Phillips Edison & Company (PECO) 424B3 Prospectus supplement

Filed Pursuant to Rule 424(B)(3)
Registration No. 333-164313

PHILLIPS EDISON – ARC SHOPPING CENTER REIT INC.

SUPPLEMENT NO. 8 DATED APRIL 27, 2012

TO THE PROSPECTUS DATED NOVEMBER 22, 2011

This document supplements, and should be read in conjunction with, our prospectus dated November 22, 2011 relating to our offering of 180 million shares of common stock. Supplement No. 8 supersedes and replaces all prior supplements to the prospectus. Unless otherwise defined in this Supplement No. 8, capitalized terms used have the same meanings as set forth in the prospectus. The purpose of this supplement is to disclose, among other things, the following:

• operating information, including the status of the offering, portfolio data, information regarding our current leverage ratio, selected financial data, distribution information, dilution information, information about our share repurchase program, and compensation to our advisor, our sub-advisor, our dealer manager, and their affiliates;

• update regarding our Prospectus Summary;

• updates regarding risk factors;

• updates to the biographies of William M. Kahane and Edward M. Weil, Jr.;

• updated information regarding volume discounts;

• updated information regarding the prior performance of programs operated by our sponsors, including prior performance tables, as of December 31, 2011;

• “Experts” information; and

• information incorporated by reference.

OPERATING INFORMATION

Status of the Offering

We commenced this initial public offering on August 12, 2010, pursuant to which we are offering up to 150 million shares of our common stock in a primary offering at $10.00 per share, with discounts available for certain categories of purchasers, and up to 30 million shares of our common stock pursuant to our dividend reinvestment plan at $9.50 per share. As of April 4, 2012, we had raised aggregate gross offering proceeds of approximately $38.5 million from the sale of approximately 4.0 million shares in our initial public offering, including shares sold under our dividend reinvestment plan, and incurred approximately $10.1 million of related organization and offering costs. As of April 4, 2012, approximately 146.1 million shares of our common stock remain available for sale in our primary offering, and approximately 30.0 million shares of our common stock remain available for issuance under our dividend reinvestment plan.

The termination date of our primary offering of 150 million shares of common stock will be August 12, 2013. We may continue to offer shares under our dividend reinvestment plan beyond the conclusion of the primary offering until we have sold 30 million shares of common stock through the reinvestment of distributions. We may terminate this offering at any time.

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Real Estate Investment Summary

Real Estate Portfolio

We own all of our real estate properties through a joint venture (the “Joint Venture”) formed between a group of institutional international investors advised by CBRE Investors Global Multi Manager (the “CBRE Global Investors”) and our wholly-owned subsidiary. We hold a 54% interest in the Joint Venture and the CBRE Global Investors hold the remaining 46% interest. As of April 4, 2012, we, through the Joint Venture, owned fee simple interests in nine real estate properties acquired from third parties unaffiliated with us or our advisor. The following is a summary of our real estate properties as of April 4, 2012:

Property Name	Location	Property Type	Date Acquired		Contract Purchase Price (1)		Rentable Square Footage		Annualized Effective Rent (2)		Annualized Effective Rent per Leased Square Foot		Average Remaining Lease Term in Years		% Leased
Lakeside Plaza	Salem, Virginia	Shopping Center		12/10/10	$	8.75 million		82,033	$	822,468	$	10.14		5.2 years		98.9	%
Snow View Plaza	Parma, Ohio	Shopping Center		12/15/10	$	12.30 million		100,460	$	1,114,368	$	11.80		7.1 years		94.0	%
St. Charles Plaza	Haines City, Florida	Shopping Center		6/10/11	$	10.10 million		65,000	$	906,013	$	14.47		12.0 years		96.3	%
Southampton Village	Tyrone, Georgia	Shopping Center		10/14/11	$	8.35 million		77,956	$	814,110	$	12.08		9.7 years		86.5	%
Centerpoint	Easley, South Carolina	Shopping Center		10/14/11	$	6.85 million		72,287	$	654,807	$	10.94		10.1 years		82.8	%
Burwood Village Center	Glen Burnie, Maryland	Shopping Center		11/9/11	$	16.60 million		105,834	$	1,426,914	$	13.48		7.1 years		100	%
Cureton Town Center	Waxhaw, North Carolina	Shopping Center		12/29/11	$	13.95 million		84,357	$	1,184,964	$	15.14		12.1 years		92.8	%
Tramway Crossing	Sanford, North Carolina	Shopping Center		2/23/12	$	5.50 million		62,382	$	545,157	$	9.15		4.0 years		95.5	%
Westin Centre	Fayetteville, North Carolina	Shopping Center		2/23/12	$	6.05 million		66,890	$	635,199	$	9.50		3.2 years		100.0	%

⁽¹⁾  The contract purchase price excludes closing costs and acquisition costs.

⁽²⁾  We calculate annualized effective rent as monthly contractual rent as of March 31, 2012 multiplied by 12 months, less any tenant concessions.

We believe that our real estate properties are suitable for their intended purposes and adequately covered by insurance. We do not intend to make significant renovations or improvements to our properties. Our properties are located in markets where there is competition for attracting new tenants and retaining current tenants.

Significant Tenants and Lease Expirations

The following table sets forth information regarding the two tenants comprising ten percent or more of the aggregate annualized effective rent or occupying ten percent or more of the aggregate rentable square footage at our nine shopping centers as of March 31, 2012:

Tenant Name/Property	Tenant Industry	Annualized Effective  Rent(1)		% of Total Portfolio Annualized Effective Rent			Rentable Square Footage		% of Total Portfolio Square Footage			Lease Expiration
Publix Super Markets / St. Charles Plaza, Southampton Village and Centerpoint	Retail – Grocery Store	$	1,484,391		18.3	%		142,791 sq. ft.		19.9	%		(2	)
Food Lion/ Burwood, Village Center, Tramway Crossing and Westin Centre	Retail – Grocery Store	$	861,965		10.6	%		95,665 sq. ft.		13.3	%		(3	)

⁽¹⁾  We calculate annualized effective rent as monthly contractual rent as of March 31, 2012 multiplied by 12 months, less any tenant concessions.

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⁽²⁾  Publix’ leases at St. Charles Plaza, Southampton Village, and Centerpoint expire in October 2027, December 2023, and January 2023, respectively. Publix has six options to extend the term of its lease at St. Charles Plaza by five years each. Publix has seven options to extend the term of its lease at Southampton Village by five years each. Publix has six options to extend the term of its lease at Centerpoint by five years each.

⁽³⁾  Food Lion’s leases at Burwood Village Center, Tramway Crossing, and Westin Crossing expire in October 2022, December 2016 and December 2015, respectively. Food Lion has four options to extend the terms of its leases at all three locations by five years each.

No material tenant credit issues have been identified at this time. As of April 4, 2012, we had no material current tenant rent balances outstanding over 90 days.

The following table lists, on an aggregate basis, all of the scheduled lease expirations after April 4, 2012 over each of the years ending December 31, 2012 and thereafter for our nine shopping centers. The table shows the approximate rentable square feet and annualized effective rent represented by the applicable lease expirations:

Year	Number of Expiring Leases		Annualized Effective Rent(1)		% of Total Portfolio Annualized Effective Rent			Leased Rentable Square Feet Expiring		% of Rentable Square Feet Expiring
2012		9	$	180,353		2.2	%		12,630		1.9	%
2013		18	$	695,360		8.6	%		38,276		5.7	%
2014		25	$	1,019,666		12.6	%		78,174		11.6	%
2015		19	$	919,909		11.4	%		63,269		9.4	%
2016		15	$	688,835		8.5	%		66,833		9.9	%
2017		9	$	421,430		5.2	%		27,280		4.0	%
2018		1	$	32,844		0.4	%		2,346		0.3	%
2019		4	$	449,269		5.5	%		56,533		8.4	%
2020		3	$	829,329		10.2	%		67,371		10.0	%
2021		3	$	146,100		1.8	%		10,160		1.5	%
Thereafter		9	$	2,720,905		33.6	%		253,152		37.4	%

⁽¹⁾  We calculate annualized effective rent as monthly contractual rent as of March 31, 2012 multiplied by 12 months, less any tenant concessions.

Portfolio Tenancy

Prior to the acquisition of a property, we assess the suitability of the grocery anchor tenant and other tenants in light of our investment objectives, namely, preserving capital and providing stable cash flows for distributions. Generally, we assess the strength of the tenant by consideration of company factors, such as its financial strength and market share in the geographic area of the shopping center, as well as location-specific factors, such as the store’s sales, local competition and demographics. When assessing the tenancy of the non-anchor space at the shopping center, we consider the tenant mix at each shopping center in light of our portfolio, the proportion of national and national franchise tenants, and credit worthiness of specific tenants. When evaluating non-national tenancy, we attempt to obtain credit enhancements to leases, which typically come in the form of deposits and/or guarantees from one or more individuals.

The following table presents the composition of our portfolio by tenant type as of March 31, 2012:

Tenant Type:	Leased Rentable Sq. Ft.		% of Total Portfolio Leased Rentable Sq. Ft.			Annualized Base Rent		% of Total Portfolio Annualized Base Rent
Grocery anchor		397,720		58.8	%	$	3,866,543		47.7	%
National/national franchise		153,493		22.7	%	$	2,062,937		25.5	%
Regional & local		124,811		18.5	%	$	2,174,520		26.8	%
Totals		676,024		100.0	%	$	8,104,000		100	%

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Updated Pro Forma Financial Information

The following information provides on a pro forma basis selected financial information for the year ended December 31, 2011 as if St. Charles Plaza, Southampton Village, Centerpoint, Burwood Village Center, and Cureton Town Center had been acquired on January 1, 2010.

(in thousands)
Operating Data:
Total revenues	$	8,292
Property operating expenses		(1,493	)
Real estate tax expense		(1,011	)
General and administrative		(1,425	)
Acquisition-related expenses		(639	)
Depreciation and amortization		(3,443	)
Operating income		281
Interest expense		(2,276	)
Net loss		(1,995	)
Net loss allocable to noncontrolling interests		130
Net loss after allocation to noncontrolling interests	$	(1,865	)
Per Share Data:
Net loss attributable to common shareholders per share – basic and diluted	$	(0.80	)
Weighted average distributions per share declared	$	0.65
Weighted average shares outstanding – basic and diluted		2,319,035

Recent Acquisitions

Tramway Crossing

On February 23, 2012, we, through the Joint Venture, purchased Tramway Crossing for approximately $5.50 million, exclusive of closing costs. We hold an approximate 54% interest in the Joint Venture and the CBRE Global Investors hold the remaining approximate 46% interest. The Joint Venture funded the purchase price with proceeds of $2.97 million from this offering and $2.53 million provided by the CBRE Global Investors. Tramway Crossing was constructed in 1997. Tramway Crossing was purchased from Tramway Crossing, LLC, a North Carolina limited liability company that is not affiliated with us, our advisor or our sub-advisor.

Tramway Crossing is approximately 95.5% leased to 14 tenants. The largest tenant at Tramway Crossing is Food Lion, which occupies approximately 46.5% of the rentable square feet at Tramway Crossing. The current aggregate annual effective rent for the tenants of Tramway Crossing is approximately $545,000 and the current weighted-average remaining lease term for the tenants is approximately 4.0 years. The current weighted-average effective rental rate over the lease term, which is calculated as the annualized effective rent divided by the leased rentable square feet, is $9.15 per square foot.

The table below describes the average occupancy rate and the average effective annual rent per leased square foot for Tramway Crossing as of December 31 for the previous two years:

	2011			2010
Average occupancy rate		97.9	%		95.1	%
Average effective annual rent per rentable square foot	$	9.13		$	9.07

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We calculate average effective annual rental rate per leased square foot as the annual contractual base rental income, net of free rent, for the year divided by the average leased square feet. The previous owner of Tramway Crossing was unable to provide to us information relating to the occupancy rate and the average effective annual rental rate prior to 2010.

Based on the current condition of Tramway Crossing, we do not believe that it will be necessary to make significant renovations to Tramway Crossing. Our management believes that Tramway Crossing is adequately insured.

Westin Centre

On February 23, 2012, we, through the Joint Venture, purchased Westin Centre for approximately $6.05 million, exclusive of closing costs. The Joint Venture funded the purchase price with proceeds of $3.27 million from this offering and $2.78 million provided by the CBRE Global Investors. Westin Centre was constructed in 1996. Westin Centre was purchased from Westin Centre, LLC, a North Carolina limited liability company that is not affiliated with us, our advisor or our sub-advisor.

Westin Centre is 100% leased to 15 tenants. The largest tenant at Westin Centre is Food Lion, which occupies approximately 43.4% of the rentable square feet at Westin Centre. The current aggregate annual effective rent for the tenants of Westin Centre is approximately $635,000 and the current weighted-average remaining lease term for the tenants is approximately 3.2 years. The current weighted-average effective rental rate over the lease term, which is calculated as the annualized effective rent divided by the leased rentable square feet, is $9.50 per square foot.

The table below describes the average occupancy rate and the average effective annual rent per leased square foot for Westin Centre as of December 31 for the previous two years:

	2011			2010
Average occupancy rate		100.0	%		99.4	%
Average effective annual rent per rentable square foot	$	9.68		$	9.49

We calculate average effective annual rental rate per leased square foot as the annual contractual base rental income, net of free rent, for the year divided by the average leased square feet. The previous owner of Westin Centre was unable to provide to us information relating to the occupancy rate and the average effective annual rental rate prior to 2010.

Based on the current condition of Westin Centre, we do not believe that it will be necessary to make significant renovations to Westin Centre. Our management believes that Westin Centre is adequately insured.

Yield on Real Estate Investments

The weighted-average year-one yield of real estate properties we have acquired during the 12 months ending April 4, 2012 is approximately 8.4%. The year-one yield is equal to the estimated first-year net operating income of the property divided by the purchase price of the property, excluding closing costs and acquisition fees. Estimated first-year net operating income on our real estate investments is total estimated gross income (rental income, tenant reimbursements, parking income and other property-related income) derived from the terms of in-place leases at the time we acquire the property on a straight-line basis, less property and related expenses (property operating and maintenance expenses, management fees, property insurance and real estate taxes) based on the operating history of the property. Estimated first-year net operating income excludes other non-property income and expenses, interest expense from financings, depreciation and amortization and company-level general and administrative expenses. Historical operating income for these properties is not necessarily indicative of future operating results.

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Debt Facilities

We hold all of our debt obligations through the Joint Venture, in which we have a 54% interest. As of April 4, 2012, our debt-to-gross-real-estate-asset ratio, or the ratio of total debt to total purchase price of real estate assets, was approximately 39.6%. The following is a summary of all the Joint Venture’s debt facilities as of April 4, 2012:

Property and Related Loan	Outstanding Principal Balance	Maximum Loan Capacity	Interest Rate	Loan Type	Payments	Maturity Date
Lakeside Loan(1)	—	$6.13 million	One-month LIBOR plus 2.40% to 2.85%, depending upon amount outstanding and debt yield	First mortgage loan	Monthly interest only payments through July 1, 2012, followed by continued monthly interest payments and possible monthly payments of principal(2)	December 10, 2012(3)
Snow View Loan(1)	—	$8.57 million	One-month LIBOR plus 2.40% to 2.85%, depending upon amount outstanding and debt yield	First mortgage loan	Monthly interest only payments through July 1, 2012 followed by continued monthly interest payments and possible monthly payments of principal(4)	December 15, 2012(5)
St. Charles Loan(1)	$3.45 million	$6.75 million	One-month LIBOR plus 2.40% to 2.85%, depending upon amount outstanding and debt yield	First mortgage loan	Monthly interest only payments through January 1, 2013 followed by continued monthly interest payments and possible monthly payments of principal(6)	June 10, 2013(7)
Southampton Credit Facility	$5.92 million	$6.02 million	Daily LIBOR plus 2.25% to 2.50%, depending upon amount outstanding and debt yield	Revolving credit facility	Monthly interest only payments through April 30, 2013 followed by continued monthly interest payments and possible monthly payments of principal(8)	November 1, 2013(9)
Centerpoint Credit Facility	$4.85 million	$4.94 million	Daily LIBOR plus 2.25% to 2.50%, depending upon amount outstanding and debt yield	Revolving credit facility	Monthly interest only payments through April 30, 2013 followed by continued monthly interest payments and possible monthly payments of principal(10)	November 1, 2013(11)
Burwood Credit Facility	$11.92 million	$11.97 million	Daily LIBOR plus 2.25% to 2.50%, depending upon amount outstanding and debt yield	Revolving credit facility	Monthly interest only payments through April 30, 2013 followed by continued monthly interest payments and possible monthly payments of principal(12)	November 1, 2013(13)
Cureton Credit Facility	$8.88 million	$9.00 million	One-month LIBOR plus 2.25% to 2.50%, depending upon amount outstanding and debt yield	Revolving credit facility	Monthly interest only payments through July 31, 2013 followed by continued monthly interest payments and possible monthly payments of principal(14)	January 1, 2016
Tramway Credit Facility	—	$3.40 million	One-month LIBOR plus 2.40% to 2.60%, depending upon amount outstanding and debt yield	Revolving credit facility	Monthly interest only payments through October 31, 2013 followed by continued monthly interest payments and possible monthly payments of principal(15)	May 1, 2016
Westin Credit Facility	—	$3.74 million	One-month LIBOR plus 2.40% to 2.60%, depending upon amount outstanding and debt yield	Revolving credit facility	Monthly interest only payments through October 31, 2013 followed by continued monthly interest payments and possible monthly payments of principal(15)	May 1, 2016

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⁽¹⁾  The Lakeside Loan, the Snow View Loan, and the St. Charles Loan subject Lakeside Plaza, Snow View Plaza, and St. Charles Plaza to cross-collateral and cross-default provisions under separate and corresponding provisions of each loan. A wholly-owned subsidiary of the Joint Venture has guaranteed 25% of the Joint Venture’s obligations under the Lakeside Loan, the Snow View Loan, and the St. Charles Loan.

⁽²⁾  On or before July 1, 2012, total availability under the loan will be reduced by $675,000, and beginning on July 1, 2012 and continuing through the maturity date, availability will be reduced by $20,415 per month, which may require us to make monthly principal payments (depending on the then-outstanding borrowings under the loan), in addition to continued monthly interest payments. We have the option to prepay any outstanding amounts under the Lakeside Loan at any time in whole or in part without premium or penalty.

⁽³⁾  We may extend the maturity date of the Lakeside Loan to December 10, 2013 upon payment of an extension fee equal to 0.25% of the amount outstanding on December 10, 2012.

⁽⁴⁾  On or before July 1, 2012, total availability under the loan will be reduced by $940,000, and beginning on July 1, 2012 and continuing through the maturity date, availability will be reduced by $28,500 per month, which may require us to make monthly principal payments (depending on the then-outstanding borrowings under the loan), in addition to continued monthly interest payments. We have the option to prepay any outstanding amounts under the Snow View Loan at any time in whole or in part without premium or penalty.

⁽⁵⁾  We may extend the maturity date of the Snow View Loan to December 15, 2013 upon payment of an extension fee equal to 0.25% of the amount outstanding on December 15, 2012.

⁽⁶⁾  On or before January 1, 2013, total availability under the loan will be reduced by $742,500, and beginning on January 1, 2013 and continuing through the maturity date, availability will be reduced by $22,500 per month, which may require us to make monthly principal payments (depending on the then-outstanding borrowings under the loan), in addition to continued monthly interest payments. We have the option to prepay any outstanding amounts under the St. Charles Loan at any time in whole or in part without premium or penalty.

⁽⁷⁾  We may extend the maturity date of the St. Charles Loan to June 10, 2014 upon payment of an extension fee equal to 0.25% of the amount outstanding on June 10, 2013.

⁽⁸⁾  Beginning on May 1, 2013 and continuing through the maturity date, the Southampton Credit Facility will be reduced by $9,750 per month, which may require us to make monthly principal payments (depending on the then-outstanding borrowings under the credit facility), in addition to continued monthly interest payments. We have the option to prepay any outstanding amounts under the Southampton Credit Facility at any time in whole or in part without premium or penalty. A wholly-owned subsidiary of the Joint Venture has guaranteed 25% of the Joint Venture’s obligations under the Southampton Credit Facility.

⁽⁹⁾  We may extend the maturity date of the Southampton Credit Facility to October 10, 2014 upon payment of an extension fee equal to 0.25% of the amount outstanding under the credit facility on November 1, 2013.

⁽¹⁰⁾  Beginning on May 1, 2013 and continuing through the maturity date, the Centerpoint Credit Facility will be reduced by $8,000 per month, which may require us to make monthly principal payments (depending on the then-outstanding borrowings under the credit facility), in addition to continued monthly interest payments. We have the option to prepay any outstanding amounts under the Centerpoint Credit Facility at any time in whole or in part without premium or penalty. A wholly-owned subsidiary of the Joint Venture has guaranteed 25% of the Joint Venture’s obligations under the Centerpoint Credit Facility.

⁽¹¹⁾  We may extend the maturity date of the Centerpoint Credit Facility to November 1, 2014 upon payment of an extension fee equal to 0.25% of the amount outstanding on November 1, 2013.

⁽¹²⁾  Beginning on May 1, 2013 and continuing through the maturity date, the Burwood Credit Facility will be reduced by $19,660 per month, which may require us to make monthly principal payments (depending on the then-outstanding borrowings under the credit facility), in addition to continued monthly interest payments. We have the option to prepay any outstanding amounts under the Burwood Credit Facility at any time in whole or in part without premium or penalty. A wholly-owned subsidiary of the Joint Venture has guaranteed 25% of the Joint Venture’s obligations under the Burwood Credit Facility.

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⁽¹³⁾  We may extend the maturity date of the Burwood Credit Facility to November 1, 2014 upon payment of an extension fee equal to 0.25% of the amount outstanding on November 1, 2013.

⁽¹⁴⁾  Beginning on August 1, 2013 and continuing through the maturity date, the Cureton Credit Facility will be reduced by $14,000 per month, which may require us to make monthly principal payments (depending on the then-outstanding borrowings under the credit facility), in addition to continued monthly interest payments. We have the option to prepay any outstanding amounts under the Cureton Credit Facility at any time in whole or in part without premium or penalty. A wholly-owned subsidiary of the Joint Venture has guaranteed 25% of the Joint Venture’s obligations under the Cureton Credit Facility.

⁽¹⁵⁾  Beginning on November 1, 2013 and continuing through the maturity date, the Tramway Credit Facility and Westin Credit Facility will be reduced by $5,665 and $6,226 per month, respectively, which may require us to make monthly principal payments (depending on the then-outstanding borrowings under each credit facility), in addition to continued monthly interest payments. We have the option to prepay any outstanding amounts under the Tramway Credit Facility and Westin Credit Facility at any time in whole or in part without premium or penalty. A wholly-owned subsidiary of the Joint Venture has guaranteed 25% of the Joint Venture’s obligations under both facilities.

Selected Financial Data

The following selected financial data should be read in conjunction with our consolidated financial statements and the notes thereto and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in our Annual Report on Form 10-K for the year ended December 31, 2011, incorporated by reference into this prospectus:

	As of December 31,
	2011		2010		2009
(in thousands)
Balance Sheet Data:
Investment in real estate assets, net	$	69,492	$	19,061	$	—
Acquired intangible lease assets, net		6,799		2,341		—
Cash and cash equivalents		6,969		707		200
Other assets		1,932		604		943
Total assets		85,192		22,713		1,143
Mortgage loans payable		46,788		14,695		—
Notes payable – affiliates		—		600		—
Accounts payable – affiliates		8,395		5,542		943
Other liabilities		2,824		719		—
Total liabilities		58,007		21,556		943
Equity		27,185		1,157		200
Total liabilities and equity	$	85,192	$	22,713	$	1,143

	For the Year  Ended December 31,
	2011			2010			2009
(in thousands, except share and per share data)
Operating Data:
Total revenues	$	3,529		$	98		$	—
Property operating expenses		(631	)		(32	)		—
Real estate tax expense		(507	)		(18	)		—
General and administrative		(845	)		(228	)		—
Acquisition-related expenses		(1,751	)		(467	)		—
Depreciation and amortization		(1,500	)		(81	)		—
Operating loss		(1,705	)		(710	)		—
Other income		—			1			—
Interest expense		(811	)		(38	)		—
Net loss	$	(2,516	)	$	(747	)	$	—

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	For the Year  Ended December 31,
	2011			2010			2009
Net loss allocable to non-controlling interests		152			—			—
Net loss after allocation to non-controlling interests	$	(2,364	)	$	(747	)	$	—
Cash Flow Data:
Cash flows provided by operating activities	$	593		$	201		$	—
Cash flows used in investing activities	$	(56,149	)	$	(21,249	)	$	—
Cash flows provided by financing activities	$	61,818		$	21,555		$	200
Per Share Data:
Net loss attributable to common shareholders per share – basic and diluted	$	(1.57	)	$	(4.44	)		N/A
Weighted average distributions per share declared	$	0.65		$	0.22		$	—
Weighted average shares outstanding – basic and diluted		1,503,477			168,419			20,000

Distribution Information

During 2010, we declared distributions based on daily record dates for each day during the period from December 1, 2010 through December 31, 2010. During 2011, we declared distributions based on daily record dates for each day during the period from January 1, 2011 through December 31, 2011. During 2012, we have declared distributions based on daily record dates for each day during the period from January 1, 2012 through May 31, 2012. All declared distributions equal a daily amount of $0.00178082 (0.178082 cents) per share of common stock. If this rate were paid each day for a 365-day period, it would equal a 6.5% annualized rate based on a purchase price of $10.00 per share. A portion of each distribution may constitute a return of capital for tax purposes. There is no assurance that we will continue to declare daily distributions at this rate. Distributions declared, distributions paid and cash flows provided by (used in) operating activities were as follows for the quarters ended March 31, 2011, June 30, 2011, September 30, 2011, and December 31, 2011 (in thousands, except per share amounts):

	Distributions Paid									Distributions Declared				Sources of Distributions Paid
2011	Cash		Distributions Reinvested (DRIP)		Total		Cash Provided by (Used in) Operating Activities			Total Distributions Declared		Distributions Declared Per Share		Amount Paid from Operating Activities/ Percent of Total Distributions Paid			Amount  Paid from Sub-Advisor Advances/ Percent of Total Distributions Paid
First Quarter	$	104	$	17	$	121	$	116		$	144	$	0.1625	$	116 / 96	%	$	5 / 4	%
Second Quarter	$	164	$	26	$	190	$	(269	)	$	201	$	0.1625	$	0 / 0	%	$	190 / 100	%
Third Quarter	$	194	$	38	$	232	$	584		$	253	$	0.1625	$	232 / 100	%	$	0 / 0	%
Fourth Quarter	$	253	$	77	$	330	$	162		$	380	$	0.1625	$	162 / 49	%	$	168 / 51	%

For the year ended December 31, 2011 and for the period from our inception through December 31, 2011, we paid total distributions of approximately $873,000, which includes approximately $158,000 reinvested through our dividend reinvestment plan. These distributions were funded from operations and advances from Phillips Edison Sub-Advisor (without any corresponding issuance of equity to Phillips Edison Sub-Advisor). For the year ended December 31, 2011 and for the period from our inception through December 31, 2011, our funds from operations, or FFO, were $(948,000) and $(1,647,000), respectively. For a discussion of how we calculate FFO and why our management considers it a useful measure of REIT operating performance, as well as a reconciliation of FFO to our net loss, please see “Funds from Operations and Modified Funds from Operations” below.

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Net Tangible Book Value of our Shares

In connection with this ongoing offering of shares of our common stock, we are providing information about our net tangible book value per share. Our net tangible book value is a rough approximation of value calculated simply as gross book value of real estate assets minus total liabilities, divided by the total number of shares of common stock outstanding. Net tangible book value is used generally as a conservative measure of net worth that we do not believe reflects our estimated value per share. It is not intended to reflect the value of our assets upon an orderly liquidation of the company in accordance with our investment objectives. Our net tangible book value reflects dilution in the value of our common stock from the issue price as a result of (i) operating losses, which reflect accumulated depreciation and amortization of real estate investments, (ii) fees paid in connection with our public offering, including selling commissions and marketing fees re-allowed by our dealer manager to participating broker dealers, and (iii) distributions paid. As of December 31, 2011, our net tangible book value per share was $5.21. To the extent we are able to raise substantial proceeds in this offering, the expenses that cause dilution of the net tangible value per share are expected to decrease on a per share basis, resulting in increases in the net tangible book value per share. The offering price of shares under our primary offering (ignoring purchase price discounts for certain categories of purchasers) at December 31, 2011 was $10.00 per share.

Our offering price was not established on an independent basis and bears no relationship to the net value of our assets. Further, even without depreciation in the value of our assets, the other factors described above with respect to the dilution in the value of our common stock are likely to cause our offering price to be higher than the amount you would receive per share if we were to liquidate at this time.

Funds from Operations and Modified Funds from Operations

Funds from operations, or FFO, is a non-GAAP performance financial measure that is widely recognized as a measure of REIT operating performance. We use FFO as defined by the National Association of Real Estate Investment Trusts to be net income (loss), computed in accordance with GAAP excluding extraordinary items, as defined by GAAP, and gains (or losses) from sales of property (including deemed sales and settlements of pre-existing relationships), plus depreciation and amortization on real estate assets and impairment charges, and after related adjustments for unconsolidated partnerships, joint ventures and subsidiaries and non-controlling interests. We believe that FFO is helpful to our investors and our management as a measure of operating performance because it excludes real estate-related depreciation and amortization, gains and losses from property dispositions, impairment charges, and extraordinary items, and as a result, when compared year to year, reflects the impact on operations from trends in occupancy rates, rental rates, operating costs, development activities, general and administrative expenses, and interest costs, which are not immediately apparent from net income. Historical cost accounting for real estate assets in accordance with GAAP implicitly assumes that the value of real estate and intangibles diminishes predictably over time. Since real estate values have historically risen or fallen with market conditions, many industry investors and analysts have considered the presentation of operating results for real estate companies that use historical cost accounting alone to be insufficient. As a result, our management believes that the use of FFO, together with the required GAAP presentations, is helpful for our investors in understanding our performance. In particular, because GAAP impairment charges are not allowed to be reversed if the underlying fair values improve or because the timing of impairment charges may lag the onset of certain operating consequences, we believe FFO provides useful supplemental information related to current consequences, benefits and sustainability related to rental rate, occupancy and other core operating fundamentals. Factors that impact FFO include start-up costs, fixed costs, delay in buying assets, lower yields on cash held in accounts, income from portfolio properties and other portfolio assets, interest rates on acquisition financing and operating expenses. In addition, FFO will be affected by the types of investments in our targeted portfolio which will consist of, but is not limited to, necessity-based neighborhood and community shopping centers, first- and second-priority mortgage loans, mezzanine loans, bridge and other loans, mortgage-backed securities, collateralized debt obligations, and debt securities of real estate companies. Investors should note, however, that determinations of whether impairment charges have been incurred are based partly on anticipated operating performance, because estimated undiscounted cash flows from a property, including estimated future net rental and lease revenues, net proceeds on the sale of the property, and certain other ancillary cash flows, are taken into account in determining whether an impairment charge has been incurred. While impairment charges are excluded from the calculation of FFO as described above, as impairments are based on estimated future undiscounted cash flows, investors are cautioned that we may not recover any impairment charges. FFO is not a useful measure in evaluating net asset value because impairments are taken into account in determining net asset value but not in determining FFO.

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Since FFO was promulgated, GAAP has expanded to include several new accounting pronouncements, such that management and many investors and analysts have considered the presentation of FFO alone to be insufficient. Accordingly, in addition to FFO, we use modified funds from operations, or MFFO, as defined by the Investment Program Association (“IPA”). MFFO excludes from FFO the following items:

(1) acquisition fees and expenses;

(2) straight-line rent amounts, both income and expense;

(3) amortization of above- or below-market intangible lease assets and liabilities;

(4) amortization of discounts and premiums on debt investments;

(5) gains or losses from the early extinguishment of debt;

(6) gains or losses on the extinguishment or sales of hedges, foreign exchange, securities and other derivatives holdings except where the trading of such instruments is a fundamental attribute of our operations;

(7) gains or losses related to fair-value adjustments for derivatives not qualifying for hedge accounting, including interest rate and foreign exchange derivatives;

(8) gains or losses related to consolidation from, or deconsolidation to, equity accounting;

(9) gains or losses related to contingent purchase price adjustments; and

(10) adjustments related to the above items for unconsolidated entities in the application of equity accounting.

We believe that MFFO is helpful in assisting management and investors assess the sustainability of operating performance in future periods and, in particular, after our offering and acquisition stages are complete, primarily because it excludes acquisition expenses that affect property operations only in the period in which the property is acquired. Thus, MFFO provides helpful information relevant to evaluating our operating performance in periods in which there is no acquisition activity.

As explained below, management’s evaluation of our operating performance excludes the items considered in the calculation based on the following economic considerations. Many of the adjustments in arriving at MFFO are not applicable to us. Nevertheless, we explain below the reasons for each of the adjustments made in arriving at our MFFO definition.

• Acquisition fees and expenses. In evaluating investments in real estate, including both business combinations and investments accounted for under the equity method of accounting, management’s investment models and analyses differentiate costs to acquire the investment from the operations derived from the investment. Prior to 2009, acquisition costs for both of these types of investments were capitalized under GAAP; however, beginning in 2009, acquisition costs related to business combinations are expensed. Both of these acquisition-related costs have been and will continue to be funded from the proceeds of our offering and generally not from operations. We believe by excluding expensed acquisition costs, MFFO provides useful supplemental information that is comparable for each type of real estate investment and is consistent with management’s analysis of the investing and operating performance of our properties. Acquisition fees and expenses include those paid to AR Capital Advisor, Phillips Edison Sub-Advisor or third parties.

• Adjustments for straight-line rents and amortization of discounts and premiums on debt investments. In the proper application of GAAP, rental receipts and discounts and premiums on debt investments are allocated to periods using various systematic methodologies. This application may result in income recognition that could be significantly different than underlying contract terms. By adjusting for these items, MFFO provides useful supplemental information on the realized economic impact of lease terms and debt investments and aligns results with management’s analysis of operating performance.

• Adjustments for amortization of above or below market intangible lease assets. Similar to depreciation and amortization of other real estate related assets that are excluded from FFO, GAAP implicitly assumes that the value of intangibles diminishes ratably over time and that these charges be recognized

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currently in revenue. Since real estate values and market lease rates in the aggregate have historically risen or fallen with market conditions, management believes that by excluding these charges, MFFO provides useful supplemental information on the performance of the real estate.

• Gains or losses related to fair-value adjustments for derivatives not qualifying for hedge accounting and gains or losses related to contingent purchase price adjustments. Each of these items relates to a fair value adjustment, which is based on the impact of current market fluctuations and underlying assessments of general market conditions and specific performance of the holding, which may not be directly attributable to current operating performance. As these gains or losses relate to underlying long-term assets and liabilities, management believes MFFO provides useful supplemental information by focusing on the changes in core operating fundamentals rather than changes that may reflect anticipated gains or losses.

• Adjustment for gains or losses related to early extinguishment of hedges, debt, consolidation or deconsolidation and contingent purchase price. Similar to extraordinary items excluded from FFO, these adjustments are not related to continuing operations. By excluding these items, management believes that MFFO provides supplemental information related to sustainable operations that will be more comparable between other reporting periods and to other real estate operators.

By providing MFFO, we believe we are presenting useful information that also assists investors and analysts to better assess the sustainability of our operating performance after our offering and acquisition stages are completed. We also believe that MFFO is a recognized measure of sustainable operating performance by the non-listed REIT industry. MFFO is useful in comparing the sustainability of our operating performance after our offering and acquisition stages are completed with the sustainability of the operating performance of other real estate companies that are not as involved in acquisition activities. However, investors are cautioned that MFFO should only be used to assess the sustainability of our operating performance after our offering and acquisition stages are completed, as it excludes acquisition costs that have a negative effect on our operating performance during the periods in which properties are acquired. Acquisition costs also adversely affect our book value and equity.

FFO or MFFO should not be considered as an alternative to net income (loss), nor as an indication of our liquidity, nor is either indicative of funds available to fund our cash needs, including our ability to fund distributions. In particular, as we are currently in the acquisition phase of our life cycle, acquisition-related costs and other adjustments that are increases to MFFO are, and may continue to be, a significant use of cash. MFFO has limitations as a performance measure in an offering such as ours where the price of a share of common stock is a stated value and there is no net asset value determination during the offering stage and for a period thereafter. Accordingly, both FFO and MFFO should be reviewed in connection with other GAAP measurements. Our FFO and MFFO as presented may not be comparable to amounts calculated by other REITs.

The following section presents our calculation of FFO and MFFO and provides additional information related to our operations (in thousands, except per share amounts). As a result of the timing of the commencement of this offering and our active real estate operations, FFO and MFFO are not relevant to a discussion comparing operations for the two periods presented. We expect revenues and expenses to increase in future periods as we raise additional offering proceeds and use them to acquire additional investments.

NET LOSS TO FFO RECONCILIATION

($000’s)

	Three months  ended December 31, 2011			Year ended December 31, 2011			Year ended December 31, 2010			Cumulative since Inception (1)
Net loss attributable to our shareholders	$	(1,071	)	$	(2,364	)	$	(747	)	$	(3,111	)
Depreciation and amortization		647			1,500			81			1,581
Non-controlling interests		(117	)		(117	)		—			(117	)
Funds from operations	$	(541	)	$	(981	)	$	(666	)	$	(1,647	)
Acquisition-related expenses		1,011			1,751			467			2,218
Amortization of above/below market leases		98			312			17			329
Straight-line rental income		(45	)		(79	)		—			(79	)

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	Three months  ended December 31, 2011			Year ended December 31, 2011			Year ended December 31, 2010			Cumulative since Inception (1)
Non-controlling interests		(124	)		(124	)		—			(124	)
MFFO	$	399		$	879		$	(182	)	$	697

⁽¹⁾  Inception was September 17, 2010

Share Repurchase Program

Our share repurchase program generally requires you to hold your shares for at least one year prior to submitting them for repurchase by us. Our share repurchase program also contains numerous restrictions on your ability to sell your shares to us. During any calendar year, we may repurchase no more than 5.0% of the weighted-average number of shares outstanding during the prior calendar year. Further, the cash available for redemption on any particular date will generally be limited to the proceeds from our dividend reinvestment plan during the period consisting of the preceding four fiscal quarters for which financial statements are available, less any cash already used for repurchases during the same period; however, subject to the limitations described above, we may use other sources of cash at the discretion of our board of directors. These limitations do not apply to shares repurchased in conjunction with a stockholder’s death, “determination of incompetence” or “qualifying disability.” We may amend, suspend or terminate the program at any time upon 30 days’ notice.

During the year ended December 31, 2011, there were 5,630 shares repurchased for $56,300 under the share repurchase program. There were no additional shares tendered for repurchase that we did not repurchase during the year ended December 31, 2011. There were no shares repurchased during the year ended December 31, 2010.

Fees Earned by and Expenses Reimbursable to Our Advisor, Our Sub-Advisor, Our Dealer Manager and Their Affiliates

Summarized below are the fees earned by and expenses reimbursable to our advisor, our sub-advisor, our dealer manager and their affiliates for the years ended December 31, 2011 and December 31, 2010 and any related amounts payable as of December 31, 2011 and December 31, 2010 (all amounts in thousands):

	Amount
Form of Compensation	Incurred in the Year ended December 31,					Payable (Receivable) as of December 31,
	2011			2010		2011			2010
Selling commissions(1)	$	1,014		$	—	$	—		$	—
Dealer manager fee(2)		350			—		—			—
Reimbursement of organization and offering expenses		2,362			3,847		7,229			4,790
Acquisition fees		356			210		(44	)		210
Debt financing fee		180			110	��	(19	)		110
Asset management fee		63	(3)		—		63			—
Property management fee		157			—		21			—
Reimbursement of other operating expenses		761			432		1,145			432

⁽¹⁾  Our dealer manager reallows 100% of commissions earned to participating broker-dealers.

⁽²⁾  Our dealer manager reallows a portion of the dealer manager fee to participating broker-dealers.

⁽³⁾  We incurred total asset management fees of $347,000 during the year ended December 31, 2011; however, our advisor and sub-advisor waived $284,000 of these asset management fees.

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PROSPECTUS UPDATES

Prospectus Summary

Acquisition Expenses

The total of our acquisition fees and acquisition expenses payable with respect to a particular investment are limited to 4.5% of the contract purchase price of each property or 4.5% of the amount advanced for a loan or other investment. However, once we have substantially invested all of the proceeds of this offering, we expect our acquisition expenses to be approximately 0.5% of the purchase price of each property and 0.5% of the amount advanced for each loan or other investment. This information supersedes the information currently contained in the portion of the management compensation table related to acquisition expenses in the “Prospectus Summary” on page 12 of the prospectus dated November 22, 2011.

Risk Factors

The following risk factors revise and supplement, as appropriate, the risk factors included in our prospectus under the heading “Risk Factors – Risks Related to This Offering and Our Corporate Structure.”

The offering price of our shares was not established in reliance on a valuation of our assets and liabilities; the actual value of your investment may be substantially less than what you pay. We may use the most recent price paid to acquire a share in this offering or a follow-on public offering as the estimated value of our shares until we have completed our offering stage. Even when AR Capital Advisor begins to use other valuation methods to estimate the value of our shares, the value of our shares will be based upon a number of assumptions that may not be accurate or complete.

We established the offering price of our shares on an arbitrary basis. The selling price of our shares bears no relationship to our book or asset values or to any other established criteria for valuing shares. Because the offering price is not based upon any valuation (independent or otherwise), the offering price is likely to be higher than the proceeds that you would receive upon liquidation or a resale of your shares if they were to be listed on an exchange or actively traded by broker-dealers, especially in light of the upfront fees that we pay in connection with the issuance of our shares.

To assist FINRA members and their associated persons that participate in this offering, pursuant to FINRA Rule 2310, we disclose in each annual report distributed to stockholders a per share estimated value of our shares, the method by which it was developed, and the date of the data used to develop the estimated value. For this purpose, AR Capital Advisor estimated the value of our common shares as $10.00 per share as of December 31, 2011. The basis for this valuation is the fact that the offering price of our shares of common stock in this offering is $10.00 per share (ignoring purchase price discounts for certain categories of purchasers). AR Capital Advisor has indicated that it intends to use the most recent price paid to acquire a share in this offering (ignoring purchase price discounts for certain categories of purchasers) or a follow-on public offering as its estimated per share value of our shares until we have completed our offering stage. We will consider our offering stage complete when we are no longer publicly offering equity securities – whether through this offering or follow-on public offerings – and have not done so for up to 18 months. If our board of directors determines that it is in our best interest, we may conduct follow-on offerings upon the termination of this offering. Our charter does not restrict our ability to conduct offerings in the future. (For purposes of this definition, we do not consider a “public equity offering” to include offerings on behalf of selling stockholders or offerings related to a dividend reinvestment plan, employee benefit plan or the redemption of interests in our operating partnership.)

Although this initial estimated value represents the most recent price at which most investors are willing to purchase shares in this offering, this reported value is likely to differ from the price that a stockholder would receive in the near term upon a resale of his or her shares or upon a liquidation of the our assets because (i) there is no public trading market for the shares at this time; (ii) the $10.00 primary offering price involves the payment of underwriting compensation and other directed selling efforts, which payments and efforts are likely to produce a higher sale price than could otherwise be obtained; (iii) estimated value does not reflect, and is not derived from, the fair market value of our assets because the amount of proceeds available for investment from our primary public offering is net of selling commissions, dealer manager fees, other organization and offering costs and acquisition and fees and expenses; (iv) the estimated value does not take into account how market fluctuations affect the value of our investments, including how the current disruptions in the financial and real estate markets may affect the values of our investments; and (v) the estimated value does not take into account how developments related to individual assets may have increased or decreased the value of our portfolio.

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When determining the estimated value of our shares by methods other than the last price paid to acquire a share in an offering, AR Capital Advisor, or another firm we choose for that purpose, will estimate the value of our shares based upon a number of assumptions that may not be accurate or complete. Accordingly, these estimates may or may not be an accurate reflection of the fair market value of our investments and will not likely represent the amount of net proceeds that would result from an immediate sale of our assets.

The actual value of shares that we repurchase under our share repurchase program may be substantially less than what we pay.

Under our share repurchase program, shares may be repurchased at varying prices depending on (a) the number of years the shares have been held, (b) the purchase price paid for the shares and (c) whether the redemptions are sought upon a stockholder’s death, qualifying disability or determination of incompetence. The maximum price that may be paid under the program is $10.00 per share, which is the offering price of our shares of common stock in the primary portion of this offering (ignoring purchase price discounts for certain categories of purchasers) and, as described above, the initial estimated value of our common shares disclosed to assist FINRA members and their associated persons that participate in this offering, pursuant to FINRA Rule 2310. Although this initial estimated value represents the most recent price at which most investors are willing to purchase shares in this primary offering, this reported value is likely to differ from the price at which a stockholder could resell his or her shares for the reasons discussed in the risk factor above. Thus, when we repurchase shares of our common stock at $10.00 per share, the actual value of the shares that we repurchase is likely to be less, and the repurchase is likely to be dilutive to our remaining stockholders. Even at lower repurchase prices, the actual value of the shares may be substantially less than what we pay and the repurchase may be dilutive to our remaining stockholders.

If we pay distributions from sources other than our funds from operations, we may not be able to sustain our distribution rate and we may have fewer funds available for investment in properties and other assets and our stockholders’ overall returns may be reduced.

Our organizational documents permit us to pay distributions from any source without limit. If we fund distributions from financings or the net proceeds from this offering, we will have fewer funds available for investment in real estate properties and other real estate-related assets and our stockholders’ overall returns may be reduced. At times, we may be forced to borrow funds to pay distributions during unfavorable market conditions or during periods when funds from operations are needed to make capital expenditures and other expenses, which could increase our operating costs. We may also fund such distributions from advances or contributions from our sponsors or from any deferral or waiver of fees by our advisor and sub-advisor.Furthermore, if we cannot cover our distributions with funds from operations, we may be unable to sustain our distribution rate. For the four quarters ended December 31, 2011, approximately 68% of our distributions was covered by GAAP cash flow from operations and the remaining 32.0% was covered by contributions from our sub-advisor.

Management

The following biography of William M. Kahane replaces the biography included in our prospectus under the heading “Management – Executive Officers and Directors.”

William M. Kahane – (Director) Mr. Kahane has served as one of our directors since December 2009. He has also served as a director of American Realty Capital New York Recovery REIT, Inc. (“NYRR”) since its formation in October 2009 and also served as president and treasurer of NYRR since its formation in October 2009 until March 2012. He has been active in the structuring and financial management of commercial real estate investments for over 35 years. Mr. Kahane has served as an executive officer and director of American Realty Capital Healthcare Trust (“ARCT”), the ARCT advisor and the ARCT property manager from their formation in August 2007. Mr. Kahane currently serves as a director of American Realty Capital – Retail Centers of America, Inc. (“ARC RCA”) and the ARC RCA advisor since their formation in July 2010 and May 2010, respectively and also served as an executive officer of ARC RCA and the ARC RCA advisor until March 2012. Mr. Kahane currently serves as a director of American Realty Capital Healthcare Trust, Inc. (“ARC HT”), the ARC HT advisor and the ARC HT property manager since their formation in August 2010 and also served as an executive officer of ARC HT, the ARC HT advisor and the ARC HT property manager until March 2012. Mr. Kahane served as an executive officer of ARCT III, the ARCT III advisor, and the ARCT III property manager from their formation in October 2010 until April 2012. Mr. Kahane served as an executive officer and director of American Realty Capital Daily Net Asset Value Trust, Inc. (“ARC DNAV”), the ARC DNAV advisor and the ARC DNAV property manager since their formation in September 2010 until March 2012. Mr. Kahane served as an executive officer and director of American Realty Capital Properties, Inc. (“ARCP”) and the ARCP advisor since their formation in December 2010 and November 2010, respectively, until March 2012. Mr. Kahane also has been the interested director of Business Development Corporation of America since its formation in May 2010 and, until March 2012, was chief operating officer. Mr. Kahane has served as a member of the investment committee of Aetos Capital Asia Advisors, a $3 billion series of opportunistic funds focusing on assets primarily in Japan and China, since 2008. Mr. Kahane began his career as a real estate lawyer practicing in the public and private sectors from 1974 to 1979. From 1981 to 1992, Mr. Kahane worked at Morgan Stanley & Co., specializing in real estate, becoming a managing director in 1989. In 1992, Mr. Kahane left Morgan Stanley to establish a real estate advisory and asset sales business known as Milestone Partners which continues to operate and of which Mr. Kahane is currently the chairman. Mr. Kahane worked very closely with Nicholas Schorsch while a trustee at AFRT (April 2003 to August 2006), during which time Mr. Kahane served as chairman of the finance committee of AFRT’s board of trustees. Mr. Kahane has been a managing director of GF Capital Management & Advisors LLC, a New

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York-based merchant banking firm, where he has directed the firm’s real estate investments since 2001. GF Capital offers comprehensive wealth management services through its subsidiary TAG Associates LLC, a leading multi-client family office and portfolio management services company with approximately $5 billion of assets under management. Mr. Kahane also was on the board of directors of Catellus Development Corp., a NYSE growth-oriented real estate development company, where he served as chairman. Mr. Kahane received a B.A. from Occidental College, a J.D. from the University of California, Los Angeles Law School and an MBA from Stanford University’s Graduate School of Business.

The following biography of Edward M. Weil, Jr. replaces the biography included in our prospectus under the heading “Management – Our Sponsors.”

Edward M. Weil, Jr. has been the chief executive officer of Realty Capital Securities, LLC, our dealer manager, since December 2010. Mr. Weil has served as president, treasurer and secretary of NYRR since March 2012. Prior to such time, Mr. Weil served as executive vice president and secretary of NYRR since its formation in October 2009. Mr. Weil has nine years of real estate experience. Mr. Weil has also been an executive officer of NYRR’s advisor and property manager since their formation in November 2009. Mr. Weil served as an executive officer of ARCT, the ARCT advisor and the ARCT property manager from their formation in August 2007 through March 2012. Mr. Weil has served as an executive officer of ARC RCA and the ARC RCA advisor since their formation in July 2010 and May 2010, respectively. Mr. Weil has served as an executive officer of ARC HT, the ARC HT advisor and the ARC HT property manager since their formation in August 2010. Mr. Weil has served as an executive officer, and, beginning in March 2012, a director, of ARC DNAV, and has served as an executive officer of the ARC DNAV advisor and the ARC DNAV property manager since their formation in September 2010. Mr. Weil has served as a director of ARCT III since February 2012 and has served as an executive officer of ARCT III, the ARCT III advisor and the ARCT III property manager since their formation in October 2010. Mr. Weil has served as an executive officer, and, beginning in March 2012, a director, of ARCP since its formation in December 2010 and has served as an executive officer of the ARCP advisor since its formation in November 2010. Mr. Weil has been a director and an executive officer of ARC Global DNAV, the ARC Global DNAV advisor and the ARC Global DNAV property manager since their formation in July 2011, July 2011 and January 2012, respectively. Mr. Weil has been a director and an executive officer of ARCT IV, the ARCT IV advisor and the ARCT IV property manager since their formation in February 2012. Mr. Weil was formerly the Senior Vice President of Sales and Leasing for American Financial Realty Trust (AFRT, from April 2004 to October 2006), where he was responsible for the disposition and leasing activity for a 33 million square foot portfolio of properties. Under the direction of Mr. Weil, his department was the sole contributor in the increase of occupancy and portfolio revenue through the sales of over 200 properties and the leasing of over 2.2 million square feet, averaging 325,000 square feet of newly executed leases per quarter. After working at AFRT, from October 2006 to May 2007, Mr. Weil was managing director of Milestone Partners Limited and prior to joining AFRT, from 1987 to April 2004, Mr. Weil was president of Plymouth Pump & Systems Co. Mr. Weil attended George Washington University. Mr. Weil holds FINRA Series 7, 24 and 63 licenses.

Prior Performance Summary

The following information supersedes the disclosure in the prospectus under the heading “Prior Performance Summary.”

The information presented in this section represents the historical experience of all real estate programs managed over the last ten years by Messrs. Phillips and Edison, our individual Phillips Edison sponsors, and Messrs. Schorsch and Kahane, our individual AR Capital sponsors. In assessing the relative importance of this information with respect to a decision to invest in this offering, you should keep in mind that we will rely primarily on affiliates of our Phillips Edison sponsor to identify acquisitions and manage our portfolio and we will rely primarily on affiliates of our AR Capital sponsor with respect to our capital-raising efforts, although both AR Capital Advisor and Phillips Edison Sub-Advisor will jointly participate in major decisions as described in this prospectus at “Management – Our Advisor and Sub-Advisor.” You should also note that only programs sponsored by Phillips Edison have invested in our targeted portfolio of grocery-anchored neighborhood shopping centers.

Unless otherwise indicated, the information presented below with respect to the historical experience of Phillips Edison and the private real estate funds sponsored by Phillips Edison and of AR Capital and the prior programs sponsored by AR Capital is as of the 10-years ended December 31, 2011. By purchasing shares in this offering, you will not acquire any ownership interest in any funds to which the information in this section relates and you should not assume that you will experience returns, if any, comparable to those experienced by the investors in

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the real estate funds discussed. Further, the private funds discussed in this section were conducted through privately held entities that were subject neither to the up-front commissions, fees and expenses associated with this offering nor all of the laws and regulations that will apply to us as a publicly offered REIT.

We intend to conduct this offering in conjunction with future offerings by one or more public and private real estate entities sponsored by Phillips Edison and AR Capital and their respective affiliates. To the extent that such entities have the same or similar objectives as ours or involve similar or nearby properties, such entities may be in competition with the properties acquired by us. See the section entitled “Conflicts of Interest” in this prospectus for additional information.

Appendix A includes five tables with information about the public programs and private funds discussed in this section. They present information with respect to (1) the experience of our sponsors in raising and investing in funds, (2) the compensation paid by prior funds to the sponsor and its affiliates, (3) the operating results of prior funds, (4) sales or disposals of properties by prior funds, and (5) results of completed funds. Table VI located in Part II of the registration statement, which is not part of this prospectus, describes acquisitions of properties by prior programs and funds. We will provide a copy of Table VI to you upon written request and without charge. In all cases, the tables presenting information about the historical experience of programs sponsored by Phillips Edison appear first, followed by tables summarizing similar information for AR Capital.

Private Programs Sponsored by Phillips Edison

Since 1991, Michael C. Phillips and Jeffrey S. Edison, have partnered to acquire, manage and reposition necessity-driven retail properties, primarily grocery-anchored neighborhood and community shopping centers across the United States. Phillips Edison has operated with financial partners through both property-specific and multi-asset discretionary funds, and to date, Phillips Edison has sponsored six private real estate funds and raised approximately $600 million of equity from high-net-worth individuals and institutional investors.

During the 10-year period ended December 31, 2011, Phillips Edison managed six private real estate funds, all of which were multi-investor, commingled funds. All of these private funds were limited partnerships for which affiliates of Messrs. Phillips and Edison act or acted as general partner. In all cases, affiliates of Messrs. Phillips and Edison had responsibility for acquiring, investing, managing, leasing, developing and selling the real estate and real estate-related assets of each of the funds.

Two of the six private real estate funds managed by Phillips Edison raised approximately $395 million of equity capital from 12 institutional investors during the 10-year period ended December 31, 2011. The institutional investors investing in the private funds include public pension funds, sovereign wealth funds, insurance companies, financial institutions, endowments and foundations. For more information regarding the experience of our sponsors in raising funds from investors, see Table I and Table II of the Prior Performance Tables contained in Appendix A of this supplement.

During the 10-year period ended December 31, 2011, Phillips Edison acquired 241 real estate investments and invested over $1.8 billion in these assets (purchase price) on behalf of the six private funds raising capital for new investments during this period. Debt financing was used in acquiring the properties in all of these six private funds.

Four of the six private funds managed by Phillips Edison during the 10-year period ended December 31, 2011 have or had investment objectives that are similar to ours. Like ours, their primary investment objectives are to provide investors with stable returns, to preserve and return their capital contributions and to realize growth in the value of their investments. In addition, investments in real estate and real estate-related assets involve similar assessments of the risks and rewards of the operation of the underlying real estate and financing thereof as well as an understanding of the real estate and real estate-finance markets. For each of the private funds, Phillips Edison has focused on acquiring a diverse portfolio of real estate investments. Phillips Edison has typically diversified the portfolios of the private funds by geographic region, investment size, and tenant mix. In constructing the portfolios of the six private funds, Phillips Edison specialized in acquiring a mix of value-added and enhanced-return properties. Value-added and enhanced-return assets are assets that are undervalued or that could be repositioned to enhance their value.

Phillips Edison has sought to diversify investments in its private funds by geographic region as illustrated by the chart below. The chart below outlines investments of the private funds by amounts invested (purchase price) during the 10-year period ended December 31, 2011. All were within the United States. The geographic dispersion

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of properties acquired during the 10-year period ended December 31, 2011 is as follows: 38% of the amount was invested in 96 properties located in the eastern United States, 31% of the amount was invested in 64 properties located in the southern United States, 16% of the amount was invested in 45 properties located in the western United States and 15% of the amount was invested in 36 properties located in the midwestern United States.

PHILLIPS EDISON – PRIVATE PROGRAMS

INVESTMENT BY REGION

In addition to diversifying the private fund portfolios by geographic region, Phillips Edison has primarily focused on necessity-driven retail investments that include the following categories: grocery, general merchandise, discount, health and beauty, and office supply retailers. Unlike industries that are routinely affected by cyclical fluctuations in the economy, shopping centers anchored by these retailers have historically been more resistant to economic downturns. In general, the consistent consumer demand for items such as food, pharmaceutical goods, postal services, general retail and hardware is present in all cycles of the economy.

In seeking to diversify the portfolios of the private funds by investment risk, Phillips Edison has purchased a mix of low-risk, high-quality properties and high-quality but under-performing properties in need of repositioning. The majority of the properties purchased by the private funds had prior owners and operators. For more detailed information regarding acquisitions by the private funds in the three years ended December 31, 2011, see Table VI located in Part II of the registration statement, which is not part of this prospectus. We will provide a copy of Table VI to you upon written request and without charge.

During the 10-year period ended December 31, 2011, Phillips Edison sold 50 properties on behalf of these six private funds. Phillips Edison continues to actively manage the remaining unsold properties of these private funds.

Though the private funds were not subject to the up-front commissions, fees and expenses associated with this offering, the private funds have fee arrangements with Phillips Edison affiliates structured similar to ours. The percentage of the fees varied based on the market factors at the time the particular fund was formed. For more information regarding the fees paid to Phillips Edison affiliates by these private funds and the operating results of these private funds, please see Tables II and III of the Prior Performance Tables in Appendix A of this supplement.

Two of the six private real estate funds managed by Phillips Edison (referred to as Fund I and Fund II) both experienced a liquidity event in 2004, at which time, investors in these funds were given the option to liquidate their investments or to convert their investments into shares of Phillips Edison Limited Partnership. Approximately 80% of the investors in Fund I and Fund II remained in the funds. The remaining four private real estate funds managed by Phillips Edison are fully invested, but have not yet had a liquidity event under the terms of their respective fund agreements. Note that an investment in this offering is substantially different than an investment in any of the Phillips Edison sponsored private offerings. Prior offerings have focused on purchasing value-add grocery-anchored shopping centers. This offering will invest primarily in core and core plus grocery-anchored shopping centers that are well-occupied, have a higher ratio of national and regional retailers and are located in more heavily populated locations.

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Adverse Business Developments and Conditions

Market timing is a strategy of buying or selling assets based on predictions of future market price movements. Phillips Edison has not tried to time the sponsorship of real estate programs based on its predictions of the real estate market as a whole. For most of the last 10 years, sponsored programs have been raising capital in order to acquire a desirable portfolio of real estate. As the money has been raised, sponsored programs have sought to acquire real estate at favorable prices based on then-current market conditions. In other words, such programs have generally sought to put capital to use promptly if suitable investments are available rather than hold substantial amounts of cash for long periods. Although our Phillips Edison sponsor believes that this strategy has generally served the investors in Phillips Edison-sponsored programs well, some of the assets acquired by Phillips Edison-sponsored programs were acquired at times when real estate was generally more expensive than during the later stages of the life of the program. As a result, at any given time some acquired assets of a Phillips Edison-sponsored program might sell for prices that are lower than the prices paid for them if those assets had to be liquidated at that time. This can be true even if the property remains leased to creditworthy tenants with long-term leases such that the program continues to project strong income yields. This possibility is the primary reason why Phillips Edison-sponsored programs are sold as long-term investments. With a long-term investment horizon, Phillips Edison-sponsored programs have more flexibility to liquidate or list at a more favorable time during a real estate cycle. Nevertheless, we cannot make any assurances regarding our ability to liquidate or list at a time when real estate prices are attractive relative to the prices we will pay for our portfolio.

Fund III, and other private real estate funds owned and/or managed by Phillips Edison, acquired properties between 2005 through 2007, a time of historically low capitalization rates. Subsequent to these acquisitions, real property values declined and some of the properties experienced a loss of occupancy. Some of these properties had impairments that were recognized in 2010 and 2011.

Prior Investment Programs Sponsored by AR Capital

The information presented in this section represents the historical experience of the real estate programs managed or sponsored over the last ten years by Messrs. Schorsch and Kahane. In connection with ARCT’s internalization and listing on The NASDAQ Global Select Market in March 2012, Mr. Kahane has resigned from the various officer positions he held with the sponsor and its affiliates. Investors should not assume that they will experience returns, if any, comparable to those experienced by investors in such prior real estate programs. The prior performance of real estate investment programs sponsored by affiliates of Messrs. Schorsch and Kahane and AR Capital advisor may not be indicative of our future results. The information summarized below is current as of December 31, 2011 and is set forth in greater detail in the Prior Performance Tables included in this prospectus. In addition, we will provide upon request to us and without charge, a copy of the most recent Annual Report on Form 10-K filed with the SEC by any public program within the last 24 months, and for a reasonable fee, a copy of the exhibits filed with such annual report.

We intend to conduct this offering in conjunction with future offerings by one or more public and private real estate entities sponsored by AR Capital and its affiliates. To the extent that such entities have the same or similar objectives as ours or involve similar or nearby properties, such entities may be in competition with the properties acquired by us. See the section entitled “Conflicts of Interest” in this prospectus for additional information.

Summary Information

During the period from August 2007 (inception of the first program) to December 31, 2011, affiliates of AR Capital Advisor have sponsored nine public programs, of which there were five public programs that had raised funds as of December 31, 2011 and five non-public programs which had similar investment objectives to our program. From August 2007 (inception of the first public program) to December 31, 2011, AR Capital’s public programs, which include ARCT, NYRR, ARC RCA, ARC DNAV, ARCT III, ARCP, and ARC Global Daily NAV and the programs consolidated into ARCT which were ARC Income Properties II and all of the Section 1031 Exchange Programs described below, had raised $2.0 billion from 47,342 investors in public offerings and an additional $37.5 million from 205 investors in a private offering by ARC Income Properties II and 45 investors in private offerings by the Section 1031 Exchange Programs. The public programs purchased 639 properties with an aggregate purchase price of $2.7 billion, including acquisition fees, in 47 states and U.S. territories.

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The following table details the percentage of properties by state based on purchase price:

State/Possession	Purchase Price
Alabama		1.2	%
Arizona		2.8	%
Arkansas		1.4	%
California		3.9	%
Colorado		0.5	%
Connecticut		0.1	%
Delaware		0.0	%
Florida		2.6	%
Georgia		3.8	%
Idaho		0.2	%
Illinois		6.9	%
Indiana		0.7	%
Iowa		1.2	%
Kansas		1.7	%
Kentucky		2.6	%
Louisiana		1.3	%
Maine		0.3	%
Maryland		2.5	%
Massachusetts		1.3	%
Michigan		3.6	%
Minnesota		0.7	%
Mississippi		0.6	%
Missouri		4.6	%
Montana		0.3	%
Nebraska		1.2	%
Nevada		2.2	%
New Hampshire		0.5	%
New Jersey		1.8	%
New Mexico		0.1	%
New York		15.6	%
North Carolina		1.9	%
North Dakota		0.1	%
Ohio		7.1	%

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State/Possession	Purchase Price
Oklahoma		0.6	%
Oregon		0.2	%
Pennsylvania		4.6	%
Puerto Rico		0.4	%
South Carolina		3.0	%
South Dakota		0.1	%
Tennessee		1.1	%
Texas		9.9	%
Utah		1.2	%
Vermont		0.1	%
Virginia		1.2	%
Washington		0.3	%
West Virginia		0.8	%
Wisconsin		1.1	%
		100	%

The properties are all commercial properties in the following industries based on purchase price.

Industry	Purchase Price
Aerospace		0.5	%
Auto Retail		1.5	%
Auto Services		3.0	%
Consumer Goods		0.9	%
Consumer Products		2.7	%
Discount Retail		6.2	%
Financial Services		1.0	%
Freight		13.9	%
Gas/Convenience		1.9	%
Government Services		3.8	%
Healthcare		11.6	%
Home Maintenance		3.0	%
Manufacturing		4.4	%
Parking		0.2	%
Pharmacy		16.3	%
Restaurant		3.1	%
Retail		6.8	%
Retail Banking		9.1	%

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Industry	Purchase Price
Specialty Retail		6.5	%
Supermarket		1.9	%
Technology		1.2	%
Telecommunications		0.5	%
		100.0	%

The purchased properties were 37.2% new and 62.8% used, based on purchase price. None of the purchased properties were construction properties. As of December 31, 2011, two properties had been sold. The acquired properties were purchased with a combination of proceeds from the issuance of common stock, the issuance of convertible preferred stock, mortgage notes payable, short-term notes payable, revolving lines of credit, long-term notes payable issued in private placements and joint venture arrangements.

During the period from June 2008 (inception of the first non-public program) to December 31, 2011, the non-public programs, which were ARC Income Properties, ARC Income Properties II, ARC Income Properties III, ARC Income Properties IV and ARC Growth Fund, LLC, had raised $54.4 million from 694 investors. The non-public programs purchased 171 properties with an aggregate purchase price of $247.9 million including acquisition fees, in 18 states.

The following table details the percentage of properties by state based on purchase price:

State location	Purchase Price %
Alabama		0.1	%
Connecticut		0.6	%
Delaware		4.8	%
Florida		11.0	%
Georgia		3.5	%
Illinois		6.6	%
Louisiana		2.3	%
Michigan		11.5	%
North Carolina		0.1	%
New Hampshire		0.5	%
New Jersey		13.0	%
New York		9.7	%
Ohio		10.3	%
Pennsylvania		9.5	%
South Carolina		8.4	%
Texas		5.0	%
Virginia		1.2	%
Vermont		2.2	%
		100	%

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The properties are all commercial single tenant facilities with 81.0% retail banking and 10.5% retail distribution facilities and 8.6% specialty retail. The purchased properties were 11.0% new and 89.0% used, based on purchase price. None of the purchased properties were construction properties. As of December 31, 2011, 53 properties had been sold. The acquired properties were purchased with a combination of equity investments, mortgage notes payable and long-term notes payable issued in private placements.

For a more detailed description, please see Table VI in Part II of the registration statement of which this prospectus is a part. In addition, we will provide upon request to us and without charge, the more detailed information in Part II.

Programs of Our AR Capital Sponsor

American Realty Capital Trust, Inc.

American Realty Capital Trust, Inc., or ARCT, a Maryland corporation, is the first publicly offered REIT sponsored by American Realty Capital. ARCT was incorporated on August 17, 2007, and qualified as a REIT beginning with the taxable year ended December 31, 2008. ARCT commenced its initial public offering of 150.0 million shares of common stock on January 25, 2008. As of December 31, 2011, ARCT had received aggregate gross offering proceeds of approximately $1.7 billion from the sale of approximately 171.9 million shares in its initial public offering. On August 5, 2010, ARCT filed a registration statement on Form S-11 to register 32.5 million shares of common stock in connection with a follow-on offering. ARCT’s initial public offering was originally set to expire on January 25, 2011, three years after its effective date. However, as permitted by Rule 415 of the Securities Act, ARCT was permitted to continue its initial public offering until July 25, 2011. On July 7, 2011 ARCT had sold all of the 150.0 million shares that were registered in connection with the initial public offering and as permitted, began to sell the remaining 25.0 million shares that were initially registered for ARCT’s distribution reinvestment plan. On July 11, 2011, ARCT filed a request to withdraw the registration of the additional 32.5 million shares, and on July 15, 2011, ARCT filed a registration statement on Form S-3 to register an additional 24.0 million shares to be used in connection with its distribution reinvestment plan. On March 1, 2012, ARCT internalized the management services previously provided by its advisor and ARCT’s common stock was listed on The NASDAQ Global Select Market under the symbol “ARCT”. As of March 31, 2012, ARCT had acquired 485 properties, primarily comprised of free standing, single-tenant retail and commercial properties that are net leased to investment grade and other creditworthy tenants. As of March 31, 2012, ARCT had total real estate investments, at cost, of approximately $2.1 billion. As of December 31, 2011, ARCT had incurred, cumulatively to that date, $198.0 million in offering costs, commissions and dealer manager fees for the sale of its common stock and $43.0 million for acquisition costs related to its portfolio of properties.

American Realty Capital New York Recovery REIT, Inc.

American Realty Capital New York Recovery REIT, Inc., or NYRR, a Maryland corporation, is the second publicly offered REIT sponsored by American Realty Capital. NYRR was incorporated on October 6, 2009 and qualified as a REIT beginning with the taxable year ended December 31, 2010. NYRR filed its initial registration statement with the SEC on November 12, 2009 and became effective on September 2, 2010. To date, NYRR had received aggregate gross offering proceeds of approximately $17.0 million from the sale of 2.0 million shares from a private offering to “accredited investors” (as defined in Regulation D as promulgated under the Securities Act). On December 15, 2011, NYRR exercised its option to convert all its outstanding preferred shares into approximately 2.0 million shares of common stock on a one-to-one basis. As of March 31, 2012, NYRR had received aggregate gross proceeds of approximately $66.9 million from the sale of 6.7 million shares in its public offering. As of March 31, 2012, there were approximately 8.8 million shares of NYRR common stock outstanding, including restricted stock, converted preferred shares, and shares issued under its distribution reinvestment plan. As of March 31, 2012, NYRR had total real estate investments, at cost, of approximately $144.9 million. As of December 31, 2011, NYRR had incurred, cumulatively to that date, approximately $12.4 million in selling commissions, dealer manager fees and other organizational and offering costs for the sale of its common stock.

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American Realty Capital Healthcare Trust, Inc.

American Realty Capital Healthcare Trust, Inc. or ARC HT, a Maryland corporation, is the fourth publicly offered REIT sponsored by American Realty Capital. ARC HT was organized on August 23, 2010 and qualified as a REIT beginning with the taxable year ended December 31, 2011. ARC HT filed its registration statement with the SEC on August 27, 2010 and became effective on February 18, 2011. As of March 31, 2012, ARC HT had received aggregate gross offering proceeds of approximately $132.3 million from the sale of approximately 13.3 million shares in its public offering. As of March 31, 2012, ARC HT had acquired 17 commercial properties, for a purchase price of approximately $195.3 million. As of December 31, 2011, ARC HT had incurred, cumulatively to that date, approximately $12.3 million in offering costs for the sale of its common stock and $3.4 million for acquisition costs related to its portfolio of properties.

American Realty Capital – Retail Centers of America, Inc.

American Realty Capital – Retail Centers of America, Inc., or ARC RCA, a Maryland corporation, is the fifth publicly offered REIT sponsored by American Realty Capital. ARC RCA was organized on July 29, 2010 and intends to qualify as a REIT beginning with the taxable year ending December 31, 2012. ARC RCA filed its registration statement with the SEC on September 14, 2010 and became effective on March 17, 2011. As of March 31, 2012, ARC RCA had received aggregate gross proceeds of approximately $2.4 million from the sale of 0.3 million shares in its public offering, but had not acquired any properties.

American Realty Capital Daily Net Asset Value Trust, Inc.

American Realty Capital Daily Net Asset Value Trust, Inc. (formerly known as American Realty Capital Trust II, Inc.), or ARC DNAV, a Maryland corporation, is the sixth publicly offered REIT sponsored by American Realty Capital. ARC Daily NAV was incorporated on September 10, 2010 and intends to qualify as a REIT beginning with the taxable year ending December 31, 2012. ARC DNAV filed its registration statement with the SEC on October 8, 2010 and became effective on August 15, 2011. As of March 31, 2012, ARC DNAV had received aggregate gross proceeds of approximately $2.4 million from the sale of 0.3 million shares in its public offering. As of March 31, 2012 ARC DNAV had acquired five properties with total real estate investments, at cost, of approximately $23.2 million.

American Realty Capital Trust III, Inc.

American Realty Capital Trust III, Inc., or ARCT III, a Maryland corporation, is the seventh publicly offered REIT sponsored by American Realty Capital. ARCT III was incorporated on October 15, 2010 and qualified as a REIT beginning with the taxable year ended December 31, 2011. ARCT III filed its registration statement with the SEC on November 2, 2010 and became effective on March 31, 2011. As of March 31, 2012, ARCT III had received aggregate gross proceeds of approximately $229.6 million from the sale of 32.0 million shares in its public offering. As of March 31, 2012, ARCT III owned 93 single tenant, free standing properties and had total real estate investments, at cost, of $268.2 million. As of December 31, 2011, ARCT III had incurred, cumulatively to that date, approximately $15.9 million in offering costs for the sale of its common stock and approximately $2.0 million for acquisition costs related to its portfolio of properties.

American Realty Capital Properties, Inc.

American Realty Capital Properties, Inc., or ARCP, a Maryland corporation, is the eighth publicly offered REIT sponsored by American Realty Capital. ARCP was incorporated on December 2, 2010 and qualified as a REIT beginning with the taxable year ended December 31, 2011. ARCP filed its registration statement with the SEC on February 11, 2011 and became effective by the SEC on July 7, 2011. On September 6, 2011, ARCP completed its initial public offering of approximately 5.6 million shares of common stock. ARCP’s common stock is traded on The NASDAQ Capital Market under the symbol “ARCP.” On September 22, 2011, ARCP filed its registration statement with the SEC in connection with an underwritten follow-on offering of 1.5 million shares of its common stock. On November 2, 2011, ARCP completed its secondary offering of 1.5 million shares of common stock. In addition, on November 7, 2011, ARCP closed on the underwriters’ overallotment option of an additional 0.1 million shares of common stock. In aggregate, ARCP has received $83.9 million of proceeds from the sale of common stock. As of March 31, 2012, ARCP owned 92 single tenant, free standing properties and real estate investments, at a purchase price of approximately $157.3 million.

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American Realty Capital Global Daily Net Asset Value Trust, Inc.

American Realty Capital Global Daily Net Asset Value Trust, Inc., or ARC Global Daily NAV, a Maryland corporation, is the ninth publicly offered REIT sponsored by American Realty Capital. ARC Global Daily NAV was incorporated on July 13, 2011 and intends to qualify as a REIT beginning with the taxable year ending December 31, 2012. ARC Global Daily NAV filed its registration statement with the SEC on October 27, 2011, which has not yet been declared effective. As of March 31, 2012, ARC Global Daily NAV had not raised any money in connection with the sale of its common stock nor had it acquired any properties.

American Realty Capital Trust IV, Inc.

American Realty Capital Trust IV, Inc., or ARCT IV, a Maryland corporation, is the tenth publicly offered REIT sponsored by American Realty Capital. ARCT IV was incorporated on February 14, 2012 and intends to qualify as a REIT beginning with the taxable year ending December 31, 2012. ARCT IV filed its registration statement with the SEC on March 21, 2012, which has not yet been declared effective. As of March 31, 2012, ARCT IV had not raised any money in connection with the sale of its common stock nor had it acquired any properties.

Business Development Corporation of America

The American Realty Capital group of companies also has sponsored Business Development Corporation of America, or Business Development Corporation, a Maryland corporation. Business Development Corporation was organized on May 5, 2010 and is a publicly offered specialty finance company which has elected to be treated as a business development company under the Investment Company Act of 1940. As of March 31, 2012, Business Development Corporation had raised gross proceeds of $26.9 million from the sale of 2.7 million shares in its public offering. As of March 31, 2012, Business Development Corporation’s investments, at cost, were $32.8 million.

Liquidity of Public Programs

FINRA Rule 2310(b)(3)(D) requires that we disclose the liquidity of prior public programs sponsored by American Realty Capital. American Realty Capital has sponsored the following other public programs: ARCT, NYRR, ARC HT, ARC RCA, ARC DNAV, ARCT III, ARCP, ARC Global Daily NAV, ARCT IV and Business Development Corporation. Although the prospectus for each of these public programs states a date or time period by which it may be liquidated, NYRR, ARC HT, ARC RCA, ARC DNAV, ARCT III and Business Development Corporation are in their offering and acquisition stages. ARCT closed its initial offering and is in its acquisition stage; ARCP closed its initial offering and secondary offering and is in its acquisition stage. Neither ARC Global Daily NAV nor ARCT IV has yet been declared effective. None of these public programs have reached the stated date or time period by which they may be liquidated.

Private Note Programs

ARC Income Properties, LLC implemented a note program that raised aggregate gross proceeds of $19.5 million. The net proceeds were used to acquire, and pay related expenses in connection with, a portfolio of 65 bank branch properties triple-net leased to RBS Citizens, N.A. and Citizens Bank of Pennsylvania. The purchase price for those bank branch properties also was funded with proceeds received from mortgage loans, as well as equity capital invested by AR Capital, LLC. Such properties contain approximately 323,000 square feet with a purchase price of approximately $98.8 million. The properties are triple-net leased for a primary term of five years and include extension provisions. The notes issued under this note program by ARC Income Properties, LLC were sold by our dealer manager through participating broker-dealers. On September 7, 2011, the note holders were repaid, the properties were contributed to ARCP as part of its formation transaction, and the mortgage loans were repaid.

ARC Income Properties II, LLC implemented a note program that raised aggregate gross proceeds of $13.0 million. The net proceeds were used to acquire, and pay related expenses in connection with, a portfolio of 50 bank branch properties triple-net leased to PNC Bank. The purchase price for those bank branch properties also was funded with proceeds received from a mortgage loan, as well as equity capital raised by ARCT in connection with

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its public offering of equity securities. The properties are triple-net leased with a primary term of ten years with a 10% rent increase after five years. The notes issued under this note program by ARC Income Properties II, LLC were sold by our dealer manager through participating broker-dealers. In May 2011, the notes were repaid in full including accrued interest and the program was closed.

ARC Income Properties III, LLC implemented a note program that raised aggregate gross proceeds of $11.2 million. The net proceeds were used to acquire, and pay related expenses in connection with the acquisition of a distribution facility triple-net leased to Home Depot. The purchase price for the property was also funded with proceeds received from a mortgage loan. The property has a primary lease term of twenty years which commenced on January 30, 2010 with a 2% escalation each year. The notes issued under this note program by ARC Income Properties III, LLC were sold by our dealer manager through participating broker-dealers. On September 7, 2011, the note holders were repaid and the property was contributed to ARCP as part of its formation transaction.

ARC Income Properties IV, LLC implemented a note program that raised proceeds of $5.4 million. The proceeds were used to acquire and pay related expenses in connection with the acquisition of six Tractor Supply stores. An existing mortgage loan of $16.5 million was assumed in connection with the acquisition. The properties had a remaining average lease term of 11.8 years with a 6.25% rental escalation every 5 years. The notes issued under this program by ARC Income Properties IV, LLC were sold by our dealer manager through participating broker-dealers.

ARC Growth Fund, LLC

ARC Growth Fund, LLC is a non-public real estate program formed to acquire vacant bank branch properties and opportunistically sell such properties, either vacant or subsequent to leasing the bank branch to a financial institution or other third-party tenant. Total gross proceeds of approximately $7.9 million were used to acquire, and pay related expenses in connection with, a portfolio of vacant bank branches. The purchase price of the properties also was funded with proceeds received from a one-year revolving warehouse facility. The purchase price for each bank branch is derived from a formulated price contract entered into with a financial institution. During the period from July 2008 to January 2009, ARC Growth Fund, LLC acquired 54 vacant bank branches from Wachovia Bank, N.A., under nine separate transactions. Such properties contain approximately 230,000 square feet with a gross purchase price of approximately $63.6 million. As of December 31, 2011, all properties were sold, 28 of which were acquired and simultaneously sold, resulting in an aggregate gain of approximately $4.8 million.

Section 1031 Exchange Programs

American Realty Capital Exchange, LLC, or ARCX, an affiliate of American Realty Capital, developed a program pursuant to which persons selling real estate held for investment can reinvest the proceeds of that sale in another real estate investment in an effort to obtain favorable tax treatment under Section 1031 of the Code, or a Section 1031 Exchange Program. ARCX acquires real estate to be owned in co-tenancy arrangements with persons desiring to engage in such like-kind exchanges. ARCX acquires the subject property or portfolio of properties and, either concurrently with or following such acquisition, prepares and markets a private placement memorandum for the sale of co-tenancy interests in that property. ARCX has engaged in four Section 1031 Exchange Programs raising aggregate gross proceeds of $10.1 million.

American Realty Capital Operating Partnership, L.P. purchased a Walgreens property in Sealy, TX under a tenant in common structure with an unaffiliated third party, a Section 1031 Exchange Program. The third party’s investment of $1.1 million represented a 44.0% ownership interest in the property. The remaining interest of 56% will be retained by American Realty Capital Operating Partnership, L.P. To date, $1.1 million has been accepted by American Realty Capital Operating Partnership, L.P. pursuant to this program.

American Realty Capital Operating Partnership, L.P., an affiliate of American Realty Capital, previously had transferred 49% of its ownership interest in a Federal Express distribution facility, located in Snowshoe, Pennsylvania, and a PNC Bank branch, located in Palm Coast, Florida, to American Realty Capital DST I, or ARC DST I, a Section 1031 Exchange Program. Realty Capital Securities, LLC, our dealer manager, has offered membership interests of up to 49%, or $2.6 million, in ARC DST I to investors in a private offering. The remaining interests of no less than 51% will be retained by American Realty Capital Operating Partnership, L.P. To date, cash payments of $2.6 million have been accepted by American Realty Capital Operating Partnership, L.P. pursuant to this program.

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American Realty Capital Operating Partnership, L.P. also has transferred 35.2% of its ownership interest in a PNC Bank branch location, located in Pompano Beach, Florida, to American Realty Capital DST II, or ARC DST II, a Section 1031 Exchange Program. Realty Capital Securities, our dealer manager, has offered membership interests of 35.2%, or $0.5 million, in ARC DST II to investors in a private offering. The remaining interests of no less than 64.8% will be retained by American Realty Capital Operating Partnership, L.P. To date, cash payments of $0.5 million have been accepted by American Realty Capital Operating Partnership, L.P pursuant to this program.

American Realty Capital Operating Partnership, L.P. also has transferred 49% of its ownership interest in three CVS properties, located in Smyrna, Georgia, Chicago, Illinois and Visalia, California, to American Realty Capital DST III, or ARC DST III, a Section 1031 Exchange Program. Realty Capital Securities, our dealer manager, has offered membership interests of up to 49%, or $3.1 million, in ARC DST III to investors in a private offering. The remaining interests of no less than 51% will be retained by American Realty Capital Operating Partnership, L.P. To date, cash payments of $3.1 million have been accepted by American Realty Capital Operating Partnership, L.P. pursuant to this program.

American Realty Capital Operating Partnership, L.P. has transferred 49% of its ownership interest in six Bridgestone Firestone properties, located in Texas and New Mexico, to American Realty Capital DST IV, or ARC DST IV, a Section 1031 Exchange Program. Realty Capital Securities, our dealer manager, has offered membership interests of up to 49%, or $7.3 million, in ARC DST IV to investors in a private offering. The remaining interests of no less than 51% will be retained by American Realty Capital Operating Partnership, L.P. To date, cash payments of $7.3 million had been accepted by American Realty Capital Operating Partnership, L.P. pursuant to this program. American Realty Capital Operating Partnership, L.P. also has sold 24.9% of its ownership interest in a Jared Jewelry property located in Lake Grove, NY, under a tenant-in-common structure with an affiliated third party. The remaining interest of 75.1% will be retained by American Realty Capital Operating Partnership, L.P. To date cash payments of $0.6 million has been accepted by American Realty Capital Operating Partnership, L.P. pursuant to this program.

Other Investment Programs of Mr. Schorsch and Mr. Kahane

American Realty Capital, LLC

American Realty Capital, LLC began acquiring properties in December 2006. During the period from January 1, 2007 to December 31, 2007, American Realty Capital, LLC acquired 73 property portfolios, totaling just over 1,767,000 gross leasable square feet for an aggregate purchase price of approximately $407.5 million. These properties included a mixture of tenants, including HyVee supermarkets, CVS, Rite Aid, Walgreens, Harleysville bank branches, Logan’s Roadhouse Restaurants, Tractor Supply Company, Shop N Save, FedEx, Dollar General and Bridgestone Firestone. The underlying leases within these acquisitions ranged from 10 to 25 years before any tenant termination rights, with a dollar-weighted-average lease term of approximately 21 years based on rental revenue. During the period of April 1, 2007 through October 20, 2009, American Realty Capital, LLC sold nine properties: four Walgreens drug stores, four Logan’s Roadhouse Restaurants and one CVS pharmacy for total sales proceeds of $50.2 million.

American Realty Capital, LLC has operated in three capacities: as a joint-venture partner, as a sole investor and as an advisor. No money was raised from investors in connection with the properties acquired by American Realty Capital, LLC. All American Realty Capital, LLC transactions were done with the equity of the principals or joint-venture partners of American Realty Capital, LLC.

In instances where American Realty Capital, LLC was not an investor in the transaction, but rather solely an advisor, American Realty Capital, LLC typically performed the following advisory services: but rather an advisor, American Realty Capital, LLC typically performed the following advisory services:

• identified potential properties for acquisition;

• negotiated letters of intent and purchase and sale contracts;

27

• obtained financing;

• performed due diligence;

• closed properties;

• managed properties; and

• sold properties.

Prior Investment Programs Sponsored by Nicholas S. Schorsch

During the period from 1998 to 2002, one of the principals of our sponsor, Nicholas S. Schorsch, sponsored seven private programs, consisting of First States Properties, L.P., First States Partners, L.P., First States Partners II, First States Partners III, First States Holdings, Chester Court Realty and Dresher Court Realty, which raised approximately $38.3 million from 93 investors and acquired properties with an aggregate purchase price of approximately $272.3 million. These private programs, or Predecessor Entities, financed their investments with investor equity and institutional first mortgages. These properties are located throughout the United States as indicated in the table below. Ninety-four percent of the properties acquired were bank branches and 6% of the properties acquired were office buildings. None of the properties included in the aforesaid figures were newly constructed. Each of these Predecessor Entities is similar to our program because they invested in long-term net lease commercial properties. The Predecessor Entities properties are located as follows:

State	No. of Properties		Square Feet
Pennsylvania		34		1,193,741
New Jersey		38		149,351
South Carolina		3		65,992
Kansas		1		17,434
Florida		4		16,202
Oklahoma		2		13,837
Missouri		1		9,660
Arkansas		4		8,139
North Carolina		2		7,612
Texas		1		6,700

Attached hereto as Appendix A-1 is further prior performance information on Nicholas S. Schorsch.

American Financial Realty Trust

In 2002, American Financial Realty Trust, or AFRT, was founded by Nicholas S. Schorsch. In September and October 2002, AFRT sold approximately 40.8 million shares of common stock in a Rule 144A private placement. These sales resulted in aggregate net proceeds of approximately $378.6 million. Simultaneous with the sale of such shares, AFRT acquired certain real estate assets from a predecessor entity for an aggregate purchase price of $230.5 million, including the assumption of indebtedness, consisting of a portfolio of 87 bank branches and six office buildings containing approximately 1.5 million rentable square feet. Mr. Schorsch was the president, chief executive officer and vice-chairman of AFRT from its inception as a REIT in September 2002 until August 2006. Mr. Kahane was the chairman of the Finance Committee of AFRT’s Board of Trustees from its inception as a REIT in September 2002 until August 2006. AFRT went public on the New York Stock Exchange in June 2003 in what was at the time the second largest REIT initial public offering in U.S. history, raising over $800 million. Three years following its initial public offering, AFRT was an industry leader, acquiring over $4.3 billion in assets, over 1,110 properties (net of dispositions) in more than 37 states and over 35.0 million square feet with 175 employees and a

28

well diversified portfolio of bank tenants. On April 1, 2008 AFRT was acquired by Gramercy Capital Corp. Neither Mr. Schorsch nor Mr. Kahane owned any equity interest in AFRT at the time of the acquisition, and neither Mr. Schorsch nor Mr. Kahane currently owns an equity interest in AFRT.

Adverse Business Developments and Conditions

The net losses incurred by ARCT, NYRR, ARC Income Properties, LLC, ARC Income Properties II, LLC, ARC Income Properties III, LLC and ARC Income Properties IV, LLC are primarily attributable to non-cash items and acquisition expenses incurred for the purchases of properties which are not ongoing expenses for the operation of the properties and not the impairment of the programs’ real estate assets. With respect to ARCT, our largest program to date, for the years ended December 31, 2011, 2010 and 2009, the entire net loss was attributable to depreciation and amortization expenses incurred on the properties during the ownership period; and for the year ended December 31, 2008, 71% of the net losses were attributable to depreciation and amortization, and the remaining 29% of the net losses was attributable to the fair market valuation of certain derivative investments held.

Additionally, each of ARC Income Properties, LLC, ARC Income Properties II, LLC, ARC Income Properties III, LLC and ARC Income Properties IV, LLC is an offering of debt securities. Despite incurring net losses during certain periods, all anticipated distributions to investors have been paid on these programs through interest payments on the debt securities. The equity interests in each of these entities are owned by Nicholas Schorsch and William Kahane and their respective families. Any losses pursuant to a reduction in value of the equity in any of these entities (which has not occurred and which is not anticipated), will be borne by Messrs. Schorsch and Kahane and their respective families. On September 7, 2011, the note holders in ARC Income Properties, LLC and ARC Income Properties III, LLC were repaid and the properties were contributed to ARCP as part of its formation transaction. Additionally, the mortgage loans in ARC Income Properties, LLC were repaid.

Since its inception, ARCT has paid distributions through a combination of cash flows from operations, proceeds from the sale of common stock and the issuance of shares in accordance with the distribution reinvestment plan. Distributions paid from cash flows from operations, excluding distributions paid in shares, for the years ended December 31, 2008, 2009, 2010 and 2011 were 100.0%, 79.1%, 84.8% and 94.1%, respectively. Cumulative to date as of December 31, 2011, 89.5% of distributions paid in cash were paid from cash flows from operations with the remaining 10.5% paid from the issuance of new shares.

ARC Growth Fund, LLC was different from the other programs in that all of the properties were vacant when the portfolio was purchased and the properties were purchased with the intention of reselling them. Losses from operations represent carrying costs on the properties as well as acquisition and disposition costs in addition to non-cash depreciation and amortization costs. Upon final distribution in 2010, all investors received their entire investment plus an incremental return based on a percentage of their initial investment and the sponsor retained the remaining available funds and four properties which were unsold at the end of the program.

None of the referenced programs have been subject to any tenant turnover and have experienced a non-renewal of only two leases. Further, none of the referenced programs have been subject to mortgage foreclosure or significant losses on the sales of properties.

Attached hereto as Appendices A-1 and A-2 are further prior performance information on AFRT and Nicholas S. Schorsch, respectively.

Other than as disclosed above, there have been no major adverse business developments or conditions experienced by any program or non-program property that would be material to investors, including as a result of recent general economic conditions.

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Plan of Distribution

The following disclosure replaces in its entirety the disclosure beginning in the sixth paragraph on page 194 of the prospectus through page 196 of the prospectus under the section entitled, “Compensation of Our Dealer Manager and Participating Broker-Dealers.”

In connection with sales of certain minimum numbers of shares to a “purchaser,” as defined below, certain volume discounts resulting in reductions in selling commissions payable with respect to such sales are available to investors. In such event, any such reduction will be credited to the investor by reducing the purchase price per share payable by the investor. The following table shows the discounted price per share and reduced selling commissions payable for volume discounts.

For a “Single Purchaser”	Purchase Price per Share in Volume Discount Range	Selling Commission per Share in Volume Discount Range
$1,000 – $500,000	$10.00	$0.70
500,001 – 1,000,000	9.90	0.60
1,000,001 – 4,999,999	9.55	0.25
5,000,000+	9.55 (as described below, subject to reduction)	0.25 (as described below, subject to reduction)

Any reduction in the amount of the selling commissions in respect of volume discounts received will be credited to the investor in the form of additional shares. Fractional shares will be issued.

As an example, a single purchaser would receive 100,505.05 shares rather than 100,000 shares for an investment of $1,000,000 and the selling commission would be $65,303.03. The discount would be calculated as follows: the purchaser would acquire 50,000 shares at a cost of $10.00 and 50,505.05 at a cost of $9.90 per share and would pay commissions of $0.70 per share for 50,000 shares and $0.60 per share for 50,505.05 shares. The dealer manager fee of $0.30 per share would still be payable out of the purchase price per share. In no event will the proceeds to us be less than $9.00 per share.

For purchases of $5,000,000 or more, in our sole discretion, selling commissions may be reduced to $0.20 per share or less, and the dealer manager fee may be reduced from $0.30 per share, but in no event will the proceeds to us be less than $9.00 per share. In the event of a sale of $5,000,000 or more with reduced selling commissions or a reduced dealer manager fee, we will supplement this prospectus to include: (a) the aggregate amount of the sale, (b) the price per share paid by the purchaser and (c) a statement that other investors wishing to purchase at least the amount described in clause (a) above will pay no more per share than the purchaser described in clause (b) above.

Orders may be combined for the purpose of determining the total commissions payable with respect to applications made by a “single purchaser,” so long as all the combined purchases are made through the same soliciting dealer. The amount of total commissions thus computed will be apportioned pro rata among the individual orders on the basis of the respective amounts of the orders being combined. As used herein, the term “single purchaser” will include:

• any person or entity, or persons or entities, acquiring shares as joint purchasers;

• all profit-sharing, pension and other retirement trusts maintained by a given corporation, partnership or other entity;

• all funds and foundations maintained by a given corporation, partnership or other entity;

• all profit-sharing, pension and other retirement trusts and all funds or foundations over which a designated bank or other trustee, person or entity exercises discretionary authority with respect to an investment in our company; and

• any person or entity, or persons or entities, acquiring shares that are clients of and are advised by a single investment adviser registered under the Investment Advisers Act of 1940.

In the event that a single purchaser described in the last five categories above wishes to have its orders so combined, that purchaser will be required to request the treatment in writing, which request must set forth the basis for the discount and identify the orders to be combined. Any request will be subject to our verification that all of the orders were made by a single purchaser.

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Orders also may be combined for the purpose of determining the commissions payable in the case of orders by any purchaser described in any category above who, within 90 days of its initial purchase of shares, orders additional shares. In this event, the commission payable with respect to the subsequent purchase of shares will equal the commission per share which would have been payable in accordance with the commission schedule set forth above if all purchases had been made simultaneously. Purchases subsequent to this 90 day period will not qualify to be combined for a volume discount as described herein.

Notwithstanding the above, our dealer manager may, in its sole discretion, enter into an agreement with a participating broker-dealer, whereby such participating broker-dealer may aggregate subscriptions as part of a combined order for the purpose of offering investors reduced aggregate selling commissions and marketing support fees to as low as 1.0%, provided that any such aggregate group of subscriptions must be received from such participating broker-dealer. Additionally, our dealer manager may, in its sole discretion, aggregate subscriptions as part of a combined order for the purpose of offering investors reduced aggregate selling commissions and marketing support fees to as low as 1.0%, provided that any such aggregate group of subscriptions must be received from our dealer manager. Any reduction in selling commissions and marketing support fees would be prorated among the separate subscribers.

Unless investors indicate that orders are to be combined and provide all other requested information, we cannot be held responsible for failing to combine orders properly.

Purchases by entities not required to pay federal income tax may only be combined with purchases by other entities not required to pay federal income tax for purposes of computing amounts invested if investment decisions are made by the same person. If the investment decisions are made by an independent investment advisor, that investment advisor may not have any direct or indirect beneficial interest in any of the entities not required to pay federal income tax whose purchases are sought to be combined. You must mark the “Additional Investment” space on the subscription agreement signature page in order for purchases to be combined. We are not responsible for failing to combine purchases if you fail to mark the “Additional Investment” space.

If the subscription agreements for the purchases to be combined are submitted at the same time, then the additional common stock to be credited to you as a result of such combined purchases will be credited on a pro rata basis. If the subscription agreements for the purchases to be combined are not submitted at the same time, then any additional common stock to be credited as a result of the combined purchases will be credited to the last component purchase, unless we are otherwise directed in writing at the time of the submission. However, the additional common stock to be credited to any entities not required to pay federal income tax whose purchases are combined for purposes of the volume discount will be credited only on a pro rata basis on the amount of the investment of each entity not required to pay federal income tax on their combined purchases.

California residents should be aware that volume discounts will not be available in connection with the sale of shares made to California residents to the extent such discounts do not comply with the provisions of Rule 260.140.51 adopted pursuant to the California Corporate Securities Law of 1968. Pursuant to this rule, volume discounts can be made available to California residents only in accordance with the following conditions:

• there can be no variance in the net proceeds to us from the sale of the shares to different purchasers of the same offering;

• all purchasers of the shares must be informed of the availability of quantity discounts;

• the same volume discounts must be allowed to all purchasers of shares which are part of the offering;

• the minimum amount of shares as to which volume discounts are allowed cannot be less than $10,000;

• the variance in the price of the shares must result solely from a different range of commissions, and all discounts must be based on a uniform scale of commissions; and

• no discounts are allowed to any group of purchasers.

Accordingly, volume discounts for California residents will be available in accordance with the foregoing table of uniform discount levels based on dollar volume of shares purchased, but no discounts are allowed to any group of purchasers, and no subscriptions may be aggregated as part of a combined order for purposes of determining the number of shares purchased.

Purchase of Shares Subject to Volume Discount

In March 2012, a single investor, or the Major Investor, agreed to purchase during the course of this offering a minimum of $5,000,000 in value of shares of our common stock in consideration for reduced selling

31

commissions and dealer manager fees. In exchange for the Major Investor’s agreement to purchase a minimum of $5,000,000 in value of shares of our common stock, we agreed to sell such shares to the Major Investor at $9.25 per share, from which we will receive net proceeds of $9.00 per share. The purchases by the Major Investor are expected to occur in multiple transactions during the course of this offering. The Major Investor will pay for all shares purchased in each transaction at the time of such transaction. Accordingly, the Major Investor will purchase from us a minimum of 540,540.54 shares (calculated by dividing the minimum purchase amount of $5,000,000 by the purchase price of $9.25/share). We may issue fractional shares to the Major Investor. Other investors who wish to purchase a minimum of $5,000,000 in value of shares of our common stock during the course of our offering in consideration for reduced selling commissions and dealer manager fee also may do so at $9.25 per share.

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Experts

The following information replaces the disclosure in the prospectus under the heading “Experts.”

The consolidated financial statements and the related financial statement schedule, incorporated in this Prospectus by reference from the Phillips Edison-ARC Shopping Center REIT Inc.’s Annual Report for the year ended December 31, 2011 on Form 10-K, have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report, which is incorporated herein by reference. Such consolidated financial statements and financial statement schedule have been so incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.

The Statements of Revenues and Certain Operating Expenses of Lakeside Plaza and Snow View Plaza for the year ended December 31, 2009 and of St. Charles Plaza, Southampton Village, Centerpoint, Burwood Village Center, and Cureton Town Center for the year ended December 31, 2010, incorporated by reference in this Prospectus from Phillips Edison – ARC Shopping Center REIT Inc.’s Current Reports on Form 8-K/A as filed with the SEC on February 22, 2011, on August 22, 2011, on December 27, 2011, and on March 15, 2012 have been audited by Deloitte & Touche LLP, independent auditors, as stated in their reports, which are incorporated herein by reference and have been so incorporated in reliance upon the reports of such firm given upon their authority as experts in accounting and auditing.

Incorporation of Certain Information by Reference

We have elected to “incorporate by reference” certain information into this prospectus. By incorporating by reference, we are disclosing important information to you by referring you to documents we have filed separately with the SEC. The information incorporated by reference is deemed to be part of this prospectus, except for information incorporated by reference that is superseded by information contained in this prospectus. You can access documents that are incorporated by reference into this prospectus at our website at http://www.PhillipsEdison-ARC.com (URL for documents: http://phx.corporate-ir.net/phoenix.zhtml?c=244048&p=irol-sec). There is additional information about us, our advisor, our sub-advisor, and their affiliates at the website, but unless specifically incorporated by reference herein as described in the paragraphs below, the contents of that site are not incorporated by reference in or otherwise a part of this prospectus.

The following documents filed with the SEC are incorporated by reference in this prospectus (Commission File No. 333-164313), except for any document or portion thereof deemed to be “furnished” and not filed in accordance with SEC rules:

• Annual Report on Form 10-K for the fiscal year ended December 31, 2011 filed with the SEC on March 23, 2012;

• Current Report on Form 8-K/A filed with the SEC on March 15, 2012;

• Current Report on Form 8-K filed with the SEC on February 27, 2012;

• Current Report on Form 8-K filed with the SEC on January 5, 2012;

• Current Report on Form 8-K/A filed with the SEC on December 27, 2011;

• Current Report on Form 8-K/A filed with the SEC on August 22, 2011; and

• Current Report on Form 8-K/A filed with the SEC on February 22, 2011.

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We will provide to each person, including any beneficial owner, to whom this prospectus is delivered, upon request, a copy of any or all of the information that we have incorporated by reference into this prospectus but not delivered with this prospectus. To receive a free copy of any of the documents incorporated by reference in this prospectus, other than exhibits, unless they are specifically incorporated by reference in those documents, call or write us at:

Realty Capital Securities, LLC

Three Copley Place

Suite 3300

Boston, MA 02116

1-877-373-2522

www.rcsecurities.com

The information relating to us contained in this prospectus does not purport to be comprehensive and should be read together with the information contained in the documents incorporated or deemed to be incorporated by reference in this prospectus.

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APPENDIX A

PRIOR PERFORMANCE TABLES

The following prior performance tables (“Tables”) provide information relating to the real estate investment programs sponsored by Phillips Edison and programs sponsored by AR Capital. Each of Phillips Edison’s previous programs and investments and some of AR Capital’s prior programs and investments were conducted through privately held entities not subject to the up-front commissions, fees and expenses associated with this offering or all of the laws and regulations to which we will be subject. In addition, we are Phillips Edison’s first publicly offered investment program and Phillips Edison has never operated a public REIT before. Because of these facts, our investors should not assume that the prior performance of programs sponsored by Phillips Edison or AR Capital will be indicative of our future performance. In assessing the relative importance of this information with respect to a decision to invest in this offering, you should keep in mind that we will rely primarily on affiliates of our Phillips Edison sponsor to identify acquisitions and manage our portfolio and we will rely primarily on affiliates of our AR Capital sponsor with respect to our capital-raising efforts, although both AR Capital Advisor and Phillips Edison Sub-Advisor will jointly participate in major decisions as described in the prospectus at “Management – Our Advisor and Sub-Advisor.” You should also note that only programs sponsored by Phillips Edison have invested in our targeted portfolio of grocery-anchored neighborhood shopping centers.

Generally, Phillips Edison’s prior programs described in the following tables have investment objectives similar to ours except that Phillips Edison Strategic Investment Fund LLC focuses on acquiring power and lifestyle centers. None of the AR Capital programs had or have investment objectives similar to ours. We consider programs invested primarily in neighborhood and community shopping centers to have investment objectives similar to ours. ARC Growth Fund, LLC was formed to acquire vacant bank branch properties and opportunistically sell such properties.

The Tables below provide information on the performance of a number of private programs of Phillips Edison and public and private programs of AR Capital. This information should be read together with the summary information included in the “Prior Performance Summary” section of this prospectus.

The inclusion of the Tables does not imply that we will make investments comparable to those reflected in the Tables or that investors in our shares will experience returns comparable to the returns experienced in the programs referred to in the Tables. In addition, you may not experience any return on your investment. If you purchase our shares, you will not acquire any ownership in any of the programs to which the Tables relate.

The following tables are included herein for each of Phillips Edison and AR Capital:

TABLE I Experience in Raising and Investing Funds

TABLE II Compensation to Sponsor

TABLE III Operating Results of Prior Programs

TABLE IV Results of Completed Programs

TABLE V Sales or Disposals of Properties

Additional information relating to the acquisition of properties by Phillips Edison’s and AR Capital’s prior programs is contained in Table VI, which is included in Part II of the registration statement of which this prospectus is a part, which we have filed with the Securities and Exchange Commission. Copies of any and all such information will be provided to prospective investors at no charge upon request.

A-1

Table I

EXPERIENCE IN RAISING AND INVESTING FUNDS

(UNAUDITED)

Prior Performance is not Indicative of Future Results

Table I provides a summary of the experience of Phillips Edison in raising and investing in funds for programs that have had an offering close during the three years ended December 31, 2011. Information is provided as to the manner in which the proceeds of the offering have been applied.

	Similar Programs												Other Program
(in thousands)	Phillips  Edison Shopping Center Fund III, LP			Percentage of Total Dollar Amount Raised			Phillips Edison Shopping Center Fund IV, LP			Percentage of Total Dollar Amount Raised			Phillips Edison Strategic Investment Fund LLC			Percentage of Total Dollar Amount Raised
Dollar amount offered	$	200,000					$	500,000					$	50,000
Dollar amount raised	$	275,000			100	%	$	119,910			100	%	$	65,615			100	%
Less offering expenses:
Selling commissions and discounts		—			0.0	%		—			0.0	%		—			0.0	%
Organizational and offering expenses		816			0.3	%		909			0.8	%		77			0.1	%
Reserve for operations		—			0.0	%		—			0.0	%		—			0.0	%
Other		—			0.0	%		—			0.0	%		—			0.0	%
Available for investment	$	274,184			99.7	%	$	119,001			99.2	%	$	65,538			99.9	%
Acquisition costs:
Cash down Payment	$	322,300			117.2	%	$	46,569			38.8	%	$	47,669			72.6	%
Acquisition fees		—			0.0	%		—			0.0	%		—			0.0	%
Other(1)		12,331			4.5	%		715			0.6	%		807			1.2	%
Mortgage loan		659,945			240.0	%		80,161			66.9	%		40,095			61.1	%
Total acquisition costs	$	994,576			361.7	%	$	127,445			106.3	%	$	88,571			135.0	%
Percent leveraged		66	%					63	%					45	%
Date offering began		January 2005						September 2007						January 2007
Length of offering (in months)		12						21						4
Months to invest 90% available for investment (measured from date of offering)(2)		18						—						45

⁽¹⁾  Includes legal fees, environmental studies, title and other closing costs.

⁽²⁾  As of this offering, Fund IV is currently in its investment period and has not invested 90% of its committed capital. As assets are identified for investment equity, capital will be called to fund acquisitions throughout the remainder of the investment period.

A-2

Table II

COMPENSATION TO SPONSOR

(UNAUDITED)

Prior Performance is not Indicative of Future Results

Table II provides the amount and type of compensation paid to Phillips Edison affiliates during the three years ended December 31, 2011 in connection with 1) each program sponsored by a Phillips Edison investment advisor that had offerings close during this period and 2) all other programs that have made payments to Phillips Edison affiliates during this period. All figures are as of December 31, 2011.

	Similar Programs				Other Programs
(in thousands)	Phillips Edison Shopping Center Fund III, LP		Phillips Edison Shopping Center Fund IV, LP		Phillips Edison Strategic Investment Fund LLC		Phillips Edison Strategic Investment Fund II LLC
Date offering commenced		January 2005		September 2007		January 2007		September 2010
Dollar amount raised	$	275,000	$	119,910	$	65,615	$	56,655
Amount paid to sponsor from proceeds of offering:
Underwriting fees		—		—		—		—
Acquisition fees:
Real estate commissions		—		—		—		—
Advisory fees		—		—		—		—
Other		—		—		—		—
Total amount paid to sponsor		—		—		—		—
Dollar amount of cash generated from operations before deducting payments to sponsor	$	79,755	$	14,828	$	19,346	$	919
Amount paid to sponsor from operations:
Property management fees		13,247		1,323		894		23
Partnership management fees		12,063		4,502		3,799		286
Reimbursements		4,947		503		182		18
Leasing commissions		10,171		927		1,120		—
Acquisition fees		—		—		450		50
Development fees		1,707		314		347-		—
Totals	$	42,135	$	7,569	$	6,792	$	377
Dollar amount of sales and refinancing before deducting payments to sponsor:
Cash	$	5,925		—		—		—
Notes		—		—		—		—
Amount paid to sponsor from sales and refinancing:
Selling commissions	$	422	$	124		—		—
Incentive fees		—		—		—		—
Other		—		—		—		—
Totals	$	422	$	124		—		—

A-3

Table III

OPERATING RESULTS OF PRIOR PROGRAMS

(UNAUDITED)

Prior Performance is not Indicative of Future Results

Table III summarizes the operating results of programs sponsored by Phillips Edison that have had offerings close during the five years ended December 31, 2011. For these programs, this table shows: the income or loss of such programs (based upon U.S. generally accepted accounting principles (“GAAP”)); the cash generated from operations, sales and refinancings; and information regarding cash distributions. All figures are as of or for the year ended December 31 of the year indicated.

A-4

Table III

OPERATING RESULTS OF PRIOR PROGRAMS (Continued)

(UNAUDITED)

Prior Performance is not Indicative of Future Results

	Phillips Edison Limited Partnership(4)
(in thousands)	2005			2006			2007			2008			2009			2010			2011
Gross revenues	$	85,295		$	113,282		$	175,683		$	210,681		$	199,433		$	190,016		$	197,771
Profit on sale of properties		6,104			7,889			3,620			264			(524	)		54,254			13,913
Other income (loss)		(4,165	)		(40	)		(122	)		(2,123	)		9,551			(51,202	)		(20,339	)
Less: Operating expenses(1)		34,359			44,092			71,678			96,315			86,134			84,307			79,883
Interest expense		32,341			47,218			84,444			110,143			75,465			70,261			65,245
Depreciation and amortization		29,325			38,298			71,955			92,578			80,221			63,939			59,498
Net income (loss) before non-controlling interests		(8,791	)		(8,477	)		(48,896	)		(90,214	)		(33,360	)		(25,799	)		(13,281	)
Net loss (income) allocated to non-controlling interests		—			9,817			31,802			55,112			19,511			58,275			12,316
Net income (loss)-GAAP basis	$	(8,791	)	$	1,340		$	(17,094	)	$	(35,102	)	$	(13,849	)	$	32,476		$	(965	)
Taxable (Loss) Income:(2)
–from operations	$	(1,377	)	$	4,182		$	3,180		$	(8,273	)	$	(3,293	)	$	(3,696	)	$	5,249
–from gain on sale		—			476			2,043			379			2,361			35,889			2,520
Cash generated from operations		11,661			20,146			32,135			35,272			44,296			46,743			35,364
Cash generated from sales		22,011			35,614			27,603			20,497			30,770			126,187			117,076
Cash generated from refinancing(3)		104,799			309,302			688,314			82,652			58,544			(19,935	)		(81,998	)
Total cash generated from operations, sales and refinancing		138,471			365,062			748,052			138,421			133,610			152,995			70,442
Less: Cash distributions to investors:
–from operating cash flow		11,661			16,735			17,675			18,617			10,857			8,853			15,643
–from sales and refinancing		3,890			—			—			—			—			—			—
–from other		—			—			—			—			—			—			—
Cash generated after cash distributions (3)		122,920			348,327			730,377			119,804			122,753			144,142			54,799
Less: Special items (not including sales and refinancing)		—			—			—			—			—			—			—
Cash generated after cash distributions and special items	$	122,920		$	348,327		$	730,377		$	119,804		$	122,753		$	144,142		$	54,799
Tax and distribution data per $1,000 invested
U.S. federal income tax results:
Ordinary income (loss)
–from operations	$	(6.18	)	$	18.79		$	14.29		$	(31.01	)	$	(12.34	)	$	(13.86	)	$	19.68
–from recapture		—			—			—			—			—			—			—
Capital gain (loss)		—			2.14			9.18			1.42			8.85			134.54			9.45
Cash distributions to investors
Source (on a GAAP basis)
–from investment income		—			5.61			—			—			—			37.00			—
–from return of capital		65.00			64.39			74.00			74.00			37.00			—			48.50
Total distribution on GAAP basis	$	65.00		$	70.00		$	74.00		$	74.00		$	37.00		$	37.00		$	48.50
Source (on cash basis)
–from sales		16.26			—			—			—			—			—			—
–from refinancings		—			—			—			—			—			—			—
–from operations		48.74			70.00			74.00			74.00			37.00			37.00			48.50
Total distributions on cash basis	$	65.00		$	70.00		$	74.00		$	74.00		$	37.00		$	37.00		$	48.50
Amounts (in percentage terms) remaining in program properties as of December 31, 2011																				61	%

⁽¹⁾  Operating expenses include all general and administrative expenses.

⁽²⁾  Program is compromised of partnerships, limited liability companies, real estate investment trusts and subchapter S corporations, which file tax returns for which the partners, members and stockholders are taxed on their respective shares of entity income, and accordingly, no provision for income taxes is included in the consolidated financial statements.

⁽³⁾  Cash generated from financing / refinancing includes original mortgage proceeds when assets were acquired.

⁽⁴⁾  Consolidated financial statements of Phillips Edison Limited Partnership and its subsidiaries. As well as being the general partner in all Phillips Edison-sponsored programs, Phillips Edison Limited Partnership has limited partner interests in the programs reported.

A-5

Table III

OPERATING RESULTS OF PRIOR PROGRAMS (Continued)

(UNAUDITED)

Prior Performance is not Indicative of Future Results

	Phillips Edison Shopping Center Fund III, L.P.
(in thousands)	2006			2007			2008			2009			2010			2011
Gross revenues	$	20,293		$	76,076		$	106,147		$	97,705		$	82,810		$	82,669
Profit (loss) on sale of properties		—			—			264			(551	)		3,077			6,535
Other loss		—			(30	)		(2,186	)		(1,694	)		(49,249	)		(9,993	)
Less: Operating expenses(1)		11,415			29,115			40,062			36,476			33,237			31,976
Interest expense		9,653			42,131			62,297			38,563			35,366			31,948
Depreciation and amortization		9,161			38,015			56,106			49,444			32,638			27,510
Net loss – GAAP basis	$	(9,936	)	$	(33,215	)	$	(54,240	)	$	(29,023	)	$	(64,603	)	$	(12,223	)
Taxable (Loss) Income:(2)
–from operations	$	(422	)	$	8,549		$	4,940		$	(3,889	)	$	988		$	(1,850	)
–from gain on sale		—			—			—			—			—			—
Cash generated (deficiency) from operations		(104	)		14,939			21,792			14,250			18,324			5,046
Cash generated (deficiency) from sales		—			—			1,778			4,956			14,395			96,145
Cash generated from refinancing(3)		275,355			605,075			(13,637	)		(3,280	)		(11,608	)		(91,672	)
Total cash generated from operations, sales and refinancing		275,251			620,014			9,933			15,926			21,111			9,519
Less: Cash distributions to investors:
–from operating cash flow		—			14,939			—			—			—			—
–from sales and refinancing		—			7,561			—			—			—			—
–from other		—			—			—			—			—			—
Cash generated after cash distributions		275,251			597,514			9,933			15,926			21,111			9,519
Less: Special items (not including sales and refinancing)		—			—			—			—			—			—
Cash generated after cash distributions and special items	$	275,251		$	597,514		$	9,933		$	15,926		$	21,111		$	9,519
Tax and distribution Data per $1,000 Invested
Federal income tax results:
Ordinary income (loss)
–from operations	$	(3.47	)	$	31.09		$	18.43		$	(14.51	)	$	3.69		$	(6.90	)
–from recapture		—			—			—			—			—			—
Capital gain (loss)		—			—			—			—			—			—
Cash distributions to investors
Source (on a GAAP basis)
–from investment income		—			56.55			—			—			—			—
–from return of capital		—			25.27			—			—			—			—
Total distribution on GAAP basis	$	—		$	81.82		$	—		$	—		$	—		$	—
Source (on cash basis)
–from sales	$	—		$	—		$	—		$	—		$	—		$	—
–from refinancings		—			27.49			—			—			—			—
–from operations		—			54.32			—			—			—			—
Total distributions on cash basis	$	—		$	81.82		$	—		$	—		$	—		$	—
Amounts (in percentage terms) remaining in program properties as of December 31, 2011																	81.4	%

⁽¹⁾  Operating expenses include all general and administrative expenses.

⁽²⁾  Program qualifies as a REIT under the Internal Revenue Code for federal income tax purposes. As such, the program is generally not subject to U.S. federal income tax to the extent it distributes its REIT taxable income to its stockholders.

⁽³⁾  Cash generated from financing / refinancing includes original mortgage proceeds and capital contributions when assets were acquired.

A-6

Table III

OPERATING RESULTS OF PRIOR PROGRAMS (Continued)

(UNAUDITED)

Prior Performance is not Indicative of Future Results

		Phillips Edison Shopping Center Fund IV, L.P.
(in thousands)		2007			2008			2009			2010			2011
Gross revenues		$	—		$	2,950		$	6,622		$	9,490		$	13,837
Profit on sale of properties			—			—			—			8,431			—
Other income (loss)			—			—			(1,390	)		(9,566	)		—
Less: Operating expenses(1)			509			4,066			5,049			6,033			5,778
Interest expense			—			1,533			2,278			2,692			1,769
Depreciation and amortization			—			1,351			2,679			3,809			5,265
Net (loss) income – GAAP basis		$	(509	)	$	(4,000	)	$	(4,774	)	$	(4,179	)	$	1,025
Taxable (Loss) Income:(2)
–from operations		$	—		$	(1,373	)	$	(87	)	$	(155	)	$	5,084
–from gain on sale	��		—			—			—			—			—
Cash generated (deficiency) from operations			336			(1,473	)		(730	)		1,940			6,049
Cash generated (deficiency) from sales			—			—			—			1,884			—
Cash generated from refinancing(3)			(217	)		49,524			14,093			51,813			14,719
Total cash generated from operations, sales and refinancing			119			48,051			13,363			55,637			20,768
Less: Cash distributions to investors:
–from operating cash flow			—			—			—			—			6,049
–from sales and refinancing			—			913			—			—			10,951
–from other			—			—			—			—			—
Cash generated after cash distributions(3)			119			47,138			13,363			55,637			3,768
Less: Special items (not including sales and refinancing)			—			—			—			—			—
Cash generated after cash distributions and special items		$	119		$	47,138		$	13,363		$	55,637		$	3,768
Tax and distribution data per $1,000 invested
U.S. federal income tax results:
Ordinary (loss) income
–from operations		$	—		$	(62.33	)	$	(3.41	)	$	21.94		$	92.91
–from recapture			—			—			—			—			—
Capital gain (loss)			—			—			—			—			—
Cash distributions to investors(4)
Source (on a GAAP basis)
–from investment income			—			—			—			—			171.24
–from return of capital			—			41.45			—			—			139
Total distribution on GAAP basis		$	—		$	41.45		$	—		$	—		$	310.67
Source (on cash basis)
–from sales		$	—		$	—		$	—		$	—		$	—
–from refinancings			—			41.45			—			—			220.18
–from operations			—			—			—			—			90.49
Total distributions on cash basis		$	—		$	41.45		$	—		$	—		$	310.67
Amounts (in percentage terms) remaining in program properties as of December 31, 2011															86	%

⁽¹⁾  Operating expenses include all general and administrative expenses.

⁽²⁾  Program qualifies as a REIT under the Internal Revenue Code for U.S. federal income tax purposes. To qualify as a REIT, the program must meet a number of organizational and operational requirements, including requirements to distribute at least 90% of the ordinary taxable income and to distribute to stockholders or pay tax on 100% of capital gains and to meet certain asset and income tests.

⁽³⁾  Cash generated from financing / refinancing includes original mortgage financing and subsequent financings.

⁽⁴⁾ As of this offering, this commingled fund is currently in its investment period and has not invested its entire committed capital. As such, as assets are identified for investment equity, capital will be called to fund the acquisition throughout the remainder of the investment period.

A-7

Table III

OPERATING RESULTS OF PRIOR PROGRAMS (Continued)

(UNAUDITED)

Prior Performance is not Indicative of Future Results

	Phillips Edison Strategic Investment Fund
(in thousands)	2007			2008			2009			2010			2011
Gross revenues	$	—		$	—		$	1,743		$	8,160		$	11,441
Profit on sale of properties		—			—			—			—			—
Other income (loss)		6			10			14,114			4,322			(2,089	)
Less: Operating expenses(1)		99			1,840			2,718			4,943			5,551
Interest expense		—			9			468			1,498			1,718
Depreciation and amortization		—			—			742			2,947			4,312
Net income (loss) – GAAP Basis	$	(93	)	$	(1,839	)	$	11,929		$	3,094		$	(2,229	)
Taxable income:(2)
–from operations	$	—		$	—		$	(1,468	)	$	(258	)	$	682
–from gain on sale		—			—			—			—			—
Cash generated (deficiency) from operations		(132	)		(1,826	)		1,318			5,639			5,597
Cash generated (deficiency) from sales		—			—			—			—			—
Cash generated from financing / refinancing(3)		7,204			2,783			60,261			41,238			16,171
Total cash generated from operations, sales and refinancing		7,072			957			61,579			46,877			21,768
Less: Cash distributions to investors:
–from operating cash flow		—			—			—			1,000			5,597
–from sales and refinancing		—			—			—			—			13,402
–from other		—			—			—			—			—
Cash generated after cash distributions(3)		7,072			957			61,579			45,877			2,769
Less: Special items (not including sales and refinancing)		—			—			—			—			—
Cash generated after cash distributions and special items	$	7,072		$	957		$	61,579		$	45,877		$	2,769
Tax and distribution data per $1,000 invested
U.S. federal income tax results:
Ordinary income (loss)
–from operations	$	—		$	—		$	(48.98	)	$	(3.99	)	$	12.57
–from recapture		—			—			—			—			—
Capital gain (loss)		—			—			—			—			—
Cash distributions to investors(4)
Source (on a GAAP basis)
–from investment income		—			—			—			15.46			154.81
–from return of capital		—			—			—			—			195.29
Total distribution on GAAP basis	$	—		$	—		$	—		$	15.46		$	350.10
Source (on cash basis)
–from sales	$	—		$	—		$	—		$	—		$	—
–from refinancings		—			—			—			—			260.08
–from operations		—			—			—			15.46			90.02
Total distributions on cash basis	$	—		$	—		$	—		$	15.46		$	350.10
Amounts (in percentage terms) remaining in program properties as of December 31, 2011														96	%

⁽¹⁾  Operating expenses include all general and administrative expenses.

⁽²⁾  Program qualifies as a REIT under the Internal Revenue Code for U.S. federal income tax purposes. As such, the program is generally not subject to federal income tax to the extent it distributes its REIT taxable income to its stockholders.

⁽³⁾  Cash generated from financing / refinancing includes original mortgage proceeds when assets were acquired.

⁽⁴⁾  As of this offering, this commingled fund is currently in its investment period and has not invested its entire committed capital. As such, as assets are identified for investment equity, capital will be called to fund the acquisition throughout the remainder of the investment period.

A-8

Table III

OPERATING RESULTS OF PRIOR PROGRAMS (Continued)

(UNAUDITED)

Prior Performance is not Indicative of Future Results

	Phillips Edison Strategic Investment Fund II
(in thousands)	2011
Gross revenues	$	600
Profit on sale of properties		—
Other income (loss)		—
Less: Operating expenses(1)		884
Interest expense		91
Depreciation and amortization		255
Net income (loss) – GAAP Basis	$	(630	)
Taxable income:(2)
–from operations	$	200
–from gain on sale		—
Cash generated (deficiency) from operations		542
Cash generated (deficiency) from sales		—
Cash generated from financing / refinancing(3)		20,054
Total cash generated from operations, sales and refinancing		20,596
Less: Cash distributions to investors:
–from operating cash flow		—
–from sales and refinancing		—
–from other		—
Cash generated after cash distributions(3)		20,596
Less: Special items (not including sales and refinancing)		—
Cash generated after cash distributions and special items	$	20,596
Tax and distribution data per $1,000 invested
U.S. federal income tax results:
Ordinary income
–from operations	$	17.64
–from recapture		—
Capital gain (loss)		—
Cash distributions to investors(4)
Source (on a GAAP basis)
–from investment income	$	—
–from return of capital		—
Total distribution on GAAP basis	$	—
Source (on cash basis)
–from sales	$	—
–from refinancings		—
–from operations		—
Total distributions on cash basis	$	—
Amounts (in percentage terms) remaining in program properties as of December 31, 2011		100	%

⁽¹⁾  Operating expenses include all general and administrative expenses.

⁽²⁾  Program qualifies as a REIT under the Internal Revenue Code for U.S. federal income tax purposes. As such, the program is generally not subject to federal income tax to the extent it distributes its REIT taxable income to its stockholders.

⁽³⁾  Cash generated from financing / refinancing includes original mortgage proceeds when assets were acquired.

⁽⁴⁾  As of this offering, this commingled fund is currently in its investment period and has not invested its entire committed capital. As such, as assets are identified for investment equity, capital will be called to fund the acquisition throughout the remainder of the investment period.

A-9

Table V

SALES AND DISPOSALS OF PROPERTIES

(UNAUDITED)

Prior Performance is not Indicative of Future Results

Table V presents summary information with respect to the results of sales or disposals of properties sponsored by Phillips Edison during the three years ended December 31, 2011. The table includes information about the sales proceeds received, the cash invested in the properties, the taxable gain or loss from the sales and the cash flow from the operation of the properties. Each of the programs represented in the table have or had investment objectives similar to ours.

						Selling Price, Net of Closing costs and GAAP Adjustments											Costs of Properties Including Closing and Soft Costs
	Property	Date Acquired		Date of Sale		Cash received net of closing costs			Mortgage balance at time of sale		Purchase money mortgage taken back by program		Adjustments resulting from application of GAAP		Total(1)		Original mortgage financing		Total acquisition cost, capital improvement closing and soft costs			Total		Excess (deficiency) of property operating cash receipts over cash expenditures total
Phillips Edison Shopping Center Fund III, LP
	Ashland Station		12/20/2006		11/13/2009		72,493			1,207,733		—		—		1,280,226		2,236,771		1,111,077			3,347,848		184,478
	Tops Plaza-Canandaaigua		8/20/2007		3/17/2010		4,094,538			4,171,783		—		—		8,266,321		5,102,233		161,392			5,263,626		1,073,218
	Family Station		6/27/2007		2/23/2010		115,099			4,496,054		—		—		4,611,152		3,705,000		2,028,206			5,733,206		399,858
	Forestdale Plaza		6/27/2007		4/28/2011		422,847			4,960,000		—		—		5,382,847		5,167,500		2,929,129			8,096,629		(1,252,083	)
	Genito		6/27/2007		4/28/2011		504,182			4,640,000		—		—		5,144,182		5,167,500		3,128,701			8,296,201		(256,125	)
	Stella Station		12/20/2006		4/30/2011		1,390,488			5,181,930		—		—		6,572,418		4,725,396		3,796,652			8,522,048		1,025,778
	Liberty Station		5/15/2006		4/30/2011		722,614			2,531,180		—		—		3,253,794		2,076,027		1,458,557			3,534,584		688,650
	Western Lights Station		9/19/2005		5/1/2011		8,819,672			12,629,067		—		—		21,448,739		9,182,570		15,787,913			24,970,483		6,178,195
	Northgate		11/1/2007		5/3/2011		—			13,170,505		—		—		13,170,505		13,822,517		2,820,071			16,642,588		(4,354,330	)
	Monroe Shopping Ctr		6/27/2007		5/27/2011		117,609			711,644		—		—		829,253		2,015,000		1,119,030			3,134,030		1,594,860
	Horizon Park		6/27/2007		7/15/2011		3,188,431			15,200,000		—		—		18,388,431		18,915,000		11,465,207			30,380,207		(5,323,112	)
	Bear Road Plaza		6/27/2007		8/23/2011		1,208,393			2,160,000		—		—		3,368,393		3,380,000		1,958,321			5,338,321		487,209
	Riverchase Station		6/6/2006		9/15/2011		2,696,392			10,400,000		—		—		13,096,392		10,520,534		6,695,991			17,216,525		3,573,418
	Del-Ton Plaza		6/27/2007		10/11/2011		526,817			3,680,000		—		—		4,206,817		3,770,000		2,136,602			5,906,602		591,302
	Hannaford		6/27/2007		12/20/2011		2,572,419			10,960,000		—		—		13,532,419		12,350,000		6,830,482			19,180,482		2,359,450
						$	26,451,993		$	96,099,896	$	—	$	—	$	122,551,889	$	102,136,047	$	63,427,333		$	165,563,380	$	6,970,766
Phillips Edison Shopping Center Fund IV, LP
	Village Shoppes at East Cherokee		8/22/2008		9/7/2010		—			15,784,000		—		—		15,784,000		15,784,000		2,971,188			18,755,188		(30,314	)
						$	—		$	15,784,000	$	—	$	—	$	15,784,000	$	15,784,000	$	2,971,188		$	18,755,188	$	(30,314	)
Phillips Edison Limited Partnership
	Vernal		3/28/2006		6/3/2009		1,061,767			2,989,002		—		—		4,050,769		343,486		3,366,678			3,710,163		97,448
	Brierhill & Churchville		12/2/2008		11/3/2009		1,177,336			4,340,101		—		—		5,517,437		1,879,941		3,146,861			5,026,802		96,994
	River Road Walgreen’s		1/5/2009		11/4/2009		742,839			4,862,030		—		—		5,604,869		3,190,074		1,722,670			4,912,745		6,924
	Idaho Falls		6/1/2007		12/16/2009		299,343			4,732,100		—		—		5,031,444		2,563,907		2,845,360			5,409,267		417,417
	Unser & McMahon Walgreen’s		6/27/2008		1/6/2010		297,246			4,896,106		—		—		5,193,353		5,057,379		364,621			5,422,000		69,148
	Renton		3/3/2008		3/12/2010		160,579			6,684,119		—		—		6,844,699		6,678,540		501,472			7,180,012		404,995
	Cape Henry Station		3/1/2003		6/15/2010		2,811,053			3,410,873		—		—		6,221,926		3,800,000		722,313			4,522,313		2,078,442
	Knollview		6/5/2005		7/16/2010		(410,815	)		2,104,083		—		—		1,693,268		2,100,000		162,645			2,262,645		(133,782	)
	Pablo Plaza Station		3/1/2003		8/31/2010		11,379,033			7,515,335		—		—		18,894,368		8,400,000		6,453,217			14,853,217		5,227,204
	Westbird Station		3/1/2003		8/31/2010		8,539,772			8,454,779		—		—		16,994,551		9,450,000		2,066,318			11,516,318		4,286,095
	Gunston Station		8/1/2001		11/22/2010		11,574,886			16,113,422		—		—		27,688,308		9,801,617		7,149,196			16,950,813		11,567,339
	Applewood Station		3/1/2003		11/2/2010		3,486,025			5,261,235		—		—		8,747,260		5,900,000		1,379,569			7,279,569		3,296,550
	Milford Station		9/1/1997		12/8/2010		531,990			—		—		—		531,990		2,142,566		267,849			2,410,415		(247,472	)
	Lake Stevens Northwest Walgreens		6/13/2008		10/19/2010		670,804			6,221,367		—		—		6,892,171		2,590,708		7,896,115			10,486,823		382,209
	River Road Northwest Retail		1/5/2009		10/15/2010		1,342,443			937,970		—		—		2,280,413		—		1,942,068			1,942,068		782,803
	Old Bridge & Smoketown Walgreens		12/27/2006		12/17/2010		1,771,878			3,132,513		—		—		4,904,391		—		4,395,801			4,395,801		22,182
	Springdale		9/22/1997		2/22/2011		1,244,667			—		—		—		1,244,667		1,012,500		2,252,884			3,265,384		564,861
	Fond du Lac		4/29/2005		4/13/2011		—			5,054,917		—		—		5,054,917		3,630,750		1,196,298			4,827,048		(1,222,974	)
	Queensbury		11/17/1998		8/12/2011		—			1,284,206		—		—		1,284,206		1,566,000		(86,274	)		1,479,726		(1,224,081	)
	Southern Hills		8/6/2007		12/1/2011		3,957,823			7,380,000		—		—		11,337,823		7,828,469		5,284,902			13,113,371		2,790,846
						$	50,638,671		$	95,374,159	$	—	$	—	$	146,012,830	$	77,935,937	$	53,030,564		$	130,966,500	$	29,263,148

⁽¹⁾  Phillips Edison Limited Partnership recognized capital gain on the properties that it sold; Phillips Edison Shopping Center Fund III, L.P. recognized ordinary gain on the properties that it sold.

A-10

TABLE I

EXPERIENCE IN RAISING AND INVESTING FUNDS FOR PUBLIC PROGRAM

PROPERTIES

(UNAUDITED)

Table I provides a summary of the experience of our AR Capital sponsor and its affiliates in raising and investing funds for American Realty Capital Trust, Inc. from its inception on August 17, 2007 to December 31, 2011, American Realty Capital New York Recovery REIT, Inc. from its inception on October 6, 2010 to December 31, 2011, American Realty Capital Healthcare Trust, Inc. from its inception on August 23, 2010 to December 31, 2011 and American Realty Capital Trust III, Inc. from its inception on October 15, 2010 to December 31, 2011. Information is provided as to the manner in which the proceeds of the offering have been applied, the timing and length of this offering and the time period over which the proceeds have been reinvested.

	American Realty Capital Trust, Inc.						American Realty Capital New York Recovery REIT, Inc.						American Realty Capital Healthcare Trust, Inc.						American Realty Capital  Trust III, Inc.
				Percentage of total Dollar Amount Raised						Percentage of total Dollar Amount Raised						Percentage of total Dollar Amount Raised						Percentage of total Dollar Amount Raised
	(dollars in thousands)						(dollars in thousands)						(dollars in thousands)						(dollars in thousands)
Dollar amount offered	$	1,500,000					$	1,500,000					$	1,500,000					$	1,500,000
Dollar amount raised		1,695,813						45,629						68,881						102,196
Dollar amount raised from non-public program and private investments		37,460	(1)					27,797	(2)					2,144	(3)					—
Dollar amount raised from sponsor and affiliates from sale of special partnership units, and 20,000 of common stock		200	(4)					200	(4)					200	(4)					200	(4)
Total dollar amount raised	$	1,733,473			100.00	%	$	73,626	(5)		100.00	% %	$	71,225	(5)		100.00	%	$	102,396	(5)		100.00	%
Less offering expenses:
Selling commissions and discounts retained by affiliates	$	168,269			9.71	%	$	6,232			8.46	% %		6,733			9.45	%		9,833			9.60	%
Organizational expenses		29,692	(6)		1.71	%		6,393			8.68	% %		5,575			7.83	%		6,107			5.96	%
Other		—			0.00	%		—			0.00	% %		—			0.00	%		—			0.00	%
Reserves		—			0.00	%		—			0.00	% %		—			0.00	%		—			0.00	%

A-11

	American Realty Capital Trust, Inc.						American Realty Capital New York Recovery REIT, Inc.						American Realty Capital Healthcare Trust, Inc.						American Realty Capital  Trust III, Inc.
				Percentage of total Dollar Amount Raised						Percentage of total Dollar Amount Raised						Percentage of total Dollar Amount Raised						Percentage of total Dollar Amount Raised
	(dollars in thousands)						(dollars in thousands)						(dollars in thousands)						(dollars in thousands)
Available for investment	$	1,535,512			88.58	%	$	61,001			82.85	% %	$	58,917			82.72	%	$	86,456			84.43	%
Acquisition costs:
Prepaid items related to purchase of property	$	—			0.00	%	$	—			0.00	% %		—			0.00	%		—			0.00	%
Cash down payment		1,420,117	(7)		81.92	%		47,105			63.98	% %		51,243			71.95	%		67,393			65.82	%
Acquisition fees		44,809			2.58	%		2,727			3.70	% %		5,568			7.82	%		7,082			6.92	%
Other		—			0.00	%		—			0.00	% %		—			0.00	%		—			0.00	%
Total acquisition costs	$	1,464,926			84.51	%	$	49,832			67.68	% %	$	56,811			79.76	%	$	74,475			72.73	%
Percentage leverage (mortgage financing divided by total acquisition costs)		49.3	%(8)					136.8	%(9)					216.1	%(10)					7.5	%(11)
Date offering began		3/18/2008						10/2/2009						2/18/2011						3/31/2011
Number of offerings in the year		1						1						1						1
Length of offerings (in months)		39						33						33						33
Months to invest 90% of amount available for investment (from beginning of the offering)		39						NA	(12)					NA	(12)					NA	(12)

⁽¹⁾  American Realty Capital Trust, Inc. sold non-controlling interests in certain properties in nine separate arrangements. The total amount contributed in these arrangements was $24.5 million. In addition, $13.0 million was raised in a private offering of debt securities through ARC Income Properties II, Inc. The structure of these arrangements and program is such that they are required to be consolidated with the results of American Realty Capital Trust, Inc. and therefore are included with this program. ARC Income Properties II, Inc is also included as a stand-alone program and is included separately in information about private programs.

⁽²⁾  American Realty Capital New York Recovery REIT, Inc. sold a non-controlling interest in a property. The total amount contributed in this arrangement was $13.0 million, In addition, $15.0 million was raised in a private offering of convertible preferred securities.

⁽³⁾  American Realty Capital Healthcare Trust, Inc. sold non-controlling interests in three properties. The total amount contributed in these arrangements was $2.1 million.

⁽⁴⁾  Represents initial capitalization of the company by the sponsor and was prior to the effectiveness of the common stock offering.

⁽⁵⁾  Offerings are not yet completed, funds are still being raised.

⁽⁶⁾  Excludes offering costs from proceeds assumed from the distribution reinvestment plan.

⁽⁷⁾  Includes $12.0 million investment made in joint venture with American Realty Capital New York Recovery REIT, Inc. for the purchase of real estate and $17.3 million of other investments in common stock.

⁽⁸⁾  Total acquisition costs of the properties exclude $721.6 million purchased with mortgage financing. Including mortgage financing, the total acquisition purchase price was $2,112.1 million. The leverage ratio was 34.2% at December 31, 2011.

A-12

⁽⁹⁾  Total acquisition costs of the properties exclude $68.2 million purchased with mortgage financing. Including mortgage financing, the total acquisition purchase price was $124.2 million. The leverage ratio was 54.9% at December 31, 2011.

⁽¹⁰⁾  Total acquisition costs of the properties exclude $110.7 million purchased with mortgage financing. Including mortgage financing, the total acquisition purchase price was $164.5 million. The leverage ratio was 67.3% at December 31, 2011.

⁽¹¹⁾  Total acquisition costs of the properties exclude $5.1 million purchased with mortgage financing. Including mortgage financing, the total acquisition purchase price was $72.5 million. The leverage ratio was 7.0% at December 31, 2011.

⁽¹²⁾  As of December 31, 2011 these offerings are still in the investment period and have not invested 90% of the amount offered. Assets are acquired as equity becomes available.

A-13

TABLE I

EXPERIENCE IN RAISING AND INVESTING FUNDS FOR NON-PUBLIC PROGRAM PROPERTIES

(UNAUDITED)

Table I provides a summary of the experience of our AR Capital sponsor and its affiliates in raising and investing funds in ARC Income Properties, LLC from its inception on June 5, 2008 to its termination on September 6, 2011, ARC Income Properties II, LLC from its inception on August 12, 2008 to its termination on May 16, 2011, ARC Income Properties III, LLC from its inception on September 29, 2009 to its termination on September 6, 2011, ARC Income Properties IV, LLC from its inception on June 23, 2010 to December 31, 2011 and ARC Growth Fund, LLC from its inception on July 24, 2008 to its termination on December 31, 2010. Information is provided as to the manner in which the proceeds of the offerings have been applied, the timing and length of this offering and the time period over which the proceeds have been invested.

	ARC Income Properties, LLC						ARC Income Properties II, LLC						ARC Income Properties, III, LLC							ARC Income Properties, IV, LLC						ARC Growth Fund, LLC
(dollars in thousands)				Percentage of Total Dollar Amount Raised						Percentage of Total Dollar Amount Raised						Percentage of Total Dollar Amount Raised							Percentage of Total Dollar Amount Raised						Percentage of Total Dollar Amount Raised
Dollar amount offered	$	19,537					$	13,000					$	11,243						$	5,350					$	7,850
Dollar amount raised		19,537						13,000						11,243					��		5,215						5,275
Dollar amount contributed from sponsor and affiliates (1)		1,975						—						—							—						2,575
Total dollar amount raised	$	21,512			100.00	%	$	13,000			100.00	%	$	11,243			100.00	%		$	5,215			100.00	%	$	7,850			100.00	%
Less offering expenses:
Selling commissions and discounts retained by affiliates	$	1,196			5.56	%	$	323			2.48	%	$	666			5.92	%		$	397			7.61	%	$	—			0.00	%
Organizational expenses		—			0.00	%		—			0.00	%		—			0.00	%			—			0.00	%		—			0.00	%
Other		—			0.00	%		—			0.00	%		—			0.00	%			—			0.00	%		—			0.00	%
Reserves		—			0.00	%		—			0.00	%		—			0.00	%			—			0.00	%		—			0.00	%
Available for investment	$	20,316			94.44	%	$	12,677			97.52	%	$	10,577			94.08	%		$	4,818			92.39	%	$	7,850			100.00	%
Acquisition costs:
Prepaid items and fees related to purchased property	$	—			0.00	%	$	—			0.00	%	$	—			0.00	%		$	—			0.00	%	$	—			0.00	%
Cash down payment		11,302			52.54	%		9,086			69.89	%		9,895			88.01	%			4,780			91.66	%		5,440			69.30	%
Acquisition fees		7,693			35.76	%		2,328			17.91	%		682			6.07	%			—			0.00	%		2,410			30.70	%
Other		—			0.00	%		—			0.00	%		—			0.00	%			—			0.00	%		—			0.00	%
Total acquisition costs	$	18,995	(2)		88.30	%	$	11,414	(3)		87.80	%	$	10,577	(4)		94.08	%		$	4,780	(5)		91.66	%	$	7,850	(6)		100.00	%
Percentage leverage (mortgage financing divided by total acquisition costs)		434.97	%					292.61	%					141.19	%						344.35	%					253.20	%

A-14

	ARC Income Properties, LLC			ARC Income Properties II, LLC			ARC Income Properties, III, LLC			ARC Income Properties, IV, LLC			ARC Growth Fund, LLC
(dollars in thousands)			Percentage of Total Dollar Amount Raised			Percentage of Total Dollar Amount Raised			Percentage of Total Dollar Amount Raised			Percentage of Total Dollar Amount Raised			Percentage of Total Dollar Amount Raised
Date offering began		6/09/2008			9/17/2008			9/29/2009			6/23/2011			7/24/2008
Number of offerings in the year		1			1			1			1			1
Length of offerings (in months)		7			4			3			4			1
Months to invest 90% of amount available for investment (from the beginning of the offering)		7			4			3			4			1

⁽¹⁾  Includes separate investment contributed by sponsor and affiliates for purchase of portfolio properties and related expenses.

⁽²⁾  Total acquisition costs of properties exclude $82.6 million purchased with mortgage financing. Including borrowings, the total acquisition purchase price was $101.6 million. The leverage ratio was 83.6% at December 31, 2010. This program ended when it contributed its real estate assets and certain liabilities to American Realty Capital Properties, Inc. on September 6, 2011.

⁽³⁾  Total acquisition costs of properties exclude $33.4 million purchased with mortgage financing. Including borrowings, the total acquisition purchase price was $101.6 million. The leverage ratio was 60.1% at December 31, 2010. This program ended when the notes were repaid on May 16, 2011. The related properties are still owned by American Realty Capital Trust, Inc.

⁽⁴⁾  Total acquisition costs of properties exclude $14.9 million purchased with mortgage financing and $3.5 million related to a final purchase price adjustment which was initially held in escrow until conditions for its release were satisfied in 2010. Including borrowings, the total acquisition purchase price was $25.9 million. The leverage ratio was 59.2% at December 31, 2010. This program ended when it contributed its real estate assets and certain liabilities to American Realty Capital Properties, Inc. on September 6, 2011.

⁽⁵⁾  Total acquisition costs of properties exclude a $16.5 million purchased with assumed mortgage financing. Including borrowings, the total acquisition purchase price was $21.2 million. The leverage ratio was 77.5% at December 31, 2011.

⁽⁶⁾  Total acquisition costs of properties exclude a $20.0 million purchased with assumed mortgage financing. Including borrowings and $36.3 million purchased with proceeds from the sale of properties, the total acquisition purchase price was $63.6 million. The program was concluded at December 31, 2010.

A-15

TABLE II

COMPENSATION TO SPONSOR FROM PUBLIC PROGRAM PROPERTIES

(UNAUDITED)

Table II summarizes the amount and type of compensation paid to our AR Capital sponsor and its affiliates for American Realty Capital Trust, Inc. from its inception on August 17, 2007 to December 31, 2011, American Realty Capital New York Recovery REIT, Inc. from its inception on October 6, 2009 to December 31, 2011, American Realty Capital Healthcare Trust, Inc. from its inception on August 23, 2010 to December 31, 2011 and American Realty Capital Trust III, Inc. from its inception on October 15, 2010 to December 31, 2011.

(dollars in thousands)	American Realty Capital Trust, Inc.		American Realty Capital New York Recovery REIT, Inc.			American Realty Capital Healthcare Trust, Inc.			American Realty Capital Trust III, Inc.
Date offering commenced		3/18/2008		10/2/2009			2/18/2011			3/31/2011
Dollar amount raised	$	1,733,473	$	73,626		$	71,225		$	102,396
Amount paid to sponsor from proceeds of offering
Underwriting fees	$	168,269	$	6,232		$	6,733		$	9,833
Acquisition fees:
Real estate commissions	$	—	$	—		$	—		$	—
Advisory fees – acquisition fees	$	21,121	$	1,242		$	1,645		$	725
Other – organizational and offering costs	$	15,944	$	3,997		$	3,179		$	4,383
Other – financing coordination fees	$	9,257	$	671		$	1,279		$	51
Other – acquisition expense reimbursements	$	12,081	$	890		$	1,054		$	567
Dollar amount of cash generated from operations before deducting payments to sponsor	$	60,876	$	(972	)	$	(2,161	)	$	(1,177	)
Actual amount paid to sponsor from operations:
Property management fees	$	—	$	—		$	—		$	—

A-16

(dollars in thousands)	American Realty Capital Trust, Inc.		American Realty Capital New York Recovery REIT, Inc.		American Realty Capital Healthcare Trust, Inc.		American Realty Capital Trust III, Inc.
Partnership management fees		—		—		—		—
Reimbursements		—		—		—		—
Leasing commissions		—		—		—		—
Other (asset management fees)		7,071		—		—		—
Total amount paid to sponsor from operations	$	7,071	$	—	$	—	$	—
Dollar amount of property sales and refinancing before deducting payment to sponsor
Cash	$	1,485	$	—	$	—	$	—
Notes	$	—	$	—	$	—	$	—
Amount paid to sponsor from property sale and refinancing:
Real estate commissions	$	45	$	—	$	—	$	—
Incentive fees	$	—	$	—	$	—	$	—
Other – Financing coordination fees	$	—	$	—	$	—	$	—

A-17

TABLE II

COMPENSATION TO SPONSOR FROM NON-PUBLIC PROGRAM PROPERTIES

(UNAUDITED)

Table II summarizes the amount and type of compensation paid to our AR Capital sponsor and its affiliates for ARC Income Properties, LLC from its inception on June 5, 2008 to its termination on September 6, 2011, ARC Income Properties II, LLC from its inception on August 12, 2008 to its termination on May 16, 2011, ARC Income Properties III, LLC from its inception on September 29, 2009 to its termination on September 6, 2011. ARC Income Properties IV, LLC from its inception on June 23, 2010 to December 31, 2010 and ARC Growth Fund, L.P. from its inception on July 24, 2008 to its termination on December 31, 2010.

(dollars in thousands)	ARC Income Properties, LLC			ARC Income Properties II, LLC			ARC Income Properties III, LLC			ARC Income Properties IV, LLC			ARC Growth Fund, LLC
Date offering commenced		6/05/2008			8/12/2008			9/29/2009			6/23/2011			7/24/2008
Dollar amount raised	$	21,512	(1)	$	13,000	(2)	$	11,243	(2)	$	5,215	(2)	$	7,850	(3)
Amount paid to sponsor from proceeds of offering
Underwriting fees	$	785		$	323		$	666		$	397		$	—
Acquisition fees
Real estate commissions	$	—		$	—		$	—		$	—		$	—
Advisory fees – acquisition fees	$	2,959		$	423		$	662		$	—		$	1,316
Other – organizational and offering costs	$	—		$	—		$	—		$	—		$	—
Other – financing coordination fees	$	939		$	333		$	149		$	—		$	45
Dollar amount of cash generated from operations before deducting payments to sponsor	$	(3,091	)	$	2,291		$	(724	)	$	(691	)	$	(5,325	)
Actual amount paid to sponsor from operations:
Property management fees	$	—		$	—		$	—		$	—		$	—
Partnership management fees		—			—			—			—			—
Reimbursements		—			—			—			—			—
Leasing commissions		—			—			—			—			—
Other (explain)		—			—			—			—			—
Total amount paid to sponsor from operations	$	—		$	—		$	—		$	—		$	—
Dollar amount of property sales and refinancing before deducting payment to sponsor
Cash	$	—		$	—		$	—		$	—		$	13,560
Notes		—			—			—			—		$	18,281
Amount paid to sponsor from property sale and refinancing:
Real estate commissions		—			—			—			—			—
Incentive fees		—			—			—			—			—
Other (disposition fees)		—			—			—			—		$	1,169
Other (refinancing fees)		—			—			—			—		$	39

⁽¹⁾  Includes $19.5 million raised from investors and $2.0 million raised from sponsor and affiliates.

A-18

⁽²⁾ Amounts raised from investors.

⁽³⁾ Includes $5.2 million raised from investors and $2.6 million raised from the sponsor and affiliates.

A-19

TABLE III

OPERATING RESULTS OF PUBLIC PROGRAM PROPERTIES

(UNAUDITED)

Table III summarizes the operating results of American Realty Capital Trust, Inc., American Realty Capital New York Recovery REIT, Inc., Phillips Edison – ARC Shopping Center REIT, Inc., American Realty Capital Healthcare Trust, Inc. from its inception on August 23, 2010 to December 31, 2011 and American Realty Capital Trust III, Inc. from its inception on October 15, 2010 to December 31, 2011 as of the dates indicated.

(dollars in thousands)	American Realty Capital Trust, Inc.												American Realty Capital New York Recovery REIT, Inc.									American Realty Capital Healthcare Trust, Inc.						American Realty Capital Trust III, Inc.
	Year Ended December 31, 2011			Year Ended December 31, 2010			Year Ended December 31, 2009			Year Ended December 31, 2008			Year Ended December 31, 2011			Year Ended December 31, 2010			Period From October 6, 2009 (Date of Inception) to December  31, 2009			Year Ended December 31, 2011			Period From August 23, 2010 (Date of Inception) to December  31, 2010			Year Ended December 31, 2011			Period From October 15, 2010 (Date of Inception) to December  31, 2010
Gross revenues	$	129,982		$	45,233		$	15,511		$	5,549		$	7,535		$	2,378		$	—		$	3,314		$	—		$	795		$	—
Profit (loss) on sales of properties		(44	)		143			—			—						—			—			—			—			—			—
Less:
Operating expenses		45,041			15,265			1,158			2,002			5,848			2,139			1			4,707			1			2,385			—
Interest expense		39,912			18,109			10,352			4,774			3,912			1,070			—			1,189			—			35			—
Depreciation		54,764			17,280			6,581			2,534			500			500			—			1,174			—			414			—
Amortization		14,176			4,374			1,735			522			540			540			—			361			—			85			—
Net income (loss) before noncontrolling interests–GAAP Basis		(23,955	)		(9,652	)		(4,315	)		(4,283	)		(3,265	)		(1,871	)		(1	)		(4,117	)		(1	)		(2,124	)		—
Loss from discontinued operations		—			—			—			—			—			—			—			—			—			—			—
Net income (loss) attributable to noncontrolling interests–GAAP Basis		(1,121	)		(181	)		49			—			(154	)		109			—			32			—			—			—
Net income (loss) GAAP basis	$	(25,076	)	$	(9,833	)	$	(4,266	)	$	(4,283	)	$	(3,419	)	$	(1,762	)	$	(1	)	$	(4,085	)	$	(1	)	$	(2,124	)	$	—
Taxable income (loss)
From operations	$	(25,032	)	$	(9,976	)	$	(4,266	)	$	(4,283	)	$	(3,419	)	$	(1,762	)	$	(1	)	$	(4,085	)	$	(1	)	$	(2,124	)	$	—
From gain (loss) on sale		(44	)		143			—			—			—			—			—			—			—			—			—
Cash generated from (used by) operations (1)		49,525			9,864		$	(2,526	)	$	4,013			263			(1,234	)		(1	)		(2,161	)		(1	)		(1,177	)		—
Cash generated from sales		581			900			—			—			—			—			—			—			—			—			—

A-20

(dollars in thousands)	American Realty Capital Trust, Inc.											American Realty Capital New York Recovery REIT, Inc.								American Realty Capital Healthcare Trust, Inc.						American Realty Capital Trust III, Inc.
	Year Ended December 31, 2011		Year Ended December 31, 2010			Year Ended December 31, 2009			Year Ended December 31, 2008			Year Ended December 31, 2011		Year Ended December 31, 2010			Period From October 6, 2009 (Date of Inception) to December  31, 2009			Year Ended December 31, 2011			Period From August 23, 2010 (Date of Inception) to December  31, 2010			Year Ended December 31, 2011			Period From October 15, 2010 (Date of Inception) to December  31, 2010
Cash generated from refinancing		—		—			—			—			21,300		—			—			—			—			—			—
Cash generated from operations, sales and refinancing	$	50,106	$	10,764		$	(2,526	)	$	4,013		$	21,563	$	(1,234	)	$	(1	)	$	(2,161	)	$	(1	)	$	(1,177	)	$	—
Less: Cash distribution to investors (3)
From operating cash flow		47,524		9,864		$	1,818		$	296			263		—			—			—			—			—			—
From sales and refinancing		—		900			—			—			1,331		—			—			—			—			294			—
From other (2)		—		647			70			—			431		—			—			376			—			—			—
Cash generated after cash distributions	$	2,582	$	(647	)	$	(4,414	)	$	3,717		$	19,538	$	(1,234	)	$	(1	)	$	(2,537	)	$	(1	)	$	(1,471	)	$	—
Less: Special items
Cash generated after cash distributions and special items	$	2,582	$	(647	)	$	(4,414	)	$	3,717		$	19,538	$	(1,234	)	$	(1	)	$	(2,537	)	$	(1	)	$	(1,471	)	$	—
Tax and distribution data per $1,000 invested
Federal income tax results: (4)(5)(6)
Ordinary income (loss)
from operations	$	—	$	(23.55	)	$	(22.75	)	$	(0.33	)	$	—	$	(15.42	)	$	—		$	—		$	—		$	—		$	—
from recapture		—		—			—			—			—		—			—			—			—			—			—
Capital gain (loss)		—		—			—			—			—		—			—			—			—			—			—
Cash distributions to investors
Source (on GAAP Basis)
Investment income	$	—	$	1.44		$	—		$	—		$	31.13	$	—		$	—		$	—		$	—		$	2.87		$	—
Return of capital		43.50		16.78			(13.06	)		1.22			16.23		—			—			5.28			—			—			—
Source (on GAAP basis)
Sales	$	—	$	1.44		$	—		$	—		$	31.13	$	—		$	—		$	—		$	—		$	2.87		$	—
Refinancing		—		—			—			—			—		—			—			—			—			—			—
Operations		43.50		15.75			12.57			1.22			6.15		—			—			—			—			—			—
Other		—		—			—			—			10.08		—			—			5.28			—			—			—

⁽¹⁾  Includes cash paid for interest and acquisition costs

⁽²⁾  Distributions paid from proceeds from the sale of common stock.

⁽³⁾ There were no distributions made for public programs as of December 31, 2010 for all public programs except American Realty Capital Trust, Inc.

A-21

⁽⁴⁾ Based on amounts raised as of the end of each period.

⁽⁵⁾ Federal tax results for the year ended December 31, 2011 is not available as of the date of this filing

⁽⁶⁾  There were no public investors for this program as of December 31, 2009 for all public programs except American Realty Capital Trust, Inc.

A-22

TABLE III

OPERATING RESULTS OF NON-PUBLIC PROGRAM PROPERTIES

(UNAUDITED)

Table III summarizes the consolidated operating results of ARC Income Properties, LLC and ARC Income Properties II, LLC, ARC Income Properties III, LLC, ARC Income Properties IV, LLC, and ARC Growth Fund, LLC as of the dates indicated.

(dollars in thousands)	ARC Income Properties, LLC												ARC Income Properties II, LLC												ARC Income Properties III, LLC
	Period from January 1, 2011 to September 6, 2011(1)			Year Ended December 31, 2010			Year Ended December 31, 2009			Period from June 5, 2008 (Date of Inception) to December 31, 2008			Five Months ended May 16, 2011(2)			Year Ended December 31, 2010			Year Ended December 31, 2009			Period from August 12, 2008 to December 31, 2008			Period from January 1, 2011 to September 6, 2011(1)			Year Ended December 31, 2010			Period from September 29, 2009 to December 31, 2009
Gross revenues	$	4,652		$	7,008		$	5,347		$	1,341		$	1,383		$	3,507		$	3,423		$	337		$	1,548		$	2,237		$	341
Profit (loss) on sales of properties		—												(44	)		143									—
Less:
Operating expenses		122			320			2,847			5			45			113			7			—			51			36			918
Interest expense		4,504			6,525			4,993			688			1,690			2,151			2,161			162			1,434			1,359			186
Interest expense –investors notes		1,323			1,935			1,583			381			430			1,167			1,024			11			671			986			201
Depreciation		2,346			3,519			2,676			909			710			1,748			1,758			200			495			642			127
Amortization		527			976			886			—			268			663			670			—			187			249			42
Net income (loss) – GAAP Basis	$	(4,170	)	$	(6,267	)	$	(7,638	)	$	(642	)	$	(1,804	)	$	(2,192	)	$	(2,197	)	$	(36	)	$	(1,290	)	$	(1,035	)	$	(1,133	)
Taxable income (loss)
From operations	$	(4,170	)	$	(6,267	)	$	(7,638	)	$	(642	)	$	(1,760	)	$	(2,335	)	$	(2,197	)	$	(36	)	$	(1,290	)	$	(1,035	)	$	(1,133	)
From gain (loss) on sale	$	—		$	—		$	—		$	—		$	(44	)	$	143		$	—		$	—		$	—		$	—		$	—
Cash generated from (used by) operations (3)	$	(1,297	)	$	(1,896	)	$	(2,349	)	$	1,154		$	(782	)	$	560		$	(2,282	)	$	4,013		$	(608	)	$	(33	)	$	(691	)
Cash generated from sales		—			—			—			—			—			246			—			—			—			—			—
Cash generated from refinancing		—			—			—			—			—			—			—			—			—			—			—
Cash generated from operations, sales and refinancing	$	(1,297	)	$	(1,896	)	$	(2,349	)	$	1,154		$	(782	)	$	806		$	(2,282	)	$	4,013		$	(608	)	$	(33	)	$	(691	)
Less: Cash interest payments made to investors
From operating cash flow	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—
From sales and refinancing	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—
From other	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—
Cash generated after cash distributions	$	(1,297	)	$	(1,896	)	$	(2,349	)	$	1,154		$	(782	)	$	806		$	(2,282	)	$	4,013		$	(608	)	$	(33	)	$	(691	)
Less: Special items
Cash generated after cash distributions and special items	$	(1,297	)	$	(1,896	)	$	(2,349	)	$	1,154		$	(782	)	$	806		$	(2,282	)	$	4,013		$	(608	)	$	(33	)	$	(691	)

(dollars in thousands)	ARC Income Properties IV, LLC						ARC Growth Fund, LLC
	Year Ended December 31, 2011			June 24, 2010 (Date of Inception) to December 31, 2010 Period from June 24, 2010			Year Ended December 31, 2011			Year Ended December 31, 2010			Year Ended December 31, 2009			Period from July 25, 2008 to December 31, 2008
Gross revenues	$	1,549		$	94		$	—		$	95		$	185		$	8
Profit (loss) on sales of properties		—						—			(251	)		(4,682	)		9,746
Less:
Operating expenses		86			489			—			234			528			2,004
Interest expense		1,134			100			—			—			1,494			597
Interest expense –investors notes		446			90			—			—			—			—
Depreciation		642			54			—			195			592			344
Amortization		218			18			—			—			—			—
Net income (loss) – GAAP Basis	$	(977	)	$	(657	)	$	—		$	(585	)	$	(7,111	)	$	6,809
Taxable income (loss)
From operations	$	(977	)	$	(443	)	$	—		$	(334	)	$	(2,429	)	$	(2,937	)
From gain (loss) on sale	$	—		$	—		$	—		$	(251	)	$	(4,682	)	$	9,746
Cash generated from (used by) operations (3)	$	(117	)	$	(691	)	$	—		$	(330	)	$	(1,769	)	$	(3,226	)
Cash generated from sales		—			—			—			—			(447	)		11,158
Cash generated from refinancing		—			—			—			—			—			—
Cash generated from operations, sales and refinancing	$	(117	)	$	(691	)	$	—		$	(330	)	$	(2,216	)	$	7,932
Less: Cash interest payments made to investors
From operating cash flow	$	—		$	—		$	—		$	—		$	—		$	—
From sales and refinancing	$	—		$	—		$	—		$	—		$	—		$	—
From other	$	—		$	—		$	—		$	—		$	—		$	—
Cash generated after cash distributions	$	(117	)	$	—		$	(691	)	$	(330	)	$	(2,216	)	$	7,932
Less: Special items
Cash generated after cash distributions and special items	$	(117	)	$	—		$	(691	)	$	(330	)	$	(2,216	)	$	7,932

A-23

⁽¹⁾ On September 6, 2011, the real estate assets and certain liabilities of ARC Income Properties, LLC and ARC Income Properties III, LLC were contributed in the formation transaction of ARC Properties, Inc.

⁽²⁾ The program ended on May 16, 2011, when the notes were repaid. These properties are still owned by American Realty Capital Trust, Inc

⁽³⁾ Includes cash paid for interest including interest payments to investors

Non-public programs are combined with other entities for U.S. federal income tax reporting purposes, therefore, U.S. Federal income tax results for these programs are not presented.

A-24

TABLE IV

RESULTS OF COMPLETED PUBLIC PROGRAMS OF THE SPONSOR AND ITS AFFILIATES

NOT APPLICABLE

A-25

TABLE IV

RESULTS OF COMPLETED NON-PUBLIC PROGRAMS OF THE SPONSOR AND ITS AFFILIATES

(UNAUDITED)

Table IV summarizes the results of ARC Income Properties, LLC, ARC Income Properties II, LLC, ARC Income Properties III, LLC and ARC Growth Fund, LLC, the completed programs of our AR Capital sponsor as of December 31, 2011.

(Dollars in thousands) Program name	ARC Income Properties, LLC			ARC Income Properties II, LLC			ARC Income Properties III, LLC			ARC Growth Fund, LLC
Dollar amount raised	$	21,512		$	13,000		$	11,243		$	7,850
Number of properties purchased		62			50			1			52
Date of closing of offering		June 2008			September 2008			September 2009			July 2008
Date of first sale of property		September 2011	(2)		May 2011	(3)		September 2011	(2)		July 2008
Date of final sale of property		September 2011	(2)		May 2011	(3)		September 2011	(2)		December 2010
Tax and distribution data per $1,000 investment through 12/31/2010(1)
Federal income tax results:
Ordinary income (loss)
- From operations	$	—		$	—		$	—		$	—
- From recapture	$	—		$	—		$	—		$	—
Capital gain (loss)	$	—		$	—		$	—		$	—
Deferred gain	$	—		$	—		$	—		$	—
Capital	$	—		$	—		$	—		$	—
Ordinary	$	—		$	—		$	—		$	—
Cash distributions to investors
Source (on GAAP basis)
- Investment income		—			—			—			—
- Return of capital	$	19,537		$	13,000		$	11,243		$	7,226
Source (on cash basis)
- Sales	$	19,537		$	13,000		$	11,243		$	7,226
- Refinancing	$	—		$	—		$	—		$	—
- Operations	$	—		$	—		$	—		$	—
- Other
Receivable on net purchase money financing	$	—		$	—		$	—		$	—

⁽¹⁾ Programs is combined with other entities for U.S. federal income tax reporting purposes, therefore, U.S. Federal income tax results for this program is not presented.

⁽²⁾ The real estate assets and certain liabilities of these programs were contributed to ARC Properties, Inc. as part of its formation transaction.

⁽³⁾ The notes used to purchase these properties were paid off in May 2011, these properties are still owned by American Realty Capital Trust, Inc.

A-26

TABLE V

SALES OR DISPOSALS OF PUBLIC PROGRAM PROPERTIES

(UNAUDITED)

Table V summarizes the sales or disposals of properties by American Realty Capital Trust, Inc. as of December 31, 2011 (in thousands).

					Selling Price, Net of Closing costs and GAAP Adjustments										Cost of Properties Including Closing and Soft Costs
Property	Date Acquired		Date of Sale		Cash received net of closing costs		Mortgage balance at time  of sale		Purchase money mortgage taken back by program (1)		Adjustments resulting from application of GAAP (2)		Total  (3)		Original Mortgage Financing		Total acquisition cost, capital improvement, closing and soft costs (4)		Total		Excess (deficiency) of Property Operating Cash Receipts Over Cash Expenditures (5)
American Realty Capital Trust, Inc.:
PNC Bank Branch – New Jersey		November-08		September 2010	$	388	$	512	$	—	$	—	$	900	$	512	$	187	$	699	$	1,035
PNC Bank Branch – New Jersey		November-08		January 2011	$	79	$	502	$	—	$	—	$	581	$	502	$	178	$	680	$	1,305

¹⁾ No purchase money mortgages were taken back by the program.

²⁾ Financial information was prepared in accordance with GAAP, therefore GAAP adjustments are not applicable.

³⁾ All taxable gains were categorized as capital gains. None of these sales were reported on the installment basis.

⁴⁾ Amounts shown do not include a pro rata share of the offering costs. There were no carried interests received in Lieu of commissions on connection with the acquisition of property.

⁵⁾ Amounts exclude the amounts included under “Selling Price Net of Closing Costs and GAAP Adjustments” or “Costs of Properties Including Closing Costs and Soft Costs” and exclude costs incurred in administration of the program not related to the operations of the property.

A-27

TABLE V

SALES OR DISPOSALS OF NON-PUBLIC PROGRAM PROPERTIES

(UNAUDITED)

Table V provides summary information on the results of sales or disposals of properties by non-public prior programs having similar investment objectives to ours. All figures below are through December 31, 2011.

(Dollars in thousands)					Selling Price Net of Closing Costs and GAAP Adjustments											Costs of properties Including Closing Costs and Soft Costs
Property	Date Acquired		Date of Sale		Cash Received (cash deficit) Net of Closing Costs			Mortgage Balance at Time of Sale		Purchase Money Mortgage Taken Back by Program (2)		Adjustments Resulting From Application of GAAP (3)		Total  (4)		Original Mortgage Financing		Total Acquisition Costs, Capital Improvement Costs, Closing and Soft Costs (5)		Total		Excess (Deficit)  of Property Operating Cash Receipts Over Cash Expenditures (6)
ARC Income Properties II, LLC:
PNC Bank Branch –New Jersey		November-08		September-10	$	388		$	512	$	—	$	—	$	900	$	512	$	187	$	699	$	1,035
PNC Bank Branch –New Jersey		November-08		January 2011		79			502		—		—		581		502		178		680		1,305
					$	467		$	1,014	$	—	$	—	$	1,481	$	1,014	$	365	$	1,379	$	2,340
ARC Growth Fund, LLC:
Bayonet Point, FL		July-08		July-08	$	628		$	—	$	—	$	—	$	628	$	—	$	642	$	642	$	—
Boca Raton, FL		July-08		July-08		2,434			—		—		—		2,434		—		2,000		2,000		—
Bonita Springs, FL		July-08		May-09		(459	)		1,207		—		—		748		1,207		543		1,750		(29	)
Clearwater, FL		July-08		September-08		253			539		—		—		792		539		371		910		(3	)
Clearwater, FL		July-08		October-08		(223	)		582		—		—		359		582		400		982		(3	)
Destin, FL		July-08		July-08		1,358			—		—		—		1,358		—		1,183		1,183		—
Englewood, FL		July-08		November-08		138			929		—		—		1,067		929		632		1,561		(13	)
Fort Myers, FL		July-08		July-08		2,434			—		—		—		2,434		—		1,566		1,566		—
Naples, FL		July-08		July-08		2,727			—		—		—		2,727		—		1,566		1,566		—
Palm Coast, FL		July-08		September-08		891			1,770		—		—		2,661		1,770		-530		1,240		(8	)
Pompano Beach, FL		July-08		October-08		1,206			2,162		—		—		3,368		2,162		-411		1,751		(8	)
Port St. Lucie, FL		July-08		August-09		(60	)		654		—		—		594		654		648		1,302		(40	)
Punta Gorda, FL		July-08		July-08		2,337			—		—		—		2,337		—		2,143		2,143		—
Vero Beach, FL		July-08		February-09		87			830		—		—		917		830		565		1,395		(13	)
Cherry Hill, NJ		July-08		July-08		1,946			—		—		—		1,946		—		2,225		2,225		—
Cranford, NJ		July-08		July-08		1,453			—		—		—		1,453		—		725		725		—
Warren, NJ		July-08		July-08		1,375			—		—		—		1,375		—		1,556		1,556		—
Westfield, NJ		July-08		July-08		2,539			—		—		—		2,539		—		2,230		2,230		—
Lehigh Acres, FL		July-08		August-09		(207	)		758		—		—		551		758		752		1,510		(28	)
Alpharetta, GA		July-08		December-08		98			914		—		—		1,012		914		617		1,531		(9	)
Atlanta, GA		July-08		September-08		825			1,282		—		—		2,107		1,282		862		2,144		(27	)
Columbus, GA		July-08		December-08		(43	)		111		—		���		68		111		85		196		(3	)
Duluth, GA		July-08		July-08		1,851			—		—		—		1,851		—		1,457		1,457		—
Oakwood, GA		July-08		September-08		49			898		—		—		947		898		607		1,505		(1	)
Riverdale, GA		July-08		August-09		(104	)		471		—		—		367		471		286		757		(12	)
Laurinburg, NC		July-08		July-08		188			—		—		—		188		—		197		197		—

A-28

(Dollars in thousands)					Selling Price Net of Closing Costs and GAAP Adjustments											Costs of properties Including Closing Costs and Soft Costs
Property	Date Acquired		Date of Sale		Cash Received (cash deficit) Net of Closing Costs			Mortgage Balance at Time of Sale		Purchase Money Mortgage Taken Back by Program (2)		Adjustments Resulting From Application of GAAP (3)		Total  (4)		Original Mortgage Financing		Total Acquisition Costs, Capital Improvement Costs, Closing and Soft Costs (5)		Total		Excess (Deficit)  of Property Operating Cash Receipts Over Cash Expenditures (6)
Haworth, NJ		July-08		July-08		1,781			—		—		—		1,781		—		1,834		1,834		—
Fredericksburg, VA		August-08		August-08		2,432			—		—		—		2,432		—		2,568		2,568		—
Dallas, PA		August-08		August-08		1,539			—		—		—		1,539		—		366		366		—
Virginia Beach, VA		August-08		August-08		1,210			—		—		—		1,210		—		930		930		—
Baytown, TX		August-08		August-08		3,205			—		—		—		3,205		—		1,355		1,355		—
Bradenton, FL		November-08		November-08		778			—		—		—		778		—		748		748		—
Sarasota, FL		November-08		November-08		1,688			—		—		—		1,688		—		867		867		—
Tuscaloosa, AL		November-08		November-08		580			—		—		—		580		—		242		242		—
Palm Harbor, FL		November-08		November-08		1,064			—		—		—		1,064		—		790		790		—
Reading, PA		November-08		November-08		137			—		—		—		137		—		248		248		—
St. Augustine, FL		November-08		November-08		1,936			—		—		—		1,936		—		1,428		1,428		—
Cumming, GA		December-08		December-08		1,227			—		—		—		1,227		—		810		810		—
Suffolk, VA		December-08		February-09		115			172		—		—		287		172		129		301		(1	)
Titusville, FL		December-08		December-08		321			—		—		—		321		—		260		260		—
West Caldwell, NJ (1)		December-08		September-09		333			898		—		—		1,231		357		358		715		15
Palm Coast, FL		December-08		December-08		507			—		—		—		507		—		599		599		—
Mableton, GA		December-08		December-08		676			—		—		—		676		—		696		696		—
Warner Robins, GA		January-09		January-09		149			—		—		—		149		—		257		257		—
Philadelphia (1)		January-09		October-09		291			1,474		—		—		1,765		552		1,105		1,657		3
Stockholm, NJ		December-08		November-09		(29	)		240		—		—		211		240		438		678		(46	)
Sebastian, FL		July-08		December-09		(104	)		654		—		—		550		654		1,302		1,956		(102	)
Fort Myers, FL		July-08		December-09		(314	)		795		—		—		481		795		1,582		2,377		(113	)
Seminole, FL		July-08		March-10		—			1,098						1,098		1,098		1,061		2,159		(48	)
Port Richey, FL (1)		July-08		December-10		—			544		—		—		544		544		1,086		1,630		(71	)
Punta Gorda, FL (1)		July-08		December-10		—			690		—		—		690		690		1,550		2,240		(72	)
Lawrenceville, GA (1)		July-08		December-10		—			695		—		—		695		695		1,381		2,076		(73	)
Norristown, PA (1)		July-08		December-10		—			471		—		—		471		471		943		1,414		(83	)
					$	43,243		$	20,838	$	—	$	—	$	64,081	$	19,375	$	47,850	$	67,225	$	(788	)

⁽¹⁾ Sale of property was to related party.

⁽²⁾ No purchase money mortgages were taken back by program.

⁽³⁾ Financial information for programs was prepared in accordance with GAAP, therefore GAAP adjustments are not applicable.

⁽⁴⁾ All taxable gains were categorized as capital gains. None of these sales were reported on the installment basis.

⁽⁵⁾ Amounts shown do not include a pro rata share of the offering costs. There were no carried interests received in lieu of commissions on connection with the acquisition of property.

⁽⁶⁾ Amounts exclude the amounts included under “Selling Price Net of Closing Costs and GAAP Adjustments” or “Costs of Properties Including Closing Costs and Soft Costs” and exclude costs incurred in administration of the program not related to the operations of the property.

A-29

APPENDIX A-1: PRIOR PERFORMANCE OF AMERICAN FINANCIAL REALTY TRUST

AMERICAN FINANCIAL REALTY TRUST

CONSOLIDATED STATEMENTS OF OPERATIONS

Years Ended December 31, 2006, 2005 and 2004

(In thousands, except per share data)

	Year Ended December 31,
	2006			2005			2004
Revenues:
Rental income	$	253,485		$	219,689		$	148,695
Operating expense reimbursements		166,712			155,181			81,101
Interest and other income		6,425			5,202			3,143
Total revenues		426,622			380,072			232,939
Expenses:
Property operating expenses:
Ground rents and leasehold obligations		14,336			13,427			8,726
Real estate taxes		42,868			35,232			21,659
Property and leasehold impairments		5,500			144			446
Other property operating expenses		166,310			142,148			73,730
Total property operating expenses		229,014			190,951			104,561
Marketing, general and administrative		24,934			24,144			23,888
Broken deal costs		176			1,220			227
Repositioning		9,065			—			—
Amortization of deferred equity compensation		8,687			10,411			9,078
Outperformance plan – contingent restricted share component		—			—			(5,238	)
Severance and related accelerated amortization of deferred compensation		21,917			4,503			1,857
Interest expense on mortgages and other debt		142,432			120,514			72,121
Depreciation and amortization		126,307			115,439			74,427
Total expenses		562,532			467,182			280,921
Loss before net gain on sale of land, equity in loss from joint venture, net loss on investments, minority interest and discontinued operations		(135,910	)		(87,110	)		(47,982	)
Gain on sale of land		2,043			1,596			80
Equity in loss from joint venture		(1,397	)		—			—
Net loss on investments		—			(530	)		(409	)
Loss from continuing operations before minority interest		(135,264	)		(86,044	)		(48,311	)
Minority interest		2,686			1,984			1,835
Loss from continuing operations		(132,578	)		(84,060	)		(46,476	)
Discontinued operations:
Loss from operations before yield maintenance fees, net of minority interest of $1,850, $3,062 and $114 for the years ended December 31, 2006, 2005 and 2004, respectively		(79,174	)		(29,182	)		(1,252	)
Yield maintenance fees, net of minority interest of $15,564, $16 and $103 for the years ended December 31, 2006, 2005 and 2004, respectively		(46,402	)		(567	)		(3,060	)
Net gains on disposals, net of minority interest of $74,046, $562 and $934 for the years ended December 31, 2006, 2005 and 2004 respectively		237,556			20,194			28,543
Income (loss) from discontinued operations		111,980			(9,555	)		24,231
Net loss	$	(20,598	)	$	(93,615	)	$	(22,245	)
Basic and diluted income (loss) per share:
From continuing operations	$	(1.04	)	$	(0.71	)	$	(0.45	)
From discontinued operations	$	0.87		$	(0.07	)	$	0.23
Total basic and diluted loss per share	$	(0.17	)	$	(0.78	)	$	(0.22	)

A-30

AMERICAN FINANCIAL REALTY TRUST

CONSOLIDATED STATEMENTS OF CASH FLOWS

Years Ended December 31, 2006, 2005 and 2004

(In thousands)

	Year Ended December 31,
	2006			2005			2004
Cash flows from operating activities:
Net loss	$	(20,598	)	$	(93,615	)	$	(22,245	)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation		137,420			138,990			93,241
Minority interest		53,946			(4,500	)		(1,118	)
Amortization of leasehold interests and intangible assets		36,351			38,887			18,145
Amortization of above- and below-market leases		1,160			(120	)		1,539
Amortization of deferred financing costs		13,708			12,656			5,006
Amortization of deferred compensation		13,031			13,440			10,273
Amortization of discount on pledged treasury securities		(359	)		—			—
Non-cash component of Outperformance Plan		—			—			(5,238	)
Non-cash compensation charge		273			262			244
Impairment charges		65,116			3,581			4,060
Net equity in loss from joint venture		1,397			—			—
Net gain on sales of properties and lease terminations		(315,077	)		(23,006	)		(30,076	)
Net loss on sales of investments		—			530			409
Increase in restricted cash		(3,792	)		(17,646	)		(21,246	)
Leasing costs		(18,154	)		(8,404	)		(17,349	)
Payments received from tenants for lease terminations		1,947			440			2,061
Decrease (increase) in operating assets:
Tenant and other receivables, net		(23,405	)		(19,601	)		(22,055	)
Prepaid expenses and other assets		(2,777	)		(81	)		(16,466	)
Increase (decrease) in operating liabilities:
Accounts payable		4,447			(709	)		3,138
Accrued expenses and other liabilities		(3,034	)		(10,469	)		44,972
Deferred revenue and tenant security deposits		31,711			50,002			71,325
Net cash (used in) provided by operating activities		(26,689	)		80,637			118,620
Cash flows from investing activities:
Payments for acquisitions of real estate investments, net of cash acquired		(192,669	)		(806,951	)		(2,006,703	)
Capital expenditures		(50,043	)		(41,559	)		(15,786	)
Proceeds from sales of real estate and non-real estate assets		1,421,613			125,583			245,990
(Increase) decrease in restricted cash		590			1,601			(10,461	)
Investment in joint venture		(23,300	)		—			—
Sales of investments		1,116			21,240			52,880
Purchases of investments		(33,082	)		(659	)		(10,032	)
Net cash provided by (used in) investing activities		1,124,225			(700,745	)		(1,744,112	)
Cash flows from financing activities:
Repayments of mortgages, bridge notes payable and credit facilities		(1,207,580	)		(594,063	)		(274,398	)
Proceeds from mortgages, bridge notes payable and credit facilities		327,878			1,108,652			1,531,425
Proceeds from issuance of convertible senior notes, net		—			—			434,030
Payments for deferred financing costs, net		(2,118	)		(838	)		(25,758	)
Proceeds from common share issuances, net		1,185			244,442			7,552
Redemption of Operating Partnership units		—			(4,405	)		(31,112	)
Contributions by limited partners		—			353			—
Dividends and distributions		(221,140	)		(134,395	)		(116,799	)
Net cash (used in) provided by financing activities		(1,101,775	)		619,746			1,524,940
Decrease in cash and cash equivalents		(4,239	)		(362	)		(100,552	)
Cash and cash equivalents, beginning of year		110,245			110,607			211,159
Cash and cash equivalents, end of year	$	106,006		$	110,245		$	110,607
Supplemental cash flow and non-cash information:
Cash paid for interest	$	248,170		$	166,533		$	76,582
Cash paid for income taxes	$	687		$	24		$	1,693
Debt assumed in real estate acquisitions	$	—		$	78,645		$	48,072
Operating Partnership units issued to acquire real estate	$	—		$	—		$	35,867
Non-cash acquisition costs	$	—		$	2,367		$	—

A-31

APPENDIX A-2: RESULTS OF NICHOLAS S. SCHORSCH’S COMPLETED PROGRAMS

(unaudited)

Year	Number of Properties Acquired		Aggregate Purchase Price of Properties Acquired		Number of Properties Sold		Aggregate Gross Proceeds from Sale of Properties		Aggregate Net Gain  on Sales		Number of Properties Sold to AFRT		Aggregate Gross Proceeds from Sale of Properties to AFRT		Aggregate Net Gain on Sales to AFRT
1998		105	$	22,373,000		15	$	8,054,000	$	4,227,000		—	$	—	$	—
1999		33		18,825,000		16		8,418,000		4,468,000		—		—		—
2000		8		142,931,000		33		21,871,000		8,934,000		—		—		—
2001		71		24,126,000		45		22,921,000		4,107,000		—		—		—
2002		59		64,030,000		63		32,130,000		11,377,000		93		230,500,000		N/A	(1)
2003		—		—		11		54,347,000		2,567,000		—		—		—
Total		276	$	272,285,000		183	$	147,741,000	$	35,680,000		93	$	230,500,000	$	—

⁽¹⁾ The consideration received was principally limited partnership units in AFRT’s operating partnership and some cash. The net aggregate gain on the sale to AFRT can not be determined since the registrant has no information as to what each investor did with his or her limited partnership units after the initial transfer to AFRT in 2002.

A-32

SUPPLEMENTAL INFORMATION – The prospectus of Phillips Edison – ARC Shopping Center REIT Inc. consists of this sticker, the Prospectus dated November 22, 2011 and Supplement No. 8 dated April 27, 2012.

Supplement No. 8 includes:

• operating information, including the status of the offering, portfolio data, information regarding our current leverage ratio, selected financial data, distribution information, dilution information, information about our share repurchase program, and compensation to our advisor, our sub-advisor, our dealer manager, and their affiliates;

• update regarding our Prospectus Summary;

• updates regarding risk factors;

• updated information regarding volume discounts;

• updated information regarding the prior performance of programs operated by our sponsors, including prior performance tables, as of December 31, 2011;

• “Experts” information; and

• information incorporated by reference.