VEREIT Annual Report 2017

Plain-text annual report

L E T T E R F R O M T H E C E O Dear Stockholder, At the beginning of 2017, VEREIT’s management team was focused on continuing the progress made toward our 2015 business plan. We have successfully built upon that foundation and better reﬁned the long-term business model which will provide a pathway to future share enhancement. As a full-service real estate operating company which owns and manages one of the largest portfolios of single-tenant commer- cial properties in the US, our business model eﬃciently provides equity capital to creditworthy corporations in return for long-term leases on their properties. Our established objectives and an update on the progress achieved is outlined below. Diversiﬁed and Strengthened Portfolio The most important aspect of our business is our portfolio of more than 4,000 properties. Reducing the risk of lost income and ensuring long term predictability in these properties is managed through portfolio diversiﬁcation. During 2015 and 2016, this process was primarily implemented through property sales. VEREIT’s culling process focuses on credit, industry, property type and income growth variables. In 2017, we became a net acquirer by buying assets to strengthen our property positions. Acquisitions totaled $745.6 million in 2017 and we completed $574.9 million of dispositions. We reduced our top 10 tenants to 28.3% of our portfolio, which is among the lowest concentration in the industry. Through the eﬀorts of our experienced real estate team, our property portfolio is becom- ing more balanced with 41% retail, 22% restaurants, 20% oﬃce and 17% industrial. Our portfolio continues to move in a direction we ﬁnd optimal for a large, diversiﬁed single-tenant construct. Simpliﬁed Business It was our goal to reestablish the Cole Capital brand. This well-established organization warranted such dedication. With the success we achieved over the last three years and the changing industry, we proceeded with the sale of Cole Capital to CIM Group, which closed on February 1, 2018. The sale simpliﬁed VEREIT’s business model by allowing for more straightforward reporting, a streamlined operating process, less ﬁduciary responsibility and a more predictable set of ﬁnancial expectations. Improved Balance Sheet During 2017, our ﬁnance team continued to strengthen and liquefy our balance sheet. Since 2015, we have reduced our total debt from $10.4 billion to $6.1 billion and our net debt to normalized EBITDA from 7.5x to 5.7x. In 2017, we further laddered our maturity schedule by issuing $600.0 million of senior notes to repay borrowings under our $500.0 million term loan with the remaining proceeds used to pay down secured debt. It is not often that a company’s improvements can be measured; however, the fact that our 2017 bond oﬀering was issued at a spread of approximately 100 basis points less than one year earlier is reﬂective of our success. Our balance sheet diligence was rewarded by the rating agencies. VEREIT received investment grade corporate ratings from S&P and Moody's and Fitch conﬁrmed its investment grade rating. Continued Sustainable Dividend Policy Our ﬁnal goal was to adopt and implement a sustainable dividend policy. The Board authorized and declared a dividend of $0.1375 per share for each quarter in 2017. In addition to the achievements we’ve made toward our estab- lished objectives, VEREIT has also made substantial strides in operations and portfolio management over the last year. Real Estate Operations In 2017, we increased our occupancy to 98.8% and had 2.5 million square feet of leasing activity, of which 1.5 million square feet were early renewals. Our early renewals increased the lease terms of these tenants from 4.8 to 11.6 years increas- ing the values of these assets. We will continue to manage the portfolio towards a number of long-term diversiﬁcation guide- lines: no tenant greater than 5%; no industry or geography greater than 10%; investment grade tenants between 30% and 40%; and a weighted average lease term approximating 10 years. We believe these metrics give us the proper risk and return characteristics for our business model. Leadership At VEREIT, leadership begins with our Board, comprised of talented individuals with core business competencies who provide valuable guidance. Our executive management team is comprised of industry leaders, committed to serving our tenants, stakeholders and employees. Their diligence in execu- tion has allowed us to achieve our established goals. VEREIT was named one of Arizona’s Most Admired Companies in 2017 based on workplace culture, leadership excellence, social responsibility, customer opinion and innovation. VEREIT’s employees are committed to fostering a culture of transparency, discipline and consistency, which allows our Company to be a best-in-class employer. 2018 Outlook We are in a period where capital market conditions are causing volatility in REIT shares despite generally good economic and market fundamentals. On a macro level, GDP growth, interest rates and the new tax policy bode well for the economy and our tenants. Over the past three years the capital markets have been more stable and VEREIT has taken advantage of that stability through portfolio diversiﬁcation mandates, improvements in investment grade ratings and a simpliﬁed business approach through the sale of Cole Capital. Our experienced team has worked through years of changing economic and market cycles and will continue to follow through on the objectives outlined here — portfolio diversiﬁcation and balance sheet health. Each are critical components in providing the most eﬃcient equity capital to our corporate tenants. Thank you for your continued trust, Glenn J. Rufrano | Chief Executive Oﬃcer | VEREIT, Inc. 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, 2017 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, a smaller reporting company or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. VEREIT, Inc. Large accelerated filer Accelerated filer Smaller reporting company Emerging growth company VEREIT Operating Partnership, L.P. Large accelerated filer Accelerated filer Smaller reporting company Emerging growth company Non-accelerated filer (Do not check if a smaller reporting company) Non-accelerated filer (Do not check if a smaller reporting company) If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section 13(a) of the Exchange Act. VEREIT, Inc. VEREIT Operating Partnership, L.P. 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, 2017 was approximately $7.9 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 974,297,922 shares of common stock of VEREIT, Inc. outstanding as of February 20, 2018. 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 2018 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, 2017 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,” the “Company” or the “General Partner” mean VEREIT, Inc. 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 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 or debt 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 disclosures in Item 4. Controls and Procedures and 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. [THIS PAGE INTENTIONALLY LEFT BLANK] VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. For the fiscal year ended December 31, 2017 Forward-Looking Statements PART I Item 1. Business Item 1A. Risk Factors Item 1B. Unresolved Staff Comments Item 2. Properties Item 3. Legal Proceedings Item 4. Mine Safety Disclosures PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Item 6. Selected Financial Data Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Item 7A. Quantitative and Qualitative Disclosures About Market Risk Item 8. Financial Statements and Supplementary Data Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Item 9A. Controls and Procedures Item 9B. Other Information PART III Item 10. Directors, Executive Officers and Corporate Governance Item 11. Executive Compensation Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Item 13. Certain Relationships and Related Transactions, and Director Independence Item 14. Principal Accounting Fees and Services PART IV Item 15. Exhibits and Financial Statement Schedules Item 16. Form 10-K Summary Signatures Index to Consolidated Financial Statements Page 2 4 8 29 29 29 29 30 32 33 52 52 53 53 56 57 57 57 57 57 58 63 64 F-1 1 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 of 1934, as amended (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 are subject to risks associated with pending government investigations relating to the findings of the investigation conducted in 2014 by the audit committee (the “Audit Committee”) of the General Partner’s board of directors (the “Audit Committee Investigation”) and related litigation, including the expense of such investigations and litigation and any potential payments upon resolution. • 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 10 –Debt), and the terms of the Credit Facility (as defined in Note 10 – 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 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 our Annual Report on Form 10-K for the year ended December 31, 2017. 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. 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 2 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. When we refer to “operating properties” we mean properties owned by the Company and beginning in 2017, omitting properties for which (i) the related mortgage loan is in default, and (ii) management decides to transfer the properties to the lender in connection with settling the mortgage note obligation. As of December 31, 2017, our portfolio was comprised of 4,092 retail, restaurant, office and industrial real estate properties with an aggregate of 94.7 million square feet, of which 98.5% was leased, with a weighted-average remaining lease term of 9.5 years. As of December 31, 2017, one vacant industrial property (the “Excluded Property”), comprised of 307,275 square feet, which secured a mortgage note payable with debt outstanding of $16.2 million, was not considered an operating property. Omitting the Excluded Property, we owned 4,091 operating properties with an aggregate of 94.4 million square feet, of which 98.8% was leased, with a weighted-average remaining lease term of 9.5 years as of December 31, 2017. 3 Item 1. Business. Overview PART I VEREIT is a full-service real estate operating company which owns and manages one of the largest portfolios of single- tenant commercial properties in the U.S. The Company has 4,091 retail, restaurant, office and industrial operating properties with an aggregate of 94.4 million square feet, of which 98.8% was leased as of December 31, 2017, with a weighted-average remaining lease term of 9.5 years. VEREIT’s business model provides equity capital to creditworthy corporations in return for long-term leases on their properties. Substantially all of our real estate 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, 2017 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). Prior to the fourth quarter of 2017, the Company operated through two business segments, the real estate investment segment and the investment management segment, Cole Capital. On November 13, 2017, the Company entered into a purchase and sale agreement to sell substantially all of the Cole Capital segment. The sale closed on February 1, 2018. Substantially all of the Cole Capital segment is presented as discontinued operations and the Company’s remaining financial results are reported as a single segment for all periods presented. The Company's continuing operations represent primarily those of the real estate investment segment. See Note 5 —Discontinued Operations, for further information on the sale of Cole Capital. 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 formed 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. 2017 Developments Real Estate Acquisitions During the year ended December 31, 2017, the Company acquired controlling financial interests in 88 commercial properties for an aggregate purchase price of $748.8 million. Real Estate Dispositions During the year ended December 31, 2017, the Company disposed of 137 properties for an aggregate sales price of $594.9 million, of which the Company’s share was $574.4 million after the profit participation payments related to the disposition of 31 Red Lobster properties and the consolidated joint venture partner’s share of the sales price, resulting in consolidated proceeds of $445.5 million after closing costs and a $66.0 million debt assumption. Balance Sheet and Liquidity 2017 Bond Offering On August 11, 2017, the Company closed a senior note offering, consisting of $600.0 million aggregate principal amount of the Operating Partnership’s 3.950% Senior Notes due 2027, (the “2017 Bond Offering”). As discussed in Note 10 – Debt, the Company subsequently used the proceeds from the 2017 Bond Offering to repay borrowings, including swap termination costs and accrued and unpaid interest under its $500.0 million Credit Facility Term Loan. The Company used the remaining proceeds to pay down secured debt. Share Repurchase Program On May 12, 2017, the Company’s board of directors authorized the repurchase of up to $200.0 million of the Company’s outstanding Common Stock over the subsequent 12 months, as market conditions warrant. During the year ended December 31, 2017, the Company repurchased 68,759 shares of Common Stock in multiple open market transactions for $0.5 million as part of the Share Repurchase Program. 4 Debt Reductions The Company decreased total debt by $293.8 million, from $6.4 billion to $6.1 billion, partially due to the repayment of the Credit Facility Term Loan of $500.0 million and a $579.9 million reduction of secured debt. These reductions of debt were partially offset by the issuance of $600.0 million of unsecured notes and net borrowings on the revolving credit facility of $185.0 million. Cole Capital Sale On November 13, 2017, we entered into a purchase and sale agreement (as amended by that certain First Amendment to the Purchase and Sale agreement, dated as of February 1, 2018, the “Cole Capital Purchase and Sale Agreement”) with CCA Acquisition, LLC (the “Cole Purchaser”), an affiliate of CIM Group, LLC. Under the terms of the Cole Capital Purchase and Sale Agreement, the Company agreed to sell to the Cole Purchaser all of the issued and outstanding shares of common stock of Cole Capital Advisors, Inc. (“CCA”), our subsidiary that sponsors and manages non-listed real estate investment trusts, and certain of CCA’s subsidiaries. The sale closed (the “Cole Capital Closing Date”) on February 1, 2018 for total consideration of approximately $120 million paid in cash. On the Cole Capital Closing Date, we entered into a services agreement (the “Services Agreement”) with Cole Capital, pursuant to which we will continue to provide certain services to Cole Capital and its subsidiaries and to 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”), and Cole Credit Property Trust V, Inc. (“CCPT V” and collectively with CCPT IV, INAV, CCIT II and CCIT III, the “Cole REITs”) including operational real estate support. Under the terms of the Services Agreement, we will be entitled to receive reimbursement for certain of the services provided and fees based on the future revenues of Cole Capital above a specified dollar threshold (the “Net Revenue Payments”), up to an aggregate of $80 million in Net Revenue Payments. Primary Investment Focus We own and actively manage a diversified portfolio of single-tenant 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. 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 and mitigation options. 5 Real Estate Investments As of December 31, 2017, omitting the Excluded Property, the Company owned 4,091 operating properties comprising 94.4 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 98.8% leased with a weighted-average remaining lease term of 9.5 years. There were no tenants exceeding 10% of our consolidated annualized rental income as of December 31, 2017, 2016 or 2015. As of December 31, 2017, 2016 and 2015, properties located in Texas represented 12.8%, 13.5% and 13.1%, respectively, of our consolidated annualized rental income. As of December 31, 2017, tenants in the casual dining restaurant and manufacturing industries accounted for 13.8% and 10.1%, 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. 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 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 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. 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. 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 6 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, 2017, we had approximately 330 employees. Following the closing of the Cole Capital sale, approximately 100 of these employees were employed by the Cole Purchaser. 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. Supplemental U.S. Federal Income Tax Considerations This summary is for general information purposes only and is not tax advice. This discussion does not address all aspects of taxation that may be relevant to particular holders of our securities in light of their personal investment or tax circumstances. Recent Legislation The recently enacted “Tax Cuts and Jobs Act” (the “TCJA”), generally applicable for tax years beginning after December 31, 2017, made significant changes to the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), including a number of provisions of the Internal Revenue Code that affect the taxation of businesses and their owners, including REITs and their stockholders. Among other changes, the TCJA made the following changes: • For tax years beginning after December 31, 2017 and before January 1, 2026, (i) the U.S. federal income tax rates on ordinary income of individuals, trusts and estates have been generally reduced and (ii) non-corporate taxpayers are permitted to take a deduction for certain pass-through business income, including dividends received from REITs that are not designated as capital gain dividends or qualified dividend income, subject to certain limitations. • The maximum U.S. federal income tax rate for corporations has been reduced from 35% to 21%, and corporate alternative minimum tax has been eliminated for corporations, which would generally reduce the amount of U.S. federal income tax payable by our taxable REIT subsidiaries (“TRSs”) and by us to the extent we were subject to corporate U.S. federal income tax (for example, if we distributed less than 100% of our taxable income or recognized built-in gains in assets acquired from C corporations). In addition, the maximum withholding rate on distributions by us to non-U.S. stockholders that are treated as attributable to gain from the sale or exchange of a U.S. real property interest is reduced from 35% to 21%. • Certain new limitations on the deductibility of interest expense now apply, which limitations may affect the deductibility of interest paid or accrued by us or our TRSs. However, a taxpayer that qualifies as a real estate business may elect to be exempt from such limitations on the deductibility of interest expense. • Certain new limitations on net operating losses now apply, which limitations may affect net operating losses generated by us or our TRSs. • A U.S. tax-exempt stockholder that is subject to tax on its unrelated business taxable income (“UBTI”) will be required to separately compute its taxable income and loss for each unrelated trade or business activity for purposes of determining its UBTI. 7 • New accounting rules generally require us to recognize income items for federal income tax purposes no later than when we take the item into account for financial statement purposes, which may accelerate our recognition of certain income items. 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. 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, a default specific to a particular property could result in a termination of the entire 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 lower rents, 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, 2017, we had derived approximately: • $75.4 million, or 6.5%, of our annualized rental income from Red Lobster®, a wholly owned subsidiary of Golden Gate Capital; $343.8 million, or 29.8%, of our annualized rental income from properties located in the following four states: Texas (12.8%), Ohio (5.9%), Florida (5.6%), and Illinois (5.5%); and $612.7 million, or 53.0%, of our annualized rental income from tenants in the following six industries: the casual dining restaurant industry (13.8%), the manufacturing industry (10.1%), the quick service restaurant industry (8.9%), the discount retail industry (8.1%), the pharmacy retail industry (7.1%) and the grocery & supermarket retail industry (5.0%). • • 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. 8 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(s) 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, 2017, 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 analysis. Changes in management’s assumptions based on actual results may have a material impact on the Company’s financial statements. See “Note 9 – 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, 2017, 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, 2017, 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 where the tenant is not rated may have a greater risk of default. As of December 31, 2017, approximately 60.4% 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 9 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 and REIT limitations. 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 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. 10 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 distribution to our stockholders and unitholders. If a sale-leaseback is 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 is 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 maintain profitability. Since our inception in 2010, we have experienced net losses (calculated in accordance with U.S. GAAP) and as of December 31, 2017, had an accumulated deficit of $4.78 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. 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; • we may acquire properties that are not accretive to our earnings 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. 11 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, 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 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; 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; loss of property rights, adverse impacts on our tenants’ business operations and/or increases in tenant vacancies resulting from eminent domain proceedings; 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 Americans with Disabilities Act. Any or all of these factors could materially adversely affect our results of operations through decreased revenues or increased costs. 12 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, war or nuclear explosions. 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 (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 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, 2017 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 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 13 are cooperating with these regulators in their investigations. The amount of time needed to resolve these investigations is uncertain, and, although the U.S. Attorney’s Office for the Southern District of New York has indicated that it does not intend to bring criminal charges against the Company arising from its investigation, we cannot predict the outcome of other 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, including advancement of legal fees. These matters could result in 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 directors, among others, have been named as defendants in various lawsuits related to the findings of the Audit Committee Investigation which have resulted in significant legal expenses which are expected to continue. Any resolution could require substantial payments by the Company, 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 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. These lawsuits have resulted in significant ongoing legal expenses, which are expected to continue. The resolution of these matters, and the timing thereof, are uncertain. Any such resolution, whether through a judgment or a settlement, could require substantial payments by the Company, including potential indemnification obligations, which in large part are not expected to 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 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 14 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 expects the accounting for leases pursuant to which the Company is the lessee to change and is currently evaluating the impact. Leases pursuant to which the Company is the lessee primarily consist of corporate offices and ground leases. 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. Competition that traditional retail tenants face from e-commerce retail sales, or the integration of brick and mortar stores with e-commerce retailers, could adversely affect our business. Our retail tenants face increasing competition from e-commerce retailers. E-commerce sales have accounted for an increasing percentage of retail sales over the past few years and this trend is expected to continue. These trends may have an impact on decisions that retailers make regarding their brick and mortar stores. Changes in shopping trends as a result of the growth in e- commerce may also impact the profitability of retailers that do not adapt to changes in market conditions. The continued growth of e-commerce sales could decrease the need for traditional retail outlets and reduce retailers' space and property requirements. These conditions could adversely impact our results of operations and cash flows if we are unable to meet the needs of our tenants or if our tenants encounter financial difficulties as a result of changing market conditions. 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 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. 15 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, 2017, our aggregate indebtedness was $6.1 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, capital improvements and leasing commissions in connection with the repositioning of a property and litigation expenses. At December 31, 2017, we had $2.1 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 properties, possibly on disadvantageous terms; • 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; 16 • 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, 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. 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. 17 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 and issue- level ratings for our Senior Notes are “BBB-” with a “stable” outlook from Standard & Poor’s Rating Services. Our corporate credit and issue-level ratings for our Senior Notes are “Baa3” with a “stable” outlook assigned by Moody’s Investor Service, Inc. Our corporate credit and issue-level ratings for our Senior Notes are “BBB-“ with a “stable” outlook assigned by Fitch Ratings, Inc. 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. 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 18 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; changes in our key management; the financial condition, liquidity, results of operations, and prospects of our tenants; 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 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. 19 Risks Relating to our Real Estate Investments 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. 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 20 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 acquisitions are subject to additional risks related to properties under development. From time to time, we engage in build-to-suit acquisitions 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, and if other conditions have been met such as there is an effective lease for the property, the tenant has accepted the property and commenced paying rent. 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 Related to the Services Agreement Our continuing obligation to provide services to Cole Capital under the Services Agreement could have an adverse effect on our business operations. In connection with the closing of the Cole Capital sale, we entered into the Services Agreement, pursuant to which we will continue to provide certain services, including operational real estate support, through March 31, 2019 (or, if later, the date of the last government filing other than a tax filing made by any of the Cole REITs with respect to its 2018 fiscal year) and will provide consulting and research services through December 31, 2023 as requested by CCA. Under the terms of the Services Agreement, we will be entitled to receive reimbursement for certain of the services provided and fees based on the future revenues of CCA above a specified dollar threshold (the “Net Revenue Payments”), up to an aggregate of $80.0 million in Net Revenue Payments. There is no assurance that we will be successful in managing these services so that they do not have an adverse effect on our business operations and there can be no assurance that we will receive any Net Revenue Payments after February 1, 2018, under the Services Agreement. We are subject to conflicts of interest relating to the Cole REITs. During the initial term of the Services Agreement, property acquisition opportunities will be allocated among us and the real estate programs sponsored by CCA pursuant to an asset allocation policy and in accordance with the terms of the Services Agreement. The Cole REITs have characteristics, including targeted investment types, and investment objectives and criteria substantially 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. During the initial term of the Services Agreement, in the event that an investment opportunity is identified that may be suitable for more than one of us or the other programs sponsored by CCA and for which more than one of such entities has sufficient uninvested funds, then an allocation committee, which is comprised of employees of the Company and employees of CIM Group, 21 LLC, CCA or their respective affiliates, will examine the following factors, among others, in determining the entity for which the investment opportunity is most appropriate: • • • • • • • 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 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, in the judgment of the allocation committee, the investment opportunity may be equally appropriate for more than one program, 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, retail properties or anchored shopping centers) will be allocated such investment opportunity. If a subsequent development, such as a delay in the closing of the acquisition or a delay in the construction of a property, causes any such investment, in the opinion of the allocation committee, to be more appropriate for an entity other than the entity that committed to make the investment, the allocation committee may determine that the Company or a program sponsored by CCA will make the investment. For programs sponsored by CCA that commenced operations on or after March 5, 2013, the Company retains a right of first refusal for all opportunities to acquire real estate and real estate-related assets or portfolios with a purchase price greater than $100 million. This right of first refusal applies to CCIT II, CCIT III and CCPT V, but does not apply to CCPT IV or INAV. 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. 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, 2017, 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. 22 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 ARC Properties Advisors, LLC (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 23 and results of operations and our ability to satisfy our debt service obligations and to make distributions to our stockholders and unitholders. 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. 24 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. 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. 25 Recent legislation substantially modified the taxation of REITs and their shareholders, and the effects of such legislation and related regulatory action are uncertain. On December 22, 2017, President Trump signed into law H.R. 1, informally titled the Tax Cuts and Jobs Act (the “TCJA”). The TCJA makes major changes to the Code, including a number of provisions of the Code that affect the taxation of REITs and their stockholders. Among the changes made by the TCJA are permanently reducing the generally applicable corporate tax rate, generally reducing the tax rate applicable to individuals and other non-corporate taxpayers for tax years beginning after December 31, 2017 and before January 1, 2026, eliminating or modifying certain previously allowed deductions (including substantially limiting interest deductibility and, for individuals, the deduction for non-business state and local taxes), and, for taxable years beginning after December 31, 2017 and before January 1, 2026, providing for preferential rates of taxation through a deduction of up to 20% (subject to certain limitations) on most ordinary REIT dividends and certain trade or business income of non-corporate taxpayers. The TCJA also imposes new limitations on the deduction of net operating losses and requires us to recognize income for tax purposes no later than when we take it into account on our financial statements, which may result in us having to make additional taxable distributions to our stockholders in order to comply with REIT distribution requirements or avoid taxes on retained income and gains. The effect of the significant changes made by the TCJA is highly uncertain, and administrative guidance will be required in order to fully evaluate the effect of many provisions. The effect of any technical corrections with respect to the TCJA could have an adverse effect on us or our stockholders. Investors should consult their tax advisors regarding the implications of the TCJA on their investment in our capital stock. 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. Pursuant to the TCJA, non-corporate recipients of dividends from a REIT (other than capital gains dividends and dividends eligible for treatment as qualified dividends) may deduct up to 20% of such REIT dividends for taxable years beginning before January 1, 2026. This deduction mitigates but does not eliminate the difference in effective tax rates between REIT dividends and dividends paid by C corporations. 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, and for any year in which we fail to be a “publicly offered” REIT within the meaning of Section 562 of the Code, 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.” We believe we qualify as a publicly offered REIT, but there can be no assurance that we will continue to so qualify. 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 prior to January 1, 2015 (or any later year in which we are not a publicly offered REIT), 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. 26 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 20% 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. 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, Cole or CCPT 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, 2013 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 27 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. 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 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 28 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, 2017, omitting the Excluded Property, the Company owned 4,091 operating properties comprising 94.4 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 98.8% leased with a weighted-average remaining lease term of 9.5 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 14 – 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. Item 4. Mine Safety Disclosures. Not applicable. 29 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. 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, 2012 and ending December 31, 2017. The graph assumes an investment of $100 on December 31, 2012. 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 the 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 (1) First Quarter 2016 Second Quarter 2016 Third Quarter 2016 Fourth Quarter 2016 First Quarter 2017 Second Quarter 2017 Third Quarter 2017 Fourth Quarter 2017 $ $ $ 8.92 6.68 0.1375 $ $ $ 10.14 8.67 0.1375 $ $ $ 11.09 9.76 0.1375 $ $ $ 10.35 7.99 0.1375 $ $ $ 9.12 8.18 0.1375 $ $ $ 8.94 7.44 0.1375 $ $ $ 8.75 7.90 0.1375 $ $ $ 8.57 7.64 0.1375 _______________________________________________ (1) 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 16, 2018 when the dividend on the General Partner’s common stock was paid, as further discussed in “Note 16 - Equity” in our consolidated financial statements. 30 On February 21, 2018, 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 2018 to stockholders of record as of March 30, 2018, which will be paid on April 16, 2018. 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 20, 2018, the General Partner had approximately 3,700 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 20, 2018, there were 29 record holders of the OP Units. Recent Sales of Unregistered Securities During the year ended December 31, 2017, the Company did not redeem any Limited Partner OP Units for shares of the General Partner's 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, 2017: 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) 91,295,800 — — — 91,295,800 (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 16 – 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, 2017, 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 October 1, 2017 - October 31, 2017 November 1, 2017 - November 30, 2017 December 1, 2017 - December 31, 2017 Total _________________________________________ Total Number of Shares/ Units Purchased Weighted Average Price Paid Per Share/ Unit Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs 26,462 413 6,752 33,627 $ 8.41 (1) 8.07 (1) 7.79 (1) 8.28 — — — — $ — — — — (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. 31 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: 2017 2016 2015 2014 (1) 2013 (1) December 31, Balance sheet data: Total real estate investments, at cost Total assets Total debt, net Total liabilities Temporary equity Total equity Operating data: Total revenues Impairments Total other operating expenses Operating income (loss) Total other expenses, net Gain (loss) on disposition of real estate and real estate assets held for sale, net Provision for income taxes Income (loss) from continuing operations Loss from discontinued operations, net of income taxes Net income (loss) Net (income) loss attributable to non-controlling interests(2) Net income (loss) attributable to General Partner Cash flow data: Net cash flows provided by operating activities Net cash flows (used in) provided by investing activities Net cash flows (used in) provided by financing activities Per share data: Basic and diluted net loss per share from continuing operations attributable to common stockholders Basic and diluted net loss per share from discontinued 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) $ 15,615,375 $ 14,705,578 $ 6,073,444 $ 6,662,702 $ $ 8,042,876 $ 15,584,442 $ 15,587,574 $ 6,367,248 $ 6,968,041 $ 16,784,721 $ 17,405,866 $ 8,059,802 $ 8,691,907 $ 18,292,560 $ 20,427,136 $ 10,425,778 $ 11,044,806 — $ — $ — $ — $ $ 8,619,533 $ 8,713,959 $ 9,382,330 Year Ended December 31, $ 7,459,142 $ 7,747,494 $ 4,286,619 $ 5,248,967 269,299 $ 2,229,228 2017 2016 2015 2014 (1) 2013 (1) 329,323 3,346 659,721 (333,744) (171,876) — (2,195) (507,815) — $ 1,252,285 50,548 945,484 256,253 $ 1,335,447 182,820 963,598 189,029 $ 1,441,135 91,755 1,059,590 289,790 $ 1,375,699 100,547 1,315,951 (40,799) $ (259,412) (304,304) (351,882) (398,947) 61,536 (6,882) 51,495 (19,117) 32,378 45,524 (7,136) (76,887) (123,937) (200,824) (72,311) (4,589) (138,992) (184,500) (277,031) (7,313) (724,090) (286,822) (323,492) (1,010,912) (507,815) (560) 4,961 7,139 33,727 16,316 31,818 $ (195,863) $ (316,353) $ (977,185) $ (491,499) 793,267 $ 797,948 (274,106) $ 881,637 $ $ 859,695 $ 502,887 $ 11,918 941,417 $ (2,527,726) $ (4,541,718) (756,595) $ (1,506,985) $ (2,151,604) $ 2,415,555 $ 4,295,604 (0.02) $ (0.16) $ (0.23) $ (1.01) $ (2.41) (0.02) (0.13) (0.20) (0.35) — (0.04) $ (0.29) $ (0.43) $ (1.36) $ (2.41) $ $ $ $ $ $ 974,098,652 931,422,844 903,360,763 793,150,098 205,341,431 Cash dividends declared per common share $ 0.55 $ 0.55 $ 0.28 $ 1.08 $ 0.91 _______________________________________________ (1) The Company’s operations were impacted by significant mergers with real estate businesses during these periods. (2) Represents income or 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. 32 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 VEREIT is a full-service real estate operating company which owns and manages one of the largest portfolios of single- tenant commercial properties in the U.S. The Company has 4,091 retail, restaurant, office and industrial operating properties with an aggregate 94.4 million square feet, of which 98.8% was leased as of December 31, 2017, with a weighted-average remaining lease term of 9.5 years. Prior to the fourth quarter of 2017, we operated through two business segments, our real estate investment segment and our investment management segment, Cole Capital, which sponsored and managed non-listed real estate investment trusts. On November 13, 2017, we entered into the Cole Capital Purchase and Sale Agreement to sell substantially all of the Cole Capital segment. The sale closed on February 1, 2018. Substantially all of the Cole Capital segment is presented as discontinued operations and the Company’s remaining financial results are reported as a single segment for all periods presented. See Note 5 —Discontinued Operations, for further information on the sale of Cole Capital. Effective January 1, 2017, we determined that adjusted funds from operations (“AFFO”), a non-GAAP measure, and our real estate portfolio and economic metrics, should exclude the impact of properties owned by the Company for the month beginning with the date that (i) the properties’ related mortgage loan is in default and (ii) management decides to transfer the properties to the lender in connection with settling the mortgage note obligation, and ending with the disposition date ("Excluded Properties"), to better reflect our ongoing operations. Excluded Properties during the year ended December 31, 2017, were two vacant office properties and five industrial properties, two of which were vacant. Excluded Properties at December 31, 2017, included one vacant industrial property, comprised of 307,275 square feet, which secured a mortgage note payable, with debt outstanding of $16.2 million. The Company did not update data presented for prior periods for this change as it determined the impact on our prior periods was immaterial. 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 the United States, the overall economic environment continued to improve in 2017. During 2017, the U.S. real gross domestic product increased 2.3%, the unemployment rate decreased 0.6 percentage points to 4.1%, and Core CPI, a measure of inflation which removes food & energy prices and is seasonally adjusted, increased 1.8%, 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. 33 Goodwill Impairment We evaluate goodwill for impairment annually or more frequently when an event occurs or circumstances change that indicate the carrying value may not be recoverable. We adopted 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). 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 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 9 – 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 affect 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. Allocation of Purchase Price of Real Estate Assets 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. 34 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. 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 2017 Activity • Acquired controlling financial interests in 88 commercial properties and three land parcels for an aggregate purchase price of $748.8 million, which includes $3.3 million of external acquisition-related expenses that were capitalized and 22 properties acquired in a nonmonetary exchange. • Disposed of 137 properties, including six properties relinquished by foreclosure or deed-in-lieu of foreclosure transactions, for an aggregate sales price of $594.9 million, of which our share was $574.4 million, resulting in consolidated proceeds of $445.5 million after a mortgage loan assumption and closing costs, including 15 properties disposed of in connection with a nonmonetary exchange. • Total secured debt decreased by $579.9 million, from $2.7 billion to $2.1 billion. • Closed 2017 Bond Offering of $600.0 million and repaid all of the outstanding borrowings under our $500.0 million Credit Facility Term Loan. • Declared a quarterly dividend of $0.1375 per share of common stock for each quarter of 2017, representing an annualized dividend rate of $0.55 per share. • Entered into a purchase and sale agreement to sell substantially all of Cole Capital. 35 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 operating property type diversification and our top ten concentrations as of December 31, 2017, based on annualized rental income of $1.2 billion, 36 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 operating properties, excluding properties owned through our unconsolidated joint ventures as of December 31, 2017, 2016 and 2015: Portfolio Metrics Operating properties Rentable square feet (in millions) Economic occupancy rate (2) Investment-grade tenants (3) ____________________________________ (1) Omits the impact, if any, of the Excluded Properties. 2017 (1) 4,091 94.4 98.8% 39.6% 2016 4,142 93.3 98.3% 41.2% 2015 4,435 99.6 98.6% 42.5% (2) Economic occupancy rate equals the sum of square feet leased (including space subject to month-to-month agreements) divided by total square feet. (3) Investment-grade tenants are those with a credit rating of BBB- or higher by Standard & Poor’s Financial Services LLC or a credit rating of Baa3 or higher by Moody’s Investor Service, Inc. The ratings may reflect those assigned by Standard & Poor’s Financial Services LLC 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 operating properties, excluding properties owned through our unconsolidated joint ventures, as of December 31, 2017, 2016 and 2015: Economic Metrics Weighted-average lease term (in years) (2) Lease rollover (2)(3): Annual average Maximum for a single year ____________________________________ (1) Omits the impact, if any, of the Excluded Properties. 2017 (1) 9.5 4.8% 7.3% 2016 9.9 4.3% 7.4% 2015 10.6 3.8% 4.5% (2) Based on annualized rental income of our real estate portfolio as of December 31, 2017. (3) Through the end of the next five years as of the respective reporting date. 37 Operating Performance In addition, management uses the following financial metrics to assess our operating performance (dollar amounts in thousands, except per share amounts). Data presented includes both continuing operations, which primarily represent the Company's real estate operations, and discontinued operations, which represent substantially all of Cole Capital, except as otherwise indicated. Financial Metrics Revenues (1) Operating income (1) Income (loss) from continuing operations Loss from discontinued operations, net of income taxes Loss from continuing operations attributable to common stockholders per diluted share (2) Loss from discontinued operations attributable to common stockholders per diluted share (2) Net loss attributable to common stockholders per diluted share (2) FFO attributable to common stockholders and limited partners from continuing operations (3) FFO attributable to common stockholders and limited partners from discontinued operations (3) FFO attributable to common stockholders and limited partners (3) AFFO attributable to common stockholders and limited partners from continuing operations (3) AFFO attributable to common stockholders and limited partners from discontinued operations (3) AFFO attributable to common stockholders and limited partners (3) AFFO attributable to common stockholders and limited partners from continuing operations per diluted share (3) AFFO attributable to common stockholders and limited partners from discontinued operations per diluted share (3) AFFO attributable to common stockholders and limited partners per diluted share (3) Year Ended December 31, 2017 2016 2015 1,252,285 256,253 $ $ 51,495 $ (19,117) $ 1,335,447 $ 1,441,135 $ 189,029 (76,887) $ (123,937) $ 289,790 (138,992) (184,500) (0.02) $ (0.16) $ (0.23) (0.02) (0.04) $ (0.13) (0.29) $ (0.20) (0.43) 672,225 $ 737,353 $ 769,666 (19,117) 653,108 $ (123,937) 613,416 $ (184,500) 585,166 702,556 $ 723,354 $ 770,567 36,213 18,103 11,491 738,769 $ 741,457 $ 782,058 0.70 $ 0.76 $ 0.04 0.02 0.74 $ 0.78 $ 0.83 0.01 0.84 $ $ $ $ $ $ $ $ $ $ $ $ ____________________________________ (1) Represents continuing operations as presented on the statement of operations in accordance with GAAP. (2) See “Note 18 – Net Income (Loss) Per Share/Unit” for calculation of net income (loss) per share. (3) See the “Non-GAAP Measures” section below for descriptions of our non-GAAP measures and reconciliations to the most comparable U.S. GAAP measure. 38 Property Financing Our mortgage notes payable consisted of the following as of December 31, 2017, 2016 and 2015 (dollar amounts in thousands): December 31, 2017 (4) December 31, 2016 December 31, 2015 _______________________________________________ Encumbered Properties Outstanding Loan Amount Weighted Average Effective Interest Rate (1)(2) Weighted Average Maturity (3) 471 619 654 $ $ $ 2,054,838 2,629,949 3,039,882 4.88% 4.95% 5.08% 4.1 4.6 5.1 (1) Mortgage notes payable have fixed rates or are fixed by way of interest rate swap arrangements. Effective interest rates ranged from 3.1% to 7.2% at December 31, 2017, 2.00% to 7.75% at December 31, 2016, and 3.10% to 10.68% at December 31, 2015. (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 years remaining to maturity is computed using the anticipated repayment date as specified in each loan agreement, where applicable. (4) Omits the Excluded Property and the related outstanding loan amount of $16.2 million and interest rate of 9.48%. 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 operating properties we owned as of December 31, 2017 (dollar amounts and square feet in thousands): Year of Expiration 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 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 150 171 218 188 287 247 174 266 248 367 1,009 3,325 2,173 2,769 3,935 10,523 9,380 6,036 9,060 4,197 8,779 7,661 28,812 93,325 2.3% $ 2.9% 4.2% 11.1% 9.9% 6.4% 9.6% 4.4% 9.3% 8.1% 30.6% 98.8% $ 26,924 45,237 42,621 84,081 80,416 75,240 105,547 60,209 84,535 103,552 446,194 1,154,556 2.3% 3.9% 3.7% 7.3% 7.0% 6.5% 9.1% 5.2% 7.3% 9.0% 38.7% 100.0% _______________________________________________ (1) The Company has certain leases comprised of multiple properties. 39 Results of Operations Prior to the fourth quarter of 2017, the Company operated through two business segments, the real estate investment segment and the investment management segment, Cole Capital. On November 13, 2017, the Company entered into a purchase and sale agreement to sell substantially all of the Cole Capital segment. The sale closed on February 1, 2018. Substantially all of the Cole Capital segment is presented as discontinued operations and the Company’s remaining financial results are reported as a single segment for all periods presented. The Company's continuing operations represent primarily those of the real estate investment segment. Rental Income The table below sets forth, for the periods presented, rental income information and the dollar amount change year over year (dollar amounts in thousands): Rental income $ 1,154,147 $ 1,229,992 $ 1,342,507 $ (75,845) $ (112,515) 2017 2016 2015 2017 vs 2016 Increase/(Decrease) 2016 vs 2015 Increase/(Decrease) Year Ended December 31, 2017 vs 2016 – The decrease in rental income of $75.8 million during the year ended December 31, 2017 as compared to the year ended December 31, 2016 was primarily due to the disposition of 438 consolidated properties subsequent to January 1, 2016. 2016 vs 2015 – Rental revenue decreased $112.5 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”). 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, 2017 2016 2015 2017 vs 2016 Increase/ (Decrease) 2016 vs 2015 Increase/ (Decrease) Acquisition-related $ 3,402 $ 1,321 $ 6,243 $ 2,081 $ (4,922) Litigation, merger and other non-routine costs, net of insurance recoveries Property operating General and administrative Depreciation and amortization Impairments 47,960 128,717 58,603 706,802 50,548 3,884 144,428 51,927 762,038 182,820 33,628 130,855 67,137 821,727 91,755 44,076 (15,711) 6,676 (55,236) (132,272) Total operating expenses $ 996,032 $ 1,146,418 $ 1,151,345 $ (150,386) $ (29,744) 13,573 (15,210) (59,689) 91,065 (4,927) Acquisition-Related Expenses Subsequent to the adoption of ASU 2017-01 as discussed in “Note 2 – Summary of Significant Accounting Policies” to our consolidated financial statements, acquisition-related expenses consist primarily of internal salaries allocated to acquisition-related activities and costs incurred for deals that were not consummated. 2017 vs 2016 - The increase of $2.1 million in acquisition-related expenses for the year ended December 31, 2017, as compared to the same period in 2016 was primarily due to an increase in allocated internal salaries resulting from time spent on acquiring commercial properties during the year ended December 31, 2017. The Company resumed property acquisitions in the fourth quarter of 2016 and acquired 88 properties and three land parcels for an aggregate purchase price of $748.8 million during the year ended December 31, 2017. 2016 vs 2015 - 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 40 ended December 31, 2016 was due to a decrease in costs incurred for deals that were not consummated and fewer properties acquired in 2016. Litigation, Merger and Other Non-routine Costs, Net of Insurance Recoveries 2017 vs 2016 - The increase of $44.1 million during the year ended December 31, 2017 as compared to the same period in 2016 was due to an increase of $25.2 million in legal fees incurred related to the Audit Committee Investigation and related litigation and investigations during the year ended December 31, 2017 as compared to the same period in 2016. Additionally, the Company recognized $21.2 million of insurance recoveries during the year ended December 31, 2016, of which $10.5 million related to litigation resulting from prior mergers and $10.7 million related to the Audit Committee Investigation and related litigation and investigations. No insurance recoveries were recognized during the year ended December 31, 2017 related to the litigation resulting from prior mergers. 2016 vs 2015 - The decrease of $29.7 million during the year ended December 31, 2016 was primarily due to a $20 million decrease in legal fees incurred for litigation arising from the results of 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. Property Operating Expenses and Operating Expense Reimbursements 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, 2017 2016 2015 2017 vs 2016 Increase/(Decrease) 2016 vs 2015 Increase/(Decrease) Property operating expenses Less: Operating expense reimbursements Property operating expenses, net of operating expense reimbursements $ $ 128,717 $ 144,428 $ 130,855 $ 98,138 105,455 98,628 (15,711) $ (7,317) 30,579 $ 38,973 $ 32,227 $ (8,394) $ 13,573 6,827 6,746 2017 vs 2016 – 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 decrease in net property operating expenses of $8.4 million during the year ended December 31, 2017 as compared to the same period in 2016 was primarily due to the disposition of vacant properties and certain properties subject to double-net or modified gross leases. 2016 vs 2015 – 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 Ovation Brands, Inc., which filed for Chapter 11 bankruptcy on March 7, 2016. General and Administrative Expenses 2017 vs 2016 – The increase of $6.7 million during the year ended December 31, 2017 as compared to the same period in 2016 was primarily due to an increase of $6.8 million of compensation and benefits, including equity based compensation. 2016 vs 2015 – The decrease of $15.2 million during the year ended December 31, 2016 was primarily due to a decrease of $8.2 million in consulting and other professional fees in 2016. Additionally, during the year ended December 31, 2016, accounting fees decreased $2.1 million, primarily due to the work performed during the first quarter of 2015 in connection with the restatements, and legal fees decreased $2.7 million, primarily due to costs incurred in 2015 related to strategic, tax and regulatory matters. Depreciation and Amortization Expenses 2017 vs 2016 – The decrease of $55.2 million during the year ended December 31, 2017 as compared to the same period in 2016 was primarily due to the disposition of 438 consolidated properties subsequent to January 1, 2016. The Company also recorded $50.5 million and $182.8 million of impairment charges on real estate investments during the years ended December 31, 2017 and 2016, respectively, which reduced the carrying value being depreciated and amortized. 2016 vs 2015 – The decrease of $59.7 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. 41 Impairments 2017 vs 2016 – The decrease in impairments of $132.3 million during the year ended December 31, 2017 as compared to the same period in 2016 was primarily due to a decrease in the number of properties impaired from 153 during the year ended December 31, 2016 to 69 properties during the year ended December 31, 2017. In addition, the decrease was also due to management identifying certain properties for potential sale as part of its portfolio management strategy to reduce exposure to office properties during the year ended December 31, 2016 as well as the Ovation Bankruptcy during 2016. 2016 vs 2015 – The increase in impairments of $91.1 million during the year ended December 31, 2016 was 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. Other (Expense) Income, Income Tax (Provision) Benefit and Loss from Discontinued Operations The table below sets forth, for the periods presented, certain financial information and the dollar amount change year over year (dollar amounts in thousands): Interest expense $ (289,766) $ (317,376) $ (358,392) $ (27,610) $ (41,016) 2017 2016 2015 2017 vs 2016 Increase/(Decrease) 2016 vs 2015 Increase/(Decrease) Year Ended December 31, Gain (loss) on extinguishment and forgiveness of debt, net Other income, net Reserve for loan loss Equity in income and gain on disposition of unconsolidated entities Gain (loss) on derivative instruments, net Gain (loss) on disposition of real estate and real estate assets held for sale, net Provision for income taxes Loss from discontinued operations, net of income taxes Interest Expense 18,373 6,242 — 2,763 2,976 61,536 (6,882) (771) 5,251 — 9,783 (1,191) 45,524 (7,136) 4,812 9,366 (15,300) 9,092 (1,460) (72,311) (4,589) 19,144 991 — (7,020) 4,167 16,012 (254) (19,117) (123,937) (184,500) 104,820 (5,583) (4,115) 15,300 691 269 117,835 2,547 60,563 2017 vs 2016 – The decrease of $27.6 million during the year ended December 31, 2017 as compared to 2016 was primarily due to the repayment of the Credit Facility Term Loan of $500.0 million and a $579.9 million reduction of secured debt, partially offset by the issuance of $600.0 million of unsecured notes and net borrowings on the revolving credit facility of $185.0 million. 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. Gain (Loss) on Extinguishment and Forgiveness of Debt, Net 2017 vs 2016 – The increase of $19.1 million during the year ended December 31, 2017 as compared to the same period in 2016 was primarily a result of three mortgage loans settled by foreclosure or deed-in-lieu of foreclosure for which the Company recognized a gain on forgiveness of debt of $20.5 million, with no comparable gains resulting from foreclosure or deed-in-lieu of foreclosure during the same period in 2016. 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 10 – 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 mortgage loan settled by foreclosure. During the year ended December 31, 2015, the Company recorded a gain on forgiveness of debt of $4.8 million related to the foreclosure of one property. 42 Other Income, Net 2017 vs 2016 – The increase of $1.0 million during the year ended December 31, 2017 as compared to the same period in 2016 was primarily due to post-closing adjustments, of $1.6 million, recorded in accordance with the purchase and sale agreement during the year ended December 31, 2016 related to a multi-tenant asset portfolio sale completed in 2014, offset by a decrease in interest income related to the Company’s investment securities and mortgage notes receivable of $0.6 million. 2016 vs 2015 – The decrease of $4.1 million during the year ended December 31, 2016 as compared to the same period in 2015 was primarily a result of a decrease in disposition fees earned from 1031 real estate programs of $3.8 million. 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. 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 and Gain on Disposition of Unconsolidated Entities 2017 vs 2016 – The decrease of $7.0 million during the year ended December 31, 2017 as compared to the same period in 2016 was primarily the result of a gain of $10.2 million recognized on the disposition of one unconsolidated joint venture owning one property in 2016, with no comparable gain in 2017. 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 recorded 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 recorded 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 $0.1 million during the year ended December 31, 2015. Gain (Loss) on Derivative Instruments, Net 2017 vs 2016 – The $4.2 million increase during the year ended December 31, 2017 as compared to the same period in 2016, was primarily a result of the termination of six interest rate swaps in connection with the early repayment of the outstanding borrowings under our Credit Facility Term Loan, as discussed in Note 11 – Derivatives and Hedging Activities to our consolidated financial statements, which resulted in a gain of $1.1 million as compared to a loss of $3.3 million in 2016. 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, which resulted in a loss of $3.3 million, offset by an increase in the fair value of the Company’s interest rate swaps. Gain (Loss) on Disposition of Real Estate and Real Estate Assets Held For Sale, Net 2017 vs 2016 – The increase in gain on disposition of real estate and held for sale assets, net of $16.0 million during the year ended December 31, 2017 as compared to the same period in 2016, was due to the Company’s disposition of 131 properties, excluding six properties transferred to the lender in either a deed-in-lieu of foreclosure or foreclosure sale transaction, for an aggregate sales price of $594.9 million which resulted in a gain of $64.7 million during the year ended December 31, 2017, as compared to the disposal of 301 properties for an aggregate sales price of $1.1 billion during the same period in 2016 for a gain of $50.6 million, which included $28.8 million of goodwill allocation related to the sales. During the year ended December 31, 2017, the Company also recognized a loss of $3.1 million related to assets classified as held for sale, as compared to a loss of $5.1 million during the same period in 2016. 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 was 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. 43 Provision for Income Taxes 2017 vs 2016 – The consolidated provision for income taxes of $6.9 million for the year ended December 31, 2017 as compared to a provision of $7.1 million for the same period in 2016 reflects an overall decrease in expense attributable to higher state taxes in 2016 and tax on net income from properties held in and sold by a TRS in 2016, which were partially offset by tax on the gain on the sale of certain Canadian properties in 2017. 2016 vs 2015 – The increase of $2.5 million is primarily due to the 2014 accrued state tax expense exceeding actual expenses incurred, resulting in a decrease to the provision for income taxes during the year ended December 31, 2015. Loss from Discontinued Operations 2017 vs 2016 – During the fourth quarter of 2017, the Company entered into a purchase and sale agreement to sell substantially all of the Cole Capital segment. The decrease in loss from discontinued operations of $104.8 million during the year ended December 31, 2017 was primarily due to decreases in impairment of goodwill of $120.9 million, in general and administrative expenses of $18.8 million and in amortization of intangible assets of $11.7 million, partially offset by the loss recognized on classification as held for sale of $20.0 million and an increase in the provision for income taxes of $24.7 million. Revenues, net of reallowed fees and commissions increased $1.8 million for the year ended December 31, 2017, as compared to the year ended December 31, 2016. 2016 vs 2015 – The decrease in loss from discontinued operations of $60.6 million during the year ended December 31, 2016 was primarily due to a decrease in impairment of intangible assets and goodwill of $92.4 million, offset by a decrease in the benefit from income taxes. 44 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 depreciable 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, merger and other non-routine costs, net of insurance recoveries, held for sale loss on discontinued operations, 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 and intangible assets, straight-line rent, net of bad debt expense related to straight-line rent, net direct financing lease adjustments, 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 and amortization of intangible assets, deferred financing costs, premiums and discounts on debt and investments, above-market lease assets and below-market lease liabilities. Effective January 1, 2017, we determined to omit the impact of the Excluded Properties and related non-recourse mortgage notes from FFO to calculate AFFO. We did not adjust AFFO during the years prior to January 1, 2017 as the impact was immaterial. 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. 45 The table below presents FFO and AFFO for the years ended December 31, 2017, 2016 and 2015 (in thousands, except share and per share data) and includes both continuing operations, which primarily represent the Company's real estate operations, and discontinued operations, which represent substantially all of Cole Capital. Net income (loss) Dividends on non-convertible preferred stock (Gain) loss on disposition of real estate assets and interests in unconsolidated joint ventures, 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 goodwill and intangible assets Held for sale loss on discontinued operations Reserve for loan loss Legal settlements Gain on early repayment of mortgage notes receivable and sale of investment securities (Gain) 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 and other tax expense (benefit) (1) (Gain) loss 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 Adjustments for Excluded Properties Year Ended December 31, 2017 $ $ 32,378 (71,892) 2016 (200,824) $ (71,892) 2015 (323,492) (71,892) (61,536) 703,133 50,548 477 653,108 3,402 51,762 — 20,027 — — (65) (2,976) (4,616) 5,366 2,093 24,536 14,514 8,671 (18,373) (44,903) 16,751 2,566 378 6,528 (55,722) 756,315 182,820 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 — 65,582 817,469 91,755 5,744 585,166 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 — AFFO attributable to common stockholders and limited partners $ 738,769 $ 741,457 $ 782,058 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) 974,098,652 931,422,844 903,360,763 24,059,312 24,626,646 26,013,303 998,157,964 956,049,490 929,374,066 AFFO attributable to common stockholders and limited partners per diluted share $ 0.74 $ 0.78 $ 0.84 ____________________________________ (1) This adjustment represents the non-current portion of the provision for or 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. For the three months ended December 31, 2017, this adjustment is net of a current tax benefit due to the acceleration of a bonus compensation-related deduction to take advantage of the Company’s higher effective tax rate in 2017. As the Company already recognized the prior year bonus compensation-related tax deduction during the three months ended March 31, 2017, the acceleration of the 2018 benefit was not included in the computation of 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. 46 Liquidity and Capital Resources General Our principal liquidity needs for the next twelve months and beyond are to: • fund normal operating expenses; • fund capital expenditures, tenant improvements and leasing costs • meet debt service and principal repayment obligations, including balloon payments on maturing debt; • pay dividends; • pay litigation costs and expenses; and • fund property and/or common stock 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. 2017 Bond Offering On August 11, 2017, the Company closed a senior note offering, consisting of $600.0 million aggregate principal amount of the Operating Partnership’s 3.950% Senior Notes due 2027. As discussed in Note 10 – Debt, the Company subsequently used a portion of the proceeds from the 2017 Bond Offering to repay borrowings, including swap termination costs and accrued unpaid interest under its $500.0 million Credit Facility Term Loan on August 11, 2017. The Company used the remaining proceeds to pay down secured debt. 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, 2017, no shares of common stock have been issued pursuant to the Program. Share Repurchase Program On May 12, 2017, the Company’s board of directors authorized the repurchase of up to $200.0 million of the Company’s outstanding Common Stock over the subsequent 12 months, as market conditions warrant. During the twelve months ended December 31, 2017, the Company repurchased 68,759 shares of common stock in multiple open transactions for $0.5 million. 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, 2017, we disposed of 137 properties and six properties transferred to the lender in either a deed-in-lieu foreclosure or foreclosure sale transaction for an aggregate sales price of $594.9 million, of which our share was $574.4 million, resulting in consolidated proceeds of $445.5 million after mortgage loan assumption and closing costs. We expect to continue to explore opportunities to sell additional properties to provide us further financial flexibility and fund property acquisitions. 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. 47 As of December 31, 2017, the Credit Facility had an outstanding balance of $185.0 million and allowed for maximum borrowings of $2.3 billion under its revolving credit facility, subject to borrowing availability. 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. The Operating Partnership used a portion of the proceeds from the 2017 Bond Offering to repay all of the outstanding borrowings, including swap termination costs and accrued and unpaid interest, under its $500.0 million Credit Facility Term Loan on August 11, 2017. 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. 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 Credit Facility terminates on June 30, 2018, unless extended in accordance with the terms of the Credit Agreement. The Credit Agreement provides for a one-year extension option, 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 For the purposes of determining unencumbered asset value, the Company is permitted to include restaurant properties representing up to 30% of its unencumbered asset value in such calculation. 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, 2017. 48 Corporate Bonds Summary and Obligations As of December 31, 2017, the OP had $2.85 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, 2017. The covenants of our new Senior Notes issued in 2017 are materially the same as our then existing Senior Notes. As of December 31, 2017, 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 As of December 31, 2017, the Company had $1.0 billion aggregate principal amount of Convertible Notes (as defined in Note 10 – Debt). The OP has issued corresponding identical convertible notes to the General Partner. 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, 2017. Mortgage Notes Payable and Other Debt Summary and Obligations As of December 31, 2017, we had non-recourse mortgage indebtedness of $2.1 billion, which was collateralized by 472 properties, reflecting a decrease from December 31, 2016 of $558.9 million derived primarily from our disposition activity during the year ended December 31, 2017. Our mortgage indebtedness bore interest at the weighted-average rate of 4.92% per annum and had a weighted-average maturity of 4.1 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. 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. Some of our loan agreements require that we comply with specific reporting and financial covenants mainly related to debt coverage ratios and loan-to-value ratios. Each loan that has these requirements has specific ratio thresholds that must be met. Restrictions on Loan Covenants 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. 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, 2017, the Company believes that it was in compliance with the financial covenants under the mortgage loan agreements, except for the $16.2 million loan in default as described above and in “Note 10 – Debt” to our consolidated financial statements. Other Debt During the fourth quarter of 2017, the Company repaid the remaining outstanding principal balance on the secured term loan from KBC Bank, N.V. (the “KBC Loan”). Dividends On November 7, 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 fourth quarter of 2017 to stockholders of record as of December 29, 2017, which was paid on January 16, 2018. An equivalent distribution by the Operating Partnership is applicable per OP unit. 49 Our Series F Preferred Stock, as discussed in “Note 15 – 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, 2017, 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, 2017 (in thousands): Principal payments - mortgage notes (1) Interest payments - mortgage notes (1) (2) (3) Principal payments - Credit Facility Interest payments - Credit Facility (3) Principal payments - corporate bonds Interest payments - corporate bonds Principal payments - convertible debt Interest payments - convertible debt Operating and ground lease commitments Total ____________________________________ Total Less than 1 year 1-3 years 4-5 years More than 5 years $ 2,071,038 $ 98,450 $ 487,975 $ 667,609 $ 817,004 421,575 185,000 2,854 2,850,000 695,599 1,000,000 55,067 308,434 100,177 185,000 2,854 — 114,950 597,500 25,550 18,917 176,655 108,534 36,209 — — 750,000 187,088 402,500 29,517 37,565 — — — — 400,000 158,775 1,700,000 234,786 — — — — 36,443 215,509 $ 7,589,567 $ 1,143,398 $2,071,300 $1,371,361 $ 3,003,508 (1) For the loan in maturity default, as discussed in Note 10 – Debt , the payment obligations for future periods are based on an estimated extension of maturity to January 1, 2018. (2) As of December 31, 2017, we had $78.9 million of variable rate mortgage notes 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 $14.9 million of variable rate debt and the Credit Facility payment obligations were calculated using a forward LIBOR curve. Cash Flow Analysis for the year ended December 31, 2017 Operating Activities – During the year ended December 31, 2017, net cash provided by operating activities decreased $4.7 million to $793.3 million from $797.9 million during the same period in 2016. The decrease was primarily due to a decrease in rental receipts related to the disposition of 438 consolidated properties subsequent to January 1, 2016 and an increase in litigation and other non-routine costs paid during the year ended December 31, 2017. This decrease was mostly offset by a decrease in interest payments and insurance recoveries received as compared to the same period in 2016, the receipt of an income tax refund during the year ended December 31, 2017, and an increase in rental receipts related to the acquisition of 96 consolidated properties subsequent to January 1, 2016. Investing Activities – Net cash used in investing activities for the year ended December 31, 2017 changed $1.2 billion to $274.1 million from cash provided by investing activities of $881.6 million during the same period in 2016. The change was primarily related to an increase in investments in real estate assets of $598.8 million, a decrease in cash proceeds from dispositions of real estate and joint ventures of $555.2 million. Financing Activities – Net cash used in financing activities of $756.6 million decreased $750.4 million during the year ended December 31, 2017 from $1.5 billion during the same period in 2016. The decrease was primarily due to a decrease in repayments of debt, net of proceeds, of $1.5 billion, which was partially offset by the 2016 common stock offering resulting in net proceeds, after underwriting discounts and offering costs, of $702.8 million and an increase in distributions paid of $28.1 million. 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 $61.7 million to $797.9 million from $859.7 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. 50 Investing Activities – Net cash provided by investing activities for the year ended December 31, 2016 decreased $59.8 million to $881.6 million from $941.4 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 $644.6 million during the year ended December 31, 2016 from $2.2 billion during the same period in 2015. The decrease was primarily due to the 2016 common stock 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 $306.3 million, which were partially offset by an increase in distributions paid of $345.0 million 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, 2017. 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 conducted substantially all of its Cole Capital 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 Through the closing of the Cole Capital sale, we were 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 distributed the shares of common stock for certain of the Cole REITs and advised them regarding offerings, managed relationships with participating broker-dealers and financial advisors, and provided assistance in connection with compliance matters relating to the offerings. We received 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 17 – 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. 51 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, 2017, 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 $6.1 billion and $5.9 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, 2017 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 $224.9 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 $279.1 million. As of December 31, 2017, our debt included variable-rate debt with a fair value and carrying value each of $200.1 million and $199.9 million. The sensitivity analysis related to our variable-rate debt assumes an immediate 100 basis point move in interest rates from their December 31, 2017 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 $2.0 million annually. See “Note 10 – Debt” to our consolidated financial statements. As of December 31, 2017, our interest rate swaps had a fair value that resulted in assets of $0.6 million. See “Note 11 – 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, 2017, 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. 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. 52 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, 2017 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, 2017. The effectiveness of our internal control over financial reporting as of December 31, 2017 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, 2017 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. 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 53 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, 2017 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, 2017. 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, 2017 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. 54 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the shareholders and the Board of Directors of VEREIT, Inc. Opinion on Internal Control over Financial Reporting We have audited the internal control over financial reporting of VEREIT, Inc. and subsidiaries (the “Company”) as of December 31, 2017, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal controls over financial reporting as of December 31, 2017, based on criteria established in Internal Control - Integrated Framework (2013) issued by COSO. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements and financial statement schedules as of and for the year ended December 31, 2017, of the Company and our report dated February 21, 2018, expressed an unqualified opinion on those financial statements. Basis for Opinion The Company’s management is responsible for maintaining effective internal controls over financial reporting and for its assessment of the effectiveness of 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 are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. 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 exist, 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. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes 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 its inherent limitations, internal controls over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ DELOITTE & TOUCHE, LLP Phoenix, Arizona February 21, 2018 55 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.” Amendment to Employment Agreement with Glenn J. Rufrano Effective February 21, 2018, the Company amended (the “Rufrano Amendment”) the Employment Agreement dated as of March 10, 2015 with Glenn J. Rufrano (the “Rufrano Employment Agreement”), to extend Mr. Rufrano’s term as Chief Executive Officer to April 1, 2021. Pursuant to the Rufrano Amendment, future annual long term incentive awards will not have a minimum guaranteed amount and the vesting of any unvested awards upon termination will be governed by the terms in the applicable award agreement. The foregoing description of the Rufrano 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. 56 Item 10. Directors, Executive Officers and Corporate Governance. PART III This information will be contained in our definitive proxy statement for the 2018 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. 57 Item 15. Exhibits and Financial Statement Schedules. Financial Statements PART IV The Financial Statements are included herein at pages F-1 through F-68. Financial Statement Schedules Schedule II - Valuation and Qualifying Accounts is included herein on page F-69. Schedule III - Real Estate and Accumulated Depreciation is included herein on pages F-70 through F-204. Schedule IV - Mortgage Loans Held for Investment is included herein on page F-205. Exhibits The following exhibits are included in this Annual Report on Form 10-K for the fiscal year ended December 31, 2017 (and are numbered in accordance with Item 601 of Regulation S-K): Exhibit No. Description 2.1 2.2 2.3 2.4 2.4.1 2.4.2 2.5 3.1 3.2 3.3 3.4 3.5 3.6 3.7 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). 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). 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). 58 Exhibit No. Description 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 4.13 4.14 4.15 4.16 10.1 10.2 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). First Supplemental Indenture, dated as of February 9, 2015, by and among ARC Properties Operating Partnership, L.P., American Realty Capital Properties, Inc. and U.S. Bank National Association (Incorporated by reference to the Company’s Current Report on Form 8-K (File No. 001-35263), filed with the SEC on February 13, 2015). 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). Form of 4.125% Senior Notes due 2021 (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). Form of 4.875% Senior Notes due 2026 (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). Officers’ Certificate, dated as of August 11, 2017 (Incorporated by reference to the Company’s Current Report on Form 8-K (File No. 001-35263), filed with the SEC on August 11, 2017). Form of 3.950% Convertible Senior Notes due 2027 (Incorporated by reference to the Company’s Current Report on Form 8- K (File No. 001-35263), filed with the SEC on August 11, 2017). 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). 59 Exhibit No. Description 10.3 10.4 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 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 withe the SEC on June 13, 2011). 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). 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 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 (File No. 001-35263), 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). 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 (File No. 001-35263), 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 (File No. 001-35263), 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 (File No. 001-35263), for the year ended December 31, 2015 filed with the SEC on February 23, 2016). 60 Exhibit No. 10.24 10.25 10.26 10.27 10.28 10.29 10.30 10.31 10.32 10.33 Description 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 (File No. 001-35263), 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 (File No. 001-35263), 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 (File No. 001-35263), 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 (File No. 001-35263), for the year ended December 31, 2015 filed with the SEC on February 23, 2016). 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. (Incorporated by reference to the Company’s Annual Report on Form 10-K (File No. 001-35263), for the year ended December 31, 2016 filed with the SEC on February 23, 2017). 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). Form of 2017 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 March 31, 2017 filed with the SEC on May 4, 2017). Form of 2017 Deferred Stock Unit Award Agreement to be entered into with non-executive directors pursuant to the VEREIT, Inc. Equity Plan and the Independent Directors’ Deferred Compensation Program (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q (File No. 001-35263), for the quarter ended March 31, 2017 filed with the SEC on May 4, 2017). Purchase and Sale Agreement, dated as of November 13, 2017, by and between VEREIT Operating Partnership, L.P. and CCA Acquisition, LLC (Incorporated by reference to the Company’s Current Report on Form 8-K (File No. 001-35263), filed with the SEC on November 13, 2017). First Amendment to the Purchase and Sale Agreement, dated as of February 1, 2018, by and between VEREIT Operating Partnership, L.P. and CCA Acquisition, LLC (Incorporated by reference to the Company’s Current Report on Form 8-K (File No. 001-35263), filed with the SEC on February 7, 2018). 10.34* Amendment effective February 21, 2018, to the Employment Agreement, dated as of March 10, 2015, by and between VEREIT, Inc. and Glenn Rufrano. 10.35* Separation Letter, dated as of January 31, 2018, by and between William C. Miller and VEREIT, Inc. 10.36* 10.37* 10.38* 10.39* 10.40* 10.41* 12.1* 21.1* 23.1* 23.2* 31.1* 31.2* 31.3* Amendment, effective February 21, 2018, to the Employment Agreement, dated as of May 21, 2015, by and between VEREIT, Inc. and Lauren Goldberg. Amendment, effective February 21, 2018, to the Employment Agreement, dated as of October 5, 2015, by and between VEREIT, Inc. and Michael J. Bartolotta. Amendment, effective February 21, 2018, to the Employment Agreement, dated as of February 23, 2016, by and between VEREIT, Inc. and Paul McDowell. Amendment, effective February 21, 2018, to the Employment Agreement, dated as of February 23, 2016, by and between VEREIT, Inc. and Thomas Roberts. Form of Non-Qualified Stock Option Agreement to be entered into with executive officers pursuant to the VEREIT, Inc. Equity Plan. Form of Non-Qualified Stock Option Agreement to be entered into with other employees pursuant to the VEREIT, Inc. Equity Plan. VEREIT Inc. and 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. 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. 61 Exhibit No. 31.4* 32.1** 32.2** 32.3** 32.4** Description 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. XBRL Instance Document. 101.INS* 101.SCH* XBRL Taxonomy Extension Schema Document. 101.CAL* XBRL Taxonomy Extension Calculation Linkbase Document. 101.DEF* XBRL Taxonomy Extension Definition Linkbase Document. 101.LAB* XBRL Taxonomy Extension Label Linkbase Document. 101.PRE* 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. 62 Item 16. Form 10-K Summary. Not Applicable 63 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 21, 2018 64 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 21, 2018 /s/ Michael J. Bartolotta Executive Vice President and Chief Financial Officer February 21, 2018 Michael J. Bartolotta (Principal Financial Officer) /s/ Gavin B. Brandon Senior Vice President and Chief Accounting Officer February 21, 2018 Gavin B. Brandon (Principal Accounting Officer) Director, Non-Executive Chairman February 21, 2018 /s/ Hugh R. Frater Hugh R. Frater /s/ David B. Henry David B. Henry Director /s/ Mary Hogan Preusse Director Mary Hogan Preusse /s/ Richard Lieb Richard Lieb /s/ Mark S. Ordan Mark S. Ordan Director Director /s/ Eugene A. Pinover Director Eugene A. Pinover /s/ Julie G. Richardson Director Julie G. Richardson _________________________________ February 21, 2018 February 21, 2018 February 21, 2018 February 21, 2018 February 21, 2018 February 21, 2018 * 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. 65 [THIS PAGE INTENTIONALLY LEFT BLANK] INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Financial Statements Reports of Independent Registered Public Accounting Firms Consolidated Balance Sheets of VEREIT, Inc. as of December 31, 2017 and December 31, 2016 Consolidated Statements of Operations of VEREIT, Inc. for the Years Ended December 31, 2017, 2016 and 2015 Consolidated Statements of Comprehensive Income (Loss) of VEREIT, Inc. for the Years Ended December 31, 2017, 2016 and 2015 Consolidated Statements of Changes in Equity of VEREIT, Inc. for the Years Ended December 31, 2017, 2016 and 2015 Consolidated Statements of Cash Flows of VEREIT, Inc. for the Years Ended December 31, 2017, 2016 and 2015 Consolidated Balance Sheets of VEREIT Operating Partnership, L.P. as of December 31, 2017 and December 31, 2016 Consolidated Statements of Operations of VEREIT Operating Partnership, L.P. for the Years Ended December 31, 2017, 2016 and 2015 Consolidated Statements of Comprehensive Income (Loss) of VEREIT Operating Partnership, L.P. for the Years Ended December 31, 2017, 2016 and 2015 Consolidated Statements of Changes in Equity of VEREIT Operating Partnership, L.P. for the Years Ended December 31, 2017, 2016 and 2015 Consolidated Statements of Cash Flows of VEREIT Operating Partnership, L.P. for the Years Ended December 31, 2017, 2016 and 2015 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-4 F-5 F-6 F-7 F-9 F-11 F-12 F-13 F-14 F-15 F-17 F-69 F-70 F-205 F-1 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the shareholders and the Board of Directors of VEREIT, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of VEREIT, Inc. and subsidiaries (the “Company”) as of December 31, 2017 and 2016, the related consolidated statements of operations, comprehensive income (loss), changes in equity and cash flows for each of the three years in the period ended December 31, 2017, and the related notes and the schedules listed in the Index at Item 15 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2017 and 2016, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2017, in conformity with accounting principles generally accepted in the United States of America. We have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 21, 2018, expressed an unqualified opinion on the Company’s internal control over financial reporting. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards required that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risk of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ DELOITTE & TOUCHE LLP Phoenix, Arizona February 21, 2018 We have served as the Company’s auditor since 2015. F-2 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the partners of VEREIT Operating Partnership, L.P. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of VEREIT Operating Partnership, L.P and subsidiaries (the "Operating Partnership") as of December 31, 2017 and 2016, the related consolidated statements of operations, comprehensive income (loss), changes in equity, and cash flows, for each of the three years in the period ended December 31, 2017, and the related notes and the schedules listed in the Index at Item 15 (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Operating Partnership as of December 31, 2017 and 2016, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2017, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These financial statements are the responsibility of the Operating Partnership's management. Our responsibility is to express an opinion on the Operating Partnership's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Operating Partnership in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Operating Partnership is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting 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. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ DELOITTE & TOUCHE, LLP Phoenix, Arizona February 21, 2018 We have served as the Operating Partnership’s auditor since 2015. F-3 VEREIT, INC. CONSOLIDATED BALANCE SHEETS (In thousands, except for share and per share data) 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 Rent and tenant receivables and other assets, net Goodwill Due from affiliates, net Assets related to discontinued operations and 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 and other liabilities Distributions payable Due to affiliates Liabilities related to discontinued operations Total liabilities Commitments and contingencies (Note 14) Preferred stock, $0.01 par value, 100,000,000 shares authorized and 42,834,138 issued and outstanding as of each of December 31, 2017 and December 31, 2016 Common stock, $0.01 par value, 1,500,000,000 shares authorized and 974,208,583 and 974,146,650 issued and outstanding as of December 31, 2017 and December 31, 2016, respectively Additional paid-in-capital Accumulated other comprehensive loss Accumulated deficit Total stockholders’ equity Non-controlling interests Total equity Total liabilities and equity December 31, 2017 December 31, 2016 $ $ $ $ $ $ $ 2,865,855 10,711,845 2,037,675 15,615,375 2,908,028 12,707,347 42,784 19,539 40,974 20,294 34,176 27,662 304,989 1,337,773 6,041 163,999 14,705,578 2,082,692 2,821,494 984,258 185,000 198,551 136,474 62,985 175,301 66 15,881 6,662,702 2,895,625 10,644,296 2,044,521 15,584,442 2,331,643 13,252,799 46,077 39,455 47,215 22,764 253,479 45,018 314,305 1,337,391 15,904 213,167 15,587,574 2,671,106 2,226,224 973,340 496,578 224,023 134,861 67,971 162,578 16 11,344 6,968,041 428 428 9,742 12,654,258 (3,569) (4,776,581) 7,884,278 158,598 8,042,876 14,705,578 $ 9,741 12,640,171 (2,556) (4,200,423) 8,447,361 172,172 8,619,533 15,587,574 The accompanying notes are an integral part of these statements. F-4 VEREIT, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except for per share data) Revenues: Rental income Operating expense reimbursements Total revenues Operating expenses: Acquisition-related Litigation, merger and other non-routine costs, net of insurance recoveries Property operating General and administrative Depreciation and amortization Impairments Total operating expenses Operating income Other (expense) income: Interest expense Gain (loss) on extinguishment and forgiveness of debt, net Other income, net Reserve for loan loss Equity in income and gain on disposition of unconsolidated entities Gain (loss) on derivative instruments, net Total other expenses, net Income (loss) before taxes and real estate dispositions Gain (loss) on disposition of real estate and real estate assets held for sale, net Income (loss) before taxes Provision for income taxes Income (loss) from continuing operations Loss from discontinued operations, net of income taxes Net income (loss) Net (income) loss attributable to non-controlling interests (1) Net income (loss) attributable to the General Partner Basic and diluted net loss per share from continuing operations attributable to common stockholders Basic and diluted loss per share from discontinued operations attributable to common stockholders Basic and diluted net loss per share attributable to common stockholders Distributions declared per common share _______________________________________________ (1) Represents (income) loss attributable to limited partners and consolidated joint venture partners. Year Ended December 31, 2017 2016 2015 $ 1,154,147 98,138 1,252,285 $ 1,229,992 105,455 1,335,447 $ 1,342,507 98,628 1,441,135 3,402 47,960 128,717 58,603 706,802 50,548 996,032 256,253 (289,766) 18,373 6,242 — 2,763 2,976 (259,412) (3,159) 61,536 58,377 (6,882) 51,495 (19,117) 32,378 (560) 31,818 $ 1,321 3,884 144,428 51,927 762,038 182,820 1,146,418 189,029 (317,376) (771) 5,251 — 9,783 (1,191) (304,304) (115,275) 45,524 (69,751) (7,136) (76,887) (123,937) (200,824) 4,961 (195,863) $ 6,243 33,628 130,855 67,137 821,727 91,755 1,151,345 289,790 (358,392) 4,812 9,366 (15,300) 9,092 (1,460) (351,882) (62,092) (72,311) (134,403) (4,589) (138,992) (184,500) (323,492) 7,139 (316,353) (0.02) $ (0.16) $ (0.23) (0.02) $ (0.04) $ $ 0.55 (0.13) $ (0.29) $ $ 0.55 (0.20) (0.43) 0.28 $ $ $ $ $ The accompanying notes are an integral part of these statements. F-5 VEREIT, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (In thousands) Year Ended December 31, 2017 2016 2015 $ 32,378 $ (200,824) $ (323,492) (18) (70) (951) — (1,039) 31,339 (534) 30,805 (7,685) (15,694) 9,397 (2,271) — (559) 11,706 (997) 110 (4,875) (201,383) 4,989 (196,394) $ (328,367) 7,261 (321,106) $ Net income (loss) Other comprehensive income (loss): Unrealized loss on interest rate derivatives Reclassification of previous unrealized (gain) loss on interest rate derivatives into net income (loss) Unrealized loss on investment securities, net Reclassification of previous unrealized loss on investment securities into net income (loss) as other income, net Total other comprehensive loss Total comprehensive income (loss) Comprehensive (income) loss attributable to non-controlling interests (1) Total comprehensive income (loss) attributable to the General Partner $ _______________________________________________ (1) Represents comprehensive (income) loss attributable to limited partners and consolidated joint venture partners. The accompanying notes are an integral part of these statements. F-6 . 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 ( 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 r e h t O e v i s n e h e r p m o C n I - d i a P l a t i p a C d e t a l u m u c c A l a n o i t i d d A 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 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 5 1 0 2 , 1 y r a u n a J , e c n a l a B ) 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 — 6 7 4 , 2 0 7 ) 2 5 6 , 4 ( 8 2 7 , 0 1 5 7 6 ) 3 0 7 , 6 1 5 ( ) 3 8 1 , 3 1 ( ) 2 9 4 ( ) 2 9 8 , 1 7 ( — — ) 9 5 1 ( — — 5 7 6 — — ) 4 4 1 ( — ) 3 8 1 , 3 1 ( 9 5 1 6 7 4 , 2 0 7 — ) 2 5 6 , 4 ( 8 2 7 , 0 1 — — — — — ) 3 0 7 , 6 1 5 ( ) 3 0 7 , 6 1 5 ( — ) 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 ( — — — — — — — — — — — ) 9 5 5 ( ) 8 2 ( ) 1 3 5 ( — ) 1 3 5 ( 9 5 1 6 8 7 , 1 0 7 ) 7 4 6 , 4 ( 1 2 7 , 0 1 — — — — — 4 8 3 — — 0 9 6 — ) 5 ( 7 — — — — — — — — — — — — — — — — 0 5 4 , 5 1 0 0 0 , 0 0 0 , 9 6 ) 1 6 2 , 1 8 4 ( 7 6 0 , 8 2 7 — — — — — — — — — — — — — — — — — — — — — — — — 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 ) 8 1 5 ( ) 8 4 1 , 2 ( 4 5 7 , 6 1 1 0 1 ) 7 3 7 , 5 3 5 ( ) 7 2 2 , 3 1 ( — — — 1 0 1 — ) 8 1 5 ( ) 8 4 1 , 2 ( 4 5 7 , 6 1 — — — — — ) 7 3 7 , 5 3 5 ( ) 7 3 7 , 5 3 5 ( ) 7 2 2 , 3 1 ( — — — — — — — — ) 7 1 5 ( ) 6 4 1 , 2 ( 0 5 7 , 6 1 — — — ) 1 ( ) 2 ( 4 — — — 7 - F ) 9 5 7 , 8 6 ( ) 0 5 5 , 8 6 2 ( 2 4 2 , 9 9 3 — — — — — — — — — — — — — — — 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 x a t e l t t e s o t k c o t s 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 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 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 n o i t a g i l b o 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 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 r e d l o h 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 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 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 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 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 e r a h S e h t r e d n u 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 ( m a r g o r P e s a h c r u p e R 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 g i l b o 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 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 r e d l o h 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 . 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 ( 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 r e h t O e v i s n e h e r p m o C n I - d i a P l a t i p a C d e t a l u m u c c A l a n o i t i d d A 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 ) 1 9 4 ( $ — $ ) 1 9 4 ( $ ) 1 9 4 ( $ — $ — $ — $ — — $ — 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 ) 2 9 8 , 1 7 ( ) 8 3 8 ( 8 7 3 , 2 3 ) 9 3 0 , 1 ( ) 4 4 1 ( ) 8 3 8 ( 0 6 5 ) 6 2 ( ) 8 4 7 , 1 7 ( ) 8 4 7 , 1 7 ( — 8 1 8 , 1 3 ) 3 1 0 , 1 ( — — 8 1 8 , 1 3 — — — ) 3 1 0 , 1 ( — — — — — — — — — — — — — — — — — — — — 6 7 8 , 2 4 0 , 8 $ 8 9 5 , 8 5 1 $ 8 7 2 , 4 8 8 , 7 $ ) 1 8 5 , 6 7 7 , 4 ( $ ) 9 6 5 , 3 ( $ 8 5 2 , 4 5 6 , 2 1 $ 2 4 7 , 9 $ 3 8 5 , 8 0 2 , 4 7 9 8 2 4 $ 8 3 1 , 4 3 8 , 2 4 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 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 i n u _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ 7 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 t e N s ’ y n a p m o C e h t f o n o i l l i m 0 . 0 0 2 $ o t p u f o e s a h c r u p e r e h t r o f s w o l l a , 7 1 0 2 , 2 1 y a M n o s r o t c e r i d f o d r a o b e h t y b d e z i r o h t u a s a w h c i h w , ) y t i u q E – 5 1 e t o N n i d e n i f e d s a ( m a r g o r P e s a h c r u p e R e r a h S s ’ y n a p m o C e h T ) 1 ( . s h t n o m 2 1 t x e n e h t r e v o k c o t S n o m m o C f o s e r a h s g n i d n a t s t u o . 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 8 - F VEREIT, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Cash flows from operating activities: Net income (loss) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization (Gain) loss on real estate assets and joint venture, net Held for sale loss on discontinued operations Impairments Equity-based compensation Reserve for loan loss Equity in (income) loss of unconsolidated entities Distributions from unconsolidated entities Gain on early repayment of mortgage notes receivable and sale of investment securities (Gain) loss on derivative instruments, net (Gain) loss on extinguishment and forgiveness of debt, net Changes in assets and liabilities: Investment in direct financing leases Rent and tenant receivables and other assets, net Due from affiliates, net Assets held for sale classified as discontinued operations Accounts payable and accrued expenses Deferred rent, derivative and other liabilities Due to affiliates Liabilities associated with assets held for sale Net cash provided by operating activities Cash flows from investing activities: Investments in real estate assets Capital expenditures and leasing costs Real estate developments Principal repayments received from borrowers Investments in unconsolidated entities Return of investment from unconsolidated entities Proceeds from disposition of real estate and joint venture Investment in leasehold improvements and other assets Deposits for real estate assets Proceeds from sale of investments and other assets Uses and refunds of deposits for real estate assets Proceeds from the settlement of property-related insurance claims Line of credit advances to affiliates Line of credit repayments from affiliates Net cash (used in) provided by investing activities Cash flows from financing activities: Proceeds from mortgage notes payable Payments on mortgage notes payable and other debt, including debt extinguishment and swap termination costs Proceeds from credit facility Payments on credit facility, including swap termination costs Proceeds from corporate bonds Payments on corporate bonds, including extinguishment costs F-9 Year Ended December 31, 2017 2016 2015 $ 32,378 $ (200,824) $ (323,492) 745,499 (61,536) 20,027 50,548 16,751 — (2,726) 3,646 (65) (2,976) (18,373) 2,097 (21,394) 1,163 13,812 10,742 (395) 50 4,019 793,267 (699,004) (21,694) (14,850) 6,796 — 1,972 445,525 (1,191) (37,226) 400 36,111 355 (16,400) 25,100 (274,106) 806,548 (55,722) — 303,751 10,728 — 415 1,433 — 1,191 771 3,976 (52,626) (416) — (3,323) (17,740) (214) — 797,948 (100,194) (16,568) (17,411) 5,417 (25,777) 2,580 1,000,700 (2,259) (17,856) — 13,305 — (10,300) 50,000 881,637 866,549 65,582 — 305,094 14,500 15,300 (2,361) 4,873 (65) 1,460 (4,812) 2,035 (63,195) 25,489 — (999) (45,934) (329) — 859,695 (36,319) (18,569) (57,682) 6,921 — 6,479 1,009,107 (1,911) (16,542) 392 48,702 839 (10,000) 10,000 941,417 4,652 3,112 1,445 (424,385) 329,000 (645,107) 600,000 — (337,022) 1,033,000 (1,993,000) 1,000,000 (1,311,203) (188,892) 60,000 (1,784,000) — — VEREIT, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS – (Continued) (In thousands) Payments of deferred financing costs Proceeds from 2016 Term Loan Repayment of 2016 Term Loan Repurchases of common stock under the Share Repurchase Program Repurchases of common stock to settle tax obligations Proceeds from the issuance of Common Stock, net of underwriters’ discount Payments of equity issuance costs Contributions from non-controlling interest holders Distributions paid Net cash used in financing activities Net change in cash and cash equivalents and restricted cash Cash and cash equivalents and restricted cash, beginning of period Less: cash and cash equivalents of discontinued operations Cash and cash equivalents and restricted cash from continuing operations, beginning of period Cash and cash equivalents, and restricted cash, end of period Less: cash and cash equivalents of discontinued operations Cash and cash equivalents and restricted cash from continuing operations, end of period Reconciliation of Cash and Cash Equivalents and Restricted Cash Cash and cash equivalents at beginning of period Restricted cash at beginning of period Cash and cash equivalents and restricted cash at beginning of period Cash and cash equivalents at end of period Restricted cash at end of period Cash and cash equivalents and restricted cash at end of period Year Ended December 31, 2017 (9,575) — — (518) (2,148) — — 101 (608,615) (756,595) (237,434) 301,470 (2,973) 2016 (19,872) 300,000 (300,000) — (4,652) 702,765 (280) 675 (580,508) (1,506,985) 172,600 2015 (2,436) — — — (2,227) — — — (235,494) (2,151,604) (350,492) 128,870 (4,968) 479,362 (5,850) 298,497 123,902 473,512 64,036 (2,198) 61,838 253,479 45,018 298,497 34,176 27,662 61,838 $ $ $ 301,470 (2,973) 298,497 64,135 59,767 123,902 253,479 45,018 298,497 $ $ $ 128,870 (4,968) 123,902 410,861 62,651 473,512 64,135 59,767 123,902 $ $ $ The accompanying notes are an integral part of these statements. F-10 VEREIT OPERATING PARTNERSHIP, L.P. CONSOLIDATED BALANCE SHEETS (In thousands, except for unit data) 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 Rent and tenant receivables and other assets, net Goodwill Due from affiliates, net Assets related to discontinued operations and 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 and other liabilities Distributions payable Due to affiliates Liabilities related to discontinued operations Total liabilities Commitments and contingencies (Note 14) General Partner's preferred equity, 42,834,138 General Partner Preferred Units issued and outstanding as of each of December 31, 2017 and December 31, 2016 General Partner's common equity, 974,208,583 and 974,146,650 General Partner OP Units issued and outstanding as of December 31, 2017 and December 31, 2016, respectively Limited Partner's preferred equity, 86,874 Limited Partner Preferred Units issued and outstanding as of each of December 31, 2017 and December 31, 2016 Limited Partner's common equity, 23,748,347 Limited Partner OP Units issued and outstanding as of each of December 31, 2017 and December 31, 2016, respectively Total partners’ equity Non-controlling interests Total equity Total liabilities and equity December 31, 2017 December 31, 2016 $ $ $ $ $ $ $ 2,865,855 10,711,845 2,037,675 15,615,375 2,908,028 12,707,347 42,784 19,539 40,974 20,294 34,176 27,662 304,989 1,337,773 6,041 163,999 14,705,578 2,082,692 2,821,494 984,258 185,000 198,551 136,474 62,985 175,301 66 15,881 6,662,702 2,895,625 10,644,296 2,044,521 15,584,442 2,331,643 13,252,799 46,077 39,455 47,215 22,764 253,479 45,018 314,305 1,337,391 15,904 213,167 15,587,574 2,671,106 2,226,224 973,340 496,578 224,023 134,861 67,971 162,578 16 11,344 6,968,041 782,073 853,821 7,102,205 7,593,540 3,027 3,171 154,266 8,041,571 1,305 8,042,876 14,705,578 $ 166,598 8,617,130 2,403 8,619,533 15,587,574 The accompanying notes are an integral part of these statements. F-11 VEREIT OPERATING PARTNERSHIP, L.P. CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except for per unit data) Revenues: Rental income Operating expense reimbursements Total revenues Operating expenses: Acquisition-related Litigation, merger and other non-routine costs, net of insurance recoveries Property operating General and administrative Depreciation and amortization Impairments Total operating expenses Operating income Other (expense) income: Interest expense Gain (loss) on extinguishment and forgiveness of debt, net Other income, net Reserve for loan loss Equity in income and gain on disposition of unconsolidated entities Gain (loss) on derivative instruments, net Total other expenses, net Income (loss) before taxes and real estate dispositions Gain (loss) on disposition of real estate and real estate assets held for sale, net Income (loss) before taxes Provision for income taxes Income (loss) from continuing operations Loss from discontinued operations, net of income taxes Net income (loss) Net loss (income) attributable to non-controlling interests (1) Net income (loss) attributable to the OP Basic and diluted net loss per unit from continuing operations attributable to common unitholders Basic and diluted net loss per unit from discontinued operations attributable to common unitholders Basic and diluted net loss per unit attributable to common unitholders Distributions declared per common unit _______________________________________________ (1) Represents (income) loss attributable to consolidated joint venture partners. $ $ $ $ $ Year Ended December 31, 2017 2016 2015 $ $ 1,154,147 98,138 1,252,285 1,229,992 105,455 1,335,447 $ 1,342,507 98,628 1,441,135 3,402 47,960 128,717 58,603 706,802 50,548 996,032 256,253 (289,766) 18,373 6,242 — 2,763 2,976 (259,412) (3,159) 61,536 58,377 (6,882) 51,495 (19,117) 32,378 194 32,572 $ 1,321 3,884 144,428 51,927 762,038 182,820 1,146,418 189,029 6,243 33,628 130,855 67,137 821,727 91,755 1,151,345 289,790 (317,376) (771) 5,251 — 9,783 (1,191) (304,304) (115,275) 45,524 (69,751) (7,136) (76,887) (123,937) (200,824) 14 (358,392) 4,812 9,366 (15,300) 9,092 (1,460) (351,882) (62,092) (72,311) (134,403) (4,589) (138,992) (184,500) (323,492) (1,274) (200,810) $ (324,766) (0.02) $ (0.16) $ (0.23) (0.02) $ (0.04) $ $ 0.55 (0.13) $ (0.29) $ $ 0.55 (0.20) (0.43) 0.28 The accompanying notes are an integral part of these statements. F-12 VEREIT OPERATING PARTNERSHIP, L.P. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (In thousands) Net income (loss) Other comprehensive income (loss): Unrealized loss on interest rate derivatives Reclassification of previous unrealized (gain) loss on interest rate derivatives into net income (loss) Unrealized loss on investment securities, net Reclassification of previous unrealized loss on investment securities into net income (loss) as other income, net Total other comprehensive loss Total comprehensive income (loss) Comprehensive loss (income) attributable to non-controlling interests (1) Year Ended December 31, 2017 2016 2015 $ 32,378 $ (200,824) $ (323,492) (18) (70) (951) — (1,039) 31,339 194 (7,685) (15,694) 9,397 (2,271) — (559) (201,383) 14 11,706 (997) 110 (4,875) (328,367) (1,274) (329,641) Total comprehensive income (loss) attributable to the OP $ 31,533 $ (201,369) $ _______________________________________________ (1) Represents (income) loss attributable to consolidated joint venture partners. The accompanying notes are an integral part of these statements. F-13 . . 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 l a t o T l a t i p a C - 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 r e b m u N s t i n U l a t i p a C f o r e b m u N s t i n U l a t i p a C f o r e b m u N s t i n U l a t i p a C f o r e b m u N s t i n U 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 ( 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 5 1 0 2 , 1 y r a u n a J , e c n a l a B ) 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 ( 9 5 8 , 4 1 9 5 8 , 4 1 — ) 8 7 4 , 1 7 ( — ) 8 7 4 , 1 7 ( — — ) 5 7 8 , 4 ( — ) 5 7 8 , 4 ( ) 0 7 2 ( ) 2 9 4 , 3 2 3 ( 4 7 2 , 1 ) 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 — ) 2 5 6 , 4 ( 8 2 7 , 0 1 — — — — ) 8 7 3 , 0 3 5 ( ) 5 1 1 ( ) 3 6 2 , 0 3 5 ( ) 8 6 0 , 3 1 ( ) 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 ( — — — — — — — — ) 2 5 6 , 4 ( 8 2 7 , 0 1 — ) 5 9 1 , 7 1 5 ( ) 1 3 5 ( ) 3 6 8 , 5 9 1 ( — — — — — 0 5 4 , 5 1 ) 1 6 2 , 1 8 4 ( 7 6 0 , 8 2 7 ) 9 5 1 ( ) 0 5 4 , 5 1 ( 9 5 1 6 7 4 , 2 0 7 — — 6 7 4 , 2 0 7 0 0 0 , 0 0 0 , 9 6 — — — — — — ) 4 4 1 ( — — — — — — — — — — — — — — — — — — — ) 8 4 7 , 1 7 ( — — — — — — — — — ) 8 1 5 ( ) 8 4 1 , 2 ( 4 5 7 , 6 1 1 0 1 — — — 1 0 1 ) 8 1 5 ( ) 8 4 1 , 2 ( 4 5 7 , 6 1 — — — — — ) 2 9 8 , 1 7 ( ) 8 3 8 ( 8 7 3 , 2 3 ) 9 3 0 , 1 ( — ) 8 3 8 ( ) 4 9 1 ( — ) 2 9 8 , 1 7 ( — 2 7 5 , 2 3 ) 9 3 0 , 1 ( — — 4 5 7 ) 6 2 ( ) 5 5 4 , 9 4 5 ( ) 7 6 1 ( ) 8 8 2 , 9 4 5 ( ) 0 6 0 , 3 1 ( — — — — — — — — — ) 8 1 5 ( ) 8 4 1 , 2 ( 4 5 7 , 6 1 — — — 8 1 8 , 1 3 ) 3 1 0 , 1 ( ) 8 2 2 , 6 3 5 ( — — — — — — ) 9 5 7 , 8 6 ( ) 0 5 5 , 8 6 2 ( 2 4 2 , 9 9 3 — — — — — ) 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 i t a g i l b o 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 g n i l l o r t n o c - 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 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 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 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 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 n o i t a g i l b o 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 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 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 g n i l l o r t n o c - 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 - n o n m o r f s n o i t u b i r t n o C s r e d l o h t s e r e t n 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 n o i t a g i l b o 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 e r a h S e h t r e d n u 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 m a r g o r P e s a h c r u p e R g n i l l o r t n o c - 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 - n o n m o r f s n o i t u b i r t n o C s r e d l o h t s e r e t n i 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 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 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 ( e m o c n i t e 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 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 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 s t i n u n o m m o c f o e c n a u s s I e m o c n i ) s s o l ( t e N 6 7 8 , 2 4 0 , 8 $ 5 0 3 , 1 $ 1 7 5 , 1 4 0 , 8 $ 6 6 2 , 4 5 1 $ 7 4 3 , 8 4 7 , 3 2 5 0 2 , 2 0 1 , 7 $ 3 8 5 , 8 0 2 , 4 7 9 7 2 0 , 3 $ 4 7 8 , 6 8 3 7 0 , 2 8 7 $ 8 3 1 , 4 3 8 , 2 4 7 1 0 2 , 1 3 r e b m e c e D , e c n a l a B . 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 4 1 - F VEREIT OPERATING PARTNERSHIP, L.P. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Cash flows from operating activities: Net income (loss) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization (Gain) loss on real estate assets and joint venture, net Held for sale loss on discontinued operations Impairments Reserve for loan loss Equity-based compensation Equity in (income) loss of unconsolidated entities Distributions from unconsolidated entities Gain on early repayment of mortgage notes receivable and sale of investment securities (Gain) loss on derivative instruments, net (Gain) loss on extinguishment and forgiveness of debt, net Changes in assets and liabilities: Investment in direct financing leases Rent and tenant receivables and other assets, net Due from affiliates, net Assets held for sale classified as discontinued operations Accounts payable and accrued expenses Deferred rent, derivative and other liabilities Due to affiliates Liabilities associated with assets held for sale Net cash provided by operating activities Cash flows from investing activities: Investments in real estate assets Capital expenditures and leasing costs Real estate developments Principal repayments received from borrowers Investments in unconsolidated entities Return of investment from 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 Proceeds from the settlement of property-related insurance claims Line of credit advances to affiliates Line of credit repayments from affiliates Net cash (used in) provided by investing activities Cash flows from financing activities: Proceeds from mortgage notes payable Payments on mortgage notes payable and other debt, including debt extinguishment and swap termination costs Proceeds from credit facility Payments on credit facility, including swap termination costs Proceeds from corporate bonds Payments on corporate bonds, including extinguishment costs F-15 Year Ended December 31, 2017 2016 2015 $ 32,378 $ (200,824) $ (323,492) 745,499 (61,536) 20,027 50,548 — 16,751 (2,726) 3,646 (65) (2,976) (18,373) 2,097 (21,394) 1,163 13,812 10,742 (395) 50 4,019 793,267 (699,004) (21,694) (14,850) 6,796 — 1,972 445,525 (1,191) 400 (37,226) 36,111 355 (16,400) 25,100 (274,106) 806,548 (55,722) — 303,751 — 10,728 415 1,433 — 1,191 771 3,976 (52,626) (416) — (3,323) (17,740) (214) — 797,948 (100,194) (16,568) (17,411) 5,417 (25,777) 2,580 1,000,700 (2,259) — (17,856) 13,305 — (10,300) 50,000 881,637 866,549 65,582 — 305,094 15,300 14,500 (2,361) 4,873 (65) 1,460 (4,812) 2,035 (63,195) 25,489 — (999) (45,934) (329) — 859,695 (36,319) (18,569) (57,682) 6,921 — 6,479 1,009,107 (1,911) 392 (16,542) 48,702 839 (10,000) 10,000 941,417 4,652 3,112 1,445 (424,385) 329,000 (645,107) 600,000 — (337,022) 1,033,000 (1,993,000) 1,000,000 (1,311,203) (188,892) 60,000 (1,784,000) — — VEREIT OPERATING PARTNERSHIP, L.P. CONSOLIDATED STATEMENTS OF CASH FLOWS – (Continued) (In thousands) Payments of deferred financing costs Proceeds from 2016 Term Loan Repayment of 2016 Term Loan Repurchases of common units under the Share Repurchase Program Repurchases of common units to settle tax obligations Proceeds from the issuance of Common Units, net of underwriters’ discount Payments of equity issuance costs Contributions from non-controlling interest holders Distributions paid Net cash used in financing activities Net change in cash and cash equivalents and restricted cash Cash and cash equivalents and restricted cash, beginning of period Less: cash and cash equivalents of discontinued operations Cash and cash equivalents and restricted cash from continuing operations, beginning of period Cash and cash equivalents, and restricted cash, end of period Less: cash and cash equivalents of discontinued operations Cash and cash equivalents and restricted cash from continuing operations, end of period Reconciliation of Cash and Cash Equivalents and Restricted Cash Cash and cash equivalents at beginning of period Restricted cash at beginning of period Cash and cash equivalents and restricted cash at beginning of period Cash and cash equivalents at end of period Restricted cash at end of period Cash and cash equivalents and restricted cash at end of period Year Ended December 31, 2017 (9,575) — — (518) (2,148) — — 101 (608,615) (756,595) (237,434) 301,470 (2,973) 2016 (19,872) 300,000 (300,000) — (4,652) 702,765 (280) 675 (580,508) (1,506,985) 172,600 2015 (2,436) — — — (2,227) — — — (235,494) (2,151,604) (350,492) 128,870 (4,968) 479,362 (5,850) 298,497 123,902 473,512 64,036 (2,198) 61,838 253,479 45,018 298,497 34,176 27,662 61,838 $ $ $ 301,470 (2,973) 298,497 64,135 59,767 123,902 253,479 45,018 298,497 $ $ $ 128,870 (4,968) 123,902 410,861 62,651 473,512 64,135 59,767 123,902 $ $ $ The accompanying notes are an integral part of these statements. F-16 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2017 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. 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. VEREIT is a full-service real estate operating company which owns and manages one of the largest portfolios of single-tenant commercial properties in the U.S. VEREIT’s business model provides equity capital to creditworthy corporations in return for long-term leases on their properties. The Company actively manages its portfolio considering a number of metrics including property type, concentration and key economic factors for appropriate balance and diversity. Substantially all of the Company’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, 2017 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. 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 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 the fourth quarter of 2017, the Company operated through two business segments, the real estate investment segment and the investment management segment, Cole Capital. Substantially all of the Cole Capital segment’s operations were conducted through Cole Capital Advisors, Inc. (“CCA”), an Arizona corporation and a wholly owned subsidiary of the OP. CCA was treated as a taxable REIT subsidiary (“TRS”) under Section 856 of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”). As discussed further in Note 5 —Discontinued Operations, on November 13, 2017, the OP entered into a purchase and sale agreement (the “Cole Capital Purchase and Sale Agreement”) with CCA Acquisition, LLC (the “Cole Purchaser”), an affiliate of CIM Group, LLC. Under the terms of the Cole Capital Purchase and Sale Agreement, the Company agreed to sell to the Cole Purchaser all of the issued and outstanding shares of common stock of CCA and certain of CCA’s subsidiaries. The sale closed on February 1, 2018. As the Company entered into the Cole Capital Purchase and Sale Agreement during the fourth quarter of 2017, the Company's financial results are reported as a single segment, and the assets, liabilities and related financial results of substantially all of the Cole Capital segment are reflected in the financial statements as discontinued operations. 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”). F-17 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2017 – (Continued) Principles of Consolidation and Basis of Presentation The consolidated financial statements include the accounts of the Company and its consolidated subsidiaries and consolidated joint venture arrangements. The portions of the consolidated joint venture arrangements 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 each of December 31, 2017 and December 31, 2016, there were approximately 23.7 million Limited Partner OP Units outstanding. 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. Reclassification As described below, the following items previously reported have been reclassified to conform with the current period’s presentation. Direct financing lease income has been reclassified to rental income for all periods presented. The assets and liabilities to be transferred pursuant to the Cole Capital Purchase and Sale Agreement and related financial results are reflected in the consolidated balance sheets and consolidated statements of operations as discontinued operations for all periods presented. In connection with the adoption of Accounting Standards Update (“ASU”) 2016-15 and ASU 2016-18, discussed in “Recent Accounting Pronouncements,” certain reclassifications have been made to prior period balances to conform to current presentation in the consolidated statement of cash flows. Under ASU 2016-15, the Company reclassified a portion of distributions received from equity method investments which were previously reported in cash flows provided by operating activities to cash flows from investing activities in the consolidated statement of cash flows. Under ASU 2016-18, transfers to or from restricted cash which have previously been shown in the Company’s investing activities section of the consolidated statements of cash flows are now required to be shown as part of the total change in cash, cash equivalents and restricted cash in the consolidated statements of cash flows. 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, allocation of purchase price of real estate asset acquisitions and income taxes. F-18 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2017 – (Continued) 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. Allocation of Purchase Price of Real Estate Assets The Company allocates the purchase price of acquired properties 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 estimating 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 determination of the fair values of the real estate assets and liabilities acquired requires the use of significant assumptions with regard to the current market rental rates, rental growth rates, capitalization and discount rates, interest rates and other variables. The use of alternative estimates may result in a different allocation of the Company’s purchase price, which could materially impact the Company’s results of operations. In January 2017, the Company elected to early adopt 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 of assets or businesses. During the year ended December 31, 2017, all real estate acquisitions qualified as asset acquisitions, and external acquisition costs related to asset acquisitions were capitalized and allocated to tangible and intangible assets and liabilities as described above. Prior to January 1, 2017, external costs related to property acquisitions were expensed as incurred. Internal costs, such as employee salaries, related to activities necessary to complete, or affect, self-originating asset acquisitions or business combinations are classified as acquisition-related expenses in the accompanying consolidated statements of operations for all periods presented. 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. 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 4 – Real Estate Investments and Related Intangibles 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 F-19 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2017 – (Continued) 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. Discontinued Operations The Company reports discontinued operations when a component of an entity or group of components that has been disposed of or classified as held for sale and represents a strategic shift that has or will have a major effect on an entity’s operations and financial results. The results of operations for assets meeting the definition of discontinued operations are reflected in the Company’s consolidated statements of operations as discontinued operations for all periods presented. See Note 5 — Discontinued Operations for further discussion regarding discontinued operations. 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 and gain on disposition of unconsolidated entities in the consolidated statements of operations. See Note 4 – Real Estate Investments and Related Intangibles for further discussion on investments in Unconsolidated Joint Ventures. Cole REITs As of December 31, 2017 and 2016, the Company owned equity investments in 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”), and Cole Credit Property Trust V, Inc. (“CCPT V” and collectively with CCPT IV, INAV, CCIT II and CCIT III, the “Cole REITs”). 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 17 – Related Party Transactions and Arrangements for further discussion on the Cole REITs. 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 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. Prior to the adoption of ASU 2017-01, as discussed in “Recent Accounting Pronouncements,” in the event the Company disposed of a property, or classified a property as an asset held for sale, that constituted a business under U.S. GAAP, the Company allocated a portion of the real estate investments reporting unit’s goodwill to that property in determining the gain or loss on the F-20 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2017 – (Continued) disposal of the property. The amount of goodwill allocated to the business was based on the relative fair value of the business to the fair value of the 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. U.S. GAAP requires us to utilize the Company’s expected holding period of our properties when assessing recoverability. 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 Note 9 – Fair Value Measures. See also Note 4 – Real Estate Investments and Related Intangibles 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 may not be recoverable. The Company’s annual testing date is during the fourth quarter. In 2017, the Company adopted ASU 2017-04, Intangibles – Goodwill and Others (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU 2017-04”), which allows the Company to test goodwill for impairment by comparing the carrying value of net assets to their respective fair value. If the fair value is determined to be less than the carrying value, an impairment charge will be recorded for the difference between the fair value and the carrying value. The Company estimates the fair value 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 9 – Fair Value Measures. Goodwill activity is also discussed in Note 3 – Goodwill and goodwill related to discontinued operations is discussed in Note 5 — Discontinued Operations. Intangible Assets The Company’s intangible assets primarily consisted of management and advisory contracts that the discontinued operations, Cole Capital, had with certain Cole REITs. There were no impairment indicators identified during the year ended December 31, 2017. 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 tested 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 adjusts the intangible assets to their respective fair values and recognized an impairment loss. F-21 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2017 – (Continued) 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, 2017, 2016 or 2015. 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, 2017, 2016 or 2015. 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 $27.7 million and $45.0 million, respectively, in restricted cash as of December 31, 2017 and December 31, 2016. 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, 2017 was $26.4 million in lender reserves and $1.3 million held in restricted lockbox accounts. Included in restricted cash at December 31, 2016 was $40.7 million in lender reserves and $4.3 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-22 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2017 – (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 7 – 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, 2017, the Company had no other-than-temporary impairment losses. See Note 6 – 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 not be completed. Convertible Debt The Company has an outstanding aggregate balance of $1.0 billion related to the Convertible Notes (as defined in Note 10 – 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-23 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2017 – (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 – Real Estate 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 8 – 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, 2017 and December 31, 2016, the Company had $56.6 million and $57.6 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, 2017 and December 31, 2016, the Company maintained an allowance for uncollectible accounts of $6.9 million and $6.0 million, respectively. 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. F-24 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2017 – (Continued) Revenue Recognition – Cole Capital Revenue included 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 recorded dealer manager fees, excluding those related to INAV, 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 were recorded as revenue when the fees were fixed or determinable. The Company recorded revenue related to acquisition and financing coordination fees upon completion of a transaction and advisory, asset and property management fees as services were performed. The Company was also reimbursed for certain costs incurred in providing these services. Securities sales commissions and dealer manager reimbursements were recorded as revenue as the expenses were incurred, as long as reimbursement was reasonably assured. The Company, in its sole discretion, could 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 reallowed 100% of selling commissions earned to participating broker-dealers. Refer to Note 17 – Related Party Transactions and Arrangements for further discussion. As of December 31, 2017, these revenues are reflected in the Company’s consolidated statements of operations as discontinued operations for all periods presented. See Note 5 — Discontinued Operations for further discussion regarding discontinued operations. Program Development Costs The Company paid for organization, registration and offering expenses associated with the sale of common stock of the Cole REITs. The reimbursement of these expenses by the Cole REITs was 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 were expected to be collected were recorded as program development costs. The Company assessed 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 reserved for any balances considered not collectible. Additional reserves were generally recorded if actual proceeds raised from the offerings and corresponding program development costs incurred differed from management’s assumptions. As of December 31, 2017, program development costs are included in discontinued operations for all periods presented. See Note 5 — Discontinued Operations for further discussion regarding discontinued operations. Acquisition-Related Expenses and Litigation, Merger and Other Non-routine Costs, Net of Insurance Recoveries During the year ended December 31, 2017, all real estate acquisitions qualified as asset acquisitions, and external acquisition costs related to these asset acquisitions were capitalized. Prior to the Company’s adoption of ASU 2017-01 on January 1, 2017, external costs related to real estate acquisitions were expensed as incurred. Internal costs, such as employee salaries, related to activities necessary to complete, or affect, self-originating asset acquisitions or business combinations are classified as acquisition- related expenses in the accompanying consolidated statements of operations. Any costs incurred as a result of a business combination will be classified as acquisition-related expenses or other non-routine transaction related expenses and expensed as incurred. External acquisition-related costs incurred in relation to prior mergers and litigation resulting therefrom are included in litigation 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 Audit Committee Investigation (defined below) 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-25 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2017 – (Continued) Litigation, merger and other non-routine costs, net of insurance recoveries include the following costs (amounts in thousands): Merger Related Costs: Transfer taxes(1) Litigation and other non-routine costs: Audit Committee Investigation and related matters (2) Legal fees and expenses (3) Other fees and expenses Total costs incurred Insurance recoveries Total ___________________________________ Year Ended December 31, 2017 2016 2015 $ (1,595) $ 562 $ (2,509) 49,434 421 — 48,260 (300) 47,960 $ 24,207 311 — 25,080 (21,196) 3,884 $ 44,242 2,704 632 45,069 (11,441) 33,628 $ (1) The negative balance for the years ended December 31, 2017 and 2015 are a result of estimated costs accrued in prior periods that exceeded actual expenses incurred. (2) Includes all fees and costs associated with the previously-announced investigation conducted by the audit committee (the “Audit Committee”) of the Company’s board of directors (the “Audit Committee Investigation”) and various litigations and investigations prompted by the results of the Audit Committee Investigation, including fees and costs incurred pursuant to the Company’s advancement obligations, litigation related there to and in connection with related insurance recovery matters. (3) Includes legal fees and expenses associated with litigation resulting from prior mergers. Due from Affiliates The Company received 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 17 – Related Party Transactions and Arrangements for further explanation. The amounts presented in the consolidated balance sheets are receivables that will be settled directly with the respective Cole REITs and were not transferred pursuant the Cole Capital Purchase and Sale Agreement. 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 16 – 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 Prior to the fourth quarter of the year ended December 31, 2017, the Company operated through two business segments, the real estate investment segment and the investment management segment, Cole Capital. On November 13, 2017, the Company entered into the Cole Capital Purchase and Sale Agreement to sell substantially all of the Cole Capital segment. The sale closed on February 1, 2018. Substantially all of Cole Capital is presented as discontinued operations and the Company’s remaining financial results are reported as a single segment for all periods presented. F-26 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2017 – (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, 2017, 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, 2013 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 conducted substantially all of its Cole Capital 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 provision for or benefit from income taxes attributable to Cole Capital are included in discontinued operations for all periods presented. See Note 5 — Discontinued Operations for further discussion regarding discontinued operations. 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 U.S. Financial Accounting Standards Board (“FASB”) issued ASU 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”) (Topic 606), which supersedes the revenue recognition requirements in Revenue Recognition, Accounting Standards Codification (“ASC”) (Topic 605) and will require 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. For public business entities, the guidance should be applied to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Companies may use either a full retrospective or a modified retrospective approach, which requires applying the new standard to all existing contracts not yet completed as of the effective date and recording a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. The Company plans to use the modified retrospective approach to adopt ASU 2014-09. Once ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”), which, as discussed below, sets forth principles for the recognition, measurement, presentation and disclosure of leases, goes into effect, ASU 2014-09 may apply to non-lease components in the lease agreements. In January 2018, the FASB proposed amending Topic 842 to allow lessors the option to combine lease and non-lease components when certain criteria are met. The Company has completed its evaluation of the standard’s impact on the Company’s revenue streams and does not expect that the adoption of ASU 2014-09 will have a material impact on its consolidated financial statements. F-27 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2017 – (Continued) 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. The lessor accounting model under ASU 2016-02 is similar to current guidance, however it limits the capitalization of initial direct leasing costs, such as internally generated costs. 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 and provides for certain practical expedients. The Company’s implementation team has developed an inventory of all leases and is identifying any non-lease components in the lease agreements and is evaluating the impact to the Company, both as lessor and lessee, and its consolidated financial statements. Upon the adoption of ASU 2016-02, the Company will record certain expenses paid directly by a tenant that protect the Company’s interests in its properties, such as real estate taxes, and the related operating expense reimbursement revenue, with no impact on net income. The Company currently does not record such expenses and the related operating expenses reimbursement revenues. The Company expects the accounting for leases pursuant to which the Company is the lessee to change and is currently evaluating the impact. Leases pursuant to which the Company is the lessee primarily consist of corporate offices and ground leases. 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 recognition 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. ASU 2016-15 is effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted, and requires retrospective adoption unless it is impracticable to apply, in which case it is to be applied prospectively as of the earliest date practicable. The Company adopted ASU 2016-15 during the fourth quarter of fiscal year 2017 and determined that this standard impacts the Company’s classification of proceeds from the settlement of insurance claims and distributions received from equity method investments. Following the retrospective adoption of this standard, the Company reclassified $2.6 million and $6.5 million of distributions received from equity method investments from cash flows from operating activities to cash flows from investing activities for the years ended December 31, 2016 and 2015, respectively. The Company also reclassified $0.8 million of proceeds from the settlement of property-related insurance claims from cash flows from operating activities to cash flows from investing activities for the year ended December 31, 2015. 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 adopted ASU 2016-18 during the fourth quarter of 2017 and applied the standard retrospectively for all periods presented. Accordingly, for the years ended December 31, 2017, 2016 and 2015, the Company included restricted cash with cash and cash equivalents when reconciling the beginning-of-period and end-of-period amounts shown on the statements of cash flows and removed the change in restricted cash from cash flows from investing activities. This change resulted in a decrease in cash flows from investing activities of $11.1 million during the year ended December 31, 2016 and an increase of $1.5 million in cash flows from investing activities during the year ended December 31, 2015. Upon adoption of ASU 2016-18, the Company also included $3.6 million and $4.4 million, during the years ended December 31, 2016 and 2015, respectively, of restricted cash outflows within the “payments on mortgage notes payable and other debt, including debt extinguishment and swap termination costs’’ line item within cash flows from financing activities in the consolidated statement of cash flows. F-28 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2017 – (Continued) In January 2017, the FASB issued 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 has elected to early adopt ASU 2017-01 effective January 1, 2017. As the Company expects that a majority of its real estate acquisitions will be considered asset acquisitions, external acquisition costs related to these asset acquisitions will be capitalized. Prior to 2017, all acquisition-related costs were expensed as incurred. The adoption of this pronouncement resulted in capitalization of $3.3 million of external acquisitions-related costs during the year ended December 31, 2017. Internal costs, such as employee salaries, related to activities necessary to complete, or affect, self-originating asset acquisitions or business combinations are classified as acquisition-related expenses in the accompanying consolidated statements of operations. Upon adoption of ASU 2017-01, the Company's real estate dispositions qualify as asset dispositions and as such, no portion of the Company’s goodwill was allocated to the cost basis of these assets in determining the gain or loss on disposition of real estate and held for sale assets. Prior to January 1, 2017, when the Company disposed of a property or classified a property as held for sale, it constituted a business per U.S. GAAP and the Company allocated a portion of goodwill to the cost basis of that property in determining the gain or loss on the disposition of real estate and held for sale assets. In January 2017, the FASB issued 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 fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted. The adoption of this standard is applied prospectively and may result in a different impairment charge as compared to the existing standard. The Company adopted ASU 2017-04 during the fourth quarter of 2017. ASU 2017-04 had no impact on the 2017 annual impairment test. Refer to “Note 3 – Goodwill” for discussion regarding goodwill and “Note 9 – Fair Value Measures” regarding the annual goodwill impairment test. In February 2017, the FASB issued ASU 2017-05, Other Income – Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets (“ASU 2017-05”), which clarifies the following: 1) nonfinancial assets within the scope of Subtopic 610-20 may include nonfinancial assets transferred within a legal entity to a counterparty; 2) an entity should allocate consideration to each distinct asset by applying the guidance in Topic 606 on allocating the transaction price to performance obligations; and 3) requires entities to derecognize a distinct nonfinancial asset or distinct in substance nonfinancial asset in a partial sale transaction when it (a) does not have (or ceases to have) a controlling financial interest in the legal entity that holds the asset in accordance with Subtopic 810 and (b) transfers control of the asset in accordance with Topic 606. The adoption of this standard will result in higher gains on the sale of partial real estate interests, including contributions of nonfinancial assets to a joint venture or other noncontrolling investee, due to recognizing the full gain when the derecognition criteria are met and recording the retained noncontrolling interest at its fair value. ASU 2017-05 is effective for annual periods, and interim periods therein, beginning after December 15, 2017. The standard is applied prospectively to sales of nonfinancial assets on or after the adoption date. The Company will adopt ASU 2017-09 during the first quarter of fiscal year 2018 and does not expect it will have a material impact on its consolidated financial statements. In May 2017, the FASB issued ASU 2017-09, Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting. This ASU clarifies which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. Specifically, an entity would not apply modification accounting if the fair value, vesting conditions and classification of the awards are the same immediately before and after the modification. This ASU is effective for fiscal years beginning after December 15, 2017 and interim periods therein, with early adoption permitted. The standard is applied prospectively to an award modified on or after the adoption date. The Company will adopt ASU 2017-09 during the first quarter of fiscal year 2018 and does not expect it will have a material impact on its consolidated financial statements. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. The targeted amendments in this ASU help simplify certain aspects of hedge accounting and result in a more accurate portrayal of the economics of an entity’s risk management activities in its financial statements. This ASU applies to the Company’s interest rate swaps designated as cash flow hedges. Upon adoption of this ASU, all changes in the fair value of highly effective cash flow hedges will be recorded in accumulated other comprehensive income rather than recognized directly in earnings. Under current U.S. GAAP, the ineffective portion of the change in fair value of cash flow hedges is recognized directly in earnings. This eliminates the requirement to separately measure and disclose ineffectiveness for qualifying cash flow hedges. ASU 2017-12 is effective for public entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. The ASU is required to be adopted using a modified retrospective approach with early adoption permitted. The Company will adopt ASU 2017-12 during the first quarter of fiscal year 2018 and does not expect it will have a material impact on its consolidated financial statements. F-29 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2017 – (Continued) Note 3 – Goodwill In connection with prior mergers, the Company recorded goodwill as a result of the merger consideration exceeding the net assets acquired. As of December 31, 2017 and December 31, 2016, the carrying value of goodwill was $1.3 billion. During the year ended December 31, 2017, one property classified as held for sale as of December 31, 2016 was classified as held and used, resulting in an increase to the goodwill allocated to the real estate investment reporting unit of $0.4 million. During the year ended December 31, 2016, the Company allocated $73.2 million of goodwill to dispositions and held for sale assets, which included $2.3 million of goodwill allocated to the cost basis of two properties foreclosed upon as discussed in Note 10 –Debt. The allocated goodwill of $73.2 million was included in gain (loss) on disposition of real estate and real estate assets held for sale, net in the consolidated statement of operations. The Company evaluates goodwill for impairment annually or more frequently when an event occurs or circumstances change that indicate the carrying value may not be recoverable. The analysis performed for the annual goodwill tests during the years ended December 31, 2017, 2016 and 2015 resulted in no impairment charges. See Note 9 – Fair Value Measures for a discussion of the Company’s fair value measurements regarding goodwill. Goodwill related to discontinued operations is discussed in Note 5 — Discontinued Operations. Note 4 – Real Estate Investments and Related Intangibles Property Acquisitions During the year ended December 31, 2017, the Company acquired controlling financial interests in 88 commercial properties and three land parcels for an aggregate purchase price of $748.8 million (the “2017 Acquisitions”), which includes $3.3 million of external acquisition-related expenses that were capitalized in accordance with ASU 2017-01 and includes 22 properties acquired in a nonmonetary exchange discussed below. Prior to the adoption of ASU 2017-01, costs related to property acquisitions were expensed as incurred. During the year ended December 31, 2016, the Company acquired a controlling interest in eight commercial properties for an aggregate purchase price of $100.2 million (the “2016 Acquisitions”). During the year ended December 31, 2015, the Company acquired 16 commercial properties and nine land parcels for an aggregate purchase price of $36.3 million (the “2015 Acquisitions”). 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 and other intangibles (1) Above-market leases (2) Assumed intangible liabilities: Below-market leases (3) Total purchase price of assets acquired ____________________________________ Year Ended December 31, 2017 2016 2015 $ $ 110,634 523,445 634,079 $ 23,187 67,865 91,052 105,940 10,445 9,613 — 5,051 28,643 33,694 2,580 153 (1,680) 748,784 $ (471) 100,194 $ $ (108) 36,319 (1) The weighted average amortization period for acquired in-place leases and other intangibles is 15.8 years, 13.8 years and 11.0 years for 2017 Acquisitions, 2016 Acquisitions and 2015 Acquisitions, respectively. (2) The weighted average amortization period for acquired above-market leases is 18.0 years and 14.1 years for 2017 Acquisitions and 2015 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 13.8 years, 10.0 years and 15.0 years for 2017 Acquisitions, 2016 Acquisitions and 2015 Acquisitions, respectively. F-30 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2017 – (Continued) The Company has not included pro forma information for the Company's 2016 Acquisitions or 2015 Acquisitions, which were acquired prior to the adoption of ASU 2017-01 and met the definition of a business combination, as they did not have a material impact on the Company's financial position or results of operations. 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): 2018 2019 2020 2021 2022 Thereafter Total Future Minimum Operating Lease Base Rent Payments $ $ 1,105,205 1,082,111 1,049,997 1,009,474 929,909 5,950,591 11,127,287 Future Minimum Direct Financing Lease Payments (1) 3,016 $ 2,397 2,023 1,899 1,809 2,184 13,328 $ ____________________________________ (1) 29 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. Property Dispositions and Real Estate Assets Held for Sale During the year ended December 31, 2017, the Company disposed of 137 properties, including one property owned by a consolidated joint venture, six properties transferred to the lender in either a deed-in-lieu of foreclosure or foreclosure sale transaction as discussed in Note 10 – Debt, and 15 properties disposed of in connection with the nonmonetary exchange discussed below, for an aggregate gross sales price of $594.9 million, of which our share was $574.4 million after the profit participation payments related to the disposition of 31 Red Lobster properties and the consolidated joint venture partner’s share of the sales price. The dispositions resulted in proceeds of $445.5 million after a mortgage loan assumption of $66.0 million and closing costs. Additionally, the Company’s tax provision for the year ended December 31, 2017 included $1.7 million of Canadian tax on the gain on sale of certain Canadian properties. The Company recorded a gain of $64.7 million related to the sales which is included in gain (loss) on disposition of real estate and real estate assets held for sale, net in the accompanying consolidated statements of operations. 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 Lobsters. The dispositions resulted in 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, which included $67.8 million of goodwill allocated to the cost basis of such properties, which is included in gain (loss) on disposition of real estate and real estate assets held for sale, 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 debt 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 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 real estate assets held for sale, net in the accompanying consolidated statements of operations. F-31 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2017 – (Continued) 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 and gain on disposition of unconsolidated entities in the accompanying consolidated statements of operations. As of December 31, 2017, there were 30 properties classified as held for sale with a carrying value of $38.3 million, included in assets related to discontinued operations and real estate assets held for sale, net in the accompanying consolidated balance sheet which are expected to be sold in the next 12 months as part of the Company’s portfolio management strategy. As of December 31, 2016, there were 11 properties classified as held for sale. During the year ended December 31, 2017, the Company recorded a loss of $3.1 million related to held for sale properties. No goodwill was allocated to the cost basis of any additional properties classified as held for sale during the year ended December 31, 2017. During the year ended December 31, 2016, the Company recorded a loss of $0.2 million related to properties classified as held for sale during the respective period, which included $3.2 million 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 real estate assets held for sale, net in the accompanying consolidated statements of operations. Intangible Lease Assets and Liabilities Intangible lease assets and liabilities of the Company consisted of the following as of December 31, 2017 and December 31, 2016 (amounts in thousands, except weighted-average useful life): Intangible lease assets: In-place leases and other intangibles, net of accumulated amortization of $599,680 and $494,131, respectively Leasing commissions, net of accumulated amortization of $2,902 and $1,836, respectively Above-market lease assets and deferred lease incentives, net of accumulated amortization of $88,335 and $69,670, respectively Total intangible lease assets, net Intangible lease liabilities: Below-market leases, net of accumulated amortization of $73,916 and $56,891, respectively Weighted-Average Useful Life December 31, 2017 December 31, 2016 15.2 10.6 16.3 18.7 $ 1,091,433 $ 1,192,756 13,876 10,231 241,449 1,346,758 $ 275,897 1,478,884 198,551 $ 224,023 $ $ 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, 2017 (amounts in thousands): In-place leases and other intangibles: Total projected to be included in amortization expense $ 135,212 $ 125,701 $ 118,390 $ 110,425 $ 95,990 2018 2019 2020 2021 2022 Leasing commissions: Total projected to be included in amortization expense 1,186 1,172 1,150 1,112 1,056 Above-market lease assets and deferred lease incentives: Total projected to be deducted from rental income 23,773 22,039 21,625 21,197 20,383 Below-market lease liabilities: Total projected to be included in rental income 19,097 18,392 17,244 16,045 15,201 F-32 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2017 – (Continued) Nonmonetary Exchange During the year ended December 31, 2017, the Company completed a nonmonetary exchange through the simultaneous acquisition of 22 Bob Evans properties and disposition of 15 Red Lobster properties. Pursuant to Nonmonetary Transactions, ASC (Topic 845), the cost of a nonmonetary asset acquired in exchange for another nonmonetary asset is the fair value of the asset surrendered to obtain the acquired nonmonetary asset, and a gain or loss should be recognized on the exchange. The fair value of the asset received should be used to measure the cost if the fair value of the asset received is more reliable than the fair value of the asset surrendered. The Company estimated the fair value of the Bob Evans and Red Lobster properties using valuation techniques consistent with the income approach and concluded that the fair value was $50.1 million. As the fair value of the assets received exceeded the book value of the assets surrendered, the Company recorded a gain of $7.4 million, which is included in gain (loss) on disposition of real estate and real estate assets held for sale, net in the accompanying consolidated statements of operations. 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. As part of the Company’s quarterly impairment review procedures and considering the factors discussed regarding the Company’s policies on real estate impairment mentioned in Note 2 – Summary of Significant Accounting Policies, real estate assets and an investment in a property subject to a direct financing lease with carrying values totaling $161.9 million were deemed to be impaired and their carrying values were reduced to their estimated fair values of $111.4 million resulting in impairment charges of $50.5 million during the year ended December 31, 2017. The majority of the 2017 impairment charges relate to certain office, restaurant and other properties that, during 2017, management identified for potential sale or determined, based on discussions with the current tenants, will not be re-leased. During the year ended December 31, 2016, a majority of the impairment charges related to properties identified by management for potential sale as part of its portfolio management strategy to reduce exposure to office properties. Additionally, a tenant of 59 restaurants filed for bankruptcy. 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 year ended December 31, 2015, real estate assets with carrying value totaling $340.1 million were deemed to be impaired and their carrying value was reduced to their estimated fair value of $248.3 million, resulting in impairment charges of $91.8 million. Consolidated Joint Ventures The Company had an interest in one joint venture that owned one property as of December 31, 2017 and had total assets of $33.7 million, of which $30.7 million were real estate investments, net of accumulated depreciation and amortization. As of December 31, 2016, the Company had interests in two joint ventures that owned two properties and had total assets of $57.0 million, of which $50.8 million were real estate investments, net of accumulated depreciation and amortization. As of December 31, 2017 and December 31, 2016, one property was secured by a mortgage note payable of $14.9 million and $11.6 million, respectively, 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 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 $0.2 million and $14,000 for the years ended December 31, 2017 and 2016, respectively. The Partners’ share of the aggregate consolidated joint ventures’ income was $1.3 million for the year ended December 31, 2015. One joint venture disposed of its property during the year ended December 31, 2017 and the Company disposed of its interest in three 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 (as defined below). F-33 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2017 – (Continued) Unconsolidated Joint Ventures The Company’s investment in unconsolidated joint venture arrangements (the “Unconsolidated Joint Ventures”) consisted of interests in two joint ventures that each owned one property as of December 31, 2017 and December 31, 2016. As of December 31, 2017 and December 31, 2016, the Company owned aggregate equity investments of $39.5 million and $41.3 million, respectively, in the Unconsolidated Joint Ventures. The Company accounts for its investments in 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 earnings and distributions from the joint ventures. As of December 31, 2017, the Company’s maximum exposure to risk was $39.5 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, 2017, none of which is recourse to the Company, as discussed in Note 10 – 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, 2017, 2016 and 2015, the Company recognized $3.3 millions, $0.9 million and $2.3 million of net income, respectively, from the unconsolidated joint ventures. 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, 2017 and December 31, 2016 (dollar amounts in thousands): Name of Joint Venture Cole/Mosaic JV South Elgin IL, LLC Cole/Faison JV Bethlehem GA, LLC Faison-Winder Investors, LLC Partner Affiliate of Mosaic Properties and Development, LLC Ownership % (1) December 31, 2017 December 31, 2016 Carrying Amount of Investment (2) 50% 90% $ $ 5,382 $ 34,138 39,520 $ 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 was greater than the underlying equity in net assets by $8.6 million and $6.4 million as of December 31, 2017. and December 31, 2016, respectively. This difference relates to a purchase price allocation of goodwill and a step up in fair value of the investment assets acquired in connection with mergers. 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. F-34 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2017 – (Continued) Note 5 — Discontinued Operations On November 13, 2017, the Company entered into the Cole Capital Purchase and Sale Agreement to sell all of the issued and outstanding shares of common stock of CCA and certain of CCA’s subsidiaries to the Cole Purchaser for approximately $120.0 million paid in cash at closing, subject to customary adjustments to reflect the operation of CCA and such subsidiaries prior to closing. The sale closed on February 1, 2018. At closing, the Company entered into a services agreement (the “Services Agreement”) with the Cole Purchaser pursuant to which the Company will continue to provide certain services to the Cole Purchaser and the Cole REITs, including operational real estate support, over the next year. Under the terms of the Services Agreement, the Company will be entitled to receive reimbursement for certain of the services provided. The Company could also receive additional fees over the next six years if future revenues of Cole Capital exceed a specified dollar threshold (the “Net Revenue Payments”), up to an aggregate of $80.0 million in Net Revenue Payments. The following is a summary of the assets and liabilities related to discontinued operations and real estate assets held for sale as of December 31, 2017 and December 31, 2016 (in thousands): Carrying amount of major classes of assets included in discontinued operations: Cash Intangible assets, net (1) Other assets, net (2) Goodwill (3) Due from Cole REITs, net Loss recognized on classification as held for sale (4) Assets related to discontinued operations, net Real estate assets held for sale, net (5) Assets related to discontinued operations and real estate assets held for sale, net Carrying amount of major classes of liabilities included in discontinued operations: Accounts payable and accrued expenses Other liabilities Due to Cole REITs Liabilities related to discontinued operations ___________________________________ December 31, 2017 December 31, 2016 $ $ $ $ 2,198 9,892 6,975 124,812 1,284 (19,509) 125,652 38,347 163,999 14,269 1,512 100 15,881 $ $ $ $ 2,973 24,383 16,626 124,812 5,445 — 174,239 38,928 213,167 11,276 68 — 11,344 (1) The intangible assets consisted of management and advisory contracts that the Company had with certain Cole REITs. Accumulated amortization was $44.1 million and $29.6 million as of December 31, 2017 and December 31, 2016, respectively. (2) Includes program development costs of $3.3 million and $3.2 million as of December 31, 2017 and December 31, 2016, respectively, which were net of reserves of $7.6 million and $31.7 million, respectively. (3) The Company performed the annual goodwill test using the $120.0 million cash proceeds provided for under the Cole Capital Purchase and Sale Agreement, plus the estimated fair value of the Net Revenue Payments and determined the carrying amount exceeded the estimated fair value. As such, no goodwill impairment was recorded during the year ended December 31, 2017. (4) The Company recognized a loss of $20.0 million on classification of the discontinued operations as held for sale, of which $0.5 million represents estimated costs to sell that were subsequently accrued in accounts payable and accrued expenses as of December 31, 2017. In determining the loss recognized on classification as held for sale, the Company elected to account for the future Net Revenue Payments as a gain contingency. Under this approach, the Company will not recognize any Net Revenue Payments until realized. (5) Real estate assets held for sale are not included in assets related to discontinued operations. F-35 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2017 – (Continued) The following is a summary of the financial information and cash flows for discontinued operations for the years ended December 31, 2017, 2016 and 2015 (in thousands): Revenues: Offering-related fees and reimbursements Transaction service fees and reimbursements Management fees and reimbursements Total revenues Operating expenses: Cole Capital reallowed fees and commissions Transaction costs General and administrative Amortization of intangible assets Goodwill and intangible asset impairments Total operating expenses Operating income (loss) Other income (expense), net Loss recognized on classification as held for sale Loss before taxes (Provision for) benefit from income taxes Loss from discontinued operations Cash flows related to discontinued operations: Cash flows from operating activities Cash flows from investing activities Income Taxes Year Ended December 31, 2017 2016 2015 16,096 $ 36,526 $ 13,929 76,214 106,239 $ 12,533 68,686 117,745 $ 9,879 3,802 63,783 14,490 — 91,954 14,285 464 (20,027) (5,278) (13,839) (19,117) $ 23,174 — 82,558 26,148 120,931 252,811 (135,066) 292 — (134,774) 10,837 (123,937) $ 24,412 25,256 58,793 108,461 16,195 — 79,602 25,884 213,339 335,020 (226,559) 1,167 — (225,392) 40,892 (184,500) Year Ended December 31, 2017 2016 2015 33,232 $ 35,251 $ 31,431 — $ — $ — $ $ $ $ $ Cole Capital’s business, substantially all of which was conducted through a TRS, recognized a provision of $13.8 million for the year ended December 31, 2017, and a benefit of $10.8 million and $40.9 million for the years ended December 31, 2016 and 2015, respectively. F-36 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2017 – (Continued) The following table presents the reconciliation of the provision for (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, 2017, 2016 and 2015 (in thousands): Year Ended December 31, Loss before taxes Less: Income from non-taxable entities Loss attributable to taxable subsidiaries before income taxes Federal provision at statutory rate (35%) Impairment of goodwill Nondeductible portion of transaction costs and loss recognized on classification as held for sale Impact of change in federal tax rate Impact of valuation allowance State income taxes and other 2017 (5,278) (9,523) (14,801) $ $ $ $ (5,180) — 8,283 3,481 6,165 1,090 Total provision for (benefit from) income taxes - Cole Capital $ 13,839 $ $ $ 2016 (134,774) (9,008) (143,782) (50,324) 42,327 2015 (225,392) (8,440) (233,832) (81,841) 48,880 — — — — — (2,840) (10,837) $ — (7,931) (40,892) The following table presents the components of the provision for (benefit from) income taxes for the years ended December 31, 2017, 2016 and 2015 (in thousands): Current Federal State $ Total current provision for (benefit from) income taxes Deferred Federal State Total deferred provision for (benefit from) income taxes Total provision for (benefit from) income taxes - Cole Capital $ Year Ended December 31, 2017 2016 2015 (120) $ 602 482 12,016 1,341 13,357 13,839 $ $ 2,244 (2,762) (518) (9,021) (1,298) (10,319) (10,837) $ 9,058 2,110 11,168 (45,255) (6,805) (52,060) (40,892) The components of the net deferred tax assets (liabilities) as of December 31, 2017 and 2016 which are included in assets or liabilities related to discontinued operations, net in the accompanying consolidated balance sheets, are as follows (in thousands): Intangible assets Accrued compensation Fixed assets Product development costs Equity-based compensation Other Total net deferred tax asset Less: valuation allowance Net deferred tax (liability) asset December 31, 2017 $ (1,590) $ 1,253 (1,568) 1,680 4,772 555 5,102 (6,165) (1,063) $ December 31, 2016 (7,858) 6,163 (3,155) 11,668 4,249 1,227 12,294 — 12,294 $ F-37 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2017 – (Continued) Note 6 – 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. The following tables detail the unrealized gains and losses on investment securities as of December 31, 2017 and December 31, 2016 (in thousands): CMBS CMBS December 31, 2017 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value 43,006 $ 895 $ (2,927) $ 40,974 December 31, 2016 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value 48,297 $ 1,248 $ (2,330) $ 47,215 $ $ As of each of December 31, 2017 and December 31, 2016, the Company owned eight CMBS with an estimated aggregate fair value of $41.0 million and $47.2 million, respectively. The Company generally receives monthly payments of principal and interest on the CMBS. As of December 31, 2017, the Company earned interest on the CMBS at rates ranging between 5.9% and 9.0%. As of December 31, 2017, the fair value of six 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 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, 2017, the Company had no other-than-temporary impairment losses. During the year ended December 31, 2015, the Company recorded a $0.1 million 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 years ended December 31, 2017 or 2016. The scheduled maturity of the Company’s CMBS as of December 31, 2017 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 7 – Mortgage Notes Receivable December 31, 2017 Amortized Cost Fair Value $ $ — $ 17,895 12,053 13,058 43,006 $ — 18,445 9,156 13,373 40,974 As of December 31, 2017, the Company owned eight mortgage notes receivable with a weighted-average interest rate of 6.2% and weighted-average years to maturity of 12.6 years. During the year ended December 31, 2017, one mortgage note with a carrying value of $1.5 million at repayment was paid in full prior to the maturity date resulting in a $0.1 million gain, which is included in other income, net in the accompanying consolidated statements of operations. The following table details the mortgage notes receivable as of December 31, 2017 (dollar amounts in thousands): Outstanding Balance Carrying Value $ 22,496 $ 20,294 Interest Rate Range 5.9% – 6.8% Maturity Date Range December 2026 – January 2033 F-38 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2017 – (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, 2017 (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 $ $ 930 4,422 7,089 13,837 26,278 (1) Includes additional $3.8 million of interest that will be capitalized into the outstanding balance of the mortgage note receivable subsequent to December 31, 2017. 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 years ended December 31, 2017 and 2016. Note 8 – Rent and Tenant Receivables and Other Assets, Net Rent and tenant receivables and other assets, net consisted of the following as of December 31, 2017 and December 31, 2016 (in thousands): Accounts receivable, net (1) Straight-line rent receivable, net (2) Deferred costs, net (3) Prepaid expenses Leasehold improvements, property and equipment, net (4) Restricted escrow deposits Income tax receivable Interest rate swap assets, at fair value Other assets, net (5) Total ___________________________________ December 31, 2017 36,921 $ 230,529 5,746 6,493 12,089 4,995 3,213 627 4,376 304,989 $ December 31, 2016 49,114 $ 201,585 16,154 6,452 14,702 5,741 18,045 199 2,313 314,305 $ (1) Allowance for doubtful accounts included in accounts receivable, net was $6.3 million and $6.0 million as of December 31, 2017 and December 31, 2016, respectively. (2) Allowance for doubtful accounts included in straight-line rent receivable, net was $2.0 million as of December 31, 2017. No such allowance was included in the straight-line rent receivable at December 31, 2016. (3) Amortization expense for deferred costs related to the revolving credit facility totaled $10.4 million, $10.4 million and $10.7 million for the years ended December 31, 2017, 2016 and 2015, respectively. Accumulated amortization for deferred costs related to the revolving credit facility was $40.3 million and $29.8 million as of December 31, 2017 and December 31, 2016, respectively. (4) Amortization expense for leasehold improvements totaled $1.2 million, $2.3 million and $2.2 million for the years ended December 31, 2017, 2016 and F-39 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2017 – (Continued) 2015, respectively, inclusive of write offs of $1.0 million for the year ended December 31, 2016. Accumulated amortization was $4.7 million and $3.5 million as of December 31, 2017 and December 31, 2016, respectively. Depreciation expense for property and equipment totaled $1.8 million, $3.4 million and $2.1 million for the years ended December 31, 2017, 2016 and 2015, respectively, inclusive of write offs of $0.6 million and $1.2 million for the years ended December 31, 2017 and 2016, respectively. (5) Net of $1.8 million and $1.6 million of interest receivable reserves as of December 31, 2017 and December 31, 2016. Note 9 – 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, 2017. 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 6 – Investment Securities, at Fair Value and Note 11 – Derivatives and Hedging Activities, as of December 31, 2017 and December 31, 2016, aggregated by the level in the fair value hierarchy within which those instruments fall (in thousands): Assets: CMBS Derivative assets Total assets Assets: CMBS Derivative assets Total assets Liabilities: Derivative liabilities Level 1 Level 2 Level 3 Balance as of December 31, 2017 — $ — — $ — $ 627 627 $ 40,974 — 40,974 Level 1 Level 2 Level 3 — $ — — $ — $ 199 199 $ 47,215 — 47,215 $ $ $ $ 40,974 627 41,601 Balance as of December 31, 2016 47,215 199 47,414 — $ (3,547) $ — $ (3,547) $ $ $ $ $ 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 and experience in the market. The significant unobservable input used in F-40 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2017 – (Continued) 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 11 – 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, 2017, 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, 2017 and 2016 (in thousands): CMBS $ 47,215 (951) (4,388) (902) 40,974 CMBS 53,304 (2,271) (4,077) 259 47,215 $ $ $ Beginning balance, January 1, 2017 Total gains and losses Unrealized loss included in other comprehensive income, net Purchases, issuance, settlements Return of principal received Amortization included in net income, net Ending Balance, December 31, 2017 Beginning balance, January 1, 2016 Total gains and losses Unrealized loss included in other comprehensive loss, net Purchases, issuance, settlements Return of principal received Accretion included in net loss, net Ending Balance, December 31, 2016 F-41 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2017 – (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, 2017 Fair Value at December 31, 2017 Carrying Amount at December 31, 2016 Fair Value at December 31, 2016 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 $ $ $ 20,294 $ 28,272 $ 22,764 $ 30,460 2,095,690 2,848,768 992,218 185,000 6,121,676 $ $ 2,144,522 2,922,027 1,012,349 185,000 6,263,898 $ $ 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 _______________________________________________ (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 Investments As discussed in Note 4 – Real Estate Investments and Related Intangibles, during the year ended December 31, 2017, net real estate assets and an investment in a property subject to a direct financing lease representing 69 properties were deemed to be impaired and their carrying values totaling $161.9 million were reduced to their estimated fair value of $111.4 million, resulting in impairment charges of $50.5 million. During the years ended December 31, 2016 and 2015, net real estate assets related to 153 and 202 properties, respectively, with carrying values totaling $668.2 million and $340.1 million, respectively, were deemed to be impaired and their carrying values were reduced to their estimated fair values of $485.4 million and $248.3 million, respectively, resulting in impairment charges of $182.8 million and $91.8 million, respectively. 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, 2017, the Company used a range of discount rates from 7.4% to 7.8% with a weighted-average rate of 7.5% and capitalization rates from 6.9% to 10.0% with a weighted-average rate of 8.0%. F-42 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2017 – (Continued) The following table presents the impairment charges by asset class recorded during the years ended December 31, 2017, 2016 or 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 Goodwill Year Ended December 31, 2017 2016 2015 69 153 202 $ $ 50,087 553 (92) 50,548 $ $ 183,240 — (421) 182,819 $ $ 88,465 4,020 (730) 91,755 The Company performed its annual test of the goodwill for impairment and determined an estimated fair value of $15.1 billion, $18.3 billion and $19.7 billion at the 2017, 2016, and 2015 measurement dates, respectively, which exceeded the carrying values by 8.1%, 21.0%, and 13.0% respectively. As such, no goodwill impairment was recorded during the years ended December 31, 2017, 2016 or 2015 in income (loss) from continuing operations. If all other assumptions were held constant, increasing the discount rate by 0.5% would decrease the amount that the 2017 fair value exceeds the 2017 carrying value from $1.1 billion to $385.0 million. The Company estimated the fair value 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 discount rates. 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 multiples for market comparable companies were used to estimate the fair value by applying those multiples to the projected financial information prepared by management. The uncertainties associated with the fair value assumptions for the goodwill are the same as the uncertainties for real estate assets. F-43 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2017 – (Continued) Note 10 – Debt As of December 31, 2017, the Company had $6.1 billion of debt outstanding, including net premiums and net deferred financing costs, with a weighted-average years to maturity of 4.3 years and a weighted-average interest rate of 4.2%. The following table summarizes the carrying value of debt as of December 31, 2017 and December 31, 2016, and the debt activity for the year ended December 31, 2017 (in thousands): Mortgage notes payable: Outstanding balance Net premiums (2) Deferred costs Other debt: Outstanding balance Premium (2) Mortgages and other debt, net Corporate bonds: Outstanding balance Discount (3) Deferred costs Corporate bonds, net Convertible debt: Outstanding balance Discount (3) Deferred costs Convertible debt, net Credit facility: Outstanding balance Deferred costs (4) Credit facility, net Year Ended December 31, 2017 Balance as of December 31, 2016 Debt Issuances Repayments, Extinguishment and Assumptions Accretion and Amortization Balance as of December 31, 2017 $ $ 2,629,949 36,751 (16,633) $ 4,652 — (88) (563,563) $ (526) 883 — $ (11,573) 2,840 2,071,038 (1) 24,652 (12,998) 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 — — 4,564 600,000 — (9,485) 590,515 — — — — (20,947) (17) (584,170) — — — — — — — — 329,000 — 329,000 (644,000) 2,030 (641,970) — (75) (8,808) — 705 4,050 4,755 — 5,112 5,806 10,918 — 1,392 1,392 — — 2,082,692 2,850,000 (1,232) (27,274) 2,821,494 1,000,000 (7,782) (7,960) 984,258 185,000 — 185,000 Total debt $ 6,367,248 $ 924,079 $ (1,226,140) $ 8,257 $ 6,073,444 ____________________________________ (1) Includes $16.2 million related to one mortgage note payable in default. (2) 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. (3) 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. (4) Deferred costs relate to the term portion of the credit facility, which was repaid during the year ended December 31, 2017. F-44 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2017 – (Continued) Mortgage Notes Payable The Company’s mortgage notes payable consisted of the following as of December 31, 2017 (dollar amounts in thousands): Fixed-rate debt (3) Variable-rate debt Total (4) Encumbered Properties 471 1 472 Gross Carrying Value of Collateralized Properties (1) 4,119,850 $ 32,886 4,152,736 $ Outstanding Balance 2,056,097 14,941 2,071,038 $ $ Weighted-Average Interest Rate (6) (2) 4.92% 4.75% 4.92% Weighted-Average Years to Maturity (5) 4.1 0.6 4.1 ____________________________________ (1) Gross carrying value is gross real estate assets, including investment in direct financing leases, net of gross real estate liabilities. (2) Weighted-average interest rate for variable-rate debt represents the interest rate in effect as of December 31, 2017. (3) Includes $78.9 million of variable-rate debt fixed by way of interest rate swap arrangements. (4) 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. The loan has a secured fixed rate of 5.20% and a maturity of July 2021. (5) Weighted average years remaining to maturity is computed using the anticipated repayment date as specified in each loan agreement, where applicable. (6) 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. 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, 2017, except for the loan in default described below, the Company believes it was in compliance with the financial covenants under the mortgage loan agreements and had no restrictions on the payment of dividends. During the years ended December 31, 2017 and 2016, the Company repaid mortgage notes payable resulting in a gain on extinguishment of debt of $0.3 million in each year, 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. As of December 31, 2017, the Company had $16.2 million related to one outstanding mortgage note payable in default. The Company is engaged with the servicer to determine a method of settlement. On August 31, 2017, the Company entered into a deed-in-lieu of foreclosure agreement with the lender of a mortgage loan secured by one property, with an outstanding balance of $41.6 million on the date of agreement and conveyed its interest in the property to satisfy the mortgage loan. As a result of the deed-in-lieu of foreclosure transaction, the Company recognized a gain on forgiveness of debt of $6.7 million, which is included in gain (loss) on extinguishment and forgiveness of debt, net in the accompanying consolidated statements of operations. On August 29, 2017, the Company completed the foreclosure sale of one property secured by a mortgage loan and was relieved of all obligations on the non-recourse loan. On the date of the foreclosure sale, the mortgage loan had an outstanding balance of $20.5 million. The Company recognized a gain on forgiveness of debt of $4.8 million, which is included in gain (loss) on extinguishment and forgiveness of debt, net in the accompanying consolidated statements of operations as a result of the transaction. On June 27, 2017, the Company entered into a deed-in-lieu of foreclosure agreement with the lender of a mortgage loan, secured by four properties, with an outstanding balance of $38.3 million and conveyed all interests in the properties to satisfy the mortgage loan. As a result of the deed-in-lieu of foreclosure transaction, the Company recognized a gain on forgiveness of debt of $9.0 million, which is included in gain (loss) 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 intentional non-repayment of the loan balance at maturity. During the year ended December 31, 2017, the Company cured the default by fully repaying the outstanding loan balance. F-45 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2017 – (Continued) The following table summarizes the scheduled aggregate principal repayments due on mortgage notes subsequent to December 31, 2017 (in thousands): 2018 (1) 2019 2020 2021 2022 Thereafter Total Total 98,450 222,789 265,186 352,770 314,839 817,004 2,071,038 $ $ ___________________________________ (1) Includes $16.2 million, excluding accrued interest, related to one mortgage note payable in default. Other Debt During the year ended December 31, 2017, the Company repaid the remaining outstanding principal balance of the secured term loan from KBC Bank, N.V. ( the “KBC Loan”). Corporate Bonds As of December 31, 2017, the OP had $2.85 billion aggregate principal amount of senior unsecured notes (the “Senior Notes”) outstanding comprised of the following (dollar amounts in thousands): Outstanding Balance December 31, 2017 Interest Rate Maturity Date 2019 Senior Notes 2021 Senior Notes 2024 Senior Notes 2026 Senior Notes 2027 Senior Notes Total balance and weighted-average interest rate $ $ 750,000 400,000 500,000 600,000 600,000 June 1, 2021 3.000% February 6, 2019 4.125% 4.600% February 6, 2024 4.875% 3.950% August 15, 2027 June 1, 2026 2,850,000 4.033% On August 11, 2017, the Company closed a senior note offering, consisting of $600.0 million aggregate principal amount of the Operating Partnership’s 3.950% Senior Notes due 2027 (the “2027 Senior Notes”) (the offering of the 2027 Senior Notes, the “2017 Bond Offering”). On June 2, 2016, the Company closed its senior note offering, consisting of (i) $400.0 million aggregate principal amount of 4.125% Senior Notes due June 1, 2021 (the “2021 Senior Notes”) and (ii) $600.0 million 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. On July 5, 2016, the Company redeemed $1.3 billion aggregate principal amount of 2.000% senior notes due 2017 (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. 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, the 2026 Senior Notes and the 2027 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. F-46 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2017 – (Continued) The indenture governing our 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, 2017. Convertible Debt The following table presents the Company’s $597.5 million aggregate principal amount of convertible senior notes due 2018 (the “2018 Convertible Notes”) and $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”) with their respective terms (dollar amounts in thousands). The OP has issued corresponding identical convertible notes to the General Partner. 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 $7.8 million as of December 31, 2017. The discount will be amortized over the remaining weighted average term of 1.5 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, 2017, 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 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, 2017. 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”). As of December 31, 2017, the Credit Facility had an outstanding balance of $185.0 million and allowed for maximum borrowings of $2.3 billion under its revolving credit facility, subject to borrowing availability. 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. The Operating Partnership used a portion of the proceeds from the 2017 Bond Offering discussed above to repay all of the outstanding borrowings, swap termination costs and accrued and unpaid interest, under the Credit Facility’s $0.5 billion term loan facility (the "Credit Facility Term Loan”) on August 11, 2017, resulting in the write-off of unamortized deferred financing costs of $2.0 million, which is included in gain (loss) on extinguishment and forgiveness of debt, net in the accompanying consolidated statements of operations. 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 Credit Facility terminates on June 30, 2018, unless extended in accordance with the terms of the Credit Agreement. The Credit Agreement provides for a one-year extension option, exercisable at the Company’s election and F-47 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2017 – (Continued) 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. 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 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, 2017. Note 11 – 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 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 years ended December 31, 2017 and 2016, such derivatives were used to hedge the variable cash flows associated with variable-rate debt. During the year ended December 31, 2017, the Company reclassified previously unrealized losses of $0.2 million from accumulated other comprehensive income into interest expense as a result of the hedged forecasted transactions affecting earnings. The Company also reclassified unrealized losses of $0.8 million from accumulated other comprehensive income into interest expense associated with settled interest rate derivatives. 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, 2017, the Company recorded a gain of $1.6 million in earnings related to the ineffective portion of the change in fair value of derivatives designated that qualify as cash flow hedges. During the year ended December 31, 2016, the Company recorded a gain of $2.5 million in such earnings. Earnings related to the ineffective portion of the change in fair value of derivatives designated that qualify as cash flow hedges are included in gain (loss) on derivative instruments, net 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 a prior merger. F-48 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2017 – (Continued) During the year ended December 31, 2017, the Company terminated six of its interest rate swaps in connection with the early repayment of mortgage loans and borrowings under the Credit Facility Term Loan, as discussed in Note 10 – 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 gain of $1.1 million was recorded in relation to the acceleration, which is included in gain (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 $0.3 million will be reclassified from other comprehensive income as an increase to interest expense. During the year ended December 31, 2017, loans associated with thirteen derivative instruments with an aggregate notional value of $662.4 million at the respective settlement date, were repaid in full and one derivative previously designated as a cash flow hedge with a notional value of $27.8 million was de-designated as it was not probable the forecasted hedged transaction would occur. As of December 31, 2017 and December 31, 2016, 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, 2017 — December 31, 2016 14 $ — $ 690,816 The table below presents the fair value of the Company’s derivative financial instruments designated as cash flow hedges as well as their classification in the consolidated balance sheets as of December 31, 2017 and December 31, 2016 (in thousands): Derivatives Designated as Hedging Instruments Interest rate swaps Balance Sheet Location Rent and tenant receivables and other assets, net Interest rate swaps Deferred rent, derivative and other liabilities $ Derivatives Not Designated as Hedging Instruments December 31, 2017 $ December 31, 2016 3 (3,547) — $ — $ 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 gain of $0.3 million for the year ended December 31, 2017 related to the change in the fair value of derivatives not designated as hedging instruments was recorded in gain (loss) on derivative instruments, net in the accompanying consolidated statements of operations. The Company recorded a loss of $0.3 million for the year ended December 31, 2016. As discussed above, during the year ended December 31, 2017, one derivative previously designated as a cash flow hedge with a notional value of $27.8 million was de-designated as it was not probable the forecasted hedged transaction would occur. As of December 31, 2017 and December 31, 2016, the Company had the following outstanding interest rate derivatives that were not designated as qualifying hedging relationships (dollar amounts in thousands): Interest Rate Swap Number of Instruments Notional Amount December 31, 2017 2 78,949 $ $ December 31, 2016 1 51,400 The table below presents the fair value of the Company’s derivative financial instruments not designated as a hedge as well as their classification in the consolidated balance sheets as of December 31, 2017 and December 31, 2016 (in thousands): Derivatives Not Designated as Hedging Instruments Interest rate swaps Balance Sheet Location Rent and tenant receivables and other assets, net F-49 December 31, 2017 December 31, 2016 196 $ 627 $ VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2017 – (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, 2017 and December 31, 2016 (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 December 31, 2017 December 31, 2016 $ $ 627 199 Gross Amounts of Recognized Liabilities $ — $ $ (3,547) $ Gross Amounts Offset in the Consolidated Balance Sheets Net Amounts of Assets Presented in the Consolidated Balance Sheets 627 199 Net Amounts of Liabilities Presented in the Consolidated Balance Sheets $ $ — $ (3,547) $ — $ — $ Financial Instruments Cash Collateral Received — $ — $ 627 — $ — $ (3,348) Net Amount 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, 2017, 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 $0.6 million at December 31, 2017. Note 12 – Supplemental Cash Flow Disclosures Supplemental cash flow information was as follows for the years ended December 31, 2017, 2016 and 2015 (in thousands): Year Ended December 31, 2017 2016 2015 260,951 11,280 16,686 $ $ $ 317,170 20,279 $ $ — $ 343,854 14,179 — 6,578 $ — $ $ — $ $ $ $ 149,768 100,388 66,000 259 7,701 3 149,281 9 38,050 55,000 $ $ $ $ $ $ — $ 1,499 — 133,817 — 53,798 425,021 — 775 $ — $ 50,204 $ (47,474) $ (2,511) $ — $ — $ — $ — — — — Supplemental Disclosures: Cash paid for interest Cash paid for income taxes Cash received from federal income tax refund Non-cash investing and financing activities: 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 or a deed-in-lieu of foreclosure Mortgage notes payable assumed in real estate disposition Real estate investments received from a ground lease expiration Real estate investments received from a property-related legal settlement Nonmonetary Exchanges: Real estate investments received Real estate investments relinquished and gain on disposition Rent and tenant receivables, intangible lease liability and other assets, net $ $ $ $ $ $ $ $ $ $ $ $ $ $ F-50 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2017 – (Continued) Note 13 – Accounts Payable and Accrued Expenses Accounts payable and accrued expenses consisted of the following as of December 31, 2017 and December 31, 2016 (in thousands): Accrued interest Accrued real estate taxes Accrued legal fees Accounts payable Accrued other Total Note 14 – Commitments and Contingencies Litigation December 31, 2017 47,116 $ 26,131 30,854 2,570 29,803 136,474 $ December 31, 2016 43,188 $ 38,433 17,827 4,524 30,889 134,861 $ 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 pleaded guilty to the charges filed. 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 June 30, 2017, following a jury trial, the former Chief Financial Officer was convicted of the charges filed. Both the former Chief Accounting Officer and the former Chief Financial Officer have entered into settlement agreements with the SEC resolving the charges brought against them. As discussed below, the Company and certain of its former officers and 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-51 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2017 – (Continued) Between October 30, 2014 and January 20, 2015, the Company and certain of its former officers and 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. The Company and the OP answered 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 were not required to file new answers. Discovery is ongoing. Plaintiffs in the SDNY Consolidated Securities Class Action filed a motion for class certification and a hearing on the motion was held on August 24, 2017. On August 31, 2017, the court issued orders granting plaintiffs’ motion for class certification and granting summary judgment to defendants with respect to one of plaintiffs’ claims under Section 11 of the Securities Act of 1933. The defendants filed petitions seeking leave to appeal the court’s order granting class certification, which were denied on January 24, 2018. A status conference with the court is scheduled for June 11, 2018. The Company, certain of its former officers and 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; Eton Park Fund, L.P. v. American Realty Capital Properties, Inc., et al., No. 16-cv-09393; Reliance Standard Life Insurance Company, et al, v. American Realty Capital Properties, Inc. et al, No. 17- cv-02796; and Fir Tree Capital Opportunity Master Fund, L.P. et al. v. American Realty Capital Properties, Inc. et al., No. 17- cv-04975 (the “Fir Tree 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. Discovery in the Opt-Out Actions is being coordinated with discovery 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 and in large part is being coordinated with discovery in the SDNY Consolidated Securities Action. The Company was also named as a nominal defendant, and certain of its former officers and 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. Discovery in the Witchko Action is being coordinated with discovery in the SDNY Consolidated Securities Class Action. F-52 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2017 – (Continued) 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. 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 the 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. By order dated May 16, 2017, the Meloche Action was stayed until resolution of the SDNY Derivative Action. The Company has not reserved amounts for any of the litigation or investigation matters discussed above either because it has not concluded that a loss is probable in the particular matter or because for some matters, it believes that a loss is probable but 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, the legal theories and the nature of the claims, as well as the methodology for determining damages. The ultimate resolution of these matters, the timing and substance of which is unknown, may materially impact the Company’s business, financial condition, liquidity and results of operations. 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-53 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2017 – (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): 2018 2019 2020 2021 2022 Thereafter Total Purchase Commitments Future Minimum Base Rent Payments Ground Leases Office Leases $ $ 14,523 14,467 14,350 13,721 13,935 211,514 282,510 $ $ 4,394 4,359 4,389 4,368 4,419 3,995 25,924 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, 2017, Cole Capital was a party to 13 purchase and sale agreements with unaffiliated third-party sellers to purchase a 100% interest in 13 properties, subject to meeting certain criteria, for an aggregate purchase price of $209.0 million, exclusive of closing costs. As of December 31, 2017, Cole Capital had $4.8 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 15 – 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, 2017, the General Partner had approximately 974.2 million shares of Common Stock issued and outstanding. Additionally, the Operating Partnership had approximately 974.2 million General Partner OP Units issued and outstanding as of December 31, 2017, 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. 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. As of December 31, 2017, no shares of Common Stock have been issued pursuant to the Program. F-54 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2017 – (Continued) Preferred Stock and Preferred OP Units Series F Preferred Stock As of December 31, 2017, there were approximately 42.8 million shares of Series F Preferred Stock (and approximately 42.8 million corresponding 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 January 3, 2019, 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, 2017, 2016 and 2015: Ordinary dividends Nondividend distributions Capital gain distributions Total Limited Partner OP Units Year Ended December 31, 2017 2016 2015 95.0% —% 5.0% 100% 95.0% —% 5.0% 100% 75.9% —% 24.1% 100% As of each December 31, 2017 and December 31, 2016, the Operating Partnership had approximately 23.75 million Limited Partner OP Units outstanding. As of December 31, 2017, 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 shares of Common Stock. 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. Common Stock Dividends The Company 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, 2017 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 2017 on November 7, 2017 to stockholders of record as of December 31, 2017, which was paid on January 16, 2018. 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, 2017, 2016 and 2015: F-55 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2017 – (Continued) Year Ended December 31, 2017 2016 2015 60.0% 37.0% 3.0% 100% 95.0% —% 5.0% 100% 75.9% —% 24.1% 100% Ordinary dividends Nondividend distributions Capital gain distributions Total Share Repurchase Program On May 12, 2017, the Company’s board of directors authorized the repurchase of up to $200.0 million of the Company’s outstanding Common Stock over the subsequent 12 months, as market conditions warrant (the “Share Repurchase Program”). Repurchases may be made through open market purchases, privately negotiated transactions, structured or derivative transactions, including accelerated stock repurchase transactions, or other methods of acquiring shares in accordance with applicable securities laws and other legal requirements. The Share Repurchase Program does not obligate the Company to make any repurchases at a specific time or in a specific situation. Repurchases are subject to prevailing market conditions, the trading price of the stock, the Company’s financial performance and other conditions. During the year ended December 31, 2017, the Company repurchased 68,759 shares of Common Stock in multiple open market transactions for $0.5 million as part of the Share Repurchase Program, which are currently deemed to be authorized but unissued shares of Common Stock. Additional shares of Common Stock repurchased by the Company under the Share Repurchase Program, if any, will be returned to the status of authorized but unissued shares of Common Stock. Common Stock Repurchases to Settle Tax Obligations 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, 2017, the General Partner repurchased 268,550 shares to satisfy the federal and state tax withholding obligations on behalf of employees. Note 16 – 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, 2017, the General Partner had cumulatively awarded under its Equity Plan approximately 4.0 million Restricted Shares, net of the forfeiture of 3.7 million Restricted Shares through that date, 4.2 million Restricted Stock Units, net of the forfeiture/cancellation of 1.2 million Restricted Stock Units through that date, and 0.3 million Deferred Stock Units, collectively representing approximately 8.5 million shares of Common Stock. Accordingly, as of such date, approximately 91.3 million additional shares were available for future issuance. During the year ended December 31, 2015, the General Partner awarded 5,634 shares of Common Stock. 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 of compensation expense related to the awards for the year ended December 31, 2015. No such shares of Common Stock were awarded during the years ended December 31, 2017 and 2016. F-56 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2017 – (Continued) 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, 2017, 2016 and 2015, the Company recorded $2.0 million, $2.7 million and $3.9 million, respectively, of compensation expense related to the Restricted Shares. As of December 31, 2017, there was $0.7 million of unrecognized compensation expense related to the Restricted Shares with a weighted-average remaining term of 1.2 years. The following table details the activity of the Restricted Shares during the year ended December 31, 2017: Unvested shares, December 31, 2015 Granted Vested Forfeited Unvested shares, December 31, 2016 Granted Vested Forfeited Unvested shares, December 31, 2017 Time-Based Restricted Stock Units Restricted Shares Weighted-Average Grant Date Fair Value 1,239,662 — (586,863) (90,393) 562,406 — (266,378) (61,600) 234,428 $ $ $ 13.86 — 13.91 14.08 13.78 — 13.55 13.98 13.98 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, 2017, 2016 and 2015, the Company recorded $6.3 million, $3.4 million and $1.8 million, respectively, of compensation expense related to the Time-Based Restricted Stock Units. As of December 31, 2017, there was $5.8 million of unrecognized compensation expense related to the Time-Based Restricted Stock Units with a weighted-average remaining term of 1.7 years. Deferred Stock Units The Company may award Deferred Stock Units to non-executive directors under the Equity Plan (the “Deferred Stock Units”). 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, dies 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 (or upon a change of control or death). 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 the year ended December 31, 2017, the Company recorded approximately $1.0 million of expense related to Deferred Stock Units. During each of the years ended December 31, 2016 or 2015, the Company recorded approximately $0.8 million of expense related to Deferred Stock Units. As of December 31, 2017, there is no unrecognized compensation expense related to the Deferred Stock Units. F-57 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2017 – (Continued) The following table details the activity of the Time-Based Restricted Stock Units and Deferred Stock Units during the year ended December 31, 2017. Unvested units, December 31, 2015 Granted Vested Forfeited Unvested units, December 31, 2016 Granted Vested Forfeited Unvested units, December 31, 2017 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 589,138 736,427 (199,556) (40,095) 1,085,914 673,381 (425,967) (20,463) 1,312,865 $ $ $ 9.61 7.82 9.52 8.68 8.43 8.90 8.61 8.54 8.61 — $ 87,513 (87,513) — — $ 127,588 (127,588) — — $ — 9.18 9.18 — — 8.22 8.22 — — 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. There were no such expenses related to the Market-Based Restricted Stock Units for the year ended December 31, 2017. As of December 31, 2017, there was 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 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, 2017, 2016 and 2015, the Company recorded $7.4 million, $4.6 million and $1.9 million respectively, of expense related to the LTI Target Awards. As of December 31, 2017, there was $6.1 million of unrecognized compensation expense related to the LTI Target Awards with a weighted-average remaining term of 1.7 years. During the year ended December 31, 2017, 671,712 LTI Target Awards were canceled as a result of the awards not meeting the vesting criteria as of the measurement date. F-58 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2017 – (Continued) The following table details the activity of the LTI Target Awards during the year ended December 31, 2017. Unvested units, December 31, 2015 Granted Vested Forfeited Unvested units, December 31, 2016 Granted Forfeited or canceled Unvested units, December 31, 2017 Market-Based Restricted Stock Units 704,804 — (610,839) (93,965) Weighted- Average Grant Date Fair Value 8.58 $ — 8.58 8.58 — — — — — $ — — — $ $ LTI Target Awards Weighted-Average Grant Date Fair Value 731,448 855,471 (8,065) (56,367) 1,522,487 726,867 (675,125) 1,574,229 $ $ $ 11.38 7.14 11.44 11.15 9.00 8.96 11.34 7.98 Note 17 – Related Party Transactions and Arrangements Cole Capital The Company was 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 was responsible for raising capital for certain Cole REITs, advised them regarding offerings, managed relationships with participating broker-dealers and financial advisors, and provided assistance in connection with compliance matters relating to the offerings. The Company received compensation and reimbursement for services relating to the Cole REITs’ offerings and the investment, management and disposition of their respective assets, as applicable. As discussed in Note 5 —Discontinued Operations, the Company entered into the Cole Capital Purchase and Sale Agreement to sell substantially all of Cole Capital. The sale closed on February 1, 2018. The assets and liabilities transferred pursuant to the Cole Capital Purchase and Sale Agreement and related financial results are reflected in the consolidated balance sheets and consolidated statements of operations as discontinued operations for all periods presented. At closing, the Company entered into the Services Agreement with the Cole Purchaser pursuant to which the Company will continue to provide certain services to the Cole Purchaser and the Cole REITs, including operational real estate support, over the next year. Under the terms of the Services Agreement, the Company will be entitled to receive reimbursement for certain of the services provided. The Company could also receive Net Revenue Payments over the next six years if future revenues of Cole Capital exceed a specified dollar threshold, up to an aggregate of $80.0 million in Net Revenue Payments. Offering-Related Revenue The Company generally received 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 reallowed 100% of selling commissions earned to participating broker-dealers. The Company, in its sole discretion, could reallow all or a portion of its dealer manager and distribution and stockholder servicing 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. No selling commissions or dealer manager fees were 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. F-59 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2017 – (Continued) The following table shows the offering fee summary information for the Cole REITs conducting offerings as of December 31, 2017: 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) 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% —% 0.5% —% —% 1% (7)(8) (8) (8) _______________________________________________ (1) The Company reallowed 100% of selling commissions to participating broker-dealers during the years ended December 31, 2017, 2016 and 2015. (2) The Company could reallow all or a portion of its dealer manager fee and/or distribution and stockholder servicing fee to participating broker-dealers as a marketing and due diligence expense reimbursement. (3) The Company received 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 fees with respect to sales of Class T shares was 4.0% of the gross offering proceeds for CCPT V and CCIT III. Distribution and stockholder servicing fees continue to be paid after the offering closes if the 4.0% maximum has not been met. (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 were 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. Transaction Service Revenue The Company earned acquisition fees related to the acquisition, development or construction of properties on behalf of certain of the Cole REITs. In addition, the Company was reimbursed for acquisition expenses incurred in the process of acquiring properties up to certain limits per the respective advisory agreement. The Company was not reimbursed for personnel costs in connection with services for which it receives acquisition fees or real estate commissions. In addition, the Company could 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. F-60 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2017 – (Continued) The following table shows the transaction-related fees for the Cole REITs as of December 31, 2017: Program Open Programs CCPT V INAV CCIT III Closed Programs CCIT II CCPT IV Acquisition Fees (1) Disposition Fees Performance Fees (2) Financing Coordination Fee (3) 2% — 2% 2% 2% 1% — 1% 1% 1% 15% — 15% 15% 15% — — 1% — — _______________________________________________ (1) Percent was taken on gross purchase price. (2) Performance fee was 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 of any debt (other than loans advanced by the Company) to acquire properties or make other permitted investments. Management Service Revenue The Company earned advisory and asset and property management fees from certain Cole REITs. The Company was also reimbursed for expenses incurred in providing advisory and asset and property management services, subject to certain limitations. In addition, the Company earned a performance fee relating to INAV for any year in which the total return on stockholders’ capital exceeded 6% per annum on a calendar year basis. The following table shows the management fees for the Cole REITs as of December 31, 2017: Program Open Programs CCPT V INAV CCIT III Closed Programs CCIT II CCPT IV 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% — 25% — — — _______________________________________________ (1) Annualized fee was based on the average monthly invested assets or average assets, as defined in the respective agreements, or net asset value, if available. (2) The performance fee was limited to 10% of the aggregate total return, for each class, for any individual year. F-61 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2017 – (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, 2017, 2016 and 2015 (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 Financing coordination fee 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, 2017 2016 2015 $ 7,746 5,021 3,329 16,096 11,049 100 — 2,780 13,929 220 57,765 18,449 76,434 262 $ 19,943 8,300 8,283 36,526 9,513 220 — 2,800 12,533 220 51,099 17,587 68,906 453 14,101 5,133 5,178 24,412 18,742 — 4,974 2,164 25,880 452 44,948 13,845 59,245 1,275 $ 106,721 $ 118,418 $ 110,812 (1) The Company reallowed 100% of selling commissions to participating broker-dealers during the years ended December 31, 2017, 2016 and 2015. (2) During the years ended December 31, 2017, 2016 and 2015, the Company reallowed $2.1 million, $3.2 million and $2.1 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 $1.8 million, $1.4 million and $5.3 million for the years ended December 31, 2017, 2016 and 2015, respectively. Investment in the Cole REITs As of December 31, 2017 and December 31, 2016, the Company owned aggregate equity investments of $3.3 million and $4.7 million, respectively, in the Cole REITs and other affiliated offerings, which are presented in investment in unconsolidated entities in the consolidated balance sheets, as the Company retained certain interests subsequent to the sale of Cole Capital. 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 or loss from the Cole REITs in equity in income and gain on disposition of unconsolidated entities in the consolidated statements of operations. During the years ended December 31, 2017 and 2016, the Company recognized a net loss of $0.5 million and $1.3 million, respectively, from the Cole REITs. During the year ended December 31, 2015, the Company recorded net income of $0.1 million from the Cole REITs. The table below presents certain information related to the Company’s investments in the Cole REITs as of December 31, 2017 (carrying amount in thousands): Cole REIT CCPT V INAV CCIT II CCIT III CCPT IV Total December 31, 2017 % of Outstanding Shares Owned 0.76% 0.05% 0.44% 14.25% 0.01% Carrying Amount of Investment 1,231 $ 125 1,126 675 107 3,264 $ F-62 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2017 – (Continued) Due to Affiliates Due to affiliates was $66,000 and $16,000 as of December 31, 2017 and December 31, 2016, respectively, related to amounts due to the Cole REITs. Due from Affiliates, Net As of December 31, 2017 and December 31, 2016, $4.4 million and $5.2 million, respectively, was expected to be collected from affiliates, excluding any outstanding balances from a line of credit with one of the Cole REITs, 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. These amounts will be settled with the respective Cole REIT and were not transferred pursuant to the Cole Capital Purchase and Sale Agreement. 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 matured on September 22, 2017. On March 28, 2017, CCI III OP entered into a modification agreement in order to extend the maturity date of the Subordinate Promissory Note from September 22, 2017 to September 30, 2018. As of December 31, 2017, the Subordinate Promissory Note had an interest rate of 5.6% and $1.6 million and $10.3 million were outstanding as of December 31, 2017 and 2016, respectively. The Subordinate Promissory Note was not transferred pursuant to the Cole Capital Purchase and Sale Agreement. 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, 2017 or 2016. Note 18 – Net Income (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-63 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2017 – (Continued) Net Income (Loss) Per Share The following is a summary of the basic and diluted net income (loss) per share computation for the General Partner for the years ended December 31, 2017, 2016 and 2015 (dollar amounts in thousands): Income (loss) from continuing operations Noncontrolling interests’ share in continuing operations Net income (loss) from continuing operations attributable to the General Partner Dividends to preferred shares and units Net loss from continuing operations available to the General Partner Earnings allocated to participating securities Loss from discontinued operations, net of income taxes Loss from discontinued operations attributable to limited partners Net loss available to common stockholders used in basic and diluted net loss per share Year Ended December 31, 2017 2016 $ $ 51,495 (1,005) (76,887) $ 1,908 50,490 (71,892) (21,402) (491) (19,117) 445 (74,979) (71,892) (146,871) (492) (123,937) 3,053 2015 (138,992) 2,341 (136,651) (71,892) (208,543) (410) (184,500) 4,798 $ (40,565) $ (268,247) $ (388,655) Weighted average number of common stock outstanding - basic and diluted 974,098,652 931,422,844 903,360,763 Basic and diluted net loss per share from continuing operations attributable to common stockholders Basic and diluted loss per share from discontinued operations attributable to common stockholders Basic and diluted net loss per share attributable to common stockholders $ $ $ (0.02) $ (0.16) $ (0.23) (0.02) $ (0.04) $ (0.13) $ (0.29) $ (0.20) (0.43) For the year ended December 31, 2017, diluted net loss per share attributable to common stockholders excludes approximately 0.3 million unvested Restricted Shares and Restricted Stock Units and approximately 23.7 million OP Units as the effect would have been antidilutive. For the year ended December 31, 2016, diluted net loss per share attributable to common stockholders excludes approximately 0.9 million 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 per share 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. F-64 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2017 – (Continued) Net Income (Loss) Per Unit The following is a summary of the basic and diluted net income (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, 2017, 2016 and 2015 (dollar amounts in thousands): Income (loss) from continuing operations $ 51,495 $ Noncontrolling interests’ share in continuing operations Net income (loss) from continuing operations attributable to the Operating Partnership Dividends to preferred units Net loss from continuing operations available to the Operating Partnership Earnings allocated to participating units Loss from discontinued operations, net of income taxes Net loss available to common unitholders used in basic and diluted net loss per unit Year Ended December 31, 2017 2016 (76,887) $ 14 (76,873) (71,892) (148,765) (492) (123,937) 2015 (138,992) (1,274) (140,266) (71,892) (212,158) (410) (184,500) 194 51,689 (71,892) (20,203) (491) (19,117) $ (39,811) $ (273,194) $ (397,068) Weighted average number of common units outstanding - basic and diluted 997,846,999 955,181,238 927,124,560 Basic and diluted net loss per unit from continuing operations attributable to common unitholders Basic and diluted net loss per unit from discontinued operations attributable to common unitholders Basic and diluted net loss per unit attributable to common unitholders $ $ $ (0.02) $ (0.16) $ (0.23) (0.02) $ (0.04) $ (0.13) $ (0.29) $ (0.20) (0.43) For the year ended December 31, 2017, diluted net loss per unit attributable to common unitholders excludes approximately 0.3 million unvested Restricted Shares and Restricted Stock Units as the effect would have been antidilutive. For the year ended December 31, 2016, diluted net loss per unit attributable to common unitholders excludes approximately 0.9 million unvested Restricted Shares and Restricted Stock Units as the effect would have been antidilutive. For the year ended December 31, 2015, diluted net loss per unit attributable to common unitholders excludes approximately 3.3 million of unvested Restricted Shares and Restricted Stock Units as the effect would have been antidilutive. Note 19 – 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, the General Partner generally is not subject to federal income tax, 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. The Company recognized state and local income and franchise tax expense of $6.9 million, $6.0 million and $3.7 million for the years ended December 31, 2017, 2016 and 2015, respectively, which are included in provision for income taxes in the accompanying consolidated statements of operations. In addition, the Company recorded a provision for income taxes of $1.1 million and $0.9 million for the years ended December 31, 2016 and 2015, respectively, related to a TRS entity, which are also included in provision for income taxes in the accompanying consolidated statements of operations. No provision for income taxes related to a TRS entity was recorded for year ended December 31, 2017. The Company had no unrecognized tax benefits as of or during the years ended December 31, 2017, 2016 or 2015. 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 2013. F-65 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2017 – (Continued) As of December 31, 2017, 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, 2013 remain open to examination by the major taxing jurisdictions to which the OP, the General Partner, American Realty Capital Trust III, Inc., CapLease, Inc., American Realty Capital Trust IV, Inc., Cole Real Estate Investments, Inc., and Cole Credit Property Trust, Inc. are subject. Note 20 – Quarterly Results (Unaudited) Presented below is a summary of the unaudited quarterly financial information for the year ended December 31, 2017 for the General Partner (in thousands, except share and per share amounts): Total revenues (1) Income (loss) from continuing operations Income (loss) from discontinued operations Net income (loss) Net income (loss) attributable to the General Partner Basic and diluted net loss (income) per share from continuing operations attributable to common stockholders (2) Basic and diluted net income (loss) per share from discontinued operations attributable to common stockholders (2) Basic and dilutive net (loss) income per share attributable to common stockholders (2) _______________________________________________ $ $ $ Quarters Ended March 31, 2017 320,898 $ June 30, 2017 308,245 $ September 30, 2017 306,543 $ 11,935 2,855 14,790 14,438 29,550 4,636 34,186 33,408 12,489 4,005 16,494 16,094 $ December 31, 2017 316,599 (2,479) (30,613) (33,092) (32,122) (0.01) $ 0.01 (3) $ (0.01) $ (0.02) 0.00 $ 0.01 (3) $ 0.00 $ (0.03) (0.00) $ 0.02 (3) $ (0.00) $ (0.05) (1) Represents revenue from continuing operations as presented on the statement of operations in accordance with GAAP. Substantially all of Cole Capital is presented as a discontinued operations and the Company’s remaining financial results are reported as a single segment for all periods presented. (2) The sum of the quarterly net income (loss) per share amounts may not agree to the full year net loss per share amounts. The Company calculates net income (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. Presented below is a summary of the unaudited quarterly financial information for the year ended December 31, 2017 for the OP (in thousands, except share and per share amounts): Total revenues (1) Income (loss) from continuing operations Income (loss) from discontinued operations Net income (loss) Net income (loss) attributable to the OP Basic and diluted net (loss) income per unit from continuing operations attributable to common unitholders (2) Basic and diluted net income (loss) per unit from discontinued operations attributable to common unitholders (2) Basic and diluted net (loss) income per unit attributable to common unitholders (2) _______________________________________________ $ $ $ $ Quarters Ended March 31, 2017 320,898 11,935 2,855 14,790 14,797 $ June 30, 2017 308,245 29,550 4,636 34,186 34,200 $ September 30, 2017 306,543 12,489 4,005 16,494 16,485 $ December 31, 2017 316,599 (2,479) (30,613) (33,092) (32,910) (0.01) $ 0.00 $ (0.00) $ 0.01 0.01 0.02 $ $ $ (0.01) $ (0.02) 0.00 $ (0.03) (0.00) $ (0.05) (1) Represents revenue from continuing operations as presented on the statement of operations in accordance with GAAP. Substantially all of Cole Capital is presented as a discontinued operations and the Company’s remaining financial results are reported as a single segment for all periods presented. (2) The sum of the quarterly net income (loss) per unit amounts may 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. F-66 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2017 – (Continued) 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): Total revenues (1) (Loss) income from continuing operations Income (loss) from discontinued operations Net (loss) income Net (loss) income attributable to the General Partner Basic and diluted net (loss) income per share from continuing operations attributable to common stockholders (2) Basic and diluted income (loss) per share from discontinued operations attributable to common stockholders (2) Basic and diluted net (loss) income per share attributable to common stockholders (2) _______________________________________________ $ $ $ $ Quarters Ended June 30, 2016 338,533 $ September 30, 2016 331,846 $ December 31, 2016 327,281 $ March 31, 2016 337,787 (116,701) 621 (116,080) (113,086) 246 2,987 3,233 3,146 28,865 1,381 30,246 29,495 (0.15) $ (0.02) $ 0.00 $ 0.00 $ (0.15) $ (0.02) $ 0.01 (3) $ 0.00 (3) $ 0.01 (3) $ 10,703 (128,926) (118,223) (115,418) (0.01) (0.13) (0.14) (1) Represents revenue from continuing operations as presented on the statement of operations in accordance with GAAP. Substantially all of Cole Capital is presented as a discontinued operations and the Company’s remaining financial results are reported as a single segment for all periods presented. (2) The sum of the quarterly net income (loss) per share amounts may 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. 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): Total revenues (1) (Loss) income from continuing operations Income (loss) from discontinued operations Net (loss) income Net (loss) income attributable to the OP Basic and diluted net (loss) income per unit from continuing operations attributable to common unitholders (2) Basic and diluted net income (loss) per unit from discontinued operations attributable to common unitholders (2) Basic and diluted net (loss) income per unit attributable to common unitholders (2) _______________________________________________ Quarters Ended March 31, 2016 337,787 (116,701) 621 (116,080) (116,041) $ June 30, 2016 338,533 246 2,987 3,233 3,229 $ September 30, 2016 331,846 28,865 1,381 30,246 30,234 $ December 31, 2016 327,281 10,703 (128,926) (118,223) (118,232) (0.15) $ (0.02) $ 0.00 $ 0.00 $ 0.01 0.00 (0.15) $ (0.02) $ 0.01 $ $ $ (0.01) (0.13) (0.14) $ $ $ $ (1) Represents revenue from continuing operations as presented on the statement of operations in accordance with GAAP. Substantially all of Cole Capital is presented as a discontinued operations and the Company’s remaining financial results are reported as a single segment for all periods presented. (2) The sum of the quarterly net loss per unit amounts may 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. F-67 VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2017 – (Continued) Note 21 – Subsequent Events The following events occurred subsequent to December 31, 2017: Cole Sale The Company closed on the Cole Capital Purchase and Sale Agreement on February 1, 2018. At closing, the Operating Partnership and Cole Capital entered into the Services Agreement, pursuant to which the Company will continue to provide certain services to Cole Capital and its subsidiaries and to the Cole REITs, including operational real estate support. The Company will continue to provide such services through March 31, 2019 (or, if later, the date of the last government filing other than a tax filing made by any of the Cole REITs with respect to its 2018 fiscal year) and will provide consulting and research services through December 31, 2023 as requested by Cole Capital. Real Estate Investment Activity From January 1, 2018 through February 20, 2018, the Company disposed of seven properties for an aggregate gross sales price of $57.8 million, of which the Company’s share was $57.4 million and an estimated gain of $8.5 million. In addition, the Company acquired six properties for an aggregate purchase price of $66.3 million, excluding capitalized external acquisition- related expenses. Common Stock Dividend On February 21, 2018, 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 2018 to stockholders of record as of March 30, 2018, which will be paid on April 16, 2018. An equivalent distribution by the Operating Partnership is applicable per OP unit. Preferred Stock Dividend On February 21, 2018, the Company’s board of directors declared a monthly cash dividend to holders of the Series F Preferred Stock for April 2018 through June 2018 with 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, 2018 - April 14, 2018 April 15, 2018 - May 14, 2018 May 15, 2018 - June 14, 2018 Record Date April 1, 2018 May 1, 2018 June 1, 2018 Payment Date April 16, 2018 May 15, 2018 June 15, 2018 F-68 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. SCHEDULE II – VALUATION AND QUALIFYING ACCOUNTS December 31, 2017 (in thousands) Schedule II – Valuation and Qualifying Accounts Description Year Ended December 31, 2017 Reserve for program development costs (1) Allowance for doubtful accounts and other reserves Unsecured note reserve Total Year Ended December 31, 2016 Reserve for program development costs (1) Allowance for doubtful accounts and other reserves Unsecured note reserve Total Year Ended December 31, 2015 Reserve for program development costs (1) Allowance for doubtful accounts and other reserves Unsecured note reserve Total _______________________________________________ (1) Classified as discontinued operations. Balance at Beginning of Year Additions Deductions Balance at End of Year $ 31,652 $ 9,328 7,576 15,300 54,528 6,956 — $ 16,284 $ $ (33,348) (2) $ (1,849) — $ (35,197) $ 7,632 12,683 (4) 15,300 35,615 $ 34,798 $ 26,191 6,595 15,300 56,693 2,318 — $ 28,509 $ (29,337) (3) $ (1,337) — $ (30,674) $ 31,652 7,576 15,300 54,528 13,109 2,475 — 15,584 $ 21,689 4,564 15,300 $ 41,553 $ $ — (444) — (444) $ $ 34,798 6,595 15,300 56,693 $ $ $ (2) Deductions related to the return of the Company's interest in two funds not yet in offering ($1.3 million) and the closing of CCPT V's primary offering ($32.0 million). (3) Deductions related to the closing of CCIT II’s primary offering. (4) Includes $1.0 million classified as discontinued operations. F- 69 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION December 31, 2017 (in thousands) Property City State Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction 24 Hour Fitness Woodlands TX $ — $ 2,690 $ 7,463 $ 194 $ 10,347 $ (2,251) 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 — 1,473 579 564 614 449 — 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-70 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 2,624 (373) 11/19/2012 2000 722 693 805 (163) 12/24/2012 1985 (176) 12/24/2012 1986 (182) 12/24/2012 1959 36,206 (6,388) 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 (234) 2/7/2014 2008 (150) 2/7/2014 1989 (169) 2/7/2014 2009 (168) 2/7/2014 2000 (205) 2/7/2014 2009 (1,091) 2/7/2014 2009 (189) 2/7/2014 1979 (244) 2/7/2014 2008 (215) 2/7/2014 1998 (161) 2/7/2014 1989 (116) 2/7/2014 2000 (255) 2/7/2014 2008 (176) 2/7/2014 1995 (195) 2/7/2014 1997 (166) 2/7/2014 1972 (108) 2/7/2014 1999 (212) 2/19/2014 2006 (546) 2/7/2014 2000 (237) 2/7/2014 1994 (208) 2/7/2014 2009 (247) 2/7/2014 1999 (178) 2/7/2014 1960 (247) 2/7/2014 2008 (174) 2/7/2014 1996 (259) 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 Waukegan Abuelo's Rogers Academy Sports Mobile TX TX TX TX TX TX TX TX TX TX TX VA IL 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 Advance Auto Parts Birmingham Birmingham Calera TN TX TX TX TX AL AL AL Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (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 (206) 2/7/2014 1977 (141) 2/7/2014 2008 (201) 2/7/2014 1989 (276) 2/7/2014 2007 (232) 2/7/2014 2008 (241) 2/7/2014 2008 (667) 2/7/2014 1981 (215) 2/7/2014 2009 (308) 2/7/2014 2008 (246) 2/7/2014 2007 (196) 2/7/2014 2009 (163) 2/7/2014 2006 (258) 2/7/2014 2009 (265) 2/7/2014 2007 (442) 2/7/2014 2008 (336) 2/7/2014 1988 4,734 21,319 601 26,654 (4,771) 11/5/2013 1980 825 1,311 1,869 7,290 1,900 4,965 998 — — — 2,906 1,902 2,109 5,044 4,216 — 2,072 3,212 2,779 — — — — 2,782 455 330 723 — — — — — — — — — — — — 6 — — 3,121 8,742 8,254 9,501 6,654 9,461 8,342 (598) 6/27/2013 2003 (1,474) 11/1/2013 2012 (1,432) 2/7/2014 2009 (2,678) 12/28/2012 2012 (1,937) 2/20/2013 2012 (1,353) 2/7/2014 2008 (203) 12/19/2016 2015 10,543 (1,673) 11/1/2013 2012 12,971 (1,538) 2/7/2014 1988 10,401 (1,481) 2/7/2014 2009 8,100 (1,007) 2/7/2014 2009 10,893 (1,497) 2/7/2014 2008 834 824 (102) 2/28/2013 1997 (135) 2/28/2013 1999 1,446 (204) 12/27/2012 2008 2,296 7,431 6,385 7,601 5,656 6,555 6,440 8,434 8,755 8,329 5,321 8,111 373 494 723 F-71 Property City State Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (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 Dothan Enterprise Opelika Brooklyn AL AL AL CT — — — — 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 Louisville KY KY KY — — — — — — — 760 — — — 738 — — — — — — 1,030 — — — — — — 740 379 210 140 113 352 209 251 337 100 182 193 200 511 429 377 195 194 272 186 400 550 833 510 94 130 104 336 (7) (6) — — — — (1) (24) — — (1) (30) — — — — — — — — — — 236 — — — — — — — (5) — 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 1,289 F-72 645 694 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 1,625 (91) 12/31/2012 1997 (118) 12/31/2012 1995 (306) 4/24/2013 2013 (184) 11/7/2014 2006 (343) 2/7/2014 2007 (408) 2/7/2014 2008 (177) 12/31/2012 1995 (89) 12/31/2012 1993 (127) 12/31/2012 1998 (121) 12/31/2012 1994 (137) 12/31/2012 1994 (103) 12/31/2012 1997 (408) 3/29/2012 2007 (275) 2/7/2014 2007 (186) 6/5/2013 2004 (123) 2/28/2013 1998 (102) 2/28/2013 1998 (242) 2/7/2014 2010 (272) 2/7/2014 2007 (315) 2/7/2014 2007 (207) 4/30/2013 2006 (290) 4/15/2013 2006 (309) 12/10/2012 2005 (209) 12/10/2012 2005 (297) 2/7/2014 2009 (261) 2/7/2014 2008 (202) 2/7/2014 2007 (250) 2/7/2014 2007 (238) 12/10/2012 2007 (342) 8/22/2012 2010 (263) 12/10/2012 2005 (248) 2/7/2014 2009 Property City State Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (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 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 Massillon NJ NJ OH OH OH OH OH OH OH OH — — — — — — 657 830 — — — — — — — — — — — — — — — — 730 639 — 706 — — 647 — 249 122 482 117 123 133 368 439 210 348 549 422 75 402 281 645 258 399 723 320 251 348 750 446 234 443 470 502 157 218 131 218 996 490 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 1,987 F-73 — 84 — (9) (6) (3) — — — — — — 80 — — — — — — — — — — — — — — — — — — — 1,245 696 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 2,205 (263) 4/15/2013 2006 (129) 5/21/2013 2000 (342) 2/7/2014 2008 (206) 11/23/2011 2002 (217) 11/23/2011 2002 (166) 11/23/2011 2002 (244) 2/7/2014 2008 (283) 2/7/2014 2008 (199) 12/12/2011 2003 (276) 4/15/2013 2007 (280) 2/7/2014 2007 (313) 2/7/2014 2007 (215) 11/23/2011 2003 (310) 2/7/2014 2008 (227) 5/27/2014 2009 (335) 2/7/2014 2008 (109) 2/20/2014 1998 (237) 2/7/2014 2012 (180) 2/7/2014 2001 (187) 7/16/2013 2004 (293) 8/9/2012 2010 (194) 2/21/2014 2005 (510) 8/22/2012 2010 (528) 6/20/2012 2007 (258) 2/7/2014 2008 (251) 2/7/2014 2008 (273) 2/7/2014 2007 (256) 2/7/2014 2008 (120) 6/13/2013 1987 (254) 8/9/2012 1984 (282) 2/7/2014 2008 (392) 2/7/2014 2007 Initial Costs (1) Encumbrances at December 31, 2017 State Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property 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 City Salem Springfield Toledo Twinsburg Van Wert Vermilion Warren OH OH OH OH OH OH OH 660 — 619 619 — — — — Oklahoma City OK Sapulpa OK 704 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 Webster PA PA SC SC SC SC TN TX TX TX TX TX TX TX TX TX TX TX TX TX TX TX — — — — — — — — — — 800 800 — — — — — — — — — — — 267 461 116 486 33 337 83 208 362 553 99 207 395 131 210 506 360 169 295 343 248 837 285 225 189 420 327 419 265 382 388 385 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 1,452 F-74 — — — — — — (2) — — — — — — — — 44 — (3) — — — — — — — — — — — — — — 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 1,837 (227) 2/7/2014 2009 (303) 12/31/2012 2005 (267) 2/7/2014 2009 (205) 2/7/2014 2009 (161) 6/13/2013 1995 (228) 2/7/2014 2006 (223) 4/12/2012 2003 (343) 8/9/2012 2007 (245) 2/7/2014 2007 (227) 2/28/2013 1997 (227) 6/3/2013 2003 (331) 12/12/2012 2010 (273) 6/20/2012 2007 (220) 6/27/2012 2008 (191) 3/9/2012 1995 (182) 2/7/2014 1995 (239) 11/29/2012 2006 (274) 10/18/2012 2006 (287) 2/7/2014 2008 (326) 9/30/2011 2006 (314) 9/30/2011 2006 (199) 8/21/2012 2007 (269) 2/7/2014 2006 (246) 2/7/2014 2008 (316) 2/7/2014 2008 (269) 2/7/2014 2007 (245) 2/7/2014 2008 (267) 2/7/2014 2009 (243) 2/7/2014 2008 (337) 7/6/2012 2008 (290) 2/7/2014 2007 (277) 2/7/2014 2008 Property City State Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction CA GA AZ AZ AZ AZ AZ AZ AZ CO CO CO LA Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Advance Auto Parts Aetna Life Insurance AGCO Albertson's Appleton 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 Albertson's Baton Rouge LA Albertson's Baton Rouge LA Albertson's Baton Rouge LA Albertson's Bossier City Albertson's Lafayette LA LA Albertson's Albuquerque NM Albertson's Albuquerque NM Albertson's Clovis NM Albertson's Farmington NM Albertson's Las Cruces Albertson's Los Lunas Albertson's Silver City NM NM NM — — 939 — — — — 498 353 299 569 610 309 1,228 824 1,695 465 1,473 928 — — — — — — 1,726 1,177 1,994 1,034 2,083 1,237 (248) 2/7/2014 2007 (203) 8/26/2013 2004 (334) 2/7/2014 2007 (125) 3/13/2013 2004 (289) 2/7/2014 2008 (262) 12/28/2012 2007 3,405 22,343 (116) 25,632 (1,472) 11/5/2013 1969 10 — — — — — — — — — — — — — — — — — — — — — — — 18,355 (2,474) 2/7/2014 1999 6,671 6,089 7,084 (1,229) 2/7/2014 2003 (910) 2/7/2014 1997 (1,008) 2/7/2014 1998 10,815 (1,743) 2/7/2014 1991 10,414 (1,699) 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 (813) 2/7/2014 1994 (1,432) 2/7/2014 2003 (1,136) 2/7/2014 2002 (788) 2/7/2014 1993 (1,443) 2/7/2014 1996 (1,374) 2/7/2014 1990 (1,588) 2/7/2014 1991 (1,284) 2/7/2014 1992 (1,791) 2/7/2014 1985 (1,129) 2/7/2014 1988 (1,828) 2/7/2014 2000 (1,111) 2/7/2014 1997 (1,046) 2/7/2014 1978 (1,253) 2/7/2014 1984 (707) 2/7/2014 2002 (1,586) 2/7/2014 1997 (1,273) 2/7/2014 1991 (1,099) 2/7/2014 1982 8,600 3,503 14,842 — — — — — — — — — — — — — — — — — — — — — — — 1,275 1,944 2,456 2,872 2,710 1,642 1,574 2,058 3,520 1,288 1,423 1,711 1,681 1,932 1,949 1,556 2,834 2,950 769 1,442 1,588 1,105 591 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-75 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 Amazon Holbrook Houston 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 SC TN TN CA TX PA TX Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — 1,187 1,714 1,375 2,146 1,833 1,833 1,174 1,002 947 1,820 290 930 32 1,659 3,112 6,373 6,560 6,447 4,678 7,311 4,528 6,255 9,885 8,867 5,771 — — — — — — — — — — 3,647 (1,300) 3,116 96 — — 13,161 (7,475) 53,103 38,500 2,678 50,880 40,800 1,995 54,332 — 7,143 8,730 — — — 2,524 30,398 117 591 751 424 1,787 379 14,260 23,261 7,560 8,274 7,822 6,824 9,144 6,361 7,429 (1,389) 2/7/2014 1984 (1,429) 2/7/2014 2002 (1,458) 2/7/2014 1978 (1,075) 2/7/2014 2000 (1,571) 2/7/2014 2004 (1,007) 2/7/2014 2002 (1,319) 2/7/2014 1988 10,887 (2,120) 2/7/2014 1984 9,814 7,591 2,637 4,046 128 7,345 (1,879) 2/7/2014 1985 (1,280) 2/7/2014 2001 (244) 6/27/2013 1995 (797) 6/27/2013 1995 (24) 6/27/2013 1981 — 6/12/2014 2009 56,215 (9,907) 2/7/2014 2012 53,558 (9,387) 2/7/2014 2011 56,327 (10,267) 2/7/2014 2011 15,873 (2,640) 1/24/2013 1966 32,922 (6,309) 11/5/2013 1998 1,904 970 (299) 6/12/2014 2010 (67) 6/12/2014 1979 15,011 (3,412) 1/25/2013 2000 23,685 (130) 10/24/2017 2017 130,113 (33,917) 11/16/2012 1998 2,277 2,887 3,319 3,720 1,924 2,514 2,629 2,495 (322) 3/28/2014 1981 (459) 7/31/2013 1993 (541) 8/30/2013 1995 (592) 7/31/2013 1999 (356) 2/7/2014 2006 (467) 7/31/2013 1996 (523) 7/31/2013 1998 (529) 7/31/2013 1995 — — — — — — — — — — — — — — — — — — Ameriprise Ashwaubenon WI 10,998 Amesbury Truth Statesville NC — 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-76 Property City State Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (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-77 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 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 (501) 7/31/2013 1994 (593) 7/31/2013 1995 (460) 7/31/2013 1993 (587) 8/30/2013 1998 (764) 7/31/2013 1998 (532) 8/30/2013 1994 (985) 7/31/2013 1994 (950) 6/27/2013 1997 (465) 7/31/2013 2000 (654) 7/31/2013 2001 (1,198) 7/31/2013 2007 (787) 7/31/2013 2000 (632) 7/31/2013 1997 (965) 7/31/2013 2000 (929) 7/31/2013 1995 (835) 7/31/2013 1998 (747) 6/27/2013 2001 (911) 7/31/2013 2006 (927) 7/31/2013 1994 (953) 7/31/2013 1993 (853) 6/27/2013 1998 (868) 7/31/2013 2000 (690) 7/31/2013 1999 (618) 7/31/2013 1987 (380) 7/31/2013 1998 (703) 7/31/2013 2004 (467) 7/31/2013 1999 (655) 7/31/2013 1994 (303) 6/27/2013 1995 (549) 6/27/2013 1995 (300) 6/27/2013 1995 (382) 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, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (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 (1,527) — — 2,201 2,926 F-78 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 1,239 2,516 3,489 (324) 6/27/2013 1995 (467) 7/31/2013 1998 (654) 8/30/2013 2003 (773) 7/31/2013 2000 (487) 7/31/2013 1998 (372) 2/7/2014 1998 (330) 6/27/2013 1995 (412) 2/7/2014 1998 (408) 6/27/2013 1998 (413) 7/31/2013 1994 (558) 2/7/2014 1995 (549) 2/7/2014 1994 (528) 2/7/2014 1999 (467) 2/7/2014 1994 (536) 2/7/2014 1997 (203) 6/23/2014 1990 (376) 2/7/2014 2005 (445) 6/27/2013 2000 (635) 8/30/2013 2000 (902) 7/31/2013 2002 (969) 7/31/2013 1995 (609) 7/31/2013 1998 (218) 6/27/2013 1992 (558) 7/31/2013 1997 (666) 8/30/2013 2004 (438) 7/31/2013 1993 (436) 8/30/2013 2000 (550) 7/31/2013 2002 (499) 2/7/2014 1995 (15) 6/27/2013 1995 (489) 2/7/2014 2005 (762) 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 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 Avon IN Encumbrances at December 31, 2017 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — Initial Costs (1) Land 898 1,114 566 732 696 848 564 1,112 791 718 981 527 40 142 310 550 559 190 464 297 420 251 381 1,207 370 370 583 430 293 370 911 500 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 — 618 1,465 697 552 1,256 585 571 987 1,200 1,692 840 755 293 1,561 764 812 F-79 Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — 423 — — — — — — — — — — — — — — — — — — — — — 2,956 3,102 2,052 2,528 3,600 1,281 1,487 3,176 2,637 2,393 5,326 928 927 645 1,296 550 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 1,312 (536) 6/27/2013 2006 (518) 6/27/2013 1993 (387) 6/27/2013 1995 (468) 6/27/2013 2003 (660) 2/7/2014 1990 (236) 2/7/2014 2006 (307) 2/7/2014 2000 (548) 7/31/2013 2003 (481) 8/30/2013 2001 (444) 7/31/2013 2001 (785) 5/19/2014 1993 (101) 6/27/2013 1999 (219) 6/27/2013 1995 (127) 6/27/2013 1995 (244) 6/27/2013 1995 — 6/27/2013 1999 (155) 6/27/2013 1995 (362) 6/27/2013 1995 (164) 7/31/2013 1985 (130) 7/31/2013 1984 (310) 6/27/2013 1995 (138) 7/31/2013 1985 (134) 7/31/2013 1984 (232) 7/31/2013 1984 (297) 6/27/2013 1995 (418) 6/27/2013 1995 (211) 6/27/2013 1984 (190) 6/27/2013 1984 (69) 7/31/2013 1985 (386) 6/27/2013 1995 (192) 6/27/2013 1999 (201) 6/27/2013 1995 Property City State Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction 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 Fort Wayne Indianapolis Indianapolis New Albany New Albany Scottsburg Winchester Kansas City Salina Topeka IN IN IN IN IN IN IN KS KS KS Hopkinsville KY Louisville KY Alma Chesterfield Davison Flint Flint Grandville Midland Port Huron Saginaw South Haven Walker Waterford Wyoming Corinth Fayetteville Jonesville Kernersville Rochester Columbus Willard MI MI MI MI MI MI MI MI MI MI MI MI MI MS NC NC NC NY OH OH — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 529 530 370 456 325 526 341 280 540 270 432 336 380 210 420 110 230 1,133 340 210 310 260 360 180 1,513 753 420 350 280 128 400 230 647 1,236 1,130 470 465 445 511 364 300 433 528 625 408 841 631 1,422 1,428 755 753 868 1,110 573 1,002 962 648 429 2,001 908 774 384 1,155 599 F-80 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — (262) — — 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 1,078 1,420 833 1,362 1,142 2,161 1,182 2,421 1,258 1,054 250 1,555 829 (152) 7/31/2013 1987 (305) 6/27/2013 1995 (279) 6/27/2013 1995 (118) 6/27/2013 2005 (117) 6/27/2013 1995 (112) 6/27/2013 1989 (120) 7/31/2013 1988 (90) 6/27/2013 1995 (74) 6/27/2013 1995 (107) 6/27/2013 1995 (124) 7/31/2013 1985 (204) 5/30/2013 1979 (101) 6/27/2013 1995 (208) 6/27/2013 1995 (156) 6/27/2013 1995 (351) 6/27/2013 1995 (353) 6/27/2013 1995 (178) 7/31/2013 1982 (186) 6/27/2013 1995 (214) 6/27/2013 1995 (274) 6/27/2013 1995 (142) 6/27/2013 1995 (247) 6/27/2013 1995 (238) 6/27/2013 1995 (152) 7/31/2013 1970 (108) 6/27/2013 1984 (494) 6/27/2013 1995 (224) 6/27/2013 1995 (191) 6/27/2013 1995 — 7/31/2013 1985 (285) 6/27/2013 1995 (148) 6/27/2013 1995 Property City State Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Arby's Arby's Arby's Arby's Arby's Arby's Arby's Allentown Carlisle Erie Hanover Chattanooga Memphis Amarillo Art Van Furniture Avon Art Van Furniture Mentor Art Van Furniture Middleburg Heights PA PA PA PA TN TN TX OH OH OH Art Van Furniture North Canton OH Art Van Furniture Hanover Art Van Furniture Johnstown Art Van Furniture Lancaster PA PA PA Ashley Furniture Jeffersontown KY At Home Stockbridge At Home & Gabes Florence GA 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 TX GA IL IL LA MS OH OH OH OH OH SD TN PA — — — — — — — — — — — — — — — — — — 600 200 188 400 201 449 260 925 1,090 1,440 545 703 386 2,156 1,966 2,057 6,794 2,364 1,652 472 552 921 469 835 627 10,031 9,582 5,529 8,636 4,108 2,582 6,030 2,368 8,967 5,968 9,305 11,123 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 — 1,047 1,534 1,193 833 838 1,283 1,156 1,219 812 969 1,270 1,753 F-81 — — (470) — — — — — — — — — — — — — — 548 714 — — — — — — — — — — — — — 2,252 (408) 6/27/2013 1995 672 270 1,321 670 1,284 887 10,956 10,672 6,969 9,181 4,811 2,968 8,186 4,334 (117) 6/27/2013 1995 — 6/27/2013 1966 (228) 6/27/2013 1995 (110) 7/31/2013 1998 (196) 7/31/2013 1998 (155) 6/27/2013 1995 (37) 11/22/2017 2016 (35) 11/22/2017 2009 (20) 11/22/2017 1973 (32) 11/22/2017 2007 (15) 11/22/2017 1996 (10) 11/22/2017 1969 (7) 11/22/2017 1978 (450) 9/26/2014 1970 11,024 (1,900) 2/7/2014 1998 12,762 (372) 12/14/2016 1992 12,217 (1,813) 9/24/2014 1989 33,723 (6,484) 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 — 6/27/2013 1987 (277) 4/30/2013 1995 (321) 5/19/2014 2006 (248) 2/7/2014 2007 (154) 2/7/2014 2003 (172) 2/7/2014 2008 (259) 2/7/2014 2008 (236) 2/7/2014 2008 (244) 2/7/2014 2009 (165) 2/7/2014 2008 (191) 2/7/2014 2008 (256) 2/7/2014 2009 (218) 7/28/2014 2004 Property City State Bahama Breeze Memphis Bandana's Bar-B- Q Restaurant Bandana's Bar-B- Q Restaurant Bandana's Bar-B- Q Restaurant Collinsville Arnold Fenton TN IL MO MO Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — 2,370 1,313 340 460 470 627 433 314 — — — — 3,683 (140) 7/28/2014 1998 967 893 784 (160) 6/27/2013 1995 (111) 6/27/2013 1995 (82) 8/30/2013 1986 F-82 Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction 2,195 212 2,919 (514) 1/8/2014 1980 19,600 2,733 31,483 — 2,033 4,809 San Antonio TX 9,313 1,666 19,092 40,278 2,761 52,454 Property City State Bank of America Merced Bank of America Asheville Bank of America Charlotte Banner Life Insurance Urbana Beall's Lakeland CA NC NC MD FL Becton, Dickinson and Company Bed Bath & Beyond Bed Bath & Beyond Stockton Windsor Benihana Anchorage CA VA 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 — — — 512 383 62 — — — — — — — — — — 3,032 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 Findlay Best Buy BHC Marketing Kenosha The Woodlands Big Lots Chester Big O Tires Phoenix MS MS NC OH WI TX VA AZ — — — — — — — — — — — — — 782 2,715 1,724 665 549 836 1,568 2,045 484 1,818 3,313 1,925 4,724 335 206 195 642 59,649 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 — — — 18 71 — — — — — — — — — — — — — — — — 593 — — — — 578 704 (45) 1/8/2014 1993 (145) 1/8/2014 1983 34,216 (5,661) 2/7/2014 2011 6,860 (878) 7/16/2014 2006 20,829 (3,845) 11/5/2013 2008 55,215 (16,726) 8/17/2012 2003 62,681 (63) 12/20/2017 2001 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 6,363 2,418 9,788 (460) 2/7/2014 1998 (158) 2/7/2014 1972 (489) 2/7/2014 1976 (180) 2/7/2014 2003 (357) 2/7/2014 1992 (205) 2/7/2014 2001 (575) 2/7/2014 2012 (631) 2/7/2014 2006 (368) 2/7/2014 1975 (1,258) 2/7/2014 2003 (1,166) 2/7/2014 1993 (1,245) 2/7/2014 1991 (1,009) 2/7/2014 2009 (958) 2/7/2014 2011 (1,067) 2/7/2014 2010 (865) 2/7/2014 2001 (983) 2/7/2014 2007 (393) 5/19/2014 2005 (1,687) 2/7/2014 1994 37,568 2,346 43,227 (903) 2/15/2017 1996 — — 169 — 7,428 (1,162) 2/7/2014 2008 45,056 (7,944) 11/5/2013 2009 3,877 1,573 (805) 2/24/2014 2013 (265) 2/7/2014 2010 5,503 40,332 3,373 1,367 F-83 Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction 1,265 4,212 8,594 — — — 1,581 4,745 (392) 6/1/2012 2006 (898) 2/7/2014 1999 12,687 (1,845) 2/7/2014 2003 10,931 (15) 16,485 (2,220) 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 (2,903) 2/7/2014 2003 12,765 (1,614) 2/7/2014 1997 16,170 (2,383) 2/7/2014 1997 24,929 (3,609) 2/7/2014 1993 41,983 (5,686) 2/7/2014 2006 17,078 (2,027) 2/7/2014 2003 20,376 (2,724) 2/7/2014 2001 19,184 (2,707) 2/7/2014 1995 29,670 (4,163) 2/7/2014 1993 19,048 (2,202) 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 8,668 422 9,546 (2,989) 2/20/2013 1998 13,621 3,400 16,782 — — — — — — — — — — — — — — — — 620 480 151 572 869 717 430 980 550 163 1,147 563 601 626 366 469 2,467 809 151 868 810 1,142 708 1,305 860 1,557 1,088 1,706 1,529 1,546 1,631 1,657 F-84 — — — (106) — — — — — — — — — — — — — 20,182 (3,182) 2/7/2014 1996 3,087 1,289 196 1,440 1,679 1,859 1,138 2,285 1,410 1,720 2,235 2,269 2,130 2,172 1,997 2,126 (631) 6/27/2013 1995 (207) 6/27/2013 1995 — 6/27/2013 1979 (226) 6/27/2013 1999 (13) 6/26/2017 1996 (21) 6/26/2017 1993 (13) 6/26/2017 2002 (22) 6/26/2017 2005 (15) 6/26/2017 2001 (27) 6/26/2017 1987 (20) 6/26/2017 1992 (32) 6/26/2017 2003 (29) 6/26/2017 2002 (28) 6/26/2017 1998 (30) 6/26/2017 2000 (30) 6/26/2017 2008 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 Evans Newark Bob Evans East Peoria Bob Evans Indianapolis Bob Evans Jackson Bob Evans Muskegon Bob Evans Amherst Bob Evans Brunswick Bob Evans Cincinnati Bob Evans Cincinnati Bob Evans Lancaster Bob Evans Lima Bob Evans Marion TX DE IL IN MI MI OH OH OH OH OH OH OH Property City State Bob Evans Medina Bob Evans Mentor OH OH Bob Evans Mount Vernon OH Bob Evans Bob Evans Stow Troy OH OH Bob Evans Wapakoneta OH Bob Evans Willoughby Bob Evans Xenia Bob Evans Phoenixville Bob Evans Wilkes-Barre 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 Bojangles Taylorsville Bojangles Troutman Bojangles Chapin Bojangles Clinton Bojangles Fountain Inn Bojangles Greenwood Bojangles Moncks Corner Bojangles Walterboro Bonefish Grill Lakeland OH OH PA PA MA GA NC NC NC NC NC NC NC NC NC NC NC NC SC SC SC SC SC SC FL Bonefish Grill Independence OH Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 496 626 343 418 512 253 675 337 495 373 2,840 645 247 278 1,013 251 749 655 566 442 505 646 436 718 577 397 287 440 505 454 750 895 1,050 929 1,338 1,416 1,255 1,479 1,262 1,433 438 714 6,826 1,198 986 833 1,881 1,004 1,789 1,217 1,321 1,032 1,179 1,937 1,108 1,077 1,071 926 1,150 1,320 1,179 1,363 1,897 2,252 F-85 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 1,546 1,555 1,681 1,834 1,767 1,732 1,937 1,770 933 1,087 9,666 1,843 1,233 1,111 2,894 1,255 2,538 1,872 1,887 1,474 1,684 2,583 1,544 1,795 1,648 1,323 1,437 1,760 1,684 1,817 2,647 3,147 (20) 6/26/2017 2000 (17) 6/26/2017 1999 (25) 6/26/2017 2011 (27) 6/26/2017 2002 (23) 6/26/2017 1992 (28) 6/26/2017 2001 (23) 6/26/2017 2005 (27) 6/26/2017 1988 (7) 6/26/2017 1999 (12) 6/26/2017 2003 (1,689) 11/5/2013 1965 (439) 7/30/2012 2011 (351) 11/29/2012 2010 (305) 7/27/2012 1980 (442) 7/31/2013 1997 (368) 7/30/2012 2010 (450) 6/27/2013 1973 (445) 7/27/2012 2011 (484) 7/27/2012 2010 (378) 7/27/2012 2011 (431) 7/30/2012 2011 (456) 7/31/2013 1988 (279) 6/27/2013 1987 (319) 10/10/2013 2012 (389) 8/9/2012 2009 (339) 7/27/2012 2009 (341) 10/10/2013 2012 (453) 2/28/2013 1995 (420) 11/29/2012 2010 (485) 11/29/2012 2010 (446) 2/7/2014 2003 (549) 2/7/2014 2006 Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Bonefish Grill Gainesville VA Boston Market Indianapolis Boston Market Indianapolis Boston Market Fayetteville Boston Market Raleigh IN IN NC NC — — — — — 751 930 410 460 280 Brick House Tavern & Tap W. Windsor NJ 1,043 1,307 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 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 IA NC NC IL OH PA TX AK AL AL AL AL AL AL AL AL AL AL AZ AZ CO FL FL FL FL — — — — — — — — — — — — — — — — — — — — — — — — — — 651 40 312 230 450 370 815 1,100 427 181 181 307 628 594 437 172 325 214 461 260 300 872 981 362 683 598 — 350 — — — — — (8) — — — — — — — — — — — — — — — — — — — — — — — — 1,325 — 1,070 1,520 1,015 1,498 1,954 379 728 654 1,272 887 815 8,433 489 1,025 723 920 1,167 1,104 655 689 604 857 1,383 1,041 1,307 1,242 591 1,087 412 399 F-86 2,076 1,280 1,480 1,980 1,295 2,805 2,605 411 1,040 884 1,722 1,257 1,630 9,533 916 1,206 904 1,227 1,795 1,698 1,092 861 929 1,071 1,844 1,301 1,607 2,114 1,572 1,449 1,095 997 (465) 2/7/2014 2004 (46) 6/27/2013 1995 (264) 6/27/2013 1995 (376) 6/27/2013 1995 (251) 6/27/2013 1995 (283) 2/7/2014 1998 (524) 5/31/2013 2008 (94) 6/27/2013 1995 (171) 7/31/2013 1926 (162) 6/27/2013 1995 (325) 6/27/2013 1995 (227) 6/27/2013 1995 (216) 7/31/2013 1999 (1,878) 11/5/2013 2005 (123) 6/27/2013 1982 (241) 7/31/2013 2000 (170) 7/31/2013 2000 (216) 7/31/2013 1993 (274) 7/31/2013 1983 (260) 7/31/2013 1999 (154) 7/31/2013 1985 (162) 7/31/2013 1997 (142) 7/31/2013 1997 (202) 7/31/2013 1994 (325) 7/31/2013 1984 (245) 7/31/2013 1994 (323) 6/27/2013 1995 (313) 6/27/2013 1994 (149) 6/27/2013 1980 (256) 7/31/2013 1989 (104) 6/27/2013 1984 (94) 7/31/2013 1994 Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State 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 Burger King Maywood Burger King Springfield Burger King Gary Burger King Cut Off Burger King Gonzales FL FL FL FL GA GA GA GA GA GA GA GA GA GA GA GA GA IA IA IA IA IA IL IL IN LA LA Burger King Lake Charles LA Burger King Lake Charles LA Burger King Metairie Burger King Opelousas Burger King Raceland LA LA LA — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 319 324 720 843 635 1,128 795 501 380 693 347 245 170 909 495 748 564 1,160 557 334 313 607 860 354 544 726 380 456 610 728 964 356 956 971 720 454 865 977 943 1,219 499 2,080 1,042 981 2,175 1,350 1,156 876 376 949 680 1,002 582 911 — — — — — — — — — — — — — — — — — — — — — — 1,051 (357) — — — — — — — — — 677 606 1,088 465 456 746 392 964 533 F-87 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 1,554 1,031 1,150 1,814 845 912 1,356 1,120 1,928 889 (225) 7/31/2013 1998 (228) 7/31/2013 1995 (169) 7/31/2013 1998 (107) 7/31/2013 1980 (218) 6/27/2013 1998 (246) 6/27/2013 1993 (237) 6/27/2013 1997 (307) 6/27/2013 2001 (123) 6/27/2013 1995 (489) 7/31/2013 1986 (245) 7/31/2013 1998 (231) 7/31/2013 1997 (537) 6/27/2013 1995 (340) 6/27/2013 1998 (272) 7/31/2013 1998 (221) 6/27/2013 1988 (88) 7/31/2013 1987 (223) 7/31/2013 1987 (160) 7/31/2013 1997 (236) 7/31/2013 1988 (137) 7/31/2013 1988 (214) 7/31/2013 1997 (119) 7/31/2013 2003 (170) 6/27/2013 1995 (152) 6/27/2013 1987 (256) 7/31/2013 1990 (109) 7/31/2013 1990 (107) 7/31/2013 1980 (175) 7/31/2013 1990 (92) 7/31/2013 1990 (227) 7/31/2013 1978 (125) 7/31/2013 2000 Property City State Burger King Amesbury Burger King Springfield Burger King Caribou Burger King Belding Burger King Detroit 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 Burger King Greenwood Burger King Grenada MS MS MS MS MS 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 Durham Burger King Wilmington NC NC NC NC NC NC Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 835 983 770 221 614 490 260 346 420 451 32 640 341 305 248 328 444 649 865 688 573 351 692 536 402 489 728 353 646 494 170 573 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 1,038 805 939 909 595 797 646 801 352 870 F-88 — — — — — — — — — — — — (222) — — — — — — — — — — — — — — — — — — — 2,052 1,499 1,210 632 945 1,035 1,040 1,153 1,127 1,127 648 1,210 631 1,016 993 936 1,480 2,162 1,730 2,294 1,910 1,171 1,730 1,341 1,341 1,398 1,323 1,150 1,292 1,295 522 1,443 (306) 6/27/2013 1977 (130) 6/27/2013 1974 (109) 6/27/2013 1995 (97) 7/31/2013 1994 (78) 7/31/2013 1988 (135) 6/27/2013 1995 (193) 6/27/2013 1995 (190) 7/31/2013 1985 (175) 6/27/2013 1995 (159) 7/31/2013 1988 (145) 7/31/2013 1999 (141) 6/27/2013 1995 (10) 7/31/2013 1994 (167) 7/31/2013 1973 (175) 7/31/2013 1987 (143) 7/31/2013 1990 (244) 7/31/2013 1984 (381) 6/27/2013 1981 (204) 7/31/2013 1988 (378) 7/31/2013 1985 (314) 7/31/2013 2004 (193) 7/31/2013 1993 (244) 7/31/2013 1988 (189) 7/31/2013 1989 (221) 7/31/2013 1993 (214) 7/31/2013 1993 (140) 7/31/2013 1982 (201) 6/27/2013 1999 (162) 6/27/2013 2000 (202) 6/27/2013 1999 (87) 6/27/2013 1995 (219) 6/27/2013 1999 Encumbrances at December 31, 2017 State Property Burger King City Blair Burger King Wahoo Burger King Dover Burger King Nashua Burger King Edison Burger King Elko Burger King Albany NE NE NH NH NJ NV NY Burger King Central Square NY Burger King Cohoes Burger King Hamburg Burger King Irondequoit NY NY NY Burger King Montgomery NY Burger King Schenectady NY Burger King Syracuse Burger King Dayton Burger King Mansfield Burger King New Philadelphia Burger King Willoughby Burger King Ardmore NY OH OH OH OH OK — — — — — — — — — — — — — — — — — — — Initial Costs (1) Land 272 196 1,159 655 480 260 330 500 270 403 988 480 380 606 569 191 419 410 270 Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Buildings, Fixtures and Improvements Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — 1,359 1,305 2,111 1,310 1,555 1,261 1,180 1,689 833 786 1,647 1,522 1,316 1,212 1,035 957 1,198 1,415 1,293 (256) 7/31/2013 1987 (261) 7/31/2013 1990 (240) 6/27/2013 1970 (154) 7/31/2013 2008 (266) 6/27/2013 1995 (247) 6/27/2013 1995 (210) 6/27/2013 1995 (294) 6/27/2013 1995 (139) 6/27/2013 1995 (96) 6/27/2013 1974 (155) 7/31/2013 1980 (258) 6/27/2013 1995 (231) 6/27/2013 1995 (142) 7/31/2013 1986 (110) 7/31/2013 1990 (180) 7/31/2013 1985 (183) 7/31/2013 1986 (248) 6/27/2013 1995 (253) 6/27/2013 1995 1,087 1,109 952 655 1,075 1,001 850 1,189 563 383 659 1,042 936 606 466 766 779 1,005 1,023 F-89 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 WI WI WI Burger King Bluefield WV Burlington West Valley City Cabela's Rogers Cabela's Thornton Cabela's Grandville UT AR CO MI Cabela's Oklahoma City OK Cabela's Lacey 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 Alpharetta Atlanta WA ND PA TX TX NJ AZ GA GA Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (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 2,331 3,419 3,677 3,269 3,383 3,393 72 129 115 144 2,767 2,285 1,279 2,307 886 412 905 880 571 1,451 1,050 1,591 463 999 1,026 782 1,628 1,300 885 606 718 1,163 5,821 17,605 19,099 20,328 11,590 20,158 3,735 2,542 1,886 2,908 38,018 1,480 3,249 1,857 F-90 — — 14 — — — — — — (517) — 300 — — — — — — — — — — — — — — — — — — — — 1,236 1,031 1,309 1,250 991 1,707 1,500 2,331 662 1,148 1,710 1,503 2,137 1,944 1,117 866 1,047 1,373 8,152 (219) 6/27/2013 1995 (97) 7/31/2013 1985 (12) 6/27/2013 1995 (217) 6/27/2013 1995 (141) 6/27/2013 1995 (341) 7/31/2013 1985 (247) 7/31/2013 1985 (393) 6/27/2013 1995 (109) 7/31/2013 1984 (102) 6/27/2013 1998 (241) 7/31/2013 2002 (190) 7/31/2013 1984 (410) 6/27/2013 1997 (327) 6/27/2013 1986 (223) 6/27/2013 1986 (143) 7/31/2013 1986 (181) 6/27/2013 1987 (287) 6/27/2013 1995 (29) 11/30/2017 2017 21,024 (148) 9/25/2017 2012 22,776 (149) 9/25/2017 2012 23,597 (165) 9/25/2017 2013 14,973 (92) 9/25/2017 2015 23,551 (146) 9/25/2017 2007 3,807 2,671 2,001 3,052 (553) 7/24/2014 2011 (400) 6/12/2014 2012 (296) 6/12/2014 2011 (462) 6/12/2014 2011 40,785 (7,532) 11/5/2013 2004 3,765 4,528 4,164 (382) 2/7/2014 1994 (752) 2/7/2014 1994 (467) 2/7/2014 1993 Property City State Encumbrances at December 31, 2017 California Pizza Kitchen California Pizza Kitchen Schaumburg IL Grapevine Initial Costs (1) Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Buildings, Fixtures and Improvements Accumulated Depreciation (3) (5) Date Acquired Date of Construction Captain D's Statesboro Captain D's Florence Captain D's Southaven Captain D's Memphis Captain D's Duncanville Cargill Blair 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 Township Carrabba's Columbia TX GA KY MS TN TX NE OK NV TX AZ CO FL GA MD OH OH SC Carrabba's Johnson City TN Cashland Celina OH Castle Dental Murfreesboro TN Cequent Trailer Products Mosinee Charleston's Carmel Checkers Huntsville Checkers Hollywood Checkers Jacksonville Checkers Lauderhill Checkers Miami Checkers Orlando Checkers Plantation Checkers Tampa WI IN AL FL FL FL FL FL FL FL Land 1,180 1,544 350 248 270 230 295 627 77 — — — — — — — 2,437 — — 3,179 2,250 401 325 564 338 246 4,989 513 8,542 10,396 9,900 5,461 16,940 — — — — — — — — — — — — — — — — — — — — — 1,350 1,083 1,650 836 1,429 1,187 906 1,159 771 108 256 1,416 140 689 160 731 280 621 1,033 220 736 1,847 1,400 2,085 2,881 1,036 2,212 1,859 2,164 2,536 132 256 3,259 3,016 — 2,220 1,096 1,951 — — 1,461 — F-91 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 4,359 3,794 751 573 834 568 541 5,616 590 (738) 2/7/2014 1995 (533) 2/7/2014 1994 (99) 6/27/2013 1995 (82) 6/27/2013 1981 (139) 6/27/2013 1995 (84) 6/27/2013 1995 (62) 6/27/2013 1982 (859) 2/7/2014 2009 (129) 6/27/2013 1980 18,938 (2,255) 2/7/2014 2002 22,401 (3,305) 2/7/2014 2004 3,197 2,483 3,735 3,717 2,465 3,399 2,765 3,323 3,307 240 512 4,675 3,156 689 2,380 1,827 2,231 621 1,033 1,681 736 (317) 2/7/2014 2000 (324) 2/7/2014 2000 (502) 2/7/2014 1994 (675) 2/7/2014 2004 (448) 2/7/2014 2003 (492) 2/7/2014 2002 (452) 2/7/2014 2001 (497) 2/7/2014 2000 (632) 2/7/2014 2003 (35) 7/31/2013 1995 (68) 7/31/2013 1996 (318) 2/21/2014 1992 (771) 6/27/2013 1995 — 6/27/2013 1995 (567) 6/27/2013 1995 (258) 7/31/2013 1993 (499) 6/27/2013 1995 — 7/31/2013 1993 — 7/31/2013 1995 (373) 6/27/2013 1995 — 6/27/2013 1995 Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction 681 860 1,344 1,053 1,455 530 590 — — 3,071 (2,203) 1,760 2,345 783 2,399 1,693 — — — — — 681 1,728 3,104 3,398 2,238 2,929 2,283 — 6/27/2013 1995 (108) 6/27/2013 2003 (458) 6/27/2013 1997 (610) 6/27/2013 1997 (208) 7/31/2013 1995 (613) 6/27/2013 1995 (433) 6/27/2013 1995 1,695 12,360 (1,567) 12,488 (955) 3/28/2014 2006 Property City State 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 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 Grand Prairie TX Modesto Bedford CA OH Oklahoma City OK Oklahoma City OK Fayetteville AR East Peoria Flanders Amarillo Riverdale IL NJ TX UT TX TX 367 280 111 124 108 1,370 1,023 811 800 110 127 1,508 1,402 1,055 1,524 852 796 793 1,714 2,347 842 1,893 899 299 272 China Buffet Alvin China Buffet Angleton China Town Buffet Bismarck ND 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 IL AL AL AL AL FL GA GA GA GA SC 1,038 1,928 190 144 134 173 127 254 178 256 178 196 647 255 574 757 518 719 380 533 597 414 458 277 F-92 — — — — — — — — — — — — — — — — — — — (591) — (525) — (648) 1,422 1,804 963 920 901 3,084 3,370 2,244 2,704 1,699 409 399 (220) 2/7/2014 1999 (308) 2/7/2014 1988 (191) 2/7/2014 1979 (177) 2/7/2014 1985 (170) 2/7/2014 1986 (438) 6/27/2013 1995 (611) 6/27/2013 2003 (316) 2/7/2014 2003 (502) 7/31/2013 1984 (230) 6/27/2013 1995 (78) 6/27/2013 1982 (71) 6/27/2013 1982 2,966 (511) 7/31/2013 2000 445 718 891 691 846 634 120 853 67 654 276 (65) 6/27/2013 1995 (135) 7/31/2013 1976 (178) 7/31/2013 2003 (122) 7/31/2013 1981 (169) 7/31/2013 1982 (89) 7/31/2013 1984 — 7/31/2013 1981 (140) 7/31/2013 1976 — 7/31/2013 1978 (108) 7/31/2013 1984 (1) 7/31/2013 1981 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Church's Chicken Charleston Church's Chicken Charleston 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 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 Citizens Bank Stonington Citizens Bank Stonington Citizens Bank Lewes Citizens Bank Wilmington CT CT CT CT CT CT DE DE Citizens Bank Dorchester MA — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 421 500 437 231 280 254 325 188 302 407 407 411 350 344 167 437 428 342 472 487 349 302 407 271 274 525 6,194 16,215 10,036 42,676 344 348 293 637 675 185 453 312 258 581 171 413 190 104 102 299 386 1,377 813 329 340 1,254 1,049 1,812 935 1,032 475 971 2,342 1,079 937 916 299 386 F-93 — — (486) (393) (482) — (458) (390) — — (322) (528) (431) — — — — — — — — — — — — — — — (405) — — — 765 667 388 266 140 726 354 147 604 814 356 157 444 (81) 7/31/2013 1973 (39) 7/31/2013 1979 — 7/31/2013 1978 — 7/31/2013 1977 — 7/31/2013 1970 (111) 7/31/2013 2009 — 7/31/2013 1984 (1) 7/31/2013 2002 (71) 7/31/2013 1976 (96) 7/31/2013 1977 — 7/31/2013 1985 — 7/31/2013 1972 — 7/31/2013 1978 22,409 (3,018) 2/7/2014 2012 52,712 (8,036) 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 1,269 636 1,018 598 772 (411) 5/4/2012 1986 (237) 8/28/2012 2003 (62) 9/26/2014 1993 (66) 9/26/2014 1990 (362) 9/27/2012 1996 (290) 9/28/2012 2012 (500) 9/28/2012 1851 (269) 4/26/2012 1984 (285) 9/28/2012 1972 (131) 9/28/2012 1995 (338) 8/1/2010 1995 (646) 9/28/2012 1984 (298) 9/28/2012 1984 — 12/14/2012 1982 (239) 2/22/2013 1968 (86) 4/26/2012 1967 (111) 4/26/2012 1960 Property City State Citizens Bank Ludlow Citizens Bank Malden Citizens Bank Malden Citizens Bank Medford Citizens Bank Milton 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 Winthrop Citizens Bank Woburn Citizens Bank Clinton Township Citizens Bank Dearborn Citizens Bank Dearborn Citizens Bank Detroit Citizens Bank Farmington MA MA MA MI MI MI MI MI Citizens Bank Grosse Pointe 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, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction 1,350 1,084 2,419 1,683 3,095 991 1,919 1,122 1,294 934 1,114 1,166 3,824 2,895 2,569 189 1,010 2,732 1,885 1,737 1,119 682 2,057 1,247 2,509 1,187 (149) 9/28/2012 1995 (165) 9/28/2012 1920 (534) 9/28/2012 1988 (302) 9/28/2012 1938 (666) 12/14/2012 1968 (191) 9/28/2012 1983 (397) 9/28/2012 1979 (155) 9/28/2012 1940 (348) 12/14/2012 1986 (185) 5/10/2013 1975 (200) 9/28/2012 1974 (220) 12/14/2012 1991 (1,137) 8/1/2010 1970 (809) 8/1/2010 1977 (718) 8/1/2010 1974 (2) 8/1/2010 1958 (190) 12/14/2012 1962 (800) 8/1/2010 1975 (558) 8/1/2010 1980 (519) 8/1/2010 1959 (334) 8/1/2010 1980 (4) 8/1/2010 1975 (614) 8/1/2010 1960 (252) 12/14/2012 1980 (735) 8/1/2010 1982 (351) 8/1/2010 1963 — — 1,697 1,194 2,244 — 1,383 — — — — — — — — — — — — — — — — — — — 810 488 484 589 619 297 480 561 — 187 390 350 574 434 385 112 303 410 283 261 168 283 309 312 376 178 540 596 1,935 1,094 2,476 694 1,439 561 1,294 747 724 816 3,250 2,461 2,184 636 707 2,322 1,602 1,476 951 — — — — — — — — — — — — — — — (559) — — — — — 1,605 (1,206) 1,748 935 2,133 1,009 — — — — F-94 Property City State Citizens Bank Keene Citizens Bank Manchester Citizens Bank Manchester Citizens Bank Pelham Citizens Bank Pittsfield Citizens Bank Rollinsford Citizens Bank Salem Citizens Bank Haddon Heights Citizens Bank Albany Citizens Bank Amherst Citizens Bank East Aurora Citizens Bank Johnstown Citizens Bank Port Jervis Citizens Bank Rochester Citizens Bank Vails Gate Citizens Bank Whitesboro Citizens Bank Alliance 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 Citizens Bank Northfield Citizens Bank Parma NH NH NH NH NH NH NH NJ NY NY NY NY NY NY NY NY OH OH OH OH OH OH OH OH OH OH OH OH OH Citizens Bank Parma Heights OH Citizens Bank Rocky River OH Citizens Bank South Russell OH Encumbrances at December 31, 2017 1,885 — — — — — — — — — — — — — — — — — — — — — — 1,885 — — — — — — — — Initial Costs (1) Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction 132 640 — 113 160 78 328 316 232 238 162 163 143 166 284 130 204 280 201 186 239 210 182 511 196 191 287 317 475 426 283 106 2,511 782 1,568 340 908 444 1,312 948 1,315 1,348 919 923 811 943 1,610 739 1,156 1,589 1,140 1,057 1,357 1,190 1,031 2,045 1,111 1,080 1,624 1,797 581 638 1,602 957 F-95 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 2,643 1,422 1,568 453 1,068 522 1,640 1,264 1,547 1,586 1,081 1,086 954 1,109 1,894 869 1,360 1,869 1,341 1,243 1,596 1,400 1,213 2,556 1,307 1,271 1,911 2,114 1,056 1,064 1,885 1,063 (676) 12/14/2012 1900 (216) 9/28/2012 1941 (422) 12/14/2012 1995 (98) 4/26/2012 1983 (316) 8/1/2010 1976 (154) 8/1/2010 1977 (353) 12/14/2012 1980 (226) 7/23/2013 1965 (432) 8/1/2010 1960 (450) 8/1/2010 1965 (307) 8/1/2010 1996 (303) 8/1/2010 1973 (275) 8/1/2010 1995 (315) 8/1/2010 1962 (529) 8/1/2010 1995 (243) 8/1/2010 1995 (408) 8/1/2010 1972 (561) 8/1/2010 1984 (386) 8/1/2010 1982 (373) 8/1/2010 2004 (479) 8/1/2010 1973 (420) 8/1/2010 1950 (364) 8/1/2010 1930 (550) 12/14/2012 1979 (365) 8/1/2010 1985 (381) 8/1/2010 1960 (573) 8/1/2010 1995 (625) 8/1/2010 1969 (156) 12/14/2012 1971 (172) 12/14/2012 1957 (526) 8/1/2010 1972 (257) 12/14/2012 1981 Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State 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 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 Havertown Citizens Bank Highspire Citizens Bank Homestead Citizens Bank Kingston Citizens Bank Kittanning Citizens Bank Lancaster Citizens Bank Latrobe OH OH PA PA PA PA PA PA PA PA PA PA PA PA PA PA PA 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 — — — — — — — — — — — — — — — — 1,257 — — — — — — — — — — 1,620 — — — 1,577 158 395 138 314 153 215 225 138 286 430 73 213 232 266 168 89 343 45 219 216 202 404 56 383 148 180 509 288 105 513 198 215 893 2,239 782 733 459 — — — — — 1,217 (1,282) 675 553 1,144 645 1,396 1,205 926 1,064 671 802 1,370 861 875 649 807 943 1,060 468 591 722 946 2,590 314 769 (566) — — — — — — — — (468) — — — — — — — — — — — — — — 1,123 (1,222) 1,051 2,634 920 1,047 612 150 334 691 1,430 1,075 1,469 1,418 1,158 1,330 839 423 1,713 906 1,094 865 1,009 1,347 1,116 851 739 902 1,455 2,878 419 1,282 99 (315) 8/1/2010 1960 (779) 8/1/2010 1920 (210) 12/14/2012 1953 (202) 9/28/2012 1972 (123) 12/14/2012 1971 (4) 8/1/2010 1925 — 12/14/2012 1928 (153) 9/28/2012 1995 (308) 12/14/2012 1966 (174) 12/14/2012 1971 (376) 12/14/2012 1920 (332) 9/28/2012 1949 (249) 12/14/2012 1935 (286) 12/14/2012 1950 (181) 12/14/2012 1954 — 12/14/2012 1975 (340) 5/22/2013 1958 (232) 12/14/2012 1957 (242) 9/28/2012 2003 (175) 12/14/2012 1974 (223) 9/28/2012 1960 (254) 12/14/2012 1977 (285) 12/14/2012 1889 (129) 9/28/2012 1967 (159) 12/14/2012 1969 (194) 12/14/2012 1980 (254) 12/14/2012 1920 (715) 9/28/2012 1900 (85) 12/14/2012 1964 (207) 12/14/2012 1981 (2) 8/1/2010 1930 1,939 — 2,154 (535) 9/28/2012 1960 F-96 Property City State Citizens Bank Mountain Top PA Citizens Bank Narberth Citizens Bank Oakmont Citizens Bank Oil City 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 Citizens Bank Pittsburgh Citizens Bank Pittsburgh Citizens Bank Pittsburgh Citizens Bank Pittsburgh Citizens Bank Reading Citizens Bank Reading Citizens Bank Temple Citizens Bank Turtle Creek Citizens Bank Tyrone Citizens Bank Upper Darby Citizens Bank Warrendale PA PA PA PA PA PA PA PA PA PA PA PA PA PA PA PA PA PA PA PA PA PA PA PA Citizens Bank West Hazleton PA Citizens Bank Wexford Citizens Bank Coventry Citizens Bank Cranston Citizens Bank East Greenwich Citizens Bank Johnston PA RI RI RI RI Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — 2,262 1,244 — 918 — — — — — — — — — — — — — — — 111 420 199 110 127 266 46 215 256 185 389 146 470 516 206 196 255 268 269 267 268 308 146 411 611 279 180 559 411 227 343 200 631 2,381 1,127 623 722 1,065 — — — — (543) — 867 (761) — — — — — — — — — — — — — — — — — — — — — — — — — 1,219 767 1,051 1,168 2,770 2,661 1,204 1,852 1,110 1,019 2,413 1,524 802 626 923 583 617 916 2,509 719 559 1,234 680 1,030 1,800 F-97 742 2,801 1,326 733 306 1,331 152 1,434 1,023 1,236 1,557 2,916 3,131 1,720 2,058 1,306 1,274 2,681 1,793 1,069 894 1,231 729 1,028 1,527 2,788 899 1,118 1,645 907 1,373 2,000 (170) 12/14/2012 1980 (782) 8/1/2010 1935 (303) 12/14/2012 1967 (168) 12/14/2012 1965 (24) 12/14/2012 1920 (287) 12/14/2012 1971 — 12/14/2012 1985 (336) 9/28/2012 1970 (212) 9/28/2012 1970 (283) 12/14/2012 1960 (314) 12/14/2012 1940 (745) 12/14/2012 1900 (716) 12/14/2012 1979 (324) 12/14/2012 1970 (498) 12/14/2012 1923 (299) 12/14/2012 1980 (274) 12/14/2012 1970 (649) 12/14/2012 1970 (384) 4/12/2013 1904 (216) 12/14/2012 1970 (173) 9/28/2012 1936 (255) 9/28/2012 1970 (157) 12/14/2012 1967 (166) 12/14/2012 1966 (246) 12/14/2012 1981 (692) 9/28/2012 1900 (194) 12/14/2012 1975 (154) 9/28/2012 1968 (332) 12/14/2012 1967 (183) 12/14/2012 1959 (284) 9/28/2012 1972 (484) 12/31/2012 1971 Citizens Bank N. Providence RI 1,445 Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction 223 300 352 517 328 892 899 654 959 609 — — — — — 1,115 1,199 1,006 1,476 937 (240) 12/14/2012 1971 (242) 12/14/2012 1960 (176) 12/14/2012 1977 (265) 9/28/2012 1976 (168) 9/28/2012 1980 1,870 8,828 697 11,395 (2,047) 9/24/2013 1995 Property City State 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 St. Albans Coborn's Liquor Store Coborn's Liquor Store Stanley Tioga Comcast Englewood Community Bank Lake Mary Community Bank Whitehall CompUSA Arlington ConAgra Foods Omaha ConAgra Foods Milton Conn's Hurst Cooper Tire & Rubber 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 RI RI RI RI RI VT VT ND ND CO FL NY TX NE PA 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 SC SC TX TX TX VA — — — — — — — — — — — — — 363 141 1,163 1,065 1,490 1,230 106 544 798 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 — 497 1,990 15,355 4,438 33,994 — — 1,211 2,640 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 4,786 13,681 2,403 2,361 3,153 2,495 2,054 2,334 2,721 2,927 2,933 3,005 3,744 1,703 F-98 — — — — — — — — — — — — — — — — — — 907 939 6,200 5,646 6,550 2,738 706 4,031 (146) 12/14/2012 1969 (271) 8/1/2010 1989 (997) 2/21/2014 2014 (717) 6/26/2014 2014 (1,109) 11/5/2013 1999 (340) 10/1/2013 1990 (197) 8/1/2011 1995 (392) 2/7/2014 1992 37,148 (3,587) 3/28/2014 1989 32,898 (4,943) 2/7/2014 1991 2,487 (429) 5/19/2014 1999 38,432 (8,554) 11/5/2013 2009 5,997 (997) 2/7/2014 2007 16,321 (2,679) 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 (855) 11/13/2012 2005 (840) 11/13/2012 2006 (712) 2/7/2014 2003 (584) 2/7/2014 2005 (731) 11/13/2012 2004 (562) 2/7/2014 2006 (644) 2/7/2014 2006 (691) 2/7/2014 2005 (695) 2/7/2014 2005 (668) 2/7/2014 2005 (847) 2/7/2014 2007 (489) 2/7/2014 2006 Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Cracker Barrel Emporia Cracker Barrel Waynesboro Cracker Barrel Woodstock VA VA VA TX PA AL 2,435 972 — 1,536 2,262 — 681 928 519 — — 1,239 Meridianville AL 1,927 1,045 Crest Production Services Crozer-Keystone Health 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 Pleasanton Ridley Park Hoover 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 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 2,267 1,489 2,164 7,949 6,114 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 — — — — — — — 4 15 — 16 17 19 15 — — — — — — 16 — — — — (12) — — — 3,239 3,025 3,092 8,468 6,114 4,129 4,102 6,048 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 (807) 11/13/2012 2004 (519) 2/7/2014 2004 (770) 11/13/2012 2005 (2,255) 6/12/2014 2013 (1,374) 11/5/2013 1976 (802) 5/31/2013 2003 (721) 2/7/2014 2008 (1,146) 10/1/2013 2012 (684) 10/1/2013 2012 (651) 2/7/2014 2009 (1,115) 10/1/2013 2012 (1,171) 10/1/2013 2012 (1,016) 10/1/2013 2012 (1,515) 10/1/2013 2011 — 2/7/2014 2010 (443) 2/7/2014 1999 (850) 2/7/2014 2009 (838) 2/7/2014 2009 — 2/7/2014 2009 (951) 2/7/2014 2009 (594) 10/1/2013 2012 (914) 2/7/2014 2009 (637) 2/7/2014 2004 (804) 2/7/2014 2008 (530) 4/12/2013 2002 (263) 9/28/2012 1994 (695) 2/7/2014 2007 (375) 2/28/2013 1998 (341) 9/28/2012 2000 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 — 1,618 1,149 — 1,264 2,626 1,534 — 572 1,948 1,346 — — 855 368 25,155 3,471 41,765 1,112 46,348 (7,467) 2/7/2014 1980 — 1,850 420 227 1,530 3,060 F-99 — — 1,950 3,287 (363) 2/24/2014 1998 (660) 2/7/2014 2000 Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State CVS CVS CVS CVS CVS Franklin Mishawaka Tipton Lawrence Mandeville IN IN IN KS LA — 2,258 — 2,908 310 409 311 837 4,020 2,385 2,787 4,532 1,726 4,392 2,915 (5) — — — 16 3,092 4,941 2,037 5,229 5,316 (902) 3/29/2012 1999 (989) 2/7/2014 2007 (408) 2/24/2014 1998 (959) 2/7/2014 2009 (738) 10/1/2013 2012 F-100 Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (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-101 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 (890) 10/1/2013 2012 (618) 10/1/2013 2012 (1,155) 10/1/2013 2012 (1,420) 10/1/2013 2012 (1,332) 10/1/2013 2012 (709) 2/28/2013 1999 (827) 2/28/2013 1999 (912) 2/7/2014 2009 (686) 5/19/2014 2000 (776) 10/1/2013 2012 (830) 2/7/2014 2009 (1,036) 2/7/2014 2009 (861) 10/1/2013 2011 (452) 2/7/2014 2008 (317) 2/7/2014 1998 (285) 2/7/2014 1998 (1,008) 2/7/2014 2009 — — 2/7/2014 2011 2/7/2014 2008 (1,377) 2/7/2014 2009 (986) 10/1/2013 2011 (1,042) 10/1/2013 2011 (1,309) 10/1/2013 2012 (998) 8/22/2012 2004 (1,298) 2/7/2014 2009 (358) 11/8/2012 1997 (1,076) 2/7/2014 2008 (351) 2/7/2014 2008 (331) 2/7/2014 1996 (1,026) 2/7/2014 2009 (561) 10/1/2013 2010 (341) 8/8/2012 2004 Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) 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 — 1,859 — 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-102 — — — — — — — — — — — 16 16 (4) 15 16 — — 16 15 — 15 15 16 16 — 70 68 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 3,971 3,672 3,502 4,936 3,313 4,565 Accumulated Depreciation (3) (5) Date Acquired Date of Construction (1,052) 11/29/2012 2008 (716) 10/31/2012 1999 (582) 2/8/2013 2002 (309) 2/7/2014 1998 (248) 4/24/2013 2003 (291) 2/7/2014 1998 (651) 2/7/2014 2009 (752) 7/2/2013 2006 (445) 2/28/2013 1997 (411) 2/7/2014 1998 (249) 2/7/2014 1998 (714) 10/1/2013 2012 (560) 10/1/2013 2011 (354) 9/28/2012 1996 (821) 10/1/2013 2011 (642) 10/1/2013 2011 (594) 5/19/2014 2000 (697) 2/7/2014 2008 (694) 10/1/2013 2011 (931) 10/1/2013 2011 (701) 2/7/2014 2003 (757) 10/1/2013 2011 (955) 10/1/2013 2011 (660) 10/1/2013 2012 (618) 10/1/2013 2012 (571) 5/16/2013 2005 (657) 2/7/2014 1999 (561) 2/7/2014 1997 (706) 10/1/2013 2011 (933) 10/1/2013 2012 (626) 10/1/2013 2011 (978) 10/1/2013 2012 Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (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 DaVita Dialysis Akron DaVita Dialysis Cincinnati MO NC 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 69 511 209 215 128 138 312 219 125 311 126 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 1,994 878 706 3,886 1,136 1,879 — — — — — — — — — — — — — — — — — — — — — — — — — — — — DaVita Dialysis Federal Way WA 17,751 1,929 22,357 Del Monte Lathrop Denny's Mesa CA AZ — — 3,414 1,089 526 — 41,318 891 F-103 16 — — — — — — — — — — — — — — — (7) — — — — — — — (2) (1) 36 — — — 6,060 4,575 2,812 (1,299) 10/1/2013 2011 (857) 2/7/2014 1947 (361) 2/7/2014 1959 14,632 (2,490) 2/7/2014 2011 9,846 (1,444) 2/7/2014 2000 133 160 160 160 163 1,369 2,712 1,380 3,323 1,936 1,977 3,350 1,371 2,748 2,094 2,009 1,024 1,384 2,306 1,095 830 4,233 1,262 1,978 — 6/27/2013 1995 (27) 6/27/2013 1995 (30) 6/27/2013 1995 (25) 6/27/2013 1995 (15) 7/31/2013 1980 (277) 3/28/2013 2009 (427) 2/7/2014 2007 (250) 6/5/2013 2013 (478) 2/7/2014 2005 (274) 2/7/2014 2000 (281) 2/7/2014 2001 (471) 2/7/2014 2008 (283) 5/30/2013 2012 (301) 9/30/2014 2010 (512) 12/31/2012 1955 (312) 2/7/2014 1997 (168) 2/26/2014 2003 (256) 8/2/2013 2006 (342) 3/31/2014 1932 (197) 3/28/2013 2008 (159) 3/28/2013 2009 (616) 2/7/2014 1989 (247) 5/30/2013 2013 (510) 12/31/2012 1979 24,286 (7,080) 11/21/2012 2000 45,258 (10,419) 11/5/2013 1993 1,980 (236) 7/31/2013 1994 Property City State Denny's Peoria Denny's Phoenix Denny's Scottsdale Denny's Denny's Tempe Tempe Denny's Idaho Falls Denny's Merriam Denny's Topeka 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 Dollar General Bremen Dollar General Butler MO NC NC NY NY OH OH OR SC TX MI OK SC TN CA AL AL AL AL Dollar General Childersburg AL Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 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 59 338 328 457 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 1,017 1,093 986 F-104 — — — — — — — — — — — — — — — — — — — — — — — 13 — — — — — — — — 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 (119) 6/27/2013 1995 (328) 7/31/2013 2005 (130) 7/31/2013 1980 (60) 6/27/2013 1980 (224) 7/31/2013 1995 (100) 6/27/2013 1995 (294) 6/27/2013 1995 (114) 6/27/2013 1995 — 7/31/2013 1995 (565) 6/27/2013 1995 (175) 6/27/2013 1995 (240) 6/27/2013 1995 (200) 6/27/2013 1995 (129) 6/27/2013 1995 (215) 6/27/2013 1995 (64) 7/31/2013 1970 (283) 6/27/2013 1995 (249) 6/27/2013 1995 (102) 6/27/2013 1989 (273) 6/27/2013 1995 (142) 6/27/2013 1995 (336) 6/27/2013 1995 (1,680) 2/7/2014 2010 11,682 (2,224) 2/7/2014 2012 8,758 7,452 (1,128) 2/7/2014 2005 (1,314) 2/7/2014 2007 20,600 (8,012) 8/15/2014 2006 1,231 1,038 1,076 1,431 1,314 (85) 7/24/2014 2014 (261) 6/6/2012 2012 (165) 9/29/2014 2014 (235) 3/28/2014 2014 (217) 2/7/2014 2013 Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State 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 Dollar General Flippin Dollar General Gassville 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 AR AR Dollar General Green Forest AR — — — — — — — — — — — — — 300 — — — 300 — — — — — — — — — — — — — — 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 53 54 52 697 780 861 836 805 983 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 64 325 303 F-105 — — — — — — — — — — — — — — — — — — — (2) 7 26 — — — — (2) 53 24 (1) — — 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 1,030 889 922 174 324 442 529 431 752 315 256 617 482 116 379 355 (210) 4/26/2012 2012 (168) 3/28/2014 2013 (127) 9/26/2014 2014 (184) 2/26/2014 2014 (235) 8/9/2012 2012 (217) 2/7/2014 2013 (171) 8/13/2014 2014 (226) 2/7/2014 2013 (363) 4/26/2012 2012 (307) 2/7/2014 2013 (163) 4/17/2014 2014 (200) 2/7/2014 2012 (242) 2/7/2014 2013 (214) 10/31/2011 2010 (208) 2/7/2014 2013 (269) 12/12/2011 2011 (209) 2/7/2014 2013 (234) 12/30/2011 2011 (157) 3/28/2014 2014 (39) 6/19/2012 1997 (71) 7/25/2013 1998 (94) 7/25/2013 1999 (117) 7/25/2013 1999 (94) 11/10/2011 2005 (188) 7/2/2012 2011 (70) 7/25/2013 2000 (76) 11/10/2011 2005 (128) 7/25/2013 1999 (103) 7/25/2013 2000 (19) 6/19/2012 1994 (80) 7/25/2013 1999 (94) 11/10/2011 2005 Property City Dollar General Higden State 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 Kissimmee 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 FL GA GA GA GA IA IA IA IA IA IA IA IA Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction 596 455 432 498 511 727 282 471 304 409 431 738 760 1,714 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 (117) 7/25/2013 1995 (91) 7/25/2013 1995 (97) 7/25/2013 1995 (103) 7/25/2013 1995 (90) 7/25/2013 1995 (185) 12/4/2012 1995 (57) 7/25/2013 1998 (103) 7/25/2013 2001 (66) 7/25/2013 1998 (70) 7/25/2013 1999 (97) 7/25/2013 1999 (187) 12/4/2012 1995 (212) 12/30/2011 2010 (213) 2/7/2014 2011 (385) 2/7/2014 2012 (317) 10/31/2011 2011 (244) 5/7/2014 2013 (83) 6/19/2012 1987 (217) 6/3/2013 2011 (213) 2/7/2014 2012 (168) 8/13/2014 2014 (213) 2/7/2014 2013 (212) 8/28/2013 2013 (218) 12/31/2012 2012 (272) 8/31/2012 2012 (226) 7/9/2013 2013 (259) 10/25/2012 2012 (229) 2/1/2012 2012 (222) 2/1/2012 2012 (222) 9/6/2012 2012 75 29 — 13 107 — 29 — 12 80 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 300 970 — 400 — — — — — — — — — — — — — — 52 64 43 73 40 73 25 45 29 49 43 74 76 643 413 178 113 139 213 251 150 308 96 136 165 100 226 188 81 136 469 362 389 412 364 654 228 426 263 280 388 664 684 1,071 1,810 1,007 1,196 312 852 992 743 972 862 772 934 902 903 751 728 768 F-106 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, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 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-107 — — — — — — — — — — — — — — — — — 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 (226) 1/31/2013 2012 (256) 3/9/2012 2012 (264) 8/31/2012 2012 (211) 3/26/2013 2013 (221) 6/7/2013 2013 (144) 7/29/2014 2014 (243) 5/23/2013 2013 (240) 8/31/2012 2012 (97) 11/10/2011 2007 (260) 9/21/2012 2012 (223) 2/25/2014 2013 (215) 8/22/2013 2013 (251) 9/24/2012 1995 (152) 7/2/2014 2014 (247) 12/17/2012 2012 (141) 8/1/2014 2013 (196) 3/31/2014 2014 (97) 6/18/2014 2014 (234) 12/31/2012 1995 (308) 12/31/2012 2012 (229) 8/14/2013 2013 (111) 9/22/2014 2010 (212) 7/31/2014 2014 (197) 12/22/2011 2011 (97) 5/29/2014 2014 (157) 7/30/2014 2014 (96) 4/30/2014 2014 (143) 9/17/2014 2014 (233) 8/31/2012 2009 (234) 8/31/2012 2009 (230) 8/31/2012 2009 (225) 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 Dollar General Monroe Mount Hermon Dollar General New Iberia Dollar General Patterson Dollar General Sarepta LA LA LA LA LA LA Dollar General St. Martinville LA Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — 300 — — — — — — — — 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 97 94 315 259 131 175 818 828 804 765 816 796 792 817 781 747 799 775 867 733 845 838 745 756 793 784 719 929 750 919 770 759 869 842 736 1,035 743 1,028 F-108 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 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 1,176 799 966 936 1,051 1,294 874 1,203 (238) 8/31/2012 2009 (241) 8/31/2012 2010 (234) 8/31/2012 2010 (223) 8/31/2012 2010 (238) 8/31/2012 2010 (232) 8/31/2012 2010 (231) 8/31/2012 2009 (238) 8/31/2012 2010 (203) 5/30/2013 2012 (194) 5/30/2013 2013 (208) 5/30/2013 2012 (201) 5/30/2013 2013 (181) 4/25/2014 2012 (220) 4/26/2012 2011 (220) 5/30/2013 2012 (210) 7/1/2013 2013 (228) 2/6/2012 2011 (218) 9/26/2012 2012 (226) 11/27/2012 2012 (238) 3/8/2012 2012 (165) 2/7/2014 2012 (269) 9/27/2012 2012 (220) 7/26/2012 2012 (281) 2/29/2012 2012 (169) 2/7/2014 2012 (232) 2/6/2012 2011 (265) 2/6/2012 2011 (257) 2/6/2012 2009 (221) 4/26/2012 2011 (311) 4/26/2012 2011 (217) 8/9/2012 2011 (225) 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, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 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-109 — — — — — — — — — — — — — — — — — — — — — — — — — (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 (253) 2/7/2014 2012 (263) 3/9/2012 1995 (224) 4/26/2012 2011 (240) 10/10/2013 2012 (203) 7/10/2012 2012 (163) 8/6/2014 1965 (226) 3/16/2012 2012 (214) 2/27/2013 2013 (202) 3/16/2012 2011 (205) 8/30/2012 2012 (217) 5/18/2012 2012 (208) 7/10/2012 2012 (222) 5/18/2012 2012 (235) 10/31/2012 2012 (202) 7/10/2012 2012 (226) 8/30/2012 2012 (234) 2/27/2013 2013 (240) 2/27/2013 2012 (286) 6/26/2012 2012 (271) 2/27/2013 2012 (227) 8/30/2012 2012 (196) 2/27/2013 2012 (217) 2/27/2013 2011 (228) 8/30/2012 2012 (224) 12/19/2012 2012 (89) 5/30/2014 1960 (208) 8/2/2013 2013 (184) 2/26/2014 2014 (196) 5/2/2014 2013 (101) 4/30/2014 2014 (190) 10/16/2013 2013 (243) 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, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (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-110 — — — — — — — — — — — — 37 — — — — — — — — — — — — — — — — — — — 1,018 (221) 9/24/2013 2013 870 982 (221) 12/17/2012 2012 (246) 1/31/2013 2012 1,035 (216) 8/22/2013 2013 932 951 842 883 998 978 146 350 505 979 722 (182) 2/20/2014 2014 (191) 10/30/2013 2013 (210) 7/25/2012 2012 (224) 12/26/2012 2012 (205) 9/4/2013 2013 (232) 1/14/2013 2012 (39) 11/10/2011 2004 (98) 11/10/2011 2006 (123) 11/10/2011 2006 (241) 2/28/2013 2013 (203) 11/22/2011 2011 1,053 (276) 8/3/2012 2012 880 349 929 238 894 202 976 928 373 678 731 (215) 10/9/2012 2012 (98) 11/10/2011 2007 (187) 10/17/2013 2013 (66) 11/10/2011 2005 (235) 8/24/2012 2012 (60) 11/10/2011 2004 (254) 9/27/2012 2012 (223) 12/31/2012 2012 (111) 11/10/2011 2007 (161) 6/19/2012 2010 (217) 11/22/2011 2011 1,013 (250) 2/14/2013 2013 219 915 919 849 (55) 11/10/2011 2005 (191) 8/2/2013 2013 (172) 2/26/2014 2014 (209) 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, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — 300 — — — — — 300 — — — — — 300 300 — — — — — — — — — 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-111 — — — (6) — — — — — — — (3) — — — — — — — — — — — — — 64 — — — — — (3) 1,038 (270) 2/14/2013 2013 609 786 286 886 346 1,271 960 1,044 658 1,020 188 885 (181) 11/10/2011 2010 (195) 8/31/2012 2012 (81) 11/10/2011 2004 (206) 8/24/2012 2012 (82) 6/19/2012 2007 (243) 7/13/2012 2012 (189) 11/12/2013 2013 (211) 9/21/2012 2012 (195) 11/22/2011 2010 (213) 11/15/2013 2013 (50) 11/10/2011 2003 (205) 9/24/2012 2012 1,113 (241) 9/21/2012 2012 995 764 616 1,041 1,082 1,039 886 823 714 870 878 197 830 928 948 991 1,004 262 (204) 9/13/2013 2013 (215) 11/22/2011 2010 (173) 11/10/2011 2010 (220) 4/26/2013 2013 (239) 8/2/2013 2013 (270) 9/11/2012 2012 (228) 10/31/2012 2012 (239) 2/1/2012 2011 (191) 10/31/2011 2010 (226) 9/7/2012 2012 (211) 4/27/2012 2012 (32) 6/19/2012 1999 (226) 3/30/2012 2012 (229) 2/19/2013 2012 (228) 4/27/2012 2012 (243) 9/24/2012 2012 (253) 6/6/2012 2012 (66) 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 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 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 MO MO MS MS MS MS MS MS Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — 400 — — — — — 300 — — — — — — 300 300 — — — — 44 30 131 88 209 270 273 61 47 101 56 144 378 220 81 372 260 215 445 111 31 51 78 90 24 86 75 82 77 198 178 40 843 573 744 789 835 811 637 552 189 911 1,056 819 702 879 244 692 606 1,219 1,039 629 598 471 704 769 213 829 671 739 692 793 713 754 F-112 — (8) — — — — — — 180 — — — — — — — — — — — — — — — (4) — — — — — — — 887 595 875 877 1,044 1,081 910 613 416 1,012 1,112 963 1,080 1,099 325 1,064 866 1,434 1,484 740 629 522 782 859 233 915 746 821 769 991 891 794 (246) 8/9/2012 2012 (178) 11/10/2011 2009 (217) 8/24/2012 2011 (230) 8/31/2012 2012 (205) 8/21/2013 2013 (199) 8/23/2013 2013 (184) 9/7/2012 2012 (163) 6/19/2012 2010 (56) 6/19/2012 1962 (237) 5/22/2013 2013 (322) 2/24/2012 2011 (239) 8/24/2012 2012 (208) 6/14/2012 2012 (272) 12/30/2011 1995 (72) 6/19/2012 1999 (202) 8/31/2012 2012 (175) 9/26/2012 2012 (322) 4/30/2013 1995 (293) 12/14/2012 2012 (197) 11/22/2011 2010 (187) 11/10/2011 2009 (145) 11/10/2011 2009 (215) 2/24/2012 2011 (168) 2/20/2014 2014 (63) 6/19/2012 2002 (181) 2/20/2014 2014 (208) 12/30/2011 2011 (229) 12/30/2011 2011 (203) 7/2/2012 2011 (229) 9/27/2012 2011 (206) 9/13/2012 2011 (218) 9/13/2012 2011 Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Dollar General Moorhead Dollar General Natchez MS MS — — 107 166 606 664 — — 713 830 (181) 5/1/2012 2011 (197) 6/12/2012 2012 F-113 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 Powhatan Point Dollar General Sandusky Dollar General Toledo OH OH OH Dollar General Wheelersburg OH Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — 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 81 146 131 138 210 252 395 658 655 655 641 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 1,059 740 784 1,700 1,149 1,132 F-114 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 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 (198) 4/12/2012 2011 (192) 7/2/2012 2011 (193) 7/2/2012 2011 (199) 12/30/2011 2011 (225) 2/28/2014 2013 (198) 2/6/2012 2011 (224) 2/7/2014 2013 (234) 8/13/2012 2012 (243) 2/7/2014 2013 (193) 2/6/2012 2011 (230) 8/13/2012 2012 (161) 2/6/2012 2011 (233) 9/6/2012 2012 (225) 7/11/2013 2013 (235) 10/10/2013 2012 (262) 2/7/2014 2013 (214) 10/31/2011 2010 (229) 2/18/2014 2013 (301) 2/23/2012 2011 (309) 2/7/2014 2012 (280) 6/6/2012 2012 (232) 2/7/2014 2012 (267) 5/16/2012 2012 (253) 7/10/2012 2012 (219) 10/31/2011 2010 (230) 10/31/2011 2010 1,205 (224) 2/7/2014 2012 871 922 1,910 1,401 1,527 (233) 10/31/2011 2010 (196) 7/2/2013 2014 (353) 2/7/2014 2012 (241) 2/7/2014 2012 (247) 2/25/2014 1925 Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Dollar General Broken Bow OK 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 Adkins Dollar General Amarillo Dollar General Amarillo Dollar General Amarillo Dollar General Avinger Dollar General Beeville Dollar General Belton Dollar General Belton Dollar General Blessing TX TX TX TX TX TX TX TX TX — — — — — — — — — — — — — — — — — — — — — — — — — — 331 136 38 100 85 76 41 145 87 143 43 198 123 31 163 68 96 1,983 259 — — — — 46 75 114 120 39 157 97 153 198 44 90 89 145 83 — — (6) — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 1,325 770 341 898 761 688 785 1,161 779 811 819 791 1,101 1,076 941 1,075 1,031 2,333 868 679 646 679 747 889 877 866 794 830 810 804 821 745 F-115 1,656 (242) 5/19/2014 2012 906 373 998 846 764 826 (224) 8/31/2012 2010 (106) 11/10/2011 2006 (262) 8/31/2012 2010 (222) 8/31/2012 2010 (200) 8/31/2012 2010 (229) 8/31/2012 2010 1,306 (240) 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 1,046 974 1,019 992 874 900 893 966 828 (227) 8/31/2012 2010 (196) 9/3/2013 2013 (197) 9/3/2013 2013 (191) 9/3/2013 2012 (227) 2/7/2014 2012 (223) 2/7/2014 2012 (201) 3/24/2014 2013 (229) 3/24/2014 2013 (220) 3/24/2014 2014 (628) 3/6/2013 2013 (217) 7/3/2013 2011 (198) 8/22/2012 2012 (190) 7/26/2012 2012 (199) 7/12/2012 2012 (232) 12/30/2011 2011 (251) 12/31/2012 2012 (215) 8/13/2013 2013 (213) 8/2/2013 2013 (199) 7/11/2013 2013 (204) 8/8/2013 2013 (230) 11/19/2012 2012 (220) 2/28/2013 2013 (237) 9/13/2012 2012 (210) 12/18/2012 2012 Property City State Dollar General Boling Dollar General Brookeland Dollar General Bryan Dollar General Bryan Dollar General Bryan Dollar General Buchanan Dam TX 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 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 Littleriver Acdmy Dollar General Lubbock Dollar General Lubbock Dollar General Lubbock Dollar General Lubbock Dollar General Lyford Dollar General Lytle 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, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 300 — 92 93 148 193 185 145 149 291 76 270 186 136 200 145 136 102 94 95 184 38 132 101 102 146 253 122 267 199 148 41 80 243 831 840 840 772 740 820 843 680 683 809 743 768 799 820 769 914 847 857 736 717 747 910 917 826 758 693 801 796 841 825 724 971 F-116 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 923 933 988 965 925 965 992 971 759 (204) 8/13/2013 2013 (207) 8/15/2013 2013 (243) 9/14/2012 2012 (223) 9/14/2012 2012 (216) 8/31/2012 2009 (237) 9/28/2012 2012 (242) 10/12/2012 2012 (193) 11/16/2012 2012 (205) 4/20/2012 2012 1,079 (228) 12/26/2012 2012 929 904 999 965 905 (183) 8/27/2013 2013 (222) 9/11/2012 2012 (229) 10/12/2012 2012 (228) 1/31/2013 2012 (222) 9/7/2012 2012 1,016 (229) 7/16/2013 2013 941 952 920 755 879 1,011 1,019 972 1,011 815 1,068 995 989 866 804 (243) 10/23/2012 2012 (211) 8/13/2013 2013 (214) 8/31/2012 2009 (216) 4/20/2012 2012 (216) 9/26/2012 2012 (207) 12/6/2013 2013 (267) 8/31/2012 2010 (235) 11/16/2012 2012 (223) 7/31/2012 2012 (209) 4/27/2012 2012 (233) 8/31/2012 2010 (196) 8/28/2013 2013 (219) 5/16/2013 2013 (180) 2/20/2014 2014 (225) 12/30/2011 2010 1,214 (230) 10/30/2013 2013 Property City State Dollar General Mercedes Dollar General Mission Dollar General Moody 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 San Leon Dollar General Silsbee Dollar General Skidmore TX 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 TX TX TX TX TX Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — 400 — 400 300 — 500 — — — — — — — — — — — — — — — — — — 215 158 41 214 205 95 156 277 96 72 169 137 163 253 252 222 163 271 239 220 333 202 169 87 43 90 165 136 93 219 602 91 859 894 781 858 818 855 883 1,150 864 1,370 957 779 652 1,010 756 888 926 812 956 880 776 807 956 786 810 811 876 772 841 875 956 817 F-117 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 1,074 1,052 822 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 1,125 873 853 901 (211) 8/2/2013 2013 (241) 3/27/2013 2013 (199) 6/11/2013 2013 (250) 8/31/2012 2009 (238) 8/31/2012 2012 (234) 2/14/2013 2013 (209) 10/30/2013 2013 (230) 2/7/2014 2012 (272) 10/31/2011 2010 (369) 3/28/2013 2013 (301) 10/31/2011 2010 (245) 10/31/2011 2010 (199) 2/1/2012 2011 (318) 10/31/2011 2010 (217) 10/22/2012 2012 (255) 10/22/2012 2012 (254) 2/14/2013 2013 (211) 5/23/2013 2013 (257) 3/11/2013 2013 (220) 7/9/2013 2013 (191) 8/13/2013 2013 (198) 8/23/2013 2013 (222) 11/15/2013 2013 (227) 9/25/2012 2012 (238) 7/6/2012 2012 (222) 2/14/2013 2013 1,041 (191) 2/26/2014 2014 908 934 1,094 1,558 908 (182) 10/25/2013 2013 (243) 9/12/2012 2012 (255) 8/31/2012 2010 (212) 2/7/2014 2013 (228) 1/31/2013 2013 Property City State Dollar General Vidor Dollar General Waco Dollar General Weslaco Dollar General Weslaco Dollar General Burkeville Dollar General Danville Dollar General Hopewell Dollar General Hot Springs Dollar General Richmond Dollar General Mellen Dollar General Minong TX 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 WV WV WV WV WV WV Dollar Tree Huntsville AL Dollar Tree Beverly Hills FL Dollar Tree Bonita Springs FL Dollar Tree Chiefland FL Dollar Tree Ormond Beach FL Dollar Tree Oviedo Dollar Tree Des Moines Dollar Tree Lombard FL IA IL Dollar Tree Baton Rouge LA Dollar Tree Burton Dollar Tree Winona MI MS Dollar Tree Hoosick Falls NY Duluth Trading Co Avon Duluth Trading Co Waukesha OH WI Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — 300 500 400 400 300 300 300 — — — — — — — — — — — — — — — 866 — — — — — 192 215 205 160 155 584 283 242 79 38 76 273 196 274 91 98 317 476 409 672 322 573 469 152 1,008 377 131 146 181 1,088 857 1,182 767 862 822 906 621 713 661 726 711 727 685 1,092 783 823 819 881 1,023 1,092 965 918 1,123 860 848 863 543 716 1,164 585 724 3,671 4,067 F-118 — — — — — — — — — — — — — — — — — — — — — — — — 6 — — — — — — — 1,182 959 1,077 1,027 1,066 776 1,297 944 968 790 765 761 1,365 979 1,097 910 979 1,340 1,568 1,374 1,590 1,445 1,433 1,317 1,021 1,551 1,093 1,295 731 905 4,759 4,924 (237) 2/7/2014 2012 (223) 8/31/2012 2012 (249) 9/24/2012 2012 (194) 10/16/2013 2013 (270) 5/8/2012 2012 (190) 2/6/2012 2011 (218) 2/6/2012 2011 (202) 2/6/2012 2011 (222) 2/6/2012 2011 (221) 12/30/2011 2011 (225) 12/30/2011 2011 (212) 12/30/2011 2011 (263) 9/27/2013 2013 (218) 1/16/2013 2012 (202) 8/2/2013 2013 (228) 1/9/2013 2012 (221) 7/2/2013 2013 (146) 11/20/2014 2014 (153) 8/29/2014 2014 (141) 8/28/2014 2013 (207) 2/7/2014 2013 (239) 3/31/2014 2013 (219) 6/4/2013 2008 (186) 2/19/2014 2013 (213) 8/30/2013 1995 (123) 12/12/2013 1967 (160) 2/7/2014 2003 (252) 2/7/2014 2003 (172) 7/31/2012 2012 (191) 4/26/2013 2013 (27) 10/20/2017 2017 (5) 12/14/2017 2017 Property City State Dunkin Donuts/ Baskin-Robbins Dearborn Heights Earhart Corporate Center Ann Arbor MI MI Eastchase Central Montgomery AL Eegee's Tucson Einstein Bros. Bagels Dearborn El Chico Killeen Elite Production Services Cuero EMC Corporation Bedford Emdeon Business Services Nashville Energy Maintenance Services US Pasadena Evans Exchange Evans Experian Schaumburg Express Energy Services Pleasanton AZ MI TX TX MA TN TX GA IL TX Express Scripts St. Louis MO 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 Jemison Family Dollar Marion Family Dollar Millbrook TX 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 AL AR AR AR AR AR Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — 230 846 — 1,076 (209) 6/27/2013 1995 27,070 3,520 39,639 (7,267) 35,892 (2,366) 11/5/2013 2006 — — — — — 1,480 9,117 357 190 534 127 436 724 992 982 51,345 16,594 75,137 4,700 688 10,417 — 6,517 — — — — — — — — — — 757 — — — 959 — — 663 — 571 467 393 3,452 5,935 413 5,706 1,360 295 137 144 172 368 628 143 247 316 218 533 221 151 49 247 155 125 2,878 9,821 26,003 5,541 32,333 5,704 1,301 851 741 722 1,153 924 997 780 1,052 847 936 791 806 1,003 845 758 629 F-119 — — — (803) — 203 — — 18 (5,777) — — — — — — — — — — — — — — — — — — — — 10,597 (39) 11/17/2017 2017 793 914 723 (102) 7/31/2013 1990 (179) 6/27/2013 (75) 7/31/2013 1995 1993 1,109 (155) 6/25/2014 2014 91,934 (13,547) 2/7/2014 2001 11,105 (1,690) 2/7/2014 2010 3,271 13,291 26,161 (454) 6/12/2014 (2,010) 2/7/2014 (1,911) 2/7/2014 2011 2009 1986 5,954 (877) 6/12/2014 2012 38,039 (10,515) 1/25/2012 2011 7,064 1,596 988 885 894 1,521 1,552 1,140 1,027 1,368 1,065 1,469 1,012 957 1,052 1,092 913 754 (895) 9/5/2014 2011 (227) 6/16/2014 2014 (162) 5/29/2014 2014 (108) 7/24/2014 2013 (148) 5/7/2014 2013 (168) 8/29/2014 2014 (115) 1/12/2015 2014 (217) 2/7/2014 2011 (115) 7/30/2014 2014 (152) 8/28/2014 2013 (123) 8/28/2014 2013 (208) 2/7/2014 2010 (149) 5/29/2014 2014 (136) 8/28/2014 1988 (204) 2/7/2014 2002 (179) 2/7/2014 2011 (155) 2/7/2014 2002 (128) 2/7/2014 2002 Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — 974 — 603 — — — — — — — 123 603 454 126 98 302 110 400 302 303 416 1,015 882 313 785 895 571 772 584 281 712 1,229 — — — — — — — — — — — 1,138 1,485 767 911 993 873 882 984 583 1,015 1,645 (147) 8/28/2014 2013 (197) 2/7/2014 2002 (78) 2/7/2014 2003 (170) 2/7/2014 2000 (130) 8/28/2014 2013 (131) 2/7/2014 2001 (131) 8/28/2014 2001 (134) 2/7/2014 2004 (70) 2/7/2014 2003 (118) 8/28/2014 2004 (174) 8/28/2014 2013 Property City State Family Dollar Ash Fork Family Dollar Avondale 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 F-120 Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Family Dollar Phoenix Family Dollar Phoenix Family Dollar Dacano Family Dollar Fort Lupton Family Dollar Rangely Family Dollar New Britain Family Dollar Wilmington Family Dollar Altha Family Dollar Anthony Family Dollar Apopka Family Dollar Auburndale Family Dollar Belleview 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 Lake Alfred Family Dollar Lake City Family Dollar Lake Panasoffkee Family Dollar Lakeland Family Dollar Largo AZ AZ CO CO CO CT DE FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL — 1,109 1,040 757 916 — — — — — 1,127 — — 631 — — — — 1,057 686 1,042 417 973 — 1,002 — 1,028 789 — 622 — 732 — 504 155 154 66 484 540 126 242 518 314 332 202 188 675 47 425 492 171 206 211 189 202 423 367 271 545 484 186 237 339 844 767 1,079 959 1,180 593 1,280 1,218 727 1,037 1,402 951 829 727 936 1,190 1,038 1,006 1,293 1,074 1,578 606 1,344 825 1,263 810 1,121 1,173 1,006 872 696 785 962 F-121 — — — — — 26 — — — — — — — — — — — — — — — — — (16) — — — — — — — — 1,876 1,583 1,114 1,334 659 1,790 1,758 853 1,279 1,920 1,265 1,161 929 1,124 1,865 1,085 1,431 1,785 1,245 1,784 817 1,533 1,027 1,670 1,177 1,392 1,718 1,490 1,058 933 1,124 1,806 (181) 2/7/2014 2003 (237) 2/7/2014 2003 (212) 2/7/2014 2003 (259) 2/7/2014 1961 (177) 5/4/2012 2010 (176) 10/14/2014 2013 (145) 4/21/2015 2015 (163) 2/7/2014 2011 (154) 10/30/2014 2014 (282) 2/7/2014 2011 (137) 8/28/2014 2013 (174) 2/7/2014 2013 (165) 2/7/2014 2011 (137) 8/28/2014 2013 (255) 3/5/2014 2013 (149) 8/28/2014 2013 (141) 8/22/2014 2014 (264) 2/7/2014 2011 (209) 2/7/2014 2004 (315) 2/7/2014 2011 (114) 2/7/2014 2000 (281) 2/7/2014 2002 (121) 8/28/2014 2014 (256) 2/7/2014 2011 (171) 4/30/2014 2013 (221) 2/7/2014 2011 (241) 2/7/2014 2008 (114) 12/23/2014 2014 (178) 2/7/2014 2011 (150) 3/25/2014 2013 (172) 2/7/2014 2003 (211) 2/7/2014 2013 Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State 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 Family Dollar Ormond Beach FL Family Dollar Palatka FL — 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 Family Dollar Claxton Family Dollar Cordele Family Dollar Fayetteville Family Dollar Helena FL GA GA GA GA GA GA GA Family Dollar Jeffersonville GA — 559 — 1,173 — 1,093 — 1,005 1,168 — — — — — — — — — — — 274 544 131 108 344 554 655 349 291 675 316 656 69 146 279 712 492 690 632 531 773 552 534 272 163 489 79 322 136 217 242 153 822 683 1,156 816 1,251 984 580 1,294 1,286 1,152 1,054 944 1,085 907 1,040 1,113 1,063 1,000 871 1,062 1,057 792 942 1,005 768 901 954 665 1,049 1,203 790 926 F-122 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 1,096 1,227 1,287 924 1,595 1,538 1,235 1,643 1,577 1,827 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 1,033 987 1,185 1,420 1,032 1,079 (210) 6/4/2013 2008 (130) 2/7/2014 2010 (165) 8/28/2014 2013 (124) 8/28/2014 2005 (251) 2/7/2014 2006 (212) 2/7/2014 2011 (148) 2/7/2014 2011 (182) 8/28/2014 2014 (181) 8/28/2014 2013 (233) 2/7/2014 2011 (221) 4/25/2014 2014 (225) 2/7/2014 2006 (153) 8/28/2014 2013 (174) 2/7/2014 2003 (210) 2/7/2014 2004 (244) 2/7/2014 2005 (162) 6/24/2014 2014 (222) 2/7/2014 2011 (198) 2/7/2014 2011 (228) 2/7/2014 2008 (231) 2/7/2014 2011 (169) 2/7/2014 2013 (90) 8/8/2014 2014 (141) 8/22/2014 2014 (119) 5/29/2014 2014 (133) 8/28/2014 2013 (137) 8/28/2014 1982 (137) 5/14/2014 2014 (161) 4/30/2014 2014 (158) 11/20/2014 2014 (174) 2/19/2014 2013 (132) 8/15/2014 2014 Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State 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 Fort Dodge Family Dollar Arco Family Dollar Homedale Family Dollar Kimberly 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 Family Dollar Greensburg Family Dollar Kansas City Family Dollar Kansas City Family Dollar Kansas City Family Dollar Topeka Family Dollar Wichita GA GA GA GA GA GA GA GA GA GA IA IA ID ID ID IL IL IL IN IN IN IN IN IN IN KS KS KS KS KS KS Family Dollar Bowling Green KY — — — 673 — — — — — — 822 408 — 973 — — — — — 613 — — 526 — 394 — — — 982 — — — 90 227 300 230 366 582 167 125 310 62 411 152 76 59 219 117 31 295 126 375 154 101 300 238 235 80 290 352 154 177 216 334 809 966 893 851 749 1,126 716 859 1,188 721 871 449 684 1,387 657 1,050 588 688 715 707 752 1,119 486 764 427 718 1,170 1,026 1,367 1,405 1,035 951 F-123 — — — — — — — — — — — — — — — — — — — — — — — — — — (5) — — — — — 899 1,193 1,193 1,081 1,115 1,708 883 984 1,498 783 1,282 601 760 1,446 876 1,167 619 983 841 1,082 906 1,220 786 1,002 662 798 1,455 1,378 1,521 1,582 1,251 1,285 (230) 11/9/2012 2012 (142) 8/28/2014 2014 (130) 8/28/2014 2013 (183) 2/7/2014 2011 (165) 2/19/2014 2013 (162) 8/28/2014 2013 (154) 3/12/2014 2013 (125) 8/28/2014 2014 (164) 9/26/2014 2014 (155) 3/12/2014 2013 (191) 2/7/2014 2003 (104) 2/7/2014 2002 (198) 9/18/2012 2012 (299) 2/7/2014 2006 (174) 4/10/2013 2013 (263) 7/11/2013 2012 (166) 12/31/2012 2012 (163) 10/29/2013 2013 (205) 10/1/2012 2012 (139) 2/7/2014 2003 (309) 4/30/2014 2013 (166) 8/28/2014 2014 (109) 2/7/2014 2000 (169) 2/7/2014 2003 (91) 2/7/2014 2011 (173) 9/9/2013 2012 (178) 11/6/2014 1995 (159) 12/18/2014 1995 (287) 2/7/2014 2002 (304) 2/7/2014 2004 (148) 8/28/2014 2013 (137) 8/28/2014 2013 Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Family Dollar Carlisle Family Dollar Garrison Family Dollar Rockholds Family Dollar Abbeville Family Dollar Alexandria Family Dollar Arcadia Family Dollar Avondale Family Dollar Chalmette Family Dollar Farmerville Family Dollar Kentwood KY KY KY LA LA LA LA LA LA LA — — — 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 Detroit Family Dollar Detroit Family Dollar Detroit Family Dollar Flint Family Dollar Hudson Family Dollar Jackson Family Dollar Kentwood Family Dollar Monroe Family Dollar Newaygo Family Dollar Pontiac Family Dollar Remus Family Dollar Saginaw Family Dollar Tustin LA LA LA MA MI MI MI MI MI MI MI MI MI MI MI MI MI MI MI MI Family Dollar Crosby MN 892 — — 1,222 — — — — — — — 833 — 739 — 689 962 — — — — 157 134 121 141 168 51 381 751 110 117 547 177 181 332 400 32 81 150 130 106 110 162 108 93 389 243 317 136 49 164 33 49 871 737 988 949 579 704 1,255 615 968 877 1,252 1,177 543 1,052 1,547 599 729 634 1,169 956 1,051 1,027 1,020 525 919 1,061 677 1,249 992 1,086 633 928 F-124 — — — — — — — — — — — — — — — — 86 — — — — — — — — — — — — — — — 1,028 871 1,109 1,090 747 755 1,636 1,366 1,078 994 1,799 1,354 724 1,384 1,947 631 896 784 1,299 1,062 1,161 1,189 1,128 618 1,308 1,304 994 1,385 1,041 1,250 666 977 (128) 8/28/2014 2014 (170) 2/20/2014 2012 (147) 8/28/2014 2014 (209) 2/7/2014 2005 (123) 2/7/2014 2005 (165) 2/20/2014 2010 (181) 8/28/2014 2013 (183) 5/3/2012 2011 (209) 2/7/2014 2003 (194) 2/7/2014 2003 (268) 2/7/2014 2005 (252) 2/7/2014 2005 (165) 3/30/2012 2011 (155) 8/28/2014 2013 (324) 2/7/2014 2003 (169) 12/18/2012 2012 (189) 7/11/2013 1950 (140) 2/7/2014 2002 (332) 11/27/2012 2011 (248) 5/2/2013 1964 (159) 8/28/2014 2005 (243) 2/26/2014 2014 (235) 2/7/2014 2005 (127) 9/12/2013 2007 (181) 2/7/2014 2001 (155) 8/28/2014 2013 (156) 2/7/2014 2002 (276) 2/7/2014 2003 (231) 1/2/2014 2012 (242) 2/7/2014 2003 (178) 12/18/2012 1995 (232) 7/11/2013 1985 Property City Family Dollar Ely State 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 Bassfield Family Dollar Biloxi Family Dollar Canton Family Dollar Carriere Family Dollar D'Iberville Family Dollar Drew Family Dollar Greenville Family Dollar Gulfport 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 MO MO MO MO MO MS MS MS MS MS MS MS MS MS MS MS MS MS MS MS MS MS MS Family Dollar Philadelphia MS Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — 409 969 683 1,211 970 — — — 972 — — — — — — — — — — — — — — — — — — — — — 231 32 93 179 277 119 142 38 415 168 215 258 445 96 310 210 200 241 11 125 209 270 218 312 225 225 106 225 289 64 342 53 1,008 608 566 1,391 812 1,705 1,338 719 — 671 1,357 1,310 1,038 752 575 1,142 599 561 1,039 872 626 629 654 1,237 674 676 650 723 749 578 1,001 897 F-125 — — — — — — — — 1,287 (4) — — — — — — — 1 — — — — — — — — — — — — — — 1,239 (227) 2/27/2014 2014 640 659 1,570 1,089 1,824 1,480 757 1,702 835 1,572 1,568 1,483 848 885 (147) 9/30/2013 1966 (116) 2/7/2014 1960 (283) 2/7/2014 2003 (171) 2/7/2014 2003 (364) 2/7/2014 2004 (283) 2/7/2014 2004 (177) 8/29/2013 2013 (139) 2/20/2015 2014 (200) 4/2/2012 2006 (279) 2/7/2014 2003 (269) 2/7/2014 2003 (298) 10/23/2012 2012 (172) 2/19/2014 2013 (174) 3/30/2012 2012 1,352 (165) 8/28/2014 2013 799 803 (182) 3/30/2012 2012 (168) 5/21/2012 2012 1,050 (177) 8/28/2014 1989 997 835 899 872 (189) 2/7/2014 2011 (187) 5/21/2012 2012 (182) 9/20/2012 2012 (186) 11/15/2012 2012 1,549 (269) 2/7/2014 2007 899 901 756 948 1,038 642 1,343 950 (188) 1/30/2013 2012 (197) 8/22/2012 2012 (185) 11/14/2012 2012 (166) 2/19/2014 2013 (142) 8/28/2014 1982 (170) 7/31/2012 2012 (143) 8/28/2014 2013 (132) 8/28/2014 2014 Property City Family Dollar Anaconda Family Dollar Ennis State 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 Charlotte Family Dollar Ellerbe Family Dollar Fayetteville Family Dollar Hickory Family Dollar Hiddenite Family Dollar Liberty Family Dollar Lumberton Family Dollar Lumberton 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, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — 773 953 1,064 — — — — — — — — — — — — — — — — 1,222 1,019 1,203 1,196 1,183 1,089 985 1,337 1,556 1,404 1,006 949 1,000 1,053 1,045 754 1,159 1,058 1,328 1,120 (159) 9/30/2014 2014 (142) 1/8/2015 2014 (88) 8/20/2014 2014 (194) 3/19/2015 1995 (139) 8/28/2014 2014 (109) 8/28/2014 2013 (102) 8/28/2014 2012 (206) 4/15/2014 2014 (153) 7/2/2014 2014 (145) 6/25/2014 2014 (146) 5/29/2014 2014 (147) 3/14/2014 2013 (115) 8/28/2014 2014 (122) 8/28/2014 2013 (117) 8/28/2014 2013 (145) 9/11/2013 1995 (152) 6/20/2014 2014 (127) 9/19/2014 2014 (189) 4/17/2014 2014 (174) 5/29/2014 2014 — — — — — — — — — — — — — — — — — — — — 164 246 250 132 251 322 291 352 490 412 225 267 215 221 243 151 146 164 428 185 1,058 — — — 932 767 694 985 1,066 992 781 682 785 832 802 603 1,013 894 900 935 F-126 Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (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 — — — — — — — 876 — — 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-127 — — 24 — — — 3 — (2) (174) — 969 1,113 (15) — — — — 1,147 — — — 1,199 1,122 1,294 — — — — — — — 962 841 (100) 6/17/2014 2014 (220) 1/31/2012 2010 1,071 (291) 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 (231) 1/31/2012 2010 (218) 12/30/2011 2011 (231) 12/19/2014 1995 (190) 12/18/2014 1995 (132) 4/26/2013 2007 (174) 12/12/2014 1989 (170) 12/31/2014 2014 (139) 2/7/2014 2001 (122) 5/29/2015 2014 (120) 3/6/2015 2014 (174) 1/30/2013 2009 (212) 12/18/2014 1995 (184) 2/7/2014 2004 (307) 2/7/2014 2007 (321) 2/7/2014 2008 (124) 5/29/2015 2015 (107) 6/30/2014 2014 (221) 7/16/2012 2011 (209) 2/7/2014 2004 (167) 2/11/2015 2014 (121) 2/25/2015 2015 (85) 2/5/2015 2014 (307) 2/7/2014 2009 (216) 9/13/2013 2012 (209) 9/13/2013 2013 (226) 6/1/2012 2012 (153) 2/7/2014 2005 (221) 5/4/2012 2012 (234) 9/21/2012 2012 Property City State Family Dollar Wells Family Dollar Altona Family Dollar Chateaugay Family Dollar Cincinnatus 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 NV NY NY NY 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 Family Dollar Poteau OK OK Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — 525 — — 852 — 460 — 1,079 1,370 — — — — — 798 660 — — — — — — — — — — — — 84 94 133 287 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 18 310 755 923 910 862 760 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-128 — — — — — — — — — — — — — — — — — — — — — — (2) — 968 — — — 988 — 995 924 839 1,017 1,043 1,149 783 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 1,234 (225) 5/11/2012 2011 (211) 2/21/2014 2014 (207) 2/20/2014 2014 (196) 12/30/2013 2013 (161) 2/7/2014 2003 (296) 5/7/2014 2013 (155) 3/25/2015 2014 (243) 2/7/2014 2005 (160) 8/28/2014 2012 (157) 2/7/2014 2002 (163) 8/28/2014 2001 (338) 2/7/2014 2003 (392) 2/7/2014 1994 (142) 8/28/2014 2013 (164) 8/28/2014 1940 (105) 8/28/2014 2002 (171) 8/28/2014 2013 (115) 4/28/2014 1989 (217) 2/7/2014 2002 (187) 2/7/2014 2001 (251) 2/25/2013 2012 (227) 7/11/2013 1942 (197) 9/11/2012 2012 (184) 8/28/2014 2000 (155) 3/2/2015 1995 (91) 10/14/2015 2015 (133) 10/16/2014 2014 (131) 2/7/2014 2000 (106) 5/15/2015 2015 (144) 8/28/2014 2013 (109) 11/5/2015 2015 (105) 8/7/2015 2015 Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State 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 Family Dollar Arlington 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 TX — — — — — — — — — — — — — — — — — — — — — — — — — 638 1,251 973 — — — — 40 150 220 196 146 429 489 244 249 313 167 231 193 175 229 115 32 140 85 35 117 72 74 323 248 215 376 336 334 200 134 300 768 — 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-129 — 912 — — — — — — — — — — — — — — — 1,021 — 1,092 1 1,072 — — — — — — — — — 1,058 808 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 1,358 (236) 1/6/2012 2011 (79) 4/15/2015 2015 (258) 7/30/2012 2012 (142) 5/30/2014 2013 (116) 5/23/2014 2014 (155) 3/12/2014 2014 (114) 2/3/2015 2013 (117) 6/4/2014 2014 (108) 8/28/2014 2013 (137) 9/30/2014 2014 (167) 4/30/2014 2014 (199) 3/27/2014 2013 (120) 2/23/2015 2013 (119) 9/3/2014 2014 (160) 8/28/2014 2010 (90) 8/6/2014 2006 (157) 6/14/2013 1995 (104) 5/1/2015 2014 (235) 1/31/2012 2010 (93) 5/12/2015 2015 (143) 10/10/2014 2014 (125) 3/31/2015 2015 (105) 7/23/2013 2006 (123) 8/28/2014 2013 (220) 2/7/2014 2004 (171) 2/7/2014 2003 (327) 2/7/2014 2005 (248) 2/7/2014 2003 (200) 8/28/2014 1976 (139) 8/28/2014 2014 (131) 8/28/2014 2013 (101) 12/4/2015 1995 Property City State Family Dollar Arlington Family Dollar Avinger 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 Family Dollar Jacksonville 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, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — 654 — — — — — — — 970 409 627 681 — — — — — — — 886 — — — 911 425 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 — — 190 195 — 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 — 1,003 F-130 1,112 — 1,209 — — — — — 922 22 — — — — — — — — 100 — — — 1,015 — — — — — — — 902 — 1,537 801 1,527 1,726 1,045 1,031 823 1,182 997 712 905 993 832 (46) 2/13/2015 2014 (218) 10/22/2012 2012 (110) 4/10/2015 2015 (290) 2/7/2014 2003 (170) 2/7/2014 2003 (168) 2/7/2014 2003 (111) 8/28/2014 2014 (201) 2/7/2014 2002 (139) 2/6/2015 1995 (165) 5/29/2012 2012 (164) 9/10/2013 2013 (266) 12/10/2012 2012 (181) 9/17/2013 2013 1,525 (245) 2/7/2014 2002 617 968 1,058 1,049 766 895 717 1,211 1,365 870 1,378 1,788 1,190 897 1,421 1,450 1,092 1,198 (101) 2/7/2014 2003 (149) 2/7/2014 2004 (185) 2/7/2014 2010 (127) 8/28/2014 2013 (170) 7/6/2012 2012 (209) 8/6/2013 2013 (211) 12/30/2011 2010 (97) 8/21/2015 1995 (81) 11/3/2014 2015 (184) 4/26/2013 1995 (226) 2/7/2014 2002 (260) 2/7/2014 2009 (218) 2/7/2014 2002 (148) 2/7/2014 2002 (238) 2/7/2014 2002 (35) 2/7/2014 1981 (110) 1/5/2015 2014 (221) 3/21/2014 2014 Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State 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 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 — — 557 — 1,153 — — 857 — — — — 625 — — — 671 969 — 1,044 542 — — 550 972 — 891 800 864 598 506 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 35 232 198 299 260 211 658 817 489 740 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-131 — — — — — — — — 1,146 (8) (184) — — — — — — — — — — — — — — — — — — — — 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 (201) 2/29/2012 2011 (119) 8/28/2014 2013 (108) 2/7/2014 2004 (199) 3/27/2013 1995 (331) 2/7/2014 2004 (144) 2/7/2014 2001 (130) 8/28/2014 2013 (230) 2/7/2014 2004 (129) 5/29/2015 1995 (117) 9/1/2015 2015 (121) 7/9/2015 2015 (109) 2/7/2014 2000 (188) 2/7/2014 2004 (193) 12/12/2012 2012 (174) 11/20/2013 2013 (109) 8/28/2014 2013 (195) 2/7/2014 2000 (264) 2/7/2014 2002 (214) 8/1/2013 2013 (299) 2/7/2014 2005 (149) 2/7/2014 2002 (141) 8/28/2014 2013 (269) 2/7/2014 2003 (172) 2/7/2014 2003 (229) 2/7/2014 2002 (136) 8/28/2014 2013 (238) 2/7/2014 2011 (215) 2/7/2014 2002 (218) 2/7/2014 2004 (140) 2/7/2014 2004 (121) 2/7/2014 2004 Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State 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 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 Farmers Insurance Mercer Island WA Fazoli's Carmel FedEx Homewood IN AL 728 1,143 598 602 — — — 416 — 440 — 646 608 — — 948 — — — — — 970 — — — — — — — — — — 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 — — — — — — — — — — — — — — — — — — — — — 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 (191) 2/7/2014 2004 (338) 2/7/2014 2004 (164) 2/7/2014 2004 (180) 2/7/2014 2004 (121) 8/28/2014 2013 (209) 12/31/2012 1995 (96) 8/28/2014 2001 (116) 2/7/2014 2003 (38) 2/7/2014 2003 (116) 2/7/2014 2001 (174) 10/10/2014 2014 (194) 2/7/2014 2007 (186) 2/7/2014 1978 (186) 7/2/2013 2012 (222) 2/26/2014 2014 (269) 2/7/2014 2003 (82) 4/18/2014 2013 (134) 8/28/2014 2013 (230) 2/7/2014 2011 (189) 12/12/2013 2013 (228) 2/26/2014 2014 (288) 2/7/2014 2003 (199) 8/30/2013 2013 (202) 7/11/2013 2013 (166) 7/11/2013 2012 (234) 2/22/2013 2013 (202) 9/13/2013 2013 (167) 5/9/2013 1995 9,343 (1,716) 2/7/2014 2010 52,495 (5,714) 11/5/2013 1982 949 1,301 (123) 7/31/2013 1986 (199) 6/27/2013 2000 1,393 7,950 24,285 28,210 427 522 522 779 F-132 Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State 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 FedEx Tempe Yuma Chico Commerce City Melbourne Des Moines Ottumwa Waterloo Effingham Kankakee Quincy Evansville Kokomo Lafayette AZ AZ CA CO FL IA IA IA IL IL IL IN IN IN Independence KS Hazard London KY KY Bossier City LA Grand Rapids MI Port Huron MI Roseville Mccomb Butte Greenville Belmont Wendover Blauvelt Marcy Plattsburg Lebanon Northwood Tulsa MN MS MT NC NH NV NY NY NY OH OH OK 15,347 (2,202) 6/25/2014 2004 2,076 3,207 (658) 10/17/2012 2011 (861) 11/9/2012 2006 33,173 (8,779) 3/20/2012 2007 1,592 2,277 5,506 3,034 (390) 7/26/2013 2001 (403) 4/18/2013 1986 (1,019) 10/30/2012 2012 (842) 3/22/2013 2006 16,702 (2,715) 2/7/2014 2008 1,474 5,483 3,326 7,169 4,896 2,280 4,300 3,501 6,518 8,986 1,246 9,744 6,028 (377) 5/31/2012 2003 (934) 9/28/2012 2012 (873) 5/31/2012 1998 (1,367) 3/16/2012 2012 (734) 2/7/2014 2008 (677) 10/30/2012 2012 (1,290) 9/28/2012 2012 (809) 10/11/2013 2013 (1,198) 2/7/2014 2009 (2,337) 6/14/2012 2012 (316) 5/31/2013 2003 (2,564) 11/30/2012 2012 (736) 2/7/2014 2008 2,914 12,300 — 308 2,076 2,776 6,556 26,224 6,811 1,875 14,827 — — — — — — — — 159 733 205 152 — — — — 2,157 — — — — — — — — — — — — 195 371 665 186 768 114 215 350 295 1,797 125 1,462 548 403 363 265 262 133 — 123 393 — 183 — — 176 2,552 2,749 1,433 1,361 2,882 1,103 2,101 3,011 2,661 — 3,541 3,442 4,128 2,166 4,085 3,151 6,223 7,189 1,121 8,282 — — — — — — — — 3,268 2,212 6,903 2,386 1,483 7,653 2,763 10,819 (2,899) 9/27/2011 2001 — — — — — — — 486 — 7,266 2,651 1,745 (2,329) 2/22/2012 2006 (820) 12/29/2011 1991 (441) 2/25/2013 2012 41,199 (8,870) 4/5/2012 2012 6,134 4,783 9,944 6,657 9,153 (1,496) 9/5/2014 2006 (830) 2/7/2014 2008 (2,381) 8/26/2013 2013 (995) 2/7/2014 1998 (2,934) 2/22/2012 2008 26,100 14,420 26,779 — 2,614 339 801 — 1,492 2,410 — 674 458 5,795 3,982 8,452 5,497 8,695 F-133 Property FedEx FedEx FedEx FedEx FedEx FedEx FedEx FedEx FedEx FedEx Fire Mountain Buffet Fire Mountain Buffet First Bank Fleming's Steakhouse Flint Energy Technologies City Tulsa Tinicum Rapid City Blountville Humboldt Bryan Omak Wenatchee Menomonee Falls OK PA SD TN TN TX WA WA WI Parkersburg WV 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 Guthrie 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 Fresenius Medical Care Peru CA NC OK TX AL AL AL FL IL IL IL IN Fresenius Medical Care Bossier City LA Fresenius Medical Care Caro Fresenius Medical Care Jackson Fresenius Medical Care Albemarle MI MI NC Initial Costs (1) Encumbrances at December 31, 2017 State Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction 1,476 18,054 555 549 20,085 (4,470) 3/31/2014 1999 32,729 (8,669) 8/15/2013 2013 2,741 4,584 — — — — — — — — — — — — — — — — — 305 562 239 1,422 252 266 193 245 243 630 1,152 284 1,859 32,180 5,056 4,543 4,763 1,425 2,393 3,671 — — 41 — — — — 1,308 (1,241) 1,305 (1,228) 1,470 3,055 1,752 7,711 4 — — — 4,215 14,555 7,630 5,618 4,782 6,226 1,677 2,659 (1,162) 5/8/2015 2007 (1,706) 2/3/2012 2009 (1,463) 7/11/2012 2008 (1,203) 6/15/2012 1995 (450) 9/27/2012 2012 (756) 9/27/2012 1995 18,770 (1,315) 2/18/2016 2015 3,864 (1,159) 9/20/2012 2012 312 320 2,104 4,207 2,036 9,570 (47) 1/8/2014 1997 (58) 1/8/2014 2000 (332) 10/1/2013 1980 (719) 2/7/2014 2004 (283) 9/19/2014 2014 (248) 12/13/2016 2015 21,600 10,314 27,983 141 38,438 (5,477) 2/7/2014 2006 — — — — — — — 2,294 — — — — — 1,948 — 1,269 393 123 — 287 278 115 287 588 94 69 120 92 137 139 2,950 1,305 6,019 2,035 2,580 2,505 2,180 2,584 1,764 1,792 1,305 682 1,744 2,603 1,253 F-134 — — — — — — — 15 — 61 — — — — — 4,219 1,698 6,142 2,035 2,867 2,783 2,295 2,886 2,352 1,947 1,374 802 1,836 2,740 1,392 (690) 2/7/2014 1999 (219) 6/25/2014 1979 (973) 6/25/2014 2008 (426) 7/8/2013 2006 (541) 7/8/2013 2009 (525) 7/8/2013 2009 (457) 7/8/2013 2008 (642) 7/13/2012 1996 (438) 7/31/2012 1960 (453) 7/31/2012 1980 (327) 6/27/2012 1982 (159) 1/30/2013 2008 (437) 6/5/2012 1995 (653) 6/5/2012 1995 (277) 4/30/2013 2008 Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State 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 The Fresh Market Winston- Salem Fresh Thyme Farmers Market Canton NC NC NC NC NC NC NC NC NC NC NC NC NC NC OH TX NC MI Longmont CO Front Range Community College Front Range Community College Furr's Longmont Garland Gainsville Fuel Cleburne Gastro Pub Tulsa GE Aviation Auburn GE Engine Winfield General Electric Longmont General Mills Geneva General Mills Fort Wayne General Service Administration General Service Administration General Service Administration Mobile Craig Cocoa CO TX TX OK AL KS CO IL IN AL CO FL — 2,373 — — — — — — — — — — — — — — — 203 323 139 201 420 134 178 117 81 101 74 73 275 75 399 377 196 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 4,562 — 1,361 6,976 — — — — 407 2,428 1,150 1,529 70 9,067 3,715 — — — 3 6 — — — — — — — — — — 6 (42) — — 55 609 — — 1,355 3,226 2,797 2,026 2,799 2,685 3,557 2,333 1,628 2,014 1,478 1,462 1,374 1,503 1,003 1,467 (255) 4/30/2013 2012 (642) 4/30/2013 2012 (566) 6/28/2013 1995 (387) 6/28/2013 2002 (508) 6/28/2013 1995 (545) 6/28/2013 2004 (721) 6/28/2013 1999 (473) 6/28/2013 1986 (330) 6/28/2013 2009 (408) 6/28/2013 2000 (300) 6/28/2013 2010 (296) 6/28/2013 2008 (243) 4/30/2013 2011 (341) 11/13/2012 2003 (151) 6/5/2012 1995 (246) 2/28/2013 1958 4,758 (843) 2/7/2014 2007 8,337 (134) 5/18/2017 2017 2,890 (601) 1/8/2014 1987 10,826 5,244 70 (2,262) 1/8/2014 (967) 6/27/2013 — 6/25/2014 1988 2008 2009 27,604 1,253 70,274 1,869 73,396 (14,021) 11/5/2013 1995 24,133 1,627 30,920 — — — — — — 500 1,078 1,402 7,457 2,533 268 129 253 5,087 15,640 22,371 48,130 5,095 1,159 1,435 F-135 — — 855 — — 49 16 15 32,547 (8,259) 11/21/2012 1995 6,165 (3,207) 5/6/2014 1951 17,897 (4,002) 1/8/2014 1993 29,828 (7,340) 5/23/2012 1998 50,663 (15,051) 10/18/2012 2012 5,412 1,304 1,703 (1,501) 6/19/2012 1995 (362) 12/30/2011 1995 (450) 12/13/2011 1995 Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Grangeville ID 2,100 Hobbs NM General Service Administration General Service Administration General Service Administration General Service Administration General Service Administration General Service Administration General Service Administration Freeport Plattsburgh Warren Ponce Fort Worth Gloucester 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 Big Springs Levelland Midland Midland Monahans Odessa Odessa San Angelo Snyder Snyder GM Financial Arlington Golden Corral Cullman Golden Corral Gilbert Golden Corral Goodyear Golden Corral Surprise Golden Corral Bakersfield Golden Corral Palatka Golden Corral Albany Golden Corral Brunswick NY NY PA PR TX VA OH OH MI TX TX TX TX TX TX TX TX TX TX TX AL AZ AZ AZ CA FL GA GA Golden Corral Council Bluffs IA Golden Corral Clarksville IN — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 317 843 508 341 6,023 3,372 4,572 3,114 27 — — — 1,780 9,313 (4,560) 477 287 3,549 2,210 294 358 426 42 1,063 1,013 50 104 500 821 466 174 4,294 1,628 16,736 15,649 6,694 1,129 599 1,887 528 968 538 1,259 3,891 1,658 588 1,189 7,901 35,553 (4) — — — — — — — — — — — — — — — — 847 871 686 1,258 2,664 853 460 390 1,140 1,061 2,390 (2,143) — — — — (471) — — — — 2,910 1,939 4,068 2,078 1,048 1,863 2,093 1,460 1,344 F-136 6,367 4,215 5,080 3,455 6,533 4,767 1,915 (1,824) 3/5/2012 2007 (1,040) 1/10/2012 1995 (1,344) 6/19/2012 2008 (919) 6/19/2012 2008 (444) 11/5/2013 1995 (1,274) 5/9/2012 2010 (479) 6/20/2012 1995 20,285 (3,059) 2/7/2014 2002 17,859 (2,780) 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 (1,359) 2/7/2014 2009 (214) 6/12/2014 2013 (117) 6/25/2014 2012 (353) 6/25/2014 1997 (103) 6/12/2014 2009 (167) 6/12/2014 2010 (102) 6/12/2014 2011 (194) 6/25/2014 1963 (741) 6/12/2014 1963 (284) 6/12/2014 2012 (119) 6/12/2014 2005 (189) 6/12/2014 1975 43,454 (8,007) 11/5/2013 1998 1,094 3,781 2,625 5,326 4,742 1,430 2,323 2,483 2,600 2,405 (96) 2/7/2014 1996 (758) 6/27/2013 2006 (505) 6/27/2013 2006 (1,059) 6/27/2013 2007 (533) 2/7/2014 2011 (120) 6/27/2013 1997 (476) 6/27/2013 1995 (535) 6/27/2013 1995 (373) 6/27/2013 1995 (399) 2/7/2014 2002 Property City State Golden Corral Evansville Golden Corral Kokomo Golden Corral Richmond Golden Corral Wichita Golden Corral Henderson Golden Corral Louisville Golden Corral Owensboro IN IN IN KS KY KY KY Golden Corral Coon Rapids MN Golden Corral Independence MO Golden Corral Flowood Golden Corral Horn Lake Golden Corral Aberdeen Golden Corral Burlington Golden Corral Hickory Golden Corral Bellevue Golden Corral Lincoln MS MS NC NC NC NE NE Golden Corral Farmington NM Golden Corral Akron 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, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction 3,377 2,887 1,451 1,866 2,186 2,193 959 906 3,862 3,410 1,069 2,256 3,159 2,918 1,953 3,230 1,421 2,773 2,571 2,782 2,760 3,424 3,246 2,008 3,540 (692) 6/27/2013 1995 (539) 6/27/2013 1995 (185) 2/7/2014 2002 (307) 7/31/2013 2000 (405) 6/27/2013 1995 (276) 2/7/2014 2001 (71) 2/7/2014 1997 (60) 2/7/2014 2003 (574) 2/7/2014 2010 (698) 6/27/2013 1995 (93) 2/7/2014 1995 (400) 6/27/2013 1995 (593) 6/27/2013 1995 (679) 6/27/2013 1995 (366) 6/27/2013 1995 (749) 6/27/2013 1995 (106) 6/27/2013 1995 (438) 2/7/2014 2003 (367) 2/7/2014 2000 (465) 2/7/2014 2002 (444) 2/7/2014 1999 (462) 2/7/2014 2004 (633) 6/27/2013 1995 (308) 2/7/2014 2000 (583) 2/7/2014 2002 — — — — — — — — — — — — — — — — — — — — — — — — — 670 780 728 560 600 1,020 1,244 1,611 1,425 680 925 690 840 260 520 300 270 640 713 647 694 1,109 770 579 774 2,707 2,107 723 1,306 1,586 1,173 — — — — — — 1,656 (1,941) 2,188 (2,893) 2,437 2,730 — — 2,463 (2,319) 1,566 2,319 2,658 1,433 2,930 — — — — — 3,174 (2,023) 2,133 1,858 2,135 2,066 2,315 2,476 1,429 2,766 — — — — — — — — F-137 Property City State Encumbrances at December 31, 2017 Initial Costs (1) Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (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 1,248 534 1,085 — — — — — — — — — — — — — — — — — — — — — — — — 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 Golden Corral Beckley WV Goodyear Cumming Goodyear Cumming Goodyear Mcdonough Goodyear Stockbridge Goodyear Dekalb GA GA GA GA IL 11,033 1,797 21,264 13,432 1,222 32,119 20,147 4,476 44,516 Goodyear Lockbourne OH 13,144 3,107 28,868 Goodyear York Goodyear Columbia PA SC Goodyear Corpus Christi TX 22,834 1,980 53,396 — — 656 753 2,077 1,737 Goodyear Terrell TX 15,350 2,516 34,804 F-138 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 — — — — — — — — (983) — — — — — — — (64) — — — — 2,258 (2,507) 2,516 1,915 — — — — — — — — — — 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 3,026 999 3,050 3,000 (325) 2/7/2014 2004 (240) 2/7/2014 1999 (380) 2/7/2014 2007 (210) 2/7/2014 2004 (518) 2/7/2014 2004 (227) 2/7/2014 2000 (664) 2/7/2014 2004 (529) 6/27/2013 2002 (172) 6/27/2013 1991 (549) 6/27/2013 1994 (994) 6/27/2013 1995 (130) 2/7/2014 1982 (544) 6/27/2013 1995 (495) 6/27/2013 1995 (421) 7/31/2013 1998 (447) 6/27/2013 1990 (637) 6/27/2013 1995 (379) 2/7/2014 2012 (331) 2/7/2014 2011 (713) 7/31/2013 2001 (582) 6/27/2013 1995 (82) 2/7/2014 1995 (490) 2/7/2014 2010 (396) 2/7/2014 2010 23,061 (5,199) 1/8/2014 1995 33,341 (8,117) 1/8/2014 1995 48,992 (11,245) 1/8/2014 1999 31,975 (6,984) 1/8/2014 1998 55,376 (12,766) 1/8/2014 2001 2,733 2,490 (413) 2/7/2014 2010 (337) 2/7/2014 2008 37,320 (8,779) 1/8/2014 1998 Property City State The Gorilla Glue Company Cincinnati Grandy's Ardmore Grandy's Moore OH 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 NC NC Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — 5,563 34,887 454 320 260 320 734 773 847 725 357 777 811 623 859 847 871 780 871 871 455 60 — 428 380 289 — — — — — — — — — — — — — — 6,022 639 — — — — — — (178) — — — — — — — — — — — — — — 40,450 (468) 7/28/2017 1978 454 748 640 609 734 595 847 725 357 777 811 623 859 847 871 780 871 871 — 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 (833) 6/12/2014 1980 (163) 6/27/2013 1995 18,100 1,798 41,214 (50) 42,962 (7,406) 2/7/2014 1992 17,990 1,082 22,565 — — — — — — — — — 175 875 419 395 129 488 320 777 300 937 583 435 553 518 539 480 553 904 F-139 — — — — — — — (6) — — 23,647 (7,169) 12/21/2012 1989 1,112 1,458 854 948 647 1,027 794 1,330 1,204 (197) 3/28/2014 1986 (137) 7/31/2013 1993 (110) 6/27/2013 1991 (139) 6/27/2013 1992 (122) 7/31/2013 1980 (136) 6/27/2013 1983 (121) 6/27/2013 1987 (134) 6/27/2013 1992 (223) 6/27/2013 1995 Property City State Hardee's Hardee's Sparta Akron Hardee's Jefferson Hardee's Minerva Hardee's Hardee's Seville Aiken Hardee's Chapin Hardee's Chester NC 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 HD Supply Santee Healthnow Buffalo Helmer Scientific Noblesville Hobby Lobby Algonquin Hobby Lobby Avon Hobby Lobby Kannapolis Hobby Lobby Columbia OK NC CA NY IN IL IN NC TN Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — 372 207 242 214 151 220 380 586 270 390 300 346 353 343 220 1,688 270 499 592 839 705 635 572 130 1,910 3,239 346 483 363 321 454 450 741 563 844 893 689 406 431 515 896 9,563 4,664 3,281 4,353 4,486 4,159 4,708 2,991 3,387 — — — — — — — — — — — — — — — — — — — — — — — 4 — — 718 690 605 535 605 670 1,121 1,149 1,114 1,283 989 752 784 858 (87) 6/27/2013 1983 (113) 7/31/2013 1990 (85) 7/31/2013 1989 (76) 7/31/2013 1990 (107) 7/31/2013 1989 (111) 6/27/2013 1995 (183) 6/27/2013 1995 (104) 7/31/2013 1994 (208) 6/27/2013 1995 (221) 6/27/2013 1995 (170) 6/27/2013 1995 (102) 6/27/2013 1982 (101) 7/31/2013 1991 (121) 7/31/2013 1990 1,116 (221) 6/27/2013 1995 11,251 (2,537) 7/31/2013 2008 4,934 3,780 4,945 5,325 4,864 5,343 3,567 3,517 3,239 (989) 2/7/2014 2014 (685) 2/7/2014 2012 (904) 2/7/2014 2013 (887) 2/7/2014 2013 (835) 2/7/2014 2008 (951) 2/7/2014 2013 (290) 2/21/2014 2014 (680) 3/5/2014 2014 — 2/7/2014 2009 — 2,400 7,312 430 10,142 (1,908) 2/21/2014 1995 41,555 2,569 89,399 — — — — — 1,431 10,699 998 1,439 1,929 951 4,580 5,855 4,227 2,467 F-140 — — — — — 38 91,968 (13,871) 2/7/2014 2007 12,130 (137) 7/27/2017 2012 5,578 7,294 6,156 3,456 (76) 6/23/2017 2012 (1,129) 2/7/2014 2007 (849) 2/7/2014 2004 (563) 2/26/2014 1986 Property City State 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 Home Town Buffet Home Town Buffet Home Town Buffet Home Town Buffet Rialto Santa Maria Newark Union Gap WA Houghton Town Center Tucson Huntington National Bank Huntington National Bank Conneaut Jefferson Hy-Vee Vermillion IFM Efectors Malvern UT AZ CA GA GA LA NV SC TX VA CA CA DE AZ OH OH SD PA TX AL AL Katy Auburn Homewood Montgomery AL Castle Rock Greeley Loveland Pueblo CO CO CO CO Bossier City LA Natchitoches LA Roseville MI Kansas City MO Southaven MS Igloo IHOP IHOP IHOP IHOP IHOP IHOP IHOP IHOP IHOP IHOP IHOP IHOP Encumbrances at December 31, 2017 — — Land 2,683 6,251 6,650 12,518 — — 4,583 1,809 1,996 5,131 Initial Costs (1) Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Buildings, Fixtures and Improvements Accumulated Depreciation (3) (5) Date Acquired Date of Construction 3,079 — — — 12,331 — — 15,463 — — — — — 1 — — — — 5,762 6,251 12,518 4,583 (671) 2/7/2014 2008 — — — 2/7/2014 2005 2/7/2014 1998 2/7/2014 2009 14,141 (2,203) 2/7/2014 2012 5,131 7,907 — — 2/7/2014 1998 2/7/2014 1998 18,374 (4,986) 11/9/2009 2009 1,599 — 2/7/2014 1998 18,405 1,136 23,496 (5,339) 2/7/2014 2008 — — — — — — — — — — — 2,922 — — — — — — — — — — — — — — 7,907 2,911 1,599 3,955 265 191 177 253 205 255 409 1,816 5,617 1,111 610 941 320 120 181 330 541 750 340 630 350 1,176 8,565 1,261 (1,046) 1,006 1,129 (763) (739) 1,320 (1,223) — 6 7 — 477 765 3,684 480 434 567 350 9,741 688 1,027 4,093 (108) 1/8/2014 1998 (55) 1/8/2014 2002 (95) 1/8/2014 1983 (75) 1/8/2014 2002 (9) 12/28/2017 2017 (108) 10/1/2013 1971 (173) 10/1/2013 1963 (1,219) 4/8/2013 1986 — 9,747 11,563 (840) 8/27/2014 2014 38,470 933 1,762 — — — — (517) — — — — — — 125 — — 2,334 1,538 1,534 1,589 1,342 89 1,071 1,002 2,108 F-141 44,087 (6,887) 2/7/2014 2004 2,044 2,372 424 2,654 1,658 1,715 1,919 1,883 839 1,536 1,632 2,458 (243) 6/27/2013 1998 (450) 6/27/2013 1995 — 6/27/2013 1998 (597) 6/27/2013 1995 (393) 6/27/2013 1995 (53) 6/27/2013 1995 (406) 6/27/2013 1995 (349) 6/27/2013 1998 (23) 6/27/2013 1995 (275) 6/27/2013 1995 (256) 6/27/2013 1995 (539) 6/27/2013 1995 Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State IHOP IHOP IHOP IHOP IHOP IHOP IHOP IHOP IHOP IHOP IHOP Greenville Clarksville SC 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 Irving Oil Dover Irving Oil Rochester WA NJ NY MA OH PA KY ME ME ME ME ME ME ME ME ME ME NH NH NH Irving Oil Dummerston VT Irving Oil Rutland VT — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 610 530 600 698 1,176 560 760 380 370 650 780 1,367 4,107 1,551 1,346 1,687 1,297 — 1,879 2,462 1,028 2,018 2,055 1,878 — — — — — — — — — — — 2,161 1,876 2,287 1,995 1,176 2,439 3,222 1,408 2,388 2,705 2,658 (396) 6/27/2013 1995 (344) 6/27/2013 1995 (431) 6/27/2013 1995 (305) 7/31/2013 1998 — 7/31/2013 1995 (480) 6/27/2013 1995 (629) 6/27/2013 1995 (263) 6/27/2013 1995 (516) 6/27/2013 1995 (665) 6/27/2013 1995 (480) 6/27/2013 1995 14,223 20,347 (90) — 15,500 (5,249) 4/30/2014 1999 24,454 (4,068) 6/25/2014 1986 11,784 — 27,888 39,672 (3,504) 6/27/2014 1965 405 197 3,642 1,263 6,152 — 5,310 6,349 (1,217) 9/28/2012 1954 (1,032) 7/2/2014 1979 3,120 80,689 1,561 85,370 (12,096) 6/5/2014 1994 339 182 413 187 358 469 360 228 619 541 173 380 290 185 249 698 331 550 404 352 541 360 272 222 492 525 717 747 353 220 F-142 — — — — — — — — — — — — — — — 1,037 (170) 2/7/2014 1997 513 963 591 710 (83) 2/7/2014 1990 (143) 2/7/2014 1993 (97) 2/7/2014 1990 (100) 2/7/2014 1973 1,010 (146) 2/7/2014 1980 720 500 841 1,033 698 1,097 1,037 538 469 (91) 2/7/2014 1994 (66) 2/7/2014 1984 (78) 2/7/2014 1995 (135) 2/7/2014 1988 (119) 2/7/2014 2004 (170) 2/7/2014 1988 (171) 2/7/2014 1970 (95) 2/7/2014 1993 (54) 2/7/2014 1984 Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State 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 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 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 1,814 395 1,897 1,562 2,175 2,031 1,846 (104) 2/7/2014 1990 (553) 6/27/2013 1995 (358) 6/27/2013 1995 (599) 6/27/2013 1995 (261) 7/31/2013 1991 (422) 6/27/2013 1995 (353) 6/27/2013 1995 (239) 6/27/2013 1995 (374) 6/27/2013 1995 (369) 6/27/2013 1995 (322) 6/27/2013 1995 (336) 6/27/2013 1995 (327) 6/27/2013 1995 (337) 6/27/2013 1995 (387) 7/31/2013 2000 (350) 6/27/2013 1995 (405) 6/27/2013 1995 (421) 6/27/2013 1995 (373) 6/27/2013 1995 (358) 6/27/2013 1995 (459) 6/27/2013 1995 (332) 6/27/2013 1995 (9) 6/27/2013 1995 (355) 6/27/2013 1995 (290) 6/27/2013 1995 (456) 6/27/2013 1995 (401) 6/27/2013 1995 (345) 6/27/2013 1995 — — — — — — — — — — — — — — — — — — — — — — — — — — — — 108 110 450 280 476 590 240 200 502 420 580 620 420 420 291 400 460 490 600 380 600 470 300 460 390 330 410 450 437 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 (866) 1,437 1,172 1,845 1,621 1,396 — — — — — F-143 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 Johnny Carinos Rogers Johnny Carinos Columbus Johnny Carinos Muncie Johnny Carinos Houston Johnny Carinos Midland Katun Corp. Davenport Keane Frac Pleasanton Kentucky Fried Chicken Kentucky Fried Chicken Kentucky Fried Chicken Kentucky Fried Chicken Kentucky Fried Chicken Bloomington Charleston Decatur Dolton Elmhurst TX MN AR IN IN TX TX IA TX IL IL IL IL IL Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 330 440 450 560 451 340 270 460 400 470 350 570 450 454 450 480 380 734 423 994 997 809 540 1,328 998 454 328 576 282 276 167 242 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 2,540 1,888 2,160 2,656 2,329 7,485 — — — — — — — — — — — — — — — — — — — — — — — — — — 4,804 (2,858) — — — — — 1,466 1,514 1,619 946 969 F-144 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 3,537 2,697 2,700 3,984 3,327 7,939 2,274 2,042 1,796 1,895 1,113 1,211 (337) 6/27/2013 1995 (381) 6/27/2013 1995 (386) 6/27/2013 1995 (408) 6/27/2013 1995 (197) 7/31/2013 1991 (326) 6/27/2013 1995 (410) 6/27/2013 1995 (347) 6/27/2013 1995 (307) 6/27/2013 1995 (310) 6/27/2013 1995 (309) 6/27/2013 1995 (331) 6/27/2013 1995 (367) 6/27/2013 1995 (212) 6/27/2013 1991 (253) 6/27/2013 1995 (328) 6/27/2013 1995 (306) 6/27/2013 1995 — 7/31/2013 1995 (180) 6/9/2014 2008 (350) 2/7/2014 2012 (661) 6/27/2013 2001 (491) 8/30/2013 2004 (562) 8/30/2013 2003 (692) 6/27/2013 2002 (618) 7/31/2013 2000 (1,158) 5/6/2014 1993 (148) 9/25/2014 2014 (369) 6/27/2013 2004 (381) 6/27/2013 2003 (407) 6/27/2013 2001 (223) 7/31/2013 1975 (228) 7/31/2013 1990 Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (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 / 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 Kentucky Fried Chicken / A&W Kentucky Fried Chicken / A&W Hazel Crest Homewood Matteson Mattoon Oak Forest Rockford Springfield Springfield Westchester IL IL IL IL IL IL IL IL IL Crawfordsville IN Frankfort Franklin Greenwood Lebanon Deming Las Cruces Warren Appleton Granite City Allison Park Green Bay Milwaukee Milwaukee Milwaukee Milwaukee Milwaukee South Milwaukee Wauwatosa West Bend IN IN IN IN NM NM OH PA WI IL PA WI WI WI WI WI WI WI WI WI FL Germantown WI Kentucky Fried Chicken New Kensington Ker's WingHouse Bar and Grill Brandon — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 153 660 399 113 185 201 267 212 238 159 99 205 339 337 220 270 426 324 350 102 246 368 208 396 281 89 197 138 197 135 185 340 1,376 1,541 2,259 1,019 1,047 1,142 1,068 1,203 952 1,068 893 1,375 1,405 1,348 691 498 640 487 874 1,083 683 913 1,022 773 795 750 975 924 695 615 705 654 F-145 — — — — — — — — — — — — — — — — (421) (260) — — — — — — — — — — — — — — 1,529 2,201 2,658 1,132 1,232 1,343 1,335 1,415 1,190 1,227 992 1,580 1,744 1,685 911 768 645 551 1,224 1,185 929 1,281 1,230 1,169 1,076 839 1,172 1,062 892 750 890 994 (324) 7/31/2013 1982 (362) 7/31/2013 1992 (531) 7/31/2013 1973 (240) 7/31/2013 1973 (246) 7/31/2013 1955 (268) 7/31/2013 1995 (251) 7/31/2013 1987 (283) 7/31/2013 1987 (224) 7/31/2013 1973 (269) 6/27/2013 1979 (210) 7/31/2013 1985 (346) 6/27/2013 1976 (354) 6/27/2013 1976 (317) 7/31/2013 1983 (171) 6/27/2013 1995 (123) 6/27/2013 1995 (31) 7/31/2013 1987 (26) 7/31/2013 1967 (216) 6/27/2013 1995 (273) 6/27/2013 1987 (172) 6/27/2013 1978 (230) 6/27/2013 1989 (257) 6/27/2013 1986 (194) 6/27/2013 1991 (200) 6/27/2013 1992 (189) 6/27/2013 1989 (245) 6/27/2013 1991 (233) 6/27/2013 1992 (175) 6/27/2013 1993 (155) 6/27/2013 1992 (177) 6/27/2013 1972 (167) 6/27/2013 1995 Property City State Ker's WingHouse Bar and Grill Clearwater FL Kettle Restaurant San Antonio TX Key Bank Spencerport NY Kirklands Wilmington Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — 550 168 59 1,127 8,700 8,052 4,670 4,173 — — 7,705 — — — — 1,431 964 547 1,110 1,532 2,984 2,756 3,479 1,286 — — — — — — — — — — — — — — — — — — 1,268 — — — — — — — — — — 195 348 352 305 259 560 303 627 206 1,112 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 5,715 6,165 6,073 7,782 7,642 1,147 811 654 712 1,036 829 562 F-146 — — — — — — — — — — — — — — — — — — — — — — — — — 182 — 125 125 — 175 125 1,177 374 1,171 2,188 (160) 6/27/2013 1995 (48) 7/31/2013 1965 (271) 6/5/2013 1960 (222) 2/7/2014 2004 15,943 (1,542) 2/7/2014 1982 4,173 4,540 5,973 — 2/7/2014 2008 (609) 2/7/2014 2011 (877) 2/7/2014 2009 10,946 (3,501) 3/28/2013 2003 8,042 (1,212) 2/7/2014 2011 16,093 (2,413) 2/7/2014 2007 8,826 6,179 8,607 9,056 6,279 6,250 7,574 7,691 5,794 5,715 6,165 6,073 7,782 7,642 1,524 1,159 1,131 1,142 1,295 1,564 990 (1,089) 2/7/2014 2006 (30) 2/7/2014 2007 (1,319) 2/7/2014 2005 (1,365) 2/7/2014 2011 (1,293) 11/5/2013 1996 (1,287) 11/5/2013 1995 (1,560) 11/5/2013 1995 (1,584) 11/5/2013 1993 (1,193) 11/5/2013 1995 (1,177) 11/5/2013 1996 (1,269) 11/5/2013 1995 (1,251) 11/5/2013 1996 (1,602) 11/5/2013 1996 (1,574) 11/5/2013 1996 (306) 6/27/2013 1995 (269) 4/23/2013 1960 (221) 4/23/2013 1971 (232) 6/10/2013 1985 (374) 9/21/2012 1964 (227) 6/27/2013 1995 (191) 4/23/2013 1962 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 Madisonville KY Murray Owensboro Franklin Knoxville Greenville Huntsville Huntsville Huntsville KY KY TN TN AL AL AL AL Montgomery AL Montgomery AL Montgomery 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 Krystal Krystal Krystal Krystal Krystal Krystal Krystal Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (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 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 Memphis Memphis TN TN Murfreesboro TN Kum & Go Bentonville Kum & Go Lowell AR AR — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 502 20 206 297 342 574 372 669 355 411 309 166 365 622 94 221 325 261 466 279 215 426 336 186 440 369 304 257 181 465 587 774 613 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 1,029 723 698 1,370 1,437 F-147 — 172 — 125 — — 125 — — 125 — — — — — — — — — 125 — — — — — — — — — — (13) — 1,115 1,349 1,371 1,116 855 1,148 869 1,115 888 947 1,030 830 1,216 1,556 627 885 (203) 4/23/2013 1962 (307) 6/27/2013 1995 (420) 9/21/2012 1976 (233) 4/23/2013 1979 (170) 4/23/2013 1995 (207) 9/21/2012 1990 (135) 9/21/2012 1994 (161) 9/21/2012 1995 (192) 9/21/2012 2012 (150) 9/21/2012 2012 (260) 9/21/2012 1962 (240) 9/21/2012 1973 (307) 9/21/2012 1979 (337) 9/21/2012 1977 (192) 9/21/2012 1965 (238) 10/26/2012 1984 1,084 (274) 9/21/2012 1962 870 932 1,056 1,076 1,064 1,120 514 1,099 615 1,013 1,286 904 1,163 1,944 2,211 (220) 9/21/2012 2011 (168) 9/21/2012 1981 (219) 4/23/2013 2007 (311) 9/21/2012 2011 (230) 9/21/2012 1976 (283) 9/21/2012 2010 (56) 6/27/2013 1995 (219) 4/23/2013 1983 (89) 9/21/2012 1970 (235) 4/23/2013 1980 (341) 4/23/2013 1975 (240) 4/23/2013 1972 (231) 4/23/2013 2008 (390) 11/20/2012 2009 (409) 11/20/2012 2009 Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State 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 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 L.A. Fitness Highland Boynton Beach L.A. Fitness Miami L.A. Fitness Tampa L.A. Fitness Broadview L.A. Fitness Oswego L.A. Fitness Tinley Park L.A. Fitness Carmel L.A. Fitness Indianapolis AR AR AR CO CO IA IA IA IA IA IA IA MO MO MO ND OK OK WY WY AZ AZ AZ CA FL FL FL IL IL IL IN IN — — — — — — — — — — — — — — — — — — — — — 708 668 866 1,131 1,192 794 586 447 223 507 1,280 219 218 205 504 318 423 97 411 878 2,253 3,093 2,177 — 1,284 4,547 2,274 — — — — — — — — 1,485 2,730 1,084 3,345 3,163 1,722 1,457 1,279 2,123 1,559 1,609 1,696 1,457 1,853 1,368 2,162 2,089 1,945 1,280 1,089 782 594 1,144 2,863 1,691 973 2,327 2,048 9,040 7,568 8,322 8,673 9,945 8,671 6,500 8,763 8,749 8,976 9,562 8,970 F-148 — — — — — — — — — — — — — — — — — — — — — 20 — — — — — 2,831 2,227 2,475 2,827 2,649 2,647 1,954 2,609 2,312 2,452 2,560 1,308 1,000 799 1,648 3,181 2,114 1,070 2,738 2,926 (614) 9/28/2012 2012 (443) 11/20/2012 2008 (465) 9/28/2012 2012 (478) 12/24/2012 2012 (411) 12/24/2012 2012 (522) 12/27/2012 2012 (389) 11/20/2012 1998 (531) 2/7/2014 2008 (457) 2/7/2014 2006 (500) 2/7/2014 2008 (344) 3/28/2013 2012 (235) 2/7/2014 1997 (225) 2/11/2014 1987 (173) 2/11/2014 1986 (256) 2/11/2014 1997 (814) 11/8/2012 2012 (423) 7/22/2013 2013 (161) 9/30/2014 1999 (656) 12/27/2012 2012 (522) 6/28/2013 2013 11,293 (1,894) 2/7/2014 2006 9,765 9,606 (1,721) 2/7/2014 2005 (1,814) 2/7/2014 2011 10,947 (2,010) 2/7/2014 2009 11,430 (334) 11/22/2016 2005 11,401 (300) 11/22/2016 2015 7,584 (28) 11/13/2017 2016 276 12,384 (1,862) 2/7/2014 2010 — — — — 11,912 (1,934) 2/7/2014 2008 10,698 (10) 12/22/2017 2006 11,019 (2,008) 2/7/2014 2008 10,249 (1,884) 2/7/2014 2009 Property L.A. Fitness City St. Clair Shores L.A. Fitness Oakdale L.A. Fitness Webster 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 Rowlett L.A. Fitness Spring State MI MN NY OK PA TX TX TX TX TX TX Lamrite West Strongsville OH 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, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — 2,163 4,749 2,315 — — — 2,922 962 938 6,787 8,315 5,102 6,916 — — — — 8,950 (254) 11/22/2016 1982 10,630 (1,821) 2/7/2014 2009 8,024 7,878 (62) 8/1/2017 2014 (1,320) 3/31/2014 2014 10,600 152 11,690 (2,237) 2/7/2014 1979 4,712 2,629 10,413 3,831 1,888 9,568 13,042 (2,079) 2/7/2014 2008 11,450 (1,966) 2/7/2014 2009 11,561 (2,025) 2/7/2014 2007 9,826 (273) 11/22/2016 2005 10,213 (163) 4/11/2017 2006 11,260 (1,903) 2/7/2014 2006 37,154 (338) 8/21/2017 1999 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 (130) 6/27/2013 1995 (189) 6/27/2013 1995 (192) 6/27/2013 1995 (141) 6/27/2013 1984 (144) 6/27/2013 1984 (220) 6/27/2013 1984 (573) 6/27/2013 1995 (251) 6/27/2013 1995 (533) 6/27/2013 1995 (291) 7/31/2013 2006 (540) 6/27/2013 1995 (462) 6/27/2013 1995 (528) 6/27/2013 1995 (163) 7/31/2013 1982 (237) 6/27/2013 2006 (132) 6/27/2013 1976 (109) 6/27/2013 1978 1,190 (251) 6/27/2013 1986 — — — — — — — — — — — — — — — — — — — — — — — 1,538 2,039 2,539 1,970 3,078 480 450 270 306 187 107 520 1,570 890 1,449 1,010 890 320 174 220 258 171 194 — (6) — — 6 — — — — — — — — 10,023 7,787 7,668 9,290 34,076 528 763 776 560 571 874 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-149 Property City State Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction 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 Longhorn Steakhouse 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 Los Tios Mexican Restaurant Dalton Marion IL Mount Carmel IL Vandalia IL West Frankfort IL Wood River Garden City Hays Clovis Fairborn Penn Hills Austin Green Bay Ashtabula Tampa Paducah Jonesboro Burlington Florence IL KS KS NM OH PA TX WI OH FL KY OH AR IA KY — — — — — — — — — — — — — — — — — — — 305 105 101 244 251 120 160 210 103 438 459 748 440 370 1,059 484 484 996 314 530 624 705 300 656 477 563 1,640 1,852 — — — — — — — (377) — — — — — — 1,121 1,443 (2,072) 18 2,101 2,775 4,814 30 8,405 8,191 10,189 — 185 819 250 — — — — — — — — — — — — New Orleans LA 13,069 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 — — — — — 7,851 245 West Carrollton Columbia Texas City Lube Stop Akron Lube Stop Akron Lube Stop Akron OH SC TX OH OH OH 6,375 2,864 9,883 — — — — — 5,485 2,313 79 135 205 — 9,253 287 761 1,043 F-150 1,364 (267) 6/27/2013 1983 589 585 (122) 6/27/2013 1977 (122) 6/27/2013 1976 1,240 (251) 6/27/2013 1977 565 650 784 538 403 1,094 936 1,311 2,080 2,222 492 48 (79) 6/27/2013 1975 (133) 6/27/2013 1978 (157) 6/27/2013 1994 (40) 6/27/2013 1995 (75) 6/27/2013 1976 (154) 7/31/2013 1993 (120) 6/27/2013 1993 (142) 6/27/2013 1978 (405) 6/27/2013 1995 (473) 6/27/2013 1995 (2) 2/7/2014 1995 (8) 6/27/2013 1990 10,691 (1,567) 5/19/2014 1994 11,785 (1,527) 2/7/2014 1996 15,253 (1,877) 2/7/2014 1997 31,043 (4,268) 11/5/2013 2005 4,045 12,640 9,107 3,729 11,499 1,812 — — 2/7/2014 2009 6/3/2013 2006 (1,517) 3/17/2014 1994 — — — 2/7/2014 2009 2/7/2014 2002 2/7/2014 2009 12,747 (1,715) 2/7/2014 1994 5,485 — 2/7/2014 1994 11,566 (2,336) 5/19/2014 1995 366 896 (44) 9/2/2014 1988 (120) 9/2/2014 1995 1,248 (161) 9/2/2014 1992 Property Lube Stop City Bedford Heights Lube Stop Cleveland State 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 Mars Petcare Columbia Mastec Houston 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 Mattress Firm Goshen Mattress Firm Mishawaka OH OH OH MI SC TX AL AL AR FL FL FL ID ID IL IN IN IN IN Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 156 127 205 205 201 135 140 276 124 306 182 233 109 230 85 168 287 529 559 179 765 430 414 502 208 390 502 201 487 561 132 525 425 502 — — — — — (5) — — — — — — — — — — — 685 686 384 970 631 544 642 484 514 808 383 720 670 362 610 593 789 (89) 9/2/2014 1986 (86) 9/2/2014 1988 (41) 9/2/2014 1988 (121) 9/2/2014 1993 (71) 9/2/2014 1988 (70) 9/2/2014 1995 (77) 9/2/2014 1998 (43) 9/2/2014 1988 (58) 9/2/2014 1986 (86) 9/2/2014 1986 (39) 9/2/2014 1987 (78) 9/2/2014 1992 (80) 9/2/2014 1986 (28) 9/2/2014 1988 (74) 9/2/2014 1999 (66) 9/2/2014 1986 (101) 5/28/2014 2000 1,875 19,591 (987) 20,479 (2,878) 11/5/2013 2014 — — — — — — — — — — — — — — 3,038 1,761 1,623 1,605 1,980 1,642 2,310 1,674 1,797 1,189 1,048 2,344 1,766 1,875 (435) 6/12/2014 2012 (291) 10/1/2013 2013 (316) 5/14/2013 2013 (351) 2/6/2013 2012 (328) 6/5/2013 2013 (259) 2/7/2014 2011 (360) 5/14/2013 2013 (367) 2/22/2013 2013 (257) 2/26/2014 2003 (219) 2/7/2014 1977 (253) 11/6/2012 1964 (610) 2/11/2013 1995 (301) 3/20/2014 2013 (376) 7/30/2013 2013 369 528 406 321 693 405 924 335 492 231 157 117 211 375 2,669 1,233 1,217 1,284 1,287 1,237 1,386 1,339 1,305 958 891 2,227 1,555 1,500 F-151 Property City State Mattress Firm South Bend 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 MDC Holdings Inc. Denver MedAssets Plano The Medicines Co. Melrose Park Center Mercer Well Services Parsippany Melrose Park IL Cleburne Merrill Lynch Hopewell Metro PCS Richardson Mezcal Mexican Restaurant Grafton Michael's Lancaster CO TX NJ TX NJ TX OH CA Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — 1,194 — — — — — — — — — — — — — — — — — — — — — — 289 648 — 467 409 349 1,085 1,091 412 373 437 389 398 385 586 311 736 409 511 310 563 429 320 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 — 12,648 66,398 10,432 45,650 27,700 5,150 50,051 — — 6,143 10,515 262 369 — — — — — — — — — — — 745 (8) — — — — — — — — — — 397 — 523 597 — 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 (486) 2/24/2014 2013 (257) 4/25/2013 2012 (325) 5/2/2013 1995 (210) 8/19/2014 2014 (159) 10/3/2014 2014 (215) 5/29/2014 2014 (306) 12/12/2012 2012 (315) 9/28/2012 1997 (341) 3/29/2013 2013 (200) 9/28/2012 2012 (222) 7/10/2014 2014 (198) 7/31/2013 1995 (261) 12/7/2012 2012 (221) 8/21/2013 2008 (293) 3/19/2013 2012 (360) 9/26/2012 1997 (385) 12/31/2012 2012 (453) 4/4/2013 2013 (434) 3/28/2013 2013 (184) 6/27/2013 1995 (254) 5/16/2014 2013 (188) 3/27/2014 2000 — 6/27/2013 2005 79,443 (14,281) 11/5/2013 2001 56,082 (7,870) 2/7/2014 2013 55,724 (8,992) 2/7/2014 2009 17,255 (2,113) 2/7/2014 2006 631 (66) 6/25/2014 2008 74,250 17,619 108,349 (12,141) 113,827 (9,953) 2/7/2014 2001 7,655 1,292 19,606 — — 64 191 7,744 33,872 769 — — 21,667 (4,180) 11/5/2013 1986 255 (51) 7/31/2013 1990 41,616 (122) 11/20/2017 1998 F-152 Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction 3,631 7,763 — 15 5,462 8,898 (834) 2/7/2014 2011 (1,953) 11/5/2013 2011 23,198 (3,894) 21,431 (1,778) 2/21/2014 1984 37,297 341 40,875 (7,129) 4/28/2014 1997 Property City State Michael's Lafayette Michelin Louisville LA KY Millenium Chem Glen Burnie MD Miraca Life Sciences Irving Mister Car Wash Florence Mister Car Wash Florence TX AL AL Mister Car Wash Muscle Shoals AL Mister Car Wash Grand Rapids MI Mister Car Wash Grand Rapids MI Mister Car Wash Grand Rapids MI Mister Car Wash Grand Rapids MI Mister Car Wash Kentwood Monro Muffler Lewiston Monro Muffler Waukesha Monterey's Tex Mex Tulsa MI ME WI OK MotoMart St. Charles MO 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 TX OK TN TN TN TN PA National Tire & Battery National Tire & Battery St. Louis MO Nashville Natural Grocers Gilbert Natural Grocers Gilbert Natural Grocers Tucson Natural Grocers Salem Nestle Holdings Breinigsville Northern Tool & Equipment Ocala TN AZ AZ AZ OR PA FL — — — — — — — — — — — — — — — — — — — — — — — — 799 — — — — — 1,831 1,120 2,127 3,237 198 404 378 662 779 721 458 238 279 228 135 1,085 1,165 100 33 63 73 90 29 756 603 2,113 2,100 1,571 1,339 7,381 1,598 1,693 2,727 Northrop Grumman El Segundo CA — 15,935 67,908 F-153 1,376 1,605 1,445 777 1,600 996 938 877 1,115 684 406 1,980 948 186 — — — — — 924 1,373 3,211 3,231 3,637 3,886 66,948 — — — — — — — — — — (326) — — — — — — — — — — — — — — — — — 1,574 2,009 1,823 1,439 2,379 1,717 1,396 1,115 1,394 912 215 3,065 2,113 286 33 63 73 90 29 1,680 1,976 5,324 5,331 5,208 5,225 (8) 10/17/2017 2008 (12) 10/17/2017 2016 (9) 10/17/2017 2008 (14) 5/16/2017 2002 (32) 4/18/2017 2001 (17) 5/16/2017 1984 (17) 5/16/2017 1961 (16) 5/16/2017 1979 (299) 5/10/2013 1976 (177) 7/23/2013 2002 (13) 7/31/2013 2001 (473) 2/7/2014 2009 (167) 6/12/2014 2012 (49) 6/27/2013 1995 — 7/31/2013 1995 — 7/31/2013 1995 — 7/31/2013 1995 — 7/31/2013 1995 — 6/27/2013 1995 (275) 10/31/2012 1998 (268) 2/7/2014 1978 (78) 3/1/2017 2016 (79) 3/1/2017 2016 (101) 3/1/2017 2016 (808) 2/7/2014 2013 74,329 (16,846) 11/5/2013 1994 4,420 (567) 2/7/2014 2008 83,843 (11,640) 6/27/2014 1972 Property City State NTT Data Lincoln NTW Morrow O'Charley's Dalton O'Charley's Tucker Old Country Buffet Old Country Buffet Burbank Fresno Olive Garden Flagstaff Olive Garden Altamonte Springs Olive Garden Leesburg NE GA GA GA CA CA AZ FL FL Olive Garden Port Charlotte FL Olive Garden Salisbury Olive Garden Cary 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, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction 2,812 25,566 — — — — — — — — — — — — — — — — — — — — 397 406 1,037 246 326 875 699 692 1,454 1,171 1,545 819 970 1,560 973 1,382 1,965 1,752 1,765 — — — — 1,586 1,817 866 1,309 (1,094) 1,306 (1,282) 455 4,023 1,837 4,156 3,144 6,603 4,053 3,717 1,422 2,902 2,252 2,585 2,015 2,199 — — — — — — — — — — — — — — 28,378 (4,640) 2/7/2014 2009 1,983 2,223 1,903 461 350 1,330 4,722 2,529 5,610 4,315 8,148 4,872 4,687 2,982 3,875 3,634 4,550 3,767 3,964 (491) 6/5/2012 1992 (473) 6/27/2013 1993 (225) 6/27/2013 1993 (71) 1/8/2014 2001 (57) 1/8/2014 2003 (62) 7/28/2014 1996 (432) 7/28/2014 2006 (185) 7/28/2014 1990 (385) 7/28/2014 1990 (301) 7/28/2014 1995 (598) 7/28/2014 1992 (378) 7/28/2014 1991 (346) 7/28/2014 1996 (181) 7/28/2014 2003 (279) 7/28/2014 1994 (224) 7/28/2014 1991 (252) 7/28/2014 1993 (204) 7/28/2014 1993 (281) 7/28/2014 2006 Omnipoint Communication Indianapolis IN 49,838 5,770 64,073 2,108 71,951 (14,607) 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 1,500 1,534 1,352 1,842 1,506 1,414 4,173 2,745 3,176 1,039 1,008 F-154 — — — — — — — — — — — 2,155 3,624 3,481 3,613 3,292 3,963 4,586 4,100 3,620 2,782 2,655 (368) 2/7/2014 2002 (378) 2/7/2014 1998 (305) 2/7/2014 1998 (450) 2/7/2014 1997 (374) 2/7/2014 2001 (409) 2/7/2014 1997 (967) 2/7/2014 1995 (623) 2/7/2014 1999 (700) 2/7/2014 1997 (313) 2/7/2014 1997 (297) 2/7/2014 2002 Property City State Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction On the Border Concord Mills NC — 1,903 On the Border Mount Laurel NJ 713 1,446 On the Border W. Windsor NJ 2,433 1,489 On the Border Columbus OH 1,925 1,594 On the Border Oklahoma City OK On the Border Tulsa OK — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 1,456 1,938 1,703 1,558 2,310 2,956 2,844 1,471 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 F-155 3,359 3,384 3,192 3,152 3,169 3,696 3,735 3,689 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 (398) 2/7/2014 2000 (473) 2/7/2014 2004 (549) 2/7/2014 1998 (442) 2/7/2014 1997 (572) 2/7/2014 1996 (714) 2/7/2014 1995 (680) 2/7/2014 2000 (358) 2/7/2014 1997 (490) 2/7/2014 2002 (734) 2/7/2014 1998 (693) 2/7/2014 1999 (403) 2/7/2014 2007 (818) 2/7/2014 1994 (700) 2/7/2014 1999 (441) 2/7/2014 1998 (134) 8/2/2012 2000 (167) 2/7/2014 2011 (157) 2/7/2014 2009 (188) 2/7/2014 2010 (173) 2/7/2014 2008 (158) 2/7/2014 2008 (230) 2/7/2014 2010 (173) 2/7/2014 2011 (153) 2/7/2014 2010 (169) 2/7/2014 2010 (200) 2/7/2014 2010 (155) 2/7/2014 2010 (372) 10/12/2012 1999 (492) 2/7/2014 1999 (351) 2/7/2014 1996 (497) 2/7/2014 2001 (421) 2/7/2014 2001 — — — — — — — — — — — — — — — — — — — 485 560 703 646 — — — — — 859 740 891 2,218 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 On the Border Burleson On the Border College Station 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 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 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 AR CO FL FL Property Outback Steakhouse Outback Steakhouse Outback Steakhouse Outback Steakhouse Outback Steakhouse Outback Steakhouse Outback Steakhouse Outback Steakhouse City State Fort Wayne IN Lexington KY Baton Rouge LA Southgate MI Lees Summit MO Garner NC Las Cruces NM Boardman Township OH Encumbrances at December 31, 2017 — — — — — — — — Initial Costs (1) Buildings, Fixtures and Improvements 984 2,139 1,272 2,742 620 1,817 1,549 2,742 Land 733 1,077 742 787 901 1,088 536 575 Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — 1,717 3,216 2,014 3,529 1,521 2,905 2,085 3,317 (406) 2/7/2014 2000 (511) 2/7/2014 2002 (301) 2/7/2014 2001 (620) 2/7/2014 1994 (169) 2/7/2014 1999 (439) 2/7/2014 2004 (357) 2/7/2014 2000 (633) 2/7/2014 1995 F-156 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 VA MO AZ CA CA CA FL Penske Bedford Peraton Herndon Petco Petco Lake Charles LA Dardenne Prairie Petsmart Phoenix Petsmart Merced Petsmart Petsmart Redding Westlake Village Petsmart Boca Raton Initial Costs (1) Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (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 (434) 2/7/2014 2006 (329) 2/7/2014 1995 (440) 2/7/2014 2001 (497) 2/7/2014 1998 (108) 2/7/2014 1999 (439) 2/7/2014 2000 (533) 2/7/2014 1993 (565) 2/7/2014 2006 (989) 9/30/2014 2014 13,738 (2,292) 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 (149) 6/12/2014 1972 (346) 12/31/2012 1998 (376) 12/31/2012 2004 (118) 12/31/2012 1982 (504) 12/31/2012 1987 (369) 12/31/2012 1997 (264) 12/31/2012 1998 (637) 12/31/2012 1999 (609) 12/31/2012 2000 (513) 12/31/2012 1987 (405) 12/31/2012 2000 (555) 12/31/2012 1988 18,057 (3,435) 17,170 (1,216) 11/5/2013 1997 — — 183 — 6/27/2013 1995 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 1,384 53,584 (20,560) 34,408 — 11/5/2013 1999 Encumbrances at December 31, 2017 — — — — — — — — — — — — — — — — — — — — — — — — — 2,145 — 690 806 4,072 3,024 51,250 7,308 97,510 — — — — 1,729 1,312 3,406 3,514 4,194 4,133 5,017 4,912 F-157 — — 36 — 207 — — 4,762 3,830 (766) 2/7/2014 2008 (556) 2/7/2014 2009 104,854 (15,598) 2/7/2014 1997 5,923 5,652 8,423 8,426 (785) 2/7/2014 1993 (845) 2/7/2014 1989 (904) 2/7/2014 1998 (953) 2/7/2014 2001 Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Petsmart Lake Mary Petsmart Plantation Petsmart Tallahassee Petsmart Evanston Petsmart Braintree Petsmart Oxon Hill Petsmart Flint PetSmart Sedalia Petsmart Petsmart Parma Dallas Petsmart Southlake PetSmart Physicians Dialysis Physicians Immediate Care Physicians Immediate Care Physicians Immediate Care Physicians Immediate Care Physicians Immediate Care Oak Creek Lawrenceville NJ 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 Page Cooper City Marathon Ashburn Eatonton Greensboro Jackson Louisville Salisbury Dearborn Bozeman Glasgow FL FL FL IL MA MD MI MO OH TX TX WI IL IL IL IL IN TX GA AZ FL FL GA GA GA GA KY MD MI MT MT — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 2,430 965 1,468 1,120 2,805 1,722 606 273 1,288 470 1,063 906 633 1,043 487 535 590 252 457 1,867 66 320 530 102 353 569 673 539 245 284 150 120 2,556 5,302 1,387 6,007 8,398 4,389 3,839 3,645 3,527 6,089 7,093 3,578 2,757 1,346 2,256 1,884 1,747 1,351 1,767 7,466 263 466 187 233 353 465 735 499 734 528 343 217 F-158 — — — — — — — — — — — — — — — — — — — — — — — (39) — — — — — — — — 4,986 6,267 2,855 7,127 (502) 2/7/2014 1997 (979) 2/7/2014 2001 (282) 2/7/2014 1998 (1,080) 2/7/2014 2001 11,203 (1,470) 2/7/2014 1996 6,111 4,445 3,918 4,815 6,559 8,156 4,484 3,390 2,389 2,743 2,419 2,337 1,603 2,224 9,333 329 786 717 296 706 1,034 1,408 1,038 979 812 493 337 (815) 2/7/2014 1998 (710) 2/7/2014 1996 (14) 11/1/2017 2017 (650) 2/7/2014 1996 (1,053) 2/7/2014 1998 (1,253) 2/7/2014 1998 (44) 8/25/2017 2016 (467) 2/7/2014 2009 (299) 2/7/2014 2003 (475) 2/7/2014 1997 (405) 2/7/2014 2011 (372) 2/7/2014 2011 (314) 2/7/2014 2013 (375) 2/7/2014 2011 (2,674) 1/31/2013 2000 (62) 7/31/2013 1977 (119) 6/27/2013 1995 (48) 6/27/2013 1995 (31) 6/27/2013 1988 (83) 7/31/2013 1988 (109) 7/31/2013 1989 (185) 6/27/2013 1987 (126) 6/27/2013 1975 (173) 7/31/2013 1983 (124) 7/31/2013 1977 (88) 6/27/2013 1995 (55) 6/27/2013 1995 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 Livingston MT East Syracuse NY Nedrow NY 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 TX Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 130 137 55 141 87 114 270 128 122 77 140 74 58 54 261 365 415 881 221 454 344 346 371 367 507 68 300 339 254 148 252 414 245 185 80 262 175 197 721 156 153 115 171 108 173 217 484 365 507 588 410 371 420 346 248 245 415 217 546 1,016 1,015 453 1,007 506 F-159 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 375 322 135 403 262 311 991 284 275 192 311 182 231 271 745 730 922 (63) 6/27/2013 1995 (47) 6/27/2013 1978 (20) 6/27/2013 1979 (62) 7/31/2013 1979 (44) 6/27/2013 1995 (50) 6/27/2013 1977 (181) 6/27/2013 1975 (37) 7/31/2013 1985 (38) 6/27/2013 1977 (27) 7/31/2013 1977 (40) 7/31/2013 1982 (27) 6/27/2013 1977 (43) 6/27/2013 1978 (51) 7/31/2013 1995 (114) 7/31/2013 1987 (86) 7/31/2013 1987 (119) 7/31/2013 1984 1,469 (138) 7/31/2013 1977 631 825 764 692 619 612 922 285 846 1,355 1,269 601 1,259 920 (97) 7/31/2013 1986 (87) 7/31/2013 1989 (99) 7/31/2013 1999 (81) 7/31/2013 1995 (58) 7/31/2013 1972 (58) 7/31/2013 1980 (97) 7/31/2013 1980 (55) 6/27/2013 1985 (140) 6/27/2013 1995 (239) 7/31/2013 1976 (239) 7/31/2013 1980 (114) 6/27/2013 1981 (237) 7/31/2013 2008 (119) 7/31/2013 1975 Initial Costs (1) City State Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Midland Monahans Odessa Odessa Odessa Odessa Odessa Pecos San Angelo San Angelo Stamford Cedar City Kanab Ashland Bedford Chester TX TX TX 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 VA VA VA WI WI WI WI WI WI — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 506 361 456 588 572 627 457 387 214 268 38 52 52 589 548 473 494 287 311 641 707 394 394 378 666 311 159 45 208 28 51 83 619 671 847 882 572 766 685 719 641 624 115 361 210 1,093 670 1,104 918 861 311 345 864 591 591 701 814 311 195 252 69 159 205 531 F-160 — — — — — — — — (183) (266) — — — — — — — — — — — — — — — — — 100 — — — (100) 1,125 1,032 1,303 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 (145) 7/31/2013 1978 (158) 7/31/2013 1979 (199) 7/31/2013 1976 (207) 7/31/2013 1972 (135) 7/31/2013 1976 (180) 7/31/2013 1979 (161) 7/31/2013 1976 (169) 7/31/2013 1974 (41) 7/31/2013 1977 (36) 7/31/2013 1980 (27) 7/31/2013 1995 (91) 6/27/2013 1978 (49) 7/31/2013 1989 (257) 7/31/2013 1989 (158) 7/31/2013 1977 (260) 7/31/2013 1983 (216) 7/31/2013 1982 (202) 7/31/2013 1978 (73) 7/31/2013 1991 (81) 7/31/2013 1977 1,571 (203) 7/31/2013 1985 985 985 1,079 1,480 622 354 397 277 187 256 514 (139) 7/31/2013 1969 (139) 7/31/2013 1970 (165) 7/31/2013 1979 (191) 7/31/2013 1978 (73) 7/31/2013 1991 (46) 7/31/2013 1980 (71) 7/31/2013 1997 (16) 7/31/2013 1978 (37) 7/31/2013 1991 (48) 7/31/2013 1993 (93) 7/31/2013 1980 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 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 Neillsville Plover WI WI 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 FL FL FL IN FL FL FL FL FL FL Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 35 85 130 35 61 160 190 187 288 264 475 306 451 197 169 187 385 158 261 190 465 195 280 190 280 430 776 423 781 830 220 782 106 199 390 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 F-161 — 100 100 — 35 — — — — — — — — — — — — — — — — — — — — — — — — — — — 141 384 620 116 187 291 194 946 965 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 (25) 7/31/2013 1995 (57) 7/31/2013 1995 (106) 7/31/2013 1995 (19) 7/31/2013 1986 (29) 7/31/2013 1991 (31) 7/31/2013 1977 (1) 7/31/2013 1995 (208) 2/7/2014 2006 (175) 2/7/2014 2006 (227) 2/7/2014 2005 (70) 2/7/2014 2005 (269) 2/7/2014 2005 (85) 2/7/2014 2001 (291) 2/7/2014 1983 (256) 2/7/2014 2003 (306) 2/7/2014 2003 (227) 2/7/2014 1971 (255) 2/7/2014 2005 (321) 2/7/2014 2006 (165) 2/7/2014 2005 (594) 1/8/2014 1971 (123) 1/8/2014 1979 (368) 6/27/2013 1995 (307) 6/27/2013 1995 (292) 6/27/2013 1995 (37) 6/27/2013 1985 (242) 6/27/2013 1978 (240) 1/8/2014 1979 (225) 7/31/2013 1955 (195) 7/31/2013 1999 (78) 7/31/2013 1962 (225) 7/31/2013 2004 Property City State Popeyes Pensacola Popeyes Popeyes Popeyes Starke Tampa Tampa FL FL 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 Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 301 380 216 673 484 110 240 323 375 382 283 434 473 487 128 248 288 513 77 343 264 651 1,216 220 190 295 111 278 445 456 408 381 673 — 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 F-162 — 614 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 974 994 724 1,738 1,485 815 839 717 1,084 1,273 821 1,333 1,374 1,616 511 708 719 (149) 1/8/2014 2001 (20) 6/27/2013 1995 (112) 1/8/2014 1981 (268) 6/27/2013 1976 (252) 6/27/2013 1976 (174) 6/27/2013 1995 (148) 6/27/2013 1995 (93) 7/31/2013 1999 (179) 6/27/2013 1985 (209) 7/31/2013 1986 (135) 6/27/2013 1985 (226) 6/27/2013 1993 (227) 6/27/2013 1996 (284) 6/27/2013 1987 (90) 7/31/2013 1984 (116) 6/27/2013 1959 (101) 7/31/2013 1978 1,490 (246) 6/27/2013 1984 535 858 879 1,447 1,749 621 642 536 277 505 1,113 1,303 997 598 (101) 1/8/2014 2007 (121) 7/31/2013 1996 (145) 7/31/2013 1985 (187) 7/31/2013 1987 (134) 6/27/2013 1996 (99) 6/27/2013 1995 (112) 6/27/2013 1995 (57) 7/31/2013 1976 (39) 7/31/2013 1976 (53) 7/31/2013 1978 (157) 7/31/2013 1988 (199) 7/31/2013 1984 (148) 6/27/2013 1984 (55) 6/27/2013 2002 Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Popeyes Portsmouth Price Rite Rochester VA NY — 3,080 369 569 230 3,594 — — 599 (58) 6/27/2013 2002 4,163 (1,190) 9/27/2012 1965 F-163 Property City State Publix Birmingham AL Pulte Mortgage Englewood CO 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 RaceTrac Atlanta Denton RaceTrac Houston RaceTrac Houston Rally's Rally's Rally's Rally's Rally's Rally's Rally's Rally's Rally's Indianapolis Indianapolis Indianapolis Kokomo Muncie Harvey New Orleans New Orleans Hamtramck Red Lobster Birmingham Red Lobster Decatur Red Lobster Dothan Red Lobster Florence Red Lobster Huntsville Red Lobster Montgomery MI MI NC AL AL FL FL FL GA TX TX TX IN IN IN IN IN LA LA LA MI AL AL AL AL AL AL Red Lobster Vestavia Hills AL Red Lobster Fort Smith Red Lobster Hot Springs Red Lobster Little Rock AR AR AR Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 934 6,377 165 7,476 (1,341) 2/7/2014 2004 2,563 22,026 110 165 560 761 580 684 1,065 1,188 1,025 1,030 1,209 1,203 210 1,168 1,168 290 310 420 450 220 230 — 1,100 726 974 1,098 1,034 1,257 1,643 928 1,942 990 935 458 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 1,020 741 686 1,244 908 2,330 1,413 1,417 1,228 1,593 725 F-164 — — — (245) — — — — — — — — — — — — — — — — — — — — — — — — — — — — 24,589 (4,568) 11/5/2013 2009 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 1,250 741 1,786 1,970 1,882 3,428 2,447 2,674 2,871 2,521 2,667 (334) 3/29/2013 2006 (315) 3/29/2013 2006 (54) 7/31/2013 1978 (556) 2/7/2014 2003 (279) 2/7/2014 1998 (844) 2/7/2014 2007 (680) 2/7/2014 2011 (653) 2/7/2014 2007 (339) 2/7/2014 2004 (534) 2/7/2014 2003 (250) 2/7/2014 1995 (314) 2/7/2014 1997 (374) 6/27/2013 1995 — 7/31/2013 2005 — 7/31/2013 2005 (135) 6/27/2013 1995 (295) 6/27/2013 1995 (215) 6/27/2013 1995 (418) 6/27/2013 1995 (251) 6/27/2013 1995 (252) 6/27/2013 1995 (136) 7/28/2014 1972 (147) 7/28/2014 1993 (168) 7/28/2014 1979 (167) 7/28/2014 1990 (249) 7/28/2014 1975 (187) 7/28/2014 1983 (158) 7/28/2014 1972 (176) 7/28/2014 1980 (235) 7/28/2014 1994 (118) 7/28/2014 1977 Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Red Lobster North Little Rock Red Lobster Pine Bluff Red Lobster Rogers Red Lobster Chandler Red Lobster Flagstaff Red Lobster Gilbert 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 Bruno Red Lobster San Diego Red Lobster Torrance Red Lobster Red Lobster Valencia Colorado Springs Red Lobster Bridgeport Red Lobster Danbury Red Lobster Newark Red Lobster Red Lobster Red Lobster Talleyville Altamonte Springs Boynton Beach Red Lobster Fort Pierce Red Lobster Hollywood Red Lobster Kissimmee Red Lobster Leesburg Red Lobster Miami AR AR AR AZ AZ AZ AZ AZ CA CA CA CA CA CA CA CA CA CA CA CA CA CO CT CT DE DE FL FL FL FL FL FL FL — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 999 226 1,398 — 891 — — — — 717 — 1,638 — — 1,304 1,132 914 — — 1,850 — — — — — 1,201 1,212 — 618 — — 721 — 1,906 1,194 2,069 252 514 460 565 676 731 1,146 1,671 564 2,211 1,529 2,238 1,321 2,459 1,611 1,113 1,579 841 1,512 323 159 1,515 1,877 1,674 1,631 1,491 2,282 1,364 1,262 1,062 F-165 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 2,905 1,420 3,467 252 1,405 460 565 676 731 1,863 1,671 2,202 2,211 1,529 3,542 2,453 3,373 1,611 1,113 3,429 841 1,512 323 159 1,515 3,078 2,886 1,631 2,109 2,282 1,364 1,983 1,062 (229) 7/28/2014 1981 (197) 7/28/2014 1995 (272) 7/28/2014 2008 (128) 7/28/2014 2000 (141) 7/28/2014 1996 (164) 7/28/2014 2007 (185) 7/28/2014 2003 (185) 7/28/2014 2009 (211) 7/28/2014 2003 (187) 7/28/2014 1994 (280) 7/28/2014 1988 (101) 7/28/2014 1984 (418) 7/28/2014 2007 (268) 7/28/2014 2010 (267) 7/28/2014 2003 (215) 7/28/2014 2012 (263) 7/28/2014 1988 (372) 7/28/2014 1992 (387) 7/28/2014 1988 (185) 7/28/2014 1988 (302) 7/28/2014 1988 (267) 7/28/2014 2004 (133) 7/28/2014 1996 (96) 7/28/2014 1996 (333) 7/28/2014 2006 (241) 7/28/2014 1991 (212) 7/28/2014 1986 (320) 7/28/2014 2008 (220) 7/28/2014 1995 (463) 7/28/2014 2003 (341) 7/28/2014 2002 (190) 7/28/2014 1990 (310) 7/28/2014 2003 Property City State Red Lobster Orlando Red Lobster Panama City Red Lobster Pembroke Pines Red Lobster Plantation FL FL FL FL Red Lobster Port Charlotte FL Red Lobster Sebring FL Red Lobster Winter Haven FL Red Lobster Athens Red Lobster Austell Red Lobster Buford Red Lobster Cartersville Red Lobster Columbus Red Lobster Conyers Red Lobster Dalton Red Lobster Decatur GA GA GA GA GA GA GA GA Red Lobster Douglasville GA Red Lobster Jonesboro Red Lobster Kennesaw Red Lobster Perry Red Lobster Rome Red Lobster Roswell Red Lobster Savannah Red Lobster Tucker Red Lobster Ames Red Lobster Cedar Rapids Red Lobster Red Lobster Davenport West Des Moines Red Lobster Boise Red Lobster Pocatello Red Lobster Alton Red Lobster Aurora Red Lobster Chicago Red Lobster Danville GA GA GA GA GA GA GA IA IA IA IA ID ID IL IL IL IL Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 479 1,975 1,476 1,003 1,055 669 — 1,315 594 956 549 775 1,102 1,356 1,049 1,382 351 961 2,358 475 — 789 — 619 1,033 — — 1,251 1,598 1,064 253 1,188 1,515 3,126 1,733 1,516 1,487 2,217 2,027 1,092 2,638 1,386 1,957 3,144 2,045 1,873 1,161 1,678 1,802 1,839 911 354 2,236 1,718 1,133 495 2,896 2,358 714 773 1,854 782 2,422 1,580 F-166 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 1,188 1,515 3,605 3,708 2,992 2,490 3,272 2,696 1,092 3,953 1,980 2,913 3,693 2,820 2,975 2,517 2,727 3,184 2,190 1,872 2,712 2,711 1,718 1,922 495 3,515 3,391 714 773 3,105 2,380 3,486 1,833 (331) 7/28/2014 1989 (296) 7/28/2014 1976 (346) 7/28/2014 1987 (229) 7/28/2014 1989 (209) 7/28/2014 1990 (197) 7/28/2014 1992 (220) 7/28/2014 1972 (206) 7/28/2014 1971 (233) 7/28/2014 2001 (317) 7/28/2014 2000 (199) 7/28/2014 1996 (256) 7/28/2014 2005 (361) 7/28/2014 2000 (243) 7/28/2014 1995 (200) 7/28/2014 1973 (174) 7/28/2014 1991 (181) 7/28/2014 1972 (220) 7/28/2014 1987 (244) 7/28/2014 1996 (135) 7/28/2014 1979 (84) 7/28/2014 1981 (232) 7/28/2014 1971 (337) 7/28/2014 1973 (188) 7/28/2014 1995 (190) 7/28/2014 1981 (301) 7/28/2014 1975 (254) 7/28/2014 1975 (203) 7/28/2014 1988 (311) 7/28/2014 1994 (218) 7/28/2014 1983 (116) 7/28/2014 1979 (260) 7/28/2014 1980 (228) 7/28/2014 1991 Initial Costs (1) Encumbrances at December 31, 2017 State Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property Red Lobster City 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 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 Mishawaka Red Lobster Muncie Red Lobster Richmond Red Lobster Terre Haute IL IL IL IL IL IL IL IL IL IL IL IL IN IN IN IN IN IN IN IN IN IN IN Red Lobster Topeka 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 Red Lobster Monroe Red Lobster Annapolis Red Lobster Frederick LA LA MD MD — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 1,735 399 962 — 1,825 1,046 339 — 1,205 197 813 — 615 616 587 567 394 593 627 371 1,066 754 866 — 893 815 1,640 — 455 — — 1,806 1,083 2,286 2,399 2,212 929 2,316 2,489 1,169 665 1,253 2,195 1,272 864 1,435 1,657 3,357 2,985 1,835 2,205 1,427 1,416 2,640 2,211 401 1,094 1,350 1,485 1,841 1,535 2,022 644 319 F-167 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 1,806 1,083 4,021 2,798 3,174 929 4,141 3,535 1,508 665 2,458 2,392 2,085 864 2,050 2,273 3,944 3,552 2,229 2,798 2,054 1,787 3,706 2,965 1,267 1,094 2,243 2,300 3,481 1,535 2,477 644 319 (629) 7/28/2014 1972 (252) 7/28/2014 1975 (248) 7/28/2014 1980 (293) 7/28/2014 1992 (231) 7/28/2014 1976 (349) 7/28/2014 1979 (241) 7/28/2014 1975 (270) 7/28/2014 1980 (183) 7/28/2014 1995 (175) 7/28/2014 1976 (169) 7/28/2014 1977 (242) 7/28/2014 1982 (167) 7/28/2014 1982 (251) 7/28/2014 2001 (202) 7/28/2014 1991 (301) 9/19/2014 1993 (342) 7/28/2014 1972 (305) 7/28/2014 1973 (213) 7/28/2014 1980 (238) 7/28/2014 1974 (146) 7/28/2014 1975 (212) 7/28/2014 1996 (275) 7/28/2014 1972 (234) 7/28/2014 1972 (138) 7/28/2014 2003 (246) 7/28/2014 2011 (197) 7/28/2014 1991 (194) 7/28/2014 1982 (200) 7/28/2014 1972 (303) 7/28/2014 2011 (254) 7/28/2014 1991 (147) 7/28/2014 1985 (144) 7/28/2014 1997 Property City Red Lobster Lanham State MD Red Lobster Owings Mills MD Red Lobster Salisbury Red Lobster Suitland Red Lobster Battle Creek Red Lobster Dearborn Heights Red Lobster Flint Red Lobster Fort Gratiot Red Lobster Jackson Red Lobster Kentwood Red Lobster Lansing Red Lobster Livonia Red Lobster Mt. Pleasant Red Lobster Novi Red Lobster Portage Red Lobster Saginaw Red Lobster Southgate Red Lobster Sterling Heights Red Lobster Traverse City Red Lobster Warren Red Lobster Mankato Red Lobster Rochester Red Lobster Roseville Red Lobster St. Cloud Red Lobster Branson Red Lobster Red Lobster Bridgeton Cape Girardeau MD MD MI MI MI MI MI MI MI MI MI MI MI MI MI MI MI MI 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, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 1,070 1,090 202 822 505 250 235 819 — 635 508 2,061 396 335 611 759 1,036 349 867 — 1,291 760 1,496 1,128 1,412 — 518 593 — 1,023 455 229 1,868 3,112 1,827 2,156 2,266 1,611 2,174 1,606 1,534 1,824 1,346 1,847 2,496 1,961 2,531 3,215 1,121 2,656 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-168 455 229 2,938 4,202 2,029 2,978 2,771 1,861 2,409 2,425 1,534 2,459 1,854 3,908 2,892 2,296 3,142 3,974 2,157 3,005 2,509 1,674 2,589 3,530 2,570 3,131 2,515 1,762 1,984 1,685 1,510 2,025 (156) 7/28/2014 1980 (99) 7/28/2014 1989 (249) 7/28/2014 1992 (310) 7/28/2014 1975 (217) 7/28/2014 1979 (237) 7/28/2014 1975 (252) 7/28/2014 1976 (245) 7/28/2014 2002 (241) 7/28/2014 1976 (188) 7/28/2014 1975 (303) 7/28/2014 1976 (232) 7/28/2014 1987 (202) 7/28/2014 1993 (229) 7/28/2014 1983 (264) 7/28/2014 1975 (222) 7/28/2014 1975 (301) 7/28/2014 1990 (349) 7/28/2014 1985 (190) 7/28/2014 1996 (279) 7/28/2014 1975 (231) 7/28/2014 1993 (284) 7/28/2014 1987 (143) 7/28/2014 1975 (301) 7/28/2014 1990 (131) 7/30/2014 2000 (223) 7/28/2014 1973 (186) 7/28/2014 1994 (379) 7/28/2014 1973 (171) 7/28/2014 1975 (153) 7/28/2014 1995 (456) 7/28/2014 1972 (139) 7/28/2014 1979 Property City Red Lobster St. Peters Red Lobster St.Louis Red Lobster Jackson Red Lobster Meridian Red Lobster Southaven Red Lobster Asheville Red Lobster Burlington Red Lobster Cary Red Lobster Concord Red Lobster Fayetteville Red Lobster Greensboro Red Lobster Raleigh Red Lobster Bismarck Red Lobster Fargo State MO MO MS MS MS 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 Deptford Red Lobster Vineland NE NE NJ NJ NJ Red Lobster Clovis NM Red Lobster Farmington NM Red Lobster Amherst Red Lobster Brooklyn Red Lobster Henrietta Red Lobster Hicksville Red Lobster Liverpool NY NY NY NY NY Red Lobster Poughkeepsie NY Red Lobster Rochester NY Red Lobster Ronkonkoma NY Red Lobster Valley Stream NY Red Lobster Vestal NY Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 1,387 1,128 — 668 544 1,208 1,933 — 675 1,372 946 831 888 876 678 — — — — — 855 1,344 — 956 — 900 1,987 756 — — 1,027 1,543 2,662 2,851 872 2,640 2,865 403 1,118 1,506 2,908 1,785 2,183 3,321 2,933 1,694 1,109 254 2,274 1,608 1,779 318 2,287 1,271 5,897 2,934 870 2,088 669 2,122 1,109 1,417 2,255 F-169 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 1,543 4,049 3,979 872 3,308 3,409 1,611 3,051 1,506 3,583 3,157 3,129 4,152 3,821 2,570 1,787 254 2,274 1,608 1,779 318 3,142 2,615 5,897 3,890 870 2,988 2,656 2,878 1,109 1,417 3,282 (476) 7/28/2014 1976 (271) 7/28/2014 1972 (304) 7/28/2014 1977 (207) 7/28/2014 1996 (265) 7/28/2014 1972 (303) 7/28/2014 1980 (150) 7/28/2014 2011 (182) 7/28/2014 1992 (359) 7/28/2014 2002 (276) 7/28/2014 1978 (200) 7/28/2014 1972 (224) 7/28/2014 1983 (339) 7/28/2014 1990 (312) 7/28/2014 1981 (233) 7/28/2014 1992 (186) 7/28/2014 1996 (90) 7/28/2014 1977 (520) 7/28/2014 1984 (390) 7/28/2014 1991 (319) 7/28/2014 1995 (126) 7/28/2014 1995 (281) 7/28/2014 1992 (184) 7/28/2014 1980 (1,190) 7/28/2014 2003 (315) 7/28/2014 1976 (214) 7/28/2014 1982 (237) 7/28/2014 1975 (111) 7/28/2014 1981 (268) 7/28/2014 1985 (268) 7/28/2014 2005 (354) 7/28/2014 1983 (250) 7/28/2014 1976 Property City State Red Lobster Watertown Red Lobster Yonkers Red Lobster Akron NY NY OH Red Lobster Beavercreek OH Red Lobster Canton 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 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 Red Lobster North Olmsted OH Red Lobster Parma Red Lobster Sandusky OH OH Red Lobster St. Clairsville OH 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 London OK ON Red Lobster Bartonsville PA Red Lobster Chambersburg PA Red Lobster Du Bois PA Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 807 — — 551 398 1,484 365 — 787 306 — 737 843 335 651 612 232 — — 466 1,290 — 200 214 399 610 800 437 1,502 — 694 317 1,586 894 1,398 2,334 2,596 1,687 2,344 1,100 2,123 2,511 873 1,570 658 1,697 2,129 2,615 1,349 1,799 2,291 2,156 1,126 853 1,205 2,477 1,707 2,681 1,960 1,744 649 2,389 1,212 981 F-170 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 2,393 894 1,398 2,885 2,994 3,171 2,709 1,100 2,910 2,817 873 2,307 1,501 2,032 2,780 3,227 1,581 1,799 2,291 2,622 2,416 853 1,405 2,691 2,106 3,291 2,760 2,181 2,151 2,389 1,906 1,298 (231) 7/28/2014 1993 (224) 7/28/2014 2012 (324) 7/28/2014 1981 (285) 7/28/2014 1994 (262) 7/28/2014 1974 (180) 7/28/2014 1977 (243) 7/28/2014 1980 (284) 7/28/2014 2002 (222) 7/28/2014 1973 (254) 7/28/2014 1974 (198) 7/28/2014 1990 (204) 7/28/2014 1991 (140) 7/28/2014 1991 (192) 7/28/2014 1977 (232) 7/30/2014 1977 (251) 7/28/2014 1974 (195) 7/28/2014 1991 (361) 7/28/2014 1982 (402) 7/28/2014 1974 (227) 7/28/2014 1975 (163) 7/30/2014 1986 (300) 7/28/2014 1997 (188) 7/28/2014 1995 (268) 7/28/2014 1982 (233) 7/28/2014 1995 (275) 7/28/2014 1980 (235) 7/28/2014 1991 (218) 7/28/2014 1995 (156) 7/28/2014 1986 (419) 7/28/2014 2010 (191) 7/28/2014 1991 (168) 7/28/2014 1995 Property City State Red Lobster Greensburg Red Lobster Hanover Red Lobster Lancaster Red Lobster Langhorne Red Lobster Mechanicsbur g Red Lobster Philadelphia Red Lobster Pittsburgh Red Lobster Pittsburgh Red Lobster Pittsburgh Red Lobster Pottstown Red Lobster Scranton Red Lobster Springfield Red Lobster State College Red Lobster Washington Red Lobster Whitehall Red Lobster Aiken Red Lobster Columbia Red Lobster Florence PA PA PA PA PA PA PA PA PA PA PA PA PA PA PA SC SC SC Red Lobster Myrtle Beach SC Red Lobster Spartanburg Red Lobster Sumter Red Lobster Chattanooga Red Lobster Clarksville Red Lobster Jackson Red Lobster Memphis Red Lobster Sevierville Red Lobster Abilene Red Lobster Amarillo Red Lobster Red Lobster Burleson College Station Red Lobster Conroe Red Lobster Denton SC SC TN TN TN TN TN TX TX TX TX TX TX Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 748 446 — 979 676 — — 1,352 1,641 — — 1,571 — — — 780 — 779 — — 988 1,548 543 822 1,602 — 209 590 — — — 2,432 1,870 2,968 2,735 2,656 1,902 1,379 1,190 1,096 1,115 1,563 2,344 1,026 694 2,155 1,247 918 1,506 462 1,136 1,117 2,575 2,223 1,427 2,290 1,062 1,976 2,342 356 643 557 832 2,044 F-171 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 3,180 2,316 2,968 3,714 3,332 1,902 1,379 2,542 2,737 1,115 1,563 3,915 1,026 694 2,155 2,027 918 2,285 462 1,136 2,105 4,123 2,766 2,249 3,892 1,062 2,185 2,932 356 643 557 (266) 7/28/2014 1989 (246) 7/28/2014 1995 (450) 7/28/2014 1977 (328) 7/28/2014 1996 (280) 7/28/2014 1976 (301) 7/28/2014 1977 (328) 7/28/2014 1976 (141) 7/28/2014 1977 (146) 7/28/2014 1987 (419) 7/28/2014 1995 (405) 7/28/2014 2001 (282) 7/28/2014 1983 (340) 7/28/2014 1999 (155) 7/28/2014 1976 (530) 7/28/2014 1977 (183) 7/28/2014 1991 (210) 7/28/2014 1980 (209) 7/28/2014 1990 (171) 7/28/2014 2006 (206) 7/28/2014 1973 (187) 7/28/2014 1995 (247) 7/28/2014 1972 (253) 7/28/2014 1990 (214) 7/28/2014 1995 (237) 7/28/2014 1972 (287) 7/28/2014 2002 (224) 7/30/2014 1980 (248) 7/28/2014 1976 (147) 7/28/2014 2003 (156) 7/28/2014 1983 (177) 7/28/2014 2011 2,876 (263) 7/28/2014 1991 Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Red Lobster Duncanville Red Lobster El Paso Red Lobster El Paso Red Lobster Fort Worth 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 San Antonio Red Lobster Sugar Land Red Lobster Texarkana Red Lobster Tyler Red Lobster Victoria Red Lobster Layton Red Lobster Bristol TX TX TX TX TX TX TX TX TX TX TX TX TX TX TX TX TX TX TX TX TX UT VA Red Lobster Charlottesville VA Red Lobster Chesapeake VA Red Lobster Harrisonburg VA Red Lobster Manassas Red Lobster Midlothian Red Lobster Sterling Red Lobster Winchester Red Lobster Olympia Red Lobster Silverdale VA VA VA VA WA WA — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 361 2,658 — — — — 960 — 732 — 1,087 324 1,103 15 1,175 960 493 — — 73 884 478 1,577 816 — 1,262 465 1,800 — — — — 1,661 414 883 239 399 1,833 1,087 1,935 819 1,626 2,625 1,494 1,732 2,280 1,647 2,889 963 708 2,148 1,755 1,905 1,333 1,175 1,021 1,374 1,369 941 655 646 357 596 501 F-172 — — — — — — — — — (106) — — — — — — — — — — — — — — — — — — — — — — 3,019 (272) 7/28/2014 1974 414 883 239 399 2,793 1,087 2,667 819 2,607 2,949 2,597 1,747 3,455 2,607 3,382 963 708 2,221 2,639 2,383 2,910 1,991 1,021 2,636 1,834 2,741 655 646 357 596 (162) 7/28/2014 1976 (210) 7/28/2014 2008 (93) 7/28/2014 1982 (156) 7/28/2014 1974 (209) 7/28/2014 1981 (225) 7/28/2014 1980 (242) 7/28/2014 1991 (235) 7/28/2014 2003 (180) 7/28/2014 1973 (284) 7/28/2014 1981 (179) 7/28/2014 1976 (232) 7/28/2014 1996 (257) 7/28/2014 1981 (248) 7/28/2014 2010 (302) 7/28/2014 1978 (170) 7/28/2014 1974 (158) 7/28/2014 1981 (257) 7/28/2014 1986 (209) 7/28/2014 1982 (224) 7/28/2014 1984 (209) 7/28/2014 1993 (179) 7/28/2014 2005 (202) 7/28/2014 1986 (176) 7/28/2014 1992 (212) 7/28/2014 1993 (155) 7/28/2014 1993 (211) 7/28/2014 2003 (206) 7/28/2014 2001 (145) 7/28/2014 2006 (238) 7/28/2014 1995 2,162 (127) 7/28/2014 1993 Property City State Red Lobster Spokane 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 Ridley Pointe Smyrna Rite Aid Talladega Rite Aid Bear Rite Aid Tucker WY WY TX TX TN 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, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — 171 — 109 — — — — — — — — — — — — — — — — — — — — — — — — 1,270 527 1,823 856 1,524 — 344 1,252 654 1,014 1,514 1,427 1,116 1,534 1,673 1,773 997 1,100 2,552 1,477 1,447 1,337 640 12,480 5,287 20,357 285 9,467 1,311 2,702 1,419 2,472 2,267 1,943 2,228 2,904 2,886 1,200 2,896 — — — — — — — — — — — — — — — — — 86 2,009 377 851 793 824 567 — 743 153 152 300 724 — 256 117 387 — 2,131 2,659 1,821 2,064 — 76 — F-173 1,427 2,386 2,061 3,496 2,629 2,521 1,100 2,896 2,729 2,101 2,351 2,154 (289) 7/28/2014 2009 (151) 7/28/2014 1975 (206) 7/28/2014 1982 (191) 7/28/2014 1975 (270) 7/28/2014 2012 (138) 7/28/2014 1975 (288) 7/28/2014 2003 (297) 7/28/2014 1985 (225) 7/28/2014 2009 (221) 7/28/2014 1994 (233) 7/28/2014 2011 (79) 7/28/2014 1992 25,815 (4,006) 2/7/2014 2006 371 (46) 6/25/2014 2009 11,585 (103) 8/25/2017 2016 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 2,014 2,451 (316) 1/8/2014 1997 (662) 1/8/2014 1999 (341) 1/8/2014 1996 (751) 11/30/2012 2008 (689) 11/30/2012 2008 (590) 11/30/2012 2007 (677) 11/30/2012 2008 (882) 11/30/2012 2007 (876) 11/30/2012 2009 (321) 7/30/2013 1958 (643) 5/19/2014 1998 (375) 5/19/2014 1997 (653) 1/8/2014 1999 (451) 1/8/2014 1998 (496) 1/8/2014 1999 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 Rockwell Collins Sterling Ross Ross Austin Port Arthur Rubbermaid Winfield Rubbermaid Winfield IL VA TX TX KS KS Rubbermaid Bowling Green OH Rubbermaid Brimfield OH Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — 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 29,802 658 2,631 8,077 3,331 14,992 — — — — 819 15,555 1,056 20,060 714 13,564 1,552 29,495 F-174 — 62 (50) 70 — — 52 — — — — — — — 62 65 — — — — 54 — — — — 823 700 — — — — — 1,835 2,154 2,619 1,768 3,699 1,910 1,908 2,211 3,902 2,250 2,880 3,842 3,385 2,903 3,400 1,870 2,714 3,164 4,469 4,409 1,382 2,271 4,059 3,214 3,909 (425) 1/8/2014 1998 (316) 6/24/2014 1996 (674) 7/26/2013 1999 (269) 6/23/2014 1996 (669) 1/8/2014 2000 (358) 7/30/2013 2002 (364) 1/8/2014 1997 (460) 1/8/2014 1998 (767) 2/7/2014 2000 (442) 1/8/2014 1998 (700) 11/13/2012 2006 (1,000) 10/31/2012 2008 (874) 11/13/2012 2006 (501) 5/19/2014 2005 (590) 5/19/2014 1999 (329) 5/19/2014 1998 (602) 1/8/2014 1999 (567) 5/19/2014 1999 (771) 5/19/2014 2004 (761) 5/19/2014 2005 (244) 5/19/2014 2000 (392) 5/19/2014 1999 (701) 5/19/2014 2005 (684) 11/30/2012 2008 (716) 2/7/2014 1998 34,910 (4,928) 6/30/2014 2011 3,989 (726) 5/19/2014 2002 18,323 (2,887) 2/7/2014 2008 16,374 (4,816) 11/28/2012 2012 21,116 (6,644) 4/25/2012 2008 14,278 (3,689) 7/29/2013 2013 31,047 (8,921) 1/31/2013 2012 Property City State Ruby Tuesday Dillon Ruby Tuesday Bartow Ruby Tuesday Orlando Ruby Tuesday Somerset Ryan's Buffet Commerce Ryan's Buffet Rome Ryan's Buffet Asheville CO FL FL KY GA GA NC Ryan's Buffet Clarksburg WV Salty's Jasper The Salvation Army Houston Sam's Club Hoover Sam's Club Colorado Springs AL TX AL CO Sam's Club Douglasville GA Sam's Southern Eatery Kennesaw Santa Rosa Commons Savers Schlotzsky's Schmitz & Schmitz Pace Austin 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 GA FL TX CO TX OH OH OH AR TN OH AR LA OK TX TX TX TX TX Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — 400 270 1,628 1,916 — — 1,286 — (710) 480 962 831 1,120 1,470 1,848 — (647) (919) 1,261 2,204 (1,179) 1,639 (1,305) — 140 2,640 2,253 3,347 1,701 210 219 10,559 9,606 12,652 11,052 46 13,000 4,447 21,884 — — — — — — — — — — — — — — — — — 740 530 29 278 611 609 258 251 945 530 260 260 353 388 154 308 460 2,958 530 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 F-175 — — — — — — 58 — — — — — — (9) — — — — — — — — — — 2,028 2,186 576 1,600 1,785 1,760 2,286 334 359 (416) 6/27/2013 1995 (490) 6/27/2013 1995 — 7/31/2013 1998 (286) 6/27/2013 1995 (203) 2/7/2014 1996 (207) 2/7/2014 1983 (259) 2/7/2014 1996 (48) 1/8/2014 2001 (56) 6/27/2013 1995 13,199 (2,162) 5/19/2014 2004 11,859 (1,825) 2/7/2014 1989 15,999 (2,366) 2/7/2014 1998 12,753 (1,926) 2/7/2014 1999 256 (12) 6/27/2013 1995 26,389 (4,110) 2/7/2014 2008 3,698 1,060 1,979 2,780 1,745 (609) 5/19/2014 2002 (133) 6/27/2013 1997 (262) 6/25/2014 1930 (790) 9/28/2012 1950 (365) 7/30/2012 1950 12,185 (3,727) 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 (229) 11/20/2014 2006 (145) 11/20/2014 2012 (1,451) 6/26/2014 1997 (238) 6/12/2014 2009 (787) 6/12/2014 2010 (229) 6/12/2014 2008 (291) 6/12/2014 2011 (861) 6/25/2014 2011 (374) 6/25/2014 2008 (237) 6/25/2014 2012 (353) 6/25/2014 1982 Property City State Senor Panchos Orrville Shale Tank Truck Cleburne 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 OH TX 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 Shopko Hometown Sierra Pines Ripley 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 Southern Kitchen Prattville Sovereign Bank Linden Sovereign Bank Kennett Square WV WV WV WV MI TX GA PA NC FL GA GA GA AL NJ PA Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — 99 476 757 249 187 176 206 220 670 420 270 730 360 350 510 330 190 110 90 200 382 176 547 939 996 1,524 704 825 707 25 406 809 618 572 800 760 873 543 642 593 599 1,736 — — — — — — — — — — — — — — — — — — — — — 275 1,023 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 (46) 6/27/2013 1990 (96) 6/25/2014 2007 (173) 6/25/2014 2012 (202) 5/19/2014 2001 (315) 2/7/2014 2008 (116) 5/19/2014 2003 (136) 5/19/2014 2003 (181) 6/27/2013 1995 (6) 6/27/2013 1995 (104) 6/27/2013 1995 (190) 7/31/2013 1995 (158) 6/27/2013 1995 (146) 6/27/2013 1995 (204) 6/27/2013 1995 (194) 6/27/2013 1995 (223) 6/27/2013 1995 (139) 6/27/2013 1995 (164) 6/27/2013 1995 (152) 6/27/2013 1995 (153) 6/27/2013 1995 2,118 (371) 5/13/2014 2009 14,941 5,219 19,196 6,893 31,308 (1,974) 11/5/2013 2014 — — — — — — — — — — 390 1,490 137 338 460 450 290 2,184 390 266 507 1,280 663 1,772 — — — — — — — 1,038 1,802 (1,871) 601 837 2,329 2,412 F-176 — — 2,574 1,880 403 845 1,740 1,113 2,062 969 2,930 3,249 (558) 6/27/2013 1995 (113) 7/28/2014 2000 (67) 6/27/2013 2007 (134) 7/31/2013 1978 (327) 6/27/2013 1995 (169) 6/27/2013 1995 (453) 6/27/2013 1995 (79) 2/7/2014 1997 (516) 1/8/2014 1945 (536) 1/8/2014 1963 Initial Costs (1) City State Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property Spaghetti Warehouse Spaghetti Warehouse Arlington San Antonio TX TX CO Sprouts Centennial St. Luke's Urgent Care Creve Coeur MO Staples Staples Staples Pensacola Helena Houston Starbucks Las Vegas Steak 'n Shake Tampa Stearns Crossing Bartlett Stop & Shop Levittown Stop & Shop Cranston FL MT TX NV FL IL PA RI Stripes Stripes Stripes Stripes Stripes 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 La Feria Laredo Laredo Midland Mission TX TX TX TX TX TX TX — — — — — — 630 1,140 1,581 1,644 1,539 1,159 1,815 1,169 — — 680 951 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 1,204 219 581 626 1,098 742 1,400 — 1,434 (1,063) — — — — — — 785 376 — — — — — — — — — — — — — — — — — — — — — — 6,394 4,497 3,354 2,452 3,192 1,533 — 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 1,970 2,367 2,338 4,857 550 F-177 2,030 1,511 7,975 6,141 4,893 3,611 4,361 2,213 1,736 (358) 6/27/2013 1995 (53) 6/27/2013 1995 (1,407) 2/7/2014 2009 (1,022) 2/7/2014 2010 (598) 2/7/2014 2010 (465) 2/7/2014 2012 (573) 2/7/2014 2008 (379) 6/27/2013 1995 (39) 7/31/2013 1999 10,783 (1,517) 2/7/2014 1999 14,671 (2,050) 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 2,189 2,948 2,964 5,955 1,292 — 2/7/2014 2011 (610) 2/7/2014 2010 (630) 2/15/2013 2008 (691) 2/7/2014 2007 (707) 2/7/2014 2007 (610) 2/7/2014 2010 (461) 2/7/2014 2007 (696) 2/7/2014 2007 (693) 2/7/2014 2007 (555) 2/7/2014 2009 (352) 2/7/2014 1999 (598) 2/7/2014 2007 (564) 2/7/2014 2007 (992) 2/7/2014 2010 (596) 2/7/2014 2010 (450) 2/7/2014 2007 (540) 2/15/2013 2008 (563) 2/7/2014 2010 (567) 2/7/2014 2010 (1,070) 2/7/2014 2006 (117) 2/7/2014 1986 Property City State Encumbrances at December 31, 2017 Stripes Stripes Stripes Stripes Stripes Stripes Stripes Stripes Mission Odessa Odessa Pharr Ranchito Rio Hondo San Angelo San Angelo Subway Knoxville 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 Lakeland 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 Sun Trust Bank S. Daytona Beach West Palm Beach Sun Trust Bank Atlanta Sun Trust Bank Atlanta Sun Trust Bank Dunwoody Sun Trust Bank Jesup Sun Trust Bank St. Simons Island FL FL FL FL FL FL FL FL FL FL FL FL GA 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 MD MD NC — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — Initial Costs (1) Land 1,007 301 803 281 498 293 772 1,006 160 654 572 479 82 1,167 598 460 535 751 590 563 592 1,026 1,018 1,435 1,784 184 1,363 2,653 1,728 991 523 616 Buildings, Fixtures and Improvements 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 1,110 1,381 1,249 1,753 1,095 1,314 1,099 1,026 1,527 478 1,460 1,657 734 2,170 931 991 2,962 924 F-178 Costs Capitalized Subsequent to Acquisition (2) (33) — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction 4,152 3,196 4,399 2,812 3,169 2,933 4,797 4,283 509 2,179 2,289 2,396 545 1,945 1,708 1,841 1,784 2,504 1,685 1,877 1,691 2,052 2,545 1,913 3,244 1,841 2,097 4,823 2,659 1,982 3,485 1,540 (660) 2/7/2014 2003 (647) 2/7/2014 2011 (1,155) 2/7/2014 1998 (693) 2/15/2013 1995 (588) 2/7/2014 2010 (723) 2/15/2013 2008 (889) 2/7/2014 1997 (728) 2/7/2014 2007 (86) 6/27/2013 1995 (385) 4/12/2013 1996 (433) 4/12/2013 1998 (492) 3/22/2013 1995 (119) 3/22/2013 1980 (196) 4/12/2013 1981 (280) 4/12/2013 1988 (355) 3/22/2013 1982 (315) 4/12/2013 1994 (450) 3/22/2013 2000 (281) 3/22/2013 1989 (337) 3/22/2013 1982 (277) 4/12/2013 1985 (263) 3/22/2013 1981 (385) 4/12/2013 1965 (121) 4/12/2013 1970 (375) 3/22/2013 1972 (425) 3/22/2013 1964 (188) 3/22/2013 1975 (518) 7/23/2013 1976 (239) 3/22/2013 1975 (250) 4/26/2013 1880 (761) 3/22/2013 1964 (237) 3/22/2013 1970 Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — 512 707 747 403 447 382 978 658 223 286 567 1,598 613 90 512 707 1,388 748 831 382 2,933 658 1,263 1,143 305 1,308 613 510 — — — — — — — — — — — — — — 1,024 1,414 2,135 1,151 1,278 764 3,911 1,316 1,486 1,429 872 2,906 1,226 600 (129) 4/12/2013 1980 (178) 4/12/2013 1988 (350) 4/12/2013 1973 (189) 4/12/2013 1962 (210) 4/12/2013 2001 (98) 3/22/2013 1971 (753) 3/22/2013 2000 (169) 3/22/2013 1977 (324) 3/22/2013 1953 (293) 3/22/2013 1953 (73) 7/23/2013 1954 (330) 4/12/2013 1992 (155) 4/12/2013 1970 (131) 3/22/2013 1975 Property City State 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 Raleigh Sun Trust Bank Chattanooga Sun Trust Bank Madison Sun Trust Bank Nashville Sun Trust Bank Nashville Sun Trust Bank Nashville Sun Trust Bank Cheriton NC NC NC NC NC NC NC NC TN TN TN TN TN VA F-179 Sunset Valley TX 16,894 14,283 28,351 Property City State Sun Trust Bank Lynchburg Sun Trust Bank Petersburg Sun Trust Bank Richmond Sun Trust Bank Richmond 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 Taco Bell Suisun City CA CA CA Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — 251 102 277 224 265 240 365 540 466 306 416 2,012 1,504 894 929 2,162 — — — 284 790 985 10,475 1,625 2,298 22,500 4,143 36,987 — — — — — — — — — — — — — — — — — — — 419 375 180 348 360 378 445 160 150 364 278 306 500 524 322 367 415 415 355 778 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 1,419 F-180 — — — — — — 128 — 47 (3) — — 5 — — — — — — — — — — — — — — — — — — — 717 408 693 2,236 1,769 1,134 1,422 2,702 (120) 3/22/2013 1973 (77) 4/12/2013 1975 (107) 3/22/2013 1959 (507) 4/12/2013 1909 (373) 5/22/2013 1961 (160) 6/4/2014 2006 (173) 9/26/2014 1995 (355) 5/19/2014 2009 42,681 (5,530) 2/7/2014 2007 10,756 (5,380) 7/24/2014 1982 2,415 3,283 (415) 6/27/2013 1995 (618) 12/31/2012 1959 41,135 (6,983) 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 1,774 (183) 7/31/2013 1995 (265) 6/27/2013 1995 (316) 6/27/2013 1995 (191) 7/31/2013 1995 (361) 6/27/2013 1995 (196) 6/27/2013 1995 (205) 6/27/2013 1995 (487) 6/27/2013 1995 (263) 6/27/2013 1995 (159) 7/31/2013 1995 (196) 7/31/2013 1995 (286) 6/27/2013 1990 (334) 6/27/2013 1985 (256) 6/27/2013 1992 (227) 6/27/2013 1996 (251) 6/27/2013 1992 (305) 6/27/2013 1992 (308) 6/27/2013 1992 (334) 7/31/2013 1986 Property City State Encumbrances at December 31, 2017 Taco Bell Vacaville Taco Bell Vacaville Taco Bell Jacksonville Taco Bell Jacksonville Taco Bell Pensacola Taco Bell Augusta Taco Bell Hephzibah Taco Bell Jesup Taco Bell Kennesaw Taco Bell Waycross CA CA FL FL FL GA GA GA GA GA Taco Bell Crawfordsville IN Taco Bell Hartford City Taco Bell Kokomo Taco Bell Lafayette Taco Bell Marion Taco Bell Noblesville Taco Bell Tipton 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 Taco Bell / KFC Shreveport Taco Bell / KFC Shreveport Taco Bell / KFC Shreveport MI MO MO OH OH OH TN TX AR LA LA LA LA LA — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — Initial Costs (1) Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Buildings, Fixtures and Improvements Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 1,513 1,375 1,167 1,383 1,897 1,292 930 715 601 1,115 934 889 798 912 921 545 936 1,082 704 1,951 1,168 1,267 732 904 714 1,225 630 639 514 753 522 528 F-181 2,035 2,559 1,607 1,723 2,037 1,512 1,260 945 763 1,285 1,168 988 997 1,216 1,417 908 1,040 1,221 828 2,141 1,578 1,667 861 1,294 994 1,625 741 913 857 (381) 6/27/2013 1985 (346) 6/27/2013 1994 (288) 6/27/2013 1995 (342) 6/27/2013 1995 (469) 6/27/2013 1995 (319) 6/27/2013 1995 (230) 6/27/2013 1995 (177) 6/27/2013 1995 (151) 6/27/2013 1984 (275) 6/27/2013 1995 (220) 7/31/2013 1991 (209) 7/31/2013 1978 (188) 7/31/2013 1993 (215) 7/31/2013 1990 (217) 7/31/2013 1994 (128) 7/31/2013 2005 (220) 7/31/2013 1998 (272) 6/27/2013 1995 (166) 7/31/2013 1989 (430) 6/27/2013 1995 (289) 6/27/2013 1995 (313) 6/27/2013 1995 (172) 7/31/2013 1995 (223) 6/27/2013 1995 (177) 6/27/2013 1995 (303) 6/27/2013 1995 (148) 7/31/2013 1980 (150) 7/31/2013 1995 (121) 7/31/2013 1995 1,369 (177) 7/31/2013 1995 949 880 (123) 7/31/2013 1997 (124) 7/31/2013 1998 Land 522 1,184 440 340 140 220 330 230 162 170 234 99 199 304 496 363 104 139 124 190 410 400 129 390 280 400 111 274 343 616 427 352 Property City State 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 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 TX KS MO MO TX TX TX TX TX TX TX TX TX TX TX TX TX Take 5 Oil Change Take 5 Oil Change Take 5 Oil Change Take 5 Oil Change Take 5 Oil Change Take 5 Oil Change Lawrenceburg IN Alexandria Erlanger Florence Fort Wright Miamisburg KY KY KY KY OH Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 800 569 176 180 106 125 470 533 123 420 561 476 753 597 601 228 423 595 595 700 420 600 500 280 500 520 516 294 337 279 179 246 978 695 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 1,408 721 677 1,072 896 816 486 F-182 — — — 3 — — — — 4 — — — — — — — — — — — — — — — — — — — — — — — 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 1,237 971 1,409 1,175 995 732 (230) 7/31/2013 2000 (164) 7/31/2013 1999 (373) 7/31/2013 1996 (60) 10/1/2013 1995 (224) 7/31/2013 1992 (265) 7/31/2013 1995 (135) 7/31/2013 1986 (266) 6/27/2013 1978 (64) 10/1/2013 1995 (391) 6/27/2013 1995 (198) 7/31/2013 2000 (176) 6/27/2013 2006 (177) 7/31/2013 2006 (211) 7/31/2013 2000 (145) 6/27/2013 2000 (141) 6/27/2013 2000 (143) 6/27/2013 2000 (210) 7/31/2013 1995 (210) 7/31/2013 2000 (520) 6/27/2013 1995 (351) 6/27/2013 1995 (483) 6/27/2013 1995 (430) 6/27/2013 1995 (419) 6/27/2013 1995 (436) 6/27/2013 1995 (348) 6/27/2013 1995 (13) 6/8/2017 2017 (11) 6/8/2017 1996 (16) 6/8/2017 2003 (14) 6/8/2017 1998 (13) 6/8/2017 1995 (8) 6/8/2017 1992 Initial Costs (1) City State Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property Take 5 Oil Change Talbots Talbots Moraine Hingham Lakeville TCF Bank Crystal TD Bank Falmouth 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 OH MA MA MN ME 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 Warwick 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 Thorntons Oil Summit Thorntons Oil Waukegan WI FL MI MI MI NY RI IL IL IL IL IL IL IL IL IL IL IL — 415 692 23,362 3,009 27,080 22,509 6,302 25,209 — 640 642 — — — — 1,107 (11) 6/8/2017 1995 30,089 (6,043) 5/24/2013 1980 31,511 (7,112) 5/17/2013 1987 1,282 (153) 6/27/2013 1995 19,607 4,057 23,689 (81) 27,665 (5,393) 3/18/2013 2002 — — — — — — — — — — — — — — — — — — — — — — — — — — — 2,666 40,981 (7,009) 36,638 (2,448) 11/5/2013 1999 430 490 540 650 570 580 670 780 1,061 1,530 547 281 1,042 1,215 1,228 1,184 1,403 953 1,203 565 862 661 1,239 926 2,233 875 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) 733 1,882 2,539 — — — 898 278 — — — — — — — 2,003 1,338 2,194 1,688 2,514 109 1,421 F-183 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 1,917 3,285 3,492 2,379 2,568 2,200 2,855 2,927 3,440 2,342 2,296 (561) 6/27/2013 1995 (308) 6/27/2013 1995 (525) 6/27/2013 1995 (544) 6/27/2013 1995 (395) 6/27/2013 1995 (468) 6/27/2013 1995 (588) 6/27/2013 1995 (477) 6/27/2013 1995 (478) 6/27/2013 2001 (406) 7/31/2013 2001 (435) 7/31/2013 1998 (672) 7/31/2013 1983 (277) 7/31/2013 1994 (498) 6/27/2013 2000 (295) 6/27/2013 1983 (191) 2/7/2014 1992 (435) 2/7/2014 1989 (583) 2/7/2014 2000 (225) 2/7/2014 1994 (475) 2/7/2014 2006 (326) 2/7/2014 1995 (488) 2/7/2014 1996 (427) 2/7/2014 1995 (651) 2/7/2014 1994 (30) 2/7/2014 2000 (330) 2/7/2014 1999 Property City State Encumbrances at December 31, 2017 Initial Costs (1) Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Buildings, Fixtures and Improvements Accumulated Depreciation (3) (5) Date Acquired Date of Construction 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 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 TN Toys R Us Coral Springs FL Tractor Supply Oneonta Tractor Supply Summerdale Tractor Supply Tuscaloosa Tractor Supply Little Rock Tractor Supply Auburn Tractor Supply Dixon Tractor Supply Jackson AL AL AL AR CA CA CA Land 760 1,319 685 467 602 1,233 732 659 483 637 299 547 609 373 499 203 289 777 221 9,889 1,190 4,264 359 276 746 930 — — — — — — — — — — — — — — — 1,204 — — — — — — — — — — 1,171 — 1,500 — 1,175 2,962 1,619 — 1,209 3,069 687 1,505 1,479 1,398 1,533 1,829 3,271 1,778 1,680 2,036 1,550 — — — — — — — — — — — — — — 3,829 2,006 2,190 1,946 2,000 2,766 2,561 3,930 2,261 2,317 2,335 2,097 (677) 2/7/2014 1997 (189) 2/7/2014 2005 (352) 2/7/2014 1996 (352) 2/7/2014 1987 (330) 2/7/2014 1990 (387) 2/7/2014 1995 (441) 2/7/2014 1995 (755) 2/7/2014 1971 (375) 2/7/2014 2007 (351) 2/7/2014 1994 (453) 2/7/2014 1991 (349) 2/7/2014 1998 83,329 (20,402) 11/5/2013 1997 1,073 (195) 6/27/2013 1995 2,248 81,081 310 763 3,081 22,512 979 26,572 (5,077) 11/5/2013 2001 — — — — — — — — — — — — — — — — — 2,180 1,492 1,866 907 1,689 2,036 491 (334) 2/7/2014 2010 (353) 4/30/2012 2003 (301) 3/28/2014 1997 (180) 6/27/2013 1982 (357) 6/27/2013 1977 (287) 2/21/2014 2001 (72) 7/31/2013 2007 94,842 (21,376) 11/5/2013 2001 17,037 (3,356) 11/5/2013 2002 9,553 1,797 2,746 2,725 2,965 4,076 5,663 4,849 (1,031) 2/7/2014 2010 (323) 4/18/2013 1983 (427) 2/7/2014 2010 (341) 2/7/2014 2012 (350) 2/7/2014 2009 (516) 2/7/2014 2012 (725) 2/7/2014 2007 (618) 2/7/2014 2012 1,571 1,119 1,367 704 1,400 1,259 270 84,953 15,847 5,289 1,438 2,470 1,979 2,035 2,901 4,044 3,640 F-184 Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Tractor Supply Los Banos Tractor Supply Buena Vista 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 CO DE FL GA GA IL IN IN IN KS KS KY KY KY LA 3,468 1,213 — — — — — 1,404 — 1,433 646 1,487 310 687 978 565 620 762 2,247 1,715 1,377 — — — — 2,048 361 446 453 540 393 550 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 York Tractor Supply Plaistow MO MO MO MO NC NC NE NH — 806 2,428 1,601 1,423 — — 1,125 1,346 1,090 1,286 1,404 1,479 1,402 — — 530 267 488 490 476 480 730 589 434 990 326 638 4,851 3,620 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 2,778 3,190 (845) 2/28/2013 2009 (49) 6/16/2017 2014 (548) 2/7/2014 2007 (559) 10/10/2013 2012 (404) 2/7/2014 2008 (335) 2/7/2014 2007 (519) 2/7/2014 2008 (457) 2/7/2014 2011 (378) 2/7/2014 2010 (614) 2/7/2014 2007 (458) 2/7/2014 2010 (387) 5/19/2014 2006 (387) 5/19/2014 2005 (468) 2/7/2014 2011 (345) 5/19/2014 1995 (553) 8/7/2012 2011 (570) 2/7/2014 2009 (500) 6/26/2014 2013 (639) 2/7/2014 2008 (490) 2/7/2014 2009 (447) 3/28/2014 2005 (501) 6/12/2012 2010 (321) 2/7/2014 2009 (359) 2/7/2014 2009 (321) 2/7/2014 2010 (438) 2/7/2014 2009 (499) 2/7/2014 2008 (455) 2/7/2014 2009 (378) 2/7/2014 2010 (10) 11/3/2017 2017 (512) 10/10/2013 2012 — — — — — — 59 — — — — — — — — — — — — — — — — — — — 13 — — — — 3,638 2,974 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 2,452 2,552 F-185 Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) 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 Tractor Supply Romney Trader Joe's Sarasota Trader Joe's Lexington NM NM NY OH OH OK OK OK PA SC SC TX TX TX TX TX TX VA WV FL KY Tumbleweed Terre Haute IN Tumbleweed Louisville Tumbleweed Mayesville Tumbleweed Owensboro KY KY KY Tumbleweed Bellefontaine OH Tumbleweed Springfield Tumbleweed Wooster 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 — — 1,180 1,161 — — — — — — — — — — — — 952 725 476 927 768 309 318 469 524 418 1,646 2,287 434 468 353 355 234 549 342 Accumulated Depreciation (3) (5) Date Acquired Date of Construction (586) 11/29/2012 2011 (1,069) 1/27/2012 2008 (720) 2/7/2014 2009 (415) 3/28/2014 2012 (382) 2/7/2014 2009 (450) 3/28/2014 2012 (295) 4/29/2014 1992 (368) 2/7/2014 1975 (390) 2/7/2014 2007 (418) 3/28/2014 2014 (415) 2/7/2014 2009 (458) 2/7/2014 2009 (488) 2/7/2014 2009 (370) 2/7/2014 2011 (382) 2/7/2014 2009 (407) 2/7/2014 2010 (346) 2/7/2014 2009 (516) 2/7/2014 2009 (388) 2/7/2014 2010 (422) 2/7/2014 2009 (281) 6/19/2012 1993 (436) 5/19/2014 2004 (11) 11/29/2017 2017 (1,108) 2/7/2014 2012 (811) 2/7/2014 2012 (346) 7/31/2013 1997 (372) 7/31/2013 2001 (218) 7/31/2013 2000 (377) 7/31/2013 1997 (249) 7/31/2013 1999 (340) 7/31/2013 1998 (212) 7/31/2013 1997 16 — — — — — — — — 538 — — — — 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 3,097 5,416 3,795 1,303 1,404 823 1,420 938 1,280 799 F-186 2,870 4,646 6,233 3,285 3,128 3,096 1,759 2,147 3,059 3,193 2,806 2,920 3,822 3,174 2,958 2,953 2,971 3,931 2,681 2,869 1,564 2,622 3,515 7,062 6,082 1,737 1,872 1,176 1,775 1,172 1,829 1,141 Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Tumbleweed Zanesville OH Tutor Time Downingtown PA Tutor Time Austin Ulta Salon Jonesboro Ulta Salon Fort Gratiot Ulta Salon Jackson TX AR MI TN United Buffet and Grille United Technologies Hagerstown MD University Plaza Flagstaff The UPS Store Elizabethtown KY US Bank Alsip US Bank Chicago US Bank US Bank Chicago Chicago Heights IL IL IL IL US Bank Elmwood Park IL US Bank Evergreen Park US Bank Lyons US Bank Orland Hills US Bank Westchester US Bank Wilmington US Bank Fayetteville US Bank Garfield Height VA Clinic Oceanside Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Andalusia Jasper Mobile Tuscaloosa Arkadelphia Pine Bluff Searcy Fountain Hills AZ Peoria AZ FL AZ IL IL IL IL IL NC OH CA AL AL AL AL AR AR AR — — — — — 1,454 — 639 205 417 742 164 547 244 1,491 2,788 1,861 2,289 2,083 2,123 — — — — — — 1,306 (1,505) Bradenton 10,050 2,692 17,973 4,727 1,460 18,087 10,336 — 491 778 — — — — — — — — — — — — 105 — 1,280 1,511 1,082 1,637 2,441 944 1,212 2,327 853 1,872 1,741 1,016 251 2,545 (2,786) 276 (162) 1,306 (1,549) 633 433 (595) (409) 1,286 (1,318) 597 (228) — — — — — — — — — 226 267 191 182 431 167 214 2,646 1,253 — — — — 366 330 608 165 — — — — — — — — — 94 577 127 244 225 105 231 241 837 27,749 9,489 33,812 2,130 2,993 2,278 3,031 2,247 2,670 45 (395) 7/31/2013 1998 (562) 2/7/2014 1998 (396) 2/7/2014 2000 (422) 2/7/2014 2013 (396) 2/7/2014 2012 (400) 2/7/2014 2010 (12) 1/8/2014 2001 20,665 (2,969) 2/7/2014 2004 23,305 (4,505) 2/7/2014 1982 12,574 (2,686) 9/24/2013 2001 1,506 1,778 1,273 1,819 2,872 1,111 1,426 3,580 1,219 2,202 2,349 1,181 (445) 8/1/2010 1981 (526) 8/1/2010 1923 (376) 8/1/2010 1979 (435) 1/24/2013 1996 (815) 8/1/2010 1984 (329) 8/1/2010 1984 (422) 8/1/2010 1959 (626) 12/14/2012 1995 (223) 2/22/2013 1986 (615) 8/1/2010 1966 (322) 2/7/2014 2012 (243) 1/8/2014 1958 43,406 (6,015) 2/7/2014 2010 345 336 241 1 263 129 199 610 (65) 6/27/2013 2004 (34) 2/7/2014 2000 (18) 6/27/2013 1974 — 1/8/2014 2001 — 6/27/2013 1990 (16) 6/27/2013 1978 (30) 1/8/2014 1998 (13) 6/27/2013 1994 1,953 (1,552) 1,238 (28) 2/27/2013 1996 F-187 Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (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 Highlands Ranch Lone Tree CA CA CA CA CA CO CO New London CT Smyrna DE Cocoa Davie Lake Wales Melbourne Pinellas Park Tallahassee Titusville Bowdon Columbus Dawson Stockbridge Mason City Joliet Lombard Merrillville FL FL FL FL FL FL FL GA GA GA GA IA IL IL IN London KY Nicholasville KY Bossier City LA Detroit Grosse Pointe Woods MI MI Harper Woods MI Highland Park MI Ypsilanti MI — — — — — 190 249 195 265 195 1,810 (1,249) 986 (1,235) 1,013 (844) 1,261 (1,390) 1,044 (1,238) 751 — 364 136 1 (167) 6/27/2013 1995 — 1/8/2014 2002 (61) 1/8/2014 2000 (27) 1/8/2014 1995 — 1/8/2014 2000 3,475 2,850 4,795 — 7,645 (947) 2/7/2014 2007 — — — — — — — 196 94 183 249 193 671 464 1,014 (1,070) 534 1,036 567 (448) (994) — 1,009 (1,201) 671 1,392 — — 140 180 225 816 1 1,342 1,856 (23) 1/8/2014 1995 (2) 8/1/2010 1995 (5) 8/1/2010 1995 (143) 6/27/2013 1979 — 1/8/2014 1989 (172) 3/22/2013 1988 (351) 4/12/2013 1987 16,200 4,538 23,842 (17,726) 10,654 (810) 11/5/2013 2001 — — — — — — — — — — — — — — — — — — 828 528 416 1,933 239 — — 1,247 (1,457) 1,307 2,529 (2,876) 131 422 290 1,834 84 511 370 435 274 (182) 2,391 (2,428) 1,255 1,585 100 4,768 1,493 2,040 (192) — — — (666) (939) 1,168 2,594 (2,882) 204 140 207 150 85 1,159 (1,248) (785) (953) (637) (208) 1,046 1,171 848 483 F-188 2,761 (488) 4/12/2013 1991 767 206 960 223 385 1,353 3,419 184 5,279 1,197 1,536 880 115 401 425 361 360 (60) 6/27/2013 1978 (2) 3/22/2013 1900 (66) 2/7/2014 2002 (16) 6/27/2013 1987 (15) 7/31/2013 1987 (175) 6/27/2013 1995 (415) 2/7/2014 2011 (26) 6/27/2013 1973 (1,042) 2/7/2014 2011 (47) 6/27/2013 1995 (146) 6/11/2014 2001 (75) 2/7/2014 2004 (2) 8/1/2010 1956 (54) 6/27/2013 1995 (5) 8/1/2010 1982 (4) 8/1/2010 1967 — 11/23/2011 2002 Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (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 Blue Springs MO Chesterfield MO Joplin Joplin Pearl Albemarle Burlington Monroe Oakboro Yadkinville Zebulon Flanders Mt. Laurel Hobbs East Greenbush Elmira Greene MO MO MS NC NC NC NC NC NC NJ NJ NM NY NY NY Schenectady NY Cincinnati Englewood Massillon Mentor Moraine OH OH OH OH OH Youngstown OH Tulsa The Dalles Grants Pass Beaver Falls Indiana OK OR OR PA PA North Fayette PA Lexington North Charleston SC SC 810 1,537 314 127 1,346 (1,515) 4,123 1,610 300 — — — 1,058 1,857 (1,893) 457 545 (493) (403) 1,837 (1,319) 915 1,468 1,447 1,332 1,792 540 371 630 883 — 269 370 (605) (368) (680) — — (543) (241) (441) 1,227 (1,068) 1,655 824 — (847) (572) (384) 1,202 (1,008) 1,011 148 232 1,174 — — (37) 225 802 (486) 2,979 — 1,304 (1,489) 1,255 2,700 (920) — 1,307 (1,356) — — — — — — — — — — — 483 446 204 360 200 515 — — — — — — — — — — — — — — — — — — — 815 404 199 216 292 353 547 212 178 87 139 530 201 393 243 676 1,990 244 2,193 641 5,660 1,924 427 1,022 447 588 722 295 203 465 2,351 3,124 272 432 128 375 (62) 6/27/2013 1995 (904) 2/7/2014 2012 (359) 2/11/2014 1984 (89) 2/11/2014 1973 (83) 2/7/2014 2000 (33) 6/27/2013 1995 (19) 4/12/2013 1995 (61) 4/12/2013 1920 (2) 7/23/2013 1970 (10) 4/12/2013 1975 (3) 3/22/2013 1972 (175) 2/7/2014 2003 (286) 2/7/2014 2004 — 6/27/2013 1995 (5) 6/27/2013 1980 (4) 7/31/2013 1975 (7) 8/1/2010 1981 1,100 (19) 8/1/2010 1974 605 163 406 (5) 7/31/2013 1969 — 6/27/2013 1974 (5) 8/1/2010 1958 1,189 (352) 8/1/2010 1976 235 334 1,929 517 3,372 58 1,011 4,690 195 (28) 6/27/2013 1995 (32) 6/27/2013 1976 (300) 6/27/2013 1995 (172) 7/31/2013 1994 (674) 1/8/2014 1963 (9) 1/8/2014 2004 (105) 7/31/2013 2000 (521) 2/7/2014 1999 (37) 1/8/2014 1998 4,636 — 6,829 (1,025) 2/7/2014 2008 F-189 Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (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 Travelers Rest SC La Vergne Memphis Sevierville Abilene Amarillo Austin Bay City Dallas TN TN TN TX TX TX TX TX Grand Prairie TX Houston Houston Irving Lubbock Plano San Angelo Texas City Midlothian Norfolk Poultney White River Junction Schofield TX TX TX TX TX TX TX VA VA VT VT WI Vanguard Car Rental College Park GA Velox Insurance Woodstock Verizon Wireless Statesville The Vitamin Shoppe The Vitamin Shoppe Evergreen Park Ashland GA NC IL VA — — — — — — — — — — — — — — — — — — — — — — — — — — — 746 171 100 1,443 803 993 837 229 810 997 900 980 522 694 540 769 614 230 656 149 183 106 1,561 155 207 476 746 209 283 430 — (990) — 167 (751) — 2,317 (1,848) 1,797 — 124 (220) 1,656 2,327 1,749 — — — 2,284 (1,575) 512 — 1,060 2,306 (235) (301) — — 3,351 (2,351) 1,300 (861) 437 847 1,039 196 6,244 127 459 1,427 — (777) (836) — — — 27 — — 502 380 550 1,122 803 1,462 2,634 133 2,466 3,324 2,649 1,689 799 393 1,600 3,075 1,614 669 1,093 219 386 302 (11) 4/12/2013 1995 (54) 3/22/2013 1985 — 6/27/2013 1995 (66) 2/7/2014 2003 — 6/27/2013 1995 (84) 7/31/2013 2001 (468) 6/27/2013 1998 (5) 7/31/2013 1985 (423) 6/27/2013 1995 (617) 7/31/2013 2001 (447) 6/27/2013 1995 (76) 6/27/2013 1995 (52) 6/27/2013 1995 — 6/27/2013 1979 (271) 6/27/2013 1995 (612) 7/31/2013 2005 (149) 2/7/2014 2002 (27) 6/27/2013 1995 (110) 4/12/2013 1990 (1) 8/1/2010 1860 (2) 8/1/2010 1975 (46) 7/31/2013 1987 7,805 (1,649) 5/19/2014 2002 282 693 (34) 7/31/2013 1988 (118) 6/27/2013 1993 1,903 (377) 4/19/2013 2012 22,062 (4,948) 11/5/2013 2013 2,399 19,663 Volusia Square Daytona Beach FL 16,557 4,598 28,511 269 33,378 (5,881) 2/7/2014 1986 Waffle House Cocoa Walgreens Birmingham Walgreens Wetumpka Walgreens Kingman FL AL AL AZ — 1,509 — 2,902 150 996 547 669 279 3,005 3,102 5,726 F-190 — — — — 429 4,001 3,649 6,395 (66) 7/31/2013 1986 (700) 2/7/2014 1999 (1,012) 2/22/2012 2007 (1,230) 2/7/2014 2009 Initial Costs (1) Property City State 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 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 Walgreens Frankfort KY Walgreens Shereveport LA Encumbrances at December 31, 2017 — — Land 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 2,355 1,156 — — — — — — 2,450 394 1,212 1,617 952 911 822 416 2,189 1,710 1,964 1,472 — 2,350 807 626 3,022 1,240 — — 911 619 Walgreens Framingham MA 2,951 2,103 Walgreens Baltimore MD Walgreens Brooklyn Park MD — — 1,185 1,416 Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Buildings, Fixtures and Improvements Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — 167 — — — — — — — — — — — — — — — — 1,927 5,143 3,571 3,568 4,246 3,689 4,050 2,971 1,869 2,940 3,337 3,747 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 5,014 3,643 3,509 4,770 2,764 4,160 F-191 2,964 6,377 4,977 3,964 5,105 5,270 4,050 3,490 2,876 4,523 5,083 4,694 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 6,254 4,554 4,128 6,873 3,949 5,576 (554) 3/26/2013 1999 (1,102) 2/7/2014 2003 (782) 2/7/2014 2004 (1,200) 10/11/2011 2008 (996) 2/7/2014 2009 (987) 7/11/2013 2002 (1,083) 7/2/2013 2008 (645) 2/7/2014 2003 (481) 9/30/2013 1996 (875) 1/25/2013 2012 (724) 2/7/2014 2001 (800) 2/7/2014 2004 (818) 2/7/2014 2005 (830) 2/7/2014 2008 (871) 2/7/2014 2009 (417) 5/19/2014 1994 (842) 1/30/2013 1999 (893) 1/30/2013 1995 (687) 2/7/2014 2003 (1,000) 2/7/2014 2000 (809) 2/7/2014 2008 (829) 2/7/2014 2008 (709) 2/7/2014 2002 (691) 2/7/2014 2002 (1,012) 7/31/2012 2001 (801) 2/7/2014 2008 (1,112) 2/7/2014 2006 (1,189) 2/8/2012 2006 (1,145) 2/22/2012 2003 (1,005) 2/7/2014 2007 (726) 8/6/2013 2000 (874) 2/7/2014 2008 Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City Walgreens Augusta Walgreens Clarkston Walgreens Walgreens Clinton Dearborn Heights Walgreens Eastpointe Walgreens Lincoln Park Walgreens Livonia Walgreens Stevensville Walgreens Troy Walgreens Warren State ME MI MI MI MI MI MI MI MI MI 3,058 1,648 — — — — 2,768 1,463 190 668 5,494 1,041 — 3,099 — — 261 855 — 748 Walgreens North Mankato MN 2,451 1,748 Walgreens Country Club Hills Walgreens Columbia Walgreens Greenwood MO MS MS — — — Walgreens Cape Carteret NC 2,400 997 452 561 919 Walgreens Durham Walgreens Durham Walgreens Laurinburg Walgreens Leland NC NC NC NC 2,871 1,441 2,760 2,201 — 355 2,472 1,226 Walgreens Rocky Mount NC 2,899 1,105 Walgreens Winterville NC Walgreens North Platte Walgreens Omaha Walgreens Papillion Walgreens Maplewood NE NE NE NJ 2,931 — 578 935 2,496 1,316 — 1,239 4,700 1,071 — — — — — — — — — — — — — — — — — — — — — — — — — 6,794 5,965 4,876 3,795 3,340 6,937 2,611 4,275 1,896 3,738 5,352 5,201 4,524 3,742 4,006 5,022 5,124 3,932 4,907 5,151 5,900 5,226 5,438 4,451 7,142 (1,157) 2/7/2014 2007 (699) 2/7/2014 2000 (1,037) 11/13/2012 2002 (1,018) 4/1/2013 1998 (878) 1/19/2012 1998 (1,850) 7/31/2012 2007 (664) 4/1/2013 1998 (1,141) 11/28/2011 2007 (571) 12/12/2012 2000 (908) 11/21/2012 1999 (795) 2/7/2014 2008 (841) 2/7/2014 2009 (1,227) 12/21/2012 2011 (1,038) 2/22/2012 2007 (667) 2/7/2014 2008 (863) 2/7/2014 2010 (765) 2/7/2014 2008 (819) 2/26/2014 2013 (818) 2/7/2014 2008 (994) 2/7/2014 2009 (1,214) 2/7/2014 2009 (958) 2/7/2014 2009 (910) 2/7/2014 2009 (696) 2/7/2014 2009 (2,026) 11/18/2011 2011 5,146 3,197 3,413 3,605 2,672 5,896 2,350 3,420 1,896 2,990 3,604 4,204 4,072 3,181 3,087 3,581 2,923 3,577 3,681 4,046 5,322 4,291 4,122 3,212 6,071 F-192 Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (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 1,684 — — 2,608 3,067 — — 2,240 — — — 664 219 472 743 398 820 919 697 368 647 1,147 5,695 1,855 5,293 1,726 — 835 3,686 1,206 2,180 1,300 3,991 1,313 2,882 1,941 Walgreens Myrtle Beach SC — — Walgreens N. Charleston SC 3,379 1,320 Walgreens Spearfish Walgreens Bartlett Walgreens Cordova Walgreens Memphis Walgreens Anthony Walgreens Baytown SD TN TN TN TX TX — — — — — 2,399 1,116 2,358 1,005 896 644 953 — — — — — — 71 — 68 — — — — — 87 — — — — — — (232) — — — — — — — — — — 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 4,287 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 4,298 F-193 3,460 7,642 3,501 4,659 3,984 5,601 2,283 4,373 2,430 5,500 3,984 5,405 4,343 4,984 4,823 4,311 4,051 7,421 6,905 4,177 4,823 3,828 5,253 5,467 2,077 4,401 5,274 4,552 3,350 3,583 5,013 5,251 (506) 2/7/2014 1996 (1,949) 5/30/2012 2009 (791) 4/30/2013 2001 (514) 4/21/2014 1998 (1,340) 10/5/2011 2007 (593) 2/7/2014 2006 (430) 5/31/2013 1994 (1,355) 2/22/2012 2007 (417) 5/19/2014 1994 (1,057) 2/7/2014 2008 (1,134) 6/27/2012 2008 (961) 2/7/2014 2001 (716) 2/7/2014 2006 (929) 2/7/2014 2000 (941) 2/7/2014 2000 (1,090) 1/2/2013 2008 (629) 2/7/2014 2001 (1,600) 3/5/2013 2012 (1,463) 4/3/2013 1995 (1,090) 2/8/2012 2006 (1,144) 6/27/2012 2007 (671) 2/7/2014 2010 (1,246) 6/27/2012 2006 (867) 2/7/2014 2009 (688) 12/29/2011 2001 (974) 6/27/2012 2007 (909) 2/7/2014 2008 (472) 2/7/2014 2001 (712) 11/9/2012 2002 (823) 10/2/2012 2003 (893) 2/7/2014 2008 (915) 2/7/2014 2009 Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Walgreens Bridgeport WV — 1,315 Wal-Mart Pueblo CO 8,249 2,586 12,512 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 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 Waste Connections WaWa WaWa Weatherford Gap Portsmouth SC TN TX PA VA Weir Oil and Gas Williston ND Wells Fargo Bristol Wells Fargo Lebanon Welspun Global Trade Houston Wendy's Anniston Wendy's Auburn Wendy's Birmingham Wendy's Homewood Wendy's Phenix City Wendy's Batesville Wendy's Benton PA PA TX AL AL AL AL AL AR AR — — — 1,215 1,819 1,184 491 2,320 730 975 2,651 1,198 2,184 721 — 1,039 2,164 593 — — — — — — — — — 3,559 3,909 2,314 10,991 17,038 2,714 1,803 102 561 1,241 1,573 — — — 273 114 80 3,726 1,965 3,789 3,311 3,047 4,344 3,653 5,315 4,009 3,176 17,588 9,447 5,549 — — 11,677 8,580 5,054 — 6,232 81 435 19,524 2,356 36,347 — — — — — — — 454 718 562 995 529 155 478 591 1,333 990 — 1,178 878 1,018 F-194 3,386 (2,911) — — — — — — — — — — — — — — — — — — — — — — 89 18 — — — — — — — 4,910 2,456 6,109 4,041 4,022 5,542 4,374 6,354 4,602 4,491 (793) 2/7/2014 2009 (495) 5/19/2014 1993 (938) 2/7/2014 2008 (820) 11/5/2013 1998 (666) 2/7/2014 2008 (955) 2/7/2014 2008 (808) 2/7/2014 2008 (1,155) 2/7/2014 2008 (867) 2/7/2014 2010 (732) 2/18/2014 2011 15,098 (2,775) 2/7/2014 1998 21,147 (3,623) 2/7/2014 1999 13,356 (2,007) 2/7/2014 1998 7,863 (1,162) 2/7/2014 2005 10,991 17,038 — — 2/7/2014 2008 2/7/2014 2001 14,391 (2,481) 2/7/2014 1999 10,383 (1,778) 2/7/2014 1999 577 5,615 1,573 6,505 195 604 (104) 6/12/2014 2011 (1,044) 2/7/2014 2004 — 2/7/2014 2008 (968) 6/25/2014 2012 (24) 1/8/2014 1818 (100) 1/8/2014 1995 38,721 (7,309) 11/5/2013 2009 1,045 2,051 1,552 995 1,707 1,033 1,496 (149) 6/27/2013 1976 (314) 7/31/2013 2000 (249) 6/27/2013 2005 — 6/27/2013 1995 (297) 6/27/2013 1999 (206) 7/31/2013 1995 (256) 6/27/2013 1993 Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Wendy's Bentonville 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 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 AR AZ CA CT CT CT FL FL FL FL Wendy's Merritt Island FL — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 648 529 524 478 482 408 463 195 63 278 990 605 501 773 532 221 579 356 323 410 67 197 679 320 1,099 703 1,343 592 975 446 550 720 708 575 707 594 833 830 463 1,186 1,016 878 623 463 500 773 650 1,022 912 638 896 821 1,038 748 829 2,253 900 937 1,641 614 1,462 852 680 589 F-195 — — — — — — — (11) — — — — — — — — — — — — — — (769) — — — — — — — — — 1,356 1,104 1,231 1,072 1,315 1,238 926 1,370 1,079 1,156 1,613 1,068 1,001 1,546 1,182 1,243 1,491 994 1,219 1,231 1,105 945 739 2,573 1,999 1,640 2,984 1,206 2,437 1,298 1,230 1,309 (178) 6/27/2013 1993 (145) 6/27/2013 1995 (178) 6/27/2013 1991 (150) 6/27/2013 1985 (210) 6/27/2013 1994 (209) 6/27/2013 1994 (109) 7/31/2013 1989 (299) 6/27/2013 1995 (256) 6/27/2013 1995 (221) 6/27/2013 1976 (386) 6/27/2013 1982 (117) 6/27/2013 1987 (118) 7/31/2013 1983 (182) 7/31/2013 1994 (153) 7/31/2013 1978 (257) 6/27/2013 1989 (230) 6/27/2013 1995 (160) 6/27/2013 1985 (225) 6/27/2013 1994 (207) 6/27/2013 1995 (261) 6/27/2013 2001 (188) 6/27/2013 1994 (5) 7/31/2013 1986 (557) 6/27/2013 1995 (212) 7/31/2013 1978 (236) 6/27/2013 1980 (386) 7/31/2013 1995 (155) 6/27/2013 1985 (344) 7/31/2013 1999 (214) 6/27/2013 1995 (171) 6/27/2013 1993 (139) 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 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 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 Wendy's Mokena GA GA GA GA IL IL IL IL Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 476 626 503 461 445 695 531 952 855 415 414 414 383 383 306 701 743 478 223 605 258 1,076 240 668 755 720 649 480 346 642 250 665 394 561 503 529 837 569 432 514 505 761 770 1,656 748 506 435 1,787 1,184 2,209 1,380 776 473 1,316 1,359 774 922 720 1,299 558 1,039 963 1,419 997 F-196 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 870 1,187 1,006 990 1,282 1,264 963 1,466 1,360 1,176 1,184 2,070 1,131 889 741 2,488 1,927 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 1,662 (99) 6/27/2013 1982 (141) 6/27/2013 1994 (118) 7/31/2013 1984 (133) 6/27/2013 1984 (211) 6/27/2013 1987 (134) 7/31/2013 1996 (109) 6/27/2013 1980 (129) 6/27/2013 1986 (127) 6/27/2013 1986 (192) 6/27/2013 1984 (181) 7/31/2013 1996 (389) 7/31/2013 1995 (157) 3/26/2014 1999 (127) 6/27/2013 1994 (110) 6/27/2013 1985 (450) 6/27/2013 1999 (298) 6/27/2013 1988 (556) 6/27/2013 2003 (290) 3/26/2014 1982 (195) 6/27/2013 1993 (119) 6/27/2013 1996 (309) 7/31/2013 2002 (320) 7/31/2013 1985 (195) 6/27/2013 1988 (217) 7/31/2013 1990 (169) 7/31/2013 2001 (327) 6/27/2013 2002 (141) 6/27/2013 1987 (244) 7/31/2013 1993 (227) 7/31/2013 1977 (334) 7/31/2013 2005 (235) 7/31/2013 1992 Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State 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 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 Wendy's Baltimore District Heights Wendy's Landover Wendy's Pasadena LA MA MD MD MD MD MD — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 443 872 859 505 584 538 638 736 915 324 855 761 429 751 1,265 590 448 735 661 252 834 532 857 242 316 182 370 760 904 332 340 991 736 707 757 713 407 330 211 178 1,298 147 229 214 212 108 42 894 1,716 992 926 1,379 1,221 1,420 779 782 936 1,288 802 1,035 275 267 1,049 1,902 F-197 — — — — — — — — — — — — — — — — — — — — — — — — (522) — — — — — — — 1,434 1,608 1,566 1,262 1,297 945 968 947 1,093 1,622 1,002 990 643 963 1,373 632 1,342 2,451 1,653 1,178 2,213 1,753 2,277 1,021 576 1,118 1,658 1,562 1,939 607 607 (208) 3/26/2014 1985 (185) 6/27/2013 1978 (178) 6/27/2013 1978 (178) 7/31/2013 1995 (168) 7/31/2013 1976 (127) 2/7/2014 1990 (139) 2/7/2014 1999 (72) 2/7/2014 1980 (89) 2/7/2014 2001 (305) 7/31/2013 1989 (75) 2/7/2014 1999 (94) 2/7/2014 2012 (74) 2/7/2014 1980 (90) 2/7/2014 1993 (67) 2/7/2014 1979 (19) 2/7/2014 1988 (225) 6/27/2013 2005 (404) 7/31/2013 1989 (233) 7/31/2013 1989 (194) 3/26/2014 2001 (347) 6/27/2013 2001 (307) 6/27/2013 1998 (358) 6/27/2013 2000 (164) 3/26/2014 1986 — 6/27/2013 1998 (236) 6/27/2013 2001 (318) 6/27/2013 1995 (202) 6/27/2013 1995 (261) 6/27/2013 2002 (69) 6/27/2013 1979 (67) 6/27/2013 1978 2,951 (479) 6/27/2013 1997 Property City Wendy's Wendy's Salisbury 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 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, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 370 198 437 491 338 373 933 882 785 398 919 789 725 915 633 465 293 191 635 313 392 72 530 190 101 488 297 502 448 864 615 1,299 — 725 (477) 1,032 1,159 484 1,169 842 457 507 589 562 583 458 724 392 1,085 879 1,717 952 1,253 1,181 1,369 864 645 1,915 878 1,194 — — — — — — — — — — — — — — — — — — — — — — — — — 932 (926) — — — 1,072 877 1,434 F-198 1,669 446 1,469 1,650 822 1,542 1,775 1,339 1,292 987 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 1,491 508 1,520 1,741 2,049 (321) 6/27/2013 1995 (16) 6/27/2013 1998 (217) 3/26/2014 1983 (236) 5/1/2014 2004 (122) 6/27/2013 1981 (294) 6/27/2013 1994 (212) 2/7/2014 1997 (114) 2/7/2014 1999 (138) 2/7/2014 2000 (129) 2/7/2014 1976 (147) 2/7/2014 1976 (130) 2/7/2014 1984 (118) 2/7/2014 1986 (177) 2/7/2014 1991 (90) 2/7/2014 1994 (255) 7/31/2013 1977 (207) 7/31/2013 1978 (404) 7/31/2013 1996 (224) 7/31/2013 1984 (295) 7/31/2013 1987 (248) 3/26/2014 1980 (322) 7/31/2013 1982 (82) 3/26/2014 1980 (135) 3/26/2014 1986 (450) 7/31/2013 1989 (83) 3/26/2014 1995 (251) 3/26/2014 2000 (38) 7/31/2013 1994 (225) 3/26/2014 1984 (221) 6/27/2013 2000 (337) 7/31/2013 1997 Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (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 1,408 828 970 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 1,449 F-199 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 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 1,764 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 2,070 (331) 7/31/2013 1980 (316) 7/31/2013 1977 (265) 3/26/2014 1974 (171) 3/26/2014 1985 (178) 3/26/2014 1973 (224) 3/26/2014 2004 (183) 3/26/2014 1977 (176) 3/26/2014 1985 (103) 3/26/2014 1993 (194) 3/26/2014 1976 (345) 7/31/2013 1999 (331) 7/31/2013 1992 (174) 3/26/2014 1975 (228) 7/31/2013 1981 (465) 6/27/2013 2001 (305) 7/31/2013 1974 (320) 7/31/2013 2002 (354) 6/27/2013 1985 (241) 7/31/2013 1984 (255) 7/31/2013 1995 (266) 7/31/2013 1995 (216) 7/31/2013 1995 (348) 7/31/2013 1977 (237) 7/31/2013 1985 (314) 7/31/2013 1982 (305) 6/27/2013 1995 (197) 6/27/2013 1995 (203) 7/31/2013 1979 (182) 7/31/2013 1982 (217) 7/31/2013 2005 (217) 6/27/2013 1983 (341) 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, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (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 1,198 1,889 1,724 630 451 603 1,388 546 45 45 1,024 109 F-200 — — — — — — — — — — — — — — — — — — — — — — (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 1,844 2,519 1,084 898 861 1,310 2,021 1,553 748 833 1,738 902 (146) 3/27/2014 1979 (210) 7/31/2013 2003 (231) 7/31/2013 1979 (262) 7/31/2013 1994 (346) 7/31/2013 1995 — 6/27/2013 1995 (148) 7/31/2013 1975 (202) 7/31/2013 1983 (135) 7/31/2013 1977 (319) 7/31/2013 1982 (179) 7/31/2013 1978 (287) 6/27/2013 1995 (280) 6/27/2013 1995 (327) 7/31/2013 1984 (339) 7/31/2013 2010 (299) 6/27/2013 1995 (256) 7/31/2013 1983 (259) 7/31/2013 1983 (309) 7/31/2013 1983 (389) 6/27/2013 1994 (282) 7/31/2013 1987 (444) 7/31/2013 1996 (76) 7/31/2013 2001 (158) 6/27/2013 1985 (114) 6/27/2013 1987 (126) 2/7/2014 1990 (268) 2/7/2014 1992 (118) 2/7/2014 1995 (19) 2/7/2014 2000 (19) 2/7/2014 2003 (208) 2/7/2014 2002 (27) 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 North Tazewell VA Wendy's Pounding Mill VA Wendy's Woodbridge Wendy's Woodbridge Wendy's Wytheville Wendy's Bellingham Wendy's Bothell Wendy's Burlington 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 Wendy's Milwaukee Wendy's New Berlin WI WI WI WI WI WI WI WI WI Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 841 450 416 384 631 304 324 431 521 124 296 1,193 521 598 502 687 425 422 969 808 1,138 662 419 487 647 322 965 454 810 338 436 903 117 1,927 624 1,401 1,424 859 973 1,006 704 560 1,404 1,598 615 897 477 292 806 502 123 201 931 1,230 1,257 1,137 971 1,290 1,447 1,362 810 1,351 1,015 739 F-201 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 958 2,377 1,040 1,785 2,055 1,163 1,297 1,437 1,225 684 1,700 2,791 1,136 1,495 979 979 1,231 924 1,092 1,009 2,069 1,892 1,676 1,624 1,618 1,612 2,412 1,816 1,620 1,689 1,451 1,642 (25) 2/7/2014 2003 (476) 6/27/2013 1995 (147) 7/31/2013 1980 (353) 6/27/2013 1993 (359) 6/27/2013 1994 (216) 6/27/2013 1992 (229) 7/31/2013 2001 (237) 7/31/2013 1983 (177) 6/27/2013 1989 (141) 6/27/2013 1980 (353) 6/27/2013 2004 (402) 6/27/2013 1996 (155) 6/27/2013 1978 (211) 7/31/2013 2003 (105) 2/7/2014 1994 (50) 2/7/2014 2004 (203) 6/27/2013 1994 (187) 2/7/2014 1980 (17) 2/7/2014 1977 (122) 2/7/2014 1995 (219) 7/31/2013 2002 (289) 7/31/2013 2003 (296) 7/31/2013 1989 (267) 7/31/2013 2001 (228) 7/31/2013 1991 (303) 7/31/2013 1984 (340) 7/31/2013 1986 (320) 7/31/2013 1998 (190) 7/31/2013 1979 (318) 7/31/2013 1985 (239) 7/31/2013 1983 (175) 7/31/2013 1983 Property City State Wendy's Oak Creek Wendy's Sheboygan Wendy's West Allis Wendy's Beaver Wendy's Bridgeport 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 Western Refining Western Refining Western Refining Western Refining Western Refining Western Refining Western Refining Western Refining Western Refining Western Refining Western Refining Western Refining FL MI VA MN MN MN MN MN MN MN MN TX TX Foley Pequot Lakes MN Pierz Sartell MN MN Sauk Rapids MN St. Cloud St. Cloud St. Cloud St. Cloud St. Cloud Waite Park Waite Park Whataburger Edna Whataburger El Campo Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 577 676 583 290 273 157 277 224 295 311 241 273 70 301 1,220 4,337 452 425 72 158 67 718 419 582 104 126 330 361 316 770 290 693 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 2,409 276 1,489 411 486 753 657 136 151 365 433 333 503 869 1,013 F-202 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 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 (317) 7/31/2013 1999 (238) 7/31/2013 1995 (255) 7/31/2013 1984 (286) 6/27/2013 1995 (192) 7/31/2013 1984 (209) 7/31/2013 1987 (248) 3/26/2014 1980 (282) 6/27/2013 1983 (208) 7/31/2013 1979 (292) 7/31/2013 1977 (227) 7/31/2013 1996 (219) 6/27/2013 1984 (311) 7/31/2013 2001 (165) 7/31/2013 1976 (510) 3/31/2014 1995 13,389 (1,669) 2/7/2014 2011 2,544 2,834 348 1,647 478 1,204 1,172 1,239 240 277 695 794 649 1,273 1,159 1,706 (538) 2/7/2014 2009 (708) 7/31/2012 2012 (5) 3/27/2017 1984 (29) 3/27/2017 1983 (8) 3/27/2017 1996 (10) 3/27/2017 2000 (15) 3/27/2017 1997 (13) 3/27/2017 1987 (3) 3/27/2017 1922 (3) 3/27/2017 1968 (7) 3/27/2017 1984 (9) 3/27/2017 1987 (7) 3/27/2017 1999 (10) 3/27/2017 1999 (204) 7/31/2013 1986 (255) 6/27/2013 1986 Initial Costs (1) Encumbrances at December 31, 2017 Buildings, Fixtures and Improvements Land Costs Capitalized Subsequent to Acquisition (2) Gross Amount Carried at December 31, 2017 (3) (4) Accumulated Depreciation (3) (5) Date Acquired Date of Construction Property City State Whataburger Ingleside Whataburger Lubbock Whole Foods Hinsdale Wild Bill's Sports Salon Rochester Willbros Group, Inc. Tulsa TX TX IL MN OK Williams Sonoma Olive Branch MS — — 1,106 432 5,709 5,499 — — — 1,347 2,239 2,330 474 647 7,388 1,102 6,375 44,266 Winn-Dixie Jacksonville FL 63,240 4,360 82,834 Worrior Energy Services Midland Other N/A TX N/A — — 508 — 815 13,345 — — — — — — — — — 1,580 1,079 (111) 7/31/2013 1986 (152) 7/31/2013 1992 12,887 (1,658) 2/7/2014 1999 2,449 8,614 (292) 7/31/2013 1993 (935) 6/25/2014 1982 46,596 (14,115) 8/10/2012 2001 87,194 (19,318) 4/24/2013 2000 1,323 (146) 6/25/2014 2012 13,345 (2,975) N/A N/A $ 2,071,038 $ 2,907,509 $ 10,769,845 $ (99,654) $ 13,577,700 $ (2,217,108) _______________________________________________ (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 $690.9 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, 2017 was $15.6 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, 2017, 2016 and 2015 (amounts in thousands): Years Ended December 31, 2017 2016 2015 $ 13,539,921 $ 14,566,343 $ 15,857,507 634,080 28,503 (505,403) (82,292) (52,376) 15,267 13,577,700 $ 91,052 25,781 (878,552) (228,750) (36,722) 769 13,539,921 $ 33,695 60,321 (1,261,724) (106,064) (16,761) (631) 14,566,343 Balance, beginning of year Additions: Acquisitions Improvements Deductions/Other: Dispositions Impairments Reclassified to assets held for sale Other Balance, end of year $ F-203 The following is a reconciliation of the accumulated depreciation for the years ended December 31, 2017, 2016 and 2015 (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, 2017 2016 2015 $ $ 1,766,006 $ 1,331,751 $ 548,901 586,321 (34,086) (50,828) (12,885) 2,217,108 $ (77,987) (69,040) (5,039) 1,766,006 $ 775,050 630,347 (49,907) (23,196) (543) 1,331,751 F-204 VEREIT, INC. AND VEREIT OPERATING PARTNERSHIP, L.P. SCHEDULE IV – MORTGAGE LOANS HELD FOR INVESTMENT December 31, 2017 (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 Lowes Companies, Inc. Walgreen Co. Walgreen Co. Walgreen Co. Total Mt. Airy, MD 6.42% 12/15/2026 P&I N/A $ 2,418 $ 2,618 $ 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 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 2,571 2,812 952 1,053 1,928 2,067 5,953 2,390 2,633 3,651 2,169 2,636 2,953 3,986 $ 22,496 $ 20,294 $ _______________________________________________ (1) Zero coupon rate with balloon payment due at maturity. — — — — — — — — — Beginning Balance Deductions during the year: Early payoff of loan investment Principal payments received on loan investments Amortization of unearned discounts and premiums Ending Balance Years Ended December 31, 2017 2016 2015 $ 22,764 $ 24,238 $ 26,806 (1,502) (904) (64) — (1,339) (135) — (2,417) (151) $ 20,294 $ 22,764 $ 24,238 F-205 [THIS PAGE INTENTIONALLY LEFT BLANK] EXECUTIVE TEAM Glenn J. Rufrano Chief Executive Oﬃcer The following tables show reconciliations to amounts presented in accordance with GAAP on the balance sheet and income statement for the periods presented (dollar amounts in thousands): Michael J. Bartolotta Executive Vice President & Chief Financial Oﬃcer Lauren Goldberg Executive Vice President, General Counsel & Secretary Paul H. McDowell Executive Vice President & Chief Operating Oﬃcer Thomas W. Roberts Executive Vice President & Chief Investment Oﬃcer BOARD OF DIRECTORS Hugh R. Frater Non-Executive Chairman of VEREIT, Inc., Former Chairman and CEO of Berkadia David B. Henry Former Vice Chairman and CEO, Kimco Realty Corporation Mary Hogan Preusse Former Managing Director and Co-Head of Americas Real Estate for APG Asset Management US Richard J. Lieb Managing Director and Chairman of Real Estate at Greenhill & Co., LLC 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 Partner and Managing Director at Providence Equity Partners Glenn J. Rufrano Chief Executive Oﬃcer of VEREIT, Inc. INVESTOR RELATIONS InvestorRelations@VEREIT.com 877.405.2653 HEADQUARTERS 2325 East Camelback Road Suite 1100, Phoenix, Arizona 85016 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. Net Loss Adjustments: Interest expense Depreciation and amortization Provision for (beneﬁt from) income taxes Proportionate share of adjustments for unconsolidated entities EBITDA (Gain) loss on disposition of real estate assets, net Impairments Held for sale loss on discontinued operations Acquisition-related expenses Litigation, merger and other non-routine costs, net of insurance recoveries 14,969 (Gain) loss on derivative instruments, net Amortization of above-market lease assets and deferred lease incentives, net of amortization of below-market lease liabilities Loss on extinguishment and forgiveness of debt, net Net direct ﬁnancing lease adjustments (266) 1,148 318 517 Straight-line rent, net of bad debt expense related to straight-line rent (11,281) Legal settlements Program development costs write-oﬀ Other amortization and non-cash charges Proportionate share of adjustments for unconsolidated entities Adjustment for Excluded Properties NORMALIZED EBITDA 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 Debt Outstanding Debt Outstanding - Excluded Properties Adjusted Debt Outstanding Less: cash and cash equivalents Net Debt Normalized EBITDA annualized NET DEBT TO NORMALIZED EBITDA annualized ratio Three Months Ended Dec 31, 2017 Dec 31, 2014 $(33,092) $(360,427) 70,694 177,329 11,843 756 227,530 (7,104) 19,691 20,027 1,120 – 1,343 1,247 (1,721) 172 126,157 226,272 (26,571) 3,402 (31,167) 1,263 406,136 – 4,324 24,333 172 1,475 605 448 (25,367) (60,000) 13,109 335 1,086 – $267,710 $336,752 Dec 31, 2017 Dec 31, 2014 $2,082,692 $3,773,922 2,821,494 2,531,081 984,258 185,000 952,856 3,167,919 6,073,444 10,425,778 48,232 (15,638) 88,003 (44,660) 6,106,038 10,469,121 (16,200) – 6,089,838 10,469,121 36,374 416,711 6,053,464 10,052,410 1,070,840 1,347,008 5.65x 7.46x

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