As filed with the Securities and Exchange Commission on May 22, 2015

Registration No. 333-196302

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

 

Pre-Effective Amendment No. 1 to
Post-Effective Amendment No. 2

FORM S-11

FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933
OF SECURITIES OF CERTAIN REAL ESTATE COMPANIES

 

AMERICAN REALTY CAPITAL HEALTHCARE TRUST III, INC.

(Exact Name of Registrant as Specified in Governing Instruments)

 

405 Park Avenue, 14^th Floor
New York, New York 10022
(212) 415-6500

(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant’s Principal Executive Offices)

 

Thomas P. D’Arcy
Chief Executive Officer
AMERICAN REALTY CAPITAL HEALTHCARE TRUST III, INC.
405 Park Avenue, 14^th Floor
New York, New York 10022
(212) 415-6500

(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)

 

With Copies to:

Peter M. Fass, Esq. Proskauer Rose LLP Eleven Times Square New York, New York 10036 Tel: (212) 969-3000 Fax: (212) 969-2900		Michael J. Choate, Esq. Proskauer Rose LLP 70 West Madison #3800 Chicago, Illinois 60602-4342 Tel: (312) 962-3567 Fax: (312) 962-3551		James A. Tanaka, Esq. General Counsel RCS Capital 405 Park Avenue, 14th Floor New York, New York 10022 Tel: (212) 415-6500 Fax: (212) 421-5799

 

Approximate Date of Commencement of Proposed Sale to the Public: As soon as practicable after the effective date of this Registration Statement.

If any of the Securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. x

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. o

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

(Check one):

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

The registrant hereby amends this post-effective amendment to the above referenced registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment that specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

This Post-Effective Amendment No. 2 consists of the following:

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AMERICAN REALTY CAPITAL HEALTHCARE TRUST III, INC.
SUPPLEMENT NO. 16, DATED MAY 22, 2015,
TO THE PROSPECTUS, DATED AUGUST 20, 2014

This prospectus supplement, or this Supplement No. 16, is part of the prospectus of American Realty Capital Healthcare Trust III, Inc., or the Company, dated August 20, 2014, or the Prospectus. This Supplement No. 16 supersedes and replaces all previous supplements and should be read in conjunction with the Prospectus. This Supplement No. 16 will be delivered with the Prospectus. Unless the context suggests otherwise, the terms “we,” “us” and “our” used herein refer to the Company, together with its consolidated subsidiaries.

The purposes of this Supplement No. 16 are to:

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		Supplement No. 16 Page No.				Prospectus Page No.
Operating Information
Status of the Offering			S-1				N/A
Shares Currently Available for Sale			S-1				N/A
Management Updates			S-1				N/A
Engagement of Deloitte & Touche, LLP			S-1				N/A
Engagement of KPMG LLP as Independent Registered Public Accounting Firm			S-2				N/A
Status of Distributions			S-2				N/A
Share Repurchase Program			S-2				N/A
Status of Fees Paid and Deferred			S-3				N/A
Real Estate Investment Summary			S-4				N/A
Selected Financial Data			S-5				N/A
Independence from Accounting Issues Identified by American Realty Capital Properties, Inc.			S-6				N/A
Prospectus Updates
Cover Page			S-7				Cover Page
Investor Suitability Standards			S-7				i-iv
Cautionary Note Regarding Forward-Looking Statements			S-8				v
Prospectus Summary			S-9				1-4, 7, 10, 12, 17-19, 27
Risk Factors			S-13				39, 41-42, 58
Market Overview			S-15				82
Management			S-21				91-94, 100-103, 105
Management Compensation			S-28				107, 113-115
Conflicts of Interest			S-30				127, 133
Investment Strategy, Objectives and Policies			S-31				141, 147, 149
Valuation Policies			S-32				152-153
Description of Real Estate Investments			S-33				N/A
Prior Performance Summary			S-37				168-175
Summary of Partnership Agreement of our Operating Partnership			S-49				221, 226
Plan of Distribution			S-50				230, 234, 236, 246
How to Subscribe			S-51				236
Experts			S-51				240
Change in Auditor			S-51				N/A
Annex A — Annual Report on Form 10-K for the fiscal year ended December 31, 2014
Annex B — Quarterly Report on Form 10-Q for the quarter ended March 31, 2015
Appendix A — Prior Performance Tables			A-1				A-1
Appendix C-1 — Subscription Agreement			C-1-1				C-1
Appendix C-2 — Multi-Offering Subscription Agreement			C-2-1				N/A

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OPERATING INFORMATION

Status of the Offering

We commenced our reasonable best efforts initial public offering of up to 125.0 million shares of common stock (excluding shares to be issued under the distribution reinvestment plan, or DRIP) on August 20, 2014. On February 11, 2015, we satisfied the general escrow conditions of our public offering of common stock. On such date, we received and accepted aggregate subscriptions in excess of $2.0 million of common stock, broke general escrow and issued shares of our common stock to our initial investors. Subscriptions from residents of Pennsylvania will be held in escrow until we have received aggregate subscriptions of at least $156.25 million in aggregate subscriptions from all investors. On March 20, 2015, we received and accepted aggregate subscriptions in excess of $10,000,000 of common stock, the minimum offering amount needed in order to release from escrow proceeds received from Washington residents and issue shares of the Company’s stock to such investors.

We will offer shares of our common stock until August 20, 2016, unless the offering is extended in accordance with the Prospectus, provided that the offering will be terminated if all 125.0 million shares of our common stock are sold before such date (subject to our right to reallocate shares offered pursuant to the DRIP for sale in our primary offering).

Shares Currently Available for Sale

As of May 15, 2015, we received aggregate gross proceeds of $51.0 million, which includes the sale of 2.1 million shares of common stock in our initial public offering and $0.1 million from our DRIP. As of May 15, 2015, there were 2.1 million shares of our common stock outstanding, including shares issued under the DRIP and unvested restricted stock. As of May 15, 2015, there were 122.9 million shares of our common stock available for sale, excluding shares available under our DRIP.

Management Updates

On November 12, 2014, in light of his appointment as chief executive officer of RCS Capital Corporation, Mr. Edward M. Weil, Jr. resigned from his role as president, treasurer and secretary of the Company, effective as of that same date. Mr. Weil did not resign pursuant to any disagreement with the Company. Mr. Weil also resigned from his role as president, treasurer and secretary of the Company’s advisor and property manager. Simultaneously with Mr. Weil’s resignation from his role as president, treasurer and secretary of the Company, the Company’s board of directors, or the Board, appointed Thomas P. D’Arcy, the chief executive officer of the Company, to serve as the Company’s president and secretary, effective as of that same date, and to continue to serve in his capacity as chief executive officer of the Company. Mr. D’Arcy also replaced Mr. Weil as president and secretary of the Company’s advisor and property manager. Also simultaneously with Mr. Weil’s resignation from his role as president, treasurer and secretary of the Company, the Board appointed Edward F. Lange, Jr., the chief financial officer and chief operating officer of the Company, to serve as the Company’s treasurer, effective as of that same date, and to continue to serve in his capacity as chief financial officer and chief operating officer of the Company. Mr. Lange also replaced Mr. Weil as treasurer of the Company’s advisor and property manager.

On December 29, 2014, the Board implemented certain changes to the composition of the Board consistent with its sponsor’s year-long initiative to further enhance the corporate governance profiles of its various sponsored programs, including promoting or appointing experienced management, mitigating potential conflicts, reducing complexity and minimizing overlap among directors of its sponsored programs. As part of these changes, on December 29, 2014, the Board appointed William M. Kahane to serve as a director and as executive chairman of the Board effective as of that same date. In connection with Mr. Kahane’s appointment as a director and as executive chairman of the Board, Nicholas S. Schorsch resigned from his role as executive chairman of the Board. Mr. Schorsch did not resign pursuant to any disagreement with the Company.

Engagement of Deloitte & Touche, LLP

On December 11, 2014, AR Capital, LLC, the parent of our sponsor, announced that it will engage Deloitte & Touche, LLP, or Deloitte, to provide outsourced internal audit services on behalf of the publicly registered, nontraded companies that AR Capital, LLC directly or indirectly sponsors, including us. Pursuant

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to the engagement, Deloitte will work with our management to develop an annual risk-based internal audit work plan and budget which will be presented to our audit committee for approval, provide our audit committee with a quarterly update on its work and formally report the results of its work to our audit committee.

Engagement of KPMG LLP as Independent Registered Public Accounting Firm

On January 22, 2015, Grant Thornton LLP, or Grant Thornton, resigned as our independent registered public accounting firm. Grant Thornton’s resignation was accepted by our audit committee.

Grant Thornton’s audit report on our consolidated financial statements for the period from April 24, 2014 to May 21, 2014 did not contain an adverse opinion or disclaimer of opinion, nor was it qualified or modified as to uncertainty, audit scope or accounting principles.

Since our establishment in April 2014 and through the end of the fiscal year ended December 31, 2014 and the subsequent interim period from January 1, 2015 through January 22, 2015, (i) there were no disagreements between us and Grant Thornton on any matters of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Grant Thornton, would have caused Grant Thornton to make reference to the subject matter of the disagreement in its report on our consolidated financial statements, and (ii) there were no “reportable events” as that term is defined in Item 304(a)(1)(v) of Regulation S-K.

We have provided Grant Thornton with a copy of the foregoing statements and have requested and received from Grant Thornton a letter addressed to the Securities and Exchange Commission stating that Grant Thornton agrees with the above statements.

On February 2, 2015, we engaged KPMG LLP, or KPMG, as our new independent registered public accounting firm for the fiscal year ended December 31, 2014. Our audit committee participated in and approved the decision to appoint KPMG.

Since our establishment in April 2014 and through the end of the fiscal year ended December 31, 2014 and the subsequent interim period from January 1, 2015 through February 2, 2015, neither we nor anyone acting on behalf of us, consulted KPMG regarding (i) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on our financial statements, and neither a written report nor oral advice was provided to us that KPMG concluded was an important factor considered by us in reaching a decision as to the accounting, auditing or financial reporting issue; or (ii) any matter that was either the subject of a disagreement (as defined in paragraph (a)(1)(iv) of Item 304 of Regulation S-K and the related instructions thereto) or a reportable event (as described in paragraph (a)(1)(v) of Item 304 of Regulation S-K).

Status of Distributions

On January 29, 2015, our board of directors authorized, and we declared, distributions payable to stockholders of record each day during the applicable period equal to $0.0042808219 per day per share of common stock. Distributions began to accrue on March 15, 2015. Distributions are payable by the fifth day following each month end to stockholders of record at the close of business each day during the prior month.

As of March 31, 2015, we had not paid any distributions. Our first distribution was paid on April 1, 2015 to stockholders of record at March 31, 2015. We have continued to pay distributions to our stockholders each month since our initial distribution payment.

Share Repurchase Program (“SRP”)

Our board of directors has adopted a SRP that enables stockholders to sell their shares to us in limited circumstances. The SRP permits investors to sell their shares back to us after they have held them for at least one year, subject to significant conditions and limitations described below.

Prior to the time that our shares are listed on a national securities exchange and until we begin to calculate our net asset value, or NAV, the repurchase price per share will depend on the length of time investors have held such shares as follows: after one year from the purchase date — the lower of $23.13 or

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92.5% of the amount they actually paid for each share; after two years from the purchase date — the lower of $23.75 or 95% of the amount they actually paid for each share; after three years from the purchase date — the lower of $24.38 or 97.5% of the amount they actually paid for each share; and after four years from the purchase date — the lower of $25.00 or 100.0% of the amount they actually paid for each share (in each case, as adjusted for any stock distributions, combinations, splits and recapitalizations).

Once we begin to calculate NAV, the price per share that we will pay to repurchase our shares will be our per share NAV of common stock for the quarter. Subject to limited exceptions, stockholders who redeem their shares of our common stock within the first four months from the date of purchase will be subject to a short-term trading fee of 2% of the aggregate per share NAV of the shares of common stock received. Because our per share NAV will be calculated quarterly, the repurchase price may fluctuate between the redemption request day and the date on which we pay redemption proceeds.

We are only authorized to repurchase shares pursuant to the SRP using the proceeds received from the DRIP and will limit the amount spent to repurchase shares in a given quarter to the amount of proceeds received from the DRIP in that same quarter. In addition, the board of directors may reject a request for redemption at any time. Due to these limitations, we cannot guarantee that we will be able to accommodate all repurchase requests. Purchases under the SRP by us will be limited in any calendar year to 5% of the weighted average number of shares outstanding on December 31 of the previous calendar year.

When a stockholder requests a repurchase and the repurchase is approved, we will reclassify such obligation from equity to a liability based on the settlement value of the obligation. Shares purchased under the SRP will have the status of authorized but unissued shares. At March 31, 2015, no shares had been redeemed.

The SRP will immediately terminate if our shares are listed on any national securities exchange. In addition, our board of directors may amend, suspend (in whole or in part) or terminate the SRP at any time upon 30 days’ prior written notice to our stockholders. Further, our board of directors reserves the right, in its sole discretion, to reject any requests for repurchases.

Status of Fees Paid and Deferred

The following table reflects the fees and expense reimbursements incurred, forgiven and unpaid to our dealer manager and advisor as of and for the periods presented (in thousands):

(In thousands)		Incurred for the Three Months Ended March 31, 2015				Forgiven for the Three Months Ended March 31, 2015				Unpaid as of March 31, 2015				Incurred for the Period from April 24, 2014 (date of inception) to December 31, 2014				Forgiven for the Period from April 24, 2014 (date of inception) to December 31, 2014				Unpaid as of December 31, 2014
Offering Stage
Selling commissions and dealer manager fees		$	1,214			$	—			$	159			$	—			$	—			$	—
Offering costs reimbursements			366				—				476				685				—				685
Operational Stage
Acquisition fees			25				—				—				—				—				—
Acquisition cost reimbursements			8				—				—				—				—				—
Professional fees and reimbursements			65				—				65				—				—				—
		$	1,678			$	—			$	700			$	685			$	—			$	685

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Real Estate Investment Summary

We acquire and operate healthcare-related assets including medical office buildings, seniors housing communities and other healthcare-related facilities. As of May 4, 2015, the company owned three properties, which were 100% leased. Our portfolio of real estate properties was comprised of the following properties as of May 4, 2015:

Portfolio		Acquisition Date				Number of Properties				Rentable Square Feet				Occupancy				Remaining Lease Term(1)				Base Purchase Price(2)
																						(In thousands)
DaVita Bay Breeze –  Largo, FL			Mar. 2015				1				7,247				100	%			12.1			$	1,650
RAI Clearwater –  Clearwater, FL			Apr. 2015				1				14,936				100	%			9.6				4,750
DaVita Hudson –  Hudson, FL			May 2015				1				8,984				100	%			9.4				2,725
							3				31,167				100	%			10.0			$	9,125

Future Lease Expirations

The following is a summary of lease expirations for the next ten years at the properties we own as of May 4, 2015:

Year of Expiration		Number of Leases Expiring				Annualized Rental Income(1)				Annualized Rental Income as a Percentage of the Total Portfolio				Leased Rentable Sq. Ft.				Percent of Portfolio Rentable Sq. Feet Expiring
						(In thousands)
2015			—				—				—	%			—				—	%
2016			—				—				—	%			—				—	%
2017			—				—				—	%			—				—	%
2018			—				—				—	%			—				—	%
2019			—				—				—	%			—				—	%
2020			—				—				—	%			—				—	%
2021			—				—				—	%			—				—	%
2022			—				—				—	%			—				—	%
2023			—				—				—	%			—				—	%
2024			5				539				80.7	%			23,920				76.7	%
2025			—				—				—	%			—				—	%
			5				539				80.7	%			23,920				76.7	%

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Tenant Concentration

As of May 4, 2015, each of the following tenants (including, for this purpose, all affiliates of such tenant) represented greater than 10% of total portfolio rentable square footage:

Tenant		Number of Units Occupied by Tenant				Square Feet				Square Feet as a % of Total Portfolio				Lease Expiration				Average Remaining Lease Term(1)				Renewal Options				Annualized Rental Income(2)				Annualized Rental Income(2) per Sq. Ft.
																										(In thousands)
DaVita Healthcare Partners, Inc.			2				12,656				40.6	%			Jun. 2024, Jun. 2027				10.7				2 and 3 five-year options			$	247			$	19.52
Fresenius Medical Care AG & Co.			1				9,216				29.6	%			Dec. 2024				9.6				3 five-year options			$	177			$	19.21
Renal Hypertension Center			3				9,295				29.8	%			Nov. 2024, Dec. 2024				9.6				1 five year option			$	243			$	26.14

Selected Financial Data

The following selected financial data is and for the periods presented (in thousands, except share and per share data):

Balance sheet data		March 31, 2015				December 31, 2014
Total real estate investments, at cost		$	1,738			$	—
Total assets			13,966				246
Total liabilities			2,268				2,250
Total stockholders’ equity			11,698				(2,274	)

Operating data (in thousands, except share and per share data)		Three Months Ended March 31, 2015
Total revenues		$	11
Expenses:
Property operating			2
Acquisition and transaction related			48
General and administrative			276
Depreciation and amortization			4
Total expenses			330
Operating loss			(319	)
Net loss		$	(319	)
Other data:
Cash flows used in operating activities		$	(140	)
Cash flows used in investing activities			(1,650	)
Cash flows provided by financing activities			10,073
Per share data:
Basic and diluted net loss per share		$	(1.94	)
Basic and diluted weighted average shares outstanding			164,258

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Independence from Accounting Issues Identified by American Realty Capital Properties, Inc.

Since the announcement on October 29, 2014, by American Realty Capital Properties, Inc., or ARCP, a publicly-traded REIT previously sponsored by the parent of our sponsor, relating to certain ARCP accounting misstatements, our sponsor and our dealer manager have engaged in continuous dialogue with soliciting dealers through which our offering is distributed to clarify that ARCP is a separate publicly-listed company and is not affiliated with us, and we and ARCP have independent accounting teams and no overlapping accounting and control systems. Our sponsor and dealer manager believe that the independent broker-dealer community remains supportive of direct investment products sponsored by our sponsor, including our offering, and are providing soliciting dealers with requested information in order to maintain distribution relationships.

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PROSPECTUS UPDATES

Each occurrence of the phrase “Asset Management Subordinated Participation” throughout the Prospectus is deleted in its entirety and the phrase “Asset Management Subordinated Deferred Participation” is inserted in lieu thereof.

Each occurrence of “American Realty Capital Healthcare Trust III Operating Partnership, L.P.” throughout the Prospectus is deleted in its entirety and “American Realty Capital Healthcare III Operating Partnership, L.P.” is inserted in lieu thereof.

Cover Page

The sixth sentence of the first paragraph on the cover page of the Prospectus is hereby replaced in its entirety with the following disclosure.

“Beginning with the NAV pricing date (as described below), the per share price for shares in our primary offering and our DRIP will vary quarterly and will be equal to our per share net asset value, or NAV, as determined by our advisor, divided by the number of shares of our common stock outstanding as of the end of the business day immediately preceding the day on which we make our quarterly periodic filing, plus, in the case of our primary offering, applicable commissions and fees. For purposes of this prospectus, the NAV pricing date means the date we first publish an estimated per share NAV, which will be on or prior to July 11, 2017, which is 150 days following the second anniversary of the date that we broke escrow in this offering. If, due to rules adopted by the Financial Industry Regulatory Authority, or FINRA, contractual obligations in the selling agreements between our participating broker dealers and our dealer manager, or rules that may be adopted by the SEC or the states, we publish an estimated per share value during this offering, then our board of directors may change the offering price of shares offered in the primary offering as well as the price at which shares are being offered pursuant to our DRIP. We will file a post-effective amendment to this registration statement to reflect any change in the price, after the NAV pricing date, that is more than 20% higher or lower than the $25.00 per share or $23.75 per share price, as applicable, listed in this offering or pursuant to our DRIP.”

Investor Suitability Standards

The bullet under the section entitled “Investor Suitability Standards — Alabama” on page i of the Prospectus is hereby replaced with the following disclosure.

“In addition to the general suitability standards, this investment will only be sold to Alabama residents that have a liquid net worth of at least 10 times their investment in this program and its affiliates.”

The bullet under the section entitled “Investor Suitability Standards — Nebraska” on page ii of the Prospectus is hereby replaced with the following disclosure.

“Nebraska investors must have either (a) a minimum net worth of at least $70,000 and a minimum annual gross income of not less than $100,000, or (b) a minimum net worth of $350,000. A Nebraska investor’s investment in us and in other non-publicly traded real estate investment trusts and other non-publicly traded direct participation programs (including oil and gas programs, equipment leasing programs, business development companies (BDCs) and commodity pools) may not exceed ten percent (10%) of his or her net worth. An investment by a Nebraska investor that is an accredited investor within the meaning of the Federal securities laws is not subject to the foregoing limitations.”

The bullet under the section entitled “Investor Suitability Standards — Ohio” on page iii of the Prospectus is hereby replaced with the following disclosure.

“Investors must have either (a) a minimum net worth of at least $250,000 or (b) an annual gross income of at least $70,000 and a net worth of at least $70,000. It shall be unsuitable for an Ohio investor’s aggregate investment in us, shares of our affiliates, and in other non-traded real estate investment trusts to exceed ten percent (10%) of his or her liquid net worth. “Liquid net worth” shall be defined as that portion of net worth (total assets exclusive of primary residence, home furnishings and automobiles minus total liabilities) that is comprised of cash, cash equivalents, and readily marketable securities.”

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The bullet under the section entitled “Investor Suitability Standards — Pennsylvania” on page iii of the Prospectus is hereby replaced with the following disclosure.

“The maximum investment allowable in us for a Pennsylvania investor is 10% of his or her net worth. We will not release from escrow any proceeds received from Pennsylvania residents unless and until we raise a minimum of $156,250,000 in aggregate gross offering proceeds from all investors pursuant to this offering.”

The disclosure under the section entitled “Investor Suitability Standards — Tennessee” on page iii of the Prospectus is hereby replaced with the following disclosure.

“A Tennessee resident’s investment in us must not exceed 10% of his or her liquid net worth (exclusive of home, home furnishings and automobile). In addition to: either (i) having a net worth (excluding home, home furnishings, and automobiles), of at least $70,000 and a gross income of at least $70,000; or (ii) having a net worth (excluding home, home furnishings, and automobiles) of at least $250,000, a Tennessee resident’s maximum investment in us shall not exceed 10% of his or her liquid net worth (excluding home, home furnishings, and automobiles).”

The fourth paragraph on page iv of the Prospectus is hereby replaced with the following disclosure.

“In order to ensure adherence to the suitability standards described above, requisite criteria must be met, as set forth in the subscription agreement in the form attached hereto as Appendix C-1. In addition, our sponsor, our dealer manager and the soliciting dealers, as our agents, must make every reasonable effort to determine that the purchase of our shares is a suitable and appropriate investment for an investor. In making this determination, the soliciting dealers will rely on relevant information provided by the investor in the investor’s subscription agreement, including information regarding the investor’s age, investment objectives, investment experience, income, net worth, financial situation, other investments and any other pertinent information, including whether (i) the participant is or will be in a financial position appropriate to enable him to realize the benefits described in the prospectus, (ii) the participant has a fair market net worth sufficient to sustain the risks inherent in the investment program, and (iii) the investment program is otherwise suitable for the participant. Alternatively, except for investors in Alabama, Arkansas, Kentucky, Maryland, Massachusetts, Nebraska, New Jersey, North Carolina, Oregon or Tennessee, the requisite criteria may be met using the multi-offering subscription agreement in the form attached hereto as Appendix C-2, which may be used to purchase shares in this offering as well as shares of other products distributed by our dealer manager; provided, that an investor has received the relevant prospectus(es) and meets the requisite criteria and suitability standards for any such other product(s). Executed subscription agreements will be maintained in our records for six (6) years.”

Cautionary Note Regarding Forward-Looking Statements

The following is added as the penultimate paragraph under the section entitled “Cautionary Note Regarding Forward-Looking Statements” on page v of the Prospectus.

“This prospectus contains estimates and other statistical data that we obtained or derived from, or that we estimated in good faith based partly on, industry publications, surveys, forecasts and reports, governmental publications, reports by market research firms or other independent sources. Industry publications generally indicate that they have obtained their information from sources believed to be reliable, but do not guarantee the accuracy and completeness of their information. This information involves a number of assumptions and limitations, and you are cautioned not to give undue weight to these estimates. Although we have not independently verified the accuracy or completeness of the data contained in these industry publications and reports, based on our industry experience we believe that the publications are reliable and the conclusions contained in the publications and reports are reasonable.”

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Prospectus Summary

The last sentence of the first paragraph under the question “What is American Realty Capital Healthcare Trust III, Inc.?” on page 1 of the Prospectus is hereby replaced with the following disclosure.

“We may acquire undeveloped land or substantially redevelop existing properties with an aggregate value of up to 10% of the value of our total assets, or enter into joint ventures to do the same.”

The second paragraph under the question “What is American Realty Capital Healthcare Trust III, Inc.?” on page 1 of the Prospectus is hereby replaced with the following disclosure.

We are one of 15 publicly offered, non-traded REITs sponsored or co-sponsored by the American Realty Capital group of companies, including: Phillips Edison Grocery Center REIT, Inc., a Maryland corporation organized as Phillips Edison — ARC Shopping Center REIT Inc. on October 13, 2009, or PECO; American Realty Capital — Retail Centers of America, Inc., a Maryland corporation organized on July 29, 2010, or ARC RCA; American Realty Capital Daily Net Asset Value Trust, Inc., a Maryland corporation organized on September 10, 2010, or ARC DNAV; Global Net Lease, Inc., a Maryland corporation organized on July 13, 2011, or GNL; American Realty Capital Healthcare Trust II, Inc., a Maryland corporation organized on October 15, 2012, or ARC HT II; Realty Finance Trust, Inc., a Maryland corporation organized on November 15, 2012, or RFT; American Realty Capital Trust V, Inc., a Maryland corporation organized on January 22, 2013, or ARCT V; Phillips Edison Grocery Center REIT II, Inc., a Maryland corporation organized as Phillips Edison — ARC Grocery Center REIT II, Inc. on June 5, 2013, or PECO II; American Realty Capital Hospitality Trust, Inc., a Maryland corporation organized on July 25, 2013, or ARC HOST; United Development Funding Income Fund V, a Maryland corporation organized on October 1, 2013, or UDF V; American Realty Capital New York City REIT, Inc., a Maryland corporation organized on December 19, 2013, or ARC NYCR; American Realty Capital Global Trust II, Inc., a Maryland corporation organized on April 23, 2014, or ARC Global II; American Realty Capital — Retail Centers of America II, Inc., a Maryland corporation organized on April 23, 2014, or ARC RCA II; American Realty Capital New York City REIT II, Inc., a Maryland corporation organized on July 1, 2014, or ARC NYCR II. Additionally, the American Realty Capital group of companies is the sponsor of one New York Stock Exchange-listed REIT, New York REIT, Inc. (formerly American Realty Capital New York Recovery REIT, Inc.), or NYRT. The American Realty Capital group of companies is also the co-sponsor of two business development companies, Business Development Corporation of America, a Maryland corporation organized on May 5, 2010, or BDCA, and Business Development Corporation of America II, a Maryland corporation organized on April 17, 2014, or BDCA II, and a non-traded oil and gas limited partnership, American Energy Capital Partners — Energy Recovery Program, LP, a Delaware limited partnership organized on October 30, 2013, or AERP. An American Realty Capital company also advises BDCA Venture Inc., a business development company organized as a Maryland corporation on May 9, 2008 and listed on the NASDAQ Capital Market since December 2011.

The following disclosure replaces the disclosure set forth under the question “What is the experience of your investment team?” on page 2 of the Prospectus.

“Our real estate team is led by seasoned professionals who have institutional experience investing through various real estate cycles. Our chief executive officer, president and secretary, Thomas P. D’Arcy, has more than 28 years of commercial real estate experience. In addition, our chief investment officer, W. Todd Jensen, has more than 26 years of real estate experience and our chief financial officer, chief operating officer and treasurer, Edward F. Lange, Jr., has over 20 years of real estate experience. See “Management —  Executive Officers and Directors.””

The following disclosure is added as the last sentence of the paragraph sunder the question “Who is your sponsor?” on page 3 of the Prospectus.

“For information on the experience of our sponsor, see “Prior Performance Summary” and “Appendix A — Prior Performance Tables.””

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The following disclosure is added at the end of the paragraph under the question “How does a “reasonable best efforts” offering work?” on page 4 of the Prospectus.

“RCS Capital Corporation, or RCAP, an entity under common control with the parent of our sponsor, has assembled a retail advice platform consisting of various retail broker dealer businesses. One or more of those broker dealers may become a soliciting dealer for this offering and act as a soliciting dealer for other offerings sponsored directly or indirectly by the parent of our sponsor.”

The first sentence under the question “How will your advisor calculate per share NAV?” on page 4 of the Prospectus is hereby replaced with the following disclosure.

“Commencing with the initial NAV pricing date and on each pricing date thereafter (unless we list our common stock on a national securities exchange), our advisor will be responsible for calculating our quarterly NAV at the end of each business day on which we make our quarterly financial filing.”

The following disclosure is added as the last bullet under the question “Are there any risks involved in buying our shares?” on page 7 of the Prospectus.

The following bullets are hereby added as the last bullets under the question “What conflicts of interest will your advisor and its affiliates face?” on page 10 of the Prospectus.

The first paragraph under the question “What are the fees and other amounts that you will pay to the advisor, its affiliates, the dealer manager and your directors?” on page 12 of the Prospectus is hereby replaced with the following disclosure.

“What are the fees and other amounts that you will pay to the advisor, its affiliates, the dealer manager and your directors?

Our advisor and its affiliates receive compensation and reimbursement of expenses for services relating to this offering and the investment and management of our assets. During the period from our inception on April 24, 2014 through March 31, 2015, the amount of compensation, fees, distributions and expense reimbursements that we paid or reimbursed to the respective affiliates of our sponsor including our advisor (and its affiliates) and our dealer manager was $2.4 million. In addition, as of March 31, 2015, $0.7 million was accrued and unpaid. We may reimburse our advisor for compensation, including salary, bonuses and related benefits, paid to certain of its employees. We do not, and will not, however, reimburse our advisor or its affiliates for any compensation paid or payable to our executive officers. The most significant items of compensation and reimbursement are included in the table below. Except if a form of payment or distribution is specifically provided for, our advisor may, in its sole discretion, elect to have certain fees and commissions paid, in whole or in part, in cash or shares of our common stock. The selling commissions and dealer manager fee may vary for different categories of purchasers. The table below assumes the shares are sold through distribution channels associated with the highest possible selling commissions and dealer manager fees. No effect is given to any shares sold through our DRIP. To the extent we enter into a joint venture agreement, our advisor will be compensated on the same basis described below proportionately with our interest in the joint venture.”

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The disclosure relating to the Asset Management Subordinated Participation on pages 17 – 19 of the Prospectus is hereby deleted in its entirety and replaced with the following disclosure.

“Type of Compensation		Determination of Amount		Estimated Amount for Minimum Offering (80,000 shares)/ Maximum Offering (125,000,000 shares)
Asset Management Subordinated Deferred Participation		Within 30 days after the end of each calendar quarter (subject to the approval of the board of directors), we, as the general partner of the operating partnership, will cause the operating partnership to issue a number of restricted operating partnership units designated as Class B Units of our operating partnership, or Class B Units, to our advisor equal to: (i) the excess of (A) the product of (y) 0.1875% multiplied by (z) the cost of our assets (until the NAV pricing date, then the lower of the cost of assets and the fair value of our assets) less (B) any amounts payable as an oversight fee (as described below) for such calendar quarter; divided by (ii) the value of one share of common stock as of the last day of such calendar quarter, which is equal initially to $22.50 (the primary offering price minus selling commissions and dealer manager fees) and, at such time as we estimate NAV, to per share NAV; provided, however, that if the amounts payable as an oversight fee for such calendar quarter exceed the amount determined under clause (A) for such calendar quarter, or an excess oversight fee, no Class B Units may be issued for such calendar quarter and the excess oversight fee will be carried forward to the next succeeding calendar quarter and included with and treated as amounts payable as an oversight fee for the next succeeding quarter for purposes of determining the amount of restricted Class B Units issuable for the next succeeding calendar quarter; provided further, however, that the sum of (I) the amounts determined under clause (i) above for a calendar year plus (II) the amounts payable as an oversight fee for such calendar year, will not be less than 0.75% of the cost of assets (or the lower of the cost of assets and the fair value of our assets for such calendar year, once we begin to calculate NAV).(2)		Not determinable at this time. Because the subordinated deferred participation is based on a fixed percentage of aggregate asset value, there is no maximum dollar amount of this participation.”

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“Type of Compensation		Determination of Amount		Estimated Amount for Minimum Offering (80,000 shares)/ Maximum Offering (125,000,000 shares)
		Our advisor is entitled to receive distributions on the vested and unvested Class B units it receives in connection with its asset management subordinated deferred participation at the same rate as distributions received on our common stock; these distributions will be in addition to the incentive fees and other participations the advisor and its affiliates may receive from us, including, without limitation, the annual subordinated performance fee and the subordinated participation in net sales proceeds, the subordinated incentive listing distribution or the subordinated distribution upon termination of the advisory agreement, as applicable.
		Class B Units are subject to forfeiture until such time as any one of the following events occurs: (i) a listing of our common stock on a national securities exchange; (ii) a transaction to which we or our operating partnership is a party, as a result of which OP Units or our common stock are or will be exchanged for or converted into the right, or the holders of such securities will otherwise be entitled, to receive cash, securities or other property or any combination thereof; or (iii) the termination of the advisory agreement without cause by an affirmative vote of a majority of our independent directors; provided that the advisor pursuant to the advisory agreement is providing services to us immediately prior to the occurrence of an event of the type described herein, unless the failure to provide such services is attributable to the termination without cause of the advisory agreement by an affirmative vote of a majority of our independent directors.
		Any outstanding Class B Units will be forfeited immediately if the advisory agreement is terminated for any reason other than a termination without cause.

The question “How do I subscribe for shares?” on page 27 of the Prospectus is hereby deleted in its entirety and replaced with the following disclosure.

“How do I subscribe for shares?

If you choose to purchase shares in this offering and you are not already a stockholder, you will need to complete and sign the subscription agreement in the form attached hereto as Appendix C-1 for a specific number of shares and pay for the shares at the time you subscribe. Alternatively, unless you are an investor in Alabama, Arkansas, Kentucky, Maryland, Massachusetts, Nebraska, New Jersey, North Carolina, Oregon or Tennessee, you may complete and sign the multi-offering subscription agreement in the form attached hereto as Appendix C-2, which may be used to purchase shares in this offering as well as shares of other products distributed by our dealer manager; provided, however, that an investor has received the relevant prospectus(es) and meets the requisite criteria and suitability standards for any such other product(s).”

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Risk Factors

The following disclosure is hereby inserted as a new risk factor under the section “Risk Factors — Risks Related to an Investment in American Realty Capital Healthcare Trust III, Inc.” on page 39 of the Prospectus.

“Disclosures made by American Realty Capital Properties, Inc., or ARCP, an entity previously sponsored by the parent of our sponsor, may adversely affect our ability to raise substantial funds.

On October 29, 2014, ARCP announced that its audit committee had concluded that the previously issued financial statements and other financial information contained in certain public filings should no longer be relied upon. This conclusion was based on the preliminary findings of an investigation conducted by ARCP’s audit committee which concluded that certain accounting errors were made by ARCP personnel that were not corrected after being discovered, resulting in an overstatement of adjusted funds from operations, or AFFO, and an understatement of ARCP’s net loss for the three and six months ended June 30, 2014. ARCP also announced the resignation of its chief accounting officer and its chief financial officer. ARCP’s former chief financial officer is one of the non-controlling owners of the parent of our sponsor, but does not have a role in managing our business or our sponsor’s business. In December 2014, ARCP announced the resignation of its executive chairman, who was also the executive chairman of our board of directors until his resignation on December 29, 2014. This individual also is one of the controlling members of the parent of our sponsor.

On March 2, 2015, ARCP announced the completion of its audit committee’s investigation and filed amendments to its Form 10-K for the year ended December 31, 2013 and its Form 10-Q for the quarters ended March 31, 2014 and June 30, 2014. According to these filings, these amendments corrected errors in ARCP’s financial statements and in its calculation of AFFO that resulted in overstatements of AFFO for the years ended December 31, 2011, 2012 and 2013 and the quarters ended March 31, 2013 and 2014 and June 30, 2014 and described certain results of its investigations, including matters relating to payments to, and transactions with, affiliates of the parent of our sponsor and certain equity awards to certain officers and directors. In addition, ARCP disclosed that the audit committee investigation had found material weaknesses in ARCP’s internal control over financial reporting and its disclosure controls and procedures. ARCP also disclosed that the SEC has commenced a formal investigation, that the United States Attorney’s Office for the Southern District of New York contacted counsel for both ARCP’s audit committee and ARCP with respect to the matter and that the Secretary of the Commonwealth of Massachusetts has issued a subpoena for various documents. On March 30, 2015, ARCP filed its Form 10-K for the year ended December 31, 2014. ARCP's filings with the SEC are available at the internet site maintained by the SEC, www.sec.gov.

Since the initial announcement in October 2014, a number of participating broker-dealers temporarily suspended their participation in the distribution of our offering. Although certain of these broker-dealers have reinstated their participation, we cannot predict the length of time the remaining temporary suspensions will continue or whether all participating broker-dealers will reinstate their participation in the distribution of our offering. As a result, our ability to raise substantial funds may be adversely impacted.”

The following risk factor replaces in its entirety the risk factor “We will compete for investors with other programs of our sponsor, which could adversely affect the amount of capital we have to invest.” on page 41 of the Prospectus.

“Because other real estate programs sponsored directly or indirectly by the parent of our sponsor and offered through our dealer manager may conduct offerings concurrently with our offering, our sponsor and our dealer manager face potential conflicts of interest arising from competition among us and these other programs for investors and investment capital, and such conflicts may not be resolved in our favor.

The parent of our sponsor is the sponsor of several other REITs for which affiliates of our advisor are also advisors that are raising capital in ongoing public offerings of common stock similar to ours. Our dealer manager, which is owned by an entity under common control with the parent of our sponsor, is the dealer manager or is named in the registration statement as the dealer manager in a number of ongoing public offerings by REITs, including some offerings sponsored directly or indirectly by the parent of our sponsor. In addition, our sponsor may decide to sponsor future programs that would seek to raise capital through public offerings conducted concurrently with this offering.

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As a result, our sponsor and our dealer manager may face conflicts of interest arising from potential competition between us and these other programs for investors and investment capital. There may be periods during which one or more programs sponsored directly or indirectly by the parent of our sponsor will be raising capital and might compete with us for investment capital. Such conflicts may not be resolved in our favor, and you will not have the opportunity to evaluate the manner in which these conflicts of interest are resolved before or after making your investment.

We also will compete for investors with these other programs, and the overlap of these offerings with our offering could adversely affect our ability to raise all the capital we seek in this offering, the timing of sales of our shares and the amount of proceeds we have to invest in real estate assets.”

The following risk factor replaces in its entirety the risk factor “Our officers and directors face conflicts of interest related to the positions they hold with affiliated entities, which could hinder our ability to successfully implement our business strategy and to generate returns to you.” on page 41 of the Prospectus.

“All of our executive officers, some of our directors and the key real estate and other professionals assembled by our advisor, our property manager and our dealer manager face conflicts of interest related to their positions or interests in affiliates of our sponsor, which could hinder our ability to implement our business strategy and to generate returns to our stockholders.

All of our executive officers, some of our directors and the key real estate and other professionals assembled by our advisor, property manager and dealer manager are also executive officers, directors, managers, key professionals or holders of a direct or indirect controlling interests in our advisor, our property manager, our dealer manager or other sponsor-affiliated entities. Through our sponsor’s affiliates, some of these persons work on behalf of programs sponsored directly or indirectly by the parent of our sponsor that are currently raising capital publicly. As a result, they have loyalties to each of these entities, which loyalties could conflict with the fiduciary duties they owe to us and could result in action or inaction detrimental to our business. Conflicts with our business and interests are most likely to arise from (a) allocation of new investments and management time and services between us and the other entities, (b) our purchase of properties from, or sale of properties to, affiliated entities, (c) development of our properties by affiliates, (d) investments with affiliates of our advisor, (e) compensation to our advisor and (f) our relationship with our advisor, our dealer manager and our property manager. If we do not successfully implement our business strategy, we may be unable to generate the cash needed to make distributions to our stockholders and to maintain or increase the value of our assets.”

The following risk factor replaces in its entirety the risk factor “Our advisor and its affiliates face conflicts of interest relating to the incentive fee structure, which could result in actions that are not necessarily in the long-term best interests of our stockholders.” on page 42 of the Prospectus.

“The conflicts of interest inherent in the incentive fee structure of our arrangements with our advisor and its affiliates could result in actions that are not necessarily in the long-term best interests of our stockholders, including required payments if we terminate the advisory agreement, even for poor performance by our advisor.

Under our advisory agreement and the limited partnership agreement of our operating partnership, or the partnership agreement, the special limited partner and its affiliates are entitled to fees, distributions and other amounts that are structured in a manner intended to provide incentives to our advisor to perform in our best interests. However, because our advisor does not maintain a significant equity interest in us and is entitled to receive substantial minimum compensation regardless of performance, its interests may not be wholly aligned with those of our stockholders. In that regard, our advisor could be motivated to recommend riskier or more speculative investments in order for us to generate the specified levels of performance or sales proceeds that would entitle it or the special limited partner to fees. In addition, the special limited partner and its affiliates’ entitlement to fees and distributions upon the sale of our assets and to participate in sale proceeds could result in our advisor recommending sales of our investments at the earliest possible time at which sales of investments would produce the level of return that would entitle our advisor and its affiliates, including the special limited partner, to compensation relating to such sales, even if continued ownership of those investments might be in our best long-term interest.

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Moreover, the partnership agreement requires our operating partnership to pay a performance-based termination distribution to the special limited partner or its assignees if we terminate the advisory agreement, even for poor performance by our advisor, prior to the listing of our shares for trading on an exchange or, absent such listing, in respect of its participation in net sales proceeds. To avoid paying this distribution, our independent directors may decide against terminating the advisory agreement prior to our listing of our shares or disposition of our investments even if, but for the termination distribution, termination of the advisory agreement would be in our best interest. Similarly, because this distribution would still be due even if we terminate the advisory agreement for poor performance, our advisor may be incentivized to focus its resources and attention on other matters or otherwise fail to use its best efforts on our behalf.

In addition, the requirement to pay the distribution to the special limited partner or its assignees at termination could cause us to make different investment or disposition decisions than we would otherwise make, in order to satisfy our obligation to pay the distribution to the special limited partner or its assignees. Moreover, our advisor has the right to terminate the advisory agreement upon a change of control of our company and thereby trigger the payment of the termination distribution, which could have the effect of delaying, deferring or preventing the change of control. In addition, our advisor will be entitled to an annual subordinated performance fee such that for any year in which investors receive payment of a 6.0% annual cumulative, pre-tax, non-compounded return on the capital contributed by investors, our advisor is entitled to 15.0% of the amount in excess of such 6.0% per annum return, provided that the amount paid to our advisor does not exceed 10.0% of the aggregate return for such year, and that the amount, while accruing annually in each year the 6.0% return is attained, will not actually be paid to our advisor unless investors receive a return of capital contributions, which could encourage our advisor to recommend riskier or more speculative investments.”

The following risk factor replaces in its entirety the paragraph under the heading “Potential changes in U.S. accounting standards regarding operating leases may make the leasing of our properties less attractive to our potential tenants, which could reduce overall demand for our leasing services.” beginning on page 58 of the Prospectus.

“Under current authoritative accounting guidance for leases, a lease is classified by a tenant as a capital lease if the significant risks and rewards of ownership are considered to reside with the tenant. Under capital lease accounting for a tenant, both the leased asset and liability are reflected on their balance sheet. If the lease does not meet any of the criteria for a capital lease, the lease is considered an operating lease by the tenant, and the obligation does not appear on the tenant’s balance sheet; rather, the contractual future minimum payment obligations are only disclosed in the footnotes thereto. Thus, entering into an operating lease can appear to enhance a tenant’s balance sheet in comparison to direct ownership. The Financial Accounting Standards Board, or the FASB, and the International Accounting Standards Board, or the IASB, conducted a joint project to reevaluate lease accounting. In June 2013, the FASB and the IASB jointly finalized exposure drafts of a proposed accounting model that would significantly change lease accounting. In March 2014, the FASB and the IASB redeliberated aspects of the joint project, including the lessee and lessor accounting models, lease term, and exemptions and simplifications. The timing of the issuance of the final standards is uncertain. Changes to the accounting guidance could affect both our accounting for leases as well as that of our current and potential tenants. These changes may affect how the real estate leasing business is conducted. For example, if the accounting standards regarding the financial statement classification of operating leases are revised, then companies may be less willing to enter into leases in general or desire to enter into leases with shorter terms because the apparent benefits to their balance sheets could be reduced or eliminated. This in turn could cause a delay in investing our offering proceeds and make it more difficult for us to enter into leases on terms we find favorable.”

Market Overview

The following disclosure hereby replaces the disclosure set forth under the headings “Market Overview — Business Overview,” “Market Overview — Healthcare Industry” and “Market Overview — Demographics” beginning on page 82 of the Prospectus.

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“Business Overview

We will invest primarily in real estate serving the healthcare industry principally in the United States. We seek to acquire a diversified portfolio of healthcare-related assets, focusing predominantly on medical office buildings, or MOBs, and seniors housing communities. Additionally, we will selectively invest across the healthcare continuum in hospitals, post-acute care facilities and other healthcare-related properties.

Healthcare Industry

Healthcare is the single largest industry in the United States based on Gross Domestic Product, or GDP. According to the National Health Expenditures Projections, 2012 – 2022 report by the Centers for Medicare and Medicaid Services, or CMS: (i) national health expenditures are projected to grow 6.1% in 2014 and 5.8% in 2015; (ii) the average compounded annual growth rate for national health expenditures, over the projection period of 2015 through 2022, is anticipated to be 6.2%; and (iii) the healthcare industry (currently a $2.8 trillion industry) is projected to reach $5 trillion and 19.9% of GDP by 2022.

Healthcare Expenditures as a % of GDP

Source: “National Expenditure Projections 2012 – 2022. Centers for Medicare & Medicaid Services, Office of the Actuary. http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/National
HealthExpendData/downloads/proj2012.pdf

This growth in expenditures has led to significant growth in healthcare employment. According to the U.S. Department of Labor’s Bureau of Labor Statistics, occupations and industries related to healthcare are projected to add the most new jobs between 2012 and 2022. Healthcare employment is projected to grow faster than any other industry in the U.S. at an annual rate of 2.6%, adding 5 million jobs between 2012 and 2022 and accounting for nearly one-third of the total projected increase in employment. According to the National Health Expenditure Projections 2012 – 2022 report, improving economic conditions, the Affordable Care Act (ACA) coverage expansions and the aging of the population will drive faster projected growth in health spending in 2014 and beyond. We believe the continued growth in employment in the healthcare industry, particularly the outpatient and ambulatory sectors, will lead to growth in demand for medical office buildings and other facilities that serve the healthcare industry.

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Annual U.S. Employment Growth Rate (2012 – 2022)

Source: “National Expenditure Projections 2012 – 2022 Table 2: National Health Expenditure Amounts with the Impacts of the Affordable Care Act, and Annual Percent Change by Type of Expenditure: Calendar Years 2006 – 2022. Centers for Medicare & Medicaid Services, Office of the Actuary.

Bureau of Labor Statistics, U.S. Department of Labor, Employment Projections 2012 – 2022, December 19, 2013.

In addition to the growth in national health expenditures and corresponding increases in employment in the healthcare sector, the nature of healthcare delivery continues to evolve due to the impact of government programs, regulatory changes and consumer preferences. We believe these changes have increased the need for capital among healthcare providers and increased incentives on these providers to develop more efficient real estate solutions in order to enhance the delivery of quality healthcare. In particular, we believe the following factors and trends are creating an attractive environment in which to invest in healthcare properties.

Aging Demographics Drive Demand

The aging of the U.S. population has had a direct effect on the demand for healthcare, as older persons, especially those aged 65 and older, generally utilize healthcare services at a rate well in excess of those under the age of 65. The first wave of ‘Baby Boomers,’ the largest segment of the U.S. population, began turning 65 in 2011. According to U.S. Census Bureau figures, the U.S. population aged 65 and older is expected to nearly double over the next 25 years, resulting in a projected increased in both the number of aged enrollees in Medicaid and eventually the rate of long-term care expenditure growth. In addition, the population of 85+ seniors is growing at three times the national average.

Projected Change in U.S. Population (2015 – 2060)

Sources: Projections for 2010 through 2050 are from: Table 12. Projections of the Population by Age and Sex for the United States: 2010 to 2050 (NP2008-T12),

Data: CMS.gov, US Centers for Disease Control and Prevention, US Census Bureau, AHA Hospital Statistics, BLS.gov/Sources: US Census Bureau, CBO, RBC Capital Markets, Sg2, ESRI

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According to the Centers for Medicare & Medicaid Services, those over age 65 account for an estimated one-third of all U.S. healthcare spending. The population of those over age 65 is expected to grow by 17 million individuals over the next 10 years.

Annual Physician Office Visits by Age

Aging Population = Increasing HC Spending

Sources: Marcus & Millichap Research Services “Medical Office Research Report” 2014, AAMC, Bureau of Labor Statistics, CBO, CoStar Group, Inc., Economy.com, Real Capital Analytics, US Census Bureau

Data: CMS.gov, US Centers for Disease Control and Prevention, US Census Bureau, AHA Hospital Statistics, BLS.gov

Additionally, diseases that were once life-threatening are now being treated with specialized medical care and an arsenal of new pharmaceuticals and advances in research, diagnostics and surgical procedures, along with a focus on healthier lifestyles, are allowing people to live longer lives. We believe the aging population, coupled with technological advances, will not only increase utilization, but will drive higher volumes of outpatient visits, creating a growing need for outpatient care facilities and medical office buildings.

Affordable Care Act

We believe that the arrival of healthcare reform in the United States will result in a significant increase in the demand for medical services due to increased access, policy changes and the continued evolution of care. The Patient Protection and Affordable Care Act (ACA), which was signed into law on March 23, 2010, is estimated to increase health spending by approximately $621 billion over the ten year period from 2012. According to the Centers for Medicaid Service, for 2015 through 2018, average growth in physician and clinical services is expected to average 5.5% per year, due to increased demand for services associated with the continuing coverage expansions.

From 2012 through 2021, the ACA is expected to add a total of $514 billion to aggregate Medicaid expenditures, an increase of about 9% over projections of Medicaid spending without the impact of the legislation, according to the CMS 2012 Actuarial Report. By 2022, the ACA is projected to reduce the number of uninsured people by 30 million. Medicaid enrollment is projected to increase by 6.0 percent on average, adding around 18 million individuals by 2021.

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Sources: National Health Expenditure Projections 2012 – 2022. Centers for Medicare & Medicaid Services, Office of the Actuary 2012 Actuarial Report

Figure 10 — Past and Projected Medicaid Expenditures as Share of GDP, FY 1966 – FY 2021

Sources: National Health Expenditure Projections 2012 – 2022. Centers for Medicare & Medicaid Services, Office of the Actuary 2012 Actuarial Report

These policy changes, along with overall demographic trends and increased medical spending, are expected to drive demand for medical office space. Due to rising costs, reduced reimbursements and elevated accountability for physicians, efficient and flexible work space for the delivery of services located closer to patient population centers will increase the demand for multi-tenant medical office buildings, outpatient care facilities and ambulatory settings. The need to increase efficiency and curb costs, along with the overall evolution of the healthcare sector, including a shift to a more patient-centric care delivery model, continues to encourage off-campus expansion.

Deeply Fragmented Ownership

In addition to the expected growth in demand for healthcare related services, there is significant opportunity to invest in healthcare real estate. The Journal of Real Estate Portfolios’ research report on “Slicing, Dicing, and Scoping the Size of the U.S. Commercial Real Estate Market” estimates that there is more than $1 trillion in healthcare real estate in the United States. According to the National Association of Real Estate Investment Trusts, there are 15 REITs in the Health Care sector, with a total equity market capitalization of $83.2 billion (data as of June 30, 2014). We believe the highly fragmented ownership within the healthcare real estate market creates a compelling environment for REITs due to ample investment opportunity. Based on our internal estimates, we believe that less than 10% of all healthcare assets in the U.S. are owned by REITs.

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Healthcare Real Estate Market

Sources: NAREIT ‘REITWatch’ July 2014. Annual Returns for the FTSE NAREIT US Real Estate Index Series Table. Data as of June 30, 2014.”

The disclosure under the section entitled “Market Overview — Maintaining a Balanced, Well Diversified Portfolio of High Quality Assets” beginning on page 83 of the prospectus is hereby deleted in its entirety and replaced with the following disclosure.

“We seek balance and diversity within our portfolio, including: tenancy, geography, operator/managers and payors. However, we may also invest in various other properties that serve as part of the healthcare delivery system, including properties leased to healthcare providers and payors, researchers, pharmaceutical and medical supply manufacturers and health insurance firms.

Medical Office Building and Outpatient Facilities

These facilities typically contain physicians' offices and examination rooms, and may also include pharmacies, hospital ancillary service space and outpatient services such as diagnostic centers, rehabilitation clinics and ambulatory-surgery operating rooms. These facilities can be located on or near hospital campuses and require significant plumbing, electrical and mechanical systems to accommodate multiple exam rooms that may require sinks in every room, and special equipment such as x-ray machines. In addition, MOBs are often built to accommodate higher structural loads for certain equipment and may contain specialized construction such as radiation therapy vaults.

There are a variety of types of MOBs: on campus, off campus, affiliated and unaffiliated. On campus MOBs are physically located on a hospital's campus, often on land leased from the hospital. A hospital typically creates strong tenant demand which leads to high tenant retention. Off campus properties are located independent of a hospital's location. Owners of off campus MOBs generally have full control over leasing and operating decisions. Tenant demand for off campus MOBs is not impacted by an adjacent hospital and competitive new supply presents greater risk. Affiliated MOBs may be located on campus or off campus but are affiliated with a hospital or health system. In some respects, affiliated MOBs are similar to on campus MOBs because the hospital relationship drives tenant demand and retention. Finally, unaffiliated MOBs are not affiliated with any hospital or health system but may contain physician offices and other healthcare services. We favor affiliated MOBs versus unaffiliated MOBs because of the relationship and synergy with the sponsoring hospital or health system.

Seniors Housing Communities

Seniors housing communities include independent living facilities, assisted living facilities and memory care facilities. These communities cater to different segments of the elderly population based upon their personal needs and need for assistance with the activities of daily living. Services provided by our operators or tenants in these facilities are primarily paid for by the residents directly or through private insurance and are less reliant on government reimbursement programs such as Medicaid and Medicare. Our seniors housing community investments will primarily consist of assisted living, memory care, and independent living units.

Assisted Living and Memory Care Facilities

Assisted living facilities, or ALFs, are licensed care facilities that provide personal care services, support and housing for those who need help with activities of daily living, such as bathing, eating and dressing, yet

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require limited medical care. The programs and services may include transportation, social activities, exercise and fitness programs, beauty or barber shop access, hobby and craft activities, community excursions, meals in a dining room setting and other activities sought by residents. ALFs are often in apartment-like buildings with private residences ranging from single rooms to large apartments. Certain ALFs may offer a separate facility that offers a higher level of care for residents requiring memory care as a result of Alzheimer's disease or other forms of dementia. Levels of personal assistance are based in part on local regulations.

Independent Living Facilities

Independent living facilities are designed to meet the needs of seniors who choose to live in an environment surrounded by their peers with services such as housekeeping, meals and activities. These residents generally do not need assistance with activities of daily living. However, in some of our facilities, residents have the option to contract for these services.

Hospitals, Post-Acute Care and Other Facilities

Hospitals, post-acute and other facilities are leased to tenants that provide healthcare services and/or support the healthcare industry. Hospitals can include general acute care hospitals, inpatient rehabilitation hospitals, long-term acute care hospitals and surgical and specialty hospitals. These facilities provide inpatient diagnosis and treatment, both medical and surgical, and provide a broad array of inpatient and outpatient services including surgery, rehabilitation therapy as well as diagnostic and treatment services. Post-acute facilities offer restorative, rehabilitative and custodial care for people not requiring the more extensive and complex treatment available at acute care hospitals. Ancillary revenues and revenues from sub-acute care services are derived from providing services beyond room and board and include occupational, physical, speech, respiratory and intravenous therapy, wound care, oncology treatment, brain injury care and orthopedic therapy, as well as sales of pharmaceutical products and other services. Certain facilities provide some of the foregoing services on an out-patient basis. Inpatient rehabilitation services provided by our operators and tenants in these facilities are primarily paid for by private sources or through the Medicare and Medicaid programs.”

Management

The following disclosure hereby replaces the third and fourth sentences under the section “Audit Committee” on page 91 of the Prospectus.

“One of our independent directors, P. Sue Perrotty, qualifies as an audit committee financial expert and is the chairman of the audit committee.”

The first paragraph and the table under the section entitled “Executive Officers and Directors” on page 91 of the Prospectus is hereby replaced with the following disclosure.

“We have provided below certain information about our executive officers and directors. The primary function of our executive officers is to oversee the advisor, who will provide the day-to-day services for, and operations of, the company.

Name		Age		Position(s)
Thomas P. D’Arcy		55		Chief Executive Officer, President and Secretary
W. Todd Jensen		49		Executive Vice President and Chief Investment Officer
Edward F. Lange, Jr.		55		Chief Financial Officer, Chief Operating Officer and Treasurer
William M. Kahane		67		Executive Chairman of the Board of Directors
P. Sue Perrotty		61		Independent Director
B.J. Penn		77		Independent Director”

The following disclosure hereby replaces Mr. D’Arcy’s biography on page 91 of the Prospectus.

“Thomas P. D’Arcy has served as chief executive officer of our company, our advisor and our property manager since their formation in April 2014 and as president and secretary of our company, our advisor and our property manager since November 2014. Mr. D’Arcy has also served as the chief executive officer of ARC HT II, the ARC HT II advisor and the ARC HT II property manager since their formation in October 2012 and as president and secretary of ARC HT II, the ARC HT II advisor and the ARC HT II property manager since November 2014. Mr. D’Arcy also served as the chief executive officer of ARC HT from

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March 2014 and chief executive officer of the ARC HT advisor from April 2012 until January 2015 when ARC HT closed its merger with Ventas, Inc. Mr. D’Arcy has over 28 years of commercial real estate experience. Mr. D’Arcy has served as the chairman of the board of directors of Inland Real Estate Corporation, or Inland, since April 2008 and as an independent director of Inland since 2005. Prior to joining the ARC HT advisor, Mr. D’Arcy served as president and chief executive officer for Grubb & Ellis Company, or Grubb & Ellis, since November 2009. He was also a member of its board of directors. Prior to Grubb & Ellis, he was a principal of Bayside Realty Partners, a private real estate company focused on acquiring, renovating and developing land and income-producing real estate from 2004 to 2009. From 2001 to 2003, he served as president and chief executive officer of Equity Investment Group, a private real estate investment trust, and as chairman and chief executive officer of Bradley Real Estate, Inc., a NYSE-listed REIT, from 1989 to 2000. Mr. D’Arcy is a graduate of Bates College.”

Mr. Weil’s biography on page 92 of the Prospectus is deleted in its entirety.

Mr. Jensen’s biography on pages 92 – 93 of the Prospectus is hereby deleted in its entirety and replaced with the following disclosure.

“W. Todd Jensen has served as executive vice president and chief investment officer of our company, our advisor and our property manager since their formation in April 2014. Mr. Jensen has also served as executive vice president and chief investment officer of ARC HT II and its advisor and property manager since their formation in October 2012. Mr. Jensen also served as the executive vice president and chief investment officer of ARC HT, the ARC HT advisor and the ARC HT property manager from February 2011 until January 2015 when ARC HT closed its merger with Ventas, Inc. Mr. Jensen has almost 25 years of experience in the financing and development of commercial real estate, with 20 of those years focused exclusively on the development, leasing and capitalization of healthcare-related real estate. Mr. Jensen worked for The DASCO Companies, as a consultant from December 2008 to January 2009 and as senior vice president from January 2009 to February 2011, focusing on helping to grow its healthcare-related real estate development business. The DASCO Companies develop, finance, lease and manage medical office buildings and outpatient facilities. During that time, Mr. Jensen established relationships with hospitals and health systems representing more than $300 million in potential development. From August 2003 to September 2008, Mr. Jensen served as senior vice president for Lauth Property Group and started, grew and managed its Healthcare Group, which he led to become the 8^th largest healthcare developer in the United States, according to Modern Healthcare Magazine, with more than $150 million in annual development volume. From 1995 to 2003, Mr. Jensen was a partner and regional vice president of Hammes Company, where he established the Mid-Atlantic and Northeast regional offices and sourced more than $315 million in development and project management work for the firm. From 1992 to 1995, Mr. Jensen worked as assistant vice president for Citicorp Securities in its Real Estate Capital Markets group. Mr. Jensen received a B.A. in Economics and Mathematics from Kalamazoo College and an MBA from University of Pennsylvania’s Wharton School.”

The following disclosure hereby replaces Mr. Lange’s biography on page 93 of the Prospectus.

“Edward F. Lange, Jr. has served as chief financial officer and chief operating officer of our company, our advisor and our property manager since their formation in April 2014 and as treasurer of our company, our advisor and our property manager since November 2014. Mr. Lange has also served as chief financial officer and chief operating officer of ARC HT II since March 2014, as chief financial officer and chief operating officer of the ARC HT II advisor and the ARC HT II property manager since February 2014 and as treasurer of ARC HT II, the ARC HT II advisor and the ARC HT II property manager since November 2014. Mr. Lange served as chief financial officer and chief operating officer of ARC HT from March 2014 and as chief financial officer and chief operating officer of ARC HT from February 2014 until January 2015 when ARC HT closed its merger with Ventas, Inc. Mr. Lange has 30 years of executive leadership experience in the real estate finance, residential and healthcare industries. Mr. Lange most recently served as the Chief Executive Officer at HRC Investors Corp. during 2013. Prior to HRC, Mr. Lange served as Chief Financial Officer and Director of Americold Realty Trust from June 2011 until May 2012. Mr. Lange served as the Chief Financial Officer, Chief Operating Officer and Director at BRE Properties, Inc., or BRE, a New York Stock Exchange traded REIT, from July 2000 until July 2010. At BRE, he was responsible for the operational leadership of BRE, including community operations, all accounting and finance functions, human resources,

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information technology and other corporate services. Prior to this, from March 1996 until June 2000, he was the Chief Financial Officer at Health Care REIT, Inc., or HCN, a New York Stock Exchange traded REIT. Prior to joining HCN, Mr. Lange served as Senior Vice President of Finance of The Mediplex Group Inc., a publicly-owned operator and developer of skilled nursing facilities and rehabilitation hospitals, and affiliated companies from 1992 to 1996. He started his career in investment banking with The Advest Group Inc., from 1984 until 1992. Mr. Lange serves as a Member of the Advisory Board of Anyone Home, Inc. Mr. Lange served as an Independent Director of STAG Industrial, Inc., a New York Stock Exchange traded REIT, from April 2011 to May 2012. He served as an Independent Director of American Assets Trust, Inc., a New York Stock Exchange traded REIT, from December 2010 until July 2011. He holds a Master of Business Administration degree from the University of Connecticut and Bachelor of Science degree in Urban Planning from the University of Massachusetts.”

Mr. Schorsch’s biography on pages 93 – 94 of the Prospectus is deleted in its entirety and the following disclosure is added as Mr. Kahane’s biography.

“William M. Kahane was appointed as a director and executive chairman of our company in December 2014. William M. Kahane served as chief operating officer, treasurer and secretary of GNL, the GNL advisor and the GNL property manager from October 2014 until February 2015 and was appointed as a director of GNL in February 2015. Mr. Kahane also served as executive chairman of the board of directors of GNL from February 2015 to March 2015. Mr. Kahane has served as chairman of the board of directors of ARCT V since February 2015, as chief executive officer of ARCT V from December 2014 through May 2015 and as president of ARCT V from November 2014 through May 2015. Mr. Kahane also has served as chief executive officer of the ARCT V advisor and the ARCT V property manager since December 2014 and as president of the ARCT V advisor and the ARCT V property manager since November 2014. From November 2014 to December 2014, Mr. Kahane served as chief operating officer, treasurer and secretary of ARCT V, the ARCT V advisor and the ARCT V property manager. Mr. Kahane has served as a director of ARC RCA since its formation in July 2010 and also served as an executive officer of ARC RCA and the ARC RCA advisor from their respective formations in July 2010 and May 2010 until March 2012. From November 2014 to December 2014, Mr. Kahane served as chief operating officer and secretary of ARC RCA and the ARC RCA advisor. Mr. Kahane has served as the president of ARC RCA and the ARC RCA advisor since November 2014 and was appointed as the chairman of the board of directors of ARC RCA and the chief executive officer of ARC RCA and the ARC RCA advisor in December 2014. Mr. Kahane has served as chief executive officer of AR Capital Acquisition Corp. since August 2014. Mr. Kahane has served as a director of ARC NYCR since its formation in December 2013 and was appointed as executive chairman in December 2014. Mr. Kahane was appointed as a director and executive chairman of the board of directors of ARC Global II in December 2014 and previously served as the chief operating officer, treasurer and secretary of ARC Global II, the ARC Global II advisor and the ARC Global II property manager from October 2014 until December 2014. Mr. Kahane was appointed a director of ARC HOST in February 2014 and was appointed as executive chairman in December 2014. Mr. Kahane previously served as the chief executive officer and president of ARC HOST from August 2013 to November 2014. Mr. Kahane has served as a director of RFT since November 2014 and was appointed as chairman in December 2014. Mr. Kahane was appointed as a director and as the chairman of the board of directors of ARC RCA II in December 2014 and has served as chief executive officer of ARC RCA II and the ARC RCA II advisor since November 2014. Mr. Kahane has served as the president of ARC RCA II and the ARC RCA II advisor since October 2014. Mr. Kahane served as chief operating officer and secretary of ARC RCA II and the ARC RCA II advisor from October 2014 to December 2014. Mr. Kahane was appointed as a director and as the executive chairman of the board of directors of ARC NYCR II in January 2015. Mr. Kahane has also served as a director of NYRT since its formation in October 2009 and was appointed as executive chairman in December 2014. Mr. Kahane also previously served as president and treasurer of NYRT from its formation in October 2009 until March 2012. Mr. Kahane served as a director of ARC HT from its formation in August 2010 until January 2015 when ARC HT closed its merger with Ventas, Inc. Mr. Kahane previously served as an executive officer of ARC HT, the ARC HT advisor and the ARC HT property manager from their respective formations in August 2010 until March 2012. Mr. Kahane has served as a director of ARC HT II since March 2013 and served as executive chairman from December 2014 until February 2015. He also served as a director and executive officer of ARCP from December 2010 until March 2012. Additionally, Mr. Kahane served as an executive officer of ARCP’s former manager from November 2010 until March 2012 and served as a director of ARCP from February 2013 to

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June 2014. Mr. Kahane served as an executive officer of ARCT, the ARCT advisor and the ARCT property manager from their formation in August 2007 until the close of ARCT’s merger with Realty Income Corporation in January 2013. He also served as a director of ARCT from August 2007 until January 2013. Mr. Kahane served as an executive officer of American Realty Capital Trust III, Inc., or ARCT III, the ARCT III advisor, and the ARCT III property manager from their formation in October 2010 until April 2012. Mr. Kahane served as a director of PECO II from August 2013 until January 2015. Mr. Kahane also has been the interested director of BDCA since its formation in May 2010 and BDCA II since April 2014. Until March 2012, Mr. Kahane was also chief operating officer of BDCA. Mr. Kahane served as a director of RCAP from February 2013 until December 2014, and served as chief executive officer of RCAP from February 2013 until September 2014. Mr. Kahane served as a director of Cole Real Estate Income Strategy (Daily NAV), Inc., or Cole DNAV, from February 2014 until December 2014, and served as a director of Cole Credit Property Trust, Inc., or CCPT, from February 2014 until May 2014.

Mr. Kahane has served as a member of the investment committee of Aetos Capital Asia Advisors, a $3 billion series of opportunistic funds focusing on assets primarily in Japan and China, since 2008. Mr. Kahane began his career as a real estate lawyer practicing in the public and private sectors from 1974 to 1979 where he worked on the development of hotel properties in Hawaii and California. From 1981 to 1992, Mr. Kahane worked at Morgan Stanley & Co., or Morgan Stanley, specializing in real estate, including the lodging sector becoming a managing director in 1989. In 1992, Mr. Kahane left Morgan Stanley to establish a real estate advisory and asset sales business known as Milestone Partners which continues to operate and of which Mr. Kahane is currently the chairman. Mr. Kahane worked very closely with Mr. Nicholas S. Schorsch while a trustee at American Financial Realty Trust, AFRT, from April 2003 to August 2006, during which time Mr. Kahane served as chairman of the finance committee of AFRT’s board of trustees. Mr. Kahane served as a managing director of GF Capital Management & Advisors LLC, GF Capital, a New York-based merchant banking firm, where he directed the firm’s real estate investments, from 2001 to 2003. GF Capital offers comprehensive wealth management services through its subsidiary TAG Associates LLC, a leading multi-client family office and portfolio management services company with approximately $5 billion of assets under management. Mr. Kahane also was on the board of directors of Catellus Development Corp., a NYSE growth-oriented real estate development company, where he served as chairman. Mr. Kahane received a B.A. from Occidental College, a J.D. from the University of California, Los Angeles Law School and an MBA from Stanford University’s Graduate School of Business.”

The following disclosure is hereby inserted as a new paragraph following the first full paragraph on page 100 of the Prospectus under the section entitled “Limited Liability and Indemnification of Directors, Officers, Employees and Other Agents.”

“We have entered into an indemnification agreement with each of our directors and officers, and certain former directors and officers, providing for indemnification of such directors and officers consistent with the provisions of our charter.”

The second paragraph, the table, and the third paragraph under the section entitled “The Advisor” on page 101 of the Prospectus is hereby replaced with the following disclosure.

“The officers and key personnel of our advisor are as follows:

Name		Age		Position(s)
Thomas P. D’Arcy		54		Chief Executive Officer, President and Secretary
W. Todd Jensen		49		Executive Vice President and Chief Investment Officer
Edward F. Lange, Jr.		55		Chief Financial Officer, Chief Operating Officer and Treasurer

The backgrounds of Messrs. D’Arcy, Jensen and Lange are described in the “Management — Executive Officers and Directors” section of this prospectus.”

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The following disclosure hereby replaces the first sentence in the fourth to last paragraph of the section “The Advisor” on page 102 of the Prospectus.

“The advisory agreement may be terminated (a) by the company with cause upon 45 days’ prior written notice or (b) upon 60 days’ prior written notice (i) by the independent directors of the company or the advisor, without cause and without penalty, (ii) by the advisor for good reason, or (iii) by the advisor upon a change of control.”

The following disclosure hereby replaces the sixth sentence in the second to last paragraph of the section “The Advisor” on page 102 of the Prospectus.

“Our advisor may assign the advisory agreement upon approval of a majority of our directors (including a majority of our independent directors).”

The penultimate sentence of the first paragraph under the section entitled “Affiliated Companies — Property Manager” on page 102 of the Prospectus is hereby deleted.

The following disclosure hereby replaces the disclosure set forth under the heading “Dealer Manager” beginning on page 103 of the Prospectus.

“Dealer Manager

Our dealer manager is a member firm of the Financial Industry Regulatory Authority, or FINRA. Our dealer manager was organized on August 29, 2007 for the purpose of participating in and facilitating the distribution of securities of real estate programs sponsored by American Realty Capital, its affiliates and its predecessors.

Our dealer manager provides certain wholesaling, sales, promotional and marketing assistance services to us in connection with the distribution of the shares offered pursuant to this prospectus. It also may sell a limited number of shares at the retail level. The compensation we will pay to our dealer manager in connection with this offering is described in the section of this prospectus captioned “Management Compensation.” See also “Plan of Distribution — Dealer Manager and Compensation We Will Pay for the Sale of Our Shares.” Our dealer manager also serves as dealer manager for RFT, PECO II, ARC HOST, UDF V, ARC NYCR, ARC Global II, ARC RCA II, ARC NYCR II, AERP, BDCA and BDCA II.

Our dealer manager is owned by an entity which is under common control with the parent of our sponsor. Accordingly, Messrs. Schorsch, Kahane and Weil are indirect owners of our dealer manager. Our dealer manager is an affiliate of both our advisor and the property manager. See the section entitled “Conflicts of Interest” in this prospectus.

Name		Age		Position(s)
Edward M. Weil, Jr.		48		Chairman
William E. Dwyer III		57		Chief Executive Officer
Louisa Quarto		47		President
Michael Shuckerow		43		Chief Compliance Officer
Jennifer Round		38		Chief Operating Officer
Steve Rokoszewski		38		Executive Vice President

“The backgrounds of Ms. Quarto and Ms. Round and Messrs. Weil, Dwyer, Shuckerow and Rokoszewski are described below:

Edward M. Weil, Jr. has served as chairman of our dealer manager since September 2013 and was the interim chief executive officer of our dealer manager from May 2014 until September 2014 and the chief executive officer of our dealer manager from December 2010 until September 2013. Mr. Weil served as president, chief operating officer, treasurer and secretary of ARC Global II, the ARC Global II advisor and the ARC Global II property manager from their respective formations in April 2014 to October 2014. Mr. Weil served as an executive officer of ARCT, the ARCT advisor and the ARCT property manager from their formation in August 2007 through March 2012. Mr. Weil served as an executive officer of NYRT, the NYRT property manager and the NYRT advisor from their respective formations in October 2009 until November 2014. He has served as the executive vice president and secretary of the PECO advisor since its

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formation in December 2009. Mr. Weil served as an executive officer of ARC RCA and the ARC RCA advisor from their formation in July 2010 and May 2010, respectively, until November 2014. Mr. Weil served as an executive officer of ARC HT, the ARC HT advisor and the ARC HT property manager from their formation in August 2010 until January 2015 when ARC HT closed its merger with Ventas, Inc. Mr. Weil has served as a director of ARCT III beginning in February 2012 and as an executive officer of ARCT III, the ARCT III advisor and the ARCT III property manager from their formation in October 2010 until the close of ARCT III’s merger with ARCP in February 2013. Mr. Weil served as an executive officer of the ARC DNAV advisor and the ARC DNAV property manager from their respective formations in September 2010 until November 2014, and served as a director of ARC DNAV from September 2010 to August 2014. Mr. Weil served as a director of ARCP from March 2012 until June 2014. Mr. Weil also served as an executive officer of ARCP from its formation in December 2010 until February 2013. Mr. Weil has been an executive officer of GNL, the GNL advisor and the GNL property manager from their formation in July 2011, July 2011 and January 2012, respectively, until October 2014 and served as a director of GNL from May 2012 to September 2014. Mr. Weil served as the president, chief operating officer, treasurer and secretary of ARCT IV, the ARCT IV advisor and the ARCT IV property manager from their formation in February 2012 until the close of ARCT IV’s merger with ARCP in January 2014. Mr. Weil served as a director of ARCT IV from January 2014 until the close of its merger with ARCP in January 2014. Mr. Weil served as the president, treasurer and secretary of ARC HT II, the ARC HT II advisor and the ARC HT II property manager since their formation in October 2012 until November 2014, and served as their chief operating officer from October 2012 through March 2014. Mr. Weil served as the president, treasurer and secretary of RFT and the RFT advisor from November 2012 until January 2013. Mr. Weil has served as president, chief operating officer, treasurer and secretary of ARCT V, the ARCT V advisor and the ARCT V property manager since their formation in January 2013, and served as a director of ARCT V from January 2013 to September 2014. Mr. Weil has served as the executive vice president and secretary of the BDCA advisor since its formation in June 2010. Mr. Weil served as president, chief operating officer, treasurer and secretary of the PECO II advisor from July 2013 until October 2014. Mr. Weil has served as a member of the board of directors of the ARC HOST sub-property manager since August 2013. Mr. Weil served as chief executive officer and president of the general partner of AERP from its formation in October 2013 until November 2014. Mr. Weil has served as president, treasurer, secretary and a director of RCAP since February 2013 and as chief executive officer since September 2014. Mr. Weil also served as treasurer and secretary of ARC NYCR, its advisor and property manager since April 2014 until November 2014 and previously served as chief operating officer of ARC NYCR, its advisor and property manager from their respective formations in December 2013. Mr. Weil served as president, treasurer and secretary of our advisor and property manager from their respective formations in April 2014 until November 2014. Mr. Weil served as president, chief operating officer, treasurer and secretary of ARC RCA II, and as president, chief operating officer, treasurer and secretary of the ARC RCA II advisor and property manager from their respective formations in April 2014 until October 2014. Mr. Weil was formerly the senior vice president of sales and leasing for AFRT from April 2004 to October 2006, where he was responsible for the disposition and leasing activity for a 33 million square foot portfolio of properties. Under the direction of Mr. Weil, his department was the sole contributor in the increase of occupancy and portfolio revenue through the sales of over 200 properties and the leasing of over 2.2 million square feet, averaging 325,000 square feet of newly executed leases per quarter. After working at AFRT, from October 2006 to May 2007, Mr. Weil was managing director of Milestone Partners Limited and prior to joining AFRT, from 1987 to April 2004, Mr. Weil was president of Plymouth Pump & Systems Co. Mr. Weil attended George Washington University. Mr. Weil holds FINRA Series 7, 24 and 63 licenses.

William E. Dwyer III has served as the chief executive officer of our dealer manager since September 2014. Mr. Dwyer joined our dealer manager from LPL Financial, where he held various positions from September 1992 to March 2013, including serving as President — National Sales from September 2009 to March 2013, where he was responsible for setting strategic direction for the management, satisfaction, retention and recruitment of the firm’s independent advisors. In addition, Mr. Dwyer has been a member of the Financial Services Institute since October 2005, including serving as its Chairman from January 2008 to December 2009. Mr. Dwyer was a member of the Private Client Services Committee at the Securities Industry and Financial Markets Association, or SIFMA, from January 2008 to December 2010, including serving as its Co-Chairman from January 2009 to December 2010, as well as a member of the Board of Directors of

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SIFMA from January 2009 to December 2012. He holds a Bachelor of Arts and Sciences degree from Boston College and holds FINRA series 3, 7 and 63 licenses.

Louisa Quarto has served as the President of Realty Capital Securities LLC, our dealer manager, since September 2009. Ms. Quarto served as Senior Vice President and Chief Compliance Officer for our dealer manager from May 2008 until February 2009, as Executive Managing Director from November 2008 through July 2009 and Co-President from July 2009 through August 2009. Ms. Quarto also has been Senior Vice President for American Realty Capital Advisors, LLC since April 2008. Ms. Quarto’s responsibilities for Realty Capital Securities include overseeing sales, national accounts, operations and compliance activities. From February 1996 through April 2008, Ms. Quarto was with W. P. Carey & Co. LLC and its broker-dealer subsidiary, Carey Financial LLC, beginning as an Associate Marketing Director in 1996, becoming Second Vice president in 1999, Vice President in 2000 and Senior Vice President in 2004. From July 2005 through April 2008 Ms. Quarto served as Executive Director and Chief Management Officer of Carey Financial where she managed relationships with the broker-dealers that were part of the CPA® REIT selling groups. Ms. Quarto earned a B.A. from Bucknell University and an M.B.A. in Finance and Marketing from The Stern School of Business at New York University. She holds FINRA Series 7, 63 and 24 licenses and is a member of the Investment Program Association’s, or IPA, Executive Committee, its Board of Trustees and serves as the IPA’s Treasurer and chair of its Finance Committee.

Michael Shuckerow has served as the chief compliance officer of our dealer manager since October 2014. In addition, he is currently a member of the Investment Adviser Association’s social media working group. Prior to joining our dealer manager, Mr. Shuckerow was Head of Distribution Compliance at Columbia Management from April 2008 until October 2014. From April 2005 until April 2008, Mr. Shuckerow served as Chief Compliance Officer and Senior Vice President of a multi-national joint-venture of Citigroup and State Street Bank. From April 2000 until April 2005, Mr. Shuckerow served as Associate General Counsel at UBS, as well as Deputy Chief Administrative Officer of its investment consulting division. Mr. Shuckerow earned a J.D. from St. John’s University School of Law and a B.S. from Northeastern University. He is admitted to the bar in New York and Connecticut and holds FINRA Series 7 and 24 licenses.

Jennifer Round has served as the chief operating officer of our dealer manager since December 2014. Prior to joining our dealer manager, Ms. Round was the Head of Sales Analytics and Strategy at New York Life MainStay Investments from August 2014 until December 2014, where she was responsible for sales reporting, analytics and business strategy, and served as the National Sales Desk Manager at New York Life MainStay Investments, where she oversaw an internal sales force, from July 2010 until August 2014. Ms. Round also previously served as the Vice President of Sales at Fidelity Investments from June 2008 until July 2010, where she led a team of internal sales consultants on providing advisors with charitable, wealth and tax planning solutions. She received her B.S. degree from the University of New Hampshire in 1998 and a Juris Doctorate degree from the New England School of Law in 2009. Ms. Round has her Series 7, 63 and 24 licenses.

Steve Rokoszewski joined our dealer manager in March 2009 as vice president, national sales desk manager, and is responsible for the hiring, training and the ongoing management of all our dealer manager’s internal wholesalers. In June 2010, Mr. Rokoszewski was promoted to senior vice president, and he was promoted to executive vice president in April 2012. Mr. Rokoszewski has over 12 years of experience in the financial services industry. Prior to joining our dealer manager, he was Sales Desk Manager for KBS Capital Markets Group, or KBS, from November 2005 through February 2009. While at KBS, he participated in the development of a distribution company that raised over $1.2 billion in 2008. From March 2001 through October 2005, Mr. Rokoszewski served as AVP — Sales Desk Manager for MetLife Investors, where he led a team of 24 internal wholesalers who helped raise $1.1 billion in sales in 2004. From August 1998 through March 2001, Mr. Rokoszewski was a financial advisor at PaineWebber, Inc. He received a degree in International Relations from the University of Southern California and currently holds FINRA Series 7, 24 and 63 licenses.”

The first sentence of the first paragraph under the section entitled “Investment Decisions” on page 105 of the Prospectus is hereby replaced with the following disclosure.

“The primary responsibility for the investment decisions of our advisor and its affiliates, the negotiation for these investments and the property management and leasing of these investment properties resides with

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Thomas P. D’Arcy, W. Todd Jensen and Edward J. Lange, Jr. and our advisor seeks to invest in commercial properties on our behalf that satisfy our investment objectives.”

The first and second sentences of the second paragraph under the section entitled “Certain Relationships and Related Transactions — Advisory Agreement” on page 105 of the Prospectus is hereby replaced with the following disclosure.

“Thomas P. D’Arcy, our chief executive officer, president and secretary, also is the chief executive officer, president and secretary of our advisor. Edward F. Lange, Jr., our chief financial officer, chief operating officer and treasurer, also is the chief financial officer, chief operating officer and treasurer of our advisor.”

The third and fourth sentences under the section entitled “Certain Relationships and Related Transactions —  Property Management and Leasing Agreement” on page 105 of the Prospectus are hereby replaced with the following disclosure.

“Thomas P. D’Arcy, our chief executive officer, president and secretary, also is the chief executive officer, president and secretary of our property manager. Edward F. Lange, Jr., our chief financial officer, chief operating officer and treasurer, also is the chief financial officer, chief operating officer and treasurer of our property manager.”

The second sentence under the section entitled “Certain Relationships and Related Transactions — Dealer Manager Agreement” beginning on page 105 of the Prospectus is hereby deleted in its entirety and replaced with the following disclosure.

“Nicholas S. Schorsch and William M. Kahane, our executive chairman of our board of directors, together indirectly own a majority of the combined voting power of and a substantial economic interest in our dealer manager.”

Management Compensation

The first paragraph under the section entitled “Management Compensation” on page on page 107 of the Prospectus is hereby replaced with the following disclosure.

“We have no direct employees. Our advisor and its affiliates manage our day-to-day affairs. During the period from our inception on April 24, 2014 through March 31, 2015, the amount of compensation, fees, distributions and expense reimbursements that we paid or reimbursed to the respective affiliates of our sponsor including our advisor (and its affiliates) and our dealer manager was $2.4 million. In addition, as of March 31, 2015, $0.7 million was accrued and unpaid. The following table summarizes all of the fees and other compensation we may pay to our advisor and its affiliates, including amounts to reimburse their costs in providing services to us. This table also summarizes fees to be paid to our independent directors. Our advisor may, in its sole discretion, elect to have certain fees and commissions paid, in whole or in part, in cash or shares of our common stock. The selling commissions may vary for different categories of purchasers. This table assumes the shares are sold through distribution channels associated with the highest possible selling commissions and dealer manager fee. No effect is given to any shares sold through the DRIP. To the extent we enter into a joint venture agreement, our advisor will be compensated on the same basis described below proportionately with our interest in the joint venture.”

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The disclosure relating to the Asset Management Subordinated Participation on pages 113-115 of the Prospectus is hereby deleted in its entirety and replaced with the following disclosure.

“Type of Compensation		Determination of Amount		Estimated Amount for Minimum Offering (80,000 shares)/ Maximum Offering (125,000,000 shares)
Asset Management Subordinated Deferred Participation(5)		Within 30 days after the end of each calendar quarter (subject to the approval of the board of directors), we, as the general partner of the operating partnership, will cause the operating partnership to issue a number of restricted operating partnership units designated as Class B Units of our operating partnership, or Class B Units, to our advisor equal to: (i) the excess of (A) the product of (y) 0.1875% multiplied by (z) the cost of our assets (until the NAV pricing date, then the lower of the cost of assets and the fair value of our assets) less (B) any amounts payable as an oversight fee (as described below) for such calendar quarter; divided by (ii) the value of one share of common stock as of the last day of such calendar quarter, which is equal initially to $22.50 (the primary offering price minus selling commissions and dealer manager fees) and, at such time as we estimate NAV, to per share NAV; provided, however, that if the amounts payable as an oversight fee for such calendar quarter exceed the amount determined under clause (A) for such calendar quarter, or an excess oversight fee, no Class B Units may be issued for such calendar quarter and the excess oversight fee will be carried forward to the next succeeding calendar quarter and included with and treated as amounts payable as an oversight fee for the next succeeding quarter for purposes of determining the amount of restricted Class B Units issuable for the next succeeding calendar quarter; provided further, however, that the sum of (I) the amounts determined under clause (i) above for a calendar year plus (II) the amounts payable as an oversight fee for such calendar year, will not be less than 0.75% of the cost of assets (or the lower of the cost of assets and the fair value of our assets for such calendar year, once we begin to calculate NAV).		Not determinable at this time. Because the subordinated deferred participation is based on a fixed percentage of aggregate asset value, there is no maximum dollar amount of this participation.”

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“Type of Compensation		Determination of Amount		Estimated Amount for Minimum Offering (80,000 shares)/ Maximum Offering (125,000,000 shares)
		Our advisor is entitled to receive distributions on the vested and unvested Class B units it receives in connection with its asset management subordinated deferred participation at the same rate as distributions received on our common stock; these distributions will be in addition to the incentive fees and other participations the advisor and its affiliates may receive from us, including, without limitation, the annual subordinated performance fee and the subordinated participation in net sales proceeds, the subordinated incentive listing distribution or the subordinated distribution upon termination of the advisory agreement, as applicable.
		Class B Units are subject to forfeiture until such time as any one of the following events occurs: (i) a listing of our common stock on a national securities exchange; (ii) a transaction to which we or our operating partnership is a party, as a result of which OP Units or our common stock are or will be exchanged for or converted into the right, or the holders of such securities will otherwise be entitled, to receive cash, securities or other property or any combination thereof; or (iii) the termination of the advisory agreement without cause by an affirmative vote of a majority of our independent directors; provided that the advisor pursuant to the advisory agreement is providing services to us immediately prior to the occurrence of an event of the type described herein, unless the failure to provide such services is attributable to the termination without cause of the advisory agreement by an affirmative vote of a majority of our independent directors.
		Any outstanding Class B Units will be forfeited immediately if the advisory agreement is terminated for any reason other than a termination without cause.

Conflicts of Interest

The first paragraph under the section entitled “Conflicts of Interest — Our Sponsor’s Interests in Other Real Estate Programs — Our Sponsor and its Affiliates” on page 127 of the Prospectus is hereby replaced with the following disclosure.

“Mr. Kahane is also an officer or director of ARC RCA, ARC RCA II, ARC HOST, ARCT V, ARC HT II, ARC Global II, ARC NYCR, ARC NYCR II, ARC DNAV, GNL and RFT, which are public, non-traded REITs sponsored by the parent of our sponsor, advised by affiliates of our sponsor and for which our dealer manager acted or acts as dealer manager. Mr. Kahane is also a director of BDCA and BDCA II, which are public, non-traded business development companies, and a director of the general partner of AERP, a non-traded oil and gas limited partnership, each of which is sponsored by the parent of our sponsor, advised by affiliates of our sponsor and an entity for which our dealer manager acts as dealer manager. As of the date of

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this prospectus, our dealer manager is the dealer manager or is named in the registration statement as the dealer manager in several offerings, including some offerings in which the parent of our sponsor is the sole sponsor.”

The following disclosure replaces the first three sentences of the fourth paragraph under the heading “Conflicts of Interest — Our Sponsor’s Interests in Other Real Estate Programs — Our Sponsor and its Affiliates” beginning on page 127 of the Prospectus.

“Each of our dealer manager, our transfer agent and RCS Advisory, is an indirect subsidiary of RCAP. RCAP Holdings, LLC, or RCAP Holdings, which is directly or indirectly controlled by Nicholas S. Schorsch and William M. Kahane, owns the sole outstanding share of RCAP’s Class B common stock.”

The paragraph entitled “Joint Ventures with Affiliates” on page 129 of the Prospectus is hereby deleted in its entirety.

The penultimate sentence of the second paragraph under the heading “Allocation of Our Affiliates’ Time” on page 130 of the Prospectus is hereby deleted in its entirety and replaced with the following disclosure.

“We believe that the executive officers of our advisor will devote a large portion of their time to us.”

The paragraph entitled “Joint Ventures with Affiliates of Our Advisor” on page 133 of the Prospectus is hereby replaced with the following disclosure.

“Joint Ventures with Affiliates of Our Advisor

We may enter into joint ventures with other programs sponsored directly or indirectly by AR Capital, LLC (as well as other parties) for the acquisition, development or improvement of properties. See the section entitled “Investment Strategy, Objectives and Policies — Real Estate-Related Assets — Joint Venture” in this prospectus. Our advisor and its affiliates may have conflicts of interest in determining that affiliated programs should enter into any particular joint venture agreement. The co-venturer may have economic or business interests or goals which are or which may become inconsistent with our business interests or goals. In addition, should any such joint venture be consummated, our advisor may face a conflict in structuring the terms of the relationship between our interests and the interest of the co-venturer and in managing the joint venture. Since our advisor and its affiliates will control both us and any affiliated co-venturer, agreements and transactions between the co-venturers with respect to any such joint venture will not have the benefit of arms-length negotiation of the type normally conducted between unrelated co-venturers.”

The following disclosure replaces the third and last bullets, respectively, under the heading “Receipt of Fees and Other Compensation by Our Sponsor and its Affiliates” on page 131 of the Prospectus.

Investment Strategy, Objectives and Policies

The second sentence of the second paragraph under the section entitled “Investment Strategy, Objectives and Policies — Healthcare-related Facilities — Investing In and Originating Loans” on page 141 of the prospectus is hereby replaced with the following disclosure.

“Until such time as our shares of common stock are listed, we will not invest in or make mortgage loans unless an appraisal is obtained (from an independent appraiser in a transaction in which a majority of the independent directors so determine and in any transaction with our sponsor, our advisor, any director or any affiliate thereof) concerning the underlying property, except for those mortgage loans insured or guaranteed by a government or government agency.”

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The first paragraph under the section entitled “Investment Strategy, Objectives and Policies —  Healthcare-related Facilities — Acquisition Structure” on page 142 of the prospectus is hereby replaced with the following disclosure.

“We anticipate acquiring fee interests in properties (a “fee interest” is the absolute, legal possession and ownership of land, property, or rights), although other methods of acquiring a property, including acquiring leasehold interests (a “leasehold interest” is a right to enjoy the exclusive possession and use of an asset or property for a stated definite period as created by a written lease), may be utilized when acquiring an on-campus MOB or if we deem it to be advantageous. For example, we may acquire properties through a joint venture or the acquisition of substantially all of the interests of an entity which in turn owns the real property. We also may make preferred equity investments in an entity that owns real property; however, our focus will be on acquiring MOBs, seniors housing communities and other healthcare-related facilities”

The disclosure under the section entitled “Investment Strategy, Objectives and Policies — Development and Construction of Properties” on page 143 of the prospectus is hereby replaced with the following disclosure.

“We may acquire undeveloped land or substantially redevelop existing properties with an aggregate value of up to 10% of the value of our total assets, or enter into joint ventures to do the same.”

The second sentence of the section entitled “Investment Strategy, Objectives and Policies — Joint Ventures” on page 143 of the prospectus is hereby replaced with the following disclosure.

“Some of the potential reasons to enter into a joint venture would be to acquire assets we could not otherwise acquire, to reduce our capital commitment to a particular asset, or to benefit from certain expertise that a partner might have, such as development or operational expertise, among others.”

The third bullet under the section entitled “Investment Strategy, Objectives and Policies — Investment Limitations” on page 145 of the prospectus is hereby deleted in its entirety.

The penultimate sentence of the third paragraph under the section entitled “Investment Strategy, Objectives and Policies — Financing Strategies and Policies” on page 147 of the prospectus is hereby replaced with the following disclosure.

“At the date of acquisition of each asset, we anticipate that the cost of investment for such asset will be substantially similar to its fair market value, which will enable us to satisfy our requirements under our charter.”

The third sentence of the third paragraph under the heading “Investment Company Act Considerations” on page 149 of the Prospectus is hereby replaced in its entirety with the following disclosure.

“We expect that most, if not all, of the company’s wholly owned and majority-owned subsidiaries will not rely on exemptions under either Section 3(c)(1) or 3(c)(7) of the Investment Company Act.”

Valuation Policies

The following disclosure is added as the last paragraph under the heading “Valuation Guidelines; Calculation of NAV” on page 152 of the Prospectus.

“We will no longer calculate our NAV following listing of our common stock on a national securities exchange or other liquidity events, if such events occur. See “Risk Factors — Risks Related to an Investment in American Realty Capital Healthcare Trust III, Inc. — There is no public trading market for our shares and there may never be one; therefore, it will be difficult for you to sell your shares.””

The following disclosure is added as the first sentence under the heading “Calculation of NAV Per Share by Our Advisor” on page 153 of the Prospectus.

“Commencing with the initial NAV pricing date and on each pricing date thereafter (unless we list our common stock on a national securities exchange), our advisor will be responsible for calculating our quarterly NAV at the end of each business day on which we make our quarterly financial filing.”

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Description of Real Estate Investments

The following disclosure is added as a new section immediately following the section entitled “Valuation Policies” on page 155 of the Prospectus.

“DESCRIPTION OF REAL ESTATE INVESTMENTS

Recent Property Investments

DaVita Bay Breeze — Largo, FL

On March 6, 2015, we closed our acquisition of the fee simple interest in a medical office building, or DaVita Bay Breeze, located in Largo, Florida. We acquired the property through a wholly owned subsidiary of our operating partnership. The seller of the property was R.H.C. Investments II, Inc. The seller has no material relationship with us or any of our affiliates, or any of our directors or officers or any associate of any such director or officer.

Capitalization

The contract purchase price of the property was $1.7 million, exclusive of closing costs. We funded the purchase price with proceeds from our ongoing initial public offering. At closing, we paid an acquisition fee of approximately $25,000 to our advisor.

Major Tenants/Lease Expiration

The property contains 7,247 rentable square feet and is 100% leased to Total Renal Care, Inc., a subsidiary of DaVita HealthCare Partners Inc. (NYSE: DVA). The lease is net whereby the tenant is required to pay most operating expenses, excluding all costs to maintain and repair the roof and structure of the building, in addition to base rent. The lease has an original 15-year term that commenced in June 2012 and expires in June 2027, with three five-year renewal options, and contains annual rental escalations equal to 2.0% during the initial term of the lease. Annualized straight-line rental income for the initial term is $0.1 million.

The table below sets forth the occupancy rate and average effective annual rent per rentable square foot as of December 31 for each of the last five years:

		2014				2013				2012				2011				2010
Occupancy			100.0	%			100.0	%			100.0	%			(1)				(1)
Average effective annual rent per rentable square foot		$	15.56			$	15.25			$	14.95				(1)				(1)

Other

We believe the property is suitable and adequate for its uses.

We do not have any significant scheduled capital improvements for the property.

We believe that the property is adequately insured.

The U.S. federal tax basis and the rate of depreciation will be determined based upon the completion of cost allocation studies in connection with finalizing our 2015 U.S. federal income tax return.

The annual real estate taxes payable on the building for the calendar year 2015 are expected to be approximately $27,000. Such real estate taxes are to be reimbursed by the tenant under the terms of the lease.

DaVita HealthCare Partners Inc. provides kidney dialysis services for patients suffering from chronic kidney failure or end stage renal disease. As of December 31, 2014, the company provided dialysis and administrative services in the United States through a network of 2,179 outpatient dialysis centers in 46 states and the District of Columbia serving approximately 173,000 patients. The company was formerly known as DaVita Inc. and changed its name to DaVita HealthCare Partners Inc. in November 2012.

We believe that DaVita Bay Breeze is well-located with acceptable roadway access and is well maintained. DaVita Bay Breeze is subject to competition from similar properties within its market area, and

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the economic performance of the property could be affected by changes in local economic conditions or losses of contracts with major insurance companies reducing the in-network patient base. We did not consider any other factors material or relevant to the decision to acquire DaVita Bay Breeze, nor, after reasonable inquiry, are we aware of any material factors other than those discussed above that would cause the reported financial information not to be necessarily indicative of future operating results.

RAI Clearwater — Clearwater, FL

On April 20, 2015, we closed our acquisition of the fee simple interest in a medical office building, or RAI Clearwater, located in Clearwater, Florida. We acquired the property through a wholly-owned subsidiary of our operating partnership. The seller of the property was R.H.C. Investments I, Inc. The seller has no material relationship with us or any of our affiliates or any directors or officers or any associate of any such director or officer.

RAI Clearwater contains 14,936 square feet and was substantially remodeled for the purpose of the tenants in place in 2009.

Capitalization

The contract purchase price of the property was $4.8 million, exclusive of closing costs. We funded the purchase price with proceeds from this offering. At closing, we paid an acquisition fee of $0.1 million to our advisor.

Major Tenants/Lease Expiration

RAI Clearwater was 100% leased to three tenants as of the date of acquisition. The leases are net whereby the tenants are required to pay their proportionate share of operating expenses, excluding all costs to maintain and repair the roof and structure of the building, in addition to base rent.

The following table provides information related to lease commencement and termination dates, rentable square feet, annualized straight-line rental income, rental escalations and renewal options for the property:

Tenant

Lease Commencement Date

Lease Termination Date

Rentable Square Feet

Annualized Straight-Line Rental Income(1)

Rental Escalations

Renewal Options

RAI Care Centers of Florida I, LLC d/b/a RAI – US –  19 N – Palm Harbor/ Clearwater(2)

December 2009(3)

December 2024

9,216

$0.2 million

(4)

Three five-year options

Renal Hypertension Center

December 2009

November 2024

2,206

$0.1 million

Change in CPI every two lease years(5)

One five-year option

Tampa Bay Access Center, Inc.

December 2009

November 2024

3,514

$0.1 million

Change in CPI every two lease years(6)

One five-year option

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The table below sets forth the occupancy rate and average effective annual rent per rentable square foot as of December 31 for each of the last five years:

		2014				2013				2012				2011				2010
Occupancy			100.0	%			100.0	%			100.0	%			100.0	%			100.0	%
Average effective annual rent per rentable square foot		$	23.05			$	22.89			$	22.52			$	22.22			$	21.94

Future Lease Expirations

The following is a summary of lease expirations for the next ten years at the property:

Year of Expiration		Number of Leases Expiring				Annualized Rental Income				Annualized Rental Income as a Percentage of RAI Clearwater(1)				Leased Rentable Sq. Ft.				Percentage of RAI Clearwater Rentable Sq. Ft. Expiring
						(in thousands)
May 1, 2015 – December 31, 2015			—				—				—	%			—				—	%
2016			—				—				—	%			—				—	%
2017			—				—				—	%			—				—	%
2018			—				—				—	%			—				—	%
2019			—				—				—	%			—				—	%
2020			—				—				—	%			—				—	%
2021			—				—				—	%			—				—	%
2022			—				—				—	%			—				—	%
2023			—				—				—	%			—				—	%
2024			3				344				100.0	%			14,936				100.0	%
Total			3				344				100.0	%			14,936				100.0	%

Other

We believe the property is suitable and adequate for its uses.

We do not have any significant scheduled capital improvements for the property.

We believe that the property is adequately insured.

The U.S. federal tax basis and the rate of depreciation will be determined based upon the completion of cost allocation studies in connection with finalizing our 2015 U.S. federal income tax return.

The annual real estate taxes payable on the building for the calendar year 2015 are expected to be $0.1 million. Such real estate taxes are to be reimbursed by the tenant under the terms of the lease.

We believe that the property is well-located with acceptable roadway access and is well maintained. The property is subject to competition from similar properties within its market area, and the economic performance of the property could be affected by changes in local economic conditions or losses of contracts with major insurance companies reducing the in-network patient base. We did not consider any other factors material or relevant to the decision to acquire the property, nor, after reasonable inquiry, are we aware of any material factors other than those discussed above that would cause the reported financial information not to be necessarily indicative of future operating results.

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DaVita Hudson — Hudson, FL

On May 4, 2015, we closed our acquisition of the fee simple interest in a medical office building, or DaVita Hudson, located in Hudson, Florida. We acquired the property through a wholly-owned subsidiary of our operating partnership. The seller of DaVita Hudson was M.K. Acharya, M.D. The seller has no material relationship with us or any of our affiliates or any directors or officers or any associate of any such director or officer.

Capitalization

The contract purchase price of DaVita Hudson was $2.7 million, exclusive of closing costs. We funded the purchase price with proceeds from this offering. At closing, we paid an acquisition fee of $41,000 to our advisor.

Major Tenants/Lease Expiration

DaVita Hudson contains approximately 8,984 rentable square feet and is 100% leased to two tenants as of the date of acquisition. The leases are net whereby the tenants are required to pay their proportionate share of operating expenses, including all costs to maintain and repair the roof and structure of the building, in addition to base rent.

The following table provides information related to lease commencement and termination dates, rentable square feet, annualized straight-line rental income, rental escalations and renewal options for the property:

Tenant

Lease Commencement Date

Lease Termination Date

Rentable Square Feet

Annualized Straight-Line Rental Income(1)

Rental Escalations

Renewal Options

Total Renal Care, Inc.(2)

July 2009

June 2024

5,409

$0.1 million

(3)

Two five-year options

Renal Hypertension Center

January 2015

December 2024

3,575

$0.1 million

Change in CPI every two lease years(4)

One five-year option

The table below sets forth the occupancy rate and average effective annual rent per rentable square foot as of December 31 for each of the last five years:

		2014				2013				2012				2011				2010
Occupancy			100.0	%			100.0	%			100.0	%			100.0	%			100.0	%
Average effective annual rent per rentable square foot		$	21.38			$	21.19			$	20.97			$	20.61			$	20.13

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Future Lease Expirations

The following is a summary of lease expirations for the next ten years at the property:

Year of Expiration		Number of Leases Expiring				Annualized Rental Income				Annualized Rental Income as a Percentage of DaVita Hudson(1)				Leased Rentable Sq. Ft.				Percentage of DaVita Hudson Rentable Sq. Ft. Expiring
						(in thousands)
June 1, 2015 – December 31, 2015			—				—				—	%			—				—	%
2016			—				—				—	%			—				—	%
2017			—				—				—	%			—				—	%
2018			—				—				—	%			—				—	%
2019			—				—				—	%			—				—	%
2020			—				—				—	%			—				—	%
2021			—				—				—	%			—				—	%
2022			—				—				—	%			—				—	%
2023			—				—				—	%			—				—	%
2024			2				194				100.0	%			8,984				100.0	%
Total			2				194				100.0	%			8,984				100.0	%

Other

We believe the property is suitable and adequate for its uses.

We do not have any significant scheduled capital improvements for the property.

We believe that the property is adequately insured.

The U.S. federal tax basis and the rate of depreciation will be determined based upon the completion of cost allocation studies in connection with finalizing our 2015 U.S. federal income tax return.

The annual real estate taxes payable on the building for the calendar year 2015 are expected to be approximately $31,000. Such real estate taxes are to be reimbursed by the tenant under the terms of the lease.

We believe that the property is well-located with acceptable roadway access and is well maintained. The property is subject to competition from similar properties within its market area, and the economic performance of the property could be affected by changes in local economic conditions or losses of contracts with major insurance companies reducing the in-network patient base. We did not consider any other factors material or relevant to the decision to acquire the property, nor, after reasonable inquiry, are we aware of any material factors other than those discussed above that would cause the reported financial information not to be necessarily indicative of future operating results.”

Prior Performance Summary

The following disclosure hereby replaces in its entirety the disclosure under the heading “Prior Performance Summary” on pages 165 — 175 of the Prospectus.

“Prior Investment Programs

The information presented in this section represents the historical experience of the real estate programs managed or sponsored over the last ten years by Messrs. Schorsch and Kahane, the principals of our sponsor. While our targeted investment focus will primarily be on freestanding, commercial real estate properties, these prior real estate programs have a targeted investment focus primarily on commercial real estate, specifically net lease properties. Investors should not assume that they will experience returns, if any, comparable to those experienced by investors in such prior real estate programs. The prior performance of real estate investment programs sponsored by affiliates of Messrs. Schorsch and Kahane and our advisor may not be indicative of our future results. For an additional description of this risk, see “Risk Factors — Risks Related to an Investment in American Realty Capital Healthcare Trust III, Inc. — Both we and our advisor are

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newly-formed entities with no operating history. The prior performance of programs sponsored by affiliates of our sponsor should not be used to predict our future results.” The information summarized below is current as of December 31, 2014 (unless specifically stated otherwise) and is set forth in greater detail through the year ended December 31, 2014, in the Prior Performance Tables included in this prospectus. In addition, we will provide upon request and without charge, a copy of the most recent Annual Report on Form 10-K filed with the SEC by any public program within the last 24 months, and for a reasonable fee, a copy of the exhibits filed with such report. In addition, we will provide upon request and without charge, the more detailed information in Part II. We intend to conduct this offering in conjunction with future offerings by one or more public and private real estate entities sponsored by American Realty Capital and its affiliates. To the extent that such entities have the same or similar investment strategies or objectives as ours, such entities may be in competition with us for the investments we make. See the section entitled “Conflicts of Interest” in this prospectus for additional information.

Summary Information

During the period from August 2007 (inception of the first program) to December 31, 2014, affiliates of advisor have sponsored 21 public programs, 19 of which had raised funds as of December 31, 2014. From August 2007 (inception of the first public program) to December 31, 2014, our company, ARCT, ARCT III, ARCT IV, PECO, ARC HT, ARCT V, NYRT, DNAV, ARC Global, ARCP, ARC RCA, ARC HT II, PECO II, RFT, ARC HOST, UDF V, ARC Global II and ARC NYCR had raised $20.1 billion from 363,326 investors in public offerings. The public programs purchased 4,869 properties with an aggregate purchase price of $25.7 billion in 49 states, Washington D.C., the Commonwealth of Puerto Rico, Finland, France, Germany and the United Kingdom. ARC RCA II and ARC NYCR II had not raised any funds as of December 31, 2014.

The investment objectives of each of these public programs are substantially identical to our investment objectives of (1) paying attractive and stable cash distributions, (2) preserving and returning stockholders’ capital contributions and (3) realizing appreciation in the value of our investments.

The following table details the percentage of properties located in the following states and U.S. territories as well as several European countries based on purchase price:

State/Possession/Country		Purchase Price %
Alabama			1.8	%
Alaska			0.0	%
Arizona			1.3	%
Arkansas			0.7	%
California			5.2	%
Colorado			1.5	%
Connecticut			0.5	%
Delaware			0.0	%
District of Columbia			0.0	%
Finland			0.3	%
Florida			6.4	%
France			0.1	%
Georgia			4.7	%
Germany			1.1	%
Idaho			0.2	%
Illinois			5.2	%
Indiana			2.6	%
Iowa			1.4	%
Kansas			1.2	%
Kentucky			1.5	%
Louisiana			1.0	%
Maine			0.3	%

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State/Possession/Country		Purchase Price %
Maryland			1.5	%
Massachusetts			1.9	%
Michigan			3.1	%
Minnesota			1.4	%
Mississippi			1.1	%
Missouri			2.5	%
Montana			0.1	%
Nebraska			0.4	%
Netherlands			0.3	%
Nevada			0.6	%
New Hampshire			0.2	%
New Jersey			3.0	%
New Mexico			0.6	%
New York			13.2	%
North Carolina			2.9	%
North Dakota			0.2	%
Ohio			3.5	%
Oklahoma			1.0	%
Oregon			0.6	%
Pennsylvania			4.7	%
Puerto Rico			0.3	%
Rhode Island			0.6	%
South Carolina			2.0	%
South Dakota			0.1	%
Tennessee			1.8	%
Texas			7.7	%
United Kingdom			1.9	%
Utah			0.3	%
Vermont			0.1	%
Virginia			2.1	%
Washington			1.1	%
West Virginia			0.4	%
Wisconsin			1.7	%
Wyoming			0.1	%
			100	%

The properties are used by our tenants in the following industries based on purchase price:

Industry		Purchase Price %
Advertising			0.0	%
Aerospace			1.0	%
Agricultural Products & Services			0.1	%
Auto Manufacturer			0.2	%
Auto Manufacturing			0.2	%
Auto Retail			0.8	%
Auto Services			0.4	%
Automation			0.1	%
Automotive Parts Manufacturing			0.1	%

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Industry		Purchase Price %
Automotive Parts Supplier			0.3	%
Biotechnology			0.1	%
Casual Dining			2.8	%
Consulting			0.1	%
Consumer Goods			0.2	%
Consumer Products			3.8	%
Contract Research			0.0	%
Discount Retail			4.5	%
Distribution			1.0	%
Diversified Industrial			0.5	%
Education			0.1	%
Electronics			0.0	%
Energy			0.5	%
Family Dining			1.6	%
Financial Services			2.7	%
Fitness			0.1	%
Foot Apparel			0.1	%
Freight			4.0	%
Gas/Convenience			1.0	%
Government Services			1.8	%
Haircare Services			0.0	%
Healthcare			19.3	%
Heavy Equipment			0.1	%
Home Décor			0.2	%
Home Maintenance			1.3	%
Hospitality			0.1	%
Hotel			1.0	%
Information and communications			0.1	%
Insurance			2.1	%
Jewelry			0.3	%
Manufacturing			0.5	%
Marine Products			0.0	%
Marketing			0.1	%
Media			0.1	%
Medical Office			0.1	%
Metal Processing			0.1	%
Motor Cycle			0.0	%
Office			9.0	%
Oil/Gas			0.2	%
Packaging			0.1	%
Packaging Goods			0.1	%
Parking			0.1	%
Personal services			0.0	%
Petroleum Services			0.0	%
Pharmaceuticals			0.5	%
Pharmacy			4.6	%
Printing Services			0.0	%
Professional Services			0.3	%
Publishing			0.1	%

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Industry		Purchase Price %
Quick Service Restaurant			4.9	%
Refrigerated Warehousing			0.7	%
Residential			0.1	%
Restaurant			0.7	%
Restaurant – Casual Dining			0.0	%
Restaurant – Quick Service			0.1	%
Retail			13.1	%
Retail – Department Stores			0.7	%
Retail – Discount			0.0	%
Retail – Hobby/books/music			0.0	%
Retail – Home furnishings			0.0	%
Retail – Sporting Goods			0.2	%
Retail – Wholesale			0.0	%
Retail Banking			4.8	%
Retail Food Distribution			0.3	%
Specialty Retail			1.6	%
Storage Facility			0.0	%
Supermarket			1.7	%
Technology			1.2	%
Telecommunications			0.7	%
Transportation			0.0	%
Travel Centers			0.0	%
Utilities			0.7	%
Waste Management			0.0	%
			100.0	%

The purchased properties were 24.8% new and 75.2% used, based on purchase price. As of December 31, 2014, four properties had been sold. The acquired properties were purchased with a combination of proceeds from the issuance of common stock, the issuance of convertible preferred stock, mortgage notes payable, short-term notes payable, revolving lines of credit, long-term notes payable issued in private placements and joint venture arrangements.

Programs of Our Sponsor

American Realty Capital Trust, Inc.

American Realty Capital Trust, Inc., or ARCT, incorporated on August 17, 2007, was a Maryland corporation that qualified as a REIT. ARCT was formed to acquire a diversified portfolio of commercial real estate, primarily freestanding single-tenant properties net leased to credit worthy tenants on a long-term basis. In January 2008, ARCT commenced an initial public offering on a “best efforts” basis to sell up to 150.0 million shares of common stock, excluding 25.0 million shares issuable pursuant to a distribution reinvestment plan, offered at a price of $10.00 per share, subject to certain volume and other discounts. In March 2008, ARCT commenced real estate operations. ARCT’s initial public offering closed in July 2011, having raised $1.7 billion in gross proceeds from the sale of 179.4 million shares of common stock and incurred, cumulatively to that date, $198.0 million in offering costs, commissions and dealer manager fees for the sale of its common stock. ARCT operated as a non-traded REIT through February 29, 2012. Effective as of March 1, 2012, ARCT internalized the management services previously provided by American Realty Capital Advisors, LLC and its affiliates, as a result of which ARCT became a self-administered REIT managed full-time by its own management team, or the Internalization. Concurrent with the Internalization, ARCT listed its common stock on The NASDAQ Global Select Market under the symbol “ARCT,” or the Listing. In connection with the Listing, ARCT offered to purchase up to $220.0 million in shares of common stock from its stockholders, pursuant to a modified “Dutch Auction” cash tender offer, or the Tender Offer. As a result of the Tender Offer, in April 2012, ARCT had purchased 21.0 million shares of its common stock at a purchase

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price of $10.50 per share, for an aggregate cost of $220.0 million, excluding fees and expenses relating to the Tender Offer. On September 6, 2012, ARCT entered into an Agreement and Plan of Merger with Realty Income Corporation, a Maryland corporation and its subsidiary, which was subsequently amended on January 6, 2013. The merger was approved by both companies’ boards of directors and was subsequently approved by both companies’ stockholders on January 16, 2013. The merger closed on January 22, 2013, pursuant to which ARCT merged with and into a subsidiary of Realty Income Corporation and trading of ARCT’s shares was suspended at market close on that date. As of December 31, 2012, ARCT had total real estate investments, at cost, of $2.2 billion, comprised of 515 properties.

New York REIT, Inc.

New York REIT, Inc., or NYRT, a Maryland corporation, is the second publicly offered REIT sponsored by American Realty Capital. NYRT was incorporated on October 6, 2009 and qualified as a REIT beginning with the taxable year ended December 31, 2010. On November 12, 2009, NYRT filed its initial registration statement with the SEC, which became effective on September 2, 2010. NYRT had received aggregate gross offering proceeds of $17.0 million from the sale of 2.0 million shares from a private offering to “accredited investors” (as defined in Regulation D as promulgated under the Securities Act). On December 15, 2011, NYRT exercised its option to convert all its outstanding preferred shares into 2.0 million shares of common stock on a one-to-one basis. As of April 14, 2014, the day prior to NYRT’s listing on the New York Stock Exchange (“NYSE”), NYRT had received aggregate gross proceeds of $1.7 billion which includes the sale of 169.8 million shares of common stock in its public offering, $17.0 million from its private offering and $41.5 million from its distribution reinvestment plan. On April 15, 2014, NYRT listed its common stock on the NYSE under the symbol “NYRT,” or the NYRT Listing. In connection with the NYRT Listing, NYRT commenced an offer to purchase up to 23,255,814 shares of its common stock at a price equal to $10.75 per share or an aggregate of $250.0 million in shares of common stock from its stockholders. This offer closed on May 12, 2014 and NYRT purchased 14.2 million shares of its common stock at a purchase price of $10.75 per share, for an aggregate cost of $152.2 million, excluding fees and expenses relating to the offer. As of May 15, 2015, NYRT had 162.5 million shares of NYRT common stock outstanding, including restricted stock, converted preferred shares and shares issued under its distribution reinvestment plan. As of May 15, 2015, NYRT had total real estate-related assets of $2.4 billion, comprised of 23 properties. As of March 31, 2015, NYRT had incurred, cumulatively to that date, $175.0 million in selling commissions, dealer manager fees and offering costs for the sale of its common stock and $42.7 million of acquisition and transaction-related costs related to its portfolio of properties. On May 21, 2015, the closing price per share of NYRT was $9.02.

Phillips Edison Grocery Center REIT, Inc.

Phillips Edison Grocery Center REIT, Inc., or PECO, a Maryland corporation, is the third publicly offered REIT co-sponsored by American Realty Capital. PECO was incorporated as Phillips Edison — ARC Shopping Center REIT Inc. on October 13, 2009 and qualified as a REIT beginning with the taxable year ended December 31, 2010. On January 13, 2010, PECO filed its registration statement with the SEC, which became effective on August 12, 2010. PECO invests primarily in necessity-based neighborhood and community shopping centers throughout the United States with a focus on well-located grocery-anchored shopping centers that are well occupied at the time of purchase and typically cost less than $20.0 million per property. As of May 15, 2015, PECO had received aggregate gross offering proceeds of $1.8 billion, which includes the sale of 184.3 million shares of common stock in its public offering and $109.6 million from its distribution reinvestment program. As of May 15, 2015, PECO had acquired 147 properties and had total real estate investments at cost of $2.2 billion. As of March 31, 2015, PECO had incurred, cumulatively to that date, $186.2 million in offering costs for the sale of its common stock and $44.1 million for acquisition costs related to its portfolio of properties.

American Realty Capital New York City REIT, Inc.

American Realty Capital New York City REIT, Inc., or ARC NYCR, a Maryland corporation, is the sixteenth publicly offered REIT sponsored by the parent of our sponsor. ARC NYCR was incorporated on December 19, 2013 and intends to elect and qualify to be taxed as a REIT beginning with the taxable year ending December 31, 2014 or its first year of material operations. On February 26, 2014, ARC NYCR filed its registration statement with the SEC, which became effective on April 24, 2014. As of May 15, 2015, ARC NYCR received aggregate gross proceeds of $676.8 million, which includes the sale of 26.8 million shares in

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its public offering and $11.7 million from its distribution reinvestment plan. As of May 15, 2015, ARC NYCR owned five properties at an aggregate purchase price of $507.5 million. As of March 31, 2015, ARC NYCR had incurred, cumulatively to that date, $69.8 million in offering costs for the sale of its common stock and $12.1 million for acquisition costs related to its portfolio of properties.

American Realty Capital Healthcare Trust, Inc.

American Realty Capital Healthcare Trust, Inc., or ARC HT, a Maryland corporation, is the fourth publicly offered REIT sponsored by American Realty Capital. ARC HT was organized on August 23, 2010 and qualified as a REIT beginning with the taxable year ended December 31, 2011. On August 27, 2010, ARC HT filed its registration statement with the SEC, which became effective on February 18, 2011. As of April 6, 2014, the day prior to ARC HT’s listing on the NASDAQ Global Select Market (“NASDAQ”), ARC HT had received aggregate gross offering proceeds of $1.8 billion, which includes the sale of 174.3 million shares in its public offering and $80.0 million from its distribution reinvestment plan. On April 7, 2014, ARC HT listed its common stock on the NASDAQ under the symbol “HCT,” or the HCT Listing. In connection with the HCT Listing, ARC HT commenced an offer to purchase up to 13,636,364 shares of its common stock at a price equal to $11.00 per share or an aggregate of $150.0 million in shares of common stock from its stockholders. The offer closed on May 2, 2014 and ARC HT purchased 13.6 million of its common stock at a purchase price of $11.00 per share, for an aggregate cost of $150.0 million, excluding fees and expenses related to the offer. As of December 31, 2014, ARC HT had 169.3 million shares of its common stock outstanding, including restricted stock and shares issued under its distribution reinvestment plan. As of December 31, 2014, ARC HT owned 155 healthcare-related properties and one preferred equity investment, with an aggregate purchase price of $2.2 billion. As of September 30, 2014, ARC HT had incurred, cumulatively to that date, $197.5 million in offering costs for the sale of its common stock and $62.6 million of acquisition and transaction-related costs related to its portfolio of properties. On June 1, 2014, ARC HT entered into an Agreement and Plan of Merger with Ventas, Inc., or Ventas, a Delaware corporation. The merger was approved by both companies’ boards of directors and was subsequently approved by both companies’ stockholders on January 15, 2015. The merger closed on January 16, 2015, pursuant to which ARC HT merged with and into a subsidiary of Ventas and trading of ARC HT’s shares was suspended at market close on that date.

American Realty Capital — Retail Centers of America, Inc.

American Realty Capital — Retail Centers of America, Inc., or ARC RCA, a Maryland corporation, is the fifth publicly offered REIT sponsored by American Realty Capital. ARC RCA was organized on July 29, 2010 and qualified as a REIT beginning with the taxable year ended December 31, 2012. On September 14, 2010, ARC RCA filed its registration statement with the SEC, which became effective on March 17, 2011. As of May 15, 2015, ARC RCA had received aggregate gross proceeds of $952.7 million, which includes the sale of 92.7 million shares in its public offering and $30.0 million from its distribution reinvestment plan. As of May 15, 2015, ARC RCA owned 23 properties with an aggregate purchase price of $785.4 million. As of March 31, 2015, ARC RCA had incurred, cumulatively to that date, $101.4 million in offering costs for the sale of its common stock and $14.4 million for acquisition costs related to its portfolio of properties. The ARC RCA public offering terminated on September 12, 2014.

American Realty Capital Daily Net Asset Value Trust, Inc.

American Realty Capital Daily Net Asset Value Trust, Inc. (formerly known as American Realty Capital Trust II, Inc.), or ARC DNAV, a Maryland corporation, is the sixth publicly offered REIT sponsored by American Realty Capital. ARC DNAV was incorporated on September 10, 2010 and has elected to be taxed as a REIT beginning with the taxable year ended December 31, 2013. On October 8, 2010, ARC DNAV filed its registration statement with the SEC, which became effective on August 15, 2011. As of May 15, 2015, ARC DNAV had received aggregate gross proceeds of $25.2 million, which includes the sale of 2.4 million shares in its public offering and $1.4 million from its distribution reinvestment plan. As of May 15, 2015, ARC DNAV owned 14 properties with an aggregate base purchase price of $34.8 million. As of March 31, 2015, ARC DNAV had incurred, cumulatively to that date, $7.8 million in offering costs from the sale of its common stock and $0.9 million for acquisition costs related to its portfolio of properties. As of March 31,

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2015, the offering costs exceeded 1.5% of gross proceeds from its public offering by $6.5 million, which is a cap elected by its Advisor and became its Advisor’s responsibility. The ARC DNAV public offering terminated on February 11, 2015.

American Realty Capital Trust III, Inc.

American Realty Capital Trust III, Inc., or ARCT III, a Maryland corporation, was the seventh publicly offered REIT sponsored by American Realty Capital. ARCT III was incorporated on October 15, 2010 and qualified as a REIT beginning with the taxable year ended December 31, 2011. On November 2, 2010, ARCT III filed its registration statement with the SEC, which became effective on March 31, 2011. As of February 28, 2013, ARCT III had received aggregate gross proceeds of $1.8 billion which included the sale of 174.0 million shares in its public offering and $31.9 million from its distribution reinvestment plan. As of February 28, 2013, ARCT III owned 533 single-tenant, freestanding properties and had total real estate investments, at cost, of $1.7 billion. As of December 31, 2012, ARCT III had incurred, cumulatively to that date, $196.5 million in offering costs for the sale of its common stock and $40.8 million for acquisition costs related to its portfolio of properties. On December 17, 2012, ARCT III and ARCP entered into an Agreement and Plan of Merger under which ARCP acquired all of the outstanding shares of ARCT III. The merger was approved by the independent members of both companies’ boards of directors and was subsequently approved by both companies’ stockholders on February 26, 2013. On February 26, 2013, ARCP stockholders approved the issuance of common stock in connection with the merger and ARCT III stockholders approved the merger. The merger closed on February 28, 2013, pursuant to which ARCT III merged with and into a subsidiary of ARCP. On March 1, 2013, in connection with the merger, ARCT III stockholders received their respective cash or stock consideration from ARCP, as elected, pursuant to terms of the Agreement and Plan of Merger.

American Realty Capital Properties, Inc.

American Realty Capital Properties, Inc., or ARCP, a Maryland corporation, is the eighth publicly offered REIT sponsored by American Realty Capital. ARCP was incorporated on December 2, 2010 and qualified as a REIT beginning with the taxable year ended December 31, 2011. On September 6, 2011, ARCP completed its initial public offering of 5.6 million shares of common stock. ARCP’s common stock is traded on The NASDAQ Global Select Market under the symbol “ARCP.” On February 28, 2013, ARCT III merged with and into a subsidiary of ARCP, pursuant to the Agreement and Plan of Merger entered into on December 17, 2012, under which ARCP acquired all of the outstanding shares of ARCT III.

In aggregate, through December 31, 2013, ARCP had received $1.1 billion of proceeds from the sale of common and convertible preferred stock. As of December 31, 2013, ARCP owned 1,328 buildings, including properties purchased by ARCT III, freestanding properties and real estate investments, at a purchase price of $5.2 billion. On May 28, 2013, ARCP and CapLease, Inc., or CapLease, entered into an Agreement and Plan of Merger under which ARCP subsequently acquired all of the outstanding shares of CapLease. The merger was approved by both companies’ boards of directors and CapLease’s stockholders and closed on November 5, 2013. On July 1, 2013, ARCT IV and ARCP entered into an Agreement and Plan of Merger under which ARCP subsequently acquired all of the outstanding shares of ARCT IV. The merger was approved by both companies’ boards of directors and ARCT IV's stockholders and closed on January 3, 2014. Effective as of January 8, 2014, ARCP internalized the management services previously provided by American Realty Capital Advisors, LLC and its affiliates, as a result of which ARCP became a self-administered REIT managed full-time by its own management team. On October 22, 2013, ARCP entered into an Agreement and Plan of Merger with Cole Real Estate Investments, Inc., or Cole, under which ARCP subsequently acquired all of the outstanding shares of Cole. The merger was approved by both companies’ boards of directors and stockholders and closed on February 7, 2014.

Global Net Lease, Inc.

Global Net Lease, Inc., or GNL, a Maryland corporation, is the ninth publicly offered REIT sponsored by American Realty Capital. GNL was incorporated on July 13, 2011 and qualified as a REIT beginning with the taxable year ended December 31, 2013. On October 27, 2011, GNL filed its registration statement with the SEC, which was declared effective by the SEC on April 20, 2012. As of May 15, 2015, GNL had received aggregate gross proceeds of $1.8 billion which includes the sale of 173.0 million shares in its public offering

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and $74.8 million from its distribution reinvestment plan. As of May 15, 2015, GNL owned 311 properties with an aggregate base purchase price of $2.4 billion. As of March 31, 2015 GNL had incurred, cumulatively to that date, $188.1 million in offering costs for the sale of its common stock and $92.6 million for acquisition costs related to its property acquisitions. The GNL public offering terminated on June 30, 2014.

American Realty Capital Trust IV, Inc.

American Realty Capital Trust IV, Inc., or ARCT IV, a Maryland corporation, was the tenth publicly offered REIT sponsored by American Realty Capital. ARCT IV was incorporated on February 14, 2012 and qualified as a REIT beginning with the taxable year ended December 31, 2012. On March 22, 2012, ARCT IV filed its registration statement with the SEC, which was declared effective by the SEC on June 8, 2012. As of December 31, 2013, ARCT IV had received aggregate gross proceeds of $1.8 billion which includes the sale of 70.2 million shares in its public offering and $21.0 million under its distribution reinvestment plan. As of December 31, 2013, ARCT IV owned 1,231 freestanding properties at an aggregate purchase price of $2.2 billion. As of December 31, 2013, ARCT IV had incurred, cumulatively to that date, $197.1 million in offering costs for the sale of its common stock and $55.7 million for acquisition costs related to its portfolio of properties. On July 1, 2013, ARCT IV and ARCP entered into an Agreement and Plan of Merger under which ARCP subsequently acquired all of the outstanding shares of ARCT IV. The merger was approved by both companies’ boards of directors and was subsequently approved by ARCT IV's stockholders on January 3, 2014. The merger closed on January 3, 2014, pursuant to which ARCT IV merged with and into a subsidiary of ARCP.

American Realty Capital Healthcare Trust II, Inc.

American Realty Capital Healthcare Trust II, Inc., or ARC HT II, a Maryland corporation, is the eleventh publicly offered REIT sponsored by American Realty Capital. ARC HT II was incorporated on October 15, 2012 and qualified to be taxed as a REIT beginning with the taxable year ended December 31, 2013. On October 31, 2012, ARC HT II filed its registration statement with the SEC, which was declared effective by the SEC on February 14, 2013. As of May 15, 2015, ARC HT II received aggregate gross proceeds of $2.1 billion, which includes the sale of 81.8 million shares in its public offering and $75.2 million from its distribution reinvestment plan. As of May 15, 2015, ARC HT II owned 139 properties with an aggregate purchase price of $1.8 billion. As of March 31, 2015, ARC HT II had incurred, cumulatively to that date, $227.6 million in offering costs for the sale of its common stock and $36.4 million for acquisition costs related to its portfolio of properties. The ARC HT II public offering terminated on November 17, 2014.

Realty Finance Trust, Inc.

Realty Finance Trust, Inc., or RFT, a Maryland corporation, is the twelfth publicly offered REIT sponsored by American Realty Capital. RFT was incorporated on November 15, 2012 and qualified to be taxed as a REIT beginning with the taxable year ended December 31, 2013. On January 22, 2013, RFT filed its registration statement publicly with the SEC, which was declared effective by the SEC on February 12, 2013. As of May 15, 2015, RFT received aggregate gross proceeds of $548.2 million, which includes the sale of 21.6 million shares in its public offering and $11.5 million from its distribution reinvestment plan. As of March 31, 2015, RFT had 46 real estate mortgage debt investments with a total carrying value of $559.8 million and CMBS investments with a fair value of $58.4 million. As of March 31, 2015, RFT had incurred, cumulatively to that date, $54.5 million in offering costs for the sale of its common stock.

American Realty Capital Trust V, Inc.

American Realty Capital Trust V, Inc., or ARCT V, a Maryland corporation, is the thirteenth publicly offered REIT sponsored by American Realty Capital. ARCT V was incorporated on January 22, 2013 and elected to qualify to be taxed as a REIT beginning with the taxable year ended December 31, 2013. On March 6, 2013, ARCT V filed its registration statement publicly with the SEC, which was declared effective by the SEC on April 4, 2013. As of May 15, 2015, ARCT V received aggregate gross proceeds of $1.6 billion which includes the sale of 61.5 million shares in its public offering and $106.2 million from its distribution reinvestment plan. As of May 15, 2015, ARCT V owned 463 freestanding properties with an aggregate purchase price of $2.2 billion. As of March 31, 2015, ARCT V had incurred, cumulatively to that date, $173.7 million in offering costs for the sale of its common stock and $49.7 million for acquisition costs related to its portfolio of properties. The ARCT V public offering terminated in October 2013.

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Phillips Edison Grocery Center REIT II, Inc.

Phillips Edison Grocery Center REIT II, Inc., or PECO II, a Maryland corporation, is the fourteenth publicly offered REIT sponsored by American Realty Capital. PECO II was incorporated as Phillips Edison — ARC Grocery Center REIT II, Inc. on June 5, 2013 and intends to elect and qualify as a REIT beginning with the taxable year ending December 31, 2014 or its first year of material operations. On August 13, 2013, PECO II filed its registration statement with the SEC, which was declared effective by the SEC on November 25, 2013. As of May 15, 2015, PECO II received aggregate gross proceeds of $842.5 million from the sale of 33.9 million shares in its public offering and $16.2 million from its distribution reinvestment plan. As of May 15, 2015, PECO II owned 29 properties at an aggregate purchase price of $447.4 million. As of March 31, 2015, PECO II had incurred, cumulatively to that date, $84.9 million in offering costs for the sale of its common stock and $6.6 million in acquisition costs related to its portfolio of properties.

American Realty Capital Hospitality Trust, Inc.

American Realty Capital Hospitality Trust, Inc., or ARC HOST, a Maryland corporation, is the fifteenth publicly offered REIT sponsored by American Realty Capital. ARC HOST was incorporated on July 25, 2013 and intends to elect and qualify as a REIT beginning with the taxable year ending December 31, 2014 or its first year of material operations. On August 16, 2013, ARC HOST filed its registration statement with the SEC, which was declared effective by the SEC on January 7, 2014. As of May 15, 2015, ARC HOST received aggregate gross proceeds of $529.1 million, which includes the sale of 21.0 million shares in its public offering and $6.0 million from its distribution reinvestment plan. As of May 15, 2015, ARC HOST owned or had an interest in 122 properties at an aggregate purchase price of $1.9 billion. As of March 31, 2015, ARC HOST had incurred, cumulatively to that date, $51.3 million in offering costs for the sale of its common stock and $48.2 million in acquisition costs related to its portfolio of properties.

Business Development Corporation of America

The American Realty Capital group of companies also has sponsored Business Development Corporation of America, or BDCA, a Maryland corporation. BDCA was organized on May 5, 2010 and is a publicly offered specialty finance company which has elected to be treated as a business development company under the Investment Company Act. As of May 15, 2015, BDCA had raised gross proceeds of $1.9 billion which includes the sale of 161.7 million shares in its public offering and $90.2 million from its distribution reinvestment plan. As of May 15, 2015, BDCA’s investments, at amortized cost, were $2.0 billion. As of March 31, 2015, BDCA had incurred, cumulatively to that date, $176.0 million in offering costs for the sale of its common stock.

American Energy Capital Partners — Energy Recovery Program, LP

The American Realty Capital group of companies also has sponsored American Energy Capital Partners — Energy Recovery Program, LP, or AERP, a Delaware limited partnership. AERP is American Realty Capital’s first oil and gas limited partnership and was organized on October 30, 2013. AERP was formed to acquire, develop, operate, produce and sell working and other interests in producing and non-producing oil and natural gas properties located onshore in the United States. AERP filed a registration statement with the SEC on December 13, 2013, which was declared effective on May 8, 2014. As of May 15, 2015, AERP had raised gross proceeds of $9.3 million, which includes the sale of 0.5 million shares in its public offering. As of May 15, 2015, AERP had made no investments. As of March 31, 2015, AERP had incurred, cumulatively to that date, $3.8 million in offering costs relating to the sale of its limited partner interests.

United Development Funding Income Fund V

United Development Funding Income Fund V, or UDF V, a Maryland corporation, is the seventeenth publicly offered REIT sponsored by American Realty Capital and is co-sponsored by UDF Holdings, L.P. UDF V was incorporated on October 1, 2013 and intends to elect and qualify to be taxed as a REIT beginning with the taxable year ending December 31, 2014 or the first year during which UDF V commences real estate operations. On February 26, 2014, UDF V filed its registration statement with the SEC, which became effective on July 25, 2014. UDF V was formed to generate current interest income by investing in secured

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loans and producing profits from investments in residential real estate. As of May 15, 2015, UDF V received aggregate gross proceeds of $23.7 million, which includes the sale of 1.2 million shares in its public offering and $0.1 million from its distribution reinvestment plan. As of May 15, 2015, UDF V had made four real estate mortgage debt investments with a total carrying value of $27.5 million. As of March 31, 2015 UDF V had incurred, cumulatively to that date, $2.2 million in offering costs from the sale of its common shares of beneficial interest.

American Realty Capital Global Trust II, Inc.

American Realty Capital Global Trust II, Inc., or ARC Global II, a Maryland corporation, is the nineteenth publicly offered REIT sponsored by American Realty Capital. ARC Global II was incorporated on April 23, 2014 and intends to elect and qualify to be taxed as a REIT beginning with the taxable year ending December 31, 2014 or its first year of material operations. On June 6, 2014, ARC Global II filed its registration statement with the SEC, which became effective on August 26, 2014. As of May 15, 2015, ARC Global II received aggregate gross proceeds of $168.0 million, which includes the sale of 6.8 million shares and $0.8 million from its distribution reinvestment plan. As of May 15, 2015, ARC Global II owned five properties with an aggregate purchase price of $131.9 million. As of March 31, 2015, ARC Global II had incurred, cumulatively to that date, $15.0 million in offering costs for the sale of its common stock and $9.1 million for acquisition costs related to its portfolio of properties.

American Realty Capital — Retail Centers of America II, Inc.

American Realty Capital — Retail Centers of America II, Inc., or ARC RCA II, a Maryland corporation, is the twentieth publicly offered REIT sponsored by American Realty Capital. ARC RCA II was incorporated on April 23, 2014 and intends to elect and qualify to be taxed as a REIT beginning with the taxable year ending December 31, 2014 or its first year of material operations. On June 9, 2014, ARC RCA II filed its registration statement with the SEC, which became effective on September 25, 2014. As of May 15, 2015, ARC RCA II received aggregate gross proceeds of $0.2 million from the sale of 8,888 shares in a private placement. As of May 15, 2015, ARC RCA II had not acquired any properties. As of March 31, 2015, ARC RCA II had incurred, cumulatively to that date, $3.0 million in offering costs for the sale of its common stock.

Business Development Corporation of America II

The American Realty Capital group of companies also has sponsored Business Development Corporation of America II, or BDCA II, a Maryland corporation. BDCA II was organized on April 17, 2014 and is a publicly offered specialty finance company which has elected to be treated as a business development company under the Investment Company Act. On July 15, 2014, BDCA II filed its registration statement with the SEC, which became effective on September 8, 2014. As of May 15, 2015, BDCA II received aggregate gross proceeds of $0.2 million from the sale of 22,222 shares in a private placement. As of May 15, 2015, BDCA II had made no investments. As of March 31, 2015, BDCA II had incurred, cumulatively to that date, $2.0 million in offering costs for the sale of its common stock.

American Realty Capital New York City REIT II, Inc.

American Realty Capital New York City REIT II, Inc., or ARC NYCR II, a Maryland corporation, is the twenty-first publicly offered REIT sponsored by American Realty Capital. ARC NYCR II was incorporated on July 1, 2014 and intends to elect and qualify to be taxed as a REIT beginning with the taxable year ending December 31, 2015 or its first year of material operations. On August 25, 2014, ARC NYCR II filed its registration statement with the SEC, which has not yet been declared effective by the SEC. As of May 15, 2015, ARC NYCR II received aggregate gross proceeds of $0.2 million, which includes the sale of 8,888 shares in a private placement. As of May 15, 2015, ARC NYCR II had not acquired any properties. As of December 31, 2014, ARC NYCR II had incurred, cumulatively to that date, $0.5 million in offering costs for the sale of its common stock.”

Liquidity of Public Programs

In order to assist FINRA members in complying with FINRA Rule 2310(b)(3)(D), in this section we disclose the liquidity of prior public programs sponsored by the parent of our sponsor, which for this purpose excludes ARCP, a REIT that is and always has been listed on a national securities exchange, commencing

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with The NASDAQ Capital Market and, subsequently, The NASDAQ Global Select Market. Through December 31, 2014, American Realty Capital has sponsored the following 22 other public programs (excluding ARCP): ARCT, NYRT, PECO, ARC HT, ARC RCA, ARC DNAV, ARCT III, ARC Global, ARCT IV, ARC HT II, ARCT V, RFT, BDCA, UDF V, PECO II, ARC HOST, ARC Global II, ARC NYCR, ARC NYCR II, ARC RCA II, BDCA II and our company.

Of these 22 public programs, each disclosed in their respective prospectus a date or time period for a liquidity event. As of December 31, 2014, the following five of the 22 public programs listed above have engaged in a liquidity event through the listing of their common stock on a national securities exchange or through merging with a company already listed on a national securities exchange: ARCT, ARC HT, NYRT, ARCT III and ARCT IV.

The remaining 17 of the 22 public programs listed below have not yet reached the disclosed time limit in which they have to engage in a liquidity event through the listing of their common stock on a national securities exchange or to engage in some other type of liquidity event: PECO, ARC Global, ARCT V, ARC DNAV, RFT, ARC RCA, ARC HT II, PECO II, BDCA, ARC HOST, ARC RCA II, ARC NYCR, ARC NYCR II, BDCA II, UDFV, ARC Global II and our company.

ARCT was a non-traded REIT until March 2012, when it listed its shares of common stock on The NASDAQ Global Select Market. ARCT’s prospectus for its initial public offering provided that it would seek to consummate a listing of shares of its common stock on a national securities exchange by the tenth anniversary of the commencement of its initial public offering. By listing its common stock on The NASDAQ Global Select Market, ARCT achieved a listing on a national securities exchange within the time it contemplated to do so.

ARCT III was a non-traded REIT until February 2013, when it merged with and into ARCP. ARCT III’s prospectus for its initial public offering provided that ARCT III would seek to consummate a sale or merger by the fifth anniversary of the termination of its initial public offering. By merging with and into ARCP, ARCT III achieved a sale or merger within the time it contemplated to do so.

ARCT IV was a non-traded REIT until January 2014, when it merged with and into ARCP. ARCT IV’s prospectus for its initial public offering provided that ARCT IV would seek to consummate a sale or merger by the sixth anniversary of the termination of its initial public offering. By merging with and into ARCP, ARCT IV achieved a sale or merger within the time it contemplated to do so.

ARC HT was a non-traded REIT until April 2014, when it listed its common stock on The NASDAQ Global Select Market. ARC HT’s prospectus for its initial public offering provided that it would begin the process of achieving a liquidity event not later than three to five years after the termination of its primary offering. By listing its common stock on The NASDAQ Global Select Market, ARC HT achieved a listing on a national securities exchange within the time it contemplated to do so.

NYRT was a non-traded REIT until April 2014, when it listed its common stock on the New York Stock Exchange. NYRT’s prospectus for its initial public offering provided that it would begin the process of achieving a liquidity event not later than three to five years after the termination of its primary offering. By listing its common stock on the NYSE, NYRT achieved a listing on a national securities exchange within the time it contemplated to do so.

The prospectus for each of the other public programs sponsored by the parent of our sponsor provided a date or time period by which it might be liquidated or engage in another liquidity event. PECO, ARC HT II, ARC Global, ARC RCA, ARC DNAV and ARCT V have each completed their primary offering stages, and ARC NYCR, ARC Global II, RFT, BDCA, BDCA II, ARC RCA II, PECO II, UDF V and ARC HOST are in their offering and acquisition stages. None of these public programs have reached the stated date or time period by which they might be liquidated or engage in another liquidity event.

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Adverse Business Developments and Conditions

On October 29, 2014, ARCP announced that its audit committee had concluded that the previously issued financial statements and other financial information contained in certain public filings should no longer be relied upon. This conclusion was based on the preliminary findings of an investigation conducted by ARCP’s audit committee which concluded that certain accounting errors were made by ARCP personnel that were not corrected after being discovered, resulting in an overstatement of AFFO and an understatement of ARCP’s net loss for the three and six months ended June 30, 2014. ARCP also announced the resignation of its chief accounting officer and its chief financial officer. ARCP’s former chief financial officer also is one of the non-controlling owners of the parent of our sponsor, but does not have a role in managing our business or our sponsor’s business. In December 2014, ARCP announced the resignation of its executive chairman, who was also the chairman of our board of directors until his resignation on December 29, 2014. This individual is one of the controlling members of the parent of our sponsor.

On March 2, 2015, ARCP announced the completion of its audit committee’s investigation and filed amendments to its Form 10-K for the year ended December 31, 2013 and its Form 10-Q for the quarters ended March 31, 2014 and June 30, 2014, which are available at the internet site maintained by the SEC, www.sec.gov. According to these filings, these amendments corrected errors in ARCP’s financial statements and in its calculation of AFFO that resulted in overstatements of AFFO for the years ended December 31, 2011, 2012 and 2013 and the quarters ended March 31, 2013 and 2014 and June 30, 2014 and described certain results of its investigations, including matters relating to payments to, and transactions with, affiliates of the parent of our sponsor and certain equity awards to certain officers and directors. In addition, ARCP disclosed that the audit committee investigation had found material weaknesses in ARCP’s internal control over financial reporting and its disclosure controls and procedures. ARCP also disclosed that the SEC has commenced a formal investigation, that the United States Attorney’s Office for the Southern District of New York contacted counsel for both ARCP’s audit committee and ARCP with respect to the matter and that the Secretary of the Commonwealth of Massachusetts has issued a subpoena for various documents.

Other than as disclosed above, there have been no major adverse business developments or conditions experienced by any program or non-program property that would be material to investors, including as a result of recent general economic conditions.”

Summary of Our Operating Partnership Agreement

The second paragraph under the heading “Class B Units” on page 221 of the Prospectus is hereby replaced in its entirety with the following disclosure.

“Class B Units are subject to forfeiture until such time as any one of the following events occurs: (i) a listing of our common stock on a national securities exchange; (ii) a transaction to which we or our operating partnership is a party, as a result of which OP Units or our common stock are exchanged for or converted into the right, or the holders of such securities will otherwise be entitled, to receive cash, securities or other property or any combination thereof; or (iii) the termination of the advisory agreement without cause by an affirmative vote of a majority of our independent directors; provided that the advisor pursuant to the advisory agreement is providing services to us immediately prior to the occurrence of an event of the type described in this clause, unless the failure to provide such services is attributable to the termination without cause by an affirmative vote of a majority of our independent directors. Any outstanding Class B Units still subject to forfeiture will be forfeited immediately if the advisory agreement is terminated for any reason other than a termination without cause.”

The following disclosure replaces the first sentence under the heading “Special Limited Partner” on page 226 of the Prospectus.

“The special limited partner is entitled to receive subordinated distributions in connection with the sale of the assets of our operating partnership, upon a listing of our common stock on a national securities exchange, other liquidity events and the termination of the advisory agreement.”

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Plan of Distribution

The following disclosure replaces the second paragraph below the table under the heading “Dealer Manager and Compensation We Will Pay for the Sale of Our Shares” on page 230 of the Prospectus.

“We or our affiliates also may provide permissible forms of non-cash compensation pursuant to FINRA Rule 2310(c) to registered representatives of our dealer manager and the selling group participants, such as:

The value of such items of non-cash compensation to participating broker-dealers will be considered underwriting compensation in connection with this offering and will be paid from the dealer manager fee or reduce the dealer manager fee if paid directly by us or our advisor.”

The first paragraph under the heading “Subscription Process” on page 234 of the Prospectus is hereby deleted in its entirety and replaced with the following disclosure.

“To purchase shares in this offering, you must complete and sign the subscription agreement in the form attached hereto as Appendix C-1. You should pay for your shares by delivering a check for the full purchase price of the shares, payable to the applicable entity specified in the subscription agreement. Alternatively, unless you are an investor in Alabama, Arkansas, Kentucky, Maryland, Massachusetts, Nebraska, New Jersey, North Carolina, Oregon or Tennessee, you may complete and sign the multi-offering subscription agreement in the form attached hereto as Appendix C-2, which may be used to purchase shares in this offering as well as shares of other products distributed by our dealer manager, provided that you have received the relevant prospectus(es) and meets the requisite criteria and suitability standards for any such other product(s). You should pay for any shares of any other offering(s) as set forth in the multi-offering subscription agreement. You should exercise care to ensure that the applicable subscription agreement is filled out correctly and completely.”

The following disclosure is hereby added as a new sub-section under the section entitled “Plan of Distribution — Volume Discounts” on page 236 of the Prospectus.

“Purchase of Shares Subject to Volume Discount

In January 2015, we intend to enter into an agreement with a single investor (referred to in this prospectus as the “Major Investor”), whereby the Major Investor agrees to purchase during the course of this offering a minimum of $5,000,000 in value of shares of our common stock in consideration for reduced selling commissions and dealer manager fees. In exchange for the Major Investor’s agreement to purchase a minimum of $5,000,000 in value of shares of our common stock, we would sell such shares to the Major Investor at $23.125 per share, from which we would receive net proceeds of $22.50 per share. We expect that such purchases by the Major Investor would occur in multiple transactions during the course of this offering. The Major Investor would pay for all shares purchased in each transaction at the time of such transaction. Accordingly, the Major Investor would purchase from us a minimum of 216,216.22 shares (calculated by dividing the minimum purchase amount of $5,000,000 by the purchase price of $23.125 per share). We may issue fractional shares to the Major Investor. Other investors who wish to purchase a minimum of $5,000,000 in value of shares of our common stock during the course of our offering in consideration for reduced selling commissions and dealer manager fees also may purchase such shares at $23.125 per share.”

The following disclosure is added as the third sentence under the heading “Subscription Process” on page 236 of the Prospectus.

“Alternatively, unless you are an investor in Alabama, Arkansas, Kentucky, Maryland, Massachusetts, Nebraska, New Jersey, North Carolina, Oregon or Tennessee, you may complete and sign the multi-offering

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subscription agreement in the form attached hereto as Appendix C-2, which may be used to purchase shares in this offering as well as shares of other products distributed by our dealer manager; provided, however, that an investor has received the relevant prospectus(es) and meets the requisite criteria and suitability standards for any such other product(s).”

How To Subscribe

The second bullet point on page 236 of the Prospectus is hereby deleted in its entirety and replaced with the following disclosure.

Experts

The paragraph entitled “Experts” on page 240 of the Prospectus is hereby replaced with the following disclosure.

“The audited consolidated financial statements of American Realty Capital Healthcare Trust III, Inc. included in this prospectus and elsewhere in the registration statement have been so included in reliance upon the report of KPMG LLP, independent registered public accountants, upon the authority of said firm as experts in accounting and auditing in giving said report.”

Change in Auditor

The following disclosure is hereby inserted as a new section following the section entitled “Experts” on page 240 of the Prospectus.

“CHANGE IN AUDITOR

On January 22, 2015, Grant Thornton LLP, or Grant Thornton, resigned as the Company’s independent registered public accounting firm. Grant Thornton’s resignation was accepted by the Company’s audit committee.

Grant Thornton’s audit report on the Company’s consolidated financial statements for the period from April 24, 2014 to May 21, 2014 did not contain an adverse opinion or disclaimer of opinion, nor was it qualified or modified as to uncertainty, audit scope or accounting principles.

Since the Company’s establishment in April 2014 and through the end of the fiscal year ended December 31, 2014 and the subsequent interim period from January 1, 2015 through January 22, 2015, (i) there were no disagreements between the Company and Grant Thornton on any matters of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Grant Thornton, would have caused Grant Thornton to make reference to the subject matter of the disagreement in its report on the Company’s consolidated financial statements, and (ii) there were no “reportable events” as that term is defined in Item 304(a)(1)(v) of Regulation S-K.

The Company has provided Grant Thornton with a copy of the foregoing statements and has requested and received from Grant Thornton a letter addressed to the Securities and Exchange Commission stating that Grant Thornton agrees with the above statements.

On February 2, 2015, we engaged KPMG LLP, or KPMG, as our new independent registered public accounting firm for the fiscal year ended December 31, 2014. Our audit committee participated in and approved the decision to appoint KPMG.

Since our establishment in April 2014 and through the end of the fiscal year ended December 31, 2014 and the subsequent interim period from January 1, 2015 through February 2, 2015, neither we nor anyone

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acting on behalf of us, consulted KPMG regarding (i) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on our financial statements, and neither a written report nor oral advice was provided to us that KPMG concluded was an important factor considered by us in reaching a decision as to the accounting, auditing or financial reporting issue; or (ii) any matter that was either the subject of a disagreement (as defined in paragraph (a)(1)(iv) of Item 304 of Regulation S-K and the related instructions thereto) or a reportable event (as described in paragraph (a)(1)(v) of Item 304 of Regulation S-K).”

Financial Statements

The financial statements and the notes thereto, and the report of Grant Thornton, contained in the F pages of the Prospectus are hereby deleted in their entirety.

Annex A

On March 31, 2015, we filed with the Securities and Exchange Commission our Annual Report on Form 10-K for the fiscal year ended December 31, 2014. The Annual Report (excluding the exhibits thereto) is attached as Annex A to this Supplement No. 16.

Annex B

On May 13, 2015, we filed with the Securities and Exchange Commission our Quarterly Report on Form 10-Q for the quarter ended March 31, 2015. The Quarterly Report (excluding the exhibits thereto) is attached as Annex B to this Supplement No. 16.

Prior Performance Tables

The prior performance tables contained in Appendix A of the Prospectus are hereby replaced with the prior performance tables attached to this Supplement No. 16 as Appendix A. The revised prior performance tables supersede and replace the prior performance tables contained in the Prospectus.

Subscription Agreements

The form of subscription agreement included as Appendix C-1 to this Supplement No. 16 hereby replaces the form of subscription agreement included as Appendix C to the Prospectus.

The form of multi-offering subscription agreement included as Appendix C-2 to this Supplement No. 16 hereby is added as Appendix C-2 to the Prospectus.

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ANNEX A  

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

 

FORM 10-K

 

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

For the fiscal year ended December 31, 2014

OR

o		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: 333-196302

 

American Realty Capital Healthcare Trust III, Inc.

(Exact name of registrant as specified in its charter)

 

Maryland		38-3930747
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

405 Park Ave., 14th Floor New York, NY		10022
(Address of principal executive offices)		(Zip Code)

(212) 415-6500

(Registrant’s telephone number, including area code)

Securities registered pursuant to section 12(b) of the Act: None
Securities registered pursuant to section 12(g) of the Act: None

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.Yes o No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.Yes o No x

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 submitted electronically and posted on its corporate Web Site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).Yes x No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

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

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

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

There is no established public market for the registrant’s shares of common stock. The registrant is currently conducting the ongoing initial public offering of its shares of common stock pursuant to its Registration Statement on Form S-11 (File No. 333-196302), which shares are being sold at $25.00 per share, with discounts available for certain categories of purchasers. The registrant did not have any common stock held by non-affiliates as of June 30, 2014.

As of March 15, 2015, the registrant had 345,184 shares of common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s definitive proxy statement to be delivered to stockholders in connection with the registrant’s 2015 Annual Meeting of Stockholders are incorporated by reference into Part III of this Form 10-K. The registrant intends to file its proxy statement within 120 days after its fiscal year end.

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AMERICAN REALTY CAPITAL HEALTHCARE TRUST III, INC.
 
FORM 10-K
Year Ended December 31, 2014

		Page
PART I
Item 1. Business			1
Item 1A. Risk Factors			8
Item 1B. Unresolved Staff Comments			51
Item 2. Properties			51
Item 3. Legal Proceedings			51
Item 4. Mine Safety Disclosure			51
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities			52
Item 6. Selected Financial Data			55
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations			55
Item 7A. Quantitative and Qualitative Disclosures about Market Risk			66
Item 8. Financial Statements and Supplementary Data			66
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure			66
Item 9A. Controls and Procedures			66
Item 9B. Other Information			66
PART III
Item 10. Directors, Executive Officers and Corporate Governance			67
Item 11. Executive Compensation			67
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters			67
Item 13. Certain Relationships and Related Transactions, and Director Independence			67
Item 14. Principal Accounting Fees and Services			67
PART IV
Item 15. Exhibits and Financial Statement Schedules			68
Signatures			70

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Forward-Looking Statements

Certain statements included in this Annual Report on Form 10-K are forward-looking statements. Those statements include statements regarding the intent, belief or current expectations of American Realty Capital Healthcare Trust III, Inc. (the “Company,” “we” “our” or “us”) and members of our management team, as well as the assumptions on which such statements are based, and generally are identified by the use of words such as “may,” “will,” “seeks,” “anticipates,” “believes,” “estimates,” “expects,” “plans,” “intends,” “should” or similar expressions. Actual results may differ materially from those contemplated by such forward-looking statements. Further, forward-looking statements speak only as of the date they are made, and we undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time, unless required by law.