Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yesþ Noo

     Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yeso Noo

     Indicate by check mark whether the registrant is a large accelerated filed, 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):

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

Yeso Noþ

     As of November 16, 2009,May 10, 2010, there were 237,7001,088,603 shares of the Registrant’s common stock issued and outstanding.outstanding

     TNP Strategic Retail Trust, Inc. (the “Company”) was formed on September 18, 2008, as a Maryland corporation and intends to qualifythe Company believes it qualifies as a real estate investment trust (“REIT”) under the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”). The Company was organized primarily to acquire income-producingincome producing retail properties located in the Western United States, real estate-related assets and other real estate assets. As discussed in Note 3,6, the Company soldwas initially capitalized by the sale of stock to Thompson National Properties, LLC (“Sponsor”(the “Sponsor”) on October 16, 2008. The Company’s fiscal year end is December 31. The Company has not begun operations.

     On November 4, 2008, the Company filed a registration statement on Form S-11 with the Securities and Exchange Commission (the “SEC”) to offer a maximum of 100,000,000 shares of its common stock to the public in its primary offering and 10,526,316 shares of its common stock pursuant to its distribution reinvestment plan.plan (“DRIP”). On August 7, 2009, the SEC declared the offeringregistration statement effective and the Company commenced its initial public offering. The Company will offeris offering shares to the public in its primary offering at a price of $10.00 per share, with discounts available for certain purchasers, and to its stockholders pursuant to its distribution reinvestment planthe DRIP at a price of $9.50 per share. As of September 30,

     On November 12, 2009, the Company had not raisedachieved the minimum offering amount of $2,000,000 and offering proceeds were released to the Company from an escrow account. From commencement of the offering through March 31, 2010, the Company had accepted investors’ subscriptions for, and issued, including shares through the DRIP, 902,617 shares of the Company’s common stock, resulting in its initial publicgross offering (see Note 7, Subsequent Events).proceeds of $8,898,000.

     The Company intends to use the net proceeds from its public offering to invest in a portfolio of income-producing retail properties, primarily to acquirelocated in the Western United States, including neighborhood, community and lifestyle shopping centers, multi-tenant shopping centers and free standing single-tenant retail properties. TheIn addition to investments in real estate directly or through joint ventures, the Company may also makeacquire or acquireoriginate first mortgages or second mortgages, mezzanine loans preferred equity investments and investments in common stock of privateor other real estate companies and publicly traded real estate investment trusts,estate-related loans, in each case provided that the underlying real estate meets the Company’s criteria for direct investment. The Company may also invest in any other real propertiesproperty or other real estate-related assets that, in the opinion of the Company’s board of directors, meets the Company’s investment objectives.

     The Company’s advisor is TNP Strategic Retail Advisor, LLC, (“Advisor”), a Delaware limited liability company.company (“Advisor”). Subject to certain restrictions and limitations, Advisor is responsible for managing the Company’s affairs on a day-to-day basis and for identifying and making acquisitions and investments on behalf of the Company.

     Substantially all of the Company’s business will be conducted through TNP Strategic Retail Operating Partnership, LP, the Company’s operating partnership (the “OP”). The Company is the sole general partner of the OP. The initial limited partners of the OP are Advisor and TNP Strategic Retail OP Holdings, LLC, a Delaware limited liability company (“TNP OP”). Advisor has invested $1,000 in the OP in exchange for common units and TNP OP has invested $1,000 in the OP and has been issued a separate class of limited partnership units (the “Special Units”). As the Company accepts subscriptions for shares, it will transfer substantially all of the net proceeds of the offering to the OP as a capital contribution. As of March 31, 2010 and December 31, 2009, the Company owned 99.9% and 99.8%, respectively, of the limited partnership interest in the OP. As of March 31, 2010 and December 31, 2009, Advisor owned 0.1% and 0.2%, respectively, of the limited partnership interest in the OP. TNP OP owned 100% of the outstanding Special Units as of March 31, 2010 and December 31, 2009.

The partnership agreement provides that the OP will be operated in a manner that will enable the Company to (1) satisfy the requirements for being classified as a REIT for tax purposes, (2) avoid any federal income or excise tax liability and (3) ensure that the OP will not be classified as a “publicly traded partnership” for purposes of Section 7704 of the Internal Revenue Code, which classification could result in the OP being taxed as a corporation, rather than as a partnership. In addition to the administrative and operating costs and expenses incurred by the OP in acquiring and operating real properties, the OP will pay all of the Company’s administrative costs and expenses, and such expenses will be treated as expenses of the OP.

     Our accounting policies have been established to conform with U.S. generally accepted accounting principles (“GAAP”). The Company’s consolidatedpreparation of financial statements include its accountsin conformity with GAAP requires management to use judgment in the application of accounting policies, including making estimates and assumptions. These judgments affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the accountsreported amounts of its subsidiary,revenue and expenses during the OP. All intercompany profits, balancesreporting periods. If management’s judgment or interpretation of the facts and circumstances relating to various transactions are eliminatedis different, it is possible that different accounting policies will be applied or different amounts of assets, liabilities, revenues and expenses will be recorded, resulting in consolidation.

     The complete list of our Significant Accounting Policies was previously disclosed in the Company’s consolidated financial statements will also include2009 Annual Report on Form 10-K, as filed with the accounts of its consolidated subsidiariesSEC on March 31, 2010, as amended by the Annual Report on Form 10-K/A, filed with the SEC on May 17, 2010 (as amended, the “Form 10-K”), and joint ventures in which the Company is the primary beneficiary, or in which the Company has a controlling interest. In determining whether the Company has a controlling interest in a joint venture and the requirementthere have been no material changes to consolidate the accounts of that entity, the Company’s management considers factors suchour Significant Accounting Policies as an entity’s purpose and design and the Company’s ability to direct the activities of the entity that most significantly impacts the entity’s economic performance, ownership interest, board representation, management representation, authority to make decisions, and contractual and substantive participating rights of the partners/members as well as whether the entity is a variable interest entity in which it will absorb the majority of the entity’s expected losses, if they occur, or receive the majority of the expected residual returns, if they occur, or both.disclosed therein.

     The financial information as of September 30, 2009and for the period ended March 31, 2010 is unaudited, but includes all adjustments consisting of normal recurring adjustments that, in the opinion of management, are necessary for a fair presentation of the Company’s financial position for such period.and operating results. These interim unaudited consolidated financial statements do not include all disclosures required by GAAP for annualcomplete consolidated financial statements. The Company’s audited consolidated financial statements asInterim results of and for the period from October 16, 2008 (inception) through December 31, 2008 are contained in the Company’s Registration Statement on Form S-11 Amendment No. 2 (File No. 333-154975) filed March 10, 2009. Operating results for the three and nine months ended September 30, 2009operations are not necessarily indicative of the results that mayto be expected for the year ending December 31, 2009.

As of March 31, 2010 and December 31, 2009, the Company’s organization and other offering costs exceeded 3.0% of the gross proceeds of our initial public offering, thus the amount in excess of 3.0%, or net capital gain$1,434,000 and which does not necessarily equal net income as calculated in accordance with accounting principles generally accepted in the United States of America). REITs are subject to a number of other organizational and operations requirements. Even if the Company qualifies for taxation as a REIT, it may be subject to certain state and local taxes on its income and property, and federal income and excise taxes on its undistributed income.$1,425,000, respectively has been deferred.

     Cash and cash equivalents represents current bank accounts and other bank deposits free of encumbrances and having maturity dates of three months or less from the respective dates of deposit. As of September 30, 2009,March 31, 2010, the Company did not have cash on deposithad $3,298,000 in excess of federally insured levels.limits in a money market account. The Company limits cash investments to financial institutions with high credit standing; therefore, the Company believes it is not exposed to any significant credit risk in cash.

     The entire unpaid principal balance of all borrowings under the Credit Agreement and all accrued and unpaid interest thereon will be due and payable in full on November 12, 2010. Borrowings under the Credit Agreement will bear interest at a variable per annum rate equal to change GAAP, the Company does not expect it to have a material impactsum of (a) 425 basis points plus (b) the greater of (1) 300 basis points or (2) 30-day LIBOR as reported by Reuters on the Company’s consolidated financial statements. The Company adopted this standard effective forday that is two business days prior to the third quarter of 2009.

     As of March 31, 2010, $15,000,000 was available under the Company sold 22,222 sharesCredit Agreement, subject to KeyBank’s review and approval described above. No amounts were borrowed during the three months ended March 31, 2010 or were outstanding under the Credit Agreement as of common stock to the Sponsor for an aggregate purchase price of $200,000. The Company’s board of directors is authorized to amend its charter, without the approval of the stockholders, to increase the aggregate number of authorized shares of capital stock or the number of shares of any class or series that the Company has authority to issue.March 31, 2010 and December 31, 2009, respectively.

     Advisor and certain affiliates of Advisor will receive fees and compensation in connection with the Company’s public offering, and the acquisition, management and sale of the Company’s real estate investments.

     TNP Securities, LLC (“Dealer Manager”), the dealer manager of the offering and a related party, will receivereceives a commission of up to 7.0% of gross offering proceeds. Dealer Manager may reallow all or a portion of such sales commissions earned to participating broker-dealers. In addition, the Company will pay Dealer Manager a dealer manager fee of up to 3.0% of gross offering proceeds, a portion of which may be reallowed to participating broker-dealers. No selling commissions or dealer manager fee will be paid for sales under the Company’s distribution reinvestment plan.DRIP. For the quarter ended March 31, 2010, the Company had paid the Dealer Manager $236,000 in sales commissions and $104,000 in dealer manager fees. The Company had $40,000 and $17,000 recorded in amounts due to related parties for sales commissions and dealer manager fees, respectively, as of March 31, 2010, as compared to $31,000 and $13,000 recorded in amounts due to related parties for sales commissions and dealer manager fees, respectively, as of December 31, 2009.

     Advisor will receive up to 3.0% of the gross offering proceeds for reimbursement of organization and offering expenses. Advisor will be responsible for the payment of organization and offering expenses, other than selling commissions and dealer manager fees, and to the extent theysuch expenses exceed 3.0% of gross offering proceeds, without recourse against or reimbursement by the Company. As of March 31, 2010, Advisor and its affiliates had incurred organizational and offering expenses of $1,704,000 (of which $214,000 were offering expenses that were recorded as a reduction to equity, $56,000 were organizational expenses that were recorded in general and administrative expense, and $1,434,000 were recorded as deferred organization and offering costs and in amounts due to affiliates as the amount of organization and offering costs has exceeded 3.0% of gross offering proceeds). As of December 31, 2009, Advisor and its affiliates had incurred organizational and offering expenses of $1,579,000 (of which $122,000 were offering expenses that were recorded as a reduction to equity, $32,000 were organizational expenses that are recorded in general and administrative expense, and $1,425,000 were recorded as deferred organization and offering costs and in amounts due to affiliates as the amount of organization and offering costs has exceeded 3.0% of gross offering proceeds).

     Advisor, or its affiliates, will also receive an acquisition fee equal to 2.5% of (1) the cost of investments the Company acquires or (2) the Company’s allocable cost of investments acquired in a joint venture. During the three months ended March 31, 2010 and 2009, the Company did not incur any acquisition fees. In March 2010, TNP SRT Moreno paid Advisor the additional acquisition fee of $110,000 and the amount is included in prepaid expenses and other assets as of March 31, 2010.

     The Company expects to pay TNP Property Manager, LLC (“TNP Manager”), its property manager and a related party, a market-based property management fee of up to 5.0% of the gross revenues generated by the properties in connection with the operation and management of properties. TNP Manager may subcontract with third party property managers and will be responsible for supervising and compensating those property managers.

     The Company’s charter authorizes it to issue 50,000,000 shares of $0.01 par value preferred stock. As of March 31, 2010 and December 31, 2009, amounts incurredno shares of preferred stock were issued and outstanding.

     The share redemption plan allows for share repurchases by the AdvisorCompany when certain criteria are met by requesting stockholders. Share repurchases will be made at the sole discretion of the Company’s board of directors. The number of shares to be redeemed during any calendar year is limited to no more than (1) 5.0% of the weighted average of the number of shares of its common stock outstanding during the prior calendar year and (2) those that could be funded from the net proceeds from the sale of shares under the DRIP in connection with services providedthe prior calendar year plus such additional funds as may be borrowed or reserved for that purpose by the Company’s board of directors. In addition, the Company’s board of directors reserves the right to reject any redemption request for any reason or no reason or to amend or terminate the share redemption program at any time. For the three months ended March 31, 2010 and 2009, the Company did not repurchase any shares of its common stock pursuant to the share redemption program nor had any such requests been received.

     On August 13, 2009, the Company’s board of directors approved a monthly cash distribution of $0.05625 per common share, which represents an annualized distribution of $0.675 per share. The commencement of the distribution was subject to the Company raising a minimum of offering proceeds of $2,000,000, the sale of a sufficient number of shares in the Company’s public offering to finance an asset acquisition and the identification and completion of an asset acquisition. On November 12, 2009, the Company achieved the minimum offering amount of $2,000,000, and on November 19, 2009 the Company completed the acquisition of the Moreno Property, thus satisfying all of the conditions for the commencement of the monthly distribution. The distributions paid during the three months ended March 31, 2010 exceeded the Company’s net income since the Company had a loss for the period. Therefore, cash amounts distributed to stockholders were $127,507.funded from proceeds from the offering.

     The Company adopted an incentive plan on July 7, 2009 (the “Incentive Award Plan”) that provides for the grant of equity awards to its employees, directors and consultants and those of the Company’s affiliates on July 7, 2009.affiliates. The Incentive Award Plan authorized the grant of non-qualified and incentive stock options, restricted stock awards, restricted stock units, stock appreciation rights, dividend equivalents and other stock-based awards or cash-based awards. No awards have been granted under such plan as of September 30, 2009. The Company will granthas reserved 2,000,000 shares of common stock for stock grants pursuant to the Incentive Award Plan. The Company granted each of its current independent directors an initial grant of 5,000 shares of restricted stock (the “initial restricted stock grant”) when and if it raisesfollowing the Company’s raising of the $2,000,000 minimum offering amount of $2,000,000.on November 12, 2009. Each new independent director that subsequently joins the board of directors will receive the initial restricted stock grant on the date he or she joins the board of directors. In addition, on the date of each of the Company’s annual stockholders meetings at which an independent director is re-elected to the board of directors, he or she will receive 2,500 shares of restricted stock. The restricted stock will vest as to one-third of the shares on each anniversary of the grant date (the initial grant of 5,000 shares to each director will vest to one-third on the grant date and as to one-third of the shares on each of the firstnext two anniversaries of the grant date.anniversaries). The restricted stock will become fully vested in the event of an independent directors’ termination of service due to his or her death or disability, or upon the occurrence of a change in control of the Company.

     As of March 31, 2010 and December 31, 2009, there was $72,000 and $85,000, respectively, of total unrecognized compensation expense related to nonvested shares of restricted common stock. As of March 31, 2010, this expense is expected to be realized over a remaining period of 2.62 years. As of March 31, 2010 and December 31, 2009, the fair value of the nonvested shares of restricted common stock was $90,000 and $90,000, respectively. No additional shares were issued or vested during the three months ended March 31, 2010.

     On November 12, 2009,March 31, 2010, the Company solddeclared a monthly distribution in the minimumaggregate amount of $2,000,000$47,000, of which $33,000 was paid in cash on April 14, 2010 and $14,000 was paid through the DRIP in the form of additional shares issued on March 31, 2010. On April 30, 2010, the Company declared a monthly distribution in the aggregate amount of its common stock$56,000, of which $39,000 was paid in cash on May 14, 2010 and $17,000 was paid through the DRIP in the form of additional shares issued on April 30, 2010.

     With respect to the public. Proceeds from initial subscriptions were placedConvertible Note as detailed in escrow untilNote 3, the minimum offeringconversion element of the Convertible Note expired on April 2, 2010. Because the note was reached. Asnot converted, TNP SRT Moreno paid Advisor an additional acquisition fee of November 16, 2009,$110,000.

     On April 26, 2010, TNP SRT Waianae Mall, LLC (“TNP SRT Waianae”), a wholly owned subsidiary of the Company had issued 237,700 shares.OP, and the seller of the Waianae Mall located in Honolulu, Hawaii (the “Waianae Property”) entered into the Twelfth Amendment to the purchase agreement, (the “Twelfth Amendment”), which reinstates and amends the purchase agreement. The proceeds held in escrow, plus interest, became available forTwelfth Amendment extends the outside date to close the acquisition of assets and other purposes.

     The following discussion and analysis should be read in conjunction with the accompanyingour consolidated financial statements of TNP Strategic Retail Trust, Inc. and the notes thereto.thereto included in Part 1, Item 1 of this Form 10-Q and in our 2009 Annual Report on Form 10-K, as amended. As used herein, the terms “we,” “our”“our,” and “us” refer to TNP Strategic Retail Trust, Inc., a Maryland corporation, and, as required by context, TNP Strategic Retail operating partnership,Operating Partnership, LP, a Delaware limited partnership, which we refer to as our “Operating Partnership,“operating partnership,” and to their subsidiaries. References to “shares” and “our common stock” refer to the shares of our common stock.

     Certain statements included in this quarterly reportQuarterly Report on Form 10-Q that are not historical facts (including any statements concerning investment objectives, other plans and objectives of management for future operations or economic performance, or assumptions or forecasts related thereto) are forward-looking statements. These statements are only predictions. We caution that forward-looking statements are not guarantees. Actual events or our investments and results of operations could differ materially from those expressed or implied in any forward-looking statements. Forward-looking statements are typically identified by the use of terms such as “may,” “should,” “expect,” “could,” “intend,” “plan,” “anticipate,” “estimate,” “believe,” “continue,” “predict,” “potential” or the negative of such terms and other comparable terminology.

     The forward-looking statements included herein are based upon our current expectations, plans, estimates, assumptions and beliefs, which involve numerous risks and uncertainties. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond our control. Although we believe that the expectations reflected in such forward-looking statements are based on reasonable assumptions, our actual results and performance could differ materially from those set forth in the forward-looking statements. Factors which could have a material adverse effect on our operations and future prospects include, but are not limited to:

     Any of the assumptions underlying the forward-looking statements included herein could be inaccurate, and undue reliance should not be placed on any forward-looking statements included herein. All forward-looking statements are made as of the date this quarterly report is filed with the Securities and Exchange Commission, or SEC, and the risk that actual results will differ materially from the expectations expressed herein will increase with the passage of time. Except as otherwise required by the federal securities laws, we undertake no obligation to publicly update or revise any forward-looking statements made herein, whether as a result of new information, future events, changed circumstances or any other reason.

     We were formed asare a Maryland corporation formed on September 18, 2008 to invest in and manage a portfolio of income-producingincome producing retail properties, located primarily in the Western United States, and real estate-related assets, including the investment in or origination of mortgage, mezzanine, bridge and other loans related to commercial real estate. We plan to own substantially all of our assets and conduct our operations through our operating partnership, of which we are the sole general partner. We intend to elect to be taxed as a real estate investment trust, or REIT, commencing with the taxable year ended December 31, 2009.

     On August 7, 2009, our Registration StatementNovember 4, 2008, we filed a registration statement on Form S-11 (File No. 333-154975), registeringwith the SEC to offer a public offeringmaximum of up to $1,100,000,000 in shares of our common stock, was declared effective under the Securities Act of 1933, as amended, or the Securities Act, and we commenced our initial public offering. We are offering up to 100,000,000 shares of our common stock to the public in our primary offering at $10.00 per share and up to 10,526,316 shares of our common stock to stockholders pursuant to our distribution reinvestment plan. On August 7, 2009, the SEC declared our registration statement effective and we commenced our initial public offering. We are initially offering shares of our common stock at a price of $10.00 per share, with discounts available for certain purchasers, and to our stockholders pursuant to our distribution reinvestment plan, or DRIP, at a price of $9.50 per share.

          We may not sell any shares in the offering until we have raised gross offering proceeds of $2,000,000 from persons who are not affiliated with us. Pending satisfaction of this condition, all subscription payments will be placed in an account held by our escrow agent in trust for subscribers’ benefit. If we do not raise $2,000,000 in the offering by August 7, 2010, we will promptly return all funds in the escrow account (including interest) to subscribers and we will stop selling our shares. As of September 30, 2009, we had not raised the minimum offering amount of $2,000,000.     On November 12, 2009, we raisedachieved the minimum offering amount of $2,000,000 and offering proceeds were released to us from thean escrow account. See “—Liquidity and Capital Resources—Offering Proceeds Released from Escrow.”From the commencement of our public offering through March 31, 2010, we sold 902,617 shares for gross offering proceeds of $8,898,000, which includes 4,031 shares issued through the DRIP, for gross proceeds of $38,000.

     We are dependent upon proceeds receivedintend to invest in a portfolio of income-producing retail properties, primarily located in the Western United States, including neighborhood, community and lifestyle shopping centers, multi-tenant shopping centers and free standing single-tenant retail properties. In addition to investments in real estate directly or through joint ventures, we may also acquire or originate first mortgages or second mortgages, mezzanine loans or other real estate-related loans, which we refer to collectively as “real estate-related loans,” in each case provided that the underlying real estate meets our criteria for direct investment. We may also invest in any other real property or other real estate-related assets that, in the opinion of our board of directors, meets our investment objectives and is in the best interests of our stockholders. As of March 31, 2010, our portfolio included one property, the Moreno Marketplace, or Moreno property, a multi-tenant retail center located in Moreno Valley, California encompassing 94,574 square feet, including 78,743 of rentable square feet.

     Under our Articles of Amendment and Restatement, which we refer to as our “charter,” we have a limitation on borrowing, which precludes us from borrowing, in excess of 300% of the value of our net assets. Net assets for purposes of this calculation is defined as our total assets (other than intangibles), valued at cost prior to deducting depreciation, reserves for bad debts and other non-cash reserves, less total liabilities. The preceding calculation is generally expected to approximate 75% of the aggregate cost of our assets before non-cash reserves and depreciation. However, our charter allows us to temporarily borrow in excess of these amounts if such excess is approved by a majority of the independent directors and disclosed to stockholders in our next quarterly report, along with an explanation for such excess. As of March 31, 2010 and December 31, 2009, we exceeded the 300% limit due to the exclusion of intangible assets that were incurred with the acquisition of the Moreno property. Because these intangible assets were part of the purchase price and because our overall indebtedness is less than 75% of the book value of our assets at March 31, 2010 and December 31, 2009, this excess borrowing has been approved by our independent directors.

This potential acquisition is subject to substantial conditions to closing including: (1) the sale of a sufficient number of shares of our common stock in our initial public offering to fund a portion of the purchase price for the Waianae property; (2) the final approval of the loan servicer for the existing indebtedness on the Waianae property to be assumed by us and any indebtedness that we may incur in orderthe receipt of other applicable third-party consents; and (3) the absence of a material adverse change to conduct our proposed real estate investment activities. We have initially been capitalized with $200,000 which was contributed in cash on October 16, 2008, from the saleWaianae property prior to the date of 22,222 shares in the aggregate. Our sponsor, or any affiliate of our sponsor, must maintain this investment while it remains our sponsor.acquisition.

     We will experience a relative increase in liquidity as additional subscriptions for shares ofSubject to certain restrictions and limitations, our common stock are received and a relative decrease in liquidity as offering proceeds are used to acquire and operate our assets.

     Our results of operations for the three months ended March 31, 2010 are not indicative of those expected in future periods as we commenced operations on November 19, 2009 in connection with our first property acquisition. For the three months ended March 31, 2009, we had been formed but had not yet commenced our ongoing initial public offering or real estate operations. As a result, we had no results of operations for that period.

     Revenue was $298,000 for the three months ended March 31, 2010 and is not required to, establish working capital reserves from offering proceeds outcomprised solely of cash flow generated by our investments or out of proceedsrental income from the saleMoreno property. The occupancy for the Moreno property was 70.9% based on 78,743 of our investments.rentable square feet as of March 31, 2010 (the Moreno property is comprised of 94,574 total square feet with 78,743 square feet of building improvements and 15,831 square feet of finished but unimproved pad sites). We do not anticipate establishingexpect rental income to increase in future periods as we acquire real estate investments in the future.

     General and administrative expenses were $381,000 for the three months ended March 31, 2010. These general and administrative expenses consisted primarily of legal and accounting, restricted stock compensation, directors’ fees, insurance, due diligence costs for potential acquisitions and organization expenses. We expect general and administrative expenses to increase in the future based on a general working capital reserve duringfull year of real estate operations and as a result of anticipated future acquisitions, but to decrease as a percentage of total revenue.

     Acquisition expenses were $12,000 for the initial stagesthree months ended March 31, 2010, all of our initial public offering; however, we may establish capital reserves with respect to particular investments. We also may, but are not required to, establish reserves out of cash flow generated by investments or out of net sale proceeds in non-liquidating sale transactions. Working capital reserves are typically utilized to fund tenant improvements, leasing commissions and major capital expenditures. Our lenders also may require working capital reserves.

     Operating and maintenance expenses were $161,000 for the leveragingthree months ended March 31, 2010. Included in operating and maintenance expense are asset management and property management fees incurred and payable to our advisor and its affiliates of any previously unfinanced$20,000 and $4,000, respectively. We expect asset management and property or reinvest the proceeds of financing or refinancingmanagement fees to increase in additional properties.

     We commenced real estate operations with the acquisition of our first property on November 19, 2009. Our principal demand for funds will be to acquirefor the acquisition of real estate assets, to paythe payment of operating expenses, principal and interest payments on our outstanding indebtedness and to makethe payment of distributions to our stockholders. Over time, we intend to generally fund our cash needs from operations for items other than asset acquisitions.acquisitions from operations. Our cash needs for acquisitions and investments will be funded primarily from the sale of shares of our common stock, including those offered for sale through our distribution reinvestment plan,the DRIP, and through the assumption of debt.

     Net cash provided by financing activities for the minimum offering amountthree months ended March 31, 2010 were $3,311,000, consisting primarily of $2,000,000 in our initial public offering. On November 12, 2009, we satisfied the conditions of our escrow agreement. As of November 16, 2009, we had accepted investors’ subscriptions for, and issued, 237,700 shares of our common stock, resulting innet offering proceeds of $2,292,350.

     DuringNet cash used in operating activities for the period from our inception (October 16, 2008) to September 30, 2009, we had been formed but had not yet commenced real estate operations. As a result, we had no material results of operations for that period. The SEC declared the registration statement for our initial public offering effective on August 7, 2009.

     The entire unpaid principal balance of all borrowings under the revolving credit facility and all accrued and unpaid interest thereon will be due and payable in full on November 12, 2010. Borrowings under the revolving credit facility will bear interest at a variable per annum rate equal to the sum of (a) 425 basis points plus (b) the greater of (1) 300 basis points or (2) 30-day LIBOR as reported by Reuters on the day that is two business days prior to the date of such determination, and accrued and unpaid interest on any past due amounts will bear interest at a variable LIBOR-based rate that in no event shall exceed the highest interest rate permitted by applicable law. The operating partnership paid KeyBank a one time $150,000 commitment fee in connection with entering into the credit agreement and will pay KeyBank an unused commitment fee of 0.50% per annum.

     Market risk is the adverse effect on the value of a financial instrument that results from a change in interest rates. We may be exposed to interest rate changes primarily as a result of long-term debt used to maintain liquidity, fund capital expenditures and expand our real estate investment portfolio and operations. Market fluctuations in real estate financing may affect the availability and cost of funds needed to expand our investment portfolio. In addition, restrictions upon the availability of real estate financing or high interest rates for real estate loans could adversely affect our ability to dispose of real estate in the future. We will seek to limit the impact of interest rate changes on earnings and cash flows and to lower our overall borrowing costs. We may use derivative financial instruments to hedge exposures to changes in interest rates on loans secured by our assets. The market risk associated with interest-rate contracts is managed by establishing and monitoring parameters that limit the types and degree of market risk that may be undertaken. With regard to variable rate financing, our advisor will assess our interest rate cash flow risk by continually identifying and monitoring changes in interest rate exposures that may adversely impact expected future cash flows and by evaluating hedging opportunities. Our advisor will maintain risk management control systems to monitor interest rate cash flow risk attributable to both our outstanding and forecasted debt obligations as well as our potential offsetting hedge positions. While this hedging strategy will be designed to minimize the impact on our net income and funds from operations from changes in interest rates, the overall returns on your investment may be reduced. Because we have not commenced real estate operations, we currently have limited exposure to financial market risks. As of September 30, 2009,March 31, 2010, all of our outstanding indebtedness accrued interest at a fixed rate and therefore an increase or decrease in interest rates would have no effect on our interest expense as we had no outstandingexpense.

     The carrying value of our debt approximates fair value as of that date.March 31, 2010, as all of our debt has a fixed interest rate and the rate approximates market interest rates.

     We will also be exposed to credit risk. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. If the fair value of a derivative contract is positive, the counterparty will owe us, which creates credit risk for us. If the fair value of a derivative contract is negative, we will owe the counterparty and, therefore, do not have credit risk. We will seek to minimize the credit risk in derivative instruments by entering into transactions with high-quality counterparties.

     As of the end of the period covered by this report, our management, including our chief executive officer and our chief financial officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures. Based upon, and as of the date of, the evaluation, our Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act). Based upon and as of the date of the evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report to ensure that information required to be disclosed in the reports we file and submit under the Exchange Act is recorded, processed, summarized and reported as and when required. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports we file and submit under the Exchange Act is accumulated and communicated to our management, including our chief executive officer and our chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

     ThereWe have been no changesnot evaluated any change in our internal control over financial reporting that occurred during our last fiscal quarter that have materially affected, or are reasonably likelydue to materially affect, our internal control over financial reporting.a transition period established by the rules of the Securities and Exchange Commission for newly public companies.

     None.

     None.There have been no material changes in our risk factors as previously disclosed in Part 1, Item 1A Risk Factors of the Annual Report on Form 10-K.

     On August 7, 2009, our Registration Statement on Form S-11 (File No. 333-154975), registering a public offering of up to $1,100,000,000 in shares of our common stock was declared effective under the Securities Act of 1933, as amended, or the Securities Act, and we commenced our initial public offering. We are offering up to 100,000,000 shares of our common stock to the public in our primary offering at $10.00 per share and up to 10,526,316 shares of our common stock pursuant to our distribution reinvestment plan at $9.50 per share.

     We may not sell anyAs of March 31, 2010, we had sold 902,617 shares of common stock in theour initial public offering untiland through our DRIP, raising gross proceeds of $8,898,000. From this amount, we have raisedincurred $773,000 in selling commissions and dealer manager fees to our dealer manager, $1,704,000 in organization and offering costs (of which $214,000 are offering expenses that are recorded as a reduction to equity and $1,434,000 recorded as deferred organization and offering costs and in amounts due to affiliates as the amount of organization and offering costs has exceeded 3% of gross offering proceeds).

     As of March 31, 2010, we had offering proceeds including proceeds from our distribution reinvestment plan, net of $2,000,000selling commissions, the dealer manager fee and organization and offering costs, from persons who are not affiliatedour offering of $6,421,000. As of March 31, 2010, we have used the net proceeds from our initial public offering and debt financing to purchase $12,500,000 in real estate, and paid $420,000 of acquisition expenses. For more information regarding how we used our net offering proceeds through March 31, 2010, see our financial statements included in this Quarterly Report.

     In connection with us or our advisor. Pending satisfaction of this condition, all subscription payments will be placed in an account held by our escrow agent in trust for subscribers’ benefit. On November 12, 2009, we raisedraising the minimum offering amount of $2,000,000 and thein our public offering, proceeds were released to us from the escrow account. The offering will terminate no later than August 7, 2011, unless extended.

     None.

     None.

     None.

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.