SEC FORM 3

SEC Form 3

FORM 3

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

INITIAL STATEMENT OF BENEFICIAL OWNERSHIP OF SECURITIES

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934
or Section 30(h) of the Investment Company Act of 1940

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1. Name and Address of Reporting Person^*

KAHANE WILLIAM M

(Last)

(First)

(Middle)

405 PARK AVENUE

(Street)

NEW YORK

10022

(City)

(State)

(Zip)

2. Date of Event Requiring Statement (Month/Day/Year)
02/28/2013

3. Issuer Name and Ticker or Trading Symbol
American Realty Capital Properties, Inc. [ ARCP ]

4. Relationship of Reporting Person(s) to Issuer
(Check all applicable)

X	Director	10% Owner
	Officer (give title below)	Other (specify below)

5. If Amendment, Date of Original Filed (Month/Day/Year)

6. Individual or Joint/Group Filing (Check Applicable Line)

X	Form filed by One Reporting Person
	Form filed by More than One Reporting Person

Table I - Non-Derivative Securities Beneficially Owned
1. Title of Security (Instr. 4)	2. Amount of Securities Beneficially Owned (Instr. 4)	3. Ownership Form: Direct (D) or Indirect (I) (Instr. 5)	4. Nature of Indirect Beneficial Ownership (Instr. 5)
Common Stock	209,559	D
Common Stock	22,627⁽¹⁾	D
Common Stock	2,568⁽³⁾⁽⁴⁾	D
Common Stock	23,900	I	See footnote⁽²⁾

Table II - Derivative Securities Beneficially Owned (e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security (Instr. 4)	2. Date Exercisable and Expiration Date (Month/Day/Year)		3. Title and Amount of Securities Underlying Derivative Security (Instr. 4)		4. Conversion or Exercise Price of Derivative Security	5. Ownership Form: Direct (D) or Indirect (I) (Instr. 5)	6. Nature of Indirect Beneficial Ownership (Instr. 5)
1. Title of Derivative Security (Instr. 4)	Date Exercisable	Expiration Date	Title	Amount or Number of Shares	4. Conversion or Exercise Price of Derivative Security	5. Ownership Form: Direct (D) or Indirect (I) (Instr. 5)	6. Nature of Indirect Beneficial Ownership (Instr. 5)
Operating Partnership Units⁽⁵⁾⁽⁶⁾⁽⁷⁾⁽¹⁰⁾	02/28/2014⁽⁵⁾⁽⁶⁾⁽⁷⁾⁽¹⁰⁾	⁽⁵⁾⁽⁶⁾⁽⁷⁾⁽¹⁰⁾	Common Stock	881,774	$0	D
Operating Partnership Units⁽⁸⁾⁽¹⁰⁾	09/06/2012⁽⁸⁾⁽¹⁰⁾	⁽⁸⁾⁽¹⁰⁾	Common Stock	41,902	$0	D
Class B Operating Partnership Units⁽⁹⁾⁽¹⁰⁾	⁽⁹⁾⁽¹⁰⁾	⁽⁹⁾⁽¹⁰⁾	Common Stock	91,117	$0	D
Operating Partnership Units⁽¹⁰⁾⁽¹¹⁾	02/28/2014⁽¹⁰⁾⁽¹¹⁾	⁽¹⁰⁾⁽¹¹⁾	Common Stock	7,677	$0	D
LTIP Operating Partnership Units⁽¹⁰⁾⁽¹²⁾	⁽¹⁰⁾⁽¹²⁾	⁽¹⁰⁾⁽¹²⁾	Common Stock	8,241,101	$0	I	By ARC Properties Advisors, LLC

Explanation of Responses:

1. The reporting person converted 11,313 and 11,314 shares of Manager's Stock, which vested on January 1, 2013 and February 28, 2013, respectively, resulting in an acquisition of 22,627 shares of common stock. The shares of Manager's Stock were previously held through the Manager, which is 100% owned by ARC, of which the reporting person is an equity holder and a manager. The shares of common stock were distributed pro rata to the reporting person and are now owned directly. Shares of Manager's Stock were automatically convertible to shares of common stock upon the satisfaction of certain conditions.

2. Shares held through ARC, of which the reporting person is an equity holder and a manager. The reporting person disclaims beneficial ownership of the shares except to the extent of his pecuniary interest therein.

3. Shares were acquired pursuant to a merger agreement (the "Merger Agreement") among American Realty Capital Properties, Inc. ("ARCP"), American Realty Capital Trust III, Inc. ("ARCT III"), American Realty Capital Properties Operating Partnership, L.P., ARCP's operating partnership (the "ARCP Operating Partnership"), American Realty Capital Operating Partnership III, L.P. (the "ARCT III Operating Partnership") and Tiger Acquisition LLC, a wholly owned subsidiary of ARCP ("Merger Sub"), pursuant to which ARCT III merged with and into Merger Sub (the "ARCP Merger").

4. Upon the consummation of the ARCP Merger, shares of common stock of ARCT III held by American Realty Capital Trust III Special Limited Partner, LLC (the "Special Limited Partner") were exchanged for 19,000 shares of ARCP common stock at an exchange ratio of 0.95 of a share of ARCP common stock for each share of ARCT III common stock. At the close of business on February 28, 2013, the effective date of the ARCP Merger, the closing price of ARCP's common stock was $13.23 per share. The Special Limited Partner is 100% owned by ARC, of which the reporting person is an equity holder and a manager. The shares of common stock were distributed pro rata to the reporting person and are now owned directly.

5. Pursuant to a contribution and exchange agreement (the "Contribution and Exchange Agreement"), dated as of February 28, 2013, entered into between the ARCP Operating Partnership, the ARCT III Operating Partnership and the Special Limited Partner, the holder of the special limited partner interest in the ARCT III Operating Partnership (the "SLP Interest"). The SLP Interest entitled the Special Limited Partner to receive certain distributions from the ARCT III Operating Partnership, including a subordinated distribution of net sales proceeds resulting from an "investment liquidity event" (as defined in the agreement of limited partnership of the ARCT III Operating Partnership).

6. The ARCP Merger constituted an "investment liquidity event," as a result of which the Special Limited Partner, in connection with management's successful attainment of the 6% performance hurdle and the return to ARCT III's stockholders of $557.3 million in addition to their initial investment, was entitled to receive a subordinated distribution of net sales proceeds from the ARCT III Operating Partnership in an amount equal to approximately $98.4 million (the "Subordinated Distribution Amount").

7. Pursuant to the Contribution and Exchange Agreement, the Special Limited Partner contributed its SLP Interest (with a value equal to the Subordinated Distribution Amount), together with $750,000 in cash (as described in footnote 11 below), to the ARCT III Operating Partnership in exchange for an amount of common operating partnership units of the ARCT III Operating Partnership equivalent to an aggregate of 7,045,528 common operating partnership units of the ARCP Operating Partnership ("OP Units"), which were automatically converted into such OP Units upon consummation of the ARCP Merger. The OP Units issued for the $750,000 cash contribution are accounted for as described in footnote 11 below and are not accounted for in this entry. The Special Limited Partner is 100% owned by ARC, of which the reporting person is an equity holder and a manager. The OP Units were distributed pro rata to the reporting person and are now owned directly.

8. OP Units previously held through ARC Real Estate Partners, LLC, of which the reporting person is an equity holder and a manager. OP Units were issued by the ARCP Operating Partnership in exchange for indirect equity interests in entities that own real properties. The OP Units were distributed pro rata to the reporting person and are now owned directly.

9. Pursuant to the agreement of limited partnership of the ARCT III Operating Partnership, American Realty Capital Advisors III, LLC (the "ARCT III Advisor") was entitled to a "profits interest" in the form of Class B Units in the ARCT III Operating Partnership in connection with its asset management services. Upon consummation of the ARCP Merger, each outstanding Class B Unit in the ARCT III Operating Partnership was converted automatically into 0.95 of a Class B Unit in the ARCP Operating Partnership ("Class B Unit") as set forth in the Merger Agreement. Class B Units are convertible into OP Units upon the satisfaction of certain conditions. The ARCT III Advisor is 100% owned by ARC, of which the reporting person is an equity holder and a manager. The Class B Units were distributed pro rata to the reporting person and are now owned directly.

10. OP Units are exchangeable for cash or, at the option of the ARCP Operating Partnership, shares of ARCP's common stock on a one-to-one basis. OP Units are exchangeable, except under certain limited circumstances, beginning one year from the date of issuance, which includes the holding period of any units that were converted into OP Units (e.g., Class B Units and LTIP Units (as defined below)) and have no expiration date.

11. Pursuant to the Contribution and Exchange Agreement, in addition to the exchange of SLP Interest transaction described in footnotes 5, 6 and 7 above, the Special Limited Partner contributed $750,000 in cash to the ARCT III Operating Partnership in exchange for common operating partnership units in the ARCT III Operating Partnership equivalent to 56,797 OP Units, which were automatically converted into such OP Units upon consummation of the ARCP Merger. The Special Limited Partner is 100% owned by ARC, of which the reporting person is an equity holder and a manager. The OP Units were distributed pro rata to the reporting person and are now owned directly.

12. ARCP entered into a 2013 Advisor Multi-Year Outperformance Agreement (the "OPP") with the ARCP Operating Partnership and the Manager. Under the final OPP, the Manager was granted 8,241,101 target LTIP Units of the ARCP Operating Partnership ("LTIP Units") which will be earned or forfeited based on the level of achievement of the performance metrics under the OPP. The performance period under the OPP commenced on December 11, 2012 and will end on December 31, 2015, with interim measurement periods ending on December 31, 2013 and 2014. Any LTIP Units earned under the OPP will vest 1/3 on each of December 31, 2015, 2016 and 2017 and within 30 days following each vesting date the Manager will be entitled to convert an LTIP Unit into an OP Unit. In addition, the final OPP provides for accelerated earning and vesting of LTIP Units if the Manager is terminated or there is a change in control of ARCP.

	/s/ William M. Kahane	03/18/2013
	** Signature of Reporting Person	Date
Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
* If the form is filed by more than one reporting person, see Instruction 5 (b)(v).
** Intentional misstatements or omissions of facts constitute Federal Criminal Violations See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
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