FedEx Property

The REIT acquired a FedEx Cross-Dock facility in Snowshoe, Pennsylvania (the “FedEx Property”) as its initial investment on March 5, 2008. On February 25, 2008, the REIT’s entire Board of Directors (with the two inside directors abstaining because the acquisition of the FedEx Property is an affiliated transaction) approved the acquisition of the FedEx Property, which acquisition closed on March 5, 2008.

The REIT acquired the FedEx Property at sellers’ cost, which does not exceed the fair market value of the FedEx Property as determined by an appraisal of a qualified independent appraiser. The purchase price for the FedEx Property is approximately $10 million. The FedEx Property is subject to approximately $7 million of existing debt. The REIT financed the balance of the purchase price by issuing 342,502.22 of shares of common stock to the sellers. Closing costs and fees aggregated at approximately $230,000.

Our operating partnership, American Realty Capital Operating Partnership, L.P., entered into a purchase agreement to purchase the FedEx Property subject to customary due diligence and other conditions, as described above. The sellers of the FedEx Property are several unaffiliated parties, who own approximately 70% of indirect interest in the FedEx Property, and our sponsors, Nicholas S. Schorsch and William M. Kahane, who own approximately 30% of indirect interest in the FedEx Property. The FedEx Property is a shipping and distribution facility located at 401 E. Sycamore, Snowshoe, PA. Built in 2004, the FedEx Property currently has 55,000 square feet of warehouse space. The current sole tenant is FedEx and will remain the sole tenant on a double-net lease basis.

FedEx Property Location		Acquisition Date		Approximate Purchase Price⁽¹⁾⁽²⁾		Approximate Compensation to Advisor and Affiliates⁽³⁾
401 E. Sycamore		3/5/2008		$10,047,520		$170,125

(1)

Sellers are our sponsors, Nicholas S. Schorsch and William M. Kahane, and two unaffiliated parties.

(2)

Approximate purchase price does not include the acquisition fee, which is 1.0% of the contract purchase price, or finance coordination fee.

(3)

Amounts include acquisition fees payable to an affiliate of our advisor for acquisition fees in connection with the property acquisition and payments to our advisor for finance coordination fees for services in connection with the origination or assumption of debt financing to acquire the respective property.

-2-

The property acquisition is subject to a double-net lease, pursuant to which the landlord is responsible for maintaining the property’s roof and structure, and the tenant is required to pay all other expenses associated with the property in addition to base rent.

The table below provides leasing information for the tenant at the property:

FedEx Property

Location

Number of

Tenants

Major

Tenant

Renewal Options

Current Annual Base Rent

Base Rent per Square Foot

Total Square Feet Leased

Remaining Lease Term

401 E. Sycamore

FedEx

Freight

East Inc.

13 year lease

2 five year

extension periods

$702,828

$12.78

55,000

10.77

The following table outlines the loan terms on the existing debt financing assumed in connection with acquisition of the FedEx Property.


FedEx Property Location	1st Mortgage Debt	Type	Rate	Maturity Date
401 E. Sycamore	$6,965,000	Interest only	5.62%	9/1/2017

FedEx Corporation, together with its subsidiaries, provides transportation, e-commerce, and business services. It operates in four segments: FedEx Express, FedEx Ground, FedEx Freight, and FedEx Kinko's. The FedEx Express segment offers various shipping services for the delivery of packages and freight. This segment also provides international trade services specializing in customs brokerage and global cargo distribution; international trade advisory services; and publishes customs duty and tax information, as well as provides Global Trade Data, an information tool that allows customers to track and manage imports. The FedEx Ground segment provides business and residential money-back-guaranteed ground package delivery services. The FedEx Freight segment offers regional next-day and second-day, and interregional less-than-truckload (LTL) freight services, as well as long-haul LTL freight services. The FedEx Kinko's segment provides document services, such as printing, copying, and binding services; and business services, such as high-speed Internet access and computer rental, videoconferencing, signs and graphics production, and direct mail services. This segment also offers retail products, such as specialty papers, greeting cards, printer cartridges, stationery, and office supplies, as well as provides Web-based services. The company also offers supply chain solutions, including critical inventory logistics, transportation management, fulfillment, and fleet services. FedEx Corporation, formerly known as FDX Corporation, was founded in 1971 and is headquartered in Memphis, Tennessee. FedEx Corporation stock is listed on the New York Stock Exchange, and FedEx has a credit rating of BBB.

Because the FedEx Property is 100% leased to a single tenant on a long-term basis under a net lease, which transfers substantially all of the operating costs to the tenant, we believe that the financial condition and results of operations of the tenant’s guarantor and affiliate, FedEx Corporation, are more relevant to investors than the financial statements of the individual property acquired in order to enable investors to evaluate the lessee’s credit-worthiness. Additionally, because the properties are subject to a net lease, historical property financial statements provide limited information other than rental income, which is disclosed above. Therefore, we have not provided audited financial statements of the properties acquired.

FedEx Corporation currently files its financial statements in reports filed with the Securities and Exchange Commission, and the following summary financial data regarding FedEx Corporation are taken from the 2006 and 2007 annual reports.


	Past Three Months Ended		For the Fiscal Year Ended
	11/30/2007		5/31/2007		5/31/2006		5/31/2005
Consolidated Statements of Operations (in thousands)
Revenues	$	9,451,000	$	35,214,000	$	32,294,000	$	29,363,000
Operating Income		783,000		3,276,000		3,014,000		2,471,000
Net Income		479,000		2,016,000		1,806,000		1,449,000

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	As of		As of the Fiscal Year Ended
	11/30/2007		5/31/2007		5/31/2006		5/31/2005
Consolidated Balance Sheets (in thousands)
Total Assets	$	24,347,000	$	24,000,000	$	22,690,000	$	20,404,000
Long-term Debt		2,007,000		2,007,000		1,592,000		2,427,000
Stockholders’ Equity		13,760,000		12,656,000		11,511,000		9,588,000

For more detailed financial information regarding FedEx Corporation, please refer to its financial statements, which are publicly available with the Securities and Exchange Commission at http://www.sec.gov.

Harleysville Properties

The REIT acquired 15 Harleysville National Bank and Trust Company (the “Harleysville National Bank”) branch properties in various Pennsylvania locations (the “Harleysville Properties”) on March 12, 2008. On February 25, 2008, the REIT’s entire Board of Directors (with the two inside directors abstaining because the contemplated acquisition is an affiliated transaction) approved the acquisition of the Harleysville Properties.

The REIT acquired the Harleysville Properties at seller’s cost, which does not exceed the fair market value of the Harleysville Properties as determined by an appraisal of a qualified independent appraiser. The purchase price for the Harleysville Properties is approximately $41 million, which is subject to approximately $31 million of existing debt and a preferred equity investment of approximately $4.0 million, including closing costs and fees. The REIT financed a portion with offering proceeds of $2.0 million. In addition, we borrowed approximately $4.0 million under the borrowing facility established between the Advisor and American Realty Capital Operating Partnership, LP. The rate on this short-term borrowing is 8.0% per annum, accrued monthly, with repayment of principal permitted without penalty. We expect to immediately pay down the borrowing as we raise funds. The seller of the Harleysville Properties is one of the REIT’s sponsors, Nicholas S. Schorsch. The Harleysville Properties are commercial bank branch locations throughout Pennsylvania with an aggregate of 178,000 square feet. The current sole tenant of the properties is Harleysville National Bank and will remain the sole tenant on a triple-net lease basis.


Harleysville Property Location	Acquisition Date		Approximate Purchase Price⁽¹⁾⁽²⁾		Approximate Compensation to Advisor and Affiliates⁽³⁾
Harleysville, PA		3/12/08	$	719,762		Total for all properties = $719,762 Acquisition + Finance Fees
Lansdale, PA		3/12/08	$	1,776,096
Lansdale, PA		3/12/08	$	1,560,427
Lansford, PA		3/12/08	$	1,987,536
Lehighton, PA		3/12/08	$	938,957
Limerick, PA		3/12/08	$	1,636,954
Palmerton, PA		3/12/08	$	3,286,118
Sellersville, PA		3/12/08	$	1,101,602
Skippack, PA		3/12/08	$	1,473,259
Slatington, PA		3/12/08	$	1,139,594
Slatington, PA		3/12/08	$	3,568,097
Spring House, PA		3/12/08

Maryland		333-145949		71-1036989
(State or other jurisdiction of incorporation or organization)		(Commission File Number)		(I.R.S. Employer Identification No.)