THE COMPANIES
American Realty Capital Properties, Inc. and Tiger Acquisition, LLC
American Realty Capital Properties, Inc., or ARCP, is a Maryland corporation incorporated in December 2010 that qualifies as a real estate investment trust, or REIT, commencing with its initial taxable year ended December 31, 2011. ARCP was formed to acquire and own single-tenant, freestanding commercial real estate primarily subject to medium-term net leases with high credit quality tenants. In July 2011, ARCP commenced an initial public offering on a “reasonable best efforts” basis, which closed on September 6, 2011. ARCP common stock began trading on the NASDAQ Capital Market under the symbol “ARCP” on September 7, 2011.
Substantially all of ARCP’s business is conducted through ARC Properties Operating Partnership, L.P., or the ARCP OP, of which ARCP is the sole general partner.
As of September 30, 2012, excluding one vacant property classified as held for sale, ARCP owned 124 properties consisting of 2.2 million square feet, 100% leased with a weighted average remaining lease term of 6.8 years. In constructing its portfolio, ARCP is committed to diversification (industry, tenant and geography). As of September 30, 2012, rental revenues derived from investment grade tenants and tenants affiliated with investment grade entities as determined by a major rating agency approximated 99% (the rating of each parent company has been attributed to its wholly owned subsidiary for purposes of this disclosure). ARCP’s strategy encompasses receiving the majority of its revenue from investment grade tenants as ARCP further acquires properties and enters into (or assumes) medium-term lease arrangements.
In connection with the merger, ARCP will internalize certain property level management and leasing services and accounting activities, and in connection with such internalization, American Realty Capital Advisors III, LLC, or the ARCT III Advisor, will sell to the ARCP OP certain furniture, fixtures, equipment and other assets used by the ARCT III Advisor in connection with managing the property-level business and operations and accounting functions of American Realty Capital Trust III, Inc., or ARCT III, and American Realty Capital Operating Partnership III, L.P., or the ARCT III OP.
ARCP’s principal executive offices are located at 405 Park Avenue, 15th Floor, New York, New York 10022, and its telephone number is (212) 415-6500.
The entity into which ARCT III will merge, or the Merger Sub, is a Delaware limited liability company and a direct wholly owned subsidiary of ARCP that was formed for the purpose of entering into the merger agreement.
American Realty Capital Trust III, Inc.
ARCT III is a Maryland corporation incorporated in October 2010 that qualifies as a REIT commencing with its initial taxable year ended December 31, 2011. ARCT III is a non-traded REIT. ARCT III was formed to acquire a diversified portfolio of commercial real estate, which consists primarily of freestanding single tenant properties net leased to credit worthy tenants. In March 2011, ARCT III commenced an initial public offering on a “reasonable best efforts” basis to sell up to 150.0 million shares of common stock, excluding 25.0 million shares issuable pursuant to a distribution reinvestment plan, offered at a price of $10.00 per share, subject to certain volume and other discounts, which we refer to as the ARCT III IPO. In September 2011, ARCT III commenced real estate operations. The ARCT III IPO closed in September 2012. As of September 30, 2012, ARCT III had 175.4 million shares of common stock outstanding, including unvested restricted shares and shares issued pursuant to ARCT III’s distribution reinvestment plan.
Substantially all of ARCT III’s business is conducted through the ARCT III OP, of which ARCT III is the sole general partner.
As of September 30, 2012, ARCT III owned 382 properties comprised of 7.9 million square feet, which were 100% leased with a weighted average remaining lease term of 12.7 years. In constructing the portfolio, ARCT III has been committed to diversification by industry, tenant and geography.
ARCT III’s principal executive offices are located at 405 Park Avenue, 15th Floor, New York, New York 10022, and its telephone number is (212) 415-6500.
1
ARCT III and ARCP each were sponsored, directly or indirectly, by AR Capital, LLC, or ARC. The ARCT III Advisor is a Delaware limited liability company wholly owned by ARC. ARC Properties Advisors, LLC, or the ARCP Manager, is a Delaware limited liability company wholly owned by ARC and is ARCP’s external manager. ARC and its affiliates, including the ARCT III Advisor and ARCP Manager, provide investment, management and advisory services, as well as certain acquisition and debt capital services to ARCT III and ARCP, as applicable. ARCT III and ARCP pay management fees and certain other fees to, and reimburse certain expenses of, the ARCT III Advisor and ARCP Manager, respectively. Affiliates of ARC also provide similar services for American Realty Capital New York Recovery REIT, Inc., Phillips Edison — ARC Shopping Center REIT, Inc., American Realty Capital — Retail Centers of America, Inc., American Realty Capital Healthcare Trust, Inc., American Realty Capital Daily Net Asset Value Trust, Inc., American Realty Capital Global Trust, Inc., American Realty Capital Healthcare Trust II, Inc., a development stage REIT, and American Realty Capital Trust IV, Inc. Certain of these ARC-sponsored REITs have investment strategies substantially similar to those of ARCT III, ARCP and the combined company.
The Combined Company
ARCT III’s and ARCP’s properties consist primarily of freestanding single-tenant commercial properties leased to investment grade (as determined by major credit rating agencies) and other creditworthy tenants that are diversified by tenant, industry and geography. Both ARCP’s and ARCT III’s portfolios of real estate investment properties (excluding one vacant property held by ARCP) were 100% leased as of September 30, 2012. ARCT III’s portfolio focuses on entering into (or assuming) long-term lease arrangements and targets assets at or below replacement cost, while ARCP focuses on entering into (or assuming) medium-term leases and purchasing properties with vintage in-place rents at valuations significantly below replacement cost. As of September 30, 2012, ARCT III owned 382 properties consisting of 7.9 million square feet, which were 100% leased with a weighted average remaining lease term of 12.7 years. As of September 30, 2012, rental revenues derived by ARCT III from investment grade tenants and tenants affiliated with investment grade entities as determined by a major rating agency approximated 80% (the rating of each parent company has been attributed to its wholly owned subsidiary for purposes of this disclosure). As of September 30, 2012, excluding one vacant property classified as held for sale, ARCP owned 124 properties consisting of 2.2 million square feet, which were 100% leased with a weighted average remaining lease term of 6.8 years. As of September 30, 2012, rental revenues derived by ARCP from investment grade tenants and tenants affiliated with investment grade entities as determined by a major rating agency approximated 99% (the rating of each parent company has been attributed to its wholly owned subsidiary for purposes of this disclosure). The surviving entity in the merger will own a portfolio that that uniquely combines ARCT III’s portfolio of properties with stable income from high credit quality tenants, with ARCP’s portfolio, which has substantial growth opportunities. The long-term business plan for the combined company contemplates the combined portfolio consisting of approximately 70% long-term leases and 30% medium-term leases, with an average remaining lease term of 10 to 12 years. The combined portfolio is additionally expected to develop growth potential from below market leases.
After the consummation of the merger, the combined company will have access to up to $850 million of financing, consisting of a $650 million credit facility (under which ARCT III has obtained a commitment for $385.0 million, and which contains an “accordion” feature to allow ARCT III, subject to certain conditions, to request additional commitments in an amount not to exceed $350.0 million), borrowings under which will be subject to borrowing base availability, and an additional credit facility in the amount of $200.0 million (of which $200.0 million is committed but subject to reduction by up to $125.0 million to the extent the committing lender participates in the accordion feature of the $650.0 million credit facility).
2
Property Portfolio Information
At September 30, 2012, ARCP owned a diversified portfolio:
| • | of 124 properties, excluding one vacant property classified as held for sale; |
| • | with an occupancy rate of 100%; |
| • | leased to 14 different retail and other commercial enterprises doing business in 10 separate industries; |
| • | with approximately 2.2 million square feet of leasable space; and |
| • | with an average leasable space per property of approximately 17,700 square feet. |
At September 30, 2012, ARCT III owned a diversified portfolio:
| • | with an occupancy rate of 100%; |
| • | leased to 27 different retail and other commercial enterprises doing business in 14 separate industries; |
| • | with approximately 7.9 million square feet of leasable space; and |
| • | with an average leasable space per property of approximately 20,600 square feet. |
Combined Property Portfolio
As of September 30, 2012, ARCP and ARCT III, on a pro forma basis, owned a portfolio with the following characteristics:
| • | 506 properties, including 124 ARCP properties at September 30, 2012 and 382 ARCT III properties at September 30, 2012; |
| • | leased to 33 different retail and other commercial enterprises doing business in 17 separate industries; |
| • | approximately 10.1 million square feet of leasable space; and |
| • | an average leasable space per property of approximately 19,900 square feet. |
The following table lists tenants whose annualized rental income on a straight-line basis represent greater than 10% of the total annualized rental income on a straight-line basis for the pro forma portfolio properties of ARCP and ARCT III as of September 30, 2012.
 | | |
| Tenant | | September 30, 2012 |
| FedEx | | | 10.1 | % |
| Citizens Bank | | | 11.9 | % |
| Dollar General | | | 12.3 | % |
3
Set forth below are summary financial statements of the parent of the lessee of the FedEx properties included in ARCP’s and ARCT III’s portfolio on a pro forma basis as described above. FedEx Corporation currently files its financial statements in reports filed with the U.S. Securities and Exchange Commission, or the Commission, and the following summary financial data regarding FedEx Corporation are taken from such filings:
| | | | | | | | |
| | Six Months
Ended
November 30,
2012
(Unaudited) | | Year Ended |
| (Amounts in Millions) | | May 31, 2012
(Audited) | | May 31, 2011
(Audited) | | May 31, 2010
(Audited) |
Statements of Operations Data
| | | | | | | | | | | | | | | | |
| Revenues | | $ | 21,899 | | | $ | 42,680 | | | $ | 39,304 | | | $ | 34,734 | |
| Operating income | | | 1,460 | | | | 3,186 | | | | 2,378 | | | | 1,998 | |
| Net income | | | 897 | | | | 2,032 | | | | 1,452 | | | | 1,894 | |
| | | | | | | | |
| (Amounts in Millions) | | November 30,
2012
(Unaudited) | | May 31,
2012
(Audited) | | May 31,
2011
(Audited) | | May 31,
2010
(Audited) |
Consolidated Condensed Balance Sheets
| | | | | | | | | | | | | | | | |
| Total assets | | $ | 31,312 | | | $ | 29,903 | | | $ | 27,385 | | | $ | 24,902 | |
| Long-term debt | | | 2,241 | | | | 1,250 | | | | 1,667 | | | | 1,668 | |
| Total common stockholders’ investment | | | 15,543 | | | | 14,727 | | | | 15,220 | | | | 13,811 | |
Set forth below are summary financial statements of the parent guarantor of the Dollar General properties included in ARCP's and ARCT III's portfolio on a pro forma basis as described above. Dollar General Corporation currently files its financial statements in reports filed with the Commission, and the following summary financial data regarding Dollar General Corporation are taken from such filings:
| | | | | | | | |
| | For the 39
Weeks Ended
November 2,
2012
(Unaudited) | | Fiscal Year Ended |
| (Amounts in Thousands) | | February 3,
2012
(Audited) | | January 28,
2011
(Audited) | | January 29,
2010
(Audited) |
Consolidated Condensed Statements of Income
| | | | | | | | | | | | | | | | |
| Net sales | | $ | 11,814,507 | | | $ | 14,807,188 | | | $ | 13,035,000 | | | $ | 11,796,380 | |
| Operating profit | | | 1,132,927 | | | | 1,490,804 | | | | 1,274,065 | | | | 953,258 | |
| Net income | | | 635,240 | | | | 766,685 | | | | 627,857 | | | | 339,442 | |
| | | | | | | | |
| (Amounts in Thousands) | | November 2,
2012
(Unaudited) | | February 3,
2012
(Audited) | | January 28,
2011
(Audited) | | January 29,
2010
(Audited) |
Consolidated Condensed Balance Sheets
| | | | | | | | | | | | | | | | |
| Total assets | | $ | 10,273,677 | | | $ | 9,688,520 | | | $ | 9,546,222 | | | $ | 8,863,519 | |
| Long-term obligations | | | 3,023,367 | | | | 2,617,891 | | | | 3,287,070 | | | | 3,399,715 | |
| Total liabilities | | | 5,538,815 | | | | 5,020,025 | | | | 5,491,743 | | | | 5,473,221 | |
| Total shareholders’ equity | | | 4,734,862 | | | | 4,668,495 | | | | 4,054,479 | | | | 3,390,298 | |
4
Set forth below are summary financial statements of the parent of the lessee of the Citizens Bank properties included in ARCP's and ARCT III's portfolio on a pro forma basis as described above. RBS Citizens, N.A. currently makes its financial statements available on the Federal Deposit Insurance Corporation website, and the following summary financial data regarding RBS Citizens, N.A. are taken from such filings:
| | | | | | | | |
| | Nine Months
Ended
September 30,
2012
(Unaudited) | | Fiscal Year Ended |
| (Amounts in millions) | | December 31,
2011
(Audited) | | December 31,
2010
(Audited) | | December 31,
2009
(Audited) |
Consolidated Condensed Statements of Income
| | | | | | | | | | | | | | | | |
| Total interest income | | $ | 4,873 | | | $ | 3,484 | | | $ | 4,008 | | | $ | 4,868 | |
| Net interest income after provision for credit losses | | | 3,523 | | | | 1,230 | | | | 1,289 | | | | 494 | |
| Net income (loss) | | | 843 | | | | 345 | | | | (39 | ) | | | (600 | ) |
| | | | | | | | |
| (Amounts in millions) | | September 30,
2012
(Unaudited) | | December 31,
2011
(Audited) | | December 31,
2010
(Audited) | | December 31,
2009
(Audited) |
Consolidated Condensed Balance Sheets
| | | | | | | | | | | | | | | | |
| Total assets | | $ | 107,214 | | | $ | 106,941 | | | $ | 107,836 | | | $ | 116,921 | |
| Total liabilities | | | 88,455 | | | | 88,830 | | | | 90,920 | | | | 100,321 | |
| Total shareholders’ equity | | | 18,759 | | | | 18,111 | | | | 16,916 | | | | 16,600 | |
All of the following property portfolio information is provided to illustrate the combined property portfolio of ARCP and ARCT III post-merger. This information includes an illustration of the combined portfolio by industry, property type and geography, as well as a combined lease expiration schedule. The ARCP information represents quarterly information for the 124 properties owned at September 30, 2012. The ARCT III information represents quarterly information for the 382 properties owned at September 30, 2012.
5
Industry Diversification
The following table sets forth certain information regarding the property portfolios classified according to the business of the respective tenants, expressed as a percentage of total rental revenue:
Percentage of Rental Revenue
| | | | | | |
| Industries | | ARCP(1) | | ARCT III(2) | | Combined Total |
| Auto Retail | | | 2.3 | % | | | 2.6 | % | | | 2.5 | % |
| Auto Services | | | — | | | | 0.6 | % | | | 0.5 | % |
| Consumer Goods | | | 7.9 | % | | | — | | | | 1.7 | % |
| Consumer Products | | | — | | | | 19.7 | % | | | 15.6 | % |
| Discount Retail | | | 8.0 | % | | | 23.2 | % | | | 20.0 | % |
| Freight | | | 5.5 | % | | | 16.7 | % | | | 14.3 | % |
| Gas/Convenience | | | — | | | | 1.2 | % | | | 0.9 | % |
| Government Services | | | 11.4 | % | | | 3.1 | % | | | 4.8 | % |
| Healthcare | | | — | | | | 4.5 | % | | | 3.5 | % |
| Home Maintenance | | | 11.2 | % | | | — | | | | 2.4 | % |
| Medical Office | | | — | | | | 1.9 | % | | | 1.5 | % |
| Pharmacy | | | 5.3 | % | | | 9.6 | % | | | 8.7 | % |
| Restaurant | | | — | | | | 5.0 | % | | | 4.0 | % |
| Retail Banking | | | 33.6 | % | | | 8.4 | % | | | 13.8 | % |
| Specialty Retail | | | 12.6 | % | | | 2.3 | % | | | 4.4 | % |
| Storage Facility | | | 2.2 | % | | | — | | | | 0.5 | % |
| Supermarket | | | — | | | | 1.2 | % | | | 0.9 | % |
| Totals | | | 100.0 | % | | | 100.0 | % | | | 100.0 | % |
| (1) | Includes annualized rental revenue for all properties owned by ARCP at September 30, 2012. |
| (2) | Includes annualized rental revenue for all properties owned by ARCT III at September 30, 2012. |
Property Type Diversification
The following table sets forth certain property type information regarding the property portfolios (dollars in thousands):
ARCP
| | | | | | | | |
| Property Type | | Number of Properties | | Approximate Leasable Square Feet | | Quarterly Rental Revenue(1) | | Percentage of Rental Revenue |
| Retail | | | 108 | | | | 749,800 | | | $ | 2,520 | | | | 50.1 | % |
| Distribution | | | 10 | | | | 1,218,500 | | | | 1,826 | | | | 36.3 | |
| Office | | | 5 | | | | 103,900 | | | | 573 | | | | 11.4 | |
| Storage | | | 1 | | | | 126,700 | | | | 111 | | | | 2.2 | |
| Totals | | | 124 | | | | 2,198,900 | | | $ | 5,030 | | | | 100.0 | % |
6
ARCT III
| | | | | | | | |
| Property Type | | Number of Properties(2) | | Approximate Leasable Square Feet | | Quarterly Rental Revenue(2) | | Percentage of Rental Revenue |
| Retail | | | 343 | | | | 2,732,800 | | | $ | 9,929 | | | | 53.4 | % |
| Distribution | | | 24 | | | | 4,886,500 | | | | 7,657 | | | | 41.1 | |
| Office | | | 15 | | | | 239,800 | | | | 1,024 | | | | 5.5 | |
| Totals | | | 382 | | | | 7,859,100 | | | $ | 18,610 | | | | 100.0 | % |
Combined
| | | | | | | | |
| Property Type | | Number of Properties(2) | | Approximate Leasable Square Feet | | Total Quarterly Rental Revenue | | Percentage of Total Quarterly Rental Revenue |
| Retail | | | 451 | | | | 3,482,600 | | | $ | 12,449 | | | | 52.7 | % |
| Distribution | | | 34 | | | | 6,105,000 | | | | 9,483 | | | | 40.1 | |
| Office | | | 20 | | | | 343,700 | | | | 1,597 | | | | 6.7 | |
| Storage | | | 1 | | | | 126,700 | | | | 111 | | | | 0.5 | |
| Totals | | | 506 | | | | 10,058,000 | | | $ | 23,640 | | | | 100.0 | % |
| (1) | Includes quarterly rental revenue for all properties owned by ARCP at September 30, 2012. |
| (2) | Includes quarterly rental revenue for all properties owned by ARCT III at September 30, 2012. |
7
Geographic Diversification
The following table sets forth certain state-by-state information regarding the property portfolios (dollars in thousands):
ARCP
| | | | | | | | | | |
| State | | Number of Properties | | Percent Leased | | Approximate Leasable Square Feet | | Quarterly Rental Revenue (1) | | Percentage of Rental Revenue |
| Alabama | | | 1 | | | | 100 | % | | | 39,500 | | | $ | 151 | | | | 3.0 | % |
| Alaska | | | — | | | | — | | | | — | | | | — | | | | — | |
| Arizona | | | — | | | | — | | | | — | | | | — | | | | — | |
| Arkansas | | | 5 | | | | 100 | | | | 43,800 | | | | 45 | | | | 0.9 | |
| California | | | — | | | | — | | | | — | | | | — | | | | — | |
| Colorado | | | — | | | | — | | | | — | | | | — | | | | — | |
| Connecticut | | | 2 | | | | 100 | | | | 5,600 | | | | 31 | | | | 0.6 | |
| Delaware | | | 1 | | | | 100 | | | | 4,600 | | | | 23 | | | | 0.4 | |
| Florida | | | 1 | | | | 100 | | | | 8,900 | | | | 14 | | | | 0.3 | |
| Georgia | | | 2 | | | | 100 | | | | 20,900 | | | | 83 | | | | 1.7 | |
| Hawaii | | | — | | | | — | | | | — | | | | — | | | | — | |
| Idaho | | | — | | | | — | | | | — | | | | — | | | | — | |
| Illinois | | | 10 | | | | 100 | | | | 77,900 | | | | 302 | | | | 6.0 | |
| Indiana | | | 1 | | | | 100 | | | | 20,200 | | | | 85 | | | | 1.7 | |
| Iowa | | | 1 | | | | 100 | | | | 553,000 | | | | 588 | | | | 11.7 | |
| Kansas | | | 1 | | | | 100 | | | | 7,500 | | | | 7 | | | | 0.1 | |
| Kentucky | | | 1 | | | | 100 | | | | 12,100 | | | | 30 | | | | 0.6 | |
| Louisiana | | | — | | | | — | | | | — | | | | — | | | | — | |
| Maine | | | — | | | | — | | | | — | | | | — | | | | — | |
| Maryland | | | — | | | | — | | | | — | | | | — | | | | — | |
| Massachusetts | | | — | | | | — | | | | — | | | | — | | | | — | |
| Michigan | | | 22 | | | | 100 | | | | 125,000 | | | | 712 | | | | 14.2 | |
| Minnesota | | | — | | | | — | | | | — | | | | — | | | | — | |
| Mississippi | | | — | | | | — | | | | — | | | | — | | | | — | |
| Missouri | | | 26 | | | | 100 | | | | 224,500 | | | | 304 | | | | 6.0 | |
| Montana | | | — | | | | — | | | | — | | | | — | | | | — | |
| Nebraska | | | — | | | | — | | | | — | | | | — | | | | — | |
| Nevada | | | — | | | | — | | | | — | | | | — | | | | — | |
| New Hampshire | | | 2 | | | | 100 | | | | 6,900 | | | | 28 | | | | 0.5 | |
| New Jersey | | | 1 | | | | 100 | | | | 32,000 | | | | 241 | | | | 4.8 | |
| New Mexico | | | — | | | | — | | | | — | | | | — | | | | — | |
| New York | | | 13 | | | | 100 | | | | 87,000 | | | | 526 | | | | 10.5 | |
| North Carolina | | | — | | | | — | | | | — | | | | — | | | | — | |
| North Dakota | | | — | | | | — | | | | — | | | | — | | | | — | |
| Ohio | | | 18 | | | | 100 | | | | 220,800 | | | | 595 | | | | 11.8 | |
| Oklahoma | | | 2 | | | | 100 | | | | 18,000 | | | | 19 | | | | 0.4 | |
| Oregon | | | — | | | | — | | | | — | | | | — | | | | — | |
| Pennsylvania | | | 5 | | | | 100 | | | | 62,600 | | | | 266 | | | | 5.3 | |
| Rhode Island | | | — | | | | — | | | | — | | | | — | | | | — | |
| South Carolina | | | 2 | | | | 100 | | | | 480,000 | | | | 626 | | | | 12.4 | |
| South Dakota | | | — | | | | — | | | | — | | | | — | | | | — | |
| Tennessee | | | 1 | | | | 100 | | | | 10,700 | | | | 37 | | | | 0.7 | |
| Texas | | | 2 | | | | 100 | | | | 113,600 | | | | 204 | | | | 4.1 | |
| Utah | | | — | | | | — | | | | — | | | | — | | | | — | |
| Vermont | | | 3 | | | | 100 | | | | 12,500 | | | | 59 | | | | 1.2 | |
| Virginia | | | 1 | | | | 100 | | | | 11,300 | | | | 54 | | | | 1.1 | |
| Washington | | | — | | | | — | | | | — | | | | — | | | | — | |
| West Virginia | | | — | | | | — | | | | — | | | | — | | | | — | |
| Wisconsin | | | — | | | | — | | | | — | | | | — | | | | — | |
| Wyoming | | | — | | | | — | | | | — | | | | — | | | | — | |
| Totals/Average | | | 124 | | | | 100 | % | | | 2,198,900 | | | $ | 5,030 | | | | 100.0 | % |
8
ARCT III
| | | | | | | | | | |
| State | | Number of Properties | | Percent Leased | | Approximate Leasable Square Feet | | Quarterly Rental Revenue(2) | | Percentage of Rental Revenue |
| Alabama | | | 12 | | | | 100 | % | | | 91,500 | | | $ | 378 | | | | 2.0 | % |
| Alaska | | | — | | | | — | | | | — | | | | — | | | | — | |
| Arizona | | | 2 | | | | 100 | | | | 23,700 | | | | 102 | | | | 0.6 | |
| Arkansas | | | 3 | | | | 100 | | | | 19,100 | | | | 137 | | | | 0.7 | |
| California | | | 2 | | | | 100 | | | | 1,050,700 | | | | 1,261 | | | | 6.8 | |
| Colorado | | | 3 | | | | 100 | | | | 189,800 | | | | 736 | | | | 4.0 | |
| Connecticut | | | 7 | | | | 100 | | | | 28,700 | | | | 238 | | | | 1.3 | |
| Delaware | | | 2 | | | | 100 | | | | 4,300 | | | | 28 | | | | 0.2 | |
| Florida | | | 9 | | | | 100 | | | | 58,600 | | | | 317 | | | | 1.7 | |
| Georgia | | | 11 | | | | 100 | | | | 35,200 | | | | 324 | | | | 1.7 | |
| Hawaii | | | — | | | | — | | | | — | | | | — | | | | — | |
| Idaho | | | 2 | | | | 100 | | | | 43,300 | | | | 165 | | | | 0.9 | |
| Illinois | | | 13 | | | | 100 | | | | 471,700 | | | | 1,042 | | | | 5.6 | |
| Indiana | | | 6 | | | | 100 | | | | 110,600 | | | | 320 | | | | 1.7 | |
| Iowa | | | 4 | | | | 100 | | | | 39,300 | | | | 88 | | | | 0.5 | |
| Kansas | | | 13 | | | | 100 | | | | 769,200 | | | | 679 | | | | 3.7 | |
| Kentucky | | | 4 | | | | 100 | | | | 71,600 | | | | 231 | | | | 1.2 | |
| Louisiana | | | 18 | | | | 100 | | | | 181,600 | | | | 521 | | | | 2.8 | |
| Maine | | | — | | | | — | | | | — | | | | — | | | | — | |
| Maryland | | | — | | | | — | | | | — | | | | — | | | | — | |
| Massachusetts | | | 13 | | | | 100 | | | | 107,700 | | | | 472 | | | | 2.5 | |
| Michigan | | | 18 | | | | 100 | | | | 234,900 | | | | 844 | | | | 4.5 | |
| Minnesota | | | 1 | | | | 100 | | | | 9,000 | | | | 21 | | | | 0.1 | |
| Mississippi | | | 26 | | | | 100 | | | | 1,305,300 | | | | 1,649 | | | | 8.9 | |
| Missouri | | | 38 | | | | 100 | | | | 579,700 | | | | 1,693 | | | | 9.1 | |
| Montana | | | 1 | | | | 100 | | | | 45,800 | | | | 174 | | | | 0.9 | |
| Nebraska | | | 1 | | | | 100 | | | | 8,100 | | | | 20 | | | | 0.1 | |
| Nevada | | | 6 | | | | 100 | | | | 59,900 | | | | 342 | | | | 1.8 | |
| New Hampshire | | | 4 | | | | 100 | | | | 16,100 | | | | 108 | | | | 0.6 | |
| New Jersey | | | 5 | | | | 100 | | | | 47,700 | | | | 378 | | | | 2.0 | |
| New Mexico | | | 3 | | | | 100 | | | | 22,500 | | | | 81 | | | | 0.4 | |
| New York | | | 3 | | | | 100 | | | | 195,600 | | | | 1,089 | | | | 5.9 | |
| North Carolina | | | 15 | | | | 100 | | | | 175,000 | | | | 577 | | | | 3.1 | |
| North Dakota | | | 3 | | | | 100 | | | | 26,400 | | | | 72 | | | | 0.4 | |
| Ohio | | | 21 | | | | 100 | | | | 704,500 | | | | 944 | | | | 5.1 | |
| Oklahoma | | | 10 | | | | 100 | | | | 215,600 | | | | 397 | | | | 2.1 | |
| Oregon | | | — | | | | — | | | | — | | | | — | | | | — | |
| Pennsylvania | | | 30 | | | | 100 | | | | 111,900 | | | | 697 | | | | 3.8 | |
| Rhode Island | | | 4 | | | | 100 | | | | 14,700 | | | | 112 | | | | 0.6 | |
| South Carolina | | | 9 | | | | 100 | | | | 86,000 | | | | 488 | | | | 2.6 | |
| South Dakota | | | 1 | | | | 100 | | | | 9,200 | | | | 22 | | | | 0.1 | |
| Tennessee | | | 8 | | | | 100 | | | | 148,500 | | | | 345 | | | | 1.9 | |
| Texas | | | 39 | | | | 100 | | | | 418,200 | | | | 1,092 | | | | 5.9 | |
| Utah | | | — | | | | — | | | | — | | | | — | | | | — | |
| Vermont | | | — | | | | — | | | | — | | | | — | | | | — | |
| Virginia | | | 6 | | | | 100 | | | | 61,800 | | | | 192 | | | | 1.0 | |
| Washington | | | 2 | | | | 100 | | | | 25,100 | | | | 96 | | | | 0.5 | |
| West Virginia | | | 1 | | | | 100 | | | | 13,300 | | | | 82 | | | | 0.4 | |
| Wisconsin | | | 3 | | | | 100 | | | | 27,700 | | | | 56 | | | | 0.3 | |
| Wyoming | | | — | | | | — | | | | — | | | | — | | | | — | |
| Totals/Average | | | 382 | | | | 100 | % | | | 7,859,100 | | | $ | 18,610 | | | | 100.0 | % |
9
Combined
| | | | | | | | | | |
| State | | Number of Properties | | Percent Leased | | Approximate Leasable Square Feet | | Total Quarterly Rental Revenue(1)(2) | | Percentage of Total Rental Revenue |
| Alabama | | | 13 | | | | 100 | % | | | 131,000 | | | $ | 529 | | | | 2.2 | % |
| Alaska | | | — | | | | — | | | | — | | | | — | | | | — | |
| Arizona | | | 2 | | | | 100 | | | | 23,700 | | | | 102 | | | | 0.4 | |
| Arkansas | | | 8 | | | | 100 | | | | 62,900 | | | | 182 | | | | 0.8 | |
| California | | | 2 | | | | 100 | | | | 1,050,700 | | | | 1,261 | | | | 5.3 | |
| Colorado | | | 3 | | | | 100 | | | | 189,800 | | | | 736 | | | | 3.1 | |
| Connecticut | | | 9 | | | | 100 | | | | 34,300 | | | | 269 | | | | 1.1 | |
| Delaware | | | 3 | | | | 100 | | | | 8,900 | | | | 51 | | | | 0.2 | |
| Florida | | | 10 | | | | 100 | | | | 67,500 | | | | 331 | | | | 1.4 | |
| Georgia | | | 13 | | | | 100 | | | | 56,100 | | | | 407 | | | | 1.7 | |
| Hawaii | | | — | | | | — | | | | — | | | | — | | | | — | |
| Idaho | | | 2 | | | | 100 | | | | 43,300 | | | | 165 | | | | 0.7 | |
| Illinois | | | 23 | | | | 100 | | | | 549,600 | | | | 1,344 | | | | 5.7 | |
| Indiana | | | 7 | | | | 100 | | | | 130,800 | | | | 405 | | | | 1.7 | |
| Iowa | | | 5 | | | | 100 | | | | 592,300 | | | | 676 | | | | 2.9 | |
| Kansas | | | 14 | | | | 100 | | | | 776,700 | | | | 686 | | | | 2.9 | |
| Kentucky | | | 5 | | | | 100 | | | | 83,700 | | | | 261 | | | | 1.1 | |
| Louisiana | | | 18 | | | | 100 | | | | 181,600 | | | | 521 | | | | 2.2 | |
| Maine | | | — | | | | — | | | | — | | | | — | | | | — | |
| Maryland | | | — | | | | — | | | | — | | | | — | | | | — | |
| Massachusetts | | | 13 | | | | 100 | | | | 107,700 | | | | 472 | | | | 2.0 | |
| Michigan | | | 40 | | | | 100 | | | | 359,900 | | | | 1,556 | | | | 6.6 | |
| Minnesota | | | 1 | | | | 100 | | | | 9,000 | | | | 21 | | | | 0.1 | |
| Mississippi | | | 26 | | | | 100 | | | | 1,305,300 | | | | 1,649 | | | | 7.0 | |
| Missouri | | | 64 | | | | 100 | | | | 804,200 | | | | 1,997 | | | | 8.4 | |
| Montana | | | 1 | | | | 100 | | | | 45,800 | | | | 174 | | | | 0.7 | |
| Nebraska | | | 1 | | | | 100 | | | | 8,100 | | | | 20 | | | | 0.1 | |
| Nevada | | | 6 | | | | 100 | | | | 59,900 | | | | 342 | | | | 1.5 | |
| New Hampshire | | | 6 | | | | 100 | | | | 23,000 | | | | 136 | | | | 0.6 | |
| New Jersey | | | 6 | | | | 100 | | | | 79,700 | | | | 619 | | | | 2.6 | |
| New Mexico | | | 3 | | | | 100 | | | | 22,500 | | | | 81 | | | | 0.4 | |
| New York | | | 16 | | | | 100 | | | | 282,600 | | | | 1,615 | | | | 6.8 | |
| North Carolina | | | 15 | | | | 100 | | | | 175,000 | | | | 577 | | | | 2.4 | |
| North Dakota | | | 3 | | | | 100 | | | | 26,400 | | | | 72 | | | | 0.3 | |
| Ohio | | | 39 | | | | 100 | | | | 925,300 | | | | 1,539 | | | | 6.5 | |
| Oklahoma | | | 12 | | | | 100 | | | | 233,600 | | | | 416 | | | | 1.8 | |
| Oregon | | | — | | | | — | | | | — | | | | — | | | | — | |
| Pennsylvania | | | 35 | | | | 100 | | | | 174,500 | | | | 963 | | | | 4.1 | |
| Rhode Island | | | 4 | | | | 100 | | | | 14,700 | | | | 112 | | | | 0.5 | |
| South Carolina | | | 11 | | | | 100 | | | | 566,000 | | | | 1,114 | | | | 4.7 | |
| South Dakota | | | 1 | | | | 100 | | | | 9,200 | | | | 22 | | | | 0.1 | |
| Tennessee | | | 9 | | | | 100 | | | | 159,200 | | | | 382 | | | | 1.6 | |
| Texas | | | 41 | | | | 100 | | | | 531,800 | | | | 1,296 | | | | 5.5 | |
| Utah | | | — | | | | — | | | | — | | | | — | | | | — | |
| Vermont | | | 3 | | | | 100 | | | | 12,500 | | | | 59 | | | | 0.3 | |
| Virginia | | | 7 | | | | 100 | | | | 73,100 | | | | 246 | | | | 1.0 | |
| Washington | | | 2 | | | | 100 | | | | 25,100 | | | | 96 | | | | 0.4 | |
| West Virginia | | | 1 | | | | 100 | | | | 13,300 | | | | 82 | | | | 0.4 | |
| Wisconsin | | | 3 | | | | 100 | | | | 27,700 | | | | 56 | | | | 0.2 | |
| Wyoming | | | — | | | | — | | | | — | | | | — | | | | — | |
| Totals/Average | | | 506 | | | | 100 | % | | | 10,058,000 | | | $ | 23,640 | | | | 100.0 | % |
| (1) | Includes quarterly rental revenue for all properties owned by ARCP at September 30, 2012. |
| (2) | Includes quarterly rental revenue for all properties owned by ARCT III at September 30, 2012. |
10
Lease Expirations
The following table sets forth certain information regarding the property portfolios and the timing of the lease term expirations (excluding rights to extend a lease at the option of the tenant) on net leased, single-tenant properties (dollars in thousands):
| | | | | | | | | | | | |
| | ARCP(1) |
| Year | | Number of Leases Expiring | | Approx. Leasable
Sq. Feet | | Quarterly
Rental
Revenue | | Percentage of Quarterly Rental Revenue | | Annualized Rental Revenue(3) | | Percentage of Annualized Rental Revenue |
| 2012 | | | — | | | | — | | | $ | — | | | | — | % | | $ | — | | | | — | % |
| 2013 | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| 2014 | | | 3 | | | | 23,800 | | | | 23 | | | | 0.5 | | | | 91 | | | | 0.5 | |
| 2015 | | | 14 | | | | 130,700 | | | | 206 | | | | 4.1 | | | | 823 | | | | 4.1 | |
| 2016 | | | 8 | | | | 74,900 | | | | 170 | | | | 3.4 | | | | 680 | | | | 3.4 | |
| 2017 | | | 38 | | | | 470,400 | | | | 1,218 | | | | 24.2 | | | | 4,873 | | | | 24.2 | |
| 2018 | | | 28 | | | | 794,500 | | | | 1,697 | | | | 33.7 | | | | 6,789 | | | | 33.7 | |
| 2019 | | | 20 | | | | 132,100 | | | | 858 | | | | 17.1 | | | | 3,432 | | | | 17.1 | |
| 2020 | | | 2 | | | | 19,100 | | | | 62 | | | | 1.2 | | | | 248 | | | | 1.2 | |
| 2021 | | | 5 | | | | 42,400 | | | | 141 | | | | 2.8 | | | | 566 | | | | 2.8 | |
| 2022 | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| 2023 | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| 2024 | | | 2 | | | | 18,100 | | | | 36 | | | | 0.7 | | | | 144 | | | | 0.7 | |
| 2025 | | | 3 | | | | 27,300 | | | | 54 | | | | 1.1 | | | | 216 | | | | 1.1 | |
| 2026 | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| 2027 – 2038 | | | 1 | | | | 465,000 | | | | 565 | | | | 11.2 | | | | 2,258 | | | | 11.2 | |
| Totals | | | 124 | | | | 2,198,900 | | | $ | 5,030 | | | | 100.0 | % | | $ | 20,120 | | | | 100.0 | % |
| | | | | | | | | | | | |
| | ARCT III(2) |
| Year | | Number of Leases Expiring | | Approx. Leasable
Sq. Feet | | Quarterly
Rental
Revenue | | Percentage of Quarterly Rental Revenue | | Annualized Rental Revenue(3) | | Percentage of Annualized Rental Revenue |
| 2012 | | | — | | | | — | | | $ | — | | | | — | % | | $ | — | | | | — | % |
| 2013 | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| 2014 | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| 2015 | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| 2016 | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| 2017 | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| 2018 | | | 2 | | | | 11,400 | | | | 50 | | | | 0.3 | | | | 200 | | | | 0.3 | |
| 2019 | | | 3 | | | | 23,300 | | | | 70 | | | | 0.4 | | | | 280 | | | | 0.4 | |
| 2020 | | | 12 | | | | 76,500 | | | | 479 | | | | 2.6 | | | | 1,916 | | | | 2.6 | |
| 2021 | | | 22 | | | | 726,500 | | | | 2,060 | | | | 11.1 | | | | 8,240 | | | | 11.1 | |
| 2022 | | | 64 | | | | 1,739,200 | | | | 2,547 | | | | 13.7 | | | | 10,187 | | | | 13.7 | |
| 2023 | | | 15 | | | | 1,748,700 | | | | 2,763 | | | | 14.8 | | | | 11,051 | | | | 14.8 | |
| 2024 | | | 17 | | | | 1,178,500 | | | | 1,881 | | | | 10.1 | | | | 7,525 | | | | 10.1 | |
| 2025 | | | 65 | | | | 473,400 | | | | 1,714 | | | | 9.2 | | | | 6,856 | | | | 9.2 | |
| 2026 | | | 50 | | | | 511,000 | | | | 1,511 | | | | 8.1 | | | | 6,046 | | | | 8.1 | |
| 2027 – 2038 | | | 132 | | | | 1,370,600 | | | | 5,535 | | | | 29.7 | | | | 22,139 | | | | 29.7 | |
| Totals | | | 382 | | | | 7,859,100 | | | $ | 18,610 | | | | 100.0 | % | | $ | 74,440 | | | | 100.0 | % |
11
| | | | | | | | | | | | |
| | Combined(1)(2) |
| Year | | Number of Leases Expiring | | Approx. Leasable
Sq. Feet | | Quarterly
Rental
Revenue | | Percentage of Quarterly Rental Revenue | | Annualized Rental Revenue(3) | | Percentage of Annualized Rental Revenue |
| 2012 | | | — | | | | — | | | $ | — | | | | — | % | | $ | — | | | | — | % |
| 2013 | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| 2014 | | | 3 | | | | 23,800 | | | | 23 | | | | 0.1 | | | | 91 | | | | 0.1 | |
| 2015 | | | 14 | | | | 130,700 | | | | 206 | | | | 0.9 | | | | 823 | | | | 0.9 | |
| 2016 | | | 8 | | | | 74,900 | | | | 170 | | | | 0.7 | | | | 680 | | | | 0.7 | |
| 2017 | | | 38 | | | | 470,400 | | | | 1,218 | | | | 5.1 | | | | 4,873 | | | | 5.1 | |
| 2018 | | | 30 | | | | 805,900 | | | | 1,747 | | | | 7.4 | | | | 6,989 | | | | 7.4 | |
| 2019 | | | 23 | | | | 155,400 | | | | 928 | | | | 3.9 | | | | 3,712 | | | | 3.9 | |
| 2020 | | | 14 | | | | 95,600 | | | | 541 | | | | 2.3 | | | | 2,164 | | | | 2.3 | |
| 2021 | | | 27 | | | | 768,900 | | | | 2,201 | | | | 9.3 | | | | 8,806 | | | | 9.3 | |
| 2022 | | | 64 | | | | 1,739,200 | | | | 2,547 | | | | 10.8 | | | | 10,187 | | | | 10.8 | |
| 2023 | | | 15 | | | | 1,748,700 | | | | 2,763 | | | | 11.7 | | | | 11,051 | | | | 11.7 | |
| 2024 | | | 19 | | | | 1,196,600 | | | | 1,917 | | | | 8.1 | | | | 7,669 | | | | 8.1 | |
| 2025 | | | 68 | | | | 500,700 | | | | 1,768 | | | | 7.5 | | | | 7,072 | | | | 7.5 | |
| 2026 | | | 50 | | | | 511,000 | | | | 1,511 | | | | 6.4 | | | | 6,046 | | | | 6.4 | |
| 2027 – 2038 | | | 133 | | | | 1,836,200 | | | | 6,100 | | | | 25.8 | | | | 24,397 | | | | 25.8 | |
| Totals | | | 506 | | | | 10,058,000 | | | $ | 23,640 | | | | 100.0 | % | | $ | 94,560 | | | | 100.0 | % |
| (1) | The ARCP information represents rental revenue for the properties owned at September 30, 2012. |
| (2) | The ARCT III information represents rental revenue for the properties owned at September 30, 2012. |
| (3) | Annualized rental revenue for net leases is rental revenue annualized on a straight-line basis for properties held as of September 30, 2012, which includes the effect of tenant concessions such as free rent, as applicable. For modified gross leased properties, the amount is rental income on a straight-line basis as of September 30, 2012, which includes the effect of tenant concessions such as free rent, as applicable, plus operating expense reimbursement revenue less property operating expenses. |
12
