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Filed Pursuant to Rule 424(b)(3)
Registration No. 333-158478

GLOBAL INCOME TRUST, INC.

Maximum Offering – Up to $1,500,000,000 in Shares of Common Stock

Global Income Trust, Inc. is a Maryland corporation formed on March 4, 2009, sponsored by CNL Financial Group, LLC, that has elected to be taxed as a real estate investment trust (“REIT”) for U.S. federal income tax purposes. We intend to acquire and operate a diverse portfolio of commercial real estate assets and real estate-related assets on a global basis. We principally will focus on acquisitions of income-oriented commercial real estate and real estate-related assets. These investments may also include the investment in, and origination of, real estate-related investments such as mortgage, mezzanine, bridge, and other loans, debt securities such as commercial mortgage-backed securities and those issued by other real estate companies, equity securities of real estate companies, as well as other real estate-related investments. We are offering up to a maximum of $1,500,000,000 (150,000,000 in shares) of our common stock in this offering. We have initially designated 2.5% of the shares in this offering as issuable pursuant to our distribution reinvestment plan, whereby the shares will be sold at up to a 5% discount to the prices for the primary offering as described above. You must initially invest at least $5,000, unless you are a tax exempt plan, in which event you must invest at least $4,000. We commenced operations on October 8, 2010, when we received the minimum offering proceeds and approximately $2.4 million were released from escrow. This offering will terminate on or before April 23, 2012, unless extended by our board of directors. As of August 31, 2011, we have issued and outstanding approximately 2.1 million shares of our common stock.

Investing in our common stock involves a high degree of risk. You should purchase shares only if you can afford a complete loss of your investment. See “Risk Factors” beginning on page 25. Significant risks relating to your investment in shares of our common stock include:

•        We and our advisor have limited operating histories. Because this is a “blind pool” offering, you will not have the opportunity to evaluate the economic merits of all of our investments or how the proceeds are invested prior to purchasing shares of our common stock.

•        Due to the risks involved in the ownership of real estate, there is no guarantee of any return on your investment, and you may lose your investment.

•        There is no public market for our shares and we do not expect to list our shares in the near future. There are restrictions and limitations on your ability to have all or any portion of your shares redeemed under our share redemption plan.

•        Until we generate operating cash flow or funds from operations sufficient to make distributions to you, we may make distributions to you from other sources, such as from the proceeds of this offering or from borrowings, which will reduce cash available for investment in properties and other real estate-related assets. We have not established any limit on the extent to which we may use borrowings or proceeds of this offering to pay distributions, and there will be no assurance that we will be able to sustain distributions at any level.

•        We rely on our advisor and its affiliates to select properties and other investments and to conduct our operations. We are obligated to pay substantial fees to our advisor, based upon agreements which have not been negotiated at arm’s length, and some of which are payable based upon factors other than the quality of services provided to us. These fees could influence their advice to us as well as their judgment in performing services for us and our subsidiaries.

•        We expect to incur debt which could hinder our ability to pay distributions to you or could decrease the value of your investment in the event that income from or generated by, or the value of, the property securing the debt falls.

•        We anticipate that up to 60% of our assets may be located in foreign jurisdictions. In such event, we may be susceptible to changes in currency exchange rates, foreign tax systems which may not recognize our REIT status, foreign taxes on operational revenues and disposal gains, adverse political or economic developments and changes in foreign laws.

•        To hedge against foreign exchange and interest rate fluctuations, we may use derivative financial instruments. Using derivative financial instruments may be costly and ineffective.

Neither the Securities and Exchange Commission, the Attorney General of the State of New York nor any other state securities regulator has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. No one is authorized to make any statement about this offering different from those that appear in this prospectus. The use of projections or forecasts in this offering is prohibited. Any representation to the contrary and any predictions, written or oral, as to the amount or certainty of any present or future cash benefit or tax consequence that may flow from an investment in this offering is not permitted.

The managing dealer of this offering, CNL Securities Corp., an affiliate of our sponsor, will use only its best efforts to sell our shares and has no firm commitment or obligation to purchase any of our shares.

October 24, 2011

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SUITABILITY STANDARDS

We have established financial suitability standards for initial stockholders in this offering. These suitability standards require that a purchaser of shares have either:

In determining your net worth, do not include the value of your home, home furnishings or personal automobiles.

Our suitability standards also require that you:

Before authorizing an investment in shares, fiduciaries of Plans should consider, among other matters: (i) fiduciary standards imposed by the Employee Retirement Income Security Act of 1974, as amended, or “ERISA,” and governing state or other law, if applicable; (ii) whether the purchase of shares satisfies the prudence and diversification requirements of ERISA and governing state or other law, if applicable, taking into account any applicable Plan’s investment policy and the composition of the Plan’s portfolio, and the limitations on the marketability of shares; (iii) whether such fiduciaries have authority to hold shares under the applicable Plan investment policies and governing instruments; (iv) rules relating to the periodic valuation of Plan assets; and (v) prohibitions under ERISA, the Internal Revenue Code and/or governing state or other law relating to Plans engaging in certain transactions involving “plan assets” with persons who are “disqualified persons” under the Internal Revenue Code or “parties in interest” under ERISA or governing state or other law, if applicable. See “Plan of Distribution — ERISA Considerations.”

Our sponsor and each person selling shares on our behalf must make every reasonable effort to determine that the purchase of shares in this offering is a suitable and appropriate investment for each stockholder based on information provided by the stockholder regarding the stockholder’s financial situation and investment objectives.

Several states have established suitability requirements that are more stringent than the standards that we have established and described above. Shares will be sold to investors in these states only if investors represent that they meet the special suitability standards set forth below. In each case, these special suitability standards exclude from the calculation of net worth the value of the investor’s home, home furnishings and personal automobiles.

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In addition, the following states have established the following recommendations for investors in their states. Shares will be sold to investors in these states only if investors represent that they meet the special recommendations set forth below.

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HOW TO SUBSCRIBE

Investors who meet the suitability standards described herein may subscribe for shares of our common stock as follows:

By executing the subscription agreement and paying the total purchase price for the shares of our common stock subscribed for, each investor attests that he or she meets the minimum income and net worth standards, and, if applicable, any investment limitations imposed by his or her primary state of residence, as stated in the subscription agreement and agrees to accept all of the terms of the subscription agreement.

Subscriptions will be effective only upon our acceptance, and we reserve the right to reject any subscription, in whole or in part. An approved trustee must process and forward to us subscriptions made through IRAs, Keogh plans, 401(k) plans and other tax-deferred plans. See “Suitability Standards” and “Plan of Distribution — Subscription Procedures” for additional details on how you can purchase our shares of common stock.

ADDITIONAL INFORMATION

A registration statement has been filed with the U.S. Securities and Exchange Commission (the “Commission”) with respect to the securities offered hereby. This prospectus does not contain all information set forth in the registration statement, certain parts of which are omitted in accordance with the rules and regulations of the Commission. Statements contained in this prospectus as to the contents of any document are necessarily summaries of such documents, and in each instance reference is made to the copy of such documents filed with the Commission, each such statement being qualified in all respects by such reference. For further information regarding us and our shares, reference is hereby made to the registration statement and to the exhibits and schedules filed or incorporated as a part thereof which may be obtained from the principal office of the Commission in Washington, D.C., upon payment of the fee prescribed by the Commission, or examined at the principal office of the Commission without charge. In addition, we are required to file periodic reports under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), all of which may be obtained from the Commission. The Commission maintains a web site located at http://www.sec.gov that contains information regarding registrants that file electronically with the Commission.

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PROSPECTUS SUMMARY

This prospectus summary highlights selected information contained elsewhere in this prospectus. See also the “Questions and Answers about This Offering” section immediately following this summary. This section and the “Questions and Answers about This Offering” section do not contain all of the information that is important to your decision whether to invest in our common stock. To understand this offering fully, you should read the entire prospectus carefully, including the “Risk Factors” section and the financial statements.

Our Business

Global Income Trust, Inc., formerly known as Macquarie CNL Global Income Trust, Inc., is a Maryland corporation incorporated on March 4, 2009 that has elected to be taxed as a real estate investment trust for U.S. federal income tax purposes. Global Income Trust, Inc. is sponsored by CNL Financial Group, LLC. We will principally focus on acquisitions of income-oriented commercial real estate and real estate-related assets. These investments may also include the investment in, and origination of, real estate-related investments such as mortgage, mezzanine, bridge, and other loans, debt securities such as commercial mortgage-backed securities and those issued by other real estate companies, equity securities of real estate companies, as well as other real estate-related investments. We may invest in a wide variety of sectors, including office properties, retail centers, business and industrial parks (including warehouse, manufacturing and distribution facilities), multifamily properties (including student and senior housing), hospitality properties, healthcare properties and self storage properties, as well as other classifications of commercial real estate property. We initially anticipate that up to 60% of our assets may be located outside the United States.

We plan to own substantially all of our assets and conduct our operations through Global Income, LP, which we refer to as our operating partnership. We currently own all of the limited partnership interests in our operating partnership. Global Income GP, LLC, our wholly owned subsidiary, owns a 1% general partnership interest in our operating partnership.

In June 2011, we acquired two fully leased commercial properties in Texas, the first a light industrial building leased as a distribution center to a major ground package courier service, and the other a two-story office building leased to a global government services contractor.

Our office is located at 450 South Orange Avenue, Orlando, Florida 32801. Our telephone number is (407) 650-1000.

Our Sponsor, Our Advisor and its Sub-Advisors

CNL Financial Group, LLC is our sponsor, promoter and an affiliate of CNL Financial Group, Inc., or “CNL,” which is a leading private investment management firm providing global real estate and alternative investments and is controlled by James M. Seneff, Jr.

We are externally advised by our “advisor,” CNL Global Income Advisors, LLC, formerly known as Macquarie CNL Global Income Advisors, LLC. Our advisor was organized as a Delaware limited liability company in December 2008. All of our executive officers are executive officers or managers of our advisor. Our advisor is responsible for managing our affairs on a day-to-day basis and for identifying and making acquisitions and investments on our behalf. Our advisor performs its duties and responsibilities to us under an advisory agreement and owes fiduciary duties to us and our stockholders. The term of the advisory agreement is for one year after the date of execution, subject to an unlimited number of successive one-year renewals upon the mutual consent of the parties. Our independent directors are required to review and approve the terms of our advisory agreement at least annually.

Our original co-sponsors were CNL Financial Group, LLC and Macquarie Infrastructure and Real Assets Inc. (“MIRA”), a subsidiary of Macquarie Group Limited¹. In addition, affiliates of CNL and Macquarie Real Estate Advisory Services LLC, a subsidiary of MIRA (“MREAS”), held the equity interests in our advisor and in our property manager. Affiliates of CNL and MREAS entered into sub-advisor agreements and sub-property management

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agreements with our advisor and our property manager, respectively, to assist them with their responsibilities under their respective advisory agreement and property management agreements with our Company.

In early 2011, CNL and MIRA collectively began exploring how to achieve certain administrative and organizational efficiencies in the oversight responsibilities of our Company. They concluded that efficiencies could be attained through CNL’s single sponsorship and administration of our Company, as well as CNL and its affiliates continuing to focus on domestic investments, while MIRA and its affiliates continue to focus on identifying, acquiring and operating international investments. In an effort to execute on these efficiencies, on June 30, 2011, MREAS sold to affiliates of CNL all of its equity interests in our advisor and our property manager. As a result, CNL Financial Group, LLC became the sole sponsor of our Company. In connection with that sale, our corporate name and the names of our advisor and property manager were changed effective June 30, 2011. The ownership changes of the advisor and the property manager described above did not affect our Company’s investment objectives or strategies, which remain unchanged.

CNL Global Income Sub-Advisors, LLC, formerly known as CNL Global Income Advisors, LLC (the “CNL Sub-Advisor”), and Macquarie Global Income Advisors LLC (the “MREAS Sub-Advisor”), subsidiaries of CNL and MREAS, respectively, remain as sub-advisors to our advisor. In addition, on June 30, 2011, MGPA Advisory (Singapore) Pte Ltd (the “MGPA Sub-Advisor”), an affiliate of MGPA Limited, entered into a sub-advisor agreement with our advisor. The three sub-advisors provide substantially all of the advisor’s acquisition, operating and administrative services with respect to our domestic and international investments. Our advisor retains ultimate responsibility for the performance of all matters entrusted to it under the advisory agreement.

Our property is managed under a property management agreement between us and our property manager, CNL Global Income Managers, LLC, formerly known as Macquarie CNL Global Income Managers, LLC, organized as a Delaware limited liability company in March 2009. Our property manager is responsible for managing and leasing our commercial real estate investments. The term of the property management agreement is for six years after the date of execution. Our property manager has entered into sub-property management agreements with each of CNL Global Income Sub-Managers, LLC, formerly known as CNL Global Income Managers, LLC, (primarily with respect to investments in North America (defined as the United States, Canada and Mexico), Macquarie Global Income Managers LLC (primarily with respect to investments in Australia), and MGPA Advisory (Singapore) Pte Ltd (primarily with respect to investments in Asia and Europe), to provide substantially all our property management and leasing services. Our property manager retains ultimate responsibility for the performance of all matters entrusted to it under the property management agreement.

We seek to invest in global income oriented real estate investments by leveraging the value of the international real estate expertise of MREAS and MGPA Advisory and their affiliates combined with the domestic real estate expertise of CNL. This network of sub-advisors and sub-property managers offers us access to professionals experienced in making and managing real estate and real estate-related investments in various regions around the world.

CNL and its affiliates and related parties have extensive experience in the acquisition, management and development of domestic real estate and real estate-related assets. Various affiliates and related parties of CNL provide services to us as described in “The Advisor and the Advisory Agreement,” “Conflicts of Interest” and “Certain Relationships and Related Transactions.”

MIRA and MGPA Limited, and their affiliates, have extensive experience in the acquisition, management and development of international real estate and real estate-related assets. MIRA is a subsidiary of Macquarie Group Limited, which is headquartered in Sydney, Australia, and is a global provider of banking, financial, advisory, investment and funds management services. MGPA Limited is an independently managed private equity real estate investment advisory company focused on real estate investment in Europe and Asia. Macquarie Bank Limited, a subsidiary of Macquarie Group Limited, owns a joint venture interest in MGPA Limited and members of the senior management team of MGPA Limited own the remaining joint venture interests. See, “The Advisor and the Advisory Agreement – Sub-Advisors,” and “— Property Manager – Sub-Property Managers.”

Our Investment Objectives

Our primary investment objectives are to:

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There is no assurance that we will be able to achieve our investment objectives.

Investment Strategy

In June 2011, we acquired our first assets. On June 8, 2011, we closed on the purchase of a fully leased light industrial building, located near Austin, Texas. In addition, we entered into a purchase agreement for two fully leased office buildings located in Fort Worth, Texas, and we closed on the purchase of the first building on June 28, 2011. We expect to acquire the second building in the fourth quarter of 2011. Except as noted in this prospectus, we have neither acquired nor contracted to acquire any other investments, nor have we identified any additional assets in which there is a reasonable probability that we will invest, with the proceeds of this offering.

We intend to undertake a global investment strategy to acquire a range of income-oriented commercial real estate and real estate-related assets. We may invest across a diverse spectrum of real estate sectors, including office properties, retail centers, business and industrial parks (including warehouse, manufacturing and distribution facilities), multifamily properties (including student and senior housing), hospitality properties, healthcare properties and self storage properties. These assets may also include the investment in, and origination of, real estate-related investments such as mortgage, mezzanine, bridge, and other loans, debt securities such as mortgage-backed securities and those issued by other real estate companies, equity securities of real estate companies, as well as other real estate-related investments. At the discretion of our advisor’s investment committee and with the approval of our board of directors, we additionally may invest in other income-oriented commercial real estate assets, securities and investment opportunities that otherwise meet our investment objectives and policies. Our advisor intends to use CNL’s and the sub-advisors’ network of global relationships to locate, conduct due diligence, and assist in the acquisition, operation and management of domestic and international investments and may also use these global relationships to enter into joint ventures, partnerships or other co-ownership arrangements for the acquisition of domestic and international properties. This may include present and future real estate limited partnerships and REITs sponsored by affiliates of CNL and may also include future real estate programs of affiliates of MIRA and MGPA Limited.

We will supplement this prospectus to provide descriptions of material properties and other material real estate investments that we acquire or propose to acquire during the course of this offering. For a discussion of recent and pending acquisitions, see “Our Investments.”

Our Initial Capitalization

Our advisor acquired 22,222 shares of our common stock in consideration of a cash payment of $200,000 in March 2009. The price per share paid by our advisor was lower than the price you will pay, but is approximately the same as the net proceeds we will receive from the sale of a share under this offering at $10.00 to which certain commissions and fees would otherwise apply.

Borrowing Policies

There is no limitation on the amount we may invest in any single property or other asset or on the amount we can borrow for the purchase of any individual property or other investment. Our intent is to target our aggregate borrowings to between 30% to 60% of the aggregate value of our assets, once we own a seasoned and stable asset portfolio. Our board of directors has adopted a policy to generally limit our aggregate borrowings to approximately 75% of the aggregate value of our assets, unless substantial justification exists that borrowing a greater amount is in our best interests. We intend to have lower leverage than our policy permits, although initially our aggregate borrowings may be greater than 30% to 60% of the aggregate value of our assets. Under our articles of incorporation, the maximum amount of our indebtedness cannot exceed 300% of our “net assets,” as defined by the Statement of Policy Regarding Real Estate Investment Trusts adopted by the North American Securities Administrators Association on May 7, 2007 (the “NASAA REIT Guidelines”) as of the date of any borrowing unless any excess borrowing is approved by a majority of our independent directors and is disclosed to stockholders in our next quarterly

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report, together with a justification for the excess. We have a revolving credit facility available to us, and obtained mortgage financing for a recent property acquisition, but we have no other established financing sources at this time. We will supplement this prospectus to provide descriptions of material borrowings made during the course of this offering.

Risk Factors

An investment in our common stock is subject to significant risks that are described in more detail in the “Risk Factors” and “Conflicts of Interest” sections of this prospectus. If we are unable to effectively manage the impact of these risks, we may not meet our investment objectives and, therefore, you may lose some or all of your investment. The risks that we believe are most relevant to an investment in shares of our common stock include the following:

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Our REIT Status

We have elected to be taxed as a REIT beginning with our taxable year ended December 31, 2010. As a REIT, we generally will not be subject to U.S. federal income tax on income that we distribute to our stockholders. Under the Internal Revenue Code, REITs are subject to numerous organizational and operational requirements, including a requirement that they distribute generally at least 90% of their taxable REIT income. If we fail to qualify for taxation as a REIT in any year, our income for that year will be taxed at regular corporate rates, and we may be precluded from qualifying for treatment as a REIT for the four years following the year of our failure to qualify as a REIT. It is possible to discover that we failed to qualify as a REIT months or even years after the REIT earnings have been distributed. Even if we qualify as a REIT for federal income tax purposes, we may still be subject to state and local taxes on our income and property and to federal income and excise taxes on our undistributed income.

Further, our REIT election only applies with respect to U.S. taxation. To the extent that we or our subsidiaries own assets, directly or indirectly, or conduct operations in foreign jurisdictions, we may be subject to foreign tax systems. Our favorable tax treatment in the United States as a REIT may not be recognized by foreign jurisdictions where we may be treated as a foreign corporation or other type of entity subject to a variety of taxes, such as income, corporate, trade, local and capital taxes, and distributions from such operations may be subject to withholding both as to dividends and interest paid to us. Although we will seek to reduce the foreign taxes payable on foreign operations, it is unlikely that we will be able to mitigate totally such taxes, which could be significant. To the extent we incur such foreign taxes, we will receive reduced amounts from foreign operations and will have less cash available for distribution to our stockholders. Further, the foreign taxes cannot be passed through to our stockholders as a foreign tax credit and we cannot generally make effective use of foreign tax credits. As a result, we expect that neither we nor our stockholders will be able to reduce U.S. tax liability on account of our payment of foreign taxes. Accordingly, foreign taxes would impact our operations as an additional cost.

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Our UPREIT Structure

We are considered to be an umbrella partnership real estate investment trust, or “UPREIT,” because substantially all of our assets will be owned by our operating partnership, Global Income, LP, of which we currently own all of the limited partnership interests. Global Income GP, LLC, our wholly owned subsidiary, owns a 1% general partnership interest in our operating partnership. We believe that using an UPREIT structure gives us an advantage in acquiring desired properties from persons who may not otherwise sell their properties because of unfavorable tax results. We intend to own substantially all of our investments through our operating partnership or its subsidiaries.

Our Management

We operate under the direction of our board of directors, the members of which owe us fiduciary duties and which are accountable to us and our stockholders in accordance with the Maryland General Corporation Law. Our board of directors is responsible for the management and control of our business and affairs and has responsibility for reviewing our advisor’s performance at least annually. We have five members on our board, three of whom are independent of our management, our advisor and our respective affiliates, and of the remaining two directors, currently one is a representative of CNL and one is a representative of MIRA. Our directors will be elected annually by our stockholders. Our board of directors has established an audit committee comprised of independent directors. The majority of our directors are independent of our advisor.

All of our executive officers are also executive officers of our advisor and/or its affiliates. Our executive officers have extensive experience investing in real estate. Our chairman of the board has over 35 years of experience investing in real estate with CNL and its affiliates, and our chief executive officer has over 30 years of experience investing in real estate with CNL and its affiliates. The MIRA representative on our board of directors has 25 years of real estate experience and over nine years of experience with MIRA and its affiliates.

Our Conflicts of Interest

Substantial conflicts of interest will exist between us and some of our affiliates. Our advisor and its executive officers will experience conflicts of interest in connection with the management of our business affairs. These conflicts arise principally from their involvement in other activities that may conflict with our business and interests. Conflicts of interest that may exist between us and some of our affiliates include the following:

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See the “Risk Factors — Risks Related to Conflicts of Interest and Our Relationships with Our Advisor, Its Affiliates and Related Parties” and “Conflicts of Interest” sections of this prospectus for a detailed discussion of the various conflicts of interest relating to your investment and the risks associated with such conflicts, as well as the policies that we have established to resolve or mitigate a number of these potential conflicts.

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Investment Company Act Considerations

We intend to conduct our operations so that we and each of our subsidiaries will not be required to register as an investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act”).” Under Section 3(a)(1)(A) of the Investment Company Act, a company will be an “investment company” if it is, or holds itself out as being, engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities. Under Section 3(a)(1)(C) of the Investment Company Act a company is deemed to be an “investment company” if it is engaged, or proposes to engage, in the business of investing, reinvesting, owning, holding or trading in securities and owns or proposes to acquire “investment securities” having a value exceeding 40% of the value of its total assets on an unconsolidated basis, which we refer to as the “40% test.” “Investment securities” excludes U.S. government securities and securities of majority-owned subsidiaries that are not themselves investment companies and are not relying on the exception from the definition of investment company set forth in Section 3(c)(1) or Section 3(c)(7) of the Investment Company Act.

We intend to engage primarily in the business of acquiring real property, as well as making mortgage loans and other loans secured by interests in real estate and making other real estate-related investments. We intend to acquire commercial real estate and real-estate related assets directly, for example, by acquiring fee interests or long-term leasehold estates in commercial real property, or by purchasing interests, including controlling interests, in REITs or other “real estate operating companies,” such as real estate management companies and real estate development companies, that own real property. We also may co-invest with other entities in real estate assets through joint ventures, limited liability companies, partnerships and other forms of co-ownership arrangements, including entities in which we do not own a controlling interest. Our investments may also include investment in, and origination of, mortgages and other real-estate related loans, debt securities such as commercial mortgage-backed securities and those issued by other real estate companies, equity securities of real estate companies as well as other real estate-related investments. We anticipate that our assets generally will be held in our wholly and majority-owned subsidiaries of the company, each formed to hold a particular asset.

We believe that neither we nor any of our wholly or majority-owned subsidiaries will be considered investment companies under Section 3(a)(1)(A) of the Investment Company Act because we and our subsidiaries will not engage primarily, or hold ourselves out as being engaged primarily, in the business of investing, reinvesting or trading in securities. Rather, we and our subsidiaries will be primarily engaged in non-investment company businesses related to real estate. Consequently, we and our subsidiaries expect to be able to conduct our respective operations such that none of us will be required to register as an investment company under the Investment Company Act.

In addition, we intend to conduct our operations so that we and most, if not all, of our wholly and majority-owned subsidiaries will comply with the 40% test and thus will not meet the definition of an investment company under Section 3(a)(1)(C) of the Investment Company Act. We will monitor our investments on an ongoing basis to determine our compliance and the compliance of each wholly and majority-owned subsidiary with this test. We expect that few, if any, of our wholly and majority-owned subsidiaries will be investment companies or relying on exemptions under either Section 3(c)(1) or Section 3(c)(7) of the Investment Company Act. Consequently, interests in these subsidiaries generally will not constitute “investment securities.” Accordingly, we believe that neither we nor any of our wholly and majority-owned subsidiaries would be considered investment companies under Section 3(a)(1)(C) of the Investment Company Act.

The determination of whether an entity is a majority-owned subsidiary of our company is made by us. The Investment Company Act defines a majority-owned subsidiary of a person as a company 50% or more of the outstanding voting securities of which are owned by such person. The Investment Company Act further defines voting securities as any security presently entitling the owner or holder thereof to vote for the election of directors of a company. We treat companies in which we own at least a majority of the outstanding voting securities as majority-owned subsidiaries for purposes of the 40% test. We have not requested that the SEC staff approve our treatment of any entity as a majority-owned subsidiary and the SEC staff has not done so. If the SEC staff were to disagree with our treatment of one or more companies as majority-owned subsidiaries, we would need to adjust our strategy and our assets in order to continue to pass the 40% test. Any such adjustment in our strategy could have a material adverse effect on us.

In the event that we or any of our wholly or majority-owned subsidiaries would satisfy the definitions of “investment company,” we intend to rely on the exception provided by Section 3(c)(5)(C) of the Investment Company Act, which is available for entities “primarily engaged in the business of purchasing or otherwise acquiring mortgages and other liens on and interests in real estate.” In addition to prohibiting the issuance of certain types of securities, this exception generally requires that at least 55% of an entity’s assets must be comprised of mortgages and other liens on and

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interests in real estate, also known as “qualifying assets,” and at least another 25% of the entity’s assets must be comprised of additional qualifying assets or a broader category of assets that we refer to as “real estate-related assets” under the Investment Company Act (and no more than 20% of the entity’s assets may be comprised of miscellaneous assets). We will measure our Section 3(c)(5)(C) exception on an unconsolidated basis.

To avoid being required to register under the Investment Company Act, we will need to limit our ability to make certain investments. Although we intend to monitor our portfolio, there can be no assurance that we will be able to avoid registration for us or each of our subsidiaries.

To the extent that the SEC staff provides more specific guidance regarding any of the matters bearing upon the definition of investment company and the exceptions to that definition, we may be required to adjust our strategy accordingly. Any additional guidance from the SEC staff could provide additional flexibility to us, or it could further inhibit our ability to pursue the strategies we have chosen.

Compensation of Our Advisor and Affiliates

Our advisor, its affiliates and related parties perform services relating to the investment, management and sale of our assets. In addition, CNL Securities Corp., the managing dealer for this offering, performs services in connection with the offer and sale of shares. The following table describes in summary form the compensation and reimbursement of expenses that we contemplate paying to our advisor, its affiliates and the managing dealer. The estimated maximum dollar amounts presented in the table are based on the assumption that we sell all of the shares of the offering at the following prices:

Offering-stage compensation relates only to this primary offering, as opposed to any subsequent offerings. All or a portion of the selling commissions or marketing support fees will not be charged with regard to shares sold to certain categories of purchasers and for sales eligible for volume discounts and, in limited circumstances, the managing dealer fee may be reduced with respect to certain purchases.

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There are many conditions and restrictions on the amount of compensation our advisor, its affiliates and related parties may receive. The foregoing summarizes the anticipated terms of compensation arrangements during this offering; however, the terms of these arrangements may be changed in the future, subject to the approval of our independent directors. For a more detailed explanation of the fees and expenses payable to our advisor, its affiliates and related parties, see “Estimated Use of Proceeds” and “Management Compensation.”

Our Offering

As of August 31, 2011, we had received aggregate subscription proceeds of approximately $20.6 million in gross offering proceeds from the sale of approximately 2.1 million common shares in our current public offering, inclusive of approximately 17,000 shares issued under our distribution reinvestment plan for gross proceeds of approximately $164,000. The shares sold and the gross offering proceeds received from such sales do not include 22,222 shares purchased by our advisor for $200,000 preceding the commencement of our offering. As of August 31, 2011, there remained approximately 147.9 million shares of common stock to be offered and sold in this offering, including shares reserved for issuance under our distribution reinvestment plan.

We are offering a maximum of $1,500,000,000 (150,000,000 shares) of our common stock to the public through our managing dealer, CNL Securities Corp., a registered broker-dealer affiliated with CNL. The shares are currently offered at $10.00 per share; however, our board of directors may change this price, in its sole discretion. We have initially designated 2.5% of the shares in this offering as issuable pursuant to our distribution reinvestment plan, whereby the shares will be sold at up to a 5% discount to the prices for the primary offering as described above. We reserve the right to reallocate the shares of common stock registered in this offering between the primary offering and our distribution reinvestment plan. The offering will terminate on or before April 23, 2012. In addition,

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if we extend the offering for another year and file another registration statement during the one-year extension in order to sell additional shares, we could continue to sell shares in this offering until the earlier of 180 days after the third anniversary of the commencement of this offering and the effective date of the subsequent registration statement. If we decide to extend the primary offering beyond two years from April 23, 2010 we will provide that information in a prospectus supplement. If we file a subsequent registration statement, we could continue offering shares with the same or different terms and conditions. Nothing in our organizational documents prohibits us from engaging in additional subsequent public offerings of our stock. Our board of directors may terminate this offering at any time. This offering must be registered in every state in which we offer or sell shares. Generally, such registrations are for a period of one year. Thus, we may have to stop offering and selling shares in any state in which the registration is not renewed annually.

This is a “best efforts” offering, which means our managing dealer and the participating brokers selling shares in our offering are required only to use their best efforts to sell our shares and have no firm commitment or obligation to purchase any of our shares.

Our Distribution Policy

In order to qualify as a REIT, we are required to distribute 90% of our annual REIT taxable income to our stockholders. We expect to generate little, if any, cash flow or funds from operations available for distribution until we make substantial investments. Therefore, until such time as we have sufficient cash flow or funds from operations, we may decide to not pay distributions or to fund all or a portion of the payment of distributions from sources other than cash flow from operations or funds from operations, such as from cash flows generated by financing activities, a component of which includes our secured and unsecured borrowings and the proceeds of this offering. Our advisor, its affiliates or related parties may also advance cash to us or waive asset management fees or other fees in order for us to have cash to pay distributions in excess of available cash flow or funds from operations. We have not established any limit on the extent to which we may use borrowings or proceeds of this offering to pay distributions, and there will be no assurance that we will be able to sustain distributions at any level.

We currently declare distributions daily and pay them on a monthly basis to our stockholders. Our board of directors determines the amount of each distribution and whether the distribution will be in cash or other property, which may include our own securities. The amount of each distribution generally will be based upon such factors as the amount of cash available for distribution, current and projected cash requirements, tax considerations and other factors. Because of the effect of other items, including depreciation and amortization associated with real estate investments, distributions, in whole or in part, in any period may constitute a return of capital for federal tax purposes.

On May 25, 2010, our board of directors authorized a daily cash distribution of $0.0017808 per share of common stock which commenced on October 7, 2010. Distributions are calculated based on the number of days each stockholder has been a stockholder of record in that month. Currently, each month’s distributions are aggregated and paid in the following month. The daily distribution rate is equal to an annualized distribution rate of 6.5%, using our offering price of $10.00 per share. Our board of directors intends to evaluate our distribution policy on a quarterly basis and reserves the right to change the per share distribution amount or otherwise amend or terminate this distribution policy.

For the six months ended June 30, 2011 and the year ended December 31, 2010, we declared and paid distributions in the total amount of $401,552 and $83,379, respectively, all of which distributions were considered a return of capital for federal income tax purposes. Generally, distributions will constitute distributions up to the amount of our current or accumulated earnings and profits and will be taxable to the recipient stockholders as ordinary income. Our cumulative net losses and accumulated distributions as of June 30, 2011 were approximately $2.3 million and $0.5 million, respectively. As we have not had any distributable earnings, or current or accumulated earnings and profits since inception, the distributions made through June 30, 2011 were made from offering proceeds.

Our Distribution Reinvestment Plan

We have adopted a distribution reinvestment plan that will allow our stockholders to have the full amount of their distributions reinvested in additional shares that may be available. We have designated 2.5% of the shares in this offering as shares issuable pursuant to our distribution reinvestment plan for this purpose.

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Our Redemption Plan

We have adopted a share redemption plan that allows our stockholders who hold shares for at least one year to request that we redeem between 25% and 100% of their shares. If we have sufficient funds available to do so and if we choose, in our sole discretion, to redeem shares, the number of shares we may redeem in any calendar year and the price at which they are redeemed are subject to conditions and limitations, including:

Our board of directors has the ability, in its sole discretion, to amend or suspend the redemption plan or to waive any specific conditions if it is deemed to be in our best interest.

During the six months ended June 30, 2011 and the year ended December 31, 2010, we did not receive any redemption requests under our Redemption Plan.

Our Exit Strategy

Our board of directors will consider future liquidity options, including our sale or the sale of all of our assets, merger opportunities or the listing of the shares of our common stock on a national securities exchange; however, our board of directors is not required to recommend a liquidity event by any certain date. Our board of directors must consider, but is not required to commence, a liquidity event for our stockholders which may include a liquidation of our assets, a sale of our company or a listing of our common stock on or before the seventh anniversary of the effective date of this offering. We do not know at this time what macro-or micro-circumstances will exist in the future and therefore we do not know what factors our board of directors will consider in determining whether to pursue a liquidity event in the future. Therefore, we have not established any pre-determined criteria. A liquidation of our assets or a sale of the company would require the approval of our stockholders.

Estimated Use of Proceeds

We estimate that approximately 86.45% to 86.94% of the net offering proceeds after paying the investment services fees and other acquisition expenses, assuming the sale of one-half of the shares being offered or the sale of the maximum offering, respectively, will be used for investment in real estate, loans and other real estate-related assets and other corporate purposes. The remainder of the gross offering proceeds are expected to be used to pay selling commissions, the marketing support fee, other organizational and offering expenses, acquisition fees and acquisition expenses.

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QUESTIONS AND ANSWERS ABOUT THIS OFFERING

Below we have provided some of the more frequently asked questions and answers relating to an offering of this type. Please see the remainder of this prospectus for more detailed information about this offering.

Although REITs often receive substantially better tax treatment than entities taxed as standard C corporations, it is possible that future legislation or certain real estate investment opportunities in which we may choose to participate would cause a REIT to be a less advantageous tax status for us than if we were taxed for federal income tax purposes as a C corporation. Moreover, we intend to make significant foreign investments, which may be subject to foreign tax systems that may not recognize our REIT status, which could create additional tax costs or other inefficiencies that reduce the benefits of our REIT status (although there would generally be no disadvantage to the REIT structure as compared with a C corporation). As a result, our articles of incorporation provide our board of directors with the power, under certain circumstances, to revoke or otherwise terminate our REIT election and cause us to be taxed as a C corporation without the vote of our stockholders. Our board of directors has fiduciary duties to us and to our stockholders in accordance with the Maryland General Corporation Law and could cause such

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changes in our tax treatment only if it determines in good faith that such changes are in the best interest of our stockholders.

We may hold some of our properties through a taxable REIT subsidiary, or “TRS,” in which case the TRS entity would be subject to federal income tax.

In addition, our advisor will monitor the performance of CNL Global Income Managers, LLC, an affiliate of CNL and our advisor that will provide day-to-day property management services with respect to our properties, as well as any third-party unaffiliated property managers with whom our property manager contracts for property management services.

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We expect that some portion of your distributions will not be subject to tax in the year in which they are received because, for example, depreciation expense reduces the amount of taxable income but does not reduce cash available for distribution. The portion of your distribution that is not subject to tax immediately is considered a return of capital for tax purposes and will reduce the tax basis of your investment. Distributions that constitute a return of capital, in effect, defer a portion of your tax until your investment is sold or we are liquidated, at which time you will be taxed at capital gains rates if your shares are held as a capital asset. To the extent any distribution that is not from current or accumulated earnings and profits exceeds the tax basis of your investment, such excess is taxed currently at capital gain rates if your shares are held as capital assets. However, because each investor’s tax considerations are different, we suggest that you consult with your tax advisor.

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After you have held your shares for at least one year, you may be able to have your shares repurchased by us pursuant to our redemption plan, which is subject to significant conditions and limitations. Our board of directors has the right to reject any redemption request for any reason or to amend, suspend or terminate our redemption plan at any time, without the approval of our stockholders. Our board of directors has the right to waive the holding periods and change the redemption prices in the event of the death, permanent disability or bankruptcy of a stockholder or other exigent circumstance.

In our discretion and with your consent, if necessary, we will provide this information to you via U.S. mail or other courier, facsimile or electronic delivery.

Global Income Trust

c/o Boston Financial Data Services, Inc.

30 Dan Road, Suite 8562

Canton, MA 02021

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To ensure that any account changes are made promptly and accurately, all changes including your address, ownership type and distribution mailing address should be directed to the transfer agent.

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RISK FACTORS

Your purchase of shares involves a number of risks. You should carefully consider the following risk factors in conjunction with the other information contained in this prospectus before purchasing shares of our common stock. The risks and uncertainties described below represent those risks and uncertainties that we believe are material to us. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also harm our business. The occurrence of any of these risk factors, particularly those under the subheadings “— Company Related Risks”; “— Risks Related to Conflicts of Interest and Our Relationships with Our Advisor, Its Affiliates and Related Parties”; “— Risks Related to Our Business”; “— Risks Relating to Investments in Real Estate-Related Securities”; “— Lending Related Risks”; “— Federal Income Tax Risks”; and “— Risks Related to Our Organizational Structure,” could have a material adverse effect on our business, financial condition, results of operations and ability to pay distributions to you.

Offering Related Risks

The price of our shares was determined arbitrarily.

We determined the offering price of our shares in our sole discretion based on:

There is no public market for our shares and there can be no assurance that one will develop.

Our shares are not listed and there is no current public market for shares of our common stock. There is no assurance that one will develop. We have no obligation to list our shares on any public securities market or provide any other type of liquidity to our stockholders. Even if you are able to sell your shares, the price received for any shares could be less than what you paid or less than your proportionate value of the assets we own. There likely will not be any independent third party value of the shares. Additionally, although we have a share redemption plan, it is subject to conditions and limitations, and our board of directors may reject any request for redemption of shares or amend, suspend or terminate the plan at any time. Further, we may not have sufficient liquidity to satisfy your redemption requests. Therefore, it may be difficult for you to sell your shares promptly or at all, including in the event of an emergency and, if you are able to sell your shares, you may have to sell them at a substantial discount from the public offering price. In the future, our board of directors may consider various exit strategies, but our articles of incorporation do not require that we consummate a transaction to provide liquidity to stockholders on any certain date or at all. As a result, you should purchase shares of our common stock only as a long-term investment.

You may not have the opportunity to evaluate our investments prior to purchasing shares of our common stock.

Although we will supplement this prospectus as we make or commit to make material acquisitions of properties and other real estate-related assets, you will not be able to evaluate the economic merits, transaction terms or other financial or operational data concerning our future investments prior to purchasing shares of our common stock. You must rely on our advisor and our board of directors to implement our investment policies, to evaluate our investment opportunities and to structure the terms of our investments.

This is a “best efforts” offering and the number and type of investments we make will depend on the proceeds raised in this offering. In the event we raise substantially less than the maximum offering amount, we will make fewer investments, resulting in a less diversified portfolio of investments in terms of number, amount and location.

This offering is being made on a “best efforts” basis, which means our managing dealer and participating brokers are only required to use their best efforts to sell shares of our common stock and have no firm commitment or obligation to purchase any of our shares. We are not required to sell the full amount offered in this prospectus. If the total proceeds from the offering are substantially less than the maximum offering amount, we will make fewer

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investments, resulting in less diversification in terms of the number of investments owned, the geographic regions in which our real property investments are located and the types of investments that we make. A lack of diversification would increase the likelihood that any single investment’s performance would materially affect our overall investment performance. Your investment in our shares will be subject to greater risk to the extent that we have limited diversification in our portfolio of investments. Additionally, our inability to raise substantial funds would increase our fixed operating expenses as a percentage of gross income.

There can be no assurance that we will be able to achieve expected cash flows necessary to initially pay or maintain distributions at any particular level, or that distributions will increase over time.

There are many factors that can affect the availability and timing of cash distributions to stockholders. Distributions generally will be based upon such factors as the amount of cash available or anticipated to be available from real estate investments and investments in real estate-related securities, mortgage or other loans and assets, current and projected cash requirements and tax considerations. Because we may receive income from interest or rents at various times during our fiscal year, distributions paid may not reflect our income earned in that particular distribution period. The amount of cash available for distributions will be affected by many factors, such as our ability to make acquisitions as offering proceeds become available, the income from those investments and yields on securities of other real estate programs that we invest in, as well as our operating expense levels and many other variables. Actual cash available for distribution may vary substantially from estimates. We cannot assure you that:

Our actual results may differ significantly from the assumptions used by our board of directors in establishing the distribution rates to be paid on our shares.

Many of the factors that can affect the availability and timing of cash distributions to stockholders are beyond our control, and a change in any one factor could adversely affect our ability to pay distributions. For instance:

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In addition, subject to the applicable REIT rules, our board of directors, in its discretion, may retain any portion of our cash on hand or use offering proceeds for capital needs and other corporate purposes. We cannot assure you that we will generate or have sufficient cash available to pay distributions to you, to continue paying distributions to you at any specified level, or that distributions we make may not be decreased or be eliminated in the future.

We may pay distributions from sources other than our cash flow from operations or funds from operations.

We expect to generate little, if any, cash flow from operations or funds from operations until we make substantial investments. Accordingly, until such time as we are generating operating cash flow or funds from operations, we may determine to discontinue distributions or to pay all or a portion of our distributions from sources other than net operating cash flows, such as cash flows generated from financing activities, a component of which may include the proceeds of this offering, and borrowings, whether secured by our assets or unsecured. We have not established any limit on the extent to which we may use borrowings or proceeds of this offering to pay distributions. To the extent we use sources of cash flow other than cash flow from operations or funds from operations to pay distributions, we will have less capital available to invest in properties and other real estate-related assets, the book value per share may decline, and there will be no assurance that we will be able to sustain distributions at that level. Further, distributions that exceed cash flow from operations or funds from operations may not be sustainable. If offering proceeds are used to fund distributions, earlier investors may benefit from the investments made with funds raised later in the offering, while later investors may not benefit from all of the net offering proceeds raised from earlier investors.

Company Related Risks

We and our advisor have limited operating histories and the prior performance of real estate investment programs sponsored by CNL or its affiliates may not be indicative of our future results.

We and our advisor have limited operating histories. Prior to October 8, 2010, the date our operations commenced, we had no previous performance history. You should not rely upon the past performance of other real estate investment programs sponsored by CNL or its affiliates to predict our future results. You should consider our prospects in light of the risks, uncertainties and difficulties frequently encountered by companies that are, like us, in their early stage of development. To be successful, our advisor must, among other things:

There can be no assurance that our advisor will succeed in achieving these goals.

Because we rely on affiliates of CNL for advisory, property management and managing dealer services, if these affiliates or their executive officers and other key personnel are unable to meet their obligations to us, we may be required to find alternative providers of these services, which could disrupt our business.

CNL, through one or more of its affiliates or subsidiaries, owns and controls our advisor and our property manager as well as one of the sub-advisors and sub-property managers. In addition, CNL, through a subsidiary, owns and controls CNL Securities Corp., the managing dealer of this offering. In the event that any of these affiliates or related parties are unable to meet their obligations to us, we might be required to find alternative service providers, which could disrupt our business by causing delays and/or increasing our costs.

Further, our success depends to a significant degree upon the continued contributions of certain executive officers and other key personnel of our advisor, its affiliates and related parties, each of whom would be difficult to replace. We do not have employment agreements with our executive officers, and we cannot guarantee that they will remain affiliated with us or our advisor. Although several of our executive officers and other key employees of affiliates of our advisor, including Andrew A. Hyltin and Steven D. Shackelford, have entered into employment agreements with affiliates of our advisor, these agreements are terminable at will, and we cannot guarantee that such

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persons will remain employed by our advisor or its affiliates. We do not maintain key person life insurance on any of our executive officers.

We may suffer from delays in selecting and/or acquiring suitable properties.

Even if we are successful in raising sufficient capital, we may experience delays in deploying our capital into assets or in realizing a return on the capital we invest. We could suffer from delays in locating suitable investments as a result of competition in the relevant market, regulatory requirements and our reliance on our advisor, its affiliates and related parties at times when management of our advisor, its affiliates and related parties are simultaneously seeking to locate suitable investments for other real estate investment programs sponsored by CNL, some of which have investment objectives and employ investment strategies that are similar to ours.

If we are unable to invest our offering proceeds in real estate assets in a timely manner, we may invest the proceeds of this offering in short-term, investment-grade securities. These securities typically yield less than investments in commercial real estate. The proceeds of such short-term investments may also be used to pay expenses of our advisor, property manager and other affiliates and related parties in connection with acquiring real estate and real estate-related assets.

Stockholders have limited control over changes in our policies and operations.

Our board of directors determines our investment policies, including our policies regarding financing, growth, debt capitalization, REIT qualification and distributions. Our board of directors may amend or revise these and other policies without a vote of our stockholders. Under our articles of incorporation and Maryland general corporation law, our stockholders currently have a right to vote only on the following matters:

All other matters are subject to the discretion of our board of directors. In addition, our board of directors has the authority to amend, without stockholder approval, the terms of both our advisory agreement and our property management agreement, which, in either case, could result in less favorable terms to our investors.

We may be restricted in our ability to replace our property manager under certain circumstances.

Our ability to replace our property manager may be limited. Under the terms of our property management agreement, we may terminate the agreement (i) in the event of our property manager’s voluntary or involuntary bankruptcy or a similar insolvency event or (ii) for “cause.” In this case, “cause” means a material breach of the property management agreement of any nature by the property manager relating to all or substantially all of the

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properties being managed under the agreement that is not cured within 30 days after notice to the property manager. We may amend the property management agreement from time to time to remove a particular property from the pool of properties managed by our property manager (i) if the property is sold to a bona fide unaffiliated purchaser, or (ii) for “cause.” In this case, “cause” means a material breach of the property management agreement of any nature by the property manager relating to that particular property, that is not cured within 30 days after notice to the property manager. Our board of directors may find the performance of our property manager to be unsatisfactory. However, unsatisfactory performance by the property manager may not constitute “cause.” As a result, we may be unable to terminate the property management agreement even if our board concludes that doing so is in our best interest.

Our stockholders may experience dilution if we issue additional shares.

Future issuances of common stock will reduce the percentage of our shares owned by investors purchasing shares in this offering who do not participate in future stock issuances. Stockholders will not be entitled to vote on whether or not we issue additional shares. In addition, depending on the terms and pricing of an additional offering of our shares and the value of our properties, our stockholders may experience dilution in both the book value and fair value of their shares. Further, our board could authorize the issuance of stock with terms and conditions that could subordinate the rights of the holders of our current common stock or have the effect of delaying, deferring or preventing a change in control in us, including an extraordinary transaction (such as a merger, tender offer or sale of all or substantially all of our assets) that might provide a premium price for our stockholders.

Your investment return may be reduced if we are required to register as an investment company under the Investment Company Act.

We are not registered, and we do not intend to register, or have any of our subsidiaries register, as an investment company under the Investment Company Act. If we become obligated to register us or any of our subsidiaries as an investment company, the registered entity would have to comply with a variety of substantive requirements under the Investment Company Act imposing, among other things:

We intend to engage primarily in the business of acquiring real property, as well as making mortgage loans and other loans secured by interests in real estate and making other real estate-related investments. We intend to conduct our operations, directly and through wholly or majority-owned subsidiaries, so that we and each of our subsidiaries are not required to register as an investment company under the Investment Company Act. Under Section 3(a)(1)(A) of the Investment Company Act, a company will be an “investment company” only if it is, or holds itself out as being, engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities. Under Section 3(a)(1)(C) of the Investment Company Act, a company is deemed to be an “investment company” if it is engaged, or proposes to engage, in the business of investing, reinvesting, owning, holding or trading in securities and owns or proposes to acquire “investment securities” having a value exceeding 40% of the value of its total assets on an unconsolidated basis, which we refer to as the “40% test.”

We believe that we and most, if not all, of our wholly and majority-owned subsidiaries will not be considered investment companies under either Section 3(a)(1)(A) or Section 3(a)(1)(C) of the Investment Company Act. In the event that we or any of our wholly or majority-owned subsidiaries would ever inadvertently fall within one of the definitions of “investment company,” we intend to rely on the exception provided by Section 3(c)(5)(C) of the Investment Company Act.

In order to qualify for the exception under Section 3(c)(5)(C) of the Investment Company Act, the SEC staff generally requires a company to maintain at least 55% of its assets directly in qualifying assets, at least 25% of its assets are permitted to be comprised of additional qualifying assets or a broader category of assets that we refer to as “real estate-related assets” under the Investment Company Act, and no more than 20% of the entity’s assets be

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comprised of miscellaneous assets. Mortgage-backed securities may or may not constitute such qualifying assets, depending on the characteristics of the mortgage-backed securities, including the rights that we have with respect to the underlying loans. Our ownership of mortgage-related assets, including mortgage-backed securities, therefore, is limited by provisions of the Investment Company Act and SEC staff interpretations. See “Investment Objectives and Policies — Investment Company Act Considerations.”

The method we use to classify our assets for purposes of the Investment Company Act will be based principally upon no-action positions taken by the SEC staff in the past. These no-action positions were issued in accordance with factual situations that may be substantially different from the factual situations we may face, and a number of these no-action positions were issued more than ten years ago. No assurance can be given that the SEC staff will concur with our classification of our assets. In addition, the SEC staff may, in the future, issue further guidance that may require us to re-classify our assets for purposes of qualifying for an exception under Section 3(c)(5)(C) of the Investment Company Act. If we are required to re-classify our assets, we may no longer be in compliance with the exception from the definition of an “investment company” provided under Section 3(c)(5)(C) of the Investment Company Act.

A change in the value of any of our assets could cause us to fall within the definition of “investment company” and negatively affect our ability to avoid regulation under the Investment Company Act. To avoid being required to register as an investment company under the Investment Company Act, we and our wholly and majority-owned subsidiaries may be unable to sell assets we would otherwise want to sell and may need to sell assets we would otherwise wish to retain. In addition, we may have to acquire additional income- or loss-generating assets that we might not otherwise have acquired or may have to forgo opportunities to acquire interests in companies that we would otherwise want to acquire and would be important to our investment strategy.

If we were required to register as an investment company but failed to do so, we would be prohibited from engaging in our business, and criminal and civil actions could be brought against us. In addition, our contracts would be unenforceable unless a court required enforcement, and a court could appoint a receiver to take control of us and liquidate our business.

We are uncertain of our sources for funding of future capital needs.

Although we have a credit facility available to us, if our capital resources, or those of our advisor (to the extent it advances amounts to us or on our behalf), are insufficient to support our operations, we will not achieve our investment objectives.

We will establish capital reserves on a property-by-property basis, as we deem appropriate to pay operating expenses to the extent that the property does not generate operating cash flow to fund anticipated capital improvements. If we do not have enough capital reserves to supply needed funds for capital improvements throughout the life of our investment in a property and there is insufficient cash available from our operations or from other sources, we may be required to defer necessary improvements to a property. This may result in decreased cash flow and reductions in property values. If our reserves are insufficient to meet our cash needs, we may have to obtain financing from either affiliated or unaffiliated sources to fund our cash requirements. Additionally, due to the volatility and uncertainty experienced in recent years by domestic and international financial markets (most visibly within, but not exclusive to, the “subprime” mortgage lending sector of the credit market), liquidity has tightened in financial markets, including the investment grade debt and equity capital markets. Consequently, there is greater uncertainty regarding our ability to access credit markets in order to obtain financing on reasonable terms or at all. Although we expect to use leverage with respect to our investments and may undertake subsequent offerings of our capital stock, there can be no guarantee that these sources will be available to use. Although currently we have a revolving line of credit facility available to us, we cannot assure you that the line of credit facility or any other such source of funding will be available to us for potential capital needs in the future.

Risks Related to Conflicts of Interest and Our Relationships with Our Advisor, Its Affiliates and Related Parties

We are subject to conflicts of interest arising out of our relationships with our advisor and its affiliates and related parties, including the material conflicts discussed below. The “Conflicts of Interest” section of this prospectus provides a more detailed discussion of the conflicts of interest between us and our advisor and its affiliates and related parties and our policies to reduce certain potential conflicts.

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Our advisor, property manager and other entities affiliated with CNL that conduct our day-to-day operations will face competing demands on their time.

We rely upon our advisor, including its investment committee, our property manager and the executive officers and employees of entities affiliated with CNL, to conduct our day-to-day operations. Certain of these persons also conduct the day-to-day operations of other real estate investment programs sponsored by CNL, including Global Growth Trust, Inc., and may have other business interests as well. One of our directors, James M. Seneff, Jr. is also a director of other real estate investment programs sponsored by CNL, including Global Growth Trust, Inc., and Matthew S. Banks, one of our directors, is also on the board of directors of Global Growth Trust, Inc. We have in common with Global Growth Trust, Inc. the same executive officers. Additionally, our advisor and the advisor to Global Growth Trust, Inc. have in common the same managers, executive officers and investment committee members. We currently anticipate that our executive officers and the executive officers of our advisor that are common to both our advisor, and the advisor of Global Growth Trust, Inc., will, on average, devote approximately one-third of their time to our business and operations, approximately one-third of their time to the business and operations of Global Growth Trust, Inc., and the balance of their time will be devoted to other real estate programs of CNL, as applicable. It is also intended that the managers of our advisor (who are not also executive officers of our advisor) and the investment committee members of our advisor will devote the time necessary to fulfill their respective duties to us and our advisor. However, because these persons have competing interests on their time and resources, they may find it difficult to allocate their time between our business and these other activities. During times of intense activity in other programs and ventures, they may devote less time and resources to our business than is necessary or appropriate.

Other real estate investment programs sponsored by CNL use certain investment strategies that are similar to ours, and our advisor and its affiliates, and their and our executive officers, will face conflicts of interest relating to the purchase and leasing of properties and other investments, and such conflicts may not be resolved in our favor.

One or more real estate investment programs sponsored by CNL, including Global Growth Trust, Inc., may be seeking to invest in properties and other real estate-related investments similar to the assets we are seeking to acquire. CNL has three other public active real estate investment programs that focus on commercial real estate, one of which, Global Growth Trust, Inc., also has a global investment strategy. As a result, we may be buying properties and other real estate-related investments at the same time as other programs sponsored by CNL that are also managed by the same persons who are executive officers and employees of our advisor or its affiliates. We cannot assure you that properties we want to acquire will be allocated to us in this situation. CNL is not required to allocate any prospective investment to our advisor for review. Our advisor may choose a property that provides lower returns to us than a property allocated to another program sponsored by CNL. We also may be precluded from certain investment opportunities. In addition, we may acquire properties in geographic areas where other programs sponsored by CNL own properties. If one of such other programs sponsored by CNL attracts a tenant that we are competing for, we could suffer a loss of revenue due to delays in locating another suitable tenant. You will not have the opportunity to evaluate the manner in which these conflicts of interest are resolved before or after making your investment.

The sub-advisors engaged by our advisor to assist in indentifying and acquiring international investments will have competing demands on their time and are not obligated to offer any investments to us.

We may compete with other existing and/or future programs sponsored by affiliates of the MREAS Sub-Advisor and the MGPA Sub-Advisor for the acquisition of commercial properties and other investments. The representatives of the MREAS Sub-Advisor and the MGPA Sub-Advisor who are members of the advisor’s investment committee, who are also executive officers and employees of other Macquarie or MGPA entities, and who are also representatives of sub-advisors to Global Growth Trust, Inc., must determine if their respective affiliates’ sponsored programs or our Company, or Global Growth Trust, Inc., should invest in a real property or other asset, or enter into a joint venture or co-ownership arrangement for the acquisition of specific investments. Although we expect that the MREAS Sub-Advisor and the MGPA Sub-Advisor will locate and present investment opportunities to us, neither they nor their respective affiliates are required to present any investment opportunity to us.

Our advisor and its affiliates, including all of our executive officers and our affiliated directors, will face conflicts of interest as a result of their compensation arrangements with us, which could result in actions that are not in the best interest of our stockholders.

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We may pay our advisor and its affiliates, including its sub-advisors, the managing dealer of this offering and our property manager, substantial fees. These fees could influence their advice to us, as well as the judgment of affiliates of our advisor performing services for us. Among other matters, these compensation arrangements could affect their judgment with respect to:

The fees our advisor receives in connection with transactions involving the purchase and management of our assets are not necessarily based on the quality of the investment or the quality of the services rendered to us. The basis upon which fees are calculated may influence our advisor to recommend riskier transactions to us.

None of the agreements with our advisor, property manager or any other affiliates and related parties were negotiated at arm’s length.

Agreements with our advisor, property manager or any other affiliates and related parties may contain terms that are not in our best interest and would not otherwise apply if we entered into agreements negotiated at arm’s length with third parties.

Because the managing dealer is an affiliate of our advisor, investors will not have the benefit of an independent review of us or this prospectus, which are customarily performed in underwritten offerings.

Our managing dealer, CNL Securities Corp., is an affiliate of CNL and did not make an independent review of us or the offering. Accordingly, unless your participating broker determines to conduct such a review, you will not have the benefit of an independent review of the terms of this offering.

If we internalize our management functions, your interest in us could be diluted, we could incur other significant costs associated with being self-managed and may not be able to retain or replace key personnel; and we may have increased exposure to litigation as a result of internalizing our management functions.

We may internalize management functions provided by our advisor, our property manager and their respective affiliates. Our board of directors may decide in the future to acquire assets and personnel from our advisor or its affiliates for consideration that would be negotiated at that time. There can be no assurances that we will be successful in retaining our advisor’s key personnel in the event of an internalization transaction. In the event we were

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to acquire our advisor or our property manager, we cannot be sure of the form or amount of consideration or other terms relating to any such acquisition, which could take many forms, including cash payments, promissory notes and shares of our stock. The payment of such consideration could reduce the percentage of our shares owned by persons who purchase shares in this offering and could reduce the net income per share and funds from operations per share attributable to your investment.

In addition, we may issue equity awards to officers, employees and consultants, which awards would decrease net income and funds from operations. We cannot reasonably estimate the amount of fees to our advisor, property manager and other affiliates we would save, and the costs we would incur, if we acquired these entities. If the expenses we assume as a result of an internalization are higher than the expenses we avoid paying to our advisor, property manager and other affiliates, our net income per share and funds from operations per share would be lower than they otherwise would have been had we not acquired these entities.

Additionally, if we internalize our management functions, we could have difficulty integrating these functions. Currently, the officers and employees of our advisor, its affiliates and related parties perform asset management and general and administrative functions, including accounting and financial reporting, for multiple entities. We may fail to properly identify the appropriate mix of personnel and capital needs to operate as a stand-alone entity. An inability to manage an internalization transaction effectively could result in our incurring additional costs and divert our management’s attention from effectively managing our properties and overseeing other real estate-related assets.

In recent years, internalization transactions have been the subject of stockholder litigation. Stockholder litigation can be costly and time-consuming, and there can be no assurance that any litigation expenses we might incur would not be significant or that the outcome of litigation would be favorable to us. Any amounts we are required to expend defending any such litigation will reduce the amount of funds available for investment by us in properties or other investments.

Risks Related to Our Business

The returns we earn on our real estate assets will be affected by economic and regulatory changes that have an adverse impact on the real estate market in general, and we cannot assure you that we will be profitable or that we will realize growth in the value of our real estate properties.

The returns we earn on our real estate assets will be impacted by risks generally incident to the ownership of real estate, including:

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We may be limited in our ability to vary our portfolio in response to changes in economic, market or other conditions, including by restrictions on transfer imposed by our limited partners, if any, in our operating partnership or lenders. Additionally, the return on our real estate assets also may be affected by a continued or exacerbated general economic slowdown experienced by the countries in which we invest, as a whole or by the local economies where our properties and the properties underlying our other real estate-related investments are located, including:

International investments create additional risks.

We anticipate that up to 60% of our investments may be in assets located in jurisdictions outside the United States. Foreign investments are subject to many of the same risks as domestically located properties as well as additional risks such as:

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We will depend on tenants for the majority of our revenue from real property investments, and lease terminations or the exercise of any co-tenancy rights could have an adverse effect.

Defaults on lease payment obligations by our tenants would cause us to lose the revenue associated with that lease and require us to find an alternative source of revenue to pay our mortgage indebtedness and prevent a foreclosure action. If a tenant defaults or declares bankruptcy, we may experience delays in enforcing our rights as a landlord and may be unable to collect sums due under related leases. If a tenant, or a guarantor of a tenant’s lease obligations, is subject to a bankruptcy proceeding, our efforts to collect pre-bankruptcy debts from these entities or their properties may be barred. If a lease is rejected by a tenant in bankruptcy, we may not be entitled to any further payments under the lease. In addition, if a tenant at one of our single-user facilities, which are properties designed or built primarily for a particular tenant or a specific type of use, fails to renew its lease or defaults on its lease obligations, we may not be able to readily market a single-user facility to a new tenant without making substantial capital improvements or incurring other significant re-leasing costs.

Further, with respect to any retail properties we may acquire, we may enter into leases containing co-tenancy provisions. Co-tenancy provisions may allow a tenant to exercise certain rights if, among other things, another tenant fails to open for business, delays its opening or ceases to operate, or if a percentage of the property’s gross leasable space or a particular portion of the property is not leased or subsequently becomes vacant. A tenant exercising co-tenancy rights may be able to abate minimum rent, reduce its share or the amount of its payment of common area operating expenses and property taxes or cancel its lease.

We may be restricted from re-leasing space.

We may be restricted by the terms of certain leases from leasing space to entities that compete with other tenants. Certain leases may restrict the types of tenants or businesses that we may lease to. For example, many retail leases provide tenants the exclusive right to sell certain types of goods or services within the retail center, limiting the number and types of tenants we may lease to within the center. These limits may cause us to spend more time and, potentially, money leasing vacant space or space subject to expiring leases.

Increasing vacancy rates for certain classes of real estate assets resulting from disruptions in the financial markets and deteriorating economic conditions in recent years could adversely affect the value of assets we acquire in such classes.

We depend upon tenants for a majority of our revenue from real property investments. Disruptions in the financial markets and deteriorating economic conditions in recent years have resulted in a trend toward increasing vacancy rates for certain classes of commercial property, including office and retail properties, due to increased tenant delinquencies and/or defaults under leases, generally lower demand for rentable space, as well as potential oversupply of rentable space. Business failures and downsizings have led to reduced demand for office space and reduced consumer demand for retail products and services, has led to retail business failures or downsizings and reducing demand for retail space. Reduced demand for commercial properties such as retail and office space could require us to increase concessions, tenant improvement expenditures or reduce rental rates to maintain occupancies beyond those anticipated at the time we acquire the property. The continuation of disruptions in the financial markets and deteriorating economic conditions could impact certain of the real estate we may acquire and such real estate could experience higher levels of vacancy than anticipated at the time of our acquisition of such real estate. The value of our real estate investments could decrease below the amounts we paid for the investments. Revenues from properties could decrease due to lower occupancy rates, reduced rental rates and potential increases in uncollectible rent. We will incur expenses, such as for maintenance costs, insurances costs and property taxes, even though a property is vacant. The longer the period of significant vacancies for a property, the greater the potential negative impact on our revenues and results of operations.

Our co-venture partners or other partners in co-ownership arrangements could take actions that decrease the value of an investment to us and lower your overall return.

We may enter into joint ventures or other co-ownership arrangements with other real estate investment programs sponsored by CNL or with other third parties. We may also purchase properties in joint ventures or in partnerships or other co-ownership arrangements with the sellers of the properties, affiliates of the sellers, developers or other persons. Such investments may involve risks not otherwise present with other forms of real estate investment, including, for example:

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Uninsured losses relating to real property or excessively expensive premiums for insurance coverage may adversely affect your returns.

The nature of the activities at certain properties we may acquire will expose us and our tenants or operators to potential liability for personal injuries and, in certain instances, property damage claims. In addition, there are types of losses, generally catastrophic in nature, such as losses due to wars, acts of terrorism, earthquakes, floods, hurricanes, pollution or environmental matters that may be uninsurable or not economical to insure, or may be insured subject to limitations such as large deductibles or co-payments. Insurance risks associated with potential terrorist acts could sharply increase the premiums we pay for coverage against property and casualty claims. Mortgage lenders generally require property owners to purchase specific coverage insuring against terrorism as a condition for providing mortgage, bridge or mezzanine loans. These policies may or may not be available at a reasonable cost, if at all, which could inhibit our ability to finance or refinance our properties. In such instances, we may be required to provide other financial support, either through financial assurances or self-insurance, to cover potential losses. We cannot assure you that we will have adequate coverage for such losses. In the event that any of our properties incurs a casualty loss that is not fully covered by insurance, the value of the particular asset will likely be reduced by the uninsured loss. In addition, we cannot assure you that we will be able to fund any uninsured losses.

We compete to acquire properties with third parties that may be better capitalized than we are.

We compete with many other entities engaged in real estate investment activities, including individuals, corporations, bank and insurance company investment accounts, other REITs, real estate limited partnerships and other entities engaged in real estate investment activities, many of which have greater resources than us. Larger real estate programs may enjoy significant competitive advantages that result from, among other things, a lower cost of capital and enhanced operating efficiencies. We may not be able to purchase properties at prices that allow us to earn returns consistent with our investment objectives, if at all.

Certain types of the properties we may acquire, including office, retail and industrial properties, do not have significant barriers to entry. Consequently, the development of new office, retail and industrial properties could outpace demand. Increased competition for tenants for these types of properties also could require a property to undertake unbudgeted capital improvements or to lower its rental rates in order to obtain or retain tenants.

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Failure to succeed in new markets or in new property classes may have adverse consequences on our performance.

We may from time to time make acquisitions outside of property classes that have been our focus. The experience of our advisor’s management in existing markets in owning and operating certain classes of property does not ensure that we will be able to operate successfully in new markets, should we choose to enter them, or that we will be successful in new property classes. We may be exposed to a variety of risks if we choose to enter new markets, including an inability to accurately evaluate local market conditions, identify appropriate acquisition opportunities or hire and retain key personnel. In addition, we may abandon opportunities to enter new markets or acquire new classes of property that we have begun to explore for any reason and may, as a result, fail to recover expenses already incurred.

Acquiring or attempting to acquire multiple properties in a single transaction may adversely affect our operations.

From time to time, we may attempt to acquire multiple properties in a single transaction. Portfolio acquisitions are more complex and expensive than single property acquisitions, and the risk that a multiple-property acquisition does not close may be greater than in a single-property acquisition. Portfolio acquisitions may also result in us owning investments in geographically dispersed markets, resulting in additional demands on our advisor and property manager in managing the properties in the portfolio. In addition, a seller may require that a group of properties be purchased as a package even though we may not want to purchase one or more properties in the portfolio. In these situations, if we are unable to identify another person or entity to acquire the unwanted properties, we may be required to operate or attempt to dispose of these properties. Dispositions of properties outside of the safe harbor rules under the Internal Revenue Code could cause us to pay a tax equal to the entire gain if the disposition is deemed a prohibited transaction. We also may be required to accumulate a large amount of cash to fund such acquisitions. We would expect the returns that we earn on such cash to be less than the returns on real property. Therefore, acquiring multiple properties in a single transaction may reduce the overall yield on our portfolio.

We will not own or control the land in any ground lease properties that we may acquire.

We may acquire property on land owned by a governmental entity or other third party, while we own a leasehold, permit or similar interest. This means that while we have a right to use the property, we do not retain fee ownership in the underlying land. Accordingly, we will have no economic interest in the land or building at the expiration of the ground lease or permit. As a result, we will not share in any increase in value of the land associated with the underlying property. Further, because we do not control the underlying land, the lessor could take certain actions to disrupt our rights in the property or our tenants’ operation of the properties or, in the case of a governmental entity, take the property in an eminent domain proceeding.

We may fail to integrate acquired properties and related personnel.

To grow successfully, our advisor and property manager must apply their experience to a larger number of properties. In addition, our advisor’s sub-advisors and our property manager’s sub-property managers must be able to integrate new management and qualified operations personnel as our investments grow in size and complexity. These entities may not be successful in doing so.

If we sell properties by providing financing to purchasers, we will bear the risk of default by the purchaser.

In some instances we may sell a property by providing financing to the purchaser. In doing so, however, we will bear the risk that the purchaser defaults on its obligation. There are no limits or restrictions on our ability to accept purchase money obligations. If we receive promissory notes or other property in lieu of cash from property sales, the distribution of the proceeds of sales to our stockholders, or our reinvestment in other assets, will be delayed until the promissory notes or other property are actually paid, sold, refinanced or otherwise disposed of. In some cases, we may receive initial down payments in cash and other property in the year of sale in an amount less than the selling price and subsequent payments will be spread over a number of years.

The costs of compliance with environmental laws and regulations may adversely affect our income and the cash available for distributions.

All real property and the operations conducted on real property are subject to federal, state and local laws and regulations (including those of foreign jurisdictions) relating to environmental protection and human health and

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safety. These laws and regulations generally govern wastewater discharges, air emissions, the operation and removal of underground and above-ground storage tanks, the use, storage, treatment, transportation and disposal of solid and hazardous materials, and the remediation of contamination associated with disposals. Some of these laws and regulations may impose joint and several liability on tenants, owners or operators for the costs of investigation or remediation of contaminated properties, regardless of fault or the legality of the original disposal. These laws and regulations often impose liability whether or not the owner or operator knew of, or was responsible for, the presence of the hazardous or toxic substances. The costs of removing or remediating could be substantial. In addition, the presence of these substances, or the failure to properly remediate these substances, may adversely affect our ability to sell or rent a property or to use the property as collateral for borrowing.

Environmental laws and regulations also may impose restrictions on the manner in which property may be used or businesses may be operated, and these restrictions may require substantial expenditures. Environmental laws and regulations provide for sanctions in the event of noncompliance and may be enforced by governmental agencies or, in certain circumstances, by private parties. Third parties may seek recovery from owners or operators of real properties for personal injury or property damage associated with exposure to released hazardous substances. Compliance with new or more stringent laws or regulations or stricter interpretation of existing laws may require material expenditures by us. We cannot assure you that future laws, ordinances or regulations will not impose any material environmental liability on us or that the environmental condition of our properties will not be affected by the manner in which tenants operate their businesses, the existing condition of the land, operations in the vicinity of the properties such as the presence of underground storage tanks, or the activities of unrelated third parties.

We may incur significant costs to comply with the Americans with Disabilities Act or similar laws.

Our properties will generally be subject to the Americans with Disabilities Act of 1990, as amended (or “Disabilities Act”), or similar laws of foreign jurisdictions. Under the Disabilities Act, all places of public accommodation are required to comply with federal requirements related to access and use by disabled persons. The Disabilities Act has separate compliance requirements for “public accommodations” and “commercial facilities” that generally require that buildings and services be made accessible and available to people with disabilities. In addition, with respect to any apartment properties located in the United States, we also must comply with the Fair Housing Amendment Act of 1988, or FHAA, which requires that apartment communities first occupied after March 13, 1991 be accessible to handicapped residents and visitors.

The requirements of the Disabilities Act or the FHAA could require removal of access barriers and could result in the imposition of injunctive relief, monetary penalties or, in some cases, an award of damages. We will attempt to acquire properties that comply with the Disabilities Act, the FHAA or similar laws of foreign jurisdictions or place the burden on the seller or other third party, such as a tenant, to ensure compliance with these laws. However, we cannot assure you that we will be able to acquire properties or allocate responsibilities in this manner. We may incur significant costs to comply with these laws.

Property tax increases may reduce the income from our properties.

The amount we pay in property taxes may increase from time to time due to rising real estate values and adjustments in assessments. Increases in real estate values or assessment rate adjustments will result in higher taxes. We may not be able to pass these increases on to our tenants.

Any healthcare facilities that we own will be subject to additional federal, state and local laws and regulations.

Healthcare facilities are subject to additional federal, state and local laws and regulations that do not impact other property types. These laws and regulations are subject to frequent changes and, in certain circumstances, may be applied retroactively. The ultimate timing or effect of these changes cannot be predicted. These changes may have a dramatic effect on the entities that operate these facilities and hence their ability to meet their obligations to us. In particular:

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We will depend on third parties to operate certain facilities.

In order to maintain qualification as a REIT, there are certain properties that we are not permitted to manage or operate. For example, we will generally not be able to operate any healthcare property or lodging property or participate in the decisions affecting the daily operations of those facilities. Thus, if we acquire any of these property types, we will either lease the property to a third party or enter into an arm’s-length lease with a TRS which will, in turn, retain third parties to operate these properties.

We will not have the authority to dictate how a facility is operated or to direct any particular aspect of a facility’s daily operation. Thus, even if we believe a healthcare or lodging facility is being operated inefficiently, we may not be able to force the management company to change its method of operation. We can only seek legal redress if a management company violates the terms of our management agreement with them. Terminating a management agreement may require us to pay substantial termination fees and could significantly disrupt operations.

Short-term leases may expose us to the effects of declining market rent.

Certain types of the properties we may acquire typically have short-term leases. For example, leases in multi-family apartment communities and student housing properties generally are for a term of one year or less. There is no assurance that we will be able to renew these leases as they expire or attract replacement tenants on comparable terms, if at all.

We may be exposed to the annual leasing cycle of student housing properties, changing university admission and housing policies, and other risks inherent in the student housing industry.

Student housing properties must be almost entirely re-leased each year, exposing our operators to increased leasing risk. These facilities are highly dependent on the effectiveness of their marketing and leasing efforts and personnel during the late summer and early fall re-leasing season. Changes in university admission policies can also adversely affect student housing properties, such as requirements that freshman, or other classes of students, live in a university-owned facility, resulting in lower occupancy rates for other facilities. Additionally, many colleges and universities own and operate their own competing on-campus housing, offering better proximity to the campus and on-campus facilities. Colleges and universities can generally avoid real estate taxes and borrow funds at lower interest rates than us, thereby enabling them to offer lower rental rates than competing facilities and negatively impacting our property occupancy or rental rates. Federal and state requirements to publish reports of crime or other negative publicity regarding the safety of the students residing on, or near, our student housing properties may have an adverse effect on the operations of these types of properties.

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Governmental regulation may increase the costs of acquiring and operating properties.

There are various local, state and federal fire, health, life-safety and similar regulations that we may be required to comply with, and that may subject us to liability in the form of fines or damages for noncompliance. Any foreign investments we make will be subject to similar laws in the jurisdictions where they are located. Complying, or failure to comply, with these laws or regulations could increase the cost of acquiring or operating properties.

Further, there can be no assurance that new applications of laws, regulations and policies, or changes in such laws, regulations and policies, will not occur in a manner that could have a detrimental effect on the properties we owned prior to the change, which could result in us incurring added costs to comply or maintain licenses and permits.

Financing Related Risks

Mortgage indebtedness and other borrowings will increase our business risks.

We are permitted to acquire real properties and other real estate-related investments, including entity acquisitions, by assuming either existing financing secured by the asset or by borrowing new funds. In addition, we may incur or increase our mortgage debt by obtaining loans secured by some or all of our assets to obtain funds to acquire additional investments or to pay distributions to our stockholders. If necessary, we also may borrow funds to satisfy the requirement that we distribute at least 90% of our annual “REIT taxable income,” or otherwise as is necessary or advisable to assure that we maintain our qualification as a REIT for federal income tax purposes.

Although our articles of incorporation impose limits on our total indebtedness, there is no limit on the amount we may invest in any single property or other asset or on the amount we can borrow to purchase any individual property or other investment. Further, we may exceed the limits set forth in our articles if approved by a majority of our independent directors.

In addition to the limitations in our articles of incorporation, our board of directors has adopted a policy to generally limit our aggregate borrowings to not exceed approximately 75% of the aggregate value of our assets unless substantial justification exists that borrowing a greater amount is in our best interest. Our policy limitation, however, will not apply to individual real estate assets and will only apply once we have ceased raising capital under this or any subsequent primary offering prior to listing, and invested substantially all of our capital. As a result, we expect to borrow more than 75% of the contract purchase price of each real estate asset we acquire to the extent our board of directors determines that borrowing these amounts is reasonable. Principal and interest payments reduce cash that would otherwise be available for other purposes. Further, incurring mortgage debt increases the risk of loss because defaults on indebtedness secured by a property may result in foreclosure actions initiated by lenders and our loss of the property securing the loan that is in default. For tax purposes, a foreclosure is treated as a sale of the property for a purchase price equal to the outstanding balance of the debt secured by the mortgage. If the outstanding balance of the debt secured by the mortgage exceeds our tax basis in the property, we would recognize taxable income on foreclosure, but would not receive any cash proceeds. We also may provide full or partial guarantees to lenders of mortgage debt to the entities that own our properties. In this case, we will be responsible to the lender for satisfaction of the debt if it is not paid by the entity. If any mortgages contain cross-collateralization or cross-default provisions, there is a risk that more than one real property may be affected by a default.

The commercial mortgage-backed securities in which we may invest are subject to all of the risks of the underlying mortgage loans and the risks of the securitization process.

CMBS are securities that evidence interests in, or are secured by, a single commercial mortgage loan or a pool of commercial mortgage loans. Accordingly, these securities are subject to all of the risks of the underlying mortgage loans.

The value of CMBS may be adversely affected when payments on underlying mortgages do not occur as anticipated. The value of CMBS may also change due to shifts in the market’s perception of issuers and regulatory or tax changes adversely affecting the mortgage securities market as a whole. In addition, CMBS are subject to the credit risk associated with the performance of the underlying mortgage properties.

CMBS are also subject to several risks created through the securitization process. Generally, CMBS are issued classes similar to mortgage loans. To the extent that we invest in a subordinate class, we will be paid interest only to the extent that there are funds available after paying the senior class. To the extent the collateral pool includes

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delinquent loans, subordinate classes will likely not be fully paid. Subordinate CMBS are also subject to greater credit risk than those CMBS that are more highly rated. Further, the ratings assigned to any particular class of CMBS may prove to be inaccurate. Thus, any particular class of CMBS may be riskier and more volatile than the rating may suggest, all of which may cause the returns on any CMBS investment to be less than anticipated.

We do not have the right to foreclose on commercial mortgage loans underlying CMBS in which we invest since we will not directly own such underlying loans. Accordingly, we must rely on third parties to initiate and execute any foreclosure proceedings upon a default of such mortgage loans.

Non-investment grade CMBS are subject to an increased risk of loss.

We may invest in “non-investment grade” CMBS which have a higher risk of default than investment grade loans. Non-investment grade ratings for these loans typically result from the overall leverage of the loans, the lack of a strong operating history for the properties underlying the loans, the borrowers’ credit history, the properties’ underlying cash flow or other factors. If the borrowers in the underlying loans are unable to repay their loans at maturity, our revenues will decrease. If current economic trends impacting the real estate market continue, many borrowers underlying CMBS may have difficulty repaying the principal of their loans at maturity.

We may invest in the equity securities of CDOs and these investments may involve significant risks, including that CDO equity receives distributions from the CDO only if the CDO generates enough income to first pay the holders of its debt securities and its expenses.

We may invest in the equity securities of CDOs. A CDO entity is a special purpose vehicle that purchases collateral (such as real estate-related investments, bank loans or asset-backed securities) that is expected to generate a stream of interest or other income. The CDO issues various classes of securities that participate in that income stream, typically one or more classes of debt instruments and a class of equity securities. The equity is usually entitled to all of the income generated by the CDO after the CDO pays all of the interest due on the debt securities and its expenses. However, there will be little or no income available to the CDO equity if there are defaults by the obligors under the underlying collateral and those defaults exceed a certain amount. In that event, the value of our investment in CDO equity could decrease substantially. In addition, the equity securities of CDOs are generally illiquid, and because they represent a leveraged investment in the CDO’s assets, the value of the equity securities will generally have greater fluctuations than the values of the underlying collateral.

Instability in the credit market and real estate market could have a material adverse affect on our results of operations, financial condition and ability to pay distributions to you.

We may not be able to obtain financing for investments on terms and conditions acceptable to us, if at all. Domestic and international financial markets have, in recent years, experienced unusual volatility and uncertainty. If this volatility and uncertainty persists, our ability to borrow monies to finance the purchase of, or other activities related to, real estate assets will be significantly impacted. If we are unable to borrow monies on terms and conditions that we find acceptable, we likely will have to reduce the number of properties we can purchase, and the return on the properties we do purchase likely will be lower. In addition, if we pay fees to lock-in a favorable interest rate, falling interest rates or other factors could require us to forfeit these fees. Additionally, the reduction in equity and debt capital resulting from turmoil in the capital markets has resulted in fewer buyers seeking to acquire commercial properties leading to lower property values and the continuation of these conditions could adversely impact our timing and ability to sell our properties.

In addition to volatility in the credit markets, the real estate market is subject to fluctuation and can be impacted by factors such as general economic conditions, supply and demand, availability of financing and interest rates. To the extent we purchase real estate in an unstable market, we are subject to the risk that if the real estate market ceases to attract the same level of capital investment in the future that it attracts at the time of our purchases, or the number of parties seeking to acquire properties decreases, the value of our investments may not appreciate or may decrease significantly below the amount we pay for these investments.

Rising interest rates negatively affect our ability to acquire properties, pay existing debt obligations and refinance our properties.

We may be unable to refinance or sell properties secured by debt that is maturing on acceptable terms and conditions, if at all. This risk may be greater in the case of interest-only loans or balloon payment loans where no or

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little payments on the principal amount of the loan have been made. If interest rates are higher at the time we intend to refinance, we may not be able to refinance the properties at reasonable rates and our income could be reduced. In addition, we may incur indebtedness that bears interest at a variable rate. Increases in interest rates on variable rate loans would increase our interest costs, which could have an adverse effect on our operating cash flow. Increased interest rates either on refinancings of properties or on variable rate loans could increase the amount of our debt payments and reduce cash flow. In addition, if rising interest rates cause us to need additional capital to repay indebtedness, we may need to borrow more money or to liquidate one or more of our investments at inopportune times that may not permit realization of the maximum return on such investments.

Lenders may require us to comply with restrictive covenants.

In connection with obtaining financing, a lender could impose restrictions on us that affect our ability to incur additional debt and our distribution and operating policies. In general, we expect our loan agreements to restrict our ability to encumber or otherwise transfer our interest in the applicable property without the prior consent of the lender. Loan documents we enter into may contain other customary negative covenants that may limit our ability to further mortgage the property, discontinue insurance coverage, replace our advisor or impose other limitations.

To hedge against foreign exchange rate and interest rate fluctuations, we may use derivative financial instruments. Using derivative financial instruments may be costly and ineffective.

We may engage in hedging transactions to manage the risk of changes in interest rates, price changes or currency fluctuations with respect to borrowings made or to be made, or ordinary obligations incurred or to be incurred, by us. We may use derivative financial instruments for this purpose, secured by our assets and investments. Derivative instruments may include interest rate swap contracts, interest rate cap or floor contracts, futures or forward contracts, options or repurchase agreements. Our actual hedging decisions will be determined in light of the facts and circumstances existing at the time of the hedge and may differ from time to time.

To the extent that we use derivative financial instruments to hedge against exchange rate and interest rate fluctuations, we will be exposed to credit risk, basis risk and legal enforceability risks. In this context, credit risk is the failure of the counterparty to perform under the terms of the derivative contract. If the fair value of a derivative contract is positive, the counterparty owes us, which creates credit risk for us. Basis risk occurs when the index upon which the contract is based is more or less variable than the index upon which the hedged asset or liability is based, thereby making the hedge less effective. Finally, legal enforceability risks encompass general contractual risks, including the risk that the counterparty will breach the terms of, or fail to perform its obligations under, the derivative contract. We may be unable to manage these risks effectively.

In addition, The Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) mandates regulated, centralized clearing and trading environments for swap (hedging) agreements or, where clearing is unavailable, imposes collateral and capital requirements to protect counterparties and to discourage over-leveraging. There currently are limited enumerated exceptions to the clearing or collateral requirement. A swap is exempt from the clearing requirement (or the alternative collateral and capital requirement) if one of the counterparties is not a financial entity and is using the swap to hedge or mitigate its commercial risk, commonly known as an “end-user exception”. The Commission is devising rules to effect these provisions of the Dodd-Frank Act, including determining whether REITs and other investors are included within the “end-user exemption.” If REITs are determined not to be an end-user and we acquire derivative instruments, we will be required to retain in reserve a certain amount of capital that would otherwise be used for investments, which ultimately could negatively impact returns to our stockholders. Alternatively, if we determine that the collateral/capital requirements are too prohibitive and therefore we do not employ a hedging strategy, we will be at increased risk for foreign exchange and interest rate fluctuations.

We may not be able to successfully complete securitization transactions, which may hurt our ability to grow our business.

To the extent consistent with the REIT requirements, we may seek to securitize loans we originate or otherwise hold for investment. This could involve creating a special purpose vehicle, contributing a pool of our assets to the entity and selling certain debt interests of the entity on a non-recourse basis to purchasers (who we would expect to be willing to accept a lower rate of return to invest indirectly in investment grade loan pools). We would retain all or a portion of the equity in the securitized pool of portfolio investments. However, conditions in the capital markets may make the securitization of assets impractical even when we do have a sufficient pool of capital. The inability to

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securitize the loans we originate or otherwise hold for investment could impair our ability to recycle capital and, hence, grow our business. At the same time, the securitization of these investments might expose us to losses, as the residual portfolio investments in which we do not sell interests will tend to be riskier and more likely to generate losses.

The use of CDO financings with over-collateralization requirements may have a negative impact on our cash flow.

We expect that the terms of CDOs we may issue will generally provide that the principal amount of assets must exceed the principal balance of the related bonds by a certain amount, commonly referred to as “over-collateralization.” When we use the term “CDO” in this prospectus, we are referring to a collateralized debt obligation or an entity that issues such securities. We anticipate that the CDO terms will provide that, if certain delinquencies or losses exceed specified levels, which we will establish based on the analysis by the rating agencies (or any financial guaranty insurer) of the characteristics of the assets collateralizing the bonds, the required level of over-collateralization may be increased or may be prevented from decreasing as would otherwise be permitted had losses or delinquencies not exceeded those levels. Other tests (based on delinquency levels or other criteria) may restrict our ability to receive net income from assets collateralizing the obligations. We cannot assure you that the performance tests will be satisfied. In advance of completing negotiations with the rating agencies or other key transaction parties on our future CDO financings, we cannot be certain of the actual terms of the CDO delinquency tests, over-collateralization terms, cash flow release mechanisms or other significant factors regarding the calculation of net income to us. We may not be able to obtain favorable terms with regard to these matters. If our assets fail to perform as anticipated, our over-collateralization or other credit enhancement expense associated with our CDO financings will increase.

The tax on prohibited transactions will limit our ability to engage in transactions, including certain methods of securitizing loans and selling our loans and real estate properties, that may be treated as sales for U.S. federal income tax purposes.

A REIT’s gain from prohibited transactions is subject to a 100% tax. In general, prohibited transactions are sales or other dispositions of property, other than foreclosure property, but including mortgage loans and real estate, held primarily for sale to customers in the ordinary course of business. We might be subject to this tax if we were to sell or securitize loans or otherwise dispose of loans or real estate in a manner that is treated as a sale of the loans or real estate for U.S. federal income tax purposes. Therefore, in order to avoid the prohibited transactions tax, we may choose not to engage in certain sales of loans or real estate at the REIT level, and may limit the structures we utilize for our securitization transactions, even though such sales or structures might otherwise be beneficial to us.

It may be possible to reduce the risk or impact of the prohibited transaction tax by conducting certain activities, such as engaging in securitization transactions that might be treated as sales for U.S. federal income tax purposes, through one or more of our TRSs, subject to certain limitations. However, to the extent that we engage in such activities through TRSs, the income associated with such activities would generally be subject to full corporate income tax. Moreover, depending on the facts of a particular transaction, the IRS may assert that our disposition of loans or real estate through a TRS should be treated as a prohibited transaction, subject to the 100% tax on gain from such disposition.

The “taxable mortgage pool” rules may limit the manner in which we effect securitizations and may subject us to U.S. federal income tax and increase the tax liability of our stockholders.

If we effect securitizations, some or all of them could be considered to result in the creation of taxable mortgage pools for U.S. federal income tax purposes. As a REIT, so long as we or another private subsidiary REIT own 100% of the equity interests in a taxable mortgage pool, our qualification as a REIT would not be adversely affected by the characterization of the securitization as a taxable mortgage pool. We would generally be precluded, however, from holding equity interests in such securitizations through our operating partnership (unless held through a private subsidiary REIT, or held by our operating partnership at a time when it is a disregarded entity for U.S. federal income tax purposes), selling to outside investors equity interests in such securitizations or from selling any debt securities issued in connection with such securitizations that might be considered to be equity interests for tax purposes. These limitations will preclude us from using certain techniques to maximize our returns from securitization transactions.

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Furthermore, if we are deemed to be a taxable mortgage pool, in whole or in part, or if we make investments in entities that own or are themselves deemed to be taxable mortgage pools, or if we create securitizations or other borrowings that are considered to result in the creation of a taxable mortgage pool for federal income tax purposes, we and our stockholders would incur additional collateral tax consequences. For example, certain categories of stockholders, such as foreign stockholders eligible for treaty or other benefits, stockholders with net operating losses, and certain tax-exempt stockholders that are subject to unrelated business income tax, could be subject to increased taxes on a portion of their dividend income from us that is attributable to the taxable mortgage pool. In addition, to the extent that our stock is owned by tax-exempt “disqualified organizations,” such as certain cooperatives, government-related entities and tax-exempt organizations that are exempt from unrelated business income tax, we will incur a corporate-level tax on a portion of our income from the taxable mortgage pool. We expect that disqualified organizations will own our shares from time to time.

If we securitize mortgage loans that we hold for investment, we may be required to repurchase mortgage loans or indemnify investors if we breach representations and warranties, which could harm our profitability.

If we sell loans through securitizations, we may be required to make customary representations and warranties about the loans to the securitization trust. Sale agreements generally require the seller to repurchase or substitute loans if the seller breaches a representation or warranty given to the securitization trust. In addition, we may be required to repurchase loans as a result of borrower fraud or if a payment default occurs on a mortgage loan shortly after its origination. The remedies available to a purchaser of mortgage loans from us may be broader than those available to us against those from whom we acquired the loans. Also, the entities from which we acquired such loans may lack sufficient capital to repurchase more than a limited number of such loans. If a securitization trust enforces its remedies against us, we may not be able to enforce the remedies we have against the seller of the mortgage loan to us or the borrower.

Risks Relating to Investments in Real Estate-Related Securities

Investments in real estate-related securities will be subject to specific risks relating to the particular issuer of the securities.

We may invest in real estate-related securities issued by various U.S. and foreign publicly-traded and privately-held real estate companies. Our investments in real estate-related securities will expose us to risks different from those related to owning fee interests in real estate. For example, we will be exposed to the business specific risks impacting a particular entity such as how the entity has funded its assets, the depth and quality of its management team, the entity’s tenant base and property focus, among other things.

Our investments in real estate-related common equity securities will be subject to the general risks of investing in subordinated real estate securities, which may result in losses to us.

Any real estate-related equity securities that we acquire will be unsecured and subordinated to other obligations of the issuer. Investments in real estate-related equity securities are subject to risks of: (i) limited liquidity in the secondary trading market in the case of unlisted or thinly traded securities; (ii) substantial market price volatility resulting from changes in prevailing interest rates in the case of traded equity securities; (iii) subordination to the liabilities of the entity; (iv) the operation of mandatory sinking fund or call/redemption provisions during periods of declining interest rates that could cause the issuer to redeem the securities; and (v) the possibility that earnings of the issuer may be insufficient to meet its debt service and distribution obligations.

Real estate market deterioration may reduce the value of any real estate-related securities in which we may invest.

Since 2008, domestic and international credit markets, the sub-prime residential mortgage market and other asset markets have experienced severe dislocations and liquidity disruptions. Sub-prime mortgage loans have experienced increasing rates of delinquency, foreclosure and loss. Globally, countries are faced with management of increasing levels of debt and many countries may be unable to repay their sovereign debt. These and other related events have had a significant impact on the capital markets associated not only with sub-prime mortgage-backed securities, asset-backed securities and CDOs, but also with the United States and international credit and financial markets as a whole.

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If we invest in real estate-related securities, including commercial mortgage-backed securities (“CMBS”) , as part of our investment strategy, we will be exposed to the volatility of the credit markets. Turmoil in the credit markets may have a material adverse effect on both the value of our securities portfolio and the availability or cost of any debt used in connection with our securities portfolio.

Because there may be significant uncertainty in the valuation of, or in the stability of the value of, securities holdings, the fair values of these investments might not reflect the prices that we would obtain if such investments were actually sold. Further, due to the recent market events, these investments would be subject to rapid changes in value caused by sudden developments that could have a material adverse affect on the value of these investments.

We may make investments in non-U.S. dollar denominated securities, which will be subject to currency rate exposure and the uncertainty of foreign laws and markets.

We may purchase real estate-related securities denominated in foreign currencies. Thus, changes in exchange rates may have an adverse impact on returns on our non-U.S. dollar denominated investments regardless of the performance of the underlying asset. We may not be able to successfully hedge any foreign currency risk and may incur losses on these investments as a result of exchange rate fluctuations.

A portion of any real estate-related securities investments may be illiquid.

Certain of the real estate-related securities that we may purchase will not be registered under applicable securities laws and may be restricted as to sale or other transfer under applicable laws or the governing documents of the issuers of the securities. As a result, our ability to vary our portfolio in response to changes in economic and other conditions would likely be limited.

Lending Related Risks

The mortgage, bridge and mezzanine loans in which we may invest will be subject to delinquency, foreclosure and loss, which could result in losses to us.

Commercial mortgage loans are secured by commercial property. The ability of a borrower to repay a loan secured by a commercial property typically is dependent primarily upon the successful operation of the underlying property, rather than on any independent income or assets of the borrower. A borrower’s net income and, therefore, its ability to pay us, may be affected by a variety of factors, including number and mix of tenants, property management decisions, property location and condition, competition, the occurrence of any uninsured casualty at the property, changes in national, regional or local economic conditions and/or specific industry segments, declines in regional or local real estate values, declines in regional or local rental or occupancy rates, increases in interest rates, real estate tax rates and other operating expenses, changes in governmental rules, regulations and fiscal policies, including environmental legislation, acts of God, terrorism, social unrest and civil disturbances.

If a borrower defaults under a mortgage, bridge or mezzanine loan we have made, we will bear the risk of loss of principal to the extent of any deficiency between the value of the collateral and the principal and accrued interest of the loan. In the event of the bankruptcy of a borrower, the loan to such borrower will be deemed to be secured only to the extent of the value of the underlying collateral at the time of bankruptcy (as determined by the bankruptcy court), and the lien securing the loan will be subject to the avoidance powers of the bankruptcy trustee or debtor-in-possession to the extent the lien is unenforceable under state law. Foreclosure on a loan can be an expensive and lengthy process, which could have a substantial negative effect on our anticipated return on the foreclosed loan. If we determine that the sale of a foreclosed property is in our best interest, delays in the sale of such property could negatively impact the price we receive and we may not be receiving any income from the property although we will be required to incur expenses, such as for maintenance costs, insurance costs and property taxes. The longer we are required to hold the property, the greater the potential negative impact on our revenues and results of operations. In addition, any restructuring, workout, foreclosure or other exercise of remedies with respect to loans that we have made or acquired could create income tax costs or make it more difficult for us to qualify as a REIT. If we acquire a property by way of foreclosure or a deed in lieu of foreclosure, we may be subject to a 100% tax on gain from a subsequent resale of that property under the prohibited transaction rules. See “Federal Income Tax Considerations — Requirements for Qualification as a REIT — Operational Requirements — Prohibited Transactions.” Alternatively, if we make an election to treat such property as “foreclosure property” under applicable income tax laws, we may avoid the 100% tax

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on prohibited transactions, but the income from the sale or operation of the property may be subject to corporate income tax at the highest applicable rate (currently 35%).

The mezzanine loans in which we may invest would involve greater risks of loss than senior loans secured by income-producing real properties.

We may invest in mezzanine loans that take the form of subordinated loans secured by second mortgages on the underlying real property or loans secured by a pledge of the ownership interests of either the entity owning the real property or the entity that owns the entity owning the real property. These types of investments involve a higher degree of risk than loans secured by a first mortgage on income producing real property. If a borrower defaults on our mezzanine loan or debt senior to our loan, or in the event of a borrower bankruptcy, our mezzanine loan will be satisfied only after the senior debt is satisfied. As a result, we may not recover some or all of our investment. Additionally, mezzanine loans may have a higher loan-to-value ratio than traditional mortgage loans, resulting in less equity in the property, which increases our risk of loss of principal. Mezzanine loans also may be particularly illiquid due to their short life and the greater difficulty of recoupment in the event of a borrower’s default. As a result, our ability to vary our portfolio of such loans in response to changes in economic and other conditions may be relatively limited.

Decreases in the value of the property underlying our mortgage loans might decrease the value of our assets.

The mortgage loans in which we plan to invest are secured by underlying real property interests. To the extent that the value of the property underlying our mortgage loans decreases, our security might be impaired, which might decrease the value of our assets. Since 2007, real property values have declined throughout much of the United States and may continue to decline even after we purchase a loan on terms that we believe accounts for this possibility.

Construction loans in which we may invest are subject to the risk of failure of completion or failure of the subsequent sale of the completed project.

We may invest in mortgage loans, the proceeds of which will be used to construct commercial projects on the real property securing the loans. These types of loans are subject to the risk that the project is not completed, or that the completed project is not sold or leased, prior to the maturity of our loan. In either case, if the borrower ultimately defaults on the loan, we may be required to find another contractor to complete the project and/or sell the finished project. If we are unable to complete the project or sell the completed project, we could lose a substantial portion of the principal of the applicable loan.

The loans we make or invest in will be subject to interest rate fluctuations, which could reduce our returns as compared to market interest rates as well as the value of the loans in the event we sell the loans.

If we invest in fixed-rate, long-term loans and interest rates increase, the loans could yield a return that is lower than then-current market rates. Conversely, if interest rates decline, we will be adversely affected to the extent that loans are prepaid, because we may not be able to make new loans at the previously higher interest rate. If we invest in variable interest rate loans, if interest rates decrease, our revenues will likewise decrease and if interest rates increase, then the value of loans we own would decrease, which would lower the proceeds we would receive in the event we sell such assets.

We may invest in B-Notes which are subject to additional risks resulting from the contractual structure and terms of such transactions, which may result in losses to us.

We may invest in B-Notes, which are typically secured by a first mortgage on a single large commercial property or group of related properties and subordinated to an A-Note secured by the same first mortgage on the same collateral. B-Notes can vary in their structural characteristics and risks because each transaction is privately negotiated. We cannot predict the terms of each B-Note investment. As a result, our rights as a holder of B-Notes to control the process following a borrower default may be limited in certain investments. If a borrower defaults on a B-Note, the A-Note holders would be paid first and there may not be sufficient funds remaining to repay us and other B-Note holders. Additionally, investments in B-Notes may be subject to increased risks because B-Notes are typically secured by a single property or group of related properties and are not as diversified as investments secured by a pool of properties.

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Bridge loans may involve a greater risk of loss than conventional mortgage loans.

We may make bridge loans secured by first lien mortgages on properties to borrowers that typically seek short-term capital in connection with acquisitions, developments or refinancings of real estate. Bridge loan borrowers typically borrow funds under a conventional mortgage loan to repay the bridge loan. We face a risk that a borrower under our bridge loan will be unable to obtain permanent financing to repay our bridge loan. Bridge loans are also subject to risks of borrower defaults, bankruptcies, fraud, losses and special hazard losses that are not covered by standard hazard insurance.

We may not be able to obtain licensure as a mortgage banker or lender in certain states which would impair our ability to invest in mortgage loans in those states.

Certain states may require us to be licensed as a mortgage banker or lender in order to invest in mortgage loans in those states. Our ability to obtain or maintain licensure as a mortgage banker or lender in certain states may be dependent upon a finding or our financial responsibility, character and fitness. Failure to obtain any required mortgage banking or lending licensure or loss or suspension of such licensure would adversely affect our ability to commence or maintain operations in these jurisdictions and invest in mortgage loans. Suspension or loss of any required mortgage banking or lending licensure, whether due to failure to comply with licensure requirements or failure to meet changing licensure standards, could force us to liquidate our investment in mortgage loans in those jurisdictions. We may incur additional costs in complying with these licensure requirements.

Federal Income Tax Risks

Failure to qualify as a REIT would adversely affect our operations and our ability to pay distributions to you.

Arnold & Porter LLP has rendered an opinion to us that we will be organized in conformity with the requirements for qualification and taxation as a REIT under the Internal Revenue Code, or the Code, for our taxable year ending December 31, 2010, and that our proposed method of operations will enable us to meet the requirements for qualification and taxation as a REIT beginning with our taxable year ending December 31, 2010. This opinion is based upon, among other things, our representations as to the manner in which we are and will be owned and the manner in which we will invest in and operate assets. However, our qualification as a REIT will depend upon our ability to meet requirements regarding our organization and ownership, distributions of our income, the nature and diversification of our income and assets and other tests imposed by the Code. Arnold & Porter LLP will not review our compliance with the REIT qualification standards on an ongoing basis, and we may fail to satisfy the REIT requirements in the future. Also, this opinion represents Arnold & Porter LLP’s legal judgment based on the law in effect as of the date of this prospectus. Arnold & Porter LLP’s opinion is not binding on the Internal Revenue Service or the courts. Future legislative, judicial or administrative changes to the federal income tax laws could be applied retroactively, which could result in our disqualification as a REIT.

If we fail to qualify as a REIT for any taxable year, we will be subject to federal income tax on our taxable income for that year at corporate rates. In addition, we would generally be disqualified from treatment as a REIT for the four taxable years following the year of losing our REIT status. Losing our REIT status would reduce our net earnings available for distribution to stockholders because of the additional tax liability. In addition, distributions to stockholders would no longer qualify for the distributions-paid deduction, but we would no longer be required to pay distributions. If this occurs, we might be required to borrow funds or liquidate some investments in order to pay the applicable tax.

Our investment strategy may cause us to incur penalty taxes, lose our REIT status, or own and sell properties through taxable REIT subsidiaries (“TRSs”), each of which would diminish the return to our stockholders.

The sale of one or more of our properties may be considered prohibited transactions under the Code. Any “inventory-like” sales, such as the sale of condominiums, would almost certainly be considered such a prohibited transaction. See “Federal Income Tax Considerations — Requirements for Qualification as a REIT — Operational Requirements — Prohibited Transactions.” If we are deemed to have engaged in a “prohibited transaction” (i.e., we sell a property held by us primarily for sale in the ordinary course of our trade or business), all taxable gain we derive from such sale would be subject to a 100% penalty tax. The Code sets forth a safe harbor for REITs that wish to sell property without risking the imposition of the 100% penalty tax. The principal requirements of the safe harbor are that: (i) the REIT must hold the applicable property for not less than two years for the production of rental income

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prior to its sale; (ii) the aggregate expenditures made by the REIT, or any partner of the REIT, during the two-year period preceding the date of sale which are includible in the basis of the property do not exceed 30% of the net selling price of the property; and (iii) the REIT does not make more than seven sales of property during the taxable year, the aggregate adjusted bases of property sold during the taxable year does not exceed 10% of the aggregate bases of all of the REIT’s assets as of the beginning of the taxable year or the fair market value of property sold during the taxable year does not exceed 10% of the fair market value of all of the REIT’s assets as of the beginning of the taxable year. Given our investment strategy, the sale of one or more of our properties may not fall within the prohibited transaction safe harbor.

If we desire to sell a property pursuant to a transaction that does not fall within the safe harbor, we may be able to avoid the 100% penalty tax if we acquired the property through a TRS or acquired the property and transferred it to a TRS for a non-tax business purpose prior to the sale (i.e., for a reason other than the avoidance of taxes). However, there may be circumstances that prevent us from using a TRS in a transaction that does not qualify for the safe harbor. Additionally, even if it is possible to effect a property disposition through a TRS, we may decide to forego the use of a TRS in a transaction that does not meet the safe harbor based on our own internal analysis, the opinion of counsel or the opinion of other tax advisors that the disposition will not be subject to the 100% penalty tax. In cases where a property disposition is not effected through a TRS, the Internal Revenue Service could successfully assert that the disposition constitutes a prohibited transaction, in which event all of the net taxable gain from the sale of such property will be payable as a tax, thereby reducing the amount of cash available for investment by us or distribution to stockholders.

If we acquire a property that we anticipate will not fall within the safe harbor from the 100% penalty tax upon disposition, then we may acquire such property through a TRS in order to avoid the possibility that the sale of such property will be a prohibited transaction and subject to the 100% penalty tax. If we already own such a property directly or indirectly through an entity other than a TRS, we may contribute the property to a TRS if there is another, non-tax related business purpose for the contribution of such property to the TRS. Following the transfer of the property to a TRS, the TRS will operate the property and may sell such property and distribute the net proceeds from such sale to us, and we may distribute the net proceeds distributed to us by the TRS to our stockholders. Though a sale of the property by a TRS likely would eliminate the danger of the application of the 100% penalty tax, the TRS itself would be subject to a tax at the federal level, and potentially at the state and local levels, on the gain realized by it from the sale of the property as well as on the income earned while the property is operated by the TRS. This tax obligation would diminish the amount of the proceeds from the sale of such property that would be distributable to our stockholders. As a result, the amount available for distribution to our stockholders would be substantially less than if the REIT had not operated and sold such property through the TRS and such transaction was not successfully characterized as a prohibited transaction. The maximum federal corporate income tax rate currently is 35%. Federal, state and local corporate income tax rates may be increased in the future, and any such increase would reduce the amount of the net proceeds available for distribution by us to our stockholders from the sale of property through a TRS after the effective date of any increase in such tax rates.

As a REIT, the value of the non-mortgage securities we hold in all of our TRSs may not exceed 25% of the value of all of our assets at the end of any calendar quarter. If the Internal Revenue Service were to determine that the value of our interests in all of our TRSs exceeded 25% of the value of our total assets at the end of any calendar quarter, then we would fail to qualify as a REIT. If we determine it to be in our best interest to own a substantial number of our properties through one or more TRSs, then it is possible that the Internal Revenue Service may conclude that the value of our interests in our TRSs exceeds 25% of the value of our total assets at the end of any calendar quarter and therefore cause us to fail to qualify as a REIT. Additionally, as a REIT, no more than 25% of our gross income with respect to any year may be from sources other than real estate. Distributions paid to us from a TRS are considered to be non-real estate income. Therefore, we may fail to qualify as a REIT if distributions from all of our TRSs, when aggregated with all other non-real estate income with respect to any one year, are more than 25% of our gross income with respect to such year.

Certain fees paid to us may affect our REIT status.

Income received in the nature of rental subsidies or rent guarantees, in some cases, may not qualify as rental income from real estate and could be characterized by the Internal Revenue Service as non-qualifying income for purposes of satisfying the 75% and 95% gross income tests required for REIT qualification. If the aggregate of non-qualifying income in any taxable year ever exceeded 5% of our gross revenues for such year, we could lose our REIT status for that taxable year and the four taxable years following the year of losing our REIT status.

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You may have current tax liability on distributions you elect to reinvest in our common stock.

If you participate in our distribution reinvestment plan, you will be deemed to have received, and for income tax purposes will be taxed on, the amount reinvested in shares of our common stock to the extent the amount reinvested was not a tax-free return of capital. In addition, you will be treated for tax purposes as having received an additional distribution to the extent the shares are purchased at a discount to fair market value. As a result, unless you are a tax-exempt entity, you may have to use funds from other sources to pay your tax liability on the value of the shares of common stock received.

If our operating partnership fails to maintain its status as a partnership, its income may be subject to taxation, which would reduce the cash available to us for distribution to our stockholders.

We intend to maintain the status of our operating partnership as either a disregarded entity or an entity taxable as a partnership for federal income tax purposes. However, if the Internal Revenue Service were to successfully challenge the status of the operating partnership as a disregarded entity or an entity taxable as a partnership, our operating partnership would be taxable as a corporation. In such event, this would reduce the amount of distributions that the operating partnership could make to us. This could also result in our losing REIT status, and becoming subject to a corporate level tax on our income. This would substantially reduce the cash available to us to pay distributions and the return on your investment. In addition, if any of the partnerships or limited liability companies through which our operating partnership owns its properties, in whole or in part, loses its characterization as a partnership or disregarded entity for federal income tax purposes, it would be subject to taxation as a corporation, thereby reducing distributions to our operating partnership. Such a recharacterization of an underlying property owner could also threaten our ability to maintain REIT status.

In certain circumstances, we may be subject to federal and state taxes on income as a REIT, which would reduce our cash available for distribution to our stockholders.

Even if we qualify and maintain our status as a REIT, we may become subject to federal income taxes and related state taxes. For example, if we have net income from a “prohibited transaction,” such income will be subject to the 100% penalty tax. We may not be able to make sufficient distributions to avoid excise taxes applicable to REITs. We may also decide to retain income we earn from the sale or other disposition of our assets and pay income tax directly on such income. In that event, our stockholders would be treated as if they earned that income and paid the tax on it directly. We may also be subject to state and local taxes on our income or property, either directly or at the level of our operating partnership or at the level of the other entities through which we indirectly own our assets.

Non-U.S. income or other taxes, and a requirement to withhold any non-U.S. taxes, may apply, and, if so, the amount of cash distributions payable to you will be reduced.

We plan to acquire real property or other real estate-related assets located outside the United States and may invest in stock or other securities of entities owning real property or other real estate-related assets located outside the United States. As a result, we may be subject to foreign (i.e., non-U.S.) income taxes, trade taxes, value-added taxes, stamp taxes, real property conveyance taxes, withholding taxes and other foreign taxes or similar impositions in connection with our ownership of foreign real property or foreign securities. The country in which the real property is located may impose such taxes regardless of whether we are profitable and in addition to any U.S. income tax or other U.S. taxes imposed on profits from our investments in such real property or securities. If a foreign country imposes income taxes on profits from our investment in foreign real property or foreign securities, we and you will not be eligible to claim a foreign tax credit on our and your U.S. federal income tax returns to offset the income taxes with the taxes paid to the foreign country, and the imposition of any foreign taxes in connection with our ownership and operation of foreign real property or our investment in securities of foreign entities will reduce the amounts distributable to you. Similarly, the imposition of withholding taxes by a foreign country will reduce the amounts distributable to you. We expect the organizational costs associated with non-U.S. investments, including costs to structure the investments so as to minimize the impact of foreign taxes, will be higher than those associated with U.S. investments. Moreover, we may be required to file income tax or other information returns in foreign jurisdictions as a result of our investments made outside of the United States. Any organizational costs and reporting requirements will increase our administrative expenses. You are urged to consult with your own tax advisors with respect to the impact of applicable non-U.S. taxes and tax withholding requirements on an investment in our common stock.

If we make foreign investments, we will be subject to changes in foreign tax or other laws, as well as to changes in U.S. tax laws, and such changes could negatively impact our returns from any particular investment.

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We expect that up to 60% of our investments in real estate will be located outside of the United States. Such investments are expected to be structured to minimize non-U.S. taxes, and generally include the use of holding companies. Our ownership, operation and disposition strategy with respect to non-U.S. investments will take into account foreign tax considerations. For example, it is typically advantageous from a tax perspective in non-U.S. jurisdictions to sell interests in a holding company that owns real estate rather than the real estate itself. Buyers of such entities, however, will often discount their purchase price by any inherent or expected tax in such entity. Additionally, the pool of buyers for interests in such holding companies is typically more limited than buyers of direct interests in real estate, and we may be forced to dispose of real estate directly, thus potentially incurring higher foreign taxes and negatively affecting the return on the investment.

Foreign investments are subject to changes in foreign tax or other laws. Any such law changes may require us to modify or abandon a particular holding structure. Such changes may also lead to higher tax rates on our foreign investments than we anticipated, regardless of structuring modifications. Additionally, U.S. tax laws with respect to foreign investments are subject to change, and such changes could negatively impact our returns from any particular investment.

Complying with REIT requirements may limit our ability to hedge risk effectively.

The REIT provisions of the Code may limit our ability to hedge the risks inherent to our operations. Except to the extent permitted by the Code and Treasury Regulations, any income we derive from a hedging transaction which is clearly identified as such as specified in the Code, including gain from the sale or disposition of such a transaction, will not constitute gross income for purposes of the 75% and 95% gross income tests, and therefore will be exempt from these tests, but only to the extent that the transaction hedges (i) indebtedness incurred or to be incurred by us to acquire or carry real estate assets or (ii) currency fluctuations with respect to any item of income that would qualify under the 75% or 95% gross income tests. To the extent that we do not properly identify such transactions as hedges, hedge with other types of financial instruments, or hedge other types of indebtedness, the income from those transactions is not likely to be treated as qualifying income for purposes of the gross income tests. As a result of these rules, we may have to limit the use of hedging techniques that might otherwise be advantageous, which could result in greater risks associated with interest rate or other changes than we would otherwise incur.

Legislative or regulatory action could adversely affect us.

In recent years, numerous legislative, judicial and administrative changes have been made in the provisions of the federal income tax laws applicable to investments similar to an investment in shares of our common stock. Additional changes to the tax laws are likely to continue to occur, and we cannot assure you that any such changes will not adversely affect the taxation of our stockholders. We are under no obligation to update the prospectus for any such changes. Any such changes could have an adverse effect on an investment in our shares or on the market value or the resale potential of our assets. You are urged to consult with your own tax advisor with respect to the impact of recent legislation on your investment in our shares and the status of legislative, regulatory or administrative developments and proposals and their potential effect on an investment in our shares. You also should note that our counsel’s tax opinion is based upon our representations and existing law and Treasury Regulations, applicable as of the date of its opinion, all of which are subject to change, either prospectively or retroactively.

Congress passed major federal tax legislation in 2003, with modifications to that legislation in 2005. One of the changes effected by that legislation generally reduced the tax rate on dividends paid by corporations prior to 2011 to individuals, trusts and estates to a maximum of 15%. In late 2010, legislation was enacted to extend this reduced rate for two years. REIT distributions generally do not qualify for this reduced rate. The tax changes did not, however, reduce the corporate tax rates. Therefore, the maximum corporate tax rate of 35% has not been affected. However, as a REIT, we generally would not be subject to federal or state corporate income taxes on that portion of our ordinary income or capital gain that we distribute currently to our stockholders, and we thus expect to avoid the “double taxation” typically imposed on other corporations.

Although REITs continue to receive substantially better tax treatment than entities taxed as corporations, it is possible that future legislation would result in a REIT having fewer tax advantages, and it could become more advantageous for a company that invests in real estate to elect to be taxed for U.S. federal income tax purposes as a corporation. As a result, our articles of incorporation provide our board of directors with the power, under certain circumstances, to revoke or otherwise terminate our REIT election and cause us to be taxed as a corporation, without

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the vote of our stockholders. Our board of directors has fiduciary duties to us and our stockholders in accordance with the Maryland General Corporation Law and could only cause such changes in our tax treatment if it determines in good faith that such changes are in the best interest of our stockholders.

Equity participation in mortgage, bridge, mezzanine or other loans may result in taxable income and gains from these properties that could adversely impact our REIT status.

If we participate under a loan in any appreciation of the properties securing the mortgage loan or its cash flow and the Internal Revenue Service characterizes this participation as “equity” or as a “shared appreciation mortgage,” we might have to recognize income, gains and other items from the property as if an equity investor for federal income tax purposes. This could affect our ability to qualify as a REIT.

Risks Related to Investments by Tax-Exempt Entities and Benefit Plans Subject to ERISA

If you fail to meet the fiduciary and other standards under ERISA or the Code as a result of an investment in our stock, you could be subject to criminal and civil penalties.

There are special considerations that apply to employee benefit plans subject to ERISA (such as profit sharing, section 401(k) or pension plans) and other retirement plans or accounts subject to Section 4975 of the Code (such as an IRA) that are investing in our shares. If you are investing the assets of such a plan or account in our common stock, you should satisfy yourself that:

Failure to satisfy the fiduciary standards of conduct and other applicable requirements of ERISA and the Code may result in the imposition of civil and criminal penalties and could subject the fiduciary to equitable remedies. In addition, if an investment in our shares constitutes a prohibited transaction under ERISA or the Code, the fiduciary who authorized or directed the investment may be subject to the imposition of excise taxes with respect to the amount invested.

Risks Related to Our Organizational Structure

You will be limited in your right to bring claims against our officers and directors.

Our articles of incorporation provide that a director will not have any liability as a director so long as he or she performs his or her duties in accordance with the applicable standard of conduct and without negligence or misconduct on the part of our officers and non-independent directors, our advisor or affiliates and without gross negligence or willful misconduct by our independent directors. In addition, our articles of incorporation provide that, subject to the applicable limitations set forth therein or under Maryland law, no director or officer will be liable to us or our stockholders for monetary or other damages. Our articles of incorporation also provide that, with the approval of our board of directors, we may indemnify our employees and agents for losses they may incur by reason of their service in such capacities so long as they satisfy these requirements. We have entered into separate indemnification agreements with each of our directors and executive officers. As a result, we and our stockholders may have more

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limited rights against these persons than might otherwise exist under common law. In addition, we may be obligated to fund the defense costs incurred by these persons in some cases.

The limit on the percentage of shares of our stock that any person may own may discourage a takeover or business combination that may benefit our stockholders.

Our articles of incorporation restrict the direct or indirect ownership by one person or entity to no more than 9.8%, by number or value, of any class or series of our equity stock (which includes common stock and any preferred stock we may issue), and this restriction may be waived only by our board of directors under certain conditions. This restriction may deter individuals or entities from making tender offers for shares of our common stock on terms that might be financially attractive to stockholders or which may cause a change in our management. This ownership restriction may also prohibit business combinations that would have otherwise been approved by our board of directors and stockholders and may also decrease your ability to sell your shares of our common stock.

Investors in this offering do not have preemptive rights.

Investors in this offering do not have preemptive rights to any shares we may issue in the future. We may issue, without stockholder approval, one or more classes of preferred stock or additional shares of common stock; provided, however, that the issuance of preferred stock must be approved by a majority of our independent directors who do not have an interest in the transaction. These issuances may reduce the value of the shares purchased by investors in this offering. Our board of directors may increase the aggregate number of authorized shares of capital stock or the number of authorized shares of capital stock of any class or series without stockholder approval. Payment of any distribution preferences of outstanding preferred stock we issue would reduce the amount of funds available for the payment of distributions on our common stock. Further, holders of preferred stock are normally entitled to receive payment in the event we liquidate, dissolve or wind up before any payment is made to our common stockholders which may reduce the amount available to common stockholders. In addition, under certain circumstances, the issuance of preferred stock or additional shares of common stock may render more difficult or tend to discourage:

Our UPREIT structure may result in potential conflicts of interest with limited partners other than us, if any, in our operating partnership whose interests may not be aligned with those of our stockholders.

Limited partners other than us, if any, in our operating partnership will have the right to vote on certain amendments to the operating partnership agreement, as well as on certain other matters. Persons holding such voting rights may exercise them in a manner that conflicts with the interests of our stockholders. As general partner of our operating partnership, we are obligated to act in a manner that is in the best interest of all partners of our operating partnership. Circumstances may arise in the future when the interests of other limited partners in our operating partnership may conflict with the interests of our stockholders. These conflicts may be resolved in a manner stockholders do not believe are in their best interest.

FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements that can be identified by the use of such words as “may,” “plan,” “expect,” “anticipate,” “intend,” “estimate,” “continue,” “believe,” predict,” “potential,” “would,” “should,” “could,” “seeks,” “approximately,” “projects” or the negative of such words. You can also identify forward-looking statements by discussions of strategy, objectives, plans or intentions of management for future operations or economic performance and related assumptions and forecasts.

We caution you that forward-looking statements are not guarantees. We believe that our expectations reflected in the forward-looking statements are based on our reasonable beliefs, assumptions and expectations of our future performance, and have taken into account all information currently available to us. Such beliefs, assumptions and expectations are subject to risks and uncertainties and can change as a result of future economic, competitive and

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market conditions, all of which are difficult or impossible to predict accurately and many of which are beyond our control.

Because such statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Investors are cautioned not to place undue reliance on such statements.

Important factors that could cause our actual results of operations and execution of our business strategy to differ materially from the expectations reflected in our forward-looking statements include, but are not limited to:

We can give no assurance that any of the events anticipated by the forward-looking statements will occur or, if any of them do, what impact they will have on our results of operations and financial condition. In evaluating our forward-looking statements, you should specifically consider the risks and uncertainties discussed in the “Risk Factors” section of this prospectus. Except as required by law, we undertake no obligation to publicly revise our forward-looking statements to reflect events or circumstances that arise after the date of this prospectus or the date of the documents incorporated by reference in this prospectus that include forward-looking statements.

ESTIMATED USE OF PROCEEDS

The following table sets forth information about how we intend to use the proceeds raised in this offering assuming that we sell:

The estimates and the amounts set forth below represent our best estimate of our intended sales proceeds; however, this is a best efforts offering so there is no guarantee as to the amount of shares that we will sell. In addition, we reserve the right to reallocate shares we are offering between the primary offering and our Distribution Reinvestment Plan. Depending primarily on the number of shares sold in this offering, we estimate that approximately 88.24% to 88.74% of the Gross Proceeds will be used for investment, the payment of Investment Services Fees and Acquisition Expenses or other corporate purposes. “Gross Proceeds” means the purchase price of all Equity Shares sold for our account through all offerings, without deduction for Organizational and Offering Expenses or volume or other discounts. For the purpose of computing Gross Proceeds, the purchase price of any Equity Share for which reduced or no selling commissions or marketing support fees are paid to our Managing Dealer or a participating broker shall be deemed to be the full amount of the offering price per Equity Share pursuant to the prospectus for such offering, with the exception of Equity Shares purchased pursuant to our Distribution Reinvestment Plan, which will be factored

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into the calculation using their actual purchase price. The remainder of offering proceeds is expected to be used to pay selling commissions, the marketing support fee and other Organizational and Offering Expenses. The amount available for investment will be less to the extent that we use offering proceeds, including proceeds from our Distribution Reinvestment Plan, to fund redemptions under our Redemption Plan, pay distributions, repay debt, pay operating expenses or establish reserves. While we believe the estimated use of proceeds set forth below is reasonable, you should view this table only as an estimate of the use of proceeds that may be achieved.

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Until proceeds are required to be invested or used for other purposes, we expect to invest such amounts in short-term, highly liquid investments, subject to appropriate safety of principal, including, but not limited to, government obligations, bank certificates of deposit, short-term debt obligations and interest bearing accounts.

MANAGEMENT COMPENSATION

We are an externally advised company and as such, although we have a board of directors and executive officers responsible for our management, we have no paid employees. One of our directors and all of our executive officers are employed by, and receive compensation from, affiliates of our advisor. Our advisor is responsible for managing our day-to-day affairs. Our property manager is responsible for managing our properties. Our Managing Dealer is responsible for performing services in connection with the offer and sale of our shares in this offering. Our Managing Dealer has engaged participating brokers in connection with the sale of our shares and, in connection therewith, is expected to pay the majority of the compensation received from us to such participating brokers as described below. In addition, our advisor and property manager are expected to engage other parties, including affiliates, to perform certain services and, in connection therewith, are expected to pay a portion of their fees received from us to such entities.

The following table summarizes the compensation, reimbursements and distributions (exclusive of any distributions to which our affiliates may be entitled by reason of their purchase and ownership of shares in connection with this offering) we pay or contemplate paying to our advisor, property manager, Managing Dealer and other affiliates and related parties, including amounts to reimburse their costs in providing services and for amounts advanced on our behalf. For additional information concerning compensation paid to our advisor and other affiliates and related parties, see the section of this prospectus entitled “Certain Relationships and Related Transactions.” In addition, for information concerning compensation to our Independent Directors, see “Management.”

The compensation payable to our advisor is subject to the terms and conditions of our Advisory Agreement, which must be renewed on an annual basis. As a result, such amounts may be increased or decreased in future renewals of the Advisory Agreement. In addition, compensation payable to our property manager is subject to the terms of our property management agreement with it and may be changed upon future renewals. The terms of our Managing Dealer Agreement are not expected to change during this offering; however, in the event we determine to

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have additional equity offerings in the future, the terms of any future agreement, if any, could vary from the terms described below. Therefore, although this represents compensation and reimbursements we expect to pay to our advisor, property manager, Managing Dealer and other affiliates and related parties in connection with the sale of assets and investment of the proceeds from this offering, there is no assurance our costs for these and/or other future services will remain unchanged throughout our duration. In addition, because these figures cannot be precisely calculated at this time, the actual fees payable may exceed these estimates.

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Because our advisor, its affiliates and related parties are entitled to differing levels of compensation for undertaking different transactions on our behalf, such as the property management fees for operating our properties and the real estate commissions, our advisor has the ability to affect the nature of the compensation it receives by undertaking different transactions. However, our advisor is obligated to exercise good faith and integrity in all of its dealings with respect to our affairs pursuant to the Advisory Agreement. See “The Advisor and the Advisory Agreement.” Because these fees and expenses are payable only with respect to certain transactions or services, they may not be recovered by our advisor or its affiliates by reclassifying them under a different category.

In addition, from time to time, our advisor, or its affiliates, may agree, but are not obligated to, waive or defer all or a portion of the Investment Services Fee, Asset Management Fee or other fees, compensation or incentives due them, enter into lease agreements for unleased space as authorized by our board of directors, pay general administrative expenses or otherwise increase the amount of cash we have available to make distributions to stockholders.

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OUR STRUCTURE

The following chart indicates the relationship between our advisor, our sponsors and certain other affiliates that will provide services to us.

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CONFLICTS OF INTEREST

General

We are subject to various conflicts of interest arising out of our relationship with our advisor, its affiliates and related parties, some of whom serve as our executive officers and directors. In this section, we discuss these conflicts and the corporate governance measures we have adopted to ameliorate some of the risks posed by the conflicts. These conflicts of interest include the following:

Prior and Future Programs

In the past, CNL-related affiliates of our advisor have organized over 100 real estate investment programs for entities other than Global Income Trust, Inc. In addition, affiliates of CNL currently have other real estate holdings and in the future expect to form, offer interests in and manage other real estate programs in addition to those for Global Income Trust, Inc., and to make additional real estate investments. Future real estate programs may involve affiliates of our advisor or CNL in the ownership, financing, operation, leasing and management of properties that may be suitable for us.

Certain of these CNL affiliated public or private real estate programs, including Global Growth Trust, Inc., may compete with us for properties which may be suitable for us and may purchase properties concurrently with us. We may compete with other CNL-sponsored programs for the same tenants in negotiating and renegotiating, if applicable, leases in the same geographic region. These properties, if located in the vicinity of, or adjacent to, properties that we acquire, may affect our properties’ gross revenues. Additionally, such other programs may make or acquire loans or other real estate-related investments in the same or similar entities as those that we target, thereby affecting our loan and other investment activities. Such conflicts between us and CNL affiliated programs may affect the value of our investments as well as our Net Income. CNL is not required to offer any investment opportunity to us and we have no assurance that we will be allocated any specific investment opportunity.

Competition to Acquire Properties and Invest in Loans and Other Permitted Investments

Affiliates of our advisor and other entities sponsored or sold by CNL or its affiliates, including Global Growth Trust, Inc., may compete with us to acquire properties or to make or acquire loans or other Permitted Investments of a type suitable for acquisition or investment by us. Our advisor, including the Investment Committee of our advisor or the affiliates and related parties of our advisor, also may be subject to potential conflicts of interest at such time as we wish to acquire a property or make or acquire a loan or other Permitted Investment that also would be a suitable investment for another affiliate of CNL. For a discussion of the risks related to these conflicts of interest see, “Risk Factors — Risks Related to Conflicts of Interest and Our Relationships with Our Advisor, Its Affiliates and Related Parties.” We also have developed policies to resolve potential conflicts of interest relating to properties, loans and other Permitted Investments involving us and certain of our affiliates. See “— Certain Conflict Resolution Policies” below.

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Similarly, we may compete with other existing and/or future programs sponsored by MIRA or MGPA Limited, or their affiliates, for the acquisition of commercial properties and other investments. The representatives of the MREAS Sub-Advisor and the MGPA Sub-Advisor who are members of the advisor’s investment committee, who are also executive officers and employees of other Macquarie or MGPA entities, must determine if their respective affiliates’ sponsored programs or our Company, or Global Growth Trust, Inc., should invest in a real property or other asset, or enter into a joint venture or co-ownership arrangement for the acquisition of specific investments. Although we expect that the MREAS Sub-Advisor and the MGPA Sub-Advisor will locate and present investment opportunities to us, neither they nor their respective affiliates are required to present any investment opportunity to us.

Certain Relationships with Other Affiliates

Subject to the limitations set forth in our articles of incorporation, we may engage in transactions with affiliates of our advisor and other entities sponsored or sold by CNL or its affiliates and pay compensation in connection therewith. For example, as described elsewhere in this prospectus, we pay our Managing Dealer selling commissions and a marketing support fee. Furthermore, if our board approved an investment in a fund or security managed by an affiliate of our sponsor, it is possible that fees would be earned by both our advisor and the CNL affiliate that is managing the underlying investment. For additional information concerning these relationships, see “Management Compensation” and “Certain Relationships and Related Transactions.”

Joint Ventures with Affiliates of Our Sponsor and Sub-Advisors

We may enter into joint ventures or other co-ownership or financing arrangements with other CNL-sponsored programs (as well as other parties which may include co-investing in international assets with participants in programs managed by affiliates of the MREAS Sub-Advisor or the MGPA Sub-Advisor) for, or relating to, the acquisition, development or improvement of properties and other investments. See “Business — Joint Venture Investments.” Our advisor or its sub-advisors and their respective affiliates and related parties may have conflicts of interest in determining which program should enter into any particular joint venture agreement. The co-venturer may have economic or business interests or goals that are or may become inconsistent with our business interests or goals.

In addition, should any such joint venture be consummated, our advisor may face a conflict in structuring the terms of the relationship between our interests and the interest of the co-venturer and in managing the joint venture. For example, the co-venturer may require pre-emptive rights over acquiring or selling certain assets. Because our advisor, its affiliates and related parties may control both us and any affiliated co-venturer, agreements and transactions between the co-venturers with respect to any such joint venture may not have the benefit of arm’s-length negotiations of the type normally conducted between unrelated co-venturers. Our board of directors (including a majority of our Independent Directors) must approve any investment in which we invest jointly with an entity sponsored and/or managed by members or other equity holders of our sponsor or its affiliates.

Compensation of Our Advisor

Our advisor has been engaged to perform various services for us and receives fees and compensation for such services. We also reimburse our advisor for certain expenses, subject to certain limits. We are obligated to pay substantial fees to our advisor, based upon agreements which have not been negotiated at arm’s length or the success of our advisor in implementing our business plan. Some of the fees are payable based upon factors other than the quality of services provided to us. These fees could influence our advisor’s advice to us as well as its judgment in performing services for us and our subsidiaries. For a discussion of such fees and compensation, see “Management Compensation.” Our advisor and its affiliates are entitled to receive compensation from us under the terms of the Advisory Agreement in connection with a Liquidity Event, liquidation, or other liquidity strategy. The timing and nature of the fees and compensation to our advisor could create a conflict between the interests of our advisor and those of our stockholders due to several factors, including the terms of a Listing, liquidation, or otherwise, overall asset performance, and future sales proceeds. For example, in liquidation, but not in the event of Listing, our advisor may be entitled to receive Disposition Fees. If our board of directors determines to seek a Listing as a liquidity strategy, the board may delay the Listing until it believes the optimal time for the Listing occurs, during which period our advisor will continue to earn fees. For a discussion of the risks relating to our compensation arrangements with our advisor, see “Risk Factors — Risks Related to Conflicts of Interest and Our Relationships with Our Advisor, Its Affiliates and Related Parties.” Our Advisory Agreement is not the result of arm’s-length negotiations. However, our Advisory Agreement requires approval by a majority of our board of directors, including a majority of our Independent Directors, not otherwise interested in such transaction, and a finding by our Independent Directors that

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the Advisory Agreement is fair and reasonable to us and on terms and conditions no less favorable than those which could be obtained from unaffiliated entities. Further, any potential liquidity event recommended by our advisor must be approved by a majority of our board of directors, including a majority of our Independent Directors.

Compensation of Our Property Manager

Our property manager has been engaged to perform various property management and leasing services for us and receives fees for such services. We also reimburse our property manager for certain expenses. For a discussion of such fees, see “Management Compensation.” Our property management agreement is not the result of arm’s-length negotiations. For a discussion of the risks relating to our property management agreement, see “Risk Factors — Risks Related to Conflicts of Interest and Our Relationships with Our Advisor, Its Affiliates and Related Parties.”

Relationship with Our Managing Dealer

Our Managing Dealer is an affiliate of our advisor and of CNL. Certain of our officers and directors are also officers, directors, and registered principals of our Managing Dealer. This relationship may create conflicts in connection with the fulfillment by our Managing Dealer of its due diligence obligations under the federal securities laws. Accordingly, investors will not have the benefit of such independent review. Certain of the participating brokers have made, or are expected to make, their own independent due diligence investigations.

Legal Representation

Arnold & Porter LLP serves as our securities co-counsel and our tax counsel in this offering and Lowndes, Drosdick, Doster, Kantor & Reed, P.A. serves as our securities co-counsel in this offering and also serves as securities and tax counsel for certain of our affiliates, including our Managing Dealer, CNL and other CNL-sponsored real estate programs in connection with other matters. Members of the firms of Arnold & Porter LLP and Lowndes, Drosdick, Doster, Kantor & Reed, P.A. may invest in Global Income Trust, Inc. In the event any controversy arises following the termination of this offering in which our interests appear to be in conflict with those of our advisor or its affiliates, other counsel may be retained for one or both parties.

Certain Conflict Resolution Policies

In order to reduce or eliminate certain potential conflicts of interest, our articles of incorporation contain a number of restrictions relating to transactions between us and our advisor or its affiliates or related parties. These restrictions include the following:

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Although we have different investment objectives than Global Growth Trust, Inc., an investment opportunity may be suitable for both us and Global Growth Trust, Inc. Our board of directors and our advisor have agreed that, in the event an investment opportunity is presented to both our advisor’s Investment Committee and the investment committee of the advisor for Global Growth Trust, Inc. and it is determined that the opportunity may be suitable for both us and Global Growth Trust, Inc., and for which both entities have sufficient uninvested funds, the investment opportunity will be offered to the entities on an alternating basis as follows:

This policy will continue in effect until such time as CNL no longer owns or controls our advisor and the advisor of Global Growth Trust, Inc.

Certain public or private entities affiliated with CNL are bound by conflict resolution procedures that may impact the investments that are available to us. In particular, certain of these public and private CNL affiliated entities, some of which invest in assets similar to those in which we may invest, require that if an investment opportunity becomes available which is suitable for such CNL affiliated entities, then the entity which has had the longest period of time elapse since it was offered an investment opportunity will first be offered the investment opportunity. For purposes of this conflict resolution procedure for these other entities, an investment opportunity will be considered “offered” when the opportunity is presented to the applicable board of directors for its consideration. In addition to various other factors, the determination as to whether or not an investment opportunity is suitable for more than one program will be determined based on the effect of the acquisition both on diversification of each program’s investments by types of properties and geographic area, and on diversification of the tenants of the properties, the anticipated cash flow of each program, the size of the investment, the amount of funds available to each program, and the length of time such funds have been available for investment. A subsequent development regarding the investment opportunity, such as a delay in the closing of a property or a delay in the construction of a property, may cause any such investment to be more appropriate for an entity other than the entity which committed to make the investment. Although we are not bound by these conflict resolution procedures, we may be restricted by such procedures.

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BUSINESS

General

We are a Maryland corporation that has elected to be taxed as a REIT commencing with our taxable year ended December 31, 2010. We intend to acquire and operate a diverse portfolio of global, income-oriented commercial real estate and real estate-related assets. We may invest in a wide variety of real estate sectors, including office properties, retail centers, business and industrial parks (including warehouse, manufacturing and distribution facilities), multifamily properties (including student and senior housing), hospitality properties, healthcare properties and self storage properties, as well as other classifications of commercial real estate property. These assets may include the investment in, and origination of, real estate-related investments such as mortgage, mezzanine, bridge, and other loans, debt securities such as commercial mortgage-backed securities and those issued by other real estate companies, equity securities of real estate companies, as well as other real estate-related investments. The management of our advisor and its sub-advisors and members of our board of directors have extensive experience investing in various types of real estate-related investments.

Our original co-sponsors were CNL Financial Group, LLC and Macquarie Infrastructure and Real Assets Inc. (“MIRA”). In addition, affiliates of CNL and MIRA held the equity interests in our advisor and in our property manager. MIRA is an affiliate of Macquarie Group Limited (ASX:MQG).

In early 2011, CNL and MIRA collectively began exploring how to achieve certain administrative and organizational efficiencies in the oversight responsibilities of our Company. They concluded that efficiencies could be attained through CNL’s single sponsorship and administration of our Company, as well as CNL and its affiliates continuing to focus on domestic investments, while MIRA and its affiliates continue to focus on identifying, acquiring and operating international investments. In an effort to execute on these efficiencies, on June 30, 2011, an affiliate of MIRA sold to affiliates of CNL all of its equity interests in our advisor and our property manager. In connection with that sale, the name of our Company was changed to Global Income Trust, Inc., effective June 30, 2011. In addition, our advisor’s name was changed to CNL Global Income Advisors, LLC and our property manager’s name was changed to CNL Global Income Managers, LLC. As a result of affiliates of CNL becoming the sole equity owners of our advisor and property manager, CNL Financial Group, LLC became the sole sponsor of our Company. Affiliates of CNL and MIRA remain as sub-advisors to our advisor and as sub-property managers for our property manager, in addition to a third sub-advisor and sub-property manager, MGPA Advisory (Singapore) Pte Ltd, an affiliate of MGPA Limited.

Our advisor, CNL Global Income Advisors, LLC, is a Delaware limited liability company. Our advisor is responsible for managing our affairs on a day-to-day basis and for identifying, recommending and executing acquisitions on our behalf. We believe we will benefit from the investment expertise and experience of our advisor’s management team and members of its Investment Committee. This committee is responsible for investigating and making recommendations to our board regarding potential investments. Our advisor is responsible for providing advisory services relating to substantially all aspects of our investments and operations throughout the world, including real estate acquisitions, asset management and other operational matters. Our advisor has subcontracted with affiliates of CNL, MIRA and MGPA Limited to perform substantially all of these functions as sub-advisors and our advisor is responsible for paying the sub-advisors from the fees our advisor receives from us or our Operating Partnership. Subject to certain restrictions contained in our Advisory Agreement, our advisor will reimburse the sub-advisors for all reasonable and necessary expenses incurred or paid by the sub-advisor in connection with the services performed for our advisor. We are responsible for reimbursing our advisor for these expenses. For information regarding the sub-advisors, see “The Advisor and the Advisory Agreement – Sub-Advisors.”

CNL Background

CNL Financial Group

CNL Financial Group, Inc., a subsidiary of our sponsor, CNL Financial Group, LLC, is a leading private investment management firm providing global real estate and alternative investments. CNL, which is controlled by James M. Seneff, Jr., has extensive experience in the acquisition, management and development of real estate and real estate-related assets. Headquartered in Orlando, Florida, CNL sponsors a wide array of investment programs, including REITs and real estate limited liability companies.

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Since its inception in 1973, CNL and/or its affiliates have formed or acquired companies with more than $25 billion in assets located in the United States and Canada, including hotel, retail, restaurant, lifestyle properties and seniors’ housing properties. Services provided by CNL and its affiliates include advisory, acquisition, development, lease and loan servicing, asset and portfolio management, disposition, client services, capital raising, finance and administrative.

The principals of CNL affiliates include James M. Seneff, Jr. and Robert A. Bourne, who also serve among our executive officers and directors. Mr. Seneff and Mr. Bourne have sponsored, directly or indirectly, individually and through affiliated entities, 18 public limited partnerships and four public, unlisted REITs with investment objectives similar to ours. The programs and a general description of their property sector focus are as follows:

The affiliates of CNL, described below, are anticipated to enter into service agreements with the CNL Sub-Advisor. For information regarding the CNL Sub-Advisor, see “The Advisor and the Advisory Agreement — Sub-Advisors.”

CNL Commercial Real Estate

CNL Real Estate Services Corp., a Florida corporation doing business as CNL Commercial Real Estate (“CCRE”), is comprised of a veteran team focused on investment, development and real estate services in commercial markets throughout the United States. CCRE invests in and develops commercial real estate and provides a full complement of client services including brokerage, building management and leasing services. CCRE was established with the addition of 12 senior level executives from Trammell Crow Company. A majority of this team has worked together for more than ten years. During their tenure together, this group has transitioned property management and leasing services on over 15 million square feet throughout the United States and Canada, completed transactions totaling in excess of 22 million square feet valued at over $3.5 billion and acquired over $60 million in acquisitions from November 2007 to August 2008.

CCRE is primarily responsible, through an agreement with the CNL Global Income Sub-Managers, LLC (the “CNL Property Manager”), for providing our property manager with property and building management and leasing and development services for our properties located in North America. CCRE or the CNL Property Manager may also sub-contract with other affiliates of CNL and third parties for the provision of some or all of those services on a property by property basis. CCRE is a subsidiary of CNL and is an affiliate of our advisor and property manager. CCRE provides development, acquisition and property management services to numerous CNL affiliated entities as well as unaffiliated third parties. See “Conflicts of Interest.”

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CNL Financial Group Investment Management

CNL Financial Group Investment Management, LLC, a Florida limited liability company (“CFGIM”), is a subsidiary of CNL and an affiliate of our advisor and property manager. CFGIM provides administrative services to numerous CNL affiliated entities. The services provided by CFGIM to our advisor and its affiliates include services related to acquisitions, U.S. accounting, tax and financial reporting and compliance, due diligence for the managing dealer, and marketing, distributions and reporting and global investor relations (including administrative services in connection with the offering of shares) on a day-to-day basis. In addition, CFGIM and its affiliates provide services in connection with the preparation and dissemination of our organizational, offering and other documents and sales materials. In connection with these services, our advisor reimburses CFGIM and its affiliates for Organizational and Offering Expenses and operating expenses, including personnel and other expenses incurred on behalf of our advisor, at cost.

INVESTMENT OBJECTIVES AND POLICIES

General

We intend to undertake a global investment strategy to acquire a range of income-oriented commercial real estate and commercial real estate-related assets. We may invest across a diverse spectrum of real estate markets including office properties, retail centers, business and industrial parks (including warehouse, manufacturing and distribution facilities), multifamily properties (including student and senior housing), hospitality properties, healthcare properties and self storage properties, as well as other classifications of commercial real estate property. These assets may also include the investment in and origination of real estate-related investments such as mortgage, mezzanine, bridge, and other loans, debt securities such as mortgage-backed securities and those issued by other real estate companies, equity securities of real estate companies, as well as other real estate-related investments.

Our primary investment objectives are to:

Investment Policies

Primary Investment Strategy

We expect to use the net proceeds of this offering to acquire commercial real estate or commercial real estate-related assets located throughout the world. We will not focus our investment strategy towards any specific geographic location, however, we initially anticipate that up to 60% of assets may be located outside of the United States.

Our strategy to realize our investment objectives will be driven by a disciplined approach to evaluating the important factors for each individual investment. We believe affiliates of our advisor and the sub-advisors have the experience and ability to identify attractive assets, underwrite current operating performance, forecast potential changes to operating performance over time, and identify adequate exit strategies for assets, if required, as well as analyze the key metrics of the overall portfolio composition, both in the United States and globally. By using this approach, we expect to be able to identify favorable acquisition targets and effectively manage these assets to assist in achieving our primary investment objectives.

We intend to invest in a variety of commercial real estate assets, including real property and real estate-related debt and securities. We anticipate allocating at least 70% of our investments in commercial real properties and up to 30% of the portfolio in commercial real estate-related debt and securities. This target allocation is subject to change depending on real estate market conditions and the investment opportunities available to us.

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Generally, the purchase price that we will pay for any asset will be based on the fair market value of the asset as determined by a majority of our directors. In all cases in which we acquire an asset from any of our directors, our sponsors, our advisor or any of their affiliates, we will obtain an appraisal of fair market value by an independent appraiser selected by a majority of our Independent Directors and the transaction must be approved by a majority of our Independent Directors. We will rely on our own independent analysis and not solely on appraisals in determining whether to invest in a particular asset.

Investments in Real Properties

Given one of our primary objectives is to provide stable cash distributions, acquisitions of real property will predominately consist of existing income-producing, single or multi tenant properties as well as to-be-constructed properties that would be purchased generally upon full development and occupancy by income-producing tenants. We plan to further diversify our real property portfolio by acquiring a range of asset types whose cash flows, on a portfolio basis, are not concentrated to a specific industry.

We generally will hold fee title or a long-term leasehold estate in the real estate assets we acquire. We may also invest in operating companies or other entities that may own and operate assets that satisfy our investment objectives. Additionally, we may co-invest with other entities (both affiliated and non-affiliated with our advisor) in property ownership through joint ventures, limited liability companies, partnerships and other forms of ownership agreements.

We intend to purchase properties globally that meet our investment criteria and we are not limited to any specific geographic area. We believe that significant opportunities exist both within the United States and globally. While many of these real estate acquisitions will be in stabilized, well-developed markets, we may also acquire assets in developing countries or those in emerging or higher risk markets. We believe that our strategy to acquire real estate assets internationally will provide for a well-diversified portfolio that will optimize value to our stockholders.

We anticipate that some transactions may be structured as a sale-leaseback transaction in which we would acquire a property from a company which simultaneously leases the property back from us. This type of transaction may typically result in a long term lease with the company that could provide the company with an attractive financing alternative.

In addition, we may identify attractive opportunities in the course of acquiring income-oriented portfolios that may include certain assets that are vacant or otherwise require repositioning.

Except as set forth below in “Investment Objectives and Policies — Certain Investment Limitations,” we are not limited in the number or size of properties we may acquire or the percentage of net proceeds from this offering that we may invest in a single property. The number and mix of properties we acquire will depend upon real estate and market conditions and other circumstances, including the amount of net proceeds we realize in this offering.

The process to close a purchase of real property will include in-depth due diligence where affiliates of our advisor (or, if an international property, the applicable sub-advisor or its affiliates) evaluate the asset, verify certain documents, and obtain independent professional assessments which may include, subject to availability in certain jurisdictions, but is not limited to, the following:

We will not purchase any property unless and until we obtain what is generally referred to in the United States as a “Phase I” environmental site assessment, or the international equivalent, and generally are satisfied with the

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environmental status of the property. A Phase I environmental site assessment consists of a visual survey of the building and the property in an attempt to identify areas of potential environmental concerns, such as neighboring properties, to assess surface conditions or activities, contacting local governmental agency personnel, and performing a regulatory agency file search in an attempt to determine any known environmental concerns in the immediate vicinity of the property. A Phase I environmental site assessment does not generally include any sampling or testing of soil, groundwater or building materials from the property. With respect to international investments, we will seek to obtain an environmental assessment that is customary in the location where the property is being acquired.

We primarily will invest in commercial real estate properties with existing rent and expense schedules or newly constructed properties with predictable cash flows or in which a seller agrees to provide certain minimum income levels. Generally, we expect to invest in real estate properties with at least 80% occupancy and minimal near term tenant lease rollover at the time of acquisition. The primary properties we may invest in are listed below; however, we may pursue and purchase assets in additional real estate classifications that are not described below:

Although we intend to enter into standard commercial leases with our tenants, including standard multi-tenant commercial leases, triple-net leases and participating leases, the terms and conditions of any lease that we enter into may vary substantially from those we describe in this prospectus. We will execute new tenant leases and existing tenant lease renewals, expansions and extensions with terms that are dictated by the then current submarket conditions and, to the extent practicable, the verifiable creditworthiness of each particular tenant. Under standard multi-tenant commercial leases, tenants generally reimburse the landlord for their pro rata share of annual increases in operating expenses above the base amount of operating expenses established in the initial year of the lease term. Under triple-net leases, tenants generally are responsible for their pro rata share of building operating expenses in full for each year of the lease term. Under participating leases, which are common for retail properties, the landlord may share in a percentage of the tenant’s gross revenue.

We intend to use appropriate commercial practices to determine the creditworthiness of potential tenants and any personal guarantor or corporate guarantor of a potential tenant.

Investments in and Originating Loans

We may make and invest in commercial real estate loans, including first and junior mortgages, mezzanine loans and preferred equity loans, B-Notes, bridge loans, convertible mortgages, wraparound mortgage loans and construction mortgage loans. We may also invest in participations on mortgage loans. Further, we may invest in unsecured loans or

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loans secured by assets other than real estate. In addition, we expect to invest in real estate debt securities such as CMBS, CDOs or other real estate-related derivative products in the United States and globally. With respect to these real estate-related loans and securities, we would generally intend to hold these investments until their respective maturities, or at least for the medium term. This intention, however, will not preclude our routine portfolio assessment, the result of which may include a recommendation by our advisor to sell all or a portion of these assets.

We intend to undertake a detailed underwriting process when determining investment in, or origination of, real estate loans. In addition to assessing the underlying real property, including comprehensive financial, structural, operational and legal due diligence, we may assess the quantitative and qualitative attributes of the loans. Depending on the type of asset acquired, our advisor (or, if an international asset, the applicable sub-advisor) may evaluate such things as cash flow projections, loan terms, loan structure and the underlying risks of the property collateralizing the asset in order to assess the borrower’s ability to meet its debt service requirements and refinance the loan upon maturity.

When evaluating potential investments in, or the origination of, real estate loans, affiliates of our advisor (or, if an international asset, the applicable sub-advisor) will evaluate attributes of the asset including, but not limited to, the following:

Our mortgage loan investments may be subject to regulation by federal, state and local authorities and subject to laws and judicial and administrative decisions imposing various requirements and restrictions, including, among other things, regulating credit granting activities, establishing maximum interest rates and finance charges, requiring disclosure to customers, governing secured transactions and setting collection, repossession and claims handling procedures and other trade practices. In addition, certain states have enacted legislation requiring the licensing of mortgage bankers or other lenders, and these requirements may affect our ability to effectuate our proposed investments in mortgage loans. Commencing operations in these or other jurisdictions requiring such licensing may be dependent upon a finding of our financial responsibility, character and fitness.

Described below are the types of loans we may invest in and/or originate in addition to traditional commercial first mortgage loans:

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We may require other collateral to provide additional security for Mezzanine Products, including letters of credit, personal guarantees or collateral unrelated to the property. We may structure these investments so that we receive a stated fixed or variable interest rate or preferred cash flow return as well as a percentage of gross revenues and a percentage of the increase in the fair market value of the property payable upon maturity, refinancing or sale of the property. Our Mezzanine Products may also have prepayment lockouts, penalties, minimum profit hurdles and other mechanisms to protect and enhance returns in the event of premature repayment.

Mezzanine Products will typically range in size from $10 to $50 million and have terms of two to ten years. Mezzanine Products may have maturities that match the maturity of the related mortgage loan(s) but may have shorter terms and will usually have loan-to-value ratios between 66% and 95%. We may only invest in Mezzanine Products with loan-to-value ratios greater than 85% upon approval by our board of directors.

Mezzanine Products generally involve a lower degree of risk than a full equity investment in an entity that owns real property because the Mezzanine Product is generally secured by the ownership interests in the property-owning entity and, as a result, is senior to the remaining equity. Upon a default or change of control by the borrower under the Mezzanine Product, the lender generally can take immediate control and ownership of the property-owning entity, subject to the senior and junior mortgages on the property that stay in place in the event of a Mezzanine Product default and change of control of the borrower.

Mezzanine Products generally involve a higher degree of risk relative to the long-term senior mortgage secured by the underlying real property because the investment may become worthless as a result of foreclosure by the senior lender. In the event of a bankruptcy of the entity providing the pledge of its ownership interests as security, we may not have full recourse to the assets of such entity, or the assets of the entity may not be sufficient to satisfy the Mezzanine Product. If a borrower defaults on our Mezzanine Product or debt senior to our position, or in the event of a borrower bankruptcy, our Mezzanine Product will be satisfied only after the senior debt.

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The securitization process for CMBS is governed by one or more of the rating agencies, including Fitch, Moody’s and Standard & Poor’s, who determine the respective bond class sizes, generally based on a sequential payment structure. Bonds that are rated from AAA to BBB by the rating agencies are considered “investment grade.” Bond classes that are subordinate to the BBB class are considered “non-investment” grade. The respective bond class sizes are determined based on the review of the underlying collateral by the rating agencies. The payments received from the underlying loans are used to make the payments on the CMBS. Based on the sequential payment priority, the risk of nonpayment for the AAA CMBS is lower than the risk of nonpayment for the non-investment grade bonds. Accordingly, the AAA class is typically sold at a lower yield compared to the non-investment grade classes that are sold at higher yields. We may invest in investment grade and non-investment grade CMBS classes.

We will evaluate the risk of investment grade and non-investment grade CMBSs based on the credit risk of the underlying collateral and the risk of the transactional structure. The credit risk of the underlying collateral is crucial in evaluating the expected performance of an investment. Key variables in this assessment include rent levels, vacancy rates, supply and demand forecasts and tenant incentives (build-out incentives or other rent concessions) related to the underlying properties. We may utilize third party data providers to review loan level performance such as delinquencies and threats to credit performance. We will also review monthly servicing reports of the master and special servicers as well as reports from rating agencies. With respect to transactional structure, we will assess the structure of a particular CMBS transaction as well as utilize third party data providers for a structural sensitivity analysis. After assessing loan-level data and structural data, we will combine this information to forecast expected cash flows, probability of default and loss given a default.

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Investments in Equity Securities

In addition to our investments in our direct and indirect subsidiaries, we may invest in common and preferred real estate-related equity securities issued by publicly traded and private real estate companies that are not affiliated with us. These entities may include REITs and other “real estate operating companies,” such as real estate management companies and real estate development companies. Real estate-related equity securities are unsecured and typically subordinated to other obligations of the issuer. Our investments in real estate-related equity securities will involve risks relating to the particular issuer of the equity securities, including the financial condition and business outlook of the issuer. We may purchase real estate-related securities denominated in foreign currencies or securities of issuers that make investments in real estate located outside the United States. We may acquire real estate-related securities through tender offers, negotiated or otherwise, in which we solicit a target company’s stockholders to purchase their securities.

Other Potential Investments

Although we intend to use the net proceeds of this offering to acquire a diversified portfolio of real estate assets as outlined above, we may make investments in other assets that we have not described.

Joint Venture Investments

Our advisor will use CNL’s and the sub-advisors’ network of global relationships to enter into joint ventures, partnerships or other co-ownership arrangements with third parties (which may include affiliates of the MREAS Sub-Advisor or the MGPA Sub-Advisor) as well as entities affiliated with our advisor to acquire and operate real estate properties and other real estate-related assets. We believe that a joint venture creates an alignment of interest with a source of capital that will benefit our stockholders by leveraging our advisor’s network of global relationships, together with its acquisition, development and management expertise to achieve the following four primary objectives: (i) increase the return on Invested Capital; (ii) diversify our access to equity capital; (iii) “leverage” Invested Capital to promote our brand and increase market share; and (iv) obtain the participation of sophisticated partners in our real estate decisions. In determining whether to invest in a particular joint venture, our advisor will evaluate the real property or other real estate asset that such joint venture owns or is being formed to own under the same criteria described elsewhere in this prospectus for our selection of real property investments.

We may enter into joint ventures with other programs sponsored by CNL to acquire real estate assets or other real estate-related assets, provided that a majority of our directors, including a majority of our Independent Directors, approve the transaction as being fair and reasonable to us and on substantially the same terms and conditions as those that would be received by any other joint venturers.

We expect that from time to time our advisor will be presented with an opportunity to purchase all or a portion of a mixed-use property. In such instances, it is possible that we would work together with other programs sponsored by CNL to apportion the assets within the property among us and the other programs in accordance with the investment objectives of the various programs. In such event, after apportionment, the mixed-use property would be owned by two or more programs or joint ventures sponsored by CNL. The negotiation of how to divide the property among the various programs will not be at arm’s length and conflicts of interest will arise in the process. It is possible that in connection with the purchase of a portion of a mixed-use property or in the course of negotiations with other programs sponsored by CNL, the allocation of such mixed-use property may require us to purchase a property that we would otherwise consider inappropriate for our portfolio in order to also purchase a portion of a property that our advisor considers desirable.

We expect that if we participate in a joint venture or other real estate program with affiliates of the MREAS Sub-advisor or the MGPA Sub-advisor, such negotiations will be at arms’ length, and, to the extent we would be afforded an opportunity to participate with other investors in such a joint venture or real estate program, our participation would be on terms no less favorable than offered to other investors in the same joint venture or real estate program. In any event, any such transaction must be approved by our board of directors, including majority of our Independent Directors.

Currency Hedging

We expect to hedge our exposure to foreign currency risk for both the capital in, and relatively certain income generated from, our investments denominated in currencies other than U.S. dollars. We may utilize various derivatives, including, but not limited to, futures, cross-currency swaps, options and forward contracts to achieve this

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goal. Additionally, we expect to utilize local currency debt financing, where possible, to reduce foreign currency risk associated with our capital investment.

Interest Rate Hedging

We may utilize derivatives such as swaps, options, futures and forward contracts to hedge our exposure to interest rate movements. Our board of directors will determine the amount of interest rate exposure we will undertake at any given time based upon conditions in the local markets where we have investments.

Tax and Structuring

We will seek to minimize the effect of withholding, corporate, transfer and other taxes on our investments in the United States and in other countries. We may, however, incur tax liability as a result of our use of taxable REIT subsidiaries and other corporate entities. See “Federal Income Tax Considerations.”

Borrowing Policies

Although we will strive for diversification, the number of different properties and other assets that we can acquire will be affected by the amount of funds available to us. We intend to strategically leverage our real properties and possibly other assets and use debt as a means of providing additional funds for the acquisition of properties and the diversification of our portfolio. Our ability to increase our diversification through borrowing could be adversely affected by credit market conditions which result in lenders reducing or limiting funds available for loans, including loans secured by real estate. During times when interest rates on mortgage loans are high or financing is otherwise unavailable on a timely basis, we may purchase certain properties for cash with the intention of obtaining a mortgage loan for a portion of the purchase price at a later time.

We will generally seek to borrow on a non-recourse basis, but may also borrow at the corporate level or Operating Partnership level. Non-recourse indebtedness means the indebtedness of the borrower or its subsidiaries is secured only by specific assets without recourse to other assets of the borrower or any of its subsidiaries. Even with non-recourse indebtedness however, a borrower or its subsidiaries will likely be required to guarantee against certain breaches of representations and warranties such as those relating to the absence of fraud, misappropriation, misapplication of funds, environmental conditions and material misrepresentations. Because non-recourse financing generally restricts the lender’s claim on the assets of the borrower, the lender generally may only proceed against the asset securing the debt. This protects our other assets.

Although we have adopted a general policy to limit our borrowing to approximately 75% of the aggregate value of our assets with the value of an asset to be based on the purchase price of such asset at the time of purchase, except as otherwise set forth herein, there is no limit on the amount we may invest in any single property or other asset or on the amount we can borrow for the purchase of any individual property or other investment. Our policy may be altered at any time or suspended if necessary to pursue attractive investment opportunities. Our organizational documents limit the aggregate amount of indebtedness on our borrowings to no more than 300% of our Net Assets unless the excess borrowing is approved by a majority of our Independent Directors and is disclosed to stockholders in our next quarterly report, together with a justification for the excess. Our board of directors must review our aggregate borrowing from time to time, but not less than quarterly.

While we are able to leverage up to a maximum of 75% of the aggregate value of our assets, we plan to evaluate each investment opportunity and determine the appropriate leverage on a case-by-case basis, which may be more or less than the 75% aggregate maximum amount on a per asset basis. Our intent is to target our aggregate borrowings to between 30% to 60% of the aggregate value of our assets, once we own a seasoned and stable asset portfolio. We intend to have lower leverage than our policy permits, although initially our aggregate borrowings may be greater than 30% to 60% of the aggregate value of our assets.

Our advisor may seek to refinance indebtedness, such as when a decline in interest rates makes it beneficial to prepay an existing mortgage or other debt, when an existing mortgage or other loan matures or if an attractive investment becomes available and the proceeds from the refinancing can be used to purchase the investment.

We may not borrow money from our sponsor, any of our directors or from our advisor, its affiliates and related parties unless the loan is approved by a majority of the directors (including a majority of our Independent Directors) not otherwise interested in the transaction upon a determination by such directors that the transaction is fair, competitive and commercially reasonable and no less favorable to us than a comparable loan between unaffiliated parties.

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Disposition Policies

As each of our investments reach what we believe to be its optimum value during the expected holding periods of assets of the fund, we will consider disposing of the investment and may do so for the purpose of either distributing the Net Sales Proceeds to our stockholders or investing the proceeds in other assets. The determination of when a particular investment should be sold or otherwise disposed of will be made after considering all of the relevant factors, including prevailing and projected economic and market conditions, whether the value of the property or other investment is anticipated to decline substantially, and whether we could apply the proceeds from the sale of the asset to make other investments consistent with our investment objectives.

A determination as to whether to sell an asset will also be based on whether the sale of the asset would constitute a prohibited transaction under the Code or otherwise impact our status as a REIT. Our ability to dispose of property during the first two years following its acquisition is restricted to a substantial extent as a result of the rules that we must comply with to qualify as a REIT. Under applicable provisions of the Code regarding prohibited transactions by REITs, a REIT that sells property other than foreclosure property that is deemed to be inventory or property held primarily for sale in the ordinary course of business is deemed a “dealer” and subject to a 100% penalty tax on the net income from any such transaction. As a result, our board of directors will attempt to structure any disposition of our properties to avoid this penalty tax through reliance on safe harbors available under the Code for properties held at least two years or through the use of a TRS. See “Federal Income Tax Considerations — Operational Requirements — Prohibited Transactions.”

Our board of directors will explore potential liquidity opportunities, including the sale of either us or our assets, potential merger opportunities, or the Listing of our common stock. Our board of directors must consider, but is not required to commence, a liquidity event for our stockholders, which may include a liquidation of our assets, a sale of the Company or a Listing of our common stock on or before April 23, 2017, which is the seventh anniversary of the effective date of this offering. We do not know at this time what macro-or micro-circumstances will exist in the future and therefore we do not know what factors our board of directors will consider in determining whether to pursue a liquidity event in the future. Therefore, we have not established any pre-determined criteria. A liquidation of our assets or a sale of the Company would require the approval of our stockholders. We are under no obligation to actually sell our portfolio or list our shares at any particular time. We cannot assure you that we will be able to sell our assets at prices that result in us achieving our investment objectives. In the event of a liquidation, after commencement of such liquidation, we would continue in existence until all properties and other assets are sold.

Change in Investment Policies and Limitations

Our articles of incorporation require that our Independent Directors review our investment policies at least annually to determine that the policies we follow are in the best interest of our stockholders. Each determination and the basis therefore must be set forth in the minutes of our board of directors. The methods of implementing our investment policies also may vary as new investment techniques are developed. The methods of implementing our investment policies, except as otherwise provided in our organizational documents, may be altered by a majority of our directors, including a majority of our Independent Directors, without the approval of our stockholders. Our board of directors may take such action, without stockholder approval, to cause the termination of our qualification as a REIT.