10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2014

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 Number: 000-54675

CARTER VALIDUS MISSION CRITICAL REIT, INC.

(Exact name of registrant as specified in its charter)

Maryland	27-1550167
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

4890 West Kennedy Blvd., Suite 650 Tampa, FL 33609	(813) 287-0101
(Address of Principal Executive Offices; Zip Code)	(Registrant’s Telephone Number)

4211 West Boy Scout Blvd., Suite 500 Tampa, Florida 33607	N/A
(Former address, if changed since last report)	(Former name and former fiscal year, if changed since last report)

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.    Yes  x    No  ¨

Indicate by check mark whether the registrant has 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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	x  (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

As of November 10, 2014, there were approximately 173,922,000 shares of common stock of Carter Validus Mission Critical REIT, Inc. outstanding.

CARTER VALIDUS MISSION CRITICAL REIT, INC. 

(A Maryland Corporation)

TABLE OF CONTENTS

		Page
PART I.	FINANCIAL INFORMATION (Unaudited)		3
Item 1.	Condensed Consolidated Financial Statements		3
	Condensed Consolidated Balance Sheets as of September 30, 2014 and December 31, 2013		3
	Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September  30, 2014 and 2013		4
	Condensed Consolidated Statement of Stockholders’ Equity for the Nine Months Ended September 30, 2014		5
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2014 and 2013		6
	Notes to Condensed Consolidated Financial Statements		7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		26
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		37
Item 4.	Controls and Procedures		37
PART II.	OTHER INFORMATION		38
Item 1.	Legal Proceedings		38
Item 1A.	Risk Factors		38
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		39
Item 3.	Defaults Upon Senior Securities		41
Item 4.	Mine Safety Disclosures		41
Item 5.	Other Information		41
Item 6.	Exhibits		41
SIGNATURES			42

2

PART 1. FINANCIAL STATEMENTS

Item 1. Financial Statements.

CARTER VALIDUS MISSION CRITICAL REIT, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

As of September 30, 2014 and December 31, 2013

(in thousands, except share amounts)

	(Unaudited)
	September 30, 2014			December 31, 2013
ASSETS
Real estate:
Land ($4,280 and $4,280 related to VIE)	$	142,374		$	92,052
Buildings and improvements ($95,695 and $95,529 related to VIE)		1,588,185			791,574
Construction in process		54,971			—
Acquired intangible assets ($16,189 and $16,189 related to VIE)		223,073			121,214
		2,008,603			1,004,840
Less: accumulated depreciation and amortization ($11,689 and $8,419 related to VIE)		(59,018	)		(27,619	)
Total real estate, net ($104,475 and $107,579 related to VIE)		1,949,585			977,221
Cash and cash equivalents ($261 and $411 related to VIE)		75,243			7,511
Real estate-related notes receivables, net		20,350			54,080
Other assets ($5,372 and $3,968 related to VIE)		52,498			25,852
Total assets	$	2,097,676		$	1,064,664
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Notes payable ($53,216 and $53,746 related to VIE)	$	387,730		$	201,177
Credit facility		75,000			152,000
Accounts payable due to affiliates ($69 and $15 related to VIE)		9,645			696
Accounts payable and other liabilities ($1,773 and $1,411 related to VIE)		31,709			15,546
Intangible lease liabilities, less accumulated amortization of $9,638 and $6,501, respectively ($14,937 and $16,410 related to VIE)		61,991			53,962
Total liabilities		566,075			423,381
Stockholders’ equity:
Preferred stock, $0.01 par value per share, 50,000,000 shares authorized; none issued and outstanding		—			—
Common stock, $0.01 par value per share, 300,000,000 shares authorized; 173,807,656 and 73,238,145 shares issued, respectively; 173,411,808 and 73,137,569 shares outstanding, respectively		1,735			731
Additional paid-in capital		1,542,201			641,019
Accumulated distributions in excess of earnings		(84,177	)		(33,154	)
Accumulated other comprehensive (loss) income		(126	)		600
Total stockholders’ equity		1,459,633			609,196
Noncontrolling interests		71,968			32,087
Total equity		1,531,601			641,283
Total liabilities and stockholders’ equity	$	2,097,676		$	1,064,664

The accompanying notes are an integral part of these condensed consolidated unaudited financial statements.

3

CARTER VALIDUS MISSION CRITICAL REIT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the Three and Nine Months Ended September 30, 2014 and 2013

(in thousands, except shares and per share amounts)

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
Revenue:
Rental and parking revenue	$	38,486		$	13,373		$	91,287		$	35,622
Tenant reimbursement revenue		4,164			2,537			10,259			6,852
Real estate-related notes receivables interest income		(257	)		1,936			2,174			4,195
Total revenue		42,393			17,846			103,720			46,669
Expenses:
Rental and parking expenses		6,108			3,155			14,429			8,526
General and administrative expenses		1,411			539			3,212			1,694
Acquisition related expenses		4,087			1,402			10,598			4,599
Asset management fees		4,078			457			9,538			2,083
Depreciation and amortization		13,002			4,727			31,275			12,591
Total expenses		28,686			10,280			69,052			29,493
Income from operations		13,707			7,566			34,668			17,176
Interest expense		5,201			3,119			13,428			9,025
Net income		8,506			4,447			21,240			8,151
Net income attributable to noncontrolling interests in consolidated partnerships		(1,152	)		(597	)		(2,437	)		(1,437	)
Net income attributable to common stockholders	$	7,354		$	3,850		$	18,803		$	6,714
Other comprehensive income (loss):
Unrealized (loss) income on interest rate swaps		(59	)		(683	)		(2,513	)		732
Reclassification of previous unrealized loss on interest rate swaps into net income		841			189			1,787			521
Other comprehensive income (loss)		782			(494	)		(726	)		1,253
Comprehensive income attributable to common stockholders	$	8,136		$	3,356		$	18,077		$	7,967
Weighted average number of common shares outstanding:
Basic		172,914,286			46,757,918			133,908,958			34,925,951
Diluted		172,931,516			46,774,585			133,928,250			34,944,118
Net income per common share attributable to common stockholders:
Basic	$	0.04		$	0.08		$	0.14		$	0.19
Diluted	$	0.04		$	0.08		$	0.14		$	0.19
Distributions declared per common share	$	0.18		$	0.18		$	0.52		$	0.52

The accompanying notes are an integral part of these condensed consolidated unaudited financial statements.

4

CARTER VALIDUS MISSION CRITICAL REIT, INC.

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

For the Nine Months Ended September 30, 2014

(in thousands, except for share data)

(Unaudited)

	Common Stock						Additional Paid in Capital			Accumulated Distributions in Excess of Earnings			Accumulated Other Comprehensive Income (Loss)			Total Stockholders’ Equity			Noncontrolling Interests			Total Equity
	No. of Shares			Par Value
Balance, December 31, 2013		73,137,569		$	731		$	641,019		$	(33,154	)	$	600		$	609,196		$	32,087		$	641,283
Issuance of common stock		97,015,664			970			965,239			—			—			966,209			—			966,209
Vesting of restricted stock		8,250			—			—			—			—			—			—			—
Issuance of common stock under the distribution reinvestment plan		3,545,598			36			33,648			—			—			33,684			—			33,684
Contributions from noncontrolling interests		—			—			—			—			—			—			39,914			39,914
Distributions to noncontrolling interests		—			—			—			—			—			—			(2,470	)		(2,470	)
Distributions declared to common stockholders		—			—			—			(69,826	)		—			(69,826	)		—			(69,826	)
Commissions on sale of common stock and related dealer-manager fees		—			—			(90,665	)		—			—			(90,665	)		—			(90,665	)
Other offering costs		—			—			(4,273	)		—			—			(4,273	)		—			(4,273	)
Redemption of common stock		(295,273	)		(2	)		(2,835	)		—			—			(2,837	)		—			(2,837	)
Stock-based compensation		—			—			68			—			—			68			—			68
Other comprehensive loss		—			—			—			—			(726	)		(726	)		—			(726	)
Net income		—			—			—			18,803			—			18,803			2,437			21,240
Balance, September 30, 2014		173,411,808		$	1,735		$	1,542,201		$	(84,177	)	$	(126	)	$	1,459,633		$	71,968		$	1,531,601

The accompanying notes are an integral part of these condensed consolidated unaudited financial statements.

5

CARTER VALIDUS MISSION CRITICAL REIT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW

For the Nine Months Ended September 30, 2014 and 2013

(in thousands)

(Unaudited)

	Nine Months Ended September 30,
	2014			2013
Cash flows from operating activities:
Consolidated net income	$	21,240		$	8,151
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		31,275			12,591
Amortization of deferred financing costs		1,893			822
Amortization of intangible lease assets		145			120
Amortization of intangible lease liabilities		(3,147	)		(2,917	)
Amortization of origination costs and commitment fees		1,167			(236	)
Straight-line rent		(11,634	)		(3,631	)
Stock-based compensation		68			51
Changes in operating assets and liabilities:
Accounts payable and other liabilities		4,635			3,302
Accounts payable due to affiliates		8,949			9
Other assets		(1,244	)		(1,784	)
Net cash provided by operating activities		53,347			16,478
Cash flows from investing activities:
Investment in real estate		(952,950	)		(233,483	)
Development expenditures		(13,074	)		(378	)
Investment in real estate-deposits		(1,560	)		573
Other deposits		—			(167	)
Real estate-related notes receivables advances		(14,644	)		(63,650	)
Collections of real estate-related notes receivables		27,500			37,300
Origination costs net of commitment fees related to real estate-related notes receivables		(293	)		(1,141	)
Net cash used in investing activities		(955,021	)		(260,946	)
Cash flows from financing activities:
Proceeds from notes payable		191,466			14,000
Payments on notes payable		(4,913	)		(2,422	)
Proceeds from credit facility		20,000			17,500
Payments of credit facility		(97,000	)		(18,000	)
Payments of deferred financing costs		(7,047	)		(3,763	)
Repurchase of common stock		(2,837	)		(273	)
Offering costs on issuance of common stock		(94,938	)		(38,508	)
Distributions to stockholders		(30,312	)		(8,900	)
Proceeds from issuance of common stock		966,209			333,331
Payments to escrow funds		(12,137	)		(2,297	)
Collections of escrow funds		3,471			2,016
Proceeds from noncontrolling interest in consolidated partnerships		39,914			—
Distributions to noncontrolling interests in consolidated partnerships		(2,470	)		(2,331	)
Net cash provided by financing activities		969,406			290,353
Net change in cash		67,732			45,885
Cash and cash equivalents - Beginning of period		7,511			4,377
Cash and cash equivalents - End of period	$	75,243		$	50,262
Supplemental disclosure of non-cash transactions:
Common stock issued through distribution reinvestment plan	$	33,684		$	7,452
Net unrealized (loss) gain on interest rate swap	$	(726	)	$	1,253
Real estate-related notes receivables converted to investment in real estate	$	20,000		$	—
Accrued contingent consideration	$	5,030		$	—
Supplemental cash flow disclosure:
Interest paid, net of interest capitalized of $1,362	$	12,491		$	8,506

The accompanying notes are an integral part of these condensed consolidated unaudited financial statements.

6

CARTER VALIDUS MISSION CRITICAL REIT, INC. 

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

September 30, 2014

Note 1—Organization and Business Operations

Carter Validus Mission Critical REIT, Inc., or the Company, a Maryland corporation, was incorporated on December 16, 2009 and currently is treated and qualifies as a real estate investment trust, or a REIT, under the Internal Revenue Code of 1986, as amended, or the Code, for federal income tax purposes. The Company was organized to acquire and operate a diversified portfolio of income producing commercial real estate, with a focus on the data center and medical sectors, net leased to investment grade and other creditworthy tenants, as well as to make other real estate investments that relate to such property types. The Company operates through two reportable segments – data centers and medical facilities.

On March 23, 2010, the Company filed a registration statement on Form S-11 under the Securities Act of 1933, as amended, or the Securities Act, to offer for sale to the public on a “best efforts” basis a maximum of 150,000,000 shares of common stock at a price of $10.00 per share, and up to 25,000,000 additional shares of common stock pursuant to a distribution reinvestment plan, or DRIP, under which the Company’s stockholders may elect to have distributions reinvested in additional shares at the higher of $9.50 per share or 95% of the fair market value per share as determined by the Company’s board of directors, or the Offering, for a maximum offering of up to $1,737,500,000. The registration statement for the Offering was first declared effective by the Securities and Exchange Commission, or the SEC, on December 10, 2010.

On May 16, 2014, the Company reallocated $187,500,000 in shares of common stock from the DRIP offering to the primary offering. As a result, the Company was authorized to sell a maximum of 168,750,000 shares of common stock at a price of $10.00 per share, and up to 6,250,000 additional shares of common stock pursuant to the DRIP, for a maximum offering of up to $1,746,875,000.

On June 6, 2014, the Offering terminated. The Company raised gross proceeds of approximately $1,716,046,000 in the Offering (including shares of common stock pursuant to the DRIP).

On April 14, 2014, the Company filed a registration statement on Form S-3 under the Securities Act to register $100,000,000 in shares of common stock pursuant to the DRIP, or the Second DRIP, which will offer existing stockholders a convenient method for purchasing additional shares of common stock by reinvesting cash distributions without paying any selling commissions, fees or service charges. The registration statement became effective with the SEC automatically upon filing; however, the Company did not commence offering shares pursuant to the Second DRIP until June 7, 2014 following the termination of the Offering. As of September 30, 2014, approximately 1,180,000 shares of common stock were issued pursuant to the Second DRIP. As of September 30, 2014, approximately 9,346,000 shares of common stock were remaining in the Second DRIP.

On October 11, 2013, the Company filed with the SEC a registration statement on Form S-11 under the Securities Act with respect to a proposed follow-on offering of up to $240,000,000 of shares of common stock to be offered pursuant to a primary offering, and up to $10,000,000 of shares of common stock to be offered pursuant to the DRIP, or the Follow-On Offering. On July 11, 2014, the Company withdrew the registration statement related to the Follow-On Offering. The Company did not issue any shares in connection with the Follow-On Offering as it was not declared effective by the SEC.

Substantially all of the Company’s business is conducted through Carter/Validus Operating Partnership, LP, a Delaware limited partnership, or the Operating Partnership. The Company is the sole general partner of the Operating Partnership. Carter/Validus Advisors, LLC, or the Advisor, the Company’s affiliated advisor, is the sole limited partner of the Operating Partnership.

The Advisor acts as the Company’s advisor pursuant to an advisory agreement, as amended, or the Advisory Agreement. The Advisor is responsible for managing the Company’s affairs on a day-to-day basis, identifying and making acquisitions and investments on the Company’s behalf and making recommendations as to dispositions of assets. The Company’s board of directors exercises its fiduciary duties in reviewing these recommendations and determining whether to approve or reject proposed transactions. The Advisor also provides asset management, marketing, investor relations and other administrative services on the Company’s behalf. The Advisory Agreement has a term of one-year and is reconsidered on an annual basis by the board of directors. The Company has no employees and relies upon the Advisor to provide substantially all services.

Carter Validus Real Estate Management Services, LLC, or the Property Manager, a wholly owned subsidiary of Carter/Validus REIT Investment Management Company, LLC, the Company’s sponsor, serves as the Company’s property manager. SC Distributors, LLC, or the Dealer Manager, was organized in March 2009 and served as the dealer manager for the Offering. On August 29, 2014, Validus/Strategic Capital Partners (now Strategic Capital Management Holdings, LLC), the indirect parent of the Dealer Manager, was acquired by RCS Capital Corp. There has been no impact to the operations of the Company as a result of this transaction. The Dealer Manager received compensation and fees for services related to the Offering. The Advisor, and the Property Manager received, and will receive, fees during the acquisition and operational stages and will receive fees during the liquidation stage of the Company.

Except as the context otherwise requires, “we,” “our,” “us,” and the “Company” refer to Carter Validus Mission Critical REIT, Inc., the Operating Partnership, all majority-owned subsidiaries and controlled subsidiaries.

7

Note 2—Summary of Significant Accounting Policies

The summary of significant accounting policies presented below is designed to assist in understanding the Company’s condensed consolidated financial statements. Such condensed consolidated financial statements and the accompanying notes thereto are the representation of management. The accompanying condensed consolidated unaudited financial statements of the Company have been prepared in accordance with the generally accepted accounting principles in the United States, or GAAP, for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments, consisting of normal and recurring nature considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2014 are not necessarily indicative of the results that may be expected for the year ending December 31, 2014.

The condensed consolidated balance sheet at December 31, 2013 has been derived from the audited consolidated financial statements at that date but does not include all of the information and notes required by GAAP for complete financial statements. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the Company’s audited consolidated financial statements as of and for the year ended December 31, 2013 and related notes thereto set forth in the Company’s Annual Report on Form 10-K, filed with the SEC on March 19, 2014.

Principles of Consolidation and Basis of Presentation

The accompanying condensed consolidated financial statements include the accounts of the Company, the Operating Partnership, all majority-owned subsidiaries and controlled subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of the financial statements in conformity with GAAP necessarily 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 condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Concentration of Credit Risk and Significant Leases

As of September 30, 2014, the Company had cash on deposit, including restricted cash, in 11 financial institutions, 10 of which had deposits in excess of current federally insured levels totaling $87.3 million; however, the Company has not experienced any losses in such accounts. The Company limits its cash investments to financial institutions with high credit standing; therefore, the Company believes it is not exposed to any significant credit risk on its cash deposits. To date, the Company has experienced no loss or lack of access to cash in its accounts. Concentration of credit risk with respect to accounts receivable from tenants is limited.

As of September 30, 2014, the Company owned real estate investments in 33 metropolitan statistical areas, or MSAs, (including two real estate investments owned through consolidated partnerships), one of which accounted for 10.0% or more of rental revenue. Real estate investments located in the Dallas-Ft. Worth-Arlington, Texas area accounted for an aggregate of 18.6% of rental revenue for the nine months ended September 30, 2014.

As of September 30, 2014, the Company had one tenant that accounted for 10.0% or more of rental revenue. The leases with AT&T Services, Inc. accounted for 21.0% of rental revenue for the nine months ended September 30, 2014.

Share Repurchase Program

The Company approved a share repurchase program that allows for repurchases of shares of the Company’s common stock when certain criteria are met. The share repurchase program provides that all redemptions during any calendar year, including those upon death or a qualifying disability of a stockholder, are limited to those that can be funded with proceeds raised from the DRIP.

Repurchases of shares of the Company’s common stock are at the sole discretion of the Company’s board of directors. In addition, the Company’s board of directors, at its sole discretion, may amend, suspend, reduce, terminate or otherwise change the share repurchase program upon 30 days’ prior notice to the Company’s stockholders for any reason it determines appropriate. During the nine months ended September 30, 2014, the Company received valid redemption requests related to approximately 295,000 shares of common stock, all of which were redeemed for an aggregate purchase price of approximately $2,837,000 (an average of $9.62 per share). During the nine months ended September 30, 2013, the Company received valid redemption requests related to approximately 29,000 shares of common stock, all of which were redeemed for an aggregate purchase price of approximately $273,000 (an average of $9.41 per share).

8

Earnings Per Share

Basic earnings per share attributable for all periods presented are computed by dividing net income attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Shares of non-vested restricted common stock give rise to potentially dilutive shares of common stock. Diluted earnings per share are computed based on the weighted average number of shares outstanding and all potentially dilutive securities. Diluted earnings per share reflect the effect of approximately 17,000 shares and 17,000 shares for the three months ended September 30, 2014 and 2013, respectively, and 19,000 shares and 18,000 shares for the nine months ended September 30, 2014 and 2013, respectively, of non-vested shares of restricted common stock that were outstanding as of such period.

Interest Capitalization

Interest incurred related to the renovation of acquired real estate investments is capitalized during the renovation period. The Company capitalized interest of approximately $831,000 and $1,362,000 for the three and nine months ended September 30, 2014, respectively, and $0 for the three and nine months ended September 30, 2013.

Recently Issued Accounting Pronouncements

In April 2014, the financial accounting standards board, or the FASB, issued ASU 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, or ASU 2014-08. ASU 2014-08 changes the criteria for reporting discontinued operations while enhancing disclosures in this area. Under the new guidance, only disposals representing a strategic shift in operations should be presented as discontinued operations. Those strategic shifts should have a major effect on the company’s operations and financial results. Examples include a disposal of a major geographic area, a major line of business, or a major equity method investment. Additionally, the new guidance requires expanded disclosures about discontinued operations that will provide financial statement users with more information about the assets, liabilities, income, and expenses of discontinued operations. The adoption of ASU 2014-08 is effective prospectively for reporting periods beginning on or after December 15, 2014. The Company does not expect the adoption of ASU 2014-08 to have a material effect on the Company’s condensed consolidated financial statements.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, or ASU 2014-09. The objective of ASU 2014-09 is to clarify the principles for recognizing revenue and to develop a common revenue standard for GAAP. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods and 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. ASU 2014-09 defines a five-step process to achieve this core principle, which may require more judgment and estimates within the revenue recognition process than are required under existing GAAP. The adoption of ASU 2014-09 is effective retrospectively for reporting periods beginning after December 15, 2016. Early adoption of ASU 2014-09 is not permitted. The Company is in the process of evaluating the impact ASU 2014-09 will have on the Company’s consolidated financial statements.

Reclassifications

Certain prior period amounts have been reclassified to conform to the current financial statement presentation, with no effect on the Company’s condensed consolidated financial position or results of operations.

Note 3—Real Estate Investments

The Company reimburses the Advisor, or its affiliates, for acquisition expenses related to selecting, evaluating, acquiring and investing in properties. The reimbursement of acquisition expenses, acquisition fees and real estate commissions and other fees paid will not exceed, in the aggregate, 6.0% of the contract purchase price or total development costs of a certain acquisition, unless fees in excess of such limits are approved by a majority of the Company’s disinterested directors, including a majority of its independent directors. For the nine months ended September 30, 2014 and 2013, acquisition fees and acquisition related costs totaled $22,878,000 and $6,443,000, respectively, which did not exceed 6.0% of the purchase price of the Company’s acquisitions during such periods. Acquisition fees and expenses in connection with the acquisition of properties determined to be business combinations are expensed as incurred, including investment transactions that are no longer under consideration, and are included in acquisition related expenses in the accompanying condensed consolidated statements of comprehensive income. Acquisition fees and expenses associated with transactions determined to be an asset purchase are capitalized. The Company expensed acquisition fees and expenses of approximately $4,087,000 and $1,402,000 for the three months ended September 30, 2014 and 2013, respectively, and $10,598,000 and $4,599,000, for the nine months ended September 30, 2014 and 2013, respectively. The Company capitalized acquisition fees and expenses of approximately $7,451,000 and $1,844,000 for the three months ended September 30, 2014 and 2013, respectively, and $12,280,000 and $1,844,000 for the nine months ended September 30, 2014 and 2013, respectively.

9

2014 Real Estate Investments

During the nine months ended September 30, 2014, the Company completed fourteen real estate acquisitions, of which eight of the real estate acquisitions were determined to be business combinations and six of the real estate acquisitions were determined to be asset acquisitions. The following table summarizes the cash paid for investments in real estate (amounts in thousands):

	Nine Months Ended September 30, 2014
Investments in real estate:
Purchase price of business combinations	$	469,586
Purchase price of asset acquisitions (1)		508,394
Total purchase price of assets acquired		977,980
Non-cash transactions:
Real estate-related notes receivables converted to investment in real estate		20,000
Contingent consideration (2)		5,030
Cash paid for investments in real estate (3)	$	952,950

(1) Of this amount, $53,697,000 was allocated to intangible assets.

(2) Liabilities for contingent consideration are measured at fair value each reporting period with the acquisition-date fair value included as part of the consideration transferred, and subsequent changes to fair value will be recorded within earnings. See Note 15—“Fair Value” for information about fair value measurements of contingent consideration liabilities.

(3) In connection with the acquisition of two real estate investments, the Company obtained financing of $134,000,000, with the remaining balance of the purchase price paid using cash proceeds from the Offering.

Consolidated Partnership

Bay Area Regional Medical Center

On July 11, 2014, the Company, through a majority owned consolidated subsidiary of the Operating Partnership, completed the acquisition of a medical center, or the Bay Area Regional Medical Center, located in Webster, Texas, for the purchase price of $198,000,000, plus closing costs. The acquisition of the Bay Area Regional Medical Center was funded by a $100,000,000 loan, $39,900,000 in equity investment from an unaffiliated investor in exchange for a 40% ownership interest and the Operating Partnership funded $73,847,000 in equity investment in exchange for a 60% ownership interest with net proceeds from the Offering. Upon acquisition, the Company recorded the fair value of noncontrolling interest at $39,900,000.

On July 7, 2014, the Operating Partnership entered into a limited liability agreement, or the Agreement, with the unaffiliated investor. The material terms of the Agreement provide for the following: (a) the Operating Partnership will serve as the manager of the partnership and will have exclusive and complete responsibility for the operations and management of the partnership; provided, however, that the investor has approval rights over certain major decisions; (b) the Operating Partnership, through its wholly owned subsidiary, and the investor will be entitled to a property management fee equal to 3% of their pro rata share of the net rental revenues from the property; (c) earnings are allocated to the Operating Partnership and the unaffiliated investor in proportion to their respective ownership percentage; (d) upon the request of the tenant, the Operating Partnership will contribute up to an additional $35,000,000 related to the build out of the property and upon the receipt of additional funding the ownership interest in partnership will be adjusted proportionally to each partner’s investment and (e) the investor may sell its ownership interest and the Operating Partnership has the right (but not obligation) to first purchase the investor interest at the purchase price, based on the price of percentage of ownership interest.

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Note 4—Acquired Intangible Assets, Net

Acquired intangible assets, net, which are included in real estate in the accompanying condensed consolidated balance sheets, consisted of the following as of September 30, 2014 and December 31, 2013 (amounts in thousands):

	September 30, 2014		December 31, 2013
In-place leases, net of accumulated amortization of $16,816 and $7,954, respectively (with a weighted average remaining life of 15.2 years and 14.6 years, respectively)	$	199,796	$	109,342
Above-market leases, net of accumulated amortization of $439 and $294, respectively (with a weighted average remaining life of 11.6 years and 8.6 years, respectively)		3,207		846
Ground lease interest, net of accumulated amortization of $119 and $78, respectively (with a weighted average remaining life of 61.4 years and 62.8 years, respectively)		2,696		2,700
	$	205,699	$	112,888

The aggregate weighted average remaining life of the acquired intangible assets was 15.8 years and 15.7 years as of September 30, 2014 and December 31, 2013, respectively.

Note 5—Other Assets

Other assets consisted of the following as of September 30, 2014 and December 31, 2013 (amounts in thousands):

	September 30, 2014		December 31, 2013
Deferred financing costs, net of accumulated amortization of $3,643 and $1,750, respectively	$	11,954	$	6,800
Lease commissions, net of accumulated amortization of $40 and $21, respectively		313		203
Investments in unconsolidated partnerships		108		116
Accounts receivable		2,356		1,025
Straight-line rent receivable		19,536		7,902
Restricted cash held in escrow		13,910		5,246
Real estate escrow deposits		250		5
Restricted cash		1,370		1,142
Derivative assets		550		644
Accrued interest receivable from real estate-related notes receivables		152		1,850
Prepaid and other assets		1,999		919
	$	52,498	$	25,852

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Note 6— Investment in Real Estate-Related Notes Receivables, Net

As of September 30, 2014, the Company had investments in three real estate-related notes receivables, which are loans made that the Company intends to hold to maturity. Accordingly, real estate-related notes receivables are recorded at stated principal amounts net of any discount or premium and deferred loan origination costs or fees. The related discounts or premiums are accreted or amortized over the life of the real estate-related note receivables, as applicable. The Company defers certain loan origination and commitment fees and amortizes them as an adjustment of yield over the term of the real estate-related note receivable. The related accretion of discounts and/or amortization of premiums and origination costs are recorded in interest income in the accompanying condensed consolidated statements of comprehensive income. Real estate-related notes receivables interest income for the three months ended September 30, 2014 and 2013 was $(257,000) and $1,936,000, respectively, and for the nine months ended September 30, 2014 and 2013 was $2,174,000 and $4,195,000, respectively. Real estate-related notes receivables interest income for the three months ended September 30, 2014 in the amount of $(257,000) primarily related to expenses associated with amortization of loan origination fees of $766,000 in connection with the repayment of the Bay Area Preferred Equity Loan on July 11, 2014.

As of September 30, 2014 and December 31, 2013, the aggregate balance on the Company’s investment in real estate-related notes receivables, net was $20,350,000 and $54,080,000, respectively. As of September 30, 2014, the Company had fixed rate notes receivables with interest rates ranging from 8.0% to 12.0% per annum and a weighted average interest rate of 8.6% per annum.

Real estate-related notes receivables consisted of the following as of September 30, 2014 and December 31, 2013 (amounts in thousands):

					Outstanding Balance as of
Real Estate-Related Notes Receivables, Net	Interest Rate			Maturity Date	September 30, 2014		December 31, 2013
Bay Area Preferred Equity Loan (1)		17.0	%(4)	11/30/18	$	—	$	23,247
Walnut Hill Property Company Loan (1),(5)		10.0	%	02/28/18		—		20,327
Medistar Loan (3)		8.0	%	(2)		9,500		9,500
MM Peachtree Holdings (1)		12.0	%	12/31/21		514		514
Landmark Loan (1),(3)		9.0	%	12/17/15		10,336		492
					$	20,350	$	54,080

(1) Unconsolidated VIE. The maximum exposure to loss related to the Company’s variable interest in unconsolidated VIEs is limited to the outstanding balances of the respective real estate-related notes receivables. The Company may be subject to additional losses to the extent of any receivables relating to future funding.

(2) The Medistar Loan, previously known as the Walnut Hill Bridge Loan, matures upon the earlier to occur of: (i) the sale or refinancing of the property under construction for which proceeds from the loan were used and (ii) December 31, 2014.

(3) As of September 30, 2014, an affiliate of the Company had an option to purchase the respective property under construction when the construction is completed.

(4) On March 25, 2014, the Company increased the aggregate borrowing amount by $5,000,000 to $27,500,000. The additional $5,000,000 bore interest at a per annum rate equal to 10.0%. On July 11, 2014, in connection with the acquisition of the Bay Area Regional Medical Center, located in Webster, Texas, the borrower paid off the outstanding principal and accrued interest in the amount of $29,401,000 on the Bay Area Preferred Equity Loan.

(5) On February 25, 2014, in connection with the acquisition of the Walnut Hill Medical Center, located in Dallas, Texas the Company applied the Walnut Hill Property Company Loan outstanding principal amount of $20,000,000 to reduce the cash paid at acquisition.

The Company evaluates the collectability of both interest and principal on each real estate-related note receivable to determine whether it is collectible, primarily through the evaluation of the credit quality indicators, such as underlying collateral and payment history. The Company does not intend to sell its investments in real estate-related notes receivables and it is not likely that the Company will be required to sell its investments in real estate-related notes receivables before recovery of their amortized costs basis, which may be at maturity. No impairment losses were recorded related to investments in real estate-related notes receivables for the three and nine months ended September 30, 2014 and 2013. In addition, no allowances for uncollectability were recorded related to investments in real estate-related notes receivables as of September 30, 2014 and December 31, 2013.

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Note 7—Future Minimum Rent

The Company’s real estate assets are leased to tenants under operating leases with varying terms. The leases frequently have provisions to extend the lease agreement. The Company retains substantially all of the risks and benefits of ownership of the real estate assets leased to tenants. As of September 30, 2014, the weighted average remaining lease term was 12.5 years.

The future minimum rental income from the Company’s investments in real estate assets under non-cancelable operating leases for the three months ending December 31, 2014, and for each of the next four years ending December 31 and thereafter, are as follows (amounts in thousands):

Year	Amount
Three months ending December 31, 2014	$	37,552
2015		152,031
2016		154,060
2017		156,628
2018		159,735
Thereafter		1,744,210
	$	2,404,216

Note 8—Notes Payable

During the nine months ended September 30, 2014, the Company entered into five notes payable collateralized by real estate assets in the aggregate amount of $297,316,000 as follows: on January 27, 2014, the Company originated a $20,466,000 note payable with a variable interest rate at the 30-day London interbank offered rate, or LIBOR, plus 335 basis points with a maturity date of January 26, 2019, subject to the Company’s right to two 12-month extensions; on February 25, 2014, the Company originated a $34,000,000 note payable with a variable interest rate at the 30-day LIBOR rate plus 400 basis points with a maturity date of February 25, 2019, which was fixed through an interest rate swap agreement to effectively fix the variable interest rate on the loan at 6.2% per annum; on February 26, 2014, the Company originated a $37,000,000 note payable with a variable interest rate at the 30-day LIBOR rate plus 225 basis points with a maturity date of February 26, 2019, which was fixed through an interest rate swap agreement to effectively fix the variable interest rate on the loan at 3.8% per annum. The Company has an option to draw an additional $37,000,000 under this note payable until February 26, 2015. On July 11, 2014, the Company originated a $100,000,000 note payable with a variable interest rate at the 30-day LIBOR rate plus 450 basis points for a period of eighteen months and 400 basis points after the eighteen month period with a maturity date of July 11, 2019, which $75,000,000 of the $100,000,000 was fixed through an interest rate swap agreement to effectively fix the variable interest rate on the loan at 6.3% per annum; on August 21, 2014, the Company originated a $105,850,000 note payable with a variable interest rate at the 30-day LIBOR rate plus 265 basis points with a maturity date of August 21, 2017, subject to the Company’s right to one 24-month extension. On October 1, 2014 the Company drew down $105,850,000 under this note payable.

Notes payable consisted of the following as of September 30, 2014 and December 31, 2013 (amounts in thousands):

	September 30, 2014		December 31, 2013
Fixed rate notes payable	$	135,002	$	137,049
Variable rate notes payable		45,009		—
Variable rate notes payable fixed through interest rate swaps		207,719		64,128
Total notes payable	$	387,730	$	201,177

As of September 30, 2014, the notes payable had interest rates ranging from 3.5% to 6.3% and a weighted average interest rate of 5.1%. The notes payable mature on various dates from August 2016 through April 2022.

13

The following is a summary of the change in carrying amounts of notes payable for the nine months ended September 30, 2014 and 2013 (amounts in thousands):

	Nine Months Ended September 30,
	2014			2013
Beginning balance	$	201,177		$	156,847
Additions:
Notes payable originations		191,466			14,000
Deductions:
Scheduled principal payments on notes payable		(4,913	)		(2,422	)
Ending Balance	$	387,730		$	168,425

The principal payments due on the notes payable for the three months ending December 31, 2014, and for each of the next four years ending December 31 and thereafter, are as follows (amounts in thousands):

Year	Principal Payments		Balloon Payments		Amount
Three months ending December 31, 2014	$	2,620	$	—	$	2,620
2015		10,799		—		10,799
2016		10,797		13,441		24,238
2017		10,161		74,325		84,486
2018		8,299		45,405		53,704
Thereafter		6,422		205,461		211,883
	$	49,098	$	338,632	$	387,730

Note 9—Credit Facility

On May 28, 2014, the Operating Partnership amended certain agreements related to the Company’s credit facility, or the KeyBank Credit Facility, to include American Momentum Bank, RBS Citizens, N.A., and United Community Bank as lenders and to increase the maximum commitments available under the KeyBank Credit Facility from $225,000,000 to an aggregate of up to $365,000,000, consisting of a $290,000,000 revolving line of credit, with a maturity date of May 28, 2017, subject to the Operating Partnership’s right to a 12-month extension, and $75,000,000 in term loans, with a maturity date of May 28, 2018, subject to the Operating Partnership’s right to a 12-month extension. The new and existing lenders agreed to make the loans on an unsecured basis (previously all loans were secured by a perfected first priority lien and security interest on the mortgaged properties). The proceeds of loans made under the KeyBank Credit Facility may be used to finance the acquisition of real estate investments, capital expenditures with respect to real estate and for general corporate working capital purposes. The KeyBank Credit Facility can be increased to $500,000,000 under certain circumstances.

In connection with the amendment to the KeyBank Credit Facility, the annual interest rate payable under the KeyBank Credit Facility was decreased to, at the Operating Partnership’s option, either (a) LIBOR, plus an applicable margin ranging from 1.75% to 2.25% (the margin rate was previously set at a range from 2.25% to 3.00%), which is determined based on the overall leverage of the Operating Partnership; or (b) a base rate, which means, for any day, a fluctuating rate per annum equal to the prime rate for such day, plus an applicable margin ranging from 0.75% to 1.25% (the margin rate was previously set at a range from 1.00% to 1.75%), which is determined based on the overall leverage of the Operating Partnership. Additionally, the requirement to pay a fee on the unused portion of the lenders’ commitments under the KeyBank Credit Facility was reduced from 0.30% per annum to 0.25% per annum if the average daily amount outstanding balance under the KeyBank Credit Facility is less than 50% of the lenders’ commitments, and from 0.20% per annum to 0.15% per annum if the average daily amount outstanding under the KeyBank Credit Facility is greater than 50% of the lenders’ commitments. The unused fee is payable quarterly in arrears.

In connection with the KeyBank Credit Facility, the Operating Partnership entered into interest swap agreements with KeyBank National Association to effectively fix LIBOR on $55,000,000 out of $75,000,000 of the term loans. The weighted average rate of the fixed portion of the term loans of the KeyBank Credit Facility was 0.91%, resulting in an interest rate ranging from 2.66% to 3.16% per annum. The revolving line of credit and the term loans can be prepaid prior to maturity without penalty; provided, however, that any portion of the term loans that is prepaid may not be reborrowed, and the Operating Partnership may be subject to a breakage fee under the swap agreements, if applicable.

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The actual amount of credit available under the KeyBank Credit Facility is a function of certain loan-to-cost, loan-to-value, debt yield and debt service coverage ratios. The credit available to the Operating Partnership under the KeyBank Credit Facility will be a maximum principal amount of the value of the assets that are included in the unencumbered pool. During the nine months ended September 30, 2014, the Company paid down $97,000,000 under the KeyBank Credit Facility. As of September 30, 2014, the total unencumbered pool availability under the KeyBank Credit Facility was $365,000,000. As of September 30, 2014, the Company had an outstanding balance of $75,000,000 under the KeyBank Credit Facility and had an aggregate unencumbered pool availability of $290,000,000.

Note 10—Intangible Lease Liabilities, Net

Intangible lease liabilities, net consisted of the following as of September 30, 2014 and December 31, 2013 (amounts in thousands):

	September 30, 2014		December 31, 2013
Below-market leases, net of accumulated amortization of $9,616 and $6,501, respectively (with a weighted average remaining life of 17.6 years and 18.5 years, respectively)	$	56,688	$	53,962
Ground leasehold liabilities, net of accumulated amortization of $22 and $0, respectively (with a weighted average remaining life of 44.4 years and 0 years, respectively)		5,303		—
		61,991		53,962

The aggregate weighted average remaining life of intangible lease liabilities was 19.9 years and 18.5 years as of September 30, 2014 and December 31, 2013, respectively.

Note 11—Commitments and Contingencies

Litigation

In the ordinary course of business, the Company may become subject to litigation or claims. As of September 30, 2014, there were, and currently there are, no material pending legal proceedings to which the Company is a party.

Note 12—Related-Party Transactions and Arrangements

Certain affiliates of the Company received fees and compensation in connection with the Offering and will continue to receive fees during the acquisition, management and sale of the assets of the Company. The Dealer Manager received a selling commission of up to 7.0% of gross offering proceeds. In addition, the Dealer Manager received up to 2.75% of gross offering proceeds as a dealer manager fee. The Dealer Manager, in its sole discretion, re-allowed all or a portion of its dealer manager fee to participating broker-dealers as a marketing and due diligence expense reimbursement. The Company paid the Dealer Manager approximately $61,871,000 and $13,556,000 for the three months ended September 30, 2014 and 2013, respectively, and $90,665,000 and $30,904,000 for the nine months ended September 30, 2014 and 2013, respectively, for selling commissions and dealer manager fees in connection with the Offering. On June 6, 2014, the Offering terminated.

Organization and offering expenses were paid by the Advisor, or its affiliates, on behalf of the Company. The Advisor was reimbursed for actual expenses incurred up to 15.0% of the gross offering proceeds (including selling commissions and the dealer manager fee from the sale of shares of the Company’s common stock in the Offering, other than shares of common stock sold pursuant to the DRIP). For the three months ended September 30, 2014 and 2013, the Company reimbursed $144,000 and $3,068,000, respectively, and for the nine months ended September 30, 2014 and 2013, the Company reimbursed $1,135,000 and $7,604,000, respectively, in offering expenses to the Advisor, or its affiliates. Other organization expenses were expensed as incurred and offering costs are reported in the accompanying condensed consolidated statement of stockholders’ equity.

The Company pays the Advisor, or its affiliates, an acquisition and advisory fee in the amount of 2.0% of the contract purchase price of each asset or loan the Company acquires or originates. In addition, the Company reimburses the Advisor for all acquisition expenses it incurs on the Company’s behalf, but only to the extent the total amount of all acquisition fees and acquisition expenses is limited to 6.0% of the contract purchase price. For the three months ended September 30, 2014 and 2013, the Company incurred $9,379,000 and $2,615,000, respectively, and for the nine months ended September 30, 2014 and 2013, the Company incurred $18,684,000 and $4,633,000, respectively, in acquisition fees to the Advisor, or its affiliates. During the three months ended September 30, 2014 and 2013, the Company paid $136,000 and $707,000, respectively, and for the nine months ended September 30, 2014 and 2013, the Company paid $293,000 and $1,004,000, respectively, in advisory fees to the Advisor, or its affiliates, related to investments in notes receivables.

The Company incurs an annual asset management fee of 1.0% of the aggregate asset value plus costs and expenses incurred by the Advisor in providing asset management services. The fee is payable monthly in an amount equal to 0.08333% of the aggregate asset value as of the last day of the immediately preceding month. For the three months ended September 30, 2014 and 2013, the Advisor recognized $4,078,000 and $457,000, respectively, in asset management fees, net of asset management fees waived. For the nine months ended September 30, 2014 and 2013, the Advisor recognized $9,538,000 and $2,083,000, respectively, in asset management fees, net of asset management fees waived. For the three months ended September 30, 2014 and 2013, the Advisor

15

waived irrevocably, without recourse, $0 and $682,000, respectively, in asset management fees. For the nine months ended September 30, 2014 and 2013, the Advisor waived irrevocably, without recourse, $0 and $862,000, respectively, in asset management fees. For the three and nine months ended September 30, 2014, the Advisor deferred receipt of asset management fees because the Company’s modified funds from operations did not exceed its distributions. As of September 30, 2014 the Advisor deferred receipt of asset management fees in the amount of $8,963,000.

The Company reimburses the Advisor for all expenses it paid or incurred in connection with the services provided to the Company, subject to certain limitations. The Company will not reimburse the Advisor for personnel costs in connection with services for which the Advisor receives an acquisition and advisory fee or a disposition fee. For the three months ended September 30, 2014 and 2013, the Advisor incurred $410,000 and $285,000, respectively, and for the nine months ended September 30, 2014 and 2013, the Advisor incurred $1,279,000 and $738,000, respectively, in operating expenses on the Company’s behalf. For the three months ended September 30, 2014 and 2013, the Company reimbursed $438,000 and $239,000, respectively, and for the nine months ended September 30, 2014 and 2013 the Company reimbursed $1,364,000 and $710,000, respectively, in operating expenses to the Advisor.

The Company has no direct employees. The employees of the Advisor and other affiliates provide services to the Company related to acquisition, property management, asset management, accounting, investor relations, and all other administrative services. If the Advisor, or its affiliates, provides a substantial amount of services, as determined by a majority of the Company’s independent directors, in connection with the sale of one or more properties, the Company will pay the Advisor up to one-half of the brokerage commission paid, but in no event to exceed an amount equal to 2.0% of the contract sales price of each property sold. In no event will the combined real estate commission paid to the Advisor, its affiliates and unaffiliated third parties exceed 6.0% of the contract sales price. In addition, after investors have received a return on their net capital contributions and an 8.0% cumulative non-compounded annual return, then the Advisor is entitled to receive 15.0% of the remaining net sale proceeds. As of September 30, 2014, the Company did not incur any disposition fees or any subordinated sale fees to the Advisor, or its affiliates.

Upon listing of the Company’s common stock on a national securities exchange, a listing fee equal to 15.0% of the amount by which the market value of the Company’s outstanding stock plus all distributions paid by the Company prior to listing exceeds the sum of the total amount of capital raised from investors and the amount of cash flow necessary to generate an 8.0% cumulative, non-compounded annual return to investors will be paid to the Advisor. As of September 30, 2014, the Company did not incur any listing fees.

The Company pays the Property Manager leasing and management fees in connection with the rental, leasing, operation and management of the Company’s properties. Such fees equal 3.0% of gross revenues from single-tenant properties and 4.0% of gross revenues from multi-tenant properties. The Company will reimburse the Property Manager and its affiliates for property-level expenses that any of them pay or incur on the Company’s behalf, including salaries, bonuses and benefits of persons employed by the Property Manager and its affiliates, except for the salaries, bonuses and benefits of persons who also serve as one of the Company’s executive officers. The Property Manager and its affiliates may subcontract the performance of their duties to third parties and pay all or a portion of the property management fee to the third parties with whom they contract for these services. If the Company contracts directly with third parties for such services at customary market fees, the Company will pay the Property Manager an oversight fee equal to 1.0% of the gross revenues of the property managed. In no event will the Company pay the Property Manager, the Advisor, or its affiliates, both a property management fee and an oversight fee with respect to any particular property. The Company may pay the Property Manager a separate fee for the one-time initial rent-up, lease renewals or leasing-up of newly constructed properties in an amount not to exceed the fee customarily charged in arm’s length transactions by others rendering similar services in the same geographic area for similar properties as determined by a survey of brokers and agents in such area. For the three months ended September 30, 2014 and 2013, the Company incurred $1,482,000 and $374,000, respectively, and for the nine months ended September 30, 2014 and 2013, the Company incurred $3,113,000 and $982,000, respectively, in property management fees to the Property Manager. 

Accounts Payable Due to Affiliates

The following amounts were outstanding due to affiliates as of September 30, 2014 and December 31, 2013 (amounts in thousands):

Entity	Fee	September 30, 2014		December 31, 2013
Carter/Validus Advisors, LLC and its affiliates	Acquisition costs	$	4	$	1
Carter/Validus Advisors, LLC and its affiliates	Asset management fees		8,963		102
Carter Validus Real Estate Management Services, LLC	Property management fees		319		105
Carter/Validus Advisors, LLC and its affiliates	General and administrative costs		140		235
Carter/Validus Advisors, LLC and its affiliates	Offering costs		—		253
Carter/Validus Advisors, LLC and its affiliates	Leasing fees		219		—
		$	9,645	$	696

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Note 13—Business Combinations

During the nine months ended September 30, 2014, the Company completed the acquisition of 100% fee simple interest in eight real estate investments (four data centers and four medical facilities) that were determined to be business combinations, comprised of ten buildings. The aggregate purchase price of the acquisitions determined to be business combinations was $469,586,000, plus closing costs, including $5,030,000 of contingent consideration.

The following table summarizes the acquisitions determined to be business combinations during the nine months ended September 30, 2014:

Property Description	Date Acquired		Ownership Percentage
Cypress Pointe Surgical Hospital		03/14/2014		100	%
Milwaukee Data Center		03/28/2014		100	%
Charlotte Data Center		04/28/2014		100	%
Chicago Data Center		05/20/2014		100	%
Rhode Island Rehabilitation Healthcare Facility		08/28/2014		100	%
Select Medical Portfolio		08/29/2014		100	%
Alpharetta Data Center		09/05/2014		100	%
Lafayette Surgical Hospital		09/19/2014		100	%

Results of operations for the acquisitions determined to be business combinations are reflected in the accompanying condensed consolidated statements of comprehensive income for the nine months ended September 30, 2014 for the period subsequent to the acquisition date of each property. For the period from the acquisition date through September 30, 2014, the Company recognized $12,832,000 of revenues and a net loss of $5,718,000 for its business combination acquisitions. In addition, during the nine months ended September 30, 2014, the Company incurred aggregate non-recurring charges related to acquisition fees and costs of $10,277,000 in connection with acquisitions determined to be business combinations, which are included in the accompanying condensed consolidated statements of comprehensive income.

The following table summarizes management’s allocation of the fair value of the acquisitions determined to be business combinations during the nine months ended September 30, 2014 (amounts in thousands):

	Total
Land	$	21,656
Buildings and improvements		409,131
In-place leases		45,621
Tenant improvements		1,803
Above-market leases		2,505
Total assets acquired		480,716
Below-market leases		(5,842	)
Ground leasehold liabilities		(5,288	)
Total liabilities acquired		(11,130	)
Net assets acquired	$	469,586

Assuming the business combinations described above had occurred on January 1, 2013, pro forma revenues, net income and net income attributable to common stockholders would have been as follows for the three and nine month periods below (amounts in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Pro forma basis:
Revenues	$	45,110	$	30,803	$	125,144	$	90,065
Net income	$	12,812	$	10,416	$	37,760	$	28,479
Net income attributable to common stockholders	$	11,660	$	9,820	$	35,323	$	27,041

The pro forma information for the three and nine months ended September 30, 2014 was adjusted to exclude $4,236,000 and $10,277,000, respectively, of acquisition expenses recorded during such periods. The pro forma information is presented for informational purposes only and may not be indicative of what actual results of operations would have been had the transactions occurred at the beginning of 2013, nor is it necessarily indicative of future operating results.

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Note 14—Segment Reporting

The Company aggregates data centers and medical facilities into two operating segments for reporting purposes. The Company’s investments in data centers and medical facilities are based on certain underwriting assumptions and operating criteria, which are different for data centers and medical facilities. Management reviews the performance and makes operating decisions based on these two reportable segments. There were no intersegment sales or transfers during the three and nine months ended September 30, 2014 and 2013.

The Company evaluates performance based on net operating income of the combined properties in each segment. Net operating income, a non-GAAP financial measure, is defined as total revenues, less rental expenses, which excludes depreciation and amortization, general and administrative expenses, acquisition related expenses, asset management fees, interest expense and interest income. The Company believes that segment net operating income serves as a useful supplement to net income because it allows investors and management to measure unlevered property-level operating results and to compare operating results to the operating results of other real estate companies and between periods on a consistent basis. Segment net operating income should not be considered as an alternative to net income determined in accordance with GAAP as an indicator of financial performance, and accordingly, the Company believes that in order to facilitate a clear understanding of the consolidated historical operating results, segment profit should be examined in conjunction with net income as presented in the accompanying condensed consolidated financial statements and data included elsewhere in this Quarterly Report on Form 10-Q.

Interest income, general and administrative expenses, acquisition related expenses, asset management fees, depreciation and amortization and interest expense are not allocated to individual segments for purposes of assessing segment performance.

Non-segment assets primarily consist of corporate assets including cash and cash equivalents, real estate and escrow deposits, deferred financing costs, real estate-related notes receivables and other assets not attributable to individual properties.

Summary information for the reportable segments during the three and nine months ended September 30, 2014 and 2013 are as follows (amounts in thousands):

	Data Centers			Medical Facilities			Three Months Ended September 30, 2014
Revenue:
Rental, parking and tenant reimbursement revenue	$	24,752		$	17,898		$	42,650
Expenses:
Rental and parking expenses		(5,123	)		(985	)		(6,108	)
Segment net operating income	$	19,629		$	16,913			36,542
Revenue:
Real estate-related notes receivables interest expense								(257	)
Expenses:
General and administrative expenses								(1,411	)
Acquisition related expenses								(4,087	)
Asset management fees								(4,078	)
Depreciation and amortization								(13,002	)
Income from operations								13,707
Interest expense								(5,201	)
Net income							$	8,506

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	Data Centers			Medical Facilities			Three Months Ended September 30, 2013
Revenue:
Rental, parking and tenant reimbursement revenue	$	10,042		$	5,868		$	15,910
Expenses:
Rental and parking expenses		(2,770	)		(385	)		(3,155	)
Segment net operating income	$	7,272		$	5,483			12,755
Revenue:
Real estate-related notes receivables interest income								1,936
Expenses:
General and administrative expenses								(539	)
Acquisition related expenses								(1,402	)
Asset management fees								(457	)
Depreciation and amortization								(4,727	)
Income from operations								7,566
Interest expense								(3,119	)
Net income							$	4,447

	Data Centers			Medical Facilities			Nine Months Ended September 30, 2014
Revenue:
Rental, parking and tenant reimbursement revenue	$	60,569		$	40,977		$	101,546
Expenses:
Rental and parking expenses		(12,104	)		(2,325	)		(14,429	)
Segment net operating income	$	48,465		$	38,652			87,117
Revenue:
Real estate-related notes receivables interest income								2,174
Expenses:
General and administrative expenses								(3,212	)
Acquisition related expenses								(10,598	)
Asset management fees								(9,538	)
Depreciation and amortization								(31,275	)
Income from operations								34,668
Interest expense								(13,428	)
Net income							$	21,240

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	Data Centers			Medical Facilities			Nine Months Ended September 30, 2013
Revenue:
Rental, parking and tenant reimbursement revenue	$	28,079		$	14,395		$	42,474
Expenses:
Rental and parking expenses		(7,554	)		(972	)		(8,526	)
Segment net operating income	$	20,525		$	13,423			33,948
Revenue:
Real estate-related notes receivables interest income								4,195
Expenses:
General and administrative expenses								(1,694	)
Acquisition related expenses								(4,599	)
Asset management fees								(2,083	)
Depreciation and amortization								(12,591	)
Income from operations								17,176
Interest expense								(9,025	)
Net income							$	8,151

Assets by reportable segments as of September 30, 2014 and December 31, 2013 are as follows (amounts in thousands):

	September 30, 2014		December 31, 2013
Assets by segment:
Data centers	$	1,080,021	$	639,009
Medical facilities		931,380		358,584
All other		86,275		67,071
Total assets	$	2,097,676	$	1,064,664

Capital additions by reportable segments for the nine months ended September 30, 2014 and 2013 are as follows (amounts in thousands):

	Nine Months Ended September 30,
	2014		2013
Capital additions by segment:
Data centers	$	438,539	$	99,600
Medical facilities		527,485		134,261
All other		—		—
Total capital additions	$	966,024	$	233,861

Note 15—Fair Value

Notes payable – Fixed Rate— The estimated fair value of notes payable – fixed rate measured using quoted prices and observable inputs from similar liabilities (Level 2) was approximately $136,920,000 and $139,142,000 as of September 30, 2014 and December 31, 2013, respectively, as compared to the carrying value of $135,002,000 and $137,049,000 as of September 30, 2014 and December 31, 2013, respectively.

Notes payable – Variable— The estimated fair value of notes payable – variable rate fixed through interest rate swap agreements (Level 2) was approximately $212,376,000 and $62,835,000 as of September 30, 2014 and December 31, 2013, respectively, as compared to the carrying value of $207,719,000 and $64,128,000 as of September 30 2014 and December 31, 2013, respectively. The carrying value of the notes payable – variable was $45,009,000 and $0 as of September 30, 2014 and December 31, 2013, respectively, which approximated its fair value.

20

KeyBank Credit Facility— The carrying value of the KeyBank Credit Facility – variable was $20,000,000 and $97,000,000, which approximated its fair value, as of September 30, 2014 and December 31, 2013, respectively. The estimated fair value of the KeyBank Credit Facility – variable rate fixed through interest rate swap agreements (Level 2) was approximately $52,458,000 and $51,922,000 as of September 30, 2014 and December 31, 2013, respectively, as compared to the carrying value of $55,000,000 and $55,000,000 as of September 30, 2014 and December 31, 2013, respectively.

Real estate-related notes receivables, net— The estimated fair value of the real estate-related notes receivables, net was $20,350,000 and $58,176,000 as of September 30, 2014 and December 31, 2013, respectively, as compared to the carrying value of $20,350,000 and $54,080,000 as of September 30, 2014 and December 31, 2013, respectively. The fair value of the Company’s real estate-related notes receivables is estimated using significant unobservable inputs not based on market activity, but rather through particular valuation techniques (Level 3). The fair value was measured based on the income approach valuation methodology, which requires certain judgments to be made by management.

Contingent consideration— The Company has contingent obligations to transfer cash payments to the former owner in conjunction with a certain acquisition if specified future operational objectives are met over future reporting periods. Liabilities for contingent consideration will be measured at fair value each reporting period, with the acquisition-date fair value included as part of the consideration transferred, and subsequent changes in fair value recorded in earnings as acquisition related expenses.

The estimated fair value and the carrying value of the contingent consideration was $5,030,000 of the fair value hierarchy, as of September 30, 2014, which is reported in the accompanying condensed consolidated balance sheets in accounts payable and other liabilities. The Company uses an income approach to value the contingent consideration liability, which is determined based on the present value of probability-weighted future cash flows. The Company has classified the contingent consideration liability as Level 3 of the fair value hierarchy due to the lack of relevant observable market data over fair value inputs such as probability-weighting for payment outcomes. Increases in the assessed likelihood of a high payout under a contingent consideration arrangement contributes to increases in the fair value of the related liability. Conversely, decreases in the assessed likelihood of a higher payout under a contingent consideration arrangement contributes to decreases in the fair value of the related liability. Changes in assumptions could have an impact on the payout of contingent consideration arrangements with a maximum payout of $5,030,000 in cash and a minimum payout of $0, as of September 30, 2014.

Derivative instruments— Considerable judgment is necessary to develop estimated fair values of financial instruments. Accordingly, the estimates presented herein are not necessarily indicative of the amount the Company could realize, or be liable for, on disposition of the financial instruments. The Company has determined that the majority of the inputs used to value its interest rate swaps fall within Level 2 of the fair value hierarchy. The credit valuation adjustment associated with these instruments utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by the Company and the respective counterparty. However, as of September 30, 2014, 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 its interest rate swaps. As a result, the Company determined that its interest rate swaps valuation in its entirety is classified in Level 2 of the fair value hierarchy.

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In accordance with the fair value hierarchy described above, the following table shows the fair value of the Company’s financial assets and liabilities that are required to be measured at fair value on a recurring basis as of September 30, 2014 and December 31, 2013 (amounts in thousands):

	September 30, 2014
	Fair Value Hierarchy								Total Fair Value
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Assets:
Derivative assets	$	—	$	550		$	—		$	550
Total assets at fair value	$	—	$	550		$	—		$	550
Liabilities:
Derivative liabilities	$	—	$	(676	)	$	—		$	(676	)
Contingent consideration obligations		—		—			(5,030	)		(5,030	)
Total liabilities at fair value	$	—	$	(676	)	$	(5,030	)	$	(5,706	)

	December 31, 2013
	Fair Value Hierarchy							Total Fair Value
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Assets:
Derivative assets	$	—	$	644		$	—	$	644
Total assets at fair value	$	—	$	644		$	—	$	644
Liabilities:
Derivative liabilities	$	—	$	(44	)	$	—	$	(44	)
Total liabilities at fair value	$	—	$	(44	)	$	—	$	(44	)

The following table provides a roll-forward of the fair value of recurring Level 3 fair value measurements for the three and nine months ended September 30, 2014 and 2013 (amounts in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Liabilities:
Contingent consideration obligations:
Beginning balance	$	5,030	$	—	$	—	$	—
Additions to contingent consideration obligations		—		—		5,030		—
Adjustment to contingent consideration obligations		—		—		—		—
Total (gains) losses included in earnings (1)		—		—		—		—
Settlements of contingent consideration obligations		—		—		—		—
Ending balance	$	5,030	$	—	$	5,030	$	—
Unrealized (gains) losses still held (2)	$	—	$	—	$	—	$	—

(1) Changes in the fair value of contingent consideration obligations are reported in acquisition related expenses in the accompanying condensed consolidated statements of comprehensive income.

(2) Represents the unrealized losses or gains recorded in earnings or other comprehensive income (loss) during the period for liabilities classified as Level 3 that are still held at the end of the period.

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Note 16—Derivative Instruments and Hedging Activities

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 this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable rate amounts from a counterparty in exchange for the Company making fixed rate payments over the life of the agreements without exchange of the underlying notional amount.

The effective portion of changes in the fair value of derivatives designated, and that qualify, as cash flow hedges is recorded in accumulated other comprehensive income (loss) in the accompanying condensed consolidated statement of stockholders’ equity and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. During the nine months ended September 30, 2014, such derivatives were used to hedge the variable cash flows associated with variable rate debt. The ineffective portion of changes in fair value of the derivatives is recognized directly in earnings. During the three and nine months ended September 30, 2014 and 2013, no gains or losses were recognized due to ineffectiveness of hedges of interest rate risk.

Amounts reported in accumulated other comprehensive income (loss) 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 $3,146,000 will be reclassified from accumulated other comprehensive income (loss) as an increase to interest expense.

See Note 15—“Fair Value” for a further discussion of the fair value of the Company’s derivative instruments.

The following table summarizes the notional amount and fair value of the Company’s derivative instruments (amounts in thousands):

Derivatives Designated as Hedging Instruments	Balance Sheet Location	Effective Dates	Maturity Dates	September 30, 2014							December 31, 2013
				Outstanding Notional Amount		Fair Value of					Outstanding Notional Amount		Fair Value of
						Asset		(Liability)					Asset		(Liability)
Interest rate swaps	Other assets/Accounts payable and other liabilities	10/12/2012 to 07/11/2014	10/11/2017 to 07/11/2019	$	262,719	$	550	$	(676	)	$	119,128	$	644	$	(44	)

Accounting for changes in the fair value of a derivative instrument depends on the intended use and designation of the derivative instrument. The Company designated the interest rate swaps as cash flow hedges to hedge the variability of the anticipated cash flows on its variable rate notes payable. The change in fair value of the effective portion of the derivative instrument that is designated as a hedge is recorded in other comprehensive income (loss), or OCI, in the accompanying condensed consolidated statements of comprehensive income.

The table below summarizes the amount of gain or losses recognized on interest rate derivatives designated as cash flow hedges for the three and nine months ended September 30, 2014 and 2013 (amounts in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
Derivatives in Cash Flow Hedging Relationships (Interest Rate Swaps)	2014			2013			2014			2013
Amount of (loss) income recognized in OCI on derivatives (effective portion)	$	(59	)	$	(683	)	$	(2,513	)	$	732
Amounts reclassified from accumulated other comprehensive income (loss) (effective portion)	$	841		$	189		$	1,787		$	521

Credit Risk-Related Contingent Features

The Company has agreements with each of its derivative counterparties that contain cross-default provisions, whereby if the Company defaults on certain of its unsecured indebtedness, then the Company could also be declared in default on its derivative obligations, resulting in an acceleration of payment thereunder.

In addition, the Company is exposed to credit risk in the event of non-performance by its derivative counterparties. The Company believes it mitigates its credit risk by entering into agreements with credit-worthy counterparties. The Company records credit risk valuation adjustments on its interest rate swaps based on the respective credit quality of the Company and the counterparty. As of September 30, 2014, the fair value of derivatives in a net liability position, including accrued interest but excluding any adjustment for nonperformance risk related to these agreements, was $988,000. As of September 30, 2014, there were no termination events or events of default related to the interest rate swaps.

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Tabular Disclosure Offsetting Derivatives

The Company has elected not to offset derivative positions in its condensed consolidated financial statements. The following table presents the effect on the Company’s financial position had the Company made the election to offset its derivative positions as of September 30, 2014 and December 31, 2013 (amounts in thousands):

Offsetting of Derivative Assets
	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Balance Sheet		Net Amounts of Assets Presented in the Balance Sheet		Gross Amounts Not Offset in the Balance Sheet				Net Amount
							Financial Instruments Collateral		Cash Collateral
September 30, 2014	$	550	$	—	$	550	$	—	$	—	$	550
December 31, 2013	$	644	$	—	$	644	$	—	$	—	$	644

Offsetting of Derivative Liabilities
	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Balance Sheet		Net Amounts of Liabilities Presented in the Balance Sheet		Gross Amounts Not Offset in the Balance Sheet				Net Amount
							Financial Instruments Collateral		Cash Collateral
September 30, 2014	$	676	$	—	$	676	$	—	$	—	$	676
December 31, 2013	$	44	$	—	$	44	$	—	$	—	$	44

The Company reports derivatives in the accompanying condensed consolidated balance sheets as other assets and accounts payable and other liabilities.

Note 17—Accumulated Other Comprehensive Income (Loss)

The following table presents a roll forward of amounts recognized in accumulated other comprehensive income (loss) by component for the nine months ended September 30, 2014 (amounts in thousands):

	Unrealized Loss on Derivative Instruments			Accumulated Other Comprehensive Income (Loss)
Balance as of December 31, 2013	$	600		$	600
Other comprehensive loss before reclassification		(2,513	)		(2,513	)
Amounts reclassified from accumulated other comprehensive income (loss) to net income (effective portion)		1,787			1,787
Other comprehensive loss		(726	)		(726	)
Balance as of September 30, 2014	$	(126	)	$	(126	)

The following table presents reclassifications out of accumulated other comprehensive income (loss) for the nine months ended September 30, 2014 (amounts in thousands):

Details about Accumulated Other Comprehensive Income (Loss) Components	Amounts Reclassified from Accumulated Other Comprehensive Income (Loss) to Net Income		Affected Line Items in the Condensed Consolidated Statements of Comprehensive Income
Interest rate swap contracts	$	1,787	Interest expense

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Note 18—Subsequent Events

Distributions Paid

On October 1, 2014, the Company paid aggregate distributions of $9,980,000 ($4,504,000 in cash and $5,476,000 in shares of the Company’s common stock pursuant to the DRIP), which related to distributions declared for each day in the period from September 1, 2014 through September 30, 2014. On November 3, 2014, the Company paid aggregate distributions of $10,343,000 ($4,663,000 in cash and $5,680,000 in shares of the Company’s common stock pursuant to the DRIP), which related to distributions declared for each day in the period from October 1, 2014 through October 31, 2014.

Chicago Data Center Loan

In connection with a loan originated on August 25, 2014, on October 1, 2014 the Company drew down $105,850,000 under this note payable.

Acquisition of Alpharetta Data Center II

On October 31, 2014, the Company completed the acquisition of a 100% fee simple interest in a data center, or the Alpharetta Data Center II, for a purchase price of $56,700,000, plus closing costs. The Company financed the purchase of the Alpharetta Data Center II using net proceeds from the Offering. The Alpharetta Data Center II is leased to a single tenant. With respect to this acquisition, the Company had not completed its initial fair value-based purchase allocation; it is therefore impractical to provide pro-forma information.

Distributions Declared

On November 6, 2014, the board of directors of the Company approved and declared a distribution to the Company’s stockholders of record as of the close of business on each day of the period commencing on December 1, 2014 and ending on February 28, 2015. The distributions will be calculated based on 365 days in the calendar year and equal to $0.001917808 per share of common stock, which will be equal to an annualized distribution rate of 7.0%, assuming a purchase price of $10.00 per share. The distributions declared for each record date in the December 2014, January 2015 and February 2015 periods will be paid in January 2015, February 2015 and March 2015, respectively. The distributions will be payable to stockholders from legally available funds therefor.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements, the notes thereto, and the other unaudited financial data included elsewhere in this Quarterly Report on Form 10-Q. The following discussion should also be read in conjunction with our audited consolidated financial statements, and the notes thereto, and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2013, as filed with the Securities and Exchange Commission, or the SEC, on March 19, 2014, or the 2013 Annual Report on Form 10-K.

The terms “we,” “our,” “us,” and the “Company” refer to Carter Validus Mission Critical REIT, Inc., Carter/Validus Operating Partnership, LP, all majority-owned subsidiaries and controlled subsidiaries.

Forward-Looking Statements

Certain statements contained in this Quarterly Report on Form 10-Q, other than historical facts, include forward-looking statements that reflect our expectations and projections about our future results, performance, prospects and opportunities. Such statements include, in particular, statements about our plans, strategies, and prospects and are subject to certain risks and uncertainties, as well as known and unknown risks, which could cause actual results to differ materially from those projected or anticipated. Therefore, such statements are not intended to be a guarantee of our performance in future periods. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as “may,” “will,” “would,” “could,” “should,” “expect,” “intend,” “anticipate,” “estimate,” “believe,” “continue,” or other similar words. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect our management’s view only as of the date this Quarterly Report on Form 10-Q is filed with the Securities and Exchange Commission, or the SEC. We make no representation or warranty (express or implied) about the accuracy of any such forward-looking statements contained in this Quarterly Report on Form 10-Q, and we do not undertake to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. See Item 1A. “Risk Factors” of our 2013 Annual Report on Form 10-K for a discussion of some, although not all, of the risks and uncertainties that could cause actual results to differ materially from those presented in our forward-looking statements.

Management’s discussion and analysis of financial condition and results of operations is based upon our condensed consolidated financial statements, which have been prepared in accordance with the generally accepted accounting principles in the United States, or GAAP. The preparation of these financial statements requires our management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On a regular basis, we evaluate these estimates. These estimates are based on management’s historical industry experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may differ from these estimates.

Overview

We were formed on December 16, 2009 under the laws of Maryland to acquire and operate a diversified portfolio of income producing commercial real estate. We may also invest in real estate related securities. We are a real estate investment trust, or a REIT, under the Internal Revenue Code of 1986, as amended, or the Code, for federal income tax purposes.

On March 23, 2010, we filed a registration statement on Form S-11 under the Securities Act of 1933, as amended, or the Securities Act, to conduct a best efforts initial public offering, or the Offering, in which we were offering to the public up to 150,000,000 shares of common stock at a price of $10.00 per share in our primary offering and up to 25,000,000 additional shares pursuant to a distribution reinvestment plan, or DRIP, under which our stockholders may elect to have distributions reinvested in additional shares at the higher of $9.50 per share or 95% of the of the fair market value per share as determined by our board of directors, for a maximum offering of up to $1,737,500,000. The SEC first declared our registration statement effective as of December 10, 2010.

On May 16, 2014, we reallocated 18,750,000 shares of common stock from the DRIP offering to the primary portion of the Offering. As a result of this reallocation, we were authorized to sell a maximum of 168,750,000 shares of common stock at a price of $10.00 per share, and up to 6,250,000 additional shares of common stock pursuant to the DRIP, under which our stockholders may elect to have distributions reinvested in additional shares at the higher of $9.50 per share or 95% of the of the fair market value per share as determined by our board of directors, for a maximum offering of up to $1,746,875,000.

On June 6, 2014, the Offering terminated. We raised $1,716,046,000 in gross proceeds from the Offering (including proceeds from the DRIP) before offering expenses, selling commissions and dealer manager fees.

On October 11, 2013, we filed with the SEC a registration statement on Form S-11 under the Securities Act with respect to a proposed follow-on offering of up to $240,000,000 of shares of common stock to be offered pursuant to a primary offering, and up to $10,000,000 of shares of common stock to be offered pursuant to the DRIP, or the Follow-On Offering. On July 11, 2014, we withdrew the registration statement related to the Follow-On Offering. We did not issue any shares in connection with the Follow-On Offering as it was not declared effective by the SEC.

26

On April 14, 2014, we filed a registration statement on Form S-3 under the Securities Act to register $100,000,000 in shares of common stock pursuant to the Second DRIP, which will offer existing stockholders a convenient method for purchasing additional shares of common stock by reinvesting cash distributions without paying any selling commissions, fees or service charges. The registration statement became effective with the SEC automatically upon filing; however, we did not commence offering shares pursuant to the Second DRIP until June 7, 2014 following the termination of the Offering. As of September 30, 2014, approximately 1,180,000 shares of common stock were issued pursuant to the Second DRIP. As of September 30, 2014, approximately 9,346,000 shares of common stock were remaining in the Second DRIP.

Substantially all of our operations are conducted through Carter/Validus Operating Partnership, LP, or our Operating Partnership. We are externally advised by Carter/Validus Advisors, LLC or our Advisor, pursuant to an advisory agreement, or the Advisory Agreement, between us and our Advisor, which is our affiliate. Our Advisor supervises and manages our day-to-day operations and selects the properties and real estate-related investments we acquire, subject to the oversight and approval of our board of directors. Our Advisor also provides marketing, sales and client services on our behalf. Our Advisor engages affiliated entities to provide various services to us. Our Advisor is managed by and is a subsidiary of our sponsor, Carter/Validus REIT Investment Management Company, LLC. We have no paid employees.

We currently operate through two reportable segments – data centers and medical facilities. As of September 30, 2014, we had completed acquisitions of 45 real estate investments (including two real estate investments owned through consolidated partnerships) comprised of 67 buildings and parking facilities and approximately 5,544,000 square feet of gross leasable area (excluding parking facilities), for an aggregate purchase price of $1,921,052,000. As of September 30, 2014, we had also invested in real estate-related notes receivables in the aggregate principal amount outstanding of $20,274,000.

Critical Accounting Policies

Our critical accounting policies were disclosed in our 2013 Annual Report on Form 10-K. There have been no material changes to our critical accounting policies as disclosed therein.

Interim Unaudited Financial Data

Our accompanying condensed consolidated financial statements have been prepared by us in accordance with GAAP in conjunction with the rules and regulations of the SEC. Certain information and footnote disclosures required for annual financial statements have been condensed or excluded pursuant to SEC rules and regulations. Accordingly, our accompanying condensed consolidated financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. Our accompanying condensed consolidated financial statements reflect all adjustments, which are, in our view, of a normal recurring nature and necessary for a fair presentation of our financial position, results of operations and cash flows for the interim period. Interim results of operations are not necessarily indicative of the results to be expected for the full year; such full year results may be less favorable. Our accompanying condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in our 2013 Annual Report on Form 10-K.

Qualification as a REIT

To maintain our qualification as a REIT, we must meet certain organizational and operational requirements, including a requirement to currently distribute at least 90.0% of our REIT taxable income to stockholders. As a REIT, we generally are not subject to federal income tax on taxable income that we distribute to our stockholders.

If we fail to maintain our qualification as a REIT in any taxable year, we will then be subject to federal income taxes on our taxable income at regular corporate rates and will not be permitted to qualify for treatment as a REIT for federal income tax purposes for four years following the year during which qualification is lost unless the Internal Revenue Service grants us relief under certain statutory provisions. Such an event could have a material adverse effect on our net income and net cash available for distribution to our stockholders.

Recently Issued Accounting Pronouncements

For a discussion of recently issued accounting pronouncements, see Note 2—“Summary of Significant Accounting Policies—Recently Issued Accounting Pronouncements” to our condensed consolidated financial statements that are a part of this Quarterly Report on Form 10-Q.

Segment Reporting

The Company reports its financial performance based on two reporting segments. See Note 14—“Segment Reporting” to the condensed consolidated financial statements for additional information on the Company’s two reporting segments.

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Results of Operations

Our results of operations are influenced by the timing of acquisitions, the operating performance of our real estate investments and our investments in real estate-related notes receivables. As of September 30, 2014, we owned 45 real estate investments, 43 of which were placed in operations. As of September 30, 2013, we owned 27 real estate investments, all of which were placed in operations. In addition, we had investments in real estate-related notes receivables, net of $20,350,000 and $54,080,000, respectively, as of September 30, 2014 and December 31, 2013.

Three Months Ended September 30, 2014 Compared to Three Months Ended September 30, 2013

Revenue. Revenue increased $24,547,000 to $42,393,000 for the three months ended September 30, 2014, as compared to $17,846,000 for the three months ended September 30, 2013. Revenue consisted of rental and parking revenue, tenant reimbursement revenue and real estate-related notes receivables interest income. Rental and parking revenue increased $25,113,000 to $38,486,000 for the three months ended September 30, 2014, as compared to $13,373,000 for the three months ended September 30, 2013, and tenant reimbursement revenue increased $1,627,000 to $4,164,000 for the three months ended September 30, 2014, as compared to $2,537,000 for the three months ended September 30, 2013. The increase in rental and parking revenue and tenant reimbursement revenue was primarily due to owning 43 operating real estate investments with leases in-place as of September 30, 2014 as compared to 27 operating real estate investments with leases in-place as of September 30, 2013. Real estate-related notes receivables interest income decreased $2,193,000 to $(257,000) for the three months ended September 30, 2014, as compared to $1,936,000 for the three months ended September 30, 2013. The decrease was primarily due to a decrease in real estate-related notes receivables income of $1,411,000 and loan commitment fees of $45,000 and an increase in loan origination fees of $737,000, which primarily related to expenses associated with amortization of loan origination fees in connection with the repayment of the Bay Area Preferred Equity Loan on July 11, 2014.

Rental and Parking Expenses. Rental and parking expenses increased $2,953,000 to $6,108,000 for the three months ended September 30, 2014, as compared to $3,155,000 for the three months ended September 30, 2013. The increase was primarily due to owning 43 operating real estate investments with leases in-place as of September 30, 2014, as compared to 27 operating real estate investments with leases in-place as of September 30, 2013, which resulted in increased utility costs of $1,012,000, increased property management fees of $1,108,000, increased administrative costs of $329,000, increased real estate taxes of $262,000 and increased other rental and parking expenses of $242,000.

General and Administrative Expenses. General and administrative expenses increased $872,000 to $1,411,000 for the three months ended September 30, 2014, as compared to $539,000 for the three months ended September 30, 2013. The increase was primarily due to an increase in allocated personnel costs and allocated overhead costs, which resulted in increased personnel costs and professional fees of $202,000, increased other administrative expenses of $592,000 and increased state taxes of $78,000.

Acquisition Related Expenses. Acquisition related expenses increased $2,685,000 to $4,087,000 for the three months ended September 30, 2014, as compared to $1,402,000 for the three months ended September 30, 2013. The increase primarily related to acquisition fees and expenses associated with the purchase of four real estate investments for an aggregate purchase price of $181,756,000 acquired during the three months ended September 30, 2014, which were determined to be business combinations. Acquisition fees and expenses associated with transactions determined to be business combinations are expensed as incurred. For the three months ended September 30, 2013, acquisition fees and expenses related to the acquisitions of four real estate investments for an aggregate purchase price of $46,702,000 that were determined to be business combinations. Pursuant to the advisory agreement, we pay an acquisition fee to our Advisor of 2.0% of the contract purchase price of each property or asset acquired. We also reimburse our Advisor for acquisition expenses incurred in the process of acquiring a property or in the origination or acquisition of a loan other than for personnel costs for which our Advisor receives acquisition fees.

Asset Management Fees. Asset management fees increased $3,621,000 to $4,078,000 for the three months ended September 30, 2014, as compared to $457,000 for the three months ended September 30, 2013. The increase in asset management fees related to an increase in the weighted average real estate-related investments of $943,258,000 as of September 30, 2014, compared to $346,228,000 as of September 30, 2013. For the three months ended September 30, 2014 and 2013, the Advisor waived irrevocably, without recourse, asset management fees of $0 and $682,000, respectively. For the three months ended September 30, 2014, the Advisor deferred receipt of $4,094,000 in asset management fees because the Company’s modified funds from operations did not exceed its distributions.

Depreciation and Amortization. Depreciation and amortization increased $8,275,000 to $13,002,000 for the three months ended September 30, 2014, as compared to $4,727,000 for the three months ended September 30, 2013. The increase was primarily due to an increase in the weighted average depreciable basis of real estate properties of $1,056,048,000 as of September 30, 2014, compared to $388,444,000 as of September 30, 2013.

Interest Expense. Interest expense increased $2,082,000 to $5,201,000 for the three months ended September 30, 2014, as compared to $3,119,000 for the three months ended September 30, 2013. The increase was due to increased interest expense on notes payable and the KeyBank Credit Facility (as defined below) of $2,732,000, and increased amortization expense of debt issue costs of $432,000, offset by increased interest income earned on deposits at banks in the amount of $251,000 and capitalized interest of $831,000. The increase in interest expense on notes payable and the KeyBank Credit Facility of $2,732,000 was due to having an

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outstanding balance on notes payable in the amount of $387,730,000 and an outstanding balance on the KeyBank Credit Facility of $75,000,000 as of September 30, 2014, as compared to an outstanding balance on notes payable in the amount of $168,425,000 and an outstanding balance on the KeyBank Credit Facility of $55,000,000 as of September 30, 2013. As of September 30, 2014 and 2013, the weighted average interest rate on notes payable and the KeyBank Credit Facility was 4.7%.

Nine Months Ended September 30, 2014 Compared to Nine Months Ended September 30, 2013

Revenue. Revenue increased $57,051,000 to $103,720,000 for the nine months ended September 30, 2014, as compared to $46,669,000 for the nine months ended September 30, 2013. Revenue consisted of rental and parking revenue, tenant reimbursement revenue and real estate-related notes receivables interest income. Rental and parking revenue increased $55,665,000 to $91,287,000 for the nine months ended September 30, 2014, as compared to $35,622,000 for the nine months ended September 30, 2013, and tenant reimbursement revenue increased $3,407,000 to $10,259,000 for the nine months ended September 30, 2014, as compared to $6,852,000 for the nine months ended September 30, 2013. The increase in rental and parking revenue and tenant reimbursement revenue was primarily due to owning 43 operating real estate investments with leases in-place as of September 30, 2014, as compared to 27 operating real estate investments with leases in-place as of September 30, 2013. Real estate-related notes receivables interest income decreased $2,021,000 to $2,174,000 for the nine months ended September 30, 2014, compared to $4,195,000 for the nine months ended September 30, 2013. The decrease was primarily due to a decrease in real estate-related notes receivables income of $618,000 and loan commitment fees of $689,000 and an increase in origination fees of $714,000, which primarily related to expenses associated with amortization of loan origination fees in connection with the repayment of the Bay Area Preferred Equity Loan on July 11, 2014.

Rental and Parking Expenses. Rental and parking expenses increased $5,903,000 to $14,429,000 for the nine months ended September 30, 2014, as compared to $8,526,000 for the nine months ended September 30, 2013. The increase was primarily due to owning 43 operating real estate investments with leases in-place as of September 30, 2014, as compared to 27 operating real estate investments with leases in-place as of September 30, 2013, which resulted in increased utility costs of $2,098,000, increased real estate taxes of $403,000, increased property management fees of $2,131,000, increased administrative costs of $896,000 and increased other rental and parking expenses of $375,000 for such period.

General and Administrative Expenses. General and administrative expenses increased $1,518,000 to $3,212,000 for the nine months ended September 30, 2014, as compared to $1,694,000 for the nine months ended September 30, 2013. The increase was primarily due to an increase in allocated personnel costs and allocated overhead costs, which resulted in increased personnel costs and professional fees of $633,000, increased state taxes of $135,000 and increased other administrative expenses of $750,000.

Acquisition Related Expenses. Acquisition related expenses increased $5,999,000 to $10,598,000 for the nine months ended September 30, 2014, as compared to $4,599,000 for the nine months ended September 30, 2013. The increase primarily related to acquisition fees and expenses associated with the purchase of eight real estate investments for an aggregate purchase price of $469,586,000 acquired during the nine months ended September 30, 2014, which were determined to be business combinations. Acquisition fees and expenses associated with transactions determined to be business combinations are expensed as incurred. For the nine months ended September 30, 2013, acquisition fees and expenses related to the acquisitions of eleven real estate investments for an aggregate purchase price of $147,602,000 that were determined to be business combinations. Pursuant to the advisory agreement, we pay an acquisition fee to our Advisor of 2.0% of the contract purchase price of each property or asset acquired. We also reimburse our Advisor for acquisition expenses incurred in the process of acquiring a property or in the origination or acquisition of a loan other than for personnel costs for which our Advisor receives acquisition fees.

Asset Management Fees. Asset management fees increased $7,455,000 to $9,538,000 for the nine months ended September 30, 2014, as compared to $2,083,000 for the nine months ended September 30, 2013. The increase in asset management fees related to an increase in the weighted average real estate-related investments of $943,258,000 as of September 30, 2014, compared to $346,228,000 as of September 30, 2013. For the nine months ended September 30, 2014 and 2013, the Advisor waived irrevocably, without recourse, asset management fees of $0 and $862,000, respectively. For the nine months ended September 30, 2014, the Advisor deferred receipt of $8,963,000 in asset management fees because the Company’s modified funds from operations did not exceed its distributions.

Depreciation and Amortization. Depreciation and amortization increased $18,684,000 to $31,275,000 for the nine months ended September 30, 2014, as compared to $12,591,000 for the nine months ended September 30, 2013. The increase was primarily due to an increase in the weighted average depreciable basis of real estate properties of $1,056,048,000 as of September 30, 2014, compared to $388,444,000 as of September 30, 2013.

Interest Expense. Interest expense increased $4,403,000 to $13,428,000 for the nine months ended September 30, 2014, as compared to $9,025,000 for the nine months ended September 30, 2013. The increase was due to increased interest expense on notes payable and the KeyBank Credit Facility of $5,144,000 and increased amortization expense of debt issue costs of $1,071,000, offset by increased interest income earned on deposits at banks in the amount of $450,000 and capitalized interest of $1,362,000. The increase in interest expense on notes payable and the KeyBank Credit Facility of $5,144,000 was due to having an outstanding balance on notes payable in the amount of $387,730,000 and an outstanding balance on the KeyBank Credit Facility of $75,000,000 as of September 30, 2014, as compared to an outstanding balance on notes payable in the amount of $168,425,000 and an outstanding balance on the KeyBank Credit Facility of $55,000,000 as of September 30, 2013. As of September 30, 2014 and 2013, the weighted average interest rate on notes payable and the KeyBank Credit Facility was 4.7%.

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Organization and Offering Costs

We reimbursed our Advisor or its affiliates for organization and offering costs it incurred on our behalf, but only to the extent the reimbursement did not cause the selling commissions, the dealer manager fee and the other organization and offering costs incurred by us to exceed 15% of gross offering proceeds as of the date of the reimbursement. As of September 30, 2014, since inception, we paid approximately $156,519,000 in selling commissions and dealer manager fees to our dealer manager and we reimbursed our Advisor or its affiliates approximately $14,207,000 in offering expenses, and incurred approximately $3,900,000 of other organization and offering costs. Other organizational and offering costs (other than selling commissions and dealer manager fees) were approximately $18,107,000, or 1.06%, of total gross offering proceeds which were $1,716,046,000.

Other organization costs were expensed as incurred and selling commissions and dealer manager fees were charged to stockholders’ equity as the amounts related to raising capital. For a further discussion of other organization and offering costs, see Note 12—“Related-Party Transactions and Arrangements” to the condensed consolidated financial statements that are a part of this Quarterly Report on Form 10-Q.

Real Estate-Related Notes Receivables, Net

We have invested, and may continue to invest, in notes receivables, including first mortgage loans, real estate-related bridge loans, construction loans and mezzanine loans. As of September 30, 2014, we had investments in three real estate-related notes receivables, which are intended to be held to maturity. As of September 30, 2014, the aggregate balance on the investments in real estate-related notes receivables, net was $20,350,000.

Liquidity and Capital Resources

Our principal demands for funds are for real estate and real estate-related investments, for the payment of acquisition related costs, capital expenditures, operating expenses, distributions and redemptions to stockholders and principal and interest on any current and any future indebtedness. Generally, cash needs for items other than acquisitions and acquisition related costs will be generated from operations of our current and future investments. We expect to utilize funds from the Second DRIP and future proceeds from secured and unsecured financings to complete future real estate-related investments. The Offering terminated on June 6, 2014. We expect to meet future cash needs for real estate-related investments from cash flows from operations and from debt financings. In addition, cash paid for distributions will be reduced due to the Second DRIP. The sources of our operating cash flows will be provided by the rental income received from current and future tenants of our leased properties. We raised $1,716,046,000 in gross proceeds from the Offering (including proceeds from the DRIP) before offering expenses, selling commissions and dealer manager fees.

Short-term Liquidity and Capital Resources

On a short-term basis, our principal demands for funds will be for the acquisition of real estate and real estate-related notes and investments and payments of tenant improvements, acquisition related costs, operating expenses, distributions, and interest and principal payments on current and future debt financings. We expect to meet our short-term liquidity requirements through net cash flows provided by operations, proceeds from the Second DRIP, as well as secured and unsecured borrowings from banks and other lenders to finance our expected future acquisitions. We expect our operating cash flows to increase as we acquire additional properties.

Long-term Liquidity and Capital Resources

On a long-term basis, our principal demands for funds will be for the acquisition of real estate and real estate-related investments and payments of tenant improvements, acquisition related costs, operating expenses, distributions and redemptions to stockholders, and interest and principal payments on current and future indebtedness.

We expect that substantially all cash flows from operations will be used to pay distributions to our stockholders after certain capital expenditures, however, we may use other sources to fund distributions, as necessary, such as, borrowing on the KeyBank Credit Facility and/or future borrowings on unencumbered assets. To the extent cash flows from operations are lower due to fewer properties being acquired or lower than expected returns on the properties held, distributions paid to stockholders may be lower. We expect that substantially all net cash flows from the Offering or debt financings will be used to fund acquisitions, certain capital expenditures identified at acquisition, repayments of outstanding debt or distributions to our stockholders in excess of cash flows from operations.

Capital Expenditures

We estimate that we will require approximately $1.8 million in expenditures for capital improvements over the next 12 months. We cannot provide assurances, however, that actual expenditures will not exceed these estimated expenditure levels. As of September 30, 2014, we had $2.7 million of restricted cash in lender controlled escrow reserve accounts for such capital expenditures.

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KeyBank Credit Facility

As of September 30, 2014, the maximum principal amount available under the KeyBank Credit Facility was $365,000,000, consisting of a $290,000,000 revolving line of credit, with a maturity date of May 28, 2017, subject to the Operating Partnership’s right to a 12-month extension, and $75,000,000 in term loans, with a maturity date of May 28, 2018, subject to the Operating Partnership’s right to a 12-month extension. The KeyBank Credit Facility can be increased to $500,000,000 under certain circumstances. Generally, proceeds of the KeyBank Credit Facility are used to acquire our real estate properties. See Note 9—“Credit Facility.”

The actual amount of credit available under the KeyBank Credit Facility is a function of certain loan-to-cost, loan-to-value, debt yield and debt service coverage ratios contained in the KeyBank Loan Agreement. The unencumbered pool availability under the KeyBank Credit Facility is equal to the maximum principal amount of the value of the assets that are included in the unencumbered pool. As of September 30, 2014, we had drawn down $75,000,000 under the KeyBank Credit Facility and we had an aggregate unencumbered pool availability of $290,000,000. The KeyBank Credit Facility agreement contains various affirmative and negative covenants that are customary for credit facilities and transactions of this type, including limitations on the incurrence of debt and limitations on distributions by the properties that are included in the unencumbered pool for the KeyBank Credit Facility in the event of a default. The KeyBank Credit Facility agreement also imposes the following financial covenants: (i) a maximum property value requirement; (ii) a maximum ratio of liabilities to asset value; (iii) a maximum daily distribution covenant; (iv) a minimum number of unencumbered pool properties in the unencumbered pool; (v) a minimum consolidated net worth; and (vi) a minimum unencumbered pool actual debt service coverage ratio. In addition, the KeyBank Credit Facility agreement includes events of default that are customary for credit facilities and transactions of this type. We believe we were in compliance with all financial covenant requirements at September 30, 2014.

Cash Flows

Operating Activities. During the nine months ended September 30, 2014, net cash provided by operations increased $36,869,000 to $53,347,000, as compared to $16,478,000 for the nine months ended September 30, 2013. The change was primarily due to our 2013 and 2014 acquisitions, which resulted in an increase in operating income from our properties, coupled with the deferral of asset management fees.

Investing Activities. Net cash used in investing activities increased $694,075,000 to $955,021,000 for the nine months ended September 30, 2014, as compared to $260,946,000 for the nine months ended September 30, 2013. The increase was primarily due to the acquisition of 14 commercial real estate investments for an aggregate purchase price of $952,950,000 during the nine months ended September 30, 2014, compared to the acquisition of 13 commercial real estate investments for an aggregate purchase price of $233,483,000 including acquisition costs capitalized related to asset acquisitions, during the nine months ended September 30, 2013; offset by a change in real estate-related notes receivables, net of $39,206,000 to $12,856,000 for the nine months ended September 30, 2014, compared to ($26,350,000) net, for the nine months ended September 30, 2013.

Financing Activities. Net cash provided by financing activities increased $679,053,000 to $969,406,000 for the nine months ended September 30, 2014, as compared to $290,353,000 for the nine months ended September 30, 2013. The change was primarily due to an increase in net proceeds from the issuance of common stock of $576,448,000, an increase in proceeds from noncontrolling interest in consolidated partnerships of $39,914,000, an increase in net borrowings on the credit facility and notes payable of $98,475,000; offset by an increase in net escrow funds of $8,385,000, an increase in distributions to noncontrolling interests in consolidated partnerships of $139,000, an increase in payments of deferred financing costs of $3,284,000, an increase in distributions to stockholders of $21,412,000 and an increase in repurchase of common stock of $2,564,000.

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Distributions

The amount of distributions payable to our stockholders is determined by our board of directors and is dependent on a number of factors, including funds available for distribution, financial condition, capital expenditure requirements and annual distribution requirements needed to maintain our status as a REIT under the Code. Our board of directors may reduce the amount of distributions paid or suspend distribution payments at any time and therefore distribution payments are not assured. Our Advisor may also defer, suspend and/or waive fees and expense reimbursements if we have not generated sufficient cash flow from our operations and other sources to fund distributions. Additionally, our organizational documents permit us to pay distributions from unlimited amounts of any source, and we may use sources other than operating cash flows to fund distributions, including proceeds from our Offering, which may reduce the amount of capital we ultimately invest in properties or other permitted investments.

We have funded distributions with operating cash flows from our properties and offering proceeds raised in our Offering. To the extent that we do not have taxable income, distributions paid will be considered a return of capital to stockholders. The following table shows distributions paid during the nine months ended September 30, 2014 and 2013:

	Nine Months Ended September 30, 2014					Nine Months Ended September 30, 2013
Distributions paid in cash - common stockholders	$	30,312,000				$	8,900,000
Distributions reinvested (shares issued)		33,684,000					7,452,000
Total distributions	$	63,996,000	(1)			$	16,352,000
Source of distributions:
Cash flows provided by operations (2)	$	30,312,000		47	%	$	8,900,000	54	%
Offering proceeds from issuance of common stock pursuant to the DRIP (2)		33,684,000		53	%		7,452,000	46	%
Total sources	$	63,996,000		100	%	$	16,352,000	100	%

(1) Total distributions declared but not paid as of September 30, 2014 were $10.0 million for common stockholders. These distributions were paid on October 1, 2014.

(2) Percentages were calculated by dividing the respective source amount by the total sources of distributions.

For the nine months ended September 30, 2014, we paid and declared distributions of approximately $64.0 million to common stockholders including shares issued pursuant to the DRIP, as compared to FFO (as defined below) and MFFO (as defined below) for the nine months ended September 30, 2014 of $47.1 million and $44.9 million, respectively. The payment of distributions from sources other than FFO or MFFO may reduce the amount of proceeds available for investment and operations or cause us to incur additional interest expense as a result of borrowed funds.

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Contractual Obligations

As of September 30, 2014, we had approximately $462,730,000 of debt outstanding, of which $387,730,000 related to notes payable and $75,000,000 related to the Key Bank Credit Facility. See Note 8—“Notes Payable” and Note 9—“Credit Facility” to the condensed consolidated financial statements that are a part of this Quarterly Report on Form 10-Q for certain terms of the debt outstanding. Our contractual obligations as of September 30, 2014 were as follows (amounts in thousands):

	Less than 1 Year		1-3 Years		3-5 Years		More than 5 Years		Total
Principal payments — fixed rate debt	$	2,736	$	30,285	$	50,536	$	51,445	$	135,002
Interest payments — fixed rate debt		6,313		12,963		7,178		7,039		33,493
Principal payments — variable rate debt fixed through interest rate swap agreements (1)		5,708		13,107		243,904		—		262,719
Interest payments — variable rate debt fixed through interest rate swap agreements (2)		11,415		24,939		14,509		—		50,863
Principal payments — variable rate debt		1,356		3,237		60,416		—		65,009
Interest payments — variable rate debt		2,081		4,407		2,881		—		9,369
Commitments — real estate-related notes receivables		3,850		—		—		—		3,850
Contingent consideration (3)		—		5,030		—		—		5,030
Tenant improvements		39,643		11,477		1,718		—		52,838
Total	$	73,102	$	105,445	$	381,142	$	58,484	$	618,173

(1) As of September 30, 2014, we had an aggregate of $262.7 million outstanding on notes payable and borrowings under the KeyBank Credit Facility that were fixed through the use of interest rate swap agreements.

(2) We used the fixed rates under our interest rate swap agreements as of September 30, 2014 to calculate the debt payment obligations in future periods.

(3) Contingent consideration represents our best estimate of the cash payments we will be obligated to make under contingent consideration arrangements with a former owner of a property we acquired if specified operating objectives are achieved by the acquired entity. Our maximum cash payment under this arrangement is $5,030,000 in 2016.

Off-Balance Sheet Arrangements

As of September 30, 2014, we had no off-balance sheet arrangements.

Related-Party Transactions and Arrangements

We have entered into agreements with our Advisor and its affiliates, whereby we agreed to pay certain fees to, or reimburse certain expenses of, our Advisor, or its affiliates, for acquisition fees and expenses, organization and offering expenses, sales commissions, dealer manager fees, asset and property management fees and reimbursement of operating costs. Refer to Note 12—“Related-Party Transactions and Arrangements” to our condensed consolidated unaudited financial statements included in this Quarterly Report on Form 10-Q for a detailed discussion of the various related-party transactions and agreements.

Funds from Operations and Modified Funds from Operations

One of our objectives is to provide cash distributions to our stockholders from cash generated by our operations. The purchase of real estate assets and real estate-investments, and the corresponding expenses associated with that process, is a key operational feature of our business plan in order to generate cash from operations. Due to certain unique operating characteristics of real estate companies, the National Association of Real Estate Investment Trusts, or NAREIT, an industry trade group, has promulgated a measure known as funds from operations, or FFO, which we believe is an appropriate supplemental measure to reflect the operating performance of a REIT. The use of FFO is recommended by the REIT industry as a supplemental performance measure. FFO is not equivalent to our net income (loss) as determined under GAAP.

We define FFO, consistent with NAREIT’s definition, as net income (loss) (computed in accordance with GAAP), excluding gains (or losses) from sales of property and asset impairment write-downs, plus depreciation and amortization of real estate assets, and after adjustments for unconsolidated partnership and joint ventures. Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect FFO on the same basis.

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We, along with the others in the real estate industry, consider FFO to be an appropriate supplemental measure of a REIT’s operating performance because it is based on a net income (loss) analysis of property portfolio performance that excludes non-cash items such as depreciation and amortization and asset impairment write-downs, which we believe provides a more complete understanding of our performance to investors and to our management, and when compared year over year, reflects the impact on our operations from trends in occupancy.

Historical accounting convention (in accordance with GAAP) for real estate assets requires companies to report its investment in real estate at its carrying value, which consists of capitalizing the cost of acquisitions, development, construction, improvements and significant replacements, less depreciation and amortization and asset impairment write-downs, if any, which is not necessarily equivalent to the fair market value of its investment in real estate assets.

The historical accounting convention requires straight-line depreciation of buildings and improvements, which implies that the value of real estate assets diminishes predictably over time, which could be the case if such assets are not adequately maintained or repaired and renovated as required by relevant circumstances and/or as requested or required by lessees for operational purposes in order to maintain the value disclosed. We believe that, since fair value of real estate assets historically rises and falls with market conditions including, but not limited to, inflation, interest rates, the business cycle, unemployment and consumer spending, presentations of operating results for a REIT using historical accounting for depreciation could be less informative.

In addition, we believe it is appropriate to disregard asset impairment write-downs as it is a non-cash adjustment to recognize losses on prospective sales of real estate assets. Since losses from sales of real estate assets are excluded from FFO, we believe it is appropriate that asset impairment write-downs in advancement of realization of losses should be excluded. Impairment write-downs are based on negative market fluctuations and underlying assessments of general market conditions, which are independent of our operating performance, including, but not limited to, a significant adverse change in the financial condition of our tenants, changes in supply and demand for similar or competing properties, changes in tax, real estate, environmental and zoning law, which can change over time. When indicators of potential impairment suggest that the carrying value of real estate and related assets may not be recoverable, we assess the recoverability by estimating whether we will recover the carrying value of the asset through undiscounted future cash flows and eventual disposition (including, but not limited to, net rental and lease revenues, net proceeds on the sale of property and any other ancillary cash flows at a property or group level under GAAP). If based on this analysis, we do not believe that we will be able to recover the carrying value of the real estate asset, we will record an impairment write-down to the extent that the carrying value exceeds the estimated fair value of the real estate asset. Testing for indicators of impairment is a continuous process and is analyzed on a quarterly basis. Investors should note, however, that determinations of whether impairment charges have been incurred are based partly on anticipated operating performance, because estimated undiscounted future cash flows from a property, including estimated future net rental and lease revenues, net proceeds on the sale of the property, and certain other ancillary cash flows, are taken into account in determining whether an impairment charge has been incurred. While impairment charges are excluded from the calculation of FFO as described above, investors are cautioned that due to the fact that impairments are based on estimated future undiscounted cash flows and that we intend to have a relatively limited term of our operations, it could be difficult to recover any impairment charges through the eventual sale of the property. No impairment losses have been recorded to date.

In developing estimates of expected future cash flow, we make certain assumptions regarding future market rental income amounts subsequent to the expiration of current lease arrangements, property operating expenses, terminal capitalization and discount rates, the expected number of months it takes to re-lease the property, required tenant improvements and the number of years the property will be held for investment. The use of alternative assumptions in the future cash flow analysis could result in a different determination of the property’s future cash flows and a different conclusion regarding the existence of an asset impairment, the extent of such loss, if any, as well as the carrying value of the real estate asset.

Publicly registered, non-listed REITs, such as ours, typically have a significant amount of acquisition activity and are substantially more dynamic during their initial years of investment and operations. While other start up entities may also experience significant acquisition activity during their initial years, we believe that publicly registered, non-listed REITs are unique in that they have a limited life with targeted exit strategies within a relatively limited time frame after the acquisition activity ceases. We will use the proceeds raised in our offering to acquire real estate assets and real estate-related investments, and we intend to begin the process of achieving a liquidity event (i.e., listing of our shares of common stock on a national securities exchange, a merger or sale, the sale of all or substantially all of our assets, or another similar transaction) within five years after the completion of our offering stage, which is generally comparable to other publicly registered, non-listed REITs. Thus, we do not intend to continuously purchase real estate assets and intend to have a limited life. Due to these factors and other unique features of publicly registered, non-listed REITS, the Investment Program Association, or the IPA, an industry trade group, has standardized a measure known as modified funds from operations, or MFFO, which we believe to be another appropriate supplemental measure to reflect the operating performance of a publicly registered, non-listed REIT. MFFO is a metric used by management to evaluate sustainable performance and dividend policy. MFFO is not equivalent to our net income (loss) as determined under GAAP.

We define MFFO, a non-GAAP measure, consistent with the IPA’s definition: FFO further adjusted for the following items included in the determination of GAAP net income (loss); acquisition fees and expenses; amounts related to straight-line rental income and amortization of above and below intangible lease assets and liabilities; accretion of discounts and amortization of premiums on debt investments; mark-to-market adjustments included in net income; nonrecurring gains or losses included in net income from the extinguishment or sale of debt, hedges, foreign exchange, derivatives or securities holdings where trading of such holdings is not a fundamental attribute of the business plan, unrealized gains or losses resulting from consolidation from, or deconsolidation to, equity

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accounting, adjustments related to contingent purchase price obligations where such adjustments have been included in the derivation of GAAP net income, and after adjustments for a consolidated and unconsolidated partnership and joint ventures, with such adjustments calculated to reflect MFFO on the same basis. Our MFFO calculation complies with the IPA’s Practice Guideline, described above. In calculating MFFO, we exclude paid and accrued acquisition fees and expenses that are reported in our condensed consolidated statements of comprehensive income (loss), amortization of above and below-market leases, amounts related to straight-line rents (which are adjusted in order to reflect such payments from a GAAP accrual basis to closer to an expected to be received cash basis of disclosing the rent and lease payments); and the adjustments of such items related to noncontrolling interests in the Operating Partnership. The other adjustments included in the IPA’s guidelines are not applicable to us.

Since MFFO excludes acquisition fees and expenses, it should not be construed as a historic performance measure. Acquisition fees and expenses are paid in cash by us, and we have not set aside or put into escrow any specific amount of proceeds from our offerings to be used to fund acquisition fees and expenses. Acquisition fees and expenses include payments to our Advisor or its affiliates and third parties. Such fees and expenses will not be reimbursed by our Advisor or its affiliates and third parties, and therefore if there are no further proceeds from the sale of shares of our common stock to fund future acquisition fees and expenses, such fees and expenses will need to be paid from either additional debt, operational earnings or cash flows, net proceeds from the sale of properties, or from ancillary cash flows. As a result, the amount of proceeds available for investment and operations would be reduced, or we may incur additional interest expense as a result of borrowed funds. Nevertheless, our Advisor or its affiliates will not accrue any claim on our assets if acquisition fees and expenses are not paid from the proceeds of our offerings. Under GAAP, acquisition fees and expenses related to the acquisition of properties determined to be business combinations are expensed as incurred, including investment transactions that are no longer under consideration, and are included in acquisition related expenses in the accompanying condensed consolidated statements of comprehensive income (loss) and acquisition fees and expenses associated with transactions determined to be an asset purchase are capitalized.

All paid and accrued acquisition fees and expenses have negative effects on returns to investors, the potential for future distributions, and cash flows generated by us, unless earnings from operations or net sales proceeds from the disposition of other properties are generated to cover the purchase price of the real estate asset, these fees and expenses and other costs related to such property. In addition, MFFO may not be an indicator of our operating performance, especially during periods in which properties are being acquired.

In addition, certain contemplated non-cash fair value and other non-cash adjustments are considered operating non-cash adjustments to net income (loss) in determining cash flows from operations in accordance with GAAP.

We use MFFO and the adjustments used to calculate it in order to evaluate our performance against other publicly registered, non-listed REITs, which intend to have limited lives with short and defined acquisition periods and targeted exit strategies shortly thereafter. As noted above, MFFO may not be a useful measure of the impact of long-term operating performance if we do not continue to operate in this manner. We believe that our use of MFFO and the adjustments used to calculate it allow us to present our performance in a manner that reflects certain characteristics that are unique to publicly registered, non-listed REITs, such as their limited life, limited and defined acquisition period and targeted exit strategy, and hence the use of such measures may be useful to investors. For example, acquisition fees and expenses are intended to be funded from the proceeds of our offering and other financing sources and not from operations. By excluding acquisition fees and expenses, the use of MFFO provides information consistent with management’s analysis of the operating performance of its real estate assets. Additionally, fair value adjustments, which are based on the impact of current market fluctuations and underlying assessments of general market conditions, but can also result from operational factors such as rental and occupancy rates, may not be directly related or attributable to our current operating performance. By excluding such charges that may reflect anticipated and unrealized gains or losses, we believe MFFO provides useful supplemental information.

Presentation of this information is intended to assist management and investors in comparing the operating performance of different REITs, although it should be noted that not all REITs calculate FFO and MFFO the same way, so comparisons with other REITs may not be meaningful. Furthermore, FFO and MFFO are not necessarily indicative of cash flow available to fund cash needs and should not be considered as an alternative to net income (loss) as an indication of our performance, as an indication of our liquidity, or indicative of funds available to fund our cash needs, including our ability to make distributions to our stockholders. FFO and MFFO should be reviewed in conjunction with other measurements as an indication of our performance. MFFO has limitations as a performance measure in an offering such as ours where the price of a share of common stock is stated value and there is no asset value determination during the offering stage for a period thereafter. MFFO may be useful in assisting management and investors in assessing the sustainability of operating performance in future operating periods, and in particular, after the offering and acquisition stages are complete and net asset value is disclosed. MFFO is not a useful measure in evaluating net asset value since impairment write-downs are taken into account in determining net asset value but not in determining MFFO.

FFO and MFFO, as described above, should not be construed to be more relevant or accurate than the current GAAP methodology in calculating net income (loss) or in its applicability in evaluating our operational performance. The method used to evaluate the value and performance of real estate under GAAP should be construed as a more relevant measure of operation performance and considered more prominently than the non-GAAP FFO and measures and the adjustments to GAAP in calculating FFO and MFFO. MFFO has not been scrutinized to the level of other similar non-GAAP performance measures by the SEC or any other regulatory body.

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The following is a reconciliation of net income/(loss) attributable to controlling interests, which is the most directly comparable GAAP financial measure, to FFO and MFFO for the three and nine months ended September 30, 2014 and 2013 (in thousands, except share data):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
Net income attributable to common stockholders	$	7,354		$	3,850		$	18,803		$	6,714
Adjustments:
Depreciation and amortization - real estate		13,002			4,727			31,275			12,591
Noncontrolling interests’ share of the above adjustments related to the consolidated partnerships		(1,294	)		(826	)		(2,956	)		(2,469	)
FFO	$	19,062		$	7,751		$	47,122		$	16,836
Adjustments:
Acquisition related expenses (1)	$	4,087		$	1,402		$	10,598		$	4,599
Amortization of above and below-market leases (2)		(1,043	)		(958	)		(3,002	)		(2,797	)
Straight-line rents (3)		(5,044	)		(1,311	)		(11,634	)		(3,631	)
Noncontrolling interests’ share of the above adjustments related to the consolidated partnerships		828	(4)		509	(5)		1,791	(6)		1,538	(7)
MFFO	$	17,890		$	7,393		$	44,875		$	16,545
Weighted average common shares outstanding - basic		172,914,286			46,757,918			133,908,958			34,925,951
Weighted average common shares outstanding - diluted		172,931,516			46,774,585			133,928,250			34,944,118
Net income per common share - basic	$	0.04		$	0.08		$	0.14		$	0.19
Net income per common share - diluted	$	0.04		$	0.08		$	0.14		$	0.19
FFO per common share - basic	$	0.11		$	0.17		$	0.35		$	0.48
FFO per common share - diluted	$	0.11		$	0.17		$	0.35		$	0.48

(1) In evaluating investments in real estate assets, management differentiates the costs to acquire the investment from the operations derived from the investment. Such information would be comparable only for publicly registered, non-listed REITs that have completed their acquisitions activities and have other similar operating characteristics. By excluding expensed acquisition related expenses, management believes MFFO provides useful supplemental information that is comparable for each type of real estate investment and is consistent with management’s analysis of the investing and operating performance of our properties. Acquisition fees and expenses include payments in cash to our Advisor and third parties. Acquisition fees and expenses incurred in a business combination, under GAAP, are considered operating expenses and as expenses included in the determination of net income (loss), which is a performance measure under GAAP. All paid and accrued acquisition fees and expenses will have negative effects on returns to investors, the potential for future distributions, and cash flows generated by us, unless earnings from operations or net sales proceeds from the disposition of properties are generated to cover the purchase price of the property, these fees and expenses and other costs related to the property.

(2) Under GAAP, certain intangibles are accounted for at cost and reviewed at least annually for impairment, and certain intangibles are assumed to diminish predictably in value over time and are amortized, similar to depreciation and amortization of real estate-related assets that are excluded from FFO. However, because real estate values and market lease rates historically rise or fall with market conditions, management believes that by excluding charges related to amortization of these intangibles, MFFO provides useful supplemental information on the performance of the real estate.

(3) Under GAAP, rental revenue is recognized on a straight-line basis over the terms of the related lease (including rent holidays if applicable). This may result in income recognition that is significantly different than the underlying contract terms. By adjusting for the change in deferred rent receivables, MFFO may provide useful supplemental information on the realized economic impact of lease terms, providing insight on the expected contractual cash flows of such lease terms, and aligns with our analysis of operating performance.

(4) Of this amount, $468,000 related to straight-line rents, $364,000 related to above and below-market leases and $(4,000) related to acquisition expenses.

(5) Of this amount, $145,000 related to straight-line rents and $364,000 related to above and below-market leases.

(6) Of this amount, $702,000 related to straight-line rents, $1,093,000 related to above and below-market leases and $(4,000) related to acquisition expenses.

(7) Of this amount, $445,000 related to straight-line rents and $1,093,000 related to above and below-market leases.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Market risk includes risks that arise from changes in interest rates, foreign currency exchange rates, commodity prices, equity prices and other market changes that affect market sensitive instruments. In pursuing our business plan, the primary market risk to which we are exposed is interest rate risk.

We have obtained variable rate debt financing to fund certain property acquisitions, and we are exposed to changes in the one-month LIBOR. Our objectives in managing interest rate risks seek to limit the impact of interest rate changes on operations and cash flows, and to lower overall borrowing costs. To achieve these objectives we will borrow primarily at interest rates with the lowest margins available and, in some cases, with the ability to convert variable interest rates to fixed rates.

We have entered, and may continue to enter, into derivative financial instruments, such as interest rate swaps, in order to mitigate our interest rate risk on a given variable rate financial instrument. To the extent we do, we are exposed to credit risk and market risk. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is positive, the counterparty owes us, which creates credit risk for us. When the fair value of a derivative contract is negative, we owe the counterparty and, therefore, it does not possess credit risk. Market risk is the adverse effect on the value of a financial instrument that results from a change in interest rates. We manage the market risk associated with interest rate contracts by establishing and monitoring parameters that limit the types and degree of market risk that may be undertaken. We have not entered, and do not intend to enter, into derivative or interest rate transactions for speculative purposes. We may also enter into rate-lock arrangements to lock interest rates on future borrowings.

As of September 30, 2014, we had eight fixed rate notes payable in the aggregate amount of $135.0 million, five variable rate notes payable in the aggregate amount of $133.2 million that were fixed through interest rate swap agreements, one variable rate note payable in the aggregate amount of $20.2 million, one note payable in the aggregate amount of $99.3 million, of which $74.5 million was fixed through an interest rate swap agreement and $24.8 million was variable rate and $75.0 million borrowed under the KeyBank Credit Facility, of which $55.0 million was fixed through interest rate swap agreements and $20.0 million was variable rate. As of September 30, 2014, the weighted average interest rate on notes payable and the KeyBank Credit Facility was 4.7%.

As of September 30, 2014, $65.0 million of the $462.7 million total debt outstanding was subject to variable interest rates with a weighted average interest rate of 3.41% per annum. As of September 30, 2014, an increase of 50 basis points in the market rates of interest would have resulted in a change in interest expense of $0.3 million per year, assuming all of our derivatives remained effective hedges.

As of September 30, 2014, we had nine interest rate swap agreements outstanding, which mature on various dates from October 2017 through July 2019, with an aggregate notional amount under the swap agreements of $262.7 million and an aggregate settlement value of $(0.5) million. The settlement value of these interest rate swap agreements is dependent upon existing market interest rates and swap spreads. As of September 30, 2014, an increase of 50 basis points in the market rates of interest would have resulted in an increase to the settlement value of these interest rate swaps of $4.2 million. These interest rate swaps were designated as hedging instruments.

We do not have any foreign operations and thus we are not exposed to foreign currency fluctuations.

Item 4. Controls and Procedures.

(a) Evaluation of disclosure controls and procedures. We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports pursuant to the Securities Exchange Act of 1934, as amended, or the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the rules and forms, and that such information is accumulated and communicated to us, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

As required by Rules 13a-15(b) and 15d-15(b) of the Exchange Act, an evaluation as of the end of the period covered by this Quarterly Report on Form 10-Q was conducted under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on this evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures, as of September 30, 2014, were effective.

(b) Changes in internal control over financial reporting. There were no changes in internal control over financial reporting that occurred during the most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION 

Item 1. Legal Proceedings.

We are not a party to any material pending legal proceedings.

Item 1A. Risk Factors.

There have been no material changes from the risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2013, as filed with the SEC on March 19, 2014, except as noted below.

Distributions paid from sources other than our cash flow from operations will result in us having fewer funds available for the acquisition of properties and other real estate-related investments, which may adversely affect our ability to fund future distributions with cash flow from operations and may adversely affect your overall return.

We have paid, and may continue to pay, distributions from sources other than from our cash flows from operations. For the nine months ended September 30, 2014, our cash flows provided by operations of approximately $53.3 million was a shortfall of $10.7 million, or 16.7%, of our distributions paid (total distributions were approximately $64.0 million, of which $30.3 million was cash and $33.7 million was reinvested in shares of our common stock pursuant to our DRIP) during such period and such shortfall was paid from proceeds from the Offering. For the year ended December 31, 2013, our cash flows provided by operations of approximately $25.7 million was a shortfall of $0.7 million, or 2.7%, of our distributions paid (total distributions were approximately $26.4 million, of which $14.2 million was cash and $12.2 million was reinvested in shares of our common stock pursuant to our DRIP) during such period and such shortfall was paid from proceeds from the Offering. Additionally, we may in the future pay distributions from sources other than from our cash flows from operations. Until we acquire additional properties or other real estate-related investments, we may not generate sufficient cash flows from operations to pay distributions. Our inability to acquire additional properties or other real estate-related investments may result in a lower return on your investment than you expect.

We do not have any limits on the sources of funding distribution payments to our stockholders. We may pay, and have no limits on the amounts we may pay, distributions from any source, such as from borrowings, the sale of assets, the sale of additional securities, advances from our advisor, our advisor’s deferral, suspension and/or waiver of its fees and expense reimbursements and offering proceeds. Funding distributions from borrowings could restrict the amount we can borrow for investments, which may affect our profitability. Funding distributions with the sale of assets may affect our ability to generate cash flows. Funding distributions from the sale of additional securities could dilute your interest in us if we sell shares of our common stock to third party investors. If we fund distributions from the proceeds of our Offering, we will have less funds available for acquiring properties or real estate-related investments. Our inability to acquire additional properties or real estate-related investments may have a negative effect on our investors’ ability to generate sufficient cash flow from operations to pay distributions. As a result, the return investors may realize on their investment may be reduced and investors who invest in us before we generate significant cash flow may realize a lower rate of return than later investors. Payment of distributions from any of the mentioned sources could restrict our ability to generate sufficient cash flow from operations, affect our profitability and/or affect the distributions payable upon a Liquidity Event, any or all of which may have an adverse effect on an investment in us.

As a result of the termination of the Offering, the following risk factors, which are included in our Annual Report on Form 10-K, are no longer material and are hereby deleted:

• Our dealer manager has limited experience in public offerings, which may affect the amount of funds it raises in the Offering.

• The offering price for our shares is not based on the book value or net asset value of our current expected investments or our current or expected operating income.

• Payment of fees and reimbursements to our Advisor and their affiliates reduces cash available for investment and distribution.

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Unregistered Sales of Equity Securities

During the three months ended September 30, 2014, we did not sell any equity securities that were not registered or otherwise exempt under the Securities Act of 1933, as amended.

Use of Public Offering Proceeds

On December 10, 2010, our Registration Statement on Form S-11 (File No. 333-165643), covering a public offering of up to 175.0 million shares of common stock, was declared effective under the Securities Act. We were offering a maximum of 150.0 million shares of common stock for $10.00 per share and up to 25.0 million shares of common stock pursuant to the DRIP for $9.50 per share, for a maximum offering of up to $1,737.5 million. On May 16, 2014, we reallocated 18.8 million shares of common stock from the DRIP offering to the primary portion of the Offering. As a result of this reallocation, the Offering offered up to a maximum of 168.8 million shares of common stock for $10.00 per share and up to 6.2 million shares of common stock pursuant to the DRIP for $9.50 per share, for a maximum offering of up to $1,746.9 million.

On June 6, 2014, we terminated the Offering. We had received subscriptions for gross proceeds of approximately $1,716.0 million. From the offering proceeds, we paid $36.2 million in acquisition fees to our Advisor, $11.7 million in acquisition related costs and $14.2 million in organization and offering costs to our Advisor and to SC Distributors as of September 30, 2014. With the remaining offering proceeds, joint venture equity and indebtedness, we acquired $1,896.6 million in total gross real estate. In addition, we invested an aggregate of $112.1 million in real estate-related notes receivables. As of September 30, 2014, a total of $48.9 million in distributions were reinvested in, and 5.2 million shares of common stock were issued, pursuant to the DRIP.

On October 11, 2013, we filed with the SEC a registration statement on Form S-11 under the Securities Act with respect to the Follow-On Offering of up to $240,000,000 of shares of common stock to be offered pursuant to a primary offering, and up to $10,000,000 of shares of common stock to be offered pursuant to the DRIP. On July 11, 2014, we withdrew the registration statement related to the Follow-On Offering. We did not issue any shares in connection with the Follow-On Offering as it was not declared effective by the SEC.

On April 14, 2014, we filed a registration statement on Form S-3 under the Securities Act to register $100,000,000 in shares of common stock pursuant to the Second DRIP, which will offer existing stockholders a convenient method for purchasing additional shares of common stock by reinvesting cash distributions without paying any selling commissions, fees or service charges. The registration statement became effective with the SEC automatically upon filing; however, we did not commence offering shares pursuant to the Second DRIP until June 7, 2014 following the termination of our offering. As of September 30, 2014, approximately 1,180,000 shares of common stock were issued pursuant to the Second DRIP. As of September 30, 2014, approximately 9,346,000 shares of common stock were remaining in the Second DRIP.

Share Repurchase Program

Effective as of December 10, 2010, our board of directors adopted a share repurchase program that enables our stockholders to sell their shares to us in limited circumstances. Our share repurchase program permits stockholders to sell their shares back to us after they have held them for at least one year, subject to certain conditions and limitations. We will limit the number of shares repurchased during any calendar year to 5.0% of the number of shares of our common stock outstanding on December 31 of the previous calendar year. In addition, the share repurchase program provides that all redemptions during any calendar year, including those upon death or a qualifying disability of a stockholder, are limited to those that can be funded with proceeds raised from the DRIP. Our board of directors has the right, in its sole discretion, to waive such holding requirement in the event of the death or qualifying disability of a stockholder, other involuntary exigent circumstances, such as bankruptcy, or a mandatory requirement under a stockholder’s IRA.

Prior to establishing the estimated value of our shares and unless the shares are being redeemed in connection with a stockholder’s death or qualifying disability (as defined below), the price per share that we will pay to repurchase shares of our common stock will be as follows:

• for stockholders who have continuously held their shares of our common stock for at least one year, the price will be 92.5% of the amount stockholder paid for each share;

• for stockholders who have continuously held their shares of our common stock for at least two years, the price will be 95.0% of the amount stockholder paid for each share;

• for stockholders who have continuously held their shares of our common stock for at least three years, the price will be 97.5% of the amount stockholder paid for each share; and

• for stockholders who have held their shares of our common stock for at least four years, the price will be 100.0% of the amount a stockholder paid continuously for each such share (in each case, as adjusted for any stock dividends, combinations, splits, recapitalizations and the like with respect to our common stock).

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During the three months ended September 30, 2014, we fulfilled the following redemption requests pursuant to our share repurchase program:

Period		Total Number of  Shares Redeemed		Average  Price Paid per Share		Total Numbers of Shares Purchased as Part of Publicly Announced Plans and Programs		Approximate Dollar Value of Shares Available that may yet be Redeemed under the Program
07/01/2014	07/31/2014		30,330	$	9.37		30,330	(1)
08/01/2014	08/31/2014		25,886	$	9.82		25,886	(1)
09/01/2014	09/30/2014		118,605	$	9.67		118,605	(1)
Total			174,821				174,821

(1) A description of the maximum number of shares that may be redeemed under our share repurchase program is included in the narrative preceding this table. During the three months ended September 30, 2014, we redeemed approximately $1,686,000 of common stock, which represented all redemption requests received in good order and eligible for redemption through the September 30, 2014 redemption date.

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Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

Item 6. Exhibits.

The exhibits listed on the Exhibit Index (following the signatures section of this Quarterly Report on Form 10-Q) are filed herewith, or incorporated by reference.

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SIGNATURES 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	CARTER VALIDUS MISSION CRITICAL REIT, INC. (Registrant)
Date: November 14, 2014	By	/S/    JOHN E. CARTER
		John E. Carter Chief Executive Officer and President (Principal Executive Officer)
Date: November 14, 2014	By	/S/    TODD M. SAKOW
		Todd M. Sakow Chief Financial Officer (Principal Financial Officer)

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EXHIBIT INDEX 

Pursuant to Item 601(a)(2) of Regulation S-K, this Exhibit Index immediately precedes the exhibits.

The following exhibits are included, or incorporated by reference, in this Quarterly Report on Form 10-Q for the nine months ended September 30, 2014 (and are numbered in accordance with Item 601 of Regulation S-K).

Exhibit No:
3.1	Articles of Amendment and Restatement (incorporated by reference to Registrant’s Pre-Effective Registration Statement on Form S-11, Commission File No. 333-165643, filed on November 16, 2010)
3.2	First Amendment to Articles of Amendment and Restatement (incorporated by reference to Registrant’s Current Report on Form 8-K filed on March 31, 2011)
3.3	Bylaws of Carter Validus Mission Critical REIT, Inc. (incorporated by reference to Registrant’s Pre-Effective Registration Statement on Form S-11, Commission No. 333-165643, filed on March 23, 2010)
3.4	Agreement of Limited Partnership of Carter/Validus Operating Partnership, LP (included as Exhibit 10.5 to the Registration Statement on Form S-11 (Registration No. 333-165643) filed on November 16, 2010, and incorporated herein by reference)
4.1	Distribution Reinvestment Plan (included as Appendix A to the prospectus dated April 14, 2014 attached to the Registration Statement on Form S-3, filed on April 14, 2014)
4.2	Carter Validus Mission Critical REIT, Inc. 2010 Restricted Share Plan (included as Exhibit 10.1 to our Current Report on Form 8-K filed on March 24, 2011, and incorporated herein by reference)
4.3	Form of Restricted Stock Award Agreement (included as Exhibit 10.6 to the Registration Statement on Form S-11 Registration No. 333-165643 filed on June 25, 2010, and incorporated herein by reference)
10.1	Joinder Agreement by HC-42570 South Airport Road, LLC, to KeyBank National Association, as Agent, dated March 14, 2014 (included as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on March 19, 2014, and incorporated herein by reference)
10.2	Assignment of Leases and Rents by HC-42570 South Airport Road, LLC to KeyBank National Association, dated March 14, 2014 (included as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed on March 19, 2014, and incorporated herein by reference)
10.3	Act of Mortgage, Security Agreement and Assignment of Leases and Rents by HC-42570 South Airport Road, LLC, as Mortgagor, to KeyBank National Association, as Agent, dated March 14, 2014 (included as Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed on March 19, 2014, and incorporated herein by reference)
10.4	Joinder Agreement by DC-1805 Center Park Drive, LLC, to KeyBank National Association, as Agent, dated April 28, 2014 (included as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on April 30, 2014, and incorporated herein by reference)
10.5	Assignment of Leases and Rents by DC-1805 Center Park Drive, LLC to KeyBank National Association, dated April 28, 2014 (included as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed on April 30, 2014, and incorporated herein by reference)
10.6	Deed of Trust, Security Agreement, Assignment of Leases and Rents and Fixture Filing by DC-1805 Center Park Drive, LLC, as Grantor, to KeyBank National Association, as Beneficiary, dated April 28, 2014 (included as Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed on April 30, 2014, and incorporated herein by reference)
10.7	Purchase Agreement, dated April 4, 2014, between Ascent CH2, LLC and Carter Validus Properties, LLC (included as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on May 21, 2014, and incorporated herein by reference)
10.8	Assignment of Purchase Agreement, dated May 14, 2014, between Carter Validus Properties, LLC, as Assignor, and DC-505 North Railroad Avenue, LLC, as Assignee (included as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed on May 21, 2014, and incorporated herein by reference)

43

10.9	Assignment and Assumption of Leases, dated May 20, 2014, between Ascent CH2, LLC, as Assignor, and DC-505 North Railroad Avenue, LLC, as Assignee (included as Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed on May 21, 2014, and incorporated herein by reference)
10.10	Second Amended and Restated Credit Agreement, by and among Carter/Validus Operating Partnership, LP, Carter Validus Mission Critical REIT, Inc., the guarantors and the lenders party thereto, dated May 28, 2014 (included as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on May 29, 2014, and incorporated herein by reference)
10.11	Joinder Agreement by DC-1099 Walnut Ridge Drive, LLC, to KeyBank National Association, as Agent, dated July 22, 2014 (included as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on July 28, 2014, and incorporated herein by reference)
10.12	Joinder Agreement by HC-116 Eddie Dowling Highway, LLC, to KeyBank National Association, as Agent, dated August 28, 2014 (included as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on September 2, 2014, and incorporated herein by reference)
10.13	Joinder Agreement by DC-1001 Windward Concourse, LLC, to KeyBank National Association, as Agent, dated September 5, 2014 (included as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on September 11, 2014, and incorporated herein by reference)
10.14	Joinder Agreement by HCP-Dermatology Associates, LLC, to KeyBank National Association, as Agent, dated September 15, 2014 (included as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on September 17, 2014, and incorporated herein by reference)
10.15	Joinder Agreement by HC-1101 Kaliste Saloom Road, LLC, to KeyBank National Association, as Agent, dated September 19, 2014 (included as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on September 24, 2014, and incorporated herein by reference)
10.16	Joinder Agreement by DC-615 North 48TH Street, LLC, to KeyBank National Association, as Agent, dated September 23, 2014 (included as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed on September 24, 2014, and incorporated herein by reference)
10.17	Joinder Agreement by DC-8521 East Princess Drive, LLC, to KeyBank National Association, as Agent, dated September 23, 2014 (included as Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed on September 24, 2014, and incorporated herein by reference)
10.18	Joinder Agreement by HCP-Select Medical, LLC, to KeyBank National Association, as Agent, dated September 23, 2014 (included as Exhibit 10.4 to the Registrant’s Current Report on Form 8-K filed on September 24, 2014, and incorporated herein by reference)
31.1*	Certification of Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*	Certification of Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1**	Certification of Chief Executive Officer and Chief Financial Officer of the Company, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*	XBRL Instance Document
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.

** Furnished 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 of 1933, as amended, or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.

44

EX-31.1

Exhibit 31.1

CHIEF EXECUTIVE OFFICER CERTIFICATION

I, John E. Carter, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Carter Validus Mission Critical REIT, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 14, 2014

/s/ John E. Carter

John E. Carter

Chief Executive Officer and President

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CHIEF FINANCIAL OFFICER CERTIFICATION

I, Todd M. Sakow, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Carter Validus Mission Critical REIT, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 14, 2014

/s/ Todd M. Sakow

Todd M. Sakow

Chief Financial Officer and Treasurer (Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATIONS OF PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C 1350)

Each of the undersigned officers of Carter Validus Mission Critical REIT, Inc. (the “Company”) hereby certifies, for purposes of Section 1350 of Chapter 63 of Title 18 of the United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to his knowledge:

(i) the accompanying Quarterly Report on Form 10-Q of the Company for the period ended September 30, 2014 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended, and

(ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 14, 2014
	By:	/s/ John E. Carter
	Name:	John E. Carter
	Title:	Chief Executive Officer and President
		(Principal Executive Officer)
Date: November 14, 2014
	By:	/s/ Todd M. Sakow
	Name:	Todd M. Sakow
	Title:	Chief Financial Officer and Treasurer
		(Principal Financial Officer)

The foregoing certification is being furnished with the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2014 pursuant to 18 U.S.C. Section 1350. It is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and it is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general information language in such filing, except to the extent that the Company specifically incorporates by reference.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

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Accumulated Other Comprehensive Income (Loss) (Tables)

9 Months Ended

Sep. 30, 2014

Accumulated Other Comprehensive Income (Loss) [Abstract]

Schedule of Amounts Recognized in Accumulated Other Comprehensive Income (Loss)

	Unrealized Loss on Derivative Instruments		Accumulated Other Comprehensive Income (Loss)
Balance as of December 31, 2013	$	600	$	600
Other comprehensive loss before reclassification		(2,513)		(2,513)
Amounts reclassified from accumulated other
comprehensive income (loss) to net income (effective portion)		1,787		1,787
Other comprehensive loss		(726)		(726)
Balance as of September 30, 2014	$	(126)	$	(126)

Schedule of Reclassifications Out of Accumulated Other Comprehensive Income (Loss)

Details about Accumulated Other Comprehensive Income (Loss) Components	Amounts Reclassified from Accumulated Other Comprehensive Income (Loss) to Net Income		Affected Line Items in the Condensed Consolidated Statements of Comprehensive Income
Interest rate swap contracts	$	1,787	Interest expense

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Credit Facility (Details) (USD $)	9 Months Ended			9 Months Ended		9 Months Ended		4 Months Ended	5 Months Ended	4 Months Ended	5 Months Ended		4 Months Ended	5 Months Ended	4 Months Ended	5 Months Ended	4 Months Ended	5 Months Ended		4 Months Ended	5 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2013	Sep. 30, 2014 KeyBank Credit Facility [Member]	May 28, 2014 KeyBank Credit Facility [Member]	Sep. 30, 2014 Revolving Line Of Credit [Member] KeyBank Credit Facility [Member]	Sep. 30, 2014 Term Loans [Member] KeyBank Credit Facility [Member]	Sep. 30, 2014 Minimum [Member] KeyBank Credit Facility [Member]	May 28, 2014 Minimum [Member] KeyBank Credit Facility [Member]	Sep. 30, 2014 Minimum [Member] LIBOR [Member] KeyBank Credit Facility [Member]	May 28, 2014 Minimum [Member] LIBOR [Member] KeyBank Credit Facility [Member]	Sep. 30, 2014 Minimum [Member] LIBOR [Member] Term Loans [Member]	Sep. 30, 2014 Minimum [Member] Base Rate [Member] KeyBank Credit Facility [Member]	May 28, 2014 Minimum [Member] Base Rate [Member] KeyBank Credit Facility [Member]	Sep. 30, 2014 Maximum [Member] KeyBank Credit Facility [Member]	May 28, 2014 Maximum [Member] KeyBank Credit Facility [Member]	Sep. 30, 2014 Maximum [Member] LIBOR [Member] KeyBank Credit Facility [Member]	May 28, 2014 Maximum [Member] LIBOR [Member] KeyBank Credit Facility [Member]	Sep. 30, 2014 Maximum [Member] LIBOR [Member] Term Loans [Member]	Sep. 30, 2014 Maximum [Member] Base Rate [Member] KeyBank Credit Facility [Member]	May 28, 2014 Maximum [Member] Base Rate [Member] KeyBank Credit Facility [Member]	Sep. 30, 2014 Weighted Average [Member] LIBOR [Member] Term Loans [Member]	Sep. 30, 2014 Variable Rate, Subject To Interest Rate Swap [Member] Term Loans [Member] KeyBank Credit Facility [Member]
Credit Facility [Line Items]
Aggregate maximum principal amount committed				$ 365,000,000	$ 225,000,000	$ 290,000,000	$ 75,000,000
Credit facility, maturity date						May 28, 2017	May 28, 2018
Credit facility, available extension period						12 months	12 months
Maximum principal amount after available increase				500,000,000
Margin percentage added to variable rate basis										1.75%	2.25%		0.75%	1.00%			2.25%	3.00%		1.25%	1.75%
Per annum rate fee percentage for unused portion of lenders' commitments								0.15%	0.20%						0.25%	0.30%
Threshold percentage for fee on unused portion of lenders' commitments				50.00%
Principal amount outstanding	75,000,000		152,000,000				75,000,000																55,000,000
Fixed interest rate through interest rate swap agreements												2.66%							3.16%			0.91%
Pay down of credit facility	97,000,000	18,000,000
Total unencumbered pool availability	365,000,000
Aggregate unencumbered pool availability	$ 290,000,000

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Future Minimum Rent (Narrative) (Details)	9 Months Ended
	Sep. 30, 2014
Future Minimum Rent [Abstract]
Weighted average remaining lease term	12 years 6 months

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Derivative Instruments and Hedging Activities (Narrative) (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Derivative Instruments and Hedging Activities [Abstract]
Gain (loss) recognized due to ineffectiveness of hedges of interest rate risk	$ 0	$ 0	$ 0	$ 0
Additional amount expected to be reclassified from AOCI into earnings during next twelve months	3,146,000		3,146,000
Fair value of derivatives in a net liability position	$ 988,000		$ 988,000

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Intangible Lease Liabilities, Net (Schedule of Intangible Lease Liabilities, Net) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended	12 Months Ended
	Sep. 30, 2014	Dec. 31, 2013
Intangible Lease Liabilities, Net [Abstract]
Below-market leases, net of accumulated amortization of $9,616 and $6,501, respectively (with a weighted average remaining life of 17.6 years and 18.5 years, respectively)	$ 56,688	$ 53,962
Ground leasehold liabilities, net of accumulated amortization of $22 and $0, respectively (with a weighted average remaining life of 44.4 years and 0 years, respectively)	5,303
Total intangible lease liabilities, net	61,991	53,962
Below-market leases, accumulated amortization	9,616	6,501
Below-market leases, weighted average remaining life	17 years 7 months 6 days	18 years 6 months
Ground leasehold liabilities, accumulated amortization	$ 22	$ 0
Ground leasehold liabilities, weighted average remaining life	44 years 4 months 24 days	0 years
Intangible lease liabilities, weighted average remaining life	19 years 10 months 24 days	18 years 6 months

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Investment in Real Estate-Related Notes Receivables, Net (Narrative) (Details) (USD $)	3 Months Ended		9 Months Ended			9 Months Ended			0 Months Ended
	Sep. 30, 2014 item	Sep. 30, 2013	Sep. 30, 2014 item	Sep. 30, 2013	Dec. 31, 2013	Sep. 30, 2014 Minimum [Member]	Sep. 30, 2014 Maximum [Member]	Sep. 30, 2014 Weighted Average [Member]	Jul. 11, 2014 Bay Area Preferred Equity Loan [Member]
Investment in Real Estate-Related Notes Receivables, Net [Line Items]
Number of investments in real estate-related notes receivables	3		3
Real estate-related notes receivables interest income	$ (257,000)	$ 1,936,000	$ 2,174,000	$ 4,195,000
Amortization of loan origination fees			1,167,000	(236,000)					766,000
Outstanding balance on real estate-related notes receivables, net	20,350,000		20,350,000		54,080,000
Per annum interest rate						8.00%	12.00%	8.60%
Impairment loss recorded on real estate-related notes receivables	0	0	0	0
Allowance recorded on real estate-related notes receivables	$ 0		$ 0		$ 0

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Intangible Lease Liabilities, Net (Tables)

9 Months Ended

Sep. 30, 2014

Intangible Lease Liabilities, Net [Abstract]

Schedule of Intangible Lease Liabilities, Net

	September 30, 2014		December 31, 2013
Below-market leases, net of accumulated amortization of $9,616 and $6,501, respectively (with a weighted average remaining life of 17.6 years and 18.5 years, respectively)	$	56,688	$	53,962
Ground leasehold liabilities, net of accumulated amortization of $22 and $0, respectively (with a weighted average remaining life of 44.4 years and 0 years, respectively)		5,303		-
	61,991		53,962

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Derivative Instruments and Hedging Activities (Schedule of Offsetting of Derivative Assets) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Derivative Instruments and Hedging Activities [Abstract]
Gross Amounts of Recognized Assets	$ 550	$ 644
Gross Amounts Offset in the Balance Sheet
Net Amounts of Assets presented in the Balance Sheet	550	644
Gross Amounts Not Offset in the Balance Sheet, Financial Instruments Collateral
Gross Amounts Not Offset in the Balance Sheet, Cash Collateral
Net Amount	$ 550	$ 644

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Related-Party Transactions and Arrangements (Narrative) (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Related Party Transaction [Line Items]
Selling commissions and dealer-manager fees			$ 90,665,000
Asset management fees	4,078,000	457,000	9,538,000	2,083,000
Cumulative non-compounded annual return rate to investors			8.00%
SC Distributors [Member]
Related Party Transaction [Line Items]
Selling commissions and dealer-manager fees	61,871,000	13,556,000	90,665,000	30,904,000
SC Distributors [Member] | Maximum [Member]
Related Party Transaction [Line Items]
Percentage of dealer-manager selling commission from gross offering proceeds			7.00%
Percentage of dealer-manager fee from gross offering proceeds			2.75%
Carter/Validus Advisors, LLC And/Or Its Affiliates [Member]
Related Party Transaction [Line Items]
Related parties offering expense reimbursement	144,000	3,068,000	1,135,000	7,604,000
Acquisition and advisory fee as a percentage of contract purchase price of each asset or loan the Company acquires or originates			2.00%
Maximum acquisition expense reimbursement to affiliates as a percentage of purchase price			6.00%
Acquisition fees paid	9,379,000	2,615,000	18,684,000	4,633,000
Advisory fee paid related to investments in notes receivables	136,000	707,000	293,000	1,004,000
Carter/Validus Advisors, LLC And/Or Its Affiliates [Member] | Maximum [Member]
Related Party Transaction [Line Items]
Percentage of offering expense reimbursement from gross offering proceeds			15.00%
Carter/Validus Advisors, LLC [Member]
Related Party Transaction [Line Items]
Percentage of annual asset management fee			1.00%
Percentage of aggregate asset value as monthly asset management fee			0.08333%
Asset management fees	4,078,000	457,000	9,538,000	2,083,000
Asset management fees waived irrevocably, without recourse	0	682,000	0	862,000
Deferred asset management fees	8,963,000		8,963,000
Indirect operating expenses incurred by advisor on Company's behalf	410,000	285,000	1,279,000	738,000
Reimbursement of operating expenses	438,000	239,000	1,364,000	710,000
Minimum number of properties required to sell to incur brokerage fee			1
Percentage of remaining net sales proceeds Advisor will receive after investors receive return			15.00%
Listing fee percentage			15.00%
Carter/Validus Advisors, LLC [Member] | Maximum [Member]
Related Party Transaction [Line Items]
Percentage of brokerage fees paid by Company in event advisor provides substantial amount of services			50.00%
Carter Validus Real Estate Management Services, LLC [Member]
Related Party Transaction [Line Items]
Leasing and management fees percentage of gross revenues from single-tenant properties			3.00%
Leasing and management fees percentage of gross revenues from multi-tenant properties			4.00%
Oversight fee payment to property manager as a percentage of property managed			1.00%
Property management fees incurred	$ 1,482,000	$ 374,000	$ 3,113,000	$ 982,000

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Accumulated Other Comprehensive Income (Loss) (Schedule of Reclassifications Out of Accumulated Other Comprehensive Income (Loss)) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income (Loss) [Line Items]
Interest expense	$ 257	$ (1,936)	$ (2,174)	$ (4,195)
Reclassification Out Of Accumulated Other Comprehensive Income (Loss) [Member] | Unrealized Loss On Derivative Instruments [Member] | Interest Rate Swaps [Member]
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income (Loss) [Line Items]
Interest expense			$ 1,787

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Subsequent Events (Details) (USD $)	3 Months Ended		9 Months Ended		0 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Oct. 01, 2014 Subsequent Event [Member] Chicago Data Center Loan [Member]	Oct. 31, 2014 Subsequent Event [Member] Alpharetta Data Center II [Member] customer	Oct. 01, 2014 Subsequent Event [Member] September 1, 2014 To September 30, 2014 [Member]	Nov. 03, 2014 Subsequent Event [Member] October 1, 2014 To October 31, 2014 [Member]	Nov. 06, 2014 Subsequent Event [Member] December 1, 2014 To February 28, 2015 [Member]	Nov. 06, 2014 Subsequent Event [Member] December 1, 2014 To February 28, 2015 [Member]
Subsequent Event [Line Items]
Aggregate distributions							$ 9,980,000	$ 10,343,000
Distributions paid in cash			30,312,000	8,900,000			4,504,000	4,663,000
Distributions reinvested in shares of common stock pursuant to DRIP			33,684,000	7,452,000			5,476,000	5,680,000
Proceeds from notes payable			191,466,000	14,000,000	105,850,000
Percentage of fee simple interest acquired						100.00%
Cash paid for investments in real estate			$ 952,950,000	$ 233,483,000		$ 56,700,000
Number of tenants						1
Number of days, distribution calculation									365 days
Distributions declared per common share	$ 0.18	$ 0.18	$ 0.52	$ 0.52					$ 0.001917808
Annualized distribution rate									7.00%
Assumed purchase price per share										$ 10.00

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Derivative Instruments and Hedging Activities (Schedule of the Notional Amount and Fair Value of Derivative Instruments) (Details) (USD $) In Thousands, unless otherwise specified									9 Months Ended
	Sep. 30, 2014	Dec. 31, 2013	Sep. 30, 2014 Interest Rate Swaps [Member] Designated as Hedging Instrument [Member]	Dec. 31, 2013 Interest Rate Swaps [Member] Designated as Hedging Instrument [Member]	Sep. 30, 2014 Other Assets [Member] Interest Rate Swaps [Member] Designated as Hedging Instrument [Member]	Dec. 31, 2013 Other Assets [Member] Interest Rate Swaps [Member] Designated as Hedging Instrument [Member]	Sep. 30, 2014 Accounts Payable and Other Liabilities [Member] Interest Rate Swaps [Member] Designated as Hedging Instrument [Member]	Dec. 31, 2013 Accounts Payable and Other Liabilities [Member] Interest Rate Swaps [Member] Designated as Hedging Instrument [Member]	Sep. 30, 2014 Minimum [Member] Interest Rate Swaps [Member] Designated as Hedging Instrument [Member]	Sep. 30, 2014 Maximum [Member] Interest Rate Swaps [Member] Designated as Hedging Instrument [Member]
Derivatives, Fair Value [Line Items]
Effective Dates									Oct. 12, 2012	Jul. 11, 2014
Maturity Dates									Oct. 11, 2017	Jul. 11, 2019
Outstanding Notional Amount			$ 262,719	$ 119,128
Fair Value of Asset	550	644			550	644
Fair Value of (Liability)	$ (676)	$ (44)					$ (676)	$ (44)

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Subsequent Events

9 Months Ended

Sep. 30, 2014

Subsequent Events [Abstract]

Subsequent Events

Note 18—Subsequent Events

Distributions Paid

On October 1, 2014, the Company paid aggregate distributions of $9,980,000($4,504,000 in cash and $5,476,000 in shares of the Company’s common stock pursuant to the DRIP), which related to distributions declared for each day in the period fromSeptember 1, 2014 through September 30, 2014. On November 3, 2014, the Company paid aggregate distributions of $10,343,000($4,663,000 in cash and $5,680,000 in shares of the Company’s common stock pursuant to the DRIP), which related to distributions declared for each day in the period from October 1, 2014 through October 31, 2014.

Chicago Data Center Loan

In connection with a loan originated on August 25, 2014, on October 1, 2014 the Company drew down $105,850,000 under this note payable.

Acquisition of Alpharetta Data Center II

On October 31, 2014, the Company completed the acquisition of a 100% fee simple interest in a data center, or the Alpharetta Data Center II, for a purchase price of $56,700,000, plus closing costs. The Company financed the purchase of the Alpharetta Data Center II using net proceeds from the Offering. The Alpharetta Data Center II is leased to a single tenant. With respect to this acquisition, the Company had not completed its initial fair value-based purchase allocation; it is therefore impractical to provide pro-forma information.

Distributions Declared

On November 6, 2014, the board of directors of the Company approved and declared a distribution to the Company’s stockholders of record as of the close of business on each day of the period commencing on December 1, 2014 and ending on February 28, 2015. The distributions will be calculated based on 365 days in the calendar year and equal to $0.001917808 per share of common stock, which will be equal to an annualized distribution rate of 7.0%, assuming a purchase price of $10.00 per share. The distributions declared for each record date in the December 2014, January 2015 and February 2015 periods will be paid in January 2015, February 2015 and March 2015, respectively. The distributions will be payable to stockholders from legally available funds therefor.

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Notes Payable (Narrative) (Details) (USD $)	9 Months Ended				9 Months Ended								9 Months Ended		0 Months Ended
	Sep. 30, 2014 loan	Sep. 30, 2013	Dec. 31, 2013	Dec. 31, 2012	Sep. 30, 2014 Note Payable One [Member] item	Sep. 30, 2014 Note Payable Two [Member]	Sep. 30, 2014 Note Payable Three [Member]	Sep. 30, 2014 Note Payable Four [Member]	Sep. 30, 2014 Notes Payable Five [Member] item	Sep. 30, 2014 Variable Rate, Subject To Interest Rate Swap [Member]	Dec. 31, 2013 Variable Rate, Subject To Interest Rate Swap [Member]	Sep. 30, 2014 Variable Rate, Subject To Interest Rate Swap [Member] Note Payable Four [Member]	Sep. 30, 2014 Period One [Member] Note Payable Four [Member]	Sep. 30, 2014 Period Two [Member] Note Payable Four [Member]	Oct. 01, 2014 Subsequent Event [Member] Notes Payable Five [Member]
Notes Payable [Line Items]
Number of notes payable originated during period	5
Notes payable originations during period	$ 297,316,000								$ 105,850,000
Proceeds from notes payable	191,466,000	14,000,000			20,466,000	34,000,000	37,000,000	100,000,000							105,850,000
Notes payable, issuance date					Jan. 27, 2014	Feb. 25, 2014	Feb. 26, 2014	Jul. 11, 2014	Aug. 21, 2014
Notes payable, variable rate basis					30-day London interbank offered rate, or LIBOR	30-day LIBOR	30-day LIBOR	30-day LIBOR	30-day LIBOR
Notes payable, basis spread on variable rate					3.35%	4.00%	2.25%		2.65%				4.50%	4.00%
Notes payable, maturity date					Jan. 26, 2019	Feb. 25, 2019	Feb. 26, 2019	Jul. 11, 2019	Aug. 21, 2017
Notes payable, number of extension periods					2				1
Notes payable, term of extension					12 months				24 months
Notes payable, fixed interest rate through interest rate swap agreement						6.20%	3.80%	6.30%
Notes payable, additional borrowing option							37,000,000
Notes payable, additional borrowing option maturity date							Feb. 26, 2015
Notes payable, length of interest rate period													18 months
Notes payable	$ 387,730,000	$ 168,425,000	$ 201,177,000	$ 156,847,000				$ 100,000,000		$ 207,719,000	$ 64,128,000	$ 75,000,000

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Real Estate Investments (Details) (USD $)	3 Months Ended		9 Months Ended				3 Months Ended	9 Months Ended					0 Months Ended	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014 Carter/Validus Advisors, LLC And/Or Its Affiliates [Member]	Sep. 30, 2013 Carter/Validus Advisors, LLC And/Or Its Affiliates [Member]	Sep. 30, 2014 2014 Real Estate Investments [Member]	Sep. 30, 2014 2014 Real Estate Investments [Member] property		Sep. 30, 2014 Business Combinations [Member] property	Sep. 30, 2014 Asset Acquisitions [Member] property		Jul. 11, 2014 Bay Area Regional Medical Center [Member]	Sep. 30, 2014 Bay Area Regional Medical Center [Member]	Jul. 11, 2014 Bay Area Regional Medical Center [Member]
Real Estate Investments [Line Items]
Maximum acquisition expense reimbursement to affiliates as a percentage of purchase price					6.00%
Acquisition fees and acquisition related costs paid					$ 22,878,000	$ 6,443,000
Acquisition fees and expenses	4,087,000	1,402,000	10,598,000	4,599,000			4,236,000	10,277,000
Acquisition fees and expenses capitalized during period	7,451,000	1,844,000	12,280,000	1,844,000
Number of acquisitions								14		8	6
Aggregate purchase price							977,980,000	977,980,000		469,586,000	508,394,000	[1]			198,000,000
Notes payable originations			191,466,000	14,000,000				134,000,000					100,000,000
Amount of purchase price funded by unaffiliated investors in exchange for ownership interest			39,914,000										39,900,000
Ownership percentage by unaffiliated investors															40.00%
Amount of purchase price funded by Operating Partnership in exchange for ownership interest			952,950,000	233,483,000				952,950,000	[2]				73,847,000
Ownership percentage by Operating Partnership															60.00%
Fair value of noncontrolling interest															39,900,000
Property management fee as percentage of net rental revenues														3.00%
Funding by Operating Partnership at request of tenant for additional funds for build out of property														$ 35,000,000

[1] Of this amount, $53,697,000 was allocated to intangible assets.

[2] In connection with the acquisition of two real estate investments, the Company obtained financing of $134,000,000, with the remaining balance of the purchase price paid using cash proceeds from the Offering.

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Accumulated Other Comprehensive Income (Loss) (Schedule of Amounts Recognized in Accumulated Other Comprehensive Income (Loss)) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2014
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance as of December 31, 2013	$ 600
Other comprehensive loss before reclassification	(2,513)
Amounts reclassified from accumulated other comprehensive income (loss) to net income (effective portion)	1,787
Other comprehensive loss	(726)
Balance as of September 30, 2014	(126)
Unrealized Loss On Derivative Instruments [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance as of December 31, 2013	600
Other comprehensive loss before reclassification	(2,513)
Amounts reclassified from accumulated other comprehensive income (loss) to net income (effective portion)	1,787
Other comprehensive loss	(726)
Balance as of September 30, 2014	$ (126)

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Fair Value (Tables)

9 Months Ended

Sep. 30, 2014

Fair Value [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

	September 30, 2014
	Fair Value Hierarchy
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value
Assets:
Derivative assets	$	—	$	550	$	—	$	550
Total assets at fair value	$	—	$	550	$	—	$	550
Liabilities:
Derivative liabilities	$	—	$	(676)	$	—	$	(676)
Contingent consideration obligations		—		—		(5,030)		(5,030)
Total liabilities at fair value	$	—	$	(676)	$	(5,030)	$	(5,706)
	December 31, 2013
	Fair Value Hierarchy
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value
Assets:
Derivative assets	$	—	$	644	$	—	$	644
Total assets at fair value	$	—	$	644	$	—	$	644
Liabilities:
Derivative liabilities	$	—	$	(44)	$	—	$	(44)
Total liabilities at fair value	$	—	$	(44)	$	—	$	(44)

Schedule of Reconciliation of Fair Value of Recurring Level 3 Fair Value Measurements

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2014		2013		2014		2013
Liabilities:
Contingent consideration obligations:
Beginning balance	$	5,030	$	—	$	—	$	—
Additions to contingent consideration obligations		—		—		5,030		—
Adjustment to contingent consideration obligations		—		—		—		—
Total (gains) losses included in earnings (1)		—		—		—		—
Settlements of contingent consideration obligations		—		—		—		—
Ending balance	$	5,030	$	—	$	5,030	$	—
Unrealized (gains) losses still held (2)	$	—	$	—	$	—	$	—

(1)Changes in the fair value of contingent consideration obligations are reported in acquisition related expenses in the accompanying condensed consolidated statements of comprehensive income.

(2)Represents the unrealized losses or gains recorded in earnings or other comprehensive income (loss) during the period for liabilities classified as Level 3 that are still held at the end of the period.

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Notes Payable (Schedule of Change in Carrying Amounts of Notes Payable) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2013	Dec. 31, 2012
Notes Payable [Abstract]
Notes payable, amount outstanding	$ 387,730	$ 168,425	$ 201,177	$ 156,847
Notes payable originations	191,466	14,000
Scheduled principal payments on notes payable	$ (4,913)	$ (2,422)

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Fair Value (Narrative) (Details) (USD $)	Sep. 30, 2014	Dec. 31, 2013
Fair Value [Line Items]
Contingent consideration obligations, maximum payout	$ 5,030,000
Contingent consideration obligations, minimum payout	0
Carrying Value [Member]
Fair Value [Line Items]
Real estate-related notes receivables, fair value disclosure	20,350,000	54,080,000
Carrying Value [Member] | Fixed Rate [Member]
Fair Value [Line Items]
Notes payable, fair value disclosure	135,002,000	137,049,000
Carrying Value [Member] | Variable Rate, Subject To Interest Rate Swap [Member]
Fair Value [Line Items]
Notes payable, fair value disclosure	207,719,000	64,128,000
Credit facility, fair value disclosure	55,000,000	55,000,000
Carrying Value [Member] | Variable Rate [Member]
Fair Value [Line Items]
Notes payable, fair value disclosure	45,009,000	0
Credit facility, fair value disclosure	20,000,000	97,000,000
Significant Other Observable Inputs (Level 2) [Member] | Estimated Fair Value [Member] | Fixed Rate [Member]
Fair Value [Line Items]
Notes payable, fair value disclosure	136,920,000	139,142,000
Significant Other Observable Inputs (Level 2) [Member] | Estimated Fair Value [Member] | Variable Rate, Subject To Interest Rate Swap [Member]
Fair Value [Line Items]
Notes payable, fair value disclosure	212,376,000	62,835,000
Credit facility, fair value disclosure	52,458,000	51,922,000
Significant Unobservable Inputs (Level 3) [Member] | Estimated Fair Value [Member]
Fair Value [Line Items]
Real estate-related notes receivables, fair value disclosure	20,350,000	58,176,000
Contingent consideration obligations	$ 5,030,000

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Business Combinations (Schedule of Allocation of Fair Value of Business Combinations) (Details) (Business Combinations [Member], USD $)	Sep. 30, 2014
Business Combinations [Member]
Summary of management's allocation of fair value of business combinations:
Land	$ 21,656,000
Buildings and improvements	409,131,000
In-place leases	45,621,000
Tenant improvements	1,803,000
Above-market leases	2,505,000
Total assets acquired	480,716,000
Below-market leases	(5,842,000)
Ground leasehold liabilities	(5,288,000)
Total liabilities acquired	(11,130,000)
Net assets acquired	$ 469,586,000

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Investment in Real Estate-Related Notes Receivables, Net (Schedule of Investment in Real Estate-Related Notes Receivables, Net) (Details) (USD $)	9 Months Ended		0 Months Ended		3 Months Ended		0 Months Ended	9 Months Ended				9 Months Ended				9 Months Ended				9 Months Ended				9 Months Ended
	Sep. 30, 2014	Dec. 31, 2013	Jul. 11, 2014 Bay Area Preferred Equity Loan [Member]	Mar. 25, 2014 Bay Area Preferred Equity Loan [Member]	Jul. 11, 2014 Bay Area Preferred Equity Loan [Member]	Jul. 10, 2014 Bay Area Preferred Equity Loan [Member]	Feb. 25, 2014 Walnut Hill Property Company Loan [Member]	Sep. 30, 2014 Medistar Loan [Member]		Dec. 31, 2013 Medistar Loan [Member]		Sep. 30, 2014 Variable Interest Entity, Not Primary Beneficiary [Member] Bay Area Preferred Equity Loan [Member]		Dec. 31, 2013 Variable Interest Entity, Not Primary Beneficiary [Member] Bay Area Preferred Equity Loan [Member]		Sep. 30, 2014 Variable Interest Entity, Not Primary Beneficiary [Member] Walnut Hill Property Company Loan [Member]		Dec. 31, 2013 Variable Interest Entity, Not Primary Beneficiary [Member] Walnut Hill Property Company Loan [Member]		Sep. 30, 2014 Variable Interest Entity, Not Primary Beneficiary [Member] MM Peachtree Holdings [Member]		Dec. 31, 2013 Variable Interest Entity, Not Primary Beneficiary [Member] MM Peachtree Holdings [Member]		Sep. 30, 2014 Variable Interest Entity, Not Primary Beneficiary [Member] Landmark Loan [Member]		Dec. 31, 2013 Variable Interest Entity, Not Primary Beneficiary [Member] Landmark Loan [Member]
Investment in Real Estate-Related Notes Receivables, Net [Line Items]
Interest rate								8.00%	[1],[2]			17.00%	[3],[4]			10.00%	[3],[5]			12.00%	[3]			9.00%	[2],[3]
Maturity date								Dec. 31, 2014				Nov. 30, 2018	[3]			Feb. 28, 2018	[3],[5]			Dec. 31, 2021	[3]			Dec. 17, 2015	[2],[3]
Outstanding balance on real estate-related notes receivables, net	$ 20,350,000	$ 54,080,000						$ 9,500,000	[1],[2]	$ 9,500,000	[1],[2]		[3]	$ 23,247,000	[3]		[3],[5]	$ 20,327,000	[3],[5]	$ 514,000	[3]	$ 514,000	[3]	$ 10,336,000	[2],[3]	$ 492,000	[2],[3]
Real estate-related notes receivables, additions				5,000,000
Real estate-related notes receivables, borrowing amount						27,500,000
Real estate-related notes receivables, interest rate on additions					10.00%
Real estate-related notes receivables, principal and accrued interest collected			29,401,000
Real estate-related notes receivables converted to investment in real estate	$ 20,000,000						$ 20,000,000

[1] The Medistar Loan, previously known as the Walnut Hill Bridge Loan, matures upon the earlier to occur of: (i) the sale or refinancing of the property under construction for which proceeds from the loan were used and (ii) December 31, 2014.

[2] As of September 30, 2014, an affiliate of the Company had an option to purchase the respective property under construction when the construction is completed.

[3] Unconsolidated VIE. The maximum exposure to loss related to the Company’s variable interest in unconsolidated VIEs is limited to the outstanding balances of the respective real estate-related notes receivables. The Company may be subject to additional losses to the extent of any receivables relating to future funding.

[4] On March 25, 2014, the Company increased the aggregate borrowing amount by $5,000,000 to $27,500,000. The additional $5,000,000 bore interest at a per annum rate equal to 10.0%. On July 11, 2014, in connection with the acquisition of the Bay Area Regional Medical Center, located in Webster, Texas, the borrower paid off the outstanding principal and accrued interest in the amount of $29,401,000 on the Bay Area Preferred Equity Loan.

[5] On February 25, 2014, in connection with the acquisition of the Walnut Hill Medical Center, located in Dallas, Texas the Company applied the Walnut Hill Property Company Loan outstanding principal amount of $20,000,000 to reduce the cash paid at acquisition.

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Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2014

Summary of Significant Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Note 2—Summary of Significant Accounting Policies

The summary of significant accounting policies presented below is designed to assist in understanding the Company’s condensed consolidated financial statements. Such condensed consolidated financial statements and the accompanying notes thereto are the representation of management. The accompanying condensed consolidated unaudited financial statements of the Company have been prepared in accordance with the generally accepted accounting principles in the United States, or GAAP, for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments, consisting of normal and recurring nature considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2014 are not necessarily indicative of the results that may be expected for the year ending December 31, 2014.

The condensed consolidated balance sheet at December 31, 2013 has been derived from the audited consolidated financial statements at that date but does not include all of the information and notes required by GAAP for complete financial statements. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the Company’s audited consolidated financial statements as of and for the year ended December 31, 2013 and related notes thereto set forth in the Company’s Annual Report on Form 10-K, filed with the SEC on March 19, 2014.  

Principles of Consolidation and Basis of Presentation

The accompanying condensed consolidated financial statements include the accounts of the Company, the Operating Partnership, all majority-owned subsidiaries and controlled subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of the financial statements in conformity with GAAP necessarily 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 condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Concentration of Credit Risk and Significant Leases

As of September 30, 2014, the Company had cash on deposit, including restricted cash, in 11 financial institutions, 10 of which had deposits in excess of current federally insured levels totaling $87.3 million; however, the Company has not experienced any losses in such accounts. The Company limits its cash investments to financial institutions with high credit standing; therefore, the Company believes it is not exposed to any significant credit risk on its cash deposits. To date, the Company has experienced no loss or lack of access to cash in its accounts. Concentration of credit risk with respect to accounts receivable from tenants is limited.

As of September 30, 2014, the Company owned real estate investments in 33 metropolitan statistical areas, or MSAs, (including two real estate investments owned through consolidated partnerships), one of which accounted for 10.0% or more of rental revenue. Real estate investments located in the Dallas-Ft. Worth-Arlington, Texas area accounted for an aggregate of 18.6% of rental revenue for the nine months ended September 30, 2014.

As of September 30, 2014, the Company had one tenant that accounted for 10.0% or more of rental revenue. The leases with AT&T Services, Inc. accounted for 21.0% of rental revenue for the nine months ended September 30, 2014.

Share Repurchase Program

The Company approved a share repurchase program that allows for repurchases of shares of the Company’s common stock when certain criteria are met. The share repurchase program provides that all redemptions during any calendar year, including those upon death or a qualifying disability of a stockholder, are limited to those that can be funded with proceeds raised from the DRIP.

Repurchases of shares of the Company’s common stock are at the sole discretion of the Company’s board of directors. In addition, the Company’s board of directors, at its sole discretion, may amend, suspend, reduce, terminate or otherwise change the share repurchase program upon 30 days’ prior notice to the Company’s stockholders for any reason it determines appropriate. During the nine months ended September 30, 2014, the Company received valid redemption requests related to approximately 295,000 shares of common stock, all of which were redeemed for an aggregate purchase price of approximately $2,837,000 (an average of $9.62 per share). During the nine months ended September 30, 2013, the Company received valid redemption requests related to approximately 29,000 shares of common stock, all of which were redeemed for an aggregate purchase price of approximately $273,000 (an average of $9.41 per share).

Earnings Per Share

Basic earnings per share attributable for all periods presented are computed by dividing net income attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Shares of non-vested restricted common stock give rise to potentially dilutive shares of common stock. Diluted earnings per share are computed based on the weighted average number of shares outstanding and all potentially dilutive securities. Diluted earnings per share reflect the effect of approximately 17,000 shares and 17,000 shares for the three months ended September 30, 2014 and 2013, respectively, and 19,000 shares and 18,000 shares for the nine months ended September 30, 2014 and 2013, respectively, of non-vested shares of restricted common stock that were outstanding as of such period.

Interest Capitalization

Interest incurred related to the renovation of acquired real estate investments is capitalized during the renovation period. The Company capitalized interest of approximately $831,000 and $1,362,000 for the three and nine months ended September 30, 2014, respectively, and $0 for the three and nine months ended September 30, 2013.

Recently Issued Accounting Pronouncements

In April 2014, the financial accounting standards board, or the FASB, issued ASU 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, or ASU 2014-08. ASU 2014-08 changes the criteria for reporting discontinued operations while enhancing disclosures in this area. Under the new guidance, only disposals representing a strategic shift in operations should be presented as discontinued operations. Those strategic shifts should have a major effect on the company’s operations and financial results. Examples include a disposal of a major geographic area, a major line of business, or a major equity method investment. Additionally, the new guidance requires expanded disclosures about discontinued operations that will provide financial statement users with more information about the assets, liabilities, income, and expenses of discontinued operations. The adoption of ASU 2014-08 is effective prospectively for reporting periods beginning on or after December 15, 2014. The Company does not expect the adoption of ASU 2014-08 to have a material effect on the Company’s condensed consolidated financial statements.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, or ASU 2014-09. The objective of ASU 2014-09 is to clarify the principles for recognizing revenue and to develop a common revenue standard for GAAP. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods and 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. ASU 2014-09 defines a five-step process to achieve this core principle, which may require more judgment and estimates within the revenue recognition process than are required under existing GAAP. The adoption of ASU 2014-09 is effective retrospectively for reporting periods beginning after December 15, 2016. Early adoption of ASU 2014-09 is not permitted. The Company is in the process of evaluating the impact ASU 2014-09 will have on the Company’s consolidated financial statements.

Reclassifications

Certain prior period amounts have been reclassified to conform to the current financial statement presentation, with no effect on the Company’s condensed consolidated financial position or results of operations.

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Business Combinations (Schedule of Business Combinations on a Pro Forma Basis) (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Pro forma basis:
Revenues	$ 45,110,000	$ 30,803,000	$ 125,144,000	$ 90,065,000
Net income	12,812,000	10,416,000	37,760,000	28,479,000
Net income attributable to common stockholders	11,660,000	9,820,000	35,323,000	27,041,000
Acquisition related expenses	4,087,000	1,402,000	10,598,000	4,599,000
2014 Real Estate Investments [Member]
Pro forma basis:
Acquisition related expenses	$ 4,236,000		$ 10,277,000

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Real Estate Investments (Schedule of Cash Paid for Investments in Real Estate) (Details) (USD $)	9 Months Ended
	Sep. 30, 2014		Sep. 30, 2013
Real Estate Investments [Line Items]
Real estate-related notes receivables converted to investment in real estate	$ 20,000,000
Contingent consideration	5,030,000
Cash paid for investments in real estate	952,950,000		233,483,000
Purchase price financed	191,466,000		14,000,000
2014 Real Estate Investments [Member]
Real Estate Investments [Line Items]
Aggregate purchase price	977,980,000
Real estate-related notes receivables converted to investment in real estate	20,000,000
Contingent consideration	5,030,000	[1]
Cash paid for investments in real estate	952,950,000	[2]
Number of properties financed	2
Purchase price financed	134,000,000
Business Combinations [Member]
Real Estate Investments [Line Items]
Aggregate purchase price	469,586,000
Asset Acquisitions [Member]
Real Estate Investments [Line Items]
Aggregate purchase price	508,394,000	[3]
Purchase price allocated to intangible assets	$ 53,697,000

[1] Liabilities for contingent consideration are measured at fair value each reporting period with the acquisition-date fair value included as part of the consideration transferred, and subsequent changes to fair value will be recorded within earnings. See Note 15—“Fair Value” for information about fair value measurements of contingent consideration liabilities.

[2] In connection with the acquisition of two real estate investments, the Company obtained financing of $134,000,000, with the remaining balance of the purchase price paid using cash proceeds from the Offering.

[3] Of this amount, $53,697,000 was allocated to intangible assets.

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Other Assets (Tables)

9 Months Ended

Sep. 30, 2014

Other Assets [Abstract]

Schedule of Other Assets

	September 30, 2014		December 31, 2013
Deferred financing costs, net of accumulated amortization of $3,643
and $1,750, respectively	$	11,954	$	6,800
Lease commissions, net of accumulated amortization of $40
and $21, respectively		313		203
Investments in unconsolidated partnerships		108		116
Accounts receivable		2,356		1,025
Straight-line rent receivable		19,536		7,902
Restricted cash held in escrow		13,910		5,246
Real estate escrow deposits		250		5
Restricted cash		1,370		1,142
Derivative assets		550		644
Accrued interest receivable from real estate-related notes receivables		152		1,850
Prepaid and other assets		1,999		919
	$	52,498	$	25,852

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Acquired Intangible Assets, Net (Tables)

9 Months Ended

Sep. 30, 2014

Acquired Intangible Assets, Net [Abstract]

Schedule of Acquired Intangible Assets, Net

	September 30, 2014		December 31, 2013
In-place leases, net of accumulated amortization of $16,816 and $7,954, respectively (with a weighted average remaining life of 15.2years and 14.6 years, respectively)	$	199,796	$	109,342
Above-market leases, net of accumulated amortization of $439 and $294, respectively (with a weighted average remaining life of 11.6 years and 8.6 years, respectively)		3,207		846
Ground lease interest, net of accumulated amortization of $119 and $78, respectively (with a weighted average remaining life of 61.4years and 62.8 years, respectively)		2,696		2,700
	$	205,699	$	112,888

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Commitments and Contingencies (Details)	Sep. 30, 2014 claim
Commitments and Contingencies [Abstract]
Number of material pending legal proceedings to which the Company is a party	0

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Acquired Intangible Assets, Net (Schedule of Acquired Intangible Assets, Net) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended	12 Months Ended
	Sep. 30, 2014	Dec. 31, 2013
Acquired Intangible Assets, Net [Line Items]
Acquired intangible asset, net of accumulated amortization	$ 205,699	$ 112,888
Acquired intangible asset, weighted average remaining life	15 years 9 months 18 days	15 years 8 months 12 days
In-place leases [Member]
Acquired Intangible Assets, Net [Line Items]
Acquired intangible asset, net of accumulated amortization	199,796	109,342
Acquired intangible asset, accumulated amortization	16,816	7,954
Acquired intangible asset, weighted average remaining life	15 years 2 months 12 days	14 years 7 months 6 days
Above-market leases [Member]
Acquired Intangible Assets, Net [Line Items]
Acquired intangible asset, net of accumulated amortization	3,207	846
Acquired intangible asset, accumulated amortization	439	294
Acquired intangible asset, weighted average remaining life	11 years 7 months 6 days	8 years 7 months 6 days
Ground lease interest [Member]
Acquired Intangible Assets, Net [Line Items]
Acquired intangible asset, net of accumulated amortization	2,696	2,700
Acquired intangible asset, accumulated amortization	$ 119	$ 78
Acquired intangible asset, weighted average remaining life	61 years 4 months 24 days	62 years 9 months 18 days

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Investment in Real Estate-Related Notes Receivables, Net (Tables)

9 Months Ended

Sep. 30, 2014

Investment in Real Estate-Related Notes Receivables, Net [Abstract]

Schedule of Investment in Real Estate-Related Notes Receivables, Net

				Outstanding Balance as of
Real Estate-Related Notes Receivables, Net	Interest Rate		Maturity Date	September 30, 2014		December 31, 2013
Bay Area Preferred Equity Loan (1)	17.0%	(4)	11/30/18	$	—	$	23,247
Walnut Hill Property Company Loan (1),(5)	10.0%		02/28/18		—		20,327
Medistar Loan (3)	8.0%		(2)		9,500		9,500
MM Peachtree Holdings (1)	12.0%		12/31/21		514		514
Landmark Loan (1),(3)	9.0%		12/17/15		10,336		492
				$	20,350	$	54,080

(1)Unconsolidated VIE.The maximum exposure to loss related to the Company’s variable interest in unconsolidated VIEs is limited to the outstanding balances of the respective real estate-related notes receivables. The Company may be subject to additional losses to the extent of any receivables relating to future funding.

(2)The Medistar Loan, previously known as the Walnut Hill Bridge Loan, matures upon the earlier to occur of: (i) the sale or refinancing of the property under construction for which proceeds from the loan were used and (ii) December 31, 2014.  

(3)As of September 30, 2014, an affiliate of the Company had an option to purchase the respective property under construction when the construction is completed.

(4)On March 25, 2014, the Company increased the aggregate borrowing amount by $5,000,000 to $27,500,000. The additional $5,000,000 bore interest at a per annum rate equal to 10.0%. On July 11, 2014, in connection with the acquisition of the Bay Area Regional Medical Center, located in Webster, Texas, the borrower paid off the outstanding principal and accrued interest in the amount of $29,401,000 on the Bay Area Preferred Equity Loan.

(5)On February 25, 2014, in connection with the acquisition of the Walnut Hill Medical Center, located in Dallas, Texas the Company applied the Walnut Hill Property Company Loan outstanding principal amount of $20,000,000 to reduce the cash paid at acquisition.

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Future Minimum Rent (Tables)

9 Months Ended

Sep. 30, 2014

Future Minimum Rent [Abstract]

Schedule of Future Minimum Rental Income from Non-Cancelable Operating Leases

Year	Amount
Three months ending December 31, 2014	$	37,552
2015		152,031
2016		154,060
2017		156,628
2018		159,735
Thereafter		1,744,210
	$	2,404,216

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Organization and Business Operations

9 Months Ended

Sep. 30, 2014

Organization and Business Operations [Abstract]

Organization and Business Operations

Note 1—Organization and Business Operations

Carter Validus Mission Critical REIT, Inc., or the Company, a Maryland corporation, was incorporated on December 16, 2009 and currently is treated and qualifies as a real estate investment trust, or a REIT, under the Internal Revenue Code of 1986, as amended, or the Code, for federal income tax purposes. The Company was organized to acquire and operate a diversified portfolio of income producing commercial real estate, with a focus on the data center and medical sectors, net leased to investment grade and other creditworthy tenants, as well as to make other real estate investments that relate to such property types. The Company operates through two reportable segments – data centers and medical facilities.

On March 23, 2010, the Company filed a registration statement on Form S-11 under the Securities Act of 1933, as amended, or the Securities Act, to offer for sale to the public on a “best efforts” basis a maximum of 150,000,000 shares of common stock at a price of $10.00 per share, and up to 25,000,000 additional shares of common stock pursuant to a distribution reinvestment plan, or DRIP, under which the Company’s stockholders may elect to have distributions reinvested in additional shares at the higher of $9.50 per share or 95% of the fair market value per share as determined by the Company’s board of directors, or the Offering, for a maximum offering of up to $1,737,500,000. The registration statement for the Offering was first declared effective by the Securities and Exchange Commission, or the SEC, on December 10, 2010.

On May 16, 2014, the Company reallocated $187,500,000in shares of common stock from the DRIP offering to the primary  offering. As a result, the Company was authorized to sell a maximum of 168,750,000 shares of common stock at a price of $10.00 per share, and up to 6,250,000 additional shares of common stock pursuant to the DRIP, for a maximum offering of up to $1,746,875,000.  

On June 6, 2014, the Offering terminated. The Company raised gross proceeds of approximately $1,716,046,000 in the Offering (including shares of common stock pursuant to the DRIP).

On April 14, 2014, the Company filed a registration statement on Form S-3 under the Securities Act to register $100,000,000 in shares of common stock pursuant to the DRIP, or the Second DRIP, which will offer existing stockholders a convenient method for purchasing additional shares of common stock by reinvesting cash distributions without paying any selling commissions, fees or service charges. The registration statement became effective with the SEC automatically upon filing; however, the Company did not commence offering shares pursuant to the Second DRIP until June 7, 2014 following the termination of the Offering. As of September 30, 2014, approximately 1,180,000 shares of common stock were issued pursuant to the Second DRIP. As of September 30, 2014, approximately 9,346,000 shares of common stock were remaining in the Second DRIP.

On October 11, 2013, the Company filed with the SEC a registration statement on Form S-11 under the Securities Act with respect to a proposed follow-on offering of up to $240,000,000 of shares of common stock to be offered pursuant to a primary offering, and up to $10,000,000 of shares of common stock to be offered pursuant to the DRIP, or the Follow-On Offering.  On July 11, 2014, the Company withdrew the registration statement related to the Follow-On Offering. The Company did not issue any shares in connection with the Follow-On Offering as it was not declared effective by the SEC.

Substantially all of the Company’s business is conducted through Carter/Validus Operating Partnership, LP, a Delaware limited partnership, or the Operating Partnership. The Company is the sole general partner of the Operating Partnership. Carter/Validus Advisors, LLC, or the Advisor, the Company’s affiliated advisor, is the sole limited partner of the Operating Partnership.

The Advisor acts as the Company’s advisor pursuant to an advisory agreement, as amended, or the Advisory Agreement. The Advisor is responsible for managing the Company’s affairs on a day-to-day basis, identifying and making acquisitions and investments on the Company’s behalf and making recommendations as to dispositions of assets. The Company’s board of directors exercises its fiduciary duties in reviewing these recommendations and determining whether to approve or reject proposed transactions. The Advisor also provides asset management, marketing, investor relations and other administrative services on the Company’s behalf. The Advisory Agreement has a term ofone-year and is reconsidered on an annual basis by the board of directors. The Company has no employees and relies upon the Advisor to provide substantially all services.  

Carter Validus Real Estate Management Services, LLC, or the Property Manager, a wholly owned subsidiary of Carter/Validus REIT Investment Management Company, LLC, the Company’s sponsor, serves as the Company’s property manager. SC Distributors, LLC, or the Dealer Manager, was organized in March 2009 and served as the dealer manager for the Offering. On August 29, 2014, Validus/Strategic Capital Partners (now Strategic Capital Management Holdings, LLC), the indirect parent of the Dealer Manager, was acquired by RCS Capital Corp. There has been no impact to the operations of the Company as a result of this transaction. The Dealer Manager received compensation and fees for services related to the Offering. The Advisor, and the Property Manager received, and will receive, fees during the acquisition and operational stages and will receive fees during the liquidation stage of the Company.  

Except as the context otherwise requires, “we,” “our,” “us,” and the “Company” refer to Carter Validus Mission Critical REIT, Inc., the Operating Partnership, all majority-owned subsidiaries and controlled subsidiaries.

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Notes Payable (Tables)

9 Months Ended

Sep. 30, 2014

Notes Payable [Abstract]

Schedule of Notes Payable

	September 30, 2014		December 31, 2013
Fixed rate notes payable	$	135,002	$	137,049
Variable rate notes payable		45,009		—
Variable rate notes payable fixed through interest rate swaps		207,719		64,128
Total notes payable	$	387,730	$	201,177

As of September 30, 2014, the notes payable had interest rates ranging from 3.5% to 6.3% and a weighted average interest rate of 5.1%. The notes payablemature on various dates from August 2016 through April 2022.

Schedule of Change in Carrying Amounts of Notes Payable

	Nine Months Ended
	September 30,
	2014		2013
Beginning balance	$	201,177	$	156,847
Additions:
Notes payable originations		191,466		14,000
Deductions:
Scheduled principal payments on notes payable		(4,913)		(2,422)
Ending Balance	$	387,730	$	168,425

Schedule of Future Principal Payments Due on Notes Payable

Year	Principal Payments		Balloon Payments		Amount
Three months ending December 31, 2014	$	2,620	$	—	$	2,620
2015		10,799		—		10,799
2016		10,797		13,441		24,238
2017		10,161		74,325		84,486
2018		8,299		45,405		53,704
Thereafter		6,422		205,461		211,883
	$	49,098	$	338,632	$	387,730

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Organization and Business Operations (Details) (USD $)	9 Months Ended		0 Months Ended	42 Months Ended						4 Months Ended				9 Months Ended
	Sep. 30, 2014 segment	Dec. 31, 2013	May 16, 2014 Offering [Member]	Jun. 06, 2014 Offering [Member]	Dec. 10, 2010 Offering [Member] Distribution Reinvestment Plan [Member]	May 16, 2014 Offering [Member] Maximum [Member]	Dec. 10, 2010 Offering [Member] Maximum [Member]	May 16, 2014 Offering [Member] Maximum [Member] Distribution Reinvestment Plan [Member]	Dec. 10, 2010 Offering [Member] Maximum [Member] Distribution Reinvestment Plan [Member]	Sep. 30, 2014 Second DRIP [Member]	Apr. 14, 2014 Second DRIP [Member] Maximum [Member]	Oct. 11, 2013 Follow-on Offering [Member] Maximum [Member]	Oct. 11, 2013 Follow-on Offering [Member] Maximum [Member] Distribution Reinvestment Plan [Member]	Sep. 30, 2014 Common Stock [Member]	May 16, 2014 Common Stock [Member] Offering [Member]	Dec. 10, 2010 Common Stock [Member] Offering [Member]	Dec. 10, 2010 Common Stock [Member] Offering [Member] Distribution Reinvestment Plan [Member]
Organization and Business Operations [Line Items]
Number of reportable business segments	2
Common stock offering, shares authorized	300,000,000	300,000,000				168,750,000	150,000,000	6,250,000	25,000,000
Common stock offering, price per share															$ 10.00	$ 10.00	$ 9.50
Reinvestment in additional shares at percentage of fair market value per share					95.00%
Common stock offering, value						$ 1,746,875,000	$ 1,737,500,000				$ 100,000,000	$ 240,000,000	$ 10,000,000
Common stock reallocated from DRIP offering to primary offering			187,500,000
Common stock offering, gross proceeds raised				$ 1,716,046,000
Issuance of common stock under the distribution reinvestment plan, shares										1,180,000				3,545,598
Remaining shares of common stock under the distribution reinvestment plan										9,346,000

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Notes Payable (Schedule of Future Principal Payments Due on Notes Payable) (Details) (USD $)	Sep. 30, 2014	Dec. 31, 2013	Sep. 30, 2013	Dec. 31, 2012
Principal payments due on notes payable:
Three months ending December 31, 2014	$ 2,620,000
2015	10,799,000
2016	24,238,000
2017	84,486,000
2018	53,704,000
Thereafter	211,883,000
Total	387,730,000	201,177,000	168,425,000	156,847,000
Principal Payments [Member]
Principal payments due on notes payable:
Three months ending December 31, 2014	2,620,000
2015	10,799,000
2016	10,797,000
2017	10,161,000
2018	8,299,000
Thereafter	6,422,000
Total	49,098,000
Balloon Payments [Member]
Principal payments due on notes payable:
Three months ending December 31, 2014
2015
2016	13,441,000
2017	74,325,000
2018	45,405,000
Thereafter	205,461,000
Total	$ 338,632,000

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Derivative Instruments and Hedging Activities (Schedule of Gains or Losses Recognized on Derivative Instruments) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Derivative Instruments, Gain (Loss) [Line Items]
Amount of (loss) income recognized in OCI on derivatives (effective portion)			$ (2,513)
Amounts reclassified from accumulated other comprehensive income (loss) (effective portion)			1,787
Interest Rate Swaps [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount of (loss) income recognized in OCI on derivatives (effective portion)	(59)	(683)	(2,513)	732
Amounts reclassified from accumulated other comprehensive income (loss) (effective portion)	$ 841	$ 189	$ 1,787	$ 521

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Condensed Consolidated Balance Sheets (USD $)	Sep. 30, 2014	Dec. 31, 2013
Real estate:
Land ($4,280 and $4,280 related to VIE)	$ 142,374,000	$ 92,052,000
Buildings and improvements ($95,695 and $95,529 related to VIE)	1,588,185,000	791,574,000
Construction in process	54,971,000
Acquired intangible assets ($16,189 and $16,189 related to VIE)	223,073,000	121,214,000
Total real estate, gross	2,008,603,000	1,004,840,000
Less: accumulated depreciation and amortization ($11,689 and $8,419 related to VIE)	(59,018,000)	(27,619,000)
Total real estate, net ($104,475 and $107,579 related to VIE)	1,949,585,000	977,221,000
Cash and cash equivalents ($261 and $411 related to VIE)	75,243,000	7,511,000
Real estate-related notes receivables, net	20,350,000	54,080,000
Other assets ($5,372 and $3,968 related to VIE)	52,498,000	25,852,000
Total assets	2,097,676,000	1,064,664,000
Liabilities:
Notes payable ($53,216 and $53,746 related to VIE)	387,730,000	201,177,000
Credit facility	75,000,000	152,000,000
Accounts payable due to affiliates ($69 and $15 related to VIE)	9,645,000	696,000
Accounts payable and other liabilities ($1,773 and $1,411 related to VIE)	31,709,000	15,546,000
Intangible lease liabilities, less accumulated amortization of $9,638 and $6,501, respectively ($14,937 and $16,410 related to VIE)	61,991,000	53,962,000
Total liabilities	566,075,000	423,381,000
Stockholders' equity:
Preferred stock, $0.01 par value per share, 50,000,000 shares authorized; none issued and outstanding
Common stock, $0.01 par value per share, 300,000,000 shares authorized; 173,807,656 and 73,238,145 shares issued, respectively; 173,411,808 and 73,137,569 shares outstanding, respectively	1,735,000	731,000
Additional paid-in capital	1,542,201,000	641,019,000
Accumulated distributions in excess of earnings	(84,177,000)	(33,154,000)
Accumulated other comprehensive (loss) income	(126,000)	600,000
Total stockholders' equity	1,459,633,000	609,196,000
Noncontrolling interests	71,968,000	32,087,000
Total equity	1,531,601,000	641,283,000
Total liabilities and stockholders' equity	$ 2,097,676,000	$ 1,064,664,000

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Other Assets (Schedule of Other Assets) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Other Assets [Abstract]
Deferred financing costs, net of accumulated amortization of $3,643 and $1,750, respectively	$ 11,954	$ 6,800
Lease commissions, net of accumulated amortization of $40 and $21, respectively	313	203
Investments in unconsolidated partnerships	108	116
Accounts receivable	2,356	1,025
Straight-line rent receivable	19,536	7,902
Restricted cash held in escrow	13,910	5,246
Real estate escrow deposits	250	5
Restricted cash	1,370	1,142
Derivative assets	550	644
Accrued interest receivable from real estate-related notes receivables	152	1,850
Prepaid and other assets	1,999	919
Total other assets	52,498	25,852
Deferred financing costs, accumulated amortization	3,643	1,750
Lease commissions, accumulated amortization	$ 40	$ 21

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Condensed Consolidated Statements Of Cash Flow (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Cash flows from operating activities:
Consolidated net income	$ 21,240	$ 8,151
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	31,275	12,591
Amortization of deferred financing costs	1,893	822
Amortization of intangible lease assets	145	120
Amortization of intangible lease liabilities	(3,147)	(2,917)
Amortization of origination costs and commitment fees	1,167	(236)
Straight-line rent	(11,634)	(3,631)
Stock-based compensation	68	51
Changes in operating assets and liabilities:
Accounts payable and other liabilities	4,635	3,302
Accounts payable due to affiliates	8,949	9
Other assets	(1,244)	(1,784)
Net cash provided by operating activities	53,347	16,478
Cash flows from investing activities:
Investment in real estate	(952,950)	(233,483)
Development expenditures	(13,074)	(378)
Investment in real estate-deposits	(1,560)	573
Other deposits		(167)
Real estate-related notes receivables advances	(14,644)	(63,650)
Collections of real estate-related notes receivables	27,500	37,300
Origination costs net of commitment fees related to real estate-related notes receivables	(293)	(1,141)
Net cash used in investing activities	(955,021)	(260,946)
Cash flows from financing activities:
Proceeds from notes payable	191,466	14,000
Payments on notes payable	(4,913)	(2,422)
Proceeds from credit facility	20,000	17,500
Payments of credit facility	(97,000)	(18,000)
Payments of deferred financing costs	(7,047)	(3,763)
Repurchase of common stock	(2,837)	(273)
Offering costs on issuance of common stock	(94,938)	(38,508)
Distributions to stockholders	(30,312)	(8,900)
Proceeds from issuance of common stock	966,209	333,331
Payments to escrow funds	(12,137)	(2,297)
Collections of escrow funds	3,471	2,016
Proceeds from noncontrolling interest in consolidated partnerships	39,914
Distributions to noncontrolling interests in consolidated partnerships	(2,470)	(2,331)
Net cash provided by financing activities	969,406	290,353
Net change in cash	67,732	45,885
Cash and cash equivalents - Beginning of period	7,511	4,377
Cash and cash equivalents - End of period	75,243	50,262
Supplemental disclosure of non-cash transactions:
Common stock issued through distribution reinvestment plan	33,684	7,452
Net unrealized (loss) gain on interest rate swap	(726)	1,253
Real estate-related notes receivables converted to investment in real estate	20,000
Accrued contingent consideration	5,030
Supplemental cash flow disclosure:
Interest paid, net of interest capitalized of $1,362	$ 12,491	$ 8,506

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Business Combinations (Narrative) (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Business Combinations [Line Items]
Acquisition related expenses	$ 4,087,000	$ 1,402,000	$ 10,598,000	$ 4,599,000
Business Combinations [Member]
Business Combinations [Line Items]
Percentage of fee simple interest acquired			100.00%
Number of acquisitions			8
Number of buildings acquired			10
Aggregate purchase price	469,586,000		469,586,000
Contingent consideration included in aggregate purchase price	5,030,000		5,030,000
Revenues			12,832,000
Net loss			(5,718,000)
Business Combinations [Member] | Non-recurring Charges [Member]
Business Combinations [Line Items]
Acquisition related expenses			$ 10,277,000
Business Combinations [Member] | Data Centers [Member]
Business Combinations [Line Items]
Number of acquisitions			4
Business Combinations [Member] | Medical Facilities [Member]
Business Combinations [Line Items]
Number of acquisitions			4

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Business Combinations (Tables)

9 Months Ended

Sep. 30, 2014

Business Combinations [Abstract]

Schedule of Business Combinations

	Date	Ownership
Property Description	Acquired	Percentage
Cypress Pointe Surgical Hospital	03/14/2014	100%
Milwaukee Data Center	03/28/2014	100%
Charlotte Data Center	04/28/2014	100%
Chicago Data Center	05/20/2014	100%
Rhode Island Rehabilitation Healthcare Facility	08/28/2014	100%
Select Medical Portfolio	08/29/2014	100%
Alpharetta Data Center	09/05/2014	100%
Lafayette Surgical Hospital	09/19/2014	100%

Schedule of Allocation of Fair Value of Business Combinations

	Total
Land	$	21,656
Buildings and improvements		409,131
In-place leases		45,621
Tenant improvements		1,803
Above-market leases		2,505
Total assets acquired		480,716
Below-market leases		(5,842)
Ground leasehold liabilities		(5,288)
Total liabilities acquired		(11,130)
Net assets acquired	$	469,586

Schedule of Business Combinations on a Pro Forma Basis

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2014		2013		2014		2013
Pro forma basis:
Revenues	$	45,110	$	30,803	$	125,144	$	90,065
Net income	$	12,812	$	10,416	$	37,760	$	28,479
Net income attributable to common stockholders	$	11,660	$	9,820	$	35,323	$	27,041

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Segment Reporting (Schedule of Assets by Reportable Segments) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Assets by segment [Line Items]
Total assets	$ 2,097,676	$ 1,064,664
Operating Segments [Member] | Data Centers [Member]
Assets by segment [Line Items]
Total assets	1,080,021	639,009
Operating Segments [Member] | Medical Facilities [Member]
Assets by segment [Line Items]
Total assets	931,380	358,584
All Other [Member]
Assets by segment [Line Items]
Total assets	$ 86,275	$ 67,071

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Fair Value

9 Months Ended

Sep. 30, 2014

Fair Value [Abstract]

Fair Value

Note 15—Fair Value

Notes payable – Fixed Rate— The estimated fair value of notes payable –  fixed rate measured using quoted prices and observable inputs from similar liabilities (Level 2) was approximately $136,920,000 and$139,142,000 as of September 30, 2014 and December 31, 2013, respectively, as compared to the carrying value of $135,002,000 and$137,049,000 as of September 30, 2014 and December 31, 2013, respectively.

Notes payable – Variable— The estimated fair value of notes payable – variable rate fixed through interest rate swap agreements (Level 2) wasapproximately $212,376,000 and $62,835,000 as of September 30, 2014 and December 31, 2013, respectively, as compared to the carrying value of $207,719,000 and$64,128,000 as of September 30 2014 and December 31, 2013, respectively. The carrying value of the notes payable – variable was $45,009,000 and$0 as of September 30, 2014 and December 31, 2013, respectively, which approximated its fair value.

KeyBank Credit Facility—The carrying value of the KeyBank Credit Facility – variable was $20,000,000 and $97,000,000, which approximated its fair value, as of September 30, 2014 and December 31, 2013, respectively. The estimated fair value of the KeyBank Credit Facility – variable rate fixed through interest rate swap agreements (Level 2) was approximately $52,458,000 and$51,922,000 as of September 30, 2014 and December 31, 2013, respectively, as compared to the carrying value of $55,000,000 and $55,000,000 as of September 30, 2014 and December 31, 2013, respectively.

Real estate-related notes receivables, net— The estimated fair value of the real estate-related notes receivables, net was $20,350,000 and$58,176,000 as of September 30, 2014 and December 31, 2013, respectively, as compared to the carrying value of $20,350,000 and $54,080,000 as of September 30, 2014 and December 31, 2013, respectively. The fair value of the Company’s real estate-related notes receivables is estimated using significant unobservable inputs not based on market activity, but rather through particular valuation techniques (Level 3). The fair value was measured based on the income approach valuation methodology,which requires certain judgments to be made by management.

Contingent consideration— The Company has contingent obligations to transfer cash payments to the former owner in conjunction with a certain acquisition if specified future operational objectives are met over future reporting periods. Liabilities for contingent consideration will be measured at fair value each reporting period, with the acquisition-date fair value included as part of the consideration transferred, and subsequent changes in fair value recorded in earnings as acquisition related expenses.

The estimated fair value and the carrying value of the contingent consideration was $5,030,000 of the fair value hierarchy, as of September 30, 2014, which is reported in the accompanying condensed consolidated balance sheets in accounts payable and other liabilities. The Company uses an income approach to value the contingent consideration liability, which is determined based on the present value of probability-weighted future cash flows. The Company has classified the contingent consideration liability as Level 3 of the fair value hierarchy due to the lack of relevant observable market data over fair value inputs such as probability-weighting for payment outcomes. Increases in the assessed likelihood of a high payout under a contingent consideration arrangement contributes to increases in the fair value of the related liability. Conversely, decreases in the assessed likelihood of a higher payout under a contingent consideration arrangement contributes to decreases in the fair value of the related liability. Changes in assumptions could have an impact on the payout of contingent consideration arrangements with a maximum payout of $5,030,000 in cash and a minimum payout of $0, as of September 30, 2014.

Derivative instruments— Considerable judgment is necessary to develop estimated fair values of financial instruments. Accordingly, the estimates presented herein are not necessarily indicative of the amount the Company could realize, or be liable for, on disposition of the financial instruments. The Company has determined that the majority of the inputs used to value its interest rate swaps fall within Level 2 of the fair value hierarchy. The credit valuation adjustment associated with these instruments utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by the Company and the respective counterparty. However, as of September 30, 2014, 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 its interest rate swaps. As a result, the Company determined that its interest rate swaps valuation in its entirety is classified in Level 2 of the fair value hierarchy.

In accordance with the fair value hierarchy described above, the following table shows the fair value of the Company’s financial assets and liabilities that are required to be measured at fair value on a recurring basis as of September 30, 2014 and December 31, 2013 (amounts in thousands):

	September 30, 2014
	Fair Value Hierarchy
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value
Assets:
Derivative assets	$	—	$	550	$	—	$	550
Total assets at fair value	$	—	$	550	$	—	$	550
Liabilities:
Derivative liabilities	$	—	$	(676)	$	—	$	(676)
Contingent consideration obligations		—		—		(5,030)		(5,030)
Total liabilities at fair value	$	—	$	(676)	$	(5,030)	$	(5,706)
	December 31, 2013
	Fair Value Hierarchy
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value
Assets:
Derivative assets	$	—	$	644	$	—	$	644
Total assets at fair value	$	—	$	644	$	—	$	644
Liabilities:
Derivative liabilities	$	—	$	(44)	$	—	$	(44)
Total liabilities at fair value	$	—	$	(44)	$	—	$	(44)

The following table provides a roll-forward of the fair value of recurring Level 3 fair value measurements for the three and nine months ended September 30, 2014 and 2013 (amounts in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2014		2013		2014		2013
Liabilities:
Contingent consideration obligations:
Beginning balance	$	5,030	$	—	$	—	$	—
Additions to contingent consideration obligations		—		—		5,030		—
Adjustment to contingent consideration obligations		—		—		—		—
Total (gains) losses included in earnings (1)		—		—		—		—
Settlements of contingent consideration obligations		—		—		—		—
Ending balance	$	5,030	$	—	$	5,030	$	—
Unrealized (gains) losses still held (2)	$	—	$	—	$	—	$	—

(1)Changes in the fair value of contingent consideration obligations are reported in acquisition related expenses in the accompanying condensed consolidated statements of comprehensive income.

(2)Represents the unrealized losses or gains recorded in earnings or other comprehensive income (loss) during the period for liabilities classified as Level 3 that are still held at the end of the period.

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Segment Reporting (Tables)

9 Months Ended

Sep. 30, 2014

Segment Reporting [Abstract]

Schedule of Information for Reportable Segments

	Data		Medical		Three Months Ended
	Centers		Facilities		September 30, 2014
Revenue:
Rental, parking and tenant reimbursement revenue	$	24,752	$	17,898	$	42,650
Expenses:
Rental and parking expenses		(5,123)		(985)		(6,108)
Segment net operating income	$	19,629	$	16,913		36,542
Revenue:
Real estate-related notes receivables interest expense						(257)
Expenses:
General and administrative expenses						(1,411)
Acquisition related expenses						(4,087)
Asset management fees						(4,078)
Depreciation and amortization						(13,002)
Income from operations						13,707
Interest expense						(5,201)
Net income					$	8,506

	Data		Medical		Three Months Ended
	Centers		Facilities		September 30, 2013
Revenue:
Rental, parking and tenant reimbursement revenue	$	10,042	$	5,868	$	15,910
Expenses:
Rental and parking expenses		(2,770)		(385)		(3,155)
Segment net operating income	$	7,272	$	5,483		12,755
Revenue:
Real estate-related notes receivables interest income						1,936
Expenses:
General and administrative expenses						(539)
Acquisition related expenses						(1,402)
Asset management fees						(457)
Depreciation and amortization						(4,727)
Income from operations						7,566
Interest expense						(3,119)
Net income					$	4,447

	Data		Medical		Nine Months Ended
	Centers		Facilities		September 30, 2014
Revenue:
Rental, parking and tenant reimbursement revenue	$	60,569	$	40,977	$	101,546
Expenses:
Rental and parking expenses		(12,104)		(2,325)		(14,429)
Segment net operating income	$	48,465	$	38,652		87,117
Revenue:
Real estate-related notes receivables interest income						2,174
Expenses:
General and administrative expenses						(3,212)
Acquisition related expenses						(10,598)
Asset management fees						(9,538)
Depreciation and amortization						(31,275)
Income from operations						34,668
Interest expense						(13,428)
Net income					$	21,240

	Data		Medical		Nine Months Ended
	Centers		Facilities		September 30, 2013
Revenue:
Rental, parking and tenant reimbursement revenue	$	28,079	$	14,395	$	42,474
Expenses:
Rental and parking expenses		(7,554)		(972)		(8,526)
Segment net operating income	$	20,525	$	13,423		33,948
Revenue:
Real estate-related notes receivables interest income						4,195
Expenses:
General and administrative expenses						(1,694)
Acquisition related expenses						(4,599)
Asset management fees						(2,083)
Depreciation and amortization						(12,591)
Income from operations						17,176
Interest expense						(9,025)
Net income					$	8,151

Schedule of Assets by Reportable Segments

	September 30, 2014		December 31, 2013
Assets by segment:
Data centers	$	1,080,021	$	639,009
Medical facilities		931,380		358,584
All other		86,275		67,071
Total assets	$	2,097,676	$	1,064,664

Schedule of Capital Additions by Reportable Segments

	Nine Months Ended
	September 30,
	2014		2013
Capital additions by segment:
Data centers	$	438,539	$	99,600
Medical facilities		527,485		134,261
All other		—		—
Total capital additions	$	966,024	$	233,861

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Accumulated Other Comprehensive Income (Loss)

9 Months Ended

Sep. 30, 2014

Accumulated Other Comprehensive Income (Loss) [Abstract]

Accumulated Other Comprehensive Income (Loss)

Note 17—Accumulated Other Comprehensive Income (Loss)

The following table presents a roll forward of amounts recognized in accumulated other comprehensive income (loss) by component for the nine months ended September 30, 2014 (amounts in thousands):

	Unrealized Loss on Derivative Instruments		Accumulated Other Comprehensive Income (Loss)
Balance as of December 31, 2013	$	600	$	600
Other comprehensive loss before reclassification		(2,513)		(2,513)
Amounts reclassified from accumulated other
comprehensive income (loss) to net income (effective portion)		1,787		1,787
Other comprehensive loss		(726)		(726)
Balance as of September 30, 2014	$	(126)	$	(126)

The following table presents reclassifications out of accumulated other comprehensive income (loss) for the nine months ended September 30, 2014 (amounts in thousands):

Details about Accumulated Other Comprehensive Income (Loss) Components	Amounts Reclassified from Accumulated Other Comprehensive Income (Loss) to Net Income		Affected Line Items in the Condensed Consolidated Statements of Comprehensive Income
Interest rate swap contracts	$	1,787	Interest expense

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Fair Value (Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis) (Details) (USD $)	Sep. 30, 2014	Dec. 31, 2013
Assets:
Derivative assets	$ 550,000	$ 644,000
Liabilities:
Derivative liabilities	(676,000)	(44,000)
Recurring Basis [Member]
Assets:
Derivative assets	550,000	644,000
Total assets at fair value	550,000	644,000
Liabilities:
Derivative liabilities	(676,000)	(44,000)
Contingent consideration obligations	(5,030,000)
Total liabilities at fair value	(5,706,000)	(44,000)
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Recurring Basis [Member]
Assets:
Derivative assets
Total assets at fair value
Liabilities:
Derivative liabilities
Contingent consideration obligations
Total liabilities at fair value
Significant Other Observable Inputs (Level 2) [Member] | Recurring Basis [Member]
Assets:
Derivative assets	550,000	644,000
Total assets at fair value	550,000	644,000
Liabilities:
Derivative liabilities	(676,000)	(44,000)
Contingent consideration obligations
Total liabilities at fair value	(676,000)	(44,000)
Significant Unobservable Inputs (Level 3) [Member] | Recurring Basis [Member]
Assets:
Derivative assets
Total assets at fair value
Liabilities:
Derivative liabilities
Contingent consideration obligations	(5,030,000)
Total liabilities at fair value	$ (5,030,000)

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Condensed Consolidated Statements Of Cash Flow (Parenthetical) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2014
Condensed Consolidated Statements Of Cash Flow [Abstract]
Interest capitalized	$ 1,362

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Condensed Consolidated Balance Sheets (Parenthetical) (USD $)	Sep. 30, 2014	Dec. 31, 2013
Land	$ 142,374,000	$ 92,052,000
Buildings and improvements	1,588,185,000	791,574,000
Acquired intangible assets	223,073,000	121,214,000
Accumulated depreciation and amortization	59,018,000	27,619,000
Total real estate, net	1,949,585,000	977,221,000
Cash and cash equivalents	75,243,000	7,511,000
Other assets	52,498,000	25,852,000
Notes payable	387,730,000	201,177,000
Accounts payable due to affiliates	9,645,000	696,000
Accounts payable and other liabilities	31,709,000	15,546,000
Intangible lease liabilities, accumulated amortization	9,638,000	6,501,000
Intangible lease liabilities, net	61,991,000	53,962,000
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	50,000,000	50,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	300,000,000	300,000,000
Common stock, shares issued	173,807,656	73,238,145
Common stock, shares outstanding	173,411,808	73,137,569
Variable Interest Entity, Primary Beneficiary [Member]
Land	4,280,000	4,280,000
Buildings and improvements	95,695,000	95,529,000
Acquired intangible assets	16,189,000	16,189,000
Accumulated depreciation and amortization	11,689,000	8,419,000
Total real estate, net	104,475,000	107,579,000
Cash and cash equivalents	261,000	411,000
Other assets	5,372,000	3,968,000
Notes payable	53,216,000	53,746,000
Accounts payable due to affiliates	69,000	15,000
Accounts payable and other liabilities	1,773,000	1,411,000
Intangible lease liabilities, net	$ 14,937,000	$ 16,410,000

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Intangible Lease Liabilities, Net

9 Months Ended

Sep. 30, 2014

Intangible Lease Liabilities, Net [Abstract]

Intangible Lease Liabilities, Net

Note 10—Intangible Lease Liabilities, Net 

Intangible lease liabilities, net consisted of the following as of September 30, 2014 and December 31, 2013 (amounts in thousands): 

	September 30, 2014		December 31, 2013
Below-market leases, net of accumulated amortization of $9,616 and $6,501, respectively (with a weighted average remaining life of 17.6 years and 18.5 years, respectively)	$	56,688	$	53,962
Ground leasehold liabilities, net of accumulated amortization of $22 and $0, respectively (with a weighted average remaining life of 44.4 years and 0 years, respectively)		5,303		-
	61,991		53,962

The aggregate weighted average remaining life of intangible lease liabilities was 19.9 years and 18.5 years as of September 30, 2014 and December 31, 2013, respectively.

XML

Document And Entity Information	9 Months Ended
	Sep. 30, 2014	Nov. 10, 2014
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q3
Entity Registrant Name	Carter Validus Mission Critical REIT, Inc.
Entity Central Index Key	0001482974
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		173,922,000

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2014

Commitments and Contingencies [Abstract]

Commitments and Contingencies

Note 11—Commitments and Contingencies

Litigation

In the ordinary course of business, the Company may become subject to litigation or claims. As of September 30, 2014, there were, and currently there are, no material pending legal proceedings to which the Company is a party.  

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Condensed Consolidated Statements Of Comprehensive Income (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Revenue:
Rental and parking revenue	$ 38,486,000	$ 13,373,000	$ 91,287,000	$ 35,622,000
Tenant reimbursement revenue	4,164,000	2,537,000	10,259,000	6,852,000
Real estate-related notes receivables interest income	(257,000)	1,936,000	2,174,000	4,195,000
Total revenue	42,393,000	17,846,000	103,720,000	46,669,000
Expenses:
Rental and parking expenses	6,108,000	3,155,000	14,429,000	8,526,000
General and administrative expenses	1,411,000	539,000	3,212,000	1,694,000
Acquisition related expenses	4,087,000	1,402,000	10,598,000	4,599,000
Asset management fees	4,078,000	457,000	9,538,000	2,083,000
Depreciation and amortization	13,002,000	4,727,000	31,275,000	12,591,000
Total expenses	28,686,000	10,280,000	69,052,000	29,493,000
Income from operations	13,707,000	7,566,000	34,668,000	17,176,000
Interest expense	5,201,000	3,119,000	13,428,000	9,025,000
Net income	8,506,000	4,447,000	21,240,000	8,151,000
Net income attributable to noncontrolling interests in consolidated partnerships	(1,152,000)	(597,000)	(2,437,000)	(1,437,000)
Net income attributable to common stockholders	7,354,000	3,850,000	18,803,000	6,714,000
Other comprehensive income (loss):
Unrealized (loss) income on interest rate swaps	(59,000)	(683,000)	(2,513,000)	732,000
Reclassification of previous unrealized loss on interest rate swaps into net income	841,000	189,000	1,787,000	521,000
Other comprehensive income (loss)	782,000	(494,000)	(726,000)	1,253,000
Comprehensive income attributable to common stockholders	$ 8,136,000	$ 3,356,000	$ 18,077,000	$ 7,967,000
Weighted average number of common shares outstanding:
Basic	172,914,286	46,757,918	133,908,958	34,925,951
Diluted	172,931,516	46,774,585	133,928,250	34,944,118
Net income per common share attributable to common stockholders:
Basic	$ 0.04	$ 0.08	$ 0.14	$ 0.19
Diluted	$ 0.04	$ 0.08	$ 0.14	$ 0.19
Distributions declared per common share	$ 0.18	$ 0.18	$ 0.52	$ 0.52

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Other Assets

9 Months Ended

Sep. 30, 2014

Other Assets [Abstract]

Other Assets

Note 5—Other Assets 

Other assets consisted of the following as of September 30, 2014 and December 31, 2013 (amounts in thousands):

	September 30, 2014		December 31, 2013
Deferred financing costs, net of accumulated amortization of $3,643
and $1,750, respectively	$	11,954	$	6,800
Lease commissions, net of accumulated amortization of $40
and $21, respectively		313		203
Investments in unconsolidated partnerships		108		116
Accounts receivable		2,356		1,025
Straight-line rent receivable		19,536		7,902
Restricted cash held in escrow		13,910		5,246
Real estate escrow deposits		250		5
Restricted cash		1,370		1,142
Derivative assets		550		644
Accrued interest receivable from real estate-related notes receivables		152		1,850
Prepaid and other assets		1,999		919
	$	52,498	$	25,852

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Acquired Intangible Assets, Net

9 Months Ended

Sep. 30, 2014

Acquired Intangible Assets, Net [Abstract]

Acquired Intangible Assets, Net

Note 4—Acquired Intangible Assets, Net

Acquired intangible assets, net,which are included in real estate in the accompanying condensed consolidated balance sheets, consisted of the following as of September 30, 2014 and December 31, 2013 (amounts in thousands):

	September 30, 2014		December 31, 2013
In-place leases, net of accumulated amortization of $16,816 and $7,954, respectively (with a weighted average remaining life of 15.2years and 14.6 years, respectively)	$	199,796	$	109,342
Above-market leases, net of accumulated amortization of $439 and $294, respectively (with a weighted average remaining life of 11.6 years and 8.6 years, respectively)		3,207		846
Ground lease interest, net of accumulated amortization of $119 and $78, respectively (with a weighted average remaining life of 61.4years and 62.8 years, respectively)		2,696		2,700
	$	205,699	$	112,888

The aggregate weighted average remaining life of the acquired intangible assets was 15.8 years and15.7 years as of September 30, 2014 and December 31, 2013, respectively.

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Derivative Instruments and Hedging Activities

9 Months Ended

Sep. 30, 2014

Derivative Instruments and Hedging Activities [Abstract]

Derivative Instruments and Hedging Activities

Note 16—Derivative Instruments and Hedging Activities

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 this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable rate amounts from a counterparty in exchange for the Company making fixed rate payments over the life of the agreements without exchange of the underlying notional amount.

The effective portion of changes in the fair value of derivatives designated, and that qualify, as cash flow hedges is recorded in accumulated other comprehensive income (loss) in the accompanying condensed consolidated statement of stockholders’ equity and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. During the nine months ended September 30, 2014, such derivatives were used to hedge the variable cash flows associated with variable rate debt. The ineffective portion of changes in fair value of the derivatives is recognized directly in earnings. During the three and nine months ended September 30, 2014 and 2013, no gains or losses were recognized due to ineffectiveness of hedges of interest rate risk.

Amounts reported in accumulated other comprehensive income (loss) 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 $3,146,000will be reclassified from accumulated other comprehensive income (loss) as an increase to interest expense.

See Note 15—“Fair Value” for a further discussion of the fair value of the Company’s derivative instruments.

The following table summarizes the notional amount and fair value of the Company’s derivative instruments (amounts in thousands):

September 30, 2014

December 31, 2013

Derivatives

Balance

Outstanding

Fair Value of

Outstanding

Fair Value of

Designated as

Sheet

Effective

Maturity

Notional

Notional

Hedging Instruments

Location

Dates

Dates

Amount

Asset

(Liability)

Amount

Asset

(Liability)

Interest rate

Other assets/Accounts

10/12/2012 to

10/11/2017 to

$

262,719

$

550

$

(676)

$

119,128

$

644

$

(44)

swaps

payable and other

07/11/2014

07/11/2019

liabilities

Accounting for changes in the fair value of a derivative instrument depends on the intended use and designation of the derivative instrument. The Company designated the interest rate swaps as cash flow hedges to hedge the variability of the anticipated cash flows on its variable rate notes payable. The change in fair value of the effective portion of the derivative instrument that is designated as a hedge is recorded in other comprehensive income (loss), or OCI, in the accompanying condensed consolidated statements of comprehensive income.

The table below summarizes the amount of gain or losses recognized on interest rate derivatives designated as cash flow hedges for the three and nine months ended September 30, 2014 and 2013 (amounts in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
Derivatives in Cash Flow Hedging Relationships (Interest Rate Swaps)	2014		2013		2014		2013
Amount of (loss) income recognized in OCI on derivatives (effective portion)	$	(59)	$	(683)	$	(2,513)	$	732
Amounts reclassified from accumulated other
comprehensive income (loss) (effective portion)	$	841	$	189	$	1,787	$	521

Credit Risk-Related Contingent Features

The Company has agreements with each of its derivative counterparties that contain cross-default provisions, whereby if the Company defaults on certain of its unsecured indebtedness, then the Company could also be declared in default on its derivative obligations, resulting in an acceleration of payment thereunder.

In addition, the Company is exposed to credit risk in the event of non-performance by its derivative counterparties. The Company believes it mitigates its credit risk by entering into agreements with credit-worthy counterparties. The Company records credit risk valuation adjustments on its interest rate swaps based on the respective credit quality of the Company and the counterparty. As of September 30, 2014, the fair value of derivatives in a net liability position, including accrued interest but excluding any adjustment for nonperformance risk related to these agreements, was $988,000. As of September 30, 2014, there were no termination events or events of default related to the interest rate swaps.

Tabular Disclosure Offsetting Derivatives

The Company has elected not to offset derivative positions in its condensed consolidated financial statements. The following table presents the effect on the Company’s financial position had the Company made the election to offset its derivative positions as of September 30, 2014 and December 31, 2013 (amounts in thousands):

Offsetting of Derivative Assets
							Gross Amounts Not Offset in the Balance Sheet
		Gross Amounts of Recognized Assets		Gross Amounts Offset in the Balance Sheet		Net Amounts of Assets Presented in the Balance Sheet		Financial Instruments Collateral		Cash Collateral		Net Amount
September 30, 2014	$	550	$	—	$	550	$	—	$	—	$	550
December 31, 2013	$	644	$	—	$	644	$	—	$	—	$	644

Offsetting of Derivative Liabilities
							Gross Amounts Not Offset in the Balance Sheet
		Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Balance Sheet		Net Amounts of Liabilities Presented in the Balance Sheet		Financial Instruments Collateral		Cash Collateral		Net Amount
September 30, 2014	$	676	$	—	$	676	$	—	$	—	$	676
December 31, 2013	$	44	$	—	$	44	$	—	$	—	$	44

The Company reports derivatives in the accompanying condensed consolidated balance sheets as other assets and accounts payable and other liabilities.

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Related-Party Transactions and Arrangements

9 Months Ended

Sep. 30, 2014

Related-Party Transactions and Arrangements [Abstract]

Related-Party Transactions and Arrangements

Note 12—Related-Party Transactions and Arrangements

Certain affiliates of the Company received fees and compensation in connection with the Offering and will continue to receive fees during the acquisition, management and sale of the assets of the Company. The Dealer Manager received a selling commission of up to 7.0% of gross offering proceeds. In addition, the Dealer Manager received up to 2.75% of gross offering proceeds as a dealer manager fee. The Dealer Manager, in its sole discretion, re-allowed all or a portion of its dealer manager fee to participating broker-dealers as a marketing and due diligence expense reimbursement. The Company paid the Dealer Manager approximately $61,871,000 and $13,556,000 for the three months ended September 30, 2014 and 2013, respectively, and $90,665,000 and $30,904,000 for the nine months ended September 30, 2014 and 2013, respectively, for selling commissions and dealer manager fees in connection with the Offering. On June 6, 2014, the Offering terminated.  

Organization and offering expenses were paid by the Advisor, or its affiliates, on behalf of the Company. The Advisor was reimbursed for actual expenses incurred up to 15.0% of the gross offering proceeds (including selling commissions and the dealer manager fee from the sale of shares of the Company’s common stock in the Offering, other than shares of common stock sold pursuant to the DRIP). For the three months ended September 30, 2014 and 2013, the Company reimbursed $144,000 and $3,068,000, respectively, and for the nine months ended September 30, 2014 and 2013, the Company reimbursed $1,135,000 and $7,604,000, respectively, in offering expenses to the Advisor, or its affiliates. Other organization expenses were expensed as incurred and offering costs are reported in the accompanying condensed consolidated statement of stockholders’ equity.  

The Company pays the Advisor, or its affiliates, an acquisition and advisory fee in the amount of 2.0% of the contract purchase price of each asset or loan the Company acquires or originates. In addition, the Company reimburses the Advisor for all acquisition expenses it incurs on the Company’s behalf, but only to the extent the total amount of all acquisition fees and acquisition expenses is limited to 6.0% of the contract purchase price. For the three months ended September 30, 2014 and 2013, the Company incurred $9,379,000 and $2,615,000, respectively, and for the nine months ended September 30, 2014 and 2013, the Company incurred $18,684,000 and $4,633,000, respectively, in acquisition fees to the Advisor, or its affiliates. During the three months ended September 30, 2014 and 2013, the Company paid $136,000 and $707,000, respectively, and for the nine months ended September 30, 2014 and 2013, the Company paid $293,000 and $1,004,000, respectively, in advisory fees to the Advisor, or its affiliates, related to investments in notes receivables.

The Company incurs an annual asset management fee of 1.0% of the aggregate asset value plus costs and expenses incurred by the Advisor in providing asset management services. The fee is payable monthly in an amount equal to 0.08333% of the aggregate asset value as of the last day of the immediately preceding month. For the three months ended September 30, 2014 and 2013, the Advisor recognized $4,078,000 and $457,000, respectively, in asset management fees, net of asset management fees waived. For the nine months ended September 30, 2014 and 2013, the Advisor recognized $9,538,000 and $2,083,000, respectively, in asset management fees, net of asset management fees waived. For the three months ended September 30, 2014 and 2013, the Advisor waived irrevocably, without recourse, $0 and $682,000, respectively, in asset management fees. For the nine months ended September 30, 2014 and 2013, the Advisor waived irrevocably, without recourse, $0 and$862,000, respectively, in asset management fees. For the three and nine months ended September 30, 2014, the Advisor deferred receipt of asset management fees because the Company’s modified funds from operations did not exceed its distributions. As of September 30, 2014 the Advisor deferred receipt of asset management fees in the amount of $8,963,000.  

The Company reimburses the Advisor for all expenses it paid or incurred in connection with the services provided to the Company, subject to certain limitations. The Company will not reimburse the Advisor for personnel costs in connection with services for which the Advisor receives an acquisition and advisory fee or a disposition fee. For the three months ended September 30, 2014 and 2013, the Advisor incurred $410,000 and $285,000, respectively, and for the nine months ended September 30, 2014 and 2013, the Advisor incurred $1,279,000 and $738,000, respectively, in operating expenses on the Company’s behalf. For the three months ended September 30, 2014 and 2013, the Company reimbursed $438,000 and $239,000, respectively, and for the nine months ended September 30, 2014 and 2013 the Company reimbursed $1,364,000 and $710,000, respectively, in operating expenses to the Advisor.  

The Company has no direct employees. The employees of the Advisor and other affiliates provide services to the Company related to acquisition, property management, asset management, accounting, investor relations, and all other administrative services. If the Advisor, or its affiliates, provides a substantial amount of services, as determined by a majority of the Company’s independent directors, in connection with the sale of one or more properties, the Company will pay the Advisor up to one-half of the brokerage commission paid, but in no event to exceed an amount equal to 2.0% of the contract sales price of each property sold. In no event will the combined real estate commission paid to the Advisor, its affiliates and unaffiliated third parties exceed 6.0% of the contract sales price. In addition, after investors have received a return on their net capital contributions and an 8.0% cumulative non-compounded annual return, then the Advisor is entitled to receive 15.0% of the remaining net sale proceeds. As of September 30, 2014, the Company did not incur any disposition fees or any subordinated sale fees to the Advisor, or its affiliates.

Upon listing of the Company’s common stock on a national securities exchange, a listing fee equal to 15.0% of the amount by which the market value of the Company’s outstanding stock plus all distributions paid by the Company prior to listing exceeds the sum of the total amount of capital raised from investors and the amount of cash flow necessary to generate an 8.0% cumulative, non-compounded annual return to investors will be paid to the Advisor. As of September 30, 2014, the Company did not incur any listing fees.

The Company pays the Property Manager leasing and management fees in connection with the rental, leasing, operation and management of the Company’s properties. Such fees equal 3.0% of gross revenues from single-tenant properties and 4.0% of gross revenues from multi-tenant properties. The Company will reimburse the Property Manager and its affiliates for property-level expenses that any of them pay or incur on the Company’s behalf, including salaries, bonuses and benefits of persons employed by the Property Manager and its affiliates, except for the salaries, bonuses and benefits of persons who also serve as one of the Company’s executive officers. The Property Manager and its affiliates may subcontract the performance of their duties to third parties and pay all or a portion of the property management fee to the third parties with whom they contract for these services. If the Company contracts directly with third parties for such services at customary market fees, the Company will pay the Property Manager an oversight fee equal to 1.0% of the gross revenues of the property managed. In no event will the Company pay the Property Manager, the Advisor, or its affiliates, both a property management fee and an oversight fee with respect to any particular property. The Company may pay the Property Manager a separate fee for the one-time initial rent-up, lease renewals or leasing-up of newly constructed properties in an amount not to exceed the fee customarily charged in arm’s length transactions by others rendering similar services in the same geographic area for similar properties as determined by a survey of brokers and agents in such area. For the three months ended September 30, 2014 and 2013, the Company incurred $1,482,000 and $374,000, respectively, and for the nine months ended September 30, 2014 and 2013, the Company incurred $3,113,000 and $982,000, respectively, in property management fees to the Property Manager.

Accounts Payable Due to Affiliates

The following amounts were outstanding due to affiliates as of September 30, 2014 and December 31, 2013 (amounts in thousands):  

Entity	Fee	September 30, 2014		December 31, 2013
Carter/Validus Advisors, LLC and its affiliates	Acquisition costs	$	4	$	1
Carter/Validus Advisors, LLC and its affiliates	Asset management fees		8,963		102
Carter Validus Real Estate Management Services, LLC	Property management fees		319		105
Carter/Validus Advisors, LLC and its affiliates	General and administrative costs		140		235
Carter/Validus Advisors, LLC and its affiliates	Offering costs		—		253
Carter/Validus Advisors, LLC and its affiliates	Leasing fees		219		—
		$	9,645	$	696

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Notes Payable

9 Months Ended

Sep. 30, 2014

Notes Payable [Abstract]

Notes Payable

Note 8—Notes Payable

During the nine months ended September 30, 2014, the Company entered into five notes payable collateralized by real estate assets in the aggregate amount of $297,316,000as follows: on January 27, 2014, the Company originated a $20,466,000 note payable with a variable interest rate at the 30-day London interbank offered rate, or LIBOR, plus 335 basis points with a maturity date of January 26, 2019, subject to the Company’s right to two12-month extensions; on February 25, 2014, the Company originated a $34,000,000 note payable with a variable interest rate at the 30-day LIBOR rate plus 400 basis points with a maturity date of February 25, 2019, which was fixed through an interest rate swap agreement to effectively fix the variable interest rate on the loan at 6.2% per annum; on February 26, 2014, the Company originated a $37,000,000 note payable with a variable interest rate at the 30-day LIBOR rate plus 225 basis points with a maturity date of February 26, 2019, which was fixed through an interest rate swap agreement to effectively fix the variable interest rate on the loan at 3.8% per annum. The Company has an option to draw an additional $37,000,000 under this note payable until February 26, 2015. On July 11, 2014, the Company originated a $100,000,000 note payable with a variable interest rate at the 30-day LIBOR rate plus 450 basis points for a period of eighteen months and 400 basis points after the eighteen month period with a maturity date of July 11, 2019, which $75,000,000 of the $100,000,000 was fixed through an interest rate swap agreement to effectively fix the variable interest rate on the loan at 6.3% per annum; on August 21, 2014, the Company originated a $105,850,000 note payable with a variable interest rate at the 30-day LIBOR rate plus 265 basis points with a maturity date of August 21, 2017, subject to the Company’s right to one24-month extension. On October 1, 2014 the Company drew down $105,850,000 under this note payable.

Notes payable consisted of the following as of September 30, 2014 and December 31, 2013 (amounts in thousands):

	September 30, 2014		December 31, 2013
Fixed rate notes payable	$	135,002	$	137,049
Variable rate notes payable		45,009		—
Variable rate notes payable fixed through interest rate swaps		207,719		64,128
Total notes payable	$	387,730	$	201,177

As of September 30, 2014, the notes payable had interest rates ranging from 3.5% to 6.3% and a weighted average interest rate of 5.1%. The notes payablemature on various dates from August 2016 through April 2022.

The following is a summary of the change in carrying amounts of notes payable for the nine months ended September 30, 2014 and 2013 (amounts in thousands):

	Nine Months Ended
	September 30,
	2014		2013
Beginning balance	$	201,177	$	156,847
Additions:
Notes payable originations		191,466		14,000
Deductions:
Scheduled principal payments on notes payable		(4,913)		(2,422)
Ending Balance	$	387,730	$	168,425

The principal payments due on the notes payable for the three months ending December 31, 2014, and for each of the next four years ending December 31 and thereafter, are as follows (amounts in thousands): 

Year	Principal Payments		Balloon Payments		Amount
Three months ending December 31, 2014	$	2,620	$	—	$	2,620
2015		10,799		—		10,799
2016		10,797		13,441		24,238
2017		10,161		74,325		84,486
2018		8,299		45,405		53,704
Thereafter		6,422		205,461		211,883
	$	49,098	$	338,632	$	387,730

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Business Combinations (Schedule of Business Combinations) (Details)	9 Months Ended
	Sep. 30, 2014
Cypress Pointe Surgical Hospital [Member]
Business Combinations [Line Items]
Date Acquired	Mar. 14, 2014
Ownership Percentage	100.00%
Milwaukee Data Center [Member]
Business Combinations [Line Items]
Date Acquired	Mar. 28, 2014
Ownership Percentage	100.00%
Charlotte Data Center [Member]
Business Combinations [Line Items]
Date Acquired	Apr. 28, 2014
Ownership Percentage	100.00%
Chicago Data Center [Member]
Business Combinations [Line Items]
Date Acquired	May 20, 2014
Ownership Percentage	100.00%
Rhode Island Rehabilitation Healthcare Facility [Member]
Business Combinations [Line Items]
Date Acquired	Aug. 28, 2014
Ownership Percentage	100.00%
Select Medical Portfolio [Member]
Business Combinations [Line Items]
Date Acquired	Aug. 29, 2014
Ownership Percentage	100.00%
Alpharetta Data Center [Member]
Business Combinations [Line Items]
Date Acquired	Sep. 05, 2014
Ownership Percentage	100.00%
Lafayette Surgical Hospital [Member]
Business Combinations [Line Items]
Date Acquired	Sep. 19, 2014
Ownership Percentage	100.00%

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Investment in Real Estate-Related Notes Receivables, Net

9 Months Ended

Sep. 30, 2014

Investment in Real Estate-Related Notes Receivables, Net [Abstract]

Investment in Real Estate-Related Notes Receivables, Net

Note 6—Investment in Real Estate-Related Notes Receivables, Net 

As of September 30, 2014, the Company had investments in three real estate-related notes receivables, which are loans made that the Company intends to hold to maturity. Accordingly, real estate-related notes receivables are recorded at stated principal amounts net of any discount or premium and deferred loan origination costs or fees. The related discounts or premiums are accreted or amortized over the life of the real estate-related note receivables, as applicable. The Company defers certain loan origination and commitment fees and amortizes them as an adjustment of yield over the term of the real estate-related note receivable. The related accretion of discounts and/or amortization of premiums and origination costs are recorded in interest income in the accompanying condensed consolidated statements of comprehensive income. Real estate-related notes receivables interest income for the three months ended September 30, 2014 and 2013 was $(257,000) and$1,936,000, respectively, and for the nine months ended September 30, 2014 and 2013 was $2,174,000 and$4,195,000, respectively.Real estate-related notes receivables interest income for the three months ended September 30, 2014 in the amount of $(257,000) primarily related to expenses associated with amortization of loan origination fees of $766,000 in connection with the repayment of the Bay Area Preferred Equity Loan on July 11, 2014.

As of September 30, 2014 and December 31, 2013, the aggregate balance on the Company’s investment in real estate-related notes receivables, net was $20,350,000 and $54,080,000, respectively. As of September 30, 2014, the Company had fixed rate notes receivables with interest rates ranging from 8.0% to 12.0% per annum and a weighted average interest rate of 8.6% per annum.  

Real estate-related notes receivables consisted of the following as of September 30, 2014 and December 31, 2013 (amounts in thousands):

				Outstanding Balance as of
Real Estate-Related Notes Receivables, Net	Interest Rate		Maturity Date	September 30, 2014		December 31, 2013
Bay Area Preferred Equity Loan (1)	17.0%	(4)	11/30/18	$	—	$	23,247
Walnut Hill Property Company Loan (1),(5)	10.0%		02/28/18		—		20,327
Medistar Loan (3)	8.0%		(2)		9,500		9,500
MM Peachtree Holdings (1)	12.0%		12/31/21		514		514
Landmark Loan (1),(3)	9.0%		12/17/15		10,336		492
				$	20,350	$	54,080

(1)Unconsolidated VIE.The maximum exposure to loss related to the Company’s variable interest in unconsolidated VIEs is limited to the outstanding balances of the respective real estate-related notes receivables. The Company may be subject to additional losses to the extent of any receivables relating to future funding.

(2)The Medistar Loan, previously known as the Walnut Hill Bridge Loan, matures upon the earlier to occur of: (i) the sale or refinancing of the property under construction for which proceeds from the loan were used and (ii) December 31, 2014.  

(3)As of September 30, 2014, an affiliate of the Company had an option to purchase the respective property under construction when the construction is completed.

(4)On March 25, 2014, the Company increased the aggregate borrowing amount by $5,000,000 to $27,500,000. The additional $5,000,000 bore interest at a per annum rate equal to 10.0%. On July 11, 2014, in connection with the acquisition of the Bay Area Regional Medical Center, located in Webster, Texas, the borrower paid off the outstanding principal and accrued interest in the amount of $29,401,000 on the Bay Area Preferred Equity Loan.

(5)On February 25, 2014, in connection with the acquisition of the Walnut Hill Medical Center, located in Dallas, Texas the Company applied the Walnut Hill Property Company Loan outstanding principal amount of $20,000,000 to reduce the cash paid at acquisition.

The Company evaluates the collectability of both interest and principal on each real estate-related note receivable to determine whether it is collectible, primarily through the evaluation of the credit quality indicators, such as underlying collateral and payment history. The Company does not intend to sell its investments in real estate-related notes receivables and it is not likely that the Company will be required to sell its investments in real estate-related notes receivables before recovery of their amortized costs basis, which may be at maturity. No impairment losses were recorded related to investments in real estate-related notes receivables for the three and nine months ended September 30, 2014 and 2013. In addition, no allowances for uncollectability were recorded related to investments in real estate-related notes receivables as of September 30, 2014 and December 31, 2013.

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Future Minimum Rent

9 Months Ended

Sep. 30, 2014

Future Minimum Rent [Abstract]

Future Minimum Rent

Note 7—Future Minimum Rent

The Company’s real estate assets are leased to tenants under operating leases with varying terms. The leases frequently have provisions to extend the lease agreement. The Company retains substantially all of the risks and benefits of ownership of the real estate assets leased to tenants. As of September 30, 2014, the weighted average remaining lease term was 12.5 years.

The future minimum rental income from the Company’s investments in real estate assets under non-cancelable operating leases for the three months ending December 31, 2014, and for each of the next four years ending December 31 and thereafter, are as follows (amounts in thousands):

Year	Amount
Three months ending December 31, 2014	$	37,552
2015		152,031
2016		154,060
2017		156,628
2018		159,735
Thereafter		1,744,210
	$	2,404,216

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Credit Facility

9 Months Ended

Sep. 30, 2014

Credit Facility [Abstract]

Credit Facility

Note 9—Credit Facility 

On May 28, 2014, the Operating Partnership amended certain agreements related to the Company’s credit facility, or the KeyBank Credit Facility, to include American Momentum Bank, RBS Citizens, N.A., and United Community Bank as lenders and to increase the maximum commitments available under the KeyBank Credit Facility from $225,000,000 to an aggregate of up to $365,000,000, consisting of a $290,000,000 revolving line of credit, with a maturity date of May 28, 2017, subject to the Operating Partnership’s right to a 12-month extension, and $75,000,000 in term loans, with a maturity date of May 28, 2018, subject to the Operating Partnership’s right to a 12-month extension. The new and existing lenders agreed to make the loans on an unsecured basis (previously all loans were secured by a perfected first priority lien and security interest on the mortgaged properties). The proceeds of loans made under the KeyBank Credit Facility may be used to finance the acquisition of real estate investments, capital expenditures with respect to real estate and for general corporate working capital purposes. The KeyBank Credit Facility can be increased to $500,000,000 under certain circumstances.

In connection with the amendment to the KeyBank Credit Facility, the annual interest rate payable under the KeyBank Credit Facility was decreased to, at the Operating Partnership’s option, either (a) LIBOR, plus an applicable margin ranging from 1.75% to 2.25% (the margin rate was previously set at a range from 2.25% to 3.00%), which is determined based on the overall leverage of the Operating Partnership; or (b) a base rate, which means, for any day, a fluctuating rate per annum equal to the prime rate for such day, plus an applicable margin ranging from 0.75% to 1.25% (the margin rate was previously set at a range from 1.00% to 1.75%), which is determined based on the overall leverage of the Operating Partnership. Additionally, the requirement to pay a fee on the unused portion of the lenders’ commitments under the KeyBank Credit Facility was reduced from 0.30% per annum to 0.25% per annum if the average daily amount outstanding balance under the KeyBank Credit Facility is less than 50% of the lenders’ commitments, and from 0.20% per annum to 0.15% per annum if the average daily amount outstanding under the KeyBank Credit Facility is greater than 50% of the lenders’ commitments. The unused fee is payable quarterly in arrears.

In connection with the KeyBank Credit Facility, the Operating Partnership entered into interest swap agreements with KeyBank National Association to effectively fix LIBOR on $55,000,000 out of $75,000,000 of the term loans. The weighted average rate of the fixed portion of the term loans of the KeyBank Credit Facility was0.91%, resulting in an interest rate ranging from 2.66% to 3.16% per annum. The revolving line of credit and the term loans can be prepaid prior to maturity without penalty; provided, however, that any portion of the term loans that is prepaid may not be reborrowed, and the Operating Partnership may be subject to a breakage fee under the swap agreements, if applicable.

The actual amount of credit available under the KeyBank Credit Facility is a function of certain loan-to-cost, loan-to-value, debt yield and debt service coverage ratios. The credit available to the Operating Partnership under the KeyBank Credit Facility will be a maximum principal amount of the value of the assets that are included in the unencumbered pool. During the nine months ended September 30, 2014, the Company paid down $97,000,000 under the KeyBank Credit Facility. As of September 30, 2014, the total unencumbered pool availability under the KeyBank Credit Facility was $365,000,000. As of September 30, 2014, the Company had an outstanding balance of $75,000,000 under the KeyBank Credit Facility and had an aggregate unencumbered pool availability of $290,000,000.

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Segment Reporting (Schedule of Information for Reportable Segments) (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Segment Reporting Information [Line Items]
Rental and parking expenses	$ (6,108,000)	$ (3,155,000)	$ (14,429,000)	$ (8,526,000)
Real estate-related notes receivables interest income (expense)	(257,000)	1,936,000	2,174,000	4,195,000
General and administrative expenses	(1,411,000)	(539,000)	(3,212,000)	(1,694,000)
Acquisition related expenses	(4,087,000)	(1,402,000)	(10,598,000)	(4,599,000)
Asset management fees	(4,078,000)	(457,000)	(9,538,000)	(2,083,000)
Depreciation and amortization	(13,002,000)	(4,727,000)	(31,275,000)	(12,591,000)
Income from operations	13,707,000	7,566,000	34,668,000	17,176,000
Interest expense	(5,201,000)	(3,119,000)	(13,428,000)	(9,025,000)
Net income	8,506,000	4,447,000	21,240,000	8,151,000
Operating Segments [Member]
Segment Reporting Information [Line Items]
Rental, parking and tenant reimbursement revenue	42,650,000	15,910,000	101,546,000	42,474,000
Rental and parking expenses	(6,108,000)	(3,155,000)	(14,429,000)	(8,526,000)
Income from operations	36,542,000	12,755,000	87,117,000	33,948,000
Operating Segments [Member] | Data Centers [Member]
Segment Reporting Information [Line Items]
Rental, parking and tenant reimbursement revenue	24,752,000	10,042,000	60,569,000	28,079,000
Rental and parking expenses	(5,123,000)	(2,770,000)	(12,104,000)	(7,554,000)
Income from operations	19,629,000	7,272,000	48,465,000	20,525,000
Operating Segments [Member] | Medical Facilities [Member]
Segment Reporting Information [Line Items]
Rental, parking and tenant reimbursement revenue	17,898,000	5,868,000	40,977,000	14,395,000
Rental and parking expenses	(985,000)	(385,000)	(2,325,000)	(972,000)
Income from operations	$ 16,913,000	$ 5,483,000	$ 38,652,000	$ 13,423,000

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Segment Reporting (Schedule of Capital Additions by Reportable Segments) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Capital additions by segment [Line Items]
Total capital additions	$ 966,024	$ 233,861
Operating Segments [Member] | Data Centers [Member]
Capital additions by segment [Line Items]
Total capital additions	438,539	99,600
Operating Segments [Member] | Medical Facilities [Member]
Capital additions by segment [Line Items]
Total capital additions	527,485	134,261
All Other [Member]
Capital additions by segment [Line Items]
Total capital additions

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Segment Reporting (Narrative) (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014 segment	Sep. 30, 2013
Segment Reporting Information [Line Items]
Number of operating segments for reporting purposes			2
Revenues	$ 42,393,000	$ 17,846,000	$ 103,720,000	$ 46,669,000
Intersegment Elimination [Member]
Segment Reporting Information [Line Items]
Revenues	$ 0	$ 0	$ 0	$ 0

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Related-Party Transactions and Arrangements (Tables)

9 Months Ended

Sep. 30, 2014

Related-Party Transactions and Arrangements [Abstract]

Schedule of Accounts Payable Due to Affiliates

Entity	Fee	September 30, 2014		December 31, 2013
Carter/Validus Advisors, LLC and its affiliates	Acquisition costs	$	4	$	1
Carter/Validus Advisors, LLC and its affiliates	Asset management fees		8,963		102
Carter Validus Real Estate Management Services, LLC	Property management fees		319		105
Carter/Validus Advisors, LLC and its affiliates	General and administrative costs		140		235
Carter/Validus Advisors, LLC and its affiliates	Offering costs		—		253
Carter/Validus Advisors, LLC and its affiliates	Leasing fees		219		—
		$	9,645	$	696

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Notes Payable (Schedule of Notes Payable) (Details) (USD $)	9 Months Ended
	Sep. 30, 2014	Dec. 31, 2013	Sep. 30, 2013	Dec. 31, 2012
Notes Payable [Line Items]
Notes payable	$ 387,730,000	$ 201,177,000	$ 168,425,000	$ 156,847,000
Interest rate of notes payable, minimum	3.50%
Interest rate of notes payable, maximum	6.30%
Weighted average interest rate of notes payable	5.10%
Notes payable maturity date, minimum	Aug. 31, 2016
Notes payable maturity date, maximum	Apr. 30, 2022
Fixed Rate [Member]
Notes Payable [Line Items]
Notes payable	135,002,000	137,049,000
Variable Rate [Member]
Notes Payable [Line Items]
Notes payable	45,009,000
Variable Rate, Subject To Interest Rate Swap [Member]
Notes Payable [Line Items]
Notes payable	$ 207,719,000	$ 64,128,000

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Segment Reporting

9 Months Ended

Sep. 30, 2014

Segment Reporting [Abstract]

Segment Reporting

Note 14—Segment Reporting

The Company aggregates data centers and medical facilities into two operating segments for reporting purposes. The Company’s investments in data centers and medical facilities are based on certain underwriting assumptions and operating criteria, which are different for data centers and medical facilities. Management reviews the performance and makes operating decisions based on these two reportable segments. There were no intersegment sales or transfers during the three and nine months ended September 30, 2014 and 2013. 

The Company evaluates performance based on net operating income of the combined properties in each segment. Net operating income, a non-GAAP financial measure, is defined as total revenues, less rental expenses, which excludes depreciation and amortization, general and administrative expenses, acquisition related expenses, asset management fees, interest expense and interest income. The Company believes that segment net operating income serves as a useful supplement to net income because it allows investors and management to measure unlevered property-level operating results and to compare operating results to the operating results of other real estate companies and between periods on a consistent basis. Segment net operating income should not be considered as an alternative to net income determined in accordance with GAAP as an indicator of financial performance, and accordingly, the Company believes that in order to facilitate a clear understanding of the consolidated historical operating results, segment profit should be examined in conjunction with net income as presented in the accompanying condensed consolidated financial statements and data included elsewhere in this Quarterly Report on Form 10-Q. 

Interest income, general and administrative expenses, acquisition related expenses, asset management fees, depreciation and amortization and interest expense are not allocated to individual segments for purposes of assessing segment performance. 

Non-segment assets primarily consist of corporate assets including cash and cash equivalents, real estate and escrow deposits, deferred financing costs, real estate-related notes receivables and other assets not attributable to individual properties. 

Summary information for the reportable segments during the three and nine months ended September 30, 2014 and 2013 are as follows (amounts in thousands):

	Data		Medical		Three Months Ended
	Centers		Facilities		September 30, 2014
Revenue:
Rental, parking and tenant reimbursement revenue	$	24,752	$	17,898	$	42,650
Expenses:
Rental and parking expenses		(5,123)		(985)		(6,108)
Segment net operating income	$	19,629	$	16,913		36,542
Revenue:
Real estate-related notes receivables interest expense						(257)
Expenses:
General and administrative expenses						(1,411)
Acquisition related expenses						(4,087)
Asset management fees						(4,078)
Depreciation and amortization						(13,002)
Income from operations						13,707
Interest expense						(5,201)
Net income					$	8,506

	Data		Medical		Three Months Ended
	Centers		Facilities		September 30, 2013
Revenue:
Rental, parking and tenant reimbursement revenue	$	10,042	$	5,868	$	15,910
Expenses:
Rental and parking expenses		(2,770)		(385)		(3,155)
Segment net operating income	$	7,272	$	5,483		12,755
Revenue:
Real estate-related notes receivables interest income						1,936
Expenses:
General and administrative expenses						(539)
Acquisition related expenses						(1,402)
Asset management fees						(457)
Depreciation and amortization						(4,727)
Income from operations						7,566
Interest expense						(3,119)
Net income					$	4,447

	Data		Medical		Nine Months Ended
	Centers		Facilities		September 30, 2014
Revenue:
Rental, parking and tenant reimbursement revenue	$	60,569	$	40,977	$	101,546
Expenses:
Rental and parking expenses		(12,104)		(2,325)		(14,429)
Segment net operating income	$	48,465	$	38,652		87,117
Revenue:
Real estate-related notes receivables interest income						2,174
Expenses:
General and administrative expenses						(3,212)
Acquisition related expenses						(10,598)
Asset management fees						(9,538)
Depreciation and amortization						(31,275)
Income from operations						34,668
Interest expense						(13,428)
Net income					$	21,240

	Data		Medical		Nine Months Ended
	Centers		Facilities		September 30, 2013
Revenue:
Rental, parking and tenant reimbursement revenue	$	28,079	$	14,395	$	42,474
Expenses:
Rental and parking expenses		(7,554)		(972)		(8,526)
Segment net operating income	$	20,525	$	13,423		33,948
Revenue:
Real estate-related notes receivables interest income						4,195
Expenses:
General and administrative expenses						(1,694)
Acquisition related expenses						(4,599)
Asset management fees						(2,083)
Depreciation and amortization						(12,591)
Income from operations						17,176
Interest expense						(9,025)
Net income					$	8,151

Assets by reportable segments as of September 30, 2014 and December 31, 2013 are as follows (amounts in thousands):

	September 30, 2014		December 31, 2013
Assets by segment:
Data centers	$	1,080,021	$	639,009
Medical facilities		931,380		358,584
All other		86,275		67,071
Total assets	$	2,097,676	$	1,064,664

Capital additions by reportable segments for the nine months ended September 30, 2014 and 2013 are as follows (amounts in thousands):

	Nine Months Ended
	September 30,
	2014		2013
Capital additions by segment:
Data centers	$	438,539	$	99,600
Medical facilities		527,485		134,261
All other		—		—
Total capital additions	$	966,024	$	233,861

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Summary of Significant Accounting Policies (Policy)

9 Months Ended

Sep. 30, 2014

Summary of Significant Accounting Policies [Abstract]

Principles of Consolidation and Basis of Presentation

Principles of Consolidation and Basis of Presentation

The accompanying condensed consolidated financial statements include the accounts of the Company, the Operating Partnership, all majority-owned subsidiaries and controlled subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates

Use of Estimates

The preparation of the financial statements in conformity with GAAP necessarily 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 condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Concentration of Credit Risk and Significant Leases

Concentration of Credit Risk and Significant Leases

As of September 30, 2014, the Company had cash on deposit, including restricted cash, in 11 financial institutions, 10 of which had deposits in excess of current federally insured levels totaling $87.3 million; however, the Company has not experienced any losses in such accounts. The Company limits its cash investments to financial institutions with high credit standing; therefore, the Company believes it is not exposed to any significant credit risk on its cash deposits. To date, the Company has experienced no loss or lack of access to cash in its accounts. Concentration of credit risk with respect to accounts receivable from tenants is limited.

As of September 30, 2014, the Company owned real estate investments in 33 metropolitan statistical areas, or MSAs, (including two real estate investments owned through consolidated partnerships), one of which accounted for 10.0% or more of rental revenue. Real estate investments located in the Dallas-Ft. Worth-Arlington, Texas area accounted for an aggregate of 18.6% of rental revenue for the nine months ended September 30, 2014.

As of September 30, 2014, the Company had one tenant that accounted for 10.0% or more of rental revenue. The leases with AT&T Services, Inc. accounted for 21.0% of rental revenue for the nine months ended September 30, 2014.

Share Repurchase Program

Share Repurchase Program

The Company approved a share repurchase program that allows for repurchases of shares of the Company’s common stock when certain criteria are met. The share repurchase program provides that all redemptions during any calendar year, including those upon death or a qualifying disability of a stockholder, are limited to those that can be funded with proceeds raised from the DRIP.

Repurchases of shares of the Company’s common stock are at the sole discretion of the Company’s board of directors. In addition, the Company’s board of directors, at its sole discretion, may amend, suspend, reduce, terminate or otherwise change the share repurchase program upon 30 days’ prior notice to the Company’s stockholders for any reason it determines appropriate. During the nine months ended September 30, 2014, the Company received valid redemption requests related to approximately 295,000 shares of common stock, all of which were redeemed for an aggregate purchase price of approximately $2,837,000 (an average of $9.62 per share). During the nine months ended September 30, 2013, the Company received valid redemption requests related to approximately 29,000 shares of common stock, all of which were redeemed for an aggregate purchase price of approximately $273,000 (an average of $9.41 per share).

Earnings Per Share

Earnings Per Share

Basic earnings per share attributable for all periods presented are computed by dividing net income attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Shares of non-vested restricted common stock give rise to potentially dilutive shares of common stock. Diluted earnings per share are computed based on the weighted average number of shares outstanding and all potentially dilutive securities. Diluted earnings per share reflect the effect of approximately 17,000 shares and 17,000 shares for the three months ended September 30, 2014 and 2013, respectively, and 19,000 shares and 18,000 shares for the nine months ended September 30, 2014 and 2013, respectively, of non-vested shares of restricted common stock that were outstanding as of such period.

Interest Capitalization

Interest Capitalization

Interest incurred related to the renovation of acquired real estate investments is capitalized during the renovation period. The Company capitalized interest of approximately $831,000 and $1,362,000 for the three and nine months ended September 30, 2014, respectively, and $0 for the three and nine months ended September 30, 2013.

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

In April 2014, the financial accounting standards board, or the FASB, issued ASU 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, or ASU 2014-08. ASU 2014-08 changes the criteria for reporting discontinued operations while enhancing disclosures in this area. Under the new guidance, only disposals representing a strategic shift in operations should be presented as discontinued operations. Those strategic shifts should have a major effect on the company’s operations and financial results. Examples include a disposal of a major geographic area, a major line of business, or a major equity method investment. Additionally, the new guidance requires expanded disclosures about discontinued operations that will provide financial statement users with more information about the assets, liabilities, income, and expenses of discontinued operations. The adoption of ASU 2014-08 is effective prospectively for reporting periods beginning on or after December 15, 2014. The Company does not expect the adoption of ASU 2014-08 to have a material effect on the Company’s condensed consolidated financial statements.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, or ASU 2014-09. The objective of ASU 2014-09 is to clarify the principles for recognizing revenue and to develop a common revenue standard for GAAP. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods and 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. ASU 2014-09 defines a five-step process to achieve this core principle, which may require more judgment and estimates within the revenue recognition process than are required under existing GAAP. The adoption of ASU 2014-09 is effective retrospectively for reporting periods beginning after December 15, 2016. Early adoption of ASU 2014-09 is not permitted. The Company is in the process of evaluating the impact ASU 2014-09 will have on the Company’s consolidated financial statements.

Reclassifications

Reclassifications

Certain prior period amounts have been reclassified to conform to the current financial statement presentation, with no effect on the Company’s condensed consolidated financial position or results of operations.

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Future Minimum Rent (Schedule of Future Minimum Rental Income from Non-Cancelable Operating Leases) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014
Future Minimum Rent [Abstract]
Three months ending December 31, 2014	$ 37,552
2015	152,031
2016	154,060
2017	156,628
2018	159,735
Thereafter	1,744,210
Total	$ 2,404,216

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Summary of Significant Accounting Policies (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014 item	Sep. 30, 2013	Sep. 30, 2014 item	Sep. 30, 2013
Summary of Significant Accounting Policies [Line Items]
Number of financial institutions in which Company has deposits	11		11
Number of financial institutions in which Company has deposits in excess of federally insured levels	10		10
Cash on deposit in excess of federally insured levels	$ 87,300,000		$ 87,300,000
Number of metropolitan statistical areas in which Company owns rental property	33		33
Period of notice required for changes to share repurchase program			30 days
Repurchase of common stock			2,837,000
Repurchase of common stock, average price per share			$ 9.62	$ 9.41
Diluted earnings per share outstanding adjustment, shares	17,000	17,000	19,000	18,000
Capitalized interest	831,000	0	1,362,000	0
Rental Revenue [Member] | Geographic Concentration Risk [Member]
Summary of Significant Accounting Policies [Line Items]
Number of metropolitan statistical areas in which Company owns rental property	1		1
Rental Revenue [Member] | Customer Concentration Risk [Member]
Summary of Significant Accounting Policies [Line Items]
Number of tenants			1
Dallas-Ft. Worth-Arlington, Texas Area [Member] | Rental Revenue [Member] | Geographic Concentration Risk [Member]
Summary of Significant Accounting Policies [Line Items]
Concentration risk, percentage			18.60%
AT&T Services, Inc. [Member] | Rental Revenue [Member] | Customer Concentration Risk [Member]
Summary of Significant Accounting Policies [Line Items]
Concentration risk, percentage			21.00%
Common Stock [Member]
Summary of Significant Accounting Policies [Line Items]
Repurchase of common stock, shares			295,273	29,000
Repurchase of common stock			2,000
Common Stock Including Additional Paid in Capital [Member]
Summary of Significant Accounting Policies [Line Items]
Repurchase of common stock				$ 273,000
Consolidated Partnerships [Member]
Summary of Significant Accounting Policies [Line Items]
Number of Company owned real estate investments	2		2

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Condensed Consolidated Statement Of Stockholders' Equity (USD $)	Parent [Member]	Common Stock [Member]	Additional Paid in Capital [Member]	Accumulated Distributions in Excess of Earnings [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Noncontrolling Interests [Member]	Total
Balance, at Dec. 31, 2013	$ 609,196,000	$ 731,000	$ 641,019,000	$ (33,154,000)	$ 600,000	$ 32,087,000	$ 641,283,000
Balance, shares at Dec. 31, 2013		73,137,569
Issuance of common stock, shares		97,015,664
Issuance of common stock	966,209,000	970,000	965,239,000				966,209,000
Vesting of restricted stock, shares		8,250
Issuance of common stock under the distribution reinvestment plan, shares		3,545,598
Issuance of common stock under the distribution reinvestment plan	33,684,000	36,000	33,648,000				33,684,000
Contributions from noncontrolling interests						39,914,000	39,914,000
Distributions to noncontrolling interests						(2,470,000)	(2,470,000)
Distributions declared to common stockholders	(69,826,000)			(69,826,000)			(69,826,000)
Commissions on sale of common stock and related dealer-manager fees	(90,665,000)		(90,665,000)				(90,665,000)
Other offering costs	(4,273,000)		(4,273,000)				(4,273,000)
Redemption of common stock, shares		(295,273)
Redemption of common stock	(2,837,000)	(2,000)	(2,835,000)				(2,837,000)
Stock-based compensation	68,000		68,000				68,000
Other comprehensive loss	(726,000)				(726,000)		(726,000)
Net income	18,803,000			18,803,000		2,437,000	21,240,000
Balance, at Sep. 30, 2014	$ 1,459,633,000	$ 1,735,000	$ 1,542,201,000	$ (84,177,000)	$ (126,000)	$ 71,968,000	$ 1,531,601,000
Balance, shares at Sep. 30, 2014		173,411,808

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Real Estate Investments

9 Months Ended

Sep. 30, 2014

Real Estate Investments [Abstract]

Real Estate Investments

Note 3—Real Estate Investments

The Company reimburses the Advisor, or its affiliates, for acquisition expenses related to selecting, evaluating, acquiring and investing in properties. The reimbursement of acquisition expenses, acquisition fees and real estate commissions and other fees paid will not exceed, in the aggregate, 6.0% of the contract purchase price or total development costs of a certain acquisition, unless fees in excess of such limits are approved by a majority of the Company’s disinterested directors, including a majority of its independent directors. For the nine months ended September 30, 2014 and 2013, acquisition fees and acquisition related costs totaled $22,878,000 and $6,443,000, respectively, which did not exceed 6.0% of the purchase price of the Company’s acquisitions during such periods. Acquisition fees and expenses in connection with the acquisition of properties determined to be business combinations are expensed as incurred, including investment transactions that are no longer under consideration, and are included in acquisition related expenses in the accompanying condensed consolidated statements of comprehensive income. Acquisition fees and expenses associated with transactions determined to be an asset purchase are capitalized. The Company expensed acquisition fees and expenses of approximately $4,087,000 and $1,402,000 for the three months ended September 30, 2014 and 2013, respectively, and $10,598,000 and $4,599,000, for the nine months ended September 30, 2014 and 2013, respectively.The Company capitalized acquisition fees and expenses of approximately $7,451,000 and $1,844,000for the three months ended September 30, 2014 and 2013, respectively, and $12,280,000 and $1,844,000for the nine months ended September 30, 2014 and 2013, respectively.

2014 Real Estate Investments

During the nine months ended September 30, 2014, the Company completed fourteen real estate acquisitions, of which eight of the real estate acquisitions were determined to be business combinations and six of the real estate acquisitions were determined to be asset acquisitions. The following table summarizes the cash paid for investments in real estate (amounts in thousands):

	Nine Months Ended
	September 30, 2014
Investments in real estate:
Purchase price of business combinations	$	469,586
Purchase price of asset acquisitions (1)		508,394
Total purchase price of assets acquired		977,980
Non-cash transactions:
Real estate-related notes receivables converted to investment in real estate		20,000
Contingent consideration (2)		5,030
Cash paid for investments in real estate (3)	$	952,950

(1)Of this amount, $53,697,000 was allocated to intangible assets.

(2)Liabilities for contingent consideration are measured at fair value each reporting period with the acquisition-date fair value included as part of the consideration transferred, and subsequent changes to fair value will be recorded within earnings. See Note 15—“Fair Value” for information about fair value measurements of contingent consideration liabilities.

(3)In connection with the acquisition of two real estate investments, the Company obtained financing of $134,000,000, with the remaining balance of the purchase price paid using cash proceeds from the Offering.

Consolidated Partnership

Bay Area Regional Medical Center

On July 11, 2014, the Company, through a majority owned consolidated subsidiary of the Operating Partnership, completed the acquisition of a medical center, or the Bay Area Regional Medical Center, located in Webster, Texas, for the purchase price of $198,000,000, plus closing costs. The acquisition of the Bay Area Regional Medical Center was funded by a $100,000,000 loan, $39,900,000 in equity investment from an unaffiliated investor in exchange for a 40% ownership interest and the Operating Partnership funded $73,847,000 in equity investment in exchange for a 60% ownership interest with net proceeds from the Offering. Upon acquisition, the Company recorded the fair value of noncontrolling interest at $39,900,000.

On July 7, 2014, the Operating Partnership entered into a limited liability agreement, or the Agreement, with the unaffiliated investor. The material terms of the Agreement provide for the following: (a) the Operating Partnership will serve as the manager of the partnership and will have exclusive and complete responsibility for the operations and management of the partnership; provided, however, that the investor has approval rights over certain major decisions; (b) the Operating Partnership, through its wholly owned subsidiary, and the investor will be entitled to a property management fee equal to 3% of their pro rata share of the net rental revenues from the property; (c) earnings are allocated to the Operating Partnership and the unaffiliated investor in proportion to their respective ownership percentage; (d) upon the request of the tenant, the Operating Partnership will contribute up to an additional $35,000,000 related to the build out of the property and upon the receipt of additional funding the ownership interest in partnership will be adjusted proportionally to each partner’s investment and (e) the investor may sell its ownership interest and the Operating Partnership has the right (but not obligation) to first purchase the investor interest at the purchase price, based on the price of percentage of ownership interest.

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Related-Party Transactions And Arrangements (Schedule of Accounts Payable Due to Affiliates) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Related Party Transaction [Line Items]
Accounts payable due to affiliates	$ 9,645	$ 696
Carter/Validus Advisors, LLC And/Or Its Affiliates [Member] | Acquisition Costs [Member]
Related Party Transaction [Line Items]
Accounts payable due to affiliates	4	1
Carter/Validus Advisors, LLC And/Or Its Affiliates [Member] | Asset Management Fees [Member]
Related Party Transaction [Line Items]
Accounts payable due to affiliates	8,963	102
Carter/Validus Advisors, LLC And/Or Its Affiliates [Member] | General And Administrative Costs [Member]
Related Party Transaction [Line Items]
Accounts payable due to affiliates	140	235
Carter/Validus Advisors, LLC And/Or Its Affiliates [Member] | Offering Costs [Member]
Related Party Transaction [Line Items]
Accounts payable due to affiliates		253
Carter/Validus Advisors, LLC And/Or Its Affiliates [Member] | Leasing Fees [Member]
Related Party Transaction [Line Items]
Accounts payable due to affiliates	219
Carter Validus Real Estate Management Services, LLC [Member] | Property Management Fees [Member]
Related Party Transaction [Line Items]
Accounts payable due to affiliates	$ 319	$ 105

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Fair Value (Schedule of Reconciliation of Fair Value of Recurring Level 3 Fair Value Measurements) (Details) (Contingent Consideration Obligations [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended				9 Months Ended
	Sep. 30, 2014		Sep. 30, 2013		Sep. 30, 2014		Sep. 30, 2013
Contingent Consideration Obligations [Member]
Contingent consideration obligations:
Beginning balance	$ 5,030
Additions to contingent consideration obligations					5,030
Adjustment to contingent consideration obligations
Total (gains) losses included in earnings		[1]		[1]		[1]		[1]
Settlements of contingent consideration obligations
Ending balance	5,030				5,030
Unrealized (gains) losses still held		[2]		[2]		[2]		[2]

[1] Changes in the fair value of contingent consideration obligations are reported in acquisition related expenses in the accompanying condensed consolidated statements of comprehensive income.

[2] Represents the unrealized losses or gains recorded in earnings or other comprehensive income (loss) during the period for liabilities classified as Level 3 that are still held at the end of the period.

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Real Estate Investments (Tables)

9 Months Ended

Sep. 30, 2014

Real Estate Investments [Abstract]

Schedule of Cash Paid for Investments in Real Estate

	Nine Months Ended
	September 30, 2014
Investments in real estate:
Purchase price of business combinations	$	469,586
Purchase price of asset acquisitions (1)		508,394
Total purchase price of assets acquired		977,980
Non-cash transactions:
Real estate-related notes receivables converted to investment in real estate		20,000
Contingent consideration (2)		5,030
Cash paid for investments in real estate (3)	$	952,950

(1)Of this amount, $53,697,000 was allocated to intangible assets.

(2)Liabilities for contingent consideration are measured at fair value each reporting period with the acquisition-date fair value included as part of the consideration transferred, and subsequent changes to fair value will be recorded within earnings. See Note 15—“Fair Value” for information about fair value measurements of contingent consideration liabilities.

(3)In connection with the acquisition of two real estate investments, the Company obtained financing of $134,000,000, with the remaining balance of the purchase price paid using cash proceeds from the Offering.

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Derivative Instruments and Hedging Activities (Schedule of Offsetting of Derivative Liabilities) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Derivative Instruments and Hedging Activities [Abstract]
Gross Amounts of Recognized Liabilities	$ 676	$ 44
Gross Amounts Offset in the Balance Sheet
Net Amounts Of Liabilities presented in the Balance Sheet	676	44
Gross Amounts Not Offset in the Balance Sheet, Financial Instruments Collateral
Gross Amounts Not Offset in the Balance Sheet, Cash Collateral
Net Amount	$ 676	$ 44

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Derivative Instruments and Hedging Activities (Tables)

9 Months Ended

Sep. 30, 2014

Derivative Instruments and Hedging Activities [Abstract]

Schedule of the Notional Amount and Fair Value of Derivative Instruments

September 30, 2014

December 31, 2013

Derivatives

Balance

Outstanding

Fair Value of

Outstanding

Fair Value of

Designated as

Sheet

Effective

Maturity

Notional

Notional

Hedging Instruments

Location

Dates

Dates

Amount

Asset

(Liability)

Amount

Asset

(Liability)

Interest rate

Other assets/Accounts

10/12/2012 to

10/11/2017 to

$

262,719

$

550

$

(676)

$

119,128

$

644

$

(44)

swaps

payable and other

07/11/2014

07/11/2019

liabilities

Schedule of Gains or Losses Recognized on Derivative Instruments

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
Derivatives in Cash Flow Hedging Relationships (Interest Rate Swaps)	2014		2013		2014		2013
Amount of (loss) income recognized in OCI on derivatives (effective portion)	$	(59)	$	(683)	$	(2,513)	$	732
Amounts reclassified from accumulated other
comprehensive income (loss) (effective portion)	$	841	$	189	$	1,787	$	521

Schedule of Offsetting of Derivative Assets

Offsetting of Derivative Assets
							Gross Amounts Not Offset in the Balance Sheet
		Gross Amounts of Recognized Assets		Gross Amounts Offset in the Balance Sheet		Net Amounts of Assets Presented in the Balance Sheet		Financial Instruments Collateral		Cash Collateral		Net Amount
September 30, 2014	$	550	$	—	$	550	$	—	$	—	$	550
December 31, 2013	$	644	$	—	$	644	$	—	$	—	$	644

Schedule of Offsetting of Derivative Liabilities

Offsetting of Derivative Liabilities
							Gross Amounts Not Offset in the Balance Sheet
		Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Balance Sheet		Net Amounts of Liabilities Presented in the Balance Sheet		Financial Instruments Collateral		Cash Collateral		Net Amount
September 30, 2014	$	676	$	—	$	676	$	—	$	—	$	676
December 31, 2013	$	44	$	—	$	44	$	—	$	—	$	44

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Business Combinations

9 Months Ended

Sep. 30, 2014

Business Combinations [Abstract]

Business Combinations

Note 13—Business Combinations 

During the nine months ended September 30, 2014, the Company completed the acquisition of 100% fee simple interest in eight real estate investments (four data centers and four medical facilities) that were determined to be business combinations, comprised of ten  buildings. The aggregate purchase price of the acquisitions determined to be business combinations was $469,586,000, plus closing costs, including $5,030,000 of contingent consideration.

The following table summarizes the acquisitions determined to be business combinations during the nine months ended September 30, 2014:

	Date	Ownership
Property Description	Acquired	Percentage
Cypress Pointe Surgical Hospital	03/14/2014	100%
Milwaukee Data Center	03/28/2014	100%
Charlotte Data Center	04/28/2014	100%
Chicago Data Center	05/20/2014	100%
Rhode Island Rehabilitation Healthcare Facility	08/28/2014	100%
Select Medical Portfolio	08/29/2014	100%
Alpharetta Data Center	09/05/2014	100%
Lafayette Surgical Hospital	09/19/2014	100%

Results of operations for the acquisitions determined to be business combinations are reflected in the accompanying condensed consolidated statements of comprehensive income for the nine months ended September 30, 2014 for the period subsequent to the acquisition date of each property. For the period from the acquisition date through September 30, 2014, the Company recognized $12,832,000 of revenues and a net loss of $5,718,000 for its business combination acquisitions. In addition, during the nine months ended September 30, 2014, the Company incurred aggregate non-recurring charges related to acquisition fees and costs of $10,277,000 in connection with acquisitions determined to be business combinations, which are included in the accompanying condensed consolidated statements of comprehensive income.

The following table summarizes management’s allocation of the fair value of the acquisitions determined to be business combinations during the nine months ended September 30, 2014 (amounts in thousands):

	Total
Land	$	21,656
Buildings and improvements		409,131
In-place leases		45,621
Tenant improvements		1,803
Above-market leases		2,505
Total assets acquired		480,716
Below-market leases		(5,842)
Ground leasehold liabilities		(5,288)
Total liabilities acquired		(11,130)
Net assets acquired	$	469,586

Assuming the business combinations described above had occurred on January 1, 2013, pro forma revenues, net income and net income attributable to common stockholders would have been as follows for the three and nine month periods below (amounts in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2014		2013		2014		2013
Pro forma basis:
Revenues	$	45,110	$	30,803	$	125,144	$	90,065
Net income	$	12,812	$	10,416	$	37,760	$	28,479
Net income attributable to common stockholders	$	11,660	$	9,820	$	35,323	$	27,041

The pro forma information for the three and nine months ended September 30, 2014 was adjusted to exclude $4,236,000 and$10,277,000, respectively, of acquisition expenses recorded during such periods. The pro forma information is presented for informational purposes only and may not be indicative of what actual results of operations would have been had the transactions occurred at the beginning of 2013, nor is it necessarily indicative of future operating results.