x
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
|
|||
EXCHANGE
ACT OF 1934
|
||||
For
the quarterly period ended September 30, 2009
|
||||
OR
|
||||
o
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
|
|||
EXCHANGE
ACT OF 1934
|
Maryland
|
71-1036989
|
|
(State
or other jurisdiction
of
incorporation or organization)
|
(I.R.S.
Employer Identification No.)
|
|
106 York Road
Jenkintown, PA
|
19046
|
|
(Address
of principal executive offices)
|
(Zip
Code)
|
(215) 887-2189
|
(Registrant’s
telephone number, including area
code)
|
Large
accelerated filer ¨
|
Accelerated
filer ¨
|
|
Non-accelerated
filer x
|
(Do
not check if a smaller reporting company)
|
Smaller
reporting company ¨
|
PART
I — FINANCIAL INFORMATION
|
|
Item 1.
Financial Statements
|
|
Consolidated
Balance Sheets as of September 30, 2009 (Unaudited) and December 31,
2008
|
3
|
Consolidated
Statements of Operations for the three months and nine months ended
September 30, 2009 and 2008 (Unaudited)
|
4
|
Consolidated
Statement of Stockholders’ Equity for the nine months ended September 30,
2009 (Unaudited)
|
5
|
Consolidated
Statements of Cash Flows for the Nine months ended September 30, 2009 and
2008 (Unaudited)
|
6
|
Notes
to Consolidated Financial Statements (Unaudited)
|
8
|
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of
Operations
|
31
|
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
|
45
|
Item 4T.
Controls and Procedures
|
45
|
PART
II — OTHER INFORMATION
|
46
|
Item 1.
Legal Proceedings
|
46
|
Item
1A. Risk Factors
|
46
|
Item 2.
Unregistered Sales of Equity Securities and Use of
Proceeds
|
46
|
Item 3.
Defaults Upon Senior Securities
|
46
|
Item 4.
Submission of Matters to a Vote of Security Holders
|
46
|
Item 5.
Other Information
|
47
|
Item 6.
Exhibits
|
47
|
Signatures
|
48
|
September 30,
2009
|
December 31,
2008
|
|||||||
(Unaudited)
|
||||||||
ASSETS
|
||||||||
Real
estate investments, at cost:
|
||||||||
Land
|
|
$
|
30,610,286
|
$
|
22,300,422
|
|||
Buildings,
fixtures and improvements
|
184,527,739
|
126,022,191
|
||||||
Acquired
intangible lease assets
|
25,953,668
|
16,448,018
|
||||||
Total
real estate investments, at cost
|
241,091,693
|
164,770,631
|
||||||
Less
accumulated depreciation and amortization
|
(8,540,170
|
)
|
(3,056,449
|
)
|
||||
Total real estate investments, net
|
232,551,523
|
161,714,182
|
||||||
Cash
|
8,697,197
|
886,868
|
||||||
Restricted
cash
|
38,025
|
47,937
|
||||||
Prepaid
expenses and other assets
|
3,072,306
|
302,472
|
||||||
Deferred
financing costs, net
|
2,621,673
|
1,990,992
|
||||||
Total
assets
|
|
$
|
246,980,724
|
$
|
164,942,451
|
Short-term
bridge equity funds:
|
||||||||
Short-term
bridge funds
|
$
|
15,878,495
|
$
|
11,953,796
|
||||
Related
party bridge facility
|
—
|
8,477,163
|
||||||
Related
party convertible bridge revolver
|
—
|
6,500,000
|
||||||
Short-term
convertible redeemable preferred
|
—
|
3,995,000
|
||||||
Total
short-term bridge equity funds
|
15,878,495
|
30,925,959
|
||||||
Mortgage
notes payable
|
137,309,568
|
112,741,810
|
||||||
Long-term
notes payable
|
13,000,000
|
1,089,500
|
||||||
Below-market
lease liabilities, net
|
9,163,975
|
9,400,293
|
||||||
Derivatives,
at fair value
|
3,173,358
|
4,232,865
|
||||||
Due
to affiliates
|
209,574
|
2,223,144
|
||||||
Accounts
payable and accrued expenses
|
919,389
|
1,687,932
|
||||||
Deferred
rent and other liabilities
|
1,079,241
|
781,538
|
||||||
Distributions
payable
|
455,148
|
69,263
|
||||||
Investor
contributions held in escrow
|
—
|
30,824
|
||||||
Total
liabilities
|
181,188,748
|
163,183,128
|
||||||
Preferred
stock, $0.01 par value; 10,000,000 shares authorized, none issued and
outstanding
|
—
|
—
|
||||||
Common
stock, $.01 par value; 240,000,000 shares authorized, 9,086,143 and
1,276,814 shares issued and outstanding at September 30, 2009 and December
31, 2008, respectively
|
90,861
|
12,768
|
||||||
Additional
paid-in capital
|
74,871,263
|
9,219,901
|
||||||
Accumulated
other comprehensive loss
|
(2,003,944
|
)
|
(2,675,515
|
)
|
||||
Accumulated
deficit
|
(10,193,109
|
)
|
(4,797,831
|
)
|
||||
Total
American Realty Capital Trust, Inc. stockholders’ equity
|
62,765,071
|
1,759,323
|
||||||
Noncontrolling
interests
|
3,026,905
|
—
|
||||||
Total
stockholders’ equity
|
65,791,976
|
1,759,323
|
||||||
Total
liabilities and stockholders’ equity
|
$
|
246,980,724
|
$
|
164,942,451
|
Three Months Ended September
30,
|
Nine Months Ended September
30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Revenues:
|
||||||||||||||||
Rental
income
|
$ | 3,773,998 | $ | 1,593,871 | $ | 9,636,008 | $ | 3,156,379 | ||||||||
Operating
expense reimbursement
|
6,928 | — | 6,928 | — | ||||||||||||
Total
revenues
|
3,780,926 | 1,593,871 | 9,642,936 | 3,156,379 | ||||||||||||
Operating
expenses:
|
||||||||||||||||
Asset
management fees to affiliate
|
70,000 | — | 70,000 | — | ||||||||||||
Property
management fees to affiliate
|
— | — | — | 4,230 | ||||||||||||
Acquisition
and transaction related
|
347,036 | — | 347,036 | — | ||||||||||||
General
and administrative
|
109,505 | 19,188 | 307,114 | 291,787 | ||||||||||||
Depreciation
and amortization
|
2,083,919 | 857,187 | 5,543,738 | 1,765,149 | ||||||||||||
Total
operating expenses
|
2,610,460 | 876,375 | 6,267,888 | 2,061,166 | ||||||||||||
Operating
income
|
1,170,466 | 717,496 | 3,375,048 | 1,095,213 | ||||||||||||
Other
income (expense):
|
||||||||||||||||
Interest
expense
|
(2,522,122 | ) | (1,386,655 | ) | (7,292,251 | ) | (2,758,625 | ) | ||||||||
Interest
income
|
17,646 | 691 | 22,623 | 1,907 | ||||||||||||
Gains
(losses) on derivative instruments
|
(195,054 | ) | (176,656 | ) | 353,912 | 20,160 | ||||||||||
Total
other expenses
|
(2,699,530 | ) | (1,562,620 | ) | (6,915,716 | ) | (2,736,558 | ) | ||||||||
Net
loss
|
(1,529,064 | ) | (845,124 | ) | (3,540,668 | ) | (1,641,345 | ) | ||||||||
Net
loss attributable to noncontrolling interests
|
45,052 | — | 45,052 | — | ||||||||||||
Net
loss attributable to American Realty Capital Trust, Inc.
|
$ | (1,484,012 | ) | $ | (845,124 | ) | $ | (3,495,616 | ) | $ | (1,641,345 | ) | ||||
Basic
and diluted weighted average
|
||||||||||||||||
common
shares outstanding
|
6,639,111 | 1,101,127 | 3,791,302 | 699,883 | ||||||||||||
Basic
and diluted loss per share attributable to American Realty Capital Trust,
Inc.
|
$ | (0.22 | ) | $ | (0.77 | ) | $ | (0.92 | ) | $ | (2.35 | ) |
Common Stock
|
||||||||||||||||||||||||||||
Number of
Shares
|
Par Value
|
Additional
Paid-In Capital
|
Accumulated
Other
Comprehensive
Loss
|
Accumulated
Deficit
|
Noncontrolling
Interests
|
Total
Stockholders’
Equity
|
||||||||||||||||||||||
Balance,
December 31, 2008
|
1,276,814 | $ | 12,768 | $ | 9,219,901 | $ | (2,675,515 | ) | $ | (4,797,831 | ) | $ | — | $ | 1,759,323 | |||||||||||||
Issuance
of common stock
|
7,746,899 | 77,470 | 76,822,471 | — | — | — | 76,899,941 | |||||||||||||||||||||
Offering
costs, commissions and dealer manager fees
|
— | — | (11,763,964 | ) | — | — | — | (11,763,964 | ) | |||||||||||||||||||
Common
stock issued through distribution reinvestment program
|
62,430 | 623 | 592,855 | — | — | — | 593,478 | |||||||||||||||||||||
Distributions
declared
|
— | — | — | — | (1,899,662 | ) | — | (1,899,662 | ) | |||||||||||||||||||
Contributions
from noncontrolling interests
|
— | — | — | — | — | 3,107,879 | 3,107,879 | |||||||||||||||||||||
Distributions
to noncontrolling interests
|
— | — | — | — | — | (35,922 | ) | (35,922 | ) | |||||||||||||||||||
Designated
derivatives fair value adjustment
|
— | — | — | 671,571 | — | — | 671,571 | |||||||||||||||||||||
Net
loss
|
— | — | — | — | (3,495,616 | ) | (45,052 | ) | (3,540,668 | ) | ||||||||||||||||||
Total
comprehensive loss
|
— | — | — | — | — | — | (2,869,097 | ) | ||||||||||||||||||||
Balance,
September 30, 2009
|
9,086,143 | $ | 90,861 | $ | 74,871,263 | $ | (2,003,944 | ) | $ | (10,193,109 | ) | $ | 3,026,905 | $ | 65,791,976 |
Nine Months Ended September
30,
|
||||||||
2009
|
2008
|
|||||||
Cash
flows from operating activities:
|
||||||||
Net
loss
|
$ | (3,540,668 | ) | $ | (1,641,345 | ) | ||
Adjustments
to reconcile net loss to net cash (used in) provided by operating
activities:
|
||||||||
Depreciation
|
4,412,435 | 1,477,951 | ||||||
Amortization
of intangibles
|
1,131,303 | 287,198 | ||||||
Amortization
of deferred finance costs
|
418,457 | 72,761 | ||||||
Accretion
of below-market lease liability
|
(236,318 | ) | — | |||||
Gains on
derivative instruments
|
(353,912 | ) | (20,160 | ) | ||||
Changes
in assets and liabilities:
|
||||||||
Prepaid
expenses and other assets
|
(2,829,853 | ) | (751,274 | ) | ||||
Accounts
payable and accrued expenses
|
(802,566 | ) | 1,312,062 | |||||
Due
to affiliated entity
|
(2,013,570 | ) | — | |||||
Deferred
rent and other liabilities
|
297,703 | 554,124 | ||||||
Net
cash (used in) provided by operating activities
|
(3,516,989 | ) | 1,291,317 | |||||
Cash
flows from investing activities:
|
||||||||
Investment
in real estate and other assets
|
(76,321,062 | ) | (49,067,597 | ) | ||||
Net
cash used in investing activities
|
(76,321,062 | ) | (49,067,597 | ) | ||||
Cash
flows from financing activities:
|
||||||||
Proceeds
on mortgage notes payable
|
25,300,000 | 26,475,000 | ||||||
Payments
on mortgage notes payable
|
(732,242 | ) | (181,065 | ) | ||||
Proceeds
on related party bridge facility
|
9,553,172 | 7,147,587 | ||||||
Payments
on related party bridge facility
|
(18,030,335 | ) | — | |||||
Proceeds
on related party convertible bridge revolver
|
2,714,946 | 6,500,000 | ||||||
Payments
on related party convertible bridge revolver
|
(9,214,946 | ) | — | |||||
Proceeds
on short-term bridge funds
|
15,878,495 | — | ||||||
Payments
on short-term bridge funds
|
(11,953,796 | ) | — | |||||
Proceeds
on short-term convertible redeemable preferred
|
— | 3,995,000 | ||||||
Payments
on short-term convertible redeemable preferred
|
(3,995,000 | ) | — | |||||
Proceeds
from long-term notes payable
|
11,910,500 | — | ||||||
Contributions
from noncontrolling interests
|
3,107,879 | — | ||||||
Distributions
to noncontrolling interests
|
(35,922 | ) | — | |||||
Proceeds
from issuance of common stock, net
|
65,105,154 | 5,980,149 | ||||||
Payments
of deferred financing costs
|
(1,049,137 | ) | (1,047,541 | ) | ||||
Distributions
paid
|
(920,300 | ) | (167,957 | ) | ||||
Restricted
cash
|
9,912 | (50,232 | ) | |||||
Net
cash provided by financing activities
|
87,648,380 | 48,650,941 | ||||||
Net
increase in cash
|
7,810,329 | 874,661 | ||||||
Cash,
beginning of period
|
886,868 | — | ||||||
Cash,
end of period
|
$ | 8,697,197 | $ | 874,661 |
Nine Months Ended September
30,
|
||||||||
2009
|
2008
|
|||||||
Supplemental
Disclosures of Investing and Financing Activities:
|
||||||||
Debt
assumed in real estate acquisitions
|
$
|
—
|
$
|
54,727,061
|
||||
Common
share issuance in real estate acquisition
|
$
|
—
|
$
|
3,051,695
|
||||
Investor
contributions held in escrow
|
$
|
—
|
$
|
30,824
|
||||
Non-cash
acquisition costs
|
$
|
—
|
$
|
42,118
|
||||
Reclassification
of deferred offering costs
|
$
|
—
|
$
|
938,157
|
||||
Cash
paid for interest
|
$
|
7,418,057
|
$
|
2,344,825
|
Nine Months Ended September
30,
|
|||
2009
|
2008
|
||
Harleysville
National Bank
|
27%
|
53%
|
|
Rockland
Trust Company
|
22%
|
33%
|
|
PNC
Bank
|
21%
|
-%
|
|
Federal
Express
|
14%
|
13%
|
|
Rite
Aid
|
13%
|
-%
|
Three
and Nine
Months
Ended
September
30,
|
Three
Months
Ended
September
30,
|
Nine
Months
Ended
September
30,
|
||||||||||
2009
|
2008
|
2008
|
||||||||||
Real
estate investments, at cost:
|
||||||||||||
Land
|
$ | 8,332,062 | $ | 2,991,519 | $ | 14,633,064 | ||||||
Buildings,
fixtures and improvements
|
58,483,349 | 16,951,939 | 82,842,992 | |||||||||
66,815,412 | 19,943,458 | 97,476,056 | ||||||||||
Intangibles
and other assets:
|
||||||||||||
In-place
leases
|
9,505,651 | 1,980,324 | 9,443,239 | |||||||||
Total
assets acquired
|
76,321,062 | 21,923,782 | 106,919,295 | |||||||||
Liabilities
assumed:
|
||||||||||||
Mortgage
notes
|
— | (12,808,265 | ) | (50,773,265 | ) | |||||||
Mezzanine
financing
|
— | — | (3,953,796 | ) | ||||||||
Investor
contributions held in escrow
|
— | 441,724 | (30,824 | ) | ||||||||
Other
liabilities
|
— | 34,182 | (42,118 | ) | ||||||||
Total
liabilities assumed
|
— | (12,332,359 | ) | (54,800,003 | ) | |||||||
Issuance
of common shares
|
— | (441,724 | ) | (3,051,695 | ) | |||||||
Cash
paid
|
$ | 76,321,062 | $ | 9,149,699 | $ | 49,067,597 |
Seller / Property Name
|
Acquisition Date
|
No. of
Buildings
|
Square Feet
|
Remaining
Lease Term (1)
|
Base Purchase
Price (2)
|
Capitalization
Rate (3)
|
Total Purchase Price (4)
|
Net Operating
Income (5)
|
|||||||||||
Federal
Express Distribution Center
|
March
2008
|
1
|
55,440
|
9.17
|
$
|
9,694,179
|
7.53%
|
|
$ |
10,207,674
|
$
|
730,065
|
|||||||
Harleysville
National Bank Portfolio
|
March
2008
|
15
|
177,774
|
13.26
|
40,976,218
|
7.48%
|
41,675,721
|
3,063,912
|
|||||||||||
Rockland
Trust Company Portfolio
|
May
2008
|
18
|
121,057
|
11.84
|
32,188,000
|
7.86%
|
33,117,419
|
2,529,665
|
|||||||||||
PNC
Bank (formally National City Bank)
|
Sept. & Oct. 2008
|
2
|
8,403
|
19.39
|
6,663,786
|
8.21%
|
6,853,419
|
546,943
|
|||||||||||
Rite
Aid Portfolio
|
September
2008
|
6
|
74,919
|
13.79
|
18,575,727
|
7.79%
|
18,839,392
|
1,446,843
|
|||||||||||
PNC
Bank Portfolio
|
November
2008
|
50
|
275,436
|
9.17
|
42,285,714
|
7.35%
|
44,813,074
|
3,107,754
|
|||||||||||
Federal
Express Distribution Center
|
July
2009
|
1
|
152,640
|
14.05
|
31,691,989
|
8.84%
|
31,691,989
|
2,803,044
|
|||||||||||
Walgreens
Property
|
July
2009
|
1
|
14,820
|
22.76
|
3,817,733
|
8.12%
|
3,817,733
|
310,000
|
|||||||||||
CVS
Pharmacy Portfolio
|
September
2009
|
10
|
131,105
|
24.55
|
40,648,721
|
8.48%
|
40,648,721
|
3,448,362
|
|||||||||||
Total
|
104
|
1,011,594
|
14.56
|
$
|
226,542,067
|
7.94%
|
|
$ |
231,665,142
|
$
|
17,986,588
|
(1) -
|
Remaining lease term as of
September 30, 2009, in years. If the portfolio has multiple locations with
varying lease expirations, the remaining lease term is calculated on
a weighted-average basis.
|
(2) -
|
Contract purchase price excluding
acquisition related costs.
|
(3) -
|
Net operating income divided by
base purchase price.
|
(4) -
|
Base purchase price plus all
capitalized acquisition related costs, as applicable. See Note 2 - Recent
Accounting Pronouncements in regards to recent changes to accounting
for acquisition and transaction related costs effective January 1,
2009.
|
(5) -
|
Annualized 2009 rental income less
property operating expenses, as
applicable.
|
Property
|
Encumbered
Properties
|
Mortgage Notes
|
Effective Interest
Rate
|
Interest Rate
|
Maturity
|
||||||
Federal
Express Distribution Center
|
1
|
$
|
6,965,000
|
6.29
%
|
Fixed
|
September
2037
|
|||||
Harleysville
National Bank Portfolio
|
15
|
31,000,000
|
6.59
%
|
(1)
|
Fixed
|
January
2018
|
|||||
Rockland
Trust Company Portfolio
|
18
|
23,764,837
|
4.92
%
|
(2)
|
Variable
|
May
2013
|
|||||
PNC
Bank (formally National City Bank)
|
2
|
4,430,604
|
4.89
%
|
(3)
|
Variable
|
September
2013
|
|||||
Rite
Aid Portfolio
|
6
|
12,808,265
|
6.97
%
|
Fixed
|
September
2017
|
||||||
PNC
Bank Portfolio
|
50
|
|
33,040,862
|
5.25
%
|
(4)
|
Variable
|
November
2013
|
||||
Walgreens
Property
|
1
|
1,550,000
|
6.64%
|
(5)
|
Variable
|
August
2019
|
|||||
CVS
Portfolio
|
10
|
23,750,000
|
6.88%
|
(6)
|
Fixed
|
October
2019
|
|||||
Total
|
103
|
$
|
137,309,568
|
(1)
|
The
effective interest rate resets at the end of year five to the then current
5-year U.S. Treasury rate plus 2.25%, but in no event will be less than
6.5%.
|
|
The
Company limited its interest rate exposure by entering into a rate lock
agreement with a LIBOR floor and cap of 3.54% and 4.125%,
respectively.
|
||
(3)
|
The
Company limited its interest rate exposure by entering into a rate lock
agreement with a LIBOR floor and cap of 3.37% and 4.45%, respectively, for
a notional contract amount of approximately $4,115,000 and a fixed rate of
3.565% on a notional contract amount of approximately
$385,000.
|
|
(4)
|
The
Company limited its interest rate exposure by entering into a rate lock
agreement that swapped the underlying variable rate for a fixed rate of
3.60%, plus a spread of 1.65%.
|
|
(5)
|
The
effective interest rate adjusts to the greater of 6.55% or the five-year
U.S. Treasury rate plus 3.50%.The note can be prepaid with no less than 30
days notice with a 1% premium of the then outstanding principal
balance.
|
|
(6)
|
The effective interest rate
adjusts at the discretion of the lender in the 6th
year.
|
Mortgage
Notes
|
||||
2009
(Remaining portion of year)
|
$
|
283,292
|
||
2010
|
1,262,297
|
|||
2011
|
2,122,777
|
|||
2012
|
2,278,141
|
|||
2013
|
59,087,627
|
|||
2014
and thereafter
|
72,275,434
|
|||
Total
|
$
|
137,309,568
|
Quoted Prices in
Active Markets
Level 1
|
Significant Other
Observable Inputs
Level 2
|
Significant
Unobservable Inputs
Level 3
|
Balance at
September 30, 2009
|
|||||||||||||
Derivatives,
net
|
$
|
—
|
$
|
3,173,358
|
$
|
—
|
$
|
3,173,358
|
Carrying Amount at
September 30, 2009
|
Fair Value at
September 30, 2009
|
Carrying Amount at
December 31, 2008
|
Fair Value at
December 31, 2008
|
|||||||||||||
Mortgage
notes payable
|
$
|
137,309,568
|
$
|
127,697,465
|
$
|
112,741,801
|
$
|
105,617,656
|
||||||||
Other
long-term notes payable
|
13,000,000
|
13,000,000
|
1,089,500
|
1,089,500
|
Interest Rate Derivative
|
Number of Instruments
|
Notional
|
||||||
Interest
Rate Swaps
|
2
|
$
|
33,222,658
|
|||||
Interest
Rate Collars
|
1
|
$
|
4,115,268
|
Balance Sheet Location
|
Fair Value (liability)
|
||
Derivatives
designated as hedging instruments:
|
|||
Interest
Rate Products
|
Derivatives,
at fair value
|
($1,909,882)
|
|
Derivatives
not designated as hedging instruments:
|
|||
Interest
Rate Products
|
Derivatives,
at fair value
|
($1,263,476)
|
Three Months
Ended
September 30,
2009
|
Nine Months
Ended
September 30,
2009
|
|||||||
Amount
of loss recognized in accumulated other comprehensive income as
interest rate derivatives (effective portion)
|
$ | (709,894 | ) | $ | (194,528 | ) | ||
Amount
of loss reclassified from accumulated other comprehensive
income into income as interest expense (effective portion)
|
$ | (313,134 | ) | $ | (866,099 | ) | ||
Amount
of gain recognized in income on derivative as gain on derivative
instruments (ineffective portion and amount excluded from effectiveness
testing)
|
$ | 903 | $ | 592 |
Location of Gain or (Loss)
Recognized
in Income on Derivative
|
Three Months Ended
September 30, 2009
|
Nine Months Ended
September 30, 2009
|
||||||
Interest
expense
|
$ | (198,633 | ) | $ | (568,360 | ) | ||
Gains
(losses) on derivative instruments
|
(195,957 | ) | 353,320 | |||||
Total
|
$ | (394,590 | ) | $ | (215,040 | ) |
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Total
Commissions paid to Dealer Manager
|
$ | 4,622,557 | $ | 55,996 | $ | 8,332,294 | $ | 93,201 | ||||||||
Less:
|
||||||||||||||||
Commissions
to participating broker dealers
|
(3,177,812 | ) | (22,417 | ) | (5,676,367 | ) | (48,460 | ) | ||||||||
Reallowance
to participating broker dealers
|
(303,612 | ) | (3,035 | ) | (509,509 | ) | (3,035 | ) | ||||||||
Net
to affiliated Dealer Manager (1)
|
$ | 1,141,133 | $ | 30,544 | $ | 2,146,418 | $ | 41,706 |
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Acquisition
cost reimbursements
|
$ | 742,546 | $ | 215,757 | $ | 742,546 | $ | 1,047,874 | ||||||||
Financing
coordination fees
|
411,784 | 187,212 | 411,784 | 810,987 | ||||||||||||
Organizational
and offering expense reimbursements
|
1,821,000 | — | 3,916,836 | 119,207 | ||||||||||||
Refund
of organization and offering expense by Advisor (1)
|
— | — | — | (60,000 | ) | |||||||||||
Net
to affiliated Advisor
|
$ | 2,975,330 | $ | 402,969 | $ | 5,071,166 | $ | 1,918,068 |
Three Months Ended September
30,
|
Nine Months Ended September
30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Earned
asset management fee
|
$ | 483,878 | $ | 216,551 | $ | 1,255,021 | $ | 430,730 | ||||||||
Paid
to affiliate
|
(70,000 | ) | — | (70,000 | ) | — | ||||||||||
Waived
by affiliate (not deferred)
|
(413,878 | ) | (216,551 | ) | (1,185,021 | ) | (430,730 | ) | ||||||||
Net
asset management fee activity
|
$ | — | $ | — | $ | — | $ | — | ||||||||
Prepaid
asset management fees
|
$ | 1,134,500 | $ | — | $ | 1,134,500 | $ | — |
Basic and Diluted
Three Months Ended
September 30,
|
Basic and Diluted
Nine Months
Ended September 30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Net
loss attributable to American Realty Capital Trust,
Inc.
|
$ | (1,484,012 | ) | $ | (845,124 | ) | $ | (3,495,616 | ) | $ | (1,641,345 | ) | ||||
Total
weighted average common shares outstanding
|
6,639,111 | 1,101,127 | 3,791,302 | 699,883 | ||||||||||||
Loss
per share
|
$ | (0.22 | ) | $ | (0.77 | ) | $ | (0.92 | ) | $ | (2.35 | ) |
Source of Capital
|
Inception to
September 30, 2009
|
October 1 to
November 12, 2009
|
Total
|
|||||||||
Common
shares
|
$ | 89,213,532 | $ | 25,399,337 | $ | 114,612,869 | ||||||
Notes
payable
|
13,000,000 | — | 13,000,000 | |||||||||
Exchange
proceeds (1)
|
3,739,260 | 64,000 | 3,803,260 | |||||||||
Total
|
$ | 105,952,792 | $ | 25,463,337 | $ | 131,416,129 |
(1)
|
Includes
amounts received by the Company in connection with transactions completed
through its affiliate, American Realty Capital Exchange,
LLC. Such transactions include joint ventures whereby
unaffiliated third-party investors co-invested in investment properties
that are majority owned and controlled by the
Company.
|
•
|
Neither
we nor our Advisor have a prior operating history and our Advisor does not
have any experience operating a public company. This inexperience makes
our future performance difficult to
predict.
|
•
|
All
of our executive officers are also officers, managers and/or holders of a
direct or indirect controlling interest in our Advisor, our dealer manager
and other affiliated entities. As a result, our executive officers, our
Advisor and its affiliates face conflicts of interest, including
significant conflicts created by our Advisor’s compensation arrangements
with us and other investors advised by American Realty Capital affiliates
and conflicts in allocating time among us and these other investors. These
conflicts could result in unanticipated
actions.
|
•
|
Because
investment opportunities that are suitable for us may also be suitable for
other American Realty Capital-advised investors, our Advisor and its
affiliates face conflicts of interest relating to the purchase of
properties and such conflicts may not be resolved in our favor, meaning
that we could invest in less attractive properties, which could reduce the
investment return to our
stockholders.
|
•
|
If
we raise substantially less than the maximum offering in our ongoing
initial public offering, we may not be able to invest in a diverse
portfolio of real estate assets and the value of an investment in us may
vary more widely with the performance of specific
assets.
|
•
|
While
we are raising capital and investing the proceeds of our ongoing initial
public offering, the high demand for the type of properties we desire to
acquire may cause our distributions and the long-term returns of our
investors to be lower than they otherwise
would.
|
•
|
We
depend on tenants for our revenue, and, accordingly, our revenue is
dependent upon the success and economic viability of our
tenants.
|
•
|
Increases
in interest rates could increase the amount of our debt payments and limit
our ability to pay distributions to our
stockholders.
|
•
|
a
significant decrease in the market price of a long-lived
asset;
|
•
|
a
significant adverse change in the extent or manner in which a long-lived
asset is being used or in its physical
condition;
|
•
|
a
significant adverse change in legal factors or in the business climate
that could affect the value of a long-lived asset, including an adverse
action or assessment by a
regulator;
|
•
|
an
accumulation of costs significantly in excess of the amount originally
expected for the acquisition or construction of a long-lived asset;
and
|
•
|
a
current-period operating or cash flow loss combined with a history of
operating or cash flow losses or a projection or forecast that
demonstrates continuing losses associated with the use of a long-lived
asset.
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008 (5)
|
|||||||||||||
Net
Loss
|
$ | (1,484,012 | ) | $ | (845,124 | ) | $ | (3,495,616 | ) | $ | (1,299,493 | ) | ||||
Depreciation
of real estate assets
|
1,628,155 | 717,410 | 4,352,418 | 1,333,927 | ||||||||||||
Amortization
of intangible lease assets, net
|
356,986 | 139,777 | 894,985 | 259,743 | ||||||||||||
Mark-to
market adjustment (1)
|
193,323 | 176,656 | (387,936 | ) | (20,160 | ) | ||||||||||
Noncontrolling
interest adjustment (2)
|
(88,246 | ) | — | (88,246 | ) | — | ||||||||||
FFO
|
606,206 | 188,719 | 1,275,605 | 274,017 | ||||||||||||
Acquisition
and trasaction related costs(3)
|
347,036 | — | 347,036 | — | ||||||||||||
Modified
FFO
|
$ | 953,242 | $ | 188,719 | $ | 1,622,641 | $ | 274,017 | ||||||||
Distributions
paid (4)
|
$ | 883,481 | $ |