SecProbe.io

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

       DIVISION OF
CORPORATION FINANCE

        October 21, 2010  Mr. Richard R. Lavin Executive Vice President and Secretary Cole Advisor Retail Income REIT, Inc. 2575 East Camelback Road, Suite 500 Phoenix, AZ  85016
Re: Cole Advisor Retail Income REIT, Inc.
Registration Statement on Form S-11 Filed September 22, 2010
  File No. 333-169533

Dear Mr. Lavin:

We have reviewed your registration statem ent and have the following comments.  In
some of our comments, we may ask you to provi de us with information so we may better
understand your disclosure.
 Please respond to this letter by amending your registration statement and providing the
requested information.  If you do not believe  our comments apply to your facts and
circumstances or do not believe an amendment is appropriate, please tell us why in your
response.
 After reviewing any amendment to your re gistration statement and the information you
provide in response to these comments, we may have additional comments.

General

1. Please provide us with all promotional materi al and sales literature, including material
that will be used only by broke r-dealers. In this regard, pl ease note that sales materials
must set forth a balanced presentation of th e risks and rewards to investors and should not
contain any information or disclo sure that is inconsistent with  or not also provided in the
prospectus. Please refer to It em 19B of Industry Guide 5.

2. Please be advised that you ar e responsible for analyzing th e applicability of the tender
offer rules, including Rule 13e-4 and Regula tion 14E, to your share redemption plan. We
urge you to consider all the elements of your share redemption plan in determining
whether the program is consistent with re lief granted by the Division of Corporation
Finance in prior no action letters. See, for example, T REIT Inc. (Letter dated June 4, 2001), Wells Real Estate Investment Trust II, Inc. (Letter dated December 3, 2003) and Hines Real Estate Investment Trust, Inc. (Letter dated June 4, 2004). To the extent you

Richard R. Lavin, Exec utive Vice President
Cole Advisor Retail Income REIT, Inc.
October 21, 2010
Page 2
have questions as to whether the program is entirely consistent with the relief previously
granted by the Division of Cor poration Finance, you may cont act the division’s Office of
Mergers and Acquisitions.

3. We note that you may conduct the share rede mption plan during the offering period of
the shares being registered under this registration statement. Please be advised that you
are responsible for analyzing the applicabil ity of Regulation M to your share repurchase
plan. We urge you to consid er all the elements of your  share redemption plan in
determining whether the program is consis tent with the class relief granted by the
Division of Market Regulation in the class ex emptive letter granted Alston & Bird LLP
dated October 22, 2007.  You may contact the Division of Market Regulation to the
extent you have questions as to whether the pr ogram is entirely consistent with that class
exemption.
4. Please discuss how you determined the initial offering price of $10.  Refer to Item 505 of
Regulation S-K.

Prospectus Cover Page

5. We note that you plan to conduct a continuous offering of your shares for an indefinite
period of time.  Please remove this statemen t as the current registration statement will
only be effective for a period of up to three years, as noted by your disclosure on page
145.
6. The cover page is dense and difficult to read. Please revise to limit the cover page to the
information that is required by Item 501 of Regulation S-K and other information that is
key to an investment decision and confirm that the cover page will be one page in length.
Also, please note that the font size should be at least 10-point modern  type.  Please refer
to Rule 420 of Regulation C.
 7. Your second and third bullet points should be revised to provide more brevity.  Also,
after revising the third bullet point, please clar ify that you are not requ ired by the terms of
your charter to effect a liquidity event at any time in the future.

Questions and Answers About This Offering, page 1

8. To the extent information presented in this  subsection is addresse d in the prospectus
summary or repeated verbatim from other sections, please revise  to limit the use of
repetition.  Please refer to note 4 to Rule 421(b) of Regulation C.

How is your sponsor and advisor’s investment a pproach different from other non-traded REITs,
page 2
 9. It is not clear how the inform ation presented in this answer  actually illustrates how you
are different from other non-traded REITs.  Pl ease clarify your basis for the implication

Richard R. Lavin, Exec utive Vice President
Cole Advisor Retail Income REIT, Inc.
October 21, 2010
Page 3
that there are not other REIT s that utilize similar strate gies and have sponsors and
advisors with similar experiences.

What is an open-ended non-exchange traded REIT, page 2

10. If there are no other companies similar to  yours, please revise this Q&A and other
references to open-ended REITs to clarify th at there are no similar investment vehicles
currently available.
 How is an investment in shares of your common stock different from inve sting in shares of a
listed REIT, page 3

11. You specifically refer to yourself as a “direct investment in real estate.”  It is not clear
why a listed REIT that also inve sts in similar properties woul d not be considered a “direct
investment in real estate.”   Please clarify.  Also, your disclosure implies that an
investment in you does not correlate with the stock market and has le ss volatility.  Please
revise to clarify that the re duced correlation and volatility are also due to the lack of
liquidity and a trading market.
 12. Please revise to explain your implication th at your valuations ar e more accurate than
market valuations.
 Prospectus Summary, page 12

 13. We refer to your statement on page 13 that  you “expect that approximately 100% of
[y]our gross offering proceeds will be availa ble for investment.”  We further note that
several of your fees, for example the distri bution fee and organization and offering fee,
are based on the number of shares outstanding.  As it appears that you will be required to
pay fees prior to investing offering proceeds, please tell us how 100% of gross offering proceeds will be available for investment, or remove this language.
 Valuation Policies, page 16

 14. Please confirm that you will identify your independent valuation expert at such time as you have entered into an agreement with the expert.

Distributions, page 18

15. We note your disclosure on page 116 that you in tend to commence distributions the first
quarter after the end of the escrow period.  Please revise to clarify if you will have sufficient cash flow from operations after the fi rst quarter to satisfy such distributions.  If
not, please clarify that such distributions would likely be  from offering proceeds or
borrowings.

Richard R. Lavin, Exec utive Vice President
Cole Advisor Retail Income REIT, Inc.
October 21, 2010
Page 4

Leverage, page 19
 16. We note your reference here to a target leverage of 50%.  On page 65, we note a reference to 60%.  Please tell us how the noted disclosures are consistent.

Statements Regarding Forward- Looking Information, page 53

17. We refer to the initial sentence in this sect ion, which states that “[c]ertain statements
contained in or incorporated by reference into this prospectus  including, without
limitation, those related to our future operations , constitute forward-l ooking statements.”
This statement is overly broad as it could include statements that do not relate to future
operations.  Please revise.  In addition, pe r Instruction VII to Form S-1, you are not
eligible to incorporate by reference into the registration statement, nor does it appear that
you have incorporated any information by refe rence.  Please advise us as to why you
have included this language.
 Use of Proceeds, page 53

 18. On page 29, you disclose that payment of f ees to your advisor and dealer manager will
reduce your cash available for investment.  To the extent that you incur the asset-based distribution fee, such funds would not be ava ilable for investment.  As such, please tell us
why you should not include an estimated am ount for such expense within the table
disclosed here.
 Valuation Policies, page 70

 19. We note that your board has not yet adopted th e guidelines to be used by the independent
valuation expert.  Please revise to clarify if  you will inform investors of such guidelines,
once established, so that they can place th e valuations used to determine NAV into
context.
 20. Please revise to clarify if you will provide not ification and a discussion of the basis when
you make a change in the i ndependent valuation expert.

21. Please revise to discuss how the valuation expert will be compensated and whether the
compensation structure creates  a conflict of interest.

Calculation of our NAV Per Share, page 72

22. On page 145, we note that the price of your sh ares will vary from day to day and on any
given day will equal your NAV divided by the number of shares outstanding.  Please
revise to clarify the frequency with which you will update your NAV within a given
quarter.

Richard R. Lavin, Exec utive Vice President
Cole Advisor Retail Income REIT, Inc.
October 21, 2010
Page 5

The Advisor, page 80
 23. Please revise to clarify if the advisor has any other personnel other than those listed on
page 80.  Also, please clarify whether your advi sor is currently capable of fulfilling all of
its duties and obligations owed to you and if any other party, re lated or unrelated, will be
employed to fulfill such duties.
 Compensation, page 88

 24. We note that you have not included any acquisi tion or disposition fees related to future
property transactions.  Please clarify if you will not incur a ny transaction related fees,
even in the form of reimbursements, for the se rvices outlined in the ad visory agreement.
 25. We note that you will provide reimbursements to your advisor for the costs and expenses it incurs in providing services to you.  Pleas e clarify the services to be received in
exchange for the management fee in light of the broad possibilities fo r reimbursements.
 26. On page 38, you disclose your advisor’s intenti on to engage a third party to manage your
properties.  Please clarify if the third part y will be paid out of the management fees
received by your advisor or if you will re imburse the third party’s full fees.
 Certain Conflict Resolution Procedures, page 101

 27. In the first bullet point you note that you may sell or lease proper ties to related parties.  In
buying properties from related parties, you ha ve limited the price to either cost or
appraisal value.  Please revise to clarify if similar limitations exist when selling or leasing
properties to re lated parties.
 Prior Performance Summary, page 104

 28. Please confirm to us that you have disclosed all major adverse busin ess developments of
your prior programs that would be material to investors in this offering.  We note your statements that some prior programs have “occasionally been adversely affected by the
cyclical nature of th e real estate market,” and that  you have provided one example of
such a program.
29. Please add a separate subh eading entitled “Adverse Developments” to your adverse
business developments discussion.
 Distributions, page 116

 30. Please revise to disclose the potential imp act on distributions resulting from redemption
payments and fees and expenses  payable to your advisor.

Richard R. Lavin, Exec utive Vice President
Cole Advisor Retail Income REIT, Inc.
October 21, 2010
Page 6

Material U.S. Federal Income Tax Considerations, page 123
 Taxation of Our Company, page 123

 31. Please note that you are required to file a final tax opinion prior to effectiveness.  Refer to
Item 601(b)(8) of Regulation S-K.  Please also  revise your disclosure to state that you
have received an opinion from your tax counsel.
 Compensation of Our Deal er Manager…., page 146

 32. Please tell us why you are not able to provide an estimate of these fees with your disclosure on page 88 based on the maximum amount sold and assuming that your NAV remains at $10/share or based on the 10% and 15% limitations.
 Prior Performance Tables

 33. To the extent the disclosure on pages A-1 and A-2 repeat disclosure already included in your prior performance summary section, please revise to limit such repetition.
 Exhibit Index, page II-93

 34. Please file your remaining exhibits as soon as possible in order to allow us sufficient time
to review those documents.  If you are not pr epared to file your legal and tax opinions
with your next amendment, please provide  draft opinions for us to review.

35. We note that the majority of exhibits are list ed as “form of” agreemen ts.  Please all tell us
why you are unable to file final agre ements prior to effectiveness.
 We urge all persons who are responsible for th e accuracy and adequacy of the disclosure
in the filing to be certain that the filing incl udes the information the Securities Act of 1933 and
all applicable Securities Act rules require.  Since the company and its management are in
possession of all facts relating to a company’s disclosure, they are responsible for the accuracy and adequacy of the disclosures they have made.
Notwithstanding our comments, in the event you request acceleration of  the effective date
of the pending registration statement please pr ovide a written statement from the company
acknowledging that:
• should the Commission or the staff, acting purs uant to delegated authority, declare the
filing effective, it does not foreclose the Co mmission from taking any action with respect
to the filing;

• the action of the Commission or the staff, acting pursuant to delegated authority, in
declaring the filing effective, does not relieve the company from its full responsibility for
the adequacy and accuracy of the disclosure in the filing; and

Richard R. Lavin, Exec utive Vice President
Cole Advisor Retail Income REIT, Inc.
October 21, 2010
Page 7

• the company may not assert staff comments a nd the declaration of effectiveness as a
defense in any proceeding initiated by the Commission or any person under the federal
securities laws of the United States.

Please refer to Rules 460 and 461 regarding re quests for acceleration.  We will consider a
written request for acceleration of  the effective date of the regi stration statement as confirmation
of the fact that those reques ting acceleration are aware of thei r respective responsibilities under
the Securities Act of 1933 and the Securities Excha nge Act of 1934 as they relate to the proposed
public offering of the securities specified in the above registration stat ement.  Please allow
adequate time for us to review any amendment prior to the requested effective date of the registration statement.
 You may contact Michael P okorny, Staff Accountant, at  (202) 551-3714 or Cicely
Lamothe, Accounting Branch Chief, at (202) 551-3413 if you have questions regarding comments on the financial statements and related matters.  Please contact Kristina Aberg, Attorney-Advisor, at (202) 551-3404 or me at (202) 551-3386 with any other questions.

Sincerely,

Duc Dang Senior Counsel
 cc: Ettore A. Santucci, Esq.  Goodwin Proctor LLP