Large accelerated
filer
|
o
|
Accelerated
filer
|
o
|
|||||
Non-accelerated
filer
|
þ
|
(Do not check if a smaller
reporting company)
|
Smaller reporting
company
|
o
|
·
|
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.
|
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
|
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
|
·
|
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.
|
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%.
|
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.
|
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.
|
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
|
·
|
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
|
·
|
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
|
·
|
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
|
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
|
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
|
Mortgage
Debt Amount
|
Rate
|
Term
|
||||
$33,068,100
|
6.55%(1)
|
five
years
|
(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
|
Address
|
City
|
State
|
Total
Purchase Price
|
Compensation
to Advisor and Affiliate (1) |
||||||
5200
SW Wenger Street
|
Topeka
|
KS
|
$
|
23,531,680
|
$
|
365,763
|
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
|
Mortgage
Debt Amount
|
Rate
|
Maturity
Date
|
||
$13,716,160
|
6.25%(1)
|
January
2013(1)
|
(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
|
||||||||||||
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
|
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
|
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
|
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
|
Mortgage
Debt Amount
|
Rate
|
Maturity
Date
|
||
$6,090,000
|
6.25%
|
January
31, 2015
|
(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 |
|
•
|
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.
|
(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 |
(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 | ||||||||||||
·
|
Quarterly Report on Form 10-Q for
the quarterly period ended September 30, 2009, filed with the SEC on
November 16, 2009.
|
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.
November 10, 2009
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 purchasers 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 states 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 investors 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 investors maximum investment in the issuer and its affiliates cannot exceed 10% of the Massachusetts, Ohio, Iowa, Pennsylvania or Oregon residents 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 residents 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 residents net worth. |
i
| 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 purchasers 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 investors 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.
ii
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 investors 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.
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. |
iii
iv