##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2010
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission file number 000-53960
 COLE CREDIT PROPERTY TRUST III, INC.
 (Exact name of registrant as specified in its charter)
 Maryland(State or other jurisdiction of 
incorporation or organization)
    
    26-1846406(I.R.S. Employer
Identification Number)2555 East Camelback Road, Suite 400
Phoenix, Arizona, 85016(Address of principal executive offices; zip code)
    
    (602) 778-8700(Registrants telephone number, including area code)
 Not Applicable  (Former name, former address and former fiscal year, if changed since last report)
  þ o
  o o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer þ(Do not check if a smaller reporting company)
    
    Smaller reporting company o
  o þ




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##### 



COLE CREDIT PROPERTY TRUST III, INC.
INDEX
 PART I  FINANCIAL INFORMATIONItem 1. Financial StatementsCondensed Consolidated Unaudited Balance Sheets as of March 31, 2010 and December 31, 2009
    
    
    4Condensed Consolidated Unaudited Statements of Operations for the three months ended
March 31, 2010 and 2009
    
    
    5Condensed Consolidated Unaudited Statement of Stockholders Equity for the three months
ended March 31, 2010
    
    
    6Condensed Consolidated Unaudited Statements of Cash Flows for the three months ended
March 31, 2010 and 2009
    
    
    7Notes to Condensed Consolidated Unaudited Financial Statements
    
    
    8Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    18Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    26Item 4T. Controls and Procedures
    
    
    26PART II  OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    27Item 1A. Risk Factors
    
    
    27Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    27Item 3. Defaults Upon Senior Securities
    
    
    27Item 4. Removed and Reserved
    
    
    27Item 5. Other Information
    
    
    28Item 6. Exhibits
    
    
    28Signatures
    
    
    29Exhibit 31.1Exhibit 31.2Exhibit 32.1
   2




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PART I
 FINANCIAL INFORMATION
    3




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##### Table of Contents



COLE CREDIT PROPERTY TRUST III, INC.
 
 CONDENSED CONSOLIDATED UNAUDITED BALANCE SHEETS
  March 31,
    
    
    December 31,2010
    
    
    2009ASSETSInvestment in real estate assets:Land
    
    $
    289,587
    
    
    $
    231,686Buildings and improvements, less accumulated
depreciation of $6,087 and $3,178, respectively
    
    
    531,564
    
    
    
    361,561Acquired intangible lease assets, less accumulated
amortization of $4,928 and $2,648, respectively
    
    
    157,774
    
    
    
    125,121Total investment in real estate assets, net
    
    
    978,925
    
    
    
    718,368Cash and cash equivalents
    
    
    349,092
    
    
    
    278,717Restricted cash
    
    
    1,906
    
    
    
    1,191Rents and tenant receivables, less allowance for
doubtful accounts of $11 and $0, respectively
    
    
    4,834
    
    
    
    2,918Mortgage loan deposits, derivative and other assets
    
    
    1,023
    
    
    
    1,068Deferred financing costs, less accumulated
amortization of $558 and $201, respectively
    
    
    6,485
    
    
    
    3,633Total assets
    
    $
    1,342,265
    
    
    $
    1,005,895LIABILITIES AND STOCKHOLDERS EQUITYNotes payable
    
    $
    163,514
    
    
    $
    129,302Accounts payable and accrued expenses
    
    
    4,011
    
    
    
    3,094Escrowed investor proceeds
    
    
    1,837
    
    
    
    1,121Due to affiliates
    
    
    739
    
    
    
    743Acquired below market lease intangibles, less
accumulated amortization of $738 and $399,
respectively
    
    
    25,574
    
    
    
    20,032Distributions payable
    
    
    7,216
    
    
    
    5,313Deferred rent, derivative and other liabilities
    
    
    4,813
    
    
    
    2,445Total liabilities
    
    
    207,704
    
    
    
    162,050Redeemable common stock
    
    
    21,648
    
    
    
    12,382STOCKHOLDERS EQUITY:Preferred stock, $0.01 par value; 10,000,000
shares authorized, none issued and outstanding
    
    
    
    
    
    
    Common stock, $0.01 par value; 490,000,000 shares
authorized, 132,411,236 and 98,002,392 shares
issued and outstanding, respectively
    
    
    1,324
    
    
    
    980Capital in excess of par value
    
    
    1,166,255
    
    
    
    865,617Accumulated distributions in excess of earnings
    
    
    (54,197
    )
    
    
    (34,999
    )Accumulated other comprehensive loss
    
    
    (469
    )
    
    
    (135
    )Total stockholders equity
    
    
    1,112,913
    
    
    
    831,463Total liabilities and stockholders equity
    
    $
    1,342,265
    
    
    $
    1,005,895
   4




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COLE CREDIT PROPERTY TRUST III, INC.
 
 CONDENSED CONSOLIDATED UNAUDITED STATEMENTS OF OPERATIONS
  Three Months Ended March 31,2010
    
    
    2009Revenues:Rental and other property income
    
    $
    17,191
    
    
    $
    824Tenant reimbursement income
    
    
    1,016
    
    
    
    2Total revenue
    
    
    18,207
    
    
    
    826Expenses:General and administrative expenses
    
    
    1,513
    
    
    
    154Property operating expenses
    
    
    1,134
    
    
    
    9Property and asset management expenses
    
    
    1,678
    
    
    
    74Acquisition related expenses
    
    
    6,845
    
    
    
    2,345Depreciation
    
    
    2,909
    
    
    
    165Amortization
    
    
    1,939
    
    
    
    94Total operating expenses
    
    
    16,018
    
    
    
    2,841Operating income (loss)
    
    
    2,189
    
    
    
    (2,015
    )Other income (expense):Interest and other income
    
    
    340
    
    
    
    20Interest expense
    
    
    (2,689
    )
    
    
    (184
    )Total other expense
    
    
    (2,349
    )
    
    
    (164
    )Net loss
    
    $
    (160
    )
    
    $
    (2,179
    )Weighted average number of common
shares outstanding:Basic and diluted
    
    
    114,222,272
    
    
    
    5,043,018Net loss per common share:Basic and diluted
    
    $
    (0.00
    )
    
    $
    (0.43
    )
   5




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COLE CREDIT PROPERTY TRUST III, INC.
 
 CONDENSED CONSOLIDATED UNAUDITED STATEMENT OF STOCKHOLDERS EQUITY
  Accumulated
    
    
    AccumulatedCommon Stock
    
    
    Capital in
    
    
    Distributions
    
    
    Other
    
    
    TotalNumber of
    
    
    
    
    
    
    Excess
    
    
    in Excess of
    
    
    Comprehensive
    
    
    StockholdersShares
    
    
    Par Value
    
    
    of Par Value
    
    
    Earnings
    
    
    Loss
    
    
    EquityBalance, January 1, 2010
    
    
    98,002,392
    
    
    $
    980
    
    
    $
    865,617
    
    
    $
    (34,999
    )
    
    $
    (135
    )
    
    $
    831,463Issuance of common stock
    
    
    34,480,963
    
    
    
    345
    
    
    
    343,360
    
    
    
    
    
    
    
    
    
    
    
    343,705Distributions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (19,038
    )
    
    
    
    
    
    
    (19,038
    )Commissions on stock sales
and related dealer manager
fees
    
    
    
    
    
    
    
    
    
    
    (29,508
    )
    
    
    
    
    
    
    
    
    
    
    (29,508
    )Other offering costs
    
    
    
    
    
    
    
    
    
    
    (3,241
    )
    
    
    
    
    
    
    
    
    
    
    (3,241
    )Redemptions of common stock
    
    
    (72,119
    )
    
    
    (1
    )
    
    
    (707
    )
    
    
    
    
    
    
    
    
    
    
    (708
    )Redeemable common stock
    
    
    
    
    
    
    
    
    
    
    (9,266
    )
    
    
    
    
    
    
    
    
    
    
    (9,266
    )Comprehensive loss:
    
    
    
    
    
    
    Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (160
    )
    
    
    
    
    
    
    (160
    )Net unrealized loss on
interest rate swaps
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (334
    )
    
    
    (334
    )Total comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (494
    )Balance, March 31, 2010
    
    
    132,411,236
    
    
    $
    1,324
    
    
    $
    1,166,255
    
    
    $
    (54,197
    )
    
    $
    (469
    )
    
    $
    1,112,913
   6




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COLE CREDIT PROPERTY TRUST III, INC.
 
 CONDENSED CONSOLIDATED UNAUDITED STATEMENTS OF CASH FLOWS
  Three Months Ended March 31,2010
    
    
    2009Cash flows from operating activities:Net loss
    
    $
    (160
    )
    
    $
    (2,179
    )Adjustments to reconcile net loss to net cash provided
by (used in) operating activities:Depreciation
    
    
    2,909
    
    
    
    165Amortization
    
    
    1,941
    
    
    
    53Amortization of deferred financing costs
    
    
    357
    
    
    
    Allowance for doubtful accounts
    
    
    11
    
    
    
    Changes in assets and liabilities:Rents and tenant receivables
    
    
    (1,927
    )
    
    
    (94
    )Prepaid expenses and other assets
    
    
    65
    
    
    
    4Accounts payable and accrued expenses
    
    
    917
    
    
    
    163Due to affiliates
    
    
    67
    
    
    
    Deferred rent and other liabilities
    
    
    2,174
    
    
    
    688Net cash provided by (used in) operating activities
    
    
    6,354
    
    
    
    (1,200
    )Cash flows from investing activities:Change in restricted cash
    
    
    (715
    )
    
    
    1,411Investments in real estate and related assets
    
    
    (259,865
    )
    
    
    (89,763
    )Net cash used in investing activities
    
    
    (260,580
    )
    
    
    (88,352
    )Cash flows from financing activities:Proceeds from issuance of common stock
    
    
    333,731
    
    
    
    128,441Offering costs on issuance of common stock
    
    
    (32,820
    )
    
    
    (13,456
    )Redemptions of common stock
    
    
    (708
    )
    
    
    Distributions to investors
    
    
    (7,161
    )
    
    
    (116
    )Proceeds from notes payable
    
    
    34,300
    
    
    
    Repayment of notes payable
    
    
    (88
    )
    
    
    Proceeds from affiliate notes payable
    
    
    
    
    
    
    41,581Repayment of affiliate notes payable
    
    
    
    
    
    
    (41,581
    )Escrowed investor proceeds liability
    
    
    716
    
    
    
    (1,411
    )Payment of loan deposits
    
    
    (846
    )
    
    
    Refund of loan deposits
    
    
    686
    
    
    
    Deferred financing costs paid
    
    
    (3,209
    )
    
    
    Net cash provided by financing activities
    
    
    324,601
    
    
    
    113,458Net increase in cash and cash equivalents
    
    
    70,375
    
    
    
    23,906Cash and cash equivalents, beginning of period
    
    
    278,717
    
    
    
    172Cash and cash equivalents, end of period
    
    $
    349,092
    
    
    $
    24,078Supplemental Disclosures of Non-Cash Investing and
Financing Activities:Distributions declared and unpaid
    
    $
    7,216
    
    
    $
    537Common stock issued through distribution reinvestment plan
    
    $
    9,974
    
    
    $
    157Net unrealized loss on interest rate swaps
    
    $
    (334
    )
    
    $
    Supplemental Cash Flow Disclosures:Interest paid
    
    $
    1,921
    
    
    $
    184
   7




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##### Table of Contents



COLE CREDIT PROPERTY TRUST III, INC.
 
 NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
 March 31, 2010
 NOTE 1  ORGANIZATION AND BUSINESS
      NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Principles of Consolidation and Basis of Presentation
   Allocation of Purchase Price of Real Estate and Related Assets
   8




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##### Table of Contents



COLE CREDIT PROPERTY TRUST III, INC.
NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS  (Continued)
March 31, 2010
     Restricted Cash and Escrows
  Concentration of Credit Risk
     9




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COLE CREDIT PROPERTY TRUST III, INC.
NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS  (Continued)
March 31, 2010
 Redeemable Common Stock
  NOTE 3  FAIR VALUE MEASUREMENTS
 Fair Value Measurements and Disclosures
      Cash and cash equivalents, restricted cash, rents and tenant receivables, prepaid expenses and
mortgage loan deposits and accounts payable and accrued expenses
 Notes payable
 Derivative Instruments
   10




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COLE CREDIT PROPERTY TRUST III, INC.
NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS  (Continued)
March 31, 2010
  Quoted Prices in
    
    
    
    
    
    
    SignificantActive Markets for
    
    
    Significant Other
    
    
    UnobservableBalance as of
    
    
    Identical Assets
    
    
    Observable Inputs
    
    
    InputsMarch 31, 2010
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Liabilities:Interest rate swaps
    
    $
    469
    
    
    $
    
    
    
    $
    469
    
    
    $
    
 Quoted Prices in
    
    
    
    
    
    
    SignificantActive Markets for
    
    
    Significant Other
    
    
    UnobservableBalance as of
    
    
    Identical Assets
    
    
    Observable Inputs
    
    
    InputsDecember 31, 2009
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Assets:Interest rate swap
    
    $
    140
    
    
    $
    
    
    
    $
    140
    
    
    $
    Liabilities:Interest rate swaps
    
    $
    275
    
    
    $
    
    
    
    $
    275
    
    
    $
    
 NOTE 4  REAL ESTATE ACQUISITIONS
 2010 Property Acquisitions
      2009 Property Acquisitions
   11




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COLE CREDIT PROPERTY TRUST III, INC.
NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS  (Continued)
March 31, 2010
     NOTE 5  DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
  Fair Value of Asset (Liability)Notional
    
    
    Interest
    
    
    Effective
    
    
    Maturity
    
    
    March 31,
    
    
    December 31,Balance Sheet Location
    
    
    Amount
    
    
    Rate
    
    
    Date
    
    
    Date
    
    
    2010
    
    
    2009Derivatives designated as hedging instrumentsInterest Rate Swaps
    (1)
    Deferred rent, derivative and other liabilities
    
    $
    20,000,000
    
    
    
    5.95
    %
    
    
    9/8/2009
    
    
    
    8/29/2012
    
    
    $
    (403
    )
    
    $
    (275
    )Interest Rate Swap
    (2)
    Deferred rent, derivative
 and other liabilities
    
    
    17,500,000
    
    
    
    5.75
    %
    
    
    12/18/2009
    
    
    
    1/1/2017
    
    
    
    (66
    )
    
    
    140
 
 (1)
    
    The Company executed 15 swap agreements with identical terms and
with an aggregate notional amount under the swap agreements of
$20.0 million.(2)
    
    As of December 31, 2009, the fair value of the interest rate swap
agreement was in a financial asset position and was included in
the accompanying condensed consolidated unaudited balance sheets
in mortgage loan deposits, derivative and other assets.   Amount of (Loss) Recognized in Other Comprehensive LossThree Months Ended
    
    
    Three Months EndedMarch 31, 2010
    
    
    March 31, 2009Derivatives in Cash Flow Hedging RelationshipsInterest Rate Swaps (1)
    
    $
    (334
    )
    
    $
    
 
 (1)
    
    There were no portions relating to the change in the fair value of the
interest rate swap agreements that were considered ineffective during
the three months ended March 31, 2010. No previously effective
portion of gains or losses that were recorded in accumulated other
comprehensive loss during the term of the hedging relationship was
reclassified into earnings during the three months ended March 31,
2010. There were no interest rate swaps as of March 31, 2009.  12




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##### Table of Contents



COLE CREDIT PROPERTY TRUST III, INC.
NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS  (Continued)
March 31, 2010
   NOTE 6 NOTES PAYABLE AND LINES OF CREDIT
     13




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COLE CREDIT PROPERTY TRUST III, INC.
NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS  (Continued)
March 31, 2010
 NOTE 7  COMMITMENTS AND CONTINGENCIES
 Litigation
  Environmental Matters
  NOTE 8  RELATED-PARTY TRANSACTIONS AND ARRANGEMENTS
  Offering
    Three Months Ended
    
    
    Three Months EndedMarch 31, 2010
    
    
    March 31, 2009Offering:Selling commissions
    
    $
    22,823
    
    
    $
    8,923Selling commissions reallowed by Cole Capital
    
    $
    22,823
    
    
    $
    8,900Dealer manager fee
    
    $
    6,685
    
    
    $
    2,548Dealer manager fee reallowed by Cole Capital
    
    $
    3,328
    
    
    $
    1,249Other organization and offering expenses
    
    $
    3,241
    
    
    $
    1,930
 Acquisitions and Operations
   14




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COLE CREDIT PROPERTY TRUST III, INC.
NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS  (Continued)
March 31, 2010
      Three Months Ended
    
    
    Three Months EndedMarch 31, 2010
    
    
    March 31, 2009Acquisitions and Operations:Acquisition and advisory fees and expenses
    
    $
    5,476
    
    
    $
    1,795Asset management fees and expenses
    
    $
    1,089
    
    
    $
    53Property management and leasing fees and expenses
    
    $
    555
    
    
    $
    21Operating expenses
    
    $
    536
    
    
    $
    Financing coordination fees
    
    $
    343
    
    
    $
    
 Liquidation/Listing
   15




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##### Table of Contents



COLE CREDIT PROPERTY TRUST III, INC.
NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS  (Continued)
March 31, 2010
    Other
  Transactions
   NOTE 9  ECONOMIC DEPENDENCY
   16




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##### Table of Contents



COLE CREDIT PROPERTY TRUST III, INC.
NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS  (Continued)
March 31, 2010
 NOTE 10  NEW ACCOUNTING PRONOUNCEMENTS
 Fair Value Measurements and Disclosures (Topic
820)
 NOTE 11  SUBSEQUENT EVENTS
 Status of the Offering
   Real Estate Acquisitions
   Mortgage Notes Receivable Investments
  Notes Payable
   17




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##### Table of Contents



ITEM 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
  Forward-Looking Statements
    Overview
    18




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##### Table of Contents



Recent Market Conditions
   Results of Operations
  March 31, 2010
    
    
    March 31, 2009Number of commercial properties
    
    
    190
    
    
    
    9Approximate rentable square feet (1)
    
    6.2 million
    
    
    
    863,000Percentage of rentable square feet leased
    
    
    99.9
    %
    
    
    100
    %
 
 (1)
    
    Including square feet of the buildings on land that is subject to ground leases.  19




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##### Table of Contents



March 31, 2010
    
    
    March 31, 2009Commercial properties acquired
    
    
    57
    
    
    
    9Approximate purchase price of
acquired properties
    
    $259.9 million
    
    
    $89.8 millionApproximate rentable square feet (1)
    
    1.4 million
    
    
    
    863,000
 
 (1)
    
    Including square feet of the buildings on land that is subject to ground leases. Three Months Ended March 31, 2010 Compared to the Three Months Ended March 31, 2009
  Revenue.
  General and Administrative Expenses.
 Property Operating Expenses.
 Property and Asset Management Expenses.
   20




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##### Table of Contents



Acquisition Related Expenses.
 Depreciation and Amortization Expenses.
 Interest and Other Income.
 Interest Expense.
 Modified Funds from Operations
   21




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##### Table of Contents



Three Months EndedMarch 31, 2010
    
    
    March 31, 2009Net loss
    
    $
    (160
    )
    
    $
    (2,179
    )Add:Depreciation of real estate assets
    
    
    2,909
    
    
    
    165Amortization of lease related costs
    
    
    1,939
    
    
    
    94Acquisition related expenses
    
    
    6,845
    
    
    
    2,345MFFO
    
    $
    11,533
    
    
    $
    425
  
    
    In order to recognize revenues on a straight-line basis
over the terms of the respective leases, we recognized
additional revenue by straight-lining rental revenue of
$1.1 million and $3,000 during the three months ended
March 31, 2010 and 2009, respectively.
    
    Amortization of deferred financing costs
totaled $357,000 during the three months
ended March 31, 2010. There were no
deferred financing costs as of March 31,
2009.
 Distributions and Share Redemptions
      22




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Liquidity and Capital Resources
 General
   Short-term Liquidity and Capital Resources
  Long-term Liquidity and Capital Resources
     23




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##### Table of Contents



Payments due by period (1) (2)Less Than 1
    
    
    
    
    
    
    
    
    
    
    More Than 5Total
    
    
    Year
    
    
    1-3 Years
    
    
    4-5 Years
    
    
    YearsPrincipal payments  fixed rate debt
    
    $
    163,514
    
    
    $
    362
    
    
    $
    49,731
    
    
    $
    2,824
    
    
    $
    110,597Interest payments  fixed rate debt
    
    
    70,075
    
    
    
    9,916
    
    
    
    25,620
    
    
    
    13,391
    
    
    
    21,148Total
    
    $
    233,589
    
    
    $
    10,278
    
    
    $
    75,351
    
    
    $
    16,215
    
    
    $
    131,745
 
 (1)
    
    The table above does not include amounts due to our advisor or its
affiliates pursuant to our advisory agreement because such amounts
are not fixed and determinable.(2)
    
    As of March 31, 2010, we had $37.5 million of variable rate debt
fixed through the use of interest rate swaps. We used the fixed rates
under the swap agreement to calculate the debt payment obligations in
future periods. As of March 31, 2010, we did not have any variable
rate debt outstanding for which the interest rate had not been fixed
through the use of interest rate swaps.  Cash Flow Analysis
 Three Months Ended March 31, 2010 Compared to the Three Months Ended March 31, 2009
 Operating Activities.
 Investing Activities.
 Financing Activities.
 Election as a REIT
    24




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##### Table of Contents



Inflation
  Critical Accounting Policies and Estimates
  
    
    Investment in and Valuation of Real Estate and Related Assets;
    
    Allocation of Purchase Price of Real Estate and Related Assets;
    
    Revenue Recognition;
    
    Income Taxes; and
    
    Derivative Instruments and Hedging Activities.
  Commitments and Contingencies
  Related-Party Transactions and Agreements
  Subsequent Events
  
    
    Status of the Offering;
    
    Real estate acquisitions;
    
    Mortgage notes receivable investments; and
    
    Mortgage notes payable incurred.
  25




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##### Table of Contents



New Accounting Pronouncements
  Off Balance Sheet Arrangements
  
 Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
 Item 4T.
    
    Controls and Procedures
    26




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##### Table of Contents



PART II
 OTHER INFORMATION
 
 Item 1.
    
    Legal Proceedings
  
 Item 1A.
    
    Risk Factors
  
 Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
     Total Number of Shares
    
    
    Maximum Number ofPurchased as Part of
    
    
    Shares that May YetTotal Number of
    
    
    Average Price
    
    
    Publicly Announced
    
    
    Be Purchased UnderShares Redeemed
    
    
    Paid per Share
    
    
    Plans or Programs
    
    
    the Plans or ProgramsJanuary 2010
    
    
    19,527
    
    
    $
    10.00
    
    
    
    19,527
    
    
    
    (1
    )February 2010
    
    
    15,270
    
    
    
    9.86
    
    
    
    15,270
    
    
    
    (1
    )March 2010
    
    
    37,322
    
    
    
    9.72
    
    
    
    37,322
    
    
    
    (1
    )Total
    
    
    72,119
    
    
    
    
    
    
    
    72,119
    
    
    
    (1
    )
 (1)
    
    A description of the maximum number of shares that may be     purchased
under our share redemption program is included in the
narrative preceding this table.
 
 Item 3.
    
    Defaults Upon Senior Securities
  
 Item 4.
    
    Removed and Reserved
  27




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##### Table of Contents



Item 5.
    
    Other Information
  
 Item 6.
    
    Exhibits
   28




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##### Table of Contents



SIGNATURES
  Cole Credit Property Trust III, Inc.(Registrant)By:
    
    /s/ Christopher H. Cole

Christopher H. ColeChief Executive Officer and President(Principal Executive Officer)By:
    
    /s/ D. Kirk McAllaster, Jr.D. Kirk McAllaster, Jr.Executive Vice President and Chief Financial Officer(Principal Financial Officer)
   29




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##### Table of Contents



EXHIBIT INDEX
  Exhibit No.
    
    Description3.1
    
    Third Articles of Amendment and Restatement. (Incorporated by
reference to Exhibit 3.1 to the Companys Pre-Effective
Amendment No. 3 to Form S-11 (File No. 333-149290), filed on
September 29, 2008).3.2
    
    Amended and Restated Bylaws. (Incorporated by reference to
Exhibit 3.2 to the Companys Pre-Effective Amendment No. 3 to
Form S-11 (File No. 333-149290), filed on May 7, 2008).3.3
    
    Articles of Amendment (Incorporated by reference to Exhibit
3.1 to the Registrants Current Report on Form 8-K, filed with
the Securities and Exchange Commission on April 9, 2010).4.1
    
    Form of Subscription Agreement and Subscription Agreement
Signature Page (Incorporated by reference to Appendix B to the
prospectus of the Company filed pursuant to Rule 424(b)(3) on
April 30, 2010).4.2
    
    Form of Additional Investment Subscription Agreement for
current stockholders (Incorporated by reference to Appendix C
to the prospectus of the Company filed pursuant to Rule
424(b)(3) on April 30, 2010).10.1
    
    Loan Agreement, dated April 1, 2010, by and between Cole
Credit Property Trust III, Inc., and certain of its
wholly-owned subsidiaries, collectively as Borrower, and The
Royal Bank of Scotland PLC as lender. (Incorporated by
reference to Exhibit 10.85 to the Companys Post-Effective
Amendment No. 7 (File No. 333-149290), filed on April 16,
2010).10.2
    
    Loan Agreement, dated April 1, 2010, by and between Cole
Mezzco CCPT III, LLC as Borrower, and RCG LV Debt IV REIT, LP
as lender. (Incorporated by reference to Exhibit 10.86 to the
Companys Post-Effective Amendment No. 7 (File No.
333-149290), filed on April 16, 2010).10.3
    
    Purchase agreement between Cole MT Bellevue WA, LLC and City
Center Bellevue Development LLC, dated April 30, 2010. (Incorporated by reference to
Exhibit 10.76 to the Companys pre-effective amendment on Form S-11 (File No. 333-164884)
filed on May 13, 2010).31.1
    
    Certification of the Chief Executive Officer of the Company
pursuant to Securities Exchange Act Rule 13a-14(a) or
15d-14(a), as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 (filed herewith).31.2
    
    Certification of the Chief Financial Officer of the Company
pursuant to Securities Exchange Act Rule 13a-14(a) or
15d-14(a), as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 (filed herewith).32.1*
    
    Certification of the Chief Executive Officer and Chief
Financial Officer of the Company pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 (furnished herewith).
 *
    
    In accordance with Item 601(b) (32) of Regulation S-K, this Exhibit is not deemed filed for
purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section.
Such certifications will not be deemed incorporated by reference into any filing under the
Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the registrant
specifically incorporates it by reference.  30