liabilities and grievances. Upon any internalization of our
advisor, certain key personnel may not remain with our advisor,
but instead will remain employees of our sponsor or its
affiliates.
If we internalize our management functions, we could have
difficulty integrating these functions as a stand-alone entity.
Currently, our advisor and its affiliates perform asset
management and general and administrative functions, including
accounting and financial reporting, for multiple entities. They
have a great deal of know-how and can experience economies of
scale. We may fail to properly identify the appropriate mix of
personnel and capital needs to operate as a stand-alone entity.
An inability to manage an internalization transaction
effectively could thus result in our incurring excess costs
and/or
have
a negative effect on our results of operations.
24
Our
participation in a co-ownership arrangement would subject us to
risks that otherwise may not be present in other real estate
investments.
We may enter in co-ownership arrangements with respect to a
portion of the properties we acquire. Co-ownership arrangements
involve risks generally not otherwise present with an investment
in real estate, such as the following:
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the risk that a co-owner may at any time have economic or
business interests or goals that are or become inconsistent with
our business interests or goals;
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the risk that a co-owner may be in a position to take action
contrary to our instructions or requests or our policies or
objectives;
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the possibility that an individual co-owner might become
insolvent or bankrupt, or otherwise default under the applicable
mortgage loan financing documents, which may constitute an event
of default under all of the applicable mortgage loan financing
documents or allow the bankruptcy court to reject the agreements
entered into by the co-owners owning interests in the property;
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the possibility that a co-owner might not have adequate liquid
assets to make cash advances that may be required in order to
fund operations, maintenance and other expenses related to the
property, which could result in the loss of current or
prospective tenants and otherwise adversely affect the operation
and maintenance of the property, could cause a default under the
mortgage loan financing documents applicable to the property and
result in late charges, penalties and interest, and could lead
to the exercise of foreclosure and other remedies by the lender;
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the risk that a co-owner could breach agreements related to the
property, which may cause a default under, and possibly result
in personal liability in connection with, the applicable
mortgage loan financing documents, violate applicable securities
law, result in a foreclosure or otherwise adversely affect the
property and the co-ownership arrangement;
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the risk that a default by any co-owner would constitute a
default under the applicable mortgage loan financing documents
that could result in a foreclosure and the loss of all or a
substantial portion of the investment made by the co-owner;
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the risk that we could have limited control and rights, with
management decisions made entirely by a third-party; and
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the possibility that we will not have the right to sell the
property at a time that otherwise could result in the property
being sold for its maximum value.
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In the event that our interests become adverse to those of the
other co-owners, we may not have the contractual right to
purchase the co-ownership interests from the other co-owners.
Even if we are given the opportunity to purchase such
co-ownership interests in the future, we cannot guarantee that
we will have sufficient funds available at the time to purchase
co-ownership interests from the co-owners.
We might want to sell our co-ownership interests in a given
property at a time when the other co-owners in such property do
not desire to sell their interests. Therefore, because we
anticipate that it will be much more difficult to find a willing
buyer for out co-ownership interests in a property than it would
be to find a buyer for a property we owned outright, we may not
be able to sell our interest in a property at the time we would
like to sell.
Risks
Related to Conflicts of Interest
We are subject to conflicts of interest arising out of our
relationships with our advisor and its affiliates, including the
material conflicts discussed below. The Conflicts of
Interest section of this prospectus provides a more
detailed discussion of the conflicts of interest between us and
our advisor and its affiliates, and our policies to reduce or
eliminate certain potential conflicts.
25
Our
advisor and its affiliates, including our dealer manager, will
face conflicts of interest caused by their compensation
arrangements with us, which could result in actions that are not
in the long-term best interests of our
stockholders.
Our advisor and its affiliates, including our dealer manager,
are entitled to substantial fees from us under the terms of the
advisory agreement and dealer manager agreement. These fees
could influence the judgment of our advisor and its affiliates
in performing services for us. Among other matters, these
compensation arrangements could affect their judgment with
respect to:
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the continuation, renewal or enforcement of our agreements with
our advisor and its affiliates, including the advisory agreement
and the dealer manager agreement;
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public offerings of equity by us, which entitle our dealer
manager to fees and will likely entitle our advisor to increased
acquisition and asset management fees;
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property acquisitions from other Cole-sponsored real estate
programs, which might entitle affiliates of our advisor to real
estate commissions and possible success-based sale fees in
connection with its services for the seller;
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property acquisitions from third parties, which entitle our
advisor to acquisition fees and advisory fees;
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property dispositions, which may entitle our advisor or its
affiliates to disposition fees;
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borrowings to acquire properties, which borrowings will increase
the acquisition and asset management fees payable to our advisor;
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whether and when we seek to sell our company, liquidate our
assets or list our common stock on a national securities
exchange, which liquidation or listing could entitle our advisor
to the payment of fees; and
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how and when to recommend to our board of directors a proposed
strategy to provide our investors with liquidity, which proposed
strategy, if implemented, could entitle our advisor to the
payment of fees.
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Our
advisors fee structure is principally based on the cost or
book value of investments and not on performance, which could
result in our advisory taking actions that are not necessarily
in the long-term best interests of our
stockholders.
The acquisition fee and the advisory fee we pay to our advisor
are both based on the cost or book value of such investments. As
a result, our advisor receives these fees regardless of the
quality of such investments, the performance of such investments
or the quality of our advisors services rendered to us in
connection with such investments. This creates a potential
conflict of interest between us and our advisor, as the
interests of our advisor in receiving the acquisition fee and
the advisory fee is not well aligned with our interest of
acquiring real estate that is likely to produce the maximum risk
adjusted returns.
Our
advisor faces conflicts of interest relating to the incentive
fee structure under our advisory agreement, which could result
in actions that are not necessarily in the long-term best
interests of our stockholders.
Pursuant to the terms of our advisory agreement, our advisor is
entitled to a subordinated performance fee that is structured in
a manner intended to provide incentives to our advisor to
perform in our best interests and in the best interests of our
stockholders. However, because our advisor does not maintain a
significant equity interest in us and is entitled to receive
certain fees regardless of performance, our advisors
interests are not wholly aligned with those of our stockholders.
Furthermore, our advisor could be motivated to recommend riskier
or more speculative investments in order for us to generate the
specified levels of performance or sales proceeds that would
entitle our advisor to performance-based fees. In addition, our
advisor will have substantial influence with respect to how and
when our board of directors elects to provide liquidity to our
investors, and these performance-based fees could influence our
advisors recommendations to us in this
26
regard. Our advisor also has the right to terminate the advisory
agreement upon a change of control of our company, under certain
circumstances, that could result in our advisor earning a
performance fee, which could have the effect of delaying,
deferring or preventing the change of control.
A
number of Cole real estate programs use investment strategies
that are similar to ours, therefore our executive officers and
the officers and key personnel of our advisor and its affiliates
may face conflicts of interest relating to the purchase and
leasing of properties, and such conflicts may not be resolved in
our favor.
Our sponsor may have simultaneous offerings of funds that have a
substantially similar mix of fund characteristics, including
targeted investment types, investment objectives and criteria,
and anticipated fund terms. As a result, we may be seeking to
acquire properties and other real estate-related investments at
the same time as one or more of the other Cole-sponsored
programs managed by officers and key personnel of our advisor
and/or
its
affiliates, and these other Cole-sponsored programs may use
investment strategies and have investment objectives that are
similar to ours. Our executive officers and the executive
officers of our advisor also are the executive officers of other
Cole-sponsored REITs
and/or
their
advisors, the general partners of Cole-sponsored partnerships
and/or
the
advisors or fiduciaries of other Cole-sponsored programs. There
is a risk that our advisors allocation of investment
properties may result in our acquiring a property that provides
lower returns to us than a property purchased by another
Cole-sponsored program. In addition, we may acquire properties
in geographic areas where other Cole-sponsored programs own
properties. If one of the other Cole-sponsored programs attracts
a tenant that we are competing for, we could suffer a loss of
revenue due to delays in locating another suitable tenant.
Similar conflicts of interest may arise if our advisor
recommends that we make or purchase mortgage loans or
participations in mortgage loans, since other Cole-sponsored
programs may be competing with us for these investments. You
will not have the opportunity to evaluate the manner in which
these conflicts of interest are resolved before or after making
your investment.
Our
officers face conflicts of interest related to the positions
they hold with affiliated entities, which could hinder our
ability to successfully implement our business strategy and to
generate returns to you.
Each of our executive officers, including Mr. Cole, who
also serves as the chairman of our board of directors, also is
an officer of other Cole-sponsored real estate programs and of
one or more entities affiliated with our advisor. As a result,
these individuals have fiduciary duties to us and our
stockholders, as well as to these other entities and their
stockholders, members and limited partners. These fiduciary
duties to such other entities and persons may create conflicts
with the fiduciary duties that they owe to us and our
stockholders. There is a risk that their loyalties to these
other entities could result in actions or inactions that are
detrimental to our business and violate their fiduciary duties
to us and our stockholders, which could harm the implementation
of our investment strategy and our investment and leasing
opportunities. Conflicts with our business and interests are
most likely to arise from involvement in activities related to
(i) allocation of new investments and management time and
services between us and the other entities, (ii) our
purchase of properties from, or sale of properties to,
affiliated entities, (iii) the timing and terms of the
investment in or sale of an asset, (iv) development of our
properties by affiliates, (v) investments with affiliates
of our advisor, (vi) compensation to our advisor and its
affiliates, and (vii) our relationship with, and
compensation to, our dealer manager. If we do not successfully
implement our investment strategy, we may be unable to maintain
or increase the value of our assets and our operating cash flows
and ability to pay distributions could be adversely affected.
Our
advisor and its officers and key personnel face conflicts of
interest related to the positions they hold with affiliated
entities, which could hinder our ability to successfully
implement our business strategy and to pay
distributions.
Our advisor and its officers and key personnel are officers, key
personnel and partners of other real estate programs that have
investment objectives, targeted assets, and legal and financial
obligations similar to ours
and/or
the
advisors to such programs, and they may have other business
interests as well. In addition, we have only two executive
officers, each of whom also is an officer, director
and/or
key
person of other real estate
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programs that have investment objectives, targeted assets and
legal and financial obligations similar to ours, and may also
have other business interests. As a result, these individuals
have fiduciary duties to both us and our stockholders and these
other entities and their stockholders, members and limited
partners. These fiduciary duties to such other entities and
persons may create conflicts with the fiduciary duties that they
owe to us and our stockholders. There is a risk that their
loyalties to these other entities could result in actions or
inactions that are detrimental to our business and violate their
fiduciary duties to us and our stockholders, which could harm
the implementation of our investment strategy and our investment
and leasing opportunities.
Conflicts with our business and interests are most likely to
arise from involvement in activities related to
(i) allocation of new investments and management time and
services between us and the other entities, (ii) our
purchase of properties from, or sale of properties to,
affiliated entities, (iii) the timing and terms of the
investment in or sale of an asset, (iv) development of our
properties by affiliates, (v) investments with affiliates
of our advisor, (vi) compensation to our advisor and its
affiliates, and (vii) our relationship with, and
compensation to, our dealer manager. If we do not successfully
implement our investment strategy, we may be unable to maintain
or increase the value of our assets and our operating cash flows
and ability to pay distributions could be adversely affected.
Even if these persons do not violate their fiduciary duties to
us and our stockholders, they will have competing demands on
their time and resources and may have conflicts of interest in
allocating their time and resources between our business and
these other entities. Should such persons devote insufficient
time or resources to our business, returns on our investments
may suffer.
Our
charter permits us to acquire assets and borrow funds from
affiliates of our advisor and sell or lease our assets to
affiliates of our advisor, and any such transaction could result
in conflicts of interest.
Under our charter, we are permitted to acquire properties from
affiliates of our advisor, provided, that any and all
acquisitions from affiliates of our advisor must be approved by
a majority of our directors, including a majority of our
independent directors, not otherwise interested in such
transaction as being fair and reasonable to us and at a price to
us that is no greater than the cost of the property to the
affiliate of our advisor. In no event will we acquire a property
from an affiliate of our advisor if the cost to us would exceed
the propertys current appraised value as determined by an
independent appraiser. In the event that we acquire a property
from an affiliate of our advisor, we may be foregoing an
opportunity to acquire a different property that might be more
advantageous to us. In addition, under our charter, we are
permitted to borrow funds from affiliates of our advisor,
including our sponsor, provided, that any such loans from
affiliates of our advisor must be approved by a majority of our
directors, including a majority of our independent directors,
not otherwise interested in such transaction as fair,
competitive and commercially reasonable, and no less favorable
to us than comparable loans between unaffiliated parties. Under
our charter, we are also permitted to sell and lease our assets
to affiliates of our advisor, and we have not established a
policy that specifically addresses how we will determine the
sale or lease price in any such transaction. Any such sale or
lease transaction would be subject to our general policy that
governs all transactions with affiliated entities. To the extent
that we acquire any properties from affiliates of our advisor,
borrow funds from affiliates of our advisor or sell or lease our
assets to affiliates of our advisor, such transactions could
result in a conflict of interest.
Our
advisor faces conflicts of interest relating to joint ventures
or other co-ownership arrangements that we enter into with other
Cole-sponsored programs, which could result in a
disproportionate benefit to another Cole-sponsored
program.
We may enter into joint ventures with other Cole-sponsored
programs for the acquisition, development or improvement of
properties as well as the acquisition of real-estate related
investments. Officers and key persons of our advisor also are
officers and key persons of other Cole-sponsored REITs and their
advisors, the general partners of other Cole-sponsored
partnerships
and/or
the
advisors or fiduciaries of other Cole-sponsored programs. These
officers and key persons may face conflicts of interest in
determining which Cole-sponsored program should enter into any
particular joint venture or co-ownership arrangement. These
persons also may have a conflict in structuring the terms of the
relationship between us and the Cole-affiliated co-venturer or
co-owner, as well as conflicts of interests in managing the
joint venture.
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In the event we enter into joint venture or other co-ownership
arrangements with another Cole-sponsored program, our advisor
and its affiliates may have a conflict of interest when
determining when and whether to buy or sell a particular
property, or to make or dispose of another real estate-related
investment. In addition, if we become listed for trading on a
national securities exchange, we may develop more divergent
goals and objectives from a Cole-affiliated co-venturer or
co-owner that is not listed for trading. In the event we enter
into a joint venture or other co-ownership arrangement with a
Cole-sponsored program that has a term shorter than ours, the
joint venture may be required to sell its properties earlier
than we may desire to sell the properties. Even if the terms of
any joint venture or other co-ownership agreement between us and
another Cole-sponsored program grant us the right of first
refusal to buy such properties, we may not have sufficient funds
or borrowing capacity to exercise our right of first refusal
under these circumstances.
Since Mr. Cole and his affiliates control our advisor and
other Cole-sponsored programs, agreements and transactions
between or among the parties with respect to any joint venture
or other co-ownership arrangement will not have the benefit of
arms-length negotiation of the type normally conducted
between unrelated co-venturers or co-owners, which may result in
the co-venturer or co-owner receiving benefits greater than the
benefits that we receive. We have adopted certain procedures for
dealing with potential conflicts of interest as described in the
section of this prospectus captioned Conflicts of
Interest Certain Conflict Resolution
Procedures.
Risks
Related to This Offering and Our Corporate Structure
The
dealer manager is an affiliate of our advisor, therefore you
will not have the benefit of an independent review of the
prospectus or of us that customarily is performed in
underwritten offerings.
The dealer manager, Cole Capital Corporation, is an affiliate of
our advisor and, as a result, is not in a position to make an
independent review of us or this offering. Accordingly, you will
have to rely on your own broker-dealer to make an independent
review of the terms of this offering. If your broker-dealer
conducts an independent review of this offering,
and/or
engages an independent due diligence reviewer to do so on its
behalf, we expect that we will pay or reimburse the expenses
associated with such review, which may create conflicts of
interest. If your broker-dealer does not conduct such a review,
you will not have the benefit of an independent review of the
terms of this offering.
Payment
of fees and reimbursements to our dealer manager, and our
advisor and its affiliates, reduces cash available for
investment.
We intend to pay Cole Capital Corporation, our dealer manager,
up to 9% of the gross proceeds of our primary offering in the
form of selling commissions and a dealer manager fee, most of
which will be reallowed to participating broker-dealers. We also
intend to reimburse our advisor and its affiliates for up to
2.0% of our gross offering proceeds, including proceeds from
sales of shares under our distribution reinvestment plan, for
other organization and offering expenses. Such payments will
reduce the amount of cash we have available to invest in
properties and result in a lower total return to you than if we
were able to invest 100% of the gross proceeds from this
offering in properties. Moreover, dealer manager fees and
selling commissions are included in the $10 per share offering
price, therefore our offering price does not, and is not
intended to, reflect our net asset value. In addition, we intend
to pay substantial fees to our advisor and its affiliates for
the services they perform for us. The payment of these fees will
reduce the amount of cash available for investment in
properties. For a more detailed discussion of the fees payable
to such entities in respect of this offering, see the
Management Compensation section of this prospectus.
The
limit on the number of shares a person may own may discourage a
takeover that could otherwise result in a premium price to our
stockholders.
Our charter, with certain exceptions, authorizes our directors
to take such actions as are necessary and desirable to preserve
our qualification as a REIT. Unless exempted by our board of
directors, no person may own more than 9.8% in value of the
aggregate of our outstanding shares or more than 9.8% (in value
or number of shares, whichever is more restrictive) of the
aggregate of our outstanding shares of common stock.
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These restrictions may have the effect of delaying, deferring or
preventing a change in control of us, including an extraordinary
transaction (such as a merger, tender offer or sale of all or
substantially all of our assets) that might provide a premium to
the purchase price of our common stock for our stockholders. See
the Description of Shares Restrictions on
Ownership and Transfer section of this prospectus.
Our
charter permits our board of directors to issue stock with terms
that may subordinate the rights of common stockholders or
discourage a third party from acquiring us in a manner that
might result in a premium price to our
stockholders.
Our charter permits our board of directors to issue up to
500,000,000 shares of stock, including
10,000,000 shares of preferred stock. In addition, our
board of directors, without any action by our stockholders, may
amend our charter from time to time to increase or decrease the
aggregate number of shares or the number of shares of any class
or series of stock that we have authority to issue. Our board of
directors may classify or reclassify any unissued common stock
or preferred stock and establish the preferences, conversion or
other rights, voting powers, restrictions, limitations as to
distributions, qualifications and terms and conditions of
redemption of any such stock. Shares of our common stock shall
be subject to the express terms of any series of our preferred
stock. Thus, if also approved by a majority of our independent
directors not otherwise interested in the transaction, our board
of directors could authorize the issuance of preferred stock
with terms and conditions that could have a priority as to
distributions and amounts payable upon liquidation over the
rights of the holders of our common stock. Preferred stock could
also have the effect of delaying, deferring or preventing the
removal of incumbent management or a change in control of us,
including an extraordinary transaction (such as a merger, tender
offer or sale of all or substantially all of our assets) that
might provide a premium to the purchase price of our common
stock for our stockholders. See the Description of
Shares Preferred Stock section of this
prospectus.
Maryland
law prohibits certain business combinations, which may make it
more difficult for us to be acquired and may limit your ability
to dispose of your shares.
Under Maryland law, business combinations between a
Maryland corporation and an interested stockholder or an
affiliate of an interested stockholder are prohibited for five
years after the most recent date on which the interested
stockholder becomes an interested stockholder. These business
combinations include a merger, consolidation, share exchange or,
in circumstances specified in the statute, an asset transfer or
issuance or reclassification of equity securities. An interested
stockholder is defined as:
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any person who beneficially owns 10% or more of the voting power
of the corporations shares; or
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an affiliate or associate of the corporation who, at any time
within the two-year period prior to the date in question, was
the beneficial owner of 10% or more of the voting power of the
then outstanding voting stock of the corporation.
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A person is not an interested stockholder under the statute if
the board of directors approved in advance the transaction by
which he or she otherwise would have become an interested
stockholder. However, in approving a transaction, the board of
directors may provide that its approval is subject to
compliance, at or after the time of approval, with any terms and
conditions determined by our board of directors.
After the five-year prohibition, any business combination
between the Maryland corporation and an interested stockholder
generally must be recommended by the board of directors of the
corporation and approved by the affirmative vote of at least:
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80% of the votes entitled to be cast by holders of outstanding
shares of voting stock of the corporation; and
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two-thirds of the votes entitled to be cast by holders of voting
stock of the corporation other than shares held by the
interested stockholder with whom or with whose affiliate the
business combination is to be effected or held by an affiliate
or associate of the interested stockholder.
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These super-majority vote requirements do not apply if the
corporations stockholders receive a minimum price, as
defined under Maryland law, for their shares in the form of cash
or other consideration in the same form as previously paid by
the interested stockholder for its shares. The business
combination statute permits various exemptions from its
provisions, including business combinations that are exempted by
the board of directors prior to the time that the interested
stockholder becomes an interested stockholder. Pursuant to the
statute, our board of directors has exempted any business
combination involving our advisor or any affiliate of our
advisor. Consequently, the five-year prohibition and the
super-majority vote requirements will not apply to business
combinations between us and our advisor or any affiliate of our
advisor. As a result, our advisor and any affiliate of our
advisor may be able to enter into business combinations with us
that may not be in the best interests of our stockholders,
without compliance with the super-majority vote requirements and
the other provisions of the statute. The business combination
statute may discourage others from trying to acquire control of
us and increase the difficulty of consummating any offer. For a
more detailed discussion of the Maryland laws governing us and
the ownership of our shares of common stock, see the section of
this prospectus captioned Description of
Shares Business Combinations.
Maryland
law also limits the ability of a third party to buy a large
percentage of our outstanding shares and exercise voting control
in electing directors.
Under its Control Share Acquisition Act, Maryland law also
provides that control shares of a Maryland
corporation acquired in a control share acquisition
have no voting rights except to the extent approved by the
corporations disinterested stockholders by a vote of
two-thirds of the votes entitled to be cast on the matter.
Shares of stock owned by interested stockholders, that is, by
the acquirer, or officers of the corporation or employees of the
corporation who are directors of the corporation, are excluded
from shares entitled to vote on the matter. Control
shares are voting shares of stock that would entitle the
acquirer, except solely by virtue of a revocable proxy, to
exercise voting control in electing directors within specified
ranges of voting control. Control shares do not include shares
the acquiring person is then entitled to vote as a result of
having previously obtained stockholder approval. A control
share acquisition means the acquisition of control shares.
The control share acquisition statute does not apply (a) to
shares acquired in a merger, consolidation or share exchange if
the corporation is a party to the transaction or (b) to
acquisitions approved or exempted by the charter or bylaws of
the corporation. Our bylaws contain a provision exempting from
the Control Share Acquisition Act any and all acquisitions of
our stock by Cole Capital Advisors or any affiliate of Cole
Capital Advisors. This statute could have the effect of
discouraging offers from third parties to acquire us and
increasing the difficulty of successfully completing this type
of offer by anyone other than our advisor or any of its
affiliates. For a more detailed discussion on the Maryland laws
governing control share acquisitions, see the section of this
prospectus captioned Description of Shares
Control Share Acquisitions.
Our
charter includes an anti-takeover provision that may discourage
a stockholder from launching a tender offer for our
shares.
Our charter requires that any tender offer, including any
mini-tender offer, must comply with
Regulation 14D of the Exchange Act of 1934, as amended (the
Exchange Act). The offering person must provide our company
notice of the tender offer at least ten business days before
initiating the tender offer. If the offering person does not
comply with these requirements, we will have the right to redeem
that persons shares and any shares acquired in such tender
offer. In addition, the non-complying person shall be
responsible for all of our expenses in connection with that
persons noncompliance. This provision of our charter may
discourage a person from initiating a tender offer for our
shares and prevent you from receiving a premium to your purchase
price for your shares in such a transaction.
If we
are required to register as an investment company under the
Investment Company Act, we could not continue our current
business plan, which may significantly reduce the value of your
investment.
We intend to conduct our operations, and the operations of our
operating partnership and any other subsidiaries, so that no
such entity meets the definition of an investment
company under Section 3(a)(1) of
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the Investment Company Act. Under the Investment Company Act, in
relevant part, a company is an investment company if:
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pursuant to Section 3(a)(1)(A), it is, or holds itself out
as being, engaged primarily, or proposes to engage primarily, in
the business of investing, reinvesting or trading in
securities; or
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pursuant to Section 3(a)(1)(C), it is engaged, or proposes
to engage, in the business of investing, reinvesting, owning,
holding or trading in securities and owns or proposes to acquire
investment securities having a value exceeding 40%
of the value of its total assets (exclusive of U.S. government
securities and cash items) on an unconsolidated basis (the 40%
test). Investment securities excludes
U.S. Government securities and securities of majority-owned
subsidiaries that are not themselves investment companies and
are not relying on the exception from the definition of
investment company under Section 3(c)(1) or
Section 3(c)(7) of the Investment Company Act.
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We intend to monitor our operations and our assets on an ongoing
basis in order to ensure that neither we, nor any of our
subsidiaries, meet the definition of investment
company under Section 3(a)(1) of the Investment
Company Act. If we were obligated to register as an investment
company, we would have to comply with a variety of substantive
requirements under the Investment Company Act imposing, among
other things:
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limitations on capital structure;
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restrictions on specified investments;
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restrictions on specified investments;
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prohibitions on transactions with affiliates;
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compliance with reporting, record keeping, voting, proxy
disclosure and other rules and regulations that would
significantly change our operations; and
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potentially, compliance with daily valuation requirements.
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In order for us to not meet the definition of an
investment company and avoid regulation under the
Investment Company Act, we must engage primarily in the business
of buying real estate, and these investments must be made within
a year after the offering ends. If we are unable to invest a
significant portion of the proceeds of this offering in
properties within one year of the termination of the offering,
we may avoid being required to register as an investment company
by temporarily investing any unused proceeds in certificates of
deposit or other cash items with low returns. This would reduce
the cash available for distribution to investors and possibly
lower your returns.
To avoid meeting the definition of an investment
company under Section 3(a)(1) of the Investment
Company Act, we may be unable to sell assets we would otherwise
want to sell and may need to sell assets we would otherwise wish
to retain. Similarly, we may have to acquire additional income
or loss generating assets that we might not otherwise have
acquired or may have to forgo opportunities to acquire interests
in companies that we would otherwise want to acquire and would
be important to our investment strategy. Accordingly, our board
of directors may not be able to change our investment policies
as our board of directors may deem appropriate if such change
would cause us to meet the definition of an investment
company. In addition, a change in the value of any of our
assets could negatively affect our ability to avoid being
required to register as an investment company. If we were
required to register as an investment company but failed to do
so, we would be prohibited from engaging in our business, and
criminal and civil actions could be brought against us. In
addition, our contracts would be unenforceable unless a court
were to require enforcement, and a court could appoint a
receiver to take control of us and liquidate our business.
If you
do not agree with the decisions of our board of directors, you
only have limited control over changes in our policies and
operations and may not be able to change such policies and
operations.
Our board of directors determines our major policies, including
our policies regarding investments, financing, growth, debt
capitalization, REIT qualification and distributions. Our board
of directors may amend
32
or revise these and other policies without a vote of the
stockholders. Under the Maryland General Corporation Law and our
charter, our stockholders generally have a right to vote only on
the following:
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the election or removal of directors;
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any amendment of our charter, except that our board of directors
may amend our charter without stockholder approval to increase
or decrease the aggregate number of our shares, to increase or
decrease the number of our shares of any class or series that we
have the authority to issue, to change our name, to classify or
reclassify any unissued shares of common stock or preferred
stock into one or more classes or series of shares and to
establish the terms of such shares, and to change the name or
other designation or the par value of any class or series of our
stock and the aggregate par value of our stock or to effect
certain reverse stock splits; provided, however, that any
amendment that would materially and adversely affect the rights,
preferences and privileges of the stockholders must be approved
by the stockholders;
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our dissolution; and
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a merger or consolidation of the sale or other disposition of
all or substantially all of our assets.
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All other matters are subject to the discretion of our board of
directors.
Our
board of directors may change certain of our investment policies
without stockholder approval, which could alter the nature of
your investment.
Our charter requires that our independent directors review our
investment policies at least annually to determine that the
policies we are following are in the best interests of the
stockholders. These policies may change over time. The methods
of implementing our investment policies also may vary, as new
real estate development trends emerge and new investment
techniques are developed. Subject to certain limits set forth in
our charter and as may be required to avoid meeting the
definition of an investment company under the
Investment Company Act, our investment policies, the methods for
their implementation, and our other objectives, policies and
procedures may be altered by our board of directors without the
approval of our stockholders, unless otherwise provided in our
organizational documents. As a result, the nature of your
investment could change without your consent.
Our
rights and the rights of our stockholders to recover claims
against our officers, directors and our advisor are limited,
which could reduce your and our recovery against them if they
cause us to incur losses.
Maryland law provides that a director has no liability in that
capacity if he or she performs his or her duties in good faith,
in a manner he or she reasonably believes to be in the
corporations best interests and with the care that an
ordinarily prudent person in a like position would use under
similar circumstances. Our charter, in the case of our directors
and officers, and our charter and the advisory agreement, in the
case of our advisor and its affiliates, require us, subject to
certain exceptions, to indemnify and advance expenses to our
directors, our officers, and our advisor and its affiliates. Our
charter permits us to provide such indemnification and advance
for expenses to our employees and agents. Additionally, our
charter limits, subject to certain exceptions, the liability of
our directors and officers to us and our stockholders for
monetary damages. Although our charter does not allow us to
indemnify our directors or our advisor and its affiliates for
any liability or loss suffered by them or hold harmless our
directors or our advisor and its affiliates for any loss or
liability suffered by us to a greater extent than permitted
under Maryland law or the Statement of Policy Regarding Real
Estate Investment Trusts published by the North American
Securities Administrators Association, also known as the NASAA
REIT Guidelines, we and our stockholders may have more limited
rights against our directors, officers, employees and agents,
and our advisor and its affiliates, than might otherwise exist
under common law, which could reduce your and our recovery
against them. In addition, our advisor is not required to retain
cash to pay potential liabilities and it may not have sufficient
cash available to pay liabilities if they arise. If our advisor
is held liable for a breach of its fiduciary duty to us, or a
breach of its contractual obligations to us, we may not be able
to collect the full amount of any claims we may have against our
advisor. In addition, we may be obligated to fund the defense
costs incurred by our directors, officers, employees and agents
or our advisor in some cases, which would decrease the cash
otherwise available for distribution to you. See the section
captioned Management Limited Liability and
Indemnification of Our Directors, Officers, Advisor and Other
Agents elsewhere in this prospectus.
33
Your
interest in us will be diluted if we issue additional
shares.
Existing stockholders and potential investors in this offering
do not have preemptive rights to any shares issued by us in the
future. Our charter currently has authorized
500,000,000 shares of stock, of which
490,000,000 shares are designated as common stock and
10,000,000 are designated as preferred stock. Subject to any
limitations set forth under Maryland law, our board of directors
may increase the number of authorized shares of stock, increase
or decrease the number of shares of any class or series of stock
designated, or classify or reclassify any unissued shares
without the necessity of obtaining stockholder approval. All of
such shares may be issued in the discretion of our board of
directors, except that the issuance of preferred stock must also
be approved by a majority of our independent directors not
otherwise interested in the transaction. Investors purchasing
shares in this offering likely will suffer dilution of their
equity investment in us, in the event that we (1) sell
shares in this offering or sell additional shares in the future,
including those issued pursuant to our distribution reinvestment
plan, (2) sell securities that are convertible into shares
of our common stock, (3) issue shares of our common stock
in a private offering of securities to institutional investors,
(4) issue shares of our common stock to our advisor, its
successors or assigns, in payment of an outstanding fee
obligation as set forth under our advisory agreement or
(5) issue shares of our common stock to sellers of
properties acquired by us in connection with an exchange of
limited partnership interests of our operating partnership. In
addition, the partnership agreement for our operating
partnership contains provisions that would allow, under certain
circumstances, other entities, including other Cole-sponsored
programs, to merge into or cause the exchange or conversion of
their interest in that entity for interests of our operating
partnership. Because the limited partnership interests of our
operating partnership may, in the discretion of our board of
directors, be exchanged for shares of our common stock, any
merger, exchange or conversion between our operating partnership
and another entity ultimately could result in the issuance of a
substantial number of shares of our common stock, thereby
diluting the percentage ownership interest of other
stockholders. Because of these and other reasons described in
this Risk Factors section, you should not expect to
be able to own a significant percentage of our shares.
General
Risks Related to Investments in Real Estate
Our
operating results will be affected by economic and regulatory
changes that have an adverse impact on the real estate market in
general, which may prevent us from being profitable or from
realizing growth in the value of our real estate
properties.
Our operating results will be subject to risks generally
incident to the ownership of real estate, including:
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changes in general economic or local conditions;
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changes in supply of or demand for similar or competing
properties in an area;
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changes in interest rates and availability of permanent mortgage
funds that may render the sale of a property difficult or
unattractive;
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the illiquidity of real estate investments generally;
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changes in tax, real estate, environmental and zoning
laws; and
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periods of high interest rates and tight money supply.
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These risk and other factors may prevent us from being
profitable, or from maintaining or growing the value of our real
estate properties.
Many
of our properties may depend upon a single tenant, or a limited
number of major tenants, for all or a majority of its rental
income; therefore, our financial condition and ability to make
distributions to you may be adversely affected by the bankruptcy
or insolvency, a downturn in the business, or a lease
termination of a single tenant.
Many of our properties may be occupied by only one tenant or
derive a majority of its rental income from a limited number of
major tenants and, therefore, the success of those properties
will be materially dependent on the financial stability of such
tenants. Such tenants face competition within their industries
and
34
other factors that could reduce their ability to make rent
payments. For example, our retail tenants face competition from
other retailers, as well as competition from other retail
channels, such as factory outlet centers, wholesale clubs, mail
order catalogs, television shopping networks and various
developing forms of
e-commerce.
In addition, our retail properties will be located in public
places, where crimes, violence and other incidents may occur.
Such incidents could reduce the amount of business conducted by
the tenants at our properties, thus reducing the tenants
abilities to pay rent, and such incidents could also expose us
to civil liability, as the property owner. Furthermore, if we
invest in industrial properties, a general reduction in
U.S. manufacturing activity could reduce our manufacturing
tenants abilities to pay rent. Lease payment defaults by
tenants could cause us to reduce the amount of distributions we
pay. A default of a tenant on its lease payments to us would
cause us to lose revenue from the property and force us to find
an alternative source of revenue to meet any expenses associated
with the property and prevent a foreclosure if the property is
subject to a mortgage. In the event of a default by a single or
major tenant, we may experience delays in enforcing our rights
as landlord and may incur substantial costs in protecting our
investment and re-letting the property. If a lease is
terminated, we may not be able to lease the property for the
rent previously received or sell the property without incurring
a loss. A default by a tenant, the failure of a guarantor to
fulfill its obligations or other premature termination of a
lease, or a tenants election not to extend a lease upon
its expiration, could have an adverse effect on our financial
condition and our ability to pay distributions to you.
A high
concentration of our properties in a particular geographic area,
or with tenants in a similar industry, would magnify the effects
of downturns in that geographic area or industry.
In the event that we have a concentration of properties in any
particular geographic area, any adverse situation that
disproportionately affects that geographic area would have a
magnified adverse effect on our portfolio. Similarly, if tenants
of our properties become concentrated in a certain industry or
industries, any adverse effect to that industry generally would
have a disproportionately adverse effect on our portfolio.
If a
major tenant declares bankruptcy, we may be unable to collect
balances due under relevant leases, which could have a material
adverse effect on our financial condition and ability to pay
distributions to you.
We may experience concentration in one or more tenants. Any of
our tenants, or any guarantor of one of our tenants lease
obligations, could be subject to a bankruptcy proceeding
pursuant to Title 11 of the bankruptcy laws of the United
States. Such a bankruptcy filing would bar us from attempting to
collect pre-bankruptcy debts from the bankrupt tenant or its
properties unless we receive an enabling order from the
bankruptcy court. Post-bankruptcy debts would be paid currently.
If we assume a lease, all pre-bankruptcy balances owing under it
must be paid in full. If a lease is rejected by a tenant in
bankruptcy, we would have a general unsecured claim for damages.
If a lease is rejected, it is unlikely we would receive any
payments from the tenant because our claim would be capped at
the rent reserved under the lease, without acceleration, for the
greater of one year or 15% of the remaining term of the lease,
but not greater than three years, plus rent already due but
unpaid. This claim could be paid only in the event funds were
available, and then only in the same percentage as that realized
on other unsecured claims.
The bankruptcy of a tenant or lease guarantor could delay our
efforts to collect past due balances under the relevant lease,
and could ultimately preclude full collection of these sums.
Such an event also could cause a decrease or cessation of
current rental payments, reducing our operating cash flows and
the amount available for distributions to you. In the event a
tenant or lease guarantor declares bankruptcy, the tenant or its
trustee may not assume our lease or its guaranty. If a given
lease or guaranty is not assumed, our operating cash flows and
the amounts available for distributions to you may be adversely
affected. The bankruptcy of a major tenant could have a material
adverse effect on our ability to pay distributions to you.
If a
sale-leaseback transaction is re-characterized in a
tenants bankruptcy proceeding, our financial condition
could be adversely affected.
We may enter into sale-leaseback transactions, whereby we would
purchase a property and then lease the same property back to the
person from whom we purchased it. In the event of the bankruptcy
of a tenant, a
35
transaction structured as a sale-leaseback may be
re-characterized as either a financing or a joint venture,
either of which outcomes could adversely affect our financial
condition, cash flow and the amount available for distributions
to you.
If the sale-leaseback were re-characterized as a financing, we
might not be considered the owner of the property, and as a
result would have the status of a creditor in relation to the
tenant. In that event, we would no longer have the right to sell
or encumber our ownership interest in the property. Instead, we
would have a claim against the tenant for the amounts owed under
the lease, with the claim arguably secured by the property. The
tenant/debtor might have the ability to propose a plan
restructuring the term, interest rate and amortization schedule
of its outstanding balance. If confirmed by the bankruptcy
court, we could be bound by the new terms, and prevented from
foreclosing our lien on the property. If the sale-leaseback were
re-characterized as a joint venture, our lessee and we could be
treated as co-venturers with regard to the property. As a
result, we could be held liable, under some circumstances, for
debts incurred by the lessee relating to the property.
Challenging
economic conditions could adversely affect vacancy rates, which
could have an adverse impact on our ability to make
distributions and the value of an investment in our
shares.
Challenging economic conditions, the availability and cost of
credit, turmoil in the mortgage market, and declining real
estate markets have contributed to increased vacancy rates in
the commercial real estate sector. If we experience vacancy
rates that are higher than historical vacancy rates, we may have
to offer lower rental rates and greater tenant improvements or
concessions than expected. Increased vacancies may have a
greater impact on us, as compared to REITs with other investment
strategies, as our investment approach relies on long-term
leases in order to provide a relatively stable stream of income
for our stockholders. As a result, increased vacancy rates could
have the following negative effects on us:
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the values of our potential investments in commercial properties
could decrease below the amount paid for such investments;
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revenues from such properties could decrease due to low or no
rental income during vacant periods, lower future rental rates
and/or
increased tenant improvement expenses or concessions; and/or
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revenues from such properties that secure loans could decrease,
making it more difficult for us to meet our payment obligations.
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All of these factors could impair our ability to make
distributions and decrease the value of an investment in our
shares.
Properties
that have vacancies for a significant period of time could be
difficult to sell, which could diminish the return on your
investment.
A property may incur vacancies either by the continued default
of a tenant under its leases, the expiration of a tenant lease
or early termination of a lease by a tenant. If vacancies
continue for a long period of time, we may suffer reduced
revenues resulting in less cash to be distributed to you. In
addition, because a propertys market value depends
principally upon the value of the propertys leases, the
resale value of a property with prolonged vacancies could
decline, which could further reduce your return.
We may
be unable to secure funds for future tenant improvements or
capital needs, which could adversely impact our ability to pay
cash distributions to you.
When tenants do not renew their leases or otherwise vacate their
space, it is usual that, in order to attract replacement
tenants, we will be required to expend substantial funds for
tenant improvements and tenant refurbishments to the vacated
space. In addition, although we expect that our leases with
tenants will require tenants to pay routine property maintenance
costs, we will likely be responsible for any major structural
repairs, such as repairs to the foundation, exterior walls and
rooftops. We will use substantially all of the gross proceeds
from this offering to buy real estate and real estate-related
investments and to pay various fees and expenses. We intend to
reserve only approximately 0.1% of the gross proceeds from this
offering for future
36
capital needs. Accordingly, if we need additional capital in the
future to improve or maintain our properties or for any other
reason, we will have to obtain funds from other sources, such as
cash flow from operations, borrowings, property sales or future
equity offerings. These sources of funding may not be available
on attractive terms or at all. If we cannot procure additional
funding for capital improvements, our investments may generate
lower cash flows or decline in value, or both.
We may
obtain only limited warranties when we purchase a property and
would have only limited recourse in the event our due diligence
did not identify any issues that lower the value of our
property.
The seller of a property often sells such property in its
as is condition on a where is basis and
with all faults, without any warranties of
merchantability or fitness for a particular use or purpose. In
addition, purchase agreements may contain only limited
warranties, representations and indemnifications that will only
survive for a limited period after the closing. The purchase of
properties with limited warranties increases the risk that we
may lose some or all of our invested capital in the property, as
well as the loss of rental income from that property.
Our
inability to sell a property when we desire to do so could
adversely impact our ability to pay cash distributions to
you.
The real estate market is affected by many factors, such as
general economic conditions, availability of financing, interest
rates, supply and demand, and other factors that are beyond our
control. We cannot predict whether we will be able to sell any
property for the price or on the terms set by us, or whether any
price or other terms offered by a prospective purchaser would be
acceptable to us. We may be required to expend funds to correct
defects or to make improvements before a property can be sold.
We may not have adequate funds available to correct such defects
or to make such improvements. Moreover, in acquiring a property,
we may agree to restrictions that prohibit the sale of that
property for a period of time or impose other restrictions, such
as a limitation on the amount of debt that can be placed or
repaid on that property. We cannot predict the length of time
needed to find a willing purchaser and to close the sale of a
property. Our inability to sell a property when we desire to do
so may cause us to reduce our selling price for the property.
Any delay in our receipt of proceeds, or diminishment of
proceeds, from the sale of a property could adversely impact our
ability to pay distributions to you.
We are
exposed to risks related to increases in market lease rates and
inflation, as income from long-term leases will be the primary
source of our cash flows from operations.
We are exposed to risks related to increases in market lease
rates and inflation, as income from long-term leases will be the
primary source of our cash flows from operations. Leases of
long-term duration or which include renewal options that specify
a maximum rate increase may result in below-market lease rates
over time if we do not accurately estimate inflation or market
lease rates. Provisions of our leases designed to mitigate the
risk of inflation and unexpected increases in market lease
rates, such as periodic rental increases, may not adequately
protect us from the impact of inflation or unexpected increases
in market lease rates. If we are subject to below-market lease
rates on a significant number of our properties pursuant to
long-term leases, our cash flow from operations and financial
position may be adversely affected.
We may
not be able to sell our properties at a price equal to, or
greater than, the price for which we purchased such property,
which may lead to a decrease in the value of our
assets.
Many of our leases will not contain rental increases over time.
When that is the case, the value of the leased property to a
potential purchaser may not increase over time, which may
restrict our ability to sell that property, or if we are able to
sell that property, may result in a sale price less than the
price that we paid to purchase the property.
37
We may
acquire or finance properties with lock-out provisions, which
may prohibit us from selling a property, or may require us to
maintain specified debt levels for a period of years on some
properties.
A lock-out provision is a provision that prohibits the
prepayment of a loan during a specified period of time. Lock-out
provisions may include terms that provide strong financial
disincentives for borrowers to prepay their outstanding loan
balance and exist in order to protect the yield expectations of
investors. We expect that many of our properties will be subject
to lock-out provisions. Lock-out provisions could materially
restrict us from selling or otherwise disposing of or
refinancing properties when we may desire to do so. Lock-out
provisions may prohibit us from reducing the outstanding
indebtedness with respect to any properties, refinancing such
indebtedness on a non-recourse basis at maturity, or increasing
the amount of indebtedness with respect to such properties.
Lock-out provisions could impair our ability to take other
actions during the lock-out period that could be in the best
interests of our stockholders and, therefore, may have an
adverse impact on the value of our shares relative to the value
that would result if the lock-out provisions did not exist. In
particular, lock-out provisions could preclude us from
participating in major transactions that could result in a
disposition of our assets or a change in control even though
that disposition or change in control might be in the best
interests of our stockholders.
Increased
operating expenses could reduce cash flow from operations and
funds available to acquire investments or make
distributions.
Our properties will be subject to operating risks common to real
estate in general, any or all of which may negatively affect us.
If any property is not fully occupied or if rents are being paid
in an amount that is insufficient to cover operating expenses,
we could be required to expend funds with respect to that
property for operating expenses. The properties will be subject
to increases in tax rates, utility costs, insurance costs,
repairs and maintenance costs, administrative costs and other
operating expenses. Some of our property leases may not require
the tenants to pay all or a portion of these expenses, in which
event we may have to pay these costs. If we are unable to lease
properties on terms that require the tenants to pay all or some
of the properties operating expenses, if our tenants fail
to pay these expenses as required or if expenses we are required
to pay exceed our expectations, we could have less funds
available for future acquisitions or cash available for
distributions to you.
Adverse
economic and geopolitical conditions may negatively affect our
returns and profitability.
Our operating results may be affected by market and economic
challenges, which may result from a continued or exacerbated
general economic downturn experienced by the nation as a whole,
by the local economies where our properties may be located, or
by the real estate industry including the following:
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poor economic conditions may result in tenant defaults under
leases;
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poor economic conditions may result in lower revenue to us from
retailers who pay us a percentage of their revenues under
percentage rent leases;
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re-leasing may require concessions or reduced rental rates under
the new leases;
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changes in interest rates and availability of permanent mortgage
funds that may render the sale of a property difficult or
unattractive;
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constricted access to credit may result in tenant defaults or
non-renewals under leases; and
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increased insurance premiums may reduce funds available for
distribution or, to the extent such increases are passed through
to tenants, may lead to tenant defaults. Increased insurance
premiums may make it difficult to increase rents to tenants on
turnover, which may adversely affect our ability to increase our
returns.
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The length and severity of any economic slow down or downturn
cannot be predicted. Our operations could be negatively affected
to the extent that an economic slow down or downturn is
prolonged or becomes more severe.
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The United States armed conflict in various parts of the
world could have a further impact on our tenants. The
consequences of any armed conflict are unpredictable, and we may
not be able to foresee events that could have an adverse effect
on our business or your investment. More generally, any of these
events could result in increased volatility in or damage to the
United States and worldwide financial markets and economy. They
also could result in higher energy costs and increased economic
uncertainty in the United States or abroad. Our revenues will be
dependent upon payment of rent by retailers, which may be
particularly vulnerable to uncertainty in the local economy.
Adverse economic conditions could affect the ability of our
tenants to pay rent, which could have a material adverse effect
on our operating results and financial condition, as well as our
ability to pay distributions to you.
The
current market environment may adversely affect our operating
results, financial condition and ability to pay
distributions.
The global financial markets have undergone pervasive and
fundamental disruptions since mid-2007. The disruptions in the
global financial markets had an adverse impact on the
availability of credit to businesses generally. The continuing
impact of the recent global economic recession has the potential
to materially affect the value of our properties and other
investments we make, the availability or the terms of financing
that we may anticipate utilizing, and our ability to make
principal and interest payments on, or refinance, any
outstanding debt when due, and/or, for our leased properties,
the ability of our tenants to enter into new leasing
transactions or satisfy rental payments under existing leases.
The current market environment also could affect our operating
results and financial condition as follows:
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Debt Markets
Although there are signs of
recovery, the real estate debt markets are currently
experiencing volatility as a result of certain factors,
including the tightening of underwriting standards by lenders
and credit rating agencies. Should overall borrowing costs
increase, either by increases in the index rates or by increases
in lender spreads, our operations may generate lower returns. In
addition, the recent dislocations in the debt markets have
reduced the amount of capital that is available to finance real
estate, which, in turn: (1) limits the ability of real
estate investors to make new acquisitions and to potentially
benefit from reduced real estate values or to realize enhanced
returns on real estate investments; (2) has slowed real
estate transaction activity; and (3) may result in an
inability to refinance debt as it becomes due. In addition, the
state of the debt markets could have a material impact on the
overall amount of capital being invested in real estate, which
may result in price or value decreases of real estate assets and
impact our ability to raise equity capital.
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Real Estate Markets
The recent global
economic recession has caused commercial real estate values to
decline substantially. As a result, there may be uncertainty in
the valuation, or in the stability of the value, of the
properties we acquire that could result in a substantial
decrease in the value of our properties after we purchase them.
Consequently, we may not be able to recover the carrying amount
of our properties, which may require us to recognize an
impairment charge or record a loss on sale in earnings.
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Government Intervention
The disruptions in
the global financial markets have led to extensive and
unprecedented government intervention. It is impossible to
predict the actual effect of the government intervention and
what effect, if any, additional interim or permanent
governmental intervention may have on the financial markets
and/or
the
effect of such intervention on the U.S. economy.
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The
failure of any bank in which we deposit our funds could reduce
the amount of cash we have available to pay distributions and
make additional investments.
We intend to diversify our cash and cash equivalents among
several banking institutions in an attempt to minimize exposure
to any one of these entities. However, the Federal Deposit
Insurance Corporation only insures amounts up to $250,000 per
depositor per insured bank. We likely will have cash and cash
equivalents and restricted cash deposited in certain financial
institutions in excess of federally insured levels. If any of
the banking institutions in which we deposit funds ultimately
fails, we may lose our deposits over $250,000. The
39
loss of our deposits could reduce the amount of cash we have
available to distribute or invest and could result in a decline
in the value of your investment.
If we
suffer losses that are not covered by insurance or that are in
excess of insurance coverage, we could lose invested capital and
anticipated profits.
Generally, we expect each of our tenants will be responsible for
insuring its goods and premises and, in some circumstances, may
be required to reimburse us for a share of the cost of acquiring
comprehensive insurance for the property, including casualty,
liability, fire and extended coverage customarily obtained for
similar properties in amounts that our advisor determines are
sufficient to cover reasonably foreseeable losses. Tenants of
single-user properties leased on a triple net basis typically
are required to pay all insurance costs associated with those
properties. Material losses may occur in excess of insurance
proceeds with respect to any property, as insurance may not be
sufficient to fund the losses. However, there are types of
losses, generally of a catastrophic nature, such as losses due
to wars, acts of terrorism, earthquakes, floods, hurricanes,
pollution or environmental matters, which are either uninsurable
or not economically insurable, or may be insured subject to
limitations, such as large deductibles or co-payments. Insurance
risks associated with potential terrorism acts could sharply
increase the premiums we pay for coverage against property and
casualty claims. Additionally, mortgage lenders in some cases
insist that commercial property owners purchase specific
coverage against terrorism as a condition for providing mortgage
loans. It is uncertain whether such insurance policies will be
available, or available at reasonable cost, which could inhibit
our ability to finance or refinance our potential properties. In
these instances, we may be required to provide other financial
support, either through financial assurances or self-insurance,
to cover potential losses. We may not have adequate, or any,
coverage for such losses. The Terrorism Risk Insurance Act of
2002 is designed for a sharing of terrorism losses between
insurance companies and the federal government. We cannot be
certain how this act will impact us or what additional cost to
us, if any, could result. If such an event damaged or destroyed
one or more of our properties, we could lose both our invested
capital and anticipated profits from such property.
Real
estate related taxes may increase, and if these increases are
not passed on to tenants, our income will be
reduced.
Local real property tax assessors may reassess our properties,
which may result in increased taxes. Generally, property taxes
increase as property values or assessment rates change, or for
other reasons deemed relevant by property tax assessors. An
increase in the assessed valuation of a property for real estate
tax purposes will result in an increase in the related real
estate taxes on that property. Although some tenant leases may
permit us to pass through such tax increases to the tenants for
payment, renewal leases or future leases may not be negotiated
on the same basis. Tax increases not passed through to tenants
may adversely affect our income, cash available for
distributions, and the amount of distributions to you.
CC&Rs
may restrict our ability to operate a property.
Some of our properties will be contiguous to other parcels of
real property, comprising part of the same retail center. In
connection with such properties, we will be subject to
significant covenants, conditions and restrictions, known as
CC&Rs, restricting the operation of such
properties and any improvements on such properties, and related
to granting easements on such properties. Moreover, the
operation and management of the contiguous properties may impact
such properties. Compliance with CC&Rs may adversely affect
our operating costs and reduce the amount of funds that we have
available to pay distributions to you.
Our
operating results may be negatively affected by potential
development and construction delays and resultant increased
costs and risks.
We may use proceeds from this offering to acquire properties
upon which we will construct improvements. If we engage in
development or construction projects, we will be subject to
uncertainties associated with re-zoning for development,
environmental concerns of governmental entities
and/or
community groups, and our builders ability to build in
conformity with plans, specifications, budgeted costs, and
timetables. If a builder fails to perform, we may resort to
legal action to rescind the purchase or the
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construction contract or to compel performance. A builders
performance may also be affected or delayed by conditions beyond
the builders control. Delays in completion of construction
could also give tenants the right to terminate preconstruction
leases. We may incur additional risks if we make periodic
progress payments or other advances to builders before they
complete construction. These and other such factors can result
in increased costs of a project or loss of our investment. In
addition, we will be subject to normal
lease-up
risks relating to newly constructed projects. We also must rely
on rental income and expense projections and estimates of the
fair market value of property upon completion of construction
when agreeing upon a price at the time we acquire the property.
If our projections are inaccurate, we may pay too much for a
property, and our return on our investment could suffer.
We may invest in unimproved real property. Returns from
development of unimproved properties are also subject to risks
associated with re-zoning the land for development and
environmental concerns of governmental entities
and/or
community groups.
If we
contract with a development company for newly developed
property, our earnest money deposit made to the development
company may not be fully refunded.
We may enter into one or more contracts, either directly or
indirectly through joint ventures with affiliates or others, to
acquire real property from a development company that is engaged
in construction and development of commercial real properties.
Properties acquired from a development company may be either
existing income-producing properties, properties to be developed
or properties under development. We anticipate that we will be
obligated to pay a substantial earnest money deposit at the time
of contracting to acquire such properties. In the case of
properties to be developed by a development company, we
anticipate that we will be required to close the purchase of the
property upon completion of the development of the property. At
the time of contracting and the payment of the earnest money
deposit by us, the development company typically will not have
acquired title to any real property. Typically, the development
company will only have a contract to acquire land, a development
agreement to develop a building on the land and an agreement
with one or more tenants to lease all or part of the property
upon its completion. We may enter into such a contract with the
development company even if at the time we enter into the
contract, we have not yet raised sufficient proceeds in our
offering to enable us to close the purchase of such property.
However, we may not be required to close a purchase from the
development company, and may be entitled to a refund of our
earnest money, in the following circumstances:
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the development company fails to develop the property;
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all or a specified portion of the pre-leased tenants fail to
take possession under their leases for any reason; or
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we are unable to raise sufficient proceeds from our offering to
pay the purchase price at closing.
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The obligation of the development company to refund our earnest
money will be unsecured, and we may not be able to obtain a
refund of such earnest money deposit from it under these
circumstances since the development company may be an entity
without substantial assets or operations.
If we
purchase an option to acquire a property but do not exercise the
option, we likely would forfeit the amount we paid for such
option, which would reduce the amount of cash we have available
to make other investments.
In determining whether to purchase a particular property, we may
obtain an option to purchase such property. The amount paid for
an option, if any, normally is forfeited if the property is not
purchased and normally is credited against the purchase price if
the property is purchased. If we purchase an option to acquire a
property but do not exercise the option, we likely would forfeit
the amount we paid for such option, which would reduce the
amount of cash we have available to make other investments.
41
Competition
with third parties in acquiring properties and other investments
may reduce our profitability and the return on your
investment.
We will compete with many other entities engaged in real estate
investment activities, including individuals, corporations, bank
and insurance company investment accounts, other REITs, real
estate limited partnerships, and other entities engaged in real
estate investment activities, many of which have greater
resources than we do. Larger competitors may enjoy significant
advantages that result from, among other things, a lower cost of
capital and enhanced operating efficiencies. In addition, the
number of entities and the amount of funds competing for
suitable investments may increase. Any such increase would
result in increased demand for these assets and therefore
increased prices paid for them. If we pay higher prices for
properties and other investments as a result of competition with
third parties without a corresponding increase in tenant lease
rates, our profitability will be reduced, and you may experience
a lower return on your investment.
Our
properties face competition that may affect tenants
ability to pay rent and the amount of rent paid to us may affect
the cash available for distributions to you and the amount of
distributions.
We typically will acquire properties located in developed areas.
Therefore, there likely will be numerous other retail properties
within the market area of each of our properties that will
compete with us for tenants. The number of competitive
properties could have a material effect on our ability to rent
space at our properties and the amount of rents charged. We
could be adversely affected if additional competitive properties
are built in close proximity to our properties, causing
increased competition for customer traffic and creditworthy
tenants. This could result in decreased cash flow from tenants
and may require us to make capital improvements to properties
that we would not have otherwise made, thus affecting cash
available for distributions to you and the amount of
distributions we pay.
Acquiring
or attempting to acquire multiple properties in a single
transaction may adversely affect our operations.
From time to time, we may acquire multiple properties in a
single transaction. Portfolio acquisitions are more complex and
expensive than single property acquisitions, and the risk that a
multiple-property acquisition does not close may be greater than
in a single-property acquisition. Portfolio acquisitions may
also result in us owning investments in geographically dispersed
markets, placing additional demands on our ability to manage the
properties in the portfolio. In addition, a seller may require
that a group of properties be purchased as a package even though
we may not want to purchase one or more properties in the
portfolio. In these situations, if we are unable to identify
another person or entity to acquire the unwanted properties, we
may be required to operate or attempt to dispose of these
properties. To acquire multiple properties in a single
transaction we may be required to accumulate a large amount of
cash. We would expect the returns that we earn on such cash to
be less than the ultimate returns on real property, therefore
accumulating such cash could reduce our funds available for
distributions to you. Any of the foregoing events may have an
adverse effect on our operations.
If we
set aside insufficient capital reserves, we may be required to
defer necessary capital improvements.
If we do not have enough reserves for capital to supply needed
funds for capital improvements throughout the life of the
investment in a property and there is insufficient cash flow
from operations, we may be required to defer necessary
improvements to a property, which may cause that property to
suffer from a greater risk of obsolescence or a decline in
value, or a greater risk of decreased operating cash flows as a
result of fewer potential tenants being attracted to the
property. If this happens, we may not be able to maintain
projected rental rates for affected properties, and our results
of operations may be negatively impacted.
Costs
of complying with environmental laws and regulations may
adversely affect our income and the cash available for any
distributions.
All real property and the operations conducted on real property
are subject to federal, state and local laws and regulations
relating to environmental protection and human health and
safety. These laws and regulations
42
generally govern wastewater discharges, air emissions, the
operation and removal of underground and above-ground storage
tanks, the use, storage, treatment, transportation and disposal
of solid hazardous materials, and the remediation of
contamination associated with disposals. Some of these laws and
regulations may impose joint and several liability on tenants,
owners or operators for the costs of investigation or
remediation of contaminated properties, regardless of fault or
whether the acts causing the contamination were legal. This
liability could be substantial. In addition, the presence of
hazardous substances, or the failure to properly remediate these
substances, may adversely affect our ability to sell or rent
such property or to use such property as collateral for future
borrowing.
Compliance with new or more stringent laws or regulations or
stricter interpretation of existing laws may require material
expenditures by us. Future laws, ordinances or regulations may
impose material environmental liability. Additionally, our
properties may be affected by our tenants operations, the
existing condition of land when we buy it, operations in the
vicinity of our properties, such as the presence of underground
storage tanks, or activities of unrelated third parties. In
addition, there are various local, state and federal fire,
health, life-safety and similar regulations that we may be
required to comply with, and that may subject us to liability in
the form of fines or damages for noncompliance. Any material
expenditures, fines, or damages we must pay will reduce our
ability to make distributions to you and may reduce the value of
your investment.
From time to time, we may acquire properties, or interests in
properties, with known adverse environmental conditions where we
believe that the environmental liabilities associated with these
conditions are quantifiable and that the acquisition will yield
a superior risk-adjusted return. In such an instance, we will
estimate the costs of environmental investigation,
clean-up
and
monitoring into the purchase price. Further, in connection with
property dispositions, we may agree to remain responsible for,
and to bear the cost of, remediating or monitoring certain
environmental conditions on the properties.
We may not obtain an independent third-party environmental
assessment for every property we acquire. In addition, any such
assessment that we do obtain may not reveal all environmental
liabilities. The cost of defending against claims of liability,
of compliance with environmental regulatory requirements, of
remediating any contaminated property, or of paying personal
injury claims would materially adversely affect our business,
assets or results of operations and, consequently, amounts
available for distribution to you.
Discovery
of previously undetected environmentally hazardous conditions
may adversely affect our operating results.
Under various federal, state and local environmental laws,
ordinances and regulations, a current or previous owner or
operator of real property may be liable for the cost of removal
or remediation of hazardous or toxic substances on, under or in
such property. The costs of removal or remediation could be
substantial. Such laws often impose liability whether or not the
owner or operator knew of, or was responsible for, the presence
of such hazardous or toxic substances. Environmental laws also
may impose restrictions on the manner in which property may be
used or businesses may be operated, and these restrictions may
require substantial expenditures. Environmental laws provide for
sanctions in the event of noncompliance and may be enforced by
governmental agencies or, in certain circumstances, by private
parties. Certain environmental laws and common law principles
could be used to impose liability for release of and exposure to
hazardous substances, including asbestos-containing materials
into the air, and third parties may seek recovery from owners or
operators of real properties for personal injury or property
damage associated with exposure to released hazardous
substances. The cost of defending against claims of liability,
of compliance with environmental regulatory requirements, of
remediating any contaminated property, or of paying personal
injury claims could materially adversely affect our business,
assets or results of operations and, consequently, amounts
available for distribution to you.
If we
sell properties by providing financing to purchasers, defaults
by the purchasers would adversely affect our cash flow from
operations.
In some instances we may sell our properties by providing
financing to purchasers. When we provide financing to
purchasers, we will bear the risk that the purchaser may default
on its obligations under the
43
financing, which could negatively impact cash flow from
operations. Even in the absence of a purchaser default, the
distribution of sale proceeds, or their reinvestment in other
assets, will be delayed until the promissory notes or other
property we may accept upon the sale are actually paid, sold,
refinanced or otherwise disposed of. In some cases, we may
receive initial down payments in cash and other property in the
year of sale in an amount less than the selling price, and
subsequent payments will be spread over a number of years. If
any purchaser defaults under a financing arrangement with us, it
could negatively impact our ability to pay cash distributions to
you.
Our
costs associated with complying with the Americans with
Disabilities Act of 1990, as amended, may affect cash available
for distributions.
Our properties generally will be subject to the Americans with
Disabilities Act of 1990, as amended (Disabilities Act). Under
the Disabilities Act, all places of public accommodation are
required to comply with federal requirements related to access
and use by disabled persons. The Disabilities Act has separate
compliance requirements for public accommodations
and commercial facilities that generally require
that buildings and services be made accessible and available to
people with disabilities. The Disabilities Acts
requirements could require removal of access barriers and could
result in the imposition of injunctive relief, monetary
penalties, or, in some cases, an award of damages. We will
attempt to acquire properties that comply with the Disabilities
Act or place the burden on the seller or other third party, such
as a tenant, to ensure compliance with the Disabilities Act.
However, we may not be able to acquire properties or allocate
responsibilities in this manner. If we cannot, our funds used
for Disabilities Act compliance may affect cash available for
distributions and the amount of distributions to you.
A
proposed change in U.S. accounting standards for leases could
reduce the overall demand to lease our properties.
The existing accounting standards for leases require lessees to
classify their leases as either capital or operating leases.
Under a capital lease, both the leased asset, which represents
the tenants right to use the property, and the contractual
lease obligation are recorded on the tenants balance sheet
if one of the following criteria are met: (i) the lease
transfers ownership of the property to the lessee by the end of
the lease term; (ii) the lease contains a bargain purchase
option; (iii) the non-cancellable lease term is more than
75% of the useful life of the asset; or (iv) if the present
value of the minimum lease payments equals 90% or more of the
leased propertys fair value. If the terms of the lease do
not meet these criteria, the lease is considered an operating
lease, and no leased asset or contractual lease obligation is
recorded by the tenant.
Recently, the U.S. Financial Accounting Standards Board
(the FASB) and the International Accounting Standards Board (the
IASB) initiated a joint project to develop new guidelines to
lease accounting. The FASB and IASB (collectively, the Boards)
issued an Exposure Draft on August 17, 2010 (the Exposure
Draft), which proposes substantial changes to the current lease
accounting standards, primarily by eliminating the concept of
operating lease accounting. As a result, a lease asset and
obligation would be recorded on the tenants balance sheet
for all lease arrangements. In addition, the Exposure Draft
could impact the method in which contractual lease payments will
be recorded. In order to mitigate the effect of the proposed
lease accounting, tenants may seek to negotiate certain terms
within new lease arrangements or modify terms in existing lease
arrangements, such as shorter lease terms or fewer extension
options, which would generally have less impact on tenant
balance sheets. Also, tenants may reassess their
lease-versus-buy strategies. This could result in a greater
renewal risk, a delay in investing our offering proceeds, or
shorter lease terms, all of which may negatively impact our
operations and our ability to pay distributions to you. The
Exposure Draft does not include a proposed effective date.
44
Risks
Associated with Debt Financing
We may
incur mortgage indebtedness and other borrowings, which may
increase our business risks, hinder our ability to make
distributions, and decrease the value of your
investment.
We likely will acquire real estate and other real estate-related
investments by borrowing new funds. In addition, we may incur
mortgage debt and pledge all or some of our real properties as
security for that debt to obtain funds to acquire additional
real properties and other investments and to pay distributions
to stockholders. We may borrow additional funds if we need funds
to satisfy the REIT tax qualification requirement that we
distribute at least 90% of our annual REIT taxable income to our
stockholders. We may also borrow additional funds if we
otherwise deem it necessary or advisable to assure that we
maintain our qualification as a REIT for federal income tax
purposes.
Our advisor believes that utilizing borrowing is consistent with
our investment objective of maximizing the return to investors.
There is no limitation on the amount we may borrow against any
individual property or other investment. However, under our
charter, we are required to limit our borrowings to 75% of the
cost (before deducting depreciation or other non-cash reserves)
of our gross assets, unless excess borrowing is approved by a
majority of the independent directors and disclosed to our
stockholders in our next quarterly report along with a
justification for such excess borrowing. Moreover, our board of
directors has adopted a policy to further limit our borrowings
to 60% of the greater of cost (before deducting depreciation or
other non-cash reserves) or fair market value of our gross
assets, unless such borrowing is approved by a majority of the
independent directors and disclosed to our stockholders in the
next quarterly report along with a justification for such excess
borrowing. Our borrowings will not exceed 300% of our net assets
as of the date of any borrowing, which is the maximum level of
indebtedness permitted under the NASAA REIT Guidelines; however,
we may exceed that limit if approved by a majority of our
independent directors. We expect that from time to time during
the period of this offering we will request that our independent
directors approve borrowings in excess of these limitations
since we will then be in the process of raising our equity
capital to acquire our portfolio. We expect that during the
period of this offering, high debt levels would cause us to
incur higher interest charges, would result in higher debt
service payments, and could be accompanied by restrictive
covenants. These factors could limit the amount of cash we have
available to distribute to you and could result in a decline in
the value of your investment.
We do not intend to incur mortgage debt on a particular property
unless we believe the propertys projected operating cash
flow is sufficient to service the mortgage debt. However, if
there is a shortfall between the cash flow from a property and
the cash flow needed to service mortgage debt on a property, the
amount available for distributions to you may be reduced. In
addition, incurring mortgage debt increases the risk of loss
since defaults on indebtedness secured by a property may result
in lenders initiating foreclosure actions. In that case, we
could lose the property securing the loan that is in default,
thus reducing the value of your investment. For tax purposes, a
foreclosure of any of our properties would be treated as a sale
of the property for a purchase price equal to the outstanding
balance of the debt secured by the mortgage. If the outstanding
balance of the debt secured by the mortgage exceeds our tax
basis in the property, we would recognize taxable income on
foreclosure, but would not receive any cash proceeds from the
foreclosure. In such event, we may be unable to pay the amount
of distributions required in order to maintain our REIT status.
We may give full or partial guarantees to lenders of mortgage
debt to the entities that own our properties. If we provide a
guaranty on behalf of an entity that owns one of our properties,
we will be responsible to the lender for satisfaction of the
debt if it is not paid by such entity. If any mortgages contain
cross-collateralization or cross-default provisions, a default
on a single property could affect multiple properties. If any of
our properties are foreclosed upon due to a default, our ability
to pay cash distributions to you will be adversely affected,
which could result in our losing our REIT status and would
result in a decrease in the value of your investment.
45
High
interest rates may make it difficult for us to finance or
refinance properties, which could reduce the number of
properties we can acquire and the amount of cash distributions
we can make to you.
We run the risk of being unable to finance or refinance our
properties on favorable terms or at all. If interest rates are
higher when we desire to mortgage our properties or when
existing loans come due and the properties need to be
refinanced, we may not be able to finance the properties and we
would be required to use cash to purchase or repay outstanding
obligations. Our inability to use debt to finance or refinance
our properties could reduce the number of properties we can
acquire, which could reduce our operating cash flows and the
amount of cash distributions we can make to you. Higher costs of
capital also could negatively impact operating cash flows and
returns on our investments.
Increases
in interest rates could increase the amount of our debt payments
and adversely affect our ability to pay distributions to
you.
We may incur indebtedness that bears interest at a variable
rate. To the extent that we incur variable rate debt, increases
in interest rates would increase our interest costs, which could
reduce our operating cash flows and our ability to pay
distributions to you. In addition, if we need to repay existing
debt during periods of rising interest rates, we could be
required to liquidate one or more of our investments at times
that may not permit realization of the maximum return on such
investments.
Lenders
may require us to enter into restrictive covenants relating to
our operations, which could limit our ability to make
distributions to you.
In connection with providing us financing, a lender could impose
restrictions on us that affect our distribution and operating
policies and our ability to incur additional debt. In general,
our loan agreements restrict our ability to encumber or
otherwise transfer our interest in the respective property
without the prior consent of the lender. Loan documents we enter
into may contain covenants that limit our ability to further
mortgage the property, discontinue insurance coverage or replace
CR IV Advisors as our advisor. These or other limitations
imposed by a lender may adversely affect our flexibility and our
ability to achieve our investment and operating objectives,
which could limit our ability to make distributions to you.
Interest-only
indebtedness may increase our risk of default and ultimately may
reduce our funds available for distribution to
you.
We may finance our property acquisitions using interest-only
mortgage indebtedness. During the interest-only period, the
amount of each scheduled payment will be less than that of a
traditional amortizing mortgage loan. The principal balance of
the mortgage loan will not be reduced (except in the case of
prepayments) because there are no scheduled monthly payments of
principal during this period. After the interest-only period, we
will be required either to make scheduled payments of amortized
principal and interest or to make a lump-sum or
balloon payment at maturity. These required
principal or balloon payments will increase the amount of our
scheduled payments and may increase our risk of default under
the related mortgage loan. If the mortgage loan has an
adjustable interest rate, the amount of our scheduled payments
also may increase at a time of rising interest rates. Increased
payments and substantial principal or balloon maturity payments
will reduce the funds available for distribution to our
stockholders because cash otherwise available for distribution
will be required to pay principal and interest associated with
these mortgage loans.
Our ability to make a balloon payment at maturity is uncertain
and may depend upon our ability to obtain additional financing
or our ability to sell the property. At the time the balloon
payment is due, we may or may not be able to refinance the loan
on terms as favorable as the original loan or sell the property
at a price sufficient to make the balloon payment. The effect of
a refinancing or sale could affect the rate of return to
stockholders and the projected time of disposition of our
assets. In addition, payments of principal and interest made to
service our debts may leave us with insufficient cash to pay the
distributions that we are required to pay to maintain our
qualification as a REIT. Any of these results would have a
significant, negative impact on your investment.
46
To
hedge against exchange rate and interest rate fluctuations, we
may use derivative financial instruments that may be costly and
ineffective and may reduce the overall returns on your
investment.
We may use derivative financial instruments to hedge our
exposure to changes in exchange rates and interest rates on
loans secured by our assets and investments in commercial
mortgage backed securities (CMBS). Derivative instruments may
include interest rate swap contracts, interest rate cap or floor
contracts, futures or forward contracts, options or repurchase
agreements. Our actual hedging decisions will be determined in
light of the facts and circumstances existing at the time of the
hedge and may differ from time to time.
To the extent that we use derivative financial instruments to
hedge against exchange rate and interest rate fluctuations, we
will be exposed to credit risk, basis risk and legal
enforceability risks. In this context, credit risk is the
failure of the counterparty to perform under the terms of the
derivative contract. If the fair value of a derivative contract
is positive, the counterparty owes us, which creates credit risk
for us. Basis risk occurs when the index upon which the contract
is based is more or less variable than the index upon which the
hedged asset or liability is based, thereby making the hedge
less effective. Finally, legal enforceability risks encompass
general contractual risks, including the risk that the
counterparty will breach the terms of, or fail to perform its
obligations under, the derivative contract. If we are unable to
manage these risks effectively, our results of operations,
financial condition and ability to pay distributions to you will
be adversely affected.
Risks
Associated with Investments in Mortgage, Bridge and Mezzanine
Loans and Real Estate-Related Securities
Investing
in mortgage, bridge or mezzanine loans could adversely affect
our return on our loan investments.
We may make or acquire mortgage, bridge or mezzanine loans, or
participations in such loans, to the extent our advisor
determines that it is advantageous for us to do so. However, if
we make or invest in mortgage, bridge or mezzanine loans, we
will be at risk of defaults on those loans caused by many
conditions beyond our control, including local and other
economic conditions affecting real estate values, interest rate
changes, rezoning, and failure by the borrower to maintain the
property. If there are defaults under these loans, we may not be
able to repossess and sell quickly any properties securing such
loans. An action to foreclose on a property securing a loan is
regulated by state statutes and regulations and is subject to
many of the delays and expenses of any lawsuit brought in
connection with the foreclosure if the defendant raises defenses
or counterclaims. In the event of default by a mortgagor, these
restrictions, among other things, may impede our ability to
foreclose on or sell the mortgaged property or to obtain
proceeds sufficient to repay all amounts due to us on the loan,
which could reduce the value of our investment in the defaulted
loan. In addition, investments in mezzanine loans involve a
higher degree of risk than long-term senior mortgage loans
secured by income-producing real property because the investment
may become unsecured as a result of foreclosure on the
underlying real property by the senior lender.
We may
invest in various types of real estate-related
securities.
Aside from investments in real estate, we are permitted to
invest in real estate-related securities, including securities
issued by other real estate companies, CMBS, mortgage, bridge,
mezzanine or other loans and Section 1031
tenant-in-common
interests, and we may invest in real estate-related securities
of both publicly traded and private real estate companies. We
are focused, however, on acquiring interests in retail and other
income-producing properties. We may not have the expertise
necessary to maximize the return on our investment in real
estate-related securities. If our advisor determines that it is
advantageous to us to make the types of investments in which our
advisor or its affiliates do not have experience, our advisor
intends to employ persons, engage consultants or partner with
third parties that have, in our advisors opinion, the
relevant expertise necessary to assist our advisor in
evaluating, making and administering such investments.
47
Investments
in real estate-related securities will be subject to specific
risks relating to the particular issuer of the securities and
may be subject to the general risks of investing in subordinated
real estate securities, which may result in losses to
us.
Our investments in real estate-related securities will involve
special risks relating to the particular issuer of the
securities, including the financial condition and business
outlook of the issuer. Issuers of real estate-related equity
securities generally invest in real estate or real
estate-related assets and are subject to the inherent risks
associated with real estate-related investments discussed in
this prospectus, including risks relating to rising interest
rates.
Real estate-related securities are often unsecured and also may
be subordinated to other obligations of the issuer. As a result,
investments in real estate-related securities are subject to
risks of (1) limited liquidity in the secondary trading
market in the case of unlisted or thinly traded securities,
(2) substantial market price volatility resulting from
changes in prevailing interest rates in the case of traded
equity securities, (3) subordination to the prior claims of
banks and other senior lenders to the issuer, (4) the
operation of mandatory sinking fund or call/redemption
provisions during periods of declining interest rates that could
cause the issuer to reinvest redemption proceeds in lower
yielding assets, (5) the possibility that earnings of the
issuer may be insufficient to meet its debt service and
distribution obligations and (6) the declining
creditworthiness and potential for insolvency of the issuer
during periods of rising interest rates and economic slow down
or downturn. These risks may adversely affect the value of
outstanding real estate-related securities and the ability of
the issuers thereof to repay principal and interest or make
distribution payments.
The
CMBS in which we may invest are subject to all of the risks of
the underlying mortgage loans, the risks of the securitization
process and dislocations in the mortgage-backed securities
market in general.
CMBS are securities that evidence interests in, or are secured
by, a single commercial mortgage loan or a pool of commercial
mortgage loans. Accordingly, these securities are subject to all
of the risks of the underlying mortgage loans. In a rising
interest rate environment, the value of CMBS may be adversely
affected when payments on underlying mortgages do not occur as
anticipated, resulting in the extension of the securitys
effective maturity and the related increase in interest rate
sensitivity of a longer-term instrument. The value of CMBS may
also change due to shifts in the markets perception of
issuers and regulatory or tax changes adversely affecting the
mortgage securities market as a whole. In addition, CMBS are
subject to the credit risk associated with the performance of
the underlying mortgage properties. CMBS are issued by
investment banks, not financial institutions, and are not
insured or guaranteed by the U.S. government.
CMBS are also subject to several risks created through the
securitization process. Subordinate CMBS are paid interest only
to the extent that there are funds available to make payments.
To the extent the collateral pool includes delinquent loans,
there is a risk that interest payments on subordinate CMBS will
not be fully paid. Subordinate CMBS are also subject to greater
credit risk than those CMBS that are more highly rated. In
certain instances, third-party guarantees or other forms of
credit support can reduce the credit risk.
The value of any CMBS in which we invest may be negatively
impacted by any dislocation in the mortgage-backed securities
market in general. Currently, the mortgage-backed securities
market is suffering from a severe dislocation created by
mortgage pools that include
sub-prime
mortgages secured by residential real estate.
Sub-prime
loans often have high interest rates and are often made to
borrowers with credit scores that would not qualify them for
prime conventional loans. In recent years, banks made a great
number of the
sub-prime
residential mortgage loans with high interest rates, floating
interest rates, interest rates that reset from time to time,
and/or
interest-only payment features that expire over time. These
terms, coupled with rising interest rates, have caused an
increasing number of homeowners to default on their mortgages.
Purchasers of mortgage-backed securities collateralized by
mortgage pools that include risky
sub-prime
residential mortgages have experienced severe losses as a result
of the defaults and such losses have had a negative impact on
the CMBS market.
48
Federal
Income Tax Risks
Failure
to qualify as a REIT would adversely affect our operations and
our ability to make distributions.
Morris, Manning & Martin, LLP, our legal counsel, will
render an opinion to us that we will be organized in conformity
with the requirements for qualification and taxation as a REIT
under the Internal Revenue Code for our taxable year ending
December 31, 2012, or the first year in which we commence
material operations, and that our proposed method of operations
will enable us to meet the requirements for qualification and
taxation as a REIT beginning with our taxable year ending
December 31, 2012, or the first year in which we commence
material operations. This opinion is based upon our
representations as to the manner in which we are and will be
owned, invest in assets and operate, among other things.
However, our qualification as a REIT will depend upon our
ability to meet requirements regarding our organization and
ownership, distributions of our income, the nature and
diversification of our income and assets and other tests imposed
by the Internal Revenue Code. Morris, Manning &
Martin, LLP will not review our operations or compliance with
the REIT qualification standards on an ongoing basis, and we may
fail to satisfy the REIT requirements in the future. Also, this
opinion will represent Morris, Manning & Martin,
LLPs legal judgment based on the law in effect as of the
date of this prospectus. Morris, Manning & Martin,
LLPs opinion is not binding on the Internal Revenue
Service or the courts and we will not apply for a ruling from
the Internal Revenue Service regarding our status as a REIT.
Future legislative, judicial or administrative changes to the
federal income tax laws could be applied retroactively, which
could result in our disqualification as a REIT.
If we fail to qualify as a REIT for any taxable year, we will be
subject to federal income tax on our taxable income at corporate
rates. In addition, we would generally be disqualified from
treatment as a REIT for the four taxable years following the
year of losing our REIT status. Losing our REIT status would
reduce our net earnings available for investment or distribution
to you because of the additional tax liability. In addition,
distributions to you would no longer qualify for the dividends
paid deduction, and we would no longer be required to make
distributions. If this occurs, we might be required to borrow
funds or liquidate some investments in order to pay the
applicable tax. Our failure to qualify as a REIT would adversely
affect the return on your investment.
Re-characterization
of sale-leaseback transactions may cause us to lose our REIT
status.
We may purchase properties and lease them back to the sellers of
such properties. The Internal Revenue Service could challenge
our characterization of certain leases in any such
sale-leaseback transactions as true leases, which
allows us to be treated as the owner of the property for federal
income tax purposes. In the event that any sale-leaseback
transaction is challenged and re-characterized as a financing
transaction or loan for federal income tax purposes, deductions
for depreciation and cost recovery relating to such property
would be disallowed. If a sale-leaseback transaction were so
re-characterized, we might fail to satisfy the REIT
qualification asset tests or the income
tests and, consequently, lose our REIT status effective
with the year of re-characterization. Alternatively, the amount
of our REIT taxable income could be recalculated, which might
also cause us to fail to meet the distribution requirement for a
taxable year.
You
may have current tax liability on distributions you elect to
reinvest in our common stock.
If you participate in our distribution reinvestment plan, you
will be deemed to have received, and for income tax purposes
will be taxed on, the amount reinvested in shares of our common
stock to the extent the amount reinvested was not a tax free
return of capital. In addition, you will be treated, for tax
purposes, as having received an additional distribution to the
extent the shares are purchased at a discount to fair market
value. As a result, unless you are a tax-exempt entity, you may
have to use funds from other sources to pay your tax liability
on the value of the common stock received.
Distributions
payable by REITs do not qualify for the reduced tax rates that
apply to other corporate distributions.
Tax legislation enacted in 2003, amended in 2005 and extended by
the Tax Relief Unemployment Insurance Reauthorization, and Job
Creation Act of 2010, generally reduces the maximum
U.S. federal income
49
tax rate for distributions payable by corporations to domestic
stockholders that are individuals, trusts or estates to 15%
prior to 2013. Distributions payable by REITs, however,
generally continue to be taxed at the normal rate applicable to
the individual recipient, rather than the 15% preferential rate.
Our distributions will be taxed as ordinary income at the
non-preferential rate, to the extent they are from our current
or accumulated earnings and profits. To the extent distributions
exceed our current or accumulated earnings and profits, they
will be treated first as a tax free return of capital, reducing
the tax basis in each U.S. stockholders shares (but
not below zero), then the distributions will be taxed as gain
from the sale of shares. You should discuss the difference in
treatment of REIT distributions and regular corporate
distributions with your tax advisor.
If our
operating partnership fails to maintain its status as a
partnership, its income may be subject to taxation, which would
reduce the cash available to us for distribution to
you.
We intend to maintain the status of CCPT IV OP, our operating
partnership, as a partnership for federal income tax purposes.
However, if the Internal Revenue Service were to successfully
challenge the status of our operating partnership as an entity
taxable as a partnership, CCPT IV OP would be taxable as a
corporation. In such event, this would reduce the amount of
distributions that the operating partnership could make to us.
This could also result in our losing REIT status, and becoming
subject to a corporate level tax on our income. This would
substantially reduce the cash available to us to make
distributions to you and the return on your investment. In
addition, if any of the partnerships or limited liability
companies through which CCPT IV OP owns its properties, in whole
or in part, loses its characterization as a partnership for
federal income tax purposes, it would be subject to taxation as
a corporation, thereby reducing distributions to our operating
partnership. Such a re-characterization of an underlying
property owner also could threaten our ability to maintain REIT
status.
In
certain circumstances, we may be subject to federal and state
income taxes as a REIT, which would reduce our cash available
for distribution to you.
Even if we qualify and maintain our status as a REIT, we may be
subject to federal income taxes or state taxes. For example, net
income from the sale of properties that are dealer
properties sold by a REIT (a prohibited transaction
under the Internal Revenue Code) will be subject to a 100% tax.
We may not be able to make sufficient distributions to avoid
excise taxes applicable to REITs. We may also decide to retain
income we earn from the sale or other disposition of our
property and pay income tax directly on such income. In that
event, our stockholders would be treated as if they earned that
income and paid the tax on it directly. However, stockholders
that are tax-exempt, such as charities or qualified pension
plans, would have no benefit from their deemed payment of such
tax liability. We may also be subject to state and local taxes
on our income or property, either directly or at the level of
our operating partnership or at the level of the other entities
through which we indirectly own our assets. Any federal or state
taxes we pay will reduce our cash available for distribution to
you.
Legislative
or regulatory action could adversely affect the returns to our
investors.
Changes to the tax laws are likely to occur, and such changes
may adversely affect the taxation of a stockholder. Any such
changes could have an adverse effect on an investment in our
shares or on the market value or the resale potential of our
assets. You are urged to consult with your own tax advisor with
respect to the status of legislative, regulatory or
administrative developments and proposals and their potential
effect on an investment in our shares. You also should note that
our counsels tax opinion is based upon existing law and
treasury regulations, applicable as of the date of its opinion,
all of which are subject to change, either prospectively or
retroactively.
Congress passed major federal tax legislation in 2003, with
modifications to that legislation in 2005 and in 2010. One of
the changes affected by that legislation generally reduced the
tax rate on dividends paid by corporations to individuals to a
maximum of 15% prior to 2013. REIT distributions generally do
not qualify for this reduced rate. The tax changes did not,
however, reduce the corporate tax rates. Therefore, the maximum
corporate tax rate of 35% has not been affected. However, as a
REIT, we generally would not be subject to federal or state
corporate income taxes on that portion of our ordinary income or
capital gain that
50
we distribute currently to our stockholders, and we thus expect
to avoid the double taxation that other corporations
are typically subject to.
Although REITs continue to receive substantially better tax
treatment than entities taxed as corporations, it is possible
that future legislation would result in a REIT having fewer tax
advantages, and it could become more advantageous for a company
that invests in real estate to elect to be taxed, for federal
income tax purposes, as a corporation. As a result, our charter
provides our board of directors with the power, under certain
circumstances, to revoke or otherwise terminate our REIT
election and cause us to be taxed as a corporation, without the
vote of our stockholders. Our board of directors has fiduciary
duties to us and our stockholders and could only cause such
changes in our tax treatment if it determines in good faith that
such changes are in the best interests of our stockholders.
Complying
with the REIT requirements may cause us to forego otherwise
attractive opportunities.
To continue to qualify as a REIT for federal income tax
purposes, we must continually satisfy tests concerning, among
other things, the sources of our income, the nature and
diversification of our assets, the amounts we distribute to our
stockholders and the ownership of shares of our common stock. We
may be required to pay distributions to our stockholders at
disadvantageous times or when we do not have funds readily
available for distribution. Complying with the REIT requirements
may cause us to forego otherwise attractive opportunities. In
addition, we may be required to liquidate otherwise attractive
investments in order to comply with the REIT requirements. Thus,
compliance with the REIT requirements may hinder our ability to
operate solely on the basis of maximizing profits.
Foreign
purchasers of our common stock may be subject to FIRPTA tax upon
the sale of their shares.
A foreign person disposing of a U.S. real property
interest, including shares of a U.S. corporation whose
assets consist principally of U.S. real property interests,
is generally subject to the Foreign Investment in Real Property
Tax Act of 1980, as amended (FIRPTA) on the gain recognized on
the disposition. Such FIRPTA tax does not apply, however, to the
disposition of stock in a REIT if the REIT is domestically
controlled. A REIT is domestically controlled
if less than 50% of the REITs stock, by value, has been
owned directly or indirectly by persons who are not qualifying
U.S. persons during a continuous five-year period ending on
the date of disposition or, if shorter, during the entire period
of the REITs existence. We cannot assure you that we will
qualify as a domestically controlled REIT. If we
were to fail to so qualify, gain realized by foreign investors
on a sale of our shares would be subject to FIRPTA tax, unless
our shares were traded on an established securities market and
the foreign investor did not at any time during a specified
testing period directly or indirectly own more than 10% of the
value of our outstanding common stock. See the Federal
Income Tax Considerations Special Tax Considerations
for
Non-U.S. Stockholders
Sale of Our Shares by a
Non-U.S. Stockholder
section of this prospectus.
For
qualified accounts, if an investment in our shares constitutes a
prohibited transaction under ERISA or the Internal Revenue Code,
it is possible that you may be subject to the imposition of
significant excise taxes and penalties with respect to the
amount invested. In order to avoid triggering additional taxes
and/or penalties, if you intend to invest in our shares through
pension or profit-sharing trusts or IRAs, you should consider
additional factors.
If you are investing the assets of a pension, profit-sharing,
401(k), Keogh or other qualified retirement plan or the assets
of an IRA in our common stock, you should satisfy yourself that,
among other things:
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your investment is consistent with your fiduciary obligations
under ERISA and the Internal Revenue Code;
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your investment is made in accordance with the documents and
instruments governing your plan or IRA, including your
plans investment policy;
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your investment satisfies the prudence and diversification
requirements of ERISA and other applicable provisions of ERISA
and the Internal Revenue Code;
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51
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your investment will not impair the liquidity of the plan or IRA;
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your investment will not produce UBTI for the plan or IRA;
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you will be able to value the assets of the plan annually in
accordance with ERISA requirements and applicable provisions of
the plan or IRA; and
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your investment will not constitute a prohibited transaction
under Section 406 of ERISA or Section 4975 of the
Internal Revenue Code.
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Failure to satisfy the fiduciary standards of conduct and other
applicable requirements of ERISA and the Internal Revenue Code
may result in the imposition of civil and criminal penalties and
could subject the fiduciary to equitable remedies. In addition,
if an investment in our shares constitutes a prohibited
transaction under ERISA or the Internal Revenue Code, the
fiduciary who authorized or directed the investment may be
subject to the imposition of excise taxes with respect to the
amount invested. For a more complete discussion of the foregoing
risks and other issues associated with an investment in shares
by retirement plans, see the Investment by Tax-Exempt
Entities and ERISA Considerations section of this
prospectus.
52
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements. Such
statements include, in particular, statements about our plans,
strategies and prospects. These forward-looking statements are
not historical facts but are the intent, belief or current
expectations of our business and industry. You can generally
identify forward-looking statements by our use of
forward-looking terminology, such as may,
anticipate, expect, intend,
plan, believe, seek,
estimate, would, could,
should and variations of these words and similar
expressions. You should not rely on our forward-looking
statements because the matters they describe are subject to
known and unknown risks, uncertainties and other unpredictable
factors, many of which are beyond our control. Our actual
results, performance and achievements may be materially
different from that expressed or implied by these
forward-looking statements.
You should carefully review the Risk Factors section
of this prospectus for a discussion of the risks and
uncertainties that we believe are material to our business,
operating results, prospects and financial condition. Except as
otherwise required by federal securities laws, we do not
undertake to publicly update or revise any forward-looking
statements, whether as a result of new information, future
events or otherwise.
53
ESTIMATED
USE OF PROCEEDS
The following table sets forth information about how we intend
to use the proceeds raised in this offering, assuming that we
sell the maximum offering of 300,000,000 shares of common
stock pursuant to this offering. Many of the figures set forth
below represent managements best estimate since they
cannot be precisely calculated at this time. Assuming a maximum
offering, we expect that approximately 88.1% of the money that
stockholders invest (86.8% in a minimum offering or 86.7% if no
shares are sold pursuant to our distribution reinvestment plan)
will be used to purchase real estate or other real
estate-related investments, while the remaining approximately
11.9% (13.2% in a minimum offering or 13.3% if no shares are
sold pursuant to our distribution reinvestment plan) will be
used for working capital, and to pay costs of the offering,
including selling commissions and the dealer manager fee, and
fees and expenses of our advisor in connection with acquiring
properties. Proceeds used to purchase real estate or other real
estate-related investments include proceeds used to repay any
indebtedness incurred in respect of such purchases. We may pay
distributions from proceeds raised in this offering in
anticipation of future cash flows, and we have not placed a
limit on the amount of net proceeds we may use to pay
distributions.
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Minimum Offering
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Maximum Offering
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Maximum Offering
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(Not Including Distribution
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(Including Distribution
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(Not Including Distribution
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Reinvestment Plan)
(1)
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Reinvestment Plan)
(2)
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Reinvestment Plan)
(3)
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Amount
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Percent
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Amount
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Percent
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Amount
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Percent
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Gross Offering Proceeds
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$
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2,500,000
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100
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%
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$
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2,975,000,000
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100
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%
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$
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2,500,000,000
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100
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%
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Less Public Offering Expenses:
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Selling Commissions and Dealer Manager Fee(4)
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225,000
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9.0
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%
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225,000,000
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7.6
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%
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225,000,000
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9.0
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%
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Other Organization and Offering Expenses(5)
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50,000
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2.0
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%
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59,500,000
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2.0
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%
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50,000,000
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2.0
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%
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Amount Available for Investment(6)
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2,225,000
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89.0
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%
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2,690,500,000
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90.4
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%
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2,225,000,000
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89.0
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%
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Acquisition and Development:
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Acquisition Fee(7)
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43,372
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1.7
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%
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52,446,394
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1.8
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%
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43,372,320
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1.8
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%
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Acquisition Expenses(8)
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10,843
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0.4
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%
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13,111,598
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0.4
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%
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10,843,080
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0.4
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%
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Initial Working Capital Reserve(9)
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2,169
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0.1
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%
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2,622,320
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0.1
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%
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2,168,616
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0.1
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%
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Amount Invested in Assets(10)
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$
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2,168,616
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86.8
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%
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$
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2,622,319,688
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88.1
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%
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$
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2,168,615,984
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86.7
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%
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(1)
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Assumes the sale to the public of 250,000 shares at $10.00
per share pursuant to the primary offering and no shares sold
pursuant to the distribution reinvestment plan.
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(2)
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Assumes the sale to the public of 250,000,000 shares at
$10.00 per share pursuant to the primary offering and
50,000,000 shares at $9.50 per share pursuant to the
distribution reinvestment plan. In the event that stockholders
redeem shares pursuant to our share redemption program, the
redemptions will be paid using proceeds from the sale of shares
pursuant to our distribution reinvestment plan. Accordingly, the
amount of proceeds from the maximum offering, including the
distribution reinvestment plan, that is used to purchase real
estate and other real estate-related assets, and to pay
acquisition-related fees and expenses, will be reduced to the
extent that proceeds from our distribution reinvestment plan are
used to pay redemptions.
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(3)
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Assumes the sale to the public of 250,000,000 shares at
$10.00 per share pursuant to the primary offering and no shares
sold pursuant to the distribution reinvestment plan.
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(4)
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Includes selling commissions equal to 7% of the gross proceeds
of our primary offering, which commissions may be reduced under
certain circumstances, and a dealer manager fee equal to 2% of
the gross proceeds of our primary offering, both of which are
payable to the dealer manager, an affiliate of our advisor. The
dealer manager will reallow 100% of the selling commissions to
participating broker-dealers. In addition, the dealer-manager,
in its sole discretion, may reallow to broker-dealers
participating
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in this offering up to all of its dealer manager fee as
marketing fees and due diligence expense allowance based on such
factors as the number of shares sold by the participating
broker-dealer, the participating broker-dealers level of
marketing support, and bona fide conference fees incurred, each
as compared to those of the other participating broker-dealers.
We will not pay a selling commission or a dealer manager fee on
shares purchased pursuant to our distribution reinvestment plan.
The amount of selling commissions may be reduced under certain
circumstances for volume discounts and other types of sales.
Furthermore, we may increase the dealer manager fee to 3% of the
gross proceeds of our primary offering for purchases made
through certain selected dealers, in which event the selling
commission would be reduced to 6% of the gross proceeds of our
primary offering for those purchases. See the Plan of
Distribution section of this prospectus for a description
of such provisions.
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(5)
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Assuming we raise the maximum offering amount, we expect to
reimburse our advisor up to $25,000,000 (0.8% of aggregate gross
offering proceeds, including proceeds from sales of shares under
our distribution reinvestment plan) to cover offering expenses
that are deemed to be underwriting expenses, and we expect to
reimburse our advisor up to $34,500,000 (1.2% of aggregate gross
offering proceeds, including proceeds from sales of shares under
our distribution reinvestment plan) to cover non-underwriting
organization and offering expenses. These organization and
offering expenses consist of all expenses (other than selling
commissions and the dealer manager fee) to be paid by us in
connection with the offering, including (i) our legal,
accounting, printing, mailing and filing fees, charges of our
transfer agent for account set up fees, due diligence expenses
that are included in a detailed and itemized invoice (such as
expenses related to a review of this offering by one or more
independent due diligence reviewers engaged by broker-dealers
participating in this offering); (ii) amounts to reimburse
our advisor for the portion of the salaries paid to employees of
its affiliates that are attributed to services rendered to our
advisor in connection with preparing supplemental sales
materials for us, holding educational conferences and attending
retail seminars conducted by our participating broker-dealers
and (iii) reimbursements for our dealer managers
wholesaling costs, and other marketing and organization costs,
including (a) payments made to participating broker-dealers
for performing these services, (b) the
dealer-managers wholesaling commissions, salaries and
expense reimbursements, (c) the dealer managers due
diligence costs and legal fees and (d) costs associated
with business entertainment, logoed items and sales incentives.
Expenses to educational conferences and retail seminars
described in (ii) above, expenses relating to our
dealer-managers wholesaling costs and payments to
participating broker-dealers described in (iii) above and
expenses described in (iii)(b) and (iii)(c) above will
constitute underwriting compensation, subject to the
underwriting limit of 10% of the gross proceeds of our primary
offering.
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In no event will total organization and offering expenses,
including selling commissions, the dealer manager fee and
reimbursement of other organization and offering expenses,
exceed 15% of the gross proceeds of this offering, including
proceeds from sales of shares under our distribution
reinvestment plan.
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(6)
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Until required in connection with the acquisition of real estate
or other real estate-related investments, substantially all of
the net proceeds of this offering and, thereafter, any working
capital reserves we may have, may be invested in short-term,
highly-liquid investments including government obligations, bank
certificates of deposit, short-term debt obligations and
interest-bearing accounts.
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(7)
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Acquisition fees are defined generally as fees and commissions
paid by any party to any person in connection with identifying,
reviewing, evaluating, investing in and the purchase,
development or construction of properties, or the making or
investing in loans or other real estate-related investments. We
will pay our advisor acquisition fees up to a maximum amount of
2% of the contract purchase price of each property or asset
acquired. With respect to a development or a redevelopment
project, we will pay our advisor an acquisition fee of 2% of the
amount expended on such project. For purposes of this table, we
have assumed that the aggregate contract purchase price for our
assets will be an amount equal to the estimated amount invested
in assets. With respect to any loan we originate or acquire, we
will pay our advisor an acquisition fee of 2% of the amount of
the loan. For purposes of this table, we also have assumed that
no financing is used to acquire properties or other real estate
assets. We may incur additional fees, such as real estate
commissions, development fees, construction fees, non-recurring
management fees, loan fees or points, or any fee of a similar
nature. Acquisition fees do not include acquisition expenses.
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(8)
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Acquisition expenses include legal fees and expenses, travel
expenses, costs of appraisals, nonrefundable option payments on
property not acquired, accounting fees and expenses, title
insurance premiums and other closing costs and miscellaneous
expenses relating to the selection, acquisition and development
of real estate properties. For purposes of this table, we have
assumed average expenses of 0.5% of the estimated amount
invested in assets; however, expenses on a particular
acquisition may be higher. Acquisition expenses are not included
in the contract purchase price of an asset. Notwithstanding the
foregoing, the total of all acquisition expenses and acquisition
fees paid by any party to any party, including any real estate
commission, selection fee, development fees paid to an affiliate
of our advisor, construction fee paid to an affiliate of our
advisor, non-recurring management fee, loan fees or point or any
fee of a similar nature, payable with respect to a particular
property or investment shall be reasonable, and shall not exceed
an amount equal to 6% of the contract purchase price of the
property, or in the case of a mortgage loan 6% of the funds
advanced, unless a majority of our directors (including a
majority of our independent directors) not otherwise interested
in the transaction approve fees and expenses in excess of this
limit and determine the transaction to be commercially
competitive, fair and reasonable to us.
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(9)
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Working capital reserves typically are utilized for
extraordinary expenses that are not covered by revenue generated
by the property, such as tenant improvements, leasing
commissions and major capital expenditures. Alternatively, a
lender may require its own formula for escrow of working capital
reserves. Because we expect most of our leases will be triple
net or double net leases, as described elsewhere herein, we do
not expect to maintain significant working capital reserves.
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(10)
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Includes amounts anticipated to be invested in properties net of
organization and offering expenses, acquisition fees and
expenses and initial working capital reserves.
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MANAGEMENT
General
We operate under the direction of our board of directors, the
members of which are accountable to us and our stockholders as
fiduciaries. We have retained CR IV Advisors as our advisor to
manage our
day-to-day
affairs and the acquisition and disposition of our investments,
subject to our board of directors supervision. Our charter
has been reviewed and ratified by our board of directors,
including a majority of the independent directors. This
ratification by our board of directors is required by the NASAA
REIT Guidelines.
Our charter and bylaws will provide that the number of directors
on our board of directors may be established by a majority of
the entire board of directors, but may not be more than 15, nor,
upon and after the commencement of this offering, fewer than
three; provided, however, that there may be fewer than three
directors at any time that we have only one stockholder of
record. Our charter will provide, in general, that, upon and
after commencement of this offering, a majority of the directors
must be independent directors. An independent
director is a person who is not, and within the last two
years has not been, directly or indirectly associated with us or
any of our affiliates or with our sponsor, our advisor or any of
their affiliates by virtue of (1) ownership of an interest
in our sponsor, our advisor or any of their affiliates,
(2) employment by us, our sponsor our advisor or any of our
or their affiliates, (3) service as an officer or director
of our sponsor, our advisor or any of their affiliates,
(4) performance of services, (5) service as a director
of more than three REITs organized by our sponsor or advised by
our advisor, or (6) maintenance of a material business or
professional relationship with our sponsor, our advisor or any
of their affiliates. Each director deemed to be independent
pursuant to our charter also will be independent in accordance
with the NASAA REIT Guidelines. There are no family
relationships among any of our directors or officers, or
officers of our advisor. Each director who is not an independent
director must have at least three years of relevant experience
demonstrating the knowledge and experience required to
successfully acquire and manage the type of assets being
acquired by us. At least one of our independent directors must
have at least three years of relevant real estate experience.
Each director will serve until the next annual meeting of
stockholders or until his or her successor is duly elected and
qualifies. Although the number of directors may be increased or
decreased, a decrease will not have the effect of shortening the
term of any incumbent director.
Any director may resign at any time and may be removed with or
without cause by the stockholders upon the affirmative vote of
at least a majority of all the votes entitled to be cast at a
meeting properly called for the purpose of the proposed removal.
The notice of the meeting will indicate that the purpose, or one
of the purposes, of the meeting is to determine if the director
shall be removed. None of the members of our board of directors,
nor our advisor, nor any of their affiliates, may vote or
consent on matters submitted to the stockholders regarding the
removal of our advisor or any director or any of their
affiliates or any transaction between us and any of them. In
determining the requisite percentage in interest required to
approve such a matter, shares owned by members of our board of
directors and their respective affiliates will not be included.
Any vacancy created by an increase in the number of directors or
the death, resignation, removal, adjudicated incompetence or
other incapacity of a director may be filled only by a vote of a
majority of the remaining directors. Independent directors shall
nominate replacements for vacancies in the independent director
positions. If at any time there are no directors in office,
successor directors shall be elected by the stockholders. Each
director will be bound by our charter and bylaws.
Our directors will not be required to devote all of their time
to our business and only are required to devote the time to our
affairs as their duties require. Our directors meet quarterly,
in person or by teleconference, or more frequently if necessary.
Consequently, in the exercise of their responsibilities, the
directors will rely heavily on our advisor and on information
provided by our advisor. Our directors have a fiduciary duty to
our stockholders to supervise the relationship between us and
our advisor. Our board of directors is empowered to fix the
compensation of all officers that it selects and approve the
payment of compensation to directors for services rendered to us.
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Our board of directors has adopted written policies on
investments and borrowing, the general terms of which are set
forth in this prospectus. The directors may revise those
policies or establish further written policies on investments
and borrowings and monitor our administrative procedures,
investment operations and performance to ensure that the
policies are fulfilled and are in the best interests of our
stockholders. During the discussion of a proposed transaction,
independent directors may offer ideas for ways in which
transactions may be structured to offer the greatest value to
us, and our advisor will take these suggestions into
consideration when structuring transactions.
In addition, our board of directors is responsible for reviewing
our fees and expenses on at least an annual basis and with
sufficient frequency to determine that the expenses incurred are
in the best interests of the stockholders. In addition, a
majority of the directors, including a majority of the
independent directors, who are not otherwise interested in the
transaction must approve all transactions with our advisor or
its affiliates. The independent directors also will be
responsible for reviewing the performance of our advisor and
determining, from time to time and at least on an annual basis,
that the compensation to be paid to our advisor is reasonable in
relation to the nature and quality of services to be performed
and that the provisions of the advisory agreement are being
carried out. The independent directors will consider such
factors as they deem relevant, including:
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the amount of the fees paid to our advisor in relation to the
size, composition and performance of our investments;
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the success of our advisor in generating appropriate investment
opportunities;
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rates charged to other REITs, especially REITs of similar
structure, and to investors other than REITs by advisors
performing similar services;
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additional revenues realized by our advisor and its affiliates
through their relationship with us, including loan
administration, underwriting or broker commissions, and
servicing, engineering, inspection and other fees, whether such
amounts are paid by us or others with whom we do business;
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the quality and extent of service and advice furnished by our
advisor and the performance of our investment portfolio; and
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the quality of our portfolio relative to the investments
generated by our advisor for its own account.
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The advisory agreement has a one-year term and may be renewed
for an unlimited number of successive one-year periods. Either
party may terminate the advisory agreement upon
60 days written notice without cause or penalty. Fees
payable to our advisor pursuant to the advisory agreement,
including any fees that may be paid upon termination of the
advisory agreement, are described below under the caption
The Advisory Agreement and the section
of this prospectus captioned Management Compensation.
Neither our advisor nor any of its affiliates will vote or
consent to the voting of shares of our common stock they now own
or hereafter acquire on matters submitted to the stockholders
regarding either (1) the removal of our advisor, any
director or any of their respective affiliates, or (2) any
transaction between us and our advisor, any director or any of
their respective affiliates. In determining the requisite
percentage in interest required to approve such a matter, shares
owned by our advisor and its affiliates will not be included.
Committees
of our Board of Directors
Our entire board of directors will be responsible for
supervising our entire business. However, our bylaws provide
that our board of directors may establish such committees as our
board of directors believes appropriate and in our best
interests. Our board of directors will appoint the members of
the committee in our board of directors discretion. Our
charter and bylaws require that a majority of the members of
each committee of our board of directors is comprised of
independent directors.
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Audit
Committee
Our board of directors has established an audit committee
consisting of J. Marc Myers and Scott P. Sealy, Sr.,
our independent directors. Mr. Sealy serves as chairman of the
audit committee. The audit committee, by approval of at least a
majority of its members, will select the independent registered
public accounting firm to audit our annual financial statements,
review with the independent registered public accounting firm
the plans and results of the audit engagement, approve the audit
and non-audit services provided by the independent registered
public accounting firm, review the independence of the
independent registered public accounting firm, consider the
range of audit and non-audit fees and review the adequacy of our
internal accounting controls. Our board of directors has adopted
a charter for the audit committee that sets forth its specific
functions and responsibilities.
Executive
Officers and Directors
Our board of directors has elected Christopher H. Cole to serve
as our chief executive officer and president and D. Kirk
McAllaster, Jr. to serve as our executive vice president,
chief financial officer and treasurer. Although most of the
services Mr. McAllaster provides to our company are in his
role as an executive officer of our advisor, both Messrs. Cole
and McAllaster have certain duties in their capacities as
executive officers of our company arising from Maryland
corporate law, our charter and bylaws. We do not directly
compensate Messrs. Cole or McAllaster for their services as
executive officers of our company, nor do we reimburse our
advisor or any affiliate of our advisor for their salaries or
benefits. We have provided below certain information about our
executive officers and directors.
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Name
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Age*
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Position(s)
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Christopher H. Cole
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Chairman of the Board of Directors, Chief Executive Officer and
President
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D. Kirk McAllaster, Jr.
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Executive Vice President, Chief Financial Officer and Treasurer
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J. Marc Myers
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Independent Director
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Scott P. Sealy, Sr.
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Independent Director
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*
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As of January 24, 2012.
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Christopher H. Cole
has served as our chairman, chief
executive officer and president since our formation in July
2010. He served as the chief executive officer and president of
CR IV Advisors, our advisor, from its formation in July 2010
until June 2011. Mr. Cole has served as the chairman, chief
executive officer and president of Cole Credit Property Trust,
Inc. (CCPT I) since its formation in March 2004. He served
as the chief executive officer of Cole REIT Advisors, LLC (CCPT
I Advisors) from its formation in April 2004 until June 2011,
and as its president from April 2004 until March 2007 and from
October 2007 until April 2010. Mr. Cole has served as the
chairman, chief executive officer and president of Cole Credit
Property Trust II, Inc. (CCPT II) since its formation
in September 2004. He served as the chief executive officer of
Cole REIT Advisors II, LLC (CCPT II Advisors) from its formation
in September 2004 until June 2011, and as its president from
September 2004 until March 2007 and from October 2007 until
April 2010. Mr. Cole has served as the chairman, chief
executive officer and president of CCPT III since its formation
in January 2008. He served as the chief executive officer of
Cole REIT Advisors III, LLC (CCPT III Advisors) from its
formation in January 2008 until June 2011, and as its president
from January 2008 until April 2010 and as its treasurer from
January 2008 until September 2008. He has served as the
chairman, chief executive officer and president of CCIT since
its formation in April 2010. He served as the chief executive
officer of Cole Corporate Income Advisors, LLC (Cole Corporate
Income Advisors) from its formation in April 2010 until June
2011. Mr. Cole has served as the chairman, chief executive
officer and president of Cole Income NAV Strategy since its
formation in July 2010. He served as the chief executive officer
of Cole Real Estate Income Strategy (Daily NAV) Advisors, LLC
(Cole Income NAV Strategy Advisors) from its formation in July
2010 until June 2011.
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Mr. Cole has been the sole shareholder and treasurer of
Cole Holdings Corporation, the parent company of our advisor and
affiliates, since its formation in August 2004, has served as
its chairman and secretary since October 2007, and previously
served as its chief executive officer from August 2004 until
June 2011 and as its president from August 2004 until April
2010. Mr. Cole has also been engaged as a general partner
in the structuring and management of real estate limited
partnerships since February 1979. Mr. Cole has served as
the treasurer of Cole Realty Advisors since its formation in
November 2002, and previously served as its chief executive
officer from December 2002 until June 2011, as its president
from November 2002 until March 2007 and from October 2007 until
September 2009, and as its secretary from November 2002 until
December 2002. Mr. Cole has served as the treasurer of Cole
Capital Partners since January 2003, and previously served as
its chief executive officer from January 2003 until June 2011,
and as its president from January 2003 to March 2007 and from
October 2007 until April 2010. Mr. Cole has served as the
treasurer of Cole Capital Advisors since its formation in
November 2002, and previously served as its chief executive
officer from December 2002 until June 2011, as its president
from November 2002 until March 2007 and from October 2007 until
April 2010, and as secretary from November 2002 until December
2002.
Mr. Cole has served as the chief executive officer and
treasurer of the Cole Growth Opportunity Fund I GP, LLC
since its formation in March 2007. Mr. Cole served as the
executive vice president and treasurer of Cole Capital
Corporation from December 2002 until January 2008. Mr. Cole
has been the sole director of Cole Capital Corporation since
December 2002. Mr. Cole was selected to serve as a director
of our company because he is the chief executive officer of our
company, and Mr. Coles experience and relationships
in the non-listed REIT and real estate industries, along with
his knowledge of the Cole Real Estate Investments organization,
are believed to provide significant value to the board of
directors.
D. Kirk McAllaster, Jr.
has served as our executive vice
president, chief financial officer and treasurer since our
formation in July 2010. He also has served as executive vice
president and chief financial officer (REITs and real estate
funds) of CR IV Advisors since January 2012 and as its executive
vice president and chief financial officer from its formation in
July 2010 until January 2012. Mr. McAllaster has also served as
executive vice president and chief financial officer of CCPT I
and CCPT II since October 2007, as the treasurer of each since
May 2011, and has been a member of the board of directors of
CCPT I since May 2008. He has served as executive vice
president, chief financial officer and treasurer of CCPT III
since its formation in January 2008, and served as its secretary
from January 2008 to November 2010. He has served as executive
vice president and chief financial officer (REITs and real
estate funds) of CCPT I Advisors and CCPT II Advisors since
January 2012, and previously served as executive vice president
and chief financial officer of each from March 2007 until
January 2012, and as vice president, finance of each from
December 2005 until March 2007. He also has served as executive
vice president and chief financial officer (REITs and real
estate funds) of CCPT III Advisors since January 2012 and as its
executive vice president and chief financial officer from its
formation in January 2008 until January 2012. He has served as
executive vice president, chief financial officer, and treasurer
of CCIT since its formation in April 2010 and served as its
secretary from April 2010 until August 2010 and from January
2011 until March 2011. He has served as executive vice president
and chief financial officer (REITs and real estate funds) of
Cole Corporate Income Advisors since January 2012 and as its
executive vice president and chief financial officer from its
formation in April 2010 until January 2012. He has served as the
executive vice president, chief financial officer and treasurer
of Cole Income NAV Strategy since its formation in July 2010. He
has served as executive vice president and chief financial
officer (REITs and real estate funds) of Cole Income NAV
Strategy Advisors since January 2012 and as its executive vice
president and chief financial officer from its formation in July
2010 until January 2012. Mr. McAllaster has served as executive
vice president and chief financial officer (REITs and real
estate funds) of Cole Realty Advisors since January 2012 and as
its treasurer since September 2009, and previously served as
executive vice president and chief financial officer from March
2007 until January 2012. Mr. McAllaster has served as executive
vice president and chief financial officer (REITs and real
estate funds) of Cole Capital Partners and Cole Capital Advisors
since January 2012, and previously served as executive vice
president and chief financial officer of each from March 2007
until January 2012 and as vice president, finance of each from
December 2005 until March 2007. Prior to joining Cole Real
Estate Investments in May 2003, Mr. McAllaster worked for
six years with Deloitte & Touche LLP, most recently as
audit senior manager. He has over 20 years of accounting
and finance experience in public accounting and
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private industry. Mr. McAllaster received a B.S. degree
from California State Polytechnic University Pomona
with a major in Accounting. He is a Certified Public Accountant
licensed in the states of Arizona and Tennessee and is a member
of the American Institute of CPAs and the Arizona Society of
CPAs.
J. Marc Myers
has served as an independent director
since January 2012. Mr. Myers co-founded Myers &
Crow Company, Ltd., a real estate development company, in 1994,
and is a partner of that firm. Prior to that, Mr. Myers
spent 23 years with Trammell Crow Company, where he was chief
executive officer of the Dallas Industrial Division and a member
of its management board. Mr. Myers is active in a number of
real estate organizations and is a member of the Dallas Real
Estate Developer Hall of Fame. In addition, Mr. Myers
serves on the board of directors for the Baylor Health Care
System Foundation. He is a recent past chairman of the McCombs
School of Business Advisory Council. He also has served on the
boards of the Childrens Medical Center of Dallas, Special
Camps for Special Kids and the University of Texas at
Austins Commission of 125. Mr. Myers received a B.B.A
and an M.B.A. from the University of Texas at Austin. After
receiving his degrees, Mr. Myers served in the U.S. Army as
a Second Lieutenant. Mr. Myers was selected to serve as a
director of our company because of his significant leadership
experience in the real estate industry, which is expected to
bring valuable insight to the board of directors.
Scott P. Sealy, Sr.
has served as an independent
director since January 2012. Mr. Sealy also serves as a
director of CCPT III, a position he has held since October 2008.
Mr. Sealy has been a principal of Sealy &
Company, Incorporated, a real estate and investment company,
since 1968 and has served as chairman of its board of directors
since February 2000. Mr. Sealy provides strategic planning
and business development for the company, which is in the
business of acquisitions, repositioning and
ground-up
development of regional distribution and industrial facilities.
During his tenure, Sealy & Company, Incorporated and
its affiliates have acquired or developed and sold over
$1 billion of industrial real estate totaling approximately
31 million square feet. In 2008, Sealy & Company,
Incorporated entered into a $200 million joint venture with
California State Teachers Retirement System (CalSTRS). The
joint venture, named SeaCal, pursues the acquisition and
development of value-added industrial and office properties.
Mr. Sealy is a member of the Society of Industrial and
Office Realtors and has served as a chapter president, a member
of its national board of directors, and a member of its
strategic planning committee. Mr. Sealy was selected to
serve as a director of our company because of his significant
real estate and leadership experience as a fiduciary to other
real estate programs. Our board of directors believes that this
experience will assist the board of directors in its strategic
and operational initiatives.
Duties of
Independent Directors
In accordance with the NASAA REIT Guidelines, a majority of our
independent directors generally must approve corporate actions
that directly relate to the following:
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any transfer or sale of our sponsors initial investment in
us; provided, however, our sponsor may not sell its initial
investment while it remains our sponsor, but our sponsor may
transfer the shares to an affiliate;
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the duties of our directors, including ratification of our
charter, the written policies on investments and borrowing, the
monitoring of administrative procedures, investment operations
and our performance and the performance of our advisor;
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the advisory agreement;
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liability and indemnification of our directors, advisor and its
affiliates;
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fees, compensation and expenses, including organization and
offering expenses, acquisition fees and acquisition expenses,
total operating expenses, real estate commissions on the resale
of property, incentive fees, and advisor compensation;
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any change or modification of our statement of objectives;
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real property appraisals;
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our borrowing policies;
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annual and special meetings of stockholders;
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election of our directors; and
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our distribution reinvestment plan.
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Compensation
of Directors
We intend to pay to each of our independent directors a retainer
of $50,000 per year, plus an additional retainer of $7,500 to
the chairman of the audit committee. We also intend to pay
$2,000 for each meeting of our board of directors or committee
thereof the director attends in person ($2,500 for the
attendance in person by the chairperson of the audit committee
at each meeting of the audit committee) and $250 for each
meeting the director attends by telephone. In the event there is
a meeting of our board of directors and one or more committees
thereof in a single day, the fees paid to each director will be
limited to $2,500 per day ($3,000 per day for the chairperson of
the audit committee if there is a meeting of such committee).
All directors will receive reimbursement of reasonable
out-of-pocket
expenses incurred in connection with attendance at each meeting
of our board of directors. Independent directors will not be
reimbursed by us, our sponsor, our advisor or any of their
affiliates for spouses expenses to attend events to which
spouses are invited. If a non-independent director is also an
employee of our company or our advisor or their affiliates, we
will not pay compensation for services rendered as a director.
We will not compensate Mr. Cole for his service to us on
the board of directors.
Limited
Liability and Indemnification of Our Directors, Officers,
Advisor and Other Agents
We are permitted to limit the liability of our directors and
officers, and to indemnify and advance expenses to our
directors, officers and other agents, only to the extent
permitted by Maryland law and the NASAA REIT Guidelines. Our
charter contains a provision that eliminates directors and
officers liability for money damages, requires us to
indemnify and, in certain circumstances, advance expenses to our
directors, officers, our advisor and its affiliates and permits
us to indemnify and advance expenses to our employees and
agents, subject to the limitations of Maryland law and the NASAA
REIT Guidelines. To the extent that our board of directors
determines that the Maryland General Corporation Law conflicts
with the provisions set forth in the NASAA REIT Guidelines, the
NASAA REIT Guidelines will control, unless the provisions of the
Maryland General Corporation Law are mandatory under Maryland
law.
Maryland law permits us to include in our charter a provision
limiting the liability of our directors and officers to our
stockholders and us for money damages, except for liability
resulting from (i) actual receipt of an improper benefit or
profit in money, property or services or (ii) active and
deliberate dishonesty established by a final judgment and that
is material to the cause of action.
The Maryland General Corporation Law requires us (unless our
charter provides otherwise, which our charter does not) to
indemnify a director or officer who has been successful in the
defense of any proceeding to which he is made or threatened to
be made a party by reason of his service in that capacity. The
Maryland General Corporation Law allows directors and officers
to be indemnified against judgments, penalties, fines,
settlements and expenses actually incurred by them in connection
with any proceeding unless it is established that:
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an act or omission of the director or officer was material to
the cause of action adjudicated in the proceeding and was
committed in bad faith or was the result of active and
deliberate dishonesty;
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the director or officer actually received an improper personal
benefit in money, property or services;
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with respect to any criminal proceeding, the director or officer
had reasonable cause to believe his act or omission was
unlawful; or
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in a proceeding by us or on our behalf, the director or officer
was adjudged to be liable to us or for a judgment of liability
on the basis that personal benefit was improperly received
(although in either case a court may order indemnification
solely for expenses).
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In addition to the above limitations of the Maryland General
Corporation Law, and as set forth in the NASAA REIT Guidelines,
our charter further limits our ability to indemnify our
directors, our advisor and its affiliates for losses or
liability suffered by them or hold harmless our directors or our
advisor and its affiliates for losses or liability suffered by
us by requiring that the following additional conditions are met:
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the directors, our advisor or its affiliates have determined, in
good faith, that the course of conduct that caused the loss or
liability was in our best interests;
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the directors, our advisor or its affiliates were acting on our
behalf or performing services for us;
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in the case of non-independent directors, our advisor or its
affiliates, the liability or loss was not the result of
negligence or misconduct by the party seeking indemnification;
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in the case of independent directors, the liability or loss was
not the result of gross negligence or willful misconduct by the
party seeking indemnification; and
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the indemnification or agreement to hold harmless is recoverable
only out of our net assets and not from the stockholders.
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We also will agree to indemnify and hold harmless our advisor
and its affiliates performing services for us from specific
claims and liabilities arising out of the performance of their
obligations under the advisory agreement. As a result, our
stockholders and we may be entitled to a more limited right of
action than they and we would otherwise have if these
indemnification rights were not included in the advisory
agreement.
The general effect to our stockholders of any arrangement under
which we agree to insure or indemnify any persons against
liability is a potential reduction in distributions resulting
from our payment of premiums associated with insurance or
indemnification payments in excess of amounts covered by
insurance. In addition, indemnification could reduce the legal
remedies available to our stockholders and us against our
officers and directors. The Maryland General Corporation Law
permits us to advance reasonable expenses to a director or
officer upon receipt of (1) a written affirmation by the
director or officer of his or her good faith belief that he or
she has met the standard of conduct necessary for
indemnification and (2) a written undertaking by him or her
or on his or her behalf to repay the amount paid or reimbursed
if it is ultimately determined that the standard of conduct was
not met. However, indemnification does not reduce the exposure
of directors and officers to liability under federal or state
securities laws, nor does it limit the stockholders
ability to obtain injunctive relief or other equitable remedies
for a violation of a directors or an officers duties
to us, although the equitable remedies may not be an effective
remedy in some circumstances.
The Securities and Exchange Commission and some state securities
commissions take the position that indemnification against
liabilities arising under the Securities Act is against public
policy and unenforceable. Indemnification of our directors, our
advisor or its affiliates and any persons acting as a
broker-dealer participating in the sale of our securities will
not be allowed for liabilities arising from or out of a
violation of state or federal securities laws, unless one or
more of the following conditions are met:
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there has been a successful adjudication on the merits in favor
of the indemnitee of each count involving alleged securities law
violations;
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such claims have been dismissed with prejudice on the merits by
a court of competent jurisdiction; or
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a court of competent jurisdiction approves a settlement of the
claims against the indemnitee and finds that indemnification of
the settlement and the related costs should be made, and the
court considering the request for indemnification has been
advised of the position of the Securities and Exchange
Commission and of the published position of any state securities
regulatory authority in which our securities were offered as to
indemnification for violations of securities laws.
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Our charter provides that the advancement of our funds to our
directors, our advisor or our advisors affiliates for
legal expenses and other costs incurred as a result of any legal
action for which indemnification is being sought is permissible
only if all of the following conditions are satisfied:
(i) the legal action relates to acts or omissions with
respect to the performance of duties or services on our behalf;
(ii) our directors, our advisor or our advisors
affiliates provide us with written affirmation of their good
faith belief that they have met the standard of conduct
necessary for indemnification; (iii) the legal action is
initiated by a third party who is not a stockholder or, if the
legal action is initiated by a stockholder acting in his or her
capacity as such, a court of competent jurisdiction approves
such advancement; and (iv) our directors, our advisor or
our advisors affiliates agree in writing to repay the
advanced funds to us together with the applicable legal rate of
interest thereon, in cases in which such persons are found not
to be entitled to indemnification.
The
Advisor
Our advisor is CR IV Advisors, a Delaware limited liability
company that was formed on July 27, 2010, and is an
affiliate of our sponsor, Cole Real Estate Investments. Whereas
CR IV Advisors was formed solely for the purpose of managing our
company and has no prior operating history, certain employees
within the Cole Real Estate Investments organization, which
employed over 275 persons as of the date of this
prospectus, perform the services required to manage our
operations. These employees include the members of our
advisors real estate management team. Our advisor has
contractual and fiduciary responsibility to us and our
stockholders. Our advisor is wholly-owned indirectly by
Christopher H. Cole.
The officers and key personnel of our advisor or certain
affiliates are as follows:
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Name
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Age*
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Position(s)
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Marc T. Nemer
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Chief Executive Officer and President
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Jeffrey C. Holland
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40
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Executive Vice President and Head of Capital Markets
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Chong P. Huan
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Executive Vice President and Chief Technology Officer
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Indraneel Karlekar
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39
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Executive Vice President and Chief Investment Strategist
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Stephan Keller
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44
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Executive Vice President and Chief Financial Officer
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D. Kirk McAllaster, Jr.
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45
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Executive Vice President and Chief Financial Officer (REITs and
Real Estate Funds)
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John M. Pons
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Executive Vice President, Secretary and General Counsel, Real
Estate
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Thomas W. Roberts
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53
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Executive Vice President and Managing Director of Real Estate
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Mitchell A. Sabshon
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Executive Vice President and Chief Operating Officer
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Kim S. Kundrak
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55
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Chief Acquisitions OfficerSingle Tenant Retail
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*
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As of January 24, 2012.
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The background of Mr. McAllaster is described in the
Executive Officers and Directors section
above. Below is a brief description of the other executive
officers and key employees of CR IV Advisors.
Marc T. Nemer
has served as chief executive officer of
our advisor since June 2011 and as its president since its
formation in July 2010. Since May 2010, Mr. Nemer has
served as a member of the boards of directors of CCPT I and CCPT
III; since January 2011, he has served as a member of the board
of directors of CCIT; and since January 2012, he has served as a
member of the board of directors of Cole Income NAV Strategy.
Mr. Nemer has served as chief executive officer of Cole
Holdings Corporation since June 2011 and its president since
April 2010. He has served as the president, secretary and
treasurer of Cole Capital Corporation since January 2008.
Mr. Nemer has served as chief executive officer of Cole
Capital Advisors since June 2011 and as its president since
April 2010, and previously served as its executive vice
president and managing director of capital markets from March
2008 to April 2010, as its executive vice president,
64
securities and regulatory affairs from October 2007 until March
2008, as its vice president, legal services and compliance from
March 2007 until October 2007 and as its legal counsel from
February 2006 to March 2007. He has served as chief executive
officer of Cole Capital Partners since June 2011 and its
president since April 2010, and previously served as its as its
executive vice president and managing director of capital
markets from March 2008 to April 2010, as its executive vice
president, securities and regulatory affairs from October 2007
until March 2008 and as its vice president, legal services and
compliance from March 2007 until October 2007. Mr. Nemer
has served as chief executive officer of CCPT I Advisors and
CCPT II Advisors since June 2011 and as president of each since
April 2010, and previously served as executive vice president
and managing director of capital markets of each from March 2008
until April 2010, and as executive vice president, securities
and regulatory affairs of each from October 2007 until March
2008. He has served as chief executive officer of CCPT III
Advisors since June 2011 and its president since April 2010, and
previously served as executive vice president and managing
director of capital markets from September 2008 until April
2010, and as executive vice president, securities and regulatory
affairs from its formation in January 2008 until September 2008.
Mr. Nemer has served as the chief executive officer of Cole
Income NAV Strategy Advisors since June 2011 and as its
president since its formation in July 2010. He also has served
as chief executive officer of Cole Corporate Income Advisors
since June 2011 and its president since its formation in
April 2010. Mr. Nemer has served as chief executive officer
for Cole Realty Advisors since June 2011, and previously served
as its executive vice president and managing director of capital
markets from March 2008 to June 2011, as its executive vice
president, securities and regulatory affairs from October 2007
until March 2008, and as its vice president, legal services and
compliance from March 2007 until October 2007. Prior to joining
Cole Real Estate Investments, Mr. Nemer was an attorney
with the international law firm Latham & Watkins LLP,
where he specialized in securities offerings (public and
private), corporate governance, and mergers and acquisitions
from July 2000 until February 2006. Prior to that,
Mr. Nemer worked at the international law firm Skadden,
Arps, Slate, Meagher & Flom LLP, where he worked as an
attorney in a similar capacity from August 1998 until July 2000.
Mr. Nemer earned a J.D. from Harvard Law School in 1998 and
a B.A. from the University of Michigan in 1995.
Jeffrey C. Holland
has served as executive vice president
and head of capital markets of CR IV Advisors since January
2011. In this role, he provides strategic direction and oversees
external and internal sales, marketing, broker-dealer relations,
due diligence and securities operations. He also serves as
executive vice president and head of capital markets of Cole
Capital Advisors, Cole Capital Partners, CCPT I Advisors, CCPT
II Advisors, CCPT III Advisors, Cole Corporate Income Advisors
and Cole Income NAV Strategy Advisors. Prior to joining Cole
Real Estate Investments in December 2010, Mr. Holland held
several roles at BlackRock, Inc.s U.S. retail
division, an asset management business focused on financial
advisor-intermediated distribution channels, including chief
operating officer from 2008 to 2010 and co-head of product
development and management from 2006 to 2008. Prior to joining
BlackRock, Mr. Holland served as vice president, consulting
services, for Raymond James & Associates from 2003 to
2006. Mr. Holland served at Capital Resource Advisors from
1999 to 2003, most recently as director in the Business
Strategies Group. From 1996 to 1999, he worked as an engagement
manager for McKinsey & Company, Inc. Mr. Holland
earned a J.D. from Harvard Law School and a B.A. from the
University of Puget Sound.
Chong P. Huan
has served as executive vice president and
chief technology officer of CR IV Advisors since January 2011.
In this role, he is responsible for oversight of all technology
operations, including infrastructure and application
development, strategic planning and information management. He
also serves as executive vice president and chief technology
officer of Cole Capital Advisors, Cole Capital Partners, CCPT I
Advisors, CCPT II Advisors, CCPT III Advisors, Cole Corporate
Income Advisors and Cole Income NAV Strategy Advisors. Prior to
joining Cole Real Estate Investments, Mr. Huan served as
principal and founder of CIR Solutions LLC, an information
technology consulting firm, from 2009 to 2010. Mr. Huan
served as chief technology officer and managing director for
Citi Global Investment Research from 2007 to 2009. Prior to
joining Citi Global Investment Research, he served as senior
information officer and vice president of AIG Investment in
2007, chief information officer and senior managing director of
New York Life Investment Management from 2000 to 2006, and head
of information technology in the Americas with UBS Private
Banking and Asset Management from 1996 to 2000. Mr. Huan
holds an Executive Masters in technology management from The
Wharton School, University of Pennsylvania and an M.B.A. from
Northeastern
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University, and received a B.S. in engineering with honors from
Oxford, U.K. He is also a Moore Fellow at the University of
Pennsylvanias School of Engineering and Applied Sciences.
Indraneel Karlekar
has served as executive vice president
and chief investment strategist of CR IV Advisors since May
2011. In this role, he is responsible for leading our
advisors real estate investment strategy and continually
enhancing Cole Real Estate Investments product offerings.
He also works on a broad range of initiatives across the Cole
Real Estate Investments organization, including serving as the
firms economist. Mr. Karlekar also serves as
executive vice president and chief investment strategist of Cole
Capital Advisors, Cole Capital Partners, CCPT I Advisors, CCPT
II Advisors, CCPT III Advisors, Cole Corporate Income Advisors
and Cole Income NAV Strategy Advisors. Prior to joining Cole
Real Estate Investments in May 2011, Mr. Karlekar was head
of global research and strategy at ING Clarion Real Estate
Securities/ING Clarion Partners from 2003 through April 2011,
where he was a member of the firms investment team and
head of its asset allocation committee. Mr. Karlekar served
as vice president and head of research of AIG Global Real Estate
in 2003, and as a senior analyst Asia-Pacific for
The Economist Intelligence Unit (Economist Group) from 1999 to
2003. Mr. Karlekar received his Ph.D. in Economic Geography
and his M.Phil. in International Relations from the University
of Cambridge, England; an M.A. in International History from
Jawaharlal Nehru University, New Delhi, India; and a B.A. in
Global History from St. Stephens College in New Delhi,
India.
Stephan Keller
has served as executive vice president and
chief financial officer of our advisor since January 2012. In
this role, he is responsible for leading our advisors
accounting and reporting functions. He also focuses on corporate
strategy, corporate business planning, treasury, controls and
corporate financing activities. Mr. Keller also serves as
executive vice president and chief financial officer of Cole
Capital Advisors, Cole Capital Partners, CCPT I Advisors, CCPT
II Advisors, CCPT III Advisors, Cole Corporate Income Advisors
and Cole Income NAV Strategy Advisors. Prior to joining Cole
Real Estate Investments as executive vice president and chief
financial officer in November 2011, Mr. Keller worked for
UBS AG from 1992 to 2011, including serving as vice chairman,
investment banking of the Financial Institutions Group from 2010
to 2011, group treasurer from 2006 to 2010, chief risk officer
of UBS Investment Bank from 2004 to 2006 and chief risk officer
for the U.S. Wealth Management business from 2002 to 2004.
Mr. Keller received his M.B.A. from the University of St.
Gallen, Switzerland.
John M. Pons
has served as the executive vice president
and general counsel, real estate of CR IV Advisors since its
formation in July 2010, and as its secretary since
January 2011. Mr. Pons served as secretary for CCPT I
from March 2004 to January 2011, and was a member of its board
of directors from March 2004 until May 2010. He has served as
executive vice president, general counsel and secretary of CCPT
I Advisors since September 2008, and previously served as
executive vice president, chief administrative officer, general
counsel and secretary from October 2007 until September 2008, as
executive vice president, chief operating officer, general
counsel and secretary from March 2007 until October 2007, as
senior vice president and general counsel from December 2005
until March 2007, as senior vice president and counsel from
August 2005 until December 2005, and as vice president, counsel
and secretary from March 2004 until August 2005. Mr. Pons
served as secretary of CCPT II from its formation in September
2004 until November 2010. He served as a member of CCPT
IIs board of directors from September 2004 until November
2004. Mr. Pons has served as executive vice president and
general counsel of CCPT II Advisors since September 2008 and as
its secretary since January 2011, and previously served as
executive vice president, chief administrative officer, general
counsel and secretary from October 2007 until September 2008, as
executive vice president, chief operating officer, general
counsel and secretary from March 2007 until October 2007, as
senior vice president and general counsel from December 2005
until March 2007, as senior vice president and counsel from
August 2005 until December 2005, and as vice president, counsel
and secretary from September 2004 until August 2005.
Mr. Pons has served as executive vice president and general
counsel of CCPT III Advisors since its formation in January 2008
and as its secretary since January 2011, and previously
served as its chief operating officer from January 2008 until
May 2008. He has served as executive vice president and general
counsel, real estate of Cole Corporate Income Advisors since its
formation in April 2010 and as its secretary since
January 2011. Mr. Pons has served as executive vice
president and general counsel, real estate of Cole Income NAV
Strategy Advisors since July 2010, and as its
66
secretary since January 2011. Mr. Pons has served as
executive vice president, general counsel and secretary of Cole
Realty Advisors since September 2008, and previously served as
executive vice president, chief administrative officer, general
counsel and secretary from October 2007 until September 2008, as
executive vice president, chief operating officer and general
counsel from March 2007 until October 2007, and as senior vice
president from January 2006 until March 2007. He has served as
executive vice president, general counsel and secretary of Cole
Capital Partners and Cole Capital Advisors since September 2008,
and previously served for each as executive vice president,
chief administrative officer, general counsel and secretary from
October 2007 until September 2008, as executive vice president,
chief operating officer and general counsel from March 2007
until October 2007, as senior vice president and general counsel
from December 2005 until March 2007, as senior vice president
and counsel from August 2005 until December 2005, and as vice
president and counsel from September 2003 until August 2005.
Prior to joining Cole Real Estate Investments in September 2003,
Mr. Pons was an associate general counsel and assistant
secretary with GE Capital Franchise Finance Corporation from
December 2001. Before attending law school, Mr. Pons was a
Captain in the United States Air Force where he served from 1988
until 1992. Mr. Pons received a B.S. degree in Mathematics
from Colorado State University and a M.S. degree in
Administration from Central Michigan University before earning
his J.D. (Order of St. Ives) in 1995 at the University of Denver.
Thomas W. Roberts
has served as executive vice president
and managing director of real estate of CR IV Advisors since
July 2010. He has served as president of Cole Realty Advisors
since September 2009. He has served as executive vice president
and managing director of real estate of CCPT I Advisors, CCPT II
Advisors, CCPT III Advisors, Cole Capital Partners and Cole
Capital Advisors since September 2009. He has served as
executive vice president and managing director of real estate of
Cole Corporate Income Advisors since its formation in April
2010, and of Cole Income NAV Strategy Advisors since July 2010.
Prior to joining Cole Real Estate Investments, Mr. Roberts
served as president and chief executive officer of Opus West
Corporation, a Phoenix-based real estate developer, from March
1993 until May 2009. Mr. Roberts also worked as vice
president, real estate development for the Koll Company from
1986 until 1990. In July 2009, Opus West Corporation filed for
Chapter 11 bankruptcy protection. Mr. Roberts received
a B.S. from Arizona State University. Mr. Roberts has been
active in many professional and community organizations
including the Greater Phoenix Economic Council, International
Council of Shopping Centers, National Association of Industrial
and Office Properties, Young Presidents Organization, Urban Land
Institute, Phoenix Boys and Girls Club, and Xavier College
Preparatory Board of Trustees.
Mitchell A. Sabshon
has served as executive vice
president and chief operating officer of CR IV Advisors since
January 2011. In this role, he is responsible for corporate
finance, asset management, property management, leasing and high
yield portfolio management. He also works on a broad range of
initiatives across the Cole Real Estate Investments
organization, including issues pertaining to corporate and
portfolio strategy, product development and systems. He also
serves as executive vice president and chief operating officer
of Cole Capital Advisors, Cole Capital Partners, CCPT I
Advisors, CCPT II Advisors, CCPT III Advisors, Cole Corporate
Income Advisors and Cole Income NAV Strategy Advisors. Prior to
joining Cole Real Estate Investments in November 2010,
Mr. Sabshon served as managing partner and chief investment
officer of EndPoint Financial LLC, an advisory firm providing
acquisition and finance advisory services to equity investors,
from 2008 to 2010. Mr. Sabshon served as chief investment
officer and executive vice president of GFI Capital Resources
Group, Inc., a national owner-operator of multifamily
properties, from 2007 to 2008. Prior to joining GFI,
Mr. Sabshon served with Goldman Sachs & Company
from 2004 to 2007 and from 1997 to 2002 in several key strategic
roles, including president and chief executive officer of
Goldman Sachs Commercial Mortgage Capital and head of the
Insurance Client Development Group. From 2002 to 2004,
Mr. Sabshon was executive director of the
U.S. Institutional Sales Group at Morgan Stanley.
Mr. Sabshon held various positions at Lehman Brothers Inc.
from 1991 to 1997, most recently as senior vice president in the
Real Estate Investment Banking Group. Prior to joining Lehman
Brothers, Mr. Sabshon was an attorney in the Real Estate
Structured Finance group of Skadden, Arps, Slate,
Meagher & Flom LLP. Mr. Sabshon received his J.D.
from Hofstra University School of Law and a B.A. from George
Washington University.
67
Kim S. Kundrak
has served as senior vice president and
chief acquisitions officer-single tenant retail of CR IV
Advisors since July 2010. He has served as senior vice
president and chief acquisitions officer-single tenant retail of
CCPT I Advisors, CCPT II Advisors, CCPT III Advisors, Cole
Realty Advisors, Cole Capital Partners and Cole Capital Advisors
since September 2009 and of Cole Income NAV Strategy Advisors
since July 2010. Prior to joining Cole, he worked for
Realty Income Corporation, a publicly traded REIT from July 1996
until November 2008, serving as senior vice president, portfolio
acquisitions from January 2000 until November 2008 and as vice
president, portfolio acquisitions from July 1996 until December
1999. Prior to joining Realty Income, Mr. Kundrak worked at
Burnham Pacific Properties, Inc. from April 1987 until October
1995. During his tenure at Burnham Pacific Properties, he held
various positions, including senior vice president, chief
financial officer and vice president, asset management.
Mr. Kundrak also served as a real estate manager at John
Burnham and Company, a real estate services firm from December
1985 until March 1987, as well as general manager at The Hahn
Company, one of the nations premier regional shopping
center developers, from July 1982 until December 1985.
Mr. Kundrak received a B.A. from Point Loma Nazarene
University in San Diego, California in 1979. He holds the
professional designations of Certified Shopping Center Manager
(CSM) from the International Council of Shopping Centers and
Certified Property Manager (CPM) from the Institute of Real
Estate Management.
In addition to the officers and key personnel listed above, our
advisor employs personnel who have extensive experience in
selecting, managing and selling commercial properties similar to
the properties sought to be acquired by us. As of the date of
this prospectus our advisor is the sole limited partner of our
operating partnership.
The
Advisory Agreement
CR IV Advisors is a newly-formed entity created by our
sponsor for the sole purpose of managing the day-to-day
operations of our company. We entered into an advisory agreement
with CR IV Advisors on January 20, 2012. Many of the
services performed by our advisor in managing our
day-to-day
activities pursuant to the advisory agreement are summarized
below. We believe that our advisor currently has sufficient
staff and experience so as to be capable of fulfilling the
duties set forth in the advisory agreement, along with the
duties owed to other real estate programs managed by affiliates
of our advisor. This summary is provided to illustrate the
material functions that CR IV Advisors will perform for us as
our advisor, and it is not intended to include additional
services that may be provided to us by third parties, for which
they will be separately compensated either directly by us or by
our advisor and reimbursed by us. In the event that our advisor
engages a third party to perform services that we have engaged
our advisor to perform pursuant to the advisory agreement, such
third party will be compensated by the advisor out of its
advisory fee.
Under the terms of the advisory agreement, our advisor will
undertake to use its commercially reasonable best efforts to
present to us investment opportunities consistent with our
investment policies and objectives as adopted by our board of
directors. In its performance of this undertaking, CR IV
Advisors, either directly or indirectly by engaging an affiliate
or an unaffiliated third party, shall, among other duties and
subject to the supervision of our board of directors:
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find, evaluate, present and recommend to us investment
opportunities consistent with our investment policies and
objectives;
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serve as our investment and financial advisor and provide
research and economic and statistical data in connection with
our assets and our investment policies;
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provide the daily management and perform and supervise the
various administrative functions reasonably necessary for our
management and operations;
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investigate, select, and, on our behalf, engage and conduct
business with such third parties as the advisor deems necessary
to the proper performance of its obligations under the advisory
agreement;
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consult with, and provide information to, our officers and board
of directors and assist the board of directors in formulating
and implementing of our financial policies;
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68
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structure and negotiate the terms and conditions of our real
estate acquisitions, sales or joint ventures;
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review and analyze each propertys operating and capital
budget;
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acquire properties and make investments on our behalf in
compliance with our investment objectives and policies;
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arrange, structure and negotiate financing and refinancing of
properties;
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enter into leases of property and service contracts for assets
and, to the extent necessary, perform all other operational
functions for the maintenance and administration of such assets,
including the servicing of mortgages;
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prepare and review on our behalf, with the participation of one
designated principal executive officer and principal financial
officer, all reports and returns required by the Securities and
Exchange Commission, Internal Revenue Service and other state or
federal governmental agencies; and
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dispose of properties on our behalf in compliance with our
investment objectives and policies, and at the appropriate time,
advise our board of directors on the timing and method of
providing our investors with liquidity.
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It is the duty of our board of directors to evaluate the
performance of our advisor before entering into or renewing the
advisory agreement, and the criteria used in such evaluation
shall be reflected in the minutes of the board of
directors meeting at which such evaluation was conducted.
The advisory agreement will have a one-year term ending
January 20, 2013, and may be renewed for an unlimited
number of successive one-year periods. Additionally, either
party may terminate the advisory agreement without cause or
penalty immediately upon a change of control of us, or upon
60 days written notice without cause or penalty.
After termination of the advisory agreement, our advisor will
not be entitled to any further compensation, however it will be
entitled to receive all unpaid reimbursements of expenses,
subject to certain limitations, and all fees payable to the
advisor that accrued prior to the termination of the advisory
agreement. A subordinated performance fee also may be payable,
as discussed below. Our charter does not permit us to enter into
an advisory agreement that includes terms that would impose a
penalty, such as a termination fee, on the party that elects to
terminate the agreement. If we elect to terminate the agreement,
we must obtain the approval of a majority of our independent
directors. In the event of the termination of our advisory
agreement, our advisor is required to cooperate with us and take
all reasonable steps requested by us to assist our board of
directors in making an orderly transition of the advisory
function.
We intend to pay our advisor a monthly advisory fee based upon
our monthly average invested assets, equal to the following
amounts: (i) an annualized rate of 0.75% will be paid on
our average invested assets that are between $0 and
$2 billion; (ii) an annualized rate of 0.70% will be
paid on our average invested assets that are between
$2 billion and $4 billion; and (iii) an
annualized rate of 0.65% will be paid on our average invested
assets that are over $4 billion. Monthly average invested
assets will equal the average book value of our assets invested,
directly or indirectly, in equity interests in and loans secured
by our real estate, before reserves for depreciation and
amortization or bad debts or other similar non-cash reserves,
other than impairment charges, computed by taking the average of
such values at the end of each business day, over the course of
the month. After our board of directors begins to determine the
estimated per share value of our common stock, the average
invested assets will be based upon the aggregate valuation of
our invested assets, as reasonably estimated by our board of
directors. Any portion of this fee may be deferred and paid in a
subsequent period upon the mutual agreement of us and our
advisor.
We also intend to pay our advisor acquisition fees equal to 2%
of: (i) the contract purchase price of each property or
asset that we acquire; (ii) the amount paid in respect of
the development, construction or improvement of each asset we
acquire; (iii) the purchase price of any loan we acquire;
and (iv) the principal amount of any loan we originate. Any
portion of the acquisition fee may be deferred and paid in a
subsequent period upon the mutual agreement of us and our
advisor. We are prohibited from paying more than 6% of the
contract price of a property, or in the case of a mortgage loan,
6% of the funds advanced, in acquisition fees, including
development fees, construction fees and acquisition expenses,
unless otherwise approved by a
69
majority of our board of directors, including a majority of the
independent directors, not otherwise interested in the
transaction, as commercially competitive, fair and reasonable to
us, although we intend to limit such payments below 6%.
If our advisor or its affiliates provides a substantial amount
of services (as determined by a majority of our independent
directors) in connection with the sale of properties, we will
pay our advisor or its affiliate a disposition fee in an amount
equal to up to one-half of the brokerage commission paid on the
sale of properties, not to exceed 1% of the contract price of
the properties sold; provided, however, in no event may the
disposition fee paid to our advisor or its affiliates, when
added to the real estate commissions paid to unaffiliated third
parties, exceed the lesser of the customary competitive real
estate commission or an amount equal to 6% of the contract sales
price.
Additionally, we will be required to pay to our advisor, in
cash, a non-interest bearing promissory note or shares of our
common stock (or any combination thereof), at our election,
subordinated fees based on a percentage of proceeds or stock
value in the event of our sale of assets or the listing of our
common stock on a national securities exchange, but only if, in
the case of our sale of assets, our investors have received,
from regular distributions plus special distributions paid from
proceeds of such sale, a return of their net capital invested
and an 8% annual cumulative, non-compounded return or, in the
case of the listing of our common stock, the market value of our
common stock plus the distributions paid to our investors
exceeds the sum of the total amount of capital raised from
investors plus the amount of distributions necessary to generate
an 8% annual cumulative, non-compounded return to investors.
Upon termination of the advisory agreement, we may incur an
obligation to pay to our advisor a subordinated performance fee,
in cash, a non-interest bearing promissory note or our shares,
at our election, similar to that which our advisor would have
been entitled had the portfolio been liquidated (based on an
independent appraised value of the portfolio) on the date of
termination.
Other than the fees described above, neither the advisor nor its
affiliates will be entitled to any additional fees for managing
or leasing our properties.
We will reimburse our advisor for the expenses incurred in
connection with its provision of advisory and administrative
services, such as the portion of the salaries paid to employees
of Cole Real Estate Investments who are dual employees of our
advisor (including executive officers and key personnel of our
advisor who are not also executive officers of our company) that
are attributed to services rendered by our advisor in connection
with our operations, including non-offering related legal and
accounting services; provided, however, that we will not
reimburse our advisor for the salaries and benefits paid to our
executive officers, or for personnel costs in connection with
services for which the advisor receives acquisition fees.
Officers, employees and affiliates of our advisor engage in
other business ventures and, as a result, their resources will
not be dedicated exclusively to our business. However, pursuant
to the advisory agreement, our advisor will be required to
devote sufficient resources to our administration to discharge
its obligations. The Cole Real Estate Investments organization
has over 275 full-time employees, many of whom may dedicate
a portion of their time to providing services on behalf of our
advisor. Our advisor is responsible for a pro rata portion of
each employees compensation based upon the approximate
percentage of time the employee dedicates to our advisor.
Our advisor may assign the advisory agreement to an affiliate
upon approval of a majority of our board of directors, including
a majority of our independent directors. We may assign or
transfer the advisory agreement to a successor entity; provided
that at least a majority of our independent directors determines
that any such successor advisor possesses sufficient
qualifications to perform the advisory function and to justify
the compensation payable to the advisor. Our independent
directors will base their determination on the general facts and
circumstances that they deem applicable, including the overall
experience and specific industry experience of the successor
advisor and its management. Other factors that will be
considered are the compensation to be paid to the successor
advisor and any potential conflicts of interest that may occur.
The fees payable to our advisor under the advisory agreement are
described in further detail in the Management
Compensation section of this prospectus. We also describe
in that section our obligation to
70
reimburse our advisor for organization and offering expenses,
advisory and administrative services, and payments made by our
advisor to third parties in connection with potential
acquisitions.
Our advisors principal assets will be its cash balances
and its advisory agreement with our company, and the revenues
associated with such agreement. In addition, we expect that our
advisor will be covered by an errors and omissions insurance
policy. If our advisor is held liable for a breach of its
fiduciary duty to us, or a breach of its contractual obligations
to us, we expect that the liability would be paid by our advisor
from its cash balances or by the insurance policy. However, our
advisor is not required to retain cash to pay potential
liabilities and it may not have sufficient cash available to pay
liabilities if they arise. In such event, and if insurance
proceeds are insufficient, we may not be able to collect the
full amount of any claims we may have against our advisor.
Affiliated
Dealer Manager
Cole Capital Corporation, our dealer manager, is a member firm
of FINRA. Cole Capital Corporation was organized in December
1992 for the purpose of participating in and facilitating the
distribution of securities of real estate programs sponsored by
Cole Holdings Corporation, its affiliates and its predecessors.
Cole Capital Corporation will provide certain wholesaling,
sales, promotional and marketing assistance services to us in
connection with the distribution of the shares offered pursuant
to this prospectus. It may also sell a limited number of shares
at the retail level. The compensation we pay to Cole Capital
Corporation in connection with this offering is described in the
section of this prospectus captioned Management
Compensation. See also Plan of
Distribution Compensation We Will Pay for the Sale
of Our Shares.
Cole Capital Corporation is wholly-owned by Cole Capital
Advisors, which is wholly-owned by Cole Holdings Corporation.
Christopher H. Cole is the sole stockholder of Cole Holdings
Corporation. Cole Capital Corporation is an affiliate of our
advisor. The backgrounds of the officers of Cole Capital
Corporation are described in the Executive
Officers and Directors and The
Advisor sections above.
Investment
Decisions
The primary responsibility for the investment decisions of our
advisor and its affiliates, the negotiation for the purchase and
sale of these investments, and the management of our assets
resides with Marc T. Nemer and the other executive officers and
key personnel of our advisor. The backgrounds of the officers of
our advisor are described in the Executive
Officers and Directors and The
Advisor sections above. Our board of directors is
responsible for supervising and monitoring the activities of our
advisor.
71
MANAGEMENT
COMPENSATION
We have no paid employees. Our advisor and its affiliates manage
our
day-to-day
affairs. The following table summarizes all of the compensation
and fees we will pay to our advisor and its affiliates,
including amounts to reimburse their costs in providing
services. We will not pay a separate fee for financing, leasing
or property management, although we may rely on our advisor or
its affiliates to provide such services to us. The selling
commissions may vary for different categories of purchasers. See
the Plan of Distribution section of this prospectus.
This table assumes the shares are sold through distribution
channels associated with the highest possible selling
commissions and dealer manager fee.
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Estimated Amount for Minimum
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Type of Compensation
(1)
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Determination of Amount
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Offering/Maximum Offering
(2)
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Offering Stage
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Selling Commissions
Cole Capital
Corporation
(3)
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We generally will pay to our affiliated dealer manager, Cole
Capital Corporation, 7% of the gross proceeds of our primary
offering. Cole Capital Corporation will reallow 100% of selling
commissions to participating broker-dealers. We will not pay any
selling commissions with respect to sales of shares under our
distribution reinvestment plan.
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$175,000/$175,000,000
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Dealer Manager Fee
Cole Capital Corporation
(3)
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We generally will pay to Cole Capital Corporation 2% of the
gross proceeds of our primary offering. Cole Capital Corporation
may reallow all or a portion of its dealer manager fee to
participating broker-dealers. We will not pay a dealer manager
fee with respect to sales of shares under our distribution
reinvestment plan.
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$50,000/$50,000,000
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Reimbursement of Other Organization and Offering
Expenses
CR IV Advisors
(4)
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Our advisor will incur or pay our organization and offering
expenses (excluding selling commissions and the dealer manager
fee). We will then reimburse our advisor for these amounts up to
2.0% of gross offering proceeds, including proceeds from sales
of shares under our distribution reinvestment plan.
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$50,000/$59,500,000
Of the $59,500,000, we expect to reimburse our advisor up to
$25,000,000 (1.0% of the gross offering proceeds of our primary
offering, or 0.8% of aggregate gross offering proceeds,
including proceeds from shares issued under our distribution
reinvestment plan) to cover offering expenses that are deemed to
be underwriting expenses, and we expect to reimburse our advisor
up to $34,500,000 (1.2% of aggregate gross offering proceeds,
including proceeds from sales of shares under our distribution
reinvestment plan) to cover non-underwriting organization and
offering expenses.
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Acquisition and Operations Stage
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Acquisition Fee
CR IV Advisors
(5)
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In consideration for finding, evaluating, structuring and
negotiating our real estate acquisitions, we will pay to our
advisor up to 2% of: (i) the contract purchase price of each
property or asset; (ii) the amount paid in respect of the
development, construction or improvement of each asset we
acquire; (iii) the purchase price of any loan we acquire; and
(iv) the principal amount of any loan we originate.
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$43,372/$52,446,394 assuming no debt or $173,489/$209,785,575
assuming leverage of 75% of the contract purchase price.
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72
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Estimated Amount for Minimum
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Type of Compensation
(1)
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Determination of Amount
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Offering/Maximum Offering
(2)
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Advisory Fee
CR IV
Advisors
(6)
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In consideration for the day-to-day management of our company,
we will pay to our advisor a monthly advisory fee based upon our
monthly average invested assets. Monthly average invested assets
will equal the average book value of our assets invested,
directly or indirectly, in equity interests in and loans secured
by our real
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The annualized advisory fee rate, and the actual dollar amounts,
are dependent upon the amount of our monthly average invested
assets and, therefore, cannot be determined at the present time.
Based on the following assumed levels of monthly average
invested assets, our annualized advisory fee will be as follows:
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estate, before reserves for depreciation and amortization or bad
debts or other similar non-cash reserves, other than impairment
charges, computed by taking the average
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Monthly
Average
Invested
Assets
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Annualized
Effective
Fee Rate
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Annualized
Advisory
Fee
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of such values at the end of each business
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$1 billion
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0.75%
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$
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7,500,000
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day, over the course of the month. After our
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$2 billion
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0.75%
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$
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15,000,000
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board of directors begins to determine the
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$3 billion
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0.7333%
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$
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22,000,000
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estimated per share value of our common
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$4 billion
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0.7250%
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$
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29,000,000
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stock, the monthly advisory fee will be based
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$5 billion
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0.7100%
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$
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35,500,000
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upon the value of our assets invested, directly or indirectly,
in equity interests in and loans secured by our real estate as
determined by our board of directors.
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The advisory fee will be calculated according to the following
fee schedule:
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Monthly
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Annualized
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Average
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Fee Rate
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Invested
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for Each
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Assets Range
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Range
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$0 $2 billion
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0.75%
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over $2 billion $4 billion
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0.70%
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over $4 billion
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0.65%
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Operating Expenses
CR IV Advisors
(7)
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We will reimburse our advisor for acquisition expenses incurred in the process of acquiring each property or in the origination or acquisition of a loan. We expect these expenses will be approximately 0.5% of the purchase price of each property or of the amount of each loan; provided, however, that acquisition expenses are not included in the contract purchase price of a property.
We also will reimburse our advisor for the expenses incurred in connection with its provision of advisory and administrative services, including related personnel costs and payments to third party service providers; provided, however, that we will not reimburse our advisor for the salaries and benefits paid to personnel in connection with services for which our advisor receives acquisition fees, and we will not reimburse our advisor for salaries and benefits paid to our executive officers.
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$10,843/$13,111,598 estimated for reimbursement of acquisition
expenses assuming no debt or $35,600/$43,048,000 estimated for
reimbursement of acquisition expenses assuming leverage of 75%
of the contract purchase price.
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73
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Estimated Amount for Minimum
|
Type of Compensation
(1)
|
|
Determination of Amount
|
|
Offering/Maximum Offering
(2)
|
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Liquidity/Listing Stage
|
Disposition Fee
CR IV Advisors or its
affiliates
(8)
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For substantial assistance in connection with the sale of
properties, we will pay our advisor or its affiliates an amount
equal to up to one-half of the brokerage commission paid on the
sale of property, not to exceed 1% of the contract price of the
properties sold; provided, however, in no event may the
disposition fee paid to our advisor or its affiliates, when
added to the real estate commissions paid to unaffiliated third
parties, exceed the lesser of the customary competitive real
estate commission or an amount equal to 6% of the contract sales
price.
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Actual amounts are dependent upon the contract price of
properties sold and, therefore, cannot be determined at the
present time. Because the disposition fee is based on a fixed
percentage of the contract price for sold properties the actual
amount of the disposition fees cannot be determined at the
present time.
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Subordinated Performance Fee
CR IV Advisors
(9)
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After investors have received a return of their net capital
invested and an 8% annual cumulative, non-compounded return,
then our advisor will be entitled to receive 15% of the
remaining net sale proceeds. We cannot assure you that we will
provide this 8% return, which we have disclosed solely as a
measure for our advisors incentive compensation. We will
pay a subordinated fee under only one of the following events:
(i) if our shares are listed on a national securities
exchange; (ii) if our company is sold or our assets are
liquidated; or (iii) upon termination of the advisory
agreement.
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Actual amounts are dependent upon results of operations and,
therefore, cannot be determined at the present time. There is no
limit on the aggregate amount of these payments.
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(1)
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We will pay all fees, commissions and expenses in cash, other
than the subordinated performance fee, which we may pay in cash,
common stock, a non-interest bearing promissory note or any
combination of the foregoing, as we may determine in our
discretion.
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(2)
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The estimated minimum dollar amounts are based on the sale to
the public of 250,000 shares at $10.00 per share pursuant
to the primary offering and no shares pursuant to our
distribution reinvestment plan. The estimated maximum dollar
amounts are based on the sale to the public of
250,000,000 shares at $10.00 per share and
50,000,000 shares at $9.50 per share pursuant to our
distribution reinvestment plan.
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(3)
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These payments are underwriting compensation. Underwriting
compensation paid from any source in connection with this
offering may not exceed 10% of the gross proceeds of the primary
offering. Selling commissions and, in some cases, the dealer
manager fee, will not be charged with regard to shares sold to
or for the account of certain categories of purchasers. See the
Plan of Distribution section of this prospectus.
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(4)
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These organization and offering expenses consist of all expenses
(other than selling commissions and the dealer manager fee) to
be paid by us in connection with the offering, including:
(i) our legal, accounting, printing, mailing and filing
fees, charges of our transfer agent for account set up fees, due
diligence expenses that are included in a detailed and itemized
invoice (such as expenses related to a review of this offering
by one or more independent due diligence reviewers engaged by
broker-dealers participating in this offering);
(ii) amounts to reimburse our advisor for the portion of
the salaries paid to employees of its
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74
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affiliates that are attributed to services rendered to our
advisor in connection with preparing supplemental sales
materials for us, holding educational conferences and attending
retail seminars conducted by our participating broker-dealers;
and (iii) reimbursements for our dealer managers
wholesaling costs, and other marketing and organization costs,
including (a) payments made to participating broker-dealers
for performing these services, (b) the
dealer-managers wholesaling commissions, salaries and
expense reimbursements, (c) the dealer managers due
diligence costs and legal fees and (d) costs associated
with business entertainment, logoed items and sales incentives.
Expenses relating to educational conferences and retail seminars
described in (ii) above, expenses relating to our
dealer-managers wholesaling costs and payments to
participating broker-dealers described in (iii) above and
expenses described in (iii)(b) and (iii)(c) above will
constitute underwriting compensation, subject to the
underwriting limit of 10% of the gross proceeds of our primary
offering.
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The estimated maximum reimbursement for other organization and
offering expenses, $59,500,000, is calculated based upon gross
offering proceeds including proceeds from our distribution
reinvestment plan. The $25,000,000 portion of the estimated
maximum reimbursement for other organization and offering
expenses that we expect will be used to cover offering expenses
that are deemed to be underwriting expenses equals 0.8% of
aggregate gross offering proceeds, including proceeds from
shares issued under our distribution reinvestment plan. However,
because we do not take proceeds from the sale of shares under
our distribution reinvestment plan into account when we
calculate the maximum amount we will pay for underwriting
compensation, the table also indicates that the $25,000,000 that
we expect will be used to cover offering expenses that are
deemed to be underwriting expenses equals 1.0% of the gross
offering proceeds of our offering, excluding proceeds from our
distribution reinvestment plan (which we refer to in this
prospectus as our primary offering). In no event will total
organization and offering expenses, including selling
commissions, the dealer manager fee and reimbursement of other
organization and offering expenses, exceed 15% of the gross
proceeds of this offering; including proceeds from sales of
shares under our distribution reinvestment plan.
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(5)
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Any portion of this fee may be deferred and paid in a subsequent
period upon the mutual agreement of us and our advisor. Pursuant
to our charter, in accordance with the NASAA REIT Guidelines,
our total of all acquisition fees and expenses relating to any
purchase, including fees and expenses paid to third parties,
shall not exceed 6% of the contract purchase price unless a
majority of our directors (including a majority of our
independent directors) not otherwise interested in the
transaction approve fees and expenses in excess of this limit
and determine the transaction to be commercially competitive,
fair and reasonable to us. Included in the computation of such
fees will be any real estate commission, acquisition fee,
development fee, construction fee, non-recurring management fee,
loan fees or points, or any fee of a similar nature. On a
quarterly basis, we will review the total acquisition fees and
expenses relating to each purchase to ensure that such fees and
expenses do not exceed 6% of the contract purchase price. For a
description of the duties of our advisor pursuant to the
advisory agreement, including acquisition services, see the
section of this prospectus captioned
Management The Advisory Agreement.
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(6)
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Any portion of this fee may be deferred and paid in a subsequent
period upon the mutual agreement of us and our advisor. An
assets book value typically will equal its cost. However,
in the event that an asset suffers an impairment, we will reduce
the real estate and related intangible assets and liabilities to
their estimated fair market value. See the section of this
prospectus captioned Managements Discussion and
Analysis of Financial Condition and Results of
Operations Application of Critical Accounting
Policies Investment in and Valuation of Real Estate
and Related Assets for additional information. For a
description of the duties of our advisor pursuant to the
advisory agreement, including
day-to-day
advisory services, see the section of this prospectus captioned
Management The Advisory Agreement.
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(7)
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We will reimburse our advisor for the portion of the salaries
paid to employees of Cole Real Estate Investments who are dual
employees of our advisor, including executive officers and key
personnel of our advisor who are not also executive officers of
our company, that are attributed to services rendered by our
advisor in connection with our operations, including
non-offering related legal and accounting services.
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75
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Additional services may be provided to us by third parties, for
which they will be separately compensated either directly by us
or by our advisor and reimbursed by us. In the event that our
advisor engages a third party to perform services that we have
engaged our advisor to perform pursuant to the advisory
agreement, such third parties will be compensated by the advisor
out of its advisory fee.
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We will not reimburse our advisor for any amount by which the
operating expenses (which exclude, among other things, the
expenses of raising capital, interest payments, taxes, non-cash
items such as depreciation, amortization and bad debt reserves,
and acquisition fees and acquisition expenses) paid during the
four preceding fiscal quarters exceeds the greater of
(i) 2% of average invested assets, or (ii) 25% of net
income other than any additions to reserves for depreciation,
bad debt or other similar non-cash reserves and excluding any
gain from the sale of assets for that period. We will perform
the above calculation on a quarterly basis to ensure that the
operating expense reimbursements are within these limitations.
Acquisition expenses are accounted for separately.
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We lease our office space from an affiliate of our advisor and
share the space with other Cole-related entities. The amount we
will pay under the lease will be determined on a monthly basis
based upon on the allocation of the overall lease cost to the
approximate percentage of time, size of the area that we utilize
and other resources allocated to us.
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(8)
|
|
Although we are most likely to pay disposition fees to CCI
Advisors or its affiliates at the time of our liquidation, these
fees may be earned during our operational state if we sell
properties prior to our liquidation.
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(9)
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We will pay a subordinated performance fee under only one of the
following alternative events: (i) if our shares are listed
on a national securities exchange, our advisor will be entitled
to a subordinated performance fee equal to 15% of the amount, if
any, by which (1) the market value of our outstanding stock
plus distributions paid by us prior to listing, exceeds
(2) the sum of the total amount of capital raised from
investors and the amount of distributions necessary to generate
an 8% annual cumulative, non-compounded return to investors;
(ii) if our company is sold or our assets are liquidated,
our advisor will be entitled to a subordinated performance fee
equal to 15% of the net sale proceeds remaining after investors
have received a return of their capital invested and an 8%
annual cumulative, non-compounded return; or (iii) upon
termination of the advisory agreement, our advisor may be
entitled to a subordinated performance fee similar to that to
which it would have been entitled had the portfolio been
liquidated (based on an independent appraised value of the
portfolio) on the date of termination. Under our charter, we
could not increase these success-based fees without the approval
of a majority of our independent directors, and any increase in
these fees would have to be reasonable. Our charter provides
that these subordinated fees are presumptively
reasonable if they do not exceed 15% of the balance of
such net proceeds or such net market value remaining after
investors have received a return of their net capital
contributions and an 8% per year cumulative, non-compounded
return.
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The subordinated performance fee likely will be paid in the form
of a non-interest bearing promissory note that will be repaid
from the net sale proceeds of each sale after the date of the
termination or listing, although, at our discretion, we may pay
this fee with cash or shares of our common stock, or any
combination of the foregoing. At the time of such sale, we may,
however, again at our discretion, pay all or a portion of such
non-interest
bearing promissory note with shares of our common stock. If
shares are used for payment, we do not anticipate that they will
be registered under the Securities Act and, therefore, will be
subject to restrictions on transferability. Any portion of the
subordinated performance fee that our advisor receives prior to
our listing will offset the amount otherwise due pursuant to the
subordinated performance fee payable upon listing. In no event
will the amount paid to our advisor under the non-interest
bearing promissory note, if any, exceed the amount considered
presumptively reasonable by the NASAA REIT Guidelines. Any
subordinated performance fee payable in respect of net sale
proceeds that is not paid at the date of sale because investors
have not received their required minimum distribution will be
deferred and paid at such time as the subordination conditions
have been satisfied.
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The market value of our outstanding stock will be calculated
based on the average market value of the shares issued and
outstanding at listing over the 30 trading days beginning
180 days after the shares are first
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76
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listed. We have the option to cause our operating partnership to
pay the subordinated performance fee in the form of stock, cash,
a non-interest bearing promissory note or any combination
thereof. In the event the subordinated performance fee is earned
by our advisor, any previous payments of the subordinated
participation in net sale proceeds will offset the amounts due
pursuant to the subordinated performance fee, and we will not be
required to pay our advisor any further subordinated
participation in net sale proceeds.
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At least a majority of our independent directors must determine,
from time to time but at least annually, that our total fees and
expenses are reasonable in light of our investment performance,
net assets, net income and the fees and expenses of other
comparable unaffiliated REITs. Each such determination will be
reflected in the minutes of our board of directors. The total
operating expenses (as defined in the NASAA REIT Guidelines) of
the company will not exceed, in any four consecutive fiscal
quarters, the greater of 2% of the Average Invested Assets (as
defined in the NASAA REIT Guidelines) or 25% of Net Income (as
defined in the NASAA REIT Guidelines), unless our independent
directors determine, based on unusual and non-recurring factors,
that a higher level of expense is justified. In such an event,
we will send notice to each of our stockholders within
60 days after the end of the fiscal quarter for which such
determination was made, along with an explanation of the factors
our independent directors considered in making such
determination. Our independent directors shall also supervise
the performance of our advisor and the compensation that we pay
to it to determine that the provisions of our advisory agreement
are being carried out.
Each such determination will be recorded in the minutes of our
board of directors and based on the factors that the independent
directors deem relevant, including the factors listing in the
Management General section of this
prospectus.
Since our advisor and its affiliates are entitled to differing
levels of compensation for undertaking different transactions on
our behalf, our advisor has the ability to affect the nature of
the compensation it receives by undertaking different
transactions. However, our advisor is obligated to exercise good
faith and integrity in all its dealings with respect to our
affairs pursuant to the advisory agreement. See the
Management The Advisory Agreement
section of this prospectus.
Becoming
Self-Administered
Because our advisor manages our
day-to-day
operations, we are considered externally managed. We
believe that it will be in the best interests of our
stockholders for the foreseeable future for us to be externally
managed, therefore we do not expect to hire and pay for the
services of skilled personnel with expertise in real estate
finance, acquisition and management that are dedicated solely to
managing our operations and properties. We believe that the
arrangements set forth in the advisory agreement with CR IV
Advisors enable us to balance our real estate expertise needs,
our personnel needs and our operating costs. For example, we are
able to draw on the services of the executive officers and other
personnel of our advisor on an as needed basis rather than
having to hire similar individuals on a full-time basis.
If we elect to internalize our operations, we would employ
personnel and would be subject to potential liabilities commonly
faced by employers, such as workers disability and compensation
claims, potential labor disputes and other employee-related
liabilities and grievances. Upon any internalization of our
advisor, certain key personnel may not become employed by us,
but instead will remain employees of our sponsor or its
affiliates. However, such personnel do not have restrictions by
contract or otherwise that may affect their ability to be
employed by us, or otherwise provide services to us.
We may become self-administered in the future in connection with
a listing of our shares of common stock on an exchange or other
liquidity event, if our board of directors determines that it
would be in the best interests of our stockholders. Although
there is no prerequisite that publicly-traded REITs be
self-administered, we understand that most of the
publicly-traded REITs are self-administered and that the market
price for our shares may suffer in the event that we list our
shares for trading and remain externally managed. Thus, our
board of directors likely will not consider listing our shares
on a national exchange until it believes that our assets and
income can support an internalized management and operating
staff within the context of the returns that we are paying, or
seek to pay, to our stockholders. If our board of directors
reaches such
77
determination, we will likely consider various methods for
internalizing these functions. One method would be for us to
acquire, or consider acquiring, our advisor through a business
combination. At this time, we cannot be sure of the form or
amount of consideration or other terms relating to such
acquisition, however, we expect that we would not acquire our
advisor if we could not retain key personnel of our advisor. If
we pursue a business combination with our advisor, our board of
directors will have a fiduciary duty to act in our best
interests, which will be adverse to the interests of our
advisor. To fulfill its fiduciary duty, our board of directors
will take various procedural and substantive actions which may
include forming a committee comprised entirely of independent
directors to evaluate the potential business combination, and
granting the committee the authority to retain its own counsel
and advisors to evaluate the potential business combination. For
a description of some of the risks related to an internalization
transaction, see Risk Factors Risks Related to
an Investment in Cole Credit Property Trust IV, Inc.
78
STOCK
OWNERSHIP
The following table shows, as of the date of this prospectus,
the amount of our common stock beneficially owned by
(1) any person who is known by us to be the beneficial
owner of more than 5% of our outstanding shares of common stock,
(2) members of our board of directors, (3) our named
executive officers, and (4) all of our directors and
executive officers as a group.
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Common Stock
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Beneficially Owned
(2)
|
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|
Number of Shares
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|
|
Percentage
|
|
Name of Beneficial Owner
(1)
|
|
of Common Stock
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|
|
of Class
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|
|
Christopher H. Cole, Chairman of the Board of Directors, Chief
Executive Officer and President(3)
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20,000
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100
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%
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J. Marc Myers
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Scott P. Sealy, Sr.
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D. Kirk McAllaster, Jr., Executive Vice President, Chief
Financial Officer and Treasurer
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|
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All directors and executive officers as a group (four persons)(3)
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20,000
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100
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%
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(1)
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Address of each beneficial owner listed is 2575 East Camelback
Road, Suite 500, Phoenix, Arizona 85016.
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(2)
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For purposes of calculating the percentage beneficially owned,
the number of shares of common stock deemed outstanding includes
(a) 20,000 shares outstanding as of January 24,
2012, and (b) shares issuable pursuant to options held by
the respective person or group that may be exercised within
60 days following the date of this prospectus. Beneficial
ownership is determined in accordance with the rules of the
Securities and Exchange Commission that deem shares to be
beneficially owned by any person or group who has or shares
voting and investment power with respect to such shares.
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(3)
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Includes 20,000 shares owned by Cole Holdings Corporation,
an affiliate of our sponsor. Mr. Cole is the sole
stockholder of Cole Holdings Corporation and controls the voting
and disposition decisions of Cole Holdings Corporation. Pursuant
to our charter, Cole Holdings Corporation is prohibited from
selling the 20,000 shares of our common stock for so long
as Cole Real Estate Investments remains our sponsor; provided,
however, that Cole Holdings Corporation may transfer ownership
of all or a portion of the 20,000 shares of our common
stock to other affiliates of our sponsor.
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CONFLICTS
OF INTEREST
We are subject to various conflicts of interest arising out of
our relationship with CR IV Advisors, our advisor, and its
affiliates, including conflicts related to the arrangements
pursuant to which we will compensate our advisor and its
affiliates. While our independent directors must approve the
engagement of CR IV Advisors as our advisor, the fees
payable to CR IV Advisors in connection with the services
provided to us, and any subsequent decision to continue such
engagement, the ability of our independent directors to
negotiate on our behalf may be adversely impacted by the fact
that our board of directors recognizes that our stockholders
invested with the understanding and expectation that an
affiliate of Cole Real Estate Investments would act as our
advisor. See the Management Compensation section of
this prospectus. Some of the potential conflicts of interest in
our transactions with our advisor and its affiliates, and
certain conflict resolution procedures set forth in our charter,
are described below.
Our officers and affiliates of our advisor will try to balance
our interests with the interests of other Cole-sponsored
programs to whom they owe duties. However, to the extent that
these persons take actions that are more favorable to other
entities than to us, these actions could have a negative impact
on our financial performance and, consequently, on distributions
to you and the value of your investment. In addition, our
directors, officers and certain of our stockholders may engage
for their own account in business activities of the types
conducted or to be conducted by our subsidiaries and us. For a
description of some of the risks related to these conflicts of
interest, see the Risk Factors Risks Related
to Conflicts of Interest section of this prospectus.
Our independent directors have an obligation to function on our
behalf in all situations in which a conflict of interest may
arise. Furthermore, all of our directors have a fiduciary
obligation to act on behalf of our stockholders.
Interests
in Other Real Estate Programs and Other Concurrent
Offerings
Affiliates of our advisor act as an advisor to, and our
executive officers and at least one of our directors act as
officers
and/or
directors of, CCPT I, CCPT II, CCPT III, CCIT, and Cole
Income NAV Strategy, all of which are REITs distributed and
managed by affiliates of our advisor. In addition, all of these
REITs employ our sponsors investment strategy, which
focuses on single-tenant corporate properties subject to long
term net leases to creditworthy tenants. CCPT I, CCPT II
and CCPT III, like us, focus primarily on the retail sector,
while CCIT focuses primarily on the office and industrial sector
and Cole Income NAV Strategy focuses primarily on commercial
properties in the retail, office and industrial sectors.
Nevertheless, the common investment strategy used by each REIT
would permit them to purchase certain properties that also may
be suitable for our portfolio.
CCPT I is no longer offering shares for investment and,
currently is not pursuing acquisitions of additional properties.
However, in the event CCPT I sells one or more of its assets, it
may seek to acquire additional properties, which may be similar
to properties in which we invest. CCPT II is no longer offering
shares for investment to the public; however, CCPT II has
registered up to 30,000,000 shares to be offered pursuant
to its distribution reinvestment plan and may continue to invest
in real estate. CCPT II will seek to liquidate its assets or
list its shares of common stock for trading on a national
securities exchange by May 22, 2017. If the shares are not
listed by that date, CCPT II will seek stockholder approval of
an extension or elimination of the listing deadline or of the
liquidation of CCPT II. If neither proposal is approved, CCPT II
could continue to operate as before. CCPT III commenced a
follow-on public offering for up to $2.75 billion in shares
of common stock in October 2010. Although we intend to commence
this offering after CCPT III terminates its follow-on offering,
we expect that CCPT III will have substantial proceeds from its
follow-on offering to invest in real estate acquisitions, most
of which will be of the type we intend to invest in. Moreover,
CCPT III may extend the offering period for its distribution
reinvestment plan beyond the date it terminates the primary
portion of its follow-on offering. Accordingly, CCPT III could
have proceeds from its distribution reinvestment plan with which
it may invest in real estate assets for an indefinite period of
time. CCIT commenced an initial public offering of up to
$2.975 billion of shares of common stock in February 2011.
Cole Income NAV Strategy commenced an initial public offering of
up to $4.0 billion of shares of common stock in December
2011. We
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believe CCIT and Cole Income NAV Strategy will be active
investors in real estate and real estate-related investments,
and, although CCIT focuses primarily on the office and
industrial sector, and Cole Income NAV Strategy focuses on
commercial properties in the retail, office and industrial
sectors, we anticipate that many investments that will be
appropriate for investment by us also will be appropriate for
investment by CCIT and Cole Income NAV Strategy. See
Certain Conflict Resolution Procedures
below.
In addition, during the period from January 1, 2001 to
December 31, 2010, an affiliate of our advisor had issued
approximately $114.2 million of debt pursuant to four
private offerings, the proceeds of which were used to acquire
single and multi-tenant properties in various states. In
addition, during the same period, Cole Real Estate Investments
sponsored 53 currently operating
tenant-in-common
and Delaware Statutory Trust real estate programs. Cole Real
Estate Investments also sponsored Cole Growth Opportunity
Fund I LP (CGOF), which is currently operating. CGOF does
not have similar investment objectives to this program.
Affiliates of our advisor may, from time to time, sponsor
additional
tenant-in-common
and/or
Delaware statutory trust real estate programs, which may invest
in, and compete for, properties that would be suitable
investments under our investment criteria. Affiliates of our
advisor and of our executive officers also act as officers and
directors of general partners of six limited partnerships that
have invested in unimproved and improved real properties located
in various states, including Cole Credit Property
Fund Limited Partnership (Cole Credit LP I) and Cole
Credit Property Fund II Limited Partnership (Cole Credit LP
II), during the period from January 1, 2001 to
December 31, 2010. See the Prior Performance
Summary section of this prospectus. Affiliates of our
executive officers and entities owned or managed by such
affiliates also may acquire or develop real estate for their own
accounts, and have done so in the past. Furthermore, affiliates
of our executive officers and entities owned or managed by such
affiliates intend to form additional real estate investment
entities in the future, whether public or private, which can be
expected to have the same or similar investment objectives and
targeted assets as we have, and such persons may be engaged in
sponsoring one or more of such entities at approximately the
same time as our shares of common stock are being offered. Our
advisor, its affiliates and affiliates of our executive officers
are not obligated to present to us any particular investment
opportunity that comes to their attention, even if such
opportunity is of a character that might be suitable for
investment by us. Our advisor and its affiliates likely will
experience conflicts of interest as they simultaneously perform
services for us and other Cole-sponsored real estate programs.
Any affiliated entity, whether or not currently existing, could
compete with us in the sale or operation of our assets. We will
seek to achieve any operating efficiencies or similar savings
that may result from affiliated management of competitive
assets. However, to the extent that affiliates own or acquire
property that is adjacent, or in close proximity, to a property
we own, our property may compete with the affiliates
property for tenants or purchasers.
Although our board of directors adopted a policy limiting the
types of transactions that we may enter into with our advisor
and its affiliates, including other Cole-sponsored real estate
programs, we may enter into certain such transactions, which are
subject to an inherent conflict of interest. Similarly, joint
ventures involving affiliates of our advisor also gives rise to
conflicts of interest. In addition, our board of directors may
encounter conflicts of interest in enforcing our rights against
any affiliate in the event of a default by or disagreement with
an affiliate or in invoking powers, rights or options pursuant
to any agreement between us and our advisor, any of its
affiliates or another Cole-sponsored real estate program.
In addition, we will rely on Cole Capital Corporation, our
affiliated dealer manager, for the distribution of our shares of
common stock to investors in this offering. At the time we
commence this offering, we expect that Cole Capital Corporation
will be distributing shares of common stock of CCIT and Cole
Income NAV Strategy. We anticipate that Cole Capital Corporation
will be required to hire additional personnel to manage our
offering as well as any future concurrent offering. If our
dealer manager is unable to sufficiently hire personnel to
manage concurrent offerings, our dealer manager will face
conflicts of interest allocating resources to our offering,
which may have a negative effect on our ability to raise capital
in this offering. Moreover, if the compensation our dealer
manager or its personnel receive in the connection with
concurrent offerings differs, our dealer manager
and/or
its
personnel may have an incentive to devote more effort to the
offering that results in a higher level of compensation.
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Other
Activities of Our Advisor and its Affiliates
We rely on our advisor, CR IV Advisors, for the
day-to-day
operation of our business. As a result of the interests of
members of its management in other Cole-sponsored programs and
the fact that they also are engaged, and will continue to
engage, in other business activities, our advisor and its
officers, key persons and respective affiliates may have
conflicts of interest in allocating their time between us and
other Cole-sponsored programs and other activities in which they
are involved. However, our advisor believes that it and its
affiliates have sufficient personnel to discharge fully their
responsibilities to all of the Cole-sponsored programs and other
ventures in which they are involved.
In addition, each of our executive officers, including
Christopher H. Cole, who also serves as the chairman of our
board of directors, also has an interest in our advisor, our
dealer manager
and/or
other
affiliated entities. As a result, each of our executive officers
owes fiduciary duties to these other entities, as applicable,
which may conflict with the fiduciary duties that he owes to us
and our stockholders.
Transactions
with Our Advisor and its Affiliates
Our board of directors has adopted a policy to prohibit
acquisitions and loans from or to affiliates of our advisor,
other than as set forth below. From time to time, our advisor
may direct certain of its affiliates to acquire properties that
would be suitable investments for us or our advisor may create
special purpose entities to acquire properties that would be
suitable investments for us. Subsequently, we may acquire such
properties from such affiliates of our advisor. Any and all
acquisitions from affiliates of our advisor must be approved by
a majority of our directors, including a majority of our
independent directors, not otherwise interested in such
transaction as being fair and reasonable to us and at a price to
us that is no greater than the cost of the property to the
affiliate of our advisor (including acquisition fees and
expenses), unless a majority of the independent directors
determines that there is substantial justification for any
amount that exceeds such cost and that the difference is
reasonable. In no event will we acquire a property from an
affiliate of our advisor if the cost to us would exceed the
propertys current appraised value as determined by an
independent appraiser. In no event will our advisor or any of
its affiliates be paid more than one acquisition fee in
connection with any such transaction. Moreover, our advisor will
not receive an acquisition fee if an affiliated entity will
receive a disposition fee in connection with such transaction.
Conversely, an affiliated entity will not receive an acquisition
fee if our advisor will receive a disposition fee in connection
with the sale of a property to an affiliate.
From time to time, we may borrow funds from affiliates of our
advisor, including our sponsor, as bridge financing to enable us
to acquire a property when offering proceeds alone are
insufficient to do so and third party financing has not been
arranged. Any and all such transactions must be approved by a
majority of our directors, including a majority of our
independent directors, not otherwise interested in such
transaction as fair, competitive and commercially reasonable,
and no less favorable to us than comparable loans between
unaffiliated parties; provided, however, that our advisor or its
affiliates may pay costs on our behalf, pending our
reimbursement, or we may defer payment of fees to our advisor or
its affiliates, neither of which would be considered a loan.
Notwithstanding any of the foregoing, none of these restrictions
would preclude us from internalizing our advisor if our board of
directors determines an internalization transaction is in the
best interests of our stockholders.
Acquiring,
Leasing and Reselling of Properties
There is a risk that a potential investment would be suitable
for one or more Cole-sponsored programs, in which case the
officers of our advisor and the advisors of the other programs
will have a conflict of interest allocating the investment
opportunity to us or another program. There is a risk that the
advisors will choose a property that provides lower returns to
us than a property purchased by another Cole-sponsored program.
However, in such event, our advisor and the advisors of the
other programs, with oversight by their respective boards of
directors, will determine which program will be first presented
with the opportunity. See Certain Conflict
Resolution Procedures for details of the factors used to
make that determination. Additionally, our
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advisor may cause a prospective tenant to enter into a lease for
property owned by another Cole-sponsored program. In the event
that these conflicts arise, our best interests may not be met
when persons acting on our behalf and on behalf of other
Cole-sponsored programs decide whether to allocate any
particular property to us or to another Cole-sponsored program.
Conflicts of interest will exist to the extent that we may
acquire, or seek to acquire, properties in the same geographic
areas where properties owned by other Cole-sponsored programs
are located. In such a case, a conflict could arise in the
acquisition or leasing of properties in the event that we and
another Cole-sponsored program were to compete for the same
properties or tenants, or a conflict could arise in connection
with the resale of properties in the event that we and another
Cole-sponsored program were to attempt to sell similar
properties at the same time including in particular in the event
another Cole-sponsored program liquidates at approximately the
same time as us. Conflicts of interest may also exist at such
time as we or our affiliates managing property on our behalf
seek to employ developers, contractors or building managers, as
well as under other circumstances. Our advisor will seek to
reduce conflicts relating to the employment of developers,
contractors or building managers by making prospective employees
aware of all such properties seeking to employ such persons. In
addition, our advisor will seek to reduce conflicts that may
arise with respect to properties available for sale or rent by
making prospective purchasers or tenants aware of all such
properties. However, these conflicts cannot be fully avoided in
that there may be established differing compensation
arrangements for employees at different properties or differing
terms for resales or leasing of the various properties.
Affiliated
Dealer Manager
Since Cole Capital Corporation, our dealer manager, is an
affiliate of our advisor, we will not have the benefit of an
independent due diligence review and investigation of the type
normally performed by an unaffiliated, independent underwriter
in connection with the offering of securities. Accordingly, you
will have to rely on your own broker-dealer to make an
independent review of the terms of this offering. If your
broker-dealer conducts an independent review of this offering
and/or
engages an independent due diligence reviewer to do so on its
behalf, we expect that we will pay or reimburse the expenses
associated with such review, which may create conflicts of
interest. If your broker-dealer does not conduct such a review,
you will not have the benefit of an independent review of the
terms of this offering. See the Plan of Distribution
section of this prospectus.
Joint
Venture and Co-ownership Arrangements with Affiliates of Our
Advisor
We may enter into joint ventures or other co-ownership
arrangements with other Cole-sponsored programs (as well as
other parties) for the acquisition, development or improvement
of properties and other investments. See the Investment
Objectives and Policies Acquisition and Investment
Policies Joint Venture Investments section of
this prospectus. Our advisor and its affiliates may have
conflicts of interest in determining which Cole-sponsored
program should enter into any particular joint venture or
co-ownership agreement. The co-venturer or co-owner may have
economic or business interests or goals which are or which may
become inconsistent with our business interests or goals. In
addition, should any such joint venture be consummated, our
advisor may face a conflict in structuring the terms of the
relationship between our interests and the interest of the
co-venturer or co-owner, and in managing the joint venture or
other co-ownership arrangement. Since our advisor and its
affiliates will negotiate the terms of any agreements or
transactions between us and a Cole-sponsored co-venturer or
co-owner, we will not have the benefit of arms-length
negotiation of the type normally conducted between unrelated
co-venturers or co-owners. However, in such event, a majority of
our board of directors, including a majority of our independent
directors, not otherwise interested in the joint venture, must
approve the joint venture as being fair and reasonable to us and
on substantially the same terms and conditions as those received
by the other joint venturers, and the cost of our investment
must be supported by a current appraisal of the asset.
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Receipt
of Fees and Other Compensation by Our Advisor and Its
Affiliates
A transaction involving the purchase or sale of properties, or
the purchase or sale of any other real estate-related
investment, will likely result in the receipt of fees and other
compensation by our advisor and its affiliates, including
acquisition and advisory fees, disposition fees, and the
possibility of subordinated performance fees. Subject to
oversight by our board of directors, our advisor will have
considerable discretion with respect to all decisions relating
to the terms and timing of all transactions. Therefore, our
advisor may have conflicts of interest concerning certain
actions taken on our behalf, particularly due to the fact that
acquisition fees will generally be based on the cost of the
investment and payable to our advisor and its affiliates
regardless of the quality of the properties acquired. Similarly,
until such time as our board of directors provides an estimate
of the value of our shares, the advisory fees will be based on
the cost of our investment, regardless of the quality of the
properties acquired or services provided to us. Basing
acquisition fees and advisory fees on the cost or estimated
value of the investment may influence our advisors
decisions relating to property acquisitions.
In advising our board of directors with respect to pursuing a
liquidity event, our advisor and its affiliates may have
conflicts of interest due to the fees and other consideration
they may receive under alternative liquidity events, such as the
listing of our shares of common stock on a national exchange,
the sale of our company or the liquidation of our assets. In
each event, a subordinated performance fee would be paid to our
advisor only after our investors have received a return of their
net capital invested and an 8% annual cumulative, non-compounded
return. However, in the event our shares of common stock are
listed on a national exchange, we may internalize our management
functions. One method for internalizing our management functions
would be for us to acquire our advisor through a business
combination, which could result in significant payments to our
advisor or its affiliates. Such payments would be made
irrespective of whether our investors have received a return of
their net capital invested and an 8% annual cumulative,
non-compounded return. Therefore, our advisor may have an
incentive to recommend a listing transaction rather than a
liquidation transaction. See the Management
Compensation section of this prospectus.
In addition, the sale of our shares of common stock in this
offering will result in dealer manager fees to Cole Capital
Corporation, our dealer manager and an affiliate of our advisor.
Each transaction we enter into with our advisor or its
affiliates is subject to an inherent conflict of interest. Our
board of directors may encounter conflicts of interest in
enforcing our rights against any affiliate in the event of a
default by or disagreement with an affiliate or in invoking
powers, rights or options pursuant to any agreement between us
and any affiliate.
Certain
Conflict Resolution Procedures
In order to reduce or eliminate certain potential conflicts of
interest, our charter contains a number of restrictions relating
to (1) transactions we may enter into with our advisor and
its affiliates, (2) certain future offerings, and
(3) allocation of investment opportunities among affiliated
entities. Conflict resolution provisions in our charter and
policies adopted by our board of directors include, among
others, the following:
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We will not purchase or lease properties from our sponsor, our
advisor, any of our directors or any of their respective
affiliates unless a majority of the directors, including a
majority of the independent directors, not otherwise interested
in such transaction determines that such transaction is fair and
reasonable to us and at a price to us no greater than the cost
of the property to the seller or lessor, unless there is
substantial justification for any amount that exceeds such cost
and such excess amount is determined to be reasonable. In no
event will we acquire any property at an amount in excess of its
current appraised value. We will not sell or lease properties to
our sponsor, our advisor, any of our directors or any of their
respective affiliates unless a majority of the directors,
including a majority of the independent directors, not otherwise
interested in the transaction determines that the transaction is
fair and reasonable to us.
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We will not make any loans to our sponsor, our advisor, any of
our directors or any of their respective affiliates, except that
we may make or invest in mortgage loans involving our sponsor,
our advisor, our directors or their respective affiliates,
provided, among other things, that an appraisal of the
underlying property is obtained from an independent appraiser
and the transaction is approved by a majority of the directors,
including a majority of the independent directors, not otherwise
interested in such transaction as fair and reasonable to us and
on terms no less favorable to us than those available from
unaffiliated third parties. In addition, our sponsor, our
advisor, any of our directors and any of their respective
affiliates will not make loans to us or to joint ventures in
which we are a joint venture partner unless approved by a
majority of our directors, including a majority of the
independent directors, not otherwise interested in the
transaction as fair, competitive and commercially reasonable,
and no less favorable to us than comparable loans between
unaffiliated parties.
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Our advisor and its affiliates will be entitled to
reimbursement, at cost, for actual expenses incurred by them on
behalf of us or joint ventures in which we are a joint venture
partner; provided, however, our advisor must reimburse us for
the amount, if any, by which our total operating expenses,
including the advisor asset management fee, paid during the
immediately prior four consecutive fiscal quarters exceeded the
greater of: (i) 2% of our average invested assets for such
year, or (ii) 25% of our net income, before any additions
to reserves for depreciation, bad debts or other similar
non-cash reserves and excluding any gain from the sale of our
assets, for such year.
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In the event that an investment opportunity becomes available
that may be suitable for both us and one or more other
Cole-sponsored program, and for which more than one of such
entities has sufficient uninvested funds, then our advisor and
the advisors of the other programs, with oversight by their
respective boards of directors, will examine the following
factors, among others, in determining the entity for which the
investment opportunity is most appropriate:
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the investment objective of each entity;
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the anticipated operating cash flows of each entity and the cash
requirements of each entity;
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the effect of the acquisition both on diversification of each
entitys investments by type of property, geographic area
and tenant concentration;
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the amount of funds available to each program and the length of
time such funds have been available for investment;
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the policy of each entity relating to leverage of properties;
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the income tax effects of the purchase to each entity; and
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the size of the investment.
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If, in the judgment of the advisors, the investment opportunity
may be equally appropriate for more than one program, then the
entity that has had the longest period of time elapse since it
was offered an investment opportunity will first be offered such
investment opportunity.
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If a subsequent development, such as a delay in the closing of
the acquisition or a delay in the construction of a property,
causes any such investment, in the opinion of the advisors, to
be more appropriate for an entity other than the entity that
committed to make the investment, the advisors may determine
that another program affiliated with our advisor or its
affiliates will make the investment. Our board of directors,
including the independent directors, has a duty to ensure that
the method used for the allocation of the acquisition of
properties by two or more affiliated programs seeking to acquire
similar types of properties is applied fairly to us.
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We will not enter into any other transaction with our sponsor,
our advisor, any of our directors or any of their affiliates,
including the acceptance of goods or services from our sponsor,
our advisor, any of our directors or any of their affiliates,
unless a majority of our directors, including a majority of the
independent directors, not otherwise interested in the
transaction approve such transaction as fair and reasonable to
us and on terms and conditions not less favorable to us than
those available from unaffiliated third parties.
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INVESTMENT
OBJECTIVES AND POLICIES
Investment
Objectives
Our primary investment objectives are:
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to acquire quality commercial real estate properties, net leased
under long-term leases to creditworthy tenants, which provide
current operating cash flows;
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to provide reasonably stable, current income for you through the
payment of cash distributions; and
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to provide the opportunity to participate in capital
appreciation in the value of our investments.
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We may not achieve any of these objectives. See the Risk
Factors section of this prospectus.
Our
Competitive Strengths
We believe that we will be able to distinguish ourselves from
other owners, operators and acquirers of retail and other
income-producing properties. We believe our long-term success
will be supported through the following competitive strengths:
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Coles Disciplined Investment
Approach.
Mr. Cole began investing in
commercial real estate in 1979, focusing primarily on retail and
office properties, and raw land in the metropolitan Phoenix
area. From 1979 until the end of 1999, Mr. Cole, together
with various investment partners, acquired 78 commercial
properties and raw land. During that time, Mr. Cole founded
what is now Cole Real Estate Investments. From 2001 until the
end of 2010, our sponsors real estate programs acquired
1,359 commercial properties, predominantly in the retail sector.
See the section of this prospectus captioned Prior
Performance Summary for a discussion of the historical
experience of the real estate programs managed over the last ten
years by our sponsor. Under Mr. Coles leadership, our
sponsor developed an investment approach that focuses on
acquiring single-tenant necessity corporate properties subject
to long-term net leases to creditworthy tenants. In addition,
our sponsors investment strategy targets properties that
typically have high occupancy rates (greater than 90%) and low
to moderate leverage (0% to 50% loan to value). While our
sponsor historically has applied its investment approach
predominantly in the retail sector, our sponsor has utilized
this investment approach in the office and industrial sectors as
well. We expect that our advisor will apply this disciplined
investment approach to our investments in necessity retail and
other income-producing properties.
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Experienced Advisor.
Mr. Roberts, our
advisors executive vice president and managing director of
real estate, and Mr. Kundrak, our advisors senior
vice president and chief acquisitions officer-single tenant
retail, have 24 and 28 years of commercial real estate
experience, respectively, and each has more than 24 years
of retail real estate experience. Additionally, our
advisors executive management team has extensive public
company operating experience, with several of its senior
executives having held senior positions at publicly held REITs.
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Successful Credit Underwriting
Experience.
Cole Real Estate Investments has
demonstrated an ability to successfully underwrite the tenants
that occupy the real estate assets of Cole-sponsored real estate
programs. The combined portfolios of CCPT I, CCPT II and
CCPT III have a 98% occupancy rate as of September 30, 2011.
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Strong Industry Relationships.
We believe that
our advisors extensive network of industry relationships
with the real estate brokerage, development and investor
communities will enable us to successfully execute our
acquisition and investment strategies. These relationships
augment our advisors ability to source acquisitions in
off-market transactions outside of competitive marketing
processes, capitalize on development opportunities and capture
repeat business and transaction activity. Our advisors
strong relationships with the tenant and leasing brokerage
communities are expected to aid in attracting and retaining
tenants.
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Ability to Purchase Properties for Cash.
We
expect that one of our competitive advantages will be our
ability to purchase properties for cash and to close
transactions quickly. We believe our ability to purchase
properties for cash will expedite our acquisition process and
make us an attractive purchaser to potential sellers of
properties. While we have not yet raised any substantial
capital, Cole Capital Corporation, the broker-dealer affiliate
of our sponsor, has successfully raised capital for our
sponsors affiliated real estate portfolios, and we expect
that, through their well-developed distribution capabilities and
relationships with other broker-dealers, Cole Capital
Corporation will be successful in selling shares on our behalf.
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Liquidity
Opportunities
Our board of directors will consider future liquidity
opportunities, which may include the sale of our company, the
sale of all or substantially all of our assets, a merger or
similar transaction, the listing of our shares of common stock
for trading on a national securities exchange or an alternative
strategy that will result in a significant increase in the
opportunities for stockholders to dispose of their shares. We
expect to engage in a strategy to provide our investors with
liquidity at a time and in a method recommended by our advisor
and determined by our independent directors to be in the best
interests of our stockholders. As we are unable to determine
what macro- or micro- economic factors may affect the decisions
our board of directors make in the future with respect to any
potential liquidity opportunity, we have not selected a fixed
time period or determined criteria for any such decisions. As a
result, while our board of directors will consider a variety of
options to provide stockholders with liquidity throughout the
life of this program, there is no requirement that we commence
any such action on or before a specified date. Stockholder
approval would be required for the sale of all or substantially
all of our assets, or the sale or merger of our company.
Acquisition
and Investment Policies
Types
of Investments
We intend to invest primarily in income-producing necessity
retail properties that are single-tenant or multi-tenant
power centers, which are leased to national and
regional creditworthy tenants under long-term leases, and are
strategically located throughout the United States and
U.S. protectorates. Necessity retail properties are
properties leased to retail tenants that attract consumers for
everyday needs, such as pharmacies, home improvement stores,
national superstores, restaurants and regional retailers.
For over three decades, our sponsor, Cole Real Estate
Investments, has developed and utilized this investment approach
in acquiring and managing core commercial real estate assets
primarily in the retail sector but in the office and industrial
sectors as well. We believe that our sponsors experience
in assembling real estate portfolios, which principally focus on
national and regional creditworthy tenants subject to long-term
leases, will provide us with a competitive advantage. In
addition, our sponsor has built a business of over
275 employees, who are experienced in the various aspects
of acquiring, financing and managing commercial real estate, and
that our access to these resources also will provide us with an
advantage.
We also may invest in other income-producing properties, such as
office and industrial properties, which may share certain core
characteristics with our retail investments, such as a principal
creditworthy tenant, a long-term net lease, and a strategic
location. We believe investments in these types of office and
industrial properties, which are essential to the business
operations of the tenant, are consistent with our goal of
providing investors with a relatively stable stream of current
income and an opportunity for capital appreciation.
We may further diversify our portfolio by making and investing
in mortgage, bridge or mezzanine loans, or in participations in
such loans, secured directly or indirectly by the same types of
commercial properties that we may acquire directly, and we may
invest in other real estate-related securities. We may acquire
properties under development or that require substantial
refurbishment or renovation. We also may acquire majority or
minority interests in other entities (or business units of such
entities) with investment objectives
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similar to ours or with management, investment or development
capabilities that our advisor deems desirable or advantageous to
acquire. We will not forgo a high quality investment because it
does not precisely fit our expected portfolio composition. Our
board of directors has broad discretion to change our investment
policies in order for us to achieve our investment objectives.
We anticipate that many of our properties will be leased to
tenants in the chain or franchise retail industry, including but
not limited to convenience stores, drug stores and restaurant
properties, as well as leased to large national retailers as
stand alone properties or as part of so-called power
centers, which are comprised of big box national, regional
and local retailers. Our advisor will monitor industry trends
and identify properties on our behalf that serve to provide a
favorable return balanced with risk. Our management is expected
primarily to target regional or national name brand retail
businesses with established track records. We generally intend
to hold each property for a period in excess of seven years.
We believe that our general focus on the acquisition of a large
number of single-tenant and multi-tenant necessity retail
properties net leased to creditworthy tenants presents lower
investment risks and greater stability than other sectors of
todays commercial real estate market. By acquiring a large
number of single-tenant and multi-tenant retail properties, we
believe that lower than expected results of operations from one
or a few investments will not necessarily preclude our ability
to realize our investment objective of cash flow from our
overall portfolio. We believe this approach can result in less
risk to investors than an investment approach that targets other
asset classes. In addition, we believe that retail properties
under long-term triple net and double net leases offer a
distinct investment advantage since these properties generally
require less management and operating capital, have less
recurring tenant turnover and, with respect to single-tenant
properties, often offer superior locations that are less
dependent on the financial stability of adjoining tenants. In
addition, since we intend to acquire properties that are
geographically diverse, we expect to minimize the potential
adverse impact of economic slow downs or downturns in local
markets. Our management believes that a portfolio consisting of
both freestanding, single-tenant retail properties and
multi-tenant retail properties anchored by large national
retailers will enhance our liquidity opportunities for investors
by making the sale of individual properties, multiple properties
or our investment portfolio as a whole attractive to
institutional investors and by making a possible listing of our
shares attractive to the public investment community.
To the extent feasible, we will seek to achieve a well-balanced
portfolio diversified by geographic location, age and lease
maturities of the various properties. We will pursue properties
leased to tenants representing a variety of retail industries to
avoid concentration in any one industry. These industries may
include all types of retail establishments, such as big box
retailers, convenience stores, drug stores and restaurant
properties. We also will seek to diversify our tenants among
national, regional and local brands. We generally expect to
target properties with lease terms in excess of ten years. We
may acquire properties with shorter lease terms if the property
is in an attractive location, if the property is difficult to
replace, or if the property has other significant favorable
attributes. We expect that these investments will provide
long-term value by virtue of their size, location, quality and
condition, and lease characteristics. We currently expect that
substantially all of our acquisitions will be in the United
States, including U.S. protectorates.
Many retail companies today are entering into sale-leaseback
arrangements as a strategy for applying capital that would
otherwise be applied to their real estate holdings to their core
operating businesses. We believe that our investment strategy
will enable us to take advantage of the increased emphasis on
retailers core business operations in todays
competitive corporate environment as many retailers attempt to
divest from real estate assets.
There is no limitation on the number, size or type of properties
that we may acquire or on the percentage of net proceeds of this
offering that may be invested in a single property. The number
and mix of properties comprising our portfolio will depend upon
real estate market conditions and other circumstances existing
at the time we acquire properties, and the amount of proceeds we
raise in this offering. We are not restricted to investments in
corporate properties. We will not forego a high quality
investment because it does not precisely fit our expected
portfolio composition. See Other
Possible Investments below for a description of other
types of real estate and real estate-related investments we may
make.
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We intend to incur debt to acquire properties where our advisor
determines that incurring such debt is in our best interests. In
addition, from time to time, we may acquire some properties
without financing and later incur mortgage debt secured by one
or more of such properties if favorable financing terms are
available. We will use the proceeds from these loans to acquire
additional properties. See Borrowing
Policies below for a more detailed description of our
borrowing intentions and limitations.
Real
Estate Underwriting Process
In evaluating potential property acquisitions consistent with
our investment objectives, our advisor will apply a
well-established underwriting process to determine the
creditworthiness of potential tenants. Similarly, our advisor
will apply credit underwriting criteria to possible new tenants
when we are re-leasing properties in our portfolio. Many of the
tenants of our properties will be national or regional retail
chains that are creditworthy entities having high net worth and
operating income. Our advisors underwriting process
includes analyzing the financial data and other available
information about the tenant, such as income statements, balance
sheets, net worth, cash flow, business plans, data provided by
industry credit rating services,
and/or
other
information our advisor may deem relevant. Generally, these
tenants must have a proven track record in order to meet the
credit tests applied by our advisor. In addition, we may obtain
guarantees of leases by the corporate parent of the tenant, in
which case our advisor will analyze the creditworthiness of the
guarantor. In many instances, especially in sale-leaseback
situations, where we are acquiring a property from a company and
simultaneously leasing it back to the company under a long-term
lease, we will meet with the senior management to discuss the
companys business plan and strategy.
When using debt rating agencies, a tenant typically will be
considered creditworthy when the tenant has an investment
grade debt rating by Moodys of Baa3 or better,
credit rating by Standard & Poors of BBB- or
better, or its payments are guaranteed by a company with such
rating. Changes in tenant credit ratings, coupled with future
acquisition and disposition activity, may increase or decrease
our concentration of creditworthy tenants in the future.
Moodys ratings are opinions of future relative
creditworthiness based on an evaluation of franchise value,
financial statement analysis and management quality. The rating
given to a debt obligation describes the level of risk
associated with receiving full and timely payment of principal
and interest on that specific debt obligation and how that risk
compares with that of all other debt obligations. The rating,
therefore, provides one measure of the ability of a company to
generate cash in the future.
A Moodys debt rating of Baa3, which is the lowest
investment grade rating given by Moodys, is assigned to
companies which, in Moodys opinion, have adequate
financial security. However, certain protective elements may be
lacking or may be unreliable over any given period of time. A
Moodys debt rating of AAA, which is the highest investment
grade rating given by Moodys, is assigned to companies
that, in Moodys opinion, have exceptional financial
security. Thus, investment grade tenants will be judged by
Moodys to have at least adequate financial security, and
will in some cases have exceptional financial security.
Standard & Poors assigns a credit rating to
companies and to each issuance or class of debt issued by a
rated company. A Standard & Poors credit rating
of BBB-, which is the lowest investment grade rating given by
Standard & Poors, is assigned to companies that,
in Standard & Poors opinion, exhibit adequate
protection parameters. However, adverse economic conditions or
changing circumstances are more likely to lead to a weakened
capacity of the company to meet its financial commitments. A
Standard & Poors credit rating of AAA+, which is
the highest investment grade rating given by
Standard & Poors, is assigned to companies that,
in Standard & Poors opinion, have extremely
strong capacities to meet their financial commitments. Thus,
investment grade tenants will be judged by Standard &
Poors to have at least adequate protection parameters, and
will in some cases have extremely strong financial positions.
While we will utilize ratings by Moodys and
Standard & Poors as one factor in determining
whether a tenant is creditworthy, our advisor will also consider
other factors in determining whether a tenant is creditworthy,
for the purpose of meeting our investment objectives. Our
advisors underwriting process will
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also look at other debt agencies, such as Dun &
Bradstreet, along with our advisors own analysis of the
financial condition of the tenant
and/or
the
guarantor, the operating history of the property with the
tenant, the tenants market share and track record within
the tenants industry segment, the general health and
outlook of the tenants industry segment, the strength of
the tenants management team and the terms and length of
the lease at the time of the acquisition.
Description
of Leases
We expect, in most instances, to acquire tenant properties with
existing double net or triple net leases. Net leases
means leases that typically require tenants to pay all or a
majority of the operating expenses, including real estate taxes,
special assessments and sales and use taxes, utilities,
maintenance, insurance and building repairs related to the
property, in addition to the lease payments. Triple net leases
typically require the tenant to pay all costs associated with a
property in addition to the base rent and percentage rent, if
any, including capital expenditures for the roof and the
building structure. Double net leases typically hold the
landlord responsible for the capital expenditures for the roof
and structure, while the tenant is responsible for all lease
payments and remaining operating expenses associated with the
property. We expect that double net and triple net leases will
help ensure the predictability and stability of our expenses,
which we believe will result in greater predictability and
stability of our cash distributions to stockholders. Not all of
our leases will be net leases. In respect of multi-tenant
properties, we expect to have a variety of lease arrangements
with the tenants of these properties. Since each lease is an
individually negotiated contract between two or more parties,
each lease will have different obligations of both the landlord
and tenant. Many large national tenants have standard lease
forms that generally do not vary from property to property. We
will have limited ability to revise the terms of leases to those
tenants. We expect that multi-tenant office space is likely to
be subject to gross leases. Gross leases
means leases that typically require the tenant to pay a flat
rental amount and we would pay for all property charges
regularly incurred as a result of our owning the property. Not
all of our leases will be net leases. When spaces in a property
become vacant, existing leases expire, or we acquire properties
under development or requiring substantial refurbishment or
renovation, we anticipate entering into net leases.
We intend to enter into leases that have terms of ten years or
more. We may acquire properties under which the lease term has
partially expired. We also may acquire properties with shorter
lease terms if the property is in an attractive location, if the
property is difficult to replace, or if the property has other
significant favorable real estate attributes. Under most
commercial leases, tenants are obligated to pay a predetermined
annual base rent. Some of the leases also will contain
provisions that increase the amount of base rent payable at
points during the lease term. We expect that many of our leases
will contain periodic rent increases. Generally, the leases
require each tenant to procure, at its own expense, commercial
general liability insurance, as well as property insurance
covering the building for the full replacement value and naming
the ownership entity and the lender, if applicable, as the
additional insured on the policy. Tenants will be required to
provide proof of insurance by furnishing a certificate of
insurance to our advisor on an annual basis. The insurance
certificates will be tracked and reviewed for compliance by our
advisors property and risk management departments. As a
precautionary measure, we may obtain, to the extent available,
secondary liability insurance, as well as loss of rents
insurance that covers one year of annual rent in the event of a
rental loss.
Some leases may require that we procure insurance for both
commercial general liability and property damage; however,
generally the premiums are fully reimbursable from the tenant.
In such instances, the policy will list us as the named insured
and the tenant as the additional insured.
We do not expect to permit leases to be assigned or subleased
without our prior written consent. If we do consent to an
assignment or sublease, generally we expect the terms of such
consent to provide that the original tenant will remain fully
liable under the lease unless we release that original tenant
from its obligations.
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We may purchase properties and lease them back to the sellers of
such properties. While we intend to use our best efforts to
structure any such sale-leaseback transaction so that the lease
will be characterized as a true lease and so that we
are treated as the owner of the property for federal income tax
purposes, the Internal Revenue Service could challenge this
characterization. In the event that any sale-leaseback
transaction is re-characterized as a financing transaction for
federal income tax purposes, deductions for depreciation and
cost recovery relating to such property would be disallowed, and
in certain circumstances, we could lose our REIT status. See the
Federal Income Tax Considerations
Sale-Leaseback Transactions section of this prospectus.
Investment
Decisions
Our advisor has substantial discretion with respect to the
selection of our specific investments, subject to our investment
and borrowing policies, and our policies are approved by our
board of directors. In pursuing our investment objectives and
making investment decisions on our behalf, our advisor evaluates
the proposed terms of the investment against all aspects of the
transaction, including the condition and financial performance
of the asset, the terms of existing leases and the
creditworthiness of the tenant, and property location and
characteristics. Because the factors considered, including the
specific weight we place on each factor, vary for each potential
investment, we do not, and are not able to, assign a specific
weight or level of importance to any particular factor.
Our advisor will procure and review an independent valuation
estimate on the proposed investment. In addition, our advisor,
to the extent such information is available, will consider the
following:
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tenant rolls and tenant creditworthiness;
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a property condition report;
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unit level store performance;
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property location, visibility and access;
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age of the property, physical condition and curb appeal;
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neighboring property uses;
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local market conditions, including vacancy rates;
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area demographics, including trade area population and average
household income;
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neighborhood growth patters and economic conditions;
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presence of nearby properties that may positively or negatively
impact store sales at the subject property; and
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lease terms, including length of lease term, scope of landlord
responsibilities, presence and frequency of contractual rental
increases, renewal option provisions, exclusive and permitted
use provisions, co-tenancy requirements and termination options.
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Our advisor will review the terms of each existing lease by
considering various factors, including:
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rent escalations;
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remaining lease term;
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renewal option terms;
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tenant purchase options;
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termination options;
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scope of the landlords maintenance, repair and replacement
requirements;
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projected net cash flow yield; and
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projected internal rates of return.
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Our board of directors has adopted a policy to prohibit
acquisitions from affiliates of our advisor except in limited
circumstances. See the section of this prospectus captioned
Conflicts of Interest Transactions with Our
Advisor and its Affiliates.
Conditions
to Closing Our Acquisitions
Generally, we condition our obligation to close the purchase of
any investment on the delivery and verification of certain
documents from the seller or developer, including, where
appropriate:
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plans and specifications;
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surveys;
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evidence that title to the property can be freely sold or
otherwise transferred to us, subject to such liens and
encumbrances as are acceptable to our advisor;
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financial statements covering recent operations of properties
having operating histories;
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title and liability insurance policies; and
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certificates of the tenant attesting that the tenant believes
that, among other things, the lease is valid and enforceable.
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In addition, we will take such steps as we deem necessary with
respect to potential environmental matters. See the section of
this prospectus captioned Environmental
Matters below.
We may enter into purchase and sale arrangements with a seller
or developer of a suitable property under development or
construction. In such cases, we will be obligated to purchase
the property at the completion of construction, provided that
the construction conforms to definitive plans, specifications,
and costs approved by us in advance. In such cases, prior to our
acquiring the property, we generally would receive a certificate
of an architect, engineer or other appropriate party, stating
that the property complies with all plans and specifications. If
renovation or remodeling is required prior to the purchase of a
property, we expect to pay a negotiated maximum amount to the
seller upon completion. We do not currently intend to construct
or develop properties or to render any services in connection
with such development or construction but we may do so in the
future.
In determining whether to purchase a particular property, we
may, in accordance with customary practices, obtain an option to
purchase such property. The amount paid for an option, if any,
normally is forfeited if the property is not purchased and
normally is credited against the purchase price if the property
is purchased.
In the purchasing, leasing and developing of properties, we are
subject to risks generally incident to the ownership of real
estate. See the Risk Factors General Risks
Related to Investments in Real Estate section of this
prospectus.
Ownership
Structure
We intend our investments in real estate to generally take the
form of holding fee title or a long-term leasehold estate. We
expect to acquire such interests either directly through our
operating partnership or indirectly through limited liability
companies, limited partnerships or other entities owned
and/or
controlled by our operating partnership. We may acquire
properties by acquiring the entity that holds the desired
properties. We also may acquire properties through investments
in joint ventures, partnerships, co-tenancies or other
co-ownership arrangements with third parties, including the
developers of the properties or affiliates of our
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advisor. See the section captioned Our Operating
Partnership Agreement in this prospectus and the
Joint Venture Investments section below.
Joint
Venture Investments
We may enter into joint ventures, partnerships, co-tenancies and
other co-ownership arrangements with affiliated entities of our
advisors, including other real estate programs sponsored by
affiliates of our advisor, and other third parties for the
acquisition, development or improvement of properties or the
acquisition of other real estate-related investments. We may
also enter into such arrangements with real estate developers,
owners and other unaffiliated third parties for the purpose of
developing, owning and operating real properties. In determining
whether to invest in a particular joint venture, our advisor
will evaluate the underlying real property or other real
estate-related investment using the same criteria described
above in Investment Decisions for the
selection of our real property investments. Our advisor also
will evaluate the joint venture or co-ownership partner and the
proposed terms of the joint venture or a co-ownership
arrangement.
Our general policy is to invest in joint ventures only when we
will have an option or contract to purchase, or a right of first
refusal to purchase, the property held by the joint venture or
the co-venturers interest in the joint venture if the
co-venturer elects to sell such interest. In the event that the
co-venturer elects to sell all or a portion of the interests
held in any such joint venture, however, we may not have
sufficient funds to exercise our right of first refusal to buy
the other co-venturers interest in the joint venture. In
the event that any joint venture with an affiliated entity holds
interests in more than one asset, the interest in each such
asset may be specially allocated between us and the joint
venture partner based upon the respective proportion of funds
deemed invested by each co-venturer in each such asset.
Our advisors officers and key persons may have conflicts
of interest in determining which Cole-sponsored program should
enter into any particular joint venture agreement. The
co-venturer may have economic or business interests or goals
that are or may become inconsistent with our business interests
or goals. In addition, our advisors officers and key
persons may face a conflict in structuring the terms of the
relationship between our interests and the interest of the
affiliated co-venturer and in managing the joint venture. Since
some or all of our advisors officers and key persons will
also advise the affiliated co-venturer, agreements and
transactions between us and any other Cole-sponsored co-venturer
will not have the benefit of arms-length negotiation of
the type normally conducted between unrelated co-venturers,
which may result in the co-venturer receiving benefits greater
than the benefits that we receive. In addition, we may assume
liabilities related to the joint venture that exceed the
percentage of our investment in the joint venture.
We may enter into joint ventures with other Cole real estate
programs, or with our sponsor, our advisor, one or more of our
directors, or any of their respective affiliates, only if a
majority of our directors (including a majority of our
independent directors) not otherwise interested in the
transaction approve the transaction as being fair and reasonable
to us and on substantially the same terms and conditions as
those received by unaffiliated joint venturers, and the cost of
our investment must be supported by a current appraisal of the
asset.
Development
and Construction of Properties
We may invest in properties on which improvements are to be
constructed or completed or which require substantial renovation
or refurbishment. We expect that joint ventures would be the
exclusive vehicle through which we would invest in
build-to-suit
properties. Our general policy is to structure them as follows:
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we may enter into a joint venture with third parties who have an
executed lease with the developer who has an executed lease in
place with the future tenant whereby we will provide a portion
of the equity or debt financing;
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we would accrue a preferred return during construction on any
equity investment;
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the properties will be developed by third parties; and
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consistent with our general policy regarding joint venture
investments, we would have an option or contract to purchase, or
a right of first refusal to purchase, the property or
co-investors interest.
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It is possible that joint venture partners may resist granting
us a right of first refusal or may insist on a different
methodology for unwinding the joint venture if one of the
parties wishes to liquidate its interest.
In the event that we elect to engage in development or
construction projects, in order to help ensure performance by
the builders of properties that are under construction,
completion of such properties will be guaranteed at the
contracted price by a completion guaranty, completion bond or
performance bond. Our advisor may rely upon the substantial net
worth of the contractor or developer or a personal guarantee
accompanied by financial statements showing a substantial net
worth provided by an affiliate of the person entering into the
construction or development contract as an alternative to a
completion bond or performance bond. Development of real estate
properties is subject to risks relating to a builders
ability to control construction costs or to build in conformity
with plans, specifications and timetables. See the Risk
Factors General Risks Related to Investments in Real
Estate section of this prospectus.
We may make periodic progress payments or other cash advances to
developers and builders of our properties prior to completion of
construction only upon receipt of an architects
certification as to the percentage of the project then completed
and as to the dollar amount of the construction then completed.
We intend to use such additional controls on disbursements to
builders and developers as we deem necessary or prudent. We may
directly employ one or more project managers, including our
advisor or an affiliate of our advisor, to plan, supervise and
implement the development of any unimproved properties that we
may acquire. Such persons would be compensated directly by us or
through an affiliate of our advisor and reimbursed by us. In
either event, the compensation would reduce the amount of any
construction fee, development fee or acquisition fee that we
would otherwise pay to our advisor or its affiliate.
In addition, we may invest in unimproved properties, provided
that we will not invest more than 10% of our total assets in
unimproved properties or in mortgage loans secured by such
properties. We will consider a property to be an unimproved
property if it was not acquired for the purpose of producing
rental or other operating cash flows, has no development or
construction in process at the time of acquisition and no
development or construction is planned to commence within one
year of the acquisition.
Environmental
Matters
All real property and the operations conducted on real property
are subject to federal, state and local laws and regulations
relating to environmental protection and human health and
safety. These laws and regulations generally govern wastewater
discharges, air emissions, the operation and removal of
underground and above-ground storage tanks, the use, storage,
treatment, transportation and disposal of solid and hazardous
materials, the presence and release of hazardous substances and
the remediation of contamination associated with disposals.
State and federal laws in this area are constantly evolving, and
we intend to take commercially reasonable steps to protect
ourselves from the impact of these laws.
We generally will not purchase any property unless and until we
also obtain what is generally referred to as a Phase
I environmental site assessment and are generally
satisfied with the environmental status of the property.
However, we may purchase a property without obtaining such
assessment if our advisor determines the assessment is not
necessary because there is an existing recent Phase I site
assessment. A Phase I environmental site assessment basically
consists of a visual survey of the building and the property in
an attempt to identify areas of potential environmental
concerns, visually observing neighboring properties to assess
surface conditions or activities that may have an adverse
environmental impact on the property interviewing the key site
manager and/or property owner, contacting local governmental
agency personnel and performing an environmental regulatory
database search in an attempt to determine any known
environmental concerns in, and in the immediate vicinity of, the
property. A Phase I environmental site assessment does not
generally include any sampling or testing of soil, ground water
or building materials from the property and may not reveal all
environmental hazards on a property.
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In the event the Phase I site assessment uncovers potential
environmental problems with a property, our advisor will
determine whether we will pursue the investment opportunity and
whether we will have a Phase II environmental
site assessment performed. The factors we may consider in
determining whether to conduct a Phase II site assessment
include, but are not limited to, (i) the types of
operations conducted on the property and surrounding property,
(ii) the time, duration and materials used during such
operations, (iii) the waste handling practices of any
tenants or property owners, (iv) the potential for
hazardous substances to be released into the environment,
(v) any history of environmental law violations on the
subject property and surrounding property, (vi) any
documented environmental releases, (vii) any observations
from the consultant that conducted the Phase I environmental
site assessment, and (viii) whether any party (i.e.
surrounding property owners, prior owners or tenants) may be
responsible for addressing the environmental conditions. We will
determine whether to conduct a Phase II environmental site
assessment on a case by case basis.
We expect that some of the properties that we acquire may
contain, at the time of our investment, or may have contained
prior to our investment, underground storage tanks for the
storage of petroleum products and other hazardous or toxic
substances. All of these operations create a potential for the
release of petroleum products or other hazardous or toxic
substances. Some of our potential properties may be adjacent to
or near other properties that have contained or then currently
contain underground storage tanks used to store petroleum
products or other hazardous or toxic substances. In addition,
certain of our potential properties may be on or adjacent to or
near other properties upon which others, including former owners
or tenants of our properties, have engaged, or may in the future
engage, in activities that may release petroleum products or
other hazardous or toxic substances.
From time to time, we may acquire properties, or interests in
properties, with known adverse environmental conditions where we
believe that the environmental liabilities associated with these
conditions are quantifiable and that the acquisition will yield
a superior risk-adjusted return. In such an instance, we will
estimate the costs of environmental investigation,
clean-up
and
monitoring in determining the purchase price. Further, in
connection with property dispositions, we may agree to remain
responsible for, and to bear the cost of, remediating or
monitoring certain environmental conditions on the properties.
Other
Possible Investments
Although we expect to invest primarily in real estate, our
portfolio may also include other real estate-related
investments, such as mortgage, mezzanine, bridge and other loans
and securities related to real estate assets, frequently, but
not necessarily always, in the corporate sector, to the extent
such assets do not cause us to lose our REIT status or cause us
to be an investment company under the Investment Company Act. We
may make adjustments to our target portfolio based on real
estate market conditions and investment opportunities. Thus, to
the extent that our advisor presents us with high quality
investment opportunities that allow us to meet the REIT
requirements under the Internal Revenue Code and do not cause
us, our operating partnership, or any other subsidiaries to meet
the definition of an investment company under the
Investment Company Act, our portfolio composition may vary from
what we initially expect. Our board of directors has broad
discretion to change our investment policies in order for us to
achieve our investment objectives.
Investing in and Originating Loans.
The
criteria that our advisor will use in making or investing in
loans on our behalf is substantially the same as those involved
in acquiring properties for our portfolio. We do not intend to
make loans to other persons, to underwrite securities of other
issuers or to engage in the purchase and sale of any types of
investments other than those relating to real estate. However,
unlike our property investments which we expect to hold in
excess of seven years, we expect that the average duration of
loans will typically be one to five years.
We do not expect to make or invest in loans that are not
directly or indirectly secured by real estate. We will not make
or invest in mortgage loans on any one property if the aggregate
amount of all mortgage loans outstanding on the property,
including our loan, would exceed an amount equal to 85% of the
appraised value of the property, as determined by an independent
third party appraiser, unless we find substantial justification
due to other underwriting criteria. We may find such
justification in connection with the purchase of loans in cases
in which we believe there is a high probability of our
foreclosure upon the property in order to acquire
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the underlying assets and in which the cost of the loan
investment does not exceed the fair market value of the
underlying property. We will not invest in or make loans unless
an appraisal has been obtained concerning the underlying
property, except for those loans insured or guaranteed by a
government or government agency. In cases in which a majority of
our independent directors so determine and in the event the
transaction is with our advisor, any of our directors or their
respective affiliates, the appraisal will be obtained from a
certified independent appraiser to support its determination of
fair market value.
We may invest in first, second and third mortgage loans,
mezzanine loans, bridge loans, wraparound mortgage loans,
construction mortgage loans on real property, and loans on
leasehold interest mortgages. However, we will not make or
invest in any loans that are subordinate to any mortgage or
equity interest of our advisor or any of its or our affiliates.
We also may invest in participations in mortgage loans. A
mezzanine loan is a loan made in respect of certain real
property but is secured by a lien on the ownership interests of
the entity that, directly or indirectly, owns the real property.
A bridge loan is short term financing, for an individual or
business, until permanent or the next stage of financing, can be
obtained. Second mortgage and wraparound loans are secured by
second or wraparound deeds of trust on real property that is
already subject to prior mortgage indebtedness. A wraparound
loan is one or more junior mortgage loans having a principal
amount equal to the outstanding balance under the existing
mortgage loan, plus the amount actually to be advanced under the
wraparound mortgage loan. Under a wraparound loan, we would
generally make principal and interest payments on behalf of the
borrower to the holders of the prior mortgage loans. Third
mortgage loans are secured by third deeds of trust on real
property that is already subject to prior first and second
mortgage indebtedness. Construction loans are loans made for
either original development or renovation of property.
Construction loans in which we would generally consider an
investment would be secured by first deeds of trust on real
property for terms of six months to two years. Loans on
leasehold interests are secured by an assignment of the
borrowers leasehold interest in the particular real
property. These loans are generally for terms of from six months
to 15 years. The leasehold interest loans are either
amortized over a period that is shorter than the lease term or
have a maturity date prior to the date the lease terminates.
These loans would generally permit us to cure any default under
the lease. Mortgage participation investments are investments in
partial interests of mortgages of the type described above that
are made and administered by third-party mortgage lenders.
In evaluating prospective loan investments, our advisor will
consider factors such as the following:
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the ratio of the investment amount to the underlying
propertys value;
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the propertys potential for capital appreciation;
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expected levels of rental and occupancy rates;
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the condition and use of the property;
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current and projected cash flow of the property;
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potential for rent increases;
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the degree of liquidity of the investment;
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the propertys income-producing capacity;
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the quality, experience and creditworthiness of the borrower;
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general economic conditions in the area where the property is
located;
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in the case of mezzanine loans, the ability to acquire the
underlying real property; and
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other factors that our advisor believes are relevant.
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In addition, we will seek to obtain a customary lenders
title insurance policy or commitment as to the priority of the
mortgage or condition of the title. Because the factors
considered, including the specific weight
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we place on each factor, will vary for each prospective loan
investment, we do not, and are not able to, assign a specific
weight or level of importance to any particular factor.
We may originate loans from mortgage brokers or personal
solicitations of suitable borrowers, or may purchase existing
loans that were originated by other lenders. Our advisor will
evaluate all potential loan investments to determine if the
security for the loan and the
loan-to-value
ratio meets our investment criteria and objectives. Most loans
that we will consider for investment would provide for monthly
payments of interest and some may also provide for principal
amortization, although many loans of the nature that we will
consider provide for payments of interest only and a payment of
principal in full at the end of the loan term. We will not
originate loans with negative amortization provisions.
We do not have any policies directing the portion of our assets
that may be invested in construction loans, mezzanine loans,
bridge loans, loans secured by leasehold interests and second,
third and wraparound mortgage loans. However, we recognize that
these types of loans are riskier than first deeds of trust or
first priority mortgages on income-producing, fee-simple
properties, and we expect to minimize the amount of these types
of loans in our portfolio, to the extent that we make or invest
in loans at all. Our advisor will evaluate the fact that these
types of loans are riskier in determining the rate of interest
on the loans. We do not have any policy that limits the amount
that we may invest in any single loan or the amount we may
invest in loans to any one borrower. We are not limited as to
the amount of gross offering proceeds that we may use to invest
in or originate loans.
Our loan investments may be subject to regulation by federal,
state and local authorities and subject to various laws and
judicial and administrative decisions imposing various
requirements and restrictions, including among other things,
regulating credit granting activities, establishing maximum
interest rates and finance charges, requiring disclosures to
customers, governing secured transactions and setting
collection, repossession and claims handling procedures and
other trade practices. In addition, certain states have enacted
legislation requiring the licensing of mortgage bankers or other
lenders and these requirements may affect our ability to
effectuate our proposed investments in loans. Commencement of
operations in these or other jurisdictions may be dependent upon
a finding of our financial responsibility, character and
fitness. We may determine not to make loans in any jurisdiction
in which the regulatory authority determines that we have not
complied in all material respects with applicable requirements.
Investment in Other Real Estate-Related
Securities.
To the extent permitted by
Section V.D.2 of the NASAA REIT Guidelines, and subject to
the limitations set forth in this prospectus and in our charter,
we may invest in common and preferred real estate-related equity
securities of both publicly traded and private real estate
companies. Our board of directors (including all of our
independent directors) has authorized us to invest in preferred
real estate-related equity securities, provided that such
investments do not exceed the limitations contained in any
credit facility or other agreement to which we are a party. Real
estate-related equity securities are generally unsecured and
also may be subordinated to other obligations of the issuer. Our
investments in real estate-related equity securities will
involve special risks relating to the particular issuer of the
equity securities, including the financial condition and
business outlook of the issuer.
We may also make investments in CMBS to the extent permitted by
the NASAA REIT Guidelines. CMBS are securities that evidence
interests in, or are secured by, a single commercial mortgage
loan or a pool of commercial mortgage loans. CMBS are generally
pass-through certificates that represent beneficial ownership
interests in common law trusts whose assets consist of defined
portfolios of one or more commercial mortgage loans. They are
typically issued in multiple tranches whereby the more senior
classes are entitled to priority distributions from the
trusts income. Losses and other shortfalls from expected
amounts to be received on the mortgage pool are borne by the
most subordinate classes, which receive payments only after the
more senior classes have received all principal
and/or
interest to which they are entitled. CMBS are subject to all of
the risks of the underlying mortgage loans. We may invest in
investment grade and non-investment grade CMBS classes. Our
board of directors has adopted a policy to limit any investments
in non-investment grade CMBS to not more than 10% of our total
assets.
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Borrowing
Policies
Our advisor believes that utilizing borrowing is consistent with
our investment objective of maximizing the return to investors.
By operating on a leveraged basis, we have more funds available
for investment in properties. This allows us to make more
investments than would otherwise be possible, resulting in a
more diversified portfolio.
At the same time, our advisor believes in utilizing leverage in
a moderate fashion. While there is no limitation on the amount
we may borrow against any single improved property, our charter
limits our aggregate borrowings to 75% of the cost (or 300% of
net assets) (before deducting depreciation or other non-cash
reserves) unless excess borrowing is approved by a majority of
the independent directors and disclosed to our stockholders in
the next quarterly report along with the justification for such
excess borrowing. Consistent with our advisors approach
toward the moderate use of leverage, our board of directors has
adopted a policy to further limit our borrowings to 60% of the
greater of cost (before deducting depreciation or other non-cash
reserves) or fair market value of our gross assets, unless
excess borrowing is approved by a majority of the independent
directors and disclosed to our stockholders in the next
quarterly report along with a justification for such excess
borrowing. For example, our independent directors may find that
we are justified in exceeding these limitations on borrowings
during the offering stage, as we will be in the process of
raising our equity capital to build our portfolio. Higher debt
levels during the offering stage may enable us to acquire
properties earlier than we might otherwise be able to acquire
them if we were to adhere to these debt levels, which could
yield returns that are accretive to the portfolio. In addition,
as we will be in the offering stage, more equity could be raised
in the future to reduce the debt levels to within the
limitations described herein. After we have acquired a
substantial portfolio, our advisor will target a leverage of 50%
of the greater of cost (before deducting depreciation or other
non cash reserves) or fair market value of our gross assets.
Our advisor will use its best efforts to obtain financing on the
most favorable terms available to us. Our advisor will have
substantial discretion with respect to the financing we obtain,
subject to our borrowing policies, which will be approved by our
board of directors. Lenders may have recourse to assets not
securing the repayment of the indebtedness. Our advisor may
refinance properties during the term of a loan only in limited
circumstances, such as when a decline in interest rates makes it
beneficial to prepay an existing mortgage, when an existing
mortgage matures or if an attractive investment becomes
available and the proceeds from the refinancing can be used to
purchase such investment. The benefits of the refinancing may
include increased cash flow resulting from reduced debt service
requirements and an increase in property ownership if some
refinancing proceeds are reinvested in real estate.
Our ability to increase our diversification through borrowing
may be adversely impacted if banks and other lending
institutions reduce the amount of funds available for loans
secured by real estate. When interest rates on mortgage loans
are high or financing is otherwise unavailable on a timely
basis, we may purchase properties for cash with the intention of
obtaining a mortgage loan for a portion of the purchase price at
a later time. To the extent that we do not obtain mortgage loans
on our properties, our ability to acquire additional properties
will be restricted and we may not be able to adequately
diversify our portfolio.
We may not borrow money from any of our directors or from our
advisor or its affiliates unless such loan is approved by a
majority of the directors not otherwise interested in the
transaction (including a majority of the independent directors)
as fair, competitive and commercially reasonable and no less
favorable to us than a comparable loan between unaffiliated
parties.
Disposition
Policies
We intend to hold each property we acquire for an extended
period, generally in excess of seven years. Holding periods for
other real estate-related investments may vary. Regardless of
intended holding periods, circumstances might arise that could
cause us to determine to sell an asset before the end of the
expected holding period if we believe the sale of the asset
would be in the best interests of our stockholders. The
determination of whether a particular asset should be sold or
otherwise disposed of will be made after consideration of
relevant factors, including prevailing and projected economic
conditions, current tenant rolls
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and tenant creditworthiness, whether we could apply the proceeds
from the sale of the asset to make other investments, whether
disposition of the asset would increase cash flow, and whether
the sale of the asset would be a prohibited transaction under
the Internal Revenue Code or otherwise impact our status as a
REIT. The selling price of a property that is net leased will be
determined in large part by the amount of rent payable under the
lease. If a tenant has a repurchase option at a formula price,
we may be limited in realizing any appreciation. In connection
with our sales of properties we may lend the purchaser all or a
portion of the purchase price. In these instances, our taxable
income may exceed the cash received in the sale.
Investment
Limitations, in General
Our charter places numerous limitations on us with respect to
the manner in which we may invest our funds or issue securities.
Until we list our shares on a national securities exchange, we:
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will not borrow in excess of 75% of the aggregate cost (or 300%
of net assets) (before deducting depreciation or other non-cash
reserves) of our gross assets, unless excess borrowing is
approved by a majority of our independent directors and
disclosed to our stockholders in our next quarterly report along
with the justification for such excess borrowing (although our
board of directors has adopted a policy to reduce this limit
from 75% to 60%);
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will not make investments in unimproved property or mortgage
loans on unimproved property in excess of 10% of our total
assets;
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will not make or invest in mortgage loans unless an appraisal is
obtained concerning the underlying property, except for those
mortgage loans insured or guaranteed by a government or
government agency;
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will not make or invest in mortgage loans, including
construction loans, on any one property if the aggregate amount
of all mortgage loans on such property would exceed an amount
equal to 85% of the appraised value of such property unless
substantial justification exists for exceeding such limit
because of the presence of other underwriting criteria;
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will not invest in indebtedness secured by a mortgage on real
property that is subordinate to the lien or other indebtedness
of our advisor, any director, our sponsor or any of our
affiliates;
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will not invest in real estate contracts of sale, otherwise
known as land sale contracts, unless the contract is in
recordable form and is appropriately recorded in the chain of
title;
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will not invest in commodities or commodity futures contracts,
except for futures contracts when used solely for the purpose of
hedging in connection with our ordinary business of investing in
real estate assets and mortgages;
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will not issue equity securities on a deferred payment basis or
other similar arrangement;
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will not issue debt securities in the absence of adequate cash
flow to cover debt service;
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will not issue shares that are assessable after we have received
the consideration for which our board of directors authorized
their issuance;
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will not issue equity securities redeemable solely at the option
of the holder (which restriction has no effect on our share
redemption program or the ability of our operating partnership
to issue redeemable partnership interests);
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will not issue options or warrants to our advisor, our
directors, our sponsor or any of their respective affiliates
except on the same terms as such options or warrants are sold to
the general public and provided that such options or warrants do
not exceed ten percent of our outstanding shares on the date of
grant;
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will not make any investment that we believe will be
inconsistent with our objectives of remaining qualified as a
REIT unless and until our board of directors determines, in its
sole discretion, that REIT qualification is not in our best
interests;
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will not invest in indebtedness secured by a mortgage on real
property which is subordinate to the lien of other indebtedness,
except where the amount of the subordinated debt, plus the
amount of the senior debt, does not exceed 90% of the appraised
value of such property, if after giving effect thereto, the
value of all such investments of our company (as shown on our
books in accordance with generally accepted accounting
principles, after all reasonable reserves but before provision
for depreciation) would not then exceed 25% of our tangible
assets (and the value of all investments in this type of
subordinated debt will be limited to 10% of our tangible assets);
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will not engage in securities trading, or engage in the business
of underwriting or the agency distribution of securities issued
by other persons;
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will not acquire interests in any entity holding investments or
engaging in activities prohibited by Article IX of our
charter, except for investments in which we hold a
non-controlling interest or investments in publicly-traded
entities; and
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will continually review our investment activity to ensure that
we are not classified as an investment company under
the Investment Company Act.
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In addition, our charter includes many other investment
limitations in connection with transactions with affiliated
entities or persons, which limitations are described in the
Conflicts of Interest section of this prospectus.
Our charter also includes restrictions on
roll-up
transactions, which are described under the Description of
Shares section of this prospectus.
Investment
Limitations to Avoid Registration as an Investment
Company
We intend to conduct our operations, and the operations of our
operating partnership, and any other subsidiaries, so that no
such entity meets the definition of an investment
company under Section 3(a)(1) of the Investment
Company Act. Under the Investment Company Act, in relevant part,
a company is an investment company if:
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pursuant to Section 3(a)(1)(A), it is, or holds itself out
as being, engaged primarily, or proposes to engage primarily, in
the business of investing, reinvesting or trading in
securities; or
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pursuant to Section 3(a)(1)(C), it is engaged, or proposes
to engage, in the business of investing, reinvesting, owning,
holding or trading in securities and owns or proposes to acquire
investment securities having a value exceeding 40%
of the value of its total assets (exclusive of U.S. government
securities and cash items) on an unconsolidated basis (the 40%
test). Investment securities excludes
U.S. Government securities and securities of majority-owned
subsidiaries that are not themselves investment companies and
are not relying on the exception from the definition of
investment company under Section 3(c)(1) or
Section 3(c)(7) of the Investment Company Act.
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We intend to acquire a diversified portfolio of income-producing
real estate assets; however, our portfolio may include, to a
much lesser extent, other real estate-related investments. We
also may acquire real estate assets through investments in joint
venture entities, including joint venture entities in which we
may not own a controlling interest. We anticipate that our
assets generally will be held in wholly and majority-owned
subsidiaries of the company, each formed to hold a particular
asset. We intend to monitor our operations and our assets on an
ongoing basis in order to ensure that neither we, nor any of our
subsidiaries, meet the definition of investment
company under Section 3(a)(1) of the Investment
Company Act.
We believe that neither we nor our operating partnership will be
considered investment companies under Section 3(a)(1)(A) of
the Investment Company Act because neither of these entities
will engage primarily or hold themselves out as being engaged
primarily in the business of investing, reinvesting or trading
in
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securities. Rather, we, through our operating partnership, will
be primarily engaged in non-investment company businesses
related to real estate. Consequently, we expect that we and our
operating partnership will be able to conduct our respective
operations such that neither entity will be required to register
as an investment company under the Investment Company Act.
In addition, because we are organized as a holding company that
will conduct its business primarily through our operating
partnership, which in turn is a holding company that will
conduct its business through its subsidiaries, we intend to
conduct our operations, and the operations of our operating
partnership and any other subsidiary, so that we will not meet
the 40% test under Section 3(a)(1)(C) of the Investment
Company Act.
In order for us to not meet the definition of an
investment company and avoid regulation under the
Investment Company Act, we must engage primarily in the business
of buying real estate, and these investments must be made within
a year after the offering ends. If we are unable to invest a
significant portion of the proceeds of this offering in
properties within one year of the termination of the offering,
we may avoid being required to register as an investment company
by temporarily investing any unused proceeds in certificates of
deposit or other cash items with low returns. This would reduce
the cash available for distribution to investors and possibly
lower your returns.
To avoid meeting the definition of an investment
company under Section 3(a)(1) of the Investment
Company Act, we may be unable to sell assets we would otherwise
want to sell and may need to sell assets we would otherwise wish
to retain. Similarly, we may have to acquire additional income
or loss generating assets that we might not otherwise have
acquired or may have to forgo opportunities to acquire interests
in companies that we would otherwise want to acquire and would
be important to our investment strategy. In addition, a change
in the value of any of our assets could negatively affect our
ability to avoid being required to register as an investment
company. If we were required to register as an investment
company but failed to do so, we would be prohibited from
engaging in our business, and criminal and civil actions could
be brought against us. In addition, our contracts would be
unenforceable unless a court were to require enforcement, and a
court could appoint a receiver to take control of us and
liquidate our business.
If we are required to register as an investment company under
the Investment Company Act, we would become subject to
substantial regulation with respect to our capital structure
(including our ability to use borrowings), management,
operations, transactions with affiliated persons (as defined in
the Investment Company Act), and portfolio composition,
including restrictions with respect to diversification and
industry concentration and other matters. Compliance with the
Investment Company Act would, accordingly, limit our ability to
make certain investments and require us to significantly
restructure our business plan.
Change in
Investment Policies
Our charter requires that our independent directors review our
investment policies at least annually to determine that the
policies we follow are in the best interests of our
stockholders. Each determination and the basis therefor shall be
set forth in the minutes of the meetings of our board of
directors. The methods of implementing our investment policies
also may vary as new real estate development trends emerge and
new investment techniques are developed.
Generally, our board of directors may revise our investment
policies without the concurrence of our stockholders. However,
our board of directors will not amend our charter, including any
investment policies that are provided in our charter, without
the concurrence of a majority of the outstanding shares, except
for amendments that do not adversely affect the rights,
preferences and privileges of our stockholders.
Real
Property Investments
As of the date of this prospectus, we have not acquired or
contracted to acquire any specific real properties or other real
estate-related investments. Our advisor and its affiliates are
continually evaluating various potential property investments
and engaging in discussions and negotiations with sellers,
developers
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and potential tenants regarding the purchase and development of
properties. While this offering is pending, if we believe that a
reasonable probability exists that we will acquire a specific
property, this prospectus will be supplemented to disclose the
negotiations and pending acquisition of such property. We expect
that this will normally occur upon the signing of a purchase
agreement for the acquisition of a specific property, but may
occur before or after such signing or upon the satisfaction or
expiration of major contingencies in any such purchase
agreement, depending on the particular circumstances surrounding
each potential investment. A supplement to this prospectus will
describe any improvements proposed to be constructed upon the
respective real property and other information that we consider
appropriate for an understanding of the transaction. Further
data will be made available after any pending acquisition is
consummated, also by means of a supplement to this prospectus,
if appropriate. You should understand that the disclosure of any
proposed acquisition cannot be relied upon as an assurance that
we will ultimately consummate such acquisition or that the
information provided concerning the proposed acquisition will
not change prior to any actual purchase.
We intend to obtain adequate insurance coverage for all
properties that we acquire.
Dilution
of the Net Tangible Book Value of Our Shares
Our net tangible book value per share is calculated as total
book value of assets minus total book value of liabilities,
divided by the total number of shares of common stock
outstanding. Net tangible book value assumes that the value of
real estate assets diminishes predictably over time, as shown
through the depreciation and amortization of real estate
investments, while historically real estate values have risen or
fallen with market conditions. Net tangible book value is used
generally as a conservative measure of net worth that we do not
believe will reflect the estimated value of our assets upon the
sale of our company, an orderly liquidation of the real estate
portfolio we intend to acquire or the listing of our shares of
common stock for trading on a national securities exchange
consistent with our potential exit strategies. However, after we
begin acquiring real estate assets, net tangible book value will
reflect certain dilution in value of our common stock from the
issue price as a result of (i) accumulated depreciation and
amortization of real estate investments, (ii) fees and
expenses paid in connection with our public offering, including
selling commissions and dealer manager fees, (iii) the fees
and expenses paid to our advisor and third parties in connection
with the acquisition of our assets and related financing, and
(iv) the funding of distributions from sources other than
cash flow from operations, if any. Accordingly, investors in
this offering will experience immediate dilution of the net
tangible book value per share of our common stock from the per
share offering price.
Our offering price was not established on an independent basis
and bears no relationship to the net value of our assets.
Further, even without depreciation in the value of our assets,
the other factors described above with respect to the dilution
in the value of our common stock are likely to cause our
offering price to be higher than the amount you would receive
per share if we were to liquidate after we break escrow, but
before the end of the offering period.
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MANAGEMENTS
DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis should be read in
conjunction with our accompanying consolidated financial
statements and notes thereto.
Overview
We were formed on July 27, 2010, and we intend to qualify
as a REIT beginning with the taxable year ending December 31 for
the first year in which we commence material operations. We
intend to use substantially all of the net proceeds from this
offering to acquire and operate a diversified portfolio of
retail and other income-producing commercial properties, which
are leased to creditworthy tenants under long-term leases. We
expect that most of the properties will be strategically located
throughout the United States and U.S. protectorates and
subject to net leases, whereby the tenant will be
obligated to pay for all or most of the expenses of maintaining
the property (including real estate taxes, special assessments
and sales and use taxes, utilities, insurance, building repairs
and common area maintenance related to the property). We intend
to hold each property we acquire for an extended period, of more
than seven years. As of the date of this prospectus, we have not
yet commenced operations or entered into any arrangements to
acquire any specific investments. The number of assets we
acquire will depend upon the number of shares sold in this
offering and the resulting amount of the net proceeds available
for investment, as well as our ability to arrange debt
financing. See the Risk Factors section of this
prospectus.
Application
of Critical Accounting Policies
Our accounting policies have been established to conform with
GAAP. 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.
Below are the accounting policies we believe will be critical
once we commence principal operations. We consider these
policies to be critical because they require our management to
use judgment in the application of accounting policies,
including making estimates and assumptions. These judgments
affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the dates of
the financial statements and the reported amounts of revenue and
expenses during the reporting periods. If managements
judgment or interpretation of the facts and circumstances
relating to various transactions had been different, it is
possible that different accounting policies would have been
applied, thus resulting in a different presentation of the
financial statements. Additionally, other companies may utilize
different estimates that may impact comparability of our results
of operations to those of companies in similar businesses.
Investment
in and Valuation of Real Estate and Related Assets
We will be required to make subjective assessments as to the
useful lives of our depreciable assets. We consider the period
of future benefit of the asset to determine the appropriate
useful life of each asset. Real estate assets will be stated at
cost, less accumulated depreciation and amortization. Amounts
capitalized to real estate assets consist of the cost of
acquisition, excluding acquisition related expenses,
construction and any tenant improvements, major improvements and
betterments that extend the useful life of the related asset and
leasing costs. All repairs and maintenance will be expensed as
incurred.
Assets, other than land, will be depreciated or amortized on a
straight line basis. The estimated useful lives of our assets by
class are generally as follows:
|
|
|
Building
|
|
40 years
|
Tenant improvements
|
|
Lesser of useful life or lease term
|
Intangible lease assets
|
|
Lesser of useful life or lease term
|
104
We will continually monitor events and changes in circumstances
that could indicate that the carrying amounts of our real estate
and related intangible assets may not be recoverable. Impairment
indicators that we will consider include, but are not limited
to, bankruptcy or other credit concerns of a propertys
major tenant, such as a history of late payments, rental
concessions, a significant decrease in a propertys
revenues due to circumstances such as lease terminations,
vacancies, co-tenancy clauses or reduced lease rates. When
indicators of potential impairment are present, we will assess
the recoverability of the assets by determining whether the
carrying value of the assets will be recovered through the
undiscounted future operating cash flows expected from the use
of the assets and their eventual disposition. In the event that
such expected undiscounted future cash flows do not exceed the
carrying value, we will reduce the real estate and related
intangible assets and liabilities to their fair value and
recognize an impairment loss.
Projections of expected future cash flows will require us to use
estimates such as current market rental rates on vacant
properties, future market rental income amounts subsequent to
the expiration of lease agreements, property operating expenses,
terminal capitalization and discount rates, the number of months
it takes to re-lease a property, required tenant improvements
and the number of years the property is held for investment. The
use of alternative assumptions in the future cash flow analysis
would result in a different assessment of the propertys
future cash flow and fair value and a different conclusion
regarding the existence of an impairment, the extent of such
loss, if any, as well as the carrying value of our real estate
and related intangible assets.
When a real estate asset is identified by management as held for
sale, we will cease depreciation of the asset and estimate the
sales price, net of selling costs. If, in managements
opinion, the net sales price of the asset is less than the net
book value of the asset, an adjustment to the carrying value
would be recorded to reflect the estimated fair value of the
property net of selling costs.
Allocation
of Purchase Price of Real Estate and Related
Assets
Upon the acquisition of real properties, we will allocate the
purchase price of such properties to acquired tangible assets,
consisting of land and building, and identified intangible
assets and liabilities, consisting of the value of above market
and below market leases and the value of in-place leases, based
in each case on their fair values. We will utilize independent
appraisals to assist in the determination of the fair values of
the tangible assets of an acquired property (which includes land
and building). We will obtain an independent appraisal for each
real property acquisition. The information in the appraisal,
along with any additional information available to us, will be
used in estimating the amount of the purchase price that is
allocated to land. Other information in the appraisal, such as
building value and market rents, may be used by us in estimating
the allocation of purchase price to the building and to lease
intangibles. The appraisal firm will have no involvement in
managements allocation decisions other than providing this
market information.
The fair values of above market and below market in-place leases
will be recorded based on the present value (using an interest
rate which reflects the risks associated with the leases
acquired) of the difference between (i) the contractual
amounts to be paid pursuant to the in-place leases and
(ii) an estimate of fair market lease rates for the
corresponding in-place leases, which will generally be obtained
from independent appraisals, measured over a period equal to the
non-cancelable term of the lease including any bargain renewal
periods, with respect to a below market lease. The above market
and below market lease values will be capitalized as intangible
lease assets or liabilities. Above market lease values will be
amortized as an adjustment of rental income over the lesser of
the useful life or the remaining terms of the respective leases.
Below market leases will be amortized as an adjustment of rental
income over the remaining terms of the respective leases,
including any bargain renewal periods. If a lease were to be
terminated prior to its stated expiration, all unamortized
amounts of above market and below market in-place lease values
relating to that lease would be recorded as an adjustment to
rental income.
The fair values of in-place leases will include direct costs
associated with obtaining a new tenant, and opportunity costs
associated with lost rentals which are avoided by acquiring an
in-place lease. Direct costs associated with obtaining a new
tenant may include commissions, tenant improvements, and other
direct costs
105
and are estimated, in part, by utilizing information obtained
from independent appraisals and managements consideration
of current market costs to execute a similar lease. These direct
costs will be included in intangible lease assets in our
consolidated balance sheets and will be amortized to expense
over the lesser of the useful life or the remaining terms of the
respective leases. The value of opportunity costs will be
calculated using the contractual amounts to be paid pursuant to
the in-place leases over a market absorption period for a
similar lease. These intangibles will be included in intangible
lease assets in our consolidated balance sheet and will be
amortized to expense over the lesser of the useful life or the
remaining term of the respective leases. If a lease were to be
terminated prior to its stated expiration, all unamortized
amounts of in-place lease assets relating to that lease would be
expensed.
The determination of the fair values of the assets and
liabilities acquired will require the use of significant
assumptions with regard to the current market rental rates,
rental growth rates, discount and capitalization rates, interest
rates and other variables. The use of inappropriate estimates
would result in an incorrect assessment of our purchase price
allocations, which could impact the amount of our reported net
income.
Revenue
Recognition
Upon the acquisition of real estate, we expect certain
properties will have leases where minimum rent payments increase
during the term of the lease. We will record rental revenue for
the full term of each lease on a straight-line basis. When we
acquire a property, the term of existing leases is considered to
commence as of the acquisition date for the purposes of this
calculation. We defer the recognition of contingent rental
income, such as percentage rents, until the specific target that
triggers the contingent rental income is achieved. Expected
reimbursements from tenants for recoverable real estate taxes
and operating expenses will be included in rental income in the
period the related costs are incurred.
Real
Estate Loans Receivable
Mortgage notes receivable will consist of loans we acquire,
which are secured by real estate. Mortgage notes receivable will
be recorded at stated principal amounts net of any discount or
premium and deferred loan origination costs or fees. The related
discounts or premiums on mortgage notes receivable purchased
will be amortized or accreted over the life of the related
mortgage receivable. We will defer certain loan origination and
commitment fees, and amortize them as an adjustment of the
mortgage notes receivables yield over the term of the
related mortgage receivable. We will evaluate the collectability
of both interest and principal on each mortgage note receivable
to determine whether it is collectible. A mortgage note
receivable will be considered to be impaired, when based upon
current information and events, it is probable that we will be
unable to collect all amounts due according to the existing
contractual terms. When a mortgage note receivable is considered
to be impaired, the amount of loss will be calculated as the
amount by which the recorded investment exceeds the greater of
the value determined by discounting the expected future cash
flows at the mortgage note receivables effective interest
rate or the value of the underlying collateral if the mortgage
note receivable is collateralized. Interest income on performing
mortgage note receivable will be accrued as earned. Interest
income on impaired mortgage notes receivable will be recognized
on a cash basis.
Income
Taxes
We intend to make an election under Section 856(c) of the
Internal Revenue Code to be taxed as a REIT, beginning with the
taxable year ending December 31 for the first year in which we
commence material operations. If we qualify as a REIT for
federal income tax purposes, we generally will not be subject to
federal income tax on income that we distribute to our
stockholders. If we make an election to be taxed as a REIT and
later fail to qualify as a REIT in any taxable year and certain
relief provisions do not apply, we will be subject to federal
income tax on our taxable income at regular corporate rates and
will not be permitted to qualify for treatment as a REIT for
federal income tax purposes for four years following the year in
which our qualification is denied. Such an event could
materially and adversely affect our net income. However, we
106
believe that we are organized and will operate in a manner that
will enable us to qualify for treatment as a REIT for federal
income tax purposes during the year ending December 31 for the
first year in which we commence material operations, and we
intend to continue to operate so as to remain qualified as a
REIT for federal income tax purposes. Even if we qualify for
taxation as a REIT, we may be subject to certain state and local
taxes on our income and property, and federal income and excise
taxes on our undistributed income.
Results
of Operations
As of the date of this prospectus, we have not commenced any
significant operations because we are in our organization stage.
We will not commence any significant operations until we have
issued at least $2,500,000 in shares of our common stock
pursuant to this offering. Our management is not aware of any
material trends or uncertainties, other than national economic
conditions affecting real estate generally, that may reasonably
be expected to have a material impact, favorable or unfavorable,
on revenues or income from the acquisition and operation of real
properties and real estate-related investments, other than those
referred to in this prospectus.
Liquidity
and Capital Resources
General
We will not commence any significant operations until we have
issued at least $2,500,000 in shares of our common stock
pursuant to this offering. Our principal demands for funds will
be for real estate and real estate-related investments, for the
payment of operating expenses and distributions, for the payment
of interest on any outstanding indebtedness and to satisfy
redemption requests. Generally, we expect to meet cash needs for
items other than acquisitions from our cash flow from
operations, and we expect to meet cash needs for acquisitions
from the net proceeds of this offering and from financings,
which may include potential borrowings under line of credit
agreements. We currently have not entered into any line of
credit agreements.
There may be a delay between the sale of our shares and the
purchase of properties or other investments, which could result
in a delay in our ability to make distributions to our
stockholders. Some or all of our distributions will be paid from
other sources, such as from the proceeds of this offering, cash
advances to us by our advisor, cash resulting from a waiver of
advisory fees and borrowings secured by our assets in
anticipation of future operating cash flow until such time as we
have sufficient cash flow from operations to fund fully the
payment of distributions. We expect to have little, if any, cash
flow from operations available for distribution until we make
substantial investments. In addition, to the extent our
investments are in development or redevelopment projects or in
other properties that have significant capital requirements
and/or
delays in their ability to generate income, our ability to make
distributions may be negatively impacted, especially during our
early periods of operation.
We intend to borrow money to acquire properties and make other
investments. There is no limitation on the amount we may borrow
against any single improved property. Our borrowings will not
exceed 300% of our net assets as of the date of any borrowing,
which is the maximum level of indebtedness permitted under the
NASAA REIT Guidelines; however, we may exceed that limit if
approved by a majority of our independent directors. Our board
of directors has adopted a policy to further limit our
borrowings to 60% of the greater of cost (before deducting
depreciation or other non-cash reserves) or fair market value of
our gross assets, unless excess borrowing is approved by a
majority of the independent directors and disclosed to our
stockholders in the next quarterly report along with the
justification for such excess borrowing. We expect that during
the period of this offering we will request that our independent
directors approve borrowings in excess of these limitations
since we will then be in the process of raising our equity
capital to acquire our portfolio.
Our advisor may, but is not required to, establish capital
reserves from gross offering proceeds, out of cash flow
generated by operating properties and other investments or out
of non-liquidating net sale proceeds from the sale of our
properties and other investments. Capital reserves are typically
utilized for non-operating
107
expenses such as tenant improvements, leasing commissions and
major capital expenditures. Alternatively, a lender may require
its own formula for escrow of capital reserves.
Potential future sources of capital include proceeds from
secured or unsecured financings from banks or other lenders,
proceeds from the sale of assets and undistributed funds from
operations. If necessary, we may use financings or other sources
of capital in the event of unforeseen significant capital
expenditures.
Contractual
Obligations
We had no contractual obligations or off balance sheet
arrangements as of December 31, 2011.
Related-Party
Transactions and Agreements
We intend to enter into agreements with CR IV Advisors and its
affiliates, whereby we will agree to pay certain fees to, or
reimburse certain expenses of, CR IV Advisors or its affiliates
for acquisition fees, disposition fees, organization and
offering costs, sales commissions, dealer manager fees, advisory
fees and reimbursement of operating costs.
Quantitative
and Qualitative Disclosures about Market Risks
We will be exposed to interest rate changes primarily as a
result of long-term debt used to acquire properties and make
loans and other permitted investments. We intend to manage our
interest rate risk by limiting the impact of interest rate
changes on earnings and cash flows and to lower overall
borrowing costs. To achieve these objectives, we expect to
borrow primarily at fixed rates or variable rates with the
lowest margins available and, in some cases, with the ability to
convert variable rates to fixed rates. With regard to variable
rate financing, we will assess interest rate cash flow risk by
continually identifying and monitoring changes in interest rate
exposures that may adversely impact expected future cash flows
and by evaluating hedging opportunities.
108
PRIOR
PERFORMANCE SUMMARY
Prior
Investment Programs
The information presented in this section and in the Prior
Performance Tables attached to this prospectus provides relevant
summary information on the historical experience of the real
estate programs managed over the last ten years by our sponsor,
Cole Real Estate Investments, including certain officers and
directors of our advisor. The prior performance of the programs
previously sponsored by Cole Real Estate Investments is not
necessarily indicative of the results that we will achieve. For
example, most of the prior programs were privately offered and
did not bear a fee structure similar to ours, or the additional
costs associated with being a publicly held entity. Therefore,
you should not assume that you will experience returns
comparable to those experienced by investors in prior real
estate programs sponsored by Cole Real Estate Investments.
We intend to conduct this offering in conjunction with future
offerings by one or more public and private real estate entities
sponsored by Cole Real Estate Investments. To the extent that
such entities have the same or similar objectives as ours or
involve similar or nearby properties, such entities may be in
competition with the properties acquired by us. See the
Conflicts of Interest section of this prospectus for
additional information.
The Prior Performance Tables set forth information as of the
dates indicated regarding certain of these prior programs as to
(1) experience in raising and investing funds (Table I);
(2) compensation to the sponsor and its affiliates (Table
II); (3) annual operating results of prior real estate
programs (Table III); (4) results of completed programs
(Table IV); and (5) results of sales or disposals of
properties (Table V). Additionally, Table VI, which is contained
in Part II of the registration statement for this offering
and which is not part of the prospectus, contains certain
additional information relating to properties acquired by these
prior real estate programs. We will furnish copies of such
tables to any prospective investor upon request and without
charge. The purpose of this prior performance information is to
enable you to evaluate accurately the experience of our advisor
and its affiliates in sponsoring like programs. The following
discussion is intended to summarize briefly the objectives and
performance of the prior real estate programs and to disclose
any material adverse business developments sustained by them. As
of December 31, 2010, approximately 98% of the prior real
estate programs had investment objectives similar to those of
this program, based on number of programs.
Summary
Information
Prior
Private Programs
During the period from January 1, 2001 to December 31,
2010, Cole Real Estate Investments sponsored 65 privately
offered programs, including six limited partnerships, four debt
offerings, 27 Delaware Statutory Trusts, 26
tenant-in-common
programs, and CCPT I, a privately offered REIT, each with
investment objectives similar to this program, and one limited
partnership that did not have similar investment objectives to
this program. As of December 31, 2010, such privately
offered prior programs have raised approximately
$674.9 million from approximately 6,300 investors. For more
detailed information about the experience of our affiliates in
raising and investing funds for offerings initiated over the
last three years and compensation paid to the sponsors of these
programs, see Tables I and II of the Prior Performance
Tables.
With respect to the six privately offered limited partnerships
sponsored by Cole Real Estate Investments during the period from
January 1, 2001 to December 31, 2010, which had
similar investment objectives to this program, affiliates of our
advisor have been general partners in each limited partnership.
In total, limited partnership interests were sold to
approximately 1,800 investors, raising approximately
$86.6 million of capital. The foregoing partnerships have
purchased in the aggregate 29 properties for an approximate
acquisition cost of $204.0 million, of which approximately
57.4% is attributable to 23 single-tenant commercial properties,
40.0% is attributable to three shopping centers, 1.3% is
attributable to one data center and 1.3% is attributable to two
unimproved or partially-improved land parcels intended for
high-rise/data center development. Four of the properties were
located in the Phoenix metropolitan area, and 25 were located
109
in the following states: three in Tennessee; three in Oklahoma;
two in California; two in Florida; two in Ohio; and one each in
Alabama, Indiana, Iowa, Kentucky, Michigan, Missouri, Nevada,
New Mexico, New York, South Carolina, Texas, Virginia and
Washington. The properties have been purchased on terms varying
from all cash to market rate financing. All of the 29 properties
have been sold and each of the limited partnerships has
completed operations. See Table IV of the Prior Performance
Tables for information on the limited partnerships that
completed operations since January 1, 2006.
Five of the six privately offered limited partnerships, Cole
Credit Property Fund I, LP (CCPF), Cole Credit Property
Fund II, LP (CCPF II), Cole Santa Fe Investors, LP,
Cole Desert Palms Power Center, LP and Cole Boulevard Square
Investors, LP, achieved average annual returns ranging from
approximately 8.07% to approximately 15.36% during the life of
the respective partnership through the date of liquidation.
Another privately offered program, Cole Southwest Opportunity
Fund, LP, completed development of a data facility in Phoenix,
Arizona in August 2001 through a joint venture, and on
April 6, 2005, the Phoenix facility was sold for
$16.3 million, resulting in a return to investors of 83% of
their original investment. See Tables III and IV of the
Prior Performance Tables for additional information regarding
these prior private programs that completed operations since
January 2006.
Two of the privately offered limited partnerships, CCPF and CCPF
II, disposed an aggregate of 22 properties each through a
sale to CCPT II for $121.3 million. In accordance with CCPT
IIs charter, CCPT IIs board of directors, including
all of its independent directors, not otherwise interested in
the transactions, approved these purchases as being fair and
reasonable to CCPT II at a price in excess of the cost paid by
the affiliated seller, and determined that there was substantial
justification for the excess cost. In addition, the limited
partners of CCPF and CCPF II approved the sales.
With respect to the one privately offered limited partnership
sponsored by Cole Real Estate Investments during the period from
January 1, 2001 to December 31, 2010, Cole Growth
Opportunity Fund I LP (CGOF), which did not have similar
investment objectives to this program, an affiliate of our
advisor serves as the general partner. Unlike the investment
approach of Coles other programs, which were designed to
provide current income through the payment of cash
distributions, CGOF is designed to invest in properties located
in high growth markets in the early stages of development, where
value added investment strategies could be implemented with the
objective of realizing appreciation through the sale or other
form of disposition of properties. As of December 31, 2010,
CGOF had raised approximately $26.3 million from
approximately 400 investors and owned directly, or through
investments in joint ventures, a total of four properties
including three properties in Arizona and one property in Nevada
for an aggregate cost of approximately $27.3 million
including development related costs. None of these properties
have been sold.
In addition to the partnerships described above, as of
December 31, 2010, affiliates of our advisor had issued an
aggregate of approximately $114.2 million in collateralized
senior notes through four privately offered debt programs and
had acquired an aggregate of 123 single-tenant retail
properties, 39 single-tenant commercial properties, three
multi-tenant retail properties and one land parcel in
37 states for an aggregate acquisition cost of
approximately $1.0 billion. The debt offerings are
considered to be prior programs, as proceeds were primarily used
to invest in single-tenant income-producing retail and
commercial properties. One of the primary purposes of the note
programs was to enable Cole Real Estate Investments to acquire
assets that might be suitable for its
tenant-in-common
program and Delaware Statutory Trust Program and for acquisition
by one of its equity programs pending such time as the
respective program had sufficient capital
and/or
corporate approval to acquire the asset. As of December 31,
2010, 162 of the properties had been sold, of which eight were
sold to CCPT I, one land parcel was sold to CGOF, 17 were
sold to CCPT II, six were sold to CCPT III and 130 were sold to
unrelated third parties. Of the 130 properties sold to unrelated
third parties, 26 were sold to investors in Cole Real Estate
Investments
tenant-in-common
program, 52 were sold to investors in Cole Real Estate
Investments Delaware Statutory Trust Program. On
April 28, 2006, an affiliate of our advisor redeemed at par
all of the approximately $28.0 million in collateralized
senior notes issued under the first debt offering. On
April 6, 2009, an affiliate of our advisor redeemed at par
all of the approximately $28.8 million in collateralized
senior notes issued under the second debt offering.
110
In addition, Cole Real Estate Investments offered properties to
Section 1031 exchange investors in the form of the sale of
tenant-in-common
ownership interests in such properties. As of December 31,
2010, aggregate ownership interests in 26 properties of
approximately $171.4 million had been sold in 26 private
offerings of properties located in 15 states. The value of
such
tenant-in-common
ownership interests was determined by the aggregate purchase
price, including acquisition costs, of the properties. In
addition, Cole Real Estate Investments offered properties
through a Delaware statutory trust program whereby beneficial
interests were offered in trusts that acquired real property. As
of December 31, 2010, aggregate ownership interests in 52
properties of approximately $176.1 million had been sold in
27 private offerings of properties located in 21 states.
The value of such beneficial interests was determined by the
aggregate purchase price, including acquisition costs, of the
real property acquired. Each of the programs described in this
paragraph were still in operation as of December 31, 2010
and have similar investment objectives to this program. See
Tables I and II of the Prior Performance Tables for
additional information regarding these programs.
On April 26, 2004, CCPT I commenced a private placement of
shares of its common stock for $10 per share, subject to certain
volume and other discounts. CCPT I completed the private
placement on September 16, 2005, after having raised
aggregate gross proceeds of approximately $100.3 million.
As of December 31, 2010, CCPT I had approximately 1,400
investors, and had acquired 42 single-tenant retail properties
located in 19 states for an aggregate acquisition cost of
approximately $199.1 million. CCPT I has similar investment
objectives to this program. CCPT I disclosed in its private
placement memorandum a targeted liquidity event by
February 1, 2016. Such targeted date has not yet occurred,
and CCPT I has not had a liquidity event. See the Prior
Performance Tables for additional information regarding this
program.
Upon written request, any potential investor may obtain, without
charge, the most recent annual report on
Form 10-K
filed with the Securities and Exchange Commission by CCPT I
within the last 24 months. For a reasonable fee, CCPT I
will provide copies of any exhibits to such
Form 10-K.
During the period from January 1, 2001 to December 31,
2010, the prior private programs purchased an aggregate of 232
properties located in 40 states. The table below gives
information about these properties by region.
|
|
|
|
|
|
|
|
|
|
|
Properties Purchased
|
|
|
|
|
|
|
% of Total
|
|
Location
|
|
Number
|
|
|
Purchase Price
|
|
|
South
|
|
|
112
|
|
|
|
42.2
|
%
|
Midwest
|
|
|
63
|
|
|
|
29.4
|
%
|
West
|
|
|
34
|
|
|
|
22.4
|
%
|
Northeast
|
|
|
23
|
|
|
|
6.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
232
|
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
Based on the aggregate purchase price of the 232 properties,
approximately 76.0% were single-tenant retail properties,
approximately 15.8% were multi-tenant retail properties,
approximately 7.0% were single-tenant commercial properties,
approximately 1.0% were land and approximately 0.2% were data
centers. The following table shows a breakdown of the aggregate
amount of the acquisition and development costs of the
properties purchased by the prior private real estate programs
of our affiliates as of December 31, 2010:
|
|
|
|
|
|
|
|
|
|
|
|
|
Type of Property
|
|
New
|
|
Used
|
|
Construction
|
|
Retail/Commercial
|
|
|
25.7
|
%
|
|
|
73.1
|
%
|
|
|
1.2
|
%
|
Land
|
|
|
|
|
|
|
100
|
%
|
|
|
|
|
Data Center
|
|
|
|
|
|
|
|
|
|
|
100
|
%
|
As of December 31, 2010, these private programs had sold
182, or 78.4% of the total 232 properties purchased, of which 39
properties were sold to CCPT II, six properties were sold to
CCPT III and 137 properties were sold to unrelated third
parties. Of the 137 properties sold to unrelated third parties,
26 properties sold to investors in Cole Real Estate
Investments
tenant-in-common
program and 52 properties
111
sold to investors in Cole Real Estate Investments Delaware
Statutory Trust Program. The original purchase price of the
properties that were sold was approximately $1.1 billion,
and the aggregate sales price of such properties was
approximately $1.2 billion. See Tables III, IV and V of the
Prior Performance Tables for more detailed information as to the
operating results of such programs whose offerings closed in the
last five years, results of such programs that have completed
their operations over the last five years and the sales or other
disposals of properties with investment objectives similar to
ours over the last three years.
During the three years ended December 31, 2010, the prior
private real estate programs purchased an aggregate of ten
properties located in seven states. The table below gives
information about these properties by region.
|
|
|
|
|
|
|
|
|
|
|
Properties Purchased
|
|
|
|
|
|
|
% of Total
|
|
Location
|
|
Number
|
|
|
Purchase Price
|
|
|
South
|
|
|
4
|
|
|
|
40.4
|
%
|
West
|
|
|
4
|
|
|
|
37.0
|
%
|
Midwest
|
|
|
2
|
|
|
|
22.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
10
|
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
Based on the aggregate purchase price of the ten properties,
approximately 63.0% were single-tenant retail properties,
approximately 22.0% were single-tenant commercial properties and
approximately 15.0% were land. A total of four of the properties
were purchased with a combination of offering proceeds and
mortgage notes payable and the remaining six properties were
purchased solely using offering proceeds.
Prior
Public Programs
Other than our company, Cole Real Estate Investments sponsored
two publicly offered REITs, CCPT II and CCPT III, during the
period from January 1, 2001 to December 31, 2010. CCPT
II and CCPT III each have similar investment objectives to this
program. As of December 31, 2010, CCPT II had raised
approximately $2.2 billion from approximately 41,000
investors and CCPT III had raised approximately
$2.5 billion from approximately 59,000 investors. For more
detailed information about the experience of our affiliates in
raising and investing funds for this public offering and
compensation paid to the sponsors of CCPT II and CCPT III, see
Tables I and II of the Prior Performance Tables.
On June 27, 2005, CCPT II commenced an initial public
offering of shares of its common stock for $10 per share,
subject to certain volume and other discounts, in a primary
offering, and for $9.50 per share pursuant to a distribution
reinvestment plan. CCPT II terminated its initial public
offering on May 22, 2007 and commenced a follow-on public
offering on May 23, 2007. Pursuant to the follow-on
offering, CCPT II offered and sold shares of its common stock
for $10 per share, subject to certain volume and other
discounts, in a primary offering, and for $9.50 per share
pursuant to its distribution reinvestment plan. CCPT II
terminated its follow-on offering on January 2, 2009,
although it continues to offer and sell shares of its common
stock to existing CCPT II stockholders pursuant to its
distribution reinvestment plan. As of December 31, 2010,
CCPT II had raised approximately $2.2 billion from
approximately 41,000 investors and had acquired 412
single-tenant retail properties, 292 single-tenant commercial
properties, and 21 multi-tenant retail properties in an
aggregate of 45 states and the U.S. Virgin Islands for
an aggregate acquisition cost of approximately
$3.2 billion. CCPT II also acquired indirect interests in
one multi-tenant retail property through a joint venture for
approximately $53.7 million and in a ten-property storage
facility portfolio through a joint venture for approximately
$70.7 million. CCPT II disclosed in its prospectus a
targeted liquidity event by May 22, 2017. On June 28,
2011, CCPT II disclosed that Cole Real Estate Investments is
actively exploring options to successfully exit CCPT IIs
portfolio within the next 12 months, and that the potential
exit strategies it is evaluating include, but are not limited
to, a sale of the portfolio or a listing of the portfolio on a
public stock exchange. Such targeted date has not yet occurred,
and CCPT II has not had a liquidity event.
112
On October 1, 2008, CCPT III commenced an initial public
offering of shares of its common stock for $10.00 per share,
subject to certain volume and other discounts, in a primary
offering, and for $9.50 per share pursuant to a distribution
reinvestment plan. CCPT III terminated its initial public
offering on October 1, 2010 and commenced a follow-on
public offering on October 1, 2010. Pursuant to the
follow-on offering, CCPT III is offering and selling shares
of its common stock for $10.00 per share, subject to certain
volume and other discounts, in a primary offering, and for $9.50
per share pursuant to its distribution reinvestment plan.
CCPT IIIs follow-on offering is ongoing, and it also
continues to offer and sell shares of its common stock to
existing CCPT III stockholders pursuant to its distribution
reinvestment plan. As of December 31, 2010, CCPT III
had raised approximately $2.5 billion from approximately
59,000 investors and had acquired 332 single-tenant retail
properties, 94 single-tenant commercial properties, and 21
multi-tenant retail properties in an aggregate of 39 states
for an aggregate acquisition cost of approximately
$2.9 billion. In addition, through three joint venture
arrangements, as of December 31, 2010, CCPT III had
interests in seven properties comprising 909,000 gross
rentable square feet of commercial space and an interest in a
land parcel under development comprising 213,000 square
feet of land. CCPT III disclosed in its prospectus that, while
it does not have a fixed liquidity event date, if it does not
list its shares of common stock on a national securities
exchange by October 1, 2020, CCPT IIIs charter
requires that it either seek stockholder approval of an
extension or elimination of the listing deadline or stockholder
approval of the liquidation and dissolution of CCPT III. If CCPT
III does not obtain either such stockholder approval, its
charter does not require a liquidity event and CCPT III could
continue to operate as before.
The offering price for CCPT IIIs shares of common stock is
not based on the expected book value or expected net asset value
of CCPT IIIs proposed investments, or its expected
operating cash flows. Although CCPT IIIs board of
directors may do so at any time in its discretion, it is not
anticipated that CCPT IIIs board of directors will
undertake a process for estimating the per share value of CCPT
IIIs common stock during the pendency of the CCPT III
follow-on offering, but CCPT IIIs board of directors
is expected to do so within the
18-month
period following the termination of the follow-on offering.
During the period from January 1, 2001 to December 31,
2010, the prior public real estate programs purchased 1,172
properties located in 45 states and the U.S. Virgin
Islands. The table below gives information about these
properties by region.
|
|
|
|
|
|
|
|
|
|
|
Properties Purchased
|
|
|
|
|
|
|
% of Total
|
|
|
|
|
|
|
Purchase
|
|
Location
|
|
Number
|
|
|
Price
|
|
|
South
|
|
|
674
|
|
|
|
48.0
|
%
|
Midwest
|
|
|
307
|
|
|
|
24.6
|
%
|
West
|
|
|
111
|
|
|
|
19.7
|
%
|
Northeast
|
|
|
79
|
|
|
|
7.6
|
%
|
U.S. Virgin Islands
|
|
|
1
|
|
|
|
0.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
1,172
|
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
Based on the aggregate purchase price of the 1,172 properties,
approximately 53.9% were single-tenant retail properties,
approximately 22.4% were single-tenant commercial properties and
approximately 23.7% were multi-tenant retail properties.
The following table shows a breakdown of the aggregate amount of
the acquisition and development costs of the properties
purchased by the prior public real estate programs of our
affiliates as of December 31, 2010:
|
|
|
|
|
|
|
|
|
|
|
|
|
Type of Property
|
|
New
|
|
Used
|
|
Construction
|
|
Retail/Commercial
|
|
|
10.7
|
%
|
|
|
89.3
|
%
|
|
|
|
|
As of December 31, 2010, the prior public programs had not
sold any of the 1,172 properties purchased by these public
programs.
113
During the three years ended December 31, 2010, the prior
public real estate programs had purchased 839 properties located
in 42 states.
The table below gives information about these properties by
region.
|
|
|
|
|
|
|
|
|
|
|
Properties Purchased
|
|
|
|
|
|
|
% of Total
|
|
|
|
|
|
|
Purchase
|
|
Location
|
|
Number
|
|
|
Price
|
|
|
South
|
|
|
519
|
|
|
|
50.9
|
%
|
Midwest
|
|
|
174
|
|
|
|
18.4
|
%
|
West
|
|
|
86
|
|
|
|
22.4
|
%
|
Northeast
|
|
|
60
|
|
|
|
8.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
839
|
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
Based on the aggregate purchase price of the 839 properties,
approximately 52.8% were single-tenant retail properties,
approximately 20.3% were single-tenant commercial properties and
approximately 26.9% were multi-tenant retail properties. A total
of 259 of the properties were purchased with a combination of
offering proceeds and mortgage notes payable and the remaining
580 properties were purchased solely using offering proceeds.
Upon written request, any potential investor may obtain, without
charge, the most recent annual report on
Form 10-K
filed with the Securities and Exchange Commission by CCPT II and
CCPT III within the last 24 months. For a reasonable fee,
CCPT II and CCPT III will provide copies of any exhibits to such
Form 10-K.
Liquidity
Track Record
Prior
Private Programs
Of the 65 prior private programs sponsored by Cole Real Estate
Investments discussed above, 33 of them disclosed a targeted
date or time frame for liquidation in their private placement
memorandum. Of the 33 programs that made such disclosure,
four programs liquidated by the date or within the time frame
set forth in their private placement memorandum. With respect to
the remaining 29 programs that made such disclosure, the
targeted date or time frame for liquidation has not yet occurred
and these programs are still in operation as of
December 31, 2010.
Prior
Public Programs
Of the two prior public programs sponsored by Cole Real Estate
Investments discussed above, each of them disclosed in their
prospectus a targeted date or time frame for listing their
shares on a national securities exchange or seeking stockholder
approval of either (1) an extension or elimination of the
listing deadline, or (2) a liquidation. With respect to
each of the programs, the targeted date or time frame for
listing or seeking such stockholder approval has not yet
occurred, and the programs are still in operation as of
December 31, 2010.
Adverse
Business and Other Developments
Adverse changes in general economic conditions have occasionally
affected the performance of the prior programs. The following
discussion presents a summary of significant adverse business
developments or conditions experienced by Cole Real Estate
Investments prior programs over the past ten years that
may be material to investors in this offering.
114
Share
Valuation
CCPT I stated in its private placement memorandum that after two
years from the last offering of its shares of common stock, CCPT
I would provide an estimated value per share for the principal
purpose of assisting fiduciaries of plans subject to the annual
reporting requirements of ERISA, and IRA trustees or custodians,
which prepare reports relating to an investment in CCPT Is
shares of common stock. On January 13, 2012, CCPT I
announced that its board of directors approved an estimated
value of CCPT Is common stock of $7.95 per share as of
December 31, 2011. This estimated value represented an
increase from the $7.65 per share estimated value as of
December 31, 2010, announced by CCPT I on January 13,
2011 (and originally announced on February 1, 2010 as the
estimated value as of December 31, 2009). The shares of
CCPT Is common stock were originally sold at a gross
offering price of $10.00 per share. The principal reason for the
initial decrease in share value was a decline in real estate
values, despite CCPT Is properties maintaining a 100%
occupancy rate. The decline in values resulted from disruptions
in the credit markets and the general economic conditions. The
most recently announced estimated value reflects an improvement
in the real estate markets, improvements in general economic
conditions since December 2010 and other factors. In determining
the most recently announced estimated value of CCPT Is
shares of common stock, the board of directors of CCPT I relied
upon information provided by an independent investment banking
firm that specializes in providing real estate financial
services, and information provided by CCPT I Advisors. The
statement of value was only an estimate and may not reflect the
actual value of CCPT Is shares of common stock.
Accordingly, there can be no assurance that the estimated value
per share would be realized by CCPT Is stockholders if
they were to attempt to sell their shares or upon liquidation.
In February 2009, FINRA informed broker dealers that sell shares
of non-exchange traded REITs that broker dealers may not report,
in a customer account statement, an estimated value per share
that is developed from data more than 18 months old. To
assist broker dealers in complying with the FINRA notice, the
board of directors of CCPT II established an estimated value of
CCPT IIs common stock of $9.35 per share as of July 27,
2011. This estimated value reflects an improvement from the
$8.05 per share value as of June 22, 2010, announced
by CCPT II in June 2010. The shares of CCPT IIs common
stock were originally sold at a gross offering price of
$10 per share. The principal reason for the initial
decrease in share value was a decline in real estate values
resulting from disruptions in the credit markets and the general
economic conditions, in addition to a decline in
CCPT IIs occupancy rate to 94%. The most recently
announced estimated value reflects an improvement in the real
estate markets, improvements in the general economic condition
since June 2010, an improved occupancy rate to 95% and
other factors. In determining the most recently announced
estimated value of CCPT IIs shares of common stock, the
board of directors of CCPT II relied upon information provided
by an independent investment banking firm that specializes in
providing real estate financial services, and information
provided by CCPT II Advisors. The statement of value was only an
estimate and may not reflect the actual value of CCPT IIs
shares of common stock. Accordingly, there can be no assurance
that the estimated value per share would be realized by
CCPT IIs stockholders if they were to attempt to sell
their shares or upon liquidation. CCPT IIs board of
directors is expected to announce an updated estimated value of
CCPT IIs shares of common stock within 18 months
after July 27, 2011.
Distributions
and Redemptions
From June 2005 through February 2010, CCPT I paid a 7%
annualized distribution rate based upon a purchase price of $10
per share. However, beginning in March 2010, CCPT I reduced its
annualized distribution rate to 5% based on a purchase price of
$10 per share, or 6.54% based on the most recent estimated
value of $7.65 per share. The principal reasons for the lower
distribution rate were the approximately $50 million of
fixed rate debt that was to mature by year-end 2010 and the
prevailing credit markets, which dictated higher interest rates
upon refinancing and amortization provisions, requiring CCPT I
to pay down a portion of the principal on a monthly basis over
the life of the loan.
Pursuant to CCPT Is share redemption program, the company
may use up to 1% of its annual cash flow, including operating
cash flow not intended for distributions, borrowings, and
capital transactions such as sales or refinancings, to satisfy
redemption requests. Accordingly, CCPT Is board of
directors must determine at the
115
beginning of each fiscal year the maximum amount of shares that
CCPT I may redeem during that year. CCPT Is board of
directors determined that there was an insufficient amount of
cash available for redemptions during the years ending
December 31, 2008, 2009, 2010, 2011 and 2012. CCPT I
continues to accept redemption requests which are considered for
redemption if and when sufficient cash is available to fund
redemptions. Requests relating to approximately
313,000 shares remained unfulfilled as of
September 30, 2011, representing approximately
$2.4 million in unfulfilled requests, based on the $7.65
per share estimated value of CCPT Is common stock in
effect at that time.
From October 2005 through February 2006, CCPT II paid a 6%
annualized distribution rate based upon a purchase price of $10
per share; from March 2006 through June 2006, CCPT II paid a
6.25% annualized distribution rate based upon a purchase price
of $10 per share; from July 2006 through June 2007, CCPT II paid
a 6.5% annualized distribution rate based upon a purchase price
of $10 per share; from July 2007 through June 2009, CCPT II paid
a 7% annualized distribution rate based upon a purchase price of
$10 per share. Beginning July 2009, CCPT II paid a 6.25%
annualized distribution rate based upon a purchase price of $10
per share, or a 6.68% annualized distribution rate based on the
most recent estimate of the value of $9.35 per share. The
principal reason for the reduction of the distribution rate was
the drop in the occupancy rate of the CCPT II portfolio from 99%
on December 31, 2008, to 95% at September 30, 2009,
resulting in lower revenue. CCPT IIs occupancy rate as of
September 30, 2011 was 96%.
As of September 30, 2011, Cole Credit Property
Trust II has paid approximately $503 million in
cumulative distributions since inception. These distributions
were funded by net cash provided by operating activities of
approximately $458 million, offering proceeds of
approximately $9 million, net proceeds from the sale of
marketable securities of approximately $22 million and the
sale of CCPT IIs interest in a joint venture of
approximately $5 million, return of capital from
unconsolidated joint ventures of approximately $3 million,
and net borrowings of approximately $6 million. As of
September 30, 2011, CCPT II had expensed approximately
$9 million in cumulative real estate acquisition expenses,
which reduced operating cash flows. CCPT II treats its real
estate acquisition expenses as funded by offering proceeds.
Therefore, for consistency, real estate acquisition expenses are
treated in the same manner in describing the sources of
distributions, to the extent that distributions paid exceed net
cash provided by operating activities.
Pursuant to CCPT IIs share redemption program in effect
during 2009, redemptions were limited to 3% of the weighted
average number of shares outstanding during the prior calendar
year, other than for redemptions requested upon the death of a
stockholder. During 2009, CCPT II funded redemptions up to this
limit. On November 10, 2009, CCPT IIs board of
directors voted to temporarily suspend CCPT IIs share
redemption program other than for requests made upon the death
of a stockholder. CCPT IIs board of directors considered
many factors in making this decision, including the expected
announcement of an estimated value of CCPT IIs common
stock in June 2010 and continued uncertainty in the economic
environment and credit markets. On June 22, 2010, CCPT
IIs board of directors reinstated the share redemption
program, with certain amendments, effective August 1, 2010.
Under the terms of the revised share redemption program, during
any calendar year, CCPT II will redeem shares on a quarterly
basis, up to one-fourth of 3% of the weighted average number of
shares outstanding during the prior calendar year (including
shares requested for redemption upon the death of a
stockholder). In addition, funding for redemptions for each
quarter will be limited to the net proceeds received from the
sale of shares, in the respective quarter, under CCPT IIs
distribution reinvestment plan. These limits might prevent CCPT
II from accommodating all redemption requests made in any fiscal
quarter or in any twelve month period. Requests for redemptions
that are not fulfilled in a period may be resubmitted by
stockholders in a subsequent period. Unfulfilled requests for
redemptions are not carried over automatically to subsequent
redemption periods. Accordingly, CCPT II considers the
number of unfulfilled redemption requests for the most recently
completed fiscal quarter to be equivalent to the cumulative
number of unfulfilled redemption requests. Pursuant to the
CCPT II share redemption program, the redemption price per
share is dependent on the length of time the shares are held and
the most recently disclosed estimated share value.
During the three months ended September 30, 2011,
CCPT II received valid redemption requests relating to
approximately 5.8 million shares, including approximately
1.9 million shares that had been submitted in previous
periods, and, subsequent to September 30, 2011, requests
relating to approximately 1.5 million shares were redeemed
for $14.2 million at an average price of $9.27 per
share. The remaining redemption requests
116
relating to approximately 4.3 million shares went
unfulfilled, representing approximately $40.2 million in
unfulfilled requests, based upon a $9.35 per share
redemption price. A valid redemption request is one that
complies with the applicable requirements and guidelines of the
share redemption program, as amended.
CCPT IIIs board of directors began declaring distributions
in January 2009, after the company commenced business
operations. CCPT III paid a 6.5% annualized distribution rate
based upon a $10.00 per share purchase price for the period
commencing on January 6, 2009 through March 31, 2009.
During the period commencing on April 1, 2009 and ending on
March 31, 2010, CCPT III paid a 6.75% annualized
distribution rate based upon a $10.00 per share purchase price.
CCPT III paid a 7% annualized distribution rate based upon a
$10.00 per share purchase price for the period commencing on
April 1, 2010 and ending on December 31, 2010.
Beginning on January 1, 2011, CCPT III reduced its
annualized distribution rate to 6.50%. The principal reason for
the reduction of the distribution rate was to align the
distributions more closely with CCPT IIIs present
operating income. As of September 30, 2011, Cole Credit
Property Trust III has paid approximately $273 million
in cumulative distributions since inception. These distributions
were funded by net cash provided by operating activities of
approximately $133 million, offering proceeds of
approximately $124 million, return of capital from
unconsolidated joint ventures of approximately $1 million,
and net borrowings of approximately $15 million. As of
September 30, 2011, CCPT III had expensed approximately
$124 million in cumulative real estate acquisition expenses
which reduced operating cash flows. CCPT III treats its real
estate acquisition expenses as funded by offering proceeds.
Therefore, for consistency, real estate acquisition expenses are
treated in the same manner in describing the sources of
distributions, to the extent that distributions paid exceed net
cash provided by operating activities.
Pursuant to CCPT IIIs share redemption program, CCPT III
will not redeem in excess of 5% of the weighted average number
of shares outstanding during the trailing twelve months prior to
the redemption date (the Trailing Twelve-month Cap); provided,
however, that while shares subject to a redemption requested
upon the death of a stockholder will be included in calculating
the maximum number of shares that may be redeemed, such shares
will not be subject to the Trailing Twelve-month Cap. In
addition, all redemptions, including those upon death or
qualifying disability, are limited to those that can be funded
with cumulative net proceeds from the sale of shares through
CCPT IIIs distribution reinvestment plan. In an effort to
accommodate redemption requests throughout the calendar year,
CCPT III limits quarterly redemptions to approximately
1.25% of the weighted average number of shares outstanding
during the trailing twelve-month period, and the funding for
redemptions each quarter generally will be limited to the net
proceeds received from the sale of shares in the respective
quarter under CCPT IIIs distribution reinvestment
plan. CCPT IIIs share redemption program further
provides that while shares subject to redemption requested upon
the death of a stockholder will be included in calculating the
maximum number of shares that may be redeemed, such shares will
not be subject to the quarterly caps. CCPT IIIs board
of directors may waive these quarterly caps in its sole
discretion, subject to the Trailing Twelve-month Cap. These
limits might prevent CCPT III from accommodating all
redemption requests made in any fiscal quarter or in any
twelve-month period. As of September 30, 2011, CCPT III
received valid redemption requests relating to approximately
4.5 million shares, which were redeemed in full at an
average price of $9.68 per share, and no valid redemption
requests went unfulfilled.
Additionally, one of the six privately offered limited
partnerships, Cole Santa Fe Investors, LP, suspended
distributions to investors due to a tenant bankruptcy beginning
with the quarter ending December 31, 2003. On
November 30, 2007, the property was sold for approximately
$28.5 million, which resulted in a return to investors of
100% of their original investment plus a return of approximately
13.7% per year.
Another privately offered program, Cole Southwest Opportunity
Fund, LP, was unable to lease its developed data center facility
as a result of the severe downturn in the telecommunications
industry. The Phoenix facility was sold for $16.3 million,
which along with the previous sale of vacant land parcels in Las
Vegas, Nevada formerly owned by a wholly-owned subsidiary of
Cole Southwest Opportunity Fund, LP, resulted in a return to
investors of approximately 83% of their original investment upon
liquidation of the limited partnership.
117
DESCRIPTION
OF SHARES
We were formed under the laws of the state of Maryland. The
rights of our stockholders are governed by Maryland law as well
as our charter and bylaws. The following is a summary of the
material terms of our common stock as set forth in our charter
and bylaws, and is qualified by reference to our charter and
bylaws. Our charter and bylaws are on file with the Securities
and Exchange Commission as Exhibit 3.4 and 3.5,
respectively, to our registration statement on
Form S-11
and can be accessed over the Internet at the Securities and
Exchange Commissions website at
http://www.sec.gov
.
In addition, copies of our charter and bylaws are available at
no cost upon request. See the Where You Can Find More
Information section of this prospectus.
Our charter authorizes us to issue up to 500,000,000 shares
of stock, of which 490,000,000 shares are designated as
common stock at $0.01 par value per share and
10,000,000 shares are designated as preferred stock at
$0.01 par value per share. As of January 24, 2012,
20,000 shares of our common stock were issued and
outstanding, and no shares of preferred stock were issued and
outstanding. Our board of directors may amend our charter to
increase or decrease the aggregate number of our authorized
shares or the number of shares of any class or series that we
have authority to issue without any action by our stockholders.
Our charter also contains a provision permitting our board of
directors, without any action by our stockholders, to classify
or reclassify any unissued shares of common stock or preferred
stock into one or more classes or series and establish the
preferences, conversion or other rights, voting powers,
restrictions, limitations as to dividends or other
distributions, qualifications, and terms and conditions of
redemption of any new class or series of stock, subject to
certain restrictions, including the express terms of any class
or series of stock outstanding at the time. We believe that the
power to classify or reclassify unissued shares of stock and
thereafter issue the classified or reclassified shares provides
us with increased flexibility in structuring possible future
financings and acquisitions and in meeting other needs that
might arise.
Our charter and bylaws contain certain provisions that could
make it more difficult to acquire control of our company by
means of a tender offer, a proxy contest or otherwise. These
provisions are expected to discourage certain types of coercive
takeover practices and inadequate takeover bids and to encourage
persons seeking to acquire control of our company to negotiate
first with our board of directors. We believe that these
provisions increase the likelihood that proposals initially will
be on more attractive terms than would be the case in their
absence and facilitate negotiations that may result in
improvement of the terms of an initial offer that might involve
a premium price for our common stock or otherwise be in the best
interests of our stockholders. See the Risk
Factors Risks Related to an Investment in Cole
Credit Property Trust IV, Inc. section of this
prospectus.
To the extent that our board of directors determines that the
Maryland General Corporation Law conflicts with the provisions
set forth in the NASAA REIT Guidelines, the NASAA REIT
Guidelines will control, unless the provisions of the Maryland
General Corporation Law are mandatory under Maryland law.
Common
Stock
Subject to any preferential rights of any other class or series
of stock and to the provisions of our charter regarding the
restriction on the transfer of common stock, the holders of
common stock are entitled to such distributions as may be
authorized from time to time by our board of directors out of
legally available funds and declared by us and, upon any
liquidity event, would be entitled to receive all assets
available for distribution to our stockholders. Upon issuance
for full payment in accordance with the terms of this offering,
all common stock issued in the offering will be fully paid and
non-assessable. Holders of common stock will not have preemptive
rights, which means that they will not have an automatic option
to purchase any new shares that we issue, or preference,
conversion, exchange, sinking fund, redemption or appraisal
rights. Shares of our common stock have equal distribution,
liquidation and other rights.
118
Preferred
Stock
Our charter authorizes our board of directors to issue one or
more classes or series of preferred stock without stockholder
approval (provided that the issuance of preferred stock must
also be approved by a majority of independent directors not
otherwise interested in the transaction) and to fix the voting
rights, liquidation preferences, distribution rates, conversion
rights, redemption rights and terms, including sinking fund
provisions, and certain other rights and preferences with
respect to such preferred stock; provided, however, that the
voting rights of any such preferred stock offered and sold in a
private offering shall not exceed voting rights which bear the
same relationship to the voting rights of our common stock as
the consideration paid to us per share in such private offering
bears to the book value of each outstanding share of our common
stock. Because our board of directors has the power to establish
the preferences and rights of each class or series of preferred
stock, it may afford the holders of any series or class of
preferred stock preferences, powers, and rights senior to the
rights of holders of common stock; subject to the limitation on
voting rights noted in the preceding sentence. If we were to
create and issue preferred stock with a distribution preference
over common stock, payment of any distribution preferences of
outstanding preferred stock would reduce the amount of funds
available for the payment of distributions on the common stock.
Further, holders of preferred stock are normally entitled to
receive a preference payment in the event we liquidate,
dissolve, or wind up before any payment is made to the common
stockholders, likely reducing the amount common stockholders
would otherwise receive upon such an occurrence. In addition,
under certain circumstances, the issuance of preferred stock may
delay, prevent, render more difficult or tend to discourage the
following:
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a merger, offer, or proxy contest;
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the assumption of control by a holder of a large block of our
securities; or
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the removal of incumbent management.
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Also, our board of directors, without stockholder approval, may
issue preferred stock with voting and conversion rights that
could adversely affect the holders of shares of our common stock.
We currently have no preferred stock issued or outstanding. Our
board of directors has no present plans to issue shares of
preferred stock, but it may do so at any time in the future
without stockholder approval.
Meetings
and Special Voting Requirements
Subject to our charter restrictions on transfer of our stock and
except as may otherwise be specified in the terms of any class
or series of common stock, each holder of common stock is
entitled at each meeting of stockholders to one vote per share
owned by such stockholder on all matters submitted to a vote of
stockholders, including the election of directors. There is no
cumulative voting in the election of our board of directors,
which means that the holders of a majority of shares of our
outstanding common stock can elect all of the directors then
standing for election and the holders of the remaining shares of
common stock will not be able to elect any directors.
Under Maryland law, a Maryland corporation generally cannot
dissolve, amend its charter, merge, sell all or substantially
all of its assets, engage in a share exchange or engage in
similar transactions outside the ordinary course of business,
unless approved by the affirmative vote of stockholders holding
at least two-thirds of the shares entitled to vote on the
matter. However, a Maryland corporation may provide in its
charter for approval of these matters by a lesser percentage,
but not less than a majority of all of the votes entitled to be
cast on the matter. Our charter provides for approval of these
matters by the affirmative vote of a majority of the votes
entitled to be cast.
However, under the Maryland General Corporation Law and our
charter, the following events do not require stockholder
approval:
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stock exchanges in which we are the successor; and
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transfers of less than substantially all of our assets.
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Also, because our operating assets are held by our subsidiaries,
these subsidiaries may be able to merge or sell all or
substantially all of their assets without the approval of our
stockholders.
An annual meeting of our stockholders will be held each year, at
least 30 days after delivery of our annual report to our
stockholders. Our directors, including our independent
directors, are required to take reasonable steps to ensure this
requirement is met. Special meetings of stockholders may be
called only upon the request of a majority of our directors, a
majority of our independent directors, our president, our chief
executive officer or by an officer upon the written request of
stockholders holding at least 10% of our outstanding shares.
Within ten days of receiving a written request of stockholders
entitled to cast at least 10% of all the votes entitled to be
cast requesting a special meeting and stating the purpose of
such special meeting, our sponsor will provide all of our
stockholders written notice of the meeting and the purpose of
such meeting. The meeting must be held not less than 15 nor more
than 60 days after the distribution of the notice of
meeting at the time and place specified in the request, or, if a
time and place are not specified in the request, at a time and
place convenient to our stockholders. The presence, either in
person or by proxy, of stockholders entitled to cast at least
50% of all the votes entitled to be cast at a meeting on any
matter will constitute a quorum.
Our stockholders are entitled to receive a copy of our
stockholder list upon request. The list provided by us will
include each stockholders name, address and telephone
number, and the number of shares owned by each stockholder, and
will be sent within ten days of the receipt by us of the
request. A stockholder requesting a list will be required to pay
reasonable costs of postage and duplication. Stockholders and
their representatives will also be given access to our corporate
records at reasonable times. We have the right to request that a
requesting stockholder represent to us in writing that the list
and records will not be used to pursue commercial interests
before we become obligated to provide a copy of our stockholder
list.
The corporation will continue perpetually unless dissolved
pursuant to any applicable provision of the Maryland General
Corporation Law.
Formation
Transaction
In connection with our formation, Cole Holdings Corporation
invested $200,000 in exchange for 20,000 shares of our
common stock. Pursuant to our charter, Cole Holdings Corporation
may not sell its initial investment in us while Cole Real Estate
Investments remains our sponsor, but it may transfer its initial
investment to its affiliates.
Restrictions
on Ownership and Transfer
In order for us to qualify as a REIT under the Internal Revenue
Code, we must meet the following criteria regarding our
stockholders ownership of our shares:
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five or fewer individuals (as defined in the Internal Revenue
Code to include certain tax exempt organizations and trusts) may
not own, directly or indirectly, more than 50% in value of our
outstanding shares during the last half of a taxable
year; and
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100 or more persons must beneficially own our shares during at
least 335 days of a taxable year of 12 months or
during a proportionate part of a shorter taxable year.
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See the Federal Income Tax Considerations section of
this prospectus for further discussion of this topic. We may
prohibit certain acquisitions and transfers of shares so as to
ensure our initial and continued qualification as a REIT under
the Internal Revenue Code. However, there can be no assurance
that this prohibition will be effective. Because we believe it
is essential for us to qualify as a REIT, and, once qualified,
to continue to qualify, among other reasons, our charter
provides (subject to certain exceptions) that no stockholder may
own, or be deemed to own by virtue of the attribution provisions
of the Internal Revenue Code, more than 9.8% in value of the
aggregate of our outstanding shares or more than 9.8% (in value
or number of shares, whichever is more restrictive) of the
aggregate of our outstanding shares of common stock.
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Our board of directors, in its sole discretion, may waive this
ownership limit if evidence satisfactory to our directors is
presented that such ownership will not then or in the future
jeopardize our status as a REIT. Also, these restrictions on
transferability and ownership will not apply if our directors
determine that it is no longer in our best interests to continue
to qualify as a REIT.
Additionally, our charter further prohibits the transfer or
issuance of our stock if such transfer or issuance:
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with respect to transfers only, results in our common stock
being owned by fewer than 100 persons;
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results in our being closely held within the meaning
of Section 856(h) of the Internal Revenue Code;
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results in our owning, directly or indirectly, more than 9.8% of
the ownership interests in any tenant or subtenant; or
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otherwise results in our disqualification as a REIT.
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Any attempted transfer of our stock which, if effective, would
result in our stock being owned by fewer than 100 persons
will be null and void. In the event of any attempted transfer of
our stock which, if effective, would result in
(i) violation of the ownership limit discussed above,
(ii) our being closely held under
Section 856(h) of the Internal Revenue Code, (iii) our
owning (directly or indirectly) more than 9.8% of the ownership
interests in any tenant or subtenant or (iv) our otherwise
failing to qualify as a REIT, then the number of shares causing
the violation (rounded to the nearest whole share) will be
automatically transferred to a trust for the exclusive benefit
of one or more charitable beneficiaries, and the proposed
transferee will not acquire any rights in the shares. To avoid
confusion, these shares so transferred to a beneficial trust are
referred to in this prospectus as Excess Securities. Excess
Securities will remain issued and outstanding shares and will be
entitled to the same rights and privileges as all other shares
of the same class or series. The trustee of the beneficial
trust, as holder of the Excess Securities, will be entitled to
receive all distributions authorized by our board of directors
on such securities for the benefit of the charitable
beneficiary. Our charter further entitles the trustee of the
beneficial trust to vote all Excess Securities.
Within 20 days of receiving notice from us that the Excess
Securities have been transferred to the beneficial trust, the
trustee of the beneficial trust shall sell the Excess
Securities. The trustee of the beneficial trust may select a
transferee to whom the Excess Securities may be sold as long as
such sale does not violate the 9.8% ownership limit or the other
restrictions on transfer. Upon sale of the Excess Securities,
the intended transferee (the transferee of the Excess Securities
whose ownership would violate the 9.8% ownership limit or the
other restrictions on transfer) will receive from the trustee of
the beneficial trust the lesser of such sale proceeds (net of
any commissions and other expenses of sale), or the price per
share the intended transferee paid for the Excess Securities
(or, in the case of a gift or devise to the intended transferee,
the price per share equal to the market value per share on the
date of the transfer to the intended transferee). The trustee of
the beneficial trust will distribute to the charitable
beneficiary any amount the trustee receives in excess of the
amount to be paid to the intended transferee.
In addition, we have the right to purchase any Excess Securities
at the lesser of (i) the price per share paid in the
transfer that created the Excess Securities, or (ii) the
current market price, until the Excess Securities are sold by
the trustee of the beneficial trust. We may reduce the amount
payable to the intended transferee upon such sale by the amount
of any distribution we pay to an intended transferee on Excess
Securities prior to our discovery that such Excess Securities
have been transferred in violation of the provisions of the
charter. If any legal decision, statute, rule, or regulation
deems or declares the transfer restrictions included in our
charter to be void or invalid, then we may, at our option, deem
the intended transferee of any Excess Securities to have acted
as an agent on our behalf in acquiring such Excess Securities
and to hold such Excess Securities on our behalf.
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Any person who (i) acquires or attempts to acquire shares
in violation of the foregoing ownership restriction, transfers
or receives shares subject to such limitations, or would have
owned shares that resulted in a transfer to a charitable trust,
or (ii) proposes or attempts any of the transactions in
clause (i), is required to give us 15 days written notice
prior to such transaction. In both cases, such persons must
provide to us such other information as we may request in order
to determine the effect, if any, of such transfer on our status
as a REIT. The foregoing restrictions will continue to apply
until our board of directors determines it is no longer in our
best interests to continue to qualify as a REIT.
The ownership restriction does not apply to the underwriter in a
public offering of shares or to a person or persons so exempted
from the ownership limit by our board of directors based upon
appropriate assurances that our qualification as a REIT is not
jeopardized. Any person who owns 5% or more of the outstanding
shares during any taxable year will be asked to deliver a
statement or affidavit setting forth the number of shares
beneficially owned, directly or indirectly.
Stockholders wishing to transfer shares of our stock may request
an application for transfer by contacting us. See the section of
this prospectus captioned Where You Can Find More
Information. With respect to transfers of uncertificated
stock, we will continue to treat the stockholder registered on
our stock ledger as the owner of the shares until the record
owner and the new owner deliver a properly executed application
for transfer to our transfer agent at the address set forth in
the application for transfer. Any questions regarding the
transferability of shares should be directed to our transfer
agent, whose contact information is set forth on page 5 of
this prospectus and in the application for transfer.
Distribution
Policy and Distributions
We intend to pay regular monthly distributions to our
stockholders. We anticipate that our board of directors will
declare distributions to stockholders as of daily record dates
with distributions aggregated and paid monthly in arrears.
Therefore, new investors will be entitled to distributions
immediately upon the purchase of their shares. Because
substantially all of our operations will be performed indirectly
through CCPT IV OP, our operating partnership, our ability to
pay distributions depends in large part on CCPT IV OPs
ability to pay distributions to us. In the event we do not have
enough cash flow from operations to fund distributions, we may
pay distributions from sources other than cash flow from
operations, including borrowings and proceeds from the sale of
our securities or asset sales, and we have no limits on the
amounts we may pay from such other sources. We expect that, from
time to time, we will pay distributions in excess of our cash
flows from operations as defined by GAAP. As a result, the
amount of distributions paid at any time may not be an indicator
of the current performance of our properties or current
operating cash flows. If you are a Maryland investor, you will
receive from us on a quarterly basis a notice that discloses the
sources of our distribution payments in both dollar and
percentage amounts, consistent with similar disclosure that will
be included in the prospectus and updated quarterly.
Distributions to stockholders are characterized for federal
income tax purposes as ordinary income, capital gains,
non-taxable return of capital or a combination of the three.
Distributions that exceed our current or accumulated earnings
and profits typically constitute a return of capital for tax
purposes and reduce the stockholders basis in our common
shares. We will annually notify stockholders of the taxability
of distributions paid during the preceding year.
Although we intend to pay regular monthly distributions, our
results of operations, our general financial condition, general
economic conditions, or other factors may inhibit us from doing
so. Distributions are authorized at the discretion of our board
of directors, and are based on many factors, including current
and expected cash flow from operations, as well as the
obligation that we comply with the REIT requirements of the
Internal Revenue Code. The funds we receive from operations that
are available for distribution may be affected by a number of
factors, including the following:
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the amount of time required for us to invest the funds received
in the offering;
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our operating and interest expenses, including fees and expenses
paid to our advisor;
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the ability of tenants to meet their obligations under the
leases associated with our properties;
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the amount of distributions or dividends received by us from our
indirect real estate investments;
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our ability to keep our properties occupied;
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our ability to maintain or increase rental rates when renewing
or replacing current leases;
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capital expenditures and reserves for such expenditures;
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the issuance of additional shares;
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the amount of cash used to repurchase shares under our share
redemption program; and
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financings and refinancings.
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We must distribute to our stockholders at least 90% of our
taxable income each year in order to meet the requirements for
being treated as a REIT under the Internal Revenue Code. This
requirement is described in greater detail in the Federal
Income Tax Considerations Requirements for
Qualification as a REIT Operational
Requirements Annual Distribution Requirement
section of this prospectus. Our directors may authorize
distributions in excess of this percentage as they deem
appropriate. Because we may receive income from interest or
rents at various times during our fiscal year, distributions may
not reflect our income earned in that particular distribution
period, but may be made in anticipation of operating cash flows
that we expect to receive during a later period and may be made
in advance of actual receipt of funds in an attempt to make
distributions relatively uniform. To allow for such differences
in timing between the receipt of income and the payment of
expenses, and the effect of required debt payments, among other
things, could require us to borrow funds from third parties on a
short-term basis, issue new securities, including through this
offering, or sell assets to meet the distribution requirements
that are necessary to achieve the tax benefits associated with
qualifying as a REIT. These methods of obtaining funding could
affect future distributions by increasing operating costs and
decreasing available cash. In addition, such distributions may
constitute a return of capital. See the Federal Income Tax
Considerations Requirements for Qualification as a
REIT section of this prospectus.
Distributions
in Kind
Distributions in kind shall not be permitted, except for
distributions of readily marketable securities or our
securities, distributions of beneficial interests in a
liquidating trust established for our dissolution and the
liquidation of our assets in accordance with the terms of our
charter or distributions in which (a) our board of
directors advises each stockholder of the risks associated with
direct ownership of the property, (b) our board of
directors offers each stockholder the election of receiving such
in-kind distributions, and (c) in-kind distributions are
made only to those stockholders that accept such offer.
Stockholder
Liability
The Maryland General Corporation Law provides that our
stockholders:
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are not liable personally or individually in any manner
whatsoever for any debt, act, omission or obligation incurred by
us or our board of directors; and
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are under no obligation to us or our creditors with respect to
their shares other than the obligation to pay to us the full
amount of the consideration for which their shares were issued.
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Business
Combinations
Under Maryland law, business combinations between a
Maryland corporation and an interested stockholder or an
affiliate of an interested stockholder are prohibited for five
years after the most recent date
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on which the interested stockholder becomes an interested
stockholder. These business combinations include a merger,
consolidation, share exchange, or, in circumstances specified in
the statute, an asset transfer or issuance or reclassification
of equity securities. An interested stockholder is defined as:
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any person who beneficially owns 10% or more of the voting power
of the corporations shares; or
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an affiliate or associate of the corporation who, at any time
within the two-year period prior to the date in question, was
the beneficial owner of 10% or more of the voting power of the
then outstanding voting stock of the corporation.
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A person is not an interested stockholder under the statute if
the board of directors approved in advance the transaction by
which he otherwise would have become an interested stockholder.
However, in approving a transaction, the board of directors may
provide that its approval is subject to compliance, at or after
the time of approval, with any terms and conditions determined
by the board of directors.
After the five-year prohibition, any business combination
between the Maryland corporation and an interested stockholder
generally must be recommended by the board of directors of the
corporation and approved by the affirmative vote of at least:
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80% of the votes entitled to be cast by holders of outstanding
shares of voting stock of the corporation; and
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two-thirds of the votes entitled to be cast by holders of voting
stock of the corporation other than shares held by the
interested stockholder with whom or with whose affiliate the
business combination is to be effected or held by an affiliate
or associate of the interested stockholder.
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These super-majority vote requirements do not apply if the
corporations stockholders receive a minimum price, as
defined under Maryland law, for their shares in the form of cash
or other consideration in the same form as previously paid by
the interested stockholder for its shares.
The statute permits various exemptions from its provisions,
including business combinations that are exempted by the board
of directors before the time that the interested stockholder
becomes an interested stockholder. Pursuant to the statute, our
board of directors has exempted any business combination with
our advisor or any of its affiliates. Consequently, the
five-year prohibition and the super-majority vote requirements
will not apply to business combinations between us and our
advisor or any of its affiliates. As a result, our advisor or
any of its affiliates may be able to enter into business
combinations with us that may not be in the best interests of
our stockholders, without compliance with the super-majority
vote requirements and the other provisions of the statute.
The business combination statute may discourage others from
trying to acquire control of us and increase the difficulty of
consummating any offer.
Control
Share Acquisitions
With some exceptions, Maryland law provides that control shares
of a Maryland corporation acquired in a control share
acquisition have no voting rights except to the extent approved
by a vote of stockholders holding two-thirds of the votes
entitled to be cast on the matter, excluding control
shares:
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owned by the acquiring person;
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owned by our officers; and
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owned by our employees who are also directors.
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Control shares
mean voting shares which, if
aggregated with all other voting shares owned by an acquiring
person or shares for which the acquiring person can exercise or
direct the exercise of voting power,
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would entitle the acquiring person to exercise voting power in
electing directors within one of the following ranges of voting
power:
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one-tenth or more but less than one-third;
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one-third or more but less than a majority; or
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a majority or more of all voting power.
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Control shares do not include shares the acquiring person is
then entitled to vote as a result of having previously obtained
stockholder approval. A control share acquisition occurs when,
subject to some exceptions, a person directly or indirectly
acquires ownership or the power to direct the exercise of voting
power (except solely by virtue of a revocable proxy) of issued
and outstanding control shares. A person who has made or
proposes to make a control share acquisition, upon satisfaction
of some specific conditions, including an undertaking to pay
expenses, may compel our board of directors to call a special
meeting of our stockholders to be held within 50 days of a
demand to consider the voting rights of the control shares. If
no request for a meeting is made, we may present the question at
any stockholders meeting.
If voting rights are not approved at the meeting or if the
acquiring person does not deliver an acquiring person statement
as required by the statute, then, subject to some conditions and
limitations, we may redeem any or all of the control shares
(except those for which voting rights have been previously
approved) for fair value determined, without regard to the
absence of voting rights for the control shares, as of the date
of the last control share acquisition by the acquiror or of any
meeting of stockholders at which the voting rights of such
shares are considered and not approved. If voting rights for
control shares are approved at a stockholders meeting and the
acquiror becomes entitled to vote a majority of the shares
entitled to vote, all other stockholders may exercise appraisal
rights. The fair value of the shares as determined for purposes
of such appraisal rights may not be less than the highest price
per share paid by the acquiror in the control share acquisition.
The control share acquisition statute does not apply to shares
acquired in a merger, consolidation, or share exchange if we are
a party to the transaction or to acquisitions approved or
exempted by our charter or bylaws.
As permitted by Maryland General Corporation Law, our bylaws
contain a provision exempting from the control share acquisition
statute any and all acquisitions of our stock by Cole Capital
Advisors or any affiliate of Cole Capital Advisors.
Subtitle
8
Subtitle 8 of Title 3 of the Maryland General Corporation
Law permits a Maryland corporation with a class of equity
securities registered under the Exchange Act and at least three
independent directors to elect to be subject, by provision in
its charter or bylaws or a resolution of its board of directors
and notwithstanding any contrary provision in the charter or
bylaws, to any or all of five provisions:
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a classified board of directors;
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a two-thirds vote requirement for removing a director;
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a requirement that the number of directors be fixed only by vote
of the directors;
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a requirement that a vacancy on the board of directors be filled
only by the remaining directors and for the remainder of the
full term of the class of directors in which the vacancy
occurred; and
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a majority requirement for the calling of a special meeting of
stockholders.
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Pursuant to Subtitle 8, except as may be provided by our board
of directors in setting the terms of any class or series of our
preferred stock, we have elected to provide that vacancies on
our board of directors be filled only by the remaining directors
and for the remainder of the full term of the directorship in
which the vacancy occurred. Through provisions in our charter
and bylaws unrelated to Subtitle 8, we already vest in the
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board of directors the exclusive power to fix the number of
directorships. We have not elected to be subject to any of the
other provisions of Subtitle 8.
Tender
Offers by Stockholders
Our charter provides that any tender offer, including any
mini-tender offer, must comply with
Regulation 14D of the Exchange Act, including the notice
and disclosure requirements. The offering person must provide
our company notice of such tender offer at least ten business
days before initiating the tender offer. If the offering person
does not comply with the provisions set forth above, our company
will have the right to redeem that persons shares and any
shares acquired in such tender offer. In addition, the
non-complying person will be responsible for all of our
companys expenses in connection with that persons
noncompliance.
Advance
Notice of Director Nominations and New Business
Our bylaws provide that with respect to an annual meeting of
stockholders, nominations of individuals for election to the
board of directors and the proposal of business to be considered
by stockholders may be made only (1) pursuant to our notice
of the meeting, (2) by or at the direction of our board of
directors or (3) by a stockholder who is a stockholder of
record both at the time of giving advance notice of such
nominations or proposals of business and at the time of such
annual meeting, who is entitled to vote at the meeting and who
has complied with the advance notice procedures of the bylaws.
With respect to special meetings of stockholders, only the
business specified in our notice of the meeting may be brought
before the meeting. Nominations of individuals for election to
our board of directors at a special meeting may be made only
(1) pursuant to our notice of the meeting, (2) by or
at the direction of our board of directors, or (3) provided
that our board of directors has determined that directors will
be elected at the meeting, by a stockholder who is a stockholder
of record both at the time of giving advance notice of such
nominations and at the time of such special meeting, who is
entitled to vote at the meeting and who has complied with the
advance notice provisions of the bylaws.
Share
Redemption Program
Our board of directors has adopted a share redemption program
that enables you to sell your shares to us in limited
circumstances. Our share redemption program permits you to sell
your shares back to us after you have held them for at least one
year, subject to the significant conditions and limitations
described below.
Our common stock currently is not listed on a national
securities exchange and we will not seek to list our stock
unless and until such time as our independent directors believe
that the listing of our stock would be in the best interests of
our stockholders. In order to provide stockholders with the
benefit of interim liquidity, stockholders who have held their
shares for at least one year may present all, or a portion
consisting of at least the lesser of (1) 25% of the
holders shares; or (2) a number of shares with an
aggregate redemption price of $2,500, in accordance with the
procedures outlined below. At that time, we may, subject to the
conditions and limitations described below, redeem the shares
presented for redemption for cash to the extent that we have
sufficient funds available to us to fund such redemption. We
will not pay to our sponsor, board of directors, advisor or its
affiliates any fees to complete any transactions under our share
redemption program.
During the term of this offering, and until such time as our
board of directors determines a reasonable estimate of the value
of our shares, the redemption price per share (other than for
shares purchased pursuant to our distribution reinvestment plan)
will depend on the price you paid for your shares and the length
of time you have held such shares as follows: after one year
from the purchase date, 95% of the amount you paid for each
share; after two years from the purchase date, 97.5% of the
amount you paid for each share; and after three years from the
purchase date, 100% of the amount you paid for each share.
During this time period, the redemption price for shares
purchased pursuant to our distribution reinvestment plan will be
the amount you paid for such shares. (In each case, the
redemption price will be adjusted for any stock dividends,
combinations, splits, recapitalizations and the like with
respect to our common stock). Accordingly, the
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redemption price will reflect a stockholders reduced
purchase price if such stockholder received discounted or waived
selling commissions
and/or
a
waived dealer manager fee. At any time we are engaged in an
offering of shares, the per share price for shares purchased
under our redemption program will always be equal to or lower
than the applicable per share offering price.
After such time as our board of directors has determined a
reasonable estimated value of our shares, the per share
redemption price (other than for shares purchased pursuant to
our distribution reinvestment plan) will depend on the length of
time you have held such shares as follows: after one year from
the purchase date, 95% of the Estimated Share Value (defined
below); after two years from the purchase date, 97.5% of the
Estimated Share Value; and after three years from the purchase
date, 100% of the Estimated Share Value. During this time
period, the redemption price for shares purchased pursuant to
our distribution reinvestment plan will be 100% of the Estimated
Share Value. (In each case, the redemption price will be
adjusted for any stock dividends, combinations, splits,
recapitalizations and the like with respect to our common
stock). For purposes of establishing the redemption price per
share, Estimated Share Value shall mean the most
recently disclosed reasonable estimated value of our shares of
common stock as determined by our board of directors, including
a majority of our independent directors.
Our board of directors will announce any redemption price
adjustment and the time period of its effectiveness as a part of
its regular communications with our stockholders. If we have
sold property and have made one or more special distributions to
our stockholders of all or a portion of the net proceeds from
such sales subsequent to the establishment of the Estimated
Share Value, the per share redemption price will be reduced by
the net sale proceeds per share distributed to investors prior
to the redemption date. Our board of directors will, in its sole
discretion, determine which distributions, if any, constitute a
special distribution. While our board of directors does not have
specific criteria for determining a special distribution, we
expect that a special distribution will only occur upon the sale
of a property and the subsequent distribution of the net sale
proceeds. In no event will the Estimated Share Value established
for purposes of our share redemption program exceed the
then-current estimated share value established for purposes of
our distribution reinvestment plan.
Upon receipt of a request for redemption, we may conduct a
Uniform Commercial Code search to ensure that no liens are held
against the shares. We will not redeem any shares subject to a
lien. Any costs in conducting the Uniform Commercial Code search
will be borne by us.
We may waive the one-year holding period requirement upon
request due to a stockholders death or bankruptcy or other
exigent circumstances as determined by our advisor. In the event
of the death of a stockholder, we must receive notice from the
stockholders estate within 270 days after the
stockholders death. In addition, in the event that you
redeem all of your shares, any shares that you purchased
pursuant to our distribution reinvestment plan will be excluded
from the one-year holding requirement. Also, for purposes of the
one-year-holding
period, limited partners of our operating partnership who
exchanged their limited partnership units for shares of our
common stock will be deemed to have owned their shares as of the
date the operating partnership units were issued. Shares
redeemed in connection with a stockholders death, during
the term of this offering and until such time as our board of
directors determines a reasonable estimated value of our shares,
will be redeemed at a purchase price equal to 100% of the amount
actually paid for the shares. Shares redeemed in connection with
a stockholders death, after such time as our board of
directors has determined a reasonable estimated value of our
shares, will be redeemed at a purchase price per share equal to
100% of the Estimated Share Value. Shares redeemed in connection
with a stockholders bankruptcy or other exigent
circumstance within one year from the purchase date will be
redeemed at a price per share equal to the price per share we
would pay had the stockholder held the shares for one year from
the purchase date.
In the event that you request a redemption of all of your
shares, and you are participating in our distribution
reinvestment plan, you will be deemed to have notified us, at
the time you submit your redemption request, that you are
terminating your participation in our distribution reinvestment
plan, and have elected to receive future distributions in cash.
This election will continue in effect even if less than all of
your shares are redeemed unless you notify us that you wish to
resume your participation in our distribution reinvestment plan.
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We will limit the number of shares redeemed pursuant to our
share redemption program as follows: (1) we will not redeem
in excess of 5% of the weighted average number of shares
outstanding during the trailing 12 months prior to the end
of the fiscal quarter for which the redemptions are being paid;
and (2) funding for the redemption of shares will be
limited to the net proceeds we receive from the sale of shares
under our distribution reinvestment plan. In an effort to
accommodate redemption requests throughout the calendar year, we
intend to limit quarterly redemptions to approximately
one-fourth of 5% (1.25%) of the weighted average number of
shares outstanding during the trailing
12-month
period ending on the last day of the fiscal quarter, and funding
for redemptions for each quarter generally will be limited to
the net proceeds we receive from the sale of shares in the
respective quarter under our distribution reinvestment plan;
however, our management may waive these quarterly limitations in
its sole discretion, subject to the 5% cap on the number of
shares we may redeem during the respective trailing
12 month period. Any of the foregoing limits might prevent
us from accommodating all redemption requests made in any
quarter, in which case quarterly redemptions will be made pro
rata, except as described below. Our management also reserves
the right, in its sole discretion at any time, and from time to
time, to reject any request for redemption for any reason.
We will redeem our shares no later than the end of the month
following the end of each fiscal quarter. Requests for
redemption must be received on or prior to the end of the fiscal
quarter in order for us to repurchase the shares in the month
following the end of that fiscal quarter. You may withdraw your
request to have your shares redeemed, but all such requests
generally must be submitted prior to the last business day of
the applicable fiscal quarter. Any redemption capacity that is
not used as a result of the withdrawal or rejection of
redemption requests may be used to satisfy the redemption
requests of other stockholders received for that fiscal quarter,
and such redemption payments may be made at a later time than
when that quarters redemption payments are made.
We will determine whether we have sufficient funds
and/or
shares available as soon as practicable after the end of each
fiscal quarter, but in any event prior to the applicable payment
date. If we cannot purchase all shares presented for redemption
in any fiscal quarter, based upon insufficient cash available
and/or
the
limit on the number of shares we may redeem during any quarter
or year, we will give priority to the redemption of deceased
stockholders shares. (While deceased stockholders
shares will be included in calculating the maximum number of
shares that may be redeemed in any annual or quarterly period,
they will not be subject to the annual or quarterly percentage
caps; therefore, if the volume of requests to redeem deceased
stockholders shares in a particular quarter were large
enough to cause the annual or quarterly percentage caps to be
exceeded, even if no other redemption requests were processed,
the redemptions of deceased stockholders shares would be
completed in full, assuming sufficient proceeds from the sale of
shares under our distribution reinvestment plan were available.
If sufficient proceeds from the sale of shares under our
distribution reinvestment plan were not available to pay all
such redemptions in full, the requests to redeem deceased
stockholders shares would be honored on a pro rata basis.)
We next will give priority to requests for full redemption of
accounts with a balance of 250 shares or less at the time
we receive the request, in order to reduce the expense of
maintaining small accounts. Thereafter, we will honor the
remaining redemption requests on a pro rata basis. Following
such quarterly redemption period, if you would like to resubmit
the unsatisfied portion of the prior request for redemption, you
must submit a new request for redemption of such shares prior to
the last day of the new quarter. Unfulfilled requests for
redemption will not be carried over automatically to subsequent
redemption periods.
Our board of directors may choose to amend, suspend or terminate
our share redemption program at any time upon 30 days
notice. Additionally, we will be required to discontinue sales
of shares under the distribution reinvestment plan on the
earlier of
,
2014, which is two years from the effective date of this
offering, unless the distribution reinvestment plan offering is
extended, or the date we sell all of the shares registered for
sale under the distribution reinvestment plan, unless we file a
new registration statement with the Securities and Exchange
Commission and applicable states. Because the redemption of
shares will be funded with the net proceeds we receive from the
sale of shares under the distribution reinvestment plan, the
discontinuance or termination of the distribution reinvestment
plan will adversely affect our ability to redeem shares under
the share redemption program. We will notify our stockholders of
such developments (i) in our next annual or quarterly
report or (ii) by means of a separate mailing to you,
accompanied by disclosure in a
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current or periodic report under the Exchange Act. During this
offering, we would also include this information in a prospectus
supplement or post-effective amendment to the registration
statement, as then required under federal securities laws.
Our share redemption program is only intended to provide limited
liquidity to our stockholders until a liquidity event occurs,
which may include the sale of our company, the sale of all or
substantially all of our assets, a merger or similar
transaction, an alternative strategy that will result in a
significant increase in opportunities for stockholders to redeem
their shares or the listing of the shares of common stock for
trading on a national securities exchange. The share redemption
program will be terminated if the shares become listed on a
national securities exchange. We cannot guarantee that a
liquidity event will occur.
The shares we redeem under our share redemption program will be
cancelled and will return to the status of authorized but
unissued shares. We do not intend to resell such shares to the
public unless they are first registered with the Securities and
Exchange Commission under the Securities Act and under
appropriate state securities laws or otherwise sold in
compliance with such laws.
We will disclose, when available and applicable, the number of
shares of common stock that we redeemed during the prior year
ended, the aggregate redemption price for those shares, whether
any redemption requests went unfulfilled and the source of the
cash used to fund the redemptions.
Restrictions
on
Roll-up
Transactions
A
Roll-up
Transaction is a transaction involving the acquisition, merger,
conversion or consolidation, directly or indirectly, of us and
the issuance of securities of an entity
(Roll-up
Entity) that is created or would survive after the successful
completion of a
Roll-up
Transaction. This term does not include:
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a transaction involving our securities that have been listed on
a national securities exchange for at least
12 months; or
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a transaction involving our conversion to trust or association
form if, as a consequence of the transaction, there will be no
significant adverse change in stockholder voting rights, the
term of our existence, compensation to our advisor or our
investment objectives.
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In connection with any
Roll-up
Transaction involving the issuance of securities of a
Roll-up
Entity, an appraisal of all of our assets will be obtained from
a competent independent appraiser. Our assets will be appraised
on a consistent basis, and the appraisal will be based on the
evaluation of all relevant information and will indicate the
value of the assets as of a date immediately prior to the
announcement of the proposed
Roll-up
Transaction. The appraisal will assume an orderly liquidation of
assets over a
12-month
period. The terms of the engagement of the independent appraiser
will clearly state that the engagement is for the benefit of us
and our stockholders. A summary of the appraisal, indicating all
material assumptions underlying the appraisal, will be included
in a report to our stockholders in connection with any proposed
Roll-up
Transaction. If the appraisal is to be included in a prospectus
used to offer the securities of a
Roll-up
Entity, the appraisal will be filed with the Securities and
Exchange Commission and the states as an exhibit to the
registration statement for that offering. Accordingly, we would
be subject to liability for violation of Section 11 of the
Securities Act and comparable provisions under state laws for
any material misrepresentations or material omissions in any
such filed appraisal.
In connection with a proposed
Roll-up
Transaction, the sponsor of the
Roll-up
Transaction must offer to stockholders who vote no
on the proposal the choice of:
(1) accepting the securities of the
Roll-up
Entity offered in the proposed
Roll-up
Transaction; or
(2) one of the following:
(a) remaining as holders of our common stock and preserving
their interests therein on the same terms and conditions as
existed previously, or
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(b) receiving cash in an amount equal to the
stockholders pro rata share of the appraised value of our
net assets.
We are prohibited from participating in any
Roll-up
Transaction:
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that includes provisions that would materially impede or
frustrate the accumulation of shares by any purchaser of the
securities of the
Roll-up
Entity, except to the minimum extent necessary to preserve the
tax status of the
Roll-up
Entity, or which would limit the ability of an investor to
exercise the voting rights of its securities of the
Roll-up
Entity on the basis of the number of shares held by that
investor;
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that results in our stockholders having an adverse change in
their voting rights;
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in which our investors rights to access records of the
Roll-up
Entity will be less than those provided in the section of this
prospectus entitled Meetings and Special
Voting Requirements above; or
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in which any of the costs of the
Roll-up
Transaction would be borne by us if the
Roll-up
Transaction is rejected by the stockholders.
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Valuation
Policy
The offering price for our shares is not based on the expected
book value or expected net asset value of our proposed
investments, or our expected operating cash flows. Although our
board of directors may do so at any time in its discretion, we
do not expect that our board of directors will undertake a
process for estimating the per share value of our common stock
during the period of this offering or for the
18-month
period following the termination of this offering. Furthermore,
if we engage in a follow-on offering, we do not expect that our
board of directors will undertake a process for estimating the
per share value of our common stock during the period of the
follow-on offering or for the
18-month
period following the termination of such follow-on offering.
However, during such periods, solely to assist fiduciaries of
certain tax-exempt plans subject to annual reporting
requirements of ERISA who identify themselves to us and who
request per share value information, we intend to use the most
recent gross per share offering price of our shares of common
stock as the per share value (unless we have made a special
distribution to stockholders of net sales proceeds from the sale
of one or more properties during such periods, in which case we
will use the most recent gross offering price less the per share
amount of the special distribution).
Estimates based solely on the most recent offering price of our
shares will be subject to numerous limitations. For example,
such estimates will not take into account:
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individual or aggregate values of our assets;
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real estate market fluctuations affecting our assets generally;
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adverse or beneficial developments with respect to one or more
assets in our portfolio;
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our costs of the offering; or
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our costs of acquiring assets.
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No later than 18 months after the last sale in an offering
as set forth above, we will disclose an estimated per share
value that is not based solely on the offering price of our
shares. This estimate will be determined by our board of
directors, or a committee thereof, which in either case will
include a majority of our independent directors, after
consultation with our advisor, CR IV Advisors, or if we are no
longer advised by CR IV Advisors, any successor advisor or our
officers and employees, subject to the restrictions and
limitations set forth in this valuation policy. We intend to
publish our board of directors estimate of the reasonable
value of our shares within 18 months after an offering, at
a time to be determined by our board of directors.
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Our board of directors or a committee thereof will have the
discretion to choose a methodology or combination of
methodologies as it deems reasonable under then current
circumstances for estimating the per share value of our common
stock. The estimated value will not necessary be equivalent to
our net asset value, and is not intended to be related to any
values at which individual assets may be carried on financial
statements under applicable accounting standards. The
methodologies for determining the estimated values under the
valuation policy may take into account numerous factors
including, without limitation, the following:
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net amounts that might be realized in a sale of our assets in an
orderly liquidation;
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net amounts that might be realized in a bulk portfolio sale of
our assets;
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separate valuations of our assets (including any impairments);
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our going concern value;
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private real estate market conditions;
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public real estate market conditions;
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our business plan and characteristics and factors specific to
our portfolio or securities;
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the prices at which our securities were sold in other offerings,
such as a distribution reinvestment plan offering;
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the prices paid for our securities in other transactions,
including secondary market trades; and
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the relative prices paid for comparable companies listed on a
national securities exchange.
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Our board of directors may rely on an independent third-party
valuation expert to assist in estimating the value of our assets
or our shares of common stock. However, with respect to asset
valuations, our board of directors will not be required to
obtain
asset-by-asset
appraisals prepared by certified independent appraisers, nor
must any appraisals conform to formats or standards promulgated
by any such trade organization. We will disclose the effective
date of the estimated valuation and a summary of the methodology
by which the estimated value was developed. We do not intend to
release individual property value estimates or any of the data
supporting the estimated per share value.
After first publishing our board of directors estimate of
the per share value of our common stock, our board of directors
will repeat the process of estimating the per value of our
common stock periodically thereafter. However, our board of
directors may suspend the publication of such estimates during
any follow-on offering of our common stock and for a period of
18 months thereafter.
The reasonable estimate of the value of our shares will be
subject to numerous limitations. Such valuations will be
estimates only and may be based upon a number of estimates,
assumptions, judgments and opinions that may not be, or may
later prove not to be, accurate or complete, which could make
the estimated valuations incorrect. As a result, with respect to
any estimate of the value of our common stock made pursuant to
our valuation policy, there can be no assurance that:
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the estimated value per share would actually be realized by our
stockholders upon liquidation, bulk portfolio sales of our
assets, sale of our company or listing of the common stock on an
exchange;
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any stockholder would be able to realize estimated share values
in any attempt to sell shares;
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the estimated value per share would be related to any individual
or aggregated value estimates or appraisals of our
assets; or
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the estimated value, or method used to estimate value, would be
found by any regulatory authority to comply with the ERISA,
FINRA or other regulatory requirements.
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This valuation policy may be amended by our board of directors
at any time and, although the policy will express the intent of
our board of directors at the time of its adoption, there is no
limitation on the ability of our board of directors to cause us
to vary from this policy to the extent it deems appropriate,
with or without an express amendment of the policy.
Reports
We Provide to our Stockholders
Our charter requires that we prepare an annual report and
deliver it to our common stockholders within 120 days after
the end of each fiscal year. Our directors are required to take
reasonable steps to ensure that the annual report complies with
our charter provisions. Among the matters that must be included
in the annual report or included in a proxy statement delivered
with the annual report are:
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financial statements prepared in accordance with GAAP that are
audited and reported on by independent certified public
accountants;
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the ratio of the costs of raising capital during the year to the
capital raised;
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the aggregate amount of advisory fees and the aggregate amount
of other fees paid to our advisor and any affiliates of our
advisor by us or third parties doing business with us during the
year;
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our total operating expenses for the year stated as a percentage
of our average invested assets and as a percentage of our net
income;
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a report from our independent directors that our policies are in
the best interests of our stockholders and the basis for such
determination; and
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a separately stated, full disclosure of all material terms,
factors and circumstances surrounding any and all transactions
involving us and our advisor, a director or any affiliate
thereof during the year, which disclosure has been examined and
commented upon in the report by our independent directors with
regard to the fairness of such transactions.
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SUMMARY
OF DISTRIBUTION REINVESTMENT PLAN
We have adopted a distribution reinvestment plan. The
distribution reinvestment plan allows you to have distributions
otherwise payable to you in cash reinvested in additional shares
of our common stock. We are offering 50,000,000 shares for
sale pursuant to our distribution reinvestment plan at an
initial price of $9.50 per share. Such price may only be
available until the termination of our primary offering, which
is anticipated to be on or
before ,
2014, although our board of directors may extend the primary
offering an additional year. Our board of directors has the
discretion to extend the offering period for the shares offered
under our distribution reinvestment plan up to the sixth
anniversary of the termination of the primary offering. We may
reallocate the shares of common stock being offered in this
prospectus between the primary offering and the distribution
reinvestment plan. The following is a summary of our
distribution reinvestment plan. See Appendix E to this
prospectus for the full text of the plan.
Pursuant to the distribution reinvestment plan, we generally
intend to offer shares for sale at a price of $9.50 per share
during the initial public offering of our shares and until such
time as our board of directors determines a reasonable estimate
of the value of our shares. Thereafter, the purchase price per
share under our distribution reinvestment plan will be the most
recently disclosed per share value as determined in accordance
with the valuation policy. If, at any time prior to the time
distributions are reinvested, we have distributed net sale
proceeds from the sale of one or more of our assets, or
otherwise have paid a special distribution to stockholders, the
offering price for shares offered under our distribution
reinvestment plan will be adjusted to take into account such
special distributions.
Notwithstanding the foregoing, our board of directors may
establish a different price for shares sold pursuant to the
plan, provided that if the new price so determined varies more
than 5% from the pricing that would have resulted from the
formula above, we will deliver a notice (which may be given by
letter, delivered by electronic means or given by including such
information in a Current Report on
Form 8-K
or in our annual or quarterly reports, all publicly filed with
the Securities and Exchange Commission) regarding the new price
to each plan participant at least 30 days prior to
the effective date of the new price. For more information about
our valuation policy, see Description of
Shares Valuation Policy.
Participants in our distribution reinvestment plan who purchased
shares of our common stock in the primary offering at a
discounted purchase price (due to volume or other applicable
discounts) may pay more for the shares they acquire pursuant to
the distribution reinvestment plan than their original purchase
price.
Investment
of Distributions
Our distribution reinvestment plan allows our stockholders, and,
subject to certain conditions set forth in the plan, any
stockholder or partner of any other publicly offered limited
partnership, REIT or other Cole-sponsored real estate program,
to elect to purchase shares of our common stock with our
distributions or distributions from such other programs. We have
the discretion to extend the offering period for the shares
being offered pursuant to this prospectus under our distribution
reinvestment plan beyond the termination of this offering until
we have sold all of the shares allocated to the plan through the
reinvestment of distributions. We may also offer shares pursuant
to a new registration statement.
No dealer manager fees or sales commissions will be paid with
respect to shares purchased pursuant to the distribution
reinvestment plan; therefore, we will retain all of the proceeds
from the reinvestment of distributions. Accordingly,
substantially all the economic benefits resulting from
distribution reinvestment purchases by stockholders from the
elimination of the dealer manager fee and selling commissions
will inure to the benefit of the participant. However,
purchasers of shares of our common stock who receive volume or
other discounts in the primary offering who elect to participate
in the distribution reinvestment plan may pay more for the
shares they acquire pursuant to the distribution reinvestment
plan than their original purchase price.
Pursuant to the terms of our distribution reinvestment plan, the
reinvestment agent, which currently is us, will act on behalf of
participants to reinvest the cash distributions they receive
from us. Stockholders
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participating in the distribution reinvestment plan may purchase
fractional shares. If sufficient shares are not available for
issuance under our distribution reinvestment plan, the
reinvestment agent will remit excess cash distributions to the
participants. Participants purchasing shares pursuant to our
distribution reinvestment plan will have the same rights as
stockholders with respect to shares purchased under the plan and
will be treated in the same manner as if such shares were issued
pursuant to our offering.
After the termination of the offering of our shares registered
for sale pursuant to the distribution reinvestment plan under
this prospectus and any subsequent offering, we may determine to
allow participants to reinvest cash distributions from us in
shares issued by another Cole-sponsored program only if all of
the following conditions are satisfied:
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prior to the time of such reinvestment, the participant has
received the final prospectus and any supplements thereto
offering interests in the subsequent Cole-sponsored program and
such prospectus allows investments pursuant to a distribution
reinvestment plan;
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a registration statement covering the interests in the
subsequent Cole-sponsored program has been declared effective
under the Securities Act;
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the offer and sale of such interests are qualified for sale
under applicable state securities laws;
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the participant executes the subscription agreement included
with the prospectus for the subsequent Cole-sponsored
program; and
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the participant qualifies under applicable investor suitability
standards as contained in the prospectus for the subsequent
Cole-sponsored program.
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Stockholders who invest in subsequent Cole-sponsored programs
pursuant to our distribution reinvestment plan will become
investors in such subsequent Cole-sponsored program and, as
such, will receive the same reports as other investors in the
subsequent Cole-sponsored program. No dealer manager fees or
sales commissions will be paid with respect to shares purchased
in any subsequent Cole-sponsored programs pursuant to our
distribution reinvestment plan.
Election
to Participate or Terminate Participation
A stockholder may participate in our distribution reinvestment
plan by making a written election to participate on his or her
subscription agreement at the time he or she subscribes for
shares. Any stockholder who has not previously elected to
participate in the distribution reinvestment plan may so elect
at any time by delivering to the reinvestment agent a completed
enrollment form or other written authorization required by the
reinvestment agent. Participation in our distribution
reinvestment plan will commence with the next distribution
payable after receipt of the participants notice, provided
it is received at least ten days prior to the last day of the
fiscal quarter, month or other period to which the distribution
relates.
Some brokers may determine not to offer their clients the
opportunity to participate in our distribution reinvestment
plan. Any prospective investor who wishes to participate in our
distribution reinvestment plan should consult with his or her
broker as to the brokers position regarding participation
in the distribution reinvestment plan.
We reserve the right to prohibit qualified retirement plans from
participating in our distribution reinvestment plan if such
participation would cause our underlying assets to constitute
plan assets of qualified retirement plans. See the
Investment by Tax-Exempt Entities and ERISA
Considerations section of this prospectus.
Each stockholder electing to participate in our distribution
reinvestment plan agrees that, if at any time he or she does not
meet the minimum income and net worth standards or cannot make
the other investor representations or warranties set forth in
the then current prospectus or subscription agreement relating
to such investment, he or she will promptly notify the
reinvestment agent in writing of that fact at the following
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address: Cole Credit Property Trust IV
c/o DST
Systems, Inc., P.O. Box 219312, Kansas City,
Missouri 64121-9312.
Subscribers should note that affirmative action in the form of
written notice to the reinvestment agent must be taken to
withdraw from participation in our distribution reinvestment
plan. A withdrawal from participation in our distribution
reinvestment plan will be effective with respect to
distributions for a quarterly, monthly or other distribution
period, as applicable, only if written notice of termination is
received at least ten days prior to the end of such distribution
period. In addition, a transfer of shares prior to the date our
shares are listed for trading on a national securities exchange,
which we have no intent to do at this time and which may never
occur, will terminate participation in the distribution
reinvestment plan with respect to such transferred shares as of
the first day of the distribution period in which the transfer
is effective, unless the transferee demonstrates to the
reinvestment agent that the transferee meets the requirements
for participation in the plan and affirmatively elects to
participate in the plan by providing to the reinvestment agent
an executed enrollment form or other written authorization
required by the reinvestment agent. Furthermore, in the event
that a participant requests a redemption of all of the
participants shares, the participant will be deemed to
have given written notice to the reinvestment agent, at the time
the redemption request is submitted, that the participant is
terminating his or her participation in the distribution
reinvestment plan, and is electing to receive all future
distributions in cash. This election will continue in effect
even if less than all of the participants shares are
redeemed unless the participant notifies the reinvestment agent
that he or she elects to resume participation in the plan.
Offers and sales of shares pursuant to the distribution
reinvestment plan must be registered in every state in which
such offers and sales are made, or otherwise exempt from such
registration requirements. Generally, such registrations are for
a period of one year. Thus, we may have to stop selling shares
pursuant to the distribution reinvestment plan in any states in
which our registration is not renewed or extended.
Reports
to Participants
Within 90 days after the end of each calendar year, the
reinvestment agent will mail to each participant a statement of
account describing, as to such participant, the distributions
received, the number of shares purchased, the purchase price for
such shares, the total shares purchased on behalf of the
participant during the prior year pursuant to our distribution
reinvestment plan and the information regarding the
participants participation in the plan.
Excluded
Distributions
Our board of directors may designate that certain cash or other
distributions attributable to net sales proceeds will be
excluded from distributions that may be reinvested in shares
under our distribution reinvestment plan. Accordingly, in the
event that proceeds attributable to the sale of an asset are
distributed to stockholders as an excluded distribution, such
amounts may not be reinvested in our shares pursuant to our
distribution reinvestment plan. The determination of whether all
or part of a distribution will be deemed to be an excluded
distribution is separate and unrelated to our requirement to
distribute 90% of our taxable REIT income. In its initial
determination of whether to make a distribution and the amount
of the distribution, our board of directors will consider, among
other factors, our cash position and our distribution
requirements as a REIT. Once our board of directors determines
to make the distribution, it will then consider whether all or
part of the distribution will be deemed to be an excluded
distribution. In most instances, we expect that our board of
directors would not deem any of the distribution to be an
excluded distribution. In that event, the amount distributed to
participants in our distribution reinvestment plan will be
reinvested in additional shares of our common stock. If all or a
portion of the distribution is deemed to be an excluded
distribution, the distribution will be made to all stockholders;
however, the excluded portion will not be reinvested. We
currently do not have any planned excluded distributions, which
will only be made, if at all, in addition to, not in lieu of,
regular distributions.
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Federal
Income Tax Considerations
Taxable participants will incur tax liability for income
allocated to them even though they have elected not to receive
their distributions in cash but rather to have their
distributions reinvested under our distribution reinvestment
plan. In addition, to the extent you purchase shares through our
distribution reinvestment plan at a discount to their fair
market value, you may be treated for tax purposes as receiving
an additional distribution equal to the amount of the discount.
At least until our offering stage is complete, we expect that
(i) we will sell shares under the distribution reinvestment
plan at $9.50 per share, and (ii) no secondary trading
market for our shares will develop. In the event that the fair
market value of one share is greater than $9.50 at the time of
the reinvestment, participants in our distribution reinvestment
plan may be treated as having received a distribution in excess
of the $9.50 reinvested by them under our distribution
reinvestment plan. You may be taxed on the amount of such
distribution as a dividend to the extent such distribution is
from current or accumulated earnings and profits, unless we have
designated all or a portion of the dividend as a capital gains
dividend.
Amendment,
Suspension and Termination
We reserve the right to amend our distribution reinvestment
plan, subject to certain limitations, upon ten days prior
written notice. The reinvestment agent also reserves the right
to suspend or terminate a participants individual
participation in the plan, and we reserve the right to suspend
or terminate our distribution reinvestment plan itself in our
sole discretion at any time, by sending ten days prior
written notice of suspension or termination to the individual
participant or, upon termination of the plan, to all
participants.
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OUR
OPERATING PARTNERSHIP AGREEMENT
General
CCPT IV OP, our operating partnership, was formed in July 2010
to acquire, own and operate properties on our behalf. It is
structured as an UPREIT. A property owner may contribute
property to an UPREIT in exchange for limited partnership units
on a tax-free basis. This enables us to acquire real property
from owners who desire to defer taxable gain that would
otherwise be recognized by such owners upon the disposition of
their property. This structure may also be attractive for
property owners that desire to diversify their investments and
gain benefits afforded to owners of stock in a REIT. In
addition, CCPT IV OP is structured to ultimately make
distributions with respect to limited partnership units that
will be equivalent to the distributions made to holders of our
common stock. A limited partner in CCPT IV OP may later exchange
his or her limited partnership units in CCPT IV OP for shares of
our common stock in a taxable transaction. For purposes of
satisfying the asset and income tests for qualification as a
REIT for tax purposes, the REITs proportionate share of
the assets and income of an UPREIT, such as CCPT IV OP, are
deemed to be assets and income of the REIT.
The partnership agreement for CCPT IV OP contains provisions
that would allow, under certain circumstances, other entities,
including other Cole-sponsored programs, to merge into or cause
the exchange or conversion of their interest in that entity for
interests of CCPT IV OP. In the event of such a merger, exchange
or conversion, CCPT IV OP would issue additional limited
partnership interests, which would be entitled to the same
exchange rights as other limited partnership interests of CCPT
IV OP. As a result, any such merger, exchange or conversion
ultimately could result in the issuance of a substantial number
of shares of our common stock, thereby diluting the percentage
ownership interest of other stockholders.
We will hold substantially all of our assets through CCPT IV OP.
We are the sole general partner of CCPT IV OP, and our advisor
currently is the only limited partner of CCPT IV OP. As the sole
general partner of CCPT IV OP, we have the exclusive power to
manage and conduct the business of CCPT IV OP. We will present
our financial statements on a consolidated basis to include CCPT
IV OP.
The following is a summary of certain provisions of the
partnership agreement of CCPT IV OP. This summary is not
complete and is qualified by the specific language in the
partnership agreement. For more detail, you should refer to the
partnership agreement, itself, which we have filed with the
Securities and Exchange Commission as an exhibit to the
registration statement of which this prospectus is a part.
Capital
Contributions
As we accept subscriptions for shares, we will transfer the net
proceeds of the offering to CCPT IV OP as a capital
contribution. However, we will be deemed to have made capital
contributions in the amount of the gross offering proceeds
received from investors. CCPT IV OP will be deemed to have
simultaneously paid the selling commissions and other costs
associated with the offering. If CCPT IV OP requires additional
funds at any time in excess of capital contributions made by our
advisor and us (which are minimal in amount), or from
borrowings, we may borrow funds from a financial institution or
other lender and lend such funds to CCPT IV OP on the same terms
and conditions as are applicable to our borrowing of such funds.
In addition, we are authorized to cause CCPT IV OP to issue
partnership interests for less than fair market value if we
conclude in good faith that such issuance is in the best
interests of CCPT IV OP and us.
Operations
The partnership agreement requires that CCPT IV OP be operated
in a manner that will enable us to (1) satisfy the
requirements for being classified as a REIT for tax purposes,
(2) avoid any federal income or excise tax liability, and
(3) ensure that CCPT IV OP will not be classified as a
publicly traded partnership for purposes of
Section 7704 of the Internal Revenue Code, which
classification could result in CCPT IV OP being taxed as a
corporation, rather than as a partnership. See the Risk
Factors Federal Income Tax Risks and the
Federal Income Tax Considerations Tax Aspects
of Our Operating Partnership Classification as a
Partnership sections of this prospectus.
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The partnership agreement provides that CCPT IV OP will
distribute cash flow from operations as follows:
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first, to us until we have received aggregate distributions with
respect to the current fiscal year equal to the minimum amount
necessary for us to distribute to our stockholders to enable us
to maintain our status as a REIT under the Internal Revenue Code
and to avoid any federal income or excise tax liability with
respect to such fiscal year;
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next, to the limited partners until our limited partners have
received aggregate distributions equal to the amount that would
have been distributed to them with respect to all prior fiscal
years had all CCPT IV OP income for all such prior fiscal years
been allocated to us, each limited partner held a number of our
common shares equal to the number of CCPT IV OP units that it
holds and the REIT had distributed all such amounts to our
stockholders (including the limited partners);
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next, after the establishment of reasonable cash reserves for
our expenses and obligations of CCPT IV OP, to us and to the
limited partners until each partner has received aggregate
distributions with respect to the current fiscal year and all
fiscal years had all CCPT IV OP income for the current fiscal
year and all such prior fiscal years been allocated to us, our
income with respect to the current fiscal year and each such
prior fiscal year equaled the minimum amount necessary to
maintain our status as a REIT under the Internal Revenue Code,
each limited partner held a number of common shares equal to the
number of CCPT IV OP units that we hold and we had distributed
all such amounts to our stockholders (including the limited
partners); and
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finally, to us and the limited partners in accordance with the
partners percentage interests in CCPT IV OP.
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Similarly, the partnership agreement of CCPT IV OP provides that
taxable income is allocated to the limited partners of CCPT IV
OP in accordance with their relative percentage interests such
that a holder of one unit of limited partnership interest in
CCPT IV OP will be allocated taxable income for each taxable
year in an amount equal to the amount of taxable income to be
recognized by a holder of one of our shares, subject to
compliance with the provisions of Sections 704(b) and
704(c) of the Internal Revenue Code and corresponding Treasury
Regulations. Losses, if any, generally will be allocated among
the partners in accordance with their respective percentage
interests in CCPT IV OP.
Upon the liquidation of CCPT IV OP, after payment of debts and
obligations, any remaining assets of CCPT IV OP will be
distributed to partners with positive capital accounts in
accordance with their respective positive capital account
balances. If we were to have a negative balance in our capital
account following a liquidation, we would be obligated to
contribute cash to CCPT IV OP equal to such negative balance for
distribution to other partners, if any, having positive balances
in such capital accounts.
In addition to the administrative and operating costs and
expenses incurred by CCPT IV OP in acquiring and operating real
properties, CCPT IV OP will pay or reimburse us for all of our
administrative costs and expenses. Such expenses will include
the following, among others:
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all expenses relating to the formation and continuity of our
existence;
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all expenses relating to the public offering and registration of
securities by us;
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all expenses associated with the preparation and filing of any
periodic reports by us under federal, state or local laws or
regulations;
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all expenses associated with compliance by us with applicable
laws, rules and regulations;
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all costs and expenses relating to any issuance or redemption of
partnership interests or shares of our common stock; and
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all of our other operating or administrative costs incurred in
the ordinary course of our business on behalf of CCPT IV OP.
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All claims between the partners of CCPT IV OP arising out of the
partnership agreement are subject to binding arbitration.
Exchange
Rights
The limited partners of CCPT IV OP, including our advisor, have
the right to cause their limited partnership units to be
redeemed by CCPT IV OP for cash or purchased by us for cash or
shares of our common stock, as elected by us. In either event,
the cash amount to be paid will be equal to the cash value of
the number of our shares that would be issuable if the limited
partnership units were exchanged for our shares on a
one-for-one
basis. If we elect to purchase the limited partnership units
with our shares, we will pay one share of our common stock for
each limited partnership unit purchased. These exchange rights
may not be exercised, however, if and to the extent that the
delivery of shares upon exercise would (1) result in any
person owning shares in excess of our ownership limits,
(2) result in shares being owned by fewer than
100 persons, (3) cause us to be closely
held within the meaning of Section 856(h) of the
Internal Revenue Code, (4) cause us to own 10% or more of
the ownership interests in a tenant within the meaning of
Section 856(d)(2)(B) of the Internal Revenue Code, or
(5) cause the acquisition of shares by a redeemed limited
partner to be integrated with any other distribution
of our shares for purposes of complying with the Securities Act.
Subject to the foregoing, limited partners of CCPT IV OP may
exercise their exchange rights at any time after one year
following the date of issuance of their limited partnership
units. However, a limited partner may not deliver more than two
exchange notices each calendar year and may not exercise an
exchange right for less than 1,000 limited partnership units,
unless such limited partner holds less than 1,000 units, in
which case he must exercise his exchange right for all of his
units. We do not expect to issue any of the shares of common
stock offered hereby to limited partners of CCPT IV OP in
exchange for their limited partnership units. Rather, in the
event a limited partner of CCPT IV OP exercises its exchange
rights and we elect to purchase the limited partnership units
with shares of our common stock, we expect to issue unregistered
shares of common stock, or subsequently registered shares of
common stock, in connection with such transaction.
Amendments
to the Partnership Agreement
Our consent, as the general partner of CCPT IV OP, is required
for any amendment to the partnership agreement. We, as the
general partner of CCPT IV OP, and without the consent of any
limited partner, may amend the partnership agreement in any
manner, provided, however, that the consent of limited partners
holding more than 50% of the interests of the limited partners
is required for the following:
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any amendment affecting the conversion factor or the exchange
right in a manner adverse to the limited partners;
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any amendment that would adversely affect the rights of the
limited partners to receive the distributions payable to them
pursuant to the partnership agreement (other than the issuance
of additional limited partnership interests);
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any amendment that would alter the allocations of CCPT IV
OPs profit and loss to the limited partners (other than
the issuance of additional limited partnership interests);
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any amendment that would impose on the limited partners any
obligation to make additional capital contributions to CCPT IV
OP; and
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any amendment pursuant to a plan of merger, plan of exchange or
plan of conversion, subject to certain exceptions as set forth
in the partnership agreement.
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Termination
of the Partnership
CCPT IV OP will have perpetual duration, unless it is dissolved
earlier upon the first to occur of the following:
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we declare for bankruptcy or dissolve, are removed or withdraw
from the partnership, provided, however, that the remaining
partners may decide to continue the business;
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ninety days after the sale or other disposition of all or
substantially all of the assets of the partnership;
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the exchange of all limited partnership units (other than any
units held by us or our affiliates); and
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we elect, as the general partner, to dissolve the partnership.
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Transferability
of Interests
We may not (1) voluntarily withdraw as the general partner
of CCPT IV OP, (2) engage in any merger, consolidation or
other business combination or sale of all or substantially all
of our assets (other than in connection with a change in our
state of incorporation or organizational form), or
(3) transfer our general partnership interest in CCPT IV OP
(except to a wholly-owned subsidiary), unless the transaction in
which such withdrawal, business combination or transfer occurs
results in the limited partners receiving or having the right to
receive an amount of cash, securities or other property equal in
value to the amount they would have received if they had
exercised their exchange rights immediately prior to such
transaction or unless, in the case of a merger or other business
combination, the successor entity contributes substantially all
of its assets to CCPT IV OP in return for an interest in CCPT IV
OP and agrees to assume all obligations of the general partner
of CCPT IV OP. We may also enter into a business combination or
transfer our general partnership interest upon the receipt of
the consent of a
majority-in-interest
of the limited partners of CCPT IV OP, other than our advisor
and other affiliates of Christopher H. Cole. With certain
exceptions, a limited partner may not transfer its interests in
CCPT IV OP, in whole or in part, without our written consent as
general partner.
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FEDERAL
INCOME TAX CONSIDERATIONS
General
The following is a summary of material federal income tax
considerations associated with an investment in shares of our
common stock. This summary does not address all possible tax
considerations that may be material to an investor and does not
constitute tax advice. Moreover, this summary does not deal with
all tax aspects that might be relevant to you, as a prospective
stockholder, in light of your personal circumstances, nor does
it deal with particular types of stockholders that are subject
to special treatment under the Internal Revenue Code, such as
insurance companies, tax-exempt organizations or financial
institutions or broker-dealers.
The Internal Revenue Code provisions governing the federal
income tax treatment of REITs are highly technical and complex,
and this summary is qualified in its entirety by the express
language of applicable Internal Revenue Code provisions,
treasury regulations promulgated thereunder (Treasury
Regulations) and administrative and judicial interpretations
thereof.
We urge you, as a prospective investor, to consult your own tax
advisor regarding the specific tax consequences to you of a
purchase of shares, ownership and sale of the shares and of our
election to be taxed as a REIT. These consequences include the
federal, state, local, foreign and other tax consequences of
such purchase, ownership, sale and election.
Opinion
of Counsel
Morris, Manning & Martin, LLP acts as our counsel, has
reviewed this summary and is of the opinion that it fairly
summarizes the federal income tax considerations addressed that
are material to our stockholders. It is also the opinion of our
counsel that we will qualify to be taxed as a REIT under the
Internal Revenue Code for our taxable year ending
December 31, 2012, or the first year during which we
commence material operations, provided that we operate in
accordance with various assumptions and the factual
representations we made to counsel concerning our business,
assets and operations. We emphasize that all opinions issued by
Morris, Manning & Martin, LLP are based on various
assumptions and are conditioned upon the assumptions and
representations we will make concerning certain factual matters
related to our business and properties. Moreover, our
qualification for taxation as a REIT depends on our ability to
meet the various qualification tests imposed under the Internal
Revenue Code discussed below, the results of which will not be
reviewed by Morris, Manning & Martin, LLP.
Accordingly, the actual results of our operations for any one
taxable year may not satisfy these requirements. See the
Risk Factors Federal Income Tax Risks
section of this prospectus.
The statements made in this section and in the opinion of
Morris, Manning & Martin, LLP are based upon existing
law and Treasury Regulations, as currently applicable, currently
published administrative positions of the Internal Revenue
Service and judicial decisions, all of which are subject to
change, either prospectively or retroactively. We cannot assure
you that any changes will not modify the conclusions expressed
in counsels opinion. Moreover, an opinion of counsel is
not binding on the Internal Revenue Service, and we cannot
assure you that the Internal Revenue Service will not
successfully challenge our status as a REIT.
Taxation
of the Company
We plan to make an election to be taxed as a REIT under
Sections 856 through 860 of the Internal Revenue Code,
effective for our taxable year ending December 31, 2012, or
the first year during which we commence material operations. In
the opinion of Morris, Manning & Martin, LLP,
commencing with such taxable year, we will be organized and will
operate in such manner to qualify for taxation as a REIT under
the Internal Revenue Code. However, no assurance can be given
that we will operate in a manner so as to remain qualified as a
REIT. Pursuant to our charter, our board of directors has the
authority to make any tax elections on our behalf that, in its
sole judgment, are in our best interests. This authority
includes the ability to elect not to qualify as a REIT for
federal income tax purposes or, after qualifying as a REIT, to
revoke or otherwise
141
terminate our status as a REIT. Our board of directors has the
authority under our charter to make these elections without the
necessity of obtaining the approval of our stockholders. In
addition, our board of directors has the authority to waive any
restrictions and limitations contained in our charter that are
intended to preserve our status as a REIT during any period in
which our board of directors has determined not to pursue or
preserve our status as a REIT.
Although REITs continue to receive substantially better tax
treatment than entities taxed as corporations, it is possible
that future legislation would cause a REIT to be a less
advantageous tax status for companies that invest in real
estate, and it could become more advantageous for such companies
to elect to be taxed for federal income tax purposes as a
corporation. As a result, our charter provides our board of
directors with the ability, under certain circumstances, to
elect not to qualify us as a REIT or, after we have qualified as
a REIT, to revoke or otherwise terminate our REIT election and
cause us to be taxed as a corporation, without the vote of our
stockholders. Our board of directors has fiduciary duties to us
and to our investors and would only cause such changes in our
tax treatment if it determines in good faith that such changes
are in the best interests of our stockholders.
If we qualify for taxation as a REIT, we generally will not be
subject to federal corporate income taxes on that portion of our
ordinary income or capital gain that we distribute currently to
our stockholders, because the REIT provisions of the Internal
Revenue Code generally allow a REIT to deduct distributions paid
to its stockholders. This substantially eliminates the federal
double taxation on earnings (taxation at both the
corporate level and stockholder level) that usually results from
an investment in a corporation.
Even if we qualify for taxation as a REIT, we are subject to
federal income taxation as follows:
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we will be taxed at regular corporate rates on our undistributed
REIT taxable income, including undistributed net capital gains;
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under some circumstances, we will be subject to alternative
minimum tax;
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if we have net income from the sale or other disposition of
foreclosure property (described below) that is held
primarily for sale to customers in the ordinary course of
business or other non-qualifying income from foreclosure
property, we will be subject to tax at the highest corporate
rate on that income;
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if we have net income from prohibited transactions (described
below), our income from such prohibited transaction will be
subject to a 100% tax;
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if we fail to satisfy either of the 75% or 95% gross income
tests (discussed below) but have nonetheless maintained our
qualification as a REIT because applicable conditions have been
met, we will be subject to a 100% tax on an amount equal to the
greater of the amount by which we fail the 75% or 95% test
multiplied by a fraction calculated to reflect our profitability;
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if we fail to satisfy the asset tests (discussed below) and
continue to qualify as a REIT because we meet other
requirements, we will have to pay a tax equal to the greater of
$50,000 or the highest corporate income tax rate multiplied by
the net income generated by the non-qualifying assets during the
time we failed to satisfy the asset tests;
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if we fail to satisfy REIT requirements other than the gross
income and asset tests, we can continue to qualify as a REIT if
our failure was due to reasonable cause and not willful neglect,
but we must pay $50,000 for each failure;
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if we fail to distribute during each year at least the sum of
(i) 85% of our REIT ordinary income for the year,
(ii) 95% of our REIT capital gain net income for such year
and (iii) any undistributed taxable income from prior
periods, we will be subject to a 4% excise tax on the excess of
the required distribution over the amounts actually
distributed; and
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if we acquire any asset from a C corporation (
i.e.
, a
corporation generally subject to corporate-level tax) in a
carryover-basis transaction and we subsequently recognize gain
on the disposition of the asset during the ten-year period
beginning on the date on which we acquired the asset, then a
portion of the
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gains may be subject to tax at the highest regular corporate
rate, pursuant to guidelines issued by the Internal Revenue
Service (this is known as the
Built-In-Gains-Tax).
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Foreclosure property is real property and any
personal property incident to such real property (1) that
is acquired by a REIT as the result of the REIT having bid in
the property at foreclosure, or having otherwise acquired
ownership or possession of the property by agreement or process
of law, after there was a default (or default was imminent) on a
lease of the property or on a mortgage loan held by the REIT and
secured by the property, (2) the related loan or lease of
which was acquired by the REIT at a time when default was not
imminent or anticipated and (3) for which such REIT makes a
proper election to treat the property as foreclosure property. A
prohibited transaction is generally a sale or other
disposition of property (other than foreclosure property) that
is held primarily for sale to customers in the ordinary course
of a REITs trade or business, a determination that depends
on the particular facts and circumstances surrounding each
property.
Requirements
for Qualification as a REIT
In order for us to qualify as a REIT, we must meet, and we must
continue to meet, the requirements discussed below relating to
our organization, sources of income, nature of assets,
distributions of income to our stockholders and recordkeeping.
Organizational
Requirements
In order to qualify for taxation as a REIT under the Internal
Revenue Code, we must:
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be a domestic corporation;
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elect to be taxed as a REIT and satisfy relevant filing and
other administrative requirements;
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be managed by one or more trustees or directors;
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have transferable shares;
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not be a financial institution or an insurance company;
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use a calendar year for federal income tax purposes;
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have at least 100 stockholders for at least 335 days of
each taxable year of 12 months; and
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not be closely held.
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As a Maryland corporation, we satisfy the first requirement, and
we intend to file an election to be taxed as a REIT when we file
our tax return with the Internal Revenue Service for the taxable
year ending December 31, 2012, or the first year during
which we commence material operations. In addition, we are
managed by a board of directors, we have transferable shares and
we will not operate as a financial institution or insurance
company. We utilize the calendar year for federal income tax
purposes.
We would be treated as closely held only if five or fewer
individuals or certain tax-exempt entities own, directly or
indirectly, more than 50% (by value) of our shares at any time
during the last half of our taxable year. For purposes of the
closely held test, the Internal Revenue Code generally permits a
look-through for pension funds and certain other tax-exempt
entities to the beneficiaries of the entity to determine if the
REIT is closely held. As the date of this prospectus, we do not
meet the requirement of having more than 100 stockholders
and we are closely held. However, these requirements do not
apply until after the first taxable year for which an election
is made to be taxed as a REIT. We anticipate issuing sufficient
shares with sufficient diversity of ownership pursuant to this
offering to allow us to satisfy these requirements in the
taxable year ending December 31, 2012, or the first year
during which we commence material operations. In addition, our
charter provides for restrictions regarding transfer of shares
that are intended to assist us in continuing to satisfy these
share ownership requirements. Such transfer restrictions are
described in the Description of Shares
Restrictions on Ownership and Transfer section of this
prospectus. These provisions permit us to refuse to recognize
certain transfers of shares that would tend to violate these
REIT provisions. We can offer no assurance that our refusal to
recognize a transfer will be effective. However, based
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on the foregoing, we expect, for the year ending
December 31, 2012, to satisfy the organizational
requirements, including the share ownership requirements,
required for qualifying as a REIT under the Internal Revenue
Code.
Notwithstanding compliance with the share ownership requirements
outlined above, tax-exempt stockholders may be required to treat
all or a portion of their distributions from us as UBTI if
tax-exempt stockholders, in the aggregate, exceed certain
ownership thresholds set forth in the Internal Revenue Code. See
Treatment of Tax-Exempt Stockholders
below.
Ownership
of Interests in Partnerships and Qualified REIT
Subsidiaries
In the case of a REIT that is a partner in a partnership,
Treasury Regulations provide that the REIT is deemed to own its
proportionate share, based on its interest in partnership
capital, of the assets of the partnership and is deemed to have
earned its allocable share of partnership income. Also, if a
REIT owns a qualified REIT subsidiary, which is defined as a
corporation wholly-owned by a REIT that does not elect to be
taxed as a taxable REIT subsidiary (TRS) under the
Internal Revenue Code, the REIT will be deemed to own all of the
subsidiarys assets and liabilities and it will be deemed
to be entitled to treat the income of that subsidiary as its
own. In addition, the character of the assets and gross income
of the partnership or qualified REIT subsidiary shall retain the
same character in the hands of the REIT for purposes of
satisfying the gross income tests and asset tests set forth in
the Internal Revenue Code.
Operational
Requirements Gross Income Tests
If we qualify for taxation as a REIT, to maintain our
qualification as a REIT, we must, on an annual basis, satisfy
the following gross income requirements:
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At least 75% of our gross income, excluding gross income from
prohibited transactions, for each taxable year must be derived
directly or indirectly from investments relating to real
property or mortgages on real property. Gross income includes
rents from real property and, in some circumstances,
interest, but excludes gross income from dispositions of
property held primarily for sale to customers in the ordinary
course of a trade or business. Such dispositions are referred to
as prohibited transactions. This is known as the 75%
Income Test.
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At least 95% of our gross income, excluding gross income from
prohibited transactions, for each taxable year must be derived
from the real property investments described above and from
distributions, interest and gains from the sale or disposition
of stock or securities or from any combination of the foregoing.
This is known as the 95% Income Test.
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The rents we receive, or that we are deemed to receive, qualify
as rents from real property for purposes of
satisfying the gross income requirements for a REIT only if the
following conditions are met:
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the amount of rent received from a tenant generally must not be
based in whole or in part on the income or profits of any
person; however, an amount received or accrued generally will
not be excluded from the term rents from real
property solely by reason of being based on a fixed
percentage or percentages of gross receipts or sales;
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rents received from a tenant will not qualify as rents
from real property if an owner of 10% or more of the REIT
directly or constructively owns 10% or more of the tenant or a
subtenant of the tenant (in which case only rent attributable to
the subtenant is disqualified);
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if rent attributable to personal property leased in connection
with a lease of real property is greater than 15% of the total
rent received under the lease, then the portion of rent
attributable to the personal property will not qualify as
rents from real property; and
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the REIT must not operate or manage the property or furnish or
render services to tenants, other than through an
independent contractor who is adequately compensated
and from whom the REIT does not derive any income. However, a
REIT may provide services with respect to its properties, and
the income derived therefrom will qualify as rents from
real property if the services are usually or
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customarily rendered in connection with the rental of
space only and are not otherwise considered rendered to
the occupant. Even if the services with respect to a
property are impermissible tenant services, the income derived
therefrom will qualify as rents from real property
if such income does not exceed 1% of all amounts received or
accrued with respect to that property. Additionally, a REIT may,
under certain circumstances, furnish or render services to
tenants that are not usually or customarily rendered through a
TRS. Subject to certain exceptions, a TRS is any corporation,
other than a REIT, in which we directly or indirectly own stock
and with respect to which a joint election has been made by us
and the corporation to treat the corporation as a TRS of ours.
It also includes any corporation, other than a REIT or a
qualified REIT subsidiary, in which a TRS of ours owns, directly
or indirectly, more than 35% of the voting power or value.
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We will be paid interest on the mortgage loans that we make or
acquire. All interest qualifies under the 95% Income Test. If a
mortgage loan is secured exclusively by real property, all of
such interest will also qualify for the 75% Income Test. If both
real property and other property secure the mortgage loan, then
all of the interest on such mortgage loan will also qualify for
the 75% Income Test if the amount of the loan did not exceed the
fair market value of the real property at the time of the loan
commitment.
If we acquire ownership of property by reason of the default of
a borrower on a loan or possession of property by reason of a
tenant default, if the property qualifies and we elect to treat
it as foreclosure property, the income from the property will
qualify under the 75% Income Test and the 95% Income Test
notwithstanding its failure to satisfy these requirements for
three years, or if extended for good cause, up to a total of six
years. In that event, we must satisfy a number of complex rules,
one of which is a requirement that we operate the property
through an independent contractor. We will be subject to tax on
that portion of our net income from foreclosure property that
does not otherwise qualify under the 75% Income Test.
Prior to investing the offering proceeds in properties, we may
satisfy the 75% Income Test and the 95% Income Test by investing
in liquid assets such as government securities or certificates
of deposit, but earnings from those types of assets are
qualifying income under the 75% Income Test only for one year
from the receipt of proceeds. Accordingly, to the extent that
offering proceeds have not been invested in properties prior to
the expiration of this one-year period, in order to satisfy the
75% Income Test, we may invest the offering proceeds in less
liquid investments such as mortgage-backed securities, maturing
mortgage loans purchased from mortgage lenders or shares in
other REITs. We expect to receive proceeds from the offering in
a series of closings and to trace those proceeds for purposes of
determining the one-year period for new capital
investments.
Except for amounts received with respect to certain investments
of cash reserves, we anticipate that substantially all of our
gross income will be derived from sources that will allow us to
satisfy the income tests described above; however, we can give
no assurance in this regard.
Notwithstanding our failure to satisfy one or both of the 75%
Income Test and the 95% Income Test for any taxable year, we may
still qualify as a REIT for that year if we are eligible for
relief under specific provisions of the Internal Revenue Code.
These relief provisions generally will be available if:
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our failure to meet these tests was due to reasonable cause and
not due to willful neglect;
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we attach a schedule of our income sources to our federal income
tax return; and
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any incorrect information on the schedule is not due to fraud
with intent to evade tax.
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It is not possible, however, to state whether, in all
circumstances, we would be entitled to the benefit of these
relief provisions. For example, if we fail to satisfy the gross
income tests because nonqualifying income that we intentionally
earn exceeds the limits on this income, the Internal Revenue
Service could conclude that our failure to satisfy the tests was
not due to reasonable cause. As discussed above in
Taxation of the Company, even if these
relief provisions apply, a tax would be imposed with respect to
the excess net income.
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Operational
Requirements Asset Tests
At the close of each quarter of our taxable year, we also must
satisfy the following three tests relating to the nature and
diversification of our assets:
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First, at least 75% of the value of our total assets must be
represented by real estate assets, cash, cash items and
government securities. The term real estate assets
includes real property, mortgages on real property, shares in
other qualified REITs and a proportionate share of any real
estate assets owned by a partnership in which we are a partner
or of any qualified REIT subsidiary of ours.
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Second, no more than 25% of our total assets may be represented
by securities other than those in the 75% asset class.
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Third, of the investments included in the 25% asset class,
except with respect to TRS and assets satisfying the 75% test,
the value of any one issuers securities may not exceed 5%
of the value of our total assets. Additionally, we may not own
more than 10% of any one issuers outstanding securities
measured by either voting power or value.
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Fourth, no more than 25% of the value of our total assets may
consist of the securities of one or more TRSs.
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The third asset test must generally be met for any quarter in
which we acquire securities, and we have up to six months to
dispose of sufficient assets or otherwise to cure a failure to
satisfy this asset test, provided the failure is due to the
ownership of assets the total value of which does not exceed the
lesser of (1) 1% of our assets at the end of the relevant
quarter or (2) $10,000,000.
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If we meet the asset tests at the close of any quarter, we will
not lose our REIT status for a failure to satisfy the asset
tests at the end of a later quarter if such failure occurs
solely because of changes in asset values. If our failure to
satisfy the asset tests results from an acquisition of
securities or other property during a quarter, we can cure the
failure by disposing of a sufficient amount of nonqualifying
assets within 30 days after the close of that quarter. We
will maintain adequate records of the value of our assets to
ensure compliance with the asset tests and will take other
action within 30 days after the close of any quarter as may
be required to cure any noncompliance.
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For violations of any of the asset tests due to reasonable cause
that are larger than $10,000,000, we may avoid disqualification
as a REIT after the 30 day cure period by taking certain
steps, including the disposition of sufficient assets within the
six month period described above to meet the applicable asset
test, paying a tax equal to the greater of $50,000 or the
highest corporate tax rate multiplied by the net income
generated by the non-qualifying assets during the period of time
that the assets were held as non-qualifying assets, and filing a
schedule with the Internal Revenue Service that describes the
non-qualifying assets.
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Operational
Requirements Annual Distribution
Requirement
In order to be taxed as a REIT, we are required to make
distributions, other than capital gain distributions, to our
stockholders each year in the amount of at least 90% of our REIT
taxable income, which is computed without regard to the
distributions paid deduction and our capital gain and subject to
certain other potential adjustments.
While we must generally make distributions in the taxable year
to which they relate, we may also pay distributions in the
following taxable year if (1) they are declared before we
timely file our federal income tax return for the taxable year
in question, and (2) they are made on or before the first
regular distribution payment date after the declaration.
Even if we satisfy the foregoing distribution requirement and,
accordingly, qualify as a REIT for tax purposes, we will still
be subject to tax on the excess of our net capital gain and our
REIT taxable income, as adjusted, over the amount of
distributions made to stockholders.
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In addition, we will be subject to a 4% excise tax on the excess
of the amount of such required distributions over amounts
actually distributed during such year if we fail to distribute
during each calendar year at least the sum of:
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85% of our ordinary income for that year;
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95% of our capital gain net income other than the capital gain
net income that we elect to retain and pay tax on for that
year; and
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any undistributed taxable income from prior periods.
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We intend to make timely distributions sufficient to satisfy
this requirement. It is possible, however, that we may
experience timing differences between (1) the actual
receipt of cash and payment of deductible expenses, and
(2) the recognition of income. It is also possible that we
may be allocated a share of net capital gain attributable to the
sale of depreciated property that exceeds our allocable share of
cash attributable to that sale.
In such circumstances, we may have less cash than is necessary
to meet our annual distribution requirement or to avoid income
or excise taxation on certain undistributed income. We may find
it necessary in such circumstances to arrange for financing or
raise funds through the issuance of additional shares in order
to meet our distribution requirements, or we may pay taxable
stock distributions to meet the distribution requirement.
If we fail to satisfy the distribution requirement for any
taxable year by reason of a later adjustment to our taxable
income made by the Internal Revenue Service, we may be able to
pay deficiency distributions in a later year and
include such distributions in our deductions for distributions
paid for the earlier year. In such event, we may be able to
avoid being taxed on amounts distributed as deficiency
distributions, but we would be required in such circumstances to
pay interest to the Internal Revenue Service based upon the
amount of any deduction taken for deficiency distributions for
the earlier year.
We may also elect to retain, rather than distribute, our net
long-term capital gains. The effect of such an election would be
as follows:
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we would be required to pay the tax on these gains;
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our stockholders, while required to include their proportionate
share of the undistributed long-term capital gains in income,
would receive a credit or refund for their share of the tax paid
by us; and
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the basis of a stockholders shares would be increased by
the difference between the designated amount included in the
stockholders long-term capital gains and the tax deemed
paid with respect to such shares.
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In computing our REIT taxable income, we will use the accrual
method of accounting and depreciate depreciable property under
the alternative depreciation system. We are required to file an
annual federal income tax return, which, like other corporate
returns, is subject to examination by the Internal Revenue
Service.
Because the tax law requires us to make many judgments regarding
the proper treatment of a transaction or an item of income or
deduction, it is possible that the Internal Revenue Service will
challenge positions we take in computing our REIT taxable income
and our distributions. Issues could arise, for example, with
respect to the allocation of the purchase price of properties
between depreciable or amortizable assets and non-depreciable or
non-amortizable
assets such as land and the current deductibility of fees paid
to our advisor or its affiliates. If the Internal Revenue
Service successfully challenges our characterization of a
transaction or determination of our REIT taxable income, we
could be found to have failed to satisfy a requirement for
qualification as a REIT. If, as a result of a challenge, we are
determined to have failed to satisfy the distribution
requirements for a taxable year, we would be disqualified as a
REIT unless we were permitted to pay a deficiency distribution
to our stockholders and pay interest thereon to the Internal
Revenue Service, as provided by the Internal Revenue Code. A
deficiency distribution cannot be used to satisfy the
distribution
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requirement, however, if the failure to meet the requirement is
not due to a later adjustment to our income by the Internal
Revenue Service.
Certain taxable stock dividends may satisfy the 90% annual
distribution requirement. The Internal Revenue Service has ruled
that a distribution of stock by a REIT, whether publicly traded
on an established securities market or not, may be treated as a
distribution of property that qualifies for the 90% annual
distribution requirement. Currently, these rulings require,
among other things, that the distribution is declared on or
before December 31, 2012, and with respect to a taxable
year ending on or before December 31, 2011.
Operational
Requirements Recordkeeping
In order to continue to qualify as a REIT, we must maintain
records as specified in applicable Treasury Regulations.
Further, we must request, on an annual basis, information
designed to disclose the ownership of our outstanding shares. We
intend to comply with such requirements.
Failure
to Qualify as a REIT
If we fail to qualify as a REIT for any reason in a taxable year
and applicable relief provisions do not apply, we will be
subject to tax, including any applicable alternative minimum
tax, on our taxable income at regular corporate rates. We will
not be able to deduct distributions paid to our stockholders in
any year in which we fail to qualify as a REIT. We also will be
disqualified for the four taxable years following the year
during which qualification was lost unless we are entitled to
relief under specific statutory provisions. See the Risk
Factors Federal Income Tax Risks section of
this prospectus.
Sale-Leaseback
Transactions
Some of our investments may be in the form of sale-leaseback
transactions. In most instances, depending on the economic terms
of the transaction, we will be treated for federal income tax
purposes as either the owner of the property or the holder of a
debt secured by the property. We do not expect to request an
opinion of counsel concerning the status of any leases of
properties as true leases for federal income tax purposes.
The Internal Revenue Service may take the position that a
specific sale-leaseback transaction that we treat as a true
lease is not a true lease for federal income tax purposes but
is, instead, a financing arrangement or loan. We may also
structure some sale-leaseback transactions as loans. In this
event, for purposes of the asset tests and the 75% Income Test,
each such loan likely would be viewed as secured by real
property to the extent of the fair market value of the
underlying property. We expect that, for this purpose, the fair
market value of the underlying property would be determined
without taking into account our lease. If a sale-leaseback
transaction were so recharacterized, we might fail to satisfy
the asset tests or the income tests and, consequently, lose our
REIT status effective with the year of recharacterization.
Alternatively, the amount of our REIT taxable income could be
recalculated, which might also cause us to fail to meet the
distribution requirement for a taxable year.
Taxation
of U.S. Stockholders
Definition
In this section, the phrase U.S. stockholder
means a holder of shares of our common stock that for federal
income tax purposes is:
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a citizen or resident of the United States;
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a corporation, partnership or other entity created or organized
in or under the laws of the United States or of any political
subdivision thereof;
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an estate or trust, the income of which is subject to
U.S. federal income taxation regardless of its
source; or
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a trust, if a U.S. court is able to exercise primary
supervision over the administration of the trust and one or more
U.S. persons have the authority to control all substantial
decisions of the trust.
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For any taxable year for which we qualify for taxation as a
REIT, amounts distributed to U.S. stockholders will be
taxed as described below.
Distributions
Generally
Distributions to U.S. stockholders, other than capital gain
distributions discussed below, will constitute distributions up
to the amount of our current or accumulated earnings and profits
and will be taxable to the stockholders as ordinary income.
Individuals receiving qualified dividends, which are
distributions from domestic and certain qualifying foreign
subchapter C corporations, may be taxed at lower rates on
distributions (at rates applicable to long-term capital gains,
currently at a maximum rate of 15%) provided certain holding
period requirements are met. Because, however, we will be taxed
as a REIT, individuals receiving distributions from us generally
will not be eligible for the lower rates on distributions except
with respect to the portion of any distribution that
(a) represents distributions being passed through to us
from a corporation in which we own shares (but only if such
distributions would be eligible for the lower rates on
distributions if paid by the corporation to its individual
stockholders), (b) is equal to our REIT taxable income
(taking into account the distributions paid deduction available
to us) less any taxes paid by us on these items during our
previous taxable year, or (c) is attributable to built-in
gains realized and recognized by us from disposition of
properties acquired by us in non-recognition transaction, less
any taxes paid by us on these items during our previous taxable
year. These distributions are not eligible for the distributions
received deduction generally available to corporations.
To the extent that we make a distribution in excess of our
current or accumulated earnings and profits, the distribution
will be treated first as a tax-free return of capital, reducing
the tax basis in each U.S. stockholders shares (but
not below zero). This, in effect, will defer a portion of your
tax until your investment is sold or we are liquidated, at which
time you likely will be taxed at capital gains rates. The amount
of each distribution in excess of a U.S. stockholders
tax basis in its shares will be taxable as gain realized from
the sale of its shares. Distributions that we declare in
October, November or December of any year payable to a
stockholder of record on a specified date in any of these months
will be treated as both paid by us and received by the
stockholder on December 31 of the year, so long as we actually
pay the distribution during January of the following calendar
year. U.S. stockholders may not include any of our losses
on their own federal income tax returns.
We will be treated as having sufficient earnings and profits to
treat as a distribution any distribution by us up to the amount
required to be distributed in order to avoid imposition of the
4% excise tax discussed above. Moreover, any deficiency
dividend will be treated as an ordinary or capital gain
distribution, as the case may be, regardless of our earnings and
profits. As a result, stockholders may be required to treat as
taxable some distributions that would otherwise result in a
tax-free return of capital.
Capital
Gain Distributions
Distributions to U.S. stockholders that we properly
designate as capital gain distributions normally will be treated
as long-term capital gains, to the extent they do not exceed our
actual net capital gain for the taxable year, without regard to
the period for which the U.S. stockholder has held his or
her shares. A corporate U.S. stockholder, however, may be
required to treat up to 20% of some capital gain distributions
as ordinary income. See Requirements for
Qualification as a REIT Operational
Requirements Annual Distribution Requirement
above for the treatment by U.S. stockholders of net
long-term capital gains that we elect to retain and pay tax on.
Passive
Activity Loss and Investment Interest Limitations
Our distributions and any gain realized from a disposition of
shares will not be treated as passive activity income, and
stockholders may not be able to utilize any of their
passive losses to offset this income on their
personal tax returns. Our distributions (to the extent they do
not constitute a return of capital) will generally be treated as
investment income for purposes of the limitations on the
deduction of investment interest. Net capital gain from a
disposition of shares and capital gain distributions generally
will be included in investment
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income for purposes of the investment interest deduction
limitations only if, and to the extent, so elected, in which
case any such capital gains will be taxed as ordinary income.
Certain
Dispositions of the Shares
In general, any gain or loss realized upon a taxable disposition
of shares by a U.S. stockholder who is not a dealer in
securities will be treated as long-term capital gain or loss if
the shares have been held for more than 12 months and as
short-term capital gain or loss if the shares have been held for
12 months or less. If, however, a U.S. stockholder has
received any capital gains distributions with respect to his
shares, any loss realized upon a taxable disposition of shares
held for six months or less, to the extent of the capital gains
distributions received with respect to his shares, will be
treated as long-term capital loss. Also, the Internal Revenue
Service is authorized to issue Treasury Regulations that would
subject a portion of the capital gain a U.S. stockholder
recognizes from selling shares or from a capital gain
distribution to a tax at a 25% rate, to the extent the capital
gain is attributable to depreciation previously deducted.
A repurchase by us of shares for cash will be treated as a
distribution that is taxable as a dividend to the extent of our
current or accumulated earnings and profits at the time of the
repurchase under Section 302 of the Internal Revenue Code
unless the repurchase:
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results in a complete termination of the
stockholders interest in us under Section 302(b)(3) of the
Internal Revenue Code;
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is substantially disproportionate with respect to
the stockholder under Section 302(b)(2) of the Internal Revenue
Code (
i.e.
, if the percentage of the voting stock of the
corporation owned by a stockholder immediately after the
repurchase is less than 80% of the percentage of that owned by
such stockholder immediately before the repurchase (taking into
account Internal Revenue Code Section 318 constructive
ownership rules); or
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is not essentially equivalent to a dividend with
respect to the stockholder under Section 302(b)(1) of the
Internal Revenue Code (
i.e
., if it results in a
meaningful reduction in the stockholders
interest in us).
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If the repurchase is not treated as a dividend, the repurchase
of common stock for cash will result in taxable gain or loss
equal to the difference between the amount of cash received and
the stockholders tax basis in the shares of our common
stock repurchased. Such gain or loss would be capital gain or
loss if the common stock were held as a capital asset and would
be long-term capital gain or loss if the holding period for the
shares of our common stock exceeds one year.
Information
Reporting Requirements and Backup Withholding for U.S.
Stockholders
Under some circumstances, U.S. stockholders may be subject
to backup withholding at a rate of 28% on payments made with
respect to, or cash proceeds of a sale or exchange of, our
shares. Backup withholding will apply only if the stockholder:
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fails to furnish his or her taxpayer identification number or,
for an individual, his or her Social Security Number;
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furnishes an incorrect tax identification number;
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is notified by the Internal Revenue Service that he or she has
failed to properly report payments of interest and distributions
or is otherwise subject to backup withholding; or
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under some circumstances, fails to certify, under penalties of
perjury, that he or she has furnished a correct tax
identification number and that (a) he or she has not been
notified by the Internal Revenue Service that he or she is
subject to backup withholding for failure to report interest and
distribution payments or (b) he or she has been notified by
the Internal Revenue Service that he or she is no longer subject
to backup withholding.
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Backup withholding will not apply with respect to payments made
to some stockholders, such as corporations and tax-exempt
organizations. Backup withholding is not an additional tax.
Rather, the amount of
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any backup withholding with respect to a payment to a
U.S. stockholder will be allowed as a credit against the
U.S. stockholders U.S. federal income tax
liability and may entitle the U.S. stockholder to a refund,
provided that the required information is furnished to the
Internal Revenue Service. U.S. stockholders should consult their
own tax advisors regarding their qualifications for exemption
from backup withholding and the procedure for obtaining an
exemption.
Cost
Basis Reporting
The Energy Improvement and Extension Act of 2008 (the Act)
imposed new customer reporting requirements on certain financial
intermediaries (brokers). The Act now requires every broker that
is required to file an information return reporting the gross
proceeds of a covered security with the Internal
Revenue Service to include in the information return the
stockholders adjusted basis in the security, and whether
any gain or loss with respect to the security is short-term or
long-term within the meaning of Internal Revenue Code (IRC) Sec.
1222. Under IRC Sec. 6045(g)(3), a covered security
includes any share of stock in a corporation that was acquired
in an account on or after January 1, 2011. We have
determined that shares of our common stock that were acquired on
or after January 1, 2011, including shares issued pursuant
to our distribution reinvestment plan, are covered securities
under the Act. Thus, stockholders who redeem, sell or otherwise
liquidate shares that were purchased on or after January 1,
2011 will receive an information return reporting the gross
proceeds from the sale, the adjusted basis of the shares sold,
and whether any gain or loss is short-term or long-term within
the meaning of IRC Sec. 1222. We are required to furnish this
statement to stockholders by February 15 of the year following
the calendar year in which the covered securities were sold.
This information also will be reported to the Internal Revenue
Service.
When determining the adjusted basis of the shares sold, IRC Sec.
6045(g)(2)(B) requires us to use the
first-in
first-out method. When using the
first-in
first-out method, we are required to identify the shares sold in
the order that they were acquired. However, as an alternative to
the
first-in
first-out method, the stockholder may notify us of a preferred
alternative by means of making an adequate identification of the
shares to be liquidated prior to the liquidation event. Please
see the section entitled Description of Shares
Share Redemption Program for additional information
about our share redemption program.
Treatment
of Tax-Exempt Stockholders
Tax-exempt entities such as employee pension benefit trusts,
individual retirement accounts and charitable remainder trusts
generally are exempt from federal income taxation. Such entities
are subject to taxation, however, on any UBTI. Our payment of
distributions to a tax-exempt employee pension benefit trust or
other domestic tax-exempt stockholder generally will not
constitute UBTI to such stockholder unless such stockholder has
borrowed to acquire or carry its shares, or has used the shares
of stock in a trade or business.
In the event that we were deemed to be predominately
held by qualified employee pension benefit trusts, such
trusts would be required to treat a certain percentage of the
distributions paid to them as UBTI. We would be deemed to be
predominately held by such trusts if either
(i) one employee pension benefit trust owns more than 25%
in value of our shares, or (ii) any group of employee
pension benefit trusts, each owning more than 10% in value of
our shares, holds in the aggregate more than 50% in value of our
shares. If either of these ownership thresholds were ever
exceeded, any qualified employee pension benefit trust holding
more than 10% in value of our shares would be subject to tax on
that portion of our distributions made to it which is equal to
the percentage of our income that would be UBTI if we were a
qualified trust, rather than a REIT. We monitor the
concentration of ownership of employee pension benefit trusts in
our shares, and we do not expect our shares to be deemed to be
predominately held by qualified employee pension
benefit trusts, as defined in the Internal Revenue Code, to the
extent required to trigger the treatment of our income as to
such trusts.
For social clubs, voluntary employee benefit associations,
supplemental unemployment benefit trusts and qualified group
legal services plans exempt from federal income taxation under
Sections 501(c)(7), (c)(9), (c)(17) and (c)(20) of the
Internal Revenue Code, respectively, income from an investment
in our shares will constitute UBTI unless the stockholder in
question is able to deduct amounts set aside or
placed in reserve
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for certain purposes so as to offset the UBTI generated. Any
such organization that is a prospective stockholder should
consult its own tax advisor concerning these set
aside and reserve requirements.
Special
Tax Considerations for
Non-U.S.
Stockholders
The rules governing U.S. income taxation of non-resident
alien individuals, foreign corporations, foreign partnerships
and foreign trusts and estates
(non-U.S. stockholders)
are complex, and the following discussion is intended only as a
summary.
Non-U.S. stockholders
should consult with their own tax advisors to determine the
impact of federal, state and local income tax laws on an
investment in our shares, including any reporting requirements.
Income
Effectively Connected with a U.S. Trade or
Business
In general,
non-U.S. stockholders
will be subject to regular U.S. federal income taxation
with respect to their investment in our shares if the income
derived therefrom is effectively connected with the
non-U.S. stockholders
conduct of a trade or business in the United States. The
determination of whether an investment in our shares is
effectively connected with another U.S. trade or business
will depend entirely on the potential investors business
activities within the U.S., and we recommend consultation with a
qualified international tax advisor on the issue. A
non-U.S. stockholder
treated as a corporation for U.S. federal income tax
purposes that receives income that is (or is treated as)
effectively connected with a U.S. trade or business also
may be subject to a branch profits tax under Section 884 of
the Internal Revenue Code, which is payable in addition to the
regular U.S. federal corporate income tax.
The following discussion will apply to
non-U.S. stockholders
whose income derived from ownership of our shares is deemed to
be not effectively connected with a U.S. trade
or business.
Distributions
Not Attributable to Gain from the Sale or Exchange of a United
States Real Property Interest
A distribution to a
non-U.S. stockholder
that is not attributable to gain realized by us from the sale or
exchange of a United States real property interest
within the meaning under FIRPTA, and that we do not designate as
a capital gain distribution will be treated as an ordinary
income distribution to the extent that it is made out of current
or accumulated earnings and profits. Generally, any ordinary
income distribution will be subject to a U.S. federal
income tax equal to 30% of the gross amount of the distribution
unless this tax is reduced by the provisions of an applicable
tax treaty. Any such distribution in excess of our earnings and
profits will be treated first as a return of capital that will
reduce each
non-U.S. stockholders
basis in its shares (but not below zero) and then as gain from
the disposition of those shares, the tax treatment of which is
described under the rules discussed below with respect to
dispositions of shares.
Distributions
Attributable to Gain from the Sale or Exchange of a United
States Real Property Interest
Distributions to a
non-U.S. stockholder
that are attributable to gain from the sale or exchange of a
United States real property interest will be taxed to a
non-U.S. stockholder
under Internal Revenue Code provisions enacted by FIRPTA. Under
FIRPTA, such distributions are taxed to a
non-U.S. stockholder
as if the distributions were gains effectively
connected with a U.S. trade or business. Accordingly,
a
non-U.S. stockholder
will be taxed at the normal capital gain rates applicable to a
U.S. stockholder (subject to any applicable alternative
minimum tax and a special alternative minimum tax in the case of
non-resident alien individuals). Distributions subject to FIRPTA
also may be subject to a 30% branch profits tax when made to a
corporate
non-U.S. stockholder
that is not entitled to a treaty exemption. Capital gain
distributions generally will be treated as subject to FIRPTA.
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Withholding
Obligations With Respect to Distributions to
Non-U.S.
Stockholders
Although tax treaties may reduce our withholding obligations,
based on current law, we will generally be required to withhold
from distributions to
non-U.S. stockholders,
and remit to the Internal Revenue Service:
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35% of designated capital gain distributions or, if greater, 35%
of the amount of any distributions that could be designated as
capital gain distributions; and
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30% of ordinary income distributions (
i.e.
, distributions
paid out of our earnings and profits).
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In addition, if we designate prior distributions as capital gain
distributions, subsequent distributions, up to the amount of the
prior distributions, will be treated as capital gain
distributions for purposes of withholding. A distribution in
excess of our earnings and profits will be subject to 30%
withholding if at the time of the distribution it cannot be
determined whether the distribution will be in an amount in
excess of our current or accumulated earnings and profits. If
the amount of tax we withhold with respect to a distribution to
a
non-U.S. stockholder
exceeds the stockholders U.S. tax liability with
respect to that distribution, the
non-U.S. stockholder
may file a claim with the Internal Revenue Service for a refund
of the excess.
Sale
of Our Shares by a
Non-U.S.
Stockholder
A sale of our shares by a
non-U.S. stockholder
generally will not be subject to U.S. federal income
taxation unless (1) the gain or loss from such sale is
effectively connected with the conduct of another
U.S. trade or business or (2) our shares constitute a
United States real property interest under FIRPTA. With respect
to determining whether gain or loss on the sale of our stock is
effectively connected with another U.S. trade or business,
this determination will depend entirely on each potential
non-U.S. investors
business activities within the U.S. We recommend consultation
with a qualified international tax advisor on this issue. With
respect to potential taxation under FIRPTA of the sale of a
United States real property interest, in general our shares will
not constitute a United States real property interest provided
we are a domestically controlled REIT.
A domestically controlled REIT is a REIT that at all
times during a specified testing period has less than 50% in
value of its shares held directly or indirectly by
non-U.S. stockholders.
We currently anticipate that we will be a domestically
controlled REIT, so gain from the sale of our common stock
should not be subject to federal income taxation under FIRPTA.
However, we do expect to sell shares of our common stock to
non-U.S. stockholders
and we cannot assure you that we will continue to be a
domestically controlled REIT. If we are not a
domestically controlled REIT, it is possible that
our common stock would constitute a U.S. real property
interest, and as a result, any gain from the sale of our common
stock by a
non-U.S. stockholder
would be subject to federal income tax under FIRPTA.
If sale of our common stock were subject to taxation under
FIRPTA, a
non-U.S. stockholder
would be subject to the same federal income tax treatment as a
U.S. stockholder with respect to the gain recognized
(subject to any applicable alternative minimum tax in the case
of non-resident alien individuals). In addition, distributions
that are subject to tax under FIRPTA also may be subject to a
30% branch profits tax when made to a
non-U.S. stockholder
treated as a corporation (under U.S. federal income tax
principles) that is not otherwise entitled to a treaty
exemption. Finally, if we are not a domestically
controlled REIT at the time our stock is sold, under
FIRPTA the purchaser of our common stock also may be required to
withhold 10% of the purchase price and remit this amount to the
Internal Revenue Service on behalf of the selling
non-U.S. stockholder.
With respect to individual
non-U.S. stockholders,
even if not subject to FIRPTA, capital gains recognized from the
sale of our common stock will be taxable to such
non-U.S. stockholder
if he or she is a non-resident alien individual who is present
in the United States for 183 days or more during the
taxable year and some other conditions apply, in which case the
non-resident alien individual may be subject to a
U.S. federal income tax on his or her U.S. source
capital gains.
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Information
Reporting Requirements and Backup Withholding for
Non-U.S.
Stockholders
Additional issues may arise for information reporting and backup
withholding for
non-U.S. stockholders.
Non-U.S. stockholders
should consult their tax advisors with regard to
U.S. information reporting and backup withholding
requirements under the Internal Revenue Code.
Statement
of Stock Ownership
We are required to demand annual written statements from the
record holders of designated percentages of our shares
disclosing the actual owners of the shares. Any record
stockholder who, upon our request, does not provide us with
required information concerning actual ownership of the shares
is required to include specified information relating to his or
her shares in his or her federal income tax return. We also must
maintain, within the Internal Revenue District in which we are
required to file, our federal income tax return, permanent
records showing the information we have received about the
actual ownership of shares and a list of those persons failing
or refusing to comply with our demand.
State and
Local Taxation
We and any operating subsidiaries that we may form may be
subject to state and local tax in states and localities in which
they or we do business or own property. The tax treatment of us,
CCPT IV OP, any operating subsidiaries we may form and the
holders of our shares in local jurisdictions may differ from the
federal income tax treatment described above. Prospective
stockholders should consult their own tax advisors regarding the
effect of state and local tax laws an their investment in our
shares.
Tax
Aspects of Our Operating Partnership
The following discussion summarizes certain federal income tax
considerations applicable to our investment in CCPT IV OP, our
operating partnership. The discussion does not cover state or
local tax laws or any federal tax laws other than income tax
laws.
Classification
as a Partnership
We will be entitled to include in our income a distributive
share of CCPT IV OPs income and to deduct our distributive
share of CCPT IV OPs losses only if CCPT IV OP is
classified for federal income tax purposes as a partnership,
rather than as an association taxable as a corporation. Under
applicable Treasury Regulations known as the
Check-the-Box-Regulations,
an unincorporated entity with at least two members may elect to
be classified either as an association taxable as a corporation
or as a partnership. If such an entity fails to make an
election, it generally will be treated as a partnership for
federal income tax purposes. CCPT IV OP intends to be classified
as a partnership for federal income tax purposes and will not
elect to be treated as an association taxable as a corporation
under the
Check-the-Box-Regulations.
Even though CCPT IV OP will be treated as a partnership for
federal income tax purposes, it may be taxed as a corporation if
it is deemed to be a publicly traded partnership (PTP). A PTP is
a partnership whose interests are traded on an established
securities market or are readily tradable on a secondary market,
or the substantial equivalent thereof. However, a PTP will not
be treated as a corporation for federal income tax purposes if
at least 90% of such partnerships gross income for a
taxable year consists of qualifying income under
Section 7704(d) of the Internal Revenue Code. Qualifying
income generally includes any income that is qualifying income
for purposes of the 95% Income Test applicable to REITs (the 90%
Passive-Type Income Exception). See
Requirements for Qualification as a
REIT Operational Requirements Gross
Income Tests above.
In addition, limited safe harbors from the definition of a PTP
are provided under the applicable PTP Treasury Regulations.
Pursuant to one of these (the Private Placement Exclusion),
interests in a partnership will not be treated as readily
tradable on a secondary market or the substantial equivalent
thereof if (i) all interests in the partnership were issued
in a transaction (or transactions) that was not required to be
registered under the Securities Act, and (ii) the
partnership does not have more than 100 partners at any time
during the
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partnerships taxable year. In determining the number of
partners in a partnership, a person owning an interest in a
flow-through entity, such as a partnership, grantor trust or
S corporation, that owns an interest in the partnership is
treated as a partner in such partnership only if
(a) substantially all of the value of the owners
interest in the flow-through is attributable to the flow-through
entitys interest, direct or indirect, in the partnership
and (b) a principal purpose of the use of the flow-through
entity is to permit the partnership to satisfy the 100 partner
limitation. CCPT IV OP qualifies for the Private Placement
Exclusion. Moreover, even if CCPT IV OP were considered a PTP
under the PTP Regulations because it is deemed to have more than
100 partners, we believe CCPT IV OP should not be treated as a
corporation because it is eligible for the 90% Passive-Type
Income Exception described above.
We have not requested, and do not intend to request, a ruling
from the Internal Revenue Service that CCPT IV OP will be
classified as a partnership for federal income tax purposes.
Morris, Manning & Martin, LLP is of the opinion,
however, that based on certain factual assumptions and
representations, CCPT IV OP will be treated for federal income
tax purposes as a partnership and not as an association taxable
as a corporation, or as a PTP. Unlike a tax ruling, however, an
opinion of counsel is not binding upon the Internal Revenue
Service, and we can offer no assurance that the Internal Revenue
Service will not challenge the status of CCPT IV OP as a
partnership for federal income tax purposes. If such challenge
were sustained by a court, CCPT IV OP would be treated as a
corporation for federal income tax purposes, as described below.
In addition, the opinion of Morris, Manning & Martin,
LLP is based on existing law, which is to a great extent the
result of administrative and judicial interpretation. No
assurance can be given that administrative or judicial changes
would not modify the conclusions expressed in the opinion.
If for any reason CCPT IV OP were taxable as a corporation,
rather than a partnership, for federal income tax purposes, we
would not be able to qualify as a REIT. See
Requirements for Qualification as a
REIT Operational Requirements Gross
Income Tests and Requirements for
Qualification as a REIT Operational
Requirements Asset Tests above. In addition,
any change in CCPT IV OPs status for tax purposes might be
treated as a taxable event, in which case we might incur a tax
liability without any related cash distribution. Further, items
of income and deduction of CCPT IV OP would not pass through to
its partners, and its partners would be treated as stockholders
for tax purposes. Consequently, CCPT IV OP would be required to
pay income tax at corporate tax rates on its net income, and
distributions to its partners would not be deductible in
computing CCPT IV OPs taxable income.
Income
Taxation of the Operating Partnership and Its
Partners
Partners,
Not a Partnership, Subject to Tax
A partnership is not a taxable entity for federal income tax
purposes. As a partner in CCPT IV OP, we will be required to
take into account our allocable share of CCPT IV OPs
income, gains, losses, deductions and credits for any taxable
year of CCPT IV OP ending within or with our taxable year,
without regard to whether we have received or will receive any
distribution from CCPT IV OP.
Partnership
Allocations
Although a partnership agreement generally determines the
allocation of income and losses among partners, such allocations
will be disregarded for tax purposes if they do not comply with
the provisions of Section 704(b) of the Internal Revenue
Code and the applicable Treasury Regulations. If an allocation
is not recognized for federal income tax purposes, the item
subject to the allocation will be reallocated in accordance with
the partners interests in the partnership, which will be
determined by taking into account all of the facts and
circumstances relating to the economic arrangement of the
partners with respect to such item. CCPT IV OPs
allocations of taxable income and loss are intended to comply
with the requirements of Section 704(b) of the Internal
Revenue Code and the applicable Treasury Regulations.
Tax
Allocations With Respect to Contributed Properties
Pursuant to Section 704(c) of the Internal Revenue Code,
income, gain, loss and deductions attributable to appreciated or
depreciated property that is contributed to a partnership in
exchange for an interest in the
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partnership must be allocated for federal income tax purposes in
a manner such that the contributor is charged with, or benefits
from, the unrealized gain or unrealized loss associated with the
property at the time of the contribution. The amount of such
unrealized gain or unrealized loss is generally equal to the
difference between the fair market value of the contributed
property at the time of contribution and the adjusted tax basis
of such property at the time of contribution. Under applicable
Treasury Regulations, partnerships are required to use a
reasonable method for allocating items subject to
Section 704(c) of the Internal Revenue Code, and several
reasonable allocation methods are described therein.
Under the partnership agreement for CCPT IV OP, depreciation or
amortization deductions of CCPT IV OP generally will be
allocated among the partners in accordance with their respective
interests in CCPT IV OP, except to the extent that CCPT IV OP is
required under Section 704(c) of the Internal Revenue Code
to use a method for allocating depreciation deductions
attributable to its properties that results in us receiving a
disproportionately large share of such deductions. We may
possibly be allocated (1) lower amounts of depreciation
deductions for tax purposes with respect to contributed
properties than would be allocated to us if each such property
were to have a tax basis equal to its fair market value at the
time of contribution
and/or
(2) taxable gain in the event of a sale of such contributed
properties in excess of the economic profit allocated to us as a
result of such sale. These allocations may cause us to recognize
taxable income in excess of cash proceeds received by us, which
might adversely affect our ability to comply with the REIT
distribution requirements, although we do not anticipate this
will occur.
The foregoing principles also will affect the calculation of our
earnings and profits for purposes of determining which portion
of our distributions is taxable as a distribution. If we acquire
properties in exchange for units of CCPT IV OP, the allocations
described in this paragraph may result in a higher portion of
our distributions being taxed as a distribution than would have
occurred had we purchased such properties for cash.
Basis in
Operating Partnership Interest
The adjusted tax basis of our partnership interest in CCPT IV OP
generally is equal to (1) the amount of cash and the basis
of any other property contributed to CCPT IV OP by us,
(2) increased by (a) our allocable share of CCPT IV
OPs income and (b) our allocable share of
indebtedness of CCPT IV OP, and (3) reduced, but not below
zero, by (a) our allocable share of CCPT IV OPs loss
and (b) the amount of cash distributed to us, including
constructive cash distributions resulting from a reduction in
our share of indebtedness of CCPT IV OP.
If the allocation of our distributive share of CCPT IV OPs
loss would reduce the adjusted tax basis of our partnership
interest in CCPT IV OP below zero, the recognition of such loss
will be deferred until such time as the recognition of such loss
would not reduce our adjusted tax basis below zero. If a
distribution from CCPT IV OP or a reduction in our share of CCPT
IV OPs liabilities (which is treated as a constructive
distribution for tax purposes) would reduce our adjusted tax
basis below zero, any such distribution, including a
constructive distribution, would constitute taxable income to
us. The gain realized by us upon the receipt of any such
distribution or constructive distribution would normally be
characterized as capital gain, and if our partnership interest
in CCPT IV OP has been held for longer than the required
long-term capital gain holding period (currently one year), the
distribution would constitute long-term capital gain.
Depreciation
Deductions Available to the Operating Partnership
CCPT IV OP will use a portion of contributions made by us from
offering proceeds to acquire interests in properties. To the
extent that CCPT IV OP acquires properties for cash, CCPT IV
OPs initial basis in such properties for federal income
tax purposes generally will be equal to the purchase price paid
by CCPT IV OP. CCPT IV OP plans to depreciate each such
depreciable property for federal income tax purposes under the
alternative depreciation system of depreciation. Under this
system, CCPT IV OP generally will depreciate such buildings and
improvements over a
40-year
recovery period using a straight-line method and a mid-month
convention and will depreciate furnishings and equipment over a
12-year
recovery period.
To the extent that CCPT IV OP acquires properties in exchange
for its partnership units, CCPT IV OPs initial basis in
each such property for federal income tax purposes should be the
same as the transferors basis in that property on the date
of acquisition by CCPT IV OP. Although the law is not entirely
clear,
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CCPT IV OP generally intends to depreciate such
depreciable property for federal income tax purposes over the
same remaining useful lives and under the same methods used by
the transferors.
Sale of
the Operating Partnerships Property
Generally, any gain realized by CCPT IV OP on the sale of
property held for more than one year will be long-term capital
gain, except for any portion of such gain that is treated as
depreciation or cost recovery recapture. Any gain recognized by
CCPT IV OP upon the disposition of a property acquired by CCPT
IV OP for cash will be allocated among the partners in
accordance with their respective interests in CCPT IV OP.
Our share of any gain realized by CCPT IV OP on the sale of any
property held by CCPT IV OP as inventory or other property held
primarily for sale to customers in the ordinary course of CCPT
IV OPs trade or business will be treated as income from a
prohibited transaction that is subject to a 100% penalty tax.
We, however, do not currently intend to acquire or hold or allow
CCPT IV OP to acquire or hold any property that represents
inventory or other property held primarily for sale to customers
in the ordinary course of our or CCPT IV OPs trade or
business.
Medicare
Tax
On March 30, 2010, the President signed into law the Health
Care and Education Reconciliation Act of 2010 (Reconciliation
Act). The Reconciliation Act will require certain
U.S. stockholders who are individuals, estates or trusts to
pay a 3.8% Medicare tax on, among other things, dividends on and
capital gains from the sale or other disposition of stock,
subject to certain exceptions. This additional tax will apply
broadly to essentially all dividends and all gains from
dispositions of stock, including dividends from REITs and gains
from dispositions of REIT shares, such as our common stock. As
enacted, the tax will apply for taxable years beginning after
December 31, 2012. U.S. stockholders should consult
their respective tax advisors regarding the effect, if any, of
the Reconciliation Act on taxable income arising from ownership
and disposition of our common stock.
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INVESTMENT
BY TAX-EXEMPT ENTITIES AND ERISA CONSIDERATIONS
General
The following is a summary of some non-tax considerations
associated with an investment in our shares by tax-qualified
pension, stock bonus or profit-sharing plans, employee benefit
plans described in Section 3(3) of ERISA, annuities
described in Section 403(a) or (b) of the Internal
Revenue Code, an individual retirement account or annuity
described in Sections 408 or 408A of the Internal Revenue
Code, an Archer MSA described in Section 220(d) of the
Internal Revenue Code, a health savings account described in
Section 223(d) of the Internal Revenue Code, or a Coverdell
education savings account described in Section 530 of the
Internal Revenue Code, which are generally referred to as Plans
and IRAs, as applicable. This summary is based on provisions of
ERISA and the Internal Revenue Code, including amendments
thereto through the date of this prospectus, and relevant
regulations and opinions issued by the Department of Labor and
the Internal Revenue Service through the date of this
prospectus. We cannot assure you that adverse tax decisions or
legislative, regulatory or administrative changes that would
significantly modify the statements expressed herein will not
occur. Any such changes may or may not apply to transactions
entered into prior to the date of their enactment.
This summary does not include a discussion of any laws,
regulations, or statutes that may apply to investors not covered
by ERISA, including, for example, investors such as plans or
arrangements that constitute governmental plans or church plans
which are exempt from ERISA and many Internal Revenue Code
requirements. For such plans and arrangements, applicable laws
(such as state laws) may impose fiduciary responsibility
requirements in connection with the investment of assets, and
may have prohibitions that operate similarly to the prohibited
transaction rules of ERISA and the Internal Revenue Code, but
which may also vary significantly from such prohibitions. For
any governmental or church plan, or other plans or arrangements
not subject to ERISA, those persons responsible for the
investment of the assets of such a plan or arrangements should
carefully consider the impact of such laws on an investment in
shares of our common stock.
Our management has attempted to structure us in such a manner
that we will be an attractive investment vehicle for Plans and
IRAs. However, in considering an investment in our shares, those
involved with making such an investment decision should consider
applicable provisions of the Internal Revenue Code and ERISA.
While each of the ERISA and Internal Revenue Code issues
discussed below may not apply to all Plans and IRAs, individuals
involved with making investment decisions with respect to Plans
and IRAs should carefully review the rules and exceptions
described below, and determine their applicability to their
situation.
In general, individuals making investment decisions with respect
to Plans and IRAs should, at a minimum, consider:
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whether the investment is in accordance with the documents and
instruments governing such Plan or IRA;
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whether the investment satisfies the prudence and
diversification and other fiduciary requirements of ERISA, if
applicable;
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whether the investment will result in UBTI to the Plan or IRA
(see Federal Income Tax Considerations
Treatment of Tax-Exempt Stockholders);
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whether there is sufficient liquidity for the Plan or IRA,
considering the minimum and other distribution requirements
under the Internal Revenue Code and the liquidity needs of such
Plan or IRA, after taking this investment into account;
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a need to value the assets of the Plan or IRA annually or more
frequently;
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whether the investment would constitute or give rise to a
prohibited transaction under ERISA
and/or
the
Internal Revenue Code, if applicable;
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whether the investment is consistent with the applicable
provisions of ERISA, the Internal Revenue Code, and other
applicable laws; and
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whether the assets of the entity in which the investment is made
will be treated as plan assets of the Plan or IRA
investor.
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Additionally, individuals making investment decisions with
respect to Plans and IRAs must remember that ERISA requires that
the assets of an employee benefit plan must generally be held in
trust, and that the trustee, or a duly authorized named
fiduciary or investment manager, must have authority and
discretion to manage and control the assets of an employee
benefit plan.
Minimum
and Other Distribution Requirements Plan
Liquidity
Potential Plan or IRA investors who intend to purchase our
shares should consider the limited liquidity of an investment in
our shares as it relates to the minimum distribution
requirements under the Internal Revenue Code, if applicable, and
as it relates to other distributions (such as, for example, cash
out distributions) that may be required under the terms of the
Plan or IRA from time to time. If the shares are held in an IRA
or Plan and, before we sell our properties, mandatory or other
distributions are required to be made to the participant or
beneficiary of such IRA or Plan, pursuant to the Internal
Revenue Code, then this would require that a distribution of the
shares be made in kind to such participant or beneficiary, or
that a rollover of such shares be made to an IRA or other plan,
which may not be permissible under the terms and provisions of
the IRA or Plan making the distribution or rollover or the IRA
or Plan receiving the rollover. Even if permissible, a
distribution of shares in kind to a participant or beneficiary
of an IRA or Plan must be included in the taxable income of the
recipient for the year in which the shares are received at the
then current fair market value of the shares, even though there
would be no corresponding cash distribution with which to pay
the income tax liability arising because of the distribution of
shares. See Risk Factors Federal Income Tax
Risks. The fair market value of any such
distribution-in-kind
can be only an estimated value per share because no public
market for our shares exists or is likely to develop. See
Annual or More Frequent Valuation
Requirements below. Further, there can be no assurance
that such estimated value could actually be realized by a
stockholder because estimates do not necessarily indicate the
price at which our shares could be sold. Also, for distributions
subject to mandatory income tax withholding under
Section 3405 or other tax withholding provisions of the
Internal Revenue Code, the trustee of a Plan may have an
obligation, even in situations involving in-kind distributions
of shares, to liquidate a portion of the in-kind shares
distributed in order to satisfy such withholding obligations,
although there might be no market for such shares. There may
also be similar state
and/or
local
tax withholding or other tax obligations that should be
considered.
Annual or
More Frequent Valuation Requirements
Fiduciaries of Plans may be required to determine the fair
market value of the assets of such Plans or IRAs on at least an
annual basis and, sometimes, as frequently as daily. If the fair
market value of any particular asset is not readily available,
the fiduciary is required to make a good faith determination of
that assets value. Also, a fiduciary of a Plan must
provide a Plan participant with a statement of the value of the
Plan every three years, every year, or every quarter, depending
upon the type of Plan involved, and, in the case of an IRA, a
trustee or custodian of the IRA must provide the Internal
Revenue Service with a statement of the value of the IRA each
year. However, currently, neither the Internal Revenue Service
nor the Department of Labor has promulgated regulations
specifying how fair market value should be
determined for this purpose.
Unless and until our shares are listed on a national securities
exchange, we do not expect that a public market for our shares
will develop. To assist fiduciaries of Plans subject to the
annual reporting requirements of ERISA and IRA trustees or
custodians to prepare reports relating to an investment in our
shares, we intend to provide reports of our determinations of
the current estimated share value to those fiduciaries
(including IRA trustees and custodians) who identify themselves
to us and request the reports. During this offering, and unless
determined otherwise by our board of directors in accordance
with our valuation policy, until 18 months after the
termination of this offering or the termination of any follow-on
offering of our shares, we intend to
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use the most recent gross offering price of our shares of common
stock as the per share value (unless we have made a special
distribution to stockholders of net sales proceeds from the sale
of one or more properties during such periods, in which case we
will use the offering price less the per share amount of the
special distribution). Estimates based solely on the most recent
offering price of our shares of common stock will not reflect
the book value or net asset value of our investments, nor our
operating cash flows. Such estimates most likely will not
reflect the value per share that you would receive upon our sale
or liquidation, and will be subject to other limitations as
described in the section of this prospectus captioned
Description of Shares Valuation Policy.
Beginning no later than 18 months after the conclusion of
this offering or any follow-on offering of our shares, at the
determination by our board of directors, our board of directors
will disclose a reasonable estimate of the per share value of
our common stock that is not based solely on the offering price
of our shares. For more information about our valuation policy,
see Description of Shares Valuation
Policy.
With respect to any estimate of the value of our common stock,
there can be no assurance that the estimated value, or method
used to estimate value, would be sufficient to enable an ERISA
fiduciary or an IRA custodian to comply with the ERISA or other
regulatory requirements. The Department of Labor or the Internal
Revenue Service may determine that a plan fiduciary or an IRA
custodian is required to take further steps to determine the
value of our shares. Further, there can be no assurance with
respect to any estimate of value of our common stock that such
estimated value would actually be realized by our stockholders
upon liquidation, or that our stockholders would be able to
realize such estimated value if they were to attempt to sell
their shares, or that such estimated value would be related to
any appraisals of our shares or assets.
Fiduciary
Obligations Prohibited Transactions
Any person identified as a fiduciary with respect to
a Plan incurs duties and obligations under ERISA as discussed
herein. For purposes of ERISA, any person who exercises any
authority or control with respect to the management or
disposition of the assets of a Plan is considered to be a
fiduciary of such Plan. Further, many transactions between a
Plan or an IRA and a
party-in-interest
or a disqualified person with respect to such Plan
or IRA are prohibited by ERISA
and/or
the
Internal Revenue Code. ERISA also requires generally that the
assets of Plans be held in trust and that the trustee, or a duly
authorized investment manager, have exclusive authority and
discretion to manage and control the assets of the Plan.
In the event that our properties and other assets were deemed to
be assets of a Plan or IRA, referred to herein as plan
assets, our directors would, and employees of our
affiliates might, be deemed fiduciaries of any Plans or IRAs
investing as stockholders. If this were to occur, certain
contemplated transactions between us and our directors and
employees of our affiliates could be deemed to be
prohibited transactions. Additionally, ERISAs
fiduciary standards applicable to investments by Plans would
extend to our directors and possibly employees of our affiliates
as Plan fiduciaries with respect to investments made by us, and
the requirement that Plan Assets be held in trust could be
deemed to be violated.
Plan
Assets Definition
Section 3(42) of ERISA defines Plan Assets in
accordance with Department of Labor regulations with certain
express exceptions. A Department of Labor regulation, referred
to in this discussion as the Plan Asset Regulation, as modified
by the express exceptions noted in the Pension Protection Act of
2006, provides guidelines as to whether, and under what
circumstances, the underlying assets of an entity will be deemed
to constitute Plan Assets. Under the Plan Asset Regulation, the
assets of an entity in which a Plan or IRA makes an equity
investment will generally be deemed to be assets of such Plan or
IRA unless the entity satisfies one of the exceptions to this
general rule. Generally, the exceptions require that the
investment in the entity be one of the following:
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in securities issued by an investment company registered under
the Investment Company Act;
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in publicly offered securities, defined generally as
interests that are freely transferable, widely
held and registered with the Securities and Exchange
Commission;
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160
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in an operating company, which includes
venture capital operating companies and real
estate operating companies; or
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in which equity participation by benefit plan
investors is not significant.
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Plan
Assets Registered Investment Company
Exception
The shares we are offering will not be issued by a registered
investment company. Therefore we do not anticipate that we will
qualify for the exception for investments issued by a registered
investment company.
Publicly
Offered Securities Exemption
As noted above, if a Plan acquires publicly offered
securities, the assets of the issuer of the securities
will not be deemed to be Plan Assets under the Plan Asset
Regulation. The definition of publicly offered securities
requires that such securities be widely held,
freely transferable and satisfy registration
requirements under federal securities laws.
Under the Plan Asset Regulation, a class of securities will meet
the registration requirements under federal securities laws if
they are (i) part of a class of securities registered under
section 12(b) or 12(g) of the Exchange Act, or
(ii) part of an offering of securities to the public
pursuant to an effective registration statement under the
Securities Act and the class of securities of which such
security is a part is registered under the Exchange Act within
120 days (or such later time as may be allowed by the
Securities and Exchange Commission) after the end of the fiscal
year of the issuer during which the offering of such securities
to the public occurred. We anticipate that we will meet the
registration requirements under the Plan Asset Regulation. Also
under the Plan Asset Regulation, a class of securities will be
widely held if it is held by 100 or more persons
independent of the issuer. We anticipate that this requirement
will be easily met. Although our shares are intended to satisfy
the registration requirements under this definition, and we
expect that our securities will be widely held, the
freely transferable requirement must also be
satisfied in order for us to qualify for the publicly
offered securities exception.
The Plan Asset Regulation provides that whether a security
is freely transferable is a factual question to be
determined on the basis of all relevant facts and
circumstances. Our shares are subject to certain
restrictions on transferability typically found in REITs, and
are intended to ensure that we continue to qualify for federal
income tax treatment as a REIT. The Plan Asset Regulation
provides, however, that where the minimum investment in a public
offering of securities is $10,000 or less, the presence of a
restriction on transferability intended to prohibit transfers
that would result in a termination or reclassification of the
entity for state or federal tax purposes will not ordinarily
affect a determination that such securities are freely
transferable. The allowed restrictions in examples
contained in the Plan Asset Regulation are illustrative of
restrictions commonly found in REITs that are imposed to comply
with state and federal law, to assure continued eligibility for
favorable tax treatment and to avoid certain practical
administrative problems. The minimum investment in our shares is
less than $10,000. Thus, the restrictions imposed in order to
maintain our status as a REIT should not prevent the shares from
being deemed freely transferable. Therefore, we
anticipate that we will meet the publicly offered
securities exception, although there are no assurances
that we will qualify for this exception.
Plan
Assets Operating Company Exception
If we are deemed not to qualify for the publicly offered
securities exemption, the Plan Asset Regulation also
provides an exception with respect to securities issued by an
operating company, which includes venture
capital operating companies and real estate
operating companies. To constitute a venture capital
operating company, generally 50% of more of the assets of the
entity must be invested in venture capital
investments. A venture capital investment is an investment
in an operating company (other than a venture capital operating
company) as to which the entity has or obtains direct management
rights. To constitute a real estate operating company, generally
50% or more of the assets of an entity must be invested in real
estate which is managed or developed and with respect to which
such entity has the right to substantially participate directly
in the management or development activities.
161
While the Plan Asset Regulation and relevant opinions issued by
the Department of Labor regarding real estate operating
companies are not entirely clear as to whether an investment in
real estate must be direct, it is common practice to
insure that an investment is made either
(i) directly into real estate,
(ii) through wholly-owned subsidiaries, or
(iii) through entities in which all but a de minimis
interest is separately held by an affiliate solely to comply
with the minimum safe harbor requirements established by the
Internal Revenue Service for classification as a partnership for
federal tax purposes. We have structured ourselves, and our
operating partnership, in this manner in order to enable us to
meet the real estate operating company exception. To the extent
interests in our operating partnership are obtained by
third-party investors, it is possible that the real estate
operating company exception will cease to apply to us. However,
in such an event we believe that we are structured in a manner
which would allow us to meet the venture capital operating
company exception because our investment in our operating
partnership, an entity investing directly in real estate over
which we maintain substantially all of the control over the
management and development activities, would constitute a
venture capital investment.
Notwithstanding the foregoing, 50% of our, or our operating
partnerships, investment, as the case may be, must be in
real estate over which we maintain the right to substantially
participate in the management and development activities. An
example in the Plan Asset Regulation indicates that if 50% or
more of an entitys properties are subject to long-term
leases under which substantially all management and maintenance
activities with respect to the properties are the responsibility
of the lessee, such that the entity merely assumes the risk of
ownership of income-producing real property, then the entity may
not be eligible for the real estate operating
company exception. By contrast, a second example in the
Plan Asset Regulation indicates that if 50% or more of an
entitys investments are in shopping centers in which
individual stores are leased for relatively short periods to
various merchants, as opposed to long-term leases where
substantially all management and maintenance activities are the
responsibility of the lessee, then the entity will likely
qualify as a real estate operating company. The second example
further provides that the entity may retain contractors,
including affiliates, to conduct the management of the
properties so long as the entity has the responsibility to
supervise and the authority to terminate the contractors. We
intend to use contractors over which we have the right to
supervise and the authority to terminate. Due to the uncertainty
of the application of the standards set forth in the Plan Asset
Regulation, there can be no assurance as to our ability to
structure our operations, or the operations of our operating
partnership, as the case may be, to qualify for the real
estate operating company exception.
Plan
Assets Not Significant Investment
Exception
The Plan Asset Regulation provides that equity participation in
an entity by benefit plan investors is significant
if at any time 25% or more of the value of any class of equity
interests is held by benefit plan investors. The term
benefit plan investor is defined to mean an employee
benefit plan subject to Part 4 of Title I of ERISA,
any plan to which Section 4975 of the Internal Revenue Code
applies and any entity whose underlying assets include plan
assets by reason of a plans investment in such entity. We
do not intend to restrict ownership of each class of equity
interests held by benefit plan investors to an aggregate value
of less than 25% in order to qualify for the exception for
investments in which equity participation by benefit plan
investors is not significant. In fact, we expect that more than
25% of our outstanding shares of common stock will be held by
benefit plan investors.
Consequences
of Holding Plan Assets
In the event that our underlying assets were deemed to be Plan
Assets under Section 3(42) of ERISA, our management would
be treated as fiduciaries with respect to each Plan or IRA
stockholder, and an investment in our shares might expose the
fiduciaries of the Plan or IRA to co-fiduciary liability under
ERISA for any breach by our management of the fiduciary duties
mandated under ERISA. Further, if our assets are deemed to be
Plan Assets, an investment by a Plan or IRA in our shares might
be deemed to result in an impermissible commingling of Plan
Assets with other property.
If our management or affiliates were treated as fiduciaries with
respect to Plan or IRA stockholders, the prohibited transaction
restrictions of ERISA would apply to any transaction involving
our assets. These restrictions could, for example, require that
we avoid transactions with entities that are affiliated with our
162
affiliates or us unless such transactions otherwise were exempt,
statutorily or administratively, from the prohibitions of ERISA
and the Internal Revenue Code, or restructure our activities in
order to obtain an administrative exemption from the prohibited
transaction restrictions. Alternatively, we might have to
provide Plan or IRA stockholders with the opportunity to sell
their shares to us or we might dissolve or terminate.
Prohibited
Transactions
Generally, both ERISA and the Internal Revenue Code prohibit
Plans and IRAs from engaging in certain transactions involving
Plan Assets with specified parties, such as sales or exchanges
or leasing of property, loans or other extensions of credit,
furnishing goods or services, or transfers to, or use of, Plan
Assets. The specified parties are referred to as
parties-in-interest
under ERISA and as disqualified persons under the
Internal Revenue Code. These definitions generally include both
parties owning threshold percentage interests in an investment
entity and persons providing services to the Plan or
IRA, as well as employer sponsors of the Plan or IRA,
fiduciaries and other individuals or entities affiliated with
the foregoing.
A person generally is a fiduciary with respect to a Plan or IRA
for these purposes if, among other things, the person has
discretionary authority or control with respect to Plan Assets
or provides investment advice for a direct or indirect fee with
respect to Plan Assets. Under Department of Labor regulations, a
person will be deemed to be providing investment advice if that
person renders advice as to the advisability of investing in our
shares, and that person regularly provides investment advice to
the Plan or IRA pursuant to a mutual agreement or understanding
(written or otherwise) that such advice will serve as the
primary basis for investment decisions, and that the advice will
be individualized for the Plan or IRA based on its particular
needs. Thus, if we are deemed to hold Plan Assets, our
management could be characterized as fiduciaries with respect to
such assets, and each would be deemed to be a
party-in-interest
under ERISA and a disqualified person under the Internal Revenue
Code with respect to investing Plans and IRAs. Whether or not we
are deemed to hold Plan Assets, if we or our affiliates are
affiliated with a Plan or IRA investor, we might be a
disqualified person or
party-in-interest
with respect to such Plan or IRA investor, resulting in a
prohibited transaction merely upon investment by such Plan or
IRA in our shares.
Prohibited
Transactions Consequences
ERISA and the Internal Revenue Code forbid Plans and IRAs from
engaging in prohibited transactions. Fiduciaries of a Plan that
allow a prohibited transaction to occur will breach their
fiduciary responsibilities under ERISA, and may be liable for
any damage sustained by the Plan, as well as civil penalties
(generally 5% of the amount involved, unless the transaction is
not timely corrected, in which case the penalty is 100% of the
amount involved). Criminal penalties may also be possible if the
violation was willful. If it is determined by the Department of
Labor or the Internal Revenue Service that a prohibited
transaction has occurred, any disqualified person or
party-in-interest
involved with the prohibited transaction would be required to
reverse or unwind the transaction and, for a Plan, compensate
the Plan for any loss resulting therefrom. Additionally, the
Internal Revenue Code requires that a disqualified person
involved with a prohibited transaction with a Plan or IRA must
pay an excise tax equal to a percentage of the amount
involved in the transaction for each year in which the
transaction remains uncorrected. The percentage generally is 5%,
but is increased to 100% if the prohibited transaction is not
timely corrected. For IRAs, if an IRA engages in a prohibited
transaction, the tax-exempt status of the IRA may be lost. With
respect to an IRA that invests in our shares, the occurrence of
a prohibited transaction involving the individual who
established the IRA, or his or her beneficiary, could cause the
IRA to lose its tax-exempt status under the Internal Revenue
Code, and such individual generally would be taxable on the
deemed distribution of all the assets in the IRA.
163
PLAN OF
DISTRIBUTION
The
Offering
We are offering a maximum of 300,000,000 shares of our
common stock to the public through Cole Capital Corporation, our
dealer manager, a registered broker-dealer affiliated with our
advisor. Of this amount, we are offering up to
250,000,000 shares in our primary offering at a price of
$10.00 per share, except as provided below. The shares are being
offered on a best efforts basis, which generally
means that the dealer manager is required to use only its best
efforts to sell the shares and it has no firm commitment or
obligation to purchase any of the shares. We also are offering
up to 50,000,000 shares for sale pursuant to our
distribution reinvestment plan. The purchase price for shares
sold under our distribution reinvestment plan will be $9.50 per
share during this offering, and until such time as our board of
directors determines a reasonable estimate of the value of our
shares. Thereafter, the purchase price per share under our
distribution reinvestment plan will be the most recent estimated
value per share as determined by our board of directors. No
selling commissions or dealer manager fees will be paid with
respect to these shares. We reserve the right to reallocate the
shares of our common stock we are offering between the primary
offering and our distribution reinvestment plan. The offering of
shares of our common stock will terminate on or before
,
2014, which is two years after the effective date of this
offering; provided, however, that our board of directors may
extend the primary offering. If we decide to extend the primary
offering beyond
,
2014, we will provide that information in a prospectus
supplement; however, in no event will we extend this offering
beyond 180 days after the third anniversary of the initial
effective date. In addition, at the discretion of our board of
directors, we may elect to extend the termination date of our
offering of shares reserved for issuance pursuant to our
distribution reinvestment plan, or to file a new registration
statement in connection with our distribution reinvestment plan,
until we have sold all shares allocated to such plan, in which
case participants in the plan will be notified. This offering
must be registered, or exempt from registration, in every state
in which we offer or sell shares. Generally, such registrations
are for a period of one year. Therefore, we may have to stop
selling shares in any state in which our registration is not
renewed or otherwise extended annually. We reserve the right to
terminate this offering at any time prior to the stated
termination date.
Cole
Capital Corporation
Cole Capital Corporation, our dealer manager, was organized in
1992 for the purpose of participating in and facilitating the
distribution of securities in programs sponsored by Cole Capital
Partners, its affiliates and its predecessors. Our dealer
manager is an affiliate of our advisor and, as a result, is not
in a position to make an independent review of us or this
offering. Accordingly, you will have to rely on your own
broker-dealer to make an independent review of the terms of this
offering. If your broker-dealer conducts an independent review
of this offering,
and/or
engages an independent due diligence reviewer to do so on its
behalf, we expect that we will pay or reimburse the expenses
associated with such review, which may create conflicts of
interest. If your broker-dealer does not conduct such a review,
you will not have the benefit of an independent review of the
terms of this offering. For additional information about Cole
Capital Corporation, including information relating to Cole
Capital Corporations affiliation with us, see the
Management Affiliated Dealer Manager
section of this prospectus.
Compensation
We Will Pay for the Sale of Our Shares
Except as provided below, we generally will pay to our
affiliated dealer manager, Cole Capital Corporation, selling
commissions in the amount of 7% of the gross proceeds of our
primary offering. We also will pay the dealer manager a fee in
the amount of 2% of the gross proceeds of our primary offering
as compensation for acting as the dealer manager and for
expenses incurred in connection with marketing and due diligence
expense reimbursement. No sales commissions or dealer manager
fees will be paid with respect to shares purchased pursuant to
our distribution reinvestment plan. We will not pay referral or
similar fees to any accountants, attorneys or other persons in
connection with the distribution of the shares.
The total amount of underwriting compensation, including selling
commissions, dealer manager fees and other expenses paid or
reimbursed by us, our sponsor or any other source in connection
with the offering, will
164
not exceed 10% of the gross proceeds of the primary offering.
Our dealer manager is responsible for monitoring the total
underwriting compensation to ensure that such amounts do not
exceed 10% of the gross proceeds of the primary offering.
The dealer manager will reallow to other broker-dealers
participating in this offering all of the selling commissions
paid to the dealer manager in respect of shares sold by such
participating broker-dealers. In addition, the dealer manager
may reallow to each of the participating broker-dealers all or a
portion of the dealer manager fee earned on the proceeds raised
by the participating broker-dealer. This reallowance would be in
the form of a non-accountable marketing allowance and due
diligence expense reimbursement. The amount of the reallowance
will be determined by the dealer manager based upon a number of
factors including the number of shares sold by the participating
broker-dealer in this offering, the broker-dealers level
of marketing support, and bona fide conference fees incurred,
each as compared to those of the other participating
broker-dealers.
We expect our dealer manager to utilize two distribution
channels to sell our shares, FINRA-registered broker-dealers and
non-registered investment advisory representatives. In the event
of the sale of shares in our primary offering by broker-dealers
that are members of FINRA, the purchase price generally will be
$10.00 per share. Selling commissions and dealer manager fees
generally will be paid in connection with such sales as set
forth in the table below. In the event of the sale of shares in
our primary offering through an investment advisory
representative, the purchase price for such shares will be $9.30
per share, reflecting the fact that we will not pay our dealer
manager the 7% selling commission on such shares, as described
in more detail below. All such sales must be made through a
registered broker-dealer of record.
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Per Share
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Total Minimum
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Total Maximum
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Primary Offering
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Price to Public
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$
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10.00
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$
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2,500,000
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$
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2,500,000,000
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Selling Commissions(1)
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0.70
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175,000
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175,000,000
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Dealer Manager Fee(2)
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0.20
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50,000
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50,000,000
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Proceeds to Cole Credit Property Trust IV, Inc.(3)
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$
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9.10
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$
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2,275,000
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$
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2,275,000,000
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Distribution Reinvestment Plan
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Price to Public
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$
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9.50
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$
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475,000,000
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Selling Commissions
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Dealer Manager Fee
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Proceeds to Cole Credit Property Trust IV, Inc.(3)
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$
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9.50
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$
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475,000,000
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(1)
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All selling commissions will be reallowed to participating
broker-dealers.
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(2)
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All or a portion of the dealer manager fee will be reallowed to
participating broker-dealers.
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(3)
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Before payment of other organization and offering expenses.
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We will not pay any selling commissions in connection with the
sale of shares to investors whose contracts for investment
advisory and related brokerage services include a fixed or
wrap fee feature. In instances where the investment
advisory representative is affiliated with a participating
broker-dealer, investors may agree with their participating
brokers to reduce the amount of selling commissions payable with
respect to the sale of their shares down to zero (a) if the
investor has engaged the services of a registered investment
advisor or other financial advisor who will be paid compensation
for investment advisory services or other financial or
investment advice or (b) if the investor is investing
through a bank trust account with respect to which the investor
has delegated the decision-making authority for investments made
through the account to a bank trust department. The net proceeds
to us will not be affected by reducing the commissions payable
in connection with such transaction. All investors will be
deemed to have contributed the same amount per share to us for
purposes of declaring and paying distributions. Neither our
dealer manager nor its affiliates will directly or indirectly
compensate any person engaged as an investment advisor or a bank
trust department by a potential investor as an inducement for
such investment advisor or bank trust department to advise
favorably
165
for an investment in our shares. In connection with the sale of
shares to investors who elect the fixed or wrap fee feature, the
dealer manager may pay to the investment advisor or other
financial advisor or the company that sponsors the wrap account,
marketing support, service or other denominated fees. In all
events, the amount of the dealer manager fee and any services or
other fee paid in connection with the sale of shares to
investors whose contracts for investment advisor or related
brokerage services include a fixed or wrap fee feature will not
exceed 10% of the gross proceeds of the shares acquired by such
investors.
We may sell shares in our primary offering to retirement plans
of broker-dealers participating in the offering, to
broker-dealers in their individual capacities, to IRAs and
qualified plans of their registered representatives or to any
one of their registered representatives in their individual
capacities (and their spouses, parents and minor children) at a
discount. The purchase price for such shares will be $9.30 per
share, reflecting the fact that selling commissions in the
amount of $0.70 per share will not be payable in connection with
such sales. The net proceeds to us from such sales will not be
affected by such sales of shares at a discount.
We or our affiliates also may provide permissible forms of
non-cash compensation to registered representatives of our
dealer manager and the participating broker-dealers, such as
golf shirts, fruit baskets, cakes, chocolates, a bottle of wine,
or tickets to a sporting event. In no event shall such items
exceed an aggregate value of $100 per annum per participating
salesperson, or be pre-conditioned on achievement of a sales
target. The value of such items will be considered underwriting
compensation in connection with this offering.
We have agreed to indemnify the participating broker-dealers,
including our dealer manager and selected registered investment
advisors, against certain liabilities arising under the
Securities Act. However, the Securities and Exchange Commission
takes the position that indemnification against liabilities
arising under the Securities Act is against public policy and is
unenforceable.
In addition to the compensation described above, our sponsor may
pay certain costs associated with the sale and distribution of
our shares. Such payments will be deemed to be
underwriting compensation by FINRA. In accordance
with the rules of FINRA, the table below sets forth the nature
and estimated amount of all items that will be viewed as
underwriting compensation by FINRA that are
anticipated to be paid by us and our sponsor in connection with
the offering. The amounts shown assume we sell all of the shares
offered hereby and that all shares are sold in our primary
offering through participating broker-dealers, which is the
distribution channel with the highest possible selling
commissions and dealer manager fees.
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Percent of
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Maximum Offering
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(Not Including
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Estimated
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Distribution
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Amount
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Reinvestment Plan)
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Selling commissions
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$
|
175,000,000
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7.0
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%
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Dealer manager
fee
(1)
|
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|
326,973
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0.0
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%*
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Dealer manager fee reallowance to participating broker-dealers
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33,750,000
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1.4
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%
|
Dealer manager wholesaling commissions, salaries and expense
reimbursement
|
|
|
33,470,214
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1.3
|
%
|
Broker-dealer conference fees, training and education meetings,
business entertainment, logoed items and sales incentives
|
|
|
6,802,813
|
|
|
|
0.3
|
%
|
Due diligence allowance
|
|
|
400,000
|
|
|
|
0.0
|
%*
|
Legal fees of the dealer manager
|
|
|
250,000
|
|
|
|
0.0
|
%*
|
|
|
|
|
|
|
|
|
|
Total
(2)
|
|
$
|
250,000,000
|
|
|
|
10.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
|
0.01% or less
|
|
(1)
|
|
Represents the estimated amount of the dealer manager fee that
will remain for the dealer manager after allocation to certain
expenses noted in the table, such as the dealer managers
wholesaling compensation.
|
|
(2)
|
|
Of this total amount, $175,000,000 and $50,000,000 (7% and 2% of
gross offering proceeds, excluding proceeds from our
distribution reinvestment plan) will be paid by us from the
proceeds of this offering in the form of selling commissions and
dealer manager fees, respectively. The remaining $25,000,000
|
166
|
|
|
|
|
(approximately 1% of gross offering proceeds, excluding proceeds
from our distribution reinvestment plan) in expenses will be
paid for reimbursements of other organization and offering
expenses.
|
It is important to note that we are permitted to reimburse our
advisor an amount up to 2.0% of gross offering proceeds,
including proceeds from sales of shares under our distribution
reinvestment plan, for other organization and offering expenses,
which includes both underwriting and non-underwriting expenses.
As shown in the Management Compensation table
elsewhere in this prospectus, we expect to reimburse
non-underwriting organization and offering expenses up to
$34,500,000. In no event will the total amount of underwriting
compensation paid by us in the form of organization and offering
expense reimbursements exceed an amount equal to 1% of the gross
offering proceeds, excluding proceeds from our distribution
reinvestment plan.
Shares Purchased
by Affiliates
Our executive officers and directors, as well as officers and
employees of CR IV Advisors and their family members (including
spouses, parents, grandparents, children and siblings) or other
affiliates, may purchase shares in the primary offering at a
discount. The purchase price for such shares will be $9.10 per
share, reflecting the fact that the 7% selling commission and
the 2% dealer manager fee will not be payable in connection with
such sales. The net offering proceeds we receive will not be
affected by such sales of shares at a discount. Our executive
officers, directors and other affiliates will be expected to
hold their shares purchased as stockholders for investment and
not with a view towards resale. In addition, shares purchased by
CR IV Advisors or its affiliates will not be entitled to vote on
any matter presented to the stockholders for a vote regarding
the removal of our advisor or any director or any of their
affiliates, or any transaction between us and any of them.
Shares purchased by our executive officers, directors, advisor
and any of their affiliates will not be subject to a
lock-up
agreement. With the exception of the 20,000 shares
initially sold to Cole Holdings Corporation in connection with
our organization, no director, officer, advisor or any affiliate
may own more than 9.8% (in value or number of shares, whichever
is more restrictive) of the aggregate of our outstanding common
stock. Pursuant to our charter, Cole Holdings Corporation is
prohibited from selling the 20,000 shares of our common
stock for so long as Cole Real Estate Investments remains our
sponsor; provided, however, that Cole Holdings Corporation may
transfer ownership of all or a portion of the 20,000 shares
of our common stock to other affiliates of our sponsor.
Volume
Discounts
We generally will pay to our affiliated dealer manager, Cole
Capital Corporation, a selling commission equal to 7% of the
gross proceeds of our primary offering. However, the selling
commission we will pay in respect of purchases of $500,001 or
more will be reduced with respect to the dollar volume of the
purchase in excess of that amount. Volume discounts reduce the
effective purchase price per share of common stock, allowing
large volume purchasers to acquire more shares with their
investment than would be possible if the full 7% selling
commission was paid. Volume discounts will be made available to
purchasers in accordance with the following table, based upon
our $10.00 per share offering price:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling
|
|
Selling
|
|
Effective
|
|
Dealer
|
|
Net
|
|
|
Commission
|
|
Commission
|
|
Purchase Price
|
|
Manager Fee
|
|
Proceeds
|
Subscription Amount
|
|
Percent
|
|
per Share
|
|
per Share
|
|
per Share
|
|
per Share
|
|
Up to $500,000
|
|
|
7.00
|
%
|
|
$
|
.70
|
|
|
$
|
10.00
|
|
|
$
|
0.20
|
|
|
$
|
9.10
|
|
$500,001-$1,000,000
|
|
|
6.00
|
%
|
|
$
|
.60
|
|
|
$
|
9.90
|
|
|
$
|
0.20
|
|
|
$
|
9.10
|
|
$1,000,001-$2,000,000
|
|
|
5.00
|
%
|
|
$
|
.50
|
|
|
$
|
9.80
|
|
|
$
|
0.20
|
|
|
$
|
9.10
|
|
$2,000,001-$3,000,000
|
|
|
4.00
|
%
|
|
$
|
.40
|
|
|
$
|
9.70
|
|
|
$
|
0.20
|
|
|
$
|
9.10
|
|
$3,000,001-$4,000,000
|
|
|
3.00
|
%
|
|
$
|
.30
|
|
|
$
|
9.60
|
|
|
$
|
0.20
|
|
|
$
|
9.10
|
|
Over $4,000,000
|
|
|
2.00
|
%
|
|
$
|
.20
|
|
|
$
|
9.50
|
|
|
$
|
0.20
|
|
|
$
|
9.10
|
|
For example, a purchaser who invests $600,000 will be entitled
to a discounted selling commission of 6% on the shares purchased
in excess of $500,000, reducing the effective purchase price per
share on the shares purchased in excess of $500,000 from $10 per
share to $9.90 per share. Thus, a $600,000 investment would
purchase 60,601 shares. As another example, for a
subscription amount of $1,500,000, the selling commission
167
for the first $500,000 is 7%; the discounted selling commission
for the next $500,000 (up to $1,000,000) is 6%; and the
discounted selling commission for the remaining $500,000 of the
subscription amount is 5%.
In its sole discretion, our sponsor may agree to pay a
participating broker-dealer all or a portion of the difference
between the 7% selling commission and the discounted selling
commission.
In addition, in order to encourage investments of more than
$4,000,000, Cole Capital Corporation, with the agreement of the
participating broker-dealer, may further agree to reduce or
eliminate the dealer manager fee
and/or
the
selling commission with respect to such investments.
The net proceeds to us will not be affected by volume discounts.
All investors will be deemed to have contributed the same amount
per share to us for purposes of declaring and paying
distributions. Therefore, an investor who has received a volume
discount will realize a better return on his or her investment
in our shares than investors who do not qualify for a discount.
Subscriptions may be combined for the purpose of determining the
volume discounts in the case of subscriptions made by any
purchaser, as that term is defined below. Any
request to combine more than one subscription must be made in
writing, submitted simultaneously with the subscription for
shares, and must set forth the basis for such request. Any
request for volume discounts will be subject to our verification
that all of the combined subscriptions were made by a single
purchaser.
For the purposes of such volume discounts, the term
purchaser includes:
|
|
|
|
|
an individual, his or her spouse and their children under the
age of 21 who purchase the shares for his, her or their own
account;
|
|
|
|
a corporation, partnership, association, joint-stock company,
trust fund or any organized group of persons, whether
incorporated or not;
|
|
|
|
an employees trust, pension, profit-sharing or other
employee benefit plan qualified under Section 401(a) of the
Internal Revenue Code; and
|
|
|
|
all commingled trust funds maintained by a given bank.
|
In addition, investors may request in writing to aggregate new
or previous subscriptions in us
and/or
in
other Cole-sponsored publicly offered programs that are not
valued daily (collectively, Eligible Programs) for purposes of
determining the dollar amount of shares purchased and any
resulting volume discount. For example, if you previously
purchased and still hold shares of our company or another
Eligible Program with an aggregate purchase price of $500,000,
and subsequently invest $100,000 in us and $100,000 in another
Eligible Program, you may request a reduction in the selling
commission on the $200,000 in new investments from 7% to 6%.
Such requests may be made with respect to purchases by a single
purchaser as defined above. For purposes of this
paragraph, the dollar amount of new or previous subscriptions in
Eligible Programs shall be the total purchase price paid for the
shares before the deduction of selling commissions or dealer
manager fees. Previous subscriptions will be counted only if the
purchaser still holds the shares. Shares purchased pursuant to a
distribution reinvestment plan (on which selling commissions and
dealer manager fees are not paid) will not be counted toward the
amount of previous subscriptions. Any request for a volume
discount pursuant to this paragraph must be submitted with the
order for which the discount is being requested, and will be
subject to verification of the purchasers holdings.
Minimum
Purchase Requirement
The minimum investment generally is 250 shares. You may not
transfer any of your shares if such transfer would result in
your owning less than the minimum investment amount, unless you
transfer all of your shares. In addition, you may not transfer
or subdivide your shares so as to retain less than the number of
shares required for the minimum purchase. In order to satisfy
the minimum purchase requirements for retirement plans, unless
otherwise prohibited by state law, a husband and wife may
jointly contribute funds from their separate IRAs, provided that
each such contribution is made in increments of $1,000. You
should note that an investment in shares of our common stock
will not, in itself, create a retirement plan and that, in order
to create a retirement plan, you must comply with all applicable
provisions of the Internal Revenue Code.
168
After you have purchased the minimum investment amount in this
offering or have satisfied the minimum purchase requirement of
any other Cole-sponsored public real estate program, any
additional purchase must be in increments of at least
100 shares or made pursuant to our distribution
reinvestment plan, which may be in lesser amounts.
Certain
Selected Dealers
Our dealer manager may, from time to time, enter into selected
dealer agreements that provide for a selling commission of up to
6% of the gross proceeds of the shares sold by such selected
dealer, and a dealer manager fee of up to 3% of the gross
proceeds of the shares sold by such selected dealer. The dealer
manager may reallow up to all of the dealer manager fee to such
selected dealers. In no event will the aggregate of the selling
commissions and the dealer manager fee be greater than 9% of the
gross proceeds of the shares sold by such selected dealer. The
aggregate amount of selling commissions and the dealer manager
fee that an investor would pay would not be affected by this
change. In addition or alternatively, our dealer manager may
enter into selected dealer agreements that provide for a selling
commission of less than 7% of the gross proceeds of the shares
sold by such selected dealer, with no corresponding increase in
the dealer manager fee. Under this arrangement, the aggregate
amount of selling commissions and the dealer manager fee that an
investor would pay would be less than 9% of the gross proceeds
of the shares sold by such selected dealer, reducing the
effective purchase price per share paid by such investor to an
amount less than $10.00 per share. The net proceeds to us will
not be affected by either of these arrangements. For purposes of
calculations in this Plan of Distribution section
and elsewhere in this prospectus, we have assumed a selling
commission of 7% of the gross proceeds of our primary offering
and a dealer manager fee of 2% of the gross proceeds of our
primary offering.
Minimum
Offering
Subscription proceeds will be placed in escrow until such time
as subscriptions aggregating at least the minimum offering of
250,000 shares of our common stock have been received and
accepted by us. Any shares purchased by our advisor or its
affiliates will not be counted in calculating the minimum
offering. Funds in escrow will be invested in short-term
investments, which may include obligations of, or obligations
guaranteed by, the U.S. government or bank money-market
accounts or certificates of deposit of national or state banks
that have deposits insured by the Federal Deposit Insurance
Corporation (including certificates of deposit of any bank
acting as a depository or custodian for any such funds) that
mature on or before the termination of the offering or that can
be readily sold or otherwise disposed of for cash by such date
without any dissipation of the offering proceeds. Subscribers
may not withdraw funds from the escrow account.
If subscriptions for at least the minimum offering have not been
received and accepted by
,
2013, which is one year after the effective date of this
offering, our escrow agent will promptly so notify us and this
offering will be terminated. Your funds and subscription
agreement will be returned to you promptly, without any
deduction for escrow expenses, within ten days after the date of
such termination. Interest will accrue on funds in the escrow
account as applicable to the short-term investments in which
such funds are invested. You will not receive interest on your
subscription payment unless we fail to sell the minimum number
of shares, in which case, we will return your subscription
payment to you with accrued interest.
Special
Notice to Pennsylvania Investors
Subscription proceeds received from residents of Pennsylvania
will be placed in an interest-bearing escrow account with the
escrow agent until subscriptions for shares aggregating at least
$148,750,000 have been received and accepted by us. If we have
not raised a minimum of $148,750,000 in gross offering proceeds
(including sales made to residents of other jurisdictions) by
the end of each
120-day
escrow period (with the initial
120-day
escrow period commencing upon the effectiveness of this
offering), we will notify Pennsylvania investors in writing by
certified mail within ten calendar days after the end of each
120-day
escrow period that they have a right to have their investments
returned to them. If a Pennsylvania investor requests the return
of his or her subscription funds within ten calendar days after
receipt of the notification, we must return those funds to the
investor, together with any interest earned on the funds for the
time those funds remain in escrow, within ten calendar days
after receipt of the investors request.
169
HOW TO
SUBSCRIBE
Persons who meet the applicable minimum suitability standards
described in the Suitability Standards section of
this prospectus and suitability standards determined by such
persons broker or financial advisor may purchase shares of
common stock. After you have read the entire prospectus and the
current supplement(s), if any, accompanying this prospectus, if
you want to purchase shares, you must proceed as follows:
(1) Complete the execution copy of the applicable
subscription agreement. A specimen copy of the subscription
agreement, including instructions for completing it for new
investors, is included in this prospectus as Appendix B.
After you become a stockholder, you may purchase additional
shares by completing and signing an additional investment
subscription agreement, a specimen copy of which is included in
this prospectus as Appendix C. A specimen copy of an
alternative version of the subscription agreement is attached as
Appendix D.
(2) Prior to the time we reach our minimum offering,
deliver a check to Cole Capital Corporation, or its designated
agent, for the full purchase price of the shares being
subscribed for, payable to UMB Bank, N.A., Agent for Cole
Credit Property Trust IV, Inc. or a recognizable
contraction or abbreviation thereof, including but not limited
to UMB Bank, N.A., f/b/o Cole Credit Property
Trust IV or UMB Bank, N.A., agent for Cole
REIT, along with the completed subscription agreement.
After we reach our minimum offering, Cole Capital Corporation
may instruct you to pay for your shares by delivering a check
for the full purchase price of the shares payable to Cole
Credit Property Trust IV, Inc. or alternatively
Cole Credit Property Trust IV or, Cole
REIT. Subscription funds must be accompanied by a
subscription agreement similar to the one contained in this
prospectus as Appendix B or Appendix D. Certain
dealers who have net capital, as defined in the
applicable federal securities regulations, of $250,000 or more
may instruct their customers to make their checks payable
directly to the dealer. In such case, the dealer will issue a
check made payable to us for the purchase price of your
subscription. The name of the dealer appears on the subscription
agreement.
(3) By executing the subscription agreement and paying the
full purchase price for the shares subscribed for, you will
attest that you meet the minimum net worth
and/or
income standards as provided in the Suitability
Standards section of this prospectus and as stated in the
subscription agreement.
An approved trustee must process through us and forward us
subscriptions made through IRAs, 401(k) plans and other
tax-deferred plans.
Subscriptions will be effective only upon our acceptance, and we
reserve the right to reject any subscription in whole or in
part. We may not accept a subscription for shares until at least
five business days after the date you receive the final
prospectus. Subject to compliance with
Rule 15c2-4
of the Exchange Act, our dealer manager
and/or
the
broker-dealers participating in the offering will promptly
submit a subscribers check on the business day following
receipt of the subscribers subscription documents and
check. In certain circumstances where the suitability review
procedures are more lengthy than customary or the
subscribers subscription documents or check are not in
good order, our bank will hold the check in accordance with
applicable legal requirements pending our acceptance of your
subscription.
We accept or reject subscriptions within 35 days after we
receive them. If your subscription agreement is rejected, your
funds, without interest or reductions for offering expenses,
commissions or fees, will be returned to you within ten business
days after the date of such rejection. If your subscription is
accepted, we will send you a confirmation of your purchase after
you have been admitted as an investor. We admit new investors at
least monthly and we may admit new investors more frequently.
170
SUPPLEMENTAL
SALES MATERIAL
In addition to this prospectus, we may utilize certain sales
material in connection with the offering of the shares, although
only when accompanied by or preceded by the delivery of this
prospectus. The sales materials may include information relating
to this offering, the past performance of our advisor and its
affiliates, property brochures and articles and publications
concerning real estate. In certain jurisdictions, some or all of
our sales material may not be permitted and will not be used in
those jurisdictions.
The offering of shares is made only by means of this prospectus.
Although the information contained in our supplemental sales
material will not conflict with any of the information contained
in this prospectus, the supplemental materials do not purport to
be complete, and should not be considered a part of this
prospectus or the registration statement of which this
prospectus is a part.
LEGAL
MATTERS
Venable LLP, Baltimore, Maryland, has passed upon the legality
of the common stock and Morris, Manning & Martin, LLP,
Atlanta, Georgia, has passed upon legal matters in connection
with our status as a REIT for federal income tax purposes.
Morris, Manning & Martin, LLP will rely on the opinion
of Venable LLP as to all matters of Maryland law. Neither
Venable LLP nor Morris, Manning & Martin, LLP purport
to represent our stockholders or potential investors, who should
consult their own counsel. Morris, Manning & Martin,
LLP also provides legal services to CR IV Advisors, our advisor,
as well as affiliates of CR IV Advisors, and may continue to do
so in the future.
EXPERTS
The consolidated balance sheets included in this prospectus have
been audited by Deloitte & Touche LLP, an independent
registered public accounting firm, as stated in their report
appearing herein. Such consolidated balance sheets have been so
included in reliance upon the report of such firm given upon
their authority as experts in accounting and auditing.
WHERE YOU
CAN FIND MORE INFORMATION
We have filed a registration statement on
Form S-11
with the Securities and Exchange Commission with respect to the
shares of our common stock to be issued in this offering. We are
required to file annual, quarterly and current reports, proxy
statements and other information with the Securities and
Exchange Commission. You may request and obtain a copy of these
filings, at no cost to you, by writing or telephoning us at the
following address:
Cole Credit Property Trust IV, Inc.
Attn: Investor Relations
2555 East Camelback Road, Suite 400
Phoenix, Arizona 85016
Tel: (866)
907-2653
One of our affiliates maintains an Internet site at
http://www.colecapital.com
,
at which there is additional information about us. The contents
of that site are not incorporated by reference in, or otherwise
a part of, this prospectus.
This prospectus, as permitted under the rules of the Securities
and Exchange Commission, does not contain all of the information
set forth in the registration statement and the exhibits related
thereto. For
171
additional information relating to us, we refer you to the
registration statement and the exhibits to the registration
statement. Statements contained in this prospectus as to the
contents of any contract or document are necessarily summaries
of such contract or document and in each instance, if we have
filed the contract or document as an exhibit to the registration
statement, we refer you to the copy of the contract or document
filed as an exhibit to the registration statement.
You can read our registration statement and the exhibits thereto
and our future Securities and Exchange Commission filings over
the Internet at
http://www.sec.gov.
You may also read and copy any document we file with the
Securities and Exchange Commission at its public reference room
at 100 F Street, N.W., Washington, D.C. 20549.
You may also obtain copies of the documents at prescribed rates
by writing to the Public Reference Section of the Securities and
Exchange Commission at 100 F Street, N.W.,
Washington, D.C. 20549. Please contact the Securities and
Exchange Commission at
1-800-SEC-0330
or
e-mail
at
publicinfo@sec.gov
for further information about the
public reference room.
172
REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholder of
Cole Credit Property Trust IV, Inc. (formerly Cole Advisor
Retail Income REIT, Inc.)
Phoenix, Arizona
We have audited the accompanying consolidated balance sheets of
Cole Credit Property Trust IV, Inc. (formerly Cole Advisor
Retail Income REIT, Inc.) and subsidiary (the
Company) as of December 31, 2011 and 2010.
These financial statements are the responsibility of the
Companys management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain
reasonable assurance about whether the balance sheets are free
of material misstatement. The Company is not required to have,
nor were we engaged to perform, an audit of its internal control
over financial reporting. Our audit included consideration of
internal control over financial reporting as a basis for
designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion
on the effectiveness of the Companys internal control over
financial reporting. Accordingly, we express no such opinion. An
audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, such consolidated balance sheets present fairly,
in all material respects, the financial position of Cole Credit
Property Trust IV, Inc. (formerly Cole Advisor Retail
Income REIT, Inc.) and subsidiary as of December 31, 2011
and 2010, in conformity with accounting principles generally
accepted in the United States of America.
/s/ Deloitte & Touche LLP
Phoenix, Arizona
January 23, 2012
F-2
|
|
|
|
|
|
|
|
|
|
|
December 31, 2011
|
|
|
December 31, 2010
|
|
|
ASSETS
|
Cash and cash equivalents
|
|
$
|
200,000
|
|
|
$
|
200,000
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
200,000
|
|
|
$
|
200,000
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS EQUITY
|
Preferred stock, $.01 par value, 10,000,000 shares
authorized, none issued and outstanding
|
|
$
|
|
|
|
$
|
|
|
Common stock, $.01 par value; 490,000,000 shares
authorized, 20,000 shares issued and outstanding
|
|
|
200
|
|
|
|
200
|
|
Capital in excess of par value
|
|
|
199,800
|
|
|
|
199,800
|
|
|
|
|
|
|
|
|
|
|
Total stockholders equity
|
|
$
|
200,000
|
|
|
$
|
200,000
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to consolidated balance sheets.
F-3
NOTE 1
ORGANIZATION
Cole Credit Property Trust IV, Inc. (formerly Cole Advisor
Retail Income REIT, Inc.) (the Company) was formed
on July 27, 2010 and is a Maryland corporation that intends
to qualify as a real estate investment trust (REIT)
for federal income tax purposes. The Company is the sole general
partner of and owns a 99.9% partnership interest in Cole
Operating Partnership IV LP, a Delaware limited partnership
(CCPT IV OP). Cole REIT Advisors IV, LLC (CR
IV Advisors), the advisor to the Company, is the sole
limited partner and owner of an insignificant noncontrolling
partnership interest of less than 0.1% of CCPT IV OP.
Substantially all of the Companys business will be
conducted through CCPT IV OP. The Company has filed a
registration statement on
Form S-11
with the Securities and Exchange Commission with respect to a
public offering (the Offering) of
$2.975 billion in shares of common stock.
A maximum of $2.5 billion in shares of common stock may be
sold to the public. In addition, the Company plans to register
an additional $475 million in shares of common stock that
will be available only to stockholders who elect to participate
in the Companys distribution reinvestment plan under which
stockholders may elect to have their distributions reinvested in
additional shares of the Companys common stock at $9.50
per share during the Offering or if after the time the
Companys board of directors has conducted a full valuation
of the Companys assets and has made a reasonable estimate
of the value of the shares of common stock, then the shares of
common stock will be offered at a purchase price equal to the
most recently disclosed per share value.
The Company intends to use substantially all of the net proceeds
from the Offering to acquire and operate a diversified portfolio
of (1) necessity retail properties that are single-tenant
and multi-tenant power centers, which are anchored by brand-name
creditworthy national or regional retailers under long-term net
leases, and are strategically located throughout the United
States and U.S. protectorates, (2) income producing
properties in other sectors, such as office and industrial
properties, which may share certain core characteristics with
the Companys retail properties, (3) other real estate
related assets, such as equity and debt securities of other real
estate companies, commercial mortgage-backed securities and
notes receivable secured by commercial real estate and
(4) cash, cash equivalents and other short-term investments.
The Company and its majority owned subsidiary have not begun
their principal operations.
The Company changed its name from Cole Advisor Retail Income
REIT, Inc. to Cole Credit Property Trust IV, Inc. effective
May 20, 2011. In addition, on May 20, 2011, the
Companys operating partnership changed its name from Cole
Advisor Retail Income Operating Partnership, LP to Cole
Operating Partnership IV LP, and the Companys advisor
changed its name from Cole Advisors: Retail Income, LLC to Cole
REIT Advisors IV, LLC.
The Company has evaluated subsequent events through the date the
consolidated balance sheets were available for issuance.
NOTE 2
CAPITALIZATION
The Company is authorized to issue 490,000,000 shares of
common stock and 10,000,000 shares of preferred stock. All
shares of such stock have a par value of $.01 per share. On
August 11, 2010, the Company sold 20,000 shares of
common stock, at $10.00 per share, to Cole Holdings Corporation,
the indirect owner of the Companys advisor and manager.
The Companys Board of Directors may authorize additional
shares of capital stock and amend their terms without obtaining
stockholder approval.
F-4
COLE
CREDIT PROPERTY TRUST IV, INC.
(Formerly Cole Advisor Retail Income REIT, Inc.)
NOTES TO CONSOLIDATED BALANCE SHEETS
As of December 31, 2011 and
2010 (Continued)
NOTE 3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles
of Consolidation and Basis of Presentation
The consolidated balance sheets include the accounts of the
Company and its majority owned subsidiary. All intercompany
accounts have been eliminated in consolidation.
Cash
and Cash Equivalents
The Company considers all highly liquid instruments with
maturities when purchased of three months or less to be cash
equivalents. The Company considers investments in highly liquid
money market accounts to be cash equivalents.
Organization
and Offering Expenses
The Companys advisor funds all of the organization and
offering expenses on the Companys behalf and may be
reimbursed for such costs up to 2.0% of the gross offering
proceeds, including proceeds from sales of shares under our
distribution reinvestment plan. These costs are not included in
the balance sheet of the Company because such costs are not a
liability of the Company until subscriptions for the minimum
number of shares of common stock are received and accepted by
the Company. When recorded by the Company, organization costs
will be expensed as incurred. Offering costs include items such
as legal and accounting fees, marketing, promotional and
printing costs. All offering costs will be recorded as a
reduction of capital in excess of par value. As of
December 31, 2011 and 2010, CR IV Advisors had incurred
approximately $819,000 and $523,000, respectively, of costs
related to the organization of the Company and the Offering.
Subsequent to December 31, 2011, Cole Advisors incurred
approximately $23,000 of additional costs related to the
Offering.
Income
Taxes
The Company intends to make an election to be taxed as a REIT
under Sections 856 through 860 of the Internal Revenue Code
commencing with its taxable year ending December 31, 2012. If
the Company qualifies for taxation as a REIT, the Company
generally will not be subject to federal corporate income tax to
the extent it distributes its taxable income to its
stockholders. REITs are subject to a number of other
organizational and operational requirements. Even if the Company
qualifies for taxation as a REIT, it may be subject to certain
state and local taxes on its income and property, and federal
income and excise taxes on its undistributed income.
NOTE 4
RELATED PARTY ARRANGEMENTS
Certain affiliates of the Company will receive fees and
compensation in connection with the Offering, and the
acquisition, management and sale of the assets of the Company.
Cole Capital Corporation (Cole Capital), the
affiliated dealer-manager, will receive a commission of up to 7%
of the gross proceeds of our primary offering before reallowance
of commissions earned by participating broker-dealers. Cole
Capital intends to reallow 100% of commissions earned to
participating broker-dealers. In addition, up to 2% of the gross
proceeds of our primary offering before reallowance to
participating broker-dealers will be paid to Cole Capital as a
dealer-manager fee. Cole Capital, in its sole discretion, may
reallow all or a portion of its dealer-manager fee to such
participating broker-dealers.
CR IV Advisors may receive up to 2.0% of gross offering
proceeds, including proceeds from sales of shares under our
distribution reinvestment plan, for reimbursement of
organization and offering expenses. All organization and
offering expenses (excluding selling commissions and the
dealer-manager fee) are being paid for by CR IV Advisors and
could be reimbursed by the Company up to 2.0% of aggregate gross
offering proceeds, including proceeds from sales of shares under
our distribution reinvestment plan.
F-5
COLE
CREDIT PROPERTY TRUST IV, INC.
(Formerly Cole Advisor Retail Income REIT, Inc.)
NOTES TO CONSOLIDATED BALANCE SHEETS
As of December 31, 2011 and
2010 (Continued)
CR IV Advisors or its affiliates also will receive acquisition
fees of up to 2% of: (i) the contract purchase price of
each property or asset the Company acquires; (ii) the
amount paid in respect of the development, construction or
improvement of each asset the Company acquires; (iii) the
purchase price of any loan the Company acquires; and
(iv) the principal amount of any loan the Company
originates.
If CR IV Advisors or its affiliates provides a substantial
amount of services (as determined by a majority of the
Companys independent directors) in connection with the
sale of properties, the Company will pay CR IV Advisors or
its affiliate a disposition fee in an amount equal to up to
one-half of the brokerage commission paid on the sale of
property, not to exceed 1% of the contract price of each
property sold; provided, however, in no event may the
disposition fee paid to CR IV Advisors or its affiliates, when
added to the real estate commissions paid to unaffiliated third
parties, exceed the lesser of the customary competitive real
estate commission or an amount equal to 6% of the contract sales
price.
The Company will pay CR IV Advisors a monthly advisory fee based
upon the Companys monthly average invested assets, which
is equal to the following amounts: (i) an annualized rate
of 0.75% will be paid on the Companys average invested
assets that are between $0 to $2 billion; (ii) an
annualized rate of 0.70% will be paid on the Companys
average invested assets that are between $2 billion to
$4 billion; and (iii) an annualized rate of 0.65% will
be paid on the Companys average invested assets that are
over $4 billion.
The Company will reimburse CR IV Advisors for the expenses it
paid or incurred in connection with the services provided to the
Company, subject to the limitation that the Company will not
reimburse for any amount by which its operating expenses
(including the advisory fee) at the end of the four preceding
fiscal quarters exceeds the greater of (i) 2% of average
invested assets, or (ii) 25% of net income other than any
additions to reserves for depreciation, bad debts or other
similar non-cash reserves and excluding any gain from the sale
of assets for that period. The Company will not reimburse for
personnel costs in connection with services for which CR IV
Advisors receives acquisition fees or disposition fees.
If the Company is sold or its assets are liquidated, CR IV
Advisors will be entitled to receive a subordinated performance
fee equal to 15% of the net sale proceeds remaining after
investors have received a return of their net capital invested
and an 8% annual cumulative, non-compounded return.
Alternatively, if the Companys shares are listed on a
national securities exchange, CR IV Advisors will be entitled to
a subordinated performance fee equal to 15% of the amount by
which the market value of the Companys outstanding stock
plus all distributions paid by the Company prior to listing,
exceeds the sum of the total amount of capital raised from
investors and the amount of distributions necessary to generate
an 8% annual cumulative, non-compounded return to investors. As
an additional alternative, upon termination of the advisory
agreement, CR IV Advisors may be entitled to a subordinated
performance fee similar to that to which CR IV Advisors would
have been entitled had the portfolio been liquidated (based on
an independent appraised value of the portfolio) on the date of
termination.
NOTE 5
ECONOMIC DEPENDENCY
Under various agreements, the Company has engaged or will engage
the CR IV Advisors and its affiliates to provide certain
services that are essential to the Company, including asset
management services, supervision of the management and leasing
of properties owned by the Company, asset acquisition and
disposition decisions, the sale of shares of the Companys
common stock available for issue, as well as other
administrative responsibilities for the Company including
accounting services and investor relations. As a result of these
relationships, the Company is dependent upon CR IV Advisors and
its affiliates. In the event that these companies were unable to
provide the Company with the respective services, the Company
would be required to find alternative providers of these
services.
F-6
APPENDIX A
PRIOR
PERFORMANCE TABLES
The prior performance tables that follow present certain
information regarding the real estate programs previously
sponsored by entities affiliated with our sponsor, Cole Real
Estate Investments. The company has presented all prior programs
that have similar investment objectives to this offering. In
determining which prior programs have similar investment
objectives to this offering, the company considered factors such
as the type of real estate acquired by the program, the extent
to which the program was designed to provide current income
through the payment of cash distributions or to protect and
preserve capital contributions, and the extent to which the
program seeks to increase the value of the investments made in
the program. The information in this section should be read
together with the summary information in this prospectus under
Prior Performance Summary.
These tables contain information that may aid a potential
investor in evaluating the program presented. However, the
information contained in these tables does not relate to the
properties held or to be held by us, and the purchase of our
shares will not create any ownership interest in the programs
included in these tables.
These tables are presented on a tax basis rather than in
accordance with accounting principles generally accepted in the
United States (GAAP) except where noted. Tax basis
accounting does not take certain income or expense accruals into
consideration at the end of each fiscal year. Income may be
understated in the tables, as GAAP accounting would require
certain amortization or leveling of rental revenue, the amount
of which is undetermined at this time. Expenses may be
understated by monthly operating expenses, which typically are
paid in arrears. The following tables are included in this
section:
|
|
|
|
|
Table I Experience in Raising and Investing Funds;
|
|
|
|
Table II Compensation to Sponsor;
|
|
|
|
Table III Operating Results of Prior Programs;
|
|
|
|
Table IV Results of Completed Programs; and
|
|
|
|
Table V Sales or Disposals of Properties.
|
For information regarding the acquisitions of properties by
programs sponsored by Cole Real Estate Investments during the
three years ending December 31, 2010, see Table VI
contained in Part II of our registration statement, which
is not a part of this prospectus. We will provide a copy of
Table VI to you upon written request and without charge.
Past performance is not necessarily indicative of future results.
A-1
TABLE
I
EXPERIENCE
IN RAISING AND INVESTING FUNDS (UNAUDITED)
This table provides a summary of the experience of the sponsors
of Prior Real Estate Programs for which offerings have been
closed since January 1, 2008. Information is provided with
regard to the manner in which the proceeds of the offerings have
been applied. Also set forth below is information pertaining to
the timing and length of these offerings and the time period
over which the proceeds have been invested in the properties.
All figures are as of December 31, 2010.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit Property
|
|
|
Cole Credit Property
|
|
|
Cole Net Lease
|
|
|
|
Trust II, Inc.
(4)
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|
|
Trust III, Inc.
(5)
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|
|
Portfolio VI
(6)(7)
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|
Dollar amount offered
|
|
$
|
2,270,000,000
|
|
|
$
|
5,227,500,000
|
|
|
$
|
25,640,000
|
|
Dollar amount raised
|
|
|
2,162,851,236
|
|
|
|
2,485,789,148
|
|
|
|
25,640,000
|
|
Percentage amount raised
|
|
|
100.0
|
%
|
|
|
100.0
|
%
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|
|
100.0
|
%
|
Less offering expenses:
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|
|
|
|
|
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|
|
|
Selling commissions and discounts retained by affiliates
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|
6.3
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%
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|
6.8
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%
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|
|
5.5
|
%
|
Organizational expenses(1)
|
|
|
2.4
|
%
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|
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3.0
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%
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|
|
1.0
|
%
|
Other
|
|
|
|
|
|
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|
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|
|
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|
Reserves
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|
|
0.1
|
%
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|
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0.1
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%
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|
|
0.9
|
%
|
Percent available for investment
|
|
|
91.2
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%
|
|
|
90.1
|
%
|
|
|
92.6
|
%
|
Acquisition costs:(2)
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|
|
|
|
|
|
|
|
|
|
|
|
Prepaid items and fees related to purchase of property
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|
|
1.1
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%
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|
|
0.5
|
%
|
|
|
0.7
|
%
|
Cash down payment
|
|
|
88.1
|
%
|
|
|
87.6
|
%
|
|
|
91.9
|
%
|
Acquisition fees(3)
|
|
|
2.0
|
%
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|
|
2.0
|
%
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|
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|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
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|
|
91.2
|
%
|
|
|
90.1
|
%
|
|
|
92.6
|
%
|
Percent leverage
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|
|
50
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%
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|
|
35
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%
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|
|
54
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%
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Date offering began
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6/27/2005
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|
|
10/15/2008
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|
|
9/10/2007
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Length of offering (in months)
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Ongoing
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Ongoing
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5
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Months to invest 90% of amount available for investment
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|
40
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24
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|
3
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(1)
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Organizational expenses include legal, accounting, printing,
escrow, filing, recording and other related expenses associated
with the formation and original organization of the program and
also includes fees paid to the sponsor and to affiliates.
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(2)
|
|
Acquisition costs expressed as a percentage represent the costs
incurred to acquire real estate with the initial capital raised
in the respective offerings and do not include the costs
incurred to acquire additional real estate with the proceeds
from financing transactions and excess working capital.
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(3)
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|
Acquisition fees include fees paid to the sponsor or affiliates
based upon the terms of the offering memorandum or prospectus.
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(4)
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|
These amounts include Cole Credit Property Trust II,
Inc.s initial, follow-on and distribution reinvestment
plan offerings. Cole Credit Property Trust II, Inc. began its
initial offering on June 27, 2005 and closed its initial
offering on May 22, 2007. The total dollar amount
registered and available to be offered in the initial offering
was $552.8 million. The total dollar amount raised in the
initial offering was $547.4 million. Cole Credit Property
Trust II, Inc. began its follow-on offering on May 23,
2007 and closed its follow-on offering on January 2, 2009.
The total dollar amount registered and available to be
|
Past performance is not necessarily indicative of future results.
A-2
TABLE
I
EXPERIENCE
IN RAISING AND INVESTING FUNDS
(UNAUDITED) (Continued)
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|
|
offered in the follow-on offering was $1.5 billion. The
total dollar amount raised in the follow-on offering was
$1.5 billion. It took Cole Credit Property Trust II,
Inc. 40 months to invest 90% of the amount available for
investment in its initial and follow-on offerings. Cole Credit
Property Trust II, Inc. began its distribution reinvestment
plan offering on September 18, 2008 and was currently
offering shares under this distribution reinvestment plan
offering as of December 31, 2010. The total initial dollar
amount registered and available to be offered in the
distribution reinvestment plan offering is $285.0 million.
The total dollar amount raised in the distribution reinvestment
plan offering was $144.5 million as of December 31,
2010.
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(5)
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|
These amounts include Cole Credit Property Trust III,
Inc.s initial and follow-on offerings. Cole Credit
Property Trust III, Inc. began its initial offering on
October 1, 2008 and closed its initial offering on
October 1, 2010. The total dollar amount registered and
available to be offered in the initial offering was
$2.49 billion. The total dollar amount raised in the
initial offering was $2.2 billion. Cole Credit Property
Trust III, Inc. began its follow-on offering on
October 1, 2010. The total dollar amount registered and
available to be offered in the follow-on offering was
$2.7 billion. The total dollar amount raised in the
follow-on offering was $316.3 million as of
December 31, 2010. It took Cole Credit Property
Trust III, Inc. 23 months to invest 90% of the amount
available for investment in its initial and follow-on offerings.
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(6)
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|
The Offering is a Delaware Statutory Trust Program
sponsored by Cole Real Estate Investments which consists of the
sale of Delaware statutory trust interests in properties
initially owned by subsidiaries of Cole Collateralized Senior
Notes, LLC, Cole Collateralized Senior Notes II, LLC, Cole
Collateralized Senior Notes III, LLC or Cole Collateralized
Senior Notes IV, LLC.
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(7)
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|
Acquisition cost amounts represent the costs paid by the
tenant-in-common
or Delaware statutory trust investors to acquire interest in the
properties.
|
Past performance is not necessarily indicative of future results.
A-3
TABLE
II
COMPENSATION
TO SPONSOR (UNAUDITED)
This table sets forth the compensation paid to our sponsor and
its affiliates, including compensation paid out of the offering
proceeds and compensation paid in connection with the ongoing
operations of Prior Real Estate Programs. Prior Real Estate
Programs whose offerings have closed since January 1, 2008
are shown separately and all other programs have been
aggregated. Each of the Prior Real Estate Programs for which
information is presented below has similar or identical
investment objectives to this program. All amounts are as of
December 31, 2010.
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Cole Credit Property
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Cole Credit Property
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Cole Net Lease
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Trust II, Inc.
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Trust III, Inc.
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Portfolio VI
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|
Date offering commenced
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|
|
6/27/2005
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|
|
|
10/15/2008
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|
|
|
9/10/2007
|
|
Dollar amount raised
|
|
$
|
2,162,851,236
|
|
|
$
|
2,485,789,148
|
|
|
$
|
25,639,300
|
|
Amount paid to sponsor from proceeds of offering:
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|
|
|
|
|
|
|
|
|
|
|
Underwriting fees
|
|
|
25,741,562
|
|
|
|
24,501,423
|
|
|
|
256,401
|
|
Acquisition fees and real estate commissions(1)
|
|
|
68,046,144
|
|
|
|
61,275,869
|
|
|
|
|
|
Advisory fees
|
|
|
|
|
|
|
|
|
|
|
|
|
Other(2)
|
|
|
20,819,387
|
|
|
|
10,805,697
|
|
|
|
|
|
Amount of cash generated from operations before deducting
payments to sponsor
|
|
|
398,931,974
|
|
|
|
54,293,903
|
|
|
|
5,285,977
|
|
Amount paid to sponsor from operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
Property management fees
|
|
|
15,426,105
|
|
|
|
3,239,994
|
|
|
|
|
|
Partnership management fees(3)
|
|
|
25,953,917
|
|
|
|
9,173,459
|
|
|
|
74,797
|
|
Reimbursements
|
|
|
5,421,724
|
|
|
|
6,115,956
|
|
|
|
|
|
Leasing commissions
|
|
|
546,695
|
|
|
|
|
|
|
|
|
|
Other(4)
|
|
|
95,869
|
|
|
|
|
|
|
|
|
|
Amount of property sales and refinancing before deducting
payments to sponsor
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount paid to sponsor from property sales and refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive fees
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate commissions
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
Past performance is not necessarily indicative of future results.
A-4
TABLE
II
COMPENSATION
TO SPONSOR (UNAUDITED) (Continued)
|
|
|
|
|
|
|
60 Other Programs
|
|
|
|
(6)
|
|
|
Date offering commenced
|
|
|
N/A
|
|
Dollar amount raised
|
|
$
|
|
|
Amount paid to sponsor from proceeds of offering:
|
|
|
|
|
Underwriting fees
|
|
|
|
|
Acquisition fees and real estate commissions(1)
|
|
|
964,045
|
|
Advisory fees
|
|
|
|
|
Other(2)
|
|
|
14,500
|
|
Amount of cash generated from operations before deducting
payments to sponsor
|
|
|
80,532,948
|
|
Amount paid to sponsor from operations:
|
|
|
|
|
Property management fees
|
|
|
2,411,047
|
|
Partnership management fees(3)
|
|
|
3,413,397
|
|
Reimbursements
|
|
|
|
|
Leasing commissions
|
|
|
10,500
|
|
Other(4)
|
|
|
|
|
Amount of property sales and refinancing before deducting
payments to sponsor
|
|
|
|
|
Cash(5)
|
|
|
11,438,651
|
|
Notes
|
|
|
|
|
Amount paid to sponsor from property sales and refinancing
|
|
|
|
|
Incentive fees
|
|
|
|
|
Real estate commissions
|
|
|
|
|
Other
|
|
|
|
|
|
|
|
(1)
|
|
Properties are acquired with a combination of funds from
offering proceeds and debt. The acquisition and real estate
commissions reported in this table include the total amount of
fees paid to the sponsor or its affiliates regardless of the
funding source for these costs.
|
|
(2)
|
|
Amounts primarily relate to loan coordination fees, a
development fee and reimbursement of certain offering costs paid
by the sponsor.
|
|
(3)
|
|
Amounts primarily relate to asset management fees and expenses.
|
|
(4)
|
|
Amounts primarily relate to construction management fees.
|
|
(5)
|
|
Amounts herein include initial investments of capital raised and
properties acquired through reinvested amounts.
|
|
(6)
|
|
60 of the offerings of the prior programs aggregated herein were
not closed within the past three years and therefore are not
shown separately. Amounts presented represent aggregate payments
to the sponsor in the most recent three years. The programs have
similar investment objectives to this program.
|
Past performance is not necessarily indicative of future results.
A-5
TABLE
III
OPERATING
RESULTS OF PRIOR PROGRAMS (UNAUDITED)
The following sets forth the unaudited operating results of
Prior Real Estate Programs sponsored by the sponsor of this
program, the offerings of which have been closed since
January 1, 2006. The information relates only to programs
with investment objectives similar to this program. All figures
are as of December 31 of the year indicated, except as noted.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Collateralized Senior Notes IV, LLC
|
|
|
|
May 2005
|
|
|
|
(Unaudited)
|
|
|
|
2006
|
|
|
2007
|
|
|
2008
|
|
|
2009
|
|
|
2010
|
|
|
Gross Revenues
|
|
$
|
2,070,894
|
|
|
$
|
1,520,899
|
|
|
$
|
1,419,521
|
|
|
$
|
683,412
|
|
|
$
|
320,154
|
|
Profit (loss) on sale of properties
|
|
|
|
|
|
|
121,341
|
|
|
|
|
|
|
|
|
|
|
|
(354,000
|
)
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses(1)
|
|
|
1,131,745
|
|
|
|
85,088
|
|
|
|
146,340
|
|
|
|
138,335
|
|
|
|
261,741
|
|
Interest paid to note investors
|
|
|
2,371,674
|
|
|
|
2,369,739
|
|
|
|
2,369,739
|
|
|
|
2,369,739
|
|
|
|
2,424,395
|
|
Other interest expense
|
|
|
536,618
|
|
|
|
343,887
|
|
|
|
191,182
|
|
|
|
48,481
|
|
|
|
|
|
Depreciation and amortization(2)
|
|
|
426,629
|
|
|
|
460,010
|
|
|
|
540,056
|
|
|
|
611,779
|
|
|
|
463,232
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (loss) Tax Basis(3)
|
|
$
|
(2,395,772
|
)
|
|
$
|
(1,616,484
|
)
|
|
$
|
(1,827,796
|
)
|
|
$
|
(2,484,922
|
)
|
|
$
|
(3,183,214
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operations(4)(8)
|
|
$
|
(2,395,772
|
)
|
|
$
|
(1,737,825
|
)
|
|
$
|
(1,827,796
|
)
|
|
$
|
(2,484,922
|
)
|
|
$
|
(2,829,214
|
)
|
from gain (loss) on sale
|
|
|
|
|
|
|
121,341
|
|
|
|
|
|
|
|
|
|
|
|
(354,000
|
)
|
Cash generated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operations
|
|
|
402,531
|
|
|
|
1,091,924
|
|
|
|
1,081,999
|
|
|
|
496,596
|
|
|
|
58,413
|
|
from sales
|
|
|
28,358,859
|
|
|
|
7,870,622
|
|
|
|
1,222,901
|
|
|
|
|
|
|
|
|
|
from refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated from operations, sales and refinancing
|
|
|
28,761,390
|
|
|
|
8,962,546
|
|
|
|
2,304,900
|
|
|
|
496,596
|
|
|
|
58,413
|
|
Less: Cash distributions to investors(9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operating cash flow
|
|
|
402,531
|
|
|
|
1,091,924
|
|
|
|
1,081,999
|
|
|
|
496,596
|
|
|
|
58,413
|
|
from sales and refinancing
|
|
|
1,969,143
|
|
|
|
1,277,815
|
|
|
|
1,287,740
|
(10)
|
|
|
1,873,143
|
(10)
|
|
|
2,365,982
|
(10)
|
from other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated (deficiency) after cash distributions
|
|
$
|
26,389,716
|
|
|
$
|
6,592,807
|
|
|
$
|
(64,839
|
)
|
|
$
|
(1,873,143
|
)
|
|
$
|
(2,365,982
|
)
|
Less: Special items (not including sales and refinancing)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated (deficiency) after cash distributions and special
items
|
|
$
|
26,389,716
|
|
|
$
|
6,592,807
|
|
|
$
|
(64,839
|
)
|
|
$
|
(1,873,143
|
)
|
|
$
|
(2,365,982
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax and distribution data per $1,000 invested
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal income tax results:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operations
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
(5)
|
from recapture
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital gain (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash distributions to investors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Source (on a tax basis)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment income
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
(5)
|
Return of capital
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Source (on a cash basis)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount (in percentage terms) remaining invested in program
properties at the end of the last year reported in the table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2
|
%
|
Past performance is not necessarily indicative of future results.
A-6
TABLE
III
OPERATING
RESULTS OF PRIOR PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit Property Trust II, Inc.
|
|
|
|
June 2005
|
|
|
|
(Unaudited)
|
|
|
|
2006
|
|
|
2007
|
|
|
2008
|
|
|
2009
|
|
|
2010
|
|
|
Gross Revenues
|
|
$
|
19,519,507
|
|
|
$
|
92,100,308
|
|
|
$
|
202,282,667
|
|
|
$
|
276,026,961
|
|
|
$
|
269,274,321
|
|
Equity in income of unconsolidated joint venture
|
|
|
|
|
|
|
|
|
|
|
470,978
|
|
|
|
612,432
|
|
|
|
964,828
|
|
Profit (loss) on sale of properties
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses(1)
|
|
|
3,306,511
|
|
|
|
12,662,270
|
|
|
|
32,191,062
|
|
|
|
50,986,169
|
|
|
|
47,170,233
|
|
Interest expense
|
|
|
8,397,634
|
|
|
|
39,075,748
|
|
|
|
78,063,338
|
|
|
|
98,996,703
|
|
|
|
102,976,724
|
|
Depreciation and amortization(2)
|
|
|
6,469,366
|
|
|
|
30,482,273
|
|
|
|
63,858,422
|
|
|
|
90,750,170
|
|
|
|
85,162,219
|
|
Impairment of real estate assets
|
|
|
|
|
|
|
5,400,000
|
|
|
|
3,550,000
|
|
|
|
13,500,000
|
|
|
|
4,500,435
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (loss) GAAP Basis(6)
|
|
$
|
1,345,996
|
|
|
$
|
4,480,017
|
|
|
$
|
25,090,823
|
|
|
$
|
22,406,351
|
|
|
$
|
30,429,538
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operations(4)
|
|
$
|
3,104,068
|
|
|
$
|
15,703,828
|
|
|
$
|
42,432,587
|
|
|
$
|
53,168,771
|
|
|
$
|
45,882,738
|
(7)
|
from gain on sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operations
|
|
|
7,861,475
|
|
|
|
43,366,041
|
|
|
|
96,073,918
|
|
|
|
116,871,698
|
|
|
|
105,627,000
|
|
from sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated from operations, sales and refinancing
|
|
|
7,861,475
|
|
|
|
43,366,041
|
|
|
|
96,073,918
|
|
|
|
116,871,698
|
|
|
|
105,627,000
|
|
Less: Cash distributions to investors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operating cash flow
|
|
|
7,075,329
|
|
|
|
37,727,364
|
|
|
|
96,051,343
|
|
|
|
116,871,698
|
|
|
|
105,627,000
|
|
from sales and refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from other(11)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18,111,554
|
(12)
|
|
|
23,623,894
|
(13)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated (deficiency) after cash distributions
|
|
|
786,146
|
|
|
|
5,638,677
|
|
|
|
22,575
|
|
|
|
(18,111,554
|
)
|
|
|
(23,623,894
|
)
|
Less: Special items (not including sales and refinancing)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated (deficiency) after cash distributions and special
items
|
|
$
|
786,146
|
|
|
$
|
5,638,677
|
|
|
$
|
22,575
|
|
|
$
|
(18,111,554
|
)
|
|
$
|
(23,623,894
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax and distribution data per $1,000 invested
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal income tax results:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operations
|
|
$
|
10.13
|
|
|
$
|
16.80
|
|
|
$
|
21.02
|
|
|
$
|
27.24
|
|
|
$
|
22.20
|
|
from recapture
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital gain (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash distributions to investors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Source (on a GAAP basis)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment income
|
|
|
26.40
|
|
|
|
25.00
|
|
|
|
30.00
|
|
|
|
26.00
|
|
|
|
21.90
|
|
Return of capital
|
|
|
36.46
|
|
|
|
37.00
|
|
|
|
36.00
|
|
|
|
41.00
|
|
|
|
40.50
|
|
Source (on a cash basis)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operations
|
|
|
62.86
|
|
|
|
62.00
|
|
|
|
66.00
|
|
|
|
58.01
|
|
|
|
50.99
|
|
Other(11)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8.99
|
|
|
|
11.41
|
|
Amount (in percentage terms) remaining invested in program
properties at the end of the last year reported in the table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100
|
%
|
Past performance is not necessarily indicative of future results.
A-7
TABLE
III
OPERATING
RESULTS OF PRIOR PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit Property Trust III, Inc.
|
|
|
|
October 2008
|
|
|
|
(Unaudited)
|
|
|
|
2008
|
|
|
2009
|
|
|
2010
|
|
|
Gross Revenues
|
|
$
|
3,621
|
|
|
$
|
23,503,760
|
|
|
$
|
144,833,874
|
|
Equity in income of unconsolidated joint venture
|
|
|
|
|
|
|
|
|
|
|
(206,200
|
)
|
Profit (loss) on sale of properties
|
|
|
|
|
|
|
|
|
|
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses(1)
|
|
|
104,769
|
|
|
|
23,312,360
|
|
|
|
85,592,289
|
|
Interest expense
|
|
|
|
|
|
|
2,538,176
|
|
|
|
26,311,592
|
|
Depreciation and amortization(2)
|
|
|
|
|
|
|
5,474,070
|
|
|
|
39,326,534
|
|
Net Loss including noncontrolling interest
|
|
|
(101,148
|
)
|
|
|
(7,820,846
|
)
|
|
|
(6,602,741
|
)
|
Net loss allocated to noncontrolling interest
|
|
|
|
|
|
|
|
|
|
|
(309,976
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss attributable to company GAAP Basis(6)
|
|
$
|
(101,148
|
)
|
|
$
|
(7,820,846
|
)
|
|
$
|
(6,292,765
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable income
|
|
|
|
|
|
|
|
|
|
|
|
|
from operations(4)
|
|
$
|
(101,148
|
)
|
|
$
|
(7,820,846
|
)
|
|
$
|
61,688,877
|
(7)
|
from gain on sale
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated
|
|
|
|
|
|
|
|
|
|
|
|
|
from operations
|
|
|
(27,507
|
)
|
|
|
74,038
|
|
|
|
35,792,000
|
|
from sales
|
|
|
|
|
|
|
|
|
|
|
|
|
from refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated from operations, sales and refinancing
|
|
|
(27,507
|
)
|
|
|
74,038
|
|
|
|
35,792,000
|
|
Less: Cash distributions to investors
|
|
|
|
|
|
|
|
|
|
|
|
|
from operating cash flow
|
|
|
|
|
|
|
74,038
|
|
|
|
35,792,000
|
|
from sales and refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
from other(11)
|
|
|
|
|
|
|
21,689,962
|
(14)
|
|
|
76,821,000
|
(15)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated (deficiency) after cash distributions
|
|
|
(27,507
|
)
|
|
|
(21,689,962
|
)
|
|
|
(76,821,000
|
)
|
Less: Special items (not including sales and refinancing)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated (deficiency) after cash distributions and special
items
|
|
$
|
(27,507
|
)
|
|
$
|
(21,689,962
|
)
|
|
$
|
(76,821,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax and distribution data per $1,000 invested
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal income tax results:
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
from operations
|
|
$
|
(505.74
|
)
|
|
$
|
(9.02
|
)
|
|
$
|
28.47
|
|
from recapture
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital gain (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash distributions to investors
|
|
|
|
|
|
|
|
|
|
|
|
|
Source (on a GAAP basis)
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment income
|
|
|
|
|
|
|
30.00
|
|
|
|
35.00
|
|
Return of capital
|
|
|
|
|
|
|
24.00
|
|
|
|
29.00
|
|
Source (on a cash basis)
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
Refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
Operations
|
|
|
|
|
|
|
0.18
|
|
|
|
20.34
|
|
Other(11)
|
|
|
|
|
|
|
53.82
|
|
|
|
43.66
|
|
Amount (in percentage terms) remaining invested in program
properties at the end of the last year reported in the table
|
|
|
|
|
|
|
|
|
|
|
100
|
%
|
Past performance is not necessarily indicative of future results.
A-8
TABLE
III
OPERATING
RESULTS OF PRIOR PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Walgreens Edgewood, NM
|
|
|
|
September 2004
|
|
|
|
(Unaudited)
|
|
|
|
2006
|
|
|
2007
|
|
|
2008
|
|
|
2009
|
|
|
2010
|
|
|
Gross Revenues
|
|
$
|
276,137
|
|
|
$
|
276,538
|
|
|
$
|
275,854
|
|
|
$
|
298,614
|
|
|
$
|
275,646
|
|
Profit (loss) on sale of properties
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses(1)
|
|
|
13,699
|
|
|
|
14,229
|
|
|
|
14,347
|
|
|
|
14,648
|
|
|
|
13,806
|
|
Interest expense
|
|
|
118,666
|
|
|
|
118,666
|
|
|
|
118,991
|
|
|
|
128,744
|
|
|
|
118,666
|
|
Depreciation and amortization(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (loss) Tax Basis(3)
|
|
$
|
143,772
|
|
|
$
|
143,643
|
|
|
$
|
142,516
|
|
|
$
|
155,222
|
|
|
$
|
143,174
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operations(4)
|
|
$
|
143,772
|
|
|
$
|
143,643
|
|
|
$
|
142,516
|
|
|
$
|
155,222
|
|
|
$
|
143,174
|
|
from gain on sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operations
|
|
|
143,772
|
|
|
|
143,643
|
|
|
|
142,516
|
|
|
|
155,222
|
|
|
|
143,174
|
|
from sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated from operations, sales and refinancing
|
|
|
143,772
|
|
|
|
143,643
|
|
|
|
142,516
|
|
|
|
155,222
|
|
|
|
143,174
|
|
Less: Cash distributions to investors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operating cash flow
|
|
|
144,072
|
|
|
|
144,072
|
|
|
|
144,072
|
|
|
|
144,070
|
|
|
|
144,070
|
|
from sales and refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated (deficiency) after cash distributions
|
|
|
(300
|
)
|
|
|
(429
|
)
|
|
|
(1,556
|
)
|
|
|
11,152
|
|
|
|
(896
|
)
|
Less: Special items (not including sales and refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated (deficiency) after cash distributions and special
items
|
|
$
|
(300
|
)
|
|
$
|
(429
|
)
|
|
$
|
(1,556
|
)
|
|
$
|
11,152
|
|
|
$
|
(896
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax and distribution data per $1,000 invested
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal income tax results:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operations
|
|
$
|
67.37
|
|
|
$
|
67.31
|
|
|
$
|
66.78
|
|
|
$
|
72.74
|
|
|
$
|
67.09
|
|
from recapture
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital gain (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash distributions to investors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Source (on a tax basis)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment income
|
|
|
67.51
|
|
|
|
67.51
|
|
|
|
67.51
|
|
|
|
67.51
|
|
|
|
67.51
|
|
Return of capital
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Source (on a cash basis)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operations
|
|
|
67.51
|
|
|
|
67.51
|
|
|
|
67.51
|
|
|
|
67.51
|
|
|
|
67.51
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount (in percentage terms) remaining invested in program
properties at the end of the last year reported in the table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100
|
%
|
Past performance is not necessarily indicative of future results.
A-9
TABLE
III
OPERATING
RESULTS OF PRIOR PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gander Mountain Hermantown, MN
|
|
|
|
September 2005
|
|
|
|
(Unaudited)
|
|
|
|
2006
|
|
|
2007
|
|
|
2008
|
|
|
2009
|
|
|
2010
|
|
|
Gross Revenues
|
|
$
|
885,140
|
|
|
$
|
1,063,286
|
|
|
$
|
896,361
|
|
|
$
|
901,115
|
|
|
$
|
916,365
|
|
Profit (loss) on sale of properties
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses(1)
|
|
|
26,926
|
|
|
|
171,824
|
|
|
|
34,853
|
|
|
|
31,397
|
|
|
|
31,838
|
|
Depreciation and amortization(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (loss) Tax Basis(3)
|
|
$
|
858,214
|
|
|
$
|
891,462
|
|
|
$
|
861,508
|
|
|
$
|
869,718
|
|
|
$
|
884,527
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operations(4)
|
|
$
|
858,214
|
|
|
$
|
891,462
|
|
|
$
|
861,508
|
|
|
$
|
869,718
|
|
|
$
|
884,527
|
|
from gain on sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operations
|
|
|
858,214
|
|
|
|
891,462
|
|
|
|
861,508
|
|
|
|
869,718
|
|
|
|
884,527
|
|
from sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated from operations, sales and refinancing
|
|
|
858,214
|
|
|
|
891,462
|
|
|
|
861,508
|
|
|
|
869,718
|
|
|
|
884,527
|
|
Less: Cash distributions to investors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operating cash flow
|
|
|
861,636
|
|
|
|
861,636
|
|
|
|
861,650
|
|
|
|
861,643
|
|
|
|
871,311
|
|
from sales and refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated (deficiency) after cash distributions
|
|
|
(3,422
|
)
|
|
|
29,826
|
|
|
|
(142
|
)
|
|
|
8,075
|
|
|
|
13,216
|
|
Less: Special items (not including sales and refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated (deficiency) after cash distributions and special
items
|
|
$
|
(3,422
|
)
|
|
$
|
29,826
|
|
|
$
|
(142
|
)
|
|
$
|
8,075
|
|
|
$
|
13,216
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax and distribution data per $1,000 invested
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal income tax results:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operations
|
|
$
|
73.21
|
|
|
$
|
76.04
|
|
|
$
|
73.49
|
|
|
$
|
74.19
|
|
|
$
|
75.45
|
|
from recapture
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital gain (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash distributions to investors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Source (on a tax basis)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment income
|
|
|
73.50
|
|
|
|
73.50
|
|
|
|
73.50
|
|
|
|
73.50
|
|
|
|
74.32
|
|
Return of capital
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Source (on a cash basis)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operations
|
|
|
73.50
|
|
|
|
73.50
|
|
|
|
73.50
|
|
|
|
73.50
|
|
|
|
74.32
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount (in percentage terms) remaining invested in program
properties at the end of the last year reported in the table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100
|
%
|
Past performance is not necessarily indicative of future results.
A-10
TABLE
III
OPERATING
RESULTS OF PRIOR PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Best Buy Baytown, TX
|
|
|
|
October 2005
|
|
|
|
(Unaudited)
|
|
|
|
2006
|
|
|
2007
|
|
|
2008
|
|
|
2009
|
|
|
2010
|
|
|
Gross Revenues
|
|
$
|
489,624
|
|
|
$
|
490,312
|
|
|
$
|
488,836
|
|
|
$
|
528,932
|
|
|
$
|
488,255
|
|
Profit (loss) on sale of properties
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses(1)
|
|
|
7,846
|
|
|
|
17,573
|
|
|
|
8,823
|
|
|
|
8,973
|
|
|
|
11,232
|
|
Interest Expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (loss) Tax Basis(3)
|
|
$
|
481,778
|
|
|
$
|
472,739
|
|
|
$
|
480,013
|
|
|
$
|
519,959
|
|
|
$
|
477,023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operations(4)
|
|
$
|
481,778
|
|
|
$
|
472,739
|
|
|
$
|
480,013
|
|
|
$
|
519,959
|
|
|
$
|
477,023
|
|
from gain on sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operations
|
|
|
481,778
|
|
|
|
472,739
|
|
|
|
480,013
|
|
|
|
519,959
|
|
|
|
477,023
|
|
from sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated from operations, sales and refinancing
|
|
|
481,778
|
|
|
|
472,739
|
|
|
|
480,013
|
|
|
|
519,959
|
|
|
|
477,023
|
|
Less: Cash distributions to investors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operating cash flow
|
|
|
445,785
|
|
|
|
478,572
|
|
|
|
478,573
|
|
|
|
478,574
|
|
|
|
478,574
|
|
from sales and refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated (deficiency) after cash distributions
|
|
|
35,993
|
|
|
|
(5,833
|
)
|
|
|
1,440
|
|
|
|
41,385
|
|
|
|
(1,551
|
)
|
Less: Special items (not including sales and refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated (deficiency) after cash distributions and special
items
|
|
$
|
35,993
|
|
|
$
|
(5,833
|
)
|
|
$
|
1,440
|
|
|
$
|
41,385
|
|
|
$
|
(1,551
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax and distribution data per $1,000 invested
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal income tax results:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operations
|
|
$
|
57.89
|
|
|
$
|
56.80
|
|
|
$
|
57.67
|
|
|
$
|
62.47
|
|
|
$
|
57.31
|
|
from recapture
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital gain (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash distributions to investors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Source (on a tax basis)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment income
|
|
|
53.56
|
|
|
|
57.50
|
|
|
|
57.50
|
|
|
|
57.50
|
|
|
|
57.50
|
|
Return of capital
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Source (on a cash basis)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operations
|
|
|
53.56
|
|
|
|
57.50
|
|
|
|
57.50
|
|
|
|
57.50
|
|
|
|
57.50
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount (in percentage terms) remaining invested in program
properties at the end of the last year reported in the table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100
|
%
|
Past performance is not necessarily indicative of future results.
A-11
TABLE
III
OPERATING
RESULTS OF PRIOR PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Walgreens Natchitoches, LA
|
|
|
|
November 2005
|
|
|
|
(Unaudited)
|
|
|
|
2006
|
|
|
2007
|
|
|
2008
|
|
|
2009
|
|
|
2010
|
|
|
Gross Revenues
|
|
$
|
242,647
|
|
|
$
|
255,718
|
|
|
$
|
255,356
|
|
|
$
|
255,068
|
|
|
$
|
255,068
|
|
Profit (loss) on sale of properties
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses(1)
|
|
|
10,747
|
|
|
|
9,056
|
|
|
|
9,097
|
|
|
|
8,546
|
|
|
|
8,995
|
|
Interest expense
|
|
|
116,328
|
|
|
|
130,858
|
|
|
|
131,217
|
|
|
|
130,858
|
|
|
|
130,858
|
|
Depreciation and amortization(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (loss) Tax Basis(3)
|
|
$
|
115,572
|
|
|
$
|
115,804
|
|
|
$
|
115,042
|
|
|
$
|
115,664
|
|
|
$
|
115,215
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operations(4)
|
|
$
|
115,572
|
|
|
$
|
115,804
|
|
|
$
|
115,042
|
|
|
$
|
115,664
|
|
|
$
|
115,215
|
|
from gain on sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operations
|
|
|
115,572
|
|
|
|
115,804
|
|
|
|
115,042
|
|
|
|
115,664
|
|
|
|
115,215
|
|
from sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated from operations, sales and refinancing
|
|
|
115,572
|
|
|
|
115,804
|
|
|
|
115,042
|
|
|
|
115,664
|
|
|
|
115,215
|
|
Less: Cash distributions to investors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operating cash flow
|
|
|
99,268
|
|
|
|
114,600
|
|
|
|
114,597
|
|
|
|
114,595
|
|
|
|
114,595
|
|
from sales and refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated (deficiency) after cash distributions
|
|
|
16,304
|
|
|
|
1,204
|
|
|
|
445
|
|
|
|
1,069
|
|
|
|
620
|
|
Less: Special items (not including sales and refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated (deficiency) after cash distributions and special
items
|
|
$
|
16,304
|
|
|
$
|
1,204
|
|
|
$
|
445
|
|
|
$
|
1,069
|
|
|
$
|
620
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax and distribution data per $1,000 invested
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal income tax results:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operations
|
|
$
|
65.55
|
|
|
$
|
65.69
|
|
|
$
|
65.25
|
|
|
$
|
65.61
|
|
|
$
|
65.35
|
|
from recapture
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital gain (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash distributions to investors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Source (on a tax basis)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment income
|
|
|
56.31
|
|
|
|
65.00
|
|
|
|
65.00
|
|
|
|
65.00
|
|
|
|
65.00
|
|
Return of capital
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Source (on a cash basis)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operations
|
|
|
56.31
|
|
|
|
65.00
|
|
|
|
65.00
|
|
|
|
65.00
|
|
|
|
65.00
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount (in percentage terms) remaining invested in program
properties at the end of the last year reported in the table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100
|
%
|
Past performance is not necessarily indicative of future results.
A-12
TABLE
III
OPERATING
RESULTS OF PRIOR PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kohls Lakewood, CO
|
|
|
|
November 2005
|
|
|
|
(Unaudited)
|
|
|
|
2006
|
|
|
2007
|
|
|
2008
|
|
|
2009
|
|
|
2010
|
|
|
Gross Revenues
|
|
$
|
1,009,577
|
|
|
$
|
1,064,348
|
|
|
$
|
1,150,875
|
|
|
$
|
972,785
|
|
|
$
|
1,061,191
|
|
Profit (loss) on sale of properties
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses(1)
|
|
|
27,941
|
|
|
|
23,997
|
|
|
|
26,791
|
|
|
|
22,020
|
|
|
|
22,223
|
|
Interest expense
|
|
|
524,194
|
|
|
|
586,904
|
|
|
|
588,512
|
|
|
|
586,904
|
|
|
|
586,904
|
|
Depreciation and amortization(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (loss) Tax Basis(3)
|
|
$
|
457,442
|
|
|
$
|
453,447
|
|
|
$
|
535,572
|
|
|
$
|
363,861
|
|
|
$
|
452,064
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operations(4)
|
|
$
|
457,442
|
|
|
$
|
453,447
|
|
|
$
|
535,572
|
|
|
$
|
363,861
|
|
|
$
|
452,064
|
|
from gain on sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operations
|
|
|
457,442
|
|
|
|
453,447
|
|
|
|
535,572
|
|
|
|
363,861
|
|
|
|
452,064
|
|
from sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated from operations, sales and refinancing
|
|
|
457,442
|
|
|
|
453,447
|
|
|
|
535,572
|
|
|
|
363,861
|
|
|
|
452,064
|
|
Less: Cash distributions to investors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operating cash flow
|
|
|
387,805
|
|
|
|
447,660
|
|
|
|
445,460
|
|
|
|
447,660
|
|
|
|
447,660
|
|
from sales and refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated (deficiency) after cash distributions
|
|
|
69,637
|
|
|
|
5,787
|
|
|
|
90,112
|
|
|
|
(83,799
|
)
|
|
|
4,404
|
|
Less: Special items (not including sales and refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated (deficiency) after cash distributions and special
items
|
|
$
|
69,637
|
|
|
$
|
5,787
|
|
|
$
|
90,112
|
|
|
$
|
(83,799
|
)
|
|
$
|
4,404
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax and distribution data per $1,000 invested
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal income tax results:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operations
|
|
$
|
61.31
|
|
|
$
|
60.78
|
|
|
$
|
71.78
|
|
|
$
|
48.77
|
|
|
$
|
60.59
|
|
from recapture
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital gain (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash distributions to investors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Source (on a tax basis)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment income
|
|
|
51.98
|
|
|
|
60.00
|
|
|
|
59.71
|
|
|
|
60.00
|
|
|
|
60.00
|
|
Return of capital
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Source (on a cash basis)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operations
|
|
|
51.98
|
|
|
|
60.00
|
|
|
|
59.71
|
|
|
|
60.00
|
|
|
|
60.00
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount (in percentage terms) remaining invested in program
properties at the end of the last year reported in the table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100
|
%
|
Past performance is not necessarily indicative of future results.
A-13
TABLE
III
OPERATING
RESULTS OF PRIOR PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Shoppes at North Village St. Joseph, MO
|
|
|
|
December 2005
|
|
|
|
(Unaudited)
|
|
|
|
2006
|
|
|
2007
|
|
|
2008
|
|
|
2009
|
|
|
2010
|
|
|
Gross Revenues
|
|
$
|
2,824,347
|
|
|
$
|
4,209,047
|
|
|
$
|
4,139,927
|
|
|
$
|
3,977,184
|
|
|
$
|
4,140,512
|
|
Profit (loss) on sale of properties
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses(1)
|
|
|
871,927
|
|
|
|
1,270,287
|
|
|
|
1,486,329
|
|
|
|
1,285,810
|
|
|
|
1,354,968
|
|
Interest expense
|
|
|
1,094,702
|
|
|
|
1,611,155
|
|
|
|
1,615,569
|
|
|
|
1,611,154
|
|
|
|
1,611,155
|
|
Depreciation and amortization(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (loss) Tax Basis(3)
|
|
$
|
857,718
|
|
|
$
|
1,327,605
|
|
|
$
|
1,038,029
|
|
|
$
|
1,080,220
|
|
|
$
|
1,174,389
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operations(4)
|
|
$
|
857,718
|
|
|
$
|
1,327,605
|
|
|
$
|
1,038,029
|
|
|
$
|
1,080,220
|
|
|
$
|
1,174,389
|
|
from gain on sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operations
|
|
|
857,718
|
|
|
|
1,327,605
|
|
|
|
1,038,029
|
|
|
|
1,080,220
|
|
|
|
1,174,389
|
|
from sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated from operations, sales and refinancing
|
|
|
857,718
|
|
|
|
1,327,605
|
|
|
|
1,038,029
|
|
|
|
1,080,220
|
|
|
|
1,174,389
|
|
Less: Cash distributions to investors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operating cash flow
|
|
|
808,917
|
|
|
|
1,246,236
|
|
|
|
1,176,954
|
|
|
|
846,026
|
|
|
|
910,836
|
|
from sales and refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated (deficiency) after cash distributions
|
|
|
48,801
|
|
|
|
81,369
|
|
|
|
(138,925
|
)
|
|
|
234,194
|
|
|
|
263,553
|
|
Less: Special items (not including sales and refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated (deficiency) after cash distributions and special
items
|
|
$
|
48,801
|
|
|
$
|
81,369
|
|
|
$
|
(138,925
|
)
|
|
$
|
234,194
|
|
|
$
|
263,553
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax and distribution data per $1,000 invested
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal income tax results:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operations
|
|
$
|
41.98
|
|
|
$
|
64.98
|
|
|
$
|
50.81
|
|
|
$
|
52.87
|
|
|
$
|
57.48
|
|
from recapture
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital gain (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash distributions to investors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Source (on a tax basis)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment income
|
|
|
39.59
|
|
|
|
61.00
|
|
|
|
57.18
|
|
|
|
41.84
|
|
|
|
45.01
|
|
Return of capital
|
|
|
|
|
|
|
|
|
|
|
0.43
|
|
|
|
|
|
|
|
|
|
Source (on a cash basis)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operations
|
|
|
39.59
|
|
|
|
61.00
|
|
|
|
57.18
|
|
|
|
41.84
|
|
|
|
45.01
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
0.43
|
|
|
|
|
|
|
|
|
|
Amount (in percentage terms) remaining invested in program
properties at the end of the last year reported in the table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100
|
%
|
Past performance is not necessarily indicative of future results.
A-14
TABLE
III
OPERATING
RESULTS OF PRIOR PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Walgreens Sumter, SC
|
|
|
|
January 2006
|
|
|
|
(Unaudited)
|
|
|
|
2006
|
|
|
2007
|
|
|
2008
|
|
|
2009
|
|
|
2010
|
|
|
Gross Revenues
|
|
$
|
314,624
|
|
|
$
|
325,980
|
|
|
$
|
325,445
|
|
|
$
|
325,085
|
|
|
$
|
325,085
|
|
Profit (loss) on sale of properties
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses(1)
|
|
|
14,066
|
|
|
|
13,354
|
|
|
|
13,830
|
|
|
|
12,921
|
|
|
|
12,704
|
|
Interest expense
|
|
|
158,325
|
|
|
|
171,598
|
|
|
|
172,138
|
|
|
|
171,668
|
|
|
|
171,668
|
|
Depreciation and amortization(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (loss) Tax Basis(3)
|
|
$
|
142,233
|
|
|
$
|
141,028
|
|
|
$
|
139,477
|
|
|
$
|
140,496
|
|
|
$
|
140,713
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operations(4)
|
|
$
|
142,233
|
|
|
$
|
141,028
|
|
|
$
|
139,477
|
|
|
$
|
140,496
|
|
|
$
|
140,713
|
|
from gain on sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operations
|
|
|
142,233
|
|
|
|
141,028
|
|
|
|
139,477
|
|
|
|
140,496
|
|
|
|
140,713
|
|
from sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated from operations, sales and refinancing
|
|
|
142,233
|
|
|
|
141,028
|
|
|
|
139,477
|
|
|
|
140,496
|
|
|
|
140,713
|
|
Less: Cash distributions to investors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operating cash flow
|
|
|
121,169
|
|
|
|
139,884
|
|
|
|
139,887
|
|
|
|
139,880
|
|
|
|
139,880
|
|
from sales and refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated (deficiency) after cash distributions
|
|
|
21,064
|
|
|
|
1,144
|
|
|
|
(410
|
)
|
|
|
616
|
|
|
|
833
|
|
Less: Special items (not including sales and refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated (deficiency) after cash distributions and special
items
|
|
$
|
21,064
|
|
|
$
|
1,144
|
|
|
$
|
(410
|
)
|
|
$
|
616
|
|
|
$
|
833
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax and distribution data per $1,000 invested
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal income tax results:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operations
|
|
$
|
66.09
|
|
|
$
|
65.53
|
|
|
$
|
64.81
|
|
|
$
|
65.29
|
|
|
$
|
65.39
|
|
from recapture
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital gain (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash distributions to investors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Source (on a tax basis)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment income
|
|
|
56.31
|
|
|
|
65.00
|
|
|
|
65.00
|
|
|
|
65.00
|
|
|
|
65.00
|
|
Return of capital
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Source (on a cash basis)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operations
|
|
|
56.31
|
|
|
|
65.00
|
|
|
|
65.00
|
|
|
|
65.00
|
|
|
|
65.00
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount (in percentage terms) remaining invested in program
properties at the end of the last year reported in the table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100
|
%
|
Past performance is not necessarily indicative of future results.
A-15
TABLE
III
OPERATING
RESULTS OF PRIOR PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kohls St. Joseph, MO
|
|
|
|
February 2006
|
|
|
|
(Unaudited)
|
|
|
|
2006
|
|
|
2007
|
|
|
2008
|
|
|
2009
|
|
|
2010
|
|
|
Gross Revenues
|
|
$
|
564,619
|
|
|
$
|
710,939
|
|
|
$
|
801,046
|
|
|
$
|
694,012
|
|
|
$
|
728,238
|
|
Profit (loss) on sale of properties
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses(1)
|
|
|
159,442
|
|
|
|
179,656
|
|
|
|
170,276
|
|
|
|
162,445
|
|
|
|
148,858
|
|
Interest expense
|
|
|
190,758
|
|
|
|
325,358
|
|
|
|
326,249
|
|
|
|
325,358
|
|
|
|
325,358
|
|
Depreciation and amortization(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (loss) Tax Basis(3)
|
|
$
|
214,419
|
|
|
$
|
205,925
|
|
|
$
|
304,521
|
|
|
$
|
206,209
|
|
|
$
|
254,022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operations(4)
|
|
$
|
214,419
|
|
|
$
|
205,925
|
|
|
$
|
304,521
|
|
|
$
|
206,209
|
|
|
$
|
254,022
|
|
from gain on sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operations
|
|
|
214,419
|
|
|
|
205,925
|
|
|
|
304,521
|
|
|
|
206,209
|
|
|
|
254,022
|
|
from sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated from operations, sales and refinancing
|
|
|
214,419
|
|
|
|
205,925
|
|
|
|
304,521
|
|
|
|
206,209
|
|
|
|
254,022
|
|
Less: Cash distributions to investors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operating cash flow
|
|
|
132,308
|
|
|
|
247,020
|
|
|
|
247,020
|
|
|
|
247,020
|
|
|
|
247,020
|
|
from sales and refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated (deficiency) after cash distributions
|
|
|
82,111
|
|
|
|
(41,095
|
)
|
|
|
57,501
|
|
|
|
(40,811
|
)
|
|
|
7,002
|
|
Less: Special items (not including sales and refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated (deficiency) after cash distributions and special
items
|
|
$
|
82,111
|
|
|
$
|
(41,095
|
)
|
|
$
|
57,501
|
|
|
$
|
(40,811
|
)
|
|
$
|
7,002
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax and distribution data per $1,000 invested
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal income tax results:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operations
|
|
$
|
52.08
|
|
|
$
|
50.02
|
|
|
$
|
73.97
|
|
|
$
|
50.09
|
|
|
$
|
61.70
|
|
from recapture
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital gain (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash distributions to investors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Source (on a tax basis)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment income
|
|
|
32.14
|
|
|
|
60.00
|
|
|
|
60.00
|
|
|
|
60.00
|
|
|
|
60.00
|
|
Return of capital
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Source (on a cash basis)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operations
|
|
|
32.14
|
|
|
|
60.00
|
|
|
|
60.00
|
|
|
|
60.00
|
|
|
|
60.00
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount (in percentage terms) remaining invested in program
properties at the end of the last year reported in the table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100
|
%
|
Past performance is not necessarily indicative of future results.
A-16
TABLE
III
OPERATING
RESULTS OF PRIOR PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Home Depot Bellingham, WA
|
|
|
|
April 2006
|
|
|
|
(Unaudited)
|
|
|
|
2006
|
|
|
2007
|
|
|
2008
|
|
|
2009
|
|
|
2010
|
|
|
Gross Revenues
|
|
$
|
608,739
|
|
|
$
|
1,571,778
|
|
|
$
|
1,572,745
|
|
|
$
|
1,568,675
|
|
|
$
|
1,698,802
|
|
Profit (loss) on sale of properties
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses(1)
|
|
|
14,676
|
|
|
|
54,775
|
|
|
|
60,817
|
|
|
|
59,764
|
|
|
|
61,629
|
|
Depreciation and amortization(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (loss) Tax Basis(3)
|
|
$
|
594,063
|
|
|
$
|
1,517,003
|
|
|
$
|
1,511,928
|
|
|
$
|
1,508,911
|
|
|
$
|
1,637,173
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operations(4)
|
|
$
|
594,063
|
|
|
$
|
1,517,003
|
|
|
$
|
1,511,928
|
|
|
$
|
1,508,911
|
|
|
$
|
1,637,173
|
|
from gain on sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operations
|
|
|
594,063
|
|
|
|
1,517,003
|
|
|
|
1,511,928
|
|
|
|
1,508,911
|
|
|
|
1,637,173
|
|
from sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated from operations, sales and refinancing
|
|
|
594,063
|
|
|
|
1,517,003
|
|
|
|
1,511,928
|
|
|
|
1,508,911
|
|
|
|
1,637,173
|
|
Less: Cash distributions to investors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operating cash flow
|
|
|
463,771
|
|
|
|
1,494,708
|
|
|
|
1,494,264
|
|
|
|
1,494,715
|
|
|
|
1,494,715
|
|
from sales and refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated (deficiency) after cash distributions
|
|
|
130,292
|
|
|
|
22,295
|
|
|
|
17,664
|
|
|
|
14,196
|
|
|
|
142,458
|
|
Less: Special items (not including sales and refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated (deficiency) after cash distributions and special
items
|
|
$
|
130,292
|
|
|
$
|
22,295
|
|
|
$
|
17,664
|
|
|
$
|
14,196
|
|
|
$
|
142,458
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax and distribution data per $1,000 invested
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal income tax results:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operations
|
|
$
|
24.05
|
|
|
$
|
61.40
|
|
|
$
|
61.20
|
|
|
$
|
61.07
|
|
|
$
|
66.27
|
|
from recapture
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital gain (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash distributions to investors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Source (on a tax basis)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment income
|
|
|
18.77
|
|
|
|
60.50
|
|
|
|
60.48
|
|
|
|
60.50
|
|
|
|
60.50
|
|
Return of capital
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Source (on a cash basis)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operations
|
|
|
18.77
|
|
|
|
60.50
|
|
|
|
60.48
|
|
|
|
60.50
|
|
|
|
60.50
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount (in percentage terms) remaining invested in program
properties at the end of the last year reported in the table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100
|
%
|
Past performance is not necessarily indicative of future results.
A-17
TABLE
III
OPERATING
RESULTS OF PRIOR PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Net Lease Portfolio I
|
|
|
|
May 2006
|
|
|
|
(Unaudited)
|
|
|
|
2006
|
|
|
2007
|
|
|
2008
|
|
|
2009
|
|
|
2010
|
|
|
Gross Revenues
|
|
$
|
583,357
|
|
|
$
|
1,429,279
|
|
|
$
|
1,426,846
|
|
|
$
|
1,424,945
|
|
|
$
|
1,425,015
|
|
Profit (loss) on sale of properties
|
|
|
|
|
|
|
|
|
|
|
15,000
|
|
|
|
|
|
|
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses(1)
|
|
|
26,130
|
|
|
|
36,148
|
|
|
|
49,261
|
|
|
|
45,508
|
|
|
|
38,796
|
|
Interest expense
|
|
|
265,912
|
|
|
|
752,356
|
|
|
|
754,449
|
|
|
|
752,387
|
|
|
|
752,387
|
|
Depreciation and amortization(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (loss) Tax Basis(3)
|
|
$
|
291,315
|
|
|
$
|
640,775
|
|
|
$
|
638,136
|
|
|
$
|
627,050
|
|
|
$
|
633,832
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operations(4)
|
|
$
|
291,315
|
|
|
$
|
640,775
|
|
|
$
|
623,136
|
|
|
$
|
627,050
|
|
|
$
|
633,832
|
|
from gain on sale
|
|
|
|
|
|
|
|
|
|
|
15,000
|
|
|
|
|
|
|
|
|
|
Cash generated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operations
|
|
|
291,315
|
|
|
|
640,775
|
|
|
|
623,136
|
|
|
|
627,050
|
|
|
|
633,832
|
|
from sales
|
|
|
|
|
|
|
|
|
|
|
15,000
|
|
|
|
|
|
|
|
|
|
from refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated from operations, sales and refinancing
|
|
|
291,315
|
|
|
|
640,775
|
|
|
|
638,136
|
|
|
|
627,050
|
|
|
|
633,832
|
|
Less: Cash distributions to investors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operating cash flow
|
|
|
203,698
|
|
|
|
623,484
|
|
|
|
623,482
|
|
|
|
623,480
|
|
|
|
623,481
|
|
from sales and refinancing
|
|
|
|
|
|
|
|
|
|
|
15,000
|
|
|
|
|
|
|
|
|
|
from other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated (deficiency) after cash distributions
|
|
|
87,617
|
|
|
|
17,291
|
|
|
|
(346
|
)
|
|
|
3,570
|
|
|
|
10,351
|
|
Less: Special items (not including sales and refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated (deficiency) after cash distributions and special
items
|
|
$
|
87,617
|
|
|
$
|
17,291
|
|
|
$
|
(346
|
)
|
|
$
|
3,570
|
|
|
$
|
10,351
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax and distribution data per $1,000 invested
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal income tax results:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operations
|
|
$
|
30.37
|
|
|
$
|
66.80
|
|
|
$
|
64.96
|
|
|
$
|
65.37
|
|
|
$
|
66.08
|
|
from recapture
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital gain (loss)
|
|
|
|
|
|
|
|
|
|
|
1.56
|
|
|
|
|
|
|
|
|
|
Cash distributions to investors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Source (on a tax basis)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment income
|
|
|
21.24
|
|
|
|
65.00
|
|
|
|
65.00
|
|
|
|
65.00
|
|
|
|
65.00
|
|
Return of capital
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Source (on a cash basis)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
|
|
|
|
|
|
|
|
|
1.56
|
|
|
|
|
|
|
|
|
|
Refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operations
|
|
|
21.24
|
|
|
|
65.00
|
|
|
|
63.44
|
|
|
|
65.00
|
|
|
|
65.00
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount (in percentage terms) remaining invested in program
properties at the end of the last year reported in the table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100
|
%
|
Past performance is not necessarily indicative of future results.
A-18
TABLE
III
OPERATING
RESULTS OF PRIOR PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Net Lease Portfolio II
|
|
|
|
June 2006
|
|
|
|
(Unaudited)
|
|
|
|
2006
|
|
|
2007
|
|
|
2008
|
|
|
2009
|
|
|
2010
|
|
|
Gross Revenues
|
|
$
|
313,447
|
|
|
$
|
1,539,612
|
|
|
$
|
1,579,494
|
|
|
$
|
1,529,434
|
|
|
$
|
1,528,068
|
|
Profit (loss) on sale of properties
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses(1)
|
|
|
4,849
|
|
|
|
64,435
|
|
|
|
75,030
|
|
|
|
71,118
|
|
|
|
69,062
|
|
Interest expense
|
|
|
133,317
|
|
|
|
797,719
|
|
|
|
799,905
|
|
|
|
797,719
|
|
|
|
797,719
|
|
Depreciation and amortization(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (loss) Tax Basis(3)
|
|
$
|
175,281
|
|
|
$
|
677,458
|
|
|
$
|
704,559
|
|
|
$
|
660,597
|
|
|
$
|
661,287
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operations(4)
|
|
$
|
175,281
|
|
|
$
|
677,458
|
|
|
$
|
704,559
|
|
|
$
|
660,597
|
|
|
$
|
661,287
|
|
from gain on sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operations
|
|
|
175,281
|
|
|
|
677,458
|
|
|
|
704,559
|
|
|
|
660,597
|
|
|
|
661,287
|
|
from sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated from operations, sales and refinancing
|
|
|
175,281
|
|
|
|
677,458
|
|
|
|
704,559
|
|
|
|
660,597
|
|
|
|
661,287
|
|
Less: Cash distributions to investors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operating cash flow
|
|
|
77,402
|
|
|
|
650,712
|
|
|
|
650,718
|
|
|
|
650,710
|
|
|
|
650,710
|
|
from sales and refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated (deficiency) after cash distributions
|
|
|
97,879
|
|
|
|
26,746
|
|
|
|
53,841
|
|
|
|
9,887
|
|
|
|
10,577
|
|
Less: Special items (not including sales and refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated (deficiency) after cash distributions and special
items
|
|
$
|
97,879
|
|
|
$
|
26,746
|
|
|
$
|
53,841
|
|
|
$
|
9,887
|
|
|
$
|
10,577
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax and distribution data per $1,000 invested
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal income tax results:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operations
|
|
$
|
17.51
|
|
|
$
|
67.67
|
|
|
$
|
70.38
|
|
|
$
|
65.99
|
|
|
$
|
66.06
|
|
from recapture
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital gain (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash distributions to investors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Source (on a tax basis)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment income
|
|
|
7.73
|
|
|
|
65.00
|
|
|
|
65.00
|
|
|
|
65.00
|
|
|
|
65.00
|
|
Return of capital
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Source (on a cash basis)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operations
|
|
|
7.73
|
|
|
|
65.00
|
|
|
|
65.00
|
|
|
|
65.00
|
|
|
|
65.00
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount (in percentage terms) remaining invested in program
properties at the end of the last year reported in the table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100
|
%
|
Past performance is not necessarily indicative of future results.
A-19
TABLE
III
OPERATING
RESULTS OF PRIOR PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Barrywoods Crossing Kansas City, MO
|
|
|
|
July 2006
|
|
|
|
(Unaudited)
|
|
|
|
2006
|
|
|
2007
|
|
|
2008
|
|
|
2009
|
|
|
2010
|
|
|
Gross Revenues
|
|
$
|
969,929
|
|
|
$
|
3,887,472
|
|
|
$
|
4,145,429
|
|
|
$
|
3,894,998
|
|
|
$
|
4,516,114
|
|
Profit (loss) on sale of properties
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses(1)
|
|
|
642,129
|
|
|
|
1,261,696
|
|
|
|
1,391,359
|
|
|
|
1,333,093
|
|
|
|
1,437,777
|
|
Interest expense
|
|
|
126,766
|
|
|
|
1,521,195
|
|
|
|
1,546,548
|
|
|
|
1,542,323
|
|
|
|
1,542,323
|
|
Depreciation and amortization(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (loss) Tax Basis(3)
|
|
$
|
201,034
|
|
|
$
|
1,104,581
|
|
|
$
|
1,207,522
|
|
|
$
|
1,019,582
|
|
|
$
|
1,536,014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operations(4)
|
|
$
|
201,034
|
|
|
$
|
1,104,581
|
|
|
$
|
1,207,522
|
|
|
$
|
1,019,582
|
|
|
$
|
1,536,014
|
|
from gain on sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operations
|
|
|
201,034
|
|
|
|
1,104,581
|
|
|
|
1,207,522
|
|
|
|
1,019,582
|
|
|
|
1,536,014
|
|
from sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated from operations, sales and refinancing
|
|
|
201,034
|
|
|
|
1,104,581
|
|
|
|
1,207,522
|
|
|
|
1,019,582
|
|
|
|
1,536,014
|
|
Less: Cash distributions to investors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operating cash flow
|
|
|
|
|
|
|
1,486,685
|
|
|
|
1,198,964
|
|
|
|
893,615
|
|
|
|
1,007,503
|
|
from sales and refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated (deficiency) after cash distributions
|
|
|
201,034
|
|
|
|
(382,104
|
)
|
|
|
8,558
|
|
|
|
125,967
|
|
|
|
528,511
|
|
Less: Special items (not including sales and refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated (deficiency) after cash distributions and special
items
|
|
$
|
201,034
|
|
|
$
|
(382,104
|
)
|
|
$
|
8,558
|
|
|
$
|
125,967
|
|
|
$
|
528,511
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax and distribution data per $1,000 invested
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal income tax results:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operations
|
|
$
|
9.85
|
|
|
$
|
54.15
|
|
|
$
|
59.19
|
|
|
$
|
49.98
|
|
|
$
|
75.29
|
|
from recapture
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital gain (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash distributions to investors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Source (on a tax basis)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment income
|
|
|
|
|
|
|
64.00
|
|
|
|
50.31
|
|
|
|
41.52
|
|
|
|
49.39
|
|
Return of capital
|
|
|
|
|
|
|
8.88
|
|
|
|
8.46
|
|
|
|
2.28
|
|
|
|
|
|
Source (on a cash basis)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operations
|
|
|
|
|
|
|
64.00
|
|
|
|
50.31
|
|
|
|
41.52
|
|
|
|
49.39
|
|
Other
|
|
|
|
|
|
|
8.88
|
|
|
|
8.46
|
|
|
|
2.28
|
|
|
|
|
|
Amount (in percentage terms) remaining invested in program
properties at the end of the last year reported in the table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100
|
%
|
Past performance is not necessarily indicative of future results.
A-20
TABLE
III
OPERATING
RESULTS OF PRIOR PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Net Lease Portfolio III
|
|
|
|
December 2006
|
|
|
|
(Unaudited)
|
|
|
|
2006
|
|
|
2007
|
|
|
2008
|
|
|
2009
|
|
|
2010
|
|
|
Gross Revenues
|
|
$
|
|
|
|
$
|
2,447,247
|
|
|
$
|
2,416,921
|
|
|
$
|
2,413,694
|
|
|
$
|
2,413,690
|
|
Profit (loss) on sale of properties
|
|
|
|
|
|
|
|
|
|
|
13,766
|
|
|
|
|
|
|
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses(1)
|
|
|
|
|
|
|
119,032
|
|
|
|
109,158
|
|
|
|
107,334
|
|
|
|
105,115
|
|
Interest expense
|
|
|
|
|
|
|
1,241,384
|
|
|
|
1,305,593
|
|
|
|
1,302,026
|
|
|
|
1,302,026
|
|
Depreciation and amortization(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (loss) Tax Basis(3)
|
|
$
|
|
|
|
$
|
1,086,831
|
|
|
$
|
1,015,936
|
|
|
$
|
1,004,334
|
|
|
$
|
1,006,549
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operations(4)
|
|
$
|
|
|
|
$
|
1,086,831
|
|
|
$
|
1,002,170
|
|
|
$
|
1,004,334
|
|
|
$
|
1,006,549
|
|
from gain on sale
|
|
|
|
|
|
|
|
|
|
|
13,766
|
|
|
|
|
|
|
|
|
|
Cash generated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operations
|
|
|
|
|
|
|
1,086,831
|
|
|
|
1,002,170
|
|
|
|
1,004,334
|
|
|
|
1,006,549
|
|
from sales
|
|
|
|
|
|
|
|
|
|
|
21,115
|
|
|
|
|
|
|
|
|
|
from refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated from operations, sales and refinancing
|
|
|
|
|
|
|
1,086,831
|
|
|
|
1,023,285
|
|
|
|
1,004,334
|
|
|
|
1,006,549
|
|
Less: Cash distributions to investors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operating cash flow
|
|
|
|
|
|
|
1,004,184
|
|
|
|
1,004,185
|
|
|
|
1,004,184
|
|
|
|
1,004,184
|
|
from sales and refinancing
|
|
|
|
|
|
|
|
|
|
|
13,766
|
|
|
|
|
|
|
|
|
|
from other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated (deficiency) after cash distributions
|
|
|
|
|
|
|
82,647
|
|
|
|
5,334
|
|
|
|
150
|
|
|
|
2,365
|
|
Less: Special items (not including sales and refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated (deficiency) after cash distributions and special
items
|
|
$
|
|
|
|
$
|
82,647
|
|
|
$
|
5,334
|
|
|
$
|
150
|
|
|
$
|
2,365
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax and distribution data per $1,000 invested
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal income tax results:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operations
|
|
$
|
|
|
|
$
|
70.35
|
|
|
$
|
64.87
|
|
|
$
|
65.01
|
|
|
$
|
65.15
|
|
from recapture
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital gain (loss)
|
|
|
|
|
|
|
|
|
|
|
0.89
|
|
|
|
|
|
|
|
|
|
Cash distributions to investors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Source (on a tax basis)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment income
|
|
|
|
|
|
|
65.00
|
|
|
|
65.00
|
|
|
|
65.00
|
|
|
|
65.00
|
|
Return of capital
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Source (on a cash basis)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
|
|
|
|
|
|
|
|
|
0.89
|
|
|
|
|
|
|
|
|
|
Refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operations
|
|
|
|
|
|
|
65.00
|
|
|
|
64.11
|
|
|
|
65.00
|
|
|
|
65.00
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount (in percentage terms) remaining invested in program
properties at the end of the last year reported in the table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100
|
%
|
Past performance is not necessarily indicative of future results.
A-21
TABLE
III
OPERATING
RESULTS OF PRIOR PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Centerpointe Shopping Center Woodridge, IL
|
|
|
|
May 2007
|
|
|
|
(Unaudited)
|
|
|
|
2007
|
|
|
2008
|
|
|
2009
|
|
|
2010
|
|
|
Gross Revenues
|
|
$
|
2,632,042
|
|
|
$
|
4,241,709
|
|
|
$
|
4,267,839
|
|
|
$
|
4,178,527
|
|
Profit (loss) on sale of properties
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses(1)
|
|
|
643,478
|
|
|
|
1,525,240
|
|
|
|
1,393,905
|
|
|
|
1,274,911
|
|
Interest expense
|
|
|
837,535
|
|
|
|
1,525,064
|
|
|
|
1,520,897
|
|
|
|
1,520,897
|
|
Depreciation and amortization(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (loss) Tax Basis(3)
|
|
$
|
1,151,029
|
|
|
$
|
1,191,405
|
|
|
$
|
1,353,037
|
|
|
$
|
1,382,719
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operations(4)
|
|
$
|
1,151,029
|
|
|
$
|
1,191,405
|
|
|
$
|
1,353,037
|
|
|
$
|
1,382,719
|
|
from gain on sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operations
|
|
|
1,151,029
|
|
|
|
1,191,405
|
|
|
|
1,353,037
|
|
|
|
1,382,719
|
|
from sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated from operations, sales and refinancing
|
|
|
1,151,029
|
|
|
|
1,191,405
|
|
|
|
1,353,037
|
|
|
|
1,382,719
|
|
Less: Cash distributions to investors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operating cash flow
|
|
|
807,647
|
|
|
|
1,334,400
|
|
|
|
1,334,400
|
|
|
|
1,225,408
|
|
from sales and refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated (deficiency) after cash distributions
|
|
|
343,382
|
|
|
|
(142,995
|
)
|
|
|
18,637
|
|
|
|
157,311
|
|
Less: Special items (not including sales and refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated (deficiency) after cash distributions and special
items
|
|
$
|
343,382
|
|
|
$
|
(142,995
|
)
|
|
$
|
18,637
|
|
|
$
|
157,311
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax and distribution data per $1,000 invested
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal income tax results:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operations
|
|
$
|
52.08
|
|
|
$
|
53.91
|
|
|
$
|
61.22
|
|
|
$
|
62.57
|
|
from recapture
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital gain (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash distributions to investors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Source (on a tax basis)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment income
|
|
|
36.55
|
|
|
|
60.38
|
|
|
|
60.38
|
|
|
|
55.45
|
|
Return of capital
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Source (on a cash basis)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operations
|
|
|
36.55
|
|
|
|
60.38
|
|
|
|
60.38
|
|
|
|
55.45
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount (in percentage terms) remaining invested in program
properties at the end of the last year reported in the table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100
|
%
|
Past performance is not necessarily indicative of future results.
A-22
TABLE
III
OPERATING
RESULTS OF PRIOR PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Net Lease Portfolio IV
|
|
|
|
May 2007
|
|
|
|
(Unaudited)
|
|
|
|
2007
|
|
|
2008
|
|
|
2009
|
|
|
2010
|
|
|
Gross Revenues
|
|
$
|
533,742
|
|
|
$
|
904,933
|
|
|
$
|
890,068
|
|
|
$
|
898,522
|
|
Profit (loss) on sale of properties
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses(1)
|
|
|
57,576
|
|
|
|
150,569
|
|
|
|
136,884
|
|
|
|
150,707
|
|
Interest expense
|
|
|
217,699
|
|
|
|
368,879
|
|
|
|
367,871
|
|
|
|
367,871
|
|
Depreciation and amortization(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (loss) Tax Basis(3)
|
|
$
|
258,467
|
|
|
$
|
385,485
|
|
|
$
|
385,313
|
|
|
$
|
379,944
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operations(4)
|
|
$
|
258,467
|
|
|
$
|
385,485
|
|
|
$
|
385,313
|
|
|
$
|
379,944
|
|
from gain on sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operations
|
|
|
258,467
|
|
|
|
385,485
|
|
|
|
385,313
|
|
|
|
379,944
|
|
from sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated from operations, sales and refinancing
|
|
|
258,467
|
|
|
|
385,485
|
|
|
|
385,313
|
|
|
|
379,944
|
|
Less: Cash distributions to investors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operating cash flow
|
|
|
232,801
|
|
|
|
360,185
|
|
|
|
360,180
|
|
|
|
370,085
|
|
from sales and refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated (deficiency) after cash distributions
|
|
|
25,666
|
|
|
|
25,300
|
|
|
|
25,133
|
|
|
|
9,859
|
|
Less: Special items (not including sales and refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated (deficiency) after cash distributions and special
items
|
|
$
|
25,666
|
|
|
$
|
25,300
|
|
|
$
|
25,133
|
|
|
$
|
9,859
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax and distribution data per $1,000 invested
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal income tax results:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operations
|
|
$
|
43.06
|
|
|
$
|
64.22
|
|
|
$
|
64.19
|
|
|
$
|
63.29
|
|
from recapture
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital gain (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash distributions to investors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Source (on a tax basis)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment income
|
|
|
38.78
|
|
|
|
60.00
|
|
|
|
60.00
|
|
|
|
61.65
|
|
Return of capital
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Source (on a cash basis)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operations
|
|
|
38.78
|
|
|
|
60.00
|
|
|
|
60.00
|
|
|
|
61.65
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount (in percentage terms) remaining invested in program
properties at the end of the last year reported in the table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100
|
%
|
Past performance is not necessarily indicative of future results.
A-23
TABLE
III
OPERATING
RESULTS OF PRIOR PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Net Lease Portfolio V
|
|
|
|
June 2007
|
|
|
|
(Unaudited)
|
|
|
|
2007
|
|
|
2008
|
|
|
2009
|
|
|
2010
|
|
|
Gross Revenues
|
|
$
|
1,216,587
|
|
|
$
|
2,873,638
|
|
|
$
|
3,074,756
|
|
|
$
|
2,870,184
|
|
Profit (loss) on sale of properties
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses(1)
|
|
|
33,570
|
|
|
|
109,101
|
|
|
|
104,964
|
|
|
|
104,694
|
|
Interest expense
|
|
|
444,412
|
|
|
|
1,378,431
|
|
|
|
1,374,664
|
|
|
|
1,374,664
|
|
Depreciation and amortization(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (loss) Tax Basis(3)
|
|
$
|
738,605
|
|
|
$
|
1,386,106
|
|
|
$
|
1,595,128
|
|
|
$
|
1,390,826
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operations(4)
|
|
$
|
738,605
|
|
|
$
|
1,386,106
|
|
|
$
|
1,595,128
|
|
|
$
|
1,390,826
|
|
from gain on sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operations
|
|
|
738,605
|
|
|
|
1,386,106
|
|
|
|
1,595,128
|
|
|
|
1,390,826
|
|
from sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated from operations, sales and refinancing
|
|
|
738,605
|
|
|
|
1,386,106
|
|
|
|
1,595,128
|
|
|
|
1,390,826
|
|
Less: Cash distributions to investors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operating cash flow
|
|
|
550,545
|
|
|
|
1,449,144
|
|
|
|
1,449,147
|
|
|
|
1,501,499
|
|
from sales and refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated (deficiency) after cash distributions
|
|
|
188,060
|
|
|
|
(63,038
|
)
|
|
|
145,981
|
|
|
|
(110,673
|
)
|
Less: Special items (not including sales and refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated (deficiency) after cash distributions and special
items
|
|
$
|
188,060
|
|
|
$
|
(63,038
|
)
|
|
$
|
145,981
|
|
|
$
|
(110,673
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax and distribution data per $1,000 invested
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal income tax results:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operations
|
|
$
|
33.64
|
|
|
$
|
63.13
|
|
|
$
|
72.65
|
|
|
$
|
63.34
|
|
from recapture
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital gain (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash distributions to investors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Source (on a tax basis)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment income
|
|
|
25.07
|
|
|
|
66.00
|
|
|
|
66.00
|
|
|
|
68.38
|
|
Return of capital
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Source (on a cash basis)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operations
|
|
|
25.07
|
|
|
|
66.00
|
|
|
|
66.00
|
|
|
|
68.38
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount (in percentage terms) remaining invested in program
properties at the end of the last year reported in the table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100
|
%
|
Past performance is not necessarily indicative of future results.
A-24
TABLE
III
OPERATING
RESULTS OF PRIOR PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Net Lease Portfolio VI
|
|
|
|
September 2007
|
|
|
|
(Unaudited)
|
|
|
|
2007
|
|
|
2008
|
|
|
2009
|
|
|
2010
|
|
|
Gross Revenues
|
|
$
|
598,105
|
|
|
$
|
3,551,029
|
|
|
$
|
3,497,557
|
|
|
$
|
3,491,178
|
|
Profit (loss) on sale of properties
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses(1)
|
|
|
45,111
|
|
|
|
229,233
|
|
|
|
212,360
|
|
|
|
203,081
|
|
Interest expense
|
|
|
144,049
|
|
|
|
1,700,718
|
|
|
|
1,696,068
|
|
|
|
1,696,069
|
|
Depreciation and amortization(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (loss) Tax Basis(3)
|
|
$
|
408,945
|
|
|
$
|
1,621,078
|
|
|
$
|
1,589,129
|
|
|
$
|
1,592,028
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operations(4)
|
|
$
|
408,945
|
|
|
$
|
1,621,078
|
|
|
$
|
1,589,129
|
|
|
$
|
1,592,028
|
|
from gain on sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operations
|
|
|
408,945
|
|
|
|
1,621,078
|
|
|
|
1,589,129
|
|
|
|
1,592,028
|
|
from sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated from operations, sales and refinancing
|
|
|
408,945
|
|
|
|
1,621,078
|
|
|
|
1,589,129
|
|
|
|
1,592,028
|
|
Less: Cash distributions to investors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operating cash flow
|
|
|
269,301
|
|
|
|
1,589,676
|
|
|
|
1,589,678
|
|
|
|
1,589,678
|
|
from sales and refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated (deficiency) after cash distributions
|
|
|
139,644
|
|
|
|
31,402
|
|
|
|
(549
|
)
|
|
|
2,350
|
|
Less: Special items (not including sales and refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated (deficiency) after cash distributions and special
items
|
|
$
|
139,644
|
|
|
$
|
31,402
|
|
|
$
|
(549
|
)
|
|
$
|
2,350
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax and distribution data per $1,000 invested
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal income tax results:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operations
|
|
$
|
17.58
|
|
|
$
|
63.22
|
|
|
$
|
61.98
|
|
|
$
|
62.09
|
|
from recapture
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital gain (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash distributions to investors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Source (on a tax basis)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment income
|
|
|
11.57
|
|
|
|
62.00
|
|
|
|
62.00
|
|
|
|
62.00
|
|
Return of capital
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Source (on a cash basis)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operations
|
|
|
11.57
|
|
|
|
62.00
|
|
|
|
62.00
|
|
|
|
62.00
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount (in percentage terms) remaining invested in program
properties at the end of the last year reported in the table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100
|
%
|
Past performance is not necessarily indicative of future results.
A-25
TABLE
III
OPERATING
RESULTS OF PRIOR PROGRAMS
(UNAUDITED) (Continued)
|
|
|
(1)
|
|
Operating expenses include management fees paid to affiliates
for such services as accounting, property supervision, etc.
|
|
(2)
|
|
Amortization of organizational costs is computed over a period
of 60 months. Depreciation of commercial real property is
determined on the straight-line method over an estimated useful
life of 40 years. Leasehold interests are amortized over
the life of the lease.
|
|
(3)
|
|
The respective program maintains its books on a tax basis of
accounting rather than a GAAP basis. There are several potential
differences in tax and GAAP basis, including, among others;
(a) tax basis accounting does not take certain income or
expense accruals into consideration at the end of each fiscal
year, (b) rental income is recorded on a tax basis, as it
is received where it is accrued on a straight-line basis over
the life of the lease for GAAP, and (c) all properties are
recorded at cost and depreciated over their estimated useful
life on a tax basis even if they qualify as a direct financing
lease for GAAP purposes. These differences generally result in
timing differences between fiscal years but total operating
income over the life of the partnership will not be
significantly different between the two bases of accounting.
|
|
(4)
|
|
Cash generated from operation generally includes net income plus
depreciation and amortization plus, where applicable, any
decreases in accounts receivable and accrued rental income or
increases in accounts payable minus, where applicable, any
increases in accounts receivable and accrued rental income or
decreases in accounts payable. In addition, cash generated from
operations is reduced for any property costs related to
development projects and is increased by proceeds when the
project is sold (usually in less than twelve months).
|
|
(5)
|
|
Investors in this program receive interest income which is
reported to them on
Form 1099-INT,
thus tax and cash distribution data per $1,000 invested is not
included.
|
|
(6)
|
|
Cole Credit Property Trust II, Inc. and Cole Credit
Property Trust III, Inc. maintain their books on a GAAP
basis of accounting rather than on a tax basis.
|
|
(7)
|
|
Due to the timing of tax return filings, amounts shown represent
estimates and may change when tax returns are filed at a future
date.
|
|
(8)
|
|
Cash generated from operations for this program generally
includes net income (loss) plus depreciation and amortization,
plus distributions in the form of interest paid to note
investors, minus, where applicable, profit on sale of properties.
|
|
(9)
|
|
Investors in this program receive interest income per annum.
Amounts represent the funding source of the interest payments,
the total of which is disclosed above in interest paid to note
investors.
|
|
(10)
|
|
Includes cash flows from sales in excess of distributions from
previous periods.
|
|
(11)
|
|
Cash distributions to investors from other sources may include
sources such as cash flows in excess of distributions from prior
periods, borrowings, and proceeds from the issuance of common
stock. We consider the real estate acquisition expenses, which
reduce cash flow from operations, to have been funded with
proceeds from our ongoing public offering of shares of common
stock in the offering because the expenses were incurred to
acquire real estate investments.
|
|
(12)
|
|
Consists of proceeds from the offerings of $3.2 million, cash
flows from operations in excess of distributions from previous
periods of $6.8 million and borrowings of $8.1 million.
|
|
(13)
|
|
Consists of return of capital from unconsolidated joint ventures
of $1.6 million, proceeds from the offerings of $3.4 million,
and borrowings of $18.7 million.
|
|
(14)
|
|
Consists of proceeds from the issuance of common stock of $18.6
million and borrowings of $3.1 million.
|
|
(15)
|
|
Consists of proceeds from the issuance of common stock of $58.7
million and borrowings of $18.1 million.
|
Past performance is not necessarily indicative of future results.
A-26
TABLE
IV
RESULTS
OF COMPLETED PROGRAMS (UNAUDITED)
The following table presents summary information on the results
of Prior Real Estate Programs that completed operations since
January 1, 2006 to December 31, 2010 and that had
similar or identical investment objectives to those of this
program. All amounts are from the inception of the program to
the date the program was completed.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole
|
|
|
|
|
|
|
|
|
|
Collateralized
|
|
|
|
|
|
Cole
|
|
|
|
Senior Notes,
|
|
|
|
|
|
Santa Fe
|
|
Program Name
|
|
LLC
|
|
|
|
|
|
Investors, LP
|
|
|
Dollar amount raised
|
|
$
|
28,038,500
|
|
|
|
|
|
|
$
|
6,180,000
|
|
Number of properties purchased
|
|
|
45
|
|
|
|
|
|
|
|
1
|
|
Date of closing of offering
|
|
|
6/3/2004
|
|
|
|
|
|
|
|
11/20/2002
|
|
Date of first sale of property
|
|
|
11/6/2003
|
|
|
|
|
|
|
|
11/30/2007
|
|
Date of final sale of property
|
|
|
4/26/2006
|
|
|
|
|
|
|
|
11/30/2007
|
|
Tax and Distribution Data Per $1,000 Investment Through
12/31/09
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal income tax results:
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
from operations
|
|
$
|
|
|
|
|
(2)
|
|
|
$
|
(304
|
)
|
from recapture
|
|
|
|
|
|
|
(2)
|
|
|
|
429
|
|
Capital gain (loss)
|
|
|
|
|
|
|
(2)
|
|
|
|
1,762
|
|
Deferred gain
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
|
|
|
|
|
|
|
(2)
|
|
|
|
|
|
Ordinary
|
|
|
|
|
|
|
(2)
|
|
|
|
|
|
Cash distributions to investors:
|
|
|
|
|
|
|
|
|
|
|
|
|
Source (on Tax Basis)(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment income
|
|
|
|
|
|
|
(2)
|
|
|
|
824
|
|
Return of capital
|
|
|
28,038,500
|
|
|
|
(2)
|
|
|
|
1,000
|
|
Source (on Cash Basis)
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
|
85,696,933
|
|
|
|
(3)
|
|
|
|
1,731
|
|
Refinancing
|
|
|
|
|
|
|
(2)
|
|
|
|
|
|
Operations
|
|
|
(506,433)
|
|
|
|
(2)
|
|
|
|
93
|
|
Other
|
|
|
|
|
|
|
(2)
|
|
|
|
|
|
Receivable on net purchase money financing
|
|
|
|
|
|
|
(2)
|
|
|
|
|
|
Past performance is not necessarily indicative of future results.
A-27
TABLE
IV
RESULTS
OF COMPLETED PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Collateralized
|
|
|
|
|
|
|
Cole Credit
|
|
|
Property
|
|
|
Senior
|
|
|
|
|
|
|
Property
|
|
|
Fund II,
|
|
|
Notes II,
|
|
|
|
|
Program Name
|
|
Fund, LP
|
|
|
LP
|
|
|
LLC
|
|
|
|
|
|
Dollar amount raised
|
|
$
|
25,000,000
|
|
|
$
|
24,494,500
|
|
|
$
|
28,750,000
|
|
|
|
|
|
Number of properties purchased
|
|
|
14
|
|
|
|
10
|
|
|
|
49
|
|
|
|
|
|
Date of closing of offering
|
|
|
9/2/2003
|
|
|
|
3/25/2004
|
|
|
|
2/15/2005
|
|
|
|
|
|
Date of first sale of property
|
|
|
9/30/2008
|
|
|
|
9/30/2008
|
|
|
|
8/13/2004
|
|
|
|
|
|
Date of final sale of property
|
|
|
9/30/2008
|
|
|
|
9/30/2008
|
|
|
|
5/8/2008
|
|
|
|
|
|
Tax and Distribution Data Per $1,000 Investment Through
12/31/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal income tax results:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operations
|
|
$
|
230
|
|
|
$
|
218
|
|
|
$
|
|
|
|
|
(2
|
)
|
from recapture
|
|
|
220
|
|
|
|
252
|
|
|
|
|
|
|
|
(2
|
)
|
Capital gain (loss)
|
|
|
202
|
|
|
|
119
|
|
|
|
|
|
|
|
(2
|
)
|
Deferred gain
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2
|
)
|
Ordinary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2
|
)
|
Cash distributions to investors:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Source (on Tax Basis)(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment income
|
|
|
488
|
|
|
|
507
|
|
|
|
|
|
|
|
(2
|
)
|
Return of capital
|
|
|
1,000
|
|
|
|
1,000
|
|
|
|
28,750,000
|
|
|
|
(2
|
)
|
Source (on Cash Basis)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
|
1,035
|
|
|
|
1,091
|
|
|
|
153,355,044
|
|
|
|
(3
|
)
|
Refinancing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2
|
)
|
Operations
|
|
|
453
|
|
|
|
416
|
|
|
|
(7,231,419)
|
|
|
|
(2
|
)
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2
|
)
|
Receivable on net purchase money financing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2
|
)
|
|
|
|
(1)
|
|
The respective program maintains its books on a tax basis of
accounting rather than on a GAAP basis. There are potential
differences in accounting for cash distributions on a tax basis
and GAAP basis, the most significant of which is that
partnership syndication costs, which include securities
commissions and other costs, would be recorded as a reduction of
capital for GAAP purposes, which would result in lower return of
capital and higher investment income amounts on a GAAP basis
than on a tax basis.
|
|
(2)
|
|
Investors in this program receive interest per annum, which is
included in interest expense. Therefore, tax and cash
distribution data per $1,000 invested is not applicable.
|
|
(3)
|
|
Over the course of the program, certain properties acquired with
the initial note proceeds were sold and the sales proceeds were
reinvested in replacement properties. Certain replacement
properties were subsequently sold and the sales proceeds were
reinvested in new replacement properties, this may have occurred
multiple times over the life of the program or certain
properties. This amount represents the accumulated proceeds from
sale and reinvestment of the sales proceeds in replacement
properties.
|
Past performance is not necessarily indicative of future results.
A-28
TABLE
V
SALES OR
DISPOSALS OF PROPERTIES (UNAUDITED)
This table provides summary information on the results of sales
or disposals of properties since January 1, 2008 by Prior
Real Estate Programs having similar investment objectives to
those of this program. All amounts are through December 31,
2010.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Excess
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Including Closing and Soft Costs
|
|
|
(Deficiency)
|
|
|
|
|
|
|
|
|
|
Selling Price, Net of Closing Costs and GAAP Adjustments
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
of Property
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition
|
|
|
|
|
|
Operating
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Money
|
|
|
Adjustments
|
|
|
|
|
|
|
|
|
Cost, Capital
|
|
|
|
|
|
Cash
|
|
|
|
|
|
|
|
|
|
Cash Received
|
|
|
Mortgage
|
|
|
Mortgage
|
|
|
Resulting from
|
|
|
|
|
|
Original
|
|
|
Improvements,
|
|
|
|
|
|
Receipts
|
|
|
|
Date
|
|
|
Date of
|
|
|
Net of Closing
|
|
|
Balance at
|
|
|
Taken Back by
|
|
|
Application of
|
|
|
|
|
|
Mortgage
|
|
|
Closing and
|
|
|
|
|
|
Over Cash
|
|
Property
|
|
Acquired
|
|
|
Sale
|
|
|
Costs
|
|
|
Time of Sale
|
|
|
Program
|
|
|
GAAP(3)
|
|
|
Total(1)
|
|
|
Financing
|
|
|
Soft Costs(2)
|
|
|
Total
|
|
|
Expenditures
|
|
|
Cole Collateralized Senior Notes II, LLC
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tortuga Cantina Woodlands, TX
|
|
|
12/03
|
|
|
|
05/08
|
|
|
|
502,807
|
|
|
|
1,355,250
|
|
|
|
|
|
|
|
|
|
|
|
1,858,057
|
|
|
|
1,345,997
|
|
|
|
671,188
|
|
|
|
2,017,185
|
|
|
|
414,142
|
|
Cole Collateralized Senior Notes III, LLC
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DST Interests in Cole Net Lease Portfolio VI(4)(6)
|
|
|
Various
|
|
|
|
02/08
|
|
|
|
23,798,400
|
|
|
|
29,740,000
|
|
|
|
|
|
|
|
|
|
|
|
53,538,400
|
|
|
|
29,740,000
|
|
|
|
23,798,400
|
|
|
|
53,538,400
|
|
|
|
386,094
|
|
Cole Acquisitions I, LLC(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CVS Robertsdale, AL
|
|
|
04/06
|
|
|
|
02/08
|
|
|
|
1,703,695
|
|
|
|
2,720,000
|
|
|
|
|
|
|
|
|
|
|
|
4,423,695
|
|
|
|
3,348,000
|
|
|
|
1,111,360
|
|
|
|
4,459,360
|
|
|
|
222,906
|
|
Cole Credit Property Fund, LP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payless Shoes Columbia, SC
|
|
|
02/03
|
|
|
|
09/08
|
|
|
|
539,250
|
|
|
|
860,000
|
|
|
|
|
|
|
|
|
|
|
|
1,399,250
|
|
|
|
|
|
|
|
1,581,966
|
|
|
|
1,581,966
|
|
|
|
582,574
|
|
Walgreens Jacksonville, FL
|
|
|
02/03
|
|
|
|
09/08
|
|
|
|
2,538,500
|
|
|
|
2,510,750
|
|
|
|
|
|
|
|
|
|
|
|
5,049,250
|
|
|
|
3,652,000
|
|
|
|
855,318
|
|
|
|
4,507,318
|
|
|
|
1,398,635
|
|
CVS Hamilton, OH
|
|
|
03/03
|
|
|
|
09/08
|
|
|
|
1,811,750
|
|
|
|
1,787,500
|
|
|
|
|
|
|
|
|
|
|
|
3,599,250
|
|
|
|
|
|
|
|
3,266,592
|
|
|
|
3,266,592
|
|
|
|
1,058,181
|
|
Walgreens Akron, OH
|
|
|
04/03
|
|
|
|
09/08
|
|
|
|
919,250
|
|
|
|
1,900,000
|
|
|
|
|
|
|
|
|
|
|
|
2,819,250
|
|
|
|
|
|
|
|
2,800,400
|
|
|
|
2,800,400
|
|
|
|
688,613
|
|
Walgreens Seattle, WA
|
|
|
04/03
|
|
|
|
09/08
|
|
|
|
3,299,244
|
|
|
|
3,349,500
|
|
|
|
|
|
|
|
|
|
|
|
6,648,744
|
|
|
|
4,848,000
|
|
|
|
1,223,201
|
|
|
|
6,071,201
|
|
|
|
2,019,210
|
|
Walgreens LaMarque, TX
|
|
|
05/03
|
|
|
|
09/08
|
|
|
|
2,232,250
|
|
|
|
2,277,000
|
|
|
|
|
|
|
|
|
|
|
|
4,509,250
|
|
|
|
3,296,000
|
|
|
|
832,650
|
|
|
|
4,128,650
|
|
|
|
1,188,276
|
|
CVS Mechanicville, NY
|
|
|
06/03
|
|
|
|
09/08
|
|
|
|
1,298,850
|
|
|
|
1,290,000
|
|
|
|
|
|
|
|
|
|
|
|
2,588,850
|
|
|
|
1,824,000
|
|
|
|
544,647
|
|
|
|
2,368,647
|
|
|
|
649,045
|
|
Office Depot Laurel, MS
|
|
|
06/03
|
|
|
|
09/08
|
|
|
|
1,379,250
|
|
|
|
1,270,000
|
|
|
|
|
|
|
|
|
|
|
|
2,649,250
|
|
|
|
|
|
|
|
2,320,534
|
|
|
|
2,320,534
|
|
|
|
815,536
|
|
Home Depot Colma, CA(7)
|
|
|
06/03
|
|
|
|
09/08
|
|
|
|
17,553,309
|
|
|
|
21,613,000
|
|
|
|
|
|
|
|
|
|
|
|
39,166,309
|
|
|
|
26,400,000
|
|
|
|
6,970,111
|
|
|
|
33,370,111
|
|
|
|
11,735,401
|
|
Walgreens Saginaw, MI
|
|
|
06/03
|
|
|
|
09/08
|
|
|
|
1,916,750
|
|
|
|
2,282,500
|
|
|
|
|
|
|
|
|
|
|
|
4,199,250
|
|
|
|
|
|
|
|
4,141,775
|
|
|
|
4,141,775
|
|
|
|
1,222,700
|
|
Walgreens Tulsa, OK
|
|
|
08/03
|
|
|
|
09/08
|
|
|
|
973,750
|
|
|
|
1,215,500
|
|
|
|
|
|
|
|
|
|
|
|
2,189,250
|
|
|
|
|
|
|
|
2,208,207
|
|
|
|
2,208,207
|
|
|
|
675,934
|
|
Walgreens Broken Arrow, OK
|
|
|
08/03
|
|
|
|
09/08
|
|
|
|
971,750
|
|
|
|
1,127,500
|
|
|
|
|
|
|
|
|
|
|
|
2,099,250
|
|
|
|
|
|
|
|
2,041,363
|
|
|
|
2,041,363
|
|
|
|
628,969
|
|
Office Depot London, KY
|
|
|
09/03
|
|
|
|
09/08
|
|
|
|
1,819,250
|
|
|
|
1,680,000
|
|
|
|
|
|
|
|
|
|
|
|
3,499,250
|
|
|
|
|
|
|
|
3,076,041
|
|
|
|
3,076,041
|
|
|
|
1,070,680
|
|
Cole Credit Property Fund II, LP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Best Buy Las Cruces, NM
|
|
|
11/03
|
|
|
|
09/08
|
|
|
|
2,290,250
|
|
|
|
3,809,000
|
|
|
|
|
|
|
|
|
|
|
|
6,099,250
|
|
|
|
|
|
|
|
5,873,060
|
|
|
|
5,873,060
|
|
|
|
1,473,826
|
|
Staples Angola, IN
|
|
|
12/03
|
|
|
|
09/08
|
|
|
|
1,200,250
|
|
|
|
1,999,000
|
|
|
|
|
|
|
|
|
|
|
|
3,199,250
|
|
|
|
|
|
|
|
3,087,065
|
|
|
|
3,087,065
|
|
|
|
733,421
|
|
TJ Maxx Staunton, VA
|
|
|
02/04
|
|
|
|
09/08
|
|
|
|
1,183,250
|
|
|
|
3,116,000
|
|
|
|
|
|
|
|
|
|
|
|
4,299,250
|
|
|
|
|
|
|
|
5,033,670
|
|
|
|
5,033,670
|
|
|
|
1,320,813
|
|
AT&T Santa Clara, CA
|
|
|
03/04
|
|
|
|
09/08
|
|
|
|
4,156,030
|
|
|
|
6,032,000
|
|
|
|
|
|
|
|
|
|
|
|
10,188,030
|
|
|
|
|
|
|
|
9,293,258
|
|
|
|
9,293,258
|
|
|
|
2,025,298
|
|
Walgreens Tulsa (Memorial), OK
|
|
|
03/04
|
|
|
|
09/08
|
|
|
|
1,023,250
|
|
|
|
1,926,000
|
|
|
|
|
|
|
|
|
|
|
|
2,949,250
|
|
|
|
2,320,000
|
|
|
|
657,933
|
|
|
|
2,977,933
|
|
|
|
631,667
|
|
Walgreens Crossville, TN
|
|
|
03/04
|
|
|
|
09/08
|
|
|
|
1,696,250
|
|
|
|
2,753,000
|
|
|
|
|
|
|
|
|
|
|
|
4,449,250
|
|
|
|
3,388,000
|
|
|
|
871,868
|
|
|
|
4,259,868
|
|
|
|
815,324
|
|
CVS Columbia I, TN
|
|
|
05/04
|
|
|
|
09/08
|
|
|
|
884,250
|
|
|
|
1,715,000
|
|
|
|
|
|
|
|
|
|
|
|
2,599,250
|
|
|
|
1,840,000
|
|
|
|
547,215
|
|
|
|
2,387,215
|
|
|
|
275,980
|
|
CVS Columbia II, TN
|
|
|
05/04
|
|
|
|
09/08
|
|
|
|
664,250
|
|
|
|
1,735,000
|
|
|
|
|
|
|
|
|
|
|
|
2,399,250
|
|
|
|
1,860,000
|
|
|
|
558,230
|
|
|
|
2,418,230
|
|
|
|
291,369
|
|
Walgreens Newton, IA
|
|
|
10/04
|
|
|
|
09/08
|
|
|
|
1,936,250
|
|
|
|
2,393,000
|
|
|
|
|
|
|
|
|
|
|
|
4,329,250
|
|
|
|
2,393,000
|
|
|
|
2,107,368
|
|
|
|
4,500,368
|
|
|
|
794,166
|
|
|
|
|
(1)
|
|
None of the amounts are being reported for tax purposes on the
installment basis. See Table IV for allocation of the
taxable gains between ordinary and capital income for all sales.
|
|
(2)
|
|
The amounts shown do not include a pro rata share of the
original offering costs. There were no carried interest received
in lieu of commissions in connection with the acquisition of the
property.
|
|
(3)
|
|
As the financial statements are prepared on an income tax basis,
there are no GAAP adjustments included herein.
|
|
(4)
|
|
Amounts herein relate to the sale of DST interests in
single-tenant commercial properties. There was no gain or loss
related to the sales as the interests in the property were sold
at cost, with each purchaser acquiring their interest with cash
and the assumption of a pro-rata portion of any existing loan on
the property.
|
Past performance is not necessarily indicative of future results.
A-29
TABLE
V
SALES OR
DISPOSALS OF PROPERTIES
(UNAUDITED) (Continued)
|
|
|
(5)
|
|
These properties were acquired by a joint venture between Cole
Collateralized Senior Notes, LLC, Cole Collateralized Senior
Notes II, LLC, Cole Collateralized Senior Notes III,
LLC, and Cole Collateralized Senior Notes IV, LLC.
|
|
(6)
|
|
DST Interests in Cole Net Lease Portfolio VI include: Mercedes
Benz West Covina, CA, Walgreens Westford, MA, Walgreens
Wilmington, MA, Walgreens Brenham, TX, Starbucks Crestwood, KY,
Starbucks Danville, KY, and Starbucks Somerset, KY.
|
|
(7)
|
|
Home Depot Colma, CA was acquired by Cole Credit Property Fund,
LP and Cole Credit Property Fund II, LP.
|
Past performance is not necessarily indicative of future results.
A-30
|
|
|
COLE CREDIT PROPERTY
TRUST IV, INC.
|
|
|
|
INITIAL SUBSCRIPTION AGREEMENT FOR THE PURCHASE OF COMMON
STOCK
|
|
866.907.2653
|
A
INVESTMENT (a separate Initial Subscription Agreement is
required for each initial investment)
Investors should not sign this Initial Subscription Agreement
for the offering unless they have received the current final
Prospectus.
|
|
1.
|
This subscription is in the amount of $
o
Check
if amount is estimated
|
|
|
|
|
o
|
Initial Subscription (minimum $2,500)
|
|
|
|
|
o
|
Additional Subscription (complete all sections except for B and
D
or
complete the separate simplified Additional
Subscription Agreement)
|
Existing Cole Account
Number
|
|
2.
|
Payment will
be made
with:
o
Enclosed
check
o
Funds
wired
o
Funds
to follow
|
|
|
|
o
ACH
|
|
|
|
|
o
Checking
o
Savings
|
Financial Institution
|
|
|
|
|
|
Routing/Transit No.
|
|
Account No.
|
|
|
3.
|
For purchases without selling commissions, please designate
below, as applicable:
|
o
RIA
Account
Purchase
o
Registered
Representative
Purchase
o
Cole
Employee or Affiliate
|
|
B
|
TYPE OF
REGISTRATION (please complete either section 1 or 2, but
not both, and section 3, if applicable)
|
1. Non-Qualified
Registration
|
|
|
|
o
|
Individual Ownership (one signature required)
|
|
|
o
|
Joint Tenants with Right of Survivorship (all parties must sign)
|
|
|
o
|
Community Property (all parties must sign)
|
|
|
o
|
Tenants-in-Common
(all parties must sign)
|
|
|
o
|
Transfer on Death (fill out TOD Form to effect designation)
|
|
|
o
|
Uniform Gifts to Minors Act or Uniform Transfer to Minors Act
(UGMA/UTMA adult custodian signature required)
|
State
of
Custodian
for
|
|
|
|
o
|
Corporate Ownership (authorized signature and Corporate
Resolution or Cole Corporate Resolution Form required)
o
S-corp
o
C-corp
(will default to S-corp if nothing is marked)
|
|
|
o
|
Partnership Ownership (authorized signature and Partnership
paperwork or Cole Corporate Resolution Form required)
|
|
|
o
|
LLC Ownership (authorized signature and LLC paperwork or Cole
Corporate Resolution Form required)
|
|
|
o
|
Taxable Pension or Profit Sharing Plan
(authorized signature and Plan paperwork required)
|
|
|
o
|
Trust (trustee or grantor signatures and trust documents or Cole
Trustee Certification of Investment Power required)
|
Type of Trust: (Specify i.e., Family, Living, Revocable, etc.)
Name of Trust
Date of
Trust Tax
ID # (if applicable)
|
|
2.
|
Qualified
Registration (make check payable to the Custodian)
|
|
|
|
|
o
|
Traditional IRA
|
|
|
o
|
Roth IRA
|
|
|
o
|
Keogh Plan
|
|
|
o
|
Simplified Employee Pension/Trust (S.E.P.)
|
|
|
o
|
Pension or Profit Sharing Plan (exempt under 401 (a))
o
Non-custodial
o
Custodial
|
|
|
o
|
Other (specify)
|
|
|
3.
|
Custodian
or Clearing Firm/Platform Information (send all paperwork
directly to the Custodian or Clearing Firm/Platform)
|
Name
Street/PO Box
City State Zip
Custodian Tax ID # (provided by Custodian)
Custodial or Clearing Firm/Platform Account #
B-1
C REGISTRATION
INFORMATION (or Trustees if applicable)
|
|
|
|
|
|
|
|
|
Investor Name
|
|
Co-Investor Name (if applicable)
|
|
|
|
|
|
|
Mailing Address
|
|
Mailing Address
|
|
|
|
|
|
|
City State Zip
|
|
City State Zip
|
|
|
|
|
|
|
Phone Business Phone
|
|
Phone Business Phone
|
|
|
|
|
|
|
Email Address
|
|
Email Address
|
|
|
|
|
|
|
SSN or Tax
ID Date of Birth
|
|
SSN or Tax
ID Date of Birth
|
|
|
|
|
|
o
Cole
Employee or Affiliate
|
Street Address (if different from mailing address or mailing
address is a PO Box)
|
|
|
|
|
|
|
|
|
City State Zip
|
|
|
Volume
Discounts
I (We) are making, or previously have made, investments in the
following Cole-sponsored programs that are Eligible Programs, as
defined in a Cole REIT Prospectus. (You may include any
investments made by the same purchaser, as defined
in the Prospectus.) This information will help determine whether
volume discounts may be applicable. All holdings are subject to
verification.
Name of Cole
Program Cole
Account
Number SSN
or Tax ID
Name of Cole
Program Cole
Account
Number SSN
or Tax ID
D DISTRIBUTION
INSTRUCTIONS (will default to Address of Record or Custodian or
Clearing Firm/Platform if nothing is marked)
FOR CUSTODIAL OR CLEARING
FIRM/PLATFORM ACCOUNTS:
o
Custodian or Clearing Firm/Platform of Record
o
Reinvest pursuant to Distribution Reinvestment Plan
FOR NON-CUSTODIAL OR NON-CLEARING FIRM/PLATFORM ACCOUNTS:
o
Mail to Address of Record
o
Reinvest pursuant to Distribution Reinvestment Plan
o
Direct Deposit
|
|
|
|
|
|
|
|
o
Checking
o
Savings
|
Financial Institution
|
|
|
|
|
|
|
|
|
Routing/Transit No.
|
|
Account No.
|
o
Check if banking information is same as provided in Section A-2
o
Mail to Brokerage Account or Third Party
|
|
|
|
|
|
|
|
|
Payee Name
|
|
Mailing Address
|
|
|
|
|
|
|
Account No.
|
|
City State Zip
|
IF YOU ELECT TO PARTICIPATE IN THE DISTRIBUTION REINVESTMENT
PLAN, YOU MUST AGREE THAT IF AT ANY TIME YOU CANNOT MAKE THE
INVESTOR REPRESENTATION AND WARRANTIES SET FORTH IN THE
PROSPECTUS OR THIS INITIAL SUBSCRIPTION AGREEMENT, YOU MUST
PROMPTLY NOTIFY COLE CREDIT PROPERTY TRUST IV, INC.
(CCPT IV) IN WRITING OF THAT FACT.
By signing this agreement, I authorize CCPT IV to deposit
distributions into the account specified in Section D, and to
debit that account in the amount of any distribution deposited
in error. If I withdraw deposits made in error, I authorize CCPT
IV to retain future distributions until the erroneous deposits
are recovered. This authorization is effective until terminated
in writing by either party.
B-2
E INVESTOR(S)
SIGNATURES (Investor(s) must initial each of
sections 1-4
and those sections of
5-12
as
appropriate)
I (we) (or, in the case of fiduciary accounts, the person
authorized to sign on my (our) behalf) hereby acknowledge and/or
represent the following:
|
|
|
|
|
INVESTOR
|
|
CO-INVESTOR
|
|
|
|
|
|
|
1. I (we) have received the final Prospectus, whether over
the Internet, on a CD-ROM, paper copies, or any other delivery
method, relating to the shares of CCPT IV at least five
business days before signing this Subscription Agreement.
|
|
|
|
|
2. Excluding home, home furnishings and automobiles, I (we)
either: (i) have a net worth of at least $70,000 and had
during the last year or estimate that I (we) will have in the
current year gross income of at least $70,000; or (ii) have
a net worth of at least $250,000. In the case of sales to
fiduciary accounts, the specific requirements shall be met by
the beneficiary, the fiduciary account or by the donor or
grantor who directly or indirectly supplies the funds for the
purchase of the shares.
|
|
|
|
|
3. I am (we are) purchasing the shares for my (our) own
account, or if I am (we are) purchasing shares on behalf of a
trust or other entity of which I am (we are) trustee(s) or
authorized agent(s), I (we) have due authority to execute this
Initial Subscription Agreement and do hereby legally bind the
trust or other entity of which I am (we are) trustee(s) or
authorized agent(s).
|
|
|
|
|
4. I (we) acknowledge that the shares are not liquid.
|
|
|
|
|
|
|
|
|
|
5. For
Alabama
residents: My (our) liquid net worth
is at least 10 times my (our) investment in this and similar
programs.
|
|
|
|
|
6. For
California
residents: I (we) either:
(i) have a net worth of at least $75,000 and had during the
last year or estimate that I (we) will have in the current year
gross income of at least $75,000; or (ii) have a net worth
of at least $250,000. In addition, my (our) investment in CCPT
IV does not exceed ten percent (10%) of my (our) net worth.
|
|
|
|
|
7. For
Iowa and Ohio
residents: My (our) investment
in CCPT IV and its affiliates does not exceed 10% of my (our)
liquid net worth.
|
|
|
|
|
8. For
Kansas
residents: I (we) acknowledge that it
is recommended that I (we) should invest, in the aggregate, no
more than 10% of my (our) liquid net worth in CCPT
IV and the securities of similar direct participation programs.
Liquid Net Worth is that portion of net worth (total
assets minus total liabilities) that consists of cash, cash
equivalents and readily marketable securities.
|
|
|
|
|
9. For
Kentucky, Michigan, Oregon, Pennsylvania and
Tennessee
residents: My (our) liquid net worth is at least
10 times my (our) maximum investment in CCPT IV.
|
|
|
|
|
10. For
Maine
residents: My (our) investment in CCPT
IV and its affiliates does not exceed ten percent (10%) of my
(our) net worth.
|
|
|
|
|
11. For
Nebraska
residents: Excluding home,
furnishings and automobiles, I (we) either: (i) have a minimum
net worth of $100,000 and an annual income of $70,000, or (ii)
have a minimum net worth of $350,000. In addition, my (our)
investment in CCPT IV does not exceed 10% of my (our) net worth.
|
|
|
|
|
12. For
North Dakota
residents: My (our) liquid net
worth is at least 10 times my (our) investment in CCPT IV and
its affiliates.
|
o
By
checking here I confirm I would like to go green and no longer
receive in paper any documents that Cole can send to me
electronically. If I decide later that I want to receive
documents in paper, I can contact Cole Investor Services at
1-866-907-2653.
SUBSTITUTE W-9: I HEREBY
CERTIFY
under penalty of
perjury (i) that the taxpayer identification number shown
on this Initial Subscription Agreement is true, correct and
complete, (ii) that I am not subject to backup withholding
either because I have not been notified that I am subject to
backup withholding as a result of a failure to report all
interest or distributions, or the Internal Revenue Service has
notified me that I am no longer subject to backup withholding,
and (iii) I am a U.S. person.
You should not invest in CCPT IV unless you have read and
understood this agreement and the Prospectus referred to above
and understand the risks associated with an investment in CCPT
IV. In deciding to invest in CCPT IV, you should rely only on
the information contained in the Prospectus, and not on any
other information or representations from any other person or
source. CCPT IV and each person selling shares of CCPT IV common
stock shall be responsible for making every reasonable effort to
determine that such purchase of shares is a suitable and
appropriate investment for each investor, based on the
information provided by the prospective investor regarding the
investors financial situation and investment
objectives.
Notice is hereby given to each investor that by executing
this agreement you are not waiving any rights you may have under
the Securities Act of 1933, as amended, or any state securities
laws.
|
|
|
|
|
|
|
|
|
Investors
Signature Date
|
|
Custodial
Signature Date
|
|
|
|
|
|
|
|
|
|
Co-Investors
Signature Date
|
|
|
B-3
F REGISTERED
REPRESENTATIVE (to be completed by selling Registered
Representative)
Name of Registered Representative
Rep ID #
Mailing Address
City State Zip
Phone Email
Address
Name of Broker-Dealer
Rep CRD #
Have you changed firm affiliation (since last purchase)?
o
Yes
o
No
G REGISTERED
INVESTMENT ADVISOR (RIA) REPRESENTATIVE (to be completed by
selling RIA Representative)
Name of RIA Representative
Mailing Address
City State Zip
Phone Email
Address
Have you changed firm affiliation (since last purchase)?
o
Yes
o
No
Name of RIA Firm
SEC Registered
RIA
o
Yes
o
No
State Registered
RIA
o
Yes
o
No
States
Registered
RIA IARD
Name of Clearing Firm
Name of Affiliate Broker Dealer
H REPRESENTATIVE
SIGNATURES
Based on the information I obtained from the investor regarding
the investors financial situation and investment
objectives, I hereby certify to Cole Capital Corporation, Cole
Holdings Corporation and Cole Credit Property Trust IV,
Inc. that I have reasonable grounds for believing that the
purchase of the shares by the investor in CCPT IV is a suitable
and appropriate investment for this investor.
Signature of Registered or RIA Representative
Signature of Broker/Dealer or Clearing Firm/Platform
o
I
am completing and signing this application pursuant to a
power-of-attorney
from the investor. I hereby certify that such power-of-attorney
is legally valid and includes within its scope my completion and
execution of this application on behalf of the investor.
|
|
|
|
|
ONCE COMPLETE, PLEASE
DELIVER THIS FORM TO:
Via Fax:
1.877.616.1118
|
|
Via Regular Mail:
CCPT IV
DST Systems, Inc.
P.O. Box 219312
Kansas City, MO
64121-9312
|
|
Via Overnight/Express Mail:
CCPT IV
DST Systems, Inc.
430 West 7th Street
Kansas City, MO 64105
|
|
|
©
2012
Cole Capital Advisors, Inc. All rights reserved
|
CCPT IV_AGMT_01 (01-12)
|
B-4
|
|
|
COLE CREDIT PROPERTY
TRUST IV, INC.
|
|
|
|
ADDITIONAL SUBSCRIPTION AGREEMENT FOR THE PURCHASE OF COMMON
STOCK
|
|
866.907.2653
|
This form may be used by any current investor in Cole Credit
Property Trust IV, Inc. (CCPT IV), who desires to purchase
additional shares of CCPT IV and who purchased their shares
directly from CCPT IV. Investors who acquired shares other than
through use of an Initial Subscription Agreement (e.g., through
a transfer of ownership or TOD) and who wish to make additional
investments must complete the CCPT IV Initial Subscription
Agreement.
A
INVESTMENT (a completed Initial Subscription Agreement is
required for each initial investment)
|
|
1.
|
This subscription is in the amount of $
and is
an
o
Additional
Subscription
|
o
Check
if amount is estimated
|
|
2.
|
Payment will
be made
with:
o
Enclosed
check
o
Funds
wired
o
Funds
to follow
|
|
|
|
o
ACH
|
|
|
|
|
o
Checking
o
Savings
|
Financial Institution
|
|
|
|
|
|
Routing/Transit No.
|
|
Account No.
|
|
|
B
|
REGISTRATION
INFORMATION
|
|
|
|
|
|
|
|
|
|
Existing Cole Account Registration (name of Account)
|
|
SSN or Tax ID
|
|
|
|
|
|
|
Existing Cole Account Number
|
|
|
Volume Discounts
I (we) are making, or previously have made, investments in the
following Cole-sponsored programs that are Eligible Programs, as
defined in a Cole REIT Prospectus. (You may include any
investments made by the same purchaser, as defined
in the Prospectus.) This information will help determine whether
volume discounts may be applicable. All holdings are subject to
verification.
Name of Cole
Program Cole
Account
Number SSN
or Tax ID
Name of Cole
Program Cole
Account
Number SSN
or Tax ID
C INVESTOR(S)
SIGNATURES (Investor(s) must initial each of
sections 1-4
and those sections of 5-12 as appropriate)
I (we) (or, in the case of fiduciary accounts, the person
authorized to sign on my (our) behalf) hereby acknowledge
and/or
represent the following:
|
|
|
|
|
INVESTOR
|
|
CO-INVESTOR
|
|
|
|
|
|
|
1. I (we) have received the final Prospectus, whether over
the Internet, on a CD-ROM, paper copies, or any other delivery
method, relating to the shares of CCPT IV at least five business
days before signing this Subscription Agreement.
|
|
|
|
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2. Excluding home, home furnishings and automobiles, I (we)
either: (i) have a net worth of at least $70,000 and had
during the last year or estimate that I (we) will have in the
current year gross income of at least $70,000; or (ii) have
a net worth of at least $250,000. In the case of sales to
fiduciary accounts, the specific requirements shall be met by
the beneficiary, the fiduciary account or by the donor or
grantor who directly or indirectly supplies the funds for the
purchase of the shares.
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3. I am (we are) purchasing the shares for my (our) own
account, or if I am (we are) purchasing shares on behalf of a
trust or other entity of which I am (we are) trustee(s) or
authorized agent(s), I (we) have due authority to execute this
Subscription Agreement and do hereby legally bind the trust or
other entity of which I am (we are) trustee(s) or authorized
agent(s).
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4. I (we) acknowledge that the shares are not liquid.
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5. For
Alabama
residents: My (our) liquid net worth
is at least 10 times my (our) investment in CCPT IV and similar
programs.
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6. For
California
residents: I (we) either:
(i) have a net worth of at least $75,000 and had during the
last year or estimate that I (we) will have in the current year
gross income of at least $75,000; or (ii) have a net worth
of at least $250,000. In addition, my (our) investment in CCPT
IV does not exceed ten percent (10%) of my (our) net worth.
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7. For
Iowa and Ohio
residents: My (our) investment
in CCPT IV and its affiliates does not exceed 10% of my (our)
liquid net worth.
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8. For
Kansas
residents: I (we) acknowledge that it
is recommended that I (we) should invest, in the aggregate, no
more than 10% of my (our) liquid net worth (as
defined in the Prospectus) in CCPT IV and the securities of
similar direct participation programs.
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C-1
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INVESTOR
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CO-INVESTOR
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9. For
Kentucky, Michigan, Oregon, Pennsylvania and
Tennessee
residents: My (our) liquid net worth is at least
10 times my (our) maximum investment in CCPT IV.
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10. For
Maine
residents: My (our) investment in CCPT
IV and its affiliates does not exceed ten percent (10%) of my
(our) net worth.
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|
11. For
Nebraska
residents: Excluding home,
furnishings and automobiles, I (we) either: (i) have a
minimum net worth of $100,000 and an annual income of $70,000,
or (ii) have a minimum net worth of $350,000. In addition,
my (our) investment in CCPT IV does not exceed 10% of my (our)
net worth.
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12. For
North Dakota
residents: My (our) liquid net
worth is at least 10 times my (our) investment in CCPT IV and
its affiliates.
|
o
By
checking here I confirm I would like to go green and no longer
receive in paper any documents that Cole can send to me
electronically. If I decide later that I want to receive
documents in paper, I can contact Cole Investor Services at
1-866-907-2653.
If you are choosing to Go Green, please provide your email
address
here:
SUBSTITUTE
W-9:
I
HEREBY CERTIFY
under
penalty of perjury (i) that the taxpayer identification
number shown on this Subscription Agreement is true, correct and
complete, (ii) that I am not subject to backup withholding
either because I have not been notified that I am subject to
backup withholding as a result of a failure to report all
interest or distributions, or the Internal Revenue Service has
notified me that I am no longer subject to backup withholding,
and (iii) I am a U.S. person.
You should not invest in CCPT IV unless you have read and
understood this agreement and the Prospectus referred to above
and understand the risks associated with an investment in CCPT
IV. In deciding to invest in CCPT IV, you should rely only on
the information contained in the Prospectus, and not on any
other information or representations from any other person or
source. CCPT IV and each person selling shares of CCPT IV common
stock shall be responsible for making every reasonable effort to
determine that such purchase of shares is a suitable and
appropriate investment for each investor, based on the
information provided by the prospective investor regarding the
investors financial situation and investment
objectives.
Notice is hereby given to each investor that by executing
this agreement you are not waiving any rights you may have under
the Securities Act of 1933, as amended, or any state securities
laws.
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Investors
Signature Date
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Custodial
Signature Date
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Co-Investors
Signature Date
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D REGISTERED
REPRESENTATIVE (to be completed by selling Registered
Representative)
Name of
Registered Representative
E REGISTERED
INVESTMENT ADVISOR (RIA) REPRESENTATIVE (to be completed by
selling RIA Representative)
Name of RIA
Representative
F REPRESENTATIVE
SIGNATURES
Based on the information I obtained from the investor regarding
the investors financial situation and investment
objectives, I hereby certify to Cole Capital Corporation, Cole
Holdings Corporation and CCPT IV that I have reasonable grounds
for believing that the purchase of the shares by the investor in
CCPT IV is a suitable and appropriate investment for this
investor.
Signature of Registered or RIA Representative
Signature of Broker/Dealer or Clearing Firm/Platform
o
I
am completing and signing this application pursuant to a
power-of-attorney
from the investor. I hereby certify that such power-of-attorney
is legally valid and includes within its scope my completion and
execution of this application on behalf of the investor.
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ONCE COMPLETE, PLEASE
DELIVER THIS FORM TO:
Via Fax:
1.877.616.1118
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|
Via Regular Mail:
CCPT IV
DST Systems, Inc.
P.O. Box 219312
Kansas City, MO
64121-9312
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|
Via Overnight/Express Mail:
CCPT IV
DST Systems, Inc.
430 West 7th Street
Kansas City, MO 64105
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©
2012
Cole Capital Advisors, Inc. All rights reserved
|
CCPT IV_AI_AGMT_01 (01-12)
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C-2
NOT FOR USE IN ALABAMA,
PENNSYLVANIA OR TENNESSEE
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COLE CREDIT PROPERTY TRUST IV,
INC.
COLE CORPORATE INCOME TRUST, INC.
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INITIAL SUBSCRIPTION AGREEMENT FOR THE PURCHASE OF COMMON
STOCK
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866.907.2653
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A
INVESTMENT (an Initial Subscription Agreement is required for
each initial investment)
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|
1.
|
This subscription is in the amount(s) and for the Cole Real
Estate Investment Trust(s) (Cole REIT(s)) listed below.
Investors should not sign this Initial Subscription Agreement
for either offering unless they have received the current final
Prospectus for BOTH offerings.
|
a.
o
$
COLE
CREDIT PROPERTY TRUST IV, INC.
o
Initial
Subscription (Minimum is $2,500)
o
Check
if amount is estimated
o
Additional
Subscription (Minimum is $1,000)
Existing Cole Account
Number
b.
o
$
COLE
CORPORATE INCOME TRUST, INC.
o
Initial
Subscription (Minimum is $2,500)
o
Check
if amount is estimated
o
Additional
Subscription (Minimum is $1,000)
Existing Cole Account
Number
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2.
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Payment will
be made
with:
o
Enclosed
check
o
Funds
wired
o
Funds
to follow
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o
ACH
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o
Checking
o
Savings
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Financial Institution
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Routing/Transit No.
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Account No.
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3.
|
For purchases without selling commissions, please designate
below, as applicable:
|
o
RIA
Account
Purchase
o
Registered
Representative
Purchase
o
Cole
Employee or Affiliate
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B
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TYPE OF
REGISTRATION (please complete either section 1 or 2, but
not both, and section 3, if applicable)
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1. Non-Qualified
Registration
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o
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Individual Ownership (one signature required)
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o
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Joint Tenants with Right of Survivorship (all parties must sign)
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o
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Community Property (all parties must sign)
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o
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Tenants-in-Common
(all parties must sign)
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o
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Transfer on Death (fill out TOD Form to effect designation)
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o
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Uniform Gifts to Minors Act or Uniform Transfer to Minors Act
(UGMA/UTMA adult custodian signature required)
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State
of
Custodian
for
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o
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Corporate Ownership (authorized signature and Corporate
Resolution or Cole Corporate Resolution Form required)
o
S-corp
o
C-corp
(will default to S-corp if nothing is marked)
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o
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Partnership Ownership (authorized signature and Partnership
paperwork or Cole Corporate Resolution Form required)
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o
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LLC Ownership (authorized signature and LLC paperwork or Cole
Corporate Resolution Form required)
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o
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Taxable Pension or Profit Sharing Plan
(authorized signature and Plan paperwork required)
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o
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Trust (trustee or grantor signatures and trust documents or Cole
Trustee Certification of Investment Power required)
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Type of Trust: (Specify i.e., Family, Living, Revocable, etc.)
Name of Trust
Date of
Trust Tax
ID # (if applicable)
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2.
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Qualified
Registration
(make
check payable to the Custodian)
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o
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Traditional IRA
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o
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Roth IRA
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o
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Keogh Plan
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o
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Simplified Employee Pension/Trust (S.E.P.)
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o
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Pension or Profit Sharing Plan (exempt under 401(a))
o
Non-custodial
o
Custodial
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3.
|
Custodian
or Clearing Firm/Platform Information (send all paperwork
directly to the Custodian or Clearing Firm/Platform)
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Name
Street/PO Box
City State Zip
Custodian Tax ID # (provided by Custodian)
Custodial or Clearing Firm/Platform Account #
D-1
C REGISTRATION
INFORMATION (or Trustees if applicable)
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Investor Name
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Co-Investor Name (if applicable)
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Mailing Address
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Mailing Address
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City State Zip
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City State Zip
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Phone Business Phone
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Phone Business Phone
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Email Address
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Email Address
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SSN or Tax
ID Date of Birth
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SSN or Tax
ID Date of Birth
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o
Cole
Employee or Affiliate
|
Street Address (if different from mailing address or mailing
address is a PO Box)
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City State Zip
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Volume
Discounts
I (we) are making, or previously have made, investments in the
following Cole-sponsored programs that are Eligible Programs, as
defined in a Cole REIT Prospectus. (You may include any
investments made by the same purchaser, as defined
in the Prospectus.) This information will help determine whether
volume discounts may be applicable. All holdings are subject to
verification.
Name of Cole
Program Cole
Account
Number SSN
or Tax ID
Name of Cole
Program Cole
Account
Number SSN
or Tax ID
D DISTRIBUTION
INSTRUCTIONS (will default to Address of Record or Custodian or
Clearing Firm/Platform if nothing is marked)
FOR CUSTODIAL OR CLEARING
FIRM/PLATFORM ACCOUNTS:
o
Custodian or Clearing Firm/Platform of Record
o
Reinvest pursuant to Distribution Reinvestment Plan
FOR NON-CUSTODIAL OR NON-CLEARING FIRM/PLATFORM ACCOUNTS:
o
Mail to Address of Record
o
Reinvest pursuant to Distribution Reinvestment Plan
o
Direct Deposit
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o
Checking
o
Savings
|
Financial Institution
|
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Routing/Transit No.
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Account No.
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o
Check if banking information is same as provided in Section A-2
o
Mail to Brokerage Account or Third Party
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Payee Name
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Mailing Address
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Account No.
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City State Zip
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IF YOU ELECT TO PARTICIPATE IN THE DISTRIBUTION REINVESTMENT
PLAN, YOU MUST AGREE THAT IF AT ANY TIME YOU CANNOT MAKE THE
INVESTOR REPRESENTATION AND WARRANTIES SET FORTH IN THE
PROSPECTUS OR THIS INITIAL SUBSCRIPTION AGREEMENT, YOU MUST
PROMPTLY NOTIFY THE APPLICABLE COLE REIT IN WRITING OF THAT
FACT.
By signing this agreement, I authorize the applicable Cole REIT
to deposit distributions into the account specified in
Section D, and to debit that account in the amount of any
distribution deposited in error. If I withdraw deposits made in
error, I authorize the applicable Cole REIT to retain future
distributions until the erroneous deposits are recovered. This
authorization is effective until terminated in writing by either
party.
D-2
E INVESTOR(S)
SIGNATURES (Investor(s) must initial each of
sections 1-4
and any other applicable sections)
I (we) (or, in the case of fiduciary accounts, the person
authorized to sign on my (our) behalf) hereby acknowledge
and/or
represent the following:
For Investors in Either or Both Offerings:
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INVESTOR
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CO-INVESTOR
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1. I (we) have received the final Prospectus, whether over
the Internet, on a CD-ROM, paper copies, or any other delivery
method, relating to the shares of Cole Credit Property
Trust IV, Inc. (CCPT IV) and Cole Corporate Income
Trust, Inc. (CCIT) at least five business days before signing
this Subscription Agreement.
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2. Excluding home, home furnishings and automobiles, I (we)
either: (i) have a net worth of at least $70,000 and had
during the last year or estimate that I (we) will have in the
current year gross income of at least $70,000; or (ii) have
a net worth of at least $250,000. In the case of sales to
fiduciary accounts, the specific requirements shall be met by
the beneficiary, the fiduciary account or by the donor or
grantor who directly or indirectly supplies the funds for the
purchase of the shares.
|
|
|
|
|
3. I am (we are) purchasing the shares for my (our) own
account, or if I am (we are) purchasing shares on behalf of a
trust or other entity of which I am (we are) trustee(s) or
authorized agent(s), I (we) have due authority to execute this
Initial Subscription Agreement and do hereby legally bind the
trust or other entity of which I am (we are) trustee(s) or
authorized agent(s).
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4. I (we) acknowledge that the shares are not liquid.
|
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For Investors in Cole Credit Property Trust IV, Inc.
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INVESTOR
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CO-INVESTOR
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5. For
California
residents: I (we) either: (i) have
a net worth of at least $75,000 and had during the last year or
estimate that I (we) will have in the current year gross income
of at least $75,000; or (ii) have a net worth of at least
$250,000. In addition, my (our) investment in CCPT IV does not
exceed ten percent (10%) of my (our) net worth.
|
|
|
|
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6. For
Iowa and Ohio
residents: My (our) investment
in CCPT IV and its affiliates does not exceed 10% of my (our)
liquid net worth.
|
|
|
|
|
7. For
Kansas
residents: I (we) acknowledge that it
is recommended that I (we) should invest, in the aggregate, no
more than 10% of my (our) liquid net worth in CCPT
IV and the securities of similar direct participation programs.
Liquid Net Worth is that portion of net worth (total
assets minus total liabilities) that consists of cash, cash
equivalents and readily marketable securities.
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8. For
Kentucky, Michigan, and Oregon
residents: My
(our) liquid net worth is at least 10 times my (our) maximum
investment in CCPT IV.
|
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9. For
Maine
residents: My (our) investment in CCPT
IV and its affiliates does not exceed ten percent (10%) of my
(our) net worth.
|
|
|
|
|
10. For
Nebraska
residents: Excluding home,
furnishings and automobiles, I (we) either: (i) have a
minimum net worth of $100,000 and an annual income of $70,000,
or (ii) have a minimum net worth of $350,000. In addition,
my (our) investment in CCPT IV does not exceed 10% of my (our)
net worth.
|
|
|
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11. For
North Dakota
residents: My (our) liquid net
worth is at least 10 times my (our) investment in CCPT IV and
its affiliates.
|
|
For Investors in Cole Corporate Income Trust, Inc.
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|
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INVESTOR
|
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CO-INVESTOR
|
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5. For
California
residents: I (we) either: (i) have
a net worth of at least $75,000 and had during the last year or
estimate that I (we) will have in the current year gross income
of at least $75,000; or (ii) have a net worth of at least
$250,000. In addition, my (our) investment in CCIT does not
exceed ten percent (10%) of my (our) net worth.
|
|
|
|
|
6. For
Iowa and Ohio
residents: My (our) investment
in CCIT and its affiliates does not exceed 10% of my (our)
liquid net worth.
|
|
|
|
|
7. For
Kansas and Massachusetts
residents: I (we)
acknowledge that it is recommended that I (we) should invest, in
the aggregate, no more than 10% of my (our) liquid net
worth (as defined in the Prospectus for Kansas and
Massachusetts investors) in CCIT and the securities of similar
direct participation programs.
|
|
|
|
|
8. For
Kentucky, Michigan, and Oregon
residents: My
(our) liquid net worth is at least 10 times my (our) maximum
investment in CCIT.
|
|
|
|
|
9. For
Maine
residents: I (we) either: (i) have a
net worth of at least $250,000, or (ii) have an annual gross
income of at least $70,000 and a minimum net worth of $70,000.
In addition, my (our) investment in CCIT and its affiliates does
not exceed ten percent (10%) of my (our) net worth.
|
|
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|
10. For
Nebraska
residents: Excluding home,
furnishings and automobiles, I (we) either: (i) have a
minimum net worth of $100,000 and an annual income of $70,000,
or (ii) have a minimum net worth of $350,000. In addition,
my (our) investment in CCIT does not exceed 10% of my (our) net
worth.
|
|
|
|
|
11. For
North Dakota
residents: My (our) liquid net
worth is at least 10 times my (our) investment in CCIT and its
affiliates.
|
o
By
checking here I confirm I would like to go green and no longer
receive in paper any documents that Cole can send to me
electronically. If I decide later that I want to receive
documents in paper, I can contact Cole Investor Services at
1-866-907-2653.
D-3
E INVESTOR(S)
SIGNATURES (continued)
SUBSTITUTE W-9: I HEREBY
CERTIFY
under penalty of
perjury (i) that the taxpayer identification number shown
on this Initial Subscription Agreement is true, correct and
complete, (ii) that I am not subject to backup withholding
either because I have not been notified that I am subject to
backup withholding as a result of a failure to report all
interest or distributions, or the Internal Revenue Service has
notified me that I am no longer subject to backup withholding,
and (iii) I am a U.S. person.
You should not invest in a Cole REIT unless you have read and
understood this agreement and the applicable Prospectuses
referred to above and understand the risks associated with an
investment in the Cole REIT. In deciding to invest in a Cole
REIT, you should rely only on the information contained in the
Prospectuses, and not on any other information or
representations from any other person or source. Each Cole REIT
and each person selling shares of its common stock shall be
responsible for making every reasonable effort to determine that
such purchase of shares is a suitable and appropriate investment
for each investor, based on the information provided by the
prospective investor regarding the investors financial
situation and investment objectives.
Notice is hereby given to each investor that by executing
this agreement you are not waiving any rights you may have under
the Securities Act of 1933, as amended, or any state securities
laws.
|
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|
|
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|
|
|
Investors
Signature Date
|
|
Custodial
Signature Date
|
|
|
|
|
|
|
|
|
|
Co-Investors
Signature Date
|
|
|
F REGISTERED
REPRESENTATIVE (to be completed by selling Registered
Representative)
Name of Registered Representative
Rep ID #
Mailing Address
City State Zip
Phone Email
Address
Name of Broker-Dealer
Rep CRD #
Have you changed firm affiliation (since last purchase)?
o
Yes
o
No
G REGISTERED
INVESTMENT ADVISOR (RIA) REPRESENTATIVE (to be completed by
selling RIA Representative)
Name of RIA Representative
Mailing Address
City State Zip
Phone Email
Address
Have you changed firm affiliation (since last purchase)?
o
Yes
o
No
Name of RIA Firm
SEC Registered
RIA
o
Yes
o
No
State Registered
RIA
o
Yes
o
No
States
Registered
RIA IARD
Name of Clearing Firm
Name of Affiliate Broker Dealer
D-4
H REPRESENTATIVE
SIGNATURES
Based on the information I obtained from the investor regarding
the investors financial situation and investment
objectives, I hereby certify to Cole Capital Corporation, Cole
Holdings Corporation, Cole Credit Property Trust IV, Inc.
and Cole Corporate Income Trust, Inc. that I have reasonable
grounds for believing that the purchase of the shares by the
investor in the respective Cole REIT(s) is a suitable and
appropriate investment for this investor.
Signature of Registered or RIA Representative
Signature of Broker/Dealer or Clearing Firm/Platform
o
I
am completing and signing this application pursuant to a
power-of-attorney
from the investor. I hereby certify that such
power-of-attorney
is legally valid and includes within its scope my completion and
execution of this application on behalf of the investor.
|
|
|
|
|
ONCE COMPLETE, PLEASE
DELIVER THIS FORM TO:
Via Fax:
1.877.616.1118
|
|
Via Regular Mail:
COLE REIT
DST Systems, Inc.
P.O. Box 219312
Kansas City, MO
64121-9312
|
|
Via Overnight/Express Mail:
COLE REIT
DST Systems, Inc.
430 West 7th Street
Kansas City, MO 64105
|
|
|
©
2012
Cole Capital Advisors, Inc. All rights reserved
|
JOINT-AGMT-01 (01-12)
|
D-5
APPENDIX E
DISTRIBUTION
REINVESTMENT PLAN
COLE CREDIT PROPERTY TRUST IV, INC.
EFFECTIVE AS OF JANUARY 20, 2012
Cole Credit Property Trust IV, Inc., a Maryland corporation
(the Company), has adopted this Distribution
Reinvestment Plan (the Plan), to be administered by
the Company or an unaffiliated third party (the
Administrator) as agent for participants in the Plan
(Participants), on the terms and conditions set
forth below.
1.
Election to Participate.
Any holder of
shares of common stock of the Company, par value $.01 per share
(the Shares), and, subject to Section 8(b)
herein, any participant in any previous or subsequent publicly
offered limited partnership, real estate investment trust or
other real estate program sponsored by an affiliate of Cole REIT
Advisors IV, LLC, the Companys advisor (an
Affiliated Program), may become a Participant in the
Plan by making a written election to participate in the Plan on
such purchasers subscription agreement at the time of
subscription for Shares or by completing and executing an
authorization form obtained from the Administrator or any other
appropriate documentation as may be acceptable to the
Administrator. Participants in the Plan generally are required
to have the full amount of their cash distributions (other than
Excluded Distributions as defined below) with
respect to all Shares or shares of stock or units of limited
partnership interest of an Affiliated Program (collectively,
Securities) owned by them reinvested pursuant to the
Plan. However, the Administrator shall have the sole discretion,
upon the request of a Participant, to accommodate a
Participants request for less than all of the
Participants Securities to be subject to participation in
the Plan.
2.
Distribution Reinvestment.
The
Administrator will receive all cash distributions (other than
Excluded Distributions) paid by the Company or an Affiliated
Program with respect to Securities of Participants
(collectively, the Distributions). Participation
will commence with the next Distribution payment after receipt
of the Participants election pursuant to Paragraph 1
hereof, provided it is received on or prior to the last day of
the period to which such Distribution relates. The election will
apply to all Distributions attributable to such period and to
all periods thereafter, unless and until termination of
participation in the Plan, in accordance with Section 9. As
used in this Plan, the term Excluded Distributions
shall mean those cash or other distributions designated as
Excluded Distributions by the Companys board of directors
(the Board) or the board or general partner of an
Affiliated Program, as applicable. A written election to
participate must be received by the Administrator prior to the
last business day of the month, in order to become a Plan
Participant with respect to that months Distributions. If
the period for Distribution payments shall be changed, then this
paragraph shall also be changed, without the need for advance
notice to Participants.
3.
General Terms of Plan Investments.
The Administrator will apply all Distributions subject to this
Plan, as follows:
(a) During the Companys public offering (the
Offering) of Shares pursuant to the Companys
registration statement on
Form S-11
(File No.
333-169533
as amended or supplemented (the Registration
Statement), and until such time as the Board determines a
reasonable estimate of the value of the Shares, the
Administrator will invest Distributions in Shares at a price
equal to $9.50 less the aggregate distributions per Share of any
net sale proceeds from the sale of one or more of the
Companys assets, or other special distributions so
designated by the Board, distributed to stockholders, regardless
of the price per Share paid by the Participant for the Shares in
respect of which the Distributions are paid. On or after the
date the Board determines a reasonable estimate of the value of
the Shares (the Initial Board Valuation) under the
Companys valuation policy, as such valuation policy is
amended from time to time (the Valuation Policy),
the Administrator will invest Distributions in Shares at a price
equal to the most recently disclosed estimated value as
determined in accordance with the Valuation Policy less the
aggregate distributions per Share of any net sale proceeds from
the sale of one or more of the Companys assets, or other
special distributions so designated by the Board, distributed to
stockholders. No advance
E-1
notice of pricing pursuant to this Paragraph 3(a) shall be
required other than to the extent the issue is a material event
requiring the public filing of a
Form 8-K.
(b) After termination of the Registration Statement, the
Administrator will invest Distributions in Shares that are
registered with the Securities and Exchange Commission (the
Commission) pursuant to an effective registration
statement for Shares for use in the Plan (a Future
Registration). No advance notice of pricing pursuant to
this Paragraph 3(b) shall be required other than to the
extent the issue is a material event requiring the public filing
of a Form
8-K.
(c) Selling commissions will not be paid for the Shares
purchased pursuant to the Plan.
(d) Dealer manager fees will not be paid for the Shares
purchased pursuant to the Plan.
(e) For each Participant, the Administrator will maintain
an account which shall reflect for each period in which
Distributions are paid (a Distribution Period) the
Distributions received by the Administrator on behalf of such
Participant. A Participants account shall be reduced as
purchases of Shares are made on behalf of such Participant.
(f) Distributions shall be invested in Shares by the
Administrator promptly following the payment date with respect
to such Distributions to the extent Shares are available for
purchase under the Plan. If sufficient Shares are not available,
any such funds that have not been invested in Shares within
30 days after receipt by the Administrator and, in any
event, by the end of the fiscal quarter in which they are
received, will be distributed to Participants. Any interest
earned on such accounts will be returned to the respective
Participant.
(g) Participants may acquire fractional Shares, computed to
three decimal places, so that 100% of the Distributions will be
used to acquire Shares. The ownership of the Shares shall be
reflected on the books of the Company or its transfer agent.
(h) A Participant will not be able to acquire Shares under
the Plan to the extent that such purchase would cause the
Participant to exceed the ownership limits set forth in the
Companys charter, as amended, unless exempted by the Board.
4.
Absence of Liability.
Neither the
Company nor the Administrator shall have any responsibility or
liability as to the value of the Shares or any change in the
value of the Shares acquired for the Participants account.
Neither the Company nor the Administrator shall be liable for
any act done in good faith, or for any good faith omission to
act hereunder.
5.
Suitability.
Each Participant shall
notify the Administrator in the event that, at any time during
his participation in the Plan, there is any material change in
the Participants financial condition, as compared to
information previously provided to the stockholders broker
or financial advisors, or inaccuracy of any representation under
the subscription agreement for the Participants initial
purchase of Securities. A material change shall include any
anticipated or actual material decrease in net worth or annual
gross income, or any other material change in circumstances that
may be likely to cause the Participant to fail to meet the
minimum income and net worth standards set forth in the
Companys prospectus for the Participants initial
purchase of Shares or cause the Participants broker or
financial advisor to determine that an investment in Shares is
no longer suitable and appropriate for the Participant.
6.
Reports to Participants.
Within ninety
(90) days after the end of each calendar year, the
Administrator will mail to each Participant a statement of
account describing, as to such Participant, the Distributions
received, the number of Shares purchased and the per Share
purchase price for such Shares pursuant to the Plan during the
prior year. Each statement also shall advise the Participant
that, in accordance with Section 5 hereof, the Participant
is required to notify the Administrator in the event there is
any material change in the Participants financial
condition or if any representation made by the Participant under
the subscription agreement for the Participants initial
purchase of Securities becomes inaccurate. Tax information
regarding a Participants participation in the Plan will be
sent to each Participant by the Company or the Administrator at
least annually.
E-2
7.
Taxes.
Taxable Participants may incur
a tax liability for Distributions even though they have elected
not to receive their Distributions in cash but rather to have
their Distributions reinvested in Shares under the Plan.
8.
Reinvestment in Subsequent Programs.
(a) After the termination of the Companys Offering of
Shares pursuant to the Registration Statement, as may be amended
or supplemented, the Company may determine, in its sole
discretion, to cause the Administrator to provide to each
Participant notice of the opportunity to have some or all of
such Participants Distributions (at the discretion of the
Administrator and, if applicable, the Participant) invested
through the Plan in any publicly offered Affiliated Program (a
Subsequent Program). If the Company makes such an
election, Participants may invest Distributions in equity
securities issued by such Subsequent Program through the Plan
only if the following conditions are satisfied:
(i) prior to the time of such reinvestment, the Participant
has received the final prospectus and any supplements thereto
offering interests in the Subsequent Program and such prospectus
allows investment pursuant to a distribution reinvestment plan;
(ii) a registration statement covering the interests in the
Subsequent Program has been declared effective under the
Securities Act of 1933, as amended;
(iii) the offering and sale of such interests are qualified
for sale under the applicable state securities laws;
(iv) the Participant executes the subscription agreement
included with the prospectus for the Subsequent Program; and
(v) the Participant qualifies under applicable investor
suitability standards as contained in the prospectus for the
Subsequent Program.
(b) The Company may determine, in its sole discretion, to
cause the Administrator to allow one or more participants of an
Affiliated Program to become a Participant. If the
Company makes such an election, such Participants may invest
distributions received from the Affiliated Program in Shares
through this Plan, if the following conditions are satisfied:
(i) prior to the time of such reinvestment, the Participant
has received the final prospectus and any supplements thereto
offering interests in the Plan and such prospectus allows
investment pursuant to the Plan;
(ii) a registration statement covering the interests in the
Plan has been declared effective under the Securities Act of
1933, as amended;
(iii) the offering and sale of such interests are qualified
for sale under the applicable state securities laws;
(iv) the Participant executes the subscription agreement
included with the prospectus for the Plan; and
(v) the Participant qualifies under applicable investor
suitability standards as contained in the prospectus for the
Plan.
9.
Termination.
(a) A Participant may terminate or modify his participation
in the Plan at any time by written notice to the Administrator.
To be effective for any Distribution, such notice must be
received by the Administrator on or prior to the last day of the
Distribution Period to which it relates.
(b) As the Distribution Period is presently monthly, a
written election to terminate must be received by the
Administrator prior to the last business day of the month, in
order to terminate participation in the Plan for that month. If
the period for Distribution payments shall be changed, then this
paragraph shall also be changed, without the need for advance
notice to Participants.
E-3
(c) A Participants transfer of Shares will terminate
participation in the Plan with respect to such transferred
Shares as of the first day of the Distribution Period in which
such transfer is effective, unless the transferee of such Shares
in connection with such transfer demonstrates to the
Administrator that such transferee meets the requirements for
participation hereunder and affirmatively elects participation
by delivering an executed authorization form or other instrument
required by the Administrator.
(d) In the event that a Participant requests a redemption
of all of the Participants Shares, the Participant will be
deemed to have given written notice to the Administrator, at the
time the redemption request is submitted, that the Participant
is terminating his or her participation in the Plan, and is
electing to receive all future distributions in cash. This
election will continue in effect even if less than all of the
Participants Shares are redeemed unless the Participant
notifies the Administrator that he or she elects to resume
participation in the Plan.
10.
State Regulatory Restrictions.
The
Administrator is authorized to deny participation in the Plan to
residents of any state or foreign jurisdiction that imposes
restrictions on participation in the Plan that conflict with the
general terms and provisions of this Plan, including, without
limitation, any general prohibition on the payment of
broker-dealer commissions for purchases under the Plan.
11.
Amendment or Termination by Company.
(a) The terms and conditions of this Plan may be amended by
the Company at any time, including but not limited to an
amendment to the Plan to substitute a new Administrator to act
as agent for the Participants, by mailing an appropriate notice
at least ten (10) days prior to the effective date thereof
to each Participant, provided, however, the Company may not
amend the Plan to (a) provide for selling commissions or
dealer manager fees to be paid for shares purchased pursuant to
this Plan or (b) to revoke a Participants right to
terminate or modify his participation in the Plan.
(b) The Administrator may terminate a Participants
individual participation in the Plan and the Company may
terminate the Plan itself, at any time by providing ten
(10) days prior written notice to a Participant, or
to all Participants, as the case may be.
(c) After termination of the Plan or termination of a
Participants participation in the Plan, the Administrator
will send to each Participant a check for the amount of any
Distributions in the Participants account that have not
been invested in Shares. Any future Distributions with respect
to such former Participants Shares made after the
effective date of the termination of the Participants
participation will be sent directly to the former Participant.
12.
Participation by Limited Partners of Cole Corporate
Income Partnership, LP.
For purposes of this
Plan, stockholders shall be deemed to include
limited partners of Cole Corporate Income Operating Partnership,
LP (the Partnership), Participants shall
be deemed to include limited partners of the Partnership that
elect to participate in the Plan, and Distribution,
when used with respect to a limited partner of the Partnership,
shall mean cash distributions on limited partnership interests
held by such limited partner.
13.
Governing Law.
This Plan and the
Participants election to participate in the Plan shall be
governed by the laws of the State of Maryland.
14.
Notice.
Any notice or other
communication required or permitted to be given by any provision
of this Plan shall be in writing and, if to the Administrator,
addressed to Investor Services Department, 2555 East Camelback
Road, Suite 400, Phoenix, Arizona 85016, or such other
address as may be specified by the Administrator by written
notice to all Participants. Notices to a Participant may be
given by letter addressed to the Participant at the
Participants last address of record with the
Administrator. Each Participant shall notify the Administrator
promptly in writing of any changes of address.
E-4
Cole
Credit Property Trust IV, Inc.
Prospectus
Up to 300,000,000 Shares of Common Stock
Offered to the Public
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ALPHABETICAL INDEX
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Page
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Cautionary Note Regarding Forward-Looking Statements
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53
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Conflicts of Interest
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80
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Description of Shares
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118
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Estimated Use of Proceeds
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54
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Experts
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171
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Federal Income Tax Considerations
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141
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Index to Consolidated Balance Sheets
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F-1
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How to Subscribe
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170
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Investment by Tax-Exempt Entities and ERISA Considerations
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158
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Investment Objectives and Policies
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87
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Legal Matters
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171
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Management
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57
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Management Compensation
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72
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Managements Discussion and Analysis of Financial
Conditions and Results of Operations
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104
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Our Operating Partnership Agreement
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137
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Plan of Distribution
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164
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Prior Performance Summary
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109
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Prospectus Summary
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7
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Questions and Answers About This Offering
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1
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Risk Factors
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19
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Stock Ownership
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79
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Suitability Standards
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i
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Summary of Distribution Reinvestment Plan
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133
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Supplemental Sales Material
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171
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Where You Can Find More Information
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171
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Until
,
20
, all dealers that effect transactions in
these securities, whether or not participating in this offering,
may be required to deliver a prospectus. This is in addition to
the obligation of dealers to deliver a prospectus when acting as
a soliciting dealer.
We have not authorized any dealer, salesperson or other
individual to give any information or to make any
representations that are not contained in this prospectus. If
any such information or statements are given or made, you should
not rely upon such information or representation. This
prospectus does not constitute an offer to sell any securities
other than those to which this prospectus relates, or an offer
to sell, or a solicitation of an offer to buy, to any person in
any jurisdiction where such an offer or solicitation would be
unlawful. This prospectus speaks as of the date set forth below.
You should not assume that the delivery of this prospectus or
that any sale made pursuant to this prospectus implies that the
information contained in this prospectus will remain fully
accurate and correct as of any time subsequent to the date of
this prospectus.
Cole
Capital Corporation
,
2012
PART II
INFORMATION
NOT REQUIRED IN THE PROSPECTUS
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Item 30.
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Quantitative
and Qualitative Disclosures about Market Risk
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As a result of our expected use of debt, primarily to acquire
properties, we will be exposed to interest rate changes. Our
interest rate risk management objectives are to limit the impact
of interest rate changes on earnings and cash flow primarily
through a moderate level of overall borrowings. We intend to
manage our ratio of fixed to floating rate debt with the
objective of achieving a mix that we believe is appropriate.
As of the date of this Registration Statement, since our date of
incorporation, we have had no debt.
We do not have any foreign operations or assets. As a result, we
are not exposed to fluctuations in foreign currently rates.
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Item 31.
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Other
Expenses of Issuance and Distribution.
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The following table itemizes the expenses incurred by us in
connection with the issuance and registration of the securities
being registered hereunder, other than the asset-based dealer
manager fee. All amounts shown are estimates except the SEC
registration fee and the FINRA filing fee.
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SEC registration fee
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$
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285,200
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FINRA filing fee
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75,500
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Printing expenses
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2,383,500
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Legal fees and expenses
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1,500,000
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Accounting fees and expenses
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1,500,000
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Blue sky fees and expenses
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805,000
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Due diligence expenses
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700,000
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Literature
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7,356,500
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Advertising and sales expenses
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9,486,382
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Transfer agent and escrow fees
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4,550,000
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Miscellaneous expenses
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381,150
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Total expenses
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$
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29,023,232
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Item 32.
|
Sales
to Special Parties.
|
Our executive officers and directors, as well as officers and
employees of CR IV Advisors and their family members
(including spouses, parents, grandparents, children and
siblings) or other affiliates, may purchase shares offered in
this offering at a discount. The purchase price for such shares
will be $9.10 per share, reflecting the fact that the 7% selling
commission and the 2% dealer manager fee will not be payable in
connection with such sales. The net offering proceeds we receive
will not be affected by such sales of shares at a discount. In
addition, volume discounts are permitted as set forth in the
Plan of Distribution section of the prospectus.
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Item 33.
|
Recent
Sales of Unregistered Securities.
|
On August 11, 2010, Cole Holdings Corporation purchased
20,000 shares of our common stock for total cash
consideration of $200,000 to provide our initial capitalization.
The issuance of such shares was effected and the purchase of
such shares will be effected in reliance upon an exemption from
registration provided by Section 4(2) under the Securities
Act of 1933, as amended (the Securities Act).
II-1
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Item 34.
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Indemnification
of the Officers and Directors
|
The Maryland General Corporation Law, as amended (the MGCL),
permits a Maryland corporation to include in its charter a
provision limiting the liability of its directors and officers
to the corporation and its stockholders for money damages except
for liability resulting from (a) actual receipt of an
improper benefit or profit in money, property or services or
(b) active and deliberate dishonesty established by a final
judgment as being material to the cause of action. Our charter
contains a provision that eliminates directors and
officers liability for money damages to the maximum extent
permitted by Maryland law, provided that certain conditions are
met, and subject to the NASAA REIT Guidelines.
The MGCL requires a Maryland corporation (unless its charter
provides otherwise, which our charter does not) to indemnify a
director or officer who has been successful, on the merits or
otherwise, in the defense of any proceeding to which he or she
is made a party by reason of his service in that capacity. The
MGCL permits a Maryland corporation to indemnify its present and
former directors and officers, among others, against judgments,
penalties, fines, settlements and reasonable expenses actually
incurred by them in connection with any proceeding to which they
may be made a party by reason of their service in those or other
capacities unless it is established that (a) the act or
omission of the director or officer was material to the matter
giving rise to the proceeding and (i) was committed in bad
faith or (ii) was the result of active and deliberate
dishonesty, (b) the director or officer actually received
an improper personal benefit in money, property or services or
(c) in the case of any criminal proceeding, the director or
officer had reasonable cause to believe that the act or omission
was unlawful. However, under the MGCL a Maryland corporation may
not indemnify for an adverse judgment in a suit by or in the
right of the corporation or for a judgment of liability on the
basis that personal benefit was improperly received, unless in
either case a court orders indemnification and then only for
expenses. In addition, the MGCL permits a corporation to advance
reasonable expenses to a director or officer upon the
corporations receipt of (a) a written affirmation by
the director or officer of his good faith belief that he or she
has met the standard of conduct necessary for indemnification
and (b) a written undertaking by or on his behalf to repay
the amount paid or reimbursed if it shall ultimately be
determined that the standard of conduct was not met. It is the
position of the Securities and Exchange Commission that
indemnification of directors and officers for liabilities
arising under the Securities Act is against public policy and is
unenforceable pursuant to Section 14 of the Securities Act.
Our charter provides that we shall indemnify and hold harmless a
director, officer, advisor or affiliate against any and all
losses or liabilities reasonably incurred by such director,
officer, advisor or affiliate in connection with or by reason of
any act or omission performed or omitted to be performed on our
behalf in such capacity. We may, with the approval of our board
of directors or any duly authorized committee thereof, provide
such indemnification to our employees and agents, subject to the
limitations of Maryland law and the NASAA REIT Guidelines.
However, under our charter, we shall not indemnify the
directors, officers, employees, agents, advisor or any affiliate
for any liability or loss suffered by the directors, officers,
employees, agents, advisors or affiliates, nor shall we provide
that the directors, officers, employees, agents, advisors or
affiliates be held harmless for any loss or liability suffered
by us, unless all of the following conditions are met:
(i) the directors, our advisor or its affiliates have
determined, in good faith, that the course of conduct which
caused the loss or liability was in our best interests;
(ii) the directors, our advisor or its affiliates were
acting on our behalf or performing services for us;
(iii) such liability or loss was not the result of
(A) negligence or misconduct by the non- independent
directors, our advisor or its affiliates; or (B) gross
negligence or willful misconduct by the independent directors;
and (iv) such indemnification or agreement to hold harmless
is recoverable only out of our net assets and not from
stockholders. Notwithstanding the foregoing, the directors, our
advisor or its affiliates and any persons acting as a
broker-dealer shall not be indemnified by us for any losses,
liability or expenses arising from or out of an alleged
violation of federal or state securities laws by such party
unless one or more of the following conditions are met:
(i) there has been a successful adjudication on the merits
of each count involving alleged securities law violations as to
the particular indemnitee; (ii) such claims have been
dismissed with prejudice on the merits by a court of competent
jurisdiction as to the particular indemnitee; and (iii) a
court of competent jurisdiction approves a settlement of the
claims against a particular indemnitee and finds that
indemnification of the settlement and the related costs should
be made, and the court
II-2
considering the request for indemnification has been advised of
the position of the Securities and Exchange Commission and of
the published position of any state securities regulatory
authority in which our securities were offered or sold as to
indemnification for violations of securities laws.
Our charter provides that the advancement of funds to our
directors, our advisor or our advisors affiliates for
legal expenses and other costs incurred as a result of any legal
action for which indemnification is being sought is permissible
only if all of the following conditions are satisfied:
(i) the legal action relates to acts or omissions with
respect to the performance of duties or services on our behalf;
(ii) our directors, our advisor or our advisors affiliates
provide us with written affirmation of their good faith belief
that they have met the standard of conduct necessary for
indemnification; (iii) the legal action is initiated by a
third party who is not a stockholder, or if the legal action is
initiated by a stockholder acting in his or her capacity as
such, a court of competent jurisdiction approves such
advancement; and (iv) our directors, our advisor or our
advisors affiliates agree in writing to repay the advanced
funds to us together with the applicable legal rate of interest
thereon, in cases in which such persons are found not to be
entitled to indemnification.
We intend to purchase and maintain insurance on behalf of all of
our directors and executive officers against liability asserted
against or incurred by them in their official capacities with
us, whether or not we are required or have the power to
indemnify them against the same liability.
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Item 35.
|
Treatment
of Proceeds from Shares Being Registered.
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Not applicable.
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Item 36.
|
Financial
Statements and Exhibits.
|
(a)
Financial Statements.
See
page F-1
for an index of the financial statements included in the
registration statement.
(b)
Exhibits.
See the Exhibit Index on the page immediately preceding the
exhibits for a list of exhibits filed as part of this
registration statement on
Form S-11,
which Exhibit Index is incorporated herein by reference.
1. The undersigned registrant hereby undertakes:
(a) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by
section 10(a)(3) of the Securities Act.
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of
prospectus filed with the SEC pursuant to Rule 424(b) if,
in the aggregate, the changes in volume and price represent no
more than a 20% change in the maximum aggregate offering price
set forth in the Calculation of Registration Fee
table in the effective registration statement.
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement.
(b) That, for the purpose of determining any liability
under the Securities Act, each such post-effective amendment
will be deemed to be a new registration statement relating to
the securities offered
II-3
therein, and the offering of such securities at that time will
be deemed to be the initial bona fide offering thereof.
(c) To remove from registration by means of a
post-effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
(d) That all post-effective amendments will comply with the
applicable forms, rules and regulations of the SEC in effect at
the time such post-effective amendments are filed.
(e) That, for the purpose of determining liability under
the Securities Act to any purchaser, each prospectus filed
pursuant to Rule 424(b) as part of the registration
statement relating to the offering, other than a registration
statement relying on Rule 430B or other than a prospectus
filed in reliance on Rule 430A, shall be deemed to be part
of and included in the registration statement as of the date it
is first used after effectiveness. Provided, however, that no
statement made in a registration statement or prospectus that is
part of the registration statement or made in a document
incorporated or deemed incorporated by reference into the
registration statement or prospectus that is part of the
registration statement will, as to a purchaser with a time of
contract of sale prior to such first use, supersede or modify
any statement that was made in the registration statement or
prospectus that was part of the registration statement or made
in any such document immediately prior to such date of first use.
(f) That, for the purpose of determining liability of the
registrant under the Securities Act to any purchaser in the
initial distribution of the securities, the undersigned
registrant undertakes that in a primary offering of securities
pursuant to this registration statement, regardless of the
underwriting method used to sell the securities to the
purchaser, if the securities are offered or sold to such
purchaser by means of any of the following communications, the
undersigned registrant will be a seller to the purchaser and
will be considered to offer or sell such securities to such
purchaser:
(i) any preliminary prospectus or prospectus of the
registrant relating to the offering required to be filed
pursuant to Rule 424;
(ii) any free writing prospectus relating to the offering
prepared by or on behalf of the registrant or used or referred
to by the registrant;
(iii) the portion of any other free writing prospectus
relating to the offering containing material information about
the registrant or its securities provided by or on behalf of the
registrant; and
(iv) any other communication that is an offer in the
offering made by the registrant to the purchaser.
2. The registrant undertakes to send to each stockholder,
at least on an annual basis, a detailed statement of any
transactions with the advisor or its affiliates, and of fees,
commissions, compensation and other benefits paid or accrued to
the advisor or its affiliates for the fiscal year completed,
showing the amount paid or accrued to each recipient and the
services performed.
3. The registrant undertakes to provide to the stockholders
the financial statements required by
Form 10-K
for the first full fiscal year of operations of the registrant.
4. The registrant undertakes to file a sticker supplement
pursuant to Rule 424(c) under the Securities Act during the
distribution period describing each property not identified in
the prospectus at such time as there arises a reasonable
probability that such property will be acquired and to
consolidate all such stickers into a post-effective amendment
filed at least once every three months, with the information
contained in such amendment provided simultaneously to the
existing stockholders. Each sticker supplement will disclose all
compensation and fees received by the advisor and its affiliates
in connection with any such acquisition. The post-effective
amendment will include audited financial statements meeting the
requirements
Rule 3-14
of
Regulation S-X
only for properties acquired during the distribution period.
5. The registrant undertakes to file, after the end of the
distribution period, a current report on
Form 8-K
containing the financial statements and additional information
required by
Rule 3-14
of
Regulation S-X,
to reflect each commitment (i.e., the signing of a binding
purchase agreement) made after the end of the
II-4
distribution period involving the use of 10% or more (on a
cumulative basis) of the net proceeds of the offering and to
provide the information contained in such report to the
stockholders at least once each quarter after the distribution
period of the offering has ended.
6. Insofar as indemnification for liabilities arising under
the Securities Act may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions and otherwise, the registrant has been advised that
in the opinion of the SEC such indemnification is against public
policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with
securities being registered, the registrant will, unless in the
opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and
will be governed by the final adjudication of such issue.
II-5
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS (UNAUDITED)
Table VI presents summary information on properties acquired in
the three years ended December 31, 2010 by Prior Real
Estate Programs with similar investment objectives to us. This
table provides information regarding the general type and
location of the properties and the manner in which the
properties were acquired.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Tractor Supply
Rome, NY
Specialty Retail
|
|
|
|
HH Gregg
Greensboro, NC
Consumer Electronics
|
|
|
|
Starbucks
Altus, OK
Restaurant
|
|
Gross leasable square footage
|
|
|
19,097
|
|
|
|
30,167
|
|
|
|
1,741
|
|
Date of purchase
|
|
|
01/04/08
|
|
|
|
01/11/08
|
|
|
|
01/16/08
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
3,213,000
|
|
|
|
6,936,000
|
|
|
|
1,195,862
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
3,213,000
|
|
|
|
6,936,000
|
|
|
|
1,195,862
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
36,291
|
|
|
|
25,101
|
|
|
|
17,473
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
3,249,291
|
|
|
$
|
6,961,101
|
|
|
$
|
1,213,335
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Milford Commons
Milford, NH
Shopping Center
|
|
|
|
CarMax Greenville,
SC Automotive
Dealership
|
|
|
|
Bank of America
Delray Beach, FL
Bank
|
|
Gross leasable square footage
|
|
|
78,430
|
|
|
|
46,535
|
|
|
|
54,254
|
|
Date of purchase
|
|
|
01/17/08
|
|
|
|
01/25/08
|
|
|
|
01/31/08
|
|
Mortgage financing at date of purchase
|
|
$
|
5,816,924
|
|
|
$
|
15,125,000
|
|
|
$
|
10,632,014
|
|
Cash down payment
|
|
|
2,292,076
|
|
|
|
7,315,000
|
|
|
|
4,667,986
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
8,109,000
|
|
|
|
22,440,000
|
|
|
|
15,300,000
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
97,029
|
|
|
|
47,000
|
|
|
|
240,104
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
8,206,029
|
|
|
$
|
22,487,000
|
|
|
$
|
15,540,104
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-6
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Arbys
New Castle, PA
Restaurant
|
|
|
|
Mustang Engineering
Houston, TX
Office
|
|
|
|
Circuit City
Kennesaw, GA
Consumer Electronics
|
|
Gross leasable square footage
|
|
|
3,283
|
|
|
|
136,954
|
|
|
|
182,035
|
|
Date of purchase
|
|
|
01/31/08
|
|
|
|
01/31/08
|
|
|
|
01/31/08
|
|
Mortgage financing at date of purchase
|
|
$
|
1,063,201
|
|
|
$
|
13,467,218
|
|
|
$
|
14,176,019
|
|
Cash down payment
|
|
|
487,199
|
|
|
|
5,912,782
|
|
|
|
6,060,781
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
1,550,400
|
|
|
|
19,380,000
|
|
|
|
20,236,800
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
41,196
|
|
|
|
163,269
|
|
|
|
140,168
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
1,591,596
|
|
|
$
|
19,543,269
|
|
|
$
|
20,376,968
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole
|
|
|
Cole
|
|
|
Cole
|
|
|
|
Credit Property
|
|
|
Credit Property
|
|
|
Credit Property
|
|
Program:
|
|
Trust II, Inc.
|
|
|
Trust II, Inc.
|
|
|
Trust II, Inc.
|
|
|
Name, location, type of property
|
|
|
CarMax
Raleigh, NC
Automotive
Dealership
|
|
|
|
Office Depot
Alcoa, TN
Office Supply
|
|
|
|
CarMax
Pineville, NC
Automotive
Dealership
|
|
Gross leasable square footage
|
|
|
57,010
|
|
|
|
26,850
|
|
|
|
16,375
|
|
Date of purchase
|
|
|
01/31/08
|
|
|
|
01/31/08
|
|
|
|
01/31/08
|
|
Mortgage financing at date of purchase
|
|
$
|
6,520,969
|
|
|
$
|
2,888,364
|
|
|
$
|
7,017,129
|
|
Cash down payment
|
|
|
2,806,931
|
|
|
|
842,796
|
|
|
|
3,068,631
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
9,327,900
|
|
|
|
3,731,160
|
|
|
|
10,085,760
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
85,562
|
|
|
|
50,844
|
|
|
|
84,739
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
9,413,462
|
|
|
$
|
3,782,004
|
|
|
$
|
10,170,499
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole
|
|
|
Cole
|
|
|
Cole
|
|
|
|
Credit Property
|
|
|
Credit Property
|
|
|
Credit Property
|
|
Program:
|
|
Trust II, Inc.
|
|
|
Trust II, Inc.
|
|
|
Trust II, Inc.
|
|
|
Name, location, type of property
|
|
|
FedEx
Mishawaka, IN
Distribution Center
|
|
|
|
Best Buy
Wichita, KS
Consumer Electronics
|
|
|
|
Boscovs
Voorhees, NJ
Department Store
|
|
Gross leasable square footage
|
|
|
54,804
|
|
|
|
66,756
|
|
|
|
173,767
|
|
Date of purchase
|
|
|
02/06/08
|
|
|
|
02/06/08
|
|
|
|
02/06/08
|
|
Mortgage financing at date of purchase
|
|
$
|
2,799,764
|
|
|
$
|
8,080,331
|
|
|
$
|
3,189,604
|
|
Cash down payment
|
|
|
1,210,876
|
|
|
|
3,467,089
|
|
|
|
982,196
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
4,010,640
|
|
|
|
11,547,420
|
|
|
|
4,171,800
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
40,541
|
|
|
|
111,473
|
|
|
|
101,795
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
4,051,181
|
|
|
$
|
11,658,893
|
|
|
$
|
4,273,595
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-7
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole
|
|
|
Cole
|
|
|
Cole
|
|
|
|
Credit Property
|
|
|
Credit Property
|
|
|
Credit Property
|
|
Program:
|
|
Trust II, Inc.
|
|
|
Trust II, Inc.
|
|
|
Trust II, Inc.
|
|
|
Name, location, type of property
|
|
|
Bridgestone /
Firestone
Atlanta, GA
Automotive Parts
|
|
|
|
Academy Sports
Lufkin, TX
Sporting Goods
|
|
|
|
Marsh Supermarkets
Indianapolis, IN
Grocery
|
|
Gross leasable square footage
|
|
|
10,325
|
|
|
|
60,750
|
|
|
|
65,000
|
|
Date of purchase
|
|
|
02/06/08
|
|
|
|
02/06/08
|
|
|
|
02/06/08
|
|
Mortgage financing at date of purchase
|
|
$
|
1,754,282
|
|
|
$
|
3,685,765
|
|
|
$
|
10,242,174
|
|
Cash down payment
|
|
|
726,358
|
|
|
|
1,618,235
|
|
|
|
4,360,146
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
2,480,640
|
|
|
|
5,304,000
|
|
|
|
14,602,320
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
29,749
|
|
|
|
57,877
|
|
|
|
97,290
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
2,510,389
|
|
|
$
|
5,361,877
|
|
|
$
|
14,699,610
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
CVS
Indianapolis, IN
Drugstore
|
|
|
|
Hilltop Plaza
Bridgeton, MO
Shopping Center
|
|
|
|
Starbucks
Stillwater, OK
Restaurant
|
|
Gross leasable square footage
|
|
|
10,880
|
|
|
|
302,921
|
|
|
|
1,850
|
|
Date of purchase
|
|
|
02/06/08
|
|
|
|
02/06/08
|
|
|
|
02/28/08
|
|
Mortgage financing at date of purchase
|
|
$
|
2,675,724
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
1,088,076
|
|
|
|
23,658,900
|
|
|
|
1,329,517
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
3,763,800
|
|
|
|
23,658,900
|
|
|
|
1,329,517
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
37,575
|
|
|
|
40,446
|
|
|
|
18,850
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
3,801,375
|
|
|
$
|
23,699,346
|
|
|
$
|
1,348,367
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Walgreens(1)
Oneida, TN
Drugstore
|
|
|
|
Starbucks
Memphis, TN
Restaurant
|
|
|
|
Starbucks
Ponca City, OK
Restaurant
|
|
Gross leasable square footage
|
|
|
14,820
|
|
|
|
1,853
|
|
|
|
1,750
|
|
Date of purchase
|
|
|
02/29/08
|
|
|
|
03/04/08
|
|
|
|
03/11/08
|
|
Mortgage financing at date of purchase
|
|
$
|
3,800,000
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
1,222,901
|
|
|
|
1,394,340
|
|
|
|
1,082,988
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
5,022,901
|
|
|
|
1,394,340
|
|
|
|
1,082,988
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
146,858
|
|
|
|
29,221
|
|
|
|
19,939
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
5,169,759
|
|
|
$
|
1,423,561
|
|
|
$
|
1,102,927
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-8
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Starbucks
Kingsport, TN
Restaurant
|
|
|
|
Pep Boys
El Centro, CA
Automotive Parts
|
|
|
|
Pep Boys
Lakeland, FL
Automotive Parts
|
|
Gross leasable square footage
|
|
|
1,850
|
|
|
|
18,196
|
|
|
|
20,747
|
|
Date of purchase
|
|
|
03/25/08
|
|
|
|
03/25/08
|
|
|
|
03/25/08
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
1,354,560
|
|
|
|
2,474,520
|
|
|
|
2,771,340
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
1,354,560
|
|
|
|
2,474,520
|
|
|
|
2,771,340
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
27,139
|
|
|
|
12,505
|
|
|
|
13,605
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
1,381,699
|
|
|
$
|
2,487,025
|
|
|
$
|
2,784,945
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Pep Boys
Tamarac, FL
Automotive Parts
|
|
|
|
Pep Boys
Clarksville, IN
Automotive Parts
|
|
|
|
Pep Boys
Frederick, MD
Automotive Parts
|
|
Gross leasable square footage
|
|
|
18,020
|
|
|
|
22,211
|
|
|
|
17,690
|
|
Date of purchase
|
|
|
03/25/08
|
|
|
|
03/25/08
|
|
|
|
03/25/08
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
4,166,700
|
|
|
|
2,567,340
|
|
|
|
4,811,340
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
4,166,700
|
|
|
|
2,567,340
|
|
|
|
4,811,340
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
19,135
|
|
|
|
15,984
|
|
|
|
21,064
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
4,185,835
|
|
|
$
|
2,583,324
|
|
|
$
|
4,832,404
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Pep Boys
West Warwick, RI
Automotive Parts
|
|
|
|
Pep Boys
Pasadena, TX
Automotive Parts
|
|
|
|
Pep Boys
Orem, UT
Automotive Parts
|
|
Gross leasable square footage
|
|
|
22,211
|
|
|
|
22,341
|
|
|
|
21,770
|
|
Date of purchase
|
|
|
03/25/08
|
|
|
|
03/25/08
|
|
|
|
03/25/08
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
3,776,040
|
|
|
|
5,046,960
|
|
|
|
3,149,760
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus
acquisition fee
|
|
|
3,776,040
|
|
|
|
5,046,960
|
|
|
|
3,149,760
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
17,951
|
|
|
|
62,959
|
|
|
|
(24,491
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
3,793,991
|
|
|
$
|
5,109,919
|
|
|
$
|
3,125,269
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-9
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Pep Boys
Hampton, VA
Automotive Parts
|
|
|
|
Pep Boys
Redlands, CA
Automotive Parts
|
|
|
|
Pep Boys
El Paso, CO
Automotive Parts
|
|
Gross leasable square footage
|
|
|
22,211
|
|
|
|
22,290
|
|
|
|
22,211
|
|
Date of purchase
|
|
|
03/25/08
|
|
|
|
03/25/08
|
|
|
|
03/25/08
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
4,077,960
|
|
|
|
4,712,400
|
|
|
|
2,718,300
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
4,077,960
|
|
|
|
4,712,400
|
|
|
|
2,718,300
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
18,157
|
|
|
|
20,439
|
|
|
|
12,232
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
4,096,117
|
|
|
$
|
4,732,839
|
|
|
$
|
2,730,532
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Pep Boys
Tampa, FL
Automotive Parts
|
|
|
|
Pep Boys
Fort Myers, FL
Automotive Parts
|
|
|
|
Pep Boys
Arlington Heights, IL
Automotive Parts
|
|
Gross leasable square footage
|
|
|
22,356
|
|
|
|
22,225
|
|
|
|
20,464
|
|
Date of purchase
|
|
|
03/25/08
|
|
|
|
03/25/08
|
|
|
|
03/25/08
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
1,963,500
|
|
|
|
3,108,960
|
|
|
|
6,261,780
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
1,963,500
|
|
|
|
3,108,960
|
|
|
|
6,261,780
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
10,017
|
|
|
|
14,328
|
|
|
|
25,570
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
1,973,517
|
|
|
$
|
3,123,288
|
|
|
$
|
6,287,350
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Pep Boys
Nashua, NH
Automotive Parts
|
|
|
|
Pep Boys
Albuquerque, NM
Automotive Parts
|
|
|
|
Pep Boys
New Hartford, NY
Automotive Parts
|
|
Gross leasable square footage
|
|
|
19,300
|
|
|
|
21,768
|
|
|
|
22,211
|
|
Date of purchase
|
|
|
03/25/08
|
|
|
|
03/25/08
|
|
|
|
03/25/08
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
4,462,500
|
|
|
|
3,848,460
|
|
|
|
2,416,380
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
4,462,500
|
|
|
|
3,848,460
|
|
|
|
2,416,380
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
18,798
|
|
|
|
19,065
|
|
|
|
11,095
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
4,481,298
|
|
|
$
|
3,867,525
|
|
|
$
|
2,427,475
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-10
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Pep Boys
San Antonio, TX
Automotive Parts
|
|
|
|
Walgreens
Batesville, MS
Drugstore
|
|
|
|
Tractor Supply
Clovis, NM
Specialty Retail
|
|
Gross leasable square footage
|
|
|
22,373
|
|
|
|
14,250
|
|
|
|
19,097
|
|
Date of purchase
|
|
|
03/25/08
|
|
|
|
03/31/08
|
|
|
|
04/07/08
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
2,509,200
|
|
|
|
5,427,420
|
|
|
|
3,121,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
2,509,200
|
|
|
|
5,427,420
|
|
|
|
3,121,200
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
11,445
|
|
|
|
31,609
|
|
|
|
26,120
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
2,520,645
|
|
|
$
|
5,459,029
|
|
|
$
|
3,147,320
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
BJs Wholesale Club
Haverhill, MA
Warehouse
|
|
|
|
Walgreens
Elmira, NY
Drugstore
|
|
|
|
Tractor Supply
Carroll, OH
Specialty Retail
|
|
Gross leasable square footage
|
|
|
119,598
|
|
|
|
14,820
|
|
|
|
40,700
|
|
Date of purchase
|
|
|
04/14/08
|
|
|
|
05/01/08
|
|
|
|
05/08/08
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
19,788,000
|
|
|
|
6,197,520
|
|
|
|
2,040,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
19,788,000
|
|
|
|
6,197,520
|
|
|
|
2,040,000
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
52,683
|
|
|
|
37,837
|
|
|
|
30,879
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
19,840,683
|
|
|
$
|
6,235,357
|
|
|
$
|
2,070,879
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
CVS
Onley, VA
Drugstore
|
|
|
|
Walgreens
Hibbing, MN
Drugstore
|
|
|
|
Allstate
Yuma, AZ
Office
|
|
Gross leasable square footage
|
|
|
13,225
|
|
|
|
14,820
|
|
|
|
28,800
|
|
Date of purchase
|
|
|
05/08/08
|
|
|
|
05/14/08
|
|
|
|
05/22/08
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
5,595,720
|
|
|
|
4,284,000
|
|
|
|
7,840,137
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
5,595,720
|
|
|
|
4,284,000
|
|
|
|
7,840,137
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
18,725
|
|
|
|
25,881
|
|
|
|
38,569
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
5,614,445
|
|
|
$
|
4,309,881
|
|
|
$
|
7,878,706
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-11
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Walgreens
Essex, MD
Drugstore
|
|
|
|
Convergys
Las Cruces, NM
Office
|
|
|
|
Walgreens
Bath, NY
Drugstore
|
|
Gross leasable square footage
|
|
|
14,820
|
|
|
|
45,761
|
|
|
|
12,222
|
|
Date of purchase
|
|
|
05/30/08
|
|
|
|
06/02/08
|
|
|
|
06/02/08
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
6,617,760
|
|
|
|
8,273,485
|
|
|
|
4,320,726
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
6,617,760
|
|
|
|
8,273,485
|
|
|
|
4,320,726
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
41,097
|
|
|
|
55,078
|
|
|
|
31,798
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
6,658,857
|
|
|
$
|
8,328,563
|
|
|
$
|
4,352,524
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Walgreens
Chino Valley, AZ
Drugstore
|
|
|
|
III Forks
Dallas, TX
Restaurant
|
|
|
|
Kohls
Grand Forks, ND
Department Store
|
|
Gross leasable square footage
|
|
|
14,820
|
|
|
|
21,145
|
|
|
|
68,725
|
|
Date of purchase
|
|
|
06/02/08
|
|
|
|
06/05/08
|
|
|
|
06/11/08
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
5,543,700
|
|
|
|
11,220,000
|
|
|
|
8,695,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
5,543,700
|
|
|
|
11,220,000
|
|
|
|
8,695,500
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
24,526
|
|
|
|
51,821
|
|
|
|
22,385
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
5,568,226
|
|
|
$
|
11,271,821
|
|
|
$
|
8,717,885
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Walgreens
Albany, GA
Drugstore
|
|
|
|
Coral Walk
Cape Coral, FL
Shopping Center
|
|
|
|
LA Fitness
Brooklyn Park, MN
Fitness
|
|
Gross leasable square footage
|
|
|
14,820
|
|
|
|
94,817
|
|
|
|
45,000
|
|
Date of purchase
|
|
|
06/11/08
|
|
|
|
06/12/08
|
|
|
|
06/17/08
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
4,692,000
|
|
|
|
27,540,000
|
|
|
|
10,659,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
4,692,000
|
|
|
|
27,540,000
|
|
|
|
10,659,000
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
27,220
|
|
|
|
2,397,962
|
|
|
|
24,728
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
4,719,220
|
|
|
$
|
29,937,962
|
|
|
$
|
10,683,728
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-12
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Market Pointe
Papillion, NE
Shopping Center
|
|
|
|
Petsmart
McCarran, NV
Specialty Retail
|
|
|
|
Cumming Town Center
Cumming, GA
Shopping Center
|
|
Gross leasable square footage
|
|
|
254,125
|
|
|
|
870,720
|
|
|
|
310,192
|
|
Date of purchase
|
|
|
06/20/08
|
|
|
|
07/02/08
|
|
|
|
07/11/08
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
26,010,000
|
|
|
|
52,555,500
|
|
|
|
59,548,929
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
26,010,000
|
|
|
|
52,555,500
|
|
|
|
59,548,929
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
83,527
|
|
|
|
351,110
|
|
|
|
5,724,660
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
26,093,527
|
|
|
$
|
52,906,610
|
|
|
$
|
65,273,589
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Walgreens
Rome, NY
Drugstore
|
|
|
|
LA Fitness
Matteson, IL
Fitness
|
|
|
|
Walgreens Columbus, MS Drugstore
|
|
Gross leasable square footage
|
|
|
13,770
|
|
|
|
45,000
|
|
|
|
14,450
|
|
Date of purchase
|
|
|
07/15/08
|
|
|
|
07/16/08
|
|
|
|
07/24/08
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
4,567,282
|
|
|
|
10,290,780
|
|
|
|
4,508,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
4,567,282
|
|
|
|
10,290,780
|
|
|
|
4,508,400
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
37,016
|
|
|
|
24,201
|
|
|
|
22,652
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
4,604,298
|
|
|
$
|
10,314,981
|
|
|
$
|
4,531,052
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Weston Shops Weston, FL
Shopping Center
|
|
|
|
LA Fitness Greenwood, IN
Fitness
|
|
|
|
JoAnns Fabric
Alpharetta, GA
Specialty Retail
|
|
Gross leasable square footage
|
|
|
30,420
|
|
|
|
45,000
|
|
|
|
38,418
|
|
Date of purchase
|
|
|
07/30/08
|
|
|
|
08/05/08
|
|
|
|
08/05/08
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
16,728,000
|
|
|
|
10,817,100
|
|
|
|
6,569,820
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
16,728,000
|
|
|
|
10,817,100
|
|
|
|
6,569,820
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
58,772
|
|
|
|
19,587
|
|
|
|
30,176
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
16,786,772
|
|
|
$
|
10,836,687
|
|
|
$
|
6,599,996
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-13
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Petsmart
Chattanooga, TN
Specialty Retail
|
|
|
|
Petsmart Daytona
Beach, FL
Specialty Retail
|
|
|
|
Petsmart
Fredericksburg, VA
Specialty Retail
|
|
Gross leasable square footage
|
|
|
26,040
|
|
|
|
26,194
|
|
|
|
26,051
|
|
Date of purchase
|
|
|
08/05/08
|
|
|
|
08/05/08
|
|
|
|
08/05/08
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
4,911,300
|
|
|
|
5,439,660
|
|
|
|
5,302,980
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
4,911,300
|
|
|
|
5,439,660
|
|
|
|
5,302,980
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
33,209
|
|
|
|
28,342
|
|
|
|
27,755
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
4,944,509
|
|
|
$
|
5,468,002
|
|
|
$
|
5,330,735
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Ferguson
Enterprises
Shallotte, NC
Specialty Retail
|
|
|
|
Ferguson
Enterprises
Salisbury, MD
Specialty Retail
|
|
|
|
Ferguson
Enterprises
Powhatan, VA
Specialty Retail
|
|
Gross leasable square footage
|
|
|
17,234
|
|
|
|
97,912
|
|
|
|
48,131
|
|
Date of purchase
|
|
|
08/21/08
|
|
|
|
08/21/08
|
|
|
|
08/21/08
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
2,541,551
|
|
|
|
10,997,986
|
|
|
|
7,529,534
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
2,541,551
|
|
|
|
10,997,986
|
|
|
|
7,529,534
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
29,635
|
|
|
|
119,536
|
|
|
|
74,475
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
2,571,186
|
|
|
$
|
11,117,522
|
|
|
$
|
7,604,009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Ferguson
Enterprises
Ocala, FL
Specialty Retail
|
|
|
|
Ferguson
Enterprises
Front Royal, VA
Specialty Retail
|
|
|
|
Ferguson
Enterprises
Cohasset, MN
Specialty Retail
|
|
Gross leasable square footage
|
|
|
55,321
|
|
|
|
764,000
|
|
|
|
14,300
|
|
Date of purchase
|
|
|
08/21/08
|
|
|
|
08/21/08
|
|
|
|
08/21/08
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
7,113,824
|
|
|
|
45,305,275
|
|
|
|
1,501,525
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
7,113,824
|
|
|
|
45,305,275
|
|
|
|
1,501,525
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
39,611
|
|
|
|
281,253
|
|
|
|
28,638
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
7,153,435
|
|
|
$
|
45,586,528
|
|
|
$
|
1,530,163
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-14
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Cole Credit Property
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Trust II, Inc.
|
|
|
Name, location, type of property
|
|
|
Ferguson Enterprises
Auburn, AL
Specialty Retail
|
|
|
|
Ferguson Enterprises
Charlotte, NC
Specialty Retail
|
|
|
|
Home Depot
Lakewood, CO
Home Improvement
|
|
Gross leasable square footage
|
|
|
15,000
|
|
|
|
99,945
|
|
|
|
102,000
|
|
Date of purchase
|
|
|
08/21/08
|
|
|
|
08/21/08
|
|
|
|
08/27/08
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
8,034,632
|
|
Cash down payment
|
|
|
2,329,039
|
|
|
|
11,210,380
|
|
|
|
3,491,368
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
2,329,039
|
|
|
|
11,210,380
|
|
|
|
11,526,000
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
33,040
|
|
|
|
35,761
|
|
|
|
33,433
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
2,362,079
|
|
|
$
|
11,246,141
|
|
|
$
|
11,559,433
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Walgreens
Mobile, AL
Drugstore
|
|
|
|
Aarons Rents
Alamogordo, NM
Specialty Retail
|
|
|
|
Aarons Rents
Anderson, SC
Specialty Retail
|
|
Gross leasable square footage
|
|
|
13,360
|
|
|
|
8,006
|
|
|
|
9,475
|
|
Date of purchase
|
|
|
08/28/08
|
|
|
|
09/15/08
|
|
|
|
09/15/08
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
5,523,300
|
|
|
|
880,584
|
|
|
|
1,145,665
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
5,523,300
|
|
|
|
880,584
|
|
|
|
1,145,665
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
30,395
|
|
|
|
28,166
|
|
|
|
29,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
5,553,695
|
|
|
$
|
908,750
|
|
|
$
|
1,175,265
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Aarons Rents
Baton Rouge, LA
Specialty Retail
|
|
|
|
Aarons Rents
Beeville, TX
Specialty Retail
|
|
|
|
Aarons Rents
Calmet City, IL
Specialty Retail
|
|
Gross leasable square footage
|
|
|
7,959
|
|
|
|
7,969
|
|
|
|
9,001
|
|
Date of purchase
|
|
|
09/15/08
|
|
|
|
09/15/08
|
|
|
|
09/15/08
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
857,730
|
|
|
|
1,566,182
|
|
|
|
1,454,381
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
857,730
|
|
|
|
1,566,182
|
|
|
|
1,454,381
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
28,897
|
|
|
|
33,183
|
|
|
|
35,931
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
886,627
|
|
|
$
|
1,599,365
|
|
|
$
|
1,490,312
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-15
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Aarons Rents
Charlotte, NC
Specialty Retail
|
|
|
|
Aarons Rents
Chiefland, FL
Specialty Retail
|
|
|
|
Aarons Rents
Clanton, AL
Specialty Retail
|
|
Gross leasable square footage
|
|
|
6,287
|
|
|
|
7,692
|
|
|
|
8,000
|
|
Date of purchase
|
|
|
09/15/08
|
|
|
|
09/15/08
|
|
|
|
09/15/08
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
913,871
|
|
|
|
1,414,526
|
|
|
|
1,222,902
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
913,871
|
|
|
|
1,414,526
|
|
|
|
1,222,902
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
27,387
|
|
|
|
27,461
|
|
|
|
29,798
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
941,258
|
|
|
$
|
1,441,987
|
|
|
$
|
1,252,700
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Aarons Rents
Essex, MD
Specialty Retail
|
|
|
|
Aarons Rents
Forrest City, AR
Specialty Retail
|
|
|
|
Aarons Rents
Griffin, GA
Specialty Retail
|
|
Gross leasable square footage
|
|
|
14,220
|
|
|
|
6,896
|
|
|
|
7,692
|
|
Date of purchase
|
|
|
09/15/08
|
|
|
|
09/15/08
|
|
|
|
09/15/08
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
2,098,730
|
|
|
|
1,158,864
|
|
|
|
1,777,529
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
2,098,730
|
|
|
|
1,158,864
|
|
|
|
1,777,529
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
72,931
|
|
|
|
32,776
|
|
|
|
27,772
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
2,171,661
|
|
|
$
|
1,191,640
|
|
|
$
|
1,805,301
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Aarons Rents
Grovetown, GA
Specialty Retail
|
|
|
|
Aarons Rents
Harrisonville, MO
Specialty Retail
|
|
|
|
Aarons Rents
Hartsville, SC
Specialty Retail
|
|
Gross leasable square footage
|
|
|
7,692
|
|
|
|
6,741
|
|
|
|
9,459
|
|
Date of purchase
|
|
|
09/15/08
|
|
|
|
09/15/08
|
|
|
|
09/15/08
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
1,237,009
|
|
|
|
720,773
|
|
|
|
1,355,439
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
1,237,009
|
|
|
|
720,773
|
|
|
|
1,355,439
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
26,801
|
|
|
|
28,733
|
|
|
|
29,496
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
1,263,810
|
|
|
$
|
749,506
|
|
|
$
|
1,384,935
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-16
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Aarons Rents
Largo, FL
Specialty Retail
|
|
|
|
Aarons Rents
Mansfield, TX
Specialty Retail
|
|
|
|
Aarons Rents
Navasota, TX
Specialty Retail
|
|
Gross leasable square footage
|
|
|
14,299
|
|
|
|
9,459
|
|
|
|
7,692
|
|
Date of purchase
|
|
|
09/15/08
|
|
|
|
09/15/08
|
|
|
|
09/15/08
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
783,331
|
|
|
|
1,396,495
|
|
|
|
1,326,292
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
783,331
|
|
|
|
1,396,495
|
|
|
|
1,326,292
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
27,054
|
|
|
|
32,391
|
|
|
|
32,405
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
810,385
|
|
|
$
|
1,428,886
|
|
|
$
|
1,358,697
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Aarons Rents
Okeechobee, FL
Specialty Retail
|
|
|
|
Aarons Rents
Rensselaer, NY
Specialty Retail
|
|
|
|
Aarons Rents
Rome, NY
Specialty Retail
|
|
Gross leasable square footage
|
|
|
7,597
|
|
|
|
14,714
|
|
|
|
13,146
|
|
Date of purchase
|
|
|
09/15/08
|
|
|
|
09/15/08
|
|
|
|
09/15/08
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
1,585,525
|
|
|
|
1,581,454
|
|
|
|
1,169,759
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
1,585,525
|
|
|
|
1,581,454
|
|
|
|
1,169,759
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
27,526
|
|
|
|
33,281
|
|
|
|
31,459
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
1,613,051
|
|
|
$
|
1,614,735
|
|
|
$
|
1,201,218
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Aarons Rents
Sandersville, GA
Specialty Retail
|
|
|
|
Aarons Rents
Shreveport, LA
Specialty Retail
|
|
|
|
Aarons Rents
Sweetwater, TX Specialty Retail
|
|
Gross leasable square footage
|
|
|
7,692
|
|
|
|
9,163
|
|
|
|
8,256
|
|
Date of purchase
|
|
|
09/15/08
|
|
|
|
09/15/08
|
|
|
|
09/15/08
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
1,235,863
|
|
|
|
588,347
|
|
|
|
1,085,875
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
1,235,863
|
|
|
|
588,347
|
|
|
|
1,085,875
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
27,643
|
|
|
|
27,929
|
|
|
|
15,448
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
1,263,506
|
|
|
$
|
616,276
|
|
|
$
|
1,101,323
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-17
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Aarons Rents
Mineral Wells, TX
Specialty Retail
|
|
|
|
Aarons Rents
Wichita, KS
Specialty Retail
|
|
|
|
Aarons Rents
Wilton, NY
Specialty Retail
|
|
Gross leasable square footage
|
|
|
8,000
|
|
|
|
7,577
|
|
|
|
41,063
|
|
Date of purchase
|
|
|
09/15/08
|
|
|
|
09/15/08
|
|
|
|
09/15/08
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
994,207
|
|
|
|
870,848
|
|
|
|
2,864,922
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
994,207
|
|
|
|
870,848
|
|
|
|
2,864,922
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
14,143
|
|
|
|
29,656
|
|
|
|
36,576
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
1,008,350
|
|
|
$
|
900,504
|
|
|
$
|
2,901,498
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
HH Gregg
Grove City, OH
Consumer Electronics
|
|
|
|
Lowes
Chester, NY
Home Improvement
|
|
|
|
BJs Wholesale Club
Ft. Lauderdale, FL
Warehouse
|
|
Gross leasable square footage
|
|
|
30,167
|
|
|
|
131,798
|
|
|
|
119,598
|
|
Date of purchase
|
|
|
09/17/08
|
|
|
|
09/19/08
|
|
|
|
09/23/08
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
6,020,040
|
|
|
|
7,177,778
|
|
|
|
28,838,314
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
6,020,040
|
|
|
|
7,177,778
|
|
|
|
28,838,314
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
37,410
|
|
|
|
55,468
|
|
|
|
24,290
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
6,057,450
|
|
|
$
|
7,233,246
|
|
|
$
|
28,862,604
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
HH Gregg
Mt. Juliet, TN
Consumer Electronics
|
|
|
|
Winter Garden
Village
Winter Garden, FL
Shopping Center
|
|
|
|
FedEx Huntsville, AL
Distribution Center
|
|
Gross leasable square footage
|
|
|
30,000
|
|
|
|
698,210
|
|
|
|
56,360
|
|
Date of purchase
|
|
|
09/23/08
|
|
|
|
09/26/08
|
|
|
|
09/30/08
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
105,700,000
|
|
|
$
|
|
|
Cash down payment
|
|
|
6,472,920
|
|
|
|
78,258,312
|
|
|
|
11,166,742
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
6,472,920
|
|
|
|
183,958,312
|
|
|
|
11,166,742
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
28,789
|
|
|
|
1,076,828
|
|
|
|
34,450
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
6,501,709
|
|
|
$
|
185,035,140
|
|
|
$
|
11,201,192
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-18
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
AT&T (1)
Santa Clara, CA
Office
|
|
|
|
Best Buy(1)
Las Cruces, NM
Consumer Electronics
|
|
|
|
CVS(1)
Columbia I, TN
Drugstore
|
|
Gross leasable square footage
|
|
|
33,257
|
|
|
|
30,000
|
|
|
|
10,715
|
|
Date of purchase
|
|
|
09/30/08
|
|
|
|
09/30/08
|
|
|
|
09/30/08
|
|
Mortgage financing at date of purchase
|
|
$
|
6,032,000
|
|
|
$
|
3,809,000
|
|
|
$
|
1,715,000
|
|
Cash down payment
|
|
|
4,372,000
|
|
|
|
2,413,000
|
|
|
|
937,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
10,404,000
|
|
|
|
6,222,000
|
|
|
|
2,652,000
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
8,942
|
|
|
|
14,417
|
|
|
|
47,475
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
10,412,942
|
|
|
$
|
6,236,417
|
|
|
$
|
2,699,475
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
CVS(1)
Columbia II, TN
Drugstore
|
|
|
|
CVS(1)
Hamilton, OH
Drugstore
|
|
|
|
CVS(1)
Mechanicville, NY
Drugstore
|
|
Gross leasable square footage
|
|
|
10,759
|
|
|
|
11,180
|
|
|
|
10,125
|
|
Date of purchase
|
|
|
09/30/08
|
|
|
|
09/30/08
|
|
|
|
09/30/08
|
|
Mortgage financing at date of purchase
|
|
$
|
1,735,000
|
|
|
$
|
1,787,500
|
|
|
$
|
1,290,000
|
|
Cash down payment
|
|
|
713,000
|
|
|
|
1,884,500
|
|
|
|
1,362,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
2,448,000
|
|
|
|
3,672,000
|
|
|
|
2,652,000
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
47,416
|
|
|
|
12,915
|
|
|
|
13,049
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
2,495,416
|
|
|
$
|
3,684,915
|
|
|
$
|
2,665,049
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Home Depot(1)
Colma, CA
Home Improvement
|
|
|
|
Office Depot(1)
Laurel, MS
Office Supply
|
|
|
|
Office Depot(1)
London, KY
Office Supply
|
|
Gross leasable square footage
|
|
|
99,970
|
|
|
|
20,515
|
|
|
|
20,468
|
|
Date of purchase
|
|
|
09/30/08
|
|
|
|
09/30/08
|
|
|
|
09/30/08
|
|
Mortgage financing at date of purchase
|
|
$
|
21,613,000
|
|
|
$
|
1,270,000
|
|
|
$
|
1,680,000
|
|
Cash down payment
|
|
|
18,483,200
|
|
|
|
1,433,000
|
|
|
|
1,890,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
40,096,200
|
|
|
|
2,703,000
|
|
|
|
3,570,000
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
39,368
|
|
|
|
12,699
|
|
|
|
13,447
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
40,135,568
|
|
|
$
|
2,715,699
|
|
|
$
|
3,583,447
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-19
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Payless Shoes(1)
Columbia, SC
Specialty Retail
|
|
|
|
Staples(1)
Angola, IN
Office Supply
|
|
|
|
TJ Maxx(1)
Staunton, VA
Department Store
|
|
Gross leasable square footage
|
|
|
5,534
|
|
|
|
24,049
|
|
|
|
78,823
|
|
Date of purchase
|
|
|
09/30/08
|
|
|
|
09/30/08
|
|
|
|
09/30/08
|
|
Mortgage financing at date of purchase
|
|
$
|
860,000
|
|
|
$
|
1,999,000
|
|
|
$
|
3,116,000
|
|
Cash down payment
|
|
|
568,000
|
|
|
|
1,265,000
|
|
|
|
1,270,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
1,428,000
|
|
|
|
3,264,000
|
|
|
|
4,386,000
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
14,681
|
|
|
|
12,578
|
|
|
|
12,627
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
1,442,681
|
|
|
$
|
3,276,578
|
|
|
$
|
4,398,627
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Walgreens(1)
Akron, OH
Drugstore
|
|
|
|
Walgreens(1)
Broken Arrow, OK
Drugstore
|
|
|
|
Walgreens(1)
Crossville, TN
Drugstore
|
|
Gross leasable square footage
|
|
|
13,500
|
|
|
|
12,751
|
|
|
|
15,070
|
|
Date of purchase
|
|
|
09/30/08
|
|
|
|
09/30/08
|
|
|
|
09/30/08
|
|
Mortgage financing at date of purchase
|
|
$
|
1,900,000
|
|
|
$
|
1,127,500
|
|
|
$
|
2,753,000
|
|
Cash down payment
|
|
|
976,400
|
|
|
|
1,014,500
|
|
|
|
1,786,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
2,876,400
|
|
|
|
2,142,000
|
|
|
|
4,539,000
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
12,811
|
|
|
|
13,338
|
|
|
|
13,175
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
2,889,211
|
|
|
$
|
2,155,338
|
|
|
$
|
4,552,175
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Walgreens(1)
Jacksonville, AR
Drugstore
|
|
|
|
Walgreens(1)
LaMarque, TX
Drugstore
|
|
|
|
Walgreens(1)
Tulsa (Memorial), OK
Drugstore
|
|
Gross leasable square footage
|
|
|
14,560
|
|
|
|
15,120
|
|
|
|
13,500
|
|
Date of purchase
|
|
|
09/30/08
|
|
|
|
09/30/08
|
|
|
|
09/30/08
|
|
Mortgage financing at date of purchase
|
|
$
|
2,510,750
|
|
|
$
|
2,277,000
|
|
|
$
|
1,926,000
|
|
Cash down payment
|
|
|
2,640,250
|
|
|
|
2,323,200
|
|
|
|
1,083,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
5,151,000
|
|
|
|
4,600,200
|
|
|
|
3,009,000
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
14,165
|
|
|
|
14,458
|
|
|
|
13,633
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
5,165,165
|
|
|
$
|
4,614,658
|
|
|
$
|
3,022,633
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-20
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Walgreens(1)
Newton, IA
Drugstore
|
|
|
|
Walgreens(1)
Saginaw, MI
Drugstore
|
|
|
|
Walgreens(1)
Seattle, WA
Drugstore
|
|
Gross leasable square footage
|
|
|
15,047
|
|
|
|
15,120
|
|
|
|
14,410
|
|
Date of purchase
|
|
|
09/30/08
|
|
|
|
09/30/08
|
|
|
|
09/30/08
|
|
Mortgage financing at date of purchase
|
|
$
|
2,393,000
|
|
|
$
|
2,282,500
|
|
|
$
|
3,349,500
|
|
Cash down payment
|
|
|
2,023,600
|
|
|
|
2,001,500
|
|
|
|
3,555,900
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
4,416,600
|
|
|
|
4,284,000
|
|
|
|
6,905,400
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
13,644
|
|
|
|
12,940
|
|
|
|
10,524
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
4,430,244
|
|
|
$
|
4,296,940
|
|
|
$
|
6,915,924
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Walgreens(1)
Tulsa, OK
Drugstore
|
|
|
|
FedEx
Baton Rouge, LA
Distribution Center
|
|
|
|
CVS
Atlanta, GA
Drugstore
|
|
Gross leasable square footage
|
|
|
13,000
|
|
|
|
29,400
|
|
|
|
12,013
|
|
Date of purchase
|
|
|
09/30/08
|
|
|
|
10/03/08
|
|
|
|
10/07/08
|
|
Mortgage financing at date of purchase
|
|
$
|
1,215,500
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
1,018,300
|
|
|
|
9,178,858
|
|
|
|
3,917,820
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
2,233,800
|
|
|
|
9,178,858
|
|
|
|
3,917,820
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
13,338
|
|
|
|
39,249
|
|
|
|
27,360
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
2,247,138
|
|
|
$
|
9,218,107
|
|
|
$
|
3,945,180
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Tractor Supply
Baldwinsville, NY
Specialty Retail
|
|
|
|
BE Aerospace
Winston-Salem, NC
Warehouse
|
|
|
|
Churchs Chicken
Birmingham (29th
Ave), AL
Restaurant
|
|
Gross leasable square footage
|
|
|
24,727
|
|
|
|
89,600
|
|
|
|
787
|
|
Date of purchase
|
|
|
10/15/08
|
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
Mortgage financing at date of purchase
|
|
$
|
2,024,013
|
|
|
$
|
|
|
|
$
|
40,011
|
|
Cash down payment
|
|
|
1,446,149
|
|
|
|
5,528,400
|
|
|
|
36,489
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
3,470,162
|
|
|
|
5,528,400
|
|
|
|
76,500
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
29,036
|
|
|
|
33,724
|
|
|
|
5,304
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
3,499,198
|
|
|
$
|
5,562,124
|
|
|
$
|
81,804
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-21
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Churchs Chicken
Birmingham
(Ensley), AL
Restaurant
|
|
|
|
Churchs Chicken
Birmingham
(Jefferson), AL Restaurant
|
|
|
|
Churchs Chicken
Birmingham
(Vanderbilt), AL
Restaurant
|
|
Gross leasable square footage
|
|
|
1,130
|
|
|
|
1,750
|
|
|
|
1,364
|
|
Date of purchase
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
Mortgage financing at date of purchase
|
|
$
|
40,011
|
|
|
$
|
375,732
|
|
|
$
|
301,451
|
|
Cash down payment
|
|
|
36,489
|
|
|
|
342,659
|
|
|
|
274,916
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
76,500
|
|
|
|
718,391
|
|
|
|
576,367
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
5,304
|
|
|
|
5,305
|
|
|
|
5,305
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
81,804
|
|
|
$
|
723,696
|
|
|
$
|
581,672
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Churchs Chicken
Greensboro, AL
Restaurant
|
|
|
|
Churchs Chicken
Montgomery (Day),
AL Restaurant
|
|
|
|
Churchs Chicken
Montgomery (South),
AL
Restaurant
|
|
Gross leasable square footage
|
|
|
787
|
|
|
|
1,560
|
|
|
|
1,230
|
|
Date of purchase
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
Mortgage financing at date of purchase
|
|
$
|
338,402
|
|
|
$
|
259,909
|
|
|
$
|
472,192
|
|
Cash down payment
|
|
|
308,614
|
|
|
|
237,031
|
|
|
|
430,627
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
647,016
|
|
|
|
496,940
|
|
|
|
902,819
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
5,592
|
|
|
|
5,406
|
|
|
|
5,407
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
652,608
|
|
|
$
|
502,346
|
|
|
$
|
908,226
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-22
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Churchs Chicken
Montgomery
(Fairview), AL
Restaurant
|
|
|
|
Churchs Chicken
Montgomery (Hwy
31), AL
Restaurant
|
|
|
|
Churchs Chicken
Montgomery
(Wetumpka), AL
Restaurant
|
|
Gross leasable square footage
|
|
|
1,286
|
|
|
|
1,230
|
|
|
|
1,781
|
|
Date of purchase
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
Mortgage financing at date of purchase
|
|
$
|
400,082
|
|
|
$
|
379,328
|
|
|
$
|
272,019
|
|
Cash down payment
|
|
|
364,864
|
|
|
|
345,938
|
|
|
|
248,075
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
764,946
|
|
|
|
725,266
|
|
|
|
520,094
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
5,406
|
|
|
|
5,406
|
|
|
|
5,406
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
770,352
|
|
|
$
|
730,672
|
|
|
$
|
525,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Churchs Chicken
Phenix City, AL
Restaurant
|
|
|
|
Churchs Chicken
Talladega, AL
Restaurant
|
|
|
|
Churchs Chicken
West Birmingham, AL
Restaurant
|
|
Gross leasable square footage
|
|
|
1,335
|
|
|
|
1,232
|
|
|
|
1,395
|
|
Date of purchase
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
Mortgage financing at date of purchase
|
|
$
|
439,166
|
|
|
$
|
206,453
|
|
|
$
|
221,387
|
|
Cash down payment
|
|
|
400,508
|
|
|
|
188,281
|
|
|
|
201,900
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
839,674
|
|
|
|
394,734
|
|
|
|
423,287
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
5,775
|
|
|
|
5,488
|
|
|
|
5,304
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
845,449
|
|
|
$
|
400,222
|
|
|
$
|
428,591
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-23
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Churchs Chicken
Little Rock (12th St),
AR Restaurant
|
|
|
|
Churchs Chicken
Little Rock
(Geyer), AR
Restaurant
|
|
|
|
Churchs Chicken
Little Rock (MLK),
AR
Restaurant
|
|
Gross leasable square footage
|
|
|
945
|
|
|
|
1,144
|
|
|
|
945
|
|
Date of purchase
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
Mortgage financing at date of purchase
|
|
$
|
271,305
|
|
|
$
|
309,080
|
|
|
$
|
118,614
|
|
Cash down payment
|
|
|
247,424
|
|
|
|
281,873
|
|
|
|
108,174
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
518,729
|
|
|
|
590,953
|
|
|
|
226,788
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
5,189
|
|
|
|
5,190
|
|
|
|
5,189
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
523,918
|
|
|
$
|
596,143
|
|
|
$
|
231,977
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Churchs Chicken
North Little Rock,
AR Restaurant
|
|
|
|
Churchs Chicken
Pine Bluff, AR
Restaurant
|
|
|
|
Churchs Chicken
Nogales, AZ
Restaurant
|
|
Gross leasable square footage
|
|
|
1,230
|
|
|
|
945
|
|
|
|
1,144
|
|
Date of purchase
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
Mortgage financing at date of purchase
|
|
$
|
49,138
|
|
|
$
|
626,959
|
|
|
$
|
295,098
|
|
Cash down payment
|
|
|
44,812
|
|
|
|
571,772
|
|
|
|
269,121
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
93,950
|
|
|
|
1,198,731
|
|
|
|
564,219
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
5,189
|
|
|
|
7,200
|
|
|
|
5,468
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
99,139
|
|
|
$
|
1,205,931
|
|
|
$
|
569,687
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Churchs Chicken
Phoenix (4245
Central), AZ
Restaurant
|
|
|
|
Churchs Chicken
Phoenix (7444
Central), AZ
Restaurant
|
|
|
|
Churchs Chicken
Phoenix
(Roosevelt), AZ
Restaurant
|
|
Gross leasable square footage
|
|
|
1,157
|
|
|
|
966
|
|
|
|
1,156
|
|
Date of purchase
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
Mortgage financing at date of purchase
|
|
$
|
269,924
|
|
|
$
|
474,007
|
|
|
$
|
288,142
|
|
Cash down payment
|
|
|
246,164
|
|
|
|
432,282
|
|
|
|
262,778
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
516,088
|
|
|
|
906,289
|
|
|
|
550,920
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
4,952
|
|
|
|
4,952
|
|
|
|
4,952
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
521,040
|
|
|
$
|
911,241
|
|
|
$
|
555,872
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-24
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Churchs Chicken
Phoenix (E Thomas),
AZ Restaurant
|
|
|
|
Churchs Chicken
Phoenix (Grand), AZ
Restaurant
|
|
|
|
Churchs Chicken
Phoenix (35th Ave),
AZ
Restaurant
|
|
Gross leasable square footage
|
|
|
1,176
|
|
|
|
1,169
|
|
|
|
1,144
|
|
Date of purchase
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
Mortgage financing at date of purchase
|
|
$
|
345,198
|
|
|
$
|
250,297
|
|
|
$
|
393,080
|
|
Cash down payment
|
|
|
314,811
|
|
|
|
228,266
|
|
|
|
358,479
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
660,009
|
|
|
|
478,563
|
|
|
|
751,559
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
4,952
|
|
|
|
4,951
|
|
|
|
4,952
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
664,961
|
|
|
$
|
483,514
|
|
|
$
|
756,511
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Churchs Chicken
Phoenix (W Thomas),
AZ
Restaurant
|
|
|
|
Churchs Chicken
Tucson (Golf
Links), AZ
Restaurant
|
|
|
|
Churchs Chicken
Tucson (Grant), AZ
Restaurant
|
|
Gross leasable square footage
|
|
|
1,172
|
|
|
|
987
|
|
|
|
1,176
|
|
Date of purchase
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
Mortgage financing at date of purchase
|
|
$
|
279,370
|
|
|
$
|
314,739
|
|
|
$
|
276,165
|
|
Cash down payment
|
|
|
254,780
|
|
|
|
287,034
|
|
|
|
251,855
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
534,150
|
|
|
|
601,773
|
|
|
|
528,020
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
4,951
|
|
|
|
4,952
|
|
|
|
4,952
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
539,101
|
|
|
$
|
606,725
|
|
|
$
|
532,972
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-25
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Churchs Chicken
Tucson (Oracle), AZ
Restaurant
|
|
|
|
Churchs Chicken
Tucson (Valencia),
AZ
Restaurant
|
|
|
|
Churchs Chicken
Americus, GA
Restaurant
|
|
Gross leasable square footage
|
|
|
1,155
|
|
|
|
1,106
|
|
|
|
1,335
|
|
Date of purchase
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
Mortgage financing at date of purchase
|
|
$
|
186,239
|
|
|
$
|
319,272
|
|
|
$
|
258,631
|
|
Cash down payment
|
|
|
169,846
|
|
|
|
291,167
|
|
|
|
235,865
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
356,085
|
|
|
|
610,439
|
|
|
|
494,496
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
4,951
|
|
|
|
4,952
|
|
|
|
4,951
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
361,036
|
|
|
$
|
615,391
|
|
|
$
|
499,447
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Churchs Chicken
Atlanta
(Campbelton), GA
Restaurant
|
|
|
|
Churchs Chicken
Atlanta
(Cleveland), GA
Restaurant
|
|
|
|
Churchs Chicken
Atlanta (MLK), GA
Restaurant
|
|
Gross leasable square footage
|
|
|
1,144
|
|
|
|
1,350
|
|
|
|
1,144
|
|
Date of purchase
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
Mortgage financing at date of purchase
|
|
$
|
281,549
|
|
|
$
|
307,062
|
|
|
$
|
276,957
|
|
Cash down payment
|
|
|
256,765
|
|
|
|
280,033
|
|
|
|
252,578
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
538,314
|
|
|
|
587,095
|
|
|
|
529,535
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
4,951
|
|
|
|
4,988
|
|
|
|
4,951
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
543,265
|
|
|
$
|
592,083
|
|
|
$
|
534,486
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-26
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Churchs Chicken
Atlanta (Moreland),
GA
Restaurant
|
|
|
|
Churchs Chicken
Columbus (Buena
Vista), GA
Restaurant
|
|
|
|
Churchs Chicken
Columbus (Ft. Benning), GA
Restaurant
|
|
Gross leasable square footage
|
|
|
1,176
|
|
|
|
1,335
|
|
|
|
1,169
|
|
Date of purchase
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
Mortgage financing at date of purchase
|
|
$
|
376,283
|
|
|
$
|
468,923
|
|
|
$
|
99,600
|
|
Cash down payment
|
|
|
343,161
|
|
|
|
427,647
|
|
|
|
90,832
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
719,444
|
|
|
|
896,570
|
|
|
|
190,432
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
5,216
|
|
|
|
5,342
|
|
|
|
4,951
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
724,660
|
|
|
$
|
901,912
|
|
|
$
|
195,383
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Churchs Chicken
Cordele, GA
Restaurant
|
|
|
|
Churchs Chicken
Decatur (1805
Candler), GA
Restaurant
|
|
|
|
Churchs Chicken
Decatur (2700
Candler), GA
Restaurant
|
|
Gross leasable square footage
|
|
|
420
|
|
|
|
1,134
|
|
|
|
1,155
|
|
Date of purchase
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
Mortgage financing at date of purchase
|
|
$
|
270,647
|
|
|
$
|
266,180
|
|
|
$
|
279,838
|
|
Cash down payment
|
|
|
246,822
|
|
|
|
242,749
|
|
|
|
255,206
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
517,469
|
|
|
|
508,929
|
|
|
|
535,044
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
5,166
|
|
|
|
4,960
|
|
|
|
4,951
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
522,635
|
|
|
$
|
513,889
|
|
|
$
|
539,995
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-27
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Churchs Chicken
Decatur (Decatur), GA
Restaurant
|
|
|
|
Churchs Chicken
Decatur (Wesley
Chapel), GA
Restaurant
|
|
|
|
Churchs Chicken
East Point, GA
Restaurant
|
|
Gross leasable square footage
|
|
|
1,491
|
|
|
|
1,302
|
|
|
|
1,320
|
|
Date of purchase
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
Mortgage financing at date of purchase
|
|
$
|
280,127
|
|
|
$
|
261,576
|
|
|
$
|
286,491
|
|
Cash down payment
|
|
|
255,469
|
|
|
|
238,551
|
|
|
|
261,273
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
535,596
|
|
|
|
500,127
|
|
|
|
547,764
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
4,951
|
|
|
|
4,952
|
|
|
|
5,048
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
540,547
|
|
|
$
|
505,079
|
|
|
$
|
552,812
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Churchs Chicken
Fort Valley, GA
Restaurant
|
|
|
|
Churchs Chicken
Griffin, GA
Restaurant
|
|
|
|
Churchs Chicken
LaGrange, GA
Restaurant
|
|
Gross leasable square footage
|
|
|
1,176
|
|
|
|
1,335
|
|
|
|
1,335
|
|
Date of purchase
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
Mortgage financing at date of purchase
|
|
$
|
318,999
|
|
|
$
|
314,631
|
|
|
$
|
230,535
|
|
Cash down payment
|
|
|
290,919
|
|
|
|
286,936
|
|
|
|
210,243
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
609,918
|
|
|
|
601,567
|
|
|
|
440,778
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
4,961
|
|
|
|
4,968
|
|
|
|
4,951
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
614,879
|
|
|
$
|
606,535
|
|
|
$
|
445,729
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Churchs Chicken
Macon (Georgia), GA
Restaurant
|
|
|
|
Churchs Chicken
Macon (Pio Nono), GA
Restaurant
|
|
|
|
Churchs Chicken
Macon (Shurling), GA
Restaurant
|
|
Gross leasable square footage
|
|
|
1,169
|
|
|
|
1,335
|
|
|
|
1,144
|
|
Date of purchase
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
Mortgage financing at date of purchase
|
|
$
|
225,619
|
|
|
$
|
335,637
|
|
|
$
|
408,473
|
|
Cash down payment
|
|
|
205,758
|
|
|
|
306,094
|
|
|
|
372,518
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
431,377
|
|
|
|
641,731
|
|
|
|
780,991
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
4,952
|
|
|
|
4,992
|
|
|
|
5,080
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
436,329
|
|
|
$
|
646,723
|
|
|
$
|
786,071
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-28
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Churchs Chicken
Marietta, GA
Restaurant
|
|
|
|
Churchs Chicken
Kansas City, KS
Restaurant
|
|
|
|
Churchs Chicken
Kansas City (Blue
Ridge), MO
Restaurant
|
|
Gross leasable square footage
|
|
|
1,122
|
|
|
|
940
|
|
|
|
1,395
|
|
Date of purchase
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
Mortgage financing at date of purchase
|
|
$
|
223,270
|
|
|
$
|
375,383
|
|
|
$
|
441,310
|
|
Cash down payment
|
|
|
203,617
|
|
|
|
342,339
|
|
|
|
402,464
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
426,887
|
|
|
|
717,722
|
|
|
|
843,774
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
5,150
|
|
|
|
5,709
|
|
|
|
5,625
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
432,037
|
|
|
$
|
723,431
|
|
|
$
|
849,399
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Churchs Chicken
Kansas City (12th St), MO
Restaurant
|
|
|
|
Churchs Chicken
Kansas City
(Gregory), MO
Restaurant
|
|
|
|
Churchs Chicken
Kansas City
(Indiana), MO
Restaurant
|
|
Gross leasable square footage
|
|
|
1,080
|
|
|
|
1,774
|
|
|
|
1,245
|
|
Date of purchase
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
Mortgage financing at date of purchase
|
|
$
|
553,206
|
|
|
$
|
436,595
|
|
|
$
|
318,954
|
|
Cash down payment
|
|
|
504,511
|
|
|
|
398,164
|
|
|
|
290,877
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
1,057,717
|
|
|
|
834,759
|
|
|
|
609,831
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
5,625
|
|
|
|
5,625
|
|
|
|
5,626
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
1,063,342
|
|
|
$
|
840,384
|
|
|
$
|
615,457
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Churchs Chicken
Kansas City
(Prospect), MO
Restaurant
|
|
|
|
Churchs Chicken
Fort Worth (28th St), TX
Restaurant
|
|
|
|
Churchs Chicken
Gulfport, MS
Restaurant
|
|
Gross leasable square footage
|
|
|
1,110
|
|
|
|
1,172
|
|
|
|
983
|
|
Date of purchase
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
Mortgage financing at date of purchase
|
|
$
|
372,309
|
|
|
$
|
202,621
|
|
|
$
|
453,269
|
|
Cash down payment
|
|
|
339,537
|
|
|
|
184,785
|
|
|
|
413,370
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
711,846
|
|
|
|
387,406
|
|
|
|
866,639
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
5,625
|
|
|
|
5,244
|
|
|
|
4,951
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
717,471
|
|
|
$
|
392,650
|
|
|
$
|
871,590
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-29
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Churchs Chicken
Jackson (Ellis), MS
Restaurant
|
|
|
|
Churchs Chicken
Jackson
(Northside), MS
Restaurant
|
|
|
|
Churchs Chicken
Jackson (Terry), MS
Restaurant
|
|
Gross leasable square footage
|
|
|
1,335
|
|
|
|
1,472
|
|
|
|
1,200
|
|
Date of purchase
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
Mortgage financing at date of purchase
|
|
$
|
881,939
|
|
|
$
|
323,662
|
|
|
$
|
454,422
|
|
Cash down payment
|
|
|
804,307
|
|
|
|
295,172
|
|
|
|
414,422
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
1,686,246
|
|
|
|
618,834
|
|
|
|
868,844
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
5,747
|
|
|
|
5,748
|
|
|
|
5,748
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
1,691,993
|
|
|
$
|
624,582
|
|
|
$
|
874,592
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Churchs Chicken
Jackson (Woodrow
Wilson), MS
Restaurant
|
|
|
|
Churchs Chicken
Laurel, MS
Restaurant
|
|
|
|
Churchs Chicken
Vicksburg, MS
Restaurant
|
|
Gross leasable square footage
|
|
|
1,335
|
|
|
|
985
|
|
|
|
983
|
|
Date of purchase
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
Mortgage financing at date of purchase
|
|
$
|
287,786
|
|
|
$
|
526,565
|
|
|
$
|
207,872
|
|
Cash down payment
|
|
|
262,453
|
|
|
|
480,215
|
|
|
|
189,573
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
550,239
|
|
|
|
1,006,780
|
|
|
|
397,445
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
5,748
|
|
|
|
5,357
|
|
|
|
4,951
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
555,987
|
|
|
$
|
1,012,137
|
|
|
$
|
402,396
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-30
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Churchs Chicken
Albuquerque
(Broadway), NM
Restaurant
|
|
|
|
Churchs Chicken
Albuquerque
(Fourth), NM
Restaurant
|
|
|
|
Churchs Chicken
Albuquerque
(Isleta), NM
Restaurant
|
|
Gross leasable square footage
|
|
|
1,190
|
|
|
|
1,190
|
|
|
|
1,190
|
|
Date of purchase
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
Mortgage financing at date of purchase
|
|
$
|
359,424
|
|
|
$
|
306,040
|
|
|
$
|
519,573
|
|
Cash down payment
|
|
|
327,787
|
|
|
|
279,101
|
|
|
|
473,838
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
687,211
|
|
|
|
585,141
|
|
|
|
993,411
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
5,578
|
|
|
|
4,952
|
|
|
|
6,252
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
692,789
|
|
|
$
|
590,093
|
|
|
$
|
999,663
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Churchs Chicken
Albuquerque (Juan
Tabo), NM
Restaurant
|
|
|
|
Churchs Chicken
Hobbs, NM
Restaurant
|
|
|
|
Churchs Chicken
Roswell, NM
Restaurant
|
|
Gross leasable square footage
|
|
|
1,190
|
|
|
|
1,144
|
|
|
|
1,144
|
|
Date of purchase
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
Mortgage financing at date of purchase
|
|
$
|
205,443
|
|
|
$
|
617,934
|
|
|
$
|
315,859
|
|
Cash down payment
|
|
|
187,359
|
|
|
|
563,540
|
|
|
|
288,055
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
392,802
|
|
|
|
1,181,474
|
|
|
|
603,914
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
4,951
|
|
|
|
7,428
|
|
|
|
5,516
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
397,753
|
|
|
$
|
1,188,902
|
|
|
$
|
609,430
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Churchs Chicken
Altus, OK
Restaurant
|
|
|
|
Churchs Chicken
Midwest City, OK
Restaurant
|
|
|
|
Churchs Chicken
Oklahoma City
(23rd), OK
Restaurant
|
|
Gross leasable square footage
|
|
|
1,390
|
|
|
|
1,350
|
|
|
|
945
|
|
Date of purchase
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
Mortgage financing at date of purchase
|
|
$
|
186,155
|
|
|
$
|
398,549
|
|
|
$
|
259,595
|
|
Cash down payment
|
|
|
169,768
|
|
|
|
363,466
|
|
|
|
236,744
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
355,923
|
|
|
|
762,015
|
|
|
|
496,339
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
5,411
|
|
|
|
5,976
|
|
|
|
5,976
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
361,334
|
|
|
$
|
767,991
|
|
|
$
|
502,315
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-31
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Churchs Chicken
Oklahoma City
(44th), OK
Restaurant
|
|
|
|
Churchs Chicken
The Village, OK
Restaurant
|
|
|
|
Churchs Chicken
Tulsa (Peoria), OK
Restaurant
|
|
Gross leasable square footage
|
|
|
1,500
|
|
|
|
1,335
|
|
|
|
1,491
|
|
Date of purchase
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
Mortgage financing at date of purchase
|
|
$
|
292,081
|
|
|
$
|
328,037
|
|
|
$
|
445,986
|
|
Cash down payment
|
|
|
266,371
|
|
|
|
299,163
|
|
|
|
406,728
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
558,452
|
|
|
|
627,200
|
|
|
|
852,714
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
5,976
|
|
|
|
5,189
|
|
|
|
6,005
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
564,428
|
|
|
$
|
632,389
|
|
|
$
|
858,719
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Churchs Chicken
Tulsa (Garnett), OK
Restaurant
|
|
|
|
Churchs Chicken
Memphis (2275 Elvis
Presley), TN
Restaurant
|
|
|
|
Churchs Chicken
Memphis (4458 Elvis
Presley), TN
Restaurant
|
|
Gross leasable square footage
|
|
|
1,100
|
|
|
|
1,276
|
|
|
|
1,008
|
|
Date of purchase
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
Mortgage financing at date of purchase
|
|
$
|
573,052
|
|
|
$
|
193,368
|
|
|
$
|
40,011
|
|
Cash down payment
|
|
|
522,609
|
|
|
|
176,347
|
|
|
|
36,489
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
1,095,661
|
|
|
|
369,715
|
|
|
|
76,500
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
6,005
|
|
|
|
4,952
|
|
|
|
4,951
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
1,101,666
|
|
|
$
|
374,667
|
|
|
$
|
81,451
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-32
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Churchs Chicken
Memphis (Airways),
TN
Restaurant
|
|
|
|
Churchs Chicken
Memphis (Bellevue),
TN
Restaurant
|
|
|
|
Churchs Chicken
Memphis (Chelsea),
TN
Restaurant
|
|
Gross leasable square footage
|
|
|
875
|
|
|
|
960
|
|
|
|
1,140
|
|
Date of purchase
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
Mortgage financing at date of purchase
|
|
$
|
68,992
|
|
|
$
|
130,900
|
|
|
$
|
190,327
|
|
Cash down payment
|
|
|
62,920
|
|
|
|
119,378
|
|
|
|
173,574
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
131,912
|
|
|
|
250,278
|
|
|
|
363,901
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
4,951
|
|
|
|
4,952
|
|
|
|
4,952
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
136,863
|
|
|
$
|
255,230
|
|
|
$
|
368,853
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Churchs Chicken
Memphis (Frayser),
TN
Restaurant
|
|
|
|
Churchs Chicken
Memphis (Jackson),
TN
Restaurant
|
|
|
|
Churchs Chicken
Memphis (Park), TN
Restaurant
|
|
Gross leasable square footage
|
|
|
1,176
|
|
|
|
960
|
|
|
|
960
|
|
Date of purchase
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
Mortgage financing at date of purchase
|
|
$
|
389,148
|
|
|
$
|
40,011
|
|
|
$
|
250,409
|
|
Cash down payment
|
|
|
354,894
|
|
|
|
36,489
|
|
|
|
228,367
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
744,042
|
|
|
|
76,500
|
|
|
|
478,776
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
4,951
|
|
|
|
4,951
|
|
|
|
4,951
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
748,993
|
|
|
$
|
81,451
|
|
|
$
|
483,727
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-33
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Churchs Chicken
Memphis (Third), TN
Restaurant
|
|
|
|
Churchs Chicken
Memphis (Summer), TN
Restaurant
|
|
|
|
Churchs Chicken
Memphis (Sycamore
View), TN
Restaurant
|
|
Gross leasable square footage
|
|
|
1,230
|
|
|
|
1,134
|
|
|
|
1,230
|
|
Date of purchase
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
Mortgage financing at date of purchase
|
|
$
|
282,753
|
|
|
$
|
93,610
|
|
|
$
|
445,939
|
|
Cash down payment
|
|
|
257,863
|
|
|
|
85,370
|
|
|
|
406,685
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
540,616
|
|
|
|
178,980
|
|
|
|
852,624
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
36,564
|
|
|
|
4,952
|
|
|
|
4,951
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
577,180
|
|
|
$
|
183,932
|
|
|
$
|
857,575
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Churchs Chicken
Abilene, TX
Restaurant
|
|
|
|
Churchs Chicken
Alamo, TX
Restaurant
|
|
|
|
Churchs Chicken
Arlington, TX
Restaurant
|
|
Gross leasable square footage
|
|
|
1,543
|
|
|
|
1,176
|
|
|
|
787
|
|
Date of purchase
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
Mortgage financing at date of purchase
|
|
$
|
230,301
|
|
|
$
|
1,508,134
|
|
|
$
|
129,701
|
|
Cash down payment
|
|
|
210,029
|
|
|
|
1,375,381
|
|
|
|
118,284
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus
acquisition fee
|
|
|
440,330
|
|
|
|
2,883,515
|
|
|
|
247,985
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
5,243
|
|
|
|
5,243
|
|
|
|
5,244
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
445,573
|
|
|
$
|
2,888,758
|
|
|
$
|
253,229
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-34
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Churchs Chicken
Austin (Airport), TX
Restaurant
|
|
|
|
Churchs Chicken
Austin (Cameron), TX
Restaurant
|
|
|
|
Churchs Chicken
Austin (Research),
TX
Restaurant
|
|
Gross leasable square footage
|
|
|
1,945
|
|
|
|
1,122
|
|
|
|
1,924
|
|
Date of purchase
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
Mortgage financing at date of purchase
|
|
$
|
683,454
|
|
|
$
|
693,511
|
|
|
$
|
592,644
|
|
Cash down payment
|
|
|
623,294
|
|
|
|
632,465
|
|
|
|
540,477
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
1,306,748
|
|
|
|
1,325,976
|
|
|
|
1,133,121
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
5,243
|
|
|
|
5,243
|
|
|
|
5,243
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
1,311,991
|
|
|
$
|
1,331,219
|
|
|
$
|
1,138,364
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Churchs Chicken
Austin (Riverside),
TX
Restaurant
|
|
|
|
Churchs Chicken
Austin (Oltorf), TX
Restaurant
|
|
|
|
Churchs Chicken
Balch Springs, TX
Restaurant
|
|
Gross leasable square footage
|
|
|
1,758
|
|
|
|
886
|
|
|
|
1,945
|
|
Date of purchase
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
Mortgage financing at date of purchase
|
|
$
|
522,960
|
|
|
$
|
50,082
|
|
|
$
|
373,465
|
|
Cash down payment
|
|
|
476,926
|
|
|
|
45,673
|
|
|
|
340,590
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
999,886
|
|
|
|
95,755
|
|
|
|
714,055
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
5,243
|
|
|
|
5,243
|
|
|
|
5,244
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
1,005,129
|
|
|
$
|
100,998
|
|
|
$
|
719,299
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-35
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Churchs Chicken
Beeville, TX
Restaurant
|
|
|
|
Churchs Chicken
Brownsville (Boca
Chica), TX
Restaurant
|
|
|
|
Churchs Chicken
Brownsville (Farm),
TX
Restaurant
|
|
Gross leasable square footage
|
|
|
1,360
|
|
|
|
1,335
|
|
|
|
420
|
|
Date of purchase
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
Mortgage financing at date of purchase
|
|
$
|
187,945
|
|
|
$
|
775,279
|
|
|
$
|
506,149
|
|
Cash down payment
|
|
|
171,400
|
|
|
|
707,035
|
|
|
|
461,594
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
359,345
|
|
|
|
1,482,314
|
|
|
|
967,743
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
5,243
|
|
|
|
5,243
|
|
|
|
5,244
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
364,588
|
|
|
$
|
1,487,557
|
|
|
$
|
972,987
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Churchs Chicken
Brownsville
(International), TX
Restaurant
|
|
|
|
Churchs Chicken
Brownsville (Padre Island), TX
Restaurant
|
|
|
|
Churchs Chicken
Brownsville
(Southmost), TX
Restaurant
|
|
Gross leasable square footage
|
|
|
1,169
|
|
|
|
1,723
|
|
|
|
1,784
|
|
Date of purchase
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
Mortgage financing at date of purchase
|
|
$
|
672,366
|
|
|
$
|
692,234
|
|
|
$
|
426,697
|
|
Cash down payment
|
|
|
613,181
|
|
|
|
631,300
|
|
|
|
389,138
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
1,285,547
|
|
|
|
1,323,534
|
|
|
|
815,835
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
5,243
|
|
|
|
5,243
|
|
|
|
5,243
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
1,290,790
|
|
|
$
|
1,328,777
|
|
|
$
|
821,078
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Churchs Chicken
Brownsville
(Elizabeth), TX
Restaurant
|
|
|
|
Churchs Chicken
Bryan, TX
Restaurant
|
|
|
|
Churchs Chicken
Carrolton, TX
Restaurant
|
|
Gross leasable square footage
|
|
|
1,428
|
|
|
|
1,200
|
|
|
|
1,934
|
|
Date of purchase
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
Mortgage financing at date of purchase
|
|
$
|
416,576
|
|
|
$
|
494,249
|
|
|
$
|
322,460
|
|
Cash down payment
|
|
|
379,907
|
|
|
|
450,743
|
|
|
|
294,076
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
796,483
|
|
|
|
944,992
|
|
|
|
616,536
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
5,244
|
|
|
|
5,244
|
|
|
|
5,243
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
801,727
|
|
|
$
|
950,236
|
|
|
$
|
621,779
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-36
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Churchs Chicken
Cleburne, TX
Restaurant
|
|
|
|
Churchs Chicken
Copperas Cove, TX
Restaurant
|
|
|
|
Churchs Chicken
Dallas (Buckner), TX
Restaurant
|
|
Gross leasable square footage
|
|
|
1,150
|
|
|
|
1,122
|
|
|
|
1,462
|
|
Date of purchase
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
Mortgage financing at date of purchase
|
|
$
|
250,473
|
|
|
$
|
169,131
|
|
|
$
|
237,648
|
|
Cash down payment
|
|
|
228,425
|
|
|
|
154,244
|
|
|
|
216,728
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
478,898
|
|
|
|
323,375
|
|
|
|
454,376
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
5,244
|
|
|
|
5,243
|
|
|
|
5,244
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
484,142
|
|
|
$
|
328,618
|
|
|
$
|
459,620
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Churchs Chicken
Dallas (Camp
Wisdom), TX
Restaurant
|
|
|
|
Churchs Chicken
Dallas (Gaston),
TX
Restaurant
|
|
|
|
Churchs Chicken
Dallas (Inwood), TX
Restaurant
|
|
Gross leasable square footage
|
|
|
2,123
|
|
|
|
1,386
|
|
|
|
1,100
|
|
Date of purchase
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
Mortgage financing at date of purchase
|
|
$
|
207,473
|
|
|
$
|
121,065
|
|
|
$
|
464,240
|
|
Cash down payment
|
|
|
189,210
|
|
|
|
110,409
|
|
|
|
423,375
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
396,683
|
|
|
|
231,474
|
|
|
|
887,615
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
5,244
|
|
|
|
5,243
|
|
|
|
5,244
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
401,927
|
|
|
$
|
236,717
|
|
|
$
|
892,859
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Churchs Chicken
Dallas (Lancaster),
TX Restaurant
|
|
|
|
Churchs Chicken
Dallas (Singleton),
TX Restaurant
|
|
|
|
Churchs Chicken
Dallas
(Mockingbird), TX
Restaurant
|
|
Gross leasable square footage
|
|
|
852
|
|
|
|
780
|
|
|
|
1,800
|
|
Date of purchase
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
Mortgage financing at date of purchase
|
|
$
|
277,499
|
|
|
$
|
40,011
|
|
|
$
|
292,357
|
|
Cash down payment
|
|
|
253,072
|
|
|
|
36,489
|
|
|
|
266,621
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
530,571
|
|
|
|
76,500
|
|
|
|
558,978
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
5,244
|
|
|
|
5,243
|
|
|
|
5,244
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
535,815
|
|
|
$
|
81,743
|
|
|
$
|
564,222
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-37
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Churchs Chicken
Donna, TX
Restaurant
|
|
|
|
Churchs Chicken
Eagle Pass, TX
Restaurant
|
|
|
|
Churchs Chicken
Edinburg, TX
Restaurant
|
|
Gross leasable square footage
|
|
|
1,470
|
|
|
|
1,335
|
|
|
|
1,924
|
|
Date of purchase
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
Mortgage financing at date of purchase
|
|
$
|
648,743
|
|
|
$
|
474,311
|
|
|
$
|
816,250
|
|
Cash down payment
|
|
|
591,638
|
|
|
|
432,560
|
|
|
|
744,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
1,240,381
|
|
|
|
906,871
|
|
|
|
1,560,650
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
5,244
|
|
|
|
5,243
|
|
|
|
5,243
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
1,245,625
|
|
|
$
|
912,114
|
|
|
$
|
1,565,893
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Churchs Chicken
Elsa, TX
Restaurant
|
|
|
|
Churchs Chicken
Floresville, TX
Restaurant
|
|
|
|
Churchs Chicken
Fort Worth
(Lackland), TX
Restaurant
|
|
Gross leasable square footage
|
|
|
420
|
|
|
|
1,218
|
|
|
|
1,406
|
|
Date of purchase
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
Mortgage financing at date of purchase
|
|
$
|
678,816
|
|
|
$
|
237,552
|
|
|
$
|
373,926
|
|
Cash down payment
|
|
|
619,064
|
|
|
|
216,642
|
|
|
|
341,011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
1,297,880
|
|
|
|
454,194
|
|
|
|
714,937
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
5,243
|
|
|
|
5,243
|
|
|
|
5,244
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
1,303,123
|
|
|
$
|
459,437
|
|
|
$
|
720,181
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Churchs Chicken
Fort Worth
(Mansfield), TX
Restaurant
|
|
|
|
Churchs Chicken
Fort Worth
(Miller), TX
Restaurant
|
|
|
|
Churchs Chicken
Fort Worth
(Seminary), TX
Restaurant
|
|
Gross leasable square footage
|
|
|
1,320
|
|
|
|
1,176
|
|
|
|
1,430
|
|
Date of purchase
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
Mortgage financing at date of purchase
|
|
$
|
325,264
|
|
|
$
|
293,535
|
|
|
$
|
348,382
|
|
Cash down payment
|
|
|
296,634
|
|
|
|
267,697
|
|
|
|
317,715
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
621,898
|
|
|
|
561,232
|
|
|
|
666,097
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
5,243
|
|
|
|
5,243
|
|
|
|
5,243
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
627,141
|
|
|
$
|
566,475
|
|
|
$
|
671,340
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-38
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Churchs Chicken
Garland, TX
Restaurant
|
|
|
|
Churchs Chicken
Grand Prairie
(Main), TX
Restaurant
|
|
|
|
Churchs Chicken
Grand Prairie
(Pioneer), TX
Restaurant
|
|
Gross leasable square footage
|
|
|
1,280
|
|
|
|
1,496
|
|
|
|
1,169
|
|
Date of purchase
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
Mortgage financing at date of purchase
|
|
$
|
211,939
|
|
|
$
|
266,579
|
|
|
$
|
358,086
|
|
Cash down payment
|
|
|
193,283
|
|
|
|
166,633
|
|
|
|
326,566
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
405,222
|
|
|
|
433,212
|
|
|
|
684,652
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
5,243
|
|
|
|
5,244
|
|
|
|
5,243
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
410,465
|
|
|
$
|
438,456
|
|
|
$
|
689,895
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Churchs Chicken
Greenville, TX
Restaurant
|
|
|
|
Churchs Chicken
Haltom City, TX
Restaurant
|
|
|
|
Churchs Chicken
Harlingen
(Sunshine), TX
Restaurant
|
|
Gross leasable square footage
|
|
|
983
|
|
|
|
950
|
|
|
|
1,470
|
|
Date of purchase
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
Mortgage financing at date of purchase
|
|
$
|
312,666
|
|
|
$
|
426,881
|
|
|
$
|
362,832
|
|
Cash down payment
|
|
|
285,144
|
|
|
|
389,305
|
|
|
|
330,894
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
597,810
|
|
|
|
816,186
|
|
|
|
693,726
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
5,243
|
|
|
|
5,243
|
|
|
|
5,244
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
603,053
|
|
|
$
|
821,429
|
|
|
$
|
698,970
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Churchs Chicken
Harlingen (Tyler),
TX
Restaurant
|
|
|
|
Churchs Chicken
Hildalgo, TX
Restaurant
|
|
|
|
Churchs Chicken
Irving, TX
Restaurant
|
|
Gross leasable square footage
|
|
|
1,516
|
|
|
|
2,600
|
|
|
|
780
|
|
Date of purchase
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
Mortgage financing at date of purchase
|
|
$
|
962,822
|
|
|
$
|
749,623
|
|
|
$
|
357,100
|
|
Cash down payment
|
|
|
878,071
|
|
|
|
683,637
|
|
|
|
325,667
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
1,840,893
|
|
|
|
1,433,260
|
|
|
|
682,767
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
5,243
|
|
|
|
5,244
|
|
|
|
5,243
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
1,846,136
|
|
|
$
|
1,438,504
|
|
|
$
|
688,010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-39
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Churchs Chicken
Kilgore, TX
Restaurant
|
|
|
|
Churchs Chicken
Killeen, TX
Restaurant
|
|
|
|
Churchs Chicken
Kingsville, TX
Restaurant
|
|
Gross leasable square footage
|
|
|
2,080
|
|
|
|
1,122
|
|
|
|
994
|
|
Date of purchase
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
Mortgage financing at date of purchase
|
|
$
|
236,648
|
|
|
$
|
343,002
|
|
|
$
|
302,827
|
|
Cash down payment
|
|
|
215,817
|
|
|
|
312,809
|
|
|
|
276,170
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
452,465
|
|
|
|
655,811
|
|
|
|
578,997
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
5,283
|
|
|
|
5,243
|
|
|
|
5,243
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
457,748
|
|
|
$
|
661,054
|
|
|
$
|
584,240
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Churchs Chicken
Kirby, TX
Restaurant
|
|
|
|
Churchs Chicken
La Feria, TX
Restaurant
|
|
|
|
Churchs Chicken
Laredo (Guadalupe), TX
Restaurant
|
|
Gross leasable square footage
|
|
|
1,800
|
|
|
|
2,123
|
|
|
|
1,590
|
|
Date of purchase
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
Mortgage financing at date of purchase
|
|
$
|
55,725
|
|
|
$
|
554,919
|
|
|
$
|
420,758
|
|
Cash down payment
|
|
|
50,819
|
|
|
|
506,073
|
|
|
|
383,721
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
106,544
|
|
|
|
1,060,992
|
|
|
|
804,479
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
5,244
|
|
|
|
5,243
|
|
|
|
5,244
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
111,788
|
|
|
$
|
1,066,235
|
|
|
$
|
809,723
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Churchs Chicken
Laredo (San Bernardo), TX
Restaurant
|
|
|
|
Churchs Chicken
Lewisville, TX
Restaurant
|
|
|
|
Churchs Chicken
Longview, TX
Restaurant
|
|
Gross leasable square footage
|
|
|
1,180
|
|
|
|
1,144
|
|
|
|
1,169
|
|
Date of purchase
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
Mortgage financing at date of purchase
|
|
$
|
739,289
|
|
|
$
|
667,723
|
|
|
$
|
290,655
|
|
Cash down payment
|
|
|
674,214
|
|
|
|
608,948
|
|
|
|
265,070
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
1,413,503
|
|
|
|
1,276,671
|
|
|
|
555,725
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
5,243
|
|
|
|
5,243
|
|
|
|
5,243
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
1,418,746
|
|
|
$
|
1,281,914
|
|
|
$
|
560,968
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-40
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Churchs Chicken
Lubbock (Ave Q), TX
Restaurant
|
|
|
|
Churchs Chicken
Lubbock (Broadway),
TX Restaurant
|
|
|
|
Churchs Chicken
Marlin, TX
Restaurant
|
|
Gross leasable square footage
|
|
|
2,123
|
|
|
|
950
|
|
|
|
1,274
|
|
Date of purchase
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
Mortgage financing at date of purchase
|
|
$
|
456,863
|
|
|
$
|
40,011
|
|
|
$
|
149,954
|
|
Cash down payment
|
|
|
416,647
|
|
|
|
36,489
|
|
|
|
136,755
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
873,510
|
|
|
|
76,500
|
|
|
|
286,709
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
5,243
|
|
|
|
5,243
|
|
|
|
5,243
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
878,753
|
|
|
$
|
81,743
|
|
|
$
|
291,952
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Churchs Chicken
McAllen (10th St),
TX
Restaurant
|
|
|
|
Churchs Chicken
McAllen (Nolana), TX
Restaurant
|
|
|
|
Churchs Chicken
Mercedes,
TX
Restaurant
|
|
Gross leasable square footage
|
|
|
1,144
|
|
|
|
1,336
|
|
|
|
1,176
|
|
Date of purchase
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
Mortgage financing at date of purchase
|
|
$
|
40,011
|
|
|
$
|
618,863
|
|
|
$
|
580,934
|
|
Cash down payment
|
|
|
36,489
|
|
|
|
564,388
|
|
|
|
529,798
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
76,500
|
|
|
|
1,183,251
|
|
|
|
1,110,732
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
5,243
|
|
|
|
5,243
|
|
|
|
5,243
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
81,743
|
|
|
$
|
1,188,494
|
|
|
$
|
1,115,975
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Churchs Chicken
Mesquite, TX
Restaurant
|
|
|
|
Churchs Chicken
Midland, TX
Restaurant
|
|
|
|
Churchs Chicken
Mission, TX
Restaurant
|
|
Gross leasable square footage
|
|
|
1,945
|
|
|
|
983
|
|
|
|
1,470
|
|
Date of purchase
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
Mortgage financing at date of purchase
|
|
$
|
276,588
|
|
|
$
|
61,712
|
|
|
$
|
609,998
|
|
Cash down payment
|
|
|
252,241
|
|
|
|
56,280
|
|
|
|
556,303
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
528,829
|
|
|
|
117,992
|
|
|
|
1,166,301
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
5,244
|
|
|
|
5,243
|
|
|
|
5,243
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
534,073
|
|
|
$
|
123,235
|
|
|
$
|
1,171,544
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-41
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Churchs Chicken
New Braunfels, TX
Restaurant
|
|
|
|
Churchs Chicken
Odessa (Andrews), TX
Restaurant
|
|
|
|
Churchs Chicken
Odessa (County), TX
Restaurant
|
|
Gross leasable square footage
|
|
|
1,144
|
|
|
|
983
|
|
|
|
1,335
|
|
Date of purchase
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
Mortgage financing at date of purchase
|
|
$
|
285,884
|
|
|
$
|
440,751
|
|
|
$
|
575,440
|
|
Cash down payment
|
|
|
260,720
|
|
|
|
401,955
|
|
|
|
524,787
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
546,604
|
|
|
|
842,706
|
|
|
|
1,100,227
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
5,243
|
|
|
|
5,243
|
|
|
|
5,244
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
551,847
|
|
|
$
|
847,949
|
|
|
$
|
1,105,471
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Churchs Chicken
Pharr, TX
Restaurant
|
|
|
|
Churchs Chicken
Pleasanton, TX
Restaurant
|
|
|
|
Churchs Chicken
Port Isabel, TX
Restaurant
|
|
Gross leasable square footage
|
|
|
1,800
|
|
|
|
420
|
|
|
|
2,123
|
|
Date of purchase
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
Mortgage financing at date of purchase
|
|
$
|
538,466
|
|
|
$
|
515,344
|
|
|
$
|
468,804
|
|
Cash down payment
|
|
|
491,069
|
|
|
|
469,980
|
|
|
|
427,537
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
1,029,535
|
|
|
|
985,324
|
|
|
|
896,341
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
5,243
|
|
|
|
5,244
|
|
|
|
5,244
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
1,034,778
|
|
|
$
|
990,568
|
|
|
$
|
901,585
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Churchs Chicken
Port Lavaca, TX
Restaurant
|
|
|
|
Churchs Chicken
Raymondville, TX
Restaurant
|
|
|
|
Churchs Chicken
Richland Hills, TX
Restaurant
|
|
Gross leasable square footage
|
|
|
1,750
|
|
|
|
1,169
|
|
|
|
1,100
|
|
Date of purchase
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
Mortgage financing at date of purchase
|
|
$
|
381,214
|
|
|
$
|
583,733
|
|
|
$
|
192,104
|
|
Cash down payment
|
|
|
347,657
|
|
|
|
532,351
|
|
|
|
175,195
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
728,871
|
|
|
|
1,116,084
|
|
|
|
367,299
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
5,243
|
|
|
|
5,243
|
|
|
|
5,243
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
734,114
|
|
|
$
|
1,121,327
|
|
|
$
|
372,542
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-42
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Churchs Chicken
Rio Grand City, TX
Restaurant
|
|
|
|
Churchs Chicken
Roma, TX
Restaurant
|
|
|
|
Churchs Chicken
San Antonio
(Commercial), TX
Restaurant
|
|
Gross leasable square footage
|
|
|
420
|
|
|
|
1,512
|
|
|
|
576
|
|
Date of purchase
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
Mortgage financing at date of purchase
|
|
$
|
1,053,427
|
|
|
$
|
671,362
|
|
|
$
|
207,055
|
|
Cash down payment
|
|
|
960,701
|
|
|
|
612,265
|
|
|
|
188,828
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
2,014,128
|
|
|
|
1,283,627
|
|
|
|
395,883
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
5,243
|
|
|
|
5,244
|
|
|
|
5,244
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
2,019,371
|
|
|
$
|
1,288,871
|
|
|
$
|
401,127
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Churchs Chicken
San Antonio (Five
Palms), TX
Restaurant
|
|
|
|
Churchs Chicken
San Antonio
(Flores), TX
Restaurant
|
|
|
|
Churchs Chicken
San Antonio (Gen
McMullen), TX
Restaurant
|
|
Gross leasable square footage
|
|
|
1,512
|
|
|
|
764
|
|
|
|
1,855
|
|
Date of purchase
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
Mortgage financing at date of purchase
|
|
$
|
568,079
|
|
|
$
|
124,546
|
|
|
$
|
437,939
|
|
Cash down payment
|
|
|
518,073
|
|
|
|
113,583
|
|
|
|
399,390
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
1,086,152
|
|
|
|
238,129
|
|
|
|
837,329
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
5,244
|
|
|
|
5,244
|
|
|
|
5,244
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
1,091,396
|
|
|
$
|
243,373
|
|
|
$
|
842,573
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Churchs Chicken
San Antonio
(Goliad), TX
Restaurant
|
|
|
|
Churchs Chicken
San Antonio
(Huebner), TX
Restaurant
|
|
|
|
Churchs Chicken
San Antonio (New
Braunfels), TX
Restaurant
|
|
Gross leasable square footage
|
|
|
638
|
|
|
|
420
|
|
|
|
5,468
|
|
Date of purchase
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
Mortgage financing at date of purchase
|
|
$
|
551,084
|
|
|
$
|
204,433
|
|
|
$
|
408,373
|
|
Cash down payment
|
|
|
502,575
|
|
|
|
186,438
|
|
|
|
372,426
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
1,053,659
|
|
|
|
390,871
|
|
|
|
780,799
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
5,243
|
|
|
|
5,244
|
|
|
|
5,243
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
1,058,902
|
|
|
$
|
396,115
|
|
|
$
|
786,042
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-43
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Churchs Chicken
San Antonio
(Hwy 90), TX Restaurant
|
|
|
|
Churchs Chicken
San Antonio (Perrin Beitel), TX
Restaurant
|
|
|
|
Churchs Chicken
San Antonio
(Rigsby), TX
Restaurant
|
|
Gross leasable square footage
|
|
|
1,260
|
|
|
|
1,144
|
|
|
|
480
|
|
Date of purchase
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
Mortgage financing at date of purchase
|
|
$
|
358,496
|
|
|
$
|
537,298
|
|
|
$
|
193,864
|
|
Cash down payment
|
|
|
326,939
|
|
|
|
490,003
|
|
|
|
176,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
685,435
|
|
|
|
1,027,301
|
|
|
|
370,664
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
5,243
|
|
|
|
5,244
|
|
|
|
5,243
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
690,678
|
|
|
$
|
1,032,545
|
|
|
$
|
375,907
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Churchs Chicken
San Antonio (San Pedro), TX
Restaurant
|
|
|
|
Churchs Chicken
San Antonio
(Walzem), TX
Restaurant
|
|
|
|
Churchs Chicken
San Antonio (West), TX
Restaurant
|
|
Gross leasable square footage
|
|
|
1,500
|
|
|
|
1,296
|
|
|
|
1,144
|
|
Date of purchase
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
Mortgage financing at date of purchase
|
|
$
|
392,419
|
|
|
$
|
326,872
|
|
|
$
|
201,356
|
|
Cash down payment
|
|
|
357,878
|
|
|
|
298,100
|
|
|
|
183,632
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
750,297
|
|
|
|
624,972
|
|
|
|
384,988
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
5,243
|
|
|
|
5,244
|
|
|
|
5,243
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
755,540
|
|
|
$
|
630,216
|
|
|
$
|
390,231
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Churchs Chicken
San Antonio
(Bitters), TX
Restaurant
|
|
|
|
Churchs Chicken
San Antonio
(Wurzbach), TX
Restaurant
|
|
|
|
Churchs Chicken
San Antonio (White), TX
Restaurant
|
|
Gross leasable square footage
|
|
|
2,378
|
|
|
|
1,118
|
|
|
|
800
|
|
Date of purchase
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
Mortgage financing at date of purchase
|
|
$
|
249,028
|
|
|
$
|
212,761
|
|
|
$
|
488,212
|
|
Cash down payment
|
|
|
227,108
|
|
|
|
194,032
|
|
|
|
445,238
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
476,136
|
|
|
|
406,793
|
|
|
|
933,450
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
5,243
|
|
|
|
5,244
|
|
|
|
5,243
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
481,379
|
|
|
$
|
412,037
|
|
|
$
|
938,693
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-44
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Churchs Chicken
San Antonio
(Zarzamora), TX
Restaurant
|
|
|
|
Churchs Chicken
San Benito, TX
Restaurant
|
|
|
|
Churchs Chicken
Temple, TX
Restaurant
|
|
Gross leasable square footage
|
|
|
780
|
|
|
|
1,335
|
|
|
|
1,176
|
|
Date of purchase
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
Mortgage financing at date of purchase
|
|
$
|
162,249
|
|
|
$
|
1,248,408
|
|
|
$
|
573,162
|
|
Cash down payment
|
|
|
147,967
|
|
|
|
1,138,518
|
|
|
|
522,709
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
310,216
|
|
|
|
2,386,926
|
|
|
|
1,095,871
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
5,243
|
|
|
|
5,244
|
|
|
|
5,243
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
315,459
|
|
|
$
|
2,392,170
|
|
|
$
|
1,101,114
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Churchs Chicken
Tyler, TX
Restaurant
|
|
|
|
Churchs Chicken
Universal City, TX Restaurant
|
|
|
|
Churchs Chicken
Victoria (Ben
Jordan), TX
Restaurant
|
|
Gross leasable square footage
|
|
|
1,144
|
|
|
|
1,169
|
|
|
|
1,169
|
|
Date of purchase
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
Mortgage financing at date of purchase
|
|
$
|
311,207
|
|
|
$
|
319,430
|
|
|
$
|
250,733
|
|
Cash down payment
|
|
|
283,812
|
|
|
|
291,312
|
|
|
|
228,662
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
595,019
|
|
|
|
610,742
|
|
|
|
479,395
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
5,243
|
|
|
|
5,244
|
|
|
|
5,243
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
600,262
|
|
|
$
|
615,986
|
|
|
$
|
484,638
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Churchs Chicken
Victoria (Rio
Grande), TX
Restaurant
|
|
|
|
Churchs Chicken
Waco, TX
Restaurant
|
|
|
|
Churchs Chicken
Weslaco
(Hwy 83), TX
Restaurant
|
|
Gross leasable square footage
|
|
|
1,701
|
|
|
|
1,196
|
|
|
|
1,300
|
|
Date of purchase
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
Mortgage financing at date of purchase
|
|
$
|
242,767
|
|
|
$
|
398,736
|
|
|
$
|
613,636
|
|
Cash down payment
|
|
|
221,397
|
|
|
|
363,636
|
|
|
|
559,621
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
464,164
|
|
|
|
762,372
|
|
|
|
1,173,257
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
5,244
|
|
|
|
5,244
|
|
|
|
5,243
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
469,408
|
|
|
$
|
767,616
|
|
|
$
|
1,178,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-45
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Churchs Chicken
Weslaco
(Texas), TX
Restaurant
|
|
|
|
Churchs Chicken
Norfolk (Hampton), VA
Restaurant
|
|
|
|
Churchs Chicken
Norfolk (Princess
Ann), VA
Restaurant
|
|
Gross leasable square footage
|
|
|
1,575
|
|
|
|
1,100
|
|
|
|
1,572
|
|
Date of purchase
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
|
|
10/31/08
|
|
Mortgage financing at date of purchase
|
|
$
|
787,813
|
|
|
$
|
240,954
|
|
|
$
|
372,815
|
|
Cash down payment
|
|
|
718,465
|
|
|
|
219,744
|
|
|
|
339,998
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
1,506,278
|
|
|
|
460,698
|
|
|
|
712,813
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
5,243
|
|
|
|
5,448
|
|
|
|
5,720
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
1,511,521
|
|
|
$
|
466,146
|
|
|
$
|
718,533
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Churchs Chicken
Portsmouth, VA
Restaurant
|
|
|
|
Tractor Supply
LaGrange, KY
Specialty Retail
|
|
|
|
Walgreens
Evansville, IN
Drugstore
|
|
Gross leasable square footage
|
|
|
1,169
|
|
|
|
19,097
|
|
|
|
14,820
|
|
Date of purchase
|
|
|
10/31/08
|
|
|
|
11/19/08
|
|
|
|
11/25/08
|
|
Mortgage financing at date of purchase
|
|
$
|
426,285
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
388,761
|
|
|
|
3,372,715
|
|
|
|
4,794,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
815,046
|
|
|
|
3,372,715
|
|
|
|
4,794,000
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
5,832
|
|
|
|
37,160
|
|
|
|
18,173
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
820,878
|
|
|
$
|
3,409,875
|
|
|
$
|
4,812,173
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
CVS
Carrolton, TX
Drugstore
|
|
|
|
CVS
Kissimmee, FL
Drugstore
|
|
|
|
CVS
Lake Worth, TX
Drugstore
|
|
Gross leasable square footage
|
|
|
9,504
|
|
|
|
9,504
|
|
|
|
9,504
|
|
Date of purchase
|
|
|
12/19/08
|
|
|
|
12/19/08
|
|
|
|
12/19/08
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
2,158,728
|
|
|
|
2,568,258
|
|
|
|
1,886,184
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
2,158,728
|
|
|
|
2,568,258
|
|
|
|
1,886,184
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
33,223
|
|
|
|
31,085
|
|
|
|
32,669
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
2,191,951
|
|
|
$
|
2,599,343
|
|
|
$
|
1,918,853
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-46
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
CVS
Richardson, TX
Drugstore
|
|
|
|
CVS
River Oaks, TX
Drugstore
|
|
|
|
CVS
The Colony, TX
Drugstore
|
|
Gross leasable square footage
|
|
|
10,560
|
|
|
|
10,908
|
|
|
|
9,504
|
|
Date of purchase
|
|
|
12/19/08
|
|
|
|
12/19/08
|
|
|
|
12/19/08
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
2,450,448
|
|
|
|
2,809,080
|
|
|
|
2,000,118
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
2,450,448
|
|
|
|
2,809,080
|
|
|
|
2,000,118
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
|
|
Other cash expenditures capitalized
|
|
|
35,734
|
|
|
|
37,644
|
|
|
|
33,292
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
2,486,182
|
|
|
$
|
2,846,724
|
|
|
$
|
2,033,410
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
CVS
Wichita Falls, TX
Drugstore
|
|
|
|
CVS
Wichita Falls
(SW), TX
Drugstore
|
|
|
|
BJs Wholesale
Club Woodstock,
GA Warehouse
|
|
Gross leasable square footage
|
|
|
9,504
|
|
|
|
9,504
|
|
|
|
115,426
|
|
Date of purchase
|
|
|
12/19/08
|
|
|
|
12/19/08
|
|
|
|
01/29/09
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
10,131,105
|
|
Cash down payment
|
|
|
1,918,416
|
|
|
|
2,197,386
|
|
|
|
6,239,895
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
1,918,416
|
|
|
|
2,197,386
|
|
|
|
16,371,000
|
|
Other cash expenditures expensed
|
|
|
|
|
|
|
|
|
|
|
35,072
|
|
Other cash expenditures capitalized
|
|
|
32,924
|
|
|
|
34,535
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
1,951,340
|
|
|
$
|
2,231,921
|
|
|
$
|
16,406,072
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Chilis
Tilton, NH
Restaurant
|
|
|
|
Kohls
Tilton, NH
Department Store
|
|
|
|
Lowes
Tilton, NH
Home Improvement
|
|
Gross leasable square footage
|
|
|
(3
|
)
|
|
|
(3
|
)
|
|
|
(3
|
)
|
Date of purchase
|
|
|
03/27/09
|
|
|
|
03/27/09
|
|
|
|
03/27/09
|
|
Mortgage financing at date of purchase
|
|
$
|
1,260,000
|
|
|
$
|
3,780,000
|
|
|
$
|
12,960,000
|
|
Cash down payment
|
|
|
75,415
|
|
|
|
299,382
|
|
|
|
765,248
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
1,335,415
|
|
|
|
4,079,382
|
|
|
|
13,725,248
|
|
Other cash expenditures expensed
|
|
|
38,692
|
|
|
|
85,563
|
|
|
|
240,669
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
1,374,107
|
|
|
$
|
4,164,945
|
|
|
$
|
13,965,917
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-47
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
CVS
Myrtle Beach, SC
Drugstore
|
|
|
|
Walgreens
Austin, MN
Drugstore
|
|
|
|
Walgreens
Canton, IL
Drugstore
|
|
Gross leasable square footage
|
|
|
11,970
|
|
|
|
14,820
|
|
|
|
14,490
|
|
Date of purchase
|
|
|
03/27/09
|
|
|
|
03/27/09
|
|
|
|
03/27/09
|
|
Mortgage financing at date of purchase
|
|
$
|
4,788,000
|
|
|
$
|
3,531,000
|
|
|
$
|
4,428,500
|
|
Cash down payment
|
|
|
426,905
|
|
|
|
199,004
|
|
|
|
510,026
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
5,214,905
|
|
|
|
3,730,004
|
|
|
|
4,938,526
|
|
Other cash expenditures expensed
|
|
|
34,254
|
|
|
|
29,241
|
|
|
|
31,968
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
5,249,159
|
|
|
$
|
3,759,245
|
|
|
$
|
4,970,494
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Walgreens
Galloway, OH
Drugstore
|
|
|
|
Walgreens
Humble, TX
Drugstore
|
|
|
|
Walgreens
Memphis, TN
Drugstore
|
|
Gross leasable square footage
|
|
|
14,560
|
|
|
|
14,560
|
|
|
|
14,490
|
|
Date of purchase
|
|
|
03/27/09
|
|
|
|
03/27/09
|
|
|
|
03/27/09
|
|
Mortgage financing at date of purchase
|
|
$
|
4,250,000
|
|
|
$
|
4,395,000
|
|
|
$
|
5,058,000
|
|
Cash down payment
|
|
|
596,022
|
|
|
|
849,386
|
|
|
|
611,607
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
4,846,022
|
|
|
|
5,244,386
|
|
|
|
5,669,607
|
|
Other cash expenditures expensed
|
|
|
35,594
|
|
|
|
26,980
|
|
|
|
39,684
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
4,881,616
|
|
|
$
|
5,271,366
|
|
|
$
|
5,709,291
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Walgreens
Parkville, MO
Drugstore
|
|
|
|
Walgreens
San Antonio, TX
Drugstore
|
|
|
|
Walgreens
Toledo, OH
Drugstore
|
|
Gross leasable square footage
|
|
|
14,820
|
|
|
|
14,560
|
|
|
|
14,820
|
|
Date of purchase
|
|
|
03/27/09
|
|
|
|
03/27/09
|
|
|
|
03/27/09
|
|
Mortgage financing at date of purchase
|
|
$
|
4,274,000
|
|
|
$
|
4,060,000
|
|
|
$
|
5,400,000
|
|
Cash down payment
|
|
|
518,459
|
|
|
|
789,006
|
|
|
|
284,527
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
4,792,459
|
|
|
|
4,849,006
|
|
|
|
5,684,527
|
|
Other cash expenditures expensed
|
|
|
26,571
|
|
|
|
25,754
|
|
|
|
37,312
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
4,819,030
|
|
|
$
|
4,874,760
|
|
|
$
|
5,721,839
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-48
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
CVS
Maynard, MA
Drugstore
|
|
|
|
CVS
Waynesville, NC
Drugstore
|
|
|
|
Walgreens
Antioch, TN
Drugstore
|
|
Gross leasable square footage
|
|
|
10,880
|
|
|
|
10,055
|
|
|
|
14,490
|
|
Date of purchase
|
|
|
03/31/09
|
|
|
|
03/31/09
|
|
|
|
03/31/09
|
|
Mortgage financing at date of purchase
|
|
$
|
5,596,000
|
|
|
$
|
3,966,000
|
|
|
$
|
4,425,000
|
|
Cash down payment
|
|
|
247,873
|
|
|
|
331,115
|
|
|
|
424,006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
5,843,873
|
|
|
|
4,297,115
|
|
|
|
4,849,006
|
|
Other cash expenditures expensed
|
|
|
35,716
|
|
|
|
29,908
|
|
|
|
48,728
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
5,879,589
|
|
|
$
|
4,327,023
|
|
|
$
|
4,897,734
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Walgreens
Decatur, IL
Drugstore
|
|
|
|
Walgreens
Long Beach, MS
Drugstore
|
|
|
|
Walgreens
Roselle, NJ
Drugstore
|
|
Gross leasable square footage
|
|
|
14,490
|
|
|
|
14,820
|
|
|
|
12,875
|
|
Date of purchase
|
|
|
03/31/09
|
|
|
|
03/31/09
|
|
|
|
03/31/09
|
|
Mortgage financing at date of purchase
|
|
$
|
4,003,000
|
|
|
$
|
3,662,000
|
|
|
$
|
5,742,000
|
|
Cash down payment
|
|
|
562,525
|
|
|
|
417,133
|
|
|
|
673,608
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
4,565,525
|
|
|
|
4,079,133
|
|
|
|
6,415,608
|
|
Other cash expenditures expensed
|
|
|
30,383
|
|
|
|
26,200
|
|
|
|
110,185
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
4,595,908
|
|
|
$
|
4,105,333
|
|
|
$
|
6,525,793
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Walgreens
Saraland, AL
Drugstore
|
|
|
|
LA Fitness
League City, TX
Fitness
|
|
|
|
Tractor Supply
Lowville, NY
Specialty Retail
|
|
Gross leasable square footage
|
|
|
14,560
|
|
|
|
45,000
|
|
|
|
19,097
|
|
Date of purchase
|
|
|
03/31/09
|
|
|
|
05/21/10
|
|
|
|
06/03/10
|
|
Mortgage financing at date of purchase
|
|
$
|
5,079,000
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
366,807
|
|
|
|
7,481,700
|
|
|
|
2,246,040
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
5,445,807
|
|
|
|
7,481,700
|
|
|
|
2,246,040
|
|
Other cash expenditures expensed
|
|
|
28,667
|
|
|
|
63,035
|
|
|
|
31,086
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
5,474,474
|
|
|
$
|
7,544,735
|
|
|
$
|
2,277,126
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-49
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Tractor Supply
Malone, NY
Specialty Retail
|
|
|
|
LA Fitness
Naperville, IL
Fitness
|
|
|
|
CVS
Indianapolis, IN
Drugstore
|
|
Gross leasable square footage
|
|
|
19,097
|
|
|
|
45,000
|
|
|
|
12,222
|
|
Date of purchase
|
|
|
06/03/10
|
|
|
|
06/30/10
|
|
|
|
07/21/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
2,292,960
|
|
|
|
9,384,000
|
|
|
|
3,282,386
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
2,292,960
|
|
|
|
9,384,000
|
|
|
|
3,282,386
|
|
Other cash expenditures expensed
|
|
|
31,723
|
|
|
|
66,148
|
|
|
|
19,675
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
2,324,683
|
|
|
$
|
9,450,148
|
|
|
$
|
3,302,061
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Tractor Supply
Elletsville, IN
Specialty Retail
|
|
|
|
CVS
Lincoln, IL
Drugstore
|
|
|
|
Ruth Chris
Metairie, LA
Restaurant
|
|
Gross leasable square footage
|
|
|
19,097
|
|
|
|
13,225
|
|
|
|
5,189
|
|
Date of purchase
|
|
|
09/13/10
|
|
|
|
09/17/10
|
|
|
|
09/27/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
2,658,182
|
|
|
|
3,243,600
|
|
|
|
3,616,364
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
2,658,182
|
|
|
|
3,243,600
|
|
|
|
3,616,364
|
|
Other cash expenditures expensed
|
|
|
46,081
|
|
|
|
20,032
|
|
|
|
24,344
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
2,704,263
|
|
|
$
|
3,263,632
|
|
|
$
|
3,640,708
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Ruth Chris
Sarasota, FL
Restaurant
|
|
|
|
Columbus Fish
Market Grandview, OH
Restaurant
|
|
|
|
J. Jill
Tilton, NH
Department Store
|
|
Gross leasable square footage
|
|
|
7,726
|
|
|
|
7,766
|
|
|
|
573,000
|
|
Date of purchase
|
|
|
09/27/10
|
|
|
|
09/27/10
|
|
|
|
09/30/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
3,078,998
|
|
|
|
3,327,054
|
|
|
|
23,538,461
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
3,078,998
|
|
|
|
3,327,054
|
|
|
|
23,538,461
|
|
Other cash expenditures expensed
|
|
|
20,273
|
|
|
|
23,976
|
|
|
|
212,919
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
3,099,271
|
|
|
$
|
3,351,030
|
|
|
$
|
23,751,380
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-50
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Childtime
Childcare
Cuyahoga Falls,
OH Child Care
and Development
|
|
|
|
Childtime
Childcare
Arlington, TX
Child Care and
Development
|
|
|
|
Childtime
Childcare
Oklahoma City,
OK Child Care
and Development
|
|
Gross leasable square footage
|
|
|
5,934
|
|
|
|
10,845
|
|
|
|
6,656
|
|
Date of purchase
|
|
|
12/15/10
|
|
|
|
12/15/10
|
|
|
|
12/15/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
837,082
|
|
|
|
997,767
|
|
|
|
529,217
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
837,082
|
|
|
|
997,767
|
|
|
|
529,217
|
|
Other cash expenditures expensed
|
|
|
39,206
|
|
|
|
34,422
|
|
|
|
23,825
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
876,288
|
|
|
$
|
1,032,189
|
|
|
$
|
553,042
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Childtime Childcare
Oklahoma City,
OK Child Care
and Development
|
|
|
|
Childtime Childcare
Rochester, NY
Child Care and
Development
|
|
|
|
TutorTime
Pittsburgh, PA
Child Care and
Development
|
|
Gross leasable square footage
|
|
|
6,671
|
|
|
|
4,801
|
|
|
|
10,071
|
|
Date of purchase
|
|
|
12/15/10
|
|
|
|
12/15/10
|
|
|
|
12/15/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
913,645
|
|
|
|
733,724
|
|
|
|
1,222,192
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
913,645
|
|
|
|
733,724
|
|
|
|
1,222,192
|
|
Other cash expenditures expensed
|
|
|
33,310
|
|
|
|
27,953
|
|
|
|
41,934
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
946,955
|
|
|
$
|
761,677
|
|
|
$
|
1,264,126
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Childtime Childcare
Modesto, CA
Child Care and
Development
|
|
|
|
CVS
Azle, TX
Drugstore
|
|
|
|
Logans Roadhouse
Trussville, AL
Restaurant
|
|
Gross leasable square footage
|
|
|
6,464
|
|
|
|
12,900
|
|
|
|
7,236
|
|
Date of purchase
|
|
|
12/15/10
|
|
|
|
12/16/10
|
|
|
|
12/17/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
899,581
|
|
|
|
4,947,000
|
|
|
|
2,789,259
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
899,581
|
|
|
|
4,947,000
|
|
|
|
2,789,259
|
|
Other cash expenditures expensed
|
|
|
31,307
|
|
|
|
26,788
|
|
|
|
18,578
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
930,888
|
|
|
$
|
4,973,788
|
|
|
$
|
2,807,837
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-51
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Logans Roadhouse
Wichita Falls, TX
Restaurant
|
|
|
|
Ivex Packaging
New Castle, PA
Distribution Center
|
|
|
|
Walgreens
Mt. Pleasant, TX
Drugstore
|
|
Gross leasable square footage
|
|
|
8,026
|
|
|
|
135,303
|
|
|
|
14,820
|
|
Date of purchase
|
|
|
12/17/10
|
|
|
|
12/20/10
|
|
|
|
12/21/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
2,789,259
|
|
|
|
5,100,000
|
|
|
|
5,647,740
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
2,789,259
|
|
|
|
5,100,000
|
|
|
|
5,647,740
|
|
Other cash expenditures expensed
|
|
|
19,370
|
|
|
|
37,769
|
|
|
|
24,500
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
2,808,629
|
|
|
$
|
5,137,769
|
|
|
$
|
5,672,240
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Advanced Auto
Charlotte, NC
Automotive Parts
|
|
|
|
Advanced Auto
Irvington, NJ
Automotive Parts
|
|
|
|
Advanced Auto
Midwest City, OK
Automotive Parts
|
|
Gross leasable square footage
|
|
|
6,896
|
|
|
|
6,684
|
|
|
|
7,000
|
|
Date of purchase
|
|
|
12/22/10
|
|
|
|
12/22/10
|
|
|
|
12/22/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
1,656,805
|
|
|
|
2,297,126
|
|
|
|
1,703,886
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
1,656,805
|
|
|
|
2,297,126
|
|
|
|
1,703,886
|
|
Other cash expenditures expensed
|
|
|
25,630
|
|
|
|
55,588
|
|
|
|
31,382
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
1,682,435
|
|
|
$
|
2,352,714
|
|
|
$
|
1,735,268
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Advanced Auto
Penns Grove, NJ
Automotive Parts
|
|
|
|
Advanced Auto
St. Francis, WI
Automotive Parts
|
|
|
|
Advanced Auto
Willingboro, NJ
Automotive Parts
|
|
Gross leasable square footage
|
|
|
7,000
|
|
|
|
6,889
|
|
|
|
6,781
|
|
Date of purchase
|
|
|
12/22/10
|
|
|
|
12/22/10
|
|
|
|
12/22/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
1,585,823
|
|
|
|
1,653,698
|
|
|
|
1,822,973
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
1,585,823
|
|
|
|
1,653,698
|
|
|
|
1,822,973
|
|
Other cash expenditures expensed
|
|
|
45,921
|
|
|
|
25,831
|
|
|
|
48,798
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
1,631,744
|
|
|
$
|
1,679,529
|
|
|
$
|
1,871,771
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-52
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust II,
|
|
|
Property Trust II,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Advanced Auto
Dunellen, NJ
Automotive Parts
|
|
|
|
JoAnns Fabric
Independence, MO
Specialty Retail
|
|
|
|
CVS(1)
Fredericksburg,
VA Drugstore
|
|
Gross leasable square footage
|
|
|
6,781
|
|
|
|
46,350
|
|
|
|
12,900
|
|
Date of purchase
|
|
|
12/22/10
|
|
|
|
12/23/10
|
|
|
|
01/06/09
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
5,504,000
|
|
Cash down payment
|
|
|
2,753,375
|
|
|
|
4,625,000
|
|
|
|
734,861
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
2,753,375
|
|
|
|
4,625,000
|
|
|
|
6,238,861
|
|
Other cash expenditures expensed
|
|
|
61,045
|
|
|
|
19,287
|
|
|
|
115,852
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
2,814,420
|
|
|
$
|
4,644,287
|
|
|
$
|
6,354,713
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Walgreens(1)
Indianapolis, IN
Drugstore
|
|
|
|
Walgreens(1)
Tulsa (South Yale), OK
Drugstore
|
|
|
|
Kohls(1)
Burnsville, MN
Department Store
|
|
Gross leasable square footage
|
|
|
14,820
|
|
|
|
13,650
|
|
|
|
101,346
|
|
Date of purchase
|
|
|
01/06/09
|
|
|
|
01/06/09
|
|
|
|
01/09/09
|
|
Mortgage financing at date of purchase
|
|
$
|
5,625,000
|
|
|
$
|
3,512,000
|
|
|
$
|
9,310,000
|
|
Cash down payment
|
|
|
750,000
|
|
|
|
468,040
|
|
|
|
1,241,900
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
6,375,000
|
|
|
|
3,980,040
|
|
|
|
10,551,900
|
|
Other cash expenditures expensed
|
|
|
31,054
|
|
|
|
21,365
|
|
|
|
22,080
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
6,406,054
|
|
|
$
|
4,001,405
|
|
|
$
|
10,573,980
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Walgreens(1)
Fredericksburg, VA
Drugstore
|
|
|
|
Sams Club(1)
Hoover, AL
Warehouse
|
|
|
|
Lowes
Las Vegas, NV
Home Improvement
|
|
Gross leasable square footage
|
|
|
14,820
|
|
|
|
115,347
|
|
|
|
(3
|
)
|
Date of purchase
|
|
|
01/09/09
|
|
|
|
01/15/09
|
|
|
|
03/31/09
|
|
Mortgage financing at date of purchase
|
|
$
|
6,560,000
|
|
|
$
|
11,070,000
|
|
|
$
|
|
|
Cash down payment
|
|
|
875,047
|
|
|
|
1,476,000
|
|
|
|
10,954,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
7,435,047
|
|
|
|
12,546,000
|
|
|
|
10,954,800
|
|
Other cash expenditures expensed
|
|
|
132,900
|
|
|
|
107,454
|
|
|
|
17,639
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
7,567,947
|
|
|
$
|
12,653,454
|
|
|
$
|
10,972,439
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-53
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Wal-Mart
Las Vegas, NV
Discount Retail
|
|
|
|
Wal-Mart
Albuquerque, NM
Discount Retail
|
|
|
|
Home Depot
Las Vegas, NV
Home Improvement
|
|
Gross leasable square footage
|
|
|
(3
|
)
|
|
|
(3
|
)
|
|
|
(3
|
)
|
Date of purchase
|
|
|
03/31/09
|
|
|
|
03/31/09
|
|
|
|
04/15/09
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
15,060,300
|
|
|
|
18,416,100
|
|
|
|
8,544,802
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
15,060,300
|
|
|
|
18,416,100
|
|
|
|
8,544,802
|
|
Other cash expenditures expensed
|
|
|
48,935
|
|
|
|
55,309
|
|
|
|
54,958
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
15,109,235
|
|
|
$
|
18,471,409
|
|
|
$
|
8,599,760
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Home Depot
Odessa, TX
Home Improvement
|
|
|
|
Home Depot
San Diego, CA
Home Improvement
|
|
|
|
Home Depot
San Jose, CA
Home Improvement
|
|
Gross leasable square footage
|
|
|
(3
|
)
|
|
|
(3
|
)
|
|
|
(3
|
)
|
Date of purchase
|
|
|
04/15/09
|
|
|
|
04/15/09
|
|
|
|
04/15/09
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
9,444,938
|
|
|
|
12,599,724
|
|
|
|
8,187,190
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
9,444,938
|
|
|
|
12,599,724
|
|
|
|
8,187,190
|
|
Other cash expenditures expensed
|
|
|
62,326
|
|
|
|
55,125
|
|
|
|
54,441
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
9,507,264
|
|
|
$
|
12,654,849
|
|
|
$
|
8,241,631
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Walgreens
Dunkirk, NY
Drugstore
|
|
|
|
Aaron Rents
Humble, TX
Specialty Retail
|
|
|
|
Aaron Rents
Indianapolis, IN
Specialty Retail
|
|
Gross leasable square footage
|
|
|
13,650
|
|
|
|
8,000
|
|
|
|
7,667
|
|
Date of purchase
|
|
|
05/29/09
|
|
|
|
05/29/09
|
|
|
|
05/29/09
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
3,937,971
|
|
|
|
1,412,700
|
|
|
|
998,580
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
3,937,971
|
|
|
|
1,412,700
|
|
|
|
998,580
|
|
Other cash expenditures expensed
|
|
|
33,273
|
|
|
|
18,647
|
|
|
|
22,055
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
3,971,244
|
|
|
$
|
1,431,347
|
|
|
$
|
1,020,635
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-54
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Aaron Rents
Meadville, PA
Specialty Retail
|
|
|
|
Aaron Rents
Mexia, TX
Specialty Retail
|
|
|
|
Aaron Rents
Minden, LA
Specialty Retail
|
|
Gross leasable square footage
|
|
|
11,988
|
|
|
|
8,000
|
|
|
|
8,000
|
|
Date of purchase
|
|
|
05/29/09
|
|
|
|
05/29/09
|
|
|
|
05/29/09
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
1,158,720
|
|
|
|
1,096,500
|
|
|
|
1,377,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
1,158,720
|
|
|
|
1,096,500
|
|
|
|
1,377,000
|
|
Other cash expenditures expensed
|
|
|
33,218
|
|
|
|
17,744
|
|
|
|
20,243
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
1,191,938
|
|
|
$
|
1,114,244
|
|
|
$
|
1,397,243
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Aaron Rents
Odessa, TX
Specialty Retail
|
|
|
|
Aaron Rents
Oxford, AL
Specialty Retail
|
|
|
|
Aaron Rents
Shawnee, OK
Specialty Retail
|
|
Gross leasable square footage
|
|
|
6,240
|
|
|
|
7,480
|
|
|
|
8,000
|
|
Date of purchase
|
|
|
05/29/09
|
|
|
|
05/29/09
|
|
|
|
05/29/09
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
748,680
|
|
|
|
758,880
|
|
|
|
1,250,520
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
748,680
|
|
|
|
758,880
|
|
|
|
1,250,520
|
|
Other cash expenditures expensed
|
|
|
17,006
|
|
|
|
19,294
|
|
|
|
19,563
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
765,686
|
|
|
$
|
778,174
|
|
|
$
|
1,270,083
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Aaron Rents
Battle Creek, MI
Specialty Retail
|
|
|
|
Aaron Rents
Chattanooga, TN
Specialty Retail
|
|
|
|
Aaron Rents
Columbia, SC
Specialty Retail
|
|
Gross leasable square footage
|
|
|
8,400
|
|
|
|
11,368
|
|
|
|
12,516
|
|
Date of purchase
|
|
|
06/18/09
|
|
|
|
06/18/09
|
|
|
|
06/18/09
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
954,720
|
|
|
|
1,052,640
|
|
|
|
1,207,680
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
954,720
|
|
|
|
1,052,640
|
|
|
|
1,207,680
|
|
Other cash expenditures expensed
|
|
|
19,883
|
|
|
|
20,711
|
|
|
|
17,871
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
974,603
|
|
|
$
|
1,073,351
|
|
|
$
|
1,225,551
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-55
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Aaron Rents
Mansura, LA
Specialty Retail
|
|
|
|
Aaron Rents
Statesboro, GA
Specialty Retail
|
|
|
|
Aaron Rents
Pasadena, TX
Specialty Retail
|
|
Gross leasable square footage
|
|
|
7,207
|
|
|
|
8,050
|
|
|
|
8,000
|
|
Date of purchase
|
|
|
06/18/09
|
|
|
|
06/18/09
|
|
|
|
06/18/09
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
539,580
|
|
|
|
1,248,480
|
|
|
|
1,410,660
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
539,580
|
|
|
|
1,248,480
|
|
|
|
1,410,660
|
|
Other cash expenditures expensed
|
|
|
19,192
|
|
|
|
17,484
|
|
|
|
18,082
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
558,772
|
|
|
$
|
1,265,964
|
|
|
$
|
1,428,742
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Aaron Rents
Killeen, TX
Specialty Retail
|
|
|
|
Aaron Rents
Livingston, TX
Specialty Retail
|
|
|
|
Academy Sports
Bossier City, LA
Sporting Goods
|
|
Gross leasable square footage
|
|
|
37,500
|
|
|
|
10,000
|
|
|
|
89,929
|
|
Date of purchase
|
|
|
06/18/09
|
|
|
|
06/18/09
|
|
|
|
06/19/09
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
3,333,360
|
|
|
|
1,401,480
|
|
|
|
8,670,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
3,333,360
|
|
|
|
1,401,480
|
|
|
|
8,670,000
|
|
Other cash expenditures expensed
|
|
|
21,395
|
|
|
|
18,173
|
|
|
|
30,810
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
3,354,755
|
|
|
$
|
1,419,653
|
|
|
$
|
8,700,810
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Academy Sports
Laredo, TX
Sporting Goods
|
|
|
|
Academy Sports
Montgomery, AL
Sporting Goods
|
|
|
|
Academy Sports
Fort Worth, TX
Sporting Goods
|
|
Gross leasable square footage
|
|
|
86,000
|
|
|
|
76,786
|
|
|
|
83,741
|
|
Date of purchase
|
|
|
06/19/09
|
|
|
|
06/19/09
|
|
|
|
06/19/09
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
9,078,000
|
|
|
|
9,588,000
|
|
|
|
7,752,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
9,078,000
|
|
|
|
9,588,000
|
|
|
|
7,752,000
|
|
Other cash expenditures expensed
|
|
|
28,182
|
|
|
|
22,860
|
|
|
|
26,785
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
9,106,182
|
|
|
$
|
9,610,860
|
|
|
$
|
7,778,785
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-56
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Cracker Barrel
Fort Mill, SC
Restaurant
|
|
|
|
Cracker Barrel
Piedmont, SC
Restaurant
|
|
|
|
Cracker Barrel
Rocky Mount, NC
Restaurant
|
|
Gross leasable square footage
|
|
|
10,179
|
|
|
|
10,170
|
|
|
|
10,097
|
|
Date of purchase
|
|
|
06/30/09
|
|
|
|
06/30/09
|
|
|
|
06/30/09
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
3,135,834
|
|
|
|
3,533,001
|
|
|
|
2,842,812
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
3,135,834
|
|
|
|
3,533,001
|
|
|
|
2,842,812
|
|
Other cash expenditures expensed
|
|
|
6,269
|
|
|
|
6,405
|
|
|
|
6,188
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
3,142,103
|
|
|
$
|
3,539,406
|
|
|
$
|
2,849,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Cracker Barrel
Greensboro, NC
Restaurant
|
|
|
|
Cracker Barrel
Mebane, NC
Restaurant
|
|
|
|
Cracker Barrel
Braselton, GA
Restaurant
|
|
Gross leasable square footage
|
|
|
10,170
|
|
|
|
9,984
|
|
|
|
10,101
|
|
Date of purchase
|
|
|
06/30/09
|
|
|
|
06/30/09
|
|
|
|
06/30/09
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
3,125,730
|
|
|
|
2,702,796
|
|
|
|
3,155,867
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
3,125,730
|
|
|
|
2,702,796
|
|
|
|
3,155,867
|
|
Other cash expenditures expensed
|
|
|
6,285
|
|
|
|
6,690
|
|
|
|
6,094
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
3,132,015
|
|
|
$
|
2,709,486
|
|
|
$
|
3,161,961
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Cracker Barrel
Bremen, GA
Restaurant
|
|
|
|
Cracker Barrel
Waynesboro, VA
Restaurant
|
|
|
|
Cracker Barrel
Woodstock, VA
Restaurant
|
|
Gross leasable square footage
|
|
|
10,141
|
|
|
|
10,041
|
|
|
|
10,161
|
|
Date of purchase
|
|
|
06/30/09
|
|
|
|
06/30/09
|
|
|
|
06/30/09
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
2,883,417
|
|
|
|
3,248,630
|
|
|
|
2,646,694
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
2,883,417
|
|
|
|
3,248,630
|
|
|
|
2,646,694
|
|
Other cash expenditures expensed
|
|
|
6,000
|
|
|
|
6,688
|
|
|
|
5,932
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
2,889,417
|
|
|
$
|
3,255,318
|
|
|
$
|
2,652,626
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-57
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Cracker Barrel
Bristol, VA
Restaurant
|
|
|
|
Cracker Barrel
Emporia, VA
Restaurant
|
|
|
|
Cracker Barrel
Abilene, TX
Restaurant
|
|
Gross leasable square footage
|
|
|
10,182
|
|
|
|
10,024
|
|
|
|
10,101
|
|
Date of purchase
|
|
|
06/30/09
|
|
|
|
06/30/09
|
|
|
|
06/30/09
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
2,719,791
|
|
|
|
2,769,534
|
|
|
|
3,421,986
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
2,719,791
|
|
|
|
2,769,534
|
|
|
|
3,421,986
|
|
Other cash expenditures expensed
|
|
|
5,957
|
|
|
|
6,524
|
|
|
|
8,603
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
2,725,748
|
|
|
$
|
2,776,058
|
|
|
$
|
3,430,589
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Cracker Barrel
San Antonio, TX
Restaurant
|
|
|
|
Cracker Barrel
Sherman, TX
Restaurant
|
|
|
|
Aaron Rents
Benton Harbor, MI
Specialty Retail
|
|
Gross leasable square footage
|
|
|
9,984
|
|
|
|
10,158
|
|
|
|
6,745
|
|
Date of purchase
|
|
|
06/30/09
|
|
|
|
06/30/09
|
|
|
|
06/30/09
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
3,461,928
|
|
|
|
3,345,326
|
|
|
|
987,360
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
3,461,928
|
|
|
|
3,345,326
|
|
|
|
987,360
|
|
Other cash expenditures expensed
|
|
|
8,646
|
|
|
|
8,521
|
|
|
|
32,745
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
3,470,574
|
|
|
$
|
3,353,847
|
|
|
$
|
1,020,105
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Aaron Rents
Richmond, VA
Specialty Retail
|
|
|
|
Aaron Rents
Pensacola, FL
Specialty Retail
|
|
|
|
Aaron Rents
El Dorado, AR
Specialty Retail
|
|
Gross leasable square footage
|
|
|
11,616
|
|
|
|
8,398
|
|
|
|
4,860
|
|
Date of purchase
|
|
|
06/30/09
|
|
|
|
06/30/09
|
|
|
|
06/30/09
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
1,759,500
|
|
|
|
841,500
|
|
|
|
898,620
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
1,759,500
|
|
|
|
841,500
|
|
|
|
898,620
|
|
Other cash expenditures expensed
|
|
|
39,861
|
|
|
|
33,906
|
|
|
|
21,279
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
1,799,361
|
|
|
$
|
875,406
|
|
|
$
|
919,899
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-58
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Aaron Rents
Copperas Cove, TX
Specialty Retail
|
|
|
|
Aaron Rents
Port Lavaca, TX
Specialty Retail
|
|
|
|
Aaron Rents
Haltom City, TX
Specialty Retail
|
|
Gross leasable square footage
|
|
|
11,387
|
|
|
|
8,000
|
|
|
|
10,000
|
|
Date of purchase
|
|
|
06/30/09
|
|
|
|
06/30/09
|
|
|
|
06/30/09
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
1,447,396
|
|
|
|
1,218,900
|
|
|
|
1,653,420
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
1,447,396
|
|
|
|
1,218,900
|
|
|
|
1,653,420
|
|
Other cash expenditures expensed
|
|
|
20,549
|
|
|
|
20,284
|
|
|
|
32,802
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
1,467,945
|
|
|
$
|
1,239,184
|
|
|
$
|
1,686,222
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
LA Fitness
Carmel, IN
Fitness
|
|
|
|
Kohls
Tavares, FL
Department Store
|
|
|
|
HH Gregg
North Charleston, SC
Consumer Electronics
|
|
Gross leasable square footage
|
|
|
45,000
|
|
|
|
(3
|
)
|
|
|
30,167
|
|
Date of purchase
|
|
|
06/30/09
|
|
|
|
06/30/09
|
|
|
|
07/02/09
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
8,275,909
|
|
|
|
8,636,340
|
|
|
|
5,704,860
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
8,275,909
|
|
|
|
8,636,340
|
|
|
|
5,704,860
|
|
Other cash expenditures expensed
|
|
|
33,093
|
|
|
|
30,194
|
|
|
|
25,838
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
8,309,002
|
|
|
$
|
8,666,534
|
|
|
$
|
5,730,698
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Walgreens
Edmond, OK
Drugstore
|
|
|
|
Cracker Barrel
Columbus, GA
Restaurant
|
|
|
|
Walgreens
Stillwater, OK
Drugstore
|
|
Gross leasable square footage
|
|
|
13,905
|
|
|
|
10,000
|
|
|
|
15,120
|
|
Date of purchase
|
|
|
07/07/09
|
|
|
|
07/15/09
|
|
|
|
07/21/09
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
4,174,860
|
|
|
|
3,092,978
|
|
|
|
4,031,040
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
4,174,860
|
|
|
|
3,092,978
|
|
|
|
4,031,040
|
|
Other cash expenditures expensed
|
|
|
26,957
|
|
|
|
6,059
|
|
|
|
26,732
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
4,201,817
|
|
|
$
|
3,099,037
|
|
|
$
|
4,057,772
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-59
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Kohls
Port Orange, FL
Department Store
|
|
|
|
Walgreens
Denton, TX
Drugstore
|
|
|
|
Tractor Supply
Roswell, NM
Specialty Retail
|
|
Gross leasable square footage
|
|
|
(3
|
)
|
|
|
14,820
|
|
|
|
19,097
|
|
Date of purchase
|
|
|
07/23/09
|
|
|
|
07/24/09
|
|
|
|
07/27/09
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
9,953,160
|
|
|
|
4,539,000
|
|
|
|
2,729,520
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
9,953,160
|
|
|
|
4,539,000
|
|
|
|
2,729,520
|
|
Other cash expenditures expensed
|
|
|
29,048
|
|
|
|
26,470
|
|
|
|
19,181
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
9,982,208
|
|
|
$
|
4,565,470
|
|
|
$
|
2,748,701
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Tractor Supply
Edinburg, TX
Specialty Retail
|
|
|
|
Tractor Supply
Del Rio, TX
Specialty Retail
|
|
|
|
Kohls
Monrovia, CA
Department Store
|
|
Gross leasable square footage
|
|
|
18,800
|
|
|
|
19,097
|
|
|
|
76,804
|
|
Date of purchase
|
|
|
07/27/09
|
|
|
|
07/27/09
|
|
|
|
07/30/09
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
3,152,820
|
|
|
|
2,427,600
|
|
|
|
13,150,860
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
3,152,820
|
|
|
|
2,427,600
|
|
|
|
13,150,860
|
|
Other cash expenditures expensed
|
|
|
19,852
|
|
|
|
19,065
|
|
|
|
31,415
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
3,172,672
|
|
|
$
|
2,446,665
|
|
|
$
|
13,182,275
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Kohls
Rancho Cordova, CA
Department Store
|
|
|
|
Harris Teeter
Durham, NC
Grocery
|
|
|
|
CVS
Southaven, MS
Drugstore
|
|
Gross leasable square footage
|
|
|
76,158
|
|
|
|
(3
|
)
|
|
|
13,225
|
|
Date of purchase
|
|
|
07/30/09
|
|
|
|
07/31/09
|
|
|
|
07/31/09
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
7,428,660
|
|
|
|
3,309,900
|
|
|
|
5,414,832
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
7,428,660
|
|
|
|
3,309,900
|
|
|
|
5,414,832
|
|
Other cash expenditures expensed
|
|
|
27,960
|
|
|
|
32,484
|
|
|
|
25,113
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
7,456,620
|
|
|
$
|
3,342,384
|
|
|
$
|
5,439,945
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-60
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
CVS
Oak Forest, IL
Drugstore
|
|
|
|
CVS
Noblesville, IN
Drugstore
|
|
|
|
CVS
Liberty, MO
Drugstore
|
|
Gross leasable square footage
|
|
|
13,225
|
|
|
|
12,900
|
|
|
|
12,900
|
|
Date of purchase
|
|
|
08/13/09
|
|
|
|
08/13/09
|
|
|
|
08/13/09
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
4,710,714
|
|
|
|
6,219,198
|
|
|
|
5,086,902
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
4,710,714
|
|
|
|
6,219,198
|
|
|
|
5,086,902
|
|
Other cash expenditures expensed
|
|
|
21,111
|
|
|
|
20,517
|
|
|
|
18,703
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
4,731,825
|
|
|
$
|
6,239,715
|
|
|
$
|
5,105,605
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
CVS
Sparks, NV
Drugstore
|
|
|
|
CVS
Edinburg, TX
Drugstore
|
|
|
|
CVS
McAllen, TX
Drugstore
|
|
Gross leasable square footage
|
|
|
13,625
|
|
|
|
13,204
|
|
|
|
13,225
|
|
Date of purchase
|
|
|
08/13/09
|
|
|
|
08/13/09
|
|
|
|
08/13/09
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
5,939,236
|
|
|
|
3,977,019
|
|
|
|
4,595,363
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
5,939,236
|
|
|
|
3,977,019
|
|
|
|
4,595,363
|
|
Other cash expenditures expensed
|
|
|
24,454
|
|
|
|
24,842
|
|
|
|
26,066
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
5,963,690
|
|
|
$
|
4,001,861
|
|
|
$
|
4,621,429
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
CVS
Newport News, VA
Drugstore
|
|
|
|
CVS
Virginia Beach, VA
Drugstore
|
|
|
|
CVS
Raymore, MO
Drugstore
|
|
Gross leasable square footage
|
|
|
13,225
|
|
|
|
13,225
|
|
|
|
12,900
|
|
Date of purchase
|
|
|
08/13/09
|
|
|
|
08/13/09
|
|
|
|
08/14/09
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
5,182,129
|
|
|
|
6,082,542
|
|
|
|
4,806,240
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
5,182,129
|
|
|
|
6,082,542
|
|
|
|
4,806,240
|
|
Other cash expenditures expensed
|
|
|
25,626
|
|
|
|
27,259
|
|
|
|
13,877
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
5,207,755
|
|
|
$
|
6,109,801
|
|
|
$
|
4,820,117
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-61
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
CVS
Kyle, TX
Drugstore
|
|
|
|
CVS
Thomasville, NC
Drugstore
|
|
|
|
Aaron Rents
Texas City, TX
Specialty Retail
|
|
Gross leasable square footage
|
|
|
13,225
|
|
|
|
13,225
|
|
|
|
11,943
|
|
Date of purchase
|
|
|
08/14/09
|
|
|
|
08/14/09
|
|
|
|
08/31/09
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
4,182,000
|
|
|
|
3,353,760
|
|
|
|
2,032,860
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
4,182,000
|
|
|
|
3,353,760
|
|
|
|
2,032,860
|
|
Other cash expenditures expensed
|
|
|
20,394
|
|
|
|
13,760
|
|
|
|
10,555
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
4,202,394
|
|
|
$
|
3,367,520
|
|
|
$
|
2,043,415
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Best Buy
Bourbonnais, IL
Consumer Electronics
|
|
|
|
Best Buy
Coral Springs, FL
Consumer Electronics
|
|
|
|
Best Buy
Lakewood, CO
Consumer Electronics
|
|
Gross leasable square footage
|
|
|
46,996
|
|
|
|
52,550
|
|
|
|
45,976
|
|
Date of purchase
|
|
|
08/31/09
|
|
|
|
08/31/09
|
|
|
|
08/31/09
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
6,154,354
|
|
|
|
6,364,248
|
|
|
|
8,429,094
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
6,154,354
|
|
|
|
6,364,248
|
|
|
|
8,429,094
|
|
Other cash expenditures expensed
|
|
|
31,360
|
|
|
|
28,870
|
|
|
|
34,287
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
6,185,714
|
|
|
$
|
6,393,118
|
|
|
$
|
8,463,381
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Walgreens
Nampa, ID
Drugstore
|
|
|
|
CVS
Lees Summit, MO
Drugstore
|
|
|
|
Walgreens
Grand Junction, CO
Drugstore
|
|
Gross leasable square footage
|
|
|
14,490
|
|
|
|
12,900
|
|
|
|
14,490
|
|
Date of purchase
|
|
|
09/18/09
|
|
|
|
09/29/09
|
|
|
|
09/30/09
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
4,462,500
|
|
|
|
4,465,560
|
|
|
|
4,488,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
4,462,500
|
|
|
|
4,465,560
|
|
|
|
4,488,000
|
|
Other cash expenditures expensed
|
|
|
29,704
|
|
|
|
15,401
|
|
|
|
25,157
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
4,492,204
|
|
|
$
|
4,480,961
|
|
|
$
|
4,513,157
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-62
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Walgreens
McPherson, KS
Drugstore
|
|
|
|
Walgreens
St. George, UT
Drugstore
|
|
|
|
Walgreens
Houston (Quitman), TX
Drugstore
|
|
Gross leasable square footage
|
|
|
13,650
|
|
|
|
14,490
|
|
|
|
13,650
|
|
Date of purchase
|
|
|
09/30/09
|
|
|
|
09/30/09
|
|
|
|
09/30/09
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
4,092,240
|
|
|
|
6,528,000
|
|
|
|
5,948,903
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
4,092,240
|
|
|
|
6,528,000
|
|
|
|
5,948,903
|
|
Other cash expenditures expensed
|
|
|
15,460
|
|
|
|
27,063
|
|
|
|
25,311
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
4,107,700
|
|
|
$
|
6,555,063
|
|
|
$
|
5,974,214
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Walgreens
Spearfish, SD
Drugstore
|
|
|
|
Walgreens
Papillion, NE
Drugstore
|
|
|
|
Walgreens
Chickasha, OK
Drugstore
|
|
Gross leasable square footage
|
|
|
14,820
|
|
|
|
14,820
|
|
|
|
14,820
|
|
Date of purchase
|
|
|
10/06/09
|
|
|
|
10/06/09
|
|
|
|
10/14/09
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
4,972,500
|
|
|
|
4,217,700
|
|
|
|
4,117,740
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
4,972,500
|
|
|
|
4,217,700
|
|
|
|
4,117,740
|
|
Other cash expenditures expensed
|
|
|
30,998
|
|
|
|
22,587
|
|
|
|
22,082
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
5,003,498
|
|
|
$
|
4,240,287
|
|
|
$
|
4,139,822
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Tractor Supply
Irmo, SC
Specialty Retail
|
|
|
|
Walgreens
Warner Robins, GA
Drugstore
|
|
|
|
Home Depot
Winchester, VA
Home Improvement
|
|
Gross leasable square footage
|
|
|
19,097
|
|
|
|
14,820
|
|
|
|
465,600
|
|
Date of purchase
|
|
|
10/15/09
|
|
|
|
10/20/09
|
|
|
|
10/21/09
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
2,550,000
|
|
|
|
4,080,000
|
|
|
|
29,172,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
2,550,000
|
|
|
|
4,080,000
|
|
|
|
29,172,000
|
|
Other cash expenditures expensed
|
|
|
28,442
|
|
|
|
17,748
|
|
|
|
61,414
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
2,578,442
|
|
|
$
|
4,097,748
|
|
|
$
|
29,233,414
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-63
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Home Depot
Tucson, AZ
Home Improvement
|
|
|
|
Walgreens
Goose Creek, SC
Drugstore
|
|
|
|
LA Fitness
Glendale, AZ
Fitness
|
|
Gross leasable square footage
|
|
|
(3
|
)
|
|
|
14,820
|
|
|
|
38,000
|
|
Date of purchase
|
|
|
10/21/09
|
|
|
|
10/29/09
|
|
|
|
10/30/09
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
11,566,800
|
|
|
|
5,253,000
|
|
|
|
6,528,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
11,566,800
|
|
|
|
5,253,000
|
|
|
|
6,528,000
|
|
Other cash expenditures expensed
|
|
|
31,956
|
|
|
|
35,145
|
|
|
|
23,668
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
11,598,756
|
|
|
$
|
5,288,145
|
|
|
$
|
6,551,668
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Staples
Iowa City, IA
Office Supply
|
|
|
|
University Plaza
Flagstaff, AZ
Shopping Center
|
|
|
|
Walgreens
South Bend, IN
Drugstore
|
|
Gross leasable square footage
|
|
|
18,049
|
|
|
|
163,620
|
|
|
|
14,550
|
|
Date of purchase
|
|
|
11/13/09
|
|
|
|
11/17/09
|
|
|
|
11/18/09
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
4,263,600
|
|
|
|
17,508,300
|
|
|
|
5,036,250
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
4,263,600
|
|
|
|
17,508,300
|
|
|
|
5,036,250
|
|
Other cash expenditures expensed
|
|
|
22,885
|
|
|
|
100,027
|
|
|
|
20,369
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
4,286,485
|
|
|
$
|
17,608,327
|
|
|
$
|
5,056,619
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Lowes
Kansas City, MO
Department Store
|
|
|
|
LA Fitness
Spring, TX
Fitness
|
|
|
|
Publix
Mountain Brook, AL
Grocery
|
|
Gross leasable square footage
|
|
|
(3
|
)
|
|
|
45,000
|
|
|
|
44,271
|
|
Date of purchase
|
|
|
11/20/09
|
|
|
|
11/20/09
|
|
|
|
12/01/09
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
8,096,250
|
|
|
|
7,509,750
|
|
|
|
6,222,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
8,096,250
|
|
|
|
7,509,750
|
|
|
|
6,222,000
|
|
Other cash expenditures expensed
|
|
|
28,136
|
|
|
|
31,784
|
|
|
|
30,615
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
8,124,386
|
|
|
$
|
7,541,534
|
|
|
$
|
6,252,615
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-64
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Kohls
Columbia, SC
Department Store
|
|
|
|
Walgreens
Machesney Park, IL
Drugstore
|
|
|
|
Advanced Auto
Huntsville, TX
Automotive Parts
|
|
Gross leasable square footage
|
|
|
89,706
|
|
|
|
14,490
|
|
|
|
6,000
|
|
Date of purchase
|
|
|
12/07/09
|
|
|
|
12/16/09
|
|
|
|
12/19/09
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
12,138,000
|
|
|
|
4,256,460
|
|
|
|
1,331,203
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
12,138,000
|
|
|
|
4,256,460
|
|
|
|
1,331,203
|
|
Other cash expenditures expensed
|
|
|
26,860
|
|
|
|
18,960
|
|
|
|
20,135
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
12,164,860
|
|
|
$
|
4,275,420
|
|
|
$
|
1,351,338
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Advanced Auto
Lubbock, TX
Automotive Parts
|
|
|
|
Advanced Auto
Deer Park, TX
Automotive Parts
|
|
|
|
Advanced Auto
Houston (Wallisville), TX
Automotive Parts
|
|
Gross leasable square footage
|
|
|
6,000
|
|
|
|
6,000
|
|
|
|
7,000
|
|
Date of purchase
|
|
|
12/19/09
|
|
|
|
12/16/09
|
|
|
|
12/16/09
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
1,244,297
|
|
|
|
1,502,780
|
|
|
|
1,540,072
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
1,244,297
|
|
|
|
1,502,780
|
|
|
|
1,540,072
|
|
Other cash expenditures expensed
|
|
|
23,522
|
|
|
|
20,199
|
|
|
|
20,712
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
1,267,819
|
|
|
$
|
1,522,979
|
|
|
$
|
1,560,784
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Advanced Auto
Houston (Imperial), TX
Automotive Parts
|
|
|
|
Advanced Auto
Kingwood, TX
Automotive Parts
|
|
|
|
Advanced Auto
Houston (Aldine), TX
Automotive Parts
|
|
Gross leasable square footage
|
|
|
8,000
|
|
|
|
6,000
|
|
|
|
7,000
|
|
Date of purchase
|
|
|
12/16/09
|
|
|
|
12/16/09
|
|
|
|
12/16/09
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
1,253,574
|
|
|
|
1,509,810
|
|
|
|
1,398,858
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
1,253,574
|
|
|
|
1,509,810
|
|
|
|
1,398,858
|
|
Other cash expenditures expensed
|
|
|
19,918
|
|
|
|
19,898
|
|
|
|
21,201
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
1,273,492
|
|
|
$
|
1,529,708
|
|
|
$
|
1,420,059
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-65
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Advanced Auto
Humble, TX
Automotive Parts
|
|
|
|
Advanced Auto
Webster, TX
Automotive Parts
|
|
|
|
Tractor Supply
Gloucester, NJ
Specialty Retail
|
|
Gross leasable square footage
|
|
|
7,000
|
|
|
|
7,000
|
|
|
|
22,670
|
|
Date of purchase
|
|
|
12/16/09
|
|
|
|
12/16/09
|
|
|
|
12/17/09
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
1,525,827
|
|
|
|
1,530,642
|
|
|
|
5,457,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
1,525,827
|
|
|
|
1,530,642
|
|
|
|
5,457,000
|
|
Other cash expenditures expensed
|
|
|
22,039
|
|
|
|
20,324
|
|
|
|
83,474
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
1,547,866
|
|
|
$
|
1,550,966
|
|
|
$
|
5,540,474
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Walgreens
Janesville, WI
Drugstore
|
|
|
|
Mueller Regional
Retail District
Austin, TX
Shopping Center
|
|
|
|
Walgreens
South Bend
(Ironwood), IN
Drugstore
|
|
Gross leasable square footage
|
|
|
14,490
|
|
|
|
341,736
|
|
|
|
14,820
|
|
Date of purchase
|
|
|
12/17/09
|
|
|
|
12/18/09
|
|
|
|
12/21/09
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
6,014,940
|
|
|
|
68,595,000
|
|
|
|
6,056,250
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
6,014,940
|
|
|
|
68,595,000
|
|
|
|
6,056,250
|
|
Other cash expenditures expensed
|
|
|
16,735
|
|
|
|
220,243
|
|
|
|
22,608
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
6,031,675
|
|
|
$
|
68,815,243
|
|
|
$
|
6,078,858
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Walgreens
Brooklyn Park, MD
Drugstore
|
|
|
|
Fed Ex
Effingham, IL
Distribution
|
|
|
|
CVS
Meridianville, AL
Drugstore
|
|
Gross leasable square footage
|
|
|
14,560
|
|
|
|
101,240
|
|
|
|
13,225
|
|
Date of purchase
|
|
|
12/23/09
|
|
|
|
12/29/09
|
|
|
|
12/29/09
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
4,925,580
|
|
|
|
14,433,000
|
|
|
|
4,046,340
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
4,925,580
|
|
|
|
14,433,000
|
|
|
|
4,046,340
|
|
Other cash expenditures expensed
|
|
|
134,044
|
|
|
|
21,800
|
|
|
|
25,138
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
5,059,624
|
|
|
$
|
14,454,800
|
|
|
$
|
4,071,478
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-66
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Walgreens
St. Charles, IL
Drugstore
|
|
|
|
Walgreens
Elgin, IL
Drugstore
|
|
|
|
Valero
Rio Hondo, TX
Convenience Store
|
|
Gross leasable square footage
|
|
|
14,490
|
|
|
|
14,490
|
|
|
|
6,350
|
|
Date of purchase
|
|
|
12/29/09
|
|
|
|
12/29/09
|
|
|
|
12/30/09
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
4,143,750
|
|
|
|
4,526,250
|
|
|
|
2,619,057
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
4,143,750
|
|
|
|
4,526,250
|
|
|
|
2,619,057
|
|
Other cash expenditures expensed
|
|
|
11,386
|
|
|
|
12,451
|
|
|
|
14,777
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
4,155,136
|
|
|
$
|
4,538,701
|
|
|
$
|
2,633,834
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Valero
Pharr, TX
Convenience Store
|
|
|
|
Valero
Andrews, TX
Convenience Store
|
|
|
|
Valero
LaFeria, TX
Convenience Store
|
|
Gross leasable square footage
|
|
|
8,528
|
|
|
|
4,656
|
|
|
|
4,950
|
|
Date of purchase
|
|
|
12/30/09
|
|
|
|
12/30/09
|
|
|
|
12/30/09
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
2,525,901
|
|
|
|
2,413,590
|
|
|
|
1,955,554
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
2,525,901
|
|
|
|
2,413,590
|
|
|
|
1,955,554
|
|
Other cash expenditures expensed
|
|
|
14,543
|
|
|
|
14,574
|
|
|
|
13,991
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
2,540,444
|
|
|
$
|
2,428,164
|
|
|
$
|
1,969,545
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Kum & Go
Rogers, AR
Convenience Store
|
|
|
|
Kum & Go
Lowell, AR
Convenience Store
|
|
|
|
Kum & Go
Bentonville, AR
Convenience Store
|
|
Gross leasable square footage
|
|
|
3,391
|
|
|
|
4,692
|
|
|
|
3,392
|
|
Date of purchase
|
|
|
12/31/09
|
|
|
|
12/31/09
|
|
|
|
12/31/09
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
2,142,000
|
|
|
|
2,131,200
|
|
|
|
1,884,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
2,142,000
|
|
|
|
2,131,200
|
|
|
|
1,884,000
|
|
Other cash expenditures expensed
|
|
|
16,353
|
|
|
|
15,796
|
|
|
|
14,957
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
2,158,353
|
|
|
$
|
2,146,996
|
|
|
$
|
1,898,957
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-67
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Walgreens
Twin Falls, ID
Drugstore
|
|
|
|
Walgreens
Loves Park, IL
Drugstore
|
|
|
|
Walgreens
Framingham, MA
Drugstore
|
|
Gross leasable square footage
|
|
|
14,820
|
|
|
|
14,490
|
|
|
|
14,820
|
|
Date of purchase
|
|
|
01/14/10
|
|
|
|
01/19/10
|
|
|
|
01/19/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
4,926,600
|
|
|
|
4,018,800
|
|
|
|
6,082,260
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
4,926,600
|
|
|
|
4,018,800
|
|
|
|
6,082,260
|
|
Other cash expenditures expensed
|
|
|
27,614
|
|
|
|
25,120
|
|
|
|
26,355
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
4,954,214
|
|
|
$
|
4,043,920
|
|
|
$
|
6,108,615
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
CarMax
Garland, TX
Auto Dealership
|
|
|
|
Walgreens
Appleton (Meade), WI
Drugstore
|
|
|
|
LA Fitness
Highland, CA
Fitness
|
|
Gross leasable square footage
|
|
|
82,169
|
|
|
|
16,853
|
|
|
|
45,000
|
|
Date of purchase
|
|
|
01/29/10
|
|
|
|
02/03/10
|
|
|
|
02/04/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
14,280,000
|
|
|
|
3,843,360
|
|
|
|
9,399,300
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
14,280,000
|
|
|
|
3,843,360
|
|
|
|
9,399,300
|
|
Other cash expenditures expensed
|
|
|
34,240
|
|
|
|
21,591
|
|
|
|
24,631
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
14,314,240
|
|
|
$
|
3,864,951
|
|
|
$
|
9,423,931
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Walgreens
Cleveland (Clark), OH
Drugstore
|
|
|
|
Walgreens
Appleton (Northland), WI
Drugstore
|
|
|
|
Walgreens
Lancaster, SC
Drugstore
|
|
Gross leasable square footage
|
|
|
14,820
|
|
|
|
14,490
|
|
|
|
14,820
|
|
Date of purchase
|
|
|
02/10/10
|
|
|
|
02/18/10
|
|
|
|
02/19/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
5,559,000
|
|
|
|
5,407,020
|
|
|
|
6,015,134
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
5,559,000
|
|
|
|
5,407,020
|
|
|
|
6,015,134
|
|
Other cash expenditures expensed
|
|
|
25,467
|
|
|
|
23,603
|
|
|
|
39,359
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
5,584,467
|
|
|
$
|
5,430,623
|
|
|
$
|
6,054,493
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-68
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Walgreens
Greenville, NC
Drugstore
|
|
|
|
Walgreens
Baytown, TX
Drugstore
|
|
|
|
Walgreens
North Platte, NE
Drugstore
|
|
Gross leasable square footage
|
|
|
14,490
|
|
|
|
14,820
|
|
|
|
14,820
|
|
Date of purchase
|
|
|
02/19/10
|
|
|
|
02/23/10
|
|
|
|
02/23/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
6,314,935
|
|
|
|
4,901,100
|
|
|
|
5,143,421
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
6,314,935
|
|
|
|
4,901,100
|
|
|
|
5,143,421
|
|
Other cash expenditures expensed
|
|
|
33,705
|
|
|
|
27,914
|
|
|
|
25,636
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
6,348,640
|
|
|
$
|
4,929,014
|
|
|
$
|
5,169,057
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Cigna Pointe
Plano, TX
Healthcare
|
|
|
|
Walgreens
Kingman, AZ
Drugstore
|
|
|
|
Walgreens
Omaha, NE
Drugstore
|
|
Gross leasable square footage
|
|
|
209,089
|
|
|
|
15,696
|
|
|
|
14,550
|
|
Date of purchase
|
|
|
02/24/10
|
|
|
|
02/25/10
|
|
|
|
02/25/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
50,490,000
|
|
|
|
6,145,500
|
|
|
|
5,304,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
50,490,000
|
|
|
|
6,145,500
|
|
|
|
5,304,000
|
|
Other cash expenditures expensed
|
|
|
73,830
|
|
|
|
23,761
|
|
|
|
25,781
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
50,563,830
|
|
|
$
|
6,169,261
|
|
|
$
|
5,329,781
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Kum & Go
Story City, IA
Convenience Store
|
|
|
|
Kum & Go
Ottumwa, IA
Convenience Store
|
|
|
|
Kum & Go
West Branch, IA
Convenience Store
|
|
Gross leasable square footage
|
|
|
3,008
|
|
|
|
4,000
|
|
|
|
3,164
|
|
Date of purchase
|
|
|
02/25/10
|
|
|
|
02/25/10
|
|
|
|
02/25/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
2,091,000
|
|
|
|
1,860,000
|
|
|
|
1,116,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
2,091,000
|
|
|
|
1,860,000
|
|
|
|
1,116,000
|
|
Other cash expenditures expensed
|
|
|
28,704
|
|
|
|
28,282
|
|
|
|
28,244
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
2,119,704
|
|
|
$
|
1,888,282
|
|
|
$
|
1,144,244
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-69
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Walgreens
Augusta, ME
Drugstore
|
|
|
|
OReilly Auto Parts
LaPlace, LA
Automotive Parts
|
|
|
|
OReilly Auto Parts
New Roads, LA
Automotive Parts
|
|
Gross leasable square footage
|
|
|
14,065
|
|
|
|
7,000
|
|
|
|
6,800
|
|
Date of purchase
|
|
|
03/05/10
|
|
|
|
03/12/10
|
|
|
|
03/12/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
6,552,727
|
|
|
|
1,041,498
|
|
|
|
837,041
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
6,552,727
|
|
|
|
1,041,498
|
|
|
|
837,041
|
|
Other cash expenditures expensed
|
|
|
43,603
|
|
|
|
22,491
|
|
|
|
22,657
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
6,596,330
|
|
|
$
|
1,063,989
|
|
|
$
|
859,698
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
OReilly Auto Parts
Beaux Bridge, LA
Automotive Parts
|
|
|
|
Cargill
Blair, NE
Office Building
|
|
|
|
Walgreens
North Mankato, MN
Drugstore
|
|
Gross leasable square footage
|
|
|
6,800
|
|
|
|
30,000
|
|
|
|
14,550
|
|
Date of purchase
|
|
|
03/15/10
|
|
|
|
03/17/10
|
|
|
|
03/18/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
823,319
|
|
|
|
5,054,103
|
|
|
|
5,171,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
823,319
|
|
|
|
5,054,103
|
|
|
|
5,171,400
|
|
Other cash expenditures expensed
|
|
|
22,464
|
|
|
|
40,230
|
|
|
|
28,975
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
845,783
|
|
|
$
|
5,094,333
|
|
|
$
|
5,200,375
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
CVS
New Port Richey, FL
Drugstore
|
|
|
|
Kohls
McAllen, TX
Department Store
|
|
|
|
Sunset Valley
Austin, TX
Shopping Center
|
|
Gross leasable square footage
|
|
|
13,813
|
|
|
|
88,248
|
|
|
|
147,841
|
|
Date of purchase
|
|
|
03/26/10
|
|
|
|
03/26/10
|
|
|
|
03/26/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
3,381,300
|
|
|
|
7,446,000
|
|
|
|
36,210,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
3,381,300
|
|
|
|
7,446,000
|
|
|
|
36,210,000
|
|
Other cash expenditures expensed
|
|
|
21,015
|
|
|
|
36,265
|
|
|
|
111,611
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
3,402,315
|
|
|
$
|
7,482,265
|
|
|
$
|
36,321,611
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-70
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Walgreens
Birmingham, AL
Drugstore
|
|
|
|
Advanced Auto
Twinsburg, OH
Automotive Parts
|
|
|
|
Advanced Auto
Canton, OH
Automotive Parts
|
|
Gross leasable square footage
|
|
|
13,905
|
|
|
|
6,000
|
|
|
|
7,000
|
|
Date of purchase
|
|
|
03/30/10
|
|
|
|
03/31/10
|
|
|
|
03/31/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
3,188,520
|
|
|
|
1,289,320
|
|
|
|
1,390,260
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
3,188,520
|
|
|
|
1,289,320
|
|
|
|
1,390,260
|
|
Other cash expenditures expensed
|
|
|
23,766
|
|
|
|
32,226
|
|
|
|
30,788
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
3,212,286
|
|
|
$
|
1,321,546
|
|
|
$
|
1,421,048
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Advanced Auto
Delaware, OH
Automotive Parts
|
|
|
|
Advanced Auto
Holland, OH
Automotive Parts
|
|
|
|
Applebees
Joplin, MO
Restaurant
|
|
Gross leasable square footage
|
|
|
7,000
|
|
|
|
6,000
|
|
|
|
5,386
|
|
Date of purchase
|
|
|
03/31/10
|
|
|
|
03/31/10
|
|
|
|
03/31/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
1,524,900
|
|
|
|
1,349,460
|
|
|
|
2,152,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
1,524,900
|
|
|
|
1,349,460
|
|
|
|
2,152,200
|
|
Other cash expenditures expensed
|
|
|
30,690
|
|
|
|
30,164
|
|
|
|
21,858
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
1,555,590
|
|
|
$
|
1,379,624
|
|
|
$
|
2,174,058
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Applebees
Rolla, MO
Restaurant
|
|
|
|
Applebees
Marion, IL
Restaurant
|
|
|
|
Applebees
Elizabeth City, NC
Restaurant
|
|
Gross leasable square footage
|
|
|
4,791
|
|
|
|
5,403
|
|
|
|
4,676
|
|
Date of purchase
|
|
|
03/31/10
|
|
|
|
03/31/10
|
|
|
|
03/31/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
2,239,920
|
|
|
|
1,768,680
|
|
|
|
1,938,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
2,239,920
|
|
|
|
1,768,680
|
|
|
|
1,938,000
|
|
Other cash expenditures expensed
|
|
|
21,225
|
|
|
|
22,189
|
|
|
|
18,460
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
2,261,145
|
|
|
$
|
1,790,869
|
|
|
$
|
1,956,460
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-71
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Applebees
Memphis, TN
Restaurant
|
|
|
|
Applebees
Madisonville, KY
Restaurant
|
|
|
|
Applebees
Farmington, MO
Restaurant
|
|
Gross leasable square footage
|
|
|
4,830
|
|
|
|
5,393
|
|
|
|
3,894
|
|
Date of purchase
|
|
|
03/31/10
|
|
|
|
03/31/10
|
|
|
|
03/31/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
2,132,820
|
|
|
|
1,922,700
|
|
|
|
2,161,992
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
2,132,820
|
|
|
|
1,922,700
|
|
|
|
2,161,992
|
|
Other cash expenditures expensed
|
|
|
20,845
|
|
|
|
21,874
|
|
|
|
22,065
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
2,153,665
|
|
|
$
|
1,944,574
|
|
|
$
|
2,184,057
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Applebees
Vincennes, IN
Restaurant
|
|
|
|
Aaron Rents
Auburndale, FL
Specialty Retail
|
|
|
|
Aaron Rents
Bloomsburg, PA
Specialty Retail
|
|
Gross leasable square footage
|
|
|
5,840
|
|
|
|
148,922
|
|
|
|
12,000
|
|
Date of purchase
|
|
|
03/31/10
|
|
|
|
03/31/10
|
|
|
|
03/31/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
1,882,104
|
|
|
|
5,283,000
|
|
|
|
825,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
1,882,104
|
|
|
|
5,283,000
|
|
|
|
825,000
|
|
Other cash expenditures expensed
|
|
|
20,295
|
|
|
|
125,645
|
|
|
|
45,227
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
1,902,399
|
|
|
$
|
5,408,645
|
|
|
$
|
870,227
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Aaron Rents
Bowling Green, OH
Specialty Retail
|
|
|
|
Aaron Rents
Mission, TX
Specialty Retail
|
|
|
|
Aaron Rents
North Olmstead, OH
Specialty Retail
|
|
Gross leasable square footage
|
|
|
8,000
|
|
|
|
8,000
|
|
|
|
7,800
|
|
Date of purchase
|
|
|
03/31/10
|
|
|
|
03/31/10
|
|
|
|
03/31/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
1,180,000
|
|
|
|
1,091,000
|
|
|
|
928,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
1,180,000
|
|
|
|
1,091,000
|
|
|
|
928,000
|
|
Other cash expenditures expensed
|
|
|
42,707
|
|
|
|
39,324
|
|
|
|
37,843
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
1,222,707
|
|
|
$
|
1,130,324
|
|
|
$
|
965,843
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-72
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Aaron Rents
Redford, MI
Specialty Retail
|
|
|
|
Aaron Rents
Springdale, AR
Specialty Retail
|
|
|
|
Aaron Rents
Valley, AL
Specialty Retail
|
|
Gross leasable square footage
|
|
|
8,025
|
|
|
|
8,000
|
|
|
|
6,950
|
|
Date of purchase
|
|
|
03/31/10
|
|
|
|
03/31/10
|
|
|
|
03/31/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
901,000
|
|
|
|
1,330,000
|
|
|
|
804,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
901,000
|
|
|
|
1,330,000
|
|
|
|
804,000
|
|
Other cash expenditures expensed
|
|
|
35,604
|
|
|
|
47,444
|
|
|
|
33,843
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
936,604
|
|
|
$
|
1,377,444
|
|
|
$
|
837,843
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Aaron Rents
Kennett, MO
Specialty Retail
|
|
|
|
Aaron Rents
Kent, OH
Specialty Retail
|
|
|
|
Aaron Rents
Kingsville, TX
Specialty Retail
|
|
Gross leasable square footage
|
|
|
7,276
|
|
|
|
16,547
|
|
|
|
8,000
|
|
Date of purchase
|
|
|
03/31/10
|
|
|
|
03/31/10
|
|
|
|
03/31/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
641,000
|
|
|
|
1,225,000
|
|
|
|
1,193,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
641,000
|
|
|
|
1,225,000
|
|
|
|
1,193,000
|
|
Other cash expenditures expensed
|
|
|
29,783
|
|
|
|
46,100
|
|
|
|
40,424
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
670,783
|
|
|
$
|
1,271,100
|
|
|
$
|
1,233,424
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Aaron Rents
Magnolia, MS
Specialty Retail
|
|
|
|
Aaron Rents
Marion, SC
Specialty Retail
|
|
|
|
Aaron Rents
Oneonta, AL
Specialty Retail
|
|
Gross leasable square footage
|
|
|
125,000
|
|
|
|
8,000
|
|
|
|
8,000
|
|
Date of purchase
|
|
|
03/31/10
|
|
|
|
03/31/10
|
|
|
|
03/31/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
2,945,000
|
|
|
|
627,000
|
|
|
|
1,170,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
2,945,000
|
|
|
|
627,000
|
|
|
|
1,170,000
|
|
Other cash expenditures expensed
|
|
|
79,936
|
|
|
|
30,258
|
|
|
|
41,455
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
3,024,936
|
|
|
$
|
657,258
|
|
|
$
|
1,211,455
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-73
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Aaron Rents
West Lafayette, IN
Specialty Retail
|
|
|
|
Aaron Rents
Charlotte, NC
Specialty Retail
|
|
|
|
LA Fitness
Denton, TX
Fitness
|
|
Gross leasable square footage
|
|
|
5,935
|
|
|
|
8,775
|
|
|
|
45,000
|
|
Date of purchase
|
|
|
03/31/10
|
|
|
|
03/31/10
|
|
|
|
03/31/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
1,102,000
|
|
|
|
1,195,000
|
|
|
|
7,981,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
1,102,000
|
|
|
|
1,195,000
|
|
|
|
7,981,500
|
|
Other cash expenditures expensed
|
|
|
40,369
|
|
|
|
41,605
|
|
|
|
39,415
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
1,142,369
|
|
|
$
|
1,236,605
|
|
|
$
|
8,020,915
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Tractor Supply
Pearsall, TX
Specialty Retail
|
|
|
|
Walgreens
Janesville, WI
Drugstore
|
|
|
|
Tractor Supply
Summerdale, AL
Specialty Retail
|
|
Gross leasable square footage
|
|
|
18,948
|
|
|
|
14,820
|
|
|
|
19,097
|
|
Date of purchase
|
|
|
04/09/10
|
|
|
|
04/13/10
|
|
|
|
04/14/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
2,485,953
|
|
|
|
4,360,500
|
|
|
|
2,517,625
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
2,485,953
|
|
|
|
4,360,500
|
|
|
|
2,517,625
|
|
Other cash expenditures expensed
|
|
|
25,629
|
|
|
|
24,595
|
|
|
|
22,885
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
2,511,582
|
|
|
$
|
4,385,095
|
|
|
$
|
2,540,510
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
National Tire and Battery
Nashville, TN
Automotive Parts
|
|
|
|
Fed Ex
Beekmantown, NY
Distribution
|
|
|
|
Kum & Go
Sloan, IA
Convenience Store
|
|
Gross leasable square footage
|
|
|
8,074
|
|
|
|
49,768
|
|
|
|
4,794
|
|
Date of purchase
|
|
|
04/21/10
|
|
|
|
04/23/10
|
|
|
|
04/23/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
1,744,047
|
|
|
|
5,431,500
|
|
|
|
2,652,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
1,744,047
|
|
|
|
5,431,500
|
|
|
|
2,652,000
|
|
Other cash expenditures expensed
|
|
|
20,821
|
|
|
|
28,890
|
|
|
|
26,132
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
1,764,868
|
|
|
$
|
5,460,390
|
|
|
$
|
2,678,132
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-74
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Fed Ex
Lafayette, IN
Distribution
|
|
|
|
Advanced Auto
Sylvania, OH
Automotive Parts
|
|
|
|
Walgreens
Durham, NC
Drugstore
|
|
Gross leasable square footage
|
|
|
22,194
|
|
|
|
6,000
|
|
|
|
14,820
|
|
Date of purchase
|
|
|
04/27/10
|
|
|
|
04/28/10
|
|
|
|
04/28/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
4,582,860
|
|
|
|
1,265,820
|
|
|
|
5,916,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
4,582,860
|
|
|
|
1,265,820
|
|
|
|
5,916,000
|
|
Other cash expenditures expensed
|
|
|
23,630
|
|
|
|
30,508
|
|
|
|
22,973
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
4,606,490
|
|
|
$
|
1,296,328
|
|
|
$
|
5,938,973
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Academy Sports
Killeen, TX
Sporting Goods
|
|
|
|
Tractor Supply
Kenedy, TX
Specialty Retail
|
|
|
|
Experian
Schaumburg, IL
Office Building
|
|
Gross leasable square footage
|
|
|
96,645
|
|
|
|
18,800
|
|
|
|
177,893
|
|
Date of purchase
|
|
|
04/29/10
|
|
|
|
04/29/10
|
|
|
|
04/30/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
6,834,000
|
|
|
|
2,526,279
|
|
|
|
30,600,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
6,834,000
|
|
|
|
2,526,279
|
|
|
|
30,600,000
|
|
Other cash expenditures expensed
|
|
|
30,636
|
|
|
|
26,672
|
|
|
|
60,672
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
6,864,636
|
|
|
$
|
2,552,951
|
|
|
$
|
30,660,672
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Tractor Supply
Stillwater, OK
Specialty Retail
|
|
|
|
Tractor Supply
Glenpool, OK
Specialty Retail
|
|
|
|
Tractor Supply
Gibsonia, PA
Specialty Retail
|
|
Gross leasable square footage
|
|
|
19,180
|
|
|
|
19,097
|
|
|
|
19,097
|
|
Date of purchase
|
|
|
05/04/10
|
|
|
|
05/04/10
|
|
|
|
05/05/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
2,475,540
|
|
|
|
2,413,320
|
|
|
|
3,185,460
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
2,475,540
|
|
|
|
2,413,320
|
|
|
|
3,185,460
|
|
Other cash expenditures expensed
|
|
|
25,591
|
|
|
|
25,297
|
|
|
|
60,239
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
2,501,131
|
|
|
$
|
2,438,617
|
|
|
$
|
3,245,699
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-75
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Walgreens
Lancaster
(Palmdale), CA
Drugstore
|
|
|
|
Northern Tool
Ocala, FL
Specialty Retail
|
|
|
|
Walgreens
Beloit, WI
Drugstore
|
|
Gross leasable square footage
|
|
|
13,650
|
|
|
|
26,054
|
|
|
|
14,820
|
|
Date of purchase
|
|
|
05/17/10
|
|
|
|
05/20/10
|
|
|
|
05/20/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
5,647,740
|
|
|
|
3,588,360
|
|
|
|
4,396,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
5,647,740
|
|
|
|
3,588,360
|
|
|
|
4,396,200
|
|
Other cash expenditures expensed
|
|
|
42,143
|
|
|
|
30,727
|
|
|
|
23,002
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
5,689,883
|
|
|
$
|
3,619,087
|
|
|
$
|
4,419,202
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Igloo Distribution
Facility
Katy, TX
Distribution
|
|
|
|
Tractor Supply
Ballinger, TX
Specialty Retail
|
|
|
|
Tractor Supply
Murphy, NC
Specialty Retail
|
|
Gross leasable square footage
|
|
|
914,195
|
|
|
|
19,097
|
|
|
|
19,097
|
|
Date of purchase
|
|
|
05/21/10
|
|
|
|
05/21/10
|
|
|
|
05/21/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
38,862,000
|
|
|
|
2,543,595
|
|
|
|
2,898,935
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
38,862,000
|
|
|
|
2,543,595
|
|
|
|
2,898,935
|
|
Other cash expenditures expensed
|
|
|
99,997
|
|
|
|
27,186
|
|
|
|
26,365
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
38,961,997
|
|
|
$
|
2,570,781
|
|
|
$
|
2,925,300
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Walgreens
Rocky Mount, NC
Drugstore
|
|
|
|
Whole Foods
Hinsdale, IL
Grocery
|
|
|
|
AT&T Regional
Headquarters
Dallas, TX
Office Building
|
|
Gross leasable square footage
|
|
|
14,820
|
|
|
|
48,835
|
|
|
|
206,040
|
|
Date of purchase
|
|
|
05/26/10
|
|
|
|
05/28/10
|
|
|
|
05/28/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
5,980,260
|
|
|
|
11,842,200
|
|
|
|
29,988,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
5,980,260
|
|
|
|
11,842,200
|
|
|
|
29,988,000
|
|
Other cash expenditures expensed
|
|
|
19,953
|
|
|
|
28,837
|
|
|
|
85,953
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
6,000,213
|
|
|
$
|
11,871,037
|
|
|
$
|
30,073,953
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-76
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Kum & Go
Tipton, IA
Convenience Store
|
|
|
|
AutoZone
Mt. Orab, OH
Automotive Parts
|
|
|
|
AutoZone
Hamilton, OH
Automotive Parts
|
|
Gross leasable square footage
|
|
|
5,118
|
|
|
|
6,816
|
|
|
|
6,816
|
|
Date of purchase
|
|
|
05/28/10
|
|
|
|
06/09/10
|
|
|
|
06/09/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
2,544,000
|
|
|
|
1,391,280
|
|
|
|
1,668,720
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
2,544,000
|
|
|
|
1,391,280
|
|
|
|
1,668,720
|
|
Other cash expenditures expensed
|
|
|
33,070
|
|
|
|
25,643
|
|
|
|
26,959
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
2,577,070
|
|
|
$
|
1,416,923
|
|
|
$
|
1,695,679
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
AutoZone
Trenton, OH
Automotive Parts
|
|
|
|
AutoZone
Blanchester, OH
Automotive Parts
|
|
|
|
AutoZone
Nashville, TN
Automotive Parts
|
|
Gross leasable square footage
|
|
|
6,816
|
|
|
|
7,370
|
|
|
|
6,815
|
|
Date of purchase
|
|
|
06/09/10
|
|
|
|
06/09/10
|
|
|
|
06/09/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
1,031,220
|
|
|
|
1,075,590
|
|
|
|
1,706,455
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
1,031,220
|
|
|
|
1,075,590
|
|
|
|
1,706,455
|
|
Other cash expenditures expensed
|
|
|
26,048
|
|
|
|
27,429
|
|
|
|
24,602
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
1,057,268
|
|
|
$
|
1,103,019
|
|
|
$
|
1,731,057
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Evans Exchange
Evans, GA
Shopping Center
|
|
|
|
Staples
Houston, TX
Office Supply
|
|
|
|
CVS
Ft. Myers, FL
Drugstore
|
|
Gross leasable square footage
|
|
|
54,948(3
|
)
|
|
|
20,060
|
|
|
|
12,900
|
|
Date of purchase
|
|
|
06/11/10
|
|
|
|
06/17/10
|
|
|
|
06/18/10
|
|
Mortgage financing at date of purchase
|
|
$
|
5,840,667
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
13,947,336
|
|
|
|
3,765,840
|
|
|
|
6,085,320
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
19,788,003
|
|
|
|
3,765,840
|
|
|
|
6,085,320
|
|
Other cash expenditures expensed
|
|
|
107,587
|
|
|
|
25,093
|
|
|
|
24,609
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
19,895,590
|
|
|
$
|
3,790,933
|
|
|
$
|
6,109,929
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-77
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Walgreens
Fort Mill, SC
Drugstore
|
|
|
|
Lowes
Sanford, ME
Home Improvement
|
|
|
|
Stripes
Eagle Pass, TX
Convenience Store
|
|
Gross leasable square footage
|
|
|
14,820
|
|
|
|
(3
|
)
|
|
|
4,888
|
|
Date of purchase
|
|
|
06/24/10
|
|
|
|
06/28/10
|
|
|
|
06/29/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
4,445,969
|
|
|
|
9,562,500
|
|
|
|
2,912,567
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
4,445,969
|
|
|
|
9,562,500
|
|
|
|
2,912,567
|
|
Other cash expenditures expensed
|
|
|
45,257
|
|
|
|
67,591
|
|
|
|
10,744
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
4,491,226
|
|
|
$
|
9,630,091
|
|
|
$
|
2,923,311
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Stripes
Edinburg, TX
Convenience Store
|
|
|
|
Stripes
Palmhurst, TX
Convenience Store
|
|
|
|
Stripes
Ranchito, TX
Convenience Store
|
|
Gross leasable square footage
|
|
|
3,600
|
|
|
|
2,925
|
|
|
|
4,888
|
|
Date of purchase
|
|
|
06/29/10
|
|
|
|
06/29/10
|
|
|
|
06/29/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
2,473,655
|
|
|
|
1,030,613
|
|
|
|
2,703,214
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
2,473,655
|
|
|
|
1,030,613
|
|
|
|
2,703,214
|
|
Other cash expenditures expensed
|
|
|
10,744
|
|
|
|
10,744
|
|
|
|
11,130
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
2,484,399
|
|
|
$
|
1,041,357
|
|
|
$
|
2,714,344
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Atascocita Commons
Humble, TX
Shopping Center
|
|
|
|
Tractor Supply
Southwick, MA
Specialty Retail
|
|
|
|
Tractor Supply
Belchertown, MA
Specialty Retail
|
|
Gross leasable square footage
|
|
|
306,890(3
|
)
|
|
|
19,097
|
|
|
|
19,097
|
|
Date of purchase
|
|
|
06/29/10
|
|
|
|
06/29/10
|
|
|
|
06/29/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
57,630,000
|
|
|
|
4,487,185
|
|
|
|
3,712,438
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
57,630,000
|
|
|
|
4,487,185
|
|
|
|
3,712,438
|
|
Other cash expenditures expensed
|
|
|
141,889
|
|
|
|
23,778
|
|
|
|
21,742
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
57,771,889
|
|
|
$
|
4,510,963
|
|
|
$
|
3,734,180
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-78
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
AutoZone
Pearl River, LA
Automotive Parts
|
|
|
|
AutoZone
Rapid City, SD
Automotive Parts
|
|
|
|
Chilis
Flanders, NJ
Restaurant
|
|
Gross leasable square footage
|
|
|
7,370
|
|
|
|
7,381
|
|
|
|
6,046
|
|
Date of purchase
|
|
|
06/30/10
|
|
|
|
06/30/10
|
|
|
|
06/30/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
1,428,000
|
|
|
|
1,186,770
|
|
|
|
2,478,532
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
1,428,000
|
|
|
|
1,186,770
|
|
|
|
2,478,532
|
|
Other cash expenditures expensed
|
|
|
38,406
|
|
|
|
27,731
|
|
|
|
32,246
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
1,466,406
|
|
|
$
|
1,214,501
|
|
|
$
|
2,510,778
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Chilis
Ramsey, NJ
Restaurant
|
|
|
|
Macaroni Grill
Flanders, NJ
Restaurant
|
|
|
|
Macaroni Grill
Mt. Laurel, NJ
Restaurant
|
|
Gross leasable square footage
|
|
|
6,148
|
|
|
|
6,874
|
|
|
|
7,058
|
|
Date of purchase
|
|
|
06/30/10
|
|
|
|
06/30/10
|
|
|
|
06/30/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
1,850,337
|
|
|
|
1,343,414
|
|
|
|
1,403,122
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
1,850,337
|
|
|
|
1,343,414
|
|
|
|
1,403,122
|
|
Other cash expenditures expensed
|
|
|
35,463
|
|
|
|
35,691
|
|
|
|
64,284
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
1,885,800
|
|
|
$
|
1,379,105
|
|
|
$
|
1,467,406
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Macaroni Grill
Ramsey, NJ
Restaurant
|
|
|
|
Macaroni Grill
West Windsor, NJ
Restaurant
|
|
|
|
On the Border
Alpharetta, GA
Restaurant
|
|
Gross leasable square footage
|
|
|
8,074
|
|
|
|
7,913
|
|
|
|
6,660
|
|
Date of purchase
|
|
|
06/30/10
|
|
|
|
06/30/10
|
|
|
|
06/30/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
2,537,561
|
|
|
|
1,562,341
|
|
|
|
2,997,871
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
2,537,561
|
|
|
|
1,562,341
|
|
|
|
2,997,871
|
|
Other cash expenditures expensed
|
|
|
39,101
|
|
|
|
27,929
|
|
|
|
15,074
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
2,576,662
|
|
|
$
|
1,590,270
|
|
|
$
|
3,012,945
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-79
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
On the Border
Auburn Hills, MI
Restaurant
|
|
|
|
On the Border
Buford, GA
Restaurant
|
|
|
|
On the Border
Burleson, TX
Restaurant
|
|
Gross leasable square footage
|
|
|
8,367
|
|
|
|
6,088
|
|
|
|
6,082
|
|
Date of purchase
|
|
|
06/30/10
|
|
|
|
06/30/10
|
|
|
|
06/30/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
3,234,227
|
|
|
|
2,705,505
|
|
|
|
3,257,494
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
3,234,227
|
|
|
|
2,705,505
|
|
|
|
3,257,494
|
|
Other cash expenditures expensed
|
|
|
14,945
|
|
|
|
14,914
|
|
|
|
22,275
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
3,249,172
|
|
|
$
|
2,720,419
|
|
|
$
|
3,279,769
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
On the Border
College Station, TX
Restaurant
|
|
|
|
On the Border
Columbus, OH
Restaurant
|
|
|
|
On the Border
Concord Mills, NC
Restaurant
|
|
Gross leasable square footage
|
|
|
6,652
|
|
|
|
7,671
|
|
|
|
6,102
|
|
Date of purchase
|
|
|
06/30/10
|
|
|
|
06/30/10
|
|
|
|
06/30/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
2,978,865
|
|
|
|
2,971,056
|
|
|
|
2,979,296
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
2,978,865
|
|
|
|
2,971,056
|
|
|
|
2,979,296
|
|
Other cash expenditures expensed
|
|
|
21,825
|
|
|
|
19,520
|
|
|
|
15,527
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
3,000,690
|
|
|
$
|
2,990,576
|
|
|
$
|
2,994,823
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
On the Border
Denton, TX
Restaurant
|
|
|
|
On the Border
Desoto, TX
Restaurant
|
|
|
|
On the Border
Fort Worth, TX
Restaurant
|
|
Gross leasable square footage
|
|
|
5,661
|
|
|
|
9,231
|
|
|
|
7,127
|
|
Date of purchase
|
|
|
06/30/10
|
|
|
|
06/30/10
|
|
|
|
06/30/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
2,880,412
|
|
|
|
3,270,358
|
|
|
|
3,542,132
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
2,880,412
|
|
|
|
3,270,358
|
|
|
|
3,542,132
|
|
Other cash expenditures expensed
|
|
|
21,309
|
|
|
|
22,308
|
|
|
|
23,139
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
2,901,721
|
|
|
$
|
3,292,666
|
|
|
$
|
3,565,271
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-80
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
On the Border
Garland, TX
Restaurant
|
|
|
|
On the Border
Kansas City, MO
Restaurant
|
|
|
|
On the Border
Lees Summit, MO
Restaurant
|
|
Gross leasable square footage
|
|
|
5,948
|
|
|
|
6,780
|
|
|
|
5,780
|
|
Date of purchase
|
|
|
06/30/10
|
|
|
|
06/30/10
|
|
|
|
06/30/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
2,221,582
|
|
|
|
2,564,167
|
|
|
|
2,407,823
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
2,221,582
|
|
|
|
2,564,167
|
|
|
|
2,407,823
|
|
Other cash expenditures expensed
|
|
|
18,638
|
|
|
|
15,125
|
|
|
|
15,180
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
2,240,220
|
|
|
$
|
2,579,292
|
|
|
$
|
2,423,003
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
On the Border
Lubbock, TX
Restaurant
|
|
|
|
On the Border
Mesa, AZ
Restaurant
|
|
|
|
On the Border
Mt. Laurel, NJ
Restaurant
|
|
Gross leasable square footage
|
|
|
6,745
|
|
|
|
6,586
|
|
|
|
7,041
|
|
Date of purchase
|
|
|
06/30/10
|
|
|
|
06/30/10
|
|
|
|
06/30/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
3,313,867
|
|
|
|
2,964,131
|
|
|
|
2,869,419
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
3,313,867
|
|
|
|
2,964,131
|
|
|
|
2,869,419
|
|
Other cash expenditures expensed
|
|
|
22,426
|
|
|
|
13,523
|
|
|
|
8,914
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
3,336,293
|
|
|
$
|
2,977,654
|
|
|
$
|
2,878,333
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
On the Border
Naperville, IL
Restaurant
|
|
|
|
On the Border
Novi, MI
Restaurant
|
|
|
|
On the Border
Oklahoma City, OK
Restaurant
|
|
Gross leasable square footage
|
|
|
6,906
|
|
|
|
8,017
|
|
|
|
7,289
|
|
Date of purchase
|
|
|
06/30/10
|
|
|
|
06/30/10
|
|
|
|
06/30/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
3,465,155
|
|
|
|
2,881,239
|
|
|
|
2,936,070
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
3,465,155
|
|
|
|
2,881,239
|
|
|
|
2,936,070
|
|
Other cash expenditures expensed
|
|
|
20,530
|
|
|
|
14,698
|
|
|
|
18,738
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
3,485,685
|
|
|
$
|
2,895,937
|
|
|
$
|
2,954,808
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-81
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
On the Border
Peoria, AZ
Restaurant
|
|
|
|
On the Border
Rockwell, TX
Restaurant
|
|
|
|
On the Border
Rogers, AR
Restaurant
|
|
Gross leasable square footage
|
|
|
6,506
|
|
|
|
6,668
|
|
|
|
5,782
|
|
Date of purchase
|
|
|
06/30/10
|
|
|
|
06/30/10
|
|
|
|
06/30/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
2,601,532
|
|
|
|
3,081,477
|
|
|
|
1,939,417
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
2,601,532
|
|
|
|
3,081,477
|
|
|
|
1,939,417
|
|
Other cash expenditures expensed
|
|
|
13,402
|
|
|
|
21,800
|
|
|
|
19,991
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
2,614,934
|
|
|
$
|
3,103,277
|
|
|
$
|
1,959,408
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
On the Border
Tulsa, OK
Restaurant
|
|
|
|
On the Border
West Windsor, NJ
Restaurant
|
|
|
|
On the Border
West Springfield, MA
Restaurant
|
|
Gross leasable square footage
|
|
|
7,559
|
|
|
|
7,611
|
|
|
|
8,248
|
|
Date of purchase
|
|
|
06/30/10
|
|
|
|
06/30/10
|
|
|
|
06/30/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
3,395,252
|
|
|
|
3,579,566
|
|
|
|
3,954,279
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
3,395,252
|
|
|
|
3,579,566
|
|
|
|
3,954,279
|
|
Other cash expenditures expensed
|
|
|
19,051
|
|
|
|
55,149
|
|
|
|
17,803
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
3,414,303
|
|
|
$
|
3,634,715
|
|
|
$
|
3,972,082
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
On the Border
Woodbridge, VA
Restaurant
|
|
|
|
Best Buy
Montgomery, AL
Specialty Retail
|
|
|
|
City Center Plaza
Bellevue, WA
Office Building
|
|
Gross leasable square footage
|
|
|
7,878
|
|
|
|
30,505
|
|
|
|
583,179
|
|
Date of purchase
|
|
|
06/30/10
|
|
|
|
07/06/10
|
|
|
|
07/09/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
3,569,830
|
|
|
|
6,222,000
|
|
|
|
316,200,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
3,569,830
|
|
|
|
6,222,000
|
|
|
|
316,200,000
|
|
Other cash expenditures expensed
|
|
|
29,048
|
|
|
|
25,743
|
|
|
|
727,590
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
3,598,878
|
|
|
$
|
6,247,743
|
|
|
$
|
316,927,590
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-82
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
AutoZone
Hartville, OH
Automotive Parts
|
|
|
|
Walgreens
Leland, NC
Drugstore
|
|
|
|
Walgreens
Durham, NC
Drugstore
|
|
Gross leasable square footage
|
|
|
7,381
|
|
|
|
14,820
|
|
|
|
14,606
|
|
Date of purchase
|
|
|
07/14/10
|
|
|
|
07/15/10
|
|
|
|
07/20/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
1,236,240
|
|
|
|
4,901,100
|
|
|
|
5,513,350
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
1,236,240
|
|
|
|
4,901,100
|
|
|
|
5,513,350
|
|
Other cash expenditures expensed
|
|
|
24,761
|
|
|
|
22,506
|
|
|
|
50,012
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
1,261,001
|
|
|
$
|
4,923,606
|
|
|
$
|
5,563,362
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Tire Kingdom
Auburndale, FL
Automotive Parts
|
|
|
|
Tractor Supply
St. John, IN
Specialty Retail
|
|
|
|
Home Depot
Slidell, LA
Home Improvement
|
|
Gross leasable square footage
|
|
|
6,922
|
|
|
|
24,727
|
|
|
|
(3
|
)
|
Date of purchase
|
|
|
07/20/10
|
|
|
|
07/28/10
|
|
|
|
07/28/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
2,297,040
|
|
|
|
4,549,200
|
|
|
|
3,777,784
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
2,297,040
|
|
|
|
4,549,200
|
|
|
|
3,777,784
|
|
Other cash expenditures expensed
|
|
|
20,062
|
|
|
|
10,842
|
|
|
|
58,002
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
2,317,102
|
|
|
$
|
4,560,042
|
|
|
$
|
3,835,786
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Stop & Shop
Stamford, CT
Grocery
|
|
|
|
Home Depot
Tolleson, AZ
Home Improvement
|
|
|
|
Advanced Auto
Sapulpa, OK
Automotive Parts
|
|
Gross leasable square footage
|
|
|
69,733
|
|
|
|
466,694
|
|
|
|
6,784
|
|
Date of purchase
|
|
|
07/30/10
|
|
|
|
07/30/10
|
|
|
|
08/03/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
31,110,000
|
|
|
|
31,054,152
|
|
|
|
1,441,266
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
31,110,000
|
|
|
|
31,054,152
|
|
|
|
1,441,266
|
|
Other cash expenditures expensed
|
|
|
98,441
|
|
|
|
69,738
|
|
|
|
20,805
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
31,208,441
|
|
|
$
|
31,123,890
|
|
|
$
|
1,462,071
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-83
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Advanced Auto
Franklin, IN
Automotive Parts
|
|
|
|
Advanced Auto
Grand Rapids, MI
Automotive Parts
|
|
|
|
Tractor Supply
Troy, MO
Specialty Retail
|
|
Gross leasable square footage
|
|
|
6,157
|
|
|
|
6,133
|
|
|
|
19,100
|
|
Date of purchase
|
|
|
08/12/10
|
|
|
|
08/12/10
|
|
|
|
08/13/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
1,490,279
|
|
|
|
1,366,800
|
|
|
|
2,671,429
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
1,490,279
|
|
|
|
1,366,800
|
|
|
|
2,671,429
|
|
Other cash expenditures expensed
|
|
|
18,145
|
|
|
|
15,767
|
|
|
|
25,499
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
1,508,424
|
|
|
$
|
1,382,567
|
|
|
$
|
2,696,928
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Tractor Supply
Union, MO
Specialty Retail
|
|
|
|
Tractor Supply
Alton, IL
Specialty Retail
|
|
|
|
Fed Ex
Northwood, OH
Distribution
|
|
Gross leasable square footage
|
|
|
19,097
|
|
|
|
19,097
|
|
|
|
89,921
|
|
Date of purchase
|
|
|
08/13/10
|
|
|
|
08/13/10
|
|
|
|
08/17/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
2,914,286
|
|
|
|
2,914,286
|
|
|
|
4,970,460
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
2,914,286
|
|
|
|
2,914,286
|
|
|
|
4,970,460
|
|
Other cash expenditures expensed
|
|
|
25,588
|
|
|
|
22,785
|
|
|
|
23,067
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
2,939,874
|
|
|
$
|
2,937,071
|
|
|
$
|
4,993,527
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
LA Fitness
Dallas, TX
Fitness
|
|
|
|
CarMax
Austin, TX
Auto Dealership
|
|
|
|
Manchester Highlands
St. Louis, MO
Shopping Center
|
|
Gross leasable square footage
|
|
|
45,000
|
|
|
|
55,888
|
|
|
|
136,273(3
|
)
|
Date of purchase
|
|
|
08/17/10
|
|
|
|
08/25/10
|
|
|
|
08/26/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
9,792,000
|
|
|
|
21,675,000
|
|
|
|
49,470,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
9,792,000
|
|
|
|
21,675,000
|
|
|
|
49,470,000
|
|
Other cash expenditures expensed
|
|
|
34,141
|
|
|
|
39,470
|
|
|
|
111,109
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
9,826,141
|
|
|
$
|
21,714,470
|
|
|
$
|
49,581,109
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-84
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Academy Sports
Austin, TX
Sporting Goods
|
|
|
|
Whittwood Town
Center
Whittier, CA
Shopping Center
|
|
|
|
Lowes
Ticonderoga, NY
Home Improvement
|
|
Gross leasable square footage
|
|
|
89,807
|
|
|
|
533,518(3
|
)
|
|
|
(3
|
)
|
Date of purchase
|
|
|
08/26/10
|
|
|
|
08/27/10
|
|
|
|
08/31/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
10,544,760
|
|
|
|
85,170,000
|
|
|
|
8,899,329
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
10,544,760
|
|
|
|
85,170,000
|
|
|
|
8,899,329
|
|
Other cash expenditures expensed
|
|
|
35,790
|
|
|
|
188,146
|
|
|
|
52,880
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
10,580,550
|
|
|
$
|
85,358,146
|
|
|
$
|
8,952,209
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
CVS/Tres Amigos
Ringgold, GA
Drugstore/
Restaurant
|
|
|
|
CVS/Noble Roman
Mishawaka, IN
Drugstore/
Restaurant
|
|
|
|
Tractor Supply
Wauseon, OH
Specialty Retail
|
|
Gross leasable square footage
|
|
|
15,029(3
|
)
|
|
|
12,376
|
|
|
|
19,097
|
|
Date of purchase
|
|
|
08/31/10
|
|
|
|
09/08/10
|
|
|
|
09/13/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
4,069,800
|
|
|
|
4,702,960
|
|
|
|
2,548,081
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
4,069,800
|
|
|
|
4,702,960
|
|
|
|
2,548,081
|
|
Other cash expenditures expensed
|
|
|
39,661
|
|
|
|
31,896
|
|
|
|
47,079
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
4,109,461
|
|
|
$
|
4,734,856
|
|
|
$
|
2,595,160
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Tractor Supply
Sellersburg, IN
Specialty Retail
|
|
|
|
Lakeshore Crossing
Gainesville, GA
Shopping Center
|
|
|
|
Tractor Supply
Hamilton, OH
Specialty Retail
|
|
Gross leasable square footage
|
|
|
19,097
|
|
|
|
123,978
|
|
|
|
40,700
|
|
Date of purchase
|
|
|
09/13/10
|
|
|
|
09/15/10
|
|
|
|
09/17/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
2,658,182
|
|
|
|
9,180,000
|
|
|
|
1,713,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
2,658,182
|
|
|
|
9,180,000
|
|
|
|
1,713,600
|
|
Other cash expenditures expensed
|
|
|
21,252
|
|
|
|
44,775
|
|
|
|
26,369
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
2,679,434
|
|
|
$
|
9,224,775
|
|
|
$
|
1,739,969
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-85
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Advanced Auto
Bonita Springs, FL
Automotive Parts
|
|
|
|
Tractor Supply
Dixon, CA
Specialty Retail
|
|
|
|
Tractor Supply
Lawrence, KS
Specialty Retail
|
|
Gross leasable square footage
|
|
|
6,880
|
|
|
|
24,727
|
|
|
|
19,097
|
|
Date of purchase
|
|
|
09/22/10
|
|
|
|
09/24/10
|
|
|
|
09/24/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
2,894,901
|
|
|
|
5,117,850
|
|
|
|
2,826,420
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
2,894,901
|
|
|
|
5,117,850
|
|
|
|
2,826,420
|
|
Other cash expenditures expensed
|
|
|
22,717
|
|
|
|
29,290
|
|
|
|
25,414
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
2,917,618
|
|
|
$
|
5,147,140
|
|
|
$
|
2,851,834
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Tractor Supply
Nixa, MO
Specialty Retail
|
|
|
|
Albertsons
Tucson (Silverbell), AZ
Grocery
|
|
|
|
Albertsons
Mesa, AZ
Grocery
|
|
Gross leasable square footage
|
|
|
19,180
|
|
|
|
60,315
|
|
|
|
51,393
|
|
Date of purchase
|
|
|
09/24/10
|
|
|
|
09/29/10
|
|
|
|
09/29/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
2,395,980
|
|
|
|
11,077,940
|
|
|
|
6,188,945
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
2,395,980
|
|
|
|
11,077,940
|
|
|
|
6,188,945
|
|
Other cash expenditures expensed
|
|
|
24,716
|
|
|
|
22,787
|
|
|
|
20,284
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
2,420,696
|
|
|
$
|
11,100,727
|
|
|
$
|
6,209,229
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Albertsons
Phoenix, AZ
Grocery
|
|
|
|
CVS
Weaverville, NC
Drugstore
|
|
|
|
Wawa
Portsmouth, VA
Convenience Store
|
|
Gross leasable square footage
|
|
|
56,742
|
|
|
|
13,225
|
|
|
|
(3
|
)
|
Date of purchase
|
|
|
09/29/10
|
|
|
|
09/30/10
|
|
|
|
09/30/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
7,139,812
|
|
|
|
6,260,296
|
|
|
|
2,346,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
7,139,812
|
|
|
|
6,260,296
|
|
|
|
2,346,000
|
|
Other cash expenditures expensed
|
|
|
21,434
|
|
|
|
34,653
|
|
|
|
42,648
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
7,161,246
|
|
|
$
|
6,294,949
|
|
|
$
|
2,388,648
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-86
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Advanced Auto
Janesville, WI
Automotive Parts
|
|
|
|
Advanced Auto
Appleton, WI
Automotive Parts
|
|
|
|
LA Fitness
Oakdale, MN
Fitness
|
|
Gross leasable square footage
|
|
|
6,892
|
|
|
|
6,892
|
|
|
|
42,348
|
|
Date of purchase
|
|
|
09/30/10
|
|
|
|
09/30/10
|
|
|
|
09/30/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
1,726,860
|
|
|
|
1,470,840
|
|
|
|
8,807,700
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
1,726,860
|
|
|
|
1,470,840
|
|
|
|
8,807,700
|
|
Other cash expenditures expensed
|
|
|
17,218
|
|
|
|
17,146
|
|
|
|
28,524
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
1,744,078
|
|
|
$
|
1,487,986
|
|
|
$
|
8,836,224
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Tractor Supply
Augusta, ME
Specialty Retail
|
|
|
|
Shoppes at Port Arthur
Port Arthur, TX
Shopping Center
|
|
|
|
CVS
Lynchburg, VA
Drugstore
|
|
Gross leasable square footage
|
|
|
19,097
|
|
|
|
95,877
|
|
|
|
10,125
|
|
Date of purchase
|
|
|
10/12/10
|
|
|
|
10/12/10
|
|
|
|
10/12/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
2,835,600
|
|
|
|
15,300,000
|
|
|
|
3,278,280
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
2,835,600
|
|
|
|
15,300,000
|
|
|
|
3,278,280
|
|
Other cash expenditures expensed
|
|
|
43,648
|
|
|
|
65,192
|
|
|
|
42,761
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
2,879,248
|
|
|
$
|
15,365,192
|
|
|
$
|
3,321,041
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
CVS
Gulf Breeze, FL
Drugstore
|
|
|
|
Applebees
Tyler, TX
Restaurant
|
|
|
|
Applebees
Adrian, MI
Restaurant
|
|
Gross leasable square footage
|
|
|
(3
|
)
|
|
|
5,895
|
|
|
|
5,589
|
|
Date of purchase
|
|
|
10/13/10
|
|
|
|
10/13/10
|
|
|
|
10/13/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
1,904,340
|
|
|
|
2,772,308
|
|
|
|
2,285,679
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
1,904,340
|
|
|
|
2,772,308
|
|
|
|
2,285,679
|
|
Other cash expenditures expensed
|
|
|
24,052
|
|
|
|
31,597
|
|
|
|
20,531
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
1,928,392
|
|
|
$
|
2,803,905
|
|
|
$
|
2,306,210
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-87
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Applebees
Wytheville, VA
Restaurant
|
|
|
|
Applebees
Norton, VA
Restaurant
|
|
|
|
Applebees
Kalamazoo, MI
Restaurant
|
|
Gross leasable square footage
|
|
|
4,352
|
|
|
|
3,670
|
|
|
|
5,675
|
|
Date of purchase
|
|
|
10/13/10
|
|
|
|
10/13/10
|
|
|
|
10/13/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
1,676,273
|
|
|
|
1,691,317
|
|
|
|
2,208,849
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
1,676,273
|
|
|
|
1,691,317
|
|
|
|
2,208,849
|
|
Other cash expenditures expensed
|
|
|
21,826
|
|
|
|
21,686
|
|
|
|
20,379
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
1,698,099
|
|
|
$
|
1,713,003
|
|
|
$
|
2,229,228
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Applebees
Owatonna, MN
Restaurant
|
|
|
|
Applebees
West Memphis, AR
Restaurant
|
|
|
|
Applebees
Horn Lake, MS
Restaurant
|
|
Gross leasable square footage
|
|
|
5,459
|
|
|
|
4,237
|
|
|
|
5,035
|
|
Date of purchase
|
|
|
10/13/10
|
|
|
|
10/13/10
|
|
|
|
10/13/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
2,458,461
|
|
|
|
1,523,786
|
|
|
|
1,687,048
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
2,458,461
|
|
|
|
1,523,786
|
|
|
|
1,687,048
|
|
Other cash expenditures expensed
|
|
|
19,400
|
|
|
|
22,810
|
|
|
|
21,254
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
2,477,861
|
|
|
$
|
1,546,596
|
|
|
$
|
1,708,302
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Applebees
Chambersburg, PA
Restaurant
|
|
|
|
Applebees
Bartlett, TN
Restaurant
|
|
|
|
Applebees
Lufkin, TX
Restaurant
|
|
Gross leasable square footage
|
|
|
5,553
|
|
|
|
4,360
|
|
|
|
5,199
|
|
Date of purchase
|
|
|
10/13/10
|
|
|
|
10/13/10
|
|
|
|
10/13/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
2,013,574
|
|
|
|
1,904,733
|
|
|
|
2,013,574
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
2,013,574
|
|
|
|
1,904,733
|
|
|
|
2,013,574
|
|
Other cash expenditures expensed
|
|
|
24,628
|
|
|
|
20,714
|
|
|
|
27,927
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
2,038,202
|
|
|
$
|
1,925,447
|
|
|
$
|
2,041,501
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-88
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Applebees
Swansea, IL
Restaurant
|
|
|
|
CompUSA
Arlington, TX
Consumer Electronics
|
|
|
|
Big O Tire
Phoenix, AZ
Automotive Parts
|
|
Gross leasable square footage
|
|
|
5,728
|
|
|
|
25,000
|
|
|
|
4,560
|
|
Date of purchase
|
|
|
10/13/10
|
|
|
|
10/18/10
|
|
|
|
10/20/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
1,888,308
|
|
|
|
3,340,500
|
|
|
|
1,511,028
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
1,888,308
|
|
|
|
3,340,500
|
|
|
|
1,511,028
|
|
Other cash expenditures expensed
|
|
|
20,884
|
|
|
|
57,362
|
|
|
|
19,396
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
1,909,192
|
|
|
$
|
3,397,862
|
|
|
$
|
1,530,424
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Fed Ex
Dublin, VA
Distribution
|
|
|
|
CVS
Madison Heights, VA
Drugstore
|
|
|
|
Petco & Portrait
Innovations
Lake Charles, LA
Specialty Retail
|
|
Gross leasable square footage
|
|
|
32,105
|
|
|
|
10,125
|
|
|
|
17,678
|
|
Date of purchase
|
|
|
10/21/10
|
|
|
|
10/22/10
|
|
|
|
10/25/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
3,341,772
|
|
|
|
2,973,300
|
|
|
|
3,978,872
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
3,341,772
|
|
|
|
2,973,300
|
|
|
|
3,978,872
|
|
Other cash expenditures expensed
|
|
|
49,051
|
|
|
|
41,106
|
|
|
|
45,022
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
3,390,823
|
|
|
$
|
3,014,406
|
|
|
$
|
4,023,894
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Albertsons
Durango, CO
Grocery
|
|
|
|
Albertsons
Fort Collins, CO
Grocery
|
|
|
|
Albertsons
Denver, CO
Grocery
|
|
Gross leasable square footage
|
|
|
47,481
|
|
|
|
51,230
|
|
|
|
53,208
|
|
Date of purchase
|
|
|
10/26/10
|
|
|
|
10/26/10
|
|
|
|
10/26/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
7,690,091
|
|
|
|
8,828,668
|
|
|
|
7,834,467
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
7,690,091
|
|
|
|
8,828,668
|
|
|
|
7,834,467
|
|
Other cash expenditures expensed
|
|
|
21,551
|
|
|
|
21,976
|
|
|
|
21,571
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
7,711,642
|
|
|
$
|
8,850,644
|
|
|
$
|
7,856,038
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-89
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Albertsons
Silver City, NM
Grocery
|
|
|
|
Albertsons
Clovis, NM
Grocery
|
|
|
|
Albertsons
Los Lunas, NM
Grocery
|
|
Gross leasable square footage
|
|
|
39,385
|
|
|
|
43,484
|
|
|
|
54,349
|
|
Date of purchase
|
|
|
10/26/10
|
|
|
|
10/26/10
|
|
|
|
10/26/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
7,261,509
|
|
|
|
8,010,855
|
|
|
|
8,329,111
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
7,261,509
|
|
|
|
8,010,855
|
|
|
|
8,329,111
|
|
Other cash expenditures expensed
|
|
|
24,745
|
|
|
|
25,636
|
|
|
|
26,016
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
7,286,254
|
|
|
$
|
8,036,491
|
|
|
$
|
8,355,127
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Albertsons
Albuquerque
(Lomas), NM
Grocery
|
|
|
|
Albertsons
Yuma, AZ
Grocery
|
|
|
|
Albertsons
El Paso, TX
Grocery
|
|
Gross leasable square footage
|
|
|
65,145
|
|
|
|
57,835
|
|
|
|
55,143
|
|
Date of purchase
|
|
|
10/26/10
|
|
|
|
10/26/10
|
|
|
|
10/26/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
8,996,059
|
|
|
|
8,966,372
|
|
|
|
9,054,216
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
8,996,059
|
|
|
|
8,966,372
|
|
|
|
9,054,216
|
|
Other cash expenditures expensed
|
|
|
26,810
|
|
|
|
17,837
|
|
|
|
25,151
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
9,022,869
|
|
|
$
|
8,984,209
|
|
|
$
|
9,079,367
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Albertsons
Albuquerque, NM
(Academy)
Grocery
|
|
|
|
Albertsons
Scottsdale, AZ
Grocery
|
|
|
|
Albertsons
Tucson (Grant), AZ
Grocery
|
|
Gross leasable square footage
|
|
|
65,413
|
|
|
|
62,119
|
|
|
|
49,491
|
|
Date of purchase
|
|
|
10/26/10
|
|
|
|
10/26/10
|
|
|
|
10/26/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
9,180,554
|
|
|
|
11,570,434
|
|
|
|
5,551,817
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
9,180,554
|
|
|
|
11,570,434
|
|
|
|
5,551,817
|
|
Other cash expenditures expensed
|
|
|
27,030
|
|
|
|
18,193
|
|
|
|
16,145
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
9,207,584
|
|
|
$
|
11,588,627
|
|
|
$
|
5,567,962
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-90
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Albertsons
Lake Havasu City, AZ
Grocery
|
|
|
|
Albertsons
Farmington, NM
Grocery
|
|
|
|
Albertsons
Baton Rouge, LA
(College)
Grocery
|
|
Gross leasable square footage
|
|
|
57,471
|
|
|
|
57,100
|
|
|
|
61,741
|
|
Date of purchase
|
|
|
10/26/10
|
|
|
|
10/26/10
|
|
|
|
10/26/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
7,245,285
|
|
|
|
5,233,715
|
|
|
|
8,019,573
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
7,245,285
|
|
|
|
5,233,715
|
|
|
|
8,019,573
|
|
Other cash expenditures expensed
|
|
|
17,504
|
|
|
|
22,330
|
|
|
|
22,098
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
7,262,789
|
|
|
$
|
5,256,045
|
|
|
$
|
8,041,671
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Albertsons
Baton Rouge, LA
(Airline)
Grocery
|
|
|
|
Albertsons
Baton Rouge, LA
(George)
Grocery
|
|
|
|
Albertsons
Alexandria, LA
Grocery
|
|
Gross leasable square footage
|
|
|
66,430
|
|
|
|
66,057
|
|
|
|
62,117
|
|
Date of purchase
|
|
|
10/26/10
|
|
|
|
10/26/10
|
|
|
|
10/26/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
11,066,478
|
|
|
|
9,652,184
|
|
|
|
8,384,352
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
11,066,478
|
|
|
|
9,652,184
|
|
|
|
8,384,352
|
|
Other cash expenditures expensed
|
|
|
24,832
|
|
|
|
23,610
|
|
|
|
22,436
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
11,091,310
|
|
|
$
|
9,675,794
|
|
|
$
|
8,406,788
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Albertsons
Lafayette, LA
Grocery
|
|
|
|
Albertsons
Fort Worth, TX
(Oakmont)
Grocery
|
|
|
|
Albertsons
Abilene, TX
Grocery
|
|
Gross leasable square footage
|
|
|
74,493
|
|
|
|
64,886
|
|
|
|
67,270
|
|
Date of purchase
|
|
|
10/26/10
|
|
|
|
10/26/10
|
|
|
|
10/26/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
10,974,484
|
|
|
|
7,247,564
|
|
|
|
8,122,046
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
10,974,484
|
|
|
|
7,247,564
|
|
|
|
8,122,046
|
|
Other cash expenditures expensed
|
|
|
24,757
|
|
|
|
23,228
|
|
|
|
24,159
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
10,999,241
|
|
|
$
|
7,270,792
|
|
|
$
|
8,146,205
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-91
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Albertsons
Weatherford, TX
Grocery
|
|
|
|
Albertsons
Fort Worth, TX
(Beach)
Grocery
|
|
|
|
Albertsons
Midland, TX
Grocery
|
|
Gross leasable square footage
|
|
|
57,671
|
|
|
|
52,700
|
|
|
|
66,068
|
|
Date of purchase
|
|
|
10/26/10
|
|
|
|
10/26/10
|
|
|
|
10/26/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
8,024,559
|
|
|
|
9,669,780
|
|
|
|
11,505,417
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
8,024,559
|
|
|
|
9,669,780
|
|
|
|
11,505,417
|
|
Other cash expenditures expensed
|
|
|
24,055
|
|
|
|
25,806
|
|
|
|
27,761
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
8,048,614
|
|
|
$
|
9,695,586
|
|
|
$
|
11,533,178
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Albertsons
Odessa, TX
Grocery
|
|
|
|
Albertsons
Bossier City, LA
Grocery
|
|
|
|
Albertsons
Fort Worth, TX
(Clifford)
Grocery
|
|
Gross leasable square footage
|
|
|
61,955
|
|
|
|
59,777
|
|
|
|
61,247
|
|
Date of purchase
|
|
|
10/26/10
|
|
|
|
10/26/10
|
|
|
|
10/26/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
10,363,093
|
|
|
|
7,341,428
|
|
|
|
6,424,391
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
10,363,093
|
|
|
|
7,341,428
|
|
|
|
6,424,391
|
|
Other cash expenditures expensed
|
|
|
26,545
|
|
|
|
21,470
|
|
|
|
22,351
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
10,389,638
|
|
|
$
|
7,362,898
|
|
|
$
|
6,446,742
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Albertsons
Arlington, TX
Grocery
|
|
|
|
Albertsons
Fort Worth, TX
(Sycamore)
Grocery
|
|
|
|
Giant Eagle
Lancaster, OH
Grocery
|
|
Gross leasable square footage
|
|
|
63,124
|
|
|
|
58,723
|
|
|
|
92,490(3
|
)
|
Date of purchase
|
|
|
10/26/10
|
|
|
|
10/26/10
|
|
|
|
10/29/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
8,580,787
|
|
|
|
7,833,635
|
|
|
|
15,874,161
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
8,580,787
|
|
|
|
7,833,635
|
|
|
|
15,874,161
|
|
Other cash expenditures expensed
|
|
|
24,648
|
|
|
|
23,852
|
|
|
|
44,800
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
8,605,435
|
|
|
$
|
7,857,487
|
|
|
$
|
15,918,961
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-92
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Kohls
Salina, KS
Department Store
|
|
|
|
CVS
Auburndale, FL
Drugstore
|
|
|
|
CVS
Lake Wales, FL
Drugstore
|
|
Gross leasable square footage
|
|
|
64,239
|
|
|
|
13,086
|
|
|
|
11,200
|
|
Date of purchase
|
|
|
10/29/10
|
|
|
|
11/01/10
|
|
|
|
11/01/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
4,941,900
|
|
|
|
2,984,744
|
|
|
|
3,244,445
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
4,941,900
|
|
|
|
2,984,744
|
|
|
|
3,244,445
|
|
Other cash expenditures expensed
|
|
|
43,360
|
|
|
|
34,357
|
|
|
|
34,581
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
4,985,260
|
|
|
$
|
3,019,101
|
|
|
$
|
3,279,026
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Fed Ex
Bossier City, LA
Distribution
|
|
|
|
Ulta
Jackson, TN
Specialty Retail
|
|
|
|
Tractor Supply
Little Rock, AR
Specialty Retail
|
|
Gross leasable square footage
|
|
|
64,402
|
|
|
|
9,991
|
|
|
|
19,097
|
|
Date of purchase
|
|
|
11/01/10
|
|
|
|
11/05/10
|
|
|
|
11/09/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
5,386,020
|
|
|
|
2,733,600
|
|
|
|
2,507,160
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
5,386,020
|
|
|
|
2,733,600
|
|
|
|
2,507,160
|
|
Other cash expenditures expensed
|
|
|
47,211
|
|
|
|
37,312
|
|
|
|
24,595
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
5,433,231
|
|
|
$
|
2,770,912
|
|
|
$
|
2,531,755
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Tractor Supply
Jefferson City, MO
Specialty Retail
|
|
|
|
Walgreens
Tucson (River), AZ
Drugstore
|
|
|
|
Wal-Mart
Pueblo, CO
Discount Retail
|
|
Gross leasable square footage
|
|
|
19,500
|
|
|
|
15,120
|
|
|
|
202,847
|
|
Date of purchase
|
|
|
11/09/10
|
|
|
|
11/12/10
|
|
|
|
11/12/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
1,941,060
|
|
|
|
5,559,000
|
|
|
|
15,300,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
1,941,060
|
|
|
|
5,559,000
|
|
|
|
15,300,000
|
|
Other cash expenditures expensed
|
|
|
22,700
|
|
|
|
44,212
|
|
|
|
39,285
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
1,963,760
|
|
|
$
|
5,603,212
|
|
|
$
|
15,339,285
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-93
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Volusia Square
Daytona Beach, FL
Shopping Center
|
|
|
|
CSAA
Oklahoma City, OK
Office Building
|
|
|
|
Dell Perot Systems
Lincoln, NE
Office Building
|
|
Gross leasable square footage
|
|
|
228,139(3
|
)
|
|
|
147,107
|
|
|
|
150,000
|
|
Date of purchase
|
|
|
11/12/10
|
|
|
|
11/15/10
|
|
|
|
11/15/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
31,620,000
|
|
|
|
29,937,000
|
|
|
|
22,542,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
31,620,000
|
|
|
|
29,937,000
|
|
|
|
22,542,000
|
|
Other cash expenditures expensed
|
|
|
59,597
|
|
|
|
47,537
|
|
|
|
36,058
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
31,679,597
|
|
|
$
|
29,984,537
|
|
|
$
|
22,578,058
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Breakfast Point
Panama City
Beach, FL
Shopping Center
|
|
|
|
Stripes
Haskell, TX
Convenience Store
|
|
|
|
Stripes Carrizo
Springs, TX
Convenience Store
|
|
Gross leasable square footage
|
|
|
97,931
|
|
|
|
6,309
|
|
|
|
6,838
|
|
Date of purchase
|
|
|
11/18/10
|
|
|
|
11/22/10
|
|
|
|
11/22/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
16,320,000
|
|
|
|
2,538,604
|
|
|
|
2,910,903
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
16,320,000
|
|
|
|
2,538,604
|
|
|
|
2,910,903
|
|
Other cash expenditures expensed
|
|
|
88,888
|
|
|
|
10,006
|
|
|
|
9,857
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
16,408,888
|
|
|
$
|
2,548,610
|
|
|
$
|
2,920,760
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Stripes
Laredo, TX
Convenience Store
|
|
|
|
Tractor Supply
Franklin, NC
Specialty Retail
|
|
|
|
Walgreens
Matteson, IL
Drugstore
|
|
Gross leasable square footage
|
|
|
4,679
|
|
|
|
19,097
|
|
|
|
14,550
|
|
Date of purchase
|
|
|
11/22/10
|
|
|
|
11/30/10
|
|
|
|
11/30/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
2,881,609
|
|
|
|
2,927,400
|
|
|
|
4,182,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
2,881,609
|
|
|
|
2,927,400
|
|
|
|
4,182,000
|
|
Other cash expenditures expensed
|
|
|
10,107
|
|
|
|
25,532
|
|
|
|
22,540
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
2,891,716
|
|
|
$
|
2,952,932
|
|
|
$
|
4,204,540
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-94
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Walgreens
New Albany, OH
Drugstore
|
|
|
|
Prairie Market
East Oswego, IL
Shopping Center
|
|
|
|
Walgreens
Grayson, GA
Drugstore
|
|
Gross leasable square footage
|
|
|
14,820
|
|
|
|
52,492(3
|
)
|
|
|
14,560
|
|
Date of purchase
|
|
|
12/02/10
|
|
|
|
12/03/10
|
|
|
|
12/07/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
4,182,000
|
|
|
|
25,602,000
|
|
|
|
4,712,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
4,182,000
|
|
|
|
25,602,000
|
|
|
|
4,712,400
|
|
Other cash expenditures expensed
|
|
|
24,467
|
|
|
|
169,805
|
|
|
|
22,000
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
4,206,467
|
|
|
$
|
25,771,805
|
|
|
$
|
4,734,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Walgreens
Tucson (Harrison),
AZ Drugstore
|
|
|
|
Walgreens
Pueblo, CO
Drugstore
|
|
|
|
Stearns Crossing
Bartlett, IL
Shopping Center
|
|
Gross leasable square footage
|
|
|
14,490
|
|
|
|
13,813
|
|
|
|
96,613
|
|
Date of purchase
|
|
|
12/07/10
|
|
|
|
12/07/10
|
|
|
|
12/09/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
5,197,920
|
|
|
|
3,564,900
|
|
|
|
12,622,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
5,197,920
|
|
|
|
3,564,900
|
|
|
|
12,622,500
|
|
Other cash expenditures expensed
|
|
|
22,949
|
|
|
|
25,766
|
|
|
|
56,328
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
5,220,869
|
|
|
$
|
3,590,666
|
|
|
$
|
12,678,828
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Tractor Supply
Sedalia, MO
Specialty Retail
|
|
|
|
Sherwin Williams
Muskegon, MI
Specialty Retail
|
|
|
|
Kohls
Onalaska, WI
Department Store
|
|
Gross leasable square footage
|
|
|
19,028
|
|
|
|
8,000
|
|
|
|
86,432
|
|
Date of purchase
|
|
|
12/10/10
|
|
|
|
12/10/10
|
|
|
|
12/13/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
2,174,640
|
|
|
|
1,453,500
|
|
|
|
7,395,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
2,174,640
|
|
|
|
1,453,500
|
|
|
|
7,395,000
|
|
Other cash expenditures expensed
|
|
|
22,604
|
|
|
|
24,916
|
|
|
|
15,610
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
2,197,244
|
|
|
$
|
1,478,416
|
|
|
$
|
7,410,610
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-95
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
CVS
Athens, GA
Drugstore
|
|
|
|
CVS
Boca Raton, FL
Drugstore
|
|
|
|
CVS
Brownsville, TX
Drugstore
|
|
Gross leasable square footage
|
|
|
14,781
|
|
|
|
14,422
|
|
|
|
13,000
|
|
Date of purchase
|
|
|
12/14/10
|
|
|
|
12/14/10
|
|
|
|
12/14/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
6,375,450
|
|
|
|
3,850,039
|
|
|
|
5,947,965
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
6,375,450
|
|
|
|
3,850,039
|
|
|
|
5,947,965
|
|
Other cash expenditures expensed
|
|
|
25,151
|
|
|
|
21,854
|
|
|
|
48,090
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
6,400,601
|
|
|
$
|
3,871,893
|
|
|
$
|
5,996,055
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
CVS
Cayce, SC
Drugstore
|
|
|
|
CVS
City of Industry, CA
Drugstore
|
|
|
|
CVS
Jacksonville, FL
Drugstore
|
|
Gross leasable square footage
|
|
|
11,982
|
|
|
|
12,837
|
|
|
|
13,204
|
|
Date of purchase
|
|
|
12/14/10
|
|
|
|
12/14/10
|
|
|
|
12/14/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
5,082,330
|
|
|
|
3,614,892
|
|
|
|
6,838,403
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
5,082,330
|
|
|
|
3,614,892
|
|
|
|
6,838,403
|
|
Other cash expenditures expensed
|
|
|
28,153
|
|
|
|
19,018
|
|
|
|
23,971
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
5,110,483
|
|
|
$
|
3,633,910
|
|
|
$
|
6,862,374
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
CVS
Lawrence, KS
Drugstore
|
|
|
|
CVS
Lawrenceville, NJ
Drugstore
|
|
|
|
CVS
Mineola, NY
Drugstore
|
|
Gross leasable square footage
|
|
|
12,900
|
|
|
|
15,260
|
|
|
|
12,838
|
|
Date of purchase
|
|
|
12/14/10
|
|
|
|
12/14/10
|
|
|
|
12/14/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
5,519,185
|
|
|
|
9,243,493
|
|
|
|
4,317,320
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
5,519,185
|
|
|
|
9,243,493
|
|
|
|
4,317,320
|
|
Other cash expenditures expensed
|
|
|
22,601
|
|
|
|
133,975
|
|
|
|
33,405
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
5,541,786
|
|
|
$
|
9,377,468
|
|
|
$
|
4,350,725
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-96
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
CVS
Minneapolis, MN
Drugstore
|
|
|
|
CVS
Naples, FL
Drugstore
|
|
|
|
CVS
Southaven
(Goodman), MS
Drugstore
|
|
Gross leasable square footage
|
|
|
13,000
|
|
|
|
12,944
|
|
|
|
13,938
|
|
Date of purchase
|
|
|
12/14/10
|
|
|
|
12/14/10
|
|
|
|
12/14/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
4,356,245
|
|
|
|
3,862,522
|
|
|
|
6,916,177
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
4,356,245
|
|
|
|
3,862,522
|
|
|
|
6,916,177
|
|
Other cash expenditures expensed
|
|
|
21,376
|
|
|
|
21,791
|
|
|
|
34,618
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
4,377,621
|
|
|
$
|
3,884,313
|
|
|
$
|
6,950,795
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
CVS
The Village, OK
Drugstore
|
|
|
|
Folsum Gateway II
Folsom, CA
Shopping Center
|
|
|
|
Tutor Time
Downingtown, PA
Child Care and
Development
|
|
Gross leasable square footage
|
|
|
12,939
|
|
|
|
109,127
|
|
|
|
11,757
|
|
Date of purchase
|
|
|
12/14/10
|
|
|
|
12/15/10
|
|
|
|
12/15/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
5,544,256
|
|
|
|
36,720,000
|
|
|
|
2,026,353
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
5,544,256
|
|
|
|
36,720,000
|
|
|
|
2,026,353
|
|
Other cash expenditures expensed
|
|
|
32,607
|
|
|
|
121,651
|
|
|
|
56,627
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
5,576,863
|
|
|
$
|
36,841,651
|
|
|
$
|
2,082,980
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Childtime Childcare
Bedford, OH
Child Care and
Development
|
|
|
|
Childtime Childcare
Modesto, CA
Child Care and
Development
|
|
|
|
Tutor Time
Austin, TX
Child Care and
Development
|
|
Gross leasable square footage
|
|
|
5,500
|
|
|
|
6,310
|
|
|
|
10,994
|
|
Date of purchase
|
|
|
12/15/10
|
|
|
|
12/15/10
|
|
|
|
12/15/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
796,250
|
|
|
|
1,224,999
|
|
|
|
1,752,110
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
796,250
|
|
|
|
1,224,999
|
|
|
|
1,752,110
|
|
Other cash expenditures expensed
|
|
|
26,423
|
|
|
|
36,081
|
|
|
|
49,269
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
822,673
|
|
|
$
|
1,261,080
|
|
|
$
|
1,801,379
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-97
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Childrens Courtyard
Grand Prairie, TX
Child Care and
Development
|
|
|
|
Childtime Childcare
Oklahoma City, OK
(Western)
Child Care and
Development
|
|
|
|
Childtime Childcare
Oklahoma City, OK
(Rockwell)
Child Care and
Development
|
|
Gross leasable square footage
|
|
|
8,409
|
|
|
|
6,597
|
|
|
|
6,594
|
|
Date of purchase
|
|
|
12/15/10
|
|
|
|
12/15/10
|
|
|
|
12/15/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
949,683
|
|
|
|
767,359
|
|
|
|
714,582
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
949,683
|
|
|
|
767,359
|
|
|
|
714,582
|
|
Other cash expenditures expensed
|
|
|
28,946
|
|
|
|
25,744
|
|
|
|
24,392
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
978,629
|
|
|
$
|
793,103
|
|
|
$
|
738,974
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
HealthNow Corporate
Headquarters
Buffalo, NY
Office Building
|
|
|
|
Thorntons
Bloomington, IL
Convenience Store
|
|
|
|
Thorntons
Clarksville, IN
Convenience Store
|
|
Gross leasable square footage
|
|
|
430,458
|
|
|
|
2,971
|
|
|
|
4,889
|
|
Date of purchase
|
|
|
12/16/10
|
|
|
|
12/17/10
|
|
|
|
12/17/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
86,190,000
|
|
|
|
1,993,080
|
|
|
|
2,029,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
86,190,000
|
|
|
|
1,993,080
|
|
|
|
2,029,800
|
|
Other cash expenditures expensed
|
|
|
366,312
|
|
|
|
6,890
|
|
|
|
6,949
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
86,556,312
|
|
|
$
|
1,999,970
|
|
|
$
|
2,036,749
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-98
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Thorntons
Edinburgh, IN
Convenience Store
|
|
|
|
Thorntons
Evansville
(Rosenberger), IN
Convenience Store
|
|
|
|
Thorntons
Evansville, IN
Convenience Store
|
|
Gross leasable square footage
|
|
|
3,080
|
|
|
|
2,800
|
|
|
|
2,939
|
|
Date of purchase
|
|
|
12/17/10
|
|
|
|
12/17/10
|
|
|
|
12/17/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
2,261,340
|
|
|
|
2,097,120
|
|
|
|
2,121,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
2,261,340
|
|
|
|
2,097,120
|
|
|
|
2,121,600
|
|
Other cash expenditures expensed
|
|
|
6,949
|
|
|
|
6,949
|
|
|
|
6,949
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
2,268,289
|
|
|
$
|
2,104,069
|
|
|
$
|
2,128,549
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Thorntons
Franklin Park, IL
Convenience Store
|
|
|
|
Thorntons
Galloway, OH
Convenience Store
|
|
|
|
Thorntons
Henderson (Green), KY
Convenience Store
|
|
Gross leasable square footage
|
|
|
3,321
|
|
|
|
3,758
|
|
|
|
3,434
|
|
Date of purchase
|
|
|
12/17/10
|
|
|
|
12/17/10
|
|
|
|
12/17/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
3,302,760
|
|
|
|
1,999,200
|
|
|
|
2,041,020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
3,302,760
|
|
|
|
1,999,200
|
|
|
|
2,041,020
|
|
Other cash expenditures expensed
|
|
|
6,890
|
|
|
|
6,949
|
|
|
|
6,949
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
3,309,650
|
|
|
$
|
2,006,149
|
|
|
$
|
2,047,969
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Thorntons
Henderson, KY
Convenience Store
|
|
|
|
Thorntons
Jeffersonville, IN
Convenience Store
|
|
|
|
Thorntons
Joliet, IL
Convenience Store
|
|
Gross leasable square footage
|
|
|
3,846
|
|
|
|
3,082
|
|
|
|
3,840
|
|
Date of purchase
|
|
|
12/17/10
|
|
|
|
12/17/10
|
|
|
|
12/17/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
4,136,100
|
|
|
|
3,011,040
|
|
|
|
3,573,060
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
4,136,100
|
|
|
|
3,011,040
|
|
|
|
3,573,060
|
|
Other cash expenditures expensed
|
|
|
6,949
|
|
|
|
6,949
|
|
|
|
6,890
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
4,143,049
|
|
|
$
|
3,017,989
|
|
|
$
|
3,579,950
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-99
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Thorntons
Louisville, KY
Convenience Store
|
|
|
|
Thorntons
Oaklawn, IL
Convenience Store
|
|
|
|
Thorntons
Ottawa, IL
Convenience Store
|
|
Gross leasable square footage
|
|
|
4,390
|
|
|
|
2,210
|
|
|
|
4,901
|
|
Date of purchase
|
|
|
12/17/10
|
|
|
|
12/17/10
|
|
|
|
12/17/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
2,094,060
|
|
|
|
2,179,740
|
|
|
|
2,728,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
2,094,060
|
|
|
|
2,179,740
|
|
|
|
2,728,500
|
|
Other cash expenditures expensed
|
|
|
6,949
|
|
|
|
6,890
|
|
|
|
6,890
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
2,101,009
|
|
|
$
|
2,186,630
|
|
|
$
|
2,735,390
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Thorntons
Plainfield, IL
Convenience Store
|
|
|
|
Thorntons
Roselle, IL
Convenience Store
|
|
|
|
Thorntons
Shelbyville, KY
Convenience Store
|
|
Gross leasable square footage
|
|
|
3,080
|
|
|
|
3,080
|
|
|
|
3,150
|
|
Date of purchase
|
|
|
12/17/10
|
|
|
|
12/17/10
|
|
|
|
12/17/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
2,306,220
|
|
|
|
2,837,640
|
|
|
|
2,341,920
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
2,306,220
|
|
|
|
2,837,640
|
|
|
|
2,341,920
|
|
Other cash expenditures expensed
|
|
|
6,890
|
|
|
|
6,890
|
|
|
|
6,949
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
2,313,110
|
|
|
$
|
2,844,530
|
|
|
$
|
2,348,869
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Thorntons
South Elgin, IL
Convenience Store
|
|
|
|
Thorntons
Springfield, IL
Convenience Store
|
|
|
|
Thorntons
Summit, IL
Convenience Store
|
|
Gross leasable square footage
|
|
|
3,080
|
|
|
|
3,034
|
|
|
|
3,840
|
|
Date of purchase
|
|
|
12/17/10
|
|
|
|
12/17/10
|
|
|
|
12/17/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
3,194,640
|
|
|
|
4,016,760
|
|
|
|
2,123,640
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
3,194,640
|
|
|
|
4,016,760
|
|
|
|
2,123,640
|
|
Other cash expenditures expensed
|
|
|
6,890
|
|
|
|
6,890
|
|
|
|
6,890
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
3,201,530
|
|
|
$
|
4,023,650
|
|
|
$
|
2,130,530
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-100
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Thorntons
Terre Haute, IN
Convenience Store
|
|
|
|
Thorntons
Waukegan, IL
Convenience Store
|
|
|
|
Thorntons
Westmond, IL
Convenience Store
|
|
Gross leasable square footage
|
|
|
3,080
|
|
|
|
3,840
|
|
|
|
3,840
|
|
Date of purchase
|
|
|
12/17/10
|
|
|
|
12/17/10
|
|
|
|
12/17/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
2,825,400
|
|
|
|
2,277,660
|
|
|
|
3,818,880
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
2,825,400
|
|
|
|
2,277,660
|
|
|
|
3,818,880
|
|
Other cash expenditures expensed
|
|
|
6,949
|
|
|
|
6,890
|
|
|
|
6,890
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
2,832,349
|
|
|
$
|
2,284,550
|
|
|
$
|
3,825,770
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Waterside
Marketplace
Chesterfield
Township, MI
Shopping Center
|
|
|
|
Advanced Auto
Howell, MI
Automotive Parts
|
|
|
|
Advanced Auto
Salem, OH
Automotive Parts
|
|
Gross leasable square footage
|
|
|
243,934
|
|
|
|
6,781
|
|
|
|
6,141
|
|
Date of purchase
|
|
|
12/20/10
|
|
|
|
12/20/10
|
|
|
|
12/20/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
27,030,000
|
|
|
|
1,652,301
|
|
|
|
1,298,182
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
27,030,000
|
|
|
|
1,652,301
|
|
|
|
1,298,182
|
|
Other cash expenditures expensed
|
|
|
389,026
|
|
|
|
24,923
|
|
|
|
22,805
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
27,419,026
|
|
|
$
|
1,677,224
|
|
|
$
|
1,320,987
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Advanced Auto
Lehigh Acres, FL
Automotive Parts
|
|
|
|
Advanced Auto
Bethel, OH
Automotive Parts
|
|
|
|
Advanced Auto
Crestwood, KY
Automotive Parts
|
|
Gross leasable square footage
|
|
|
6,913
|
|
|
|
6,786
|
|
|
|
6,124
|
|
Date of purchase
|
|
|
12/21/10
|
|
|
|
12/22/10
|
|
|
|
12/22/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
2,391,894
|
|
|
|
1,417,399
|
|
|
|
1,759,152
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
2,391,894
|
|
|
|
1,417,399
|
|
|
|
1,759,152
|
|
Other cash expenditures expensed
|
|
|
17,497
|
|
|
|
13,100
|
|
|
|
13,521
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
2,409,391
|
|
|
$
|
1,430,499
|
|
|
$
|
1,772,673
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-101
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Advanced Auto
Hillview, KY
Automotive Parts
|
|
|
|
CVS
Gainesville, TX
Drugstore
|
|
|
|
Falcon Valley
Lenexa, KS
Shopping Center
|
|
Gross leasable square footage
|
|
|
6,128
|
|
|
|
13,813
|
|
|
|
76,784
|
|
Date of purchase
|
|
|
12/22/10
|
|
|
|
12/23/10
|
|
|
|
12/23/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
1,441,142
|
|
|
|
3,188,334
|
|
|
|
12,750,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
1,441,142
|
|
|
|
3,188,334
|
|
|
|
12,750,000
|
|
Other cash expenditures expensed
|
|
|
12,787
|
|
|
|
20,866
|
|
|
|
57,353
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
1,453,929
|
|
|
$
|
3,209,200
|
|
|
$
|
12,807,353
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
Red Oak Village
San Marcos, TX
Shopping Center
|
|
|
|
OReilly Auto Parts
Christianburg, VA
Automotive Parts
|
|
|
|
OReilly Auto Parts
Highlands, TX
Automotive Parts
|
|
Gross leasable square footage
|
|
|
172,916(3
|
)
|
|
|
7,200
|
|
|
|
6,000
|
|
Date of purchase
|
|
|
12/23/10
|
|
|
|
12/23/10
|
|
|
|
12/23/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
22,440,000
|
|
|
|
1,187,739
|
|
|
|
955,485
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
22,440,000
|
|
|
|
1,187,739
|
|
|
|
955,485
|
|
Other cash expenditures expensed
|
|
|
67,169
|
|
|
|
26,157
|
|
|
|
20,901
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
22,507,169
|
|
|
$
|
1,213,896
|
|
|
$
|
976,386
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
Inc.
|
|
|
Name, location, type of property
|
|
|
OReilly Auto Parts
San Antonio, TX
Automotive Parts
|
|
|
|
Best Buy
Pineville, NC
Consumer Electronics
|
|
|
|
Walgreens
Fayetteville, NC
Drugstore
|
|
Gross leasable square footage
|
|
|
6,800
|
|
|
|
50,548
|
|
|
|
14,820
|
|
Date of purchase
|
|
|
12/23/10
|
|
|
|
12/28/10
|
|
|
|
12/30/10
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
5,528,999
|
|
|
$
|
|
|
Cash down payment
|
|
|
1,331,100
|
|
|
|
3,202,201
|
|
|
|
6,287,672
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
1,331,100
|
|
|
|
8,731,200
|
|
|
|
6,287,672
|
|
Other cash expenditures expensed
|
|
|
25,602
|
|
|
|
47,509
|
|
|
|
26,432
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
1,356,702
|
|
|
$
|
8,778,709
|
|
|
$
|
6,314,104
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II-102
TABLE
VI
ACQUISITION
OF PROPERTIES BY PROGRAMS
(UNAUDITED) (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Credit
|
|
|
Cole Credit
|
|
|
Cole Collateralized
|
|
|
|
Property Trust III,
|
|
|
Property Trust III,
|
|
|
Senior Notes II,
|
|
Program:
|
|
Inc.
|
|
|
Inc.
|
|
|
LLC
|
|
|
Name, location, type of property
|
|
|
Stripes
Portales, NM
Convenience Store
|
|
|
|
Stripes
Fort Stockton, TX
Convenience Store
|
|
|
|
CVS(2)
Fredericksburg,
VA Drugstore
|
|
Gross leasable square footage
|
|
|
4,833
|
|
|
|
9,950
|
|
|
|
12,900
|
|
Date of purchase
|
|
|
12/30/10
|
|
|
|
12/30/10
|
|
|
|
11/19/08
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
2,629,378
|
|
|
|
4,963,934
|
|
|
|
6,238,861
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
2,629,378
|
|
|
|
4,963,934
|
|
|
|
6,238,861
|
|
Other cash expenditures expensed
|
|
|
9,184
|
|
|
|
9,792
|
|
|
|
113,704
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
2,638,562
|
|
|
$
|
4,973,726
|
|
|
$
|
6,352,565
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Collateralized
|
|
|
Cole Collateralized
|
|
|
Cole Collateralized
|
|
|
|
Senior Notes II,
|
|
|
Senior Notes II,
|
|
|
Senior Notes III,
|
|
Program:
|
|
LLC
|
|
|
LLC
|
|
|
LLC
|
|
|
Name, location, type of property
|
|
|
Walgreens(2)
Fredericksburg, VA
Drugstore
|
|
|
|
Kohls(2)
Burnsville, MN
Department Store
|
|
|
|
Walgreens
Indianapolis, IN
Drugstore
|
|
Gross leasable square footage
|
|
|
14,820
|
|
|
|
101,346
|
|
|
|
14,820
|
|
Date of purchase
|
|
|
11/19/08
|
|
|
|
12/19/08
|
|
|
|
12/12/08
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Cash down payment
|
|
|
7,435,047
|
|
|
|
10,551,900
|
|
|
|
6,375,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
7,435,047
|
|
|
|
10,551,900
|
|
|
|
6,375,000
|
|
Other cash expenditures expensed
|
|
|
131,342
|
|
|
|
20,875
|
|
|
|
30,865
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
7,566,389
|
|
|
$
|
10,572,775
|
|
|
$
|
6,405,865
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cole Collateralized
|
|
|
Cole Collateralized
|
|
|
Cole Collateralized
|
|
|
|
Senior Notes III,
|
|
|
Senior Notes IV,
|
|
|
Senior Notes IV,
|
|
Program:
|
|
LLC
|
|
|
LLC
|
|
|
LLC
|
|
|
Name, location, type of property
|
|
|
Walgreens(2)
Tulsa (S Yale), OK
Drugstore
|
|
|
|
Land Parcel
Canyon Trails, AZ
Land
|
|
|
|
Sams Club(2)
Hoover, AL
Warehouse
|
|
Gross leasable square footage
|
|
|
13,650
|
|
|
|
591,458
|
|
|
|
115,347
|
|
Date of purchase
|
|
|
12/12/08
|
|
|
|
05/14/08
|
|
|
|
12/16/08
|
|
Mortgage financing at date of purchase
|
|
$
|
|
|
|
$
|
200,000
|
|
|
$
|
|
|
Cash down payment
|
|
|
3,980,040
|
|
|
|
1,840,000
|
|
|
|
12,546,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract purchase price plus acquisition fee
|
|
|
3,980,040
|
|
|
|
2,040,000
|
|
|
|
12,546,000
|
|
Other cash expenditures expensed
|
|
|
21,365
|
|
|
|
56,399
|
|
|
|
105,467
|
|
Other cash expenditures capitalized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition cost
|
|
$
|
4,001,405
|
|
|
$
|
2,096,399
|
|
|
$
|
12,651,467
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
These properties were acquired at their original cost from an
affiliate.
|
|
(2)
|
|
These properties were sold at their original cost to an
affiliate.
|
|
(3)
|
|
These properties are subject to a ground lease.
|
II-103
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe
that it meets all the requirements for filing on
Form S-11
and has duly caused this amended Registration Statement to be
signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Phoenix, State of Arizona, on the
24th day of January, 2012.
COLE CREDIT PROPERTY TRUST IV, INC.
|
|
|
|
By:
|
/s/ D.
Kirk McAllaster, Jr.
|
D. Kirk McAllaster, Jr.
Executive Vice President, Chief Financial Officer and
Treasurer
POWER OF
ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the persons whose
signature appears below appoints and constitutes Christopher H.
Cole and D. Kirk McAllaster, Jr., and each of them, his or
her true and lawful attorney-in-fact and agent, each acting
alone, with full power of substitution and resubstitution, for
him or her and in his or her name, place and stead, in any and
all capacities, to execute any and all amendments (including
post-effective amendments) to the within registration statement
(as well as any registration statement for the same offering
covered by this Registration Statement that is to be effective
upon filing pursuant to Rule 462(b) under the Securities
Act of 1933), and to file the same, together with all exhibits
thereto and all other documents in connection therewith, with
the Securities and Exchange Commission and such other agencies,
offices and persons as may be required by applicable law,
granting unto each said attorney-in-fact and agent, each acting
alone, full power and authority to do and perform each and every
act and thing requisite or necessary to be done in and about the
premises, as fully to all intents and purposes as he or she
might or could do in person, hereby ratifying and confirming all
that each said attorney-in-fact and agent, each acting alone may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
amended Registration Statement has been signed by the following
persons in the capacities and on the dates indicated.
|
|
|
|
|
|
|
Name
|
|
Title
|
|
Date
|
|
|
|
|
|
|
*
Christopher
H. Cole
|
|
Chairman of the Board, Chief Executive Officer and President
(Principal Executive Officer)
|
|
January 24, 2012
|
|
|
|
|
|
/s/ D.
Kirk McAllaster, Jr.
D.
Kirk McAllaster, Jr.
|
|
Executive Vice President, Chief Financial Officer and Treasurer
(Principal Financial Officer)
|
|
January 24, 2012
|
|
|
|
|
|
/s/ Simon
J. Misselbrook
Simon
J. Misselbrook
|
|
Vice President of Accounting
(Principal Accounting Officer)
|
|
January 24, 2012
|
|
|
|
|
|
/s/ J.
Marc Myers
J.
Marc Myers
|
|
Director
|
|
January 24, 2012
|
|
|
|
|
|
/s/ Scott
P. Sealy, Sr.
Scott
P. Sealy, Sr.
|
|
Director
|
|
January 24, 2012
|
|
|
|
|
|
|
|
*By:
|
|
/s/ D.
Kirk McAllaster, Jr.
D.
Kirk McAllaster, Jr.
Attorney-in-Fact
|
|
|
|
|
II-104
EXHIBIT
INDEX
|
|
|
|
|
|
1
|
.1*
|
|
Form of Dealer Manager Agreement between Cole Credit Property
Trust IV, Inc. and Cole Capital Corporation.
|
|
3
|
.1
|
|
Articles of Incorporation of Cole Retail Property Trust, Inc.
(n/k/a Cole Credit Property Trust IV, Inc.).
|
|
3
|
.2
|
|
Articles of Amendment of Cole Retail Property Trust, Inc. (n/k/a
Cole Credit Property Trust IV, Inc.).
|
|
3
|
.3
|
|
Articles of Amendment of Cole Advisor Retail Income REIT, Inc.
(n/k/a Cole Credit Property Trust IV, Inc.).
|
|
3
|
.4*
|
|
First Articles of Amendment and Restatement of Cole Credit
Property Trust IV, Inc.
|
|
3
|
.5*
|
|
Bylaws of Cole Credit Property Trust IV, Inc.
|
|
3
|
.6*
|
|
Certificate of Correction to the First Articles of Amendment and
Restatement of Cole Credit Property Trust IV, Inc.
|
|
4
|
.1*
|
|
Form of Subscription Agreement (included as Appendix B to
the prospectus).
|
|
4
|
.2*
|
|
Form of Additional Subscription Agreement (included as
Appendix C to the prospectus).
|
|
4
|
.3*
|
|
Alternative Form of Subscription Agreement (included as
Appendix D to the prospectus).
|
|
5
|
.1*
|
|
Opinion of Venable LLP as to legality of securities.
|
|
8
|
.1*
|
|
Opinion of Morris, Manning & Martin, LLP as to tax matters.
|
|
10
|
.1*
|
|
Advisory Agreement by and between Cole Credit Property Trust IV,
Inc. and Cole REIT Advisors IV, LLC, dated January 20, 2012.
|
|
10
|
.2*
|
|
Amended and Restated Agreement of Limited Partnership of Cole
Operating Partnership IV, LP, by and between Cole Credit
Property Trust IV, Inc. and the limited partners thereto, dated
January 20, 2012.
|
|
10
|
.3*
|
|
Distribution Reinvestment Plan (included as Appendix E to
the prospectus).
|
|
10
|
.4*
|
|
Escrow Agreement by and among Cole Credit Property Trust IV,
Inc., Cole Capital Corporation and UMB Bank, N.A., dated
January 20, 2012.
|
|
21
|
.1
|
|
Subsidiaries of the Registrant.
|
|
23
|
.1*
|
|
Consent of Deloitte & Touche LLP, Independent
Registered Public Accounting Firm.
|
|
23
|
.2*
|
|
Consent of Venable LLP (included in Exhibit 5.1).
|
|
23
|
.3*
|
|
Consent of Morris, Manning & Martin, LLP (included in
Exhibit 8.1).
|
|
24
|
.1*
|
|
Power of Attorney (included on signature page to the
registration statement).
|
II-105