UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
For the fiscal year ended December 31, 20192022
or
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from__________ to __________
Commission File Number: 001-13779
W. P. Carey Inc.
(Exact name of registrant as specified in its charter)
| Maryland | 45-4549771 | |||||||
| (State of incorporation) | (I.R.S. Employer Identification No.) | |||||||
| 10001 | ||||||||
| (Address of principal executive offices) | (Zip Code) | |||||||
Investor Relations (212) 492-8920
(Registrant’s telephone numbers, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of exchange on which registered | ||||||||||||
| Common Stock, $0.001 Par Value | WPC | New York Stock Exchange | ||||||||||||
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☑ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☑
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☑ | Accelerated filer | ☐ | Non-accelerated filer | ☐ | ||||||||||||
| Smaller reporting company | ☐ | Emerging growth company | ☐ | ||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☑
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☑
State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of last business day of the registrant’s most recently completed second fiscal quarter: $13.8$15.9 billion.
As of February 14, 20203, 2023, there were 172,278,242210,621,971 shares of Common Stock of registrant outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
The registrant incorporates by reference its definitive Proxy Statement with respect to its 20202023 Annual Meeting of Stockholders, to be filed with the Securities and Exchange Commission within 120 days following the end of its fiscal year, into Part III of this Annual Report on Form 10-K.
INDEX
| Page No. | ||||||||
| PART I | ||||||||
| Item 1. | ||||||||
| Item 1A. | ||||||||
| Item 1B. | ||||||||
| Item 2. | ||||||||
| Item 3. | ||||||||
| Item 4. | ||||||||
| PART II | ||||||||
| Item 5. | ||||||||
| Item 6. | ||||||||
| Item 7. | ||||||||
| Item 7A. | ||||||||
| Item 8. | ||||||||
| Item 9. | ||||||||
| Item 9A. | ||||||||
| Item 9B. | ||||||||
| PART III | ||||||||
| Item 10. | ||||||||
| Item 11. | ||||||||
| Item 12. | ||||||||
| Item 13. | ||||||||
| Item 14. | ||||||||
| PART IV | ||||||||
| Item 15. | ||||||||
| Item 16. | ||||||||
W. P. Carey | |||||
Forward-Looking Statements
This Annual Report on Form 10-K (the “Report”), including Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 7 of Part II of this Report, contains forward-looking statements within the meaning of the federal securities laws. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. These forward-looking statements include, but are not limited to, statements regarding: our potential UPREIT Reorganization (both as discussed andthe impact of the CPA:18 Merger (as defined herein); the amount and timing of any future dividends; statements regarding our corporate strategy and estimated or future economic performance and results, including the general economic outlook and our projected assets under management,expectations surrounding the continued impact of the novel coronavirus (“COVID-19”) pandemic on our business, financial condition, liquidity, results of operations, and prospects; underlying assumptions about our portfolio, (e.g., occupancy rate, lease terms,including tenant rent collections and tenant credit quality), possible new acquisitionsbankruptcies, as well as the estimated fair value of our investments and dispositions,properties; the amount and our international exposure (including the effectstiming of Brexit, as defined herein);any future dividends; our capital structure, future capital expenditure and leverage levels, (includingdebt service obligations, and any plans to fund our future liquidity needs), and future leverage and debt service obligations;needs; prospective statements regarding our access to the capital markets, including related to our credit ratings, and ability to sell shares under our “at-the-market” program (“ATM Program”), and the usesettlement of proceeds from that program;our Equity Forwards (as defined herein); the outlook for the investment programsprogram that we manage, including their earnings, as well as possible liquidity events for those programs;the program; statements that we make regarding our ability to remain qualified for taxation as a real estate investment trust (“REIT”); and the impact of recently issued accounting pronouncements and other regulatory activity; and the general economic outlook. activity.
These statements are based on the current expectations of our management. It is important to note that our actual results could be materially different from those projected in such forward-looking statements. There are a number of risks and uncertainties that could cause actual results to differ materially from these forward-looking statements. Other unknown or unpredictable factorsrisks or uncertainties, like the risks related to inflation and increased interest rates, the effects of pandemics and global outbreaks of contagious diseases (such as the ongoing COVID-19 pandemic) and domestic or geopolitical crises, such as terrorism, military conflict (including the ongoing conflict between Russia and Ukraine and the global response to it), war or the perception that hostilities may be imminent, political instability or civil unrest, or other conflict, could also have material adverse effects on our business, financial condition, liquidity, results of operations, and prospects. You should exercise caution in relying on forward-looking statements as they involve known and unknown risks, uncertainties, and other factors that may materially affect our future results, performance, achievements, or transactions. Information on factors that could impact actual results and cause them to differ from what is anticipated in the forward-looking statements contained herein is included in this Report, as well as in our other filings with the Securities and Exchange Commission (“SEC”), including but not limited to those described in Item 1A. Risk Factors and Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operationsof this Report. Moreover, because we operate in a very competitive and rapidly changing environment, new risks are likely to emerge from time to time. Given these risks and uncertainties, potential investors are cautioned not to place undue reliance on these forward-looking statements as a prediction of future results, which speak only as of the date of this presentation, unless noted otherwise. Except as required by federal securities laws and the rules and regulations of the SEC, we do not undertake to revise or update any forward-looking statements.
All references to “Notes” throughout the document refer to the footnotes to the consolidated financial statements of the registrant in Part II, Item 8. Financial Statements and Supplementary Data.
W. P. Carey | |||||
PART I
Item 1. Business.
General Development of Business
W. P. Carey Inc. (“W. P. Carey”), together with our consolidated subsidiaries and predecessors, is an internally-managed diversified REIT and a leading owner of commercial real estate, net-leased to companies located primarily in the United States and Northern and Western Europe on a long-term basis. The vast majority of our revenues originate from lease revenue provided by our real estate portfolio, which is comprised primarily of single-tenant industrial, warehouse, office, retail, and self-storage facilities that are critical to our tenants’ operations. Our portfolio is comprised of 1,2141,449 properties, net-leased to 345392 tenants in 2526 countries. As of December 31, 2019,2022, approximately 64%63% of our contractual minimum annualized base rent (“ABR”) was generated by properties located in the United States and approximately 34% was generated by properties located in Europe. As of that same date, our portfolio included 2187 operating properties, comprised of 1984 self-storage properties, two student housing properties, and two hotels (one of which was sold in January 2020, see one hotel.
Founded in 1973, we originally operated as sponsor and advisor to a series of non-traded investment programs under the Corporate Property Associates (“CPA”) brand name. We became a publicly traded company listed on the New York Stock Exchange (“NYSE”) in 1998 and reorganized as a REIT in 2012. In June 2017, we exited non-traded retail fundraising activities and no longer sponsor new investment programs. On October 31, 2018, one of our former investment programs, Corporate Property Associates 17 – Global Incorporated (“CPA:17 – Global”), merged into one of our wholly-owned subsidiaries (the “CPA:17 Merger”), which added approximately $5.6 billion of assets to our portfolio.
Our shares of common stock are listed on the NYSE under the ticker symbol “WPC.” Headquartered in New York, we also have offices in Dallas, London, and Amsterdam. At December 31, 2019, we had 204 employees.
Narrative Description of Business
Business Objectives and Strategy
Our primary business objective is to increaseinvest in a diversified portfolio of high-quality, mission-critical assets subject to long-term stockholder value through accretive acquisitions and proactive asset managementnet leases with built-in rent escalators for the purpose of our real estate portfolio,generating stable cash flows, enabling us to grow our dividend.dividend and increase long-term stockholder value.
Our investment strategy primarily focuses on owning and actively managing a diverse portfolio of commercial real estate that is net-leased to credit-worthy companies. We review and evaluate the fundamental value of the underlying real estate. We believe that many companies prefer to lease rather than own their corporate real estate because it allows them to deploy their capital more effectively into their core competencies. We generally structure financing for companiesspecialize in the form of sale-leaseback transactions, where we acquire a company’s critical real estate and then lease it back to them on a long-term, triple-net basis, which requires them to pay substantially all of the costs associated with operating and maintaining the property (such as real estate taxes, insurance, and facility maintenance). Compared to other types of real estate investments, sale-leaseback transactions typically produce a more predictable income stream and require minimal capital expenditures, which in turn generate revenues that provide our stockholders with a stable, growing source of income.
Our business operates in two segments: Real Estate and Investment Management, as described herein and in Note 1. Our Real Estate segment generates the vast majority of December 31, 2019,our earnings through the lease revenues we also managed assets, totaling approximately $7.5 billion,earn from our real estate investments. We have historically earned asset management fees and other compensation from the management of non-traded real estate investment programs through our Investment Management segment. Following the close of the following entities: (i) Corporate Property Associates CPA:18 Merger, our advisory agreements with CPA:18 – Global Incorporated (“CPA:18 – Global,” and together with CPA:17 – Global until October 31, 2018, the “CPA REITs”were terminated (Note 3); (ii). On April 13, 2020, two publicly owned, non-traded REITs that have invested in lodging and lodging-related properties:of our former investment programs, Carey Watermark Investors Incorporated (“CWI 1”) and Carey Watermark Investors 2 Incorporated (“CWI 2,”2”) (together, the “CWI REITs”), merged in an all-stock transaction (the “CWI 1 and togetherCWI 2 Merger”). Following the close of the CWI 1 and CWI 2
W. P. Carey 2022 10-K– 3 | |||||
Merger, our advisory agreements with CWI 1 and CWI 2 were terminated and CWI 2 was renamed Watermark Lodging Trust, Inc. (“WLT”) (Note 4). As used herein, “Managed Programs” refers to CPA:18 – Global (through August 1, 2022), the “CWI REITs”);CWI REITs (through April 13, 2020), and (iii) a private limited partnership formed for the purpose of developing, owning, and operating student housing properties and similar investments in Europe: Carey European Student Housing Fund I, L.P. (“CESH”). As used herein, “Managed REITs” refers to the CPA REITs and the CWI REITS, all of which have fully invested the funds raised in their offerings.
We intend to operate our business in a manner that is consistent with the maintenance of our status as a REIT for federal income tax purposes. In addition, we expect to manage our investments in order to maintain our exemption from registration as an investment company under the Investment Company Act of 1940, as amended.
Investment Strategies
When considering potential net-lease investments for our real estate portfolio, we review various aspects of a transaction to determine whether the investment and lease structure will satisfy our investment criteria. We generally analyze the following main aspects of each transaction:
Tenant/Borrower Evaluation — We evaluate each potential tenant or borrower for creditworthiness, typically considering factors such as management experience, industry position and fundamentals, operating history, and capital structure. We also rate each asset based on its market, liquidity, and criticality to the tenant’s operations, as well as other factors that may be unique to a particular investment. We seek opportunities where we believe the tenant may have a stable or improving credit profile or credit potential that has not been fully recognized by the market. We define creditworthiness as a risk-reward relationship appropriate to our investment strategies, which may or may not coincide with ratings issued by the credit rating agencies. We have a robust internal credit rating system and may designate a tenantsubsidiaries of non-guarantor parent companies with investment grade ratings as “implied investment grade” even if the credit rating agencies have not made a rating determination.grade.”
Properties Critical to Tenant/Borrower Operations — We generally focus on properties and facilities that we believe are critical to the ongoing operations of the tenant. We believe that these properties generally provide better protection, particularly in the event of a bankruptcy, since a tenant/borrower is less likely to risk the loss of a critically important lease or property in a bankruptcy proceeding or otherwise.
Diversification — We attempt to diversify our portfolio to avoid undue dependence on any one particular tenant, borrower, collateral type, geographic location, or industry. By diversifying our portfolio, we seek to reduce the adverse effect of a single underperforming investment or a downturn in any particular industry or geographic region. While we do not set any fixed diversity metrics in our portfolio, we believe that it is well-diversified.
Lease Terms — Generally, the net-leased properties we invest in are leased on a full-recourse basis to the tenants or their affiliates. In addition, the vast majority of our leases provide for scheduled rent increases over the term of the lease (see Our Portfolio below). These rent increases are either fixed (i.e., mandated on specific dates) or tied to increases in inflation indices (e.g., the Consumer Price Index (“CPI”) or similar indices in the jurisdiction where the property is located), but may contain caps or other limitations, either on an annual or overall basis. In the case of retail stores and hotels, the lease may provide for participation in the gross revenues of the tenant above a stated level, which we refer to as percentage rent.
Real Estate Evaluation — We review and evaluate the physical condition of the property and the market in which it is located. We consider a variety of factors, including current market rents, replacement cost, residual valuation, property operating history, demographic characteristics of the location and accessibility, competitive properties, and suitability for re-leasing. We obtain third-party environmental and engineering reports and market studies when required. When considering an investment outside the United States, we will also consider factors particular to a country or region, including geopolitical risk, in addition to the risks normally associated with real property investments. See Item 1A. Risk Factors.
Transaction Provisions to Enhance and Protect Value — When negotiating leases with potential tenants, we attempt to include provisions that we believe help to protect the investment from material changes in the tenant’s operating and financial characteristics, which may affect the tenant’s ability to satisfy its obligations to us or reduce the value of the investment. Such provisions include covenants requiring our consent for certain activities, requiring indemnification protections and/or security deposits, and requiring the tenant to satisfy specific operating tests. We may also seek to enhance the likelihood that a tenant will satisfy their lease obligations through a letter of credit or guaranty from the tenant’s parent or other entity. Such credit enhancements, if obtained, provide us with additional financial security. However, in markets where competition for net-lease transactions is strong, some or all of these lease provisions may be difficult to obtain. In addition, in some circumstances, tenants may retain the option to repurchase the property, typically at the greater of the contract purchase price or the fair market value of the property at the time the option is exercised.
W. P. Carey 2022 10-K– 4 | |||||
Competition — We face active competition from many sources, both domestically and internationally, for net-lease investment opportunities in commercial properties. In general, we believe that our management’s experience in real estate, credit underwriting, and transaction structuring will allow us to compete effectively for commercial properties. However, competitors may be willing to accept rates of return, lease terms, other transaction terms, or levels of risk that we find unacceptable.
Asset Management
We believe that proactive asset management is essential to maintaining and enhancing property values. Important aspects of asset management include entering into new or modified transactions to meet the evolving needs of current tenants, re-leasing properties, credit and real estate risk analysis, building expansions and redevelopments, repositioning assets, sustainability and efficiency analysis and retrofits, and strategic dispositions. We regularly engage directly with our tenants and form long-term working relationships with their decision makers in order to provide proactive solutions and to obtain an in-depth, real-time understanding of tenant credit.
We monitor compliance by tenants with their lease obligations and other factors that could affect the financial performance of our real estate investments on an ongoing basis, which typically involves ensuring that each tenant has paid real estate taxes and other expenses relating to the properties it occupies and is maintaining appropriate insurance coverage. To ensure such compliance at our international properties, we often engage the expertise of third parties to complete property inspections. We also review tenant financial statements and undertake regular physical inspections of the properties to verify their condition and maintenance. Additionally, we periodically analyze each tenant’s financial condition, the industry in which each tenant operates, and each tenant’s relative strength in its industry. The in-depth understanding of our tenants’ businesses and direct relationships with their management teams provides strong visibility into potential issues as well as additional investment opportunities. Our business intelligence platform provides real-time surveillance and early warning, allowing asset managers to work with tenants to enforce lease provisions, and where appropriate, consider lease modifications.
Financing Strategies
We believe in maintaining ample liquidity, a conservative capital structure, and access to multiple forms of capital. We preserve balance sheet flexibility and liquidity by maintaining significant capacity on our $1.8 billion unsecured revolving credit facility (the “Unsecured Revolving Credit Facility”), as well as aany amounts available to us under our term loan (“Term Loan”) and a delayed draw term loan (“Delayed Draw Term Loan”), which, together with our Unsecured Revolving Credit Facility, we refer to collectively as our “Senior Unsecured Credit Facility,Facility.” and which was amended and restated in February 2020 for a total capacity of $2.1 billion (our “Amended Credit Facility” (Note 20)).We also hold cash on hand to settle our forward equity arrangements, as needed. We generally use the Senior Unsecured Revolving Credit Facility to fund our immediate capital needs, including new acquisitions and the repayment of secured mortgage debt as we continue to unencumber our balance sheet.assets. We seek to replace short-term financing with more permanent forms of capital, including, but not limited to, common stock, unsecured debt securities, bank debt, and proceeds from asset sales. When evaluating which form of capital to pursue, we take into consideration multiple factors, including our corporate leverage levels and targets, and the most advantageous sourcesattractive source of capital available to us,us. We may choose to issue unsecured debt securities and the optimal timingbank debt denominated in foreign currencies in part to raise new capital.fund international acquisitions, unencumber assets, and mitigate our exposure to fluctuations in exchange rates. We strive to maintain an investment grade rating, thatwhich places limitations on the amount of leverage acceptable in our capital structure. Although we expect to continue to have access to a wide variety of capital sources and maintain our investment grade rating, there can be no assurance that we will be able to do so in the future.
Our Portfolio
At December 31, 2019,2022, our portfolio had the following characteristics:
•Number of properties — full or partial ownership interests in 1,2141,449 net-leased properties, 1984 self-storage properties, two student housing properties, and two hotels;one hotel;
•Total net-leased square footage — 140.0approximately 176 million; and
•Occupancy rate — approximately 98.8%.
For more information about our portfolio, see Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Portfolio Overview.
W. P. Carey 2022 10-K– 5 | |||||
Tenant/Lease Information
At December 31, 2019,2022, our tenants/leases had the following characteristics:
•Number of tenants — 345;392;
•Investment grade tenants as a percentage of total ABR — 22%24%;
•Implied investment grade tenants as a percentage of total ABR — 8%7%;
•Weighted-average lease term — 10.710.8 years;
◦CPI and similar — 55.5% ◦Fixed — 40.0% ◦Other — 3.5% Human Capital Investing in Our Employees At December 31, 2022, we had 193 employees, 141 of which were located in the United States and 52 of which were located in Europe. We strive to make W. P. Carey a great place to work by attracting a diverse pool of the best and brightest applicants and making them feel supported as they grow with the company. We offer various levels of training, including “Respect in the Workplace,” skills training, Diversity, Equity & Inclusion, and executive coaching, as well as additional training including safety and cybersecurity. By engaging with our employees and investing in their careers through training and development, we have built a talented workforce capable of executing our business strategies. Diversity We believe that our success is dependent upon the diverse backgrounds and perspectives of our employees and directors. W. P. Carey is an equal opportunity employer and considers qualified applicants regardless of race, color, religion, sexual orientation, gender, gender identity or expression, national origin, age, disability, military or veteran status, genetic information, or other statuses protected by applicable federal, state, and local law. Our diversity, equity and inclusion initiative is designed to facilitate conversations around race, sexual orientation and gender identity, national origin, creeds, and other important topics. These conversations, led by our Diversity, Equity & Inclusion Advisory Committee, provide a forum for us to translate our positions as a company into action in both our internal and external communities. We are also signatory to the CEO Action Pledge for Diversity & Inclusion, which reflects our commitment to fostering a more diverse and inclusive workforce. Employee Wellness and Benefits The health and wellness of our employees and their families are paramount and our comprehensive benefits package is designed to address the evolving needs of our diverse workforce and their dependents. Our benefits package is evaluated on an annual basis. In addition to robust health and wellness benefits, we also provide our employees with competitive compensation programs, with a focus on both current compensation and retirement planning for their future. Additional information regarding our human capital programs and initiatives is available in our annual Proxy Statement and Environmental, Social, and Governance (“ESG”) Report, which can be found on our company website. Information on our website, including our ESG Report, is not incorporated by reference into this Report. |
Available Information
We will supply to any stockholder, upon written request and without charge, a copy of this Report as filed with the SEC. Our filings can also be obtained for free on the SEC’s website at http://www.sec.gov. All filings we make with the SEC, including this Report, our quarterly reports on Form 10-Q, and our current reports on Form 8-K, as well as any amendments to those reports, are available for free on the Investor Relations portion of our website http:(http://www.wpcarey.com,www.wpcarey.com), as soon as reasonably practicable after they are filed with or furnished to the SEC.
W. P. Carey 2022 10-K– 6 | |||||
Our quarterly earnings conference call and investor presentations are accessible by the public. We generally announce via press release the dates and conference call details for upcoming scheduled quarterly earnings announcements and webcast investor presentations, which are also available in the Investor Relations section of our website approximately ten days prior to the event.
Our Code of Business Conduct and Ethics, which applies to all employees, including our chief executive officer and chief financial officer, is also available on our website. We intend to make available on our website any future amendments or waivers to our Code of Business Conduct and Ethics within four business days after any such amendments or waivers. We are providing our website address solely for the information of investors and do not intend for it to be an active link. We do not intend to incorporate the information contained on our website into this Report or other documents filed with or furnished to the SEC.
Item 1A. Risk Factors.
Our business, results of operations, financial condition, and ability to pay dividends could be materially adversely affected by various risks and uncertainties, including those enumerated below. These risk factors may have affected, and in the future could affect, our actual operating and financial results, andbelow, which could cause such results to differ materially from those in any forward-looking statements. You should not consider this list exhaustive. New risk factors emerge periodically and we cannot assure you that the factors described below list all risks that may become material to us at any later time.
Risks Related to Our BusinessPortfolio and Ownership of Real Estate
We face activean increasingly competitive marketplace for investments.
The net lease financing market is perceived as a relatively conservative investment vehicle and there has been increasing capital inflows into our sector; accordingly, we face escalating competition for investments.
investments, both domestically and internationally. We face active competitioncompete for our investments fromwith many sources,other financial institutions and investors, including credit companies,other REITs, private equity firms, pension funds, private individuals, financial institutions,and finance companies, and investment companies. These institutionsOur competitors may accept greater risk or lower returns, allowing them to offer more attractive terms to prospective tenants. We believe that the investment community remains risk averse and that the net lease financing market is perceived as a relatively conservative investment vehicle.
In addition, expectations of rising interest rates may increase our cost of capital, while capitalization rates (which generally respond to higher interest rates on a lag) could remain low or continue to decline, thereby placing additional pressure on investment spreads throughout the net lease sector. Finally, the vast majority of our current investments are in single-tenant commercial properties that are subject to triple-net leases. Many factors, including changes in tax laws or accounting rules, may make these types of sale-leaseback transactions less attractive to potential sellers and lessees, which could negatively affect our ability to increase these types of investments.
We are not required to meet any diversification standards; therefore, our investments may become subject to concentration risks.
Subject to our intention to maintain our qualification as a REIT, we are not required to meet any diversification standards. Therefore, our investments may become concentrated in type or geographic location, which could subject us to significant risks with potentially adverse effects on our investment objectives.
Inflation and increased interest rates may adversely affect our financial condition and results of operations.
Increases in inflation and interest rates could have an adverse impact on the amountcost of our existing variable-rate debt, new debt obligations entered into in the future, and costs incurred by the company through its operations. Our leases typically require tenants to pay all property operating expenses and increases in those property-level expenses at our leased properties generally do not affect us. However, increased operating expenses at properties not subject to full triple-net leases could cause us to incur additional operating expenses. Increases in inflation could also impact other costs incurred by the company including general and administrative costs. While the vast majority of leases contain rent escalators, including inflation-linked rent escalators, these costs could increase at a rate higher than our rental and other revenue. In addition, as a result of rising interest rates we may experience difficulty arranging third-party financing, including refinancing maturing debt in part or in full as it comes due, and could pay higher interest costs on future financings. If increases in costs are not sufficiently offset by the contractual rent
W. P. Carey 2022 10-K– 7 | |||||
increases or increases in other revenue, we may be required to implement measures to conserve cash or preserve liquidity. Certain financial covenants could be affected as a result of higher debt service costs, which may place restrictions on our liquidity. If we are unable to find alternative credit arrangements or other funding in a high interest environment, our business needs may not be adequately met. Tenants and potential tenants of our properties may also be adversely impacted by inflation and rising interest rates, which could negatively impact our tenants’ ability to pay rent and the demand for our properties. Such adverse impacts on our tenants may cause increased vacancies and lower future rents.
We may incur substantial impairment charges.
We may incur substantial impairment charges, which could adversely affect our results of operations or limit our ability to dispose of assets at attractive prices and may reduce the availability of this typebuyer financing. By their nature, the timing or extent of impairment charges are not predictable.
Because we invest in properties located outside the United States, we are exposed to additional risks.
We have invested, and may continue to invest, in properties located outside the United States. At December 31, 2022, our real estate properties located outside of the United States represented 37% of our ABR. These investments may be affected by factors particular to the local jurisdiction where the property is located and may expose us to additional risks, including:
•enactment of laws relating to foreign ownership of property (including expropriation of investments), or laws and regulations relating to our ability to repatriate invested capital, profits, or cash and cash equivalents back to the United States;
•legal systems where the ability to enforce contractual rights and remedies may be more limited than under management.U.S. law;
•difficulty in complying with conflicting obligations in various jurisdictions and the burden of observing a variety of evolving foreign laws, regulations, and governmental rules and policies, which may be more stringent than U.S. laws and regulations (including land use, zoning, environmental, financial, and privacy laws and regulations, such as the European Union’s General Data Protection Regulation);
•tax requirements vary by country and existing foreign tax laws and interpretations may change (e.g., the on-going implementation of the European Union’s Anti-Tax Avoidance Directives), which may result in additional taxes on our international investments;
•changes in operating expenses in particular countries or regions;
•increased energy and commodity prices in Europe;
•foreign exchange rates; and
•geopolitical and military conflict risk and adverse market conditions caused by changes in national or regional economic or political conditions, including the ongoing conflict between Russia and Ukraine (which may impact relative interest rates and the terms or availability of debt financing).
The failure of our compliance and internal control systems to properly mitigate such additional risks, or of our operating infrastructure to support such international investments, could result in operational failures, regulatory fines, or other governmental sanctions. We may engage third-party asset managers in international jurisdictions to monitor compliance with legal requirements and lending agreements. Failure to comply with applicable requirements may expose us, our operating subsidiaries, or the entities we manage to additional liabilities. Our operations in the United Kingdom, the European Economic Area, and other countries are subject to significant compliance, disclosure, and other obligations.
In addition, the lack of publicly available information in certain jurisdictions could impair our ability to analyze transactions and may cause us to forego an investment opportunity. It may also impair our ability to receive timely and accurate financial information from tenants necessary to meet reporting obligations to financial institutions or governmental and regulatory agencies. Certain of these risks may be greater in less developed countries. Further, our expertise to date is primarily in the United States and certain countries in Europe. We have less experience in other international markets and may not be as familiar with the potential risks to investments in these areas, which could cause us and the entities we manage to incur losses.
We are also subject to potential fluctuations in exchange rates between foreign currencies and the U.S. dollar because we translate revenue denominated in foreign currency into U.S. dollars for our financial statements (our principal exposure is to the euro). Our results of foreign operations are adversely affected by a stronger U.S. dollar relative to foreign currencies (i.e., absent other considerations, a stronger U.S. dollar will reduce both our revenues and our expenses).
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A significant amount of our leases will expire within the next five years and we may have difficulty re-leasing or selling our properties if tenants do not renew their leases.
Within the next five years, approximately 24%26% of our leases, based on our ABR as of December 31, 2019,2022, are due to expire. If these leases are not renewed or if the properties cannot be re-leased on terms that yield comparable payments, our lease revenues could be substantially adversely affected. In addition, when attempting to re-lease such properties, we may incur significant costs and the terms of any new or renewed leases will depend on prevailing market conditions at that time. We may also seek to sell such properties and incur losses due to prevailing market conditions. Some of our properties are designed for the particular needs of a tenant; thus, we may be required to renovate or make rent concessions in order to lease the property to another tenant. If we need to sell such properties, we may have difficulty selling it to a third party due to the property’s unique design. Real estate investments are generally less liquid than many other financial assets, which may limit our ability to quickly adjust our portfolio in response to changes in economic or other conditions. These and other limitations may adversely affect returns to our stockholders.
Certain of our leases permit tenants to purchase a property at a predetermined price, which could limit our realization of any appreciation or result in a loss.
Under our existing leases, certain tenants have a right to repurchase the properties they lease from us. The purchase price may be a fixed price or it may be based on a formula or the market value at the time of exercise. If a tenant exercises its right to purchase the property and the property’s market value has increased beyond that price, we would not be able to fully realize the appreciation on that property. Additionally, if the price at which the tenant can purchase the property is less than our carrying value (e.g., where the purchase price is based on an appraised value), we may incur a loss. In addition, we may also be unable to reinvest proceeds from these dispositions in investments with similar or better investment returns.
Our ability to control the management of our net-leased properties is limited, which limits our ability to re-leasemanage property deterioration risks and could impact our ESG ratings and our ability to make ESG disclosures.
The tenants or managers of net-leased properties are responsible for maintenance and other day-to-day management of the properties. If a property is not adequately maintained in accordance with the terms of the applicable lease, we may incur expenses for deferred maintenance expenditures or other liabilities once the property becomes free of the lease. While our leases generally provide for recourse against the tenant in these instances, a bankrupt or financially troubled tenant may be more likely to defer maintenance and it may be more difficult to enforce remedies against such a tenant. Although we endeavor to monitor compliance by tenants with their lease obligations and other factors that could affect the financial performance of our properties on an ongoing basis, we may not always be able to ascertain or forestall deterioration in the condition of a property or the financial circumstances of a tenant.
This lack of control over our net-leased properties also makes it difficult for us to collect property-level environmental metrics and to enforce sustainability initiatives, which may impact our ability to comply with certain ESG disclosure requirements (such as the SEC’s expected new ESG disclosure rules) or engage effectively with established ESG frameworks and standards, such as the Global Real Estate Sustainability Benchmarks, the Task Force for Climate-Related Financial Disclosures and the Sustainability Accounting Standards Board. If we are unable to successfully collect the data necessary to comply with ESG disclosure requirements, we may be subject to increased regulatory risk; and if such data is incomplete or unfavorable, our relationship with our investor base, our stock price, and our access to capital may be negatively impacted.
The value of our real estate is subject to fluctuation.
We are subject to all of the general risks associated with the ownership of real estate, which include:
•adverse changes in general or local economic conditions, including changes in interest rates or foreign exchange rates;
•changes in the supply of, or demand for, similar or competing properties;
•competition for tenants and changes in market rental rates;
•the ongoing need for capital improvements;
•Federal Reserve short term rate decisions;
•the mortgage market and real estate market in the United States;
•inability to lease or sell properties without adversely affecting returnsupon termination of existing leases, or renewal of leases at lower rental rates;
•inability to stockholders.collect rents from tenants due to financial hardship, including bankruptcy;
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•uninsured property liability, property damage, or casualty losses;
•increased operating costs, which may not necessarily be as familiar with the potential risksoffset by increased rents, including insurance premiums, utilities and real estate taxes, due to investments in these areas, which could cause usinflation and other factors;
•exposure to environmental losses and the entitieseffects of climate change; and
•civil unrest, acts of war, terrorism, acts of God, including earthquakes, hurricanes and other natural disasters (which may result in uninsured losses) and other factors beyond our control.
While the revenues from our leases are not directly dependent upon the value of the real estate owned, significant declines in real estate values could adversely affect us in many ways, including a decline in the residual values of properties at lease expiration, possible lease abandonment by tenants, and a decline in the attractiveness of triple-net lease transactions to potential sellers. We also face the risk that lease revenue will be insufficient to cover all corporate operating expenses and the debt service payments we manageincur.
Because most of our properties are occupied by a single tenant, our success is materially dependent upon the tenant’s financial stability.
Most of our properties are occupied by a single tenant; therefore, the success of our investments is materially dependent on the financial stability of these tenants. Revenues from several of our tenants/guarantors constitute a significant percentage of our lease revenues. Our top ten tenants accounted for approximately 18% of total ABR at December 31, 2022. Lease payment defaults by tenants could negatively impact our net income and reduce the amounts available for distribution to incur losses.stockholders.
The bankruptcy or insolvency of tenants may cause a reduction in our revenue and an increase in our expenses.
We have had, and may engage third-party asset managers in international jurisdictionsthe future have, tenants file for bankruptcy protection. Bankruptcy or insolvency of a tenant could lead to monitor compliance with legal requirementsthe loss of lease or interest and principal payments, an increase in the carrying cost of the property, and litigation. If one or a series of bankruptcies or insolvencies is significant enough (more likely during a period of economic downturn), it could lead to a reduction in the value of our shares and/or a decrease in our dividend. Under U.S. bankruptcy law, a tenant that is the subject of bankruptcy proceedings has the option of assuming or rejecting any unexpired lease. If the tenant rejects the lease, any resulting claim we have for breach of the lease (excluding collateral securing the claim) will be treated as a general unsecured claim and the maximum claim will be capped. In addition, due to the long-term nature of our leases and, in some cases, terms providing for the repurchase of a property by the tenant, a bankruptcy court could recharacterize a net lease transaction as a secured lending agreements. Failuretransaction. Insolvency laws outside the United States may be more or less favorable to comply with applicable requirements may expose us, our operating subsidiaries,reorganization or the entities we manage to additional liabilities. Our operationsprotection of a debtor’s rights as in the United Kingdom,States. In circumstances where the European Economic Area, and other countries are subject to significant compliance, disclosure, and other obligations. The European Union’s Alternative Investment Fund Managers Directive (“AIFMD”), as transposed into national law within the statesbankruptcy laws of the European Economic Area, establishedUnited States are considered to be more favorable to debtors and/or their reorganization, entities that are not ordinarily perceived as U.S. entities may seek to take advantage of U.S. bankruptcy laws.
The continued disruption and reduced economic activity caused by COVID-19, rising interest rates, inflation and a new regulatory regime for alternative investment fund managers, including private equitypotential economic downturn may severely affect our tenants’ businesses, financial condition and hedge fund managers. Although AIFMD generally appliesliquidity, leading to managersan increase in tenant bankruptcy or insolvency. In addition, a portion of our tenants may fail to meet their obligations to us in full (or at all), or may otherwise seek modifications of such obligations. Certain jurisdictions may also enact laws or regulations that impact or alter our ability to collect rent under our existing least terms. The ultimate extent to which COVID-19 will continue to impact the operations of our tenants will depend on future developments, which remain uncertain and cannot be predicted with a registered office in the European Economic Area managing one or more alternative investments funds, if a regulator in Europe determines that we are an alternative investment fund manager, and therefore subject to the AIFMD, compliance with the requirements of AIFMD may impose additional compliance burdens and expense on us and could reduce our operating flexibility.confidence.
We are also subject to potential fluctuations in exchange rates between foreign currencies and the U.S. dollar because we translate revenue denominated in foreign currency into U.S. dollars for our financial statements (our principal exposure is to the euro). Our results of foreign operations aremay be materially adversely affected by laws, regulations or other issues related to climate change.
If we become subject to laws or regulations related to climate change, our business, financial condition and results of operations could be materially adversely affected. The federal government has enacted certain climate change laws and regulations which may, among other things, regulate “carbon footprints” and greenhouse gas emissions. In addition, the SEC has recently proposed rule amendments that would require us to prepare a stronger U.S. dollar relativewide range of new climate-related disclosures, including with respect to foreign currencies (i.e., absentour climate-related risks, greenhouse gas emissions, and other considerations, a stronger U.S. dollarclimate-related targets, goals and plans. Such laws and regulations could result in substantial compliance costs, retrofit costs and construction costs, including monitoring and reporting costs and capital expenditures for environmental control facilities and other new equipment. Noncompliance with these laws or regulations may result in potential cost increases, litigation, fines, penalties, brand or reputational damage, loss of tenants, lower
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valuation and higher investor activism activities. We cannot predict how future laws and regulations, or future interpretations of current laws and regulations related to climate change will reduce bothaffect our revenuesbusiness, financial condition and results of operations.
Additionally, the potential physical impacts of climate change on our expenses).
Because we are subject to possible liabilities relating to environmental matters, we could incur unexpected costs and our ability to sell or otherwise dispose of a property may be negatively impacted.
We have invested, and may in the future invest, in real properties historically or currently used for industrial, manufacturing, and other commercial purposes, and some of our tenants may handle hazardous or toxic substances, generate hazardous wastes, or discharge regulated pollutants to the environment. Buildings and structures on the properties we purchase may have known or suspected asbestos-containing building materials. We may invest in properties located in countries that have adopted laws or observe environmental management standards that are less stringent than those generally followed in the United States, which may pose a greater risk that releases of hazardous or toxic substances have occurred. We therefore may own properties that have known or potential environmental contamination as a result of historical or ongoing operations, which may expose us to liabilities under environmental laws. Some of these laws could impose the following on us:
•responsibility and liability for the cost of investigation and removal or remediation (including at appropriate disposal facilities) of hazardous or toxic substances in, on, or migrating from our property, generally without regard to our knowledge of, or responsibility for, the presence of these contaminants;
•liability for claims by third parties based on damages to natural resources or property, personal injuries, or costs of removal or remediation of hazardous or toxic substances in, on, or migrating from our property; and
•responsibility for managing asbestos-containing building materials and third-party claims for exposure to those materials.
Costs relating to investigation, remediation, or removal of hazardous or toxic substances, or for third-party claims for damages, may be substantial and could exceed any amounts estimated and recorded within our consolidated financial statements. The anticipated replacementpresence of LIBOR with an alternative reference rate,hazardous or toxic substances at any of our properties, or the failure to properly remediate a contaminated property, could (i) give rise to a lien in favor of the government for costs it may incur to address the contamination or (ii) otherwise adversely affect our interest expense.
Risks Related to Our Liquidity and exceeds its fair value; (ii) for direct financing leases, whenever losses related to the collectability of receivables are both probable and reasonably estimable or there has been a permanent decline in the current estimate of the residual value of the property; and (iii) for equity investments, whenever the estimated fair value of the investment’s underlying net assets in comparison with the carrying value of our interest in the investment has declined on an other-than-temporary basis. By their nature, the timing or extent of impairment charges are not predictable.Capital Resources
Our level of indebtedness could have significant adverse consequences and our cash flow may be insufficient to meet our debt service obligations.
Our consolidated indebtedness as of December 31, 20192022 was approximately $6.1$7.9 billion, representing a consolidated debt to gross assets ratio of approximately 40.3%39.8%. This consolidated indebtedness was comprised of (i) $4.4$5.9 billion in Senior Unsecured Notes (as defined in Note 11), (ii) $1.5 billion in non-recourse mortgage loans on various properties, and (iii) $201.3$828.9 million outstanding under our Senior Unsecured Credit Facility (as defined in Note 11)., and (iii) $1.1 billion in non-recourse mortgage loans on various properties. Our level of indebtedness could have significant adverse consequences on our business and operations, including the following:
•it may increase our vulnerability to changes in economic conditions (including increases in interest rates) and limit our flexibility in planning for, or reacting to, changes in our business and/or industry;
•we may be at a disadvantage compared to our competitors with comparatively less indebtedness;
•we may be unable to hedge our debt, or such hedges may fail or expire, leaving us exposed to potentially volatile interest or currency exchange rates;
•any default on our secured indebtedness may lead to foreclosures, creating taxable income that could hinder our ability to meet the REIT distribution requirements imposed by the Internal Revenue Code; and
•we may be unable to refinance our indebtedness or obtain additional financing as needed or on favorable terms.
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Our ability to generate sufficient cash flow determines whether we will be able to (i) meet our existing or potential future debt service obligations; (ii) refinance our existing or potential future indebtedness; and (iii) fund our operations, working capital, acquisitions, capital expenditures, and other important business uses. Our future cash flow is subject to many factors beyond our control and we cannot assure you that our business will generate sufficient cash flow from operations, or that future sources of cash will be available to us on favorable terms, to meet all of our debt service obligations and fund our other important business uses or liquidity needs. As a result, we may be forced to take other actions to meet those obligations, such as selling properties, raising equity, or delaying capital expenditures, any of which may not be feasible or could have a material adverse effect on us. In addition, despite our substantial outstanding indebtedness and the restrictions in the agreements governing our indebtedness, we may incur significantly more indebtedness in the future, which would exacerbate the risks discussed above.
In a similar manner, we will manage the transition from LIBOR for all of our remaining debt and derivative instruments using any language that may be included in their respective agreements and through potential modifications. Risks related to potential changes in LIBOR availability include, but are not limited to, potential changes to financial products and market practices, borrowing rates, fees, interest obligations, and the value of debt and derivative instruments. Transitioning to an alternative reference rate may require negotiations with lenders and other counterparties, which could present challenges if the method of transition is not mutually agreed upon. We have transitioned all non-USD LIBOR base rate exposures phased out at the end of 2021 to their respective alternative reference rates.
Restrictive covenants in our credit agreement and indentures may limit our ability to expand or fully pursue our business strategies.
The credit agreement for our Senior Unsecured Credit Facility and the indentures governing our Senior Unsecured Notes contain financial and operating covenants that, among other things, require us to meet specified financial ratios and may limit our ability to take specific actions, even if we believe them to be in our best interest (e.g., subject to certain exceptions, our ability to consummate a merger, consolidation, or a transfer of all or substantially all of our consolidated assets to another person is restricted). These covenants may restrict our ability to expand or fully pursue our business strategies. Our ability to comply with these and other provisions of our debt agreements may be affected by changes in our operating and financial performance, changes in general business and economic conditions, adverse regulatory developments, or other events beyond our control. The breach of any of these covenants could result in a default under our indebtedness, which could result in the acceleration of the maturity of such indebtedness and potentially other indebtedness. If any of our indebtedness is accelerated prior to maturity, we may not be able to repay such indebtedness or refinance such indebtedness on favorable terms, or at all.
A downgrade in our credit ratings could materially adversely affect our business and financial condition as well as the market price of our Senior Unsecured Notes.
We plan to manage our operations to maintain investment grade status with a capital structure consistent with our current profile,profile. In September 2022 our rating was upgraded by Moody’s to Baa1 and in January 2023 our rating was upgraded by S&P Global Ratings to BBB+, but there can be no assurance that we will be able to maintain our current credit ratings. Our credit ratings could change based upon, among other things, our historical and projected business, financial condition, liquidity, results of operations, and prospects. These ratings are subject to ongoing evaluation by credit rating agencies and we cannot provide any assurance that our ratings will not be changed or withdrawn by a rating agency in the future. If any of the credit rating agencies downgrades or lowers our credit rating, or if any credit rating agency indicates that it has placed our rating on a “watch list” for a possible downgrading or lowering, or otherwise indicates that its outlook for our rating is negative, it could have a material adverse effect on our costs and availability of capital, which could in turn have a material adverse effect on us and on our ability to satisfy our debt service obligations (including those under our Senior Unsecured Credit Facility, our Senior
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Unsecured Notes, or other similar debt securities that we issue) and to pay dividends on our common stock. Furthermore, any such action could negatively impact the market price of our Senior Unsecured Notes.
Some of our properties are encumbered by mortgage debt, which could adversely affect our cash flow.
At December 31, 2019,2022, we had $1.5$1.1 billion of property-level mortgage debt on a non-recourse basis, which limits our exposure on any property to the amount of equity invested in the property. If we are unable to make our mortgage-related debt payments as required, a lender could foreclose on the property or properties securing its debt. Additionally, lenders for our international mortgage loan transactions typically incorporated various covenants and other provisions (including loan to value ratio, debt service coverage ratio, and material adverse changes in the borrower’s or tenant’s business) that can cause a technical loan default. Accordingly, if the real estate value declines or the tenant defaults, the lender would have the right to foreclose on its security. If any of these events were to occur, it could cause us to lose part or all of our investment, which could reduce the value of our portfolio and revenues available for distribution to our stockholders.
Some of our property-level financing may also require us to make a balloon payment at maturity. Our ability to make such balloon payments may depend upon our ability to refinance the obligation or sell the underlying property. When a balloon payment is due, however, we may be unable to refinance the balloon payment on terms as favorable as the original loan, make the payment with existing cash or cash resources, or sell the property at a price sufficient to cover the payment. Our ability to accomplish these goals will be affected by various factors existing at the relevant time, such as the state of national and regional economies, local real estate conditions, available mortgage or interest rates, availability of credit, our equity in the mortgaged properties, our financial condition, the operating history of the mortgaged properties, and tax laws. A refinancing or sale could affect the rate of return to stockholders and the projected disposition timeline of our assets.
Our charter and Maryland law contain provisions that may delay or prevent a change of control transaction.
Our charter, subject to certain exceptions, authorizes our Boardboard of directors (our “Board”) to take such actions as are necessary and desirable to limit any person to beneficial or constructive ownership of 9.8%, in either value or number of shares, whichever is more restrictive, of our aggregate outstanding shares of (i) common and preferred stock (excluding any outstanding shares of our common or preferred stock not treated as outstanding for federal income tax purposes) or (ii) common stock (excluding any of our outstanding shares of common stock not treated as outstanding for federal income tax purposes). Our Board, in its sole discretion, may exempt a person from such ownership limits, provided that they obtain such representations, covenants, and undertakings as appropriate to determine that the exemption would not affect our REIT status. Our Board may also increase or decrease the common stock ownership limit and/or the aggregate stock ownership limit, so long as the change would not result in five or fewer persons beneficially owning more than 49.9% in value of our outstanding stock. The ownership limits and other stock ownership restrictions contained in our charter may delay or prevent a transaction or change of control that might involve a premium price for our common stock or otherwise be in the best interests of our stockholders.
Our Board may modify our authorized shares of stock of any class or series and may create and issue a class or series of common stock or preferred stock without stockholder approval.
Our charter empowers our Board to, without stockholder approval, increase or decrease the aggregate number of shares of our stock or the number of shares of stock of any class or series that we have authority to issue; classify any unissued shares of common stock or preferred stock; reclassify any previously classified, but unissued, shares of common stock or preferred stock into one or more classes or series of stock; and issue such shares of stock so classified or reclassified. Our Board may determine the relative rights, preferences, and privileges of any class or series of common stock or preferred stock issued. As a result, we may issue series or classes of common stock or preferred stock with preferences, dividends, powers, and rights (voting or otherwise) senior to the rights of current holders of our common stock. The issuance of any such classes or series of common stock or preferred stock could also have the effect of delaying or preventing a change of control transaction that might otherwise be in the best interests of our stockholders.
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Certain provisions of Maryland law could inhibit changes in control.
Certain provisions of the Maryland General Corporation Law (“MGCL”) may have the effect of inhibiting a third party from making a proposal to acquire us or impeding a change of control that could provide our stockholders with the opportunity to realize a premium over the then-prevailing market price of our common stock, including:
•“business combination” provisions that, subject to limitations, prohibit certain business combinations between us and an “interested stockholder” (defined generally as any person who beneficially owns 10% or more of the voting power of our outstanding voting stock), or an affiliate thereof, for five years after the most recent date on which the stockholder becomes an interested stockholder, and thereafter imposes special appraisal rights and supermajority voting requirements on these combinations; and
•“control share” provisions that provide that holders of “control shares” of our company (defined as voting shares which, when aggregated with all other shares owned or controlled by the stockholder, entitle the stockholder to exercise one of three increasing ranges of voting power in electing directors) acquired in a “control share acquisition” (defined as the direct or indirect acquisition of ownership or control of issued and outstanding “control shares”) have no voting rights except to the extent approved by our stockholders by the affirmative vote of at least two-thirds of all the votes entitled to be cast on the matter, excluding all interested shares.
The statute permits various exemptions from its provisions, including business combinations that are exempted by a board of directors prior to the time that the “interested stockholder” becomes an interested stockholder. Our Board has, by resolution, exempted any business combination between us and any person who is an existing, or becomes in the future, an “interested stockholder.” Consequently, the five-year prohibition and the supermajority vote requirements will not apply to business combinations between us and any such person. As a result, such person may be able to enter into business combinations with us that may not be in the best interest of our stockholders, without compliance with the supermajority vote requirements and the other provisions of the statute. Additionally, this resolution may be altered, revoked, or repealed in whole or in part at any time and we may opt back into the business combination provisions of the MGCL. If this resolution is revoked or repealed, the statute may discourage others from trying to acquire control of us and increase the difficulty of consummating any offer. In the
case of the control share provisions of the MGCL, we have elected to opt out of these provisions of the MGCL pursuant to a provision in our bylaws.
Additionally, Title 3, Subtitle 8 of the MGCL permits our Board, without stockholder approval and regardless of what is currently provided in our charter or our bylaws, to implement certain governance provisions, some of which we do not currently have. We have opted out of Section 3-803 of the MGCL, which permits a board of directors to be divided into classes pursuant to Title 3, Subtitle 8 of the MGCL. Any amendment or repeal of this resolution must be approved in the same manner as an amendment to our charter. The remaining provisions of Title 3, Subtitle 8 of the MGCL may have the effect of inhibiting a third party from making an acquisition proposal for our company or of delaying, deferring, or preventing a change in control of our company under circumstances that otherwise could provide the holders of our common stock with the opportunity to realize a premium over the then-current market price. Our charter, our bylaws, and Maryland law also contain other provisions that may delay, defer, or prevent a transaction or a change of control that might involve a premium price for our common stock or otherwise be in the best interests of our stockholders.
Risks Related to REIT Structure
While we believe that we are properly organized as a REIT in accordance with applicable law, we cannot guarantee that the Internal Revenue Service will find that we have qualified as a REIT.
We believe that we are organized in conformity with the requirements for qualification as a REIT under the Internal Revenue Code beginning with our 2012 taxable year and that our current and anticipated investments and plan of operation will enable us to meet and continue to meet the requirements for qualification and taxation as a REIT. Investors should be aware, however, that the Internal Revenue Service or any court could take a position different from our own. Given the highly complex nature of the rules governing REITs, the ongoing importance of factual determinations, and the possibility of future changes in our circumstances, no assurance can be given that we will qualify as a REIT for any particular year.
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Furthermore, our qualification and taxation as a REIT will depend on our satisfaction of certain asset, income, organizational, distribution, stockholder ownership, and other requirements on a continuing basis. Our ability to satisfy the quarterly asset tests under applicable Internal Revenue Code provisions and Treasury Regulations will depend on the fair market values of our assets, some of which are not susceptible to a precise determination. Our compliance with the REIT income and quarterly asset requirements also depends upon our ability to successfully manage the composition of our income and assets on an ongoing basis. While we believe that we will satisfy these tests, we cannot guarantee that this will be the case on a continuing basis.
If we fail to remain qualified as a REIT, we would be subject to federal income tax at corporate income tax rates and would not be able to deduct distributions to stockholders when computing our taxable income.
If, in any taxable year, we fail to qualify for taxation as a REIT and are not entitled to relief under the Internal Revenue Code, we will:
•not be allowed a deduction for distributions to stockholders in computing our taxable income;
•be subject to federal and state income tax, including any applicable alternativethe Inflation Reduction Act of 2022 which was signed into law in the United States on August 16, 2022 and will be effective in 2023 (which introduced a 15% corporate minimum tax (for taxable years ending prior to January 1, 2018)on certain corporations and a 1% excise tax on certain stock repurchases by certain corporations, among other changes), on our taxable income at regular corporate rates;rate; and
•be barred from qualifying as a REIT for the four taxable years following the year when we were disqualified.
Any such corporate tax liability could be substantial and would reduce the amount of cash available for distributions to our stockholders, which in turn could have an adverse impact on the value of our common stock. This adverse impact could last for five or more years because, unless we are entitled to relief under certain statutory provisions, we will be taxed as a corporation beginning the year in which the failure occurs and for the following four years.
If we fail to qualify for taxation as a REIT, we may need to borrow funds or liquidate some investments to pay the additional tax liability. Were this to occur, funds available for investment would be reduced. REIT qualification involves the application of highly technical and complex provisions of the Internal Revenue Code to our operations, as well as various factual determinations concerning matters and circumstances not entirely within our control. There are limited judicial or administrative interpretations of these provisions. Although we plan to continue to operate in a manner consistent with the REIT qualification rules, we cannot assure you that we will qualify in a given year or remain so qualified.
If we fail to make required distributions, we may be subject to federal corporate income tax.
We intend to declare regular quarterly distributions, the amount of which will be determined, and is subject to adjustment, by our Board. To continue to qualify and be taxed as a REIT, we will generally be required to distribute at least 90% of our REIT taxable income (determined without regard to the dividends-paid deduction and excluding net capital gain) each year to our stockholders. Generally, we expect to distribute all, or substantially all, of our REIT taxable income. If our cash available for distribution falls short of our estimates, we may be unable to maintain the proposed quarterly distributions that approximate our taxable income and we may fail to qualify for taxation as a REIT. In addition, our cash flows from operations may be insufficient to fund required distributions as a result of differences in timing between the actual receipt of income and the recognition of income for federal income tax purposes or the effect of nondeductible expenditures (e.g., capital expenditures, payments of compensation for which Section 162(m) of the Internal Revenue Code denies a deduction, the creation of reserves, or required debt service or amortization payments). To the extent we satisfy the 90% distribution requirement, but distribute less than 100% of our REIT taxable income, we will be subject to federal corporate income tax on our undistributed taxable income. We will also be subject to a 4.0% nondeductible excise tax if the actual amount that we pay out to our stockholders for a calendar year is less than a minimum amount specified under the Internal Revenue Code. In addition, in order to continue to qualify as a REIT, any C-corporationC corporation earnings and profits to which we succeed must be distributed as of the close of the taxable year in which we accumulate or acquire such C-corporation’sC corporation’s earnings and profits.
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Because certain covenants in our debt instruments may limit our ability to make required REIT distributions, we could be subject to taxation.
Our existing debt instruments include, and our future debt instruments may include, covenants that limit our ability to make required REIT distributions. If the limits set forth in these covenants prevent us from satisfying our REIT distribution requirements, we could fail to qualify for federal income tax purposes as a REIT. If the limits set forth in these covenants do not jeopardize our qualification for taxation as a REIT, but prevent us from distributing 100% of our REIT taxable income, we will be subject to federal corporate income tax, and potentially a nondeductible excise tax, on the retained amounts.
Because we are required to satisfy numerous requirements imposed upon REITs, we may be required to borrow funds, sell assets, or raise equity on terms that are not favorable to us.
In order to meet the REIT distribution requirements and maintain our qualification and taxation as a REIT, we may need to borrow funds, sell assets, or raise equity, even if the then-prevailing market conditions are not favorable for such transactions. If our cash flows are not sufficient to cover our REIT distribution requirements, it could adversely impact our ability to raise short- and long-term debt, sell assets, or offer equity securities in order to fund the distributions required to maintain our qualification and taxation as a REIT. Furthermore, the REIT distribution requirements may increase the financing we need to fund capital expenditures, future growth, and expansion initiatives, which would increase our total leverage.
In addition, if we fail to comply with certain asset ownership tests at the end of any calendar quarter, we must generally correct the failure within 30 days after the end of the calendar quarter or qualify for certain statutory relief provisions to avoid losing our REIT qualification. As a result, we may be required to liquidate otherwise attractive investments. These actions may reduce our income and amounts available for distribution to our stockholders.
Because the REIT rules require us to satisfy certain rules on an ongoing basis, our flexibility or ability to pursue otherwise attractive opportunities may be limited.
To qualify as a REIT for federal income tax purposes, we must continually satisfy tests concerning, among other things, the sources of our income, the nature and diversification of our assets, the amounts we distribute to our stockholders, and the ownership of our common stock. Compliance with these tests will require us to refrain from certain activities and may hinder our ability to make certain attractive investments, including the purchase of non-qualifying assets, the expansion of non-real estate activities, and investments in the businesses to be conducted by our TRSs,taxable REIT subsidiaries (“TRSs”), thereby limiting our opportunities and the flexibility to change our business strategy. Furthermore, acquisition opportunities in domestic and international markets may be adversely affected if we need or require target companies to comply with certain REIT requirements prior to closing on acquisitions.
Because the REIT provisions of the Internal Revenue Code limit our ability to hedge effectively, the cost of our hedging may increase and we may incur tax liabilities.
The REIT provisions of the Internal Revenue Code limit our ability to hedge assets and liabilities that are not incurred to acquire or carry real estate. Generally, income from hedging transactions that have been properly identified for tax purposes (which we enter into to manage interest rate risk with respect to borrowings to acquire or carry real estate assets) and income from certain currency hedging transactions related to our non-U.S. operations, do not constitute “gross income” for purposes of the REIT gross income tests (such a hedging transaction is referred to as a “qualifying hedge”). In addition, if we enter into a qualifying hedge, but dispose of the underlying property (or a portion thereof) or the underlying debt (or a portion thereof) is extinguished, we can enter into a hedge of the original qualifying hedge, and income from the subsequent hedge will also not constitute “gross income” for purposes of the REIT gross income tests. To the extent that we enter into other types of hedging transactions, the income from those transactions is likely to be treated as non-qualifying income for purposes of the REIT gross income tests. As a result of these rules, we may need to limit our use of advantageous hedging techniques or implement those hedges through a TRS. This could increase the cost of our hedging activities because our TRSs could be subject to tax on income or gains resulting from such hedges or expose us to greater interest rate risks than we would otherwise want to bear. In addition, losses in any of our TRSs generally will not provide any tax benefit, except for being carried forward for use against future taxable income in the TRSs.
W. P. Carey 2022 10-K– 16 | |||||
We use TRSs, which may cause us to fail to qualify as a REIT.
To qualify as a REIT for federal income tax purposes, we hold our non-qualifying REIT assets and conduct our non-qualifying REIT income activities in or through one or more TRSs. The net income of our TRSs is not required to be distributed to us and incomeus. Income that is not distributed to us by our domestic TRSs will generally not be subject to the REIT income distribution requirement. However, certain income that is not distributed to us by our foreign TRSs may be deemed distributed to us by operation of certain provisions of the U.S. Tax Code and generally subject to REIT income distribution requirements. In addition, there may be limitations on our ability to accumulate earnings in our TRSs and the accumulation or reinvestment of significant earnings in our TRSs could result in adverse tax treatment. In particular, if the accumulation of cash in our TRSs causes the fair market value of our TRS interests and certain other non-qualifying assets to exceed 20% of the fair market value of our assets, we would lose tax efficiency and could potentially fail to qualify as a REIT.
Because the REIT rules limit our ability to receive distributions from TRSs, our ability to fund distribution payments using cash generated through our TRSs may be limited.
Our ability to receive distributions from our TRSs is limited by the rules we must comply with in order to maintain our REIT status. In particular, at least 75% of our gross income for each taxable year as a REIT must be derived from real estate-related sources, which principally includes gross income from the leasing of our properties. Consequently, no more than 25% of our gross income may consist of dividend income from our TRSs and other non-qualifying income types. Thus, our ability to receive distributions from our TRSs is limited and may impact our ability to fund distributions to our stockholders using cash flows from our TRSs. Specifically, if our TRSs become highly profitable, we might be limited in our ability to receive net income from our TRSs in an amount required to fund distributions to our stockholders commensurate with that profitability.
Transactions with our TRSs could cause us to be subject to a 100% penalty tax on certain income or deductions if those transactions are not conducted on an arm’s-length basis.
The Internal Revenue Code limits the deductibility of interest paid or accrued by a TRS to its parent REIT to assure that the TRS is subject to an appropriate level of corporate taxation. The Internal Revenue Code also imposes a 100% excise tax on certain transactions between a TRS and its parent REIT that are not conducted on an arm’s-length basis. We will monitor the value of investments in our TRSs in order to ensure compliance with TRS ownership limitations and will structure our transactions with our TRSs on terms that we believe are arm’s-length to avoid incurring the 100% excise tax described above. There can be no assurance, however, that we will be able to comply with the TRS ownership limitation or be able to avoid application of the 100% excise tax.
Because distributions payable by REITs generally do not qualify for reduced tax rates, the value of our common stock could be adversely affected.
Certain distributions payable by domestic or qualified foreign corporations to individuals, trusts, and estates in the United States are currently eligible for federal income tax at a maximum rate of 20%. plus the 3.8% Medicare tax on net investment income, if applicable. Distributions payable by REITs, in contrast, are generally not eligible for this reduced rate, unless the distributions are attributable to dividends received by the REIT from other corporations that would otherwise be eligible for the reduced rate. This more favorable tax rate for regular corporate distributions could cause qualified investors to perceive investments in REITs to be less attractive than investments in the stock of corporations that pay distributions, which could adversely affect the value of REIT stocks, including our common stock.
Even if we continue to qualify as a REIT, certain of our business activities will be subject to corporate level income tax and foreign taxes, which will continue to reduce our cash flows, and we will have potential deferred and contingent tax liabilities.
Even if we qualify for taxation as a REIT, we may be subject to certain (i) federal, state, local, and foreign taxes on our income and assets (including alternative minimum taxes for taxable years ending prior to January 1, 2018); (ii) taxes on any undistributed income and state, local, or foreign income; and (iii) franchise, property, and transfer taxes. In addition, we could be required to pay an excise or penalty tax under certain circumstances in order to utilize one or more relief provisions under the Internal Revenue Code to maintain qualification for taxation as a REIT, which could be significant in amount.
W. P. Carey 2022 10-K– 17 | |||||
Any TRS assets and operations would continue to be subject, as applicable, to federal and state corporate income taxes and to foreign taxes in the jurisdictions in which those assets and operations are located. Any of these taxes would decrease our earnings and our cash available for distributions to stockholders.
We will also be subject to a federal corporate level tax at the highest regular corporate rate (currently 21%) on all or a portion of the gain recognized from a sale of assets formerly held by any C corporation that we acquire on a carry-over basis transaction occurring within a five-year period after we acquire such assets, to the extent the built-in gain based on the fair market value of those assets on the effective date of the REIT election is in excess of our then tax basis. The tax on subsequently sold assets will be based on the fair market value and built-in gain of those assets as of the beginning of our holding period. Gains from the sale of an asset occurring after the specified period will not be subject to this corporate level tax. We expect to have only a de minimis amount of assets subject to these corporate tax rules and do not expect to dispose of any significant assets subject to these corporate tax rules.
Because dividends received by foreign stockholders are generally taxable, we may be required to withhold a portion of our distributions to such persons.
Ordinary dividends received by foreign stockholders that are not effectively connected with the conduct of a U.S. trade or business are generally subject to U.S. withholding tax at a rate of 30%, unless reduced by an applicable income tax treaty. Additional rules with respect to certain capital gain distributions will apply to foreign stockholders that own more than 10% of our common stock.
The ability of our Board to revoke our REIT election, without stockholder approval, may cause adverse consequences for our stockholders.
Our organizational documents permit our Board to revoke or otherwise terminate our REIT election, without the approval of our stockholders, if it determines that it is no longer in our best interest to continue to qualify as a REIT. If we cease to be a REIT, we will not be allowed a deduction for dividends paid to stockholders in computing our taxable income and we will be subject to federal income tax at regular corporate ratesrate and state and local taxes, which may have adverse consequences on the total return to our stockholders.
Federal and state income tax laws governing REITs and related interpretations may change at any time, and any such legislative or other actions affecting REITs could have a negative effect on us and our stockholders.
Federal and state income tax laws governing REITs or the administrative interpretations of those laws may be amended at any time. Federal, state, and foreign tax laws are under constant review by persons involved in the legislative process, at the Internal Revenue Service and the U.S. Department of the Treasury, and at various state and foreign tax authorities. Changes to tax laws, regulations, or administrative interpretations, which may be applied retroactively, could adversely affect us or our stockholders. We cannot predict whether, when, in what forms, or with what effective dates, the tax laws, regulations, and administrative interpretations applicable to us or our stockholders may be changed. Accordingly, we cannot assure you that any such change will not significantly affect our ability to qualify for taxation as a REIT or the federal income tax consequences to you or us.
The trading volume and market price of certain capital asset investments (generally excluding real estate assets), subjectour common stock may fluctuate significantly and be adversely impacted in response to a phase-downnumber of factors. Therefore, our current or historical trading volume and share prices are not indicative of the deduction percentage over time;
W. P. Carey | |||||
We may issue debt or equity securities or incur additional borrowings in the future. Future issuances of debt securities would increase our interest costs and rank senior to our shareholders annually.common stock upon our liquidation, and additional issuances of equity securities would dilute the holdings of our existing common stockholders (and any preferred stock may rank senior to our common stock for the purposes of making distributions), both of which may negatively affect the market price of our common stock. However, our future growth will depend, in part, upon our ability to raise additional capital, including through the issuance of debt and equity securities. Because our decision to issue additional debt or equity securities or incur additional borrowings in the future will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing, nature, or success of our future capital raising efforts. Thus, common stockholders bear the risk that our future issuances of debt or equity securities, or our incurrence of additional borrowings, will negatively affect the market price of our common stock.
There can be no assurance that we will be able to maintain cash dividends.
Our ability to continue to pay dividends in the future may be adversely affected by the risk factors described in this Report. More specifically, while we expect to continue our current dividend practices, we can give no assurance that we will be able to maintain dividend levels in the future for various reasons, including the following:
•there is no assurance that rents from our properties will increase or that future acquisitions will increase our cash available for distribution to stockholders, and we may not have enough cash to pay such dividends due to changes in our cash requirements, capital plans, cash flow, or financial position;
•our Board, in its sole discretion, determines the amount and timing of any future dividend payments to our stockholders based on a number of factors, therefore our dividend levels are not guaranteed and may fluctuate; and
•the amount of dividends that our subsidiaries may distribute to us may be subject to restrictions imposed by law or regulators, as well as the terms of any current or future indebtedness that these subsidiaries may incur.
Furthermore, certain agreements relating to our borrowings may, under certain circumstances, prohibit or otherwise restrict our ability to pay dividends to our common stockholders. Future dividends, if any, are expected to be based upon our earnings, financial condition, cash flows and liquidity, debt service requirements, capital expenditure requirements for our properties, financing covenants, and applicable law. If we do not have sufficient cash available to pay dividends, we may need to fund the shortage out of working capital or revenues from future acquisitions, if any, or borrow to provide funds for such dividends, which would reduce the amount of funds available for investment and increase our future interest costs. Our inability to pay dividends, or to pay dividends at expected levels, could adversely impact the market price of our common stock.
Our accounting policies and methods are fundamental to how we record and report our financial position and results of operations, and they require management to make estimates, judgments, and assumptions about matters that are inherently uncertain.
Our accounting policies and methods are fundamental to how we record and report our financial position and results of operations. We have identified several accounting policies as being critical to the presentation of our financial position and results of operations because they require management to make particularly subjective or complex judgments about matters that are inherently uncertain and because of the likelihood that materially different amounts would be recorded under different conditions or using different assumptions. Due to the inherent uncertainty of the estimates, judgments, and assumptions associated with these critical accounting policies, we cannot provide any assurance that we will not make significant subsequent adjustments to our consolidated financial statements. If our judgments, assumptions, and allocations prove to be incorrect, or if circumstances change, our business, financial condition, revenues, operating expense, results of operations, liquidity, ability to pay dividends, or stock price may be materially adversely affected.
W. P. Carey 2022 10-K– 19 | |||||
We may make investments in asset classes or countries outside of our core investment strategy which may be perceived as complicating our strategy relative to our peers.
We may need to expand beyond our current asset class mix to growth our portfolio. As a result, we intend, to the extent that market conditions warrant, to seek to grow our businesses by increasing our investments in existing businesses, pursuing new investment strategies (including investment opportunities in new asset classes), developing new types of investment structures and products, and expanding into new geographic markets and businesses. Introducing new types of investment structures and products could increase the complexities involved in managing such investments, including to ensure compliance with regulatory requirements and terms of the investment. Making investments in assets classes or countries outside of our core investment strategy may also be perceived as complicating our strategy relative to our peers.
Entry into asset classes or countries may subject us to new laws and regulations with which we are not familiar, or from which we are currently exempt, and may lead to increased litigation and regulatory risk and costs.
Failure to hedge effectively against interest rate changes and foreign exchange rate changes may have a material adverse effect on our business, financial condition and results of operations.
The interest rate and foreign exchange rate hedge instruments we may use to U.S. federal tax laws implemented bymanage some of our exposure to interest rate and foreign exchange rate volatility involve risk, such as the Tax Cutsrisk that counterparties may fail to honor their obligations under these arrangements. Failure to hedge effectively against such interest rate and Jobs Act,foreign exchange rate changes may have a material adverse effect on our taxable incomebusiness, financial condition and results of operations.
Our future success depends on the successful recruitment and retention of personnel, including our executives.
Our future success depends in large part on our ability to hire and retain a sufficient number of qualified and diverse personnel. Failure to recruit from a diverse pool of qualified candidates, particularly in light of recent labor shortages could negatively impact the dynamic growth of our company. In addition, the nature of our executive officers’ experience and the amountextent of distributionsthe relationships they have developed with real estate professionals and financial institutions are important to the success of our business. We cannot provide any assurances regarding their continued employment with us. The loss of the services of certain of our executive officers could detrimentally affect our business and prospects, and a sustained labor shortage or increased turnover rates among our employees, could increase costs and materially adversely affect our business.
The occurrence of cyber incidents, or a deficiency in our cyber security, could negatively impact our business by causing a disruption to our stockholders requiredoperations, a compromise or corruption of our confidential information, and/or damage to our business relationships, all of which could negatively impact our financial results.
A cyber incident is considered to be any adverse event that threatens the confidentiality, integrity, or availability of our information resources, which could be an intentional attack or an unintentional accident or error. We use information technology and other computer resources to carry out important operational activities and to maintain our REIT status,business records. With the advent of remote work environments and technologies, we face heightened cybersecurity risks as our employees and counterparties increasingly depend on the internet and face greater exposure to malware and phishing attacks. These heightened cybersecurity risks may increase our vulnerability to cyber-attacks and cause disruptions to our internal control procedures.
In addition, we may store or come into contact with sensitive information and data. If we or our third-party service providers fail to comply with applicable privacy or data security laws in handling this information, including the General Data Protection Regulation and the California Consumer Privacy Act, we could face significant legal and financial exposure to claims of governmental agencies and parties whose privacy is compromised, including sizable fines and penalties.
We have implemented processes, procedures, and controls intended to address ongoing and evolving cyber security risks, but these measures, as well as our relative tax advantage asincreased awareness of a REIT,risk of a cyber incident, do not guarantee that our financial results will not be negatively impacted by such an incident. The primary risks that could change.
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Our business may continue to be adversely affected by the ongoing COVID-19 pandemic.
We are unable to predict the impact of ongoing disruptions caused by additional surges and strains of COVID-19 transmission. The UPREIT structure could leadeconomic downturn and market volatility caused by the ongoing COVID-19 pandemic has already eroded the financial condition of certain of our tenants and operating properties; therefore, we cannot predict the impact that COVID-19 will continue to potential conflictshave on our tenants’ ability to pay rent and any information provided regarding historical rent collections should not serve as an indication of interest.
Item 1B. Unresolved Staff Comments.
None.
Item 2. Properties.
Our principal corporate offices are located at 50 Rockefeller Plaza,One Manhattan West, 395 9th Avenue, 58th Floor, New York, NY 1002010001 and our international offices are located in London and Amsterdam. We have additional office space domestically in Dallas. We lease all of these offices and believe these leases are suitable for our operations for the foreseeable future.
See Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Portfolio Overview — Net-Leased Portfolio for a discussion of the properties we hold for rental operations and Part II, Item 8. Financial Statements and Supplementary Data — Schedule III — Real Estate and Accumulated Depreciation for a detailed listing of such properties.
Item 3. Legal Proceedings.
Various claims and lawsuits arising in the normal course of business are pending against us. The results of these proceedings are not expected to have a material adverse effect on our consolidated financial position or results of operations.
Item 4. Mine Safety Disclosures.
Not applicable.
W. P. Carey | |||||
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
Market Information
Our common stock is listed on the NYSE under the ticker symbol “WPC.” At February 14, 20203, 2023 there were 9,2638,982 registered holders of record of our common stock. This figure does not reflect the beneficial ownership of shares of our common stock.
Stock Price Performance Graph
The graph below provides an indicator of cumulative total stockholder returns for our common stock for the period December 31, 20142017 to December 31, 2019,2022, as compared with the S&P 500 Index, and the FTSE NAREIT Equity REITs Index.Index, and the MSCI US REIT Index, which we have added to the graph below since it serves as a benchmark index for our compensation decisions. We intend to discontinue presentation of the FTSE NAREIT Equity REITs Index in future stock price performance graphs, as the MSCI US REIT Index will serve as our industry index. The graph assumes a $100 investment on December 31, 2014,2017, together with the reinvestment of all dividends.
| At December 31, | At December 31, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | |||||||||||||||||||||||||||||||||||||||||||||||
| W. P. Carey Inc. | $ | 100.00 | $ | 89.60 | $ | 95.46 | $ | 118.20 | $ | 119.38 | $ | 153.77 | W. P. Carey Inc. | $ | 100.00 | $ | 101.08 | $ | 130.23 | $ | 122.44 | $ | 150.45 | $ | 151.16 | |||||||||||||||||||||||||||||||||
| S&P 500 Index | 100.00 | 101.38 | 113.51 | 138.29 | 132.23 | 173.86 | S&P 500 Index | 100.00 | 95.62 | 125.72 | 148.85 | 191.58 | 156.88 | |||||||||||||||||||||||||||||||||||||||||||||
| FTSE NAREIT Equity REITs Index | 100.00 | 103.20 | 111.99 | 117.84 | 112.39 | 141.61 | FTSE NAREIT Equity REITs Index | 100.00 | 95.38 | 120.17 | 110.56 | 158.36 | 119.77 | |||||||||||||||||||||||||||||||||||||||||||||
| MSCI US REIT Index | MSCI US REIT Index | 100.00 | 95.43 | 120.09 | 110.99 | 158.79 | 119.87 | |||||||||||||||||||||||||||||||||||||||||||||||||||
The stock price performance included in this graph is not indicative of future stock price performance.
Dividends
We currently intend to continue paying cash dividends consistent with our historical practice; however, our Board determines the amount and timing of any future dividend payments to our stockholders based on a variety of factors.
W. P. Carey 2022 10-K– 22 | |||||
Securities Authorized for Issuance Under Equity Compensation Plans
This information will be contained in our definitive proxy statement for the 20202023 Annual Meeting of Stockholders, to be filed within 120 days following the end of our fiscal year, and is incorporated herein by reference.
Item 6. Selected Financial Data.
Reserved
| Years Ended December 31, | |||||||||||||||||||
| 2019 | 2018 | 2017 | 2016 | 2015 | |||||||||||||||
| Operating Data | |||||||||||||||||||
Revenues (a) | $ | 1,232,766 | $ | 885,732 | $ | 848,302 | $ | 941,533 | $ | 938,383 | |||||||||
Net income (a) (b) (c) (d) | 306,544 | 424,341 | 285,083 | 274,807 | 185,227 | ||||||||||||||
Net income attributable to noncontrolling interests (a) | (1,301 | ) | (12,775 | ) | (7,794 | ) | (7,060 | ) | (12,969 | ) | |||||||||
Net income attributable to W. P. Carey (a) (b) (c) (d) | 305,243 | 411,566 | 277,289 | 267,747 | 172,258 | ||||||||||||||
| Basic earnings per share | 1.78 | 3.50 | 2.56 | 2.50 | 1.62 | ||||||||||||||
| Diluted earnings per share | 1.78 | 3.49 | 2.56 | 2.49 | 1.61 | ||||||||||||||
| Cash dividends declared per share | 4.1400 | 4.0900 | 4.0100 | 3.9292 | 3.8261 | ||||||||||||||
| Balance Sheet Data | |||||||||||||||||||
| Total assets | $ | 14,060,918 | $ | 14,183,039 | $ | 8,231,402 | $ | 8,453,954 | $ | 8,742,089 | |||||||||
| Net investments in real estate | 11,916,745 | 11,928,854 | 6,703,715 | 6,781,900 | 7,229,873 | ||||||||||||||
| Senior Unsecured Notes, net | 4,390,189 | 3,554,470 | 2,474,661 | 1,807,200 | 1,476,084 | ||||||||||||||
| Senior credit facilities | 201,267 | 91,563 | 605,129 | 926,693 | 734,704 | ||||||||||||||
| Non-recourse mortgages, net | 1,462,487 | 2,732,658 | 1,185,477 | 1,706,921 | 2,269,421 | ||||||||||||||
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to assist in understanding our financial statements and the reasons for changes in certain key components of our financial statements from period to period. This item also provides our perspective on our financial position and liquidity, as well as certain other factors that may affect our future results. The discussion also breaks down the financial results of our business by segment to provide a better understanding of how these segments and their results affect our financial condition and results of operations.
The following discussion should be read in conjunction with our consolidated financial statements in Item 8 of this Report and the matters described under Item 1A. Risk Factors. Please see our Annual Report on Form 10-K for the year ended December 31, 20182021 for discussion of our financial condition and results of operations for the year ended December 31, 2017.2020. Refer to Item 1. Business for a description of our business.
Significant Developments
On October 22, 2019, CWI 1 and CWI 2December 12, 2022, we announced that they had entered into a definitive merger agreement under which the two companies intendMs. Elisabeth Stheeman, age 58, was appointed to merge in an all-stock transaction, with CWI 2 as the surviving entity. On January 13, 2020, the joint proxy statement/prospectus on Form S-4 previously filed with the SEC by CWI 1 and CWI 2 was declared effective. Each of CWI 1 and CWI 2 has scheduled a special meeting of stockholders for March 26, 2020; if the proposed transaction is approved, the merger is expected to close shortly thereafter. In connection with the CWI 1 and CWI 2 Proposed Merger, we have entered into an internalization agreement and transition services agreement. Immediately following the closing of the CWI 1 and CWI 2 Proposed Merger:
our Board. Please see our Current Report on Form 8-K dated October 22, 2019filed on December 12, 2022 for additional information.
Financial Highlights
During the year ended December 31, 2019,2022, we completed the following (as further described in the consolidated financial statements):
Real Estate
• |
We restructuredacquired full or partial ownership interests in 42 properties in the leasesCPA:18 Merger (including seven properties in which we already owned a partial ownership interest), substantially all of which were triple-net leased with a tenant on a portfolioweighted-average lease term of grocery store7.0 years, an occupancy rate of 99.3%, and warehouse properties in Croatia. For 19 properties, we reached agreements on new rents, reducing contractual rents, but increasing total contractual minimum annualized base rent (“ABR”) from $10.2 million to $15.4an estimated ABR totaling $81.0 million. We extendedalso acquired 65 self-storage operating properties and two student housing operating properties totaling 5.1 million square feet. The related property-level debt was comprised of non-recourse mortgage loans with an aggregate consolidated fair value of approximately $900.2 million with a weighted-average annual interest rate of 5.1% as of August 1, 2022.
•We issued the lease terms on these properties by a weighted averagefollowing to CPA:18 – Global stockholders as part of three years. We also agreed to a payment plan to collectthe merger consideration: (i) 13,786,302 shares of our common stock of approximately 50%$1.2 billion, (ii) $3.00 per share of unpaid back rents plus value-added tax, which is beingcash consideration totaling approximately $423.3 million, and (iii) cash of $0.1 million paid in ten monthly installmentslieu of €1.0issuing any fractional shares of our common stock.
•Lease revenues and operating property revenues from properties acquired in the CPA:18 Merger were $42.7 million each (equivalentand $39.2 million, respectively, for the year ended December 31, 2022.
•We recognized a Gain on change in control of interests of $33.9 million in connection with the CPA:18 Merger during the year ended December 31, 2022, of which $11.4 million was attributable to approximately $1.1 million)our Real Estate segment and started in July 2019. During the third and fourth quarters of 2019, such payments totaled approximately $6.6$22.5 million which was included within Lease termination income and other onattributable to our consolidated statements of income.Investment Management segment.
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Investments
•We funded approximately $89.5 million for a construction loan to build a retail complex in Las Vegas, Nevada, during the year ended December 31, 2022. Through December 31, 2022, we have funded $193.2 million (Note 8).
•We committed to fund six build-to-suit or redevelopment projects totaling $20.3 million. We currently expect to complete the projects in 2023 (Note 5).
Dispositions
•We disposed of 23 properties for total proceeds, net of selling costs, of $234.7 million (Note 16).
•In January 2022, WLT redeemed in full our 1,300,000 shares of its preferred stock for gross proceeds of $65.0 million (Note 9).
•In October 2022, we received $82.6 million in cash proceeds as a result of certain private real estate funds’ acquisition of all outstanding shares of WLT common stock. As of the date of acquisition, we owned 12,208,243 shares of WLT common stock. Upon completion of this transaction, we have no remaining interest in WLT (Note 9).
Financing and Capital Markets Transactions
•We issued 2,740,295 shares of our common stock under our prior ATM Program at a weighted-average price of $80.79 per share, for net proceeds of $218.1 million (Note 13).
•We settled our remaining Equity Forwards by delivering 3,925,000 shares of common stock for net proceeds of $284.3 million (Note 13).
•As of December 31, 2019,2022, we managed total assetshad approximately $530.0 million of approximately $7.5 billionavailable proceeds under our ATM Forwards (Note 13).
•On September 28, 2022, we completed a private placement of (i) €150 million of 3.41% Senior Notes due 2029, which have a seven-year term and are scheduled to mature on behalfSeptember 28, 2029, and (ii) €200 million of the Managed Programs. 3.70% Senior Notes due 2032, which have a ten-year term and are scheduled to mature on September 28, 2032 (Note 11).
Investment Management
•Upon completion of the CPA:1718 Merger (Note 3), we ceased earning advisory fees and other income previously earned when we served as advisor to CPA:1718 – Global. During 2018,the year ended December 31, 2022, through the date of the CPA:1718 Merger, such fees and other income from CPA:1718 – Global totaled $58.8$17.9 million. We expect to receive lower structuringInvestment Management fees and other advisory revenue from the Managed Programsincome are expected to be minimal going forward since they are fully invested and we no longer raise capital for new or existing funds.forward.
Dividends to Stockholders
We declared cash dividends totaling $4.140$4.242 per share, comprised of four quarterly dividends per share of $1.032, $1.034, $1.036,$1.057, $1.059, $1.061, and $1.038.$1.065.
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Consolidated Results
(in thousands, except shares)
| Years Ended December 31, | Years Ended December 31, | |||||||||||||||||||||
| 2019 | 2018 | 2017 | 2022 | 2021 | ||||||||||||||||||
| Revenues from Real Estate | $ | 1,172,863 | $ | 779,125 | $ | 687,208 | Revenues from Real Estate | $ | 1,468,101 | $ | 1,312,126 | |||||||||||
| Revenues from Investment Management | 59,903 | 106,607 | 161,094 | Revenues from Investment Management | 10,985 | 19,398 | ||||||||||||||||
| Total revenues | 1,232,766 | 885,732 | 848,302 | Total revenues | 1,479,086 | 1,331,524 | ||||||||||||||||
| Net income from Real Estate attributable to W. P. Carey | 272,065 | 307,236 | 192,139 | Net income from Real Estate attributable to W. P. Carey | 591,603 | 384,766 | ||||||||||||||||
| Net income from Investment Management attributable to W. P. Carey | 33,178 | 104,330 | 85,150 | Net income from Investment Management attributable to W. P. Carey | 7,536 | 25,222 | ||||||||||||||||
| Net income attributable to W. P. Carey | 305,243 | 411,566 | 277,289 | Net income attributable to W. P. Carey | 599,139 | 409,988 | ||||||||||||||||
| Dividends declared | 713,588 | 502,819 | 433,834 | Dividends declared | 859,655 | 781,626 | ||||||||||||||||
| Net cash provided by operating activities | 812,077 | 509,166 | 520,659 | Net cash provided by operating activities | 1,003,556 | 926,479 | ||||||||||||||||
| Net cash (used in) provided by investing activities | (522,773 | ) | (266,132 | ) | 214,238 | |||||||||||||||||
| Net cash used in financing activities | (457,778 | ) | (24,292 | ) | (745,466 | ) | ||||||||||||||||
| Net cash used in investing activities | Net cash used in investing activities | (1,052,531) | (1,566,727) | |||||||||||||||||||
| Net cash provided by financing activities | Net cash provided by financing activities | 57,887 | 557,048 | |||||||||||||||||||
Supplemental financial measures (a): | Supplemental financial measures (a): | |||||||||||||||||||||
| Adjusted funds from operations attributable to W. P. Carey (AFFO) — Real Estate | 811,193 | 516,502 | 456,865 | Adjusted funds from operations attributable to W. P. Carey (AFFO) — Real Estate | 1,042,782 | 896,139 | ||||||||||||||||
| Adjusted funds from operations attributable to W. P. Carey (AFFO) — Investment Management | 45,277 | 118,084 | 116,114 | Adjusted funds from operations attributable to W. P. Carey (AFFO) — Investment Management | 17,816 | 25,352 | ||||||||||||||||
| Adjusted funds from operations attributable to W. P. Carey (AFFO) | 856,470 | 634,586 | 572,979 | Adjusted funds from operations attributable to W. P. Carey (AFFO) | 1,060,598 | 921,491 | ||||||||||||||||
Diluted weighted-average shares outstanding (b) | 171,299,414 | 117,706,445 | 108,035,971 | |||||||||||||||||||
| Diluted weighted-average shares outstanding | Diluted weighted-average shares outstanding | 200,427,124 | 183,127,098 | |||||||||||||||||||
__________
(a)We consider Adjusted funds from operations (“AFFO”), a supplemental measure that is not defined by U.S. generally accepted accounting principles (“GAAP”) |
Revenues
Real Estate revenue increased in 2022 as compared to 2021, primarily due to higher lease revenues (substantially as a result of property acquisition activity and rent escalations, as well as the net-leased properties we acquired in the CPA:18 Merger on August 1, 2022 (Note 3), partially offset by the impact of the weakening euro and British pound sterling) and higher operating property revenues (primarily from the operating properties we acquired in the CPA:18 Merger on August 1, 2022 (Note 3)), partially offset by lower other lease-related income (Note 5).
Net Income Attributable to W. P. Carey
Net income attributable to W. P. Carey decreasedincreased in 20192022 as compared to 2018,2021. Net income from Real Estate attributable to W. P. Carey increased primarily due to decreases withina lower loss on extinguishment of debt (Note 11), non-cash unrealized gains recognized on our investment in common shares of WLT (Note 9), and the impact of real estate acquisitions, partially offset by higher interest expense and the impact of the weakening euro and British pound sterling. In addition, we recognized non-cash unrealized gains on our investment in shares of Lineage Logistics during both our Investment Managementthe current and Real Estate segments.prior year (Note 9). Net income from Investment Management attributable to W. P. Carey decreased primarily due to the cessation of revenues and distributions previously earned from CPA:17 – Globalan impairment charge recognized on goodwill within our Investment Management segment (Note 3) and a gain on change in control of interests recognized during 2018 in connection with the CPA:17 Merger (Note 3), partially offset by tax benefits recognized during 2019. Net income from Real Estate attributable to W. P. Carey decreased primarily due to a lower gain on sale of real estate recognized during 2019 as compared to 2018 (Note 17), as well as higher impairment charges (Note 9) and loss on extinguishment of debt (Note 11). We alsoIn addition, we recognized a loss on change in control of interests during 2019 in
W. P. Carey 2022 10-K– 25 | |||||
AFFO
AFFO increased in 2022 as compared to 2021, primarily due to investment activity and rent escalations, higher other lease-related income (on an AFFO basis), and the accretive impact of the CPA:18 Merger (Note 3), partially offset by the impact of real estate acquisitionsthe weakening euro and properties acquired in the CPA:17 Merger (Note 3), which we owned for a full year in 2019 as compared to two months in 2018. The increase in revenues from such properties was partially offset by corresponding increases in depreciationBritish pound sterling and amortization, interest expense, and property expenses. We also recognized significant merger expenses in 2018 related to the CPA:17 Merger (Note 3) and unrealized gains on our investment in shares of a cold storage operator during 2019 (Note 9), and received proceeds from a bankruptcy claim on a prior tenant during 2019 (Note 5).
Portfolio Overview
Our portfolio is comprised of operationally-critical, commercial real estate assets net leased to tenants located primarily in the United States and Northern and Western Europe. We invest in high-quality single tenant industrial, warehouse, office, retail, and self-storage (net lease) properties subject to long-term leases with built-in rent escalators. Portfolio information is provided on a pro rata basis, unless otherwise noted below, to better illustrate the economic impact of our various net-leased jointly owned investments. See Terms and Definitions below for a description of pro rata amounts.
Portfolio Summary
| As of December 31, | |||||||||||
| Net-leased Properties | 2022 | 2021 | |||||||||
| ABR (in thousands) | $ | 1,381,899 | $ | 1,247,764 | |||||||
Number of net-leased properties (a) | 1,449 | 1,304 | |||||||||
| Number of tenants | 392 | 352 | |||||||||
| Total square footage (in thousands) | 175,957 | 155,674 | |||||||||
| Occupancy | 98.8 | % | 98.5 | % | |||||||
| Weighted-average lease term (in years) | 10.8 | 10.8 | |||||||||
| Operating Properties | |||||||||||
Number of operating properties: (b) | 87 | 20 | |||||||||
| Number of self-storage operating properties | 84 | 19 | |||||||||
| Number of student housing operating properties | 2 | — | |||||||||
| Number of hotel operating properties | 1 | 1 | |||||||||
| Occupancy (self-storage operating properties) | 91.0 | % | 95.3 | % | |||||||
Number of countries (c) | 26 | 24 | |||||||||
| Total assets (in thousands) | $ | 18,102,035 | $ | 15,480,630 | |||||||
| Net investments in real estate (in thousands) | 15,488,898 | 13,037,369 | |||||||||
| As of December 31, | |||||||||||
| 2019 | 2018 | 2017 | |||||||||
Number of net-leased properties (a) | 1,214 | 1,163 | 887 | ||||||||
Number of operating properties (b) | 21 | 48 | 2 | ||||||||
| Number of tenants (net-leased properties) | 345 | 304 | 210 | ||||||||
Total square footage (net-leased properties, in thousands) (c) | 139,982 | 130,956 | 84,899 | ||||||||
| Occupancy (net-leased properties) | 98.8 | % | 98.3 | % | 99.8 | % | |||||
| Weighted-average lease term (net-leased properties, in years) | 10.7 | 10.2 | 9.6 | ||||||||
Number of countries (d) | 25 | 25 | 17 | ||||||||
| Total assets (in thousands) | $ | 14,060,918 | $ | 14,183,039 | $ | 8,231,402 | |||||
| Net investments in real estate (in thousands) | 11,916,745 | 11,928,854 | 6,703,715 | ||||||||
| Years Ended December 31, | |||||||||||
| 2022 | 2021 | ||||||||||
Acquisition volume (in millions) (d) | $ | 1,265.5 | $ | 1,627.9 | |||||||
| Construction projects completed (in millions) | 148.1 | 88.2 | |||||||||
| Average U.S. dollar/euro exchange rate | 1.0540 | 1.1830 | |||||||||
| Average U.S. dollar/British pound sterling exchange rate | 1.2373 | 1.3755 | |||||||||
__________
(a)We acquired 35 net-leased properties (in which we did not already have an ownership interest) in the CPA:18 Merger in August 2022 (Note 3).
(b)We acquired 65 self-storage properties, one student housing property, and one student housing development project in the CPA:18 Merger in August 2022 (Note 3).
(c)We acquired investments in Belgium during the year ended December 31, 2022. We acquired an investment in Mauritius in connection with the CPA:18 Merger in August 2022 (Note 3).
(d)Amount for the year ended December 31, 2022 excludes properties acquired in the CPA:18 Merger (Note 3). Amounts for the years ended December 31, 2022 and 2021 include $19.8 million and $217.0 million, respectively, of sale-leasebacks classified as loans receivable (Note 6). Amounts for the years ended December 31, 2022 and 2021 include $89.5 million and $103.7 million, respectively, of funding for a construction loan (Note 8).
W. P. Carey | |||||
| Years Ended December 31, | |||||||||||
| 2019 | 2018 | 2017 | |||||||||
Acquisition volume (in millions) (e) | $ | 737.5 | $ | 824.8 | $ | 31.8 | |||||
Construction projects completed (in millions) (f) | 122.5 | 102.5 | 65.4 | ||||||||
| Average U.S. dollar/euro exchange rate | 1.1196 | 1.1813 | 1.1292 | ||||||||
| Average U.S. dollar/British pound sterling exchange rate | 1.2767 | 1.3356 | 1.2882 | ||||||||
Change in the U.S. CPI (g) | 2.3 | % | 1.9 | % | 2.1 | % | |||||
Change in the Germany CPI (g) | 1.5 | % | 1.7 | % | 1.7 | % | |||||
Change in the Poland CPI (g) | 3.2 | % | 1.2 | % | 2.2 | % | |||||
Change in the Netherlands CPI (g) | 2.7 | % | 2.0 | % | 1.3 | % | |||||
Change in the Spain CPI (g) | 0.8 | % | 1.2 | % | 1.1 | % | |||||
Net-Leased Portfolio
The tables below represent information about our net-leased portfolio at December 31, 20192022 on a pro rata basis and, accordingly, exclude all operating properties. See Terms and Definitions below for a description of pro rata amounts and ABR.
Top Ten Tenants by ABR
(dollars in thousands)
| Tenant/Lease Guarantor | Description | Number of Properties | ABR | ABR Percent | Weighted-Average Lease Term (Years) | Tenant/Lease Guarantor | Description | Number of Properties | ABR | ABR Percent | Weighted-Average Lease Term (Years) | ||||||||||||||||||||||||||||||||||||
| U-Haul Moving Partners Inc. and Mercury Partners, LP | Net lease self-storage properties in the U.S. | 78 | $ | 38,751 | 3.5 | % | 4.3 | U-Haul Moving Partners Inc. and Mercury Partners, LP | Net lease self-storage properties in the U.S. | 78 | $ | 38,751 | 2.8 | % | 1.3 | ||||||||||||||||||||||||||||||||
Hellweg Die Profi-Baumärkte GmbH & Co. KG (a) | Do-it-yourself retail properties in Germany | 42 | 33,338 | 3.0 | % | 17.2 | |||||||||||||||||||||||||||||||||||||||||
State of Andalucía (a) | Government office properties in Spain | 70 | 28,393 | 2.5 | % | 15.0 | State of Andalucía (a) | Government office properties in Spain | 70 | 29,271 | 2.1 | % | 12.0 | ||||||||||||||||||||||||||||||||||
Metro Cash & Carry Italia S.p.A. (a) | Business-to-business wholesale stores in Italy and Germany | 20 | 27,119 | 2.4 | % | 7.3 | Metro Cash & Carry Italia S.p.A. (a) | Business-to-business wholesale stores in Italy and Germany | 20 | 27,512 | 2.0 | % | 5.8 | ||||||||||||||||||||||||||||||||||
Pendragon PLC (a) | Automotive dealerships in the United Kingdom | 69 | 22,449 | 2.0 | % | 10.4 | |||||||||||||||||||||||||||||||||||||||||
Hellweg Die Profi-Baumärkte GmbH & Co. KG (a) | Hellweg Die Profi-Baumärkte GmbH & Co. KG (a) | Do-it-yourself retail properties in Germany | 35 | 27,250 | 2.0 | % | 14.2 | ||||||||||||||||||||||||||||||||||||||||
| Extra Space Storage, Inc. | Extra Space Storage, Inc. | Net lease self-storage properties in the U.S. | 27 | 22,957 | 1.7 | % | 21.3 | ||||||||||||||||||||||||||||||||||||||||
OBI Group (a) | OBI Group (a) | Do-it-yourself retail properties in Poland | 26 | 22,266 | 1.6 | % | 7.8 | ||||||||||||||||||||||||||||||||||||||||
| Marriott Corporation | Net lease hotel properties in the U.S. | 18 | 20,065 | 1.8 | % | 3.9 | Net lease hotel properties in the U.S. | 18 | 21,350 | 1.6 | % | 1.0 | |||||||||||||||||||||||||||||||||||
| Extra Space Storage, Inc. | Net lease self-storage properties in the U.S. | 27 | 19,519 | 1.7 | % | 24.3 | |||||||||||||||||||||||||||||||||||||||||
| Nord Anglia Education, Inc. | K-12 private schools in the U.S. | 3 | 18,734 | 1.7 | % | 23.7 | Nord Anglia Education, Inc. | K-12 private schools in the U.S. | 3 | 20,981 | 1.5 | % | 20.7 | ||||||||||||||||||||||||||||||||||
Forterra, Inc. (a) (b) | Industrial properties in the U.S. and Canada | 27 | 18,394 | 1.7 | % | 23.5 | |||||||||||||||||||||||||||||||||||||||||
| Advance Auto Parts, Inc. | Distribution facilities in the U.S. | 30 | 18,345 | 1.6 | % | 13.1 | Advance Auto Parts, Inc. | Distribution facilities in the U.S. | 29 | 19,851 | 1.4 | % | 10.1 | ||||||||||||||||||||||||||||||||||
Eroski Sociedad Cooperativa (a) | Eroski Sociedad Cooperativa (a) | Grocery stores and warehouses in Spain | 63 | 19,705 | 1.4 | % | 13.2 | ||||||||||||||||||||||||||||||||||||||||
| Total | 384 | $ | 245,107 | 21.9 | % | 13.3 | Total | 369 | $ | 249,894 | 18.1 | % | 10.1 | ||||||||||||||||||||||||||||||||||
__________
(b)ABR for this tenant includes $16.1 million from a lease that expired in January 2023. Upon lease expiration, these properties were converted from net lease properties to operating properties.
W. P. Carey | |||||
Portfolio Diversification by Geography
(in thousands, except percentages)
| Region | ABR | ABR Percent | Square Footage (a) | Square Footage Percent | |||||||||
| United States | |||||||||||||
| South | |||||||||||||
| Texas | $ | 99,611 | 8.9 | % | 11,411 | 8.2 | % | ||||||
| Florida | 47,079 | 4.2 | % | 4,060 | 2.9 | % | |||||||
| Georgia | 28,197 | 2.5 | % | 4,024 | 2.9 | % | |||||||
| Tennessee | 15,721 | 1.4 | % | 2,260 | 1.6 | % | |||||||
| Alabama | 15,273 | 1.4 | % | 2,397 | 1.7 | % | |||||||
Other (b) | 12,622 | 1.1 | % | 2,263 | 1.6 | % | |||||||
| Total South | 218,503 | 19.5 | % | 26,415 | 18.9 | % | |||||||
| East | |||||||||||||
| North Carolina | 32,648 | 2.9 | % | 8,052 | 5.7 | % | |||||||
| Pennsylvania | 25,079 | 2.3 | % | 3,609 | 2.6 | % | |||||||
| Massachusetts | 21,395 | 1.9 | % | 1,397 | 1.0 | % | |||||||
| New Jersey | 19,330 | 1.7 | % | 1,100 | 0.8 | % | |||||||
| South Carolina | 15,570 | 1.4 | % | 4,437 | 3.2 | % | |||||||
| Virginia | 13,449 | 1.2 | % | 1,430 | 1.0 | % | |||||||
| New York | 12,919 | 1.2 | % | 1,392 | 1.0 | % | |||||||
| Kentucky | 11,220 | 1.0 | % | 3,063 | 2.2 | % | |||||||
Other (b) | 22,818 | 2.0 | % | 3,531 | 2.5 | % | |||||||
| Total East | 174,428 | 15.6 | % | 28,011 | 20.0 | % | |||||||
| Midwest | |||||||||||||
| Illinois | 51,385 | 4.6 | % | 5,974 | 4.3 | % | |||||||
| Minnesota | 25,652 | 2.3 | % | 2,362 | 1.7 | % | |||||||
| Indiana | 18,002 | 1.6 | % | 2,827 | 2.0 | % | |||||||
| Wisconsin | 15,874 | 1.4 | % | 2,984 | 2.1 | % | |||||||
| Ohio | 15,125 | 1.4 | % | 3,153 | 2.2 | % | |||||||
| Michigan | 13,898 | 1.2 | % | 2,132 | 1.5 | % | |||||||
Other (b) | 27,471 | 2.5 | % | 4,697 | 3.4 | % | |||||||
| Total Midwest | 167,407 | 15.0 | % | 24,129 | 17.2 | % | |||||||
| West | |||||||||||||
| California | 60,393 | 5.4 | % | 5,162 | 3.7 | % | |||||||
| Arizona | 33,826 | 3.0 | % | 3,648 | 2.6 | % | |||||||
| Colorado | 11,413 | 1.0 | % | 1,008 | 0.7 | % | |||||||
Other (b) | 44,575 | 4.0 | % | 4,210 | 3.0 | % | |||||||
| Total West | 150,207 | 13.4 | % | 14,028 | 10.0 | % | |||||||
| United States Total | 710,545 | 63.5 | % | 92,583 | 66.1 | % | |||||||
| International | |||||||||||||
| Germany | 62,653 | 5.6 | % | 6,769 | 4.8 | % | |||||||
| Poland | 52,066 | 4.6 | % | 7,215 | 5.1 | % | |||||||
| The Netherlands | 50,698 | 4.5 | % | 6,862 | 4.9 | % | |||||||
| Spain | 49,089 | 4.4 | % | 4,226 | 3.0 | % | |||||||
| United Kingdom | 42,592 | 3.8 | % | 3,309 | 2.4 | % | |||||||
| Italy | 25,513 | 2.3 | % | 2,386 | 1.7 | % | |||||||
| Croatia | 16,513 | 1.5 | % | 1,794 | 1.3 | % | |||||||
| Denmark | 13,991 | 1.3 | % | 2,320 | 1.7 | % | |||||||
| France | 13,336 | 1.2 | % | 1,359 | 1.0 | % | |||||||
| Canada | 12,867 | 1.2 | % | 2,103 | 1.5 | % | |||||||
| Finland | 11,376 | 1.0 | % | 949 | 0.7 | % | |||||||
Other (c) | 57,280 | 5.1 | % | 8,107 | 5.8 | % | |||||||
| International Total | 407,974 | 36.5 | % | 47,399 | 33.9 | % | |||||||
| Total | $ | 1,118,519 | 100.0 | % | 139,982 | 100.0 | % | ||||||
| Region | ABR | ABR Percent | Square Footage (a) | Square Footage Percent | ||||||||||||||||||||||
| United States | ||||||||||||||||||||||||||
| South | ||||||||||||||||||||||||||
| Texas | $ | 115,176 | 8.3 | % | 12,609 | 7.2 | % | |||||||||||||||||||
| Florida | 54,064 | 3.9 | % | 4,544 | 2.6 | % | ||||||||||||||||||||
| Georgia | 28,411 | 2.1 | % | 4,721 | 2.7 | % | ||||||||||||||||||||
| Tennessee | 25,545 | 1.8 | % | 4,136 | 2.3 | % | ||||||||||||||||||||
| Alabama | 20,072 | 1.5 | % | 3,334 | 1.9 | % | ||||||||||||||||||||
Other (b) | 14,529 | 1.1 | % | 2,237 | 1.3 | % | ||||||||||||||||||||
| Total South | 257,797 | 18.7 | % | 31,581 | 18.0 | % | ||||||||||||||||||||
| Midwest | ||||||||||||||||||||||||||
| Illinois | 75,252 | 5.5 | % | 10,864 | 6.2 | % | ||||||||||||||||||||
| Minnesota | 34,977 | 2.5 | % | 3,686 | 2.1 | % | ||||||||||||||||||||
| Indiana | 29,312 | 2.1 | % | 5,222 | 3.0 | % | ||||||||||||||||||||
| Michigan | 28,311 | 2.1 | % | 4,705 | 2.7 | % | ||||||||||||||||||||
| Ohio | 28,303 | 2.0 | % | 6,181 | 3.5 | % | ||||||||||||||||||||
| Wisconsin | 18,126 | 1.3 | % | 3,276 | 1.8 | % | ||||||||||||||||||||
Other (b) | 42,430 | 3.1 | % | 6,230 | 3.5 | % | ||||||||||||||||||||
| Total Midwest | 256,711 | 18.6 | % | 40,164 | 22.8 | % | ||||||||||||||||||||
| East | ||||||||||||||||||||||||||
| North Carolina | 38,333 | 2.8 | % | 8,302 | 4.7 | % | ||||||||||||||||||||
| Pennsylvania | 32,169 | 2.3 | % | 3,527 | 2.0 | % | ||||||||||||||||||||
| New York | 19,373 | 1.4 | % | 2,257 | 1.3 | % | ||||||||||||||||||||
| Kentucky | 18,638 | 1.4 | % | 3,063 | 1.7 | % | ||||||||||||||||||||
| South Carolina | 18,556 | 1.3 | % | 4,949 | 2.8 | % | ||||||||||||||||||||
| Massachusetts | 18,209 | 1.3 | % | 1,387 | 0.8 | % | ||||||||||||||||||||
| New Jersey | 15,735 | 1.1 | % | 943 | 0.5 | % | ||||||||||||||||||||
| Virginia | 14,652 | 1.1 | % | 1,854 | 1.1 | % | ||||||||||||||||||||
Other (b) | 25,029 | 1.8 | % | 3,884 | 2.2 | % | ||||||||||||||||||||
| Total East | 200,694 | 14.5 | % | 30,166 | 17.1 | % | ||||||||||||||||||||
| West | ||||||||||||||||||||||||||
| California | 64,977 | 4.7 | % | 6,417 | 3.6 | % | ||||||||||||||||||||
| Arizona | 30,417 | 2.2 | % | 3,437 | 2.0 | % | ||||||||||||||||||||
Other (b) | 64,897 | 4.7 | % | 6,994 | 4.0 | % | ||||||||||||||||||||
| Total West | 160,291 | 11.6 | % | 16,848 | 9.6 | % | ||||||||||||||||||||
| United States Total | 875,493 | 63.4 | % | 118,759 | 67.5 | % | ||||||||||||||||||||
| International | ||||||||||||||||||||||||||
| Germany | 71,304 | 5.2 | % | 7,020 | 4.0 | % | ||||||||||||||||||||
| Spain | 63,779 | 4.6 | % | 5,187 | 3.0 | % | ||||||||||||||||||||
| Poland | 63,552 | 4.6 | % | 8,631 | 4.9 | % | ||||||||||||||||||||
| The Netherlands | 55,666 | 4.0 | % | 7,054 | 4.0 | % | ||||||||||||||||||||
| United Kingdom | 51,977 | 3.8 | % | 4,766 | 2.7 | % | ||||||||||||||||||||
| Italy | 26,884 | 1.9 | % | 2,541 | 1.4 | % | ||||||||||||||||||||
| Denmark | 23,526 | 1.7 | % | 3,039 | 1.7 | % | ||||||||||||||||||||
| France | 19,920 | 1.4 | % | 1,679 | 1.0 | % | ||||||||||||||||||||
| Croatia | 19,475 | 1.4 | % | 2,063 | 1.2 | % | ||||||||||||||||||||
| Canada | 16,337 | 1.2 | % | 2,492 | 1.4 | % | ||||||||||||||||||||
| Norway | 15,533 | 1.1 | % | 753 | 0.4 | % | ||||||||||||||||||||
Other (c) | 78,453 | 5.7 | % | 11,973 | 6.8 | % | ||||||||||||||||||||
| International Total | 506,406 | 36.6 | % | 57,198 | 32.5 | % | ||||||||||||||||||||
| Total | $ | 1,381,899 | 100.0 | % | 175,957 | 100.0 | % | |||||||||||||||||||
W. P. Carey | |||||
Portfolio Diversification by Property Type
(in thousands, except percentages)
| Property Type | ABR | ABR Percent | Square Footage (a) | Square Footage Percent | ||||||||||||||||||||||
| Industrial | $ | 366,777 | 26.5 | % | 62,521 | 35.6 | % | |||||||||||||||||||
| Warehouse | 333,713 | 24.1 | % | 63,192 | 35.9 | % | ||||||||||||||||||||
| Office | 239,941 | 17.4 | % | 16,703 | 9.5 | % | ||||||||||||||||||||
Retail (d) | 231,839 | 16.8 | % | 20,290 | 11.5 | % | ||||||||||||||||||||
| Self Storage (net lease) | 61,708 | 4.5 | % | 5,810 | 3.3 | % | ||||||||||||||||||||
Other (e) | 147,921 | 10.7 | % | 7,441 | 4.2 | % | ||||||||||||||||||||
| Total | $ | 1,381,899 | 100.0 | % | 175,957 | 100.0 | % | |||||||||||||||||||
| Property Type | ABR | ABR Percent | Square Footage (a) | Square Footage Percent | |||||||||
| Industrial | $ | 268,434 | 24.0 | % | 47,996 | 34.3 | % | ||||||
| Office | 251,519 | 22.5 | % | 16,894 | 12.1 | % | |||||||
| Warehouse | 240,200 | 21.5 | % | 46,169 | 33.0 | % | |||||||
Retail (d) | 198,686 | 17.7 | % | 17,556 | 12.5 | % | |||||||
| Self Storage (net lease) | 58,270 | 5.2 | % | 5,810 | 4.1 | % | |||||||
Other (e) | 101,410 | 9.1 | % | 5,557 | 4.0 | % | |||||||
| Total | $ | 1,118,519 | 100.0 | % | 139,982 | 100.0 | % | ||||||
(c)Includes assets in Lithuania, Mexico, Finland, Belgium, Hungary, Mauritius, Slovakia, Portugal, the Czech Republic, Austria, Sweden, Japan, Latvia, and Estonia.
(d)Includes automotive dealerships.
(e)Includes ABR from tenants with the following property types: hotel (net lease), education facility, laboratory, specialty, fitness facility, research and development, student housing (net lease), theater, funeral home, restaurant, land, and parking.
W. P. Carey | |||||
Portfolio Diversification by Tenant Industry
(in thousands, except percentages)
| Industry Type | ABR | ABR Percent | Square Footage | Square Footage Percent | Industry Type | ABR | ABR Percent | Square Footage | Square Footage Percent | ||||||||||||||||||||||||||||||
Retail Stores (a) | $ | 233,346 | 20.9 | % | 30,993 | 22.1 | % | Retail Stores (a) | $ | 283,868 | 20.5 | % | 36,457 | 20.7 | % | ||||||||||||||||||||||||
| Consumer Services | 113,588 | 10.1 | % | 8,429 | 6.0 | % | Consumer Services | 110,969 | 8.0 | % | 8,067 | 4.6 | % | ||||||||||||||||||||||||||
| Beverage and Food | Beverage and Food | 105,906 | 7.7 | % | 15,759 | 9.0 | % | ||||||||||||||||||||||||||||||||
| Automotive | 72,679 | 6.5 | % | 12,166 | 8.7 | % | Automotive | 85,966 | 6.2 | % | 13,477 | 7.7 | % | ||||||||||||||||||||||||||
| Grocery | Grocery | 79,516 | 5.8 | % | 8,363 | 4.8 | % | ||||||||||||||||||||||||||||||||
| Cargo Transportation | 60,211 | 5.4 | % | 9,345 | 6.7 | % | Cargo Transportation | 63,473 | 4.6 | % | 9,550 | 5.4 | % | ||||||||||||||||||||||||||
| Hotel and Leisure | Hotel and Leisure | 57,132 | 4.1 | % | 3,060 | 1.7 | % | ||||||||||||||||||||||||||||||||
| Healthcare and Pharmaceuticals | Healthcare and Pharmaceuticals | 55,806 | 4.0 | % | 5,557 | 3.2 | % | ||||||||||||||||||||||||||||||||
| Capital Equipment | Capital Equipment | 55,593 | 4.0 | % | 8,459 | 4.8 | % | ||||||||||||||||||||||||||||||||
| Business Services | 60,073 | 5.4 | % | 5,272 | 3.8 | % | Business Services | 48,375 | 3.5 | % | 4,113 | 2.3 | % | ||||||||||||||||||||||||||
| Grocery | 56,574 | 5.1 | % | 6,549 | 4.7 | % | |||||||||||||||||||||||||||||||||
| Healthcare and Pharmaceuticals | 51,010 | 4.6 | % | 4,281 | 3.1 | % | |||||||||||||||||||||||||||||||||
| Hotel, Gaming, and Leisure | 43,663 | 3.9 | % | 2,423 | 1.7 | % | |||||||||||||||||||||||||||||||||
| Containers, Packaging, and Glass | Containers, Packaging, and Glass | 46,942 | 3.4 | % | 8,266 | 4.7 | % | ||||||||||||||||||||||||||||||||
| Durable Consumer Goods | Durable Consumer Goods | 46,761 | 3.4 | % | 10,300 | 5.9 | % | ||||||||||||||||||||||||||||||||
| Construction and Building | 42,290 | 3.8 | % | 7,673 | 5.5 | % | Construction and Building | 46,583 | 3.4 | % | 9,235 | 5.2 | % | ||||||||||||||||||||||||||
| Capital Equipment | 39,686 | 3.5 | % | 6,550 | 4.7 | % | |||||||||||||||||||||||||||||||||
| Sovereign and Public Finance | 39,259 | 3.5 | % | 3,364 | 2.4 | % | Sovereign and Public Finance | 42,578 | 3.1 | % | 3,560 | 2.0 | % | ||||||||||||||||||||||||||
| Beverage, Food, and Tobacco | 37,825 | 3.4 | % | 4,862 | 3.5 | % | |||||||||||||||||||||||||||||||||
| Containers, Packaging, and Glass | 35,718 | 3.2 | % | 6,186 | 4.4 | % | |||||||||||||||||||||||||||||||||
| High Tech Industries | 30,444 | 2.7 | % | 3,384 | 2.4 | % | High Tech Industries | 36,027 | 2.6 | % | 3,574 | 2.0 | % | ||||||||||||||||||||||||||
| Durable Consumer Goods | 30,214 | 2.7 | % | 6,870 | 4.9 | % | |||||||||||||||||||||||||||||||||
| Insurance | 24,875 | 2.2 | % | 1,759 | 1.3 | % | Insurance | 30,862 | 2.2 | % | 2,024 | 1.1 | % | ||||||||||||||||||||||||||
| Chemicals, Plastics, and Rubber | Chemicals, Plastics, and Rubber | 29,935 | 2.2 | % | 5,254 | 3.0 | % | ||||||||||||||||||||||||||||||||
| Non-Durable Consumer Goods | Non-Durable Consumer Goods | 26,374 | 1.9 | % | 6,244 | 3.5 | % | ||||||||||||||||||||||||||||||||
| Banking | 19,239 | 1.7 | % | 1,247 | 0.9 | % | Banking | 23,894 | 1.7 | % | 1,426 | 0.8 | % | ||||||||||||||||||||||||||
| Metals | Metals | 18,673 | 1.4 | % | 3,259 | 1.9 | % | ||||||||||||||||||||||||||||||||
| Telecommunications | 18,803 | 1.7 | % | 1,732 | 1.2 | % | Telecommunications | 16,839 | 1.2 | % | 1,686 | 1.0 | % | ||||||||||||||||||||||||||
| Non-Durable Consumer Goods | 15,088 | 1.3 | % | 5,194 | 3.7 | % | |||||||||||||||||||||||||||||||||
| Media: Advertising, Printing, and Publishing | 14,785 | 1.3 | % | 1,435 | 1.0 | % | |||||||||||||||||||||||||||||||||
| Aerospace and Defense | 13,539 | 1.2 | % | 1,279 | 0.9 | % | |||||||||||||||||||||||||||||||||
| Media: Broadcasting and Subscription | 12,787 | 1.1 | % | 784 | 0.6 | % | |||||||||||||||||||||||||||||||||
| Wholesale | 12,206 | 1.1 | % | 2,005 | 1.4 | % | |||||||||||||||||||||||||||||||||
| Chemicals, Plastics, and Rubber | 12,037 | 1.1 | % | 1,403 | 1.0 | % | |||||||||||||||||||||||||||||||||
Other (b) | 28,580 | 2.6 | % | 4,797 | 3.4 | % | Other (b) | 69,827 | 5.1 | % | 8,267 | 4.7 | % | ||||||||||||||||||||||||||
| Total | $ | 1,118,519 | 100.0 | % | 139,982 | 100.0 | % | Total | $ | 1,381,899 | 100.0 | % | 175,957 | 100.0 | % | ||||||||||||||||||||||||
__________
(b)Includes ABR from tenants in the following industries: media: broadcasting and subscription, aerospace and defense, wholesale, media: advertising, printing, and publishing, oil and gas, utilities: electric, environmental industries, consumer transportation, forest products and paper, electricity, and real estate. Also includes square footage for vacant properties.
W. P. Carey | |||||
Lease Expirations
(dollars and square footage in thousands, except percentages and number of leases)thousands)
Year of Lease Expiration (a) | Number of Leases Expiring | Number of Tenants with Leases Expiring | ABR | ABR Percent | Square Footage | Square Footage Percent | Year of Lease Expiration (a) | Number of Leases Expiring | Number of Tenants with Leases Expiring | ABR | ABR Percent | Square Footage | Square Footage Percent | ||||||||||||||||||||||||||||||||||||||||||||
| 2020 | 25 | 22 | $ | 19,294 | 1.7 | % | 2,050 | 1.5 | % | ||||||||||||||||||||||||||||||||||||||||||||||||
| 2021 | 77 | 23 | 33,967 | 3.0 | % | 3,899 | 2.8 | % | |||||||||||||||||||||||||||||||||||||||||||||||||
| 2022 | 41 | 32 | 58,261 | 5.2 | % | 5,377 | 3.8 | % | |||||||||||||||||||||||||||||||||||||||||||||||||
| 2023 | 31 | 28 | 46,954 | 4.2 | % | 5,919 | 4.2 | % | |||||||||||||||||||||||||||||||||||||||||||||||||
| 2024 | 76 | 49 | 111,646 | 10.0 | % | 13,961 | 10.0 | % | |||||||||||||||||||||||||||||||||||||||||||||||||
2023 (b) | 2023 (b) | 36 | 30 | $ | 54,228 | 3.9 | % | 5,500 | 3.1 | % | |||||||||||||||||||||||||||||||||||||||||||||||
2024 (c) | 2024 (c) | 41 | 35 | 90,330 | 6.6 | % | 11,230 | 6.4 | % | ||||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 61 | 30 | 58,023 | 5.2 | % | 7,194 | 5.1 | % | 2025 | 53 | 32 | 61,241 | 4.4 | % | 7,068 | 4.0 | % | ||||||||||||||||||||||||||||||||||||||||
| 2026 | 32 | 20 | 49,824 | 4.5 | % | 7,354 | 5.2 | % | 2026 | 46 | 36 | 64,074 | 4.7 | % | 9,081 | 5.1 | % | ||||||||||||||||||||||||||||||||||||||||
| 2027 | 45 | 27 | 71,604 | 6.4 | % | 8,237 | 5.9 | % | 2027 | 57 | 33 | 82,953 | 6.0 | % | 8,906 | 5.1 | % | ||||||||||||||||||||||||||||||||||||||||
| 2028 | 43 | 25 | 61,774 | 5.5 | % | 4,867 | 3.5 | % | 2028 | 46 | 28 | 69,298 | 5.0 | % | 5,589 | 3.2 | % | ||||||||||||||||||||||||||||||||||||||||
| 2029 | 31 | 18 | 36,289 | 3.2 | % | 4,561 | 3.3 | % | 2029 | 57 | 29 | 68,802 | 5.0 | % | 8,337 | 4.7 | % | ||||||||||||||||||||||||||||||||||||||||
| 2030 | 28 | 22 | 73,580 | 6.6 | % | 6,638 | 4.7 | % | 2030 | 34 | 29 | 73,128 | 5.3 | % | 6,165 | 3.5 | % | ||||||||||||||||||||||||||||||||||||||||
| 2031 | 66 | 16 | 68,973 | 6.2 | % | 8,155 | 5.8 | % | 2031 | 37 | 21 | 70,249 | 5.1 | % | 8,749 | 5.0 | % | ||||||||||||||||||||||||||||||||||||||||
| 2032 | 35 | 14 | 43,105 | 3.9 | % | 5,914 | 4.2 | % | 2032 | 41 | 22 | 44,204 | 3.2 | % | 6,200 | 3.5 | % | ||||||||||||||||||||||||||||||||||||||||
| 2033 | 19 | 13 | 48,275 | 4.3 | % | 6,672 | 4.8 | % | 2033 | 31 | 24 | 81,864 | 5.9 | % | 11,377 | 6.5 | % | ||||||||||||||||||||||||||||||||||||||||
| Thereafter (>2033) | 172 | 84 | 336,950 | 30.1 | % | 47,554 | 34.0 | % | |||||||||||||||||||||||||||||||||||||||||||||||||
| 2034 | 2034 | 49 | 18 | 83,347 | 6.0 | % | 8,638 | 4.9 | % | ||||||||||||||||||||||||||||||||||||||||||||||||
| 2035 | 2035 | 14 | 14 | 29,388 | 2.1 | % | 4,957 | 2.8 | % | ||||||||||||||||||||||||||||||||||||||||||||||||
| 2036 | 2036 | 49 | 19 | 84,795 | 6.1 | % | 13,524 | 7.7 | % | ||||||||||||||||||||||||||||||||||||||||||||||||
| Thereafter (>2036) | Thereafter (>2036) | 261 | 107 | 423,998 | 30.7 | % | 58,555 | 33.3 | % | ||||||||||||||||||||||||||||||||||||||||||||||||
| Vacant | — | — | — | — | % | 1,630 | 1.2 | % | Vacant | — | — | — | — | % | 2,081 | 1.2 | % | ||||||||||||||||||||||||||||||||||||||||
| Total | 782 | $ | 1,118,519 | 100.0 | % | 139,982 | 100.0 | % | Total | 852 | $ | 1,381,899 | 100.0 | % | 175,957 | 100.0 | % | ||||||||||||||||||||||||||||||||||||||||
