Exhibit 10.1


 


ADVISORY AGREEMENT


 


BY AND AMONG


 


PHILLIPS EDISON GROCERY CENTER REIT III,
INC.,


 


PHILLIPS EDISON GROCERY CENTER OPERATING
PARTNERSHIP III, L.P.


 


AND


 


PECO-GRIFFIN REIT ADVISOR, LLC


 


Dated October 5, 2016


 




     


     


    

  


TABLE OF CONTENTS


 


	 	 	PAGE
	 	 	 
	ARTICLE  I	DEFINITIONS	1
	 	 	 
	ARTICLE  II	APPOINTMENT	7
	 	 	 
	ARTICLE  III	AUTHORITY OF THE ADVISOR	7
	Section 3.1	General	7
	Section 3.2	Powers of the Advisor	7
	Section 3.3	Approval by Directors	7
	Section 3.4	Modification or Revocation of Authority of Advisor	7
	 	 	 
	ARTICLE  IV	DUTIES OF THE ADVISOR	7
	Section 4.1	Organizational and Offering Services	8
	Section 4.2	Acquisition Services	8
	Section 4.3	Asset Management Services and Administrative Services	9
	 	 	 
	ARTICLE  V	BANK ACCOUNTS	11
	 	 	 
	ARTICLE  VI	RECORDS; ACCESS	11
	 	 	 
	ARTICLE  VII	OTHER ACTIVITIES OF THE ADVISOR	11
	Section 7.1	General.	11
	Section 7.2	Policy with Respect to Allocation of Investment Opportunities	12
	 	 	 
	ARTICLE  VIII	LIMITATIONS ON ACTIVITIES	12
	 	 	 
	ARTICLE  IX	FEES	12
	Section 9.1	Acquisition Fees	12
	Section 9.2	Asset Management Fee	13
	Section 9.3	Disposition Fees	13
	 	 	 
	ARTICLE  X	EXPENSES	13
	Section 10.1	Reimbursable Expenses	13
	Section 10.2	Other Services	15
	Section 10.3	Timing of and Limitations on Reimbursements	15
	 	 	 
	ARTICLE  XI	NO PARTNERSHIP OR JOINT VENTURE	15
	Section 11.1	Relationship	15
	Section 11.2	Time Commitment	16
	 	 	 
	ARTICLE  XII	RELATIONSHIP WITH DIRECTORS	16
	 	 	 
	ARTICLE  XIII	REPRESENTATIONS AND WARRANTIES	16
	Section 13.1	The Company	16
	Section 13.2	The Operating Partnership	16
	Section 13.3	The Advisor	17


 




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	ARTICLE  XIV	TERM; TERMINATION OF AGREEMENT	18
	Section 14.1	Term	18
	Section 14.2	Termination by Any Party	18
	Section 14.3	Termination by the Advisor	18
	Section 14.4	Termination by the Company	18
	Section 14.5	Survival	18
	 	 	 
	ARTICLE  XV	PAYMENTS TO AND DUTIES OF PARTIES UPON TERMINATION	18
	Section 15.1	Reimbursable Expenses and Earned Fees	18
	Section 15.2	Advisor’s Duties Upon Termination	18
	Section 15.3	Non-Solicitation	19
	 	 	 
	ARTICLE  XVI	ASSIGNMENT TO AN AFFILIATE	19
	 	 	 
	ARTICLE  XVII	INCORPORATION OF THE CHARTER AND THE OPERATING PARTNERSHIP AGREEMENT	19
	 	 	 
	ARTICLE  XVIII	 INDEMNIFICATION BY THE COMPANY AND THE OPERATING PARTNERSHIP	20
	 	 	 
	ARTICLE  XIX	INDEMNIFICATION BY ADVISOR	21
	 	 	 
	ARTICLE XX	LIMITATION OF LIABILITY	21
	 	 	 
	ARTICLE XXI	NOTICES	21
	 	 	 
	ARTICLE  XXII	MODIFICATION	22
	 	 	 
	ARTICLE  XXIII	 SEVERABILITY	22
	 	 	 
	ARTICLE XXIV	CONSTRUCTION/GOVERNING LAW	22
	 	 	 
	ARTICLE  XXV	ENTIRE AGREEMENT	22
	 	 	 
	ARTICLE  XXVI	INDULGENCES, NOT WAIVERS	22
	 	 	 
	ARTICLE XXVII	GENDER	23
	 	 	 
	ARTICLE XXVIII	TITLES NOT TO AFFECT INTERPRETATION	23
	 	 	 
	ARTICLE XXIX	EXECUTION IN COUNTERPARTS	23
	 	 	 
	ARTICLE XXX	RIGHTS OF THE ADVISOR AND ITS AFFILIATES	23


 




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ADVISORY AGREEMENT


 


THIS ADVISORY AGREEMENT,
dated as of October 5, 2016, is entered into among PHILLIPS EDISON GROCERY CENTER REIT III, INC., a Maryland corporation (the “Company”),
PHILLIPS EDISON GROCERY CENTER OPERATING PARTNERSHIP III, L.P., a Delaware limited partnership (the “Operating Partnership”)
and PECO-GRIFFIN REIT ADVISOR, LLC, a Delaware limited liability company (the “Advisor”).


 


WITNESSETH


 


WHEREAS, the Company intends
to raise capital pursuant to the issuance of Class A Shares of Common Stock $0.01 par value per share (the “Class A Shares”)
in a private offering pursuant to a Confidential Private Placement Memorandum (the “Memorandum”);


 


WHEREAS, the Company intends
to qualify as a REIT, and to invest its funds in investments permitted by the terms of the Company’s charter and Sections
856 through 860 of the Code;


 


WHEREAS, the Company is
the general partner of the Operating Partnership;


 


WHEREAS, the Company and
the Operating Partnership desire to avail themselves of the experience, sources of information, advice, assistance and certain
facilities available to the Advisor and its Affiliates and to have the Advisor undertake the duties and responsibilities hereinafter
set forth, on behalf of, and subject to the supervision of the Board of Directors of the Company, all as provided herein; and


 


WHEREAS, the Advisor is
willing to undertake to render such services, subject to the supervision of the Board of Directors, on the terms and conditions
hereinafter set forth.


 


NOW, THEREFORE, in consideration
of the foregoing and of the mutual covenants and agreements contained herein, the parties hereto agree as follows:


 


Article I


DEFINITIONS


 


As used in this Advisory
Agreement, the following terms have the definitions hereinafter indicated:


 


“Acquisition Expenses”
means expenses incurred by the Company, the Operating Partnership, the Advisor or any of their affiliates in connection with the
sourcing, selection, evaluation and acquisition of, and investment in, Properties, whether or not acquired or made, including but
not limited to legal, tax and due diligence fees and expenses (whether performed by a third party or internally by the Advisor
or any of its Affiliates), travel, travel related expenses, communications expenses, costs of financial analysis, appraisals and
surveys, nonrefundable option payments on Property not acquired, accounting fees and expenses (whether performed by a third party
or internally by the Advisor or any of its Affiliates), computer use-related expenses, architectural and engineering reports, environmental
reports, title insurance and escrow fees, third party brokerage fees and expenses, and personnel and other direct expenses related
to the selection and acquisition of Properties 


 




    	 	1	 



     


    

 


“Acquisition Fee”
means any and all fees and commissions, exclusive of Acquisition Expenses, paid by any Person to any other Person (including any
fees or commissions paid by or to any Affiliate of the Company or the Advisor) in connection with the making or investing in mortgage
loans or the purchase, development or construction of a Property, including, without limitation, real estate commissions, acquisition
fees, finder’s fees, selection fees, Development Fees and Construction Fees (except as provided in the following sentence),
nonrecurring management fees, consulting fees, loan fees, points, or any other fees or commissions of a similar nature. Excluded
shall be any commissions or fees incurred in connection with the leasing of any Property, and Development Fees or Construction
Fees paid to any Person or entity not affiliated with the Advisor in connection with the actual development and construction of
any Property. This fee is paid to the Advisor pursuant to Section 9.1 hereof.


 


“Advisor” means
the Person responsible for directing or performing the day-to-day business affairs of the Company and the Operating Partnership,
including a Person to which an Advisor subcontracts substantially all such functions. The Advisor is PECO-Griffin REIT Advisor,
LLC or any Person which succeeds it in such capacity.


 


“Advisory Agreement”
means this Advisory Agreement among the Company, the Operating Partnership and the Advisor pursuant to which the Advisor will direct
or perform the day-to-day business affairs of the Company and the Operating Partnership, as it may be further amended or restated
from time to time.


 


“Affiliate” or
“Affiliated” means, as to any individual, corporation, partnership, trust, limited liability company or other legal
entity (other than the Company): (a) any Person or entity, directly or indirectly owning, controlling, or holding with power to
vote ten percent (10%) or more of the outstanding voting securities of another Person or entity; (b) any Person ten percent (10%)
or more of whose outstanding voting securities are directly or indirectly owned, controlled or held, with power to vote, by such
other Person; (c) any Person or entity directly or indirectly through one or more intermediaries controlling, controlled by, or
under common control with another Person or entity; (d) any officer, director, general partner or trustee of such Person or entity;
and (e) if such other Person or entity is an officer, director, general partner, or trustee of a Person or entity, the Person or
entity for which such Person or entity acts in any such capacity. An entity shall not be deemed to control or be under common control
with an Advisor-sponsored program unless (i) the entity owns 10% or more of the voting equity interests of such program, or (ii)
a majority of the board of directors (or equivalent governing body) of such program is composed of Affiliates of the entity.


 


“Assets” means
any and all GAAP assets including but not limited to all real estate investments (real, personal or otherwise), tangible or intangible,
owned or held by, or for the account of, the Company or the Operating Partnership, whether directly or indirectly through another
entity or entities, including Properties.


 


“Asset Management Fee”
means the monthly fee paid to the Advisor pursuant to Section 9.2 hereof.


 


“Average Invested Assets”
means, for a specified period, the average of the aggregate GAAP basis book carrying values of the Assets invested, directly or
indirectly, in equity interests in and loans secured, directly or indirectly, by real estate before reserves for depreciation or
bad debts or other similar non-cash reserves, computed by taking the average of such values at the end of each month during such
period.


 


“Board of Directors”
or “Board” means the individuals holding such office, as of any particular time, under the Charter of the Company,
whether they are the Directors named therein or additional or successor Directors.


 




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“Bylaws” means
the bylaws of the Company, as the same may be amended from time to time.


 


“Charter” means
the charter of the Company, including the articles of incorporation and all articles of amendment, articles of amendment and restatement,
articles supplementary and other modifications thereto as filed with the State Department of Assessments and Taxation of the State
of Maryland.


 


“Class A Share”
has the meaning set forth in the Recitals hereof.


 


“Code” means
the Internal Revenue Code of 1986, as amended from time to time, or any successor statute thereto. Reference to any provision of
the Code shall mean such provision as in effect from time to time, as the same may be amended, and any successor provision thereto,
as interpreted by any applicable regulations as in effect from time to time.


 


“Common Stock”
means the Company’s common stock, including the Class A Shares, the terms and conditions of which are set forth in the Charter.


 


“Company” means
Phillips Edison Grocery Center REIT III, Inc., a corporation organized under the laws of the State of Maryland.


 


“Competitive Real Estate
Commission” means a real estate or brokerage commission paid (or, if no commission is paid, the amount that customarily would
be paid) for the purchase or sale of a Property that is reasonable, customary and competitive in light of the size, type and location
of the Property.


 


“Construction Fee”
means a fee or other remuneration for acting as general contractor and/or construction manager to construct, supervise or coordinate
leasehold or other improvements or projects, or to provide major repairs or rehabilitation for a Property.


 


“Contract Purchase
Price” means the amount actually paid or allocated in respect of the purchase, development, construction, or improvement
of a Property, inclusive of the amount of any debt associated with, or used to fund the investment in, such Property, but exclusive
of Acquisition Fees and Acquisition Expenses.


 


“Contract Sales Price” means the total
consideration provided for in the sales contract for the sale of a Property.


 


“Cost of Assets”
means, with respect to a Property, the purchase price, Acquisition Expenses, capital expenditures and other customarily capitalized
costs, but shall exclude Acquisition Fees associated with such Property.


 


“Dealer Manager”
means Griffin Capital Securities, LLC, an Affiliate of the Advisor, or such other Person or entity selected by the Board of Directors
to act as the dealer manager for the offering of the Stock. Griffin Capital Securities, LLC is a member of the Financial Industry
Regulatory Authority.


 


“Development Fee”
means a fee for the packaging of a Property, including negotiating and approving plans, and undertaking to assist in obtaining
zoning and necessary variances and financing for the specific Property, either initially or at a later date.


 


“Director” means
an individual who is a member of the Board of Directors.


 




    	 	3	 



     


    

  


“Disposition Fee”
means the fee paid to the Advisor pursuant to Section 9.3 hereof.


 


“Distributions”
means any dividends or other distributions of money or other property paid by the Company to the holders of Common Stock or preferred
stock, including dividends that may constitute a return of capital for federal income tax purposes.


 


“Excess Amount”
has the meaning set forth in Section 10.3(b) hereof.


 


“Excess Expense Guidelines”
has the meaning set forth in Section 10.3(b) hereof.


 


“Expense Year”
has the meaning set forth in Section 10.3(b) hereof.


 


“GAAP” means
generally accepted accounting principles consistently applied as used in the United States.


 


“Independent Director”
has the meaning set forth in the Charter.


 


“Joint Venture”
or “Joint Ventures” means those joint venture or general partnership arrangements in which the Company or the Operating
Partnership is a co-venturer or general partner which are established to acquire Properties.


 


“NASAA” means
the North American Securities Administrators Association, Inc.


 


“NASAA Net Income”
means for any period, the total revenues applicable to such period, less the total expenses applicable to such period excluding
additions to reserves for depreciation, bad debts or other similar non-cash reserves; provided, however, NASAA Net
Income for purposes of calculating total allowable Operating Expenses shall exclude the gain from the sale of the Company’s
or the Operating Partnership’s Assets.


 


“NASAA REIT Guidelines”
means the Statement of Policy Regarding Real Estate Investment Trusts published by the North American Securities Administrators
Association, Inc. as revised and adopted by the NASAA membership on May 7, 2007, and as in effect on the date hereof.


 


“Offering” means
an offering of Stock pursuant to the Memorandum.


 


“Operating Expenses”
means all direct and indirect costs and expenses incurred by the Company, as determined under GAAP, which in any way are related
to the operation of the Company or to Company business, including advisory fees, but excluding (a) the expenses of raising capital
such as Organizational and Offering Expenses, legal, audit, accounting, underwriting, brokerage, listing, registration, and other
fees, printing and other such expenses and taxes incurred in connection with the issuance, distribution, transfer, registration
and listing of the Stock on a national securities exchange, (b) interest payments, (c) taxes, (d) non-cash expenditures such as
depreciation, amortization and bad debt reserves, (e) Acquisition Fees and Acquisition Expenses, (f) real estate commissions on
the Sale of Property, and other expenses connected with the acquisition and ownership of real estate interests, mortgage loans,
or other property (such as the costs of foreclosure, insurance premiums, legal services, maintenance, repair, and improvement of
property) and (g) any incentive fees which may be paid in compliance with the NASAA REIT Guidelines. The definition of “Operating
Expenses” set forth above is intended to encompass only those expenses which are required to be treated as Operating Expenses
under the NASAA REIT Guidelines. As a result, and notwithstanding the definition set forth above, any expense of the Company which
is not an Operating Expense under the NASAA REIT Guidelines shall not be treated as an Operating Expense for purposes hereof.


 




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“Operating Partnership”
means Phillips Edison Grocery Center Operating Partnership III, L.P., a Delaware limited partnership.


 


“Operating Partnership
Agreement” means the Limited Partnership Agreement of the Operating Partnership, as amended and restated from time to time.


 


“OP Unit” means
a unit of limited partnership interest in the Operating Partnership.


 


“Organizational and
Offering Expenses” means any and all costs and expenses incurred by the Company, the Advisor or any Affiliate of either in
connection with and in preparing the Company for the offering and distributing its Stock, including any registration thereof, whether
performed by a third party or internally by the Advisor or its Affiliates, which may include, but are not limited to, (a) total
underwriting and brokerage discounts and commissions (including fees of the underwriters’ attorneys), (b) legal, tax, accounting
and escrow fees, (c) expenses for printing, engraving, amending, supplementing and mailing, (d) distribution costs, (e) compensation
to employees while engaged in registering, marketing and wholesaling the Stock or providing administrative services relating thereto,
(f) telegraph and telephone costs, (g) all advertising and marketing expenses (including the costs related to investor and broker-dealer
sales meetings), (h) charges of transfer agents, registrars, trustees, escrow holders, depositories, experts, (i) fees, expenses
and taxes related to the filing, registration and qualification of the sale of the Securities under Federal and State laws, including
accountants’ and attorneys’ fees and other accountable offering expenses, (j) amounts to reimburse the Advisor for
all marketing related costs and expenses such as compensation to and direct expenses of the Advisor’s employees or employees
of the Advisor’s Affiliates in connection with registering and marketing the Stock, (k) travel and entertainment expenses
related to the offering and marketing of the Stock, (l) facilities and technology costs and other costs and expenses associated
with the offering and ownership of the Stock and to facilitate the marketing of the Stock including web site design and management,
(m) costs and expenses of conducting training and educational conferences and seminars, (n) costs and expenses of attending broker-dealer
sponsored retail seminars or conferences, and (o) payment or reimbursement of bona fide due diligence expenses, including compensation
to employees while engaged in the provision or support of bona fide due diligence services.


 


“Person” shall
mean any natural person, partnership, corporation, association, trust, limited liability company or other legal entity.


 


“Property” or
“Properties” means the real properties or real estate investments or any other asset (including any investments in
mortgage loans and other types of real estate related debt financing, including, mezzanine loans, bridge loans, convertible mortgages,
wraparound mortgage loans, construction mortgage loans, loans on leasehold interests and participations in such loans), which are
acquired by the Company either directly or through the Operating Partnership, any subsidiaries, Joint Ventures, partnerships or
other entities.


 


“Property Manager”
means any entity that has been retained to perform and carry out at one or more of the Properties property management services.


 


“REIT” means
a corporation, trust or association which is engaged in investing in equity interests in real estate (including fee ownership and
leasehold interests and interests in partnerships and Joint Ventures holding real estate) or in loans secured by mortgages on real
estate or both and that qualifies as a real estate investment trust under the REIT Provisions of the Code.


 




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“REIT
Provisions of the Code” means Sections 856 through 860 of the Code and any successor or other provisions of the Code relating
to real estate investment trusts (including provisions as to the attribution of ownership of beneficial interests therein) and
the regulations promulgated thereunder.


 


“Sale” or “Sales”
means any transaction or series of transactions whereby: (a) the Operating Partnership sells, grants, transfers, conveys or relinquishes
its ownership of any Property or portion thereof, including the lease of any Property consisting of the building only, and including
any event with respect to any Property which gives rise to a significant amount of insurance proceeds or condemnation awards; (b)
the Operating Partnership sells, grants, transfers, conveys or relinquishes its ownership of all or substantially all of the interest
of the Operating Partnership in any Joint Venture in which it is a co-venturer or partner; (c) any Joint Venture in which the Operating
Partnership is a co-venturer or partner sells, grants, transfers, conveys or relinquishes its ownership of any Property or portion
thereof, including any event with respect to any Property which gives rise to insurance claims or condemnation awards; (d) the
Operating Partnership sells, grants, conveys, or relinquishes its interest in any asset, or portion thereof, including any event
with respect to any asset which gives rise to a significant amount of insurance proceeds or similar awards; or (e) the Operating
Partnership sells or otherwise disposes of or distributes all of its assets in liquidation of the Operating Partnership.


 


“Sales Commissions”
means any and all commissions payable to underwriters, dealer managers or other broker-dealers in connection with the sale of Stock,
including, without limitation, commissions payable to the Dealer Manager.


 


“Securities”
means any class or series of units or shares of the Company or the Operating Partnership, including common shares or preferred
units or shares and any other evidences of equity or beneficial or other interests, voting trust certificates, bonds, debentures,
notes or other evidences of indebtedness, secured or unsecured, convertible, subordinated or otherwise, or in general any instruments
commonly known as “Securities” or any certificates of interest, shares or participations in, temporary or interim certificates
for, receipts for, guarantees of, or warrants, options or rights to subscribe to, purchase or acquire, any of the foregoing.


 


“Securities Act”
means the Securities Act of 1933, as amended.


 


“Sponsor” means
each of Phillips Edison Limited Partnership, a Delaware limited partnership, and Griffin Capital Corporation, a California corporation.


 


“Stock” means
shares of stock of the Company of any class or series, including Common Stock, preferred stock or shares-in-trust.


 


“Stockholders”
means the registered holders of the Company’s Stock.


 


“Termination Date”
means the date of termination of this Advisory Agreement.


 




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Article II


APPOINTMENT


 


The
Company, through the powers vested in the Board of Directors, and the Operating Partnership hereby appoint the Advisor to serve
as its advisor and asset manager on the terms and conditions set forth in this Advisory Agreement, and the Advisor hereby accepts
such appointment. 


 


Article III


AUTHORITY OF THE ADVISOR


 


Section
3.1           General. All rights and powers to manage
and control the day-to-day business and affairs of the Company and the Operating Partnership and their subsidiaries shall be vested
in the Advisor. The Advisor shall have the power to delegate all or any part of its rights and powers to manage and control the
business and affairs of the Company and the Operating Partnership and their subsidiaries to such officers, employees, Affiliates,
agents and representatives of the Advisor, the Company or the Operating Partnership as it may from time to time deem appropriate.
Any authority delegated by the Advisor to any other Person shall be subject to the limitations on the rights and powers of the
Advisor specifically set forth in this Advisory Agreement, the Charter, the Bylaws and the Operating Partnership Agreement.


 


Section
3.2           Powers of the Advisor. Subject to
the express limitations set forth in this Advisory Agreement and subject to the supervision of the Board, the power to direct the
management, operation and policies of the Company and the Operating Partnership and their subsidiaries shall be vested in the Advisor,
which shall have the power by itself and shall be authorized and empowered on behalf and in the name of the Company and the Operating
Partnership and their subsidiaries, as applicable, to carry out any and all of the objectives and purposes of the Company and the
Operating Partnership and their subsidiaries and to perform all acts and enter into and perform all contracts and other undertakings
that it may in its sole discretion deem necessary, advisable or incidental thereto to perform its obligations under this Advisory
Agreement.


 


Section
3.3           Approval by Directors. Notwithstanding
the foregoing, any investment in Properties, including any acquisition of a Property by the Company or the Operating Partnership
or any of their subsidiaries or any investment by the Company or the Operating Partnership or any of their subsidiaries in a Joint
Venture, limited partnership or similar entity owning real properties, will require the prior approval of the Board of Directors
or a committee of the Board constituting a majority of the Board. The Advisor will deliver to the Board of Directors all documents
reasonably required by it to properly evaluate the proposed investment.


 


Section
3.4           Modification or Revocation of Authority of
Advisor.  The Board may, at any time upon the giving of notice to the Advisor, modify or revoke the authority or approvals
set forth in Articles III and IV, provided, however, that such modification or revocation shall be effective upon
receipt by the Advisor and shall not be applicable to investment transactions to which the Advisor has committed the Company or
the Operating Partnership or any of their subsidiaries prior to the date of receipt by the Advisor of such notification.


 


Article IV

DUTIES OF THE ADVISOR


 


The Advisor undertakes
to use its commercially reasonable best efforts to present to the Company and the Operating Partnership potential investment opportunities
and to provide a continuing and suitable investment program consistent with the investment objectives and policies of the Company
as determined and adopted from time to time by the Board. The Advisor agrees to devote sufficient resources to the administration
of the Company and the Operating Partnership to discharge its obligations hereunder. In connection therewith, and subject to the
restrictions included in Sections 3.3, 3.4 and 13.3(c) hereof and to the continuing authority of the Board, the Advisor agrees
to, either directly or by engaging a duly qualified Affiliate of the Advisor or other duly qualified Person, perform the following
services on behalf of the Company and the Operating Partnership.


 




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Section
4.1           Organizational and Offering Services.
The Advisor shall manage and supervise:


 


(a)          the
structure and development of any offering, including the determination of the specific terms of the Securities to be offered by
the Company;


 


(b)          the
preparation of all organizational and offering related documents, and obtaining of all required regulatory approvals of such documents,
if any;


 


(c)          approval
of participating broker dealers selected by the Dealer Manager and the negotiation of the related selling agreements;


 


(d)          coordination
of the due diligence process relating to participating broker dealers and their review of the Memorandum and other offering and
Company documents;


 


(e)          preparation
and approval of all marketing materials contemplated to be used by the Dealer Manager or others in an offering;


 


(f)          along
with the Dealer Manager, negotiation of any necessary escrow agreement and/or transfer agent agreement and coordination with the
Dealer Manager and the transfer agent for the receipt, collection, processing and acceptance of subscription agreements, commissions,
and other administrative support functions;


 


(g)          creation
and implementation of various technology and electronic communications related to an offering; and


 


(h)          all
other services related to organization of the Company or an offering.


 


Section
4.2           Acquisition Services. The Advisor
shall:


 


(a)          serve
as the Company’s and the Operating Partnership’s investment and financial advisor and, as requested by the Board, provide
relevant market research and economic and statistical data in connection with the Company’s assets and investment objectives
and policies;


 


(b)          subject
to Article III hereof and the investment objectives and policies of the Company: (i) locate, analyze and select potential
investments; (ii) structure and negotiate the terms and conditions of transactions pursuant to which investments in Assets
will be made; (iii) acquire Assets on behalf of the Company and the Operating Partnership; and (iv) arrange for financing
and refinancing related to acquisitions of Assets;


 


(c)          perform
due diligence on prospective investments and create due diligence reports summarizing the results of such work;


 


(d)          prepare
reports regarding prospective investments which include recommendations and supporting documentation necessary for the Board to
evaluate the proposed investments;


 




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(e)          deliver
to or maintain on behalf of the Company copies of all appraisals obtained in connection with the Company’s and the Operating
Partnership’s investments;


 


(f)          obtain
reports (which may be prepared by the Advisor or its Affiliates), where appropriate, concerning the value of contemplated investments
of the Company and the Operating Partnership and their subsidiaries; and


 


(g)          negotiate
and execute investments and other transactions as authorized and approved by the Board.


 


Section
4.3           Asset Management Services and Administrative
Services.


 


(a)          Asset
Management and Property Related Services. The Advisor shall:


 


(i)          negotiate
and service the Company’s and the Operating Partnership’s and their subsidiaries’ debt facilities and other financings;


 


(ii)         monitor
applicable markets and obtain reports (which may be prepared by the Advisor or its Affiliates) where appropriate, concerning the
value of investments of the Company and the Operating Partnership and their subsidiaries;


 


(iii)        monitor
and evaluate the performance of investments of the Company and the Operating Partnership and their subsidiaries; provide daily
management services to the Company and perform and supervise the various management and operational functions related to the Company’s
and the Operating Partnership’s and their subsidiaries’ investments;


 


(iv)        coordinate
with the Property Manager on its duties under any property management agreement and assist in obtaining all necessary approvals
of major property transactions as governed by the applicable property management agreement;


 


(v)         select
Joint Venture partners, structure corresponding agreements and oversee and manage relationships between the Company and the Operating
Partnership and any of their subsidiaries with any Joint Venture partners;


 


(vi)        consult
with the officers and Directors of the Company and provide assistance with the evaluation and approval of potential property dispositions,
sales or refinancings; and


 


(vii)       provide
the officers and Directors of the Company periodic reports regarding prospective investments in Properties.


 


(b)          Accounting,
Regulatory and Other Administrative Services. The Advisor shall:


 


(i)          maintain
accounting systems, records and data and any other information requested concerning the activities of the Company and the Operating
Partnership and their subsidiaries as shall be required to prepare and to file all periodic financial reports and returns required
to be filed with any regulatory agency;


 


(ii)         provide
tax and compliance services and coordinate with appropriate third parties, including independent accountants and other consultants,
on related tax matters;


 


(iii)        maintain
all appropriate books and records of the Company and the Operating Partnership and their subsidiaries;


 




    	 	9	 



     


    

  


(iv)        provide
the officers of the Company and the Board with timely updates related to the overall regulatory environment affecting the Company,
as well as managing compliance with such matters;


 


(v)         consult
with the officers of the Company and the Board relating to the corporate governance structure and appropriate policies and procedures
related thereto;


 


(vi)        perform
all reporting, record keeping, internal controls and similar matters in a manner to allow the Company to comply with applicable
law;


 


(vii)       investigate,
select, and, on behalf of the Company and the Operating Partnership and their subsidiaries, engage and conduct business with such
Persons as the Advisor deems necessary to the proper performance of its obligations hereunder, including but not limited to consultants,
accountants, lenders, technical advisors, attorneys, brokers, underwriters, corporate fiduciaries, escrow agents, depositaries,
custodians, agents for collection, insurers, insurance agents, banks, builders, developers, property owners, mortgagers, construction
companies and any and all Persons acting in any other capacity deemed by the Advisor necessary or desirable for the performance
of any of the foregoing services;


 


(viii)      supervise
the performance of such ministerial and administrative functions as may be necessary in connection with the daily operations of
the Assets;


 


(ix)         provide
the Company and the Operating Partnership and their subsidiaries with all necessary cash management services;


 


(x)          consult
with the officers of the Company and the Board and assist the Board in evaluating and obtaining adequate insurance coverage based
upon risk management determinations;


 


(xi)         manage
and perform the various administrative functions necessary for the management of the day-to-day operations of the Company and the
Operating Partnership and their subsidiaries;


 


(xii)        provide
or arrange for administrative services and items, legal and other services, office space, office furnishings, personnel and other
overhead items necessary and incidental to the Company’s and the Operating Partnership’s and their subsidiaries’
business and operations;


 


(xiii)       provide
financial and operational planning services and portfolio management functions; and


 


(xiv)      from
time-to-time, or at any time reasonably requested by the Board, make reports to the Board on the Advisor’s performance of
services to the Company and the Operating Partnership under this Advisory Agreement.


 


(c)          Stockholder
Services. The Advisor shall:


 


(i)          have
the authority, in its sole discretion, to retain a transfer agent on behalf of the Company to perform all necessary transfer agent
functions;


 


(ii)         manage
and coordinate with such transfer agent, if retained by the Advisor, the distribution process and payments to Stockholders;


 


(iii)        manage
communications with Stockholders, including answering phone calls, preparing and sending written and electronic reports and other
communications; and


 




    	 	10	 



     


    

 


(iv)        establish
technology infrastructure to assist in providing Stockholder support and service.


 


Article V


BANK ACCOUNTS


 


The Advisor may establish
and maintain one or more bank accounts in its own name for the account of the Company or the Operating Partnership or their subsidiaries
or in the name of the Company or the Operating Partnership or any subsidiary and may collect and deposit into any such account
or accounts, and disburse from any such account or accounts, any money on behalf of the Company or the Operating Partnership or
their subsidiaries, under such terms and conditions as the Board may approve, provided that no funds shall be commingled with the
funds of the Advisor; and the Advisor shall from time to time render appropriate accountings of such collections and payments to
the Board and to the auditors of the Company.


 


Article VI


RECORDS; ACCESS


 


The Advisor shall maintain
appropriate records of all its activities hereunder and make such records available for inspection by the Board and by counsel,
auditors and authorized agents of the Company and the Operating Partnership and their subsidiaries, at any time or from time to
time during normal business hours. The Advisor, in the conduct of its responsibilities to the Company and the Operating Partnership,
shall maintain adequate and separate books and records for the Company’s and the Operating Partnership’s operations
in accordance with GAAP, which shall be supported by sufficient documentation to ascertain that such books and records are properly
and accurately recorded. Such books and records shall be the property of the Company. Such books and records shall include all
information necessary to calculate and audit the fees or reimbursements paid under this Advisory Agreement. The Advisor shall utilize
procedures to attempt to ensure such control over accounting and financial transactions as is reasonably required to protect the
Company’s and the Operating Partnership’s assets from theft, error or fraudulent activity. All financial statements
that the Advisor delivers to the Company shall be prepared on an accrual basis in accordance with GAAP, except for special financial
reports which by their nature require a deviation from GAAP. The Advisor shall maintain necessary liaison with the Company’s
independent accountants and shall provide such accountants with such reports and other information as the Company shall request.
The Advisor shall at all reasonable times have access to the books and records of the Company and the Operating Partnership.


 


Article VII


OTHER ACTIVITIES OF THE ADVISOR


 


Section
7.1           General. Nothing herein contained
shall prevent the Advisor or any of its Affiliates from engaging in or earning fees from other activities, including, without limitation,
the rendering of advice to other Persons (including other REITs) and the management of other programs advised, sponsored or organized
by the Advisor or any of its Affiliates. Nor shall this Agreement limit or restrict the right of any manager, director, officer,
member, partner, employee or equityholder of the Advisor or any of its Affiliates to engage in or earn fees from any other business
or to render services of any kind to any other Person. The Advisor may, with respect to any investment in which the Company or
the Operating Partnership or any subsidiary is a participant, also render advice and service to each and every other participant
therein, and earn fees for rendering such advice and service. Specifically, it is contemplated that the Company and the Operating
Partnership and their subsidiaries may enter into Joint Ventures or other similar co-investment arrangements with certain Persons,
and pursuant to the agreements governing such Joint Ventures or other similar co-investment arrangements, the Advisor may be engaged
to provide advice and service to such Persons, in which case the Advisor will earn fees for rendering such advice and service.
The Advisor shall promptly disclose to the Board the existence of any condition or circumstance, existing or anticipated, of which
it has knowledge, that creates or which would reasonably result in a conflict of interest between the Advisor’s obligations
to the Company and the Operating Partnership and their subsidiaries and its obligations to or its interest in any other Person.


 




    	 	11	 



     


    




 


Section 7.2           Policy
with Respect to Allocation of Investment Opportunities. During the term of this Agreement, the Advisor will use its reasonable
efforts to fairly allocate investment opportunities in accordance with the allocation methodology described in the Memorandum and
will promptly disclose to the Company any material deviation from such policy or the establishment of a new policy, which deviation
or new policy shall be allowed provided (a) the Board of Directors are provided with notice of such deviation or new policy at
least 30 days prior to such deviation or new policy becoming effective, or such shorter period as the Board of Directors may determine,
and (b) such deviation or new policy provides for the reasonable allocation of investment opportunities to the Company. The Advisor
shall provide the Board of Directors with any information reasonably requested so that the Board of Directors can ensure that the
Advisor is fairly allocating investment opportunities. Nothing herein shall be deemed to prevent the Advisor from pursuing an investment
opportunity directly or offering it to another Advisor-sponsored program rather than offering it to the Company so long as the
Advisor is fulfilling its obligation to provide a continuing and suitable investment program to the Company which is consistent
with the investment objectives and policies of the Company.


 


Article VIII


LIMITATIONS ON ACTIVITIES


 


Anything else in this Advisory
Agreement to the contrary notwithstanding, the Advisor shall refrain from taking any action which, in its sole judgment made in
good faith, would (a) adversely affect the status of the Company as a REIT, (b) subject the Company to regulation under the Investment
Company Act of 1940, as amended, (c) violate any law, rule, regulation or statement of policy of any governmental body or agency
having jurisdiction over the Company, its Stock or its other Securities, or the Operating Partnership, or (d) violate the Charter,
the Bylaws or the Operating Partnership Agreement, except if such action shall be ordered by the Board, in which case the Advisor
shall notify promptly the Board of the Advisor’s judgment of the potential impact of such action and shall refrain from taking
such action until it receives further clarification or instructions from the Board. In such event the Advisor shall have no liability
for acting in accordance with the specific instructions of the Board so given. Notwithstanding the foregoing, the Advisor, its
members, managers, directors, officers and employees, and stockholders, members, managers, directors, officers and employees of
the Advisor’s Affiliates shall not be liable to the Company or the Operating Partnership or to the Board or Stockholders
for any act or omission by the Advisor, its directors, officers or employees, or stockholders, directors or officers of the Advisor’s
Affiliates except as provided in this Advisory Agreement.


 


Article IX


FEES


 


Section
9.1           Acquisition Fees. The Company will
pay the Advisor, as compensation for the services described in Section 4.2, Acquisition Fees in an amount up to 2% of the Contract
Purchase Price of each Property acquired by the Company. The Advisor may waive or defer all or a portion of the Acquisition Fee
at any time and from time to time, in the Advisor’s sole discretion. The purchase price allocable for a Property held through
a Joint Venture shall equal the product of (a) the Contract Purchase Price of the Property and (b) the direct or indirect ownership
percentage in the Joint Venture held directly or indirectly by the Company or the Operating Partnership. For purposes of this Section
9.1, “ownership percentage” shall be the percentage of capital stock, membership interests, partnership interests or
other equity interests held by the Company or the Operating Partnership, without regard to classification of such interests. Acquisition
Fees shall be payable on the acquisition of a specific Property, on the acquisition of a portfolio of Properties through a purchase
of assets, controlling securities or by a Joint Venture, by a merger or similar business combination or other comparable transaction,
or on the completion of a development of a Property for the Company.


 




    	 	12	 



     


    

 


Section
9.2           Asset Management Fee. Commencing
on the date hereof, for the asset management services included in the services described in Section 4.3(a), the Company shall pay
the Advisor a monthly Asset Management Fee in an amount equal to one-twelfth of 1% of the Cost of Assets as of the last day of
the preceding monthly period. The Advisor may elect to receive the Asset Management Fee, in cash, OP Units, or Common Stock (or
any combination thereof). The Asset Management Fee will be appropriately
prorated for any partial month.


 


Section
9.3           Disposition Fees. If the Advisor
or an Affiliate provides a substantial amount of the services (as determined by a majority of the Directors, including a majority
of the Independent Directors) in connection with the Sale of one or more Properties, the Advisor or such Affiliate shall receive
at closing a Disposition Fee in an amount equal to 2% of the Contract Sales Price; provided, however, that no Disposition
Fee shall be payable if the Sale is to an Affiliate of the Advisor; provided further, however, that the payment of
any Disposition Fees by the Company shall be subject to any limitations contained in the Charter. Any Disposition Fee payable under
this section may be paid in addition to real estate commissions paid to non-Affiliates, provided that the total real estate commissions
(including such Disposition Fee) paid to all Persons by the Company or the Operating Partnership for each Sale shall not exceed
an amount equal to the lesser of (i) 6% of the aggregate Contract Sales Price of each Property or (ii) the Competitive Real Estate
Commission for each Property. For purposes of this Section 9.3, “substantial amount of services” in connection with
the Sale includes the preparation of an investment package for the Property (including a new investment analysis, rent rolls, tenant
information regarding credit, a property title report, an environmental report, a list of prospective buyers, a structural report
and exhibits) or such other substantial services performed by the Advisor or any of its Affiliates in connection with a Sale. The
Company or the Operating Partnership will pay the Disposition Fee for a Property at the time the Property is sold.


 


Article X


EXPENSES


 


Section
10.1         Reimbursable Expenses. In addition to the compensation
paid to the Advisor pursuant to Article IX hereof, the Company or the Operating Partnership shall pay directly or reimburse the
Advisor for all of the expenses paid or incurred by the Advisor (to the extent not reimbursable by another party, such as the Dealer
Manager) in connection with the services it provides to the Company and the Operating Partnership and their subsidiaries pursuant
to this Advisory Agreement, including, but not limited to:


 


(a)          reimbursements
for Organizational and Offering Expenses in connection with the Offering or any subsequent offering;


 


(b)          subject
to the limitation set forth below, Acquisition Expenses incurred by the Advisor or its Affiliates;


 


(c)          subject
to the limitation set forth below, Acquisition Fees and Acquisition Expenses paid or payable by the Advisor to unaffiliated Persons
incurred in connection with the selection and acquisition of Properties;


 




    	 	13	 



     


    

 


(d)          the
actual out-of-pocket cost of goods and services used by the Company and the Operating Partnership and their subsidiaries and obtained
from entities not affiliated with the Advisor including brokerage and other fees paid in connection with the purchase, operation
and sale of Assets and travel;


 


(e)          interest
and other costs for borrowed money, including discounts, points and other similar fees, and expenses relating to financing services
whether performed by a third party or internally by the Advisor or its Affiliates;


 


(f)          taxes
and assessments on income or Property and taxes as an expense of doing business and any taxes otherwise imposed on the Company
and the Operating Partnership and their respective businesses, assets or income, including tax compliance and processing services;


 


(g)          costs
associated with insurance required in connection with the business of the Company, the Operating Partnership, their subsidiaries
or by the Company’s officers and the Board and all risk management services related thereto whether performed by a third
party or internally by the Advisor or its Affiliates;


 


(h)          expenses
of managing improving, developing, operating and selling Properties owned,
directly or indirectly, by the Company or the Operating Partnership or their subsidiaries, as well as expenses of other transactions
relating to such Properties, whether payable to an Affiliate of the Company or a non-affiliated Person;


 


(i)          all
expenses in connection with payments to Directors and meetings of the Directors and Stockholders;


 


(j)          expenses
associated any tender offers or with the listing of the Common Stock on a national securities exchange or with the issuance and
distribution of Securities other than the Stock issued in the Offering, such as selling commissions and fees, advertising expenses,
taxes, legal and accounting fees, listing and registration fees;


 


(k)          expenses
connected with payments of Distributions in cash or otherwise made or caused to be made by the Company to the Stockholders;


 


(l)          expenses
of organizing, converting, modifying, merging, liquidating or dissolving the Company, the Operating Partnership and their subsidiaries,
or of amending the Charter, the Bylaws, the Operating Partnership Agreement or the governing documents of any subsidiaries;


 


(m)          expenses
of maintaining communications with Stockholders, including the cost of preparation, filing, printing, and mailing annual reports
and other Stockholder reports, proxy statements and other reports required by governmental entities;


 


(n)          administrative
service expenses, including all direct and indirect costs and expenses incurred by Advisor in fulfilling its duties hereunder and
including personnel costs. Such direct and indirect costs and expenses may include reasonable wages and salaries and other employee-related
expenses of all employees of Advisor or its Affiliates who are directly engaged in the operation, management, administration, investor
relations and marketing of the Company, including taxes, insurance and benefits relating to such employees, and legal, travel and
other out-of-pocket expenses which are directly related to their services provided by Advisor pursuant to this Advisory Agreement;


 




    	 	14	 



     


    

 


(o)          investor
relations, marketing, audit, accounting, tax, due diligence and legal fees, and other fees for consulting, advisory or professional
services relating to the operations of the Company and the Operating Partnership and their subsidiaries and all such fees incurred
at the request, or on behalf of, the Board of Directors, whether performed by a third party or internally by the Advisor or its
Affiliates;


 


(p)          costs
associated with the maintenance of a Company website and third party licensing fees for software and information technology; and


 


(p)          out-of-pocket
costs for the Company and the Operating Partnership and their subsidiaries to comply with all applicable laws, regulation and ordinances;
and all other out-of-pocket costs necessary for the operation of the Company, the Operating Partnership and their subsidiaries
and the Assets incurred by the Advisor in performing its duties hereunder.


 


The Company or the Operating
Partnership shall also reimburse the Advisor or Affiliates of the Advisor for all direct and indirect costs and expenses incurred
on behalf of the Company or the Operating Partnership or their subsidiaries prior to the execution of this Advisory Agreement.


 


The total of all Acquisition
Fees and Acquisition Expenses paid by the Company in connection with the purchase of a Property by the Company shall be limited
in accordance with the Charter.


 


Section
10.2         Other Services. Should the Directors request
that the Advisor or any member, manager, officer or employee thereof render services for the Company or the Operating Partnership
or their subsidiaries other than set forth in Article IV, such services shall be separately compensated at such rates and in such
amounts as are agreed by the Advisor and a majority of the Board of Directors, subject to the limitations contained in the Charter,
and shall not be deemed to be services pursuant to the terms of this Advisory Agreement.


 


Section
10.3         Timing of and Limitations on Reimbursements.



 


(a)          Expenses
incurred by the Advisor on behalf of the Company and the Operating Partnership and their subsidiaries and payable pursuant to this
Article X shall be reimbursed no less frequently than monthly to the Advisor. The Advisor shall prepare a statement documenting
the expenses of the Company and the Operating Partnership and their subsidiaries during each month, and shall use commercially
reasonable efforts to deliver such statement to the Company within 25 days after the end of each month. Subject to the Excess Expense
Guidelines, the Company or the Operating Partnership may advance funds to the Advisor for expenses the Advisor anticipates will
be incurred by the Advisor within the current month and any such advances shall be deducted from the amounts reimbursed by the
Company or the Operating Partnership to the Advisor.


 


Article XI


NO PARTNERSHIP OR JOINT VENTURE


 


Section
11.1         Relationship. The parties to this Advisory
Agreement are not partners or joint venturers with each other, and nothing in this Advisory Agreement shall be construed to make
them such partners or joint venturers or impose any liability as such on either of them, and neither shall have the power to bind
or obligate any of them except as set forth herein. In all respects, the status of the Advisor under this Advisory Agreement is
that of an independent contractor.


 




    	 	15	 



     


    

 


Section
11.2         Time Commitment. The Advisor shall, and
shall cause its Affiliates and their respective employees, officers and agents to, devote to the Company and the Operating Partnership
and their subsidiaries such time as shall be reasonably necessary to conduct the business and affairs of the Company and the Operating
Partnership and their subsidiaries in an appropriate manner consistent with the terms of this Advisory Agreement. The Company and
the Operating Partnership each acknowledges that the Advisor and its Affiliates and their respective employees, officers and agents
may also engage in activities unrelated to the Company and the Operating Partnership and their subsidiaries and may provide services
to Persons other than the Company, the Operating Partnership or any of their Affiliates.


 


Article XII


RELATIONSHIP WITH DIRECTORS


 


Subject to Article VIII
of this Advisory Agreement and to restrictions set forth in the Charter or deemed advisable with respect to the qualification of
the Company as a REIT, members, managers, directors, officers and employees of the Advisor or members, managers, directors, officers
and employees of an Affiliate of the Advisor or any corporate parents of an Affiliate, or directors, officers or stockholders of
any director, officer or corporate parent of an Affiliate may serve as a Director and as officers of the Company, except that no
officer or employee of the Advisor or its Affiliates who also is a Director or officer of the Company shall receive any compensation
from the Company for serving as a Director or officer other than reasonable reimbursement for travel and related expenses incurred
in attending meetings of the Directors.


 


Article XIII


REPRESENTATIONS AND WARRANTIES


 


Section
13.1         The Company. To induce the Advisor to enter
into this Advisory Agreement, the Company hereby represents and warrants that:


 


(a)          The
Company is a corporation, duly organized, validly existing and in good standing under the laws of the State of Maryland with all
requisite corporate power and authority and all material licenses, permits and authorizations necessary to carry out the transactions
contemplated by this Advisory Agreement.


 


(b)          The
Company’s execution, delivery and performance of this Advisory Agreement has been duly authorized by the Board of Directors.
This Advisory Agreement constitutes the valid and binding obligation of the Company, enforceable against the Company in accordance
with its terms. The Company’s execution and delivery of this Advisory Agreement and its fulfillment of and compliance with
the respective terms hereof do not and will not (i) conflict with or result in a breach of the terms, conditions or provisions
of, (ii) constitute a default under, (iii) result in the creation of any lien, security interest, charge or encumbrance upon the
assets of the Company pursuant to, (iv) give any third party the right to modify, terminate or accelerate any obligation under,
(v) result in a violation of or (vi) require any authorization, consent, approval, exception or other action by or notice to any
court or administrative or governmental body pursuant to, the Charter or Bylaws or any law, statute, rule or regulation to which
the Company is subject, or any agreement, instrument, order, judgment or decree by which the Company is bound, in any such case
in a manner that would have a material adverse effect on the ability of the Company to perform any of its obligations under this
Advisory Agreement.


 


Section
13.2         The Operating Partnership. To induce the Advisor
to enter into this Advisory Agreement, the Operating Partnership hereby represents and warrants that:


 


(a)          The
Operating Partnership is a Delaware limited partnership, duly organized, validly existing and in good standing under the laws of
the State of Delaware with all requisite power and authority and all material licenses, permits and authorizations necessary to
carry out the transactions contemplated by this Advisory Agreement.


 




    	 	16	 



     


    

 


(b)          The
Operating Partnership’s execution, delivery and performance of this Advisory Agreement has been duly authorized. This Advisory
Agreement constitutes the valid and binding obligation of the Operating Partnership, enforceable against the Operating Partnership
in accordance with its terms. The Operating Partnership’s execution and delivery of this Advisory Agreement and its fulfillment
of and compliance with the respective terms hereof do not and will not (i) conflict with or result in a breach of the terms,
conditions or provisions of, (ii) constitute a default under, (iii) result in the creation of any lien, security interest, charge
or encumbrance upon the assets of the Operating Partnership pursuant to, (iv) give any third party the right to modify, terminate
or accelerate any obligation under, (v) result in a violation of or (vi) require any authorization, consent, approval, exception
or other action by or notice to any court or administrative or governmental body pursuant to, the Operating Partnership Agreement
or any law, statute, rule or regulation to which the Operating Partnership is subject, or any agreement, instrument, order, judgment
or decree by which the Operating Partnership is bound, in any such case in a manner that would have a material adverse effect on
the ability of the Operating Partnership to perform any of its obligations under this Advisory Agreement.


 


Section
13.3         The Advisor. To induce the Company and the Operating
Partnership to enter into this Advisory Agreement, the Advisor represents and warrants that:


 


(a)          The
Advisor is a limited liability company, duly organized, validly existing and in good standing under the laws of the State of Delaware
with all requisite company power and authority and all material licenses, permits and authorizations necessary to carry out the
transactions contemplated by this Advisory Agreement.


 


(b)          The
Advisor’s execution, delivery and performance of this Advisory Agreement has been duly authorized. This Advisory Agreement
constitutes a valid and binding obligation of the Advisor, enforceable against the Advisor in accordance with its terms. The Advisor’s
execution and delivery of this Advisory Agreement and its fulfillment of and compliance with the respective terms hereof do not
and will not (i) conflict with or result in a breach of the terms, conditions or provisions of, (ii) constitute a default
under, (iii) result in the creation of any lien, security interest, charge or encumbrance upon the Advisor’s assets pursuant
to, (iv) give any third party the right to modify, terminate or accelerate any obligation under, (v) result in a violation of or
(vi) require any authorization, consent, approval, exemption or other action by or notice to any court or administrative or governmental
body pursuant to, the Advisor’s limited liability company agreement, or any law, statute, rule or regulation to which the
Advisor is subject, or any agreement, instrument, order, judgment or decree by which the Advisor is bound, in any such case in
a manner that would have a material adverse effect on the ability of the Advisor to perform any of its obligations under this Advisory
Agreement.


 


(c)          The
Advisor has received copies of the Charter, the Bylaws, the Memorandum and the Operating Partnership Agreement and is familiar
with the terms thereof, including without limitation the investment limitations included therein. The Advisor warrants that it
will use reasonable care to avoid any act or omission that would conflict with the terms of the Charter, the Bylaws, the Memorandum,
or the Operating Partnership Agreement in the absence of the express direction of the Board of Directors.


 




    	 	17	 



     


    

 


Article XIV


TERM; TERMINATION OF AGREEMENT


 


Section
14.1         Term. This Advisory Agreement shall continue
in force until the first anniversary of the date hereof. Thereafter, this Advisory Agreement may be renewed for an unlimited number
of successive one-year terms upon mutual consent of the parties. The Company, acting through the Board, will evaluate the performance
of the Advisor annually before renewing the Advisory Agreement, and each such renewal shall be for a term of no more than one year.


 


Section
14.2         Termination by Any Party. This Advisory Agreement
may be terminated upon 60 days’ written notice without cause or penalty, by the Board of Directors or the Advisor).


 


Section
14.3         Termination by the Advisor. This Advisory Agreement
may be terminated immediately by the Advisor in the event of any material breach of this Advisory Agreement by the Company or the
Operating Partnership not cured within 30 days after written notice thereof.


 


Section
14.4         Termination by the Company. This Advisory Agreement
may be terminated immediately by the Company or the Operating Partnership in the event of (a) any material breach of this Advisory
Agreement by the Advisor not cured by the Advisor within 30 days after written notice thereof; (b) a decree or order is rendered
by a court having jurisdiction (i) adjudging Advisor as bankrupt or insolvent, or (ii) approving as properly filed a petition seeking
reorganization, readjustment, arrangement, composition or similar relief for Advisor under the federal bankruptcy laws or any similar
applicable law or practice, or (iii) appointing a receiver or liquidator or trustee or assignee in bankruptcy or insolvency of
Advisor or a substantial part of the property of Advisor, or for the winding up or liquidation of its affairs; or (c) Advisor (i)
institutes proceedings to be adjudicated a voluntary bankrupt or an insolvent, (ii) consents to the filing of a bankruptcy proceeding
against it, (iii) files a petition or answer or consent seeking reorganization, readjustment, arrangement, composition or relief
under any similar applicable law or practice, (iv) consents to the filing of any such petition, or to the appointment of a
receiver or liquidator or trustee or assignee in bankruptcy or insolvency for it or for a substantial part of its property, (v)
makes an assignment for the benefit of creditors, (vi) is unable to or admits in writing its inability to pay its debts generally
as they become due unless such inability shall be the fault of the Operating Partnership, or (vii) takes company or other
action in furtherance of any of the aforesaid purposes.


 


Section
14.5         Survival. The provisions of Articles I, VI,
VII, XV through XX, and XXXI survive termination of this Advisory Agreement for a period of five years following the Termination
Date.


 


Article XV


PAYMENTS TO AND DUTIES OF

PARTIES UPON TERMINATION


 


Section
15.1         Reimbursable Expenses and Earned Fees. After
the Termination Date, the Advisor shall be entitled to receive from the Company or the Operating Partnership within thirty (30)
days after the effective date of such termination all amounts then accrued and owing to the Advisor, including all unpaid reimbursable
expenses and all earned but unpaid fees (including fees relating to partial months) payable to the Advisor prior to termination
of this Advisory Agreement.


 


Section
15.2         Advisor’s Duties Upon Termination. The
Advisor shall promptly upon termination:


 




    	 	18	 



     


    

 


(a)          pay
over to the Company and the Operating Partnership all money collected and held for the account of the Company and the Operating
Partnership pursuant to this Advisory Agreement, after deducting any accrued compensation and reimbursement for its expenses to
which it is then entitled;


 


(b)          deliver
to the Board a full accounting, including a statement showing all payments collected by it and a statement of all money held by
it, covering the period following the date of the last accounting furnished to the Board;


 


(c)          deliver
to the Board all assets, including Properties, and documents of the Company and the Operating Partnership then in the custody of
the Advisor; and


 


(d)          cooperate
with the Company and the Operating Partnership to provide an orderly management transition.


 


Section
15.3         Non-Solicitation. During the period commencing
on the effective date of this Advisory Agreement and ending two years following the Termination Date, the Company shall not, without
the Advisor’s prior written consent, directly or indirectly, (i) solicit or encourage any employee, consultant, contractor
or other Person performing services on behalf of the Advisor or its Affiliates to leave the employment or other service of the
Advisor or any of its Affiliates, or (ii) hire or pay, directly or indirectly, any compensation to, on behalf of the Company or
any other Person, any employee, consultant, contractor or other Person performing services on behalf of the Advisor or its Affiliates
who has left the employment of, or engagement by, the Advisor or any of its Affiliates within the two-year period following the
termination of that person’s employment with, or engagement by, the Advisor or any of its Affiliates. During the period commencing
on the effective date of this Advisory Agreement and ending two years following the Termination Date, the Company will not, whether
for its own account or for the account of any other Person, intentionally interfere with the relationship of the Advisor or any
of its Affiliates with, or endeavor to entice away from the Advisor or any of its Affiliates, any Person who during the term of
this Advisory Agreement is, or during the preceding two-year period was, a tenant, co-investor, co-developer, joint venturer or
other customer of the Advisor or any of its Affiliates.


 


Article XVI


ASSIGNMENT TO AN AFFILIATE


 


This Advisory Agreement
may be assigned by the Advisor to an Affiliate with the approval of the Board of Directors. The Advisor may assign any rights to
receive fees or other payments under this Advisory Agreement without obtaining the approval of the Board of Directors. This Advisory
Agreement shall not be assigned by the Company or the Operating Partnership without the consent of the Advisor, except in the case
of an assignment by the Company or the Operating Partnership, as the case may be, to a legal entity that is a successor to all
of the assets, rights and obligations of the Company or the Operating Partnership, as the case may be, in which case such successor
organization shall be bound hereunder and by the terms of said assignment in the same manner as the Company or the Operating Partnership,
as the case may be, is bound by this Advisory Agreement.


 


Article XVII



INCORPORATION OF THE
CHARTER AND THE OPERATING PARTNERSHIP AGREEMENT


 


To the extent that the
Charter or the Operating Partnership Agreement as in effect on the date hereof impose obligations or restrictions on the Advisor
or grant the Advisor certain rights which are not set forth in this Advisory Agreement, the Advisor shall abide by such obligations
or restrictions and such rights shall inure to the benefit of the Advisor with the same force and effect as if they were set forth
herein.


 




    	 	19	 



     


    

 


Article XVIII


INDEMNIFICATION BY THE COMPANY AND THE OPERATING PARTNERSHIP


 


The Company and the Operating
Partnership shall indemnify and hold harmless the Advisor and its Affiliates, including their respective officers, directors, equity
holders, members, partners and employees, from all liability, claims, damages or losses arising in the performance of their duties
hereunder, and related expenses, including reasonable attorneys’ fees, to the extent such liability, claims, damages or losses
and related expenses are not fully reimbursed by insurance, subject to any limitations imposed by the Charter, the laws of the
State of Maryland and the State of Delaware, as applicable, and only if all of the following conditions are met:


 


(a)          The
directors or the Advisor or its Affiliates have determined, in good faith, that the course of conduct that caused the loss or liability
was in the best interests of the Company and the Operating Partnership, as applicable;


 


(b)          The
Advisor or its Affiliates were acting on behalf of or performing services for the Company or the Operating Partnership;


 


(c)          Such
liability or loss was not the result of negligence or misconduct by the Advisor or its Affiliates; and


 


(d)          Such
indemnification or agreement to hold harmless is recoverable only out of the Company’s net assets, including insurance proceeds,
and not from its Stockholders.


 


(e)          With
respect to losses, liabilities or expenses arising from or out of an alleged violation of federal or state securities laws, one
or more of the following conditions are met: (i) there has been a successful adjudication on the merits of each count involving
alleged securities law violations as to the particular indemnitee; (ii) such claims have been dismissed with prejudice on the merits
by a court of competent jurisdiction as to the particular indemnitee; or (iii) a court of competent jurisdiction approves a settlement
of the claims against a particular indemnitee and finds that indemnification of the settlement and the related costs should be
made, and the court considering the request for indemnification has been advised of the position of the SEC and of the published
position of any state securities regulatory authority in which securities of the Company were offered or sold as to indemnification
for violations of securities laws. Notwithstanding the foregoing, the Advisor shall not be entitled to indemnification or be held
harmless pursuant to this Article XVIII for any activity which the Advisor shall be required to indemnify or hold harmless the
Company and the Operating Partnership pursuant to Article XIX.


 


(f)          The
Company shall pay or reimburse reasonable legal expenses and other costs incurred by the Advisor or its Affiliates, or by any of
their respective officers, directors, equity holders, members, partners and employees, in advance of the final disposition of a
proceeding only if (in addition to any applicable procedures required by the Maryland General Corporation Law, as amended from
time to time) all of the following are satisfied: (a) the proceeding relates to acts or omissions with respect to the performance
of duties or services on behalf of the Company; (b) the legal proceeding was initiated by a third party who is not a Stockholder
or, if by a Stockholder acting in his or her capacity as such, a court of competent jurisdiction approves such advancement; and
(c) such Person undertakes to repay the amount paid or reimbursed by the Company, together with the applicable legal rate
of interest thereon, if it is ultimately determined that such Person is not entitled to indemnification.


 




    	 	20	 



     


    

 


Article XIX


INDEMNIFICATION BY ADVISOR


 


The Advisor shall indemnify
and hold harmless the Company and the Operating Partnership from contract or other liability, claims, damages, taxes or losses
and related expenses including attorneys’ fees, to the extent that such liability, claims, damages, taxes or losses and related
expenses are not fully reimbursed by insurance and are incurred by reason of the Advisor’s gross negligence, bad faith, fraud,
willful misfeasance, misconduct, or reckless disregard of its duties, but Advisor shall not be held responsible for any action
of the Board in declining to follow any advice or recommendation given by the Advisor.


 


Article XX


LIMITATION OF LIABILITY


 


In no event will the parties
be liable for damages based on loss of income, profit or savings or indirect, incidental, consequential, exemplary, punitive or
special damages of the other party or person, including third parties, even if such party has been advised of the possibility of
such damages in advance, and all such damages are expressly disclaimed.


 


Article XXI


NOTICES


 


Any notice in this Advisory
Agreement permitted to be given, made or accepted by either party to the other, must be in writing and may be given or served by
(i) personal delivery with receipt acknowledged, or (ii) deposited for next day delivery by Federal Express or other similar overnight
courier service. All notices so given shall be deemed received: (A) when actually received, if personally delivered, or (B) when
delivered (or when delivery is refused) if sent via an overnight courier. For purposes hereof the addresses of the parties, until
changed as hereafter provided, shall be as follows:


 


	 	To the Company:	Phillips Edison Grocery Center REIT III, Inc. 
	 	 	Attention: Jeffrey S. Edison
	 	 	222 S. Main Street, Suite 1730
	 	 	Salt Lake City, Utah 84101
	 	 	 
	 	With a copy to:	DLA Piper LLC (US) 
	 	 	Attention: Robert Bergdolt, Esq.
	 	 	4141 Parklake Drive, Suite300 
	 	 	Raleigh, North Carolina 27612
	 	 	 
	 	To the Operating Partnership:	Phillips Edison Grocery Center Operating Partnership III, L.P.
	 	 	Attention: Jeffrey S. Edison
	 	 	222 S. Main Street, Suite 1730
	 	 	Salt Lake City, Utah 84101
	 	 	 
	 	With a copy to:	DLA Piper LLC (US)
	 	 	Attention: Robert Bergdolt, Esq.
	 	 	4141 Parklake Drive, Suite 300
	 	 	Raleigh, North Carolina 27612
	 	 	 
	 	To the Advisor:	PECO-Griffin REIT Advisor, LLC 
	 	 	Attention:  Jeffrey S. Edison and Tanya E. Brady
	 	 	222 S. Main Street, Suite 1730
	 	 	Salt Lake City, Utah 84101


 




    	 	21	 



     


    

 


	 	With a copy to:	Griffin Capital Asset Management Company, LLC
	 	 	Attention: Kevin A. Shields and Howard S. Hirsch
	 	 	Griffin Capital Plaza
	 	 	1520 E. Grand Avenue
	 	 	El Segundo, California 90245


 


Any party may at any time
give notice in writing to the other party of a change in its address for the purposes of this Article XXI.


 


Article XXII


MODIFICATION


 


This Advisory Agreement
shall not be changed, modified, terminated, or discharged, in whole or in part, except by an instrument in writing signed by the
parties hereto, or their respective successors or assignees.


 


Article XXIII


SEVERABILITY


 


The provisions of this
Advisory Agreement are independent of and severable from each other, and no provision shall be affected or rendered invalid or
unenforceable by virtue of the fact that for any reason any other or others of them may be invalid or unenforceable in whole or
in part.


 


Article XXIV


CONSTRUCTION/GOVERNING LAW


 


The provisions of this
Advisory Agreement shall be construed and interpreted in accordance with the laws of the State of Delaware as
at the time in effect, without regard to the principles of conflicts of laws thereof.


 


Article XXV


ENTIRE AGREEMENT


 


This Advisory Agreement
contains the entire agreement and understanding among the parties hereto with respect to the subject matter hereof, and supersedes
all prior and contemporaneous agreements, understandings, inducements and conditions, express or implied, oral or written, of any
nature whatsoever with respect to the subject matter hereof. The express terms hereof control and supersede any course of performance
and/or usage of the trade inconsistent with any of the terms hereof. This Advisory Agreement may not be modified or amended other
than by an agreement in writing.


 


Article XXVI


INDULGENCES, NOT WAIVERS


 


Neither the failure nor
any delay on the part of a party to exercise any right, remedy, power or privilege under this Advisory Agreement shall operate
as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege preclude any other or further
exercise of the same or of any other right, remedy, power or privilege, nor shall any waiver of any right, remedy, power or privilege
with respect to any occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any other occurrence.
No waiver shall be effective unless it is in writing and is signed by the party asserted to have granted such waiver.


 




    	 	22	 



     


    

 


Article XXVII


GENDER


 


Words used herein regardless
of the number and gender specifically used, shall be deemed and construed to include any other number, singular or plural, and
any other gender, masculine, feminine or neuter, as the context requires.


 


Article XXVIII


TITLES NOT TO AFFECT INTERPRETATION


 


The titles of paragraphs
and subparagraphs contained in this Advisory Agreement are for convenience only, and they neither form a part of this Advisory
Agreement nor are they to be used in the construction or interpretation hereof.


 


Article XXIX


EXECUTION IN COUNTERPARTS


 


This Advisory Agreement
may be executed in any number of counterparts, each of which shall be deemed to be an original as against any party whose signature
appears thereon, and all of which shall together constitute one and the same instrument. This Advisory Agreement shall become binding
when the counterparts hereof, taken together, bear the signatures of all of the parties reflected hereon as the signatories.


 


Article XXX


RIGHTS OF THE ADVISOR AND ITS AFFILIATES


 


(a)          One
of the Sponsors, Phillips Edison Limited Partnership, and/or its Affiliates has a proprietary interest in the name and mark “Phillips
Edison”, “PELP” and “PECO”. Accordingly, and in recognition of this right, if at any time the Advisor
or an Affiliate thereof ceases to perform the services of the Advisor under this Agreement or any successor agreement, the Company
or the Operating Partnership, as the case may be, will, promptly after receipt of written request from such Sponsor or the Advisor,
cease to conduct business under or use the name or mark “Phillips Edison”, “PELP”, “PECO” or
any variations or derivations thereof and the Company and the Operating Partnership shall, within five (5) business days of such
cessation, (i) each change its name (and the names of any of their Affiliates) to a name that does not contain the name “Phillips
Edison”, “PELP” and/or “PECO” (ii) cease to use the mark “Phillips Edison”, “PELP”
and/or “PECO” and (iii) shall not use in its name any marks or other word or words that might, in the sole discretion
of Phillips Edison Limited Partnership, be susceptible of indication of some form of relationship between the Company and the Advisor,
Sponsor or Affiliate thereof. Consistent with the foregoing, the parties acknowledge and agree that Phillips Edison Limited Partnership,
or one or more of its Affiliates may in the future organize, sponsor or otherwise permit to exist other investment vehicles (including
vehicles for investment in real estate) and financial and service organizations using “Phillips Edison”, “PELP”
and/or “PECO” as part of their name or one of their service marks, all without the need for any consent (and without
the right to object thereto) by the Company or its Board. The parties acknowledge and agree that each of the Sponsors retains ownership
of and reserve all intellectual property rights in their respective proprietary property. To the extent that the Company has or
obtains any claim to any right, title of interest in any proprietary property of either Sponsor, the Company hereby assigns and
transfers exclusively to the applicable Sponsor all right title and interest, including without limitation all intellectual property
rights, free and clear of all liens, encumbrances or licenses in favor of the Company or any other party, in and to the proprietary
property to the applicable Sponsor, including but not limited to the execution of any instruments or documents now or hereafter
requested by the Advisor to perfect, defend or confirm the assignment described herein, in a form determined by the Advisor.


 




    	 	23	 



     


    




 


(b)          One
of the Sponsors, Griffin Capital Corporation, and/or its Affiliates has a proprietary interest in the name and mark “Griffin”
and “Griffin Capital”. Accordingly, and in recognition of this right, if at any time the Advisor or an Affiliate thereof
ceases to perform the services of the Advisor under this Agreement or any successor agreement, the Company or the Operating Partnership,
as the case may be, will, promptly after receipt of written request from such Sponsor or the Advisor, cease to conduct business
under or use the name or mark “Griffin”, “Griffin Capital” or any variations or derivations thereof and
the Company and the Operating Partnership shall, within five (5) business days of such cessation, (i) each change its name (and
the names of any of their Affiliates) to a name that does not contain the name “Griffin” and/or “Griffin Capital”
(ii) cease to use the mark “Griffin” and/or “Griffin Capital” and (iii) shall not use in its name any marks
or other word or words that might, in the sole discretion of Griffin Capital Corporation, be susceptible of indication of some
form of relationship between the Company and the Advisor, Sponsor or Affiliate thereof. Consistent with the foregoing, the parties
acknowledge and agree that Griffin Capital Corporation, or one or more of its Affiliates may in the future organize, sponsor or
otherwise permit to exist other investment vehicles (including vehicles for investment in real estate) and financial and service
organizations using “Griffin” and/or “Griffin Capital” as part of their name or one of their service marks,
all without the need for any consent (and without the right to object thereto) by the Company or its Board. The parties acknowledge
and agree that each of the Sponsors retains ownership of and reserve all intellectual property rights in their respective proprietary
property. To the extent that the Company has or obtains any claim to any right, title of interest in any proprietary property of
either Sponsor, the Company hereby assigns and transfers exclusively to the applicable Sponsor all right title and interest, including
without limitation all intellectual property rights, free and clear of all liens, encumbrances or licenses in favor of the Company
or any other party, in and to the proprietary property to the applicable Sponsor, including but not limited to the execution of
any instruments or documents now or hereafter requested by the Advisor to perfect, defend or confirm the assignment described herein,
in a form determined by the Advisor.


 


[Signatures
appear on next page]


 




    	 	24	 



     


    

 


IN WITNESS WHEREOF, the
parties hereto have executed this Advisory Agreement as of the date and year first above written.


 


	 	THE COMPANY:
	 	 
	 	PHILLIPS EDISON GROCERY CENTER REIT III, INC.
	 	 	 
	 	By:	/s/ Jeffrey S. Edison
	 	 	Jeffrey S. Edison
	 	 	Chief Executive Officer
	 	 	 
	 	THE OPERATING PARTNERSHIP:
	 	 
	 	PHILLIPS EDISON GROCERY CENTER OPERATING PARTNERSHIP III, L.P.
	 	 	 
	 	BY:	Phillips Edison Grocery Center OP GP III, LLC, ITS GENERAL PARTNER
	 	 	 
	 	 	BY:	Phillips Edison Grocery Center REIT III, Inc., ITS SOLE MEMBER
	 	 	 
	 	By:	/s/ Jeffrey S. Edison
	 	 	Jeffrey S. Edison
	 	 	Chief Executive Officer
	 	 	 
	 	THE ADVISOR:
	 	 
	 	PECO-GRIFFIN REIT ADVISOR, LLC
	 	 	 
	 	By:	/s/ Jeffrey S. Edison
	 	 	Jeffrey S. Edison
	 	 	Chief Executive Officer