W. P. Carey Exits All Non-Traded Retail Fundraising Activities
The board of W. P. Carey Inc. (NYSE: WPC), a publicly traded real estate investment trust, approved a plan to exit all non-traded retail fundraising activities to focus exclusively on net lease investing for the company’s balance sheet.
The company will cease all non-traded retail fundraising activities carried out by its wholly-owned broker-dealer subsidiary, Carey Financial LLC, effective June 30, 2017. All existing managed programs will continue to be managed by the company through the end of their natural lifecycles.
W.P. Carey’s managed programs include the Corporate Property Associates and Carey Watermark families of non-traded REITs; Carey Credit Income Fund and its various feeder funds which operate as business development companies; and Carey European Student Housing Fund I, a limited partnership that develops, owns, and operates student housing properties and similar investments in Europe.
“The board and management team continually evaluate the company’s business strategy to maximize long-term value for our shareholders,” said Mark DeCesaris, W. P. Carey’s chief executive officer. “We looked closely at the potential structures for new products such as CPA:19 — Global, including the types of investments that would satisfy their liquidity and leverage needs, and the time and scale required for them to reach profitability. Our conclusion was that our shareholders would be better served by focusing on our core net lease investment expertise.”
W. P. Carey’s management and board said that they believe this approach will enhance its ability to grow adjusted funds from operations through a combination of single-asset investments and portfolio acquisitions.
The company noted that the plan will eliminate costs associated with its retail fundraising platform, while preserving recurring income streams from the company’s non-traded investment platform. Other benefits the company noted include increasingly stable and more predictable earning, simplified disclosure and communication with the investment community, and being well-positioned to potentially acquire the net lease assets owned by the CPA® REITs.
The company said that it does not expect this decision to impact its 2017 guidance range expects to report AFFO of between $5.10 and $5.30 per diluted share.
W. P. Carey is an internally-managed net lease REIT that provides sale-leaseback and build-to-suit financing solutions primarily for companies in the U.S. and Europe. At March 31, 2017, the company had an enterprise value of approximately $10.7 billion. In addition to its owned portfolio, the company manages a series of non-traded publicly-registered and private investment programs with assets under management of approximately $13 billion.
