Filed Pursuant to Rule 424(b)(3)
Registration No. 333-190698

AMERICAN REALTY CAPITAL HOSPITALITY TRUST, INC.
 
SUPPLEMENT NO. 16, DATED MARCH 11, 2015,
TO THE PROSPECTUS, DATED JANUARY 7, 2014

This prospectus supplement, or this Supplement No. 16, is part of the prospectus of American Realty Capital Hospitality Trust, Inc., or the Company, dated January 7, 2014, or the Prospectus. This Supplement No. 16 supersedes and replaces all previous supplements and should be read in conjunction with the Prospectus. This Supplement No. 16 will be delivered with the Prospectus. Unless the context suggests otherwise, the terms “we,” “us” and “our” used herein refer to the Company, together with its consolidated subsidiaries.

The purposes of this Supplement No. 16 are to:

“Hampton Inn,” “Hampton Hotels,” “Homewood Suites,” “Embassy Suites” and “Hilton Garden Inn” are each a registered trademark of Hilton Worldwide or one of its affiliates. All references below to “Hilton” mean Hilton Worldwide and all of its affiliates and subsidiaries, and their respective officers, directors, agents, employees, accountants and attorneys. Hilton is not responsible for the content of this prospectus supplement, whether relating to hotel information, operating information, financial information, Hilton’s relationship with the Company or its affiliates, or otherwise. Hilton is not involved in any way, whether as an “issuer” or “underwriter” or otherwise, in the offering by the Company and receives no proceeds from the offering. Hilton

TABLE OF CONTENTS

has not expressed any approval or disapproval regarding this prospectus supplement or the offering related to this prospectus supplement, and the grant by Hilton of any franchise or other rights to the Company or its affiliates shall not be construed as any expression of approval or disapproval. Hilton has not assumed, and shall not have, any liability in connection with this prospectus supplement or the offering related to this prospectus supplement.

“Westin” is a registered trademark of Starwood Hotels & Resorts Worldwide or one of its affiliates. All references below to “Starwood” mean Starwood Hotels & Resorts Worldwide and all of its affiliates and subsidiaries, and their respective officers, directors, agents, employees, accountants and attorneys. Starwood is not responsible for the content of this prospectus supplement, whether relating to hotel information, operating information, financial information, Starwood’s relationship with the Company or its affiliates, or otherwise. Starwood is not involved in any way, whether as an “issuer” or “underwriter” or otherwise, in the offering by the Company and receives no proceeds from the offering. Starwood has not expressed any approval or disapproval regarding this prospectus supplement or the offering related to this prospectus supplement, and the grant by Starwood of any franchise or other rights to the Company or its affiliates shall not be construed as any expression of approval or disapproval. Hilton has not assumed, and shall not have, any liability in connection with this prospectus supplement or the offering related to this prospectus supplement.

“Courtyard by Marriott,” “Fairfield Inn,” “Fairfield Inn & Suites,” “TownePlace Suites,” “Marriott,” “SpringHill Suites” and “Residence Inn” are each a registered trademark of Marriott International, Inc. or one of its affiliates. All references below to “Marriott” mean Marriott International, Inc. and all of its affiliates and subsidiaries, and their respective officers, directors, agents, employees, accountants and attorneys. Marriott is not responsible for the content of this prospectus supplement, whether relating to hotel information, operating information, financial information, Marriott’s relationship with the Company and its affiliates or otherwise. Marriott is not involved in any way, whether as an “issuer” or “underwriter” or otherwise, in the offering by the Company and receives no proceeds from the offering. Marriott has not expressed any approval or disapproval regarding this prospectus supplement or the offering related to this prospectus supplement, and the grant by Marriott of any franchise or other rights to the Company shall not be construed as any expression of approval or disapproval. Marriott has not assumed, and shall not have, any liability in connection with this prospectus supplement or the offering related to this prospectus supplement.

“Hyatt,” “Hyatt House” and “Hyatt Place” are each a registered trademark of Hyatt Hotels Corporation or one of its affiliates. All references below to “Hyatt” mean Hyatt Hotels Corporation and all of its affiliates and subsidiaries, and their respective officers, directors, agents, employees, accountants and attorneys. Hyatt is not responsible for the content of this prospectus supplement, whether relating to hotel information, operating information, financial information, Hyatt’s relationship with the Company or its affiliates, or otherwise. Hyatt is not involved in any way, whether as an “issuer” or “underwriter” or otherwise, in the offering by the Company and receives no proceeds from the offering. Hyatt has not expressed any approval or disapproval regarding this prospectus supplement or the offering related to this prospectus supplement, and the grant by Hyatt of any franchise or other rights to the Company or its affiliates shall not be construed as any expression of approval or disapproval. Hyatt has not assumed, and shall not have, any liability in connection with this prospectus supplement or the offering related to this prospectus supplement.

“Holiday Inn” and “Holiday Inn Express” are each a registered trademark of Intercontinental Hotels Group or one of its affiliates. All references below to “Intercontinental” mean Intercontinental Hotels Group and all of its affiliates and subsidiaries, and their respective officers, directors, agents, employees, accountants and attorneys. Intercontinental is not responsible for the content of this prospectus supplement, whether relating to hotel information, operating information, financial information, Intercontinental’s relationship with the Company or its affiliates, or otherwise. Intercontinental is not involved in any way, whether as an “issuer” or “underwriter” or otherwise, in the offering by the Company and receives no proceeds from the offering. Intercontinental has not expressed any approval or disapproval regarding this prospectus supplement or the offering related to this prospectus supplement, and the grant by Intercontinental of any franchise or other rights to the Company or its affiliates shall not be construed as any expression of approval or disapproval. Hyatt has not assumed, and shall not have, any liability in connection with this prospectus supplement or the offering related to this prospectus supplement.

TABLE OF CONTENTS

OPERATING INFORMATION

Status of the Offering

We commenced our reasonable best efforts initial public offering of up to 80.0 million shares of common stock on January 7, 2014 (excluding shares to be issued under the distribution reinvestment plan, or DRIP). On February 3, 2014, we satisfied the general escrow conditions of our initial public offering of common stock. On such date, we received and accepted aggregate subscriptions equal to the minimum of $2.0 million in shares of common stock, broke escrow and issued shares to AR Capital, LLC, the parent of our sponsor, in the amount of $0.5 million at a purchase price of $22.50 per share. On June 30, 2014, we received and accepted aggregate subscriptions in excess of $20.0 million in shares of common stock and broke escrow in Ohio and Washington. On September 12, 2014, we received and accepted aggregate subscriptions in excess of $100.0 million in shares of common stock and broke escrow in Pennsylvania. Accordingly, we are now accepting subscriptions from residents of all states.

We will offer shares of our common stock until January 7, 2016, unless the offering is extended in accordance with the Prospectus, provided that the offering will be terminated if all 80.0 million shares of our common stock are sold before such date (subject to our right to reallocate shares offered pursuant to the DRIP for sale in our primary offering).

Closing of Grace Acquisition

On February 27, 2015, we closed the acquisition of a portfolio of 116 hotel assets (the “Grace Portfolio”). The aggregate purchase price of the Grace Portfolio was approximately $1.8 billion, exclusive of closing costs. We funded approximately $230.1 million of the purchase price with cash-on-hand raised in our initial public offering, approximately $903.9 million through the assumption of existing indebtedness collateralized by 96 of the hotels in the Grace Portfolio and approximately $227.0 million by incurring new indebtedness collateralized by the remaining 20 hotels in the Grace Portfolio and one of our existing hotels. The remaining $447.1 million of the purchase price was satisfied by the issuance to affiliates of the sellers of the Grace Portfolio of preferred equity interests in two of our indirect subsidiaries that are indirect owners of the 116 hotels comprising the Grace Portfolio.

Management and Accounting Firm Updates

Effective February 3, 2014, pursuant to the approval of our audit committee, we dismissed Grant Thornton LLP, or Grant Thornton, and engaged KPMG LLP as our independent registered public accounting firm effective as of that same date. Grant Thornton’s reports on our financial statements as of August 7, 2013 and our financial statements of our predecessor portfolio did not contain any adverse opinions or disclaimers of opinions and were not qualified or modified as to uncertainty, audit scope or accounting principles. Our dismissal of Grant Thornton was not the result of any disagreements with Grant Thornton.

On May 23, 2014, Amy B. Boyle resigned from her roles as chief financial officer, treasurer and secretary of the Company, effective as of that same date. Ms. Boyle did not resign pursuant to any disagreement with the Company. Simultaneously with Ms. Boyle’s resignation, the board of directors of the Company, or the Board, appointed Nicholas Radesca to serve as the Company’s interim chief financial officer, treasurer and secretary. Mr. Radesca subsequently resigned once we appointed a new chief financial officer.

On September 12, 2014, Portia Sue Perrotty resigned as a member of the Board. Ms. Perrotty did not resign pursuant to any disagreement with the Company. Ms. Perrotty had served as an independent director and as a member of our audit committee since September 2013. Simultaneous with Ms. Perrotty’s resignation, the Board appointed Robert H. Burns as a member of the Board and our audit committee in accordance with the terms of the Company’s bylaws. For a description of Mr. Burns’ experience, see his biography set forth under “Prospectus Updates — Management” below.

On November 20, 2014, the Board appointed Jonathan P. Mehlman, the executive vice president and chief investment officer of the Company, to serve as the Company’s chief executive officer and president. Mr. Mehlman also serves as co-chief executive officer and president of the Company’s advisor and as chief executive officer and president of the Company’s property manager. Simultaneously with his appointment as chief executive officer and president of the Company, Mr. Mehlman resigned from his roles as executive vice

TABLE OF CONTENTS

president and chief investment officer of the Company, the Company’s advisor and the Company’s property manager. In connection with Mr. Mehlman’s appointment as chief executive officer and president of the Company, William M. Kahane resigned from his roles as chief executive officer and president of the Company. Mr. Kahane also resigned from his roles as co-chief executive officer and president of the Company’s advisor and as chief executive officer and president of the Company’s property manager. Mr. Kahane continued to serve in his capacity as a director of the Company.

On December 10, 2014, the Board appointed Edward T. Hoganson, previously the executive vice president of the Company’s sub-property manager, to serve as the Company’s chief financial officer, treasurer and secretary effective as of December 15, 2014. Mr. Hoganson also serves as chief financial officer, treasurer and secretary of the Company’s advisor and property manager. In connection with Mr. Hoganson’s appointment as chief financial officer, treasurer and secretary of the Company, Nicholas Radesca resigned from his roles as interim chief financial officer, treasurer and secretary of the Company and of the Company’s advisor and property manager.

On December 29, 2014, the Board appointed William M. Kahane, then a member of the Board, to serve as executive chairman of the Board, effective as of that same date. In connection with Mr. Kahane’s appointment as executive chairman of the Board, Nicholas S. Schorsch resigned from his role as chairman of the Board.

Simultaneously with the resignation of Mr. Schorsch, the Board took action to reduce the number of directors constituting the entire Board to four directors pursuant to Article III, Section 2 of the Company’s bylaws, with such reduction in size of the Board being effective immediately following the resignation of Mr. Schorsch.

In addition, on December 29, 2014, the Board appointed Stanley R. Perla, then an independent director and chairman of our audit committee, as lead independent director.

Engagement of Deloitte & Touche, LLP

On December 19, 2014, AR Capital, LLC, the parent of our sponsor, engaged Deloitte & Touche, LLP, or Deloitte, to provide outsourced internal audit services on behalf of the publicly registered, nontraded companies that AR Capital, LLC directly or indirectly sponsors, including the Company. Pursuant to the engagement, Deloitte works with our management to develop an annual risk-based internal audit work plan and budget which will be presented to our audit committee for approval, provide our audit committee with a quarterly update on its work and formally report the results of its work to our audit committee.

Shares Currently Available for Sale

As of February 27, 2015, there were 13.8 million shares of our common stock outstanding. As of February 27, 2015, there were approximately 66.2 million shares of our common stock available for sale, excluding shares available under our DRIP.

Distributions

On February 3, 2014, the Board authorized, and we began declaring, distributions payable to stockholders of record each day during the applicable period at a rate equal to $0.00465753425 per share per day or $1.70 per annum. Distributions are payable on the first business day following each month-end to stockholders of record at the close of business each day during the prior month. There can be no assurance that we will continue to pay distributions to our stockholders in any particular amount, at any particular time, or at all.

The amount of distributions payable to our stockholders is determined by the Board and is dependent on a number of factors, including funds available for distribution; requirements of Maryland law; and annual distribution requirements needed to qualify and maintain our status as a real estate investment trust under the Internal Revenue Code of 1986, as amended. The Board may reduce the amount of distributions paid or suspend distribution payments. There is no assurance that we will continue paying distributions at the current rate or on the current schedule, if at all.

Our organizational documents permit us to pay distributions in unlimited amounts from any source, including proceeds from this offering, which will reduce the amount of capital we ultimately invest in properties or other permitted investments, and may negatively impact the value of your investment.

TABLE OF CONTENTS

Status of Distributions

The following table compares cumulative distributions paid to cumulative net income and cash flow from operations (each as calculated in accordance with GAAP) and FFO for the period from July 25, 2013 (date of inception) through September 30, 2014 (in thousands):

		For the Period from July 25, 2013 (date of inception) to September 30, 2014
Distributions paid:
Common stockholders in cash		$	500
Common stockholders reinvested through DRIP			301
Total distributions paid		$	801
Reconciliation of net loss:
Revenues		$	24,167
Acquisition and transaction related			(7,610	)
Depreciation and amortization			(1,919	)
Other operating expenses			(18,958	)
Other non-operating expenses			(3,231	)
Income tax			(1,368	)
Net loss (in accordance with GAAP)		$	(8,919	)
Cash flows used in operations		$	(3,034	)
FFO		$	(6,762	)

For the period from our inception, on July 25, 2013, through September 30, 2014, cash flows provided by operations, calculated in accordance with GAAP, did not cover any of our distributions. As shown in the table above, we funded distributions with proceeds from our offering, including proceeds from our offering which were reinvested in common stock issued pursuant to our DRIP. To the extent we pay distributions in excess of cash flows provided by operations, your investment may be adversely impacted. Since inception, our cumulative distributions have exceeded our cumulative FFO.

Compensation Paid To Affiliates

Set forth below is a summary of the most significant fees and expenses that we have incurred as well as paid or reimbursed to affiliates of our sponsor including our advisor and our dealer manager during the nine months ended September 30, 2014. During the period from our inception on July 25, 2013 through September 30, 2014, the amount of compensation, fees, distributions and expense reimbursements that we paid or reimbursed to the respective affiliates of our sponsor including our advisor and our dealer manager was $21.8 million, and, as of September 30, 2014, $7.7 million of such amounts, including both fees and expense reimbursements, was accrued and unpaid.

		Nine Months Ended September 30, 2014
Commissions and fees incurred from our dealer manager		$	11,763
Compensation and reimbursement for services provided by our advisor and its affiliates			1,652
Acquisition fees incurred from our advisor			1,598
Financing coordination fees incurred from our advisor			815
Management fees and reimbursable expenses incurred from our property manager and our sub-property manager			2,160
Transaction fees and expenses incurred from our dealer manager and RCS Advisory			3,170
Advisory and investment banking fee incurred from our dealer manager			345
Total		$	21,503

TABLE OF CONTENTS

PROSPECTUS UPDATES

Cover Page

The sixth paragraph on the cover page of the Prospectus is hereby deleted in its entirety.

The following disclosure is hereby added as the ninth bullet on the cover page of the Prospectus.

Investor Suitability Standards

The section “Investor Suitability Standards — Massachusetts, Ohio, Oregon and New Mexico” on page ii of the Prospectus is hereby replaced in its entirety with the following disclosure.

“Massachusetts

New Mexico and Ohio

Oregon

The disclosure under the sub-heading “Iowa” on page ii of the Prospectus is hereby replaced in its entirety with the following disclosure.

“Iowa

TABLE OF CONTENTS

The disclosure under the sub-heading “Nebraska” on page ii of the Prospectus is hereby replaced in its entirety with the following disclosure.

“Nebraska

The bullet point under the section “Investor Suitability Standards — New Jersey” on page ii of the Prospectus is hereby replaced in its entirety with the following disclosure.

“An investor must have either (a) a minimum liquid net worth of at least $100,000 and a minimum annual gross income of not less than $85,000, or (b) a minimum liquid net worth of $350,000. For these purposes, “liquid net worth” is defined as that portion of net worth (total assets exclusive of home, home furnishings and automobiles, minus total liabilities) that consists of cash, cash equivalents and readily marketable securities. In addition, a New Jersey investor’s investment in us, our affiliates, and other non-publicly traded direct investment programs (including real estate investment trusts, business development programs, oil and gas programs, equipment leasing programs and commodity pools, but excluding unregistered, federally and state exempt private offerings) may not exceed ten percent (10%) of his or her liquid net worth. Note that New Jersey investors cannot participate in the DRIP feature that reinvests distributions into subsequent affiliated programs.”

The bullet point under the section “Investor Suitability Standards — Alabama” on page iii of the Prospectus is hereby replaced in its entirety with the following disclosure.

“In addition to the general suitability requirements described above, shares will only be sold to an Alabama resident that represents that he or she has a liquid net worth of at least 10 times the amount of their investment in this real estate investment program and its affiliates. Note that Alabama investors cannot participate in the DRIP feature that reinvests distributions into subsequent affiliated programs.”

The section “Investor Suitability Standards — California” on page iii of the Prospectus is hereby replaced in its entirety with the following disclosure.

“California

Investors must have either (a) a liquid net worth of at least $250,000 or (b) a minimum liquid net worth of at least $70,000 and a minimum annual gross income of at least $70,000. In addition, investors cannot invest more than 10% of their net worth in us.”

The last paragraph of the section “Investor Suitability Standards” on page iii of the Prospectus is hereby replaced in its entirety with the following disclosure.

“In order to ensure adherence to the suitability standards described above, requisite criteria must be met, as set forth in the subscription agreement in the form attached hereto as Appendix C-1. In addition, our sponsor, our dealer manager and the soliciting dealers, as our agents, must make every reasonable effort to determine that the purchase of our shares is a suitable and appropriate investment for an investor. In making this determination, the soliciting dealers will rely on relevant information provided by the investor in the investor’s subscription agreement, including information regarding the investor’s age, investment objectives, investment experience, income, net worth, financial situation, other investments and any other pertinent information, including whether (i) the participant is or will be in a financial position appropriate to enable him to realize the benefits described in the prospectus, (ii) the participant has a fair market net worth sufficient to sustain the risks inherent in the investment program, and (iii) the investment program is otherwise suitable for the participant. Alternatively, except for investors in Alabama, Arkansas, Kentucky, Maryland, Massachusetts, Nebraska, New Jersey, North Carolina or Tennessee, the requisite criteria may be met using the multi-offering

TABLE OF CONTENTS

subscription agreement in the form attached hereto as Appendix C-2, which may be used to purchase shares in this offering as well as shares of other products distributed by our dealer manager; provided, that an investor has received the relevant prospectus(es) and meets the requisite criteria and suitability standards for any such other product(s). Executed subscription agreements will be maintained in our records for six years.”

Cautionary Note Regarding Forward-Looking Statements

The following disclosure replaces in its entirety the disclosure under the heading “Cautionary Note Regarding Forward-Looking Statements” on page iv of the Prospectus.

“This prospectus contains forward-looking statements. You can identify forward-looking statements by the use of forward-looking terminology such as “believes,” “expects,” “may,” “will,” “would,” “could,” “should,” “seeks,” “intends,” “plans,” “projects,” “estimates,” “anticipates,” “predicts” or “potential,” or by the negative of these words and phrases, or by similar words or phrases. You can also identify forward-looking statements by discussions of strategy, plans or intentions. Statements regarding the following subjects may be impacted by a number of risks and uncertainties which may cause our actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements:

The forward-looking statements contained in this prospectus reflect our beliefs, assumptions and expectations of our future performance, taking into account all information currently available to us. These beliefs, assumptions and expectations are subject to risks and uncertainties and can change as a result of many possible events or factors, not all of which are known to us. If a change occurs, our business, financial condition, liquidity and results of operations may vary materially from those expressed in our forward-looking statements. You should carefully consider these risks before you make an investment decision with respect to our common stock.

For more information regarding risks that may cause our actual results to differ materially from any forward-looking statements, see “Risk Factors.” We disclaim any obligation to publicly update or revise any forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events or other changes.

TABLE OF CONTENTS

This prospectus contains estimates and other statistical data that we obtained or derived from, or that we estimated in good faith based partly on, industry publications, surveys, forecasts and reports, governmental publications, reports by market research firms or other independent sources. Industry publications generally indicate that they have obtained their information from sources believed to be reliable, but do not guarantee the accuracy and completeness of their information. This information involves a number of assumptions and limitations, and you are cautioned not to give undue weight to these estimates. Although we have not independently verified the accuracy or completeness of the data contained in these industry publications and reports, based on our industry experience we believe that the publications are reliable and the conclusions contained in the publications and reports are reasonable.”

Prospectus Summary

The first parenthetical in the bullet point titled “Exit Strategy” under the question “What are your investment objectives?” beginning on page 2 of the Prospectus is hereby replaced in its entirety with the following disclosure.

“(including an entity under common control with the parent of our sponsor)”

The first sentence under the question “What is the experience of your sponsor?” on page 3 of the Prospectus is hereby replaced with the following disclosure.

“American Realty Capital IX, LLC, or our sponsor, is indirectly controlled by William M. Kahane, the executive chairman of our board of directors, and Nicholas S. Schorsch.”

The second paragraph of the question “Who is your advisor and what will its responsibilities be?” on page 3 of the Prospectus is hereby replaced in its entirety with the following disclosure.

“Our advisor is responsible for making decisions regarding the selection and the negotiation of real estate investments. Our advisor recommends all investments and dispositions to our board of directors. Other major decisions to be approved by our advisor, subject to the direction of our board of directors, include decisions with respect to the retention of investment banks, marketing methods with respect to this offering, the termination of this offering, the initiation of a follow-on offering, mergers and other change-of-control transactions, and certain significant press releases. Jonathan P. Mehlman and Edward T. Hoganson, who are executive officers of our company, are also executive officers of our advisor. Mr. Mehlman has 22 years of experience in the hospitality industry. Mr. Hoganson has over 15 years of experience in the hospitality industry. Bruce D. Wardinski, Special Advisory Director to the chief executive officer of our advisor, has over 26 years of experience in the hospitality industry.”

The second paragraph of the question “What is the experience of your advisor?” on page 4 of the Prospectus is hereby replaced in its entirety with the following disclosure.

“Mr. Wardinski has over 26 years of experience in the hospitality sector. Mr. Mehlman, our advisor’s chief executive officer and president, has 22 years of experience in the hospitality sector, while Mr. Hoganson, our advisor’s chief financial officer, treasurer and secretary, has more than 15 years of financial and hospitality industry management experience.”

The third paragraph of the question “Who is your property manager, your sub-property manager and what will their responsibilities be?” on page 4 of the Prospectus is hereby replaced in its entirety with the following disclosure.

“The sub-property manager is managed by two officers: James Carroll and Pierre Donahue. Collectively, Messrs. Carroll and Donahue have 19 years of experience in the hospitality industry. These officers are subject to the oversight of our sub-property manager’s board of managers, which includes Nicholas S. Schorsch, William M. Kahane and Simón Pedro Barceló Vadell. Messrs. Schorsch and Kahane control AR Capital, LLC. For a more detailed discussion about our property manager and affiliated sub-property manager, see “Management — General — The Property Manager and The Sub-Property Manager.”

TABLE OF CONTENTS

The following disclosure is hereby added as the ninth bullet under the question “Are there any risks involved in an investment in your shares” on page 5 of the Prospectus.

The disclosure under the question “What is the role of our board of directors?” on page 6 of the Prospectus is hereby replaced with the following disclosure.

“We operate under the direction of our board of directors, the members of which are accountable to us and our stockholders as fiduciaries. We have four members of our board of directors, three of whom are independent of our sponsor and its affiliates. Our directors are elected annually by the stockholders.”

The first parenthetical in the second paragraph of the question “What are your exit strategies?” on page 12 of the Prospectus is hereby replaced in its entirety with the following disclosure.

“(including an entity under common control with the parent of our sponsor)”

Note 6 to the chart under the question “What conflicts does your sponsor face?” on page 13 of the Prospectus is hereby replaced in its entirety with the following disclosure.

“Our dealer manager is owned by an entity which is under common control with the parent of our sponsor.”

The paragraph under the question “What are the fees that you pay to your advisor, your property manager, your sub-property manager, your dealer manager, their affiliates and your directors?” on page 13 of the Prospectus is hereby replaced with the following disclosure.

“Our advisor and its affiliates have received, and will receive, compensation and reimbursement for services relating to this offering and our ordinary course of operations. In addition, we have entered into agreements outside of our ordinary course of operations that provide for additional compensation to an affiliate of our dealer manager in connection with the acquisition (the “Grace Acquisition”) of the fee simple or leasehold interests in 116 hotels (the “Portfolio”) we completed on February 27, 2015. See “Conflicts of Interest — Agreements with RCAP Related to the Grace Acquisition.” The most significant items of compensation and reimbursement are included in the table below. We reimburse our advisor on a monthly basis for offering and organization expense advances that our advisor or any of its affiliates may incur on our behalf, but only to the extent that such reimbursement would not exceed 2.0% of gross offering proceeds over the life of this offering. In the sole discretion of our advisor, our advisor may elect to have certain fees and commissions (not including any asset management fees) paid, in whole or in part, in cash or shares of our common stock. Once the proceeds for this offering have been fully invested, the aggregate amount of acquisition fees and financing coordination fees may not exceed 1.9% of the contract purchase price for all of the assets acquired. Pursuant to our charter, the total amount of acquisition fees, acquisition expense reimbursements, financing coordination fees, disposition fees and subordinated distributions by the operating partnership payable to the advisor (or its assignees), together with the fair market value of any shares of restricted stock granted under our restricted share plan, in the aggregate from inception to a liquidity event, may not exceed (a) 6% of all properties’ aggregate gross contract purchase price, (b) as determined each quarter for the preceding four consecutive fiscal quarters, the greater, in the aggregate, of 2% of average invested assets and 25% of net income other than any additions to reserves for depreciation, bad debt, impairments or other similar non-cash reserves and excluding any gain from the sale of assets for that period, (c) disposition fees, if any, of up to 3% of the contract sales price of all properties that we sell and (d) 15% of remaining net sales proceeds after return of capital contributions plus payment to investors of a 6% cumulative, pre-tax, non-compounded return on the capital contributed by investors. For a more detailed discussion of compensation, see the table included in the “Management Compensation” section of this prospectus, including the footnotes thereto.”

TABLE OF CONTENTS

The following disclosure is added as the second sentence under the heading “How do I subscribe for shares?” on page 24 of the Prospectus.

“Alternatively, unless you are an investor in Alabama, Arkansas, Kentucky, Maryland, Massachusetts, Nebraska, New Jersey, North Carolina, Oregon or Tennessee, you may complete and sign the multi-offering subscription agreement in the form attached hereto as Appendix C-2, which may be used to purchase shares in this offering as well as shares of other products distributed by our dealer manager; provided, however, that an investor has received the relevant prospectus(es) and meets the requisite criteria and suitability standards for any such other product(s).”

The second sentence of the second paragraph under the question “Who is the transfer agent?” on page 29 of the Prospectus is hereby replaced in its entirety with the following disclosure.

“Our transfer agent is owned by an entity which is under common control with AR Capital, LLC, the parent of our sponsor.”

TABLE OF CONTENTS

Risk Factors

The following disclosure is hereby added as the first risk factor on page 30 of the Prospectus.

“Disclosures made by American Realty Capital Properties, Inc., or ARCP, an entity previously sponsored by the parent of our sponsor may adversely affect our ability to raise substantial funds.

Beginning in October 2014, and including disclosures made on March 2, 2015, ARCP, an entity previously sponsored by the parent of our sponsor has disclosed various items that have had a material adverse effect on its business, results of operations and financial condition. These items include the need to restate previously issued financial statements that were intentionally not corrected, a lack of effective internal control over financial reporting and disclosure controls and procedures as well as the presence of various regulatory investigations. See “Prior Performance Summary — Adverse Business Developments and Conditions.”

Since the initial announcement in October, a number of participating broker-dealers temporarily suspended their participation in the distribution of our offering. Although certain of these broker-dealers have reinstated their participation, we cannot predict the length of time the remaining temporary suspensions will continue or whether all participating broker-dealers will reinstate their participation in the distribution of our offering. As a result, our ability to raise substantial funds may be adversely impacted.”

The following risk factor replaces in its entirety the risk factor under the heading “Distributions paid from sources other than our cash flow from operations, particularly from proceeds of this offering, will result in us having fewer funds available for the acquisition of properties and other real estate-related investments and may dilute your interests in us, which may adversely affect our ability to fund future distributions with cash flows from operations and may adversely affect your overall return.” beginning on page 32 of the Prospectus.

“Since our inception, all of our distributions have been paid from offering proceeds. Distributions paid from sources other than our cash flows from operations, particularly from proceeds of this offering, will result in us having fewer funds available for the acquisition of properties and other real estate-related investments and may dilute your interests in us, which may adversely affect our ability to fund future distributions with cash flows from operations and may adversely affect your overall return.

Our cash flows used in operations were $3.0 million for the nine months ended September 30, 2014, and we have had negative cash flows from operations since our inception, in July 2013. During the nine months ended September 30, 2014, we paid distributions of $0.8 million, all of which was funded from offering proceeds, including offering proceeds which were reinvested in common stock issued pursuant to the DRIP. Since our inception, all of our distributions have been paid from offering proceeds.

We expect that future distributions will be paid from our cash flow from operations following the acquisition of the Grace Portfolio, but there can be no assurance we will be able to generate sufficient cash flow from operations to do so. We may continue in the future to pay distributions from sources other than from our cash flows from operations, including the net proceeds from this offering.

Using proceeds from our offering to pay distributions, especially if the distributions are not reinvested through our DRIP, reduces cash available for investment in assets or other purposes and will likely reduce our per share stockholder equity.

We may continue not to generate sufficient cash flows from operations to fully pay distributions, and our ability to use cash flows from operations to pay distributions in the future may also be adversely impacted by our substantial indebtedness. See “— As a result of the additional indebtedness incurred and the issuance of the preferred equity interests to acquire the Grace Portfolio, we may experience a potential material adverse effect on our financial condition and results of operations.” If we have not generated sufficient cash flows from our operations and other sources, such as from borrowings, the sale of additional securities, advances from our advisor, and our advisor’s deferral, suspension or waiver of its fees and expense reimbursements, to fund distributions, we may continue to use the proceeds from our offering, although we currently intend to use all of the proceeds from our offering to reduce our borrowings, which could limit our ability to pay distribution from proceeds from our offering for some time. See “— We intend to use substantially all

TABLE OF CONTENTS

available offering proceeds following the acquisition of the Grace Portfolio to reduce our borrowings to our intended limit, which may limit our ability to pay distributions or acquire additional properties for some time.” Moreover, our board of directors may change our distribution policy, in its sole discretion, at any time. Distributions made from offering proceeds are a return of capital to stockholders, from which we will have already paid offering expenses in connection with our IPO. We have not established any limit on the amount of proceeds from our offering that may be used to fund distributions, except that, in accordance with our organizational documents and Maryland law, we may not make distributions that would: (1) cause us to be unable to pay our debts as they become due in the usual course of business; (2) cause our total assets to be less than the sum of our total liabilities plus senior liquidation preferences, if any; or (3) jeopardize our ability to qualify as a REIT.

Funding distributions from borrowings could restrict the amount we can borrow for investments, which may, among other things, affect our earnings. Funding distributions with the sale of assets or the proceeds of our offering may affect our ability to generate additional operating cash flows. Funding distributions from the sale of additional securities could dilute your interest in us if we sell shares of our common stock or securities that are convertible or exercisable into shares of our common stock to third-party investors. Payment of distributions from the mentioned sources could restrict our ability to generate sufficient cash flows from operations, affect our earnings or affect the distributions payable to you upon a liquidity event, any or all of which may have an adverse effect on your investment.”

The first sentence of the risk factor titled “Our ability to implement our investment strategy is dependent, in part, upon the ability of our dealer manager to successfully conduct this offering, which makes an investment in us more speculative” on page 32 of the Prospectus is hereby replaced in its entirety with the following disclosure.

“We have retained our dealer manager, which is owned by an entity under common control with the parent of our sponsor, to conduct this offering.”

The first sentence under the risk factor entitled “The loss of or the inability to obtain key real estate professionals at our advisor, our sub-property manager or our dealer manager could delay or hinder implementation of our investment strategies, which could limit our ability to make distributions and decrease the value of your investment” on page 35 of the Prospectus is hereby replaced with the following disclosure.

“Our success depends to a significant degree upon the contributions of Messrs. Wardinski, Mehlman and Hoganson at our advisor and Edward M. Weil, Jr., William E. Dwyer III and Louisa H. Quarto at our dealer manager, as well as Mr. Carroll and Mr. Donahue at our sub-property manager.”

The following disclosure hereby replaces the risk factor “Our advisor and its affiliates, including some of our executive officers, directors and other key real estate professionals, face conflicts of interest caused by their compensation arrangements with us, which could result in actions that are not in the long-term best interests of our stockholders” on page 38 of the Prospectus.

“Our advisor and its affiliates, including some of our executive officers, directors and other key real estate professionals, face conflicts of interest caused by their compensation arrangements with us, which could result in actions that are not in the long-term best interests of our stockholders.

Our advisor and its affiliates receive fees from us, which could be substantial. These fees could influence our advisor’s advice to us as well as its judgment with respect to:

TABLE OF CONTENTS

The fees our advisor receives in connection with transactions involving the acquisition of assets are based initially on the purchase price of the investment, including the amount of any loan originations, and are not based on the quality of the investment or the quality of the services rendered to us. This may influence our advisor to recommend riskier transactions to us, and our advisor may have an incentive to incur a high level of leverage. In addition, because the fees are based on the purchase price of the investment, it may create an incentive for our advisor to recommend that we purchase assets at higher prices. In addition, from time to time, subject to the approval of a majority of our independent directors, we may engage one or more entities under common ownership with the parent of our sponsor or our advisor to provide services not provided under existing agreements described in this prospectus, such as the agreements entered into with affiliates of our dealer manager in connection with the Grace Acquisition, and these agreements may create similar incentives. See “Conflicts of Interest — Agreements with RCAP Related to the Grace Acquisition.””

The second sentence of the risk factor titled “Because other real estate programs sponsored directly or indirectly by the parent of our sponsor and offered through our dealer manager may conduct offerings concurrently with our offering, our sponsor and our dealer manager face potential conflicts of interest arising from competition among us and these other programs for investors and investment capital, and such conflicts may not be resolved in our favor” on page 39 of the Prospectus is hereby replaced in its entirety with the following disclosure.

“Our dealer manager, which is owned by an entity under common control with the parent of our sponsor, is the dealer manager or is named in the registration statement as the dealer manager in a number of ongoing public offerings by non-traded REITs, including some offerings sponsored directly or indirectly by the parent of our sponsor.”

The risk factor titled “Because our dealer manager is owned by an entity under common ownership with the parent of our sponsor, you will not have the benefit of an independent due diligence review of us, which is customarily performed in underwritten offerings; the absence of an independent due diligence review increases the risks and uncertainty you face as a stockholder” on page 47 of the Prospectus is hereby replaced in its entirety with the following disclosure.

“Because our dealer manager is owned by an entity under common control with the parent of our sponsor, you will not have the benefit of an independent due diligence review of us, which is customarily performed in underwritten offerings; the absence of an independent due diligence review increases the risks and uncertainty you face as a stockholder.

Our dealer manager is owned by an entity which is under common control with the parent of our sponsor. Because of such relationship, our dealer manager’s due diligence review and investigation of us and the prospectus cannot be considered to be “independent.” Therefore, you will not have the benefit of an independent review and investigation of this offering of the type normally performed by an unaffiliated, independent underwriter in a public securities offering.”

TABLE OF CONTENTS

The first sentence of the risk factor titled “Payment of fees to our advisor and its affiliates reduces cash available for investment and distribution and increases the risk that our stockholders will not be able to recover the amount of their investment in our shares” on page 47 of the Prospectus is hereby replaced in its entirety with the following disclosure.

“Our advisor, its affiliates and entities under common control with our advisor perform services for us in connection with the sale of shares in this offering, the performance of transfer agency services, the selection and acquisition of our investments, the coordination of financing, the management and leasing of our properties, the administration of our other investments, as well as the performance of other administrative responsibilities for us including accounting services, transaction management services and investor relations.”

The following disclosure is hereby added immediately after the risk factor “Acquiring or attempting to acquire multiple properties in a single transaction may adversely affect our operations.” on page 55 of the Prospectus.

“We have a history of operating losses and cannot assure you that we will achieve profitability.

Since inception in July 2013 through September 30, 2014, we have incurred net losses (calculated in accordance with GAAP) equal to $8.9 million. The extent of our future operating losses and the timing of the profitability are highly uncertain, and we may never achieve or sustain profitability.

Our earnings and FFO per share may decline as a result of the acquisition of the Grace Portfolio.

Our earnings and FFO per share may decline as a result of, among other things, our failure to achieve the expected benefits of, or the incurrence of unanticipated costs relating to, the acquisition of the Grace Portfolio.

The risks associated with our acquisition of the Grace Portfolio include, without limitation, the following:

We intend to pay distributions from cash flows from operations following the completion of the Grace Acquisitions, but our ability to do so depends on our ability to realize the expected benefits of the acquisition of the Grace Portfolio. Failure to realize the expected benefits of the acquisition of the Grace Portfolio, within the anticipated timeframe or at all, or the incurrence of unexpected costs, could have a material adverse effect on our financial condition and results of operations and our ability to pay distributions from cash flow from operations.

TABLE OF CONTENTS

As a result of the additional indebtedness incurred and the issuance of the preferred equity interests to acquire the Grace Portfolio, we may experience a potential material adverse effect on our financial condition and results of operations.

On February 27, 2015, we acquired the Grace Portfolio. We funded the purchase price through a combination of $230.1 million in cash on-hand funded with proceeds from this offering, the assumption of $903.9 million in existing mezzanine and mortgage indebtedness collateralized by 96 of the 116 hotels in the Grace Portfolio, which we also refer to as the Assumed Grace Indebtedness, the incurrence of $227.0 million in new mortgage financing for the remaining 20 hotels and one of our existing hotels, which we refer to as the Additional Grace Mortgage Loan and, together with the Assumed Grace Indebtedness, as the Grace Indebtedness, and the issuance of $447.1 million in preferred equity interests, which we refer to as the Grace Preferred Equity Interests.

Our incurrence of the Grace Indebtedness and the issuance of the Grace Preferred Equity Interests could also have adverse consequences on our business, such as:

The impact of any of these potential adverse consequences could have a material adverse effect on our results of operations and financial condition.

We intend to use substantially all available offering proceeds following the acquisition of the Grace Portfolio to reduce our borrowings to our intended limit, which may limit our ability to pay distributions or acquire additional properties for some time.

Prior to our entry into an agreement to acquire the Grace Portfolio in May 2014, a majority of our independent directors waived the total portfolio leverage requirement of our charter with respect to the

TABLE OF CONTENTS

acquisition of the Grace Portfolio should such total portfolio leverage exceed 300% of our total “net assets” (as defined in our charter) upon closing of the acquisition of the Grace Portfolio. Following the closing of the Grace Acquisition, our total portfolio leverage significantly exceeded this 300% limit, and we expect it will continue to do so for some time. Accordingly, we intend to use substantially all available offering proceeds following the acquisition of the Grace Portfolio to reduce our borrowings to our intended limit, which is below the 300% maximum limit. See “Investment Criteria and Objectives  — Investment Limitations” for further details.

The $63.1 million principal amount outstanding under the BCC Note (defined under “Description of Real Estate Investments — Financial Obligations — BCC Note”) matures, by its terms, ten business days after the date we raise $70.0 million in common equity in our offering following the closing of the acquisition of the Grace Portfolio and payment of all acquisition related expenses (including payments to our advisor and its affiliates). In addition, following the earlier to occur of either (i) the repayment of the BCC Note, together with the $3.5 million deferred payment due concurrently, or (ii) the date the gross amount of proceeds from our offering we receive after the acquisition of the Grace Portfolio and payment of all acquisition related expenses (including payments to our advisor and its affiliates) exceeds $100.0 million, we are required to use 35% of any equity proceeds from our offering to redeem the Grace Preferred Equity Interests at par, up to a maximum of $350.0 million in redemptions for any 12-month period. We are required to redeem 50% of the Grace Preferred Equity Interests by February 27, 2018 and 100% of the Grace Preferred Equity Interests upon the earlier of (i) 90 days following the stated maturity (including extension options) under the Grace Indebtedness, and (ii) February 27, 2019.

While repayment of the BCC Note and required redemptions of the Grace Preferred Equity Interests will contribute to reducing our borrowings to our intended limit, we may continue to use substantially all available offering proceeds to repay debt even after we have reduced our borrowings to their intended limit. In addition, the continued use of substantially all offering proceeds to repay debt will reduce the available cash flow to fund working capital, acquisitions, capital expenditures, development projects and other general corporate purposes, which could have a material adverse impact on our business and reduce cash available for distributions to holders of our common stock.

Moreover, there can be no assurance we will be able to raise the substantial funds required to meet these objectives on a timely basis, or at all. This offering is being made on a reasonable best efforts basis, whereby the brokers participating in the offering are only required to use their reasonable best efforts to sell our shares and have no firm commitment or obligation to purchase any of the shares. Moreover, this offering must maintain registration in every state in which we offer or sell shares. Generally, such registrations are for a period of one year, and there can be no assurance they will be renewed or otherwise extended annually. Thus, we may have to stop selling shares in any state in which our registration is not renewed or otherwise extended annually. During the period from January 7, 2014 (the date we commenced our offering) through February 27, 2015 (the date we acquired the Grace Portfolio), we have received $343.9 million in proceeds from our offering, all of which has been used to pay distributions, reduce borrowings, acquire properties (including the Grace Portfolio) or for general corporate purposes. There can be no assurance as to the length of time we will be limited in our ability to pay distributions or acquire additional properties using proceeds from our offering.

In addition, our inability to raise substantial funds would increase our fixed operating expenses as a percentage of gross income, and our financial condition and ability to pay distributions could be adversely affected. To the extent our inability to raise substantial funds could also result in our being unable to make required redemptions or distributions and meet other conditions of the Grace Preferred Equity Interests, the holders of Grace Preferred Equity Interests will have certain rights, including the ability to assume control of the operations of the Grace Portfolio.

If we are unable to find a replacement guarantor for certain obligations related to the Grace Indebtedness, we will remain dependent on the previous guarantors to remain in this capacity and may be required to make payments, for reimbursements or guarantee fees, to them.

The previous guarantors of the Assumed Grace Indebtedness (who are affiliates of the sellers of the Grace Portfolio) remained as guarantors, together with our company and our operating partnership, following the closing of the acquisition of the Grace Portfolio with respect to certain limited recourse obligations and

TABLE OF CONTENTS

environmental indemnities under the Assumed Grace Indebtedness, and we were required to enter into a supplemental guarantee agreement to ensure that they would remain in this capacity. The supplemental guarantee agreement provides that we, together with our operating partnership and individual principals of the parent of our sponsor, are jointly and severally liable to reimburse the previous guarantors for any payments they are required to make if their guarantee is called.

The supplemental guarantee agreement also provides that we will be required to pay a guarantee fee of $8.0 million per annum, which will start accruing in August 2016, 18 months following the closing of the acquisition of the Grace Portfolio. If we are unable to find a replacement guarantor before then or otherwise release the previous guarantors, we will be required to pay guarantee fees to the previous guarantors, which could adversely impact our results from operations and our ability to pay distributions. Our results from operations and our ability to pay distributions could also be adversely impacted if the previous guarantors are required to make any payments if their guarantee is called and we are required to reimburse them.

Funds spent to maintain licensed brand standards or the loss of a brand license would adversely affect our financial condition and results of operations.

All but one of our hotels operate under licensed brands pursuant to franchise agreements with hotel brand companies. We anticipate that the hotels we acquire in the future also will operate under licensed brands.

The maintenance of the brand licenses for our hotels is subject to the hotel brand companies’ operating standards and other terms and conditions. Hotel brand companies periodically inspect our hotels to ensure that we and our taxable REIT subsidiaries and our affiliated sub-property manager and third-party sub-property managers follow their standards. Failure by us, our taxable REIT subsidiaries, our affiliated sub-property manager or a third-party sub-property manager to maintain these standards or other terms and conditions could result in a brand license being terminated. If a franchise agreement terminates due to our failure to make required improvements or to otherwise comply with its terms, we may also be liable to the hotel brand company for a termination payment, which will vary by hotel brand company and by hotel. As a condition of our continued holding of a brand license, a hotel brand company could also possibly require us to make capital expenditures, even if we do not believe the capital improvements are necessary or desirable or will result in an acceptable return on our investment. Nonetheless, we may risk losing a brand license if we do not make hotel brand company-required capital expenditures.

If we were to lose a brand license, we would be required to re-brand the affected hotel(s). As a result, the underlying value of a particular hotel could decline significantly from the loss of associated name recognition, marketing support, participation in guest loyalty programs and the centralized system provided by the franchisor, which could require us to recognize an impairment on the hotel. Furthermore, the loss of a franchise license at a particular hotel could harm our relationship with the hotel brand company, which could impede our ability to operate other hotels under the same brand, limit our ability to obtain new franchise licenses from the franchisor in the future on favorable terms, or at all, and cause us to incur significant costs to obtain a new franchise license for the particular hotel (including a likely requirement of a property improvement plan for the new brand, a portion of the costs of which would be related solely to the change in brand rather than substantively improving the property). Moreover, the loss of a franchise license could also be an event of default under the Grace Indebtedness if we are unable to find a suitable replacement. Accordingly, if we lose one or more franchise licenses, we could be materially and adversely affected.

We are required to make capital expenditures, which will be substantial, pursuant to property improvement plans, or PIPs, to comply with brand standards under our franchise agreements, and we are required to make regular deposits to partially reserve for these amounts under the Grace Indebtedness.

In connection with the Grace Acquisition, our franchisors required PIPs, which set forth their renovation requirements for the hotels in the Grace Portfolio.

Pursuant to the terms of the Assumed Grace Indebtedness, we are required to make an aggregate of $73.5 million in periodic PIP reserve deposits during 2015 and 2016 to cover a portion of the estimated costs of the PIPs on the total 96 hotels collateralizing that debt. In addition, pursuant to a guaranty entered into in connection with the Assumed Grace Indebtedness, we have guaranteed the difference between (i) the cost of the PIPs with respect to those 96 hotels during the 24-month period following the acquisition of the Grace

TABLE OF CONTENTS

Portfolio, estimated to be $102.0 million, and (ii) the amount actually deposited into the PIP reserve with respect to the Assumed Grace Indebtedness. See “Description of Real Estate Investments — Financial Obligations — Grace Acquisition Financing — PIP Guaranty.”

Pursuant to the terms of the Additional Grace Mortgage Loan, we are required to make an aggregate of $20.0 million in periodic PIP reserve deposits during 2015 and 2016 to cover a portion of the estimated costs of the PIPs on the total 21 hotels collateralizing that debt. The Grace Indebtedness also requires us to deposit 4.0% of the gross revenue of the hotels into a separate account for the ongoing replacement or refurbishment of furniture, fixtures and equipment at the hotels.

In connection with any future revisions to our franchise or hotel management agreements or a refinancing of the Grace Indebtedness, our franchisors may require that we make further renovations or enter into additional PIPs. In addition, upon regular inspection of our hotels our franchisors may determine that additional renovations are required to bring the physical condition of our hotels into compliance with the specifications and standards each franchisor or hotel brand has developed.

These capital expenditures will be substantial and could adversely affect our ability to pay distributions or reduce our borrowings or use capital for other corporate purposes. Moreover, if we do not satisfy the PIP renovation requirements, the franchisor may have the right to terminate the applicable agreement and we may be in default under our indebtedness. In addition, if we default on a franchise agreement as a result of our failure to comply with the PIP requirements, in general, we will be required to pay the franchisor liquidated damages, and we may also be in default under the Grace Indebtedness.

Restrictive covenants and other provisions in franchise agreements could preclude us from taking actions with respect to the sale, refinancing or rebranding of a hotel that would otherwise be in our best interest.

Our franchise agreements are long-terms agreements with general prohibitions against or prohibitive payments for early termination and generally contain restrictive covenants and other provisions that do not provide us with flexibility to sell, refinance or rebrand a hotel without the consent of the franchisor. For example, the terms of some of these agreements may restrict our ability to sell a hotel unless the purchaser is not a competitor of the franchisor, enters into a replacement franchise agreement and meets specified other conditions. In addition, our franchise agreements restrict our ability to rebrand particular hotels without the consent of the franchisor, which could result in significant operational disruptions and litigation if we do not obtain the consent. We could be forced to pay consent or termination fees to franchisors (or litigate with them) under these agreements as a condition to changing franchise brands of our hotels (or, with respect to our affiliated sub-manager, changing management), and these fees could deter us from taking actions that would otherwise be in our best interest or could cause us to incur substantial expense. In addition, our lenders under the Grace Indebtedness generally must consent before we modify hotel management agreements or franchise agreements. Any default under a franchise agreement could also be a default under the Grace Indebtedness.

If we are found to be in breach of a ground lease or are unable to renew a ground lease, we could be materially and adversely affected.

Eight of the hotels in the Grace Portfolio are on land subject to ground leases. Accordingly, we only own a long-term leasehold or similar interest in those hotels, and we have no economic interest in the land or buildings at the expiration of the ground lease or permit and will not share in the income stream derived from the lease or permit or in any increase in value of the land associated with the underlying property.

If we are found to be in breach of a ground lease, we could lose the right to use the hotel. We could also be in breach of the Grace Indebtedness. In addition, unless we can purchase a fee interest in the underlying land and improvements or extend the terms of these leases before their expiration, as to which no assurance can be given, we will lose our right to operate these properties and our interest in the improvements upon expiration of the leases. Our ability to exercise any extension options relating to our ground leases is subject to the condition that we are not in default under the terms of the ground lease at the time that we exercise such options, and we can provide no assurances that we will be able to exercise any available options at such time. Our ability to exercise any extension option is further subject to conditions contained in Grace Indebtedness. Furthermore, we can provide no assurances that we will be able to renew any ground lease upon

TABLE OF CONTENTS

its expiration. If we were to lose the right to use a hotel due to a breach or non-renewal of the ground lease, we would be unable to derive income from such hotel and would be required to purchase an interest in another hotel to attempt to replace that income, which could materially and adversely affect us.”

The risk factor titled “Increases in interest rates could increase the amount of our debt payments and adversely affect our ability to pay distributions to our stockholders.” on page 66 of the Prospectus is hereby replaced in its entirety with the following disclosure.

“Increases in interest rates could increase the amount of our debt payments and adversely affect our ability to pay distributions to our stockholders.

We have incurred substantial indebtedness, of which $1,130.9 million outstanding as of February 27, 2015, among other things, bore interest at variable interest rates. Accordingly, increases in interest rates would increase our interest costs, which could reduce our cash flows and our ability to pay distributions to you. In addition, if we need to repay existing debt during periods of rising interest rates, we could be required to liquidate one or more of our investments in properties at times that may not permit realization of the maximum return on such investments.”

The following disclosure is hereby added to the beginning of the section “Risk Factors — Lodging Industry Risks” on page 58 of the Prospectus.

“Our lack of diversification in property type and hotel brands increases the risk of investment.

There is no limit on the number of properties of a particular hotel brand that we may acquire. Following the completion of our acquisition of the Grace Portfolio, 47.5% of our hotels are franchised with Hilton Worldwide®, 36.9% with Marriott International® and 12.3% with Hyatt Hotels Corporation®, and no other brand accounts for more than 5.0% of our hotels. The risks of brand concentration include reductions in business following negative publicity relating to one of our licensed brands or arising from or after a dispute with a hotel brand company.

To the extent our assets are geographically concentrated, an economic downturn in one or more of the markets in which we have invested could have an adverse effect on our results of operations, financial condition and ability to pay distributions.

Our board of directors reviews our properties and investments in terms of geographic and hotel brand diversification, and any failure to remain diversified could adversely affect our results of operations and increase the risk of your investment.

Adverse trends in the hotel industry may impact our properties.

Our hotels are subject to all the risks and trends common to the hotel industry. Adverse trends in the hotel industry could adversely affect hotel occupancy and the rates that can be charged for hotel rooms. The success of our properties depends largely on the property operators’ ability to adapt to dominant trends in the hotel industry. These trends include greater competitive pressures, increased consolidation, a supply of hotel rooms that exceeds demand due to industry overbuilding, dependence on consumer spending patterns and changing demographics, the introduction of new concepts and products, availability of labor, price levels and general economic conditions. The success of a particular hotel brand, the ability of a hotel brand to fulfill any obligations to operators of its business, and trends in the hotel industry may affect our income and the funds we have available to distribute to our stockholders.”

TABLE OF CONTENTS

Macroeconomic Environment

The following disclosure replaces in its entirety the disclosure under the section entitled “Business and Market Overview — Macroeconomic Environment” beginning on page 83 of the Prospectus.

“Declining Unemployment — Private sector hiring has continued to improve since the previous economic downturn, with the unemployment rate steadily declining over four percentage points since to 2009 to 5.7% as of January 2015.

Source: Federal Reserve Bank of St. Louis, as of January 2015

TABLE OF CONTENTS

Low interest rates — In June 2013, the U.S. Federal Reserve reaffirmed its outlook on the economy and decided to keep the target range for the Federal Funds Rate at 0 to 0.25% and currently anticipates that exceptionally low levels for the federal funds rate are likely to be warranted at least through mid-2015. The Federal Reserve expects the economy to continue improving through 2015.

Federal Funds Rate

Source: Federal Reserve Bank of St. Louis, as of February 2015

Favorable Interest Rate Outlook: Historical Three-Month LIBOR/U.S. Ten-Year Treasury Yields

LIBOR and Treasury yields are currently very low and are projected to remain well below historical averages over the next several years.

Sources: FactSet and Bloomberg

TABLE OF CONTENTS

Strong Growth Fundamentals in the Four Quadrants of Hospitality: GDP, Jobs, Housing and Consumer Confidence:

GDP Growth — The U.S. economy has been growing slowly with healthy growth expected.

Sources: Federal Reserve Bank of St. Louis; Goldman Sachs Investment Management Research

Job Growth — Monthly job growth has been positive since the fourth quarter of 2010.

Source: Federal Reserve Bank of St. Louis, as of January 2015
Note: Job growth in thousands

Recovering Existing Home Sales — The housing market continues to recover from its trough in 2008.

Source: National Association of Realtors

Note: Existing home sales in millions.

TABLE OF CONTENTS

Rising Consumer Confidence:

Source: University of Michigan

Business Improvement — Corporate profit margins are still attractive. However, corporations do not yet have fully-restored confidence in the economy and do not feel they can aggressively invest in projects that will return attractive rates of return for their shareholders. This provides an opportunity for higher productivity and economic advancement moving forward.

Corporate Profits (After-Tax)

Source: Federal Reserve Bank of St. Louis

TABLE OF CONTENTS

Lodging Demand: Corporate Earnings Growth as a Driver

Corporate earnings growth and white collar employment growth are both important drivers of lodging demand. Corporate earnings growth, as measured by the S&P 500 Index, is expected by FactSet to accelerate in 2015 to a rate of +12.0% from the +8.6% now estimated for 2014.

S&P 500 Earnings Growth Actuals/Estimates

Source: FactSet

Scarcity of Debt Capital — The scarcity of debt capital for real estate contributed to the lack of CMBS and CDO financing. We believe that this scarcity has caused the pricing for real estate debt to be at attractive levels.

U.S. CMBS Issuance

Source: Commercial Mortgage Alert’s “Summary of CMBS Issuance.”
Note: Dollars in billions

TABLE OF CONTENTS

Limited Capital to Refinance Maturing Loans — Over the next five years, the market’s capacity to provide refinancing capital is likely to be much less than the increasing volume of maturing CRE loans. As illustrated in the chart below, we believe that the large volume of expected loan maturities over the next few years will provide unique investment opportunities for providers of debt capital. According to Trepp, LLC, over $98 billion of commercial real estate debt will mature in 2015, with approximately $410 billion of such debt scheduled to mature between 2015 and 2019.

Source: Trepp, LLC, as of September 2014
Note: Dollars in billions

Expansion of Both the Manufacturing and Non-Manufacturing Sectors

Source: Federal Reserve Bank of St. Louis”

TABLE OF CONTENTS

Industry Overview

The following disclosure replaces in its entirety the disclosure under the section entitled “Business and Market Overview — Industry Overview” beginning on page 86 of the Prospectus.

“Growth in Travel and Lodging Expenditures

Source: U.S. Travel Association, May 5, 2014

As a result, consumer spending on hotels and motels has grown significantly as well, particularly since 2013.

According to Smith Travel Research, the lodging industry accounted for $167 billion in expenditures in 2013, or approximately 19% of total travel expenditures for 2013, and the lodging industry achieved records for most rooms available, most rooms sold and highest per room revenue, ADR and RevPAR. This trend has continued in 2014, with record occupancy rates in June, record room nights sold in September and record RevPAR growth in the third quarter of 9.2%. RevPAR forecasts for 2014 and 2015 have been revised upward to 8.2% and 7.4% respectively and forecasted demand for lodging is expected to increase by 25.8% compared to only 5.6% for supply.

Hotel demand drivers are incredibly diverse, which makes overall changes in economic health (i.e., U.S. GDP growth) one of the best metrics for gauging the health of hotel demand.

TABLE OF CONTENTS

Traveler Sentiment Trending Upward

Travel industry experts generally see the vacation market trending upward in 2014 and beyond, which bodes well for hotel bookings. The TSI (Traveler Sentiment Index) — an aggregate measurement of Americans’ attitudes toward travel — rose sharply in 2014 and, for the first time since its inception, exceeded the benchmark index measurement from March 2007.

Source: MMGY Global/Mintel

Real U.S. GDP Growth vs. Hotel Demand

Sources: Federal Reserve Bank of St. Louis, U.S. Department of Commerce, and Smith Travel Research, as of April 2014

TABLE OF CONTENTS

RevPAR Growth & U.S. GDP Growth

Growth in RevPAR has historically been closely correlated with growth in U.S. GDP. Lodging properties do not have a fixed lease structure, unlike other property types, and therefore rental rates on lodging properties can be determined on virtually a daily basis. As a result, lodging industry fundamentals tend to decline and also recover sharply and more quickly than other property types as economies enter, and exit, recessionary periods, respectively.

Source: PKF Hospitality Research, LLC; Smith Travel Research; Federal Reserve Bank of St. Louis; Goldman Sachs Investment Management Research

Historical Occupancy Growth & Rate Growth

After over four years since the end of the economic recession, both occupancy and ADR have recovered close to the level reached in mid-2005, signaling strong hospitality fundamentals. The current cycle is shaping up like prior cycles in that, historically, rate growth has become the dominant contributor to RevPAR growth after 2.0 to 2.5 years from the trough of the cycle.

Source: Smith Travel Research, as April 2014

TABLE OF CONTENTS

Lodging Industry in the Midst of Extended Recovery Cycle

Over the past three economic cycles, cumulative GDP growth for the 19 quarters following the trough has ranged from 27% – 40%. At the current cycle’s 19-quarter mark, cumulative GDP stands at 19%, which indicates a slower growing economy but also one with considerable upside going forward.

Source: Bloomberg

ADR Growth > Occupancy Growth

Occupancy at luxury, upper upscale, upscale and upper midscale hotels have surpassed each segment’s 15-year average, as well as the peak annual, occupancy achieved by each segment during the 2006 to 2007 period. Strong demand is expected to help lift ADR levels at hotels in the higher-priced chain scale segments moving forward.

Source: PKF Hospitality Research, LLC, Percent Change Annual 2013

TABLE OF CONTENTS

Accelerating Group Demand

Group business, which has recovered at a considerably slower pace relative to transient demand since the financial crisis, began to close the gap with transient in RevPAR and demand growth in 2014 and is expected to further strengthen in 2015. Solid group demand is an essential driver in allowing hotels to raise rates on transient business and is key to maximizing rate/revenue growth.

Historical RevPAR Growth by Segment

Source: Smith Travel Research

Demand Percent Change by Segment (LTM November 2014)

Source: Smith Travel Research

TABLE OF CONTENTS

Group Demand Room Nights Per Month (LTM Average, November 2014)

Source: Smith Travel Research

Outperformance in Focus Chain Scales

According to PNC, Upscale, Upper Midscale and Midscale hotels, which benefited particularly well from rebounding group demand, experienced outsized gains in 2014 compared to Luxury/Upper Upscale and average RevPAR growth of 7.0% is expected in 2015.

2015E RevPAR Growth by Chain Scale

Source: Smith Travel Research; PwC

TABLE OF CONTENTS

ARC Hospitality Focus Segments: Substantial Untapped Future Upside Driven by ADR

Nominal ADR is generally on par with prior peak across all chain scales. In the previous lodging cycle, peak nominal ADR surpassed prior cycle peak by 15% – 25%.

LTM Nominal ADR

		Peak (5/1/01)				Peak (9/1/08)				Difference				Current				Curr. Vs. Peak
Industry		$	86			$	108				25.7	%		$	111				2.9	%
Upper Upscale			140				161				15.0	%			161				(0.0	)%
Upscale			100				121				20.5	%			120				(0.3	)%
Upper Midscale			75				90				18.3	%			91				3.4	%

Source: Smith Travel Research

TABLE OF CONTENTS

Current Positioning of ADR as Percentage of RevPAR Growth Indicates Significant Upside Remaining in Lodging Cycle:

The relationship between ADR and RevPAR growth is an important barometer to assess points in the lodging cycle. ADR growth approaching 100% of RevPAR growth indicates a potential inflection point, as it means occupancy levels are stagnating (likely caused by slowing demand and/or accelerating supply. Upscale, Upper Midscale and Midscale ADR growth as a percentage of RevPAR averaged only 53% as of the LTM December 2014 period.

ADR as a Percentage of RevPAR Growth, LTM December 2014

Select-Service Acquisition Strategy

Our acquisition strategy is primarily focused in the select-service sub-sector of the hospitality industry. We may also focus on the full-service sub-sector. As evidenced below, there are over 5,800 select-service hotels across the United States, all operating under national brand affiliations. We intend to pursue these types of hotels as primary investment targets for our REIT.

Source: Smith Travel Research, as of January 2015

TABLE OF CONTENTS

Supply & Demand Growth

The limited debt availability for new construction, coupled with the recent decline in industry and economic fundamentals are expected to limit new hotel room supply growth over the next several years. Moderate demand growth combined with limited increases in supply provide a positive backdrop for lodging fundamentals.

Source: Smith Travel Research, January 2014

Source: Smith Travel Research, PKF Hospitality Research, LLC

TABLE OF CONTENTS

Few Construction Starts = Low Supply Growth

New hotel rooms under construction in the U.S. remain near historical lows, at over 40% below 2007 figures.

Note: Room numbers in thousands
Source: Smith Travel Research, PKF Hospitality Research, LLC

Increasing ADR Metrics

ADR and job growth have proven to be strongly correlated historically, and as such, the continued rebound of the job market is a positive for the U.S. lodging sector.

Source: Smith Travel Research and Federal Reserve Bank of St. Louis, as of December 2014

TABLE OF CONTENTS

Expanding RevPAR Metrics — The lodging cycle is experiencing a period of robust growth, as peak to trough cumulative RevPAR growth is expected to be outsized compared to prior cycles.

Sources: Smith Travel Research; PKF Hospitality Research, LLC; U.S Bureau of Economic Analysis; Federal Reserve Bank of St. Louis; Goldman Sachs Investment Management Research

Expected 2015E AFFO Growth by Sector

Lodging REIT sector outperformance is expected to continue through 2015, as reflected by 2015E AFFO growth of 17.8%, which ranks second among all REIT asset classes.

Source: SNL Financial

TABLE OF CONTENTS

2015E Fundamental Drivers (Annual Percent Change)

Source: PKF Hospitality Research, LLC

Potential Value Recovery Opportunities

The hotel sector is in the midst of a recovery from the most recent economic downturn. PKF Consulting USA, LLC, or PKF, has indicated that the NCREIF NPI Hotel Appreciation Sub-Index suggests that hotel values lag behind other major property types such as office, multifamily and retail in the level of recovery. The chart below depicts the value recovery rate across the hospitality industry as compared to other real estate sectors. The data indicates that lodging sector values remain approximately 27.4% below their peak prior to the downturn, while these other sectors have nearly achieved full recovery.

Source: PKF Hospitality Research, LLC

TABLE OF CONTENTS

Growth in Industry Transaction Volume and NOI

As illustrated in the following chart, the economic downturn generated a substantial decline in lodging industry fundamentals, which suggests significant potential for improvement as the economy continues to rebound. PKF estimated that hotel unit-level net operating incomes increased at an average CAGR of 11.9% from 2010-2014. Additionally, U.S. hotel transaction volume is trending at above-average levels as unit-level NOI rises.

Annual Change in Hotel Unit — Level Net Operating Income (Actual and Forecast)

Source: PKF Hospitality Research, LLC”

Investment Objectives

The first parenthetical in the bullet point titled “Exit Strategy” under the heading “Investment Objectives” on page 82 of the Prospectus is hereby replaced in its entirety with the following disclosure.

“(including an entity under common control with the parent of our sponsor)”

Management

The following disclosure replaces in its entirety the section entitled “Management — Lead Independent Director” on pages 93 – 94 of the Prospectus.

“On December 29, 2014, our board of directors appointed Stanley R. Perla, an independent director and chairman of our audit committee, as lead independent director. A lead independent director was appointed to provide an additional measure of balance, ensure the independence of our board of directors and enhance the ability of our board of directors to fulfill its management oversight responsibilities.

The lead independent director chairs meetings or executive sessions of the independent directors, reviews and comments on the meeting agendas of our board of directors, represents the views of the independent directors to management, facilitates communication among the independent directors and between management and the independent directors, acts as a liaison with service providers, officers, attorneys and other directors generally between meetings, serves as a representative and speaks on behalf of our company at external seminars, conferences, in the media and otherwise assumes such responsibilities as may be assigned to him by of our board of directors. Consistent with current practices, we will compensate Mr. Perla for acting as lead independent director as set forth below in “— Compensation of Directors.”

TABLE OF CONTENTS

The following disclosure replaces in its entirety the table under the section entitled “Management —  General — Executive Officers and Directors” on page 94 of the Prospectus.

“Executive Officers and Directors

We have provided below certain information about our executive officers and directors. The primary function of our executive officer is to oversee the advisor, who will provide certain aspects of the day-to-day services for, and operations of, the Company.

Name		Age		Position(s)
Jonathan P. Mehlman		48		Chief Executive Officer and President
Edward T. Hoganson		47		Chief Financial Officer, Treasurer and Secretary
William M. Kahane		66		Executive Chairman of the Board of Directors
Abby M. Wenzel		54		Independent Director
Robert H. Burns		85		Independent Director
Stanley R. Perla		71		Lead Independent Director”

The following disclosure replaces in its entirety Mr. Kahane’s biography on pages 94 – 95 of the Prospectus under the heading “Management — General — Executive Officers and Directors.”

“William M. Kahane was appointed a director of our company in January 2014 and as executive chairman of the board in December 2014. Mr. Kahane also served as our chief executive officer and president from August 2013 to November 2014. Mr. Kahane previously served as the chief executive officer and president of the Company from August 2013 to November 2014. Mr. Kahane has served as the chief executive officer and president of ARC DNAV, the ARC DNAV advisor and the ARC DNAV property manager since November 2014 and was appointed as a director and as chairman of the board of directors of ARC DNAV in December 2014. Mr. Kahane also previously served as a director of ARC DNAV from September 2010 until March 2012 and as chief operating officer and secretary of ARC DNAV, the ARC DNAV advisor and the ARC DNAV property manager from November 2014 until December 2014. Mr. Kahane has served as an executive officer of ARCT V, the ARCT V advisor and the ARCT V property manager since November 2014 and in December 2014 was appointed as chief executive officer. Mr. Kahane was appointed as a director and as chairman of the board of directors of ARCT V in February 2015. Mr. Kahane has served as chief executive officer of AR Capital Acquisition Corp. since August 2014. Mr. Kahane has served as a director of ARC NYCR since its formation in December 2013 and was appointed as executive chairman in December 2014. Mr. Kahane served as chief operating officer, treasurer and secretary of ARC Global, the ARC Global advisor and the ARC Global property manager from October 2014 until February 2015 and was appointed executive chairman of the board of directors of ARC Global in February 2015. In March 2015, Mr. Kahane resigned as executive chairman of ARC Global but remained a member of its board of directors. Mr. Kahane was appointed as a director and executive chairman of the board of directors of ARC Global II in December 2014 and previously served as the chief operating officer, treasurer and secretary of ARC Global II, the ARC Global II advisor and the ARC Global II property manager from October 2014 until December 2014. Mr. Kahane has served as a director of Realty Finance Trust, Inc. since November 2014 and was appointed as chairman in December 2014. Mr. Kahane has served as a director of ARC RCA since its formation in July 2010 and also served as an executive officer of ARC RCA and the ARC RCA advisor from their respective formations in July 2010 and May 2010 until March 2012, and from November 2014 to December 2014, Mr. Kahane served as chief operating officer and secretary of ARC RCA and the ARC RCA advisor. Mr. Kahane has served as the president of ARC RCA and the ARC RCA advisor since November 2014 and was appointed as the chairman of the board of directors of ARC RCA and the chief executive officer of ARC RCA and the ARC RCA advisor in December 2014. Mr. Kahane was appointed as a director and as the chairman of the board of directors of ARC RCA II in December 2014 and has served as chief executive officer of ARC RCA II and the ARC RCA II advisor since November 2014. Mr. Kahane has served as the president of ARC RCA II and the ARC RCA II advisor since October 2014. Mr. Kahane served as chief operating officer and secretary of ARC RCA II and the ARC RCA II advisor from October 2014 to December 2014. Mr. Kahane was appointed as a director and executive chairman of the board of directors of ARC HT III in December 2014. Mr. Kahane has also served as a director of NYRT since its formation in October 2009 and was appointed as executive

TABLE OF CONTENTS

chairman in December 2014. Mr. Kahane also previously served as president and treasurer of NYRT from its formation in October 2009 until March 2012.

Mr. Kahane served as a director of ARC HT from its formation in August 2010 until January 2015 when ARC HT closed its merger with Ventas, Inc. Mr. Kahane previously served as an executive officer of ARC HT, the ARC HT advisor and the ARC HT property manager from their respective formations in August 2010 until March 2012. Mr. Kahane has served as a director of ARC HT II since March 2013 and served as executive chairman from December 2014 until February 2015. Mr. Kahane served as an executive officer of ARCT, the ARCT advisor and the ARCT property manager from their formation in August 2007 until the close of ARCT’s merger with Realty Income Corporation in January 2013. He also served as a director of ARCT from August 2007 until January 2013. Mr. Kahane served as an executive officer of ARCT III, the ARCT III advisor, and the ARCT III property manager from their formation in October 2010 until April 2012. Mr. Kahane served as a director of PECO II from August 2013 until January 2015. Mr. Kahane also has been the interested director of BDCA since its formation in May 2010 and BDCA II since April 2014. Until March 2012, Mr. Kahane was also chief operating officer of BDCA. Mr. Kahane served as a director of RCS Capital Corporation, or RCAP, from February 2013 until December 2014, and served as chief executive officer of RCAP from February 2013 until September 2014. Mr. Kahane served as a director of Cole Real Estate Income Strategy (Daily NAV), Inc. from February 2014 until December 2014, and served as a director of Cole Credit Property Trust, Inc. from May 2014 until February 2014. Mr. Kahane served as a director of ARCP from February 2013 to June 2014. He also served as a director and executive officer of ARCP from December 2010 until March 2012. Additionally, Mr. Kahane served as an executive officer of ARCP’s former manager from November 2010 until March 2012.

Mr. Kahane has served as a member of the investment committee of Aetos Capital Asia Advisors, a $3 billion series of opportunistic funds focusing on assets primarily in Japan and China, since 2008. Mr. Kahane began his career as a real estate lawyer practicing in the public and private sectors from 1974 to 1979 where he worked on the development of hotel properties in Hawaii and California. From 1981 to 1992, Mr. Kahane worked at Morgan Stanley & Co., or Morgan Stanley, specializing in real estate, including the lodging sector becoming a managing director in 1989. In 1992, Mr. Kahane left Morgan Stanley to establish a real estate advisory and asset sales business known as Milestone Partners which continues to operate and of which Mr. Kahane is currently the chairman. Mr. Kahane worked very closely with Mr. Schorsch while a trustee at American Financial Realty Trust, or AFRT, from April 2003 to August 2006, during which time Mr. Kahane served as chairman of the finance committee of AFRT’s board of trustees. Mr. Kahane served as a managing director of GF Capital Management & Advisors LLC, or GF Capital, a New York-based merchant banking firm, where he directed the firm’s real estate investments, from 2001 to 2003. GF Capital offers comprehensive wealth management services through its subsidiary TAG Associates LLC, a leading multi-client family office and portfolio management services company with approximately $5 billion of assets under management. Mr. Kahane also was on the board of directors of Catellus Development Corp., a NYSE growth-oriented real estate development company, where he served as chairman.

Mr. Kahane received a B.A. from Occidental College, a J.D. from the University of California, Los Angeles Law School and an MBA from Stanford University’s Graduate School of Business. We believe that Mr. Kahane’s prior experience as a director and executive officer of the companies described above and his significant investment banking experience in real estate make him well qualified to serve as a member of our board of directors.”

The following disclosure replaces in its entirety Nicholas Radesca’s biography on pages 95 and 96 of the Prospectus under the heading “Executive Officers and Directors.”

“Edward T. Hoganson has served as the chief financial officer, treasurer and secretary of the Company, our advisor and our property manager since December 2014. Mr. Hoganson previously served as executive vice president of Crestline Hotels & Resorts, LLC, our sub-property manager, from 2007 to December 2014. Mr. Hoganson was responsible for financial oversight and new business development efforts at our sub-property manager, including management contracts for third-party owners, acquisitions and co-investments. Mr. Hoganson was also responsible for the firm’s asset management programs. Prior to serving as executive vice president for our sub-property manager, Mr. Hoganson was senior vice president of

TABLE OF CONTENTS

acquisitions for Sunrise Senior Living from 2004 until 2007, and earlier Mr. Hoganson led the asset management efforts for Highland Hospitality Corporation from 2003 until 2004, including during its initial public offering in 2003. Mr. Hoganson has more than 15 years of financial and hospitality industry experience. He began his career with Deloitte & Touche in 1989 and then joined Marriott International where he held various finance positions from 1993 until 1999. Mr. Hoganson earned his undergraduate degree from Yale University, his MBA in finance from the Wharton School at the University of Pennsylvania, and his Masters of Arts in International Relations from the Lauder Institute at the University of Pennsylvania. Mr. Hoganson serves as an affiliate faculty member at George Mason University, lecturing on hospitality finance.”

The biography of Mr. Schorsch on page 96 of the Prospectus under the heading “Management — General — Executive Officers and Directors” is hereby deleted in its entirety.

The biography of Ms. Perrotty on page 97 of the Prospectus under the heading “Management — General — Executive Officers and Directors” is hereby deleted in its entirety and replaced with the following disclosure.

“Robert H. Burns has served as an independent director of the Company in September 2014. Mr. Burns has also served as an independent director of ARC Global II since February 2015 and as an independent director of NYRT since October 2009. He served as an independent director of ARC HT from March 2012 until January 2015, when ARC HT closed its merger with Ventas, Inc., as an independent director of ARCT III from January 2011 to March 2012, as an independent director of ARCT V from January 2013 until September 2014 and as an independent director of ARCT from January 2008 until January 2013 when ARCT closed its merger with Realty Income Corporation. Mr. Burns is a hotel industry veteran with an international reputation and over thirty years of hotel, real estate, food and beverage and retail experience. He founded and built the luxurious Regent International Hotels brand, which he sold in 1992. From 1970 to 1992, Mr. Burns served as chairman and chief executive officer of Regent International Hotels, where he was personally involved in all strategic and major operating decisions. Mr. Burns and his team of professionals performed site selection, obtained land use and zoning approvals, performed all property due diligence, financed each project by raising both equity and arranging debt, oversaw planning, design and construction of each hotel property, and managed each asset. Each Regent hotel typically contained a significant food and beverage element and high-end retail component, frequently including luxury goods such as clothing, jewelry, as well as retail shops. Mr. Burns opened the first Regent hotel in Honolulu, Hawaii, in 1970. From 1970 to 1979, the company opened and managed a number of prominent hotels, but gained international recognition in 1980 with the opening of The Regent Hong Kong, which had many amenities and attracted attention throughout the world. In all, Mr. Burns developed over 18 major hotel projects including the Four Seasons Hotel in New York City, the Beverly Wilshire Hotel in Beverly Hills, the Four Seasons Hotel in Milan, Italy, and the Four Seasons Hotel in Bali, Indonesia. Mr. Burns currently serves as chairman of Barings’ Chrysalis Emerging Markets Fund, a position he has held since 1991, and as a director of Barings’ Asia Pacific Fund, a position he has held since 1986. Additionally, he has been a member of the executive committee of the board of directors of Jazz at Lincoln Center in New York City since 2000. He also chairs the Robert H. Burns Foundation which he founded in 1992. The Robert H. Burns Foundation funds the education of Asian students at American schools. Mr. Burns frequently lectures at Stanford Business School. Mr. Burns served as a faculty member at the University of Hawaii from 1963 to 1994 and as president of the Hawaii Hotel Association from 1968 to 1970. Mr. Burns began his career in Sheraton’s Executive Training Program in 1958, and advanced within Sheraton and then within Westin Hotels from 1962 to 1963. He later spent eight years with Hilton International Hotels from 1963 to 1970. Mr. Burns graduated from the School of Hotel Management at Michigan State University in 1958 and the University of Michigan’s Graduate School of Business in 1960 after serving three years in the U.S. Army in Korea. For the past five years Mr. Burns has devoted his time to owning and operating Villa Feltrinelli on Lago di Garda, a small, luxury hotel in northern Italy, and working on developing hotel projects in Asia, focusing on Vietnam and China. The Company believes that Mr. Burns’ current experience as a director of ARC HT and NYRT, his prior experience as a director of ARCT, ARCT III and ARCT V and his experience as a real estate developer for over 40 years, during which he developed over 18 major hotel projects, make him well qualified to serve as a member of the board of directors.

Stanley R. Perla was appointed as an independent director of our company in January 2014 and as our lead independent director in December 2014. Mr. Perla has served as an independent director of American

TABLE OF CONTENTS

Realty Capital Trust V, Inc. since April 2013. Mr. Perla has served as a trustee of American Real Estate Income Fund since May 2012. Mr. Perla served as an independent director of ARC DNAV from March 2012 until April 2013. Mr. Perla, a licensed certified public accountant, was with the firm of Ernst & Young LLP for 35 years, from September 1967 to June 2003, the last 25 of which he was a partner. From July 2003 to May 2008, he was the director of Internal Audit for Vornado Realty Trust and from June 2008 to May 2011, he was the managing partner of Cornerstone Accounting Group, a public accounting firm specializing in the real estate industry and a consultant to them from June 2011 to March 2012. Since May 2012, Mr. Perla has provided consulting services to Friedman LLP, a public accounting firm. His area of expertise for the past 40 years has been real estate and he was also responsible for the auditing of public and private companies. Mr. Perla served as Ernst & Young’s national director of real estate accounting, as well as on Ernst & Young’s national accounting and auditing committee. He is an active member of the National Association of Real Estate Investment Trusts and the National Association of Real Estate Companies. In addition, Mr. Perla has been a frequent speaker on real estate accounting issues at numerous real estate conferences. Mr. Perla has served as a member of the board of directors and the chair of the audit committee of Madison Harbor Balanced Strategies, Inc. since January 2004 and GTJ REIT, Inc. since January 2013. Mr. Perla previously served as a director and chair of the audit committee for American Mortgage Acceptance Company from January 2004 to April 2010 and Lexington Realty Trust from August 2003 to November 2006. Mr. Perla earned an M.B.A. in Taxation and a B.B.A. in Accounting from Baruch College. We believe that Mr. Perla’s extensive experience as the director of Internal Audit at Vornado Realty Trust, as a managing partner of Cornerstone Accounting Group, his experience as an independent director of ARCT V and American Real Estate Income Fund and his over 40 years of experience in real estate, make him well qualified to serve as a member of our board of directors.”

The disclosure in the section entitled “Limited Liability and Indemnification of Directors, Officers, Employees and Other Agents” on page 100 of the Prospectus is hereby amended by inserting the following disclosure as a new paragraph below the bullet points on page 102 of the Prospectus:

“We have entered into an indemnification agreement with each of our directors and officers, and certain former directors and officers, providing for indemnification of such directors and officers consistent with the provisions of our charter.”

The table and third paragraph under the section entitled “The Advisor” on page 102 of the Prospectus is hereby replaced with the following disclosure.

“Name		Age		Position(s)
Jonathan P. Mehlman		48		Chief Executive Officer and President
Bruce D. Wardinski		53		Special Advisory Director to the Chief Executive Officer
Edward T. Hoganson		47		Chief Financial Officer, Treasurer and Secretary

The backgrounds of Messrs. Mehlman and Hoganson are described in the “Management — General — Executive Officers and Directors” section of this prospectus. The background of Mr. Wardinski is described below.”

The second and third sentences of the first paragraph under the section entitled “The Property Manager and The Sub-Property Manager” on page 104 of the Prospectus is hereby replaced with the following disclosure.

“Mr. Mehlman serves as chief executive officer and president of our property manager. Mr. Hoganson serves as chief financial officer, treasurer and secretary of our property manager.”

The third paragraph under the section entitled “The Property Manager and The Sub-Property Manager” on page 104 of the Prospectus is hereby replaced with the following disclosure.

“The members of our sub-property manager’s executive team have significant hospitality experience and have built a reputation for managing and investing in financially successful hotels. The sub-property manager has won numerous industry awards including “Hotel of the Year.” The executive team adopts a partnership approach with the hotel owners, investors and employees at each of its hotels, which it believes enables it to maximize profitability in a hospitality-driven, guest-service-focused environment. Currently, our sub-property manager manages over 45 hotels with more than 8,000 rooms in 12 states and the District of Columbia on

TABLE OF CONTENTS

behalf of owners that include public REITs, private developers and private investors. Our sub-property manager provides property-level accounting functions that we require, as well as underwriting and acquisition support. Moreover, our sub-property manager’s asset management group oversees asset renovations and repositionings involving extensive capital investments.”

The sixth paragraph under the section entitled “The Property Manager and The Sub-Property Manager” on page 105 of the Prospectus is hereby replaced with the following disclosure.

“James Carroll serves as the chief executive officer of our sub-property manager. Pierre Donahue acts as the general counsel of our sub-property manager. A description of the backgrounds of Messrs. Carroll and Donahue is set forth below:”

Edward Hoganson’s biography on pages 105 and 106 of the Prospectus under the heading “The Property Manager and The Sub-Property Manager” is deleted in its entirety.

The following disclosure hereby replaces in its entirety the tenth, eleventh, twelfth and thirteenth paragraphs under the section “Management — General — The Property Manager and The Sub-Property Manager” on page 106 of the Prospectus.

“The actions of our sub-property manager are overseen by its board of managers, which is comprised of Nicholas S. Schorsch, William M. Kahane and Simón Pedro Barceló Vadell. For a description of the backgrounds of Mr. Kahane, please see “Executive Officers and Directors.” A description of the background of Messrs. Schorsch and Barceló is set forth below:

Nicholas S. Schorsch has served as a member of the board of managers of our sub-property manager since August 2013. Mr. Schorsch currently serves as chairman of the board of directors of AR Capital Acquisition Corp. since its formation in August 2014 and as a director of the general partner of American Energy Capital Partners-Energy Recovery Program, LP since its formation in October 2013. Mr. Schorsch has previously served as chief executive officer and director of various REITs and BDCs sponsored by AR Capital, LLC. From September 2006 to July 2007, Mr. Schorsch was chief executive officer of an affiliate, American Realty Capital, a real estate investment firm. Mr. Schorsch founded and formerly served as president, chief executive officer and vice chairman of AFRT from its inception as a REIT in September 2002 until August 2006. AFRT was a publicly traded REIT (which was listed on the NYSE within one year of its inception) that invested exclusively in offices, operation centers, bank branches, and other operating real estate assets that are net leased to tenants in the financial services industry, such as banks and insurance companies. Through American Financial Resource Group, or AFRG, and its successor corporation, AFRT, Mr. Schorsch executed in excess of 1,000 acquisitions, both in acquiring businesses and real estate property with transactional value of approximately $5 billion, while also operating offices in Europe that focused on sale and leaseback and other property transactions in Spain, France, Germany, Finland, Norway and the United Kingdom. In 2003, Mr. Schorsch received an Entrepreneur of the Year award from Ernst & Young. From 1995 to September 2002, Mr. Schorsch served as chief executive officer and president of AFRG, AFRT’s predecessor, a private equity firm founded for the purpose of acquiring operating companies and other assets in a number of industries. Prior to AFRG, Mr. Schorsch served as president of a non-ferrous metal product manufacturing business, Thermal Reduction. He successfully built the business through mergers and acquisitions and ultimately sold his interests to Corrpro (NYSE) in 1994. Mr. Schorsch attended Drexel University.

Simón Pedro Barceló Vadell has served as a member of the board of managers of our sub-property manager since August 2013. Mr. Barceló is also co-president of the board of directors of Barceló Corporación Empresarial, S.A., which is a private, family owned hotel ownership and management business, among other lines of business. Mr. Barceló began working in his family’s company in 1993, after serving as a senator for Mallorca from 1989 – 1993. Mr. Barceló also has served as president of Exceltur (a lobby for tourism excellence) and a member of the board of directors of First Choice Holidays — British Touroperator. Between May 2008 and October 2010, Mr. Barceló served as president of the Spanish Family Business Institute. Mr. Barceló obtained his law degree from the University of the Balearic Islands.”

TABLE OF CONTENTS

The section titled “Management — General — Dealer Manager” on page 110 of the Prospectus is hereby replaced in its entirety with the following disclosure.

“Our dealer manager is a member firm of the Financial Industry Regulatory Authority, or FINRA. Our dealer manager was organized on August 29, 2007 for the purpose of participating in and facilitating the distribution of securities of real estate programs sponsored by American Realty Capital, its affiliates and its predecessors.

Our dealer manager provides certain wholesaling, sales, promotional and marketing assistance services to us in connection with the distribution of the shares offered pursuant to this prospectus. It also may sell a limited number of shares at the retail level. The compensation we will pay to our dealer manager in connection with this offering is described in the section of this prospectus captioned “Management Compensation.” See also “Plan of Distribution — Dealer Manager and Compensation We Will Pay for the Sale of Our Shares.” Our dealer manager also serves as dealer manager for RFT, PECO II, UDF V, ARC NYCR, ARC Global II, ARC HT III, ARC RCA II, AEP, BDCA and BDCA II.

Our dealer manager is owned by an entity which is under common control with the parent of our sponsor. Our dealer manager is an affiliate of both our advisor and the property manager. See “Conflicts of Interest”.

Name		Age		Position(s)
Edward M. Weil, Jr.		47		Chairman
William E. Dwyer III		56		Chief Executive Officer
Louisa Quarto		46		President
Michael Shuckerow		43		Chief Compliance Officer
Alex MacGillivray		53		Executive Vice President and National Sales Manager
Steve Rokoszewski		38		Executive Vice President

The backgrounds of Ms. Quarto and Messrs. Weil, Dwyer, Shuckerow, MacGillivray and Rokoszewski are described below:

Edward M. Weil, Jr. has served as chairman of our dealer manager since September 2013 and was the interim chief executive officer of our dealer manager from May 2014 until September 2014 and the chief executive officer of our dealer manager from December 2010 until September 2013. Mr. Weil served as an executive officer of ARCT, the ARCT advisor and the ARCT property manager from their formation in August 2007 through March 2012. Mr. Weil served as an executive officer of NYRT, the NYRT property manager and the NYRT advisor since their formation in October 2009 until November 2014. He has served as the executive vice president and secretary of the PECO advisor since its formation in December 2009. Mr. Weil served as an executive officer of ARC RCA and the ARC RCA advisor since their formation in July 2010 and May 2010, respectively, until November 2014. Mr. Weil served as an executive officer of ARC HT, the ARC HT advisor and the ARC HT property manager from their formation in August 2010 until January 2015 when ARC HT closed its merger with Ventas, Inc. Mr. Weil has served as a director of ARCT III beginning in February 2012 and as an executive officer of ARCT III, the ARCT III advisor and the ARCT III property manager from their formation in October 2010 until the close of ARCT III’s merger with ARCP in February 2013. Mr. Weil served as an executive officer of the ARC DNAV advisor and the ARC DNAV property manager since their formation in September 2010 until November 2014, and served as a director of ARC DNAV from September 2010 to August 2014. Mr. Weil served as a director of ARCP from March 2012 until June 2014. Mr. Weil also served as an executive officer of ARCP from its formation in December 2010 until February 2013. Mr. Weil was an executive officer of ARC Global, the ARC Global advisor and the ARC Global property manager from their formation in July 2011, July 2011 and January 2012, respectively, until October 2014 and served as a director of ARC Global from May 2012 to September 2014. Mr. Weil served as the president, chief operating officer, treasurer and secretary of ARCT IV, the ARCT IV advisor and the ARCT IV property manager from their formation in February 2012 until the close of ARCT IV’s merger with ARCP in January 2014. Mr. Weil served as a director of ARCT IV from January 2014 until the close of its merger with ARCP in January 2014. Mr. Weil served as the president, treasurer and secretary of ARC HT II, the ARC HT II advisor and the ARC HT II property manager since their formation in

TABLE OF CONTENTS

October 2012 until November 2014, and served as their chief operating officer from October 2012 through March 2014. Mr. Weil served as the president, treasurer and secretary of ARC RFT and the ARC RFT advisor from November 2012 until January 2013. Mr. Weil has served as president, chief operating officer, treasurer and secretary of ARCT V, the ARCT V advisor and the ARCT V property manager since their formation in January 2013, and served as a director of ARCT V from January 2013 to September 2014. Mr. Weil has served as the executive vice president and secretary of the BDCA advisor since its formation in June 2010. Mr. Weil served as president, chief operating officer, treasurer and secretary of the PECO II advisor since July 2013 until October 2014. Mr. Weil served as chief executive officer and president of the general partner of AEP since its formation in October 2013 until November 2014. Mr. Weil has served as president, treasurer, secretary and a director of RCAP since February 2013 and as chief executive officer since September 2014. Mr. Weil also served as treasurer and secretary of ARC NYCR, its advisor and property manager since April 2014 until November 2014 and previously served as chief operating officer of ARC NYCR, its advisor and property manager since their respective formations in December 2013. Mr. Weil served as president, chief operating officer, treasurer and secretary of ARC RCA II, and as president, chief operating officer, treasurer and secretary of the ARC RCA II advisor and property manager from their respective formations in April 2014 until October 2014. Mr. Weil served as president, chief operating officer, treasurer and secretary of ARC Global II, the ARC Global II advisor and the ARC Global II property manager from their respective formations in April 2014 to October 2014. Mr. Weil served as president, chief operating officer, treasurer and secretary of ARC HT III, the ARC HT III advisor and property manager from their respective formations in April 2014 until November 2014. Mr. Weil has served as president, treasurer, secretary and a director of RCAP since February 2013 and as chief executive officer since September 2014. Mr. Weil was formerly the senior vice president of sales and leasing for AFRT from April 2004 to October 2006, where he was responsible for the disposition and leasing activity for a 33 million square foot portfolio of properties. Under the direction of Mr. Weil, his department was the sole contributor in the increase of occupancy and portfolio revenue through the sales of over 200 properties and the leasing of over 2.2 million square feet, averaging 325,000 square feet of newly executed leases per quarter. After working at AFRT, from October 2006 to May 2007, Mr. Weil was managing director of Milestone Partners Limited and prior to joining AFRT, from 1987 to April 2004, Mr. Weil was president of Plymouth Pump & Systems Co. Mr. Weil attended George Washington University. Mr. Weil holds FINRA Series 7, 24 and 63 licenses.

William E. Dwyer III has served as the chief executive officer of our dealer manager since September 2014. Mr. Dwyer joined our dealer manager from LPL Financial, where he held various positions from September 1992 to March 2013, including serving as President — National Sales from September 2009 to March 2013, where he was responsible for setting strategic direction for the management, satisfaction, retention and recruitment of the firm’s independent advisors. In addition, Mr. Dwyer has been a member of the Financial Services Institute since October 2005, including serving as its Chairman from January 2008 to December 2009. Mr. Dwyer was a member of the Private Client Services Committee at the Securities Industry and Financial Markets Association, or SIFMA, from January 2008 to December 2010, including serving as its Co-Chairman from January 2009 to December 2010, as well as a member of the Board of Directors of SIFMA from January 2009 to December 2012. He holds a Bachelor of Arts and Sciences degree from Boston College and holds FINRA Series 3, 7 and 63 licenses.

Louisa Quarto has served as the President of our dealer manager, since September 2009. Ms. Quarto served as Senior Vice President and Chief Compliance Officer for our dealer manager from May 2008 until February 2009, as Executive Managing Director from November 2008 through July 2009 and Co-President from July 2009 through August 2009. Ms. Quarto also has been Senior Vice President for American Realty Capital Advisors, LLC since April 2008. Ms. Quarto’s responsibilities for our dealer manager include overseeing sales, national accounts, operations and compliance activities. From February 1996 through April 2008, Ms. Quarto was with W. P. Carey & Co. LLC and its broker-dealer subsidiary, Carey Financial LLC, beginning as an Associate Marketing Director in 1996, becoming Second Vice president in 1999, Vice President in 2000 and Senior Vice President in 2004. From July 2005 through April 2008 Ms. Quarto served as Executive Director and Chief Management Officer of Carey Financial where she managed relationships with the broker-dealers that were part of the CPA® REIT selling groups. Ms. Quarto earned a B.A. from Bucknell University and an M.B.A. in Finance and Marketing from The Stern School of Business at

TABLE OF CONTENTS

New York University. She holds FINRA Series 7, 63 and 24 licenses and is a member of the Investment Program Association’s, or IPA, Executive Committee, its Board of Trustees and serves as the IPA’s Treasurer and chair of its Finance Committee.

Michael Shuckerow has served as the chief compliance officer of our dealer manager since October 2014. In addition, he is currently a member of the Investment Adviser Association’s social media working group. Prior to joining our dealer manager, Mr. Shuckerow was Head of Distribution Compliance at Columbia Management from April 2008 until October 2014. From April 2005 until April 2008, Mr. Shuckerow served as Chief Compliance Officer and Senior Vice President of a multi-national joint-venture of Citigroup and State Street Bank. From April 2000 until April 2005, Mr. Shuckerow served as Associate General Counsel at UBS, as well as Deputy Chief Administrative Officer of its investment consulting division. Mr. Shuckerow earned a J.D. from St. John’s University School of Law and a B.S. from Northeastern University. He is admitted to the bar in New York and Connecticut and holds FINRA Series and 24 licenses.

Alex MacGillivray has served as the senior vice president and national sales manager of our dealer manager since June 2009. Mr. MacGillivray was promoted to Executive Vice President in January 2010. Mr. MacGillivray has over 20 years of sales experience and his current responsibilities include sales, marketing, and managing the distribution of all products offered by our dealer manager. From January 2006 to December 2008, he was a director of sales at Prudential Financial with responsibility for managing a team focused on variable annuity sales through numerous channels. From December 2003 to January 2006, he was a national sales manager at Lincoln Financial, overseeing a team focused on variable annuity sales. From June 1996 to October 2002, he was a senior sales executive at AXA Equitable, initially as division sales manager, promoted to national sales manager, and promoted again to chief executive officer and president of AXA Distributors, with responsibility for variable annuity and life insurance distribution. From February 1992 to May 1996, Mr. MacGillivray was a regional vice president at Fidelity Investments with responsibility for managing the sales and marketing of mutual funds to broker-dealers. While at Fidelity Investments, he was promoted to senior vice president and district sales manager in 1994. From October 1987 to 1990, Mr. MacGillivray was a regional vice president at Van Kampen Merritt where he represented mutual funds, unit investment trusts, and closed end funds. Mr. MacGillivray holds FINRA Series 7, 24 and 63 licenses.

Steve Rokoszewski joined the dealer manager in March 2009 as vice president, national sales desk manager, and is responsible for the hiring, training and the ongoing management of all the internal wholesalers of our dealer manager. In June 2010, Mr. Rokoszewski was promoted to senior vice president, and he was promoted to executive vice president in April 2012. Mr. Rokoszewski has over 12 years of experience in the financial services industry. Prior to joining our dealer manager, he was Sales Desk Manager for KBS Capital Markets Group, or KBS, from November 2005 through February 2009. While at KBS, he participated in the development of a distribution company that raised over $1.2 billion in 2008. From March 2001 through October 2005, Mr. Rokoszewski served as AVP — Sales Desk Manager for MetLife Investors, where he led a team of 24 internal wholesalers who helped raise $1.1 billion in sales in 2004. From August 1998 through March 2001, Mr. Rokoszewski was a financial advisor at PaineWebber, Inc. He received a degree in International Relations from the University of Southern California and currently holds FINRA Series 7, 24 and 63 licenses.”

The first sentence of the paragraph under the heading “Management — General — Transfer Agent” on page 112 of the Prospectus is hereby replaced in its entirety with the following disclosure.

“Our transfer agent is owned by an entity which is under common control with the parent of our sponsor.”

The first sentence under the section entitled “Investment Decisions” on page 113 of the Prospectus is hereby replaced with the following disclosure.

“The primary responsibility for the investment decisions of our advisor and its affiliates, the negotiation for these investments, and the property management and leasing of these investment properties resides with Jonathan P. Mehlman and Edward T. Hoganson and our advisor seeks to invest in hotel properties on our behalf that satisfy our investment objectives.”

TABLE OF CONTENTS

The second paragraph under the section entitled “Certain Relationships and Related Transactions —  Advisory Agreement” on page 113 of the Prospectus is hereby replaced with the following disclosure.

“Jonathan P. Mehlman, our chief executive officer and president, is the chief executive officer and president of our advisor. Edward T. Hoganson is the chief financial officer, treasurer and secretary of our company and our advisor. For a further description of the Advisory Agreement, see the sections entitled “— The Advisor,” “Management Compensation” and “Conflicts of Interest” in this prospectus.”

The following disclosure hereby replaces the disclosure under “Management — Certain Relationships and Related Transactions — Additional Fees Incurred to the Dealer Manager and its Affiliates” on page 113 of the Prospectus.

“Additional Fees Incurred to the Dealer Manager and its Affiliates.  We incur fees for the following services provided by our dealer manager, its affiliates and entities under common ownership with our advisor: transfer agency services provided by an affiliate of our dealer manager; ongoing registration maintenance and transaction management services provided by an affiliate of our dealer manager; and agreements outside of our ordinary course of operations with affiliates of our dealer manager related to the Grace Acquisition. For a further description of these fees and agreements, see the section entitled “Conflicts of Interest” in this prospectus.

Personal Guarantees of the Individual Principals of the Parent of Our Sponsor.  In connection with the issuance of the Grace Preferred Equity Interests on February 27, 2015, certain individual principals of the parent of our sponsor, namely Nicholas Schorsch, William Kahane, Michael Weil and Peter Budko, were required to personally guarantee the obligation of our wholly owned subsidiaries to redeem all $447.1 million of Grace Preferred Equity Interests issued and certain limited recourse obligations, as well as provide indemnification to affiliates of the sellers of the Grace Portfolio with respect to environmental obligations. In connection with the assumption of the Assumed Grace Indebtedness, those same individuals were required to provide a supplemental guaranty of certain indemnification obligations of affiliates of the sellers of the Grace Portfolio with respect to certain limited recourse and environmental indemnities provided to the lenders under the Assumed Grace Indebtedness. For a further description of these arrangements, see “Description of Real Estate Investments — Financial Obligations — Grace Acquisition Financing.

CARP, LLC Promissory Note.  In connection with the agreement we entered into on May 22, 2014 to acquire the Grace Portfolio, we were required to pay a $50.0 million customary earnest money deposit, which was partially funded by the execution by us of a $45.0 million promissory note in favor of CARP, LLC, an entity under common ownership with our sponsor. The promissory note was executed on May 27, 2014 and scheduled to mature on May 27, 2015, with interest accruing on the principal amount at a rate of 6.0% per annum commencing on July 1, 2014. As of August 18, 2014, we had repaid the promissory note in full. During the period the promissory note was outstanding, we paid $0.2 million in interest to CARP, LLC.”

Management Compensation

The first paragraph under the section “Management Compensation” on page 114 of the Prospectus is hereby replaced with the following disclosure.

“Our advisor and its affiliates have and will receive compensation and reimbursement for services relating to this offering and our ordinary course of operations. The most significant items of compensation and reimbursement are included in the table below. In addition, we have entered into agreements outside of our ordinary course of operations that provide for additional compensation to an affiliate of our dealer manager in connection with the Grace Acquisition. See “Conflicts of Interest — Agreements with RCAP Related to the Grace Acquisition.” During the period from our inception on July 25, 2013 through September 30, 2014, the amount of compensation, fees, distributions and expense reimbursements that we paid or reimbursed to the respective affiliates of our sponsor including our advisor and our dealer manager was $21.8 million. In addition, as of September 30, 2014, $7.7 million was accrued and unpaid. The following table summarizes all such compensation, fees, distributions and expense reimbursements that we pay or reimburse to the respective affiliates of our sponsor including our advisors and our dealer manager. The table also summarizes fees to be paid to our independent directors. Unless otherwise noted, the fees to be paid and expenses to be reimbursed

TABLE OF CONTENTS

described in this section are paid or reimbursed to our advisor, an affiliate of our sponsor. Selling commissions and dealer manager fees may vary for different categories of purchasers as described under “Plan of Distribution.””

The following disclosure is hereby replaces the section “Management Compensation — Property Management Fees — Our Sub-Property Manager or a Third-Party Sub-Property Manager” on pages 20 and 121 of the Prospectus.

“Property Management Fees —  Our Sub-Property Manager or a Third-Party Sub-Property Manager		We will pay a property management fee of up to 4.0% of the monthly gross receipts from the properties to our property manager. Our property manager will in turn pay a portion of the property management fees to our sub-property manager or a third-party sub-property manager, as applicable. We will reimburse the costs and expenses incurred by any sub- property manager on our behalf, including legal, travel and other out-of-pocket expenses that are directly related to the management of specific properties, as well as fees and expenses of any sub-property manager. We will not, however, reimburse any sub-property manager for general overhead costs or for the wages and salaries and other employee-related expenses of employees of such sub-property managers other than employees or subcontractors who are engaged in the on-site operation, management, maintenance or access control of our properties.		Actual amounts depend on gross revenues of specific properties and actual management fees or property management fees and customary leasing fees and therefore cannot be determined at the present time.”
		We also will pay to our sub-property manager an annual incentive fee equal to 15% of the amount by which the operating profit from the properties managed by our sub- property manager for such fiscal year (or partial fiscal year) exceeds 8.5% of the total investment of such properties. We may, in the future, pay similar fees to third-party sub-property managers.
		For purposes of this prospectus, “total investment” means the sum of (i) the price paid to acquire the property, including closing costs, conversion costs, and transaction costs; (ii) additional invested capital; and (iii) any other costs paid in connection with the acquisition of the property, whether incurred pre- or post-acquisition.

TABLE OF CONTENTS

Conflicts of Interest

The four paragraphs under the heading “Conflicts of Interest — Our Sponsor and its Affiliates” beginning on page 131 of the Prospectus is hereby replaced in its entirety with the following disclosure.

“Mr. Kahane is also an officer or director of ARC RCA, ARC RCA II, ARC HT II, ARCT V, ARC DNAV, ARC NYCR, ARC Global, ARC Global II, ARC HT III and RFT, which are public, non-traded REITs sponsored by the parent of our sponsor, advised by affiliates of our sponsor and for which our dealer manager acted or acts as dealer manager. Mr. Kahane is also executive chairman of NYRT, a REIT sponsored by the parent of our sponsor that is listed on the New York Stock Exchange. Mr. Kahane is also a director of BDCA and BDCA II, which are public, non-traded business development companies sponsored by the parent of our sponsor, advised by affiliates of our sponsor and for which our dealer manager acts as dealer manager. Mr. Kahane is also a director of the general partner of AERP, a non-traded oil and gas limited partnership sponsored by an entity under common control with our sponsor, advised by affiliates of our sponsor and for which our dealer manager acts as dealer manager. As of the date of this prospectus, our dealer manager is the dealer manager or is named in the registration statement as the dealer manager in several offerings, including some offerings in which the parent of our sponsor is the sole sponsor.

Every transaction that we enter into with our advisor, our property manager, our sub-property manager, our dealer manager or their respective affiliates is subject to an inherent conflict of interest. Our board of directors may encounter conflicts of interest in enforcing our rights against any affiliate in the event of a default by, or disagreement with, an affiliate or in invoking powers, rights or options pursuant to any agreement between us and our advisor, our property manager, our sub-property manager, our dealer manager or any of their respective affiliates.

These individuals also owe fiduciary duties to these other entities and their stockholders and limited partners, which fiduciary duties may conflict with the duties that they owe to us and our stockholders. Their loyalties to these other entities could result in actions or inactions that are detrimental to our business, which could harm the implementation of our business strategy and our investment and leasing opportunities. Conflicts with our business and interests are most likely to arise from involvement in activities related to (a) allocation of new investments and management time and services between us and the other entities, (b) our purchase of properties from, or sale of properties to, affiliated entities, (c) the timing and terms of the investment in or sale of an asset, (d) development of our properties by affiliates, (e) investments with affiliates of our advisor, (f) compensation to our advisor, and (g) our relationship with our dealer manager and property manager. If we do not successfully implement our business strategy, we may be unable to generate cash needed to make distributions to you and to maintain or increase the value of our assets. If these individuals act or fail to act in a manner that is detrimental to our business or favor one entity over another, they may be subject to liability for breach of fiduciary duty.

The parent of our sponsor has entered into a services agreement with RCS Advisory Services, LLC, or RCS Advisory, pursuant to which RCS Advisory provides us and other programs sponsored directly or indirectly by AR Capital, LLC with transaction management (including, without limitation, transaction management, due diligence, event coordination and marketing services) and other services. In addition, we have entered into agreements outside of our ordinary course of operations that provide for additional compensation to an affiliate of our dealer manager in connection with the Grace Acquisition. As explained in the following paragraph, RCS Advisory is an entity under common control with our sponsor, and therefore these agreements are related party transaction which were not negotiated at arms-length. The services agreement provides for an initial ten-year term, with automatic renewals for successive five-year periods, in each case, unless either party provides written notice of non-renewal to the other party at least 90 days prior to the expiration of the term. In addition, the agreement will terminate upon the earlier to occur of: (i) AR Capital, LLC’s delivery to RCS Advisory Services of a notice of non-compliance with its obligations under the agreement and the failure of the parties to resolve the matters referred to in the non-compliance notice; and (ii) the impact of a force majeure-related delay upon either party, if the force majeure results in performance being delayed by greater than 60 days. The terms of the agreements outside of our ordinary course of operations that provide for additional compensation to an affiliate of our dealer manager in connection with the Grace Acquisition are described under “— Agreements with RCAP Related to the Grace Acquisition.”

TABLE OF CONTENTS

Each of our dealer manager, our transfer agent and RCS Advisory are indirect subsidiaries of RCAP, a publicly traded holding company whose Class A common stock is listed on the New York Stock Exchange under the symbol “RCAP.” RCAP Holdings, LLC, or RCAP Holdings, is an entity under common control with the parent of our sponsor, and RCAP Holdings owns the only outstanding share of RCAP’s Class B common stock. Under RCAP’s certificate of incorporation, RCAP Holdings, as the holder of one share of Class B common stock, has one vote more than 50% of the voting rights of RCAP, and thereby controls RCAP and its subsidiaries, which includes our dealer manager, our transfer agent and RCS Advisory. As a result, our dealer manager, our transfer agent and RCS Advisory are under common control with our sponsor. The Class B common stock has no economic rights.

Although certain of our executive officers face conflicts of interest as a result of the foregoing, the following factors tend to ameliorate the effect of the resulting potential conflicts of interest. Our fundraising, including finding investors, is handled principally by our dealer manager, with our executive officers’ participation limited to participation in sales seminars. As described below, our dealer manager, a subsidiary of RCAP, an entity under common control with the parent of our sponsor, has a team of 341 professionals, which it believes is adequate and structured in a manner to handle sales for all of the offerings for which it is the dealer manager. Some of the other American Realty Capital-sponsored REITs also have sub-advisors or dedicated management teams who have the primary responsibility for investment activities of the REIT, which may mitigate some of these conflicts of interest.

Controlling interests in the dealer manager and the sponsors or co-sponsors of the American Realty Capital-sponsored investment programs are owned by Nicholas S. Schorsch and William M. Kahane. See the organizational chart in this section below. These members share responsibility for overseeing key management functions, including general management, investing, asset management, financial reporting, legal and accounting activities, marketing strategy and investor relations. RCAP believes this “bench” of senior members provides depth of management and is designed with succession planning in mind. Nonetheless, the competing time commitments resulting from managing multiple development stage REITs may impact our investment activities and our executive officers’ ability to oversee these activities.”

The following disclosure hereby replaces the disclosure under “Conflicts of Interest — Receipt of Fees and Other Compensation by Our Sponsor and its Affiliates” on page 133 of the Prospectus.

“Receipt of Fees and Other Compensation by Our Sponsor and its Affiliates

Our sponsor and its affiliates receive fees from us, which could be substantial and have not been negotiated at arm’s length. These fees could influence our advisor’s advice to us as well as the judgment of affiliates of our sponsor, some of whom also serve as our executive officers and directors and the key real estate professionals of our sponsor. Among other matters, these compensation arrangements could affect their judgment with respect to:

TABLE OF CONTENTS

The fees our advisor and its affiliates receive in connection with transactions involving the acquisition of assets are based initially on the purchase price of the investment, including the amount of any loan originations, and are not based on the quality of the investment or the quality of the services rendered to us. This may influence our advisor to recommend riskier transactions to us, and our advisor may have an incentive to recommend that we incur a high level of leverage. In addition, because the fees are based on the cost of the investment, it may create an incentive for our advisor to recommend that we purchase assets with more debt and at higher prices.

From time to time, subject to the approval of a majority of our independent directors, we may engage one or more entities under common ownership with the parent of our sponsor or our advisor to provide services not provided under existing agreements described in this prospectus. These engagements will be at terms no less favorable to us than could be obtained from an unaffiliated third party for comparable services, and may result in the payment of fees or reimbursement of expenses by us to such entities not described in “Management Compensation.” We have entered into such agreements with affiliates of our dealer manager including in connection with the Grace Acquisition. In addition, because the fees under these agreements, similar to the other agreements described above, are based on the cost of the investment, it may create an incentive for our advisor to recommend that we purchase assets with more debt and at higher prices. See “— Agreements with RCAP Related to the Grace Acquisition.””

The third sentence of the second paragraph under the section entitled “Allocation of Our Affiliates’ Time” on page 133 of the Prospectus is hereby replaced with the following disclosure.

“We believe that certain executive officers of our advisor, property manager and sub-property manager will devote a large portion of their time to us.”

The first sentence of the first paragraph under the heading “Conflicts of Interest — Affiliated Dealer Manager” on page 135 of the Prospectus is hereby replaced in its entirety with the following disclosure.

“Because our dealer manager is owned by an entity under common control with the parent of our sponsor, we will not have the benefit of an independent due diligence review and investigation of the type normally performed by an unaffiliated, independent underwriter in connection with the offering of securities.”

The seventh sentence of the second paragraph under the heading “Conflicts of Interest — Affiliated Dealer Manager” on page 135 of the Prospectus is hereby replaced in its entirety with the following disclosure.

“Our dealer manager and the other subsidiaries of RCAP, which is under common control with the parent of our sponsor, have a team of 341 professionals, which it believes is adequate and structured in a manner to handle sales for all of the offerings for which it is the dealer manager.”

The following disclosure is added as a new subsection under the subsection entitled “Conflicts of Interest — Receipt of Fees and Other Compensation by Our Advisor and Its Affiliates” on page 136 of the Prospectus.

“Agreements with RCAP Related to the Grace Acquisition

In connection with the Grace Acquisition, we entered into an agreement to pay $1.0 million to RCS Advisory Services, LLC, a wholly owned subsidiary of RCAP, for transaction management services in connection with the Grace Acquisition which supplement, but do not overlap with, the similar services that are provided to us in the ordinary course of our operations under the services agreement with RCS Advisory Services, LLC described above under “— Our Sponsor and its Affiliates.”

TABLE OF CONTENTS

As of February 27, 2015, the date of the closing of the Grace Acquisition, we had paid $0.8 million on account of this agreement and no further amounts will become due.

We have also entered into an agreement with the investment banking division of our dealer manager, to provide strategic financial advice and assistance in connection with the Grace Acquisition, such as performing financial advisory and analysis services, due diligence and negotiation of the financial aspects of the acquisition. We will pay a fee equal to 0.25% of the total transaction cost for these services. See “Description of Potential Real Estate Investments — Grace Acquisition” for more information about the Grace Acquisition.

As of February 27, 2015, the date of the closing of the Grace Acquisition, we had not yet paid any amounts on account of this agreement, although we expect to pay approximately $4.5 million.”

Note 6 of the chart under the heading “Conflicts of Interest — Independent Director” on page 141 of the Prospectus is hereby replaced in its entirety with the following disclosure.

“Our dealer manager is owned by an entity which is under common control with the parent of our sponsor.”

Investment Objectives and Criteria

The first parenthetical in the bullet point titled “Exit Strategy” under the heading “Investment Objectives and Criteria — Investment Objectives” on page 144 of the Prospectus is hereby replaced in its entirety with the following disclosure.

“(including an entity under common control with the parent of our sponsor)”

The first parenthetical in the first paragraph under the heading “Investment Objectives and Criteria — Exit Strategy — Liquidity Event” on page 147 of the Prospectus is hereby replaced in its entirety with the following disclosure.

“(including an entity under common control with the parent of our sponsor)”

Money Market Investments

The following disclosure hereby replaces the section “Investment Objectives and Criteria — Money Market Investments” on pages 150 – 151 of the Prospectus.

“Investments in Money Market Funds and Liquid Marketable Securities

Pending the purchase of other permitted investments, or to provide a working capital reserve described above, we may temporarily invest up to 5% of the proceeds of the equity capital raise in accounts managed by an affiliate of our advisor, National Fund Advisors, LLC, or NFA, in connection with which NFA may receive customary fees. The independent directors of our board will review the terms and conditions of any engagement of NFA, as well as the parameters of any such working capital reserve.

In addition, we may temporarily invest in one or more unaffiliated money market mutual funds or directly in certificates of deposit, commercial paper, interest-bearing government securities and other short-term instruments. We intend to hold substantially all funds, pending our investment in real estate or real estate-related assets, in assets which will allow us to continue to qualify as a REIT. These investments will be liquid and provide for appropriate safety of principal, such as cash, cash items and government securities. Cash items include cash on hand, cash deposited in time and demand accounts with financial institutions, receivables which arise in our ordinary course of operation, commercial paper and certificates of deposit. Generally, government securities are any securities issued or guaranteed as to principal or interest by the United States federal government. See the section entitled “Certain Material U.S. Federal Income Tax Considerations — Taxation — REIT Qualification Tests” in this prospectus.”

TABLE OF CONTENTS

Description of Real Estate Investments

The following disclosure hereby replaces the section “Description of Potential Real Estate Investments” beginning on page 171 of the Prospectus.

“DESCRIPTION OF REAL ESTATE INVESTMENTS

The Barceló Portfolio

On March 21, 2014, we acquired fee simple, leasehold or joint venture interests described below, from the minority interest holder in our sub-property manager for an aggregate contract purchase price of $106.5 million, exclusive of closing costs. Deferred payments of $3.5 million are due at maturity of the BCC Note. See “— Financial Obligations — BCC Note.” The following table sets forth key operation data for the hotels in the Barceló Portfolio.

Unless otherwise noted, these hotels are owned pursuant to a fee simple interest.

TABLE OF CONTENTS

TABLE OF CONTENTS

Each of these hotels is managed by our sub-property manager. In addition, each of these hotels is subject to a franchise agreement with a national corporate brand, other than the Georgia Tech Hotel & Conference Center. See “Management — The Property Manager and The Sub-Property Manager” and “— Franchise Agreements” for a description of these arrangements.

In connection with the closing of the acquisition of the Barceló Portfolio, we paid our advisor $1.6 million in acquisition fees and $0.8 million in financing coordination fees.

The hotels in the Barceló Portfolio were selected for acquisition because they each meet our investment criteria relating to location, market position and hotel condition. These hotels are globally branded select-service and full-service hotels, and are located near landmarks such as corporate headquarters, colleges or universities, tourist attractions, airports, retail centers or convention centers. The hotels are located in high barrier-to-entry markets with multiple demand generators and sustainable growth, and they are market share leaders in their respective locations. We believe that, excepting the renovation work that is being completed pursuant to the property improvement plans, or PIPs, imposed by the franchisors with respect to the hotels, each hotel is currently well maintained, with minimum deferred maintenance or renovation required. We believe all of these hotels are adequately insured.

The Grace Portfolio

On February 27, 2015, we acquired the fee simple or leasehold interests in the Grace Portfolio for a contract purchase price of $1.8 billion, exclusive of closing costs.

The Grace Portfolio includes 116 hotels located in 31 states, operating under franchise agreements under the Hilton, Marriott, Hyatt and Intercontinental Hotels Group brands and comprising a total of 13,744 rooms. For the year ended December 31, 2014, no individual hotel accounted for 5.0% or more of the Grace Portfolio’s total net operating income. The following table sets forth key operation data for the hotels in the Grace Portfolio. Unless otherwise noted to indicate that they are subject to a ground lease or serve as collateral under the Additional Grace Mortgage Loan, such hotels are owned pursuant to a fee simple interest and serve as collateral under the Assumed Grace Indebtedness.

TABLE OF CONTENTS

TABLE OF CONTENTS

TABLE OF CONTENTS

TABLE OF CONTENTS