**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**




**FORM
      10-Q**


(Mark
      One)


**x           QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES**


**EXCHANGE
      ACT OF 1934**




For
      the quarterly period ended March 31, 2008




**OR**




**o           TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES**


**EXCHANGE
      ACT OF 1934**




For
      the transition period from _________ to __________




Commission
      file number: 333-145949




**AMERICAN
      REALTY CAPITAL TRUST, INC.**


(Exact
      name of registrant as specified in its charter)




**Maryland**
            
            **71-1036989**(State
                or other  jurisdiction
              of
                incorporation or organization)
            
            (I.R.S.
                Employer Identification No.)**106
                Old York Road**
              **Jenkintown,
                PA**
            
            **19046**(Address
                of principal executive offices)
            
            (Zip
                Code)**(215)
                887-2189**(Registrant’s
                telephone number, including area
                code)





Indicate
      by check mark whether the registrant (1) has filed all reports required to
      be
      filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
      the
      preceding 12 months (or for such shorter period that the registrant was required
      to file such reports), and (2) has been subject to such filing requirements
      for
      the past 90 days. x Yes  ̈ No





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





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





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





The
      number of outstanding shares of the registrant’s common stock on May 14, 2008
      was 775,985 shares.







**AMERICAN
      REALTY CAPITAL TRUST, INC.**


**INDEX**




PART
                I — FINANCIAL INFORMATIONItem 1.
                Financial Statements
            3Consolidated
                Balance Sheets as of March 31, 2008 (Unaudited) and December 31,
                2007
            3Consolidated
                Statement of Operations for the three months ended March 31, 2008
                (Unaudited)
            4Consolidated
                Statement of Stockholders’ Equity for the three months ended March 31,
                2008 (Unaudited)
            5Consolidated
                Statement of Cash Flows for the three months ended March 31, 2008
                (Unaudited)
            6Notes
                to Consolidated Financial Statements (Unaudited)
            7Item 2.
                Management’s Discussion and Analysis of Financial Condition and Results of
                Operations
            17Item 3.
                Quantitative and Qualitative Disclosures About Market Risk
            23PART
                II — OTHER INFORMATION
            24Item 1.
                Legal Proceedings
            24Item
                1A. Risk Factors
            24Item 2.
                Unregistered Sales of Equity Securities and Use of
                Proceeds
            24Item 3.
                Defaults Upon Senior Securities
            24Item 4.
                Submission of Matters to a Vote of Security Holders
            24Item 5.
                Other Information
            24Item 6.
                Exhibits
            24Signatures
            25








2




**PART
      I - Financial Information**




**Item
      1. Financial Statements**




**AMERICAN
      REALTY CAPITAL TRUST, INC.**


**CONSOLIDATED
      BALANCE SHEETS**





**March
                31,**
              **2008**
                **(Unaudited)**
            
            **December
                31,**
                **2007****ASSETS**Real
                estate investments, at cost:Land
            
            $
            7,088,620
            
            $
            —Buildings,
                fixtures and improvements
            
            
            40,168,841
            
            
            —Acquired
                intangible lease assets
            
            
            4,594,426
            
            
            —Total
                real estate investments, at cost
            
            
            51,851,887
            
            
            —Less
                accumulated depreciation and amortization
            
            
            (171,477
            )Total real estate investments, net
            
            
            51,680,410
            
            
            —Cash
                and cash equivalents
            
            
            529,876
            
            
            —Prepaid
                expenses and other assets
            
            
            600,184
            
            
            938,157Deferred
                financing costs, net
            
            
            420,448
            
            
            —Total
                assets
            
            $
            53,230,918
            
            $
            938,157**LIABILITIES
                AND STOCKHOLDERS’ EQUITY**Mortgage
                and other notes payable
            
            $
            41,918,796
            
            $
            —Related
                party revolving credit facility
            
            
            4,000,000
            
            
            —Accounts
                payable and accrued expenses
            
            
            1,195,160
            
            
            453,832Investor contributions
                held in escrow
            
            
            1,461,315
            
            
            —Due
                to affiliates
            
            
            697,629
            
            
            284,825Deferred
                rent and other liabilities
            
            
            308,890
            
            
            —Total
                liabilities
            
            
            49,581,790
            
            
            738,657**STOCKHOLDERS’
                EQUITY**Preferred
                stock, $0.01 par value; 10,000,000 shares authorized, none issued
                and
                outstanding
            
            
            —
            
            
            —Common
                stock, $.01 par value; 240,000,000 shares authorized, 623,279 and
                20,000
                shares issued and outstanding at March 31, 2008 and December 31,
                2007,
                respectively
            
            
            6,233
            
            
            200Additional
                paid-in capital
            
            
            3,985,245
            
            
            199,800Accumulated
                deficit
            
            
            (342,350
            )
            
            (500
            )Total
                stockholders’ equity
            
            
            3,649,128
            
            
            199,500Total
                liabilities and stockholders’ equity
            
            $
            53,230,918
            
            $
            938,157








See
      accompanying notes to consolidated financial statements


3




**AMERICAN
      REALTY CAPITAL TRUST, INC.**


**CONSOLIDATED
      STATEMENT OF OPERATIONS**


**(Unaudited)**






**Three
                Months Ended March 31,** 

                **2008**Rental
                income
            
            $
            214,426**Expenses**Property
                management fees to affiliate
            
            
            4,262General
                and administrative
            
            
            188,827Depreciation
                and amortization
            
            
            171,477Total
                operating expenses
            
            
            364,566**Operating
                loss**
            
            
            (150,140
            )**Other
                income (expense)**Interest
                expense
            
            
            (191,710
            )Interest
                income
            
            
            —Total
                other income (expense)
            
            
            (191,710
            )**Net
                loss**
            
            $
            (341,850
            )**Basic
                and diluted weighted average****common
                shares outstanding**
            
            
            134,013**Basic
                and diluted loss per share**
            
            $
            (2.55
            )








See
      accompanying notes to consolidated financial statements


4




**AMERICAN
      REALTY CAPITAL TRUST, INC.**


**CONSOLIDATED
      STATEMENT OF STOCKHOLDERS’ EQUITY**


**(Unaudited)**






**Common
                Stock****Number
                of Shares**
            
            **Par
                Value**
            
            **Additional
                Paid-In Capital**
            
            **Accumulated
                Deficit**
            
            **Total
                Stockholders’ Equity****Balance,
                December 31, 2007**
            
            20,000
            
            $
            200
            
            $
            199,800
            
            $
            (500
            )
            $
            199,500Issuance
                of common stock, net of offering costs of
              $1,683,033
            
            603,279
            
            
            6,033
            
            
            3,785,445
            
            
            —
            
            
            3,791,478Net
                loss
            
            —
            
            
            —
            
            
            —
            
            
            (341,850
            )
            
            (341,850
            )**Balance,
                March 31, 2008**
            
            623,279
            
            $
            6,233
            
            $
            3,985,245
            
            $
            (342,350
            )
            $
            3,649,128








See
      accompanying notes to consolidated financial statements




5




**AMERICAN
      REALTY CAPITAL TRUST, INC.**


**CONSOLIDATED
      STATEMENT OF CASH FLOWS**


**(Unaudited)**




**Three
                Months Ended March 31,****2008****Cash
                flows from operating activities:**Net
                loss
            
            $
            (341,850
            )Adjustments
                to reconcile net loss to net cash
              used
                in operating activities:Depreciation
            
            
            144,023Amortization
                of intangibles
            
            
            27,454Amortization
                of deferred finance charges
            
            
            3,138Changes
                in assets and liabilities:Prepaid
                expenses and other assets
            
            
            (1,023,770
            )Accounts
                payable and accrued
              expenses
            
            
            837,363Deferred
                rent and other liabilities
            
            
            308,890Net
                cash used in operating activities
            
            
            (44,752
            )**Cash
                flows from investing activities:**Investment
                in real estate and related assets
            
            
            (2,543,774
            )Net
                cash used in investing activities
            
            
            (2,543,774
            )**Cash
                flows from financing activities:**Proceeds
                from issuance of common stock, net
            
            
            3,118,402Net
                cash provided by financing activities
            
            
            3,118,402**Net
                increase in cash and cash equivalents**
            
            
            529,876**Cash
                and cash equivalents, beginning of**
              **period**
            
            
            —**Cash
                and cash equivalents, end of period**
            
            $
            529,876**Supplemental
                Disclosures of Non-Cash**
              **Investing
                and Financing Activities:**Debt
                assumed in real estate acquisitions
            
            $
            45,918,796Common
                share issuance in real estate
              acquisition
            
            $
            1,621,205Investor
              contributions held in escrow
            
            $
            1,461,315Non-cash
                acquisition costs
            
            $
            306,797







See
      accompanying notes to consolidated financial statement


6




**AMERICAN
      REALTY CAPITAL TRUST, INC.**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**March
      31, 2008**


**(Unaudited)**




**Note
      1 — Organization**




American
      Realty Capital Trust, Inc. (the “Company”), incorporated on August 17, 2007, is
      a newly formed Maryland corporation that intends to qualify as a real estate
      investment trust (“REIT”) for federal income tax purposes beginning with the
      taxable year that will end December 31, 2008. On January 25, 2008, the
      Company commenced an initial public offering on a “best efforts” basis of up to
      150,000,000 shares of common stock offered at a price of $10.00 per
      share, subject to certain volume and other discounts, pursuant to a Registration
      Statement on Form S-11 filed with the Securities and Exchange Commission
      (the “SEC”) under the Securities Act of 1933, as amended (the “Offering”). The
      Registration Statement also covered up to 25,000,000 shares available
      pursuant to a distribution reinvestment plan (the “DRIP”) under which our
      stockholders may elect to have their distributions reinvested in additional
      shares of the Company’s common stock at the greater of $9.50 per share or
      95% of the estimated value of a share of common stock. The Company sold 20,000
      shares to American Realty Capital II, LLC (the “Sponsor”) on August 17, 2007, at
      $10.00 per share. As of March 31, 2008, the Company issued 623,279 shares of
      Common stock for net offering proceeds of approximately $4.0
      million, including 179,026 shares issued in connection with an
      acquisition in March 2008 - see Note 3 - Real Estate Acquisitions.





Substantially
      all of the Company’s business is conducted through American Realty Capital
      Operating Partnership, L.P. (the “OP”), a Delaware limited partnership. The
      Company is the sole general partner of and owns a 99.9% partnership interest
      in
      the OP. American Realty Capital Advisors, LLC (the “Advisor”), the Company’s
      affiliated advisor, is the sole limited partner and owner of 0.1% (minority
      interest) of the partnership interests of the OP. In March 2008, the OP issued
      to the Company 20,000 Operating Partnership units in exchange for
      $200,000 .
      Additionally, in April 2008, the Advisor contributed $2,000 to the Operating
      Partnership in exchange for a 0.99% limited partner interest in the Operating
      Partnership. The limited partner interests have the right to convert Operating
      Partnerships units into cash or, at the option of the Company, an equal number
      of common shares of the Company, as allowed by the limited partnership
      agreement. The remaining rights of the limited partner interests are limited,
      however, and do not include the ability to replace the general partner or to
      approve the sale, purchase or refinancing of the Operating Partnership’s assets.





The
      Company acquires and operates primarily commercial properties. All such
      properties may be acquired and operated by the Company alone or jointly with
      another party. As of March 31, 2008, the Company owned 16 properties comprising
      approximately 233,000 square feet of freestanding, single tenant commercial
      space concentrated in Pennsylvania. As of March 31, 2008, these properties
      were 100% occupied. The Company may also acquire mortgages secured by real
      estate, with a view towards acquiring such real estate .





The
      Company is managed by the Advisor and American Realty Capital Properties, LLC,
      which serves as the Company’s property manager (“Property Manager”). Realty
      Capital Securities, LLC (“Dealer Manager”), an affiliate of the Sponsor, serves
      as the dealer manager of the Company’s public offering. These related parties
      receive compensation and fees for services related to the offering and for
      the
      investment and management of the Company’s assets. These entities receive fees
      during the offering, acquisition, operational and liquidation stages. The
      compensation levels during the offering, acquisition and operational stages
      are
      discussed in Note 6 — Related Party Transactions.





The
      Company’s stock is not currently listed on a national securities exchange. The
      Company may seek to list its stock for trading on a national securities exchange
      only if a majority of its independent directors believe listing would be in
      the
      best interest of its stockholders. The Company does not intend to list its
      shares at this time. The Company does not anticipate that there would be any
      market for its common stock until its shares are listed for trading. In the
      event it does not obtain listing prior to the tenth anniversary of the
      completion or termination of the Offering, its charter requires that it either:
      (i) seek stockholder approval of an extension or amendment of this listing
      deadline; or (ii) seek stockholder approval to adopt a plan of liquidation
      of the corporation.








7




**AMERICAN
      REALTY CAPITAL TRUST, INC.**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**March
      31, 2008**


**(Unaudited)**







**Note
      2 — Summary of Significant Accounting Policies**




***Basis
      of Presentation***




Certain
      information and footnote disclosures normally included in financial statements
      prepared in accordance with accounting principles generally accepted in the
      United States of America have been condensed or consolidated pursuant to the
      rules and regulations of the Securities and Exchange Commission. Management
      believes, however, that the disclosures are adequate to make the information
      presented not misleading. The unaudited interim consolidated financial
      statements should be read in conjunction with the audited financial statements
      and the notes thereto included in the Company’s annual report on Form S-11 for
      the period from August 17, 2007 (date of inception) to December 31, 2007.
      In management’s opinion, all adjustments, consisting only of normal recurring
      adjustments, necessary to present fairly the consolidated financial position
      of
      the Company and the consolidated results of its operations and its cash flows,
      are included. The results of operations for such interim periods are not
      necessarily indicative of the results for the full year.





***Basis
      of Accounting***





The
      accompanying consolidated financial statements of the Company are prepared
      on
      the accrual basis of accounting in accordance with accounting principles
      generally accepted in the United States of America.





***Principles
      of Consolidation and Basis of Presentation***




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





***Use
      of Estimates***





The
      preparation of financial statements in conformity with accounting principles
      generally accepted in the United States of America requires management to make
      estimates and assumptions that affect the reported amounts of assets and
      liabilities and disclosure of contingent assets and liabilities at the date
      of
      the financial statements and the reported amounts of revenues and expenses
      during the reporting period. Actual results could differ from those estimates.
      Management makes significant estimates regarding revenue recognition,
      investments in real estate, purchase price allocations and derivative financial
      instruments and hedging activities, as applicable.




***Real
      Estate Investments***





The
      Company records acquired real estate at cost and makes assessments as to the
      useful lives of depreciable assets. The Company considers the period of future
      benefit of the asset to determine the appropriate useful lives. Depreciation
      is
      computed using a straightline method over the estimated useful life of 40 years
      for buildings, five to ten
      years for building fixtures and improvements and the remaining lease term for
      acquired intangible lease assets.





***Allocation
      of Purchase Price of Acquired Assets***





Upon
      the
      acquisition of real properties, it is the Company’s policy to allocate the
      purchase price of properties to acquired tangible assets, consisting of land,
      building, fixtures and improvements, and identified intangible lease assets
      and
      liabilities, consisting of the value of above-market and below-market leases,
      as
      applicable, other value of in-place leases and value of tenant relationships,
      based in each case on their fair values. The Company utilizes independent
      appraisals and information management obtained on each property as a result
      of
      pre-acquisition due diligence, as well as subsequent marketing and leasing
      activities, as applicable, to determine the fair values of the tangible assets
      of an acquired property (which includes land and building), amongst other market
      data.





The
      fair
      values of above-market and below-market in-place lease values are recorded
      based
      on the present value (using an interest rate which reflects the risks associated
      with the leases acquired) of the difference between (a) the contractual amounts
      to be paid pursuant to the in-place leases and (b) an estimate of fair market
      lease rates for the corresponding in-place leases, which is generally obtained
      from independent appraisals, measured over a period equal to the remaining
      non-cancelable term of the lease. The above-market and below-market lease values
      are capitalized as intangible lease assets or liabilities and amortized as
      an
      adjustment of rental income over the remaining terms of the respective leases.





The
      fair
      values of in-place leases include direct costs associated with obtaining a
      new
      tenant, opportunity costs associated with lost rentals which are avoided by
      acquiring an in-place lease, and tenant relationships. Direct costs associated
      with obtaining a new tenant include commissions, tenant improvements, and other
      direct costs and are estimated based on independent appraisals and management’s
      consideration of current market costs to execute a similar lease. These direct
      costs are included in acquired intangible lease assets in the accompanying
      consolidated balance sheet and are amortized to expense over the remaining
      terms
      of the respective leases. The value of opportunity costs is calculated using
      the
      contractual amounts to be paid pursuant to the in-place leases over a market
      absorption period for a similar lease. Customer relationships are valued based
      on expected renewal of a lease or the likelihood of obtaining a particular
      tenant for other locations. These intangibles will be included in intangible
      lease assets in the balance sheet and are amortized to expense over the
      remaining term of the respective leases.





8




**AMERICAN
      REALTY CAPITAL TRUST, INC.**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**March
      31, 2008**


**(Unaudited)**




The
      determination of the fair values of the assets and liabilities acquired requires
      the use of significant assumptions with regard to the current market rental
      rates, rental growth rates, discount rates and other variables. The use of
      inappropriate estimates would result in an incorrect assessment of the purchase
      price allocations, which could impact the amount of the Company’s reported net
      income. Initial purchase price allocations are subject to change until all
      information is finalized, which is generally within one year of the acquisition
      date.





As
      of
      March 31, 2008, acquired lease intangible assets consist only of in-place lease
      intangibles totaling $4,594,426 with accumulated amortization of $27,454.





***Impairment
      of Long Lived Assets***





The
      Company follows Statement of Financial Accounting Standard (“SFAS”) No.144,
“Accounting for the Impairment or Disposal of Long-Lived Assets,” which
      establishes a single accounting model for the impairment or disposal of
      long-lived assets. SFAS No.144 requires that the operations related to
      properties that have been sold or properties that are intended to be sold be
      presented as discontinued operations in the statement of operations for all
      periods presented, and properties intended to be sold to be designated as “held
      for sale” on the balance sheet.





When
      circumstances indicate the carrying value of a property may not be recoverable,
      the Company reviews the asset for impairment. This review is based on an
      estimate of the future undiscounted cash flows, excluding interest charges,
      expected to result from the property’s use and eventual disposition. These
      estimates consider factors such as expected future operating income, market
      and
      other applicable trends and residual value, as well as the effects of leasing
      demand, competition and other factors. If impairment exists, due to the
      inability to recover the carrying value of a property, an impairment loss is
      recorded to the extent that the carrying value exceeds the estimated fair value
      of the property for properties to be held and used. For properties held for
      sale
      the impairment loss is the adjustment to fair value less estimated cost to
      dispose of the asset. These assessments have a direct impact on net income
      because recording an impairment loss results in an immediate negative adjustment
      to net income.





***Investor
      contributions held in Escrow***




The
      Company is currently engaged in a public offering of its common stock. Included
      in investor contributions held in escrow on the accompanying balance sheet
      is
      $1,461,315 of offering proceeds for which shares of common stock had not been
      issued as of March 31, 2008.





***Redeemable
      Common Stock***




The
      Company’s share redemption program provides that all redemptions during any
      calendar year, including those upon death or qualifying disability, are limited
      to those that can be funded with proceeds from the Company’s DRIP. In accordance
      with Accounting Series Release No. 268, “Presentation in Financial Statements of
      Redeemable Preferred Stock,” the Company accounts for proceeds received from its
      DRIP as redeemable common stock, outside of permanent equity. As of March 31,
      2008 and December 31, 2007, the Company had not issued any common stock under
      the DRIP as no dividends are required to be paid until May 2008.





***Revenue
      Recognition***





Upon
      the
      acquisition of real estate, certain properties will have leases where minimum
      rent payments increase during the term of the lease. The Company will record
      rental revenue for the full term of each lease on a straightline basis. When
      the
      Company acquires a property, the term of existing leases is considered to
      commence as of the acquisition date for the purposes of this calculation. In
      accordance with Staff Accounting Bulletin No. 101, “Revenue Recognition in
      Financial Statements,” the Company will defer the recognition of contingent
      rental income, such as percentage rents, until the specific target that triggers
      the contingent rental income is achieved. Cost recoveries from tenants are
      included in tenant reimbursement income in the period the related costs are
      incurred, as applicable.


The
        Companies’ revenues, which are derived primarily from rental income, include
        rents that each tenant pays in accordance with the terms of each lease reported
        on a straightline basis over the initial term of the lease. Since many of
        the
        leases provide for rental increases at specified intervals, straightline
        basis
        accounting requires the Company to record a receivable, and include in revenues,
        unbilled rent receivables that the Company will only receive if the tenant
        makes
        all rent payments required through the expiration of the initial term of
        the
        lease.
  The
        Company continually reviews receivables related to rent and unbilled rent
        receivables and determines collectibility by taking into consideration the
        tenant’s payment history, the financial condition of the tenant, business
        conditions in the industry in which the tenant operates and economic conditions
        in the area in which the property is located. In the event that the
        collectibility of a receivable is in doubt, the Company will record an increase
        in the allowance for uncollectible accounts or record a direct write-off
        of the
        receivable in the consolidated statements of operations.




***Organization,
      Offering, and Related Costs***




Organization
      and offering costs (other than selling commissions and the dealer manager fee)
      of the Company may be paid by the Advisor, the Dealer Manager or their
      affiliates on behalf of the Company. Such organization and offering costs
      include all expenses to be paid by the Company in connection with the Offering,
      including but not limited to (i) legal, accounting, printing, mailing, and
      filing fees; (ii)  escrow related fees; (iii) reimbursement of the
      Dealer Manager for amounts it may pay to reimburse the bona fide diligence
      expenses of broker-dealers; and (iv) reimbursement to the Advisor for the
      salaries of its employees and other costs in connection with preparing
      supplemental sales materials. Pursuant to the Advisory Agreement and the Dealer
      Manager Agreement, the Company is obligated to reimburse the Advisor or its
      affiliates, as applicable, for organization and offering costs paid by them
      on
      behalf of the Company, provided that the Advisor is obligated to reimburse
      the
      Company to the extent selling commissions, the dealer manager fee and other
      organization and offering costs incurred by the Company in the Offering exceed
      15% of gross offering proceeds.


9




**AMERICAN
      REALTY CAPITAL TRUST, INC.**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**March
      31, 2008**


**(Unaudited)**






As
      a
      result, these costs are only a liability of the Company to the extent selling
      commissions, the dealer manager fee and other organization and offering costs
      do
      not exceed 15% of the gross proceeds of the Offering. Through March 31, 2008,
      the Company had issued 623,279 shares for gross offering proceeds of
      approximately $5.6 million and recorded offering costs of
      approximately $1.6 million and selling commissions and dealer manager fees
      of
      $0. The total shares issued includes 179,026 shares issued in connection
      with an acquisition - see Note 3. Organization costs are expensed as incurred
      within general and administrative expenses, and offering costs, which include
      selling commissions and dealer manager fees, are charged to stockholders’ equity
      as such amounts are reimbursed from the gross proceeds of the Offering.





***Reportable
      Segments***




The
      Financial Accounting Standards Board (“FASB”) issued SFAS No. 131,
“Disclosures about Segments of an Enterprise and Related Information,” which
      establishes standards for reporting financial and descriptive information about
      an enterprise’s reportable segments. The Company determined that it has one
      reportable segment, with activities related to investing in real estate. The
      Company’s investments in real estate generate rental revenue and other income
      through the leasing of properties, which comprised 100% of our total
      consolidated revenues for the three-month period ended March 31, 2008. Although
      the Company’s investments in real estate will be geographically diversified
      throughout the United States, management evaluates operating performance on
      an
      individual property level. The Company’s properties have been aggregated into
      one reportable segment.





***Recent
      Accounting Pronouncements***




In
      December 2007, the FASB issued SFAS No. 141, (revised 2007), “Business
      Combinations,” (“SFAS No. 141(R)”), which continues the evolution toward
      fair value reporting and significantly changes the accounting for acquisitions
      that close beginning in 2009, both at the acquisition date and in subsequent
      periods. SFAS No. 141(R) introduces new accounting concepts and valuation
      complexities, and many of the changes have the potential to generate greater
      earnings volatility after the acquisition. SFAS No. 141(R) applies to
      acquisitions on or after January 1, 2009 and will impact the Company’s
      reporting prospectively only.





In
      September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements,”
(“SFAS No. 157”), which addresses how companies should measure fair value
      when they are required to use a fair value measure for recognition or disclosure
      purposes under Generally Accepted Accounting Principles (“GAAP”). As a result of
      SFAS No. 157 there is now a common definition of fair value to be used
      throughout GAAP. The FASB believes that the new standard will make the
      measurement of fair value more consistent and comparable and improve disclosures
      about those measures. The effective date of SFAS No. 157 is delayed for one
      year for certain nonfinancial assets and nonfinancial liabilities, except those
      that are recognized or disclosed at fair value in the financial statements
      on a
      recurring basis (at least annually). Certain provisions of SFAS No. 157 are
      effective for the Company beginning in the first quarter of 2008. The adoption
      of SFAS No. 157 for financial assets and liabilities in the first quarter
      of 2008 did not have a material effect on the Company’s results of operations
      and financial position. The Company is currently evaluating the impact of
      adoption SFAS No. 157 for nonfinancial assets and liabilities, on its
      results of operations and financial position.




In
      February 2007, the FASB issued SFAS No. 159, “Fair Value Option for
      Financial Assets and Financial Liabilities,” (“SFAS No. 159”), which
      permits entities to choose to measure many financial instruments and certain
      other items at fair value that are not currently required to be measured at
      fair
      value. The objective of SFAS No. 159 is to improve financial reporting by
      providing entities with the opportunity to mitigate volatility in reported
      earnings caused by measuring related assets and liabilities differently without
      having to apply complex hedge accounting provisions. SFAS No. 159 was
      effective for the Company beginning in the first quarter of 2008. The adoption
      of SFAS No. 159 did not have a material impact on the Company’s financial
      position, results of operations or cash flows in the first quarter of 2008.




In
      December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
      Consolidated Financial Statements - an amendment of Accounting Research Bulletin
      No. 51,” (“SFAS No. 160”), which requires companies to measure an
      acquisition of noncontrolling (minority) interest at fair value in the equity
      section of the acquiring entity’s balance sheet. The objective of SFAS
      No. 160 is to improve the comparability and transparency of financial data
      as well as to help prevent manipulation of earnings. The changes introduced
      by
      the new standards are likely to affect the planning and execution, as well
      as
      the accounting and disclosure, of merger transactions. The effective date to
      adopt SFAS No. 160 for the Company is January 1, 2009. The adoption of
      SFAS No. 160 is not expected to have a material effect on its results of
      operations and financial position.





10




**AMERICAN
      REALTY CAPITAL TRUST, INC.**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**March
      31, 2008**


**(Unaudited)**







***Recent
      Accounting Pronouncements (continued)***




In
      March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative
      Instruments and Hedging Activities, an amendment of FASB Statement
      No. 133,” (“SFAS No. 161”). SFAS No. 161 amends and expands the
      disclosure requirements of SFAS No. 133, (“Accounting for Derivative
      Instruments and Hedging Activities”), with the intent to provide users of
      financial statements with an enhanced understanding of how and why an entity
      uses derivative instruments, how derivative instruments and related hedged
      items
      are accounted for under SFAS No. 133 and its related interpretations and
      how derivative instruments and related hedged items affect an entity’s financial
      position, financial performance, and cash flow. The provisions of SFAS
      No. 161 are effective for the Company beginning in the first quarter of
      2009. The adoption of SFAS No. 161 is not expected to have a material
      effect on the Company’s results of operations and financial position.





**Note
      3 — Real Estate Acquisitions**




During
      the three months ended March 31, 2008, the Company acquired 16 properties in
      two
      separate transactions. The following table presents the allocation of the assets
      acquired and liabilities assumed during the period:





Real
                estate investments, at cost:Land
            
            $
            7,088,620Buildings,
                fixtures and improvements
            
            
            40,168,84147,257,461Intangibles
                and other assets:In-place
                leases
            
            
            4,594,426Total
                assets acquired
            
            
            51,851,887Liabilities
                assumed:Mortgage
                notes
            
            
            (37,965,000
            )Related
                party note
            
            
            (4,000,000
            )Mezzanine
                financing
            
            
            (3,953,796
            )Investor
                contributions held in escrow
            
            
            (1,461,315
            )Other
                liabilities
            
            
            (306,797
            )Total
                liabilities assumed
            
            
            (47,686,908
            )Issuance
                of common shares
            
            
            (1,621,205
            )Cash
                paid
            
            $
            2,543,774





11


**AMERICAN
        REALTY CAPITAL TRUST, INC.**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **March
        31, 2008**
 **(Unaudited)**


During
      the three months ended March 31, 2008, the Company acquired the following
      properties:




**Seller
                / Property Name**
            
            **Acquisition
                Date**
            
            **No.
                of Buildings**
            
            **Square
                Feet**
            
            **Purchase
                Price (1)**Federal
                Express Distribution Center
            
            March
                2008
            
            1
            
            55,440
            
            $10,193,831Harleysville
                National Bank Portfolio
            
            March
                2008
            
            15
            
            177,744
            
            41,658,056Total
            
            
            
            16
            
            233,184
            
            $51,851,887




________________________





(1)
            -
                Includes all acquisition costs, the value of acquired intangible
                lease
                assets and assumed liabilities.


In
        March
        2008, the Company acquired a Federal Express Distribution center located
        in
        Pennsylvania from a related party - see Note 6. In connection with this
        transaction, the Company assumed a mortgage note obligation of $6,965,000,
        which
        bears interest at a fixed effective rate of 6.29%. This note is interest
        only
        through September 1, 2014 and then amortizes through September 1, 2037, with
        a
        final balloon payment due on such date. This
        property was acquired in exchange for 342,502 shares of common stock valued
        at
        approximately $3,083,000, of which, 179,026 shares were issued and outstanding
        as of March 31, 2008. The remainder of the shares was recorded as investor
        contributions held in escrow on the accompanying balance sheet and are expected
        to be issued within the next twelve months.The lease expires on November
        30, 2018 and
        includes renewal options.


In
      March
      2008, the Company acquired a fifteen building portfolio 100% leased to
      Harleysville National Bank from a related party - see Note 6. These properties
      are all located in Pennsylvania. In connection with this transaction, the
      Company assumed a mortgage note obligation of $31,000,000, which bears interest
      at a fixed effective rate of 6.59%. This
      note
      is interest only through January 1, 2011 and then amortizes through January
      1,
      2018, with a final balloon payment due on such date. In addition, the Company
      assumed a mezzanine
      financing obligation of approximately $3,954,000. This obligation bears interest
      at a fixed effective rate of 12.49% and
      matures in January 2009. The Company borrowed $4,000,000 from the Advisor under
      its short-term revolving credit facility in connection with this acquisition-
      see Note 4. The initial term of the master lease expires on December 31, 2022
      and includes renewal options.






**Note
      4 — Mortgage and Other Notes Payable**




As
      of
      March 31, 2008, the Company had total mortgage and other notes payable of
      $41,918,796. During the three months ended March 31, 2008, the Company incurred,
      or assumed, the following mortgage notes payable in connection with the real
      estate acquisitions described in Note 3 above:





**Property**
            
            **Encumbered
                Properties**
            
            **Loan
                Amount**
            
            **Effective
                Interest Rate**
            
            
            
            **Interest
                Rate**
            
            **Maturity****Federal
                Express Distribution Center**
            
            1Mortgage
            
            
            
            
            $
            6,965,000
            
            
            6.29
            %
            
            
            
            
            Fixed
            
            
            September
                2037**Harleysville
                National Bank Portfolio**
            
            
            15Mortgage
            
            
            
            
            
            31,000,000
            
            
            6.59
            %
            
            (1)
            
            
            Fixed
            
            
            January
                2018Mezzanine
              financing
            
            
            
            
            
            3,953,796
            
            
            12.49
            %
            
            
            
            
            Fixed
            
            
            January
                2009**Total**
            
            
            
            
            $
            41,918,796





________________________





(1)
      - The
      effective interest rate resets at the end of year five to the then current
      5-year Treasury rate plus 2.25%, but in no event will be less than 6.5%.




12




**AMERICAN
      REALTY CAPITAL TRUST, INC.**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**March
      31, 2008**


**(Unaudited)**




In
      addition, during the three months ended March 31, 2008, the OP entered into
      a
      revolving credit facility with the Advisor whereby the Advisor can lend to
      the
      OP up to $10,000,000 from time to time as needed to provide short-term financing
      relating to property acquisitions. Such borrowings need to be repaid within
      a
      six month period and will accrue interest at a commercially reasonable rate.
      In
      connection with the acquisition of the Harleysville National Bank portfolio
      outlined in Note 3, the Company borrowed $4.0 million, accruing interest at
      an
      annual rate of 8.0% and can be paid off without penalty.





The
      following table summarizes the scheduled aggregate principal repayments for
      the
      five years subsequent to March 31, 2008:





**Mortgage
                and Other Notes**
            
            **Related
                Party Revolving Credit Facility**
            
            **Total**2008
            
            $
            -
            
            $
            4,000,000
            
            $
            4,000,0002009
            
            
            3,953,796
            
            
            -
            
            
            3,953,7962010
            
            
            -
            
            
            -
            
            
            -2011
            
            
            190,662
            
            
            -
            
            
            190,6622012
            
            
            794,312
            
            
            -
            
            
            794,3122013
                and thereafter
            
            
            36,980,026
            
            
            -
            
            
            36,980,026Total
            
            $
            41,918,796
            
            $
            4,000,000
            
            $
            45,918,796





As
      of
      March 31, 2008, the Company was in compliance with the debt covenants under
      our
      loan agreements.





**Note
      5 — Commitments and Contingencies**




***Litigation***




In
      the
      ordinary course of business, the Company may become subject to litigation or
      claims. There are no material legal proceedings pending or known to be
      contemplated against us.




***Environmental
      Matters***




In
      connection with the ownership and operation of real estate, the Company may
      potentially be liable for costs and damages related to environmental matters.
      The Company has not been notified by any governmental authority of any
      non-compliance, liability or other claim, and the Company is not aware of any
      other environmental condition that it believes will have a material adverse
      effect on the consolidated results of operations.




**Note
      6 — Related-Party Transactions and Arrangements**




Certain
      affiliates of the Company receive, and will continue to receive, fees and
      compensation in connection with the sale of the Company’s common stock, and the
      acquisition, management and sale of the assets of the Company. The Dealer
      Manager receives, and will continue to receive, a selling commission of up
      to
      7.0% of gross offering proceeds before reallowance of commissions earned by
      participating broker-dealers. The Dealer Manager reallows, and intends to
      continue to reallow, 100% of commissions earned to participating broker-dealers.
      In addition, the Dealer Manager will receive up to 3.0% of the gross proceeds
      from the Offering, before reallowance to participating broker-dealers, as a
      dealer-manager fee. The Dealer Manager, in its sole discretion, may reallow
      all
      or a portion of its dealer-manager fee to such participating broker-dealers,
      based on such factors as the volume of shares sold by such participating
      broker-dealers and marketing support incurred as compared to those of other
      participating broker-dealers. No selling commissions or dealer-manager fees
      are
      paid to the Dealer Manager in respect of shares sold under the DRIP. During
      the
      three months ended March 31, 2008, the Company paid no such commissions and
      fees
      to the Dealer Manager.




All
      organization and offering expenses associated with the sale of the Company’s
      common stock (excluding selling commissions and the dealer-manager fee) are
      paid
      for by the Advisor or its affiliates and are reimbursed by the Company up to
      1.5% of gross offering proceeds. The Advisor receives an acquisition and
      advisory fee of 1.0% of the contract purchase price of each acquired property
      and will be reimbursed for acquisition costs incurred in the process of
      acquiring properties, but not to exceed 0.5% of the contract purchase price.
      In
      no event will the total of all fees and acquisition expenses payable with
      respect to a particular property or investment exceed 4.0% of the contract
      purchase price. During the three months ended March 31, 2008, the Company
      reimbursed the Advisor $119,207 and $0 for organizational and offering expenses
      and acquisition costs, respectively. The Company incurred acquisition advisory
      fees of $510,237 during the period, all of which was paid as of March 31, 2008.







13




**AMERICAN
      REALTY CAPITAL TRUST, INC.**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**March
      31, 2008**


**(Unaudited)**






The
      Advisor receives a financing coordination fee equal to 1.0% of the amount
      available under such financing. During the three months ended March 31, 2008,
      the Company incurred finance coordination fees of $379,650 payable to the
      Advisor, of which $69,650 was paid. The balance of $310,000 was recorded in
      due
      to affiliates on the accompanying balance sheet as of March 31, 2008.




The
      Company pays, and expects to continue to pay, its affiliated Property Manager
      fees for the management and leasing of the Company’s properties. Such fees equal
      2.0% of gross revenues from our single tenant properties and 4.0% of the gross
      revenues from our multi-tenant properties, plus reimbursement of the Property
      Managers’ costs of managing the properties. In the event that the Property
      Manager assists a tenant with tenant improvements, a separate fee may be charged
      to the tenant by the Property Manager at a fee not to exceed 5.0% of the cost
      of
      such tenant improvements. The Property Manager will be paid leasing commissions
      at prevailing market rates and may also receive a fee for the initial leasing
      of
      newly constructed properties, which generally would equal one month’s rent. The
      aggregate of all property management and leasing fees paid to affiliates plus
      all payments to third parties will not exceed the amount that other
      nonaffiliated management and leasing companies generally charge for similar
      services in the same geographic location. The Property Manager may subcontract
      its duties for a fee that may be less than the fee provided for in the property
      management agreement. During the three months ended March 31, 2008, the Company
      paid the Property Manager $1,001 for property management fees. In addition,
      the
      Property Manager earned an additional property management fee of
      $3,261 ,
      which
      was paid to the Property Manager in April 2008.




The
      Company pays the Advisor an annualized asset management fee of 1.0% based on
      the
      aggregate contract purchase price of all properties. The asset management fee
      is
      payable quarterly in advance on the first day of the month following the end
      of
      each calendar quarter end. During the three months ended March 31, 2008, the
      Company paid no such fees to the Advisor. The
      Advisor has elected to waive its asset management fee for the three months
      ended
      March 31, 2008.





The
      Company will pay the Advisor a fee for substantial assistance in connection
      with
      the sale of properties. This brokerage commission, paid when the sale of a
      property occurs, may not exceed the lesser of one-half of a reasonable customary
      and competitive real estate commission or 3% of the contract price of each
      property sold, inclusive of commissions paid to third-party brokers; provided,
      however, in no event may the real estate commissions paid to the Advisor, its
      affiliates or unaffiliated third-parties exceed 6% of the contract price. During
      the three months ended March 31, 2008, the Company did not pay the Advisor
      any
      brokerage commissions.





If
      the
      Advisor or its affiliates provides a substantial amount of services, as
      determined by the Company’s independent directors, in connection with the sale
      of property, the Company will pay the Advisor a brokerage commission not to
      exceed the lesser of one-half of a reasonable, customary and competitive real
      estate commission or 3.0% of the contract price for the property sold, inclusive
      of any commission paid to outside brokers. In addition, after investors have
      received a return of their net capital contributions and a 6.0% annual
      cumulative, non-compounded return, then the Advisor is entitled to receive
      15.0%
      of remaining net sale proceeds. During the three months ended March 31, 2008,
      the Company did not pay any fees or amounts to the Advisor relating to the
      sale
      of properties.




In
      the
      event the Company’s common stock is listed in the future on a national
      securities exchange, a subordinated incentive listing fee equal to 15.0% of
      the
      amount by which the market value of the Company’s outstanding stock plus all
      distributions paid by the Company prior to listing, exceeds the sum of the
      total
      amount of capital raised from investors plus an amount equal to a 6.0% annual
      cumulative, non-compounded return to investors will be paid to the Advisor.




In
      the
      event that the advisory agreement with the Advisor is terminated upon a change
      of control of the Company, by the Company without cause, or by the Advisor
      for
      good reason (as such terms may be defined in the definitive agreement
      memorializing the engagement of the Advisor by the Company), the Company shall
      pay the Advisor a termination fee not to exceed 15.0% of the amount, if any,
      by
      which the appraised value of the properties owned by the Company on the date
      of
      such termination, less amounts of all indebtedness secured by such properties
      exceeds the dollar amount equal to the sum of a 6.0% cumulative non-compound
      return on the Company's stockholders' net investment plus the amount of such
      investment.





The
      Company may reimburse the Advisor for all expenses it paid or incurred in
      connection with the services provided to the Company, subject to the limitation
      that the Company does not reimburse for any amount by which its operating
      expenses (including the asset management fee) at the end of the four preceding
      fiscal quarters exceeds the greater of (i) 2.0% of average invested assets,
      or (ii) 25% of net income other than any additions to reserves for depreciation,
      bad debts or other similar non-cash reserves and excluding any gain from the
      sale of assets for that period. The Company will not reimburse for personnel
      costs in connection with services for which the Advisor receives acquisition
      fees or real estate commissions. During the three months ended March 31, 2008,
      the Company did not reimburse the Advisor for any such costs.


14




**AMERICAN
      REALTY CAPITAL TRUST, INC.**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**March
      31, 2008**


**(Unaudited)**




At
      March
      31, 2008 and December 31, 2007, the Company had approximately $698,000 and
      $285,000, respectively, due to affiliates, which is included in due to
      affiliates in the accompanying consolidated balance sheets and is payable to
      the
      Advisor. At March 31, 2008, amounts due to affiliates consisted of amounts
      payable to the Advisor for deferred finance coordination and property management
      fees aggregating $314,000 and $384,000 relating to advances for general working
      capital purposes. In addition, at March 31, 2008, amounts due the Advisor
      included a short term bridge financing of $4,000,000 as outlined in Note
      4.




The
        Company acquired 16 properties in two separate transactions during the quarter
        ended March 31, 2008 from related parties. A Federal Express distribution
        center
        was acquired on March 5, 2008. A sale leaseback transaction involving 15
        properties 100% occupied by Harleysville National Bank occurred on March
        12,
        2008. These
        acquisitions were approved by the Company’s Board of Trustees; with two inside
        directors abstaining because the acquisition was an affiliated transaction.
        The
        Company acquired these assets at sellers’ cost, which did not exceed the fair
        market value of the properties as determined by a qualified independent
        appraiser.


**Note
      7 — Economic Dependency**




Under
      various agreements, the Company has engaged or will engage the Advisor and
      its
      affiliates to provide certain services that are essential to the Company,
      including asset management services, supervision of the management and leasing
      of properties owned by the Company, asset acquisition and disposition decisions,
      the sale of shares of the Company’s common stock available for issue, as well as
      other administrative responsibilities for the Company including accounting
      services and investor relations.




As
      a
      result of these relationships, the Company is dependent upon the Advisor and
      its
      affiliates. In the event that these companies were unable to provide the Company
      with the respective services, the Company would be required to find alternative
      providers of these services.






**Note
      8 — Independent Directors’ Stock Option Plan**




The
      Company has a stock option plan (the “Plan”), which authorizes the grant of
      nonqualified stock options to the Company’s independent directors, subject to
      the absolute discretion of the board of directors and the applicable limitations
      of the Plan. The Company intends to grant options under the Plan to each
      qualifying director annually. The exercise price for all stock options granted
      under the Plan will be fixed at $10.00 per share until the termination of our
      initial public offering, and thereafter the exercise price for stock options
      granted to our independent directors will be equal to the fair market value
      of a
      share on the last business day preceding the annual meeting of stockholders.
      As
      of March 31, 2008, the Company had granted options to purchase 9,000 shares
      at
      $10.00 per share, each with a two year vesting period. A total of 1,000,000
      shares have been authorized and reserved for issuance under the Plan. The
      Company accounts for the issuance of stock options under SFAS No. 123R,
“Share-Based Payment,” which requires the measurement and recognition of
      compensation expense for all share-based payment awards made to employees and
      directors, including stock options related to the Plan, based on estimated
      fair
      values.




During
      the three months ended March 31, 2008, 9,000 were granted and no options were
      forfeited, became vested, or were exercised. As of March 31, 2008, unvested
      options to purchase 9,000 shares at $10.00 per share remained outstanding with
      a
      weighted average contractual remaining life of approximately ten years. The
      total compensation charge relating to these option grants under SFAS No. 123R
      is
      immaterial.





**Note
      9 — Net Income (Loss) Per Share**





The
      following is a reconciliation of the numerator and denominator of the basic
      and
      diluted net income (loss) per share computation for the three months ended
      March
      31, 2008:




Basic
                and DilutedThree
                Months EndedMarch
                31, 2008Net
                loss
            
            $
            (341,850
            )Total
                weighted average common shares outstanding
            
            
            134,013Loss
                per share
            
            $
            (2.55
            )







15




**AMERICAN
      REALTY CAPITAL TRUST, INC.**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**March
      31, 2008**


**(Unaudited)**




**Note
      10 — Subsequent Events**




***Sale
      of Shares of Common Stock***




As
      of May
      14 ,
      2008,
      the Company had raised approximately $5,400,000 million
      of gross proceeds through the issuance of approximately 776,000 shares
      of
      its common stock under the Offering (including shares sold under the DRIP).
      As
      of May 14 ,
      2008,
      approximately $1,492 million
      (149 million
      shares) remained available for sale to the public under the Initial Offering,
      exclusive of shares available under the DRIP.





***Real
      Estate Acquisitions***




The
                Company acquired the following properties subsequent to March 31,
                2008:




**Property**
            **Acquisition
                Date**
            **No.
                Of Buildings**
            **Square
                Feet**
            **Purchase
                Price (1)**Rockland
                Trust Company portfolio
            May
                2008
            18
            121,057
            32,960,000




(1)
            Includes
                all acquisition costs, the value of acquired intangible lease assets
                and
                assumed liabilities.





On
      May 2,
      2008, the Company acquired an 18 building portfolio for a total purchase price
      of approximately $33.0 million, inclusive of closing costs and an acquisition
      fee, from Independent Bank Corp., which operates as the holding company for
      Rockland Trust Company and provides commercial banking, retail banking, and
      investment management services in Massachusetts. The properties consist of
      both
      operation centers and bank branches leased on a triple-net basis, with an
      aggregate weighted average lease term of 13.2 years, exclusive of certain lease
      extension provisions.





***Mortgage
      Notes Payable and other obligations***




Subsequent
      to March 31, 2008, the Company incurred or assumed the following mortgage notes
      payable in connection with the real estate acquisitions described
      above:





**Mortgage
                Debt**
            
            **Type**
            
            **Rate**
            
            **Maturity
                Date**$
                24,412,500
            
            Variable
            
            30
                Day LIBOR + 1.375% (1)
            
            May
                2013








(1)
            The
                Company entered into a rate lock agreement to limit its interest
                rate
                exposure. The LIBOR floor and cap are 3.54% and 4.125% (initial year),
                respectively.





In
      addition to the mortgage noted in the above table, the Company secured
      a mezzanine loan in the amount of $3,955,000. This obligation bears
      interest at an effective rate of 14.1%and
      matures in April 2009. This preferred equity investment is convertible into
      Operating Partnership units, valued at $9.00 per unit, on or before March 31,
      2009, pursuant to a limited liability company agreement entered into between
      the
      OP and the unaffiliated third-party investor. Such Operating Partnership units
      are convertible into shares of stock in the REIT at the holders election. The
      Company borrowed $2,500,000 from the Advisor under its short-term revolving
      credit facility in connection with this acquisition - see Note 4. The initial
      term of the lease is 10 years for 7 properties and 15 years for 11 properties.
      Each location has four concurrent renewal options, each for a five-year term
      at
      the then prevailing market rate.




16






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




The
      following discussion and analysis should be read in conjunction with the
      accompanying financial statements of American Realty Capital Trust, Inc. and
      the
      notes thereto. As used herein, the terms “we,” “our” and “us” refer to American
      Realty Capital Trust, Inc., a Maryland corporation, and, as required by context,
      American Realty Capital Operating Partnership, L.P., a Delaware limited
      partnership, which we refer to as the “Operating Partnership” and to their
      subsidiaries. American Realty Capital Trust, Inc. is externally managed by
      the
      American Realty Capital Advisors, LLC (a Delaware limited liability company)
      or
      the “Advisor.”




**Forward-Looking
      Statements**




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




Following
      are some of the risks and uncertainties, although not all risks and
      uncertainties, that could cause our actual results to differ materially from
      those presented in our forward-looking statements:




•
            
            Neither
                we nor our Advisor have a prior operating history and our Advisor
                does not
                have any experience operating a public company. This inexperience
                makes
                our future performance difficult to predict.




•
            
            All
                of our executive officers are also officers, managers and/or holders
                of a
                direct or indirect controlling interest in our Advisor, our dealer
                manager
                and other affiliated entities. As a result, our executive officers,
                our
                Advisor and its affiliates face conflicts of interest, including
                significant conflicts created by our Advisor’s compensation arrangements
                with us and other investors advised by American Realty Capital affiliates
                and conflicts in allocating time among us and these other investors.
                These
                conflicts could result in unanticipated actions.




•
            
            Because
                investment opportunities that are suitable for us may also be suitable
                for
                other American Realty Capital-advised investors, our Advisor and
                its
                affiliates face conflicts of interest relating to the purchase of
                properties and such conflicts may not be resolved in our favor, meaning
                that we could invest in less attractive properties, which could reduce
                the
                investment return to our stockholders.




•
            
            If
                we raise substantially less than the maximum offering in our ongoing
                initial public offering, we may not be able to invest in a diverse
                portfolio of real estate assets and the value of an investment in
                us may
                vary more widely with the performance of specific assets.




•
            
            While
                we are raising capital and investing the proceeds of our ongoing
initial
                public offering, the high demand for the type of properties we desire
                to
                acquire may cause our distributions and the long-term returns of
                our
                investors to be lower than they otherwise would.




•
            
            We
                depend on tenants for our revenue, and, accordingly, our revenue
                is
                dependent upon the success and economic viability of our tenants.




•
            
            Increases
                in interest rates could increase the amount of our debt payments
                and limit
                our ability to pay distributions to our stockholders.




All
      forward-looking statements should be read in light of the risks identified
      in
      our Registration Statement on Form S-11 for the period from August 17, 2007
      (dated of inception) to December 31, 2007, filed with the SEC and the risks
      identified in this quarterly report.





**Overview**




We
      are a
      Maryland corporation that will elect to be taxed as a real estate investment
      trust, or REIT, beginning with the taxable year ending December 31, 2008.
      On September 10, 2007, we filed a registration statement on Form S-11 with
      the
      SEC to offer a minimum of 750,000 shares and a maximum of 150,000,000 shares
      of
      common stock for sale to the public. The SEC declared the registration statement
      effective on January 25, 2008, at which time we launched our ongoing initial
      public offering. On March 11, 2008, we broke escrow in our ongoing initial
      public offering and then commenced our real estate operations. As of March
      31,
      2008, we had issued 623,279 shares of common stock in our ongoing public
      offering for gross offering proceeds of approximately $4,018,000
      excluding 179,026 shares of common stock issued in connection with the
      acquisition of a property. As of March 31, 2008, we had not redeemed any shares
      sold in our ongoing initial public offering pursuant to our share repurchase
      program. We are dependent upon the net proceeds from the offering to conduct
      our
      proposed operations.


17






We
      intend
      to use the proceeds of our ongoing initial public offering to acquire and manage
      a diverse portfolio of real estate properties consisting primarily of
      freestanding, single-tenant properties net leased to investment grade and other
      creditworthy tenants throughout the United States and Puerto Rico as well as
      certain other real-estate related investments. We plan to own substantially
      all
      of our assets and conduct our operations through our Operating Partnership,
      of
      which we are the sole general partner. We have no paid employees. Our advisor,
      American Realty Capital Advisors, LLC, conducts our operations and manages
      our
      portfolio of real estate investments.




As
      of
      March 31, 2008, we owned 16 properties compromising approximately 233,000 square
      feet, 100% leased with an initial weighted average remaining lease term of
      14.0
      years. In constructing our portfolio, we intend to target and derive
      approximately 50% to 60% of our revenues from investment-grade tenants.
      Additionally, we intend to target approximately 50% of our revenues from
      financial institutions.




We
      intend
      to continue our strategy of acquiring high quality, single tenant properties
      through sale leaseback transactions and marketed transactions with in-place
      long-term leases, and to finance our acquisitions with a combination of equity
      and debt. We expect to arrange long-term financing on both a secured and
      unsecured fixed rate basis. We intend to continue to grow our existing
      relationships and develop new relationships throughout various markets we serve,
      which we expect will lead to further acquisition opportunities.




Real
      estate-related investments are higher-yield and higher-risk investments that
      our
      advisor will actively manage. The real estate-related investments in which
      we
      may invest include: (i) mortgage loans; (ii) equity securities such as
      common stocks, preferred stocks and convertible preferred securities of real
      estate companies; (iii) debt securities such as mortgage-backed securities,
      commercial mortgages, mortgage loan participations and debt securities issued
      by
      other real estate companies; and (iv) certain types of illiquid securities,
      such as mezzanine loans and bridge loans. While we may invest in any of these
      real estate-related investments, we expect that the majority of these
      investments will consist of mezzanine loans and B-note obligations.




**Significant
      Accounting Estimates and Critical Accounting Policies**




Set
      forth
      below is a summary of the significant accounting estimates and critical
      accounting policies that management believes are important to the preparation
      of
      our consolidated financial statements. Certain of our accounting estimates
      are
      particularly important for  an
      understanding of our financial position and results of operations and require
      the application of significant judgment by our management. As a result, these
      estimates are subject to a degree of uncertainty. These significant accounting
      estimates include:




***Revenue
      Recognition***




Our
      revenues, which are derived primarily from rental income, include rents that
      each tenant pays in accordance with the terms of each lease reported on a
      straightline basis over the initial term of the lease. Since many of our leases
      provide for rental increases at specified intervals, straightline basis
      accounting requires us to record a receivable, and include in revenues, unbilled
      rent receivables that we will only receive if the tenant makes all rent payments
      required through the expiration of the initial term of the lease.




We
      continually review receivables related to rent and unbilled rent receivables
      and
      determine collectibility by taking into consideration the tenant’s payment
      history, the financial condition of the tenant, business conditions in the
      industry in which the tenant operates and economic conditions in the area in
      which the property is located. In the event that the collectibility of a
      receivable is in doubt, we record an increase in our allowance for uncollectible
      accounts or record a direct write-off of the receivable in our consolidated
      statements of operations.




***Investments
      in Real Estate***




Investments
      in real estate are recorded at cost. Improvements and replacements are
      capitalized when they extend the useful life of the asset. Costs of repairs
      and
      maintenance are expensed as incurred. Depreciation is computed using the
      straightline method over the estimated useful life of up to 40 years for
      buildings and improvements, five to ten years for fixtures and improvements
      and
      the shorter of the useful life or the remaining lease term for tenant
      improvements and leasehold interests.




We
      are
      required to make subjective assessments as to the useful lives of our properties
      for purposes of determining the amount of depreciation to record on an annual
      basis with respect to our investments in real estate. These assessments have
      a
      direct impact on our net income because if we were to shorten the expected
      useful lives of our investments in real estate, we would depreciate these
      investments over fewer years, resulting in more depreciation expense and lower
      net income on an annual basis.




We
      follow
      Statement of Financial Accounting Standards (SFAS) No.144, “Accounting for
      the Impairment or Disposal of Long-Lived Assets,” which established a single
      accounting model for the impairment or disposal of long-lived assets including
      discontinued operations. SFAS No.144 requires that the operations related to
      properties that have been sold or properties that are intended to be sold be
      presented as discontinued operations in the statement of operations for all
      periods presented, and properties intended to be sold to be designated as “held
      for sale” on the balance sheet.




Long-lived
      assets are carried at cost and evaluated for impairment when events or changes
      in circumstances indicate such an evaluation is warranted or when they are
      designated as held for sale. Valuation of real estate is considered a “critical
      accounting estimate” because the evaluation of impairment and the determination
      of fair values involve a number of management assumptions relating to future
      economic events that could materially affect the determination of the ultimate
      value, and therefore, the carrying amounts of our real estate. Additionally,
      decisions regarding when a property should be classified as held for sale are
      also highly subjective and require significant management judgment.





18






Events
      or
      changes in circumstances that could cause an evaluation for impairment include
      the following:





**•**
            
            a
                significant decrease in the market price of a long-lived
                asset;**•**
            
            a
                significant adverse change in the extent or manner in which a long-lived
                asset is being used or in its physical condition;**•**
            
            a
                significant adverse change in legal factors or in the business climate
                that could affect the value of a long-lived asset, including an adverse
                action or assessment by a regulator;**•**
            
            an
                accumulation of costs significantly in excess of the amount originally
                expected for the acquisition or construction of a long-lived asset;
                and**•**
            
            a
                current-period operating or cash flow loss combined with a history
                of
                operating or cash flow losses or a projection or forecast that
                demonstrates continuing losses associated with the use of a long-lived
                asset.




We
      review
      our portfolio on an on-going basis to evaluate the existence of any of the
      aforementioned events or changes in circumstances that would require us to
      test
      for recoverability. In general, our review of recoverability is based on an
      estimate of the future undiscounted cash flows, excluding interest charges,
      expected to result from the property’s use and eventual disposition. These
      estimates consider factors such as expected future operating income, market
      and
      other applicable trends and residual value expected, as well as the effects
      of
      leasing demand, competition and other factors. If impairment exists due to
      the
      inability to recover the carrying value of a property, an impairment loss is
      recorded to the extent that the carrying value exceeds the estimated fair value
      of the property. We are required to make subjective assessments as to whether
      there are impairments in the values of our investments in real estate. These
      assessments have a direct impact on our net income because recording an
      impairment loss results in an immediate negative adjustment to net
      income.




***Purchase
      Price Allocation***




Pursuant
      to SFAS No.141, “Business Combinations,” we follow the purchase method of
      accounting for all business combinations. To ensure that intangible assets
      acquired and liabilities assumed in a purchase method business combination
      can
      be recognized and reported apart from goodwill, we ensure that the applicable
      criteria specified in SFAS No.141 are met.




We
      allocate the purchase price of acquired properties to tangible and identifiable
      intangible assets acquired based on their respective fair values. Tangible
      assets include land, buildings, equipment and tenant improvements on an as-if
      vacant basis. We utilize various estimates, processes and information to
      determine the as-if vacant property value. Estimates of value are made using
      customary methods, including data from appraisals, comparable sales, discounted
      cash flow analysis and other methods. Identifiable intangible assets include
      amounts allocated to acquired leases for above- and below-market lease rates,
      the value of in-place leases, and the value of customer
      relationships.




Amounts
      allocated to land, buildings, equipment and fixtures are based on cost
      segregation studies performed by independent third-parties or on our analysis
      of
      comparable properties in our portfolio. Depreciation is computed using the
      straightline method over the estimated life of 40 years for buildings, five
      to
      ten years for building equipment and fixtures, and the lesser of the useful
      life
      or the remaining lease term for tenant improvements.




Above-market
      and below-market in-place lease values for owned properties are recorded based
      on the present value (using an interest rate which reflects the risks associated
      with the leases acquired) of the difference between the contractual amounts
      to
      be paid pursuant to the in-place leases and management’s estimate of fair market
      lease rates for the corresponding in-place leases, measured over a period equal
      to the remaining non-cancelable term of the lease. The capitalized above-market
      lease values are amortized as a reduction of rental income over the remaining
      non-cancelable terms of the respective leases. The capitalized below-market
      lease values are amortized as an increase to rental income over the initial
      term
      and any fixed-rate renewal periods in the respective leases. The aggregate
      value
      of intangible assets related to in-place leases is primarily the difference
      between the property valued with existing in-place leases adjusted to market
      rental rates and the property valued as if vacant. Factors considered by us
      in
      our analysis of the in-place lease intangibles include an estimate of carrying
      costs during the expected lease-up period for each property, taking into account
      current market conditions and costs to execute similar leases. In estimating
      carrying costs, we include real estate taxes, insurance and other operating
      expenses and estimates of lost rentals at market rates during the expected
      lease-up period, which typically ranges from six to 18 months. We also
      estimate costs to execute similar leases including leasing commissions, legal
      and other related expenses.




The
      aggregate value of intangibles assets related to customer relationship is
      measured based on our evaluation of the specific characteristics of each
      tenant’s lease and our overall relationship with the tenant. Characteristics
      considered by us in determining these values include the nature and extent
      of
      our existing business relationships with the tenant, growth prospects for
      developing new business with the tenant, the tenant’s credit quality and
      expectations of lease renewals, among other factors.




The
      value
      of in-place leases is amortized to expense over the initial term of the
      respective leases, which range primarily from two to 20 years. The value of
      customer relationship intangibles is amortized to expense over the initial
      term
      and any renewal periods in the respective leases, but in no event does the
      amortization period for intangible assets exceed the remaining depreciable
      life
      of the building. If a tenant terminates its lease, the unamortized portion
      of
      the in-place lease value and customer relationship intangibles is charged to
      expense.


19





In
      making
      estimates of fair values for purposes of allocating purchase price, we utilize
      a
      number of sources, including independent appraisals that may be obtained in
      connection with the acquisition or financing of the respective property and
      other market data. We also consider information obtained about each property
      as
      a result of our pre-acquisition due diligence, as well as subsequent marketing
      and leasing activities, in estimating the fair value of the tangible and
      intangible assets acquired and intangible liabilities assumed. The allocations
      presented in the accompanying consolidated balance sheets are substantially
      complete; however, there are certain items that we will finalize once we receive
      additional information. Accordingly, these allocations are subject to revision
      when final information is available, although we do not expect future revisions
      to have a significant impact on our financial position or results of
      operations.




**Results
      of Operations**




*Three
      Months Ended March 31,
      2008*




We
      acquired 16 properties in two separate transactions during the quarter ended
      March 31, 2008. A Federal Express distribution center was acquired on March
      5,
      2008. A sale leaseback transaction involving 15 properties 100% occupied by
      Harleysville National Bank occurred on March 12, 2008. The property operating
      results outlined below relate to the partial period we owned these investment
      assets during the period.





*Rental
      Income*





Rental
      income of approximately $214,000 was recognized during the three months ended
      March 31, 2008. This rental income includes a partial month of revenue derived
      from the properties we acquired in March 2008.





*Property
      Management Fees to Affiliate*





Property
      management fees to affiliate of approximately $4,000 were incurred during the
      three months ended March 31, 2008. Such fees represent amounts paid to our
      affiliated property manager, American Realty Capital Properties, LLC, to manage
      and lease our properties.





*General
      and Administrative Expenses*





General
      and administrative expenses of approximately $189,000 were incurred during
      the
      three months ended March 31, 2008. The majority of such expenses included
      $119,000 reimbursed to the Advisor relating to various organizational costs,
      $31,000 of insurance expense amortization of our
      directors and officers’ insurance policy, $20,000 of board member compensation
      and $11,000 of professional fees.





*Depreciation
      and Amortization Expense*





Depreciation
      and amortization expense of approximately $171,000 was recognized during the
      three months ended March 31, 2008. This expense includes a partial month of
      depreciation and amortization incurred from the properties we acquired in March
      2008.





*Interest
      Expense*





Interest
      expense of approximately $192,000 was recognized during the three months ended
      March 21, 2008. Such amount includes a partial month of interest expense
      relating to the debt incurred to fund a portion of the properties we acquired
      in
      March 2008.





Our
      property acquisitions during the three months ended March 31, 2008 were financed
      in part with short-term and long-term notes payable as discussed in Note 4
      to
      our consolidated financial statements. Our interest expense in future periods
      will vary based on our level of future borrowings, which will depend on the
      level of proceeds raised in the Offering, the cost of borrowings, and the
      opportunity to acquire real estate assets which meet our investment
      objectives.




20




**Cash
      Flows for the Three Months Ended March 31, 2008**





During
      the three months ended March 31, 2008, net cash used in operating activities
      was
      approximately $45,000. The level of cash flows provided by (used in) operating
      activities is affected by both the timing of interest payments and amount of
      borrowings outstanding during the period. It is also affected by the receipt
      of
      scheduled rent payments and disbursement of deposits required in connection
      with
      property acquisitions. Prepaid expenses and other assets increased by
      approximately $1,024,000 principally resulting from payments for a $500,000
      deposit on an acquisition that closed in May 2008 (Rockland Trust Company
      portfolio), $420,000 of finance coordination fees incurred during the period,
      net of amortization, as well as payments relating to annual Board of Trustee
      retainers and the partial funding of our Directors and Officers’ insurance
      policy. This amount is offset by the increase in accounts payable and accrued
      expenses of approximately $837,000, the majority of which relates to
      professional fees, accrued interest and finance coordination fees, as well
      as an
      increase in deferred rent and liabilities of approximately $309,000, primarily
      representing rent payments received in advance of the respective due date.





Net
      cash
      used in investing activities during the three months ended March 31, 2008
      totaled approximately $2,544,000 relating to investment properties acquired
      during the period.





Net
      cash
      provided by financing activities totaled approximately $3,118,000 during the
      three months ended March 31, 2008. Such amount consisted of approximately
      $3,818,000 of proceeds received from the issuance of 424,253 shares of common
      stock, reduced by approximately $700,000 of related offering costs.




**Liquidity
      and Capital Resources**




We
      expect
      to continue to raise capital through the sale of our common stock and to utilize
      the net proceeds from the sale of our common stock and proceeds from secured
      financings to complete future property acquisitions. As of March 31, 2008,
      we
      had received and accepted subscriptions for 623,279 shares of common stock
      in
      our Offering for net proceeds of approximately $4.0 million.




The
      amount of distributions payable to our stockholders is determined by our board
      of directors and is dependent on a number of factors, including funds available
      for distribution, financial condition, capital expenditure requirements, as
      applicable, and annual distribution requirements needed to qualify and maintain
      our status as a REIT under the Code. Operating cash flows are expected to
      increase as additional properties are acquired in our investment
      portfolio.




Our
      principal demands for funds will continue to be for property acquisitions,
      either directly or through investment interests, for the payment of operating
      expenses and distributions, and for the payment of interest on our outstanding
      indebtedness and other investments. Generally, cash needs for items other than
      property acquisitions are expected to be met from operations, and cash needs
      for
      property acquisitions are expected to be met from the public offering of our
      shares. However, there may be a delay between the sale of our shares and our
      purchase of properties, which could result in a delay in the benefits to our
      stockholders, if any, of returns generated from our operations. Our Advisor
      evaluates potential acquisitions of real estate and real estate related assets
      and engages in negotiations with sellers and borrowers on our behalf. Investors
      should be aware that after a purchase contract is executed that contains
      specific terms, the property will not be purchased until the successful
      completion of due diligence and negotiation of final binding agreements. During
      this period, we may decide to temporarily invest any unused proceeds from the
      Offering in certain investments that could yield lower returns than the
      properties. These lower returns may affect our ability to make
      distributions.




We
      expect
      to meet our future short-term operating liquidity requirements through net
      cash
      provided by our current property operations and the operations of properties
      to
      be acquired in the future. Management also expects that our properties will
      generate sufficient cash flow to cover operating expenses and the payment of
      a
      monthly distribution. Other potential future sources of capital include proceeds
      from secured or unsecured financings from banks or other lenders, proceeds
      from
      the sale of properties and undistributed funds from operations.




On
      February 25, 2008, the Board of Directors declared a dividend for each monthly
      period commencing 30 days subsequent to acquiring our initial portfolio of
      real
      estate investments, payable in cash on the 21st day following each month end
      to
      stockholders of record at the close of business each day during the applicable
      period. The dividend will be calculated based on stockholders of record each
      day
      during the applicable period at a rate of $0.00178082191 per day, and will
      equal
      a daily amount that, if paid each day for a 365-day period, would equal a 6.5%
      annualized rate based on the share price of $10.00.





The
      payment terms of our loan obligations vary. In general, interest only is payable
      monthly with all unpaid principal and interest due at maturity. Certain of
      our
      mortgage loans require principal repayment in subsequent years. Our loan
      agreements stipulate that we comply with specific reporting and financial
      covenants. As of March 31, 2008, we were in compliance with the debt covenants
      under our loan agreements.





21






As
      of
      March 31, 2008, we had cash and cash equivalents of approximately $530,000,
      which we expect to be used primarily to invest in additional real estate, pay
      operating expenses and pay stockholder distributions.





**Contractual
      Obligations**




The
      following is a summary of our contractual obligations as of March 31, 2008:




**Payments
                Due During the Years Ending December 31****Contractual
                Obligations**
            
            **Total**
            
            **Remainder of 2008**
            
            **2009-2010**
            
            **2011-2012**
            
            **Thereafter**Outstanding
                debt obligations(1)
            
            $
            41,918,796
            
            $
            —
            
            $
            3,953,796
            
            $
            984,974
            
            $
            36,980,026Related
                party revolving credit facility
            
            
            4,000,000
            
            
            4,000,000
            
            
            —
            
            
            —
            
            
            —Purchase
                obligations
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            —$
            45,918,796
            
            $
            4,000,000
            
            $
            3,953,796
            
            $
            984,974
            
            $
            36,980,026





(1)
            Amounts
                include principal payments only. We incurred interest expense of
                approximately $189,000 excluding amortization of deferred financing
                costs,
                during the three months ended March 31, 2008, and expect to incur
                interest
                in future periods on outstanding debt
                obligations.





**Election
      as a REIT**




We
      will
      elect to be taxed as a REIT under Sections 856 through 860 of the Internal
      Revenue Code commencing with our taxable year ending December 31, 2008. If
      we qualify for taxation as a REIT, we generally will not be subject to federal
      corporate income tax to the extent we distribute our REIT taxable income to
      our
      stockholders, and so long as we distribute at least 90% of our REIT taxable
      income. REITs are subject to a number of other organizational and operational
      requirements. Even if we qualify for taxation as a REIT, we may be subject
      to
      certain state and local taxes on our income and property, and federal income
      and
      excise taxes on our undistributed income. We believe we are organized and
      operating in such a manner as to qualify to be taxed as a REIT for the taxable
      year ending December 31, 2009.




**Inflation**





Some
      of
      our leases contain provisions designed to mitigate the adverse impact of
      inflation. These provisions generally increase rental rates during the terms
      of
      the leases either at fixed rates or indexed escalations (based on the Consumer
      Price Index or other measures). We may be adversely impacted by inflation on
      the
      leases that do not contain indexed escalation provisions. In addition, our
      net
      leases require the tenant to pay its allocable share of operating expenses,
      including common area maintenance costs, real estate taxes and insurance. This
      may reduce our exposure to increases in costs and operating expenses resulting
      from inflation.




**Related-Party
      Transactions and Agreements**




We
      have
      entered into agreements with American Realty Capital II, LLC and its
      wholly-owned affiliates, whereby we pay certain fees or reimbursements to our
      Advisor or its affiliates for acquisition fees and expenses, organization and
      offering costs, sales commissions, dealer manager fees, asset and property
      management fees and reimbursement of operating costs. See Note 6 to our
      consolidated financial statements included in this report for a discussion
      of
      the various related-party transactions, agreements and fees.








**Off-Balance
      Sheet Arrangements**




We
      have
      no off-balance sheet arrangements that are reasonably likely to have a current
      or future effect on our financial condition, changes in financial condition,
      revenues or expenses, results of operations, liquidity, capital expenditures
      or
      capital resources.


22






**Item
      3. Quantitative and Qualitative Disclosures About Market
      Risk**




We
      are
      exposed to interest rate changes primarily as a result of long-term debt used
      to
      acquire properties.  Our interest rate risk management objectives are to
      limit the impact of interest rate changes on earnings and cash flows and to
      lower overall borrowing costs. To achieve these objectives, we may borrow at
      fixed rates or variable rates with the lowest margins available and in some
      cases, the ability to convert variable rates to fixed rates. With regard to
      variable rate financing, we will assess interest rate cash flow risk by
      continually identifying and monitoring changes in interest rate exposures that
      may adversely impact expected future cash flows and by evaluating hedging
      opportunities.  At March 31, 2008, all of our borrowings were at fixed
      interest rates.




We
      do not
      have any foreign operations and thus we are not exposed to foreign currency
      fluctuations.




23





**PART
      II**


**OTHER
      INFORMATION**





**Item
      1. Legal Proceedings**


We
        are
        not a party to, and none of our properties are subject to, any material pending
        legal proceedings.




**Item
      1A. Risk Factors**




There
      have been no material changes from the risk factors set forth in our Annual
      Report on Form S-11 for period from August 17, 2007 (date of inception)
      to March 31, 2008.





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




**Share
      Redemption Program**




Our
      board
      of directors has adopted a share repurchase program that enables our
      stockholders to sell their shares to us in limited circumstances. In order
      to
      provide stockholders with the benefit of interim liquidity, stockholders who
      have held their shares for at least one year and who purchased their shares
      from
      us or received the shares through a non-cash transaction, not in the secondary
      market, may present all or a portion of the holder’s shares to us for
      repurchase. At that time, we may, subject to the conditions and limitations,
      redeem the shares presented for repurchase for cash to the extent that we have
      sufficient funds available to us to fund such repurchase. Upon the death or
      disability of a stockholder, upon request, we will waive the one-year holding
      requirement. Shares repurchased in connection with the death or disability
      of a
      stockholder will be repurchased at a purchase price equal to the price actually
      paid for the shares during the offering, or if not engaged in the offering,
      the
      current net asset value of the shares if higher. During any calendar year,
      the
      number of shares we will repurchase will be limited to the proceeds in the
      distribution reinvestment plan; provided, however, that shares subject to a
      repurchase requested upon the death or disability of a stockholder will not
      be
      subject to this cap. The cash available for repurchase of our shares will be
      limited to the proceeds from the sale of shares pursuant to our distribution
      reinvestment plan legally available for the repurchase of our
      stock.





No
      shares
      were redeemed under this program during the quarter ended March 31, 2008.





**Item
      3. Defaults Upon Senior Securities**




None





**Item
      4. Submission of Matters to a Vote of Security Holders**




None





**Item**  **5.
      Other Information**




None





**Item**  **6.
      Exhibits**




The
      exhibits listed on the Exhibit Index (following the signatures section of
      this report) are included, or incorporated by reference, in this quarterly
      report.


24


**SIGNATURES**




Pursuant
      to the requirements of the Securities Exchange Act of 1934, as amended, the
      registrant has duly caused this report to be signed on its behalf by the
      undersigned thereunto duly authorized.




American
                Realty Capital Trust, Inc.
              *(Registrant)*By:
            
            /s/
                Nicholas S. SchorschNicholas
                S. Schorsch*Chief
                Executive Officer and President*By:
            
            /s/
                Brian S. BlockBrian
                S. Block*Senior
                Vice President and Chief Financial Officer*




Date:
      May
      14, 2008







25




**EXHIBIT
      INDEX**




The
      following exhibits are included, or incorporated by reference, in this Quarterly
      Report on Form 10-Q for the quarter ended March 31, 2008 (and are numbered
      in
      accordance with Item 601 of Regulation S-K).




**Exhibit
                No.**
            **Description**10.1
            Agreement
                of Assignment of Partnership Interests between American Realty Capital
                Operating Partnership, L.P. and American Realty Capital LLC, William
                M.
                Kahane, Nicholas S. Schorsch, Lou Davis and Peter and Maria Wirth
                dated
                March 5, 2008. — Federal Express Distribution Center10.2
            Agreement
                of Assignment of Partnership Interests between American Realty Capital
                Operating Partnership, L.P. and Nicholas S. Schorsch dated March
                12, 2008.
                — Harleysville National Bank Portfolio31.1
            Certification
              of the Principal 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 Principal 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
            Written
              statements of the Principal Executive Officer and Principal Financial
              Officer of the Company pursuant to 18 U.S.C. Section 1350, as adopted
              pursuant to Section 906 of the Sarbanes-Oxley Act of
              2002.




26