American Realty Capital Properties Offers to Purchase Cole Credit Property Trust III for $9 Billion, Creating the Largest,

  American Realty Capital Properties Offers to Purchase Cole Credit Property
   Trust III for $9 Billion, Creating the Largest, Highest Quality Publicly
                            Traded Net Lease REIT

Offer Values CCPT III at a 20% Premium, Includes a 15% Dividend Increase and
Provides CCPT III Stockholders with Immediate Liquidity, Certainty of
Execution and Stronger Growth Potential and a Minimum of $12 per Share.

PR Newswire

NEW YORK, March 20, 2013

NEW YORK, March 20, 2013 /PRNewswire/ --American Realty Capital Properties,
Inc. ("ARCP") (NASDAQ: ARCP) announced today that on March 19, 2013, it sent
to the Board of Directors of Cole Credit Property Trust III, Inc. ("CCPT III")
an offer to acquire 100% of the outstanding common stock of CCPT III for at
least $12 per share, or $5.7 billion, in cash and stock. The transaction,
valued at more than $9billion including assumption of debt, would create the
largest and highest quality publicly traded REIT in the net lease sector.

(Logo: http://photos.prnewswire.com/prnh/20120529/NY15147LOGO )

The fully financed proposal offers CCPT III stockholders:

  oConsideration: (i) $12.00 per share in cash or (ii) 0.80 shares of ARCP
    common stock for each share of CCPT III common stock, with a guarantee
    that the value of the stock consideration will not be less than $12.00 per
    share. This offer represents at least a 20% premium to the original CCPT
    III offer price of $10.00 per share.
  oDividend Increase: An increase of ARCP's dividend to 93 cents per share
    upon closing, meaning all CCPT III stockholders who elect stock
    consideration will receive an equivalent dividend of 74.4 cents per share
    (93 cents x 0.80), a 15% increase (9.4 cents per share) over CCPT III's
    current 65 cents per share dividend.
  oIntegration and Operating Synergies: ARCP currently estimates that
    general and administrative (G&A) savings will be not less than $30 million
    annually. The majority of CCPT III's real estate assets are net lease
    properties similar to ARCP's existing portfolio, resulting in seamless
    integration and minimal additional resources or ongoing expense
    requirements.

ARCP's offer is designed to provide CCPT III's stockholders with a tax-free
exchange and instant liquidity, as there will be no lockup and all ARCP shares
will be immediately tradable on NASDAQ with significant market support and
numerous index inclusions at or subsequent to closing. The offer also provides
CCPT III shareholders certainty of execution, timing and value. The cash
component of ARCP's proposal is fully funded by cash on hand and borrowing
capacity under ARCP's existing line of credit.

The full text of the proposal letter to CCPT III's Board of Directors is
included below:

March 19, 2013

BY EMAIL AND FEDEX

Board of Directors
Cole Credit Property Trust III, Inc.
2325 East Camelback Road, Suite 1100
Phoenix, AZ 85016

To the Board of Directors of Cole Credit Property Trust III, Inc. ("CCPT
III"):

I am writing on behalf of the Board of Directors of American Realty Capital
Properties, Inc. (NASDAQ: ARCP) ("ARCP") to make a proposal to acquire all of
the outstanding shares of CCPT III common stock.

As you are aware, prior to the announcement of CCPT III's proposed acquisition
of Cole Holdings Corporation ("Cole Holdings"), we communicated to your
financial advisor our interest in a potential acquisition of CCPT III. We
were surprised to not have received any response.

We believe our offer for CCPT III, outlined below (the "Proposal"), represents
a strength-for-strength merger of complimentary portfolios that would provide
CCPT III stockholders with certainty of value while benefiting both CCPT III
and ARCP stockholders through the creation of the largest, highest quality
publicly traded REIT in the net lease sector.

ARCP offers to purchase CCPT III at a price of not less than $5.7 billion of
equity value or $12.00 per share, representing a minimum 20% premium above the
original offering price.

We believe our Proposal (outlined below) will provide a higher level of
consideration delivered sooner and with greater certainty to CCPT III
stockholders as compared to the internalization transaction currently
contemplated. We believe our Proposal is in the best interests of CCPT III
stockholders and is superior to that internalization transaction. The
internalization transaction would internalize CCPT III's external advisor and
affiliated broker-dealer, Cole Holdings, at an estimated cost to CCPT III's
stockholders in excess of $120 million in a combination of cash and stock (the
"Internalization Transaction"). In the event the Internalization Transaction
is consummated, ARCP would need to reconsider its Proposal, and potentially
reduce its proposed valuation.

Our Proposal, calling for not less than $12.00 per share, implies a minimum
equity value for CCPT III of approximately $5.7billion (assuming 478.0
million shares of CCPT III common stock outstanding acquired at $12.00 per
share). The cash component of our Proposal is fully funded by cash on hand
and borrowing capacity under ARCP's existing line of credit.

Our Proposal represents at least a 20% premium to the original CCPT III
offering price of $10.00 per share and provides CCPT III stockholders an
option to elect cash or publicly traded ARCP common stock in a tax-free stock
for stock exchange (subject to proration). Exhibit A to this letter describes
the combined company and the significant opportunity for CCPT III stockholders
to become stockholders of the combined company, which would become the largest
publicly traded REIT in the net lease sector.

The terms of ARCP's Proposal are outlined immediately below.

  oCCPT III stockholders receive at least $12.00 per share of value: ARCP is
    prepared to acquire 100% of the outstanding common stock of CCPT III for
    either: (i) $12.00 per share in cash or (ii) 0.80 of a share of ARCP
    common stock for each share of CCPT III common stock, with a guarantee
    that the value of the share consideration will not be less than $12.00 per
    share. We are proposing that $1.15 billion (or approximately 20% of the
    outstanding shares of CCPT III common stock) will be paid in cash and the
    balance will be paid in ARCP shares. ARCP would be willing to consider
    increasing the maximum consideration to be paid in cash to 40% of the
    outstanding shares of CCPT III common stock, so long as CCPT III
    stockholders preserve the tax-free exchange safe harbor discussed below.
  oARCP's annual dividend to increase to 93 cents per share: ARCP is
    announcing its 7^th consecutive quarterly dividend increase to take effect
    upon closing of the transaction to an annual dividend of 93 cents per
    share.
  oCCPT III stockholders who take ARCP stock will benefit from dividend
    increase: CCPT III stockholders who elect stock consideration will receive
    an equivalent dividend of 74.4 cents per share (93 cents x .80), a 15%
    increase (9.4 cents per share increase) over CCPT III's current 65cent
    per share dividend.
  oBecause our Proposal ultimately provides for a fixed exchange ratio, CCPT
    III stockholders receive potential appreciation in ARCP shares: Because
    our Proposal provides for a fixed exchange ratio (that is, 0.80 of a share
    of ARCP common stock), the value of the stock consideration received by
    CCPT III stockholders who elect to receive ARCP shares may increase with
    the value of the ARCP share price.
  oCCPT III stockholders are not "locked up": All CCPT III shares converted
    into ARCP shares will be immediately tradable on NASDAQ; stockholders will
    not be "locked up." Significant market support is anticipated from
    numerous index inclusions at and subsequent to closing.
  oCCPT III stockholders who take ARCP stock benefit from a tax-free exchange
    safe harbor: The stock-for-stock option is designed to provide CCPT III
    stockholders with a tax-free exchange for those who elect to receive stock
    consideration.
  oThere are operating synergies post merger, immediately benefiting all
    shareholders. ARCP estimates general and administrative expense (G&A)
    savings will exceed $30 million annually. The majority of the real estate
    assets owned by CCPT III are net leased properties similar to ARCP's
    existing property portfolio. This should result in a seamless integration
    requiring minimal additional resources or increased expenses.
  oCole Holdings receives $111 million for its incentive fee: Cole Holdings
    will receive its subordinated management incentive fee pursuant to the
    terms of CCPT III's existing advisory agreement of approximately $111
    million (based on $12.00 per share and a hurdle price of $10.45 per share,
    as disclosed in the Internalization Transaction), payable concurrently
    with the closing of the transaction in a combination of cash and ARCP
    common stock, in a manner to be determined by the Boards of Directors of
    ARCP and CCPT III.

We have expended considerable time and effort developing our Proposal, which
is based on CCPT III's most recent Form 10-Q and other publicly available SEC
filings, and we believe, based on the information we have reviewed, that the
price is full and fair.

Our Proposal has the unanimous support of the ARCP Board of Directors, and we
are prepared to devote all necessary resources to this transaction. Our
Proposal includes customary conditions, including: (1) completion of
confirmatory due diligence by ARCP on CCPT III; (2) execution of a definitive
merger agreement; and (3) receipt of stockholder approvals (for the issuance
of shares of ARCP common stock, as required by NASDAQ).

We have engaged Barclays Capital Inc. and RCS Capital, a division of Realty
Capital Securities, LLC, as our financial advisors and Proskauer Rose LLP and
Weil, Gotshal & Manges LLP as our legal advisors. Our team and advisors are
ready to meet with you immediately to discuss this Proposal.

We believe our Proposal is superior when compared to the Internalization
Transaction.

We believe our Proposal will result in significant benefits to CCPT III
stockholders when compared to the Internalization Transaction, including:

  oOur Proposal provides CCPT III stockholders immediate liquidity and
    greater certainty of value and successful execution. Our Proposal
    provides immediate liquidity, certainty of value and stronger long-term
    growth potential for CCPT III stockholders. Additionally, we believe no
    regulatory approval is required, unlike the FINRA approval required in the
    Internalization Transaction.
  oOur Proposal creates the largest, highest quality publicly traded REIT in
    the net lease sector.

       oLargest net lease REIT in sector by total capitalization and square
         footage;
       oDiversified asset base including 1,706 properties with over 400
         tenants;
       oDiversified income stream with less than 33% of annualized gross
         rents from the ten largest tenants;
       oSuperior portfolio with best in class investment grade tenancy: 60%
         overall investment grade tenancy and 74% of top ten tenants;
       oLongest weighted average lease duration in the net lease sector of
         12.4 years; and
       oHighly qualified management team with more than 51 years collective
         experience operating publicly traded REITs.

  oOur Proposal results in an increase to pro forma 2013 and 2014 AFFO. Our
    Proposal results in an increase to combined ARCP and CCPT III pro forma
    2013 and 2014 AFFO, resulting in part from a significant reduction in
    operating costs, namely elimination of CCPT III asset management fees and
    a pronounced reduction of G&A expenses.
  oOur Proposal results in an increase in dividends per share. CCPT III
    stockholders will enjoy an increase in the annualized CCPT III dividend
    per share of more than 9cents, or approximately 15%, from 65 to 74 cents
    per share.
  oOur Proposal is fully financed. Our Proposal is fully financed,
    eliminating execution risk and valuation ambiguity, while furnishing CCPT
    III stockholders immediate liquidity at closing. We have received
    commitments to upsize our existing credit facility by $1.65 billion, with
    an accordion feature to further increase the facility to an aggregate of
    $2.5 billion.
  oOur Proposal results in increased liquidity. Our Proposal results in
    increased liquidity from index inclusions, including MSCI (RMZ), Russell
    2000, S&P 400 and potentially S&P 500.
  oOur Proposal includes an experienced management team. Our Proposal
    includes an experienced management team that has been responsible for more
    than $9 billion of liquidity events in the past 15 months, and has
    experience in managing public companies with total enterprise value in
    excess of $20 billion.
  oOur Proposal affords immediate access to the public capital markets. ARCP
    benefits from a demonstrated access to the public capital markets,
    including ARCP's existing well-known seasoned issuer (WKSI) shelf
    registration.
  oOur Proposal enhances the attributes of the combined companies, adheres to
    industry "best practices," and avoids combining unrelated businesses that
    could detract from stockholder value. ARCP has a focused and proven
    business strategy that avoids the pitfalls in the Internalization
    Transaction, which includes the acquisition and operation of Cole
    Holding's non-real estate related business lines such as a broker-dealer.

We believe that these transaction benefits are very compelling for CCPT III
stockholders, as well as ARCP stockholders, and make our Proposal more
attractive than the proposed Internalization Transaction.

Internalization Transaction Fails to Maximize Stockholder Value

We believe that the Internalization Transaction raises significant conflict
issues – it only delivers certainty of value to Cole Holdings with no
guarantee that CCPT III stockholders will benefit in any way. This result is
in clear contrast to market norms, including recent high-performing and
market-supported comparables, such as the announced merger between Cole Credit
Property Trust II, Inc. ("CCPT II") and Spirit Realty Capital, Inc. (NYSE:
SRC), the successful merger of American Realty Capital Trust III, Inc. with
ARCP, and American Realty Capital Trust, Inc.'s merger with Realty Income
Corp. Why aren't CCPT III stockholders being afforded the same benefits as
the CCPT II stockholders?

Noted below are the significant shortcomings of the Internalization
Transaction presently proposed. These same disadvantages have already been
identified by CCPT III stockholders, independent broker dealers, due diligence
officers and industry commentators. The disadvantages include:

  oUnseasoned Management Team: The CCPT III and Cole Holdings senior
    management teams have either no or very limited prior experience running
    a publicly listed company.
  oNon-Qualifying REIT Income: Based on the significant consideration being
    paid to Cole Holdings as a result of the Internalization Transaction, one
    could assume CCPT III will be a REIT with material non-qualifying income
    for REIT qualification test purposes.
  oFINRA Approval Required: There is no certainty that FINRA will approve
    CCPT III's acquisition of Cole Holding's broker dealer unit without
    restrictions or conditions that could adversely impact the transaction.
  oUndue Complexity: Complexities arising from the operation of non-real
    estate related businesses, including a registered broker dealer, could
    detract from the combined company's business strategy and its potential
    valuation.
  oNo Stockholder Vote: There is no prior record of non-traded REITs merging
    with their affiliated advisors for a fee without a stockholder vote.
  oGreater Potential for Poor Stock Price Performance: There is a history of
    poor stock performance and below average total stockholder returns from
    non-listed REITs that have completed listings, resulting primarily from a
    lack of institutional sponsorship and buy-side support, imposed trading
    restrictions on common stock owned by legacy, non-traded stockholders and
    limited operating, portfolio and balance sheet transparency and sell-side
    research coverage.
  oMultiple Unaddressed Risks: CCPT III has failed adequately to address,
    explain and quantify the risks of achieving a listing, including:

       oMarket risk – the risk that changes in the macro-economic or global
         geo-political climate could result in market dislocations,
         potentially delaying (possibly indefinitely) the planned stock
         market listing of CCPT III or potentially reducing the listing price
         of shares of CCPT III common stock;
       oTrading / liquidity risk – CCPT III has failed to affirm that shares
         of CCPT III common stock will be listed and fully tradable without
         restriction at the time of listing; if CCPT III were to impose
         restrictions on trading, these restrictions would impair the
         liquidity for CCPT III stockholders; and
       oLack of market support – prior successful listing transactions have
         included a market support mechanism, typically in the form of an
         issuer self-tender offer, that provides trading liquidity and reduces
         trading volatility in the days following a listing. CCPT III has not
         provided CCPT III stockholders assurance that any such market support
         will be provided or, if market support is provided, at what price
         level such support might be offered, and whether the dollar value of
         such support will be sufficient given the size of CCPT III's equity
         capitalization.

In a period of increasing market volatility and market sensitivity to
macroeconomic global events, a merger with a successful public company
provides CCPT III stockholders with far greater price and timing certainty
than the Internalization Transaction. The Internalization Transaction
compensates Cole Holdings first while CCPT III stockholders wait to see if,
when and at what price their liquidity may arrive.

Internalization Transaction is contrary to industry norms.

As leaders in the direct investment non-traded REIT industry, the management
of ARCP strongly opposes the imposition of the internalization fees that are
the crux of the Internalization Transaction. Internalization fees serve to
misalign the interests of REIT stockholders and the owners of the advisor,
enrich the advisor at the expense of stockholders without regard to investment
performance, and are generally a "black eye" for the non-traded REIT industry.

In particular, the Internalization Transaction fails to protect the interests
of CCPT III stockholders in the following ways:

  oCole Holdings interests are not aligned with those of CCPT III
    shareholders. Cole Holdings is paid a very substantial sum, without
    regard to performance, before the CCPT III stockholders are paid. CCPT
    III stockholders are compensating Cole Holdings, prior to CCPT III
    stockholders receiving visibility on the value of their common stock or
    accompanying liquidity, and with no assurance of future liquidity or
    profitability.
  oLack of transparency makes financial fairness of transaction difficult to
    judge. The lack of transparency of the current assets, financial
    condition, business prospects, and relative operating cash flow
    contribution of Cole Holdings and CCPT III deprives CCPT III stockholders'
    of the ability to analyze the relative value of these firms and the
    consideration being paid to Cole Holdings.

Perhaps most unsettling, the independent directors of CCPT III may have denied
the CCPT III stockholders a voice in the Internalization Transaction, as well
as the opportunity to understand the merits and valuation of the
Internalization Transaction, by structuring the Internalization Transaction to
avoid the requirement of an affirmative vote by CCPT III stockholders.
Regardless of the legal requirement for such a vote, every preceding
internalization in the non-traded REIT industry in which an internalization
fee was paid provided stockholders with the right to consider and vote in
connection with such high cost, privately negotiated related party
transactions. For these reasons, all recently completed non-traded REIT
liquidity events, including those of American Realty Capital Trust, Inc.,
Healthcare Trust of America, Inc., CCPT II and American Realty Capital Trust
III, Inc., have excluded any internalization fees.

Conclusion

We believe CCPT III's failure to adhere to generally accepted industry best
practices that prohibit internalization fees is a serious threat to the
viability of Cole Holding's future operations, which, if the Internalization
Transaction is consummated, would be a core value driver of CCPT III. Cole
Holding's future income and long-term viability is dependent upon executing
selling agreements with independent broker dealers and the support of these
firms in the offering of securities sponsored by and distributed through Cole
Holdings affiliates. If independent broker dealers respond to the
Internalization Transaction by refusing to sell securities offered by Cole
Holdings, the income, profits and value of Cole Holdings, and the value of
CCPT III, would be significantly impaired by the consummation of the
Internalization Transaction.

We believe our Proposal is superior to the Internalization Transaction
currently proposed and in the best interests of CCPT III stockholders. As a
result, we would ask and expect the CCPT III board of directors to engage in a
full review of our Proposal. We hope that you will decide to enter into a
constructive dialogue with us in this regard. It remains our strong
preference to work together to reach a mutually agreeable transaction;
however, we are prepared to consider all alternatives to complete this
transaction should we fail to hear back from you promptly.

We are prepared to immediately meet and commence discussions with you and your
advisors to move forward with our Proposal. We are confident that, if we work
together, we can quickly consummate a transaction that is in the best
interests of the stockholders of both of our companies.

Sincerely,

/s/ Nicholas S. Schorsch
Nicholas S. Schorsch
Chairman and CEO
American Realty Capital Properties, Inc.

Transaction Advisors

Barclays Capital Inc. and RCS Capital, a division of Realty Capital
Securities, LLC, are acting as ARCP's financial advisors and Proskauer Rose
LLP and Weil, Gotshal & Manges LLP as its legal advisors.

About ARCP

ARCP is a publicly traded Maryland corporation listed on The NASDAQ Global
Select Market that qualified as a real estate investment trust for U.S.
federal income tax purposes for the taxable year ended December 31, 2011,
focused on acquiring and owning single tenant freestanding commercial
properties subject to net leases with high credit quality tenants. Additional
information about ARCP can be found on its website at www.arcpreit.com.

Additional Information about the Proposed Transaction and Where to Find It

This communication does not constitute an offer to sell or the solicitation of
an offer to buy any securities or a solicitation of any vote or approval.
This communication relates to a business combination transaction with CCPT III
proposed by ARCP, which may become the subject of a registration statement
filed with the Securities and Exchange Commission ("SEC"). This material is
not a substitute for the proxy statement/prospectus ARCP would file with the
SEC regarding the proposed transaction if such a negotiated transaction with
CCPT III is reached or for any other document which ARCP may file with the SEC
and send to ARCP's or CCPT III's stockholders in connection with the proposed
transaction. INVESTORS AND SECURITIY HOLDERS OF ARCP AND CCPT III ARE URGED TO
READ THE PROXY STATEMENT/PROSPECTUS (INCLUDING ALL AMENDMENTS AND SUPPLEMENTS
THERETO) AND OTHER RELEVANT DOCUMENTS FILED WITH THE SEC IN THEIR ENTIRETY IF
AND WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION
ABOUT THE PROPOSED TRANSACTION. Such documents would be available free of
charge through the website maintained by the SEC at www.sec.gov or by
directing a request to the ARCP Investor Relations Department, 405 Park
Avenue, New York, New York 10022. Copies of such documents filed by ARCP with
the SEC also will be available free of charge on ARCP's website at
www.arcpreit.com.

Participants in Solicitation

ARCP, AR Capital, LLC and their respective directors and executive officers
and other persons may be deemed to be participants in the solicitation of
proxies from ARCP's and CCPT III's stockholders in respect of the proposed
transaction. Information regarding ARCP's directors and executive officers can
be found in ARCP's definitive proxy statement filed with the SEC on May 4,
2012, as modified by ARCP's current reports on Form 8-K filed with the SEC on
October 17, 2012 and March 6, 2013. Additional information regarding the
interests of such potential participants will be included in any proxy
statement/prospectus and other relevant documents filed with the SEC in
connection with the proposed transaction if and when they become available.

All information in this communication concerning CCPT III, including its
business, operations and financial results was obtained from public sources.
While ARCP has no knowledge that any such information is inaccurate or
incomplete, ARCP has not had the opportunity to verify any of that
information.

Forward-Looking Statements

Information set forth in this communication (including information included or
incorporated by reference herein) contains "forward-looking statements" (as
defined in Section 21E of the Securities Exchange Act of 1934), which reflect
ARCP's expectations regarding future events. The forward-looking statements
involve a number of risks, uncertainties and other factors, many of which are
outside ARCP's control, that could cause actual results to differ materially
from those contained in the forward-looking statements. Such risks and
uncertainties relating to the proposed transaction include, but are not
limited to, CCPT III's failure to accept ARCP's proposal and enter into
definitive agreements to effect the transaction, whether and when the proposed
transaction will be consummated, the new combined company's plans, market and
other expectations, objectives, intentions, as well as any expectations or
projections with respect to the combined company, including regarding future
dividends and market valuations, and other statements that are not historical
facts.

The following additional factors, among others, could cause actual results to
differ materially from those set forth in the forward-looking statements: the
ability to obtain regulatory and stockholder approvals for the transaction;
market volatility; unexpected costs or unexpected liabilities that may arise
from the transaction, whether or not consummated; the inability to retain key
personnel; ARCP's ability to achieve the cost-savings and synergies
contemplated by the proposed transaction within the expected time frame;
ARCP's ability to promptly and effectively integrate the businesses of CCPT
III and ARCP; disruption from the proposed transaction making it more
difficult to maintain relationships with tenants; the business plans of the
tenants of the respective parties; continuation or deterioration of current
market conditions; and future regulatory or legislative actions that could
adversely affect the companies. Additional factors that may affect future
results will be contained in ARCP's filings with the SEC from time to time.
ARCP disclaims any obligation to update and revise statements contained in
these materials based on new information or otherwise.

SOURCE American Realty Capital Properties, Inc.

Website: http://www.arcpreit.com
Contact: Tom Johnson / Ian Campbell, Abernathy MacGregor, tbj@abmac.com /
idc@abmac.com, +1-212-371-5999 / +1-213-630-6550; Anthony J. DeFazio, Diccicco
Battista Communications, tdefazio@dbcworks.com, +1-484-342-3600; Brian S.
Block, EVP & CFO, American Realty Capital Properties, Inc., bblock@arlcap.com,
+1-212-415-6500
 
Press spacebar to pause and continue. Press esc to stop.