UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

þQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2013

or

oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from__________ to ___________

Commission File Number: 001-32162

CORPORATE PROPERTY ASSOCIATES 16 – GLOBAL INCORPORATED

(Exact name of registrant as specified in its charter)

Maryland	80-0067704
(State of incorporation)	(I.R.S. Employer Identification No.)
50 Rockefeller Plaza
New York, New York	10020
(Address of principal executive offices)	(Zip Code)

Investor Relations (212) 492-8920

(212) 492-1100

(Registrant’s telephone numbers, including area code)

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 þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files).  Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o	Accelerated filer o		Non-accelerated filer þ	Smaller reporting company o
		(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes o No þ

Registrant has 206,397,894 shares of common stock, $0.001 par value, outstanding at August 1, 2013.

INDEX

	Page No.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets	2
Consolidated Statements of Income	3
Consolidated Statements of Comprehensive Income (Loss)	4
Consolidated Statements of Cash Flows	5
Notes to Consolidated Financial Statements	7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	30
Item 3. Quantitative and Qualitative Disclosures About Market Risk	45
Item 4. Controls and Procedures	47
PART II - OTHER INFORMATION
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	48
Item 6. Exhibits	49
Signatures	50

Forward-Looking Statements

This Quarterly Report on Form 10-Q (the “Report”), including Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) in Item 2 of Part I 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. It is important to note that our actual results could be materially different from those projected in such forward-looking statements. 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 which 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 (the “SEC”), including but not limited to those described in Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2012 as filed with the SEC on February 26, 2013 (the “2012 Annual Report”). 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.

Additionally, a description of our critical accounting estimates is included in the MD&A section of our 2012 Annual Report. There has been no significant change in our critical accounting estimates. All references to “Notes” throughout the document refer to the footnotes to the consolidated financial statements of the registrant in Part I, Item 1, Financial Statements (Unaudited).

CPA®:16 – Global 6/30/2013 10-Q — 1

PART I

Item 1. Financial Statements

CORPORATE PROPERTY ASSOCIATES 16 – GLOBAL INCORPORATED

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in thousands, except share and per share amounts)

	June 30, 2013			December 31, 2012
Assets
Investments in real estate:
Real estate, at cost (inclusive of amounts attributable to consolidated variable interest entities (“VIEs”) of $522,491 and $528,858, respectively)	$	2,187,605		$	2,243,470
Operating real estate, at cost (inclusive of amounts attributable to consolidated VIEs of $29,219 and $29,219, respectively)	85,811			85,565
Accumulated depreciation (inclusive of amounts attributable to consolidated VIES of $74,325 and $68,529, respectively)	(281,050		)	(258,655		)
Net investments in properties	1,992,366			2,070,380
Net investments in direct financing leases (inclusive of amounts attributable to consolidated VIEs of $47,594 and $48,363, respectively)	450,698			467,831
Equity investments in real estate	222,227			227,675
Assets held for sale	996			-
Net investments in real estate	2,666,287			2,765,886
Notes receivable (inclusive of amounts attributable to consolidated VIEs of $33,076 and $33,558, respectively)	42,940			43,394
Cash and cash equivalents (inclusive of amounts attributable to consolidated VIEs of $12,023 and $10,993, respectively)	70,394			66,405
In-place lease intangible assets, net (inclusive of amounts attributable to consolidated VIEs of $39,526 and $40,931, respectively)	233,513			260,120
Other intangible assets, net (inclusive of amounts attributable to consolidated VIEs of $20,257 and $21,251, respectively)	166,795			182,972
Funds in escrow (inclusive of amounts attributable to consolidated VIEs of $3,004 and $3,268, respectively)	25,154			23,274
Other assets, net (inclusive of amounts attributable to consolidated VIEs of $6,328 and $5,225, respectively)	69,928			64,741
Total assets	$	3,275,011		$	3,406,792
Liabilities and Equity
Liabilities:
Non-recourse debt (inclusive of amounts attributable to consolidated VIEs of $476,007 and $485,951, respectively)	$	1,608,289		$	1,644,180
Line of credit	95,000			143,000
Accounts payable, accrued expenses, and other liabilities (inclusive of amounts attributable to consolidated VIEs of $12,185 and $12,409, respectively)	38,319			40,931
Prepaid and deferred rental income and security deposits (inclusive of amounts attributable to consolidated VIEs of $24,543 and $25,402, respectively)	91,970			93,208
Due to affiliates	5,008			6,401
Distributions payable	34,470			33,965
Total liabilities	1,873,056			1,961,685
Redeemable noncontrolling interest	21,399			21,747
Commitments and contingencies (Note 11)
Equity:
CPA®:16 – Global stockholders’ equity:
Common stock $0.001 par value, 400,000,000 shares authorized; 220,579,448 and 216,822,067 shares issued, respectively; and 205,142,603 and 202,617,274 shares outstanding, respectively	221			217
Additional paid-in capital	2,012,854			1,980,984
Distributions in excess of accumulated earnings	(556,766		)	(500,050		)
Accumulated other comprehensive loss	(29,497		)	(27,043		)
Less, treasury stock at cost, 15,436,845 and 14,204,793 shares, respectively	(136,634		)	(126,228		)
Total CPA®:16 – Global stockholders’ equity	1,290,178			1,327,880
Noncontrolling interests	90,378			95,480
Total equity	1,380,556			1,423,360
Total liabilities and equity	$	3,275,011		$	3,406,792

See Notes to Consolidated Financial Statements.

CPA®:16 – Global 6/30/2013 10-Q — 2

CORPORATE PROPERTY ASSOCIATES 16 – GLOBAL INCORPORATED

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(in thousands, except share and per share amounts)

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Revenues
Lease revenues:
Rental income	$	59,609		$	61,315		$	118,700		$	122,396
Interest income from direct financing leases	10,015			9,860			20,097			19,941
Total lease revenues	69,624			71,175			138,797			142,337
Other operating income	2,049			1,056			4,460			3,610
Interest income on notes receivable	738			896			1,473			2,068
Other real estate income	7,527			7,417			13,883			13,825
	79,938			80,544			158,613			161,840
Operating Expenses
General and administrative	(4,157		)	(4,393		)	(10,079		)	(9,123		)
Depreciation and amortization	(22,450		)	(22,456		)	(44,902		)	(45,946		)
Property expenses	(8,429		)	(7,447		)	(17,548		)	(16,515		)
Other real estate expenses	(5,180		)	(5,196		)	(9,875		)	(10,035		)
Impairment charges	(3,036		)	-			(3,036		)	(10		)
Allowance for credit losses	(9,358		)	-			(9,358		)	-
	(52,610		)	(39,492		)	(94,798		)	(81,629		)
Other Income and Expenses
Net income from equity investments in real estate	6,059			5,429			11,584			12,973
Other income and (expenses)	708			(2,380		)	(136		)	(1,518		)
Gain on extinguishment of debt	-			6,026			-			5,521
Interest expense	(24,338		)	(26,245		)	(48,539		)	(53,326		)
	(17,571		)	(17,170		)	(37,091		)	(36,350		)
Income from continuing operations before income taxes	9,757			23,882			26,724			43,861
Provision for income taxes	(2,473		)	(2,336		)	(7,369		)	(6,432		)
Income from continuing operations	7,284			21,546			19,355			37,429
Discontinued Operations
Income (loss) from operations of discontinued properties, net of tax	8,247			(2,839		)	8,280			(4,597		)
Gain on deconsolidation of a subsidiary	4,699			-			4,699			-
(Loss) gain on sale of real estate	(8,000		)	3			(5,299		)	(2,189		)
Loss on extinguishment of debt	-			(357		)	-			(357		)
Impairment charges	-			-			(9,313		)	(485		)
Income (loss) from discontinued operations, net of tax	4,946			(3,193		)	(1,633		)	(7,628		)
Net Income	12,230			18,353			17,722			29,801
Less: Net income attributable to noncontrolling interests (inclusive of Available Cash Distributions to advisor of $3,830, $3,598, $7,444, and $7,879, respectively)	(2,697		)	(9,825		)	(7,348		)	(13,598		)
Net (income) loss attributable to redeemable noncontrolling interest	(392		)	(551		)	1,509			(906		)
Net Income Attributable to CPA®:16 – Global Stockholders	$	9,141		$	7,977		$	11,883		$	15,297
Earnings Per Share
Income from continuing operations attributable to CPA®:16 – Global stockholders	$	0.02		$	0.06		$	0.07		$	0.12
Income (loss) from discontinued operations attributable to CPA®:16 – Global stockholders	0.02			(0.02		)	(0.01		)	(0.04		)
Net income attributable to CPA®:16 – Global stockholders	$	0.04		$	0.04		$	0.06		$	0.08
Weighted Average Shares Outstanding	204,570,324			201,829,673			204,053,520			201,567,879
Amounts Attributable to CPA®:16 – Global Stockholders
Income from continuing operations, net of tax	$	4,195		$	11,170		$	13,516		$	22,925
Income (loss) from discontinued operations, net of tax	4,946			(3,193		)	(1,633		)	(7,628		)
Net income attributable to CPA®:16 – Global stockholders	$	9,141		$	7,977		$	11,883		$	15,297
Distributions Declared Per Share	$	0.1680		$	0.1672		$	0.3358		$	0.3342

See Notes to Consolidated Financial Statements.

CPA®:16 – Global 6/30/2013 10-Q — 3

CORPORATE PROPERTY ASSOCIATES 16 – GLOBAL INCORPORATED

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

(in thousands)

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Net Income	$	12,230		$	18,353		$	17,722		$	29,801
Other Comprehensive Income (Loss):
Foreign currency translation adjustments	3,158			(17,624		)	(6,861		)	(7,505		)
Change in unrealized appreciation on marketable securities	21			25			24			8
Change in unrealized gain (loss) on derivative instruments:	1,297			(853		)	4,485			(1,949		)
	4,476			(18,452		)	(2,352		)	(9,446		)
Comprehensive Income (Loss)	16,706			(99		)	15,370			20,355
Amounts Attributable to Noncontrolling Interests:
Net income	(2,697		)	(9,825		)	(7,348		)	(13,598		)
Foreign currency translation adjustments	(1,410		)	1,868			(440		)	693
Comprehensive income attributable to noncontrolling interests	(4,107		)	(7,957		)	(7,788		)	(12,905		)
Amounts Attributable to Redeemable Noncontrolling Interest:
Net (income) loss	(392		)	(551		)	1,509			(906		)
Foreign currency translation adjustments	(305		)	1,252			338			612
Comprehensive (income) loss attributable to redeemable noncontrolling interest	(697		)	701			1,847			(294		)
Comprehensive Income (Loss) Attributable to CPA®:16 – Global Stockholders	$	11,902		$	(7,355	)	$	9,429		$	7,156

See Notes to Consolidated Financial Statements.

CPA®:16 – Global 6/30/2013 10-Q — 4

CORPORATE PROPERTY ASSOCIATES 16 – GLOBAL INCORPORATED

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(in thousands)

	Six Months Ended June 30,
	2013			2012
Cash Flows — Operating Activities
Net income	$	17,722		$	29,801
Adjustments to net income:
Depreciation and amortization including intangible assets and deferred financing costs	47,533			54,768
Net income from equity investments in real estate in excess of distributions received	(2,456		)	(4,096		)
Issuance of shares to affiliate in satisfaction of fees due	8,249			7,091
Gain on deconsolidation of a subsidiary	(4,699		)	-
Loss on sale of real estate	5,299			2,189
Unrealized loss on foreign currency transactions and other	960			1,513
Realized (gain) loss on foreign currency transactions and other	(672		)	612
Straight-line rent adjustment and amortization of rent-related intangibles	8,204			6,604
Gain on extinguishment of debt	-			(5,164		)
Impairment charges	12,349			495
Allowance for credit losses	9,358			-
Net changes in other operating assets and liabilities	(6,153		)	259
Net Cash Provided by Operating Activities	95,694			94,072
Cash Flows — Investing Activities
Distributions received from equity investments in real estate in excess of equity income	7,155			6,442
Acquisition of real estate	(4,772		)	-
Expenditures on capital improvements	(345		)	(333		)
Maturities of debt securities	66			66
Proceeds from sale of real estate	31,372			18,595
Funds placed in escrow	(8,021		)	(8,387		)
Funds released from escrow	6,124			11,284
Payment of deferred acquisition fees to an affiliate	(546		)	(1,633		)
Proceeds from repayment of notes receivable	144			30,015
Cash receipts from direct financing leases greater than revenue recognized	2,494			-
Net Cash Provided by Investing Activities	33,671			56,049
Cash Flows — Financing Activities
Distributions paid	(68,094		)	(67,099		)
Contributions from noncontrolling interests	2,679			20,406
Distributions to noncontrolling interests	(14,124		)	(14,992		)
Scheduled payments of mortgage principal	(21,010		)	(49,039		)
Prepayments of mortgage principal	(4,925		)	(42,973		)
Proceeds from mortgage financing	15,955			65,575
Proceeds from line of credit	45,000			-
Repayments of line of credit	(93,000		)	(84,000		)
Funds placed in escrow	53			77
Funds released from escrow	(1		)	(2,710		)
Deferred financing costs and mortgage deposits	(323		)	(2,172		)
Proceeds from issuance of shares, net of issuance costs	23,625			17,315
Purchase of treasury stock	(10,406		)	(13,159		)
Net Cash Used in Financing Activities	(124,571		)	(172,771		)
Change in Cash and Cash Equivalents During the Period
Effect of exchange rate changes on cash	(805		)	(1,351		)
Net increase (decrease) in cash and cash equivalents	3,989			(24,001		)
Cash and cash equivalents, beginning of period	66,405			109,694
Cash and cash equivalents, end of period	$	70,394		$	85,693

(Continued)

CPA®:16 – Global 6/30/2013 10-Q — 5

CORPORATE PROPERTY ASSOCIATES 16 – GLOBAL INCORPORATED

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(Continued)

Supplemental non-cash investing and financing activities:

In March 2013, a tenant in one of our domestic properties filed for bankruptcy and ceased paying rent to us. As a result, we suspended debt service payments on the related non-recourse mortgage loan. In April 2013, the bankruptcy court appointed a receiver to take possession of the property, and we no longer had control over the activities that most significantly impacted the economic performance of the property. In June 2013, the property was sold in a foreclosure auction, at which point we deconsolidated the investment with carrying values for its net investment in properties and non-recourse debt of $8.7 million and $13.0 million, respectively, and recognized a gain on the deconsolidation of $4.7 million (Note 13).

During the three months ended March 31, 2013, we incurred trade taxes related to prior years’ activity on our Hellweg 2 investment of $2.4 million. The taxes were attributable to our third-party partner’s redeemable noncontrolling interest in the investment and paid by that partner.

During the second quarter of 2013 and 2012, we declared distributions totaling $34.5 million and $33.7 million, respectively, which were paid on July 15, 2013 and July 16, 2012, respectively.

See Notes to Consolidated Financial Statements.

CPA®:16 – Global 6/30/2013 10-Q — 6

CORPORATE PROPERTY ASSOCIATES 16 – GLOBAL INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 1. Business and Organization

Corporate Property Associates 16 – Global Incorporated (“CPA®:16 – Global”) and, together with its consolidated subsidiaries and predecessors, “we,” “us,” or “our”) is a publicly owned, non-listed real estate investment trust (“REIT”) that invests primarily in commercial properties leased to companies domestically and internationally. We were formed in 2003 and are managed by W. P. Carey Inc. (“WPC”) and its subsidiaries (collectively, the “advisor”). As a REIT, we are not subject to United States (“U.S.”) federal income taxation as long as we satisfy certain requirements, principally relating to the nature of our income, the level of our distributions, and other factors. We earn revenue principally by leasing the properties we own to single corporate tenants, primarily on a triple-net lease basis, which requires the tenant to pay substantially all of the costs associated with operating and maintaining the property. Revenue is subject to fluctuation primarily because of the timing of new lease transactions, lease terminations, lease expirations, contractual rent adjustments, tenant defaults, and sales of properties.

At June 30, 2013, our portfolio was comprised of our full or partial ownership interests in 488 properties, substantially all of which were triple-net leased to 141 tenants, and totaled approximately 46 million square feet, with an occupancy rate of approximately 97.9%. In addition, our portfolio contained our ownership interests in two hotel properties, which had an aggregate carrying value of $68.1 million at June 30, 2013.

On May 2, 2011, Corporate Property Associates 14 Incorporated (“CPA®:14”) merged with and into CPA 16 Merger Sub, Inc. (“CPA 16 Merger Sub”), one of our wholly-owned subsidiaries (the “Merger”). Following the consummation of the Merger, we implemented an internal reorganization pursuant to which we were reorganized as an umbrella partnership real estate investment trust (the “UPREIT Reorganization”) to hold substantially all of our assets and liabilities in CPA 16 LLC (the “Operating Partnership”), a Delaware limited liability company subsidiary (Note 3). At June 30, 2013, we owned 99.985% of general and limited partnership interests in the Operating Partnership. The remaining 0.015% interest in the Operating Partnership is held by a subsidiary of WPC.

On July 25, 2013, we and WPC entered into a merger agreement pursuant to which we will merge with and into one of WPC’s subsidiaries and CPA®:16 – Global’s stockholders will receive shares of WPC common stock as merger consideration, based on a fixed value of $11.25 per share, subject to a pricing collar, as discussed further in Note 14 (the “Proposed Merger”).

Note 2. Basis of Presentation

Our interim consolidated financial statements have been prepared, without audit, in accordance with the instructions to Form 10-Q and, therefore, do not necessarily include all information and footnotes necessary for a fair statement of our consolidated financial position, results of operations, and cash flows in accordance with accounting principles generally accepted in the U.S. (“GAAP”).

In the opinion of management, the unaudited financial information for the interim periods presented in this Report reflects all normal and recurring adjustments necessary for a fair statement of results of operations, financial position, and cash flows. Our interim consolidated financial statements should be read in conjunction with our audited consolidated financial statements and accompanying notes for the year ended December 31, 2012, which are included in the 2012 Annual Report, as certain disclosures that would substantially duplicate those contained in the audited consolidated financial statements have not been included in this Report. Operating results for interim periods are not necessarily indicative of operating results for an entire fiscal year.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and the disclosure of contingent amounts in our consolidated financial statements and the accompanying notes.

Actual results could differ from those estimates. The unaudited consolidated financial statements included in this Report have been retrospectively adjusted to reflect the disposition (or planned disposition) of certain properties as discontinued operations for all periods presented.

Basis of Consolidation

The consolidated financial statements reflect all of our accounts, including those of our controlled subsidiaries and our tenancy-in-common interests, as described below. The portion of equity in a consolidated subsidiary that is not attributable, directly or indirectly, to us is presented as noncontrolling interests. All significant intercompany accounts and transactions have been eliminated.

CPA®:16 – Global 6/30/2013 10-Q — 7

Notes to Consolidated Financial Statements

We have investments in tenancy-in-common interests in various domestic and international properties. Consolidation of these investments is not required as such interests do not qualify as VIEs and do not meet the control requirement required for consolidation. Accordingly, we account for these investments using the equity method of accounting. We use the equity method of accounting because the shared decision-making involved in a tenancy-in-common interest investment provides us with significant influence on the operating and financial decisions of these investments.

Additionally, we own interests in single-tenant net leased properties leased to companies through noncontrolling interests in partnerships and limited liability companies that we do not control but over which we exercise significant influence. We account for these investments under the equity method of accounting. At times, the carrying value of our equity investments may fall below zero for certain investments. We intend to fund our share of the jointly-owned investments’ future operating deficits should the need arise. However, we have no legal obligation to pay for any of the liabilities of such investments nor do we have any legal obligation to fund operating deficits.

We apply accounting guidance for consolidation of VIEs to certain entities in which the equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. Fixed price purchase and renewal options within a lease as well as certain decision-making rights within a loan can cause us to consider an entity a VIE.

Information about International Geographic Areas

At the end of the reporting period, our international investments were comprised of investments in Europe (primarily Germany), Canada, Mexico, Malaysia, and Thailand. Foreign currency exposure and risk management are discussed in Note 9. The following tables present information about these investments (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2013		2012		2013		2012
Revenues	$	25,798	$	27,615	$	51,684	$	56,494
Income from continuing operations before income taxes	5,777		11,514		10,178		18,893
Net income attributable to CPA®:16 – Global stockholders (a)	3,741		7,977		2,217		12,911

	June 30, 2013		December 31, 2012
Net investments in real estate	$	952,011	$	979,503
Non-recourse debt	683,826		705,563

__________

(a)Excludes income attributable to noncontrolling interests of $0.6 million and $1.3 million for the three months ended June 30, 2013 and 2012, respectively, and income attributable to noncontrolling interests of $1.1 million and loss attributable to noncontrolling interests of less than $0.1 million for the six months ended June 30, 2013 and 2012, respectively.

New Accounting Requirements

The following Accounting Standards Updates (“ASUs”) promulgated by the Financial Accounting Standards Board (“FASB”) are applicable to us as indicated:

ASU 2013-01, Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities — In January 2013, the FASB issued an update to ASU 2011-11, Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities. ASU 2013-01 clarifies that the scope of ASU 2011-11 applies to derivatives accounted for in accordance with Topic 815, Derivatives and Hedging, including bifurcated embedded derivatives, repurchase agreements and reverse repurchase agreements, and securities borrowing and securities lending transactions that are either offset in accordance with Section 210-20-45 or Section 815-10-45 or subject to an enforceable master netting or similar arrangement. These amendments did not have a significant impact on our financial position or results of operations and are applicable to us for our interim and annual reports beginning in 2013 and has been applied retrospectively.

ASU 2013-02, Other Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income — In February 2013, the FASB issued ASU 2013-02 requiring entities to disclose additional information

CPA®:16 – Global 6/30/2013 10-Q — 8

Notes to Consolidated Financial Statements

about items reclassified out of accumulated other comprehensive income. This ASU impacts the form of our disclosures only, is applicable to us for our interim and annual reports beginning in 2013, and has been applied retrospectively. The related additional disclosures are located in Note 12.

ASU 2013-04, Liabilities (Topic 405): Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation is Fixed at the Reporting Date, a Consensus of the FASB Emerging Issues Task Force — In February 2013, the FASB issued ASU 2013-04, which requires entities to measure obligations resulting from joint and several liability arrangements (in our case, tenancy-in-common arrangements, Note 6) for which the total amount of the obligation is fixed as the sum of the amount the entity agreed to pay on the basis of its arrangement among its co-obligors and any additional amount the reporting entity expects to pay on behalf of its co-obligors. This ASU is applicable to us for our interim and annual reports beginning in 2014 and shall be applied retrospectively; however, we elected to adopt this ASU early in 2013 and it did not have a significant impact on our financial position or results of operations for any of the periods presented.

ASU 2013-10, Derivatives and Hedging (Topic 815): Inclusion of the Fed Funds Effective Swap Rate (or Overnight Index Swap Rate) as a Benchmark Interest Rate for Hedge Accounting Purposes, a Consensus of the FASB Emerging Issues Task Force — In July 2013, the FASB issued ASU 2013-10, which permits the Fed Funds Effective Swap Rate, also referred to as the “Overnight Index Swap Rate,” to be used as a U.S. benchmark interest rate for hedge accounting purposes under Topic 815, in addition to the U.S. government and London Interbank Offered Rate (“LIBOR”) swap rate. The update also removes the restriction on the use of different benchmark rates for similar hedges. This ASU will be applicable to us for qualifying new or redesignated hedging relationships entered into on or after July 17, 2013.

CPA®:16 – Global 6/30/2013 10-Q — 9

Notes to Consolidated Financial Statements

Note 3. Agreements and Transactions with Related Parties

Transactions with the Advisor

We have an advisory agreement with the advisor whereby the advisor performs certain services for us under a fee arrangement. On September 28, 2012, we entered into an amended and restated advisory agreement, as described below. The fee structure related to asset management fees, initial acquisition fees, subordinated acquisition fees, and subordinated disposition fees remains unchanged, and the advisor remains entitled to 10% of the available cash of the Operating Partnership (the “Available Cash Distribution”), as described below. We also have certain agreements with affiliates regarding jointly-owned investments. The following tables present a summary of fees we paid and expenses we reimbursed to the advisor in accordance with the advisory agreement (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2013		2012		2013		2012
Amounts Included in the Consolidated Statements of Income:
Asset management fees	$	4,465	$	4,597	$	8,963	$	9,297
Available Cash Distribution	3,830		3,598		7,444		7,879
Personnel reimbursements	1,786		1,686		5,161		3,312
Office rent reimbursements	450		314		829		624
	$	10,531	$	10,195	$	22,397	$	21,112
Other Transaction Fees Incurred:
Current acquisition fees	$	122	$	-	$	122	$	-
Deferred acquisition fees	97		-		97		-
Mortgage refinancing fees	-		420		-		420
	$	219	$	420	$	219	$	420
					June 30, 2013		December 31, 2012
Unpaid Transaction Fees:
Deferred acquisition fees					$	1,309	$	1,757
Subordinated disposition fees					1,197		1,197
					$	2,506	$	2,954

Asset Management Fees

We pay the advisor asset management fees, which are 0.5% per annum of our average invested assets and are computed as provided for in the advisory agreement. The asset management fees are payable in cash or shares of our common stock at the advisor’s option. If the advisor elects to receive all or a portion of its fees in shares, the number of shares issued is determined by dividing the dollar amount of fees by our most recently published net asset value per share (“NAV”) as approved by our board of directors. For 2013, the advisor elected to receive its asset management fees in shares of our common stock whereas in 2012 the advisor elected to receive 50% of its asset management fees in cash and 50% in shares of our common stock. Asset management fees are included in Property expenses in the consolidated financial statements.

Available Cash Distribution

In connection with the UPREIT Reorganization, a subsidiary of WPC (the “Special General Partner”) acquired a special membership interest (“Special Member Interest”) of 0.015% in the Operating Partnership entitling it to receive the Available Cash Distribution, which is measured and paid quarterly in either cash or shares of our common stock, at the advisor’s election. The Available Cash Distribution is defined as cash generated from operations, excluding capital proceeds, as reduced by operating expenses and debt service, excluding prepayments and balloon payments. The Available Cash Distribution is contractually limited to 0.5% of our assets excluding cash, cash equivalents, and certain short-term investments and non-cash reserves. In the event of a capital transaction such as a sale, exchange, disposition, or refinancing of our net assets, the Special General Partner may also be entitled to receive a

CPA®:16 – Global 6/30/2013 10-Q — 10

Notes to Consolidated Financial Statements

distribution in an amount equal to 15% of the excess, if any, of the consideration generated by the capital transaction (net of costs and expenses) after our stockholders have received a return of their invested capital plus a 6% priority return (Note 14).

Personnel and Office Rent Reimbursements

We entered into an amended and restated advisory agreement, which is scheduled to renew annually. As amended, the advisory agreement provides for the allocation of the advisor’s personnel expenses on the basis of our trailing four quarters of reported revenues and those of WPC and the other publicly-owned, non-listed REITs, which are managed by our advisor under the Corporate Property Associates brand name (the “CPA REITs”), rather than on an allocation of time charges incurred by the advisor’s personnel on behalf of the CPA REITs.

We reimburse the advisor for various expenses it incurs in the course of providing services to us. We reimburse certain third-party expenses paid by the advisor on our behalf, including property-specific costs, professional fees, office expenses, and business development expenses. In addition, we reimburse the advisor for the allocated costs of personnel and overhead in managing our day-to-day operations, including accounting services, stockholder services, corporate management, and property management and operations. We do not reimburse the advisor for the cost of personnel if these personnel provide services for transactions for which the advisor receives a transaction fee, such as acquisitions, dispositions, and refinancings. Personnel and office rent reimbursements are included in General and administrative expenses in the consolidated financial statements.

The advisor is obligated to reimburse us for the amount by which our operating expenses exceeds the “2%/25% guidelines” (the greater of 2% of average invested assets or 25% of net income) as defined in the advisory agreement for any 12-month period. If in any year our operating expenses exceed the 2%/25% guidelines, the advisor will have an obligation to reimburse us for such excess, subject to certain conditions. If our independent directors find that the excess expenses were justified based on any unusual and nonrecurring factors that they deem sufficient, the advisor may be paid in future years for the full amount or any portion of such excess expenses, but only to the extent that the reimbursement would not cause our operating expenses to exceed this limit in any such year. We will record any reimbursement of operating expenses as a liability until any contingencies are resolved and will record the reimbursement as a reduction of asset management fees at such time that a reimbursement is fixed, determinable, and irrevocable. Our operating expenses have not exceeded the amount that would require the advisor to reimburse us.

Transaction Fees

We pay the advisor acquisition fees for structuring and negotiating investments and related mortgage financing on our behalf. Acquisition fees are 4.5% or less of the aggregate cost of investments acquired and are comprised of a current portion of 2.5%, which is paid at the date the property is purchased, and a deferred portion of 2%, which is payable in equal annual installments each January of the three calendar years following the date on which a property was purchased, subject to satisfying the 6% performance criterion. Interest is accrued on unpaid installments of the deferred portion at 5% per year. Current and deferred acquisition fees are capitalized and included in the cost basis of the assets acquired. Mortgage refinancing fees, which are paid at the discretion of our board of directors, equal up to 1% of the principal and are capitalized to deferred financing costs and amortized over the life of the new loans.

We also pay fees to the advisor for services provided to us in connection with the disposition of investments. These fees, which are paid at the discretion of our board of directors, and which are subordinated to the performance criterion and certain other provisions included in the advisory agreement, are deferred and are payable to the advisor only in connection with a liquidity event (Note 14).

Jointly-Owned Investments and Other Transactions with Affiliates

We share with our affiliates leased office space used for the administration of our operations. Rental, occupancy, and leasehold improvement costs are allocated among us and our affiliates based on our respective gross revenues and are adjusted quarterly.

We own interests ranging from 25% to 90% in jointly-owned investments, with the remaining interests generally held by affiliates. We consolidate certain of these investments and account for the remainder under the equity method of accounting. We also own interests in jointly-controlled tenancy-in-common interests in properties, which we account for under the equity method of accounting.

At June 30, 2013, the advisor owned 38,060,964 shares, or 18.6%, of our common stock, which excluded its ownership in the Special Member Interest.

CPA®:16 – Global 6/30/2013 10-Q — 11

Notes to Consolidated Financial Statements

Note 4. Net Investments in Properties

Real Estate

Real estate, which consists of land and buildings leased to others under operating leases and are carried at cost, is summarized as follows (in thousands):

	June 30, 2013			December 31, 2012
Land	$	453,191		$	470,809
Buildings	1,734,414			1,772,661
Less: Accumulated depreciation	(263,362		)	(242,648		)
	$	1,924,243		$	2,000,822

Acquisition

During the six months ended June 30, 2013, we entered into one domestic investment for an industrial and office facility, which was deemed to be a real estate asset acquisition because we entered into a new lease with the seller, at a cost of $4.9 million, including net lease intangible assets of $0.7 million (Note 7) and acquisition-related costs and fees of $0.2 million, which were capitalized.

During this period, the U.S. dollar strengthened against the euro, as the end-of-period rate for the U.S. dollar in relation to the euro at June 30, 2013 decreased by 1.6% to $1.3013 from $1.3218 at December 31, 2012. The impact of this strengthening was an $11.0 million decrease in the carrying value of Real estate from December 31, 2012 to June 30, 2013. Assets disposed of and reclassified as held-for-sale during the six months ended June 30, 2013 also accounted for a significant portion of the decrease in real estate and are discussed in Note 13.

Operating Real Estate

Operating real estate, which consists of our two hotel operations, at cost, is summarized as follows (in thousands):

	June 30, 2013			December 31, 2012
Land	$	8,296		$	8,296
Buildings	68,616			68,505
Furniture, fixtures, and equipment	8,899			8,764
Less: Accumulated depreciation	(17,688		)	(16,007		)
	$	68,123		$	69,558

Note 5. Finance Receivables

Assets representing rights to receive money on demand or at fixed or determinable dates are referred to as finance receivables. Our finance receivable portfolios consist of our Net investments in direct financing leases and Notes receivable.

Notes Receivable

Hellweg 2

Under the terms of the note receivable acquired in connection with the April 2007 investment in which we and our affiliates acquired a property-owning entity that in turn acquired a 24.7% ownership interest in a limited partnership and a lending entity that made a loan (“the note receivable”) to the holder of the remaining 75.3% interests in the limited partnership (“Hellweg 2 transaction”), the lending entity will receive interest at a fixed annual rate of 8%. The note receivable matures in April 2017. The note receivable had a principal balance of $21.4 million and $21.7 million, inclusive of our affiliates’ noncontrolling interest of $15.9 million and $16.1 million, at June 30, 2013 and December 31, 2012, respectively.

CPA®:16 – Global 6/30/2013 10-Q — 12

Notes to Consolidated Financial Statements

Production Resource Group, LLC

In January 2012, we restructured our lease with Production Resource Group, LLC (“PRG”) so as to extend the lease term to June 2029 and also give PRG the option to purchase the property at predetermined dates and prices during the lease term. If PRG does not exercise its purchase option during the term of the lease, the property transfers to the tenant for $1 at the end of the lease term. The restructured lease was accounted for as a sales-type lease due to the automatic transfer of title at the end of the lease. In addition, because the minimum initial and continuing investment criteria were not met at the inception of the sales-type lease, the sale of the asset was accounted for under the deposit method. At the time of the restructuring, the property was not derecognized and all periodic cash payments received under the lease were carried on the balance sheet as a deposit liability until approximately 5% of the purchase price had been collected. By October 2012, the aggregate cash payments received crossed the 5% threshold, and accordingly we derecognized the property and recognized a gain of $0.1 million. We also recognized a note receivable, which had a balance of $11.7 million and $11.8 million at June 30, 2013 and December 31, 2012, respectively, to reflect the expected future payments under the lease. The remaining deferred gain of $3.8 million as of June 30, 2013 will be recognized into income in proportion to the principal payments on the note until we have received 20% of the purchase price. At that time, the full gain will be recognized.

Other

We had a B-note receivable that totaled $9.9 million and $9.8 million at June 30, 2013 and December 31, 2012, respectively, with a fixed annual interest rate of 6.3% and a maturity date of February 11, 2015.

Credit Quality of Finance Receivables

We generally seek investments in facilities that we believe are critical to each tenant’s business and that we believe have a low risk of tenant defaults. During the three and six months ended June 30, 2013, we established an allowance for credit losses of $9.4 million on several properties due to a decline in the estimated amount of future payments we will receive from the respective tenants, including the early termination of the direct financing leases. At June 30, 2013 and December 31, 2012, none of the balances of our finance receivables were past due. Our allowance for uncollected accounts was less than $0.1 million and $0.2 million at June 30, 2013 and December 31, 2012, respectively. Additionally, there have been no modifications of finance receivables during the six months ended June 30, 2013. We evaluate the credit quality of our tenant receivables utilizing an internal 5-point credit rating scale, with 1 representing the highest credit quality and 5 representing the lowest. The credit quality evaluation of our tenant receivables was last updated in the second quarter of 2013.

A summary of our finance receivables by internal credit quality rating for the periods presented is as follows (dollars in thousands):

	Number of Tenants at		Net Investments in Direct Financing Leases at
Internal Credit Quality Indicator	June 30, 2013	December 31, 2012	June 30, 2013		December 31, 2012
1	1	1	$	43,033	$	43,213
2	-	2	-		35,197
3	13	13	227,129		230,527
4	9	7	178,106		152,902
5	1	1	2,430		5,992
			$	450,698	$	467,831

	Number of Obligors at		Notes Receivable at
Internal Credit Quality Indicator	June 30, 2013	December 31, 2012	June 30, 2013		December 31, 2012
1	-	-	$	-	$	-
2	1	1	9,863		9,836
3	2	2	33,077		33,558
4	-	-	-		-
5	-	-	-		-
			$	42,940	$	43,394

CPA®:16 – Global 6/30/2013 10-Q — 13

Notes to Consolidated Financial Statements

Note 6. Equity Investments in Real Estate

We own equity interests in single-tenant net leased properties that are generally leased to companies through noncontrolling interests (i) in partnerships and limited liability companies that we do not control but over which we exercise significant influence or (ii) as tenants-in-common subject to common control. Generally, the underlying investments are jointly-owned with affiliates. We account for these investments under the equity method of accounting (i.e., at cost, increased or decreased by our share of earnings or losses, less distributions, plus contributions and other adjustments required by equity method accounting, such as basis differences from other-than-temporary impairments). Investments in unconsolidated investments are required to be evaluated periodically. We periodically compare an investment’s carrying value to its estimated fair value and recognize an impairment charge to the extent that the carrying value exceeds fair value and such decline is determined to be other than temporary.

The following table sets forth our ownership interests in our equity investments in real estate and their respective carrying values (dollars in thousands):

	Ownership Interest	Carrying Value at
Lessee	at June 30, 2013	June 30, 2013			December 31, 2012
True Value Company (a) (b) (c)	50%	$		39,522	$		43,100
The New York Times Company (d) (e)	27%	35,334			34,579
U-Haul Moving Partners, Inc. and Mercury Partners, LP (d) (f)	31%	30,539			30,932
Advanced Micro Devices, Inc. (a) (g) (h)	67%	26,871			28,619
Hellweg Die Profi-Baumärkte GmbH & Co. KG (Hellweg 1) (a) (i)	25%	21,303			20,837
Schuler A.G. (a) (h) (i)	33%	21,237			21,178
The Upper Deck Company (a)	50%	8,311			7,998
Frontier Spinning Mills, Inc. (j)	40%	6,335			6,265
Del Monte Corporation (a) (h)	50%	4,942			5,580
Police Prefecture, French Government (a) (i)	50%	4,680			5,010
Actebis Peacock GmbH (i) (j)	30%	4,515			4,477
TietoEnator Plc (a) (i)	40%	4,076			3,895
Barth Europa Transporte e.K/MSR Technologies GmbH (a) (i)	33%	3,011			3,219
Town Sports International Holdings, Inc. (a)	56%	2,928			3,203
Actuant Corporation (a) (i)	50%	2,777			2,711
OBI A.G. (a) (i) (k)	25%	2,122			1,819
Consolidated Systems, Inc. (a) (h)	40%	1,966			2,004
Arelis Broadcast, Veolia Transport, and Marchal Levage (formerly Thales S.A.) (a) (i)	35%	1,045			1,606
Pohjola Non-life Insurance Company (a) (i)	40%	713			190
Talaria Holdings, LLC (l)	27%	-			453
		$	222,227			$		227,675

__________

(a)This investment is jointly-owned with WPC.

(b)In January 2013, the investment repaid three mortgage loans encumbering seven of its properties totaling $64.8 million, of which our share was $32.4 million. Additionally, the investment obtained new non-recourse mortgage financing encumbering six of its properties with proceeds totaling $62.5 million, of which our share was $31.3 million.

(c)We received distributions of $2.6 million and $2.2 million from this investment during the six months ended June 30, 2013 and 2012, respectively.

(d)This investment is jointly-owned with WPC and Corporate Property Associates 17 – Global Incorporated (“CPA®:17 – Global”), one of the CPA REITs.

(e)We received distributions of $2.5 million and $2.3 million from this investment during the six months ended June 30, 2013 and 2012.

(f)We received distributions of $2.7 million from this investment during both the six months ended June 30, 2013 and 2012.

(g)We received distributions of $2.5 million from this investment during both the six months ended June 30, 2013 and 2012.

(h)These investments are considered tenancy-in-common interests, whereby the property is encumbered by debt for which we are jointly and severally liable. For these investments, the co-obligor is WPC and the aggregate amount due under the arrangements is

CPA®:16 – Global 6/30/2013 10-Q — 14

Notes to Consolidated Financial Statements

approximately $76.3 million. Of this amount, $46.3 million represents the amount we agreed to pay and is included within the carrying value of these investments.

(i)The carrying value of this investment is affected by the impact of fluctuations in the exchange rate of the euro.

(j)This investment is jointly-owned with CPA®:17 – Global.

(k)This increase was primarily due to the investment’s share of other comprehensive income recognized on interest rate swap derivative instruments.

(l)This decrease reflects losses recorded by the investment during the six months ended June 30, 2013.

We recognized net income from equity investments in real estate of $6.1 million and $5.4 million for the three months ended June 30, 2013 and 2012, respectively, and $11.6 million and $13.0 million for the six months ended June 30, 2013 and 2012, respectively. Net income from equity investments in real estate represents our proportionate share of the income or losses of these investments as well as certain depreciation and amortization adjustments related to other-than-temporary impairment charges and basis differentials from acquisitions of certain investments.

Note 7. Intangible Assets and Liabilities

In connection with our acquisitions of properties, we have recorded net lease intangibles, which are being amortized over periods ranging from four years to 40 years. In-place lease intangibles are included in In-place lease intangible assets, net in the consolidated financial statements. Tenant relationship, above-market rent, below-market ground lease, management contract, and franchise agreement intangibles are included in Other intangible assets, net in the consolidated financial statements. Below-market rent intangibles are included in Prepaid and deferred rental income and security deposits in the consolidated financial statements.

In connection with our investment activity during the six months ended June 30, 2013, we have recorded intangibles as follows (life in years, dollars in thousands):

	Life	Amount
Amortizable Intangible Assets
Lease intangibles:
In-place lease	13.5	$	700
Amortizable Intangible Liabilities
Below-market rent	13.5	$	(41	)

Intangible assets and liabilities are summarized as follows (in thousands):

	June 30, 2013									December 31, 2012
	Gross Carrying Amount			Accumulated Amortization			Net Carrying Amount			Gross Carrying Amount			Accumulated Amortization			Net Carrying Amount
Amortizable Intangible Assets
Management contract	$	874		$	(718	)	$	156		$	874		$	(645	)	$	229
Franchise agreement	2,240			(1,289		)	951			2,240			(1,157		)	1,083
	3,114			(2,007		)	1,107			3,114			(1,802		)	1,312
Lease intangibles:
In-place lease	347,579			(114,066		)	233,513			361,242			(101,122		)	260,120
Tenant relationship	32,602			(7,862		)	24,740			33,615			(7,544		)	26,071
Above-market rent	189,230			(54,437		)	134,793			195,985			(46,688		)	149,297
Below-market ground lease	6,644			(489		)	6,155			6,752			(460		)	6,292
	576,055			(176,854		)	399,201			597,594			(155,814		)	441,780
Total intangible assets	$	579,169		$	(178,861	)	$	400,308		$	600,708		$	(157,616	)	$	443,092
Amortizable IntangibleLiabilities
Below-market rent	$	(64,379	)	$	14,126		$	(50,253	)	$	(65,148	)	$	13,001		$	(52,147	)
Total intangible liabilities	$	(64,379	)	$	14,126		$	(50,253	)	$	(65,148	)	$	13,001		$	(52,147	)

CPA®:16 – Global 6/30/2013 10-Q — 15

Notes to Consolidated Financial Statements

Net amortization of intangibles, including the effect of foreign currency translation, was $12.5 million and $13.1 million for the three months ended June 30, 2013 and 2012, respectively, and $25.1 million and $26.8 million for the six months ended June 30, 2013 and 2012, respectively. Amortization of above-market rent, below-market rent, and below-market ground lease intangibles is recorded as an adjustment to Lease revenues, while amortization of management contract, franchise agreement, in-place lease, and tenant relationship intangibles is included in Depreciation and amortization.

Based on the intangible assets and liabilities recorded at June 30, 2013, scheduled annual net amortization of intangibles for the remainder of 2013, each of the next four calendar years following December 31, 2013, and thereafter is as follows (in thousands):

Years Ending December 31,	Total
2013 (remainder)	$	29,948
2014	53,736
2015	46,032
2016	39,612
2017	36,275
Thereafter	144,452
Total	$	350,055

Note 8. Fair Value Measurements

The fair value of an asset is defined as the exit price, which is the amount that would either be received when an asset is sold or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The guidance establishes a three-tier fair value hierarchy based on the inputs used in measuring fair value. These tiers are: Level 1, for which quoted market prices for identical instruments are available in active markets, such as money market funds, equity securities, and U.S. Treasury securities; Level 2, for which there are inputs other than quoted prices included within Level 1 that are observable for the instrument, such as certain derivative instruments including interest rate caps and swaps; and Level 3, for securities that do not fall into Level 1 or Level 2 and for which little or no market data exists, therefore requiring us to develop our own assumptions.

Items Measured at Fair Value on a Recurring Basis

The methods and assumptions described below were used to estimate the fair value of each class of financial instrument. For significant Level 3 items we have also provided the unobservable inputs along with their weighted-average ranges.

Derivative Assets — Our derivative assets are comprised of foreign currency forward contracts, interest rate swaps, and an interest rate cap, as well as stock warrants that were granted to us by lessees in connection with structuring initial lease transactions (Note 9). These assets are included in Other assets, net in the consolidated financial statements. The foreign currency forward contracts, interest rate swaps, and interest rate cap were measured at fair value using readily observable market inputs, such as quotations on interest rates and were classified as Level 2 as these instruments are custom, over-the-counter contracts with various bank counterparties that are not traded in an active market. Our stock warrants are not traded in an active market. We estimated the fair value of these assets using internal valuation models that incorporate market inputs and our own assumptions about future cash flows. We classified these assets as Level 3.

Derivative Liabilities — Our derivative liabilities are comprised of interest rate swaps and foreign currency forward contracts and are included in Accounts payable, accrued expenses, and other liabilities in the consolidated financial statements (Note 9). These derivative instruments were measured at fair value using readily observable market inputs, such as quotations on interest rates. These derivative instruments were classified as Level 2 as these instruments are custom, over-the-counter contracts with various bank counterparties that are not traded in an active market.

CPA®:16 – Global 6/30/2013 10-Q — 16

Notes to Consolidated Financial Statements

Our other financial instruments had the following carrying values and fair values as of the dates shown (in thousands):

		June 30, 2013				December 31, 2012
	Level	Carrying Value		Fair Value		Carrying Value		Fair Value
Non-recourse debt (a)	3	$	1,608,289	$	1,598,219	$	1,644,180	$	1,656,684
Line of credit (a)	3	95,000		94,500		143,000		143,000
Notes receivable (a)	3	42,940		43,698		43,394		44,363

__________

(a)We determined the estimated fair value of our other financial instruments using a discounted cash flow model with rates that take into account the credit of the tenant/obligor and interest rate risk. We also considered the value of the underlying collateral, taking into account the quality of the collateral, the credit quality of the tenant/obligor, the time until maturity, and the current market interest rate.

We estimated that our remaining financial assets and liabilities (excluding net investments in direct financing leases) had fair values that approximated their carrying values at both June 30, 2013 and December 31, 2012.

Items Measured at Fair Value on a Non-Recurring Basis (Including Impairment Charges)

We periodically assess whether there are any indicators that the value of our real estate investments may be impaired or that their carrying value may not be recoverable. For investments in real estate for which an impairment indicator is identified, we follow a two-step process to determine whether an investment is impaired and the amount of the charge. First, we compare the carrying value of the property’s asset group to the future undiscounted net cash flows that we expect the property’s asset group will generate, including any estimated proceeds from the eventual sale of the property’s asset group. If this amount is less than the carrying value, the property’s asset group is considered to be impaired, and we then measure the loss as the excess of the carrying value of the property’s asset group over the estimated fair value of the property’s asset group, which is primarily determined using market information such as recent comparable sales or broker quotes. If relevant market information is not available or is not deemed appropriate, we perform a future net cash flow analysis discounted for inherent risk associated with each investment. We determined that the significant inputs used to value these investments fall within Level 3 for fair value accounting. As a result of our assessments, we calculated impairment charges based on market conditions and assumptions that existed at the time. The valuation of real estate is subject to significant judgment and actual results may differ materially if market conditions or the underlying assumptions change.

CPA®:16 – Global 6/30/2013 10-Q — 17

Notes to Consolidated Financial Statements

The following tables present information about our assets that were measured on a fair value basis (in thousands):

	Three Months Ended June 30, 2013				Three Months Ended June 30, 2012
			Total Impairment				Total Impairment
	Total Fair Value		Charges or Allowance		Total Fair Value		Charges or Allowance
	Measurements		for Credit Losses		Measurements		for Credit Losses
Net investments in properties (a)	$	14,259	$	3,036	$	-	$	-
Net investments in direct financing leases (b)	29,346		9,358		-		-
Total impairment charges or allowance for credit losses included in expenses	43,605		12,394		-		-
Total impairment charges or allowance for credit losses included in income from continuing operations	43,605		12,394		-		-
Impairment charges included in discontinued operations	-		-		-		-
Total impairment charges	$	43,605	$	12,394	$	-	$	-

	Six Months Ended June 30, 2013				Six Months Ended June 30, 2012
			Total Impairment				Total Impairment
	Total Fair Value		Charges or Allowance		Total Fair Value		Charges or Allowance
	Measurements		for Credit Losses		Measurements		for Credit Losses
Net investments in properties (a)	$	14,259	$	3,036	$	-	$	-
Net investments in direct financing leases (b)	29,346		9,358		-		10
Total impairment charges or allowance for credit losses included in expenses	43,605		12,394		-		10
Total impairment charges or allowance for credit losses included in income from continuing operations	43,605		12,394		-		10
Impairment charges included in discontinued operations (c)	8,730		9,313		4,200		485
Total impairment charges	$	52,335	$	21,707	$	4,200	$	495

__________

(a)The fair value measurement related to the impairment charge recognized during the three and six months ended June 30, 2013 was developed from a purchase and sale agreement for the potential sale of several properties leased to one tenant that has not yet been consummated.

(b)The fair value measurements incorporate the allowance for credit losses recorded during the three and six months ended June 30, 2013 were based on management’s estimate of the collectability of future payments from the respective tenants.

(c)The fair value measurement related to the impairment charge recognized on one property during the six months ended June 30, 2013 was developed by a third-party, subject to our corroboration for reasonableness. The third-party utilized local average rent rates for the previous five years and sales of comparable properties to determine a fair value range of $75-$85 per square foot.

CPA®:16 – Global 6/30/2013 10-Q — 18

Notes to Consolidated Financial Statements

Significant impairment charges, and their related triggering events, recognized during the three and six months ended June 30, 2013 and 2012 were as follows:

Real Estate

2013 — During both the three and six months ended June 30, 2013, we recognized impairment charges totaling $3.0 million, inclusive of amounts attributable to noncontrolling interests of $0.9 million, on several properties leased to one tenant in order to reduce their carrying values to their estimated fair values based on a change in our estimated holding period during the second quarter of 2013 due to a potential sale of the properties. There is no guarantee that the sale will occur.

Direct Financing Leases

2013 — During both the three and six months ended June 30, 2013, we recorded an allowance for credit losses totaling $9.4 million, inclusive of amounts attributable to noncontrolling interests of $1.7 million, on several properties accounted for as Net investments in direct financing leases due to a decline in the estimated amount of future payments we will receive from the respective tenants, including the early termination of the direct financing leases (Note 5).

Properties Sold

2013 — During the six months ended June 30, 2013, we recognized an impairment charge of $9.3 million on a property in order to reduce its carrying value to its estimated fair value due to the property’s tenant filing for bankruptcy during the first quarter of 2013 (Note 13). Because a market participant would likely not have ascribed any value to the tenant’s lease, the fair value of the property reflected the value as if it were vacant. The results of operations for this property are included in Income (loss) from discontinued operations, net of tax in the consolidated financial statements.

2012 — During the six months ended June 30, 2012, we recognized an impairment charge of $0.5 million on a property in order to reduce its carrying value to its estimated fair value due to the tenant vacating the property. The property was subsequently sold in June 2012. The results of operations for this property are included in Income (loss) from discontinued operations, net of tax in the consolidated financial statements.

Note 9. Risk Management and Use of Derivative Financial Instruments

Risk Management

In the normal course of our ongoing business operations, we encounter economic risk. There are three main components of economic risk that impact us: interest rate risk, credit risk, and market risk. We are primarily subject to interest rate risk on our interest-bearing assets and liabilities, including our secured credit agreement (the “Line of Credit,” Note 10). Credit risk is the risk of default on our operations and our tenants’ inability or unwillingness to make contractually required payments. Market risk includes changes in the value of our properties and related loans as well as changes in the value of our other investments due to changes in interest rates or other market factors. In addition, we own investments outside the U.S. and are subject to the risks associated with changing foreign currency exchange rates.

Use of Derivative Financial Instruments

When we use derivative instruments, it is generally to reduce our exposure to fluctuations in interest rates and foreign currency exchange rate movements. We have not entered, and do not plan to enter, into financial instruments for trading or speculative purposes. In addition to derivative instruments that we entered into on our own behalf, we may also be a party to derivative instruments that are embedded in other contracts, and we may own common stock warrants, granted to us by lessees when structuring lease transactions, which are considered to be derivative instruments. The primary risks related to our use of derivative instruments include default by a counterparty to a hedging arrangement on its obligation and a downgrade in the credit quality of a counterparty to such an extent that our ability to sell or assign our side of the hedging transaction is impaired. While we seek to mitigate these risks by entering into hedging arrangements with counterparties that are large financial institutions that we deem to be creditworthy, it is possible that our hedging transactions, which are intended to limit losses, could adversely affect our earnings. Furthermore, if we terminate a hedging arrangement, we may be obligated to pay certain costs, such as transaction or breakage fees. We have established policies and procedures for risk assessment and the approval, reporting, and monitoring of derivative financial instrument activities.

CPA®:16 – Global 6/30/2013 10-Q — 19

Notes to Consolidated Financial Statements

We measure derivative instruments at fair value and record them as assets or liabilities, depending on our rights or obligations under the applicable derivative contract. Derivatives that are not designated as hedges must be adjusted to fair value through earnings. For a derivative designated and that qualified as a cash flow hedge, the effective portion of the change in fair value of the derivative is recognized in Other comprehensive income (loss) until the hedged item is recognized in earnings. The ineffective portion of a derivative’s change in fair value is immediately recognized in earnings.

The following table sets forth certain information regarding our derivative instruments (in thousands):

Derivatives Designated		Asset Derivatives Fair Value at				Liability Derivatives Fair Value at
as Hedging Instruments	Balance Sheet Location	June 30, 2013		December 31, 2012		June 30, 2013		December 31, 2012
Foreign currency contracts	Other assets, net	$	69	$	172	$	-	$	-
Foreign currency contracts	Accounts payable,
	accrued expenses and
	other liabilities	-		-		(1,086)		(2,361)
Interest rate cap	Other assets, net	131		36		-		-
Interest rate swaps	Other assets, net	255		-		-		-
Interest rate swaps	Accounts payable,
	accrued expenses and
	other liabilities	-		-		(3,248)		(5,411)
Derivatives Not Designated
as Hedging Instruments
Stock warrants	Other assets, net	1,350		1,161		-		-
Total derivatives		$	1,805	$	1,369	$	(4,334)	$	(7,772)

All derivative transactions with an individual counterparty are governed by a master International Swap and Derivatives Association agreement, which can be considered as a master netting arrangement; however, we report all our derivative instruments on a gross basis on the balance sheet. At June 30, 2013, no cash collateral has been posted nor received for any of our derivative positions.

The following tables present the impact of derivative instruments on the consolidated financial statements (in thousands):

	Amount of Gain (Loss) Recognized in
	Other Comprehensive Income (Loss) on Derivatives (Effective Portion)
	Three Months Ended June 30,				Six Months Ended June 30,
Derivatives in Cash Flow Hedging Relationships	2013		2012		2013		2012
Interest rate swaps	$	1,956	$	(1,193)	$	2,182	$	(1,145)
Interest rate cap	93		(103)		108		(570)
Foreign currency contracts	(1,268)		674		1,172		106
Total	$	781	$	(622)	$	3,462	$	(1,609)

	Amount of Gain (Loss) Reclassified from
	Other Comprehensive Income (Loss) into Income (Effective Portion)
	Three Months Ended June 30,				Six Months Ended June 30,
Derivatives in Cash Flow Hedging Relationships	2013		2012		2013		2012
Interest rate swaps (a)	$	336	$	284	$	660	$	525
Foreign currency contracts (b)	77		(340)		(201)		(488)
Total	$	413	$	(56)	$	459	$	37

__________

(a)During both the three months ended June 30, 2013 and 2012, we reclassified $0.1 million from Other comprehensive income (loss) into income related to ineffective portions of hedging relationships on certain interest rate swaps. During the six months ended June 30, 2013 and 2012, we reclassified $0.2 million and $0.1 million, respectively, from Other comprehensive income (loss) into income related to ineffective portions of hedging relationships on certain interest rate swaps.

CPA®:16 – Global 6/30/2013 10-Q — 20

Notes to Consolidated Financial Statements

(b)Gains (losses) reclassified from Other comprehensive income (loss) into income for contracts that have settled are included in Other income and (expenses).

See below for information on our purposes for entering into derivative instruments, including those not designated as hedging instruments, and for information on derivative instruments owned by unconsolidated investments, which are excluded from the tables above.

Interest Rate Swaps and Caps

We are exposed to the impact of interest rate changes primarily through our borrowing activities. To limit this exposure, we attempt to obtain mortgage financing on a long-term, fixed-rate basis. However, from time to time, we or our investment partners may obtain variable-rate non-recourse mortgage loans and, as a result, may enter into interest rate swap agreements or interest rate cap agreements with counterparties. Interest rate swaps, which effectively convert the variable-rate debt service obligations of the loan to a fixed rate, are agreements in which one party exchanges a stream of interest payments for a counterparty’s stream of cash flow over a specific period. The notional, or face, amount on which the swaps are based is not exchanged. Interest rate caps limit the effective borrowing rate of variable-rate debt obligations while allowing participants to share in downward shifts in interest rates. Our objective in using these derivatives is to limit our exposure to interest rate movements.

The interest rate swaps and caps that we had outstanding on our consolidated subsidiaries at June 30, 2013 that were designated as cash flow hedges are summarized as follows (currency in thousands):

		Notional		Cap	Contractual	Effective	Expiration	Fair Value at
Description	Type	Amount		Rate	Interest Rate	Date	Date	June 30, 2013
1-Month LIBOR	“Pay-fixed” swap	$	3,604	N/A	6.7%	2/2008	2/2018	$	(482)
1-Month LIBOR	“Pay-fixed” swap	$	11,101	N/A	5.6%	3/2008	3/2018	(1,290)
1-Month LIBOR	“Pay-fixed” swap	$	5,911	N/A	6.4%	7/2008	7/2018	(822)
1-Month LIBOR	“Pay-fixed” swap	$	3,775	N/A	6.9%	3/2011	3/2021	(393)
1-Month LIBOR	“Pay-fixed” swap	$	5,595	N/A	5.4%	11/2011	12/2020	(78)
1-Month LIBOR	“Pay-fixed” swap	$	5,813	N/A	4.9%	12/2011	12/2021	(8)
1-Month LIBOR	“Pay-fixed” swap	$	8,631	N/A	5.1%	3/2012	11/2019	(162)
3-Month Euro Interbank Offered Rate (“Euribor”) (a)	Interest rate cap	€	52,179	3.0%	N/A	4/2012	4/2017	131
1-Month LIBOR	“Pay-fixed” swap	$	1,925	N/A	4.6%	5/2012	11/2017	(12)
1-Month LIBOR	“Pay-fixed” swap	$	9,725	N/A	3.3%	6/2012	6/2017	(1)
1-Month LIBOR	“Pay-fixed” swap	$	9,819	N/A	1.6%	9/2012	10/2020	214
1-Month LIBOR	“Pay-fixed” swap	$	3,974	N/A	4.9%	2/2013	2/2023	41
								$	(2,862)

__________

(a)Fair value amount is based on the applicable exchange rate at June 30, 2013.

The interest rate swaps and caps that our unconsolidated jointly-owned investments had outstanding at June 30, 2013 and were designated as cash flow hedges are summarized as follows (currency in thousands):

	Ownership						Contractual
	Interest in Investee		Notional		Strike		Interest	Effective	Expiration	Fair Value at
Description	at June 30, 2013	Type	Amount		Price	Spread	Rate	Date	Date	June 30, 2013
3-Month Euribor (a)	25.0%	“Pay-fixed” swap	€	111,222	N/A	N/A	5.0%-5.6%	7/2006-4/2008	10/2015-7/2016	$	(13,043)
3-Month LIBOR	27.3%	Interest rate cap	$	117,481	4%	1.2%	N/A	8/2009	8/2014	-
3-Month Euribor (a)	35.0%	“Pay-fixed” swap	€	15,970	N/A	N/A	0.9%	4/2012	7/2013	(10)
										$	(13,053)

__________

(a)Fair value amounts are based on the applicable exchange rate at June 30, 2013.

CPA®:16 – Global 6/30/2013 10-Q — 21

Notes to Consolidated Financial Statements

Foreign Currency Contracts

We are exposed to foreign currency exchange rate movements, primarily in the euro and, to a lesser extent, certain other currencies. We manage foreign currency exchange rate movements by generally placing our debt service obligation on an investment in the same currency as the tenant’s rental obligation to us. This reduces our overall exposure to the net cash flow from that investment. However, we are subject to foreign currency exchange rate movements to the extent of the difference in the timing and amount of the rental obligation and the debt service. We may also face challenges with repatriating cash from our foreign investments. We may encounter instances where it is difficult to repatriate cash because of jurisdictional restrictions or because repatriating cash may result in current or future tax liabilities. Realized and unrealized gains and losses recognized in earnings related to foreign currency transactions are included in Other income and (expenses) in the consolidated financial statements.

In order to hedge certain of our foreign currency cash flow exposures, we enter into foreign currency forward contracts. A foreign currency forward contract is a commitment to deliver a certain amount of currency at a certain price on a specific date in the future. By entering into forward contracts and holding them to maturity, we are locked into a future currency exchange rate for the term of the contract. These instruments lock the range in which the foreign currency exchange rate may fluctuate.

The following table presents the foreign currency derivative contracts we had outstanding and their designations at June 30, 2013 (currency in thousands, except strike price):

	Notional		Strike		Effective	Expiration	Fair Value at
Type	Amount		Price		Date	Date	June 30, 2013
Forward contracts	€	50,400	$	1.28 - 1.30	5/2012	9/2013 - 6/2017	$	(1,061)
Forward contracts	9,800			1.35	12/2012	9/2017 - 3/2018	69
Forward contracts	6,200			1.35	6/2013	6/2018 - 9/2018	(25)
	€	66,400					$	(1,017)

Stock Warrants

We own stock warrants that were generally granted to us by lessees in connection with structuring initial lease transactions. These warrants are defined as derivative instruments because they are readily convertible to cash or provide for net cash settlement upon conversion.

Other

Amounts reported in Other comprehensive income (loss) related to interest rate swaps will be reclassified to interest expense as interest payments are made on our variable-rate debt. Amounts reported in Other comprehensive income (loss) related to foreign currency contracts will be reclassified to Other income and (expenses) when the hedged foreign currency proceeds from foreign operations are repatriated to the U.S. At June 30, 2013, we estimate that an additional $1.4 million will be reclassified as interest expense during the next 12 months related to our interest rate swaps and caps and $0.3 million will be reclassified to Other income and (expenses) related to our foreign currency forward contracts.

We measure our credit exposure on a counterparty basis as the net positive aggregate estimated fair value of our derivatives, net of collateral received, if any. No collateral was received as of June 30, 2013. At June 30, 2013, our total credit exposure was $0.4 million and the maximum exposure to any single counterparty was $0.2 million.

Some of the agreements we have with our derivative counterparties contain certain credit contingent provisions that could result in a declaration of default against us regarding our derivative obligations if we either default or are capable of being declared in default on certain of our indebtedness. At June 30, 2013, we had not been declared in default on any of our derivative obligations. The estimated fair value of our derivatives that were in a net liability position was $4.5 million and $7.9 million at June 30, 2013 and December 31, 2012, respectively, which included accrued interest and any adjustment for nonperformance risk. If we had breached any of these provisions at either June 30, 2013 or December 31, 2012, we could have been required to settle our obligations under these agreements at their aggregate termination value of $4.8 million or $8.5 million, respectively.

CPA®:16 – Global 6/30/2013 10-Q — 22

Notes to Consolidated Financial Statements

Portfolio Concentration Risk

Concentrations of credit risk arise when a group of tenants is engaged in similar business activities or is subject to similar economic risks or conditions that could cause them to default on their lease obligations to us. We regularly monitor our portfolio to assess potential concentrations of credit risk. While we believe our portfolio is reasonably well diversified, it does contain concentrations in excess of 10%, based on the percentage of our annualized contractual minimum base rent for the second quarter of 2013, in certain areas. There were no significant changes to our portfolio concentrations at June 30, 2013 as compared to December 31, 2012.

Note 10. Debt

Non-Recourse Debt

Non-recourse debt consists of mortgage notes payable, which are collateralized by the assignment of real property and direct financing leases with an aggregate carrying value of $2.3 billion and $2.4 billion at June 30, 2013 and December 31, 2012, respectively. At June 30, 2013, our mortgage notes payable bore interest at fixed annual rates ranging from 4.3% to 7.8% and variable contractual rates ranging from 1.2% to 6.9%, with maturity dates ranging from 2014 to 2038.

During the six months ended June 30, 2013, we obtained new non-recourse mortgage financing totaling $16.0 million, with a weighted-average annual interest rate and term of 4.5% and 11.9 years, respectively. Of the total, $3.0 million related to an investment acquired during 2013. Of the total financing, $4.0 million bears interest at a variable rate that has been effectively converted to a fixed annual interest rate of 4.9% through the use of an interest rate swap.

In May 2012, we modified and partially extinguished the non-recourse mortgage loan outstanding related to our Hellweg 2 investment, which had a total balance of $352.3 million at the time of extinguishment. We recognized a gain on the extinguishment of debt of $5.9 million, inclusive of amounts attributable to noncontrolling interests of $4.2 million.

During 2012, we entered into an arrangement with one of our lenders on a non-recourse financing that enabled us to repay the outstanding indebtedness of approximately $10.0 million for cash of approximately $8.7 million. As part of this arrangement, we have a contingent obligation to pay the lender any proceeds received from a sale of the previously-collateralized property in excess of $6.0 million within two years. We have accounted for this as a troubled debt restructuring and, accordingly, we have not recognized a gain on the discounted payoff. We will recognize this gain upon expiration of the contingent obligation.

Line of Credit

On May 2, 2011, we entered into the Line of Credit with several banks, including Bank of America, N.A., which acts as the administrative agent. CPA 16 Merger Sub is the borrower, and we and the Operating Partnership are guarantors. On August 1, 2012, we amended the Line of Credit to reduce the amount available under the secured revolving credit facility from $320.0 million to $225.0 million, to reduce our annual interest rate from LIBOR plus 3.25% to LIBOR plus 2.50%, and to decrease the number of properties in our borrowing base pool. The Line of Credit is scheduled to mature on August 1, 2015, with an option by CPA 16 Merger Sub to extend the maturity date for an additional 12 months subject to the conditions provided in the Line of Credit. We incurred costs of $1.1 million to amend the facility, which are being amortized over the term of the Line of Credit.

Availability under the Line of Credit is dependent upon the number, operating performance, cash flows and diversification of the properties comprising the borrowing base pool. At June 30, 2013, availability under the line was $209.2 million, of which we had drawn $95.0 million.

The Line of Credit is fully recourse to us and contains customary affirmative and negative covenants, including covenants that restrict our and our subsidiaries’ ability to, among other things, incur additional indebtedness (other than non-recourse indebtedness), grant liens, dispose of assets, merge or consolidate, make investments, make acquisitions, pay distributions, enter into certain transactions with affiliates, and change the nature of our business or fiscal year. In addition, the Line of Credit contains customary events of default.

The Line of Credit stipulates certain financial covenants that require us to maintain certain ratios and benchmarks at the end of each quarter. We were in compliance with these covenants at June 30, 2013.

CPA®:16 – Global 6/30/2013 10-Q — 23

Notes to Consolidated Financial Statements

Scheduled Debt Principal Payments

Scheduled debt principal payments during the remainder of 2013, each of the next four calendar years following December 31, 2013, and thereafter are as follows (in thousands):

Years Ending December 31,	Total (a)
2013 (remainder)	$	23,084
2014	100,654
2015  (b)	248,518
2016	244,948
2017	617,524
Thereafter through 2038	473,121
	1,707,849
Unamortized discount, net (c)	(4,560)
Total	$	1,703,289

__________

(a)Certain amounts are based on the applicable foreign currency exchange rate at June 30, 2013.

(b)Includes $95.0 million outstanding under our Line of Credit, which is scheduled to mature in 2015, unless extended pursuant to its terms.

(c)Represents the unamortized fair value adjustment of $5.8 million resulting from the assumption of property-level debt in connection with the Merger, partially offset by a $1.2 million unamortized discount on a non-recourse loan that we repurchased from the lender.

Due to the strengthening of the U.S. dollar relative to foreign currencies during the six months ended June 30, 2013, the carrying value of our debt decreased by $13.2 million from December 31, 2012 to June 30, 2013.

Note 11. Commitments and Contingencies

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.

Note 12. Equity

Noncontrolling Interests

Noncontrolling interests is the portion of equity in a subsidiary not attributable, directly or indirectly, to us. There were no changes in our ownership interest in any of our consolidated subsidiaries for the six months ended June 30, 2013.

CPA®:16 – Global 6/30/2013 10-Q — 24

Notes to Consolidated Financial Statements

The following table presents a reconciliation of total equity, the equity attributable to our stockholders, and the equity attributable to noncontrolling interests (in thousands, except share amounts):

	Six Months Ended June 30, 2013
			CPA®:16 – Global		Noncontrolling
	Total Equity		Stockholders		Interests
Balance – beginning of period	$	1,423,360	$	1,327,880	$	95,480
Shares issued (3,746,545 total shares issued)	31,874		31,874		-
Contributions	306		-		306
Net income	19,231		11,883		7,348
Distributions	(74,351)		(68,599)		(5,752)
Available Cash Distribution to the advisor	(7,444)		-		(7,444)
Change in Other comprehensive income (loss)	(2,014)		(2,454)		440
Shares repurchased	(10,406)		(10,406)		-
Balance – end of period	$	1,380,556	$	1,290,178	$	90,378

	Six Months Ended June 30, 2012
			CPA®:16 – Global		Noncontrolling
	Total Equity		Stockholders		Interests
Balance – beginning of period	$	1,501,283	$	1,424,057	$	77,226
Shares issued (2,809,593 total shares issued)	24,406		24,406		-
Contributions	20,406		-		20,406
Net income	28,895		15,297		13,598
Distributions	(73,746)		(67,396)		(6,350)
Available Cash Distribution to the advisor	(7,879)		-		(7,879)
Change in Other comprehensive income (loss)	(8,834)		(8,141)		(693)
Shares repurchased	(13,159)		(13,159)		-
Balance – end of period	$	1,471,372	$	1,375,064	$	96,308

Redeemable Noncontrolling Interest

We account for the noncontrolling interest in an entity that holds a note receivable recorded in connection with the Hellweg 2 transaction as redeemable noncontrolling interest because the transaction contains put options that, if exercised, would obligate the partners to settle in cash. The partners’ interests are reflected at estimated redemption value for all periods presented.

The following table presents a reconciliation of redeemable noncontrolling interest (in thousands):

	Six Months Ended June 30,
	2013		2012
Balance – beginning of period	$	21,747	$	21,306
Net income	(1,454)		-
Contributions	2,372		-
Distributions	(928)		-
Foreign currency translation adjustment	(338)		(612)
Balance – end of period	$	21,399	$	20,694

CPA®:16 – Global 6/30/2013 10-Q — 25

Notes to Consolidated Financial Statements

Reclassifications Out of Accumulated Other Comprehensive Loss

The following tables present a reconciliation of changes in accumulated other comprehensive loss by component for the periods presented (in thousands):

	Three Months Ended June 30, 2013
	Unrealized Gains (Losses) on Derivative Instruments		Unrealized Gains (Losses) on Marketable Securities		Foreign Currency Translation Adjustments		Total
Balance – beginning of period	$	(7,284)	$	(7)	$	(24,967)	$	(32,258)
Other comprehensive income (loss) before reclassifications	874		21		1,443		2,338
Amounts reclassified from accumulated other comprehensive loss to:
Interest expense	336		-		-		336
Other income and (expenses)	77		-		-		77
Net income from equity investments in real estate	10		-		-		10
Total	423		-		-		423
Net current-period Other comprehensive income (loss)	1,297		21		1,443		2,761
Balance – end of period	$	(5,987)	$	14	$	(23,524)	$	(29,497)

	Three Months Ended June 30, 2012
	Unrealized Gains (Losses) on Derivative Instruments		Unrealized Gains (Losses) on Marketable Securities		Foreign Currency Translation Adjustments		Total
Balance – beginning of period	$	(5,718)	$	(69)	$	(14,552)	$	(20,339)
Other comprehensive income (loss) before reclassifications	(1,132)		25		(14,504)		(15,611)
Amounts reclassified from accumulated other comprehensive loss to:
Interest expense	284		-		-		284
Other income and (expenses)	(340)		-		-		(340)
Net income from equity investments in real estate	335		-		-		335
Total	279		-		-		279
Net current-period Other comprehensive income (loss)	(853)		25		(14,504)		(15,332)
Balance – end of period	$	(6,571)	$	(44)	$	(29,056)	$	(35,671)

CPA®:16 – Global 6/30/2013 10-Q — 26

Notes to Consolidated Financial Statements

	Six Months Ended June 30, 2013
	Unrealized Gains (Losses) on Derivative Instruments		Unrealized Gains (Losses) on Marketable Securities		Foreign Currency Translation Adjustments		Total
Balance – beginning of period	$	(10,472)	$	(10)	$	(16,561)	$	(27,043)
Other comprehensive income (loss) before reclassifications	4,003		24		(6,963)		(2,936)
Amounts reclassified from accumulated other comprehensive loss to:
Interest expense	660		-		-		660
Other income and (expenses)	(201)		-		-		(201)
Net income from equity investments in real estate	23		-		-		23
Total	482		-		-		482
Net current-period Other comprehensive income (loss)	4,485		24		(6,963)		(2,454)
Balance – end of period	$	(5,987)	$	14	$	(23,524)	$	(29,497)

	Six Months Ended June 30, 2012
	Unrealized Gains (Losses) on Derivative Instruments		Unrealized Gains (Losses) on Marketable Securities		Foreign Currency Translation Adjustments		Total
Balance – beginning of period	$	(4,622)	$	(52)	$	(22,856)	$	(27,530)
Other comprehensive income (loss) before reclassifications	(2,615)		8		(6,200)		(8,807)
Amounts reclassified from accumulated other comprehensive loss to:
Interest expense	525		-		-		525
Other income and (expenses)	(488)		-		-		(488)
Net income from equity investments in real estate	629		-		-		629
Total	666		-		-		666
Net current-period Other comprehensive income (loss)	(1,949)		8		(6,200)		(8,141)
Balance – end of period	$	(6,571)	$	(44)	$	(29,056)	$	(35,671)

Note 13. Discontinued Operations

From time to time, we may decide to sell a property. We may make a decision to dispose of a property when it is vacant as a result of tenants vacating space, tenants electing not to renew their leases, tenant insolvency, or lease rejection in the bankruptcy process. In such cases, we assess whether we can obtain the highest value from the property by selling it, as opposed to re-leasing it. When it is appropriate to do so, upon the evaluation of the disposition of long-lived assets, we classify the property as an asset held for sale on our consolidated balance sheet and the current and prior period results of operations of the property are reclassified as discontinued operations.

CPA®:16 – Global 6/30/2013 10-Q — 27

Notes to Consolidated Financial Statements

The results of operations for properties that are held for sale or have been sold and with which we have no continuing involvement are reflected in the consolidated financial statements as discontinued operations and are summarized as follows (in thousands, net of tax):

	Three Months Ended June 30,				Six Months Ended June 30,
	2013		2012		2013		2012
Revenues	$	8,760	$	2,144	$	10,165	$	5,064
Expenses	(513)		(4,983)		(1,885)		(9,661)
Gain on deconsolidation of a subsidiary	4,699		-		4,699		-
(Loss) gain on sale of real estate	(8,000)		3		(5,299)		(2,189)
Loss on extinguishment of debt	-		(357)		-		(357)
Impairment charges	-		-		(9,313)		(485)
Income (loss) from discontinued operations	$	4,946	$	(3,193)	$	(1,633)	$	(7,628)

2013 — During the three months ended June 30, 2013, we sold seven properties for an aggregate of $3.2 million, net of selling costs, and recognized a net loss on the sales totaling $8.0 million and lease termination income of $8.1 million, excluding an impairment charge of $2.1 million previously recognized during the fourth quarter of 2012.

In March 2013, a tenant in one of our domestic properties filed for bankruptcy and ceased paying rent to us. As a result, we suspended debt service payments on the related non-recourse mortgage loan. In April 2013, the bankruptcy court appointed a receiver to take possession of the property, and we no longer had control over the activities that most significantly impacted the economic performance of the property. In June 2013, the property was sold in a foreclosure auction, at which point we deconsolidated the investment with carrying values for its net investment in properties and non-recourse debt of $8.7 million and $13.0 million, respectively, and recognized a gain on the deconsolidation of $4.7 million, excluding an impairment charge of $9.3 million recognized during the first quarter of 2013.

During the three months ended June 30, 2013, we entered into a contract to sell a domestic property for $1.3 million. At June 30, 2013, this property was classified as Assets held for sale in the consolidated balance sheets. We completed the sale of the property in July 2013.

During the three months ended March 31, 2013, we sold four domestic properties for an aggregate of $27.9 million, net of selling costs, and recognized a net gain on the sales totaling $2.7 million, excluding an impairment charge of $1.2 million previously recognized during the fourth quarter of 2012.

2012 — During the three months ended June 30, 2012, we sold three domestic properties for an aggregate of $6.8 million, net of selling costs, and recognized a net gain on the sales totaling less than $0.1 million, a loss on the extinguishment of debt of $0.4 million, and lease termination income of $0.5 million, excluding impairment charges of $0.5 million recognized during the first quarter of 2012.

During the three months ended March 31, 2012, we sold five domestic properties for an aggregate of $11.8 million, net of selling costs, and recognized a net loss on the sales totaling $2.2 million and lease termination income of $0.8 million.

We sold three additional properties during 2012 subsequent to June 30, 2012. The results of operations for these properties are included in Income (loss) from discontinued operations, net of tax in the consolidated financial statements for the three and six months ended June 30, 2012.

Note 14. Subsequent Event

Proposed Merger

On July 25, 2013, we and WPC entered into a merger agreement pursuant to which we will merge with and into one of WPC’s subsidiaries and CPA®:16 – Global’s stockholders will receive shares of WPC common stock as merger consideration, based on a fixed value of $11.25 per share, subject to a pricing collar, as discussed further below. WPC plans to file a registration statement with the SEC to register the shares of its common stock to be issued to our stockholders in connection with the Proposed Merger. Special meetings will be scheduled to obtain the approval of the Proposed Merger by our stockholders and by WPC’s stockholders and the closing of the Proposed Merger also is subject to customary closing conditions. In addition, under the terms of the merger agreement, a Special Committee of our Board of Directors (the “Special Committee”) may solicit, receive, evaluate, and enter into negotiations

CPA®:16 – Global 6/30/2013 10-Q — 28

Notes to Consolidated Financial Statements

with respect to alternative proposals from third parties through August 24, 2013 (the “Go Shop Period”). If the Proposed Merger is approved by our stockholders and the stockholders of WPC and the other closing conditions are met, we expect that the closing will occur by the first quarter of 2014, although there can be no assurance of such timing.

Subject to the terms and conditions of the merger agreement, our stockholders will receive shares of WPC common stock in exchange for their shares of CPA®:16 – Global stock, pursuant to an exchange ratio based upon a value of $11.25 per share of CPA®:16 – Global and the volume weighted average trading price (“VWAP”) of WPC common stock for the five consecutive trading days ending on the third trading day preceding the closing of the transaction. The exchange ratio is subject to a 12% collar based on the VWAP of WPC common stock on July 22, 2013 and July 23, 2013, which results in an exchange ratio of not more than 0.1842 shares and not less than 0.1447 shares of WPC common stock for each share of CPA®:16 – Global stock (the “Per Share Merger Consideration”). No fractional shares will be issued in the Proposed Merger, and our stockholders will receive cash in lieu of any fractional shares.

Based on our outstanding common stock of approximately 206,400,000 shares at July 25, 2013, excluding the approximately 38,200,000 shares held by WPC, and the Per Share Merger Consideration, based on the VWAP of WPC common stock on July 22, 2013 and July 23, 2013 of 0.1621 shares, WPC would issue approximately 27,200,000 shares of its common stock in exchange for the shares of our common stock it does not currently own. The estimated aggregate value of such shares issued in the Proposed Merger would be approximately $1.8 billion, based on the closing price of WPC common stock on July 25, 2013 of $67.81 per share. The nominal value of the Per Share Merger Consideration and estimated total merger consideration may be higher or lower as of the date of closing due to changes in the market price of WPC’s common stock, subject to the limitations of the collar discussed above.

The merger agreement contains certain termination rights for both us and WPC. Each party has agreed to pay the other party’s out-of-pocket expenses in the event that the merger agreement is terminated because such party has breached any of its representations, warranties, covenants, or agreements.

Pursuant to the terms of the advisory agreement between us and WPC, WPC is entitled to be paid the subordinated disposition fees and certain profit interests in connection with any liquidity event regarding CPA®:16 – Global as described in Note 3 (collectively, the “Back End Amounts”). In the merger agreement, WPC has agreed to waive its rights to receive the Back End Amounts upon consummation of the Proposed Merger. However, in the event that the merger agreement is terminated in accordance with the go shop provision, WPC will be entitled to the Back End Amounts as well as $75.0 million (“the Special GP Amount”) in exchange for its Special Member Interest (Note 3). In the event that the merger agreement has been terminated under certain circumstances in connection with a CPA 16 Superior Competing Transaction (as defined in the merger agreement), we have agreed to pay WPC an up-front termination fee (the “CPA 16 Termination Fee”) of $57.0 million, unless we have entered into an agreement with an Exempted Person (as defined in the merger agreement) with respect to a CPA 16 Superior Competing Transaction, in which case the termination fee would be $35.0 million. The CPA 16 Termination Fee would be offset against the sum of the Back End Amounts and the Special GP Amount.

In light of the Proposed Merger, our board of directors has suspended our distribution reinvestment and share purchase plan (“DRIP”). As a result, our stockholders who were previously enrolled in our DRIP will receive cash distributions beginning in October 2013. In addition, our board of directors has suspended our share redemption plan, with the exception of special-circumstances redemptions as defined under the plan.

CPA®:16 – Global 6/30/2013 10-Q — 29

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

MD&A is intended to provide the reader with information that will assist in understanding our financial statements and the reasons for changes in certain key components of our financial statements from period to period. MD&A also provides the reader with our perspective on our financial position and liquidity, as well as certain other factors that may affect our future results. Our MD&A should be read in conjunction with our 2012 Annual Report. In addition, as noted in Note 14 and below in Recent Developments, we recently entered into an agreement to merge with WPC which, if consummated, will result in our becoming a subsidiary of WPC and our stockholders receiving shares of WPC common stock in the transaction.

Business Overview

As described in more detail in Item 1 in our 2012 Annual Report, we are a publicly owned, non-listed REIT that invests in commercial properties leased to companies domestically and internationally. As a REIT, we are not subject to U.S. federal income taxation as long as we satisfy certain requirements, principally relating to the nature of our income, the level of our distributions to our stockholders, and other factors. We earn revenue principally by leasing the properties we own to single corporate tenants, primarily on a triple-net lease basis, which requires the tenant to pay substantially all of the costs associated with operating and maintaining the property. Revenue is subject to fluctuation because of the timing of new lease transactions, lease terminations, lease expirations, contractual rent adjustments, tenant defaults, and sales of properties.

Financial and Operating Highlights

(In thousands)

	Three Months Ended June 30,				Six Months Ended June 30,
	2013		2012		2013			2012
Total revenues	$	79,938	$	80,544	$	158,613		$	161,840
Net income attributable to CPA®:16 – Global stockholders	9,141		7,977		11,883			15,297
Cash distributions paid	34,130		33,676		68,094			67,099
Net cash provided by operating activities					95,694			94,072
Net cash provided by investing activities					33,671			56,049
Net cash used in financing activities					(124,571		)	(172,771		)
Supplemental financial measure:
Modified funds from operations (a)	52,801		40,640		93,218			81,598

__________

(a)We consider the performance metrics listed above, including Modified funds from operations (“MFFO”), a supplemental measure that is not defined by GAAP (“non-GAAP”), to be important measures in the evaluation of our results of operations and capital resources. We evaluate our results of operations with a primary focus on the ability to generate cash flow necessary to meet our objectives of funding distributions to stockholders. See Supplemental Financial Measures below for our definition of this non-GAAP measure and a reconciliation to its most directly comparable GAAP measure.

Total revenues decreased for the three and six months ended June 30, 2013 as compared to the same periods in 2012, primarily due to the impact of Carrefour France, SAS, one of our lessees, declining to exercise its lease termination options on five properties at June 30, 2012, thereby increasing the period over which straight-line revenue is recognized. These decreases were partially offset by the favorable impact of foreign currency fluctuations on operations during the three and six months ended June 30, 2013.

Net income attributable to CPA®:16 – Global stockholders increased for the three months ended June 30, 2013 as compared to the same period in 2012, primarily due to the following in the current year period: the receipt of lease termination income in connection with the sale of several properties, a gain recognized on the deconsolidation of a subsidiary, and a decrease in interest expense. These increases were partially offset by impairment charges and allowances for credit losses recognized on several properties during the current year period, a net loss on the sales of several properties recognized during the current year period, and a net gain on the extinguishment of debt recognized in the prior year period.

CPA®:16 – Global 6/30/2013 10-Q — 30

Net income attributable to CPA®:16 – Global stockholders decreased for the six months ended June 30, 2013 as compared to the same period in 2012, primarily due to the impact of impairment charges and allowances for credit losses recognized on several properties during the current year period, a net loss on the sales of several properties recognized during the current year period, a net gain on the extinguishment of debt recognized in the prior year period, and a decrease in revenue during the current year period as described above. These decreases were partially offset by the following in the current year period: the receipt of lease termination income in connection with the sale of several properties, a gain recognized on the deconsolidation of a subsidiary, and a decrease in interest expense.

Net cash provided by operating activities increased for the six months ended June 30, 2013 as compared to the same period in 2012, primarily due to the receipt of lease termination income in connection with the sale of a property.

Our MFFO increased for both the three and six months ended June 30, 2013 as compared to the same periods in 2012, primarily due to lease termination income received in connection with the sales of several properties during the current year periods and a decrease in interest expense during the current year periods.

Our quarterly cash distribution was $0.1680 per share for the second quarter of 2013, which equated to $0.6720 per share on an annualized basis, and was paid on July 15, 2013 to stockholders of record at June 30, 2013.

Recent Developments

Proposed Merger

As more fully described in Note 14, on July 25, 2013, we and WPC entered into a merger agreement pursuant to which we will merge with and into one of WPC’s subsidiaries and CPA®:16 – Global’s stockholders will receive shares of WPC common stock as merger consideration, based on a fixed value of $11.25 per share, subject to a pricing collar. WPC plans to file a registration statement with the SEC to register the shares of its common stock to be issued to our stockholders in connection with the Proposed Merger. Special meetings will be scheduled to obtain the approval of the Proposed Merger by our stockholders and WPC’s stockholders. The closing of the Proposed Merger is subject to customary closing conditions. In addition, the merger agreement provides for a Go Shop Period in which the Special Committee may solicit, receive, evaluate, and enter into negotiations with respect to alternative proposals from third parties through August 24, 2013. If the Proposed Merger is approved and the other closing conditions are met, we expect that the closing will occur by the first quarter of 2014, although there can be no assurance of such timing.

Net Asset Values

The advisor generally calculates our estimated NAV by relying in part on an estimate of the fair market value of our real estate provided by a third party, adjusted to give effect to the estimated fair value of mortgages encumbering our assets (also provided by a third party) as well as other adjustments.

The advisor usually calculates our NAV annually as of year-end. Our most recently published estimated NAV as of December 31, 2012 was $8.70 per share, compared to $9.10 per share as of December 31, 2011. In the Proposed Merger, our stockholders will receive shares of WPC common stock having a fixed value of $11.25, subject to a pricing collar (Note 14).

CPA®:16 – Global 6/30/2013 10-Q — 31

Results of Operations

The following tables present other operating data that management finds useful in evaluating results of operations:

	June 30, 2013	December 31, 2012
Occupancy rate – leased properties (a)	97.9%	96.9%
Number of leased properties (a)	488	498
Number of operating properties (b)	2	2

	Six Months Ended June 30,
	2013		2012
Acquisition volume (in millions)	$	4.9	$	-
Financing obtained (in millions) (c)	$	16.0	$	65.6
Average U.S. dollar/euro exchange rate (d)	$	1.3135	$	1.2981
U.S. Consumer Price Index (“CPI”) (e)	233.5		229.5

____________

(a)These amounts reflect net-leased properties in which we had a full or partial ownership interest.

(b)For all periods presented, operating properties comprise two hotels, both of which are managed by third parties.

(c)Amount for the six months ended June 30, 2012 includes refinancings totaling $15.5 million.

(d)The average conversion rate for the U.S. dollar in relation to the euro increased by approximately 1.2% during the six months ended June 30, 2013 in comparison to the same period in 2012, resulting in a positive impact on earnings for our euro-denominated investments in the current year period.

(e)Most of our domestic lease agreements include contractual increases indexed to the change in the CPI.

CPA®:16 – Global 6/30/2013 10-Q — 32

The following table sets forth the net lease revenues (i.e., rental income and interest income from direct financing leases) that we earned from lease obligations through our consolidated real estate investments (in thousands):

	Six Months Ended June 30,
Lessee	2013		2012
Hellweg Die Profi-Baumärkte GmbH & Co. KG (Hellweg 2) (a) (b)	$	17,911	$	17,352
Dick’s Sporting Goods, Inc. (b)	5,366		5,336
Telcordia Technologies, Inc.	5,210		5,099
Carrefour France, SAS (a) (c)	5,028		11,357
SoHo House/SHG Acquisition (UK) Limited	3,928		3,928
Nordic Atlanta Cold Storage, LLC	3,752		3,660
Tesco PLC (a) (b)	3,730		3,617
Berry Plastics Corporation (b)	3,541		3,498
LFD Manufacturing Ltd., IDS Logistics (Thailand) Ltd., and IDS Manufacturing SDN BHD (a) (d)	2,745		2,677
Fraikin SAS (a)	2,656		2,515
The Talaria Company (Hinckley) (b)	2,589		2,394
MetoKote Corp., MetoKote Canada Limited, and MetoKote de Mexico (a) (e)	2,432		2,426
PerkinElmer, Inc.	2,216		2,172
Best Brands Corp.	2,136		2,081
Ply Gem Industries, Inc. (e) (f)	2,056		2,083
Huntsman International, LLC	2,013		2,002
Caremark Rx, Inc.	1,970		1,980
Universal Technical Institute of California, Inc.	1,895		1,847
Katun Corporation (a)	1,892		1,718
Bob’s Discount Furniture, LLC	1,880		1,880
Kings Food Markets	1,830		1,808
TRW Vehicle Safety Systems Inc.	1,784		1,784
Finisar Corporation	1,644		1,644
Performance Fibers GmbH (a) (f)	1,637		1,735
Other (a) (b)	56,956		55,744
	$	138,797	$	142,337

____________

(a)Amounts are subject to fluctuations in the exchange rate of the euro. The average conversion rate for the U.S. dollar in relation to the euro increased by approximately 1.2% during the six months ended June 30, 2013 in comparison to the same period in 2012, resulting in a positive impact on lease revenues for our euro-denominated investments in the current year period.

(b)These revenues are generated in consolidated investments, generally with our affiliates, and on a combined basis include revenues applicable to noncontrolling interests totaling $19.2 million and $18.6 million for the six months ended June 30, 2013 and 2012, respectively.

(c)This decrease was due to the impact of the lessee declining to exercise its lease termination options on five properties at June 30, 2012. As a result, the straight-line periods over which revenue is to be recognized for the leases were increased.

(d)Amount is subject to fluctuations in the exchange rate of the Malaysian ringgit and the Thai baht.

(e)Amount is subject to fluctuations in the exchange rate of the Canadian dollar.

(f)This decrease was primarily due to an adjustment made in the first quarter of 2012 related to amendments and adjustments to direct financing leases.

CPA®:16 – Global 6/30/2013 10-Q — 33

We recognize income from equity investments in real estate, of which lease revenues are a significant component. The following table sets forth the net lease revenues earned by these investments. Amounts provided are the total amounts attributable to the investments and do not represent our proportionate share (dollars in thousands):

	Ownership Interest		Six Months Ended June 30,
Lessee	at June 30, 2013		2013		2012
U-Haul Moving Partners, Inc. and Mercury Partners, L.P.	31	%	$	16,154	$	16,154
The New York Times Company	27	%	13,882		13,697
OBI A.G. (a)	25	%	8,435		8,120
Hellweg Die Profi-Baumärkte GmbH & Co. KG (Hellweg 1) (a) (b)	25	%	7,620		6,637
True Value Company	50	%	7,202		7,191
Advanced Micro Devices, Inc.	67	%	5,972		5,972
Pohjola Non-life Insurance Company (a)	40	%	4,661		4,489
TietoEnator Plc (a)	40	%	4,344		4,200
Police Prefecture, French Government (a)	50	%	4,168		3,853
Schuler A.G. (a)	33	%	3,351		3,077
Frontier Spinning Mills, Inc.	40	%	2,299		2,308
Actebis Peacock GmbH (a)	30	%	2,060		1,998
Del Monte Corporation	50	%	1,763		1,763
Actuant Corporation (a)	50	%	919		803
Consolidated Systems, Inc.	40	%	911		927
Barth Europa Transporte e.K/MSR Technologies GmbH (a)	33	%	594		572
Town Sports International Holdings, Inc.	56	%	582		582
Arelis Broadcast, Veolia Transport, and Marchal Levage (formerly Thales S.A.) (a) (c)	35	%	386		626
The Upper Deck Company (d)	50	%	-		-
			$	85,303	$	82,969

__________

(a)Amounts are subject to fluctuations in the exchange rate of the euro. The average conversion rate for the U.S. dollar in relation to the euro increased by approximately 1.2% during the six months ended June 30, 2013 in comparison to the same period in 2012, resulting in a positive impact on lease revenues for our euro-denominated investments in the current year period.

(b)This increase was primarily due to an adjustment made in the first quarter of 2012 related to amendments and adjustments to direct financing leases.

(c)In January 2013, Arelis Broadcast signed a new lease with the jointly-owned investment at a reduced rent.

(d)The property owned by the jointly-owned investment was vacant during both the six months ended June 30, 2013 and 2012.

Leasing Activity

The following discussion presents a summary of our leasing activity on our existing properties for the periods presented and does not include new acquisitions.

During the three months ended June 30, 2013, we signed six leases, totaling approximately 0.3 million square feet of leased space. Of these leases, two were with new tenants and four were renewals or extensions with existing tenants. The average rent for these leases decreased from $6.97 per square foot to $5.53 per square foot. One of the tenants received a tenant improvement allowance of $0.8 million.

During the three months ended June 30, 2012, we signed two leases, totaling approximately 0.2 million square feet of leased space. These leases were renewals or short-term extensions with existing tenants.  The average rent for these leases decreased from $5.61 per square foot to $4.33 per square foot after the renewals. Neither of the tenants received tenant improvement allowances or concessions.

During the six months ended June 30, 2013, we signed seven leases, totaling approximately 0.3 million square feet of leased space. Of these leases, two were with new tenants and five were renewals or extensions with existing tenants. The average rent for these leases

CPA®:16 – Global 6/30/2013 10-Q — 34

decreased from $7.01 per square foot to $5.59 per square foot. One of the tenants received a tenant improvement allowance of $0.8 million.

During the six months ended June 30, 2012, we signed four leases, totaling approximately 0.5 million square feet of leased space. All four leases were renewals or short-term extensions with existing tenants. The average rent for these leases increased from $4.81 per square foot to $4.82 per square foot after the renewals. None of the tenants received tenant improvement allowances or concessions.

Lease Revenues

As of June 30, 2013, approximately 75% of our net leases, based on annualized contractual minimum base rent, provide for adjustments based on formulas indexed to changes in the CPI, or other similar indices for the jurisdiction in which the property is located, some of which have caps and/or floors. In addition, approximately 23% of our net leases on that same basis have fixed rent adjustments with contractual minimum base rent scheduled to increase by an average of 2% in the next 12 months. We own international investments and, therefore, lease revenues from these investments are subject to fluctuations in exchange rate movements in foreign currencies, primarily the euro.

For the three and six months ended June 30, 2013 as compared to the same periods in 2012, lease revenues decreased by $1.6 million and $3.5 million, respectively, primarily due to the impact of Carrefour France, SAS declining to exercise its lease termination options on five properties at June 30, 2012 totaling $2.7 million and $5.4 million, respectively, and the effects of leasing activity totaling $0.6 million and $1.2 million, respectively. These decreases were partially offset by scheduled rent increases of $1.4 million and $2.6 million, respectively, and the favorable impact of foreign currency fluctuations of $0.4 million and $0.6 million, respectively.

Other Operating Income

Other operating income generally consists of costs reimbursable by tenants and non-rent related revenues, including, but not limited to, settlements of claims against former lessees. We receive settlements in the ordinary course of business; however, the timing and amount of such settlements cannot always be estimated. Reimbursable tenant costs are recorded as both income and property expense, and, therefore, have no impact on net income.

For the three and six months ended June 30, 2013 as compared to the same periods in 2012, other operating income increased by $1.0 million and $0.9 million, respectively, primarily due to the receipt of $0.9 million during the second quarter of 2013 related to the termination of an easement between one of our property-owning subsidiaries and the tenant of an adjacent property.

General and Administrative

For the six months ended June 30, 2013 as compared to the same period in 2012, general and administrative expense increased by $1.0 million, primarily due to an increase in management expenses of $1.8 million. Management expenses include our reimbursements to the advisor for the allocated costs of personnel and overhead in providing management of our day-to-day operations and increased primarily due to an amendment to the advisory agreement in 2012 related to the basis of allocating advisor personnel expenses amongst WPC and the CPA REITs (Note 3). The increase was partially offset by a decrease in professional fees of $1.0 million. Professional fees include legal, accounting, and investor-related expenses incurred in the normal course of business.

Depreciation and Amortization

For the six months ended June 30, 2013 as compared to the same period in 2012, depreciation and amortization decreased by $1.0 million. The six months ended June 30, 2012 included a write-off of $0.6 million of lease intangibles related to a tenant bankruptcy.

Property Expenses

For both the three and six months ended June 30, 2013 as compared to the same periods in 2012, property expenses increased by $1.0 million. The increase for the three-month period was primarily due to increases in professional fees of $0.5 million and reimbursable tenant costs of $0.4 million. The increase for the six-month period was primarily due to increases in professional fees of $0.7 million, real estate taxes of $0.6 million, and uncollected rent expense of $0.5 million, partially offset by decreases in reimbursable tenant costs of $0.3 million and asset management fees of $0.3 million as a result of property dispositions subsequent to June 30, 2012, which decreased the asset base from which the advisor earns a fee. Reimbursable tenant costs are recorded as both revenue and expenses and therefore have no impact on our results of operations.

CPA®:16 – Global 6/30/2013 10-Q — 35

Impairment Charges

During both the three and six months ended June 30, 2013, we recognized impairment charges totaling $3.0 million, inclusive of amounts attributable to noncontrolling interests of $0.9 million, on several properties leased to one tenant in order to reduce their carrying values to their estimated fair values based on a change in our estimated holding period during the second quarter of 2013 due to a potential sale of the properties (Note 8).

As part of our portfolio management strategy, we exit from investments containing lower-quality, lower-growth assets. We have been marketing several properties for sale. We evaluate all potential sale opportunities taking into account the long-term growth prospects of assets being sold, the use of proceeds, and the impact to our balance sheet, in addition to the impact on operating results. In our experience, it is difficult for many buyers to complete these transactions in the timing contemplated or at all. Where the undiscounted cash flows, when considering and evaluating the various alternative courses of action that may occur, are less than the asset’s carrying value, we recognize an impairment charge to reduce the property to its estimated fair value. Further, it is possible that we may sell an asset for a price below its estimated fair value and record a loss on sale.

Allowance for Credit Losses

During both the three and six months ended June 30, 2013, we recorded an allowance for credit losses of $9.4 million, inclusive of amounts attributable to noncontrolling interests of $1.7 million, on several properties classified as Net investments in direct financing leases due to a decline in the estimated amount of future payments we will receive from the respective tenants, including the early termination of the direct financing leases.

Net Income from Equity Investments in Real Estate

Net income from equity investments in real estate represents our proportionate share of net income or loss (revenue less expenses) from investments entered into with affiliates or third parties in which we have a noncontrolling interest but over which we exercise significant influence.

For the three months ended June 30, 2013 as compared to the same period in 2012, net income from equity investments in real estate increased by $0.6 million, primarily due to a decrease in our share of real estate tax estimates of $0.4 million on the jointly-owned investment in the property leased to The Upper Deck Company.

For the six months ended June 30, 2013 as compared to the same period in 2012, net income from equity investments in real estate decreased by $1.4 million, primarily due to our share of non-recurring lease termination income of $1.7 million received in February 2012 from the jointly-owned investment in the property now leased to Arelis Broadcast, Veolia Transport, and Marchal Levage (formerly Thales S.A.), partially offset by the $0.4 million decrease in our share of real estate tax estimates on the jointly-owned investment in the property leased to The Upper Deck Company.

Other Income and (Expenses)

Other income and (expenses) generally consists of gains and losses on foreign currency transactions and derivative instruments. We and certain of our foreign consolidated subsidiaries have intercompany debt and/or advances that are not denominated in the relevant entity’s functional currency. When the intercompany debt or accrued interest thereon is remeasured against the functional currency of the entity, a gain or loss may result. For intercompany transactions that are of a long-term investment nature, the gain or loss is recognized as a cumulative translation adjustment in Other comprehensive income (loss). We also recognize gains or losses on foreign currency transactions when we repatriate cash from our foreign investments. In addition, we have certain derivative instruments, including common stock warrants, for which realized and unrealized gains and losses are included in earnings. The timing and amount of such gains or losses cannot always be estimated and are subject to fluctuation.

For the three months ended June 30, 2012, we recognized net other expense of $2.4 million, which was comprised primarily of unrealized foreign currency transaction losses of $2.5 million.

For the six months ended June 30, 2012, we recognized net other expense of $1.5 million, which was comprised primarily of net realized and unrealized foreign currency transaction losses of $2.3 million, partially offset by a net realized gain on derivatives of $0.5 million.

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Gain on Extinguishment of Debt

During the three and six months ended June 30, 2012, we recognized a net gain on the extinguishment of debt of $6.0 million and $5.5 million, respectively. The net gain for each period was comprised primarily of a gain of $5.9 million resulting from the partial extinguishment of the non-recourse mortgage loan outstanding related to our Hellweg 2 investment recognized during the second quarter of 2012 (Note 10).

Interest Expense

For the three and six months ended June 30, 2013 as compared to the same periods in 2012, interest expense decreased by $1.9 million and $4.8 million, respectively, primarily due to the impact of (i) the amendment to the Line of Credit executed on August 1, 2012 (Note 10) totaling $0.8 million and $1.5 million, respectively, (ii) lower interest rates on the variable-rate debt encumbering the properties leased to Carrefour France, SAS totaling $0.6 million and $1.5 million, respectively, and (iii) the repayment of several non-recourse mortgage loans during 2012 totaling $0.4 million and $1.0 million, respectively.

Provision for Income Taxes

For the six months ended June 30, 2013 as compared to the same period in 2012, provision for income taxes increased by $0.9 million, primarily due to back trade taxes incurred by our third-party redeemable noncontrolling interest partner in our Hellweg 2 investment during the current year period totaling $2.4 million, partially offset by a decrease in foreign tax estimates on our Carrefour France, SAS portfolio of $1.6 million.

Income (Loss) from Discontinued Operations, Net of Tax

Income (loss) from discontinued operations, net of tax represents the net income or loss (revenue less expenses) from the operations of properties that were sold or held for sale (Note 13).

During the three and six months ended June 30, 2013, we recognized income from discontinued operations of $4.9 million and loss from discontinued operations of $1.6 million, respectively. Income for the three months ended June 30, 2013 was comprised primarily of lease termination income of $8.1 million received in connection with the sales of several properties and a gain of $4.7 million recognized on the deconsolidation of a subsidiary, partially offset by a net loss on the sale of real estate totaling $8.0 million from the disposition of seven properties. The loss for the six months ended June 30, 2013 was comprised primarily of an impairment charge recognized of $9.3 million and a net loss on the sale of real estate totaling $5.3 million from the disposition of 11 properties, partially offset by lease termination income of $8.1 million and a gain of $4.7 million recognized on the deconsolidation of a subsidiary.

During the three and six months ended June 30, 2012, we recognized a loss from discontinued operations of $3.2 million and $7.6 million, respectively. The loss for the three months ended June 30, 2012 was comprised primarily of loss generated from the operations of properties in discontinued operations of $2.8 million. The loss for the six months ended June 30, 2012 was comprised primarily of the net loss on sale of real estate totaling $2.2 million from the disposition of eight properties, loss generated from the operations of properties in discontinued operations of $4.6 million, and an impairment charge recognized of $0.5 million.

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Net Income Attributable to Noncontrolling Interests

For the three and six months ended June 30, 2013 as compared to the same periods in 2012, net income attributable to noncontrolling interests decreased by $7.1 million and $6.3 million, respectively. The decrease for both periods was primarily due to our affiliates’ share of the gain on extinguishment of debt related to the modification and partial extinguishment of the non-recourse mortgage loan related to our Hellweg 2 investment in May 2012 of $4.2 million, and impairment charges and allowance for credit losses attributable to noncontrolling interests recognized on several properties during the three months ended June 30, 2013 of $2.6 million (Note 8).

Net (Income) Loss Attributable to Redeemable Noncontrolling Interest

For the six months ended June 30, 2013, we recognized a loss attributable to redeemable noncontrolling interest of $1.5 million, primarily due to back trade taxes paid by our third-party redeemable noncontrolling interest partner totaling $2.4 million, offset by income attributable to redeemable noncontrolling interest totaling $0.9 million.

Net Income Attributable to CPA®:16 – Global Stockholders

For the three and six months ended June 30, 2013 as compared to the same periods in 2012, the resulting net income attributable to CPA®:16 – Global stockholders increased by $1.2 million and decreased by $3.4 million, respectively.

Modified Funds from Operations (“MFFO”)

MFFO is a non-GAAP measure we use to evaluate our business. For a definition of MFFO and a reconciliation to net income attributable to CPA®:16 – Global stockholders, see Supplemental Financial Measures below.

For the three and six months ended June 30, 2013 as compared to the same periods in 2012, MFFO increased by $12.2 million and $11.6 million, respectively, primarily due to lease termination income received in connection with the sales of several properties during the current year periods and a decrease in interest expense during the current year periods.

Financial Condition

Sources and Uses of Cash During the Period

We use the cash flow generated from our investments to meet our operating expenses, service debt, and fund distributions to stockholders. Our cash flows fluctuate period to period due to a number of factors, which may include, among other things, the timing of purchases and sales of real estate, the timing of the receipt of proceeds from and the repayment of non-recourse mortgage loans and receipt of lease revenues, the advisor’s annual election to receive fees in shares of our common stock or cash, the timing and characterization of distributions from equity investments in real estate, payment to the advisor of the annual installment of deferred acquisition fees and interest thereon in the first quarter, payment of Available Cash Distributions, and changes in foreign currency exchange rates. Despite these fluctuations, we believe that we will generate sufficient cash from operations and from equity distributions in excess of equity income in real estate to meet our normal recurring short-term and long-term liquidity needs. We may also use existing cash resources, the proceeds of non-recourse mortgage loans, unused capacity on our Line of Credit, and the issuance of additional equity securities to meet these needs. We assess our ability to access capital on an ongoing basis. Our sources and uses of cash during the period are described below.

Operating Activities

Net cash provided by operating activities during the six months ended June 30, 2013 increased by $1.6 million compared to the same period in 2012, primarily due to the receipt of lease termination income in connection with the sale of a property. During the six months ended June 30, 2013, we used cash flows provided by operating activities of $95.7 million primarily to fund net cash distributions to stockholders of $44.5 million, which excluded $23.6 million in distributions that were reinvested by stockholders through our DRIP, and to pay distributions of $14.1 million to affiliates that hold noncontrolling interests in various entities with us. For 2013, the advisor elected to receive its asset management fees in shares of our common stock and as a result, during the six months ended June 30, 2013 we paid asset management fees of $8.2 million through the issuance of stock rather than in cash.

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Investing Activities

Our investing activities are generally comprised of real estate-related transactions (purchases and sales), payment of our annual installment of deferred acquisition fees to the advisor related to asset acquisitions, and capitalized property-related costs. During the six months ended June 30, 2013, we used $4.8 million to acquire one investment (Note 4). We received $31.4 million in connection with the sale of 12 properties (Note 13) and $7.2 million in distributions from equity investments in real estate in excess of equity in net income. Funds totaling $8.0 million and $6.1 million were invested in and released from, respectively, lender-held investment accounts. In January 2013, we paid $0.5 million as our annual installment of deferred acquisition fees to the advisor.

Financing Activities

As noted above, during the six months ended June 30, 2013, we paid distributions to stockholders and affiliates that hold noncontrolling interests in various entities with us. We drew down $45.0 million from our Line of Credit. We also repaid $93.0 million on our Line of Credit, prepaid several non-recourse mortgage loans totaling $4.9 million, and made scheduled mortgage principal installments totaling $21.0 million. We received proceeds of $16.0 million from new financing obtained on three properties, $23.6 million as a result of issuing shares through our DRIP, and $2.7 million in contributions from noncontrolling interests.

We maintain a quarterly redemption plan pursuant to which we may, at the discretion of our board of directors, redeem shares of our common stock from stockholders seeking liquidity. During the six months ended June 30, 2013, we received requests to redeem 1,232,052 shares of our common stock pursuant to our redemption plan and we redeemed these shares at an average price per share of $8.45, which is net of redemption fees, totaling $10.4 million. In light of the Proposed Merger, our board of directors has suspended our redemption plan, with the exception of special-circumstances redemptions as defined under the plan.

Summary of Financing

The table below summarizes our non-recourse debt and Line of Credit (dollars in thousands):

	June 30, 2013		December 31, 2012
Carrying Value
Fixed rate	$	1,443,167	$	1,481,089
Variable rate (a)	260,122		306,091
Total	$	1,703,289	$	1,787,180
Percent of Total Debt
Fixed rate	85%		83%
Variable rate (a)	15%		17%
	100%		100%
Weighted-Average Interest Rate at End of Period
Fixed rate	5.8%		5.8%
Variable rate (a)	3.3%		3.1%

__________

(a)Variable-rate debt at June 30, 2013 included (i) $95.0 million outstanding under our Line of Credit; (ii) $70.1 million that has been effectively converted to a fixed rate through interest rate swap derivative instruments; (iii) $67.9 million that was subject to an interest rate cap, but for which the applicable interest rate was below the effective interest rate of the cap at June 30, 2013; (iv) $12.5 million in non-recourse mortgage loan obligations that bore interest at floating rates; and (v) $11.7 million in non-recourse mortgage loan obligations that bore interest at fixed rates but have interest rate reset features that may change the interest rates to then-prevailing market fixed rates (subject to specific caps) at certain points during their terms. At June 30, 2013, we had no interest rate resets or expirations of interest rate swaps or caps scheduled to occur during the next 12 months.

Cash Resources

At June 30, 2013, our cash resources consisted of cash and cash equivalents totaling $70.4 million. Of this amount, $40.8 million, at then-current exchange rates, was held in foreign subsidiaries, but we could be subject to restrictions or significant costs should we decide to repatriate these amounts. We also had a Line of Credit with unused capacity of $114.2 million, as well as unleveraged

CPA®:16 – Global 6/30/2013 10-Q — 39

properties that had an aggregate carrying value of $102.9 million at June 30, 2013, although there can be no assurance that we would be able to obtain financing for these properties. Our cash resources can be used for working capital needs and other commitments.

Cash Requirements

During the next 12 months, we expect that our cash payments will include paying distributions to our stockholders and to our affiliates that hold noncontrolling interests in our subsidiaries, making scheduled mortgage loan principal payments, as well as other normal recurring operating expenses. Balloon payments totaling $12.9 million on our consolidated mortgage loan obligations are due during the next 12 months. Our share of balloon payments on our unconsolidated jointly-owned investments due during the next 12 months is $56.5 million. Our advisor is actively seeking to refinance certain of these loans, although there can be no assurance that it will be able to do so on favorable terms, if at all.

We expect to fund any capital expenditures on existing properties and scheduled debt maturities on non-recourse mortgage loans through cash generated from operations, the use of our cash reserves, or amounts available on our Line of Credit.

Off-Balance Sheet Arrangements and Contractual Obligations

The table below summarizes our debt, off-balance sheet arrangements, and other contractual obligations at June 30, 2013 and the effect that these arrangements and obligations are expected to have on our liquidity and cash flow in the specified future periods (in thousands):

			Less than						More than
	Total		1 year		1-3 years		3-5 years		5 years
Non-recourse debt and line of credit – principal (a) (b)	$	1,707,849	$	59,453	$	398,672	$	857,050	$	392,674
Deferred acquisition fees – principal	1,309		458		773		78		-
Interest on borrowings and deferred acquisition fees (c)	426,240		92,149		163,594		89,495		81,002
Subordinated disposition fees (d)	1,197		1,197		-		-		-
Operating and other lease commitments (e)	58,861		2,591		4,841		5,909		45,520
	$	2,195,456	$	155,848	$	567,880	$	952,532	$	519,196

____________

(a)Excludes unamortized discount, net of $4.6 million (Note 10).

(b)Includes $95.0 million outstanding under our $225.0 million Line of Credit, which is scheduled to mature on August 1, 2015.

(c)Interest on an unhedged variable-rate debt obligation was calculated using the variable interest rate and balance outstanding at June 30, 2013.

(d)Represents amounts that may be payable to the Special General Partner in connection with sales of assets, if minimum stockholder returns are satisfied. There can be no assurance as to whether or when these fees will be paid (Note 3).

(e)Operating and other lease commitments consist primarily of rent obligations under ground leases and our share of future minimum rents payable pursuant to the advisory agreement for the purpose of leasing office space used for the administration of real estate entities. Amounts are allocated among WPC and the CPA REITs based on gross revenues and are adjusted quarterly. Rental obligations under ground leases are inclusive of amounts attributable to noncontrolling interests of approximately $11.8 million.

Amounts in the table above related to our foreign operations are based on the exchange rate of the local currencies at June 30, 2013, which consisted primarily of the euro. At June 30, 2013, we had no material capital lease obligations for which we were the lessee, either individually or in the aggregate.

Equity Investments

We have interests in unconsolidated investments that own single-tenant properties net leased to companies. Generally, the underlying investments are jointly-owned with our affiliates. At June 30, 2013, on a combined basis, these investments had total assets and third-party debt of approximately $1.6 billion and $0.9 billion, respectively. At that date, our pro rata share of their aggregate debt was $338.3 million. Cash requirements with respect to our share of these debt obligations are discussed above under Cash Requirements.

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Supplemental Financial Measures

In the real estate industry, analysts and investors employ certain non-GAAP supplemental financial measures in order to facilitate meaningful comparisons between periods and among peer companies. Additionally, in the formulation of our goals and in the evaluation of the effectiveness of our strategies, we use supplemental non-GAAP measures which are uniquely defined by our management. We believe these measures are useful to investors to consider because they may assist them to better understand and measure the performance of our business over time and against similar companies. A description of these non-GAAP financial measures and reconciliations to the most directly comparable GAAP measures are provided below.

Funds from Operations (“FFO”) and Modified Funds from Operations (“MFFO”)

Due to certain unique operating characteristics of real estate companies, as discussed below, the National Association of Real Estate Investment Trusts, Inc. (“NAREIT”), an industry trade group, has promulgated a measure known as FFO, which we believe to be an appropriate supplemental measure to reflect the operating performance of a REIT. The use of FFO is recommended by the REIT industry as a supplemental performance measure. FFO is not equivalent to nor a substitute for net income or loss as determined under GAAP.

We define FFO consistent with the standards established by the White Paper on FFO approved by the Board of Governors of NAREIT, as revised in February 2004, or the White Paper. The White Paper defines FFO as net income or loss computed in accordance with GAAP, excluding gains or losses from sales of property, impairment charges on real estate and depreciation and amortization; and after adjustments for unconsolidated partnerships and jointly-owned investments. Adjustments for unconsolidated partnerships and jointly-owned investments are calculated to reflect FFO.

The historical accounting convention used for real estate assets requires straight-line depreciation of buildings and improvements, which implies that the value of real estate assets diminishes predictably over time, especially if such assets are not adequately maintained or repaired and renovated as required by relevant circumstances and/or is requested or required by lessees for operational purposes in order to maintain the value disclosed. We believe that, since real estate values historically rise and fall with market conditions, including inflation, interest rates, the business cycle, unemployment and consumer spending, presentations of operating results for a REIT using historical accounting for depreciation may be less informative. Historical accounting for real estate involves the use of GAAP. Any other method of accounting for real estate such as the fair value method cannot be construed to be any more accurate or relevant than the comparable methodologies of real estate valuation found in GAAP. Nevertheless, we believe that the use of FFO, which excludes the impact of real estate-related depreciation and amortization as well as impairment charges of real estate-related assets, provides a more complete understanding of our performance to investors and to management, and when compared year over year, reflects the impact on our operations from trends in occupancy rates, rental rates, operating costs, general and administrative expenses, and interest costs, which may not be immediately apparent from net income. In particular, we believe it is appropriate to disregard impairment charges, as this is a fair value adjustment that is largely based on market fluctuations and assessments regarding general market conditions which can change over time. An asset will only be evaluated for impairment if certain impairment indications exist and if the carrying, or book value, exceeds the total estimated undiscounted future cash flows (including net rental and lease revenues, net proceeds on the sale of the property, and any other ancillary cash flows at a property or group level under GAAP) from such asset. Investors should note, however, that determinations of whether impairment charges have been incurred are based partly on anticipated operating performance, because estimated undiscounted future cash flows from a property, including estimated future net rental and lease revenues, net proceeds on the sale of the property, and certain other ancillary cash flows, are taken into account in determining whether an impairment charge has been incurred. While impairment charges are excluded from the calculation of FFO described above, investors are cautioned that, due to the fact that impairments are based on estimated future undiscounted cash flows and the relatively limited term of our operations, it could be difficult to recover any impairment charges. However, FFO and MFFO, as described below, should not be construed to be more relevant or accurate than the current GAAP methodology in calculating net income or in its applicability in evaluating the operating performance of the company. The method utilized to evaluate the value and performance of real estate under GAAP should be construed as a more relevant measure of operational performance and considered more prominently than the non-GAAP FFO and MFFO measures and the adjustments to GAAP in calculating FFO and MFFO.

Changes in the accounting and reporting promulgations under GAAP (for acquisition fees and expenses from a capitalization/depreciation model to an expensed-as-incurred model) were put into effect in 2009. These other changes to GAAP accounting for real estate subsequent to the establishment of NAREIT’s definition of FFO have prompted an increase in cash-settled expenses, such as acquisition fees, that are typically accounted for as operating expenses. Management believes these fees and expenses do not affect our overall long-term operating performance. Publicly registered, non-listed REITs typically have a significant amount of acquisition activity and are substantially more dynamic during their initial years of investment and operation. In addition,

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non-listed REITs typically have a limited life with targeted exit strategies after acquisition activity ceases. In the prospectus for our follow-on offering dated April 28, 2006 (the “Prospectus”), we stated our intention to begin considering liquidity events (i.e., listing of our common stock on a national exchange, a merger or sale of our assets, or another similar transaction) for investors generally commencing eight years following the investment of substantially all of the proceeds from our initial public offering, which occurred in December 2005, and on July 25, 2013 we entered into an agreement to merge with and into a subsidiary of WPC. Thus, we do not intend to continuously purchase assets and intend to have a limited life. Due to the above factors and other unique features of publicly registered, non-listed REITs, the Investment Program Association (“IPA”), an industry trade group, has standardized a measure known as MFFO, which the IPA has recommended as a supplemental measure for publicly registered non-listed REITs and which we believe to be another appropriate supplemental measure to reflect the operating performance of a non-listed REIT having the characteristics described above. MFFO is not equivalent to our net income or loss as determined under GAAP, and MFFO may not be a useful measure of the impact of long-term operating performance on value if we do not continue to operate with a limited life and targeted exit strategy, as currently intended. We believe that, because MFFO excludes costs that we consider more reflective of investing activities and other non-operating items included in FFO and also excludes acquisition fees and expenses that affect our operations only in periods in which properties are acquired, MFFO can provide, on a going forward basis, an indication of the sustainability (that is, the capacity to continue to be maintained) of our operating performance after the period in which we are acquiring properties and once our portfolio is in place. By providing MFFO, we believe we are presenting useful information that assists investors and analysts to better assess the sustainability of our operating performance now that our offering has been completed and essentially all of our properties have been acquired. We also believe that MFFO is a recognized measure of sustainable operating performance by the non-listed REIT industry. Further, we believe MFFO is useful in comparing the sustainability of our operating performance since our offering and essentially all of our acquisitions are completed with the sustainability of the operating performance of other real estate companies that are not as involved in acquisition activities. Investors are cautioned that MFFO should only be used to assess the sustainability of a company’s operating performance after a company’s offering has been completed and properties have been acquired, as it excludes acquisition costs that have a negative effect on a company’s operating performance during the periods in which properties are acquired.

We define MFFO consistent with the IPA’s Guideline 2010-01, Supplemental Performance Measure for Publicly Registered, Non-Listed REITs: Modified Funds from Operations, or the Practice Guideline, issued by the IPA in November 2010. The Practice Guideline defines MFFO as FFO further adjusted for the following items, as applicable, included in the determination of GAAP net income: acquisition fees and expenses; amounts relating to deferred rent receivables and amortization of above and below market leases and liabilities (which are adjusted in order to reflect such payments from a GAAP accrual basis to a cash basis of disclosing the rent and lease payments); accretion of discounts and amortization of premiums on debt investments; nonrecurring impairments of real estate-related investments (i.e., infrequent or unusual, not reasonably likely to recur in the ordinary course of business); mark-to-market adjustments included in net income; nonrecurring gains or losses included in net income from the extinguishment or sale of debt, hedges, foreign exchange, derivatives, or securities holdings where trading of such holdings is not a fundamental attribute of the business plan, unrealized gains or losses resulting from consolidation from, or deconsolidation to, equity accounting, and after adjustments for consolidated and unconsolidated partnerships and jointly-owned investments, with such adjustments calculated to reflect MFFO on the same basis. The accretion of discounts and amortization of premiums on debt investments, nonrecurring unrealized gains and losses on hedges, foreign exchange, derivatives or securities holdings, unrealized gains and losses resulting from consolidations, as well as other listed cash flow adjustments are adjustments made to net income in calculating the cash flows provided by operating activities and, in some cases, reflect gains or losses which are unrealized and may not ultimately be realized. While we are responsible for managing interest rate, hedge and foreign exchange risk, we retain an outside consultant to review all our hedging agreements. Inasmuch as interest rate hedges are not a fundamental part of our operations, we believe it is appropriate to exclude such infrequent gains and losses in calculating MFFO, as such gains and losses are not reflective of on-going operations.

In calculating MFFO, we exclude acquisition-related expenses, amortization of above- and below-market leases, fair value adjustments of derivative financial instruments, deferred rent receivables and the adjustments of such items related to noncontrolling interests. Under GAAP, acquisition fees and expenses are characterized as operating expenses in determining operating net income. These expenses are paid in cash by a company. All paid and accrued acquisition fees and expenses will have negative effects on returns to investors, the potential for future distributions, and cash flows generated by the company, unless earnings from operations or net sales proceeds from the disposition of other properties are generated to cover the purchase price of the property, these fees and expenses and other costs related to such property. Further, under GAAP, certain contemplated non-cash fair value and other non-cash adjustments are considered operating non-cash adjustments to net income in determining cash flow from operating activities. In addition, we view fair value adjustments of derivatives and gains and losses from dispositions of assets as infrequent items or items which are unrealized and may not ultimately be realized, and which are not reflective of on-going operations and are therefore typically adjusted for assessing operating performance.

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Our management uses MFFO and the adjustments used to calculate it in order to evaluate our performance against other non-listed REITs which have limited lives with short and defined acquisition periods and targeted exit strategies shortly thereafter. As noted above, MFFO may not be a useful measure of the impact of long-term operating performance on value if we do not continue to operate in this manner. We believe that our use of MFFO and the adjustments used to calculate it allow us to present our performance in a manner that reflects certain characteristics that are unique to non-listed REITs, such as their limited life, limited and defined acquisition period and targeted exit strategy, and hence that the use of such measures is useful to investors. For example, acquisition costs were generally funded from the proceeds of our offering and other financing sources and not from operations. By excluding expensed acquisition costs, the use of MFFO provides information consistent with management’s analysis of the operating performance of the properties. Additionally, fair value adjustments, which are based on the impact of current market fluctuations and underlying assessments of general market conditions, but can also result from operational factors such as rental and occupancy rates, may not be directly related or attributable to our current operating performance. By excluding such changes that may reflect anticipated and unrealized gains or losses, we believe MFFO provides useful supplemental information.

Presentation of this information is intended to provide useful information to investors as they compare the operating performance of different REITs, although it should be noted that not all REITs calculate FFO and MFFO the same way, so comparisons with other REITs may not be meaningful. Furthermore, FFO and MFFO are not necessarily indicative of cash flow available to fund cash needs and should not be considered as an alternative to net income or income from continuing operations as an indication of our performance, as an alternative to cash flows from operations as an indication of our liquidity, or indicative of funds available to fund our cash needs including our ability to make distributions to our stockholders. FFO and MFFO should be reviewed in conjunction with other GAAP measurements as an indication of our performance.

Neither the SEC, NAREIT nor any other regulatory body has passed judgment on the acceptability of the adjustments that we use to calculate FFO or MFFO. In the future, the SEC, NAREIT or another regulatory body may decide to standardize the allowable adjustments across the non-listed REIT industry and we would have to adjust our calculation and characterization of FFO or MFFO accordingly.

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FFO and MFFO were as follows (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Net income attributable to CPA®:16 – Global stockholders	$	9,141		$	7,977		$	11,883		$	15,297
Adjustments:
Depreciation and amortization of real property	22,318			25,578			45,001			52,088
Impairment charges	3,036			-			12,349			495
Loss (gain) on sale of real estate	8,000			(2		)	5,299			2,189
Proportionate share of adjustments to equity in net income of partially owned entities to arrive at FFO:
Depreciation and amortization of real property	3,711			3,962			7,372			7,414
Impairment charges	-			84			-			84
Loss (gain) on sale of real estate	-			3			-			(322		)
Proportionate share of adjustments for noncontrolling interests to arrive at FFO	(3,767		)	(2,565		)	(6,647		)	(5,819		)
Total adjustments	33,298			27,060			63,374			56,129
FFO — as defined by NAREIT	42,439			35,037			75,257			71,426
Adjustments:
Gain on deconsolidation of a subsidiary	(4,699		)	-			(4,699		)	-
Gain on extinguishment of debt	-			(5,670		)	-			(5,164		)
Other depreciation, amortization and non-cash charges	(391		)	2,459			1,137			1,460
Straight-line and other rent adjustments (a)	1,191			(1,268		)	2,379			(3,415		)
Allowance for credit losses	9,358			-			9,358			-
Acquisition and merger expenses (b)	113			133			220			333
Amortization of deferred financing costs	323			(117		)	643			740
Above- and below-market rent intangible lease amortization, net (c)	4,083			5,428			8,257			9,936
Amortization of premiums (accretion of discounts) on debt investments, net	74			(546		)	152			82
Realized gains on foreign currency, derivatives, and other (d)	(353		)	(84		)	(1,109		)	-
Unrealized losses on mark-to-market adjustments (e)	300			66			538			84
Proportionate share of adjustments to equity in net income of partially owned entities to arrive at MFFO:
Other depreciation, amortization, and other non-cash charges	-			55			(16		)	110
Straight-line and other rent adjustments (a)	(182		)	(48		)	(322		)	65
Acquisition expenses (b)	53			64			117			128
Above- and below-market rent intangible lease amortization, net (c)	604			923			1,529			1,848
Proportionate share of adjustments for noncontrolling interests to arrive at MFFO	(112		)	4,208			(223		)	3,965
Total adjustments	10,362			5,603			17,961			10,172
MFFO (a) (b)	$	52,801		$	40,640		$	93,218		$	81,598

__________

(a)Under GAAP, rental receipts are allocated to periods using various methodologies. This may result in income recognition that is significantly different from the underlying contract terms. By adjusting for these items (to reflect such payments from a GAAP accrual basis to a cash basis of disclosing the rent and lease payments), management believes that MFFO provides useful supplemental information on the realized economic impact of lease terms and debt investments, provides insight on the contractual cash flows of such lease terms and debt investments, and aligns results with management’s analysis of operating performance.

(b)In evaluating investments in real estate, management differentiates the costs to acquire the investment from the operations derived from the investment, as well as the costs associated with a liquidity event, such as merger expenses. Such information would be comparable only for non-listed REITs that have completed their acquisition activity and have other similar operating

CPA®:16 – Global 6/30/2013 10-Q — 44

characteristics. By excluding expensed acquisition and merger costs, management believes MFFO provides useful supplemental information that is comparable for each type of real estate investment and is consistent with management’s analysis of the investing and operating performance of our properties. Acquisition fees and expenses and merger expenses include payments to our advisor or third parties. Acquisition fees and expenses and merger expenses under GAAP are considered operating expenses and as expenses included in the determination of net income and income from continuing operations, both of which are performance measures under GAAP. All paid and accrued acquisition fees and expenses and merger expenses will have negative effects on returns to stockholders, the potential for future distributions, and cash flows generated by us, unless earnings from operations or net sales proceeds from the disposition of properties are generated to cover the purchase price of the property, these fees and expenses and other costs related to the property.

(c)Under GAAP, certain intangibles are accounted for at cost and reviewed at least annually for impairment, and certain intangibles are assumed to diminish predictably in value over time and amortized, similar to depreciation and amortization of other real estate related assets that are excluded from FFO. However, because real estate values and market lease rates historically rise or fall with market conditions, management believes that by excluding charges relating to amortization of these intangibles, MFFO provides useful supplemental information on the performance of the real estate.

(d)Management believes that adjusting for fair value adjustments for derivatives provides useful information because such fair value adjustments are based on market fluctuations and may not be directly related or attributable to our operations.

(e)Management believes that adjusting for mark-to-market adjustments is appropriate because they are items that may not be reflective of on-going operations and reflect unrealized impacts on value based only on then current market conditions, although they may be based upon current operational issues related to an individual property or industry or general market conditions. The need to reflect mark-to-market adjustments is a continuous process and is analyzed on a quarterly and/or annual basis in accordance with GAAP.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Market Risk

Market risk is the exposure to loss resulting from changes in interest rates, foreign currency exchange rates, and equity prices. The primary risks to which we are exposed are interest rate risk and foreign currency exchange risk. We are also exposed to further market risk as a result of concentrations of tenants in certain industries and/or geographic regions. Adverse market factors can affect the ability of tenants in a particular industry/region to meet their respective lease obligations. In order to manage this risk, we view our collective tenant roster as a portfolio, and in its investment decisions the advisor attempts to diversify our portfolio so that we are not overexposed to a particular industry or geographic region.

Generally, we do not use derivative instruments to hedge credit/market risks or for speculative purposes. However, from time to time, we may enter into foreign currency derivative contracts to hedge our foreign currency cash flow exposures.

Interest Rate Risk

The carrying value of our real estate and related fixed-rate debt obligations is subject to fluctuations based on changes in interest rates. The value of our real estate is also subject to fluctuations based on local and regional economic conditions and changes in the creditworthiness of lessees, all of which may affect our ability to refinance property-level mortgage debt when balloon payments are scheduled. Interest rates are highly sensitive to many factors, including governmental monetary and tax policies, domestic and international economic and political conditions, and other factors beyond our control. An increase in interest rates would likely cause the fair value of our owned assets to decrease. Increases in interest rates may also have an impact on the credit profile of certain tenants.

We are exposed to the impact of interest rate changes primarily through our borrowing activities. To limit this exposure, we attempt to obtain non-recourse mortgage financing on a long-term, fixed-rate basis. However, from time to time, we or our investment partners may obtain variable-rate non-recourse mortgage loans and, as a result, may enter into interest rate swap agreements or interest rate cap agreements with lenders that effectively convert the variable-rate debt service obligations of the loan to a fixed rate or limit the underlying interest rate from exceeding a specified strike rate, respectively. Interest rate swaps are agreements in which one party exchanges a stream of interest payments for a counterparty’s stream of cash flows over a specific period, and interest rate caps limit the effective borrowing rate of variable-rate debt obligations while allowing participants to share in downward shifts in interest rates. These interest rate swaps and caps are derivative instruments designated as cash flow hedges on the forecasted interest payments on the debt obligation. The notional, or face, amount on which the swaps or caps are based is not exchanged. Our objective in using these derivatives is to limit our exposure to interest rate movements.

CPA®:16 – Global 6/30/2013 10-Q — 45

The net fair value of our interest rate swaps and cap, which are included in Accounts payable, accrued expenses, and other liabilities and Other assets, net in the consolidated financial statements, was in a net liability position of $2.9 million at June 30, 2013. In addition, three unconsolidated investments in which we have interests ranging from 25% to 35% had interest rate swaps and an interest rate cap with a net estimated fair value liability of $13.1 million in the aggregate, representing the total amount attributable to the entities, not our proportionate share, at June 30, 2013 (Note 9).

At June 30, 2013, the majority (approximately 94%) of our long-term debt either bore interest at fixed rates, was swapped or capped to a fixed rate, or bore interest at fixed rates that were scheduled to convert to then-prevailing market fixed rates at certain future points during their term. The annual interest rates on our fixed-rate debt at June 30, 2013 ranged from 4.3% to 7.8%. The contractual interest rates on our variable-rate debt at June 30, 2013 ranged from 1.2% to 6.9%. Our debt obligations are more fully described under Financial Condition in Item 2 above. The following table presents principal cash flows based upon expected maturity dates of our debt obligations outstanding at June 30, 2013 (in thousands):

	2013 (Remainder)		2014		2015		2016		2017		Thereafter		Total		Fair value
Fixed-rate debt (a)	$	18,840	$	92,175	$	132,771	$	235,743	$	556,649	$	411,169	$	1,447,347	$	1,435,065
Variable-rate debt (a)	$	4,244	$	8,479	$	115,747	$	9,205	$	60,875	$	61,952	$	260,502	$	257,654

__________

(a)Amounts are based on the exchange rate at June 30, 2013, as applicable.

The estimated fair value of our fixed-rate debt and our variable-rate debt that currently bears interest at fixed rates or has effectively been converted to a fixed rate through the use of interest rate swaps or that has been subject to an interest rate cap is affected by changes in interest rates. A decrease or increase in interest rates of 1% would change the estimated fair value of this debt at June 30, 2013 by an aggregate increase of $61.6 million or an aggregate decrease of $62.2 million, respectively. This debt is generally not subject to short-term fluctuations in interest rates.

Foreign Currency Exchange Rate Risk

We own investments outside the U.S., and as a result are subject to risk from the effects of exchange rate movements in various foreign currencies, primarily the euro, and to a lesser extent, certain other currencies, which may affect future costs and cash flows. We manage foreign currency exchange rate movements by generally placing both our debt obligation to the lender and the tenant’s rental obligation to us in the same currency. This reduces our overall exposure to the net cash flow from that investment. However, we are subject to foreign currency exchange rate movements to the extent of the difference in the timing and amount of the rental obligation and the debt service. We are generally a net receiver of these currencies (we receive more cash than we pay out), and therefore our foreign operations benefit from a weaker U.S. dollar, and are adversely affected by a stronger U.S. dollar, relative to the foreign currency.

We have obtained mortgage financing in the local currency. To the extent that currency fluctuations increase or decrease rental revenues as translated to U.S. dollars, the change in debt service, as translated to U.S. dollars, will partially offset the effect of fluctuations in revenue and mitigate the risk from changes in foreign currency exchange rates.

Scheduled future minimum rents, exclusive of renewals, under non-cancelable operating leases for our foreign operations for the remainder of 2013, each of the next four calendar years following December 31, 2013, and thereafter are as follows (in thousands):

Lease Revenues (a)	2013 (Remainder)		2014		2015		2016		2017		Thereafter		Total
Euro (b)	$	45,155	$	90,273	$	83,122	$	75,534	$	74,311	$	696,461	$	1,064,856
British pound sterling (c)	2,694		5,423		4,870		4,631		4,690		61,502		83,810
Other foreign currencies (d)	4,088		8,139		8,138		8,140		8,152		46,759		83,416
	$	51,937	$	103,835	$	96,130	$	88,305	$	87,153	$	804,722	$	1,232,082

CPA®:16 – Global 6/30/2013 10-Q — 46

Scheduled debt service payments (principal and interest) for mortgage notes payable for our foreign operations for the remainder of 2013, each of the next four calendar years following December 31, 2013, and thereafter are as follows (in thousands):

Debt Service (a) (e)	2013 (Remainder)		2014		2015		2016		2017		Thereafter		Total
Euro (b)	$	24,289	$	71,180	$	50,704	$	138,950	$	415,269	$	13,104	$	713,496
British pound sterling (c)	1,626		15,534		7,367		1,396		1,396		21,753		49,072
Other foreign currencies (d)	2,298		12,542		9,029		3,366		8,795		16,289		52,319
	$	28,213	$	99,256	$	67,100	$	143,712	$	425,460	$	51,146	$	814,887

__________

(a)Amounts are based on the applicable exchange rates at June 30, 2013. Contractual rents and debt obligations are denominated in the functional currency of the country of each property.

(b)We estimate that for a 1% increase or decrease in the exchange rate between the euro and the U.S. dollar, there would be a corresponding change in the projected estimated property-level cash flow at June 30, 2013 of $3.5 million.

(c)We estimate that for a 1% increase or decrease in the exchange rate between the British pound sterling and the U.S. dollar, there would be a corresponding change in the projected estimated property-level cash flow at June 30, 2013 of $0.3 million.

(d)Other foreign currencies consist of the Canadian dollar, the Malaysian ringgit, the Swedish krona, and the Thai baht.

(e)Interest on unhedged variable-rate debt obligations was calculated using the applicable annual interest rates and balances outstanding at June 30, 2013.

As a result of scheduled balloon payments on our international non-recourse mortgage loans, projected debt service obligations exceed projected lease revenues in 2016 and 2017. In 2016 and 2017, balloon payments totaling $96.5 million and $410.2 million, respectively, are due on several non-recourse mortgage loans that are collateralized by properties that we own with affiliates. We currently anticipate that, by their respective due dates, we will have refinanced certain of these loans, but there can be no assurance that we will be able to do so on favorable terms, if at all. If that has not occurred, we would expect to use our cash resources to make these payments, if necessary.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

Our disclosure controls and procedures include our controls and other procedures designed to provide reasonable assurance that information required to be disclosed in this and other reports filed under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized, and reported within the required time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to management, including our chief executive officer and chief financial officer, to allow timely decisions regarding required disclosures. It should be noted that no system of controls can provide complete assurance of achieving a company’s objectives and that future events may impact the effectiveness of a system of controls.

Our chief executive officer and chief financial officer, after conducting an evaluation, together with members of our management, of the effectiveness of the design and operation of our disclosure controls and procedures at June 30, 2013, have concluded that our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) were effective as of June 30, 2013 at a reasonable level of assurance.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

CPA®:16 – Global 6/30/2013 10-Q — 47

PART II

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Unregistered Sales of Equity Securities

For the three months ended June 30, 2013, we issued 514,434 shares of our common stock to the advisor as consideration for asset management fees. These shares were issued at a price per share of $8.70, which represents our most recently published NAV per share as approved by our board of directors at the date of issuance.

Since none of these transactions were considered to have involved a “public offering” within the meaning of Section 4(a)(2) of the Securities Act, the shares issued were deemed to be exempt from registration. In acquiring our shares, the advisor represented that such interests were being acquired by it for the purposes of investment and not with a view to the distribution thereof.

Issuer Purchases of Equity Securities

The following table provides information with respect to repurchases of our common stock during the three months ended June 30, 2013:

					Maximum number (or
				Total number of shares	approximate dollar value)
				purchased as part of	of shares that may yet be
	Total number of	Average price		publicly announced	purchased under the
2013 Period	shares purchased (a)	paid per share		plans or program (a)	plans or program (a)
April	—	—		N/A	N/A
May	—	—		N/A	N/A
June	647,342	$	8.42	N/A	N/A
Total	647,342

__________

(a)Represents shares of our common stock repurchased under our redemption plan, pursuant to which we may elect to redeem shares at the request of our stockholders, subject to certain exceptions, conditions, and limitations. The maximum amount of shares purchasable by us in any period depends on a number of factors and is at the discretion of our board of directors. We satisfied all of the above redemption requests received during the three months ended June 30, 2013. We receive fees in connection with share redemptions. In light of the Proposed Merger, our board of directors has suspended our redemption plan, with the exception of special-circumstances redemptions.

CPA®:16 – Global 6/30/2013 10-Q — 48

Item 6. Exhibits

The following exhibits are filed with this Report, except where indicated.

Exhibit No.	Description
2.1	Agreement and Plan of Merger, dated as of July 25, 2013, among Corporate Property Associates 16 – Global Incorporated, W. P. Carey Inc., WPC REIT Merger Sub Inc., and the other parties thereto (Incorporated by reference to Exhibit 2.1 to Current Report on Form 8-K filed on July 26, 2013)
3.1	Second Amended and Restated Bylaws dated July 25, 2013 (Incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed on July 26, 2013)
31.1	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32	Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101	The following materials from Corporate Property Associates 16 – Global Incorporated’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2013, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets at June 30, 2013 and December 31, 2012, (ii) Consolidated Statements of Income for the three and six months ended June 30, 2013 and 2012, (iii) Consolidated Statements of Comprehensive Income (Loss) for the three and six months ended June 30, 2013 and 2012, (iv) Consolidated Statements of Cash Flows for the six months ended June 30, 2013 and 2012, and (v) Notes to Consolidated Financial Statements. *

__________

* Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

CPA®:16 – Global 6/30/2013 10-Q — 49

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

		Corporate Property Associates 16 – Global Incorporated
Date: August 5, 2013
	By:	/s/ Catherine D. Rice
		Catherine D. Rice
		Chief Financial Officer
		(Principal Financial Officer)
Date: August 5, 2013
	By:	/s/ Hisham A. Kader
		Hisham A. Kader
		Chief Accounting Officer
		(Principal Accounting Officer)

CPA®:16 – Global 6/30/2013 10-Q — 50

EXHIBIT INDEX

The following exhibits are filed with this Report, except where indicated.

Exhibit No.	Description
2.1	Agreement and Plan of Merger, dated as of July 25, 2013, among Corporate Property Associates 16 – Global Incorporated, W. P. Carey Inc., WPC REIT Merger Sub Inc., and the other parties thereto (Incorporated by reference to Exhibit 2.1 to Current Report on Form 8-K filed on July 26, 2013)
3.1	Second Amended and Restated Bylaws dated July 25, 2013 (Incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed on July 26, 2013)
31.1	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32	Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101	The following materials from Corporate Property Associates 16 – Global Incorporated’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2013, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets at June 30, 2013 and December 31, 2012, (ii) Consolidated Statements of Income for the three and six months ended June 30, 2013 and 2012, (iii) Consolidated Statements of Comprehensive Income (Loss) for the three and six months ended June 30, 2013 and 2012, (iv) Consolidated Statements of Cash Flows for the six months ended June 30, 2013 and 2012, and (v) Notes to Consolidated Financial Statements. *

__________

* Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.