W. P. Carey Inc. (NYSE: WPC), a publicly traded net-lease real estate investment trust, has officially exited from the non-traded REIT business following the completion of its $2.7 billion merger with Corporate Property Associates 18 – Global Incorporated, a non-traded REIT sponsored by the company. CPA:18 shareholders approved the merger at a special meeting held last week.
The combined portfolio includes 1,390 net lease properties covering approximately 170 million square feet, as well as a portfolio of 84 self-storage operating properties.
W. P. Carey believes that the merger is immediately accretive to its real estate adjusted funds from operations (AFFO) per share, offsetting pre-merger income earned from managing CPA:18. The company also noted that its exit from the non-traded REIT business, “incrementally simplifies the company and enhances its earnings quality.”
The transaction was initially estimated to be valued at approximately $2.7 billion and is expected to add approximately $2 billion of real estate assets, after proposed asset sales, the substantial majority of which have been completed.
Last month, CPA:18 sold 11 net-lease student housing properties located in Spain and Portugal for $404 million. The properties’ tenant, Brookfield Strategic Real Estate Partners, exercised its option to purchase the properties, following the proposed merger announcement, which triggered a change in control event.
W. P. Carey expects to issue 13.8 million shares of its common stock, increasing its equity market capitalization to approximately $18 billion. CPA:18 stockholders received 0.0978 shares of W. P. Carey common stock plus $3.00 of cash for each share of CPA:18.
CPA:18 launched its initial offering in May 2013 and raised $1.2 billion in investor equity before closing in April 2015.
W. P. Carey ranks among the largest net lease REITs with an enterprise value of approximately $25 billion.