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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2010
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission file number 000-51962
 COLE CREDIT PROPERTY TRUST, INC.
 (Exact name of registrant as specified in its charter)
 Maryland
    
    20-0939158(State or other jurisdiction of incorporation or organization)
    
    (I.R.S. Employer Identification No.)2555 East Camelback Road, Suite 400Phoenix, Arizona 85016
    
    (602) 778-8700(Address and zip code of principal executive offices)
    
    (Registrants telephone number, including area code)
 Not Applicable  (Former name, former address and former fiscal year, if changed since last report)
 þ o
 Yes o No
o
 Rule 12b-2
 Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
(Do not check if smaller reporting company)
    
    Smaller reporting company þ
 o þ




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##### 



COLE CREDIT PROPERTY TRUST, INC.
INDEX
 PART I  FINANCIAL INFORMATIONItem 1. Financial StatementsCondensed Consolidated Unaudited Balance Sheets as of March
31, 2010 and December 31, 2009
    
    
    4Condensed Consolidated Unaudited Statements of Operations for
the three months ended March 31, 2010 and 2009
    
    
    5Condensed Consolidated Unaudited Statement of Stockholders
Equity for the three months ended March 31, 2010
    
    
    6Condensed Consolidated Unaudited Statements of Cash Flows for
the three months ended March 31, 2010 and 2009
    
    
    7Notes to Condensed Consolidated Unaudited Financial Statements
    
    
    8Item 2. Managements Discussion and Analysis of Financial
Condition and Results of Operations
    
    
    12Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    18Item 4T. Controls and Procedures
    
    
    18PART II  OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    19Item 1A. Risk Factors
    
    
    19Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    19Item 3. Defaults Upon Senior Securities
    
    
    19Item 4. Removed and Reserved
    
    
    19Item 5. Other Information
    
    
    19Item 6. Exhibits
    
    
    19Signatures
    
    
    20Exhibit 10.1Exhibit 10.2Exhibit 31.1Exhibit 31.2Exhibit 32.1
   2




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PART I
FINANCIAL INFORMATION
    3




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##### Table of Contents



COLE CREDIT PROPERTY TRUST, INC.
 
 CONDENSED CONSOLIDATED UNAUDITED BALANCE SHEETS  (Dollar amounts in thousands, except share and per share amounts)
 March 31,
    
    
    December 31,2010
    
    
    2009ASSETS:Investment in real estate assets:Land
    
    $
    55,317
    
    
    $
    55,317Buildings and improvements, less accumulated
depreciation of $18,194 and $17,273,
respectively
    
    
    105,357
    
    
    
    106,278Acquired intangible lease assets, less
accumulated amortization of $9,650 and $9,170,
respectively
    
    
    18,688
    
    
    
    19,168Total investment in real estate assets, net
    
    
    179,362
    
    
    
    180,763Cash and cash equivalents
    
    
    1,136
    
    
    
    1,907Rents and tenant receivables, less allowance
for doubtful accounts of $167 and $167,
respectively
    
    
    2,259
    
    
    
    2,478Prepaid expenses and other assets
    
    
    491
    
    
    
    84Deferred financing costs, less accumulated
amortization of $1,399 and $1,518,
respectively
    
    
    911
    
    
    
    770Total assets
    
    $
    184,159
    
    
    $
    186,002LIABILITIES AND STOCKHOLDERS EQUITY:Notes payable and line of credit
    
    $
    118,674
    
    
    $
    118,738Accounts payable and accrued expenses
    
    
    897
    
    
    
    878Due to affiliates
    
    
    46
    
    
    
    41Acquired below market lease intangibles, less
accumulated amortization of $1,069 and $1,018,
respectively
    
    
    1,170
    
    
    
    1,221Distributions payable
    
    
    429
    
    
    
    589Deferred rent and other liabilities
    
    
    212
    
    
    
    615Total liabilities
    
    
    121,428
    
    
    
    122,082STOCKHOLDERS EQUITY:Preferred stock, $0.01 par value; 10,000,000
shares authorized, none issued and outstanding
    
    
    
    
    
    
    Common stock, $0.01 par value; 90,000,000
shares authorized, 10,090,951 shares issued
and outstanding
    
    
    101
    
    
    
    101Capital in excess of par value
    
    
    90,424
    
    
    
    90,424Accumulated distributions in excess of earnings
    
    
    (27,794
    )
    
    
    (26,605
    )Total stockholders equity
    
    
    62,731
    
    
    
    63,920Total liabilities and stockholders equity
    
    $
    184,159
    
    
    $
    186,002
   4




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COLE CREDIT PROPERTY TRUST, INC.
 
 CONDENSED CONSOLIDATED UNAUDITED STATEMENTS OF OPERATIONS  (Dollar amounts in thousands, except share and per share amounts)
 Three Months EndedMarch 31, 2010
    
    
    March 31, 2009Revenues:Rental and other income
    
    $
    3,946
    
    
    $
    3,907Tenant reimbursement income
    
    
    98
    
    
    
    109Total revenue
    
    
    4,044
    
    
    
    4,016Expenses:General and administrative expenses
    
    
    147
    
    
    
    166Property operating expenses
    
    
    125
    
    
    
    129Property management expenses
    
    
    128
    
    
    
    121Depreciation
    
    
    921
    
    
    
    921Amortization
    
    
    450
    
    
    
    450Total operating expenses
    
    
    1,771
    
    
    
    1,787Operating income
    
    
    2,273
    
    
    
    2,229Other income (expense):Interest and other income
    
    
    1
    
    
    
    12Interest expense
    
    
    (1,857
    )
    
    
    (1,799
    )Total other expense
    
    
    (1,856
    )
    
    
    (1,787
    )Net income
    
    $
    417
    
    
    $
    442Weighted average number of common shares outstanding:Basic and diluted
    
    
    10,090,951
    
    
    
    10,090,951Net income per common share:Basic and diluted
    
    $
    0.04
    
    
    $
    0.04
   5




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COLE CREDIT PROPERTY TRUST, INC.
 
 CONDENSED CONSOLIDATED UNAUDITED STATEMENT OF STOCKHOLDERS EQUITY  (Dollar amounts in thousands, except share amounts)
 Common Stock
    
    
    
    
    
    
    Accumulated
    
    
    TotalNumber of
    
    
    
    
    
    
    Capital in Excess in
    
    
    Distributions in
    
    
    StockholdersShares
    
    
    Par Value
    
    
    Par Value
    
    
    Excess of Earnings
    
    
    EquityBalance, January 1, 2010
    
    
    10,090,951
    
    
    $
    101
    
    
    $
    90,424
    
    
    $
    (26,605
    )
    
    $
    63,920Distributions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,606
    )
    
    
    (1,606
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    417
    
    
    
    417Balance, March 31, 2010
    
    
    10,090,951
    
    
    $
    101
    
    
    $
    90,424
    
    
    $
    (27,794
    )
    
    $
    62,731
   6




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COLE CREDIT PROPERTY TRUST, INC.
 
 CONDENSED CONSOLIDATED UNAUDITED STATEMENTS OF CASH FLOWS  (Dollar amounts in thousands)
 Three Months EndedMarch 31, 2010
    
    
    March 31, 2009Cash flows from operating activities:Net income
    
    $
    417
    
    
    $
    442Adjustments to reconcile net income to net
cash provided by operating activities:Depreciation
    
    
    921
    
    
    
    921Amortization
    
    
    504
    
    
    
    529Gain on sale of assets
    
    
    
    
    
    
    (10
    )Changes in assets and liabilities:Rents and tenant receivables
    
    
    219
    
    
    
    82Prepaid expenses and other assets
    
    
    26
    
    
    
    24Accounts payable and accrued expenses
    
    
    (193
    )
    
    
    (65
    )Due to affiliates
    
    
    5
    
    
    
    (129
    )Deferred rent and other liabilities
    
    
    (403
    )
    
    
    (342
    )Net cash provided by operating activities
    
    
    1,496
    
    
    
    1,452Cash flows from investing activities:Proceeds from sale of easement
    
    
    
    
    
    
    13Net cash provided by investing activities
    
    
    
    
    
    
    13Cash flows from financing activities:Distributions to investors
    
    
    (1,766
    )
    
    
    (1,766
    )Payment of loan deposits
    
    
    (433
    )
    
    
    Repayment of notes payable and line of credit
    
    
    (64
    )
    
    
    Deferred financing costs paid
    
    
    (4
    )
    
    
    Net cash used in financing activities
    
    
    (2,267
    )
    
    
    (1,766
    )Net decrease in cash and cash equivalents
    
    
    (771
    )
    
    
    (301
    )Cash and cash equivalents, beginning of period
    
    
    1,907
    
    
    
    923Cash and cash equivalents, end of period
    
    $
    1,136
    
    
    $
    622Supplemental Disclosures of Non-Cash Investing
and Financing Activities:Dividends declared and unpaid
    
    $
    429
    
    
    $
    589Accrued deferred financing costs
    
    $
    212
    
    
    $
    Supplemental Cash Flow Disclosures:Interest paid
    
    $
    1,774
    
    
    $
    1,700
   7




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COLE CREDIT PROPERTY TRUST, INC.
NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
March 31, 2010
 NOTE 1  ORGANIZATION AND BUSINESS
    NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Principles of Consolidation and Basis of Presentation
   Redemptions of Common Stock
   8




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COLE CREDIT PROPERTY TRUST, INC.
NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS  (Continued)
March 31, 2010
 NOTE 3  FAIR VALUE MEASUREMENTS
 Fair Value Measurements and Disclosures
     Cash and cash equivalents, rents and tenant receivables, and accounts payable and accrued
expenses
 Notes
payable and line of credit
  NOTE 4  NOTES PAYABLE AND LINE OF CREDIT
     9




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COLE CREDIT PROPERTY TRUST, INC.
NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS  (Continued)
March 31, 2010
 NOTE 5  COMMITMENTS AND CONTINGENCIES
 Litigation
  Environmental Matters
  NOTE 6  RELATED-PARTY TRANSACTIONS AND ARRANGEMENTS
       10




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COLE CREDIT PROPERTY TRUST, INC.
NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS  (Continued)
March 31, 2010
    NOTE 7  ECONOMIC DEPENDENCY
  NOTE 8  NEW ACCOUNTING PRONOUNCEMENTS
 Fair Value Measurements and Disclosures
 NOTE 9  SUBSEQUENT EVENTS
 Notes Payable and Line of Credit
     11




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Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
  Forward-Looking Statements
    Overview
    12




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Recent Market Conditions
   Results of Operations
 Three Months Ended March 31, 2010 Compared to the Three Months Ended March 31, 2009
 Revenue
  13




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General and Administrative Expenses.
 Property Operating Expenses.
 Property Management Expenses.
 Depreciation and Amortization Expenses.
 Interest and Other Income.
 Interest Expense.
 Funds From Operations
    14




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Three Months Ended March 31,2010
    
    
    2009Net income
    
    $
    417
    
    
    $
    442Add:Depreciation of real estate assets
    
    
    921
    
    
    
    921Amortization of lease related costs
    
    
    450
    
    
    
    450Less:Gain on sale of easement
    
    
    
    
    
    
    (10
    )FFO
    
    $
    1,788
    
    
    $
    1,803
  
    
    In order to recognize revenues on a straight-line basis
over the terms of the respective leases, we recognized
additional revenue by straight-lining rental revenue of
$48,000 and $83,000 during the three months ended March
31, 2010 and 2009, respectively.
    
    Amortization of deferred financing costs totaled $75,000
and $99,000 during the three months ended March 31, 2010
and 2009, respectively.
 Liquidity and Capital Resources
 Short-term Liquidity and Capital Resources
  Long-term Liquidity and Capital Resources
     15




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Payments due by period (1)(2)More than 5Less than 1 year
    
    
    1-3 years
    
    
    4-5 years
    
    
    years
    
    
    TotalPrincipal payments  fixed rate debt (1)
    
    $
    580
    
    
    $
    9,861
    
    
    $
    75,460
    
    
    $
    33,058
    
    
    $
    118,959Interest payments  fixed rate debt (1)
    
    
    7,548
    
    
    
    21,637
    
    
    
    10,088
    
    
    
    748
    
    
    
    40,021Principal payments  line of credit (1)
    
    
    
    
    
    
    1,935
    
    
    
    
    
    
    
    
    
    
    
    1,935Interest payments  line of credit (3)
    
    
    111
    
    
    
    115
    
    
    
    
    
    
    
    
    
    
    
    226Total
    
    $
    8,239
    
    
    $
    33,548
    
    
    $
    85,548
    
    
    $
    33,806
    
    
    $
    161,141
 (1)
    
    Subsequent to March 31, 2010, we entered into $52.6
million of borrowings for which the proceeds were used to
refinance all of the fixed and variable rate debt maturing
during the year ending December 31, 2010 and the loans
which were previously extended under the
hyper-amortization provisions. See Notes 4 and 9 for
further discussion. Accordingly, the table above is
presented to show our contractual obligations after the
effect of the financing activity noted above.(2)
    
    The table above does not include amounts due to our
advisor or its affiliates pursuant to our advisory
agreement because such amounts are not fixed and
determinable.(3)
    
    Based on interest rate in effect as of March 31, 2010. Cash Flow Analysis
 Three Months Ended March 31, 2010 Compared to the Three Months Ended March 31, 2009
 Operating Activities.
 Investing Activities.
 Financing Activities.
  16




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Election as a REIT
  Inflation
  Critical Accounting Policies and Estimates
  
    
    Investment in and Valuation of Real Estate and Related Assets;
    
    Allocation of Purchase Price of Real Estate and Related Assets;
    
    Revenue Recognition; and
    
    Income Taxes.
  Commitments and Contingencies
  Related-Party Transactions and Agreements
   17




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New Accounting Pronouncements
 Form 10-Q
 Off Balance Sheet Arrangements
  
 Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
  
 Item 4T.
    
    Controls and Procedures
    18




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PART II
OTHER INFORMATION
 
 Item 1.
    
    Legal Proceedings
  
 Item 1A.
    
    Risk Factors
  
 Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
  
 Item 3.
    
    Defaults Upon Senior Securities
  
 Item 4.
    
    Removed and Reserved
 
 Item 5.
    
    Other Information
  
 Item 6.
    
    Exhibits
   19




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SIGNATURES
  Cole Credit Property Trust, Inc.(Registrant)By:
    /s/ Christopher H. ColeChristopher H. ColeChief Executive Officer, President, and Director
(Principal Executive Officer)By:
    /s/ D. Kirk McAllaster, Jr.D. Kirk McAllaster, Jr.Executive Vice President, Chief Financial Officer and Director
(Principal Financial Officer)   20




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EXHIBIT INDEX
  Exhibit No.
    
    Description3.1
    
    
    Articles of Incorporation. (Incorporated by reference to the
Companys Registration Statement on Form 10-SB (File No.
000-51962) filed on May 1, 2006).3.2
    
    
    Amended and Restated Bylaws. (Incorporated by reference to
the Companys Registration Statement on Form 10-SB (File No.
000-51962) filed on May 1, 2006).10.1
    
    
    Loan Agreement, dated April 1, 2010, by and between Cole
Credit Property Trust, Inc., and certain of its wholly-owned
subsidiaries, collectively as Borrower, and The Royal Bank of
Scotland PLC as lender.10.2
    
    
    Loan Agreement, dated April 1, 2010, by and between Cole
Mezzco CCPT I, LLC as Borrower, and IVC Cole Mezz, LLC as
lender.31.1
    
    
    Certification of the Chief Executive Officer of the Company
pursuant to Securities Exchange Act Rule 13a-14(a) or
15d-14(a), as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 (filed herewith).31.2
    
    
    Certification of the Chief Financial Officer of the Company
pursuant to Securities Exchange Act Rule 13a-14(a) or
15d-14(a), as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 (filed herewith).32.1
    *
    
    Certification of the Chief Executive Officer and Chief
Financial Officer of the Company pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 (furnished herewith).
 *
    
    In accordance with Item 601(b)(32) of Regulation S-K, this Exhibit is not deemed filed for
purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section.
Such certifications will not be deemed incorporated by reference into any filing under the
Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the registrant
specifically incorporates it by reference.  21