W. P. Carey to Merge with Affiliated Non-Traded REIT in $2.7 Billion Transaction
Corporate Property Associates 18 – Global Incorporated, a publicly registered non-traded real estate investment trust, has agreed to merge with its advisor, W. P. Carey Inc.
Corporate Property Associates 18 – Global Incorporated, a publicly registered non-traded real estate investment trust, has agreed to merge with its advisor, W. P. Carey Inc. (NYSE: WPC), a publicly traded REIT, in a transaction valued at approximately $2.7 billion.
W. P. Carey is the second largest net lease REIT and will have a pro forma equity market capitalization of $15.8 billion.
CPA:18 stockholders will receive total merger consideration of 0.0978 shares of W. P. Carey common stock and $3.00 of cash for each share of CPA:18 Class A and Class C common stock they own. The total merger consideration reflects a value of $10.45 per share based on W. P. Carey’s trailing 3-day volume weighted average price of $76.17 as of February 25, 2022. The W. P. Carey shares that will be issued in the merger will be listed on the New York Stock Exchange at the time of issuance.
“We are pleased to have structured a transaction that will provide investors in CPA:18 – Global with liquidity as well as the opportunity to continue their investment in a similar company, receiving income in the form of quarterly dividends and participating in the potential upside in a leading publicly traded REIT,” said Jason Fox, W. P. Carey’s chief executive officer. “It also provides W. P. Carey – the surviving company – with the opportunity to purchase high quality assets that align well with its own portfolio, generating stable and recurring real estate revenues that will support our focus on growth and income for investors.”
Shares of W.P. Carey opened at $76.99 on Monday, jumped to $78.17 following the proposed merger news, and closed at $77.40.
The merger is expected to close in the third quarter of 2022, with the approval of CPA:18 shareholders.
Corporate Property Associates 18 – Global invests in commercial real estate properties leased to companies domestically and internationally in addition to self-storage and student housing assets.
As of December 31, 2021, the REIT’s net lease portfolio was comprised of 53 properties, substantially all of which were fully occupied and triple-net leased to 50 tenants, and totaled approximately 10.4 million square feet. The remainder of the portfolio was comprised of 65 self-storage properties, three student housing development projects, and one student housing operating property, totaling 5.1 million square feet.
CPA:18 – Global’s offering was declared effective in May 2013 and closed in April 2015 after raising $1.2 billion in investor equity. As of the fourth quarter of 2021, the REIT had investments in real estate of $2.4 billion.
