VEREIT
Annual Report 2016

Plain-text annual report

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Please exercise your stockholder right to vote. www.VEREIT.com 2016 Annual Report VEREIT-2016AnnualReportCover-2017-v2.indd 1-3 3/14/17 2:53 PM As a full-service real estate operating company, VEREIT is driven to serve our tenants, stakeholders and employees through discipline, transparency and consistency. www.VEREIT.com Letter from the CEO Dear Stockholder, I am pleased to report that 2016 proved to be a successful year as we substantially achieved the core components of the business plan outlined in 2015, and in certain areas exceeded expectations. Business Plan Accomplishments Pillar One: Through property culling, enhance the real estate portfolio. Result: We completed approximately $1.14 billion of dispositions in 2016, for a total of nearly $2.6 billion since 2015, exceeding the top end of our original guidance by $400.0 million. As a result, our portfolio has greater diversification and therefore less risk. Pillar Two: Re-establish the brand value of Cole Capital. Result: We increased market share among non-listed REIT sponsors to 10.8% in 2016, compared to 2.7% in 2015. We successfully closed CCIT II and opened CCIT III. Pillar Three: Reduce debt and move the balance sheet towards investment-grade metrics. Result: We reduced net debt from $8.0 billion to $6.1 billion and increased our liquidity with full capacity on our $2.3 billion revolving line of credit. This resulted in investment- grade ratings on our debt from both S&P and Fitch Ratings. Pillar Four: Adopt a sustainable dividend policy. Result: The Board authorized and declared a common stock dividend of $0.1375 per share for each quarter of 2016. Operational Achievements We finished the year with occupancy above 98% and 4.9 million square feet of leasing activity, of which 3.6 million square feet were early renewals. Diversification - which is one of our portfolio’s core attributes - across our three property types was further enhanced as we implemented our culling process resulting in 62.6% retail, including restaurants; 15.6% industrial; and 21.8% office, which we will continue to reduce exposure to in 2017. Our Top 10 tenants represent 30.2% of the portfolio, which is among the lowest concentration in the industry. Balance Sheet Strength In addition to enhancing the portfolio, we significantly transformed our capital structure during 2016 and placed ourselves in a strong position going forward. In addition to the balance sheet enhancements outlined above, we issued $1.0 billion of unsecured senior notes and $702.5 million of equity to prepay bonds expiring in February 2017 and partially paid down our term loan; lengthened our debt duration and created a well-staggered maturity schedule; and established a continuous equity offering program with an aggregate sales price of up to $750.0 million through September 2019. These accomplishments, along with the overall implementation of our business plan, resulted in investment grade ratings much sooner than anticipated and we were able to go on the offensive with fourth quarter acquisitions. Management Prowess These accomplishments would not have been possible without the leadership of our management team and the collective efforts of all the employees at VEREIT. Our transactions team was able to seamlessly transition from acquiring to disposing of balance sheet assets as we culled the portfolio, and are now focusing again on leverage-neutral acquisitions to augment the portfolio. Our operations team achieved year-end occupancy above our goal of 98%, even as e-commerce and uncertainty in the markets impacted the industry. The finance team demonstrated our ability to timely access both the debt and equity markets and provide low-cost capital. We have one of the strongest Board of Directors in the REIT industry with extensive public company leadership experience, as well as proficiency in real estate, finance, law, capital markets, institutional management, credit and other relevant disciplines. The addition of Richard J. Lieb and Mary Hogan Preusse as new independent board members demonstrates our commitment to have a Board of the highest quality. Outlook We are continually monitoring the financial health and credit of our tenants. Our retail focus has been, and will continue to be, on necessity and off-price retailers which we believe are positioned to weather various economic trends. Key categories include general discount, pharmacy, grocery, and home and garden. Within these categories, our exposure is predominantly with investment-grade-rated tenants and brand-name segment leaders including Family Dollar, Walmart, TJ Maxx, Walgreens, CVS, Albertson’s, Kroger, The Home Depot, Lowes, PetSmart and LA Fitness. During the fourth quarter, we acquired $80.2 million of properties. Our retail acquisition focus will continue on off-price segments including traditional and specialty grocers, select sporting goods, beauty aids, convenience stores, furniture, pet supplies, arts & crafts, home improvement and fitness. In 2017, we will also seek industrial assets in strategic locations with appropriate building functionality and tenants. On a macro level, there are a number of prospective economic variables, all moving at the same time, and some contradictory to each other: interest rates, inflation, GDP growth, tax, trade policy and potential regulatory policy changes, to name a few. This has led to uncertainty and lack of visibility towards the economic future. This uncertainty will lead some investors to look for simple, stable real estate investments - especially those with good yields - like VEREIT. We will remain focused and believe our business plan provides a solid balance sheet with a diversified portfolio. On behalf of all of us at VEREIT, I want to thank you for your trust as we executed our business plan. We will continue to monitor the economic environment and make sure we are on the right course, but our foundation and strategy are both solidly in place. The stability we have created is now our strength. Glenn J. Rufrano Chief Executive Officer | VEREIT, Inc. Executive Vice President & Chief Financial Officer Executive Vice President & Chief Operating Officer Executive Vice President, General Counsel & Secretary Executive Vice President, Investment Management Executive Team Glenn J. Rufrano Chief Executive Officer Michael J. Bartolotta Lauren Goldberg Board of Directors Hugh R. Frater Non-Executive Chairman Former Chairman and CEO of Berkadia David B. Henry Co-Founder and Chairman of Peaceable Street Capital Mary Hogan Preusse Managing Director and Co-Head of Americas Real Estate for APG Asset Management US1 Richard J. Lieb Managing Director and Chairman of Real Estate at Greenhill & Co., LLC Investor Relations InvestorRelations@VEREIT.com 877.405.2653 Thomas W. Roberts Executive Vice President & Chief Investment Officer Paul H. McDowell William C. Miller Mark S. Ordan CEO of Quality Care Properties, Inc. Eugene A. Pinover Partner and Chair of Real Estate Practice at DLA Piper Julie G. Richardson Former Senior Advisor at Providence Equity Partners Glenn J. Rufrano Chief Executive Officer of VEREIT, Inc. VEREIT, Inc. Headquarters 2325 East Camelback Road, Suite 1100 Phoenix, Arizona 85016 The following table shows a reconciliation of Net Debt to the amounts presented in accordance with GAAP on the balance sheet for the periods presented: (dollar amounts in thousands) Mortgage notes payable and other debt, net Corporate bonds, net Convertible debt, net Credit facility, net Total debt - as reported Adjustments: Deferred financing costs, net Net premiums Less: cash and cash equivalents Net Debt Mortgage notes payable associated with assets held for sale December 31, 2016 December 31, 2015 $2,671,106 2,226,224 973,340 496,578 — 6,367,248 55,660 (22,012) 256,452 $3,111,985 2,536,333 962,894 1,448,590 — 8,059,802 62,674 (39,131) 69,103 $6,144,444 $8,014,242 1) Ms. Hogan Preusse announced she will be leaving APG Asset Management US in early May 2017. VEREIT is not affiliated or associated with, is not endorsed by, does not endorse, and is not sponsored by or a sponsor of the tenants or of their products or services pictured or mentioned. The names, logos and all related product and service names, design marks and slogans are the trademarks or service marks of their respective companies. VEREIT-2016AnnualReportCover-2017-v2.indd 4-6 3/14/17 2:53 PM UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2016 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to __________ Commission file numbers: 001-35263 and 333-197780 VEREIT, Inc. VEREIT Operating Partnership, L.P. (Exact name of registrant as specified in its charter) Maryland (VEREIT, Inc.) Delaware (VEREIT Operating Partnership, L.P.) 45-2482685 45-1255683 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 2325 E. Camelback Road, Suite 1100, Phoenix, AZ (Address of principal executive offices) 85016 (Zip Code) (800) 606-3610 (Registrant’s telephone number, including area code) Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934: Title of each class: Name of each exchange on which registered: Common Stock, $0.01 par value per share (VEREIT, Inc.) New York Stock Exchange 6.70% Series F Cumulative Redeemable Preferred Stock, $0.01 par value per share (VEREIT, Inc.) New York Stock Exchange Securities registered pursuant to Section 12(g) of the Securities Exchange Act of 1934: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act of 1933. VEREIT, Inc. Yes VEREIT Operating Partnership, L.P. Yes No No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934. VEREIT, Inc. Yes VEREIT Operating Partnership, L.P. Yes No No Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. VEREIT, Inc. Yes VEREIT Operating Partnership, L.P. Yes No No Indicate by check mark whether the registrant submitted electronically and posted on its corporate Web Site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). VEREIT, Inc. Yes VEREIT Operating Partnership, L.P. Yes No No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. VEREIT, Inc. Large accelerated filer Non-accelerated filer (Do not check if a smaller reporting company) Smaller reporting company Accelerated filer VEREIT Operating Partnership, L.P. Large accelerated filer Accelerated filer Non-accelerated filer (Do not check if a smaller reporting company) Smaller reporting company Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). VEREIT, Inc. Yes VEREIT Operating Partnership, L.P. Yes No No The aggregate market value of voting and non-voting common stock held by non-affiliates of VEREIT, Inc. as of June 30, 2016 was approximately $9.2 billion based on the closing sale price for VEREIT, Inc.’s common stock on that day as reported by the New York Stock Exchange. Such value excludes common stock held by executive officers and directors. There were 974,109,378 shares of common stock of VEREIT, Inc. outstanding as of February 22, 2017. There is no public trading market for the common units of VEREIT Operating Partnership, L.P. As a result, the aggregate market value of the common units held by non-affiliates of VEREIT Operating Partnership, L.P. cannot be determined. DOCUMENTS INCORPORATED BY REFERENCE Certain portions of VEREIT, Inc.’s Definitive Proxy Statement for its 2017 Annual Meeting of Stockholders (the “Proxy Statement”) to be filed pursuant to Rule 14a-6 of the Securities Exchange Act of 1934, as amended, are incorporated by reference into this Annual Report on Form 10-K. Other than those portions of the Proxy Statement specifically incorporated by reference pursuant to Items 10 through 14 of Part III hereof, no other portions of the Proxy Statement shall be deemed so incorporated. EXPLANATORY NOTE This report combines the Annual Reports on Form 10-K for the year ended December 31, 2016 of VEREIT, Inc., a Maryland corporation, and VEREIT Operating Partnership, L.P., a Delaware limited partnership, of which VEREIT, Inc. is the sole general partner. Unless otherwise indicated or unless the context requires otherwise, all references in this report to “we,” “us,” “our,” “VEREIT,” or the “Company” mean VEREIT, Inc., which we sometimes refer to as the “General Partner”, together with its consolidated subsidiaries, including VEREIT Operating Partnership, L.P., and all references to the “Operating Partnership” or “OP” mean VEREIT Operating Partnership, L.P. together with its consolidated subsidiaries. As the sole general partner of VEREIT Operating Partnership, L.P., VEREIT, Inc. has the full, exclusive and complete responsibility for the Operating Partnership’s day-to-day management and control. We believe combining the Annual Reports on Form 10-K of VEREIT, Inc. and VEREIT Operating Partnership, L.P. into this single report results in the following benefits: • • • enhancing investors’ understanding of the Company and the Operating Partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business; eliminating duplicative disclosure and providing a more streamlined and readable presentation since a substantial portion of the disclosure applies to both the Company and the Operating Partnership; and creating time and cost efficiencies through the preparation of one combined report instead of two separate reports. There are a few differences between the Company and the Operating Partnership, which are reflected in the disclosure in this report. We believe it is important to understand the differences between the Company and the Operating Partnership in the context of how we operate as an interrelated consolidated company. VEREIT, Inc. is a real estate investment trust whose only material asset is its ownership of partnership interests of the Operating Partnership. As a result, VEREIT, Inc. does not conduct business itself, other than acting as the sole general partner of the Operating Partnership, issuing public equity or debt from time to time and guaranteeing certain unsecured debt of the Operating Partnership and certain of its subsidiaries. The Operating Partnership holds substantially all of the assets of the Company and holds the ownership interests in the Company’s joint ventures. The Operating Partnership conducts the operations of the business and is structured as a partnership with no publicly traded equity. Except for net proceeds from public equity issuances by VEREIT, Inc., which are generally contributed to the Operating Partnership in exchange for partnership units, the Operating Partnership generates the capital required by the Company’s business through the Operating Partnership’s operations, by the Operating Partnership’s direct or indirect incurrence of indebtedness or through the issuance of partnership units. To help investors understand the significant differences between VEREIT, Inc. and the Operating Partnership, there are separate sections in this report that separately discuss VEREIT, Inc. and the Operating Partnership, including the consolidated financial statements and certain notes to the consolidated financial statements as well as separate Exhibit 31 and Exhibit 32 certifications. As general partner with control of the Operating Partnership, VEREIT, Inc. consolidates the Operating Partnership for financial reporting purposes. Therefore, the assets and liabilities of VEREIT, Inc. and VEREIT Operating Partnership, L.P. are the same on their respective consolidated financial statements. The separate discussions of VEREIT, Inc. and VEREIT Operating Partnership, L.P. in this report should be read in conjunction with each other to understand the results of the Company on a consolidated basis and how management operates the Company. Forward-Looking Statements This Annual Report on Form 10-K includes “forward-looking statements” (within the meaning of the federal securities laws, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Exchange Act) that reflect our expectations and projections about our future results, performance, prospects and opportunities. We have attempted to identify these forward-looking statements by the use of words such as “may,” “will,” “seek,” “expects,” “anticipates,” “believes,” “targets,” “intends,” “should,” “estimates,” “could,” “continue,” “assume,” “projects,” “plans” or similar expressions. These forward-looking statements are based on information currently available to us and are subject to a number of known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. These factors include, among other things, those discussed below. We intend for all such forward-looking statements to be covered by the safe harbor provisions for forward- looking statements contained in Section 27A of the Securities Act and Section 21E of the Exchange Act, as applicable by law. We do not undertake publicly to update or revise any forward-looking statements, whether as a result of changes in underlying assumptions or new information, future events or otherwise, except as may be required to satisfy our obligations under federal securities law. The following are some, but not all, of the assumptions, risks, uncertainties and other factors that could cause our actual results to differ materially from those presented in our forward-looking statements: • We may be unable to renew leases, lease vacant space or re-lease space as leases expire on favorable terms or at all. • We are subject to risks associated with tenant, geographic and industry concentrations with respect to our properties. • Our properties, goodwill and intangible assets and other assets may be subject to impairment charges. • We could be subject to unexpected costs or unexpected liabilities that may arise from potential dispositions. • We are subject to competition in the acquisition and disposition of properties and in the leasing of our properties and we may be unable to acquire, dispose of, or lease properties on advantageous terms. • We could be subject to risks associated with bankruptcies or insolvencies of tenants or from tenant defaults generally. • We may be affected by risks associated with pending government investigations relating to the findings of the previously- announced investigation conducted by the audit committee (the “Audit Committee”) of the General Partner’s board of directors (the “Audit Committee Investigation”) and related litigation. • We have substantial indebtedness, which may affect our ability to pay dividends, and expose us to interest rate fluctuation risk and the risk of default under our debt obligations. • Our overall borrowing and operating flexibility may be adversely affected by the terms and restrictions within the indenture governing the Senior Notes (as defined in Note 11 – Debt), and the terms of the Credit Facility (as defined in Note 11 – Debt). • Our access to capital and terms of future financings may be affected by adverse changes to our credit rating. • We may be affected by the incurrence of additional secured or unsecured debt. • We may not be able to achieve and maintain profitability. • We may not generate cash flows sufficient to pay our dividends to stockholders or meet our debt service obligations. • We may be affected by risks resulting from losses in excess of insured limits. • We may fail to remain qualified as a real estate investment trust (“REIT”) for U.S. federal income tax purposes. • Compliance with the REIT annual distribution requirements may limit our operating flexibility. • We may be unable to fully reestablish the financial network which previously supported Cole Capital® and its Cole REITs (defined below) and/or regain the prior level of transaction and capital raising volume of Cole Capital. • Our Cole Capital operations are subject to extensive governmental regulation. • We are subject to conflicts of interest relating to Cole Capital’s investment management business. • We may be unable to retain or hire key personnel. All forward-looking statements should be read in light of the risks identified in Part I, Item 1A. Risk Factors within this Annual Report on Form 10-K. We use certain defined terms throughout this Annual Report on Form 10-K that have the following meanings: When we refer to “annualized rental income,” we mean the rental revenue under our leases on operating properties owned at the respective reporting date on a straight-line basis, which includes the effect of rent escalations and any tenant concessions, such as free rent, and excludes any bad debt allowances and any contingent rent, such as percentage rent. Management uses annualized rental income as a basis for tenant, industry and geographic concentrations and other metrics within the portfolio. Annualized rental income is not indicative of future performance. 4 When we refer to a “creditworthy tenant,” we mean a tenant that has entered into a lease that we determine is creditworthy and may include tenants with an investment grade or below investment grade credit rating, as determined by major credit rating agencies, or unrated tenants. To the extent we determine that a tenant is a “creditworthy tenant” even though it does not have an investment grade credit rating, we do so based on our management’s determination that a tenant should have the financial wherewithal to honor its obligations under its lease with us. As explained further below, this determination is based on our management’s substantial experience performing credit analysis and is made after evaluating all of a tenant’s due diligence materials that are made available to us, including financial statements and operating data. When we refer to a “direct financing lease,” we mean a lease that requires specific treatment due to the significance of the lease payments from the inception of the lease compared to the fair value of the property, term of the lease, a transfer of ownership, or a bargain purchase option. These leases are recorded as a net asset on the balance sheet. The amount recorded is calculated as the fair value of the remaining lease payments on the leases and the estimated fair value of any expected residual property value at the end of the lease term. When we refer to properties that are net leased on a “long term basis,” we mean properties with remaining primary lease terms of generally seven to 10 years or longer on average, depending on property type. Under a “net lease,” the tenant occupying the leased property (usually as a single tenant) does so in much the same manner as if the tenant were the owner of the property. There are various forms of net leases, most typically classified as triple net or double net. Triple net leases typically require the tenant pay all expenses associated with the property (e.g., real estate taxes, insurance, maintenance and repairs). Double net leases typically require that the tenant pay all operating expenses associated with the property (e.g., real estate taxes, insurance and maintenance), but excludes some or all major repairs (e.g., roof, structure and parking lot). Accordingly, the owner receives the rent “net” of these expenses, rendering the cash flow associated with the lease predictable for the term of the lease. Under a net lease, the tenant generally agrees to lease the property for a significant term and agrees that it will either have no ability or only limited ability to terminate the lease or abate rent prior to the expiration of the term of the lease as a result of real estate driven events such as casualty, condemnation or failure by the landlord to fulfill its obligations under the lease. 5 Item 1. Business. Overview PART I We are a full-service real estate operating company that operates through two business segments, our real estate investment (“REI”) segment and our investment management segment, Cole Capital, as further discussed in “Note 3 – Segment Reporting” to our consolidated financial statements. Through our REI segment, we own and actively manage a diversified portfolio of 4,142 retail, restaurant, office and industrial real estate properties with an aggregate of 93.3 million square feet, of which 98.3% was leased as of December 31, 2016, with a weighted-average remaining lease term of 9.9 years. Through our Cole Capital segment, we are responsible for raising capital for and managing the affairs of certain non-listed real estate investment trusts (the “Cole REITs”) on a day-to-day basis, identifying and making acquisitions and investments on behalf of the Cole REITs, and recommending to the respective board of directors of each of the Cole REITs an approach for providing investors with liquidity. Cole Capital receives compensation and reimbursement for performing these services. Substantially all of the REI segment’s operations are conducted through the Operating Partnership. VEREIT, Inc. is the sole general partner and holder of 97.6% of the common partnership interests in the Operating Partnership (the “OP Units”) as of December 31, 2016 with the remaining 2.4% of the OP Units owned by certain non-affiliated investors and certain former directors, officers and employees of the Former Manager (defined below). Substantially all of the Cole Capital segment’s operations are conducted through Cole Capital Advisors, Inc. (“CCA”), an Arizona corporation and a wholly owned subsidiary of the Operating Partnership. CCA is treated as a taxable REIT subsidiary (“TRS”) under Section 856 of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”). Prior to January 8, 2014, we were externally managed by ARC Properties Advisors, LLC (the “Former Manager”) on a day-to-day basis, with the exception of certain acquisition, accounting and portfolio management activities which were performed by our employees. In August 2013, our board of directors (the “Board of Directors” or the “Board”) determined that it was in our best interests to become self-managed, and we completed our transition to self-management on January 8, 2014. Through strategic mergers and acquisitions discussed in “Note 6 – Mergers with Real Estate Businesses” to our consolidated financial statements, the Company has grown significantly since incorporation. VEREIT, Inc. was incorporated in the State of Maryland on December 2, 2010 and has elected to be treated as a REIT for U.S. federal income tax purposes. The Operating Partnership was incorporated in the State of Delaware on January 13, 2011. We operate our business in a manner that permits us to maintain our exemption from registration under the Investment Company Act of 1940, as amended (the “Investment Company Act”). VEREIT, Inc.’s shares of common stock and 6.70% Series F Cumulative Redeemable Preferred Stock (“Series F Preferred Stock”) trade on the New York Stock Exchange (the “NYSE”) under the trading symbols “VER” and “VER PRF,” respectively. 2016 Developments Real Estate Acquisitions During the year ended December 31, 2016, the Company acquired controlling financial interests in eight commercial properties for an aggregate purchase price of $100.2 million. Real Estate Dispositions During the year ended December 31, 2016, the Company disposed of 301 properties and one property owned by an unconsolidated joint venture for an aggregate sales price of $1.20 billion, of which the Company’s share was $1.14 billion, resulting in consolidated proceeds of $1.00 billion after closing costs, $55.0 million of debt assumptions and $57.0 million of debt repayments by the unconsolidated joint venture. Balance Sheet and Liquidity 2016 Bond Offering and $300.0 million 2016 Term Loan On June 2, 2016, the Operating Partnership closed its senior note offering (the “2016 Bond Offering”), consisting of (i) $0.4 billion aggregate principal amount of 4.125% Senior Notes due June 1, 2021 and (ii) $0.6 billion aggregate principal amount of 4.875% Senior Notes due June 1, 2026 and entered into the $300.0 million 2016 Term Loan, as defined in Note 11 – Debt. On July 5, 2016, the Company redeemed all of the $1.3 billion aggregate principal amount of our outstanding 2.000% Senior Notes due February 2017, plus accrued and unpaid interest thereon and the required make-whole premium. Common Stock Offering On August 10, 2016, VEREIT, Inc. issued 69.0 million shares of common stock in a public offering for net proceeds, after underwriting discounts and offering costs, of $702.5 million, which were used to repay the entire $300.0 million 2016 Term Loan and in part to repay amounts under the Credit Facility. 6 Common Stock Continuous Offering Program On September 19, 2016, the Company registered a continuous equity offering program (the “Program”) pursuant to which the Company can offer and sell, from time to time through September 19, 2019 in “at-the-market” offerings or certain other transactions, shares of common stock with an aggregate gross sales price of up to $750.0 million, through its sales agents. There were no shares of common stock issued under the Program during the year ended December 31, 2016. Debt Repayments As a result of the reduction in mortgage debt due to property dispositions and other measures taken by management, the Company decreased total debt by $1.7 billion, from $8.1 billion to $6.4 billion, comprised of unsecured bonds of $0.3 billion, unsecured Credit Facility of $1.0 billion, and secured debt of $0.4 billion. Primary Investment Focus We own and actively manage a diversified portfolio of retail, restaurant, office and industrial real estate assets subject to long- term net leases with creditworthy tenants. Our focus is on single-tenant, net-leased properties that are strategically located and essential to the business operations of the tenant, as well as retail properties that offer necessity and value-oriented products or services. We actively manage the portfolio by considering several metrics including property type, tenant concentration, geography, credit and key economic factors for appropriate balance and diversity. We believe that actively managing our portfolio allows us to attain the best operating results for each asset and the overall portfolio through strategic planning, implementation of these plans and responding proactively to changes and challenges in the marketplace. Additionally, we employ a shared services model for Cole Capital’s portfolios by providing transactional and operational real estate functions. The shared services model allows our strong and experienced real estate team to be active in the markets at all times and manage complimentary portfolios. Investment Policies When evaluating prospective investments in or dispositions of real property, our management considers relevant real estate and financial factors, including the location of the property, the leases and other agreements affecting the property and business operations of the tenant, the creditworthiness of major tenants, its income-producing capacity, its physical condition, its prospects for appreciation, its prospects for liquidity, tax considerations and other factors. In this regard, our management will have substantial discretion with respect to the selection of specific investments, subject in certain instances to the approval of the Board of Directors. As part of our overall portfolio strategy, we seek to lease space and/or acquire properties leased to creditworthy tenants that meet our underwriting and operating guidelines. Prior to entering into any transaction, our corporate credit analysis and underwriting professionals conduct a review of a tenant’s credit quality. In addition, we consistently monitor the credit quality of our portfolio by actively reviewing the creditworthiness of certain tenants, focusing primarily on those tenants representing the greatest concentration of our portfolio. This review primarily includes an analysis of the tenant’s financial statements either quarterly, or as frequently as the lease permits. We also consider tenant credit quality when assessing our portfolio for strategic dispositions. When we assess tenant credit quality, we, among other factors that we may deem relevant: (i) review relevant financial information, including financial ratios, net worth, revenue, cash flows, leverage and liquidity; (ii) evaluate the depth and experience of the tenant’s management team; and (iii) assess the strength/growth of the tenant’s industry. On an on-going basis, we evaluate the need for an allowance for doubtful accounts arising from estimated losses that could result from the tenant’s inability to make required current rent payments and an allowance against accrued rental income for future potential losses that we deem to be unrecoverable over the term of the lease. The factors considered in determining the credit risk of our tenants include, but are not limited to: payment history; credit status and change in status (credit ratings for public companies are used as a primary metric); change in tenant space needs (i.e., expansion/downsize); tenant financial performance; economic conditions in a specific geographic region; and industry specific credit considerations. We are of the opinion that the credit risk of our portfolio is reduced by the high quality of our existing tenant base, reviews of prospective tenants’ risk profiles prior to lease execution and consistent monitoring of our portfolio to identify potential problem tenants. 7 Real Estate Investments As of December 31, 2016, the Company owned 4,142 properties comprising 93.3 million square feet of retail and commercial space located in 49 states, Puerto Rico and Canada, which includes properties owned through consolidated joint ventures. The rentable space at these properties was 98.3% leased with a weighted-average remaining lease term of 9.9 years. There were no tenants exceeding 10% of our consolidated annualized rental income as of December 31, 2016 or 2015. As of December 31, 2014, leases with Red Lobster® restaurants represented 11.6% of our consolidated annualized rental income. As of December 31, 2016, 2015 and 2014, properties located in Texas represented 13.5%, 13.1% and 12.7%, respectively, of our consolidated annualized rental income. As of December 31, 2016, tenants in the casual dining restaurant and manufacturing industries accounted for 15.6% and 10.1%, respectively, of our consolidated annualized rental income. As of December 31, 2015, tenants in the casual dining restaurant and manufacturing industries accounted for 16.6% and 10.1%, respectively, of our consolidated annualized rental income. As of December 31, 2014, tenants in the casual dining restaurant industry accounted for 18.4% of our consolidated annualized rental income. Cole Capital® Cole Capital sponsors and manages direct investment real estate programs, which primarily include five publicly registered, non-listed REITs, as discussed in “Note 2 – Summary of Significant Accounting Policies” to our consolidated financial statements. Cole Capital is responsible for raising capital for and managing the day-to-day affairs of the Cole REITs, identifying and making acquisitions and investments on behalf of the Cole REITs, and recommending to each of the Cole REIT’s respective board of directors an approach for providing investors with liquidity. Cole Capital serves as the dealer manager and distributes shares of common stock for certain Cole REITs and advises them regarding offerings, manages relationships with participating broker- dealers and financial advisors, and provides assistance in connection with compliance matters relating to the offerings. Cole Capital receives compensation and reimbursement for services relating to the Cole REITs’ offerings and the investment, management, financing and disposition of their respective assets, as applicable. Cole Capital also develops new REIT offerings, including obtaining regulatory approvals from the U.S. Securities and Exchange Commission (the “SEC”), the Financial Industry Regulatory Authority, Inc. (“FINRA”) and various blue sky jurisdictions for such offerings. Financing Policies We rely on leverage to allow us to invest in a greater number of assets and enhance our asset returns. We expect our leverage metrics to improve over time. We intend to finance future acquisitions with the most advantageous source of capital available to us at the time of the transaction, which may include a combination of public and private offerings of our equity and debt securities, secured and unsecured corporate-level debt, property-level debt and mortgage financing and other public, private or bank debt. In addition, we may acquire properties in exchange for the issuance of common stock or OP Units and in many cases we may acquire properties subject to existing mortgage indebtedness. We also may obtain secured or unsecured debt to acquire properties, and we expect that our financing sources will include the public debt market, banks and institutional investment firms, including asset managers and life insurance companies. Although we intend to maintain a conservative capital structure, our charter does not contain a specific limitation on the amount of debt we may incur and the Board of Directors may implement or change target debt levels at any time without the approval of our stockholders. We intend to continue to emphasize unsecured corporate-level or OP-level debt in our financing and to seek to reduce the percentage of our assets which are secured by mortgage loans. For information relating to our Credit Facility, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources.” Competition In our REI segment, we are subject to competition in the acquisition and disposition of properties and in the leasing of our properties. We compete with a number of developers, owners and operators of retail, restaurant, office and industrial real estate, many of which own properties similar to ours in the same markets in which our properties are located. We also may face new competitors and, due to our focus on single-tenant properties located throughout the United States, and because many of our competitors are locally or regionally focused, we do not expect to encounter the same competitors in each region of the United States. Many of our competitors have greater financial and other resources than us and may have other advantages over us. Our competitors may be willing to accept lower returns on their investments and may succeed in buying the properties that we have targeted for acquisition. We may also incur costs in connection with unsuccessful acquisitions that we will not be able to recover. Foreign investors may view the U.S. real estate market as being more stable than other international markets and may increase investments in high-quality single-tenant properties, especially in gateway cities. 8 In our Cole Capital segment, we also face competition in raising funds for the Cole REITs from other entities with similar investment objectives such as other non-listed REITs, publicly traded REITs and private funds, including hedge funds. Regulations Our investments are subject to various federal, state, local and foreign laws, ordinances and regulations, including, among other things, health, safety and zoning regulations, land use controls, environmental controls relating to air and water quality, noise pollution and indirect environmental impacts such as increased motor vehicle activity. We believe that we have all material permits and approvals necessary under current law to operate our investments. Our properties are also subject to laws such as the Americans with Disabilities Act of 1990 (“ADA”), which require that all public accommodations must meet federal requirements related to access and use by disabled persons. Some of our properties may currently not be in compliance with the ADA. If one or more of the properties in our portfolio is not in compliance with the ADA or any other regulatory requirements, we may be required to incur additional costs to bring the property into compliance. Environmental Matters Under various federal, state and local environmental laws, a current owner of real estate may be required to investigate and clean up contaminated property. Under these laws, courts and government agencies have the authority to impose cleanup responsibility and liability even if the owner did not know of and was not responsible for the contamination. For example, liability can be imposed upon us based on the activities of our tenants or a prior owner. In addition to the cost of the cleanup, environmental contamination on a property may adversely affect the value of the property and our ability to sell, rent or finance the property, and may adversely impact our investment in that property. Prior to acquisition of a property, we will obtain Phase I environmental reports, or will rely on recent Phase I environmental reports. These reports will be prepared in accordance with an appropriate level of due diligence based on our standards and generally include a physical site inspection, a review of relevant federal, state and local environmental and health agency database records, one or more interviews with appropriate site-related personnel, review of the property’s chain of title and review of historic aerial photographs and other information on past uses of the property and nearby or adjoining properties. We may also obtain a Phase II investigation which may include limited subsurface investigations and tests for substances of concern where the results of the Phase I environmental reports or other information indicates possible contamination or where our consultants recommend such procedures. Employees As of December 31, 2016, we had approximately 350 employees. Available Information We electronically file Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all amendments to those reports, and proxy statements, with the SEC. You may read and copy any materials we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, D.C. 20549, or you may access them through the EDGAR database at the SEC’s website at http://www.sec.gov. In addition, copies of our filings with the SEC may be obtained from the website maintained for us at www.ir.vereit.com. We are providing our website address solely for the information of investors. We do not intend for the information contained on our website to be incorporated into this Annual Report on Form 10-K or other filings with the SEC. Item 1A. Risk Factors. Investors should carefully consider the following factors, together with all the other information included in this Annual Report on Form 10-K, in evaluating the Company and our business. If any of the following risks actually occur, our business, financial condition and results of operations could be materially and adversely affected, the trading price of the General Partner's securities could decline and its stockholders and/or the Operating Partnership's unitholders may lose all or part of their investment. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business operations. This “Risk Factors” section contains references to our “capital stock” and to our “stockholders” and “unitholders.” Unless expressly stated otherwise, references to our “capital stock” represent the General Partner’s common stock and any class or series of its preferred stock, references to our “stockholders” represent holders of the General Partner’s common stock and any class or series of its preferred stock and references to our “unitholders” represent holders of the OP units and any class of series of the Operating Partnership’s preferred units. 9 Risks Related to Our Business We are primarily dependent on single-tenant leases for our revenue and, accordingly, if we are unable to renew leases, lease vacant space, including vacant space resulting from tenant defaults, or re-lease space as leases expire on favorable terms or at all, our financial condition could be adversely affected. We focus our investment activities on ownership of freestanding, single-tenant commercial properties that are net leased to a single tenant. Therefore, the financial failure of, or other default by, a significant tenant or multiple tenants could cause a material reduction in our revenues and operating cash flows. In addition, to the extent that we enter into a master lease with a particular tenant, the termination of such master lease could affect each property subject to the master lease, resulting in the loss of revenue from all such properties. We cannot assure you that our leases will be renewed or that we will be able to lease or re-lease the properties on favorable terms, or at all, or that lease terminations will not cause us to sell the properties at a loss. Any of our properties that become vacant could be difficult to re-lease or sell. We have and may continue to experience vacancies either by the continued default of a tenant under its lease or the expiration of one of our leases. We typically must incur all of the costs of ownership for a property that is vacant. Upon or pending the expiration of leases at our properties, we may be required to make rent or other concessions to tenants, or accommodate requests for renovations, remodeling and other improvements, in order to retain and attract tenants. Certain of our properties may be specifically suited to the particular needs of a tenant (e.g., a retail bank branch or distribution warehouse) and major renovations and expenditures may be required in order for us to re-lease the space for other uses. If the vacancies continue for a long period of time, we may suffer reduced revenues, resulting in less cash available for distribution to our stockholders and unitholders. If we are unable to renew leases, lease vacant space, including vacant space resulting from tenant defaults, or re- lease space as leases expire on favorable terms or at all, our financial condition could be adversely affected. We are subject to tenant, geographic and industry concentrations that make us more susceptible to adverse events with respect to certain tenants, geographic areas or industries. As of December 31, 2016, we had derived approximately: • • • $96.7 million, or 8.2%, of our annualized rental income from Red Lobster®, a wholly owned subsidiary of Golden Gate Capital; $297.7 million, or 25.3%, of our annualized rental income from properties located in the following three states: Texas (13.5%), Illinois (6.2%), and Florida (5.6%); and $642.0 million, or 54.6%, of our annualized rental income from tenants in the following six industries: the casual dining restaurant industry (15.6%), the manufacturing industry (10.1%), the quick service restaurant industry (8.5%), the discount retail industry (7.8%), the pharmacy retail industry (7.2%) and the finance industry (5.4%). Any adverse change in the financial condition of a tenant with whom we may have a significant credit concentration now or in the future, or any downturn of the economy in any state or industry in which we may have a significant credit concentration now or in the future, could result in a material reduction of our cash flows or material losses to us. Our net leases may require us to pay property-related expenses that are not the obligations of our tenants. Under the terms of the majority of our net leases, in addition to satisfying their rent obligations, our tenants are responsible for the payment or reimbursement of property expenses such as real estate taxes, insurance and ordinary maintenance and repairs. However, under the provisions of certain existing leases and leases that we may enter into in the future with our tenants, we may be required to pay some or all of the expenses of the property, such as the costs of environmental liabilities, roof and structural repairs, real estate taxes, insurance, certain non-structural repairs and maintenance. If our properties incur significant expenses that must be paid by us under the terms of our leases, our business, financial condition and results of operations may be adversely affected and the amount of cash available to meet expenses and to make distributions to our stockholders and unitholders may be reduced. Our properties may be subject to impairment charges. We routinely evaluate our real estate investments for impairment indicators. The judgment regarding the existence of impairment indicators is based on factors such as market conditions and tenant performance. For example, the early termination of, or default under, a lease by a tenant may lead to an impairment charge. Since our investment focus is on properties net leased to a single tenant, the financial failure of, or other default by, a single tenant under its lease may result in a significant impairment loss. If we determine that an impairment has occurred, we would be required to make a downward adjustment to the net carrying value of the property, which could have a material adverse effect on our results of operations in the period in which the impairment charge is recorded. Management has recorded impairment charges related to certain properties in the year ended December 31, 2016, and may record future impairments based on actual results and changes in circumstances. Negative developments in the real estate market may cause management to reevaluate the business and macro-economic assumptions used in its impairment 10 analysis. Changes in management’s assumptions based on actual results may have a material impact on the Company’s financial statements. See “Note 10 – Fair Value Measures” to our consolidated financial statements for a discussion of real estate impairment charges. Our ownership of certain properties and other facilities are subject to ground leases or other similar agreements which limit our uses of these properties and may restrict our ability to sell or otherwise transfer such properties. As of December 31, 2016, we held interests in properties and other facilities through leasehold interests in the land on which the buildings are located and we may acquire additional properties in the future that are subject to ground leases or other similar agreements. As of December 31, 2016, the costs associated with these ground leases represented 2.0% of annualized rental revenue. Many of our ground leases and other similar agreements limit our uses of these properties and may restrict our ability to sell or otherwise transfer such properties without the ground landlord’s consent, which may impair their value. Real estate investments are relatively illiquid and therefore we may not be able to dispose of properties when appropriate or on favorable terms. Real estate investments are, in general, relatively illiquid and may become even more illiquid during periods of economic downturn. As a result, we may not be able to sell our properties quickly or on favorable terms in response to changes in the economy or other conditions when it otherwise may be prudent to do so. In addition, certain significant expenditures generally do not change in response to economic or other conditions, including debt service obligations, real estate taxes, and operating and maintenance costs. This combination of variable revenue and relatively fixed expenditures may result, under certain market conditions, in reduced earnings. Further, as a result of the 100% prohibited transactions tax applicable to REITs, we intend to hold our properties for investment, rather than primarily for sale in the ordinary course of business, which may cause us to forgo or defer sales of properties that otherwise would be favorable. Therefore, we may be unable to adjust our portfolio promptly in response to economic, market or other conditions, which could adversely affect our business, financial condition, liquidity and results of operations. Our investments in properties where the underlying tenant has a below investment grade credit rating, as determined by major credit rating agencies, or has an unrated tenant may have a greater risk of default. As of December 31, 2016, approximately 58.8% of our tenants were not rated or did not have an investment grade credit rating from a major ratings agency or were not affiliates of companies having an investment grade credit rating. Our investments in properties leased to such tenants may have a greater risk of default and bankruptcy than investments in properties leased exclusively to investment grade tenants. When we invest in properties where the tenant does not have a publicly available credit rating, we will use certain credit assessment tools as well as rely on our own estimates of the tenant’s credit rating which includes reviewing the tenant’s financial information (e.g., financial ratios, net worth, revenue, cash flows, leverage and liquidity, if applicable). If our ratings estimates are inaccurate, the default or bankruptcy risk for the subject tenant may be greater than anticipated. If our lender or a credit rating agency disagrees with our ratings estimates, we may not be able to obtain our desired level of leverage or our financing costs may exceed those that we projected. This outcome could have an adverse impact on our returns on that asset and hence our operating results. We may be unable to sell a property if or when we decide to do so, including as a result of uncertain market conditions, which could adversely impact our ability to make cash distributions to our stockholders and unitholders. We expect to hold the various real properties in which we invest until such time as we decide that a sale or other disposition is appropriate given our investment business objectives. We generally intend to hold properties for an extended time, but our management or Board of Directors may exercise their discretion as to whether and when to sell a property to achieve investment objectives. Our ability to dispose of properties on advantageous terms or at all depends on certain factors beyond our control, including competition from other sellers and the availability of attractive financing for potential buyers of our properties. We cannot predict the various market conditions affecting real estate investments which will exist at any particular time in the future. Due to the uncertainty of market conditions which may affect the disposition of our properties, we cannot assure you that we will be able to sell such properties at a profit or at all in the future. Accordingly, the extent to which our stockholders and unitholders will receive cash distributions and realize potential appreciation on our real estate investments will depend upon fluctuating market conditions. Furthermore, we may be required to expend funds to correct defects or to make improvements before a property can be sold. Dividends paid from sources other than our cash flow from operations could affect our profitability, restrict our ability to generate sufficient cash flow from operations, and dilute stockholders’ and unitholders’ interests in us. We may not generate sufficient cash flow from operations to pay dividends and we may in the future pay dividends from sources other than from our cash flow from operations, such as borrowings and/or the sale of assets or the proceeds from offerings of securities. We have not established any limit on the amount of borrowings and/or the sale of assets or the proceeds from an 11 offering of securities that may be used to fund dividends, except that, in accordance with our organizational documents and Maryland law, we may not make dividend distributions that would: (1) cause us to be unable to pay our debts as they become due in the usual course of business; (2) cause our total assets to be less than the sum of our total liabilities plus senior liquidation preferences; or (3) jeopardize our ability to qualify as a REIT. Funding dividends from borrowings could restrict the amount we can borrow for investments, which may affect our profitability. Funding dividends with the sale of assets or the proceeds of offerings of securities may affect our ability to generate cash flows. In addition, funding dividends from the sale of additional securities could dilute your interest in us if we sell shares of our common stock or securities that are convertible or exercisable into shares of our common stock to third party investors. As a result, the return you realize on your investment may be reduced. Payment of dividends from these sources could affect our profitability, restrict our ability to generate sufficient cash flow from operations, and dilute stockholders’ and unitholders’ interests in us, any or all of which may adversely affect your overall return. We could face potential adverse effects from the bankruptcies or insolvencies of tenants or from tenant defaults generally. The bankruptcy or insolvency of our tenants may adversely affect the income produced by our properties. Under bankruptcy law, a tenant cannot be evicted solely because of its bankruptcy and has the option to assume or reject any unexpired lease. If the tenant rejects the lease, any resulting claim we have for breach of the lease (excluding collateral securing the claim) will be treated as a general unsecured claim. Our claim against the bankrupt tenant for unpaid and future rent will be subject to a statutory cap that might be substantially less than the remaining rent actually owed under the lease, and it is unlikely that a bankrupt tenant that rejects its lease would pay in full amounts it owes us under the lease. Even if a lease is assumed and brought current, we still run the risk that a tenant could condition lease assumption on a restructuring of certain terms, including rent, that would have an adverse impact on us. Any shortfall resulting from the bankruptcy of one or more of our tenants could adversely affect our cash flows and results of operations and could cause us to reduce the amount of distributions to our stockholders and unitholders. In addition, the financial failure of, or other default by, one or more of the tenants to whom we have exposure could have an adverse effect on the results of our operations. While we evaluate the creditworthiness of our tenants by reviewing available financial and other pertinent information, there can be no assurance that any tenant will be able to make timely rental payments or avoid defaulting under its lease. If any of our tenants’ businesses experience significant adverse changes, they may fail to make rental payments when due, close a number of stores, exercise early termination rights (to the extent such rights are available to the tenant) or declare bankruptcy. A default by a significant tenant or multiple tenants could cause a material reduction in our revenues and operating cash flows. In addition, if a tenant defaults, we may incur substantial costs in protecting our investment. If a sale-leaseback transaction is re-characterized in a tenant’s bankruptcy proceeding, our financial condition could be adversely affected. We have entered and may continue to enter into sale-leaseback transactions. In a sale-leaseback transaction, we purchase a property and then lease it back to the third party from whom we purchased it. In the event of the bankruptcy of a tenant, a transaction structured as a sale-leaseback might possibly be re-characterized as either a financing or a joint venture, either of which outcomes could adversely affect our financial condition, cash flows and the amount available for distributions to our stockholders and unitholders. If the sale-leaseback were re-characterized as a financing, we would not be considered the owner of the property and, as a result, would have the status of a creditor in relation to the tenant. In that event, we would no longer have the right to sell or encumber our ownership interest in the property. Instead, we would have a claim against the tenant for the amounts owed under the lease, with the claim arguably secured by the property. The tenant/debtor might have the ability to propose a plan restructuring the term, interest rate and amortization schedule of its outstanding balance. If confirmed by the bankruptcy court, we could be bound by the new terms and prevented from foreclosing our lien on the property. If the sale-leaseback were re-characterized as a joint venture, our lessee and we could be treated as co-venturers with regard to the property. As a result, we could be held liable, under some circumstances, for debts incurred by the lessee relating to the property. We have a history of operating losses and cannot assure you that we will achieve profitability. Since our inception in 2010, we have experienced net losses (calculated in accordance with U.S. GAAP) each fiscal year and, as of December 31, 2016, had an accumulated deficit of $4.2 billion. The extent of our future operating losses and the timing of when we will achieve profitability are uncertain, and together depend on the demand for, and value of, our portfolio of properties. We may never achieve or sustain profitability. 12 We may be unable to enter into and consummate property acquisitions on advantageous terms or our property acquisitions may not perform as we expect due to competitive conditions and other factors. We may acquire properties in the future. The acquisition of properties entails various risks, including the risks that our investments may not perform as we expect and that our cost estimates for bringing an acquired property up to market standards may prove inaccurate. Further, we expect to finance any future acquisitions through a combination of borrowings under our unsecured credit facility (the “Credit Facility”), proceeds from equity or debt offerings by the General Partner, the Operating Partnership or their subsidiaries, funds from operations and proceeds from property contributions and dispositions which, if unavailable, could adversely affect our cash flows. In addition, our ability to acquire properties in the future on satisfactory terms and successfully integrate and operate such properties is subject to the following significant risks: • we may be unable to acquire desired properties or the purchase price of a desired property may increase significantly because of competition from other real estate investors, including other real estate operating companies, REITs and investment funds, including the Cole REITs; • we may acquire properties that are not accretive to our results upon acquisition; • we may be unable to obtain the necessary debt or equity financing to consummate an acquisition or, if obtainable, financing may not be on satisfactory terms; • we may need to spend more than budgeted amounts to make necessary improvements or renovations to acquired properties; • agreements for the acquisition of properties are typically subject to customary conditions to closing, including satisfactory completion of due diligence investigations, and we may spend significant time and money on potential acquisitions that we do not consummate; • we may be unable to quickly and efficiently integrate new acquisitions, particularly acquisitions of portfolios of properties, into our existing operations; and • we may acquire properties without any recourse, or with only limited recourse, for liabilities, whether known or unknown, such as cleanup of environmental contamination, remediation of latent defects, claims by tenants, vendors or other persons against the former owners of the properties and claims for indemnification by general partners, directors, officers and others indemnified by the former owners of the properties. Any of the above risks could adversely affect our business, financial condition, liquidity and results of operations. We have assumed, and may in the future assume, liabilities in connection with our property acquisitions, including unknown liabilities. We have assumed existing liabilities, some of which may have been unknown or unquantifiable at the time of the transaction. Unknown liabilities might include liabilities for cleanup or remediation of undisclosed environmental conditions, claims of tenants or other persons dealing with prior owners of the properties, tax liabilities, employment-related issues, and accrued but unpaid liabilities whether incurred in the ordinary course of business or otherwise. If the magnitude of such unknown liabilities is high, either singly or in the aggregate, it could adversely affect our business, financial condition, liquidity and results of operations. We face intense competition, which may decrease or prevent increases in the occupancy and rental rates of our properties. We are subject to competition in the leasing of our properties. We compete with numerous developers, owners and operators of retail, restaurant, industrial and office real estate, many of which have greater financial and other resources than us. Many of our competitors own properties similar to ours in the same markets in which our properties are located. If one of our properties is nearing the end of the lease term or becomes vacant and our competitors (which could include funds sponsored by us) offer space at rental rates below current market rates or below the rental rates we currently charge our tenants, we may lose existing or potential tenants and we may be pressured to reduce our rental rates below those we currently charge or to offer substantial rent concessions in order to retain tenants when such tenants’ lease expire or attract new tenants. In addition, if our competitors sell assets similar to assets we intend to divest in the same markets and/or at valuations below our valuations for comparable assets, we may be unable to divest our assets at all or at favorable pricing or on favorable terms. As a result of these actions by our competitors, our business, financial condition, liquidity and results of operations may be adversely affected. The value of our real estate investments is subject to risks associated with our real estate assets and with the real estate industry. Our real estate investments are subject to various risks, fluctuations and cycles in value and demand, many of which are beyond our control. Certain events may decrease our cash available for distribution to our stockholders and unitholders, as well as the value of our properties. These events include, but are not limited to: • adverse changes in international, national or local economic and demographic conditions; 13 • • • • • • • • • • vacancies or our inability to lease space on favorable terms, including possible market pressures to offer tenants rent abatements, tenant improvements, early termination rights or tenant-favorable renewal options; adverse changes in financial conditions of buyers, sellers and tenants of properties; inability to collect rent from tenants, or other failures by tenants to perform the obligations under their leases; competition from other real estate investors, including other real estate operating companies, REITs and institutional investment funds; reductions in the level of demand for commercial space generally, and freestanding net leased properties specifically, and changes in the relative popularity of our properties; increases in the supply of freestanding single-tenant properties; fluctuations in interest rates, which could adversely affect our ability, or the ability of buyers and tenants of our properties, to obtain financing on favorable terms or at all; increases in expenses, including, but not limited to, insurance costs, labor costs, energy prices, real estate assessments and other taxes and costs of compliance with laws, regulations and governmental policies, all of which have an adverse impact on the rent a tenant may be willing to pay us in order to lease one or more of our properties; civil unrest, acts of God, including earthquakes, floods, hurricanes and other natural disasters, including extreme weather events from possible future climate change, which may result in uninsured losses, and acts of war or terrorism; and changes in, and changes in enforcement of, laws, regulations and governmental policies, including, without limitation, health, safety, environmental, zoning and tax laws, governmental fiscal policies and the ADA. Any or all of these factors could materially adversely affect our results of operations through decreased revenues or increased costs. Uninsured losses or losses in excess of our insurance coverage could materially adversely affect our financial condition and cash flows, and there can be no assurance as to future costs and the scope of coverage that may be available under insurance policies. We carry comprehensive liability, fire, extended coverage, and rental loss insurance covering all of the properties in our portfolio under one or more blanket insurance policies with policy specifications, limits and deductibles customarily carried for similar properties. In addition, we carry professional liability and directors’ and officers’ insurance, and cyber liability insurance. We select policy specifications and insured limits that we believe are appropriate and adequate given the relative risk of loss, insurance coverages provided by tenants, the cost of the coverage and industry practice. There can be no assurance, however, that the insured limits on any particular policy will adequately cover an insured loss if one occurs. If any such loss is insured, we may be required to pay a significant deductible on any claim for recovery of such a loss prior to our insurer being obligated to reimburse us for the loss, or the amount of the loss may exceed our coverage for the loss. In addition, we may reduce or discontinue terrorism, earthquake, flood or other insurance on some or all of our properties in the future if the cost of premiums for any of these policies exceeds, in our judgment, the value of the coverage discounted for the risk of loss. Our title insurance policies may not insure for the current aggregate market value of our portfolio, and we do not intend to increase our title insurance coverage as the market value of our portfolio increases. Further, we do not carry insurance for certain losses, including, but not limited to, losses caused by riots or war. Certain types of losses may be either uninsurable or not economically insurable, such as losses due to earthquakes, riots or acts of war. If we experience a loss that is uninsured or which exceeds policy limits, we could lose the capital invested in the damaged properties as well as the anticipated future cash flows from those properties. In addition, if the damaged properties are subject to recourse indebtedness, we would continue to be liable for the indebtedness, even if these properties were irreparably damaged. In addition, we carry several different lines of insurance, placed with several large insurance carriers. If any one of these large insurance carriers were to become insolvent, we would be forced to replace the existing insurance coverage with another suitable carrier, and any outstanding claims would be at risk for collection. In such an event, we cannot be certain that we would be able to replace the coverage at similar or otherwise favorable terms. As a result of any of the situations described above, our financial condition and cash flows may be materially and adversely affected. Our participation in joint ventures creates additional risks as compared to direct real estate investments, and the actions of our joint venture partners could adversely affect our operations or performance. We have in the past participated, and may in the future participate, in transactions structured to purchase assets jointly with unaffiliated third parties or the Cole REITs (a “joint venture”). There are additional risks involved in joint venture transactions. As a co-investor in a joint venture, we may not be in a position to exercise sole decision-making authority relating to the property, joint venture, or other entity. In addition, there is the potential of the third-party participant in the joint venture becoming bankrupt and the possibility of diverging or inconsistent economic or business interests of us and that participant. These diverging interests 14 could result in, among other things, exposure to liabilities of the joint venture in excess of our proportionate share of these liabilities. The competing rights of each owner in a jointly-owned property could effect a reduction in the value of each owner’s interest in the subject property. If we are unable to maintain effective disclosure controls and procedures and effective internal control over financial reporting, investor confidence and our stock price could be adversely affected. Our management is responsible for establishing and maintaining effective disclosure controls and procedures and internal control over financial reporting. There were no changes to our internal control over financial reporting that occurred during the year ended December 31, 2016 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting, however, there can be no guarantee as to the effectiveness of our disclosure controls and procedures and we cannot assure you that our internal control over financial reporting will not be subject to material weaknesses in the future. If we fail to maintain the adequacy of our internal controls over financial reporting and our operating internal controls, including any failure to implement required new or improved controls as a result of changes to our business or otherwise, or if we experience difficulties in their implementation, our business, results of operations and financial condition could be adversely affected and we could fail to meet our reporting obligations. Government investigations relating to the findings of the Audit Committee Investigation may require time and attention from certain members of management, result in significant legal expenses, fines, and/or penalties, including indemnification obligations, and cause our business, financial condition, liquidity and results of operations to suffer. On November 13, 2014, we received the first of two subpoenas relating to the findings of the Audit Committee Investigation from the staff of the SEC, each of which called for the production of certain documents. On December 19, 2014, we received a subpoena from the Securities Division of the Office of the Secretary of the Commonwealth of Massachusetts. The U.S. Attorney’s Office for the Southern District of New York also contacted counsel for the Company and counsel for the Audit Committee. We and the Audit Committee are cooperating with these regulators in their investigations. The amount of time needed to resolve these investigations is uncertain, and we cannot predict the outcome of these investigations or whether we will face additional government investigations, inquiries or other actions related to these matters. Subject to certain limitations, we are obligated to indemnify our current and former directors, officers and employees, among others in connection with the ongoing government investigations and potential future government inquiries, investigations or actions. These matters could require us to expend management time and could result in civil and criminal actions seeking, among other things, injunctions against us and the payment of significant fines and/or penalties, as well as requiring payment of substantial legal fees and indemnification obligations, and cause our business, financial condition, liquidity and results of operations to suffer. We can provide no assurance as to the outcome of any government investigation. The Company and certain of our former officers and former and current directors, among others, have been named as defendants in various lawsuits related to the findings of the Audit Committee Investigation and those lawsuits may require time and attention from certain members of management, result in significant legal expenses and/or damages, including indemnification obligations, and may materially impact our business, financial condition, liquidity and results of operations. Since the October 29, 2014 announcement of the findings of the Audit Committee Investigation and the subsequent restatement of the Company’s financial statements in March 2015, the Company and its former officers and current and former directors (along with others) have been named as defendants in multiple putative securities class action complaints in the United States District Court for the Southern District of New York, which were subsequently consolidated under the caption In re American Realty Capital Properties, Inc. Litigation, 1:15-mc-00040-AKH, multiple individual securities lawsuits and multiple derivative lawsuits. See “Note 15 – Commitments and Contingencies” to our consolidated financial statements for additional details regarding pending litigation matters related to the Audit Committee Investigation. As a result of the various pending litigations, and subject to certain limitations, we are obligated to advance certain legal expenses to and indemnify our current and former directors, officers and employees, as well as certain outside individuals and entities. In addition, any of these lawsuits may require management time and attention, result in significant legal expenses, indemnification obligations and/or damages, which may not be covered by insurance, and may materially impact the Company’s business, financial condition, liquidity and results of operations. Our accounting policies and methods are fundamental to how we record and report our financial position and results of operations, and they require management to make estimates, judgments, and assumptions about matters that are inherently uncertain. Our accounting policies and methods are fundamental to how we record and report our financial position and results of operations. We have identified several accounting policies as being critical to the presentation of our financial position and results of operations because they require management to make particularly subjective or complex judgments about matters that are 15 inherently uncertain and because of the likelihood that materially different amounts would be recorded under different conditions or using different assumptions. Because of the inherent uncertainty of the estimates, judgments, and assumptions associated with these critical accounting policies, we cannot provide any assurance that we will not make subsequent significant adjustments to our consolidated financial statements. If our judgments, assumptions, and allocations prove to be incorrect, or if circumstances change, our business, financial condition, liquidity and results of operations could be adversely affected. Changes in U.S. accounting standards regarding operating leases may make the leasing of our properties less attractive to our potential tenants, which could reduce overall demand for our leasing services. Under current authoritative accounting guidance for leases, a lease is classified by a tenant as a capital lease if the significant risks and rewards of ownership are considered to reside with the tenant. Under capital lease accounting for a tenant, both the leased asset and liability are reflected on its balance sheet. If the lease does not meet the criteria for a capital lease, the lease is to be considered an operating lease by the tenant, and the obligation does not appear on the tenant’s balance sheet; rather, the contractual future minimum payment obligations are only disclosed in the footnotes thereto. Thus, entering into an operating lease can appear to enhance a tenant’s balance sheet in comparison to direct ownership. The Financial Accounting Standards Board (the “FASB”) and the International Accounting Standards Board (the “IASB”) conducted a joint project to re-evaluate lease accounting. In February 2016, the FASB issued Accounting Standards Update, (“ASU”) 2016-02, Leases (“ASU 2016-02”) which will require that a lessee recognize assets and liabilities on the balance sheet for all leases with a lease term of more than 12 months, with the result being the recognition of a right of use asset and a lease liability and the disclosure of key information about the entity's leasing arrangements. These and other potential changes to the accounting guidance could affect both our accounting for leases as well as that of our current and potential tenants. These changes may affect how our real estate leasing business is conducted. For example, with the ASU 2016-02 revision, companies may be less willing to enter into leases in general or desire to enter into leases with shorter terms because the apparent benefits to their balance sheets under current practice could be reduced or eliminated. This impact in turn could make it more difficult for us to enter into leases on terms we find favorable. The amendments in ASU 2016-02 are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating the impact ASU 2016-02 will have on its consolidated financial statements. We may not be able to maintain our competitive advantages if we are not able to attract and retain key personnel. Our success depends to a significant extent on our ability to attract and retain key members of our executive team and staff. Our future success depends in part on the continued service of our senior management team. If there are changes in senior leadership, such changes could be disruptive and could compromise our ability to execute our strategic plan. While we have entered into employment agreements with certain key personnel, there can be no assurance that we will be able to retain the services of individuals whose knowledge and skills are important to our businesses. Our success also depends on our ability to prospectively attract, integrate, train and retain qualified management personnel. Because the competition for qualified personnel is intense, costs related to compensation and retention could increase significantly in the future. If we were to lose a sufficient number of our key employees and were unable to replace them in a reasonable period of time, these losses could damage our business and adversely affect our results of operations. Cybersecurity risks and cyber incidents may adversely affect our business by causing a disruption to our operations, a compromise or corruption of our confidential information, and/or damage to our business relationships, all of which could negatively impact our financial results. A cyber incident is considered to be any adverse event that threatens the confidentiality, integrity or availability of our information resources. These incidents may be an intentional attack or an unintentional event and could involve gaining unauthorized access to our information systems for purposes of misappropriating assets, stealing confidential information, corrupting data or causing operational disruption. The result of these incidents may include disrupted operations, misstated or unreliable financial data, liability for stolen assets or information, increased cybersecurity protection and insurance costs, litigation and damage to our tenant and investor relationships. As our reliance on technology has increased, so have the risks posed to our information systems, both internal and those we have outsourced. We have implemented processes, procedures and internal controls to help mitigate cybersecurity risks and cyber intrusions, but these measures, as well as our increased awareness of the nature and extent of a risk of a cyber incident, do not guarantee that our financial results, operations, business relationships or confidential information will not be negatively impacted by such an incident. We may acquire properties or portfolios of properties through tax deferred contribution transactions, which could result in the dilution of our stockholders and unitholders, and limit our ability to sell or refinance such assets. We have in the past and may in the future acquire properties or portfolios of properties through tax deferred contribution transactions in exchange for OP Units. Under the limited partnership agreement of the OP, as amended (the “LPA”), after holding the OP Units for a period of one year, unless otherwise consented to by the General Partner, holders of OP Units have a right to redeem the OP Units for the cash value of a corresponding number of shares of the General Partner’s common stock or, at the 16 option of the General Partner, a corresponding number of shares of the General Partner’s common stock. This could result in the dilution of our stockholders and unitholders through the issuance of OP Units that may be exchanged for shares of our common stock. This acquisition structure may also have the effect of, among other things, reducing the amount of tax depreciation we could deduct over the tax life of the acquired properties, and may require that we agree to restrictions on our ability to dispose of, or refinance the debt on, the acquired properties in order to protect the contributors’ ability to defer recognition of taxable gain. Similarly, we may be required to incur or maintain debt we would otherwise not incur so we can allocate the debt to the contributors to maintain their tax bases. These restrictions could limit our ability to sell or refinance an asset at a time, or on terms, that would be favorable absent such restrictions. Risks Related to Financing We intend to rely on external sources of capital to fund future capital needs, and if we encounter difficulty in obtaining such capital, we may not be able to meet maturing obligations or make any additional investments. In order to qualify as a REIT under the Internal Revenue Code, we are required, among other things, to distribute annually to our stockholders at least 90% of our REIT taxable income (which does not equal net income as calculated in accordance with U.S. GAAP), determined without regard to the deduction for dividends paid and excluding any net capital gain. Because of this dividend requirement, we may not be able to fund from cash retained from operations all of our future capital needs, including capital needed to refinance maturing obligations or make investments. Market volatility and disruption could hinder our ability to obtain new debt financing or refinance our maturing debt on favorable terms or at all or to raise debt and equity capital. Our access to capital will depend upon a number of factors, including: • • • • • • • • • • general market conditions; the market’s perception of our future growth potential; the extent of investor interest; analyst reports about us and the REIT industry; the general reputation of REITs and the attractiveness of their equity securities in comparison to other equity securities, including securities issued by other real estate-based companies; our financial performance and that of our tenants; our current debt levels; our current and expected future earnings; our cash flow and cash dividends, including our ability to satisfy the dividend requirements applicable to REITs; and the market price per share of our common stock. If we are unable to obtain needed capital on satisfactory terms or at all, we may not be able to meet our obligations and commitments as they mature or make any additional investments. We have substantial amounts of indebtedness outstanding, which may affect our ability to pay dividends, and may expose us to interest rate fluctuation risk and to the risk of default under our debt obligations. As of December 31, 2016, our aggregate indebtedness was $6.4 billion. We may incur significant additional debt in the future, including borrowings under our Credit Facility, for various purposes including, without limitation, the funding of future acquisitions, if any, capital improvements and leasing commissions in connection with the repositioning of a property and litigation expenses. At December 31, 2016, we had $2.3 billion of undrawn commitments under our Credit Facility. Our substantial outstanding indebtedness, and the limitations imposed on us by our debt agreements, could have significant adverse consequences, including as follows: • our cash flow may be insufficient to meet our required principal and interest payments; • we may be unable to borrow additional funds as needed or on satisfactory terms to fund future working capital, capital expenditures and other general corporate requirements, which could, among other things, adversely affect our ability to capitalize upon any acquisition opportunities or fund capital improvements and leasing commissions; • we may be unable to refinance our indebtedness at maturity or the refinancing terms may be less favorable than the terms of our original indebtedness; • payments of principal and interest on borrowings may leave us with insufficient cash resources to make the dividend payments necessary to maintain our REIT qualification or may otherwise impose restrictions on our ability to make distributions; • we may be forced to dispose of one or more of our properties, possibly on disadvantageous terms; 17 • we may violate restrictive covenants in our loan documents, which would entitle the lenders to accelerate our debt obligations; • certain of the property subsidiaries’ loan documents may include restrictions on such subsidiary’s ability to make dividends to us; • we may be unable to hedge floating-rate debt, counterparties may fail to honor their obligations under our hedge agreements, these agreements may not effectively hedge interest rate fluctuation risk, and, upon the expiration of any hedge agreements, we would be exposed to then-existing market rates of interest and future interest rate volatility; • we may default on our obligations and the lenders or mortgagees may foreclose on our properties that secure their loans and exercise their rights under any assignment of rents and leases; • we may be vulnerable to general adverse economic and industry conditions; and • we may be at a disadvantage compared to our competitors with less indebtedness. If we default under a loan or indenture (including any default in respect of the financial maintenance and negative covenants contained in the Credit Agreement, or the indenture governing the Senior Notes, we may automatically be in default under any other loan or indenture that has cross-default provisions (including the credit agreement (the “Credit Agreement”)), dated June 30, 2014, as amended, with Wells Fargo Bank National Association, as administrative agent, and other lender parties thereto, governing the Credit Facility), and (x) further borrowings under the Credit Facility will be prohibited, and outstanding indebtedness under the Credit Facility, and our indenture (including the indenture governing the Senior Notes) or such other loans may be accelerated and (y) to the extent any such debt is secured, directly or indirectly, by any properties or assets, the lenders may foreclose on the properties or assets securing such indebtedness. In addition, increases in interest rates may impede our operating performance and payments of required debt service obligations or amounts due at maturity, or creation of additional reserves under loan agreements or indentures, could adversely affect our financial condition and operating results. Further, any foreclosure on our properties could create taxable income without accompanying cash proceeds, which could adversely affect our ability to meet the REIT dividend requirements imposed by the Internal Revenue Code. The indenture governing our Senior Notes and the Credit Agreement contain restrictive covenants that limit our operating flexibility. The indenture governing our Senior Notes and the Credit Agreement require us to meet customary negative covenants and other financial and operating covenants. The indenture governing our Senior Notes requires us to maintain financial ratios for total leverage, secured debt, debt service coverage and total unencumbered assets. In addition, the Credit Agreement requires us, among other things, to maintain a minimum tangible net worth, a maximum leverage ratio, a minimum fixed charge coverage ratio, a secured leverage ratio, a total unencumbered asset value ratio, a minimum encumbered interest coverage ratio and a minimum encumbered asset value. These covenants restrict our ability to incur secured or unsecured indebtedness and may also restrict our ability to engage in certain business activities. Our ability to comply with these and other provisions of the indenture governing our Senior Notes and the Credit Agreement may be affected by changes in our operating and financial performance, changes in general business and economic conditions, adverse regulatory developments or other events adversely impacting us. Any failure to comply with these covenants would constitute a default under the indenture governing our Senior Notes and/or the Credit Agreement, as applicable, and would prevent further borrowings under the Credit Agreement and could cause those and other obligations to become due and payable. If any of our indebtedness is accelerated, we may not be able to repay it. Our organizational documents have no limitation on the amount of indebtedness that we may incur. As a result, we may become more highly leveraged in the future, which could adversely affect our financial condition. Our business strategy contemplates the use of both secured and unsecured debt to finance long-term growth. While we intend to limit our indebtedness to maintain an overall net debt to gross real estate investment ratio of approximately 45% to 55% (provided that we may exceed this amount for individual properties in select cases where attractive financing is available), our organizational documents contain no limitations on the amount of debt that we may incur. Further, our financing decisions and related decisions regarding levels of debt may be determined by our Board of Directors in its discretion without stockholder approval. As a result, we may be able to incur substantial additional debt, including secured debt, in the future, subject to us meeting the financial and operating covenants described above, which could result in us becoming more highly leveraged and adversely affecting our financial condition. 18 Increases in interest rates would increase our debt service obligations and may adversely affect the refinancing of our existing debt and our ability to incur additional debt, which could adversely affect our financial condition. Certain of our borrowings bear interest at variable rates, and we may incur additional variable-rate debt in the future. Increases in interest rates would result in higher interest expenses on our existing unhedged variable rate debt, and increase the costs of refinancing existing debt or incurring new debt. Additionally, increases in interest rates may result in a decrease in the value of our real estate and decrease the market price of our capital stock and could accordingly adversely affect our financial condition. We may not be able to generate sufficient cash flow to meet our debt service obligations. Our ability to make payments on and to refinance our indebtedness, and to fund our operations, working capital and capital expenditures, depends on our ability to generate cash. To a certain extent, our cash flow is subject to general economic, industry, financial, competitive, operating, legislative, regulatory and other factors, many of which are beyond our control. We cannot assure you that our business will generate sufficient cash flow from operations or that future sources of cash will be available to us in an amount sufficient to enable us to pay amounts due on our indebtedness or to fund our other liquidity needs. Additionally, if we incur additional indebtedness in connection with any future acquisitions or development projects or for any other purpose, our debt service obligations could increase. We may need to refinance all or a portion of our indebtedness before maturity. Our ability to refinance our indebtedness or obtain additional financing will depend on, among other things: • • • • • our financial condition and market conditions at the time; restrictions in the agreements governing our indebtedness; general economic and capital market conditions; the availability of credit from banks or other lenders; investor confidence in us; and our results of operations. • As a result, we may not be able to refinance our indebtedness on commercially reasonable terms, or at all. If we do not generate sufficient cash flow from operations, and additional borrowings or refinancings or proceeds of asset sales or other sources of cash are not available to us, we may not have sufficient cash to enable us to meet all of our obligations. Accordingly, if we cannot service our indebtedness, we may have to take actions such as seeking additional equity, or delaying any strategic acquisitions and alliances or capital expenditures, any of which could have a material adverse effect on our operations. Adverse changes in our credit ratings could affect our borrowing capacity and borrowing terms. Our Senior Notes are periodically rated by nationally recognized credit rating agencies. Our current corporate credit rating is “BB+” and our issue-level rating for our Senior Notes is “BBB-” with a “positive” outlook from Standard & Poor’s Rating Services. Our corporate credit and issue-level ratings for our Senior Notes are “Ba1” with a “positive” outlook assigned by Moody’s Investor Service, Inc. Both agencies have upgraded our ratings in comparison to the prior year, however, there can be no assurance that our ratings will not fluctuate. Fitch Ratings, Inc. has also assigned to us a first time investment grade rating of “BBB-” with a “stable” outlook. The credit ratings are based on our operating performance, liquidity and leverage ratios, overall financial position, and other factors viewed by the credit rating agencies as relevant to our industry and the economic outlook in general. Our credit ratings can adversely affect the cost and availability of capital, as well as the terms of any financing we obtain. Since we depend in part on debt financing to fund our business, an adverse change in our credit ratings could have a material adverse effect on our financial condition, liquidity, results of operations and the trading price of our Senior Notes. Risks Related to Equity The Board of Directors may create and issue a class or series of common or preferred stock without stockholder approval. Subject to applicable legal and regulatory requirements, the Board of Directors is empowered under our charter to amend our charter from time to time to increase or decrease the aggregate number of shares of our stock or the number of shares of stock of any class or series that we have authority to issue, to designate and issue from time to time one or more classes or series of stock and to classify or reclassify any unissued shares of our common stock or preferred stock without stockholder approval. The Board of Directors may determine the relative preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications or terms or conditions of redemption of any class or series of stock issued. As a result, we may issue series or classes of stock with voting rights, rights to dividends or other rights, senior to the rights of holders of our outstanding capital stock. The issuance of any such stock could also have the effect of delaying or preventing a change of control transaction that might otherwise be in the best interests of our stockholders. In addition, future sales of shares of our common stock or preferred stock may be dilutive to existing stockholders. 19 The trading price of our common stock has been and may continue to be subject to wide fluctuations. The sales price of our common stock on the NYSE has fluctuated in recent quarters. Our stock price may fluctuate in response to a number of events and factors, including as a result of future offerings of our securities, as a result of the events described in this “Risk Factors” section or in our future filings with the SEC, and as a result of changes to our dividend yield relative to yields on other financial instruments (e.g., increases in interest rates resulting in higher yields on other financial instruments may adversely affect the sales price of our common stock). In addition, the trading volume and price of our common stock may fluctuate and be adversely impacted in response to a number of factors, including: • • • • • • • • • • • • • • • • actual or anticipated variations in our operating results, earnings, or liquidity, or those of our competitors; changes in our dividend policy; publication of research reports about us, our competitors, our tenants, or the REIT industry; changes in market valuations of companies similar to us; speculation in the press or investment community; our failure to meet, or changes to, our earnings estimates, or those of any securities analysts; increases in market interest rates; adverse market reaction to the amount of or the maturity of our debt and our ability to refinance such debt and the terms thereof; adverse market reaction to any additional indebtedness we incur or equity or securities we may issue; changes in our credit ratings; actual or perceived conflicts of interest; changes in our key management; the financial condition, liquidity, results of operations, and prospects of our tenants; resolution of pending litigation and government investigations; failure to maintain our REIT qualification; and general market and economic conditions, including the current state of the credit and capital markets. The issuance of additional equity securities may dilute existing equity holders. Giving effect to the issuance of common stock in future potential offerings, the receipt of future potential net proceeds and the use of those proceeds, additional equity offerings may have a dilutive effect on our expected earnings per share. Additionally, we are not restricted from issuing additional shares of our common stock or preferred stock, including any securities that are convertible into or exchangeable for, or that represent the right to receive, common stock or preferred stock or any substantially similar securities in the future. The market price of our common stock could decline as a result of sales of a large number of shares of our common stock in the market or the perception that such sales could occur. Future offerings of debt, which would be senior to our common stock upon liquidation, or preferred equity securities that may be senior to our common stock for purposes of dividend distributions or upon liquidation, may adversely affect the market price of our common stock. In the future, we may issue debt or preferred equity securities. Upon liquidation, holders of our debt securities and shares of preferred stock and lenders with respect to other borrowings will receive distributions of our available assets prior to the holders of our common stock. Additional equity offerings, including offerings of convertible preferred stock, may dilute the holdings of our existing stockholders or otherwise reduce the market price of our common stock, or both. Holders of our common stock are not entitled to preemptive rights or other protections against dilution. Preferred stock, if issued, could have a preference on liquidating distributions or a preference on distribution payments that could limit our ability to make distributions to holders of our common stock. Because our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future offerings. Thus, our stockholders bear the risk of our future offerings reducing the market price of our common stock and diluting their stock holdings in us. The change of control conversion feature of the Series F Preferred Stock may make it more difficult for a party to take over the Company or discourage a party from taking over the Company. Upon the occurrence of a change of control (as defined in the Articles Supplementary for the Series F Preferred Stock) the result of which is that our common stock or the common securities of the acquiring or surviving entity are not listed on a national stock exchange, holders of the Series F Preferred Stock will have the right (unless, prior to the change of control conversion date, we have provided or provide notice of our election to redeem the Series F Preferred Stock) to convert some or all of their Series 20 F Preferred Stock into shares of our common stock (or equivalent value of alternative consideration). The change of control conversion feature of the Series F Preferred Stock may have the effect of discouraging a third party from making an acquisition proposal for the Company or of delaying, deferring or preventing certain change of control transactions of the Company under circumstances that stockholders may otherwise believe are in their best interests. Risks Relating to our REI Segment Because we own real property, we are subject to extensive environmental regulation, which creates uncertainty regarding future environmental expenditures and liabilities. Environmental laws regulate, and impose liability for, releases of hazardous or toxic substances into the environment. Under various provisions of these laws, an owner or operator of real estate, such as us, is or may be liable for costs related to soil or groundwater contamination on, in, or migrating to or from its property. In addition, persons who arrange for the disposal or treatment of hazardous or toxic substances may be liable for the costs of cleaning up contamination at the disposal site. Such laws often impose liability regardless of whether the person knew of, or was responsible for, the presence of the hazardous or toxic substances that caused the contamination. The presence of, or contamination resulting from, any of these substances, or the failure to properly remediate them, may adversely affect our ability to sell or lease our property or to borrow using such property as collateral. In addition, persons exposed to hazardous or toxic substances may sue us for personal injury damages. As a result, in connection with our current or former ownership, operation, management and development of real properties, we may be potentially liable for investigation and cleanup costs, penalties, and damages under environmental laws. Although our properties are generally subjected to preliminary environmental assessments, known as Phase I assessments, by independent environmental consultants that identify certain liabilities, Phase I assessments are limited in scope, and may not include or identify all potential environmental liabilities or risks associated with the property. Further, any environmental liabilities that arose since the date the studies were done would not be identified in the assessments. Unless required by applicable laws or regulations, we may not further investigate, remedy or ameliorate the liabilities disclosed in the Phase I assessments. We cannot assure you that these or other environmental studies identified all potential environmental liabilities, or that we will not incur material environmental liabilities in the future. If we do incur material environmental liabilities in the future, we may face significant remediation costs, and we may find it difficult to finance or sell any affected properties. We are subject to risks relating to mortgage, bridge or mezzanine loans. Investing in mortgage, bridge or mezzanine loans involves risk of defaults on those loans caused by many conditions beyond our control, including local and other economic conditions affecting real estate values and interest rate levels. If there are defaults under these loans, we may not be able to repossess and sell quickly any properties securing such loans. An action to foreclose on a property securing a loan is regulated by state statutes and regulations and is subject to many of the delays and expenses of any lawsuit brought in connection with the foreclosure if the defendant raises defenses or counterclaims. In the event of default by a mortgagor, these restrictions, among other things, may impede our ability to foreclose on or sell the mortgaged property or to obtain proceeds sufficient to repay all amounts due to us on the loan, which could reduce the value of our investment in the defaulted loan. We are subject to risks relating to real estate-related securities, including commercial mortgage backed securities (“CMBS”). Real estate-related securities are often unsecured and also may be subordinated to other obligations of the issuer. As a result, investments in real estate-related securities may be subject to risks of (1) limited liquidity in the secondary trading market in the case of unlisted or thinly traded securities, (2) substantial market price volatility resulting from changes in prevailing interest rates in the case of traded equity securities, (3) subordination to the prior claims of banks and other senior lenders to the issuer, (4) the operation of mandatory sinking fund or call/redemption provisions during periods of declining interest rates that could cause the issuer to reinvest redemption proceeds in lower yielding assets, (5) the possibility that earnings of the issuer or that income from collateral may be insufficient to meet debt service and distribution obligations and (6) the declining creditworthiness and potential for insolvency of the issuer during periods of rising interest rates and economic slowdown or downturn. These risks may adversely affect the value of outstanding real estate-related securities and the ability of the obliged parties to repay principal and interest or make distribution payments. CMBS are securities that evidence interests in, or are secured by, a single commercial mortgage loan or a pool of commercial mortgage loans. Accordingly, these securities are subject to the risks listed above and all of the risks of the underlying mortgage loans. CMBS are issued by investment banks and non-regulated financial institutions, and are not insured or guaranteed by the U.S. government. The value of CMBS may change due to shifts in the market’s perception of issuers and regulatory or tax changes adversely affecting the mortgage securities market as a whole and may be negatively impacted by any dislocation in the mortgage- backed securities market in general. 21 CMBS are also subject to several risks created through the securitization process. Subordinate CMBS are paid interest only to the extent that there are funds available to make payments. To the extent the collateral pool includes delinquent loans, there is a risk that interest payments on subordinate CMBS will not be fully paid. Subordinate CMBS are also subject to greater credit risk than those CMBS that are more highly rated. In certain instances, third-party guarantees or other forms of credit support can reduce the credit risk. Our build-to-suit program is subject to additional risks related to properties under development. We engage in build-to-suit programs and the acquisition of properties under development. In connection with these businesses, we enter into purchase and sale arrangements with sellers or developers of suitable properties under development or construction. In such cases, we are generally obligated to purchase the property at the completion of construction, provided that the construction conforms to definitive plans, specifications, and costs approved by us in advance. We may also engage in development and construction activities involving existing properties, including the expansion of existing facilities (typically at the request of a tenant) or the development or build-out of vacant space at retail properties. We may advance significant amounts in connection with certain development projects. As a result, we are subject to potential development risks and construction delays and the resultant increased costs and risks, as well as the risk of loss of certain amounts that we have advanced should a development project not be completed. To the extent that we engage in development or construction projects, we may be subject to uncertainties associated with obtaining permits or re-zoning for development, environmental and land use concerns of governmental entities and/or community groups, and the builder’s ability to build in conformity with plans, specifications, budgeted costs and timetables. If a developer or builder fails to perform, we may terminate the purchase, modify the construction contract or resort to legal action to compel performance (or in certain cases, we may elect to take over the project and pursue completion of the project ourselves). A developer’s or builder’s performance may also be affected or delayed by conditions beyond that party’s control. Delays in obtaining permits or completion of construction could also give tenants the right to terminate preconstruction leases. We may incur additional risks if we make periodic progress payments or other advances to builders before they complete construction. These and other such factors can result in increased project costs or the loss of our investment. Although we rarely engage in construction activities relating to space that is not already leased to one or more tenants, to the extent that we do so, we may be subject to normal lease-up risks relating to newly constructed projects. We also will rely on rental income and expense projections and estimates of the fair market value of property upon completion of construction when agreeing upon a price at the time we acquire the property. If these projections are inaccurate, we may pay too much for a property and our return on our investment could suffer. If we contract with a development company for a newly developed property, there is a risk that money advanced to that development company for the project may not be fully recoverable if the developer fails to successfully complete the project. Risks Relating to our Cole Capital Segment We may be unable to fully restore the distribution network which previously supported Cole Capital and the Cole REITs and/ or regain the prior capital raising level of Cole Capital, which may adversely affect the financial success of Cole Capital and the Company. Three of the five Cole REITs currently sponsored and managed by Cole Capital have ongoing public offerings. Following the announcement made by the Company on October 29, 2014 that certain of its financial statements could no longer be relied upon, various broker-dealers and clearing firms participating in offerings of the Cole REITs suspended sales activity with Cole Capital, resulting in a significant decrease in capital raising activity and, consequently, a decline in the overall revenue generated by Cole Capital. In addition, non-listed REIT sales have decreased industry wide since December 31, 2015. As discussed below, financial service firms are subject to and may be adversely affected by extensive regulations and requirements by agencies, which not only impact our business, but the industry as a whole. Cole Capital generates revenue from capital raising activity and asset management and advisory activity, the latter of which is also contingent upon successful capital raising activity as each of the Cole REITs is a blind pool whose portfolio is largely built through the deployment of proceeds raised in the respective Cole REIT’s public offering. Revenue generated from Cole Capital’s capital raising activity is received in the form of dealer manager fees, which are earned at the point of sale of the Cole REITs’ common stock and, therefore, a reduction in capital raising activity directly results in a reduction in such dealer manager fees. Cole Capital receives additional compensation, including one-time acquisition fees and ongoing advisory fees from its asset management and advisory activity. Acquisition fees are earned, in large part, when Cole Capital deploys capital raised from a Cole REIT’s public offering into real estate acquisitions on behalf of such Cole REIT. Cole Capital also receives advisory fees that are calculated based, in whole or in part, upon the value of each Cole REIT’s total invested assets. An increase in assets under 22 management, which generally occurs as the Cole REITs raise more capital, typically results in increased advisory fees. Therefore, a slowdown in capital raising activity could delay or reduce Cole Capital’s receipt of those additional fees. Additional fees may be earned by Cole Capital following the completion of a Cole REIT’s public offering and deployment of capital therefrom. A description of Cole Capital’s fees is contained in “Note 18 – Related Party Transactions and Arrangements” to our consolidated financial statements. While certain of the broker-dealers and the clearing firms have reengaged with Cole Capital following their suspensions, there can be no assurance that the remaining broker-dealers will reengage with Cole Capital on a timely basis or at all. If these circumstances continue for a prolonged period of time, capital raising activity at Cole Capital may continue to be negatively affected, reducing overall fee generation at Cole Capital and, therefore, the overall financial success of Cole Capital and the Company could be adversely affected. In addition, there is no guarantee as to the Cole Capital segment’s actual results. The fair value of goodwill and intangible assets allocated to the Cole Capital segment are dependent upon projected results, including, but not limited to, the timing and aggregate amount of capital raised and deployed on behalf of the Cole REITs, which is influenced by the Company’s ability to reinstate certain selling agreements that were suspended as a result of the Audit Committee Investigation. If the Company is unable to reinstate certain selling agreements with broker-dealers and clearing firms on a timely basis, the fair value of goodwill and intangible assets allocated to the Cole Capital segment may be less than the respective carrying value, resulting in an impairment that could have a material adverse effect on the Company’s financial results. During the quarter ended December 31, 2016, we recorded significant impairment charges in respect of goodwill and intangible assets allocated to the Cole Capital segment. We reassessed the expected collectability of the program development costs, based on assumptions used to calculate these impairments, and recorded additional reserves in the quarter ended December 31, 2016. Additional charges and/or reserves may be recorded in subsequent periods if actual proceeds raised from the offerings and corresponding program development costs incurred differ from management’s assumptions used at December 31, 2016. Cole Capital is subject to risks that are particular to its role as sponsor and dealer manager for direct investment program offerings. Cole Capital, including Cole Capital Corporation, which is Cole Capital’s broker-dealer subsidiary and a wholesale broker- dealer registered with the SEC and a member firm of FINRA, is subject to various risks and uncertainties that are common in the securities industry. Such risks and uncertainties include: • • • • the volatility of financial markets; extensive governmental regulation; intense competition; and litigation. Cole Capital’s business, which involves sponsoring and distributing interests in direct investment programs, depends on a number of factors including our ability to enter into agreements with broker-dealers to participate in the Cole REIT offerings, our success in investing the proceeds of each offering, managing the properties acquired and generating cash flow to make distributions to investors in our direct investment programs and our success in entering into liquidity events for the direct investment programs. We are subject to competition from other sponsors and dealer managers of direct investment programs and other investments, and there can be no assurance that this business will be successful. Sponsorship of the Cole REITs also involves risks relating to competition from sponsors of other similar programs and risks relating to the possibility that such programs will not receive capital at the levels and at such times that are anticipated or needed to meet up-front or ongoing costs or debt obligations. FINRA rules applicable to Cole Capital and the Cole REITs’ business, including Rule 2310 (Direct Participation Programs) which, among other things, imposes limits on total compensation to brokers in connection with an offering, and amendments to Rule 2340 (Customer Account Statements) which were effective in April 2016 and changed the manner in which the value of shares in a Cole REIT may be reflected on customer account statements, as well as FINRA investigations into the manner in which shares are sold by some retail brokers, may have a negative impact on the business of Cole Capital. Public authorities may continue to enact new and more stringent standards, or interpret existing laws and regulations in a more restrictive manner, which may adversely affect companies in the industry, including us. In addition, Cole Capital is subject to risks that are particular to its function as a wholesale broker-dealer and sponsor of the Cole REITs. For example, in its capacity as dealer manager, the broker-dealer provides substantial promotional support to broker- dealers selling a particular offering, including by providing sales literature, forums, webinars, press releases and other mass forms of communication. Due to Cole Capital acting as a sponsor of the Cole REITs and the volume of materials that Cole Capital Corporation may provide throughout the course of an offering, much of Cole Capital’s activities may be scrutinized by regulators. We and Cole Capital may be exposed to significant liability under federal and state securities laws. Additionally, Cole Capital Corporation may be subject to fines and suspension from the SEC and FINRA. 23 Failure to comply with the SEC’s net capital requirements could subject us to sanctions imposed by the SEC or FINRA. Cole Capital Corporation, our broker-dealer subsidiary, is required to maintain certain levels of minimum net capital subject to the SEC’s net capital rule. The net capital rule is designed to measure the general financial integrity and liquidity of a broker- dealer. Compliance with the net capital rule limits those operations of broker-dealers that require the intensive use of their capital, such as underwriting commitments and principal trading activities. The rule also limits the ability of securities firms to pay dividends or make payments on certain indebtedness, such as subordinated debt, as it matures. FINRA may enter the offices of a broker- dealer at any time, without notice, and calculate the firm’s net capital. If the calculation reveals a deficiency in net capital, FINRA may immediately restrict or suspend certain or all the activities of a broker-dealer. If Cole Capital Corporation is not able to maintain adequate net capital, or its net capital falls below requirements established by the SEC, it may be subject to disciplinary action in the form of fines, censure, suspension, expulsion or the termination of business altogether. In addition, if these net capital rules are changed or expanded, or if there is an unusually large charge against net capital, operations that require the intensive use of capital would be limited. A large operating loss or charge against net capital could adversely affect Cole Capital’s ability to expand or even maintain its present levels of business, which could have a material adverse effect on its business of sponsoring and distributing interests in direct investment programs. Broker-dealers and other financial services firms are subject to extensive regulations and increased scrutiny. The financial services industry is subject to extensive regulation by U.S. federal, state and international government agencies, as well as various self-regulatory agencies. Turmoil in the financial markets has contributed to significant rule changes, heightened scrutiny of the conduct of financial services firms and increasing penalties for rule violations. Cole Capital Corporation may be adversely affected by new laws or rules (including the pending Department of Labor fiduciary standard), changes to the laws, rules or in the interpretation of existing rules or more rigorous enforcement. Some of these rules, if implemented, could impact Cole Capital Corporation’s business, including through the potential implementation of a more stringent fiduciary standard for brokers for sales of commission products, such as the Cole REITs, and enhanced regulatory oversight over incentive compensation. The Cole Capital segment also may be adversely affected by other evolving regulatory standards, such as those relating to suitability and supervision. Legal claims or regulatory actions against Cole Capital Corporation or any of the other entities that comprise Cole Capital also could have adverse financial effects on us or harm our reputation, which could harm our business prospects. Cole Capital Corporation, which is registered as a broker-dealer under the Exchange Act and is a member of FINRA, is subject to regulation, examination and supervision by the SEC, FINRA, other self-regulatory organizations and state securities regulators. Broker-dealers are subject to regulations that cover all aspects of the securities business, including sales practices, use and safekeeping of clients’ funds and securities’ capital adequacy, record-keeping and the conduct and qualification of officers, employees and independent contractors. Failure by Cole Capital Corporation to comply with applicable laws or regulations could result in censures, penalties or fines, the issuance of cease and desist orders, suspension or expulsion from the securities industry, or other similar adverse consequences. Additionally, the adverse publicity arising from the imposition of sanctions could harm our reputation and cause us to lose existing clients or fail to gain new clients. Financial services firms are also subject to rules and regulations relating to the prevention and detection of money laundering. The USA PATRIOT Act of 2001 mandates that financial institutions, including broker-dealers and investment advisors, establish and implement anti-money laundering (“AML”) programs reasonably designed to achieve compliance with the Bank Secrecy Act of 1970 and the rules thereunder. Financial services firms must maintain AML policies, procedures and controls, designate an AML compliance officer to oversee the firm’s AML program, implement appropriate employee training and provide for annual independent testing of the program. Cole Capital Corporation has established AML programs, which we subject to periodic third- party testing, but there can be no assurance of the effectiveness of these programs. Failure to comply with AML requirements could subject Cole Capital Corporation to disciplinary sanctions and other penalties. Financial services firms must also comply with applicable privacy and data protection laws and regulations, including SEC Regulation S-P and applicable provisions of the 1999 Gramm-Leach-Bliley Act, the Fair Credit Reporting Act of 1970 and the 2003 Fair and Accurate Credit Transactions Act. Any violations of laws and regulations relating to the safeguarding of private information could subject Cole Capital Corporation to fines and penalties, as well as to civil action by affected parties. We are subject to conflicts of interest relating to Cole Capital’s investment management business. Cole Capital currently manages five Cole REITs, all of which have investment objectives and investment strategies similar to our own. As a result, we may be seeking to acquire properties and real estate-related investments at the same time as the Cole REITs. In addition, certain of our officers are also officers and/or directors of the Cole REITs and, as such, they will have duties to us as well as to the Cole REITs. We have implemented certain procedures to help manage any perceived or actual conflicts among us and the Cole REITs, including adopting an allocation policy to allocate property acquisitions among us and the Cole REITs based on the following factors: 24 • • • • • • • the investment objective of each entity; the anticipated operating cash flows of each entity and the cash requirements of each entity; the effect of the potential acquisition both on diversification of each entity’s investments by type of property, geographic area and tenant concentration; the amount of funds available to each entity and the length of time such funds have been available for investment; the policy of each entity relating to leverage of properties; the income tax effects of the purchase to each entity; and the size of the investment. If we determine that an investment opportunity may be equally appropriate for more than one entity, then the entity that has had the longest period of time elapse since it was allocated an investment opportunity of a similar size and type (e.g., office, industrial, multi-tenant or single tenant retail) will be allocated such investment opportunity. In addition, we have a right of first refusal over three of the Cole REITs with respect to all opportunities to acquire majority single-tenant real estate and real estate- related assets or portfolios with a purchase price greater than $100.0 million. There can be no assurance that these policies will be adequate to address all of the conflicts that may arise or will address such conflicts in a manner that is favorable to us. Further, under the advisory agreements with the Cole REITs, Cole Capital receives fees for various services, including, but not limited to, the day-to-day management of the Cole REITs and transaction-related services. The terms of these advisory agreements were not the result of arm’s length negotiations between independent parties and as a result, the terms of these agreements may not be as favorable to us as they would have been if we had negotiated these agreements with unaffiliated third parties. Because the revenue streams from the advisory agreements Cole Capital has with the Cole REITs are subject to limitation or cancellation, any such termination could have an adverse effect on our business, results of operations and financial condition. The advisory agreements under which Cole Capital provides services to the Cole REITs are subject to renewal on an annual basis and may generally be terminated by each Cole REIT upon 60 days’ notice to us, with or without cause. The advisory agreements with four of the five Cole REITs are scheduled to expire on November 30, 2017 unless otherwise renewed. The advisory agreement with the remaining Cole REIT is scheduled to expire on September 22, 2017 unless otherwise renewed. There can be no assurance that these agreements will not expire or be otherwise terminated and any such termination could have an adverse effect on our business, financial condition and results of operations. Risks Related to our Organization and Structure We are a holding company with no direct operations. As a result, we rely on funds received from the Operating Partnership to pay liabilities and dividends, our stockholders’ claims will be structurally subordinated to all liabilities of the Operating Partnership and our stockholders do not have any voting rights with respect to the Operating Partnership’s activities, including the issuance of additional OP Units. We are a holding company and conduct all of our operations through the Operating Partnership. We do not have, apart from our ownership of the Operating Partnership, any independent operations. As a result, we rely on distributions from the Operating Partnership to pay any dividends we might declare on shares of our common stock. We also rely on distributions from the Operating Partnership to meet our debt service and other obligations, including our obligations to make distributions required to maintain our REIT qualification. The ability of subsidiaries of the Operating Partnership to make distributions to the Operating Partnership, and the ability of the Operating Partnership to make distributions to us in turn, will depend on their operating results and on the terms of any loans that encumber the properties owned by them. Such loans may contain lockbox arrangements, reserve requirements, financial covenants and other provisions that restrict the distribution of funds. In the event of a default under these loans, the defaulting subsidiary would be prohibited from distributing cash. As a result, a default under any of these loans by the borrower subsidiaries could cause us to have insufficient cash to make distributions on our common stock required to maintain our REIT qualification. In addition, because we are a holding company, stockholders’ claims will be structurally subordinated to all existing and future liabilities and obligations (whether or not for borrowed money) of the Operating Partnership and its subsidiaries. Therefore, in the event of our bankruptcy, liquidation or reorganization, claims of our stockholders will be satisfied only after all of our and the Operating Partnership’s and its subsidiaries’ liabilities and obligations have been paid in full. As of December 31, 2016, we owned approximately 97.6% of the OP Units in the Operating Partnership. However, the Operating Partnership may issue additional OP Units in the future. Such issuances could reduce our ownership percentage in the Operating Partnership. Because our stockholders would not directly own any such OP Units, they would not have any voting rights with respect to any such issuances or other partnership-level activities of the Operating Partnership. 25 Our charter and bylaws and Maryland law contain provisions that may delay or prevent a change of control transaction. Our charter, subject to certain exceptions, limits any person to actual or constructive ownership of no more than 9.8% in value of the aggregate of our outstanding shares of stock and not more than 9.8% (in value or in number of shares, whichever is more restrictive) of any class or series of our shares of stock. In addition, our charter provides that we may not consolidate, merge, sell all or substantially all of our assets or engage in a share exchange unless such actions are approved by the affirmative vote of at least two-thirds of the Board of Directors. The ownership limits and the other restrictions on ownership and transfer of our stock and the Board approval requirements contained in our charter may delay or prevent a transaction or a change of control that might involve a premium price for our common stock or otherwise be in the best interest of our stockholders. Certain provisions in the LPA may delay, defer or prevent unsolicited acquisitions of us. Certain provisions in the LPA may delay or make more difficult unsolicited acquisitions of us or changes in our control. These provisions could discourage third parties from making such proposals, although some stockholders might consider such proposals, if made, desirable. These provisions include, among others: • • • • redemption rights of qualifying parties; the ability of the General Partner in some cases to amend the LPA without the consent of the limited partners; the right of the limited partners to consent to transfers of the general partnership interest of the General Partner and mergers or consolidations of the Company under specified limited circumstances; and restrictions relating to our qualification as a REIT under the Internal Revenue Code. The LPA also contains other provisions that may have the effect of delaying, deferring or preventing a transaction or a change of control that might involve a premium price for our common stock or otherwise be in the best interest of our stockholders. Tax protection provisions on certain properties could limit our operating flexibility. We have agreed with ARC Real Estate Partners, LLC, an affiliate of the Former Manager, to indemnify it against any adverse tax consequences if we were to sell, convey, transfer or otherwise dispose of all or any portion of the interests in the properties that were acquired by us in our formation transactions, in a taxable transaction. These tax protection provisions apply until September 6, 2021, which is the 10th anniversary of the closing of our initial public offering (“IPO”). Although it may be in our stockholders’ best interest that we sell one or more of these properties, it may be economically disadvantageous for us to do so because of these obligations. We have also agreed to make debt available for ARC Real Estate Partners, LLC to guarantee. We agreed to these provisions at the time of our IPO in order to assist ARC Real Estate Partners, LLC in preserving its tax position after its contribution of its interests in our initial properties. As a result, we may be required to incur and maintain more debt than we would otherwise. The Company’s fiduciary duties as sole general partner of the Operating Partnership could create conflicts of interest. The Company has fiduciary duties to the Operating Partnership and the limited partners in the Operating Partnership, the discharge of which may conflict with the interests of its stockholders. The LPA provides that, in the event of a conflict between the duties owed by the Company’s directors to the Company and the duties that the Company owes in its capacity as the sole general partner of the Operating Partnership to the Operating Partnership’s limited partners, the Company’s directors are under no obligation to give priority to the interests of such limited partners. As a holder of OP Units, the Company will have the right to vote on certain amendments to the LPA (which require approval by a majority in interest of the limited partners, including the Company) and individually to approve certain amendments that would adversely affect the rights of the Operating Partnership’s limited partners, as well as the right to vote on mergers and consolidations of the Company in its capacity as sole general partner of the Operating Partnership in certain limited circumstances. These voting rights may be exercised in a manner that conflicts with the interests of the Company’s stockholders. For example, the Company cannot adversely affect the limited partners’ rights to receive distributions, as set forth in the LPA, without their consent, even though modifying such rights might be in the best interest of the Company’s stockholders generally. The Board of Directors may change significant corporate policies without stockholder approval. Our investment, financing, borrowing and dividend policies and our policies with respect to other activities, including growth, debt, capitalization and operations, will be determined by the Board of Directors. These policies may be amended or revised at any time and from time to time at the discretion of the Board of Directors without a vote of our stockholders. In addition, the Board of Directors may change our policies with respect to conflicts of interest provided that such changes are consistent with applicable legal requirements. A change in these policies could have an adverse effect on our business, financial condition, liquidity and results of operations and our ability to satisfy our debt service obligations and to make distributions to our stockholders and unitholders. 26 Our rights and the rights of our stockholders to take action against our directors and officers are limited under Maryland law. Maryland law provides that a director or officer has no liability in that capacity if he or she performs his or her duties in good faith, in a manner he or she reasonably believes to be in our best interests and with the care that an ordinarily prudent person in a like position would use under similar circumstances. In addition, Maryland law permits a Maryland corporation to include in its charter a provision limiting the liability of its directors and officers to the corporation and its stockholders for money damages except for liability resulting from (1) actual receipt of an improper benefit or profit in money, property or services or (2) active and deliberate dishonesty established by a final judgment as being material to the cause of action. Our charter contains such a provision and limits the liability of our directors and officers to the maximum extent permitted by Maryland law. Maryland law requires us to indemnify our directors and officers for liability actually incurred in connection with any proceeding to which they may be made, or threatened to be made, a party, except to the extent that the act or omission of the director or officer was material to the matter giving rise to the proceeding and was either committed in bad faith or was the result of active and deliberate dishonesty, the director or officer actually received an improper personal benefit in money, property or services, or, in the case of any criminal proceeding, the director or officer had reasonable cause to believe that the act or omission was unlawful. As a result, we and our stockholders may have more limited rights against our directors and officers than might otherwise exist under common law. In addition, our charter obligates us to advance the reasonable defense costs incurred by our directors and officers. Finally, we have entered into agreements with our directors and officers pursuant to which we have agreed to indemnify them to the maximum extent permitted by Maryland law. U.S. Federal Income and Other Tax Risks Our failure to remain qualified as a REIT would subject us to U.S. federal income tax and potentially state and local tax, and would adversely affect our operations and the market price of our capital stock. We elected to be taxed as a REIT commencing with the taxable year ended December 31, 2011 and believe we have operated, and intend to operate, in a manner that has allowed us to qualify as a REIT and will allow us to continue to qualify as a REIT. However, we may terminate our REIT qualification if the Board of Directors determines that not qualifying as a REIT is in our best interests, or the qualification may be terminated inadvertently. Our qualification as a REIT depends upon our satisfaction of certain asset, income, organizational, distribution, stockholder ownership and other requirements on a continuing basis. We structured our activities in a manner designed to satisfy the requirements for qualification as a REIT. However, the REIT qualification requirements are extremely complex and interpretation of the U.S. federal income tax laws governing qualification as a REIT is limited. Accordingly, we cannot be certain that we have been or will be successful in qualifying to be taxed as a REIT. Our ability to satisfy the asset tests depends on our analysis of the characterization and fair market values of our assets, some of which are not susceptible to a precise determination, and for which we will not obtain independent appraisals. Our compliance with the annual income and quarterly asset requirements also depends on our ability to successfully manage the composition of our income and assets on an ongoing basis. Accordingly, if certain of our operations were to be recharacterized by the Internal Revenue Service (the “IRS”), such recharacterization would jeopardize our ability to satisfy the requirements for qualification as a REIT. Furthermore, future legislative, judicial or administrative changes to the U.S. federal income tax laws could result in our disqualification as a REIT for past or future periods. If we fail to qualify as a REIT for any taxable year and we do not qualify for certain statutory relief provisions, we will be subject to U.S. federal income tax on our taxable income at corporate rates. In addition, we would generally be disqualified from treatment as a REIT for the four taxable years following the year of losing our REIT qualification. Losing our REIT qualification would reduce our net earnings because of the additional tax liability. In addition, distributions to stockholders would no longer qualify for the dividends paid deduction, and we would no longer be required to make distributions and, accordingly, distributions the Operating Partnership makes to its unitholders could be similarly reduced. If this occurs, we might be required to borrow funds or liquidate some investments in order to pay the applicable tax. 27 Even if we continue to qualify as a REIT, in certain circumstances, we may incur tax liabilities that would reduce our cash available for distribution to our stockholders and unitholders. Even if we continue to qualify as a REIT, we may be subject to U.S. federal, state and local income taxes. For example, net income from the sale of properties that are considered held for sale and not for investment (a “prohibited transaction” under the Internal Revenue Code) will be subject to a 100% tax. In addition, we may not make sufficient distributions to avoid income and excise taxes on retained income. We also may decide to retain net capital gain we earn from the sale or other disposition of our property or other assets and pay U.S. federal income tax directly on such income. In that event, our stockholders would be treated for federal income tax purposes as if they earned that income and paid the tax on it directly. However, stockholders that are tax- exempt, such as charities or qualified pension plans, would have no benefit from their deemed payment of such tax liability unless they file U.S. federal income tax returns and thereon seek a refund of such tax. We may, in certain circumstances, be required to pay an excise or penalty tax (which could be significant in amount) in order to utilize one or more relief provisions under the Internal Revenue Code to maintain our qualification as a REIT. A REIT may own up to 100% of the stock of one or more TRSs. Both the subsidiary and the REIT must jointly elect to treat the subsidiary as a TRS of the REIT. A TRS may hold assets and earn income that would not be qualifying assets or income if held or earned directly by a REIT, including gross income from operations pursuant to advisory agreements with the Cole REITs. We may use TRSs generally to hold properties for sale in the ordinary course of business or to hold assets or conduct activities that we cannot conduct directly as a REIT. Our TRSs will be subject to applicable U.S. federal, state, local and foreign income tax on their taxable income. In addition, the TRS rules limit the deductibility of interest paid or accrued by a TRS to its parent REIT to ensure that the TRS is subject to an appropriate level of corporate taxation. These rules also impose a 100% excise tax on certain transactions between a TRS and its parent REIT that are not conducted on an arm’s-length basis. Not all taxing jurisdictions recognize the favorable tax treatment afforded to REITs under the Internal Revenue Code. As such, we may be subject to regular corporate net income taxes in certain state, local or foreign taxing jurisdictions. In addition, we, the Operating Partnership, our TRSs, and/or other entities through which we conduct our business may also be subject to state, local or foreign income, franchise, sales, transfer, excise or other taxes. Any taxes that we incur directly or indirectly will reduce our cash available for distribution to our stockholders and unitholders. Additionally, changes in state, local or foreign tax law could reduce the cash flow from certain investments made by us and could make such investments less attractive to potential buyers when we seek to liquidate such investments. To qualify as a REIT we must meet annual distribution requirements, which may force us to forgo otherwise attractive opportunities or borrow funds during unfavorable market conditions. This could delay or hinder our ability to meet our investment objectives and reduce your overall return. In order to qualify as a REIT, we must distribute annually to our stockholders at least 90% of our REIT taxable income (which does not equal net income as calculated in accordance with U.S. GAAP), determined without regard to the deduction for dividends paid and excluding any net capital gain. We will be subject to U.S. federal income tax on our undistributed taxable income and net capital gain and to a 4% nondeductible excise tax on any amount by which dividends we pay with respect to any calendar year are less than the sum of (a) 85% of our ordinary income, (b) 95% of our capital gain net income and (c) 100% of our undistributed income from prior years. These requirements could cause us to distribute amounts that otherwise would be spent on investments in real estate assets and it is possible that we might be required to borrow funds, possibly at unfavorable rates, or sell assets to fund these dividends or make taxable stock dividends. Although we intend to make distributions sufficient to meet the annual distribution requirements and to avoid U.S. federal income and excise taxes on our earnings while we qualify as a REIT, it is possible that we might not always be able to do so. If the Operating Partnership or certain other subsidiaries fail to qualify as a partnership or are not otherwise disregarded for U.S. federal income tax purposes, then we would cease to qualify as a REIT. We intend to maintain the status of the Operating Partnership as a partnership for U.S. federal income tax purposes. However, if the IRS were to successfully challenge the status of the Operating Partnership as a partnership for such purposes, it would be taxable as a corporation. This would result in our failure to qualify as a REIT and would cause us to be subject to a corporate- level tax on our income. This would substantially reduce our cash available to pay distributions and the yield on your investments. In addition, if one or more of the partnerships or limited liability companies through which the Operating Partnership owns its properties, in whole or in part, loses its characterization as a partnership and is otherwise not disregarded for U.S. federal income tax purposes, then it would be subject to taxation as a corporation, thereby reducing distributions to the Operating Partnership. Such a recharacterization of a subsidiary entity could also threaten our ability to maintain our REIT qualification. 28 Dividends payable by REITs generally do not qualify for the reduced tax rates available for some dividends. Currently, the maximum U.S. federal income tax rate applicable to qualified dividend income payable to U.S. stockholders that are individuals, trusts and estates is 20% (not including the net investment income tax). Dividends payable by REITs, however, generally are not eligible for this reduced rate. Although this does not adversely affect the taxation of REITs or dividends payable by REITs, the more favorable rates applicable to regular corporate qualified dividends could cause investors who are individuals, trusts and estates to perceive investments in REITs to be relatively less attractive than investments in the stocks of non-REIT corporations that pay dividends, which could adversely affect the value of the shares of REITs, including our common stock. Tax rates could be changed in future legislation. If we were considered to have actually or constructively paid a “preferential dividend” to certain of our stockholders, our status as a REIT could be adversely affected. For our taxable years that ended on or before December 31, 2014, in order for our distributions to be counted as satisfying the annual distribution requirements for REITs, and to provide us with a REIT-level tax deduction, the distributions could not have been “preferential dividends.” A dividend is not a preferential dividend if the distribution is pro rata among all outstanding shares of stock within a particular class, and in accordance with the preferences among different classes of stock as set forth in our organizational documents. There is uncertainty as to the IRS’s position regarding whether certain arrangements that REITs have with their stockholders could give rise to the inadvertent payment of a preferential dividend. While we believe that our operations have been structured in such a manner that we will not be treated as inadvertently paying preferential dividends, there is no de minimis or reasonable cause exception with respect to preferential dividends under the Internal Revenue Code. Therefore, if the IRS were to take the position that we inadvertently paid a preferential dividend, we may be deemed either to (a) have distributed less than 100% of our REIT taxable income and be subject to tax on the undistributed portion, or (b) have distributed less than 90% of our REIT taxable income and our status as a REIT could be terminated for the year in which such determination is made and for the four taxable years following the year of termination if we were unable to cure such failure. Complying with REIT requirements may limit our ability to hedge our liabilities effectively and may cause us to incur tax liabilities. The REIT provisions of the Internal Revenue Code may limit our ability to hedge our liabilities. Any income from a hedging transaction we enter into to manage risk of interest rate changes, price changes or currency fluctuations with respect to borrowings made or to be made to acquire or carry real estate assets or to offset certain other positions, if properly identified under applicable Treasury Regulations, does not constitute “gross income” for purposes of the 75% or 95% gross income tests. To the extent that we enter into other types of hedging transactions, the income from those transactions will likely be treated as non-qualifying income for purposes of one or both of the gross income tests. As a result of these rules, we may need to limit our use of advantageous hedging techniques or implement those hedges through a TRS. This could increase the cost of our hedging activities because our TRSs would be subject to tax on gains or expose us to greater risks associated with changes in interest rates than we would otherwise want to bear. In addition, losses in a TRS generally will not provide any tax benefit, except for being carried forward against future taxable income of such TRS. Complying with REIT requirements may force us to forgo or liquidate otherwise attractive investment opportunities. To qualify as a REIT, we must ensure that we meet the REIT gross income tests annually and that at the end of each calendar quarter, at least 75% of the value of our assets consists of cash, cash items, government securities and qualified REIT real estate assets, including certain mortgage loans and certain kinds of mortgage-related securities. The remainder of our investment in securities (other than government securities, qualified real estate assets and stock of a TRS) generally cannot include more than 10% of the outstanding voting securities of any one issuer or more than 10% of the total value of the outstanding securities of any one issuer. In addition, in general, no more than 5% of the value of our assets (other than government securities, qualified real estate assets and stock of a TRS) can consist of the securities of any one issuer, no more than 25% (20% for taxable years beginning after December 31, 2017) of the value of our total assets can be represented by securities of one or more TRSs and no more than 25% of the value of our total assets can be represented by certain debt securities of publicly offered REITs. If we fail to comply with these requirements at the end of any calendar quarter, we must correct the failure within 30 days after the end of the calendar quarter or qualify for certain statutory relief provisions to avoid losing our REIT qualification and suffering adverse tax consequences. As a result, we may be required to liquidate assets from our portfolio or not make otherwise attractive investments in order to maintain our qualification as a REIT. These actions could have the effect of reducing our income and amounts available for distribution to our stockholders. 29 Re-characterization of sale-leaseback transactions may cause us to lose our REIT status. We may purchase properties and lease them back to the sellers of such properties. The Internal Revenue Service could challenge our characterization of certain leases in any such sale-leaseback transactions as “true leases,” which allows us to be treated as the owner of the property for U.S. federal income tax purposes. In the event that any sale-leaseback transaction is challenged and re- characterized as a financing transaction or loan for U.S. federal income tax purposes, deductions for depreciation and cost recovery relating to such property would be disallowed. If a sale-leaseback transaction were so re-characterized, we might fail to satisfy the REIT qualification “asset tests” or the “income tests” and, consequently, lose our REIT status effective with the year of re- characterization. Alternatively, such a recharacterization could cause the amount of our REIT taxable income to be recalculated, which might also cause us to fail to meet the distribution requirement for a taxable year and thus lose our REIT status. We may incur adverse tax consequences if ARCT III, CapLease, ARCT IV or Cole failed to qualify as a REIT for U.S. federal income tax purposes. The tax years subsequent to and including the fiscal year ended December 31, 2012 remain open to examination by the major taxing jurisdictions to which the OP, the General Partner, American Realty Capital Trust III, Inc. (“ARCT III”), CapLease, Inc. (“CapLease”), American Realty Capital Trust IV, Inc., (“ARCT IV”), Cole Real Estate Investments, Inc. (“Cole”) and Cole Credit Property Trust, Inc. (“CCPT”) are subject. If any of ARCT III, CapLease, ARCT IV, Cole or CCPT failed to qualify as a REIT for U.S. federal income tax purposes at any time prior to such entity’s merger with us, we may inherit significant tax liabilities and could fail to qualify as a REIT. We may be subject to adverse legislative or regulatory tax changes that could increase our tax liability, reduce our operating flexibility and reduce the market price of our capital stock. In recent years, numerous legislative, judicial and administrative changes have been made in the provisions of U.S. federal income tax laws applicable to investments similar to an investment in shares of our common stock. Additional changes to the tax laws are likely to continue to occur, and we cannot assure you that any such changes will not adversely affect our taxation and our ability to qualify as a REIT or the taxation of a stockholder. Any such changes could have an adverse effect on an investment in our shares or on the market value or the resale potential of our assets. Our stockholders are urged to consult with their tax advisor with respect to the impact of recent legislation on their investment in our shares and the status of legislative, regulatory or administrative developments and proposals and their potential effect on an investment in our shares. Although REITs generally receive better tax treatment than entities taxed as regular corporations, it is possible that future legislation would result in a REIT having fewer tax advantages, and it could become more advantageous for a company that invests in real estate to elect to be treated for U.S. federal income tax purposes as a regular corporation. As a result, our charter provides the Board of Directors with the power, under certain circumstances, to revoke or otherwise terminate our REIT election and cause us to be taxed as a regular corporation, without the vote of our stockholders. The Board of Directors has fiduciary duties to us and our stockholders and could only cause such changes in our tax treatment if it determines in good faith that such changes are in the best interest of our stockholders. In addition, according to publicly released statements, a top legislative priority of the Trump administration and the current Congress may be significant reform of the Internal Revenue Code, including significant changes to taxation of business entities and the deductibility of interest expense. There is a substantial lack of clarity around the likelihood, timing and details of any such tax reform and the impact of any potential tax reform on our business and on the price of our common stock. Non-U.S. stockholders may be subject to U.S. federal withholding tax and may be subject to U.S. federal income tax upon the disposition of our shares. Gain recognized by a non-U.S. stockholder upon the sale or exchange of our common stock generally will not be subject to U.S. federal income taxation unless such stock constitutes a “U.S. real property interest” (“USRPI”) under the Foreign Investment in Real Property Tax Act of 1980 (the “FIRPTA”). Our common stock will not constitute a USRPI so long as we are a “domestically- controlled qualified investment entity.” A domestically-controlled qualified investment entity includes a REIT if at all times during a specified testing period, less than 50% in value of such REIT’s stock is held directly or indirectly by non-U.S. stockholders. We believe that we are a domestically-controlled qualified investment entity. However, because our common stock is and will be publicly traded, no assurance can be given that we are or will be a domestically-controlled qualified investment entity. Even if we do not qualify as a domestically-controlled qualified investment entity at the time a non-U.S. stockholder sells or exchanges our common stock, gain arising from such a sale or exchange would not be subject to U.S. taxation under FIRPTA as a sale of a USRPI if: (a) our common stock is “regularly traded,” as defined by applicable Treasury regulations, on an established 30 securities market, and (b) such non-U.S. stockholder owned, actually and constructively, 10% or less of our common stock at any time during the five-year period ending on the date of the sale. We anticipate that our shares will be “regularly traded” on an established securities market for the foreseeable future, although, no assurance can be given that this will be the case. We encourage you to consult your tax advisor to determine the tax consequences applicable to you if you are a non-U.S. stockholder. Our property taxes could increase due to property tax rate changes or reassessment, which would impact our cash flows. Even if we qualify as a REIT for federal income tax purposes, we will be required to pay some state and local taxes on our properties. The real property taxes on our properties may increase as property tax rates change or as our properties are assessed or reassessed by taxing authorities. Therefore, the amount of property taxes we pay in the future may increase substantially. If the property taxes we pay increase and if any such increase is not reimbursable under the terms of our lease, then our cash flows will be impacted, and our ability to pay expected distributions to our stockholders and unitholders could be adversely affected. The share ownership restrictions of the Internal Revenue Code for REITs and the 9.8% share ownership limit in our charter may inhibit market activity in our shares of stock and restrict our business combination opportunities. In order to qualify as a REIT, five or fewer individuals, as defined in the Internal Revenue Code, may not own, actually or constructively, more than 50% in value of our issued and outstanding shares of stock at any time during the last half of each taxable year, other than the first year for which a REIT election is made. Attribution rules in the Internal Revenue Code determine if any individual or entity actually or constructively owns our shares of stock under this requirement. Additionally, at least 100 persons must beneficially own our shares of stock during at least 335 days of a taxable year for each taxable year, other than the first year for which a REIT election is made. To help insure that we meet these tests, among other purposes, our charter restricts the acquisition and ownership of our shares of stock. Our charter, with certain exceptions, authorizes our directors to take such actions as are necessary and desirable to preserve our qualification as a REIT while we so qualify. Unless exempted by the Board of Directors, for so long as we qualify as a REIT, our charter prohibits, among other limitations on ownership and transfer of shares of our stock, any person from beneficially or constructively owning (applying certain attribution rules under the Internal Revenue Code) more than 9.8% in value of the aggregate of our outstanding shares of stock and more than 9.8% (in value or in number of shares, whichever is more restrictive) of any class or series of our shares of stock. The Board of Directors, in its sole discretion and upon receipt of certain representations and undertakings, may exempt a person (prospectively or retrospectively) from the ownership limits. However, the Board of Directors may not, among other limitations, grant an exemption from these ownership restrictions to any proposed transferee whose ownership, direct or indirect, in excess of the 9.8% ownership limit would result in the termination of our qualification as a REIT. These restrictions on transferability and ownership will not apply, however, if the Board of Directors determines that it is no longer in our best interest to continue to qualify as a REIT or that compliance with the restrictions is no longer required in order for us to continue to so qualify as a REIT. These ownership limits could delay or prevent a transaction or a change in control that might involve a premium price for our common stock or otherwise be in the best interest of our stockholders. Item 1B. Unresolved Staff Comments. None. Item 2. Properties. Our principal corporate offices are located at 2325 E. Camelback Road, Suite 1100, Phoenix, Arizona 85016. We have additional office space in New York, New York; Orlando, Florida; Alpharetta, Georgia; Austin, Texas; Washington, D.C.; Los Angeles, California; and Glenview, Illinois. We lease all of these offices, other than our office space in Glenview, Illinois, which was acquired in 2013. We believe these properties we own and lease are suitable for our operations for the foreseeable future. As of December 31, 2016, the Company owned 4,142 properties comprising 93.3 million square feet of retail and commercial space located in 49 states, Puerto Rico and Canada, which includes properties owned through consolidated joint ventures. The rentable space at these properties was 98.3% leased with a weighted-average remaining lease term of 9.9 years. See Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Real Estate Portfolio Metrics for a discussion of the properties we hold for rental operations and Schedule III – Real Estate and Accumulated Depreciation for a detailed listing of such properties. Item 3. Legal Proceedings. The information contained under the heading “Litigation” in “Note 15 – Commitments and Contingencies” to our consolidated financial statements is incorporated by reference into this Part I, Item 3. Except as set forth therein, as of the end of the period covered by this Annual Report on Form 10-K, we are not a party to, and none of our properties are subject to, any material pending legal proceedings. 31 Item 4. Mine Safety Disclosures. Not applicable. PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Effective July 31, 2015, we transferred the listing of the General Partner’s common stock and Series F Preferred Stock to the NYSE from NASDAQ Global Select Market (“NASDAQ”). The General Partner’s common stock and Series F Preferred Stock trade under the trading symbols, “VER” and “VER PRF,” respectively. Stock Price Performance Graph Set forth below is a line graph comparing the cumulative total stockholder return on the General Partner’s common stock, based on the market price of the common stock and assuming reinvestment of dividends, with the FTSE National Association of Real Estate Investment Trusts All Equity REITs Index (“FTSE NAREIT All Equity REITs”) and the S&P 500 Index (“S&P 500”) for the period commencing December 31, 2011 and ending December 31, 2016. The graph assumes an investment of $100 on December 31, 2011. The graph above and the accompanying text are not “soliciting material,” are not deemed filed with the SEC and are not to be incorporated by reference in any filing by us under the Securities Act or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing. In addition, the stock price performance in the graph above is not indicative of future stock price performance. Stock Price and Distributions For each quarter indicated, the following table reflects the respective high and low sales prices for the General Partner’s common stock as quoted by NASDAQ or NYSE, as applicable, and the dividend or distribution declared per share of common stock or OP Unit by the General Partner or the Operating Partnership, respectively, in each such period: High Low Dividends or distributions declared on common stock or OP Units (2) $ $ $ First Quarter 2015 (1) Second Quarter 2015 (1) Third Quarter 2015 Fourth Quarter 2015 First Quarter 2016 Second Quarter 2016 Third Quarter 2016 Fourth Quarter 2016 10.38 8.82 $ $ 10.15 8.10 $ $ 9.08 7.50 $ $ 8.66 7.55 $ $ 8.92 6.68 $ $ 10.14 8.67 $ $ 11.09 9.76 $ $ 10.35 7.99 — $ — $ 0.1375 $ 0.1375 $ 0.1375 $ 0.1375 $ 0.1375 $ 0.1375 _______________________________________________ (1) We agreed to suspend the payment of dividends on the General Partner’s common stock until the Company complied with certain periodic financial reporting and related requirements in connection with the amendments to the Credit Facility. On March 30, 2015, the Company satisfied these periodic financial reporting and related requirements. On August 5, 2015, the Board of Directors authorized the reinstatement of a dividend on our common stock. (2) The dividend that the General Partner pays on its common stock is equal to the distributions that the Operating Partnership makes on its OP Units pursuant to the terms of the LPA. However, the Operating Partnership did not make distributions in respect of a substantial portion of the outstanding OP Units held by its limited partners beginning on October 15, 2015 and continuing through January 15, 2017 when the dividend on the General Partner’s common stock was paid, as further discussed in “Note 16 - Equity” in our consolidated financial statements. 33 On February 22, 2017, the Company’s board of directors declared a quarterly cash dividend of $0.1375 per share of common stock (equaling an annualized dividend rate of $0.55 per share) for the first quarter of 2017 to stockholders of record as of March 31, 2017, which will be paid on April 17, 2017. An equivalent distribution by the Operating Partnership is applicable per OP Unit. Our future distributions may vary and will be determined by the General Partner’s Board of Directors based upon the circumstances prevailing at the time, including our financial condition, operating results, estimated taxable income and REIT distribution requirements, and may be adjusted at the discretion of the Board. As of February 22, 2017, the General Partner had approximately 4,200 registered stockholders of record of its common stock. This figure does not reflect the beneficial ownership of shares held in nominee name. There is no established trading market for the Operating Partnership's OP Units. As of February 22, 2017, there were 29 record holders of the OP Units. Recent Sales of Unregistered Securities During the year ended December 31, 2016, the Company redeemed 15,450 Limited Partner OP Units for shares of the General Partner's common stock. These shares of common stock were issued in reliance on an exemption from registration under Section 4(a)(2) of the Securities Act. We relied on the exemption under Section 4(a)(2) based upon factual representations received from the limited partner who received the shares of common stock. Securities Authorized for Issuance Under Equity Compensation Plans The following table shows the amount of securities remaining available for future issuance under our equity compensation plans as of December 31, 2016: Plan Category Equity compensation plans approved by security holders Equity compensation plans not approved by security holders Total Number of securities to be issued upon exercise of outstanding options, warrants and rights — — — Weighted-average exercise price of outstanding options, warrants and rights — — Securities Available For Future Issuance Under Equity Compensation Plans (1) 92,059,754 — — 92,059,754 _______________________________________________ (1) The total number of shares of common stock reserved for the issuance of equity incentive awards under our Equity Plan is equal to 10.0% of the total number of issued and outstanding shares of our common stock (on a fully diluted basis assuming the redemption of all OP Units for shares of common stock) at any time. As such, the number of shares available for issuance under the Equity Plan changes automatically with changes in the total number of outstanding shares of common stock, outstanding OP Units, and dilutive securities. See “Note 17 – Equity-based Compensation” to our consolidated financial statements for a discussion of the Company’s equity plans. Repurchases of Equity Securities We are authorized to repurchase shares of the General Partner’s common stock to satisfy employee withholding tax obligations related to stock-based compensation. During the year ended December 31, 2016, the General Partner and the Operating Partnership repurchased the following shares of common stock and corresponding OP Units that were issued to the General Partner, respectively, in order to satisfy the minimum tax withholding obligation for state and federal payroll taxes on employee stock awards: Period January 1, 2016 - January 31, 2016 February 1, 2016 - February 29, 2016 March 1, 2016 - March 31, 2016 April 1, 2016 - April 30, 2016 May 1, 2016 - May 31, 2016 June 1, 2016 - June 30, 2016 July 1, 2016 - July 31, 2016 August 1, 2016 - August 31, 2016 September 1, 2016 - September 30, 2016 October 1, 2016 - October 31, 2016 November 1, 2016 - November 30, 2016 December 1, 2016 - December 31, 2016 Total Total Number of Shares/ Units Purchased Average Price Paid Per Share/Unit (1) 40,714 42,316 42,126 1,391 2,434 — 18,991 — 552 25,996 2,081 25,141 201,742 $ $ 7.52 7.30 8.55 8.95 9.89 — 10.17 — 10.45 9.65 8.86 8.53 8.40 _______________________________________________ (1) With respect to these shares/units, the price paid per share/unit is based on the weighted average closing price on the respective vesting date. 34 Item 6. Selected Financial Data. The following selected financial data should be read in conjunction with the accompanying consolidated financial statements and related notes thereto and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” appearing elsewhere in this Annual Report on Form 10-K. Prior periods have been reclassified to conform to current presentation, as discussed in “Note 2 – Summary of Significant Accounting Policies” to our consolidated financial statements. The selected financial data (in thousands, except share and per share amounts) presented below was derived from our consolidated financial statements: 2016 2015 December 31, 2014 (1) 2013 2012 Balance sheet data: Total real estate investments, at cost Total assets Total debt, net Total liabilities Temporary equity Total equity Operating data: Total revenues Total operating expenses Operating income (loss) Total other expenses, net Gain (loss) on disposition of real estate and held for sale assets, net Benefit from (provision for) income taxes Loss from continuing operations Net loss from discontinued operations Net loss Net loss attributable to non-controlling interests(2) Net loss attributable to General Partner Cash flow data: $ 15,584,442 $ 15,587,574 $ 6,367,248 $ 6,968,041 $ $ 8,619,533 $ 16,784,721 $ 17,405,866 $ 8,059,802 $ 8,691,907 $ 18,292,560 $ 20,427,136 $ 10,425,778 $ 11,044,806 — $ — $ — $ $ 8,713,959 $ 9,382,330 $ 7,459,142 $ 7,747,494 $ 4,136,619 $ 5,248,967 269,299 $ 2,229,228 $ 1,875,615 $ 2,168,429 375,956 $ 499,669 $ $ — $ 1,668,760 2016 Year Ended December 31, 2014 (1) 2013 (1) 2015 2012 $ 1,454,823 1,401,352 53,471 $ 1,556,017 1,488,692 67,325 $ 1,579,257 1,949,835 (370,578) $ (303,520) (354,809) (396,567) $ 329,323 663,067 (333,744) (171,876) 67,207 97,822 (30,615) (10,877) 45,524 3,701 (72,311) (277,031) 36,303 33,264 — (2,195) — — (200,824) (323,492) (1,010,912) (507,815) (41,492) — — — — (745) (200,824) (323,492) (1,010,912) (507,815) (42,237) 4,961 7,139 33,727 16,316 585 $ (195,863) $ (316,353) $ (977,185) $ (491,499) $ (41,652) Net cash flows provided by operating activities Net cash flows provided by (used in) investing activities $ $ 800,528 890,193 $ $ 867,013 $ 502,887 $ 11,918 $ 9,440 932,595 $ (2,554,456) $ (4,541,718) $ (1,701,422) Net cash flows (used in) provided by financing activities $ (1,503,372) $ (2,147,216) $ 2,415,555 $ 4,289,950 $ 1,965,226 Per share data: Basic and diluted net loss per share from continuing operations attributable to common stockholders Basic and diluted net loss per share attributable to common stockholders Weighted-average number of shares of common stock outstanding - basic (3) $ $ (0.29) $ (0.43) $ (1.36) $ (2.41) $ (0.40) (0.29) $ (0.43) $ (1.36) $ (2.41) $ (0.41) 931,422,844 903,360,763 793,150,098 205,341,431 103,306,366 Cash dividends declared per common share $ 0.55 $ 0.28 $ 1.08 $ 0.91 $ 0.89 _______________________________________________ (1) See “Note 6 – Mergers with Real Estate Businesses” to our consolidated financial statements for discussion of the impact of significant mergers on the Company’s operations during these periods. (2) Represents loss attributable to limited partners and consolidated joint venture partners. (3) For all periods presented, the effect of certain OP Units outstanding, long-term incentive plan units of the Operating Partnership (“LTIP Units”), unvested restricted shares or units and convertible preferred shares were excluded from the weighted-average share calculation as the effect would be anti-dilutive. 35 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. The following discussion and analysis should be read in conjunction with the accompanying consolidated financial statements and notes thereto appearing elsewhere in this Annual Report on Form 10-K. We make statements in this section that are forward- looking statements within the meaning of the federal securities laws. For a complete discussion of forward-looking statements, see the section in this report entitled “Forward-Looking Statements.” Certain risks may cause our actual results, performance or achievements to differ materially from those expressed or implied by the following discussion. For a discussion of such risk factors, see the section in this report entitled “Risk Factors.” Overview We are a full-service real estate operating company that operates through two business segments, our real estate investment segment, REI, and our investment management segment, Cole Capital, as further discussed in “Note 3 – Segment Reporting” to our consolidated financial statements. Through our REI segment, we own and actively manage a diversified portfolio of 4,142 retail, restaurant, office and industrial real estate properties with an aggregate of 93.3 million square feet, of which 98.3% was leased as of December 31, 2016, with a weighted-average remaining lease term of 9.9 years. Through our Cole Capital segment, we are responsible for raising capital for and managing the affairs of the Cole REITs on a day-to-day basis, identifying and making acquisitions and investments on behalf of the Cole REITs, and recommending to the respective board of directors of each of the Cole REITs an approach for providing investors with liquidity. Cole Capital receives compensation and reimbursement for performing these services. As of December 31, 2016, the Cole REITs and other real estate programs’ assets under management were $7.3 billion. Mergers and Major Acquisitions See “Note 6 – Mergers with Real Estate Businesses” to our consolidated financial statements for a discussion of the mergers consummated during the year ended December 31, 2014 with American Realty Capital Trust IV, Inc. and Cole Real Estate Investments, Inc. Our Business Environment and Current Outlook Current conditions in the global capital markets remain volatile as the world’s economic growth has been affected by geopolitical and economic events. In addition, there is uncertainty surrounding the policy stance of the new U.S. administration and its global ramifications. In the United States, the overall economic environment continued to improve in 2016. During 2016, the U.S. real gross domestic product increased 1.6% to $16.66 trillion, the unemployment rate decreased 0.3 percentage points to 4.7%, and Core CPI, a measure of inflation which removes food & energy prices and is seasonally adjusted, increased 2.2%, as compared to the same period a year earlier. Economic trends and government policies affect global and regional commercial real estate markets as well as our operations directly. These include: overall economic activity and employment growth, interest rate levels, the cost and availability of credit and the impact of tax and regulatory policies. Critical Accounting Policies and Significant Accounting Estimates Our accounting policies have been established to conform with U.S. GAAP. The preparation of financial statements in conformity with U.S. GAAP requires us to use judgment in the application of accounting policies, including making estimates and assumptions. These judgments affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Management believes that we have made these estimates and assumptions in an appropriate manner and in a way that accurately reflects our financial condition. We continually test and evaluate these estimates and assumptions using our historical knowledge of the business, as well as other factors, to ensure that they are reasonable for reporting purposes. However, actual results may differ from these estimates and assumptions. If our judgment or interpretation of the facts and circumstances relating to the various transactions had been different, it is possible that different accounting policies would have been applied, thus resulting in a different presentation of the financial statements. Additionally, other companies may utilize different assumptions or estimates that may impact comparability of our results of operations to those of companies in similar businesses. We believe the following critical accounting policies govern the significant judgments and estimates used in the preparation of our financial statements, which should be read in conjunction with the more complete discussion of our accounting policies and procedures included in “Note 2 – Summary of Significant Accounting Policies” to our consolidated financial statements. 36 Goodwill Impairment We evaluate goodwill for impairment annually or more frequently when an event occurs or circumstances change that indicate the carrying value, by reporting unit, may not be recoverable. The risks and uncertainties involved in applying the principles related to goodwill impairment include, but are not limited to, the following: • We estimate the fair value of the reporting units, which we have determined is the same as our reportable segments, using discounted cash flows and relevant competitor multiples. • We monitor factors that may impact the fair value including market comparable company multiples, interest rates and global economic conditions. • We use a combined income and market approach in evaluations for potential impairment, which requires management to make key assumptions related to revenue growth rate, cash flow assumptions, discount rate and selection of comparable companies. See Note 10 – Fair Value Measures for discussion regarding our sensitivity analysis performed around these assumptions. Intangible Asset Impairment The Company evaluates intangible assets for impairment when an event occurs or circumstances change that indicate the carrying value may not be recoverable. The risks and uncertainties involved in applying the principles related to intangible impairment include, but are not limited to, the following: • We estimate fair value using a discounted cash flow model specific to the applicable Cole REITs. • We monitor factors that could impact fair value including the ability to timely reinstate certain selling agreements, timing of and aggregate capital raised and deployed on behalf of the Cole REITs, the actual timing of closing an offering or executing a liquidity event on behalf of a Cole REIT and operations of future managed real estate programs. • We utilized the income approach in evaluation for impairment, which requires management to make key assumptions related to future cash flows and a discount rate. See Note 10 – Fair Value Measures for discussion regarding our sensitivity analysis performed around these assumptions. Real Estate Investment Impairment We invest in real estate assets and subsequently monitor those investments quarterly for impairment, including the review of real estate properties subject to direct financing leases. Additionally, we record depreciation and amortization related to our investments. The risks and uncertainties involved in applying the principles related to real estate investments include, but are not limited to, the following: • The estimated useful lives of our depreciable assets affects the amount of depreciation and amortization recognized on our investments. • The review of impairment indicators and subsequent determination of the undiscounted future cash flows could require us to reduce the value of assets and recognize an impairment loss. • The fair value of held for sale assets is estimated by management. This estimated value could result in a reduction of the carrying value of the asset. • Changes in assumptions based on actual results may have a material impact on the Company’s financial results. Loans Held for Investment Impairment We evaluate loans held for investment on a quarterly basis. As a first step in the notes receivable impairment process, we must determine, based on current information and events, if it is probable that we will be unable to collect the amounts due in accordance with the loan agreement. The risks and uncertainties involved in applying the principles related to notes receivable include, but are not limited to, the following: • Evaluating the financial condition and other current obligations of the borrower involves judgment in assessing their liquidity and financial stability. Program Development Costs We assess the collectability of the program development costs, considering the offering period and historical and forecasted sales of shares under the Cole REITs’ respective offerings and reserve for any balances considered not collectible. Additional reserves are generally recorded if actual proceeds raised from the offerings and corresponding program development costs incurred differ from management’s assumptions. The risks and uncertainties involved in applying the principles related to program development costs include, but are not limited to, the following: 37 • Estimating recoverability for each program which involves an analysis of expected reimbursement revenue and projected organization and offering costs. • Utilizing assumptions to calculate impairment charges related to goodwill and impairment, as discussed above. • Assessing the impact of the change in calculations of recoverability percentages. Consolidation of Equity Investments We hold equity investments in unconsolidated joint ventures and each of the Cole REITs and account for these investments using the equity method of accounting as we have the ability to exercise significant influence, but not control, over operating and financial policies of these investments. We must continually evaluate these and other non-controlling interests for consolidation based on standards set forth in U.S. GAAP. For legal entities being evaluated, we must first determine whether the interests that we hold and fees we receive qualify as variable interests in the entity, as discussed in “Note 2 – Summary of Significant Accounting Policies” to our consolidated financial statements. The difference between consolidating the VIE and accounting for it using the equity method could be material to the Company’s consolidated financial statements. The risks and uncertainties involved in applying the principles related to equity investments include, but are not limited to, the following: • Consideration for variable interest entities involves determining their ability to finance their operations without additional subordinated financial support, whether the equity holders lack the characteristic of controlling financial interest, or whether the entity is established with non-substantive voting rights. • We perform significance calculations based on investments, total assets and income, on an individual basis or on an aggregated basis, by any combination of unconsolidated subsidiaries and equity-method investees. Allocation of Purchase Price of Business Combinations, including Acquired Properties In connection with our acquisition of properties, we allocate the purchase price to the tangible and intangible assets and liabilities acquired based on their respective estimated fair values. Tangible assets consist of land, buildings, fixtures and tenant improvements. Intangible assets consist of above- and below- market lease values and the value of in-place leases. Our purchase price allocations are developed utilizing third-party appraisal reports, industry standards and management experience. The risks and uncertainties involved in applying the principles related to purchase price allocations include, but are not limited to, the following: • The value allocated to land as opposed to buildings, fixtures and tenant improvements affects the amount of depreciation expense we record. If more value is attributed to land, depreciation expense is lower than if more value is attributed to buildings, fixtures and tenant improvements; • Intangible lease assets and liabilities can be significantly affected by estimates, including market rent, lease term including renewal options at rental rates below estimated market rental rates, carrying costs of the property during a hypothetical expected lease-up period, and current market conditions and costs, including tenant improvement allowances and rent concessions; and • We determine whether any financing assumed is above- or below- market based upon comparison to similar financing terms for similar investment properties. Income Taxes As a REIT, the General Partner generally is not subject to federal income tax on taxable income that it distributes to its shareholders as long as it distributes at least 90% of its annual taxable income (computed without regard to the deduction for dividends paid and excluding net capital gains), with the exception of its TRS entities. However, the General Partner, including its TRS entities, and the Operating Partnership are still subject to certain state and local income and franchise taxes in the various jurisdictions in which they operate. We provide for income taxes in accordance with current authoritative accounting and tax guidance. The tax provision or benefit related to significant or unusual items is recognized in the quarter in which those items occur. In addition, the effect of changes in enacted tax laws, rates or tax status is recognized in the quarter in which the change occurs. The risks and uncertainties involved in applying the principles related to income taxes include, but are not limited to, the following: • Our calculations related to income taxes contain uncertainties due to judgment used to calculate tax liabilities in the application of complex tax laws and regulations across the tax jurisdictions where we operate; • We file income tax returns in the U.S. federal jurisdiction, the Canadian federal jurisdiction and various state and local jurisdictions, and are subject to routine examinations by the respective tax authorities. We may be challenged upon review by the applicable taxing authorities, and positions we have taken may not be sustained; and • The accounting estimates used to compute the provision for or benefit from income taxes may change as new events occur, additional information is obtained or the tax environment changes. 38 Recently Issued Accounting Pronouncements Recently issued accounting pronouncements are described in “Note 2 – Summary of Significant Accounting Policies” to our consolidated financial statements. Operating Highlights and Key Performance Indicators 2016 Activity • Acquired controlling financial interests in eight commercial properties for an aggregate purchase price of $100.2 million. • Disposed of 301 properties and one property owned by an unconsolidated joint venture for an aggregate sales price of $1.20 billion, of which our share was $1.14 billion, resulting in consolidated proceeds of $1.00 billion after closing costs, $55.0 million of debt assumptions and $57.0 million of debt repayments by the unconsolidated joint venture. • Closed on a public offering to sell 69.0 million shares of common stock, as defined in Note 1 – Organization, for net proceeds, after underwriting discounts and offering costs, of $702.5 million. • Closed the 2016 Bond Offering of $1.0 billion and entered into a $300.0 million 2016 Term Loan, as defined in Note 11 – Debt, to the consolidated financial statements, which was subsequently repaid. • Registered a continuous offering program allowing for the issuance of up to $750.0 million in shares of common stock over three years. • Total debt decreased by $1.7 billion, from $8.1 billion to $6.4 billion, comprised of unsecured bonds of $0.3 billion, unsecured Credit Facility of $1.0 billion, and secured debt of $0.4 billion. • Declared a quarterly dividend of $0.1375 per share of common stock for each quarter of 2016, representing an annualized dividend rate of $0.55 per share. 39 Real Estate Portfolio Metrics In managing our portfolio, we are committed to diversification by property type, tenant, geography and industry. Below is a summary of our property type diversification and our top ten concentrations as of December 31, 2016, based on annualized rental income of $1.2 billion for the year ended December 31, 2016. 40 Our financial performance is influenced by the timing of acquisitions and dispositions and the operating performance of our real estate properties. The following table shows the property statistics of our real estate assets, excluding properties owned through our unconsolidated joint ventures as of December 31, 2016, 2015 and 2014: 2016 2015 2014 Portfolio Metrics Properties owned Rentable square feet (in millions) Economic occupancy rate (1) Investment-grade tenants (2) ____________________________________ (1) Economic occupancy rate equals the sum of square feet leased (including month-to-month) divided by total square feet. (2) 4,142 93.3 98.3% 41.2% 4,435 99.6 98.6% 42.5% 4,648 103.1 99.3% 46.9% Investment-grade tenants are those with a credit rating of BBB- or higher by Standard & Poor’s Rating Services or a credit rating of Baa3 or higher by Moody’s Investor Service, Inc. The ratings may reflect those assigned by Standard & Poor’s Rating Services or Moody’s Investor Service, Inc. to the lease guarantor or the parent company, as applicable. The following table shows the economic metrics of our real estate assets, excluding properties owned through our unconsolidated joint ventures, as of and for the years ended December 31, 2016, 2015 and 2014: Economic Metrics Weighted-average lease term (in years) (1) Lease rollover (1)(2): Annual average Maximum for a single year ____________________________________ (1) Based on annualized rental income of our real estate portfolio as of the respective reporting date. (2) Through the end of the next five years measured as of the end of each reporting period. 2016 9.9 4.3% 7.4% 2015 10.6 3.8% 4.5% 2014 11.8 3.2% 4.3% 41 Operating Performance In addition, management uses the following financial metrics of our business segments to assess our operating performance (dollar amounts in thousands, except per share amounts). Financial Metrics Real Estate Investment Segment Revenues Operating income (loss) Net loss Funds from operations attributable to common stockholders and limited partners (“FFO”) (1) Adjusted funds from operations attributable to common stockholders and limited partners (“AFFO”) (1) AFFO per diluted share (1) Financial Metrics (continued) Cole Capital Segment Revenues Operating loss Net loss FFO (1) AFFO (1) AFFO per diluted share (1) Year Ended December 31, 2016 2015 2014 $ 1,375,699 $ 1,441,135 $ 1,335,447 (30,706) $ 297,080 $ 195,479 $ (714,238) (136,095) $ (69,373) $ $ $ $ $ $ $ $ $ $ $ 744,867 725,302 0.76 $ $ $ 772,563 769,201 0.83 $ $ $ 445,810 685,472 0.82 119,376 $ (142,008) $ (131,451) $ (131,451) $ $ 16,155 $ 0.02 114,882 $ (229,755) $ (187,397) $ (187,397) $ $ 12,857 $ 0.01 203,558 (339,872) (296,674) (296,674) 65,242 0.08 Consolidated Revenues Operating income (loss) Net loss FFO (1) AFFO (1) AFFO per diluted share (1) ____________________________________ (1) See the “Non-GAAP Measures” section below for descriptions of our non-GAAP measures and reconciliations to the most comparable U.S. GAAP measure. $ 1,556,017 $ 1,454,823 67,325 $ 53,471 $ (200,824) $ $ $ 613,416 $ $ 741,457 $ $ 0.78 $ $ 1,579,257 (370,578) $ (323,492) $ (1,010,912) 149,136 $ 585,166 750,714 $ 782,058 0.90 $ 0.84 The following table presents the total assets of the Company, by segment (in thousands): REI segment Cole Capital segment Total Total Assets December 31, 2016 15,337,623 $ 249,951 15,587,574 $ December 31, 2015 16,966,729 $ 439,137 17,405,866 $ 42 Property Financing Our mortgage notes payable consisted of the following as of December 31, 2016, 2015 and 2014 (dollar amounts in thousands): December 31, 2016 December 31, 2015 December 31, 2014 _______________________________________________ Encumbered Properties Outstanding Loan Amount Weighted Average Effective Interest Rate (1)(2) Weighted Average Maturity (3) 619 654 776 $ $ $ 2,629,949 3,039,882 3,689,795 4.95% 5.08% 4.88% 4.6 5.1 6.2 (1) Mortgage notes payable have fixed rates or are fixed by way of interest rate swap arrangements. Effective interest rates ranged from 2.00% to 7.75% at December 31, 2016, 3.10% to 10.68% at December 31, 2015 and 2.75% to 7.20% at December 31, 2014. (2) Weighted average interest rate is computed using the interest rate in effect until the anticipated repayment date. Should the loan not be repaid at the anticipated repayment date, the applicable interest rate would increase as specified in the respective loan agreement until the extended maturity date. (3) Weighted average remaining years to maturity as of December 31, 2016, 2015, and 2014, respectively. Weighted average years remaining to maturity is computed using the anticipated repayment date as specified in each loan agreement, where applicable. In addition, we have financing which is not secured by interests in real property, which is described under “Liquidity and Capital Resources.” Future Lease Expirations The following is a summary of lease expirations for the next 10 years and beyond at the properties we owned as of December 31, 2016 (dollar amounts and square feet in thousands): Year of Expiration 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Thereafter Total Number of Leases Expiring (1) Square Feet Square Feet as a % of Total Portfolio Annualized Rental Income Expiring Annualized Rental Income Expiring as a % of Total Portfolio 126 213 184 231 194 276 212 177 266 247 1,315 3,441 1,973 3,368 3,242 4,203 11,046 9,638 5,935 9,158 4,233 7,832 31,052 91,680 2.1% $ 3.6% 3.5% 4.6% 11.8% 10.4% 6.3% 9.9% 4.5% 8.4% 33.2% 98.3% $ 27,663 37,029 55,142 46,299 87,378 84,589 72,330 106,982 61,111 82,723 512,537 1,173,783 2.4% 3.1% 4.7% 3.9% 7.4% 7.3% 6.2% 9.1% 5.2% 7.1% 43.6% 100.0% _______________________________________________ (1) The Company has certain leases comprised of multiple properties. 43 Results of Operations Revenues The table below sets forth, for the periods presented, certain revenue information and the dollar amount change year over year (in thousands): Year Ended December 31, 2016 2015 2014 2016 vs 2015 Increase/(Decrease) 2015 vs 2014 Increase/(Decrease) $ 1,227,937 $ 1,339,787 $ 1,271,574 $ (111,850) $ Revenues: Rental income Direct financing lease income Operating expense reimbursements Cole Capital revenue: Offering-related fees and reimbursements Transaction service fees and reimbursements Management fees and reimbursements 2,055 105,455 36,533 12,959 69,884 2,720 98,628 24,410 30,109 60,363 3,603 100,522 87,109 64,956 51,493 (665) 6,827 12,123 (17,150) 9,521 4,494 68,213 (883) (1,894) (62,699) (34,847) 8,870 (88,676) (23,240) Total Cole Capital revenue 119,376 114,882 203,558 Total revenues Rental Income $ 1,454,823 $ 1,556,017 $ 1,579,257 $ (101,194) $ 2016 vs 2015 – Rental revenue decreased $111.9 million during the year ended December 31, 2016, of which $105.6 million was due to the disposition of 529 consolidated properties subsequent to January 1, 2015. The decrease was also due to an increase in tenant vacancies, particularly Ovation Brands, Inc., which filed for chapter 11 bankruptcy on March 7, 2016 (the “Ovation Bankruptcy”). 2015 vs 2014 – The increase in rental income during the year ended December 31, 2015 was primarily due to the acquisition of 1,107 properties in 2014, including the consummation of the Cole Merger in the first quarter of 2014 and the acquisition of over 500 Red Lobster® restaurants in the third quarter of 2014, offset by the disposition of 338 properties subsequent to January 1, 2014. Cole Capital Revenue Cole Capital’s results of operations are primarily impacted by capital raised on behalf of the Cole REITs in offerings as well as the timing and extent of real estate asset acquisitions, dispositions, assets under management and reimbursements, which are driven by the Cole REITs’ capital raised, cash flows provided by operations and available proceeds from debt financing. Offering-Related Fees and Reimbursements Offering-related fees and reimbursements include selling commissions, dealer manager fees and/or distribution and stockholder servicing fees earned from selling securities in the Cole REITs. The Company reallows 100% of selling commissions and may reallow all or a portion of our dealer manager and distribution and stockholder servicing fees to participating broker-dealers as a marketing and due diligence expense reimbursement, based on factors such as the volume of shares sold by such participating broker-dealers and the amount of marketing support provided by such participating broker-dealers. The following table represents offering-related fees and reimbursements as well as amounts reallowed for the periods presented and the dollar amount change year over year (in thousands). Year Ended December 31, 2016 2015 2014 2016 vs 2015 Increase/(Decrease) 2015 vs 2014 Increase/(Decrease) Offering-related fees $ 28,250 $ 19,232 $ 74,556 $ 9,018 $ Offering-related reimbursements Less: reallowed fees and commissions 8,283 23,174 5,178 16,195 12,553 66,228 3,105 6,979 (55,324) (7,375) (50,033) Offering-related fees and reimbursements, net of reallowed $ 13,359 $ 8,215 $ 20,881 $ 5,144 $ (12,666) 2016 vs 2015 – The increase in offering-related fees and reimbursements, net of reallowed fees and commissions of $5.1 million during the year ended December 31, 2016 was a direct result of a $216.2 million increase in capital raise to $487.2 million during the year ended December 31, 2016 from $271.0 million during the year ended December 31, 2015. The increase in capital raise was due to new broker-dealer relationships, as well as certain broker-dealers lifting the suspension of their selling agreements. 44 2015 vs 2014 – The net decrease in offering-related fees and reimbursements of $12.7 million for the year ended December 31, 2015 was a direct result of the decrease in capital raise related to the suspension of certain selling agreements, as discussed above. Additionally, the decrease was partly due to the closing of the offering of Cole Credit Property Trust IV, Inc. in the first quarter of 2014. Transaction Service Fees and Reimbursements 2016 vs 2015 – Transaction service fees and reimbursement revenue consist primarily of acquisition and disposition fees earned from acquiring and selling properties on behalf of the Cole REITs and other real estate programs. The decrease of $17.2 million during the year ended December 31, 2016, was due to a decrease in property acquisitions from $992.2 million, during the year ended December 31, 2015, to $660.2 million for the year ended December 31, 2016. In addition, disposition fee revenue decreased as the Company received $4.4 million of such fees relating to the Cole Corporate Income Trust, Inc. disposition in 2015. 2015 vs 2014 – Transaction service fees were $27.9 million for the year ended December 31, 2015 as compared to $60.7 million during the same period in 2014. Transaction-related reimbursement revenues were $2.2 million for the year ended December 31, 2015, as compared to $4.3 million during the same period in 2014. The net decrease of $34.9 million for the year ended December 31, 2015 was primarily due to decreases in acquisition fee revenue as there were less funds raised by the Managed REITs’ offerings that could be deployed into real estate acquisitions on their behalf. Management Fees and Reimbursements 2016 vs 2015 – The increase of $9.5 million for the year ended December 31, 2016 was primarily due to an increase in the average assets under management, excluding assets owned by CCIT, as CCIT merged with Select Income REIT on January 29, 2015, from $6.3 billion for the year ended December 31, 2015 to $7.0 billion for the year ended December 31, 2016 and an increase in reimbursement revenue of $3.7 million for the year ended December 31, 2016. 2015 vs 2014 – Management fees were $46.5 million for the year ended December 31, 2015 as compared to $42.7 million during the same period in 2014. Management reimbursement revenues were $13.8 million for the year ended December 31, 2015, as compared to $8.8 million during the same period in 2014. The overall net increase in fees and reimbursements of $8.8 million for the year ended December 31, 2015 primarily related to an increase in reimbursement revenue as the Company was no longer waiving certain expenses due from the Managed REITs in 2015, as well as an increase in advisory fees due to an increase in assets under management. Operating Expenses The table below sets forth, for the periods presented, certain operating expense information and the dollar amount change year over year (dollar amounts in thousands): Year Ended December 31, 2016 2015 2014 2016 vs 2015 Increase/(Decrease) 2015 vs 2014 Increase/(Decrease) Operating expenses: Cole Capital reallowed fees and commissions $ 23,174 $ 16,195 $ 66,228 $ Acquisition related expenses Litigation, merger and other non-routine costs, net of insurance recoveries Property operating expenses Management fees to affiliates General and administrative expenses Depreciation and amortization expenses Impairments 1,321 6,243 38,940 3,884 144,428 — 136,608 788,186 303,751 33,628 130,855 — 149,066 847,611 305,094 199,616 137,741 13,888 167,428 916,003 409,991 6,979 $ (4,922) (29,744) 13,573 — (12,458) (59,425) (1,343) Total operating expenses $ 1,401,352 $ 1,488,692 $ 1,949,835 $ (87,340) $ (50,033) (32,697) (165,988) (6,886) (13,888) (18,362) (68,392) (104,897) (461,143) Acquisition Related Expenses 2016 vs 2015 – Acquisition related expenses primarily consist of legal, deed transfer and other costs related to real estate purchase transactions, including costs incurred for deals that were not consummated. The Company acquired an interest in eight commercial properties for a purchase price of $100.2 million during the year ended December 31, 2016 as compared with the acquisition of 16 properties for an aggregate purchase price of $36.3 million during the year ended December 31, 2015. The decrease in acquisition related expenses of $4.9 million during the year ended December 31, 2016 was due to a decrease in costs incurred for deals that were not consummated and fewer properties acquired in 2016. 45 2015 vs 2014 – The Company acquired interests in 16 commercial properties, including nine land parcels for build-to-suit development, for an aggregate purchase price of $36.3 million during the year ended December 31, 2015 as compared with the acquisition of 1,107 properties including 31 land parcels, for an aggregate purchase price of $3.8 billion during the year ended December 31, 2014. The decrease in acquisition related expenses during the year ended December 31, 2015 was primarily due to a significant decrease in acquisition activity as compared to the same period in 2014. Litigation, Merger and Other Non-Routine Costs, Net of Insurance Recoveries 2016 vs 2015 – The decrease of $29.7 million during the year ended December 31, 2016 was primarily due to a $20.0 million decrease in legal fees incurred for litigation arising from the results of the the Audit Committee Investigation and related litigation and investigations. Additionally, the Company recognized insurance recoveries of $21.2 million during the year ended December 31, 2016 as compared to $11.4 million in 2015. 2015 vs 2014 – The decrease of $166.0 million during the year ended December 31, 2015 was primarily related to costs incurred relating to the Cole Merger and the ARCT IV Merger, including a $78.2 million subordinated distribution fee to an affiliate of the Former Manager upon the consummation of the ARCT IV Merger that was settled with 6.7 million OP Units to the affiliate of the Former Manager during the year ended December 31, 2014. No such fees were incurred for any mergers during the year ended December 31, 2015. However, the Company incurred $44.2 million of expenses in connection with the Audit Committee Investigation and related litigation and investigations during the year ended December 31, 2015. These expenses were offset by $11.4 million of insurance proceeds, $10.5 of which related to expenses for litigation arising from the results of the Audit Committee Investigation. Property Operating Expenses and Operating Expense Reimbursement The table below sets forth, for the periods presented, the property operating expenses, net of operating expense reimbursements, and the dollar amount change year over year (dollar amounts in thousands): Year Ended December 31, 2016 2015 2014 2016 vs 2015 Increase/(Decrease) 2015 vs 2014 Increase/(Decrease) Property operating expenses $ 144,428 $ 130,855 $ 137,741 $ 13,573 $ Less: Operating expense reimbursements 105,455 98,628 100,522 6,827 Property operating expenses, net of operating expense reimbursements $ 38,973 $ 32,227 $ 37,219 $ 6,746 $ (6,886) (1,894) (4,992) 2016 vs 2015 – Property operating expenses such as taxes, insurance, ground rent and maintenance include both reimbursable and non-reimbursable property expenses. Operating expense reimbursement revenue represents reimbursements for such costs that are reimbursable by the tenants per their respective leases. The net increase of $6.7 million during the year ended December 31, 2016 was primarily due to an increase in tenant vacancies, particularly related to the Ovation Bankruptcy. 2015 vs 2014 – The net decrease of $5.0 million during the year ended December 31, 2015 was driven primarily by the disposal of our portfolio of anchored shopping centers, which generally have higher non-reimbursable operating expenses, during the fourth quarter of 2014, as well as the disposition of 228 properties in 2015. Management Fees to Affiliates 2016 vs 2015 – There were no management fees to affiliates incurred during the years ended December 31, 2016 or 2015 as discussed in “Note 18 – Related Party Transactions and Arrangements” to our consolidated financial statements. 2015 vs 2014 – There were no management fees to affiliates incurred during the year ended December 31, 2015 as discussed in “Note 18 – Related Party Transactions and Arrangements” to our consolidated financial statements, as we completed our transition to self-management on January 8, 2014. During the year ended December 31, 2014, we incurred fees of $13.9 million related to asset management services. 46 General and Administrative Expenses 2016 vs 2015 – The decrease of $12.5 million during the year ended December 31, 2016 was primarily due to a decrease of $8.7 million in consulting and other professional fees in 2016, as well as a decrease in equity-based compensation of $3.8 million primarily due to certain awards which were fully expensed during 2015. Additionally, during the year ended December 31, 2016, accounting fees decreased $1.8 million, primarily due to the work performed during the first quarter of 2015 in connection with the restatements, and legal fees decreased $1.7 million, primarily due to costs incurred in 2015 related to strategic, tax and regulatory matters. These decreases were partially offset by an increase in the amount reserved related to the collectability of program development costs of $4.8 million during the year ended December 31, 2016 as compared to the same period in 2015. See Note 18 – Related Party Transactions and Arrangements for further discussion on the Cole REIT’s program development costs. 2015 vs 2014 – The decrease in general and administrative expense during the year ended December 31, 2015 was primarily related to a decrease in equity-based compensation of $18.8 million, from $33.3 million for the year ended December 31, 2014 to $14.5 million for the year ended December 31, 2015, largely as a result of the forfeiture of certain awards in connection with the departure of certain officers and directors in the fourth quarter of 2014. The overall decrease in compensation and benefits is also due to the Company’s headcount reduction as compared to the same period in 2014, partially offset by the increase in severance to former employees. Depreciation and Amortization Expenses 2016 vs 2015 – The decrease of $59.4 million during the year ended December 31, 2016 primarily related to the disposition of 529 consolidated properties subsequent to January 1, 2015. The Company also recorded $182.8 million and $91.8 million of impairment charges on real estate investments during the year ended December 31, 2016 and 2015, respectively, which reduced the carrying value being depreciated and amortized. 2015 vs 2014 – The decrease in depreciation and amortization expense during the year ended December 31, 2015 was primarily related to a decrease in the amortization of the management and advisory contracts (the “Management Contracts”) with the Managed REITs of $42.6 million due to an impairment of $86.4 million recorded in the fourth quarter of 2014. Additionally, real estate depreciation and amortization expense decreased $27.0 million, primarily due to dispositions of 228 properties in 2015 and 110 properties in 2014. The Company also recorded $100.5 million of impairment charges on real estate investments from continuing operations during the year ended December 31, 2014, of which impairment charges totaling $96.7 million arose during the fourth quarter of 2014. Impairments 2016 vs 2015 – The decrease in impairments of $1.3 million during the year ended December 31, 2016 was due to a decrease in the impairment of the intangible assets and goodwill in the Cole Capital segment of $92.4 million, as discussed in “Note 10 – Fair Value Measures” to our consolidated financial statements, offset by an increase in impairment charges recorded related to the REI segment of $91.1 million primarily due to management identifying certain properties for potential sale as part of its portfolio management strategy to reduce exposure to office properties, as well as the Ovation Bankruptcy. 2015 vs 2014 – The decrease in impairments during the year ended December 31, 2015 was primarily due to a decrease in the impairment of goodwill in the Cole Capital segment of $83.4 million from $223.0 million in 2014 to $139.7 million in 2015. There was also a decrease in the impairment of real estate assets of $8.7 million from an impairment of $100.5 million during the year ended December 31, 2014, as compared to an impairment of $91.8 million in 2015. 47 Other (Expense) Income and Income Tax Benefit The table below sets forth, for the periods presented, certain financial information and the dollar amount change year over year (dollar amounts in thousands): Other (expense) income and tax benefit (provision): Interest expense (Loss) gain on extinguishment and forgiveness of debt, net Other income, net Reserve for loan loss Equity in income (loss) and gain on disposition of unconsolidated entities Loss on derivative instruments, net Gain (loss) on disposition of real estate and held for sale assets, net Benefit from income taxes Interest Expense Year Ended December 31, 2016 2015 2014 2016 vs 2015 Increase/(Decrease) 2015 vs 2014 Increase/(Decrease) $ (317,376) $ (358,392) $ (452,648) $ (41,016) $ (94,256) (771) 6,035 4,812 6,439 (21,869) 88,596 — (15,300) — (76) (10,570) 9,092 (1,460) (72,311) (277,031) 36,303 33,264 9,783 (1,191) 45,524 3,701 (5,583) (404) 15,300 691 269 117,835 (32,602) 26,681 (82,157) 9,168 9,110 204,720 3,039 2016 vs 2015 – The decrease of $41.0 million during the year ended December 31, 2016 was primarily a result of a decrease in the total outstanding debt balance from $8.1 billion as of December 31, 2015 to $6.4 billion as of December 31, 2016, largely due to the repayment of all outstanding borrowings under the revolving credit facility, repayment of $0.5 billion of the Credit Facility Term Loan, as well as reducing secured debt with proceeds from the public equity offering and property dispositions. 2015 vs 2014 – The decrease in interest expense during the year ended December 31, 2015 was primarily a result of a decrease in amortization expense in relation to a 2014 cumulative adjustment of amortization for premium on a loan in default of $16.7 million. The decrease also related to the decrease in total outstanding debt balance from $10.4 billion as of December 31, 2014 to $8.1 billion as of December 31, 2015, largely due to paying down $1.8 billion on the revolving credit facility as well as the prepayment of mortgage notes payable and assumption of debt by the buyer in property dispositions as discussed in “Note 11 – Debt” to our consolidated financial statements. These decreases were partially offset by an increase of $6.9 million in interest expense on bonds that were issued in February 2014. (Loss) Gain on Extinguishment and Forgiveness of Debt, Net 2016 vs 2015 – During the year ended December 31, 2016, the Company recorded a loss of $0.8 million in relation to the write-off of deferred financing costs and net premiums consisting of losses relating to the early extinguishment of our 2017 Senior Notes of $13.2 million and the prepayment of a portion of the Credit Facility Term Loan of $4.3 million, as well as the 2016 Term Loan of $2.6 million, as discussed in “Note 11 – Debt” to our consolidated financial statements. These losses were partially offset by a gain on forgiveness of debt of $19.1 million related to a property foreclosed upon. 2015 vs 2014 – A gain on extinguishment and forgiveness of debt, net of $4.8 million was recorded for the year ended December 31, 2015, which primarily related to the foreclosure of the Company’s property in Bethseda, Maryland. During the year ended December 31, 2015, the Company also repaid an aggregate of $548.9 million of mortgage notes payable prior to maturity or assumed by the buyer in a property disposition as compared to $1.6 billion repaid prior to maturity in 2014. In connection with the extinguishments, we paid prepayment fees totaling $102,000 and $35.9 million for the years ended December 31, 2015 and 2014, respectively, which are also included in (loss) gain on extinguishment and forgiveness of debt, net in the consolidated financial statements. Other Income, Net 2016 vs 2015 – Other income, net remained relatively constant, decreasing $0.4 million during the year ended December 31, 2016 as compared to the same period in 2015. The line items “Other income, net”, “Gain (loss) on disposition of interest in joint venture” and “Equity in income and gain on disposition of unconsolidated entities” previously reported have been reclassified to conform with the current period’s presentation, as discussed in “Note 2 – Summary of Significant Accounting Policies” to the consolidated financial statements. 48 2015 vs 2014 – The decrease in other income, net during the year ended December 31, 2015 was primarily a result of a litigation settlement with RCS Capital Corporation in 2014, from which the Company received $60.0 million in connection with the unconsummated sale of Cole Capital as discussed in “Note 18 – Related Party Transactions and Arrangements” to our consolidated financial statements. The decrease also related to the decrease in interest income from investment securities, largely resulting from the sale of 15 CMBS for $158.0 million during the third quarter of 2014, as well as a decrease in interest income from mortgage notes receivable, two of which were repaid in the fourth quarter of 2014. Reserve for Loan Loss The reserve for loan loss of $15.3 million for the year ended December 31, 2015 related to an unsecured note from RCS Capital Corporation in connection with the unconsummated sale of Cole Capital, as discussed in “Note 18 – Related Party Transactions and Arrangements” to the consolidated financial statements. During the three months ended December 31, 2015, the Company assessed the collectability of the note, determined it was unlikely to be repaid and recorded the reserve equal to the carrying value of the note. Equity in Income (Loss) and Gain on Disposition of Unconsolidated Entities 2016 vs 2015 – Equity in income (loss) and gain on disposition of unconsolidated entities increased $0.7 million during the year ended December 31, 2016 as compared to 2015. During the year ended December 31, 2016, the Company recored a gain of $10.2 million related to the disposition of one property, comprising 343 million square feet of office space, owned by an unconsolidated joint venture. During the year ended December 31, 2015, the Company recored a gain of $6.7 million related to the disposition of its interest in one consolidated joint venture, whose only assets consisted of investments in three unconsolidated joint ventures that owned three properties, comprising 752 million square feet of retail space. During the years ended December 31, 2016 and 2015, the Company recognized $0.9 million and $2.3 million of net income, respectively, from the unconsolidated joint ventures. The Company recorded equity in loss related to its investments in the Cole REITs of $1.3 million during the year ended December 31, 2016, as compared to equity in income of $49,000 during the year ended December 31, 2015. The line items “Other income, net”, “Gain (loss) on disposition of interest in joint venture” and “Equity in income and gain on disposition of unconsolidated entities” previously reported have been reclassified to conform with the current period’s presentation, as discussed in “Note 2 – Summary of Significant Accounting Policies” to the consolidated financial statements. 2015 vs 2014 – The increase of $9.2 million during the year ended December 31, 2015 as compared to 2014 is primarily due to a gain of $6.7 million related to the disposition of our interest in one consolidated joint venture as discussed above. Loss on Derivative Instruments, Net 2016 vs 2015 – The decrease during the year ended December 31, 2016, is due to the termination of two interest rate swaps in connection with the early repayment of a portion of the Credit Facility Term Loan, as discussed in “Note 11 – Debt” to our consolidated financial statements, which resulted in a loss of $3.3 million, offset by an increase in the fair value of the Company’s interest rate swaps. 2015 vs 2014 – Loss on derivative instruments, net related to the ineffective portion of changes in fair value of cash flow hedges. The decrease in loss on derivative instruments, net for the year ended December 31, 2015 primarily related to the fact that we recorded a loss of $18.8 million for the year ended December 31, 2014 relating to the Series D embedded derivative, which was settled in connection with the redemption of the Series D Preferred Stock in the third quarter of 2014. Gain (Loss) on Disposition of Real Estate and Held For Sale Assets, Net 2016 vs 2015 – During the year ended December 31, 2016, the change of $117.8 million from a net loss on dispositions of real estate to a net gain is due to the Company’s disposition of 301 properties for an aggregate sales price of $1.1 billion, which resulted in an aggregate gain of $50.6 million, as compared to the disposal of 228 properties for an aggregate sales price of $1.4 billion during the same period in 2015 for a loss of $69.1 million. During the year ended December 31, 2016, the Company also recorded a loss of $5.1 million related to assets classified as held for sale, as compared to a loss of $3.2 million during the same period in 2015. 2015 vs 2014 – The loss on disposition of real estate and held for sale assets, net decreased $204.7 million due to the Company’s disposition of 228 properties, including two properties owned by consolidated joint ventures, for an aggregate sales price of $1.4 billion, which resulted in a loss of $69.1 million, as compared to the disposal of 110 properties for an aggregate price of $1.6 billion, which resulted in a loss of $277.0 million 49 Benefit From Income Taxes 2016 vs 2015 – The decrease of $32.6 million during the year ended December 31, 2016 was primarily due to a decrease in the loss attributable to taxable subsidiaries of $90.8 million. 2015 vs 2014 – The benefit from income taxes of $36.3 million for the year ended December 31, 2015 reflected an increase of $3.0 million from a benefit from income taxes of $33.3 million during the same period in 2014. The increased benefit primarily related to a decrease in income taxes within the REI segment. Non-GAAP Measures Our results are presented in accordance with U.S. GAAP. We also disclose certain non-GAAP measures, as discussed further below. Management uses these non-GAAP financial measures in our internal analysis of results and believes these measures are useful to investors for the reasons explained below. These non-GAAP financial measures should not be considered as substitutes for any measures derived in accordance with U.S. GAAP. Funds from Operations and Adjusted Funds from Operations Due to certain unique operating characteristics of real estate companies, as discussed below, the National Association of Real Estate Investment Trusts, Inc. (“NAREIT”), an industry trade group, has promulgated a supplemental performance measure known as funds from operations (“FFO”), which we believe to be an appropriate supplemental performance measure to reflect the operating performance of a REIT. FFO is not equivalent to our net income or loss as determined under U.S. GAAP. NAREIT defines FFO as net income or loss computed in accordance with U.S. GAAP, excluding gains or losses from disposition of property, depreciation and amortization of real estate assets and impairment write-downs on real estate including the pro rata share of adjustments for unconsolidated partnerships and joint ventures. We calculated FFO in accordance with NAREIT’s definition described above. In addition to FFO, we use adjusted funds from operations (“AFFO”) as a non-GAAP supplemental financial performance measure to evaluate the operating performance of the Company. AFFO, as defined by the Company, excludes from FFO non- routine items such as acquisition related expenses, litigation and other non-routine costs, gains or losses on sale of investment securities or mortgage notes receivable and legal settlements and insurance recoveries not in the ordinary course of business. We also exclude certain non-cash items such as impairments of goodwill or intangible assets, straight-line rental revenue, unrealized gains or losses on derivatives, reserves for loan loss, gains or losses on the extinguishment or forgiveness of debt, non-current portion of the tax benefit or expense, equity-based compensation, amortization of intangible assets, deferred financing costs, above- market lease assets and below-market lease liabilities. Management believes that excluding these costs from FFO provides investors with supplemental performance information that is consistent with the performance models and analysis used by management, and provides investors a view of the performance of our portfolio over time. AFFO allows for a comparison of the performance of our operations with other publicly traded REITs, as AFFO, or an equivalent measure, is routinely reported by publicly traded REITs, and we believe often used by analysts and investors for comparison purposes. For all of these reasons, we believe FFO and AFFO, in addition to net income (loss), as defined by U.S. GAAP, are helpful supplemental performance measures and useful in understanding the various ways in which our management evaluates the performance of the Company over time. However, not all REITs calculate FFO and AFFO the same way, so comparisons with other REITs may not be meaningful. FFO and AFFO should not be considered as alternatives to net income (loss) and are not intended to be used as a liquidity measure indicative of cash flow available to fund our cash needs. Neither the SEC, NAREIT, nor any other regulatory body has evaluated the acceptability of the exclusions used to adjust FFO in order to calculate AFFO and its use as a non-GAAP financial performance measure. 50 The table below presents FFO and AFFO for the years ended December 31, 2016, 2015 and 2014 (in thousands, except share and per share data). Consolidated Net loss Dividends on non-convertible preferred stock (Gain) loss on real estate assets and interest in joint venture, net Depreciation and amortization of real estate assets Impairment of real estate Proportionate share of adjustments for unconsolidated entities FFO attributable to common stockholders and limited partners Acquisition related expenses Litigation, merger and other non-routine costs, net of insurance recoveries Impairment of intangible assets Reserve for loan loss Legal settlements Gain on investment securities Loss on derivative instruments, net Amortization of premiums and discounts on debt and investments, net Amortization of above-market lease assets and deferred lease incentives, net of amortization of below-market lease liabilities Net direct financing lease adjustments Amortization and write-off of deferred financing costs Amortization of management contracts Deferred tax benefit (1) Loss (gain) on extinguishment and forgiveness of debt, net Straight-line rent, net of bad debt expense related to straight-line rent Equity-based compensation Other amortization and non-cash charges Proportionate share of adjustments for unconsolidated entities AFFO attributable to common stockholders and limited partners $ Year Ended December 31, $ 2016 (200,824) $ (71,892) (55,722) 756,315 2014 2015 (323,492) $ (1,010,912) (71,094) (71,892) 277,031 65,582 817,469 91,755 5,744 844,527 100,547 9,037 585,166 149,136 6,243 33,628 213,339 15,300 (1,250) (65) 1,460 (19,183) 4,522 2,037 33,998 25,903 (52,242) (4,812) (82,398) 14,500 3,840 2,072 782,058 $ 38,940 199,616 309,444 — (63,206) (6,357) 10,570 (6,449) 5,900 1,595 91,922 68,537 (33,324) 21,869 (75,171) 31,825 2,727 3,140 750,714 182,820 2,719 613,416 1,321 3,884 120,931 — — — 1,191 (14,693) 5,396 2,264 28,063 26,171 (10,136) 771 (54,190) 10,728 5,296 1,044 741,457 $ Weighted-average shares of common stock outstanding - basic Effect of Limited Partner OP Units and dilutive securities(2) Weighted-average shares of common stock outstanding - diluted (3) 931,422,844 24,626,646 956,049,490 903,360,763 26,013,303 929,374,066 793,150,098 44,502,144 837,652,242 AFFO attributable to common stockholders and limited partners per diluted share $ 0.78 $ 0.84 $ 0.90 ____________________________________ (1) This adjustment represents the non-current portion of the benefit from income taxes in order to show only the current portion of the provision for or benefit from income taxes as an impact to AFFO. (2) Dilutive securities include unvested restricted shares of common stock and unvested restricted stock units. (3) Weighted-average shares for all periods presented exclude the effect of the convertible debt as the Company would expect to settle the debt with cash. 51 The table below presents FFO and AFFO for the REI segment for the years ended December 31, 2016, 2015 and 2014 (in thousands, except share and per share data). Year Ended December 31, REI segment: Net loss Dividends on non-convertible preferred stock (Gain) loss on real estate assets and interest in joint venture, net Depreciation and amortization of real estate assets Impairment of real estate Proportionate share of adjustments for unconsolidated entities FFO attributable to common stockholders and limited partners $ 2016 (69,373) $ (71,892) (55,722) 756,315 182,820 2,719 744,867 Acquisition related expenses Litigation, merger and other non-routine costs, net of insurance recoveries Reserve for loan loss Legal settlements Gain on investment securities Loss on derivative instruments, net Amortization of premiums and discounts on debt and investments, net Amortization of above-market lease assets and deferred lease incentives, net of amortization of below-market lease liabilities Net direct financing lease adjustments Amortization and write-off of deferred financing costs Loss (gain) on extinguishment and forgiveness of debt, net Straight-line rent, net of bad debt expense related to straight-line rent Equity-based compensation Other amortization and non-cash charges Proportionate share of adjustments for unconsolidated entities AFFO attributable to common stockholders and limited partners $ 1,257 3,884 — — — 1,191 (14,693) 5,396 2,264 28,063 771 (54,190) 5,448 — 1,044 725,302 $ 2015 (136,095) $ (71,892) 65,582 817,469 91,755 5,744 772,563 5,649 33,628 15,300 (1,250) (65) 1,460 (19,183) 4,522 2,037 33,998 (4,812) (82,398) 5,672 8 2,072 769,201 $ 2014 (714,238) (71,094) 277,031 844,527 100,547 9,037 445,810 35,578 197,647 — (63,206) (6,357) 10,570 (6,449) 5,900 1,595 91,922 21,869 (75,171) 22,304 320 3,140 685,472 Weighted-average shares of common stock outstanding - basic Effect of Limited Partner OP Units and dilutive securities(1) Weighted-average shares of common stock outstanding - diluted (2) 931,422,844 24,626,646 956,049,490 903,360,763 26,013,303 929,374,066 793,150,098 44,502,144 837,652,242 AFFO attributable to common stockholders and limited partners per diluted share $ 0.76 $ 0.83 $ 0.82 ____________________________________ (1) Dilutive securities include unvested restricted shares of common stock and unvested restricted stock units. (2) Weighted-average shares for all periods presented exclude the effect of the convertible debt as the Company would expect to settle the debt with cash. 52 The table below presents FFO and AFFO for the Cole Capital segment for the years ended December 31, 2016, 2015 and 2014 (in thousands, except share and per share data). Cole Capital segment: Net loss FFO attributable to common stockholders and limited partners Acquisition related expenses Litigation, merger and other non-routine costs, net of insurance recoveries Impairment of intangible assets Amortization of Management Contracts Deferred tax benefit (1) Equity-based compensation Other amortization and non-cash charges Year Ended December 31, $ 2016 (131,451) $ (131,451) 2015 (187,397) $ (187,397) 2014 (296,674) (296,674) 64 — 120,931 26,171 (10,136) 5,280 5,296 594 — 213,339 25,903 (52,242) 8,828 3,832 3,362 1,969 309,444 68,537 (33,324) 9,521 2,407 65,242 AFFO attributable to common stockholders and limited partners $ 16,155 $ 12,857 $ Weighted-average shares of common stock outstanding - basic Effect of Limited Partner OP Units and dilutive securities(2) Weighted-average shares of common stock outstanding - diluted (3) 931,422,844 24,626,646 903,360,763 26,013,303 793,150,098 44,502,144 956,049,490 929,374,066 837,652,242 AFFO attributable to common stockholders and limited partners per diluted share $ 0.02 $ 0.01 $ 0.08 _________________________________ (1) This adjustment represents the non-current portion of the benefit from income taxes in order to show only the current portion of the provision for or benefit from income taxes as an impact to AFFO. (2) Dilutive securities include unvested restricted shares of common stock and unvested restricted stock units. (3) Weighted-average shares for all periods presented exclude the effect of the convertible debt as the Company would expect to settle the debt with cash. Liquidity and Capital Resources General Our principal liquidity needs for the next twelve months and beyond are to: • fund normal operating expenses; • meet debt service and principal repayment obligations, including balloon payments on maturing debt; • pay dividends; • fund capital expenditures, tenant improvements and leasing costs; • pay litigation costs and expenses; and • fund property acquisitions. We expect to be able to satisfy these obligations using one or more of the following sources: • cash flow from operations; • proceeds from real estate dispositions; • utilization of existing line of credit; • cash and cash equivalents balance; and • issuance of VEREIT debt and equity securities. 53 Universal Shelf Registration In May 2016, VEREIT, Inc. and the OP filed a shelf registration statement with the SEC, which is effective for a term of three years. In accordance with SEC rules, the amount of securities to be issued pursuant to this shelf registration statement was not specified when it was filed and there is no specific dollar limit. The securities covered by this registration statement include (i) common stock, (ii) preferred stock, (iii) debt securities, (iv) depositary shares representing fractional interests in shares of preferred stock, (v) warrants to purchase debt securities, common stock, preferred stock, or depositary shares, and (vi) any combination of these securities. We may periodically offer one or more of these securities in amounts, prices and on terms to be announced when and if these securities are offered. The specifics of any future offerings, along with the use of proceeds of any securities offered, will be described in detail in a prospectus supplement, or other offering materials, at the time of any offering. 2016 Bond Offering and $300.0 million 2016 Term Loan On June 2, 2016, the Operating Partnership closed its senior note offering, consisting of (i) $0.4 billion aggregate principal amount of 4.125% Senior Notes due June 1, 2021 and (ii) $0.6 billion aggregate principal amount of 4.875% Senior Notes due June 1, 2026 and entered into the $300.0 million 2016 Term Loan, as defined in Note 11 – Debt. On July 5, 2016, the Company redeemed all of the $1.3 billion aggregate principal amount of our outstanding 2.000% Senior Notes due February 2017, plus accrued and unpaid interest thereon and the required make-whole premium. Common Stock Offering On August 10, 2016, VEREIT, Inc. issued 69.0 million shares of common stock in a public offering for net proceeds, after underwriting discounts and offering costs, of $702.5 million which were used to repay the entire $300.0 million 2016 Term Loan and in part to repay amounts under the Credit Facility. Continuous Equity Offering Program On September 19, 2016, the Company registered a continuous equity offering program (the “Program”) pursuant to which the Company can offer and sell, from time to time through September 19, 2019 in “at-the-market” offerings or certain other transactions, shares of common stock with an aggregate gross sales price of up to $750.0 million, through its sales agents. The Company intends to use the proceeds from any sale of shares for general corporate purposes, which may include funding potential acquisitions and repurchasing or repaying outstanding indebtedness. As of December 31, 2016, no shares of common stock have been issued pursuant to the Program. Disposition Activity As part of our effort to optimize our real estate portfolio by focusing on holding core assets, during the year ended December 31, 2016, we disposed of 301 properties and one property owned by an unconsolidated joint venture for an aggregate sales price of $1.20 billion, of which our share was $1.14 billion, resulting in consolidated proceeds of $1.00 billion after disposition fees and debt assumptions. We expect to continue to explore opportunities to sell additional properties as we pay off outstanding debt and reduce our borrowings under the Credit Facility, which will reduce our overall leverage and provide us further financial flexibility. Credit Facility Summary and Obligations We, as guarantor, and the Operating Partnership, as borrower, are parties to the Credit Facility with Wells Fargo Bank, National Association, as administrative agent, and the other lenders party thereto. As of December 31, 2016, the Credit Facility allowed for maximum borrowings of $2.8 billion, consisting of a $0.5 billion term loan facility (the “Credit Facility Term Loan”) and a $2.3 billion revolving credit facility. The maximum aggregate dollar amount of letters of credit that may be outstanding at any one time under the Credit Facility is $25.0 million. During the year ended December 31, 2016, the Company repaid all of the outstanding borrowings under its revolving credit facility. Additionally, the Company repaid $0.5 billion of the Credit Facility Term Loan, resulting in the write-off of unamortized deferred financing costs of $4.3 million, which is included in (loss) gain on extinguishment and forgiveness of debt, net in the accompanying consolidated statements of operations. As discussed in Note 12 – Derivatives and Hedging Activities, in connection with the early repayment of a portion of the Credit Facility Term Loan, the Company terminated two of its interest rate swaps, resulting in the reclassification of $3.3 million in accumulated other comprehensive loss to earnings, which is included in loss on derivative instruments, net in the accompanying consolidated statements of operations. The remaining outstanding balance on the Credit Facility Term Loan of $0.5 billion is, in effect, fixed through the use of derivative instruments used to hedge interest rate volatility. Including the spread, which can vary based on the General Partner’s credit rating, the interest rate on this portion was 3.25% at December 31, 2016. As of December 31, 2016, a maximum of $2.3 billion was available to the OP for future borrowings, subject to borrowing availability. 54 The revolving credit facility generally bears interest at an annual rate of London Inter-Bank Offer Rate (“LIBOR”) plus 1.00% to 1.80% or Base Rate plus 0.00% to 0.80% (based upon our then current credit rating). “Base Rate” is defined as the highest of the prime rate, the federal funds rate plus 0.50% or a floating rate based on one month LIBOR, determined on a daily basis. The Credit Facility Term Loan generally bears interest at an annual rate of LIBOR plus 1.15% to 2.05%, or Base Rate plus 0.15% to 1.05% (based upon our then current credit rating). In addition, the Credit Agreement provides the flexibility for interest rate auctions, pursuant to which, at the Company’s election, the Company may request that lenders make competitive bids to provide revolving loans, which competitive bids may be at pricing levels that differ from the foregoing interest rates. The Credit Agreement provides for monthly interest payments under the Credit Facility. In the event of default, at the election of a majority of the lenders (or automatically upon a bankruptcy event of default with respect to the OP or the General Partner), the commitments of the lenders under the Credit Facility will mature, and payment of any unpaid amounts in respect of the Credit Facility will be accelerated. The revolving credit facility and the Credit Facility Term Loan both terminate on June 30, 2018, in each case, unless extended in accordance with the terms of the Credit Agreement. The Credit Agreement provides for a one-year extension option with respect to each of the revolving credit facility and the Credit Facility Term Loan, exercisable at the Company’s election and subject to certain customary conditions, as well as certain customary “amend and extend” provisions. At any time, upon timely notice by the OP and subject to any breakage fees, the OP may prepay borrowings under the Credit Facility (subject to certain limitations applicable to the prepayment of any loans obtained through an interest rate auction, as described above). The OP incurs a fee equal to 0.15% to 0.25% per annum (based upon the General Partner’s then current credit rating) multiplied by the commitments (whether or not utilized) in respect of the revolving credit facility. In addition, the OP incurs customary administrative agent, letter of credit issuance, letter of credit fronting, extension and other fees. Credit Facility Covenants The Credit Facility requires restrictions on corporate guarantees, as well as the maintenance of certain financial covenants. The key financial covenants in the Credit Facility, as defined and calculated per the terms of the Credit Agreement include maintaining the following: Unsecured Credit Facility Key Covenants Required Minimum tangible net worth Ratio of total indebtedness to total asset value Ratio of adjusted EBITDA to fixed charges Ratio of secured indebtedness to total asset value Ratio of unsecured indebtedness to unencumbered asset value Ratio of unencumbered adjusted NOI to unsecured interest expense Minimum unencumbered asset value As of December 31, 2016, the maximum percentage of unencumbered asset value permitted to be attributable to restaurants was 30%. The Company believes that it was in compliance with the financial covenants pursuant to the Credit Agreement and is not restricted from accessing any borrowing availability under the Credit Facility as of December 31, 2016. 55 Corporate Bonds Summary and Obligations As of December 31, 2016, the OP had $2.25 billion aggregate principal amount of Senior Notes outstanding. The indenture governing the Senior Notes requires that the Company be in compliance with certain key financial covenants, including maintaining the following: Corporate Bond Key Covenants Required Limitation on incurrence of total debt Limitation on incurrence of secured debt Debt service coverage ratio Maintenance of total unencumbered assets There were no changes to the financial covenants of our existing Senior Notes during the year ended December 31, 2016. The covenants of our new Senior Notes are materially the same as our existing Senior Notes. As of December 31, 2016, the Company believes that it was in compliance with these financial covenants based on the covenant limits and calculations in place at that time. Convertible Debt Summary and Obligations On July 29, 2013, the Company issued $300.0 million aggregate principal amount of convertible senior notes due 2018 (the “2018 Convertible Notes”) and, pursuant to an over-allotment exercise by the underwriters of such 2018 Convertible Notes offering, issued an additional $10.0 million aggregate principal amount of its 2018 Convertible Notes on August 1, 2013. On December 10, 2013, the Company issued an additional $287.5 million of the 2018 Convertible Notes by reopening the indenture governing the 2018 Convertible Notes. Also on December 10, 2013, the Company issued $402.5 million aggregate principal amount of convertible senior notes due 2020 (the “2020 Convertible Notes and, together with the 2018 Convertible Notes, the “Convertible Notes”). The 2018 Convertible Notes have a weighted average interest rate of 3.00%, a conversion rate of 60.5997 and mature on August 1, 2018 and the 2020 Convertible Notes have a weighted average interest rate of 3.75%, a conversion rate of 66.7249 and mature on December 15, 2020. The Convertible Notes are convertible into cash or shares of the Company’s Common Stock at the Company’s option. There were no changes to the terms of our Convertible Notes during the year ended December 31, 2016. Mortgage Notes Payable and Other Debt Summary and Obligations As of December 31, 2016, we had non-recourse mortgage indebtedness of $2.6 billion, which was collateralized by 619 properties, reflecting a decrease from December 31, 2015 of $409.9 million derived primarily from our disposition activity during the year ended December 31, 2016. Our mortgage indebtedness bore interest at the weighted-average rate of 4.95% per annum and had a weighted-average maturity of 4.6 years. We may in the future incur additional mortgage debt on the properties we currently own or use long-term non-recourse financing to acquire additional properties. On December 30, 2016, the Company received a notice of default from the lender of a non-recourse loan secured by 16 properties, which had an outstanding balance of $11.6 million on the notice date, due to the Company’s non-repayment of the respective loan balance at maturity. The Company and the lender are assessing options in relation to the default. On March 6, 2015, the Company received a notice of default from the lender of a non-recourse loan secured by two properties, which had an outstanding balance of $38.1 million on the notice date, due to the Company’s election not to make a reserve payment required per the loan agreement. The foreclosure sale of the first property securing the loan occurred during the three months ended June 30, 2016. As the loan was outstanding upon the foreclosure of the first property, the Company recorded a loss of $3.4 million in gain (loss) on disposition of real estate and held for sale assets, net in the accompanying consolidated statements of operations for the year ended December 31, 2016. The foreclosure proceedings on the second property that secured the loan were completed during the three months ended September 30, 2016. As a result of the foreclosure sale and deed transfer of both properties securing the loan, the Company recognized a gain on forgiveness of debt of $19.1 million, which is included in (loss) gain on extinguishment and forgiveness of debt, net in the accompanying consolidated statements of operations. 56 Restrictions on Loan Covenants The payment terms of our loan obligations vary. In general, only interest amounts are payable monthly with all unpaid principal and interest due at maturity. Our mortgage loan obligations generally restrict corporate guarantees and require the maintenance of financial covenants, including maintenance of certain financial ratios (such as specified debt to equity and debt service coverage ratios), as well as the maintenance of a minimum net worth. Each loan that has these requirements has specific ratio thresholds that must be met. The mortgage loan agreements contain no dividend restrictions except in the event of default or when a distribution would drive liquidity below the applicable thresholds. At December 31, 2016, the Company believes that it was in compliance with the financial covenants under the mortgage loan agreements, except for the loans in default as described above and in “Note 11 – Debt” to our consolidated financial statements. Other Debt As of December 31, 2016, the Company had a secured term loan from KBC Bank, N.V. with an outstanding principal balance of $20.9 million and remaining unamortized premium of $0.1 million (the “KBC Loan”). The interest coupon on the KBC Loan is fixed at 5.81% annually until its maturity in January 2018. The KBC Loan is non-recourse to the Company, subject to limited non-recourse exceptions. The KBC Loan provides for monthly payments of both principal and interest. The scheduled principal repayments subsequent to December 31, 2016 are $7.7 million and $13.2 million for the years ended 2017 and 2018, respectively. Dividends On November 1, 2016, the Company’s board of directors declared a quarterly cash dividend of $0.1375 per share of common stock (equaling an annualized dividend rate of $0.55 per share) for the fourth quarter of 2016 to stockholders of record as of December 30, 2016, which was paid on January 17, 2017. An equivalent distribution by the Operating Partnership is applicable per OP unit. Our Series F Preferred Stock, as discussed in “Note 16 – Equity” to our consolidated financial statements, will pay cumulative cash dividends at the rate of 6.70% per annum on their liquidation preference of $25.00 per share (equivalent to $1.675 per share on an annual basis). As of December 31, 2016, there were approximately 42.8 million shares of Series F Preferred Stock (and approximately 42.8 million corresponding Series F Preferred Units that were issued to the General Partner) and 86,874 Limited Partner Series F Preferred Units that were issued and outstanding. Contractual Obligations The following is a summary of our contractual obligations as of December 31, 2016 (in thousands): Principal payments - mortgage notes and other debt (1) Interest payments - mortgage notes and other debt (1) (2) (3) Principal payments - Credit Facility Interest payments - Credit Facility (2) (3) Principal payments - corporate bonds Interest payments - corporate bonds Principal payments - convertible debt Interest payments - convertible debt Operating and ground lease commitments Build-to-suit commitments Total ____________________________________ Total Less than 1 year 1-3 years 4-5 years $ 2,650,896 $ 294,774 $ 452,073 $ 665,333 More than 5 years $ 1,238,716 582,710 500,000 24,601 2,250,000 558,737 1,000,000 88,086 310,977 201 124,443 — 16,459 — 91,250 — 33,019 18,774 201 207,956 500,000 8,142 750,000 162,188 597,500 40,644 36,943 — 157,006 93,305 — — 400,000 127,875 402,500 14,423 34,845 — — — 1,100,000 177,424 — — 220,415 — $ 7,966,208 $ 578,920 $2,755,446 $1,801,982 $ 2,829,860 (1) For loans in maturity default, discussed in Note 11 – Debt and Note 22 – Subsequent Events, the payment obligations for future periods are based on an estimated extension of maturity during the first quarter of 2017. (2) As of December 31, 2016, we had $242.2 million of variable rate mortgage notes and $0.5 billion of variable rate debt on the Credit Facility effectively fixed through the use of interest rate swap agreements. We used the effective interest rates fixed under our swap agreements to calculate the debt payment obligations in future periods. (3) Interest payments due in future periods on the $11.3 million of variable rate debt payment obligations were calculated using a forward LIBOR curve. 57 Cash Flow Analysis for the year ended December 31, 2016 Operating Activities – During the year ended December 31, 2016, net cash provided by operating activities decreased $66.5 million to $800.5 million from $867.0 million during the same period in 2015. The decrease was primarily due to a decrease in rental receipts related to the disposition of 529 consolidated properties subsequent to January 1, 2015. This decrease was partially offset by a decrease in interest payments and payments related to the Audit Committee Investigation and related litigation, net of insurance recoveries. Investing Activities – Net cash provided by investing activities for the year ended December 31, 2016 decreased $42.4 million to $890.2 million from $932.6 million during the same period in 2015. The decrease was primarily related to an increase in investments in real estate assets of $63.9 million, an investment in an unconsolidated joint venture of $25.8 million during 2016 and a decrease in uses and refunds of deposits for real estate assets of $35.4 million. These decreases were partially offset by a decrease in real estate development payments of $40.3 million and the receipt of $50.0 million on the Affiliate Lines of Credit, as compared to $10.0 million in 2015. Financing Activities – Net cash used in financing activities of $1.5 billion decreased $643.8 million during the year ended December 31, 2016 from $2.1 billion during the same period in 2015. The decrease was primarily due to the 2016 common stock offering offering resulting in net proceeds, after underwriting discounts and offering costs, of $702.5 million and an increase in proceeds from debt, net of repayments, of $305.6 million, which were partially offset by an increase in distributions paid of $345.0 million. Cash Flow Analysis for the year ended December 31, 2015 Operating Activities – The level of cash flows provided by operating activities is affected by acquisition and transaction costs, the timing of interest payments, as well as the receipt of scheduled rent payments. During the year ended December 31, 2015, net cash provided by operating activities increased $364.1 million to $867.0 million from $502.9 million. The increase was primarily due to an increase in revenue, excluding non-cash adjustments, of $59.2 million, a decrease in merger and other transaction expenses of $87.7 million, a decrease in prepayment fees and penalties relating to debt repayment of $35.9 million and a decrease in the net change in assets and liabilities of $206.4 million. Investing Activities – Net cash provided by investing activities for the year ended December 31, 2015 increased $3.5 billion to $932.6 million from net cash used in investing activities in 2014 of $2.6 billion. The increase in cash flow primarily related to a decrease in cash paid for real estate assets of $3.5 billion and a decrease in cash paid for real estate businesses of $756.2 million, both as a result of a decrease in acquisition activity as compared to the same period in the prior year. The increase was partially offset by a decrease in cash proceeds from the disposition of real estate assets of $589.7 million, driven primarily by the sale of the multi-tenant portfolio in 2014. Financing Activities – Net cash used in financing activities increased $4.5 billion to $2.1 billion during the year ended December 31, 2015 from net cash provided by financing activities of $2.4 billion. The increase was primarily related to a decrease in proceeds from the issuance of corporate bonds of $2.5 billion and an increase in net payments on the Credit Facility of $1.6 billion, combined with a decrease in the proceeds from the issuance of common stock, net of offering costs, of $1.6 billion, all of which related to the fact that the Company raised more capital to fund large acquisitions in the prior period. The increase was partially offset by a decrease in distributions paid of $714.9 million. Cash Flow Analysis for the year ended December 31, 2014 Operating Activities – During the year ended December 31, 2014, net cash provided by operating activities was $502.9 million. Cash flows provided by operating activities during the year ended December 31, 2014 were mainly due to adjusted net income of $806.6 million (net loss of $1.0 billion adjusted for non-cash items including the issuance of OP Units, depreciation and amortization, gain on sale of properties, equity-based compensation, gain on derivative instruments and gain on the early extinguishment of debt totaling $1.8 billion, in the aggregate), offset by a decrease in accounts payable and accrued expenses of $16.3 million, a decrease in prepaid and other assets of $97.1 million and a decrease in deferred rent, derivative and other liabilities of $99.9 million. Investing Activities – Net cash used in investing activities for the year ended December 31, 2014 was $2.6 billion, primarily related to the total cash consideration of $756.2 million for the merger of American Realty Capital Trust IV, Inc. with and into a subsidiary of the OP (the “ARCT IV Merger”), the merger of Cole with and into a wholly owned subsidiary of the Company (the “Cole Merger”) and the merger of CCPT with and into a direct subsidiary of the General Partner (the “CCPT Merger”) and $3.5 billion in the acquisition of 1,107 properties. The net cash used in investing activities was partially offset by the proceeds from the sale of properties of $1.6 billion, combined with the proceeds from the sale of investment securities of $159.8 million. Financing Activities – Net cash provided by financing activities was $2.4 billion during the year ended December 31, 2014 related to proceeds from the issuance of corporate bonds of $2.5 billion, proceeds from mortgage notes payable of $1.0 billion and proceeds from the issuance of common stock of $1.6 billion. These inflows were partially offset by payments on mortgage notes payable of $1.1 billion, total distributions paid of $920.3 million and $116.4 million of deferred financing cost payments. 58 Election as a REIT The General Partner elected to be taxed as a REIT for U.S. federal income tax purposes under Sections 856 through 860 of the Internal Revenue Code commencing with the taxable year ended December 31, 2011. As a REIT, except as discussed below, the General Partner generally is not subject to federal income tax on taxable income that it distributes to its stockholders so long as it distributes at least 90% of its annual taxable income (computed without regard to the deduction for dividends paid and excluding net capital gains). REITs are subject to a number of other organizational and operational requirements. Even if the General Partner maintains its qualification for taxation as a REIT, it may be subject to certain state and local taxes on its income and property, federal income taxes on certain income and excise taxes on its undistributed income. We believe we are organized and operating in such a manner as to qualify to be taxed as a REIT for the taxable year ended December 31, 2016. The Operating Partnership is classified as a partnership for U.S. federal income tax purposes. As a partnership, the Operating Partnership is not a taxable entity for U.S. federal income tax purposes. Instead, each partner in the Operating Partnership is required to take into account its allocable share of the Operating Partnership’s income, gains, losses, deductions and credits for each taxable year. However, the Operating Partnership may be subject to certain state and local taxes on its income and property. Under the LPA, the Operating Partnership is required to conduct business in such a manner as to permit the General partner at all times to qualify as a REIT. The Company conducts substantially all of its Cole Capital segment business activities through a TRS. A TRS is a subsidiary of a REIT that is subject to corporate federal, state and local income taxes, as applicable. The Company’s use of a TRS enables it to engage in certain business activities while complying with the REIT qualification requirements and to retain any income generated by these businesses for reinvestment without the requirement to distribute those earnings. The Company conducts all of its business in the United States, Puerto Rico and Canada and, as a result, it files income tax returns in the U.S. federal jurisdiction, the Canadian federal jurisdiction and various state and local jurisdictions. Certain of the Company’s inter-company transactions that have been eliminated in consolidation for financial accounting purposes are also subject to taxation. Inflation We may be adversely impacted by inflation on any leases that do not contain indexed escalation provisions. However, net leases that require the tenant to pay its allocable share of operating expenses, including common area maintenance costs, real estate taxes and insurance, may reduce our exposure to increases in costs and operating expenses resulting from inflation. Related Party Transactions and Agreements In the past, we entered into certain agreements and paid certain fees or reimbursements to the Former Manager and its affiliates. As of December 31, 2014, as a result of the departure of certain executive officers (one of whom was a director) in the fourth quarter of 2014, the Former Manager and its affiliates were no longer affiliated with us. Accordingly, there have been no related party transactions to report during the years ended December 31, 2016 and 2015 aside from those with the Cole REITs, as further described below. We are contractually responsible for managing the Cole REITs’ affairs on a day-to-day basis, identifying and making acquisitions and investments on the Cole REITs’ behalf, and recommending to each of the Cole REIT’s respective board of directors an approach for providing investors with liquidity. In addition, we distribute the shares of common stock for certain of the Cole REITs and advise them regarding offerings, manage relationships with participating broker-dealers and financial advisors, and provide assistance in connection with compliance matters relating to the offerings. We receive compensation and reimbursement for services relating to the Cole REITs’ offerings and the investment, management and disposition of their respective assets, as applicable. See “Note 18 – Related Party Transactions and Arrangements” to our consolidated financial statements in this report for a further explanation of the various related party transactions, agreements and fees. Off-Balance Sheet Arrangements We have no material off-balance sheet arrangements that have had or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources. 59 Item 7A. Quantitative and Qualitative Disclosures About Market Risk. Market Risk The market risk associated with financial instruments and derivative financial instruments is the risk of loss from adverse changes in market prices or interest rates. Our market risk arises primarily from interest rate risk relating to variable-rate borrowings. To meet our short and long-term liquidity requirements, we borrow funds at a combination of fixed and variable rates. Our interest rate risk management objectives are to limit the impact of interest rate changes in earnings and cash flows and to manage our overall borrowing costs. To achieve these objectives, from time to time, we may enter into interest rate hedge contracts such as swaps, collars and treasury lock agreements in order to mitigate our interest rate risk with respect to various debt instruments. We would not hold or issue these derivative contracts for trading or speculative purposes. We have limited operations in Canada and thus, are not exposed to material foreign currency fluctuations. Interest Rate Risk As of December 31, 2016, our debt included fixed-rate debt, including debt that has interest rates that are fixed with the use of derivative instruments, with a fair value and carrying value of $6.5 billion and $6.4 billion, respectively. Changes in market interest rates on our fixed rate debt impact the fair value of the debt, but they have no impact on interest incurred or cash flow. For instance, if interest rates rise 100 basis points and the fixed rate debt balance remains constant, we expect the fair value of our debt to decrease, the same way the price of a bond declines as interest rates rise. The sensitivity analysis related to our fixed-rate debt assumes an immediate 100 basis point move in interest rates from their December 31, 2016 levels, with all other variables held constant. A 100 basis point increase in market interest rates would result in a decrease in the fair value of our fixed rate debt of $231.0 million. A 100 basis point decrease in market interest rates would result in an increase in the fair value of our fixed-rate debt of $230.6 million. As of December 31, 2016, our debt included variable-rate debt with a fair value and carrying value each of $11.3 million. The sensitivity analysis related to our variable-rate debt assumes an immediate 100 basis point move in interest rates from their December 31, 2016 levels, with all other variables held constant. A 100 basis point increase or decrease in variable interest rates on our variable-rate notes payable would increase or decrease our interest expense by $0.1 million annually. See “Note 11 – Debt” to our consolidated financial statements. As of December 31, 2016, our interest rate swaps had a fair value that resulted in assets of $0.2 million and a liability of $3.5 million. See “Note 12 – Derivatives and Hedging Activities” to our consolidated financial statements for further discussion. As the information presented above includes only those exposures that existed as of December 31, 2016, it does not consider exposures or positions arising after that date. The information presented herein has limited predictive value. Future actual realized gains or losses with respect to interest rate fluctuations will depend on cumulative exposures, hedging strategies employed and the magnitude of the fluctuations. These amounts were determined by considering the impact of hypothetical interest rate changes on our borrowing costs and assume no other changes in our capital structure. Credit Risk Concentrations of credit risk arise when a number of tenants are engaged in similar business activities, or activities in the same geographic region, or have similar economic features that would cause their ability to meet contractual obligations, including those to the Company, to be similarly affected by changes in economic conditions. The Company is subject to tenant, geographic and industry concentrations. Any downturn of the economic conditions in one or more of these tenants, geographies or industries could result in a material reduction of our cash flows or material losses to us. The factors considered in determining the credit risk of our tenants include, but are not limited to: payment history; credit status and change in status (credit ratings for public companies are used as a primary metric); change in tenant space needs (i.e., expansion/downsize); tenant financial performance; economic conditions in a specific geographic region; and industry specific credit considerations. We believe that the credit risk of our portfolio is reduced by the high quality of our existing tenant base, reviews of prospective tenants’ risk profiles prior to lease execution and consistent monitoring of our portfolio to identify potential problem tenants. 60 Item 8. Financial Statements and Supplementary Data. The information required by Item 8 is hereby incorporated by reference to our consolidated financial statements beginning on page F-1 of this document. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. None. Item 9A. Controls and Procedures. I. Discussion of Controls and Procedures of the General Partner For purposes of the discussion in this Part I of Item 9A, the “Company” refers to the General Partner. Evaluation of Disclosure Controls and Procedures We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that are designed to provide reasonable assurance that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, we recognize that no controls and procedures, no matter how well designed and operated, can provide absolute assurance of achieving the desired control objectives. In accordance with Rules 13a-15(b) and 15d-15(b) of the Exchange Act, management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of our disclosure controls and procedures as of December 31, 2016 and determined that the disclosure controls and procedures were effective at a reasonable assurance level as of that date. Management’s Annual Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Internal control over financial reporting is a process to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Because of its inherent limitations, internal control over financial reporting is not intended to provide absolute assurance that a misstatement of our financial statements would be prevented or detected. Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management has concluded that our internal control over financial reporting was effective as of December 31, 2016. The effectiveness of our internal control over financial reporting as of December 31, 2016 has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report in this Annual Report on Form 10-K. Changes in Internal Control Over Financial Reporting No change occurred in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d -15(f) of the Exchange Act) during the three months ended December 31, 2016 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. 61 II. Discussion of Controls and Procedures of the Operating Partnership In the information incorporated by reference into this Part II of Item 9A, the term “Company” refers to the Operating Partnership, except as the context otherwise requires. Evaluation of Disclosure Controls and Procedures We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act that are designed to provide reasonable assurance that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, we recognize that no controls and procedures, no matter how well designed and operated, can provide absolute assurance of achieving the desired control objectives. In accordance with Rules 13a-15(b) and 15d-15(b) of the Exchange Act, management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of our disclosure controls and procedures as of December 31, 2016 and determined that the disclosure controls and procedures were effective at a reasonable assurance level as of that date. Management’s Annual Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Internal control over financial reporting is a process to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Because of its inherent limitations, internal control over financial reporting is not intended to provide absolute assurance that a misstatement of our financial statements would be prevented or detected. Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management has concluded that our internal control over financial reporting was effective as of December 31, 2016. Changes in Internal Control Over Financial Reporting No change occurred in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d -15(f) of the Exchange Act) during the three months ended December 31, 2016 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. 62 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of VEREIT, Inc. Phoenix, AZ We have audited the internal control over financial reporting of VEREIT, Inc. and subsidiaries (the “Company”) as of December 31, 2016, based on criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. A company’s internal control over financial reporting is a process designed by, or under the supervision of, the company’s principal executive and principal financial officers, or persons performing similar functions, and effected by the company’s board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America (“generally accepted accounting principles”). A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2016, based on the criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements and financial statement schedules as of and for the year ended December 31, 2016 of the Company and our report dated February 22, 2017 expressed an unqualified opinion on those consolidated financial statements and financial statement schedules. /s/ DELOITTE & TOUCHE LLP Phoenix, AZ February 22, 2017 Item 9B. Other Information. The following disclosure would have otherwise been filed in a Current Report on Form 8-K under the heading “Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.” 63 Amendment to Employment Letter with William C. Miller Effective February 22, 2017, the Company amended (the “Miller Amendment”) the Employment Letter effective as of February 23, 2016 with William C. Miller (the “Miller Employment Agreement”). Pursuant to the Miller Amendment, the provision in the Miller Employment Agreement regarding a sales management bonus is deleted, and instead, Mr. Miller is eligible to receive a sales management bonus equal to 17 basis points on all capital raised by the Cole REITs sponsored by Cole Capital (excluding capital raised pursuant to each such REIT’s distribution reinvestment plan) but only after the total capital raise for the applicable year exceeds $200 million and only on the amount of capital raised above the $200 million threshold, up to a maximum threshold of $550 million. Except as noted herein, all other provisions of the Miller Employment Agreement remain unchanged. The foregoing description of the Miller Amendment does not purport to be complete and is qualified in its entirety by reference to such amendment a copy of which is attached to this Annual Report on Form 10-K. 64 Item 10. Directors, Executive Officers and Corporate Governance. PART III This information will be contained in our definitive proxy statement for the 2017 Annual Meeting of Stockholders (the “Proxy Statement”), to be filed within 120 days following the end of our fiscal year, and is incorporated herein by reference. Item 11. Executive Compensation. The information required by this Item will be included in the Proxy Statement and is incorporated herein by reference. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. The information required by this Item will be included in the Proxy Statement and is incorporated herein by reference. Item 13. Certain Relationships and Related Transactions, and Director Independence. The information required by this Item will be included in the Proxy Statement and is incorporated herein by reference. Item 14. Principal Accounting Fees and Services. The information required by this Item will be included in the Proxy Statement and is incorporated herein by reference. 65 Item 15. Exhibits and Financial Statement Schedules. Financial Statements PART IV The Financial Statements are included herein at pages F-1 through F-84. Financial Statement Schedules Schedule II - Valuation and Qualifying Accounts is included herein on page F-85. Schedule III - Real Estate and Accumulated Depreciation is included herein on pages F-86 through F-214. Schedule IV - Mortgage Loans Held for Investment is included herein on page F-215. Exhibits The following exhibits are included in this Annual Report on Form 10-K for the fiscal year ended December 31, 2016 (and are numbered in accordance with Item 601 of Regulation S-K): Exhibit No. 2.1 2.2 2.3 2.4 2.4.1 2.4.2 2.5 2.6 2.7 3.1 3.2 3.3 3.4 3.5 3.6 Description Agreement and Plan of Merger by and among VEREIT, Inc., VEREIT Operating Partnership, L.P., Tiger Acquisition LLC, American Realty Capital Trust III, Inc. and American Realty Capital Operating Partnership III, L.P., dated as of December 14, 2012 (Incorporated by reference to the Company’s Current Report on Form 8-K (File No. 001-35263), filed with the SEC on December 17, 2012). Agreement and Plan of Merger, by and among, VEREIT, Inc., VEREIT Operating Partnership, L.P., Safari Acquisition, LLC, CapLease, Inc., CapLease, LP and CLF OP General Partner LLC, dated as of May 28, 2013 (Incorporated by reference to the Company’s Current Report on Form 8-K (File No. 001-35263), filed with the SEC on May 28, 2013). Purchase and Sale Agreement, by and among, CNL APF Partners, LP and Certain Affiliates as Seller Parties, and VEREIT Operating Partnership, L.P., as Purchaser, dated May 31, 2013 (Incorporated by reference to the Company’s Amended Current Report on Form 8-K/A (File No. 001-35263), filed with the SEC on June 7, 2013). Agreement and Plan of Merger, dated as of July 1, 2013, among VEREIT, Inc., American Realty Capital Trust IV, Inc., Thunder Acquisition, LLC, VEREIT Operating Partnership, L.P. and American Realty Capital Operating Partnership IV, L.P. (Incorporated by reference to the Company’s Current Report on Form 8-K (File No. 001-35263), filed with the SEC on July 2, 2013). Amendment dated as of October 6, 2013 to the Agreement and Plan of Merger, dated as of July 1, 2013, by and among VEREIT, Inc., VEREIT Operating Partnership, L.P., Thunder Acquisition, LLC, American Realty Capital Trust IV, Inc. and American Realty Capital Operating Partnership IV, L.P. (Incorporated by reference to the Company’s First Current Report on Form 8-K (File No. 001-35263), filed with the SEC on October 7, 2013). Second Amendment dated as of October 11, 2013 to the Agreement and Plan of Merger, dated as of July 1, 2013, by and among VEREIT, Inc., VEREIT Operating Partnership, L.P., Thunder Acquisition, LLC, American Realty Capital Trust IV, Inc. and American Realty Capital Operating Partnership IV, L.P. (Incorporated by reference as Annex E to the Company’s Final Prospectus filed Pursuant to Rule 424(b)(3) (Registration No. 333-190056), filed with the SEC on December 4, 2013). Equity Interest Purchase Agreement by and between Inland American Real Estate Trust, Inc. and AR Capital, LLC, dated as of August 8, 2013 (Incorporated by reference to the Company’s Amended Current Report on Form 8-K/A (File No. 001-35263), filed with the SEC on September 25, 2013). Purchase and Sale Agreement by and among ARC PADRBPA001, LLC and AR Capital, LLC and the sellers described on schedules thereto, dated as of July 24, 2013 (Incorporated by reference to the Company’s Second Current Report on Form 8- K (File No. 001-35263), filed with the SEC on October 7, 2013). Agreement and Plan of Merger, dated as of October 22, 2013, by and among VEREIT, Inc., Cole Real Estate Investments, Inc. and Clark Acquisition, LLC (Incorporated by reference to the Company’s Current Report on Form 8-K (File No. 001-35263), filed with the SEC on October 23, 2013). Articles of Amendment and Restatement of VEREIT, Inc. (Incorporated by reference to the Company's Pre-Effective Amendment No. 5 to Form S-11 (Registration No. 333-172205), filed with the SEC on July 5, 2011). Articles Supplementary Relating to the Series A Convertible Preferred Stock of VEREIT, Inc., dated May 10, 2012 (Incorporated by reference to the Company's Form 8-K (File No. 001-35263), filed with the SEC on May 15, 2012). Articles Supplementary Relating to the Series B Convertible Preferred Stock of VEREIT, Inc., dated July 24, 2012 (Incorporated by reference to the Company's Form 8-K (File No. 001-35263), filed with the SEC on July 30, 2012). Articles Supplementary for the Series C Convertible Preferred Stock of VEREIT, Inc., dated June 6, 2013 (Incorporated by reference to the Company's Form 8-K (File No. 001-35263), filed with the SEC on June 12, 2013). Articles of Amendment to Articles of Amendment and Restatement of VEREIT, Inc., effective July 2, 2013 (Incorporated by reference to the Company's Form 8-K (File No. 001-35263), filed with the SEC on July 9, 2013). Articles Supplementary for the Series D Cumulative Convertible Preferred Stock of VEREIT, Inc., filed November 8, 2013 (Incorporated by reference to the Company's Form 8-K (File No. 001-35263), filed with the SEC on November 15, 2013). 66 Exhibit No. Description 3.7 3.8 3.9 3.10 3.11 3.12 3.13 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 4.10 4.11 4.12 10.1 10.2 10.3 10.4 Articles of Amendment to Articles of Amendment and Restatement of VEREIT, Inc., effective December 9, 2013 (Incorporated by reference to the Company's Amended Current Report on Form 8-K/A (File No. 001-35263), filed with the SEC on December 20, 2013). Articles Supplementary Relating to the 6.70% Series F Cumulative Redeemable Preferred Stock of VEREIT, Inc., dated January 2, 2014 (Incorporated by reference to the Company's Registration Statement on Form 8-A (File No. 333-190056), filed with the SEC on January 3, 2014). Articles of Amendment to Articles of Amendment and Restatement of VEREIT, Inc., dated July 28, 2015 (Incorporated by reference to the Company's Form 8-K (File No. 001-35263), filed with the SEC on July 28, 2015). Articles Supplementary to Articles of Amendment and Restatement of VEREIT, Inc., dated August 5, 2015 (Incorporated by reference to the Company's Quarterly Report on Form 10-Q (File No. 001-35263), for the quarter ended June 30, 2015 filed with the SEC on August 6, 2015). Amended and Restated Bylaws of VEREIT, Inc., effective as of January 1, 2016 (Incorporated by reference to the Company's Quarterly Report on Form 10-Q (File No. 001-35263), for the quarter ended September 30, 2015 filed with the SEC on November 5, 2015). Certificate of Limited Partnership of VEREIT Operating Partnership, L.P. (Incorporated by reference to the Company's Registration Statement on Form S-4 (Registration No. 333-197780-01), filed with the SEC on August 1, 2014). Amendment to Certificate of Limited Partnership of VEREIT Operating Partnership, L.P., effective July 28, 2015 (Incorporated by reference to the Company's Quarterly Report on Form 10-Q (File No. 001-35263), for the quarter ended June 30, 2015 filed with the SEC on August 6, 2015). Third Amended and Restated Agreement of Limited Partnership of VEREIT Operating Partnership, L.P., effective January 3, 2014 (Incorporated by reference to the Company's Amendment No. 2 to its Annual Report on Form 10-K/A (File No. 001-35263), for the year ended December 31, 2013 filed with the SEC on March 2, 2015). First Amendment to Third Amended and Restated Agreement of Limited Partnership of VEREIT Operating Partnership, L.P., dated January 26, 2015 (Incorporated by reference to the Company's Quarterly Report on Form 10-Q (File No. 001-35263), for the quarter ended June 30, 2015 filed with the SEC on August 6, 2015). Second Amendment to Third Amended and Restated Agreement of Limited Partnership of VEREIT Operating Partnership, L.P., dated July 28, 2015 (Incorporated by reference to the Company's Quarterly Report on Form 10-Q (File No. 001-35263), for the quarter ended June 30, 2015 filed with the SEC on August 6, 2015). Indenture, dated as of July 29, 2013, between American Realty Capital Properties, Inc. and U.S. Bank National Association, as trustee (Incorporated by reference to the Company's Current Report on Form 8-K (File No. 001-35263), filed with the SEC on July 29, 2013). First Supplemental Indenture, dated as of July 29, 2013, between American Realty Capital Properties, Inc. and U.S. Bank National Association, as trustee (Incorporated by reference to the Company's Current Report on Form 8-K (File No. 001-35263), filed with the SEC on July 29, 2013). Form of 3.00% Convertible Senior Notes due 2018 (Incorporated by reference to the Company's Current Report on Form 8- K (File No. 001-35263), filed with the SEC on December 11, 2013). Second Supplemental Indenture, dated as of December 10, 2013, between American Realty Capital Properties, Inc. and U.S. Bank National Association, as trustee (Incorporated by reference to the Company's Current Report on Form 8-K (File No. 001-35263), filed with the SEC on December 11, 2013). Form of 3.75% Convertible Senior Notes due 2020 (Incorporated by reference to the Company's Current Report on Form 8- K (File No. 001-35263), filed with the SEC on December 11, 2013). Indenture, dated as of February 6, 2014, among ARC Properties Operating Partnership, L.P., Clark Acquisition, LLC, the guarantors named therein and U.S. Bank National Association, as trustee (Incorporated by reference to the Company's Current Report on Form 8-K (File No. 001-35263), filed with the SEC on February 7, 2014). Officers’ Certificate, dated as of February 6, 2014 (Incorporated by reference to the Company's Current Report on Form 8-K (File No. 001-35263), filed with the SEC on February 7, 2014). Registration Rights Agreement, dated as of February 6, 2014, among ARC Properties Operating Partnership, L.P., Clark Acquisition, LLC, the guarantors named therein, Barclays Capital Inc. and Citigroup Global Markets Inc. (Incorporated by reference to the Company's Current Report on Form 8-K (File No. 001-35263), filed with the SEC on February 7, 2014). Officer’s Certificate, dated as of June 2, 2016 (Incorporated by reference to the Company’s Current Report on Form 8-K (File No. 001-35263), filed with the SEC on June 3, 2016). Equity Plan, effective September 5, 2011 of VEREIT, Inc. (Incorporated by reference to the Company's Pre-Effective Amendment No. 4 to Form S-11 (Registration No. 333-172205), filed with the SEC on June 13, 2011). First Amendment to VEREIT, Inc.’s Equity Plan, effective November 12, 2012 (Incorporated by reference to the Company's Annual Report on Form 10-K (File No. 001-35263), for the year ended December 31, 2014 filed with the SEC on March 30, 2015). Second Amendment to VEREIT, Inc.’s Equity Plan, effective February 28, 2013 (Incorporated by reference to the Company's Annual Report on Form 10-K (File No. 001-35263), for the year ended December 31, 2014 filed with the SEC on March 30, 2015). Director Stock Plan of VEREIT, Inc. (Incorporated by reference to the Company's Pre-Effective Amendment No. 4 to Form S-11 (Registration No. 333-172205), filed with the SEC on June 13, 2011). 67 Exhibit No. 10.5 10.6 10.7 10.8 10.9 10.10 10.11 10.12 10.13 10.14 10.15 10.16 10.17 10.18 10.19 10.20 10.21 10.22 10.23 10.24 10.25 Description Asset Purchase and Sale Agreement, dated as of July 1, 2013, between VEREIT Operating Partnership, L.P. and American Realty Capital Advisors IV, LLC (Incorporated by reference to the Company's Current Report on Form 8-K (File No. 001-35263), filed with the SEC on July 2, 2013). Contribution and Exchange Agreement, dated as of January 3, 2014, among VEREIT Operating Partnership, L.P., American Realty Capital Trust IV Special Limited Partner, LLC, AREP and ARCT IV Operating Partnership (Incorporated by reference to the Company's Current Report on Form 8-K (File No. 001-35263), filed with the SEC on January 3, 2014). Asset Purchase and Sale Agreement, entered into as of January 8, 2014, by and among VEREIT Operating Partnership, L.P. and ARC Properties Advisors, LLC (Incorporated by reference to the Company's Annual Report on Form 10-K (File No. 001-35263), for the year ended December 31, 2013 filed with the SEC on February 27, 2014). Assignment and Assumption Agreement, dated January 8, 2014, by and between AR Capital, LLC and VEREIT, Inc. (Incorporated by reference to the Company's Annual Report on Form 10-K (File No. 001-35263), for the year ended December 31, 2013 filed with the SEC on February 27, 2014). Agreement of Purchase and Sale, dated as of June 11, 2014, among certain subsidiaries of VEREIT, Inc. party thereto and BRE DDR Retail Holdings III LLC (Incorporated by reference to the Company's Quarterly Report on Form 10-Q (File No. 001-35263), for the quarter ended June 30, 2014 filed with the SEC on July 29, 2014). Amended and Restated Credit Agreement, dated as of June 30, 2014, among VEREIT Operating Partnership, L.P., VEREIT, Inc., lenders party thereto, and Wells Fargo Bank, National Association, as administrative agent (Incorporated by reference to the Company's Quarterly Report on Form 10-Q (File No. 001-35263), for the quarter ended June 30, 2014 filed with the SEC on July 29, 2014). Second Amendment to Credit Agreement, entered into among VEREIT Operating Partnership, L.P., VEREIT, Inc., the lenders party thereto and Wells Fargo Bank, National Association, dated July 31, 2015 (Incorporated by reference to the Company's Quarterly Report on Form 10-Q (File No. 001-35263), for the quarter ended June 30, 2015 filed with the SEC on August 6, 2015). First Amendment to Agreement of Purchase and Sale, dated as of July 18, 2014, among certain subsidiaries of VEREIT, Inc. party thereto and BRE DDR Retail Holdings III LLC (Incorporated by reference to the Company's Quarterly Report on Form 10-Q (File No. 001-35263), for the quarter ended June 30, 2014 filed with the SEC on July 29, 2014). Equity Purchase Agreement by and between VEREIT Operating Partnership, L.P. and RCS Capital Corporation, dated as of September 30, 2014 (Incorporated by reference to the Company's Quarterly Report on Form 10-Q (File No. 001-35263), for the quarter ended September 30, 2014 filed with the SEC on March 2, 2015). Employment Agreement, dated as of January 9, 2015, by and between VEREIT, Inc. and Michael Sodo (Incorporated by reference to the Company's Current Report on Form 8-K (File No. 001-35263), filed with the SEC on January 15, 2015). Employment Agreement, dated as of March 10, 2015, by and between VEREIT, Inc. and Glenn Rufrano (Incorporated by reference to the Company's Current Report on Form 8-K (File No. 001-35263), filed with the SEC on March 16, 2015). Form of Indemnification Agreement (Incorporated by reference to the Company’s Pre-effective Amendment No. 4 to Form S-11 Registration Statement (Registration No. 333-172205) filed with the SEC on June 13, 2011). Form of Indemnification Agreement (Incorporated by reference to the Company's Current Report on Form 8-K (File No. 001-35263), filed with the SEC on March 16, 2015). Amended and Restated Employment Letter, dated as of May 11, 2015, by and between VEREIT, Inc. and Gavin Brandon (Incorporated by reference to the Company's Quarterly Report on Form 10-Q (File No. 001-35263), for the quarter ended June 30, 2015 filed with the SEC on August 6, 2015). Amended and Restated Employee Confidentiality and Non-Competition Agreement, dated May 11, 2015, executed by Gavin Brandon (Incorporated by reference to the Company's Quarterly Report on Form 10-Q (File No. 001-35263), for the quarter ended June 30, 2015 filed with the SEC on August 6, 2015). Employment Agreement, dated as of May 21, 2015, by and between VEREIT, Inc. and Lauren Goldberg (Incorporated by reference to the Company's Quarterly Report on Form 10-Q (File No. 001-35263), for the quarter ended June 30, 2015 filed with the SEC on August 6, 2015). Amendment effective February 23, 2016, to Employment Agreement between VEREIT, Inc. and Lauren Goldberg, as of May 26, 2015 (Incorporated by reference to the Company's Annual Report on Form 10-K for the year ended December 31, 2015 filed with the SEC on February 23, 2016). Separation Agreement and General Release, dated June 10, 2015, by and between VEREIT, Inc., Equity Fund Advisors, Inc. and Michael T. Ezzell (Incorporated by reference to the Company's Quarterly Report on Form 10-Q (File No. 001-35263), for the quarter ended June 30, 2015 filed with the SEC on August 6, 2015). Form of Deferred Stock Unit Award Agreement to be entered into with Non-Executive Directors pursuant to the VEREIT, Inc. Equity Plan (Incorporated by reference to the Company's Quarterly Report on Form 10-Q (File No. 001-35263), for the quarter ended June 30, 2015 filed with the SEC on August 6, 2015). Form of 2015 Time-Based Restricted Stock Unit Award Agreement to be entered into with Employees pursuant to the VEREIT, Inc. Equity Plan (Incorporated by reference to the Company's Quarterly Report on Form 10-Q (File No. 001-35263), for the quarter ended June 30, 2015 filed with the SEC on August 6, 2015). Form of 2015 Performance-Based Restricted Stock Unit Award Agreement to be entered into with Employees pursuant to the VEREIT, Inc. Equity Plan (Incorporated by reference to the Company's Quarterly Report on Form 10-Q (File No. 001-35263), for the quarter ended June 30, 2015 filed with the SEC on August 6, 2015). 68 Exhibit No. Description 10.26 10.27 10.28 10.29 10.30 10.31 10.32 10.33 10.34 Separation Agreement, dated as of October 1, 2015, by and between VEREIT, Inc. and Michael J. Sodo (Incorporated by reference to the Company's Quarterly Report on Form 10-Q (File No. 001-35263), for the quarter ended September 31, 2015 filed with the SEC on November 5, 2015). Employment Letter and Confidentiality and Non-Competition Agreement, effective as of October 5, 2015, by and between VEREIT, Inc. and Michael J. Bartolotta (Incorporated by reference to the Company's Quarterly Report on Form 10-Q (File No. 001-35263), for the quarter ended September 31, 2015 filed with the SEC on November 5, 2015). Form of 2016 Time-Based Restricted Stock Unit Award Agreement to be entered into with executive officers pursuant to the VEREIT, Inc. Equity Plan (Incorporated by reference to the Company's Annual Report on Form 10-K for the year ended December 31, 2015 filed with the SEC on February 23, 2016). Form of 2016 Performance-Based Restricted Stock Unit Award Agreement to be entered into with executive officers pursuant to the VEREIT, Inc. Equity Plan (Incorporated by reference to the Company's Annual Report on Form 10-K for the year ended December 31, 2015 filed with the SEC on February 23, 2016). Form of 2016 Time-Based Restricted Stock Unit Award Agreement to be entered into with other employees pursuant to the VEREIT, Inc. Equity Plan (Incorporated by reference to the Company's Annual Report on Form 10-K for the year ended December 31, 2015 filed with the SEC on February 23, 2016). Form of 2016 Performance-Based Restricted Stock Unit Award Agreement to be entered into with other employees pursuant to the VEREIT, Inc. Equity Plan (Incorporated by reference to the Company's Annual Report on Form 10-K for the year ended December 31, 2015 filed with the SEC on February 23, 2016). Amended and Restated Employment Letter, dated as of February 23, 2016, by and between VEREIT, Inc. and Paul McDowell (Incorporated by reference to the Company's Annual Report on Form 10-K for the year ended December 31, 2015 filed with the SEC on February 23, 2016). Amended and Restated Employment Letter, dated as of February 23, 2016, by and between VEREIT, Inc. and Thomas Roberts (Incorporated by reference to the Company's Annual Report on Form 10-K for the year ended December 31, 2015 filed with the SEC on February 23, 2016). Amended and Restated Employment Letter, dated as of February 23, 2016, by and between VEREIT, Inc. and William C. Miller (Incorporated by reference to the Company's Annual Report on Form 10-K for the year ended December 31, 2015 filed with the SEC on February 23, 2016). 10.35* Amendment effective February 22, 2017, to the Amended and Restated Employment Letter, dated as of February 23, 2016, by and between VEREIT, Inc. and William C. Miller. 10.36 12.1* 12.2* 21.1* 23.1* 23.2* 23.3* 23.4* 31.1* 31.2* 31.3* 31.4* 32.1** 32.2** 32.3** 32.4** Credit Agreement, dated as of June 2, 2016, among VEREIT Operating Partnership, L.P., VEREIT, Inc. the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent (Incorporated by reference to the Company's Current Report on Form 8-K (File No. 001-35263), filed with the SEC on June 3, 2016). VEREIT Inc. Consolidated Ratio of Earnings to Fixed Charges VEREIT Operating Partnership, L.P. Consolidated Ratio of Earnings to Fixed Charges List of Subsidiaries. Consent of Deloitte & Touche LLP. Consent of Deloitte & Touche LLP. Consent of Grant Thornton LLP. Consent of Grant Thornton LLP. Certification of the Chief Executive Officer of VEREIT, Inc. pursuant to Securities Exchange Act Rule 13a-14(a) or 15d-14 (a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Certification of the Chief Financial Officer of VEREIT, Inc. pursuant to Securities Exchange Act Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Certification of the Chief Executive Officer of VEREIT, Inc., the sole general partner of VEREIT Operating Partnership, L.P., pursuant to Securities Exchange Act Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Certification of the Chief Financial Officer of VEREIT, Inc., the sole general partner of VEREIT Operating Partnership, L.P., pursuant to Securities Exchange Act Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Written statements of the Chief Executive Officer of VEREIT, Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Written statements of the Chief Financial Officer of VEREIT, Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Written statements of the Chief Executive Officer of VEREIT, Inc., the sole general partner of VEREIT Operating Partnership, L.P., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Written statements of the Chief Financial Officer of VEREIT, Inc., the sole general partner of VEREIT Operating Partnership, L.P., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 69 Exhibit No. 101.INS* 101.SCH* 101.CAL* 101.DEF* 101.LAB* 101.PRE* Description XBRL Instance Document. XBRL Taxonomy Extension Schema Document. XBRL Taxonomy Extension Calculation Linkbase Document. XBRL Taxonomy Extension Definition Linkbase Document. XBRL Taxonomy Extension Label Linkbase Document. XBRL Taxonomy Extension Presentation Linkbase Document. _____________________________ * Filed herewith ** In accordance with Item 601(b)(32) of Regulation S-K, this Exhibit is not deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section. Such certifications will not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference. Item 16. Form 10-K Summary. Not Applicable 70 Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, each registrant has duly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned thereunto duly authorized. SIGNATURES VEREIT, INC. By: /s/ Michael J. Bartolotta Michael J. Bartolotta Executive Vice President and Chief Financial Officer (Principal Financial Officer) VEREIT OPERATING PARTNERSHIP, L.P. By: VEREIT, Inc., its sole general partner /s/ Michael J. Bartolotta By: Michael J. Bartolotta Executive Vice President and Chief Financial Officer (Principal Financial Officer) Dated: February 22, 2017 Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Form 10-K has been signed below by the following persons on behalf of each registrant and in the capacities and on the dates indicated. Name Capacity * /s/ Glenn J. Rufrano Chief Executive Officer Glenn J. Rufrano (Principal Executive Officer and Director) Date February 22, 2017 /s/ Michael J. Bartolotta Executive Vice President and Chief Financial Officer February 22, 2017 Michael J. Bartolotta (Principal Financial Officer) /s/ Gavin B. Brandon Gavin B. Brandon Senior Vice President and Chief Accounting Officer (Principal Accounting Officer) Director, Non-Executive Chairman February 22, 2017 /s/ Bruce D. Frank Bruce D. Frank /s/ Hugh R. Frater Hugh R. Frater /s/ David B. Henry David B. Henry /s/ Mark S. Ordan Mark S. Ordan Director Director Director /s/ Eugene A. Pinover Director Eugene A. Pinover /s/ Julie G. Richardson Julie G. Richardson _________________________________ Director February 22, 2017 February 22, 2017 February 22, 2017 February 22, 2017 February 22, 2017 February 22, 2017 * Each person is signing in his or her capacity as an officer and/or director of VEREIT, Inc., which is the sole general partner of VEREIT Operating Partnership, L.P. 71  INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Financial Statements Reports of Independent Registered Public Accounting Firms Consolidated Balance Sheets of VEREIT, Inc. as of December 31, 2016 and December 31, 2015 Consolidated Statements of Operations of VEREIT, Inc. for the Years Ended December 31, 2016, 2015 and 2014 Consolidated Statements of Comprehensive Income (Loss) of VEREIT, Inc. for the Years Ended December 31, 2016, 2015 and 2014 Consolidated Statements of Changes in Equity of VEREIT, Inc. for the Years Ended December 31, 2016, 2015 and 2014 Consolidated Statements of Cash Flows of VEREIT, Inc. for the Years Ended December 31, 2016, 2015 and 2014 Consolidated Balance Sheets of VEREIT Operating Partnership, L.P. as of December 31, 2016 and December 31, 2015 Consolidated Statements of Operations of VEREIT Operating Partnership, L.P. for the Years Ended December 31, 2016, 2015 and 2014 Consolidated Statements of Comprehensive Income (Loss) of VEREIT Operating Partnership, L.P. for the Years Ended December 31, 2016, 2015 and 2014 Consolidated Statements of Changes in Equity of VEREIT Operating Partnership, L.P. for the Years Ended December 31, 2016, 2015 and 2014 Consolidated Statements of Cash Flows of VEREIT Operating Partnership, L.P. for the Years Ended December 31, 2016, 2015 and 2014 Notes to Consolidated Financial Statements Schedule II – Valuation and Qualifying Accounts Schedule III – Real Estate and Accumulated Depreciation Schedule IV – Mortgage Loans Held For Investment Page F-2 F-6 F-7 F-8 F-9 F-11 F-13 F-14 F-15 F-16 F-18 F-20 F-85 F-86 F-215 F-1 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of VEREIT, Inc. Phoenix, AZ We have audited the accompanying consolidated balance sheets of VEREIT, Inc. and subsidiaries (the "Company") as of December 31, 2016 and 2015, and the related consolidated statements of operations, comprehensive income (loss), changes in equity, and cash flows for each of the two years in the period ended December 31, 2016. Our audits also included the financial statement schedules listed in the Index at Item 15. These consolidated financial statements and financial statement schedules are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedules based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the company and subsidiaries as of December 31, 2016 and 2015, and the results of their operations and their cash flows for each of the two years in the period ended December 31, 2016, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company's internal control over financial reporting as of December 31, 2016, based on Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 22, 2017 expressed an unqualified opinion on the Company's internal control over financial reporting. /s/ DELOITTE & TOUCHE LLP Phoenix, Arizona February 22, 2017 F-2 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Partners of VEREIT Operating Partnership, L.P. Phoenix, AZ We have audited the accompanying consolidated balance sheets of VEREIT Operating Partnership, L.P. and subsidiaries (the “Operating Partnership”) as of December 31, 2016 and 2015, and the related consolidated statements of operations, comprehensive income (loss), changes in equity, and cash flows for each of the two years in the period ended December 31, 2016. Our audits also included the financial statement schedules listed in the Index at Item 15. These consolidated financial statements and financial statement schedules are the responsibility of the Operating Partnership’s management. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedules based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Operating Partnership is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Operating Partnership’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of VEREIT Operating Partnership, L.P and subsidiaries as of December 31, 2016 and 2015, and the results of their operations and their cash flows for each of the two years in the period ended December 31, 2016, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein. /s/ DELOITTE & TOUCHE LLP Phoenix, Arizona February 22, 2017 F-3 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Board of Directors and Shareholders VEREIT, Inc. We have audited the consolidated balance sheet of VEREIT, Inc. (a Maryland corporation) and subsidiaries (formerly American Realty Capital Properties, Inc.) (the “Company”) as of December 31, 2014 (not presented herein), and the related statements of operations, comprehensive loss, changes in equity, and cash flows for the year then ended. Our audit of these consolidated financial statements included the financial statement schedules listed in the Index to Consolidated Financial Statements. These financial statements and financial statement schedules are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and financial statement schedules based on our audit. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of VEREIT, Inc. and subsidiaries as of December 31, 2014, and the results of their operations and their cash flows for the year ended December 31, 2014 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the related financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein. /s/ GRANT THORNTON LLP Phoenix, Arizona March 30, 2015, except for Note 2 in the previously filed 2015 financial statements, which is not presented herein regarding the adoption of ASU 2015-03, Interest - Imputation of Interest (Subtopic 835-30), as to which the date is February 23, 2016 F-4 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Board of Directors of General Partner and Limited Partners VEREIT Operating Partnership, L.P. and subsidiaries We have audited the consolidated balance sheet of VEREIT Operating Partnership, L.P. (a Delaware partnership) and subsidiaries (formerly ARC Properties Operating Partnership, L.P.) (collectively the “Operating Partnership”) as of December 31, 2014 (not presented herein), and the related consolidated statements of operations, comprehensive loss, changes in equity and cash flows for the year then ended. Our audit of these consolidated financial statements included the financial statement schedules listed in the Index to Consolidated Financial Statements. These financial statements and financial statement schedules are the responsibility of the Operating Partnership’s management. Our responsibility is to express an opinion on these financial statements and financial statement schedules based on our audit. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Operating Partnership’s internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Operating Partnership’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of VEREIT Operating Partnership, L.P. and subsidiaries as of December 31, 2014, and the results of their operations and their cash flows for the year ended December 31, 2014 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the related financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein. /s/ GRANT THORNTON LLP Phoenix, Arizona March 30, 2015, except for Note 2 in the previously filed 2015 financial statements, which is not presented herein regarding the adoption of ASU 2015-03, Interest - Imputation of Interest (Subtopic 835-30), as to which the date is February 23, 2016 F-5 VEREIT, INC. CONSOLIDATED BALANCE SHEETS (In thousands, except for share and per share data) December 31, 2016 December 31, 2015 ASSETS Real estate investments, at cost: Land Buildings, fixtures and improvements Intangible lease assets Total real estate investments, at cost Less: accumulated depreciation and amortization Total real estate investments, net Investment in unconsolidated entities Investment in direct financing leases, net Investment securities, at fair value Mortgage notes receivable, net Cash and cash equivalents Restricted cash Intangible assets, net Rent and tenant receivables and other assets, net Goodwill Due from affiliates Real estate assets held for sale, net Total assets LIABILITIES AND EQUITY Mortgage notes payable and other debt, net Corporate bonds, net Convertible debt, net Credit facility, net Below-market lease liabilities, net Accounts payable and accrued expenses Deferred rent, derivative and other liabilities Distributions payable Due to affiliates Total liabilities Commitments and contingencies (Note 15) Preferred stock, $0.01 par value, 100,000,000 shares authorized and 42,834,138 issued and outstanding as of each of December 31, 2016 and December 31, 2015 Common stock, $0.01 par value, 1,500,000,000 shares authorized and 974,146,650 and 904,884,394 issued and outstanding as of December 31, 2016 and December 31, 2015, respectively Additional paid-in-capital Accumulated other comprehensive loss Accumulated deficit Total stockholders’ equity Non-controlling interests Total equity Total liabilities and equity $ $ $ $ $ $ $ 2,895,625 10,644,296 2,044,521 15,584,442 2,331,643 13,252,799 46,077 39,455 47,215 22,764 256,452 45,018 24,609 330,705 1,462,203 21,349 38,928 15,587,574 2,671,106 2,226,224 973,340 496,578 224,023 146,137 68,039 162,578 16 6,968,041 3,120,653 11,445,690 2,218,378 16,784,721 1,778,597 15,006,124 56,824 46,312 53,304 24,238 69,103 59,767 50,779 303,637 1,656,374 60,633 18,771 17,405,866 3,111,985 2,536,333 962,894 1,448,590 251,692 151,877 87,490 140,816 230 8,691,907 428 428 9,741 12,640,171 (2,556) (4,200,423) 8,447,361 172,172 8,619,533 15,587,574 $ 9,049 11,931,768 (2,025) (3,415,233) 8,523,987 189,972 8,713,959 17,405,866 The accompanying notes are an integral part of these statements. F-6 VEREIT, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except for per share data) Revenues: Rental income Direct financing lease income Operating expense reimbursements Cole Capital revenue Total revenues Operating expenses: Cole Capital reallowed fees and commissions Acquisition related (1) Litigation, merger and other non-routine costs, net of insurance recoveries (2) Property operating Management fees to affiliates General and administrative (3) Depreciation and amortization Impairments Total operating expenses Operating income (loss) Other (expense) income: Interest expense (Loss) gain on extinguishment and forgiveness of debt, net Other income, net Reserve for loan loss Equity in income (loss) and gain on disposition of unconsolidated entities Loss on derivative instruments, net Total other expenses, net Loss before taxes and real estate dispositions Gain (loss) on disposition of real estate and held for sale assets, net Loss before taxes Benefit from income taxes Net loss Net loss attributable to non-controlling interests (4) Net loss attributable to the General Partner Basic and diluted net loss per share attributable to common stockholders Distributions declared per common share _______________________________________________ Year Ended December 31, 2016 2015 2014 $ 1,227,937 $ 1,339,787 $ 1,271,574 2,055 105,455 119,376 1,454,823 23,174 1,321 3,884 144,428 — 136,608 788,186 303,751 2,720 98,628 114,882 1,556,017 16,195 6,243 33,628 130,855 — 149,066 847,611 305,094 3,603 100,522 203,558 1,579,257 66,228 38,940 199,616 137,741 13,888 167,428 916,003 409,991 1,401,352 53,471 1,488,692 67,325 1,949,835 (370,578) (317,376) (358,392) (771) 6,035 — 9,783 (1,191) (303,520) (250,049) 45,524 (204,525) 3,701 4,812 6,439 (15,300) 9,092 (1,460) (354,809) (287,484) (72,311) (359,795) 36,303 (452,648) (21,869) 88,596 — (76) (10,570) (396,567) (767,145) (277,031) (1,044,176) 33,264 (200,824) (323,492) (1,010,912) 4,961 7,139 33,727 (195,863) $ (316,353) $ (977,185) (0.29) $ 0.55 $ (0.43) $ 0.28 $ (1.36) 1.03 $ $ $ (1) (2) (3) Includes $1.7 million of expenses paid to affiliates of the Former Manager (as defined in Note 1 – Organization) for the year ended December 31, 2014. No such expenses were incurred during the years ended December 31, 2016 and 2015. Includes $137.8 million of expenses paid to affiliates of the Former Manager (as defined in Note 1 – Organization) for the year ended December 31, 2014. No such expenses were incurred during the years ended December 31, 2016 and 2015. Includes $16.1 million of expenses paid to affiliates of the Former Manager (as defined in Note 1 – Organization) for the year ended December 31, 2014. No such expenses were incurred during the years ended December 31, 2016 and 2015. (4) Represents net loss attributable to limited partners and consolidated joint venture partners. The accompanying notes are an integral part of these statements. F-7 VEREIT, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (In thousands) Net loss Other comprehensive loss: Unrealized loss on interest rate derivatives Reclassification of previous unrealized loss on interest rate derivatives into net loss Unrealized (loss) gain on investment securities, net Reclassification of previous unrealized loss (gain) on investment securities into net loss as other income, net Total other comprehensive loss Total comprehensive loss Comprehensive loss attributable to non-controlling interests (1) Total comprehensive loss attributable to the General Partner _______________________________________________ (1) Represents loss attributable to limited partners and consolidated joint venture partners. Year Ended December 31, 2016 2015 2014 $ (200,824) $ (323,492) $ (1,010,912) (7,685) (15,694) (16,448) 9,397 (2,271) — (559) 11,706 (997) 110 (4,875) 9,446 9,716 (7,652) (4,938) (201,383) 4,989 (196,394) $ (328,367) 7,261 (321,106) $ (1,015,850) 33,727 (982,123) $ The accompanying notes are an integral part of these statements. F-8 y t i u q E l a t o T - n o N g n i l l o r t n o C s t s e r e t n I - k c o t S l a t o T ’ s r e d l o h y t i u q E d e t a l u m u c c A t i c i f e D d e t a l u m u c c A r e h t O e v i s n e h e r p m o C ) s s o l ( e m o c n I l a n o i t i d d A k c o t S n o m m o C k c o t S d e r r e f e r P n I - d i a P l a t i p a C r a P e u l a V r e b m u N s e r a h S f o r a P e u l a V r e b m u N s e r a h S f o 8 2 2 , 9 2 2 , 2 $ 8 9 7 , 5 5 1 $ 0 3 4 , 3 7 0 , 2 $ ) 7 5 9 , 7 7 8 ( $ 6 6 6 , 7 $ 7 0 9 , 0 4 9 , 2 $ 2 9 3 , 2 $ 5 2 7 , 4 3 2 , 9 3 2 2 2 4 $ 7 4 5 , 9 9 1 , 2 4 . C N I , T I E R E V Y T I U Q E N I S E G N A H C F O S T N E M E T A T S D E T A D I L O S N O C ) a t a d e r a h s r o f t p e c x e , s d n a s u o h t n I ( 3 6 2 , 0 3 9 , 8 — 3 6 2 , 0 3 9 , 8 ) 6 4 0 , 6 1 ( 6 4 0 , 6 1 — — ) 0 9 6 , 7 ( 1 6 8 , 1 3 8 5 4 , 4 ) 7 7 3 , 9 1 8 ( 4 8 4 , 2 5 1 ) 8 1 3 , 6 3 ( ) 5 3 3 , 5 ( ) 2 2 7 , 8 9 ( 2 8 9 6 6 7 , 4 2 ) 0 2 4 , 8 ( ) 7 7 6 , 2 1 ( — — — 0 0 6 , 1 4 8 4 , 2 5 1 ) 8 1 3 , 6 3 ( — — 2 8 9 6 6 7 , 4 2 ) 0 2 4 , 8 ( 7 7 6 , 2 1 ) 0 9 6 , 7 ( 1 6 2 , 0 3 8 5 4 , 4 ) 7 7 3 , 9 1 8 ( ) 7 7 3 , 9 1 8 ( — — ) 5 3 3 , 5 ( ) 2 2 7 , 8 9 ( — — — — — ) 5 3 3 , 5 ( ) 2 2 7 , 8 9 ( — — — — — — — — — — — — — — — — — — — — — — — — 5 3 0 , 6 1 1 7 6 , 2 1 ) 5 8 6 , 7 ( 7 2 2 , 0 3 8 5 4 , 4 — — — — — — — — — — 1 1 — ) 5 ( 4 3 — — — — — — — — — — — — — — — — — — — — — — 1 5 3 , 8 0 1 , 1 — ) 4 6 6 , 1 5 5 ( 1 0 7 , 3 3 4 , 3 0 4 6 , 3 2 9 , 8 3 2 6 , 6 8 1 3 , 5 0 3 , 2 6 6 — — 6 — — — — — — — — — — — — — — — — — — — — — — — — — — — — 1 9 5 , 4 3 6 ) 2 1 9 , 0 1 0 , 1 ( ) 7 2 7 , 3 3 ( ) 5 8 1 , 7 7 9 ( ) 5 8 1 , 7 7 9 ( ) 8 3 9 , 4 ( — ) 8 3 9 , 4 ( — ) 8 3 9 , 4 ( 0 3 3 , 2 8 3 , 9 $ 2 4 4 , 8 2 2 $ 8 8 8 , 3 5 1 , 9 $ ) 6 7 5 , 8 7 7 , 2 ( $ 8 2 7 , 2 $ 3 5 2 , 0 2 9 , 1 1 $ 5 5 0 , 9 $ 1 3 4 , 0 3 5 , 5 0 9 8 2 4 $ 8 3 1 , 4 3 8 , 2 4 ) 7 2 2 , 2 ( 0 0 5 , 4 1 ) 4 6 7 ( ) 6 7 4 , 8 4 2 ( ) 4 9 5 , 5 4 ( ) 0 1 4 ( ) 2 9 8 , 1 7 ( 9 5 8 , 4 1 ) 5 7 8 , 4 ( ) 2 9 4 , 3 2 3 ( — — — — ) 4 9 5 , 5 4 ( — ) 4 7 4 ( 9 5 8 , 4 1 ) 9 3 1 , 7 ( ) 2 2 1 ( ) 7 2 2 , 2 ( 0 0 5 , 4 1 ) 4 6 7 ( — — — ) 6 7 4 , 8 4 2 ( ) 6 7 4 , 8 4 2 ( — ) 0 1 4 ( — ) 0 1 4 ( — — ) 8 1 4 , 1 7 ( ) 8 1 4 , 1 7 ( ) 3 5 3 , 6 1 3 ( ) 3 5 3 , 6 1 3 ( — — — — — — — — — ) 3 5 7 , 4 ( — ) 3 5 7 , 4 ( ) 5 2 2 , 2 ( 4 0 5 , 4 1 ) 4 6 7 ( — — — — — — — ) 2 ( ) 4 ( — — — — — — — — — — — — — — — — ) 4 1 4 , 8 6 2 ( ) 3 2 6 , 7 7 3 ( — — — — — — — — — — — — — — — — — — — — 9 5 9 , 3 1 7 , 8 $ 2 7 9 , 9 8 1 $ 7 8 9 , 3 2 5 , 8 $ ) 3 3 2 , 5 1 4 , 3 ( $ ) 5 2 0 , 2 ( $ 8 6 7 , 1 3 9 , 1 1 $ 9 4 0 , 9 $ 4 9 3 , 4 8 8 , 4 0 9 8 2 4 $ 8 3 1 , 4 3 8 , 2 4 — ) 2 5 6 , 4 ( 8 2 7 , 0 1 5 7 6 6 7 4 , 2 0 7 — ) 9 5 1 ( — — 5 7 6 9 5 1 ) 2 5 6 , 4 ( 8 2 7 , 0 1 — 6 7 4 , 2 0 7 — — — — — — — — — — 9 5 1 ) 7 4 6 , 4 ( 1 2 7 , 0 1 — — ) 5 ( 7 — 9 - F — 0 5 4 , 5 1 ) 1 6 2 , 1 8 4 ( 7 6 0 , 8 2 7 6 8 7 , 1 0 7 0 9 6 0 0 0 , 0 0 0 , 9 6 — — — — — — — — — — d e r r e f e r P F s e i r e S o t s t i n U P O d e r r e f e r P f o n o i s r e v n o C k c o t s n o m m o c o t s t i n U P O n o m m o C f o n o i s r e v n o C k c o t S n o i t a g i l b o x a t e l t t e s o t k c o t s n o m m o c f o s e s a h c r u p e R ) 1 ( t e n , k c o t s n o m m o c f o e c n a u s s I 4 1 0 2 , 1 y r a u n a J , e c n a l a B s r e d l o h t s e r e t n i g n i l l o r t n o c - n o n o t s n o i t u b i r t s i D s e i t i r u c e s g n i t a p i c i t r a p o t s n o i t u b i r t s i D s r e d l o h e r a h s d e r r e f e r p o t s n o i t u b i r t s i D s r e d l o h t s e r e t n i g n i l l o r t n o c - n o n m o r f s n o i t u b i r t n o C r e g r e M e l o C n i d e n i a t e r s t s e r e t n i g n i l l o r t n o c - n o N k c o t s n o m m o c n o d e r a l c e d s n o i t u b i r t s i D s t i n U P O f o e c n a u s s I t e n , n o i t a s n e p m o c d e s a b - y t i u q E t i f e n e b x a t s s e c x E n o i t a g i l b o x a t e l t t e s o t k c o t s n o m m o c f o s e s a h c r u p e R n o i t a s n e p m o c d e s a b - y t i u q e m o r f l l a f t r o h s x a T k c o t s n o m m o c n o d e r a l c e d s n o i t u b i r t s i D s r e d l o h t s e r e t n i g n i l l o r t n o c - n o n o t s n o i t u b i r t s i D t e n , n o i t a s n e p m o c d e s a b - y t i u q E s e i t i r u c e s g n i t a p i c i t r a p o t s n o i t u b i r t s i D s r e d l o h e r a h s d e r r e f e r p o t s n o i t u b i r t s i D t s e r e t n i e r u t n e v t n i o j d e t a d i l o s n o c f o n o i t i s o p s i D n o i t a g i l b o x a t e l t t e s o t k c o t s n o m m o c f o s e s a h c r u p e R k c o t s n o m m o c o t s t i n U P O f o n o i s r e v n o C s r e d l o h t s e r e t n i g n i l l o r t n o c - n o n m o r f s n o i t u b i r t n o C t e n , n o i t a s n e p m o c d e s a b - y t i u q E 5 1 0 2 , 1 3 r e b m e c e D , e c n a l a B t e n , k c o t s n o m m o c f o e c n a u s s I s s o l e v i s n e h e r p m o c r e h t O s s o l t e N 4 1 0 2 , 1 3 r e b m e c e D , e c n a l a B s s o l e v i s n e h e r p m o c r e h t O s t i n U P O f o n o i t p m e d e R s s o l t e N . C N I , T I E R E V ) d e u n i t n o C ( – Y T I U Q E N I S E G N A H C F O S T N E M E T A T S D E T A D I L O S N O C ) a t a d e r a h s r o f t p e c x e , s d n a s u o h t n I ( d e t a l u m u c c A r e h t O e v i s n e h e r p m o C ) s s o l ( e m o c n I l a n o i t i d d A n I - d i a P l a t i p a C r a P e u l a V r e b m u N s e r a h S f o r a P e u l a V r e b m u N s e r a h S f o k c o t S n o m m o C k c o t S d e r r e f e r P — ) 2 9 4 ( ) 2 9 8 , 1 7 ( — ) 4 4 1 ( — ) 3 8 1 , 3 1 ( ) 3 8 1 , 3 1 ( — ) 2 9 4 ( — ) 2 9 4 ( ) 8 4 7 , 1 7 ( ) 8 4 7 , 1 7 ( — ) 4 8 3 ( ) 4 2 8 , 0 0 2 ( ) 1 6 9 , 4 ( ) 3 6 8 , 5 9 1 ( ) 3 6 8 , 5 9 1 ( y t i u q E l a t o T s t s e r e t n I - n o N g n i l l o r t n o C - k c o t S l a t o T ’ s r e d l o h y t i u q E d e t a l u m u c c A t i c i f e D ) 3 0 7 , 6 1 5 ( $ — $ ) 3 0 7 , 6 1 5 ( $ ) 3 0 7 , 6 1 5 ( $ — — — — — — ) 9 5 5 ( ) 8 2 ( ) 1 3 5 ( — ) 1 3 5 ( 3 3 5 , 9 1 6 , 8 $ 2 7 1 , 2 7 1 $ 1 6 3 , 7 4 4 , 8 $ ) 3 2 4 , 0 0 2 , 4 ( $ ) 6 5 5 , 2 ( $ 1 7 1 , 0 4 6 , 2 1 $ 1 4 7 , 9 $ 0 5 6 , 6 4 1 , 4 7 9 8 2 4 $ 8 3 1 , 4 3 8 , 2 4 r e g a n a M r e m r o F e h t f o s e t a i l i f f a o t d e u s s i e r e w s t n u o m a h c u s o N . 4 1 0 2 , 1 3 r e b m e c e D d e d n e r a e y e h t r o f ) n o i t a z i n a g r O – 1 e t o N n i d e n i f e d s a ( r e g a n a M r e m r o F e h t f o s e t a i l i f f a o t d e u s s i n o i l l i m 2 . 2 $ s e d u l c n I ) 1 ( . 5 1 0 2 d n a 6 1 0 2 , 1 3 r e b m e c e D d e d n e s r a e y e h t g n i r u d . s t n e m e t a t s e s e h t f o t r a p l a r g e t n i n a e r a s e t o n g n i y n a p m o c c a e h T 0 1 - F $ — — — — 4 8 3 — — $ — — — — — — — $ — — — — — — — — — — — — — — $ — — — — — — — s r e d l o h t i n u d n a s r e d l o h e r a h s d e r r e f e r p o t s n o i t u b i r t s i D s r e d l o h t s e r e t n i g n i l l o r t n o c - n o n o t s n o i t u b i r t s i D k c o t s n o m m o c n o d e r a l c e d s n o i t u b i r t s i D s e i t i r u c e s g n i t a p i c i t r a p o t s n o i t u b i r t s i D d e s a b - y t i u q e r o f t n e m t s u j d a t c e f f e - e v i t a l u m u C s e r u t i e f r o f n o i t a s n e p m o c _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ 6 1 0 2 , 1 3 r e b m e c e D , e c n a l a B s s o l e v i s n e h e r p m o c r e h t O s s o l t e N VEREIT, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Cash flows from operating activities: Net loss Adjustments to reconcile net loss to net cash provided by operating activities: Issuance of OP Units Depreciation and amortization (Gain) loss on real estate assets and joint venture, net Impairments Reserve for loan loss Equity-based compensation Equity in income of unconsolidated entities Distributions from unconsolidated entities Loss on derivative instruments (Gain) on investment securities Loss (gain) on extinguishment and forgiveness of debt, net Note receivable issued in legal settlement Changes in assets and liabilities: Investment in direct financing leases Rent and tenant receivables and other assets, net Due from affiliates Accounts payable and accrued expenses Deferred rent, derivative and other liabilities Due to affiliates Net cash provided by operating activities Cash flows from investing activities: Investments in real estate assets Acquisition of real estate businesses, net of cash acquired Capital expenditures and leasing costs Real estate developments Principal repayments received from borrowers Investments in unconsolidated entities Proceeds from disposition of real estate and joint ventures Investment in leasehold improvements and other assets Proceeds from sale of investments and other assets Deposits for real estate assets Uses and refunds of deposits for real estate assets Line of credit advances to affiliates Line of credit repayments from affiliates Investment in mortgage notes receivable Change in restricted cash Net cash provided by (used in) investing activities Cash flows from financing activities: Proceeds from mortgage notes payable Payments on mortgage notes payable and other debt, including extinguishment costs Proceeds from credit facility Payments on credit facility Proceeds from corporate bonds Payments on corporate bonds, including extinguishment costs Payments of deferred financing costs Proceeds from 2016 Term Loan Repayment of 2016 Term Loan Redemption of Series D Preferred Stock Repurchases of common stock to settle tax obligations Proceeds from the issuance of Common Stock, net of underwriters’ discount Payments of equity issuance costs F-11 Year Ended December 31, 2016 2015 2014 $ (200,824) $ (323,492) $ (1,010,912) — 806,548 (55,722) 303,751 — 10,728 415 4,013 1,191 — 771 — 3,976 (52,626) (416) (3,323) (17,740) (214) 800,528 (100,194) — (16,568) (17,411) 5,417 (25,777) 1,000,700 (2,259) — (17,856) 13,305 (10,300) 50,000 — 11,136 890,193 3,112 (333,409) 1,033,000 (1,993,000) 1,000,000 (1,311,203) (19,872) 300,000 (300,000) — (4,652) 702,765 (280) — 866,549 65,582 305,094 15,300 14,500 (2,361) 11,352 1,460 (65) (4,812) — 2,035 (62,356) 25,489 (999) (45,934) (329) 867,013 (36,319) — (18,569) (57,682) 6,921 — 1,009,107 (1,911) 392 (16,542) 48,702 (10,000) 10,000 — (1,504) 932,595 1,445 (184,504) 60,000 (1,784,000) — — (2,436) — — — (2,227) — — 92,884 1,007,164 277,031 409,991 — 31,861 77 8,335 10,570 (6,357) (14,012) (15,300) 1,597 (97,125) (32,821) (16,279) (99,930) (43,887) 502,887 (3,539,906) (756,232) (34,687) (72,515) 77,614 (2,500) 1,598,767 (11,890) 159,752 (265,372) 347,971 (125,000) 81,100 (2,952) (8,606) (2,554,456) 1,010,219 (1,255,506) 5,824,000 (5,918,800) 2,545,760 — (116,373) — — (316,126) (7,690) 1,656,000 (60,955) VEREIT, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS – (Continued) (In thousands) Contributions from non-controlling interest holders Distributions paid Windfall tax benefits related to equity-based compensation Net cash (used in) provided by financing activities Net change in cash and cash equivalents Cash and cash equivalents, beginning of period Cash and cash equivalents, end of period Year Ended December 31, 2015 2014 2016 675 (580,508) — (1,503,372) 187,349 69,103 256,452 $ — (235,494) — (2,147,216) (347,608) 416,711 69,103 $ $ 982 (950,414) 4,458 2,415,555 363,986 52,725 416,711 The accompanying notes are an integral part of these statements. F-12 VEREIT OPERATING PARTNERSHIP, L.P. CONSOLIDATED BALANCE SHEETS (In thousands, except for unit data) December 31, 2016 December 31, 2015 ASSETS Real estate investments, at cost: Land Buildings, fixtures and improvements Intangible lease assets Total real estate investments, at cost Less: accumulated depreciation and amortization Total real estate investments, net Investment in unconsolidated entities Investment in direct financing leases, net Investment securities, at fair value Mortgage notes receivable, net Cash and cash equivalents Restricted cash Intangible assets, net Rent and tenant receivables and other assets, net Goodwill Due from affiliates Real estate assets held for sale, net Total assets LIABILITIES AND EQUITY Mortgage notes payable and other debt, net Corporate bonds, net Convertible debt, net Credit facility, net Below-market lease liabilities, net Accounts payable and accrued expenses Deferred rent, derivative and other liabilities Distributions payable Due to affiliates Total liabilities Commitments and contingencies (Note 15) General Partner's preferred equity, 42,834,138 General Partner Preferred Units issued and outstanding as of each of December 31, 2016 and December 31, 2015 General Partner's common equity, 974,146,650 and 904,884,394 General Partner OP Units issued and outstanding as of December 31, 2016 and December 31, 2015, respectively Limited Partner's preferred equity, 86,874 Limited Partner Preferred Units issued and outstanding as of each of December 31, 2016 and December 31, 2015 Limited Partner's common equity, 23,748,347 and 23,763,797 Limited Partner OP Units issued and outstanding as of December 31, 2016 and December 31, 2015, respectively Total partners’ equity Non-controlling interests Total equity Total liabilities and equity $ $ $ $ $ $ $ 2,895,625 10,644,296 2,044,521 15,584,442 2,331,643 13,252,799 46,077 39,455 47,215 22,764 256,452 45,018 24,609 330,705 1,462,203 21,349 38,928 15,587,574 2,671,106 2,226,224 973,340 496,578 224,023 146,137 68,039 162,578 16 6,968,041 3,120,653 11,445,690 2,218,378 16,784,721 1,778,597 15,006,124 56,824 46,312 53,304 24,238 69,103 59,767 50,779 303,637 1,656,374 60,633 18,771 17,405,866 3,111,985 2,536,333 962,894 1,448,590 251,692 151,877 87,490 140,816 230 8,691,907 853,821 925,569 7,593,540 7,598,418 3,171 3,315 166,598 8,617,130 2,403 8,619,533 15,587,574 $ 184,800 8,712,102 1,857 8,713,959 17,405,866 The accompanying notes are an integral part of these statements. F-13 VEREIT OPERATING PARTNERSHIP, L.P. CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except for per unit data) Revenues: Rental income Direct financing lease income Operating expense reimbursements Cole Capital revenue Total revenues Operating expenses: Cole Capital reallowed fees and commissions Acquisition related (1) Litigation, merger and other non-routine costs, net of insurance recoveries (2) Property operating Management fees to affiliates General and administrative (3) Depreciation and amortization Impairments Total operating expenses Operating income (loss) Other (expense) income: Interest expense (Loss) gain on extinguishment and forgiveness of debt, net Other income, net Reserve for loan loss Equity in income (loss) and gain on disposition of unconsolidated entities Loss on derivative instruments, net Total other expenses, net Loss before taxes and real estate dispositions Gain (loss) on disposition of real estate and held for sale assets, net Loss before taxes Benefit from income taxes Net loss Net loss (income) attributable to non-controlling interests (4) Net loss attributable to the OP Basic and diluted net loss per unit attributable to common unitholders Distributions declared per common unit _______________________________________________ Year Ended December 31, 2016 2015 2014 $ 1,227,937 $ 1,339,787 $ 1,271,574 2,055 105,455 119,376 1,454,823 23,174 1,321 3,884 144,428 — 136,608 788,186 303,751 2,720 98,628 114,882 1,556,017 16,195 6,243 33,628 130,855 — 149,066 847,611 305,094 3,603 100,522 203,558 1,579,257 66,228 38,940 199,616 137,741 13,888 167,428 916,003 409,991 1,401,352 53,471 1,488,692 67,325 1,949,835 (370,578) (317,376) (358,392) (771) 6,035 — 9,783 (1,191) (303,520) (250,049) 45,524 (204,525) 3,701 4,812 6,439 (15,300) 9,092 (1,460) (354,809) (287,484) (72,311) (359,795) 36,303 (452,648) (21,869) 88,596 — (76) (10,570) (396,567) (767,145) (277,031) (1,044,176) 33,264 (200,824) (323,492) (1,010,912) 14 (1,274) 154 (200,810) $ (324,766) $ (1,010,758) (0.29) $ 0.55 $ (0.43) $ 0.28 $ (1.36) 1.03 $ $ $ (1) (2) (3) Includes $1.7 million of expenses paid to affiliates of the Former Manager (as defined in Note 1 – Organization) for the year ended December 31, 2014. No such expenses were incurred during the years ended December 31, 2016 and 2015. Includes $137.8 million of expenses paid to affiliates of the Former Manager (as defined in Note 1 – Organization) for the year ended December 31, 2014. No such expenses were incurred during the years ended December 31, 2016 and 2015. Includes $16.1 million of expenses paid to affiliates of the Former Manager (as defined in Note 1 – Organization) for the year ended December 31, 2014. No such expenses were incurred during the years ended December 31, 2016 and 2015. (4) Represents loss (income) attributable to consolidated joint venture partners. The accompanying notes are an integral part of these statements. F-14 VEREIT OPERATING PARTNERSHIP, L.P. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (In thousands) Year Ended December 31, 2016 2015 2014 $ (200,824) $ (323,492) (1,010,912) (7,685) (15,694) (16,448) 9,397 (2,271) — (559) (201,383) 14 11,706 (997) 110 (4,875) 9,446 9,716 (7,652) (4,938) (328,367) (1,274) (1,015,850) 154 (329,641) $ (1,015,696) Net loss Other comprehensive loss: Unrealized loss on interest rate derivatives Reclassification of previous unrealized loss on interest rate derivatives into net loss Unrealized (loss) gain on investment securities, net Reclassification of previous unrealized loss (gain) on investment securities into net loss as other income, net Total other comprehensive loss Total comprehensive loss Comprehensive loss (income) attributable to non-controlling interests (1) Total comprehensive loss attributable to the OP $ (201,369) $ _______________________________________________ (1) Represents loss (income) attributable to consolidated joint venture partners. The accompanying notes are an integral part of these statements. F-15 l a t i p a C l a t o T - n o N g n i l l o r t n o C s t s e r e t n I l a t o T ' s r e n t r a P l a t i p a C l a t i p a C f o s t i n U r e b m u N l a t i p a C f o s t i n U r e b m u N l a t i p a C f o s t i n U r e b m u N l a t i p a C f o s t i n U r e b m u N r e n t r a P d e t i m L i r e n t r a P l a r e n e G r e n t r a P d e t i m L i r e n t r a P l a r e n e G s t i n U n o m m o C s t i n U d e r r e f e r P Y T I U Q E N I S E G N A H C F O S T N E M E T A T S D E T A D I L O S N O C ) a t a d t i n u r o f t p e c x e , s d n a s u o h t n I ( . . P L , P I H S R E N T R A P G N I T A R E P O T I E R E V 8 2 2 , 9 2 2 , 2 $ 7 6 5 $ 1 6 6 , 8 2 2 , 2 $ 3 8 0 , 9 3 1 $ 4 7 2 , 2 3 8 , 7 1 3 2 1 , 8 1 0 , 1 $ 5 2 7 , 4 3 2 , 9 3 2 6 6 4 , 6 1 $ 5 6 4 , 1 2 7 9 8 9 , 4 5 0 , 1 $ , 7 4 5 9 9 1 2 4 , 7 4 7 , 2 8 0 , 9 4 8 4 , 2 5 1 7 9 2 , 6 5 9 , 7 3 6 2 , 0 3 9 , 8 8 1 3 , 5 0 3 , 2 6 6 — ) 6 4 0 , 6 1 ( ) 1 5 3 , 8 0 1 , 1 ( 6 4 0 , 6 1 1 5 3 , 8 0 1 , 1 — — — — — — — — — ) 0 9 6 , 7 ( 1 6 8 , 1 3 8 5 4 , 4 7 4 7 , 2 8 0 , 9 — — — — — — — — ) 0 9 6 , 7 ( 1 6 8 , 1 3 8 5 4 , 4 — — — 0 0 6 , 1 ) 2 2 7 , 8 9 ( 2 8 9 6 6 7 , 4 2 ) 0 2 4 , 8 ( — 2 8 9 — 6 6 7 , 4 2 — — ) 2 2 7 , 8 9 ( — — — ) 0 3 0 , 1 6 8 ( ) 2 6 4 , 2 ( ) 8 6 5 , 8 5 8 ( ) 6 5 8 , 3 3 ( ) 0 2 4 , 8 ( ) 0 2 4 , 8 ( ) 3 2 4 , 6 1 9 ( ) 8 3 9 , 4 ( — ) 8 3 9 , 4 ( ) 0 7 1 ( ) 2 1 9 , 0 1 0 , 1 ( ) 4 5 1 ( ) 8 5 7 , 0 1 0 , 1 ( ) 3 7 5 , 3 3 ( — — ) 8 6 7 , 4 ( ) 5 8 1 , 7 7 9 ( — — — — — — — — ) 0 9 6 , 7 ( 1 6 2 , 0 3 8 5 4 , 4 ) 2 1 7 , 4 2 8 ( ) 9 2 6 , 7 2 ( — — — — — — — — — — — ) 4 6 6 , 1 5 5 ( 1 0 7 , 3 3 4 , 3 — — — — ) 4 1 4 ( — — — — — — — — — — — — — — — — — — — ) 9 7 6 , 0 7 ( — — — — — — — — — — — — — — — — — ) 7 7 6 , 2 1 ( ) 1 9 5 , 4 3 6 ( 7 7 6 , 2 1 1 9 5 , 4 3 6 0 3 3 , 2 8 3 , 9 $ 9 9 6 , 3 2 $ 1 3 6 , 8 5 3 , 9 $ 2 0 1 , 1 0 2 $ 7 9 7 , 3 6 7 , 3 2 7 6 1 , 7 5 1 , 8 $ 1 3 4 , 0 3 5 , 5 0 9 5 7 3 , 3 $ 4 7 8 , 6 8 7 8 9 , 6 9 9 $ , 8 3 1 4 3 8 2 4 , ) 7 2 2 , 2 ( 0 0 5 , 4 1 ) 4 6 7 ( — — — ) 7 2 2 , 2 ( 0 0 5 , 4 1 ) 4 6 7 ( — — — ) 4 9 8 , 4 9 2 ( ) 5 7 9 , 7 3 ( ) 9 1 9 , 6 5 2 ( ) 9 1 6 , 7 ( ) 8 7 4 , 1 7 ( 9 5 8 , 4 1 ) 5 7 8 , 4 ( ) 2 9 4 , 3 2 3 ( — — 9 5 8 , 4 1 4 7 2 , 1 — ) 8 7 4 , 1 7 ( — — ) 5 7 8 , 4 ( ) 0 7 2 ( ) 6 6 7 , 4 2 3 ( ) 3 1 4 , 8 ( — — — — — — — — ) 7 2 2 , 2 ( 0 0 5 , 4 1 ) 4 6 7 ( ) 0 0 3 , 9 4 2 ( — — ) 5 0 6 , 4 ( ) 3 5 3 , 6 1 3 ( — — — — — — ) 4 1 4 , 8 6 2 ( ) 3 2 6 , 7 7 3 ( — — — — ) 0 6 ( — — — — — — — — — — — — — — — — — — ) 8 1 4 , 1 7 ( — — — — — — — — 9 5 9 , 3 1 7 , 8 $ 7 5 8 , 1 $ 2 0 1 , 2 1 7 , 8 $ 0 0 8 , 4 8 1 $ 7 9 7 , 3 6 7 , 3 2 8 1 4 , 8 9 5 , 7 $ 4 9 3 , 4 8 8 , 4 0 9 5 1 3 , 3 $ 4 7 8 , 6 8 9 6 5 , 5 2 9 $ 8 3 1 , 4 3 8 , 2 4 6 7 4 , 2 0 7 — ) 2 5 6 , 4 ( 8 2 7 , 0 1 5 7 6 — — — — 5 7 6 — ) 9 5 1 ( ) 0 5 4 , 5 1 ( 9 5 1 0 5 4 , 5 1 — ) 2 5 6 , 4 ( 8 2 7 , 0 1 — — — — — — — ) 2 5 6 , 4 ( 8 2 7 , 0 1 — ) 1 6 2 , 1 8 4 ( 7 6 0 , 8 2 7 6 7 4 , 2 0 7 — — 6 7 4 , 2 0 7 0 0 0 , 0 0 0 , 9 6 — — — — — 6 1 - F — — — — — — — — — — — — — — — s t i n U P O d e r r e f e r P s ' r e n t r a P l a r e n e G o t s t i n U P O d e r r e f e r P ' s r e n t r a P d e t i i m L f o n o i s r e v n o C x a t e l t t e s o t s t i n U P O n o m m o C f o n o i t a g i l b o s e s a h c r u p e R t e n , n o i t a s n e p m o c d e s a b - y t i u q E t i f e n e b x a t s s e c x E - n o n d n a s P I T L , s t i n U P O n o m m o C o t s n o i t u b i r t s i D s t s e r e t n i g n i l l o r t n o c s r e d l o h t s e r e t n i g n i l l o r t n o c - n o n m o r f s n o i t u b i r t n o C r e g r e M e l o C n i d e n i a t e r s t s e r e t n i g n i l l o r t n o c - n o N s t i n U P O d e r r e f e r P o t s n o i t u b i r t s i D x a t e l t t e s o t s t i n U P O n o m m o C f o s e s a h c r u p e R n o i t a g i l b o n o i t a s n e p m o c d e s a b - y t i u q e m o r f l l a f t r o h s x a T - n o n d n a s t i n U P O n o m m o C o t s n o i t u b i r t s i D s t s e r e t n i g n i l l o r t n o c s t i n U P O d e r r e f e r P o t s n o i t u b i r t s i D t e n , n o i t a s n e p m o c d e s a b - y t i u q E t s e r e t n i e r u t n e v t n i o j d e t a d i l o s n o c f o n o i t i s o p s i D t e n , s t i n U P O n o m m o C f o e c n a u s s I 5 1 0 2 , 1 3 r e b m e c e D , e c n a l a B s s o l e v i s n e h e r p m o c r e h t O e m o c n i ) s s o l ( t e N 4 1 0 2 , 1 3 r e b m e c e D , e c n a l a B s s o l e v i s n e h e r p m o c r e h t O s t i n U P O f o n o i t p m e d e R s s o l t e N s t i n U P O n o m m o C ' s r e n t r a P d e t i i m L f o n o i s r e v n o C x a t e l t t e s o t s t i n U P O n o m m o C f o s e s a h c r u p e R n o i t a g i l b o s t i n U P O n o m m o C s ' r e n t r a P l a r e n e G o t t e n , n o i t a s n e p m o c d e s a b - y t i u q E s r e d l o h t s e r e t n i g n i l l o r t n o c - n o n m o r f s n o i t u b i r t n o C s t i n U P O n o m m o C s ' r e n t r a P l a r e n e G o t s t i n U P O n o m m o C ' s r e n t r a P d e t i i m L f o n o i s r e v n o C ) 1 ( t e n , s t i n U P O n o m m o C f o e c n a u s s I 4 1 0 2 , 1 y r a u n a J , e c n a l a B l a t i p a C l a t o T - n o N g n i l l o r t n o C s t s e r e t n I l a t o T ' s r e n t r a P l a t i p a C r e n t r a P d e t i m L i r e n t r a P l a r e n e G r e n t r a P d e t i m L i r e n t r a P l a r e n e G s t i n U n o m m o C s t i n U d e r r e f e r P ) d e u n i t n o C ( – Y T I U Q E N I S E G N A H C F O S T N E M E T A T S D E T A D I L O S N O C ) a t a d t i n u r o f t p e c x e , s d n a s u o h t n I ( l a t i p a C f o s t i n U r e b m u N l a t i p a C f o s t i n U r e b m u N l a t i p a C f o s t i n U r e b m u N l a t i p a C f o s t i n U r e b m u N . . P L , P I H S R E N T R A P G N I T A R E P O T I E R E V ) 9 5 5 ( ) 2 9 8 , 1 7 ( ) 4 2 8 , 0 0 2 ( — ) 4 1 ( — ) 2 9 8 , 1 7 ( — ) 9 5 5 ( ) 8 2 ( ) 0 1 8 , 0 0 2 ( ) 7 4 9 , 4 ( ) 8 7 3 , 0 3 5 ( $ ) 5 1 1 ( $ ) 3 6 2 , 0 3 5 ( $ ) 8 6 0 , 3 1 ( $ — — — — $ ) 5 9 1 , 7 1 5 ( $ — ) 1 3 5 ( ) 3 6 8 , 5 9 1 ( — — — — — ) 4 4 1 ( — — $ — — — — — — ) 8 4 7 , 1 7 ( — $ — — — — 3 3 5 , 9 1 6 , 8 $ 3 0 4 , 2 $ 0 3 1 , 7 1 6 , 8 $ 8 9 5 , 6 6 1 $ 7 4 3 , 8 4 7 , 3 2 0 4 5 , 3 9 5 , 7 $ 0 5 6 , 6 4 1 , 4 7 9 1 7 1 , 3 $ 4 7 8 , 6 8 1 2 8 , 3 5 8 $ 8 3 1 , 4 3 8 , 2 4 - n o n d n a s t i n U P O n o m m o C o t s n o i t u b i r t s i D s r e d l o h t s e r e t n i g n i l l o r t n o c s t i n U P O d e r r e f e r P o t s n o i t u b i r t s i D 6 1 0 2 , 1 3 r e b m e c e D , e c n a l a B s s o l e v i s n e h e r p m o c r e h t O s s o l t e N r e g a n a M r e m r o F e h t f o s e t a i l i f f a o t d e u s s i e r e w s t n u o m a h c u s o N . 4 1 0 2 , 1 3 r e b m e c e D d e d n e r a e y e h t r o f ) n o i t a z i n a g r O – 1 e t o N n i d e n i f e d s a ( r e g a n a M r e m r o F e h t f o s e t a i l i f f a o t d e u s s i n o i l l i m 2 . 2 $ s e d u l c n I ) 1 ( . 5 1 0 2 d n a 6 1 0 2 , 1 3 r e b m e c e D d e d n e s r a e y e h t g n i r u d _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ . s t n e m e t a t s e s e h t f o t r a p l a r g e t n i n a e r a s e t o n g n i y n a p m o c c a e h T 7 1 - F VEREIT OPERATING PARTNERSHIP, L.P. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Cash flows from operating activities: Net loss Adjustments to reconcile net loss to net cash provided by operating activities: Issuance of OP Units Depreciation and amortization (Gain) loss on real estate assets and joint venture, net Impairments Reserve for loan loss Equity-based compensation Equity in income of unconsolidated entities Distributions from unconsolidated entities Loss on derivative instruments (Gain) on investment securities Loss (gain) on extinguishment and forgiveness of debt, net Note receivable issued in legal settlement Changes in assets and liabilities: Investment in direct financing leases Rent and tenant receivables and other assets, net Due from affiliates Accounts payable and accrued expenses Deferred rent, derivative and other liabilities Due to affiliates Net cash provided by operating activities Cash flows from investing activities: Investments in real estate assets Acquisition of real estate businesses, net of cash acquired Capital expenditures and leasing costs Real estate developments Principal repayments received from borrowers Investments in unconsolidated entities Proceeds from disposition of real estate and joint venture Investment in leasehold improvements and other assets Proceeds from sale of investments and other assets Deposits for real estate assets Uses and refunds of deposits for real estate assets Line of credit advances to affiliates Line of credit repayments from affiliates Investment in mortgage notes receivable Change in restricted cash Net cash provided by (used in) investing activities Cash flows from financing activities: Proceeds from mortgage notes payable Payments on mortgage notes payable and other debt, including extinguishment costs Proceeds from credit facility Payments on credit facility Proceeds from corporate bonds Payments on corporate bonds, including extinguishment costs Payments of deferred financing costs Proceeds from 2016 Term Loan Repayment of 2016 Term Loan Redemption of Series D Preferred Stock Repurchases of common units to settle tax obligations Proceeds from the issuance of Common Units, net of underwriters’ discount Payments of equity issuance costs F-18 Year Ended December 31, 2016 2015 2014 $ (200,824) $ (323,492) (1,010,912) — 806,548 (55,722) 303,751 — 10,728 415 4,013 1,191 — 771 — 3,976 (52,626) (416) (3,323) (17,740) (214) 800,528 (100,194) — (16,568) (17,411) 5,417 (25,777) 1,000,700 (2,259) — (17,856) 13,305 (10,300) 50,000 — 11,136 890,193 3,112 (333,409) 1,033,000 (1,993,000) 1,000,000 (1,311,203) (19,872) 300,000 (300,000) — (4,652) 702,765 (280) — 866,549 65,582 305,094 15,300 14,500 (2,361) 11,352 1,460 (65) (4,812) — 2,035 (62,356) 25,489 (999) (45,934) (329) 867,013 (36,319) — (18,569) (57,682) 6,921 — 1,009,107 (1,911) 392 (16,542) 48,702 (10,000) 10,000 — (1,504) 932,595 1,445 (184,504) 60,000 (1,784,000) — — (2,436) — — — (2,227) — — 92,884 1,007,164 277,031 409,991 — 31,861 77 8,335 10,570 (6,357) (14,012) (15,300) 1,597 (97,125) (32,821) (16,279) (99,930) (43,887) 502,887 (3,539,906) (756,232) (34,687) (72,515) 77,614 (2,500) 1,598,767 (11,890) 159,752 (265,372) 347,971 (125,000) 81,100 (2,952) (8,606) (2,554,456) 1,010,219 (1,255,506) 5,824,000 (5,918,800) 2,545,760 — (116,373) — — (316,126) (7,690) 1,656,000 (60,955) Table of Contents VEREIT OPERATING PARTNERSHIP, L.P. CONSOLIDATED STATEMENTS OF CASH FLOWS – (Continued) (In thousands) Contributions from non-controlling interest holders Distributions paid Windfall tax benefits related to equity-based compensation Net cash (used in) provided by financing activities Net change in cash and cash equivalents Cash and cash equivalents, beginning of period Cash and cash equivalents, end of period Year Ended December 31, 2015 2014 2016 675 (580,508) — (1,503,372) 187,349 69,103 256,452 $ — (235,494) — (2,147,216) (347,608) 416,711 69,103 $ $ 982 (950,414) 4,458 2,415,555 363,986 52,725 416,711 The accompanying notes are an integral part of these statements. F-19 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2016 Note 1 – Organization VEREIT® is a Maryland corporation, incorporated on December 2, 2010, that qualified as a real estate investment trust (“REIT”) for U.S. federal income tax purposes beginning in the taxable year ended December 31, 2011. VEREIT Operating Partnership, L.P. (together with its subsidiaries, the “Operating Partnership” or the “OP”), is a Delaware limited partnership of which the General Partner is the sole general partner. VEREIT’s common stock, par value $0.01 per share (“Common Stock”), and its 6.70% Series F Cumulative Redeemable Preferred Stock, par value $0.01 per share (“Series F Preferred Stock”) trade on the New York Stock Exchange (“NYSE”) under the trading symbols, “VER” and “VER PRF,” respectively. As used herein, the terms the “Company,” “we,” “our” and “us” refer to VEREIT, together with its consolidated subsidiaries, including the OP. The Company is a full-service real estate operating company with investment management capabilities that operates through two reportable segments, its real estate investment (“REI”) segment and its investment management segment, Cole Capital® (“Cole Capital”), as further discussed in Note 3 – Segment Reporting. Through the REI segment, the Company owns and actively manages a diversified portfolio of retail, restaurant, office and industrial real estate properties subject to long-term net leases with creditworthy tenants. The Company actively manages its portfolio considering a number of metrics including property type, concentration and key economic factors for appropriate balance and diversity. Through the Cole Capital segment, the Company is responsible for raising capital for and managing the affairs of the Cole REITs® (as defined in Note 3 – Segment Reporting) on a day-to-day basis, identifying and making acquisitions and investments on the Cole REITs’ behalf, and recommending to the respective board of directors of each of the Cole REITs an approach for providing investors with liquidity. Cole Capital receives compensation and reimbursement for performing these services. To support both reportable segments, the Company employs a shared services model pursuant to which its personnel are integral in providing, among other things, transactional and operational functions to the Company’s owned portfolio and the Cole REITs. Substantially all of the REI segment’s operations are conducted through the OP. VEREIT is the sole general partner and holder of 97.6% of the common equity interests in the OP as of December 31, 2016 with the remaining 2.4% of the common equity interests owned by unaffiliated investors and certain former directors, officers and employees of ARC Properties Advisors, LLC (the “Former Manager”). Under the limited partnership agreement of the OP, as amended (the “LPA”), after holding units of limited partner interests in the OP (“OP Units”) for a period of one year, unless an earlier redemption is otherwise consented to by VEREIT, holders of OP Units have the right to redeem the OP Units for the cash value of a corresponding number of shares of VEREIT’s Common Stock or, at the option of VEREIT, a corresponding number of shares of VEREIT’s Common Stock. The remaining rights of the holders of OP Units are limited, however, and do not include the ability to replace the General Partner or to approve the sale, purchase or refinancing of the OP’s assets. Substantially all of the Cole Capital segment’s operations are conducted through Cole Capital Advisors, Inc. (“CCA”), an Arizona corporation and a wholly owned subsidiary of the OP. CCA is treated as a taxable REIT subsidiary (“TRS”) under Section 856 of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”). The actions of the OP and its relationship with the General Partner are governed by the LPA. The General Partner does not have any significant assets other than its investment in the OP. Therefore, the assets and liabilities of the General Partner and the OP are substantially the same. Additionally, pursuant to the LPA, all administrative expenses and expenses associated with the formation, continuity, existence and operation of the General Partner incurred by the General Partner on the OP’s behalf shall be treated as expenses of the OP. Further, when the General Partner issues any equity instrument that has been approved by the General Partner’s board of directors, the LPA requires the OP to issue to the General Partner equity instruments with substantially similar terms, to protect the integrity of the Company’s umbrella partnership REIT structure, pursuant to which each holder of interests in the OP has a proportionate economic interest in the OP reflecting its capital contributions thereto. OP Units issued to the General Partner are referred to as General Partner OP Units. OP Units issued to parties other than the General Partner are referred to as Limited Partner OP Units. The LPA also provides that the OP issue debt with terms and provisions consistent with debt issued by the General Partner. The LPA will be amended to provide for the issuance of any additional class of equivalent equity instruments to the extent the General Partner’s board of directors authorizes the issuance of any new class of equity securities. Prior to January 8, 2014, the Company was externally managed by ARC Properties Advisors, LLC (the “Former Manager”) on a day-to-day basis, with the exception of certain acquisition, accounting and portfolio management activities which were performed by the Company’s employees. In August 2013, the General Partner’s board of directors determined that it was in the best interests of the Company and its stockholders to become self-managed, and the Company completed its transition to self- management on January 8, 2014. F-20 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2016 – (Continued) Note 2 – Summary of Significant Accounting Policies Basis of Accounting The consolidated financial statements of the Company presented herein include the accounts of the General Partner and its consolidated subsidiaries, including the OP. All intercompany transactions have been eliminated upon consolidation. The financial statements are prepared on the accrual basis of accounting in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). Principles of Consolidation and Basis of Presentation The consolidated financial statements include the accounts of the Company and its subsidiaries and consolidated joint venture arrangements (the “Consolidated Joint Ventures”). The portions of the Consolidated Joint Ventures not owned by the Company are presented as non-controlling interests in VEREIT’s and the OP’s consolidated balance sheets, statements of operations, statements of comprehensive income (loss) and statements of changes in equity. In addition, as described in Note 1 – Organization, certain third parties have been issued OP Units. Holders of OP Units are considered to be non-controlling interest holders in the OP and their ownership interest in the limited partner’s share is presented as non-controlling interests in VEREIT’s consolidated balance sheets, statements of operations, statements of comprehensive income (loss) and statements of changes in equity. Further, a portion of the earnings and losses of the OP are allocated to non-controlling interest holders based on their respective ownership percentages. Upon conversion of OP Units to Common Stock, any difference between the fair value of shares of Common Stock issued and the carrying value of the OP Units converted is recorded as a component of equity. As of December 31, 2016 and December 31, 2015, there were approximately 23.75 million and 23.76 million Limited Partner OP Units outstanding, respectively. For legal entities being evaluated for consolidation, the Company must first determine whether the interests that it holds and fees it receives qualify as variable interests in the entity. A variable interest is an investment or other interest that will absorb portions of an entity’s expected losses or receive portions of the entity’s expected residual returns. The Company’s evaluation includes consideration of fees paid to the Company where the Company acts as a decision maker or service provider to the entity being evaluated. If the Company determines that it holds a variable interest in an entity, it evaluates whether that entity is a variable interest entity (“VIE”). VIEs are entities where investors lack sufficient equity at risk for the entity to finance its activities without additional subordinated financial support or where equity investors, as a group, lack one of the following characteristics: (a) the power to direct the activities that most significantly impact the entity’s economic performance, (b) the obligation to absorb the expected losses of the entity, or (c) the right to receive the expected returns of the entity. The Company then qualitatively assesses whether it is (or is not) the primary beneficiary of a VIE, which is generally defined as the party who has a controlling financial interest in the VIE. Consideration of various factors include, but are not limited to, the Company’s ability to direct the activities that most significantly impact the entity’s economic performance and its obligation to absorb losses from or right to receive benefits of the VIE that could potentially be significant to the VIE. The Company consolidates any VIEs when the Company is determined to be the primary beneficiary of the VIE and the difference between consolidating the VIE and accounting for it using the equity method could be material to the Company’s consolidated financial statements. The Company continually evaluates the need to consolidate these VIEs based on standards set forth in U.S. GAAP. In October 2016, the U.S. Financial Accounting Standards Board (the “FASB”) Accounting Standards Update, (“ASU”) No. 2016-17, Consolidation (Topic 810): Interests Held through Related Parties That Are under Common Control (“ASU 2016-17”), which changes how a single decision maker will consider its indirect interests when performing the primary beneficiary analysis under the VIE model. Under ASU 2015-02 “Consolidation (Topic 810), Amendments to the Consolidation Analysis,” a single decision maker was required to consider an indirect interest held by a related party under common control in its entirety. Under ASU 2016-17, the single decision maker will consider the indirect interest on a proportionate basis. ASU 2016-17 does not change the characteristics of a primary beneficiary in the VIE model. The amendments of ASU 2016-17 are effective for reporting periods beginning after December 15, 2016, with early adoption permitted. The Company is currently evaluating the impact this amendment will have on its consolidated financial statements. Reclassification As described below, the following items previously reported have been reclassified to conform with the current period’s presentation. The land and construction in progress line item from prior periods has been combined into the buildings, fixtures and improvements caption in the consolidated balance sheets. Equity in income of unconsolidated joint ventures previously included F-21 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2016 – (Continued) in other income, net in the consolidated statements of operations has been included in a separate caption entitled equity in income (loss) and gain on disposition of unconsolidated entities. Gain (loss) on investment securities previously included as a separate caption in the consolidated statements of operations, has been included in other income, net in the consolidated statements of operations. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Management makes significant estimates regarding goodwill and intangible asset impairments, real estate investment impairment, loans held for investment, program development costs, allocation of purchase price of business combinations and income taxes as well as the consolidation of equity investments. Real Estate Investments The Company records acquired real estate at cost and makes assessments as to the useful lives of depreciable assets. The Company considers the period of future benefit of the asset to determine the appropriate useful lives. Depreciation is computed using a straight-line method over the estimated useful life of 40 years for buildings, five to 15 years for building fixtures and improvements and the remaining lease term for intangible lease assets. Assets Held for Sale Upon classifying a real estate investment as held for sale, the Company will no longer recognize depreciation expense related to the depreciable assets of the property. Furthermore, the Company will allocate goodwill to the cost basis of an asset upon held for sale classification. Assets held for sale are recorded at the lower of carrying value or estimated fair value, less the estimated cost to dispose of the assets. See Note 5 – Real Estate Investments for further discussion regarding properties held for sale. If circumstances arise that the Company previously considered unlikely and, as a result, the Company decides not to sell a property previously classified as held for sale, the Company will reclassify the property as held and used. The Company measures and records a property that is reclassified as held and used at the lower of (i) its carrying value before the property was classified as held for sale, adjusted for any depreciation expense that would have been recognized had the property been continuously classified as held and used or (ii) the estimated fair value at the date of the subsequent decision not to sell. Development Activities Project costs, which include interest expense, associated with the development, construction and lease-up of a real estate project are capitalized as construction in progress. Once the development and construction of the building is substantially completed, the amounts capitalized to construction in progress are transferred to (i) land and (ii) buildings, fixtures and improvements and are depreciated over their respective useful lives. Investment in Unconsolidated Entities Unconsolidated Joint Ventures The Company accounts for its investment in unconsolidated joint venture arrangements (the “Unconsolidated Joint Ventures”) using the equity method of accounting as the Company has the ability to exercise significant influence, but not control, over operating and financial policies of these investments. The equity method of accounting requires the investment to be initially recorded at cost and subsequently adjusted for the Company’s share of equity in the joint ventures’ earnings and distributions. The Company records its proportionate share of net income (loss) from the Unconsolidated Joint Ventures in equity in income (loss) and gain on disposition of unconsolidated entities in the consolidated statements of operations. See Note 5 – Real Estate Investments for further discussion on investments in Unconsolidated Joint Ventures. F-22 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2016 – (Continued) Cole REITs As of December 31, 2016 and 2015, the Company owned equity investments in the Cole REITs, as defined in Note 3 – Segment Reporting. The Company accounts for these investments using the equity method of accounting which requires the investment to be initially recorded at cost and subsequently adjusted for the Company’s share of equity in the respective entity’s earnings and distributions. The Company records its proportionate share of net income (loss) from the Cole REITs in equity in income and gain on disposition of unconsolidated entities in the consolidated statements of operations. See Note 18 – Related Party Transactions and Arrangements for further discussion on the Cole REITs. Allocation of Purchase Price of Business Combinations including Acquired Properties In accordance with the guidance for business combinations, the Company determines whether a transaction or other event is a business combination. If the transaction is determined to be a business combination, the Company determines if the transaction is considered to be between entities under common control. The acquisition of an entity under common control is accounted for on the carryover basis of accounting whereby the assets and liabilities of the acquired company are recorded on the same basis as they were carried by the acquired company on the merger date. All other business combinations are accounted for by applying the acquisition method of accounting. Under the acquisition method, the Company recognizes the identifiable assets acquired, the liabilities assumed and any non-controlling interest in the acquired entity at fair value. In addition, the Company evaluates the existence of goodwill or a gain from a bargain purchase. The Company allocates the purchase price of acquired properties that constitute a business under U.S. GAAP and businesses accounted for under the acquisition method of accounting to tangible and identifiable intangible assets and liabilities acquired based on their respective fair values. Tangible assets include land, buildings, fixtures and improvements on an as-if vacant basis. The Company utilizes various estimates, processes and information to determine the as-if vacant property value. Identifiable intangible assets and liabilities include amounts allocated to acquired leases for above-market and below-market lease rates and the value of in-place leases. In making estimates of fair values for purposes of allocating purchase price, the Company utilizes a number of sources, including independent appraisals that may be obtained in connection with the acquisition or financing of the respective property and other market data. The Company also considers information obtained about each property as a result of its pre-acquisition due diligence, as well as subsequent marketing and leasing activities, in estimating the fair value of the tangible and intangible assets acquired and intangible liabilities assumed. The aggregate value of intangible assets related to in-place leases is primarily the difference between the property valued with existing in-place leases adjusted to market rental rates and the property valued as if vacant. Factors considered by the Company in its analysis of the in-place lease intangibles include an estimate of carrying costs during the expected lease-up period for each property, taking into account current market conditions and costs to execute similar leases. In estimating carrying costs, the Company includes real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates during the expected lease-up period, which typically ranges from six to 18 months. The Company also estimates costs to execute similar leases, including leasing commissions, legal and other related expenses. The value of in-place leases is amortized over the initial term of the respective leases. If a tenant terminates its lease, then the unamortized portion of the in-place lease value is charged to expense. Above-market and below-market in-place lease values for owned properties are recorded based on the present value (using an interest rate which reflects the risks associated with the leases acquired) of the difference between the contractual amounts to be paid pursuant to the in-place leases and management’s estimate of fair market lease rates for the corresponding in-place leases, measured over a period equal to the remaining non-cancelable term of the lease, including any bargain renewal periods. Above- market leases are amortized as a reduction to rental income over the remaining terms of the respective leases. Below-market leases are amortized as an increase to rental income over the remaining terms of the respective leases, including any bargain renewal periods. The fair value of investments and debt are valued using techniques consistent with those disclosed in Note 10 – Fair Value Measures, depending on the nature of the investment or debt. The fair value of all other assumed assets and liabilities is based on the best information available. Leasehold Improvements and Property and Equipment The Company leases its corporate office facilities under operating leases. Leasehold improvements related to these are recorded at cost less accumulated amortization. Leasehold improvements are amortized over the lesser of the estimated useful life or remaining lease term. Property and equipment, which typically include computer hardware and software, furniture and fixtures, among other items, are stated at cost less accumulated depreciation. Property and equipment are depreciated on a straight-line method over the estimated useful lives of the assets, which range from three to seven years. The Company reassesses the useful lives of its property and F-23 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2016 – (Continued) equipment and adjusts the future monthly depreciation expense based on the new useful life, as applicable. If the Company disposes of an asset, the asset and related accumulated depreciation are written off upon disposal. Goodwill In the case of a business combination, after identifying all tangible and intangible assets and liabilities, the excess consideration paid over the fair value of the assets and liabilities acquired and assumed, respectively, represents goodwill. In the event the Company disposes of a property, or classifies a property as an asset held for sale, that constitutes a business under U.S. GAAP, the Company will allocate a portion of the REI segment’s goodwill to that property in determining the gain or loss on the disposal of the property. The amount of goodwill allocated to the business will be based on the relative fair value of the business to the fair value of the reporting unit. The REI segment and the Cole Capital segment each comprise one reporting unit. Impairments Real Estate Assets The Company performs quarterly impairment review procedures, primarily through continuous monitoring of events and changes in circumstances that could indicate the carrying value of its real estate assets may not be recoverable. Impairment indicators that the Company considers include, but are not limited to, decrease in net operating income, bankruptcy or other credit concerns of a property’s major tenant or tenants, such as history of late payments, rental concessions and other factors, as well as significant decreases in a property’s revenues due to lease terminations, vacancies, co-tenancy clauses or reduced lease rates. When impairment indicators are identified or if a property is considered to have a more likely than not probability of being disposed of within the next 12 to 24 months, the Company assesses the recoverability of the assets by determining whether the carrying value of the assets will be recovered through the undiscounted future cash flows expected from the use of the assets and their eventual disposition. In the event that such expected undiscounted future cash flows do not exceed the carrying value, the Company will adjust the real estate assets to their respective fair values and recognize an impairment loss. Generally, fair value is determined using a discounted cash flow analysis and recent comparable sales transactions.The assumptions and uncertainties utilized in the evaluation of the impairment of real estate assets are discussed in detail in Note 10 – Fair Value Measures. See also Note 5 – Real Estate Investments for further discussion regarding real estate investment activity. Goodwill The Company evaluates goodwill for impairment annually or more frequently when an event occurs or circumstances change that indicate the carrying value, by reporting unit, may not be recoverable. The Company’s annual testing date is during the fourth quarter. The Company tests goodwill for impairment by first comparing the carrying value of net assets to the fair value of each reporting unit. If the fair value is determined to be less than the carrying value or if qualitative factors indicate that it is more likely than not that goodwill is impaired, a second step is performed to compute the amount of impairment as the difference between the fair value of goodwill and the carrying value. The Company estimates the fair value of the reporting units using discounted cash flows and relevant competitor multiples. The evaluation of goodwill for potential impairment requires the Company’s management to exercise significant judgment and to make certain assumptions. While the Company believes its assumptions are reasonable, there are no guarantees as to actual results. Changes in assumptions based on actual results may have a material impact on the Company’s financial results. The assumptions and uncertainties utilized in the evaluation of the impairment of goodwill are discussed in detail in Note 10 – Fair Value Measures. Goodwill activity by segment is also discussed in Note 4 – Goodwill and Other Intangibles. Intangible Assets The Company evaluates intangible assets for impairment when an event occurs or circumstances change that indicate the carrying value may not be recoverable. The Company tests intangible assets for impairment by first comparing the carrying value of the asset group to the undiscounted future cash flows expected from the use of the assets and their eventual disposition. In the event that such expected undiscounted future cash flows do not exceed the carrying value, the Company will adjust the intangible assets to their respective fair values and recognize an impairment loss. The Company’s intangible assets primarily consist of management and advisory contracts that the Company has with certain Cole REITs. The Company will estimate the fair value of the intangible assets using a discounted cash flow model specific to the applicable Cole REITs. The evaluation of intangible assets for potential impairment requires the Company’s management to exercise significant judgment and to make certain assumptions. While the Company believes its assumptions are reasonable, there are no guarantees as to actual results. Changes in assumptions based on actual results may have a material impact on the Company’s F-24 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2016 – (Continued) financial results. The assumptions and uncertainties utilized in the evaluation of the impairment of intangibles are discussed in detail in Note 10 – Fair Value Measures. Intangible assets are also discussed in Note 4 – Goodwill and Other Intangibles. Investment in Unconsolidated Entities The Company is required to determine whether an event or change in circumstances has occurred that may have a significant adverse effect on the fair value of any of its investment in the unconsolidated entities. If an event or change in circumstance has occurred, the Company is required to evaluate its investment in the unconsolidated entity for potential impairment and determine if the carrying value of its investment exceeds its fair value. An impairment charge is recorded when an impairment is deemed to be other-than-temporary. To determine whether an impairment is other-than-temporary, the Company considers whether it has the ability and intent to hold the investment until the carrying value is fully recovered. The evaluation of an investment in an unconsolidated entity for potential impairment requires the Company’s management to exercise significant judgment and to make certain assumptions. The use of different judgments and assumptions could result in different conclusions. No impairments of unconsolidated entities were identified during the years ended December 31, 2016, 2015 or 2014. Leasehold Improvements and Property and Equipment Leasehold improvements and property and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. If this review indicates that the carrying value of the asset is not recoverable, the Company records an impairment loss, measured at fair value by estimated discounted cash flows or market appraisals. The evaluation of leasehold improvements and property and equipment for potential impairment requires the Company’s management to exercise significant judgment and to make certain assumptions. The use of different judgments and assumptions could result in different conclusions. No impairments of leasehold improvements and property and equipment were identified during the years ended December 31, 2016, 2015 or 2014. Cash and Cash Equivalents Cash and cash equivalents include cash in bank accounts, as well as investments in highly-liquid money market funds with original maturities of three months or less. The Company deposits cash with several high quality financial institutions. These deposits are guaranteed by the Federal Deposit Insurance Corporation (“FDIC”) up to an insurance limit of $250,000. At times, the Company’s cash and cash equivalents may exceed federally insured levels. Although the Company bears risk on amounts in excess of those insured by the FDIC, it has not experienced and does not anticipate any losses due to the high quality of the institutions where the deposits are held. Restricted Cash The Company had $45.0 million and $59.8 million, respectively, in restricted cash as of December 31, 2016 and December 31, 2015. Restricted cash primarily consists of reserves related to lease expirations, as well as maintenance, structural and debt service reserves. In accordance with certain debt agreements, rent from certain of the Company’s tenants is deposited directly into a lockbox account, from which the monthly debt service payments are disbursed to the lender and the excess funds are then disbursed to the Company. Included in restricted cash at December 31, 2016 was $40.7 million in lender reserves and $4.3 million held in restricted lockbox accounts. Included in restricted cash at December 31, 2015 was $47.9 million in lender reserves and $11.9 million held in restricted lockbox accounts. Investment in Direct Financing Leases The Company has acquired certain properties that are subject to leases that qualify as direct financing leases in accordance with U.S. GAAP due to the significance of the lease payments from the inception of the leases compared to the fair value of the property or due to bargain purchase options. Investments in direct financing leases represent the fair value of the remaining lease payments on the leases and the estimated fair value of any expected residual property value at the end of the lease term. The fair value of the remaining lease payments is estimated using a discounted cash flow analysis based on interest rates that would represent the Company’s incremental borrowing rate for similar types of debt. The expected residual property value at the end of the lease term is estimated using market data and assessments of the remaining useful lives of the properties at the end of the lease terms, among other factors. Income from direct financing leases is calculated using the effective interest method over the remaining term of the lease. F-25 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2016 – (Continued) Mortgage Notes Receivable The Company classifies its mortgage notes receivable as long-term investments as the Company intends to hold the mortgage notes receivable for the foreseeable future or until maturity. Mortgage notes receivable investments are carried on the Company’s consolidated balance sheets at amortized cost (unpaid principal balance adjusted for unearned discount or premium and mortgage notes receivable origination fees), net of any allowance for mortgage notes receivable losses. Discounts or premiums and mortgage notes receivable origination fees are amortized as a component of interest income using the effective interest method over the life of the respective mortgage notes receivable. From time to time, the Company may determine to sell a mortgage note receivable in which case it must reclassify the asset as held for sale. Mortgage notes receivable held for sale are carried at the lower of cost or estimated fair value. The Company also evaluates its mortgage notes receivable for possible impairment on a quarterly basis, as discussed in Note 8 – Mortgage Notes Receivable. Commercial Mortgage-Backed Securities The Company classifies all of its commercial mortgage-backed securities (“CMBS”) as available for sale for financial accounting purposes. Under U.S. GAAP, securities classified as available for sale are carried on the consolidated balance sheet at fair value with the net unrealized gains or losses included in accumulated other comprehensive income (loss), a component of stockholders’ equity. Any premiums or discounts on securities are amortized as a component of interest income using the effective interest method. The Company estimates fair value on all securities investments quarterly based on a variety of inputs. Under U.S. GAAP, securities where the fair value is less than the Company’s cost are deemed impaired and, therefore, must be measured for other- than-temporary impairment. If an impaired security (i.e., fair value is below cost) is intended to be sold or required to be sold prior to expected recovery of the impairment loss, the full amount of the loss must be recorded in earnings as an other-than-temporary impairment. Otherwise, temporary impairment losses are included in other comprehensive income (loss). In estimating credit or other-than-temporary impairment losses, management considers a variety of factors, including (1) the financial condition and near-term prospects of the credit, including credit rating of the security and the underlying tenant and an estimate of the likelihood, amount and expected timing of any default, (2) whether the Company expects to hold the investment for a period of time sufficient to allow for anticipated recovery in fair value, (3) the length of time and the extent to which the fair value has been below cost, (4) current market conditions, (5) expected cash flows from the underlying collateral and an estimate of underlying collateral values, and (6) subordination levels within the securitization pool. These estimates are highly subjective and could differ materially from actual results. From the period the Company acquired the CMBS through December 31, 2016, the Company had no other-than-temporary impairment losses. See Note 7 – Investment Securities, at Fair Value for further discussion. Deferred Financing Costs Deferred financing costs represent commitment fees, legal fees and other costs associated with obtaining commitments for financing. Pursuant to the Company’s adoption of the FASB ASU 2015-03, Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs, the presentation of all deferred financing costs, other than those associated with the revolving credit facility, are presented on the consolidated balance sheets as a direct deduction from the carrying amount of the related debt liability rather than as an asset. These costs are amortized to interest expense over the terms of the respective financing agreements using the effective interest method. Unamortized deferred financing costs are written off when the associated debt is refinanced or repaid before maturity. Costs incurred in connection with potential financial transactions that are not completed are expensed in the period in which it is determined the financing will be completed. Convertible Debt The Company has an outstanding aggregate balance of $1.0 billion related to the Convertible Notes (as defined in Note 11 – Debt). The Convertible Notes are convertible into cash or shares of the Company’s Common Stock at the Company’s option. In accordance with U.S GAAP, the Convertible Notes are accounted for as a liability with a separate equity component recorded for the conversion option. A liability was recorded for the Convertible Notes on the respective issuance date at fair value based on a discounted cash flow analysis using current market rates for debt instruments with similar terms. The difference between the initial proceeds from the Convertible Notes and the estimated fair value of the debt instruments resulted in a debt discount, with an offset recorded to additional paid-in capital representing the equity component. The debt discount is being amortized to interest expense over the respective term of the Convertible Notes. F-26 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2016 – (Continued) Derivative Instruments The Company may use derivative financial instruments to hedge all or a portion of the interest rate risk associated with its borrowings. Certain of the techniques used to hedge exposure to interest rate fluctuations may also be used to protect against declines in the market value of assets that result from general trends in debt markets. The principal objective of such agreements is to minimize the risks and/or costs associated with the Company’s operating and financial structure as well as to hedge specific anticipated transactions. The Company records all derivatives on the consolidated balance sheets at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Derivatives may also be designated as hedges of the foreign currency exposure of a net investment in a foreign operation. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge certain of its risk, even though hedge accounting does not apply or the Company elects not to apply hedge accounting. The accounting for subsequent changes in the fair value of these derivatives depends on whether each has been designated and qualifies for hedge accounting treatment. If the Company elects not to apply hedge accounting treatment, any changes in the fair value of these derivative instruments is recognized immediately in loss on derivative instruments, net in the consolidated statements of operations and consolidated statements of comprehensive income (loss). If the derivative is designated and qualifies for hedge accounting treatment, the change in the estimated fair value of the derivative is recorded in other comprehensive income (loss) to the extent that it is effective. Any ineffective portion of a derivative’s change in fair value will be immediately recognized in earnings. Revenue Recognition – REI The Company’s revenues, which primarily consist of rental income and include rents that each tenant pays in accordance with the terms of each lease reported on a straight-line basis over the initial non-cancelable term of the lease, are recognized when earned and collectability is reasonably assured. When the Company acquires a property, the term of each existing lease is considered to commence as of the acquisition date for the purposes of this calculation. Since many of the leases provide for rental increases at specified intervals, straight-line basis accounting requires the Company to record a receivable, and include in revenues, straight- line rent receivables that the Company will only receive if the tenant makes all rent payments required through the expiration of the initial term of the lease. Straight-line rent receivables are included in rent and tenant receivables and other assets, net, in the consolidated balance sheets. See Note 9 – Rent and Tenant Receivables and Other Assets, Net. Cost recoveries from tenants are included in operating expense reimbursements in the consolidated statements of operations in the period the related costs are incurred. The Company defers the revenue related to lease payments received from tenants in advance of their due dates. As of December 31, 2016 and December 31, 2015, the Company had $57.6 million and $67.2 million, respectively, of deferred rental income, which is included in deferred rent, derivative and other liabilities in the consolidated balance sheets. The Company continually reviews receivables related to rent and unbilled rent receivables and determines collectability by taking into consideration the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area in which the property is located. In the event that the collectability of a receivable is uncertain, the Company will record an increase in the allowance for uncollectible accounts in the consolidated balance sheets and in the consolidated statements of operations as a reduction to rental income. As of December 31, 2016 and December 31, 2015, the Company maintained an allowance for uncollectible accounts of $6.0 million and $6.6 million, respectively. Revenue Recognition – Cole Capital Revenue includes securities sales commissions, dealer manager fees, distribution and stockholder servicing fees, real estate acquisition fees, financing coordination fees, property management fees, advisory fees, asset management fees and performance fees for services relating to the Cole REITs’ offerings and the investment and management of their respective assets, in accordance with the respective dealer manager and advisory agreements. The Company records dealer manager fees, excluding those related to INAV (as defined in Note 3 – Segment Reporting), and securities sales commissions as revenue upon the sale of Cole REIT shares. Dealer manager fees from the sale of INAV shares and distribution and stockholder servicing fees are recorded as revenue when the fees are fixed or determinable. The Company records revenue related to acquisition and financing coordination fees upon F-27 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2016 – (Continued) completion of a transaction and advisory, asset and property management fees as services are performed. The Company is also reimbursed for certain costs incurred in providing these services. Securities sales commissions and dealer manager reimbursements are recorded as revenue as the expenses are incurred, as long as reimbursement is reasonably assured. The Company, in its sole discretion, may reallow all or a portion of its dealer manager fee to such participating broker-dealers as a marketing and due diligence expense reimbursement, based on factors such as the volume of shares issued by such participating broker-dealers and the amount of marketing support provided by such participating broker-dealers. The Company also reallows 100% of selling commissions earned to participating broker-dealers. Refer to Note 18 – Related Party Transactions and Arrangements for further discussion. In addition, the Company earns property management, asset management and disposition fees from certain joint ventures and other real estate programs. Contingent Rental Income The Company owns certain properties that have associated leases that require the tenant to pay contingent rental income based on a percentage of the tenant’s sales after the achievement of certain sales thresholds, which may be monthly, quarterly or annual targets. As a lessor, the Company defers the recognition of contingent rental income until the specified target that triggers the contingent rental income is achieved, or until such sales upon which percentage rent is based are known. Program Development Costs The Company pays for organization, registration and offering expenses associated with the sale of common stock of the Cole REITs, as further discussed in Note 18 – Related Party Transactions and Arrangements. The reimbursement of these expenses by the Cole REITs is limited to a certain percentage of the proceeds raised from their offerings, in accordance with their respective advisory agreements and charters. Such expenses paid by the Company on behalf of the Cole REITs in excess of these limits that are expected to be collected are recorded as program development costs, which are included in rent and tenant receivables and other assets, net on the consolidated balance sheets. The Company assesses the collectability of the program development costs, considering the offering period and historical and forecasted sales of shares under the Cole REITs’ respective offerings and reserves for any balances considered not collectible. Additional reserves are generally recorded if actual proceeds raised from the offerings and corresponding program development costs incurred differ from management’s assumptions. Acquisition Related Expenses and Litigation, Merger and Other Non-routine Costs All costs incurred as a result of a business combination are classified as acquisition related expenses or other non-routine transaction related expenses and expensed as incurred. Acquisition related expenses include legal and other transaction related costs incurred in connection with self-originated acquisitions, including purchases of portfolios. In addition, indirect costs, such as internal salaries, that are tracked and documented in a manner that clearly indicates that the activities driving the cost directly relate to activities necessary to complete, or effect, self-originating purchases are classified as acquisition related expenses. Similar costs incurred in relation to mergers (which are not considered self-originating purchases) and litigation resulting therefrom and other non-routine transactions are included in litigation, merger and other non-routine costs, net of insurance recoveries in the consolidated statements of operations. The Company has also incurred legal fees and other costs associated with the investigation conducted by the audit committee (the “Audit Committee”) of the General Partner’s board of directors (the “Audit Committee Investigation”) and the litigations and investigations resulting therefrom, which are considered non-routine. The Company has directors’ and officers’ insurance and the insurance carriers have paid certain defense costs subject to standard reservation of rights under the respective policies. F-28 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2016 – (Continued) Litigation, merger and other non-routine costs, net of insurance recoveries include the following costs (amounts in thousands): Merger related costs: Strategic advisory services Transfer taxes Legal fees and expenses Personnel costs and other reimbursements Multi-tenant spin off Other fees and expenses Litigation and other non-routine costs: Post-transaction support services Subordinated distribution fee Audit Committee Investigation and related matters (2) Furniture, fixtures and equipment Legal fees and expenses Personnel costs and other reimbursements Other fees and expenses Total costs incurred Insurance recoveries Total Year Ended December 31, 2016 2015 2014 $ — $ — $ 35,765 562 — — — — — — 24,207 — 311 — — 25,080 (21,196) 3,884 $ (2,509) (1) — — — — — — 44,242 — 2,704 (3) — 632 45,069 (11,441) 33,628 $ $ 5,109 5,464 751 7,450 1,676 14,251 78,244 17,660 14,085 8,216 2,718 9,016 200,405 (789) 199,616 ___________________________________ (1) The negative balance for the year ended December 31, 2015 is a result of estimated costs accrued in prior periods that exceeded actual expenses incurred. Includes all fees and costs associated with the previously-announced investigation conducted by the Audit Committee and various litigations and investigations (2) prompted by the results of the Audit Committee Investigation, including fees and costs incurred pursuant to the Company’s advancement obligations. (3) For the year ended December 31, 2015, legal fees and expenses primarily relate to fees incurred in connection with a legal matter resolved in early 2014. Due from Affiliates The Company receives or may be entitled to receive compensation and reimbursement for services primarily relating to the Cole REITs’ offerings and the investment, management, financing and disposition of their respective assets. Refer to Note 18 – Related Party Transactions and Arrangements for further explanation. Equity-based Compensation The Company has an equity-based incentive award plan for non-executive directors, officers, other employees and advisors or consultants who provide services to the Company, as applicable, and a non-executive director restricted share plan, which are accounted for under U.S. GAAP for share-based payments. The expense for such awards is recognized over the vesting period or when the requirements for exercise of the award have been met. See Note 17 – Equity-based Compensation for additional information on these plans. Per Share Data Income (loss) per basic share of Common Stock is calculated by dividing net income (loss) less dividends on unvested restricted shares of Common Stock and dividends on preferred stock by the weighted-average number of shares of Common Stock issued and outstanding during such period. Diluted income (loss) per share of Common Stock considers the effect of potentially dilutive shares of Common Stock outstanding during the period. Reportable Segments The Company has concluded that it has two reportable segments as it has organized its operations into two segments for management and internal financial reporting purposes, REI and Cole Capital. The identification of reportable segments requires the Company’s management to exercise certain judgments. Refer to Note 3 – Segment Reporting for further discussion. F-29 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2016 – (Continued) Income Taxes The General Partner currently qualifies and has elected to be taxed as a REIT for U.S. federal income tax purposes under Sections 856 through 860 of the Internal Revenue Code. As a REIT, except as discussed below, the General Partner generally is not subject to federal income tax on taxable income that it distributes to its stockholders so long as it distributes at least 90% of its annual taxable income (computed without regard to the deduction for dividends paid and excluding net capital gains). REITs are subject to a number of other organizational and operational requirements. Even if the General Partner maintains its qualification for taxation as a REIT, it may be subject to certain state and local taxes on its income and property, federal income taxes on certain income and excise taxes on its undistributed income. The OP is classified as a partnership for U.S. federal income tax purposes. As a partnership, the OP is not a taxable entity for U.S. federal income tax purposes. Instead, each partner in the OP is required to take into account its allocable share of the OP’s income, gains, losses, deductions and credits for each taxable year. However, the OP may be subject to certain state and local taxes on its income and property. As of December 31, 2016, the OP and the General Partner had no material uncertain income tax positions. The tax years subsequent to and including the fiscal year ended December 31, 2012 remain open to examination by the major taxing jurisdictions to which the OP, the General Partner, American Realty Capital Trust III, Inc. (“ARCT III”), CapLease, Inc. (“CapLease”), American Realty Capital Trust IV, Inc., (“ARCT IV”), Cole Real Estate Investments, Inc. (“Cole”) and Cole Credit Property Trust, Inc. are subject. Under the LPA, the OP is to conduct business in such a manner as to permit the General Partner at all times to qualify as a REIT. The Company conducts substantially all of its Cole Capital segment business activities through a TRS. A TRS is a subsidiary of a REIT that is subject to corporate federal, state and local income taxes, as applicable. The Company’s use of a TRS enables it to engage in certain business activities while complying with the REIT qualification requirements and to retain any income generated by these businesses for reinvestment without the requirement to distribute those earnings. The Company conducts all of its business in the United States, Puerto Rico and Canada and, as a result, it files income tax returns in the U.S. federal jurisdiction, the Canadian federal jurisdiction and various state and local jurisdictions. Certain of the Company’s inter-company transactions that have been eliminated in consolidation for financial accounting purposes are also subject to taxation. The Company provides for income taxes in accordance with current authoritative accounting and tax guidance. The tax provision or benefit related to significant or unusual items is recognized in the quarter in which those items occur. In addition, the effect of changes in enacted tax laws, rates or tax status is recognized in the quarter in which the change occurs. The accounting estimates used to compute the provision for or benefit from income taxes may change as new events occur, additional information is obtained or the tax environment changes. Recent Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which supersedes the revenue recognition requirements in Revenue Recognition, Accounting Standards Codification (“ASC”) (Topic 605) and requires an entity to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In August 2015, an amendment to ASU 2014-09, ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date (“ASU 2015-14”), was issued to defer the effective date for all entities by one year. For public business entities, certain not- for-profit entities and certain employee benefit plans, the guidance should be applied to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. Companies may use either a full retrospective or a modified retrospective approach to adopt ASU 2014-09. The Company is currently assessing the adoption methodology. In accordance with the Company’s plan for the adoption of ASU 2014-09, the Company’s implementation team has identified the Company’s revenue streams and is performing an in-depth review of the Company’s revenue contracts to identify the related performance obligations and to evaluate the impact on the Company’s financial statements and internal accounting processes and controls. As the majority of the Company’s revenue is derived from real estate lease contracts, as discussed in relation to ASU 2016-02 Leases (Topic 842) (“ASU 2016-02”), the Company does not expect that the adoption of ASU 2014-09 will have a material impact on its consolidated financial statements. F-30 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2016 – (Continued) In January 2016, the FASB issued ASU 2016-01, Financial Instruments (Subtopic 825-10), which requires all equity investments to be measured at fair value with changes in the fair value recognized through net income (other than those accounted for under equity method of accounting or those that result in consolidation of the investee). The amendments in this update also require an entity to present separately in other comprehensive income, the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. In addition, the amendments in this update require separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements. The amendments in this update are effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. The Company is currently evaluating the impact that this new guidance will have on its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, which will require that a lessee recognize assets and liabilities on the balance sheet for all leases with a lease term of more than 12 months, with the result being the recognition of a right of use asset and a lease liability and the disclosure of key information about the entity’s leasing arrangements. ASU 2016-02 retains a distinction between finance leases (i.e., capital leases under current U.S. GAAP) and operating leases. The classification criteria for distinguishing between finance leases and operating leases will be substantially similar to the classification criteria for distinguishing between capital leases and operating leases under current U.S. GAAP. The amendments in ASU 2016-02 are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. A modified retrospective approach is required for existing leases that have not expired upon adoption. The Company’s implementation team is developing an inventory of all leases, as well as identifying any non-lease components in the lease arrangements, and evaluating the impact to the Company, both as lessor and lessee, and its consolidated financial statements. In March 2016, the FASB issued ASU 2016-05, Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships (Topic 815). The amendments in this update clarify that a change in the counterparty to a derivative instrument that has been designated as a hedging instrument does not, in and of itself, require de-designation of that hedging relationship provided that all other hedge accounting criteria continue to be met. These provisions are effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years, with early adoption permitted. The Company plans to adopt prospectively and will consider for any future novations. In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation (Topic 718): Improvement to Employee Share-Based Payment Accounting (“ASU 2016-09”), which affects entities that issue share-based payment awards to their employees. ASU 2016-09 is designed to simplify several aspects of accounting for share-based payment award transactions including the income tax consequences, classification of awards as either equity or liabilities, classification on the statement of cash flows and forfeiture rate calculations. The guidance will be effective for annual reporting periods beginning after December 15, 2016 and interim periods within those fiscal years with early adoption permitted. The Company elected to early adopt this guidance during the first quarter of 2016, which did not have a material effect on the Company’s consolidated financial statements. In connection with the adoption, the Company modified the consolidated statement of changes in equity to include the line item cumulative-effect adjustment for equity-based compensation forfeitures, which represents application of the accounting change on a modified retrospective basis. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326) (“ASU 2016-13”). ASU 2016-13 is intended to improve financial reporting by requiring more timely recording of credit losses on loans and other financial instruments that are not accounted for at fair value through net income, including loans held for investment, held-to-maturity debt securities, trade and other receivables, net investment in leases and other such commitments. ASU 2016-13 requires that financial assets measured at amortized cost be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the amortized cost basis. The amendments in ASU 2016-13 require the Company to measure all expected credit losses based upon historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the financial assets and eliminates the “incurred loss” methodology under current U.S. GAAP. ASU 2016-13 is effective for fiscal years, and interim periods within, beginning after December 15, 2019. Early adoption is permitted for fiscal years, and interim periods within, beginning after December 15, 2018. The Company is currently evaluating the impact this amendment will have on its consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”), which is intended to address diversity in practice related to how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The amendments in ASU 2016-15 address eight specific cash flow issues as well as application of the predominance principle (dependence on predominant source or use of receipt or payment) and are effective for public business entities for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years with early adoption permitted. ASU 2016-15 requires retrospective adoption unless it is impracticable to F-31 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2016 – (Continued) apply, in which case it is to be applied prospectively as of the earliest date practicable. The Company plans to adopt ASU 2016-15 during the fourth quarter of fiscal year 2017. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”), which provides guidance on the presentation of restricted cash and restricted cash equivalents in the statement of cash flows. In accordance with ASU 2016-18, restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period amounts shown on the statements of cash flows. The amendments of ASU 2016-18 are effective for reporting periods beginning after December 15, 2017, with early adoption permitted. The Company is currently evaluating the impact this amendment will have on its consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (“ASU 2017-01”), which clarifies the definition of a business by adding guidance to assist entities in evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those periods, with early adoption permitted and is required to be applied prospectively to any transactions occurring within the period of adoption. The Company plans to adopt ASU 2017-01 during the first quarter of fiscal year 2017 and expects that most future acquisitions (or disposals) will qualify as asset acquisitions (or disposals). As such, future acquisition related expenses associated with these asset acquisitions will be capitalized and the REI segment’s goodwill will no longer be allocated to these asset dispositions at the time the asset is classified as held for sale or upon disposition in determining the gain or loss on disposition and held for sale. In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Others (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU 2017-04”), which simplifies the measurement of goodwill impairment by eliminating Step 2 from the goodwill impairment test (comparing the implied fair value of goodwill with the carrying amount of goodwill). ASU 2017-04 is effective for public business entities for annual periods beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption is permitted. The Company is currently evaluating the impact this amendment will have on its consolidated financial statements. Note 3 – Segment Reporting The Company has organized its operations into two segments for management and internal financial reporting purposes, REI and Cole Capital, as further discussed below. REI – Through its REI segment, the Company owns and actively manages a diversified portfolio of retail, restaurant, office and industrial real estate properties subject to long-term net leases with creditworthy tenants. As of December 31, 2016, the Company owned 4,142 properties comprising 93.3 million square feet of retail and commercial space located in 49 states, Puerto Rico and Canada, which includes properties owned through consolidated joint ventures. The rentable space at these properties was 98.3% leased with a weighted-average remaining lease term of 9.9 years. In addition, as of December 31, 2016, the Company owned eight CMBS and nine mortgage notes receivable. Cole Capital – Through its Cole Capital segment, the Company is responsible for managing the day-to-day affairs of Cole Credit Property Trust IV, Inc. (“CCPT IV”); Cole Real Estate Income Strategy (Daily NAV), Inc. (“INAV”); Cole Office & Industrial REIT (CCIT II), Inc. (“CCIT II”); Cole Office & Industrial REIT (CCIT III), Inc. (“CCIT III”), Cole Credit Property Trust V, Inc. (“CCPT V”); and other real estate offerings in registration (collectively with CCPT IV, INAV, CCIT II, CCIT III and CCPT V, the “Cole REITs”), raising capital for those Cole REITs in offering, identifying and making acquisitions and investments on the Cole REITs’ behalf and recommending to the respective board of directors of each of the Cole REITs an approach for providing investors with liquidity. Cole Capital serves as the dealer manager and distributes shares of common stock for certain Cole REITs and advises them regarding offerings, manages relationships with participating broker-dealers and financial advisors and provides assistance in connection with compliance matters relating to the offerings. Cole Capital receives compensation and reimbursement for services relating to the Cole REITs’ offerings and the investment, management, financing and disposition of their respective assets, as applicable. Cole Capital also develops new REIT offerings and assists in obtaining regulatory approvals from the SEC, the Financial Industry Regulatory Authority, Inc. and various blue sky jurisdictions for such offerings. See Note 18 – Related Party Transactions and Arrangements for further discussion on the Cole REITs. F-32 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2016 – (Continued) The Company allocates certain operating expenses, such as legal fees, employee related costs and benefits and general overhead expenses between its operating segments. The following tables present a summary of the comparative financial results and total assets for each segment (in thousands): REI segment: Revenues: Rental income Direct financing lease income Operating expense reimbursements Total real estate investment revenues Operating expenses: Acquisition related Litigation, merger and other non-routine costs, net of insurance recoveries Property operating Management fees to affiliates General and administrative Depreciation and amortization Impairment of real estate Total operating expenses Operating income (loss) Other (expense) income: Interest expense (Loss) gain on extinguishment and forgiveness of debt, net Other income, net Reserve for loan loss Equity in income (loss) and gain on disposition of unconsolidated entities Loss on derivative instruments, net Total other expenses, net Loss before taxes and real estate dispositions Gain (loss) on disposition of real estate and held for sale assets, net Loss before taxes Provision for income taxes Net loss Year Ended December 31, 2016 2015 2014 $ 1,227,937 $ 1,339,787 $ 1,271,574 2,055 105,455 2,720 98,628 3,603 100,522 1,335,447 1,441,135 1,375,699 1,257 3,884 144,428 — 51,265 756,314 182,820 5,649 33,628 130,855 — 64,691 817,477 91,755 35,578 197,647 137,741 13,888 76,261 844,743 100,547 1,139,968 195,479 1,144,055 297,080 1,406,405 (30,706) (317,376) (771) 5,289 — 9,783 (1,191) (304,266) (108,787) 45,524 (63,263) (6,110) (69,373) $ (358,392) 4,812 3,953 (15,300) 9,092 (1,460) (357,295) (60,215) (72,311) (132,526) (3,569) (136,095) $ (452,648) (21,869) 85,975 — (76) (10,570) (399,188) (429,894) (277,031) (706,925) (7,313) (714,238) $ F-33 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2016 – (Continued) Cole Capital segment: Revenues: Offering-related fees and reimbursements Transaction service fees and reimbursements Management fees and reimbursements Total Cole Capital revenues Operating expenses: Cole Capital reallowed fees and commissions Acquisition related Litigation, merger and other non-routine costs, net of insurance recoveries General and administrative Depreciation and amortization Impairments Total operating expenses Operating loss Total other income, net Loss before income taxes Benefit from income taxes Net loss Total Company: Total revenues Total operating expenses Total other expense, net Net loss REI segment Cole Capital segment Total Company Note 4 – Goodwill and Other Intangibles Goodwill Year Ended December 31, 2016 2015 2014 $ 36,533 $ 24,410 $ 12,959 69,884 119,376 23,174 64 — 85,343 30,109 60,363 114,882 16,195 594 — 84,375 31,872 120,931 261,384 (142,008) 746 (141,262) 9,811 (131,451) $ 30,134 213,339 344,637 (229,755) 2,486 (227,269) 39,872 (187,397) $ $ 87,109 64,956 51,493 203,558 66,228 3,362 1,969 91,167 71,260 309,444 543,430 (339,872) 2,621 (337,251) 40,577 (296,674) $ 1,454,823 1,556,017 $ 1,579,257 $ (1,401,352) $ (1,488,692) $ (1,949,835) (396,567) (354,809) $ $ (323,492) $ (1,010,912) $ (303,520) $ (200,824) $ $ Total Assets December 31, 2016 15,337,623 $ 249,951 15,587,574 $ December 31, 2015 16,966,729 $ 439,137 17,405,866 $ In connection with prior mergers, the Company recorded goodwill as a result of the merger consideration exceeding the net assets acquired. The goodwill recorded as a result of the merger of Cole Real Estate Investments, Inc. (“Cole”) with and into a wholly owned subsidiary of the Company (the “Cole Merger”) was allocated between the Company’s two segments, the REI segment and the Cole Capital segment. The REI segment and the Cole Capital segment each comprise one reporting unit. For discussion regarding the Company’s policies on goodwill allocation for future acquisitions and dispositions, please see Note 2 – Summary of Significant Accounting Policies. The Company evaluates goodwill for impairment annually or more frequently when an event occurs or circumstances change that indicate the carrying value, by reporting unit, may not be recoverable. The analysis performed for the annual goodwill test during the years ended December 31, 2016, 2015 and 2014 resulted in impairment charges of $120.9 million, $139.7 million and $223.1 million, respectively, in the Cole Capital reporting unit. See Note 10 – Fair Value Measures for a discussion of the Company’s fair value measurements regarding goodwill and intangible assets. F-34 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2016 – (Continued) The following table summarizes the Company’s goodwill activity by segment from January 1, 2015 to December 31, 2016 (in thousands): Balance, January 1, 2015 Goodwill allocated to dispositions and held for sale assets (1) Impairment Balance, December 31, 2015 Goodwill allocated to dispositions and held for sale assets (1) (2) Impairment Balance as of December 31, 2016 _______________________________________________ REI Segment 1,509,396 (98,765) — 1,410,631 (73,240) — 1,337,391 $ $ $ Cole Capital Segment 385,398 $ — (139,655) 245,743 — (120,931) 124,812 $ $ Consolidated 1,894,794 (98,765) (139,655) 1,656,374 (73,240) (120,931) 1,462,203 $ $ $ (1) (2) Included in gain (loss) on disposition of real estate and held for sale assets, net, in the consolidated statement of operations. Includes $71.0 million of goodwill allocated to the cost basis of properties disposed of and classified as held for sale as discussed in Note 5 – Real Estate Investments and $2.3 million of goodwill allocated to the cost basis of two properties foreclosed upon as discussed in Note 11 – Debt during the year ended December 31, 2016. Intangible Assets The intangible assets primarily consisted of management and advisory contracts that the Company has with certain Cole REITs, which are subject to an estimated remaining useful life of approximately three years. In connection with the annual goodwill impairment test, the fair value of the intangible assets were analyzed during the three months ended December 31, 2016. Based on this analysis, the Company concluded that the fair value of the intangible assets exceeded the carrying value and no impairment charge was recorded. The Company recorded $26.2 million of amortization expense related to the intangible assets during the year ended December 31, 2016. The Company recorded $25.9 million of amortization expenses related to the intangible assets for the year ended December 31, 2015. The estimated amortization expense is expected to be $16.6 million and $4.0 million for the years ending December 31, 2017 and 2018, respectively, and $3.8 million for the nine months ending September 30, 2019. See Note 10 – Fair Value Measures for a discussion of the Company’s fair value measurements regarding goodwill and intangible assets. The intangible assets were $24.6 million and $50.8 million, net of accumulated amortization of $29.6 million and $3.4 million, respectively, as of December 31, 2016 and December 31, 2015. Intangible Lease Assets and Liabilities Intangible lease assets and liabilities of the Company consisted of the following as of December 31, 2016 and 2015 (amounts in thousands, except weighted-average useful life): Intangible lease assets: In-place leases, net of accumulated amortization of $494,131 and $398,770, respectively Leasing commissions, net of accumulated amortization of $1,836 and $1,035, respectively Above-market lease assets and deferred lease incentives, net of accumulated amortization of $69,670 and $47,041, respectively Total intangible lease assets, net Intangible lease liabilities: Below-market leases, net of accumulated amortization of $56,891 and $38,340, respectively Weighted-Average Useful Life December 31, 2016 December 31, 2015 14.8 9.9 16.5 18.0 $ 1,192,756 $ 1,458,354 10,231 4,872 275,897 1,478,884 $ 308,306 1,771,532 224,023 $ 251,692 $ $ F-35 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2016 – (Continued) The following table provides the projected amortization expense and adjustments to rental income related to the intangible lease assets and liabilities for the next five years as of December 31, 2016 (amounts in thousands): 2017 2018 2019 2020 2021 In-place leases: Total projected to be included in amortization expense $ 146,814 $ 134,960 $ 124,008 $ 115,862 $ 106,889 Leasing commissions: Total projected to be included in amortization expense 1,124 936 862 821 772 Above-market lease assets and deferred lease incentives: Total projected to be deducted from rental income 24,745 24,243 22,330 21,894 21,377 Below-market lease liabilities: Total projected to be included in rental income 20,100 19,773 19,040 17,856 16,501 Note 5 – Real Estate Investments The Company acquired controlling financial interests in eight commercial properties for a purchase price of $100.2 million during the year ended December 31, 2016 (the “2016 Acquisitions”). The Company recorded revenue for the year ended December 31, 2016 of $2.1 million and net income of $0.5 million related to the 2016 Acquisitions. During the year ended December 31, 2015, the Company acquired controlling interests in 16 commercial properties, including nine land parcels, for an aggregate purchase price of $36.3 million (the “2015 Acquisitions”). The Company recorded revenue for the year ended December 31, 2015 of $1.2 million and net income of $0.4 million related to the 2015 Acquisitions. During the year ended December 31, 2014, the Company acquired controlling interests in 1,107 commercial properties, including a sale-leaseback transaction of 522 Red Lobster® restaurants and 20 other branded restaurant properties and 31 land parcels (the “2014 Acquisitions”), but excluding the properties acquired in the Cole Merger, CCPT Merger and the ARCT IV Merger, for an aggregate purchase price of $3.8 billion. The following table presents the allocation of the fair values of the assets acquired and liabilities assumed during the periods presented (in thousands): Real estate investments, at cost: Land Buildings, fixtures and improvements Total tangible assets Acquired intangible assets: In-place leases (1) Above-market leases (2) Assumed intangible liabilities: Below-market leases (3) Fair value adjustment of assumed notes payable Total purchase price of assets acquired Mortgage notes payable assumed Cash paid for acquired real estate investments ____________________________________ Year Ended December 31, 2016 2015 2014 $ $ $ $ 23,187 67,865 91,052 5,051 28,643 33,694 $ 808,930 2,505,409 3,314,339 9,613 — 2,580 153 545,389 112,484 (471) — 100,194 — 100,194 $ $ (108) — 36,319 — 36,319 (107,185) (23,589) $ 3,841,438 (301,532) $ 3,539,906 (1) The weighted average amortization period for acquired in-place leases is 13.8 years, 11.0 years and 19.0 years for 2016 Acquisitions, 2015 Acquisitions and 2014 Acquisitions, respectively. (2) The weighted average amortization period for acquired above-market leases is 14.1 years and 19.4 years for 2015 Acquisitions and 2014 Acquisitions, respectively. There were no acquired above-market leases during the year ended December 31, 2016. (3) The weighted average amortization period for acquired intangible lease liabilities is 10.0 years, 15.0 years and 20.6 years for 2016 Acquisitions, 2015 Acquisitions and 2014 Acquisitions, respectively. F-36 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2016 – (Continued) The Company has not included pro forma information for the Company’s 2016 or 2015 Acquisitions as they did not have a material impact on its consolidated financial position or results of operations. The following table presents unaudited pro forma information as if all of the Company’s acquisitions in 2014, including the Cole Merger, the ARCT IV Merger and the CCPT Merger, as discussed in Note 6 – Mergers with Real Estate Businesses, were completed on January 1, 2013 for each period presented below. These amounts have been calculated after applying the Company’s accounting policies and adjusting the results of acquisitions to reflect the additional depreciation and amortization and interest expense that would have been charged had the acquisitions occurred on January 1, 2013. Additionally, the unaudited pro forma net loss attributable to stockholders was adjusted to exclude acquisition related expenses of $38.8 million and $76.1 million for the years ended December 31, 2014 and 2013, respectively, and merger and other non-routine transaction related expenses of $200.5 million and $210.5 million for the years ended December 31, 2014 and 2013, respectively, which is included in litigation, merger and other non-routine costs, net of insurance recoveries in the accompanying consolidated statements of operations. Data below is presented in thousands. Year Ended December 31, 2014 (Unaudited) 2013 (Unaudited) Pro forma revenues Pro forma net (loss) attributable to stockholders $ $ 1,853,014 $ (606,549) $ 1,585,511 (478,093) Future Lease Payments The following table presents future minimum base rent payments due to the Company over the next five years and thereafter. These amounts exclude contingent rent payments, as applicable, that may be collected from certain tenants based on provisions related to sales thresholds and increases in annual rent based on exceeding certain economic indexes among other items (in thousands): 2017 2018 2019 2020 2021 Thereafter Total Future Minimum Operating Lease Base Rent Payments $ $ 1,106,798 1,096,146 1,058,299 1,021,668 978,368 6,487,753 11,749,032 Future Minimum Direct Financing Lease Payments (1) 3,819 $ 3,016 2,397 2,023 1,899 3,993 17,147 $ ____________________________________ (1) 32 properties are subject to direct financing leases and, therefore, revenue is recognized as direct financing lease income on the discounted cash flows of the lease payments. Amounts reflected are the minimum base rental cash payments due to the Company under the lease agreements on these respective properties. Investment in Direct Financing Leases, Net The components of the Company’s net investment in direct financing leases as of December 31, 2016 and December 31, 2015 are as follows (in thousands): Future minimum lease payments receivable Unguaranteed residual value of property Unearned income Net investment in direct financing leases December 31, 2016 17,147 $ 27,450 (5,142) 39,455 $ December 31, 2015 21,993 $ 31,562 (7,243) 46,312 $ F-37 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2016 – (Continued) Property Dispositions and Held for Sale Assets During the year ended December 31, 2016, the Company disposed of 301 properties for an aggregate gross sales price of $1.08 billion, of which our share was $1.04 billion after the profit participation payment related to the disposition of 70 Red Lobster properties. The dispositions resulted in consolidated proceeds of $958.4 million after a mortgage loan assumption of $55.0 million and closing costs. The Company recorded a gain of $45.7 million related to the sales, which included $67.8 million of goodwill allocated to the cost basis of such properties. The Company’s gain on the sales is included in gain (loss) on disposition of real estate and held for sale assets, net in the accompanying consolidated statements of operations. During the year ended December 31, 2016, the Company also disposed of one property owned by an unconsolidated joint venture for a gross sales price of $113.5 million, of which our share was $102.1 million based on our ownership interest in the joint venture, resulting in proceeds of $42.3 million after mortgage loan repayments of $57.0 million and closing costs. The Company recorded a gain of $10.2 million related to the sale, which is included in equity in income (loss) and gain on disposition of unconsolidated entities in the accompanying consolidated statements of operations. During the year ended December 31, 2015, the Company disposed of 228 properties, including two properties owned by consolidated joint ventures, for an aggregate sales price of $1.4 billion, resulting in consolidated proceeds of $966.1 million after mortgage loan assumptions and closing costs. The Company recorded a loss of $69.1 million related to the sales, which included $96.7 million of goodwill allocated in the cost basis of such properties. The Company’s loss on the sales is included in gain (loss) on disposition of real estate and held for sale assets, net in the accompanying consolidated statements of operations. During the year ended December 31, 2015, the Company also disposed of its interest in one consolidated joint venture, whose only assets consisted of investments in three Unconsolidated Joint Ventures, for an aggregate gross sales price of $77.5 million, of which the Company’s share was $69.8 million based on its ownership interest, resulting in consolidated proceeds of $43.0 million after mortgage loan repayment and closing costs. The mortgage loan obligation of the consolidated joint venture was held by an unconsolidated entity. The Company recorded a gain of $6.7 million related to the sale of the consolidated joint venture, which is included in equity in income (loss) and gain on disposition of unconsolidated entities in the accompanying consolidated statements of operations. As of December 31, 2016, there were 11 properties classified as held for sale which are expected to be sold in the next 12 months as part of the Company’s portfolio management strategy. As of December 31, 2015, there were 17 properties classified as held for sale. During the years ended December 31, 2016 and 2015, the Company recorded a loss of $0.2 million and $3.2 million, respectively, related to properties classified as held for sale as of December 31, 2016 and 2015, which included $3.2 million and $2.1 million, respectively, of goodwill allocated to the cost basis of such properties. The loss on properties held for sale is included in gain (loss) on disposition of real estate and held for sale assets, net in the accompanying consolidated statements of operations. Multi-tenant Shopping Center Portfolio Sale On October 17, 2014, the Company completed the sale of a portfolio consisting of 64 multi-tenant properties and seven single- tenant properties (the “Multi-Tenant Portfolio”) for $1.9 billion to the Blackstone/DDR Joint Venture. The disposition to Blackstone and DDR provided $1.3 billion of net proceeds, of which $1.2 billion were used to reduce the Company’s leverage by paying down the Company’s line of credit. In connection with the sale, $542.8 million of secured mortgage debt was either repaid or assumed by the Blackstone/DDR Joint Venture, providing the Company with $1.3 billion in net proceeds and resulting in a net loss on sale of $262.0 million, which included $195.5 million of goodwill allocation. The Multi-Tenant Portfolio was not classified as discontinued operations for any periods presented, however, the Company has determined that the Multi-Tenant Portfolio was an individually significant component of the Company. The following table summarizes the operating income from continued operations of the Multi-Tenant Portfolio for the year ended December 31, 2014 (in thousands): Total revenue Total expenses Loss from Multi-Tenant Portfolio Year Ended December 31, 2014 122,522 $ (123,776) (1,254) $ F-38 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2016 – (Continued) Impairment of Real Estate Investments The Company performs quarterly impairment review procedures, primarily through continuous monitoring of events and changes in circumstances that could indicate the carrying value of its real estate assets may not be recoverable. During the year ended December 31, 2016, management identified certain properties for potential sale as part of its portfolio management strategy to reduce exposure to office properties. Additionally, a tenant of 59 restaurant properties filed for bankruptcy during the year ended December 31, 2016. As part of the Company’s quarterly impairment review procedures and considering the factors mentioned above, real estate assets with carrying values totaling $668.2 million were deemed to be impaired and their carrying values were reduced to their estimated fair values of $485.4 million, resulting in impairment charges of $182.8 million during the year ended December 31, 2016. During the years ended December 31, 2015 and 2014, real estate assets with carrying values totaling $340.0 million and $199.5 million, respectively, were deemed to be impaired and their carrying values were reduced to their estimated fair values of $248.3 million and $99.0 million, respectively, resulting in impairment charges of $91.8 million and $100.5 million, respectively. Consolidated Joint Ventures The Company had interests in two Consolidated Joint Ventures that owned two properties as of each of December 31, 2016 and December 31, 2015. As of December 31, 2016 and December 31, 2015, the Consolidated Joint Ventures had total assets of $57.0 million and $58.5 million, of which $50.8 million and $55.2 million, respectively, were real estate investments, net of accumulated depreciation and amortization. As of December 31, 2016, one property secured a mortgage note payable of $11.6 million, which was non-recourse to the Company. The Company has the ability to control operating and financial policies of the Consolidated Joint Ventures. There are restrictions on the use of these assets as the Company would generally be required to obtain the approval of each partner (the “Partner”) in accordance with the respective joint venture agreement for any major transactions. The Company and each Partner are subject to the provisions of each joint venture agreement, which includes provisions for when additional contributions may be required to fund certain cash shortfalls. The Partners’ share of the aggregate Consolidated Joint Ventures’ loss was $14,000 for the year ended December 31, 2016. The Partners’ share of income from five Consolidated Joint Ventures was $1.3 million for the year ended December 31, 2015. The Company disposed of its interest in three of these Consolidated Joint Ventures during the year ended December 31, 2015, which included one Consolidated Joint Venture, whose only assets were investments in three Unconsolidated Joint Ventures. The Partners’ share of the loss from six Consolidated Joint Ventures was $154,000 for the year ended December 31, 2014. The Company disposed of its interest in one of these Consolidated Joint Ventures during the year ended December 31, 2014. The Partners’ share of the Consolidated Joint Ventures’ income or loss is included in net loss attributable to non-controlling interests in the consolidated statements of operations. Unconsolidated Joint Ventures The Company’s investment in Unconsolidated Joint Ventures consisted of interests in two joint ventures that owned two properties as of December 31, 2016, and interests in three joint ventures that owned three properties as of December 31, 2015. As of December 31, 2016 and December 31, 2015, the Company owned aggregate equity investments of $41.3 million and $52.8 million, respectively, in Unconsolidated Joint Ventures. As of December 31, 2016, the Company’s maximum exposure to risk was $41.3 million, the carrying value of the investments, which is presented in investment in unconsolidated entities in the consolidated balance sheet. The Unconsolidated Joint Ventures had total debt outstanding of $20.4 million as of December 31, 2016, none of which is recourse to the Company, as discussed in Note 11 – Debt. The Company and the respective unconsolidated joint venture partners are subject to the provisions of the applicable joint venture agreement, which includes provisions for when additional contributions may be required to fund certain cash shortfalls. During the years ended December 31, 2016, 2015 and 2014, the Company recognized $0.9 million, $2.3 million and $1.5 million of net income, respectively, from the Unconsolidated Joint Ventures which owned two, three and six properties, at the respective year end. F-39 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2016 – (Continued) The following is a summary of the Company’s percentage ownership and carrying amount related to each of the Unconsolidated Joint Ventures as of December 31, 2016 (dollar amounts in thousands): Name of Joint Venture Partner Cole/Mosaic JV South Elgin IL, LLC Affiliate of Mosaic Properties and Development, LLC Cole/Faison JV Bethlehem GA, LLC Faison-Winder Investors, LLC Ownership Percentage (1) 50% 90% Carrying Amount of Investment (2) 5,891 $ 35,438 41,329 $ _______________________________________________ (1) The Company’s ownership interest in this table reflects its legal ownership interest. Legal ownership may, at times, not equal the Company’s economic interest in the listed properties because of various provisions in certain joint venture agreements regarding distributions of cash flow based on capital account balances, allocations of profits and losses and payments of preferred returns. As a result, the Company’s actual economic interest (as distinct from its legal ownership interest) in certain of the properties could fluctuate from time to time and may not wholly align with its legal ownership interests. (2) The total carrying amount of the investments is greater than the underlying equity in net assets by $6.4 million. This difference relates to a purchase price step up in fair value of the investment assets acquired in connection with the Cole Merger. The step up in fair value was allocated to the individual investment assets and is being amortized in accordance with the Company’s depreciation policy. Note 6 – Mergers with Real Estate Businesses American Realty Capital Trust IV, Inc. Merger On July 1, 2013, the General Partner entered into an Agreement and Plan of Merger, as amended (the “ARCT IV Merger Agreement”), with ARCT IV, and certain subsidiaries of each company. The ARCT IV Merger Agreement provided for the merger of ARCT IV with and into a subsidiary of the OP (the “ARCT IV Merger”). The ARCT IV Merger was consummated on January 3, 2014 (the “ARCT IV Merger Date”). Pursuant to the terms of the ARCT IV Merger Agreement, each outstanding share of common stock of ARCT IV, including unvested restricted shares that vested in conjunction with the ARCT IV Merger, was exchanged for (i) $9.00 in cash, (ii) 0.5190 of a share of the Company’s Common Stock (the “ARCT IV Exchange Ratio”) and (iii) 0.5937 of a share of a new series of preferred stock designated as the 6.70% Series F Cumulative Redeemable Preferred Stock (“Series F Preferred Stock”) and each outstanding unit of ARCT IV’s operating partnership (each, an “ARCT IV OP Unit”), other than ARCT IV OP Units held by American Realty Capital Trust IV Special Limited Partner, LLC (the “ARCT IV Special Limited Partner”), and American Realty Capital Advisors IV, LLC (the “ARCT IV Advisor”) was exchanged for (i) $9.00 in cash, (ii) 0.5190 of a Limited Partner OP Unit and (iii) 0.5937 of a Limited Partner OP Unit designated as Series F Preferred Units (“Limited Partner Series F OP Units”). In total, the Operating Partnership, on the Company’s behalf, paid $651.4 million in cash, the Company issued 36.9 million shares of Common Stock and 42.2 million shares of Series F Preferred Stock to the former ARCT IV shareholders, and the Operating Partnership issued 0.7 million units of Limited Partner Series F OP units and 0.6 million Limited Partner OP Units to the former ARCT IV OP Unit holders in connection with the consummation of the ARCT IV Merger. In addition, each outstanding ARCT IV Class B Unit (as defined below) and each outstanding ARCT IV OP Unit held by the ARCT IV Special Limited Partner and the ARCT IV Advisor was converted into 2.3961 Limited Partner OP Units, resulting in the OP issuing 1.2 million Limited Partner OP Units. In accordance with the LPA, the OP issued a corresponding number of General Partner OP Units and General Partner Series F Preferred Units to the Company when shares of the Company’s Common Stock and Series F Preferred Stock were issued to former common stockholders of ARCT IV, respectively. On January 3, 2014, the OP entered into a contribution and exchange agreement with the ARCT IV OP, the ARCT IV Special Limited Partner and ARC Real Estate Partners, LLC (“ARC Real Estate”), an entity under common ownership with the Former Manager. The ARCT IV Special Limited Partner was entitled to receive certain distributions from the ARCT IV OP, including the subordinated distribution of net sales proceeds resulting from an “investment liquidity event” (as defined in the agreement of limited partnership of the ARCT IV OP). The ARCT IV Merger constituted an “investment liquidity event,” as a result of which the ARCT IV Special Limited Partner, in connection with management’s successful attainment of the 6.0% performance hurdle and the return to ARCT IV’s stockholders of $358.3 million in addition to their initial investment, received a subordinated distribution of net sales proceeds from the ARCT IV OP equal to $63.2 million. Pursuant to the contribution and exchange agreement, the ARCT IV Special Limited Partner contributed its interest in the ARCT IV OP, inclusive of the subordinated distribution proceeds received, to the ARCT IV OP in exchange for 2.8 million equity units of the ARCT IV OP, based on a price per share of $22.50. The fair value of these units at date of issuance was $78.2 million and has been included in litigation, merger and other non-routine costs, net of insurance recoveries in the accompanying consolidated statements of operations for the year ended December 31, 2014. Upon consummation of the ARCT IV Merger, these equity units were immediately converted to 6.7 million Limited Partner OP Units after application of the exchange ratio of 2.3961 per ARCT IV OP Unit. In conjunction with the ARCT IV Merger F-40 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2016 – (Continued) Agreement, the ARCT IV Special Limited Partner agreed to a minimum two-year holding period for these Limited Partner OP Units before being redeemable by the holder for cash or, at the option of the General Partner, the Common Stock of the Company. In addition, as part of the contribution and exchange agreement, ARC Real Estate contributed $750,000 in cash to the ARCT IV OP, effective prior to the consummation of the ARCT IV Merger, in exchange for ARCT IV OP Units. Upon the consummation of the ARCT IV Merger, these equity units converted at an exchange ratio of 2.3961 Limited Partner OP Units per ARCT IV OP Unit, resulting in the Operating Partnership issuing 0.1 million Limited Partner OP Units to ARC Real Estate. Accounting Treatment for the ARCT IV Merger The Company and ARCT IV, from inception to the ARCT IV Merger Date, were considered to be entities under common control. Both entities’ advisors were wholly owned subsidiaries of AR Capital, LLC (“ARC”). ARC and its related parties had ownership interests in the Company and ARCT IV through the ownership of shares of common stock, OP Units and other equity interests. In addition, the advisors of both entities were contractually eligible to receive potential fees for their services to both of the companies, including asset management fees, incentive fees and other fees and had continued to receive fees from the OP prior to the Company’s transition to self-management. Due to the significance of these fees, the advisors and ultimately ARC were determined to have a significant economic interest in both companies in addition to having the power to direct the activities of the companies through advisory/management agreements, which qualified them as affiliated companies under common control in accordance with U.S. GAAP. The acquisition of an entity under common control is accounted for on the carryover basis of accounting, whereby the assets and liabilities of the companies are recorded upon the merger on the same basis as they were carried by the companies on the ARCT IV Merger Date. In addition, U.S. GAAP requires the Company to present historical financial information as of the earliest period of common control. Therefore, the accompanying consolidated financial statements, including the notes thereto, are presented as if the ARCT IV Merger, including the impact of the equity transactions entered into to consummate the merger, had occurred at the earliest period presented. Cole Real Estate Investments, Inc. Merger On October 22, 2013, the Company and a wholly owned subsidiary entered into an agreement and plan of merger (the “Cole Merger Agreement”) with Cole, a publicly traded Maryland corporation. The Cole Merger Agreement provided for the merger of Cole with and into a wholly owned subsidiary of the Company (the “Cole Merger”). The Cole Merger was consummated on February 7, 2014 (the “Cole Acquisition Date”). Pursuant to the terms of the Cole Merger Agreement, each share of common stock of Cole issued and outstanding immediately prior to the effectiveness of the Cole Merger, including unvested restricted stock units and performance stock units that vested in conjunction with the Cole Merger, other than shares owned by the Company, any subsidiary of the Company or any wholly owned subsidiary of Cole, was converted into the right to receive either (i) 1.0929 shares of the Company’s Common Stock (the “Stock Consideration”) or (ii) $13.82 in cash (the “Cash Consideration” and together with the Stock Consideration, the “Merger Consideration”). Holders of approximately 98% of outstanding Cole shares elected to receive the Stock Consideration and holders of approximately 2% of outstanding Cole shares elected to receive the Cash Consideration, pursuant to the terms of the Cole Merger Agreement, resulting in the Company issuing approximately 520.8 million shares of Common Stock and paying $181.8 million in cash to Cole’s shareholders based on their elections. In accordance with the LPA, the Operating Partnership issued a corresponding number of General Partner OP Units to the Company when shares of the Company’s Common Stock were issued to former common stockholders of Cole. In addition, the Company issued approximately 2.8 million shares of Common Stock, in the aggregate, to certain executives of Cole pursuant to letter agreements entered into between the Company and such individuals, concurrently with the execution of the Cole Merger Agreement. Additionally, effective as of the Cole Acquisition Date, the Company issued, but had not yet allocated, 0.4 million shares with dividend equivalent rights commensurate with the Company’s Common Stock. In accordance with the LPA, the Operating Partnership issued a corresponding number of General Partner OP Units to the Company when shares of the Company’s Common Stock were issued to former executives of Cole. F-41 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2016 – (Continued) The fair value of the consideration transferred at the Cole Acquisition Date totaled $7.5 billion and consisted of the following (in thousands): Fair value of consideration transferred: Cash Common Stock Total consideration transferred As of Cole Acquisition Date $ $ 181,775 7,285,868 7,467,643 The fair value of the 520.8 million shares of Common Stock issued, excluding those shares of Common Stock transferred to former Cole executives, was determined based on the closing market price of the Company’s Common Stock on the Cole Acquisition Date. Accounting Treatment for the Cole Merger The Cole Merger has been accounted for under the acquisition method of accounting under U.S. GAAP. Under the acquisition method of accounting, the assets acquired and liabilities assumed from Cole were recorded as of the acquisition date at their respective fair values. Any excess of purchase price over the fair values was recorded as goodwill. Results of operations for Cole are included in the Company’s consolidated financial statements subsequent to the Cole Acquisition Date. Purchase Price Allocation of Cole Merger Initially, the purchase price for the acquisition was allocated to assets acquired and liabilities assumed based on their preliminary fair values. During the three months ended December 31, 2014, we identified certain measurement period adjustments that impacted the provisional accounting, which decreased the fair value of the identifiable management and advisory contracts with the Cole REITs and corresponding deferred tax liability by $80.4 million and $30.7 million, respectively, and an increase of $49.6 million to goodwill as of the Cole Acquisition Date. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the Cole Acquisition Date (in thousands): Identifiable assets acquired at fair value: Land Buildings, fixtures and improvements Acquired intangible lease assets Total real estate investments Investment in unconsolidated entities Investment securities, at fair value Loans held for investment, net Cash and cash equivalents Restricted cash Intangible assets Deferred costs and other assets Due from affiliates Total identifiable assets acquired As of Cole Acquisition Date 1,737,839 5,901,827 1,324,217 8,963,883 103,966 151,197 72,326 149,965 15,704 305,000 94,667 3,301 9,860,009 $ $ F-42 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2016 – (Continued) Identifiable liabilities assumed at fair value: Mortgage notes payable, net Credit facilities Other debt Below-market lease liabilities Accounts payable and accrued expenses Deferred rent, derivative and other liabilities Dividends payable Due to affiliates Total liabilities assumed Non-controlling interests Net identifiable assets acquired Goodwill Net assets acquired As of Cole Acquisition Date 2,706,585 1,309,000 49,013 212,433 142,243 204,558 6,271 44,242 4,674,345 24,766 5,160,898 2,262,547 7,423,445 $ $ The fair values of real estate investments, including acquired lease intangibles, and below-market lease liabilities allocated to the REI segment were estimated by the Company with the assistance of a third-party valuation firm. The estimated fair values of these assets and liabilities total $9.0 billion and $212.4 million, respectively. The recorded values represent the estimated fair values related to such assets and liabilities. The fair value of the remaining Cole assets and liabilities were calculated in accordance with the Company’s policy on purchase price allocation, as disclosed in Note 2 – Summary of Significant Accounting Policies. Goodwill of $1.7 billion was assigned to the REI segment. The goodwill recognized was attributed to the enhancement of the Company’s year-round rental revenue stream, realized and expected synergies, the impact of the merger on lowering the Company’s cost of capital, as well as the benefits of critical mass, improved portfolio diversification and enhanced access to capital markets. Goodwill of $608.5 million was assigned to the Cole Capital segment. The goodwill was primarily supported by management’s belief that Cole Capital brings an established management platform with numerous strategic benefits including growth from new income streams and the ability to offer new products. None of the goodwill is expected to be deductible for income tax purposes. The amounts of revenue and net income related to Cole property acquisitions and Cole Capital included in the accompanying consolidated statements of operations from the Cole Acquisition Date to the period ended December 31, 2014 was $814.8 million and $47.3 million respectively. The unaudited pro forma information in Note 5 – Real Estate Investments is presented as if Cole had been included in the consolidated results of the Company for the entire period ended December 31, 2014. Cole Credit Property Trust, Inc. Merger On March 17, 2014, the Company and a wholly owned subsidiary entered into an Agreement and Plan of Merger (the “CCPT Merger Agreement”) with CCPT. The CCPT Merger Agreement provided for the merger of CCPT with and into a direct subsidiary of the Company (the “CCPT Merger”). The CCPT Merger was consummated on May 19, 2014 (the “CCPT Acquisition Date”). The fair value of the consideration transferred at the CCPT Acquisition Date totaled $73.2 million, which was paid in cash. Pursuant to the CCPT Merger Agreement, the Company commenced a cash tender offer to purchase all of the outstanding shares of common stock of CCPT (the “CCPT Common Stock”) (other than shares owned by CCPT, the Company or any subsidiary of the Company), upon the terms and subject to the conditions set forth in the Offer to Purchase, dated March 31, 2014, and the related Letter of Transmittal (together with any amendments or supplements to the foregoing, the “Offer”), at a price of $7.25 per share (the “Offer Price”), net to the seller in cash, without interest, less any applicable withholding tax. On May 19, 2014, the Company accepted for payment and paid for all shares of CCPT Common Stock that were validly tendered in the Offer. As of the expiration of the Offer, a total of 7,735,069 shares of CCPT Common Stock were validly tendered and not withdrawn, representing approximately 77% of the shares of CCPT Common Stock outstanding. F-43 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2016 – (Continued) Immediately following the acceptance for payment and payment for the shares of CCPT Common Stock that were validly tendered in the Offer, the Company exercised its option (the “Top-Up Option”), granted pursuant to the CCPT Merger Agreement, to purchase, at a price per share equal to the Offer Price, 13,457,874 newly issued shares of CCPT Common Stock (collectively, the “Top-Up Shares”). The Top-Up Shares, taken together with the shares of CCPT Common Stock owned, directly or indirectly, by the Company and its subsidiaries immediately following the acceptance for payment and payment for the shares of CCPT Common Stock that were validly tendered in the Offer, constituted one share more than 90% of the outstanding shares of CCPT Common Stock (after giving effect to the issuance of all shares subject to the Top-Up Option), the applicable threshold required to effect a short-form merger under applicable Maryland law without stockholder approval. Following the consummation of the Offer and the exercise of the Top-Up Option, in accordance with the CCPT Merger Agreement, the Company completed its acquisition of CCPT by effecting a short-form merger under Maryland law, pursuant to which CCPT was merged with and into a subsidiary of the Company, with the subsidiary surviving the merger as a wholly owned subsidiary of the Company. The CCPT Merger became effective following the filing of the Articles of Merger with the State Department of Assessments and Taxation of Maryland and the filing of the Certificate of Merger with the Secretary of State of the State of Delaware with an effective date of May 19, 2014 (the “Effective Time”). At the Effective Time, each share of CCPT Common Stock not purchased in the Offer (other than shares held by CCPT, the Company or any subsidiary of the Company, which were automatically canceled and retired and ceased to exist) was converted into the right to receive an amount, in cash and without interest, equal to the Offer Price. Accounting Treatment for the CCPT Merger The CCPT Merger has been accounted for under the acquisition method of accounting under U.S. GAAP. Under the acquisition method of accounting, the assets acquired and liabilities assumed from CCPT were recorded as of the acquisition date at their respective fair values. Any excess of purchase price over the fair values was recorded as goodwill. Results of operations for CCPT are included in the Company’s consolidated financial statements subsequent to the CCPT Acquisition Date. Fair Value of Consideration Transferred The fair value of the consideration transferred at the CCPT Acquisition Date totaled $73.2 million, which was paid in cash. The acquisition was funded by the Company through additional borrowings under its revolving credit facility. Purchase Price Allocation of CCPT Acquisition The consideration transferred pursuant to the CCPT Merger Agreement was allocated to the assets acquired and liabilities assumed based upon their preliminary estimated fair values as of the CCPT Acquisition Date. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed as of the CCPT Acquisition Date (in thousands): Identifiable assets acquired at fair value: Land Buildings, fixtures and improvements Acquired intangible lease assets Total real estate investments Cash and cash equivalents Restricted cash Prepaid expenses and other assets Total identifiable assets acquired As of CCPT Acquisition Date 28,258 113,296 17,960 159,514 167 2,420 297 162,398 $ $ F-44 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2016 – (Continued) Identifiable liabilities assumed at fair value: Mortgage notes payable Unsecured credit facility Accounts payable and accrued expenses Below-market lease liability Due to affiliates Deferred rent and other liabilities Total liabilities assumed Net identifiable assets acquired As of CCPT Acquisition Date 85,286 800 443 1,752 568 390 89,239 73,159 $ $ The fair value of real estate investments, including acquired lease intangibles, and below-market lease liabilities were estimated by the Company with the assistance of a third party valuation firm. The estimated fair value of these assets and liabilities total $159.5 million and $1.8 million, respectively. The recorded values represent the estimated fair values related to such assets and liabilities. The fair value of the remaining CCPT assets and liabilities were calculated in accordance with the Company’s policy on purchase price allocation, as disclosed in Note 2 – Summary of Significant Accounting Policies. The amounts of revenue and net loss related to the CCPT Merger included in the accompanying consolidated statements of operations from the CCPT Acquisition Date to the period ended December 31, 2014 were $8.2 million and $1.8 million, respectively. The unaudited pro forma information in Note 5 – Real Estate Investments is presented as if CCPT had been included in the consolidated results of the Company for the entire year ended December 31, 2014. Abandoned Spin-off of Multi-Tenant Shopping Center Portfolio; Sale to Blackstone/DDR Joint Venture On March 13, 2014, the Company announced its intention to spin off its multi-tenant shopping center business (the “MT Spin- off”) into a publicly traded REIT, American Realty Capital Centers, Inc., which was expected to operate under the name “ARCenters” and to trade on the NASDAQ Global Market under the symbol “ARCM.” The OP was expected to retain 25% ownership of ARCM. The MT Spin-off was expected to be effectuated through a pro rata taxable special distribution of one share of ARCM common stock for every 10 shares of the Company’s common stock and every 10 OP Units held by third parties in the OP. On April 4, 2014, ARCM filed a Registration Statement on Form 10 to register ARCM’s common stock, par value $0.01 per share, pursuant to Section 12(b) of the Exchange Act so that, upon consummation of the MT Spin-off, shares of ARCM received by holders of the Company’s common stock, or OP Units, as applicable, could freely trade their newly received ARCM common stock. ARCM was expected to be externally managed by the Company. On May 21, 2014, the Company announced that it had reassessed its plans for the multi-tenant shopping center portfolio and entered into a letter of intent to sell such portfolio to an affiliate of Blackstone Real Estate Partners VII L.P. (“Blackstone”), expecting to finalize pertinent documentation related thereto within 30 days of such date. The properties included in such sale were the same properties that would have been spun off into ARCM and, consequently, the Company abandoned its proposed spin- off at such time. On June 11, 2014, indirect subsidiaries of the Company entered into an Agreement of Purchase and Sale with BRE DDR Retail Holdings III LLC (the “Blackstone/DDR Joint Venture”), an entity indirectly jointly owned by affiliates of Blackstone and DDR Corp. (“DDR”), pursuant to which the parties subsequently consummated the sale of the Company’s multi- tenant shopping center portfolio. See Note 5 – Real Estate Investments for further discussion on the sale of the properties, which closed on October 17, 2014. Note 7 – Investment Securities, at Fair Value Investment securities are considered available-for-sale and, therefore, increases or decreases in the fair value of these investments are recorded in accumulated other comprehensive income (loss) as a component of equity in the consolidated balance sheets unless the securities are considered to be other-than-temporarily impaired at which time the losses are reclassified to expense. F-45 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2016 – (Continued) The following tables detail the unrealized gains and losses on investment securities as of December 31, 2016 and December 31, 2015 (in thousands): CMBS CMBS December 31, 2016 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value 48,297 $ 1,248 $ (2,330) $ 47,215 December 31, 2015 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value 52,115 $ 2,169 $ (980) $ 53,304 $ $ As of December 31, 2016 and December 31, 2015, the Company owned eight and ten CMBS, respectively, with an estimated aggregate fair value of $47.2 million and $53.3 million, respectively. During the year ended December 31, 2016, two CMBS with a combined carrying value of less than $0.1 million at December 31, 2015, were paid in full or reached maturity. The consideration received approximated carrying value. The Company generally receives monthly payments of principal and interest on the CMBS. As of December 31, 2016, the Company earned interest on the CMBS at rates ranging between 5.88% and 8.95%. As of December 31, 2016, the fair value of five CMBS were below their amortized cost. In estimating other-than-temporary impairment losses, management considers a variety of factors, including: (i) whether the Company has the intent to sell the impaired security, (ii) whether the Company expects to hold the investment for a period of time sufficient to allow for anticipated recovery in fair value, and (iii) whether the company expects to recover the entire amortized cost basis of the security. The Company believes that none of the unrealized losses on investment securities are other-than-temporary as management expects the Company will fully recover the entire amortized cost basis of all securities. As of December 31, 2016, the Company had no other-than-temporary impairment losses. In connection with the Cole Merger, the Company acquired 15 CMBS with an estimated aggregate fair value of $151.2 million. In September of 2014, the Company sold the 15 CMBS acquired in the Cole Merger for proceeds of $158.0 million, and recorded a gain of $6.2 million, which is included in other income, net in the accompanying consolidated statements of operations. During the year ended December 31, 2015, the Company recorded a $65,000 gain on the sale of investment securities, which is included in other income, net in the accompanying consolidated statements of operations. No such gain was recorded for the year ended December 31, 2016. The scheduled maturity of the Company’s CMBS as of December 31, 2016 are as follows (in thousands): Due within one year Due after one year through five years Due after five years through 10 years Due after 10 years Total Note 8 – Mortgage Notes Receivable December 31, 2016 Amortized Cost Fair Value $ $ — $ 21,408 12,836 14,053 48,297 $ — 22,301 10,531 14,383 47,215 As of December 31, 2016, the Company owned nine mortgage notes receivable with a weighted-average interest rate of 6.3% and weighted-average years to maturity of 13.0 years. During the year ended December 31, 2016, one note with a carrying value of $0.4 million at December 31, 2015, reached maturity and was paid in full. The following table details the mortgage notes receivable as of December 31, 2016 (dollar amounts in thousands): Outstanding Balance Carrying Value $ 24,776 $ 22,764 Interest Rate Range 5.9% – 7.2% Maturity Date Range May 2020 – January 2033 F-46 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2016 – (Continued) The Company’s mortgage notes receivable are comprised primarily of fully-amortizing or nearly fully-amortizing first mortgage loans. The Company has one mortgage note receivable where the Company does not receive monthly payments of principal and interest but rather the interest is capitalized into the outstanding balance that is due at maturity. The mortgage notes receivable are primarily on commercial real estate, each leased to a single tenant. Therefore, the Company’s monitoring of the credit quality of its mortgage notes receivable is focused primarily on an analysis of the tenant, including review of tenant quality and ratings, trends in the tenant’s industry and general economic conditions and an analysis of measures of collateral coverage, such as an estimate of the loan-to-value ratio (principal amount outstanding divided by the estimated value of the property) and its remaining term until maturity. The following table summarizes the scheduled aggregate principal payments due to the Company on the mortgage notes receivable subsequent to December 31, 2016 (in thousands): Due within one year Due after one year through five years Due after five years through 10 years Due after 10 years(1) Total ____________________________________ Outstanding Balance $ $ 1,104 5,363 7,018 15,154 28,639 (1) Includes additional $3.9 million of interest that will be capitalized into the outstanding balance of the mortgage note receivable subsequent to December 31, 2016. Unsecured Note Reserve During the year ended December 31, 2015, the Company assessed the collectability of an unsecured note held with an affiliate of the Former Manager after the December debt service payment was not paid. The Company assessed the liquidity of the borrower, the lien position of the note and the other obligations of the borrower. Based on the analysis, the Company concluded that it was unlikely that the unsecured note will be repaid and recorded a reserve for loan loss equal to the $15.3 million carrying value of the note for the three months ended December 31, 2015. No principal or interest payments have been received relating to the unsecured note during the year ended December 31, 2016. Note 9 – Rent and Tenant Receivables and Other Assets, Net Rent and tenant receivables and other assets, net consisted of the following as of December 31, 2016 and December 31, 2015 (in thousands): Accounts receivable, net (1) Straight-line rent receivable Deferred costs, net (2) Prepaid expenses Leasehold improvements, property and equipment, net (3) Restricted escrow deposits Deferred tax asset and tax receivable Program development costs, net (4) Interest rate swap assets, at fair value Other assets, net (5) Total ___________________________________ December 31, 2016 49,148 $ 201,584 16,154 6,814 14,702 5,741 31,113 3,161 199 2,089 330,705 $ December 31, 2015 44,798 $ 161,079 26,110 9,773 18,180 1,190 25,287 12,855 1,892 2,473 303,637 $ (1) Allowance for doubtful accounts was $6.0 million and $6.6 million as of December 31, 2016 and December 31, 2015, respectively. (2) Amortization expense for deferred costs related to the revolving credit facility totaled $10.4 million, $10.7 million and $10.8 million for the years ended December 31, 2016, 2015 and 2014, respectively. Accumulated amortization for deferred costs related to the revolving credit facility were $29.8 million and $19.4 million as of December 31, 2016 and December 31, 2015, respectively. F-47 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2016 – (Continued) (3) Amortization expense for leasehold improvements totaled $2.3 million, $2.2 million and $1.3 million for the years ended December 31, 2016, 2015 and 2014, respectively, inclusive of write offs of $1.0 million for the year ended December 31, 2016. Accumulated amortization was $3.5 million and $2.6 million as of December 31, 2016 and December 31, 2015, respectively. Depreciation expense for property and equipment totaled $3.4 million, $2.1 million and $1.6 million for the years ended December 31, 2016, 2015 and 2014, respectively, inclusive of write offs of $1.2 million for the year ended December 31, 2016. Accumulated depreciation was $3.9 million and $3.7 million as of December 31, 2016 and December 31, 2015, respectively. (4) As of December 31, 2016 and December 31, 2015, the Company had reserves of $31.7 million and $34.8 million, respectively, relating to the program development costs. (5) Net of $1.6 million of interest receivable reserves as of December 31, 2016. No such reserves were recorded at December 31, 2015. Note 10 – Fair Value Measures The Company determines fair value based on quoted prices when available or through the use of alternative approaches, such as discounting the expected cash flows using market interest rates commensurate with the credit quality and duration of the investment. U.S. GAAP guidance defines three levels of inputs that may be used to measure fair value: Level 1 – Quoted prices in active markets for identical assets and liabilities that the reporting entity has the ability to access at the measurement date. Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset and liability or can be corroborated with observable market data for substantially the entire contractual term of the asset or liability. Level 3 – Unobservable inputs reflect the entity’s own assumptions about the assumptions that market participants would use in the pricing of the asset or liability and are consequently not based on market activity, but rather through particular valuation techniques. The determination of where an asset or liability falls in the hierarchy requires significant judgment and considers factors specific to the asset or liability. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company evaluates its hierarchy disclosures each quarter and depending on various factors, it is possible that an asset or liability may be classified differently from quarter to quarter. Changes in the type of inputs may result in a reclassification for certain assets. There were no transfers between Level 1, Level 2 or Level 3 of the fair value hierarchy during the year ended December 31, 2016. The Company expects that changes in classifications between levels will be infrequent. Items Measured at Fair Value on a Recurring Basis The following tables present information about the Company’s assets and liabilities measured at fair value on a recurring basis, based on market rates of the Company’s positions and other observable interest rates as discussed in Note 7 – Investment Securities, at Fair Value and Note 12 – Derivatives and Hedging Activities, as of December 31, 2016 and December 31, 2015, aggregated by the level in the fair value hierarchy within which those instruments fall (in thousands): Assets: CMBS Interest rate swap assets Total assets Liabilities: Derivative liabilities Assets: CMBS Derivative assets Total assets Liabilities: Derivative liabilities Level 1 Level 2 Level 3 Balance as of December 31, 2016 — $ — — $ — $ 199 199 $ 47,215 — 47,215 $ $ 47,215 199 47,414 — $ (3,547) $ — $ (3,547) Level 1 Level 2 Level 3 Balance as of December 31, 2015 — $ — — $ — $ 1,892 1,892 $ 53,304 — 53,304 $ $ 53,304 1,892 55,196 — $ (6,922) $ — $ (6,922) $ $ $ $ $ $ F-48 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2016 – (Continued) CMBS – The Company’s CMBS are carried at fair value and are valued using Level 3 inputs. The Company used estimated non-binding quoted market prices from the trading desks of financial institutions that are dealers in such securities for similar CMBS tranches that actively participate in the CMBS market. Broker quotes are only indicative of fair value and may not necessarily represent what the Company would receive in an actual trade for the applicable instrument. Management determines that the prices are representative of fair value through its knowledge of and experience in the market. The significant unobservable input used in valuing the CMBS is the discount rate or market yield used to discount the estimated future cash flows expected to be received from the underlying investment, which include both future principal and interest payments. Significant increases or decreases in the discount rate or market yield would result in a decrease or increase in the fair value measurement. The following risks are included in the consideration and selection of discount rates or market yields: risk of default, rating of the investment and comparable company investments. Derivative Assets and Liabilities – The Company’s derivative financial instruments relate to interest rate swaps, discussed in Note 12 – Derivatives and Hedging Activities. The valuation of derivative instruments is determined using a discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, as well as observable market-based inputs, including interest rate curves and implied volatilities. In addition, credit valuation adjustments are incorporated into the fair values to account for the Company’s potential nonperformance risk and the performance risk of the counterparties. Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with those derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by the Company and its counterparties. However, as of December 31, 2016, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of the Company’s derivatives. As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy. The fair value of short-term financial instruments such as cash and cash equivalents, restricted cash, due to affiliates and accounts payable approximate their carrying value in the accompanying consolidated balance sheets due to their short-term nature and are classified as Level 1 under the fair value hierarchy. The following are reconciliations of the changes in assets and liabilities with Level 3 inputs in the fair value hierarchy for the years ended December 31, 2016 and 2015 (in thousands): Beginning balance, January 1, 2016 Total gains and losses: Unrealized loss included in other comprehensive income, net Purchases, issuances, settlements and amortization: Principal payments received Amortization included in net income Ending balance, December 31, 2016 Beginning balance, January 1, 2015 Total gains and losses: Unrealized loss included in other comprehensive income, net Purchases, issuances, settlements and amortization: Principal payments received Amortization included in net income Ending balance, December 31, 2015 F-49 CMBS $ 53,304 (2,271) (4,077) 259 47,215 CMBS 58,646 (977) (4,504) 139 53,304 $ $ $ VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2016 – (Continued) The fair values of the Company’s financial instruments that are not reported at fair value in the consolidated balance sheets are reported below (dollar amounts in thousands): Level Carrying Amount at December 31, 2016 Fair Value at December 31, 2016 Carrying Amount at December 31, 2015 Fair Value at December 31, 2015 Assets: Mortgage notes receivable Liabilities (1): Mortgage notes payable and other debt, net Corporate bonds, net Convertible debt, net Credit facility Total liabilities 3 2 2 2 2 $ $ $ 22,764 $ 30,460 $ 24,238 $ 31,842 2,687,739 2,248,063 987,106 500,000 6,422,908 $ $ 2,713,155 2,273,850 1,004,733 500,000 6,491,738 $ $ 3,133,005 2,547,255 982,217 1,460,000 8,122,477 $ $ 3,240,153 2,580,786 1,007,042 1,536,264 8,364,245 _______________________________________________ (1) Current and prior period liabilities’ carrying and fair values exclude net deferred financing costs. Mortgage notes receivable – The fair value of the Company’s fixed-rate loan portfolio is estimated with a discounted cash flow analysis, utilizing scheduled cash flows and discount rates estimated by management to approximate market interest rates. Debt – The fair value is estimated by an independent third party using a discounted cash flow analysis, based on management’s estimates of observable market interest rates. Corporate bonds and convertible debt are valued using quoted market prices in active markets with limited trading volume when available. Items Measured at Fair Value on a Non-Recurring Basis Certain financial and nonfinancial assets and liabilities are measured at fair value on a nonrecurring basis and are subject to fair value adjustments in certain circumstances, such as when there is evidence of impairment. Real Estate Assets As discussed in Note 5 – Real Estate Investments, during the year ended December 31, 2016, real estate assets related to 153 properties were deemed to be impaired and their carrying values were reduced to their estimated fair value of $485.4 million, resulting in impairment charges of $182.8 million. During the year ended December 31, 2015, real estate assets related to 202 properties were deemed to be impaired and their carrying values were reduced to their estimated fair value of $248.3 million, resulting in impairment charges of $91.8 million. During the year ended December 31, 2014, real estate assets related to 16 properties were deemed to be impaired and their carrying values were reduced to their estimated fair values of $99.0 million, resulting in impairment charges of $100.5 million. The Company estimates fair values using Level 3 inputs and using a combined income and market approach, specifically using discounted cash flow analysis and recent comparable sales transactions. The evaluation of real estate assets for potential impairment requires the Company’s management to exercise significant judgment and to make certain key assumptions, including, but not limited to, the following: (1) capitalization rate; (2) discount rates; (3) number of years property will be held; (4) property operating expenses; and (5) re-leasing assumptions including number of months to re- lease, market rental income and required tenant improvements. There are inherent uncertainties in making these estimates such as market conditions and performance and sustainability of the Company’s tenants. For the Company’s impairment tests for the real estate assets during the year ended December 31, 2016, the Company used a range of discount rates from of 6.7% to 9.0% with a weighted-average rate of 8.0% and capitalization rates from 6.7% to 12.5% with a weighted-average rate of 7.9%. The following table presents the impairment charges by asset class recorded during the years ended December 31, 2016 and 2015 (dollar amounts in thousands): Properties impaired Asset classes impaired: Investment in real estate assets, net Investment in direct financing leases, net Below-market lease liabilities, net Total impairment loss _______________________________________________ (1) Includes 101 properties disposed of during the year ended December 31, 2016. F-50 Year Ended December 31, 2016 153 Year Ended December 31, 2015 202 (1) $ $ 183,240 — (421) 182,819 $ $ 88,465 4,020 (730) 91,755 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2016 – (Continued) Goodwill and Intangible Assets The Company tested the goodwill allocated to the Cole Capital reporting unit for impairment and recorded goodwill impairment charges of $120.9 million, $139.7 million and $223.1 million for the years ended December 31, 2016, 2015 and 2014, respectively. The Company also tested the goodwill allocated to the REI reporting unit for impairment during the years ended December 31, 2016, 2015 and 2014. The fair values of the REI reporting unit were estimated by management to be $18.3 billion, $19.7 billion and $20.4 billion at the 2016, 2015, and 2014 measurement dates, respectively, which exceeded the carrying values by 21.0%, 13.0% and 5.5%, respectively. As such, no goodwill impairment was recorded during the years ended December 31, 2016, 2015 or 2014 to the REI reporting unit. In connection with the annual goodwill impairment test, the fair value of the intangible assets were also analyzed, as discussed in Note 4 – Goodwill and Other Intangibles. Based on this analysis, there were no impairment charges recorded for the year ended December 31, 2016. The Company recorded impairment charges of $73.7 million and $86.4 million for the years ended December 31, 2015 and 2014, respectively. The Company estimated the fair value of the two reporting units, REI and Cole Capital, using both the income and market approach in evaluating goodwill for impairment. The assumptions utilized in the income approach include, but are not limited to, revenue growth rates, future cash flows and a discount rate. The assumptions utilized in the market approach include, but are not limited to, future cash flows, the selection of comparable companies and measures of operating results and pricing multiples. AFFO and EBITDA multiples for market comparable companies were used to estimate the fair value of the REI and Cole Capital reporting units, respectively, by applying those multiples to the projected financial information prepared by management. The uncertainties associated with the fair value assumptions for Cole Capital include, but are not limited to: (i) the Company’s ability to timely reinstate certain selling agreements that were suspended as a result of the Audit Committee Investigation and the resulting restatements, (ii) the timing and extent of capital raised and deployed on behalf of the Cole REITs, (iii) the actual timing of closing an offering or executing a liquidity event on behalf of a Cole REIT, and (iv) operations of future managed real estate programs. The uncertainties associated with the fair value assumptions for the goodwill allocated to the REI reporting unit are the same as the uncertainties for real estate assets. If all other assumptions were held constant, increasing the discount rate by 1.0% for Cole Capital would increase the 2016 goodwill impairment charge by approximately $6.5 million or 5.4%. If all other assumptions were held constant, increasing the discount rate by 1.0% would decrease the percentage that the 2016 fair value exceeds the 2016 carrying value of the REI reporting unit from 21.0% to 8.6%. F-51 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2016 – (Continued) Note 11 – Debt As of December 31, 2016, the Company had $6.4 billion of debt outstanding, including net premiums and net deferred financing costs, with a weighted-average years to maturity of 4.4 years and a weighted-average interest rate of 4.2%. The following table summarizes the carrying value of debt as of December 31, 2016 and December 31, 2015, and the debt activity for the year ended December 31, 2016 (in thousands): Balance as of December 31, 2015 Debt Issuances Repayments, Extinguishment and Assumptions Accretion and Amortization Balance as of December 31, 2016 Year Ended December 31, 2016 Mortgage notes payable: Outstanding balance Net premiums (1) Deferred costs Other debt: Outstanding balance Premium (1) Mortgages and other debt, net Corporate bonds: Outstanding balance Discount (2) Deferred costs Corporate bonds, net Convertible debt: Outstanding balance Discount (2) Deferred costs Convertible debt, net Credit facility: Outstanding balance Deferred costs (3) Credit facility, net 2016 Term Loan: Outstanding balance Deferred costs 2016 Term Loan, net $ $ 3,039,882 59,402 (21,020) $ 3,112 — (27) (413,045) $ (2,313) 522 33,463 258 3,111,985 2,550,000 (2,745) (10,922) 2,536,333 1,000,000 (17,779) (19,327) 962,894 1,460,000 (11,410) 1,448,590 — — — — — 3,085 1,000,000 — (17,137) 982,863 — — — — 1,033,000 — 1,033,000 300,000 (2,764) 297,236 (12,516) — (427,352) (1,300,000) 73 1,898 (1,298,029) — — — — (1,993,000) 4,313 (1,988,687) (300,000) 2,588 (297,412) — $ (20,338) 3,892 — (166) (16,612) — 735 4,322 5,057 — 4,885 5,561 10,446 — 3,675 3,675 — 176 176 2,629,949 36,751 (16,633) 20,947 92 2,671,106 2,250,000 (1,937) (21,839) 2,226,224 1,000,000 (12,894) (13,766) 973,340 500,000 (3,422) 496,578 — — — Total debt $ 8,059,802 $ 2,316,184 $ (4,011,480) $ 2,742 $ 6,367,248 ____________________________________ (1) Net premiums on mortgage notes payable and other debt were recorded upon the assumption of the respective debt instruments in relation to the various mergers and acquisitions. Amortization of these net premiums is recorded as a reduction to interest expense over the remaining term of the respective debt instruments using the effective-interest method. (2) Discounts on the corporate bonds and convertible debt were recorded based upon the fair value of the respective debt instruments as of the respective issuance dates. Amortization of these discounts is recorded as an increase to interest expense over the remaining term of the respective debt instruments using the effective-interest method. (3) Deferred costs relate to the term portion of the credit facility. F-52 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2016 – (Continued) Mortgage Notes Payable The Company’s mortgage notes payable consisted of the following as of December 31, 2016 (dollar amounts in thousands): Fixed-rate debt (1) Variable-rate debt Total (5) Encumbered Properties 618 1 619 Gross Carrying Value of Collateralized Properties (2) 5,083,978 $ 30,273 5,114,251 $ Outstanding Balance 2,618,652 11,297 2,629,949 $ $ Weighted-Average Interest Rate (3) (4) 4.95% 3.79% 4.95% Weighted-Average Years to Maturity (4) 4.6 0.6 4.6 ____________________________________ (1) Includes $242.2 million of variable-rate debt fixed by way of interest rate swap arrangements. (2) Gross carrying value is gross real estate assets, including investment in direct financing leases, net of gross real estate liabilities. (3) Weighted-average interest rate for variable-rate debt represents the interest rate in effect as of December 31, 2016. (4) Weighted average years remaining to maturity is computed using the anticipated repayment date as specified in each loan agreement, where applicable. Weighted average interest rate is computed using the interest rate in effect until the anticipated repayment date. Should the loan not be repaid at the anticipated repayment date, the applicable interest rate shall increase as specified in the respective loan agreement until the extended maturity date. (5) The table above does not include the loan amount associated with an unconsolidated joint venture of $20.4 million, none of which is recourse to the Company. This loan has a secured fixed rate of 5.20% and a maturity date of July 2021, with weighted-average years to maturity of 4.5 years as of December 31, 2016. The Company’s mortgage loan agreements generally restrict corporate guarantees and require the maintenance of financial covenants, including maintenance of certain financial ratios (such as specified debt to equity and debt service coverage ratios). The mortgage loan agreements contain no dividend restrictions except in the event of default or when a distribution would drive liquidity below the applicable thresholds. At December 31, 2016, the Company believes it was in compliance with the financial covenants under the mortgage loan agreements, except for the loans in default described below, and had no restrictions on the payment of dividends. During the years ended December 31, 2016 and 2015, the Company repaid mortgage notes payable resulting in a gain on extinguishment of debt of $0.3 million and loss on extinguishment of debt of $0.1 million, respectively, due to the write-off of unamortized premiums, net of deferred financing costs and prepayment penalties, which are included in (loss) gain on extinguishment and forgiveness of debt, net in the accompanying consolidated statements of operations. On December 30, 2016, the Company received a notice of default from the lender of a non-recourse loan secured by 16 properties, which had an outstanding balance of $11.6 million on the notice date, due to the Company’s non-repayment of the respective loan balance at maturity. The Company and the lender are assessing options in relation to the default. On March 6, 2015, the Company received a notice of default from the lender of a non-recourse loan secured by two properties, which had an outstanding balance of $38.1 million on the notice date, due to the Company’s election not to make a reserve payment required per the loan agreement. The foreclosure sale of the first property securing the loan occurred during the three months ended June 30, 2016. As the loan was outstanding upon the foreclosure of the first property, the Company recorded a loss of $3.4 million in gain (loss) on disposition of real estate and held for sale assets, net in the accompanying consolidated statements of operations for the year ended December 31, 2016. The foreclosure proceedings on the second property that secured the loan were completed during the three months ended September 30, 2016. As a result of the foreclosure sale and deed transfer of both properties securing the loan, the Company recognized a gain on forgiveness of debt of $19.1 million, which is included in (loss) gain on extinguishment and forgiveness of debt, net in the accompanying consolidated statements of operations. On January 13, 2015, a substantially vacant office building in Bethesda, Maryland was foreclosed upon after the Company elected to stop making debt service payments on the related non-recourse loan with an outstanding balance of $53.8 million as of December 31, 2014. As a result of the foreclosure, the Company forfeited its right to the property and was relieved of all obligations on the non-recourse loan. During the year ended December 31, 2015, the Company recorded a gain on the forgiveness of debt of $4.9 million, which is included in (loss) gain on extinguishment and forgiveness of debt, net in the accompanying consolidated statements of operations. F-53 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2016 – (Continued) The following table summarizes the scheduled aggregate principal repayments due on mortgage notes subsequent to December 31, 2016 (in thousands): 2017 2018 2019 2020 2021 Thereafter Total Other Debt Total 287,094 209,259 229,547 282,223 383,110 1,238,716 2,629,949 $ $ As of December 31, 2016, the Company had a secured term loan from KBC Bank, N.V. with an outstanding principal balance of $20.9 million and remaining unamortized premium of $0.1 million (the “KBC Loan”). The interest coupon on the KBC Loan is fixed at 5.81% annually until its maturity in January 2018. The KBC Loan is non-recourse to the Company, subject to limited non-recourse exceptions. The KBC Loan provides for monthly payments of both principal and interest. The scheduled principal repayments subsequent to December 31, 2016 are $7.7 million and $13.2 million for the years ended 2017 and 2018, respectively. The KBC Loan is secured by various investment assets held by the Company. The following table is a summary of the outstanding balance and carrying value of the collateral by asset type as of December 31, 2016 (in thousands): Mortgage notes receivable Intercompany mortgage loans CMBS Total Corporate Bonds Outstanding Balance 6,791 $ 1,046 13,110 20,947 $ Collateral Carrying Value 19,204 $ 2,648 34,114 55,966 $ As of December 31, 2016, the OP had $2.25 billion aggregate principal amount of senior unsecured notes (the “Senior Notes”) outstanding comprised of the following (dollar amounts in thousands): Outstanding Balance December 31, 2016 Interest Rate Maturity Date 2019 Senior Notes 2021 Senior Notes 2024 Senior Notes 2026 Senior Notes Total balance and weighted-average interest rate $ 750,000 400,000 500,000 600,000 2,250,000 June 1, 2021 3.000% February 6, 2019 4.125% 4.600% February 6, 2024 4.875% 4.056% June 1, 2026 On February 6, 2014, the Operating Partnership issued, in a private offering, $2.55 billion aggregate principal amount of senior unsecured notes consisting of $1.3 billion aggregate principal amount of 2.000% senior notes due 2017 (the “2017 Senior Notes”), $750.0 million aggregate principal amount of 3.00% senior notes due 2019 (the “2019 Senior Notes”) and $500.0 million aggregate principal amount of 4.60% senior notes due 2024 (the “2024 Senior Notes”). On June 2, 2016, the Company closed its senior note offering, consisting of (i) $0.4 billion aggregate principal amount of 4.125% Senior Notes due June 1, 2021 (the “2021 Senior Notes”) and (ii) $0.6 billion aggregate principal amount of 4.875% Senior Notes due June 1, 2026 (the “2026 Senior Notes”) (the offering of the 2021 Senior Notes, collectively with the 2026 Senior Notes, the “2016 Bond Offering”). On July 5, 2016, the Company redeemed the 2017 Senior Notes, plus accrued and unpaid interest thereon and the required make-whole premium. Upon consummation of these transactions, the Company had no 2017 Senior Notes outstanding. The Company recorded a loss related to the early extinguishment of $13.2 million which is included in (loss) gain on extinguishment and forgiveness of debt, net in the accompanying consolidated statements of operations. F-54 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2016 – (Continued) The Senior Notes are guaranteed by the General Partner. The OP may redeem all or a part of any series of the Senior Notes at any time, at its option, for the redemption prices set forth in the indenture governing the Senior Notes. If the redemption date is 30 or fewer days prior to the maturity date with respect to the 2019 Senior Notes and the 2021 Senior Notes or is 90 or fewer days prior to the maturity date with respect to the 2024 Senior Notes and the 2026 Senior Notes, the redemption price will equal 100% of the principal amount of the Senior Notes of the applicable series to be redeemed, plus accrued and unpaid interest on the amount being redeemed to, but excluding, the applicable redemption date. The Senior Notes are registered under the Securities Act of 1933, as amended, (the “Securities Act”) and are freely transferable. The indenture governing both our existing and new Senior Notes requires us to maintain financial ratios which include maintaining (i) a maximum limitation on incurrence of total debt less than or equal to 65% of Total Assets (as defined in the indenture), (ii) maximum limitation on incurrence of secured debt less than or equal to 40% of Total Assets (as defined in the indenture), (iii) a minimum debt service coverage ratio of at least 1.5x and (iv) a minimum unencumbered asset value of at least 150% of the aggregate principal amount of all of the outstanding Unsecured Debt (as defined in the indenture). The Company believes it was in compliance with the financial covenants pursuant to the indenture governing the Senior Notes as of December 31, 2016. On January 22, 2015, the Company entered into an agreement in principle with an ad hoc group of holders (the “Senior Noteholder Group”) of the Senior Notes, by which the Senior Noteholder Group agreed not to issue a notice of default due to the Company’s failure to timely deliver certain financial statements in 2014. The Company and the OP filed the required financial statements with the SEC on March 2, 2015. Convertible Debt On July 29, 2013, the Company issued $300.0 million aggregate principal amount of convertible senior notes due 2018 (the “2018 Convertible Notes”) and, pursuant to an over-allotment exercise by the underwriters of such 2018 Convertible Notes offering, issued an additional $10.0 million aggregate principal amount of its 2018 Convertible Notes on August 1, 2013. On December 10, 2013, the Company issued an additional $287.5 million of the 2018 Convertible Notes by reopening the indenture governing the 2018 Convertible Notes. Also on December 10, 2013, the Company issued $402.5 million aggregate principal amount of convertible senior notes due 2020 (the “2020 Convertible Notes” and, together with the 2018 Convertible Notes, the “Convertible Notes”). As of December 31, 2016, the outstanding aggregate balance of the Convertible Notes was $1.0 billion. The OP has issued corresponding identical convertible notes to the General Partner. The following table presents each of the 2018 Convertible Notes and the 2020 Convertible Notes listed below with their respective terms (dollar amounts in thousands): 2018 Convertible Notes 2020 Convertible Notes Total balance and weighted-average interest rate ____________________________________ Outstanding Balance (1) $ $ 597,500 402,500 1,000,000 Interest Rate 3.00% Conversion Rate (2) 60.5997 Maturity Date August 1, 2018 3.75% 3.30% 66.7249 December 15, 2020 (1) Excludes the carrying value of the conversion options recorded within additional paid-in capital of $28.6 million and the unamortized discount of $12.9 million as of December 31, 2016. The discount will be amortized over the remaining term of 2.5 years. (2) Conversion rate represents the amount of the General Partner OP Units per $1,000 principal amount of Convertible Notes converted as of December 31, 2016, as adjusted in accordance with the applicable indentures as a result of cash dividend payments. The 2018 Convertible Notes may be converted into cash, shares of the Company’s common stock or a combination thereof at the Company’s option, in limited circumstances prior to February 1, 2018 and may be converted into such consideration at any time on or after February 1, 2018. The 2020 Convertible Notes may be converted into cash, shares of the Company’s common stock or a combination thereof, in limited circumstances prior to June 15, 2020, and may be converted into such consideration at any time on or after June 15, 2020. There were no changes to the terms of the Convertible Notes and the Company believes it was in compliance with the financial covenants pursuant to the indenture governing the Convertible Notes as of December 31, 2016. On January 22, 2015, the Company received a notice from the trustee of the indentures (the “Convertible Indentures”) governing each of the Convertible Notes of the Company’s failure to timely deliver certain financial statements in 2014. Pursuant to the terms of the Convertible Indentures, the Company had 60 days following its receipt of a notice of default to deliver the required financial statements, after which such failure would become an event of default under each of the Convertible Indentures. The Company and the OP filed the required financial statements with the SEC on March 2, 2015. F-55 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2016 – (Continued) Credit Facility The General Partner, as guarantor, and the OP, as borrower, are parties to an unsecured credit facility (the “Credit Facility”) pursuant to a credit agreement, dated as of June 30, 2014, as amended, with Wells Fargo Bank, National Association (“Wells Fargo”), as administrative agent and other lenders party thereto (the “Credit Agreement”). In 2014, the General Partner, as guarantor, and the OP, as borrower entered into certain agreements with respect to the Credit Agreement which provided for, among other things, an extension of the delivery date of certain financial statements and other deliverables, the suspension of the payment of dividends until such financial statements and other deliverables were provided and a reduction to the maximum amount of indebtedness under the Credit Agreement to $3.6 billion. In connection with the agreements, the Company agreed to pay certain customary fees to the consenting lenders and agreed to reimburse certain customary expenses of the arrangers. The Company and the OP filed the required financial statements with the SEC on March 2, 2015. On July 31, 2015, the General Partner and the OP entered into the Second Amendment to Credit Agreement (the “Second Amendment”) with Wells Fargo and other lenders party to the Credit Agreement. Pursuant to the Second Amendment, the maximum capacity under the Credit Facility was reduced from $3.6 billion to $3.3 billion, which included a reduction in the size of the $2.45 billion revolving credit facility to $2.3 billion and the elimination of the $150.0 million multicurrency revolving credit facility. The maximum aggregate dollar amount of letters of credit that was allowed outstanding at any one time under the Credit Facility was reduced from $50.0 million to $25.0 million. In respect of financial covenants, the Second Amendment reduced the Company’s minimum Unencumbered Asset Value (as defined in the Credit Agreement) from $10.5 billion to $8.0 billion. As of December 31, 2016, the Credit Facility allowed for maximum borrowings of $2.8 billion, consisting of a $0.5 billion term loan facility (the “Credit Facility Term Loan”) and a $2.3 billion revolving credit facility. The maximum aggregate dollar amount of letters of credit that may be outstanding at any one time under the Credit Facility is $25.0 million. During the year ended December 31, 2016, the Company repaid all of the outstanding borrowings under its revolving credit facility. Additionally, the Company repaid $0.5 billion of the Credit Facility Term Loan, resulting in the write-off of unamortized deferred financing costs of $4.3 million, which is included in (loss) gain on extinguishment and forgiveness of debt, net in the accompanying consolidated statements of operations. As discussed in Note 12 – Derivatives and Hedging Activities, in connection with the early repayment of a portion of the Credit Facility Term Loan, the Company terminated two of its interest rate swaps, resulting in the reclassification of $3.3 million from accumulated other comprehensive loss to earnings, which is included in loss on derivative instruments, net in the accompanying consolidated statements of operations. The remaining outstanding balance on the Credit Facility Term Loan of $0.5 billion is, in effect, fixed through the use of derivative instruments used to hedge interest rate volatility. Including the spread, which can vary based on the General Partner’s credit rating, the interest rate on this portion was 3.25% at December 31, 2016. As of December 31, 2016, a maximum of $2.3 billion was available to the OP for future borrowings, subject to borrowing availability. The revolving credit facility generally bears interest at an annual rate of LIBOR plus 1.00% to 1.80% or Base Rate plus 0.00% to 0.80% (based upon the General Partner’s then current credit rating). “Base Rate” is defined as the highest of the prime rate, the federal funds rate plus 0.50% or a floating rate based on one month LIBOR, determined on a daily basis. The Credit Facility Term Loan generally bears interest at an annual rate of LIBOR plus 1.15% to 2.05%, or Base Rate plus 0.15% to 1.05% (based upon the General Partner’s then current credit rating). In addition, the Credit Agreement provides the flexibility for interest rate auctions, pursuant to which, at the Company’s election, the Company may request that lenders make competitive bids to provide revolving loans, which competitive bids may be at pricing levels that differ from the foregoing interest rates. The Credit Agreement provides for monthly interest payments under the Credit Facility. In the event of default, at the election of a majority of the lenders (or automatically upon a bankruptcy event of default with respect to the OP or the General Partner), the commitments of the lenders under the Credit Facility will mature, and payment of any unpaid amounts in respect of the Credit Facility will be accelerated. The revolving credit facility and the Credit Facility Term Loan both terminate on June 30, 2018, in each case, unless extended in accordance with the terms of the Credit Agreement. The Credit Agreement provides for a one-year extension option with respect to each of the revolving credit facility and the Credit Facility Term Loan, exercisable at the Company’s election and subject to certain customary conditions, as well as certain customary “amend and extend” provisions. At any time, upon timely notice by the OP and subject to any breakage fees, the OP may prepay borrowings under the Credit Facility (subject to certain limitations applicable to the prepayment of any loans obtained through an interest rate auction, as described above). The OP incurs a fee equal to 0.15% to 0.25% per annum (based upon the General Partner’s then current credit rating) multiplied by the commitments (whether or not utilized) in respect of the revolving credit facility. In addition, the OP incurs customary administrative agent, letter of credit issuance, letter of credit fronting, extension and other fees. F-56 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2016 – (Continued) The Credit Facility requires restrictions on corporate guarantees, as well as the maintenance of financial covenants, including the maintenance of certain financial ratios (such as specified debt to equity and debt service coverage ratios) and the maintenance of a minimum net worth. The key financial covenants in the Credit Facility, as defined and calculated per the terms of the Credit Agreement, include maintaining (i) a maximum leverage ratio less than or equal to 60%, (ii) a minimum fixed charge coverage ratio of at least 1.5x, (iii) a secured leverage ratio less than or equal to 45%, (iv) a total unencumbered asset value ratio less than or equal to 60%, (v) a minimum tangible net worth covenant of at least $5.5 billion, (vi) a minimum unencumbered interest coverage ratio of at least 1.75x and (vii) a minimum unencumbered asset value of at least $8.0 billion (up to 35% of which may be comprised of restaurant properties from June 30, 2016 to December 30, 2016 and up to 30% of which may be comprised of restaurant properties from December 31, 2016 on). The Company believes it was in compliance with the financial covenants pursuant to the Credit Agreement and is not restricted from accessing any borrowing availability under the Credit Facility as of December 31, 2016. 2016 Term Loan On June 2, 2016, the General Partner as guarantor, and the OP, as borrower, entered into a $300.0 million senior secured term loan facility (the “2016 Term Loan”), pursuant to a credit agreement (the “2016 Term Loan Agreement”) with JPMorgan Chase Bank, N.A., as the administrative agent, and certain other lenders party thereto. During the year ended December 31, 2016, the Company borrowed $300.0 million on the 2016 Term Loan and subsequently repaid the balance prior to December 31, 2016. In connection with the prepayment, the Company wrote-off the remaining unamortized deferred financing costs resulting in a loss of $2.6 million which is included in (loss) gain on extinguishment and forgiveness of debt, net in the accompanying consolidated statements of operations. Note 12 – Derivatives and Hedging Activities Risk Management Objective of Using Derivatives The Company may use derivative financial instruments, including interest rate swaps, caps, options, floors and other interest rate derivative contracts, to hedge all or a portion of the interest rate risk associated with its borrowings. The principal objective of such arrangements is to minimize the risks and/or costs associated with the Company’s operating and financial structure as well as to hedge specific anticipated transactions. The Company does not intend to utilize derivatives for purposes other than interest rate risk management. The use of derivative financial instruments carries certain risks, including the risk that the counterparties to these contractual arrangements are not able to perform under the agreements. To mitigate this risk, the Company only enters into derivative financial instruments with counterparties with high credit ratings and with major financial institutions with which the Company and its affiliates may also have other financial relationships. The Company does not anticipate that any of the counterparties will fail to meet their obligations. Cash Flow Hedges of Interest Rate Risk The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish these objectives, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. The effective portion of changes in the fair value of derivatives designated that qualify as cash flow hedges is recorded in accumulated other comprehensive income and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. During the year ended December 31, 2016 and 2015, such derivatives were used to hedge the variable cash flows associated with variable-rate debt. During the year ended December 31, 2016, the Company reclassified $5.5 million from accumulated other comprehensive income into interest expense as a result of the hedged forecasted transactions affecting earnings. The ineffective portion of the change in fair value of the derivatives designated that qualify as cash flow hedges is recognized directly in earnings. During the year ended December 31, 2016, the Company recorded a gain of $2.5 million in earnings related to the ineffective portion of the change in fair value of derivatives designated that qualify as cash flow hedges which is included in loss on derivatives in the accompanying consolidated statements of operations. The ineffectiveness is primarily attributable to the designation of acquired interest rate swaps with a non-zero fair value at inception associated with the Cole Merger. F-57 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2016 – (Continued) During the year ended December 31, 2016, the Company terminated two of its interest rate swaps in connection with the early repayment of a portion of the Credit Facility Term Loan, as discussed in Note 11 – Debt, and accelerated the reclassification of a portion of the amounts in other comprehensive income to earnings as a result of a portion of the hedged forecasted transactions becoming probable not to occur. A loss of $3.3 million was recorded in relation to the acceleration, which is included in loss on derivative instruments, net in the accompanying consolidated statements of operations. Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. During the next twelve months, the Company estimates that an additional $0.8 million will be reclassified from other comprehensive income as an increase to interest expense. As of December 31, 2016 and December 31, 2015, the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk (dollar amounts in thousands): Interest Rate Swaps Number of Instruments Notional Amount December 31, 2016 14 December 31, 2015 16 $ 690,816 $ 1,211,651 The table below presents the fair value of the Company’s derivative financial instruments as well as their classification in the consolidated balance sheets as of December 31, 2016 and December 31, 2015 (in thousands): Derivatives Designated as Hedging Instruments Interest rate swaps Interest rate swaps Balance Sheet Location Rent and tenant receivables and other assets, net Deferred rent, derivative and other liabilities December 31, 2015 December 31, 2016 1,794 $ $ 3 (6,922) (3,547) $ $ In January 2014, the Company entered into an interest rate lock agreement with a notional amount of $250.0 million (the “Treasury Lock Agreement”). The Treasury Lock Agreement, which had an original maturity date of February 12, 2014, was entered into to hedge part of the Company’s interest rate exposure associated with the variability in future cash flows attributable to changes in the 10-year U.S. treasury rates related to the planned issuance of debt securities in conjunction with the merger of Cole Capital with and into a wholly owned subsidiary of the Company. In connection with the Company’s offering of Senior Notes in February 2014, the Company settled the Treasury Lock Agreement for $3.9 million, which was accounted for as a cash flow hedge, recorded to other comprehensive loss and will be amortized into earnings over the 10-year term of the Treasury Lock. The Company recognized $0.5 million of interest expense for the year ended December 31, 2016 related to the Treasury Lock Agreement. Derivatives Not Designated as Hedging Instruments Derivatives not designated as hedges are not speculative and are used to manage the Company’s exposure to interest rate movements and other identified risks but do not meet the requirements to be classified as hedging instruments. A loss of $0.3 million related to the change in the fair value of derivatives not designated as hedging instruments was recorded in loss on derivative instruments, net in the accompanying consolidated statements of operations for the year ended December 31, 2016. The Company recorded a loss of $1.5 million for the year ended December 31, 2015. As of December 31, 2016 and December 31, 2015, the Company had the following outstanding interest rate derivative that was not designated as a qualifying hedging relationship (dollar amounts in thousands): Interest Rate Swap Number of Instruments Notional Amount December 31, 2016 1 51,400 $ December 31, 2015 1 51,400 $ The table below presents the fair value of the Company’s derivative financial instrument not designated as a hedge as well as its classification in the consolidated balance sheets as of December 31, 2016 and December 31, 2015 (in thousands): Derivatives Not Designated as Hedging Instruments Interest rate swaps Balance Sheet Location Rent and tenant receivables and other assets, net F-58 December 31, 2016 December 31, 2015 98 $ 196 $ VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2016 – (Continued) Tabular Disclosure of Offsetting Derivatives The table below details a gross presentation, the effects of offsetting and a net presentation of the Company’s derivatives as of December 31, 2016 and December 31, 2015 (in thousands). The net amounts of derivative assets or liabilities can be reconciled to the tabular disclosure of fair value. Offsetting of Derivative Assets and Liabilities Gross Amounts of Recognized Assets $ $ 199 1,892 December 31, 2016 December 31, 2015 Gross Amounts of Recognized Liabilities $ (3,547) $ $ (6,922) $ Gross Amounts Offset in the Consolidated Balance Sheets Net Amounts of Assets Presented in the Consolidated Balance Sheets 199 1,892 Net Amounts of Liabilities Presented in the Consolidated Balance Sheets $ $ (3,547) $ (6,922) $ — $ — $ Financial Instruments Cash Collateral Received Net Amount — $ — $ (3,348) — $ — $ (5,030) Credit Risk Related Contingent Features The Company has agreements with each of its derivative counterparties that contain a provision specifying that if the Company either defaults or is capable of being declared in default on any of its indebtedness, the Company could also be declared in default on its derivative obligations. As of December 31, 2016, the fair value of the interest rate derivatives in a net liability position, including accrued interest but excluding any adjustment for nonperformance risk related to these agreements, was $4.3 million. As of December 31, 2016, the Company has not posted any collateral related to these agreements and was not in breach of any provisions in these agreements. If the Company had breached any of these provisions, it could have been required to settle its obligations under the agreements at their aggregate termination value of $4.3 million at December 31, 2016. Note 13 – Supplemental Cash Flow Disclosures Supplemental cash flow information was as follows for the years ended December 31, 2016, 2015 and 2014 (in thousands): Year Ended December 31, 2016 2015 2014 317,170 20,279 $ $ 343,854 14,179 $ $ 330,652 7,616 7,701 3 149,281 9 38,050 — $ $ $ $ $ $ — $ $ 55,000 1,499 — $ 7,285,868 6,868 — 9,200 — — 301,532 461,111 $ — $ $ — $ $ — $ $ 133,817 53,798 425,021 Supplemental Disclosures: Cash paid for interest Cash paid for income taxes Non-cash investing and financing activities: Common stock issued in merger with Cole Accrued capital expenditures and real estate developments Accrued deferred financing costs Distributions declared and unpaid Accrued equity issuance costs Mortgage note payable relieved by foreclosure Mortgage notes payable assumed in real estate acquisition Mortgage notes payable assumed in real estate disposition $ $ $ $ $ $ $ $ $ $ F-59 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2016 – (Continued) Note 14 – Accounts Payable and Accrued Expenses Accounts payable and accrued expenses consisted of the following as of December 31, 2016 and December 31, 2015 (in thousands): Accrued interest Accrued real estate taxes Accrued legal fees Accounts payable Accrued other Total Note 15 – Commitments and Contingencies Litigation December 31, 2016 43,188 $ 38,877 17,827 5,030 41,215 146,137 $ December 31, 2015 56,273 $ 47,319 9,212 2,868 36,205 151,877 $ The Company is involved in various routine legal proceedings and claims incidental to the ordinary course of its business. There are no material legal proceedings pending against the Company, except as follows: Government Investigations and Litigation Relating to the Audit Committee Investigation As previously reported, on October 29, 2014, the Company filed a Current Report on Form 8-K (the “October 29 8-K”) reporting the Audit Committee’s conclusion, based on the preliminary findings of its investigation, that certain previously issued consolidated financial statements of the Company, including those included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013 and Quarterly Reports on Form 10-Q for the quarters ended March 31, 2014 and June 30, 2014, and related financial information should no longer be relied upon. The Company also reported that the Audit Committee had based its conclusion on the preliminary findings of its investigation into concerns regarding accounting practices and other matters that were first reported to the Audit Committee in early September 2014 and that the Audit Committee believed that an error in the calculation of adjusted funds from operations for the first quarter of 2014 had been identified but intentionally not corrected when the Company reported its financial results for the three and six months ended June 30, 2014. Prior to the filing of the October 29 8-K, the Audit Committee previewed for the SEC the information contained in the filing. Subsequent to that filing, the SEC provided notice that it had commenced a formal investigation and issued subpoenas calling for the production of various documents. In addition, the United States Attorney’s Office for the Southern District of New York contacted counsel for the Audit Committee and counsel for the Company with respect to this matter, and the Secretary of the Commonwealth of Massachusetts issued a subpoena calling for the production of various documents. The Company has been cooperating with these regulators in their investigations. In connection with these investigations, on September 8, 2016, the United States Attorney’s Office for the Southern District of New York announced the filing of criminal charges against the Company’s former Chief Financial Officer and former Chief Accounting Officer (the “Criminal Action”), as well as the fact that the former Chief Accounting Officer has pleaded guilty to the charges filed. The former Chief Financial Officer has pleaded not guilty, and his trial is currently scheduled to commence on June 12, 2017. Also on September 8, 2016, the SEC announced the filing of a civil complaint against the same two individuals in the United States District Court for the Southern District of New York (the “SEC Civil Action”). On October 12, 2016, the United States Attorney for the Southern District of New York filed a motion to intervene in and stay the SEC Civil Action until the conclusion of the Criminal Action. On November 1, 2016, the court in the SEC Civil Action granted the motion to intervene and granted the motion to stay with respect to all witness-related discovery, with some limited exceptions, as clarified in a subsequent ruling on December 15, 2016. As discussed below, the Company and certain of its former officers and current and former directors have been named as defendants in a number of lawsuits filed following the October 29 8-K, including class actions, derivative actions, and individual actions seeking money damages and other relief under the federal securities laws and state laws in both federal and state courts in New York, Maryland and Arizona. F-60 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2016 – (Continued) Between October 30, 2014 and January 20, 2015, the Company and certain of its former officers and current and former directors, among other individuals and entities, were named as defendants in ten securities class action complaints filed in the United States District Court for the Southern District of New York. The court consolidated these actions under the caption In re American Realty Capital Properties, Inc. Litigation, No. 15-MC-00040 (AKH) (the “SDNY Consolidated Securities Class Action”). The plaintiffs filed a second amended class action complaint on December 11, 2015, which asserted claims for violations of Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. Certain defendants, including the Company and the OP, filed motions to dismiss the second amended class action complaint (or portions thereof), which were granted in part and denied in part by the court at oral argument on June 1, 2016. The Company and the OP filed an answer to the second amended class action complaint on July 29, 2016. On September 8, 2016, the Court issued an order directing plaintiffs to file a third amended complaint to reflect certain prior rulings by the court. The third amended complaint was filed on September 30, 2016 and the defendants are not required to file new answers. In the September 8, 2016 order, the court also directed that document production should be substantially complete by December 15, 2016. On January 25, 2017, the court issued an order directing plaintiffs to file a motion for class certification by March 15, 2017 and defendants to file an opposition to the motion by May 5, 2017. The court scheduled a status conference on May 16, 2017. The Company, certain of its former officers and current and former directors, and the OP, among others, have also been named as defendants in additional individual securities fraud actions filed in the United States District Court for the Southern District of New York: Jet Capital Master Fund, L.P. v. American Realty Capital Properties, Inc., et al., No. 15-cv-307; Twin Securities, Inc. v. American Realty Capital Properties, Inc., et al., No. 15-cv-1291; HG Vora Special Opportunities Master Fund, Ltd v. American Realty Capital Properties, Inc., et al., No. 15-cv-4107; BlackRock ACS US Equity Tracker Fund, et al. v. American Realty Capital Properties, Inc. et al., No. 15-cv-08464; PIMCO Funds: PIMCO Diversified Income Fund, et al. v. American Realty Capital Properties, Inc. et al., No. 15-cv-08466; Clearline Capital Partners LP, et al. v. American Realty Capital Properties, Inc. et al., No. 15-cv-08467; Pentwater Equity Opportunities Master Fund Ltd., et al. v. American Realty Capital Properties, Inc. et al., No. 15- cv-08510; Archer Capital Master Fund, et al. v. American Realty Capital Properties, Inc. et al, No. 16-cv-05471; Atlas Master Fund et al. v. American Realty Capital Properties, Inc. et al., No. 16-cv-05475; and Eton Park Fund, L.P. v. American Realty Capital Properties, Inc., et al., No. 16-cv-09393 (the “Eton Park Action”) (collectively, the “Opt-Out Actions”). The Opt-Out Actions assert claims arising out of allegedly false and misleading statements in connection with the purchase or sale of the Company’s securities. The Company has filed answers to the complaints in all of the Opt-Out Actions except for the Eton Park Action, in which it filed a motion to dismiss on February 10, 2017. Document production in the Opt-Out Actions is being coordinated with production in the SDNY Consolidated Securities Class Action. On October 27, 2015, the Company and certain of its former officers, among others, were named as defendants in an individual securities fraud action filed in the United States District Court for the District of Arizona, captioned Vanguard Specialized Funds, et al. v. VEREIT, Inc. et al., No. 15-cv-02157 (the “Vanguard Action”). The Vanguard Action asserts claims arising out of allegedly false and misleading statements in connection with the purchase or sale of the Company’s securities. On January 21, 2016, the Company filed a motion to transfer the Vanguard Action to the United States District Court for the Southern District of New York and a motion to dismiss the complaint. On September 29, 2016, the court entered an order denying the Company’s motion to transfer and granting in part and denying in part the Company’s motion to dismiss. The Company filed an answer to the complaint on November 4, 2016. Discovery is ongoing. The Company was also named as a nominal defendant, and certain of its former officers and current and former directors were named as defendants, in shareholder derivative actions filed in the United States District Court for the Southern District of New York: Witchko v. Schorsch, et al., No. 15-cv-06043 (the “Witchko Action”); and Serafin, et al. v. Schorsch, et al., No. 15-cv-08563 (the “Serafin Action”). The court consolidated the Witchko Action and the Serafin Action (together “the SDNY Derivative Action”) and the plaintiffs designated the complaint filed in the Witchko Action as the operative complaint in the SDNY Derivative Action. The SDNY Derivative Action seeks money damages and other relief on behalf of the Company for alleged breaches of fiduciary duty, among other claims. On February 12, 2016, the Company and other defendants filed a motion to dismiss the SDNY Derivative Action due to plaintiffs’ failure to plead facts demonstrating that the Board’s decision to refuse plaintiffs’ pre-suit demands was wrongful and not a protected business judgment. On June 9, 2016, the court granted in part and denied in part the Company’s and other defendants’ motions to dismiss. Plaintiffs filed an amended complaint on June 30, 2016, and the Company and other defendants filed answers to the amended complaint on July 22, 2016. Document production in the Witchko Action is being coordinated with production in the SDNY Consolidated Securities Class Action. On December 3, 2015, the Company was named as a nominal defendant and certain of its former officers and directors were named as defendants in a shareholder derivative action filed in the Circuit Court for Baltimore City in Maryland, Frampton v. Schorsch, et al., No. 24-C-15-006269 (the “Frampton Action”). The Frampton Action seeks money damages and other relief on behalf of the Company for, among other things, alleged breaches of fiduciary duty and contribution and indemnification. By order dated November 4, 2016, the Frampton Action was stayed pending resolution of the SDNY Derivative Action. F-61 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2016 – (Continued) On June 10, 2016, the Company was named as a nominal defendant, and certain of its former officers and directors, among others, were named as defendants, in a shareholder derivative action filed in the Supreme Court of the State of New York, Kosky v. Schorsch, et al., No. 653093/2016 (the “Kosky Action”). The Kosky Action seeks money damages and other relief on behalf of the Company for, among other things, alleged breaches of fiduciary duty, negligence, and breach of contract. On October 6, 2016, the parties filed a stipulation staying the Kosky Action until resolution of the SDNY Consolidated Securities Class Action. On October 6, 2016, the Company was named as a nominal defendant, and certain of its former officers and directors, among others, were named as defendants, in a shareholder derivative action filed in United States District Court for the District of Maryland, captioned Meloche v. Schorsch, et al., 16-cv-03366 (the “Meloche Action”). An amended complaint was filed on January 17, 2017. The Meloche Action seeks money damages and other relief on behalf of the Company for alleged breaches of fiduciary duty and negligence. The Company is required to respond to the amended complaint by March 24, 2017. The Company has not reserved amounts for any of the litigation or investigation matters above either because it has not concluded that a loss is probable in the matter or because it believes that any probable loss or reasonably possible range of loss is not reasonably estimable at this time. The Company is currently unable to reasonably estimate a range of reasonably possible loss because these matters involve significant uncertainties, including the complexity of the facts and the legal theory and the nature of the claims. CapLease Litigation Matters Following the announcement of the merger agreement with CapLease in May 2013, a number of lawsuits were filed by CapLease stockholders, with only one action remaining pending: On June 25, 2013, a putative class action and derivative lawsuit was filed in the Circuit Court for Baltimore City against the Company, the OP, CapLease, and members of the CapLease board of directors, among others, captioned Tarver v. CapLease, Inc., et al., No. 24-C-13-004176 (the “Tarver Action”). The complaint alleged, among other things, that the merger agreement was the product of breaches of fiduciary duty by the CapLease directors because the transaction purportedly did not provide for full and fair value for the CapLease shareholders and was not the result of a competitive bidding process, the merger agreement allegedly contained coercive deal protection measures and the merger was purportedly approved as a result of improper self-dealing by certain defendants who would receive certain alleged employment compensation benefits and continued employment pursuant to the merger agreement. In August 2013, counsel in the Tarver Action filed a motion for a stay in the Baltimore Court, informing the court that the plaintiff had agreed to join and participate in the prosecution of other actions concerning the CapLease transaction then pending in a New York court (which were subsequently dismissed). The stay was granted by the Baltimore Court and the parties have engaged in no subsequent activity in the Tarver Action. Consequently, the Tarver Action has been dismissed without prejudice for lack of prosecution. Cole Litigation Matter In December 2013, Realistic Partners filed a putative class action lawsuit against the Company and the then-members of its board of directors in the Supreme Court for the State of New York, captioned Realistic Partners v. American Realty Capital Partners, et al., No. 654468/2013. Cole was later added as a defendant. The plaintiff alleged, among other things, that the board of the Company breached its fiduciary duties in connection with the transactions contemplated under the Cole Merger Agreement (in connection with the merger between a wholly owned subsidiary of Cole and Cole Holdings Corporation) and that Cole aided and abetted those breaches. In January 2014, the parties entered into a memorandum of understanding regarding settlement of all claims asserted on behalf of the alleged class of the Company’s stockholders. The proposed settlement terms required the Company to make certain additional disclosures related to the Cole Merger, which were included in a Current Report on Form 8-K filed by the Company with the SEC on January 17, 2014. The memorandum of understanding also contemplated that the parties would enter into a stipulation of settlement, which would be subject to customary conditions, including confirmatory discovery and court approval following notice to the Company’s stockholders, and provided that the defendants would not object to a payment of up to $625,000 for attorneys’ fees. If the parties enter into a stipulation of settlement, which has not occurred, a hearing will be scheduled at which the court will consider the fairness, reasonableness and adequacy of the settlement. There can be no assurance that the parties will enter into a stipulation of settlement, that the court will approve any proposed settlement, or that any eventual settlement will be under the same terms as those contemplated by the memorandum of understanding. F-62 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2016 – (Continued) Contractual Lease Obligations The following table reflects the minimum base rent payments due from the Company over the next five years and thereafter for certain ground lease obligations, which are substantially reimbursable by our tenants, and office lease obligations (in thousands): 2017 2018 2019 2020 2021 Thereafter Total Purchase Commitments Future Minimum Base Rent Payments Ground Leases Office Leases $ $ 14,393 14,217 14,069 13,433 12,662 212,000 280,774 $ $ 4,381 4,298 4,359 4,381 4,369 8,415 30,203 Cole Capital enters into purchase and sale agreements and deposits funds into escrow towards the purchase of real estate assets, most of which are expected to be assigned to one of the Cole REITs at or prior to the closing of the respective acquisition. As of December 31, 2016, Cole Capital was a party to eight purchase and sale agreements with unaffiliated third-party sellers to purchase a 100% interest in 20 properties, subject to meeting certain criteria, for an aggregate purchase price of $489.1 million, exclusive of closing costs. As of December 31, 2016, Cole Capital had $3.7 million of property escrow deposits held by escrow agents in connection with these future property acquisitions, which may be forfeited if the transactions are not completed under certain circumstances. Cole Capital will be reimbursed by the assigned Cole REIT for amounts escrowed when the property is assigned to the respective Cole REIT. Environmental Matters In connection with the ownership and operation of real estate, the Company may potentially be liable for costs and damages related to environmental matters. The Company has not been notified by any governmental authority of any non-compliance, liability or other claim, and is not aware of any other environmental condition, in each case, that it believes will have a material adverse effect on the results of operations. Note 16 – Equity Common Stock and General Partner OP Units The General Partner is authorized to issue up to 1.5 billion shares of Common Stock. As of December 31, 2016, the General Partner had approximately 974.1 million shares of Common Stock issued and outstanding. Additionally, the Operating Partnership had approximately 974.1 million General Partner OP Units issued and outstanding as of December 31, 2016, corresponding to the General Partner’s outstanding shares of Common Stock. Common Stock Offerings On August 10, 2016, the Company issued 69.0 million shares of Common Stock in a public offering for net proceeds, after underwriting discounts and offering costs, of $702.5 million, which were used in part to repay the 2016 Term Loan and amounts under the Credit Facility. Concurrently, the Operating Partnership issued the General Partner 69.0 million General Partner OP Units. On May 28, 2014, the General Partner closed on a public offering of 138.0 million shares of Common Stock. The net proceeds to the General Partner were $1.6 billion after deducting underwriting discounts, commissions and offering-related expenses. Concurrently, the Operating Partnership issued the General Partner 138.0 million General Partner OP Units. Common Stock Continuous Offering Program On September 19, 2016, the Company registered a continuous equity offering program (the “Program”) pursuant to which the Company can offer and sell, from time to time through September 19, 2019 in “at-the-market” offerings or certain other F-63 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2016 – (Continued) transactions, shares of Common Stock with an aggregate gross sales price of up to $750.0 million, through its sales agents. As of December 31, 2016, no shares of Common Stock have been issued pursuant to the Program. Preferred Stock and Preferred OP Units Series D Preferred Stock During the year ended December 31, 2013, the Company issued approximately 21.7 million shares of convertible preferred stock (“Series D Preferred Stock”) and 15.1 million shares of common stock, for gross proceeds of $288.0 million and $186.0 million, respectively. The Company redeemed all outstanding Series D Preferred Stock and a corresponding number of Series D Preferred Units during the year ended December 31, 2014 for $316.1 million in cash. Prior to the redemption, the Company concluded that the conversion option qualified as a derivative and should be bifurcated from the host instrument. At redemption, the Company recorded a loss of $13.6 million in relation to the conversion option in loss on derivative instruments, net in the consolidated statement of operations for the year ended December 31, 2014. Series F Preferred Stock As of December 31, 2016, the General Partner had approximately 42.8 million shares of Series F Preferred Stock and General Partner Series F Preferred Units and 86,874 Limited Partner Series F Preferred Units issued and outstanding. The Series F Preferred Stock pays cumulative cash dividends at the rate of 6.70% per annum on their liquidation preference of $25.00 per share (equivalent to $1.675 per share on an annual basis). The Series F Preferred Stock is not redeemable by the Company before the fifth anniversary of the date on which such Series F Preferred Stock was issued (the “Initial Redemption Date”), except under circumstances intended to preserve the General Partner’s status as a REIT for federal and/or state income tax purposes and except upon the occurrence of a change of control. On and after the Initial Redemption Date, the General Partner may, at its option, redeem shares of the Series F Preferred Stock, in whole or from time to time in part, at a redemption price of $25.00 per share plus, subject to exceptions, any accrued and unpaid dividends thereon to the date fixed for redemption. The shares of Series F Preferred Stock have no stated maturity, are not subject to any sinking fund or mandatory redemption and will remain outstanding indefinitely unless the General Partner redeems or otherwise repurchases them or they become convertible and are converted into Common Stock (or, if applicable, alternative consideration). The Series F Preferred Stock trades on the NYSE under the symbol “VER PRF”. The Series F Preferred Units contain the same terms as the Series F Preferred Stock. For federal income tax purposes, distributions to stockholders are characterized as ordinary dividends, capital gain distributions, or nontaxable distributions. Nontaxable distributions will reduce U.S stockholders’ basis (but not below zero) in their shares. The following table shows the character of the Series F Preferred Stock distributions paid on a percentage basis for the years ended December 31, 2016, 2015 and 2014: Ordinary dividends Nontaxable distributions Capital gain distributions Total Limited Partner OP Units Year Ended December 31, 2016 2015 2014 95.0% —% 5.0% 100% 75.9% —% 24.1% 100% 100.0% —% —% 100% As of December 31, 2016, the Operating Partnership had approximately 23.75 million Limited Partner OP Units outstanding, following the conversion of 15,450 Limited Partner OP Units, owned by a party unaffiliated with the Former Manager, into shares of the Company's Common Stock pursuant to the terms of the LPA. As of December 31, 2015, the Operating Partnership had approximately 23.76 million Limited Partner OP Units outstanding. As of December 31, 2016, the Company has received redemption requests totaling approximately 13.1 million Limited Partner OP Units from certain affiliates of the Former Manager, which would have been redeemable for a corresponding number of common shares. The Company believes it has potential claims against recipients of those OP Units and has engaged in discussions with affiliates of the Former Manager regarding the redemption requests. Pending any resolution, the Company does not currently intend to satisfy any of the redemption requests. In light of the potential claims, since October 15, 2015, the OP has not paid distributions in respect of a substantial portion of the outstanding Limited Partner OP Units when the Common Stock dividends were otherwise paid. F-64 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2016 – (Continued) Common Stock Dividends On December 23, 2014, in connection with the amendments to the Credit Facility, the Company agreed to suspend the payment of dividends on its common stock until it complied with periodic financial reporting and related requirements. On March 30, 2015, the Company satisfied these financial statement and other information requirements and subsequently declared quarterly dividends to stockholders of record each quarter from the third quarter of the year ended December 31, 2015 through the third quarter of the year ended December 31, 2016 of $0.1375 per share of common stock (representing an annualized dividend rate of $0.55 per share). The Company’s board of directors declared a quarterly cash dividend of $0.1375 per share of common stock (equaling an annualized dividend rate of $0.55 per share) for the fourth quarter of 2016 on November 1, 2016 to stockholders of record as of December 30, 2016, which was paid on January 17, 2017. An equivalent distribution by the Operating Partnership is applicable per OP unit. For federal income tax purposes, distributions to stockholders are characterized as ordinary dividends, capital gain distributions, or nontaxable distributions. Nontaxable distributions will reduce U.S stockholders’ basis (but not below zero) in their shares. The following table shows the character of the common stock distributions paid on a percentage basis for the years ended December 31, 2016, 2015 and 2014: Ordinary dividends Nontaxable distributions Capital gain distributions Total Common Stock Repurchases Year Ended December 31, 2016 2015 2014 95.0% —% 5.0% 100% 75.9% —% 24.1% 100% 6.0% 94.0% —% 100% Under the General Partner’s Equity Plan (defined below), individuals have the option to have the General Partner repurchase shares vesting from awards made under the Equity Plan in order to satisfy the minimum federal and state tax withholding obligations. During the year ended December 31, 2016, the General Partner repurchased 481,261 shares to satisfy the federal and state tax withholding on behalf of individuals. Note 17 – Equity-based Compensation Equity Plan The General Partner has adopted an equity plan (the “Equity Plan”), which provides for the grant of stock options, stock appreciation rights, restricted shares of Common Stock (“Restricted Shares”), restricted stock units (“Restricted Stock Units”), deferred stock units (“Deferred Stock Units”), dividend equivalent rights and other stock-based awards to the General Partner’s and its affiliates’ non-executive directors, officers and other employees and advisors or consultants who provide services to the General Partner or its affiliates. To date, the General Partner has granted fully vested shares of Common Stock, Restricted Shares, Restricted Stock Units and Deferred Stock Units under the Equity Plan. Restricted Shares provide for rights identical to those of Common Stock. Restricted Stock Units do not provide for any rights of a common stockholder prior to the vesting of such Restricted Stock Units. In accordance with U.S. GAAP, Restricted Shares are considered issued and outstanding. As is the case when fully vested shares of Common Stock are issued from the Equity Plan, for each Restricted Share awarded under the Equity Plan, the Operating Partnership issues a General Partner OP Unit to the General Partner with identical terms. Upon vesting of Restricted Stock Units or Deferred Stock Units, the Operating Partnership issues a General Partner OP Unit to the General Partner for each share of Common Stock issued as a result of such vesting. The General Partner has authorized and reserved a total number of shares equal to 10.0% of the total number of issued and outstanding shares of Common Stock (on a fully diluted basis assuming the redemption of all OP Units for shares of Common Stock) to be issued at any time under the Equity Plan for equity incentive awards. As of December 31, 2016, the General Partner had cumulatively awarded under its Equity Plan approximately 4.1 million Restricted Shares, net of the forfeiture of 3.6 million Restricted Shares through that date, 3.4 million Restricted Stock Units, net of the forfeiture of 0.5 million Restricted Stock Units through that date, and 0.2 million Deferred Stock Units, collectively representing approximately 7.7 million shares of Common Stock. Accordingly, as of such date, approximately 92.1 million additional shares were available for future issuance. F-65 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2016 – (Continued) During the years ended December 31, 2015 and 2014, the General Partner awarded 5,634 and 165,838 shares of Common Stock, respectively. The fair value of the awards was determined using the closing stock price on the grant date and expensed in full on the grant date. The Company recorded $0.1 million and $2.0 million of compensation expense related to the awards for the years ended December 31, 2015 and 2014, respectively, which is recorded in general and administrative expense in the accompanying consolidated statements of operations. No such shares of Common Stock were awarded during the year ended December 31, 2016. Restricted Shares The Company has issued Restricted Shares to certain employees and non-executive directors beginning in 2011. In addition, the Company issued Restricted Shares to employees of affiliates of the Former Manager prior to 2015. The fair value of the Restricted Shares granted to employees under the Equity Plan is generally determined using the closing stock price on the grant date and is expensed over the requisite service period on a straight-line basis. The fair value of Restricted Shares granted to non- executive directors and employees of affiliates of the Former Manager under the Equity Plan was measured based upon the fair value of goods or services received or the equity instruments granted, whichever was more reliably determinable, and was expensed in full at the date of grant. During the years ended December 31, 2016, 2015 and 2014 the Company recorded $2.7 million, $3.9 million and $29.7 million, respectively, of compensation expense related to the Restricted Shares, which is recorded in general and administrative expense in the accompanying consolidated statements of operations. As of December 31, 2016, there was $3.6 million of unrecognized compensation expense related to the Restricted Shares with a weighted-average remaining term of 1.9 years. The following table details the activity of the Restricted Shares during the year ended December 31, 2016: Unvested shares, December 31, 2014 Granted Vested Forfeited Unvested shares, December 31, 2015 Granted Vested Forfeited Unvested shares, December 31, 2016 Time-Based Restricted Stock Units Restricted Shares Weighted-Average Grant Date Fair Value 2,684,062 4,010 (989,621) (458,789) 1,239,662 — $ $ (586,863) $ (90,393) $ $ 562,406 13.84 9.76 13.88 13.68 13.86 — 13.91 14.08 13.78 Under the Equity Plan, the Company may award Restricted Stock Units to employees that will vest if the recipient maintains his/her employment over the requisite service period (the “Time-Based Restricted Stock Units”). The fair value of the Time-Based Restricted Stock Units granted to employees under the Equity Plan is generally determined using the closing stock price on the grant date and is expensed over the requisite service period on a straight-line basis, which is generally three years. During the years ended December 31, 2016 and 2015, the Company recorded $3.4 million and $1.8 million, respectively, of compensation expense related to the Time-Based Restricted Stock Units, which is recorded in general and administrative expense in the accompanying consolidated statements of operations. No Time-based Restricted Stock Units were awarded during the year ended December 31, 2014. As of December 31, 2016, there was $6.3 million of unrecognized compensation expense related to the Time- Based Restricted Stock Units with a weighted-average remaining term of 1.8 years. F-66 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2016 – (Continued) Deferred Stock Units The Company may award Deferred Stock Units to non-executive directors under the Equity Plan. Each Deferred Stock Unit represents the right to receive one share of Common Stock. The Deferred Stock Units provide for immediate vesting on the grant date and will be settled with Common Stock either on the earlier of the date on which the respective director separates from the Company or the third anniversary of the grant date, or if granted pursuant to the director’s voluntary election to participate in the director’s deferred compensation program, on the date the director separates from the Company. The fair value of the Deferred Stock Units is determined using the closing stock price on the grant date and is expensed over the requisite service period or on the grant date for awards with no requisite service period. During each of the years ended December 31, 2016 and 2015, the Company recorded $0.8 million of expense related to Deferred Stock Units, which is recorded in general and administrative expense in the accompanying consolidated statements of operations. No Deferred Stock Units were awarded during the year ended December 31, 2014. As of December 31, 2016, there is no unrecognized compensation expense related to the Deferred Stock Units. The following table details the activity of the Time-Based Restricted Stock Units and Deferred Stock Units during the year ended December 31, 2016. Unvested units, December 31, 2014 Granted Vested Forfeited Unvested units, December 31, 2015 Granted Vested Forfeited Unvested units, December 31, 2016 Market-Based Restricted Stock Units Time-Based Restricted Stock Units Weighted-Average Grant Date Fair Value Deferred Stock Units Weighted-Average Grant Date Fair Value — $ 671,405 (41,112) (41,155) 589,138 736,427 (199,556) (40,095) 1,085,914 $ $ — 9.61 9.46 9.76 9.61 7.82 9.52 8.68 8.43 — $ 90,076 (90,076) — — $ 87,513 (87,513) — — $ — 8.75 8.75 — — 9.18 9.18 — — During the year ended December 31, 2015, the General Partner awarded Restricted Stock Units to certain employees under the Equity Plan that were contingent upon the Common Stock reaching a certain market price (the “Market-Based Restricted Stock Units”). The Market-Based Restricted Stock Units were contingent upon the closing price of the Common Stock equaling or exceeding $10 per share for 20 consecutive trading days (the “Market Condition”) and the grantee’s continued employment as of such date on which the Market Condition was met. On July 28, 2016, 610,839 Market-Based Restricted Stock Units vested, of which 199,858 shares were withheld to cover grantees’ tax withholding obligations, resulting in 410,981 shares being issued. The fair value and derived service period of the Market-Based Restricted Stock Units as of their grant date was determined using a Monte Carlo simulation, which took into account multiple input variables that determine the probability of satisfying the Market Condition. The method required the input of assumptions, including the future dividend yield and expected volatility of the Common Stock. Compensation expense was recognized on a straight-line basis over the derived service period regardless of whether the Market Condition was satisfied, provided that the requisite service condition had been achieved. The Market-Based Restricted Stock Units were fully expensed during the year ended December 31, 2015; however, the Company recorded contra- expense due to the forfeiture of such awards. During the years ended December 31, 2016 and 2015, the Company recorded contra- expense of $0.8 million related to forfeitures and expense of $6.0 million, respectively, which is recorded in general and administrative expense in the accompanying consolidated statements of operations. There were no such expenses related to the Market-Based Restricted Stock Units for the year ended December 31, 2014. As of December 31, 2016, there is no unrecognized compensation expense related to the Market-Based Restricted Stock Units. Long-Term Incentive Awards The General Partner may award long-term incentive-based Restricted Stock Units (the “LTI Target Awards”) to employees under the Equity Plan. Vesting of the LTI Target Awards is based upon the General Partner’s level of achievement of total stockholder return (“TSR”), including both share price appreciation and Common Stock dividends, as measured equally against a market index and against a peer group generally over a three year period. The fair value and derived service period of the LTI Target Awards as of their grant date is determined using a Monte Carlo simulation which takes into account multiple input variables that determine the probability of satisfying the required TSR, as F-67 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2016 – (Continued) outlined in the award agreements. This method requires the input of assumptions, including the future dividend yield, the expected volatility of the Common Stock and the expected volatility of the market index constituents and the peer group. Compensation expense is recognized on a straight-line basis over the derived service period regardless of whether the necessary TSR is attained, provided that the requisite service condition has been achieved. During the years ended December 31, 2016 and 2015, the Company recorded $4.6 million and $1.9 million, respectively, of expense related to the LTI Target Awards, which is recorded in general and administrative expense in the accompanying consolidated statements of operations. There were no such expenses related to the LTI Target Awards for the year ended December 31, 2014. As of December 31, 2016, there is $7.1 million of unrecognized compensation expense related to the LTI Target Awards with a weighted-average remaining term of 1.6 years. The following table details the activity of the unvested Market-Based Restricted Stock Units and the LTI Target Awards during the year ended December 31, 2016. Unvested units, December 31, 2014 Granted Vested Forfeited Unvested units, December 31, 2015 Granted Vested Forfeited Unvested units, December 31, 2016 Director Stock Plan Market-Based Restricted Stock Units — $ Weighted-Average Grant Date Fair Value — 8.57 — 8.53 8.58 — 8.58 8.58 — $ 922,686 — (217,882) 704,804 — (610,839) (93,965) — $ LTI Target Awards — $ Weighted-Average Grant Date Fair Value — 11.42 11.77 11.77 11.38 7.14 11.44 11.15 9.00 $ $ 816,783 (3,311) (82,024) 731,448 855,471 (8,065) (56,367) 1,522,487 The General Partner adopted the Non-Executive Director Stock Plan (the “Director Stock Plan”), which provided for the grant of Restricted Shares of Common Stock to each of the General Partner’s non-executive directors. As of December 31, 2014, a total of 99,000 shares of Common Stock was reserved for issuance under the Director Stock Plan and the General Partner had awarded 45,000 of such shares. As of December 31, 2015, all shares awarded by the General Partner have vested and there was no activity within the Director Stock Plan during the years ended December 31, 2016 or 2015. In accordance with the LPA, the Operating Partnership issued an equal number of General Partner OP Units when the General Partner awarded shares under the Director Stock Plan. The fair value of these Restricted Shares, as well as the corresponding General Partner OP Units issued by the Operating Partnership, under the Director Stock Plan is determined based upon the closing stock price on the grant date. Multi-Year Outperformance Plans Upon consummation of the the acquisition of American Realty Capital Trust III, Inc. on February 28, 2013 (the “ARCT III Merger”), the Company entered into the 2013 Advisor Multi-Year Outperformance Agreement (the “OPP”) with the Former Manager, whereby the Former Manager was able to earn compensation upon the attainment of stockholder value creation targets. Under the OPP, the Former Manager was granted long-term incentive plan units of the OP (“LTIP Units”), which could be earned or forfeited based on the General Partner’s total return to stockholders, as defined by the OPP, for the three-year period that commenced on December 11, 2012. Pursuant to previous authorization from the General Partner’s board of directors, as a result of the termination of the management agreement with the Former Manager, all of the approximately 8.2 million LTIP Units were deemed vested and convertible into OP Units upon the consummation of the Company’s transition to self-management on January 8, 2014 and were converted into OP Units on such date. There are no awards outstanding under the OPP and the OPP has been terminated. During the year ended December 31, 2014, the Operating Partnership recorded expenses of $1.6 million for the LTIP Units under the OPP, which is recorded in general and administrative expense in the accompanying consolidated statements of operations. As of December 31, 2014, all LTIP Units under the OPP were earned and $93.9 million of the expense was allocated to the non- controlling interest on the consolidated balance sheet. F-68 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2016 – (Continued) On October 3, 2013, the General Partner’s board of directors approved a multi-year outperformance plan (the “2014 OPP”), which became effective upon the General Partner’s transition to self-management on January 8, 2014. Under the 2014 OPP, individual agreements were entered into between the General Partner and the participants selected by the General Partner’s board of directors (the “Participants”) that set forth the Participant’s participation percentage in the 2014 OPP and the number of LTIP Units of the OP subject to the award (“OPP Agreements”). Under the 2014 OPP and the OPP Agreements, the Participants were eligible to earn performance-based bonus awards equal to the Participant’s participation percentage of a pool that is funded up to a maximum award opportunity of approximately 5% of the General Partner’s equity market capitalization at the time of the approval of the 2014 OPP which, following the Audit Committee’s and Company’s review, was determined to be $120.0 million, not the $218.1 million pool which had been used originally to calculate and report the awards issued to the Participants. During the three months ended December 31, 2014, all of the Participants in the 2014 OPP departed from the Company and forfeited all of their interests in the 2014 OPP. As such, all equity-based compensation expense related to the 2014 OPP was reversed in the three months ended December 31, 2014 and no expense was recorded during the year ended December 31, 2015 or 2016. The Compensation Committee of the General Partner’s board of directors (the “Compensation Committee”) elected to terminate the 2014 OPP on April 23, 2015, which had zero LTIP Units outstanding following the departures of the Participants in the fourth quarter of 2014. During the first quarter of 2015, the Compensation Committee, with input from its independent compensation consultant, elected to adopt the LTI Target Award structure described above. Note 18 – Related Party Transactions and Arrangements Prior to January 8, 2014, the Former Manager managed the Company’s affairs on a day-to-day basis, with the exception of certain acquisition, accounting and portfolio management services performed by employees of the Company. In August 2013, the Company’s board of directors determined that it was in the best interest of the Company and its stockholders to become self- managed, and the Company transitioned to self-management on January 8, 2014. In connection with becoming self-managed, the General Partner terminated the management agreement with the Former Manager and the General Partner and the OP entered into employment and incentive compensation arrangements with certain former executives. In 2014, the Company and ARCT IV incurred commissions, fees and expenses payable to the Former Manager and its affiliates including Realty Capital Securities, LLC (“RCS”), RCS Advisory Services, LLC (“RCS Advisory”), AR Capital, LLC (“ARC”), ARC Advisory Services, LLC (“ARC Advisory”), American Realty Capital Advisors IV, LLC (the “ARCT IV Advisor”), American National Stock Transfer, LLC (“ANST”) and ARC Real Estate Partners, LLC (“ARC Real Estate”). As a result of the departures of certain officers and directors in December 2014, the Former Manager and its affiliates are no longer affiliated with the Company. The Audit Committee Investigation identified certain payments made by the Company to the Former Manager and its affiliates that were not sufficiently documented or that otherwise warranted scrutiny. As of December 31, 2014, the Company had recovered consideration valued at $8.5 million in respect of such payments. The Company is considering whether it has a right to seek recovery for any other such payments and, if so, its alternatives for seeking recovery. The Company believes it has potential claims against recipients of certain OP Units and has engaged in discussions with affiliates of the Former Manager regarding pending redemption requests. Prior to any resolution, the Company does not currently intend to satisfy any of the redemption requests. See Note 16 – Equity for further discussion. As of December 31, 2016 and 2015, no asset has been recognized in the accompanying consolidated financial statements related to any potential recovery. The following table summarizes the related party fees and expenses incurred by the Company and ARCT IV by category and the aggregate amounts contained in such categories for the period presented (in thousands). During the years ended December 31, 2016 and 2015, there were no transactions with the Former Manager or any of the Former Manager’s affiliates. Expenses and capitalized costs: Offering related costs Acquisition related expenses Litigation, merger and other non-routine costs, net of insurance recoveries Management fees to affiliates General and administrative expenses Indirect affiliate expenses Total F-69 Year Ended December 31, 2014 $ $ 2,150 1,652 137,778 13,888 16,089 10,975 182,532 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2016 – (Continued) The following sections below further expand on the summarized related party transactions listed above. Unless otherwise indicated, all of the related party fees and expenses discussed below were incurred and recognized during the year ended December 31, 2014. No such expenses were incurred during the years ended December 31, 2016 and 2015. Offering Related Costs The Company and ARCT IV recorded commissions, fees and offering cost reimbursements for services provided to the Company, and ARCT IV, as applicable, by affiliates of the Former Manager during the period indicated (in thousands): Offering related costs Offering costs and other reimbursements Year Ended December 31, 2014 $ 2,150 RCS served as the dealer-manager of ARCT IV’s initial public offering and received fees and compensation in connection with those transactions. RCS received a selling commission of 7% of gross offering proceeds before reallowance of commissions earned by participating broker-dealers and 3% of the gross proceeds from the sale of common stock, before reallowance to participating broker-dealers, as a dealer manager fee in each of the initial public offerings. In addition, the Company reimbursed RCS for services relating to the Company’s at-the-market equity program during 2014. Offering related costs are included in offering costs in the accompanying consolidated statements of changes in equity. Acquisition Related Expenses During the year ended December 31, 2014, the Company paid a fee of $1.0 million (equal to 0.25% of the contract purchase price) to RCS for strategic advisory services related to the Company’s acquisition of certain properties from Fortress Investment Group LLC and $0.6 million (equal to 0.25% of the contract purchase price) to RCS related to the Company’s acquisition of certain properties from Inland American Real Estate Trust, Inc. Litigation, Merger and Other Non-Routine Costs, Net of Insurance Recoveries The Company and ARCT IV incurred fees and expenses payable to the Former Manager and its affiliates for services related to mergers and other non-routine transactions, as discussed below. The table below shows fees and expenses attributable to each merger and other non-routine transaction during the year ended December 31, 2014 (in thousands). Merger related costs: Strategic advisory services Personnel costs and other reimbursements Litigation and other non-routine costs: Post-transaction support services Subordinated distribution fees Furniture, fixtures and equipment Personnel costs and other reimbursements Other fees and expenses Total Year Ended December 31, 2014 ARCT IV Merger Internalization and Other Cole Merger Multi-tenant Spin Off Total $ 8,400 $ — $ 17,115 $ 1,750 $ 27,265 — — 1,352 78,244 5,800 417 — $ 94,213 $ 10,000 — 10,000 — — 20,000 72 — — — 1,728 2,900 $ 21,815 $ — — — — — — 1,750 72 11,352 78,244 15,800 2,145 2,900 $ 137,778 F-70 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2016 – (Continued) Merger Related Costs ARCT IV Merger Pursuant to ARCT IV’s advisory agreement with the ARCT IV Advisor, ARCT IV agreed to pay the ARCT IV Advisor a brokerage commission on the sale of property in connection with the ARCT IV Merger. At the time of the ARCT IV Merger, ARCT IV paid $8.4 million to the ARCT IV Advisor in connection with this agreement. These commissions were included in litigation, merger and other non-routine costs, net of insurance recoveries in the accompanying consolidated statements of operations for the year ended December 31, 2014. Cole Merger The Company entered into an agreement with RCS under which RCS agreed to provide strategic and financial advisory services to the Company in connection with the Cole Merger. The Company agreed to pay a fee equal to 0.25% of the transaction value upon the consummation of the transaction and reimburse out of pocket expenses. The Company incurred and recognized $14.2 million in expense from this agreement in the year ended December 31, 2014. Pursuant to the transaction management services agreement, dated December 9, 2013, the Company and the OP paid RCS Advisory an aggregate fee of $2.9 million on January 8, 2014, in connection with providing the following services: transaction management support related to the Cole Merger up to the date of the transaction management services agreement and ongoing transaction management support, marketing support, due diligence coordination and event coordination up to the date of the termination of the transaction management services agreement. The transaction management services agreement expired on the consummation of the Company’s transition to self-management on January 8, 2014. Multi-tenant Spin-off The Company entered into an agreement with RCS, under which RCS agreed to provide strategic and financial advisory services to the Company in connection with a spin-off of the Company’s multi-tenant shopping center business. During the year ended December 31, 2014, the Company incurred $1.8 million of such fees, which are included in litigation, merger and other non-routine costs, net of insurance recoveries in the accompanying consolidated statements of operations. Other Non-Routine Transactions Post-Transaction Support Services In connection with its entry into the ARCT IV Merger Agreement, ARCT IV agreed to pay additional asset management fees, which totaled $1.3 million, net of credits received from affiliates during the year ended December 31, 2014. Effective January 8, 2014, the Former Manager agreed to provide certain transition services, including accounting support, acquisition support, investor relations support, public relations support, human resources and administration, general human resources duties, payroll services, benefits services, insurance and risk management, information technology, telecommunications and Internet and services relating to office supplies. The Company paid $10.0 million to the Former Manager on January 8, 2014. This arrangement was in effect for a 60-day term beginning on January 8, 2014. ARCT IV Merger Subordinated Distribution Fee On January 3, 2014, the OP entered into a contribution and exchange agreement with the ARCT IV OP, American Realty Capital Trust IV Special Limited Partner, LLC (the “ARCT IV Special Limited Partner”) and ARC Real Estate. The ARCT IV Special Limited Partner was entitled to receive certain distributions from the ARCT IV OP, including the subordinated distribution of net sales proceeds resulting from an “investment liquidity event” (as defined in the agreement of limited partnership of the ARCT IV OP). The ARCT IV Merger constituted an “investment liquidity event,” due to the attainment of the 6.0% performance hurdle and the return to ARCT IV’s stockholders of $358.3 million in addition to their initial investment. Pursuant to the contribution and exchange agreement, the ARCT IV Special Limited Partner contributed its interest in the ARCT IV OP, inclusive of the$78.2 million of subordinated distribution proceeds received, to the ARCT IV OP in exchange for 2.8 million ARCT IV OP Units. Upon consummation of the ARCT IV Merger, these ARCT IV OP Units were immediately converted into 6.7 million OP Units after application of the applicable ARCT IV Exchange Ratio. In conjunction with the ARCT IV Merger Agreement, the ARCT IV Special Limited Partner agreed to hold its OP Units for a minimum of two years before converting them into shares of the Company’s Common Stock. F-71 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2016 – (Continued) Furniture, Fixtures and Equipment and Other Assets The Company entered into three agreements with affiliates of the Former Manager and the Former Manager (the “Sellers”), as applicable, pursuant to which, the Sellers sold the OP certain furniture, fixtures and equipment and other assets (“FF&E”) used by the Sellers in connection with managing the property-level business and operations and accounting functions of the Company and the OP. The Company incurred and recorded $15.8 million to purchase the FF&E and other assets during the year ended December 31, 2014. The Company has concluded that there was no evidence of the receipt and it could not support the value of the FF&E and other assets. As such, the Company expensed the amount originally capitalized and recognized the expense in litigation, merger and other non-routine costs, net of insurance recoveries during the fourth quarter of 2014. Personnel Costs and Other Reimbursements The Company and ARCT IV incurred expenses of and paid $1.4 million to RCS Advisory, $0.6 million to ANST and $0.1 million to RCS for personnel costs and reimbursements in connection with non-recurring transactions during the year ended December 31, 2014. Other Fees and Expenses In connection with the closing of the Cole Merger, the Company paid $2.9 million to RCS Advisory during the year ended December 31, 2014. Management Fees to Affiliates The Company and ARCT IV recorded fees and reimbursements for services provided by the Former Manager and its affiliates related to the operations of the Company and ARCT IV during the year ended December 31, 2014 (in thousands). No such fees were incurred during the years ended December 31, 2016 and 2015. Management fees to affiliates: Asset management fees Asset Management Fees ARCT IV Year Ended December 31, 2014 $ 13,888 In connection with the asset management services provided by the ARCT IV Advisor, ARCT IV issued (subject to periodic approval by ARCT IV’s board of directors) to the ARCT IV Advisor performance-based restricted partnership units of the ARCT IV OP designated as “ARCT IV Class B Units,” which were intended to be profit interests and to vest, and no longer be subject to forfeiture, at such time as: (x) the value of the ARCT IV OP’s assets plus all distributions equaled or exceeded the total amount of capital contributed by investors plus a 6.0% cumulative, pre-tax, non-compounded annual return thereon (the “economic hurdle”); (y) any one of the following occurs: (1) the termination of the advisory agreement by an affirmative vote of a majority of the Company’s independent directors without cause; (2) a listing; or (3) another liquidity event; and (z) the ARCT IV Advisor was still providing advisory services to ARCT IV. The calculation of the ARCT IV asset management fees was equal to: (i) 0.1875% of the cost of ARCT IV’s assets; divided by (ii) the value of one share of ARCT IV common stock as of the last day of such calendar quarter. When approved by the board of directors, the ARCT IV Class B Units were issued to the ARCT IV Advisor quarterly in arrears pursuant to the terms of the ARCT IV Operating Partnership agreement. During the year ended December 31, 2013, ARCT IV’s board of directors approved the issuance of 492,483 ARCT IV Class B Units to the ARCT IV Advisor in connection with this arrangement. As of December 31, 2013, ARCT IV did not consider achievement of the performance condition to be probable and no expense was recorded at that time. The ARCT IV Advisor received distributions on unvested ARCT IV Class B Units equal to the distribution rate received on the ARCT IV common stock. The performance condition related to the 498,857 ARCT IV Class B Units, which includes units issued for the period of January 1, 2014 through the ARCT IV Merger Date, was satisfied upon the completion of the ARCT IV Merger. These ARCT IV Class B Units immediately converted into OP Units at the 2.3961 exchange ratio and the Company recorded an expense of $13.9 million based on the fair value of the ARCT IV Class B Units during the year ended December 31, 2014. No expense was recognized during the years ended December 31, 2016 and 2015. F-72 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2016 – (Continued) General and Administrative Expenses The Company and ARCT IV recorded general and administrative expenses as shown in the table below for services provided by the Former Manager and its affiliates related to the operations of the Company and ARCT IV during the period indicated (in thousands): General and administrative expenses: Advisory fees and reimbursements Equity awards Total Advisory Fees and Reimbursements Year Ended December 31, 2014 $ $ 2,015 14,074 16,089 The Company and ARCT IV agreed to pay certain fees and reimbursements during the year ended December 31, 2014 to the Former Manager and its affiliates, as applicable, for their out-of-pocket costs, including without limitation, legal fees and expenses, due diligence fees and expenses, other third party fees and expenses, costs of appraisals, travel expenses, nonrefundable option payments and deposits on properties not acquired, accounting fees and expenses, title insurance premiums and other closing costs, personnel costs and miscellaneous expenses relating to the selection, acquisition and due diligence of properties or general operation of the Company. During the year ended December 31, 2014, these expenses totaled $2.0 million. No such expenses were incurred during the years ended December 31, 2016 and 2015. Equity Awards Upon consummation of the ARCT III Merger, the Company entered into the OPP with the Former Manager. The OPP gave the Former Manager the opportunity to earn compensation upon the attainment of certain stockholder value creation targets. During the year ended December 31, 2014, $1.6 million was recorded in general and administrative expenses as equity-based compensation relating to the change in total return to stockholders used in computing the number of LTIP units earned between December 31, 2013 and January 8, 2014. During the year ended December 31, 2014, the Company granted 796,075 restricted share awards to employees of affiliates of the Former Manager as compensation for certain services and 87,702 restricted stock awards to two directors who were affiliates of the Former Manager. The grant date fair value of the awards of $12.5 million for the year ended December 31, 2014 was recorded in general and administrative expenses in the accompanying consolidated statements of operations. No such expenses or grants were made to employees of affiliates of the Former Manager during the years ended December 31, 2016 and 2015. Indirect Affiliate Expenses The Company incurred fees and expenses payable to affiliates of the Former Manager or payable to a third party on behalf of affiliates of the Former Manager for amenities related to certain buildings, as explained below. These expenses are depicted in the table below for the year ended December 31, 2014 (in thousands). No such expenses were incurred during the years ended December 31, 2016 and 2015. Indirect affiliate expenses: Audrain building ANST office build-out New York (405 Park Ave.) office Dresher, PA office North Carolina office Total F-73 Year Ended December 31, 2014 $ $ 8,724 462 1,659 92 38 10,975 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2016 – (Continued) Audrain Building During the year ended December 31, 2013, a wholly owned subsidiary of ARC Real Estate purchased a historic building in Newport, Rhode Island (“Audrain”) with plans to renovate the second floor to serve as offices for certain executives of the Company, the Former Manager and affiliates of the Former Manager. An affiliate of the Former Manager requested that invoices relating to the second floor renovation and tenant improvements and all building operating expenses either be reimbursed by the Company to ARC Advisory or be paid directly to the contractors and vendors. During the year ended December 31, 2014, the Company incurred $8.7 million for tenant improvements and furniture and fixtures relating to the renovation directly to third parties. In addition, on October 4, 2013, the Company entered into a lease agreement with a subsidiary of ARC Real Estate for a term of 15 years with annual base rent of $0.4 million requiring monthly payments beginning on that date. As there were tenants occupying the building when it was purchased, these tenants subleased their premises from the Company until their leases terminated. During the year ended December 31, 2014, the Company incurred and paid $0.3 million for base rent, which was partially offset by $17,000 of rental revenue received from the subtenants. No rental revenue was received during the years ended December 31, 2016 and 2015. As a result of findings of the Audit Committee Investigation, the Company terminated this lease agreement and was reimbursed for the tenant improvements and furniture costs incurred by the Company, totaling $8.5 million, during the year ended December 31, 2014. Reimbursement was made by delivery and retirement of 916,423 OP Units held by an affiliate of the Former Manager. The Company never moved into or occupied the building. American National Stock Transfer, LLC Office Build-out During the year ended December 31, 2014, as a result of the Cole Merger, the Company worked to develop a partnership with ANST. Plans were made to move ANST to part of the Cole Capital office building in 2014. In order to accommodate the ANST employees, the Cole Capital office building was remodeled. During the year ended December 31, 2014, the Company paid $0.5 million directly to third parties for leasehold improvements and furniture and fixtures relating to the renovation. ANST never moved into the building. The Company is considering its options with regard to recovery of such payments, although no decisions have been made at this time. No asset has been recognized in the financial statements related to any potential recovery. Shared Office Space During the year ended December 31, 2014, the Company paid $1.8 million to an affiliate of the Former Manager for rent, leasehold improvements and furniture and fixtures related to offices in New York, Pennsylvania, and North Carolina where certain of the Company’s employees shared office space with an affiliate of the Former Manager. The Company no longer occupies the office space. Additional Related Party Transactions The following related party transactions were not included in the tables above. Tax Protection Agreement The Company is party to a tax protection agreement with ARC Real Estate, which contributed its 100% indirect ownership interests in 63 of the Company’s properties to the Operating Partnership in the formation transactions related to the Company’s initial public offering. Pursuant to the tax protection agreement, the Company has agreed to indemnify ARC Real Estate for its tax liabilities (plus an additional amount equal to the taxes incurred as a result of such indemnity payment) attributable to its built- in gain, as of the closing of the formation transactions, with respect to its interests in the contributed properties (other than two vacant properties contributed), if the Company sells, conveys, transfers or otherwise disposes of all or any portion of these interests in a taxable transaction on or prior to September 6, 2021. The sole and exclusive rights and remedies of ARC Real Estate under the tax protection agreement will be a claim against the Operating Partnership for ARC Real Estate’s tax liabilities as calculated in the tax protection agreement, and ARC Real Estate shall not be entitled to pursue a claim for specific performance or bring a claim against any person that acquires a protected property from the Operating Partnership in violation of the tax protection agreement. F-74 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2016 – (Continued) Investment from the ARCT IV Special Limited Partner In connection with the ARCT IV Merger, the ARCT IV Special Limited Partner invested $0.8 million in the ARCT IV OP and was subsequently issued 79,870 OP Units in respect thereof upon the closing of the ARCT IV Merger after giving effect to the ARCT IV Exchange Ratio. This investment is included in non-controlling interests in the accompanying consolidated balance sheets. Investment in an Affiliate of the Former Manager During the year ended December 31, 2013, the Company invested $10.0 million in a real estate fund advised by an affiliate of the Former Manager, American Real Estate Income Fund, which invests primarily in equity securities of other publicly traded REITs, and subsequently reinvested dividends totaling $0.1 million in the fund. As of December 31, 2014, the Company sold substantially all of its investment, with a remaining investment value of less than $0.1 million. As of December 31, 2016 and 2015, the Company sold all of its investments in the fund. Cole Capital Cole Capital is contractually responsible for managing the Cole REITs’ affairs on a day-to-day basis, identifying and making acquisitions and investments on the Cole REITs’ behalf, and recommending to the respective board of directors of each of the Cole REITs an approach for providing investors with liquidity. In addition, the Company distributes the shares of common stock for certain Cole REITs and advises them regarding offerings, manages relationships with participating broker-dealers and financial advisors and provides assistance in connection with compliance matters relating to the offerings. The Company receives compensation and reimbursement for services relating to the Cole REITs’ offerings and the investment, management and disposition of their respective assets, as applicable. Offering-Related Revenue The Company generally receives a selling commission, dealer manager fee and/or a distribution and stockholder servicing fee based on the gross offering proceeds related to the sale of shares of the Cole REITs’ common stock in their primary offerings. The Company has reallowed 100% of selling commissions earned to participating broker-dealers. The Company, in its sole discretion, may reallow all or a portion of its dealer manager fee to such participating broker-dealers as a marketing and due diligence expense reimbursement, based on factors such as the volume of shares issued by such participating broker-dealers and the amount of marketing support provided by such participating broker-dealers. No selling commissions or dealer manager fees are paid to the Company or other broker-dealers with respect to shares issued under the respective Cole REIT’s distribution reinvestment plan, under which the stockholders may elect to have distributions reinvested in additional shares. All other organization and offering expenses associated with the sale of the Cole REITs’ common stock are paid for in advance by the Company and subject to reimbursement by the Cole REITs, up to certain limits in accordance with their respective advisory agreements and charters. As these costs are incurred, they are recorded as reimbursement revenue, up to the respective limit, and are included in offering-related revenues in the financial results for Cole Capital. Expenses paid on behalf of the Cole REITs in excess of these limits that are expected to be collected based on future estimated offering proceeds are recorded as program development costs, which are included in rent and tenant receivables and other assets, net in the accompanying consolidated balance sheets. The Company assesses the collectability of the program development costs, considering the offering period and historical and forecasted sales of shares under the Cole REITs’ respective offerings and reserves for any balances considered not collectible. Additional reserves are generally recorded if actual proceeds raised from the offerings and corresponding program development costs incurred differ from management’s assumptions. During the three months ended December 31, 2016 and 2015, the Company assessed the expected collectability of the program development costs based on assumptions used to evaluate goodwill and intangible asset impairments and recorded additional reserves for uncollectible amounts of $11.1 million and $11.3 million, respectively. The Company recorded an additional reserve for uncollectible amounts of $3.2 million during the year ended December 31, 2016, related to the closing of CCIT II’s primary offering. These amounts are recorded in general and administrative expenses in the accompanying statements of operations. As of December 31, 2016 and December 31, 2015, the Company had organization and offering costs recorded as program development costs, included in rent and tenant receivables and other assets, net in the consolidated balance sheets, of $3.2 million and $12.9 million, respectively, which were net of reserves of $31.7 million and $34.8 million, respectively. F-75 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2016 – (Continued) The following table shows the offering fee summary information for the Cole REITs as of December 31, 2016: Program Open Programs (3)(4) CCPT V (5) Class A Shares Class T Shares (6) INAV Wrap Class Shares Advisor Class Shares Institutional Class Shares CCIT III (5)(9) Class A Shares Class T Shares Selling Commissions (1) Dealer Manager Fees (2) Annual Distribution and Stockholder Servicing Fee (2) 7% 3% —% up to 3.75% —% 7% 3% 2% 2% 0.55% 0.55% 0.25% 2% 2% (8) (8) (8) —% 1.0% —% 0.5% —% —% 1% (7) (8) (8) (8) _______________________________________________ (1) The Company reallowed 100% of selling commissions earned to participating broker-dealers during the years ended December 31, 2016 and 2015 and 2014. (2) The Company may reallow all or a portion of its dealer manager fee and/or a distribution and stockholder servicing fee to participating broker-dealers as a marketing and due diligence expense reimbursement. (3) The Company receives selling commissions, an asset-based dealer manager fee and/or an asset-based distribution and stockholder servicing fee, all based on the net asset value for each class of common stock. (4) CCIT II closed its offering during the three months ended September 30, 2016. The program’s fee structure was similar to that of CCPT V. (5) The maximum amount of the distribution and stockholder servicing fee with respect to sales of Class T shares is 4.0% of the gross offering proceeds for CCPT V and CCIT III. (6) Commencing on April 29, 2016, CCPT V began offering Class T shares of common stock in addition to the class of shares of common stock previously offered (now referred to as Class A shares). (7) During the three months ended December 31, 2016, the annual distribution and stockholder servicing fee was amended to be 1.0%. Prior to the amendment, the distribution and stockholder servicing fee was 0.8% per annum. (8) Fees are accrued daily in the amount of 1/365th of a percentage of the estimated per share NAV and payable monthly in arrears. Distribution and stockholder servicing fees continue to be paid after the offering closes. (9) On September 22, 2016, the registration statement for the initial public offering of CCIT III was declared effective by the SEC, consisting of Class A shares of common stock and Class T shares of common stock. F-76 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2016 – (Continued) Transaction Service Revenue The Company earns acquisition fees related to the acquisition, development or construction of properties on behalf of certain of the Cole REITs. In addition, the Company is reimbursed for acquisition expenses incurred in the process of acquiring properties up to certain limits per the respective advisory agreement. The Company is not reimbursed for personnel costs in connection with services for which it receives acquisition fees or real estate commissions. In addition, the Company may earn disposition fees related to the sale of one or more properties, including those held indirectly through joint ventures, on behalf of a Cole REIT and other affiliates. The following table shows the transaction-related fees for the Cole REITs and other real estate programs as of December 31, 2016: Program Open Programs CCPT V INAV CCIT III Closed Programs CCIT II CCPT IV Other Programs Acquisition Fees (1) Disposition Fees Performance Fees (2) Financing Coordination Fee (3) 2% — 2% 2% 2% 1% — 1% 1% 1% 15% — 15% 15% 15% Various Various Various — — 1% — — — _______________________________________________ (1) Percent taken on gross purchase price. (2) Performance fee paid only under the following circumstances: (i) if shares are listed on a national securities exchange; (ii) if the respective Cole REIT is sold or the assets are liquidated; or (iii) upon termination of the advisory agreement. In connection with such events, the performance fee will only be earned upon the return to investors of their net capital invested and a 6% annual cumulative, non-compounded return (8% in the case of CCIT II and CCPT IV). (3) Financing coordination fee payable for services in connection with the origination, assumption, or refinancing for any debt (other than loans advanced by the Company) to acquire properties or make other permitted investments. Management Service Revenue The Company earns advisory and asset and property management fees from certain Cole REITs and other real estate programs. The Company may also be reimbursed for expenses incurred in providing advisory and asset and property management services, subject to certain limitations. In addition, the Company earns a performance fee relating to INAV for any year in which the total return on stockholders’ capital exceeds 6% per annum on a calendar year basis. The following table shows the management fees for the Cole REITs and other real estate programs as of December 31, 2016: Program Open Programs CCPT V INAV CCIT III Closed Programs CCIT II CCPT IV Other Programs Asset Management / Advisory Fees (1) Performance Fees (2) 0.65% - 0.75% 0.90% 0.65% - 0.75% 0.65% - 0.75% 0.65% - 0.75% Various — 25% — — — — _______________________________________________ (1) Annualized fee based on the average monthly invested assets or net asset value, if available. (2) The performance fee is limited to 10% of the aggregate total return, for each class, for any individual year. F-77 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2016 – (Continued) The table below reflects the revenue earned from the Cole REITs (including closed programs, as applicable) and joint ventures for the years ended December 31, 2016, 2015 and 2014 (in thousands). Offering-related fees and reimbursements Selling commissions (1) Dealer manager and distribution fees (2) Reimbursement revenue Offering-related fees and reimbursements Transaction service fees and reimbursements Acquisition fees Disposition fees (3) Reimbursement revenues Transaction service fees and reimbursements Management fees and reimbursements Asset and property management fees and leasing fees Advisory and performance fee revenue Reimbursement revenues Management fees and reimbursements Interest income on Affiliate Lines of Credit Total related party revenues(4) ___________________________________ $ Year Ended December 31, 2016 2015 2014 $ 19,943 8,307 8,283 36,533 9,733 — 2,800 12,533 220 51,099 17,585 68,904 453 $ 14,101 5,131 5,178 24,410 18,742 4,974 2,165 25,881 452 44,948 13,843 59,243 1,275 57,023 17,533 12,553 87,109 60,426 — 4,284 64,710 596 40,906 8,806 50,308 307 $ 118,423 $ 110,809 $ 202,434 (1) The Company reallowed 100% of selling commissions earned to participating broker-dealers during the years ended December 31, 2016, 2015 and 2014. (2) During the years ended December 31, 2016, 2015 and 2014, the Company reallowed $3.2 million, $2.1 million and $9.2 million, respectively, of dealer manager fees and/or distribution and stockholder servicing fees to participating broker-dealers as a marketing and due diligence expense reimbursement. (3) The Company earned a disposition fee of $4.4 million on behalf of CCIT when CCIT merged with Select Income REIT on January 29, 2015. (4) Total related party revenues excludes fees earned from 1031 real estate programs of $1.4 million, $5.3 million and $1.4 million for the years ended December 31, 2016, 2015 and 2014, respectively. Investment in the Cole REITs As of December 31, 2016 and 2015, the Company owned aggregate equity investments of $4.7 million and $4.1 million, respectively, in the Cole REITs and other affiliated offerings. The Company accounts for these investments using the equity method of accounting which requires the investment to be initially recorded at cost and subsequently adjusted for the Company’s share of equity in the respective Cole REIT’s earnings and distributions. The Company records its proportionate share of net income (loss) from the Cole REITs in equity in income (loss) and gain on disposition of unconsolidated entities in the consolidated statements of operations. During the years ended December 31, 2016, 2015 and 2014, the Company recognized $1.3 million of net loss, $46,000 of net income and $1.6 million of net loss, respectively, from the Cole REITs. The table below presents certain information related to the Company’s investments in the Cole REITs as of December 31, 2016 (carrying amount in thousands): Cole REIT CCPT V INAV CCIT II CCIT III CCPT IV Funds not yet in offering December 31, 2016 % of Outstanding Shares Owned 0.93% 0.08% 0.44% 86.72% 0.01% 100.00% Carrying Amount of Investment 1,396 $ 140 1,259 1,440 113 400 4,748 $ F-78 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2016 – (Continued) Unconsummated Sale of Cole Capital to RCS Capital Corporation On October 1, 2014, the Company announced that it had entered into a purchase agreement, pursuant to which RCS Capital Corporation (“RCAP”) would acquire Cole Capital for at least $700.0 million. As part of the transaction, the Company would be entitled to an earn-out of up to an additional $130.0 million based upon Cole Capital’s 2015 earnings before income taxes, depreciation and amortization. On November 3, 2014, the Company received notice from RCAP purporting to terminate the agreement. On December 4, 2014, the Company issued a press release announcing that it had entered into a settlement agreement with RCAP that resolved their dispute relating to the agreement. The settlement included: $42.7 million in cash paid by RCAP to the Company; a $15.3 million unsecured note issued by RCAP to the Company; and a release of the Company from its obligation to pay $2.0 million to RCAP for services performed in relation to the Company’s Common Stock offering in 2014. This settlement is included in other income, net in the accompanying consolidated statements of operations. The Company and RCAP also agreed to work together to terminate, unwind or otherwise discontinue all agreements, arrangements and understandings between the two parties and any of their respective subsidiaries. See Note 8 – Mortgage Notes Receivable for further discussion on the unsecured note and the Company’s inclusion of the entire amount of the note in reserve for loan loss in 2015 in the accompanying consolidated statements of operations. Due to Affiliates Due to affiliates, as reported in the accompanying consolidated balance sheets, was $16,000 and $0.2 million as of December 31, 2016 and 2015, respectively, related to amounts due to the Cole REITs. Due from Affiliates As of December 31, 2016 and 2015, $11.0 million and $10.6 million, respectively, was expected to be collected from affiliates, excluding balances from the Cole REITs’ lines of credit, discussed below, related to services provided by the Company and expenses subject to reimbursement by the Cole REITs in accordance with their respective advisory and property management agreements. On September 23, 2016, the Company entered into a $30.0 million revolving line of credit (the “Subordinate Promissory Note”) with Cole Corporate Income Operating Partnership III, LP (“CCI III OP”), the operating partnership of CCIT III (the “Subordinate Promissory Note Agreement”) . The Subordinate Promissory Note bears variable interest rates of one month LIBOR plus the Credit Facility Margin (as defined in the Subordinate Promissory Note Agreement), which ranges from 2.20% to 2.75%, plus 1.75% and matures on September 22, 2017. As of December 31, 2016, the Subordinate Promissory Note had an interest rate of 5.12% and $10.3 million was outstanding. As of December 31, 2015, the Company had revolving line of credit agreements in place with CCIT II and CCPT V (the “Affiliate Lines of Credit”) that provided for maximum borrowings of $60.0 million to each of CCIT II and CCPT V and bore variable interest rates of one month LIBOR plus 2.20%. As of December 31, 2015, there was $50.0 million outstanding on the Affiliate Lines of Credit. During the year ended December 31, 2016, the Affiliate Lines of Credit matured and no amounts were outstanding as of December 31, 2016. Note 19 – Net Loss Per Share/Unit The General Partner’s unvested Restricted Shares contain non-forfeitable rights to dividends and are considered to be participating securities in accordance with U.S. GAAP and, therefore, are included in the computation of earnings per share under the two-class computation method. Under the two-class computation method, net losses are not allocated to participating securities unless the holder of the security has a contractual obligation to share in the losses. The unvested Restricted Shares are not allocated losses as the awards do not have a contractual obligation to share in losses of the General Partner. The two-class computation method is an earnings allocation formula that determines earnings per share for each class of shares of Common Stock and participating securities according to dividends declared (or accumulated) and participation rights in undistributed earnings. F-79 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS September 30, 2016 (Unaudited) – (Continued) Net Loss Per Share The following is a summary of the basic and diluted net loss per share computation for the General Partner for the years ended December 31, 2016, 2015 and 2014 (in thousands,except share and per share amounts): Net loss attributable to the General Partner Dividends to preferred shares and units Net loss available to the General Partner Earnings allocated to participating securities Net loss available to common stockholders used in basic and diluted net loss per share Weighted average number of common stock outstanding - basic and diluted Basic and diluted net loss per share attributable to common stockholders Year Ended December 31, 2016 2015 2014 $ (195,863) $ (316,353) $ (977,185) (71,892) (267,755) (492) (71,892) (388,245) (410) (98,722) (1,075,907) (5,335) $ $ (268,247) $ (388,655) $ (1,081,242) 931,422,844 903,360,763 793,150,098 (0.29) $ (0.43) $ (1.36) For the year ended December 31, 2016, diluted net loss per share attributable to common stockholders excludes approximately 0.9 million of unvested Restricted Shares and Restricted Stock Units and approximately 23.8 million OP Units as the effect would have been antidilutive. For the year ended December 31, 2015, diluted net loss attributable to common stockholders excludes approximately 3.3 million of unvested Restricted Shares and Restricted Stock Units and approximately 23.8 million OP Units as the effect would have been antidilutive. For the year ended December 31, 2014, dilutive net loss attributable to common stockholders excludes approximately 5.4 million of unvested Restricted Shares and approximately 24.7 million OP Units as the effect would have been antidilutive. Net Loss Per Unit The following is a summary of the basic and diluted net loss per unit attributable to common unitholders, which includes all common general partner unitholders and limited partner unitholders. The computation for the OP for the years ended December 31, 2016, 2015 and 2014 (in thousands, except share and per share amounts): Year Ended December 31, 2016 2015 2014 Net loss attributable to the Operating Partnership $ (200,810) $ (324,766) $ (1,010,758) Dividends to preferred units Net loss available to the Operating Partnership Earnings allocated to participating units Net loss available to common unitholders used in basic and diluted net loss per unit Weighted average number of common units outstanding - basic and diluted Basic and diluted net loss per unit attributable to common unitholders (71,892) (272,702) (492) (71,892) (98,722) (396,658) (1,109,480) (410) (5,335) $ $ (273,194) $ (397,068) $ (1,114,815) 955,181,238 927,124,560 817,883,937 (0.29) $ (0.43) $ (1.36) For the year ended December 31, 2016, diluted net loss per unit attributable to common unitholders excludes approximately 0.9 million of unvested Restricted Shares and Restricted Stock Units as the effect would have been antidilutive. For the year ended December 31, 2015, diluted net loss attributable to common unitholders excludes approximately 3.3 million of unvested Restricted Shares and Restricted Stock Units as the effect would have been antidilutive. For the year ended December 31, 2014, dilutive net loss attributable to common unitholders excludes approximately 5.4 million of unvested Restricted Shares as the effect would have been antidilutive. F-80 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2016 – (Continued) Note 20 – Income Taxes As a REIT, the General Partner generally is not subject to federal income tax on taxable income that it distributes to its shareholders as long as it distributes at least 90% of its annual taxable income (computed without regard to the deduction for dividends paid and excluding net capital gains), with the exception of its TRS entities. However, the General Partner, including its TRS entities, and the Operating Partnership are still subject to certain state and local income and franchise taxes in the various jurisdictions in which they operate. Cole Capital Income Taxes Based on the above, Cole Capital’s business, substantially all of which is conducted through a TRS, recognized a benefit from income taxes of $9.8 million, $39.9 million and $40.6 million for the years ended December 31, 2016, 2015 and 2014, respectively, which are included in benefit from income taxes in the accompanying consolidated statements of operations. REI Income Taxes The REI segment recognized a provision for income taxes of $6.1 million, $3.6 million and $7.3 million for the years ended December 31, 2016, 2015 and 2014, respectively, which are included in benefit from income taxes in the accompanying consolidated statements of operations. The following table presents the reconciliation of the benefit from income taxes with the amount computed by applying the statutory federal income tax rate to loss before income taxes for the years ended December 31, 2016, 2015 and 2014 (in thousands): Consolidated loss before taxes Loss from non-taxable entities Loss attributable to taxable subsidiaries before income taxes Federal provision at statutory rate State income taxes and other Impairment of goodwill Total benefit from Cole Capital income taxes REI state income taxes Total benefit from income taxes 2016 $ (204,525) 64,081 (140,444) (49,155) (2,982) 42,326 (9,811) 6,110 (3,701) $ $ Year Ended December 31, 2015 $ (359,795) 128,545 2014 $ (1,044,176) 714,508 35.0 % 2.1 % (30.1)% (231,250) (80,938) (7,813) 48,879 7.0 % $ (39,872) 3,569 $ (36,303) 35.0 % 3.4 % (21.1)% 17.3 % $ $ (329,668) (115,384) (3,266) 78,073 (40,577) 7,313 (33,264) 35.0 % 1.0 % (23.7)% 12.3 % The following table presents the components of the benefit from income taxes for the years ended December 31, 2016, 2015 and 2014 (in thousands): Current Federal State Total current provision (benefit) Deferred Federal State Total deferred benefit REI state income taxes Year Ended December 31, 2016 2015 2014 $ $ 3,225 (2,900) 325 $ 10,122 2,248 12,370 (8,871) (1,265) (10,136) 6,110 (45,416) (6,826) (52,242) 3,569 (6,306) (947) (7,253) (28,968) (4,356) (33,324) 7,313 Total benefit from income taxes $ (3,701) $ (36,303) $ (33,264) F-81 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2016 – (Continued) The components of the net deferred tax assets as of December 31, 2016 and 2015, which are included in the accompanying consolidated balance sheet, are as follows (in thousands): Intangible assets Accrued compensation Fixed assets Program development costs Equity-based compensation Other Total net deferred tax asset December 31, 2016 $ December 31, 2015 (7,858) $ 6,163 (3,155) 11,668 4,249 1,228 12,295 $ (17,943) 6,251 (5,192) 13,310 4,700 1,030 2,156 $ The Company had no unrecognized tax benefits as of or during the years ended December 31, 2016, 2015 or 2014. Any interest and penalties related to unrecognized tax benefits would be recognized in provision for income taxes in the accompanying consolidated statements of operations. The Company files income tax returns in the U.S. federal jurisdiction, Canadian federal jurisdiction and various state and local jurisdictions, and is subject to routine examinations by the respective tax authorities. With few exceptions, the Company is no longer subject to federal or state examinations by tax authorities for years before 2012. Note 21 – Quarterly Results (Unaudited) Presented below is a summary of the unaudited quarterly financial information for the year ended December 31, 2016 for the General Partner (in thousands, except share and per share amounts): Revenues Net (loss) income Net (loss) income attributable to the General Partner Dividends to preferred shares and units Earnings allocated to participating securities (1) Net (loss) income available to common stockholders used in basic net (loss) income per share (1) Income attributable to limited partners (1) Net (loss) income available to common stockholders and limited partners used in diluted net (loss) income per share(1) Quarters Ended March 31, 2016 369,020 (116,080) $ $ June 30, 2016 371,019 3,233 September 30, 2016 362,915 30,246 $ December 31, 2016 351,869 (118,223) $ (113,086) (17,973) (125) (131,184) — 3,146 (17,973) (210) (15,037) — 29,495 (17,973) (154) 11,368 739 (115,418) (17,973) (89) (133,480) — $ (131,184) $ (15,037) $ 12,107 $ (133,480) Weighted-average shares outstanding - basic 903,825,726 904,107,378 943,480,170 973,681,227 Effect of Limited Partner OP Units and dilutive securities Weighted average number of common stock outstanding - diluted Basic and dilutive net (loss) income per share attributable to common stockholders (2) _______________________________________________ — — 25,206,373 — 903,825,726 904,107,378 968,686,543 973,681,227 $ (0.15) $ (0.02) $ 0.01 (3) $ (0.14) (1) Amounts for each period are calculated independently. The sum of the quarters may differ from the annual amount. (2) The sum of the quarterly net income (loss) per share amounts do not agree to the full year net loss per share amounts. The Company calculates net loss per share based on the weighted-average number of outstanding shares of Common Stock during the reporting period. The average number of shares fluctuates throughout the year and can therefore produce a full year result that does not agree to the sum of the individual quarters. (3) Represents dilutive net income per share attributable to common stockholders and limited partners. F-82 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2016 – (Continued) Presented below is a summary of the unaudited quarterly financial information for the year ended December 31, 2016 for the OP (in thousands, except share and per share amounts): Revenues Net (loss) income Net (loss) income attributable to the OP Dividends to preferred units Earnings allocated to participating units (1) Net (loss) income available to common unitholders used in basic and diluted net (loss) income per unit (1) Weighted-average shares outstanding - basic Effect of dilutive securities Weighted-average shares outstanding - diluted Basic and diluted net (loss) income per unit attributable to common unitholders (2) _______________________________________________ Quarters Ended March 31, 2016 369,020 (116,080) $ $ June 30, 2016 371,019 3,233 September 30, 2016 362,915 30,246 $ December 31, 2016 351,869 (118,223) $ (116,041) (17,973) (125) 3,229 (17,973) (210) 30,234 (17,973) (154) (118,232) (17,973) (89) $ (134,139) $ (14,954) $ 12,107 $ (136,294) 927,589,523 — 927,589,523 927,871,175 — 927,871,175 967,237,921 1,448,622 968,686,543 997,429,574 — 997,429,574 $ (0.15) $ (0.02) $ 0.01 $ (0.14) (1) Amounts for each period are calculated independently. The sum of the quarters may differ from the annual amount. (2) The sum of the quarterly net income (loss) per unit amounts do not agree to the full year net loss per unit amounts. The Company calculates net loss per unit based on the weighted-average number of outstanding units during the reporting period. The average number of units fluctuates throughout the year and can therefore produce a full year result that does not agree to the sum of the individual quarters. Presented below is a summary of the unaudited quarterly financial information for the year ended December 31, 2015 for VEREIT (in thousands, except share and per share amounts): Revenues Net (loss) income Quarters Ended March 31, 2015 393,968 (30,693) $ $ June 30, 2015 393,721 (108,709) September 30, 2015 384,954 8,141 $ December 31, 2015 383,374 (192,231) $ Net (loss) income attributable to the General Partner Dividends to preferred shares and units Earnings allocated to participating securities (1) Net loss attributable to common stockholders used in basic and diluted net loss per share (1) (29,970) (17,973) (5) (106,522) (17,973) — 7,529 (17,974) (217) (187,390) (17,972) (188) $ (47,948) $ (124,495) $ (10,662) $ (205,550) Weighted-average shares outstanding - basic and diluted 902,996,270 903,339,143 903,461,323 903,638,159 Basic and diluted net loss per share attributable to common stockholders (2) _______________________________________________ $ (0.05) $ (0.14) $ (0.01) $ (0.23) (1) Amounts for each period are calculated independently. The sum of the quarters may differ from the annual amount. (2) The sum of the quarterly net loss per share amounts do not agree to the full year net loss per share amounts. The Company calculates net loss per share based on the weighted-average number of outstanding shares of Common Stock during the reporting period. The average number of shares fluctuates throughout the year and can therefore produce a full year result that does not agree to the sum of the individual quarters. F-83 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2016 – (Continued) Presented below is a summary of the unaudited quarterly financial information for the year ended December 31, 2015 for the OP (in thousands, except share and per share amounts): Revenues Net (loss) income Quarters Ended March 31, 2015 393,968 (30,693) $ $ June 30, 2015 393,721 (108,709) September 30, 2015 384,954 8,141 $ December 31, 2015 383,374 (192,231) $ Net (loss) income attributable to the OP Dividends to preferred units Earnings allocated to participating units (1) Net loss available to common unitholders used in basic and diluted net loss per unit (1) (30,873) (17,973) (5) (109,322) (17,973) — 7,737 (17,974) (217) (192,308) (17,972) (188) $ (48,851) $ (127,295) $ (10,454) $ (210,468) Weighted-average units outstanding - basic and diluted 926,760,067 927,102,940 927,225,120 927,401,956 Basic and diluted net loss per unit attributable to common unitholders (2) _______________________________________________ $ (0.05) $ (0.14) $ (0.01) $ (0.23) (1) Amounts for each period are calculated independently. The sum of the quarters may differ from the annual amount. (2) The sum of the quarterly net loss per unit amounts do not agree to the full year net loss per unit amounts. The Company calculates net loss per unit based on the weighted-average number of outstanding units during the reporting period. The average number of units fluctuates throughout the year and can therefore produce a full year result that does not agree to the sum of the individual quarters. Note 22 – Subsequent Events The following events occurred subsequent to December 31, 2016: Real Estate Investment Activity From January 1, 2017 through February 17, 2017, the Company sold 19 properties for an aggregate gross sales price of $67.2 million, of which our share was $62.3 million and an estimated gain of $5.1 million. In addition, the Company acquired one property for a purchase price of $46.0 million and consolidated the fee and leasehold interest of three properties with the accompanying land purchases for $20.4 million. Mortgage Loan Agreements Subsequent to December 31, 2016, the Company received two notices of default from the lenders of two non-recourse loans each secured by one property, which had an aggregate outstanding balance of $41.8 million on the notice date, due to the Company’s non-repayment of the respective loan balances at maturity. Common Stock Dividend On February 22, 2017, the Company’s board of directors declared a quarterly cash dividend of $0.1375 per share of common stock (equaling an annualized dividend rate of $0.55 per share) for the first quarter of 2017 to stockholders of record as of March 31, 2017, which will be paid on April 17, 2017. An equivalent distribution by the Operating Partnership is applicable per OP unit. Preferred Stock Dividend On February 22, 2017, the Company’s board of directors declared a monthly cash dividend to holders of the Series F Preferred Stock for April 2017 through June 2017 in respect to the periods included in the table below. The corresponding record and payment dates for each month's Series F Preferred Stock dividend are also shown in the table below. The dividend for the Series F Preferred Stock accrues daily on a 360-day annual basis equal to an annualized dividend rate of $1.675 per share, or $0.1395833 per 30-day month. Period March 15, 2017 - April 14, 2017 April 15, 2017 - May 14, 2017 May 15, 2017 - June 14, 2017 Record Date April 1, 2017 May 1, 2017 June 1, 2017 Payment Date April 17, 2017 May 15, 2017 June 15, 2017 F-84 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. SCHEDULE II – Valuation and Qualifying Accounts December 31, 2016 (in thousands) Schedule II – Valuation and Qualifying Accounts Description Year Ended December 31, 2016 Reserve for program development costs Allowance for doubtful accounts and other reserves Unsecured note reserve Total Year Ended December 31, 2015 Reserve for program development costs Allowance for doubtful accounts and other reserves Unsecured note reserve Total Year Ended December 31, 2014 Reserve for program development costs Allowance for doubtful accounts and other reserves Total Balance at Beginning of Year Additions Deductions Balance at End of Year $ $ $ $ $ $ 34,798 $ 26,191 $ 6,595 15,300 56,693 $ 2,318 — 28,509 $ (29,337) (1) $ (1,337) — (30,674) $ 13,109 $ 21,689 $ 2,475 — 15,584 $ — $ 187 187 $ 4,564 15,300 41,553 13,109 3,312 16,421 $ $ $ — (444) — (444) — (1,024) (1,024) $ $ $ $ 31,652 7,576 15,300 54,528 34,798 6,595 15,300 56,693 13,109 2,475 15,584 _______________________________________________ (1) Deductions related to the closing of CCIT II’s primary offering. F-85 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION December 31, 2016 (in thousands) Property City State Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction 24 Hour Fitness Woodlands TX $ — $ 2,690 $ 7,463 $ — $ 10,153 $ (1,726) 9/24/2013 2002 7-Eleven Sarasota 7-Eleven Gloucester 7-Eleven Hampton 7-Eleven Hampton FL VA VA VA AAA Oklahoma City OK Aaron Rents Oneonta Aaron Rents Oxford Aaron Rents Valley Aaron Rents El Dorado Aaron Rents Springdale Aaron Rents Auburndale Aaron Rents Pensacola AL AL AL AR AR FL FL Aaron Rents Statesboro GA Aaron Rents Indianapolis Aaron Rents Lafayette Aaron Rents Mansura Aaron Rents Minden IN IN LA LA Aaron Rents Battle Creek MI Aaron Rents Benton Harbor MI Aaron Rents Redford Aaron Rents Kennett Aaron Rents Greenwood Aaron Rents Magnolia Aaron Rents Charlotte MI MO MS MS NC Aaron Rents Bowling Green OH Aaron Rents Kent OH Aaron Rents North Olmsted OH Aaron Rents Shawnee Aaron Rents Bloomsburg Aaron Rents Meadville OK PA PA 1,312 1,312 144 69 161 578 624 644 3,639 32,567 — — — — — 614 — 409 — 624 205 278 141 238 513 2,647 1,351 — — — 550 — — — — 434 319 — 1,472 579 564 614 449 — 400 — 159 351 235 404 81 323 286 217 125 203 156 287 308 326 245 218 303 224 237 1,080 748 827 743 916 5,127 924 1,163 1,071 652 497 1,043 843 924 698 473 967 2,791 1,201 928 1,080 753 1,135 856 1,224 F-86 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 2,624 (304) 11/19/2012 2000 722 693 805 (131) 12/24/2012 1985 (142) 12/24/2012 1986 (146) 12/24/2012 1959 36,206 (4,739) 2/7/2014 2009 1,285 1,026 968 981 1,429 6,478 1,083 1,514 1,306 1,056 578 1,366 1,129 1,141 823 676 1,123 3,078 1,509 1,254 1,325 971 1,438 1,080 1,461 (173) 2/7/2014 2008 (111) 2/7/2014 1989 (125) 2/7/2014 2009 (125) 2/7/2014 2000 (152) 2/7/2014 2009 (809) 2/7/2014 2009 (140) 2/7/2014 1979 (181) 2/7/2014 2008 (159) 2/7/2014 1998 (120) 2/7/2014 1989 (86) 2/7/2014 2000 (189) 2/7/2014 2008 (131) 2/7/2014 1995 (145) 2/7/2014 1997 (123) 2/7/2014 1972 (80) 2/7/2014 1999 (157) 2/19/2014 2006 (405) 2/7/2014 2000 (176) 2/7/2014 1994 (155) 2/7/2014 2009 (183) 2/7/2014 1999 (132) 2/7/2014 1960 (184) 2/7/2014 2008 (129) 2/7/2014 1996 (192) 2/7/2014 1994 Property City State Aaron Rents Columbia Aaron Rents Marion SC SC Aaron Rents Chattanooga TN Aaron Rents Copperas Cove TX Aaron Rents Haltom City Aaron Rents Humble Aaron Rents Killeen Aaron Rents Kingsville Aaron Rents Livingston Aaron Rents Mexia Aaron Rents Mission Aaron Rents Odessa Aaron Rents Pasadena Aaron Rents Port Lavaca Aaron Rents Texas City Aaron Rents Richmond Abbott Laboratories Abbott Laboratories Waukegan Columbus Abuelo's Rogers Academy Sports Mobile TX TX TX TX TX TX TX TX TX TX TX VA IL OH AR AL Academy Sports Montgomery AL Academy Sports Fayetteville Academy Sports Dalton AR GA Academy Sports Bossier City LA Academy Sports Johnson City TN Academy Sports Smyrna Academy Sports Austin Academy Sports Fort Worth Academy Sports Killeen Academy Sports Laredo Advance Auto Parts Advance Auto Parts Birmingham Birmingham TN TX TX TX TX AL AL Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — 319 — — — — — 599 — — 549 — — — — — — — — — — 576 100 480 423 858 548 815 345 173 126 324 99 444 160 275 508 1,010 685 1,075 1,341 1,024 1,146 3,244 1,040 1,498 1,186 954 768 1,231 1,274 2,156 1,435 — — — — — — — — — — — — — — — — 1,586 785 1,555 1,764 1,882 1,694 4,059 1,385 1,671 1,312 1,278 867 1,675 1,434 2,431 1,943 (153) 2/7/2014 1977 (104) 2/7/2014 2008 (149) 2/7/2014 1989 (205) 2/7/2014 2007 (172) 2/7/2014 2008 (179) 2/7/2014 2008 (495) 2/7/2014 1981 (159) 2/7/2014 2009 (229) 2/7/2014 2008 (183) 2/7/2014 2007 (145) 2/7/2014 2009 (121) 2/7/2014 2006 (192) 2/7/2014 2009 (196) 2/7/2014 2007 (328) 2/7/2014 2008 (249) 2/7/2014 1988 4,734 21,319 601 26,654 (3,636) 11/5/2013 1980 800 825 1,311 1,869 7,290 1,900 4,965 998 — — — 2,906 1,902 2,109 5,043 4,216 — 2,072 3,256 2,779 — — — 2,782 455 330 11,385 (7,632) — — — — — — — — — — — — — — 2,296 7,431 6,385 7,601 5,656 6,555 6,440 8,434 8,755 8,329 5,321 8,111 373 494 F-87 4,553 3,121 8,742 8,254 9,501 6,654 9,461 8,342 (183) 11/5/2013 1980 (466) 6/27/2013 2003 (1,117) 11/1/2013 2012 (1,063) 2/7/2014 2009 (2,158) 12/28/2012 2012 (1,540) 2/20/2013 2012 (1,004) 2/7/2014 2008 (8) 12/19/2016 2015 10,543 (1,267) 11/1/2013 2012 12,971 (1,141) 2/7/2014 1988 10,401 (1,099) 2/7/2014 2009 8,100 (747) 2/7/2014 2009 10,893 (1,111) 2/7/2014 2008 828 824 (81) 2/28/2013 1997 (108) 2/28/2013 1999 Property City State Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Calera Dothan Enterprise Opelika Brooklyn AL AL AL AL CT — — — — — 723 326 280 289 324 Bonita Springs FL 1,561 1,219 Lehigh Acres FL 1,425 Albany Cairo Hazlehurst Hinesville Perry GA GA GA GA GA Thomasville GA Auburn Bedford Clinton Fort Wayne Fort Wayne Franklin Mishawaka Richmond IN IN IN IN IN IN IN IN Salina KS Barbourville KY Bardstown KY Brandenburg KY Crestwood Florence Frankfort KY KY KY Georgetown KY Hardinsburg KY Inez Leitchfield KY KY — — — — — — 802 760 — — — 738 — — — — — — 1,030 — — — — — — 379 210 140 113 352 209 251 337 100 182 193 200 511 429 377 195 194 272 186 400 550 833 510 94 130 104 — (7) (6) — — — — (1) (24) — — (1) (30) — — — — — — — — — — 236 — — — — — — — (5) 723 326 420 1,156 1,429 1,552 2,016 629 326 451 430 487 377 1,347 1,386 729 450 371 1,256 1,373 1,616 782 1,098 1,090 742 1,546 1,280 1,034 1,323 845 1,174 939 F-88 1,446 (164) 12/27/2012 2008 645 694 1,445 1,753 2,771 2,395 838 442 564 782 695 598 1,684 1,486 911 643 571 1,767 1,802 1,993 977 1,292 1,598 928 1,946 1,830 1,867 1,833 939 1,304 1,038 (73) 12/31/2012 1997 (95) 12/31/2012 1995 (241) 4/24/2013 2013 (125) 11/7/2014 2006 (255) 2/7/2014 2007 (303) 2/7/2014 2008 (143) 12/31/2012 1995 (71) 12/31/2012 1993 (102) 12/31/2012 1998 (98) 12/31/2012 1994 (110) 12/31/2012 1994 (83) 12/31/2012 1997 (363) 3/29/2012 2007 (204) 2/7/2014 2007 (145) 6/5/2013 2004 (98) 2/28/2013 1998 (81) 2/28/2013 1998 (180) 2/7/2014 2010 (202) 2/7/2014 2007 (234) 2/7/2014 2007 (163) 4/30/2013 2006 (229) 4/15/2013 2006 (246) 12/10/2012 2005 (169) 12/10/2012 2005 (220) 2/7/2014 2009 (193) 2/7/2014 2008 (150) 2/7/2014 2007 (186) 2/7/2014 2007 (192) 12/10/2012 2007 (288) 8/22/2012 2010 (212) 12/10/2012 2005 Property City State Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Louisville KY 740 West Liberty KY Rayne Brownstown Caro Charlotte Flint LA MI MI MI MI Grand Rapids MI Howell Livonia Manistee Monroe Romulus Sault Ste. Marie South Lyon Tecumseh Washington Twnshp Tupelo Candler Charlotte Eden MI MI MI MI MI MI MI MI MI MS NC NC NC Granite Falls NC Rocky Mount NC Lakewood Woodbury Bethel Canton Dayton Delaware Eaton Franklin Holland NJ NJ OH OH OH OH OH OH OH — — — — — — 657 830 — — — — — — — — — — — — — — — — 730 647 — 716 — — 656 336 249 122 482 117 123 133 368 439 210 348 549 422 75 402 281 645 258 399 723 320 251 348 750 446 234 443 470 502 157 218 131 1,289 996 490 1,760 665 697 534 1,296 1,471 643 1,043 1,434 1,568 671 1,607 1,214 1,711 427 1,202 883 746 1,005 836 1,750 1,784 1,305 1,206 1,349 1,274 471 873 1,453 F-89 — — 26 — (9) (6) (3) — — — — — — 80 — — — — — — — — — — — — — — — — — — 1,625 1,245 638 2,242 773 814 664 1,664 1,910 853 1,391 1,983 1,990 826 2,009 1,495 2,356 685 1,601 1,606 1,066 1,256 1,184 2,500 2,230 1,539 1,649 1,819 1,776 628 1,091 1,584 (184) 2/7/2014 2009 (208) 4/15/2013 2006 (100) 5/21/2013 2000 (254) 2/7/2014 2008 (188) 11/23/2011 2002 (197) 11/23/2011 2002 (151) 11/23/2011 2002 (181) 2/7/2014 2008 (210) 2/7/2014 2008 (181) 12/12/2011 2003 (217) 4/15/2013 2007 (208) 2/7/2014 2007 (232) 2/7/2014 2007 (190) 11/23/2011 2003 (230) 2/7/2014 2008 (165) 5/27/2014 2009 (248) 2/7/2014 2008 (81) 2/20/2014 1998 (176) 2/7/2014 2012 (133) 2/7/2014 2001 (145) 7/16/2013 2004 (247) 8/9/2012 2010 (144) 2/21/2014 2005 (430) 8/22/2012 2010 (455) 6/20/2012 2007 (191) 2/7/2014 2008 (186) 2/7/2014 2008 (203) 2/7/2014 2007 (190) 2/7/2014 2008 (94) 6/13/2013 1987 (215) 8/9/2012 1984 (209) 2/7/2014 2008 Property City State Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Massillon Salem Springfield Toledo Twinsburg Van Wert Vermilion Warren OH OH OH OH OH OH OH OH Oklahoma City OK Sapulpa OK Chambersburg PA Selinsgrove Titusville Chapin Chesterfield Greenwood Rock Hill Sweetwater Alton Deer Park Houston Houston Houston Houston Houston Houston Humble Huntsville Kingwood Lubbock Pasadena Spring PA PA SC SC SC SC TN TX TX TX TX TX TX TX TX TX TX TX TX TX TX — 660 — 626 627 — — 405 — 704 — — — — — 411 — — — — 800 800 — — — — — — — — — — 218 267 461 116 486 33 337 83 208 362 553 99 207 395 131 210 506 360 169 295 343 248 837 285 225 189 420 327 419 265 382 388 1,987 1,147 1,075 1,375 1,004 630 1,079 745 1,178 1,300 830 891 1,172 922 745 630 915 839 958 1,507 1,029 991 685 1,405 1,293 1,666 1,404 1,278 1,392 1,259 1,146 1,616 F-90 — — — — — — — (2) — — — — — — — — 44 — (3) — — — — — — — — — — — — — 2,205 1,414 1,536 1,491 1,490 663 1,416 826 1,386 1,662 1,383 990 1,379 1,317 876 840 1,465 1,199 1,124 1,802 1,372 1,239 1,522 1,690 1,518 1,855 1,824 1,605 1,811 1,524 1,528 2,004 (291) 2/7/2014 2007 (169) 2/7/2014 2009 (244) 12/31/2012 2005 (198) 2/7/2014 2009 (152) 2/7/2014 2009 (125) 6/13/2013 1995 (169) 2/7/2014 2006 (196) 4/12/2012 2003 (290) 8/9/2012 2007 (182) 2/7/2014 2007 (181) 2/28/2013 1997 (177) 6/3/2013 2003 (266) 12/12/2012 2010 (235) 6/20/2012 2007 (190) 6/27/2012 2008 (170) 3/9/2012 1995 (134) 2/7/2014 1995 (194) 11/29/2012 2006 (226) 10/18/2012 2006 (213) 2/7/2014 2008 (297) 9/30/2011 2006 (286) 9/30/2011 2006 (168) 8/21/2012 2007 (199) 2/7/2014 2006 (183) 2/7/2014 2008 (234) 2/7/2014 2008 (200) 2/7/2014 2007 (182) 2/7/2014 2008 (198) 2/7/2014 2009 (181) 2/7/2014 2008 (287) 7/6/2012 2008 (215) 2/7/2014 2007 Property City State Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Aetna Life Insurance AGCO Albertson's Webster Appleton TX WI Fort Atkinson WI Janesville Kenosha Milwaukee WI WI WI St. Mary's WV Fresno Duluth Lake Havasu City Albertson's Mesa Albertson's Phoenix Albertson's Scottsdale Albertson's Tucson Albertson's Tucson Albertson's Yuma Albertson's Denver Albertson's Durango Albertson's Fort Collins Albertson's Alexandria CA GA AZ AZ AZ AZ AZ AZ AZ CO CO CO LA 3,508 1,275 2,997 1,944 3,457 2,456 5,602 2,872 5,362 2,710 2,688 1,642 4,341 1,574 3,793 2,058 3,724 3,520 4,275 1,288 4,060 1,423 Albertson's Baton Rouge LA 4,673 1,711 Albertson's Baton Rouge LA 3,883 1,681 Albertson's Baton Rouge LA 5,358 1,932 Albertson's Bossier City Albertson's Lafayette LA LA 3,555 1,949 5,314 1,556 Albertson's Albuquerque NM 4,445 2,834 Albertson's Albuquerque NM 4,356 2,950 Albertson's Clovis NM 3,879 769 Albertson's Farmington NM 2,535 1,442 Albertson's Las Cruces Albertson's Los Lunas Albertson's Silver City NM NM NM — 1,588 4,033 1,105 3,516 591 — — — 939 — — — — 385 498 353 299 569 610 309 1,452 1,228 824 1,695 465 1,473 928 — — — — — — — 1,837 1,726 1,177 1,994 1,034 2,083 1,237 (205) 2/7/2014 2008 (184) 2/7/2014 2007 (156) 8/26/2013 2004 (248) 2/7/2014 2007 (99) 3/13/2013 2004 (214) 2/7/2014 2008 (211) 12/28/2012 2007 3,405 22,343 (3,611) 22,137 (704) 11/5/2013 1969 8,600 3,503 14,842 — — — — — — — — — — — — — — — — — — — — — — — — 18,345 (1,835) 2/7/2014 1999 6,671 6,089 7,084 (912) 2/7/2014 2003 (675) 2/7/2014 1997 (748) 2/7/2014 1998 10,815 (1,293) 2/7/2014 1991 10,414 (1,261) 2/7/2014 2000 5,229 8,026 7,344 6,924 7,900 7,447 8,772 7,354 9,768 7,074 9,482 6,516 6,338 5,634 3,947 7,307 5,875 4,415 (603) 2/7/2014 1994 (1,063) 2/7/2014 2003 (843) 2/7/2014 2002 (584) 2/7/2014 1993 (1,070) 2/7/2014 1996 (1,020) 2/7/2014 1990 (1,179) 2/7/2014 1991 (953) 2/7/2014 1992 (1,329) 2/7/2014 1985 (838) 2/7/2014 1988 (1,356) 2/7/2014 2000 (825) 2/7/2014 1997 (776) 2/7/2014 1978 (930) 2/7/2014 1984 (524) 2/7/2014 2002 (1,177) 2/7/2014 1997 (945) 2/7/2014 1991 (816) 2/7/2014 1982 5,396 4,145 4,628 7,943 7,704 3,587 6,452 5,286 3,404 6,612 6,024 7,061 5,673 7,836 5,125 7,926 3,682 3,388 4,865 2,505 5,719 4,770 3,824 F-91 Property City State Albertson's Abilene Albertson's Arlington Albertson's El Paso Albertson's Fort Worth Albertson's Fort Worth Albertson's Fort Worth Albertson's Fort Worth Albertson's Midland Albertson's Odessa Albertson's Weatherford Ale House Orlando TX TX TX TX TX TX TX TX TX TX FL Ale House St. Petersburg FL Aliberto's Mexican Food Allied Power Group Holbrook Houston AM General Fort Wayne Amazon West Columbia Amazon Charleston Amazon Chattanooga Amcor Rigid Plastics USA, Inc AMEC Foster Wheeler Oil & Gas Amega West Alhambra Houston West Alexander Amega West Midland AZ TX IN SC TN TN CA TX PA TX Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — 26,409 3,148 29,557 (5,117) 11/5/2013 1994 3,931 1,187 4,154 1,714 4,384 1,375 3,509 2,146 4,682 1,833 3,110 1,833 3,793 1,174 5,571 1,002 5,017 947 3,886 1,820 6,373 6,560 6,447 4,678 7,311 4,528 6,255 9,885 8,867 5,771 — — — — — — — — — — 3,647 (1,300) 290 930 32 3,116 96 1,659 13,161 — — — — — — — — — — — — 3,112 53,103 38,500 2,678 50,880 40,800 1,995 54,332 — 7,143 8,730 2,524 30,398 117 591 751 1,787 379 14,260 7,560 8,274 7,822 6,824 9,144 6,361 7,429 (1,031) 2/7/2014 1984 (1,060) 2/7/2014 2002 (1,082) 2/7/2014 1978 (798) 2/7/2014 2000 (1,166) 2/7/2014 2004 (747) 2/7/2014 2002 (979) 2/7/2014 1988 10,887 (1,572) 2/7/2014 1984 9,814 7,591 2,637 4,046 128 (1,394) 2/7/2014 1985 (949) 2/7/2014 2001 (77) 6/27/2013 1995 (618) 6/27/2013 1995 (19) 6/27/2013 1981 14,820 (2,319) 6/12/2014 2009 — — — — — — — — — — — — — — — — — 56,215 (7,350) 2/7/2014 2012 53,558 (6,965) 2/7/2014 2011 56,327 (7,617) 2/7/2014 2011 15,873 (2,108) 1/24/2013 1966 32,922 (4,779) 11/5/2013 1998 1,904 970 (215) 6/12/2014 2010 (48) 6/12/2014 1979 15,011 (2,724) 1/25/2013 2000 130,113 (27,503) 11/16/2012 1998 2,277 2,887 3,319 3,720 1,924 2,514 2,629 2,495 (237) 3/28/2014 1981 (356) 7/31/2013 1993 (417) 8/30/2013 1995 (459) 7/31/2013 1999 (264) 2/7/2014 2006 (362) 7/31/2013 1996 (406) 7/31/2013 1998 (411) 7/31/2013 1995 Ameriprise Ashwaubenon WI 10,998 AON Lincolnshire IL 92,517 5,336 124,777 Apple Market St. Joseph MO Applebee's Auburn Applebee's Oxford Applebee's Phenix City AL AL AL Applebee's West Memphis AR Applebee's Arvada Applebee's Applebee's Brighton Colorado Springs CO CO CO — — — — — — — — 639 1,155 1,162 1,488 388 754 657 499 1,638 1,732 2,157 2,232 1,536 1,760 1,972 1,996 F-92 Property City State Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Applebee's Colorado Springs Applebee's Greeley Applebee's Northglenn Applebee's Pueblo Applebee's Pueblo Applebee's Thornton Applebee's Bradenton Applebee's Brandon Applebee's Crestview Applebee's Crystal River Applebee's Davenport Applebee's Inverness Applebee's Lakeland Applebee's Lakeland Applebee's Largo Applebee's New Port Richey Applebee's Plant City Applebee's Riverview CO CO CO CO CO CO FL FL FL FL FL FL FL FL FL FL FL FL Applebee's St. Petersburg FL Applebee's Temple Terrace Applebee's Valrico FL FL Applebee's Wesley Chapel FL Applebee's Winter Haven FL Applebee's Augusta Applebee's Dublin Applebee's Evans GA GA GA Applebee's Milledgeville GA Applebee's Savannah GA Applebee's Clinton Applebee's Fort Dodge Applebee's Marshalltown Applebee's Mason City IA IA IA IA — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 629 559 578 752 960 681 2,475 2,453 943 1,328 1,506 1,977 1,283 1,959 2,334 1,695 2,079 1,849 2,329 2,396 1,202 3,272 2,130 1,254 1,171 1,426 1,174 1,329 490 — 660 340 1,888 2,235 1,734 2,257 2,879 2,043 3,713 3,647 1,752 2,467 4,517 2,965 2,383 3,638 3,501 3,147 2,869 3,434 3,493 3,594 3,274 3,272 2,603 2,329 1,431 2,649 1,761 2,468 1,184 1,363 1,175 1,495 F-93 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 2,517 2,794 2,312 3,009 3,839 2,724 6,188 6,100 2,695 3,795 6,023 4,942 3,666 5,597 5,835 4,842 4,948 5,283 5,822 5,990 4,476 6,544 4,733 3,583 2,602 4,075 2,935 3,797 1,674 1,363 1,835 1,835 (389) 7/31/2013 1994 (460) 7/31/2013 1995 (357) 7/31/2013 1993 (453) 8/30/2013 1998 (593) 7/31/2013 1998 (410) 8/30/2013 1994 (764) 7/31/2013 1994 (741) 6/27/2013 1997 (360) 7/31/2013 2000 (508) 7/31/2013 2001 (929) 7/31/2013 2007 (610) 7/31/2013 2000 (490) 7/31/2013 1997 (749) 7/31/2013 2000 (720) 7/31/2013 1995 (648) 7/31/2013 1998 (583) 6/27/2013 2001 (707) 7/31/2013 2006 (719) 7/31/2013 1994 (739) 7/31/2013 1993 (665) 6/27/2013 1998 (673) 7/31/2013 2000 (536) 7/31/2013 1999 (479) 7/31/2013 1987 (294) 7/31/2013 1998 (545) 7/31/2013 2004 (362) 7/31/2013 1999 (508) 7/31/2013 1994 (235) 6/27/2013 1995 (425) 6/27/2013 1995 (233) 6/27/2013 1995 (297) 6/27/2013 1995 Property City State Applebee's Muscatine Applebee's Boise Applebee's Garden City Applebee's Nampa Applebee's Pocatello Applebee's Marion Applebee's Sterling Applebee's Swansea Applebee's Newton Applebee's Fall River Applebee's Adrian Applebee's Kalamazoo IA ID ID ID ID IL IL IL KS MA MI MI Applebee's Farmington MO Applebee's Joplin Applebee's Rolla Applebee's St. Charles Applebee's Horn Lake MO MO MO MS Applebee's Ocean Springs MS Applebee's Alamogordo NM Applebee's Hobbs NM Applebee's Rio Rancho NM Applebee's Roswell NM Applebee's North Canton OH Applebee's Clackamas Applebee's Gresham OR OR Applebee's Lake Oswego OR Applebee's Roseburg Applebee's Tualatin OR OR Applebee's Chambersburg PA Applebee's Greenville Applebee's Bartlett SC TN Applebee's Corpus Christi TX Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 330 948 628 729 612 855 390 727 504 275 407 575 574 754 671 781 584 673 271 600 645 405 152 901 853 1,352 717 1,116 591 600 315 563 1,266 1,761 2,512 2,915 1,837 1,527 1,291 1,741 1,569 1,558 2,351 2,644 2,242 1,829 2,272 1,075 1,642 1,708 2,438 3,401 3,654 2,295 838 2,103 2,560 1,652 1,673 2,072 2,416 2,166 2,201 2,926 F-94 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 1,596 2,709 3,140 3,644 2,449 2,382 1,681 2,468 2,073 1,833 2,758 3,219 2,816 2,583 2,943 1,856 2,226 2,381 2,709 4,001 4,299 2,700 990 3,004 3,413 3,004 2,390 3,188 3,007 2,766 2,516 3,489 (251) 6/27/2013 1995 (362) 7/31/2013 1998 (504) 8/30/2013 2003 (600) 7/31/2013 2000 (378) 7/31/2013 1998 (276) 2/7/2014 1998 (256) 6/27/2013 1995 (305) 2/7/2014 1998 (319) 6/27/2013 1998 (321) 7/31/2013 1994 (414) 2/7/2014 1995 (408) 2/7/2014 1994 (392) 2/7/2014 1999 (346) 2/7/2014 1994 (397) 2/7/2014 1997 (146) 6/23/2014 1990 (279) 2/7/2014 2005 (347) 6/27/2013 2000 (490) 8/30/2013 2000 (700) 7/31/2013 2002 (752) 7/31/2013 1995 (472) 7/31/2013 1998 (170) 6/27/2013 1992 (433) 7/31/2013 1997 (514) 8/30/2013 2004 (340) 7/31/2013 1993 (336) 8/30/2013 2000 (426) 7/31/2013 2002 (371) 2/7/2014 1995 (429) 6/27/2013 1995 (363) 2/7/2014 2005 (594) 6/27/2013 2000 Property City State Applebee's Edinburg Applebee's Mcallen TX TX Applebee's New Braunfels TX Applebee's San Antonio Applebee's Tyler Applebee's Norton Applebee's Wytheville Applebee's Richland Applebee's Vancouver Applebee's Vancouver TX TX VA VA WA WA WA Apria Healthcare Indianapolis IN Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Alexander City AL Arab Guntersville AL AL Hampton Cove AL Bullhead City AZ Fountain Hills AZ Phoenix Arvada Apopka AZ CO FL Merritt Island FL Orange Park Orlando Rockledge Atlanta Canton FL FL FL GA GA Douglasville GA Kennesaw GA Richmond Hill GA Savannah Suwanee GA GA Mount Vernon IL Encumbrances at December 31, 2016 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — Initial Costs (1) Land 898 1,114 566 732 696 848 564 1,112 791 718 981 527 40 142 310 550 241 559 190 464 297 420 251 381 1,207 370 370 583 430 293 370 911 Buildings, Fixtures and Improvements 2,058 1,988 1,486 1,796 2,904 433 923 2,064 1,846 1,675 3,922 401 887 503 986 — 597 618 1,465 697 552 1,256 585 571 987 1,200 1,692 840 755 293 1,561 764 F-95 Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — 30 — — — — — — — — — — — — — — — — — — — — — 2,956 3,102 2,052 2,528 3,600 1,281 1,487 3,176 2,637 2,393 4,933 928 927 645 (418) 6/27/2013 2006 (404) 6/27/2013 1993 (302) 6/27/2013 1995 (365) 6/27/2013 2003 (490) 2/7/2014 1990 (175) 2/7/2014 2006 (228) 2/7/2014 2000 (425) 7/31/2013 2003 (371) 8/30/2013 2001 (345) 7/31/2013 2001 (563) 5/19/2014 1993 (79) 6/27/2013 1999 (170) 6/27/2013 1995 (99) 6/27/2013 1995 1,296 (189) 6/27/2013 1995 550 838 1,177 1,655 1,161 849 1,676 836 952 2,194 1,570 2,062 1,423 1,185 586 1,931 1,675 — 6/27/2013 1999 (117) 6/27/2013 1994 (121) 6/27/2013 1995 (281) 6/27/2013 1995 (127) 7/31/2013 1985 (101) 7/31/2013 1984 (241) 6/27/2013 1995 (107) 7/31/2013 1985 (104) 7/31/2013 1984 (180) 7/31/2013 1984 (230) 6/27/2013 1995 (324) 6/27/2013 1995 (165) 6/27/2013 1984 (148) 6/27/2013 1984 (53) 7/31/2013 1985 (299) 6/27/2013 1995 (150) 6/27/2013 1999 Initial Costs (1) Encumbrances at December 31, 2016 State Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's City Avon Fort Wayne Indianapolis Indianapolis New Albany New Albany Scottsburg Winchester Kansas City Salina Topeka IN IN IN IN IN IN IN IN KS KS KS Hopkinsville KY Louisville KY Alma Chesterfield Davison Flint Flint Grandville Midland Pontiac Port Huron Saginaw South Haven Walker Wyoming Corinth Fayetteville Greenville Jonesville Kernersville Omaha MI MI MI MI MI MI MI MI MI MI MI MI MI MS NC NC NC NC NE — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 500 529 530 370 456 325 526 341 280 540 270 432 336 380 210 420 110 230 1,133 340 180 210 310 260 360 1,513 753 420 310 350 280 359 812 647 1,236 1,130 470 465 445 511 364 300 433 528 625 408 841 631 1,422 1,428 755 753 962 868 1,110 573 1,002 648 429 2,001 681 908 774 — F-96 — — — — — — — — — — — — — — — — — — — — — — — — — — — — (460) — — — 1,312 1,176 1,766 1,500 926 790 971 852 644 840 703 960 961 788 1,051 1,051 1,532 1,658 1,888 1,093 1,142 1,078 1,420 833 1,362 2,161 1,182 2,421 531 1,258 1,054 359 (156) 6/27/2013 1995 (118) 7/31/2013 1987 (237) 6/27/2013 1995 (216) 6/27/2013 1995 (92) 6/27/2013 2005 (91) 6/27/2013 1995 (87) 6/27/2013 1989 (93) 7/31/2013 1988 (70) 6/27/2013 1995 (58) 6/27/2013 1995 (83) 6/27/2013 1995 (96) 7/31/2013 1985 (160) 5/30/2013 1979 (78) 6/27/2013 1995 (161) 6/27/2013 1995 (121) 6/27/2013 1995 (272) 6/27/2013 1995 (274) 6/27/2013 1995 (138) 7/31/2013 1982 (144) 6/27/2013 1995 (184) 6/27/2013 1995 (166) 6/27/2013 1995 (213) 6/27/2013 1995 (110) 6/27/2013 1995 (192) 6/27/2013 1995 (118) 7/31/2013 1970 (84) 6/27/2013 1984 (383) 6/27/2013 1995 (33) 6/27/2013 1995 (174) 6/27/2013 1995 (148) 6/27/2013 1995 — 7/31/2013 1984 Property City State Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction 384 (172) Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Arby's Rochester Columbus Willard Allentown Carlisle Erie Hanover Chattanooga Memphis Amarillo NY OH OH PA PA PA PA TN TN TX Ashley Furniture Jeffersontown KY Assured Partners, Inc. Richfield At Home & Gabes Florence OH KY AT&T AT&T Schaumburg IL Richardson Auto Pawn Columbus AutoZone Chicago AutoZone Yorkville AutoZone Pearl River AutoZone Hernando AutoZone Blanchester AutoZone Hamilton AutoZone Hartville AutoZone Mt. Orab AutoZone Trenton AutoZone Rapid City AutoZone Nashville Bahama Breeze Pittsburgh Bahama Breeze Memphis Bandana's Bar-B- Q Restaurant Bandana's Bar-B- Q Restaurant Bandana's Bar-B- Q Restaurant Collinsville Arnold Fenton — — — — — — — — — — — — — — 128 400 230 600 200 188 400 201 449 260 1,966 1,414 6,794 2,364 — — — — — — — — — — 17 — 1,155 599 1,652 472 552 921 469 835 627 2,368 — 5,968 9,305 340 1,555 829 2,252 672 740 1,321 670 1,284 887 4,334 1,431 (22) 7/31/2013 1985 (221) 6/27/2013 1995 (115) 6/27/2013 1995 (317) 6/27/2013 1995 (91) 6/27/2013 1995 (108) 6/27/2013 1966 (177) 6/27/2013 1995 (85) 7/31/2013 1998 (152) 7/31/2013 1998 (120) 6/27/2013 1995 (317) 9/26/2014 1970 — 2/21/2014 1995 12,762 (15) 12/14/2016 1992 TX GA IL IL LA MS OH OH OH OH OH SD TN PA TN IL MO MO 11,351 1,891 31,118 — — — 719 — 535 814 614 679 504 571 861 — — — — — 170 698 383 239 141 341 507 197 258 306 375 555 1,590 2,370 340 460 470 — 1,047 1,534 1,193 833 838 1,283 1,156 1,219 812 969 1,270 1,753 1,313 627 433 314 F-97 548 12,217 (1,257) 9/24/2014 1989 13 — — — — — — — — — — — — — — — — — 33,022 (4,902) 11/5/2013 1986 170 1,745 1,917 1,432 974 1,179 1,790 1,353 1,477 1,118 1,344 1,825 3,343 3,683 967 893 784 — 6/27/2013 1987 (218) 4/30/2013 1995 (232) 5/19/2014 2006 (184) 2/7/2014 2007 (114) 2/7/2014 2003 (128) 2/7/2014 2008 (192) 2/7/2014 2008 (175) 2/7/2014 2008 (181) 2/7/2014 2009 (123) 2/7/2014 2008 (142) 2/7/2014 2008 (190) 2/7/2014 2009 (155) 7/28/2014 2004 (100) 7/28/2014 1998 (124) 6/27/2013 1995 (86) 6/27/2013 1995 (63) 8/30/2013 1986 Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction 2,195 107 2,814 (382) 1/8/2014 1980 Property City State Bank of America Merced Bank of America Asheville Bank of America Charlotte Bank of America Grants Pass CA NC NC OR — — — — 512 383 62 393 195 642 2,979 Banner Life Insurance Baxter International Urbana MD 19,600 2,733 31,483 Beall's Lakeland Bloomington IN FL — — 1,310 2,033 8,216 4,809 Becton, Dickinson and Company San Antonio TX 9,510 1,666 19,092 40,278 2,761 52,454 Bed Bath & Beyond Stockton Benihana Anchorage CA AK Benihana Miami Beach FL Benihana Stuart Benihana Alpharetta Benihana Schaumburg Benihana Wheeling Benihana Farmington Hills FL GA IL IL MI Benihana Maple Grove MN Benihana Dallas TX — — — — — — — — — 1,391 3,775 1,661 1,151 2,319 1,896 2,025 1,319 2,988 Best Buy Montgomery AL 3,148 1,370 Best Buy Coral Springs FL Best Buy Bourbonnais Best Buy Indianapolis Best Buy Richmond Best Buy Marquette IL IN IN MI Best Buy Norton Shores MI Best Buy Southaven Best Buy Tupelo Best Buy Pineville Best Buy BHC Marketing Kenosha The Woodlands Big Lots Chester Big O Tires Phoenix MS MS NC WI TX VA AZ — — — — — — — — — — — — 782 2,715 1,724 665 549 836 1,568 2,045 484 1,818 1,925 4,724 335 206 1,877 433 1,917 1,485 1,396 1,273 2,049 2,604 1,275 5,749 4,843 5,156 4,775 4,429 4,207 4,099 4,318 1,934 7,970 5,503 40,332 3,373 1,367 F-98 — — — — 368 — — — — — — — — — — — — — — — — — 593 — 1 — — — 20 169 — 578 704 (33) 1/8/2014 1993 (108) 1/8/2014 1983 3,372 (504) 1/8/2014 1963 34,216 (4,200) 2/7/2014 2011 9,894 6,842 (1,575) 11/5/2013 1995 (624) 7/16/2014 2006 20,758 (2,903) 11/5/2013 2008 55,215 (13,999) 8/17/2012 2003 3,268 4,208 3,578 2,636 3,715 3,169 4,074 3,923 4,263 7,119 7,558 6,880 5,440 4,978 5,636 5,667 6,364 2,418 9,788 7,428 (341) 2/7/2014 1998 (117) 2/7/2014 1972 (363) 2/7/2014 1976 (134) 2/7/2014 2003 (265) 2/7/2014 1992 (152) 2/7/2014 2001 (427) 2/7/2014 2012 (468) 2/7/2014 2006 (273) 2/7/2014 1975 (933) 2/7/2014 2003 (865) 2/7/2014 1993 (923) 2/7/2014 1991 (749) 2/7/2014 2009 (711) 2/7/2014 2011 (772) 2/7/2014 2010 (642) 2/7/2014 2001 (729) 2/7/2014 2007 (298) 5/19/2014 2005 (1,251) 2/7/2014 1994 (862) 2/7/2014 2008 45,076 (6,018) 11/5/2013 2009 3,877 1,573 (596) 2/24/2014 2013 (197) 2/7/2014 2010 Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction 1,265 4,212 8,594 — — — 1,581 4,745 (333) 6/1/2012 2006 (667) 2/7/2014 1999 12,687 (1,369) 2/7/2014 2003 10,931 (15) 16,485 (1,647) 2/7/2014 2001 — — — — — 316 533 4,093 5,569 5,929 16,348 8,446 5,104 7,661 8,416 2,168 14,002 — 3,585 21,344 12,645 5,538 36,445 — 6,882 10,196 — — — — — — — — — — 22,277 (2,154) 2/7/2014 2003 12,765 (1,198) 2/7/2014 1997 16,170 (1,768) 2/7/2014 1997 24,929 (2,678) 2/7/2014 1993 41,983 (4,219) 2/7/2014 2006 17,078 (1,504) 2/7/2014 2003 20,376 (2,021) 2/7/2014 2001 19,184 (2,008) 2/7/2014 1995 29,670 (3,089) 2/7/2014 1993 19,048 (1,633) 2/7/2014 1995 Westminster MD 13,978 6,516 13,860 Auburn Portsmouth Deptford ME NH NJ — — 2,674 4,216 16,510 25,454 11,004 6,558 12,490 North Canton OH 6,787 456 8,668 462 9,586 (2,371) 2/20/2013 1998 13,621 3,400 16,782 — — — — — — — — — — — — — — — — 620 480 151 572 2,840 645 247 278 1,013 251 749 655 566 442 505 646 2,467 809 151 868 6,826 1,198 986 833 1,881 1,004 1,789 1,217 1,321 1,032 1,179 1,937 F-99 — — — — — — — — — — — — — — — — — 20,182 (2,361) 2/7/2014 1996 3,087 1,289 302 1,440 9,666 1,843 1,233 1,111 2,894 1,255 2,538 1,872 1,887 1,474 1,684 2,583 (489) 6/27/2013 1995 (160) 6/27/2013 1995 (30) 6/27/2013 1979 (176) 6/27/2013 1999 (1,280) 11/5/2013 1965 (376) 7/30/2012 2011 (286) 11/29/2012 2010 (261) 7/27/2012 1980 (343) 7/31/2013 1997 (315) 7/30/2012 2010 (351) 6/27/2013 1973 (382) 7/27/2012 2011 (415) 7/27/2012 2010 (324) 7/27/2012 2011 (370) 7/30/2012 2011 (353) 7/31/2013 1988 SC SC FL FL FL MA MA MA MD PA CA CO Property City State Big O Tires Los Lunas NM Bi-Lo's Grocery Greenwood Bi-Lo's Grocery Mt Pleasant BJ's Wholesale Club Boynton Beach BJ's Wholesale Club Jacksonville BJ's Wholesale Club Pembroke Pines Greenfield Leominster Uxbridge California BJ's Wholesale Club BJ's Wholesale Club BJ's Wholesale Club BJ's Wholesale Club BJ's Wholesale Club BJ's Wholesale Club BJ's Wholesale Club BJ's Wholesale Club BJ's Wholesale Club BJ's Wholesale Club Lancaster Black Angus Dublin Black Bear DIner Colorado Springs Black Meg 43 Copperas Cove TX Blue Goose Cantina Mexican Grapevine Bob's Stores Randolph Bojangles Winder Bojangles Biscoe Bojangles Boone Bojangles Denver Bojangles Dobson Bojangles Hickory Bojangles Indian Trail Bojangles Morganton Bojangles Roanoke Rapids Bojangles Southport Bojangles Statesville TX MA GA NC NC NC NC NC NC NC NC NC NC Property City State Bojangles Taylorsville Bojangles Troutman Bojangles Chapin Bojangles Clinton Bojangles Fountain Inn Bojangles Greenwood Bojangles Moncks Corner Bojangles Walterboro Bonefish Grill Lakeland NC NC SC SC SC SC SC SC FL Bonefish Grill Independence OH Bonefish Grill Gainesville VA Boston Market Indianapolis Boston Market Indianapolis Boston Market Fayetteville Boston Market Raleigh Brangus Steakhouse Jasper IN IN NC NC AL Bridgestone Tire Kansas City MO Bruegger's Bagels Iowa City Bruegger's Bagels Durham Bruegger's Bagels Raleigh Buca di Beppo Italian Buca di Beppo Italian Buffalo Wild Wings Bunge North America Wheeling Westlake Langhorne Fort Worth Burger King Anchorage Burger King Andalusia Burger King Atmore Burger King Brewton Burger King Dothan Burger King Dothan Burger King Enterprise Burger King Evergreen IA NC NC IL OH PA TX AK AL AL AL AL AL AL AL Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — 436 718 577 397 287 440 505 454 750 895 751 930 410 460 280 140 651 40 312 230 450 370 815 6,262 1,100 — — — — — — — — 427 181 181 307 628 594 437 172 1,108 1,077 1,071 926 1,150 1,320 1,179 1,363 1,897 2,252 1,325 — — — — — — — — — — — — 350 — — — — — (8) — — — — — — — — — — — — — — 1,070 1,520 1,015 219 1,954 379 728 654 1,272 887 815 8,433 489 1,025 723 920 1,167 1,104 655 689 F-100 1,544 1,795 1,648 1,323 1,437 1,760 1,684 1,817 2,647 3,147 2,076 1,280 1,480 1,980 1,295 359 2,605 411 1,040 884 1,722 1,257 1,630 9,533 916 1,206 904 1,227 1,795 1,698 1,092 861 (217) 6/27/2013 1987 (243) 10/10/2013 2012 (330) 8/9/2012 2009 (291) 7/27/2012 2009 (260) 10/10/2013 2012 (360) 2/28/2013 1995 (343) 11/29/2012 2010 (396) 11/29/2012 2010 (331) 2/7/2014 2003 (408) 2/7/2014 2006 (345) 2/7/2014 2004 (28) 6/27/2013 1995 (205) 6/27/2013 1995 (291) 6/27/2013 1995 (195) 6/27/2013 1995 (43) 6/27/2013 1995 (411) 5/31/2013 2008 (73) 6/27/2013 1995 (133) 7/31/2013 1926 (125) 6/27/2013 1995 (252) 6/27/2013 1995 (176) 6/27/2013 1995 (168) 7/31/2013 1999 (1,423) 11/5/2013 2005 (96) 6/27/2013 1982 (187) 7/31/2013 2000 (132) 7/31/2013 2000 (168) 7/31/2013 1993 (213) 7/31/2013 1983 (201) 7/31/2013 1999 (120) 7/31/2013 1985 (126) 7/31/2013 1997 Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Burger King Monroeville Burger King Burger King Opp Troy Burger King Sierra Vista Burger King Tucson Burger King Denver Burger King Clearwater Burger King Defuniak Springs Burger King Largo Burger King Niceville Burger King Panama City Burger King Springfield Burger King Tallahassee Burger King Tallahassee Burger King Alpharetta Burger King Alpharetta Burger King Alpharetta Burger King Alpharetta Burger King Atlanta Burger King Augusta Burger King Bainbridge Burger King Cairo Burger King Fort Oglethorpe Burger King Martinez Burger King Roswell Burger King Thomson Burger King Valdosta Burger King Des Moines Burger King Perry Burger King Red Oak Burger King Shenandoah Burger King Stuart AL AL AL AZ AZ CO FL FL FL FL FL FL FL FL GA GA GA GA GA GA GA GA GA GA GA GA GA IA IA IA IA IA — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 325 214 461 260 300 872 981 362 683 598 319 324 720 843 635 1,128 795 501 380 693 347 245 170 909 495 748 564 1,160 557 334 313 607 604 857 1,383 1,041 1,307 1,242 591 1,087 412 399 956 971 720 454 865 977 943 1,219 499 2,080 1,042 981 2,175 1,350 1,156 876 376 949 680 1,002 582 911 F-101 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 929 1,071 1,844 1,301 1,607 2,114 1,572 1,449 1,095 997 1,275 1,295 1,440 1,297 1,500 2,105 1,738 1,720 879 2,773 1,389 1,226 2,345 2,259 1,651 1,624 940 2,109 1,237 1,336 895 1,518 (110) 7/31/2013 1997 (156) 7/31/2013 1994 (252) 7/31/2013 1984 (190) 7/31/2013 1994 (251) 6/27/2013 1995 (244) 6/27/2013 1994 (116) 6/27/2013 1980 (198) 7/31/2013 1989 (81) 6/27/2013 1984 (73) 7/31/2013 1994 (174) 7/31/2013 1998 (177) 7/31/2013 1995 (131) 7/31/2013 1998 (83) 7/31/2013 1980 (170) 6/27/2013 1998 (192) 6/27/2013 1993 (185) 6/27/2013 1997 (239) 6/27/2013 2001 (96) 6/27/2013 1995 (379) 7/31/2013 1986 (190) 7/31/2013 1998 (179) 7/31/2013 1997 (417) 6/27/2013 1995 (265) 6/27/2013 1998 (211) 7/31/2013 1998 (172) 6/27/2013 1988 (69) 7/31/2013 1987 (173) 7/31/2013 1987 (124) 7/31/2013 1997 (183) 7/31/2013 1988 (106) 7/31/2013 1988 (166) 7/31/2013 1997 Property City State Burger King Maywood Burger King Springfield Burger King Gary Burger King Cut Off Burger King Gonzales IL IL IN LA LA Burger King Lake Charles LA Burger King Lake Charles LA Burger King Metairie Burger King Opelousas Burger King Raceland Burger King Amesbury Burger King Springfield Burger King Caribou Burger King Belding Burger King Detroit LA LA LA MA MA ME MI MI Burger King Grand Rapids MI Burger King Grand Rapids MI Burger King Grand Rapids MI Burger King Holland Burger King Hudsonville Burger King L'Anse Burger King Sparta Burger King Spring Lake Burger King Walker Burger King Warren MI MI MI MI MI MI MI Burger King Hastings MN Burger King Kansas City MO Burger King Brandon Burger King Clarksdale Burger King Cleveland Burger King Greenville Burger King Greenville MS MS MS MS MS Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 860 354 544 726 380 456 610 728 964 356 835 983 770 221 614 490 260 346 420 451 32 640 341 305 248 328 444 649 865 688 573 351 1,051 (357) — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 677 606 1,088 465 456 746 392 964 533 1,217 516 440 411 331 545 780 807 707 676 616 570 512 711 745 608 1,036 1,513 865 1,606 1,337 820 F-102 1,554 1,031 1,150 1,814 845 912 1,356 1,120 1,928 889 2,052 1,499 1,210 632 945 1,035 1,040 1,153 1,127 1,127 648 1,210 853 1,016 993 936 1,480 2,162 1,730 2,294 1,910 1,171 (71) 7/31/2013 2003 (133) 6/27/2013 1995 (119) 6/27/2013 1987 (199) 7/31/2013 1990 (85) 7/31/2013 1990 (83) 7/31/2013 1980 (136) 7/31/2013 1990 (72) 7/31/2013 1990 (176) 7/31/2013 1978 (97) 7/31/2013 2000 (239) 6/27/2013 1977 (101) 6/27/2013 1974 (84) 6/27/2013 1995 (75) 7/31/2013 1994 (60) 7/31/2013 1988 (104) 6/27/2013 1995 (149) 6/27/2013 1995 (147) 7/31/2013 1985 (135) 6/27/2013 1995 (123) 7/31/2013 1988 (112) 7/31/2013 1999 (109) 6/27/2013 1995 (93) 7/31/2013 1994 (130) 7/31/2013 1973 (136) 7/31/2013 1987 (111) 7/31/2013 1990 (189) 7/31/2013 1984 (297) 6/27/2013 1981 (158) 7/31/2013 1988 (293) 7/31/2013 1985 (244) 7/31/2013 2004 (150) 7/31/2013 1993 Property City State Burger King Greenwood Burger King Grenada MS MS Burger King Philadelphia MS Burger King Yazoo City MS Burger King Asheville Burger King Chadbourn Burger King Claremont Burger King Clinton Burger King Dunn Burger King Durham Burger King Wilmington Burger King Blair Burger King Wahoo Burger King Dover Burger King Nashua Burger King Edison Burger King Elko Burger King Albany NC NC NC NC NC NC NC NE NE NH NH NJ NV NY Burger King Central Square NY Burger King Cohoes Burger King East Greenbush Burger King Hamburg Burger King Irondequoit NY NY NY NY Burger King Montgomery NY Burger King Schenectady NY Burger King Syracuse Burger King Cincinnati Burger King Dayton Burger King Mansfield Burger King New Philadelphia Burger King Willoughby Burger King Ardmore NY OH OH OH OH OH OK Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 692 536 402 489 728 353 646 494 328 170 573 272 196 1,159 655 480 260 330 500 270 404 403 988 480 380 606 353 569 191 419 410 270 1,038 805 939 909 595 797 646 801 268 352 870 1,087 1,109 952 655 1,075 1,001 850 1,189 563 269 383 659 1,042 936 606 824 466 766 779 1,005 1,023 F-103 — — — — — — — — (118) — — — — — — — — — — — (159) — — — — — — — — — — — 1,730 1,341 1,341 1,398 1,323 1,150 1,292 1,295 478 522 1,443 1,359 1,305 2,111 1,310 1,555 1,261 1,180 1,689 833 514 786 1,647 1,522 1,316 1,212 1,177 1,035 957 1,198 1,415 1,293 (189) 7/31/2013 1988 (147) 7/31/2013 1989 (171) 7/31/2013 1993 (166) 7/31/2013 1993 (109) 7/31/2013 1982 (156) 6/27/2013 1999 (127) 6/27/2013 2000 (157) 6/27/2013 1999 (18) 7/31/2013 1989 (67) 6/27/2013 1995 (171) 6/27/2013 1999 (198) 7/31/2013 1987 (202) 7/31/2013 1990 (187) 6/27/2013 1970 (119) 7/31/2013 2008 (206) 6/27/2013 1995 (192) 6/27/2013 1995 (163) 6/27/2013 1995 (228) 6/27/2013 1995 (108) 6/27/2013 1995 (9) 6/27/2013 1980 (75) 6/27/2013 1974 (120) 7/31/2013 1980 (200) 6/27/2013 1995 (179) 6/27/2013 1995 (111) 7/31/2013 1986 (150) 7/31/2013 1969 (85) 7/31/2013 1990 (140) 7/31/2013 1985 (142) 7/31/2013 1986 (193) 6/27/2013 1995 (196) 6/27/2013 1995 Property City State Burger King Roseburg OR Burger King Harrisburg Burger King Old Forge Burger King Gaffney Burger King Greenville PA PA SC SC Burger King North Augusta SC Burger King North Augusta SC Burger King Chattanooga Burger King Gallatin Burger King Austin Burger King Laredo Burger King Texas City TN TN TX TX TX Burger King Spanaway WA Burger King Germantown WI Burger King Marshfield Burger King Rhinelander Burger King Weston Burger King Bluefield Cactus Wellhead Williston Cactus Wellhead Dubois Cactus Wellhead Center Cactus Wellhead Pleasanton Cadbury Holdings Whippany California Pizza Kitchen Paradise Valley California Pizza Kitchen California Pizza Kitchen California Pizza Kitchen California Pizza Kitchen Alpharetta Atlanta Grapevine Captain D's Statesboro Captain D's Florence Captain D's Southaven Captain D's Memphis WI WI WI WV ND PA TX TX NJ AZ GA GA TX GA KY MS TN Schaumburg IL Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 350 619 390 370 420 256 450 740 199 666 684 421 509 644 232 260 329 210 72 129 115 144 2,767 2,285 1,279 2,307 1,180 1,544 350 248 270 230 886 412 905 880 571 1,451 1,050 1,591 463 999 1,026 782 1,628 1,300 885 606 718 1,163 3,735 2,542 1,886 2,908 38,018 1,480 3,249 1,857 3,179 2,250 401 325 564 338 F-104 — — — — — — — — — (517) — — — — — — — — — — — — — — — — — — — — — — 1,236 1,031 1,295 1,250 991 1,707 1,500 2,331 662 1,148 1,710 1,203 2,137 1,944 1,117 866 1,047 1,373 3,807 2,671 2,001 3,052 (170) 6/27/2013 1995 (75) 7/31/2013 1985 (173) 6/27/2013 1995 (169) 6/27/2013 1995 (109) 6/27/2013 1995 (265) 7/31/2013 1985 (192) 7/31/2013 1985 (305) 6/27/2013 1995 (85) 7/31/2013 1984 (61) 6/27/2013 1998 (187) 7/31/2013 2002 (143) 7/31/2013 1984 (320) 6/27/2013 1997 (255) 6/27/2013 1986 (174) 6/27/2013 1986 (111) 7/31/2013 1986 (141) 6/27/2013 1987 (223) 6/27/2013 1995 (393) 7/24/2014 2011 (287) 6/12/2014 2012 (213) 6/12/2014 2011 (331) 6/12/2014 2011 40,785 (5,706) 11/5/2013 2004 3,765 4,528 4,164 4,359 3,794 751 573 834 568 (283) 2/7/2014 1994 (558) 2/7/2014 1994 (346) 2/7/2014 1993 (547) 2/7/2014 1995 (395) 2/7/2014 1994 (77) 6/27/2013 1995 (64) 6/27/2013 1981 (108) 6/27/2013 1995 (65) 6/27/2013 1995 Property City State Captain D's Duncanville Cargill Blair Carlos O’Kelley’s Mexican Café Mason City Carl's Jr. Purcell CarMax Henderson CarMax Austin Carrabba's Scottsdale Carrabba's Louisville Carrabba's Tampa Carrabba's Duluth Carrabba's Bowie Carrabba's Brooklyn Carrabba's Washington Twnshp Carrabba's Columbia TX NE IA OK NV TX AZ CO FL GA MD OH OH SC Carrabba's Johnson City TN Cashland Celina OH Castle Dental Murfreesboro TN Charleston's Carmel Checkers Huntsville Checkers Hollywood Checkers Jacksonville Checkers Lauderhill Checkers Miami Checkers Orlando Checkers Plantation Checkers Tampa IN AL FL FL FL FL FL FL FL Checkers Fayetteville GA Chedder's Casual Cafe Chedder's Casual Cafe Chedder's Casual Cafe Brandon Bolingbrook Lubbock Chevy's Miami FL IL TX FL Chevy's Greenbelt MD Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — 2,470 — — — 295 627 290 77 246 4,989 1,255 513 8,542 10,396 9,900 5,461 16,940 — — (192) — — — — — — — — — — — — — — — — — — — — — — — — 1,847 1,400 2,085 2,881 1,036 2,212 1,859 2,164 2,536 132 256 3,016 — 2,220 1,096 1,951 — — 1,461 — — 3,071 (2,204) — — — — 1,760 2,345 783 2,399 F-105 — — — — — — — — — — — — — — — — — — — — — — — — — — 1,350 1,083 1,650 836 1,429 1,187 906 1,159 771 108 256 140 689 160 731 280 621 1,033 220 736 681 860 1,344 1,053 1,455 530 541 5,616 1,353 590 (48) 6/27/2013 1982 (637) 2/7/2014 2009 (105) 6/27/2013 1995 (101) 6/27/2013 1980 18,938 (1,673) 2/7/2014 2002 22,401 (2,452) 2/7/2014 2004 3,197 2,483 3,735 3,717 2,465 3,399 2,765 3,323 3,307 240 512 3,156 689 2,380 1,827 2,231 621 1,033 1,681 736 681 1,727 3,104 3,398 2,238 2,929 (235) 2/7/2014 2000 (240) 2/7/2014 2000 (373) 2/7/2014 1994 (501) 2/7/2014 2004 (332) 2/7/2014 2003 (365) 2/7/2014 2002 (335) 2/7/2014 2001 (369) 2/7/2014 2000 (469) 2/7/2014 2003 (27) 7/31/2013 1995 (53) 7/31/2013 1996 (598) 6/27/2013 1995 — 6/27/2013 1995 (440) 6/27/2013 1995 (200) 7/31/2013 1993 (387) 6/27/2013 1995 — 7/31/2013 1993 — 7/31/2013 1995 (290) 6/27/2013 1995 — 6/27/2013 1995 — 6/27/2013 1995 (18) 6/27/2013 2003 (357) 6/27/2013 1997 (476) 6/27/2013 1997 (161) 7/31/2013 1995 (476) 6/27/2013 1995 Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction 590 1,693 — 2,283 (336) 6/27/2013 1995 1,695 12,360 (1,567) 12,488 (409) 3/28/2014 2006 Property City State Chevy's Lake Oswego OR Chicago Bridge & Iron Baton Rouge LA Children's Courtyard Childtime Childcare Childtime Childcare Childtime Childcare Childtime Childcare Chilis Chilis Chilis Chilis Chilis Chilis Chilis Chilis Grand Prairie TX Modesto Bedford CA OH Oklahoma City OK Oklahoma City OK Fayetteville AR Boise East Peoria Flanders Mt. Laurel Amarillo Riverdale ID IL NJ NJ TX UT Cheyenne WY China 1 Bay City China Buffet Alvin China Buffet Angleton China Town Buffet Bismarck Chipper's Grill Streator Church's Chicken Atmore Church's Chicken Bay Minette Church's Chicken Flomaton Church's Chicken Jackson Church's Chicken Orlando Church's Chicken Augusta Church's Chicken Augusta Church's Chicken Augusta Church's Chicken Augusta Church's Chicken Anderson Church's Chicken Charleston Church's Chicken Charleston TX TX TX ND IL AL AL AL AL FL GA GA GA GA SC SC SC — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 367 280 111 124 108 1,370 400 1,023 811 800 270 229 110 127 1,508 1,402 1,447 1,332 1,055 1,524 852 796 793 1,714 751 2,347 842 1,792 1,893 899 815 124 299 272 1,038 1,928 190 144 134 173 127 254 178 256 178 196 647 421 500 255 574 757 518 719 380 533 597 414 458 277 344 167 F-106 — — — — — — (3) — — — — — — (220) — — — — — — — — — — — — — — — — 1,422 1,804 963 920 901 3,084 1,148 3,370 2,244 3,124 2,704 1,699 1,085 133 409 399 (163) 2/7/2014 1999 (228) 2/7/2014 1988 (141) 2/7/2014 1979 (131) 2/7/2014 1985 (126) 2/7/2014 1986 (340) 6/27/2013 1995 (149) 6/27/2013 1995 (476) 6/27/2013 2003 (234) 2/7/2014 2003 (212) 2/7/2014 2004 (390) 7/31/2013 1984 (178) 6/27/2013 1995 (162) 6/27/2013 1995 (3) 7/31/2013 1985 (61) 6/27/2013 1982 (55) 6/27/2013 1982 2,966 (397) 7/31/2013 2000 445 718 891 691 846 634 711 853 592 654 924 765 667 (51) 6/27/2013 1995 (105) 7/31/2013 1976 (138) 7/31/2013 2003 (94) 7/31/2013 1981 (131) 7/31/2013 1982 (69) 7/31/2013 1984 (97) 7/31/2013 1981 (109) 7/31/2013 1976 (76) 7/31/2013 1978 (83) 7/31/2013 1984 (51) 7/31/2013 1981 (63) 7/31/2013 1973 (30) 7/31/2013 1979 Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Church's Chicken Columbia Church's Chicken Columbia Church's Chicken Greenville Church's Chicken Greenville Church's Chicken Greenville Church's Chicken Greenwood Church's Chicken Church's Chicken North Charleston North Charleston Church's Chicken Orangeburg Church's Chicken Spartanburg Church's Chicken Spartanburg Cigna Cigna Phoenix Plano Circle K Phoenix Circle K Martinez Circle K Martinez Circle K Thomson Circle K Akron Citizens Bank Colchester Citizens Bank Deep River SC SC SC SC SC SC SC SC SC SC SC AZ TX AZ GA GA GA OH CT CT Citizens Bank East Hampton CT Citizens Bank East Lyme Citizens Bank Hamden Citizens Bank Higganum Citizens Bank Montville CT CT CT CT Citizens Bank New London CT Citizens Bank Stonington Citizens Bank Stonington Citizens Bank Lewes Citizens Bank Smyrna Citizens Bank Wilmington Citizens Bank Wilmington CT CT DE DE DE DE — — — — — — — — — — — — — — — — — — — — 765 — — 613 — — — — — 654 431 366 437 231 280 254 325 188 302 407 407 411 350 437 428 342 472 487 349 302 407 271 274 525 6,194 16,215 10,036 42,676 1,377 813 329 340 1,254 1,049 1,812 935 1,032 475 971 2,342 534 1,079 937 916 344 348 293 637 675 185 453 312 258 581 171 413 94 190 104 102 183 250 299 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 1,036 (994) — — 464 299 F-107 874 659 622 726 812 537 604 814 678 685 875 (80) 7/31/2013 1978 (78) 7/31/2013 1977 (62) 7/31/2013 1970 (86) 7/31/2013 2009 (89) 7/31/2013 1984 (64) 7/31/2013 2002 (55) 7/31/2013 1976 (74) 7/31/2013 1977 (49) 7/31/2013 1985 (50) 7/31/2013 1972 (96) 7/31/2013 1978 22,409 (2,239) 2/7/2014 2012 52,712 (5,962) 2/7/2014 2009 1,721 1,161 622 977 1,929 1,234 2,265 1,247 1,290 1,056 1,142 2,755 628 1,269 1,041 1,018 225 714 598 (358) 5/4/2012 1986 (200) 8/28/2012 2003 (44) 9/26/2014 1993 (47) 9/26/2014 1990 (302) 9/27/2012 1996 (241) 9/28/2012 2012 (417) 9/28/2012 1851 (236) 4/26/2012 1984 (237) 9/28/2012 1972 (109) 9/28/2012 1995 (317) 8/1/2010 1995 (539) 9/28/2012 1984 (174) 8/1/2010 1995 (248) 9/28/2012 1984 (203) 12/14/2012 1982 (190) 2/22/2013 1968 — 8/1/2010 1995 (117) 4/26/2012 1950 (75) 4/26/2012 1967 Property City State Citizens Bank Dorchester Citizens Bank Ludlow Citizens Bank Malden Citizens Bank Malden Citizens Bank Medford Citizens Bank Milton MA MA MA MA MA MA Citizens Bank New Bedford MA Citizens Bank Randolph Citizens Bank Somerville MA MA Citizens Bank South Dennis MA Citizens Bank Springfield Citizens Bank Tewksbury Citizens Bank Wilbraham Citizens Bank Winthrop Citizens Bank Woburn Citizens Bank Clinton Township Citizens Bank Dearborn Citizens Bank Dearborn Citizens Bank Detroit Citizens Bank Detroit Citizens Bank Farmington MA MA MA MA MA MI MI MI MI MI MI Citizens Bank Grosse Pointe MI Citizens Bank Harper Woods MI Citizens Bank Highland Park MI Citizens Bank Lathrup Village Citizens Bank Livonia Citizens Bank Richmond Citizens Bank Southfield Citizens Bank St. Clair Shores Citizens Bank Troy Citizens Bank Utica Citizens Bank Warren MI MI MI MI MI MI MI MI Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction 485 — — 1,697 1,193 2,244 — 1,383 — — — 813 458 — — — — — — — — — — — — — — — — — — — 386 810 488 484 589 619 297 480 561 — 187 266 148 390 350 574 434 385 112 204 303 410 207 150 283 261 168 283 309 312 376 178 386 540 596 1,935 1,094 2,476 694 1,439 561 1,294 747 1,063 591 724 816 3,250 2,461 2,184 636 1,159 707 2,322 1,171 848 1,602 1,476 951 1,605 1,748 935 2,133 1,009 F-108 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 772 1,350 1,084 2,419 1,683 3,095 991 1,919 1,122 1,294 934 1,329 (97) 4/26/2012 1960 (124) 9/28/2012 1995 (137) 9/28/2012 1920 (445) 9/28/2012 1988 (252) 9/28/2012 1938 (536) 12/14/2012 1968 (160) 9/28/2012 1983 (331) 9/28/2012 1979 (129) 9/28/2012 1940 (280) 12/14/2012 1986 (145) 5/10/2013 1975 (268) 4/26/2012 1998 739 (149) 4/26/2012 1967 1,114 1,166 3,824 2,895 2,569 748 1,363 1,010 2,732 1,378 998 1,885 1,737 1,119 1,888 2,057 1,247 2,509 1,187 (166) 9/28/2012 1974 (177) 12/14/2012 1991 (1,068) 8/1/2010 1970 (757) 8/1/2010 1977 (671) 8/1/2010 1974 (210) 8/1/2010 1958 (383) 8/1/2010 1956 (153) 12/14/2012 1962 (751) 8/1/2010 1975 (387) 8/1/2010 1982 (280) 8/1/2010 1967 (524) 8/1/2010 1980 (488) 8/1/2010 1959 (314) 8/1/2010 1980 (527) 8/1/2010 1975 (577) 8/1/2010 1960 (203) 12/14/2012 1980 (689) 8/1/2010 1982 (330) 8/1/2010 1963 Property City State Citizens Bank Keene Citizens Bank Manchester Citizens Bank Manchester Citizens Bank Ossipee Citizens Bank Pelham Citizens Bank Pittsfield Citizens Bank Rollinsford Citizens Bank Salem Citizens Bank Haddon Heights Citizens Bank Marlton Citizens Bank Albany Citizens Bank Amherst Citizens Bank East Aurora Citizens Bank Greene Citizens Bank Johnstown Citizens Bank Port Jervis Citizens Bank Rochester NH NH NH NH NH NH NH NH NJ NJ NY NY NY NY NY NY NY Encumbrances at December 31, 2016 1,885 — — 269 280 — — — — 781 799 856 581 746 561 515 599 Citizens Bank Schenectady NY 1,006 Citizens Bank Vails Gate Citizens Bank Whitesboro Citizens Bank Alliance Citizens Bank Bedford Citizens Bank Boardman Citizens Bank Broadview Heights Citizens Bank Brunswick Citizens Bank Cleveland Citizens Bank Cleveland Citizens Bank Cleveland Citizens Bank Fairlawn Citizens Bank Lakewood Citizens Bank Louisville Citizens Bank Massillon NY NY OH OH OH OH OH OH OH OH OH OH OH OH 979 450 — 533 — — — — — — 1,885 — — — Initial Costs (1) Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction 132 640 — 176 113 160 78 328 316 444 232 238 162 216 163 143 166 292 284 130 204 175 280 201 186 239 210 182 511 196 191 287 2,511 782 1,568 264 340 908 444 1,312 948 825 1,315 1,348 919 1,227 923 811 943 1,655 1,610 739 1,156 699 1,589 1,140 1,057 1,357 1,190 1,031 2,045 1,111 1,080 1,624 F-109 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 2,643 1,422 1,568 440 453 1,068 522 1,640 1,264 1,269 1,547 1,586 1,081 1,443 1,086 954 1,109 1,947 1,894 869 1,360 874 1,869 1,341 1,243 1,596 1,400 1,213 2,556 1,307 1,271 1,911 (544) 12/14/2012 1900 (180) 9/28/2012 1941 (340) 12/14/2012 1995 (67) 4/26/2012 1980 (86) 4/26/2012 1983 (297) 8/1/2010 1976 (145) 8/1/2010 1977 (284) 12/14/2012 1980 (176) 7/23/2013 1965 (208) 4/26/2012 1988 (404) 8/1/2010 1960 (421) 8/1/2010 1965 (287) 8/1/2010 1996 (377) 8/1/2010 1981 (284) 8/1/2010 1973 (258) 8/1/2010 1995 (295) 8/1/2010 1962 (509) 8/1/2010 1974 (495) 8/1/2010 1995 (227) 8/1/2010 1995 (384) 8/1/2010 1972 (176) 4/26/2012 2005 (528) 8/1/2010 1984 (362) 8/1/2010 1982 (351) 8/1/2010 2004 (451) 8/1/2010 1973 (395) 8/1/2010 1950 (342) 8/1/2010 1930 (443) 12/14/2012 1979 (342) 8/1/2010 1985 (358) 8/1/2010 1960 (539) 8/1/2010 1995 Property City State Citizens Bank Massillon Citizens Bank Mentor Citizens Bank Northfield Citizens Bank Parma Citizens Bank Parma OH OH OH OH OH Citizens Bank Parma Heights OH Citizens Bank Rocky River OH Citizens Bank South Russell OH Citizens Bank Wadsworth Citizens Bank Willoughby Citizens Bank Aliquippa Citizens Bank Allison Park Citizens Bank Altoona Citizens Bank Ambridge Citizens Bank Ashley Citizens Bank Beaver Falls Citizens Bank Butler Citizens Bank Camp Hill Citizens Bank Carlisle Citizens Bank Carnegie Citizens Bank Dallas Citizens Bank Dillsburg Citizens Bank Drexel Hill Citizens Bank Erie Citizens Bank Ford City Citizens Bank Glenside Citizens Bank Greensburg Citizens Bank Grove City Citizens Bank Grove City Citizens Bank Harrisburg Citizens Bank Havertown Citizens Bank Highspire OH OH PA PA PA PA PA PA PA PA PA PA PA PA PA PA PA PA PA PA PA PA PA PA Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — 608 — — — — — — — — — 740 — — — — 468 — — — — — — 1,257 — 323 506 560 — — 212 178 317 248 475 426 283 106 158 395 138 314 153 215 225 138 286 430 234 73 213 232 266 168 89 343 45 292 41 512 219 216 1,202 1,011 1,797 744 581 638 1,602 957 893 2,239 782 733 459 — — — — — — — — — — — — — 1,217 (1,282) — — — — — — — — — — — — — — — — — — 675 553 1,144 645 546 1,396 1,205 926 1,064 671 802 1,370 861 239 782 419 875 649 F-110 1,414 1,189 2,114 992 1,056 1,064 1,885 1,063 1,051 2,634 920 1,047 612 150 900 691 1,430 1,075 780 1,469 1,418 1,158 1,330 839 891 (399) 8/1/2010 1958 (330) 8/1/2010 1976 (587) 8/1/2010 1969 (188) 4/26/2012 1972 (126) 12/14/2012 1971 (138) 12/14/2012 1957 (492) 8/1/2010 1972 (207) 12/14/2012 1981 (296) 8/1/2010 1960 (732) 8/1/2010 1920 (169) 12/14/2012 1953 (169) 9/28/2012 1972 (99) 12/14/2012 1971 — 8/1/2010 1925 (146) 12/14/2012 1928 (127) 9/28/2012 1995 (248) 12/14/2012 1966 (140) 12/14/2012 1971 (138) 4/26/2012 1960 (302) 12/14/2012 1920 (277) 9/28/2012 1949 (201) 12/14/2012 1935 (230) 12/14/2012 1950 (145) 12/14/2012 1954 (174) 12/14/2012 1975 1,713 (266) 5/22/2013 1958 906 531 823 931 1,094 865 (187) 12/14/2012 1957 (60) 4/26/2012 1977 (197) 4/26/2012 1920 (106) 4/26/2012 1967 (201) 9/28/2012 2003 (141) 12/14/2012 1974 Property City State Citizens Bank Homestead Citizens Bank Kingston Citizens Bank Kittanning Citizens Bank Kutztown Citizens Bank Lancaster Citizens Bank Lancaster Citizens Bank Latrobe Citizens Bank Lititz PA PA PA PA PA PA PA PA Citizens Bank Lower Burrell PA Citizens Bank Matamoras Citizens Bank Mechanicsbur g Citizens Bank Mercer Citizens Bank Milford Citizens Bank Monesson Citizens Bank Mount Lebanon PA PA PA PA PA PA Citizens Bank Mountain Top PA Citizens Bank Munhall Citizens Bank Narberth Citizens Bank New Stanton Citizens Bank Oakmont Citizens Bank Oil City Citizens Bank Philadelphia Citizens Bank Philadelphia Citizens Bank Philadelphia Citizens Bank Pitcairn Citizens Bank Pittsburgh Citizens Bank Pittsburgh Citizens Bank Pittsburgh Citizens Bank Pittsburgh Citizens Bank Pittsburgh Citizens Bank Pittsburgh Citizens Bank Pittsburgh PA PA PA PA PA PA PA PA PA PA PA PA PA PA PA PA Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — 490 555 — — 458 — — 1,620 — — 683 1,577 — 232 1,448 581 — — 565 — — — — — — — — 2,262 1,244 202 404 56 81 368 383 148 37 180 509 288 105 513 198 215 111 191 420 330 199 110 184 127 266 46 215 256 185 389 146 470 516 807 943 1,060 725 552 468 591 708 722 946 2,590 314 769 — — — — — — — — — — — — — 1,123 (1,222) 1,939 631 191 2,381 612 1,127 623 735 722 1,065 — — — — — — — — (543) — 867 (567) — — — — — — — 1,219 767 1,051 1,168 2,770 2,661 1,204 F-111 1,009 1,347 1,116 806 920 851 739 745 902 1,455 2,878 419 1,282 99 (186) 9/28/2012 1960 (204) 12/14/2012 1977 (230) 12/14/2012 1889 (180) 5/11/2012 1974 (139) 4/26/2012 1965 (108) 9/28/2012 1967 (128) 12/14/2012 1969 (179) 4/26/2012 1923 (156) 12/14/2012 1980 (205) 12/14/2012 1920 (596) 9/28/2012 1900 (68) 12/14/2012 1964 (167) 12/14/2012 1981 — 8/1/2010 1930 2,154 (446) 9/28/2012 1960 742 382 2,801 942 1,326 733 919 306 1,331 346 1,434 1,023 1,236 1,557 2,916 3,131 1,720 (137) 12/14/2012 1980 (48) 4/26/2012 1973 (732) 8/1/2010 1935 (154) 4/26/2012 1975 (244) 12/14/2012 1967 (135) 12/14/2012 1965 (186) 4/26/2012 1904 (8) 12/14/2012 1920 (231) 12/14/2012 1971 (10) 12/14/2012 1985 (280) 9/28/2012 1970 (176) 9/28/2012 1970 (228) 12/14/2012 1960 (253) 12/14/2012 1940 (600) 12/14/2012 1900 (576) 12/14/2012 1979 (261) 12/14/2012 1970 Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Citizens Bank Pittsburgh Citizens Bank Pittsburgh Citizens Bank Pittsburgh Citizens Bank Pittsburgh Citizens Bank Reading Citizens Bank Reading PA PA PA PA PA PA Citizens Bank Shippensburg PA Citizens Bank Slovan Citizens Bank State College Citizens Bank Temple Citizens Bank Turtle Creek Citizens Bank Tyrone Citizens Bank Upper Darby Citizens Bank Verona Citizens Bank Warrendale Citizens Bank West Grove PA PA PA PA PA PA PA PA PA Citizens Bank West Hazleton PA Citizens Bank Wexford Citizens Bank York Citizens Bank Coventry Citizens Bank Cranston Citizens Bank East Greenwich Citizens Bank Johnston PA PA RI RI RI RI Citizens Bank N. Providence RI 1,445 Citizens Bank N. Providence RI Citizens Bank Providence Citizens Bank Rumford Citizens Bank Wakefield Citizens Bank Warren Citizens Bank Warwick Citizens Bank Middlebury Citizens Bank Poultney RI RI RI RI RI VT VT — — — — — — — — — 918 — — — — 345 205 452 — — — — 549 — 544 — — 581 — — — — 206 196 255 268 269 267 143 217 256 268 308 146 411 264 611 181 279 180 337 559 411 227 343 200 223 300 352 517 328 1,852 1,110 1,019 2,413 1,524 802 429 117 475 626 923 583 617 616 916 725 2,509 719 626 559 1,234 680 1,030 1,800 892 899 654 959 609 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 2,058 1,306 1,274 2,681 1,793 1,069 572 334 731 894 1,231 729 1,028 880 1,527 906 2,788 899 963 1,118 1,645 907 1,373 2,000 1,115 1,199 1,006 1,476 937 (401) 12/14/2012 1923 (240) 12/14/2012 1980 (221) 12/14/2012 1970 (523) 12/14/2012 1970 (303) 4/12/2013 1904 (174) 12/14/2012 1970 (108) 4/26/2012 1985 (29) 4/26/2012 1975 (120) 4/26/2012 1966 (144) 9/28/2012 1936 (212) 9/28/2012 1970 (126) 12/14/2012 1967 (134) 12/14/2012 1966 (155) 4/26/2012 1972 (198) 12/14/2012 1981 (183) 4/26/2012 1880 (577) 9/28/2012 1900 (156) 12/14/2012 1975 (158) 4/26/2012 1955 (129) 9/28/2012 1968 (267) 12/14/2012 1967 (147) 12/14/2012 1959 (237) 9/28/2012 1972 (390) 12/31/2012 1971 (193) 12/14/2012 1971 (195) 12/14/2012 1960 (142) 12/14/2012 1977 (221) 9/28/2012 1976 (140) 9/28/2012 1980 1,870 8,828 363 149 544 847 F-112 697 — — 11,395 (1,547) 9/24/2013 1995 907 996 (118) 12/14/2012 1969 (269) 8/1/2010 1860 Property City State Citizens Bank St. Albans Citizens Bank Coborn's Liquor Store Coborn's Liquor Store White River Jnct Stanley Tioga Comcast Englewood Community Bank Lake Mary Community Bank Whitehall CompUSA Arlington ConAgra Foods Omaha ConAgra Foods Milton Conn's Conn's Cooper Tire & Rubber Austin Hurst Franklin Cost Plus La Quinta County of Yolo, CA Woodland Cracker Barrel Braselton Cracker Barrel Bremen Cracker Barrel Columbus Cracker Barrel Greensboro Cracker Barrel Mebane VT VT ND ND CO FL NY TX NE PA TX TX IN CA CA GA GA GA NC NC Cracker Barrel Rocky Mount NC Cracker Barrel Fort Mill Cracker Barrel Piedmont Cracker Barrel Abilene Cracker Barrel San Antonio Cracker Barrel Sherman Cracker Barrel Bristol Cracker Barrel Emporia Cracker Barrel Waynesboro Cracker Barrel Woodstock Crest Production Services Crozer-Keystone Health Pleasanton Ridley Park SC SC TX TX TX VA VA VA VA TX PA Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — 141 183 1,163 1,065 1,490 1,230 365 106 798 1,039 5,037 4,581 5,060 1,504 600 — — — — — 4 — 1,770 2,437 1,467 127 — 6,451 30,697 16,245 5,656 27,242 — — 740 497 2,958 1,990 15,802 4,438 33,994 — 1,211 4,786 10,332 2,640 13,681 2,935 1,294 2,677 1,012 — — 912 1,632 2,514 1,106 — — — — — — — 1,274 1,301 1,630 1,374 1,725 557 1,241 2,435 972 — 1,536 2,261 — 1,147 928 519 — 2,403 2,361 3,153 2,495 2,054 2,334 2,721 2,927 2,933 3,005 3,744 1,703 2,267 1,489 2,164 7,949 6,114 F-113 — — — — — — — — — — — — — — — — — — — — — — — — 939 1,222 6,200 5,646 6,550 2,738 706 4,031 (254) 8/1/2010 1989 (330) 8/1/2010 1975 (740) 2/21/2014 2014 (515) 6/26/2014 2014 (841) 11/5/2013 1999 (259) 10/1/2013 1990 (184) 8/1/2011 1995 (289) 2/7/2014 1992 37,148 (2,641) 3/28/2014 1989 32,898 (3,667) 2/7/2014 1991 3,698 2,487 (445) 5/19/2014 2002 (310) 5/19/2014 1999 38,432 (6,480) 11/5/2013 2009 5,997 (740) 2/7/2014 2007 16,321 (2,030) 11/5/2013 2001 3,697 3,373 4,065 4,127 3,160 3,608 4,022 4,557 4,307 4,730 4,301 2,944 3,239 3,025 3,092 8,468 6,114 (698) 11/13/2012 2005 (686) 11/13/2012 2006 (529) 2/7/2014 2003 (434) 2/7/2014 2005 (596) 11/13/2012 2004 (417) 2/7/2014 2006 (478) 2/7/2014 2006 (513) 2/7/2014 2005 (516) 2/7/2014 2005 (495) 2/7/2014 2005 (628) 2/7/2014 2007 (363) 2/7/2014 2006 (659) 11/13/2012 2004 (385) 2/7/2014 2004 (629) 11/13/2012 2005 (1,618) 6/12/2014 2013 (1,041) 11/5/2013 1976 Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State AL Hoover — 1,239 Meridianville AL 1,954 1,045 CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS Phoenix Phoenix City Of Industry Fresno Palmdale Sacramento Norwich Dover Auburndale Boca Raton Ft. Myers Gulf Breeze Jacksonville Lakeland Naples New Port Richey St. Augustine St. Cloud Alpharetta Ringgold Stockbridge Vidalia Northbrook Edinburgh Evansville Franklin Mishawaka Tipton Lawrence Mandeville AZ AZ CA CA CA CA CT DE FL FL FL FL FL FL FL FL FL FL GA GA GA GA IL IN IN IN IN IN KS LA 2,890 3,057 4,533 2,704 3,202 4,409 4,630 4,016 5,995 — 2,038 3,560 3,502 — 4,323 2,347 4,164 2,966 3,674 1,875 858 2,939 1,283 1,105 5,025 1,511 3,015 901 2,500 1,224 5,045 1,890 5,226 2,493 4,724 2,163 5,454 1,998 2,046 4,081 1,565 1,418 2,625 — 3,025 2,335 1,079 545 3,715 2,240 2,258 2,675 587 — 1,640 1,149 — 1,264 2,626 1,534 — 572 1,948 1,346 — — 855 368 25,155 3,471 41,765 — 1,850 — 2,258 — 2,908 420 227 310 409 311 837 4,020 2,385 1,530 3,060 2,787 4,532 1,726 4,392 2,915 F-114 — — 15 15 — 16 17 19 15 — — — — — — 16 — — — — (12) — — — 69 — — (5) — — — 16 4,129 4,102 6,059 3,620 4,426 6,315 7,140 6,198 8,008 4,081 3,456 3,560 5,837 545 6,563 2,950 4,164 4,115 4,938 3,409 1,418 4,285 2,138 1,473 (629) 5/31/2013 2003 (535) 2/7/2014 2008 (874) 10/1/2013 2012 (522) 10/1/2013 2012 (483) 2/7/2014 2009 (850) 10/1/2013 2012 (893) 10/1/2013 2012 (775) 10/1/2013 2012 (1,155) 10/1/2013 2011 — 2/7/2014 2010 (329) 2/7/2014 1999 (631) 2/7/2014 2009 (622) 2/7/2014 2009 — 2/7/2014 2009 (706) 2/7/2014 2009 (453) 10/1/2013 2012 (678) 2/7/2014 2009 (473) 2/7/2014 2004 (597) 2/7/2014 2008 (417) 4/12/2013 2002 (220) 9/28/2012 1994 (515) 2/7/2014 2007 (298) 2/28/2013 1998 (285) 9/28/2012 2000 45,305 (5,539) 2/7/2014 1980 1,950 3,287 3,092 4,941 2,037 5,229 5,316 (269) 2/24/2014 1998 (490) 2/7/2014 2000 (801) 3/29/2012 1999 (735) 2/7/2014 2007 (303) 2/24/2014 1998 (711) 2/7/2014 2009 (562) 10/1/2013 2012 Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS Metairie LA 4,121 1,895 New Orleans LA 3,719 2,439 Slidell Hingham Malden Detroit LA MA MA MI Harper Woods MI Minneapolis MN Independence MO 4,355 1,142 5,695 1,873 5,360 1,757 — — — — 270 499 266 780 St. Joseph MO 3,015 1,022 Southaven Southaven Beaufort Charlotte Eden Kernersville Weaverville Cherry Hill Edison MS MS NC NC NC NC NC NJ NJ 3,030 1,849 4,270 1,281 2,781 378 — — — 1,185 836 960 3,098 1,998 — — 2,255 3,318 Lawrenceville NJ 5,170 2,674 Albuquerque NM 3,719 975 Albuquerque NM 3,920 1,029 Las Cruces NM 4,925 1,295 North Las Vegas Sparks Henrietta Mineola Warren NV NV NY NY OH Oklahoma City OK The Village Tulsa Freeland OK OK PA 3,268 1,374 — — 2,280 — — 3,425 2,446 982 486 965 — 560 569 520 950 122 3,519 2,439 4,568 5,619 5,271 2,427 2,829 4,693 3,121 3,067 3,217 4,100 3,404 2,176 1,450 1,313 4,307 — — 6,412 3,899 4,118 5,178 3,207 5,894 1,180 5,120 1,622 1,609 4,730 2,216 1,096 F-115 16 16 16 15 14 (5) — — — 16 — — 16 — — — — — — — 16 17 17 — — (2) — — — — 16 — 5,430 4,894 5,726 7,507 7,042 2,692 3,328 4,959 3,901 4,105 5,066 5,381 3,798 3,361 2,286 2,273 6,305 2,255 3,318 9,086 4,890 5,164 6,490 4,581 6,380 2,143 5,120 2,182 2,178 5,250 3,182 1,218 (679) 10/1/2013 2012 (471) 10/1/2013 2012 (881) 10/1/2013 2012 (1,083) 10/1/2013 2012 (1,016) 10/1/2013 2012 (564) 2/28/2013 1999 (658) 2/28/2013 1999 (676) 2/7/2014 2009 (495) 5/19/2014 2000 (592) 10/1/2013 2012 (616) 2/7/2014 2009 (769) 2/7/2014 2009 (656) 10/1/2013 2011 (335) 2/7/2014 2008 (235) 2/7/2014 1998 (212) 2/7/2014 1998 (748) 2/7/2014 2009 — — 2/7/2014 2011 2/7/2014 2008 (1,022) 2/7/2014 2009 (752) 10/1/2013 2011 (794) 10/1/2013 2011 (998) 10/1/2013 2012 (842) 8/22/2012 2004 (963) 2/7/2014 2009 (292) 11/8/2012 1997 (798) 2/7/2014 2008 (261) 2/7/2014 2008 (246) 2/7/2014 1996 (761) 2/7/2014 2009 (428) 10/1/2013 2010 (288) 8/8/2012 2004 Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS CVS Mechanicsbur g New Castle PA PA Shippensburg PA Titusville Towanda Anderson Cayce Columbia Greenville Greenville Piedmont Jackson Knoxville Nashville Converse Dumas Duncanville Edinburg Elsa Ft . Worth Gainesville San Antonio San Antonio San Antonio San Juan Hardy Lynchburg Madison Heights Norfolk Portsmouth Roanoke PA PA SC SC SC SC SC SC TN TN TN TX TX TX TX TX TX TX TX TX TX TX VA VA VA VA VA VA Virginia Beach VA 3,582 1,155 1,562 1,859 — 878 — — 2,278 — — — 412 351 670 — 623 1,750 — 169 1,108 836 3,082 1,209 2,613 1,190 — 203 3,538 1,390 2,312 — — 846 670 1,179 2,814 915 4,147 2,453 2,215 341 3,806 1,996 4,422 2,034 2,660 2,345 2,035 1,748 868 610 686 914 1,592 1,015 2,399 697 3,367 1,230 2,269 3,114 825 683 3,465 2,337 1,988 683 877 1,389 2,701 2,811 1,520 1,816 1,206 2,822 2,210 1,148 3,243 2,537 2,681 3,060 2,744 3,679 3,334 2,993 3,778 2,605 2,441 2,059 2,987 2,589 2,789 3,690 2,474 3,868 F-116 — — — — — — — — — — — 16 16 (4) 15 16 — — 16 15 — 15 15 16 16 — 4 — 16 16 14 14 4,620 2,749 2,339 1,353 877 2,012 4,451 2,811 1,689 2,924 2,042 4,047 3,416 1,347 4,648 3,399 3,351 4,239 3,675 6,147 3,675 5,004 5,827 3,489 3,067 2,745 3,905 3,604 3,502 4,936 3,313 4,565 (858) 11/29/2012 2008 (590) 10/31/2012 1999 (462) 2/8/2013 2002 (230) 2/7/2014 1998 (195) 4/24/2013 2003 (216) 2/7/2014 1998 (483) 2/7/2014 2009 (583) 7/2/2013 2006 (353) 2/28/2013 1997 (305) 2/7/2014 1998 (185) 2/7/2014 1998 (544) 10/1/2013 2012 (427) 10/1/2013 2011 (295) 9/28/2012 1996 (626) 10/1/2013 2011 (490) 10/1/2013 2011 (429) 5/19/2014 2000 (517) 2/7/2014 2008 (529) 10/1/2013 2011 (709) 10/1/2013 2011 (520) 2/7/2014 2003 (577) 10/1/2013 2011 (728) 10/1/2013 2011 (503) 10/1/2013 2012 (471) 10/1/2013 2012 (448) 5/16/2013 2005 (486) 2/7/2014 1999 (416) 2/7/2014 1997 (538) 10/1/2013 2011 (712) 10/1/2013 2012 (477) 10/1/2013 2011 (746) 10/1/2013 2012 Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Williamsburg VA 4,115 CVS Dahl's Dahl's Dahl's Dahl's Des Moines Des Moines Des Moines Johnston Dairy Queen Mauldin Dairy Queen Alto Dairy Queen Pineland Dairy Queen Silsbee Dairy Queen Woodville DaVita Dialysis Osceola DaVita Dialysis Casselberry DaVita Dialysis Palatka DaVita Dialysis Sanford DaVita Dialysis Augusta IA IA IA IA SC TX TX TX TX AR FL FL FL GA DaVita Dialysis Douglasville GA DaVita Dialysis Ft. Wayne DaVita Dialysis Hiawatha IN KS DaVita Dialysis New Orleans LA DaVita Dialysis Allen Park MI DaVita Dialysis Grand Rapids MI DaVita Dialysis Clinton DaVita Dialysis St. Pauls MO NC DaVita Dialysis Lawrenceville NJ DaVita Dialysis Akron DaVita Dialysis Cincinnati OH OH DaVita Dialysis Georgetown OH DaVita Dialysis Willow Grove PA DaVita Dialysis Hartsville DaVita Dialysis Beeville SC TX 907 628 1,163 2,871 3,202 133 50 40 60 98 137 392 207 530 118 119 394 69 511 209 215 128 138 633 312 219 125 311 126 99 5,137 3,947 1,649 11,761 6,644 — 110 120 100 65 1,232 2,320 1,173 2,793 1,818 1,858 2,963 1,302 2,237 1,885 1,794 896 1,246 2,757 1,994 878 706 3,886 1,136 1,879 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 16 — — — — — — — — — — — — — — — — — — — — — — — — (3) (1) 14 — — — 6,060 4,575 2,812 (990) 10/1/2013 2011 (636) 2/7/2014 1947 (268) 2/7/2014 1959 14,632 (1,847) 2/7/2014 2011 9,846 (1,071) 2/7/2014 2000 133 160 160 160 163 1,369 2,712 1,380 3,323 1,936 1,977 3,357 1,371 2,748 2,094 2,009 1,024 1,384 3,390 2,306 1,094 830 4,211 1,262 1,978 — 6/27/2013 1995 (21) 6/27/2013 1995 (23) 6/27/2013 1995 (19) 6/27/2013 1995 (12) 7/31/2013 1980 (220) 3/28/2013 2009 (317) 2/7/2014 2007 (195) 6/5/2013 2013 (355) 2/7/2014 2005 (204) 2/7/2014 2000 (209) 2/7/2014 2001 (349) 2/7/2014 2008 (222) 5/30/2013 2012 (210) 9/30/2014 2010 (412) 12/31/2012 1955 (232) 2/7/2014 1997 (124) 2/26/2014 2003 (198) 8/2/2013 2006 (347) 2/7/2014 2009 (252) 3/31/2014 1932 (156) 3/28/2013 2008 (125) 3/28/2013 2009 (457) 2/7/2014 1989 (194) 5/30/2013 2013 (411) 12/31/2012 1979 24,286 (5,747) 11/21/2012 2000 DaVita Dialysis Federal Way WA 17,751 1,929 22,357 Deals R Us Virginia Beach VA — 934 — (405) 529 (1) 2/21/2014 1997 F-117 Property City State Del Monte Dell Perot Systems Denny's Denny's Lathrop Lincoln Mesa Peoria Denny's Phoenix Denny's Scottsdale Denny's Denny's Tempe Tempe Denny's Idaho Falls Denny's Merriam Denny's Topeka CA NE AZ AZ AZ AZ AZ AZ ID KS KS Denny's Bloomington MN Denny's Branson MO Denny's Kansas City MO Denny's N. Kansas City MO Denny's Denny's Sedalia Black Mountain Denny's Mooresville Denny's Henrietta Denny's Watertown Denny's Fremont Denny's Marion Denny's Ontario Denny's Greenville Denny's Pasadena Dick's Sporting Goods Dick's Sporting Goods Dick's Sporting Goods Dick's Sporting Goods Fort Gratiot Moore Charleston Jackson DJO, LLC Vista Dollar General Andalusia Dollar General Birmingham MO NC NC NY NY OH OH OR SC TX MI OK SC TN CA AL AL Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 41,318 2,812 1,089 310 825 736 378 1,567 196 390 630 1,184 620 750 630 500 210 250 361 330 320 115 240 570 500 722 1,243 3,733 1,346 3,732 317 156 25,566 891 457 1,237 491 245 844 432 1,150 446 — 2,209 686 937 783 505 841 241 1,107 975 390 1,067 554 1,316 7,743 10,426 5,025 6,106 16,868 914 882 F-118 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 41,318 (7,876) 11/5/2013 1993 28,378 (3,442) 2/7/2014 2009 1,980 767 2,062 1,227 623 2,411 628 1,540 1,076 1,184 2,829 1,436 1,567 1,283 715 1,091 602 1,437 1,295 505 1,307 1,124 1,816 8,465 (183) 7/31/2013 1994 (93) 6/27/2013 1995 (255) 7/31/2013 2005 (101) 7/31/2013 1980 (46) 6/27/2013 1980 (174) 7/31/2013 1995 (75) 6/27/2013 1995 (228) 6/27/2013 1995 (89) 6/27/2013 1995 — 7/31/2013 1995 (438) 6/27/2013 1995 (136) 6/27/2013 1995 (186) 6/27/2013 1995 (155) 6/27/2013 1995 (100) 6/27/2013 1995 (167) 6/27/2013 1995 (50) 7/31/2013 1970 (220) 6/27/2013 1995 (193) 6/27/2013 1995 (79) 6/27/2013 1989 (212) 6/27/2013 1995 (110) 6/27/2013 1995 (261) 6/27/2013 1995 (1,246) 2/7/2014 2010 11,669 (1,650) 2/7/2014 2012 8,758 7,452 (837) 2/7/2014 2005 (975) 2/7/2014 2007 20,600 (5,642) 8/15/2014 2006 1,231 1,038 (61) 7/24/2014 2014 (225) 6/6/2012 2012 Property City State Dollar General Bremen Dollar General Butler AL AL Dollar General Childersburg AL Dollar General Chunchula Dollar General Cullman Dollar General Cullman Dollar General Frisco City Dollar General Gardendale Dollar General Hartselle Dollar General Headland Dollar General Mobile Dollar General Moulton Dollar General Mt. Vernon Dollar General Ohatchee Dollar General Phenix City Dollar General Phenix City Dollar General Red Level Dollar General Sylacauga Dollar General Tarrant Dollar General Troy Dollar General Tuscaloosa Dollar General Vance Dollar General Ash Flat Dollar General Batesville Dollar General Batesville Dollar General Beebe Dollar General Bella Vista Dollar General Bergman Dollar General Blytheville Dollar General Carlisle Dollar General Des Arc Dollar General Dumas AL AL AL AL AL AL AL AL AL AL AL AL AL AL AL AL AL AL AL AR AR AR AR AR AR AR AR AR AR Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — 300 — — — 300 — — — — — — — — — — — 59 338 328 174 331 221 121 142 473 387 207 517 260 97 267 386 120 120 217 67 133 191 44 32 42 51 129 113 30 13 56 46 1,017 1,093 986 697 780 861 836 805 983 1,091 1,039 1,207 1,402 942 929 1,104 680 968 869 963 756 731 132 285 374 478 302 639 285 245 508 412 F-119 — — — — — — — — — — — — — — — — — — — — — — (2) — 11 — — — — (2) — — 1,076 1,431 1,314 871 1,111 1,082 957 947 1,456 1,478 1,246 1,724 1,662 1,039 1,196 1,490 800 1,088 1,086 1,030 889 922 174 317 427 529 431 752 315 256 564 458 (116) 9/29/2014 2014 (173) 3/28/2014 2014 (161) 2/7/2014 2013 (184) 4/26/2012 2012 (124) 3/28/2014 2013 (89) 9/26/2014 2014 (136) 2/26/2014 2014 (198) 8/9/2012 2012 (161) 2/7/2014 2013 (120) 8/13/2014 2014 (167) 2/7/2014 2013 (319) 4/26/2012 2012 (228) 2/7/2014 2013 (119) 4/17/2014 2014 (149) 2/7/2014 2012 (179) 2/7/2014 2013 (195) 10/31/2011 2010 (155) 2/7/2014 2013 (245) 12/12/2011 2011 (155) 2/7/2014 2013 (213) 12/30/2011 2011 (116) 3/28/2014 2014 (33) 6/19/2012 1997 (55) 7/25/2013 1998 (73) 7/25/2013 1999 (90) 7/25/2013 1999 (86) 11/10/2011 2005 (160) 7/2/2012 2011 (54) 7/25/2013 2000 (69) 11/10/2011 2005 (99) 7/25/2013 1999 (80) 7/25/2013 2000 Property City State Dollar General Flippin Dollar General Gassville AR AR Dollar General Green Forest AR Dollar General Higden AR Dollar General Lake Village AR Dollar General Lepanto Dollar General Little Rock Dollar General Marvell Dollar General Maynard Dollar General Mcgehee Dollar General Quitman Dollar General Searcy Dollar General Tuckerman Dollar General White Hall Dollar General Wooster Dollar General Grand Ridge Dollar General Lakeland Dollar General Molino Dollar General Palatka Dollar General Panama City Dollar General Guyton Dollar General Lyerly Dollar General Shiloh Dollar General Thomaston Dollar General Cedar Falls Dollar General Center Point Dollar General Chariton Dollar General Eagle Grove Dollar General Estherville Dollar General Hampton Dollar General Lake Mills Dollar General Nashua AR AR AR AR AR AR AR AR AR AR FL FL FL FL FL GA GA GA GA IA IA IA IA IA IA IA IA Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land — — — — — — — — — — — — — — — 300 — 400 — — — — — — — — — — — — — — 53 54 52 52 64 43 73 40 73 25 45 29 49 43 74 76 413 178 113 139 213 251 150 308 96 136 165 100 226 188 81 136 64 325 303 469 362 389 412 364 654 228 426 263 280 388 664 684 1,810 1,007 1,196 312 852 992 743 972 862 772 934 902 903 751 728 768 F-120 Costs Capitalized Subsequent to Acquisition (2) (1) — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction 116 379 355 521 426 432 485 404 727 253 471 292 329 431 738 760 2,223 1,185 1,309 451 1,065 1,243 893 1,280 958 908 1,099 1,002 1,129 939 809 904 (16) 6/19/2012 1994 (62) 7/25/2013 1999 (85) 11/10/2011 2005 (91) 7/25/2013 1995 (70) 7/25/2013 1995 (76) 7/25/2013 1995 (80) 7/25/2013 1995 (70) 7/25/2013 1995 (149) 12/4/2012 1995 (44) 7/25/2013 1998 (80) 7/25/2013 2001 (51) 7/25/2013 1998 (54) 7/25/2013 1999 (75) 7/25/2013 1999 (151) 12/4/2012 1995 (193) 12/30/2011 2010 (286) 2/7/2014 2012 (289) 10/31/2011 2011 (176) 5/7/2014 2013 (71) 6/19/2012 1987 (169) 6/3/2013 2011 (158) 2/7/2014 2012 (118) 8/13/2014 2014 (158) 2/7/2014 2013 (163) 8/28/2013 2013 (175) 12/31/2012 2012 (229) 8/31/2012 2012 (175) 7/9/2013 2013 (213) 10/25/2012 2012 (206) 2/1/2012 2012 (199) 2/1/2012 2012 (185) 9/6/2012 2012 Property City State Dollar General Ottumwa IA Dollar General Altamont Dollar General Carthage Dollar General Desoto Dollar General Fairbury Dollar General Galatia Dollar General Henry Dollar General Jacksonville Dollar General Jonesboro Dollar General Lexington Dollar General Mackinaw Dollar General Mahomet Dollar General Marion Dollar General Minonk Dollar General Mount Morris Dollar General Park Forest Dollar General Pittsburg Dollar General Rockford Dollar General Roodhouse Dollar General Savanna Dollar General South Pekin Dollar General Bainbridge Dollar General Medaryville Dollar General Monroeville Dollar General Porter Dollar General Rensselaer Dollar General Richland Dollar General Schneider Dollar General Auburn Dollar General Cottonwood Falls Dollar General Erie Dollar General Garden City IL IL IL IL IL IL IL IL IL IL IL IL IL IL IL IL IL IL IL IL IN IN IN IN IN IN IN KS KS KS KS Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — 531 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 143 211 48 138 96 87 104 145 77 100 149 292 153 56 97 390 97 464 207 273 104 131 96 112 243 111 156 124 42 89 42 136 812 844 908 784 867 1,008 934 823 309 899 1,011 877 867 1,034 877 1,036 915 597 829 1,093 933 765 914 636 995 957 887 1,010 801 802 790 771 F-121 — — — — — — — — — — — — — — — — — 27 — — — — — — — — — — — — — — 955 1,055 956 922 963 1,095 1,038 968 386 999 1,160 1,169 1,020 1,090 974 1,426 1,012 1,088 1,036 1,366 1,037 896 1,010 748 1,238 1,068 1,043 1,134 843 891 832 907 (181) 1/31/2013 2012 (227) 3/9/2012 2012 (223) 8/31/2012 2012 (167) 3/26/2013 2013 (173) 6/7/2013 2013 (103) 7/29/2014 2014 (190) 5/23/2013 2013 (202) 8/31/2012 2012 (88) 11/10/2011 2007 (217) 9/21/2012 2012 (165) 2/25/2014 2013 (166) 8/22/2013 2013 (209) 9/24/2012 1995 (108) 7/2/2014 2014 (199) 12/17/2012 2012 (99) 8/1/2014 2013 (144) 3/31/2014 2014 (68) 6/18/2014 2014 (188) 12/31/2012 1995 (248) 12/31/2012 2012 (177) 8/14/2013 2013 (77) 9/22/2014 2010 (151) 7/31/2014 2014 (179) 12/22/2011 2011 (70) 5/29/2014 2014 (111) 7/30/2014 2014 (70) 4/30/2014 2014 (100) 9/17/2014 2014 (197) 8/31/2012 2009 (197) 8/31/2012 2009 (194) 8/31/2012 2009 (189) 8/31/2012 2010 Property City State Dollar General Harper Dollar General Humboldt Dollar General Kingman Dollar General Medicine Lodge Dollar General Minneapolis Dollar General Pomona Dollar General Sedan Dollar General Syracuse Dollar General Berea Dollar General Coldiron KS KS KS KS KS KS KS KS KY KY Dollar General East Bernstadt KY Dollar General Eubank Dollar General Monticello Dollar General Nancy Dollar General Whitesburg Dollar General Bastrop Dollar General Choudrant Dollar General Converse Dollar General Doyline Dollar General Gardner Dollar General Grambling Dollar General Jonesville Dollar General Keithville KY KY KY KY LA LA LA LA LA LA LA LA Dollar General Lake Charles LA Dollar General Lake Charles LA Dollar General Mangham Dollar General Mount Hermon Dollar General New Iberia Dollar General Patterson Dollar General Monroe Dollar General Sarepta LA LA LA LA LA LA Dollar General St. Martinville LA Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — 300 — — 457 — — — — — 300 400 — — 400 — — 91 44 142 40 43 42 42 43 138 187 141 137 251 81 211 148 83 84 88 138 597 103 83 102 406 40 94 315 259 97 131 175 818 828 804 765 816 796 792 817 781 747 799 775 867 733 845 838 745 756 793 784 719 929 750 919 770 759 842 736 1,035 869 743 1,028 F-122 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 909 872 946 805 859 838 834 860 919 934 940 912 1,118 814 1,056 986 828 840 881 922 1,316 1,032 833 1,021 1,176 799 936 1,051 1,294 966 874 (201) 8/31/2012 2009 (203) 8/31/2012 2010 (198) 8/31/2012 2010 (188) 8/31/2012 2010 (200) 8/31/2012 2010 (195) 8/31/2012 2010 (195) 8/31/2012 2009 (201) 8/31/2012 2010 (159) 5/30/2013 2012 (152) 5/30/2013 2013 (163) 5/30/2013 2012 (158) 5/30/2013 2013 (132) 4/25/2014 2012 (194) 4/26/2012 2011 (172) 5/30/2013 2012 (163) 7/1/2013 2013 (204) 2/6/2012 2011 (182) 9/26/2012 2012 (184) 11/27/2012 2012 (211) 3/8/2012 2012 (122) 2/7/2014 2012 (224) 9/27/2012 2012 (188) 7/26/2012 2012 (252) 2/29/2012 2012 (126) 2/7/2014 2012 (208) 2/6/2012 2011 (231) 2/6/2012 2009 (195) 4/26/2012 2011 (274) 4/26/2012 2011 (238) 2/6/2012 2011 (183) 8/9/2012 2011 1,203 (167) 2/7/2014 2012 Property City State Dollar General Thibodaux LA Dollar General West Monroe LA Dollar General Zachary Dollar General Adams Dollar General Bangor Dollar General Bronson Dollar General Cadillac Dollar General Camden Dollar General Carleton Dollar General Covert Dollar General Durand Dollar General East Jordan Dollar General Flint Dollar General Flint Dollar General Gaylord Dollar General Iron River Dollar General Manchester Dollar General Manistique Dollar General Melvindale LA MA MI MI MI MI MI MI MI MI MI MI MI MI MI MI MI Dollar General Mount Morris MI Dollar General Negaunee Dollar General Rapid City Dollar General Romulus Dollar General Roscommon Dollar General Wakefield Dollar General Albert Lea Dollar General Annandale Dollar General Barnesville Dollar General Cohasset Dollar General Ely Dollar General Hawley Dollar General Melrose MI MI MI MI MI MN MN MN MN MN MN MN Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — 467 — 445 — 455 — 416 — — — — — — — — — — — — — — — — — — — 234 153 248 254 173 97 187 138 222 37 181 125 83 91 172 86 213 155 242 110 87 179 199 87 88 223 212 86 87 174 89 96 1,146 869 743 1,016 691 436 747 781 666 704 726 709 743 820 687 777 853 876 967 988 779 716 794 781 794 551 848 841 964 944 803 863 F-123 — — — — — — — — — — — — — — — — — — — — — — — — — (46) — — — — — — 1,380 1,022 991 1,270 864 533 934 919 888 741 907 834 826 911 859 863 1,066 1,031 1,209 1,098 866 895 993 868 882 728 1,060 927 1,051 1,118 892 959 (188) 2/7/2014 2012 (234) 3/9/2012 1995 (197) 4/26/2012 2011 (183) 10/10/2013 2012 (173) 7/10/2012 2012 (115) 8/6/2014 1965 (201) 3/16/2012 2012 (170) 2/27/2013 2013 (179) 3/16/2012 2011 (173) 8/30/2012 2012 (189) 5/18/2012 2012 (178) 7/10/2012 2012 (193) 5/18/2012 2012 (194) 10/31/2012 2012 (172) 7/10/2012 2012 (191) 8/30/2012 2012 (186) 2/27/2013 2013 (191) 2/27/2013 2012 (247) 6/26/2012 2012 (215) 2/27/2013 2012 (191) 8/30/2012 2012 (156) 2/27/2013 2012 (173) 2/27/2013 2011 (192) 8/30/2012 2012 (180) 12/19/2012 2012 (64) 5/30/2014 1960 (161) 8/2/2013 2013 (136) 2/26/2014 2014 (142) 5/2/2014 2013 (74) 4/30/2014 2014 (145) 10/16/2013 2013 (196) 12/17/2012 2012 Property City Dollar General Milaca State MN Dollar General Montgomery MN Dollar General Olivia MN Dollar General Pequot Lakes MN Dollar General Richmond Dollar General Roseau Dollar General Rush City Dollar General Springfield Dollar General Staples Dollar General Virginia MN MN MN MN MN MN Dollar General Appleton City MO Dollar General Ash Grove Dollar General Ashland Dollar General Aurora Dollar General Auxvasse Dollar General Belton Dollar General Berkeley Dollar General Bernie Dollar General Billings Dollar General Bloomfield Dollar General Cardwell Dollar General Carterville MO MO MO MO MO MO MO MO MO MO MO Dollar General Caruthersville MO Dollar General Caulfield Dollar General Clarkton Dollar General Clever Dollar General Conway Dollar General De Soto Dollar General Diamond Dollar General Doolittle MO MO MO MO MO MO MO Dollar General Eagle Rock MO Dollar General Edina MO Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — 300 — — — — — — — — — — — 300 — — — — — 102 87 98 155 96 143 126 88 150 147 22 35 70 98 72 105 132 35 139 23 89 10 98 139 19 136 37 101 44 137 133 127 916 783 884 880 836 808 716 795 848 831 124 315 398 881 650 948 748 314 790 215 805 192 878 789 354 542 694 912 175 778 786 722 F-124 — — — — — — — — — — — — (5) — — — — — — — — — — — — — — — — — — — 1,018 (169) 9/24/2013 2013 870 982 (178) 12/17/2012 2012 (197) 1/31/2013 2012 1,035 (167) 8/22/2013 2013 932 951 842 883 998 978 146 350 463 979 722 (135) 2/20/2014 2014 (146) 10/30/2013 2013 (179) 7/25/2012 2012 (180) 12/26/2012 2012 (157) 9/4/2013 2013 (185) 1/14/2013 2012 (35) 11/10/2011 2004 (90) 11/10/2011 2006 (112) 11/10/2011 2006 (192) 2/28/2013 2013 (185) 11/22/2011 2011 1,053 (233) 8/3/2012 2012 880 349 929 238 894 202 976 928 373 678 731 (177) 10/9/2012 2012 (89) 11/10/2011 2007 (142) 10/17/2013 2013 (60) 11/10/2011 2005 (198) 8/24/2012 2012 (55) 11/10/2011 2004 (212) 9/27/2012 2012 (179) 12/31/2012 2012 (101) 11/10/2011 2007 (138) 6/19/2012 2010 (197) 11/22/2011 2011 1,013 (199) 2/14/2013 2013 219 915 919 849 (50) 11/10/2011 2005 (148) 8/2/2013 2013 (127) 2/26/2014 2014 (174) 9/13/2012 2012 Property City State Dollar General Eldon Dollar General Ellsinore Dollar General Gower Dollar General Hallsville MO MO MO MO Dollar General Hawk Point MO Dollar General Humansville MO Dollar General Jennings Dollar General Joplin MO MO Dollar General Kansas City MO Dollar General King City Dollar General Laurie Dollar General Lawson Dollar General Lebanon Dollar General Lebanon Dollar General Lexington Dollar General Licking Dollar General Lilbourn Dollar General Lonedell Dollar General Malden MO MO MO MO MO MO MO MO MO MO Dollar General Marble Hill MO Dollar General Marionville MO Dollar General Marthasville MO Dollar General Maysville Dollar General Morehouse MO MO Dollar General New Haven MO Dollar General Oak Grove Dollar General Oran Dollar General Osceola Dollar General Ozark Dollar General Ozark Dollar General Pacific Dollar General Palmyra MO MO MO MO MO MO MO Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — 300 — — — — — 300 — — — — — 300 300 — — — 419 — 474 — — — 52 30 118 29 177 69 445 144 313 33 102 29 177 278 149 76 62 208 108 104 89 41 107 87 176 27 83 93 190 149 151 40 986 579 668 263 709 277 826 816 731 625 918 162 708 835 846 688 554 833 974 935 797 782 607 783 702 106 747 835 758 842 853 225 F-125 — — — (6) — — — — — — — (3) — — — — — — — — — — — — — (3) — — — — — (3) 1,038 (215) 2/14/2013 2013 609 786 286 886 346 1,271 960 1,044 658 1,020 188 885 (165) 11/10/2011 2010 (164) 8/31/2012 2012 (74) 11/10/2011 2004 (174) 8/24/2012 2012 (71) 6/19/2012 2007 (207) 7/13/2012 2012 (143) 11/12/2013 2013 (176) 9/21/2012 2012 (178) 11/22/2011 2010 (161) 11/15/2013 2013 (46) 11/10/2011 2003 (171) 9/24/2012 2012 1,113 (201) 9/21/2012 2012 995 764 616 1,041 1,082 1,039 886 823 714 870 878 130 830 928 948 991 1,004 262 (156) 9/13/2013 2013 (196) 11/22/2011 2010 (157) 11/10/2011 2010 (173) 4/26/2013 2013 (185) 8/2/2013 2013 (225) 9/11/2012 2012 (188) 10/31/2012 2012 (214) 2/1/2012 2011 (174) 10/31/2011 2010 (189) 9/7/2012 2012 (186) 4/27/2012 2012 (27) 6/19/2012 1999 (201) 3/30/2012 2012 (182) 2/19/2013 2012 (200) 4/27/2012 2012 (203) 9/24/2012 2012 (218) 6/6/2012 2012 (57) 6/19/2012 2003 Property City Dollar General Plattsburg Dollar General Qulin State MO MO Dollar General Robertsville MO Dollar General Rocky Mount MO Dollar General Rolla Dollar General Savannah Dollar General Sedadia Dollar General Senath Dollar General Seneca Dollar General Shelbina Dollar General Sikeston Dollar General Sikeston Dollar General Springfield Dollar General St. Clair Dollar General St. James Dollar General St. Louis Dollar General St. Louis Dollar General Stanberry Dollar General Steele Dollar General Strafford Dollar General Vienna MO MO MO MO MO MO MO MO MO MO MO MO MO MO MO MO MO Dollar General West Plains MO Dollar General Willow Springs Dollar General Windsor Dollar General Edwards Dollar General Greenville Dollar General Hickory Dollar General Jackson Dollar General Meridian Dollar General Meridian Dollar General Moorhead Dollar General Natchez MO MO MS MS MS MS MS MS MS MS Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — 555 — — 400 — — — 300 — — 394 — — — 300 300 — — — — 356 — 44 30 131 88 209 270 273 61 47 101 56 144 378 220 81 372 260 111 31 51 78 90 24 86 75 82 77 198 178 40 107 166 843 573 744 789 835 811 637 552 189 911 1,056 819 702 879 244 692 606 629 598 471 704 769 213 829 671 739 692 793 713 754 606 664 F-126 — (8) — — — — — — 7 — — — — — — — — — — — — — (4) — — — — — — — — — 887 595 875 877 1,044 1,081 910 613 243 1,012 1,112 963 1,080 1,099 325 1,064 866 740 629 522 782 859 233 915 746 821 769 991 891 794 713 830 (207) 8/9/2012 2012 (162) 11/10/2011 2009 (183) 8/24/2012 2011 (194) 8/31/2012 2012 (158) 8/21/2013 2013 (154) 8/23/2013 2013 (154) 9/7/2012 2012 (141) 6/19/2012 2010 (48) 6/19/2012 1962 (185) 5/22/2013 2013 (289) 2/24/2012 2011 (201) 8/24/2012 2012 (179) 6/14/2012 2012 (248) 12/30/2011 1995 (62) 6/19/2012 1999 (170) 8/31/2012 2012 (146) 9/26/2012 2012 (179) 11/22/2011 2010 (170) 11/10/2011 2009 (132) 11/10/2011 2009 (193) 2/24/2012 2011 (125) 2/20/2014 2014 (54) 6/19/2012 2002 (134) 2/20/2014 2014 (189) 12/30/2011 2011 (208) 12/30/2011 2011 (173) 7/2/2012 2011 (191) 9/27/2012 2011 (172) 9/13/2012 2011 (182) 9/13/2012 2011 (157) 5/1/2012 2011 (169) 6/12/2012 2012 Property City State Dollar General Soso Dollar General Stonewall Dollar General Stringer MS MS MS Dollar General Walnut Grove MS Dollar General Edenton Dollar General Fayetteville NC NC Dollar General Hendersonville NC Dollar General Hickory Dollar General Morganton Dollar General Ocean Isle Beach Dollar General Tryon Dollar General Vass NC NC NC NC NC Dollar General Farmington NM Dollar General Farmington NM Dollar General Modena Dollar General Fairfield Dollar General Forest Dollar General Gratis Dollar General Greenfield Dollar General Hicksville Dollar General Loudonville Dollar General Lowell Dollar General Lucasville NY OH OH OH OH OH OH OH OH Dollar General New Charlisle OH Dollar General New Matamoras Dollar General Payne Dollar General Pemberville OH OH OH Dollar General Pleasant City OH Dollar General Sandusky Dollar General Toledo OH OH Dollar General Wheelersburg OH Dollar General Broken Bow OK Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction 385 — — 300 — 300 — — — 400 — 300 — — — — 300 — 400 — — — — — 300 300 — 300 — — — — 116 116 116 71 240 216 360 89 472 341 139 226 269 224 249 131 76 161 110 156 236 157 223 215 123 81 146 131 210 252 395 331 658 655 655 641 1,025 647 1,034 804 1,108 633 789 528 807 898 996 1,272 681 1,042 986 1,490 945 1,114 893 860 696 729 1,059 740 1,700 1,149 1,132 1,325 F-127 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 774 771 771 712 1,265 863 1,394 893 1,580 974 928 754 1,076 1,122 1,245 1,403 757 1,203 1,096 1,646 1,181 1,271 1,116 1,075 819 810 1,205 871 1,910 1,401 1,527 1,656 (174) 4/12/2012 2011 (164) 7/2/2012 2011 (164) 7/2/2012 2011 (181) 12/30/2011 2011 (167) 2/28/2014 2013 (177) 2/6/2012 2011 (166) 2/7/2014 2013 (198) 8/13/2012 2012 (180) 2/7/2014 2013 (173) 2/6/2012 2011 (194) 8/13/2012 2012 (144) 2/6/2012 2011 (195) 9/6/2012 2012 (174) 7/11/2013 2013 (179) 10/10/2013 2012 (195) 2/7/2014 2013 (195) 10/31/2011 2010 (170) 2/18/2014 2013 (270) 2/23/2012 2011 (230) 2/7/2014 2012 (241) 6/6/2012 2012 (172) 2/7/2014 2012 (232) 5/16/2012 2012 (215) 7/10/2012 2012 (200) 10/31/2011 2010 (209) 10/31/2011 2010 (166) 2/7/2014 2012 (212) 10/31/2011 2010 (262) 2/7/2014 2012 (178) 2/7/2014 2012 (183) 2/25/2014 1925 (175) 5/19/2014 2012 Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Dollar General Calera Dollar General Commerce Dollar General Hartshorne Dollar General Lexington Dollar General Maud Dollar General Maysville Dollar General Ponca City OK OK OK OK OK OK OK Dollar General Rush Spring OK Dollar General Sand Springs OK Dollar General Sand Springs OK Dollar General Sand Springs OK Dollar General Tahlequah Dollar General Wagoner Dollar General Pleasantville Dollar General Sykesville Dollar General Wattsburg Dollar General Holly Hill Dollar General West Union Dollar General Doyle Dollar General Manchester OK OK PA PA PA SC SC TN TN Dollar General Mcminnville TN Dollar General Pleasant Hill TN 300 Dollar General Littleriver Acdmy Dollar General Adkins Dollar General Amarillo Dollar General Amarillo Dollar General Amarillo Dollar General Avinger Dollar General Beeville Dollar General Belton Dollar General Blessing Dollar General Boling TX TX TX TX TX TX TX TX TX TX — — — — — — — — — — — — — — — — — — — — — — — — — — 136 38 100 85 76 41 145 87 143 43 198 123 31 163 68 96 1,983 259 — — — — 46 75 114 120 39 122 157 97 153 198 44 90 89 83 92 — (6) — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 770 341 898 761 688 785 1,161 779 811 819 791 1,101 1,076 941 1,075 1,031 2,333 868 679 646 679 747 693 889 877 866 794 830 810 804 745 831 F-128 906 373 998 846 764 826 (189) 8/31/2012 2010 (96) 11/10/2011 2006 (221) 8/31/2012 2010 (187) 8/31/2012 2010 (169) 8/31/2012 2010 (193) 8/31/2012 2010 1,306 (178) 2/7/2014 2012 866 954 862 989 1,224 1,107 1,104 1,143 1,127 2,592 914 754 760 799 786 815 1,046 974 1,019 992 874 900 893 828 923 (191) 8/31/2012 2010 (150) 9/3/2013 2013 (151) 9/3/2013 2013 (146) 9/3/2013 2012 (168) 2/7/2014 2012 (165) 2/7/2014 2012 (148) 3/24/2014 2013 (169) 3/24/2014 2013 (162) 3/24/2014 2014 (497) 3/6/2013 2013 (169) 7/3/2013 2011 (167) 8/22/2012 2012 (162) 7/26/2012 2012 (170) 7/12/2012 2012 (211) 12/30/2011 2011 (183) 4/27/2012 2012 (202) 12/31/2012 2012 (166) 8/13/2013 2013 (164) 8/2/2013 2013 (154) 7/11/2013 2013 (157) 8/8/2013 2013 (188) 11/19/2012 2012 (175) 2/28/2013 2013 (169) 12/18/2012 2012 (158) 8/13/2013 2013 Property City State Dollar General Brookeland Dollar General Bryan Dollar General Bryan Dollar General Bryan Dollar General Buchanan Dam TX TX TX TX TX Dollar General Canyon Lake TX Dollar General Cedar Creek Dollar General Como TX TX Dollar General Corpus Christi TX Dollar General Diana Dollar General San Leon Dollar General Donna Dollar General Donna Dollar General Donna Dollar General Edinburg Dollar General Edinburg Dollar General Elmendorf Dollar General Ganado Dollar General Gladewater Dollar General Gordonville Dollar General Kyle Dollar General Kyle Dollar General La Marque Dollar General Lacy Lakeview Dollar General Laredo Dollar General Lubbock Dollar General Lubbock Dollar General Lubbock Dollar General Lubbock Dollar General Lyford Dollar General Lytle Dollar General Mercedes TX TX TX TX TX TX TX TX TX TX TX TX TX TX TX TX TX TX TX TX TX TX TX Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — 562 — — 386 — — — — — — — — — — — 384 — — — — — — — — — 300 — — 93 148 193 185 145 149 291 76 270 186 87 136 200 145 136 102 94 95 184 38 132 101 102 146 253 267 199 148 41 80 243 215 840 840 772 740 820 843 680 683 809 743 786 768 799 820 769 914 847 857 736 717 747 910 917 826 758 801 796 841 825 724 971 859 F-129 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 933 988 965 925 965 992 971 759 (159) 8/15/2013 2013 (202) 9/14/2012 2012 (186) 9/14/2012 2012 (182) 8/31/2012 2009 (198) 9/28/2012 2012 (199) 10/12/2012 2012 (158) 11/16/2012 2012 (181) 4/20/2012 2012 1,079 (184) 12/26/2012 2012 929 873 904 999 965 905 (141) 8/27/2013 2013 (190) 9/25/2012 2012 (185) 9/11/2012 2012 (189) 10/12/2012 2012 (182) 1/31/2013 2012 (185) 9/7/2012 2012 1,016 (177) 7/16/2013 2013 941 952 920 755 879 1,011 1,019 972 1,011 1,068 995 989 866 804 1,214 1,074 (200) 10/23/2012 2012 (162) 8/13/2013 2013 (181) 8/31/2012 2009 (190) 4/20/2012 2012 (180) 9/26/2012 2012 (155) 12/6/2013 2013 (225) 8/31/2012 2010 (191) 11/16/2012 2012 (190) 7/31/2012 2012 (197) 8/31/2012 2010 (151) 8/28/2013 2013 (171) 5/16/2013 2013 (134) 2/20/2014 2014 (204) 12/30/2011 2010 (175) 10/30/2013 2013 (163) 8/2/2013 2013 Property City State Dollar General Mission Dollar General Moody Dollar General Belton Dollar General Mount Pleasant TX TX TX TX Dollar General New Braunfels TX Dollar General New Braunfels TX Dollar General New Braunfels TX Dollar General Orange Dollar General Poteet Dollar General Presidio Dollar General Progreso Dollar General Dollar General Rio Grande City Rio Grande City Dollar General Roma Dollar General San Antonio Dollar General San Antonio Dollar General San Antonio Dollar General San Antonio Dollar General San Antonio Dollar General San Antonio Dollar General San Antonio Dollar General San Benito Dollar General San Juan Dollar General Silsbee Dollar General Skidmore TX TX TX TX TX TX TX TX TX TX TX TX TX TX TX TX TX TX Dollar General Sullivan City TX Dollar General Texarkana Dollar General Troy Dollar General Tyler Dollar General Tyler Dollar General Victoria Dollar General Vidor TX TX TX TX TX TX Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — 400 — 400 300 — 500 — — — — — — — — — — — — — — — — — — 158 41 145 214 205 95 156 277 96 72 169 137 163 253 252 222 163 271 239 220 333 202 169 43 90 165 136 93 219 602 91 — 894 781 821 858 818 855 883 1,150 864 1,370 957 779 652 1,010 756 888 926 812 956 880 776 807 956 810 811 876 772 841 875 956 817 1,182 F-130 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 1,052 (190) 3/27/2013 2013 822 966 1,072 1,023 950 1,039 1,427 960 1,442 1,126 916 815 1,263 1,008 1,110 1,089 1,083 1,195 1,100 1,109 1,009 1,125 853 901 (155) 6/11/2013 2013 (198) 9/13/2012 2012 (211) 8/31/2012 2009 (201) 8/31/2012 2012 (186) 2/14/2013 2013 (159) 10/30/2013 2013 (171) 2/7/2014 2012 (248) 10/31/2011 2010 (292) 3/28/2013 2013 (274) 10/31/2011 2010 (223) 10/31/2011 2010 (179) 2/1/2012 2011 (290) 10/31/2011 2010 (179) 10/22/2012 2012 (210) 10/22/2012 2012 (202) 2/14/2013 2013 (165) 5/23/2013 2013 (204) 3/11/2013 2013 (171) 7/9/2013 2013 (147) 8/13/2013 2013 (153) 8/23/2013 2013 (168) 11/15/2013 2013 (203) 7/6/2012 2012 (177) 2/14/2013 2013 1,041 (142) 2/26/2014 2014 908 934 1,094 1,558 908 1,182 (139) 10/25/2013 2013 (203) 9/12/2012 2012 (215) 8/31/2012 2010 (157) 2/7/2014 2013 (182) 1/31/2013 2013 (176) 2/7/2014 2012 Property City State Dollar General Waco Dollar General Weslaco Dollar General Weslaco Dollar General Burkeville Dollar General Richmond Dollar General Danville Dollar General Hopewell Dollar General Hot Springs Dollar General Mellen Dollar General Minong TX TX TX VA VA VA VA VA WI WI Dollar General Solon Springs WI Dollar General Chelyan Dollar General Cowen Dollar General Elkview Dollar General Mcmechen Dollar General Millwood Dollar General Oceana Dollar General Dollar Tree Dunkin Donuts/ Baskin-Robbins Powhatan Point Chiefland Dearborn Heights Earhart Corporate Center Ann Arbor Eegee's Tucson Einstein Bros. Bagels Dearborn El Chico Killeen Elite Production Services Cuero EMC Corporation Bedford Emdeon Business Services Nashville Encana Oil & Gas Plano Energy Maintenance Services US Pasadena Evans Exchange Evans Exelis Experian Herndon Schaumburg Express Energy Services Pleasanton WV WV WV WV WV WV OH FL MI MI AZ MI TX TX MA TN TX TX GA VA IL TX Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — 400 300 500 400 300 300 300 — — — — — — — — — 192 215 205 160 242 155 584 283 79 38 76 273 196 274 91 98 317 138 322 230 767 862 822 906 726 621 713 661 711 727 685 1,092 783 823 819 881 1,023 784 1,123 846 — — — — — — — — — — — — — — — — — — — — 959 1,077 1,027 1,066 968 776 (188) 8/31/2012 2012 (208) 9/24/2012 2012 (148) 10/16/2013 2013 (235) 5/8/2012 2012 (199) 2/6/2012 2011 (170) 2/6/2012 2011 1,297 (195) 2/6/2012 2011 944 790 765 761 1,365 979 1,097 910 979 1,340 922 1,445 1,076 (181) 2/6/2012 2011 (201) 12/30/2011 2011 (205) 12/30/2011 2011 (193) 12/30/2011 2011 (202) 9/27/2013 2013 (174) 1/16/2013 2012 (156) 8/2/2013 2013 (182) 1/9/2013 2012 (171) 7/2/2013 2013 (101) 11/20/2014 2014 (152) 7/2/2013 2014 (176) 3/31/2014 2013 (162) 6/27/2013 1995 27,678 3,520 39,639 (7,268) 35,891 (1,013) 11/5/2013 2006 — — — — 357 190 534 127 436 724 992 982 51,400 16,594 75,137 4,700 688 10,417 66,000 2,493 95,231 — 6,610 — — — 393 3,452 1,384 5,935 413 2,878 9,821 53,584 26,003 — — (803) — 203 — — — 18 — (5,778) 793 914 723 (80) 7/31/2013 1990 (139) 6/27/2013 (45) 7/31/2013 1995 1993 1,109 (111) 6/25/2014 2014 91,934 (10,030) 2/7/2014 2001 11,105 (1,254) 2/7/2014 2010 97,724 (11,369) 2/7/2014 2012 3,271 13,291 54,968 26,160 (326) 6/12/2014 (1,490) 2/7/2014 (8,133) 11/5/2013 (818) 2/7/2014 2011 2009 1999 1986 5,541 — 5,954 (630) 6/12/2014 2012 F-131 Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Express Scripts St. Louis MO 22,620 5,706 32,333 Exterran Energy Solutions Fort Worth Family Dollar Bessemer Family Dollar Camden Family Dollar Grove Hill Family Dollar Hayneville Family Dollar Hoover Family Dollar Huntsville Family Dollar Huntsville Family Dollar Jemison Family Dollar Marion Family Dollar Millbrook TX AL AL AL AL AL AL AL AL AL AL Family Dollar Montgomery AL Family Dollar Montgomery AL Family Dollar Wilmer Family Dollar El Dorado Family Dollar El Dorado Family Dollar Hot Springs Family Dollar Jacksonville Family Dollar Little Rock Family Dollar Ash Fork Family Dollar Avondale AL AR AR AR AR AR AZ AZ Family Dollar Casa Grande AZ Family Dollar Coolidge Family Dollar Duncan AZ AZ Family Dollar Fort Mohave AZ Family Dollar Golden Valley AZ Family Dollar Guadalupe AZ Family Dollar Mohave Valley AZ Family Dollar Phoenix Family Dollar Phoenix AZ AZ — — — — — — — — 757 — — — 959 — — 663 — 571 467 — 974 — 603 — — — — — — — 1,360 295 137 144 172 368 476 628 143 247 316 218 533 221 151 49 247 155 125 123 603 454 126 98 302 110 400 302 303 416 5,704 1,301 851 741 722 1,153 1,092 924 997 780 1,052 847 936 791 806 1,003 845 758 629 1,015 882 313 785 895 571 772 584 281 712 1,229 F-132 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 38,039 (9,472) 1/25/2012 2011 7,064 1,596 988 885 894 1,521 1,568 1,552 1,140 1,027 1,368 1,065 1,469 1,012 957 1,052 1,092 913 754 1,138 1,485 767 911 993 873 882 984 583 1,015 1,645 (627) 9/5/2014 2011 (163) 6/16/2014 2014 (117) 5/29/2014 2014 (77) 7/24/2014 2013 (107) 5/7/2014 2013 (118) 8/29/2014 2014 (108) 8/29/2014 2014 (76) 1/12/2015 2014 (161) 2/7/2014 2011 (82) 7/30/2014 2014 (107) 8/28/2014 2013 (87) 8/28/2014 2013 (154) 2/7/2014 2010 (108) 5/29/2014 2014 (96) 8/28/2014 1988 (151) 2/7/2014 2002 (133) 2/7/2014 2011 (115) 2/7/2014 2002 (95) 2/7/2014 2002 (104) 8/28/2014 2013 (146) 2/7/2014 2002 (58) 2/7/2014 2003 (126) 2/7/2014 2000 (91) 8/28/2014 2013 (97) 2/7/2014 2001 (92) 8/28/2014 2001 (99) 2/7/2014 2004 (52) 2/7/2014 2003 (83) 8/28/2014 2004 (123) 8/28/2014 2013 Property City State Family Dollar Phoenix Family Dollar Phoenix Family Dollar Dacano Family Dollar Fort Lupton Family Dollar Rangeley Family Dollar New Britain Family Dollar Wilmington Family Dollar Altha Family Dollar Anthony Family Dollar Apopka Family Dollar Auburndale Family Dollar Belleview Family Dollar Beverly Hills AZ AZ CO CO CO CT DE FL FL FL FL FL FL Family Dollar Bonita Springs FL Family Dollar Bristol Family Dollar Bunnell Family Dollar Cape Coral Family Dollar Citra Family Dollar Clearwater Family Dollar Deland Family Dollar Deltona Family Dollar Deltona Family Dollar Fort Meade Family Dollar Fort Myers Family Dollar Fountain Family Dollar Gainesville Family Dollar Graceville Family Dollar Jacksonville Family Dollar Jacksonville Family Dollar Kissimmee Family Dollar Lake Alfred Family Dollar Lake City FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — 1,109 1,040 757 916 323 — — — — 1,127 — — — — 631 — — — — 1,057 686 1,042 417 973 — 1,002 — 1,028 789 970 — 622 504 155 154 66 484 540 126 242 518 314 332 409 672 202 188 675 47 425 492 171 206 211 189 202 423 367 271 545 643 484 186 767 1,079 959 1,180 593 1,280 1,218 727 1,037 1,402 951 829 965 918 727 936 1,190 1,038 1,006 1,293 1,074 1,578 606 1,344 825 1,263 810 1,121 1,173 1,071 1,006 872 F-133 — — — — — 26 — — — — — — — — — — — — — — — — — — — — — — — — — — 1,876 1,583 1,114 1,334 659 1,790 1,758 853 1,279 1,920 1,265 1,161 1,374 1,590 929 1,124 1,865 1,085 1,431 1,785 1,245 1,784 817 1,533 1,027 1,686 1,177 1,392 1,718 1,714 1,490 1,058 (134) 2/7/2014 2003 (176) 2/7/2014 2003 (157) 2/7/2014 2003 (192) 2/7/2014 1961 (154) 5/4/2012 2010 (122) 10/14/2014 2013 (92) 4/21/2015 2015 (121) 2/7/2014 2011 (107) 10/30/2014 2014 (209) 2/7/2014 2011 (97) 8/28/2014 2013 (129) 2/7/2014 2013 (99) 8/28/2014 2013 (154) 2/7/2014 2013 (123) 2/7/2014 2011 (97) 8/28/2014 2013 (188) 3/5/2014 2013 (105) 8/28/2014 2013 (99) 8/22/2014 2014 (196) 2/7/2014 2011 (155) 2/7/2014 2004 (234) 2/7/2014 2011 (85) 2/7/2014 2000 (208) 2/7/2014 2002 (85) 8/28/2014 2014 (190) 2/7/2014 2011 (125) 4/30/2014 2013 (164) 2/7/2014 2011 (179) 2/7/2014 2008 (158) 2/7/2014 2011 (76) 12/23/2014 2014 (132) 2/7/2014 2011 Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Family Dollar Lake Panasoffkee Family Dollar Lakeland Family Dollar Largo Family Dollar Middleburg Family Dollar Milton Family Dollar Mulberry Family Dollar Ocala Family Dollar Ocala Family Dollar Ocala Family Dollar Okeechobee Family Dollar Orlando Family Dollar Orlando FL FL FL FL FL FL FL FL FL FL FL FL Family Dollar Ormond Beach FL Family Dollar Ormond Beach FL Family Dollar Oviedo Family Dollar Palatka FL FL — 732 — — 644 — — — 968 894 — — — — — — Family Dollar Pembroke Park FL 1,141 Family Dollar Pensacola Family Dollar Pensacola Family Dollar Plant City Family Dollar Plant City Family Dollar Sebring Family Dollar St Petersburg Family Dollar Tallahassee Family Dollar Tampa Family Dollar Tampa Family Dollar Tampa FL FL FL FL FL FL FL FL FL FL Family Dollar Winter Haven FL Family Dollar Zellwood Family Dollar Abbeville Family Dollar Acworth Family Dollar Alma FL GA GA GA — 559 — 1,173 — 1,093 — 1,005 1,168 — — — — — — 237 339 844 274 544 131 108 344 554 655 349 291 573 675 469 316 656 69 146 279 712 492 690 632 531 773 552 534 272 163 489 79 696 785 962 822 683 1,156 816 1,251 984 580 1,294 1,286 860 1,152 848 1,054 944 1,085 907 1,040 1,113 1,063 1,000 871 1,062 1,057 792 942 1,005 768 901 954 F-134 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 933 1,124 1,806 1,096 1,227 1,287 924 1,595 1,538 1,235 1,643 1,577 1,433 1,827 1,317 1,370 1,600 1,154 1,053 1,319 1,825 1,555 1,690 1,503 1,593 1,830 1,344 1,476 1,277 931 1,390 1,033 (110) 3/25/2014 2013 (128) 2/7/2014 2003 (157) 2/7/2014 2013 (163) 6/4/2013 2008 (96) 2/7/2014 2010 (116) 8/28/2014 2013 (88) 8/28/2014 2005 (186) 2/7/2014 2006 (157) 2/7/2014 2011 (110) 2/7/2014 2011 (128) 8/28/2014 2014 (128) 8/28/2014 2013 (171) 6/4/2013 2008 (173) 2/7/2014 2011 (138) 2/19/2014 2013 (162) 4/25/2014 2014 (167) 2/7/2014 2006 (107) 8/28/2014 2013 (129) 2/7/2014 2003 (156) 2/7/2014 2004 (181) 2/7/2014 2005 (117) 6/24/2014 2014 (165) 2/7/2014 2011 (147) 2/7/2014 2011 (169) 2/7/2014 2008 (172) 2/7/2014 2011 (125) 2/7/2014 2013 (64) 8/8/2014 2014 (99) 8/22/2014 2014 (86) 5/29/2014 2014 (94) 8/28/2014 2013 (96) 8/28/2014 1982 Property City State Family Dollar Claxton Family Dollar Cordele Family Dollar Fayetteville Family Dollar Helena GA GA GA GA Family Dollar Jeffersonville GA Family Dollar Lenox Family Dollar Lindale Family Dollar Macon Family Dollar Macon Family Dollar Marietta Family Dollar Marietta Family Dollar Omega Family Dollar Richland Family Dollar Riverdale Family Dollar Vienna Family Dollar Des Moines Family Dollar Des Moines Family Dollar Fort Dodge Family Dollar Arco Family Dollar Homedale Family Dollar Kimberly Family Dollar Lombard Family Dollar Mount Vernon Family Dollar Pulaski Family Dollar University Park Family Dollar Brookston Family Dollar Indianapolis Family Dollar Lake Village Family Dollar Mitchell Family Dollar Princeton Family Dollar Seymour Family Dollar Terre Haute GA GA GA GA GA GA GA GA GA GA IA IA IA ID ID ID IL IL IL IL IN IN IN IN IN IN IN Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — 673 — — — — — — — 822 408 — 973 — — — — — — 613 — — 526 — 394 322 136 217 242 153 90 227 300 230 366 582 167 125 310 62 152 411 152 76 59 219 1,008 117 31 295 126 375 154 101 300 238 235 665 1,049 1,203 790 926 809 966 893 851 749 1,126 716 859 1,188 721 863 871 449 684 1,387 657 543 1,050 588 688 715 707 752 1,119 486 764 427 F-135 — — — — — — — — — — — — — — — 6 — — — — — — — — — — — — — — — — 987 1,185 1,420 1,032 1,079 899 1,193 1,193 1,081 1,115 1,708 883 984 1,498 783 1,021 1,282 601 760 1,446 876 1,551 1,167 619 983 841 1,082 906 1,220 786 1,002 662 (99) 5/14/2014 2014 (117) 4/30/2014 2014 (108) 11/20/2014 2014 (129) 2/19/2014 2013 (93) 8/15/2014 2014 (187) 11/9/2012 2012 (100) 8/28/2014 2014 (92) 8/28/2014 2013 (135) 2/7/2014 2011 (122) 2/19/2014 2013 (114) 8/28/2014 2013 (113) 3/12/2014 2013 (88) 8/28/2014 2014 (114) 9/26/2014 2014 (114) 3/12/2014 2013 (164) 8/30/2013 1995 (142) 2/7/2014 2003 (77) 2/7/2014 2002 (165) 9/18/2012 2012 (222) 2/7/2014 2006 (137) 4/10/2013 2013 (93) 12/12/2013 1967 (204) 7/11/2013 2012 (134) 12/31/2012 2012 (124) 10/29/2013 2013 (169) 10/1/2012 2012 (103) 2/7/2014 2003 (225) 4/30/2014 2013 (117) 8/28/2014 2014 (81) 2/7/2014 2000 (125) 2/7/2014 2003 (68) 2/7/2014 2011 Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Family Dollar Greensburg Family Dollar Kansas City Family Dollar Kansas City Family Dollar Kansas City Family Dollar Topeka Family Dollar Wichita KS KS KS KS KS KS Family Dollar Bowling Green KY Family Dollar Carlisle Family Dollar Garrison Family Dollar Rockholds Family Dollar Abbeville Family Dollar Alexandria Family Dollar Arcadia Family Dollar Avondale KY KY KY LA LA LA LA Family Dollar Baton Rouge LA Family Dollar Chalmette Family Dollar Farmerville Family Dollar Kentwood LA LA LA — — — 982 — — — — — — 740 458 — — — — 722 683 Family Dollar New Orleans LA 1,146 Family Dollar Shreveport Family Dollar Tickfaw Family Dollar Westwego Family Dollar Lynn Family Dollar Barryton Family Dollar Birch Run Family Dollar Brooklyn Family Dollar Burton Family Dollar Detroit Family Dollar Detroit Family Dollar Detroit Family Dollar Flint Family Dollar Hudson LA LA LA MA MI MI MI MI MI MI MI MI MI 892 — — 1,222 — — — 866 — — — — 833 80 290 352 154 177 216 334 157 134 121 141 168 51 381 377 751 110 117 547 177 181 332 400 32 81 150 131 130 106 110 162 108 718 1,170 1,026 1,367 1,405 1,035 951 871 737 988 949 579 704 1,255 716 615 968 877 1,252 1,177 543 1,052 1,547 599 729 634 1,164 1,169 956 1,051 1,027 1,020 F-136 — (5) — — — — — — — — — — — — — — — — — — — — — — 86 — — — — — — — 798 1,455 1,378 1,521 1,582 1,251 1,285 1,028 871 1,109 1,090 747 755 1,636 1,093 1,366 1,078 994 1,799 1,354 724 1,384 1,947 631 896 784 1,295 1,299 1,062 1,161 1,189 1,128 (133) 9/9/2013 2012 (131) 11/6/2014 1995 (117) 12/18/2014 1995 (213) 2/7/2014 2002 (226) 2/7/2014 2004 (104) 8/28/2014 2013 (97) 8/28/2014 2013 (91) 8/28/2014 2014 (126) 2/20/2014 2012 (104) 8/28/2014 2014 (155) 2/7/2014 2005 (92) 2/7/2014 2005 (122) 2/20/2014 2010 (127) 8/28/2014 2013 (119) 2/7/2014 2003 (160) 5/3/2012 2011 (155) 2/7/2014 2003 (144) 2/7/2014 2003 (199) 2/7/2014 2005 (187) 2/7/2014 2005 (146) 3/30/2012 2011 (109) 8/28/2014 2013 (240) 2/7/2014 2003 (136) 12/18/2012 2012 (143) 7/11/2013 1950 (104) 2/7/2014 2002 (187) 2/7/2014 2003 (271) 11/27/2012 2011 (195) 5/2/2013 1964 (112) 8/28/2014 2005 (180) 2/26/2014 2014 (174) 2/7/2014 2005 Property City State Family Dollar Jackson Family Dollar Kentwood Family Dollar Monroe Family Dollar Newaygo Family Dollar Pontiac Family Dollar Remus Family Dollar Saginaw Family Dollar Tustin Family Dollar Crosby Family Dollar Ely MI MI MI MI MI MI MI MI MN MN Family Dollar Intrnatnl Falls MN Family Dollar St. Peter Family Dollar Berkeley MN MO Family Dollar Kansas City MO Family Dollar Kansas City MO Family Dollar Kansas City MO Family Dollar Marble Hill MO Family Dollar Raytown Family Dollar St Louis Family Dollar St Louis Family Dollar St Louis Family Dollar St. Louis Family Dollar St. Louis Family Dollar St. Louis Family Dollar Bassfield Family Dollar Biloxi Family Dollar Canton Family Dollar Carriere Family Dollar D'Iberville Family Dollar Drew Family Dollar Greenville Family Dollar Gulfport MO MO MO MO MO MO MO MS MS MS MS MS MS MS MS Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — 739 — 689 962 — — — — — — 409 969 683 1,211 970 — — — 972 — — — — — 434 — 399 — — — 411 93 389 243 317 136 49 164 33 49 231 32 93 179 277 119 142 38 415 168 215 258 445 215 445 96 310 210 200 241 11 125 209 525 919 1,061 677 1,249 992 1,086 633 928 1,008 608 566 1,391 812 1,705 1,338 719 — 671 1,357 1,310 1,038 1,219 1,039 752 575 1,142 599 561 1,039 872 626 F-137 — — — — — — — — — — — — — — — — — 1,287 (4) — — — — — — — — — — — — — 618 1,308 1,304 994 1,385 1,041 1,250 666 977 (97) 9/12/2013 2007 (134) 2/7/2014 2001 (109) 8/28/2014 2013 (116) 2/7/2014 2002 (205) 2/7/2014 2003 (172) 1/2/2014 2012 (180) 2/7/2014 2003 (144) 12/18/2012 1995 (180) 7/11/2013 1985 1,239 (169) 2/27/2014 2014 640 659 1,570 1,089 1,824 1,480 757 1,702 835 1,572 1,568 1,483 1,434 1,484 848 885 (112) 9/30/2013 1966 (86) 2/7/2014 1960 (210) 2/7/2014 2003 (127) 2/7/2014 2003 (270) 2/7/2014 2004 (210) 2/7/2014 2004 (136) 8/29/2013 2013 (76) 2/20/2015 2014 (176) 4/2/2012 2006 (207) 2/7/2014 2003 (200) 2/7/2014 2003 (245) 10/23/2012 2012 (254) 4/30/2013 1995 (236) 12/14/2012 2012 (128) 2/19/2014 2013 (155) 3/30/2012 2012 1,352 (116) 8/28/2014 2013 799 802 (161) 3/30/2012 2012 (146) 5/21/2012 2012 1,050 (125) 8/28/2014 1989 997 835 (140) 2/7/2014 2011 (163) 5/21/2012 2012 Property City State Family Dollar Gulfport Family Dollar Gulfport Family Dollar Gulfport Family Dollar Hattiesburg Family Dollar Horn Lake Family Dollar Kiln Family Dollar Laurel Family Dollar Natchez Family Dollar Okolona Family Dollar Pearl MS MS MS MS MS MS MS MS MS MS Family Dollar Philadelphia MS Family Dollar Winona Family Dollar Anaconda Family Dollar Ennis MS MT MT Family Dollar Three Forks MT Family Dollar Whitehall MT Family Dollar Asheboro Family Dollar Boiling Springs Family Dollar Burlington Family Dollar Charlotte Family Dollar Charlotte Family Dollar Ellerbe Family Dollar Fayetteville Family Dollar Hickory Family Dollar Hiddenite Family Dollar Liberty Family Dollar Lumberton Family Dollar Lumberton Family Dollar Charlotte Family Dollar Parkton Family Dollar Raeford Family Dollar Raeford NC NC NC NC NC NC NC NC NC NC NC NC NC NC NC NC Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 270 218 312 225 225 106 225 289 64 342 53 146 164 246 250 132 251 322 291 352 490 225 267 215 221 243 151 146 412 164 428 185 629 654 1,237 674 676 650 723 749 578 1,001 897 585 1,058 — — — 932 767 694 985 1,066 781 682 785 832 802 603 1,013 992 894 900 935 F-138 — — — — — — — — — — — — — 773 953 1,064 — — — — — — — — — — — — — — — — 899 872 (152) 9/20/2012 2012 (151) 11/15/2012 2012 1,549 (200) 2/7/2014 2007 899 901 756 948 1,038 642 1,343 950 731 1,222 1,019 1,203 1,196 1,183 1,089 985 1,337 1,556 1,006 949 1,000 1,053 1,045 754 1,159 1,404 1,058 1,328 1,120 (150) 1/30/2013 2012 (166) 8/22/2012 2012 (151) 11/14/2012 2012 (123) 2/19/2014 2013 (101) 8/28/2014 1982 (145) 7/31/2012 2012 (101) 8/28/2014 2013 (93) 8/28/2014 2014 (147) 7/31/2012 2012 (112) 9/30/2014 2014 (102) 1/8/2015 2014 (43) 8/20/2014 2014 (140) 3/19/2015 1995 (98) 8/28/2014 2014 (77) 8/28/2014 2013 (72) 8/28/2014 2012 (151) 4/15/2014 2014 (109) 7/2/2014 2014 (106) 5/29/2014 2014 (108) 3/14/2014 2013 (81) 8/28/2014 2014 (86) 8/28/2014 2013 (83) 8/28/2014 2013 (112) 9/11/2013 1995 (109) 6/20/2014 2014 (104) 6/25/2014 2014 (89) 9/19/2014 2014 (138) 4/17/2014 2014 (126) 5/29/2014 2014 Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Family Dollar Troy Family Dollar Fort Yates Family Dollar New Town Family Dollar Rolla Family Dollar Madison Family Dollar Omaha Family Dollar Omaha Family Dollar Rushville Family Dollar Lancaster Family Dollar Stratford NC ND ND ND NE NE NE NE NH NJ — — — — — — — — — — Family Dollar Alamorgordo NM 524 Family Dollar Belen Family Dollar Carrizozo Family Dollar Chimayo Family Dollar Cloudcroft Family Dollar Clovis Family Dollar Gallup Family Dollar Hernandez Family Dollar Logan Family Dollar Lovington NM NM NM NM NM NM NM NM NM Family Dollar Mountainair NM Family Dollar Roswell Family Dollar Springer Family Dollar Velarde Family Dollar Waterflow Family Dollar Battle Mountain Family Dollar Carlin NM NM NM NM NV NV Family Dollar Cold Springs NV Family Dollar Hawthorne Family Dollar Las Vegas Family Dollar Lovelock NV NV NV Family Dollar Silver Spring NV — — — — 657 — 1,152 — — — 766 — — — — — — 471 876 457 — 341 126 105 83 37 196 141 125 456 378 161 350 250 158 184 119 221 140 80 54 84 140 106 183 175 116 99 217 191 689 185 202 621 715 942 749 703 1,334 1,159 499 1,294 1,511 675 — — 632 1,344 854 1,366 1,434 — 722 752 953 — — — 1,431 895 869 764 612 742 808 F-139 — — 24 — — — 3 — (2) (174) — 969 1,113 (15) — — — — 1,147 — — — 1,199 1,122 1,294 — — — — — — — 962 841 (72) 6/17/2014 2014 (199) 1/31/2012 2010 1,071 (263) 1/31/2012 2011 832 740 1,530 1,303 624 1,748 1,715 836 1,319 1,363 775 1,528 973 1,587 1,574 1,227 776 836 1,093 1,305 1,305 1,469 1,547 994 1,086 955 1,301 927 1,010 (209) 1/31/2012 2010 (198) 12/30/2011 2011 (170) 12/19/2014 1995 (139) 12/18/2014 1995 (104) 4/26/2013 2007 (116) 12/12/2014 1989 (114) 12/31/2014 2014 (103) 2/7/2014 2001 (75) 5/29/2015 2014 (66) 3/6/2015 2014 (139) 1/30/2013 2009 (155) 12/18/2014 1995 (136) 2/7/2014 2004 (227) 2/7/2014 2007 (238) 2/7/2014 2008 (77) 5/29/2015 2015 (77) 6/30/2014 2014 (188) 7/16/2012 2011 (155) 2/7/2014 2004 (122) 2/11/2015 2014 (70) 2/25/2015 2015 (33) 2/5/2015 2014 (228) 2/7/2014 2009 (165) 9/13/2013 2012 (161) 9/13/2013 2013 (195) 6/1/2012 2012 (114) 2/7/2014 2005 (193) 5/4/2012 2012 (195) 9/21/2012 2012 Property City State Family Dollar Wells Family Dollar Altona Family Dollar Chateaugay Family Dollar Cincinnatus NV NY NY NY Family Dollar Hoosick Falls NY Family Dollar Penn Yan Family Dollar Sodus Family Dollar Wolcott Family Dollar Bethel Family Dollar Canal Winchester Family Dollar Canton Family Dollar Cincinnati Family Dollar Cleveland Family Dollar Cleveland Family Dollar Cortland Family Dollar Dayton Family Dollar Dayton Family Dollar Hamilton NY NY NY OH OH OH OH OH OH OH OH OH OH Family Dollar Jackson Center OH Family Dollar Loveland Family Dollar Middleton Family Dollar Toledo Family Dollar Toledo Family Dollar Warren Family Dollar Durant Family Dollar El Reno Family Dollar Geary Family Dollar Keota Family Dollar Kingston OH OH OH OH OH OK OK OK OK OK Family Dollar Oklahoma City OK Family Dollar Oklahoma City OK Family Dollar Porum OK Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction 415 — — — — 525 — — 852 — 460 — 1,079 1,370 — — — — — 798 660 — — — — — — — — — — — 84 94 133 287 181 23 54 197 139 218 93 221 39 216 188 107 129 131 97 179 137 306 226 170 164 225 167 279 28 403 390 18 755 923 910 862 724 760 1,441 1,193 1,099 1,116 766 1,055 1,614 1,818 963 899 618 1,215 764 986 869 917 905 681 1,223 — 882 872 660 — 990 — F-140 — — — — — — — — — — — — — — — — — — — — — — — (2) — 968 — — — 988 — 995 839 1,017 1,043 1,149 905 783 1,495 1,390 1,238 1,334 859 1,276 1,653 2,034 1,151 1,006 747 1,346 861 1,165 1,006 1,223 1,131 849 1,387 1,193 1,049 1,151 688 1,391 1,380 1,013 (196) 5/11/2012 2011 (156) 2/21/2014 2014 (154) 2/20/2014 2014 (147) 12/30/2013 2013 (151) 4/26/2013 2013 (119) 2/7/2014 2003 (214) 5/7/2014 2013 (100) 3/25/2015 2014 (180) 2/7/2014 2005 (113) 8/28/2014 2012 (117) 2/7/2014 2002 (115) 8/28/2014 2001 (251) 2/7/2014 2003 (291) 2/7/2014 1994 (100) 8/28/2014 2013 (116) 8/28/2014 1940 (74) 8/28/2014 2002 (121) 8/28/2014 2013 (84) 4/28/2014 1989 (161) 2/7/2014 2002 (139) 2/7/2014 2001 (200) 2/25/2013 2012 (176) 7/11/2013 1942 (164) 9/11/2012 2012 (130) 8/28/2014 2000 (113) 3/2/2015 1995 (54) 10/14/2015 2015 (97) 10/16/2014 2014 (97) 2/7/2014 2000 (65) 5/15/2015 2015 (102) 8/28/2014 2013 (65) 11/5/2015 2015 Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Family Dollar Poteau Family Dollar Stilwell Family Dollar Texhoma Family Dollar Tulsa Family Dollar Broad Top Family Dollar Abbeville Family Dollar Columbia Family Dollar Columbia Family Dollar Estill Family Dollar Lancaster Family Dollar Manning Family Dollar Mccormick Family Dollar Newberry Family Dollar North Family Dollar St. Matthews Family Dollar Woodruff Family Dollar Blackhawk Family Dollar Custer Family Dollar Lemmon Family Dollar Martin Family Dollar Mclaughlin Family Dollar Parker Family Dollar Tyndall Family Dollar Harrison Family Dollar Lexington Family Dollar Memphis Family Dollar Memphis Family Dollar Memphis Family Dollar Memphis Family Dollar Nashville Family Dollar Piney Flats Family Dollar Alton OK OK OK OK PA SC SC SC SC SC SC SC SC SC SC SC SD SD SD SD SD SD SD TN TN TN TN TN TN TN TN TX — — — 536 — — — — — — — — — — — — — — — — — — — — — — 638 1,251 973 — — — 310 40 150 220 196 146 429 489 244 249 313 167 231 193 175 229 115 32 140 85 35 117 72 74 323 248 215 376 336 334 200 134 — 768 — 878 954 734 719 943 757 725 960 791 935 979 828 1,125 585 617 — 764 — 828 — 420 838 1,039 811 1,508 1,156 1,275 953 908 F-141 924 — 912 — — — — — — — — — — — — — — — 1,021 — 1,092 1 1,072 — — — — — — — — — 1,234 808 1,062 1,098 1,150 880 1,148 1,432 1,001 974 1,273 958 1,166 1,172 1,003 1,354 700 649 1,161 849 1,127 946 1,144 494 1,161 1,287 1,026 1,884 1,492 1,609 1,153 1,042 (63) 8/7/2015 2015 (214) 1/6/2012 2011 (39) 4/15/2015 2015 (220) 7/30/2012 2012 (103) 5/30/2014 2013 (84) 5/23/2014 2014 (114) 3/12/2014 2014 (75) 2/3/2015 2013 (84) 6/4/2014 2014 (76) 8/28/2014 2013 (95) 9/30/2014 2014 (122) 4/30/2014 2014 (147) 3/27/2014 2013 (78) 2/23/2015 2013 (83) 9/3/2014 2014 (113) 8/28/2014 2010 (63) 8/6/2014 2006 (123) 6/14/2013 1995 (64) 5/1/2015 2014 (213) 1/31/2012 2010 (46) 5/12/2015 2015 (104) 10/10/2014 2014 (80) 3/31/2015 2015 (81) 7/23/2013 2006 (87) 8/28/2014 2013 (163) 2/7/2014 2004 (127) 2/7/2014 2003 (242) 2/7/2014 2005 (184) 2/7/2014 2003 (141) 8/28/2014 1976 (98) 8/28/2014 2014 (92) 8/28/2014 2013 Property City State Family Dollar Arlington Family Dollar Arlington Family Dollar Avinger TX TX TX Family Dollar Balch Springs TX Family Dollar Beaumont Family Dollar Beaumont Family Dollar Beaumont Family Dollar Blooming Grove Family Dollar Brazoria Family Dollar Broaddus Family Dollar Caldwell Family Dollar Centerville Family Dollar Chireno Family Dollar Clarendon TX TX TX TX TX TX TX TX TX TX Family Dollar Cockrell Hill TX Family Dollar Converse Family Dollar Dallas Family Dollar Dickinson Family Dollar Donna Family Dollar Eagle Lake Family Dollar Etoile Family Dollar Floydada Family Dollar Fort Worth Family Dollar Fort Worth Family Dollar Houston Family Dollar Houston Family Dollar Houston Family Dollar Houston Family Dollar Houston Family Dollar Houston Family Dollar Houston Family Dollar Industry TX TX TX TX TX TX TX TX TX TX TX TX TX TX TX TX TX Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — 654 — — — — — — — 970 409 627 681 — — — — — — — 886 — — — 911 300 425 40 318 215 235 225 70 216 75 138 226 50 83 369 148 292 182 194 100 45 36 276 350 174 297 565 138 128 277 920 1,355 — 190 — — 761 — 1,511 810 806 753 966 — 552 679 943 749 1,156 469 676 876 855 566 850 681 935 — 696 1,081 1,223 1,052 769 1,144 95 — F-142 1,058 1,206 — 1,209 — — — — — 922 1 — — — — — — — — 10 — — — 1,015 — — — — — — — 902 1,358 1,631 801 1,527 1,726 1,045 1,031 823 1,182 997 691 905 993 832 (57) 12/4/2015 1995 — 2/13/2015 2014 (180) 10/22/2012 2012 (60) 4/10/2015 2015 (215) 2/7/2014 2003 (126) 2/7/2014 2003 (124) 2/7/2014 2003 (79) 8/28/2014 2014 (149) 2/7/2014 2002 (102) 2/6/2015 1995 (143) 5/29/2012 2012 (125) 9/10/2013 2013 (214) 12/10/2012 2012 (138) 9/17/2013 2013 1,525 (182) 2/7/2014 2002 617 968 1,058 1,049 676 895 717 1,211 1,365 870 1,378 1,788 1,190 897 1,421 1,450 1,092 (75) 2/7/2014 2003 (111) 2/7/2014 2004 (137) 2/7/2014 2010 (89) 8/28/2014 2013 (142) 7/6/2012 2012 (161) 8/6/2013 2013 (192) 12/30/2011 2010 (58) 8/21/2015 1995 (39) 11/3/2014 2015 (145) 4/26/2013 1995 (167) 2/7/2014 2002 (193) 2/7/2014 2009 (161) 2/7/2014 2002 (110) 2/7/2014 2002 (176) 2/7/2014 2002 (26) 2/7/2014 1981 (65) 1/5/2015 2014 Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Family Dollar Jacksonville Family Dollar Kerens Family Dollar La Pryor Family Dollar Leander Family Dollar Lovelady Family Dollar Lufkin Family Dollar Marshall Family Dollar Mcallen Family Dollar Mcallen Family Dollar Mesquite Family Dollar Mesquite Family Dollar Mesquite Family Dollar Mexia Family Dollar Noonday Family Dollar Oakhurst Family Dollar Oakwood Family Dollar Ore City Family Dollar Palestine Family Dollar Pharr Family Dollar Plano Family Dollar Port Arthur TX TX TX TX TX TX TX TX TX TX TX TX TX TX TX TX TX TX TX TX TX Family Dollar Raymondville TX Family Dollar Refugio Family Dollar Rio Grande Family Dollar Robstown Family Dollar Royse City Family Dollar Sabinal Family Dollar San Angelo Family Dollar San Antonio Family Dollar San Antonio Family Dollar San Antonio Family Dollar San Antonio TX TX TX TX TX TX TX TX TX TX — 365 — 557 — 1,153 — — 857 — — — — 625 — — — 671 969 — 1,044 542 — — 550 972 — 891 800 864 598 506 195 73 74 355 82 198 85 445 219 426 1,414 1,460 112 103 36 133 27 120 219 468 178 117 110 133 44 411 35 232 198 299 260 211 1,003 658 817 489 740 1,600 662 896 1,093 — — — 495 895 683 752 744 914 1,253 869 1,452 707 982 1,284 852 1,078 952 1,118 1,018 1,039 653 567 F-143 — — — — — — — — — 1,146 (8) (184) — — — — — — — — — — — — — — — — — — — — 1,198 (163) 3/21/2014 2014 731 891 844 822 1,798 747 1,341 1,312 1,572 1,406 1,276 607 998 719 885 771 1,034 1,472 1,337 1,630 824 1,092 1,417 896 1,489 987 1,350 1,216 1,338 913 778 (180) 2/29/2012 2011 (84) 8/28/2014 2013 (80) 2/7/2014 2004 (158) 3/27/2013 1995 (246) 2/7/2014 2004 (107) 2/7/2014 2001 (92) 8/28/2014 2013 (170) 2/7/2014 2004 (80) 5/29/2015 1995 (70) 9/1/2015 2015 (75) 7/9/2015 2015 (81) 2/7/2014 2000 (139) 2/7/2014 2004 (155) 12/12/2012 2012 (132) 11/20/2013 2013 (77) 8/28/2014 2013 (145) 2/7/2014 2000 (196) 2/7/2014 2002 (165) 8/1/2013 2013 (222) 2/7/2014 2005 (111) 2/7/2014 2002 (99) 8/28/2014 2013 (199) 2/7/2014 2003 (127) 2/7/2014 2003 (170) 2/7/2014 2002 (96) 8/28/2014 2013 (177) 2/7/2014 2011 (159) 2/7/2014 2002 (162) 2/7/2014 2004 (104) 2/7/2014 2004 (90) 2/7/2014 2004 Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Family Dollar San Antonio Family Dollar San Antonio Family Dollar San Benito Family Dollar San Diego Family Dollar Seadrift Family Dollar Somerville Family Dollar Sonora Family Dollar Tyler Family Dollar Victoria Family Dollar Waco Family Dollar Weatherford Family Dollar Beaver Family Dollar Bristol Family Dollar Gretna Family Dollar Hopewell Family Dollar Petersburg Family Dollar Stuart Family Dollar Wirtz Family Dollar Green Bay Family Dollar Markesan Family Dollar Mayville Family Dollar Milwaukee Family Dollar Thorp Family Dollar Webster Family Dollar Alderson Family Dollar Kemmerer Family Dollar Mountain View Family Dollar Torrington TX TX TX TX TX TX TX TX TX TX TX UT VA VA VA VA VA VA WI WI WI WI WI WI WV WY WY WY Family Fare Supermarket Battle Creek MI Famous Dave's Independence MO 728 1,143 598 602 — — — 416 — 440 — 646 608 — — 948 — — — — — 970 — — — — — — — — 214 117 132 55 51 131 49 132 441 125 218 107 104 131 430 142 204 148 304 92 128 161 90 43 166 45 44 72 1,393 620 911 1,619 772 855 832 743 548 554 144 544 — — — — — — — — — — 1,057 (5) 913 837 744 987 1,209 750 919 1,072 831 1,023 1,397 810 808 663 853 838 645 7,950 422 — — — — — — — — — — — — — — — — — — — 15 — 1,125 1,736 904 910 883 874 597 686 585 669 1,270 1,020 941 875 1,417 1,351 954 1,067 1,376 923 1,151 1,558 900 851 829 898 882 717 9,343 1,042 (142) 2/7/2014 2004 (251) 2/7/2014 2004 (121) 2/7/2014 2004 (133) 2/7/2014 2004 (85) 8/28/2014 2013 (169) 12/31/2012 1995 (68) 8/28/2014 2001 (86) 2/7/2014 2003 (28) 2/7/2014 2003 (86) 2/7/2014 2001 (127) 10/10/2014 2014 (144) 2/7/2014 2007 (138) 2/7/2014 1978 (145) 7/2/2013 2012 (165) 2/26/2014 2014 (199) 2/7/2014 2003 (60) 4/18/2014 2013 (95) 8/28/2014 2013 (171) 2/7/2014 2011 (142) 12/12/2013 2013 (169) 2/26/2014 2014 (213) 2/7/2014 2003 (154) 8/30/2013 2013 (157) 7/11/2013 2013 (129) 7/11/2013 2012 (186) 2/22/2013 2013 (155) 9/13/2013 2013 (131) 5/9/2013 1995 (1,273) 2/7/2014 2010 (84) 6/27/2013 1995 17,787 (1,316) 11/5/2013 1982 52,495 (4,329) 11/5/2013 1982 Farmers Insurance Simi Valley CA 25,620 5,158 12,614 Farmers Insurance Mercer Island WA — 24,285 28,210 F-144 Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Fazoli's Carmel 949 1,301 7,917 (95) 7/31/2013 1986 (155) 6/27/2013 2000 (1,740) 3/15/2013 2007 15,347 (1,579) 6/25/2014 2004 2,076 3,084 (540) 10/17/2012 2011 (699) 11/9/2012 2006 32,986 (7,666) 3/20/2012 2007 1,592 2,277 5,506 3,034 (302) 7/26/2013 2001 (316) 4/18/2013 1986 (807) 10/30/2012 2012 (667) 3/22/2013 2006 16,702 (2,014) 2/7/2014 2008 1,474 5,483 3,326 7,149 4,896 2,280 4,300 3,501 6,518 8,986 1,246 9,744 9,196 6,028 (313) 5/31/2012 2003 (683) 9/28/2012 2012 (751) 5/31/2012 1998 (1,085) 3/16/2012 2012 (545) 2/7/2014 2008 (556) 10/30/2012 2012 (1,069) 9/28/2012 2012 (617) 10/11/2013 2013 (889) 2/7/2014 2009 (1,992) 6/14/2012 2012 (248) 5/31/2013 2003 (2,084) 11/30/2012 2012 (845) 9/30/2014 2007 (505) 2/7/2014 2008 FedEx FedEx FedEx FedEx FedEx FedEx FedEx FedEx FedEx FedEx FedEx FedEx FedEx FedEx FedEx FedEx FedEx FedEx FedEx FedEx FedEx FedEx FedEx FedEx FedEx FedEx FedEx FedEx FedEx FedEx FedEx IN AL AR AZ AZ CA CO FL IA IA IA IL IL IL IN IN IN Homewood Lowell Tempe Yuma Chico Commerce City Melbourne Des Moines Ottumwa Waterloo Effingham Kankakee Quincy Evansville Kokomo Lafayette Independence KS Hazard London KY KY Bossier City LA Roseville Columbia Mccomb Butte Greenville Belmont Wendover Blauvelt Marcy MN MO MS MT NC NH NV NY NY — — — 133 — — 206 — 183 — — 176 2,552 2,749 1,433 1,361 2,882 1,103 2,101 3,011 2,661 — 3,541 3,422 4,128 2,166 4,085 3,151 6,223 7,189 1,121 8,282 7,794 — — — — — — — — — 3,268 2,212 — — — — 427 522 396 522 779 7,521 2,914 12,300 1,296 — — 308 2,076 2,776 20,394 6,556 26,224 6,905 1,875 14,827 — 1,318 1,658 1,867 159 733 205 152 — 1,514 — 2,296 2,187 1,406 2,625 — — 195 371 665 186 768 114 215 350 295 6,073 1,462 — — — — 1,786 — 1,402 548 403 363 265 262 Grand Rapids MI 4,800 1,797 Port Huron MI — 125 7,653 2,763 10,819 (2,546) 9/27/2011 2001 6,903 2,386 1,483 — — — — — 7,266 2,651 1,745 (2,053) 2/22/2012 2006 (731) 12/29/2011 1991 (351) 2/25/2013 2012 41,199 (7,691) 4/5/2012 2012 6,134 (1,046) 9/5/2014 2006 26,100 14,420 26,779 — 339 5,795 F-145 Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State — 4,215 14,555 Parkersburg WV 2,379 3,671 FedEx FedEx FedEx FedEx FedEx FedEx FedEx FedEx FedEx FedEx FedEx FedEx FedEx FedEx Plattsburg Lebanon Northwood Tulsa Tulsa Tinicum Rapid City Blountville Humboldt Bryan Omak Wenatchee Menomonee Falls NY OH OH OK OK PA SD TN TN TX WA WA WI Fire Mountain Buffet Fire Mountain Buffet First Bank Fleming's Steakhouse Flint Energy Technologies Summerville SC Charleston WV Pinellas Park FL Englewood Rhome CO TX Floor & Decor McDonough GA Folsom Gateway II Folsom Food Lion Moyock Forum Energy Technology Forum Energy Technology Forum Energy Technology Guthrie Gainesville Gainesville Fresenius Medical Care Fairhope Fresenius Medical Care Foley Fresenius Medical Care Mobile Fresenius Medical Care Defuniak Springs Fresenius Medical Care Aurora Fresenius Medical Care Chicago Fresenius Medical Care Waukegan CA NC OK TX TX AL AL AL FL IL IL IL 1,476 18,054 2,741 4,584 2,614 801 6,034 1,492 — 1,422 1,023 1,630 252 266 2,410 — — — 1,868 3,700 2,930 — — — — — — 674 458 — 305 562 239 193 245 243 630 1,152 284 1,859 3,982 8,452 5,497 8,695 32,180 5,056 4,543 4,763 1,425 2,393 — — 15 — 234 549 — — 41 — — — — 1,308 (1,241) 1,305 (1,228) 1,470 3,055 1,752 7,711 4 — — — 4,783 9,944 6,186 9,153 (616) 2/7/2014 2008 (1,836) 8/26/2013 2013 (733) 2/7/2014 1998 (2,586) 2/22/2012 2008 19,764 (3,286) 3/31/2014 1999 32,729 (6,669) 8/15/2013 2013 7,630 5,618 4,782 6,226 1,677 2,659 (833) 5/8/2015 2007 (1,504) 2/3/2012 2009 (1,236) 7/11/2012 2008 (1,007) 6/15/2012 1995 (373) 9/27/2012 2012 (627) 9/27/2012 1995 18,770 (613) 2/18/2016 2015 3,864 (961) 9/20/2012 2012 312 320 2,104 4,207 2,036 9,570 (20) 1/8/2014 1997 (25) 1/8/2014 2000 (253) 10/1/2013 1980 (533) 2/7/2014 2004 (198) 9/19/2014 2014 (10) 12/13/2016 2015 21,600 10,314 27,983 141 38,438 (4,063) 2/7/2014 2006 — — — — — — — — 2,294 — — 1,269 393 123 158 — 287 278 115 287 588 94 2,950 1,305 6,019 — 2,035 2,580 2,505 2,180 2,584 1,764 1,792 F-146 — — — — — — — — 15 — 61 4,219 1,698 6,142 158 2,035 2,867 2,783 2,295 2,886 2,352 1,947 (512) 2/7/2014 1999 (159) 6/25/2014 1979 (698) 6/25/2014 2008 — 6/25/2014 1995 (331) 7/8/2013 2006 (419) 7/8/2013 2009 (407) 7/8/2013 2009 (354) 7/8/2013 2008 (540) 7/13/2012 1996 (370) 7/31/2012 1960 (380) 7/31/2012 1980 Property Fresenius Medical Care Fresenius Medical Care City Peru State IN Bossier City LA Fresenius Medical Care Caro Fresenius Medical Care Jackson Fresenius Medical Care Albemarle Fresenius Medical Care Angiers Fresenius Medical Care Asheboro Fresenius Medical Care Clinton Fresenius Medical Care Fairmont Fresenius Medical Care Fresenius Medical Care Fresenius Medical Care Fresenius Medical Care Fresenius Medical Care Fresenius Medical Care Fresenius Medical Care Fayetteville Fayetteville Fayetteville Lumberton Pembroke Red Springs Roseboro Fresenius Medical Care St. Pauls Fresenius Medical Care Taylorsville Fresenius Medical Care Warsaw Fresenius Medical Care Kings Mills Fresenius Medical Care Dallas MI MI NC NC NC NC NC NC NC NC NC NC NC NC NC NC NC OH TX Longmont CO Front Range Community College Front Range Community College Furr's Longmont Garland Gainsville Fuel Cleburne Gander Mountain Houston Garden Ridge Stockbridge Gastro Pub Tulsa GE Aviation Auburn GE Engine Winfield General Electric Longmont General Mills Geneva CO TX TX TX GA OK AL KS CO IL Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — 1,948 — — 2,373 — — — — — — — — — — — — — — — — — — — — 69 120 92 137 139 203 323 139 201 420 134 178 117 81 101 74 73 275 75 399 377 407 1,150 1,529 70 2,640 2,057 1,305 682 1,744 2,603 1,253 1,152 2,903 2,655 1,819 2,379 2,551 3,379 2,216 1,547 1,913 1,404 1,389 1,099 1,428 598 1,132 2,428 9,067 3,715 — 10,559 8,967 — — — — — — — — — — — — — — — — — — — 6 (42) 13 531 — — — — 1,374 802 1,836 2,740 1,392 1,355 3,226 2,794 2,020 2,799 2,685 3,557 2,333 1,628 2,014 1,478 1,462 1,374 1,503 1,003 1,467 (279) 6/27/2012 1982 (127) 1/30/2013 2008 (372) 6/5/2012 1995 (556) 6/5/2012 1995 (218) 4/30/2013 2008 (201) 4/30/2013 2012 (506) 4/30/2013 2012 (441) 6/28/2013 1995 (302) 6/28/2013 2002 (396) 6/28/2013 1995 (425) 6/28/2013 2004 (562) 6/28/2013 1999 (369) 6/28/2013 1986 (257) 6/28/2013 2009 (318) 6/28/2013 2000 (234) 6/28/2013 2010 (231) 6/28/2013 2008 (191) 4/30/2013 2011 (277) 11/13/2012 2003 (127) 6/5/2012 1995 (195) 2/28/2013 1958 2,848 (449) 1/8/2014 1987 10,748 5,244 70 (1,686) 1/8/2014 (754) 6/27/2013 — 6/25/2014 1988 2008 2009 13,199 (1,561) 5/19/2014 2004 11,024 (1,410) 2/7/2014 1998 28,425 1,253 70,274 1,869 73,396 (10,557) 11/5/2013 1995 24,133 1,627 30,920 — — 1,078 1,402 5,087 15,640 16,555 7,457 22,371 — — 827 — 32,547 (6,728) 11/21/2012 1995 6,165 (2,322) 5/6/2014 1951 17,869 (2,981) 1/8/2014 1993 29,828 (6,311) 5/23/2012 1998 F-147 Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State General Mills Fort Wayne 2,533 48,130 9,313 (4,561) 3,057 4,294 1,628 — (4) — 3,176 (1,337) Franklin Park IL 4,561 IN AL Mobile Springerville AZ Craig Cocoa Stuart Grangeville CO FL FL ID Springfield MO Freeport Plattsburgh Warren Ponce Austin Fort Worth Gloucester NY NY PA PR TX TX VA General Service Administration General Service Administration General Service Administration General Service Administration General Service Administration General Service Administration General Service Administration General Service Administration General Service Administration General Service Administration General Service Administration General Service Administration General Service Administration General Service Administration Genlyte Thomas Group, LLC. Giant Eagle Gahanna Giant Eagle Lancaster Glen's Market Manistee Globe Energy Services Globe Energy Services Globe Energy Services Globe Energy Services Globe Energy Services Globe Energy Services Globe Energy Services Globe Energy Services Globe Energy Services Globe Energy Services Globe Energy Services Hobbs Big Springs Levelland Midland Midland Monahans Odessa Odessa San Angelo Snyder Snyder GM Financial Arlington GoFrac, LLC Weatherford OH OH MI NM TX TX TX TX TX TX TX TX TX TX TX TX — — — — 500 — 2,100 — — — — — — — — — — — — — — — — — — — — — — 268 148 129 253 900 317 131 843 508 341 1,780 1,570 477 287 958 3,549 2,210 294 358 426 42 1,063 1,013 50 104 500 821 466 174 5,095 2,810 1,159 1,435 3,600 6,023 2,489 3,372 4,572 3,114 16,736 15,649 6,694 1,129 599 1,887 528 968 538 1,259 3,891 1,658 588 1,189 — 49 (572) 16 15 6 31 — 1 — — — — — — — — — — — — — — — — — 50,663 (12,355) 10/18/2012 2012 5,412 2,386 1,304 1,703 4,506 6,371 2,620 4,216 5,080 3,455 6,532 4,627 4,767 1,915 2,797 (1,275) 6/19/2012 1995 (88) 7/2/2012 2006 (321) 12/30/2011 1995 (399) 12/13/2011 1995 (949) 3/5/2012 2011 (1,587) 3/5/2012 2007 (633) 5/15/2012 2011 (919) 1/10/2012 1995 (1,142) 6/19/2012 2008 (780) 6/19/2012 2008 (189) 11/5/2013 1995 (651) 11/5/2013 2005 (1,091) 5/9/2012 2010 (407) 6/20/2012 1995 (65) 3/28/2014 1969 20,285 (2,269) 2/7/2014 2002 17,859 (2,063) 2/7/2014 2008 6,988 1,487 1,025 1,929 1,591 1,981 588 1,363 4,391 2,479 1,054 1,363 (1,008) 2/7/2014 2009 (153) 6/12/2014 2013 (84) 6/25/2014 2012 (253) 6/25/2014 1997 (74) 6/12/2014 2009 (120) 6/12/2014 2010 (73) 6/12/2014 2011 (139) 6/25/2014 1963 (532) 6/12/2014 1963 (203) 6/12/2014 2012 (86) 6/12/2014 2005 (136) 6/12/2014 1975 43,454 (6,158) 11/5/2013 1998 23,628 7,901 35,553 — 102 3,386 (2,912) 576 (32) 6/12/2014 2011 F-148 Property City State Golden Corral Gilbert Golden Corral Goodyear Golden Corral Surprise Golden Corral Bakersfield Golden Corral Palatka Golden Corral Albany Golden Corral Brunswick AZ AZ AZ CA FL GA GA Golden Corral Council Bluffs IA Golden Corral Clarksville Golden Corral Evansville Golden Corral Kokomo Golden Corral Richmond Golden Corral Wichita Golden Corral Henderson Golden Corral Louisville IN IN IN IN KS KY KY Golden Corral Independence MO Golden Corral Flowood Golden Corral Aberdeen Golden Corral Burlington Golden Corral Hickory Golden Corral Bellevue Golden Corral Lincoln MS NC NC NC NE NE Golden Corral Farmington NM Golden Corral Roswell Golden Corral Akron NM OH Golden Corral Beavercreek OH Golden Corral Canton Golden Corral Cincinnati Golden Corral Cleveland Golden Corral Columbus Golden Corral Dayton Golden Corral Dayton OH OH OH OH OH OH Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 871 686 1,258 2,664 853 460 390 1,140 1,061 670 780 728 560 600 1,020 1,425 680 690 840 260 520 300 270 203 640 713 647 694 1,109 770 579 774 2,910 1,939 4,068 2,078 1,048 1,863 2,093 1,460 1,344 2,707 2,107 723 1,306 1,586 1,173 2,437 2,730 1,566 2,319 2,658 1,433 2,930 — — — — (471) — — — — — — — — — — — — — — — — — 3,174 (2,024) — — — — — — — — — 600 2,133 1,858 2,135 2,066 2,315 2,476 1,429 2,766 F-149 3,781 2,625 5,326 4,742 1,430 2,323 2,483 2,600 2,405 3,377 2,887 1,451 1,866 2,186 2,193 3,862 3,410 2,256 3,159 2,918 1,953 3,230 1,420 803 2,773 2,571 2,782 2,760 3,424 3,246 2,008 3,540 (591) 6/27/2013 2006 (394) 6/27/2013 2006 (826) 6/27/2013 2007 (396) 2/7/2014 2011 (72) 6/27/2013 1997 (369) 6/27/2013 1995 (415) 6/27/2013 1995 (290) 6/27/2013 1995 (296) 2/7/2014 2002 (537) 6/27/2013 1995 (418) 6/27/2013 1995 (137) 2/7/2014 2002 (238) 7/31/2013 2000 (315) 6/27/2013 1995 (205) 2/7/2014 2001 (426) 2/7/2014 2010 (541) 6/27/2013 1995 (310) 6/27/2013 1995 (460) 6/27/2013 1995 (527) 6/27/2013 1995 (284) 6/27/2013 1995 (581) 6/27/2013 1995 (44) 6/27/2013 1995 (122) 6/27/2013 2000 (325) 2/7/2014 2003 (272) 2/7/2014 2000 (345) 2/7/2014 2002 (329) 2/7/2014 1999 (343) 2/7/2014 2004 (491) 6/27/2013 1995 (229) 2/7/2014 2000 (433) 2/7/2014 2002 Property City State Encumbrances at December 31, 2016 Initial Costs (1) Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Buildings, Fixtures and Improvements Accumulated Depreciation (3) (5) Date Acquired Date of Construction Land 1,167 859 926 947 616 619 838 487 1,175 345 280 1,647 320 800 596 1,265 1,147 644 3,342 758 750 1,661 534 1,085 — — — — — — — — — — — — — — — — — — — — — — — — 1,599 1,135 1,859 1,061 2,412 1,142 3,333 2,030 1,708 2,107 3,890 849 2,130 1,937 1,788 1,718 2,447 1,702 1,207 3,031 2,276 6,565 2,516 1,915 Golden Corral Elyria Golden Corral Fairfield Golden Corral Grove City Golden Corral Northfield Golden Corral Ontario Golden Corral Springfield Golden Corral Toledo Golden Corral Zanesville OH OH OH OH OH OH OH OH Golden Corral Midwest City OK Golden Corral Norman Golden Corral Tulsa Golden Corral Monroeville Golden Corral Rock Hill Golden Corral Cookeville Golden Corral Baytown Golden Corral College Station Golden Corral Houston Golden Corral San Angelo Golden Corral Spring Golden Corral Texarkana Golden Corral Bristol OK OK PA SC TN TX TX TX TX TX TX VA Gold's Gym Broken Arrow OK Goodyear Cumming Goodyear Cumming Goodyear Mcdonough Goodyear Stockbridge Goodyear Dekalb GA GA GA GA IL 11,373 1,797 21,264 13,845 1,222 32,119 20,767 4,476 44,516 Goodyear Lockbourne OH 13,548 3,107 28,868 Goodyear York Goodyear Columbia PA SC Goodyear Corpus Christi TX 23,536 1,980 53,396 — — 656 753 2,077 1,737 Goodyear Terrell TX 15,823 2,516 34,804 F-150 — — — — — — — — (983) — — — — — — — (64) — — — — — — — — — — — — — — — 2,766 1,994 2,785 2,008 3,028 1,761 4,171 2,517 1,900 2,452 4,170 2,496 2,450 2,737 2,384 2,983 3,530 2,346 4,549 3,789 3,026 8,226 3,050 3,000 (241) 2/7/2014 2004 (178) 2/7/2014 1999 (282) 2/7/2014 2007 (156) 2/7/2014 2004 (384) 2/7/2014 2004 (168) 2/7/2014 2000 (493) 2/7/2014 2004 (412) 6/27/2013 2002 (103) 6/27/2013 1991 (428) 6/27/2013 1994 (771) 6/27/2013 1995 (97) 2/7/2014 1982 (422) 6/27/2013 1995 (384) 6/27/2013 1995 (326) 7/31/2013 1998 (349) 6/27/2013 1990 (497) 6/27/2013 1995 (281) 2/7/2014 2012 (246) 2/7/2014 2011 (553) 7/31/2013 2001 (451) 6/27/2013 1995 (1,079) 2/7/2014 2009 (364) 2/7/2014 2010 (294) 2/7/2014 2010 23,061 (3,885) 1/8/2014 1995 33,341 (6,067) 1/8/2014 1995 48,992 (8,404) 1/8/2014 1999 31,975 (5,220) 1/8/2014 1998 55,376 (9,541) 1/8/2014 2001 2,733 2,490 (306) 2/7/2014 2010 (250) 2/7/2014 2008 37,320 (6,561) 1/8/2014 1998 Property City State Grandy's Ardmore Grandy's Moore OK OK Grandy's Oklahoma City OK Grandy's Oklahoma City OK Grandy's Arlington Grandy's Carrollton Grandy's Carrollton Grandy's Grandy's Dallas Dallas Grandy's Fort Worth Grandy's Fort Worth Grandy's Garland Grandy's Garland Grandy's Greenville Grandy's Irving Grandy's Lancaster Grandy's Mesquite Grandy's Plano Greene's Energy Group Habanero's Mexican Grill Broussard Hueytown Hanesbrands Rural Hall Hanesbrands Rural Hall Hardee's Morrilton Hardee's Jacksonville Hardee's Pace Hardee's Williston Hardee's Bremen Hardee's Canton TX TX TX TX TX TX TX TX TX TX TX TX TX TX LA AL NC NC AR FL FL FL GA GA Hardee's Mount Vernon IA Hardee's Indian Trail Hardee's Old Fort Hardee's Sparta NC NC NC Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — 454 320 260 320 734 773 847 725 357 777 811 623 859 847 871 780 871 871 455 60 — 428 380 289 — — — — — — — — — — — — — — 6,022 639 — — — — — — — — — — — — — — — — — — — — 454 748 640 609 734 773 847 725 357 777 811 623 859 847 871 780 871 871 — 6/27/2013 1995 — 6/27/2013 1995 — 6/27/2013 1995 — 6/27/2013 1995 — 6/27/2013 1995 — 6/27/2013 1995 — 6/27/2013 1986 — 7/31/2013 1981 — 7/31/2013 1984 — 6/27/2013 1995 — 6/27/2013 1985 — 6/27/2013 1980 — 6/27/2013 1985 — 7/31/2013 1979 — 6/27/2013 1983 — 6/27/2013 1984 — 6/27/2013 1983 — 6/27/2013 1980 6,477 699 (598) 6/12/2014 1980 (127) 6/27/2013 1995 18,100 1,798 41,214 (50) 42,962 (5,407) 2/7/2014 1992 17,990 1,082 22,565 — — — — — — — — — — 175 875 419 395 129 488 320 777 300 372 937 583 435 553 518 539 480 553 904 346 F-151 — — — — — — — (6) — — — 23,647 (5,763) 12/21/2012 1989 1,112 1,458 854 948 647 1,027 794 1,330 1,204 718 (145) 3/28/2014 1986 (106) 7/31/2013 1993 (85) 6/27/2013 1991 (109) 6/27/2013 1992 (94) 7/31/2013 1980 (106) 6/27/2013 1983 (94) 6/27/2013 1987 (103) 6/27/2013 1992 (173) 6/27/2013 1995 (68) 6/27/2013 1983 Property City State Hardee's Akron Hardee's Jefferson Hardee's Minerva Hardee's Hardee's Seville Aiken Hardee's Chapin Hardee's Chester OH OH OH OH SC SC SC Hardee's Bloomingdale TN Hardee's Clinton Hardee's Crossville Hardee's Erwin Hardee's Morristown Hardee's Springfield Hardee's / Red Burrito Attalla Harley Davidson Round Rock Harps Grocery Cabot Harps Grocery Haskell Harps Grocery Hot Springs Harps Grocery Hot Springs Harps Grocery Searcy Harps Grocery West Fork TN TN TN TN TN AL TX AR AR AR AR AR AR Harps Grocery Poplar Bluff MO Harps Grocery Inola Harris Teeter Durham Hartford Insurance Santee Healthnow Buffalo Heritage Cove Center Gun Barrel City HH Gregg Joliet HH Gregg Merrillville OK NC CA NY TX IL IN HH Gregg Chesterfield MO HH Gregg North Fayette PA HH Gregg North Charleston SC Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — 207 242 214 151 220 380 586 270 390 300 346 353 343 220 1,688 270 499 592 839 705 635 572 130 1,910 3,239 483 363 321 454 450 741 563 844 893 689 406 431 515 896 9,563 4,664 3,281 4,353 4,486 4,159 4,708 2,991 3,387 — — 2,400 7,312 42,135 2,569 89,399 — — — — — — 241 1,834 511 1,537 1,990 2,193 383 1,585 4,768 4,123 2,700 4,636 F-152 — — — — — — — — — — — — — — — — — — — — — 4 — — 44 — — — — — — — 690 605 535 605 670 1,121 1,149 1,114 1,283 989 752 784 858 (88) 7/31/2013 1990 (66) 7/31/2013 1989 (59) 7/31/2013 1990 (83) 7/31/2013 1989 (86) 6/27/2013 1995 (142) 6/27/2013 1995 (75) 7/31/2013 1994 (162) 6/27/2013 1995 (171) 6/27/2013 1995 (132) 6/27/2013 1995 (80) 6/27/2013 1982 (79) 7/31/2013 1991 (94) 7/31/2013 1990 1,116 (172) 6/27/2013 1995 11,251 (1,968) 7/31/2013 2008 4,934 3,780 4,945 5,325 4,864 5,343 3,567 3,517 3,239 9,756 (734) 2/7/2014 2014 (508) 2/7/2014 2012 (670) 2/7/2014 2013 (658) 2/7/2014 2013 (620) 2/7/2014 2008 (705) 2/7/2014 2013 (215) 2/21/2014 2014 (500) 3/5/2014 2014 — 2/7/2014 2009 (1,556) 2/21/2014 1995 91,968 (10,292) 2/7/2014 2007 624 3,419 5,279 5,660 4,690 6,829 (75) 6/27/2013 2008 (308) 2/7/2014 2011 (773) 2/7/2014 2011 (671) 2/7/2014 2012 (387) 2/7/2014 1999 (761) 2/7/2014 2008 Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State IN NC TN UT AZ CA GA GA LA NV SC TX VA CA CA CA DE OH OH SD PA TX AL AL Hobby Lobby Avon Hobby Lobby Kannapolis Hobby Lobby Columbia Hobby Lobby Logan Home Depot Tucson Home Depot San Diego Home Depot Evans Home Depot Kennesaw Home Depot Slidell Home Depot Las Vegas Home Depot Columbia Home Depot Odessa Home Depot Winchester Hy-Vee Vermillion IFM Efectors Malvern Home Town Buffet Home Town Buffet Home Town Buffet Home Town Buffet Home Town Buffet Huntington National Bank Huntington National Bank Igloo IHOP IHOP IHOP IHOP IHOP IHOP IHOP IHOP IHOP Union Gap WA Oxnard Rialto Santa Maria Newark Conneaut Jefferson Katy Auburn Homewood Montgomery AL Castle Rock Greeley Pueblo CO CO CO Bossier City LA Natchitoches LA Roseville MI — — — — — 1,439 1,929 951 2,683 6,251 6,650 12,518 — — 4,583 1,809 1,996 5,131 — — — — — — — — — — — 2,922 — — — — — — — — — — — 7,907 2,911 1,599 3,955 195 265 191 177 253 205 255 409 1,816 5,617 1,111 610 941 320 120 330 541 750 340 5,855 4,227 2,467 3,079 — — — 12,331 — — 15,463 — 18,405 — — 38 — — — — — — — — — 1 1,044 (901) 1,261 (1,046) 1,006 1,129 (763) (739) 1,320 (1,223) 477 765 3,684 6 7 — 7,294 6,156 3,456 5,762 6,251 12,518 4,583 (838) 2/7/2014 2007 (630) 2/7/2014 2004 (417) 2/26/2014 1986 (498) 2/7/2014 2008 — — — 2/7/2014 2005 2/7/2014 1998 2/7/2014 2009 14,140 (1,634) 2/7/2014 2012 5,131 7,907 — — 2/7/2014 1998 2/7/2014 1998 18,374 (4,658) 11/9/2009 2009 1,599 — 2/7/2014 1998 22,361 (3,119) 2/7/2014 2008 338 480 434 567 350 688 1,027 4,093 (21) 1/8/2014 1998 (46) 1/8/2014 1998 (23) 1/8/2014 2002 (41) 1/8/2014 1983 (32) 1/8/2014 2002 (83) 10/1/2013 1971 (132) 10/1/2013 1963 (960) 4/8/2013 1986 — 9,747 11,563 (498) 8/27/2014 2014 — — — — — — — — — — 44,087 (5,110) 2/7/2014 2004 2,044 2,372 941 2,654 1,658 1,919 1,883 839 1,411 (190) 6/27/2013 1998 (349) 6/27/2013 1995 — 6/27/2013 1998 (463) 6/27/2013 1995 (305) 6/27/2013 1995 (315) 6/27/2013 1995 (272) 6/27/2013 1998 (18) 6/27/2013 1995 (212) 6/27/2013 1995 38,470 933 1,762 — 2,334 1,538 1,589 1,342 89 1,071 F-153 Property City IHOP IHOP IHOP IHOP IHOP IHOP IHOP IHOP IHOP IHOP IHOP IHOP IHOP IHOP IHOP State MI Warren Kansas City MO Southaven MS Greenville Clarksville Memphis SC TN TN Murfreesboro TN Baytown TX Corpus Christi TX Fort Worth Houston Killeen TX TX TX Lake Jackson TX Leon Valley TX Auburn Ingersoll Rand Annandale Ingram Micro Amherst Invensys Systems Foxboro Iron Mountain Columbus Iron Mountain Mohnton IRS Gateway Center Covington Irving Oil Belfast Irving Oil Bethel Irving Oil Boothbay Harbor Irving Oil Caribou Irving Oil Fort Kent Irving Oil Kennebunk Irving Oil Lincoln Irving Oil Orono Irving Oil Saco Irving Oil Skowhegan Irving Oil Conway WA NJ NY MA OH PA KY ME ME ME ME ME ME ME ME ME ME NH Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 605 630 350 610 530 750 600 698 1,176 560 760 380 370 650 780 1,367 4,107 830 (531) 1,002 2,108 1,551 1,346 2,009 1,687 1,297 — 1,879 2,462 1,028 2,018 2,055 1,878 14,223 20,347 — — — — (809) — — — — — — — — — (90) — 904 1,632 2,458 2,161 1,876 1,950 2,287 1,995 1,176 2,439 3,222 1,408 2,388 2,705 2,658 (25) 6/27/2013 1996 (199) 6/27/2013 1995 (418) 6/27/2013 1995 (308) 6/27/2013 1995 (267) 6/27/2013 1995 (134) 6/27/2013 1995 (334) 6/27/2013 1995 (237) 7/31/2013 1998 — 7/31/2013 1995 (373) 6/27/2013 1995 (488) 6/27/2013 1995 (204) 6/27/2013 1995 (400) 6/27/2013 1995 (516) 6/27/2013 1995 (372) 6/27/2013 1995 15,500 (3,827) 4/30/2014 1999 24,454 (2,919) 6/25/2014 1986 11,784 — 27,888 39,672 (2,125) 6/27/2014 1965 405 197 3,642 1,261 6,152 — 5,308 6,349 (989) 9/28/2012 1954 (733) 7/2/2014 1979 3,120 80,689 1,278 85,087 (8,653) 6/5/2014 1994 339 182 413 187 358 469 360 228 619 541 173 698 331 550 404 352 541 360 272 222 492 525 F-154 — — — — — — — — — — — 1,037 (126) 2/7/2014 1997 513 963 591 710 (62) 2/7/2014 1990 (106) 2/7/2014 1993 (72) 2/7/2014 1990 (74) 2/7/2014 1973 1,010 (108) 2/7/2014 1980 720 500 841 1,033 698 (67) 2/7/2014 1994 (49) 2/7/2014 1984 (58) 2/7/2014 1995 (100) 2/7/2014 1988 (88) 2/7/2014 2004 Property City State Irving Oil Dover Irving Oil Rochester NH NH Irving Oil Dummerston VT Irving Oil Rutland Irving Oil Westminster Jack in the Box Avondale Jack in the Box Chandler Jack in the Box Folsom Jack in the Box Sacramento Jack in the Box West Sacramento Jack in the Box Burley Jack in the Box Belleville Jack in the Box Florissant Jack in the Box St. Louis Jack in the Box Salem Jack in the Box Tigard Jack in the Box Arlington Jack in the Box Arlington Jack in the Box Cleburne Jack in the Box Corinth Jack in the Box Farmers Branch Jack in the Box Fort Worth Jack in the Box Georgetown Jack in the Box Granbury VT VT AZ AZ CA CA CA ID IL MO MO OR OR TX TX TX TX TX TX TX TX Jack in the Box Grand Prairie TX Jack in the Box Grapevine Jack in the Box Gun Barrel City Jack in the Box Houston Jack in the Box Houston Jack in the Box Houston Jack in the Box Houston Jack in the Box Houston TX TX TX TX TX TX TX Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 380 290 185 249 108 110 450 280 476 590 240 200 502 420 580 620 420 420 291 400 460 490 600 380 600 470 300 460 390 330 410 450 717 747 353 220 437 2,237 1,447 2,423 1,110 1,710 1,430 966 1,515 1,494 1,301 1,361 1,325 1,365 1,647 1,416 1,640 1,702 1,508 1,449 1,856 1,344 961 1,437 1,172 1,845 1,621 1,396 F-155 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 1,097 1,037 538 469 545 2,347 1,897 2,703 1,586 2,300 1,670 1,166 2,017 1,914 1,881 1,981 1,745 1,785 1,938 1,816 2,100 2,192 2,108 1,829 2,456 1,814 1,261 1,897 1,562 2,175 2,031 1,846 (126) 2/7/2014 1988 (127) 2/7/2014 1970 (71) 2/7/2014 1993 (40) 2/7/2014 1984 (78) 2/7/2014 1990 (429) 6/27/2013 1995 (277) 6/27/2013 1995 (464) 6/27/2013 1995 (203) 7/31/2013 1991 (328) 6/27/2013 1995 (274) 6/27/2013 1995 (185) 6/27/2013 1995 (290) 6/27/2013 1995 (286) 6/27/2013 1995 (249) 6/27/2013 1995 (261) 6/27/2013 1995 (254) 6/27/2013 1995 (262) 6/27/2013 1995 (300) 7/31/2013 2000 (271) 6/27/2013 1995 (314) 6/27/2013 1995 (326) 6/27/2013 1995 (289) 6/27/2013 1995 (278) 6/27/2013 1995 (356) 6/27/2013 1995 (258) 6/27/2013 1995 (184) 6/27/2013 1995 (275) 6/27/2013 1995 (225) 6/27/2013 1995 (354) 6/27/2013 1995 (311) 6/27/2013 1995 (268) 6/27/2013 1995 Property City State Jack in the Box Hutchins Jack in the Box Lufkin Jack in the Box Lufkin Jack in the Box Mesquite TX TX TX TX Jack in the Box Missouri City TX Jack in the Box Nacogdoches TX Jack in the Box Orange Jack in the Box Port Arthur Jack in the Box San Antonio Jack in the Box San Antonio Jack in the Box San Antonio Jack in the Box Spring Jack in the Box Spring Jack in the Box Texas City Jack in the Box Tyler Jack in the Box Weatherford TX TX TX TX TX TX TX TX TX TX Jack in the Box Enumclaw WA Jeremiah's Italian Ice Winter Springs FL Jiffy Lube Houston Jo-Ann's Shakopee Joe's Crab Shack Houston John Deere Davenport Johnny Carinos Rogers Johnny Carinos Columbus Johnny Carinos Muncie Johnny Carinos Amarillo TX MN TX IA AR IN IN TX Johnny Carinos Grand Prairie TX Johnny Carinos Houston Johnny Carinos Midland Johnny Carinos San Angelo Johnson Controls Pinellas Park Katun Corp. Davenport TX TX TX FL IA Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 330 440 450 560 451 340 270 460 400 470 350 570 450 454 450 480 380 734 423 994 900 1,363 1,544 1,563 1,652 837 1,320 1,661 1,405 1,244 1,256 1,249 1,340 1,487 844 1,025 1,329 1,238 — 1,037 1,807 1,749 — — — — — — — — — — — — — — — — — — — — — 1,693 1,984 2,013 2,212 1,288 1,660 1,931 1,865 1,644 1,726 1,599 1,910 1,937 1,298 1,475 1,809 1,618 734 1,460 2,801 2,649 (261) 6/27/2013 1995 (296) 6/27/2013 1995 (300) 6/27/2013 1995 (317) 6/27/2013 1995 (153) 7/31/2013 1991 (253) 6/27/2013 1995 (318) 6/27/2013 1995 (269) 6/27/2013 1995 (238) 6/27/2013 1995 (241) 6/27/2013 1995 (239) 6/27/2013 1995 (257) 6/27/2013 1995 (285) 6/27/2013 1995 (166) 6/27/2013 1991 (197) 6/27/2013 1995 (255) 6/27/2013 1995 (237) 6/27/2013 1995 — 7/31/2013 1995 (129) 6/9/2014 2008 (260) 2/7/2014 2012 (347) 6/27/2013 1995 1,161 22,052 (14) 23,199 (6,220) 5/31/2012 2003 997 809 540 993 997 1,328 998 769 2,540 1,888 2,160 — — — 2,317 (1,848) 2,327 2,656 2,329 2,306 — — — — 3,537 2,697 2,700 1,462 3,324 3,984 3,327 3,075 (516) 6/27/2013 2001 (379) 8/30/2013 2004 (434) 8/30/2013 2003 (14) 7/31/2013 2001 (479) 7/31/2013 2001 (539) 6/27/2013 2002 (479) 7/31/2013 2000 (474) 7/31/2013 2005 16,200 4,538 23,842 (17,727) 10,653 (346) 11/5/2013 2001 — 454 7,485 — 7,939 (838) 5/6/2014 1993 F-156 Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Kentucky Fried Chicken Kentucky Fried Chicken Kentucky Fried Chicken Kentucky Fried Chicken Kentucky Fried Chicken Kentucky Fried Chicken Kentucky Fried Chicken Kentucky Fried Chicken Kentucky Fried Chicken Kentucky Fried Chicken Kentucky Fried Chicken Kentucky Fried Chicken Kentucky Fried Chicken Kentucky Fried Chicken Kentucky Fried Chicken Kentucky Fried Chicken Kentucky Fried Chicken Kentucky Fried Chicken Kentucky Fried Chicken Kentucky Fried Chicken Kentucky Fried Chicken Kentucky Fried Chicken / A&W Kentucky Fried Chicken / A&W Kentucky Fried Chicken / A&W Kentucky Fried Chicken / A&W Kentucky Fried Chicken / A&W Kentucky Fried Chicken / A&W Kentucky Fried Chicken / A&W Kentucky Fried Chicken / A&W Kentucky Fried Chicken / A&W Kentucky Fried Chicken / A&W Bloomington Charleston Decatur Mattoon Rockford Springfield Springfield Dolton Elmhurst Hazel Crest Homewood Matteson Oak Forest Westchester IL IL IL IL IL IL IL IL IL IL IL IL IL IL Crawfordsville IN Franklin Greenwood Deming Las Cruces Warren Appleton Granite City Allison Park IN IN NM NM OH PA WI IL PA Germantown WI Green Bay Milwaukee Milwaukee Milwaukee Milwaukee Milwaukee South Milwaukee WI WI WI WI WI WI WI Kentucky Fried Chicken New Kensington — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 576 282 276 113 201 267 212 167 242 153 660 399 185 238 159 205 339 220 270 426 324 350 102 246 368 208 396 281 89 197 138 197 1,466 1,514 1,619 1,019 1,142 1,068 1,203 946 969 1,376 1,541 2,259 1,047 952 1,068 1,375 1,405 691 498 640 487 874 1,083 683 913 1,022 773 795 750 975 924 695 F-157 — — — — — — — — — — — — — — — — — — — (421) (260) — — — — — — — — — — — 2,042 1,796 1,895 1,132 1,343 1,335 1,415 1,113 1,211 1,529 2,201 2,658 1,232 1,190 1,227 1,580 1,744 911 768 645 551 1,224 1,185 929 1,281 1,230 1,169 1,076 839 1,172 1,062 892 (288) 6/27/2013 2004 (297) 6/27/2013 2003 (318) 6/27/2013 2001 (186) 7/31/2013 1973 (208) 7/31/2013 1995 (195) 7/31/2013 1987 (219) 7/31/2013 1987 (173) 7/31/2013 1975 (177) 7/31/2013 1990 (251) 7/31/2013 1982 (281) 7/31/2013 1992 (412) 7/31/2013 1973 (191) 7/31/2013 1955 (174) 7/31/2013 1973 (210) 6/27/2013 1979 (270) 6/27/2013 1976 (276) 6/27/2013 1976 (133) 6/27/2013 1995 (95) 6/27/2013 1995 (13) 7/31/2013 1987 (11) 7/31/2013 1967 (167) 6/27/2013 1995 (213) 6/27/2013 1987 (134) 6/27/2013 1978 (179) 6/27/2013 1989 (201) 6/27/2013 1986 (152) 6/27/2013 1991 (156) 6/27/2013 1992 (147) 6/27/2013 1989 (191) 6/27/2013 1991 (181) 6/27/2013 1992 (136) 6/27/2013 1993 Property City State Kentucky Fried Chicken / A&W Kentucky Fried Chicken / A&W Ker's WingHouse Bar and Grill Ker's WingHouse Bar and Grill Wauwatosa West Bend Brandon Clearwater WI WI FL FL Kettle Restaurant San Antonio TX Key Bank Spencerport Key Bank Berea Kirklands Wilmington Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — 135 185 340 550 168 59 234 1,127 8,700 8,052 4,670 4,173 — — 7,705 — — — — 1,431 964 547 1,110 1,532 2,984 2,756 3,526 1,286 — — — — — — — — — — — — — — 1,268 — — — — — — — — — — — 195 348 615 705 654 627 206 1,112 1,326 1,061 7,891 — 3,109 5,009 10,399 6,932 14,561 5,842 3,423 7,321 7,788 6,279 6,250 7,574 7,691 5,794 6,742 5,715 6,165 6,073 7,782 7,642 1,147 811 F-158 — — — — — — 8 — — — — — — — — — — — — — — — — — — — — — — — — — 750 890 994 1,177 374 1,171 1,568 2,188 (121) 6/27/2013 1992 (138) 6/27/2013 1972 (130) 6/27/2013 1995 (124) 6/27/2013 1995 (38) 7/31/2013 1965 (211) 6/5/2013 1960 (229) 10/1/2013 1958 (165) 2/7/2014 2004 15,943 (1,144) 2/7/2014 1982 4,173 4,540 5,973 — 2/7/2014 2008 (452) 2/7/2014 2011 (651) 2/7/2014 2009 10,946 (2,770) 3/28/2013 2003 8,042 (899) 2/7/2014 2011 16,093 (1,790) 2/7/2014 2007 8,826 6,179 8,607 9,056 6,279 6,250 7,574 7,691 5,794 6,742 5,715 6,165 6,073 7,782 7,642 1,342 1,159 (808) 2/7/2014 2006 (22) 2/7/2014 2007 (979) 2/7/2014 2005 (1,013) 2/7/2014 2011 (979) 11/5/2013 1996 (975) 11/5/2013 1995 (1,182) 11/5/2013 1995 (1,200) 11/5/2013 1993 (904) 11/5/2013 1995 (1,052) 11/5/2013 1995 (891) 11/5/2013 1996 (962) 11/5/2013 1995 (947) 11/5/2013 1996 (1,214) 11/5/2013 1996 (1,192) 11/5/2013 1996 (220) 6/27/2013 1995 (212) 4/23/2013 1960 NY OH NC CA FL IA KS MI MI SC SC TX TX WI GA GA GA GA KY Monrovia Tavares Fort Dodge Salina Howell Saginaw Columbia Spartanburg Brownsville Mcallen Rice Lake Calhoun Lithonia Suwanee Suwanee Frankfort Georgetown KY Madisonville KY Murray Owensboro Franklin Knoxville Greenville Huntsville KY KY TN TN AL AL Kohl's Kohl's Kohl's Kohl's Kohl's Kohl's Kohl's Kohl's Kohl's Kohl's Kohl's Kroger Kroger Kroger Kroger Kroger Kroger Kroger Kroger Kroger Kroger Kroger Krystal Krystal Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Krystal Krystal Krystal Krystal Krystal Krystal Krystal Krystal Krystal Krystal Krystal Krystal Krystal Krystal Krystal Krystal Krystal Krystal Krystal Krystal Krystal Krystal Krystal Krystal Krystal Krystal Krystal Krystal Krystal Krystal Krystal Krystal Huntsville Huntsville AL AL Montgomery AL Montgomery AL Montgomery AL Montgomery AL Scottsboro Tuscaloosa Valley AL AL AL Vestavia Hills AL Jacksonville Orlando Orlando Plant City St. Augustine Albany Atlanta Augusta Columbus Decatur East Point Macon FL FL FL FL FL GA GA GA GA GA GA GA Milledgeville GA Snellville Corinth Gulfport Pearl Chattanooga Chattanooga Chattanooga Knoxville GA MS MS MS TN TN TN TN Lawrenceburg TN — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 352 305 259 560 303 502 20 206 297 342 574 372 669 355 411 309 166 365 622 94 221 325 261 466 279 215 426 336 186 440 369 304 654 712 1,036 829 562 613 1,157 1,165 694 513 574 372 446 533 411 721 664 851 934 533 664 759 609 466 652 861 638 784 328 659 246 709 F-159 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 1,006 1,017 1,295 1,389 865 1,115 1,177 1,371 991 855 1,148 744 1,115 888 822 1,030 830 1,216 1,556 627 885 (171) 4/23/2013 1971 (178) 6/10/2013 1985 (313) 9/21/2012 1964 (159) 6/27/2013 1995 (147) 4/23/2013 1962 (160) 4/23/2013 1962 (222) 6/27/2013 1995 (352) 9/21/2012 1976 (181) 4/23/2013 1979 (134) 4/23/2013 1995 (174) 9/21/2012 1990 (112) 9/21/2012 1994 (135) 9/21/2012 1995 (161) 9/21/2012 2012 (124) 9/21/2012 2012 (218) 9/21/2012 1962 (201) 9/21/2012 1973 (257) 9/21/2012 1979 (282) 9/21/2012 1977 (161) 9/21/2012 1965 (197) 10/26/2012 1984 1,084 (229) 9/21/2012 1962 870 932 931 1,076 1,064 1,120 514 1,099 615 1,013 (184) 9/21/2012 2011 (141) 9/21/2012 1981 (170) 4/23/2013 2007 (260) 9/21/2012 2011 (193) 9/21/2012 1976 (237) 9/21/2012 2010 (39) 6/27/2013 1995 (172) 4/23/2013 1983 (74) 9/21/2012 1970 (185) 4/23/2013 1980 Property City State Krystal Krystal Krystal Memphis Memphis TN TN Murfreesboro TN Kum & Go Bentonville Kum & Go Lowell Kum & Go Paragould Kum & Go Rogers Kum & Go Sherwood Kum & Go Fountain Kum & Go Monument Kum & Go Muscatine Kum & Go Ottumwa Kum & Go Sloan Kum & Go Story City Kum & Go Tipton Kum & Go Waukee Kum & Go West Branch Kum & Go Joplin Kum & Go Joplin Kum & Go Joplin Kum & Go Joplin Kum & Go Neosho Kum & Go Tioga Kum & Go Muskogee Kum & Go Muskogee Kum & Go Cheyenne Kum & Go Gillette L.A. Fitness Avondale L.A. Fitness Glendale L.A. Fitness Marana L.A. Fitness Highland L.A. Fitness Boynton AR AR AR AR AR CO CO IA IA IA IA IA IA IA MO MO MO MO MO ND OK OK WY WY AZ AZ AZ CA FL Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — 257 181 465 587 774 708 668 866 1,131 1,192 794 586 447 223 507 1,280 219 218 314 127 205 504 318 423 97 411 878 2,253 3,135 2,177 — 1,284 4,610 2,274 — 1,485 1,029 723 698 1,370 1,437 2,123 1,559 1,609 1,696 1,457 1,853 1,368 2,162 2,089 1,945 1,280 1,089 782 1,610 300 594 1,144 2,863 1,691 973 2,327 2,048 9,040 7,568 8,322 8,673 9,945 F-160 — — — (13) — — — — — — — — — — — — — — — — — — — — — — — — 20 — — — 1,286 904 1,163 1,944 2,211 2,831 2,227 2,475 2,827 2,649 2,647 1,954 2,609 2,312 2,452 2,560 1,308 1,000 1,924 427 799 1,648 3,181 2,114 1,070 2,738 2,926 (269) 4/23/2013 1975 (189) 4/23/2013 1972 (182) 4/23/2013 2008 (317) 11/20/2012 2009 (333) 11/20/2012 2009 (512) 9/28/2012 2012 (361) 11/20/2012 2008 (388) 9/28/2012 2012 (385) 12/24/2012 2012 (331) 12/24/2012 2012 (421) 12/27/2012 2012 (317) 11/20/2012 1998 (394) 2/7/2014 2008 (339) 2/7/2014 2006 (371) 2/7/2014 2008 (273) 3/28/2013 2012 (174) 2/7/2014 1997 (167) 2/11/2014 1987 (267) 2/11/2014 1984 (66) 2/11/2014 1973 (128) 2/11/2014 1986 (190) 2/11/2014 1997 (663) 11/8/2012 2012 (328) 7/22/2013 2013 (112) 9/30/2014 1999 (528) 12/27/2012 2012 (407) 6/28/2013 2013 11,293 (1,405) 2/7/2014 2006 9,765 9,606 (1,277) 2/7/2014 2005 (1,346) 2/7/2014 2011 10,947 (1,491) 2/7/2014 2009 11,430 (37) 11/22/2016 2005 Property City State L.A. Fitness Miami L.A. Fitness Broadview L.A. Fitness Oswego L.A. Fitness Carmel L.A. Fitness Indianapolis L.A. Fitness St. Clair Shores L.A. Fitness Oakdale L.A. Fitness Edmond L.A. Fitness Easton L.A. Fitness Dallas L.A. Fitness Denton L.A. Fitness Duncanville L.A. Fitness McKinney L.A. Fitness Spring FL IL IL IN IN MI MN OK PA TX TX TX TX TX Leeann Chin Blaine MN Leeann Chin Chanhassen MN Leeann Chin Golden Valley MN Lee's Famous Recipe Chicken Lee's Famous Recipe Chicken Lee's Famous Recipe Chicken Logan's Roadhouse Logan's Roadhouse Logan's Roadhouse Logan's Roadhouse Logan's Roadhouse Logan's Roadhouse Logan's Roadhouse Long John Silver's / A&W Long John Silver's / A&W Long John Silver's / A&W Long John Silver's / A&W Long John Silver's / A&W Florissant St. Ann St. Louis Huntsville Fayetteville Hattiesburg Owasso Clarksville Cleveland El Paso Merced Collinsville Fairview Heights Jacksonville Litchfield MO MO MO AL AR MS OK TN TN TX CA IL IL IL IL Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — 2,730 3,345 3,163 1,457 1,279 2,163 4,749 2,315 — — 962 938 8,671 8,763 8,749 9,562 8,970 6,787 8,315 6,916 10,600 4,712 2,629 10,413 — — — — — — — — — — 11,401 (33) 11/22/2016 2015 12,108 (1,380) 2/7/2014 2010 11,912 (1,435) 2/7/2014 2008 11,019 (1,490) 2/7/2014 2008 10,249 (1,398) 2/7/2014 2009 8,950 (28) 11/22/2016 1982 10,630 (1,351) 2/7/2014 2009 7,878 (972) 3/31/2014 2014 11,538 (1,659) 2/7/2014 1979 13,042 (1,542) 2/7/2014 2008 3,884 1,888 9,568 (6) 11,450 (1,458) 2/7/2014 2009 — — — — — — — — — — — — — — — — — — — — — 1,538 2,039 1,970 480 450 270 306 187 107 520 1,570 890 1,449 1,010 890 320 174 220 258 171 194 10,023 7,787 9,290 528 763 776 560 571 874 — — — — — — — — — 4,797 (1,363) 2,182 4,012 2,173 (953) (803) (568) 4,424 (1,264) 3,902 (1,225) 4,731 (1,558) — — — — — 695 940 525 431 996 F-161 11,561 (1,502) 2/7/2014 2007 9,826 (30) 11/22/2016 2005 11,260 (1,412) 2/7/2014 2006 1,008 1,213 1,046 866 758 981 3,954 2,799 4,099 3,054 4,170 3,567 3,493 869 1,160 783 602 (101) 6/27/2013 1995 (146) 6/27/2013 1995 (149) 6/27/2013 1995 (110) 6/27/2013 1984 (112) 6/27/2013 1984 (172) 6/27/2013 1984 (344) 6/27/2013 1995 (151) 6/27/2013 1995 (320) 6/27/2013 1995 (175) 7/31/2013 2006 (324) 6/27/2013 1995 (277) 6/27/2013 1995 (317) 6/27/2013 1995 (127) 7/31/2013 1982 (184) 6/27/2013 2006 (103) 6/27/2013 1976 (85) 6/27/2013 1978 1,190 (195) 6/27/2013 1986 Property City State Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Marion IL Mount Carmel IL Vandalia IL West Frankfort IL Wood River Garden City Hays Clovis Las Cruces Englewood Fairborn Penn Hills Austin Green Bay Ashtabula Tampa Dalton Jonesboro Burlington Florence IL KS KS NM NM OH OH PA TX WI OH FL OH AR IA KY — — — — — — — — — — — — — — — — — — — — 305 105 101 244 251 120 160 210 242 547 103 438 459 748 440 370 18 2,101 2,775 4,814 1,059 484 484 996 314 530 624 705 565 — 300 656 477 563 1,640 1,852 30 8,405 8,191 10,189 New Orleans LA 13,766 10,315 20,728 Sanford Windham ME ME Benton Harbor MI Kansas City MO Las Vegas NV 4,672 4,045 7,930 12,640 — — — 1,011 3,729 11,499 Ticonderoga NY 4,345 1,812 — — — — — Long John Silver's / A&W Long John Silver's / A&W Long John Silver's / A&W Long John Silver's / A&W Long John Silver's / A&W Long John Silver's / A&W Long John Silver's / A&W Long John Silver's / A&W Long John Silver's / A&W Long John Silver's / A&W Long John Silver's / A&W Long John Silver's / A&W Long John Silver's / A&W Long John Silver's / KFC Long John Silver's / Taco Bell LongHorn Steakhouse Los Tios Mexican Restaurant Lowe's Lowe's Lowe's Lowe's Lowe's Lowe's Lowe's Lowe's Lowe's Lowe's Lowe's Lowe's Lowe's West Carrollton Columbia Texas City Lube Stop Akron Lube Stop Akron OH SC TX OH OH 6,375 2,864 9,883 — — — — 5,485 2,313 79 135 — 9,253 287 761 F-162 — — — — — — — (377) (277) — — — — — — — — 85 1,364 (208) 6/27/2013 1983 589 585 (95) 6/27/2013 1977 (95) 6/27/2013 1976 1,240 (195) 6/27/2013 1977 565 650 784 538 530 547 403 1,094 936 1,311 2,080 2,222 48 (62) 6/27/2013 1975 (104) 6/27/2013 1978 (122) 6/27/2013 1994 (17) 6/27/2013 1995 (13) 7/31/2013 1975 — 6/27/2013 1974 (59) 6/27/2013 1976 (120) 7/31/2013 1993 (94) 6/27/2013 1993 (111) 6/27/2013 1978 (314) 6/27/2013 1995 (367) 6/27/2013 1995 (6) 6/27/2013 1990 10,591 (1,124) 5/19/2014 1994 760 11,726 (1,123) 2/7/2014 1996 — — — — — — — — — — — — 15,003 (1,393) 2/7/2014 1997 31,043 (3,233) 11/5/2013 2005 4,045 12,640 9,068 3,729 11,499 1,812 — — 2/7/2014 2009 6/3/2013 2006 (1,105) 3/17/2014 1994 — — — 2/7/2014 2009 2/7/2014 2002 2/7/2014 2009 12,747 (1,272) 2/7/2014 1994 5,485 — 2/7/2014 1994 11,566 (1,688) 5/19/2014 1995 366 896 (31) 9/2/2014 1988 (85) 9/2/2014 1995 7,851 206 Property City State Lube Stop Lube Stop Akron Bedford Heights Lube Stop Cleveland OH OH OH Lube Stop Fairview Park OH Lube Stop Lube Stop Lakewood Mayfield Heights Lube Stop Medina OH OH OH Lube Stop N. Barberton OH Lube Stop Painesville Lube Stop Parma Lube Stop Parma Lube Stop Seven Hills Lube Stop Solon OH OH OH OH OH Lube Stop South Euclid OH Lube Stop Stow Lube Stop Westlake Lube Stop Lumber Liquidators Willoughby Saginaw Macaroni Grill Flanders Macaroni Grill W. Windsor Mars Petcare Columbia Mattress Firm Daphne Mattress Firm Dothan Mattress Firm Rogers Mattress Firm Destin Mattress Firm Melbourne Mattress Firm Tallahassee Mattress Firm Boise Mattress Firm Garden City Mattress Firm Fairview Heights Mattress Firm Columbus Mattress Firm Evansville OH OH OH MI NJ NJ SC AL AL AR FL FL FL ID ID IL IN IN Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — 205 156 127 205 205 201 135 140 276 124 306 182 233 109 230 85 168 287 915 1,468 1,043 529 559 179 765 430 414 502 208 390 502 201 487 561 132 525 425 502 883 1,043 1,307 1,498 — — — — — — — — — — — — — — — — — — — — 1,248 (113) 9/2/2014 1992 685 686 384 970 631 549 642 484 514 808 383 720 670 362 610 593 789 (63) 9/2/2014 1986 (61) 9/2/2014 1988 (29) 9/2/2014 1988 (85) 9/2/2014 1993 (50) 9/2/2014 1988 (50) 9/2/2014 1995 (54) 9/2/2014 1998 (30) 9/2/2014 1988 (41) 9/2/2014 1986 (61) 9/2/2014 1986 (28) 9/2/2014 1987 (55) 9/2/2014 1992 (56) 9/2/2014 1986 (20) 9/2/2014 1988 (52) 9/2/2014 1999 (46) 9/2/2014 1986 (73) 5/28/2014 2000 2,351 2,805 (130) 2/7/2014 2003 (210) 2/7/2014 1998 — — — — — — — — — — — — 1,875 19,591 (987) 20,479 (2,438) 11/5/2013 2014 — — — — — — — — — — — 1,761 1,623 1,605 1,980 1,642 2,310 1,674 1,797 1,189 1,048 2,344 (222) 10/1/2013 2013 (248) 5/14/2013 2013 (279) 2/6/2013 2012 (256) 6/5/2013 2013 (192) 2/7/2014 2011 (282) 5/14/2013 2013 (291) 2/22/2013 2013 (191) 2/26/2014 2003 (163) 2/7/2014 1977 (206) 11/6/2012 1964 (485) 2/11/2013 1995 528 406 321 693 405 924 335 492 231 157 117 1,233 1,217 1,284 1,287 1,237 1,386 1,339 1,305 958 891 2,227 F-163 Property City State Mattress Firm Goshen Mattress Firm Mishawaka Mattress Firm South Bend IN IN IN Mattress Firm Bowling Green KY Mattress Firm Lafayette Mattress Firm Flint Mattress Firm Flint Mattress Firm Goldsboro Mattress Firm Greenville Mattress Firm Raleigh Mattress Firm Wilmington Mattress Firm Wilson LA MI MI NC NC NC NC NC Mattress Firm Painesville OH Mattress Firm Johnstown Mattress Firm Florence Mattress Firm Rock Hill Mattress Firm Knoxville Mattress Firm Nederland Mattress Firm Bountiful Mattress Firm Spokane Mattress Firm Spokane PA SC SC TN TX UT WA WA McAlisters Murfreesboro TN McAlisters Sherman McAlisters Waco TX TX McDonald's Scotland Neck NC MedAssets Plano TX Melrose Park Center Mercer Well Services Melrose Park IL Cleburne Merrill Lynch Hopewell Metro PCS Richardson Mezcal Mexican Restaurant Grafton Michael's Lafayette TX NJ TX OH LA Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — 1,194 — — — — — — — — — — — — — — — — — — — — — — — 211 375 289 648 — 467 409 349 1,085 1,091 412 373 437 389 398 385 586 311 736 409 511 310 563 429 320 1,555 1,500 2,445 973 1,251 1,323 1,164 1,385 1,085 1,091 1,257 692 1,318 906 929 898 1,088 1,245 1,367 1,685 1,582 720 1,223 791 — 10,432 45,650 6,143 10,515 262 369 — — — — — — — — — — — — — 745 (8) — — — — — — — — — — — 598 — 1,766 1,875 2,734 1,621 1,251 1,790 1,573 1,734 2,170 2,182 1,669 1,065 1,755 2,040 1,319 1,283 1,674 1,556 2,103 2,094 2,093 1,030 1,786 1,220 320 (222) 3/20/2014 2013 (291) 7/30/2013 2013 (360) 2/24/2014 2013 (203) 4/25/2013 2012 (255) 5/2/2013 1995 (147) 8/19/2014 2014 (110) 10/3/2014 2014 (156) 5/29/2014 2014 (246) 12/12/2012 2012 (263) 9/28/2012 1997 (270) 3/29/2013 2013 (167) 9/28/2012 2012 (158) 7/10/2014 2014 (115) 7/31/2013 1995 (210) 12/7/2012 2012 (170) 8/21/2013 2008 (232) 3/19/2013 2012 (300) 9/26/2012 1997 (310) 12/31/2012 2012 (357) 4/4/2013 2013 (343) 3/28/2013 2013 (143) 6/27/2013 1995 (184) 5/16/2014 2013 (139) 3/27/2014 2000 — 6/27/2013 2005 56,082 (5,839) 2/7/2014 2013 17,256 (1,556) 2/7/2014 2006 631 (47) 6/25/2014 2008 74,250 17,619 108,349 (12,142) 113,826 (4,265) 2/7/2014 2001 7,813 1,292 19,606 — — 64 1,831 191 3,631 6 — — 20,904 (3,157) 11/5/2013 1986 255 5,462 (39) 7/31/2013 1990 (619) 2/7/2014 2011 F-164 Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction 7,763 — 8,883 (1,480) 11/5/2013 2011 23,198 (3,895) 21,430 (761) 2/21/2014 1984 Property City State Michelin Louisville KY Millenium Chem Glen Burnie MD Miraca Life Sciences Irving Monro Muffler Lewiston Monro Muffler Waukesha Monterey's Tex Mex Tulsa TX ME WI OK MotoMart St. Charles MO Mrs. Baird's Dallas MS Energy Service Midland My Dentist Chickasha N/A - Billboard Memphis N/A - Billboard Memphis N/A - Billboard Memphis N/A - Billboard Memphis N/A - Parking Lot Kingston National Tire & Battery National Tire & Battery St. Louis Nashville Natural Grocers Salem TX TX OK TN TN TN TN PA MO TN OR Nestle Holdings Breinigsville PA Nomac Drilling Houston Northern Tool & Equipment Ocala Northrop Grumman El Segundo NTW Morrow O'Charley's Dalton O'Charley's Tucker Old Country Buffet Old Country Buffet Burbank Fresno Olive Garden Edmonton Olive Garden Edmonton Olive Garden Flagstaff Olive Garden Altamonte Springs Olive Garden Leesburg TX FL CA GA GA GA CA CA AB AB AZ FL FL — — — — — — — — — — — — — — — — 799 — — — 1,120 2,127 3,237 279 228 135 1,085 453 1,165 100 33 63 73 90 29 756 603 1,339 — 369 1,620 1,693 — — — — — — — — — — — 397 406 1,037 246 326 2,870 2,946 875 699 692 37,297 1,115 684 406 1,980 4,077 948 186 — — — — — 924 1,373 3,886 66,948 2,669 2,727 1,586 1,817 866 371 — — (326) — — — — — — — — — — — — 11 — — — — — — 1,309 (1,094) 1,306 (1,282) — — — — — 452 461 455 4,023 1,837 F-165 15,935 67,908 40,905 (5,203) 4/28/2014 1997 1,394 (234) 5/10/2013 1976 912 215 3,065 4,530 2,113 286 33 63 73 90 29 1,680 1,976 5,225 (137) 7/23/2013 2002 (6) 7/31/2013 2001 (351) 2/7/2014 2009 (1,109) 7/11/2012 2002 (120) 6/12/2014 2012 (38) 6/27/2013 1995 — 7/31/2013 1995 — 7/31/2013 1995 — 7/31/2013 1995 — 7/31/2013 1995 — 6/27/2013 1995 (226) 10/31/2012 1998 (199) 2/7/2014 1978 (600) 2/7/2014 2013 66,959 (12,762) 11/5/2013 1994 3,038 4,420 (315) 6/12/2014 2012 (421) 2/7/2014 2008 83,843 (8,353) 6/27/2014 1972 1,983 2,223 1,903 461 350 3,322 3,407 1,330 4,722 2,529 (418) 6/5/2012 1992 (369) 6/27/2013 1993 (176) 6/27/2013 1993 (30) 1/8/2014 2001 (25) 1/8/2014 2003 (48) 7/28/2014 1990 (49) 7/28/2014 1990 (44) 7/28/2014 1996 (307) 7/28/2014 2006 (131) 7/28/2014 1990 Property City State Olive Garden Port Charlotte FL Olive Garden Winnipeg Olive Garden Salisbury Olive Garden Cary MB MD NC Olive Garden Oklahoma City OK Olive Garden Langhorne Olive Garden Pittsburgh Olive Garden Houston Olive Garden Chesapeake Olive Garden Manassas PA PA TX VA VA Olive Garden Silverdale WA Olive Garden Morgantown WV Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — 1,454 1,640 1,171 1,545 819 970 1,560 973 1,382 1,965 1,752 1,765 4,156 1,444 3,144 6,603 4,053 3,717 1,422 2,902 2,252 2,585 2,015 2,199 — — — — — — — — — — — — 5,610 3,084 4,315 8,148 4,872 4,687 2,982 3,875 3,634 4,550 3,767 3,964 (274) 7/28/2014 1990 (107) 7/28/2014 1989 (214) 7/28/2014 1995 (425) 7/28/2014 1992 (269) 7/28/2014 1991 (246) 7/28/2014 1996 (129) 7/28/2014 2003 (198) 7/28/2014 1994 (159) 7/28/2014 1991 (179) 7/28/2014 1993 (145) 7/28/2014 1993 (200) 7/28/2014 2006 Omnipoint Communication Indianapolis IN 49,837 5,770 64,073 679 70,522 (11,441) 5/9/2013 2000 On the Border Rogers On the Border Mesa On the Border Peoria On the Border Alpharetta On the Border Buford On the Border Naperville On the Border West Springfield On the Border Auburn Hills On the Border Novi AR AZ AZ GA GA IL MA MI MI 950 655 1,804 2,090 1,562 2,129 — — — 1,771 1,786 2,549 2,000 413 — — 1,355 444 On the Border Kansas City MO 1,454 1,743 On the Border Lees Summit MO 1,200 1,647 On the Border Concord Mills NC — 1,903 On the Border Mount Laurel NJ 713 1,446 On the Border W. Windsor NJ 2,432 1,489 On the Border Columbus OH 1,925 1,594 On the Border Oklahoma City OK On the Border Tulsa On the Border Burleson On the Border College Station OK TX TX — — — — 859 740 891 2,218 1,500 1,534 1,352 1,842 1,506 1,414 4,173 2,745 3,176 1,039 1,008 1,456 1,938 1,703 1,558 2,310 2,956 2,844 1,471 F-166 — — — — — — — — — — — — — — — — — — — 2,155 3,624 3,481 3,613 3,292 3,963 4,586 4,100 3,620 2,782 2,655 3,359 3,384 3,192 3,152 3,169 3,696 3,735 3,689 (273) 2/7/2014 2002 (281) 2/7/2014 1998 (226) 2/7/2014 1998 (334) 2/7/2014 1997 (277) 2/7/2014 2001 (303) 2/7/2014 1997 (718) 2/7/2014 1995 (462) 2/7/2014 1999 (520) 2/7/2014 1997 (232) 2/7/2014 1997 (220) 2/7/2014 2002 (295) 2/7/2014 2000 (351) 2/7/2014 2004 (408) 2/7/2014 1998 (328) 2/7/2014 1997 (425) 2/7/2014 1996 (530) 2/7/2014 1995 (504) 2/7/2014 2000 (265) 2/7/2014 1997 Property City State Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction On the Border Denton On the Border Desoto On the Border Ft. Worth On the Border Garland On the Border Lubbock On the Border Rockwall On the Border Woodbridge TX TX TX TX TX TX VA AL O'Reilly Auto Parts O'Reilly Auto Parts O'Reilly Auto Parts O'Reilly Auto Parts O'Reilly Auto Parts O'Reilly Auto Parts O'Reilly Auto Parts O'Reilly Auto Parts O'Reilly Auto Parts O'Reilly Auto Parts O'Reilly Auto Parts O'Reilly Auto Parts O'Reilly Auto Parts Outback Steakhouse Outback Steakhouse Outback Steakhouse Outback Steakhouse Outback Steakhouse Outback Steakhouse Outback Steakhouse Outback Steakhouse Outback Steakhouse Outback Steakhouse Outback Steakhouse Outback Steakhouse Oneonta Louisville KY Breaux Bridge LA Central La Place New Roads Ravenna Willard Highlands Houston San Antonio LA LA LA OH OH TX TX TX Christiansburg VA Laramie WY Fort Smith Centennial Jacksonville Sebring Fort Wayne AR CO FL FL IN Lexington KY Baton Rouge LA Southgate MI Lees Summit MO Garner NC Las Cruces NM Boardman Township OH — — — — — — — — — — — — — — — 485 560 703 646 — — — — — — — — — — — — — 1,419 751 1,222 1,065 375 693 1,799 81 573 139 104 342 175 144 137 281 340 439 562 144 841 1,378 770 981 733 1,077 742 787 901 1,088 536 575 2,012 3,207 2,991 1,692 3,679 3,244 899 460 794 738 915 819 737 1,137 877 813 895 1,030 793 1,297 1,996 1,397 2,261 1,695 984 2,139 1,272 2,742 620 1,817 1,549 2,742 F-167 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 3,431 3,958 4,213 2,757 4,054 3,937 2,698 541 1,367 877 1,019 1,161 912 1,281 1,014 1,094 1,235 1,469 1,355 1,441 2,837 2,775 3,031 2,676 1,717 3,216 2,014 3,529 1,521 2,905 2,085 3,317 (363) 2/7/2014 2002 (544) 2/7/2014 1998 (514) 2/7/2014 1999 (299) 2/7/2014 2007 (607) 2/7/2014 1994 (520) 2/7/2014 1999 (327) 2/7/2014 1998 (113) 8/2/2012 2000 (124) 2/7/2014 2011 (117) 2/7/2014 2009 (139) 2/7/2014 2010 (128) 2/7/2014 2008 (117) 2/7/2014 2008 (170) 2/7/2014 2010 (128) 2/7/2014 2011 (114) 2/7/2014 2010 (125) 2/7/2014 2010 (149) 2/7/2014 2010 (115) 2/7/2014 2010 (307) 10/12/2012 1999 (365) 2/7/2014 1999 (261) 2/7/2014 1996 (369) 2/7/2014 2001 (312) 2/7/2014 2001 (301) 2/7/2014 2000 (379) 2/7/2014 2002 (223) 2/7/2014 2001 (460) 2/7/2014 1994 (125) 2/7/2014 1999 (326) 2/7/2014 2004 (265) 2/7/2014 2000 (470) 2/7/2014 1995 Owens & Minor Cleveland Owens Corning Newark Owens Corning Wichita Falls TX Property Outback Steakhouse Outback Steakhouse Outback Steakhouse Outback Steakhouse Outback Steakhouse Outback Steakhouse Outback Steakhouse Outback Steakhouse Pantry Gas & Convenience Pantry Gas & Convenience Pantry Gas & Convenience Pantry Gas & Convenience Pantry Gas & Convenience Pantry Gas & Convenience Pantry Gas & Convenience Pantry Gas & Convenience Pantry Gas & Convenience Pantry Gas & Convenience Pantry Gas & Convenience Pearson Education City State Independence OH Pittsburgh Conroe Houston Mcallen Colonial Heights PA TX TX TX VA Newport News VA Winchester VA OH OH Montgomery AL Charlotte Charlotte Charlotte Charlotte Conover Cornelius Lincolnton Matthews NC NC NC NC NC NC NC NC Thomasville NC Fort Mill Lawrence SC KS OH MO AZ CA CA CA FL FL Penske Bedford Petco Petco Lake Charles LA Dardenne Prairie Petsmart Phoenix Petsmart Merced Petsmart Petsmart Redding Westlake Village Petsmart Boca Raton Petsmart Lake Mary Initial Costs (1) Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Buildings, Fixtures and Improvements Accumulated Depreciation (3) (5) Date Acquired Date of Construction 2,268 932 2,063 2,321 443 746 1,356 1,310 6,077 13,013 847 1,228 1,332 417 1,787 1,308 936 2,258 2,159 1,819 1,436 1,967 — — — — — — — — (4) — — — — — — — — — — — — — 3,169 2,302 3,022 3,285 1,278 2,043 1,956 2,014 6,828 (322) 2/7/2014 2006 (244) 2/7/2014 1995 (326) 2/7/2014 2001 (369) 2/7/2014 1998 (80) 2/7/2014 1999 (326) 2/7/2014 2000 (395) 2/7/2014 1993 (419) 2/7/2014 2006 (692) 9/30/2014 2014 13,738 (1,701) 2/7/2014 2007 1,078 1,754 2,664 2,084 2,978 2,378 2,080 4,105 3,925 2,799 2,611 3,278 (113) 6/12/2014 1972 (279) 12/31/2012 1998 (302) 12/31/2012 2004 (95) 12/31/2012 1982 (406) 12/31/2012 1987 (297) 12/31/2012 1997 (212) 12/31/2012 1998 (512) 12/31/2012 1999 (490) 12/31/2012 2000 (413) 12/31/2012 1987 (326) 12/31/2012 2000 (446) 12/31/2012 1988 18,057 (3,436) 17,169 (520) 11/5/2013 1997 Encumbrances at December 31, 2016 — — — — — — — — — — — — — — — — — — — — — — — — 2,145 — Land 901 1,370 959 964 835 1,297 600 704 755 725 231 526 1,332 1,667 1,191 1,070 1,144 1,847 1,766 980 1,175 1,311 2,548 183 690 806 — 4,072 3,024 51,250 7,308 97,510 — — — — — 1,729 1,312 3,406 3,514 2,430 4,194 4,133 5,017 4,912 2,556 F-168 — — — 36 — — — — — 183 4,762 3,830 — 6/27/2013 1995 (568) 2/7/2014 2008 (412) 2/7/2014 2009 104,854 (11,572) 2/7/2014 1997 5,923 5,445 8,423 8,426 4,986 (583) 2/7/2014 1993 (627) 2/7/2014 1989 (671) 2/7/2014 1998 (707) 2/7/2014 2001 (373) 2/7/2014 1997 Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State FL FL IL MA MD MI OH TX TX IL IL IL IL IN TX GA AZ FL FL GA GA GA GA KY LA Petsmart Plantation Petsmart Tallahassee Petsmart Evanston Petsmart Braintree Petsmart Oxon Hill Petsmart Flint Petsmart Petsmart Parma Dallas Petsmart Southlake Physicians Immediate Care Physicians Immediate Care Physicians Immediate Care Physicians Immediate Care Physicians Immediate Care Aurora Glendale Heights New Lenox Plainfield Mishawaka Pier 1 Imports Victoria Pilot Flying J Carnesville Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Page Cooper City Marathon Ashburn Eatonton Greensboro Jackson Louisville Lafayette Salisbury MD Dearborn Bozeman Glasgow Livingston MI MT MT MT East Syracuse NY Nedrow NY — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 965 1,468 1,120 2,805 1,722 606 1,288 470 1,063 1,043 487 535 590 252 457 1,867 66 320 530 102 353 569 673 539 68 245 284 150 120 130 137 55 5,302 1,387 6,007 8,398 4,389 3,839 3,527 6,089 7,093 1,346 2,256 1,884 1,747 1,351 1,767 7,466 263 466 187 233 353 465 735 499 271 734 528 343 217 245 185 80 F-169 — — — — — — — — — — — — — — — — — — — (39) — — — — (146) — — — — — — — 6,267 2,855 7,127 (726) 2/7/2014 2001 (209) 2/7/2014 1998 (801) 2/7/2014 2001 11,203 (1,091) 2/7/2014 1996 6,111 4,445 4,815 6,559 8,156 2,389 2,743 2,419 2,337 1,603 2,224 9,333 329 786 717 296 706 1,034 1,408 1,038 193 979 812 493 337 375 322 135 (605) 2/7/2014 1998 (527) 2/7/2014 1996 (482) 2/7/2014 1996 (781) 2/7/2014 1998 (929) 2/7/2014 1998 (222) 2/7/2014 2003 (352) 2/7/2014 1997 (300) 2/7/2014 2011 (276) 2/7/2014 2011 (233) 2/7/2014 2013 (278) 2/7/2014 2011 (2,134) 1/31/2013 2000 (48) 7/31/2013 1977 (92) 6/27/2013 1995 (37) 6/27/2013 1995 (18) 6/27/2013 1988 (64) 7/31/2013 1988 (85) 7/31/2013 1989 (144) 6/27/2013 1987 (98) 6/27/2013 1975 (7) 6/27/2013 1990 (134) 7/31/2013 1983 (96) 7/31/2013 1977 (68) 6/27/2013 1995 (43) 6/27/2013 1995 (49) 6/27/2013 1995 (36) 6/27/2013 1978 (16) 6/27/2013 1979 Property Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet City State Bowling Green OH Cleveland Defiance Delaware Middleburg Hts OH OH OH OH North Olmsted OH Norwalk Sandusky Strongsville Toledo Shamokin Batesburg Bishopville Cheraw Columbia Edgefield Laurens Pageland Saluda Santee St. George West Columbia Box Elder Knoxville Amarillo Amarillo Crystal City OH OH OH OH PA SC SC SC SC SC SC SC SC SC SC SC SD TN TX TX TX Fort Stockton TX Midland Midland Monahans Odessa TX TX TX TX Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 141 87 114 270 128 122 77 140 74 58 54 261 365 415 881 221 454 344 346 371 367 507 68 300 339 254 148 252 414 506 361 456 262 175 197 721 156 153 115 171 108 173 217 484 365 507 588 410 371 420 346 248 245 415 217 546 1,016 1,015 453 1,007 506 619 671 847 F-170 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 403 262 311 991 284 275 192 311 182 231 271 745 730 922 (48) 7/31/2013 1979 (34) 6/27/2013 1995 (39) 6/27/2013 1977 (141) 6/27/2013 1975 (29) 7/31/2013 1985 (30) 6/27/2013 1977 (21) 7/31/2013 1977 (31) 7/31/2013 1982 (21) 6/27/2013 1977 (34) 6/27/2013 1978 (40) 7/31/2013 1995 (88) 7/31/2013 1987 (67) 7/31/2013 1987 (92) 7/31/2013 1984 1,469 (107) 7/31/2013 1977 631 825 764 692 619 612 922 285 846 1,355 1,269 601 1,259 920 1,125 1,032 1,303 (75) 7/31/2013 1986 (68) 7/31/2013 1989 (77) 7/31/2013 1999 (63) 7/31/2013 1995 (45) 7/31/2013 1972 (45) 7/31/2013 1980 (76) 7/31/2013 1980 (43) 6/27/2013 1985 (108) 6/27/2013 1995 (185) 7/31/2013 1976 (185) 7/31/2013 1980 (89) 6/27/2013 1981 (184) 7/31/2013 2008 (92) 7/31/2013 1975 (113) 7/31/2013 1978 (122) 7/31/2013 1979 (154) 7/31/2013 1976 Initial Costs (1) City State Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Odessa Odessa Odessa Odessa Pecos San Angelo San Angelo Stamford Cedar City Kanab Ashland Bedford Chester TX TX TX TX TX TX TX TX UT UT VA VA VA Christiansburg VA Clifton Forge VA Colonial Heights Hampton Hopewell VA VA VA Newport News VA Newport News VA Petersburg Richmond Richmond Abbotsford Antigo Clintonville Eagle River Hayward Merrill Neillsville Plover Schofield VA VA VA WI WI WI WI WI WI WI WI WI — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 588 572 627 457 387 214 268 38 52 52 589 548 473 494 287 311 641 707 394 394 378 666 311 159 45 208 28 51 83 35 85 106 882 572 766 685 719 641 624 115 361 210 1,093 670 1,104 918 861 311 345 864 591 591 701 814 311 195 252 69 159 205 531 106 199 196 F-171 — — — — — (183) (266) — — — — — — — — — — — — — — — — — 100 — — — (100) — 100 — 1,470 1,144 1,393 1,142 1,106 672 626 153 413 262 1,682 1,218 1,577 1,412 1,148 622 986 (161) 7/31/2013 1972 (104) 7/31/2013 1976 (140) 7/31/2013 1979 (125) 7/31/2013 1976 (131) 7/31/2013 1974 (18) 7/31/2013 1977 (15) 7/31/2013 1980 (21) 7/31/2013 1995 (71) 6/27/2013 1978 (38) 7/31/2013 1989 (199) 7/31/2013 1989 (122) 7/31/2013 1977 (201) 7/31/2013 1983 (167) 7/31/2013 1982 (157) 7/31/2013 1978 (57) 7/31/2013 1991 (63) 7/31/2013 1977 1,571 (158) 7/31/2013 1985 985 985 1,079 1,480 622 354 397 277 187 256 514 141 384 302 (108) 7/31/2013 1969 (108) 7/31/2013 1970 (128) 7/31/2013 1979 (149) 7/31/2013 1978 (57) 7/31/2013 1991 (36) 7/31/2013 1980 (52) 7/31/2013 1997 (13) 7/31/2013 1978 (29) 7/31/2013 1991 (37) 7/31/2013 1993 (70) 7/31/2013 1980 (19) 7/31/2013 1995 (41) 7/31/2013 1995 (36) 7/31/2013 1987 Property Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Property Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet Pizza Hut/ WingStreet PLS Check Cashers PLS Check Cashers PLS Check Cashers PLS Check Cashers PLS Check Cashers PLS Check Cashers PLS Check Cashers PLS Check Cashers PLS Check Cashers PLS Check Cashers PLS Check Cashers PLS Check Cashers PLS Check Cashers City State Stevens Point WI Tomahawk Waupaca WI WI Beckley WV Huntington WV Mesa Phoenix Tucson Compton Calumet Park Chicago Dallas Dallas Fort Worth AZ AZ AZ CA IL IL TX TX TX Grand Prairie TX Houston Mesquite Kenosha TX TX WI NJ PNC Bank Woodbury PNC Bank Cincinnati OH Pollo Tropical Davie Pollo Tropical Fort Lauderdale Pollo Tropical Lake Worth Ponderosa Scottsburg Popeyes Brandon Popeyes Carol City Popeyes Jacksonville Popeyes Lakeland Popeyes Miami Popeyes Orlando Popeyes Pensacola Popeyes Starke FL FL FL IN FL FL FL FL FL FL FL FL Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 130 35 61 160 190 187 288 264 475 306 451 197 169 187 385 158 261 190 465 195 280 190 280 430 776 423 781 830 220 782 301 380 390 81 91 131 4 759 677 800 107 1,003 127 1,356 1,180 1,473 1,056 1,293 1,388 693 2,633 538 1,490 1,242 1,182 141 961 1,090 955 830 330 955 673 — F-172 Costs Capitalized Subsequent to Acquisition (2) 100 — 35 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction 620 116 187 291 194 946 965 1,064 582 1,309 578 1,553 1,349 1,660 1,441 1,451 1,649 883 3,098 733 1,770 1,432 1,462 571 1,737 1,513 1,736 1,660 550 1,737 974 380 (80) 7/31/2013 1995 (15) 7/31/2013 1986 (20) 7/31/2013 1991 (24) 7/31/2013 1977 (1) 7/31/2013 1995 (154) 2/7/2014 2006 (130) 2/7/2014 2006 (168) 2/7/2014 2005 (52) 2/7/2014 2005 (200) 2/7/2014 2005 (63) 2/7/2014 2001 (216) 2/7/2014 1983 (190) 2/7/2014 2003 (227) 2/7/2014 2003 (168) 2/7/2014 1971 (189) 2/7/2014 2005 (238) 2/7/2014 2006 (122) 2/7/2014 2005 (444) 1/8/2014 1971 (92) 1/8/2014 1979 (285) 6/27/2013 1995 (238) 6/27/2013 1995 (227) 6/27/2013 1995 (29) 6/27/2013 1985 (189) 6/27/2013 1978 (179) 1/8/2014 1979 (174) 7/31/2013 1955 (151) 7/31/2013 1999 (60) 7/31/2013 1962 (174) 7/31/2013 2004 (111) 1/8/2014 2001 — 6/27/2013 1995 Property City State Popeyes Popeyes Tampa Tampa FL FL Popeyes Winter Haven FL Popeyes Thomasville GA Popeyes Valdosta GA Popeyes Baton Rouge LA Popeyes Bayou Vista Popeyes Eunice Popeyes Franklin Popeyes Lafayette Popeyes Lafayette Popeyes Marksville Popeyes Ferguson Popeyes St. Louis Popeyes St. Louis Popeyes Greenville Popeyes Grenada Popeyes Popeyes Omaha Omaha Popeyes Eatontown Popeyes Austin LA LA LA LA LA LA MO MO MO MS MS NE NE NJ TX Popeyes Channelview TX Popeyes Houston Popeyes Houston Popeyes Houston Popeyes Houston Popeyes Nederland Popeyes Orange Popeyes Port Arthur TX TX TX TX TX TX TX Popeyes Newport News VA Popeyes Portsmouth Price Rite Rochester VA NY Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 3,080 216 673 484 110 240 323 375 382 283 434 473 487 128 248 288 513 77 343 264 651 1,216 220 190 295 111 278 445 456 408 381 369 569 508 1,065 1,001 705 599 394 709 891 538 899 901 1,129 383 460 431 977 458 515 615 796 533 401 452 241 166 227 668 847 589 217 230 3,594 F-173 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 724 1,738 1,485 815 839 717 1,084 1,273 821 1,333 1,374 1,616 511 708 719 (84) 1/8/2014 1981 (209) 6/27/2013 1976 (196) 6/27/2013 1976 (135) 6/27/2013 1995 (115) 6/27/2013 1995 (72) 7/31/2013 1999 (139) 6/27/2013 1985 (163) 7/31/2013 1986 (106) 6/27/2013 1985 (176) 6/27/2013 1993 (177) 6/27/2013 1996 (222) 6/27/2013 1987 (70) 7/31/2013 1984 (90) 6/27/2013 1959 (79) 7/31/2013 1978 1,490 (192) 6/27/2013 1984 535 858 879 1,447 1,749 621 642 536 277 505 1,113 1,303 997 598 599 (76) 1/8/2014 2007 (94) 7/31/2013 1996 (112) 7/31/2013 1985 (145) 7/31/2013 1987 (105) 6/27/2013 1996 (77) 6/27/2013 1995 (87) 6/27/2013 1995 (44) 7/31/2013 1976 (30) 7/31/2013 1976 (41) 7/31/2013 1978 (122) 7/31/2013 1988 (155) 7/31/2013 1984 (116) 6/27/2013 1984 (43) 6/27/2013 2002 (45) 6/27/2013 2002 4,163 (997) 9/27/2012 1965 Property City State Publix Birmingham AL Pulte Mortgage Englewood PWP Induestries, Inc. Kinston Qdoba Mexican Grill Qdoba Mexican Grill Quincy's Family Steakhouse Flint Grand Blanc Monroe RaceTrac Bessemer RaceTrac Mobile RaceTrac Bellview RaceTrac Jacksonville RaceTrac Leesburg RaceTrac Atlanta RaceTrac Denton RaceTrac Houston RaceTrac Houston Rally's Rally's Rally's Rally's Rally's Rally's Rally's Rally's Rally's Rancho Grande Grill RealTime Logic Indianapolis Indianapolis Indianapolis Kokomo Muncie Harvey LA New Orleans LA New Orleans LA Hamtramck Andalusia Colorado Springs Reckitt Benckiser Chester Red Lobster Edmonton Red Lobster Edmonton Red Lobster Birmingham Red Lobster Decatur Red Lobster Dothan CO NC MI MI NC AL AL FL FL FL GA TX TX TX IN IN IN IN IN MI AL CO NJ AB AB AL AL AL Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction 934 6,377 165 7,476 (987) 2/7/2014 2004 2,563 22,026 — — 8,930 — — — — — — — — — — — — — — — — — — — — — — — 569 110 165 560 761 580 684 1,065 1,188 1,025 1,030 1,209 1,203 210 1,168 1,168 290 310 420 450 220 230 94 1,100 5,500 886 — — — — — 2,360 2,585 — 1,100 726 8,307 990 935 458 2,624 1,317 3,831 2,863 2,711 1,511 2,645 1,204 1,509 1,514 — — 548 1,196 870 1,691 1,018 1,020 251 8,932 7,972 555 450 741 686 1,244 F-174 1 — — — (245) — — — — — — — — — — — — — — — — — — — — — — — — — — 24,590 (3,460) 11/5/2013 2009 8,876 1,100 1,100 773 3,385 1,897 4,515 3,928 3,899 2,536 3,675 2,413 2,712 1,724 1,168 1,168 838 1,506 1,290 2,141 1,238 1,250 345 (1,635) 3/28/2014 1995 (264) 3/29/2013 2006 (250) 3/29/2013 2006 (33) 7/31/2013 1978 (413) 2/7/2014 2003 (207) 2/7/2014 1998 (626) 2/7/2014 2007 (505) 2/7/2014 2011 (484) 2/7/2014 2007 (252) 2/7/2014 2004 (396) 2/7/2014 2003 (185) 2/7/2014 1995 (233) 2/7/2014 1997 (290) 6/27/2013 1995 — 7/31/2013 2005 — 7/31/2013 2005 (105) 6/27/2013 1995 (229) 6/27/2013 1995 (167) 6/27/2013 1995 (324) 6/27/2013 1995 (195) 6/27/2013 1995 (196) 6/27/2013 1995 (51) 6/27/2013 2004 10,032 (3,145) 5/9/2014 2005 8,858 2,915 3,035 741 1,786 1,970 (1,683) 8/16/2012 2006 (87) 7/28/2014 1990 (85) 7/28/2014 1990 (97) 7/28/2014 1972 (105) 7/28/2014 1993 (120) 7/28/2014 1979 Property City State Red Lobster Florence Red Lobster Huntsville AL AL Red Lobster Montgomery AL Red Lobster Vestavia Hills AL Red Lobster Fayetteville Red Lobster Fort Smith Red Lobster Hot Springs Red Lobster Little Rock Red Lobster North Little Rock Red Lobster Pine Bluff Red Lobster Rogers Red Lobster Chandler Red Lobster Flagstaff Red Lobster Gilbert Red Lobster Phoenix Red Lobster Surprise Red Lobster Tucson Red Lobster Bakersfield Red Lobster Chico Red Lobster Chula Vista Red Lobster Fremont Red Lobster Inglewood Red Lobster Oceanside Red Lobster Ontario Red Lobster Palm Desert Red Lobster Riverside Red Lobster San Bernardino Red Lobster San Bruno Red Lobster San Diego Red Lobster Torrance Red Lobster Red Lobster Valencia Colorado Springs AR AR AR AR AR AR AR AZ AZ AZ AZ AZ AZ CA CA CA CA CA CA CA CA CA CA CA CA CA CA CO Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 974 1,098 1,034 1,257 1,135 1,643 928 1,942 999 226 1,398 — 891 — 1,038 — — — 717 — 1,638 — — 1,304 1,132 914 838 — — 1,850 — — 908 2,330 1,413 1,417 1,248 1,228 1,593 725 1,906 1,194 2,069 252 514 460 350 565 676 731 1,146 1,671 564 2,211 1,529 2,238 1,321 2,459 1,870 1,611 1,113 1,579 841 1,512 F-175 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 1,882 3,428 2,447 2,674 2,383 2,871 2,521 2,667 2,905 1,420 3,467 252 1,405 460 1,388 565 676 731 1,863 1,671 2,202 2,211 1,529 3,542 2,453 3,373 2,708 1,611 1,113 3,429 841 1,512 (119) 7/28/2014 1990 (177) 7/28/2014 1975 (133) 7/28/2014 1983 (112) 7/28/2014 1972 (104) 7/28/2014 1984 (125) 7/28/2014 1980 (167) 7/28/2014 1994 (84) 7/28/2014 1977 (163) 7/28/2014 1981 (140) 7/28/2014 1995 (194) 7/28/2014 2008 (91) 7/28/2014 2000 (100) 7/28/2014 1996 (117) 7/28/2014 2007 (61) 7/28/2014 1982 (131) 7/28/2014 2003 (131) 7/28/2014 2009 (150) 7/28/2014 2003 (133) 7/28/2014 1994 (199) 7/28/2014 1988 (72) 7/28/2014 1984 (297) 7/28/2014 2007 (190) 7/28/2014 2010 (190) 7/28/2014 2003 (153) 7/28/2014 2012 (187) 7/28/2014 1988 (169) 7/28/2014 1988 (264) 7/28/2014 1992 (275) 7/28/2014 1988 (131) 7/28/2014 1988 (215) 7/28/2014 1988 (190) 7/28/2014 2004 Property City State Red Lobster Fort Collins CO Red Lobster Bridgeport Red Lobster Danbury Red Lobster Newark Red Lobster Talleyville Red Lobster Red Lobster Altamonte Springs Boynton Beach Red Lobster Fort Pierce Red Lobster Hollywood Red Lobster Kissimmee Red Lobster Leesburg Red Lobster Miami Red Lobster Orlando Red Lobster Orlando Red Lobster Panama City Red Lobster Pembroke Pines Red Lobster Plantation CT CT DE DE FL FL FL FL FL FL FL FL FL FL FL FL Red Lobster Port Charlotte FL Red Lobster Sebring FL Red Lobster Winter Haven FL Red Lobster Athens Red Lobster Augusta Red Lobster Austell Red Lobster Buford Red Lobster Canton Red Lobster Cartersville Red Lobster Columbus Red Lobster Conyers Red Lobster Dalton Red Lobster Decatur GA GA GA GA GA GA GA GA GA GA Red Lobster Douglasville GA Red Lobster Jonesboro GA Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 828 1,360 — — — 1,201 1,212 — 618 — — 721 — — 1,728 — 479 1,975 1,476 1,003 1,055 669 877 — 1,315 596 594 956 549 775 1,102 1,356 1,049 323 159 1,515 1,877 1,674 1,631 1,491 2,282 1,364 1,262 1,062 1,188 1,899 1,515 3,126 1,733 1,516 1,487 2,217 2,027 1,301 1,092 2,638 1,647 1,386 1,957 3,144 2,045 1,873 1,161 1,678 F-176 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 2,188 (132) 7/28/2014 1983 323 159 1,515 3,078 2,886 1,631 2,109 2,282 1,364 1,983 1,062 1,188 3,627 1,515 3,605 3,708 2,992 2,490 3,272 2,696 2,178 1,092 3,953 2,243 1,980 2,913 3,693 2,820 2,975 2,517 2,727 (95) 7/28/2014 1996 (68) 7/28/2014 1996 (237) 7/28/2014 2006 (171) 7/28/2014 1991 (150) 7/28/2014 1986 (227) 7/28/2014 2008 (156) 7/28/2014 1995 (329) 7/28/2014 2003 (243) 7/28/2014 2002 (135) 7/28/2014 1990 (220) 7/28/2014 2003 (235) 7/28/2014 1989 (143) 7/28/2014 1974 (211) 7/28/2014 1976 (246) 7/28/2014 1987 (163) 7/28/2014 1989 (148) 7/28/2014 1990 (140) 7/28/2014 1992 (156) 7/28/2014 1972 (147) 7/28/2014 1971 (108) 7/28/2014 1971 (166) 7/28/2014 2001 (225) 7/28/2014 2000 (164) 7/30/2014 2000 (142) 7/28/2014 1996 (182) 7/28/2014 2005 (256) 7/28/2014 2000 (173) 7/28/2014 1995 (143) 7/28/2014 1973 (124) 7/28/2014 1991 (128) 7/28/2014 1972 Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Red Lobster Kennesaw Red Lobster Newnan Red Lobster Perry Red Lobster Rome Red Lobster Roswell Red Lobster Savannah Red Lobster Smyrna Red Lobster Snellville Red Lobster Tucker Red Lobster Ames Red Lobster Cedar Rapids Red Lobster Davenport Red Lobster West Des Moines Red Lobster Boise Red Lobster Pocatello Red Lobster Alton Red Lobster Aurora Red Lobster Bloomingdale Red Lobster Chicago Red Lobster Red Lobster Red Lobster Danville Downers Grove Fairview Heights Red Lobster Forsyth Red Lobster Gurnee Red Lobster Marion Red Lobster Matteson Red Lobster Norridge Red Lobster Oak Lawn Red Lobster Orland Park Red Lobster Peru Red Lobster Schaumburg Red Lobster Springfield GA GA GA GA GA GA GA GA GA IA IA IA IA ID ID IL IL IL IL IL IL IL IL IL IL IL IL IL IL IL IL IL — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 1,382 1,063 351 961 2,358 475 1,090 887 — 789 — 619 1,033 — — 1,251 1,598 1,165 1,064 253 1,694 — — 1,735 399 962 — 1,825 1,046 339 — 1,205 1,802 1,547 1,839 911 354 2,236 1,677 2,223 1,718 1,133 495 2,896 2,358 714 773 1,854 782 1,309 2,422 1,580 1,854 1,806 1,083 2,286 2,399 2,212 929 2,316 2,489 1,169 665 1,253 F-177 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 3,184 2,610 2,190 1,872 2,712 2,711 2,767 3,110 1,718 1,922 495 3,515 3,391 714 773 3,105 2,380 2,474 3,486 1,833 3,548 1,806 1,083 4,021 2,798 3,174 929 4,141 3,535 1,508 665 2,458 (156) 7/28/2014 1987 (155) 7/28/2014 1999 (174) 7/28/2014 1996 (96) 7/28/2014 1979 (60) 7/28/2014 1981 (165) 7/28/2014 1971 (143) 7/28/2014 1983 (189) 7/28/2014 1992 (240) 7/28/2014 1973 (134) 7/28/2014 1995 (135) 7/28/2014 1981 (214) 7/28/2014 1975 (181) 7/28/2014 1975 (144) 7/28/2014 1988 (221) 7/28/2014 1994 (155) 7/28/2014 1983 (82) 7/28/2014 1979 (117) 7/28/2014 1981 (185) 7/28/2014 1980 (162) 7/28/2014 1991 (167) 7/30/2014 1990 (447) 7/28/2014 1972 (179) 7/28/2014 1975 (176) 7/28/2014 1980 (208) 7/28/2014 1992 (164) 7/28/2014 1976 (248) 7/28/2014 1979 (171) 7/28/2014 1975 (192) 7/28/2014 1980 (130) 7/28/2014 1995 (125) 7/28/2014 1976 (120) 7/28/2014 1977 Property City State Red Lobster West Dundee Red Lobster Anderson Red Lobster Avon Red Lobster Columbus Red Lobster Elkhart Red Lobster Evansville Red Lobster Fort Wayne Red Lobster Kokomo Red Lobster Merrillville IL IN IN IN IN IN IN IN IN Red Lobster Michigan City IN Red Lobster Mishawaka Red Lobster Muncie Red Lobster Richmond Red Lobster Terre Haute Red Lobster Topeka IN IN IN IN KS Red Lobster Elizabethtown KY Red Lobster Lexington Red Lobster Louisville Red Lobster Owensboro KY KY KY Red Lobster St. Matthews KY Red Lobster Baton Rouge LA Red Lobster Monroe Red Lobster Winnipeg Red Lobster Annapolis Red Lobster Frederick LA MB MD MD Red Lobster Hagerstown MD Red Lobster Lanham MD Red Lobster Owings Mills MD Red Lobster Salisbury Red Lobster Suitland Red Lobster Battle Creek Red Lobster Bay City MD MD MI MI Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 197 813 — 615 616 587 567 394 568 330 593 627 371 1,066 754 866 — 893 815 1,640 — 455 1,664 — — 2,195 1,272 864 1,435 1,657 3,357 2,985 1,835 3,197 2,233 2,205 1,427 1,416 2,640 2,211 401 1,094 1,350 1,485 1,841 1,535 2,022 489 644 319 1,044 1,755 — — 1,070 1,090 202 168 455 229 1,868 3,112 1,827 1,620 F-178 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 2,392 2,085 864 2,050 2,273 3,944 3,552 2,229 3,765 2,563 2,798 2,054 1,787 3,706 2,965 1,267 1,094 2,243 2,300 3,481 1,535 2,477 2,153 644 319 (172) 7/28/2014 1982 (119) 7/28/2014 1982 (179) 7/28/2014 2001 (143) 7/28/2014 1991 (211) 9/19/2014 1993 (243) 7/28/2014 1972 (217) 7/28/2014 1973 (151) 7/28/2014 1980 (230) 7/28/2014 1979 (189) 7/28/2014 1992 (169) 7/28/2014 1974 (104) 7/28/2014 1975 (150) 7/28/2014 1996 (196) 7/28/2014 1972 (167) 7/28/2014 1972 (98) 7/28/2014 2003 (175) 7/28/2014 2011 (140) 7/28/2014 1991 (138) 7/28/2014 1982 (142) 7/28/2014 1972 (215) 7/28/2014 2011 (180) 7/28/2014 1991 (89) 7/28/2014 1989 (104) 7/28/2014 1985 (102) 7/28/2014 1997 2,799 (162) 7/28/2014 1992 455 229 2,938 4,202 2,029 1,788 (111) 7/28/2014 1980 (71) 7/28/2014 1989 (177) 7/28/2014 1992 (220) 7/28/2014 1975 (154) 7/28/2014 1979 (162) 7/28/2014 1993 Property City State Red Lobster Dearborn Heights Red Lobster Flint Red Lobster Fort Gratiot Red Lobster Grandville Red Lobster Jackson Red Lobster Kentwood Red Lobster Lansing Red Lobster Livonia Red Lobster Mt. Pleasant Red Lobster Muskegon Red Lobster Novi Red Lobster Portage Red Lobster Saginaw Red Lobster Southgate Red Lobster Sterling Heights MI MI MI MI MI MI MI MI MI MI MI MI MI MI MI Red Lobster Traverse City MI Red Lobster Warren Red Lobster Westland Red Lobster Blaine Red Lobster Burnsville Red Lobster Mankato Red Lobster Rochester Red Lobster Roseville Red Lobster St. Cloud Red Lobster Branson Red Lobster Red Lobster Bridgeton Cape Girardeau MI MI MN MN MN MN MN MN MO MO MO Red Lobster Chesterfield MO Red Lobster Crestwood MO Red Lobster Jefferson City MO Red Lobster Springfield Red Lobster St. Joseph MO MO Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 822 505 250 1,055 235 819 — 635 508 386 2,061 396 335 611 759 1,036 349 478 1,325 1,222 867 — 1,291 760 1,496 1,128 1,412 — 518 593 — 1,023 2,156 2,266 1,611 1,479 2,174 1,606 1,534 1,824 1,346 2,028 1,847 2,496 1,961 2,531 3,215 1,121 2,656 2,551 1,896 2,381 1,642 1,674 1,298 2,770 1,074 2,003 1,103 1,762 1,466 1,092 1,510 1,002 F-179 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 2,978 2,771 1,861 2,534 2,409 2,425 1,534 2,459 1,854 2,414 3,908 2,892 2,296 3,142 3,974 2,157 3,005 3,029 3,221 3,603 2,509 1,674 2,589 3,530 2,570 3,131 2,515 1,762 1,984 1,685 1,510 2,025 (168) 7/28/2014 1975 (179) 7/28/2014 1976 (174) 7/28/2014 2002 (165) 7/28/2014 2001 (171) 7/28/2014 1976 (134) 7/28/2014 1975 (215) 7/28/2014 1976 (165) 7/28/2014 1987 (144) 7/28/2014 1993 (170) 7/28/2014 1982 (163) 7/28/2014 1983 (188) 7/28/2014 1975 (158) 7/28/2014 1975 (214) 7/28/2014 1990 (248) 7/28/2014 1985 (135) 7/28/2014 1996 (198) 7/28/2014 1975 (192) 7/28/2014 1975 (152) 7/28/2014 1980 (174) 7/30/2014 1980 (164) 7/28/2014 1993 (202) 7/28/2014 1987 (102) 7/28/2014 1975 (214) 7/28/2014 1990 (93) 7/30/2014 2000 (158) 7/28/2014 1973 (132) 7/28/2014 1994 (269) 7/28/2014 1973 (122) 7/28/2014 1975 (109) 7/28/2014 1995 (324) 7/28/2014 1972 (99) 7/28/2014 1979 Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Red Lobster St. Peters Red Lobster St.Louis Red Lobster Jackson Red Lobster Meridian Red Lobster Southaven Red Lobster Billings Red Lobster Asheville Red Lobster Burlington Red Lobster Cary Red Lobster Concord Red Lobster Fayetteville Red Lobster Greensboro Red Lobster Greenville Red Lobster Hickory Red Lobster Matthews Red Lobster Raleigh Red Lobster Bismarck Red Lobster Fargo MO MO MS MS MS MT NC NC NC NC NC NC NC NC NC NC ND ND Red Lobster Grand Forks ND Red Lobster Kearney Red Lobster Lincoln Red Lobster Cherry Hill Red Lobster Delran Red Lobster Deptford Red Lobster Vineland NE NE NJ NJ NJ NJ Red Lobster Clovis NM Red Lobster Farmington NM Red Lobster Roswell NM Red Lobster Amherst Red Lobster Brooklyn Red Lobster Colonie Red Lobster Henrietta NY NY NY NY — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 1,387 1,128 — 668 1,005 544 1,208 1,933 — 675 1,372 1,139 630 1,949 946 831 888 876 678 — — 887 — — — 855 354 1,344 — 1,014 956 1,543 2,662 2,851 872 2,640 2,436 2,865 403 1,118 1,506 2,908 1,785 846 1,660 495 2,183 3,321 2,933 1,694 1,109 254 2,274 1,671 1,608 1,779 318 2,287 1,248 1,271 5,897 3,500 2,934 F-180 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 1,543 4,049 3,979 872 3,308 3,441 3,409 1,611 3,051 1,506 3,583 3,157 1,985 2,290 2,444 3,129 4,152 3,821 2,570 1,787 254 2,274 2,558 1,608 1,779 318 3,142 1,602 2,615 5,897 4,514 3,890 (338) 7/28/2014 1976 (193) 7/28/2014 1972 (216) 7/28/2014 1977 (147) 7/28/2014 1996 (189) 7/28/2014 1972 (214) 7/28/2014 1993 (215) 7/28/2014 1980 (107) 7/28/2014 2011 (130) 7/28/2014 1992 (255) 7/28/2014 2002 (196) 7/28/2014 1978 (142) 7/28/2014 1972 (115) 7/28/2014 1991 (142) 7/28/2014 1989 (115) 7/28/2014 2012 (159) 7/28/2014 1983 (241) 7/28/2014 1990 (222) 7/28/2014 1981 (166) 7/28/2014 1992 (132) 7/28/2014 1996 (64) 7/28/2014 1977 (370) 7/28/2014 1984 (154) 7/28/2014 1988 (277) 7/28/2014 1991 (227) 7/28/2014 1995 (89) 7/28/2014 1995 (200) 7/28/2014 1992 (141) 7/30/2014 1994 (131) 7/28/2014 1980 (846) 7/28/2014 2003 (256) 7/28/2014 1976 (224) 7/28/2014 1976 Property City State Red Lobster Hicksville Red Lobster Liverpool NY NY Red Lobster Poughkeepsie NY Red Lobster Rochester NY Red Lobster Ronkonkoma NY Red Lobster Valley Stream NY Red Lobster Vestal Red Lobster Watertown Red Lobster Yonkers Red Lobster Akron NY NY NY OH Red Lobster Beavercreek OH Red Lobster Canton Red Lobster Cincinnati Red Lobster Cincinnati Red Lobster Cincinnati Red Lobster Columbus Red Lobster Red Lobster Columbus Cuyahoga Falls Red Lobster Dublin Red Lobster Lancaster Red Lobster Lima Red Lobster Mansfield Red Lobster Maumee Red Lobster Mentor Red Lobster Miamisburg Red Lobster New Philadelphia Red Lobster Niles OH OH OH OH OH OH OH OH OH OH OH OH OH OH OH OH Red Lobster North Olmsted OH Red Lobster Parma Red Lobster Sandusky OH OH Red Lobster St. Clairsville OH Red Lobster Toledo OH Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 900 1,987 756 — — 1,027 807 — — 551 398 799 1,484 365 — 787 306 — 737 843 335 505 651 612 232 — — 466 1,290 — 732 870 2,088 669 2,122 1,109 1,417 2,255 1,586 894 1,398 2,334 2,596 1,915 1,687 2,344 1,100 2,123 2,511 873 1,570 658 1,697 2,067 2,129 2,615 1,349 1,799 2,291 2,156 1,126 853 2,112 F-181 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 870 2,988 2,656 2,878 1,109 1,417 3,282 2,393 894 1,398 2,885 2,994 2,714 3,171 2,709 1,100 2,910 2,817 873 2,307 1,501 2,032 2,572 2,780 3,227 1,581 1,799 2,291 2,622 2,416 853 2,844 (152) 7/28/2014 1982 (168) 7/28/2014 1975 (79) 7/28/2014 1981 (190) 7/28/2014 1985 (191) 7/28/2014 2005 (252) 7/28/2014 1983 (178) 7/28/2014 1976 (164) 7/28/2014 1993 (159) 7/28/2014 2012 (231) 7/28/2014 1981 (203) 7/28/2014 1994 (186) 7/28/2014 1974 (138) 7/28/2014 1974 (128) 7/28/2014 1977 (173) 7/28/2014 1980 (202) 7/28/2014 2002 (158) 7/28/2014 1973 (181) 7/28/2014 1974 (141) 7/28/2014 1990 (145) 7/28/2014 1991 (100) 7/28/2014 1991 (136) 7/28/2014 1977 (167) 7/28/2014 1974 (165) 7/30/2014 1977 (178) 7/28/2014 1974 (139) 7/28/2014 1991 (257) 7/28/2014 1982 (286) 7/28/2014 1974 (162) 7/28/2014 1975 (116) 7/30/2014 1986 (213) 7/28/2014 1997 (172) 7/28/2014 1974 Property City State Red Lobster Wooster OH Red Lobster Youngstown OH Red Lobster Muskogee OK Red Lobster Oklahoma City OK Red Lobster Oklahoma City OK Red Lobster Shawnee Red Lobster Tulsa Red Lobster Barrie Red Lobster Brampton Red Lobster Burlington Red Lobster Kitchener Red Lobster London OK OK ON ON ON ON ON Red Lobster Niagara Falls ON Red Lobster Oshawa Red Lobster Ottawa ON ON Red Lobster Scarborough ON Red Lobster Sudbury Red Lobster Windsor ON ON Red Lobster Bartonsville PA Red Lobster Chambersburg PA Red Lobster Du Bois Red Lobster Erie Red Lobster Greensburg Red Lobster Hanover Red Lobster Johnstown Red Lobster Lancaster Red Lobster Langhorne Red Lobster Mechanicsbur g Red Lobster Philadelphia Red Lobster Pittsburgh Red Lobster Pittsburgh Red Lobster Pittsburgh PA PA PA PA PA PA PA PA PA PA PA PA Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 200 214 399 610 800 437 847 1,815 1,249 1,884 1,397 1,502 1,094 955 1,686 2,910 1,149 870 — 694 317 600 748 446 789 — 979 676 — — 1,352 1,641 1,205 2,477 1,707 2,681 1,960 1,744 2,084 317 1,396 1,652 554 649 1,402 775 938 1,260 645 648 2,389 1,212 981 1,800 2,432 1,870 1,799 2,968 2,735 2,656 1,902 1,379 1,190 1,096 F-182 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 1,405 2,691 2,106 3,291 2,760 2,181 2,931 2,132 2,645 3,536 1,951 2,151 2,496 1,730 2,624 4,170 1,794 1,518 2,389 1,906 1,298 2,400 3,180 2,316 2,588 2,968 3,714 3,332 1,902 1,379 2,542 2,737 (134) 7/28/2014 1995 (191) 7/28/2014 1982 (166) 7/28/2014 1995 (196) 7/28/2014 1980 (167) 7/28/2014 1991 (155) 7/28/2014 1995 (162) 7/28/2014 1976 (76) 7/28/2014 1986 (128) 7/28/2014 1986 (143) 7/28/2014 1985 (90) 7/28/2014 1986 (111) 7/28/2014 1986 (141) 7/28/2014 1986 (88) 7/28/2014 1986 (96) 7/28/2014 1986 (120) 7/28/2014 1985 (103) 7/28/2014 1989 (94) 7/28/2014 1983 (298) 7/28/2014 2010 (136) 7/28/2014 1991 (119) 7/28/2014 1995 (143) 7/28/2014 1987 (189) 7/28/2014 1989 (175) 7/28/2014 1995 (168) 7/28/2014 1993 (320) 7/28/2014 1977 (233) 7/28/2014 1996 (199) 7/28/2014 1976 (214) 7/28/2014 1977 (233) 7/28/2014 1976 (100) 7/28/2014 1977 (103) 7/28/2014 1987 Initial Costs (1) Property City State Red Lobster Pottstown Red Lobster Scranton Red Lobster Springfield PA PA PA Red Lobster State College PA Red Lobster Washington Red Lobster Whitehall Red Lobster Aiken Red Lobster Columbia Red Lobster Florence PA PA SC SC SC Red Lobster Myrtle Beach SC Red Lobster Spartanburg Red Lobster Sumter Red Lobster Regina Red Lobster Saskatoon Red Lobster Chattanooga Red Lobster Clarksville Red Lobster Cookeville Red Lobster Jackson Red Lobster Memphis Red Lobster Mt. Juliet Red Lobster Sevierville Red Lobster Abilene Red Lobster Amarillo Red Lobster Brownsville Red Lobster Red Lobster Burleson College Station Red Lobster Conroe Red Lobster Denton Red Lobster Duncanville Red Lobster El Paso Red Lobster El Paso Red Lobster Fort Worth SC SC SK SK TN TN TN TN TN TN TN TX TX TX TX TX TX TX TX TX TX TX Encumbrances at December 31, 2016 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — Land — — 1,571 — — — 780 — 779 — — 988 1,698 1,579 1,548 543 532 822 1,602 1,227 — 209 590 427 — — — 832 361 — — — Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Buildings, Fixtures and Improvements Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 1,115 1,563 2,344 1,026 694 2,155 1,247 918 1,506 462 1,136 1,117 548 1,359 2,575 2,223 1,205 1,427 2,290 773 1,062 1,976 2,342 1,638 356 643 557 2,044 2,658 414 883 239 F-183 1,115 1,563 3,915 1,026 694 2,155 2,027 918 2,285 462 1,136 2,105 2,246 2,938 4,123 2,766 1,737 2,249 3,892 2,000 1,062 2,185 2,932 2,065 356 643 557 2,876 3,019 414 883 239 (298) 7/28/2014 1995 (288) 7/28/2014 2001 (201) 7/28/2014 1983 (242) 7/28/2014 1999 (110) 7/28/2014 1976 (376) 7/28/2014 1977 (130) 7/28/2014 1991 (150) 7/28/2014 1980 (148) 7/28/2014 1990 (122) 7/28/2014 2006 (146) 7/28/2014 1973 (133) 7/28/2014 1995 (90) 7/28/2014 1989 (141) 7/28/2014 1990 (175) 7/28/2014 1972 (180) 7/28/2014 1990 (122) 7/28/2014 1995 (152) 7/28/2014 1995 (169) 7/28/2014 1972 (116) 7/28/2014 2009 (204) 7/28/2014 2002 (159) 7/30/2014 1980 (176) 7/28/2014 1976 (155) 7/28/2014 1990 (105) 7/28/2014 2003 (111) 7/28/2014 1983 (126) 7/28/2014 2011 (187) 7/28/2014 1991 (193) 7/28/2014 1974 (115) 7/28/2014 1976 (149) 7/28/2014 2008 (66) 7/28/2014 1982 Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Red Lobster Houston Red Lobster Houston Red Lobster Humble Red Lobster Killeen Red Lobster Laredo Red Lobster Lewisville Red Lobster Longview Red Lobster Lubbock Red Lobster Lufkin Red Lobster Mcallen Red Lobster Mcallen Red Lobster N. Richland Hills Red Lobster Pasadena Red Lobster San Antonio Red Lobster San Antonio Red Lobster Sherman Red Lobster Sugar Land Red Lobster Texarkana Red Lobster Tyler Red Lobster Victoria Red Lobster Layton TX TX TX TX TX TX TX TX TX TX TX TX TX TX TX TX TX TX TX TX UT Red Lobster Saint George UT Red Lobster Bristol VA Red Lobster Charlottesville VA Red Lobster Chesapeake Red Lobster Colonial Heights VA VA Red Lobster Fredericksburg VA Red Lobster Harrisonburg VA Red Lobster Manassas Red Lobster Midlothian Red Lobster Sterling Red Lobster Winchester VA VA VA VA — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 960 — 732 — 1,087 324 1,103 15 1,175 960 493 675 — 474 675 — 73 884 478 1,577 797 816 — 1,262 1,095 1,088 465 1,800 — — — 399 1,833 1,087 1,935 819 1,626 2,625 1,494 1,732 2,280 1,647 2,889 928 963 1,491 1,923 708 2,148 1,755 1,905 1,333 1,387 1,175 1,021 1,374 1,409 1,971 1,369 941 655 646 357 F-184 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 399 2,793 1,087 2,667 819 2,713 2,949 2,597 1,747 3,455 2,607 3,382 1,603 963 1,965 2,598 708 2,221 2,639 2,383 2,910 2,184 1,991 1,021 2,636 2,504 3,059 1,834 2,741 655 646 357 (111) 7/28/2014 1974 (149) 7/28/2014 1981 (160) 7/28/2014 1980 (172) 7/28/2014 1991 (167) 7/28/2014 2003 (128) 7/28/2014 1973 (202) 7/28/2014 1981 (127) 7/28/2014 1976 (165) 7/28/2014 1996 (183) 7/28/2014 1981 (176) 7/28/2014 2010 (215) 7/28/2014 1978 (88) 7/28/2014 1978 (121) 7/28/2014 1974 (137) 7/28/2014 1984 (180) 7/28/2014 1990 (112) 7/28/2014 1981 (183) 7/28/2014 1986 (149) 7/28/2014 1982 (159) 7/28/2014 1984 (148) 7/28/2014 1993 (149) 7/28/2014 1996 (128) 7/28/2014 2005 (144) 7/28/2014 1986 (125) 7/28/2014 1992 (150) 7/28/2014 1993 (176) 7/28/2014 1991 (150) 7/28/2014 1993 (111) 7/28/2014 1993 (150) 7/28/2014 2003 (146) 7/28/2014 2001 (103) 7/28/2014 2006 Property City State Red Lobster Woodbridge VA Red Lobster Olympia Red Lobster Silverdale Red Lobster Spokane WA WA WA Red Lobster Ashwaubenon WI Red Lobster Eau Claire Red Lobster Greenfield Red Lobster Mt. Pleasant Red Lobster Wauwatosa WI WI WI WI Red Lobster Charleston WV Red Lobster Huntington WV Red Lobster Morgantown WV Red Lobster Parkersburg WV Red Lobster Casper Red Lobster Cheyenne Red Oak Village San Marcos Reef Services, LLC Gainesville Rite Aid Talladega Rite Aid Bear Rite Aid Tucker WY WY TX TX AL DE GA Rite Aid Jeffersonville IN Rite Aid Lawrenceburg KY Rite Aid Lexington Rite Aid Paris Rite Aid Scottsville Rite Aid Stanford Rite Aid Adams Rite Aid Bangor Rite Aid Rite Aid Buxton Dover- Foxcroft KY KY KY KY MA ME ME ME Rite Aid Fort Fairfield ME Rite Aid Fort Kent ME Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — 1,052 2,096 — 1,661 — 1,270 527 1,823 856 1,524 — 344 1,252 654 1,014 1,514 596 501 1,427 1,116 1,534 1,673 1,773 997 1,100 2,552 1,477 1,447 1,337 640 — — — — — — — — — — — — — — — 3,148 596 2,162 1,427 2,386 2,061 3,496 2,629 2,521 1,100 2,896 2,729 2,101 2,351 2,154 (175) 7/28/2014 1989 (169) 7/28/2014 1995 (90) 7/28/2014 1993 (205) 7/28/2014 2009 (107) 7/28/2014 1975 (146) 7/28/2014 1982 (135) 7/28/2014 1975 (192) 7/28/2014 2012 (98) 7/28/2014 1975 (205) 7/28/2014 2003 (211) 7/28/2014 1985 (160) 7/28/2014 2009 (157) 7/28/2014 1994 (166) 7/28/2014 2011 (56) 7/28/2014 1992 12,480 5,287 20,357 171 25,815 (3,006) 2/7/2014 2006 — — — — — — — — — — — — — — — — 86 377 851 793 824 567 — 743 153 152 300 724 — 256 117 387 285 1,311 2,702 1,419 2,472 2,267 1,943 2,228 2,904 2,886 1,200 2,896 — — — — — — — — — — — — — 2,131 — — — 2,659 1,821 2,064 F-185 371 1,688 3,553 2,212 3,296 2,834 1,943 2,971 3,057 3,038 1,500 3,620 2,131 2,915 1,938 2,451 (33) 6/25/2014 2009 (236) 1/8/2014 1997 (494) 1/8/2014 1999 (255) 1/8/2014 1996 (612) 11/30/2012 2008 (561) 11/30/2012 2008 (481) 11/30/2012 2007 (552) 11/30/2012 2008 (719) 11/30/2012 2007 (714) 11/30/2012 2009 (249) 7/30/2013 1958 (464) 5/19/2014 1998 (270) 5/19/2014 1997 (488) 1/8/2014 1999 (336) 1/8/2014 1998 (371) 1/8/2014 1999 Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Rite Aid Van Buren ME Rite Aid Bay City Rite Aid Burton Rite Aid West Branch Rite Aid Burlington Rite Aid Rite Aid Wilson Bristol Rite Aid Winchester MI MI MI NC NC NH NH Rite Aid Cheektowaga NY Rite Aid Rite Aid Genoa Lima Rite Aid Louisville Rite Aid Marion Rite Aid St. Marys Rite Aid Warren OH OH OH OH OH OH Rite Aid Wheelersburg OH Rite Aid Meadville Rite Aid Philadelphia Rite Aid Spartanburg PA PA SC Rite Aid Travelers Rest SC Rite Aid Memphis TN Rite Aid Murfreesboro TN Rite Aid Hayes VA Rite Aid Huntington WV Road Ranger Winnebago IL Rockwell Collins Sterling Ross Ross Highlands Ranch Austin Rubbermaid Winfield Rubbermaid Winfield VA CO TX KS KS — — — — — — — — — — — — — — — — — — — — — — — — — — 115 463 128 418 973 573 395 343 436 405 576 576 508 581 668 361 193 633 894 882 266 454 812 964 707 1,720 1,629 2,541 1,280 2,726 1,337 1,461 1,868 3,466 1,845 2,304 3,266 2,877 2,322 2,670 1,444 2,521 2,531 3,575 3,527 1,062 1,817 3,247 2,250 3,202 4,285 29,802 3,475 2,850 — — 658 819 4,795 2,631 15,555 12,725 1,056 20,060 Rubbermaid Bowling Green OH Rubbermaid Brimfield OH — — 714 13,564 1,552 29,495 F-186 — — (50) 70 — — 52 — — — — — — — — 65 — — — — 54 — — — — — — 700 — — — — 1,835 2,092 2,619 1,768 3,699 1,910 1,908 2,211 3,902 2,250 2,880 3,842 3,385 2,903 3,338 1,870 2,714 3,164 4,469 4,409 1,382 2,271 4,059 3,214 3,909 (318) 1/8/2014 1998 (226) 6/24/2014 1996 (523) 7/26/2013 1999 (192) 6/23/2014 1996 (500) 1/8/2014 2000 (277) 7/30/2013 2002 (275) 1/8/2014 1997 (344) 1/8/2014 1998 (569) 2/7/2014 2000 (331) 1/8/2014 1998 (570) 11/13/2012 2006 (825) 10/31/2012 2008 (712) 11/13/2012 2006 (362) 5/19/2014 2005 (426) 5/19/2014 1999 (237) 5/19/2014 1998 (450) 1/8/2014 1999 (409) 5/19/2014 1999 (557) 5/19/2014 2004 (549) 5/19/2014 2005 (176) 5/19/2014 2000 (283) 5/19/2014 1999 (506) 5/19/2014 2005 (557) 11/30/2012 2008 (531) 2/7/2014 1998 34,087 (3,537) 6/30/2014 2011 7,645 3,989 (704) 2/7/2014 2007 (520) 5/19/2014 2002 16,374 (3,914) 11/28/2012 2012 21,116 (5,761) 4/25/2012 2008 14,278 (2,861) 7/29/2013 2013 31,047 (7,122) 1/31/2013 2012 Property City State Encumbrances at December 31, 2016 Initial Costs (1) Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Buildings, Fixtures and Improvements Accumulated Depreciation (3) (5) Date Acquired Date of Construction Ruby Tuesday Dillon Ruby Tuesday Bartow Ruby Tuesday Orlando Ruby Tuesday London Ruby Tuesday Somerset Ryan's Buffet Commerce Ryan's Buffet Rome Ryan's Buffet Asheville CO FL FL KY KY GA GA NC Ryan's Buffet Clarksburg WV Sam's Club Hoover Sam's Club Colorado Springs AL CO Sam's Club Douglasville GA Sam's Southern Eatery Santa Rosa Commons Schlotzsky's Schmitz & Schmitz Kennesaw Pace Colorado Springs Gainesville Scotts Company Orrville Scotts Company Orrville Scotts Company Orrville SCP Distributors North Little Rock SCP Distributors Knoxville Sedwick Claims Management Serv Dublin Select Energy Services Select Energy Services Select Energy Services Select Energy Services Select Energy Services Select Energy Services Select Energy Services Select Energy Services Damascus Frierson Alderson Big Wells Chireno Cleburne Dilley Odessa Senor Panchos Orrville Shale Tank Truck Cleburne GA FL CO TX OH OH OH AR TN OH AR LA OK TX TX TX TX TX OH TX 1,628 1,916 — 1,493 1,120 1,470 1,848 — — (710) (263) — (647) (919) 1,261 2,204 (1,179) — 1,639 (1,305) Land 400 270 1,286 370 480 962 831 — — — — — — — — — — — — — 2,253 3,347 1,701 210 9,606 12,652 11,052 46 13,000 4,447 21,884 — — — — — — — — — — — — — — — — — — 530 29 278 611 609 258 251 945 530 260 260 353 388 154 308 460 99 476 530 1,950 2,502 1,134 11,576 1,665 900 8,520 800 4,954 1,150 1,820 5,470 2,333 1,416 1,998 176 547 F-187 — — — — — — — — — — (9) — — — — — — — — — — — — 2,028 2,186 576 1,600 1,600 1,785 1,760 2,286 334 (323) 6/27/2013 1995 (380) 6/27/2013 1995 — 7/31/2013 1998 (122) 6/27/2013 1995 (222) 6/27/2013 1995 (122) 2/7/2014 1996 (124) 2/7/2014 1983 (155) 2/7/2014 1996 (21) 1/8/2014 2001 11,859 (1,354) 2/7/2014 1989 15,999 (1,756) 2/7/2014 1998 12,753 (1,429) 2/7/2014 1999 256 (9) 6/27/2013 1995 26,331 (3,054) 2/7/2014 2008 1,060 1,979 2,780 1,745 (104) 6/27/2013 1997 (188) 6/25/2014 1930 (655) 9/28/2012 1950 (308) 7/30/2012 1950 12,185 (3,148) 7/30/2012 2006 1,914 1,151 9,465 1,330 5,214 1,410 2,173 5,858 2,487 1,724 2,458 275 1,023 (156) 11/20/2014 2006 (100) 11/20/2014 2012 (1,041) 6/26/2014 1997 (171) 6/12/2014 2009 (565) 6/12/2014 2010 (164) 6/12/2014 2008 (209) 6/12/2014 2011 (618) 6/25/2014 2011 (269) 6/25/2014 2008 (170) 6/25/2014 2012 (253) 6/25/2014 1982 (36) 6/27/2013 1990 (69) 6/25/2014 2007 Property City State Shale Tank Truck Midland Sherwin-Williams Angola Sherwin-Williams Muskegon Sherwin-Williams Ashtabula Sherwin-Williams Boardman Shoney's Gadsden Shoney's Oxford Shoney's Grayson Shoney's Grenada Shoney's Hattiesburg Shoney's Jackson TX IN MI OH OH AL AL KY MS MS MS Shoney's Summerville SC Shoney's Cookeville TN Shoney's Lawrenceburg TN Shoney's Charleston Shoney's Lewisburg Shoney's Princeton Shoney's Ripley Shopko Sierra Pines L'Anse The Woodlands Smokey Bones Morrow Smokey Bones Pittsburgh Sonic Drive-In Wadesboro Sonny's Real Pit BBQ Sonny's Real Pit BBQ Sonny's Real Pit BBQ Sonny's Real Pit BBQ Venice Athens Conyers Marietta Sovereign Bank Linden Sovereign Bank Spaghetti Warehouse Spaghetti Warehouse Spaghetti Warehouse Kennett Square Marietta Aurora Elk Grove Village WV WV WV WV MI TX GA PA NC FL GA GA GA NJ PA GA IL IL Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — 757 249 187 176 206 220 670 420 270 730 360 350 510 330 190 110 90 200 382 939 996 1,524 704 825 707 25 406 809 618 572 800 760 873 543 642 593 599 1,736 — — — — — — — — — — — — — — — — — — — 1,696 1,245 1,711 880 1,031 927 695 826 1,079 1,348 932 1,150 1,270 1,203 733 752 683 799 (124) 6/25/2014 2012 (146) 5/19/2014 2001 (234) 2/7/2014 2008 (83) 5/19/2014 2003 (98) 5/19/2014 2003 (140) 6/27/2013 1995 (5) 6/27/2013 1995 (81) 6/27/2013 1995 (148) 7/31/2013 1995 (122) 6/27/2013 1995 (113) 6/27/2013 1995 (159) 6/27/2013 1995 (151) 6/27/2013 1995 (173) 6/27/2013 1995 (108) 6/27/2013 1995 (127) 6/27/2013 1995 (118) 6/27/2013 1995 (119) 6/27/2013 1995 2,118 (268) 5/13/2014 2009 11,297 5,219 19,196 4,706 29,121 (1,006) 11/5/2013 2014 — — — — — — — — — — — — 390 1,490 137 338 460 450 290 601 837 800 480 550 2,184 390 266 507 1,280 663 1,772 2,329 2,412 276 805 299 F-188 — — — — — — — — — — — — 2,574 1,880 403 845 1,740 1,113 2,062 2,930 3,249 1,076 1,285 849 (433) 6/27/2013 1995 (80) 7/28/2014 2000 (52) 6/27/2013 2007 (104) 7/31/2013 1978 (254) 6/27/2013 1995 (131) 6/27/2013 1995 (351) 6/27/2013 1995 (386) 1/8/2014 1945 (401) 1/8/2014 1963 (55) 6/27/2013 1995 (160) 6/27/2013 1995 (59) 6/27/2013 1995 Property Spaghetti Warehouse Spaghetti Warehouse Spaghetti Warehouse Spaghetti Warehouse Spaghetti Warehouse Spaghetti Warehouse Spaghetti Warehouse Spaghetti Warehouse City State Oklahoma City OK Tulsa Memphis Arlington Dallas Houston Plano San Antonio OK TN TX TX TX TX TX Sprouts Centennial CO St. Luke's Urgent Care Creve Coeur MO Staples Staples Staples Pensacola Helena Houston Steak 'n Shake Tampa Stearns Crossing Bartlett Stop & Shop Levittown Stop & Shop Cranston FL MT TX FL IL PA RI Stripes Stripes Stripes Stripes Stripes Stripes Stripes Stripes Stripes Stripes Stripes Stripes Stripes Stripes Stripes Portales NM Andrews Brady Brownsville Carrizo Springs TX TX TX TX Corpus Christi TX Corpus Christi TX Corpus Christi TX Eagle Pass Edinburg Edinburg Edinburg TX TX TX TX Fort Stockton TX Haskell Houston TX TX Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — 570 530 100 630 810 980 540 1,140 1,581 1,644 1,539 1,159 1,815 1,169 — 951 7,060 4,437 — — — — — — — — — — — — — — — — — 4,716 4,309 306 406 203 613 496 681 1,011 803 762 1,286 488 450 1,237 143 1,204 1,193 1,174 — — 283 (383) 1,400 1,656 — — 2,284 (1,575) 1,060 — 1,434 (1,063) — — — — — 785 154 — — — — — — — — — — — — — — — — — 6,394 4,497 3,354 2,452 3,192 — 5,970 9,955 — 2,595 2,302 3,205 3,195 2,526 2,047 3,125 3,109 2,453 1,546 2,499 2,818 3,812 2,554 2,069 F-189 1,763 1,704 — 2,030 2,466 1,689 1,600 1,511 7,975 6,141 4,893 3,611 4,361 1,736 (237) 6/27/2013 1995 (233) 6/27/2013 1995 — 6/27/2013 1995 (278) 6/27/2013 1995 (328) 6/27/2013 1995 — 6/27/2013 1995 (210) 6/27/2013 1995 — 6/27/2013 1995 (1,044) 2/7/2014 2009 (758) 2/7/2014 2010 (444) 2/7/2014 2010 (345) 2/7/2014 2012 (425) 2/7/2014 2008 (4) 7/31/2013 1999 10,561 (1,146) 2/7/2014 1999 14,671 (1,553) 11/5/2013 1995 4,309 2,901 2,708 3,408 3,808 3,022 2,728 4,136 3,912 3,215 2,832 2,987 3,268 5,049 2,697 3,273 — 2/7/2014 2011 (452) 2/7/2014 2010 (501) 2/15/2013 2008 (513) 2/7/2014 2007 (524) 2/7/2014 2007 (453) 2/7/2014 2010 (342) 2/7/2014 2007 (516) 2/7/2014 2007 (514) 2/7/2014 2007 (412) 2/7/2014 2009 (262) 2/7/2014 1999 (444) 2/7/2014 2007 (419) 2/7/2014 2007 (736) 2/7/2014 2010 (442) 2/7/2014 2010 (334) 2/7/2014 2007 Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Stripes Stripes Stripes Stripes Stripes Stripes Stripes Stripes Stripes Stripes Stripes Stripes Stripes La Feria Laredo Laredo Midland Mission Mission Odessa Odessa Pharr Ranchito Rio Hondo San Angelo San Angelo Subway Knoxville TX TX TX TX TX TX TX TX TX TX TX TX TX TN Sun Trust Bank Coral Springs FL Sun Trust Bank Destin Sun Trust Bank Dunedin Sun Trust Bank Dunnellon Sun Trust Bank Kissimmee Sun Trust Bank Lake Wales Sun Trust Bank Lakeland Sun Trust Bank Melbourne Sun Trust Bank North Port Sun Trust Bank Palm Harbor Sun Trust Bank Plant City Sun Trust Bank Port Orange Sun Trust Bank Port Orange Sun Trust Bank S. Daytona Beach Sun Trust Bank Tallahassee Sun Trust Bank West Palm Beach Sun Trust Bank Atlanta Sun Trust Bank Atlanta FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL GA GA — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 219 581 626 1,098 742 1,007 301 803 281 498 293 772 1,006 160 654 572 479 82 1,167 671 598 464 460 535 751 590 563 592 828 1,026 1,018 1,435 1,970 2,367 2,338 4,857 550 3,178 2,895 3,596 2,531 2,671 2,640 4,025 3,277 349 1,525 1,717 1,917 463 778 671 1,110 1,392 1,381 1,249 1,753 1,095 1,314 1,099 1,933 1,026 1,527 478 F-190 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 2,189 2,948 2,964 5,955 1,292 4,185 3,196 4,399 2,812 3,169 2,933 4,797 4,283 509 2,179 2,289 2,396 545 1,945 1,342 1,708 1,856 1,841 1,784 2,504 1,685 1,877 1,691 2,761 2,052 2,545 1,913 (429) 2/15/2013 2008 (418) 2/7/2014 2010 (420) 2/7/2014 2010 (794) 2/7/2014 2006 (87) 2/7/2014 1986 (490) 2/7/2014 2003 (480) 2/7/2014 2011 (857) 2/7/2014 1998 (551) 2/15/2013 1995 (436) 2/7/2014 2010 (575) 2/15/2013 2008 (660) 2/7/2014 1997 (540) 2/7/2014 2007 (67) 6/27/2013 1995 (303) 4/12/2013 1996 (341) 4/12/2013 1998 (389) 3/22/2013 1995 (94) 3/22/2013 1980 (155) 4/12/2013 1981 (136) 3/22/2013 1988 (221) 4/12/2013 1988 (277) 4/12/2013 1987 (281) 3/22/2013 1982 (248) 4/12/2013 1994 (356) 3/22/2013 2000 (222) 3/22/2013 1989 (267) 3/22/2013 1982 (218) 4/12/2013 1985 (384) 4/12/2013 1991 (208) 3/22/2013 1981 (303) 4/12/2013 1965 (95) 4/12/2013 1970 Property City State Sun Trust Bank Bowdon Sun Trust Bank Dunwoody Sun Trust Bank Jesup Sun Trust Bank St. Simons Island GA GA GA GA Sun Trust Bank Annapolis MD Sun Trust Bank Ellicott City MD Sun Trust Bank Frederick Sun Trust Bank Waldorf Sun Trust Bank Belmont Sun Trust Bank Burlington Sun Trust Bank Carrboro Sun Trust Bank Concord Sun Trust Bank Durham Sun Trust Bank Greensboro Sun Trust Bank Lexington Sun Trust Bank Matthews Sun Trust Bank Mocksville Sun Trust Bank Monroe Sun Trust Bank Oakboro Sun Trust Bank Raleigh Sun Trust Bank Yadkinville Sun Trust Bank Zebulon Sun Trust Bank Anderson Sun Trust Bank Belton MD MD NC NC NC NC NC NC NC NC NC NC NC NC NC NC SC SC Sun Trust Bank Travelers Rest SC Sun Trust Bank Chattanooga Sun Trust Bank La Vergne Sun Trust Bank Madison Sun Trust Bank Nashville Sun Trust Bank Nashville Sun Trust Bank Nashville Sun Trust Bank Cheriton TN TN TN TN TN TN VA Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 416 1,784 184 1,363 2,653 1,728 991 523 616 446 512 707 747 403 447 382 978 204 360 658 200 515 574 473 746 223 171 286 567 1,598 613 90 1,247 (1,395) 1,460 1,657 734 2,170 931 991 2,962 924 545 512 707 1,388 748 831 382 2,933 — — — — — — — — (403) — — — — — — — 1,837 (1,319) 540 658 371 630 (483) — (368) (546) 1,065 (1,018) (943) (866) — — — — — — — 578 746 1,263 209 1,143 305 1,308 613 510 F-191 268 3,244 1,841 2,097 4,823 2,659 1,982 3,485 1,540 588 1,024 1,414 2,135 1,151 1,278 764 3,911 722 417 — 3/22/2013 1900 (297) 3/22/2013 1972 (337) 3/22/2013 1964 (149) 3/22/2013 1975 (402) 7/23/2013 1976 (189) 3/22/2013 1975 (197) 4/26/2013 1880 (602) 3/22/2013 1964 (188) 3/22/2013 1970 — 4/12/2013 1995 (102) 4/12/2013 1980 (141) 4/12/2013 1988 (276) 4/12/2013 1973 (149) 4/12/2013 1962 (165) 4/12/2013 2001 (78) 3/22/2013 1971 (596) 3/22/2013 2000 (19) 4/12/2013 1920 — 7/23/2013 1970 1,316 (134) 3/22/2013 1977 203 599 621 108 626 1,486 380 1,429 872 2,906 1,226 600 (2) 4/12/2013 1975 — 3/22/2013 1972 (5) 3/22/2013 1998 — 4/12/2013 1967 (4) 4/12/2013 1995 (257) 3/22/2013 1953 (42) 3/22/2013 1985 (232) 3/22/2013 1953 (57) 7/23/2013 1954 (260) 4/12/2013 1992 (122) 4/12/2013 1970 (104) 3/22/2013 1975 Sunset Valley TX 17,124 14,283 28,351 Property City State Sun Trust Bank Lynchburg Sun Trust Bank Norfolk Sun Trust Bank Petersburg Sun Trust Bank Richmond Sun Trust Bank Richmond VA VA VA VA VA Sun Trust Bank Rocky Mount VA Sunbelt Rental Mabelvale Sunbelt Rental Memphis AR TN Sunoco Merritt Island FL Sunset Valley Homestead Superior Energy Services Gainesville TX Sweet Tomato Coral Springs FL Synovus Bank Tampa Sysmex Lincolnshire Taco Bell Albertville Taco Bell Cullman Taco Bell Daphne Taco Bell Taco Bell Dora Foley Taco Bell Hartselle Taco Bell Jasper Taco Bell Mobile Taco Bell Saraland Taco Bell Warrior Taco Bell Winfield Taco Bell Corona Taco Bell Fairfield Taco Bell Fontana Taco Bell Montclair FL IL AL AL AL AL AL AL AL AL AL AL AL CA CA CA CA Taco Bell Moreno Valley CA Taco Bell Rancho Cucamonga Taco Bell Rubidoux CA CA Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — 251 656 102 277 224 265 240 365 540 466 437 306 416 2,012 1,504 894 929 2,162 — — — 284 790 985 10,475 1,625 2,298 22,500 4,143 36,987 — — — — — — — — — — — — — — — — — — 419 375 180 348 360 378 445 160 150 364 278 306 500 524 322 367 415 415 778 1,053 1,278 813 1,460 781 814 1,973 1,063 675 834 1,138 1,327 1,016 900 998 1,210 1,223 F-192 — — — — — — — 128 — 16 (3) — — — — — — — — — — — — — — — — — — — — — 717 1,093 408 693 2,236 1,769 1,134 1,422 2,702 (95) 3/22/2013 1973 (87) 4/12/2013 1990 (61) 4/12/2013 1975 (84) 3/22/2013 1959 (400) 4/12/2013 1909 (292) 5/22/2013 1961 (115) 6/4/2014 2006 (120) 9/26/2014 1995 (256) 5/19/2014 2009 42,650 (4,109) 2/7/2014 2007 10,756 (3,826) 7/24/2014 1982 2,415 3,283 (322) 6/27/2013 1995 (498) 12/31/2012 1959 41,130 (5,181) 2/7/2014 2010 1,197 1,428 1,458 1,161 1,820 1,159 1,259 2,133 1,213 1,039 1,112 1,444 1,827 1,540 1,222 1,365 1,625 1,638 (142) 7/31/2013 1995 (207) 6/27/2013 1995 (245) 6/27/2013 1995 (148) 7/31/2013 1995 (280) 6/27/2013 1995 (153) 6/27/2013 1995 (160) 6/27/2013 1995 (378) 6/27/2013 1995 (204) 6/27/2013 1995 (123) 7/31/2013 1995 (152) 7/31/2013 1995 (223) 6/27/2013 1990 (260) 6/27/2013 1985 (199) 6/27/2013 1992 (177) 6/27/2013 1996 (196) 6/27/2013 1992 (238) 6/27/2013 1992 (240) 6/27/2013 1992 Property City State Encumbrances at December 31, 2016 Taco Bell Suisun City Taco Bell Vacaville Taco Bell Vacaville Taco Bell Pensacola Taco Bell Jacksonville Taco Bell Jacksonville Taco Bell Augusta Taco Bell Hephzibah Taco Bell Jesup Taco Bell Kennesaw Taco Bell Waycross Taco Bell Marion CA CA CA FL FL FL GA GA GA GA GA IN Taco Bell Crawfordsville IN Taco Bell Frankfort Taco Bell Hartford City Taco Bell Kokomo Taco Bell Lafayette Taco Bell Lebanon Taco Bell Noblesville Taco Bell Tipton IN IN IN IN IN IN IN Taco Bell North Corbin KY Taco Bell Detroit Taco Bell St. Louis Taco Bell Wentzville Taco Bell Brunswick Taco Bell Taco Bell Dayton North Olmstead Taco Bell Kingston Taco Bell Dallas Taco Bell / KFC Texarkana Taco Bell / KFC Minden Taco Bell / KFC Shreveport MI MO MO OH OH OH TN TX AR LA LA — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — Initial Costs (1) Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Buildings, Fixtures and Improvements Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 1,419 1,513 1,375 1,897 1,167 1,383 1,292 930 715 601 1,115 921 934 893 889 798 912 1,348 545 936 1,082 704 1,951 1,168 1,267 732 904 714 1,225 630 639 514 F-193 1,774 2,035 2,559 2,037 1,607 1,723 1,512 1,260 945 763 1,285 1,417 1,168 992 988 997 1,216 1,685 908 1,040 1,221 828 2,141 1,578 1,667 861 1,294 994 1,625 741 913 857 (259) 7/31/2013 1986 (297) 6/27/2013 1985 (270) 6/27/2013 1994 (363) 6/27/2013 1995 (224) 6/27/2013 1995 (265) 6/27/2013 1995 (248) 6/27/2013 1995 (178) 6/27/2013 1995 (137) 6/27/2013 1995 (118) 6/27/2013 1984 (214) 6/27/2013 1995 (168) 7/31/2013 1994 (170) 7/31/2013 1991 (163) 7/31/2013 1985 (162) 7/31/2013 1978 (146) 7/31/2013 1993 (166) 7/31/2013 1990 (246) 7/31/2013 1983 (99) 7/31/2013 2005 (171) 7/31/2013 1998 (212) 6/27/2013 1995 (128) 7/31/2013 1989 (331) 6/27/2013 1995 (224) 6/27/2013 1995 (243) 6/27/2013 1995 (134) 7/31/2013 1995 (173) 6/27/2013 1995 (137) 6/27/2013 1995 (235) 6/27/2013 1995 (115) 7/31/2013 1980 (117) 7/31/2013 1995 (94) 7/31/2013 1995 Land 355 522 1,184 140 440 340 220 330 230 162 170 496 234 99 99 199 304 337 363 104 139 124 190 410 400 129 390 280 400 111 274 343 Property City State Taco Bell / KFC Shreveport Taco Bell / KFC Shreveport Taco Bell / KFC Shreveport Taco Bell / KFC Dunkirk Taco Bell / KFC Geneva Taco Bell / KFC Canonsburg Taco Bell / KFC Pittsburgh Taco Bell / KFC Mount Pleasant Taco Bell / KFC New Boston Taco Bell / KFC Green Bay Taco Bell / KFC Milwaukee LA LA LA NY NY PA PA TX TX WI WI Taco Bell / KFC Benwood WV Taco Bell / Pizza Hut Dallas Taco Bueno Hutchinson Taco Bueno Belton Taco Bueno Springfield Taco Bueno Arlington Taco Bueno Frisco Taco Bueno Lubbock Taco Bueno N. Richland Hills Taco Bueno Waco Taco Bueno Waco Taco Cabana Austin Taco Cabana Pasadena Taco Cabana San Antonio Taco Cabana San Antonio Taco Cabana San Antonio Taco Cabana San Antonio Taco Cabana Schertz Talbots Talbots Hingham Lakeville TCF Bank Crystal TX KS MO MO TX TX TX TX TX TX TX TX TX TX TX TX TX MA MA MN Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 616 427 352 800 569 176 180 106 125 470 533 123 420 561 476 753 597 601 228 423 595 595 700 420 600 500 280 500 520 753 522 528 978 695 1,586 269 952 1,127 574 1,055 287 1,582 841 701 753 895 577 561 567 892 893 2,105 1,420 1,955 1,740 1,695 1,766 1,408 23,363 3,009 27,080 22,508 6,302 25,209 — 640 642 F-194 — — — — — — 3 — — — — 4 — — — — — — — — — — — — — — — — — — — — 1,369 (137) 7/31/2013 1995 949 880 1,778 1,264 1,762 452 1,058 1,252 1,044 1,588 414 2,002 1,402 1,177 1,506 1,492 1,178 789 990 1,487 1,488 2,805 1,840 2,555 2,240 1,975 2,266 1,928 (95) 7/31/2013 1997 (96) 7/31/2013 1998 (178) 7/31/2013 2000 (127) 7/31/2013 1999 (289) 7/31/2013 1996 (46) 10/1/2013 1995 (174) 7/31/2013 1992 (206) 7/31/2013 1995 (105) 7/31/2013 1986 (207) 6/27/2013 1978 (49) 10/1/2013 1995 (303) 6/27/2013 1995 (153) 7/31/2013 2000 (138) 6/27/2013 2006 (137) 7/31/2013 2006 (163) 7/31/2013 2000 (113) 6/27/2013 2000 (110) 6/27/2013 2000 (111) 6/27/2013 2000 (163) 7/31/2013 1995 (163) 7/31/2013 2000 (403) 6/27/2013 1995 (272) 6/27/2013 1995 (375) 6/27/2013 1995 (334) 6/27/2013 1995 (325) 6/27/2013 1995 (338) 6/27/2013 1995 (270) 6/27/2013 1995 30,089 (4,736) 5/24/2013 1980 31,511 (5,574) 5/17/2013 1987 1,282 (119) 6/27/2013 1995 Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State TD Bank Falmouth ME 19,608 4,057 23,689 (500) 27,246 (4,245) 3/18/2013 2002 2,666 40,981 (7,010) 36,637 (1,048) 11/5/2013 1999 Teva Pharmaceuticals Malvern Texas Roadhouse Cedar Rapids Texas Roadhouse Ammon Texas Roadhouse Shively Texas Roadhouse Concord Texas Roadhouse Gastonia Texas Roadhouse Hickory Texas Roadhouse College Station PA IA ID KY NC NC NC TX Texas Roadhouse Grand Prairie TX Texas Roadhouse Kenosha TGI Fridays Royal Palm Beach TGI Fridays Ann Arbor TGI Fridays Kentwood TGI Fridays Novi TGI Fridays Blasdell TGI Fridays The Fresh Market The Medicines Co. The Shoppes at Port Arthur Warwick Winston- Salem Parsippany Port Arthur WI FL MI MI MI NY RI NC NJ TX The UPS Store Elizabethtown KY The Vitamin Shoppe The Vitamin Shoppe Evergreen Park Ashland Thorntons Oil Bloomington Thorntons Oil Franklin Park Thorntons Oil Joliet Thorntons Oil Oaklawn Thorntons Oil Ottawa Thorntons Oil Plainfield Thorntons Oil Roselle Thorntons Oil South Elgin Thorntons Oil Springfield IL VA IL IL IL IL IL IL IL IL IL — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 430 490 540 650 570 580 670 780 1,061 1,530 547 281 1,042 1,215 1,228 196 476 2,399 1,184 1,403 953 1,203 565 862 661 1,239 926 2,194 1,206 2,055 2,130 1,544 1,831 2,299 1,867 1,835 1,530 1,640 2,533 1,042 1,913 — — — — — — — — (14) — — — — — 2,775 (1,252) 4,562 — 329 — 778 — — — — — 1,427 19,663 733 1,882 2,539 898 278 — — — — — 2,003 1,338 2,194 1,688 2,514 F-195 27,700 5,150 50,051 8,077 3,331 14,992 1,460 10,336 2,624 1,696 2,595 2,780 2,114 2,411 2,969 2,647 2,882 3,060 2,187 2,814 2,084 3,128 2,751 4,758 (435) 6/27/2013 1995 (239) 6/27/2013 1995 (407) 6/27/2013 1995 (422) 6/27/2013 1995 (306) 6/27/2013 1995 (363) 6/27/2013 1995 (456) 6/27/2013 1995 (370) 6/27/2013 1995 (373) 6/27/2013 2001 (315) 7/31/2013 2001 (337) 7/31/2013 1998 (521) 7/31/2013 1983 (215) 7/31/2013 1994 (389) 6/27/2013 2000 (177) 6/27/2013 1983 (626) 2/7/2014 2007 55,530 (6,666) 2/7/2014 2009 18,323 (2,148) 2/7/2014 2008 12,574 (2,051) 9/24/2013 2001 1,903 (297) 4/19/2013 2012 22,062 (3,748) 11/5/2013 2013 1,917 3,285 3,492 2,379 2,568 2,200 2,855 2,927 3,440 (142) 2/7/2014 1992 (323) 2/7/2014 1989 (433) 2/7/2014 2000 (167) 2/7/2014 1994 (352) 2/7/2014 2006 (242) 2/7/2014 1995 (362) 2/7/2014 1996 (317) 2/7/2014 1995 (483) 2/7/2014 1994 Property City State Encumbrances at December 31, 2016 Thorntons Oil Summit Thorntons Oil Waukegan Thorntons Oil Westmont Thorntons Oil Clarksville Thorntons Oil Edinburgh Thorntons Oil Evansville Thorntons Oil Evansville Thorntons Oil Jeffersonville Thorntons Oil Terre Haute Thorntons Oil Henderson Thorntons Oil Henderson Thorntons Oil Louisville Thorntons Oil Shelbyville Thorntons Oil Galloway Tiffany & Co. Parsippany IL IL IL IN IN IN IN IN IN KY KY KY KY OH NJ Tilted Kilt Hendersonville TN Time Warner Cable Milwaukee Tire Kingdom Auburndale Tire Kingdom Dublin Tire Kingdom Greenville WI FL OH SC Tire Warehouse Fitchburg MA Tire Warehouse Bangor Tires Plus Duluth TitleMax Gainesville ME GA GA TJ Maxx Philadelphia PA T-Mobile Nashville Tommy Addison's Edgewood TN FL Toys R Us Coral Springs FL Tractor Supply Oneonta Tractor Supply Summerdale Tractor Supply Tuscaloosa Tractor Supply Little Rock AL AL AL AR — — — — — — — — — — — — — — — — — 1,205 717 — — — — — — — — — — 1,187 — 1,500 Initial Costs (1) Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Buildings, Fixtures and Improvements Accumulated Depreciation (3) (5) Date Acquired Date of Construction Land 2,233 875 760 1,319 685 467 602 1,233 732 659 483 637 299 547 109 1,421 3,069 687 1,505 1,479 1,398 1,533 1,829 3,271 1,778 1,680 2,036 1,550 — — — — — — — — — — — — — — — — 2,342 2,296 3,829 2,006 2,190 1,946 2,000 2,766 2,561 3,930 2,261 2,317 2,335 2,097 (22) 2/7/2014 2000 (245) 2/7/2014 1999 (503) 2/7/2014 1997 (140) 2/7/2014 2005 (261) 2/7/2014 1996 (261) 2/7/2014 1987 (245) 2/7/2014 1990 (287) 2/7/2014 1995 (327) 2/7/2014 1995 (560) 2/7/2014 1971 (278) 2/7/2014 2007 (260) 2/7/2014 1994 (336) 2/7/2014 1991 (259) 2/7/2014 1998 83,329 (15,456) 11/5/2013 1997 1,073 (151) 6/27/2013 1995 2,248 81,081 310 763 3,081 22,512 424 26,017 (4,068) 11/5/2013 2001 609 373 499 203 289 777 221 9,889 1,190 366 4,264 359 276 746 930 1,571 1,119 1,367 704 1,400 1,259 270 84,953 15,847 447 5,289 1,438 2,470 1,979 2,035 F-196 — — — — — — — — — — — — — — — 2,180 1,492 1,866 907 1,689 2,036 491 (248) 2/7/2014 2010 (306) 4/30/2012 2003 (221) 3/28/2014 1997 (140) 6/27/2013 1982 (278) 6/27/2013 1977 (213) 2/21/2014 2001 (55) 7/31/2013 2007 94,842 (16,194) 11/5/2013 2001 17,037 (2,634) 11/5/2013 2002 813 9,553 1,797 2,746 2,725 2,965 (92) 7/31/2013 2003 (765) 2/7/2014 2010 (254) 4/18/2013 1983 (317) 2/7/2014 2010 (253) 2/7/2014 2012 (260) 2/7/2014 2009 Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Tractor Supply Auburn Tractor Supply Dixon Tractor Supply Jackson Tractor Supply Los Banos Tractor Supply Middletown Tractor Supply Mims Tractor Supply Bainbridge Tractor Supply Rincon Tractor Supply Alton Tractor Supply Mishawaka Tractor Supply Sellersburg Tractor Supply St. John Tractor Supply Lawrence Tractor Supply Topeka Tractor Supply Glasgow Tractor Supply Grayson Tractor Supply Paducah Tractor Supply Gray CA CA CA CA DE FL GA GA IL IN IN IN KS KS KY KY KY LA — 1,175 2,962 1,619 — 1,209 3,469 1,213 — — — — 1,404 — 1,433 1,487 310 687 978 565 620 762 2,247 1,715 1,377 1,678 — — — 2,049 361 446 453 540 393 550 Tractor Supply Belchertown MA 1,823 1,148 Tractor Supply Millbury Tractor Supply Southwick Tractor Supply Augusta Tractor Supply Jonesville Tractor Supply Negaunee MA MA ME MI MI Tractor Supply Jefferson City MO Tractor Supply Nixa Tractor Supply Sedalia Tractor Supply Troy Tractor Supply Union Tractor Supply Franklin Tractor Supply Murphy Tractor Supply Plaistow MO MO MO MO NC NC NH — 806 2,428 1,601 1,423 — — 1,125 1,346 1,090 1,286 1,404 1,480 1,402 — 530 267 488 490 476 480 730 589 434 990 638 — — — — — — — — 59 — — — — — — — — — — — — — — — — — — — 13 — — — 2,901 4,044 3,640 3,638 3,293 2,787 2,445 2,016 3,062 2,683 2,146 3,397 2,637 1,785 1,812 2,709 1,574 2,202 3,179 3,094 3,583 2,756 2,364 1,953 1,877 2,040 1,782 2,587 3,012 2,629 2,090 2,552 F-197 4,076 5,663 4,849 4,851 4,780 3,097 3,132 2,994 3,686 3,303 2,908 5,112 2,998 2,231 2,265 3,249 1,967 2,752 4,327 3,900 5,184 3,286 2,631 2,441 2,367 2,516 2,262 3,317 3,614 3,063 3,080 3,190 (383) 2/7/2014 2012 (538) 2/7/2014 2007 (459) 2/7/2014 2012 (672) 2/28/2013 2009 (407) 2/7/2014 2007 (426) 10/10/2013 2012 (300) 2/7/2014 2008 (249) 2/7/2014 2007 (384) 2/7/2014 2008 (339) 2/7/2014 2011 (280) 2/7/2014 2010 (455) 2/7/2014 2007 (340) 2/7/2014 2010 (280) 5/19/2014 2006 (279) 5/19/2014 2005 (347) 2/7/2014 2011 (249) 5/19/2014 1995 (459) 8/7/2012 2011 (423) 2/7/2014 2009 (359) 6/26/2014 2013 (474) 2/7/2014 2008 (363) 2/7/2014 2009 (329) 3/28/2014 2005 (423) 6/12/2012 2010 (238) 2/7/2014 2009 (266) 2/7/2014 2009 (238) 2/7/2014 2010 (325) 2/7/2014 2009 (369) 2/7/2014 2008 (337) 2/7/2014 2009 (281) 2/7/2014 2010 (390) 10/10/2013 2012 Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Tractor Supply Plymouth NH 2,074 Tractor Supply Allentown Tractor Supply Sicklerville NJ NJ Tractor Supply Farmington NM Tractor Supply Roswell Tractor Supply Silver City Tractor Supply Macedon Tractor Supply Hamilton Tractor Supply Wauseon Tractor Supply Chickasha Tractor Supply Glenpool Tractor Supply Stillwater Tractor Supply Gibsonia Tractor Supply Columbia Tractor Supply Irmo Tractor Supply Ballinger Tractor Supply Del Rio Tractor Supply Edinburg Tractor Supply Kenedy Tractor Supply Pearsall Tractor Supply Rio Grande Tractor Supply Woodstock Trader Joe's Sarasota NM NM NY OH OH OK OK OK PA SC SC TX TX TX TX TX TX VA FL Trader Joe's Lexington KY Tumbleweed Terre Haute IN Tumbleweed Louisville Tumbleweed Mayesville Tumbleweed Owensboro KY KY KY Tumbleweed Bellefontaine OH Tumbleweed Springfield Tumbleweed Wooster Tumbleweed Zanesville OH OH OH 424 697 1,931 1,091 947 716 168 675 931 599 359 205 — — — — — — 932 1,374 — 1,180 1,205 1,648 1,044 — — 1,248 — — 1,197 1,177 — — — — — — — — — — — — 952 725 476 927 768 309 318 469 524 1,646 2,287 434 468 353 355 234 549 342 639 16 — — — — — — — — 160 — — — — 62 — — — — — — — — — — — — — — — — — 2,430 3,949 4,302 2,194 2,181 2,380 1,591 1,472 2,128 2,056 2,447 2,715 2,778 2,222 2,171 2,477 2,044 3,163 2,372 2,551 1,095 2,098 5,416 3,795 1,303 1,404 823 1,420 938 1,280 799 1,491 F-198 2,870 4,646 6,233 3,285 3,128 3,096 1,759 2,147 3,059 2,815 2,806 2,920 3,822 3,174 2,958 2,953 2,971 3,931 2,681 2,869 1,564 2,622 7,062 6,082 1,737 1,872 1,176 1,775 1,172 1,829 1,141 2,130 (474) 11/29/2012 2011 (933) 1/27/2012 2008 (534) 2/7/2014 2009 (306) 3/28/2014 2012 (283) 2/7/2014 2009 (332) 3/28/2014 2012 (215) 4/29/2014 1992 (273) 2/7/2014 1975 (290) 2/7/2014 2007 (296) 3/28/2014 2014 (308) 2/7/2014 2009 (340) 2/7/2014 2009 (362) 2/7/2014 2009 (274) 2/7/2014 2011 (281) 2/7/2014 2009 (302) 2/7/2014 2010 (256) 2/7/2014 2009 (383) 2/7/2014 2009 (288) 2/7/2014 2010 (313) 2/7/2014 2009 (237) 6/19/2012 1993 (315) 5/19/2014 2004 (822) 2/7/2014 2012 (601) 2/7/2014 2012 (268) 7/31/2013 1997 (289) 7/31/2013 2001 (169) 7/31/2013 2000 (292) 7/31/2013 1997 (193) 7/31/2013 1999 (263) 7/31/2013 1998 (164) 7/31/2013 1997 (307) 7/31/2013 1998 Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — 1,454 205 417 742 164 547 2,788 1,861 2,289 2,083 2,123 10,050 2,692 17,973 — — — — — — 2,993 2,278 3,031 2,247 2,670 (417) 2/7/2014 1998 (294) 2/7/2014 2000 (313) 2/7/2014 2013 (294) 2/7/2014 2012 (297) 2/7/2014 2010 20,665 (2,203) 2/7/2014 2004 4,727 18,087 114 22,928 (3,356) 2/7/2014 1982 Property City State Tutor Time Downingtown PA Tutor Time Austin Ulta Salon Jonesboro Ulta Salon Fort Gratiot Ulta Salon Jackson United Technologies Bradenton University Plaza Flagstaff US Bank Alsip US Bank Calumet City US Bank Chicago US Bank Chicago US Bank US Bank Chicago Chicago Heights TX AR MI TN FL AZ IL IL IL IL IL IL US Bank Elmwood Park IL US Bank US Bank US Bank Evergreen Park Lyons Olympia Fields US Bank Orland Hills US Bank Westchester US Bank Wilmington US Bank Fayetteville US Bank Garfield Height IL IL IL IL IL IL NC OH VA Clinic Oceanside Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Cullman Jasper Mobile Prattville Tuscaloosa Pine Bluff Searcy Mesa CA AL AL AL AL AL AR AR AZ 226 168 189 267 191 182 431 167 214 426 847 577 127 2,646 1,253 — — — — 366 330 608 165 — — 334 172 — — — — — — 1,292 — — — — — — — — USG Corporation Libertyville IL 14,807 2,593 10,283 1,280 393 81 1,511 1,082 1,637 2,441 944 1,212 1,704 2,327 853 1,872 1,741 1,016 — — — — — — — — — — — — — — — — 1,506 (418) 8/1/2010 1981 561 270 1,778 1,273 1,819 2,872 1,111 1,426 2,130 3,580 1,219 2,202 2,349 1,181 (99) 4/26/2012 1975 (20) 4/26/2012 1990 (494) 8/1/2010 1923 (353) 8/1/2010 1979 (347) 1/24/2013 1996 (763) 8/1/2010 1984 (309) 8/1/2010 1984 (396) 8/1/2010 1959 (430) 4/26/2012 1974 (504) 12/14/2012 1995 (177) 2/22/2013 1986 (575) 8/1/2010 1966 (239) 2/7/2014 2012 (181) 1/8/2014 1958 12,876 (1,481) 3/28/2014 1965 27,750 9,489 33,812 105 43,406 (4,460) 2/7/2014 2010 2,390 (2,144) 1,093 (40) 2/7/2014 1996 2,545 (2,787) 276 (162) 1,038 1,802 (1,871) 244 105 231 191 1,306 (1,549) 433 (409) 1,286 (1,318) 1,007 (1,121) F-199 335 241 969 1 129 199 77 (14) 2/7/2014 2000 (8) 6/27/2013 1974 (34) 2/7/2014 1997 — 1/8/2014 2001 (9) 6/27/2013 1978 (13) 1/8/2014 1998 (6) 1/8/2014 1999 Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Fresno Gilroy San Luis Obispo Santee Vacaville Denver Lone Tree Davie Monticello Columbus Dawson Stockbridge Bloomington Glenview Lombard Peoria CA CA CA CA CA CO CO FL FL GA GA GA IL IL IL IL Nicholasville KY Owensboro Paducah Alexandria Bossier City KY KY LA LA Hagerstown MD Coloma Grossepointew oods Ypsilanti MI MI MI Coon Rapids MN Blue Springs MO Horn Lake Natchez Pearl Albemarle Greensboro MS MS MS NC NC — — — — — — — — — — — — — 190 249 195 265 195 1,810 — 2,000 (347) 6/27/2013 1995 986 (1,235) 1,013 (844) 1,261 (1,390) 1,044 (1,238) — 364 136 1 — 1/8/2014 2002 (26) 1/8/2014 2000 (12) 1/8/2014 1995 — 1/8/2014 2000 12,648 66,398 388 79,434 (11,313) 11/5/2013 2001 196 193 115 1,014 (1,070) 1,009 (1,201) 195 (134) 1,307 2,529 (3,168) 274 (182) 2,391 (2,429) 131 422 270 140 1 176 668 223 384 (10) 1/8/2014 1995 — 1/8/2014 1989 (10) 6/27/2013 1987 (23) 2/7/2014 2002 (7) 6/27/2013 1987 — 7/31/2013 1987 1,375 — 1,645 (273) 6/27/2013 1995 43,467 14,014 73,359 (47,361) 40,012 (1,229) 11/5/2013 1975 — — — — — — — — 84 195 435 1,244 1,121 82 1,168 244 100 — 1,013 (1,208) 184 — (20) 6/27/2013 1973 — 1/8/2014 2000 2,040 (939) 1,536 (73) 6/11/2014 2001 1,656 (1,941) 1,443 (1,630) 245 (93) 2,594 (2,883) 1,306 (1,505) 959 934 234 879 45 (29) 2/7/2014 1997 (30) 2/7/2014 1995 (15) 7/31/2013 1985 (31) 2/7/2014 2004 (5) 1/8/2014 2001 10,017 1,929 9,319 (5,783) 5,465 (225) 3/28/2014 1965 — — — — — — — — — 140 85 1,046 (785) 483 (9) 1,611 2,188 (2,894) 810 925 225 1,058 483 1,020 1,346 (1,515) 2,463 (2,320) 674 (711) 1,857 (1,893) (493) (178) 457 — F-200 401 559 905 641 1,068 188 1,022 447 842 (33) 6/27/2013 1995 (136) 11/23/2011 2002 (25) 2/7/2014 2003 (37) 6/27/2013 1995 (39) 2/7/2014 1995 (6) 7/31/2013 1973 (35) 2/7/2014 2000 (20) 6/27/2013 1995 — 2/21/2014 1995 Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Deptford Hobbs Las Vegas Elmira Wellsville Circleville Moraine NJ NM NV NY NY OH OH Youngstown OH The Dalles OR Beaver Falls Bristol Dickson City Indiana Warwick Lexington Red Bank Sevierville Abilene El Paso Houston Irving Lubbock Pleasanton Texas City PA PA PA PA RI SC TN TN TX TX TX TX TX TX TX Fredericksburg VA Brookfield WI Beckley WV Vanguard Car Rental College Park GA Velox Insurance Woodstock Verizon Wireless Statesville GA NC — — — — — — — — — — — — — — — — — — — 195 815 680 199 123 140 87 139 201 243 114 262 676 1,570 244 215 1,443 803 246 1,044 (1,239) — 1,533 370 368 142 148 232 802 — — (441) (217) — — (37) (486) 1,304 (1,489) 81 — 1,257 (1,519) 1,255 5,030 (920) 7 1,307 (1,356) 323 430 — (339) (751) — 1,248 (1,490) 19,525 2,356 36,347 — — — — — — — — — — 522 694 328 614 446 50 1,248 1,561 155 207 — (235) (68) 512 — 4,804 (2,859) 3,351 (2,351) 2,071 (1,343) 84 45 2,258 (2,508) 6,244 127 459 Volusia Square Daytona Beach FL 16,556 4,598 28,511 Waffle House Cocoa FL — 150 279 F-201 — 815 — 1/8/2014 2005 — 6/27/2013 1995 2,213 (294) 6/27/2013 1995 128 274 282 235 334 517 58 195 — 1,011 6,607 195 199 — 7/31/2013 1975 — 7/31/2013 1978 (15) 6/27/2013 1986 (20) 6/27/2013 1995 (19) 6/27/2013 1976 (103) 7/31/2013 1994 (4) 1/8/2014 2004 (18) 1/8/2014 1818 — 1/8/2014 2004 (63) 7/31/2013 2000 (799) 9/24/2013 1969 (16) 1/8/2014 1998 (10) 7/31/2013 1975 1,122 (40) 2/7/2014 2003 803 4 — 6/27/2013 1995 — 1/8/2014 1995 38,703 (5,535) 11/5/2013 2009 799 626 2,273 1,614 1,174 179 998 (31) 6/27/2013 1995 — 6/27/2013 1979 (46) 9/25/2014 2014 (64) 2/7/2014 2002 (91) 4/23/2014 1999 (27) 2/21/2014 1967 (35) 2/7/2014 1995 — — 27 10 — 7,805 (1,185) 5/19/2014 2002 282 693 (26) 7/31/2013 1988 (92) 6/27/2013 1993 33,119 (4,405) 2/7/2014 1986 429 (51) 7/31/2013 1986 Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Walgreens Birmingham Walgreens Wetumpka Walgreens Kingman Walgreens Peoria Walgreens Phoenix Walgreens Tucson Walgreens Tucson Walgreens Coalinga Walgreens Lancaster Walgreens Castle Rock Walgreens Denver Walgreens Pueblo Walgreens Orlando Walgreens Acworth Walgreens Decatur Walgreens Grayson Walgreens Union City Walgreens Dubuque Walgreens Twin Falls Walgreens Cahokia Walgreens Chicago Walgreens Chicago Walgreens Chicago Walgreens Chicago Walgreens Machesney Park Walgreens Matteson Walgreens South Elgin Walgreens St. Charles Walgreens Anderson Walgreens Lafayette Walgreens South Bend Walgreens Wichita AL AL AZ AZ AZ AZ AZ CA CA CO CO CO FL GA GA GA GA IA ID IL IL IL IL IL IL IL IL IL IN IN IN KS 1,530 — 2,942 — — — 996 547 669 837 1,037 1,234 2,910 1,406 2,800 2,719 396 859 3,953 1,581 3,350 — — — — 2,720 — — — 519 1,007 1,583 1,746 947 909 638 2,388 1,156 — — — — — — 2,450 394 1,212 1,617 952 911 822 416 2,219 1,710 1,991 1,472 2,717 2,350 807 626 3,063 1,240 — 385 3,005 3,102 5,726 1,953 1,927 5,143 3,571 3,568 4,246 3,689 4,050 2,971 1,869 2,940 3,337 3,748 3,841 3,905 3,896 1,577 2,829 3,003 3,235 4,830 3,727 4,070 3,208 3,262 3,227 4,183 5,015 4,286 F-202 — — — — — — — — — — — — — — 1 — — — — 167 — — — — — — — — — — — — 4,001 3,649 6,395 2,790 2,964 6,377 4,977 3,964 5,105 5,270 4,050 3,490 2,876 4,523 5,084 4,695 4,750 4,543 5,052 2,138 4,041 4,620 4,187 5,741 4,549 4,486 4,918 4,734 4,034 4,809 6,255 4,671 (519) 2/7/2014 1999 (907) 2/22/2012 2007 (913) 2/7/2014 2009 (454) 2/27/2013 1996 (438) 3/26/2013 1999 (818) 2/7/2014 2003 (580) 2/7/2014 2004 (1,093) 10/11/2011 2008 (739) 2/7/2014 2009 (766) 7/11/2013 2002 (840) 7/2/2013 2008 (479) 2/7/2014 2003 (369) 9/30/2013 1996 (698) 1/25/2013 2012 (537) 2/7/2014 2001 (594) 2/7/2014 2004 (607) 2/7/2014 2005 (616) 2/7/2014 2008 (646) 2/7/2014 2009 (298) 5/19/2014 1994 (672) 1/30/2013 1999 (713) 1/30/2013 1995 (510) 2/7/2014 2003 (742) 2/7/2014 2000 (600) 2/7/2014 2008 (615) 2/7/2014 2008 (526) 2/7/2014 2002 (513) 2/7/2014 2002 (863) 7/31/2012 2001 (595) 2/7/2014 2008 (825) 2/7/2014 2006 (679) 2/7/2014 2000 Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Walgreens Frankfort KY Walgreens Shereveport LA — — 911 619 Walgreens Framingham MA 2,991 2,103 Walgreens Baltimore MD Walgreens Brooklyn Park MD — — 1,185 1,416 Walgreens Augusta ME 3,099 1,648 Walgreens Clarkston Walgreens Walgreens Clinton Dearborn Heights Walgreens Eastpointe Walgreens Lincoln Park Walgreens Livonia Walgreens Stevensville Walgreens Troy Walgreens Warren MI MI MI MI MI MI MI MI MI — — — — 2,768 1,463 190 668 5,494 1,041 — 3,100 — — 261 855 — 748 Walgreens North Mankato MN 2,484 1,748 Walgreens Country Club Hills MO Walgreens Independence MO Walgreens Columbia Walgreens Greenwood Walgreens Jackson MS MS MS — — 3,091 — — Walgreens Cape Carteret NC 2,400 997 1,122 452 561 983 919 Walgreens Durham Walgreens Durham Walgreens Laurinburg Walgreens Leland NC NC NC NC 2,871 1,441 2,798 2,201 — 355 2,472 1,226 Walgreens Rocky Mount NC 2,941 1,105 Walgreens Winterville NC Walgreens North Platte Walgreens Omaha Walgreens Papillion Walgreens Maplewood NE NE NE NJ 2,972 — 578 935 2,530 1,316 — 1,239 4,700 1,071 3,643 3,509 4,770 2,764 4,160 5,146 3,197 3,413 3,605 2,672 5,896 2,350 3,420 1,896 2,991 3,604 4,204 3,816 4,072 3,181 2,996 3,087 3,581 2,923 3,577 3,681 4,046 5,322 4,292 4,122 3,212 6,071 F-203 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 4,554 4,128 6,873 3,949 5,576 6,794 5,965 4,876 3,795 3,340 6,937 2,611 4,275 1,896 3,739 5,352 5,201 4,938 4,524 3,742 3,979 4,006 5,022 5,124 3,932 4,907 5,151 5,900 5,227 5,438 4,451 7,142 (1,066) 2/8/2012 2006 (1,026) 2/22/2012 2003 (746) 2/7/2014 2007 (560) 8/6/2013 2000 (648) 2/7/2014 2008 (859) 2/7/2014 2007 (519) 2/7/2014 2000 (845) 11/13/2012 2002 (802) 4/1/2013 1998 (795) 1/19/2012 1998 (1,577) 7/31/2012 2007 (523) 4/1/2013 1998 (1,039) 11/28/2011 2007 (460) 12/12/2012 2000 (740) 11/21/2012 1999 (590) 2/7/2014 2008 (624) 2/7/2014 2009 (619) 2/7/2014 2001 (987) 12/21/2012 2011 (930) 2/22/2012 2007 (539) 2/18/2014 1998 (495) 2/7/2014 2008 (640) 2/7/2014 2010 (568) 2/7/2014 2008 (608) 2/26/2014 2013 (607) 2/7/2014 2008 (737) 2/7/2014 2009 (901) 2/7/2014 2009 (711) 2/7/2014 2009 (675) 2/7/2014 2009 (516) 2/7/2014 2009 (1,844) 11/18/2011 2011 Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Walgreens Albuquerque NM — 1,173 Walgreens Las Vegas Walgreens Las Vegas Walgreens Lockport NV NV NY 6,566 1,528 — — 700 2,358 Walgreens Staten Island NY 3,081 — Walgreens Watertown Walgreens Akron Walgreens Bryan Walgreens Cleveland Walgreens Cleveland Walgreens Eaton Walgreens Medina NY OH OH OH OH OH OH Walgreens New Albany OH Walgreens Edmond Walgreens Stillwater Walgreens Tahlequah Walgreens Tulsa Walgreens Aibonito Pueblo Walgreens Las Piedras Walgreens Anderson Walgreens Easley Walgreens Fort Mill Walgreens Greenville Walgreens Lancaster OK OK OK OK PR PR SC SC SC SC SC — 2,937 1,683 — — 2,643 3,068 — — 2,240 — 2,940 664 219 472 743 398 820 919 697 368 647 — 1,147 5,695 1,855 5,292 1,726 — 835 3,685 1,206 2,272 1,300 3,991 1,313 2,923 1,941 Walgreens Myrtle Beach SC — — Walgreens N. Charleston SC 3,380 1,320 Walgreens Spearfish Walgreens Bartlett Walgreens Cordova Walgreens Memphis Walgreens Anthony Walgreens Baytown SD TN TN TN TX TX — — 1,116 2,358 2,254 1,005 2,418 — 2,432 896 644 953 2,287 6,114 2,801 2,301 3,984 2,664 1,548 4,154 1,890 4,757 3,586 4,585 3,424 4,288 4,368 3,664 2,904 5,566 5,179 3,342 3,617 2,760 3,940 3,526 2,077 3,081 4,158 2,194 2,345 2,687 4,369 4,299 F-204 — — — — — — — — 68 — — — — — — — — — — — — — — — — — — — — — — — 3,460 7,642 3,501 4,659 3,984 5,601 2,212 4,373 2,430 5,500 3,984 5,405 4,343 4,985 4,736 4,311 4,051 7,421 6,905 4,177 4,823 4,060 5,253 5,467 2,077 4,401 5,274 4,552 3,350 3,583 5,013 5,252 (375) 2/7/2014 1996 (1,697) 5/30/2012 2009 (623) 4/30/2013 2001 (375) 4/21/2014 1998 (1,220) 10/5/2011 2007 (440) 2/7/2014 2006 (337) 5/31/2013 1994 (1,215) 2/22/2012 2007 (300) 5/19/2014 1994 (784) 2/7/2014 2008 (977) 6/27/2012 2008 (713) 2/7/2014 2001 (531) 2/7/2014 2006 (690) 2/7/2014 2000 (698) 2/7/2014 2000 (870) 1/2/2013 2008 (467) 2/7/2014 2001 (1,266) 3/5/2013 2012 (1,152) 4/3/2013 1995 (977) 2/8/2012 2006 (986) 6/27/2012 2007 (498) 2/7/2014 2010 (1,074) 6/27/2012 2006 (643) 2/7/2014 2009 (626) 12/29/2011 2001 (840) 6/27/2012 2007 (675) 2/7/2014 2008 (350) 2/7/2014 2001 (581) 11/9/2012 2002 (678) 10/2/2012 2003 (663) 2/7/2014 2008 (679) 2/7/2014 2009 Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Walgreens Denton Walgreens Houston TX TX Walgreens Fredericksburg VA Walgreens Portsmouth Walgreens Appleton Walgreens Appleton Walgreens Beloit Walgreens Janesville Walgreens Janesville VA WI WI WI WI WI — — — 1,465 1,844 1,184 491 2,320 730 975 2,687 1,198 2,184 721 — 1,039 2,195 593 3,726 1,965 3,789 3,311 3,047 4,344 3,653 5,315 4,009 3,176 Walgreens Bridgeport WV — 1,315 Wal-Mart Pueblo CO 8,250 2,586 12,512 Wal-Mart Douglasville GA Wal-Mart Valdosta Wal-Mart Cary GA NC Wal-Mart Albuquerque NM Wal-Mart Las Vegas NV Wal-Mart Lancaster Wal-Mart Oneida WaWa WaWa Gap Portsmouth Weir Oil and Gas Williston Wells Fargo Hillsboro Wells Fargo Lebanon Wendy's Anniston Wendy's Auburn Wendy's Birmingham Wendy's Homewood Wendy's Phenix City Wendy's Arkadelphia Wendy's Batesville Wendy's Benton Wendy's Bentonville SC TN PA VA ND OR PA AL AL AL AL AL AR AR AR AR — — — — — — — — 3,559 3,909 2,314 10,991 17,038 2,714 1,803 561 1,241 1,573 17,588 9,447 5,550 — — 11,677 8,580 5,054 — — — — — — — — — — — — — 273 6,232 10,480 19,287 80 454 718 562 995 529 225 155 478 648 435 591 1,334 990 — 1,178 633 878 1,018 708 F-205 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 4,910 2,456 6,109 4,041 4,022 5,542 4,374 6,354 4,602 4,491 (588) 2/7/2014 2009 (357) 5/19/2014 1993 (696) 2/7/2014 2008 (621) 11/5/2013 1998 (494) 2/7/2014 2008 (709) 2/7/2014 2008 (600) 2/7/2014 2008 (857) 2/7/2014 2008 (643) 2/7/2014 2010 (543) 2/18/2014 2011 15,098 (2,059) 2/7/2014 1998 21,147 (2,688) 2/7/2014 1999 13,356 (1,489) 2/7/2014 1998 7,864 (862) 2/7/2014 2005 10,991 17,038 — — 2/7/2014 2008 2/7/2014 2001 14,391 (1,841) 2/7/2014 1999 10,383 (1,319) 2/7/2014 1999 5,615 1,573 6,505 (774) 2/7/2014 2004 — 2/7/2014 2008 (695) 6/25/2014 2012 29,767 (2,436) 2/7/2014 1978 515 1,045 2,052 1,552 995 1,707 858 1,033 1,496 1,356 (75) 1/8/2014 1995 (116) 6/27/2013 1976 (243) 7/31/2013 2000 (194) 6/27/2013 2005 — 6/27/2013 1995 (231) 6/27/2013 1999 (124) 6/27/2013 1990 (160) 7/31/2013 1995 (200) 6/27/2013 1993 (139) 6/27/2013 1993 Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Wendy's Wendy's Bryant Cabot Wendy's Conway Wendy's Conway Wendy's Fayetteville Wendy's Fayetteville Wendy's Fort Smith Wendy's Fort Smith Wendy's Little Rock Wendy's Little Rock Wendy's Little Rock Wendy's Little Rock Wendy's Little Rock Wendy's Little Rock Wendy's Pine Bluff Wendy's Rogers Wendy's Russellville Wendy's Springdale Wendy's Springdale Wendy's Stuttgart Wendy's Van Buren Wendy's Payson Wendy's Camarillo Wendy's Groton Wendy's Norwich Wendy's Orange Wendy's Cocoa Wendy's Indialantic Wendy's Lake Wales Wendy's Lynn Haven Wendy's Melbourne AR AR AR AR AR AR AR AR AR AR AR AR AR AR AR AR AR AR AR AR AR AZ CA CT CT CT FL FL FL FL FL Wendy's Merritt Island FL — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 529 524 478 482 408 463 195 63 278 990 605 501 773 532 221 579 356 323 410 67 197 679 320 1,099 703 1,343 249 592 975 446 550 720 575 707 594 833 830 463 1,186 1,016 878 623 463 501 773 650 1,022 912 638 896 821 1,038 748 829 2,253 900 937 1,641 567 614 1,462 852 681 589 F-206 — — — — — — (11) — — — — — — — — — — — — — — — — — — — — — — — — — 1,104 1,231 1,072 1,315 1,238 926 1,370 1,079 1,156 1,613 1,068 1,002 1,546 1,182 1,243 1,491 994 1,219 1,231 1,105 945 1,508 2,573 1,999 1,640 2,984 816 1,206 2,437 1,298 1,231 1,309 (113) 6/27/2013 1995 (139) 6/27/2013 1991 (117) 6/27/2013 1985 (163) 6/27/2013 1994 (163) 6/27/2013 1994 (84) 7/31/2013 1989 (233) 6/27/2013 1995 (199) 6/27/2013 1995 (172) 6/27/2013 1976 (301) 6/27/2013 1982 (91) 6/27/2013 1987 (91) 7/31/2013 1983 (141) 7/31/2013 1994 (119) 7/31/2013 1978 (201) 6/27/2013 1989 (179) 6/27/2013 1995 (125) 6/27/2013 1985 (176) 6/27/2013 1994 (161) 6/27/2013 1995 (204) 6/27/2013 2001 (147) 6/27/2013 1994 (151) 7/31/2013 1986 (432) 6/27/2013 1995 (164) 7/31/2013 1978 (184) 6/27/2013 1980 (299) 7/31/2013 1995 (111) 6/27/2013 1979 (121) 6/27/2013 1985 (267) 7/31/2013 1999 (167) 6/27/2013 1995 (134) 6/27/2013 1993 (107) 7/31/2013 1990 Property City Wendy's New Smyrna Beach State FL Wendy's Ormond Beach FL Wendy's Ormond Beach FL Wendy's Panama City Wendy's Panama City Wendy's Port Orange FL FL FL Wendy's South Daytona FL Wendy's Tallahassee Wendy's Tallahassee Wendy's Titusville Wendy's Titusville Wendy's Titusville Wendy's Wendy's Albany Albany Wendy's Austell Wendy's Brunswick Wendy's Columbus Wendy's Columbus Wendy's Columbus Wendy's Columbus FL FL FL FL FL GA GA GA GA GA GA GA GA Wendy's Douglasville GA Wendy's Eastman Wendy's Fairburn Wendy's Hogansville GA GA GA Wendy's Lithia Springs GA Wendy's Morrow Wendy's Savannah Wendy's Sharpsburg Wendy's Stockbridge Wendy's Bourbonnais Wendy's Joliet Wendy's Kankakee GA GA GA GA IL IL IL Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 476 626 503 461 445 695 531 952 855 528 415 414 414 383 383 306 701 743 478 223 605 258 1,076 240 668 755 720 649 480 346 642 250 394 561 503 529 837 569 432 514 505 239 761 770 1,656 748 506 435 1,787 1,185 2,209 1,380 776 473 1,316 1,359 774 922 720 1,299 558 1,039 963 1,419 F-207 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 870 1,187 1,006 990 1,282 1,264 963 1,466 1,360 767 1,176 1,184 2,070 1,131 889 741 2,488 1,928 2,687 1,603 1,381 731 2,392 1,599 1,442 1,677 1,440 1,948 1,038 1,385 1,605 1,669 (77) 6/27/2013 1982 (110) 6/27/2013 1994 (92) 7/31/2013 1984 (104) 6/27/2013 1984 (164) 6/27/2013 1987 (104) 7/31/2013 1996 (85) 6/27/2013 1980 (101) 6/27/2013 1986 (99) 6/27/2013 1986 (47) 6/27/2013 1978 (149) 6/27/2013 1984 (140) 7/31/2013 1996 (302) 7/31/2013 1995 (116) 3/26/2014 1999 (99) 6/27/2013 1994 (85) 6/27/2013 1985 (351) 6/27/2013 1999 (233) 6/27/2013 1988 (434) 6/27/2013 2003 (214) 3/26/2014 1982 (152) 6/27/2013 1993 (93) 6/27/2013 1996 (240) 7/31/2013 2002 (248) 7/31/2013 1985 (152) 6/27/2013 1988 (168) 7/31/2013 1990 (131) 7/31/2013 2001 (255) 6/27/2013 2002 (110) 6/27/2013 1987 (190) 7/31/2013 1993 (176) 7/31/2013 1977 (259) 7/31/2013 2005 Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Wendy's Mokena Wendy's Normal Wendy's Anderson Wendy's Anderson Wendy's Anderson Wendy's Anderson Wendy's Wendy's Wendy's Wendy's Avon Avon Carmel Carmel Wendy's Connersville Wendy's Wendy's Fishers Fishers Wendy's Greenfield Wendy's Indianapolis Wendy's Lebanon Wendy's Noblesville Wendy's Pendleton Wendy's Richmond Wendy's Richmond Wendy's Benton Wendy's Louisville Wendy's Louisville Wendy's Louisville Wendy's Mayfield IL IL IN IN IN IN IN IN IN IN IN IN IN IN IN IN IN IN IN IN KY KY KY KY KY Wendy's Baton Rouge LA Wendy's Minden Wendy's Worcester Wendy's Baltimore Wendy's Baltimore Wendy's Landover Wendy's Pasadena LA MA MD MD MD MD — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 665 443 872 859 505 584 538 638 736 915 324 855 761 429 751 1,265 590 448 735 661 252 834 532 857 242 316 182 370 760 904 340 1,049 997 991 736 708 757 713 407 330 211 178 1,298 147 229 214 212 108 42 895 1,716 992 926 1,379 1,221 1,421 779 782 936 1,288 802 1,036 267 1,902 F-208 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 1,662 1,434 1,608 1,567 1,262 1,297 945 968 947 1,093 1,622 1,002 990 643 963 1,373 632 1,343 2,451 1,653 1,178 2,213 1,753 2,278 1,021 1,098 1,118 1,658 1,562 1,940 607 2,951 (182) 7/31/2013 1992 (153) 3/26/2014 1985 (144) 6/27/2013 1978 (139) 6/27/2013 1978 (138) 7/31/2013 1995 (130) 7/31/2013 1976 (94) 2/7/2014 1990 (103) 2/7/2014 1999 (53) 2/7/2014 1980 (66) 2/7/2014 2001 (237) 7/31/2013 1989 (55) 2/7/2014 1999 (70) 2/7/2014 2012 (55) 2/7/2014 1980 (67) 2/7/2014 1993 (50) 2/7/2014 1979 (14) 2/7/2014 1988 (176) 6/27/2013 2005 (313) 7/31/2013 1989 (181) 7/31/2013 1989 (143) 3/26/2014 2001 (271) 6/27/2013 2001 (240) 6/27/2013 1998 (279) 6/27/2013 2000 (120) 3/26/2014 1986 (153) 6/27/2013 1998 (184) 6/27/2013 2001 (247) 6/27/2013 1995 (157) 6/27/2013 1995 (203) 6/27/2013 2002 (52) 6/27/2013 1978 (373) 6/27/2013 1997 Property City Wendy's Salisbury Wendy's Wendy's Suitland Madison Heights Wendy's Picayune Wendy's Kinston Wendy's Bellevue Wendy's Millville Wendy's Henderson Wendy's Henderson Wendy's Henderson Wendy's Las Vegas Wendy's Las Vegas Wendy's Las Vegas Wendy's Las Vegas Wendy's Las Vegas Wendy's Las Vegas Wendy's Auburn State MD MD MI MS NC NE NJ NV NV NV NV NV NV NV NV NV NY Wendy's Binghamton NY Wendy's Corning Wendy's Cortland Wendy's Endicott Wendy's Fulton Wendy's Horseheads Wendy's Liverpool Wendy's Oswego Wendy's Owego Wendy's Wendy's Vestal Belpre NY NY NY NY NY NY NY NY NY OH Wendy's Bowling Green OH Wendy's Brookville OH Wendy's Buckeye Lake OH Wendy's Centerville OH Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 370 332 198 437 491 338 373 933 882 785 398 919 789 725 915 633 465 293 191 635 313 392 72 530 190 101 488 297 502 448 864 615 1,299 275 725 1,032 1,159 484 1,169 842 457 508 589 562 583 458 724 392 1,085 879 1,717 952 1,253 1,181 1,369 864 645 1,915 878 1,195 — — — — — — — — — — — — — — — — — — — — — — — — — — — — 932 (926) — — — 1,072 877 1,434 F-209 1,669 (249) 6/27/2013 1995 607 923 1,469 1,650 822 1,542 1,775 1,339 1,293 987 1,481 1,372 1,183 1,639 1,025 1,550 1,172 1,908 1,587 1,566 1,573 1,441 1,394 835 2,016 1,366 1,492 508 1,520 1,741 2,049 (54) 6/27/2013 1979 (142) 6/27/2013 1998 (160) 3/26/2014 1983 (171) 5/1/2014 2004 (95) 6/27/2013 1981 (229) 6/27/2013 1994 (157) 2/7/2014 1997 (85) 2/7/2014 1999 (102) 2/7/2014 2000 (96) 2/7/2014 1976 (109) 2/7/2014 1976 (97) 2/7/2014 1984 (88) 2/7/2014 1986 (131) 2/7/2014 1991 (67) 2/7/2014 1994 (198) 7/31/2013 1977 (160) 7/31/2013 1978 (313) 7/31/2013 1996 (174) 7/31/2013 1984 (229) 7/31/2013 1987 (183) 3/26/2014 1980 (250) 7/31/2013 1982 (60) 3/26/2014 1980 (100) 3/26/2014 1986 (349) 7/31/2013 1989 (61) 3/26/2014 1995 (185) 3/26/2014 2000 (19) 7/31/2013 1994 (166) 3/26/2014 1984 (172) 6/27/2013 2000 (262) 7/31/2013 1997 Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Wendy's Cincinnati Wendy's Dayton Wendy's Dayton Wendy's Dayton Wendy's Dayton Wendy's Dayton Wendy's Dayton Wendy's Dayton Wendy's Eaton Wendy's Englewood Wendy's Fairborn Wendy's Fairborn Wendy's Fairborn Wendy's Fairfield Wendy's Hamilton Wendy's Hamilton Wendy's Hamilton Wendy's Hillsboro Wendy's Lancaster Wendy's Miamisburg Wendy's Middletown Wendy's Middletown Wendy's Middletown OH OH OH OH OH OH OH OH OH OH OH OH OH OH OH OH OH OH OH OH OH OH OH Wendy's Saint Bernard OH Wendy's Springboro Wendy's Swanton Wendy's Wendy's Sylvania West Carrollton OH OH OH OH Wendy's West Chester OH Wendy's West Chester OH Wendy's Whitehall OH Wendy's Wintersville OH — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 939 723 304 288 342 274 286 259 207 261 629 604 271 794 655 697 908 291 552 888 755 752 494 432 891 430 300 708 944 616 716 621 1,408 1,343 1,264 813 848 1,029 869 838 1,084 924 1,468 1,408 828 971 1,848 1,295 1,362 1,408 1,025 1,086 1,133 920 1,481 1,009 1,336 1,233 799 865 772 924 863 1,450 F-210 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 2,347 2,066 1,568 1,101 1,190 1,303 1,155 1,097 1,291 1,185 2,097 2,012 1,099 1,765 2,503 1,992 2,270 1,699 1,577 1,974 1,888 1,672 1,975 1,441 2,227 1,663 1,099 1,573 1,716 1,540 1,579 2,071 (257) 7/31/2013 1980 (245) 7/31/2013 1977 (195) 3/26/2014 1974 (126) 3/26/2014 1985 (131) 3/26/2014 1973 (165) 3/26/2014 2004 (134) 3/26/2014 1977 (130) 3/26/2014 1985 (76) 3/26/2014 1993 (143) 3/26/2014 1976 (268) 7/31/2013 1999 (257) 7/31/2013 1992 (128) 3/26/2014 1975 (177) 7/31/2013 1981 (363) 6/27/2013 2001 (236) 7/31/2013 1974 (248) 7/31/2013 2002 (276) 6/27/2013 1985 (187) 7/31/2013 1984 (198) 7/31/2013 1995 (207) 7/31/2013 1995 (168) 7/31/2013 1995 (270) 7/31/2013 1977 (184) 7/31/2013 1985 (244) 7/31/2013 1982 (236) 6/27/2013 1995 (153) 6/27/2013 1995 (158) 7/31/2013 1979 (141) 7/31/2013 1982 (169) 7/31/2013 2005 (169) 6/27/2013 1983 (264) 7/31/2013 1977 Property City State Wendy's Edmond Wendy's Enid Wendy's Ponca City Wendy's Sayre Wendy's Anderson Wendy's Columbia Wendy's Wendy's Greenville N. Myrtle Beach Wendy's Spartanburg Wendy's Brentwood Wendy's Crossville Wendy's Knoxville Wendy's Knoxville Wendy's Manchester OK OK OK PA SC SC SC SC SC TN TN TN TN TN Wendy's Mcminnville TN Wendy's Millington TN Wendy's Murfreesboro TN Wendy's Nashville Wendy's Nashville Wendy's Arlington TN TN TX Wendy's Corpus Christi TX Wendy's El Paso Wendy's Kingwood Wendy's San Antonio Wendy's San Antonio Wendy's San Antonio Wendy's San Antonio Wendy's San Antonio Wendy's San Antonio Wendy's San Antonio Wendy's San Marcos Wendy's Schertz TX TX TX TX TX TX TX TX TX TX TX Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 791 158 529 372 734 1,368 516 464 699 339 190 330 330 245 255 380 586 592 328 1,322 646 630 304 268 410 707 633 1,007 703 788 714 793 697 893 983 1,115 897 — 631 861 572 1,356 760 1,161 1,132 1,390 1,443 1,208 1,088 1,100 1,313 1,546 1,199 1,889 1,724 630 451 603 1,388 546 45 45 1,024 109 F-211 — — — — — — — — — — — — — — — — — — — — — — (944) — — — — — — — — — 1,488 1,051 1,512 1,487 1,631 1,368 1,147 1,325 1,271 1,695 950 1,491 1,462 1,635 1,698 1,588 1,674 1,692 1,641 2,868 1,845 2,519 1,084 898 861 1,310 2,021 1,553 748 833 1,738 902 (108) 3/27/2014 1979 (163) 7/31/2013 2003 (179) 7/31/2013 1979 (203) 7/31/2013 1994 (268) 7/31/2013 1995 — 6/27/2013 1995 (115) 7/31/2013 1975 (157) 7/31/2013 1983 (104) 7/31/2013 1977 (247) 7/31/2013 1982 (139) 7/31/2013 1978 (223) 6/27/2013 1995 (217) 6/27/2013 1995 (254) 7/31/2013 1984 (263) 7/31/2013 2010 (232) 6/27/2013 1995 (199) 7/31/2013 1983 (201) 7/31/2013 1983 (239) 7/31/2013 1983 (303) 6/27/2013 1994 (219) 7/31/2013 1987 (345) 7/31/2013 1996 (33) 7/31/2013 2001 (124) 6/27/2013 1985 (89) 6/27/2013 1987 (94) 2/7/2014 1990 (199) 2/7/2014 1992 (87) 2/7/2014 1995 (14) 2/7/2014 2000 (14) 2/7/2014 2003 (154) 2/7/2014 2002 (20) 2/7/2014 1994 Property City State Wendy's Selma Wendy's Bluefield TX VA Wendy's Christiansburg VA Wendy's Dublin Wendy's Emporia Wendy's Hayes Wendy's Hillsville Wendy's Lebanon VA VA VA VA VA Wendy's Mechanicsville VA Wendy's Midlothian Wendy's North Tazewell VA VA Wendy's Pounding Mill VA Wendy's South Hill Wendy's Woodbridge Wendy's Woodbridge Wendy's Wytheville Wendy's Bellingham Wendy's Bothell Wendy's Burlington VA VA VA VA WA WA WA Wendy's Port Angeles WA Wendy's Redmond Wendy's Silverdale Wendy's Beloit Wendy's Fitchburg WA WA WI WI Wendy's Germantown WI Wendy's Greenfield Wendy's Janesville Wendy's Kenosha Wendy's Kenosha Wendy's Madison Wendy's Milwaukee Wendy's Milwaukee WI WI WI WI WI WI WI Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 841 450 416 384 631 304 324 431 521 230 124 296 313 117 1,927 624 1,402 1,424 859 973 1,006 704 1,300 560 1,404 — — — — — — — — — — — — 976 (421) 1,193 1,598 521 598 502 687 425 422 969 808 1,138 662 419 487 647 322 965 454 810 338 615 897 477 292 806 503 123 201 931 1,230 1,257 1,137 971 1,290 1,447 1,362 810 1,351 F-212 — — — — — — — — — — — — — — — — — — — 958 2,377 1,040 1,786 2,055 1,163 1,297 1,437 1,225 1,530 684 1,700 868 2,791 1,136 1,495 979 979 1,231 925 1,092 1,009 2,069 1,892 1,676 1,624 1,618 1,612 2,412 1,816 1,620 1,689 (18) 2/7/2014 2003 (369) 6/27/2013 1995 (114) 7/31/2013 1980 (275) 6/27/2013 1993 (280) 6/27/2013 1994 (169) 6/27/2013 1992 (177) 7/31/2013 2001 (184) 7/31/2013 1983 (138) 6/27/2013 1989 (249) 6/27/2013 1995 (110) 6/27/2013 1980 (276) 6/27/2013 2004 (59) 6/27/2013 1995 (314) 6/27/2013 1996 (121) 6/27/2013 1978 (164) 7/31/2013 2003 (78) 2/7/2014 1994 (37) 2/7/2014 2004 (158) 6/27/2013 1994 (139) 2/7/2014 1980 (13) 2/7/2014 1977 (91) 2/7/2014 1995 (170) 7/31/2013 2002 (224) 7/31/2013 2003 (229) 7/31/2013 1989 (207) 7/31/2013 2001 (177) 7/31/2013 1991 (235) 7/31/2013 1984 (264) 7/31/2013 1986 (248) 7/31/2013 1998 (148) 7/31/2013 1979 (247) 7/31/2013 1985 Initial Costs (1) Encumbrances at December 31, 2016 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2016 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Wendy's Milwaukee Wendy's New Berlin Wendy's Oak Creek Wendy's Sheboygan Wendy's West Allis Wendy's Beaver Wendy's Bridgeport WI WI WI WI WI WV WV Wendy's Buckhannon WV Wendy's Clarksburg Wendy's Fairmont WV WV Wendy's Parkersburg WV Wendy's Parkersburg WV Wendy's Parkersburg WV Wendy's Ripley WV Wendy's Saint Marys WV Wendy's Vienna WV West Marine Anchorage AK West Marine West Marine Fort Lauderdale Harrison Township West Marine Deltaville Whataburger Edna Whataburger El Campo Whataburger Ingleside Whataburger Lubbock Whole Foods Hinsdale Wild Bill's Sports Salon Rochester Willbros Group, Inc. Tulsa FL MI VA TX TX TX TX IL MN OK — — — — — — — — — — — — — — — — — — — — — — — — 436 903 577 676 583 290 273 157 277 224 295 311 241 273 70 301 1,220 4,337 452 425 290 693 1,106 432 5,709 5,499 — — 1,347 2,239 1,016 739 1,347 1,014 1,083 1,156 818 890 1,181 1,119 885 1,243 964 871 1,322 702 2,531 9,052 2,092 2,409 869 1,013 474 647 7,389 1,102 6,375 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 1,452 1,642 1,924 1,690 1,666 1,446 1,091 1,047 1,458 1,343 1,180 1,554 1,205 1,144 1,392 1,003 3,751 (185) 7/31/2013 1983 (135) 7/31/2013 1983 (246) 7/31/2013 1999 (185) 7/31/2013 1995 (197) 7/31/2013 1984 (222) 6/27/2013 1995 (149) 7/31/2013 1984 (162) 7/31/2013 1987 (183) 3/26/2014 1980 (220) 6/27/2013 1983 (161) 7/31/2013 1979 (227) 7/31/2013 1977 (176) 7/31/2013 1996 (171) 6/27/2013 1984 (241) 7/31/2013 2001 (128) 7/31/2013 1976 (375) 3/31/2014 1995 13,389 (1,238) 2/7/2014 2011 2,544 2,834 1,159 1,706 1,580 1,079 (399) 2/7/2014 2009 (603) 7/31/2012 2012 (159) 7/31/2013 1986 (199) 6/27/2013 1986 (86) 7/31/2013 1986 (118) 7/31/2013 1992 12,888 (1,230) 2/7/2014 1999 2,449 8,614 (227) 7/31/2013 1993 (671) 6/25/2014 1982 46,596 (11,813) 8/10/2012 2001 87,195 (15,215) 4/24/2013 2000 1,324 2,634 (105) 6/25/2014 2012 (365) 6/27/2013 1998 Williams Sonoma Olive Branch MS 28,350 2,330 44,266 Winn-Dixie Jacksonville FL 63,240 4,360 82,835 Worrior Energy Services Midland Z'Tejas Austin TX TX — — 508 837 816 1,797 $ 2,629,949 $ 2,942,810 $ 10,738,812 $ (141,701) $ 13,539,921 $ (1,766,006) F-213 (1) Initial costs exclude subsequent impairment charges. (2) Consists of capital expenditures and real estate development costs, net of condemnations, easements and impairment charges. (3) Gross intangible lease assets of $2.04 billion and the associated accumulated amortization of $565.6 million are not reflected in the table _______________________________________________ above. (4) The aggregate cost for Federal income tax purposes of land, buildings, fixtures and improvements as of December 31, 2016 was $15.3 billion. (5) Depreciation is computed using the straight-line method over the estimated useful lives of up to 40 years for buildings, five to 15 years for building fixtures and improvements. The following is a reconciliation of the gross real estate activity for the years ended December 31, 2016, 2015 and 2014 (amounts in thousands): Balance, beginning of year Additions: Acquisitions Improvements Deductions/Other: Dispositions Impairments Reclassified to assets held for sale Other Balance, end of year $ Years Ended December 31, 2016 2015 2014 $ 14,566,343 $ 15,857,507 $ 6,699,547 91,052 25,781 33,695 60,321 (878,552) (228,750) (36,722) 769 13,539,921 $ (1,261,724) (106,064) (16,761) (631) 14,566,343 $ 11,095,559 114,070 (1,945,186) (105,367) (1,116) — 15,857,507 The following is a reconciliation of the accumulated depreciation for the years ended December 31, 2016, 2015 and 2014 (amounts in thousands): Balance, beginning of year Additions: Depreciation expense Deductions: Dispositions Impairments Reclassified to assets held for sale Balance, end of year Years Ended December 31, 2016 2015 2014 1,331,751 $ 775,050 $ 586,321 630,347 (77,987) (69,040) (5,039) 1,766,006 $ (49,907) (23,196) (543) 1,331,751 $ 205,712 628,340 (49,377) (9,625) — 775,050 $ $ F-214 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. SCHEDULE IV – MORTGAGE LOANS HELD FOR INVESTMENT December 31, 2016 (in thousands) Schedule IV – Mortgage Loans Held For Investment Description Location Long-Term Mortgage Loans Interest Rate Final Maturity Date Periodic Payment Terms Prior Liens Face Amount of Mortgages Carrying Amount of Mortgages Principal Amount of Loans Subject to Delinquent Principal or Interest Bank Of America, N.A. CVS Caremark Corporation CVS Caremark Corporation CVS Caremark Corporation Koninklijke Ahold, N.V. Lowes Companies, Inc. Walgreen Co. Walgreen Co. Walgreen Co. Total Mt. Airy, MD 6.42% 12/15/2026 P&I N/A $ 2,598 $ 2,836 $ Evansville, IN 6.22% 1/15/2033 P&I Greensboro, GA 6.52% 1/15/2030 P&I Shelby Twp., MI 5.98% 1/15/2031 P&I Bensalem, PA 7.24% 5/15/2020 P&I Framingham, MA 5.87% 9/15/2031 Dallas, TX 6.46% 12/15/2029 Nacogdoches, TX 6.80% 9/15/2030 Rosemead, CA 6.26% 12/15/2029 (1) P&I P&I P&I N/A N/A N/A N/A N/A N/A N/A N/A 2,670 2,934 1,002 1,116 2,022 2,177 1,489 1,617 5,872 2,517 2,758 3,848 1,944 2,796 3,116 4,228 $ 24,776 $ 22,764 $ _______________________________________________ (1) Zero coupon rate with balloon payment due at maturity. — — — — — — — — — — Beginning Balance Additions during the year: Acquired in Cole Merger Investments in mortgage notes Deductions during the year: Principal payments received on loan investments Amortization of unearned discounts and premiums Ending Balance Years Ended December 31, 2016 2015 2014 $ 24,238 $ 26,806 $ 26,279 — — — — 72,326 2,952 (1,339) (135) (2,417) (151) (74,109) (642) $ 22,764 $ 24,238 $ 26,806 F-215 This page intentionally left blank This page intentionally left blank Letter from the CEO Dear Stockholder, I am pleased to report that 2016 proved to be a successful year as we substantially achieved the core components of the business plan outlined in 2015, and in certain areas exceeded expectations. Business Plan Accomplishments Pillar One: Through property culling, enhance the real estate portfolio. Result: We completed approximately $1.14 billion of dispositions in 2016, for a total of nearly $2.6 billion since 2015, exceeding the top end of our original guidance by $400.0 million. As a result, our portfolio has greater diversification and therefore less risk. Management Prowess These accomplishments would not have been possible without the leadership of our management team and the collective efforts of all the employees at VEREIT. Our transactions team was able to seamlessly transition from acquiring to disposing of balance sheet assets as we culled the portfolio, and are now focusing again on leverage-neutral acquisitions to augment the portfolio. Our operations team achieved year-end occupancy above our goal of 98%, even as e-commerce and uncertainty in the markets impacted the industry. The finance team demonstrated our ability to timely access both the debt and equity markets and provide low-cost capital. We have one of the strongest Board of Directors in the REIT industry with extensive public company leadership experience, as well as proficiency in real estate, finance, law, Pillar Two: Re-establish the brand value of Cole Capital. capital markets, institutional management, credit and other relevant Result: We increased market share among non-listed REIT disciplines. The addition of Richard J. Lieb and Mary Hogan Preusse as sponsors to 10.8% in 2016, compared to 2.7% in 2015. We new independent board members demonstrates our commitment to successfully closed CCIT II and opened CCIT III. have a Board of the highest quality. Pillar Three: Reduce debt and move the balance sheet Outlook towards investment-grade metrics. We are continually monitoring the financial health and credit of our Result: We reduced net debt from $8.0 billion to $6.1 billion tenants. Our retail focus has been, and will continue to be, on necessity and increased our liquidity with full capacity on our $2.3 and off-price retailers which we believe are positioned to weather various billion revolving line of credit. This resulted in investment- economic trends. Key categories include general discount, pharmacy, grade ratings on our debt from both S&P and Fitch Ratings. grocery, and home and garden. Within these categories, our exposure is Pillar Four: Adopt a sustainable dividend policy. Result: The Board authorized and declared a common stock dividend of $0.1375 per share for each quarter of 2016. Operational Achievements We finished the year with occupancy above 98% and 4.9 million square feet of leasing activity, of which 3.6 million square feet were early renewals. Diversification - which is one of our portfolio’s core attributes - across our three property types was further enhanced as we implemented our culling process resulting in 62.6% retail, including restaurants; 15.6% industrial; and 21.8% office, which we will continue to reduce exposure to in 2017. Our Top 10 tenants represent 30.2% of the portfolio, which is among the lowest concentration in the industry. Balance Sheet Strength In addition to enhancing the portfolio, we significantly transformed our capital structure during 2016 and placed ourselves in a strong position going forward. In addition to the balance sheet enhancements outlined above, we issued $1.0 billion of unsecured senior notes and $702.5 million of equity to prepay bonds expiring in February 2017 and partially paid down our term loan; lengthened our debt duration and created a well-staggered maturity schedule; and established a continuous equity offering program with an aggregate sales price of up to $750.0 million through September 2019. These accomplishments, along with the overall implementation of our business plan, resulted in investment grade ratings much sooner than anticipated and we were able to go on the offensive with fourth quarter acquisitions. predominantly with investment-grade-rated tenants and brand-name segment leaders including Family Dollar, Walmart, TJ Maxx, Walgreens, CVS, Albertson’s, Kroger, The Home Depot, Lowes, PetSmart and LA Fitness. During the fourth quarter, we acquired $80.2 million of properties. Our retail acquisition focus will continue on off-price segments including traditional and specialty grocers, select sporting goods, beauty aids, convenience stores, furniture, pet supplies, arts & crafts, home improvement and fitness. In 2017, we will also seek industrial assets in strategic locations with appropriate building functionality and tenants. On a macro level, there are a number of prospective economic variables, all moving at the same time, and some contradictory to each other: interest rates, inflation, GDP growth, tax, trade policy and potential regulatory policy changes, to name a few. This has led to uncertainty and lack of visibility towards the economic future. This uncertainty will lead some investors to look for simple, stable real estate investments - especially those with good yields - like VEREIT. We will remain focused and believe our business plan provides a solid balance sheet with a diversified portfolio. On behalf of all of us at VEREIT, I want to thank you for your trust as we executed our business plan. We will continue to monitor the economic environment and make sure we are on the right course, but our foundation and strategy are both solidly in place. The stability we have created is now our strength. Glenn J. Rufrano Chief Executive Officer | VEREIT, Inc. Executive Team Glenn J. Rufrano Chief Executive Officer Thomas W. Roberts Executive Vice President & Chief Investment Officer Michael J. Bartolotta Executive Vice President & Chief Financial Officer Paul H. McDowell Executive Vice President & Chief Operating Officer Lauren Goldberg Executive Vice President, General Counsel & Secretary William C. Miller Executive Vice President, Investment Management Board of Directors Hugh R. Frater Non-Executive Chairman Former Chairman and CEO of Berkadia David B. Henry Co-Founder and Chairman of Peaceable Street Capital Mary Hogan Preusse Managing Director and Co-Head of Americas Real Estate for APG Asset Management US1 Richard J. Lieb Managing Director and Chairman of Real Estate at Greenhill & Co., LLC Investor Relations InvestorRelations@VEREIT.com 877.405.2653 Mark S. Ordan CEO of Quality Care Properties, Inc. Eugene A. Pinover Partner and Chair of Real Estate Practice at DLA Piper Julie G. Richardson Former Senior Advisor at Providence Equity Partners Glenn J. Rufrano Chief Executive Officer of VEREIT, Inc. VEREIT, Inc. Headquarters 2325 East Camelback Road, Suite 1100 Phoenix, Arizona 85016 The following table shows a reconciliation of Net Debt to the amounts presented in accordance with GAAP on the balance sheet for the periods presented: (dollar amounts in thousands) December 31, 2016 December 31, 2015 Mortgage notes payable and other debt, net Corporate bonds, net Convertible debt, net Credit facility, net Mortgage notes payable associated with assets held for sale Total debt - as reported Adjustments: Deferred financing costs, net Net premiums Less: cash and cash equivalents Net Debt $2,671,106 2,226,224 973,340 496,578 — 6,367,248 55,660 (22,012) 256,452 $3,111,985 2,536,333 962,894 1,448,590 — 8,059,802 62,674 (39,131) 69,103 $6,144,444 $8,014,242 1) Ms. Hogan Preusse announced she will be leaving APG Asset Management US in early May 2017. VEREIT is not affiliated or associated with, is not endorsed by, does not endorse, and is not sponsored by or a sponsor of the tenants or of their products or services pictured or mentioned. The names, logos and all related product and service names, design marks and slogans are the trademarks or service marks of their respective companies. VEREIT-2016AnnualReportCover-2017-v2.indd 4-6 3/14/17 2:53 PM Your vote is important! Your vote is important! Your vote is important! Your vote is important! Your vote is important! Your vote is important! Please exercise your stockholder right to vote. Please exercise your stockholder right to vote. Please exercise your stockholder right to vote. Please exercise your stockholder right to vote. Please exercise your stockholder right to vote. Please exercise your stockholder right to vote. Your vote is important! Your vote is important! Your vote is important! Your vote is important! Your vote is important! Your vote is important! Your vote is important! Please exercise your stockholder right to vote. Please exercise your stockholder right to vote. Please exercise your stockholder right to vote. Please exercise your stockholder right to vote. www.VEREIT.com 2016 Annual Report VEREIT-2016AnnualReportCover-2017-v2.indd 1-3 3/14/17 2:53 PM As a full-service real estate operating company, VEREIT is driven to serve our tenants, stakeholders and employees through discipline, transparency and consistency. www.VEREIT.com 

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