10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

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

For the quarterly period ended September 30, 2018

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 000-55437

COLE CREDIT PROPERTY TRUST V, INC.

(Exact name of registrant as specified in its charter)

Maryland	46-1958593
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)
2325 East Camelback Road, 10th Floor Phoenix, Arizona 85016	(602) 778-8700
(Address of principal executive offices; zip code)	(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address 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  o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files).    Yes  x    No  o

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

Large accelerated filer	¨	Accelerated filer	¨	Non-accelerated filer	x
Smaller reporting company	¨	Emerging growth company	¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

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 7, 2018, there were approximately 14.9 million shares of Class A common stock, par value $0.01 per share, and 1.9 million shares of Class T common stock, par value $0.01 per share, of Cole Credit Property Trust V, Inc. outstanding.

COLE CREDIT PROPERTY TRUST V, INC.

INDEX

PART I — FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets as of September 30, 2018 and December 31, 2017	3
Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2018 and 2017	4
Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2018 and 2017	5
Condensed Consolidated Statement of Stockholders’ Equity for the nine months ended September 30, 2018	6
Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2018 and 2017	7
Notes to Condensed Consolidated Financial Statements	8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3. Quantitative and Qualitative Disclosures About Market Risk	34
Item 4. Controls and Procedures	35
PART II — OTHER INFORMATION
Item 1. Legal Proceedings	36
Item 1A. Risk Factors	36
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	37
Item 3. Defaults Upon Senior Securities	38
Item 4. Mine Safety Disclosures	38
Item 5. Other Information	38
Item 6. Exhibits	39
Signature	40

2

PART I — FINANCIAL INFORMATION

Item 1.      Financial Statements

COLE CREDIT PROPERTY TRUST V, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts) (Unaudited)

	September 30, 2018			December 31, 2017
ASSETS
Real estate assets:
Land	$	151,868		$	142,986
Buildings and improvements	448,503			416,850
Intangible lease assets	83,537			79,268
Total real estate assets, at cost	683,908			639,104
Less: accumulated depreciation and amortization	(60,449		)	(46,196		)
Total real estate assets, net	623,459			592,908
Cash and cash equivalents	1,032			1,173
Restricted cash	387			346
Derivative assets, prepaid expenses and other assets	2,160			1,546
Rents and tenant receivables, net	8,263			7,021
Deferred costs, net	994			183
Total assets	$	636,295		$	603,177
LIABILITIES AND STOCKHOLDERS’ EQUITY
Credit facility and notes payable, net	$	332,854		$	308,559
Accounts payable and accrued expenses	3,861			2,969
Due to affiliates	2,147			1,787
Intangible lease liabilities, net	3,569			4,019
Distributions payable	2,120			2,049
Deferred rental income and other liabilities	1,033			1,133
Total liabilities	345,584			320,516
Commitments and contingencies
Redeemable common stock	10,493			10,243
STOCKHOLDERS’ EQUITY
Preferred stock, $0.01 par value per share; 10,000,000 shares authorized, none issued and outstanding	—			—
Class A common stock, $0.01 par value per share; 245,000,000 shares authorized, 14,824,364 and 14,241,888 shares issued and outstanding as of September 30, 2018 and December 31, 2017, respectively	148			142
Class T common stock, $0.01 par value per share; 245,000,000 shares authorized, 1,853,106 and 1,347,920 shares issued and outstanding as of September 30, 2018 and December 31, 2017, respectively	19			13
Capital in excess of par value	365,004			341,472
Accumulated distributions in excess of earnings	(86,553		)	(70,022		)
Accumulated other comprehensive income	1,600			813
Total stockholders’ equity	280,218			272,418
Total liabilities, redeemable common stock and stockholders’ equity	$	636,295		$	603,177

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

3

COLE CREDIT PROPERTY TRUST V, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share amounts) (Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
Revenues:
Rental income	$	12,133		$	10,303		$	35,449		$	29,022
Tenant reimbursement income	1,832			1,446			5,164			3,558
Total revenues	13,965			11,749			40,613			32,580
Operating expenses:
General and administrative	1,176			1,135			3,412			3,362
Property operating	938			491			2,230			1,560
Real estate tax	1,157			1,012			3,492			2,617
Advisory fees and expenses	1,584			1,389			4,603			3,965
Acquisition-related	52			35			187			527
Depreciation and amortization	4,664			4,009			13,944			11,159
Total operating expenses	9,571			8,071			27,868			23,190
Operating income	4,394			3,678			12,745			9,390
Other income (expense):
Interest expense and other, net	(3,502		)	(2,960		)	(10,440		)	(8,324		)
Net income	$	892		$	718		$	2,305		$	1,066
Class A Common Stock:
Net income	$	882		$	724		$	2,321		$	1,136
Basic and diluted weighted average number of common shares outstanding	14,760,585			13,989,986			14,561,171			13,284,274
Basic and diluted net income per common share	$	0.06		$	0.05		$	0.16		$	0.09
Distributions declared per common share	$	0.40		$	0.40		$	1.18		$	1.18
Class T Common Stock:
Net income (loss)	$	10		$	(6	)	$	(16	)	$	(70	)
Basic and diluted weighted average number of common shares outstanding	1,794,938			981,505			1,638,680			703,375
Basic and diluted net income (loss) per common share	$	0.01		$	(0.01	)	$	(0.01	)	$	(0.10	)
Distributions declared per common share	$	0.40		$	0.40		$	1.18		$	1.18

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

4

COLE CREDIT PROPERTY TRUST V, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands) (Unaudited)

	Three Months Ended September 30,					Nine Months Ended September 30,
	2018			2017		2018			2017
Net income	$	892		$	718	$	2,305		$	1,066
Other comprehensive income
Unrealized gain on interest rate swaps	476			52		845			81
Amount of (gain) loss reclassified from other comprehensive income into income as interest expense and other, net	(17		)	110		(90		)	567
Total other comprehensive income	459			162		755			648
Total comprehensive income	$	1,351		$	880	$	3,060		$	1,714

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

5

COLE CREDIT PROPERTY TRUST V, INC.

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

(in thousands, except share amounts) (Unaudited)

	Class A Common Stock					Class T Common Stock				Capital in  Excess of Par Value			Accumulated Distributions in Excess of Earnings			Accumulated Other Comprehensive Income		Total Stockholders’ Equity
	Number of Shares		Par  Value			Number of Shares		Par  Value
Balance, January 1, 2018	14,241,888		$	142		1,347,920		$	13	$	341,472		$	(70,022	)	$	813	$	272,418
Cumulative effect of accounting changes	—		—			—		—		—			(32		)	32		—
Issuance of common stock	960,340		10			506,344		6		35,218			—			—		35,234
Distributions declared	—		—			—		—		—			(18,804		)	—		(18,804		)
Commissions on stock sales and related dealer manager fees	—		—			—		—		(1,748		)	—			—		(1,748		)
Other offering costs	—		—			—		—		(708		)	—			—		(708		)
Distribution and stockholder servicing fees	—		—			—		—		(448		)	—			—		(448		)
Redemptions of common stock	(377,864	)	(4		)	(1,158	)	—		(8,532		)	—			—		(8,536		)
Changes in redeemable common stock	—		—			—		—		(250		)	—			—		(250		)
Comprehensive income	—		—			—		—		—			2,305			755		3,060
Balance, September 30, 2018	14,824,364		$	148		1,853,106		$	19	$	365,004		$	(86,553	)	$	1,600	$	280,218

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

6

COLE CREDIT PROPERTY TRUST V, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands) (Unaudited)

	Nine Months Ended September 30,
	2018			2017
Cash flows from operating activities:
Net income	$	2,305		$	1,066
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization, net	14,122			11,364
Bad debt expense	14			9
Straight-line rental income	(1,207		)	(1,150		)
Amortization of deferred financing costs	669			818
Write-off of deferred financing costs	148			—
Gain on extinguishment of debt	—			(108		)
Changes in assets and liabilities:
Rents and tenant receivables	(49		)	(239		)
Prepaid expenses and other assets	(98		)	(524		)
Accounts payable and accrued expenses	947			2,019
Deferred rental income and other liabilities	(100		)	(338		)
Due to affiliates	182			(492		)
Due from affiliates	14			—
Net cash provided by operating activities	16,947			12,425
Cash flows from investing activities:
Investment in real estate assets and capital expenditures	(45,178		)	(103,477		)
Payment of property escrow deposits	(325		)	(3,025		)
Refund of property escrow deposits	550			3,259
Net cash used in investing activities	(44,953		)	(103,243		)
Cash flows from financing activities:
Proceeds from issuance of common stock	26,448			64,559
Redemptions of common stock	(8,536		)	(3,733		)
Offering costs on issuance of common stock	(2,456		)	(6,193		)
Distribution and stockholder servicing fees paid	(270		)	(123		)
Proceeds from credit facility and notes payable	270,000			102,200
Repayments of credit facility and notes payable	(244,500		)	(73,950		)
Distributions to investors	(9,947		)	(8,341		)
Deferred financing costs paid	(2,833		)	(412		)
Net cash provided by financing activities	27,906			74,007
Net decrease in cash and cash equivalents and restricted cash	(100		)	(16,811		)
Cash and cash equivalents and restricted cash, beginning of period	1,519			19,255
Cash and cash equivalents and restricted cash, end of period	$	1,419		$	2,444
Reconciliation of cash and cash equivalents and restricted cash to the condensed consolidated balance sheets:
Cash and cash equivalents	$	1,032		$	2,097
Restricted cash	387			347
Total cash and cash equivalents and restricted cash	$	1,419		$	2,444
Supplemental disclosures of non-cash investing and financing activities:
Distributions declared and unpaid	$	2,120		$	1,947
Change in accrued distribution and stockholder servicing fees	$	449		$	779
Accrued capital expenditures	$	15		$	177
Common stock issued through distribution reinvestment plan	$	8,786		$	7,881
Change in fair value of interest rate swaps	$	755		$	648
Supplemental cash flow disclosures:
Interest paid	$	9,673		$	7,533

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

7

COLE CREDIT PROPERTY TRUST V, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2018 (Unaudited)

NOTE 1 — ORGANIZATION AND BUSINESS

Cole Credit Property Trust V, Inc. (the “Company”) is a Maryland corporation, incorporated on December 12, 2012, that elected to be taxed, and currently qualifies, as a real estate investment trust (“REIT”) for U.S. federal income tax purposes beginning with its taxable year ended December 31, 2014. The Company is the sole general partner of and owns, directly or indirectly, 100% of the partnership interests in Cole Operating Partnership V, LP, a Delaware limited partnership. 

On November 13, 2017, VEREIT Operating Partnership, L.P. (“VEREIT OP”), a former affiliated entity of the Company’s sponsor, CCO Group (as defined below), entered into a Purchase and Sale Agreement with CCA Acquisition, LLC (“CCA”), a newly-formed affiliate of CIM Group, LLC (“CIM”), pursuant to which CCA agreed to acquire all of the issued and outstanding shares of common stock of Cole Capital Advisors, Inc., the direct or indirect owner of Cole REIT Advisors V, LLC (“CR V Advisors”), Cole Capital Corporation and CREI Advisors, LLC (“CREI Advisors”), the Company’s external advisor, dealer manager and property manager, respectively (the “Transaction”).

On February 1, 2018, the Transaction was completed. Immediately following the completion of the Transaction, Cole Capital Advisors, Inc. and the Company’s dealer manager were each converted into Delaware limited liability companies, Cole Capital Advisors, Inc.’s name was changed to CCO Group, LLC, and the dealer manager’s name was changed to CCO Capital, LLC (“CCO Capital”). As a result of the Transaction, CIM owns and/or controls CCO Group, LLC and its subsidiaries (collectively, “CCO Group”), and CCO Group, LLC owns and controls CR V Advisors, CCO Capital and CREI Advisors, the Company’s external advisor, dealer manager for the Offerings (as defined below) and property manager, respectively.

In addition, as part of the Transaction, VEREIT OP and CCO Group, LLC entered into a services agreement (the “Services Agreement”) pursuant to which VEREIT OP is obligated to provide certain services to CCO Group and to the Company, Cole Credit Property Trust IV, Inc. (“CCPT IV”), Cole Office & Industrial REIT (CCIT II), Inc. (“CCIT II”), Cole Office & Industrial (CCIT III), Inc. (“CCIT III”) and Cole Real Estate Income Strategy (Daily NAV), Inc. (“Cole Income NAV Strategy”) (CCPT IV, CCIT II, CCIT III, Cole Income NAV Strategy and the Company, collectively, the “Cole REITs^®”), including operational real estate support. VEREIT OP is obligated to provide such services through March 31, 2019 (or, if later, the date of the last government filing other than a tax filing made by any of the Cole REITs with respect to its 2018 fiscal year) (the “Initial Services Term”) and is obligated to provide consulting and research services through December 31, 2023 as requested by CCO Group, LLC.

Despite the indirect change of ownership and control of the Company’s advisor, dealer manager, property manager and sponsor, the Company expects that, during the Initial Services Term of the Services Agreement, the advisory, dealer manager and property management services it receives will continue without any material changes in personnel (except as supplemented by the management oversight of CIM personnel) or material change in service procedures. CCO Group, LLC is evaluating and intends to effectuate during the Initial Services Term of the Services Agreement an appropriate transition of VEREIT OP’s services under the Services Agreement to other CIM affiliates or third parties with the goal of ensuring continuity and minimizing disruption.

Pursuant to a Registration Statement on Form S-11 (Registration No. 333-189891) under the Securities Act of 1933, as amended (the “Securities Act”), and declared effective by the U.S. Securities and Exchange Commission (the “SEC”) on March 17, 2014, the Company commenced its initial public offering (the “Initial Offering”) on a “best efforts” basis of up to a maximum of $2.975 billion in shares of a single class of common stock. The Initial Offering initially offered up to a maximum of $2.5 billion in shares of a single class of common stock (now referred to as Class A Shares as defined below) in the primary offering, as well as up to $475.0 million in additional shares pursuant to a distribution reinvestment plan (the “Original DRIP”). In March 2016, the Company reclassified a portion of its unissued Class A common stock (“Class A Shares”) as Class T common stock (“Class T Shares”) and commenced sales of Class T Shares thereafter upon receipt of the required regulatory approvals.

Pursuant to a Registration Statement on Form S-11 (Registration No. 333-215274) under the Securities Act and declared effective by the SEC on August 1, 2017, the Company commenced a follow-on offering on a “best efforts” basis (the “Follow-on Offering,” and collectively with the Initial Offering, the “Offerings”) of up to an aggregate of $1.2 billion in Class A Shares and Class T Shares in the primary portion of the Follow-on Offering (up to $660.0 million in Class A Shares and up to $540.0 million in Class T Shares) and an additional $300.0 million in shares of common stock pursuant to the second amended and restated distribution reinvestment plan (the “Second Amended and Restated DRIP” and collectively with the Original DRIP and the first amended and restated distribution and reinvestment plan, the “DRIP”). The Company reserves the right to reallocate the shares offered among the classes of shares and between the primary offering and the Second Amended and Restated DRIP.

8

COLE CREDIT PROPERTY TRUST V, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2018 (Unaudited) – (Continued)

On March 29, 2018, the Company announced that its board of directors (the “Board”) established an updated estimated per share net asset value (“NAV”) of its common stock, as of December 31, 2017, of $22.18 per share for both Class A Shares and Class T Shares. As a result, commencing on March 29, 2018, the Company is offering Class A Shares in its primary portion of the Follow-on Offering for $24.37 per share, Class T Shares in its primary portion of the Follow-on Offering for $23.35 per share and Class A Shares and Class T Shares in its Second Amended and Restated DRIP for $22.18 per share. Additionally, as of March 29, 2018, $22.18 per share serves as the estimated per share NAV for purposes of the share redemption program. The Board establishes an updated per share NAV of the Company’s common stock on an annual basis for purposes of assisting broker-dealers that participated in the Offerings in meeting their customer account reporting obligations under National Association of Securities Dealers Conduct Rule 2340, having previously established a per share NAV as of February 29, 2016 and December 31, 2016.

As of September 30, 2018, the Company had issued approximately 17.8 million shares of common stock in the Offerings, including 1.5 million shares issued in DRIP, for gross offering proceeds of $444.8 million ($398.7 million in Class A Shares and $46.1 million in Class T Shares) before organization and offering costs, selling commissions, and dealer manager fees of $41.8 million. In addition, as of September 30, 2018, the Company paid distribution and stockholder servicing fees for Class T Shares sold in the primary portion of the Offerings of $483,000 and accrued an estimated liability for future distribution and stockholder servicing fees payable of $1.3 million.

The Company has used, and intends to continue using, substantially all of the net proceeds from the Offerings to acquire and operate a diversified portfolio of commercial real estate assets primarily consisting of net leased properties located throughout the United States. The properties primarily will be single tenant properties leased to national and regional creditworthy tenants. The Company expects that the properties typically will be subject to long-term triple-net or double-net leases, which means the tenant will be obligated to pay for most of the expenses of maintaining the property. As of September 30, 2018, the Company owned 140 properties, comprising 3.4 million rentable square feet of commercial space located in 33 states. As of September 30, 2018, the rentable space at these properties was 98.9% leased, including month-to-month agreements, if any.

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. These accounting policies conform to accounting principles generally accepted in the United States of America (“GAAP”), in all material respects, and have been consistently applied in preparing the accompanying condensed consolidated financial statements.

Principles of Consolidation and Basis of Presentation

The condensed consolidated financial statements of the Company have been prepared in accordance with the rules and regulations of the SEC regarding interim financial reporting, including the instructions to Form 10-Q and Article 10 of Regulation S-X, and do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the statements for the interim periods presented include all adjustments, which are of a normal and recurring nature, necessary for a fair presentation of the results for such periods. Results for these interim periods are not necessarily indicative of full year results.

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, 2017, and related notes thereto, set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. The condensed consolidated financial statements should also be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in this Quarterly Report on Form 10-Q.

The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Reclassifications

Certain amounts in the Company’s prior period condensed consolidated financial statements have been reclassified to conform to the current period presentation. In connection with the adoption of Accounting Standards Update (“ASU”) No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, transfers to or from restricted cash, which have previously been shown in the Company’s investing activities section of the condensed consolidated statements of cash flows, are now required to be shown as part of the total change in cash, cash equivalents and restricted cash in the condensed consolidated

9

COLE CREDIT PROPERTY TRUST V, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2018 (Unaudited) – (Continued)

statements of cash flows. This change resulted in a decrease in cash flows from investing activities of $253,000 during the nine months endedSeptember 30, 2017.

The Company adopted ASU 2017-12, as defined in “Recent Accounting Pronouncements,” during the first quarter of fiscal year 2018. Accordingly, for the nine months endedSeptember 30, 2018, the Company recorded a cumulative-effect adjustment related to eliminating the separate measurement of ineffectiveness to accumulated other comprehensive income with a corresponding adjustment to the opening balance of accumulated distributions in excess of earnings of $32,000.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Real Estate Assets

Real estate assets are stated at cost, less accumulated depreciation and amortization. The Company considers the period of future benefit of each respective asset to determine the appropriate useful life. The estimated useful lives of the Company’s real estate assets by class are generally as follows:

Buildings	40 years
Site improvements	15 years
Tenant improvements	Lesser of useful life or lease term
Intangible lease assets	Lease term

Recoverability of Real Estate Assets

The Company continually monitors events and changes in circumstances that could indicate that the carrying amounts of its real estate assets may not be recoverable. Impairment indicators that the Company considers include, but are not limited to: bankruptcy or other credit concerns of a property’s major tenant, such as a history of late payments, rental concessions and other factors; a significant decrease in a property’s revenues due to lease terminations; vacancies; co-tenancy clauses; reduced lease rates; changes in anticipated holding periods; or other circumstances. When indicators of potential impairment are present, the Company assesses the recoverability of the assets by determining whether the carrying amount of the assets will be recovered through the undiscounted future cash flows expected from the use of the assets and their eventual disposition. In the event that such expected undiscounted future cash flows do not exceed the carrying amount, the Company will adjust the real estate assets to their respective fair values and recognize an impairment loss. Generally, fair value will be determined using a discounted cash flow analysis and recent comparable sales transactions. No impairment indicators were identified and no impairment losses were recorded during the nine months endedSeptember 30, 2018 or 2017. The Company is in the process of determining if anticipated holding periods for certain properties may materially differ from the initial intended holding periods for such properties, which could result in an impairment charge in the future.

Assets Held for Sale

When a real estate asset is identified by the Company as held for sale, the Company will cease recording depreciation and amortization of the assets related to the property and estimate its fair value, net of selling costs. If, in management’s opinion, the fair value, net of selling costs, of the asset is less than the carrying amount of the asset, an adjustment to the carrying amount is then recorded to reflect the estimated fair value of the property, net of selling costs. There were no assets identified as held for sale as of September 30, 2018 or December 31, 2017.

Allocation of Purchase Price of Real Estate Assets

Upon the acquisition of real properties, the Company allocates the purchase price to acquired tangible assets, consisting of land, buildings and improvements, and to identified intangible assets and liabilities, consisting of the value of above- and below-market leases and the value of in-place leases and other intangibles, based in each case on their respective fair values. The Company utilizes independent appraisals to assist in the determination of the fair values of the tangible assets of an acquired property (which includes land and buildings). The information in the appraisal, along with any additional information available to the Company’s management, is used in estimating the amount of the purchase price that is allocated to land. Other

10

COLE CREDIT PROPERTY TRUST V, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2018 (Unaudited) – (Continued)

information in the appraisal, such as building value and market rents, may be used by the Company’s management in estimating the allocation of purchase price to the building and to intangible lease assets and liabilities. The appraisal firm has no involvement in management’s allocation decisions other than providing this market information.

The determination of the fair values of the real estate assets and liabilities acquired requires the use of significant assumptions with regard to the current market rental rates, rental growth rates, capitalization and discount rates, interest rates and other variables. The use of alternative estimates may result in a different allocation of the Company’s purchase price, which could materially impact the Company’s results of operations.

In April 2017, the Company elected to early adopt ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (“ASU 2017-01”), which clarifies the definition of a business by adding guidance to assist entities in evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. Beginning in April 2017, all real estate acquisitions qualified as asset acquisitions and, as such, acquisition-related fees and certain acquisition-related expenses related to these asset acquisitions were capitalized and allocated to tangible and intangible assets and liabilities, as described above. Prior to the adoption of ASU 2017-01 in April 2017, all of the Company’s real estate acquisitions were accounted for as business combinations, and as such, acquisition-related expenses related to these business combination acquisitions were expensed as incurred. Prior to April 2017, acquisition-related expenses in the Company’s condensed consolidated statements of operations primarily consisted of legal, deed transfer and other costs related to real estate purchase transactions, including costs incurred for deals that were not consummated. The Company expects its future acquisitions to qualify as asset acquisitions and, as such, the Company will allocate the purchase price to acquired tangible assets and identified intangible assets and liabilities on a relative fair value basis.

Restricted Cash

The Company had $387,000 and $346,000 in restricted cash as of September 30, 2018 and December 31, 2017, respectively. Included in restricted cash was $94,000 held by lenders in lockbox accounts as of December 31, 2017. No such amounts were included in restricted cash as of September 30, 2018. As part of certain debt agreements, rent from certain of the Company’s tenants is deposited directly into a lockbox account, from which the monthly debt service payments are disbursed to the lender and the excess funds are disbursed to the Company. Restricted cash also included $293,000 and $2,000 held by lenders in escrow accounts in accordance with the associated lender’s loan agreement as of September 30, 2018 and December 31, 2017, respectively, as well as $94,000 and $250,000 in lender cash management accounts as of September 30, 2018 and December 31, 2017, respectively.

Revenue Recognition

Certain properties have leases where the minimum rental payment increases during the term of the lease. The Company records rental income for the full term of each lease on a straight-line basis when earned and collectability is reasonably assured. When the Company acquires a property, the terms of existing leases are considered to commence as of the acquisition date for the purpose of this calculation. The Company defers the recognition of contingent rental income, such as percentage rents, until the specific target that triggers the contingent rental income is achieved. Expected reimbursements from tenants for recoverable real estate taxes and operating expenses are included in tenant reimbursement income in the period when such costs are incurred. Effective January 1, 2018, the Company adopted ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”), which supersedes the revenue recognition requirements in Revenue Recognition, Accounting Standards Codification (“ASC”) Topic 605 and requires an entity to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company records revenue for real estate taxes and insurance reimbursed by its tenants on the leased properties, with offsetting expenses in real estate taxes and property operating expenses, respectively, within the condensed consolidated statements of operations as the Company has concluded it is the primary obligor. The Company has identified its revenue streams as rental income from leasing arrangements and tenant reimbursement income, which are outside of the scope of Topic 606. The Company adopted ASU 2014-09 using the modified retrospective approach and determined it did not have a material impact on the Company’s condensed consolidated financial statements.

The Company continually reviews receivables related to rent, including any straight-line rent, and current and future operating expense reimbursements from tenants, and determines their collectability by taking into consideration the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area in which the property is located. In the event that the collectability of a receivable is uncertain, the Company will record an increase in the allowance for uncollectible accounts. As of September 30, 2018 and December 31, 2017, the Company had an allowance for uncollectible accounts of $18,000 and $40,000, respectively.

11

COLE CREDIT PROPERTY TRUST V, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2018 (Unaudited) – (Continued)

Earnings (Loss) and Distributions Per Share

The Company has two classes of common stock. Accordingly, the Company utilizes the two-class method to determine its earnings per share, which can result in different earnings per share for each of the classes. Under the two-class method, earnings per share of each class of common stock are computed by dividing the sum of the distributed earnings to common stockholders and undistributed earnings allocated to common stockholders by the weighted average number of shares for each class of common stock for the respective period. The distributed earnings to Class T Share common stockholders represents distributions declared less the distribution and stockholder servicing fees. Diluted income (loss) per share considers the effect of any potentially dilutive share equivalents, of which the Company had none for each of the three and nine months endedSeptember 30, 2018 and 2017. Distributions per share are calculated based on the authorized daily distribution rate.

Recent Accounting Pronouncements

From time to time, new accounting pronouncements are issued by various standard setting bodies that may have an impact on the Company’s accounting and reporting. Except as otherwise stated below, the Company is currently evaluating the effect that certain new accounting requirements may have on the Company’s accounting and related reporting and disclosures in the Company’s condensed consolidated financial statements.

In February 2016, the Financial Accounting Standards Board (the “FASB”) issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”). The amendments in this update require that most lease obligations be recognized as a right of use asset with a corresponding liability on the balance sheet. The guidance also requires additional qualitative and quantitative disclosures to assess the amount, timing and uncertainty of cash flows arising from leases. ASU 2016-02 and subsequent amendments are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. The guidance, including optional practical expedients, should be implemented for the earliest period presented using a modified retrospective approach. The Company is currently in the process of finalizing its assessment of its inventory of leases that will be impacted by adoption of the new guidance. The Company does not expect the adoption to have a material impact on the accounting treatment of the Company’s net leases, which are the primary source of the Company’s revenues.

In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities (“ASU 2017-12”). The targeted amendments in this ASU are designed to help simplify certain aspects of hedge accounting and result in a more accurate portrayal of the economics of an entity’s risk management activities in its financial statements. ASU 2017-12 applies to the Company’s interest rate swaps designated as cash flow hedges. ASU 2017-12 requires all changes in the fair value of highly effective cash flow hedges to be recorded in accumulated other comprehensive income. Under current GAAP, the ineffective portion of the change in fair value of cash flow hedges is recognized directly in earnings. This eliminates the requirement to separately measure and disclose ineffectiveness for qualifying cash flow hedges. ASU 2017-12 is effective for public entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. ASU 2017-12 is required to be adopted using a modified retrospective approach with early adoption permitted. The Company early adopted ASU 2017-12 during the first quarter of fiscal year 2018. Accordingly, during the nine months endedSeptember 30, 2018, the Company recorded a cumulative-effect adjustment related to eliminating the separate measurement of ineffectiveness to accumulated other comprehensive income with a corresponding adjustment to the opening balance of accumulated distributions in excess of earnings of $32,000.

In August 2018, the FASB issued ASU No. 2018-13, Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”). This ASU amends and removes several disclosure requirements including the valuation processes for Level 3 fair value measurements. ASU 2018-13 also modifies some disclosure requirements and requires additional disclosures for changes in unrealized gains and losses included in other comprehensive income for recurring Level 3 fair value measurements and requires the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. The provisions of ASU 2018-13 are effective January 1, 2020 using a prospective transition method for amendments effecting changes in unrealized gains and losses, significant unobservable inputs used to develop Level 3 fair value measurements and narrative description on uncertainty of measurements. The remaining provisions of the ASU are to be applied retrospectively, and early adoption is permitted. The Company is evaluating the impact of this ASU's adoption, and does not believe this ASU will have a material impact on its condensed consolidated financial statements.

12

COLE CREDIT PROPERTY TRUST V, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2018 (Unaudited) – (Continued)

NOTE 3 — FAIR VALUE MEASUREMENTS

GAAP defines fair value, establishes a framework for measuring fair value and requires disclosures about fair value measurements. GAAP emphasizes that fair value is intended to be a market-based measurement, as opposed to a transaction-specific measurement.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. Depending on the nature of the asset or liability, various techniques and assumptions can be used to estimate the fair value. Assets and liabilities are measured using inputs from three levels of the fair value hierarchy, as follows:

Level 1 — Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. An active market is defined as a market in which transactions for the assets or liabilities occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2 — Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active (markets with few transactions), inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data correlation or other means (market corroborated inputs).

Level 3 — Unobservable inputs, which are only used to the extent that observable inputs are not available, reflect the Company’s assumptions about the pricing of an asset or liability.

The following describes the methods the Company uses to estimate the fair value of the Company’s financial assets and liabilities:

Credit facility and notes payable — The fair value is estimated by discounting the expected cash flows based on estimated borrowing rates available to the Company as of the measurement date. Current and prior period liabilities’ carrying and fair values exclude net deferred financing costs. These financial instruments are valued using Level 2 inputs. As of September 30, 2018, the estimated fair value of the Company’s debt was $334.7 million, compared to a carrying value of $335.1 million. The estimated fair value of the Company’s debt was $311.4 million as of December 31, 2017, compared to a carrying value of $309.6 million.

Derivative instruments — The Company’s derivative instruments are comprised of interest rate swaps. All derivative instruments are carried at fair value and are valued using Level 2 inputs. The fair value of these instruments is determined using interest rate market pricing models. In addition, credit valuation adjustments are incorporated into the fair values to account for the Company’s potential nonperformance risk and the performance risk of the respective counterparties.

Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with those derivatives utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by the Company and its counterparties. However, as of September 30, 2018 and December 31, 2017, the Company assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and determined that the credit valuation adjustments are not significant to the overall valuation of the Company’s derivatives. As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy.

Other financial instruments—The Company considers the carrying values of its cash and cash equivalents, restricted cash, tenant receivables, accounts payable and accrued expenses, other liabilities, due to affiliates and distributions payable to approximate their fair values because of the short period of time between their origination and their expected realization as well as their highly-liquid nature. Due to the short-term maturities of these instruments, Level 1 inputs are utilized to estimate the fair value of these financial instruments.

Considerable judgment is necessary to develop estimated fair values of financial assets and liabilities. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realize, or be liable for, upon disposition of the financial assets and liabilities. As of September 30, 2018 and December 31, 2017, there have been no transfers of financial assets or liabilities between fair value hierarchy levels.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2018 (Unaudited) – (Continued)

In accordance with the fair value hierarchy described above, the following tables show 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, 2018 and December 31, 2017 (in thousands):

	Balance as of		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	September 30, 2018		(Level 1)		(Level 2)		(Level 3)
Financial assets:
Interest rate swaps	$	1,600	$	—	$	1,600	$	—
	Balance as of		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	December 31, 2017		(Level 1)		(Level 2)		(Level 3)
Financial assets:
Interest rate swaps	$	845	$	—	$	845	$	—

NOTE 4 — REAL ESTATE ASSETS

2018 Property Acquisitions

During the nine months endedSeptember 30, 2018, the Company acquired four commercial properties for an aggregate purchase price of $43.8 million (the “2018 Asset Acquisitions”), which includes $1.3 million of external acquisition-related expenses that were capitalized in accordance with ASU 2017-01. Prior to the adoption of ASU 2017-01 in April 2017, costs related to property acquisitions were expensed as incurred. The Company funded the 2018 Asset Acquisitions with net proceeds from the Follow-on Offering and available borrowings.

The following table summarizes the purchase price allocation for the 2018 Asset Acquisitions purchased during the nine months endedSeptember 30, 2018 (in thousands):

	2018 Asset Acquisitions
Land	$	8,882
Buildings and improvements	30,505
Acquired in-place leases and other intangibles (1)	4,437
Total purchase price	$	43,824

______________________

(1) The weighted average amortization period for acquired in-place leases and other intangibles was 17.4 years for the 2018 Asset Acquisitions.

2017 Property Acquisitions

During the nine months endedSeptember 30, 2017, the Company acquired 15 commercial properties for an aggregate purchase price of $103.4 million (the “2017 Acquisitions”), of which 13 were determined to be asset acquisitions and two were accounted for as business combinations as they were acquired prior to the adoption of ASU 2017-01 in April 2017. The Company funded the 2017 Acquisitions with net proceeds from the Offerings and available borrowings.

The following table summarizes the consideration transferred for the properties purchased during the nine months endedSeptember 30, 2017 (in thousands):

	2017 Acquisitions
Real estate assets:
Purchase price of asset acquisitions	$	88,547
Purchase price of business combinations	14,878
Total purchase price of real estate assets acquired (1)	$	103,425

______________________

(1) The weighted average amortization period for the 2017 Acquisitions was 13.9 years for acquired in-place leases and other intangibles, 16.6 years for acquired above-market leases and 12.9 years for acquired intangible lease liabilities.

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COLE CREDIT PROPERTY TRUST V, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2018 (Unaudited) – (Continued)

During the nine months endedSeptember 30, 2017, the Company acquired 13 commercial properties for an aggregate purchase price of $88.5 million, which were accounted for as asset acquisitions (the “2017 Asset Acquisitions”). The aggregate purchase price includes $2.6 million of external acquisition-related expenses that were capitalized in accordance with ASU 2017-01. Prior to the adoption of ASU 2017-01, costs related to property acquisitions were expensed as incurred. The following table summarizes the purchase price allocation for the 2017 Asset Acquisitions purchased during the nine months endedSeptember 30, 2017 (in thousands):

	2017 Asset Acquisitions
Land	$	21,037
Buildings and improvements	47,958
Acquired in-place leases and other intangibles	18,758
Acquired above-market leases	1,665
Intangible lease liabilities	(871		)
Total purchase price	$	88,547

During the nine months endedSeptember 30, 2017, the Company acquired two commercial properties for an aggregate purchase price of $14.9 million, which were accounted for as business combinations (the “2017 Business Combination Acquisitions”). The Company allocated the purchase price of these properties to the fair value of the assets acquired. The following table summarizes the purchase price allocation for the 2017 Business Combination Acquisitions purchased during the nine months endedSeptember 30, 2017 (in thousands):

	2017 Business Combination Acquisitions
Land	$	2,099
Buildings and improvements	11,342
Acquired in-place leases and other intangibles	1,437
Total purchase price	$	14,878

The Company recorded revenue of $285,000 and $652,000, respectively, and net income of $170,000 and a net loss of $25,000, respectively, for the three and nine months endedSeptember 30, 2017, related to the 2017 Business Combination Acquisitions. In addition, the Company recorded $407,000 of acquisition-related expenses for the nine months endedSeptember 30, 2017, which is included in acquisition-related expenses on the condensed consolidated statements of operations.

The following table summarizes selected financial information of the Company as if all of the 2017 Business Combination Acquisitions were completed on January 1, 2016 for each period presented below. The table below presents the Company’s estimated revenue and net income (loss), on a pro forma basis, for the three and nine months endedSeptember 30, 2017 and 2016 (in thousands):

	Three Months Ended September 30,					Nine Months Ended September 30,
	2017		2016			2017		2016
Pro forma basis (unaudited):
Revenue	$	11,749	$	10,325		$	32,779	$	31,103
Net income (loss)	$	718	$	(102	)	$	1,567	$	(1,559	)

The unaudited pro forma information for the nine months endedSeptember 30, 2017 was adjusted to exclude $407,000 of acquisition-related fees and expenses recorded during the period related to the 2017 Business Combination Acquisitions. Accordingly, these costs were instead recognized in the pro forma information for the nine months endedSeptember 30, 2016.

The unaudited 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 the period, nor does it purport to represent the results of future operations.

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COLE CREDIT PROPERTY TRUST V, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2018 (Unaudited) – (Continued)

NOTE 5 — INTANGIBLE LEASE ASSETS

Intangible lease assets as of September 30, 2018 and December 31, 2017 consisted of the following (in thousands, except weighted average life):

	September 30, 2018		December 31, 2017
In-place leases and other intangibles, net of accumulated amortization of $18,259 and $13,899, respectively (with a weighted average life remaining of 11.0 years and 11.3 years, respectively)	$	56,442	$	56,443
Acquired above-market leases, net of accumulated amortization of $3,056 and $2,519, respectively (with a weighted average life remaining of 11.2 years and 11.8 years, respectively)	5,780		6,407
	$	62,222	$	62,850

Amortization of the above-market leases is recorded as a reduction to rental revenue, and amortization expense for the in-place leases and other intangibles is included in depreciation and amortization in the accompanying condensed consolidated statements of operations.

The following table summarizes the amortization expense related to the intangible lease assets for the three and nine months endedSeptember 30, 2018 and 2017 (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
In-place lease and other intangible amortization	$	1,469	$	1,328	$	4,587	$	3,558
Above-market lease amortization	$	166	$	211	$	628	$	617

As of September 30, 2018, the estimated amortization expense relating to the intangible lease assets is as follows (in thousands):

	Amortization Expense
	In-Place Leases and Other Intangibles		Above-Market Leases
Remainder of 2018	$	1,482	$	183
2019	$	5,699	$	591
2020	$	5,492	$	538
2021	$	5,430	$	523
2022	$	5,233	$	511

NOTE 6 — DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

In the normal course of business, the Company uses certain types of derivative instruments for the purpose of managing or hedging its interest rate risk. During the nine months endedSeptember 30, 2018, the Company entered into one interest rate swap agreement. As of September 30, 2018, the Company had three interest rate swap agreements. The following table summarizes the terms of the Company’s executed interest rate swap agreements designated as hedging instruments as of September 30, 2018 and December 31, 2017 (dollar amounts in thousands):

	Balance Sheet Location	Outstanding Notional Amount as of		Interest Rate (1)	Effective Date	Maturity Date	Fair Value of Assets as of
		September 30, 2018					September 30, 2018		December 31, 2017
Interest Rate Swaps	Derivative assets, prepaid expenses and other assets	$	241,100	3.22% to 4.45%	12/31/2015 to 5/23/2018	4/25/2019 to 3/28/2022	$	1,600	$	845

______________________

(1) The interest rates consist of the underlying index swapped to a fixed rate and the applicable interest rate spread as of September 30, 2018.

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COLE CREDIT PROPERTY TRUST V, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2018 (Unaudited) – (Continued)

Additional disclosures related to the fair value of the Company’s derivative instruments are included in Note 3 — Fair Value Measurements. The notional amount under the interest rate swap agreements is an indication of the extent of the Company’s involvement in each instrument, but does not represent exposure to credit, interest rate or market risks.

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 in order to hedge the variability of the anticipated cash flows on its variable rate debt. The change in fair value of the derivative instruments that are designated as hedges is recorded in other comprehensive income, with a portion of the amount subsequently reclassified to interest expense as interest payments are made on the Company’s variable rate debt. For the three and nine months endedSeptember 30, 2018, the amounts reclassified were a gain of $17,000 and $90,000, respectively. For the three and nine months endedSeptember 30, 2017, the amounts reclassified were a loss of $110,000 and $567,000, respectively. During the next 12 months, the Company estimates that an additional $681,000 will be reclassified from other comprehensive income as a decrease to interest expense. The Company classifies cash flows from interest rate swap agreements as net cash provided by operating activities on the condensed consolidated statements of cash flows, as the Company’s accounting policy is to present cash flows from hedging instruments in the same category in the condensed consolidated statements of cash flows as the category for cash flows from hedged items.

The Company has agreements with each of its derivative counterparties that contain provisions whereby, if the Company defaults on certain of its unsecured indebtedness, the Company could also be declared in default on its derivative obligations, resulting in an acceleration of payment. If the Company had breached any of these provisions, it could have been required to settle its obligations under the agreements at an aggregate termination value, inclusive of interest payments and accrued interest. As of September 30, 2018, all derivatives were in an asset position. Therefore, there was no termination value as of September 30, 2018. 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 creditworthy counterparties. The Company records credit risk valuation adjustments on its interest rate swaps based on the credit quality of the Company and the respective counterparty. There were no termination events or events of default related to the interest rate swaps as of September 30, 2018.

NOTE 7 — NOTES PAYABLE AND CREDIT FACILITY

As of September 30, 2018, the Company had $332.9 million of debt outstanding, including net deferred financing costs, with weighted average years to maturity of 4.2 years and a weighted average interest rate of 3.8%. The weighted average years to maturity is computed using the scheduled repayment date as specified in each loan agreement where applicable. The weighted average interest rate is computed using the interest rate in effect until the scheduled repayment date. Should a loan not be repaid by its scheduled repayment date, the applicable interest rate will increase as specified in the respective loan agreement until the extended maturity date.

The following table summarizes the debt balances as of September 30, 2018 and December 31, 2017, and the debt activity for the nine months endedSeptember 30, 2018 (in thousands):

				During the Nine Months Ended September 30, 2018
	Balance as of December 31, 2017			Debt Issuance, Net (1)			Repayments and Modifications			Accretion		Balance as of September 30, 2018
Credit facility	$	217,000		$	270,000		$	(244,500	)	$	—	$	242,500
Fixed rate debt	92,600			—			—			—		92,600
Total debt	309,600			270,000			(244,500		)	—		335,100
Deferred costs (2)	(1,041		)	(1,730		)	125			400		(2,246		)
Total debt, net	$	308,559		$	268,270		$	(244,375	)	$	400	$	332,854

______________________

(1) Includes deferred financing costs incurred during the period.

(2) Deferred costs relate to mortgage notes payable and the term portion of the Credit Facility, as defined below.

As of September 30, 2018, the fixed rate debt outstanding of $92.6 million included $21.1 million of variable rate debt that is fixed through interest rate swap agreements, which has the effect of fixing the variable interest rate per annum through the maturity date of the variable rate debt. The fixed rate debt has interest rates ranging from 3.5% to 4.5% per annum. The fixed rate debt outstanding matures on various dates from February 2021 to December 2024. The aggregate balance of gross real

17

COLE CREDIT PROPERTY TRUST V, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2018 (Unaudited) – (Continued)

estate assets, net of gross intangible lease liabilities, securing the fixed rate debt outstanding was $156.5 million as of September 30, 2018. Each of the mortgage notes payable comprising the fixed rate debt is secured by the respective properties on which the debt was placed.

During the nine months endedSeptember 30, 2018, the Company entered into a new credit agreement (the “Credit Agreement”) with JPMorgan Chase Bank, N.A. (“JPMorgan Chase”), as administrative agent, and the other lenders party thereto, and repaid the then-existing credit agreement dated April 25, 2014. The Credit Agreement allows for borrowings of up to $350.0 million (the “Credit Facility”). The Credit Facility includes $220.0 million in term loans (the “Term Loans”) and up to $130.0 million in revolving loans (the “Revolving Loans”). The Term Loans mature on March 27, 2023 and the Revolving Loans mature on March 28, 2022; however the Company may elect to extend the maturity date of the Revolving Loans to March 28, 2023 subject to satisfying certain conditions described in the Credit Agreement.

Depending upon the type of loan specified and overall leverage ratio, the Credit Facility bears interest at (i) the one-month, two-month, three-month or six-month London Interbank Offered Rate (“LIBOR”) multiplied by the statutory reserve rate (the “Adjusted LIBO Rate”) for the interest period plus an applicable rate ranging from 1.30% to 1.70%; or (ii) a base rate ranging from 0.30% to 0.70%, plus the greater of: (a) JPMorgan Chase’s Prime Rate (as defined in the Credit Agreement); (b) the NYFRB Rate (as defined in the Credit Agreement) plus 0.50%; or (c) the Adjusted LIBO Rate for a period of one month plus 1.0%. As of September 30, 2018, the amounts outstanding under the Revolving Loans totaled $22.5 million at a weighted average interest rate of 3.9%. As of September 30, 2018, the amounts outstanding under the Term Loans totaled $220.0 million, all of which was subject to interest rate swap agreements (the “Swapped Term Loan”). The interest rate swap agreements had the effect of fixing the Adjusted LIBO Rate per annum of the Swapped Term Loan. As of September 30, 2018, the all-in rate for the Swapped Term Loan was 3.8%. The Company had $242.5 million of debt outstanding under the Credit Facility as of September 30, 2018 at a weighted average interest rate of 3.8% and $107.5 million in unused capacity, subject to borrowing availability.

The Credit Agreement contains provisions with respect to covenants, events of default and remedies customary for facilities of this nature. In particular, the Credit Agreement requires the Company to maintain a minimum consolidated net worth not less than $225.0 million plus 75% of the equity interests issued by the Company, a net leverage ratio less than or equal to 60%, a fixed charge coverage ratio equal to or greater than 1.50, an unsecured debt to unencumbered asset value ratio equal to or less than 60%, an unsecured debt service coverage ratio greater than 1.75, a secured debt ratio equal to or less than 40% and recourse debt not greater than 15% of total asset value. The Company believes it was in compliance with the financial covenants of the Credit Agreement, as well as the financial covenants under the Company’s various fixed and variable rate debt agreements as of September 30, 2018.

Maturities

The following table summarizes the scheduled aggregate principal repayments for the Company’s outstanding debt subsequent to September 30, 2018 (in thousands):

	Principal Repayments
Remainder of 2018	$	—
2019	—
2020	388
2021	68,009
2022	22,928
Thereafter	243,775
Total	$	335,100

NOTE 8 — INTANGIBLE LEASE LIABILITIES

Intangible lease liabilities consisted of the following as of September 30, 2018 and December 31, 2017 (in thousands, except weighted average life remaining amounts):

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COLE CREDIT PROPERTY TRUST V, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2018 (Unaudited) – (Continued)

	September 30, 2018		December 31, 2017
Acquired below-market leases, net of accumulated amortization of $2,081 and $1,678, respectively (with a weighted average life remaining of 7.5 years and 7.9 years, respectively)	$	3,569	$	4,019

Amortization of below-market leases is recorded as an increase to rental revenue in the accompanying condensed consolidated statements of operations. The following table summarizes the amortization of the intangible lease liabilities for the three and nine months endedSeptember 30, 2018 and 2017 (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Below-market lease amortization	$	147	$	133	$	450	$	412

As of September 30, 2018, the estimated amortization of the intangible lease liabilities is as follows (in thousands):

	Amortization of Below-Market Leases
Remainder of 2018	$	146
2019	$	555
2020	$	479
2021	$	460
2022	$	380

NOTE 9 — COMMITMENTS AND CONTINGENCIES

Litigation

In the ordinary course of business, the Company may become subject to litigation and claims. The Company is not aware of any material pending legal proceedings, other than ordinary routine litigation incidental to the Company’s business, to which the Company is a party or of which the Company’s properties are the subject.

Environmental Matters

In connection with the ownership and operation of real estate, the Company may potentially be liable for costs and damages related to environmental matters. In addition, the Company may own or acquire certain properties that are subject to environmental remediation. Generally, the seller of the property, the tenant of the property and/or another third party is responsible for environmental remediation costs related to a property. Additionally, in connection with the purchase of certain properties, the respective sellers and/or tenants may agree to indemnify the Company against future remediation costs. The Company also carries environmental liability insurance on its properties that provides limited coverage for any remediation liability and/or pollution liability for third-party bodily injury and/or property damage claims for which the Company may be liable. The Company is not aware of any environmental matters which it believes are reasonably likely to have a material effect on its results of operations, financial condition or liquidity.

NOTE 10 — RELATED-PARTY TRANSACTIONS AND ARRANGEMENTS

The Company has incurred commissions, fees and expenses payable to CR V Advisors and certain of its affiliates in connection with the Offerings and the acquisition, management and disposition of its assets.

Selling commissions and dealer manager fees

In connection with the Offerings, CCO Capital, the Company’s dealer manager, which is affiliated with CR V Advisors, receives selling commissions of up to 7.0% and 3.0% of gross offering proceeds from the primary portion of the Offerings for Class A Shares and Class T Shares, respectively, and before reallowance of selling commissions earned by participating broker-dealers. The Company has been advised that CCO Capital intends to reallow 100% of selling commissions earned to participating broker-dealers. In addition, CCO Capital receives 2.0% of gross offering proceeds from the primary portion of the Offerings for both Class A Shares and Class T Shares as a dealer manager fee. CCO Capital, in its sole discretion, may reallow all or a portion of its dealer manager fee to participating broker-dealers. No selling commissions or dealer manager fees are paid to CCO Capital or other participating broker-dealers with respect to shares sold pursuant to the DRIP.

19

COLE CREDIT PROPERTY TRUST V, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2018 (Unaudited) – (Continued)

Other organization and offering expenses

All other organization and offering expenses associated with the sale of the Company’s common stock (excluding selling commissions, dealer manager fees and distribution and stockholder servicing fees) are paid by CR V Advisors or its affiliates and are reimbursed by the Company up to 2.0% of aggregate gross offering proceeds. A portion of the other organization and offering expenses may be considered to be underwriting compensation. As of September 30, 2018, CR V Advisors had paid organization and offering expenses in excess of 2.0% of aggregate gross offering proceeds in connection with the Offerings. These excess amounts were not included in the condensed consolidated financial statements of the Company because such amounts were not a liability of the Company as they exceeded 2.0% of gross proceeds from the Offerings. As the Company raises additional proceeds from the Offerings, these excess amounts may become payable.

Distribution and stockholder servicing fees

Through October 4, 2016, the Company paid CCO Capital a distribution and stockholder servicing fee for Class T Shares that was calculated on a daily basis in the amount of 1/365th of 0.8% of the estimated per share NAV of the Class T Shares sold in the primary portion of the Initial Offering. Beginning on October 5, 2016, the distribution and stockholder servicing fee is calculated on a daily basis in an amount equal to 1/365th of 1.0% of the estimated per share NAV of the Class T Shares sold in the primary portion of the Offerings. The distribution and stockholder servicing fee is paid monthly in arrears from cash flow from operations or, if the Company’s cash flow from operations is not sufficient to pay the distribution and stockholder servicing fee, from borrowings in anticipation of future cash flow. An estimated liability for future distribution and stockholder servicing fees payable to CCO Capital is recognized at the time each Class T Share is sold and included in due to affiliates in the condensed consolidated balance sheets with a corresponding decrease to capital in excess of par value. The Company will cease paying the distribution and stockholder servicing fee with respect to Class T Shares at the earliest of (i) the end of the month in which the total distribution and stockholder servicing fees paid by a stockholder within his or her individual account would be equal to 4.0% of the stockholder’s total gross investment amount at the time of the purchase of the primary Class T Shares held in such account, or a lower limit agreed upon between the dealer manager and the participating broker-dealer at the time such Class T Shares were sold; (ii) the date on which the aggregate underwriting compensation from all sources equals 10.0% of the gross proceeds from the sale of the Company’s shares, excluding shares sold pursuant to the DRIP; (iii) the fourth anniversary of the last day of the month in which the offering in which such Class T Shares were purchased (excluding the offering of shares pursuant to the DRIP) terminates; (iv) the date such Class T Share is no longer outstanding; and (v) the date the Company effects a liquidity event. CCO Capital may, in its discretion, reallow to participating broker-dealers all or a portion of the distribution and stockholder servicing fee for services that such participating broker-dealers perform. At the time the Company ceases paying the distribution and stockholder servicing fee with respect to an outstanding Class T Share pursuant to the provisions above, such Class T Share will convert into a number of Class A Shares (including any fractional shares) with an equivalent net asset value as such Class T Share. The Company cannot predict when this will occur. No distribution and stockholder servicing fees are paid to CCO Capital or other participating broker-dealers with respect to shares sold pursuant to the DRIP.

Acquisition fees and expenses

The Company pays CR V Advisors or its affiliates acquisition fees of up to 2.0% of: (1) the contract purchase price of each property or asset the Company acquires; (2) the amount paid in respect of the development, construction or improvement of each asset the Company acquires; (3) the purchase price of any loan the Company acquires; and (4) the principal amount of any loan the Company originates. In addition, the Company reimburses CR V Advisors or its affiliates for insourced expenses incurred in the process of acquiring a property or the origination or acquisition of a loan, which are fixed on an annual basis at 0.5% of the contract purchase price of each property and 0.5% of the amount advanced for a loan or other investment, which will be prorated for any partial calendar year; provided, that acquisition expenses are not included in the contract purchase price of the property. Additionally, CR V Advisors or its affiliates are reimbursed for third-party acquisition-related expenses incurred in the process of acquiring properties, so long as the total acquisition fees and expenses relating to the transaction do not exceed 6.0% of the contract purchase price, unless otherwise approved by a majority of the Board, including a majority of the Company’s independent directors, as commercially competitive, fair and reasonable to the Company.

Advisory fees and expenses

Pursuant to the advisory agreement with CR V Advisors, the Company pays CR V Advisors a monthly advisory fee based upon the Company’s monthly average asset value, which, effective January 1, 2018, is based on the estimated market value of such assets used to determine the Company’s estimated per share NAV as of December 31, 2017, as discussed in Note 1 — Organization and Business, and for those assets acquired subsequent to December 31, 2017, is based on the purchase price. The

20

COLE CREDIT PROPERTY TRUST V, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2018 (Unaudited) – (Continued)

monthly advisory fee is equal to the following amounts: (1) an annualized rate of 0.75% paid on the Company’s average asset value that is between $0 and $2.0 billion; (2) an annualized rate of 0.70% paid on the Company’s average asset value that is between $2.0 billion and $4.0 billion; and (3) an annualized rate of 0.65% paid on the Company’s average asset value that is over $4.0 billion.

Operating expenses

The Company reimburses CR V Advisors, or its affiliates, for the expenses they paid or incurred in connection with the advisory and administrative services provided to the Company, subject to the limitation that the Company will not reimburse CR V Advisors or its affiliates for any amount by which the operating expenses (including the advisory fee) at the end of the four preceding fiscal quarters exceed the greater of: (1) 2.0% of average invested assets, or (2) 25.0% of net income excluding any additions to reserves for depreciation, bad debts or other similar non-cash reserves and excluding any gain from the sale of assets for that period. The Company will not reimburse CR V Advisors or its affiliates for the salaries and benefits paid to personnel in connection with the services for which CR V Advisors or its affiliates receive acquisition fees, and the Company will not reimburse CR V Advisors for salaries and benefits paid to the Company’s executive officers.

Disposition fees

If CR V Advisors or its affiliates provide 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 (or the Company’s entire portfolio), the Company will pay CR V Advisors or its affiliates a disposition fee in an amount equal to up to one-half of the real estate or brokerage commission paid by the Company to third parties on the sale of such property, not to exceed 1.0% of the contract price of the property sold; provided, however, in no event may the total disposition fees paid to CR V Advisors, its affiliates and unaffiliated third parties exceed the lesser of the customary competitive real estate commission or an amount equal to 6.0% of the contract sales price. In addition, if CR V Advisors 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 assets other than properties, the Company may separately compensate CR V Advisors or its affiliates at such rates and in such amounts as the Board, including a majority of the Company’s independent directors, and CR V Advisors agree upon, not to exceed an amount equal to 1.0% of the contract price of the assets sold. During the three and nine months endedSeptember 30, 2018 and 2017, no disposition fees were incurred for any such services provided by CR V Advisors or its affiliates.

Subordinated performance fees

The Company will pay a subordinated performance fee in connection with one of the following alternative events: (1) if the Company’s shares are listed on a national securities exchange, CR V Advisors, or its affiliates, will be entitled to a subordinated performance fee equal to 15.0% of the amount, if any, by which (i) the market value of the Company’s outstanding stock plus distributions paid by the Company prior to listing, exceeds (ii) the sum of the total amount of capital raised from stockholders and the amount of distributions necessary to generate a 6.0% annual cumulative, non-compounded return to stockholders; (2) if the Company is sold or its assets are liquidated, CR V Advisors will be entitled to a subordinated performance fee equal to 15.0% of the net sale proceeds remaining after stockholders have received, from regular distributions plus special distributions paid from proceeds of such sale, a return of their net capital invested and a 6.0% annual cumulative, non-compounded return; or (3) upon termination of the advisory agreement, CR V Advisors may be entitled to a subordinated performance fee similar to the fee to which it would have been entitled had the portfolio been liquidated (based on an independent appraised value of the portfolio) on the date of termination. During the three and nine months endedSeptember 30, 2018 and 2017, nosubordinated performance fees were incurred related to any such events.

21

COLE CREDIT PROPERTY TRUST V, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2018 (Unaudited) – (Continued)

The Company incurred commissions, fees and expense reimbursements as shown in the table below for services provided by CR V Advisors and its affiliates related to the services described above during the periods indicated (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Selling commissions	$	298	$	813	$	1,215	$	3,441
Dealer manager fees	$	158	$	322	$	533	$	1,298
Other organization and offering expenses	$	218	$	378	$	708	$	1,454
Distribution and stockholder servicing fees (1)	$	97	$	56	$	270	$	123
Acquisition fees and expenses	$	52	$	915	$	1,250	$	2,332
Advisory fees and expenses	$	1,584	$	1,389	$	4,603	$	3,965
Operating expenses	$	487	$	522	$	1,625	$	1,594

______________________

(1) Amounts are calculated for the respective period in accordance with the dealer manager agreement and exclude the estimated liability for future distribution and stockholder servicing fees payable to CCO Capital of $1.3 million, which is included in due to affiliates in the condensed consolidated balance sheets with a corresponding decrease to capital in excess of par value.

Services Agreement

Pursuant to the Services Agreement, VEREIT OP, which is affiliated with one of the Company’s directors, is obligated to provide certain services to CCO Group and to the Company, including operational real estate support. The Company is not a party to the Services Agreement. See Note 11 — Economic Dependency for a discussion of the Services Agreement.

Due to/from Affiliates

As of September 30, 2018 and December 31, 2017, $2.1 million and $1.8 million, respectively, were recorded for services and expenses incurred, but not yet reimbursed to CR V Advisors, or its affiliates. The amounts are primarily for advisory fees and operating expenses and distribution and stockholder servicing fees payable to CCO Capital. These amounts were included in due to affiliates in the condensed consolidated balance sheets for such periods.

As of December 31, 2017, $14,000 was due from CR V Advisors or its affiliates related to amounts received by affiliates of the advisor which were due to the Company. No such amounts were due to the Company as of September 30, 2018.

NOTE 11 — ECONOMIC DEPENDENCY

Under various agreements, the Company has engaged and may in the future engage CR V Advisors or its affiliates to provide certain services that are essential to the Company, including asset management services, supervision of the management and leasing of properties owned by the Company, asset acquisition and disposition decisions, the sale of shares of the Company’s common stock available for issuance, as well as other administrative responsibilities for the Company including accounting services and stockholder relations. As a result of these relationships, the Company is dependent upon CR V Advisors or its affiliates. In the event that these companies are unable to provide the Company with these services, the Company would be required to find alternative providers of these services.

Services Agreement

Pursuant to the Services Agreement, VEREIT OP is obligated to provide certain services to CCO Group and to the Company, including operational real estate support. VEREIT OP is obligated to provide such services through March 31, 2019 (or, if later, the date of the last government filing other than a tax filing made by any of the Cole REITs with respect to its 2018 fiscal year) and is obligated provide consulting and research services through December 31, 2023 as requested by CCO Group, LLC.

Despite the indirect change of ownership and control of the Company’s advisor, dealer manager, property manager and sponsor, the Company expects that, during the Initial Services Term of the Services Agreement, the advisory, dealer manager and property management services the Company receives will continue without any material changes in personnel (except as supplemented by the management oversight of CIM personnel) or material change in service procedures. During the Initial Services Term of the Services Agreement, CCO Group, LLC intends to evaluate and effectuate an appropriate transition of

22

COLE CREDIT PROPERTY TRUST V, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2018 (Unaudited) – (Continued)

VEREIT OP’s services under the Services Agreement to other CIM affiliates or third parties with the goal of ensuring continuity and minimizing disruption.

NOTE 12 — OPERATING LEASES

The Company’s real estate assets are leased to tenants under operating leases for which the terms and expirations vary. As of September 30, 2018, the leases had a weighted-average remaining term of 10.3 years. Certain leases include provisions to extend the lease agreements, options for early termination after paying a specified penalty, rights of first refusal to purchase the property at competitive market rates, and other terms and conditions as negotiated. The Company retains substantially all of the risks and benefits of ownership of the real estate assets leased to tenants.

The future minimum rental income from the Company’s real estate assets under non-cancelable operating leases, assuming no exercise of renewal options, as of September 30, 2018, was as follows (in thousands):

	Future Minimum Rental Income
Remainder of 2018	$	12,641
2019	48,013
2020	47,325
2021	46,723
2022	45,122
Thereafter	322,650
Total	$	522,474

NOTE 13 — SUBSEQUENT EVENTS

The following events occurred subsequent to September 30, 2018:

Redemption of Shares of Common Stock

Subsequent to September 30, 2018, the Company redeemed approximately 135,000 shares for $3.0 million at an average per share price of $22.05 pursuant to the Company’s share redemption program. Management, in its discretion, limited the amount of shares redeemed for the three months ended September 30, 2018 to an amount equal to net proceeds the Company received from the sale of shares in the DRIP during the respective period. The remaining redemption requests received during the three months ended September 30, 2018 totaling approximately 295,000 shares went unfulfilled.

Acquisition of Real Estate Assets

Subsequent to September 30, 2018, the Company acquired one commercial propertyfor an aggregate purchase price of $15.1 million, which wasaccounted for as an asset acquisition. The acquisition was funded with net proceeds from the Follow-On Offering and available borrowings. The Company has not completed its initial purchase price allocation with respect to this property and therefore cannot provide similar disclosures to those included in Note 4 — Real Estate Assets in these condensed consolidated financial statements for this property.

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

The following discussion and analysis should be read in conjunction with the accompanying condensed consolidated financial statements and notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q. We make statements in this section that are forward-looking statements within the meaning of the federal securities laws. Certain risks may cause our actual results, performance or achievements to differ materially from those expressed or implied by the following discussion. For a complete discussion of such risk factors, see Item 1A — Risk Factors of this Quarterly Report on Form 10-Q and the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. Capitalized terms used herein, but not otherwise defined, shall have the meaning ascribed to those terms in “Part I — Financial Information” of this Quarterly Report on Form 10-Q, including the notes to the condensed consolidated financial statements contained therein, and the terms “we,” “us,” “our” and the “Company” refer to Cole Credit Property Trust V, Inc.

Forward-Looking Statements

This Quarterly Report on Form 10-Q includes “forward-looking statements” (within the meaning of the federal securities laws, Section 27A of the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that reflect our expectations and projections about our future results, performance, prospects and opportunities. We have attempted to identify these forward-looking statements by the use of words such as “may,” “will,” “seek,” “expects,” “anticipates,” “believes,” “targets,” “intends,” “should,” “estimates,” “could,” “continue,” “assume,” “projects,” “plans” or similar expressions. These forward-looking statements are based on information currently available to us and are subject to a number of known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. These factors include, among other things, those discussed below. We intend for all such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act and Section 21E of the Exchange Act, as applicable by law. We do not undertake to publicly update or revise any forward-looking statements, whether as a result of changes in underlying assumptions or new information, future events or otherwise, except as may be required to satisfy our obligations under federal securities law. The forward-looking statements should be read in light of the risk factors identified in Item 1A — Risk Factors of this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2017.

The following are some, but not all, of the assumptions, risks, uncertainties and other factors that could cause our actual results to differ materially from those presented in our forward-looking statements:

• We may be unable to renew leases, lease vacant space or re-lease space as leases expire on favorable terms or at all.

• We are subject to risks associated with tenant, geographic and industry concentrations with respect to our properties.

• Our properties, intangible assets and other assets may be subject to impairment charges.

• We could be subject to unexpected costs or unexpected liabilities that may arise from potential dispositions and may be unable to dispose of properties on advantageous terms.

• We are subject to competition in the acquisition and disposition of properties and in the leasing of our properties and we may be unable to acquire, dispose of, or lease properties on advantageous terms.

• We could be subject to risks associated with bankruptcies or insolvencies of tenants or from tenant defaults generally.

• We have substantial indebtedness, which may affect our ability to pay distributions, and expose us to interest rate fluctuation risk and the risk of default under our debt obligations.

• We may be affected by the incurrence of additional secured or unsecured debt.

• We may not be able to maintain profitability.

• We may not generate cash flows sufficient to pay our distributions to stockholders or meet our debt service obligations.

• We may be affected by risks resulting from losses in excess of insured limits.

• We may fail to remain qualified as a REIT for U.S. federal income tax purposes.

• Our sponsor may be unable to fully reestablish the financial network, which previously supported real estate investment trusts sponsored by our sponsor, and/or regain the prior level of transaction and capital raising volume achieved by such real estate investment trusts.

• We are subject to risks that may affect capital raising volume as a result of increased regulatory changes.

• Our advisor has the right to terminate the advisory agreement upon 60 days’ written notice without cause or penalty.

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Definitions

We use certain defined terms throughout this Quarterly Report on Form 10-Q that have the following meanings:

The phrase “annualized rental income” refers to the straight-line rental revenue under our leases on operating properties owned as of the respective reporting date, which includes the effect of rent escalations and any tenant concessions, such as free rent, and excludes any bad debt allowances and any contingent rent, such as percentage rent. Management uses annualized rental income as a basis for tenant, industry and geographic concentrations and other metrics within the portfolio. Annualized rental income is not indicative of future performance.

Under a “net lease,” the tenant occupying the leased property (usually as a single tenant) does so in much the same manner as if the tenant were the owner of the property. The tenant generally agrees that it will either have no ability or only limited ability to terminate the lease or abate rent prior to the expiration of the term of the lease as a result of real estate driven events such as casualty, condemnation or failure by the landlord to fulfill its obligations under the lease. There are various forms of net leases, most typically classified as either triple-net or double-net. Triple-net leases typically require the tenant to pay all expenses associated with the property (e.g., real estate taxes, insurance, maintenance and repairs, including roof, structure and parking lot). Double-net leases typically hold the landlord responsible for the capital expenditures for the roof and structure, while the tenant is responsible for all lease payments and remaining operating expenses associated with the property (e.g., real estate taxes, insurance and maintenance).

Overview

We were formed on December 12, 2012, and we elected to be taxed, and currently qualify, as a REIT for federal income tax purposes commencing with our taxable year ended December 31, 2014. We commenced principal operations on March 18, 2014, when we satisfied the minimum offering conditions of our escrow agreement and issued approximately 110,000 shares of common stock in the Initial Offering. We have no paid employees and are externally advised and managed by CR V Advisors. On February 1, 2018, the Transaction, as discussed in Note 1 — Organization and Business to our condensed consolidated financial statements in this Quarterly Report on Form 10-Q, was completed. As a result of the Transaction, CIM indirectly owns and/or controls CR V Advisors; our dealer manager, CCO Capital; our property manager, CREI Advisors; and CCO Group.

As part of the Transaction, pursuant to the Services Agreement, VEREIT OP is obligated to provide certain services to CCO Group and to us, including operational real estate support. VEREIT OP is obligated to provide such services through March 31, 2019 (or, if later, the date of the last government filing other than a tax filing made by any of the Cole REITs with respect to its 2018 fiscal year) and is obligated to provide consulting and research services through December 31, 2023 as requested by CCO Group, LLC.

Despite the indirect change of ownership and control of our advisor, dealer manager, property manager and sponsor, we expect that, during the Initial Services Term of the Services Agreement, the advisory, dealer manager and property management services we receive will continue without any material changes in personnel (except as supplemented by the management oversight of CIM personnel) or material change in service procedures. During the Initial Services Term of the Services Agreement, CCO Group intends to evaluate and effectuate an appropriate transition of VEREIT OP’s services under the Services Agreement to other CIM affiliates or third parties with the goal of ensuring continuity and minimizing disruption.

As we acquire additional commercial real estate, we will be subject to changes in real estate prices and changes in interest rates on any current variable rate debt, refinancings or new indebtedness used to acquire the properties. We may manage our risk of changes in real estate prices on future property acquisitions, when applicable, by entering into purchase agreements and loan commitments simultaneously, or through loan assumptions, so that our operating yield is determinable at the time we enter into a purchase agreement, by contracting with developers for future delivery of properties or by entering into sale-leaseback transactions. We manage our interest rate risk by monitoring the interest rate environment in connection with our future property acquisitions, when applicable, or upcoming debt maturities to determine the appropriate financing or refinancing terms, which may include fixed rate loans, variable rate loans or interest rate hedges. If we are unable to acquire suitable properties or obtain suitable financing terms for future acquisitions or refinancing, our results of operations may be adversely affected.

Our operating results and cash flows are primarily influenced by rental income from our commercial properties, interest expense on our indebtedness and acquisition and operating expenses. Rental and other property income accounted for 87% of total revenue for both the three and nine months endedSeptember 30, 2018, and 88% and 89% of total revenue for the three and nine months endedSeptember 30, 2017, respectively. As 98.9% of our rentable square feet was under lease as of September 30, 2018 (including any month-to-month agreements) with a weighted average remaining lease term of 10.3 years, we believe our exposure to changes in commercial rental rates on our portfolio is substantially mitigated, except for vacancies

25

caused by tenant bankruptcies or other factors. Our advisor regularly monitors the creditworthiness of our tenants by reviewing each tenant’s financial results, any available credit rating agency reports on the tenant or guarantor, the operating history of the property with such tenant, the tenant’s market share and track record within its industry segment, the general health and outlook of the tenant’s industry segment and other information for changes and possible trends. If our advisor identifies significant changes or trends that may adversely affect the creditworthiness of a tenant, it will gather a more in-depth knowledge of the tenant’s financial condition and, if necessary, attempt to mitigate the tenant credit risk by evaluating the possible sale of the property, or identifying a possible replacement tenant should the current tenant fail to perform on the lease.

Operating Highlights and Key Performance Indicators

2018 Activity

• Acquired four properties for an aggregate purchase price of $43.8 million.

• Issued approximately1.5 millionshares of common stock in the Offerings for aggregate proceeds of$35.4 million($23.3 millionin Class A Shares and$12.1 millionin Class T Shares) before organization and offering costs, selling commissions and dealer manager fees of$2.5 million.

• Entered into a new credit agreement that increased the allowable borrowings and extended the maturity dates associated with the original modified credit agreement.

• Total debt increased by $25.5 million, from $309.6 million to $335.1 million.

Portfolio Information

As of September 30, 2018, we owned 140 properties, comprising 3.4 million rentable square feet of commercial space located in 33 states, which were 98.9% leased, including any month-to-month agreements, with a weighted average remaining lease term of 10.3 years. As of September 30, 2018, one of our tenants, Walgreens, accounted for 13% of our 2018 annualized rental income. As of September 30, 2018, no single geographic concentration accounted for greater than 10% of our 2018 annualized rental income. In addition, we had tenants in the pharmacy, discount store, sporting goods and grocery industries, which accounted for 14%, 13%, 12% and 11%, respectively, of our 2018 annualized rental income. The following table shows the property statistics of our real estate assets as of September 30, 2018 and 2017:

	As of September 30,
	2018		2017
Number of commercial properties	140		131
Rentable square feet (in thousands) (1)	3,359		3,014
Percentage of rentable square feet leased	98.9	%	98.8	%
Percentage of investment-grade tenants (2)	38.8	%	36.9	%

______________________

(1) Includes square feet of buildings on land parcels subject to ground leases.

(2) Investment-grade tenants are those with a credit rating of BBB- or higher by Standard & Poor’s Financial Services LLC (“Standard & Poor’s”) or a credit rating of Baa3 or higher by Moody’s Investor Service, Inc. (“Moody’s”). The ratings may reflect those assigned by Standard & Poor’s or Moody’s to the lease guarantor or the parent company, as applicable. The weighted average credit rating is weighted based on annualized rental income, and is for only those tenants rated by Standard & Poor’s.

The following table summarizes our real estate acquisition activity during the three and nine months endedSeptember 30, 2018 and 2017:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Commercial properties acquired	—		4		4		15
Purchase price of acquired properties (in thousands)	$	—	$	46,741	$	43,824	$	103,425
Rentable square feet (in thousands) (1)	—		283		175		482

______________________

(1) Includes square feet of buildings on land parcels subject to ground leases.

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Results of Operations

The following table provides summary information about our results of operations for the three and nine months endedSeptember 30, 2018 and 2017 (in thousands):

	Three Months Ended September 30,				2018 vs 2017 Increase (Decrease)		Nine Months Ended September 30,				2018 vs 2017 Increase (Decrease)
	2018		2017				2018		2017
Total revenues	$	13,965	$	11,749	$	2,216	$	40,613	$	32,580	$	8,033
General and administrative expenses	$	1,176	$	1,135	$	41	$	3,412	$	3,362	$	50
Property operating expenses	$	938	$	491	$	447	$	2,230	$	1,560	$	670
Real estate tax expenses	$	1,157	$	1,012	$	145	$	3,492	$	2,617	$	875
Advisory fees and expenses	$	1,584	$	1,389	$	195	$	4,603	$	3,965	$	638
Acquisition-related expenses	$	52	$	35	$	17	$	187	$	527	$	(340	)
Depreciation and amortization	$	4,664	$	4,009	$	655	$	13,944	$	11,159	$	2,785
Operating income	$	4,394	$	3,678	$	716	$	12,745	$	9,390	$	3,355
Interest expense and other, net	$	3,502	$	2,960	$	542	$	10,440	$	8,324	$	2,116
Net income	$	892	$	718	$	174	$	2,305	$	1,066	$	1,239

Revenue

Our revenues consist primarily of rental and other property income from net leased commercial properties. We also incur certain operating expenses that are subject to reimbursement by our tenants, which results in tenant reimbursement income.

The increase in revenue of $2.2 million and $8.0 million during the three and nine months endedSeptember 30, 2018, respectively, as compared to the same periods in 2017, was primarily due to the acquisition and management of nine additional income-producing properties subsequent to September 30, 2017. Rental and other property income from net leased commercial properties accounted for 87% of total revenue for both the three and nine months endedSeptember 30, 2018, respectively, and 88% and 89% of total revenue for the three and nine months endedSeptember 30, 2017, respectively. We also incurred certain operating expenses subject to reimbursement by our tenants, which resulted in $1.8 million and $5.2 million in tenant reimbursement income during the three and nine months endedSeptember 30, 2018, respectively, compared to $1.4 million and $3.6 million, respectively, during the same periods in 2017.

General and Administrative Expenses

The primary general and administrative expense items are escrow and trustee fees, operating expense reimbursements to our advisor, unused fees on the Credit Facility and accounting fees.

Theincreasein general and administrative expenses of$41,000and$50,000during thethree and nine months endedSeptember 30, 2018, respectively, as compared to the same periods in2017, was primarily due to increases in operating expense reimbursements to our advisor during thethree and nine months endedSeptember 30, 2018, primarily as a result of the acquisition ofnineadditional rental income-producing properties subsequent toSeptember 30, 2017.

Property Operating Expenses

Property operating expenses such as property repairs, maintenance and property-related insurance include both reimbursable and non-reimbursable property expenses. We are reimbursed by tenants for certain property operating expenses in accordance with the respective lease agreements.

The increase in property operating expenses of $447,000 and $670,000 during the three and nine months endedSeptember 30, 2018, respectively, as compared to the same periods in 2017, was primarily due to an increase in repair and maintenance costs as a result of the acquisition of nine additional properties subsequent to September 30, 2017, as well as recognizing a full period of property operating expenses on four and 15 properties acquired during the three and nine months endedSeptember 30, 2017, respectively.

Real Estate Tax Expenses

The increase in real estate tax expenses of $145,000 and $875,000 during the three and nine months endedSeptember 30, 2018, respectively, as compared to the same periods in 2017, was primarily due to the acquisition of nine additional properties subsequent to September 30, 2017, as well as recognizing a full period of real estate tax expenses on four and 15 properties acquired during the three and nine months endedSeptember 30, 2017, respectively.

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Advisory Fees and Expenses

Pursuant to the advisory agreement with CR V Advisors and based upon the amount of our current invested assets, we are required to pay to CR V Advisors a monthly advisory fee equal to one-twelfth of 0.75% of the average asset value. Additionally, we may be required to reimburse certain expenses incurred by CR V Advisors in providing such advisory services, subject to limitations as set forth in the advisory agreement.

The increase in advisory fees and expenses of $195,000 during the three months endedSeptember 30, 2018, as compared to the same period in 2017, was primarily due to an increase in our average asset value to $705.4 million for thethree months endedSeptember 30, 2018, compared to $621.5 million for thethree months endedSeptember 30, 2017.

Theincreasein advisory fees and expenses of$638,000during thenine months endedSeptember 30, 2018, as compared to the same period in2017, was primarily due to an increase in our average asset value to$689.0 millionfor thenine months endedSeptember 30, 2018, compared to$586.6 millionfor thenine months endedSeptember 30, 2017.

Acquisition-Related Expenses

We reimburse CR V Advisors or its affiliates for acquisition-related expenses incurred in the process of acquiring a property or the origination or acquisition of a loan, so long as the total acquisition fees and expenses relating to the transaction do not exceed 6.0% of the contract purchase price, unless otherwise approved by a majority of our board of directors, including a majority of our independent directors, as commercially competitive, fair and reasonable to us. We also reimburse CR V Advisors or its affiliates for insourced expenses incurred in the process of acquiring a property or the origination or acquisition of a loan, which are fixed on an annual basis to 0.5% of the contract purchase price of each property and 0.5% of the amount advanced for a loan or other investment, which will be prorated for any partial calendar year; provided, however, that acquisition expenses are not included in the contract purchase price of the property. In April 2017, we adopted ASU 2017-01, which clarifies the definition of a business by adding guidance to assist entities in evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. Our acquisitions made after the adoption of ASU 2017-01 qualify as asset acquisitions, and as such, acquisition-related fees and certain acquisition-related expenses related to these asset acquisitions are capitalized. Prior to the adoption of ASU 2017-01 in April 2017, all of our costs related to property acquisitions, including acquisition fees described below, were expensed as incurred, and all of our acquisitions were accounted for as business combinations. Prior to April 2017, acquisition-related expenses primarily consisted of legal, deed transfer and other costs related to real estate purchase transactions, including costs incurred for deals that were not consummated. We also pay CR V Advisors or its affiliates acquisition fees of up to 2.0% of: (1) the contract purchase price of each property or asset we acquire; (2) the amount paid in respect of the development, construction or improvement of each asset we acquire; (3) the purchase price of any loan we acquire; and (4) the principal amount of any loan we originate.

The increase in acquisition-related expenses of $17,000 during the three months endedSeptember 30, 2018, compared to the same period in 2017, was primarily due to an increase in advisor reimbursements. Acquisitions made during the three months endedSeptember 30, 2018 and 2017 were all accounted for as asset acquisitions in accordance with ASU 2017-01, and as such, acquisition costs were capitalized.

The decrease in acquisition-related expenses of $340,000 during the nine months endedSeptember 30, 2018, compared to the same period in 2017, was primarily due to the acquisition of two commercial properties during the nine months endedSeptember 30, 2017 that were accounted for as business combinations, and as such the acquisition-related costs were expensed as incurred. Acquisition-related costs related to the four asset acquisitions during the nine months endedSeptember 30, 2018 were capitalized in accordance with ASU 2017-01.

Depreciation and Amortization Expenses

The increase in depreciation and amortization expenses of $655,000 and $2.8 million during the three and nine months endedSeptember 30, 2018, respectively, as compared to the same periods in 2017, was primarily due to the acquisition of nine additional properties subsequent to September 30, 2017, as well as recognizing a full period of depreciation and amortization expenses on four and 15 properties acquired during the three and nine months endedSeptember 30, 2017, respectively.

Interest Expense and Other, Net

The increase in interest expense and other, net of $542,000 during the three months endedSeptember 30, 2018, as compared to the same period in 2017, was primarily due to an increase in the average aggregate amount of debt outstanding to $336.3 millionduring the three months endedSeptember 30, 2018, from$272.9 millionduring the three months endedSeptember 30, 2017.

The increase in interest expense and other, net of $2.1 million during the nine months endedSeptember 30, 2018, as compared to the same period in 2017, was primarily due to an increase in the average aggregate amount of debt outstanding to

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$329.3 million during the nine months endedSeptember 30, 2018, from $254.4 million during the nine months endedSeptember 30, 2017.

Same Store Properties

We review our stabilized operating results, measured by contract rental revenue, from properties that we owned for the entirety of both the current and prior year reporting periods, referred to as “same store” properties, and we believe that the presentation of operating results for same store properties provides useful information to stockholders. Contract rental revenue is a supplemental non-GAAP financial measure of real estate companies’ operating performance. Contract rental revenue is considered by management to be a helpful supplemental performance measure, as it provides a consistent method for the comparison of our properties. In determining the same store property pool, we include all properties that were owned for the entirety of both the current and prior reporting periods, except for properties during the current or prior year that were under development or redevelopment.

“Non-same store” properties, for purposes of the table below, includes properties acquired on or after July 1, 2017 and any properties under development or redevelopment. As shown in the table below, contract rental revenue on the 127 same store properties for the three months endedSeptember 30, 2018 increased $146,000 as compared to the same period in 2017. The same store properties were 98.6% occupied as of September 30, 2018, as compared to 98.7% occupied as of September 30, 2017.

The following table shows the contract rental revenue from properties owned for both of the entire three months endedSeptember 30, 2018 and 2017, along with a reconciliation to rental income, calculated in accordance with GAAP (dollar amounts in thousands):

	Number of Properties	Three Months Ended September 30,						Increase (Decrease)
		2018			2017			$ Change			% Change
Rental income – as reported		$	12,133		$	10,303		$	1,830		18	%
Less: Amortization (1)		(19		)	(78		)	59			(76	)%
Less: Straight-line rental income		431			574			(143		)	(25	)%
Total contract rental revenue		11,721			9,807			1,914			20	%
Less: “Non-same store” properties	13	2,067			299			1,768			591	%
“Same store” properties	127	$	9,654		$	9,508		$	146		1.5	%

______________________

(1) Includes amortization of above- and below-market lease intangibles and deferred lease incentives.

“Non-same store” properties, for purposes of the table below, includes properties acquired on or after January 1, 2017 and any properties under development or redevelopment. As shown in the table below, contract rental revenue on the 116 same store properties for the nine months endedSeptember 30, 2018 stayed consistent compared to the same period in 2017. The same store properties were 98.5% occupied as of September 30, 2018, as compared to 98.6% occupied as of September 30, 2017.

The following table shows the contract rental revenue from properties owned for both of the entire nine months endedSeptember 30, 2018 and 2017, along with a reconciliation to rental income, calculated in accordance with GAAP (dollar amounts in thousands):

	Number of Properties	Nine Months Ended September 30,						Increase (Decrease)
		2018			2017			$ Change			% Change
Rental income – as reported		$	35,449		$	29,022		$	6,427		22	%
Less: Amortization (1)		(178		)	(205		)	27			(13	)%
Less: Straight-line rental income		1,207			1,150			57			5	%
Total contract rental revenue		34,420			28,077			6,343			23	%
Less: “Non-same store” properties	24	8,323			1,921			6,402			333	%
“Same store” properties	116	$	26,097		$	26,156		$	(59	)	(0.2	)%

______________________

(1) Includes amortization of above- and below-market lease intangibles and deferred lease incentives.

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Distributions

The Board authorized a daily distribution, based on 365 days in the calendar year, of $0.004315068per Class A Share for stockholders of record of such class of shares as of the close of business on each day of the period commencing on January 1, 2018 and ending on March 31, 2019. The Board authorized a daily distribution on Class T Shares to our stockholders of record of such class of shares as of the close of business on each day of the period commencing on January 1, 2018 and ending on March 31, 2019, equal to $0.004315068 per Class T Share, less the per share distribution and stockholder servicing fees that are payable with respect to the Class T Shares (as calculated on a daily basis). As of September 30, 2018, we had distributions payable of $2.1 million.

The following table presents distributions and sources of distributions for the periods indicated below:

	Nine Months Ended September 30,
	2018				2017
	Amount		Percent		Amount		Percent
Distributions paid in cash	$	9,947	53	%	$	8,341	51	%
Distributions reinvested	8,786		47	%	7,881		49	%
Total distributions	$	18,733	100	%	$	16,222	100	%
Source of distributions:
Net cash provided by operating activities (1)	$	16,947	90	%	$	12,425	77	%
Proceeds from issuance of common stock (2)	—		—	%	3,797		23	%
Proceeds from the issuance of debt	1,786		10	%	—		—
Total sources	$	18,733	100	%	$	16,222	100	%

______________________

(1) Net cash provided by operating activities for the nine months endedSeptember 30, 2018 and 2017 was $16.9 million and $12.4 million, respectively.

(2) Prior to the adoption of ASU 2017–01 in April 2017, we treated our real estate acquisition–related fees and expenses as funded by proceeds from the Initial Offering, including proceeds from the DRIP. Therefore, for consistency, proceeds from the issuance of common stock used as a source of distributions for the nine months ended September 30, 2017 includes the amount by which real estate acquisition–related fees and expenses have reduced net cash flows from operating activities in prior periods.

Share Redemptions

Our share redemption program permits our stockholders to sell their shares of common stock back to us after they have held them for at least one year, subject to certain conditions and limitations. We may waive the one-year holding period upon request in the event of death, bankruptcy or other exigent circumstances as determined by our advisor. Funding for the redemption of shares will be limited to the cumulative net proceeds we receive from the sale of shares under the DRIP, net of shares redeemed to date. In addition, we will generally limit quarterly redemptions to approximately 1.25% of the weighted average number of shares outstanding during the trailing 12-month period ending on the last day of the fiscal quarter for which the redemptions are being paid, and to the net proceeds we receive from the sale of shares in the respective quarter under the DRIP. In addition, the Board may choose to amend the terms of, suspend or terminate our share redemption program at any time upon 30 days’ notice. We will not redeem in excess of 5.0% of the weighted average number of shares outstanding during the trailing 12 months prior to the end of the fiscal quarter for which the redemptions are being paid. Any of the foregoing limits might prevent us from accommodating all redemption requests made in any fiscal quarter or in any 12-month period. We received redemption requests of approximately 295,000 shares for $6.5 million in excess of the net proceeds we received from the issuance of shares under the DRIP during the three months ended September 30, 2018. Management, in its discretion, limited the amount of shares redeemed to an amount equal to net proceeds we received from the sale of shares pursuant to the DRIP during the respective period. During the nine months endedSeptember 30, 2018, we received valid redemption requests under our share redemption program totaling approximately 1.0 million shares, of which we redeemed 261,000 shares as of September 30, 2018 for $5.7 million (at an average redemption price of $22.00 per share) and approximately 135,000shares subsequent to September 30, 2018 for $3.0 million at an average redemption price of $22.05 per share. The remaining redemption requests relating to approximately 640,000 shares went unfulfilled. A valid redemption request is one that complies with the applicable requirements and guidelines of our share redemption program then in effect. The share redemptions were funded with proceeds from the DRIP.

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Liquidity and Capital Resources

General

We expect to utilize funds from the Offerings and future proceeds from secured or unsecured financing to complete future property acquisitions and for general corporate uses. Our operating cash flows will primarily be provided by the rental income received from leased properties. As of September 30, 2018, we had raised $444.8 million of gross proceeds from the Offerings ($398.7 million in Class A Shares and $46.1 million in Class T Shares) before organization and offering costs, selling commissions and dealer manager fees of $41.8 million.

Our Credit Facility provides for borrowings of up to $350.0 million, which includes $220.0 million in Term Loans and up to $130.0 million in Revolving Loans. As of September 30, 2018, we had $107.5 million in unused capacity under the Credit Facility, subject to borrowing availability. As of September 30, 2018, we also had cash and cash equivalents of $1.0 million.

Short-term Liquidity and Capital Resources

We expect our operating cash flows to increase as we continue to acquire properties. On a short-term basis, our principal demands for funds will be for the acquisition of real estate assets and the payment of acquisition-related expenses, operating expenses, distributions to stockholders and interest and principal on current and any future debt financings. We expect to meet our short-term liquidity requirements through net cash flows provided by operations and proceeds from the Offerings, as well as secured or unsecured borrowings from banks and other lenders to finance our future acquisitions. We believe that the resources stated above will be sufficient to satisfy our operating requirements for the foreseeable future, and we do not anticipate a need to raise funds from sources other than those described above within the next 12 months.

All organization and offering expenses (excluding selling commissions, dealer manager fees and distribution and stockholder servicing fees) are paid for by CR V Advisors or its affiliates and are reimbursed by us up to 2.0% of aggregate gross proceeds from the Offerings. A portion of the other organization and offering expenses may be underwriting compensation. As of September 30, 2018, CR V Advisors had paid organization and offering expenses in excess of 2.0% of aggregate gross offering proceeds. The amounts in excess of 2.0% of aggregate gross offering proceeds were not included in our condensed consolidated financial statements because such amounts were not a liability of ours as they exceeded 2.0% of proceeds from the Initial Offering. As we raise additional proceeds from the Follow-on Offering, these excess amounts may become payable.

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 assets and the payment of tenant improvements, acquisition-related expenses, operating expenses, distributions and redemptions to stockholders and interest and principal on any current and future indebtedness. Generally, we expect to meet our long-term liquidity requirements through proceeds from net cash flows provided by operations, the sale of our common stock and from secured or unsecured borrowings from banks and other lenders.

We expect that substantially all net cash flows from operations will be used to pay distributions to our stockholders after certain capital expenditures, including tenant improvements and leasing commissions, are paid; however, we have used, and may continue to use, other sources to fund distributions, as necessary, including proceeds from the Offerings, borrowings on our Credit Facility and/or future borrowings on unencumbered assets. To the extent that cash flows from operations are lower due to fewer properties being acquired or lower than expected returns on the properties, distributions paid to our stockholders may be lower. We expect that substantially all net cash flows from the Offerings or debt financings will be used to fund acquisitions, certain capital expenditures, repayments of outstanding debt or distributions to our stockholders.

Contractual Obligations

As of September 30, 2018, we had $335.1 million of debt outstanding with a weighted average interest rate of 3.8%. See Note 7 — Notes Payable and Credit Facility to our condensed consolidated financial statements in this Quarterly Report on Form 10-Q for certain terms of our debt outstanding.

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Our contractual obligations as of September 30, 2018 were as follows (in thousands):

	Payments due by period (1)
	Total		Less Than 1 Year		1-3 Years		3-5 Years		More Than 5 Years
Principal payments – credit facility	$	242,500	$	—	$	—	$	242,500	$	—
Interest payments – credit facility (2)	40,579		9,212		18,500		12,867		—
Principal payments – fixed rate debt (3)	92,600		—		21,792		47,366		23,442
Interest payments – fixed rate debt (4)	14,130		3,750		6,989		2,154		1,237
Total	$	389,809	$	12,962	$	47,281	$	304,887	$	24,679

______________________

(1) The table does not include amounts due to CR V Advisors or its affiliates pursuant to our advisory agreement because such amounts are not fixed and determinable.

(2) As of September 30, 2018, the Term Loans outstanding totaled $220.0 million, all of which is subject to interest rate swap agreements. As of September 30, 2018, the weighted average interest rate for the Swapped Term Loan was 3.8%. The remaining $22.5 million outstanding under the Credit Facility had a weighted average interest rate of 3.9% as of September 30, 2018.

(3) Principal payment amounts reflect actual payments based on the face amount of notes payable that are secured by our wholly-owned properties.

(4) As of September 30, 2018, we had $21.1 million of variable rate debt effectively fixed through the use of interest rate swap agreements. We used the effective interest rates fixed under our interest rate swap agreements to calculate the debt payment obligations in future periods.

We expect to incur additional borrowings in the future to acquire additional properties and other real estate-related assets. There is no limitation on the amount we may borrow against any single improved property. Our borrowings will not exceed 75% of the cost of our gross assets (or 300% of net assets) as of the date of any borrowing, which is the maximum level of indebtedness permitted under the North American Securities Administrators Association Statement of Policy Regarding Real Estate Investment Trusts; however, we may exceed that limit if approved by a majority of our independent directors and disclosed to our stockholders in the next quarterly report along with justification for such excess borrowing. As of September 30, 2018, our ratio of debt to the cost (before deducting depreciation or other non-cash reserves) of our gross assets was49.4%and our ratio of debt to the fair market value of our gross assets was47.5%. Fair market value is based on the estimated market value of our real estate assets as of December 31, 2017 that were used to determine our estimated per share NAV, and for those assets acquired from January 1, 2018 through September 30, 2018 is based on the purchase price.

Our management reviews net debt as part of its management of our overall liquidity, financial flexibility, capital structure and leverage, and we therefore believe that the presentation of net debt provides useful information to stockholders. Net debt is a non-GAAP measure used to show our outstanding principal debt balance, excluding certain GAAP adjustments, such as premiums or discounts, less all cash and cash equivalents. As of September 30, 2018, our net debt leverage ratio, which is the ratio of net debt to total gross real estate assets net of gross intangible lease liabilities, was 49.3%. The following table provides a reconciliation of the credit facility and notes payable, net balance, as reported on our condensed consolidated balance sheet, to net debt as of September 30, 2018 (dollar amounts in thousands):

	Balance as of September 30, 2018
Credit facility and notes payable, net	$	332,854
Deferred costs and net premiums (1)	2,246
Less: Cash and cash equivalents	(1,032		)
Net debt	$	334,068
Gross real estate assets, net (2)	$	678,258
Net debt leverage ratio	49.3		%

______________________

(1) Deferred costs relate to mortgage notes payable and the term portion of the Credit Facility.

(2) Net of gross intangible lease liabilities.

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Cash Flow Analysis

Operating Activities. Net cash provided by operating activities increasedby $4.5 million for the nine months endedSeptember 30, 2018, as compared to the same period in 2017. The change was primarily due to the acquisition of nine additional properties subsequent to September 30, 2017, resulting in increases in net income and depreciation and amortization expenses. See “— Results of Operations” for a more complete discussion of the factors impacting our operating performance.

Investing Activities. Net cash used in investing activities decreasedby $58.3 million for the nine months endedSeptember 30, 2018, as compared to the same period in 2017. The decreaseresulted primarily from the decrease in real estate investments of $58.3 million during the nine months endedSeptember 30, 2018, as compared to the same period in 2017.

Financing Activities. Net cash provided by financing activities decreased$46.1 million for the nine months endedSeptember 30, 2018, as compared to the same period in 2017. The change was primarily due to a decrease in proceeds from the Offerings of $34.4 million and an increase in redemptions of common stock of $4.8 million.

Election as a REIT

We elected to be taxed, and currently qualify, as a REIT for federal income tax purposes commencing with our taxable year ended December 31, 2014. To maintain our qualification as a REIT, we must continue to meet certain requirements relating to our organization, sources of income, nature of assets, distributions of income to our stockholders and recordkeeping. As a REIT, we generally are not subject to federal income tax on taxable income that we distribute to our stockholders so long as we distribute at least 90% of our annual taxable income (computed without regard to the dividends paid deduction and excluding net capital gains).

If we fail to maintain our qualification as a REIT for any reason in a taxable year and applicable relief provisions do not apply, we will be subject to tax on our taxable income at regular corporate rates. We will not be able to deduct distributions paid to our stockholders in any year in which we fail to maintain our qualification as a REIT. We also will be disqualified for the four taxable years following the year during which qualification was lost, unless we are entitled to relief under specific statutory provisions. Such an event could materially adversely affect our net income and net cash available for distribution to stockholders. However, we believe that we are organized and operate in such a manner as to maintain our qualification as a REIT for federal income tax purposes. No provision for federal income taxes has been made in our accompanying condensed consolidated financial statements. We are subject to certain state and local taxes related to the operations of properties in certain locations, which have been provided for in our accompanying condensed consolidated financial statements.

Critical Accounting Policies and Estimates

Our accounting policies have been established to conform with GAAP. The preparation of financial statements in conformity with GAAP requires us to use judgment in the application of accounting policies, including making estimates and assumptions. These judgments affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Management believes that we have made these estimates and assumptions in an appropriate manner and in a way that accurately reflects our financial condition. We continually test and evaluate these estimates and assumptions using our historical knowledge of the business, as well as other factors, to ensure that they are reasonable for reporting purposes. However, actual results may differ from these estimates and assumptions. If our judgment or interpretation of the facts and circumstances relating to various transactions had been different, it is possible that different accounting policies would have been applied, thus resulting in a different presentation of the financial statements. Additionally, other companies may utilize different estimates that may impact comparability of our results of operations to those of companies in similar businesses. We believe the following critical accounting policies govern the significant judgments and estimates used in the preparation of our financial statements, which should be read in conjunction with the more complete discussion of our accounting policies and procedures included in Note 2 — Summary of Significant Accounting Policies to our audited consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2017. We consider our critical accounting policies to be the following:

• Recoverability of Real Estate Assets; and

• Allocation of Purchase Price of Real Estate Assets.

A complete description of such policies and our considerations is contained in our Annual Report on Form 10-K for the year ended December 31, 2017. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with our audited consolidated financial statements as of and for the year ended December 31, 2017 and related notes thereto.

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We continually monitor events and changes in circumstances that could indicate that the carrying amounts of our real estate assets may not be recoverable. Impairment indicators that we consider include, but are not limited to: bankruptcy or other credit concerns of a property’s major tenant, such as a history of late payments, rental concessions and other factors; a significant decrease in a property’s revenues due to lease terminations; vacancies; co-tenancy clauses; reduced lease rates; changes in anticipated holding periods; or other circumstances. We are in the process of determining if anticipated holding periods for certain properties may materially differ from the initial intended holding periods for such properties, which could result in an impairment charge in the future.

Related-Party Transactions and Agreements

We have entered into agreements with CR V Advisors or its affiliates whereby we agree to pay certain fees to, or reimburse certain expenses of, CR V Advisors or its affiliates such as acquisition and advisory fees and expenses, organization and offering costs, selling commissions, dealer manager fees and expenses, distribution and stockholder servicing fees, leasing fees and reimbursement of certain operating costs. In addition, pursuant to the Services Agreement, VEREIT OP, which is affiliated with one of our directors, is obligated to provide certain services to CCO Group and to us, including operational real estate support. We are not a party to the Services Agreement. See Note 10 — Related-Party Transactions and Arrangements to our condensed consolidated financial statements in this Quarterly Report on Form 10-Q for a discussion of the various related-party transactions, agreements and fees.

Conflicts of Interest

Avraham Shemesh, our chief executive officer, president and the chairman of our board of directors, who is also a founder and principal of CIM and certain of its affiliates and a director of CCIT II, and Nathan D. DeBacker, our chief financial officer and treasurer, act as executive officers and/or a director of one or more other programs sponsored by CCO Group. One of our directors, Calvin E. Hollis, also serves as a director of CCIT II. Similarly, Glenn J. Rufrano, one of our directors, serves as a director of CCIT II, CCIT III and Cole Income NAV Strategy, as well as chief executive officer and a director for VEREIT, Inc., the parent company of VEREIT OP, who provides certain services to us and our advisor through the Services Agreement. In addition, certain affiliates of CR V Advisors act as advisors to CCPT IV, CCIT II, Cole Income NAV Strategy, CCIT III and/or other real estate offerings in registration, all of which are or intend to be public, non-listed REITs offered, distributed and/or managed by affiliates of CR V Advisors. As such, there may be conflicts of interest where CR V Advisors or its affiliates, while serving in the capacity as sponsor, general partner, officer, director, key personnel and/or advisor for CIM or another real estate program sponsored or operated by CCO Group, including other real estate offerings in registration, may be in conflict with us in connection with providing services to other real estate-related programs related to property acquisitions, property dispositions, and property management, among others. The compensation arrangements between affiliates of CR V Advisors and these other real estate programs sponsored or operated by CCO Group could influence the advice provided to us. See Part I, Item 1. Business — Conflicts of Interest in our Annual Report on Form 10-K for the year ended December 31, 2017.

Off-Balance Sheet Arrangements

As of September 30, 2018 and December 31, 2017, we had no material off-balance sheet arrangements that had or are reasonably likely to have a current or future effect on our financial condition, results of operations, liquidity or capital resources.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Market Risk

The market risk associated with financial instruments and derivative financial instruments is the risk of loss from adverse changes in market prices or interest rates. Our market risk arises primarily from interest rate risk relating to variable-rate borrowings. To meet our short and long-term liquidity requirements, we borrow funds at a combination of fixed and variable rates. Our interest rate risk management objectives are to limit the impact of interest rate changes on earnings and cash flows and to manage our overall borrowing costs. To achieve these objectives, from time to time, we may enter into interest rate hedge contracts such as swaps, collars and treasury lock agreements in order to mitigate our interest rate risk with respect to various debt instruments. We do not intend to hold or issue these derivative contracts for trading or speculative purposes. We do not have any foreign operations and thus we are not exposed to foreign currency fluctuations.

Interest Rate Risk

As of September 30, 2018, we had an aggregate balance of $22.5 million of variable rate debt outstanding under our Credit Facility, excluding any debt subject to interest rate swap agreements, and therefore, we are exposed to interest rate changes in

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LIBOR. As of September 30, 2018, an increase or decrease of 50 basis points in interest rates would result in an increase or decrease in interest expense of $113,000 per annum.

As of September 30, 2018, we had three interest rate swap agreements outstanding, which mature on various dates from April 25, 2019 through March 28, 2022, with an aggregate notional amount of $241.1 million and an aggregate fair value of the net derivative asset of $1.6 million. The fair value of these interest rate swap agreements is dependent upon existing market interest rates and swap spreads. As of September 30, 2018, an increase of 50 basis points in interest rates would result in a derivative asset of $3.7 million, representing a $2.1 million net increase to the fair value of the net derivative asset. A decrease of 50 basis points would result in a derivative liability of $529,000, representing a $2.1 million net decrease to the fair value of the net derivative asset.

As the information presented above includes only those exposures that existed as of September 30, 2018, it does not consider exposures or positions arising after that date. The information presented herein has limited predictive value. Future actual realized gains or losses with respect to interest rate fluctuations will depend on cumulative exposures, hedging strategies employed and the magnitude of the fluctuations.

These amounts were determined by considering the impact of hypothetical interest rate changes on our borrowing costs and assume no other changes in our capital structure.

Credit Risk

Concentrations of credit risk arise when a number of tenants are engaged in similar business activities, or activities in the same geographic region, or have similar economic features that would cause their ability to meet contractual obligations, including those to us, to be similarly affected by changes in economic conditions. We are subject to tenant, geographic and industry concentrations. Any downturn of the economic conditions in one or more of these tenants, states or industries could result in a material reduction of our cash flows or material losses to us.

The factors considered in determining the credit risk of our tenants include, but are not limited to: payment history; credit status and change in status (credit ratings for public companies are used as a primary metric); change in tenant space needs (i.e., expansion/downsize); tenant financial performance; economic conditions in a specific geographic region; and industry specific credit considerations. We believe that the credit risk of our portfolio is reduced by the high quality of our existing tenant base, reviews of prospective tenants’ risk profiles prior to lease execution and consistent monitoring of our portfolio to identify potential problem tenants and mitigation options.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in our reports under 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. In designing and evaluating the disclosure controls and procedures, we recognize that no controls and procedures, no matter how well designed and operated, can provide absolute assurance of achieving the desired control objectives.

As required by Rules 13a-15(b) and 15d-15(b) of the Exchange Act, an evaluation as of September 30, 2018 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, 2018, were effective at a reasonable assurance level.

Changes in Internal Control Over Financial Reporting

No change occurred in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the three months endedSeptember 30, 2018 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II — OTHER INFORMATION

Item 1. Legal Proceedings

In the ordinary course of business, we may become subject to litigation or claims. We are not aware of any material pending legal proceedings, other than ordinary routine litigation incidental to our business, to which we are a party or to which our properties are the subject.

Item 1A. Risk Factors

Except as set forth below, 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, 2017.

We have paid, and may continue to pay, some of our distributions from sources other than cash flows from operations, including borrowings, proceeds from asset sales or the sale of our securities, which may reduce the amount of capital we ultimately deploy in our real estate operations and may negatively impact the value of our common stock.

To the extent that cash flow from operations has been or is insufficient to fully cover our distributions to our stockholders, we have paid, and may continue to pay, some of our distributions from sources other than cash flows from operations. Such sources may include borrowings, proceeds from asset sales or the sale of our securities in the Offerings or future offerings. We have no limits on the amounts we may use to pay from sources other than cash flow from operations. The payment of distributions from sources other than cash provided by operating activities mayreduce the amount of proceeds available for acquisitions and operations or cause us to incur additional interest expense as a result of borrowed funds, and may cause subsequent holders of our common stock to experience dilution. This may negatively impact the value of our common stock.

The following table presents distributions and sources of distributions for the periods indicated below:

	Nine Months Ended September 30, 2018				Year Ended December 31, 2017
	Amount		Percent		Amount		Percent
Distributions paid in cash	$	9,947	53	%	$	11,468	52	%
Distributions reinvested	8,786		47	%	10,696		48	%
Total distributions	$	18,733	100	%	$	22,164	100	%
Source of distributions:
Net cash provided by operating activities (1)	$	16,947	90	%	$	16,033	72	%
Proceeds from issuance of common stock (2)	—		—	%	6,026		27	%
Proceeds from the issuance of debt	1,786		10	%	105		1	%
Total sources	$	18,733	100	%	$	22,164	100	%

______________________

(1) Net cash provided by operating activities for the nine months endedSeptember 30, 2018 and the year ended December 31, 2017 was $16.9 million and $16.0 million, respectively.

(2) Prior to the adoption of ASU 2017–01 in April 2017, we treated our real estate acquisition–related fees and expenses as funded by proceeds from the Initial Offering, including proceeds from the DRIP. Therefore, for consistency, proceeds from the issuance of common stock used as a source of distributions for the year ended December 31, 2017 includes the amount by which real estate acquisition–related fees and expenses have reduced net cash flows from operating activities in prior periods.

The proposed SEC standard of conduct for investment professionals could impact our ability to raise capital.

On April 18, 2018, the SEC proposed “Regulation Best Interest,” a new standard of conduct for broker-dealers under the Exchange Act that includes: (i) the requirement that broker-dealers refrain from putting the financial or other interests of the broker-dealer ahead of the retail customer, (ii) a new disclosure document, the consumer or client relationship summary, or Form CRS, which would require both investment advisers and broker-dealers to provide disclosure highlighting details about their services and fee structures and (iii) proposed interpretative guidance that would establish a federal fiduciary standard for investment advisers. The public comment period on Regulation Best Interest ended on August 7, 2018.

Proposed Regulation Best Interest is complex and may be subject to revision or withdrawal. Plan fiduciaries and the beneficial owners of IRAs are urged to consult with their own advisors regarding the impact that proposed Regulation Best Interest may have on purchasing and holding interests in our company.  Proposed Regulation Best Interest or any other

36

legislation or regulations that may be introduced or become law in the future could have negative implications on our ability to raise capital from potential investors, including those investing through IRAs.

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

As of September 30, 2018, we had issued approximately 17.8 million shares of our common stock in the Offerings for gross offering proceeds of $444.8 million ($398.7 million in Class A Shares and $46.1 million in Class T Shares), before offering costs, selling commissions and dealer manager fees of $41.8 million, out of which we paid $32.9 million in selling commissions and dealer manager fees and $8.9 million in organization and offering costs payable to CR V Advisors or its affiliates. In addition, we pay CCO Capital a distribution and stockholder servicing fee for Class T Shares sold in the primary portion of the Offerings. Through October 4, 2016, we paid a distribution and stockholder servicing fee for Class T shares that was calculated on a daily basis in the amount of 1/365th of 0.8% of the estimated per share NAV of the Class T Shares sold in the primary portion of the Initial Offering. Beginning on October 5, 2016, the distribution and stockholder servicing fee is calculated on a daily basis in an amount equal to 1/365th of 1.0% of the estimated per share NAV of the Class T Shares sold in the primary portion of the Offerings. The aggregate distribution and stockholder servicing fee for Class T Shares will not exceed an amount equal to 4.0% of the total gross offering proceeds of Class T Shares sold in the primary portion of the Offerings. We pay the distribution and stockholder servicing fee from cash flow from operations or, if our cash flow from operations is not sufficient to pay the distribution and stockholder servicing fee, from borrowings in anticipation of future cash flow. With the net offering proceeds and indebtedness, we acquired $678.3 million in real estate and related assets and have expensed acquisition costs of $17.2 million. Additionally, since inception, we have incurred costs of $16.8 million in acquisition fees and expense reimbursements to CR V Advisors, which includes $3.8 million that was capitalized in accordance with ASU 2017-01.

On August 1, 2017, the Registration Statement on Form S-11 (Registration No. 333-215274) for the Follow-on Offering of an aggregate of $1.2 billion in Class A Shares and Class T Shares in the primary portion of the Follow-on Offering and an additional $300.0 million in shares of common stock pursuant to the Second Amended and Restated DRIP was declared effective by the SEC. As of November 7, 2018, we have sold approximately 18.0 million shares of our common stock in the Offerings for aggregate gross offering proceeds of $449.3 million ($402.3 million in Class A Shares and $47.0 million in Class T Shares).

The Board has adopted a share redemption program that permits our stockholders to sell their shares back to us after they have held them for at least one year, subject to the significant conditions and limitations described in the Registration Statements for the Offerings. We may waive the one-year holding period upon request in the event of death, bankruptcy or other exigent circumstances as determined by our advisor. In addition, the Board may choose to amend the terms of, suspend or terminate our share redemption program at any time upon 30 days’ notice. Funding for the redemption of shares will be limited to the cumulative net proceeds we receive from the sale of shares under the DRIP, net of shares redeemed to date. Under our share redemption program, we will not redeem in excess of 5.0% of the weighted average number of shares outstanding during the trailing 12 months prior to the end of the fiscal quarter for which the redemptions are being paid. In addition, we will generally limit quarterly redemptions to approximately 1.25% of the weighted average number of shares outstanding during the trailing 12-month period ending on the last day of the fiscal quarter for which the redemptions are being paid, and to the net proceeds we receive from the sale of shares in the respective quarter under the DRIP. Any of the foregoing limits might prevent us from accommodating all redemption requests made in any fiscal quarter or in any 12-month period. We received redemption requests of approximately 295,000 shares for $6.5 million in excess of the net proceeds we received from the issuance of shares under the DRIP during the three months ended September 30, 2018. Management, in its discretion, limited the amount of shares redeemed to an amount equal to net proceeds we received from the sale of shares pursuant to the DRIP during the respective period. The estimated per share NAV of $22.18 determined by the Board as of December 31, 2017 serves as the most recent estimated value for purposes of the share redemption program, effective March 29, 2018, until such time as the Board determines a new estimated per share NAV.

37

In general, we redeem shares on a quarterly basis. During the three months ended September 30, 2018, we redeemed shares, including those redeemable due to death, as follows:

Period		Total Number of Shares Redeemed	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
July 1, 2018 – July 31, 2018
	Class A Shares	—	$	—	—	(1)
	Class T Shares	—	$	—	—	(1)
August 1, 2018 – August 31, 2018
	Class A Shares	132,419	$	22.07	132,419	(1)
	Class T Shares	366	$	21.36	366	(1)
September 1, 2018 – September 30, 2018
	Class A Shares	—	$	—	—	(1)
	Class T Shares	—	$	—	—	(1)
Total		132,785			132,785	(1)

______________________

(1) A description of the maximum number of shares that may be purchased under our share redemption program is included in the narrative preceding this table.

Unregistered Sales of Equity Securities

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

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Item 6. Exhibits

The following exhibits are included, or incorporated by reference, in this Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2018 (and are numbered in accordance with Item 601 of Regulation S-K).

Exhibit No.	Description
3.1	Articles of Amendment and Restatement of Cole Credit Property Trust V, Inc. dated February 7, 2014 (Incorporated by reference to Exhibit 3.1 to the Company’s Pre-Effective Amendment No. 2 to Form S-11 (File No. 333-189891), filed February 10, 2014).
3.2	Articles of Amendment of the Articles of Amendment and Restatement of Cole Credit Property Trust V, Inc. dated March 7, 2014 (Incorporated by reference to Exhibit 3.2 to the Company’s Pre-Effective Amendment No. 3 to Form S-11 (File No. 333-189891), filed March 13, 2014).
3.3	Articles of Amendment to the Articles of Amendment and Restatement of Cole Credit Property Trust V, Inc., filed on March 4, 2016 (Incorporated by reference to Exhibit 3.1 to the Company’s Form 8-K (File No. 000-55437), filed March 8, 2016).
3.4	Articles Supplementary to the Articles of Amendment and Restatement of Cole Credit Property Trust V, Inc., filed on March 4, 2016 (Incorporated by reference to Exhibit 3.2 to the Company’s Form 8-K (File No. 000-55437), filed March 8, 2016).
3.5	Articles of Amendment to the Articles of Amendment and Restatement of Cole Credit Property Trust V, Inc. filed on August 2, 2017 (Incorporated by reference to Exhibit 3.6 to the Company’s Post-Effective Amendment No. 1 to Form S-11 (File No. 333-215274), filed August 2, 2017).
3.6	Amended and Restated Bylaws of Cole Credit Property Trust V, Inc. effective February 7, 2014 (Incorporated by reference to Exhibit 3.2 to the Company’s Pre-Effective Amendment No. 2 to Form S-11 (File No. 333-189891), filed February 10, 2014).
4.1	Form of Initial Subscription Agreement (Incorporated by reference to Appendix B to the Company’s Prospectus filed pursuant to Rule 424(b)(3) (File No. 333-215274), filed April 26, 2018).
4.2	Form of Additional Subscription Agreement (Incorporated by reference to Appendix C to the Company’s Prospectus filed pursuant to Rule 424(b)(3) (File No. 333-215274), filed April 26, 2018).
4.3	Second Amended and Restated Distribution Reinvestment Plan (Incorporated by reference to Appendix D to the Company’s Prospectus filed pursuant to Rule 424(b)(3) (File No. 333-215274), filed April 26, 2018).
10.1*	Cole Credit Property Trust V, Inc. 2018 Equity Incentive Plan
31.1*	Certifications of the Principal Executive Officer of the Company pursuant to Exchange Act Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certifications of the Principal Financial Officer of the Company pursuant to Exchange Act Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**	Certifications of the Principal Executive Officer and Principal 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.

**

In accordance with Item 601(b)(32) of Regulation S-K, this Exhibit is not deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section. Such certifications will not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.

39

SIGNATURE

Pursuant to the requirements 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.

	Cole Credit Property Trust V, Inc.
	(Registrant)
By:	/s/ Nathan D. DeBacker
Name:	Nathan D. DeBacker
Title:	Chief Financial Officer and Treasurer
	(Principal Financial Officer)

Date: November 13, 2018

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EX-10.1

Exhibit 10.1

COLE CREDIT PROPERTY TRUST V, INC.

2018 EQUITY INCENTIVE PLAN

1. GENERAL

1.1Purpose. The purpose of this Plan is to help the Company: (1) align the interests of Participants (as hereinafter defined) with the Company's stockholders; and (2) promote ownership of the Company's equity.

1.2Definitions of Certain Terms. For purposes of this Plan, the following terms have the meanings set forth below:

(a)Action Effective Date shall have the meaning as provided in §4.1.

(b)Award means an award made pursuant to the Plan, which shall be either a Restricted Stock Award or a Deferred Stock Award.

(c)Award Agreement means the written document by which each Award is evidenced, and which is executed by a Participant as a condition to receiving an Award or the benefits under an Award, and which sets forth the terms and provisions applicable to Awards granted under the Plan to such Participant. Any reference herein to an agreement in writing will be deemed to include an electronic writing to the extent permitted by applicable law.

(d)Board means the Board of Directors of the Company.

(e)Change of Control means either of the following: (i) any transaction or series of transactions pursuant to which the Company sells, transfers, leases, exchanges, or disposes of substantially all (i.e., at least eighty-five percent (85%)) of its assets for cash or property, or for a combination of cash and property, or for other consideration; provided, however, that with respect to any such sales, transfers, leases, exchanges, or dispositions of assets pursuant to a plan of liquidation by the Company, a Change of Control shall not have been deemed to occur until the Board has completed all required actions pursuant to such plan of liquidation and the winding up of the Company; or (ii) any transaction pursuant to which persons who are not current stockholders of the Company acquire by merger, consolidation, reorganization, division, or other business combination or transaction, or by a purchase of an interest in the Company, an interest in the Company so that after such transaction, the stockholders of the Company immediately prior to such transaction no longer have a controlling (i.e., 50% or more) voting interest in the Company.

(f)Code means the Internal Revenue Code of 1986, as amended from time to time, or any successor thereto, and the applicable rulings and regulations thereunder.

(g)Common Stock means the Class A and Class T common stock of the Company, par value $0.01 per share, and any other securities or property issued in exchange therefor or in lieu thereof pursuant to §1.7(b).

(h)Company means Cole Credit Property Trust V, Inc. and any Subsidiary, and any successor entity thereto.

(i)Director means a member of the Board.

(j)Deferred Stock Award means an Award of Deferred Stock Units, where each Deferred Stock Unit shall entitle the Participant to receive one Share at such future time and upon such terms as may be specified by the Board in the Award Agreement evidencing such Award, subject to all terms and provisions of this Plan and the Award Agreement evidencing such Award.

(k)Deferred Stock Unit means a unit awarded pursuant to a Deferred Stock Award.

(l)Effective Date means the date on which the Board has approved this Plan, which is August 10, 2018.

(m)Employee means any common law employee of the Company or of any Subsidiary.

(n)Exchange Act means the Securities Exchange Act of 1934, as the same may from time to time be amended.

(o)Fair Market Value means, with respect to a Share, (i) the closing sales price per share on the national securities exchange on which the Shares are principally traded, for the last preceding date on which there was a sale of such Shares on such exchange; (ii) if the Shares are then traded in an over-the-counter market, the average of the closing bid and asked prices for the Shares in such over-the-counter market for the last preceding date on which there was a sale of such Shares in such market; or (iii) if the Shares are not then listed on a national securities exchange or traded in an over-the-counter market, the most recent value (which, unless otherwise determined by the Board, shall be the most recent net asset value) as the Board, in its sole discretion, shall determine, unless determined as otherwise specified herein or in any applicable Award Agreement. For purposes of the grant of any Award, the applicable date will be the trading day on which the Award is granted or, if the date the Award is granted is not a trading day, the trading day immediately prior to the date the Award is granted.

(p)Insider means an individual who is, on the relevant date, an Officer, Director or ten percent (10%) beneficial owner of any class of the Company’s equity securities that is registered pursuant to Section 12 of the Exchange Act, all as defined under Section 16 of the Exchange Act.

(q)Non-Assumed DSU shall have the meaning as provided in §4.1.

(r)Non-Employee Director means a member of the Board who is not an Employee or Officer of the Company or who is not determined by the Board to be an independent member of the Board.

(s)Officer means any officer of the Company, or of any Subsidiary.

(t)Outside Director means a Director who is not an Employee or Officer of the Company and who qualifies as a “non-employee director” under Rule 16b-3(b)(3) under the Exchange Act, as amended from time to time.

(u)Participant means a Non-Employee Director of the Company who receives an Award under the Plan.

(v)Restricted Stock Award means an Award of Shares granted to a Participant under this Plan whereby the Participant has immediate rights of ownership in the Shares underlying the Award, but such Shares are subject to restrictions in accordance with the terms and provisions of this Plan and the Award Agreement pertaining to the Award and may be subject to forfeiture by the Participant until the earlier of (i) the time such restrictions lapse or are satisfied, or (ii) the time such Shares are forfeited, pursuant to the terms and provisions of the Award Agreement pertaining to the Award.

(w)Shares means shares of Common Stock.

(x)Subsidiary means any corporation, partnership, limited liability company or other legal entity (other than the entity for whom the Participant performs services) in an unbroken chain of entities beginning with the entity for whom a Participant performs services if, at the time of the granting of the Award, each of the entities other than the last entity in the unbroken chain owns stock or other equity interests possessing fifty percent (50%) or more of the total combined voting power of all classes of the then-outstanding stock or other equity interests in one of the other entities in such chain.

1.3Administration.

(a)Authority of the Board. The Board will administer the Plan, subject to §1.6 below. The Board, acting in its complete and absolute discretion, shall exercise all such powers and take all such action as it deems necessary or desirable to carry out the purposes of this Plan. In particular, the Board will have the authority in its sole discretion to:

(1)    exercise all of the powers granted to it under the Plan;

(2)    construe, interpret and implement the Plan and all Award Agreements;

(3)    prescribe, amend and rescind rules and regulations relating to the Plan, including rules governing the Board's own operations;

(4)    make all determinations necessary or advisable in administering the Plan;

(5)    amend the Plan to reflect changes in applicable law, or for other purposes;

(6)    amend the terms and conditions of any outstanding Awards as allowed under the Plan and such Awards;

(7)    establish, amend or waive rules and regulations for the Plan’s administration;

(8)    grant Awards and determine who will receive Awards, when such Awards will be granted and the terms of such Awards; and

(9)    take such other action in the administration and operation of the Plan as the Board may deem equitable under the circumstances.

The Board’s actions shall be final, binding and conclusive on the Company and any Subsidiary thereof, and on each affected Participant, and on each other Person directly or indirectly affected by such actions.

(b)Majority Rule; Unanimous Written Consent. Actions of the Board may be taken by the vote of a majority of its members in attendance at a meeting at which a quorum is present (which may be held telephonically) or by a memorandum or other written instrument signed by all members of the Board.

1.4Persons Eligible for Awards. Awards under the Plan may only be made to Non-Employee Directors of the Company.

1.5Awards to Non-Employee Directors. Non-Employee Directors shall be eligible to receive Awards under the Plan as determined by the Board from time to time. Any such Award shall be subject to the terms and conditions as determined by the Board and set forth in the applicable Award Agreement.

1.6Delegation of Authority. The Board may delegate its authority under the Plan, in whole or in part, to a committee appointed by the Board. Reference to the Board in this Plan shall specifically include reference to the committee where the Board has delegated its authority to the committee, and any action by the committee pursuant to a delegation of authority by the Board shall be deemed an action by the Board under the Plan. Notwithstanding the above, the Board may assume the powers and responsibilities granted to the committee at any time, in whole or in part. With respect to committee appointments and composition, only a committee comprised solely of Outside Directors may grant Awards to Insiders that will be exempt from Section 16(b) of the Exchange Act.

1.7Shares of Common Stock Available for Awards.

(a)Common Stock Subject to the Plan. Subject to the other provisions of this §1.7, the total number of Shares that may be granted under the Plan will be 400,000. Shares subject to an Award that is forfeited, expires or is settled for cash (in whole or in part), to the extent of such forfeiture, expiration or

cash settlement will be available for future grants of Awards under the Plan and will be added back in the same number of Shares as were deducted in respect of the grant of such Award.

(b)Adjustments. The Board may (i) adjust the number of Shares authorized pursuant to §1.7(a), and (ii) adjust the terms of any outstanding Awards (including, without limitation, the number of Shares covered by each outstanding Award and the type of property or securities to which the Award relates), in each case, in such manner as it deems appropriate (including, without limitation, by payment of cash) to prevent the enlargement or dilution of rights, as a result of any increase or decrease in the number of issued Shares (or issuance of shares of stock other than Shares) resulting from a recapitalization, stock split, reverse stock split, stock dividend, spinoff, split up, combination, reclassification or exchange of Shares, merger, consolidation, rights offering, separation, reorganization or liquidation or any other change in the corporate structure or Shares, including any extraordinary dividend or extraordinary distribution; provided, however, the Board shall be required to make such adjustments if such change in the capitalization of the Company constitutes an “equity restructuring” as defined in FASB ASC §718-10-20.

2. AWARDS UNDER THE PLAN

2.1Agreements Evidencing Awards. Each Award granted under the Plan will be evidenced by an Award Agreement that will contain such provisions and conditions as the Board deems appropriate. By accepting an Award pursuant to the Plan, a Participant thereby agrees that the Award will be subject to all of the terms and provisions of the Plan and the applicable Award Agreement.

2.2Restricted Stock Awards.

(a)Grants. The Company may retain any certificates representing Shares subject to a Restricted Stock Award in the Company’s possession until such time as all conditions and/or restrictions applicable to such Shares have been satisfied. The Board may require a cash payment from the Participant in exchange for the grant of a Restricted Stock Award or may grant a Restricted Stock Award without the requirement of a cash payment. Shares awarded pursuant to Restricted Stock Awards may be subject to the Participant entering into, or not entering into, any tax election under Code §83(b) that the Board may determine is appropriate or required.

(b)Acceleration of Award. The Board shall have the power to permit, in its complete and absolute discretion, an acceleration of the expiration of the applicable restrictions or the applicable period of such restrictions with respect to any part or all of the Shares awarded to a Participant as part of a Restricted Stock Award.

(c)Restrictions on Shares Awarded. Shares awarded pursuant to Restricted Stock Awards shall be subject to such restrictions (if any) as determined by the Board for such periods as may be determined by the Board, including no restrictions if the Board so determines. The Board may impose such restrictions on any Shares acquired pursuant to a Restricted Stock Award as it may deem advisable. The Board shall also require, as a condition for the acquisition of any Shares pursuant to a Restricted Stock Award held by a Participant, that the Participant execute an agreement by which the Participant agrees to be bound by, and subject to, any agreement(s) among the Company’s stockholders then in effect. Shares awarded pursuant to a Restricted Stock Award may be forfeited to the extent that a Participant fails to satisfy the applicable conditions or restrictions during the period of restriction.

(d)Right to Vote and Receive Dividends on Restricted Shares. Each Participant of a Restricted Stock Award will, during the period of restriction, be the beneficial and record owner of such restricted shares and will have full voting rights with respect thereto. Unless the Board determines otherwise in an Award Agreement, so long as the restrictions placed upon the Shares pursuant to the Restricted Stock Award constitute a “substantial risk of forfeiture” for purposes of Treas. Reg. §1.409A-1(d), then, during the period of restriction, all dividends (whether ordinary or extraordinary and whether paid in cash, additional

Shares or other property) or other distributions paid upon any Restricted Stock Award Shares will be retained by the Company for the account of the relevant Participant. Such dividends or other distributions will revert back to the Company if for any reason the restricted share upon which such dividends or other distributions were paid reverts back to the Company. Upon the expiration of the period of restriction, all such dividends or other distributions made on such restricted share and retained by the Company will be paid to the relevant Participant (without interest). If the restrictions placed upon the Shares pursuant to the Restricted Stock Award do not constitute a “substantial risk of forfeiture” for purposes of Treas. Reg. §1.409A-1(d), then such dividends or other distributions will not be paid to the Participant unless the Award Agreement specifies the terms and conditions that will be applicable to such payment.

(e)Transferability of Restricted Stock Awards. A Restricted Stock Award may not be transferred by the Participant, unless, subject to applicable law and other applicable restrictions, the Board expressly authorizes such transfer in writing. A Restricted Stock Award may be transferred at any time following the lapse of all restrictions on transferability of the Restricted Stock Award. Notwithstanding the foregoing, an Award Agreement may provide for more limited transferability than is described above.

2.3Deferred Stock Awards.

(a)Grants. The Board may grant Deferred Stock Awards through the grant of Deferred Stock Units to a Participant in such amounts and subject to such terms and conditions as the Board may determine. Each Deferred Stock Unit shall entitle the Participant to receive one Share at such future time and upon such terms as specified by the Board in the Award Agreement evidencing such award. Deferred Stock Units issued under the Plan may have restrictions which lapse based upon the service of a Participant, or based upon other criteria that the Board may determine appropriate. The Board may require a cash payment from the Participant in exchange for the grant of Deferred Stock Units or may grant Deferred Stock Units without the requirement of a cash payment. A Participant’s right to Shares based upon Deferred Stock Units shall be an unfunded, unsecured obligation of the Company until such time as Shares are actually issued to the Participant pursuant to the terms and provisions of the Award Agreement evidencing such Deferred Stock Units, and such Participant shall have no right to any specific assets of the Company prior thereto.

(b)Vesting of Deferred Stock Units. The Board may establish a vesting schedule applicable to a Deferred Stock Unit and may specify the times, vesting and/or performance goal requirements that may be applicable to a Deferred Stock Unit. Until the end of the period(s) of time specified in any such vesting schedule and/or the satisfaction of any such performance criteria, the Deferred Stock Units subject to such Award Agreement shall remain subject to forfeiture.

(c)Acceleration of Award. The Board shall have the power to permit, in its complete and absolute discretion, an acceleration of the applicable restrictions or the applicable period of such restrictions with respect to any part or all of the Deferred Stock Units awarded to a Participant.

(d)Restrictions on Shares Awarded. Shares awarded pursuant to Deferred Stock Units shall be subject to such restrictions as determined by the Board for periods determined by the Board. The Board may impose such restrictions on any Shares acquired pursuant to a Deferred Stock Unit as it may deem advisable. The Board shall also require, as a condition for the grant of any Shares to a Participant pursuant to Deferred Stock Units, that the Participant execute an agreement by which the Participant agrees to be bound by, and subject to, any agreement(s) among the Company’s stockholders then in effect.

(e)Voting, Dividend & Other Rights. Unless the applicable Award Agreement expressly provides otherwise, holders of Deferred Stock Units shall not be entitled to vote or to receive dividends until they become owners of the Shares pursuant to their Deferred Stock Units.

(f)Transferability of Deferred Stock Units. Except as otherwise provided in a Participant's Award Agreement, no Deferred Stock Unit granted under the Plan may be sold, transferred, pledged, assigned

or otherwise alienated or hypothecated by the holder Participant, except upon the death of the holder Participant by will or by the laws of descent and distribution. Notwithstanding the foregoing, an Award Agreement may provide for more limited transferability than is described above.

(g)Code §409A Requirements. A Deferred Stock Unit must be exempt from Code §409A or meet certain restrictions contained in Code §409A if it is to avoid taxation under Code §409A as a “nonqualified deferred compensation plan.” Grants of Deferred Stock Units under this Plan should be made with consideration of the impact of Code §409A with respect to such grant upon both the Company and the Participant of the Deferred Stock Unit.

2.4Dividend Equivalent Rights. The Board may include in the Award Agreement with respect to any Award a dividend equivalent right entitling the Participant to receive amounts equal to all or any portion of the regular cash dividends that would be paid on the Shares covered by such Award if such Shares had been delivered pursuant to such Award. The Participant holding a dividend equivalent right will have only the rights of a general unsecured creditor of the Company until payment of such amounts is made as specified in the applicable Award Agreement. In the event such a provision is included in an Award Agreement, the Board will determine whether such payments will be made in cash, in Shares or in another form, whether they will be conditioned upon the vesting of the Award to which they relate, the time or times at which they will be made, and such other terms and conditions as the Board will deem appropriate. Notwithstanding the foregoing, a dividend equivalent right must be exempt from Code §409A or meet certain restrictions contained in Code §409A if it is to avoid taxation under Code §409A as a “nonqualified deferred compensation plan.” Grants of dividend equivalent rights under this Plan should be made with consideration of the impact of Code §409A with respect to such grant upon both the Company and the Participant of the dividend equivalent right.

3. MISCELLANEOUS

3.1Amendments.

(a)Amendment of Plan. Unless otherwise provided in the Plan or in an Award Agreement, the Board may at any time and from time to time revise or amend the Plan in any respect whatsoever and, subject to §1.7(b), any such revision or amendment of the Plan shall be applicable to all Awards, except to the extent that such revision or amendment may materially adversely impair the rights of a Participant under an Award which has been granted prior to the date of such amendment (provided, however, that a revision or amendment that results solely in a change in the tax consequences with respect to an Award shall not be deemed to materially adversely impair rights of the Participant receiving such Award), and, to such extent, the revision or amendment shall not be applicable to such Award without the Participant's consent unless (A) this Plan and/or the Award Agreement evidencing such Award expressly allow such to occur, or (B) the Company would otherwise have the right to make such revision or amendment by applicable law.

(b)Amendment of Outstanding Award. Subject to §1.7(b), an outstanding Award Agreement issued to a Participant may not be amended to materially adversely impair the rights of such Participant without the Participant's consent unless (A) this Plan and/or the Award Agreement evidencing such Award expressly allow such to occur, or (B) the Company would otherwise have the right to make such revision or amendment by applicable law.

(c)Suspension of Awards; Termination of Plan. The Board may suspend the granting of Awards under this Plan at any time and may terminate this Plan at any time.

3.2Tax Withholding. Participants will be solely responsible for any applicable taxes (including, without limitation, income and excise taxes) and penalties, and any interest that accrues thereon, that they incur in connection with the receipt, vesting or disposition of any Award or Shares. However, notwithstanding the foregoing, the Company shall have the power and the right to deduct or withhold, or require a Participant

to remit to the Company, or any Subsidiary thereof, as a condition precedent for the fulfillment of any Award, an amount sufficient to satisfy Federal, state and local taxes, domestic or foreign, required by law or regulation to be withheld with respect to any taxable event arising as a result of this Plan and/or any action taken by a Participant with respect to an Award. Whenever Shares are to be issued to a Participant upon satisfaction of conditions to the fulfillment of a Deferred Stock Unit, or grant of (if a Code §83(b) election is properly made, if required) or substantial vesting of a Restricted Stock Award, the Company, or any Subsidiary thereof, shall have the right to require the Participant to remit to the Company, or any Subsidiary thereof, as a condition to the fulfillment of the Deferred Stock Unit, or as a condition to the grant (if a Code §83(b) election is properly made, if required) or substantial vesting of the Restricted Stock Award, an amount in cash (or, unless the Award Agreement provides otherwise, in Shares) sufficient to satisfy federal, state and local withholding tax requirements at the time of such satisfaction of conditions, or grant (if a Code §83(b) election is properly made, if required) or substantial vesting. However, notwithstanding the foregoing, to the extent that a Participant is an Insider, satisfaction of withholding requirements by having the Company, or any Subsidiary thereof, withhold Shares may only be made to the extent that such withholding of Shares (1) has met the requirements of an exemption under Rule 16b-3 promulgated under the Exchange Act, or (2) is a subsequent transaction the terms of which were provided for in a transaction initially meeting the requirements of an exemption under Rule 16b-3 promulgated under the Exchange Act. Unless the Award Agreement provides otherwise, the withholding of shares to satisfy federal, state and local withholding tax requirements shall be a subsequent transaction approved by the original grant of all Awards. Notwithstanding the foregoing, in no event shall payment of withholding taxes be made by a retention of Shares by the Company, or any Subsidiary thereof, unless the Company, or any Subsidiary thereof, retains only Shares with a Fair Market Value equal to or less than the minimum amount of taxes required to be withheld.

3.3No Continued Engagement; Right of Discharge Reserved. Neither the adoption of the Plan nor the grant of any Award (or any provision in the Plan or Award Agreement) will confer upon any Participant any right to continued engagement with the Company, nor will it interfere in any way with the right of the Company to terminate, or alter the terms and conditions of, such engagement at any time.

3.4Nature of Payments. Any and all grants of Awards and deliveries of Common Stock, cash, securities or other property under the Plan will be in consideration of services performed, or to be performed, for the Company by the Participant.

3.5Plan Headings. The headings in the Plan are for the purpose of convenience only and are not intended to define or limit the construction of the provisions hereof.

3.6Termination of Plan. The Board reserves the right to terminate the Plan at any time; provided, however, that in any case, the Plan will terminate on the day before the tenth (10^th) anniversary of the Effective Date, and provided further, that all Awards made under the Plan before its termination will remain in effect until such Awards have been satisfied or terminated in accordance with the terms and provisions of the Plan and the applicable Award Agreements.

3.7Clawback/Recapture Policy. Awards under the Plan will be subject to any clawback or recapture policy that the Company may adopt from time to time to the extent provided in such policy and, in accordance with such policy, may be subject to the requirement that the Awards be repaid to the Company after they have been distributed to the Participant.

3.8Code §409A. An Award granted under this Plan shall be interpreted and administered in a manner so that any payment payable thereunder shall be paid or provided in a manner that is exempt from Code §409A if at all possible. However, to the extent that an Award granted under this Plan constitutes deferred compensation subject to Code §409A, the Award Agreement shall be interpreted to be compliant with the requirements of Code §409A and applicable guidance and Treasury Regulations issued thereunder. The term “payment” as used in this §3.8 shall refer to any lapse of a substantial risk of forfeiture with respect to a

transfer of property which was subject to such substantial risk of forfeiture, or any other transfer of cash or other consideration pursuant to the disposition of an Award granted hereunder subject to federal income taxation.

3.9Governing Law. THE PLAN AND ALL AWARDS MADE AND ACTIONS TAKEN THEREUNDER WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF MARYLAND, WITHOUT REFERENCE TO PRINCIPLES OF CONFLICT OF LAWS. IF THE STATE OF MARYLAND’S CONFLICT OF LAW RULES WOULD APPLY ANOTHER STATE’S LAWS, THE LAWS OF THE STATE OF MARYLAND SHALL STILL GOVERN.

3.10No Third-Party Beneficiaries. Except as expressly provided in an Award Agreement, neither the Plan nor any Award Agreement will confer on any person other than the Company and the Participant of any Award any rights or remedies thereunder.

3.11Successors and Assigns of the Company. The terms of the Plan will be binding upon and inure to the benefit of the Company and any successor entity.

4. CHANGE OF CONTROL OF COMPANY

4.1General Rule for Deferred Stock Units. Except as otherwise provided in an Award Agreement, if a Change of Control occurs, and if the agreements effectuating the Change of Control do not provide for the assumption or substitution of all Deferred Stock Units granted under this Plan, with respect to any Deferred Stock Unit granted under this Plan that is not so assumed or substituted (a “Non-Assumed DSU”), the Board, in its complete and absolute discretion, may, with respect to any or all of such Non-Assumed DSUs (including the possibility of different treatment with respect to different Participants), take any or all of the following actions to be effective as of the date of the Change of Control (or as of any other date fixed by the Board occurring within the twenty-five (25) day period ending on the date of the Change of Control, but only if such action remains contingent upon the effectuation of the Change of Control) (such date referred to as the “Action Effective Date”) and only if such action does not cause the affected Non-Assumed DSU to fail to comply with Code §409A or to fail to be exempt from Code §409A, notwithstanding any provision of §3.1(b) of this Plan:

(a)    Accelerate (in whole or in part) the vesting of such Non-Assumed DSU on or before a specified Action Effective Date; and/or

(b)    Unilaterally cancel all or any portion of any such Non-Assumed DSU which has not vested as of a specified Action Effective Date (regardless of whether such Non-Assumed DSU has any intrinsic value); and/or

(c)    Unilaterally cancel all or any portion of such Non-Assumed DSU as of a specified Action Effective Date and notify the holder of such Non-Assumed DSU of such action, but only if the Fair Market Value of the Shares that were subject to all or the portion of such Non-Assumed DSU being cancelled determined as of the Action Effective Date (taking into account vesting) is zero.

However, notwithstanding the foregoing, to the extent that the Participant holding a Non-Assumed DSU is an Insider, payment of cash in lieu of whole or fractional Shares or shares of a successor may only be made to the extent that such payment (1) has met the requirements of an exemption under Rule 16b-3 promulgated under the Exchange Act, or (2) is a subsequent transaction the terms of which were provided for in a transaction initially meeting the requirements of an exemption under Rule 16b-3 promulgated under the Exchange Act. Unless an Award Agreement provides otherwise, the payment of cash in lieu of whole or fractional Shares or in lieu of whole or fractional shares of a successor shall be considered a subsequent transaction approved by the original grant of a Deferred Stock Unit.

4.2General Rule for Other Awards. If a Change of Control occurs, then, except to the extent otherwise provided in the Award Agreement pertaining to a particular Award or as otherwise provided in this Plan, each Award shall be governed by applicable law and the documents effectuating the Change of Control.

EX-31.1

Exhibit 31.1

CERTIFICATIONS OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Avraham Shemesh, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Cole Credit Property Trust V, 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 13, 2018	/s/ Avraham Shemesh
		Name:	Avraham Shemesh
		Title:	Chief Executive Officer and President (Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATIONS OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Nathan D. DeBacker, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Cole Credit Property Trust V, 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 13, 2018	/s/ Nathan D. DeBacker
		Name:	Nathan D. DeBacker
		Title:	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 Cole Credit Property Trust V, 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, 2018 (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.

		/s/ Avraham Shemesh
		Name:	Avraham Shemesh
		Title:	Chief Executive Officer and President (Principal Executive Officer)
		/s/ Nathan D. DeBacker
		Name:	Nathan D. DeBacker
Date:	November 13, 2018	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, 2018 pursuant to 18 U.S.C. § 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 incorporation language in such filing, except to the extent the Company specifically incorporates this certification 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.

XML

Document and Entity Information - shares shares in Millions	9 Months Ended
	Sep. 30, 2018	Nov. 07, 2018
Document Information [Line Items]
Entity Registrant Name	Cole Credit Property Trust V, Inc.
Entity Central Index Key	0001580988
Document Type	10-Q
Document Period End Date	Sep. 30, 2018
Amendment Flag	false
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q3
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Emerging Growth Company	false
Entity Small Business	false
Class A Common Stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding (shares)		14.9
Class T Common Stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding (shares)		1.9

XML

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Real estate assets:
Land	$ 151,868	$ 142,986
Buildings and improvements	448,503	416,850
Intangible lease assets	83,537	79,268
Total real estate assets, at cost	683,908	639,104
Less: accumulated depreciation and amortization	(60,449)	(46,196)
Total real estate assets, net	623,459	592,908
Cash and cash equivalents	1,032	1,173
Restricted cash	387	346
Derivative assets, prepaid expenses and other assets	2,160	1,546
Rents and tenant receivables, net	8,263	7,021
Deferred costs, net	994	183
Total assets	636,295	603,177
LIABILITIES AND STOCKHOLDERS’ EQUITY
Credit facility and notes payable, net	332,854	308,559
Accounts payable and accrued expenses	3,861	2,969
Due to affiliates	2,147	1,787
Intangible lease liabilities, net	3,569	4,019
Distributions payable	2,120	2,049
Deferred rental income and other liabilities	1,033	1,133
Total liabilities	345,584	320,516
Commitments and contingencies
Redeemable common stock	10,493	10,243
STOCKHOLDERS’ EQUITY
Preferred stock, $0.01 par value per share; 10,000,000 shares authorized, none issued and outstanding	0	0
Capital in excess of par value	365,004	341,472
Accumulated distributions in excess of earnings	(86,553)	(70,022)
Accumulated other comprehensive income	1,600	813
Total stockholders’ equity	280,218	272,418
Total liabilities, redeemable common stock and stockholders’ equity	636,295	603,177
Class A Common Stock
STOCKHOLDERS’ EQUITY
Common stock	148	142
Class T Common Stock
STOCKHOLDERS’ EQUITY
Common stock	$ 19	$ 13

XML

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Sep. 30, 2018	Dec. 31, 2017
Preferred stock, par value (USD per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (shares)	10,000,000	10,000,000
Preferred stock, shares issued (shares)	0	0
Preferred stock, shares outstanding (shares)	0	0
Class A Common Stock
Common stock, par value (USD per share)	$ 0.01	$ 0.01
Common stock, shares authorized (shares)	245,000,000	245,000,000
Common stock, shares issued (shares)	14,824,364	14,241,888
Common stock, shares outstanding (shares)	14,824,364	14,241,888
Class T Common Stock
Common stock, par value (USD per share)	$ 0.01	$ 0.01
Common stock, shares authorized (shares)	245,000,000	245,000,000
Common stock, shares issued (shares)	1,853,106	1,347,920
Common stock, shares outstanding (shares)	1,853,106	1,347,920

XML

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Revenues:
Rental income	$ 12,133	$ 10,303	$ 35,449	$ 29,022
Tenant reimbursement income	1,832	1,446	5,164	3,558
Total revenues	13,965	11,749	40,613	32,580
Operating expenses:
General and administrative	1,176	1,135	3,412	3,362
Property operating	938	491	2,230	1,560
Real estate tax	1,157	1,012	3,492	2,617
Advisory fees and expenses	1,584	1,389	4,603	3,965
Acquisition-related	52	35	187	527
Depreciation and amortization	4,664	4,009	13,944	11,159
Total operating expenses	9,571	8,071	27,868	23,190
Operating income	4,394	3,678	12,745	9,390
Other income (expense):
Interest expense and other, net	(3,502)	(2,960)	(10,440)	(8,324)
Net income (loss)	892	718	2,305	1,066
Class A Common Stock
Other income (expense):
Net income (loss)	$ 882	$ 724	$ 2,321	$ 1,136
Basic and diluted weighted average number of common shares outstanding (shares)	14,760,585	13,989,986	14,561,171	13,284,274
Basic and diluted net income (loss) per common share (USD per shares)	$ 0.06	$ 0.05	$ 0.16	$ 0.09
Distributions declared per common share (USD per share)	$ 0.4	$ 0.4	$ 1.18	$ 1.18
Class T Common Stock
Other income (expense):
Net income (loss)	$ 10	$ (6)	$ (16)	$ (70)
Basic and diluted weighted average number of common shares outstanding (shares)	1,794,938	981,505	1,638,680	703,375
Basic and diluted net income (loss) per common share (USD per shares)	$ 0.01	$ (0.01)	$ (0.01)	$ (0.10)
Distributions declared per common share (USD per share)	$ 0.4	$ 0.4	$ 1.18	$ 1.18

XML

Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Statement of Comprehensive Income [Abstract]
Net income	$ 892	$ 718	$ 2,305	$ 1,066
Other comprehensive income
Unrealized gain on interest rate swaps	476	52	845	81
Amount of (gain) loss reclassified from other comprehensive income into income as interest expense and other, net	(17)	110	(90)	567
Total other comprehensive income	459	162	755	648
Total comprehensive income	$ 1,351	$ 880	$ 3,060	$ 1,714

XML

Condensed Consolidated Statement of Stockholders' Equity (Unaudited) - 9 months ended Sep. 30, 2018 - USD ($) $ in Thousands	Total	Class A Common Stock	Class T Common Stock	Common Stock Class A Common Stock	Common Stock Class T Common Stock	Capital in Excess of Par Value	Accumulated Distributions in Excess of Earnings	Accumulated Other Comprehensive Income
Balance (shares) at Dec. 31, 2017		14,241,888	1,347,920	14,241,888	1,347,920
Balance at Dec. 31, 2017	$ 272,418			$ 142	$ 13	$ 341,472	$ (70,022)	$ 813
Cumulative effect of accounting changes at Dec. 31, 2017							(32)	32
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock (shares)				960,340	506,344
Issuance of common stock	35,234			$ 10	$ 6	35,218
Distributions declared	(18,804)						(18,804)
Commissions on stock sales and related dealer manager fees	(1,748)					(1,748)
Other offering costs	(708)					(708)
Distribution and stockholder servicing fees	(448)					(448)
Redemptions of common stock (shares)				(377,864)	(1,158)
Redemptions of common stock	(8,536)			$ (4)	$ 0	(8,532)
Changes in redeemable common stock	(250)					(250)
Comprehensive income	3,060						2,305	755
Balance (shares) at Sep. 30, 2018		14,824,364	1,853,106	14,824,364	1,853,106
Balance at Sep. 30, 2018	$ 280,218			$ 148	$ 19	$ 365,004	$ (86,553)	$ 1,600

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Cash flows from operating activities:
Net income	$ 2,305	$ 1,066
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization, net	14,122	11,364
Bad debt expense	14	9
Straight-line rental income	(1,207)	(1,150)
Amortization of deferred financing costs	669	818
Write-off of deferred financing costs	148	0
Gain on extinguishment of debt	0	(108)
Changes in assets and liabilities:
Rents and tenant receivables	(49)	(239)
Prepaid expenses and other assets	(98)	(524)
Accounts payable and accrued expenses	947	2,019
Deferred rental income and other liabilities	(100)	(338)
Due to affiliates	182	(492)
Due from affiliates	14	0
Net cash provided by operating activities	16,947	12,425
Cash flows from investing activities:
Investment in real estate assets and capital expenditures	(45,178)	(103,477)
Payment of property escrow deposits	(325)	(3,025)
Refund of property escrow deposits	550	3,259
Net cash used in investing activities	(44,953)	(103,243)
Cash flows from financing activities:
Proceeds from issuance of common stock	26,448	64,559
Redemptions of common stock	(8,536)	(3,733)
Offering costs on issuance of common stock	(2,456)	(6,193)
Distribution and stockholder servicing fees paid	(270)	(123)
Proceeds from credit facility and notes payable	270,000	102,200
Repayments of credit facility and notes payable	(244,500)	(73,950)
Distributions to investors	(9,947)	(8,341)
Deferred financing costs paid	(2,833)	(412)
Net cash provided by financing activities	27,906	74,007
Net decrease in cash and cash equivalents and restricted cash	(100)	(16,811)
Cash and cash equivalents and restricted cash, beginning of period	1,519	19,255
Cash and cash equivalents and restricted cash, end of period	1,419	2,444
Cash and cash equivalents	1,032	2,097
Restricted cash	387	347
Supplemental disclosures of non-cash investing and financing activities:
Distributions declared and unpaid	2,120	1,947
Change in accrued distribution and stockholder servicing fees	449	779
Accrued capital expenditures	15	177
Common stock issued through distribution reinvestment plan	8,786	7,881
Change in fair value of interest rate swaps	755	648
Supplemental cash flow disclosures:
Interest paid	$ 9,673	$ 7,533

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Organization and Business

9 Months Ended

Sep. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

ORGANIZATION AND BUSINESS

ORGANIZATION AND BUSINESS

Cole Credit Property Trust V, Inc. (the “Company”) is a Maryland corporation, incorporated on December 12, 2012, that elected to be taxed, and currently qualifies, as a real estate investment trust (“REIT”) for U.S. federal income tax purposes beginning with its taxable year ended December 31, 2014. The Company is the sole general partner of and owns, directly or indirectly, 100% of the partnership interests in Cole Operating Partnership V, LP, a Delaware limited partnership. 

On November 13, 2017, VEREIT Operating Partnership, L.P. (“VEREIT OP”), a former affiliated entity of the Company’s sponsor, CCO Group (as defined below), entered into a Purchase and Sale Agreement with CCA Acquisition, LLC (“CCA”), a newly-formed affiliate of CIM Group, LLC (“CIM”), pursuant to which CCA agreed to acquire all of the issued and outstanding shares of common stock of Cole Capital Advisors, Inc., the direct or indirect owner of Cole REIT Advisors V, LLC (“CR V Advisors”), Cole Capital Corporation and CREI Advisors, LLC (“CREI Advisors”), the Company’s external advisor, dealer manager and property manager, respectively (the “Transaction”).

On February 1, 2018, the Transaction was completed. Immediately following the completion of the Transaction, Cole Capital Advisors, Inc. and the Company’s dealer manager were each converted into Delaware limited liability companies, Cole Capital Advisors, Inc.’s name was changed to CCO Group, LLC, and the dealer manager’s name was changed to CCO Capital, LLC (“CCO Capital”). As a result of the Transaction, CIM owns and/or controls CCO Group, LLC and its subsidiaries (collectively, “CCO Group”), and CCO Group, LLC owns and controls CR V Advisors, CCO Capital and CREI Advisors, the Company’s external advisor, dealer manager for the Offerings (as defined below) and property manager, respectively.

In addition, as part of the Transaction, VEREIT OP and CCO Group, LLC entered into a services agreement (the “Services Agreement”) pursuant to which VEREIT OP is obligated to provide certain services to CCO Group and to the Company, Cole Credit Property Trust IV, Inc. (“CCPT IV”), Cole Office & Industrial REIT (CCIT II), Inc. (“CCIT II”), Cole Office & Industrial (CCIT III), Inc. (“CCIT III”) and Cole Real Estate Income Strategy (Daily NAV), Inc. (“Cole Income NAV Strategy”) (CCPT IV, CCIT II, CCIT III, Cole Income NAV Strategy and the Company, collectively, the “Cole REITs^®”), including operational real estate support. VEREIT OP is obligated to provide such services through March 31, 2019 (or, if later, the date of the last government filing other than a tax filing made by any of the Cole REITs with respect to its 2018 fiscal year) (the “Initial Services Term”) and is obligated to provide consulting and research services through December 31, 2023 as requested by CCO Group, LLC.

Despite the indirect change of ownership and control of the Company’s advisor, dealer manager, property manager and sponsor, the Company expects that, during the Initial Services Term of the Services Agreement, the advisory, dealer manager and property management services it receives will continue without any material changes in personnel (except as supplemented by the management oversight of CIM personnel) or material change in service procedures. CCO Group, LLC is evaluating and intends to effectuate during the Initial Services Term of the Services Agreement an appropriate transition of VEREIT OP’s services under the Services Agreement to other CIM affiliates or third parties with the goal of ensuring continuity and minimizing disruption.

Pursuant to a Registration Statement on Form S-11 (Registration No. 333-189891) under the Securities Act of 1933, as amended (the “Securities Act”), and declared effective by the U.S. Securities and Exchange Commission (the “SEC”) on March 17, 2014, the Company commenced its initial public offering (the “Initial Offering”) on a “best efforts” basis of up to a maximum of $2.975 billion in shares of a single class of common stock. The Initial Offering initially offered up to a maximum of $2.5 billion in shares of a single class of common stock (now referred to as Class A Shares as defined below) in the primary offering, as well as up to $475.0 million in additional shares pursuant to a distribution reinvestment plan (the “Original DRIP”). In March 2016, the Company reclassified a portion of its unissued Class A common stock (“Class A Shares”) as Class T common stock (“Class T Shares”) and commenced sales of Class T Shares thereafter upon receipt of the required regulatory approvals.

Pursuant to a Registration Statement on Form S-11 (Registration No. 333-215274) under the Securities Act and declared effective by the SEC on August 1, 2017, the Company commenced a follow-on offering on a “best efforts” basis (the “Follow-on Offering,” and collectively with the Initial Offering, the “Offerings”) of up to an aggregate of $1.2 billion in Class A Shares and Class T Shares in the primary portion of the Follow-on Offering (up to $660.0 million in Class A Shares and up to $540.0 million in Class T Shares) and an additional $300.0 million in shares of common stock pursuant to the second amended and restated distribution reinvestment plan (the “Second Amended and Restated DRIP” and collectively with the Original DRIP and the first amended and restated distribution and reinvestment plan, the “DRIP”). The Company reserves the right to reallocate the shares offered among the classes of shares and between the primary offering and the Second Amended and Restated DRIP.

On March 29, 2018, the Company announced that its board of directors (the “Board”) established an updated estimated per share net asset value (“NAV”) of its common stock, as of December 31, 2017, of $22.18 per share for both Class A Shares and Class T Shares. As a result, commencing on March 29, 2018, the Company is offering Class A Shares in its primary portion of the Follow-on Offering for $24.37 per share, Class T Shares in its primary portion of the Follow-on Offering for $23.35 per share and Class A Shares and Class T Shares in its Second Amended and Restated DRIP for $22.18 per share. Additionally, as of March 29, 2018, $22.18 per share serves as the estimated per share NAV for purposes of the share redemption program. The Board establishes an updated per share NAV of the Company’s common stock on an annual basis for purposes of assisting broker-dealers that participated in the Offerings in meeting their customer account reporting obligations under National Association of Securities Dealers Conduct Rule 2340, having previously established a per share NAV as of February 29, 2016 and December 31, 2016.

As of September 30, 2018, the Company had issued approximately 17.8 million shares of common stock in the Offerings, including 1.5 million shares issued in DRIP, for gross offering proceeds of $444.8 million ($398.7 million in Class A Shares and $46.1 million in Class T Shares) before organization and offering costs, selling commissions, and dealer manager fees of $41.8 million. In addition, as of September 30, 2018, the Company paid distribution and stockholder servicing fees for Class T Shares sold in the primary portion of the Offerings of $483,000 and accrued an estimated liability for future distribution and stockholder servicing fees payable of $1.3 million.

The Company has used, and intends to continue using, substantially all of the net proceeds from the Offerings to acquire and operate a diversified portfolio of commercial real estate assets primarily consisting of net leased properties located throughout the United States. The properties primarily will be single tenant properties leased to national and regional creditworthy tenants. The Company expects that the properties typically will be subject to long-term triple-net or double-net leases, which means the tenant will be obligated to pay for most of the expenses of maintaining the property. As of September 30, 2018, the Company owned 140 properties, comprising 3.4 million rentable square feet of commercial space located in 33 states. As of September 30, 2018, the rentable space at these properties was 98.9% leased, including month-to-month agreements, if any.

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Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2018

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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. These accounting policies conform to accounting principles generally accepted in the United States of America (“GAAP”), in all material respects, and have been consistently applied in preparing the accompanying condensed consolidated financial statements.

Principles of Consolidation and Basis of Presentation

The condensed consolidated financial statements of the Company have been prepared in accordance with the rules and regulations of the SEC regarding interim financial reporting, including the instructions to Form 10-Q and Article 10 of Regulation S-X, and do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the statements for the interim periods presented include all adjustments, which are of a normal and recurring nature, necessary for a fair presentation of the results for such periods. Results for these interim periods are not necessarily indicative of full year results.

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, 2017, and related notes thereto, set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. The condensed consolidated financial statements should also be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in this Quarterly Report on Form 10-Q.

The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Reclassifications

Certain amounts in the Company’s prior period condensed consolidated financial statements have been reclassified to conform to the current period presentation. In connection with the adoption of Accounting Standards Update (“ASU”) No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, transfers to or from restricted cash, which have previously been shown in the Company’s investing activities section of the condensed consolidated statements of cash flows, are now required to be shown as part of the total change in cash, cash equivalents and restricted cash in the condensed consolidated statements of cash flows. This change resulted in a decrease in cash flows from investing activities of $253,000 during the nine months endedSeptember 30, 2017.

The Company adopted ASU 2017-12, as defined in “Recent Accounting Pronouncements,” during the first quarter of fiscal year 2018. Accordingly, for the nine months endedSeptember 30, 2018, the Company recorded a cumulative-effect adjustment related to eliminating the separate measurement of ineffectiveness to accumulated other comprehensive income with a corresponding adjustment to the opening balance of accumulated distributions in excess of earnings of $32,000.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Real Estate Assets

Real estate assets are stated at cost, less accumulated depreciation and amortization. The Company considers the period of future benefit of each respective asset to determine the appropriate useful life. The estimated useful lives of the Company’s real estate assets by class are generally as follows:

Buildings	40 years
Site improvements	15 years
Tenant improvements	Lesser of useful life or lease term
Intangible lease assets	Lease term

Recoverability of Real Estate Assets

The Company continually monitors events and changes in circumstances that could indicate that the carrying amounts of its real estate assets may not be recoverable. Impairment indicators that the Company considers include, but are not limited to: bankruptcy or other credit concerns of a property’s major tenant, such as a history of late payments, rental concessions and other factors; a significant decrease in a property’s revenues due to lease terminations; vacancies; co-tenancy clauses; reduced lease rates; changes in anticipated holding periods; or other circumstances. When indicators of potential impairment are present, the Company assesses the recoverability of the assets by determining whether the carrying amount of the assets will be recovered through the undiscounted future cash flows expected from the use of the assets and their eventual disposition. In the event that such expected undiscounted future cash flows do not exceed the carrying amount, the Company will adjust the real estate assets to their respective fair values and recognize an impairment loss. Generally, fair value will be determined using a discounted cash flow analysis and recent comparable sales transactions. No impairment indicators were identified and no impairment losses were recorded during the nine months endedSeptember 30, 2018 or 2017. The Company is in the process of determining if anticipated holding periods for certain properties may materially differ from the initial intended holding periods for such properties, which could result in an impairment charge in the future.

Assets Held for Sale

When a real estate asset is identified by the Company as held for sale, the Company will cease recording depreciation and amortization of the assets related to the property and estimate its fair value, net of selling costs. If, in management’s opinion, the fair value, net of selling costs, of the asset is less than the carrying amount of the asset, an adjustment to the carrying amount is then recorded to reflect the estimated fair value of the property, net of selling costs. There were no assets identified as held for sale as of September 30, 2018 or December 31, 2017.

Allocation of Purchase Price of Real Estate Assets

Upon the acquisition of real properties, the Company allocates the purchase price to acquired tangible assets, consisting of land, buildings and improvements, and to identified intangible assets and liabilities, consisting of the value of above- and below-market leases and the value of in-place leases and other intangibles, based in each case on their respective fair values. The Company utilizes independent appraisals to assist in the determination of the fair values of the tangible assets of an acquired property (which includes land and buildings). The information in the appraisal, along with any additional information available to the Company’s management, is used in estimating the amount of the purchase price that is allocated to land. Other information in the appraisal, such as building value and market rents, may be used by the Company’s management in estimating the allocation of purchase price to the building and to intangible lease assets and liabilities. The appraisal firm has no involvement in management’s allocation decisions other than providing this market information.

The determination of the fair values of the real estate assets and liabilities acquired requires the use of significant assumptions with regard to the current market rental rates, rental growth rates, capitalization and discount rates, interest rates and other variables. The use of alternative estimates may result in a different allocation of the Company’s purchase price, which could materially impact the Company’s results of operations.

In April 2017, the Company elected to early adopt ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (“ASU 2017-01”), which clarifies the definition of a business by adding guidance to assist entities in evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. Beginning in April 2017, all real estate acquisitions qualified as asset acquisitions and, as such, acquisition-related fees and certain acquisition-related expenses related to these asset acquisitions were capitalized and allocated to tangible and intangible assets and liabilities, as described above. Prior to the adoption of ASU 2017-01 in April 2017, all of the Company’s real estate acquisitions were accounted for as business combinations, and as such, acquisition-related expenses related to these business combination acquisitions were expensed as incurred. Prior to April 2017, acquisition-related expenses in the Company’s condensed consolidated statements of operations primarily consisted of legal, deed transfer and other costs related to real estate purchase transactions, including costs incurred for deals that were not consummated. The Company expects its future acquisitions to qualify as asset acquisitions and, as such, the Company will allocate the purchase price to acquired tangible assets and identified intangible assets and liabilities on a relative fair value basis.

Restricted Cash

The Company had $387,000 and $346,000 in restricted cash as of September 30, 2018 and December 31, 2017, respectively. Included in restricted cash was $94,000 held by lenders in lockbox accounts as of December 31, 2017. No such amounts were included in restricted cash as of September 30, 2018. As part of certain debt agreements, rent from certain of the Company’s tenants is deposited directly into a lockbox account, from which the monthly debt service payments are disbursed to the lender and the excess funds are disbursed to the Company. Restricted cash also included $293,000 and $2,000 held by lenders in escrow accounts in accordance with the associated lender’s loan agreement as of September 30, 2018 and December 31, 2017, respectively, as well as $94,000 and $250,000 in lender cash management accounts as of September 30, 2018 and December 31, 2017, respectively.

Revenue Recognition

Certain properties have leases where the minimum rental payment increases during the term of the lease. The Company records rental income for the full term of each lease on a straight-line basis when earned and collectability is reasonably assured. When the Company acquires a property, the terms of existing leases are considered to commence as of the acquisition date for the purpose of this calculation. The Company defers the recognition of contingent rental income, such as percentage rents, until the specific target that triggers the contingent rental income is achieved. Expected reimbursements from tenants for recoverable real estate taxes and operating expenses are included in tenant reimbursement income in the period when such costs are incurred. Effective January 1, 2018, the Company adopted ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”), which supersedes the revenue recognition requirements in Revenue Recognition, Accounting Standards Codification (“ASC”) Topic 605 and requires an entity to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company records revenue for real estate taxes and insurance reimbursed by its tenants on the leased properties, with offsetting expenses in real estate taxes and property operating expenses, respectively, within the condensed consolidated statements of operations as the Company has concluded it is the primary obligor. The Company has identified its revenue streams as rental income from leasing arrangements and tenant reimbursement income, which are outside of the scope of Topic 606. The Company adopted ASU 2014-09 using the modified retrospective approach and determined it did not have a material impact on the Company’s condensed consolidated financial statements.

The Company continually reviews receivables related to rent, including any straight-line rent, and current and future operating expense reimbursements from tenants, and determines their collectability by taking into consideration the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area in which the property is located. In the event that the collectability of a receivable is uncertain, the Company will record an increase in the allowance for uncollectible accounts. As of September 30, 2018 and December 31, 2017, the Company had an allowance for uncollectible accounts of $18,000 and $40,000, respectively.

Earnings (Loss) and Distributions Per Share

The Company has two classes of common stock. Accordingly, the Company utilizes the two-class method to determine its earnings per share, which can result in different earnings per share for each of the classes. Under the two-class method, earnings per share of each class of common stock are computed by dividing the sum of the distributed earnings to common stockholders and undistributed earnings allocated to common stockholders by the weighted average number of shares for each class of common stock for the respective period. The distributed earnings to Class T Share common stockholders represents distributions declared less the distribution and stockholder servicing fees. Diluted income (loss) per share considers the effect of any potentially dilutive share equivalents, of which the Company had none for each of the three and nine months endedSeptember 30, 2018 and 2017. Distributions per share are calculated based on the authorized daily distribution rate.

Recent Accounting Pronouncements

From time to time, new accounting pronouncements are issued by various standard setting bodies that may have an impact on the Company’s accounting and reporting. Except as otherwise stated below, the Company is currently evaluating the effect that certain new accounting requirements may have on the Company’s accounting and related reporting and disclosures in the Company’s condensed consolidated financial statements.

In February 2016, the Financial Accounting Standards Board (the “FASB”) issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”). The amendments in this update require that most lease obligations be recognized as a right of use asset with a corresponding liability on the balance sheet. The guidance also requires additional qualitative and quantitative disclosures to assess the amount, timing and uncertainty of cash flows arising from leases. ASU 2016-02 and subsequent amendments are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. The guidance, including optional practical expedients, should be implemented for the earliest period presented using a modified retrospective approach. The Company is currently in the process of finalizing its assessment of its inventory of leases that will be impacted by adoption of the new guidance. The Company does not expect the adoption to have a material impact on the accounting treatment of the Company’s net leases, which are the primary source of the Company’s revenues.

In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities (“ASU 2017-12”). The targeted amendments in this ASU are designed to help simplify certain aspects of hedge accounting and result in a more accurate portrayal of the economics of an entity’s risk management activities in its financial statements. ASU 2017-12 applies to the Company’s interest rate swaps designated as cash flow hedges. ASU 2017-12 requires all changes in the fair value of highly effective cash flow hedges to be recorded in accumulated other comprehensive income. Under current GAAP, the ineffective portion of the change in fair value of cash flow hedges is recognized directly in earnings. This eliminates the requirement to separately measure and disclose ineffectiveness for qualifying cash flow hedges. ASU 2017-12 is effective for public entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. ASU 2017-12 is required to be adopted using a modified retrospective approach with early adoption permitted. The Company early adopted ASU 2017-12 during the first quarter of fiscal year 2018. Accordingly, during the nine months endedSeptember 30, 2018, the Company recorded a cumulative-effect adjustment related to eliminating the separate measurement of ineffectiveness to accumulated other comprehensive income with a corresponding adjustment to the opening balance of accumulated distributions in excess of earnings of $32,000.

In August 2018, the FASB issued ASU No. 2018-13, Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”). This ASU amends and removes several disclosure requirements including the valuation processes for Level 3 fair value measurements. ASU 2018-13 also modifies some disclosure requirements and requires additional disclosures for changes in unrealized gains and losses included in other comprehensive income for recurring Level 3 fair value measurements and requires the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. The provisions of ASU 2018-13 are effective January 1, 2020 using a prospective transition method for amendments effecting changes in unrealized gains and losses, significant unobservable inputs used to develop Level 3 fair value measurements and narrative description on uncertainty of measurements. The remaining provisions of the ASU are to be applied retrospectively, and early adoption is permitted. The Company is evaluating the impact of this ASU's adoption, and does not believe this ASU will have a material impact on its condensed consolidated financial statements.

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Fair Value Measurements

9 Months Ended

Sep. 30, 2018

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

GAAP defines fair value, establishes a framework for measuring fair value and requires disclosures about fair value measurements. GAAP emphasizes that fair value is intended to be a market-based measurement, as opposed to a transaction-specific measurement.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. Depending on the nature of the asset or liability, various techniques and assumptions can be used to estimate the fair value. Assets and liabilities are measured using inputs from three levels of the fair value hierarchy, as follows:

Level 1 — Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. An active market is defined as a market in which transactions for the assets or liabilities occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2 — Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active (markets with few transactions), inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data correlation or other means (market corroborated inputs).

Level 3 — Unobservable inputs, which are only used to the extent that observable inputs are not available, reflect the Company’s assumptions about the pricing of an asset or liability.

The following describes the methods the Company uses to estimate the fair value of the Company’s financial assets and liabilities:

Credit facility and notes payable — The fair value is estimated by discounting the expected cash flows based on estimated borrowing rates available to the Company as of the measurement date. Current and prior period liabilities’ carrying and fair values exclude net deferred financing costs. These financial instruments are valued using Level 2 inputs. As of September 30, 2018, the estimated fair value of the Company’s debt was $334.7 million, compared to a carrying value of $335.1 million. The estimated fair value of the Company’s debt was $311.4 million as of December 31, 2017, compared to a carrying value of $309.6 million.

Derivative instruments — The Company’s derivative instruments are comprised of interest rate swaps. All derivative instruments are carried at fair value and are valued using Level 2 inputs. The fair value of these instruments is determined using interest rate market pricing models. In addition, credit valuation adjustments are incorporated into the fair values to account for the Company’s potential nonperformance risk and the performance risk of the respective counterparties.

Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with those derivatives utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by the Company and its counterparties. However, as of September 30, 2018 and December 31, 2017, the Company assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and determined that the credit valuation adjustments are not significant to the overall valuation of the Company’s derivatives. As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy.

Other financial instruments—The Company considers the carrying values of its cash and cash equivalents, restricted cash, tenant receivables, accounts payable and accrued expenses, other liabilities, due to affiliates and distributions payable to approximate their fair values because of the short period of time between their origination and their expected realization as well as their highly-liquid nature. Due to the short-term maturities of these instruments, Level 1 inputs are utilized to estimate the fair value of these financial instruments.

Considerable judgment is necessary to develop estimated fair values of financial assets and liabilities. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realize, or be liable for, upon disposition of the financial assets and liabilities. As of September 30, 2018 and December 31, 2017, there have been no transfers of financial assets or liabilities between fair value hierarchy levels.

In accordance with the fair value hierarchy described above, the following tables show 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, 2018 and December 31, 2017 (in thousands):

	Balance as of		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	September 30, 2018		(Level 1)		(Level 2)		(Level 3)
Financial assets:
Interest rate swaps	$	1,600	$	—	$	1,600	$	—
	Balance as of		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	December 31, 2017		(Level 1)		(Level 2)		(Level 3)
Financial assets:
Interest rate swaps	$	845	$	—	$	845	$	—

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Real Estate Assets

9 Months Ended

Sep. 30, 2018

Real Estate [Abstract]

REAL ESTATE ASSETS

REAL ESTATE ASSETS

2018 Property Acquisitions

During the nine months endedSeptember 30, 2018, the Company acquired four commercial properties for an aggregate purchase price of $43.8 million (the “2018 Asset Acquisitions”), which includes $1.3 million of external acquisition-related expenses that were capitalized in accordance with ASU 2017-01. Prior to the adoption of ASU 2017-01 in April 2017, costs related to property acquisitions were expensed as incurred. The Company funded the 2018 Asset Acquisitions with net proceeds from the Follow-on Offering and available borrowings.

The following table summarizes the purchase price allocation for the 2018 Asset Acquisitions purchased during the nine months endedSeptember 30, 2018 (in thousands):

	2018 Asset Acquisitions
Land	$	8,882
Buildings and improvements	30,505
Acquired in-place leases and other intangibles (1)	4,437
Total purchase price	$	43,824

______________________

(1) The weighted average amortization period for acquired in-place leases and other intangibles was 17.4 years for the 2018 Asset Acquisitions.

2017 Property Acquisitions

During the nine months endedSeptember 30, 2017, the Company acquired 15 commercial properties for an aggregate purchase price of $103.4 million (the “2017 Acquisitions”), of which 13 were determined to be asset acquisitions and two were accounted for as business combinations as they were acquired prior to the adoption of ASU 2017-01 in April 2017. The Company funded the 2017 Acquisitions with net proceeds from the Offerings and available borrowings.

The following table summarizes the consideration transferred for the properties purchased during the nine months endedSeptember 30, 2017 (in thousands):

	2017 Acquisitions
Real estate assets:
Purchase price of asset acquisitions	$	88,547
Purchase price of business combinations	14,878
Total purchase price of real estate assets acquired (1)	$	103,425

______________________

(1) The weighted average amortization period for the 2017 Acquisitions was 13.9 years for acquired in-place leases and other intangibles, 16.6 years for acquired above-market leases and 12.9 years for acquired intangible lease liabilities.

During the nine months endedSeptember 30, 2017, the Company acquired 13 commercial properties for an aggregate purchase price of $88.5 million, which were accounted for as asset acquisitions (the “2017 Asset Acquisitions”). The aggregate purchase price includes $2.6 million of external acquisition-related expenses that were capitalized in accordance with ASU 2017-01. Prior to the adoption of ASU 2017-01, costs related to property acquisitions were expensed as incurred. The following table summarizes the purchase price allocation for the 2017 Asset Acquisitions purchased during the nine months endedSeptember 30, 2017 (in thousands):

	2017 Asset Acquisitions
Land	$	21,037
Buildings and improvements	47,958
Acquired in-place leases and other intangibles	18,758
Acquired above-market leases	1,665
Intangible lease liabilities	(871		)
Total purchase price	$	88,547

During the nine months endedSeptember 30, 2017, the Company acquired two commercial properties for an aggregate purchase price of $14.9 million, which were accounted for as business combinations (the “2017 Business Combination Acquisitions”). The Company allocated the purchase price of these properties to the fair value of the assets acquired. The following table summarizes the purchase price allocation for the 2017 Business Combination Acquisitions purchased during the nine months endedSeptember 30, 2017 (in thousands):

	2017 Business Combination Acquisitions
Land	$	2,099
Buildings and improvements	11,342
Acquired in-place leases and other intangibles	1,437
Total purchase price	$	14,878

The Company recorded revenue of $285,000 and $652,000, respectively, and net income of $170,000 and a net loss of $25,000, respectively, for the three and nine months endedSeptember 30, 2017, related to the 2017 Business Combination Acquisitions. In addition, the Company recorded $407,000 of acquisition-related expenses for the nine months endedSeptember 30, 2017, which is included in acquisition-related expenses on the condensed consolidated statements of operations.

The following table summarizes selected financial information of the Company as if all of the 2017 Business Combination Acquisitions were completed on January 1, 2016 for each period presented below. The table below presents the Company’s estimated revenue and net income (loss), on a pro forma basis, for the three and nine months endedSeptember 30, 2017 and 2016 (in thousands):

	Three Months Ended September 30,					Nine Months Ended September 30,
	2017		2016			2017		2016
Pro forma basis (unaudited):
Revenue	$	11,749	$	10,325		$	32,779	$	31,103
Net income (loss)	$	718	$	(102	)	$	1,567	$	(1,559	)

The unaudited pro forma information for the nine months endedSeptember 30, 2017 was adjusted to exclude $407,000 of acquisition-related fees and expenses recorded during the period related to the 2017 Business Combination Acquisitions. Accordingly, these costs were instead recognized in the pro forma information for the nine months endedSeptember 30, 2016.

The unaudited 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 the period, nor does it purport to represent the results of future operations.

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Intangible Lease Assets

9 Months Ended

Sep. 30, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

INTANGIBLE LEASE ASSETS

INTANGIBLE LEASE ASSETS

Intangible lease assets as of September 30, 2018 and December 31, 2017 consisted of the following (in thousands, except weighted average life):

	September 30, 2018		December 31, 2017
In-place leases and other intangibles, net of accumulated amortization of $18,259 and $13,899, respectively (with a weighted average life remaining of 11.0 years and 11.3 years, respectively)	$	56,442	$	56,443
Acquired above-market leases, net of accumulated amortization of $3,056 and $2,519, respectively (with a weighted average life remaining of 11.2 years and 11.8 years, respectively)	5,780		6,407
	$	62,222	$	62,850

Amortization of the above-market leases is recorded as a reduction to rental revenue, and amortization expense for the in-place leases and other intangibles is included in depreciation and amortization in the accompanying condensed consolidated statements of operations.

The following table summarizes the amortization expense related to the intangible lease assets for the three and nine months endedSeptember 30, 2018 and 2017 (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
In-place lease and other intangible amortization	$	1,469	$	1,328	$	4,587	$	3,558
Above-market lease amortization	$	166	$	211	$	628	$	617

As of September 30, 2018, the estimated amortization expense relating to the intangible lease assets is as follows (in thousands):

	Amortization Expense
	In-Place Leases and Other Intangibles		Above-Market Leases
Remainder of 2018	$	1,482	$	183
2019	$	5,699	$	591
2020	$	5,492	$	538
2021	$	5,430	$	523
2022	$	5,233	$	511

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Derivative Instruments and Hedging Activities

9 Months Ended

Sep. 30, 2018

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

In the normal course of business, the Company uses certain types of derivative instruments for the purpose of managing or hedging its interest rate risk. During the nine months endedSeptember 30, 2018, the Company entered into one interest rate swap agreement. As of September 30, 2018, the Company had three interest rate swap agreements. The following table summarizes the terms of the Company’s executed interest rate swap agreements designated as hedging instruments as of September 30, 2018 and December 31, 2017 (dollar amounts in thousands):

	Balance Sheet Location	Outstanding Notional Amount as of		Interest Rate (1)	Effective Date	Maturity Date	Fair Value of Assets as of
		September 30, 2018					September 30, 2018		December 31, 2017
Interest Rate Swaps	Derivative assets, prepaid expenses and other assets	$	241,100	3.22% to 4.45%	12/31/2015 to 5/23/2018	4/25/2019 to 3/28/2022	$	1,600	$	845

______________________

(1) The interest rates consist of the underlying index swapped to a fixed rate and the applicable interest rate spread as of September 30, 2018.

Additional disclosures related to the fair value of the Company’s derivative instruments are included in Note 3 — Fair Value Measurements. The notional amount under the interest rate swap agreements is an indication of the extent of the Company’s involvement in each instrument, but does not represent exposure to credit, interest rate or market risks.

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 in order to hedge the variability of the anticipated cash flows on its variable rate debt. The change in fair value of the derivative instruments that are designated as hedges is recorded in other comprehensive income, with a portion of the amount subsequently reclassified to interest expense as interest payments are made on the Company’s variable rate debt. For the three and nine months endedSeptember 30, 2018, the amounts reclassified were a gain of $17,000 and $90,000, respectively. For the three and nine months endedSeptember 30, 2017, the amounts reclassified were a loss of $110,000 and $567,000, respectively. During the next 12 months, the Company estimates that an additional $681,000 will be reclassified from other comprehensive income as a decrease to interest expense. The Company classifies cash flows from interest rate swap agreements as net cash provided by operating activities on the condensed consolidated statements of cash flows, as the Company’s accounting policy is to present cash flows from hedging instruments in the same category in the condensed consolidated statements of cash flows as the category for cash flows from hedged items.

The Company has agreements with each of its derivative counterparties that contain provisions whereby, if the Company defaults on certain of its unsecured indebtedness, the Company could also be declared in default on its derivative obligations, resulting in an acceleration of payment. If the Company had breached any of these provisions, it could have been required to settle its obligations under the agreements at an aggregate termination value, inclusive of interest payments and accrued interest. As of September 30, 2018, all derivatives were in an asset position. Therefore, there was no termination value as of September 30, 2018. 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 creditworthy counterparties. The Company records credit risk valuation adjustments on its interest rate swaps based on the credit quality of the Company and the respective counterparty. There were no termination events or events of default related to the interest rate swaps as of September 30, 2018.

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Notes Payable and Credit Facility

9 Months Ended

Sep. 30, 2018

Debt Disclosure [Abstract]

NOTES PAYABLE AND CREDIT FACILITY

NOTES PAYABLE AND CREDIT FACILITY

As of September 30, 2018, the Company had $332.9 million of debt outstanding, including net deferred financing costs, with weighted average years to maturity of 4.2 years and a weighted average interest rate of 3.8%. The weighted average years to maturity is computed using the scheduled repayment date as specified in each loan agreement where applicable. The weighted average interest rate is computed using the interest rate in effect until the scheduled repayment date. Should a loan not be repaid by its scheduled repayment date, the applicable interest rate will increase as specified in the respective loan agreement until the extended maturity date.

The following table summarizes the debt balances as of September 30, 2018 and December 31, 2017, and the debt activity for the nine months endedSeptember 30, 2018 (in thousands):

				During the Nine Months Ended September 30, 2018
	Balance as of December 31, 2017			Debt Issuance, Net (1)			Repayments and Modifications			Accretion		Balance as of September 30, 2018
Credit facility	$	217,000		$	270,000		$	(244,500	)	$	—	$	242,500
Fixed rate debt	92,600			—			—			—		92,600
Total debt	309,600			270,000			(244,500		)	—		335,100
Deferred costs (2)	(1,041		)	(1,730		)	125			400		(2,246		)
Total debt, net	$	308,559		$	268,270		$	(244,375	)	$	400	$	332,854

______________________

(1) Includes deferred financing costs incurred during the period.

(2) Deferred costs relate to mortgage notes payable and the term portion of the Credit Facility, as defined below.

As of September 30, 2018, the fixed rate debt outstanding of $92.6 million included $21.1 million of variable rate debt that is fixed through interest rate swap agreements, which has the effect of fixing the variable interest rate per annum through the maturity date of the variable rate debt. The fixed rate debt has interest rates ranging from 3.5% to 4.5% per annum. The fixed rate debt outstanding matures on various dates from February 2021 to December 2024. The aggregate balance of gross real estate assets, net of gross intangible lease liabilities, securing the fixed rate debt outstanding was $156.5 million as of September 30, 2018. Each of the mortgage notes payable comprising the fixed rate debt is secured by the respective properties on which the debt was placed.

During the nine months endedSeptember 30, 2018, the Company entered into a new credit agreement (the “Credit Agreement”) with JPMorgan Chase Bank, N.A. (“JPMorgan Chase”), as administrative agent, and the other lenders party thereto, and repaid the then-existing credit agreement dated April 25, 2014. The Credit Agreement allows for borrowings of up to $350.0 million (the “Credit Facility”). The Credit Facility includes $220.0 million in term loans (the “Term Loans”) and up to $130.0 million in revolving loans (the “Revolving Loans”). The Term Loans mature on March 27, 2023 and the Revolving Loans mature on March 28, 2022; however the Company may elect to extend the maturity date of the Revolving Loans to March 28, 2023 subject to satisfying certain conditions described in the Credit Agreement.

Depending upon the type of loan specified and overall leverage ratio, the Credit Facility bears interest at (i) the one-month, two-month, three-month or six-month London Interbank Offered Rate (“LIBOR”) multiplied by the statutory reserve rate (the “Adjusted LIBO Rate”) for the interest period plus an applicable rate ranging from 1.30% to 1.70%; or (ii) a base rate ranging from 0.30% to 0.70%, plus the greater of: (a) JPMorgan Chase’s Prime Rate (as defined in the Credit Agreement); (b) the NYFRB Rate (as defined in the Credit Agreement) plus 0.50%; or (c) the Adjusted LIBO Rate for a period of one month plus 1.0%. As of September 30, 2018, the amounts outstanding under the Revolving Loans totaled $22.5 million at a weighted average interest rate of 3.9%. As of September 30, 2018, the amounts outstanding under the Term Loans totaled $220.0 million, all of which was subject to interest rate swap agreements (the “Swapped Term Loan”). The interest rate swap agreements had the effect of fixing the Adjusted LIBO Rate per annum of the Swapped Term Loan. As of September 30, 2018, the all-in rate for the Swapped Term Loan was 3.8%. The Company had $242.5 million of debt outstanding under the Credit Facility as of September 30, 2018 at a weighted average interest rate of 3.8% and $107.5 million in unused capacity, subject to borrowing availability.

The Credit Agreement contains provisions with respect to covenants, events of default and remedies customary for facilities of this nature. In particular, the Credit Agreement requires the Company to maintain a minimum consolidated net worth not less than $225.0 million plus 75% of the equity interests issued by the Company, a net leverage ratio less than or equal to 60%, a fixed charge coverage ratio equal to or greater than 1.50, an unsecured debt to unencumbered asset value ratio equal to or less than 60%, an unsecured debt service coverage ratio greater than 1.75, a secured debt ratio equal to or less than 40% and recourse debt not greater than 15% of total asset value. The Company believes it was in compliance with the financial covenants of the Credit Agreement, as well as the financial covenants under the Company’s various fixed and variable rate debt agreements as of September 30, 2018.

Maturities

The following table summarizes the scheduled aggregate principal repayments for the Company’s outstanding debt subsequent to September 30, 2018 (in thousands):

	Principal Repayments
Remainder of 2018	$	—
2019	—
2020	388
2021	68,009
2022	22,928
Thereafter	243,775
Total	$	335,100

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Intangible Lease Liabilities

9 Months Ended

Sep. 30, 2018

Other Liabilities Disclosure [Abstract]

Intangible Lease Liabilities

INTANGIBLE LEASE LIABILITIES

Intangible lease liabilities consisted of the following as of September 30, 2018 and December 31, 2017 (in thousands, except weighted average life remaining amounts):

	September 30, 2018		December 31, 2017
Acquired below-market leases, net of accumulated amortization of $2,081 and $1,678, respectively (with a weighted average life remaining of 7.5 years and 7.9 years, respectively)	$	3,569	$	4,019

Amortization of below-market leases is recorded as an increase to rental revenue in the accompanying condensed consolidated statements of operations. The following table summarizes the amortization of the intangible lease liabilities for the three and nine months endedSeptember 30, 2018 and 2017 (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Below-market lease amortization	$	147	$	133	$	450	$	412

As of September 30, 2018, the estimated amortization of the intangible lease liabilities is as follows (in thousands):

	Amortization of Below-Market Leases
Remainder of 2018	$	146
2019	$	555
2020	$	479
2021	$	460
2022	$	380

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2018

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

Litigation

In the ordinary course of business, the Company may become subject to litigation and claims. The Company is not aware of any material pending legal proceedings, other than ordinary routine litigation incidental to the Company’s business, to which the Company is a party or of which the Company’s properties are the subject.

Environmental Matters

In connection with the ownership and operation of real estate, the Company may potentially be liable for costs and damages related to environmental matters. In addition, the Company may own or acquire certain properties that are subject to environmental remediation. Generally, the seller of the property, the tenant of the property and/or another third party is responsible for environmental remediation costs related to a property. Additionally, in connection with the purchase of certain properties, the respective sellers and/or tenants may agree to indemnify the Company against future remediation costs. The Company also carries environmental liability insurance on its properties that provides limited coverage for any remediation liability and/or pollution liability for third-party bodily injury and/or property damage claims for which the Company may be liable. The Company is not aware of any environmental matters which it believes are reasonably likely to have a material effect on its results of operations, financial condition or liquidity.

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Related-Party Transactions and Arrangements

9 Months Ended

Sep. 30, 2018

Related Party Transactions [Abstract]

RELATED-PARTY TRANSACTIONS AND ARRANGEMENTS

RELATED-PARTY TRANSACTIONS AND ARRANGEMENTS

The Company has incurred commissions, fees and expenses payable to CR V Advisors and certain of its affiliates in connection with the Offerings and the acquisition, management and disposition of its assets.

Selling commissions and dealer manager fees

In connection with the Offerings, CCO Capital, the Company’s dealer manager, which is affiliated with CR V Advisors, receives selling commissions of up to 7.0% and 3.0% of gross offering proceeds from the primary portion of the Offerings for Class A Shares and Class T Shares, respectively, and before reallowance of selling commissions earned by participating broker-dealers. The Company has been advised that CCO Capital intends to reallow 100% of selling commissions earned to participating broker-dealers. In addition, CCO Capital receives 2.0% of gross offering proceeds from the primary portion of the Offerings for both Class A Shares and Class T Shares as a dealer manager fee. CCO Capital, in its sole discretion, may reallow all or a portion of its dealer manager fee to participating broker-dealers. No selling commissions or dealer manager fees are paid to CCO Capital or other participating broker-dealers with respect to shares sold pursuant to the DRIP.

Other organization and offering expenses

All other organization and offering expenses associated with the sale of the Company’s common stock (excluding selling commissions, dealer manager fees and distribution and stockholder servicing fees) are paid by CR V Advisors or its affiliates and are reimbursed by the Company up to 2.0% of aggregate gross offering proceeds. A portion of the other organization and offering expenses may be considered to be underwriting compensation. As of September 30, 2018, CR V Advisors had paid organization and offering expenses in excess of 2.0% of aggregate gross offering proceeds in connection with the Offerings. These excess amounts were not included in the condensed consolidated financial statements of the Company because such amounts were not a liability of the Company as they exceeded 2.0% of gross proceeds from the Offerings. As the Company raises additional proceeds from the Offerings, these excess amounts may become payable.

Distribution and stockholder servicing fees

Through October 4, 2016, the Company paid CCO Capital a distribution and stockholder servicing fee for Class T Shares that was calculated on a daily basis in the amount of 1/365th of 0.8% of the estimated per share NAV of the Class T Shares sold in the primary portion of the Initial Offering. Beginning on October 5, 2016, the distribution and stockholder servicing fee is calculated on a daily basis in an amount equal to 1/365th of 1.0% of the estimated per share NAV of the Class T Shares sold in the primary portion of the Offerings. The distribution and stockholder servicing fee is paid monthly in arrears from cash flow from operations or, if the Company’s cash flow from operations is not sufficient to pay the distribution and stockholder servicing fee, from borrowings in anticipation of future cash flow. An estimated liability for future distribution and stockholder servicing fees payable to CCO Capital is recognized at the time each Class T Share is sold and included in due to affiliates in the condensed consolidated balance sheets with a corresponding decrease to capital in excess of par value. The Company will cease paying the distribution and stockholder servicing fee with respect to Class T Shares at the earliest of (i) the end of the month in which the total distribution and stockholder servicing fees paid by a stockholder within his or her individual account would be equal to 4.0% of the stockholder’s total gross investment amount at the time of the purchase of the primary Class T Shares held in such account, or a lower limit agreed upon between the dealer manager and the participating broker-dealer at the time such Class T Shares were sold; (ii) the date on which the aggregate underwriting compensation from all sources equals 10.0% of the gross proceeds from the sale of the Company’s shares, excluding shares sold pursuant to the DRIP; (iii) the fourth anniversary of the last day of the month in which the offering in which such Class T Shares were purchased (excluding the offering of shares pursuant to the DRIP) terminates; (iv) the date such Class T Share is no longer outstanding; and (v) the date the Company effects a liquidity event. CCO Capital may, in its discretion, reallow to participating broker-dealers all or a portion of the distribution and stockholder servicing fee for services that such participating broker-dealers perform. At the time the Company ceases paying the distribution and stockholder servicing fee with respect to an outstanding Class T Share pursuant to the provisions above, such Class T Share will convert into a number of Class A Shares (including any fractional shares) with an equivalent net asset value as such Class T Share. The Company cannot predict when this will occur. No distribution and stockholder servicing fees are paid to CCO Capital or other participating broker-dealers with respect to shares sold pursuant to the DRIP.

Acquisition fees and expenses

The Company pays CR V Advisors or its affiliates acquisition fees of up to 2.0% of: (1) the contract purchase price of each property or asset the Company acquires; (2) the amount paid in respect of the development, construction or improvement of each asset the Company acquires; (3) the purchase price of any loan the Company acquires; and (4) the principal amount of any loan the Company originates. In addition, the Company reimburses CR V Advisors or its affiliates for insourced expenses incurred in the process of acquiring a property or the origination or acquisition of a loan, which are fixed on an annual basis at 0.5% of the contract purchase price of each property and 0.5% of the amount advanced for a loan or other investment, which will be prorated for any partial calendar year; provided, that acquisition expenses are not included in the contract purchase price of the property. Additionally, CR V Advisors or its affiliates are reimbursed for third-party acquisition-related expenses incurred in the process of acquiring properties, so long as the total acquisition fees and expenses relating to the transaction do not exceed 6.0% of the contract purchase price, unless otherwise approved by a majority of the Board, including a majority of the Company’s independent directors, as commercially competitive, fair and reasonable to the Company.

Advisory fees and expenses

Pursuant to the advisory agreement with CR V Advisors, the Company pays CR V Advisors a monthly advisory fee based upon the Company’s monthly average asset value, which, effective January 1, 2018, is based on the estimated market value of such assets used to determine the Company’s estimated per share NAV as of December 31, 2017, as discussed in Note 1 — Organization and Business, and for those assets acquired subsequent to December 31, 2017, is based on the purchase price. The monthly advisory fee is equal to the following amounts: (1) an annualized rate of 0.75% paid on the Company’s average asset value that is between $0 and $2.0 billion; (2) an annualized rate of 0.70% paid on the Company’s average asset value that is between $2.0 billion and $4.0 billion; and (3) an annualized rate of 0.65% paid on the Company’s average asset value that is over $4.0 billion.

Operating expenses

The Company reimburses CR V Advisors, or its affiliates, for the expenses they paid or incurred in connection with the advisory and administrative services provided to the Company, subject to the limitation that the Company will not reimburse CR V Advisors or its affiliates for any amount by which the operating expenses (including the advisory fee) at the end of the four preceding fiscal quarters exceed the greater of: (1) 2.0% of average invested assets, or (2) 25.0% of net income excluding any additions to reserves for depreciation, bad debts or other similar non-cash reserves and excluding any gain from the sale of assets for that period. The Company will not reimburse CR V Advisors or its affiliates for the salaries and benefits paid to personnel in connection with the services for which CR V Advisors or its affiliates receive acquisition fees, and the Company will not reimburse CR V Advisors for salaries and benefits paid to the Company’s executive officers.

Disposition fees

If CR V Advisors or its affiliates provide 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 (or the Company’s entire portfolio), the Company will pay CR V Advisors or its affiliates a disposition fee in an amount equal to up to one-half of the real estate or brokerage commission paid by the Company to third parties on the sale of such property, not to exceed 1.0% of the contract price of the property sold; provided, however, in no event may the total disposition fees paid to CR V Advisors, its affiliates and unaffiliated third parties exceed the lesser of the customary competitive real estate commission or an amount equal to 6.0% of the contract sales price. In addition, if CR V Advisors 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 assets other than properties, the Company may separately compensate CR V Advisors or its affiliates at such rates and in such amounts as the Board, including a majority of the Company’s independent directors, and CR V Advisors agree upon, not to exceed an amount equal to 1.0% of the contract price of the assets sold. During the three and nine months endedSeptember 30, 2018 and 2017, no disposition fees were incurred for any such services provided by CR V Advisors or its affiliates.

Subordinated performance fees

The Company will pay a subordinated performance fee in connection with one of the following alternative events: (1) if the Company’s shares are listed on a national securities exchange, CR V Advisors, or its affiliates, will be entitled to a subordinated performance fee equal to 15.0% of the amount, if any, by which (i) the market value of the Company’s outstanding stock plus distributions paid by the Company prior to listing, exceeds (ii) the sum of the total amount of capital raised from stockholders and the amount of distributions necessary to generate a 6.0% annual cumulative, non-compounded return to stockholders; (2) if the Company is sold or its assets are liquidated, CR V Advisors will be entitled to a subordinated performance fee equal to 15.0% of the net sale proceeds remaining after stockholders have received, from regular distributions plus special distributions paid from proceeds of such sale, a return of their net capital invested and a 6.0% annual cumulative, non-compounded return; or (3) upon termination of the advisory agreement, CR V Advisors may be entitled to a subordinated performance fee similar to the fee to which it would have been entitled had the portfolio been liquidated (based on an independent appraised value of the portfolio) on the date of termination. During the three and nine months endedSeptember 30, 2018 and 2017, nosubordinated performance fees were incurred related to any such events.

The Company incurred commissions, fees and expense reimbursements as shown in the table below for services provided by CR V Advisors and its affiliates related to the services described above during the periods indicated (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Selling commissions	$	298	$	813	$	1,215	$	3,441
Dealer manager fees	$	158	$	322	$	533	$	1,298
Other organization and offering expenses	$	218	$	378	$	708	$	1,454
Distribution and stockholder servicing fees (1)	$	97	$	56	$	270	$	123
Acquisition fees and expenses	$	52	$	915	$	1,250	$	2,332
Advisory fees and expenses	$	1,584	$	1,389	$	4,603	$	3,965
Operating expenses	$	487	$	522	$	1,625	$	1,594

______________________

(1) Amounts are calculated for the respective period in accordance with the dealer manager agreement and exclude the estimated liability for future distribution and stockholder servicing fees payable to CCO Capital of $1.3 million, which is included in due to affiliates in the condensed consolidated balance sheets with a corresponding decrease to capital in excess of par value.

Services Agreement

Pursuant to the Services Agreement, VEREIT OP, which is affiliated with one of the Company’s directors, is obligated to provide certain services to CCO Group and to the Company, including operational real estate support. The Company is not a party to the Services Agreement. See Note 11 — Economic Dependency for a discussion of the Services Agreement.

Due to/from Affiliates

As of September 30, 2018 and December 31, 2017, $2.1 million and $1.8 million, respectively, were recorded for services and expenses incurred, but not yet reimbursed to CR V Advisors, or its affiliates. The amounts are primarily for advisory fees and operating expenses and distribution and stockholder servicing fees payable to CCO Capital. These amounts were included in due to affiliates in the condensed consolidated balance sheets for such periods.

As of December 31, 2017, $14,000 was due from CR V Advisors or its affiliates related to amounts received by affiliates of the advisor which were due to the Company. No such amounts were due to the Company as of September 30, 2018.

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Economic Dependency

9 Months Ended

Sep. 30, 2018

Economic Dependency [Abstract]

ECONOMIC DEPENDENCY

ECONOMIC DEPENDENCY

Under various agreements, the Company has engaged and may in the future engage CR V Advisors or its affiliates to provide certain services that are essential to the Company, including asset management services, supervision of the management and leasing of properties owned by the Company, asset acquisition and disposition decisions, the sale of shares of the Company’s common stock available for issuance, as well as other administrative responsibilities for the Company including accounting services and stockholder relations. As a result of these relationships, the Company is dependent upon CR V Advisors or its affiliates. In the event that these companies are unable to provide the Company with these services, the Company would be required to find alternative providers of these services.

Services Agreement

Pursuant to the Services Agreement, VEREIT OP is obligated to provide certain services to CCO Group and to the Company, including operational real estate support. VEREIT OP is obligated to provide such services through March 31, 2019 (or, if later, the date of the last government filing other than a tax filing made by any of the Cole REITs with respect to its 2018 fiscal year) and is obligated provide consulting and research services through December 31, 2023 as requested by CCO Group, LLC.

Despite the indirect change of ownership and control of the Company’s advisor, dealer manager, property manager and sponsor, the Company expects that, during the Initial Services Term of the Services Agreement, the advisory, dealer manager and property management services the Company receives will continue without any material changes in personnel (except as supplemented by the management oversight of CIM personnel) or material change in service procedures. During the Initial Services Term of the Services Agreement, CCO Group, LLC intends to evaluate and effectuate an appropriate transition of VEREIT OP’s services under the Services Agreement to other CIM affiliates or third parties with the goal of ensuring continuity and minimizing disruption.

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Operating Leases

9 Months Ended

Sep. 30, 2018

Leases [Abstract]

Operating Leases

OPERATING LEASES

The Company’s real estate assets are leased to tenants under operating leases for which the terms and expirations vary. As of September 30, 2018, the leases had a weighted-average remaining term of 10.3 years. Certain leases include provisions to extend the lease agreements, options for early termination after paying a specified penalty, rights of first refusal to purchase the property at competitive market rates, and other terms and conditions as negotiated. The Company retains substantially all of the risks and benefits of ownership of the real estate assets leased to tenants.

The future minimum rental income from the Company’s real estate assets under non-cancelable operating leases, assuming no exercise of renewal options, as of September 30, 2018, was as follows (in thousands):

	Future Minimum Rental Income
Remainder of 2018	$	12,641
2019	48,013
2020	47,325
2021	46,723
2022	45,122
Thereafter	322,650
Total	$	522,474

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Subsequent Events

9 Months Ended

Sep. 30, 2018

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

The following events occurred subsequent to September 30, 2018:

Redemption of Shares of Common Stock

Subsequent to September 30, 2018, the Company redeemed approximately 135,000 shares for $3.0 million at an average per share price of $22.05 pursuant to the Company’s share redemption program. Management, in its discretion, limited the amount of shares redeemed for the three months ended September 30, 2018 to an amount equal to net proceeds the Company received from the sale of shares in the DRIP during the respective period. The remaining redemption requests received during the three months ended September 30, 2018 totaling approximately 295,000 shares went unfulfilled.

Acquisition of Real Estate Assets

Subsequent to September 30, 2018, the Company acquired one commercial propertyfor an aggregate purchase price of $15.1 million, which wasaccounted for as an asset acquisition. The acquisition was funded with net proceeds from the Follow-On Offering and available borrowings. The Company has not completed its initial purchase price allocation with respect to this property and therefore cannot provide similar disclosures to those included in Note 4 — Real Estate Assets in these condensed consolidated financial statements for this property.

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Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2018

Accounting Policies [Abstract]

Basis of Accounting

The summary of significant accounting policies presented below is designed to assist in understanding the Company’s condensed consolidated financial statements. These accounting policies conform to accounting principles generally accepted in the United States of America (“GAAP”), in all material respects, and have been consistently applied in preparing the accompanying condensed consolidated financial statements

Principles of Consolidation and Basis of Presentation

Principles of Consolidation and Basis of Presentation

The condensed consolidated financial statements of the Company have been prepared in accordance with the rules and regulations of the SEC regarding interim financial reporting, including the instructions to Form 10-Q and Article 10 of Regulation S-X, and do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the statements for the interim periods presented include all adjustments, which are of a normal and recurring nature, necessary for a fair presentation of the results for such periods. Results for these interim periods are not necessarily indicative of full year results.

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, 2017, and related notes thereto, set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. The condensed consolidated financial statements should also be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in this Quarterly Report on Form 10-Q.

The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Reclassifications

Reclassifications

Certain amounts in the Company’s prior period condensed consolidated financial statements have been reclassified to conform to the current period presentation. In connection with the adoption of Accounting Standards Update (“ASU”) No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, transfers to or from restricted cash, which have previously been shown in the Company’s investing activities section of the condensed consolidated statements of cash flows, are now required to be shown as part of the total change in cash, cash equivalents and restricted cash in the condensed consolidated statements of cash flows. This change resulted in a decrease in cash flows from investing activities of $253,000 during the nine months endedSeptember 30, 2017.

The Company adopted ASU 2017-12, as defined in “Recent Accounting Pronouncements,” during the first quarter of fiscal year 2018. Accordingly, for the nine months endedSeptember 30, 2018, the Company recorded a cumulative-effect adjustment related to eliminating the separate measurement of ineffectiveness to accumulated other comprehensive income with a corresponding adjustment to the opening balance of accumulated distributions in excess of earnings of $32,000.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Real Estate Assets, Recoverability of Real Estate Assets and Assets Held for Sale

Real Estate Assets

Real estate assets are stated at cost, less accumulated depreciation and amortization. The Company considers the period of future benefit of each respective asset to determine the appropriate useful life. The estimated useful lives of the Company’s real estate assets by class are generally as follows:

Buildings	40 years
Site improvements	15 years
Tenant improvements	Lesser of useful life or lease term
Intangible lease assets	Lease term

Recoverability of Real Estate Assets

The Company continually monitors events and changes in circumstances that could indicate that the carrying amounts of its real estate assets may not be recoverable. Impairment indicators that the Company considers include, but are not limited to: bankruptcy or other credit concerns of a property’s major tenant, such as a history of late payments, rental concessions and other factors; a significant decrease in a property’s revenues due to lease terminations; vacancies; co-tenancy clauses; reduced lease rates; changes in anticipated holding periods; or other circumstances. When indicators of potential impairment are present, the Company assesses the recoverability of the assets by determining whether the carrying amount of the assets will be recovered through the undiscounted future cash flows expected from the use of the assets and their eventual disposition. In the event that such expected undiscounted future cash flows do not exceed the carrying amount, the Company will adjust the real estate assets to their respective fair values and recognize an impairment loss. Generally, fair value will be determined using a discounted cash flow analysis and recent comparable sales transactions. No impairment indicators were identified and no impairment losses were recorded during the nine months endedSeptember 30, 2018 or 2017. The Company is in the process of determining if anticipated holding periods for certain properties may materially differ from the initial intended holding periods for such properties, which could result in an impairment charge in the future.

Assets Held for Sale

When a real estate asset is identified by the Company as held for sale, the Company will cease recording depreciation and amortization of the assets related to the property and estimate its fair value, net of selling costs. If, in management’s opinion, the fair value, net of selling costs, of the asset is less than the carrying amount of the asset, an adjustment to the carrying amount is then recorded to reflect the estimated fair value of the property, net of selling costs.

Allocation of Purchase Price of Real Estate Assets

Allocation of Purchase Price of Real Estate Assets

Upon the acquisition of real properties, the Company allocates the purchase price to acquired tangible assets, consisting of land, buildings and improvements, and to identified intangible assets and liabilities, consisting of the value of above- and below-market leases and the value of in-place leases and other intangibles, based in each case on their respective fair values. The Company utilizes independent appraisals to assist in the determination of the fair values of the tangible assets of an acquired property (which includes land and buildings). The information in the appraisal, along with any additional information available to the Company’s management, is used in estimating the amount of the purchase price that is allocated to land. Other information in the appraisal, such as building value and market rents, may be used by the Company’s management in estimating the allocation of purchase price to the building and to intangible lease assets and liabilities. The appraisal firm has no involvement in management’s allocation decisions other than providing this market information.

The determination of the fair values of the real estate assets and liabilities acquired requires the use of significant assumptions with regard to the current market rental rates, rental growth rates, capitalization and discount rates, interest rates and other variables. The use of alternative estimates may result in a different allocation of the Company’s purchase price, which could materially impact the Company’s results of operations.

In April 2017, the Company elected to early adopt ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (“ASU 2017-01”), which clarifies the definition of a business by adding guidance to assist entities in evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. Beginning in April 2017, all real estate acquisitions qualified as asset acquisitions and, as such, acquisition-related fees and certain acquisition-related expenses related to these asset acquisitions were capitalized and allocated to tangible and intangible assets and liabilities, as described above. Prior to the adoption of ASU 2017-01 in April 2017, all of the Company’s real estate acquisitions were accounted for as business combinations, and as such, acquisition-related expenses related to these business combination acquisitions were expensed as incurred. Prior to April 2017, acquisition-related expenses in the Company’s condensed consolidated statements of operations primarily consisted of legal, deed transfer and other costs related to real estate purchase transactions, including costs incurred for deals that were not consummated. The Company expects its future acquisitions to qualify as asset acquisitions and, as such, the Company will allocate the purchase price to acquired tangible assets and identified intangible assets and liabilities on a relative fair value basis.

Restricted Cash

Restricted Cash

The Company had $387,000 and $346,000 in restricted cash as of September 30, 2018 and December 31, 2017, respectively. Included in restricted cash was $94,000 held by lenders in lockbox accounts as of December 31, 2017. No such amounts were included in restricted cash as of September 30, 2018. As part of certain debt agreements, rent from certain of the Company’s tenants is deposited directly into a lockbox account, from which the monthly debt service payments are disbursed to the lender and the excess funds are disbursed to the Company.

Revenue Recognition

Revenue Recognition

Certain properties have leases where the minimum rental payment increases during the term of the lease. The Company records rental income for the full term of each lease on a straight-line basis when earned and collectability is reasonably assured. When the Company acquires a property, the terms of existing leases are considered to commence as of the acquisition date for the purpose of this calculation. The Company defers the recognition of contingent rental income, such as percentage rents, until the specific target that triggers the contingent rental income is achieved. Expected reimbursements from tenants for recoverable real estate taxes and operating expenses are included in tenant reimbursement income in the period when such costs are incurred. Effective January 1, 2018, the Company adopted ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”), which supersedes the revenue recognition requirements in Revenue Recognition, Accounting Standards Codification (“ASC”) Topic 605 and requires an entity to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company records revenue for real estate taxes and insurance reimbursed by its tenants on the leased properties, with offsetting expenses in real estate taxes and property operating expenses, respectively, within the condensed consolidated statements of operations as the Company has concluded it is the primary obligor. The Company has identified its revenue streams as rental income from leasing arrangements and tenant reimbursement income, which are outside of the scope of Topic 606. The Company adopted ASU 2014-09 using the modified retrospective approach and determined it did not have a material impact on the Company’s condensed consolidated financial statements.

The Company continually reviews receivables related to rent, including any straight-line rent, and current and future operating expense reimbursements from tenants, and determines their collectability by taking into consideration the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area in which the property is located. In the event that the collectability of a receivable is uncertain, the Company will record an increase in the allowance for uncollectible accounts.

Earnings (Loss) and Distributions Per Share

Earnings (Loss) and Distributions Per Share

The Company has two classes of common stock. Accordingly, the Company utilizes the two-class method to determine its earnings per share, which can result in different earnings per share for each of the classes. Under the two-class method, earnings per share of each class of common stock are computed by dividing the sum of the distributed earnings to common stockholders and undistributed earnings allocated to common stockholders by the weighted average number of shares for each class of common stock for the respective period. The distributed earnings to Class T Share common stockholders represents distributions declared less the distribution and stockholder servicing fees. Diluted income (loss) per share considers the effect of any potentially dilutive share equivalents, of which the Company had none for each of the three and nine months endedSeptember 30, 2018 and 2017. Distributions per share are calculated based on the authorized daily distribution rate.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

From time to time, new accounting pronouncements are issued by various standard setting bodies that may have an impact on the Company’s accounting and reporting. Except as otherwise stated below, the Company is currently evaluating the effect that certain new accounting requirements may have on the Company’s accounting and related reporting and disclosures in the Company’s condensed consolidated financial statements.

In February 2016, the Financial Accounting Standards Board (the “FASB”) issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”). The amendments in this update require that most lease obligations be recognized as a right of use asset with a corresponding liability on the balance sheet. The guidance also requires additional qualitative and quantitative disclosures to assess the amount, timing and uncertainty of cash flows arising from leases. ASU 2016-02 and subsequent amendments are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. The guidance, including optional practical expedients, should be implemented for the earliest period presented using a modified retrospective approach. The Company is currently in the process of finalizing its assessment of its inventory of leases that will be impacted by adoption of the new guidance. The Company does not expect the adoption to have a material impact on the accounting treatment of the Company’s net leases, which are the primary source of the Company’s revenues.

In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities (“ASU 2017-12”). The targeted amendments in this ASU are designed to help simplify certain aspects of hedge accounting and result in a more accurate portrayal of the economics of an entity’s risk management activities in its financial statements. ASU 2017-12 applies to the Company’s interest rate swaps designated as cash flow hedges. ASU 2017-12 requires all changes in the fair value of highly effective cash flow hedges to be recorded in accumulated other comprehensive income. Under current GAAP, the ineffective portion of the change in fair value of cash flow hedges is recognized directly in earnings. This eliminates the requirement to separately measure and disclose ineffectiveness for qualifying cash flow hedges. ASU 2017-12 is effective for public entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. ASU 2017-12 is required to be adopted using a modified retrospective approach with early adoption permitted. The Company early adopted ASU 2017-12 during the first quarter of fiscal year 2018. Accordingly, during the nine months endedSeptember 30, 2018, the Company recorded a cumulative-effect adjustment related to eliminating the separate measurement of ineffectiveness to accumulated other comprehensive income with a corresponding adjustment to the opening balance of accumulated distributions in excess of earnings of $32,000.

In August 2018, the FASB issued ASU No. 2018-13, Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”). This ASU amends and removes several disclosure requirements including the valuation processes for Level 3 fair value measurements. ASU 2018-13 also modifies some disclosure requirements and requires additional disclosures for changes in unrealized gains and losses included in other comprehensive income for recurring Level 3 fair value measurements and requires the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. The provisions of ASU 2018-13 are effective January 1, 2020 using a prospective transition method for amendments effecting changes in unrealized gains and losses, significant unobservable inputs used to develop Level 3 fair value measurements and narrative description on uncertainty of measurements. The remaining provisions of the ASU are to be applied retrospectively, and early adoption is permitted. The Company is evaluating the impact of this ASU's adoption, and does not believe this ASU will have a material impact on its condensed consolidated financial statements.

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Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2018

Accounting Policies [Abstract]

Investment in and Valuation of Real Estate and Related Assets

The estimated useful lives of the Company’s real estate assets by class are generally as follows:

Buildings	40 years
Site improvements	15 years
Tenant improvements	Lesser of useful life or lease term
Intangible lease assets	Lease term

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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2018

Fair Value Disclosures [Abstract]

Summary of Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis

In accordance with the fair value hierarchy described above, the following tables show 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, 2018 and December 31, 2017 (in thousands):

	Balance as of		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	September 30, 2018		(Level 1)		(Level 2)		(Level 3)
Financial assets:
Interest rate swaps	$	1,600	$	—	$	1,600	$	—
	Balance as of		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	December 31, 2017		(Level 1)		(Level 2)		(Level 3)
Financial assets:
Interest rate swaps	$	845	$	—	$	845	$	—

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Real Estate Assets (Tables)

9 Months Ended

Sep. 30, 2018

Real Estate [Abstract]

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

The following table summarizes the consideration transferred for the properties purchased during the nine months endedSeptember 30, 2017 (in thousands):

	2017 Acquisitions
Real estate assets:
Purchase price of asset acquisitions	$	88,547
Purchase price of business combinations	14,878
Total purchase price of real estate assets acquired (1)	$	103,425

______________________

(1) The weighted average amortization period for the 2017 Acquisitions was 13.9 years for acquired in-place leases and other intangibles, 16.6 years for acquired above-market leases and 12.9 years for acquired intangible lease liabilities.

The following table summarizes the purchase price allocation for the 2017 Business Combination Acquisitions purchased during the nine months endedSeptember 30, 2017 (in thousands):

	2017 Business Combination Acquisitions
Land	$	2,099
Buildings and improvements	11,342
Acquired in-place leases and other intangibles	1,437
Total purchase price	$	14,878

The following table summarizes the purchase price allocation for the 2018 Asset Acquisitions purchased during the nine months endedSeptember 30, 2018 (in thousands):

	2018 Asset Acquisitions
Land	$	8,882
Buildings and improvements	30,505
Acquired in-place leases and other intangibles (1)	4,437
Total purchase price	$	43,824

______________________

(1) The weighted average amortization period for acquired in-place leases and other intangibles was 17.4 years for the 2018 Asset Acquisitions.

The following table summarizes the purchase price allocation for the 2017 Asset Acquisitions purchased during the nine months endedSeptember 30, 2017 (in thousands):

	2017 Asset Acquisitions
Land	$	21,037
Buildings and improvements	47,958
Acquired in-place leases and other intangibles	18,758
Acquired above-market leases	1,665
Intangible lease liabilities	(871		)
Total purchase price	$	88,547

Business Acquisition, Pro Forma Information

The table below presents the Company’s estimated revenue and net income (loss), on a pro forma basis, for the three and nine months endedSeptember 30, 2017 and 2016 (in thousands):

	Three Months Ended September 30,					Nine Months Ended September 30,
	2017		2016			2017		2016
Pro forma basis (unaudited):
Revenue	$	11,749	$	10,325		$	32,779	$	31,103
Net income (loss)	$	718	$	(102	)	$	1,567	$	(1,559	)

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Intangible Lease Assets (Tables)

9 Months Ended

Sep. 30, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of finite-lived intangible assets

Intangible lease assets as of September 30, 2018 and December 31, 2017 consisted of the following (in thousands, except weighted average life):

	September 30, 2018		December 31, 2017
In-place leases and other intangibles, net of accumulated amortization of $18,259 and $13,899, respectively (with a weighted average life remaining of 11.0 years and 11.3 years, respectively)	$	56,442	$	56,443
Acquired above-market leases, net of accumulated amortization of $3,056 and $2,519, respectively (with a weighted average life remaining of 11.2 years and 11.8 years, respectively)	5,780		6,407
	$	62,222	$	62,850

Schedule of finite-lived intangible assets amortization expense

The following table summarizes the amortization expense related to the intangible lease assets for the three and nine months endedSeptember 30, 2018 and 2017 (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
In-place lease and other intangible amortization	$	1,469	$	1,328	$	4,587	$	3,558
Above-market lease amortization	$	166	$	211	$	628	$	617

Schedule of finite-lived intangible assets, future amortization expense

As of September 30, 2018, the estimated amortization expense relating to the intangible lease assets is as follows (in thousands):

	Amortization Expense
	In-Place Leases and Other Intangibles		Above-Market Leases
Remainder of 2018	$	1,482	$	183
2019	$	5,699	$	591
2020	$	5,492	$	538
2021	$	5,430	$	523
2022	$	5,233	$	511

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Derivative Instruments and Hedging Activities (Tables)

9 Months Ended

Sep. 30, 2018

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivative Instruments

The following table summarizes the terms of the Company’s executed interest rate swap agreements designated as hedging instruments as of September 30, 2018 and December 31, 2017 (dollar amounts in thousands):

	Balance Sheet Location	Outstanding Notional Amount as of		Interest Rate (1)	Effective Date	Maturity Date	Fair Value of Assets as of
		September 30, 2018					September 30, 2018		December 31, 2017
Interest Rate Swaps	Derivative assets, prepaid expenses and other assets	$	241,100	3.22% to 4.45%	12/31/2015 to 5/23/2018	4/25/2019 to 3/28/2022	$	1,600	$	845

______________________

(1) The interest rates consist of the underlying index swapped to a fixed rate and the applicable interest rate spread as of September 30, 2018.

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Notes Payable and Credit Facility (Tables)

9 Months Ended

Sep. 30, 2018

Debt Disclosure [Abstract]

Schedule of Debt

The following table summarizes the debt balances as of September 30, 2018 and December 31, 2017, and the debt activity for the nine months endedSeptember 30, 2018 (in thousands):

				During the Nine Months Ended September 30, 2018
	Balance as of December 31, 2017			Debt Issuance, Net (1)			Repayments and Modifications			Accretion		Balance as of September 30, 2018
Credit facility	$	217,000		$	270,000		$	(244,500	)	$	—	$	242,500
Fixed rate debt	92,600			—			—			—		92,600
Total debt	309,600			270,000			(244,500		)	—		335,100
Deferred costs (2)	(1,041		)	(1,730		)	125			400		(2,246		)
Total debt, net	$	308,559		$	268,270		$	(244,375	)	$	400	$	332,854

______________________

(1) Includes deferred financing costs incurred during the period.

(2) Deferred costs relate to mortgage notes payable and the term portion of the Credit Facility, as defined below.

Schedule of Maturities of Long-term Debt

The following table summarizes the scheduled aggregate principal repayments for the Company’s outstanding debt subsequent to September 30, 2018 (in thousands):

	Principal Repayments
Remainder of 2018	$	—
2019	—
2020	388
2021	68,009
2022	22,928
Thereafter	243,775
Total	$	335,100

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Intangible Lease Liabilities (Tables)

9 Months Ended

Sep. 30, 2018

Other Liabilities Disclosure [Abstract]

Schedule of finite-lived intangible liabilities

Intangible lease liabilities consisted of the following as of September 30, 2018 and December 31, 2017 (in thousands, except weighted average life remaining amounts):

	September 30, 2018		December 31, 2017
Acquired below-market leases, net of accumulated amortization of $2,081 and $1,678, respectively (with a weighted average life remaining of 7.5 years and 7.9 years, respectively)	$	3,569	$	4,019

Schedule of amortization expense of below market lease

The following table summarizes the amortization of the intangible lease liabilities for the three and nine months endedSeptember 30, 2018 and 2017 (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Below-market lease amortization	$	147	$	133	$	450	$	412

Schedule of finite-lived intangible liabilities, future amortization expense

As of September 30, 2018, the estimated amortization of the intangible lease liabilities is as follows (in thousands):

	Amortization of Below-Market Leases
Remainder of 2018	$	146
2019	$	555
2020	$	479
2021	$	460
2022	$	380

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Related-Party Transactions and Arrangements (Tables)

9 Months Ended

Sep. 30, 2018

Related Party Transactions [Abstract]

Schedule of Related Party Transactions

The Company incurred commissions, fees and expense reimbursements as shown in the table below for services provided by CR V Advisors and its affiliates related to the services described above during the periods indicated (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Selling commissions	$	298	$	813	$	1,215	$	3,441
Dealer manager fees	$	158	$	322	$	533	$	1,298
Other organization and offering expenses	$	218	$	378	$	708	$	1,454
Distribution and stockholder servicing fees (1)	$	97	$	56	$	270	$	123
Acquisition fees and expenses	$	52	$	915	$	1,250	$	2,332
Advisory fees and expenses	$	1,584	$	1,389	$	4,603	$	3,965
Operating expenses	$	487	$	522	$	1,625	$	1,594

______________________

(1) Amounts are calculated for the respective period in accordance with the dealer manager agreement and exclude the estimated liability for future distribution and stockholder servicing fees payable to CCO Capital of $1.3 million, which is included in due to affiliates in the condensed consolidated balance sheets with a corresponding decrease to capital in excess of par value.

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Operating Leases (Tables)

9 Months Ended

Sep. 30, 2018

Leases [Abstract]

Schedule of future minimum rental payments for operating leases

The future minimum rental income from the Company’s real estate assets under non-cancelable operating leases, assuming no exercise of renewal options, as of September 30, 2018, was as follows (in thousands):

	Future Minimum Rental Income
Remainder of 2018	$	12,641
2019	48,013
2020	47,325
2021	46,723
2022	45,122
Thereafter	322,650
Total	$	522,474

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Organization and Business (Shares Offering) (Details) - USD ($)	3 Months Ended		9 Months Ended		54 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Mar. 29, 2018	Dec. 31, 2017	Aug. 01, 2017	Mar. 24, 2017	Mar. 17, 2014	Feb. 07, 2014
Class of Stock [Line Items]
Issuance of common stock			$ 35,234,000
Net asset value per share (USD per share)						$ 22.18	$ 22.18
Due to affiliates	$ 2,147,000		2,147,000		$ 2,147,000		$ 1,787,000
Distribution and stockholder servicing fees | Advisors
Class of Stock [Line Items]
Related party transaction, expenses from transactions with related party	97,000	$ 56,000	270,000	$ 123,000
Due to affiliates	$ 1,300,000		$ 1,300,000		1,300,000
Class A Common Stock
Class of Stock [Line Items]
Share price (USD per share)						24.37
Class A Common Stock | Common Stock
Class of Stock [Line Items]
Issuance of common stock, shares (shares)			960,340
Issuance of common stock			$ 10,000
Class T Common Stock
Class of Stock [Line Items]
Share price (USD per share)						23.35
Class T Common Stock | Distribution and stockholder servicing fees | Advisors
Class of Stock [Line Items]
Related party transaction, expenses from transactions with related party			$ 483,000
Class T Common Stock | Common Stock
Class of Stock [Line Items]
Issuance of common stock, shares (shares)			506,344
Issuance of common stock			$ 6,000
IPO
Class of Stock [Line Items]
Common stock, shares authorized								$ 1,200,000,000.0		$ 2,975,000,000
Issuance of common stock					$ 444,800,000
Shares, Issued	17,800,000		17,800,000		17,800,000
Organization and offering costs, selling commissions and dealer manager fees					$ 41,800,000
IPO | Class A Common Stock
Class of Stock [Line Items]
Common stock, shares authorized								660,000,000.0			$ 2,500,000,000.0
Issuance of common stock					398,700,000
IPO | Class T Common Stock
Class of Stock [Line Items]
Common stock, shares authorized								540,000,000.0
Issuance of common stock					$ 46,100,000
Distribution reinvestment plan
Class of Stock [Line Items]
Common stock, shares authorized								$ 300,000,000.0
Shares, Issued	1,500,000		1,500,000		1,500,000
Distribution reinvestment plan | Class A Common Stock
Class of Stock [Line Items]
Common stock, shares authorized											$ 475,000,000.0
Share price (USD per share)						$ 22.18
Distribution reinvestment plan | Class T Common Stock
Class of Stock [Line Items]
Share price (USD per share)									$ 22.18
Cole Operating Partnership V, LP
Class of Stock [Line Items]
General partner partnership interest (percent)			100.00%

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Organization and Business (Real Estate) (Details) ft² in Millions	Sep. 30, 2018 ft² state property
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of owned properties (property) | property	140
Rentable square feet (sqft) | ft²	3.4
Number of states in which entity owns properties (state) | state	33
Percentage of rentable space leased (percent)	98.90%

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Summary of Significant Accounting Policies (Reclassifications) (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Decrease in net cash used in investing activities	$ 44,953	$ 103,243
ASU 2016-18
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Decrease in net cash used in investing activities		$ 253
ASU 2017-12
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Adjustment to opening balance of accumulated distributions in excess of earnings	$ (32)

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Summary of Significant Accounting Policies (Real Estate) (Details) - USD ($)	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Real Estate
Impairment of real estate	$ 0	$ 0
Real estate held-for-sale	$ 0		$ 0
Building
Real Estate
Useful life	40 years
Site Improvements
Real Estate
Useful life	15 years

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Summary of Significant Accounting Policies (Restricted Cash) (Details) - USD ($)	Sep. 30, 2018	Dec. 31, 2017	Sep. 30, 2017
Restricted Cash and Cash Equivalents
Restricted cash	$ 387,000	$ 346,000	$ 347,000
Restricted Lockbox Accounts
Restricted Cash and Cash Equivalents
Restricted cash	0	94,000
Escrow Deposits
Restricted Cash and Cash Equivalents
Restricted cash	293,000	2,000
Lender Cash Management Accounts
Restricted Cash and Cash Equivalents
Restricted cash	$ 94,000	$ 250,000

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Summary of Significant Accounting Policies (Other) (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018 USD ($) class_of_stock shares	Sep. 30, 2017 shares	Sep. 30, 2018 USD ($) class_of_stock shares	Sep. 30, 2017 shares	Dec. 31, 2017 USD ($)
Revenue Recognition
Allowance for doubtful accounts | $	$ 18		$ 18		$ 40
Earnings Per Share
Number of classes of common stock | class_of_stock	2		2
Potentially dilutive share equivalents (shares) | shares	0	0	0	0

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Fair Value Measurements (Narrative) (Details) - Fair value, measurements, recurring - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017
Estimate of fair value | Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt outstanding	$ 334.7	$ 311.4
Carrying value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt outstanding	$ 335.1	$ 309.6

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Fair Value Measurements - Financial Assets and Liabilities Measured on a Recurring Basis (Details) - Fair value, measurements, recurring - Interest Rate Swap - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial asset: Interest rate swap	$ 1,600	$ 845
Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial asset: Interest rate swap	0	0
Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial asset: Interest rate swap	1,600	845
Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial asset: Interest rate swap	$ 0	$ 0

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Real Estate Assets (Narrative) (Details) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)	Sep. 30, 2018 USD ($) property	Sep. 30, 2017 USD ($) property	Dec. 31, 2017
Business Acquisition [Line Items]
Number of properties acquired | property				15
Purchase price of asset acquisitions		$ 103,400		$ 103,400
Below market lease, weighted average useful life			7 years 6 months		7 years 10 months 24 days
Acquisition-related costs	$ 52	35	$ 187	$ 527
Acquisitions, 2017
Business Acquisition [Line Items]
Number of properties acquired | property				2
Purchase price of business combinations		14,878		$ 14,878
Revenue of acquiree since acquisition date		285		652
Income (loss) of acquiree since acquisition date		170		(25)
Acquisition-related costs				407
2018 Asset Acquisition | Acquisitions, 2018
Business Acquisition [Line Items]
Number of properties acquired | property			4
Purchase price of asset acquisitions	43,824		$ 43,824
Capitalized acquisition-related expenses	$ 1,300		$ 1,300
2017 Asset Acquisitions
Business Acquisition [Line Items]
Purchase price of asset acquisitions		$ 88,547		$ 88,547
Number of properties acquired through asset acquisition | property				13
Below market lease, weighted average useful life				12 years 10 months 20 days
Acquisition-related costs				$ 2,600
Acquired in-place leases and other intangibles | 2018 Asset Acquisition | Acquisitions, 2018
Business Acquisition [Line Items]
Acquired finite-lived intangible assets, weighted average useful life			17 years 4 months 24 days
Acquired in-place leases and other intangibles | 2017 Asset Acquisitions
Business Acquisition [Line Items]
Acquired finite-lived intangible assets, weighted average useful life				13 years 10 months 10 days
Acquired above-market leases | 2017 Asset Acquisitions
Business Acquisition [Line Items]
Acquired finite-lived intangible assets, weighted average useful life				16 years 6 months 20 days

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Real Estate Assets (Purchase Price of Real Estate Investment) (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017	Sep. 30, 2017
Real Estate [Line Items]
Purchase price of asset acquisitions			$ 103,400
Total real estate assets, at cost	$ 683,908	$ 639,104	103,425
2017 Asset Acquisitions
Real Estate [Line Items]
Purchase price of asset acquisitions			88,547
Acquisitions, 2017
Real Estate [Line Items]
Purchase price of business combinations			$ 14,878

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Real Estate Assets (Schedule of Recognized Identified Assets Acquired and Liabilities Assumed) (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017	Sep. 30, 2017
Business Acquisition [Line Items]
Land	$ 151,868	$ 142,986
Total purchase price			$ 103,400
Acquisitions, 2017
Business Acquisition, Purchase Price Allocation [Abstract]
Land			2,099
Buildings and improvements			11,342
Total purchase price of real estate assets acquired			14,878
Acquisitions, 2017 | Acquired in-place leases and other intangibles
Business Acquisition, Purchase Price Allocation [Abstract]
Acquired in-place leases and other intangibles			1,437
2017 Asset Acquisitions
Business Acquisition [Line Items]
Land			21,037
Buildings and improvements			47,958
Acquired in-place leases and other intangibles			18,758
Acquired above-market leases			1,665
Intangible lease liabilities			(871)
Total purchase price			$ 88,547
2018 Asset Acquisition | Acquisitions, 2018
Business Acquisition [Line Items]
Land	8,882
Buildings and improvements	30,505
Acquired in-place leases and other intangibles	4,437
Total purchase price	$ 43,824

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Real Estate Assets (Business Acquisition, Pro Forma Information) (Details) - Acquisitions, 2017 - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Pro forma basis (unaudited)
Revenue	$ 11,749	$ 10,325	$ 32,779	$ 31,103
Net income (loss)	$ 718	$ (102)	$ 1,567	$ (1,559)

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Intangible Lease Assets (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Finite-Lived Intangible Assets [Line Items]
Intangible leased assets	$ 62,222	$ 62,850
Acquired in-place leases and other intangibles
Finite-Lived Intangible Assets [Line Items]
Intangible leased assets	56,442	56,443
Accumulated amortization	$ 18,259	$ 13,899
Useful life	11 years	11 years 3 months 18 days
Acquired above-market leases
Finite-Lived Intangible Assets [Line Items]
Intangible leased assets	$ 5,780	$ 6,407
Accumulated amortization	$ 3,056	$ 2,519
Useful life	11 years 2 months	11 years 9 months 18 days

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Intangible Lease Assets (Schedule of finite-lived intangible assets amortization expense) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Acquired in-place leases and other intangibles
Finite-Lived Intangible Assets [Line Items]
Amortization expense	$ 1,469	$ 1,328	$ 4,587	$ 3,558
Acquired above-market leases
Finite-Lived Intangible Assets [Line Items]
Amortization expense	$ 166	$ 211	$ 628	$ 617

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Intangible Lease Assets (Estimated Amortization of Intangible lease assets) (Details) $ in Thousands	Sep. 30, 2018 USD ($)
Acquired in-place leases and other intangibles
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
Remainder of 2018	$ 1,482
2019	5,699
2020	5,492
2021	5,430
2022	5,233
Acquired above-market leases
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
Remainder of 2018	183
2019	591
2020	538
2021	523
2022	$ 511

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Derivative Instruments and Hedging Activities (Narrative) (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018 USD ($) derivative	Sep. 30, 2017 USD ($)	Sep. 30, 2018 USD ($) derivative	Sep. 30, 2017 USD ($)
Derivatives, Fair Value [Line Items]
Amount of gain (loss) reclassified from other comprehensive income into income as interest expense | $	$ 17	$ (110)	$ 90	$ (567)
Interest Rate Swap
Derivatives, Fair Value [Line Items]
Derivative, number of instruments entered into (derivative) | derivative			1
Derivative, number of instruments held (derivative) | derivative	3		3
Interest Rate Swap | Cash Flow Hedging | Interest Expense
Derivatives, Fair Value [Line Items]
Interest rate cash flow hedge gain (loss) to be reclassified during next twelve months | $	$ 681		$ 681

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Derivative Instruments and Hedging Activities (Schedule of Derivative Instruments) (Details) - Cash Flow Hedging - Interest Rate Swap - Derivative assets, prepaid expenses and other assets - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Derivatives, Fair Value [Line Items]
Outstanding Notional Amount	$ 241,100
Fair Value of Assets	$ 1,600	$ 845
Minimum
Derivatives, Fair Value [Line Items]
Interest rate (percent)	3.22%
Maximum
Derivatives, Fair Value [Line Items]
Interest rate (percent)	4.45%

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Notes Payable and Credit Facility (Schedule of Debt) (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Debt Instrument [Line Items]
Debt instrument, weighted average years to maturity	4 years 2 months 12 days
Weighted average interest rate	3.80%
Short-Term and Long-Term Debt [Roll Forward]
Long-term debt, gross beginning balance	$ 309,600
Deferred costs, beginning balance	(1,041)
Debt, net beginning balance	308,559
Debt Issuance, net	270,000	$ 102,200
Deferred costs incurred	(1,730)
Debt Issuance, net	268,270
Repayments and Modifications of Debt, Amount	(244,500)
Repayments and Modifications of Debt, Deferred Costs, Amount	125
Repayments and Modifications of Debt, Net	(244,375)
Accretion of Deferred Costs	400
Accretion	400
Long-term debt, gross ending balance	335,100
Deferred costs, ending balance	(2,246)
Debt, net ending balance	332,854
Line of credit
Short-Term and Long-Term Debt [Roll Forward]
Long-term debt, gross beginning balance	217,000
Debt Issuance, net	270,000
Repayments and Modifications of Debt, Amount	(244,500)
Long-term debt, gross ending balance	242,500
Fixed Rate Debt
Short-Term and Long-Term Debt [Roll Forward]
Long-term debt, gross beginning balance	92,600
Debt Issuance, net	0
Repayments and Modifications of Debt, Amount	0
Long-term debt, gross ending balance	$ 92,600

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Notes Payable and Credit Facility (Fixed Rate Debt Narrative) (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Debt Instrument [Line Items]
Long-term debt, gross	$ 335,100	$ 309,600
Fixed rate debt
Debt Instrument [Line Items]
Long-term debt, gross	92,600
Debt instrument, collateral amount	$ 156,500
Minimum | Fixed rate debt
Debt Instrument [Line Items]
Debt instrument interest rate (percent)	3.50%
Maximum | Fixed rate debt
Debt Instrument [Line Items]
Debt instrument interest rate (percent)	4.45%
Interest Rate Swap | Variable Rate Debt
Debt Instrument [Line Items]
Long-term debt, gross	$ 21,100

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Notes Payable and Credit Facility (Modified Credit Agreement) (Details)	9 Months Ended
	Sep. 30, 2018 USD ($)	Dec. 31, 2017 USD ($)
Debt Instrument [Line Items]
Long-term line of credit	$ 332,854,000	$ 308,559,000
Long-term debt, gross	$ 335,100,000	309,600,000
Weighted average interest rate	3.80%
Line of credit
Debt Instrument [Line Items]
Long-term debt, gross	$ 242,500,000	$ 217,000,000
Line of credit | Minimum | LIBOR
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate	1.00%
Line of credit | JPMorgan Chase Bank, N.A
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity	$ 350,000,000.0
Weighted average interest rate	3.80%
Line of credit facility, remaining borrowing capacity	$ 107,500,000
Line of credit facility, covenant, minimum consolidated net worth	$ 225,000,000
Line of credit facility, covenant, minimum consolidated net worth, percentage of equity issuance (percent)	75.00%
Debt instrument, covenant, fixed charge coverage ratio, minimum	1.50
Line of credit | JPMorgan Chase Bank, N.A | Federal Funds Effective Rate
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate	0.50%
Line of credit | JPMorgan Chase Bank, N.A | Minimum
Debt Instrument [Line Items]
Debt instrument interest rate (percent)	0.30%
Line of credit facility, covenant, unsecured debt service coverage ratio	1.75
Line of credit | JPMorgan Chase Bank, N.A | Minimum | Statutory Reserve Rate
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate	1.30%
Line of credit | JPMorgan Chase Bank, N.A | Maximum
Debt Instrument [Line Items]
Debt instrument interest rate (percent)	0.70%
Line of credit facility, covenant, leverage ratio	60.00%
Debt instrument, covenant, unsecured debt to unencumbered asset value ratio	60.00%
Line of credit facility, covenant, secured debt ratio	40.00%
Line of credit facility, covenant, recourse debt coverage ratio	15.00%
Line of credit | JPMorgan Chase Bank, N.A | Maximum | Statutory Reserve Rate
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate	1.70%
Line of credit | Revolving credit facility | JPMorgan Chase Bank, N.A
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity	$ 130,000,000.0
Long-term line of credit	$ 22,500,000
Weighted average interest rate	3.90%
Line of credit | Term Loan | JPMorgan Chase Bank, N.A
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity	$ 220,000,000.0
Long-term line of credit	$ 220,000,000
Line of credit | Term Loan | JPMorgan Chase Bank, N.A | Interest Rate Swap
Debt Instrument [Line Items]
All in rate for the swapped term loan	3.80%
Long-term debt, gross	$ 242,500,000

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Notes Payable and Credit Facility (Schedule of Maturities of Long-term Debt) (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Debt Disclosure [Abstract]
Remainder of 2018	$ 0
2019	0
2020	388
2021	68,009
2022	22,928
Thereafter	243,775
Total	$ 335,100	$ 309,600

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Intangible Lease Liabilities (Schedule of lease liabilities) (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Other Liabilities Disclosure [Abstract]
Below market leases net of amortization	$ 3,569	$ 4,019
Below market lease, accumulated amortization	$ 2,081	$ 1,678
Below market lease, weighted average useful life	7 years 6 months	7 years 10 months 24 days

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Intangible Lease Liabilities (Schedule of amortization expense of below market lease) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Other Liabilities Disclosure [Abstract]
Amortization of below market lease	$ 147	$ 133	$ 450	$ 412

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Intangible Lease Liabilities (Schedule of future amortization expense) (Details) $ in Thousands	Sep. 30, 2018 USD ($)
Below Market Lease, Amortization Income, Maturity Schedule [Abstract]
Remainder of 2018	$ 146
2019	555
2020	479
2021	460
2022	$ 380

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Related-Party Transactions and Arrangements (Selling commissions and dealer manager fees) (Details) - Dealer manager	Sep. 30, 2018
Selling commissions
Related Party Transaction [Line Items]
Expenses reallowed (percentage)	100.00%
Selling commissions | Class A Common Stock | Maximum
Related Party Transaction [Line Items]
Commissions percentage on stock sales and related dealer manager fees	7.00%
Selling commissions | Class T Common Stock | Maximum
Related Party Transaction [Line Items]
Commissions percentage on stock sales and related dealer manager fees	3.00%
Dealer manager fee | Class A Common Stock
Related Party Transaction [Line Items]
Commissions percentage on stock sales and related dealer manager fees	2.00%
Dealer manager fee | Class T Common Stock
Related Party Transaction [Line Items]
Commissions percentage on stock sales and related dealer manager fees	2.00%

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Related-Party Transactions and Arrangements (Other organization and offering expenses) (Details) - Advisors - Other organization and offering expenses	Sep. 30, 2018
Related Party Transaction [Line Items]
Organization and offering expense (percent)	2.00%
Maximum
Related Party Transaction [Line Items]
Organization and offering expense (percent)	2.00%

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Related-Party Transactions and Arrangements (Distribution and stockholder servicing fees) (Details) - Advisors	Oct. 05, 2016	Oct. 04, 2016	Sep. 30, 2018
Class T Common Stock
Related Party Transaction [Line Items]
Distribution and stockholder servicing fee, percentage of net asset value, daily accrual rate	0.00274%	0.00219%
Distribution and stockholder servicing fees
Related Party Transaction [Line Items]
Related party transaction, daily distribution and servicing fee, termination of payments threshold, percentage of Total Gross Investment			4.00%
Related party transaction, daily distribution and servicing fee, termination of payments threshold, percentage of gross proceeds from shares in offering			10.00%

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Related-Party Transactions and Arrangements (Acquisition fees and expenses) (Details) - Advisors - Acquisition fees and expenses	Sep. 30, 2018
Related Party Transaction [Line Items]
Acquisition and advisory fee (percent)	2.00%
Related party, reimbursement fixed annual percentage of the contract purchase price	0.50%
Acquisition fees and expenses reimbursement percent	6.00%

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Related-Party Transactions and Arrangements (Advisory fees and expenses) (Details)	Sep. 30, 2018 USD ($)
Minimum | Average invested assets between $0 to $2 billion
Related Party Transaction [Line Items]
Average invested assets	$ 0
Minimum | Average invested assets between $2 billion to $4 billion
Related Party Transaction [Line Items]
Average invested assets	2,000,000,000
Minimum | Average invested assets over $4 billion
Related Party Transaction [Line Items]
Average invested assets	4,000,000,000
Maximum | Average invested assets between $0 to $2 billion
Related Party Transaction [Line Items]
Average invested assets	2,000,000,000
Maximum | Average invested assets between $2 billion to $4 billion
Related Party Transaction [Line Items]
Average invested assets	$ 4,000,000,000
Advisors | Advisory fees and expenses | Average invested assets between $0 to $2 billion
Related Party Transaction [Line Items]
Asset management or advisory fees percent	0.75%
Advisors | Advisory fees and expenses | Average invested assets between $2 billion to $4 billion
Related Party Transaction [Line Items]
Asset management or advisory fees percent	0.70%
Advisors | Advisory fees and expenses | Average invested assets over $4 billion
Related Party Transaction [Line Items]
Asset management or advisory fees percent	0.65%

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Related-Party Transactions and Arrangements (Operating expenses) (Details) - Advisors - Minimum	Sep. 30, 2018
Related Party Transaction [Line Items]
Operating expense reimbursement percent of average invested assets	2.00%
Operating expense reimbursement percent of net income	25.00%

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Related-Party Transactions and Arrangements (Disposition fees) (Details) - Advisors - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Brokerage commission fee | Maximum
Related Party Transaction [Line Items]
Commissions performance and other fees percent	50.00%		50.00%
Property sales commission
Related Party Transaction [Line Items]
Commissions performance and other fees percent	1.00%		1.00%
Related party transaction, expenses from transactions with related party	$ 0	$ 0	$ 0	$ 0
Property portfolio | Maximum
Related Party Transaction [Line Items]
Commissions performance and other fees percent	6.00%		6.00%

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Related-Party Transactions and Arrangements (Subordinated performance fees) (Details) - Advisors	Sep. 30, 2018
Related Party Transaction [Line Items]
Cumulative noncompounded annual return	6.00%
Subordinate Performance Fees On Event of Sale of Company
Related Party Transaction [Line Items]
Commissions performance and other fees percent	15.00%
Subordinate Performance Fees For Listing
Related Party Transaction [Line Items]
Commissions performance and other fees percent	15.00%

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Related-Party Transactions and Arrangements (Schedule of Related Party Transactions) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Related Party Transaction [Line Items]
Due to affiliates	$ 2,147		$ 2,147		$ 1,787
Selling commissions | Advisors
Related Party Transaction [Line Items]
Related party transaction, expenses from transactions with related party	298	$ 813	1,215	$ 3,441
Dealer manager fee | Advisors
Related Party Transaction [Line Items]
Related party transaction, expenses from transactions with related party	158	322	533	1,298
Other organization and offering expenses | Advisors
Related Party Transaction [Line Items]
Related party transaction, expenses from transactions with related party	218	378	708	1,454
Distribution and stockholder servicing fees | Advisors
Related Party Transaction [Line Items]
Related party transaction, expenses from transactions with related party	97	56	270	123
Due to affiliates	1,300		1,300
Acquisition fees and expenses | Advisors
Related Party Transaction [Line Items]
Related party transaction, expenses from transactions with related party	52	915	1,250	2,332
Advisory fees and expenses | Advisors
Related Party Transaction [Line Items]
Related party transaction, expenses from transactions with related party	1,584	1,389	4,603	3,965
Operating expenses | Advisors
Related Party Transaction [Line Items]
Related party transaction, expenses from transactions with related party	$ 487	$ 522	$ 1,625	$ 1,594

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Related-Party Transactions and Arrangements (Due to/from Affiliates) (Details) - USD ($)	Sep. 30, 2018	Dec. 31, 2017
Related Party Transactions [Abstract]
Due to affiliates	$ 2,147,000	$ 1,787,000
Due from affiliates	$ 0	$ 14,000

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Operating Leases (Details) $ in Thousands	Sep. 30, 2018 USD ($)
Leases [Abstract]
Operating lease, weighted average remaining lease term	10 years 3 months
Operating Leases, Future Minimum Payments Receivable [Abstract]
Remainder of 2018	$ 12,641
2019	48,013
2020	47,325
2021	46,723
2022	45,122
Thereafter	322,650
Total	$ 522,474

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Subsequent Events Narrative (Details) $ / shares in Units, shares in Thousands, $ in Thousands	1 Months Ended	9 Months Ended
	Nov. 13, 2018 USD ($) property $ / shares shares	Sep. 30, 2018 USD ($)	Sep. 30, 2017 property
Subsequent Event [Line Items]
Redemptions of common stock		$ 8,536
Number of properties acquired | property			15
Subsequent Event
Subsequent Event [Line Items]
Redemptions of common stock (shares) | shares	135
Redemptions of common stock	$ 3,000
Stock redeemed or called during period, average price per share (USD per share) | $ / shares	$ 22.05
Share redemption program requests or redemptions unfulfilled (in shares) | shares	295
Number of properties acquired | property	1
Aggregate purchase price of acquired real estate assets	$ 15,100