Good morning and welcome to the VEREIT 2016 Fourth Quarter and Year End Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Bonni Rosen, Director of Investor Relations. Please go ahead.

Thank you. Thank you for joining us today for the VEREIT 2016 fourth quarter and yearend earnings call. Joining me today are Glenn Rufrano, our Chief Executive Officer and Mike Bartolotta, our Chief Financial Officer. Today’s call is being webcast on our website at vereit.com in the Investor Relations section. There will be a replay of the call beginning at approximately 12:00 PM Eastern Time today. Dial-in for the replay is 1-877-344-7529, with a confirmation code of 10099562. Before I turn the call over to Glenn, I would like to remind everyone that certain statements in this earnings and business update call, which are not historical facts, will be forward-looking. VEREIT’s actual results may differ materially from these forward-looking statements and factors that could cause these differences are detailed in our SEC filings, including the Annual Report filed today. In addition, as stated more fully in our SEC reports, VEREIT disclaims any intent or obligation to update these forward-looking statements, except as expressly required by law. Let me quickly review the format of today’s call. First, Glenn will begin by providing a business and operational update, followed by Mike presenting our quarterly and yearend financial results. Glenn will then discuss 2017 guidance and highlights of our diversified portfolio. We will conclude today’s call by opening the line for questions. Glenn?

Thanks, Bonni. And thanks for joining our call today. In 2016 we substantially achieved the core components of our business plan that we outlined in August, 2015 and in certain areas exceeded expectations. Let me begin by highlighting a few accomplishments. As AFFO per diluted share for the year was $0.78 within our guidance range of $0.75 to $0.78. We completed $1.14 billion of dispositions were totaled nearly $2.6 billion since 2015, exceeding the top end of our original guidance by $400 million. Our balance sheet is stronger reflected by a reduction in our net debt to normalized EBITDA to 5.7 times better than the projected range of 6 to 7 and we received investment grade rating on our debt from both S&P and Fitch. Cole Capital finished the year ranked number four for non-listed REIT capital raise up from 13 in 2015. These achievements allowed us to go on the offense during the fourth quarter acquiring $80 million of assets on a leverage neutral basis. We’re pleased with our operations for the year with occupancy ending at 98.3% same store rent was up 0.1% reduced from 0.8% due to the impact of the Ovation bankruptcy. In 2016, we had 4.9 million square feet of leasing activity of which 3.6 million square feet were early renewals with tenants including T-Mobile, Abbott Labs, Del Monte and Netflix. The remaining 1.3 million square feet were 2016 vacancies or expirations. Of the early renewals, we recaptured 96% of the prior rents which will have a short-term effect on same store, for the 2016 vacancy and expirations we captured 99% of prior rent. Approximately 75% of this leasing activity was office and industrial. Our portfolio diversification was further enhanced as we implemented our calling process. At year end property type diversification was 62.6% retail,…

Thanks Glenn and thank you all for joining us today. We finished the year end on plan achieving AFFO of $0.78 per diluted share with $0.17 coming from the fourth quarter. During the quarter consolidated revenue was $351.9 million slightly below Q3 revenue of $362.9 million as we continue to successfully implement our disposition program. Net loss for the fourth quarter was $118.2 million versus net income of $30.2 million for the third quarter representing a difference of $148.4 million. However included in Q4 net loss was a number of non-operational charges including $120.9 million of Cole Capital goodwill impairment charge, $10.2 million relating to the increase write-off of program development cost and $5.2 million of compensation related charges, all of which resulted from a slower than originally anticipated capital raise for Cole this year. In addition, as we noted in our last call in Q3 we had a net gain on the disposition of property sold for that quarter of $28.1 million whereas in Q4, property sold resulted in a minor loss of $0.2 million or negative quarter-to-quarter charge of $28.3 million. It should be noted that for the full year 2016 the gain of disposition real estate sold and held for sale assets is $45.5 million. Lastly both Q4 tax expense and interest expense were more favorable than Q3 by $6.7 million and $5.3 million respectively. If you were to adjust all of these items, you will see a positive net income essentially the same as Q3. Well Cole has done a good job re-establishing its brand and raising capital. The industry environment has been difficult to predict leading us to reduce projections, which resulted in the 2016 goodwill impairment charge. FFO per diluted share for the fourth quarter was $0.05 as compared to $0.19 for the third…

Thanks, Mike. Let me turn to guidance for 2017. The AFFO per share between $0.70 and $0.73 which includes to $0.02 to $0.03 for Cole Capital. Dispositions and acquisitions each totaling $450 million to $600 million at cap rates ranging from 6.5 to 7.5 with dispositions more front end loaded and acquisitions back end loaded. Net debt to EBITDA in the target range of 5.7 to 6.0 real estate operations with average occupancy approximating 98% and same store rental growth approximating 0.5%. Cole Capital equity raised between $400 million and $500 million and $800 million to being of acquisitions on behalf of the Cole REITs. Diversification is one of our portfolios core attributes and we’ll continue strengthening it through the year. At approximately 63%, retailers are largest property types which includes restaurants at 24%, excluding restaurants retail has six of our top 10 tenants as well as highest occupancy at 99.7%. The largest retail component discount at 7.8% and exposures concentrated in family dollar general and also includes Wal-Mart and T.J. Maxx. Pharmacy comprise of 7.2% as primarily Walgreens and CBS. Grocery is 4.9% and our exposure includes average Albertsons, Kroger, Publix and Stop and Shop. Home and garden is 4.4% with the largest tenants being Tractor Supply, Home Depot and Lowe’s. The other retail sectors are approximately 2% or less. As you can see our retail has strong credits 47% of income from investment grade tenants. The past year we’ve seen a number of retailer issues some financial other structural. Focusing on those, let’s look at what’s not in our portfolio. Traditional department stores, such as Penny, Macy’s and Sears. We do have Cole’s which is investment grade and is less than 1%. In apparel we have no exposure to [indiscernible] Limited or American Eagle and [technical difficulty] With…

[Operator Instructions] and the first question comes from Andrew Rosivach with Goldman Sachs. Please go ahead.

Thanks for your comment on retail. There’s a rumor that you know a lot about the industry. I’m just curious we’ve always had in net lease this kind of bias of lower cap rates and lower exposure to retail is potentially being positive, one of your own goals is to reduce the office exposure. I’m just curious given the pressures that we were having in the industry could that potentially change especially what you guys are looking and doing on the buy side.

It’s a real good question Andy. In many meetings I’ve been asked about the three property types and I’ve had and I’m going to call some younger people come in say, isn’t office at a favor today and retail is in favor and my answer is generally been, that may be right today, but if you were older like I am, you’d realize that at times offices in favor and out of favor, industrial is in favour and out of favor and retail is in favor and out of favor. We’re moving in one of those directions as we speak. We clearly had a bit more retailers problems and rightfully so caused by the internet and we’re seeing some structural changes and also some financial changes, but that’s natural it’s going to happen. I’m not sure any of us is smarter enough to know over the long periods of time which of these sectors will be in favor and out of favor. But I do know if we diversify and we have good real estate in those sector we have a better, stronger portfolio. To your point I think, on retail we did spend some more time on retail because of what has been going on in the business and I have been let time it in and it’s very important to understand our credits. So as a simple answer, Andy we think that three property types in proportion that we have make sense. We’re not smart enough to know in any given time what’s in favor, not in favor but if we have good fundamental real estate and good diversification we will have a long-term stable portfolio.

Understood and just as a follow-up, within that lease is - are broader concerns about retail starting to get priced in higher retail cap rates?

They maybe, although I’m not sure we’ve seen them yet. I think the quality differences are very important in that equation. I personally still would believe in high quality retail or some old shopping center or single tenant and if the market booked at that way, I don’t think there will be much difference. What I do believe is happening is that if you start talking and be in certainly C levels, there is a large divergence than we’ve seen in the past.

Got it, thank you sir.

Our next question comes from Anthony Paolone with J.P. Morgan. Please go ahead.

As you look to do acquisitions in 2017, where do you see the best values right now, where do you see the most compelling buys, whether it’s investment grade, non-investment grade, property type or certain type of tenant industry?

Well Anthony, if we break down our thoughts on acquisitions because we’re lightning up in office. We will not be in the acquisition mode, certainly we’re in - for office now and our restaurant exposure certainly in dining mostly because the Red Lobster puts into position where we would not - for diversification purposes be buying restaurant. So if we eliminate those we’re back to retail in many of the areas that I just talked about and industrial. If I stayed with industrial we did purchase just close last week, at 1 million square foot Best Buy industrial distribution plant North of Columbus at 7.1 cap rate and we believe we can find some industrial although hard, which can provide value. There we have to look to credit, but also the physical nature of the plant and location. If we can find the right fundamentals we believe there are some value in industrial although it’s not going to be easy to find. In the retail front, as we just talked about we’re in the off price sector, we’re in the necessity shopping sector and we do believe there’s some retail that couple provide value. It could be in primary or secondary markets as long as the credit in the demographic fit the merchandising of the tenant. So we’re going to be as concerned about whether that tenant can merchandise properly to the demographics as we all are, whether it’s a primary market or a secondary market and in those categories that I went through you’re starting with grocer and Select Sports has beauty and so forth, we do believe there is some value in there that we can take advantage of especially with the acquisitions arms that we have and have had over the years, where we believe we have very good ability to look at the market and integrate. For instance let me just update part of your question, can you access the market? We have $21.6 billion of opportunities in 2016 brought to us, we closed $760 million. With those opportunities and the categories we see, we do believe we can find value.

Okay, thanks and then in guidance. Is there much contemplated as it relates to the balance sheet. I don’t know if you have lot to do this year, but would anything - now that you assume there.

No I mean, the balance sheet in 2017 Anthony, its Mike. We don’t have about little less than $300 million of mortgages that are going to turn and we’ll put those mortgages as they turn onto our line and eventually, when we have the right size number we’ll take out in a unsecured bond. So we will start to look at, we have some converts that are coming due in February of 18, so we will start to look at those potentially some time later in the year and we also have about $500 million of our term debt that converts in 18, but has a one-year extension. So I think what we have right now is some optionality [ph] to look at some things a little bit longer out than one-year and we will be looking at them. But we can act or not act depending on what the market does.

Okay, thanks and then, last couple questions on Cole. I need to get to your capital raising goals it’s almost doubling the pace you guys saw in January. How comfortable are you with that? Like what kind of gives you comfort on that front?

Well in part, Anthony we don’t have CCIP/3 on track yet and we do expect that will come on, as I mentioned, we had 16 new selling agreements for CCIP/3 that just came on at the end of the last year, so they sure start picking this up this year. We also are excited about having Cetera back on. Cetera has over 7,000 advisors and when they were in the top three with Cole in 2014, it has been a great platform for us and they just came on, we actually sold our first product with them two days ago. So the culmination of CCIP/3 Cetera and we’re continuing to work with some of the larger broker-dealer platforms. Would give us some comfort we can increase throughput through this year - variable is the market and we don’t forget about that. Stanger is projecting $5.8 billion this year from the $4.5 billion last year. Blackstone has a good part of that, but there is some increase expected. Some increase in the market, some increase in our advisors coming on and CCIP/3 gives us some comfort that we can reach those goals.

Okay thanks and then just last one on Cole. Longer term any change in terms of how you think about that business fitting in, with the rest of the company especially you mentioned Blackstone it seems like others would like to be in that space overtime. Does it make you change your thoughts on where to go with the business?

We continue to start with, let’s make it as valuable as possible and we’re making some good headway there. I wish the market was better. When you have a better oiled machine in a better market, it’s easier to make a decision on value and whether or not it’s value to the public company in its stock price, is adequate. We think we have a little more room in 2017 to improve Cole especially by bringing some larger platforms. We may be in a position later on or at some point this year to understand how the public market is valuing yet relative to us, which will be a very important element in terms of, how we see ourselves long-term.

Okay, great. Thanks for the time.

Our last question is from Vineet Khanna with Capital One Securities. Please go ahead.

Glenn just going on that line of thought for Cole. Can you talk about - Blackstone is obviously going through the wirehouse is that something that would be of interest to Cole as you sort of look to expand?

It certainly would be, but what Blackstone has done is been really very good, we hope for the whole industry having the wirehouses sell their product, we would like to piggyback on that very frankly, that would be very good for us and we continue to work with the wirehouses as we do the larger broker-dealers to help us sell more product overtime.

Okay and then just on last one on Cole here. Just have you seen any impacts sort of from the uncertainty that’s come up around the fiduciary rule, I mean clearly you were able to bring Cetera on forward, but have there any other sort of issues with the broker-dealers as a result of questions around the fiduciary rule?

I think we’d all agree that fiduciary rule is a good thing, people should be fiduciaries. The problem has been the definition of the fiduciary. What has been happening is, in light of poor definition in my view from the deal on that. The broker-dealer themselves have been creating definitions that they believe work and that’s going to be very helpful this year. For instance, if you have INEP product with no commission that’s an easy choice, but T shares under certain circumstances now are being considered applicable to that rule, so it’s working its way through the system as we speak larger companies have come up with their own internal proposals on how to meet that rule and as those decisions get made, it will help us move forward in 2017.

Okay great and then just shifting to sort of the real estate side of things. On the acquisition front in 2017, is there any build-to-suit contemplated, I mean you’ve got sort of the cap lease stuff that you guys acquired long ago, is that something that’s sort of under consideration at this point.

I’m sorry, did you say disposition or acquisition?

Acquisition, as it pertains to sort of build-to-suit.

I see. We have been looking at a number build-to-suits, especially in the industrial area. Internally we have a - it’s a small construction group, so that we can monitor construction overtime and we can be pure takeout from a construction loan or we could actually fund along the way and with our internal group and perhaps an outside consultant. Make sure, we’re funding adequately for the ultimate takeout. As I speak to Paul and Tom about those that business, we can see that build-to-suit is a 50 basis point in many cases increase over a normal cap rate and if we can minimize the risk to get there it’s a very good way for us to move forward and we’re looking at number of those transactions right now.

Okay great and then just last from me, thanks for the update on the sort of the litigation. What are the prospects for settlement before the May meeting date?

We have our General Counsel in the room, who’s - can’t give an answer. I don’t know and I’m sorry Vineet it’s one of those things, I’d have to kill, if I knew. So realistically it’s and I don’t mean to make joke of it, it’s very important but it’s not something that we can have a discussion on.

Okay, well I appreciate the consideration and thanks for the time.

Our next question is from Michael Knott with Green Street Advisors. Please go ahead.

Just question for you on your anticipated acquisition, disposition guidance number for 2017. Just curious if you feel like those are light particularly on one side or the other and then maybe can you just give a little bit more color on your comment on the front end loaded and back end loaded with respect to those and the thought process behind that?

Sure. I’ll start with dispositions. We’re just - as we’ve been focused on dispositions Michael as you know, the dispositions that we’re targeting in 2017 are office to get that 20% below number and Red Lobster so it’s a very focused approach with those two and we will always have some non-core that we believe putting capital into would not make sense. So we’ll have those category, so it’s very specific and we feel pretty good about the numbers, the 450 to 600 surrounding those specific categories. In terms of acquisitions and I think we’ve had this conversation in 17 years as a CEO I’ve never given acquisition guidance. But in our business which is very acquisition-oriented that didn’t seem to make much sense. So we spent a good amount of time looking at our acquisition, you see we had some acquisitions to-date and looking at our pipeline and where we are in terms of letters of intent and so forth and so we felt, we should come up with a number that made sense and we think the 450 to 600 make sense, could it be more, if we find appropriate acquisitions it could be more, but we never want to be put in a box. Just like we’re a fund that have three years to invest and if you don’t invest the money you’ll lose it, we don’t want to be that. We’re not a fund that have to invest. We’re public company that invests widely for their shareholders and we’re going to continue with that psyche. In terms of the front end loaded issue with dispositions, we have been disposing for two years, so we have dispositions that we believe will close early on in the year and so those are factual relationships. In terms of acquisitions we just want to be cautious so that we have the appropriate time to make the right decision.

Okay, that’s really helpful. Thanks and then just curious maybe broadly if you’re seeing any changes in terms of cap rates out there I guess maybe more so on the disposition side for you, since that’s where you’ve been more focused, but just curious what you’re maybe seeing and then maybe any specific comments you could share with respect to, how the market is evaluating Red Lobster pricing today and that opportunity?

In terms of cap rates, I’ve also felt that equity follows debt and if I pick two points in time, I think we’ve had some big differences here, at the end of last year right after the election rates went up as we all know, but we looked at the absolute rate of increase in the bond market, that wasn’t much spreads came in, in the last half of the year, as a matter of fact in last two months of the year. In fact, there were some large deals done Simon, Kimco did some very large bond transactions at very good absolute rates because spreads came in. mortgage rates didn’t come in at the end of the last year. The mortgage market was at the end of its one-year cycle and spreads didn’t come in at all. And if you tried to get a mortgage in the last two months of last year, you got stuck with another 50 to 70 bps more. I believe and our teams believe because we had this conversation it’s already changed this year. The bottom market is still [indiscernible] because there’s capital there, but the mortgage in the market now has new allocations and the spreads in the market have absolutely come in the last couple of months. And so given that, if we don’t have not seen a lot of change in cap rates currently that would have the equity being led by the debt and on top of that, there seems to be a pretty good flow of capital, so at this time these are generalities that we don’t see big differences in cap rates. If I try to dissect them the way you’ve asked larger deals, portfolio deals could have more of a discount, a little cap rate than smaller deals, but across the board we’re seeing general flatness. And then in terms of Red Lobster, not much changed. I will tell you that, a big trend here that will be important it’s the 1031. In fact just talking to some brokers the other day the 1031 player seem to be running right now to make deals perhaps ahead of what could be a change in the tax code next year. so we have not seen much change, the basic deals are 5.5 to 6 and we spread about a point in our joint venture with Golden Gate and so our effective rates have been closed to 7.

Okay, thanks a lot.

Our next question comes from Mitch Germain at JMP Securities. Please go ahead.

This is Peter on for Mitch. Just curious, could you guys quantify the Red Lobster exposure today and what’s left in the forward sales agreement and then maybe what do you guys think gets done this year versus 2018? Thanks.

In terms of the dispositions, we closed about $246 million last year and we think it will be somewhere in the $200 million, $250 million range this year. So that’s how we would quantify what we think we could do. As of now, the effective cap rate 7% that’s realistic for the $250 million for this year. Was that was the primary question? Did I miss the second question?

No, that was it. Just what do you guys think gets done this year and then what would be left for 2018?

If we get to where we want to get to this year, we should be in the 6%, 6.5% range somewhere like that which would mean we may have a little left because we like 5% as a goal, we could have some left in 2018, but we don’t think a lot.

Great, thanks so much.

Our next question is from Joshua Dennerlein with Bank of America. Please go ahead.

I’m curious on how you think about the double net leases in your portfolio. Is that something that would perhaps fall under your disposition bucket or something that move away from overtime? I don’t know you would stay in your acquisitions.

It’s always a question of risk reward. When you’re buying asset that’s triple net there’s a risk that’s different from double net. Double net just means in many cases roof [ph] parking lots and so forth. We are fully equipped as a full service real estate operating company to know and understand roofs [ph] and parking lots and so we don’t have a concern relative to having to buy or sell something that’s double net, that is not going to fall in the question because we know how to manage it. We just want to make sure that the risk return relationship makes sense and as you know, it’s far different a double net is far different than running a shopping center or a mall or multi-family property. So we’re very comfortable with double net, we’ll look at both and it’s just a question of the risk return and whether or not we’re being paid for that risk and whether we could manage that risk which we believe, we can do.

Okay, thanks and then on the fee and leasehold consolidation that you did on three properties in 4Q, are there more of those in the portfolio? And just how the economic for that works? You guys own the land book or then that you own everything or?

Sure just to define, these are three properties. We own the leasehold subject to ground lease payment. The ground lessor came to us and asked that we consider buying the fee and I wish we had a lot of them, we love that. We don’t have many more. What we did here was, we bought the fees on the three properties at a 5.5% cap rate but that allowed us to merge the fee and leasehold interest in our view create value and more importantly two of those three properties were properties in which we renegotiated long-term leases, one of its Del Monte, one of Nesli [ph]. So we were able to buy the fee, negotiate a long-term lease, merge the two estates and create significant value for those properties.

Okay thanks and then just one question on the same store rent guidance of 0.5%. Does that include the Ovation bankruptcy still or anything kind of holding that back?

No that includes the Ovation bankruptcy.

Okay, do you know that number without the Ovation bankruptcy?

It would be a bit higher but not dramatically because it will only effect in the first quarter.

Okay, all right. Thank you.

And our next question is from [indiscernible]. Please go ahead.

Well I guess first on the balance sheet, you guys have done a remarkable job bringing down your debt EBITDA bringing down your leverage, you’re not sitting at 5,7 net debt-to-EBITDA. Just curious on your inclination perhaps to incur a bit more leverage for some acquisitions given the improvement in the balance sheet but also given what the stock price is?

We’ve reflected the target this year of 5, 7 to 6. And where we think we’d like to stay with that ratio. Mike tell us, I think we’re BBB, what do you think?

No I think we’re BBB obviously two out of the three and rated us, basically the equivalent of BBB negative and I think of in lieu of passage of time, hopefully short time we’ll get the BBB. But I think if we’re there where we need to be and so I would not see us taking on significantly more debt, we’ll do things in a leverage neutral basis going forward, but staying at a BBB level.

Okay and then as you can see part an earlier question was the matching of disposition and acquisitions and so we’re creating our own internal capital to match the acquisition program selling assets that will provide us better diversification in buying assets to strengthen portfolio in that process, we do not have to increase it.

Appreciate that. So, maybe a bit more discussion around the retail tenant watch list today beyond the more obvious hhgregg and Gander any other kind of incrementally on that list today and then maybe you can share a few names or perhaps sometimes that you’re perhaps concerned about.

We do - I have it in front of me, we do it each quarter. We’re about on probability weighted basis about 1.8% in terms of where we see rent issues, but it’s really scattered the purpose of actually revealing many of our retailers who I think have some of the issues that we’ve all been talking about earlier is that, we don’t have many we mentioned hhgregg we have six stores it’s very small, we have KANs [ph], we have two stores, we have one Gander Mountain, we talked about Logans that we have seven Logans but we renegotiated those deals, so they’re all set. We have six Ruby Tuesday’s. Ruby Tuesday is non-bankruptcy but there are some issues with them, but they’re very small piece of us and so we don’t have a large concentration tier, it’s a bunch of smaller credits which we care a lot about because we want to make sure we get a re-nickel but I can’t tell you, there’s something, there’s so many on our list that is big.

Fair enough and then one last one, final I have you. It’s been you’ve accomplished a lot the last couple of years since joining. I’m curious now that you stand here today thinking about where you’re taking the company next you lead out some goals for reduction to certain asset types, tenants, balance sheet but just curious how you see yourself perhaps solving the valuation gap that still exists between you and some of your peers. Beyond obviously the litigation [indiscernible] perhaps you could share some thoughts on strategically the next few milestones that you’re thinking of where you’re taking this company the next couple of years that we should be thinking about.

Well as you can see what we’ve been focusing on portfolio, portfolio and making sure that it’s well diversified portfolio and balance sheet, balance sheet. Well we continue to work on those two, I would expect that given the right portfolio and we’ll be there soon and the balance sheet we have that we should be in a position which is really a key position for us to start growing AFFO. I mean that’s - I think our guidance this year is reasonable at $0.70 and $0.73 it reflects what we had to do in the balance sheet to get to investment grade we’re there. I was hoping to expect that the gap closes and we’ll continue to close as the market sees us in a position to grow AFFO and we believe this is the year, we should stabilize ourselves.

Got it. Thank you.

This concludes our question-and-answer session. I would like to turn the conference back over to Glenn Rufrano for any closing remarks.

Thanks everybody for joining us today and look forward to your thoughts and comments, talk to you soon. Bye now.