Item 1.01. Entry into a Material Definitive Agreement.

          On October 7, 2011, AmREIT Monthly Income & Growth Fund III, Ltd., a Texas limited partnership (“MIG III”), through its wholly-owned subsidiary, AmREIT Lantern Lane, LP, a Texas Limited Partnership, (“the Borrower”), entered into a $12.8 million secured term loan (the “Term Loan”) with U.S. Bank National Association (the “Lender”). The purpose of the Term Loan is to refinance a $13.4 million mortgage on the approximately 6.7 acre Lantern Lane Shopping Center (the “Lantern Lane Property”) that matured in September 2011. The Term Loan will mature on April 7, 2013, unless the Borrower chooses to extend the maturity date by twelve months. Interest on the Term Loan is payable monthly at a rate per year of 3.00% plus the one-month LIBOR rate. If there is an event of default, at the Lender’s option, the entire unpaid balance of the Term Loan, including accrued, unpaid interest will become due and the interest rate will include the amount described above plus 5%. Principal is due on the date the loan matures, unless the Borrower extends the maturity date, in which case, beginning on May 1, 2013, the Borrower will make monthly principal payments of $16,318. The Borrower may voluntarily prepay the Term Loan, in full or in part, without premium or penalty after at least three business days’ prior written notice to the Lender of the date of prepayment.

          The Term Loan is secured by a first-priority lien on the Lantern Lane Property including, among other things, the buildings and other improvements on the property, and an assignment of all leases and rents pertaining to the property. MIG III has guaranteed up to $3.2 million of the principal amount of the Term Loan, accrued and unpaid interest and certain carve out losses incurred by the Lender. The financial covenants in the guaranty agreement require MIG III to maintain liquid assets of at least $1.0 million and a net worth of at least $25.0 million. The loan agreement contains customary representations and warranties, affirmative covenants and events of default, including defaults in the payment of principal or interest, defaults in compliance with the covenants contained in the documents evidencing the loan, and bankruptcy or other insolvency events.

          The description of the Term Loan contained herein does not purport to be complete and is qualified in its entirety by reference to the Term Loan Agreement, attached to this Current Report on Form 8-K as Exhibit 10.1 and incorporated herein by reference.

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under and Off-Balance Sheet Arrangement of a Registrant.

          The information set forth in Item 1.01 regarding the Term Loan is incorporated by reference into this Item 2.03.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

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