Unassociated Document

As filed with the Securities and Exchange Commission on February 3, 2010

Registration No. 333-145949
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
PRE-EFFECTIVE AMENDMENT NO. 1 TO
POST-EFFECTIVE AMENDMENT NO. 7 TO
FORM S-11
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933
OF SECURITIES OF CERTAIN REAL ESTATE COMPANIES

 
AMERICAN REALTY CAPITAL TRUST, INC.
(Exact Name of Registrant as Specified in Its Governing Instruments)  

106 York Road
Jenkintown, Pennsylvania 19046
(215) 887-2189
(Address, Including Zip Code and Telephone Number, Including Area Code, of Registrant's Principal Executive Offices)  
 
Nicholas S. Schorsch
AMERICAN REALTY CAPITAL TRUST, INC.
106 York Road
Jenkintown, Pennsylvania 19046
(215) 887-2189
(Name and Address, Including Zip Code and Telephone Number, Including Area Code, of Agent for Service) 

With a Copy to: 
Peter M. Fass, Esq.
Proskauer Rose LLP
1585 Broadway
New York, New York 10036-8299
(212) 969-3000
 
Approximate Date of Commencement of Proposed Sale to Public: As soon as practicable after the registration statement becomes effective.

If any of the securities being 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)
                 
Large accelerated filer
 
o
     
Accelerated filer
 
o
Non-accelerated filer
 
þ
(Do not check if a smaller reporting company)
 
Smaller reporting company
 
o


 
 

 

This Post-Effective Amendment No. 7 consists of the following:
 
 
·
Supplement No. 3, dated February 3, 2010, included herewith, which will be delivered as an unattached document along with the Prospectus.
 
 
·
Registrant’s final form of Prospectus, dated November 10, 2009, previously filed pursuant to Rule 424(b)(3) on November 13, 2009.
 
 
·
Part II, included herewith.
 
 
·
Signatures, included herewith.
 

 
 

 

AMERICAN REALTY CAPITAL TRUST, INC.
SUPPLEMENT NO. 3 DATED February 3, 2010
TO THE PROSPECTUS DATED November 10, 2009

This prospectus supplement (this “Supplement No. 3”) is part of the prospectus of American Realty Capital Trust, Inc. (the “REIT” or the “Company” ), dated November 10, 2009 (the “Prospectus”), and should be read in conjunction with the Prospectus. This Supplement No. 3 supplements, modifies or supersedes certain information contained in our Prospectus. This Supplement No. 3 consolidates, supersedes and replaces all prior Supplements and must be read in conjunction with our Prospectus. Unless otherwise indicated, the information contained herein is current as of the filing date of the prospectus supplement in which the Company initially disclosed such information. This Supplement No. 3 will be delivered with the Prospectus.

The purpose of this Supplement No. 3 is to consolidate the information contained in all previous supplements to the Prospectus and to update the financial information of the REIT.

TABLE OF CONTENTS
 
 
Supplement No. 3
Page No.
 
Prospectus
Page No.
Summary Risk Factors
1
 
N/A
Status of the Offering
1
 
N/A
Shares Currently Outstanding
1
 
N/A
Selected Financial Data
2
 
N/A
Real Estate Investments Summary
2-4
 
87-104
Status of Distributions
4-5
 
10, 148-150
Status of Fees Paid and Deferred
6
 
4, 36-37
Real Estate Investments
6-11
 
87-104
Potential Property Investments
11-13
 
104-106
Dealer Manager
13
 
51-52
Certain Relationships and Related Transactions
13
 
53-54
Section 1031 Exchange Program
13
 
84-85
Incorporation of Certain Information by Reference
13
 
171
 
Summary Risk Factors

We have qualified as a REIT for the tax year ended December 31, 2009.

Status of the Offering
 
We commenced our initial public offering of 150,000,000 shares of common stock on January 25, 2008. As of January 26, 2010, we had issued 15,581,689 shares of common stock, including 339,077 shares issued in connection with an acquisition in March 2008. Total gross proceeds from these issuances were $153,601,869. As of January 26, 2010, the aggregate value of all share issuances and subscriptions outstanding was $155,707,415 based on a per share value of $10.00 (or $9.50 per share for shares issued under the DRIP).  We will offer these shares until January 25, 2011, provided that the offering will be terminated if all of the shares are sold before then.

Shares Currently Outstanding
 
As of January 26, 2010, there were approximately 134.6 million shares of our common stock outstanding, excluding shares available under the distribution reinvestment plan.
 
 
1

 

Selected Financial Data

The selected financial data presented below has been derived from our consolidated financial statements as of September 30, 2009 and December 31, 2008:

Balance Sheet Data:
 
Nine Months Ended
September 30, 2009
(Unaudited)
   
Year Ended
December 31, 2008
 
Total real estate investments, net
 
$
232,551,523
   
$
161,714,182
 
Cash
   
8,697,197
     
886,868
 
Restricted cash
   
38,025
     
47,937
 
Prepaid expenses and other assets
   
5,693,979
     
2,293,464
 
Total assets
   
246,980,724
     
164,942,451
 
Mortgage notes payable
   
137,309,568
     
112,741,810
 
Short-term bridge equity funds
   
15,878,495
     
30,925,959
 
Long-term notes payable
   
13,000,000
     
1,089,500
 
Investor contributions held in escrow
   
            ---
     
30,824
 
Total liabilities
   
181,188,748
     
163,183,128
 
Total stockholders’ equity
   
65,791,976
     
1,759,323
 
Total liabilities and stockholders’ equity
   
246,980,724
     
164,942,451
 
Operating Data:
               
Rental income
   
9,636,008
     
5,546,363
 
Asset management fees to affiliate    
70,000
     
--
 
Property management fees to affiliate
   
--
     
4,230
 
Operating income
   
3,375,048
     
2,105,615
 
Interest expense
   
(7,292,251
)
   
(4,773,593
Net loss
   
(3,495,616
)
   
(4,282,784
)
Cash Flow Data:
               
Net cash (used in) provided by operating activities
   
(3,516,989
)
   
4,012,739
 
Net cash used in investing activities
   
(76,321,062
)
   
(97,456,132
)
Net cash provided by financing activities
   
87,648,380
     
94,330,261
 
 
Real Estate Investments Summary
 
The following summary of real estate investments as of the date of this Supplement No. 3 is to supplement the section of our Prospectus captioned “Real Property Investments” on pages 87-104 of the Prospectus.

The REIT acquired the following real estate investments:

·  
a FedEx Cross-Dock facility in Snowshoe, Pennsylvania (the “FedEx Property”) as its initial investment on March 5, 2008;
·  
15 Harleysville National Bank and Trust Company (“Harleysville National Bank”) bank branch properties in various Pennsylvania locations (the “Harleysville Properties”) on March 12, 2008;
·  
18 Rockland Trust Company (the “Rockland Properties”) bank branch properties in various Massachusetts locations on May 2, 2008;
·  
2 National City Bank branches (now leased to PNC Bank, National Association) in Florida (the “National City Properties”) from affiliated parties on September 16, 2008 and October 23, 2008;
·  
6 Rite Aid properties in various locations in Pennsylvania and Ohio (the “Rite Aid Properties”) from affiliated parties on September 29, 2008;
·  
50 PNC Bank, National Association bank branches in various locations in Pennsylvania, New Jersey and Ohio (the “PNC Properties”) on November 25, 2008;
·  
a Fed Ex Freight Facility (the “Fed Ex Freight Facility”) located in Houston, TX on July 8, 2009; 
·  
a Walgreens location (the “Walgreens Property”) located in Sealy, TX on July 17, 2009;
·  
10 newly-constructed retail stores from CVS Caremark (“CVS”) located in 9 states - Illinois, South Carolina, Texas, Georgia, Michigan, New York, Arizona, North Carolina and California on September 18, 2009 (“CVS Pharmacy Portfolio I”);
·  
15 newly-constructed retail stores from CVS located in 11 states – Alabama, Arizona, California, Florida, Georgia, Indiana, Maine, Minnesota, Missouri, North Carolina and Nevada on November 19, 2009 (“CVS Pharmacy Portfolio II”);
·  
a leasehold interest in a build-to-suit Home Depot Distribution Facility from the developer, located in Topeka, Kansas on December 11, 2009;
·  
6 recently constructed Bridgestone retail stores from a developer in various locations in Oklahoma and Florida (the “Bridgestone Properties”) on various closings in December 2009 (5 locations) and January 2010 (1 location);
·  
an Advanced Auto location (the “Advanced Auto Property”) located in Plainfield, MI on December 30, 2009; and
·  
2 Fresenius Medical Care Distribution Facilities (the “Fresenius Properties”) located in Apple Valley, CA and Shasta Lake, CA from the developer on January 29, 2010.
 
2

 
The amount of the Year 1 yield based upon the contract purchase price of the acquired properties as compared to the Year 1 total rent is approximately 7.64%, which excludes contractual rent increases occurring in future years.

         
Current
                     
Base Rent
   
Purchase
   
Mortgage
   
Interest
 
Portfolio-Level
 
Rent
 
Increase
   
Price (1)
   
Debt
   
Rate (2)
 
Leverage
 
Year 1
   
Year 2
 
(Year 2) (3)
                                   
Federal Express Distribution Center (PA)
  $
10,207,674
   
6,965,000
     
6.29%
 
68.2%
 
702,828
   
702,828
 
 3.78% and 3.65% in years 6 and 11, respectively
Harleysville National Bank Portfolio
   
41,675,721
     
31,000,000
     
6.59%
 
74.4%
   
3,003,838
     
3,063,912
 
Rockland Trust Company Portfolio
   
33,117,419
     
23,649,499
     
4.92%
 
71.4%
   
2,305,816
     
2,340,403
 
 1.5% annually
PNC Bank (formerly National City Bank)
   
6,853,419
     
4,412,196
     
4.89%
 
64.4%
   
466,465
     
466,465
 
 10% after 5 years
Rite Aid Portfolio
   
18,839,392
     
12,808,265
     
6.97%
 
68.0%
   
1,404,226
     
1,404,226
 
PNC Bank Portfolio
   
44,813,074
     
32,931,336
     
5.25%
 
73.5%
   
2,960,000
     
2,960,000
 
 10% after 5 years
Fed Ex Freight Facility (TX) (5)
   
31,691,989
     
16,250,000
     
5.95%
 
51.3%
   
2,580,315
     
2,580,315
 
 1% increase in years 5 and 9
Walgreens Location
   
3,817,733
     
1,550,000
     
6.55%
 
40.6%
   
310,000
     
310,000
 
CVS Pharmacy Portfolio I
   
40,684,721
     
23,709,980
     
6.87%
 
58.3%
   
3,387,195
     
3,387,195
 
5% increase every 5 years
CVS Pharmacy Portfolio II
   
59,787,962
     
33,068,100
     
6.55% (6)
 
55.3%
   
4,983,670
     
4,983,670
 
5% increase every 5 years
Home Depot Distribution Facility
   
23,531,680
     
13,716,160
     
6.25%/6.50%(7)
 
58.3%
   
1,805,961
     
1,839,070
 
2% annually
                                             
Bridgestone Firestone Portfolio
   
15,043,322
     
     
 
   
1,269,591
     
1,269,591
 
6.25% every 5 years
Advanced Auto Location
   
1,730,235
     
     
 
   
160,000
     
160,000
 
Fresenius Portfolio
   
12,589,087
     
6,090,000
     
6.63%
 
48.4%
   
1,023,400
     
1,023,400
 
Approximately 10% in years 2 and 7
                                             
Total Portfolio
 
344,347,428
   
206,150,536
     
6.13% 
 
59.9%
 
26,363,301
   
26,491,071
   
                                             
Investment Grade Tenants (based on Rent - S&P BBB- or better)
90.1%
                     
                                             
Average Remaining Lease Term (years) (4)
     
16.8
                     

 
(1) - Purchase Price includes capitalized closing costs and acquisition fees paid to American Realty Capital Advisors, LLC, as applicable.
(2) - Interest rate includes the effect of in-place hedges.
(3) - Increase does not take into account lease escalations that commence in future years or adjustments based on the Consumer Price Index.
(4) - As of December 31, 2009 - Primary lease term only (excluding renewal option periods).
(5) - Company entered into a one-year bridge equity facility for approximately $15.9 million which was repaid with proceeds from a mortgage note secured in January 2010.
(6) - Weighted average rate as of December 31, 2009 - interest rate on fee simple properties is 6.50%; interest rate on leasehold properties is 6.65%.
(7) - The loan has a four-year term, with the first three years considered the initial term at an interest rate of 6.25%, and a one year extension at an interest rate of 6.50%.

3

 
 The following is a summary of lease expirations for the next ten years:
 
Year
 
Expiring
Revenues
   
Expiring
Leases 
 (1)
   
Square
Feet
   
% of
Gross Rev
 
2009
   
$             –
     
  –
     
          –
     
         –
 
2010
   
              –
     
  –
     
          –
     
         –
 
2011
   
              –
     
  –
     
          –
     
         –
 
2012
   
              –
     
  –
     
          –
     
         –
 
2013
   
              –
     
  –
     
          –
     
         –
 
2014
   
              –
     
  –
     
          –
     
         –
 
2015
   
              –
     
  –
     
          –
     
         –
 
2016
   
     242,000
     
  2
     
  21,476
     
  0.9%
 
2017
   
     179,000
     
  1
     
  12,613
     
  0.6%
 
2018
   
  4,910,000
     
59
     
384,201
     
17.6%
 
     
$5,331,000
     
62
     
418,290
     
19.1%
 
 
(1)
The 62 leases listed above are with the following tenants:  Fed Ex, Rockland Trust Company, PNC Bank and Rite Aid.

Status of Distributions
 
 The following information supplements the section of our Prospectus captioned “Distribution Policy and Distributions” on pages 10 and 148 of the Prospectus.

On February 25, 2008, our Board of Directors declared a distribution for each monthly period commencing 30 days subsequent to acquiring our initial portfolio of real estate investments.  Our daily dividend commenced accruing on April 5, 2008.  
 
On November 5, 2008, the Board of Directors approved an increase in its annual cash distribution from $.65 to $.67, paid monthly. Based on a $10.00 share price, this 20 basis point increase, effective January 2, 2009, results in an annualized distribution rate of 6.7%.
 
On October 5, 2009, the Board of Directors approved a special distribution of $0.05 per share payable to shareholders of record on December 31, 2009, in addition to the current 6.7% annualized distribution rate paid monthly.  This special distribution was paid on January, 19, 2010.  
 
On January 27, 2010, the Board of Directors approved an increase in its annual cash distribution from $.67 to $.70, paid monthly. Based on a $10.00 share price, this 30 basis point increase, effective April 1, 2010, will result in an annualized distribution rate of 7.0%.
 
To date, all of the Companys distributions have been paid with funds generated from operations. There can be no assurance that this will continue to be the case going forward.
 
 
4

 

The following table summarizes the Company’s historical and prospective distribution rate, reflecting the special distribution and increase to the annual rate effective April 1, 2010 noted above:
 
       
Annualized
     
       
Distribution
 
Number of
 
Period
 
Rate
 
Months
 
May 2008 (1)
to
December 2008
 
6.5%
 
8
 
               
January 2009
to
March 2010
 
6.7%
 
15
 
Special Distribution - January 2010 (2)
 
0.5%
 
-
 
       
7.2%
(2)
   
               
April 2010
to
---
 
7.0%
 
-
 
               
(1) initial distribution was paid in May 2008.
         
(2) payable to shareholder's of record as of December 31, 2009, resulting in a minimum distribution rate of 7.2% for an investor who owned a common share of the Company for the full year ended December 31, 2009.

 The Company determined distributions paid to shareholders in 2009 will be reported as nondividend distributions on Form 1099 for the applicable period.   Accordingly, such distributions are generally not subject to ordinary income tax in the related period.  This tax characterization is consistent with distributions paid to shareholders in 2008.
 
The portion of the distribution that is not subject to tax immediately is considered a return of capital for tax purposes and will reduce the tax basis of a shareholder's investment. This defers a portion of applicable taxes until the investment is sold or the Company is liquidated, at which time the shareholder will be taxed at capital gains rates. However, because each investor’s tax considerations are different, the Company recommends that investors consult with their tax advisor.

The following is a chart of monthly distributions declared and paid since the commencement of the offering:


   
Total
   
Cash
   
DRIP
 
                   
April, 2008
 
$
   
$
   
$
 
May, 2008
   
30,260
     
22,007
     
8,253
 
June, 2008
   
49,637
     
35,283
     
14,354
 
July, 2008
   
55,043
     
34,788
     
20,255
 
August, 2008
   
57,583
     
36,519
     
21,064
 
September, 2008
   
61,396
     
39,361
     
22,035
 
October, 2008
   
61,425
     
41,078
     
20,347
 
November, 2008
   
65,496
     
43,646
     
21,850
 
December, 2008
   
64,444
     
42,877
     
21,567
 
January, 2009
   
69,263
     
46,227
     
23,036
 
February, 2009
   
76,027
     
50,214
     
25,813
 
March, 2009
   
74,915
     
49,020
     
25,895
 
April, 2009
   
101,281
     
64,375
     
36,906
 
May, 2009
   
128,867
     
78,604
     
50,263
 
June, 2009
   
180,039
     
106,741
     
73,298
 
July, 2009
   
217,325
     
127,399
     
89,926
 
August, 2009
   
290,230
     
177,620
     
112,610
 
September, 2009
   
375,926
     
220,165
     
155,761
 
October 2009
   
455,051
     
264,729
     
190,322
 
November 2009
   
563,471
     
328,555
     
234,916
 
December 2009
   
643,125
     
374,714
     
268,411
 
January 2010 (1)
   
1,498,413
     
855,282
     
643,131
 
 
(1) Includes the special distribution paid on January 19, 2010 to shareholders of record as of December 31, 2009.

The Company, Board of Directors and Advisor share a similar philosophy with respect to paying the dividend. The dividend should principally be derived from cash flows generated from real estate operations. Specifically, funds from operations should equal or exceed distributions in a given period.  If needed, the Advisor generally expects to waive its asset management fee and forego entitled reimbursements to ensure the full coverage of the Company’s distributions. The fees and reimbursement that are waived are not deferrals and accordingly, will not be paid by the Company.
 
5

 
Status of Fees Paid and Deferred
 
The following information is to be added to the section of our Prospectus captioned “Estimated Use of Proceeds” section on pages 4-5 and 36-37 of the Prospectus.
 
From January 1, 2008 through December 31, 2008, the Company reimbursed the Advisor $0 for organizational and offering expenses and incurred the following fees:
 
 
·
acquisition fees of $1,507,369 paid to the Advisor
 
·
finance coordination fees of $1,131,015 paid to the Advisor
 
·
property management fees of $4,230 paid to the Property Manager
 
From January 1, 2009 through December 31, 2009, the Company reimbursed the Advisor $5,617,286 for organizational and offering expenses and incurred the following fees: 

 
·
acquisition fees of $1,690,714 paid to the Advisor
 
·
finance coordination fees of $879,626 paid to the Advisor
 
·
property management fees of $0 paid to the Property Manager

From January 1, 2010 through January 26, 2010, the Company reimbursed the Advisor $300,000 for organizational and offering expenses and incurred the following fees:
 
 
·
acquisition fees of $147,616 paid to the Advisor
 
·
finance coordination fees of $60,900 paid to the Advisor
 
·
asset management fees of $145,000 paid to the Advisor

Amounts paid to the advisor include approximately $3,607,000 of offering cost incurred by the affiliated Advisor and Dealer Manager that exceeds 1.5% of gross offering proceeds earned cumulatively through January 26, 2009. Any organizational or offering expenses that exceeds 1.5% of gross offering proceeds over the term of the offering will be the Advisors obligation.

The Company pays the Advisor an annualized asset management fee of 1.0% based on the aggregate contract purchase price of all properties. Through December 31, 2009, the Company paid $145,000 to the Advisor and will determine if such fees will be waived in subsequent periods on a quarter-to-quarter basis. Such waived fees cumulatively through January 26, 2009 equal approximately $2,775,000.  If the Advisor had not agreed to waive the asset management fee, we would not have had sufficient cash to fund our distributions.  Had this been the case, additional borrowings would have been incurred to fund our monthly distributions.
 
Real Estate Investments
 
The following information is to be added to supplement the section of our Prospectus captioned “Real Property Investments” on pages 87-104 of the Prospectus.

CVS Pharmacy Portfolio II

On November 3, 2009, the REIT’s Board of Directors approved the acquisition of the CVS Properties II. On November 19, 2009, the Company acquired a portfolio of fifteen newly-constructed retail stores (the “CVS Properties II”) directly from CVS Pharmacy, Inc.  The CVS Properties II contain an aggregate of approximately 199,000 square feet, located in 11 states – Alabama, Arizona, California, Florida, Georgia, Indiana, Maine, Minnesota, Missouri, North Carolina and Nevada.  The aggregate purchase price is approximately $60.0 million, inclusive of all closing costs and fees.   

The purchase price is comprised of a combination of proceeds from the sale of the Company’s common shares and proceeds received from a five-year non-recourse, fixed-rate first mortgage loan totaling approximately $33.1 million.  The fixed interest rate is 6.55% for the term of the loan
.
Address
City
State
 
Total
Purchase Price
   
Compensation
to Advisor and
Affiliate (1)
 
5211 Neal Trail Dr.
Walkertown
NC
 
$
3,705,204
         
612 N. Main St.
Creedmoor
NC
   
3,380,699
         
1888 Ogletree Rd.
Auburn
AL
   
4,224,431
         
4145 NW 53rd Ave.
Gainesville
FL
   
5,968,893
         
50 Duval Station Rd.
Jacksonville
FL
   
4,429,342
         
505 County Road 1100 N
Chesterton
IN
   
5,925,600
         
601 Howard Simmons Rd.
East Ellijay
GA
   
3,825,510
         
300 S. Commercial
Harrisonville
MO
   
3,757,909
         
151 Village Walk Dr.
Holly Springs
NC
   
3,806,651
         
384 Elm St.
Biddeford
ME
   
3,615,565
         
7996 Brooklyn Blvd.
Brooklyn Park
MN
   
2,706,251
         
1905 Marth Berry Blvd.
Rome
GA
   
3,033,849
         
1081 Steamboat Pkwy.
Reno
NV
   
3,036,074
         
180 N Dobson Rd.
Chandler
AZ
   
3,883,302
         
9256 E. Slauson Ave.
Pico Rivera
CA
   
4,488,682
         
                     
Total
 
$
59,787,962
   
$
910,823
 
 
(1) Compensation to advisor and affiliate includes acquisition fees and financing coordination fees.
6

 
The CVS Properties II are net leased to CVS Pharmacy, Inc., pursuant to which CVS Pharmacy, Inc. will be required to pay all operating expenses and capital expenditures in addition to base rent, simultaneously with the acquisition of the properties. The weighted average primary lease term under this net lease arrangement is approximately 24.7 years, having commenced simultaneous with closing, and provides for two fixed-rent options of five years each, plus eight fair market value options of five years each. The average annual base rent on a straight-line basis over the initial lease term is approximately $5.4 million. Annual rent is approximately $5.0 million for the first year of the initial lease term, and annual rent will increase by 5% every five years.

Address
City
State
 
Total
Square
Feet
Leased
   
Rent Per
Square
 Foot
   
Year 1
Rent
   
Initial
Lease
Term
(Years)
 
5211 Neal Trail Dr.
Walkertown
NC
   
12,900
   
$
37.72
   
$
486,621
     
25
 
612 N. Main St.
Creedmoor
NC
   
12,900
     
27.91
     
360,000
     
25
 
1888 Ogletree Rd.
Auburn
AL
   
11,945
     
23.10
     
275,894
     
25
 
4145 NW 53rd Ave.
Gainesville
FL
   
13,225
     
36.78
     
486,371
     
25
 
50 Duval Station Rd.
Jacksonville
FL
   
13,225
     
23.19
     
306,725
     
25
 
505 County Road 1100 N
Chesterton
IN
   
13,225
     
23.53
     
311,160
     
25
 
601 Howard Simmons Rd.
East Ellijay
GA
   
13,225
     
22.89
     
302,760
     
25
 
300 S. Commercial
Harrisonville
MO
   
13,225
     
23.60
     
312,086
     
25
 
151 Village Walk Dr.
Holly Springs
NC
   
12,900
     
26.70
     
344,457
     
25
 
384 Elm St.
Biddeford
ME
   
13,013
     
17.93
     
233,306
     
25
 
7996 Brooklyn Blvd.
Brooklyn Park
MN
   
13,625
     
19.25
     
262,300
     
25
 
1905 Marth Berry Blvd.
Rome
GA
   
13,225
     
23.70
     
313,494
     
20
 
1081 Steamboat Pkwy.
Reno
NV
   
15,887
     
24.55
     
389,979
     
24
 
180 N Dobson Rd.
Chandler
AZ
   
13,013
     
25.87
     
336,617
     
24
 
9256 E. Slauson Ave.
Pico Rivera
CA
   
13,013
     
20.13
     
261,900
     
25
 
         
   
     
   
     
   
     
   
 
Total
   
198,546
   
$
25.10
   
$
4,983,670
     
24.7
 
  
The Company has secured first mortgage indebtedness from Ladder Capital Finance, LLC. The following table outlines the terms of the debt financing incurred in connection with acquisitions of the CVS Properties II. The non-recourse loan will be secured by a mortgage on all of the CVS Properties II.

 
Mortgage Debt Amount
 
Rate
 
Term
 
             
 
$33,068,100
 
6.55%(1)
 
five years
 
 
(1) Weighted average rate - interest rate on fee simple properties is 6.50%; interest rate on leasehold properties is 6.65%.
 
The net leases are guaranteed by CVS Caremark Corporation (“CVS”), a pharmacy services company, which provides prescriptions and related healthcare services in the United States. CVS operates through two segments, Pharmacy Services and Retail Pharmacy. The Pharmacy Service segment provides a range of prescription benefit management services, including mail order pharmacy services, specialty pharmacy services, plan design and administration, formulary management, and claims processing. This segment serves primarily employers, insurance companies, unions, government employee groups, managed care organizations and other sponsors of health benefit plans, and individuals. As of December 31, 2008, the Pharmacy Services segment operated 58 retail specialty pharmacy stores, 19 specialty mail order pharmacies, and 7 mail service pharmacies located in 26 states of the United States, Puerto Rico, and the District of Columbia. The Retail Pharmacy Segment sells prescription drugs, over-the-counter drugs, beauty products and cosmetics, photo finishing, seasonal merchandise, greeting cards, and convenience foods through its pharmacy retail stores, and online. This segment also provides health care services. As of December 31, 2008, this segment operated 6,923 retail drugstores located in 41 states and the District of Columbia; and 560 retail health care clinics in 27 states. CVS was founded in 1892 and is headquartered in Woonsocket, Rhode Island.  CVS stock is listed on the New York Stock Exchange (NYSE: “CVS”), and has a credit rating of BBB+ by Standard & Poor’s.
 
7

 
CVS currently files its financial statements in reports filed with the Securities and Exchange Commission, and the following summary financial data regarding CVS are taken from such filings:

 (Amounts in millions)
Nine
Months Ended
 
For the Fiscal Year Ended
 
 
September 30, 2009
 
Dec. 31, 2008
 
Dec. 29, 2007
 
Dec. 30, 2006
 
Consolidated Statements of Operations
               
Net revenues
 
$
72,906.9
   
$
87,471.9
   
$
76,329.5
   
$
43,821.4
 
Gross profit
   
14,811.9
     
18,290.4
     
16,107.7
     
11,742.2
 
Net earnings
   
2,646.2
     
3,212.1
     
2,637.0
     
1,368.9
 
 
 
As of
 
As of the Fiscal Year Ended
 
 
September 30, 2009
 
Dec. 31, 2008
 
Dec. 29, 2007
 
Dec. 30, 2006
 
Consolidated Balance Sheets
               
Total assets
 
$
61,879.3
   
$
60,959.9
   
$
54,721.9
   
$
20,574.1
 
Long-term debt
   
8,756.2
     
8,057.2
     
8,349.7
     
2,870.4
 
Shareholders’ equity
   
35,674.9
     
34,574.4
     
31,321.9
     
9,917.6
 
 
 Home Depot Distribution Facility – Topeka, Kansas
 
On August 25, 2009, the REITs Board of Directors approved the acquisition of the Home Depot Facility. On December 11, 2009, the Company acquired a leasehold interest in a build-to-suit Home Depot Distribution Facility that will service Home Depot stores in the Kansas City region (the “Home Depot Facility”).  The Home Depot Facility is a “Rapid Deployment Center” of approximately 465,600 square feet located in Topeka, KS. The aggregate purchase price is approximately $23.5 million, inclusive of all closing costs and fees.  The primary lease term under this net lease arrangement is twenty years, having commenced simultaneous with closing, and provides for two extensions of successive five-year terms.  The average annual base rent over the initial lease term is approximately $2.2 million.
 
The purchase price is comprised of a combination of proceeds from the sale of common shares and proceeds received from a four-year non-recourse, fixed-rate first mortgage loan totaling approximately $13.7 million.  The first three years of the loan are considered the initial term with a fixed interest rate of 6.25%, and the loan includes a one-year extension option at an interest rate of 6.50%.

Address
City
State
 
Total Purchase Price
   
Compensation
to Advisor and
Affiliate
(1)
 
5200 SW Wenger Street
Topeka
KS
 
$
23,531,680
   
$
365,763
 
 
(1) Compensation to advisor and affiliate includes acquisition fees and financing arrangement fees.
 
The Home Depot Facility is net leased to Home Depot U.S.A., Inc. (“Home Depot”) pursuant to which Home Depot will be required to pay all operating expenses and capital expenditures in addition to base rent, simultaneously with the acquisition of the properties, and have a primary lease term of 20 years. Annual rent is approximately $1.8 million for the first year of the initial lease term, which increases 2% annually.
 
Address
City
State
 
Total Square Feet Leased
   
Rent Per Square Foot
   
Year 1 Rent
   
Initial Lease Term (Years)
 
5200 SW Wenger Street
Topeka
KS
   
465,600
   
$
3.88
   
$
1,805,961
     
20
 
 
The Company has secured first mortgage indebtedness from the seller of the Home Depot Facility, HD Topeka, LLC. The following table outlines the terms of the debt financing incurred in connection with acquisition of the Home Depot Facility. The loan will be secured by a mortgage on the Home Depot Facility.

Mortgage Debt Amount
 
Rate
 
Maturity Date
         
 $13,716,160
 
6.25%(1)
 
January 2013(1)
 
(1) The loan has a four-year term, with the first three years considered the initial term, and a one year extension
 
8

 
 
Home Depot (NYSE: HD), together with its subsidiaries, operates as a home improvement retail company. As of the fiscal year ended February 1, 2009, Home Depot had $41.2 billion in assets, $71.3 billion in annual revenue with $2.3 billion in annual net income. Home Depot operates 2,233 retail stores worldwide. Home Depot was founded in 1978 and is based in Atlanta, Georgia. The company’s Home Depot stores sell building materials, home improvement supplies, and lawn and garden products to do-it-yourself customers, do-it-for-me (“D-I-F-M”) customers, home improvement contractors, trades people, and building maintenance professionals. Its stores also offer various installation services for D-I-F-M customers. These installation programs include products such as carpeting, flooring, cabinets, countertops and water heaters. In addition, the company provides professional installation of various products that are sold through its in-home sales programs, such as generators and heating and central air systems. Home Depot is rated BBB+ by S&P.

Home Depot files its financial statements with the Securities and Exchange Commission. The following financial information is taken from such filings.

 (Amounts in millions)
 
Nine
Months Ended
   
For the Fiscal Year Ended
 
   
Nov. 1, 2009
   
Feb. 1, 2009
   
Feb. 3, 2008
   
Jan. 28, 2007
 
Consolidated Statements of Operations
                       
Net sales
 
$
51,607
   
$
71,288
   
$
77,349
   
$
79,022
 
Gross profit
   
17,399
     
23,990
     
25,997
     
26,546
 
Net earnings
   
2,319
     
2,260
     
4,395
     
5,761
 
 
 
As of
 
As of the Fiscal Year Ended
 
 
Nov. 1, 2009
 
Feb. 1, 2009
 
Feb. 3, 2008
 
Jan. 28, 2007
 
Consolidated Balance Sheets
               
Total assets
 
$
43,050
   
$
41,164
   
$
44,324
   
$
52,263
 
Long-term debt
   
8,656
     
9,667
     
11,383
     
11,643
 
Shareholders’ equity
   
19,380
     
17,777
     
17,714
     
25,030
 
                                 
Bridgestone Portfolio
 
On November 3, 2009, the REITs Board of Directors approved the acquisition of the Bridestone properties. The REIT acquired a portfolio of six recently-constructed Morgan Tire and Auto (“MTA”) stores in December 2009 and January 2010 (the “Bridgestone Properties”).  MTA is a wholly owned subsidiary of the Bridgestone Corporation. MTA operates the stores as Hibdon Tires Plus. Bridgestone Retail Operations, LLC, as further described below, guarantees the leases. The portfolio consists of six build-to-suit, freestanding, fee-simple properties. The purchase price for the Bridgestone Properties is approximately $15.0 million including closing costs and fees paid to the advisor. The purchase price was paid with proceeds from the sale of common shares.   The Bridgestone Properties are located in Oklahoma and Florida, with an aggregate of 57,236 of square feet. The current sole tenant of the properties is MTA and will remain the sole tenant on a double-net lease basis. Bridgestone Retail Operations, LLC, which is a wholly owned subsidiary of Bridgestone Americas, Inc., will guarantee the property leases.
 
 
Address
City
State
Purchase Price
Approximate
Compensation to
Advisor and
Affiliates
560 Shedeck Parkway
Yukon
OK
$2,517,019
$147,625
1032 W. Danforth Road
Edmond
OK
2,533,728
7816 South Olympia Avenue
Tulsa
OK
2,628,549
Highway I-69 & 96th Street
Owasso
OK
2,432,567
13405 N. Pennsylvania Ave
Oklahoma City
OK
2,355,038
1781 Blanding Blvd.
Middleburg
FL
2,576,421
Total
   
$15,043,322

The Bridgestone Properties are double-net leased to MTA, pursuant to which the landlord is responsible for maintaining the property’s roof and structure, and the tenant is required to pay all other expenses associated with the property in addition to base rent, simultaneously with the acquisition of the properties. The Bridgestone Properties’ original lease at commencement was 15 years with an average of 13.4 years currently remaining.  The double-net leases contain contractual rental escalations of 6.25% every five years, with the landlord responsible for roof and structure. Annual rent is approximately $1.3 million for the first year of the initial lease term, and annual rent will increase by 6.25% every five years. The lease provides for four renewal options at five years each.
 
9


Address
City
State
 
Total
Square
Feet
Leased
   
Rent Per
Square Foot
   
Year 1
Rent
   
Lease Term
Remaining
(Years)
 
560 Shedeck Parkway
Yukon
OK
   
10,118
   
$
21.00
   
$
212,460
     
12.8
 
1032 W. Danforth Road
Edmond
OK
   
10,118
     
21.14
     
213,882
     
13.6
 
7816 South Olympia Avenue
Tulsa
OK
   
10,118
     
21.92
     
221,736
     
13.4
 
Highway I-69 & 96th Street
Owasso
OK
   
9,723
     
21.12
     
205,311
     
13.1
 
13405 N. Pennsylvania Ave
Oklahoma City
OK
   
9,116
     
21.80
     
198,743
     
13.9
 
1781 Blanding Blvd.
Middleburg
FL
   
8,143
     
26.71
     
217,459
     
13.6
 
Total/ Lease Term Remaining Average
       
57,336
   
$
21.99
   
$
1,269,591
     
13.4
 

Bridgestone Retail Operations, LLC, the lease guarantor, is a wholly owned subsidiary of Bridgestone Americas, Inc. It consists of more than 2,200 company-owned vehicle service and tire locations across the United States, including Firestone Complete Auto Care, Tires Plus, ExpertTire and Wheel Works store locations.  Bridgestone Corp. reports earnings on a consolidated basis and does not provide stand-alone financials on its subsidiaries.  For the fiscal year ended December 31, 2008, Bridgestone Corp. posted net sales of $35.5 billion.  Bridgestone Corporation is rated “BBB+” by S&P and “A3” by Moody’s.
 
Advanced Auto Property

The REIT acquired an advance auto store in December 2009. The 7,000 square foot facility in Plainfield, MI. was purchased for approximately $1.7 million and was paid for from the proceeds from the sale of common shares. The remaining lease term on the facility is 11.9 years, with an annual rent of approximately $160,000.

Fresenius Medical Distribution Portfolio
 
On January 27, 2010, the REITs Board of Directors approved the acquisition of the Fresenius Properties. On January 29, 2010, the Company acquired two build-to-suit distribution facilities from Fresenius Medical Care North America a wholly owned subsidiary of Fresenius Medical Care AG & Co. KGaA to be leased by their wholly owned subsidiary Fresenius USA Manufacturing, Inc. The distribution facilities are each approximately 70,000 square feet, and are located in Apple Valley, CA and Shasta Lake, CA.  The aggregate purchase price was approximately $12.6 million, inclusive of all closing costs and fees.

Address
City
State
Purchase Price
Approximate
Compensation to
Advisor and
Affiliates (1)
Navajo Rd and Lafayette Street
Apple Valley
CA
$6,611,592
$182,733
3415 Bronze Court
Shasta lake
CA
6,427495
Total
   
$12,589,087
 
(1) Compensation to Advisor and affiliate includes acquisition fees and financing arrangement fees.
 
The primary lease term under this double net lease arrangement whereby the landlord is responsible for roof and structure, is 15 years, with a remaining lease term of approximately 12.5 years, and provides for contractual rent escalations of 10% every 5 years.  The lease will also provide for two 5 year renewal options. The average annual base rent on a straight-line basis over the initial lease term is approximately $1.2 million. The leases will be guaranteed by Fresenius National Medical Care Holdings, Inc. (a wholly owned subsidiary of Fresenius Medical Care AG & Co. KGaA) which has a senior unsubordinated rating of BB+ by Standard & Poor’s.

Address
City
State
 
Total
Square
Feet
Leased
   
Rent Per
Square Foot
   
Year 1
Rent
   
Lease Term
Remaining
(
Years)
 
Navajo Rd and Lafayette Street
Apple Valley
CA
   
70,000
   
$
7.15
   
$
500,500
     
12.4
 
3415 Bronze Court
Shasta lake
CA
   
70,000
     
7.47
      
522,900
     
12.6
 
Total/ Lease Term Remaining Average
       
140,000
   
$
7.31
   
$
1,023,400
     
12.5
 

10


The purchase price is comprised of a combination of approximately $6.1 million of proceeds received from a first mortgage loan and proceeds from the sale of common shares.

Mortgage Debt Amount
 
Rate
 
Maturity Date
         
 $6,090,000
 
6.25%
 
January 31, 2015
 

Fresenius Medical Services is a kidney dialysis company, operating in both the field of dialysis products and the field of dialysis services operating more than 1,700 outpatient dialysis clinics in the United States. The Renal Therapies Group is responsible for the manufacture and distribution of a variety of dialysis products and equipment, including dialysis machines, dialyzers and other dialysis related supplies.

Fresenius Medical Care AG & Co. KGaA (NYSE: FMS) is the world's largest integrated provider of products and services for individuals with chronic kidney failure, a condition that affects more than 1.77 million individuals worldwide. Through its network of 2,509 dialysis clinics in North America, Europe, Latin America and Asia/Pacific and Africa, Fresenius Medical Care provides dialysis treatment to approximately 193,000 patients around the globe. Fresenius Medical Care is also the world's largest provider of dialysis products such as hemodialysis machines, dialyzers and related disposable products. In the United States, it also performs clinical laboratory testing and provides inpatient dialysis services and other services under contract to hospitals.  During the year ended December 31, 2008, it provided 27.9 million dialysis treatments. Fresenius Medical Care is listed on the Frankfurt Stock Exchange (FME, FME3) and the New York Stock Exchange (FMS, FMS/P).
.
 (Amounts in millions)
 
Six
Months Ended
   
Year Ended
 
   
June 30, 2009
   
Dec. 31, 2008
   
Dec. 31, 2007
   
Dec. 31, 2006
 
Statement of Operations
                       
Net revenue
  $ 5,750     $ 10,612     $ 9,720     $ 8,499  
Net income
    450       818       717       537  
 
 
As of
 
As of
 
 
June 30, 2009
 
Dec. 31, 2008
 
Dec. 31, 2007
 
Dec. 31, 2006
 
Balance Sheets
               
Total assets
  $ 15,700     $ 14,920     $ 14,170     $ 13,045  
Shareholders’ equity
    6,500       5,962       5,575       4,870  

Potential Property Investments

The acquisition of each such property is subject to a number of conditions. A significant condition to acquiring any one of these potential acquisitions is our ability to raise sufficient proceeds in this offering to pay a portion of the purchase price. An additional condition to acquiring these properties will be our securing debt financing to pay the balance of the purchase price. Such financing may not be available on acceptable terms or at all.

Our evaluation of a property as a potential acquisition, including the appropriate purchase price, will include our consideration of a property condition report; unit-level store performance; property location, visibility and access; age of the property, physical condition and curb appeal; neighboring property uses; local market conditions, including vacancy rates; area demographics, including trade area population and average household income; neighborhood growth patterns and economic conditions; and the presence of demand generators.

We will decide whether to acquire properties generally based upon:

 
satisfaction of the conditions to the acquisitions contained in the respective contracts;
 
no material adverse change occurring relating to the properties, the tenants or in the local economic conditions;
 
our receipt of sufficient net proceeds from the offering of our common stock to the public and financing proceeds to make these acquisitions; and
 
our receipt of satisfactory due diligence information including appraisals, environmental reports and tenant and lease information.

Our advisor has identified the properties described below as potential suitable investments for us. The acquisition of the properties is subject to a number of conditions. A significant condition to acquiring the potential acquisition is our ability to raise sufficient proceeds in this offering to pay all or a portion of the purchase price.
 
11


Pending Acquisitions

Reckit Benkiser Warehouse Facility
 
The Company intends to acquire a build-to-suit warehouse facility for Rickit Benkiser (“RB”). The warehouse facility is approximately 574,000 square feet, located in Tooele, UT, near Salt Lake City, UT.  The aggregate purchase price is approximately $32.0 million, inclusive of all closing costs and fees.  The primary lease term under this net lease arrangement is 12.7 years, with a remaining lease term of approximately 12 years, and provides for annual rent escalations of 2% each year.  The lease will also provide for three 5 year renewal options. The average annual base rent on a straight-line basis over the initial lease term is approximately $2.7 million.

The purchase price is will be financed by approximately 50% mortgage financing and 50% from proceeds from the sale of common shares.
 
RB is a world leader in household, health and personal care products. RB is a multinational corporation with operations in over 60 countries, manufacturing facilities in over 40 countries and sales of its products in over 180 countries.  Today, RB is the global No. 1 or No. 2 in the majority of its fast-growing categories, driven by an exceptional rate of innovation.

RB has a strong portfolio led by 17 global Powerbrands which are: Finish, Lysol, Dettol, Vanish, Woolite, Calgon, Airwick, Harpic, Bang, Mortein, Veet, Nurofen, Clearasil, Strepsils Gaviscon, Mucinex and French’s.  The 17 Powerbrands account for over two thirds of RB’s net revenue. RB has an investment grade rating of A+ by Standard and Poor’s.

RB is a UK listed company and is part of the top 25 of the FTSE 100, with a market cap exceeding £20bn.. The following financial information is taken information published by the company.

 (Amounts in millions)(1)
 
Six
Months Ended
   
Year Ended
 
   
June 30, 2009
   
Dec. 31, 2008
   
Dec. 31, 2007
   
Dec. 31, 2006
 
Profit and Loss Account
                       
Total operating income
  $ 5,650     $ 12,214     $ 10,580     $ 9,149  
Operating profit
    1,223       2,791       2,468       1,677  
Retained profit
    406       1,259       1,161       689  
 
 
As of
 
As of
 
 
June 30, 2009
 
Dec. 31, 2008
 
Dec. 31, 2007
 
Dec. 31, 2006
 
Balance Sheets
               
Total assets
  $ 14,101     $ 13,423     $ 11,644     $ 11,236  
Long-term debt
    10       6       10       22  
Shareholders’ equity
    5,313       4,815       4,733       3,655  
 
(1) Amounts reflect a conversion from British Pounds to U.S. Dollars at a conversion rate specific to each period presented.
 
Jack in the Box Portfolio
 
The Company intends to acquire 5 freestanding Jack in the Box restaurants. The restaurants total approximately 12,000 square feet, and are located in Missouri, Texas, Oregon and Washington.  The aggregate purchase price is approximately $10.2 million, inclusive of all closing costs and fees.  The primary lease term under this net lease arrangement is 20 years which will commence upon the purchase of the property and provides for contractual rent escalations based on the lesser of accumulated Consumer Price Index over the prior five year period or 10% every 5 years. The lease will also provide for four 5 year renewal options.  The average annual base rent on a straight-line basis over the initial lease term is approximately $0.8 million, excluding future CPI adjustments, if any. The leases will be guaranteed by Fresenius National Medical Care Holdings, Inc. (a wholly owned subsidiary of Fresenius Medical Care AG & Co. KGaA) which has a senior unsubordinated rating of BB+ by Standard & Poor’s.

The purchase price is will be financed by approximately 56% mortgage financing and 44% from proceeds from the sale of common shares.
 
Jack in the Box is among the nation's leading fast-food hamburger chains and was the first major chain to develop and expand the concept of drive-thru dining and emphasize on-the-go convenience. Most Jack in the Box restaurants have indoor dining areas and are open 18-24 hours a day. Jack in the Box pioneered a number of firsts in the quick-serve industry. It was the first major fast-food chain that started as a drive-thru, and it was also the first to introduce menu items that are now staples on most fast-food menu boards, including a breakfast sandwich and portable salad. Today, Jack in the Box offers a broad selection of distinctive, innovative products targeted at the fast-food consumer, including hamburgers, specialty sandwiches, salads, low-carb meals, and ice cream shakes.
 
12

 
Jack in the Box, Inc. (NASDAQ: JACK) is an American fast-food restaurant founded in 1951 in San Diego, California, where it is still headquartered today.  Jack in the Box, Inc. operates and franchises Jack in the Box restaurants, one of the nation’s largest hamburger chains primarily serving the West Coast of the United States.  Most of the restaurants are in California, followed by Texas, Arizona, Washington, and Nevada.  During the fiscal year ended September 27, 2009 (fiscal 2009), Jack in the Box had 2,212 restaurants in 18 states, of which 1,190 were company-operated and the remaining 1,022 were franchise-operated.  Jack in the Box, Inc. has approximately 43,000 employees.
 
 (Amounts in millions)
 
Year Ended
 
   
Sept. 27, 2009
   
Sept. 28, 2008
   
Sept. 30, 2007
   
Oct. 1, 2006
 
Statement of Operations
                       
Total  revenue
  $ 2,471     $ 2,540     $ 2,513     $ 2,381  
Operating income
    231       216       217       177  
Net income
    118       119       126       107  
 
 
As of
 
 
Sept. 27, 2009
 
Sept. 28, 2008
 
Sept. 30, 2007
 
Oct. 1, 2006
 
Balance Sheets
               
Total assets
  $ 1,456     $ 1,498     $ 1,375     $ 1,520  
Total liabilities
    931       1,041       965       810  
Shareholders’ equity
    525       457       410       711  
                                 
Dealer Manager
 
The information is to supplement the section of our Prospectus captioned “Dealer Manager” on pages 51-52 of the Prospectus.

Effective January 28, 2010, Bradford Watt resigned as co-President of Realty Capital Securities, LLC.

Certain Relationships and Related Transactions.

The information is to supplement the section of our Prospectus captioned “Dealer Manager” on pages 53-54 of the Prospectus.

Louisa Quarto is the president and secretary of Realty Capital Securities, LLC.
 
Section 1031 Exchange Program 

The following information is to supplement the section of our Prospectus captioned “Section 1031 Exchange Program” on pages 84-85 of the Prospectus.

To date, cash payments of $5,412,950 have been accepted by the Operating Partnership.

Incorporation of Certain Information by Reference

The following information is added to supplement the section of our Prospectus captioned “Incorporation of Certain Information by Reference” on page 171 of the Prospectus.

·  
Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2009, filed with the SEC on November 16, 2009.
 
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[GRAPHIC MISSING]

AMERICAN REALTY CAPITAL
AMERICAN REALTY CAPITAL TRUST, INC.

Maximum Offering of 150,000,000 Shares of Common Stock

American Realty Capital Trust, Inc. is a Maryland corporation that qualifies as a real estate investment trust, or REIT. We will invest primarily in freestanding, single-tenant retail properties net leased to investment grade and other creditworthy tenants.

We are offering up to 150,000,000 shares of our common stock, $0.01 par value per share, in our primary offering for $10.00 per share, with discounts available for certain categories of purchasers. We also are offering up to 25,000,000 shares pursuant to our distribution reinvestment plan at a purchase price equal to the higher of $9.50 per share or 95% of the estimated value of a share of our common stock. We will offer these shares until January 25, 2011 which is three years after the effective date of this offering. We reserve the right to reallocate the shares of our common stock we are offering between the primary offering and the distribution reinvestment plan. We are registering options to purchase 1,000,000 shares of common stock, as well as the 1,000,000 shares of common stock issuable upon exercise of such options pursuant to our stock option plan for our independent directors.

See “Risk Factors” for a description of some of the risks you should consider before buying shares of our common stock. These risks include the following:

We may be considered a “blind pool” because we own a limited number of investments and have not identified most of the investments we will make with proceeds from this offering. You will be unable to evaluate the economic merit of our future investments before we make them and there may be a substantial delay in receiving a return, if any, on your investment.
There are substantial conflicts among us and our sponsor, advisor, dealer manager and property manager, such as the fact that our principal executive officers own a majority interest in our advisor, our dealer-manager and our property manager, and our advisor and other affiliated entities may compete with us and acquire properties suitable to our investment objectives.
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.
Until we generate operating cash flow sufficient to pay distributions to our stockholders, we may make distributions from the proceeds of this offering or from borrowings in anticipation of future cash flow, which may constitute a return of capital, reduce the amount of capital we ultimately invest in properties and negatively impact the value of your investment. Until we generate operating cash flow sufficient to pay distributions to stockholders, our Advisor may waive the reimbursement of certain expenses and payment of certain fees.
If we fail to qualify, or maintain the requirements, to be taxed as a REIT, it would reduce the amount of income available for distribution and limit our ability to make distributions to our stockholders.
You may not own more than 9.8% in value of the outstanding shares of our stock or more than 9.8% in value or number of shares (whichever is more restrictive) of any class or series of our outstanding shares of stock.
We may incur substantial debt, which could hinder our ability to pay distributions to our stockholders or could decrease the value of your investment in the event that income on, or the value of, the property securing the debt falls, but we will not incur debt to the extent it will restrict our ability to qualify as a REIT.
We are dependent on our advisor to select investments and conduct our operations. Adverse changes in the financial condition of our advisor or our relationship with our advisor could adversely affect us.
We will pay substantial fees and expenses to our advisor, its affiliates and participating broker-dealers, which payments increase the risk that you will not earn a profit on your investment.
This is a “best efforts” offering and we might not sell all of the shares being offered.
We are not yet a REIT and may be unable to qualify as a REIT.

These are speculative securities and 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, determined if this prospectus is truthful or complete or passed on or endorsed the merits 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 funds held in trust until subscriptions are accepted and funds are released.

       
  Price to Public   Selling Commissions   Dealer Manager Fee   Net Proceeds
(Before Expenses)
Primary Offering
                                   
Per Share   $ 10.00     $ 0.70     $ 0.30     $ 9.00  
Total Maximum   $ 1,500,000,000     $ 105,000,000     $ 45,000,000     $ 1,350,000,000  
Distribution Reinvestment Plan
                                   
Per Share   $ 9.50     $     $     $ 9.50  
Total Maximum   $ 237,500,000     $     $     $ 237,500,000  

The dealer manager of this offering, Realty Capital Securities, LLC, is a member firm of the Financial Industry Regulatory Authority (FINRA), is our affiliate and will offer the shares on a best efforts basis. The minimum investment amount generally is $1,000. See the “Plan of Distribution” section of this prospectus for a description of compensation that may be received by our dealer manger and other broker-dealers in this offering. As of July 1, 2009 we have sold the minimum of 4,500,000 shares of our common stock necessary to release all subscribers’ funds from escrow. All subscription payments have been released to us. As of October 20, 2009, we have sold 10,118,192 shares of our common stock.

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SUITABILITY STANDARDS

An investment in our common stock involves significant risk and is only suitable for persons who have adequate financial means, desire a relatively long-term investment and who will not need immediate liquidity from their investment. Initially, we will not have a public market for our common stock, and we cannot assure you that one will develop, which means that it may be difficult for you to sell your shares. This investment is not suitable for persons who require immediate liquidity or guaranteed income, or who seek a short-term investment.

In consideration of these factors, we have established suitability standards for initial stockholders and subsequent purchasers of shares from our stockholders. These suitability standards require that a purchaser of shares have, excluding the value of a purchaser’s home, furnishings and automobiles, either:

a net worth of at least $250,000; or
a gross annual income of at least $70,000 and a net worth of at least $70,000.

The minimum purchase is 100 shares ($1,000), except in certain states as described below. Purchases in amounts above the $1,000 minimum and all subsequent purchases may be made in whole or fractional shares, again subject to the limitations described below for certain states. You may not transfer fewer shares than the minimum purchase requirement. In addition, you may not transfer, fractionalize 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, and jointly meet suitability standards, provided that each such contribution is made in increments of $100.00 or ten (10) whole shares. You should note that an investment in shares of our company 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.

The minimum purchase for Maine, New York, Tennessee and North Carolina residents is 250 shares ($2,500), except for IRAs which must purchase a minimum of 100 shares ($1,000). The minimum purchase for Minnesota residents is 250 shares ($2,500), except for IRAs and other qualified retirement plans which must purchase a minimum of 200 shares ($2,000). Following an initial subscription for at least the required minimum investment, any investor may make additional purchases in increments of at least 100 shares ($1,000), except for purchases made by residents of Maine and Minnesota, whose additional investments must meet their state’s minimum investment amount, and purchases of shares pursuant to our distribution reinvestment plan and automatic purchase plan, which may be in lesser amounts.

Several states have established suitability requirements that are more stringent than the standards that we have established and described above. Shares will be sold only to investors in these states who meet the special suitability standards set forth below:

Kentucky — Investors must have either (a) a net worth of $250,000 or (b) a gross annual income of at least $70,000 and a net worth of at least $70,000, with the amount invested in this offering not to exceed 10% of the Kentucky investor’s liquid net worth.
Massachusetts, Ohio, Iowa, Pennsylvania and Oregon — Investors must have either (a) a minimum net worth of at least $250,000 or (b) an annual gross income of at least $70,000 and a net worth of at least $70,000. The investor’s maximum investment in the issuer and its affiliates cannot exceed 10% of the Massachusetts, Ohio, Iowa, Pennsylvania or Oregon resident’s net worth.
Michigan — Investors must have either (a) a minimum net worth of at least $250,000 or (b) an annual gross income of at least $70,000 and a net worth of at least $70,000. The maximum investment in the issuer and its affiliates cannot exceed 10% of the Michigan resident’s net worth.
Tennessee — In addition to the suitability requirements described above, investors’ maximum investment in our shares and our affiliates shall not exceed 10% of the resident’s net worth.

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Kansas — In addition to the suitability requirements described above, it is recommended that investors should invest no more than 10% of their liquid net worth in our shares and securities of other real estate investment trusts. “Liquid net worth” is defined as that portion of net worth (total assets minus total liabilities) that is comprised of cash, cash equivalents and readily marketable securities.
Missouri — In addition to the suitability requirements described above, no more than ten percent (10%) of any one (1) Missouri investor's liquid net worth shall be invested in the securities registered by us for this offering with the Securities Division.
California — In addition to the suitability requirements described above, investors’ maximum investment in our shares will be limited to 10% of the investor's net worth (exclusive of home, home furnishings and automobile).
Alabama and Mississippi — In addition to the suitability standards above, shares will only be sold to Alabama and Mississippi residents that represent that they have a liquid net worth of at least 10 times the amount of their investment in this real estate investment program and other similar programs.

In all states listed above, net worth is to be determined excluding the value of a purchaser’s home, furnishings and automobiles.

Each sponsor, participating broker-dealer, authorized representative or any other person selling shares on our behalf is required to:

make every reasonable effort to determine that the purchase of shares is a suitable and appropriate investment for each investor based on information provided by such investor to the broker-dealer, including such investor’s age, investment objectives, income, net worth, financial situation and other investments held by such investor; and
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.

In making this determination, your participating broker-dealer, authorized representative or other person selling shares on our behalf will, based on a review of the information provided by you in the subscription agreement (Appendix A), consider whether you:

meet the minimum income and net worth standards established in your state;
can reasonably benefit from an investment in our common stock based on your overall investment objectives and portfolio structure;
are able to bear the economic risk of the investment based on your overall financial situation; and
have an apparent understanding of:
the fundamental risks of an investment in our common stock;
the risk that you may lose your entire investment;
the lack of liquidity of our common stock;
the restrictions on transferability of our common stock;
the background and qualifications of our advisor; and
the tax consequences of an investment in our common stock.

In the case of sales to fiduciary accounts, the suitability standards must be met by 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. Given the long-term nature of an investment in our shares, our investment objectives and the relative illiquidity of our shares, our suitability standards are intended to help ensure that shares of our common stock are an appropriate investment for those of you who become investors.

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In order to ensure adherence to the suitability standards above, requisite criteria must be met, as set forth in the Subscription Agreement in the form attached hereto as Appendix A. In addition, our advisor and dealer manager must make every reasonable effort to determine that the purchase of our shares (including the purchase of our shares through the automatic purchase plan) is a suitable and appropriate investment for an investor. In making this determination, our advisor and dealer manager will rely on relevant information provided by the investor, including information as to the investor’s age, investment objectives, investment experience, income, net worth, financial situation, other investments, and any other pertinent information. Executed Subscription Agreements will be maintained in our records for six years.

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, as amended (the USA PATRIOT Act), the units offered hereby may not be offered, sold, transferred or delivered, directly or indirectly, to any “Prohibited Partner,” which means anyone who is:

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;
acting on behalf of, or an entity owned or controlled by, any government against whom the U.S. maintains economic sanctions or embargoes under the Regulations of the U.S. Treasury Department;
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;
subject to additional restrictions imposed by the following statutes or regulations and executive orders issued thereunder: the Trading with the Enemy Act, the Iraq Sanctions 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 Appropriation 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
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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AMERICAN REALTY CAPITAL TRUST, INC.

TABLE OF CONTENTS

 
  Page
Suitability Standards     i  
Restrictions Imposed by the USA Patriot Act and Related Acts     iii  
Questions And Answers About This Offering     viii  
Prospectus Summary     1  
Status of the Offering     1  
American Realty Capital Trust, Inc.     1  
REIT Status     1  
Advisor     1  
Management     1  
Operating Partnership     2  
Summary Risk Factors     2  
Description of Investments     3  
Estimated Use of Proceeds of This Offering     4  
Investment Objectives     4  
Conflicts of Interest     5  
Prior Offering     6  
Terms of The Offering     6  
Compensation to Advisor and its Affiliates     6  
Status of Fees Paid and Deferred     9  
Distributions     10  
Listing or Liquidation     10  
Distribution Reinvestment Plan     10  
Share Repurchase Program     11  
Description of Shares     12  
Risk Factors     13  
Risks Related to an Investment in American Realty Capital Trust, Inc.     13  
Risks Related to Conflicts of Interest     16  
Risks Related to This Offering and Our Corporate Structure     19  
General Risks Related to Investments in Real Estate     24  
Risks Associated with Debt Financing     31  
Federal Income Tax Risks     33  
Cautionary Note Regarding Forward-Looking Statements     35  
Estimated Use of Proceeds     36  
Management     38  
General     38  
Committees of the Board of Directors     39  
Audit Committee     39  
Executive Officers and Directors     40  
Compensation of Directors     43  
Stock Option Plan     44  
Compliance with the American Jobs Creation Act     45  
Limited Liability and Indemnification of Directors, Officers, Employees and Other Agents     45  
The Advisor     47  
The Advisory Agreement     47  
Affiliated Companies     49  

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  Page
Investment Decisions     52  
Certain Relationships and Related Transactions     53  
Management Compensation     55  
Stock Ownership     61  
Conflicts of Interest     63  
Interests in Other Real Estate Programs     63  
Other Activities of American Realty Capital Advisors, LLC and Its Affiliates     63  
Competition in Acquiring, Leasing and Operating of Properties     64  
Affiliated Dealer Manager     64  
Affiliated Property Manager     64  
Lack of Separate Representation     65  
Joint Ventures with Affiliates of American Realty Capital Advisors, LLC     65  
Receipt of Fees and Other Compensation by American Realty Capital Advisors, LLC and Its Affiliates     65  
Certain Conflict Resolution Procedures     65  
Investment Objectives and Policies     68  
General     68  
American Realty Capital’s Business Plan     68  
Acquisition and Investment Policies     69  
Making Loans and Investments in Mortgages     80  
Acquisition of Properties from Affiliates     82  
Section 1031 Exchange Program     84  
Disposition Policies     85  
Investment Limitations     85  
Change in Investment Objectives and Limitations     87  
Real Property Investments     87  
Potential Property Investments     104  
Other Policies     106  
Plan of Operation     107  
General     107  
Liquidity and Capital Resources     108  
Results of Operations     108  
Inflation     109  
Selected Financial Data     110  
Management’s Discussion and Analysis of Financial Condition and Operations     111  
Overview     111  
Application of Critical Accounting Policies     111  
Funds from Operations     112  
Liquidity and Capital Resources     113  
Election as a REIT     114  
Inflation     114