Maryland | 001-13779 | 45-4549771 |
(State of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
50 Rockefeller Plaza, New York, NY | 10020 | |
(Address of principal executive offices) | (Zip Code) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
W. P. Carey Inc. | ||
Date: | November 3, 2015 | By: /s/ Hisham A. Kader |
Hisham A. Kader | ||
Chief Financial Officer |
• | Net revenues of $198.2 million, comprised of net revenues from real estate ownership of $175.8 million and net revenues from the Managed Programs of $22.3 million |
• | AFFO of $126.6 million, equivalent to $1.19 per diluted share |
• | 2015 AFFO guidance range narrowed to $4.83 to $4.97 per diluted share |
• | Quarterly dividend of $0.955 per share, equivalent to an annualized dividend rate of $3.82 per share |
• | Completed two investments totaling $97.7 million |
• | Disposed of three properties for total proceeds of $6.7 million |
• | Net lease portfolio occupancy of 98.8% |
• | Structured $191.2 million of investments on behalf of the Managed REITs |
• | Assets under management of $10.5 billion |
• | CWI 2 investor capital inflows of $75.5 million |
• | Actively exploring the potential separation of the Company into more focused entities aligned with its core competencies |
• | Total Company: Revenues excluding reimbursable costs (net revenues) for the 2015 third quarter totaled $198.2 million, up 12.6% from $176.0 million for the 2014 third quarter, due primarily to additional lease revenues from properties acquired since the start of the 2014 third quarter and higher asset management revenue resulting from growth in assets under management. |
• | Real Estate Ownership: Real estate revenues excluding reimbursable tenant costs (net revenues from real estate ownership) for the 2015 third quarter were $175.8 million, up 10.6% from $159.0 million for the 2014 third quarter, due primarily to additional lease revenues from properties acquired since the start of the 2014 third quarter. |
• | Investment Management: Revenues from the Managed Programs excluding reimbursable costs (net revenues from the Managed Programs) for the 2015 third quarter were $22.3 million, up 31.2% from $17.0 million for the 2014 third quarter, due primarily to higher asset management revenue resulting from growth in assets under management. |
• | AFFO for the 2015 third quarter was $1.19 per diluted share, up 5.3% compared to $1.13 per diluted share for the 2014 third quarter, due primarily to (i) the positive net impact of properties acquired for our owned real estate portfolio since the beginning of the 2014 third quarter; and (ii) higher assets under management within our investment management business resulting in increases to both asset management fees and distributions of available cash from the Company’s interests in the operating partnerships of the Managed REITs. These were partly offset by a stronger U.S. dollar, primarily relative to the euro, net of realized hedging gains and higher general and administrative expenses. |
• | Note: Further information concerning AFFO, a non-GAAP supplemental performance metric, is presented in the accompanying tables and related notes. |
• | As previously announced, on September 17, 2015, the Company’s Board of Directors declared a quarterly cash dividend of $0.955 per share, equivalent to an annualized dividend rate of $3.82 per share. The dividend was paid on October 15, 2015, to stockholders of record as of September 30, 2015. |
• | For the 2015 full year, the Company expects to report AFFO of between $4.83 and $4.97 per diluted share, based on assumed total acquisition volume of between approximately $2.7 billion and $3.5 billion, comprised of approximately $600 million to $700 million for the Company’s owned real estate portfolio and approximately $2.1 billion to $2.8 billion on behalf of the Managed REITs. It also assumes dispositions from the Company’s owned real estate portfolio of between approximately $40 million and $100 million. |
• | During the 2015 third quarter, the Company completed two investments totaling $97.7 million, bringing total investment volume for the nine months ended September 30, 2015, to $543.3 million, including transaction-related costs and fees. |
• | During the 2015 third quarter, the Company disposed of three properties as part of its active capital recycling program for a total of $6.7 million, bringing total dispositions for the nine months ended September 30, 2015, to $31.8 million, including transaction-related costs and fees. |
• | As of September 30, 2015, the Company’s owned real estate portfolio consisted of 854 net lease properties, comprising 89.8 million square feet leased to 221 tenants, and three operating properties. As of that date, the weighted-average lease term of the net lease portfolio was 8.9 years and the occupancy rate was 98.8%. |
• | W. P. Carey is the advisor to CPA®:17 – Global and CPA®:18 – Global (the CPA® REITs), Carey Watermark Investors Incorporated (CWI) and Carey Watermark Investors 2 Incorporated (CWI 2) (the CWI REITs, and together with the CPA® REITs, the Managed REITs) and Carey Credit Income Fund (CCIF) (together with the Managed REITs, the Managed Programs). |
• | During the 2015 third quarter, the Company structured new investments totaling $191.2 million on behalf of the Managed REITs, bringing total acquisitions for the nine months ended September 30, 2015, to $1.9 billion, including transaction-related costs and fees. |
• | As of September 30, 2015, the Managed Programs had total assets under management of approximately $10.5 billion, up 0.9% from $10.4 billion as of June 30, 2015, and up 26.1% from $8.3 billion as of September 30, 2014. |
• | During the 2015 third quarter, CWI 2 had investor capital inflows of $75.5 million, bringing total investor capital inflows for the Managed Programs for the nine months ended September 30, 2015, to $192.9 million. |
• | As previously announced, during the 2015 third quarter, the registration statements for Carey Credit Income Fund 2016 T and Carey Credit Income Fund-I were declared effective by the SEC, enabling the Company to commence capital raising on their behalf as feeder funds for CCIF, the Company’s first business development company (BDC). |
W. P. CAREY INC. | |||||||
Consolidated Balance Sheets (Unaudited) | |||||||
(in thousands) | |||||||
September 30, 2015 | December 31, 2014 | ||||||
Assets | |||||||
Investments in real estate: | |||||||
Real estate, at cost | $ | 5,297,782 | $ | 5,006,682 | |||
Operating real estate, at cost | 82,648 | 84,885 | |||||
Accumulated depreciation | (351,666 | ) | (258,493 | ) | |||
Net investments in properties | 5,028,764 | 4,833,074 | |||||
Net investments in direct financing leases | 780,239 | 816,226 | |||||
Assets held for sale | 4,863 | 7,255 | |||||
Net investments in real estate | 5,813,866 | 5,656,555 | |||||
Cash and cash equivalents | 191,318 | 198,683 | |||||
Equity investments in the Managed Programs and real estate | 275,883 | 249,403 | |||||
Due from affiliates | 147,700 | 34,477 | |||||
In-place lease and tenant relationship intangible assets, net | 928,962 | 993,819 | |||||
Goodwill | 684,576 | 692,415 | |||||
Above-market rent intangible assets, net | 492,754 | 522,797 | |||||
Other assets, net | 353,369 | 300,330 | |||||
Total Assets | $ | 8,888,428 | $ | 8,648,479 | |||
Liabilities and Equity | |||||||
Liabilities: | |||||||
Non-recourse debt, net | $ | 2,412,612 | $ | 2,532,683 | |||
Senior Unsecured Notes, net | 1,502,007 | 498,345 | |||||
Senior Unsecured Credit Facility - Revolver | 435,489 | 807,518 | |||||
Senior Unsecured Credit Facility - Term Loan | 250,000 | 250,000 | |||||
Accounts payable, accrued expenses and other liabilities | 298,514 | 293,846 | |||||
Below-market rent and other intangible liabilities, net | 165,647 | 175,070 | |||||
Deferred income taxes | 87,570 | 94,133 | |||||
Distributions payable | 101,645 | 100,078 | |||||
Total liabilities | 5,253,484 | 4,751,673 | |||||
Redeemable noncontrolling interest | 14,622 | 6,071 | |||||
Equity: | |||||||
W. P. Carey stockholders’ equity: | |||||||
Preferred stock (none issued) | — | — | |||||
Common stock | 105 | 105 | |||||
Additional paid-in capital | 4,300,859 | 4,322,273 | |||||
Distributions in excess of accumulated earnings | (655,095 | ) | (465,606 | ) | |||
Deferred compensation obligation | 57,395 | 30,624 | |||||
Accumulated other comprehensive loss | (156,669 | ) | (75,559 | ) | |||
Less: treasury stock at cost | (60,948 | ) | (60,948 | ) | |||
Total W. P. Carey stockholders’ equity | 3,485,647 | 3,750,889 | |||||
Noncontrolling interests | 134,675 | 139,846 | |||||
Total equity | 3,620,322 | 3,890,735 | |||||
Total Liabilities and Equity | $ | 8,888,428 | $ | 8,648,479 |
W. P. CAREY INC. | |||||||||||
Quarterly Consolidated Statements of Income (Unaudited) | |||||||||||
(in thousands, except share and per share amounts) | |||||||||||
Three Months Ended | |||||||||||
September 30, 2015 | June 30, 2015 | September 30, 2014 | |||||||||
Revenues | |||||||||||
Real estate revenues: | |||||||||||
Lease revenues | $ | 164,741 | $ | 162,574 | $ | 149,243 | |||||
Operating property revenues (a) | 8,107 | 8,426 | 8,344 | ||||||||
Reimbursable tenant costs | 5,340 | 6,130 | 6,271 | ||||||||
Lease termination income and other | 2,988 | 3,122 | 1,415 | ||||||||
181,176 | 180,252 | 165,273 | |||||||||
Revenues from the Managed Programs: | |||||||||||
Asset management revenue | 13,004 | 12,073 | 9,088 | ||||||||
Reimbursable costs | 11,155 | 7,639 | 14,722 | ||||||||
Structuring revenue | 8,207 | 37,808 | 5,487 | ||||||||
Dealer manager fees | 1,124 | 307 | 2,436 | ||||||||
33,490 | 57,827 | 31,733 | |||||||||
214,666 | 238,079 | 197,006 | |||||||||
Operating Expenses | |||||||||||
Depreciation and amortization | 75,512 | 65,166 | 59,524 | ||||||||
General and administrative | 22,842 | 26,376 | 20,261 | ||||||||
Impairment charges | 19,438 | 591 | 4,225 | ||||||||
Reimbursable tenant and affiliate costs | 16,495 | 13,769 | 20,993 | ||||||||
Property expenses, excluding reimbursable tenant costs | 11,120 | 11,020 | 10,346 | ||||||||
Acquisition and strategic initiative expenses | 4,760 | 1,897 | 618 | ||||||||
Stock-based compensation expense | 3,966 | 5,089 | 7,979 | ||||||||
Dealer manager fees and expenses | 3,185 | 2,327 | 3,847 | ||||||||
Subadvisor fees (b) | 1,748 | 4,147 | 381 | ||||||||
159,066 | 130,382 | 128,174 | |||||||||
Other Income and Expenses | |||||||||||
Interest expense | (49,683 | ) | (47,693 | ) | (46,534 | ) | |||||
Equity in earnings of equity method investments in the Managed Programs and real estate | 12,635 | 14,272 | 11,610 | ||||||||
Other income and (expenses) | 6,608 | 7,641 | (5,141 | ) | |||||||
(30,440 | ) | (25,780 | ) | (40,065 | ) | ||||||
Income from continuing operations before income taxes and gain on sale of real estate | 25,160 | 81,917 | 28,767 | ||||||||
Provision for income taxes | (3,361 | ) | (15,010 | ) | (901 | ) | |||||
Income from continuing operations before gain on sale of real estate | 21,799 | 66,907 | 27,866 | ||||||||
Income from discontinued operations, net of tax | — | — | 190 | ||||||||
Gain on sale of real estate, net of tax | 1,779 | 16 | 260 | ||||||||
Net Income | 23,578 | 66,923 | 28,316 | ||||||||
Net income attributable to noncontrolling interests | (1,833 | ) | (3,575 | ) | (993 | ) | |||||
Net loss attributable to redeemable noncontrolling interest | — | — | 14 | ||||||||
Net Income Attributable to W. P. Carey | $ | 21,745 | $ | 63,348 | $ | 27,337 | |||||
Basic Earnings Per Share | |||||||||||
Income from continuing operations attributable to W. P. Carey | $ | 0.20 | $ | 0.60 | $ | 0.27 | |||||
Income from discontinued operations attributable to W. P. Carey | — | — | — | ||||||||
Net Income Attributable to W. P. Carey | $ | 0.20 | $ | 0.60 | $ | 0.27 | |||||
Diluted Earnings Per Share | |||||||||||
Income from continuing operations attributable to W. P. Carey | $ | 0.20 | $ | 0.59 | $ | 0.27 | |||||
Income from discontinued operations attributable to W. P. Carey | — | — | — | ||||||||
Net Income Attributable to W. P. Carey | $ | 0.20 | $ | 0.59 | $ | 0.27 | |||||
Weighted-Average Shares Outstanding | |||||||||||
Basic | 105,813,237 | 105,764,032 | 100,282,082 | ||||||||
Diluted | 106,337,040 | 106,281,983 | 101,130,448 | ||||||||
Amounts Attributable to W. P. Carey | |||||||||||
Income from continuing operations, net of tax | $ | 21,745 | $ | 63,348 | $ | 27,151 | |||||
Income from discontinued operations, net of tax | — | — | 186 | ||||||||
Net Income | $ | 21,745 | $ | 63,348 | $ | 27,337 | |||||
Distributions Declared Per Share | $ | 0.9550 | $ | 0.9540 | $ | 0.9400 |
W. P. CAREY INC. | |||||||
Year-to-Date Consolidated Statements of Income (Unaudited) | |||||||
(in thousands, except share and per share amounts) | |||||||
Nine Months Ended September 30, | |||||||
2015 | 2014 | ||||||
Revenues | |||||||
Real estate revenues: | |||||||
Lease revenues | $ | 487,480 | $ | 420,563 | |||
Operating property revenues (a) | 23,645 | 21,586 | |||||
Reimbursable tenant costs | 17,409 | 18,034 | |||||
Lease termination income and other | 9,319 | 17,590 | |||||
537,853 | 477,773 | ||||||
Revenues from the Managed Programs: | |||||||
Structuring revenue | 67,735 | 40,492 | |||||
Asset management revenue | 36,236 | 27,910 | |||||
Reimbursable costs | 28,401 | 96,379 | |||||
Dealer manager fees | 2,704 | 17,062 | |||||
Incentive revenue | 203 | — | |||||
135,279 | 181,843 | ||||||
673,132 | 659,616 | ||||||
Operating Expenses | |||||||
Depreciation and amortization | 206,079 | 175,642 | |||||
General and administrative | 78,987 | 62,066 | |||||
Reimbursable tenant and affiliate costs | 45,810 | 114,413 | |||||
Property expenses, excluding reimbursable tenant costs | 31,504 | 29,976 | |||||
Impairment charges | 22,711 | 6,291 | |||||
Stock-based compensation expense | 16,063 | 22,979 | |||||
Merger, property acquisition and other expenses | 12,333 | 31,369 | |||||
Subadvisor fees (b) | 8,555 | 2,850 | |||||
Dealer manager fees and expenses | 7,884 | 15,557 | |||||
429,926 | 461,143 | ||||||
Other Income and Expenses | |||||||
Interest expense | (145,325 | ) | (133,342 | ) | |||
Equity in earnings of equity method investments in the Managed Programs and real estate | 38,630 | 35,324 | |||||
Other income and (expenses) | 9,944 | (12,158 | ) | ||||
Gain on change in control of interests (c) | — | 105,947 | |||||
(96,751 | ) | (4,229 | ) | ||||
Income from continuing operations before income taxes and gain (loss) loss on sale of real estate | 146,455 | 194,244 | |||||
Provision for income taxes | (20,352 | ) | (11,175 | ) | |||
Income from continuing operations before gain (loss) on sale of real estate | 126,103 | 183,069 | |||||
Income from discontinued operations, net of tax | — | 33,018 | |||||
Gain (loss) on sale of real estate, net of tax | 2,980 | (3,482 | ) | ||||
Net Income | 129,083 | 212,605 | |||||
Net income attributable to noncontrolling interests | (7,874 | ) | (4,914 | ) | |||
Net income attributable to redeemable noncontrolling interest | — | (137 | ) | ||||
Net Income Attributable to W. P. Carey | $ | 121,209 | $ | 207,554 | |||
Basic Earnings Per Share | |||||||
Income from continuing operations attributable to W. P. Carey | $ | 1.14 | $ | 1.80 | |||
Income from discontinued operations attributable to W. P. Carey | — | 0.34 | |||||
Net Income Attributable to W. P. Carey | $ | 1.14 | $ | 2.14 | |||
Diluted Earnings Per Share | |||||||
Income from continuing operations attributable to W. P. Carey | $ | 1.13 | $ | 1.78 | |||
Income from discontinued operations attributable to W. P. Carey | — | 0.34 | |||||
Net Income Attributable to W. P. Carey | $ | 1.13 | $ | 2.12 | |||
Weighted-Average Shares Outstanding | |||||||
Basic | 105,627,423 | 96,690,675 | |||||
Diluted | 106,457,495 | 97,728,981 | |||||
Amounts Attributable to W. P. Carey | |||||||
Income from continuing operations, net of tax | $ | 121,209 | $ | 174,362 | |||
Income from discontinued operations, net of tax | — | 33,192 | |||||
Net Income | $ | 121,209 | $ | 207,554 | |||
Distributions Declared Per Share | $ | 2.8615 | $ | 2.7350 |
(a) | Comprised of revenues of $7.9 million from two hotels and revenues of $0.2 million from two self-storage facilities for the three months ended September 30, 2015, and $22.8 million and $0.8 million, respectively, for the nine months ended September 30, 2015. During the three months ended September 30, 2015, we sold one self-storage facility. |
(b) | We earn investment management revenue from CWI and CWI 2 in our role as their advisor. Pursuant to the terms of their subadvisory agreements, however, 20% of the fees we receive from CWI and 25% of the fees we receive from CWI 2 are paid to their respective subadvisors. We also pay the subadvisors 20% and 25% of the net proceeds from any sale, financing, or recapitalization of CWI and CWI 2 securities, respectively. |
(c) | Gain on change in control of interests for the nine months ended September 30, 2014 represents a gain of $75.7 million recognized on our previously-held interest in shares of CPA®:16 – Global common stock, and a gain of $30.2 million recognized on the purchase of the remaining interests in nine investments from CPA®:16 – Global, which we had previously accounted for under the equity method. |
Three Months Ended | |||||||||||
September 30, 2015 | June 30, 2015 | September 30, 2014 | |||||||||
Net income attributable to W. P. Carey | $ | 21,745 | $ | 63,348 | $ | 27,337 | |||||
Adjustments: | |||||||||||
Depreciation and amortization of real property | 74,050 | 63,688 | 58,355 | ||||||||
Impairment charges | 19,438 | 591 | 4,225 | ||||||||
Gain on sale of real estate, net | (1,779 | ) | (16 | ) | (259 | ) | |||||
Proportionate share of adjustments for noncontrolling interests to arrive at FFO | (2,632 | ) | (2,640 | ) | (2,924 | ) | |||||
Proportionate share of adjustments to equity in net income of partially-owned entities to arrive at FFO | 1,293 | 1,296 | 457 | ||||||||
Total adjustments | 90,370 | 62,919 | 59,854 | ||||||||
FFO Attributable to W. P. Carey (as defined by NAREIT) | 112,115 | 126,267 | 87,191 | ||||||||
Adjustments: | |||||||||||
Above- and below-market rent intangible lease amortization, net | 10,184 | 13,220 | 14,432 | ||||||||
Acquisition and strategic initiative expenses | 4,760 | 1,897 | 618 | ||||||||
Stock-based compensation | 3,966 | 5,089 | 7,979 | ||||||||
Other amortization and non-cash items (a) | (2,988 | ) | (6,574 | ) | 5,670 | ||||||
AFFO adjustments to equity earnings from equity investments | 2,760 | 1,426 | 1,094 | ||||||||
(Gain) loss on extinguishment of debt | (2,305 | ) | — | 1,122 | |||||||
Straight-line and other rent adjustments | (1,832 | ) | (3,070 | ) | (1,791 | ) | |||||
Amortization of deferred financing costs | 1,489 | 1,489 | 1,007 | ||||||||
Tax benefit – deferred and other non-cash charges | (1,412 | ) | (1,372 | ) | (1,665 | ) | |||||
Realized losses (gains) on foreign currency, derivatives, and other (b) | 367 | 415 | (272 | ) | |||||||
Other, net | — | — | (86 | ) | |||||||
Proportionate share of adjustments for noncontrolling interests to arrive at AFFO | (156 | ) | 15 | (918 | ) | ||||||
Proportionate share of adjustments to equity in net income of partially-owned entities to arrive at AFFO | (300 | ) | 234 | (14 | ) | ||||||
Total adjustments | 14,533 | 12,769 | 27,176 | ||||||||
AFFO Attributable to W. P. Carey | $ | 126,648 | $ | 139,036 | $ | 114,367 | |||||
Summary | |||||||||||
FFO attributable to W. P. Carey (as defined by NAREIT) | $ | 112,115 | $ | 126,267 | $ | 87,191 | |||||
FFO attributable to W. P. Carey (as defined by NAREIT) per diluted share | $ | 1.05 | $ | 1.19 | $ | 0.86 | |||||
AFFO attributable to W. P. Carey | $ | 126,648 | $ | 139,036 | $ | 114,367 | |||||
AFFO attributable to W. P. Carey per diluted share | $ | 1.19 | $ | 1.31 | $ | 1.13 | |||||
Diluted weighted-average shares outstanding | 106,337,040 | 106,281,983 | 101,130,448 |
Nine Months Ended September 30, | |||||||
2015 | 2014 | ||||||
Net income attributable to W. P. Carey | $ | 121,209 | $ | 207,554 | |||
Adjustments: | |||||||
Depreciation and amortization of real property | 201,629 | 172,329 | |||||
Impairment charges | 22,711 | 6,291 | |||||
Gain on sale of real estate, net | (2,980 | ) | (29,017 | ) | |||
Proportionate share of adjustments for noncontrolling interests to arrive at FFO | (7,925 | ) | (9,002 | ) | |||
Proportionate share of adjustments to equity in net income of partially-owned entities to arrive at FFO | 3,867 | 2,255 | |||||
Total adjustments | 217,302 | 142,856 | |||||
FFO Attributable to W. P. Carey (as defined by NAREIT) | 338,511 | 350,410 | |||||
Adjustments: | |||||||
Above- and below-market rent intangible lease amortization, net | 37,154 | 45,042 | |||||
Stock-based compensation | 16,063 | 22,979 | |||||
Merger, property acquisition and other expenses (c) | 12,333 | 45,236 | |||||
Straight-line and other rent adjustments | (7,839 | ) | (13,459 | ) | |||
AFFO adjustments to equity earnings from equity investments | 5,323 | 4,965 | |||||
Tax benefit – deferred and other non-cash charges | (4,530 | ) | (13,841 | ) | |||
Amortization of deferred financing costs | 4,143 | 3,031 | |||||
Other amortization and non-cash items (a) | (2,873 | ) | 8,244 | ||||
(Gain) loss on extinguishment of debt | (2,305 | ) | 9,835 | ||||
Realized losses on foreign currency, derivatives, and other | 228 | 548 | |||||
Gain on change in control of interests (d) | — | (105,947 | ) | ||||
Other, net (e) | — | (65 | ) | ||||
Proportionate share of adjustments for noncontrolling interests to arrive at AFFO | (355 | ) | (2,076 | ) | |||
Proportionate share of adjustments to equity in net income of partially-owned entities to arrive at AFFO | (203 | ) | (41 | ) | |||
Total adjustments | 57,139 | 4,451 | |||||
AFFO Attributable to W. P. Carey | $ | 395,650 | $ | 354,861 | |||
Summary | |||||||
FFO attributable to W. P. Carey (as defined by NAREIT) | $ | 338,511 | $ | 350,410 | |||
FFO attributable to W. P. Carey (as defined by NAREIT) per diluted share | $ | 3.18 | $ | 3.59 | |||
AFFO attributable to W. P. Carey | $ | 395,650 | $ | 354,861 | |||
AFFO attributable to W. P. Carey per diluted share | $ | 3.72 | $ | 3.63 | |||
Diluted weighted-average shares outstanding | 106,457,495 | 97,728,981 |
(a) | Represents primarily unrealized gains and losses from foreign exchange and derivatives, as well as amounts for the amortization of contracts. |
(b) | Effective January 1, 2015, we no longer adjust for realized gains or losses on foreign currency derivatives. For the three months ended September 30, 2014, realized gains on foreign exchange derivatives were $0.3 million, and for the nine months ended September 30, 2014 realized losses on foreign exchange derivatives were $0.5 million. |
(c) | Amount for the nine months ended September 30, 2014 includes reported merger costs as well as income tax expense incurred in connection with the CPA®:16 Merger. Income tax expense incurred in connection with the CPA®:16 Merger represents the current portion of income tax expense, including the permanent difference incurred upon recognition of deferred revenue associated with the accelerated vesting of shares previously issued by CPA®:16 – Global for asset management and performance fees. |
(d) | Gain on change in control of interests for the nine months ended September 30, 2014 represents a gain of $75.7 million recognized on our previously-held interest in shares of CPA®:16 – Global common stock, and a gain of $30.2 million recognized on the purchase of the remaining interests in nine investments from CPA®:16 – Global, which we had previously accounted for under the equity method. |
(e) | Other, net for the nine months ended September 30, 2014 primarily consists of proceeds from a bankruptcy settlement claim with U.S. Aluminum of Canada, a former CPA®:16 – Global tenant that was acquired as part of the CPA®:16 Merger on January 31, 2014, and under GAAP was accounted for in purchase accounting. |
Table of Contents |
Overview | |
Financial Results | |
Balance Sheets and Capitalization | |
Owned Real Estate Portfolio | |
Investment Management | |
Appendix | |
Summary Metrics |
Financial Results | |||||||||||||||
Real estate revenues, excluding reimbursable tenant costs – consolidated ($'000) | $ | 175,836 | |||||||||||||
Revenues from the Managed Programs, excluding reimbursable costs – consolidated ($'000) | 22,335 | ||||||||||||||
Net income attributable to W. P. Carey ($'000) | 21,745 | ||||||||||||||
Net income attributable to W. P. Carey per diluted share | 0.20 | ||||||||||||||
Normalized pro rata cash NOI ($'000) (a) (b) | 168,345 | ||||||||||||||
Adjusted EBITDA ($'000) (b) (c) | 181,563 | ||||||||||||||
AFFO attributable to W. P. Carey ($'000) (b) (d) | 126,648 | ||||||||||||||
AFFO attributable to W. P. Carey per diluted share (b) (d) | 1.19 | ||||||||||||||
Distributions declared per share – third quarter | 0.955 | ||||||||||||||
Distributions declared per share – third quarter annualized | 3.82 | ||||||||||||||
Dividend yield – annualized, based on quarter end share price of $57.81 | 6.6 | % | |||||||||||||
Dividend payout ratio – third quarter (e) | 80.3 | % | |||||||||||||
Balance Sheet and Capitalization | |||||||||||||||
Equity market capitalization – based on quarter end share price of $57.81 ($'000) | $ | 6,035,492 | |||||||||||||
Pro rata net debt ($'000) (f) | 4,338,343 | ||||||||||||||
Enterprise value ($'000) | 10,373,835 | ||||||||||||||
Total capitalization (g) | 10,565,153 | ||||||||||||||
Total consolidated debt ($'000) | 4,600,108 | ||||||||||||||
Gross assets ($'000) (h) | 9,240,094 | ||||||||||||||
Liquidity ($'000) (i) | 1,254,732 | ||||||||||||||
Pro rata net debt to enterprise value (b) | 41.8 | % | |||||||||||||
Pro rata net debt to adjusted EBITDA (annualized) (b) (c) | 6.0x | ||||||||||||||
Total consolidated debt to gross assets | 49.8 | % | |||||||||||||
Weighted-average interest rate (b) | 4.1 | % | |||||||||||||
Weighted-average debt maturity (years) (b) | 5.0 | ||||||||||||||
Standard & Poor's Rating Services – issuer rating (September 2014) | BBB (stable) | ||||||||||||||
Moody's Investors Service – corporate rating (August 2014) | Baa2 (stable) | ||||||||||||||
Owned Real Estate Portfolio (Pro Rata) | |||||||||||||||
Number of net-leased properties | 854 | ||||||||||||||
Number of operating properties | 3 | ||||||||||||||
Number of tenants – net-leased properties | 221 | ||||||||||||||
ABR from Investment Grade tenants as a % of total ABR (net-leased properties) (j) | 23.5 | % | |||||||||||||
ABR from Implied Investment Grade tenants as a % of total ABR (net-leased properties) (k) | 8.7 | % | |||||||||||||
Net-leased properties – square footage (millions) | 89.8 | ||||||||||||||
Occupancy – net-leased properties (l) | 98.8 | % | |||||||||||||
Weighted-average remaining lease term (years) | 8.9 | ||||||||||||||
Acquisitions – third quarter ($'000) | $ | 97,670 | |||||||||||||
Dispositions – third quarter ($'000) | 6,668 | ||||||||||||||
Managed Programs | CPA® REITs | CWI REITs | CCIF | Total | |||||||||||
AUM ($'000) (m) | $ | 7,527,318 | $ | 2,879,197 | $ | 74,956 | $ | 10,481,471 | |||||||
Acquisitions – third quarter ($'000) | 191,218 | — | — | 191,218 | |||||||||||
Dispositions – third quarter ($'000) | 35,675 | — | — | 35,675 |
![]() | Investing for the long runTM | 1 |
(a) | Normalized pro rata cash NOI is a non-GAAP measure. See the Terms and Definitions section in the Appendix for a description of our non-GAAP measures and for details on how normalized pro rata cash NOI is calculated. |
(b) | Presented on a pro rata basis. See the Terms and Definitions section in the Appendix for a description of pro rata. |
(c) | Adjusted EBITDA is a non-GAAP measure. See the Terms and Definitions section in the Appendix for a description of our non-GAAP measures. |
(d) | AFFO is a non-GAAP measure. See the Terms and Definitions section in the Appendix for a description of our non-GAAP measures. |
(e) | Represents distributions declared per share divided by diluted AFFO per share. |
(f) | Represents total pro rata debt outstanding less consolidated cash and cash equivalents. See the Terms and Definitions section in the Appendix for a description of pro rata. |
(g) | Represents equity market capitalization plus total pro rata debt outstanding. See the Terms and Definitions section in the Appendix for a description of pro rata. |
(h) | Gross assets represent consolidated total assets before accumulated depreciation. |
(i) | Represents availability on our Senior Unsecured Credit Facility - Revolver plus cash and cash equivalents. |
(j) | Includes tenants or guarantors with a rating of BBB- or higher from Standard & Poor’s Rating Services or Baa3 or higher from Moody’s Investors Services. Percentage of portfolio based on ABR, as of September 30, 2015. |
(k) | Includes subsidiaries of non-guarantor parent companies with a rating of BBB- or higher from Standard & Poor’s Rating Services or Baa3 or higher from Moody’s Investors Services. Percentage of portfolio based on ABR, as of September 30, 2015. |
(l) | Occupancy for our self-storage property was 89.5% as of September 30, 2015. Occupancy for our two hotels was 84.1% for the three months ended September 30, 2015. |
(m) | Represents estimated value of real estate assets plus cash and cash equivalents, less distributions payable. |
![]() | Investing for the long runTM | 2 |
Components of Net Asset Value |
Real Estate | Three Months Ended Sep. 30, 2015 | Annualized | |||||||
Owned Real Estate: | A | A x 4 | |||||||
Normalized pro rata cash NOI (a) | $ | 168,345 | $ | 673,380 | |||||
Operating Partnership Interests in Real Estate Cash Flow of Managed REITs: (b) | |||||||||
CPA®:17 – Global (10% of Available Cash) | 5,837 | 23,348 | |||||||
CPA®:18 – Global (10% of Available Cash) | 1,705 | 6,820 | |||||||
CWI (8% of Available Cash) | 1,971 | 7,884 | |||||||
CWI 2 (7.5% of Available Cash) | 133 | 532 | |||||||
9,646 | 38,584 | ||||||||
Investment Management | |||||||||
Investment Management Revenues | |||||||||
Asset management revenue | 13,004 | 52,016 | |||||||
Structuring revenue | 8,207 | 32,828 | |||||||
21,211 | 84,844 | ||||||||
Balance Sheet - Selected Information (Consolidated Unless Otherwise Stated) | As of Sep. 30, 2015 | ||||||||
Assets | |||||||||
Book value of real estate excluded from NOI (c) | $ | 55,908 | |||||||
Cash and cash equivalents | 191,318 | ||||||||
Due from affiliates | 147,700 | ||||||||
Other assets, net: | |||||||||
Restricted cash, including escrow | $ | 83,527 | |||||||
Securities and derivatives | 51,987 | ||||||||
Accounts receivable | 51,367 | ||||||||
Deferred charges | 48,611 | ||||||||
Other intangible assets, net | 43,337 | ||||||||
Straight-line rent adjustments | 37,945 | ||||||||
Prepaid expenses | 16,847 | ||||||||
Note receivable | 10,756 | ||||||||
Leasehold improvements, furniture and fixtures | 8,803 | ||||||||
Other | 189 | ||||||||
Total other assets, net | $ | 353,369 | |||||||
Liabilities | |||||||||
Total pro rata debt outstanding (d) | $ | 4,529,661 | |||||||
Distributions payable | 101,645 | ||||||||
Deferred income taxes | 87,570 | ||||||||
Accounts payable, accrued expenses and other liabilities: | |||||||||
Accounts payable and accrued expenses | $ | 131,577 | |||||||
Prepaid and deferred rents | 93,544 | ||||||||
Tenant security deposits | 27,109 | ||||||||
Accrued taxes payable | 22,376 | ||||||||
Straight-line rent adjustments | 2,826 | ||||||||
Other | 21,082 | ||||||||
Total accounts payable, accrued expenses and other liabilities | $ | 298,514 |
![]() | Investing for the long runTM | 3 |
Other | Number of Shares Owned | NAV/Offering Price Per Share | Implied Value | |||||||
A | B | A x B | ||||||||
Ownership in Managed Programs: (e) | ||||||||||
CPA®:17 – Global (3.0% ownership) | 10,029,140 | $ | 9.72 | (f) | $ | 97,483 | ||||
CPA®:18 – Global (0.6% ownership) | 751,111 | 10.00 | (g) | 7,511 | ||||||
CWI (1.1% ownership) | 1,501,028 | 10.30 | (h) | 15,461 | ||||||
CWI 2 (0.6% ownership) | 62,641 | 10.00 | (i) | 626 | ||||||
CCIF (50.0% ownership) (j) | 2,777,778 | 9.00 | 25,000 | |||||||
$ | 146,081 |
(a) | Normalized pro rata cash NOI is a non-GAAP measure. See the Terms and Definitions section in the Appendix for a description of our non-GAAP measures and for details on how normalized pro rata cash NOI is calculated. |
(b) | We are entitled to receive distributions of our share of earnings up to 10% of the Available Cash of each of the Managed REITs, as defined in their respective operating partnership agreements. However, 20% of the Available Cash from CWI and 25% of the Available Cash from CWI 2 is paid to their respective subadvisors. |
(c) | Represents the value of real estate not included in net operating income, such as vacant assets and in-progress build-to-suit properties. |
(d) | See the Terms and Definitions section in the Appendix for a description of pro rata. |
(e) | Excludes operating partnership interests. |
(f) | The estimated net asset value per share, or NAV, for CPA®:17 – Global was determined as of December 31, 2014. We calculated CPA®:17 – Global’s NAV by relying in part on an estimate of the fair market value of CPA®:17 – Global’s real estate portfolio and debt provided by third parties, adjusted to give effect to the estimated fair value of mortgage loans encumbering its assets (also provided by a third party) as well as other adjustments. |
(g) | The offering price shown is the initial offering price for shares of CPA®:18 – Global’s Class A common stock, as WPC owns shares of CPA®:18 – Global’s Class A common stock. |
(h) | CWI’s NAV was calculated by WPC, relying in part on appraisals of the fair market value of CWI’s real estate portfolio and mortgage debt provided by third parties. The net amount was then adjusted for estimated disposition costs (including estimates of expenses, commissions and fees payable to WPC) and CWI’s other net assets and liabilities at the same date. CWI’s NAV was based on shares of common stock outstanding at September 30, 2014. |
(i) | The offering price shown is the initial offering price for shares of CWI 2’s Class A common stock, as WPC owns shares of CWI 2’s Class A common stock. |
(j) | In December 2014, we purchased 2,777,778 shares of CCIF at $9.00 per share for a total purchase price of $25.0 million. We account for our interest in this investment using the equity method of accounting because we share the decision making with the third-party investment partner. As of September 30, 2015, CCIF had not yet admitted any additional shareholders. The $9.00 purchase price does not reflect the NAV at September 30, 2015. |
![]() | Investing for the long runTM | 4 |
![]() | Investing for the long runTM | 5 |
Consolidated Statements of Income – Last Five Quarters |
Three Months Ended | |||||||||||||||||||
Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | |||||||||||||||
Revenues | |||||||||||||||||||
Real estate revenues: | |||||||||||||||||||
Lease revenues | $ | 164,741 | $ | 162,574 | $ | 160,165 | $ | 153,265 | $ | 149,243 | |||||||||
Operating property revenues (a) | 8,107 | 8,426 | 7,112 | 7,339 | 8,344 | ||||||||||||||
Reimbursable tenant costs | 5,340 | 6,130 | 5,939 | 6,828 | 6,271 | ||||||||||||||
Lease termination income and other | 2,988 | 3,122 | 3,209 | 177 | 1,415 | ||||||||||||||
181,176 | 180,252 | 176,425 | 167,609 | 165,273 | |||||||||||||||
Revenues from the Managed Programs: | |||||||||||||||||||
Asset management revenue | 13,004 | 12,073 | 11,159 | 10,154 | 9,088 | ||||||||||||||
Reimbursable costs | 11,155 | 7,639 | 9,607 | 33,833 | 14,722 | ||||||||||||||
Structuring revenue | 8,207 | 37,808 | 21,720 | 30,765 | 5,487 | ||||||||||||||
Dealer manager fees | 1,124 | 307 | 1,274 | 6,470 | 2,436 | ||||||||||||||
Incentive revenue | — | — | 203 | — | — | ||||||||||||||
33,490 | 57,827 | 43,963 | 81,222 | 31,733 | |||||||||||||||
214,666 | 238,079 | 220,388 | 248,831 | 197,006 | |||||||||||||||
Operating Expenses | |||||||||||||||||||
Depreciation and amortization | 75,512 | 65,166 | 65,400 | 61,481 | 59,524 | ||||||||||||||
General and administrative | 22,842 | 26,376 | 29,768 | 29,523 | 20,261 | ||||||||||||||
Impairment charges | 19,438 | 591 | 2,683 | 16,776 | 4,225 | ||||||||||||||
Reimbursable tenant and affiliate costs | 16,495 | 13,769 | 15,546 | 40,661 | 20,993 | ||||||||||||||
Property expenses, excluding reimbursable tenant costs | 11,120 | 11,020 | 9,364 | 7,749 | 10,346 | ||||||||||||||
Acquisition and strategic initiative expenses | 4,760 | 1,897 | 5,676 | 3,096 | 618 | ||||||||||||||
Stock-based compensation expense | 3,966 | 5,089 | 7,009 | 8,096 | 7,979 | ||||||||||||||
Dealer manager fees and expenses | 3,185 | 2,327 | 2,372 | 6,203 | 3,847 | ||||||||||||||
Subadvisor fees (b) | 1,748 | 4,147 | 2,661 | 2,651 | 381 | ||||||||||||||
159,066 | 130,382 | 140,479 | 176,236 | 128,174 | |||||||||||||||
Other Income and Expenses | |||||||||||||||||||
Interest expense | (49,683 | ) | (47,693 | ) | (47,949 | ) | (44,780 | ) | (46,534 | ) | |||||||||
Equity in earnings of equity method investments in the Managed Programs and real estate | 12,635 | 14,272 | 11,723 | 8,792 | 11,610 | ||||||||||||||
Other income and (expenses) | 6,608 | 7,641 | (4,306 | ) | (2,073 | ) | (5,141 | ) | |||||||||||
(30,440 | ) | (25,780 | ) | (40,532 | ) | (38,061 | ) | (40,065 | ) | ||||||||||
Income from continuing operations before income taxes and gain on sale of real estate | 25,160 | 81,917 | 39,377 | 34,534 | 28,767 | ||||||||||||||
Provision for income taxes | (3,361 | ) | (15,010 | ) | (1,980 | ) | (6,434 | ) | (901 | ) | |||||||||
Income from continuing operations before gain on sale of real estate | 21,799 | 66,907 | 37,397 | 28,100 | 27,866 | ||||||||||||||
Income from discontinued operations, net of tax | — | — | — | 300 | 190 | ||||||||||||||
Gain on sale of real estate, net of tax | 1,779 | 16 | 1,185 | 5,063 | 260 | ||||||||||||||
Net Income | 23,578 | 66,923 | 38,582 | 33,463 | 28,316 | ||||||||||||||
Net income attributable to noncontrolling interests | (1,833 | ) | (3,575 | ) | (2,466 | ) | (1,470 | ) | (993 | ) | |||||||||
Net loss attributable to redeemable noncontrolling interest | — | — | — | 279 | 14 | ||||||||||||||
Net Income Attributable to W. P. Carey | $ | 21,745 | $ | 63,348 | $ | 36,116 | $ | 32,272 | $ | 27,337 | |||||||||
Basic Earnings Per Share | |||||||||||||||||||
Income from continuing operations attributable to W. P. Carey | $ | 0.20 | $ | 0.60 | $ | 0.34 | $ | 0.31 | $ | 0.27 | |||||||||
Income from discontinued operations attributable to W. P. Carey | — | — | — | — | — | ||||||||||||||
Net Income Attributable to W. P. Carey | $ | 0.20 | $ | 0.60 | $ | 0.34 | $ | 0.31 | $ | 0.27 | |||||||||
Diluted Earnings Per Share | |||||||||||||||||||
Income from continuing operations attributable to W. P. Carey | $ | 0.20 | $ | 0.59 | $ | 0.34 | $ | 0.30 | $ | 0.27 | |||||||||
Income from discontinued operations attributable to W. P. Carey | — | — | — | — | — | ||||||||||||||
Net Income Attributable to W. P. Carey | $ | 0.20 | $ | 0.59 | $ | 0.34 | $ | 0.30 | $ | 0.27 | |||||||||
Weighted-Average Shares Outstanding | |||||||||||||||||||
Basic | 105,813,237 | 105,764,032 | 105,303,679 | 104,894,480 | 100,282,082 | ||||||||||||||
Diluted | 106,337,040 | 106,281,983 | 106,109,877 | 105,794,118 | 101,130,448 | ||||||||||||||
Amounts Attributable to W. P. Carey | |||||||||||||||||||
Income from continuing operations, net of tax | $ | 21,745 | $ | 63,348 | $ | 36,116 | $ | 31,967 | $ | 27,151 | |||||||||
Income from discontinued operations, net of tax | — | — | — | 305 | 186 | ||||||||||||||
Net Income | $ | 21,745 | $ | 63,348 | $ | 36,116 | $ | 32,272 | $ | 27,337 | |||||||||
Distributions Declared Per Share | $ | 0.9550 | $ | 0.9540 | $ | 0.9525 | $ | 0.9500 | $ | 0.9400 |
![]() | Investing for the long runTM | 6 |
(a) | Comprised of revenues of $7.9 million from two hotels and revenues of $0.2 million from two self-storage facilities for the three months ended September 30, 2015. During the three months ended September 30, 2015, we sold one self-storage facility. |
(b) | We earn investment management revenue from CWI and CWI 2 in our role as their advisor. Pursuant to the terms of their subadvisory agreements, however, 20% of the fees we receive from CWI and 25% of the fees we receive from CWI 2 are paid to their respective subadvisors. We also pay the subadvisors 20% and 25% of the net proceeds from any sale, financing or recapitalization of CWI and CWI 2 securities, respectively. |
![]() | Investing for the long runTM | 7 |
Reconciliation of Net Income to AFFO – Last Five Quarters |
Three Months Ended | |||||||||||||||||||
Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | |||||||||||||||
Net income attributable to W. P. Carey | $ | 21,745 | $ | 63,348 | $ | 36,116 | $ | 32,272 | $ | 27,337 | |||||||||
Adjustments: | |||||||||||||||||||
Depreciation and amortization of real property | 74,050 | 63,688 | 63,891 | 60,363 | 58,355 | ||||||||||||||
Impairment charges | 19,438 | 591 | 2,683 | 16,776 | 4,225 | ||||||||||||||
Gain on sale of real estate, net | (1,779 | ) | (16 | ) | (1,185 | ) | (5,062 | ) | (259 | ) | |||||||||
Proportionate share of adjustments for noncontrolling interests to arrive at FFO | (2,632 | ) | (2,640 | ) | (2,653 | ) | (2,806 | ) | (2,924 | ) | |||||||||
Proportionate share of adjustments to equity in net income of partially-owned entities to arrive at FFO | 1,293 | 1,296 | 1,278 | 3,126 | 457 | ||||||||||||||
Total adjustments | 90,370 | 62,919 | 64,014 | 72,397 | 59,854 | ||||||||||||||
FFO Attributable to W. P. Carey (as defined by NAREIT) (a) | 112,115 | 126,267 | 100,130 | 104,669 | 87,191 | ||||||||||||||
Adjustments: | |||||||||||||||||||
Above- and below-market rent intangible lease amortization, net | 10,184 | 13,220 | 13,750 | 14,008 | 14,432 | ||||||||||||||
Acquisition and strategic initiative expenses | 4,760 | 1,897 | 5,676 | 3,097 | 618 | ||||||||||||||
Stock-based compensation | 3,966 | 5,089 | 7,009 | 8,096 | 7,979 | ||||||||||||||
Other amortization and non-cash items (b) | (2,988 | ) | (6,574 | ) | 6,690 | 2,099 | 5,670 | ||||||||||||
AFFO adjustments to equity earnings from equity investments | 2,760 | 1,426 | 1,137 | 1,225 | 1,094 | ||||||||||||||
(Gain) loss on extinguishment of debt | (2,305 | ) | — | — | — | 1,122 | |||||||||||||
Straight-line and other rent adjustments | (1,832 | ) | (3,070 | ) | (2,937 | ) | (3,657 | ) | (1,791 | ) | |||||||||
Amortization of deferred financing costs | 1,489 | 1,489 | 1,165 | 1,046 | 1,007 | ||||||||||||||
Tax benefit – deferred and other non-cash charges | (1,412 | ) | (1,372 | ) | (1,745 | ) | (8,741 | ) | (1,665 | ) | |||||||||
Realized losses (gains) on foreign currency, derivatives, and other (c) | 367 | 415 | (554 | ) | (643 | ) | (272 | ) | |||||||||||
Other, net (d) | — | — | — | 5,434 | (86 | ) | |||||||||||||
Proportionate share of adjustments for noncontrolling interests to arrive at AFFO | (156 | ) | 15 | (214 | ) | (930 | ) | (918 | ) | ||||||||||
Proportionate share of adjustments to equity in net income of partially-owned entities to arrive at AFFO | (300 | ) | 234 | (137 | ) | (98 | ) | (14 | ) | ||||||||||
Total adjustments | 14,533 | 12,769 | 29,840 | 20,936 | 27,176 | ||||||||||||||
AFFO Attributable to W. P. Carey (a) | $ | 126,648 | $ | 139,036 | $ | 129,970 | $ | 125,605 | $ | 114,367 | |||||||||
Summary | |||||||||||||||||||
FFO attributable to W. P. Carey (as defined by NAREIT) (a) | $ | 112,115 | $ | 126,267 | $ | 100,130 | $ | 104,669 | $ | 87,191 | |||||||||
FFO attributable to W. P. Carey (as defined by NAREIT) per diluted share (a) | $ | 1.05 | $ | 1.19 | $ | 0.94 | $ | 0.99 | $ | 0.86 | |||||||||
AFFO attributable to W. P. Carey (a) | $ | 126,648 | $ | 139,036 | $ | 129,970 | $ | 125,605 | $ | 114,367 | |||||||||
AFFO attributable to W. P. Carey per diluted share (a) | $ | 1.19 | $ | 1.31 | $ | 1.22 | $ | 1.19 | $ | 1.13 | |||||||||
Diluted weighted-average shares outstanding | 106,337,040 | 106,281,983 | 106,109,877 | 105,794,118 | 101,130,448 |
(a) | FFO and AFFO are non-GAAP measures. See the Terms and Definitions section in the Appendix for a description of our non-GAAP measures. |
(b) | Represents primarily unrealized gains and losses from foreign exchange and derivatives. |
(c) | Effective prospectively on January 1, 2015, we no longer adjust for realized gains or losses on foreign exchange derivatives. Realized gains on derivatives were $0.8 million and $0.3 million for the three months ended December 31, 2014 and September 30, 2014, respectively. |
(d) | Other, net for the three months ended December 31, 2014 primarily consists of proceeds from a bankruptcy settlement claim with U.S. Aluminum of Canada, a former CPA®:16 – Global tenant that was acquired as part of the CPA®:16 merger on January 31, 2014, which under GAAP was accounted for in purchase accounting. |
![]() | Investing for the long runTM | 8 |
Reconciliation of Consolidated Statement of Income to AFFO |
GAAP Basis (a) | Add: Equity Investments (b) | Less: Noncontrolling Interests (c) | WPC's Pro Rata Share (d) | AFFO Adjustments | AFFO | ||||||||||||||||||
Revenues | A | B | C | A + B + C = D | E | D + E | |||||||||||||||||
Real estate revenues: | |||||||||||||||||||||||
Lease revenues (e) | $ | 164,741 | $ | 4,726 | $ | (5,819 | ) | $ | 163,648 | $ | 6,525 | (g) | $ | 170,173 | |||||||||
Operating property revenues: | |||||||||||||||||||||||
Hotel revenues | 7,860 | — | — | 7,860 | — | 7,860 | |||||||||||||||||
Self-storage revenues | 247 | — | — | 247 | — | 247 | |||||||||||||||||
Reimbursable tenant costs | 5,340 | 24 | (106 | ) | 5,258 | — | 5,258 | ||||||||||||||||
Lease termination income and other | 2,988 | — | (1 | ) | 2,987 | 1,176 | 4,163 | ||||||||||||||||
181,176 | 4,750 | (5,926 | ) | 180,000 | 7,701 | 187,701 | |||||||||||||||||
Revenues from the Managed Programs: | |||||||||||||||||||||||
Asset management revenue | 13,004 | — | (14 | ) | 12,990 | — | 12,990 | ||||||||||||||||
Reimbursable costs | 11,155 | — | — | 11,155 | — | 11,155 | |||||||||||||||||
Structuring revenue | 8,207 | — | — | 8,207 | — | 8,207 | |||||||||||||||||
Dealer manager fees | 1,124 | — | — | 1,124 | — | 1,124 | |||||||||||||||||
33,490 | — | (14 | ) | 33,476 | — | 33,476 | |||||||||||||||||
214,666 | 4,750 | (5,940 | ) | 213,476 | 7,701 | 221,177 | |||||||||||||||||
Operating Expenses | |||||||||||||||||||||||
Depreciation and amortization | 75,512 | 357 | (2,639 | ) | 73,230 | (71,802 | ) | (h) | 1,428 | ||||||||||||||
General and administrative | 22,842 | 1 | (36 | ) | 22,807 | — | 22,807 | ||||||||||||||||
Impairment charges | 19,438 | — | — | 19,438 | (19,438 | ) | (i) | — | |||||||||||||||
Reimbursable tenant and affiliate costs | 16,495 | 22 | (109 | ) | 16,408 | — | 16,408 | ||||||||||||||||
Property expenses, excluding reimbursable tenant costs: | |||||||||||||||||||||||
Hotel expenses | 5,355 | — | — | 5,355 | — | 5,355 | |||||||||||||||||
Self-storage expenses | 133 | — | — | 133 | — | 133 | |||||||||||||||||
Non-reimbursable property expenses | 5,632 | 24 | (11 | ) | 5,645 | 184 | 5,829 | ||||||||||||||||
Acquisition and strategic initiative expenses | 4,760 | — | — | 4,760 | (4,760 | ) | (j) | — | |||||||||||||||
Stock-based compensation expense | 3,966 | — | — | 3,966 | (3,966 | ) | (i) | — | |||||||||||||||
Dealer manager fees and expenses | 3,185 | — | — | 3,185 | — | 3,185 | |||||||||||||||||
Subadvisor fees (f) | 1,748 | — | — | 1,748 | — | 1,748 | |||||||||||||||||
159,066 | 404 | (2,795 | ) | 156,675 | (99,782 | ) | 56,893 | ||||||||||||||||
Other Income and Expenses | |||||||||||||||||||||||
Interest expense | (49,683 | ) | (588 | ) | 1,839 | (48,432 | ) | 835 | (k) | (47,597 | ) | ||||||||||||
Equity in earnings of equity method investments in the Managed Programs and real estate: | |||||||||||||||||||||||
Joint ventures | 3,097 | (3,568 | ) | (1 | ) | (472 | ) | 936 | (l) | 464 | |||||||||||||
Income related to our ownership in the Managed Programs | (711 | ) | — | — | (711 | ) | 2,760 | (m) | 2,049 | ||||||||||||||
Income related to our general partnership interests in the Managed Programs | 10,249 | — | (492 | ) | 9,757 | — | 9,757 | ||||||||||||||||
Equity in earnings of equity method investments in the Managed Programs and real estate | 12,635 | (3,568 | ) | (493 | ) | 8,574 | 3,696 | 12,270 | |||||||||||||||
Other income and (expenses) | 6,608 | (5 | ) | (54 | ) | 6,549 | (3,871 | ) | (n) | 2,678 | |||||||||||||
(30,440 | ) | (4,161 | ) | 1,292 | (33,309 | ) | 660 | (32,649 | ) | ||||||||||||||
Income before income taxes and gain on sale of real estate | 25,160 | 185 | (1,853 | ) | 23,492 | 108,143 | 131,635 | ||||||||||||||||
Provision for income taxes | (3,361 | ) | (185 | ) | 34 | (3,512 | ) | (1,461 | ) | (o) | (4,973 | ) | |||||||||||
Income before gain on sale of real estate | 21,799 | — | (1,819 | ) | 19,980 | 106,682 | 126,662 | ||||||||||||||||
Gain on sale of real estate, net of tax | 1,779 | — | — | 1,779 | (1,779 | ) | — | ||||||||||||||||
Net Income | 23,578 | — | (1,819 | ) | 21,759 | 104,903 | 126,662 | ||||||||||||||||
Net income attributable to noncontrolling interests | (1,833 | ) | — | 1,819 | (14 | ) | — | (14 | ) | ||||||||||||||
Net Income / AFFO Attributable to W. P. Carey | $ | 21,745 | $ | — | $ | — | $ | 21,745 | $ | 104,903 | $ | 126,648 | |||||||||||
Earnings / AFFO Attributable to W. P. Carey Per Diluted Share | $ | 0.20 | $ | 1.19 |
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(a) | Consolidated amounts shown represent WPC's Consolidated Statement of Income for the three months ended September 30, 2015. |
(b) | Represents the break-out by line item of amounts recorded in Equity in earnings of equity method investments in real estate and the Managed Programs and joint ventures. |
(c) | Represents the break-out by line item of amounts recorded in Net income attributable to noncontrolling interests and Net loss attributable to redeemable noncontrolling interest. |
(d) | Represents our share in fully and co-owned entities. See the Terms and Definitions section in the Appendix for a description of pro rata. |
(e) | Lease revenues on a pro rata basis in this schedule reflect only revenues from continuing operations. There were no lease revenues from discontinued operations for the three months ended September 30, 2015. |
(f) | We earn investment management revenue from CWI and CWI 2 in our role as their advisor. Pursuant to the terms of their subadvisory agreements, however, 20% of the fees we receive from CWI and 25% of the fees we receive from CWI 2 are paid to their respective subadvisors. We also pay the subadvisors 20% and 25% of the net proceeds from any sale, financing, or recapitalization of CWI and CWI 2 securities, respectively. |
(g) | For the three months ended September 30, 2015, represents the reversal of amortization of above- or below-market lease intangibles of $9.6 million and the elimination of non-cash amounts related to straight-line rent of $3.1 million. |
(h) | Adjustment is a non-cash adjustment excluding corporate depreciation and amortization. |
(i) | Adjustment to exclude a non-cash item. |
(j) | Adjustment to exclude a non-core item. |
(k) | Represents the elimination of non-cash components of interest expense, such as deferred financing fees, debt premiums and discounts. |
(l) | Represents our equity investment in Soho House, where we also have an outstanding loan that we receive interest income from. |
(m) | Adjustments include MFFO from the Managed REITs in place of our pro rata share of net income from our ownership in the Managed REITs. |
(n) | Represents eliminations or (gains) losses related to the extinguishment of debt, foreign currency, derivatives and other items related to continuing operations. |
(o) | Represents elimination of deferred taxes. |
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Capital Expenditures |
Three Months Ended September 30, 2015 | ||||
Tenant Improvements and Leasing Costs | ||||
Tenant improvements | $ | 941 | ||
Leasing costs | 957 | |||
Maintenance Capital Expenditures | ||||
Net lease properties | $ | 645 | ||
Operating properties | 54 | |||
Non-maintenance Capital Expenditures | ||||
Development, redevelopment, expansion and other capital expenditures | $ | 5,934 |
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Consolidated Balance Sheets |
Sep. 30, 2015 | Dec. 31, 2014 | ||||||
Assets | |||||||
Investments in real estate: | |||||||
Real estate, at cost | $ | 5,297,782 | $ | 5,006,682 | |||
Operating real estate, at cost | 82,648 | 84,885 | |||||
Accumulated depreciation | (351,666 | ) | (258,493 | ) | |||
Net investments in properties | 5,028,764 | 4,833,074 | |||||
Net investments in direct financing leases | 780,239 | 816,226 | |||||
Assets held for sale | 4,863 | 7,255 | |||||
Net investments in real estate | 5,813,866 | 5,656,555 | |||||
Cash and cash equivalents | 191,318 | 198,683 | |||||
Equity investments in the Managed Programs and real estate (a) | 275,883 | 249,403 | |||||
Due from affiliates | 147,700 | 34,477 | |||||
In-place lease and tenant relationship intangible assets, net | 928,962 | 993,819 | |||||
Goodwill | 684,576 | 692,415 | |||||
Above-market rent intangible assets, net | 492,754 | 522,797 | |||||
Other assets, net | 353,369 | 300,330 | |||||
Total Assets | $ | 8,888,428 | $ | 8,648,479 | |||
Liabilities and Equity | |||||||
Liabilities: | |||||||
Non-recourse debt, net | $ | 2,412,612 | $ | 2,532,683 | |||
Senior Unsecured Notes, net | 1,502,007 | 498,345 | |||||
Senior Unsecured Credit Facility - Revolver | 435,489 | 807,518 | |||||
Senior Unsecured Credit Facility - Term Loan | 250,000 | 250,000 | |||||
Accounts payable, accrued expenses and other liabilities | 298,514 | 293,846 | |||||
Below-market rent and other intangible liabilities, net | 165,647 | 175,070 | |||||
Deferred income taxes | 87,570 | 94,133 | |||||
Distributions payable | 101,645 | 100,078 | |||||
Total liabilities | 5,253,484 | 4,751,673 | |||||
Redeemable noncontrolling interest | 14,622 | 6,071 | |||||
Equity: | |||||||
W. P. Carey stockholders' equity: | |||||||
Preferred stock (none issued) | — | — | |||||
Common stock | 105 | 105 | |||||
Additional paid-in capital | 4,300,859 | 4,322,273 | |||||
Distributions in excess of accumulated earnings | (655,095 | ) | (465,606 | ) | |||
Deferred compensation obligation | 57,395 | 30,624 | |||||
Accumulated other comprehensive loss | (156,669 | ) | (75,559 | ) | |||
Less: treasury stock at cost | (60,948 | ) | (60,948 | ) | |||
Total W. P. Carey stockholders' equity | 3,485,647 | 3,750,889 | |||||
Noncontrolling interests | 134,675 | 139,846 | |||||
Total equity | 3,620,322 | 3,890,735 | |||||
Total Liabilities and Equity | $ | 8,888,428 | $ | 8,648,479 |
(a) | Our equity investments in real estate joint ventures totaled $143.0 million and $128.0 million as of September 30, 2015 and December 31, 2014, respectively. Our equity investments in the Managed Programs totaled $132.9 million and $121.4 million as of September 30, 2015 and December 31, 2014, respectively. |
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Capitalization |
Description | Shares | Share Price | Market Value | ||||||||||
Equity | |||||||||||||
Common Equity | 104,402,211 | $ | 57.81 | $ | 6,035,492 | ||||||||
Preferred Equity | — | ||||||||||||
Total Equity Market Capitalization | 6,035,492 | ||||||||||||
Outstanding Balance | |||||||||||||
Pro Rata Debt | |||||||||||||
Non-recourse Debt | 2,334,022 | ||||||||||||
Senior Unsecured Credit Facility – Revolver | 435,489 | ||||||||||||
Senior Unsecured Credit Facility – Term Loan | 250,000 | ||||||||||||
Senior Unsecured Notes: | |||||||||||||
Senior Unsecured Notes (due January 20, 2023) | 560,150 | ||||||||||||
Senior Unsecured Notes (due April 1, 2024) | 500,000 | ||||||||||||
Senior Unsecured Notes (due February 1, 2025) | 450,000 | ||||||||||||
Total Pro Rata Debt | 4,529,661 | ||||||||||||
Total Market Capitalization | $ | 10,565,153 |
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Debt Overview |
Weighted - Average Maturity (Years) | Weighted- Average Interest Rate | Total Outstanding Balance (a) | Percent | ||||||||||
Non-Recourse Debt | |||||||||||||
Fixed | 4.3 | 5.6 | % | $ | 1,823,853 | 40.3 | % | ||||||
Variable: | |||||||||||||
Swapped | 3.7 | 5.0 | % | 256,633 | 5.7 | % | |||||||
Floating | 1.6 | 1.0 | % | 46,306 | 1.0 | % | |||||||
Capped | 0.8 | 4.4 | % | 197,179 | 4.3 | % | |||||||
Future Rate Reset | 10.8 | 6.1 | % | 10,051 | 0.2 | % | |||||||
Total Pro Rata Non-Recourse Debt | 3.9 | 5.4 | % | 2,334,022 | 51.5 | % | |||||||
Recourse Debt | |||||||||||||
Fixed: | |||||||||||||
Senior Unsecured Notes (due January 20, 2023) | 7.4 | 2.0 | % | 560,150 | |||||||||
Senior Unsecured Notes (due April 1, 2024) | 8.6 | 4.6 | % | 500,000 | |||||||||
Senior Unsecured Notes (due February 1, 2025) | 9.5 | 4.0 | % | 450,000 | |||||||||
Senior Unsecured Notes | 8.3 | 3.5 | % | 1,510,150 | 33.4 | % | |||||||
Variable: | |||||||||||||
Senior Unsecured Credit Facility – Revolver (due January 31, 2018) (b) | 2.3 | 1.1 | % | 435,489 | 9.6 | % | |||||||
Senior Unsecured Credit Facility – Term Loan (due January 31, 2016) (c) | 0.3 | 1.4 | % | 250,000 | 5.5 | % | |||||||
Total Recourse Debt | 6.2 | 2.8 | % | 2,195,639 | 48.5 | % | |||||||
Total Pro Rata Debt Outstanding (a) | 5.0 | 4.1 | % | 4,529,661 | 100.0 | % | |||||||
Unamortized discount on Senior Unsecured Notes | (8,143 | ) | |||||||||||
Total Pro Rata Debt Outstanding, net | $ | 4,521,518 |
(a) | Debt data is presented on a pro rata basis. See the Terms and Definitions section in the Appendix for a description of pro rata. |
(b) | We incurred interest at London Interbank Offered Rate, or LIBOR, plus 1.10% on our Senior Unsecured Credit Facility – Revolver. Availability under our Senior Unsecured Credit Facility – Revolver was $1.1 billion as of September 30, 2015. We have an option to extend the maturity date of our Senior Unsecured Credit Facility – Revolver by one year. We have the ability to exercise our option to extend the maturity of our Term Loan Facility by one year prior to January 31, 2016 and we are exploring our options in this regard. |
(c) | The terms of the Senior Unsecured Credit Facility – Term Loan provide for two one-year extension options of the loan period. |
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Summary of Debt by Currency |
USD | EUR | Other Currencies (a) | Total | ||||||||||||||||
Outstanding Balance (in USD) | Weighted- Average Interest Rate | Outstanding Balance (in USD) | Weighted- Average Interest Rate | Outstanding Balance (in USD) | Weighted- Average Interest Rate | Outstanding Balance (in USD) | Weighted- Average Interest Rate | ||||||||||||
Non-Recourse Debt | |||||||||||||||||||
Fixed | $ | 1,419,301 | $ | 360,841 | $ | 43,711 | $ | 1,823,853 | |||||||||||
Variable | 177,041 | 328,110 | 5,018 | 510,169 | |||||||||||||||
Total Pro Rata Non-Recourse Debt | 1,596,342 | 5.6% | 688,951 | 4.8% | 48,729 | 6.2% | 2,334,022 | 5.4% | |||||||||||
Recourse Debt | |||||||||||||||||||
Fixed: | |||||||||||||||||||
Senior Unsecured Notes | 950,000 | 560,150 | — | 1,510,150 | |||||||||||||||
Variable: | |||||||||||||||||||
Senior Unsecured Credit Facility – Revolver (due January 31, 2018) | 105,000 | 330,489 | — | 435,489 | |||||||||||||||
Senior Unsecured Credit Facility – Term Loan (due January 31, 2016) | 250,000 | — | — | 250,000 | |||||||||||||||
Total Recourse Debt | 1,305,000 | 3.5% | 890,639 | 1.6% | — | —% | 2,195,639 | 2.8% | |||||||||||
Total Pro Rata Debt Outstanding | 2,901,342 | 4.7% | 1,579,590 | 3.0% | 48,729 | 6.2% | 4,529,661 | 4.1% | |||||||||||
Unamortized discount on Senior Unsecured Notes | (4,154 | ) | (3,989 | ) | — | (8,143 | ) | ||||||||||||
Total Pro Rata Debt Outstanding, Net | $ | 2,897,188 | $ | 1,575,601 | $ | 48,729 | $ | 4,521,518 |
(a) | Other currencies include debt denominated in Canadian dollar, British pound sterling, Japanese yen, Malaysian ringgit and Thai baht. |
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Debt Maturity |
Real Estate | Debt | ||||||||||||||||||||
Number of Properties (a) | Weighted- Average Interest Rate | Total Outstanding Balance (b) | |||||||||||||||||||
Year of Maturity | ABR (a) | Balloon | Percent | ||||||||||||||||||
Non-Recourse Debt | |||||||||||||||||||||
Remaining 2015 | 8 | $ | 10,484 | 5.7 | % | $ | 148,644 | $ | 148,782 | 3.3 | % | ||||||||||
2016 | 101 | 43,254 | 5.2 | % | 252,278 | 259,055 | 5.7 | % | |||||||||||||
2017 | 89 | 94,701 | 5.3 | % | 561,381 | 592,480 | 13.1 | % | |||||||||||||
2018 | 34 | 50,895 | 5.3 | % | 264,452 | 288,908 | 6.4 | % | |||||||||||||
2019 | 11 | 15,783 | 6.1 | % | 51,450 | 64,259 | 1.4 | % | |||||||||||||
2020 | 21 | 37,153 | 5.2 | % | 187,418 | 222,267 | 4.9 | % | |||||||||||||
2021 | 11 | 20,681 | 5.9 | % | 89,920 | 117,804 | 2.6 | % | |||||||||||||
2022 | 31 | 42,544 | 5.2 | % | 209,408 | 252,322 | 5.5 | % | |||||||||||||
2023 | 26 | 40,264 | 5.0 | % | 123,300 | 188,994 | 4.2 | % | |||||||||||||
2024 | 23 | 20,883 | 5.9 | % | 7,731 | 73,647 | 1.6 | % | |||||||||||||
2025 | 13 | 11,618 | 5.6 | % | 29,835 | 62,428 | 1.4 | % | |||||||||||||
Thereafter | 9 | 12,570 | 6.3 | % | 15,505 | 63,076 | 1.4 | % | |||||||||||||
Total Pro Rata Non-Recourse Debt | 377 | $ | 400,830 | 5.4 | % | $ | 1,941,322 | 2,334,022 | 51.5 | % | |||||||||||
Recourse Debt | |||||||||||||||||||||
Senior Unsecured Notes (due January 20, 2023) | 2.0 | % | 560,150 | ||||||||||||||||||
Senior Unsecured Notes (due April 1, 2024) | 4.6 | % | 500,000 | ||||||||||||||||||
Senior Unsecured Notes (due February 1, 2025) | 4.0 | % | 450,000 | ||||||||||||||||||
Senior Unsecured Notes | 3.5 | % | 1,510,150 | 33.3 | % | ||||||||||||||||
Senior Unsecured Credit Facility – Revolver (due January 31, 2018) (c) | 1.1 | % | 435,489 | 9.6 | % | ||||||||||||||||
Senior Unsecured Credit Facility – Term Loan (due January 31, 2016) (d) | 1.4 | % | 250,000 | 5.6 | % | ||||||||||||||||
Total Recourse Debt | 2.8 | % | 2,195,639 | 48.5 | % | ||||||||||||||||
Total Pro Rata Debt Outstanding (a) | 4.1 | % | 4,529,661 | 100.0 | % | ||||||||||||||||
Unamortized discount on Senior Unsecured Notes | (8,143 | ) | |||||||||||||||||||
Total Pro Rata Debt Outstanding, net | $ | 4,521,518 |
(a) | Represents the number of properties and ABR associated with the debt that is maturing in each respective year. |
(b) | Debt maturity data is presented on a pro rata basis. See the Terms and Definitions section in the Appendix for a description of pro rata. Total outstanding balance includes balloon payments, scheduled amortization and unamortized premium, net. |
(c) | We incurred interest at LIBOR plus 1.10% on our Senior Unsecured Credit Facility – Revolver. Availability under our Senior Unsecured Credit Facility – Revolver was $1.1 billion as of September 30, 2015. We have an option to extend the maturity date of our Senior Unsecured Credit Facility – Revolver by one year. |
(d) | The terms of the Senior Unsecured Credit Facility – Term Loan provide for two one-year extension options of the loan period. We have the ability to exercise our option to extend the maturity of our Term Loan Facility by one year prior to January 31, 2016 and we are exploring our options in this regard. |
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Senior Unsecured Notes |
Issuer / Corporate | Senior Unsecured Notes | |||||||||||
Ratings Agency | Rating | Outlook | Date Issued/ Affirmed | Rating | Outlook | Date Issued/ Affirmed | ||||||
Standard & Poor's | BBB | Stable | September 2014 | BBB- | Stable | January 2015 | ||||||
Moody's | Baa2 | Stable | August 2014 | Baa2 | Stable | January 2015 |
Covenant | Metric | Required | As of September 30, 2015 | |||
Limitation on the incurrence of debt | "Total Debt" / "Total Assets" | ≤ 60% | 46.0% | |||
Limitation on the incurrence of secured debt | "Secured Debt" / "Total Assets" | ≤ 40% | 24.1% | |||
Limitation on the incurrence of debt based on consolidated EBITDA to annual debt service charge | "Consolidated EBITDA" / "Annual Debt Service Charge" | ≥ 1.5x | 3.9x | |||
Maintenance of unencumbered asset value | "Unencumbered Assets" / "Total Unsecured Debt" | ≥ 150% | 194.9% |
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Investment Activity – Acquisitions and Dispositions |
Acquisitions Tenant / Lease Guarantor | Property Location(s) | Purchase Price (a) (b) | Closing Date | Property Type(s) | Gross Square Footage | ||||||||
1Q15 | |||||||||||||
Pendragon plc (73 properties) | Various, United Kingdom | $ | 351,061 | Jan-15 | Retail | 1,490,688 | |||||||
Nippon Express Co. Ltd. | Rotterdam, Netherlands | 43,173 | Feb-15 | Warehouse | 761,438 | ||||||||
1Q15 Total | 394,234 | 2,252,126 | |||||||||||
2Q15 | |||||||||||||
Hornbach Baumarkt gmbH | Bad Fischau, Austria | 24,999 | Apr-15 | Retail | 136,702 | ||||||||
Scania AB | Oskarshamn, Sweden | 26,362 | Jun-15 | Industrial | 357,577 | ||||||||
2Q15 Total | 51,361 | 494,279 | |||||||||||
3Q15 | |||||||||||||
Npower Limited | Sunderland, United Kingdom | 53,524 | Aug-15 | Office | 217,339 | ||||||||
MAN Truck & Bus AG (3 properties) | Gersthofen and Senden, Germany; and Leopoldsdorf, Austria | 44,146 | Aug-15 | Industrial | 185,215 | ||||||||
3Q15 Total (c) | 97,670 | 402,554 | |||||||||||
Year-to-Date Total Acquisitions | $ | 543,265 | 3,148,959 |
Dispositions Tenant / Lease Guarantor | Property Location(s) | Gross Sale Price | Closing Date | Property Type(s) | Gross Square Footage | ||||||||
1Q15 | |||||||||||||
Vermont Teddy Bear | Shelburne, VT | $ | 3,500 | Jan-15 | Industrial | 55,446 | |||||||
Vacant (formerly Kenyon International Inc.) | Houston, TX | 1,300 | Jan-15 | Warehouse | 17,725 | ||||||||
Childtime Childcare, Inc. (4 properties) | Alhambra, Garden Grove and Tustin, CA; and Canton, MI | 8,240 | Feb-15; Mar-15 | Learning Center | 28,547 | ||||||||
Builders FirstSource, Inc. | Cincinnati, OH | 725 | Mar-15 | Warehouse | 165,680 | ||||||||
1Q15 Total | 13,765 | 267,398 | |||||||||||
2Q15 | |||||||||||||
SaarOTEC (b) | St. Ingbert, Germany | 4,324 | Apr-15 | Office/Industrial | 156,068 | ||||||||
McLean Midwest | Champlin, MN | 7,000 | May-15 | Office | 179,655 | ||||||||
2Q15 Total | 11,324 | 335,723 | |||||||||||
3Q15 | |||||||||||||
Vacant (formerly Cheese Works) (d) | Ringwood, NJ | 1,406 | Jul-15 | Warehouse | 44,832 | ||||||||
Broomfield Properties Corp & Carey Technology Properties II LLC | Broomfield, CO | 1,150 | Jul-15 | Industrial | 55,700 | ||||||||
Pensacola Storage, LLC | Pensacola, FL | 4,112 | Aug-15 | Self Storage | 51,867 | ||||||||
3Q15 Total | 6,668 | 152,399 | |||||||||||
Year-to-Date Total Dispositions | $ | 31,757 | 755,520 |
(a) | Acquisition was deemed to be a business combination and purchase price includes acquisition-related costs and fees, which were expensed. |
(b) | Amount reflects the applicable exchange rate on the date of the transaction. |
(c) | In addition, during the 2015 third quarter, the company completed a build-to-suit office facility in Mönchengladbach, Germany for a total investment of $51.3 million. Leased to Santander Global Facilities, the 0.2 million square foot facility was placed in service in September, 2015. |
(d) | Amount represents net proceeds upon foreclosure and sale of the property. |
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Joint Venture Information |
Joint Venture or JV (Principal Tenant) | WPC % Interest in JV | Total JV | WPC Pro Rata Share of Total JV (a) | ||||||||||||||||||||||||||
JV Partner % | Assets | Liabilities | Equity | Assets | Liabilities | Equity | |||||||||||||||||||||||
Unconsolidated Joint Ventures (Equity Method Investments) | |||||||||||||||||||||||||||||
Wanbishi Archives Co. Ltd. (b) | 3.00% | CPA®:17 – Global - 97.00% | $ | 33,427 | $ | 23,681 | $ | 9,746 | $ | 1,003 | $ | 710 | $ | 293 | |||||||||||||||
C1000 Logistiek Vastgoed B.V. (b) | 15.00% | CPA®:17 – Global - 85.00% | 148,765 | 76,372 | 72,393 | 22,315 | 11,456 | 10,859 | |||||||||||||||||||||
Actebis Peacock GmbH (b) | 30.00% | CPA®:17 – Global - 70.00% | 34,059 | 995 | 33,064 | 10,218 | 299 | 9,919 | |||||||||||||||||||||
Waldaschaff Automotive GmbH and Wagon Automotive Nagold GmbH (b) | 33.33% | CPA®:17 – Global - 66.67% | 32,768 | 1,301 | 31,467 | 10,922 | 434 | 10,488 | |||||||||||||||||||||
Frontier Spinning Mills, Inc. | 40.00% | CPA®:17 – Global - 60.00% | 36,934 | — | 36,934 | 14,774 | — | 14,774 | |||||||||||||||||||||
The New York Times Company | 45.00% | CPA®:17 – Global - 55.00% | 251,173 | 111,794 | 139,379 | 113,028 | 50,307 | 62,721 | |||||||||||||||||||||
Total Unconsolidated Joint Ventures | 537,126 | 214,143 | 322,983 | 172,260 | 63,206 | 109,054 | |||||||||||||||||||||||
Consolidated Joint Ventures | |||||||||||||||||||||||||||||
Carey Storage | 38.30% | Third party - 61.70% | 2,387 | — | 2,387 | 914 | — | 914 | |||||||||||||||||||||
Berry Plastics Corporation | 50.00% | CPA®:17 – Global - 50.00% | 66,015 | 26,065 | 39,950 | 33,008 | 13,033 | 19,975 | |||||||||||||||||||||
Tesco PLC (b) | 51.00% | CPA®:17 – Global - 49.00% | 60,852 | 36,709 | 24,143 | 31,035 | 18,722 | 12,313 | |||||||||||||||||||||
Dick’s Sporting Goods, Inc. | 55.00% | CPA®:17 – Global - 45.00% | 24,222 | 20,611 | 3,611 | 13,322 | 11,336 | 1,986 | |||||||||||||||||||||
Hellweg Die Profi-Baumärkte GmbH & Co. KG (b) | 63.50% | CPA®:17 – Global - 36.50% | 318,290 | 292,822 | 25,468 | 202,114 | 185,942 | 16,172 | |||||||||||||||||||||
Eroski Sociedad Cooperativa (b) | 70.00% | CPA®:17 – Global - 30.00% | 26,641 | 1,480 | 25,161 | 18,649 | 1,036 | 17,613 | |||||||||||||||||||||
Multi-tenant property in Illkirch-Graffens, France (b) | 75.00% | Third party - 25.00% | 15,576 | 10,416 | 5,160 | 11,682 | 7,812 | 3,870 | |||||||||||||||||||||
U-Haul Moving Partners, Inc. and Mercury Partners, LP | 88.46% | CPA®:17 – Global - 11.54% | 236,409 | 17,077 | 219,332 | 209,127 | 15,106 | 194,021 | |||||||||||||||||||||
Continental Airlines, Inc. | 90.00% | Third party - 10.00% | 5,114 | 3,949 | 1,165 | 4,603 | 3,554 | 1,049 | |||||||||||||||||||||
Total Consolidated Joint Ventures | 755,506 | 409,129 | 346,377 | 524,454 | 256,541 | 267,913 | |||||||||||||||||||||||
Total Unconsolidated and Consolidated Joint Ventures | $ | 1,292,632 | $ | 623,272 | $ | 669,360 | $ | 696,714 | $ | 319,747 | $ | 376,967 |
(a) | See the Terms and Definitions section in the Appendix for a description of pro rata. |
(b) | Amounts are based on the applicable exchange rate at the end of the period. |
![]() | Investing for the long runTM | 21 |
Top Ten Tenants |
Tenant / Lease Guarantor | Property Type | Tenant Industry | Location | ABR | ABR Percent | ||||||||
Hellweg Die Profi-Baumärkte GmbH & Co. KG (a) | Retail | Retail Stores | Germany | $ | 33,974 | 4.9 | % | ||||||
U-Haul Moving Partners Inc. and Mercury Partners, LP | Self Storage | Transportation - Cargo, Consumer Services | Various U.S. | 31,853 | 4.6 | % | |||||||
Carrefour France SAS (a) | Warehouse | Retail Stores | France | 27,755 | 4.0 | % | |||||||
State of Andalucia (a) | Office | Sovereign and Public Finance | Spain | 26,443 | 3.9 | % | |||||||
Pendragon Plc (a) | Retail | Retail Stores, Consumer Services | United Kingdom | 24,664 | 3.6 | % | |||||||
Marcourt Investments Inc. (Marriott Corporation) | Hotel | Hotel, Gaming and Leisure | Various U.S. | 16,100 | 2.3 | % | |||||||
OBI Group (a) | Retail | Retail Stores | Poland | 15,248 | 2.2 | % | |||||||
True Value Company | Warehouse | Retail Stores | Various U.S. | 15,071 | 2.2 | % | |||||||
UTI Holdings, Inc. | Learning Center | Consumer Services | Various U.S. | 14,638 | 2.1 | % | |||||||
Advanced Micro Devices, Inc. | Office | High Tech Industries | Sunnyvale, CA | 12,769 | 1.9 | % | |||||||
Total (b) | $ | 218,515 | 31.7 | % |
(a) | ABR amounts are subject to fluctuations in foreign currency exchange rates. |
(b) | See the Terms and Definitions section in the Appendix for a description of pro rata. |
![]() | Investing for the long runTM | 22 |
Diversification by Property Type |
Total Net-Lease Portfolio | Unencumbered Net-Lease Portfolio (a) | ||||||||||||||||||||||||||
Property Type | ABR | ABR Percent | Square Footage | Sq. ft. Percent | ABR | ABR Percent | Square Footage | Sq. ft. Percent | |||||||||||||||||||
Office | $ | 205,801 | 29.9 | % | 13,850 | 15.4 | % | $ | 82,601 | 28.7 | % | 6,648 | 16.8 | % | |||||||||||||
Industrial | 172,538 | 25.1 | % | 34,507 | 38.4 | % | 77,377 | 26.9 | % | 15,881 | 40.1 | % | |||||||||||||||
Warehouse | 121,929 | 17.7 | % | 25,210 | 28.1 | % | 43,004 | 15.0 | % | 8,891 | 22.4 | % | |||||||||||||||
Retail | 105,093 | 15.3 | % | 9,310 | 10.4 | % | 48,155 | 16.8 | % | 4,000 | 10.1 | % | |||||||||||||||
Self Storage | 31,853 | 4.6 | % | 3,535 | 3.9 | % | 31,853 | 11.1 | % | 3,535 | 8.9 | % | |||||||||||||||
Other Properties (b) | 51,088 | 7.4 | % | 3,366 | 3.8 | % | 4,482 | 1.5 | % | 685 | 1.7 | % | |||||||||||||||
Total (c) | $ | 688,302 | 100.0 | % | 89,778 | 100.0 | % | $ | 287,472 | 100.0 | % | 39,640 | 100.0 | % |
(a) | Represents properties unencumbered by non-recourse mortgage debt. |
(b) | Includes ABR from tenants with the following property types: learning center, hotel, theater, sports facility and residential. |
(c) | See the Terms and Definitions section in the Appendix for a description of pro rata. |
![]() | Investing for the long runTM | 23 |
Diversification by Tenant Industry |
Total Net-Lease Portfolio | Unencumbered Net-Lease Portfolio (a) | ||||||||||||||||||||||||||
Industry Type | ABR | ABR Percent | Square Footage | Sq. ft. Percent | ABR | ABR Percent | Square Footage | Sq. ft. Percent | |||||||||||||||||||
Retail Stores | $ | 137,511 | 20.0 | % | 20,385 | 22.7 | % | $ | 53,151 | 18.5 | % | 7,200 | 18.2 | % | |||||||||||||
Consumer Services | 57,282 | 8.3 | % | 4,908 | 5.5 | % | 38,540 | 13.4 | % | 3,480 | 8.8 | % | |||||||||||||||
High Tech Industries | 46,626 | 6.8 | % | 3,256 | 3.6 | % | 15,122 | 5.3 | % | 1,341 | 3.4 | % | |||||||||||||||
Sovereign and Public Finance | 39,614 | 5.8 | % | 3,364 | 3.7 | % | 30,584 | 10.6 | % | 3,000 | 7.6 | % | |||||||||||||||
Automotive | 39,412 | 5.7 | % | 6,600 | 7.4 | % | 21,489 | 7.5 | % | 3,354 | 8.5 | % | |||||||||||||||
Beverage, Food and Tobacco | 33,171 | 4.8 | % | 7,370 | 8.2 | % | 13,350 | 4.6 | % | 4,181 | 10.5 | % | |||||||||||||||
Transportation: Cargo | 31,799 | 4.6 | % | 4,559 | 5.1 | % | 16,203 | 5.6 | % | 2,373 | 6.0 | % | |||||||||||||||
Media: Advertising, Printing and Publishing | 31,499 | 4.6 | % | 2,327 | 2.6 | % | 8,134 | 2.8 | % | 855 | 2.1 | % | |||||||||||||||
Hotel, Gaming and Leisure | 30,731 | 4.5 | % | 1,806 | 2.0 | % | 3,164 | 1.1 | % | 222 | 0.6 | % | |||||||||||||||
Healthcare and Pharmaceuticals | 27,245 | 4.0 | % | 1,990 | 2.2 | % | 3,824 | 1.3 | % | 498 | 1.2 | % | |||||||||||||||
Containers, Packaging and Glass | 26,607 | 3.9 | % | 5,325 | 5.9 | % | 7,623 | 2.7 | % | 1,556 | 3.9 | % | |||||||||||||||
Capital Equipment | 25,863 | 3.8 | % | 4,876 | 5.4 | % | 16,448 | 5.7 | % | 2,721 | 6.9 | % | |||||||||||||||
Construction and Building | 20,566 | 3.0 | % | 4,276 | 4.8 | % | 9,329 | 3.2 | % | 2,304 | 5.8 | % | |||||||||||||||
Business Services | 17,790 | 2.6 | % | 1,849 | 2.1 | % | 561 | 0.2 | % | 67 | 0.2 | % | |||||||||||||||
Telecommunications | 14,810 | 2.1 | % | 1,188 | 1.3 | % | 8,629 | 3.0 | % | 788 | 2.0 | % | |||||||||||||||
Wholesale | 14,257 | 2.1 | % | 2,806 | 3.1 | % | 4,277 | 1.5 | % | 741 | 1.9 | % | |||||||||||||||
Consumer Goods: Durable | 10,990 | 1.6 | % | 2,485 | 2.8 | % | 1,296 | 0.4 | % | 369 | 0.9 | % | |||||||||||||||
Grocery | 10,507 | 1.5 | % | 1,260 | 1.4 | % | 1,902 | 0.7 | % | 321 | 0.8 | % | |||||||||||||||
Aerospace and Defense | 10,496 | 1.5 | % | 1,184 | 1.3 | % | 5,173 | 1.8 | % | 700 | 1.8 | % | |||||||||||||||
Chemicals, Plastics and Rubber | 9,840 | 1.4 | % | 1,088 | 1.2 | % | 1,879 | 0.7 | % | 245 | 0.6 | % | |||||||||||||||
Metals and Mining | 9,717 | 1.4 | % | 1,413 | 1.6 | % | 287 | 0.1 | % | 52 | 0.1 | % | |||||||||||||||
Insurance | 9,147 | 1.3 | % | 473 | 0.5 | % | 9,147 | 3.2 | % | 473 | 1.2 | % | |||||||||||||||
Oil and Gas | 7,933 | 1.1 | % | 368 | 0.4 | % | 5,441 | 1.9 | % | 276 | 0.7 | % | |||||||||||||||
Consumer Goods: Non-Durable | 7,741 | 1.1 | % | 1,883 | 2.1 | % | 4,850 | 1.7 | % | 1,319 | 3.3 | % | |||||||||||||||
Banking | 7,293 | 1.1 | % | 596 | 0.7 | % | — | — | % | — | — | % | |||||||||||||||
Other (b) | 9,855 | 1.4 | % | 2,143 | 2.4 | % | 7,069 | 2.5 | % | 1,204 | 3.0 | % | |||||||||||||||
Total (c) | $ | 688,302 | 100.0 | % | 89,778 | 100.0 | % | $ | 287,472 | 100.0 | % | 39,640 | 100.0 | % |
(a) | Represents properties unencumbered by non-recourse mortgage debt. |
(b) | Includes ABR from tenants in the following industries: media: broadcasting and subscription, environmental industries, electricity, transportation: consumer and forest products and paper. |
(c) | See the Terms and Definitions section in the Appendix for a description of pro rata. |
![]() | Investing for the long runTM | 24 |
Diversification by Geography |
Total Net-Lease Portfolio | Unencumbered Net-Lease Portfolio (a) | ||||||||||||||||||||||||||
Region | ABR | ABR Percent | Square Footage | Sq. ft. Percent | ABR | ABR Percent | Square Footage | Sq. ft. Percent | |||||||||||||||||||
U.S. | |||||||||||||||||||||||||||
East | |||||||||||||||||||||||||||
New Jersey | $ | 25,229 | 3.7 | % | 1,649 | 1.8 | % | $ | 10,332 | 3.6 | % | 950 | 2.4 | % | |||||||||||||
North Carolina | 18,769 | 2.7 | % | 4,435 | 4.9 | % | 9,413 | 3.3 | % | 2,184 | 5.5 | % | |||||||||||||||
Pennsylvania | 18,298 | 2.7 | % | 2,526 | 2.8 | % | 7,299 | 2.5 | % | 1,477 | 3.7 | % | |||||||||||||||
New York | 17,741 | 2.6 | % | 1,178 | 1.3 | % | 758 | 0.3 | % | 66 | 0.2 | % | |||||||||||||||
Massachusetts | 14,707 | 2.1 | % | 1,390 | 1.5 | % | 10,669 | 3.7 | % | 1,163 | 2.9 | % | |||||||||||||||
Virginia | 7,992 | 1.2 | % | 1,093 | 1.2 | % | 2,853 | 1.0 | % | 332 | 0.9 | % | |||||||||||||||
Other (b) | 22,719 | 3.3 | % | 4,702 | 5.2 | % | 4,541 | 1.6 | % | 796 | 2.0 | % | |||||||||||||||
Total East | 125,455 | 18.3 | % | 16,973 | 18.7 | % | 45,865 | 16.0 | % | 6,968 | 17.6 | % | |||||||||||||||
West | |||||||||||||||||||||||||||
California | 55,539 | 8.1 | % | 3,518 | 3.9 | % | 7,272 | 2.5 | % | 944 | 2.4 | % | |||||||||||||||
Arizona | 25,867 | 3.8 | % | 2,934 | 3.3 | % | 7,556 | 2.6 | % | 566 | 1.4 | % | |||||||||||||||
Colorado | 8,369 | 1.2 | % | 1,268 | 1.4 | % | 2,538 | 0.9 | % | 444 | 1.1 | % | |||||||||||||||
Utah | 7,198 | 1.0 | % | 960 | 1.1 | % | 2,044 | 0.7 | % | 397 | 1.0 | % | |||||||||||||||
Other (b) | 20,117 | 2.9 | % | 2,297 | 2.6 | % | 8,741 | 3.0 | % | 876 | 2.2 | % | |||||||||||||||
Total West | 117,090 | 17.0 | % | 10,977 | 12.3 | % | 28,151 | 9.7 | % | 3,227 | 8.1 | % | |||||||||||||||
South | |||||||||||||||||||||||||||
Texas | 46,767 | 6.8 | % | 6,740 | 7.5 | % | 14,010 | 4.9 | % | 2,429 | 6.1 | % | |||||||||||||||
Georgia | 26,654 | 3.9 | % | 3,498 | 3.9 | % | 2,669 | 0.9 | % | 331 | 0.9 | % | |||||||||||||||
Florida | 17,969 | 2.6 | % | 1,855 | 2.1 | % | 12,498 | 4.3 | % | 1,472 | 3.7 | % | |||||||||||||||
Tennessee | 14,044 | 2.0 | % | 1,804 | 2.0 | % | 2,188 | 0.8 | % | 558 | 1.4 | % | |||||||||||||||
Other (b) | 7,580 | 1.1 | % | 1,767 | 2.0 | % | 4,303 | 1.5 | % | 1,421 | 3.6 | % | |||||||||||||||
Total South | 113,014 | 16.4 | % | 15,664 | 17.5 | % | 35,668 | 12.4 | % | 6,211 | 15.7 | % | |||||||||||||||
Midwest | |||||||||||||||||||||||||||
Illinois | 26,024 | 3.8 | % | 3,741 | 4.2 | % | 6,348 | 2.2 | % | 1,254 | 3.2 | % | |||||||||||||||
Michigan | 11,594 | 1.7 | % | 1,380 | 1.5 | % | 3,975 | 1.4 | % | 708 | 1.8 | % | |||||||||||||||
Indiana | 9,140 | 1.3 | % | 1,418 | 1.6 | % | 3,147 | 1.1 | % | 433 | 1.1 | % | |||||||||||||||
Ohio | 7,209 | 1.0 | % | 1,647 | 1.8 | % | 3,225 | 1.1 | % | 671 | 1.7 | % | |||||||||||||||
Other (b) | 27,712 | 4.0 | % | 4,752 | 5.3 | % | 9,730 | 3.4 | % | 1,288 | 3.2 | % | |||||||||||||||
Total Midwest | 81,679 | 11.8 | % | 12,938 | 14.4 | % | 26,425 | 9.2 | % | 4,354 | 11.0 | % | |||||||||||||||
U.S. Total | 437,238 | 63.5 | % | 56,552 | 62.9 | % | 136,109 | 47.3 | % | 20,760 | 52.4 | % | |||||||||||||||
International | |||||||||||||||||||||||||||
Germany | 60,090 | 8.7 | % | 7,131 | 8.0 | % | 33,395 | 11.6 | % | 3,937 | 9.9 | % | |||||||||||||||
France | 43,528 | 6.3 | % | 8,166 | 9.1 | % | 16,104 | 5.6 | % | 3,181 | 8.0 | % | |||||||||||||||
United Kingdom | 41,134 | 6.0 | % | 2,681 | 3.0 | % | 36,894 | 12.8 | % | 2,200 | 5.5 | % | |||||||||||||||
Spain | 27,990 | 4.1 | % | 2,927 | 3.3 | % | 27,990 | 9.7 | % | 2,927 | 7.4 | % | |||||||||||||||
Finland | 19,861 | 2.9 | % | 1,979 | 2.2 | % | 6,205 | 2.2 | % | 418 | 1.1 | % | |||||||||||||||
Poland | 17,143 | 2.5 | % | 2,189 | 2.4 | % | 1,894 | 0.7 | % | 362 | 0.9 | % | |||||||||||||||
The Netherlands | 9,564 | 1.4 | % | 1,676 | 1.9 | % | 6,517 | 2.3 | % | 1,235 | 3.1 | % | |||||||||||||||
Australia | 9,396 | 1.4 | % | 3,160 | 3.5 | % | 9,396 | 3.3 | % | 3,160 | 8.0 | % | |||||||||||||||
Other (c) | 22,358 | 3.2 | % | 3,317 | 3.7 | % | 12,968 | 4.5 | % | 1,460 | 3.7 | % | |||||||||||||||
International Total | 251,064 | 36.5 | % | 33,226 | 37.1 | % | 151,363 | 52.7 | % | 18,880 | 47.6 | % | |||||||||||||||
Total (d) | $ | 688,302 | 100.0 | % | 89,778 | 100.0 | % | $ | 287,472 | 100.0 | % | 39,640 | 100.0 | % |
![]() | Investing for the long runTM | 25 |
(a) | Represents properties unencumbered by non-recourse mortgage debt. |
(b) | Other properties in the East include assets in Connecticut, South Carolina, Kentucky, Maryland, New Hampshire and West Virginia. Other properties in the West include assets in Washington, Nevada, New Mexico, Oregon, Wyoming and Alaska. Other properties in the South include assets in Alabama, Louisiana, Arkansas, Mississippi and Oklahoma. Other properties in the Midwest include assets in Missouri, Minnesota, Kansas, Wisconsin, Nebraska and Iowa. |
(c) | Includes assets in Norway, Hungary, Belgium, Sweden, Austria, Canada, Mexico, Thailand, Malaysia and Japan. |
(d) | See the Terms and Definitions section in the Appendix for a description of pro rata. |
![]() | Investing for the long runTM | 26 |
Contractual Rent Increases |
Total Net-Lease Portfolio | Unencumbered Net-Lease Portfolio (a) | ||||||||||||||||||||||||||
Rent Adjustment Measure | ABR | ABR Percent | Square Footage | Sq. ft. Percent | ABR | ABR Percent | Square Footage | Sq. ft. Percent | |||||||||||||||||||
(Uncapped) CPI | $ | 283,296 | 41.2 | % | 36,912 | 41.1 | % | $ | 123,446 | 42.9 | % | 15,109 | 38.1 | % | |||||||||||||
CPI - based | 192,474 | 28.0 | % | 24,135 | 26.9 | % | 82,786 | 28.8 | % | 12,554 | 31.7 | % | |||||||||||||||
Fixed | 178,323 | 25.9 | % | 24,679 | 27.5 | % | 74,247 | 25.8 | % | 10,772 | 27.2 | % | |||||||||||||||
Other | 20,241 | 2.9 | % | 1,248 | 1.4 | % | 4,141 | 1.5 | % | 211 | 0.5 | % | |||||||||||||||
None | 13,968 | 2.0 | % | 2,804 | 3.1 | % | 2,852 | 1.0 | % | 994 | 2.5 | % | |||||||||||||||
Total (b) | $ | 688,302 | 100.0 | % | 89,778 | 100.0 | % | $ | 287,472 | 100.0 | % | 39,640 | 100.0 | % |
(a) | Represents properties unencumbered by non-recourse mortgage debt. |
(b) | See the Terms and Definitions section in the Appendix for a description of pro rata. |
![]() | Investing for the long runTM | 27 |
Same Store Analysis |
ABR | Percent | ||||||||||||||
Property Type | As of September 30, 2015 | As of September 30, 2014 | Increase | Increase | |||||||||||
Office | $ | 160,705 | $ | 158,626 | $ | 2,079 | 1.3 | % | |||||||
Industrial | 150,378 | 148,145 | 2,233 | 1.5 | % | ||||||||||
Warehouse | 116,718 | 115,268 | 1,450 | 1.3 | % | ||||||||||
Retail | 77,894 | 77,305 | 589 | 0.8 | % | ||||||||||
Other | 81,758 | 81,388 | 370 | 0.5 | % | ||||||||||
Total | $ | 587,453 | $ | 580,732 | $ | 6,721 | 1.2 | % | |||||||
Rent Adjustment Measure | |||||||||||||||
(Uncapped) CPI | $ | 247,423 | $ | 245,545 | $ | 1,878 | 0.8 | % | |||||||
Fixed | 156,819 | 153,872 | 2,947 | 1.9 | % | ||||||||||
CPI - based | 149,002 | 147,126 | 1,876 | 1.3 | % | ||||||||||
Other | 20,241 | 20,241 | — | — | % | ||||||||||
None | 13,968 | 13,948 | 20 | 0.1 | % | ||||||||||
Total | $ | 587,453 | $ | 580,732 | $ | 6,721 | 1.2 | % | |||||||
Geography | |||||||||||||||
U.S. | $ | 424,094 | $ | 418,737 | $ | 5,357 | 1.3 | % | |||||||
Europe | 156,569 | 155,587 | 982 | 0.6 | % | ||||||||||
Other International | 6,790 | 6,408 | 382 | 6.0 | % | ||||||||||
Total | $ | 587,453 | $ | 580,732 | $ | 6,721 | 1.2 | % | |||||||
Same Store Portfolio Summary | |||||||||||||||
Number of properties | 651 | ||||||||||||||
Square footage (in thousands) | 76,545 |
![]() | Investing for the long runTM | 28 |
Leasing Activity |
Lease Renewals and Extensions | ||||||||||||||||||||||||
ABR (a) | Expected Tenant Improvements/Leasing Commissions ($’000) | |||||||||||||||||||||||
Property Type | Square Feet | Number of Leases | Prior Lease ($’000s) | New Lease ($'000s) | Releasing Spread | Incremental Lease Term | ||||||||||||||||||
Warehouse | 358,576 | 2 | $ | 1,537 | $ | 1,537 | — | % | $ | — | 7.6 years | |||||||||||||
Industrial | 126,000 | 1 | 620 | 771 | 24.4 | % | 833 | 10 years | ||||||||||||||||
Office | — | — | — | — | — | % | — | — | ||||||||||||||||
Retail | — | — | — | — | — | % | — | — | ||||||||||||||||
Other | — | — | — | — | — | % | — | — | ||||||||||||||||
Total / Weighted Average (b) | 484,576 | 3 | $ | 2,157 | $ | 2,308 | 7.0 | % | $ | 833 | 8.4 years | |||||||||||||
Q3 Summary | ||||||||||||||||||||||||
Prior Lease ABR (% of Total Portfolio) | 0.3 | % |
New Leases | |||||||||||||||||
ABR | Tenant Improvements/Leasing Commissions ($’000) | ||||||||||||||||
Property Type | Square Feet | Number of Leases | New Lease ($'000s) | New Lease Term | |||||||||||||
Industrial | 339,000 | 1 | $ | 712 | $ | 350 | 10 years | ||||||||||
Office (c) | 257,341 | 4 | 5,248 | 460 | 7.8 years | ||||||||||||
Warehouse | 42,628 | 1 | 202 | 90 | 8.3 years | ||||||||||||
Retail | — | — | — | — | — | ||||||||||||
Other | — | — | — | — | — | ||||||||||||
Total / Weighted Average (d) | 638,969 | 6 | $ | 6,162 | $ | 900 | 8.1 years |
(a) | New lease amounts are based on in-place rents at time of lease commencement. |
(b) | Weighted average refers to the incremental lease term. |
(c) | One of the four leases is a gross rent lease of $0.9 million ABR and is presented on a net rent basis of $0.6 million. |
(d) | Weighted average refers to the new lease term. |
![]() | Investing for the long runTM | 29 |
Lease Expirations – Total Net-Lease Portfolio |
Year of Lease Expiration (a) | Number of Leases Expiring | ABR | ABR Percent | Square Footage | Sq. ft. Percent | |||||||||||
Remaining 2015 (b) | 8 | $ | 13,308 | 1.9 | % | 941 | 1.1 | % | ||||||||
2016 | 15 | 18,960 | 2.8 | % | 2,198 | 2.5 | % | |||||||||
2017 | 17 | 16,147 | 2.3 | % | 2,679 | 3.0 | % | |||||||||
2018 | 29 | 56,835 | 8.3 | % | 8,106 | 9.0 | % | |||||||||
2019 | 28 | 46,038 | 6.7 | % | 4,685 | 5.2 | % | |||||||||
2020 | 24 | 35,688 | 5.2 | % | 3,534 | 3.9 | % | |||||||||
2021 | 77 | 40,139 | 5.8 | % | 6,612 | 7.4 | % | |||||||||
2022 | 36 | 61,977 | 9.0 | % | 8,443 | 9.4 | % | |||||||||
2023 | 15 | 42,004 | 6.1 | % | 5,562 | 6.2 | % | |||||||||
2024 | 44 | 92,904 | 13.5 | % | 12,430 | 13.8 | % | |||||||||
2025 | 43 | 33,469 | 4.9 | % | 3,593 | 4.0 | % | |||||||||
2026 | 21 | 17,325 | 2.5 | % | 2,610 | 2.9 | % | |||||||||
2027 | 17 | 35,239 | 5.1 | % | 5,571 | 6.2 | % | |||||||||
2028 | 10 | 23,259 | 3.4 | % | 2,987 | 3.3 | % | |||||||||
Thereafter (>2028) | 91 | 155,010 | 22.5 | % | 18,740 | 20.9 | % | |||||||||
Vacant | — | — | — | % | 1,087 | 1.2 | % | |||||||||
Total (c) | 475 | $ | 688,302 | 100.0 | % | 89,778 | 100.0 | % |
(a) | Assumes tenant does not exercise renewal option. |
(b) | Month-to-month leases are counted in 2015 ABR. |
(c) | See the Terms and Definitions section in the Appendix for a description of pro rata. |
![]() | Investing for the long runTM | 30 |
Lease Expirations – Unencumbered Net-Lease Portfolio |
Year of Lease Expiration (a) | Number of Leases Expiring | ABR | ABR Percent | Square Footage | Sq. ft. Percent | |||||||||||
Remaining 2015 (b) | 2 | $ | 5,006 | 1.7 | % | 235 | 0.6 | % | ||||||||
2016 | 8 | 4,607 | 1.6 | % | 531 | 1.4 | % | |||||||||
2017 | 8 | 5,730 | 2.0 | % | 1,162 | 2.9 | % | |||||||||
2018 | 21 | 27,497 | 9.6 | % | 4,759 | 12.0 | % | |||||||||
2019 | 13 | 9,148 | 3.2 | % | 1,584 | 4.0 | % | |||||||||
2020 | 9 | 7,985 | 2.8 | % | 1,178 | 3.0 | % | |||||||||
2021 | 9 | 9,914 | 3.4 | % | 1,945 | 4.9 | % | |||||||||
2022 | 9 | 12,586 | 4.4 | % | 2,341 | 5.9 | % | |||||||||
2023 | 5 | 6,164 | 2.1 | % | 1,359 | 3.4 | % | |||||||||
2024 | 14 | 43,856 | 15.3 | % | 6,005 | 15.2 | % | |||||||||
2025 | 31 | 18,853 | 6.5 | % | 1,472 | 3.7 | % | |||||||||
2026 | 2 | 2,846 | 1.0 | % | 318 | 0.8 | % | |||||||||
2027 | 8 | 15,301 | 5.3 | % | 2,035 | 5.1 | % | |||||||||
2028 | 7 | 16,541 | 5.8 | % | 2,195 | 5.5 | % | |||||||||
Thereafter (>2028) | 74 | 101,438 | 35.3 | % | 12,132 | 30.6 | % | |||||||||
Vacant | — | — | — | % | 389 | 1.0 | % | |||||||||
Total (c) (d) | 220 | $ | 287,472 | 100.0 | % | 39,640 | 100.0 | % |
(a) | Assumes tenant does not exercise renewal option. |
(b) | Month-to-month leases are counted in 2015 ABR. |
(c) | See the Terms and Definitions section in the Appendix for a description of pro rata. |
(d) | Represents properties unencumbered by non-recourse mortgage debt. |
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![]() | Investing for the long runTM | 32 |
Selected Information – Managed Programs |
Managed Programs | |||||||||||||||||||
CPA®:17 – Global | CPA®:18 – Global | CWI | CWI 2 | CCIF | |||||||||||||||
General | |||||||||||||||||||
Year established | 2007 | 2013 | 2010 | 2014 | 2014 | ||||||||||||||
Total AUM (a) | $ | 5,603,502 | $ | 1,923,816 | $ | 2,601,365 | $ | 277,832 | $ | 74,956 | |||||||||
Portfolio | |||||||||||||||||||
Investment type | Net lease / Diversified REIT | Net lease / Diversified REIT | Lodging REIT | Lodging REIT | BDC | ||||||||||||||
Number of net-leased properties | 375 | 54 | N/A | N/A | N/A | ||||||||||||||
Number of operating properties | 72 | 51 | 33 | 3 | N/A | ||||||||||||||
Number of tenants – net-leased properties (b) | 113 | 94 | N/A | N/A | N/A | ||||||||||||||
Square footage (b) | 39,815 | 8,248 | 6,121 | 758 | N/A | ||||||||||||||
Occupancy (c) | 100.0 | % | 100.0 | % | 77.8 | % | 77.0 | % | N/A | ||||||||||
Acquisitions – third quarter | $ | 22,385 | $ | 168,833 | $ | — | $ | — | N/A | ||||||||||
Dispositions – third quarter | — | 35,675 | — | — | N/A | ||||||||||||||
Balance Sheet | |||||||||||||||||||
Total assets | $ | 4,540,960 | $ | 2,096,186 | $ | 2,426,470 | $ | 317,524 | $ | 77,013 | |||||||||
Total debt | 1,904,548 | 944,005 | 1,316,737 | 108,700 | 28,000 | ||||||||||||||
Total debt / total assets | 41.9 | % | 45.0 | % | 54.3 | % | 34.2 | % | 36.4 | % | |||||||||
Investor Capital Inflow | |||||||||||||||||||
Gross offering proceeds – third quarter (d) | N/A | N/A | N/A | $ | 75,496 | $ | — | ||||||||||||
Status (e) | Closed | Closed | Closed | Open | Open | ||||||||||||||
% subscribed: | |||||||||||||||||||
Initial offering (d) | 100 | % | 100 | % | 100 | % | 7 | % | In registration (effective July 2015) | ||||||||||
Follow-on offering (d) | 100 | % | N/A | 100 | % | N/A | N/A |
(a) | Represents estimated value of real estate assets plus cash and cash equivalents, less distributions payable. |
(b) | For CPA®:17 – Global and CPA®:18 – Global, excludes operating properties. |
(c) | Represents occupancy for net-leased properties for CPA®:17 – Global and CPA®:18 – Global. Represents occupancy for hotels owned by CWI and CWI 2 for the nine months ended September 30, 2015. Occupancy for CPA®:17 – Global's 71 self-storage properties was 90.2% as of September 30, 2015. Occupancy for CPA®:18 – Global's 44 self-storage properties and six multi-family properties was 88.2% and 92.2%, respectively, as of September 30, 2015. CPA®:18 – Global’s operating portfolio also included one student housing development as of September 30, 2015. |
(d) | Excludes distribution reinvestment plan proceeds. |
(e) | CWI 2 began to admit new stockholders on May 15, 2015 in connection with its initial public offering for up to $1.4 billion of common stock, plus up to an additional $600.0 million for its distribution reinvestment plan. CCIF is the master fund in a master/feeder fund structure. CCIF 2016 T and CCIF – I are the two feeder funds and their registration statements were declared effective on July 24, 2015 and July 31, 2015, respectively. The CCIF feeder funds did not admit shareholders prior to September 30, 2015. |
![]() | Investing for the long runTM | 33 |
Summary of Selected Revenue Sources from Managed Programs |
Managed Programs | |||||||||
CPA®:17 – Global | CPA®:18 – Global | CWI | CWI 2 | CCIF (a) | |||||
Status | Closed | Closed | Closed | Open | In registration (effective July 24, 2015) | ||||
Profits Interests | |||||||||
Special general partnership profits interest (% of Available Cash) (b) (c) | 10.00% | 10.00% | 8.00% (d) | 7.5% (d) | N/A | ||||
Asset Management and Structuring Revenues | |||||||||
Asset management fees (% of average market value) (c) (e) | 0.50% | 0.50% | 0.40% (f) | 0.4125% (g) | N/A | ||||
Acquisition / structuring fees (% of total aggregate cost) (c) (h) | 4.50% (i) | 4.50% (i) (j) | 2.00% (k) | 1.875% (l) | N/A | ||||
Management fee (average of gross assets at the end of the two most recently completed calendar months) | N/A | N/A | N/A | N/A | 2.00%; 1.875%; and 1.75% (m) | ||||
Performance-based Incentive Fees | |||||||||
Incentive fee on income (n) | N/A | N/A | N/A | N/A | |||||
Incentive fee on capital gains (o) | N/A | N/A | N/A | N/A | 20.00% | ||||
Dealer Manager Related Revenues | |||||||||
Selling commissions | We receive selling commissions for the sale of shares in the Managed Programs, which are re-allowed to selected broker dealers. | ||||||||
Dealer manager fees | We receive a dealer manager fee for the sale of shares in the Managed Programs, a portion of which is re-allowed to selected broker dealers. | ||||||||
Distribution and shareholder servicing fees | We receive an annual distribution and shareholder servicing fee in connection with sales of shares of CPA®:18 – Global’s Class C common stock, CWI 2’s Class T common stock and CCIF 2016 T’s common stock, which may be re-allowed to selected broker dealers. |
(a) | CCIF pays us a management fee. CCIF 2016 T and CCIF – I do not pay a separate management fee. |
(b) | Available Cash means cash generated by operating partnership operations and investments, excluding cash from sales and refinancings, after the payment of debt service and other operating expenses, but before distributions to partners. Recorded in Equity in earnings of equity method investments in real estate and the Managed REITs in our consolidated financial statements. |
(c) | Fees are subject to certain regulatory limitations and restrictions, as described in the applicable Managed REIT prospectus. |
(d) | Special general partnership receives 10% of Available Cash; however, 20% of the Available Cash of CWI and 25% of the Available Cash of CWI 2 is paid to their respective third-party subadvisors. |
(e) | Generally 0.50%; however, asset management fees may vary according to the type of asset as described in the prospectus of each Managed REIT. Under the terms of the respective advisory agreements of the Managed REITs, we may elect to receive cash or shares of CWI and CWI 2’s stock for asset management fees due, while the CPA REITs have an option to pay asset management fees in cash or shares upon our recommendation. Asset management fees are recorded in Asset management revenue in our consolidated financial statements. |
(f) | 20% of CWI’s 0.50% asset management fee is paid to an unrelated third-party subadvisor. |
(g) | 25% of CWI 2’s 0.55% asset management fee is paid to an unrelated third-party subadvisor. |
(h) | Recorded in Structuring revenue in our consolidated financial statements. |
(i) | Comprised of an initial acquisition fee (generally 2.50% of the total aggregate cost of net-leased properties) paid when the transaction is completed and a subordinated acquisition fee (generally 2.00% of the total aggregate cost of net-leased properties) paid in annual installments over three years, provided certain performance criterion are met. The acquisition fee for other properties is generally 1.75% of the total aggregate cost. |
(j) | In connection with the acquisitions of multi-family and multi-tenant properties on behalf of CPA®:18 – Global, we entered into agreements with unrelated third-party advisors for the day-to-day management of the properties for a fee. |
(k) | 20% of CWI’s 2.50% acquisition fee is paid to an unrelated third-party subadvisor. Applied to the total investment cost and loans originated. A loan refinancing fee of up to 1.0% of the principal amount of a refinanced loan secured by property applies to loan refinancings that meet certain criteria, as described in the prospectus for CWI. 20% of the loan refinancing fee is paid to the subadvisor. |
(l) | 25% of CWI 2’s 2.50% acquisition fee is paid to an unrelated third-party subadvisor. Applied to the total investment cost and loans originated. A loan refinancing fee of up to 1.0% of the principal amount of a refinanced loan secured by property applies to loan refinancings that meet certain criteria, as described in the prospectus for CWI 2.25% of the loan refinancing fee is paid to the subadvisor. |
(m) | Management fees are incurred at 2.00% on portion of assets below $1.0 billion; 1.875% on portion of assets between $1.0 billion and $2.0 billion; and 1.75% on portion of assets above $2.0 billion. |
(n) | The incentive fee on income is paid quarterly if earned; it is computed as the sum of (i) 100% of quarterly pre-incentive fee net investment income in excess of 1.875% of average adjusted capital up to a limit of 2.344% of average adjusted capital and (ii) 20% of pre-incentive fee net investment income in excess of 2.344% of average adjusted capital. |
(o) | The incentive fee on capital gains is paid annually if earned; it is equal to 20% of realized capital gains on a cumulative basis from inception, net of (i) all realized capital losses and unrealized depreciation on a cumulative basis from inception and (ii) the aggregate amount, if any, of previously paid incentive fees on capital gains. |
![]() | Investing for the long runTM | 34 |
Investment Activity – Managed REITs |
Acquisitions – Net-Leased Properties | Gross Square Footage | ||||||||||||||
Portfolio(s) | Tenant / Lease Guarantor | Property Location(s) | Purchase Price | Closing Date | Property Type(s) | ||||||||||
1Q15 | |||||||||||||||
CPA®:17 – Global | iHeartCommunications, Inc. | San Antonio, TX | $ | 22,170 | Jan-15 | Office | 120,147 | ||||||||
CPA®:17 – Global | FM Polska s.p. z oo (2 properties) (a) | Mszczonów and Tomaszów Mazowiecki, Poland | 63,849 | Feb-15 | Warehouse | 1,277,184 | |||||||||
CPA®:18 – Global | Rabobank (a) (b) | Eindhoven, Netherlands | 91,134 | Mar-15 | Office | BTS | |||||||||
CPA®:18 – Global | Broadfold (Truffle) (a) (c) | Aberdeen, United Kingdom | 7,552 | Mar-15 | Industrial | 55,247 | |||||||||
1Q15 Total | 184,705 | 1,452,578 | |||||||||||||
2Q15 | |||||||||||||||
CPA®:18 – Global | Republic Services, Inc. (c) | Freetown, MA | 3,999 | Apr-15 | Industrial | 66,000 | |||||||||
CPA®:18 – Global | Intuit Inc. (c) | Plano, TX | 35,455 | Apr-15 | Office | 166,033 | |||||||||
CPA®:18 – Global | Marriott Munich (a) (b) | Munich, Germany | 81,565 | May-15 | Hotel | BTS | |||||||||
CPA®:18 – Global | Core-Mark International, Inc. (c) | Plymouth, MN | 15,822 | May-15 | Industrial | 208,931 | |||||||||
CPA®:18 – Global (90%) | COOP Ost AS (a) (c) | Oslo, Norway | 93,766 | May-15 | Retail | 178,369 | |||||||||
CPA®:18 – Global | First Secretary of State (a) | Cardiff, United Kingdom | 12,517 | Jun-15 | Office | 51,005 | |||||||||
CPA®:17 – Global | Pilkington Automotive Poland (a) (b) | Chmielów, Poland | 11,937 | Jun-15 | Industrial | BTS | |||||||||
CPA®:18 – Global | Melia Hotels International, S.A. (a) (b) | Hamburg, Germany | 31,599 | Jun-15 | Hotel | BTS | |||||||||
CPA®:17 – Global | The Bon-Ton Stores, Inc. (6 properties) | Joliet, IL; Fargo, ND; and Ashwaubenon, Brookfield, Greendale and Wauwatosa, WI | 87,445 | Jun-15 | Retail | 1,002,731 | |||||||||
2Q15 Total | 374,105 | 1,673,069 | |||||||||||||
3Q15 | |||||||||||||||
CPA®:17 – Global | FM Slovenska, s.r.o. (a) | Sered, Slovakia | 22,385 | Jul-15 | Warehouse | 407,859 | |||||||||
CPA®:18 – Global | Acosta, Inc. | Jacksonville, FL | 16,540 | Jul-15 | Office | 88,062 | |||||||||
CPA®:18 – Global | Dutch Governmental Real Estate Department, Dutch Chamber of Commerce, Bureau for Information on Labor and Income and the Information Bureau (a) | Utrecht, Netherlands | 51,835 | Jul-15 | Office | 154,990 | |||||||||
CPA®:18 – Global | Exelon Generation | Warrenville, IL | 34,615 | Sep-15 | Office | 146,745 | |||||||||
3Q15 Total | 125,375 | 797,656 | |||||||||||||
Year-to-Date Total Acquisitions – Net-Leased Properties | 684,185 | 3,923,303 |
![]() | Investing for the long runTM | 35 |
Investment Activity – Managed REITs continued |
Acquisitions – Self-Storage | |||||||
Portfolio(s) | Property Location(s) | Purchase Price (c) | Closing Date | ||||
1Q15 | |||||||
CPA®:18 – Global | Naples, FL | 16,458 | Jan-15 | ||||
CPA®:18 – Global | Valrico, FL | 9,746 | Jan-15 | ||||
CPA®:18 – Global | Tallahassee, FL | 7,919 | Feb-15 | ||||
CPA®:18 – Global | Lady Lake, FL | 6,357 | Feb-15 | ||||
CPA®:18 – Global | Sebastian, FL | 3,168 | Feb-15 | ||||
CPA®:18 – Global | Panama City, FL | 4,224 | Mar-15 | ||||
1Q15 Total | 47,872 | ||||||
2Q15 | |||||||
CPA®:18 – Global (2 properties) | Stockbridge and Lilburn, GA | 6,407 | Apr-15 | ||||
CPA®:18 – Global (7 properties) | Hesperia, Highland, Lancaster, Palms and Rialto, CA | 38,375 | Apr-15 | ||||
CPA®:18 – Global | Louisville, KY | 10,642 | Apr-15 | ||||
CPA®:18 – Global | Crystal Lake, IL | 4,223 | May-15 | ||||
CPA®:18 – Global | Las Vegas, NV | 10,340 | May-15 | ||||
CPA®:18 – Global | Vaughan, Canada (a) (b) | 20,560 | May-15 | ||||
CPA®:18 – Global | Panama City Beach, FL | 9,949 | May-15 | ||||
CPA®:18 – Global (2 properties) | Sarasota, FL | 14,627 | Jun-15 | ||||
CPA®:18 – Global | St. Peters, MO | 3,715 | Jun-15 | ||||
2Q15 Total | 118,838 | ||||||
3Q15 | |||||||
CPA®:18 – Global | Leesburg, FL | 3,892 | Jul-15 | ||||
CPA®:18 – Global | Palm Bay, FL | 11,532 | Jul-15 | ||||
CPA®:18 – Global | Houston, TX | 7,470 | Aug-15 | ||||
CPA®:18 – Global | Ithaca, NY | 3,748 | Sep-15 | ||||
CPA®:18 – Global (2 properties) | Las Vegas, NV | 7,609 | Sep-15 | ||||
CPA®:18 – Global | Hudson, FL | 5,232 | Sep-15 | ||||
3Q15 Total | 39,483 | ||||||
Year-to-Date Total Acquisitions – Self-Storage Properties | 206,193 |
![]() | Investing for the long runTM | 36 |
Investment Activity – Managed REITs continued |
Acquisitions – Hotels | |||||||
Portfolio(s) | Property Location(s) | Purchase Price (d) | Closing Date | ||||
1Q15 | |||||||
CWI | Minneapolis, MN | 69,339 | Feb-15 | ||||
CWI | Pasadena, CA | 157,959 | Mar-15 | ||||
1Q15 Total | 227,298 | ||||||
2Q15 | |||||||
CWI | Atlanta, GA | 60,787 | Apr-15 | ||||
CWI 2 | Nashville, TN | 69,696 | May-15 | ||||
CWI | Philadelphia, PA | 76,611 | May-15 | ||||
CWI (47.3%); CWI 2 (19.3%) | Key Biscayne, FL | 256,764 | May-15 | ||||
CWI | Fort Lauderdale, FL | 86,376 | Jun-15 | ||||
2Q15 Total | 550,234 | ||||||
3Q15 (N/A) | |||||||
Year-to-Date Total Acquisitions – Hotels | 777,532 |
Acquisitions – Multi-Family | |||||||
Portfolio(s) | Property Location(s) | Purchase Price (d) | Closing Date | ||||
1Q15 | |||||||
CPA®:18 – Global | Durham, NC | 34,707 | Jan-15 | ||||
CPA®:18 – Global | Fort Myers, FL | 28,190 | Jan-15 | ||||
CPA®:18 – Global | Reading, United Kingdom (a) | 45,637 | Feb-15 | ||||
1Q15 Total | 108,534 | ||||||
2Q15 | |||||||
CPA®:18 – Global | San Antonio, TX | 43,793 | Jun-15 | ||||
2Q15 Total | 43,793 | ||||||
3Q15 | |||||||
CPA®:18 – Global | Fort Walton Beach, FL | 26,360 | Jul-15 | ||||
3Q15 Total | 26,360 | ||||||
Year-to-Date Total Acquisitions – Multi-Family Properties | 178,687 |
![]() | Investing for the long runTM | 37 |
Investment Activity – Managed REITs continued |
Acquisitions – Other | ||||||||||
Portfolio(s) | Security Type | Company | Purchase Price | Closing Date | ||||||
1Q15 | ||||||||||
CPA®:17 – Global | Loan Receivable | 1185 Broadway LLC (d) | 30,303 | Jan-15 | ||||||
CPA®:17 – Global | Loan Receivable | 127 West 23rd Manager, LLC (d) | 12,727 | Feb-15 | ||||||
CPA®:17 – Global | Equity Securities | BPS Nevada, LLC | 9,091 | Feb-15 | ||||||
1Q15 Total | 52,121 | |||||||||
2Q15 (N/A) | ||||||||||
3Q15 (N/A) | ||||||||||
Year-to-Date Total Acquisitions – Other | 52,121 | |||||||||
Year-to-Date Total Acquisitions | $ | 1,898,718 |
Dispositions | ||||||||||
Portfolio(s) | Tenant / Lease Guarantor | Property Location(s) | Gross Sale Price | Closing Date | ||||||
1Q15 (N/A) | ||||||||||
2Q15 (N/A) | ||||||||||
3Q15 | ||||||||||
CPA®:18 – Global (5 properties) | Crowne Group, LLC | Fraser and Warren, MI; Logansport and Madison, IN; and Marion, SC | 35,675 | Aug-15 | ||||||
Year-to-Date Total Dispositions | $ | 35,675 |
(a) | Amount reflects the applicable exchange rate on the date of acquisition. |
(b) | Acquisition includes a build-to-suit transaction. Purchase price represents total commitment for build-to-suit funding. Gross square footage cannot be determined at this time. |
(c) | Acquisition was deemed to be a business combination and purchase price includes acquisition-related costs and fees, which were expensed. |
(d) | Purchase price includes acquisition-related costs and fees, which were expensed. |
![]() | Investing for the long runTM | 38 |
![]() | Investing for the long runTM | 39 |
Normalized Pro Rata Cash Net Operating Income (NOI) |
Three Months Ended Sep. 30, 2015 | |||
Consolidated Lease Revenues | |||
Total lease revenues – as reported | $ | 164,741 | |
Less: Consolidated Non-Reimbursable Property Expenses | |||
Non-reimbursable property expenses – as reported | 5,633 | ||
159,108 | |||
Plus: NOI from Operating Properties | |||
Hotels NOI | 2,505 | ||
Self-storage properties NOI | 85 | ||
2,590 | |||
161,698 | |||
Adjustments for Pro Rata Ownership of Real Estate Joint Ventures: | |||
Add: Pro rata share of NOI from equity investments | 4,702 | ||
Less: Pro rata share of NOI attributable to noncontrolling interests | (5,808 | ) | |
(1,106 | ) | ||
160,592 | |||
Adjustments for Pro Rata Non-Cash Items: | |||
Add: Above- and below-market rent intangible lease amortization | 9,606 | ||
Less: Straight-line rent amortization | (3,081 | ) | |
Add: Other non-cash items | (122 | ) | |
6,403 | |||
Pro Rata Cash NOI (a) | 166,995 | ||
Adjustment to normalize for intra-period acquisitions and dispositions (b) | 1,350 | ||
Normalized Pro Rata Cash NOI (a) | $ | 168,345 |
(a) | Pro rata cash NOI and normalized pro rata cash NOI are non-GAAP measures. See the Terms and Definitions section that follows for a description of our non-GAAP measures and for details on how pro rata cash NOI and normalized pro rata cash NOI are calculated. |
(b) | For properties acquired during the three months ended September 30, 2015, the adjustment replaces our pro rata share of cash NOI for the partial period with an amount estimated to be equivalent to our pro rata share of cash NOI for the full period. For properties disposed of during the three months ended September 30, 2015, the adjustment eliminates our pro rata share of cash NOI for the period. |
![]() | Investing for the long runTM | 40 |
Reconciliation of Net Income to Adjusted EBITDA – Last Five Quarters |
Three Months Ended | |||||||||||||||||||
Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | |||||||||||||||
Net income attributable to W. P. Carey | $ | 21,745 | $ | 63,348 | $ | 36,116 | $ | 32,272 | $ | 27,337 | |||||||||
Adjustments to Derive Consolidated EBITDA | |||||||||||||||||||
Depreciation and amortization (a) | 75,512 | 65,166 | 65,400 | 61,478 | 59,524 | ||||||||||||||
Interest expense (a) | 49,683 | 47,693 | 47,949 | 44,799 | 46,588 | ||||||||||||||
Provision for income taxes (a) | 3,361 | 15,010 | 1,980 | 6,172 | 945 | ||||||||||||||
EBITDA (b) | 150,301 | 191,217 | 151,445 | 144,721 | 134,394 | ||||||||||||||
Adjustments to Derive Adjusted EBITDA | |||||||||||||||||||
Adjustments for Non-Cash Items: | |||||||||||||||||||
Impairment charges | 19,438 | 591 | 2,683 | 16,776 | 4,225 | ||||||||||||||
Above- and below-market rent intangible and straight-line rent adjustments | 8,940 | 10,150 | 10,813 | 10,350 | 12,642 | ||||||||||||||
Stock-based compensation expense | 3,966 | 5,089 | 7,009 | 8,095 | 7,979 | ||||||||||||||
Unrealized (gains) losses on hedging activity (c) | (1,523 | ) | (5,347 | ) | 7,425 | 1,293 | 4,806 | ||||||||||||
30,821 | 10,483 | 27,930 | 36,514 | 29,652 | |||||||||||||||
Adjustments for Non-Core Items (d) | |||||||||||||||||||
Property acquisition expenses | 4,130 | 1,870 | 6,321 | 3,060 | 609 | ||||||||||||||
(Gain) loss on extinguishment of debt | (2,305 | ) | — | — | — | 1,122 | |||||||||||||
Gain on sale of real estate, net | (1,779 | ) | (16 | ) | (1,185 | ) | (5,062 | ) | (259 | ) | |||||||||
Merger expenses (income) | 630 | 27 | (645 | ) | 37 | 9 | |||||||||||||
Other (e) (f) | 239 | 509 | (382 | ) | 2,893 | (272 | ) | ||||||||||||
915 | 2,390 | 4,109 | 928 | 1,209 | |||||||||||||||
Adjustments for Pro Rata Ownership | |||||||||||||||||||
Real Estate Joint Ventures: (g) | |||||||||||||||||||
Add: Pro rata share of adjustments for equity investments | 1,866 | 2,478 | 2,001 | 4,369 | 1,487 | ||||||||||||||
Less: Pro rata share of adjustments for amounts attributable to noncontrolling interests | (4,960 | ) | (4,838 | ) | (4,012 | ) | (4,550 | ) | (6,354 | ) | |||||||||
(3,094 | ) | (2,360 | ) | (2,011 | ) | (181 | ) | (4,867 | ) | ||||||||||
Adjustments for Equity Investments in the Managed Programs (h) | |||||||||||||||||||
Add: Distributions received from equity investments in the Managed Programs | 1,909 | 1,754 | 1,580 | 1,447 | 1,298 | ||||||||||||||
Less: Loss (income) from equity investments in the Managed Programs | 711 | (572 | ) | (115 | ) | (333 | ) | (241 | ) | ||||||||||
2,620 | 1,182 | 1,465 | 1,114 | 1,057 | |||||||||||||||
Adjusted EBITDA (b) | $ | 181,563 | $ | 202,912 | $ | 182,938 | $ | 183,096 | $ | 161,445 |
(a) | Includes amounts related to discontinued operations. |
(b) | EBITDA and adjusted EBITDA are non-GAAP measures. See the Terms and Definitions section that follows for a description of our non-GAAP measures. |
(c) | Comprised of gains and losses on derivatives and gains and losses on foreign currency hedges. |
(d) | Comprised of items that we do not consider to be part of our core operating business plan or representative of our overall long-term operating performance, based on a number of factors, including the nature of the item and/or the frequency with which it occurs. We believe that these adjustments provide a more representative view of EBITDA from our core operating business and allow for more meaningful comparisons. |
(e) | Other, net for the three months ended December 31, 2014 primarily consists of proceeds from a bankruptcy settlement claim with U.S. Aluminum of Canada, a former CPA®:16 – Global tenant that was acquired as part of the CPA®:16 merger on January 31, 2014, and under GAAP was accounted for in purchase accounting. |
(f) | Effective prospectively on January 1, 2015, we no longer adjust for realized gains or losses on foreign exchange derivatives. Realized gains on derivatives were $0.8 million and $0.3 million for the three months ended December 31, 2014 and September 30, 2014, respectively. |
(g) | Adjustments to include our pro rata share of depreciation and amortization, interest expense, provision for income taxes, non-cash items and non-core items from joint ventures. |
(h) | Adjustments to include cash distributions received from the Managed Programs in place of our pro rata share of net income from our ownership in the Managed Programs. |
![]() | Investing for the long runTM | 41 |
Terms and Definitions |
![]() | Investing for the long runTM | 42 |
![]() | Investing for the long runTM | 43 |
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