W. P. Carey Inc. Reit · NYSE:WPC
W. P. Carey Inc. Reit — W. P. Carey — Investor Day (April 2013)
118 slides from W. P. Carey Inc. Reit's investor day presentation, Apr 5, 2013
Slide 1: W. P. Carey: Investing for the Long Run
W.P_CAREY INVESTING FOR THE LONG RUN™
Slide 2: Agenda
Introductory Remarks Trevor Bond, President and CEO Investment Process and Strategy Gino Sabatini, Managing Director and Co-Head of Global Investments Jason Fox, Managing Director and Co-Head of Global Investments Portfolio Review: An Active Approach to Asset Management Thomas E. Zacharias, COO and
Slide 3: Forward-Looking Statements
Forward-Looking Statements Certain of the matters discussed in this communication constitute forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, both as amended by the Private Securities Litigation Reform Act of 1995. The forward-looki
Slide 4: Non-GAAP Financial Measures
Non-GAAP Financial Measures Funds from operations (“FFO”) is a non-GAAP defined by NAREIT. NAREIT defines FFO as net income or loss (as computed in accordance with GAAP) excluding: depreciation and amortization expense from real estate assets, impairment charges on real estate, gains or losses from
Slide 5: WPC Inc. Timeline
1973 – Company Founded by Wm. Polk Carey 1979 – CPA® Series Begins 1998 – CPA®:1-9 Go Public on NYSE as Carey Diversified LLC 1999 – London Office Established 2000 – Merger Between W. P. Carey & Co. LLC & Carey Diversified LLC 2012 – CPA ®:15 Merger / REIT Conversion 2013 – W. P. Carey Celebrates it
Slide 6: WPC Inc. Today – Our Business Model
Net Lease Ownership Investment Management Business WPC Inc. 83% of overall revenues(1) $6.6 billion AUM(3) 98.7% occupancy 17% of overall revenues(2) $8.5 billion AUM(4) 98.2% occupancy Investing for the long runTM | 6 WPC Inc. Today – Our Business Model (1) Includes our fourth quarter 2012 annualiz
Slide 7: How Do We Earn Revenues?
Net Lease Portfolio Directly-Owned Assets Joint Ventures FFO from Ownership in the CPA® REITs CPA®:16 – Global: 18.3% CPA®:17 – Global: 1.3% CWI: 0.4% Special GP Interest: Up to 10% of Cash Flow CPA®:16 – Global CPA®:17 – Global Investing for the long runTM | 7 How Do We Earn Revenues?
Slide 8: How Do We Earn Revenues?
Net Lease Portfolio Directly-Owned Assets Joint Ventures FFO from Ownership in the CPA® REITs CPA®:16 – Global: 18.3% CPA®:17 – Global: 1.3% CWI: 0.4% Special GP interest: Up to 10% of Cash Flow CPA®:16 – Global CPA®:17 – Global Investing for the long runTM | 8 How Do We Earn Revenues? Investment Ma
Slide 9: Relative Size of WPC Group Portfolios
Investing for the long runTM | 9 Relative Size of WPC Group Portfolios In billions WPC(1) CPA®:16(2) CPA®:17(2) CWI(2) (1) Based on March 28, 2013 closing price of $67.40 and pro rata debt as of December 31, 2012. (2) Includes estimated value of assets under management, cash and distributions payabl
Slide 10: Our Portfolios by Geography
Investing for the long runTM | 10 WPC Group Today – Our Portfolios by Geography
Slide 11: Our Portfolios by Industry
Investing for the long runTM | 11 WPC Group Today – Our Portfolios by Industry Based on annualized base rents and exchange rates as of December 31, 2012.
Slide 12: Our Portfolios by Property Type
Investing for the long runTM | 12 WPC Group Today – Our Portfolios by Property Type Based on annualized base rents and exchange rates as of December 31, 2012. Industrial Office Warehouse/Distribution Retail Other Self-Storage
Slide 13: Investments Process and Strategy
Investing for the long runTM | 13 Investments Process and Strategy Gino Sabatini & Jason Fox Co-Heads of Global Investments
Slide 14: Our Approach to Net Lease Investing
Our Approach to Net Lease Investing Investing for the long runTM | 14 Four Key Components of a Sale-Leaseback Transaction
Slide 15: Our Approach: Creditworthiness of the Tenant
Our Approach to Net Lease Investing Investing for the long runTM | 15 Creditworthiness of the tenant Four Key Components of a Sale-Leaseback Transaction
Slide 16: Investment Process - Credit Worthiness
Industry drivers and trends Competitor analysis Company history Historical financials Capital structure Investment Process - Credit Worthiness Business model projections Margin and ratio analysis Management interviews Stress testing Our credit analysis is a top-down and bottom-up approach, which del
Slide 17: Our Approach: Criticality of Assets
Our Approach to Net Lease Investing Investing for the long runTM | 17 Creditworthiness of the tenant Asset(s) critical to the tenant’s business Four Key Components of a Sale-Leaseback Transaction
Slide 18: Investment Process - Criticality of Asset
Office: A Corporate Headquarters or Key R&D Facility? Industrial: Key Distribution Facility or Profitable Manufacturing Plant? Retail: Top Performing Stores? Investment Process - Criticality of Asset Look for mission-critical assets that are important to the tenant’s ongoing success Investing for th
Slide 19: Our Approach: Fundamental Real Estate Value
Our Approach to Net Lease Investing Investing for the long runTM | 19 Creditworthiness of the tenant Asset(s) critical to the tenant’s business Fundamental value of the underlying real estate Four Key Components of a Sale-Leaseback Transaction
Slide 20: Investment Process – Real Estate
Local market analysis Property condition Environmental analysis Third party valuation Residual analysis We look to acquire real estate that has inherent value – helping to mitigate a tenant default Downside analysis - Contract rent vs. market rent - Market vacancy - TI's/LC’s for re-tenanting Invest
Slide 21: Our Approach: Transaction Structure and Pricing
Our Approach to Net Lease Investing Investing for the long runTM | 21 Creditworthiness of the tenant Asset(s) critical to the tenant’s business Transaction structure and pricing Fundamental value of the underlying real estate Four Key Components of a Sale-Leaseback Transaction
Slide 22: Investment Process – Structure
The proper structure helps to minimize risk in a default scenario, as well as maximize returns Lease terms Financial covenants Security deposits/LCs Prudent use of leverage Non-recourse, property level debt Long-term, fixed-rate, amortizing Investment Process – Structure Investing for the long runTM
Slide 23: Our Approach to Net Lease Investing
Successful net lease investing requires balancing these four elements in a large, well-diversified portfolio Our Approach to Net Lease Investing Investing for the long runTM | 23 Creditworthiness of the tenant Asset(s) critical to the tenant’s business Transaction structure and pricing Fundamental v
Slide 24: The W. P. Carey Difference – What Sets Us Apart
The W. P. Carey Difference – What Sets Us Apart Investing for the long runTM | 24 Unique In-House Capabilities Proprietary deal flow International presence – True Global Investor Diversified underwriting capabilities / active asset management
Slide 25: Proprietary Deal Flow
Relationship-Driven Deal Sourcing Well-known brand with 40 years of history in the industry Deep relationships with top investment sales and net lease brokers Long history with private equity firms and their portfolio companies Developers (build-to-suits) Installed base of existing tenants Investing
Slide 26: International Presence – True Global Investor
Long Track Record W. P. Carey has been investing internationally for 15 years 19 countries globally, including 12 in Europe 289 properties internationally 52 tenants Approximately $3.5 billion international AUM Investing for the long runTM | 26 International Presence – True Global Investor
Slide 27: International Presence – True Global Investor
North America 12 Investment Professionals (New York and Dallas) Europe 4 Investment Professionals (London) Asia 5 Investment Professionals (Shanghai) Latin America 1 Investment Professional (São Paulo) India 1 Investment Professional (Delhi) Investing for the long runTM | 27 International Presence –
Slide 28: Why We Like Europe
Why We Like Europe: More owner-occupied commercial real estate Higher population density Stronger political involvement deters plant closures Stricter zoning / land-use regulations High barriers to entry for competitors Opportunistic pricing: spreads currently almost 100 bps wider than similar US de
Slide 29: Active Asset Management and Structured Investments
Active Asset Management Highly Structured Investments Harmon Center/Walgreens Las Vegas NY Times In-House, Build-to-Suit Management ~20% of annual deal flow Dedicated personnel Value-Add Opportunities KBR Self Storage Investing for the long runTM | 29
Slide 30: Total Transaction Volume 2004 – 2012
Total Transaction Volume 2004 – 2012 Total Acquisitions U.S. / International* *Includes transactions by WPC and the CPA®: REITS; includes estimated funding commitments for build-to-suit investments. Investing for the long runTM | 30 (In Billions) $1.2B $0.7B
Slide 31: Investments: Case Studies
Investments: Case Studies Investing for the long runTM | 31
Slide 32: Transaction Summary – New York Times
Facility Type: Headquarters and Office Terms: $225M, 15-year lease Size: 751,500 square feet Location: New York, NY Description of Tenant: The New York Times Company is a leading media company that publishes The New York Times, several other daily newspapers, and more than 50 Web sites, including NY
Slide 33: Transaction Summary – McKesson/US Oncology
Facility Type: Office Terms: $42M, 14+ year lease Size: 204,063 square feet Debt: 64% LTV, 10-year term, non-recourse Location: The Woodlands, TX Description of Tenant: The US Oncology Network is one of the nation's largest networks of community-based oncology physicians dedicated to advancing cance
Slide 34: Transaction Summary – Kraft Foods
Facility Type: Headquarters and Office Terms: $72.5M, 10-year lease Size: 679,109 square feet Debt: 50% LTV, 10-year term, Location: Northfield, IL Description of Tenant: Kraft Foods Group is North America’s fourth largest consumer packaged food and beverage company, with revenues of approximately $
Slide 35: Transaction Summary - Hellweg
Facility Type: 37 Retail Stores Terms: Two transactions: $154M and $379M Debt: 87% LTV Location: Germany Description of Guarantor: Hellweg Die Profi-Baumarkte GmbH & Co. KG, originally founded in 1905 as a lumber retailer, has been operating in the Do-It-Yourself industry for the last 35 years and i
Slide 36: Transaction Summary – Walgreens Las Vegas
Walgreens Sale-Leaseback Terms: $38.5M, 30-year lease Size: 24,721 square feet Debt: $40M, 10-year term fixed rate Location: Las Vegas, NV Description of Tenant: Rated A by S&P and A3 by Moody’s, Walgreens is the largest drugstore chain in the United States, operating over 7,800 locations. Harmon Ce
Slide 37: Transaction Summary – CARQUEST
INVESTING FOR THE LONG RUN™ 37 Purchase Price: $245M Facility Type: 29 distribution centers & 4 office buildings Location: Various across North America CPA®:17 – Global purchased 29 distribution centers and 4 office buildings located across North America, leased to CARQUEST Auto Parts and guaranteed
Slide 38: Transaction Summary – NSG Build-to-Suit
Facility Type: To-be-built Warehouse Facility Terms: $25.4M, 20-year lease Annual Euro CPI increases Size: 377,579 square feet Debt: 50% LTV, 5-year, fixed rate Location: Tarnobrzeg, Poland Description of Guarantor: NSG is the world’s 3rd largest sheet glass manufacturer producing windows for cars a
Slide 39: Transaction Summary – Wanbishi Archives
Facility Type: Warehouse/Distribution Terms: $55M, 10-year lease, 3% CPI increases every six years (starting in 2016) Size: 150,640 square feet Debt: 65% LTV, 5-year term, 2% fixed rate interest rate, interest only Location: Saitama Prefecture, Japan Description of Guarantor: Wanbishi is a market le
Slide 40: Transaction Summary – KBR
Facility Type: Headquarters and Office Terms: $177.7M, ~17 year, variable increases Size: 1,047,748 square feet Debt: 72.1% LTV, 10-year term, Location: Houston, TX Description of Tenant: KBR is a global engineering, construction and services company supporting the energy, hydrocarbon, government se
Slide 41: Q&A
Q&A Investing for the long runTM | 41
Slide 42: Portfolio Review: An Active Approach to Asset Management
Portfolio Review: An Active Approach to Asset Management Thomas E. Zacharias, COO and Head of Asset Management Brooks Gordon, Executive Director, Asset Management Investing for the long runTM | 42
Slide 43: Presentation Overview
Investing for the long runTM | 43 Presentation Overview WPC Inc. Portfolio Detail Proactive Asset Management - Structure and Capabilities Case Studies - Creating Value for Our Investors
Slide 44: Relative Size of WPC Group Portfolios
Investing for the long runTM | 44 Relative Size of WPC Group Portfolios WPC CPA®:16 CPA®:17 CWI Square Feet (In Thousands)
Slide 45: WPC Group Portfolio Key Statistics
Investing for the long runTM | 45 WPC Group Portfolio Key Statistics 1) Data pro rata as of 12/31/12. 2) WPC based on 3/28/2013 closing price of $67.40. WPC Inc. CPA®:16 - Global CPA®:17 - Global CWI W. P. Carey Group Total square feet 38.7M 47.3M 36.0M 1,751 rooms 122.0M Tenants 124 146 81 NA 296 P
Slide 46: WPC Inc. Top Tenants by Rent
Investing for the long runTM | 46 WPC Inc. Top 10 Tenants by Rent Annualized Rent % of Total Lease Term (Years) S&P Rating 1 $26,083,206 8.2% 16.9 - 2 18,741,438 5.9% 11.1 - 3 17,752,126 5.6% 9.8 BBB 4 16,794,030 5.3% 1.6 BBB 5 13,414,282 4.2% 11.4 - 6 10,108,215 3.2% 6.1 - 7 7,573,971 2.4% 6.9 BBB
Slide 47: Geographic Diversification by Rent
Investing for the long runTM | 47 WPC Inc. Geographic Diversification by Rent Based on annualized base rents and exchange rates as of December 31, 2012. Europe South West East Midwest
Slide 48: Property Type Diversification by Rent
North America Investing for the long runTM | 48 WPC Inc. Property Type Diversification by Rent Europe Based on annualized base rents and exchange rates as of December 31, 2012. Office Industrial Other Warehouse Self-storage Retail
Slide 49: Internal Rent Growth Profile
Investing for the long runTM | 49 WPC Inc. Internal Rent Growth Profile 98% of leases include either fixed or CPI-based rent increases or percentage rent. Based on annualized base rents and exchange rates as of December 31, 2012. Uncapped CPI CPI - Based Fixed Other None
Slide 50: Tenant Credit Diversification by Rent
Investing for the long runTM | 50 WPC Inc. Tenant Credit Diversification by Rent Investment Grade + Implied Investment Grade: 50.4% Bankruptcy Watch Stable Implied Investment List Investment Grade Grade Based on annualized base rents and exchange rates as of December 31, 2012.
Slide 51: Lease Expiration Schedule
Investing for the long runTM | 51 WPC Inc. Lease Expiration Schedule Based on annualized base rents and exchange rates as of December 31, 2012.
Slide 52: WPC Inc. Debt Maturity
Investing for the long runTM | 52 WPC Inc. Debt Maturity 1) Reflects outstanding recourse debt on the unsecured line of credit (15.8% of total debt maturities). 2014(1)
Slide 53: What Do We Mean by Proactive Asset Management?
Asset level & portfolio strategy Industry & credit analysis Tenant relationships Local market insight Residual risk analysis Proactive lease restructuring Opportunistic mindset Investing for the long runTM | 53 What Do We Mean by Proactive Asset Management?
Slide 54: Unique Staffing Model
Investing for the long runTM | 54 Unique Staffing Model Transactions Team 13 transactions officers Individual tenant relationships Team approach to deal flow High productivity Relationship continuity Operations Team 29 team members Individual specialized expertise Team approach to compliance Scalabl
Slide 55: Global Asset Management Presence
Location Transactions Operations Total New York 9 10 19 Amsterdam 3 18 21 Shanghai 1 1 2 Total 13 29 42 Investing for the long runTM | 55 Global Asset Management Presence Local “Boots on the Ground” Fluent in 18 languages In-Person tenant communication
Slide 56: Asset Management Capabilities
Investing for the long runTM | 56 Asset Management Capabilities Leasing Mortgage financing Dispositions Lease modifications Credit & real estate risk analysis Bankruptcy & Workout Lease compliance Insurance Property inspections Non-NNN lease administration Real estate tax Build to suit Projections &
Slide 57: Asset Management: Case Studies
Asset Management: Case Studies Investing for the long runTM | 57
Slide 58: How Do We Minimize Vacancy & Downtime?
Investing for the long runTM | 58 How Do We Minimize Vacancy & Downtime? Tenant relationships Early renewals Local market intelligence Strictly enforce maintenance & capex requirements
Slide 59: Case Study: New Lease – Google
Investing for the long runTM | 59 Case Study: New Lease Google, Inc. Venice, CA Office Background Acquisition Date: 1994 Acquisition Price: $16.3M ($240 PSF) Square Feet: 67,682 Outcome New Tenant: Google New Rent: ~$30 PSF New Term: 15 years Early Visibility & Creative Approach
Slide 60: When Do We Sell An Asset?
Investing for the long runTM | 60 When Do We Sell An Asset? Opportunistic sales Market value > Expected intrinsic value Underwritten credit & residual risk differs from market view Monetize upside & unlock value End of investment lifecycle
Slide 61: Case Study: Market Value > Intrinsic Value
Investing for the long runTM | 61 Case Study: Market Value > Intrinsic Value B/E Aerospace Miami Warehouse/Office Background Acquisition Date: 2002 Acquisition Cost: $15.5M ($74 PSF) Square Feet: 209,000 Outcome Disposition Date: 2012 Disposition Price: $26M ($124 PSF) Result: 21.3% IRR Reinvested C
Slide 62: Case Study: Credit & Real Estate Risk
Investing for the long runTM | 62 Case Study: Credit & Real Estate Risk Best Buy Co. Inc. National Big Box Portfolio Background Acquisition Date: 1993 Acquisition Cost: $46M ($102 PSF) Square Feet: 452,348 (12 stores) Outcome Disposition Date: 2011 Disposition Price: $53.3M ($118 PSF) Constant Credi
Slide 63: Case Study: Opportunistic Sale
Investing for the long runTM | 63 Case Study: Opportunistic Sale Médica France, S.A. Nursing Homes in France Background Acquisition Date: 2002 Acquisition Cost: $43.5M ($129 PSF) Square Feet: 336,923 (6 facilities) Outcome Disposition Date: 2012 Disposition Price: $74.5M ($222 PSF) Result: IRR 27% C
Slide 64: When Do We Restructure A Deal?
Blend & extend Multi-property lease restructure Expansion Credit upgrade Sublease to direct Investing for the long runTM | 64 When Do We Restructure A Deal?
Slide 65: Case Study: Expansion & Lease Extension
Investing for the long runTM | 65 Case Study: Expansion & Lease Extension Gestamp Alabama Auto Parts Plant Background Acquisition Date: 2003 Acquisition Cost: $15M ($38 PSF) Square Feet: 390,000 Outcome Transaction Date: 2013 Expansion: 80,000 SF New Investment: $6.35M New Lease Term: 15 years Tenan
Slide 66: Case Study: Expansion & Restructure
Investing for the long runTM | 65 Case Study: Expansion & Restructure Background Acquisition Date: March 2011 Acquisition Cost: $35M ($34 PSF) Square Feet: 1,010,859 Outcome Transaction Date: 2013 Expansion: 1,000,000 SF New Investment: $37M New Lease Term: 20 years Harbor Freight Tools East Coast D
Slide 67: How Do We Proactively Manage Defaults?
Investing for the long runTM | 67 How Do We Proactively Manage Defaults? Early visibility Aggressively provide alternatives to default Creative workouts & flexibility Sophisticated bankruptcy expertise Non-recourse debt
Slide 68: Case Study: Workout
Investing for the long runTM | 68 Case Study: Workout Wellbridge National Fitness Club Portfolio Background Acquisition Date: 2003 Acquisition Cost: $206M Size: 17 Fitness Clubs Outcome New Operators: Life Time & TSI Disposition Dates: 2007 & 2011 Disposition Price: $185M Total Result: 9.8% IRR Cred
Slide 69: How Do We Optimize Our Asset-Level Debt?
Investing for the long runTM | 69 How Do We Optimize Our Asset-Level Debt? Comprehensive asset strategy prior to maturity Early lease renewals Direct lender relationships CMBS / balance sheet / insurance / regional / local Opportunistic refinancing Sophisticated document negotiation
Slide 70: Conclusions
Investing for the long runTM | 70 Conclusions Large & diversified portfolio Diverse skill set & unique staffing model High productivity & valuable relationship continuity Proactive asset & portfolio management to maximize returns Replicate successful outcomes across a variety of deals
Slide 71: Q&A
Q&A Investing for the long runTM | 71
Slide 72: Break
Break Investing for the long runTM | 72
Slide 73: Investment Management: A Key Driver of Growth
Investment Management: A Key Driver of Growth John Park, Director of Strategic Planning Investing for the long runTM | 73
Slide 74: Long-Term Strategy
Investing for the Long RunTM | 74 How do we translate our core competency of being a successful investor over the long term into shareholder wealth? Long-Term Strategy
Slide 75: Long-Term Strategy
Investing for the Long RunTM | 75 Keep fine tuning the investment /asset management process Long-Term Strategy
Slide 76: Long-Term Strategy: Transform Over Time
Investing for the Long RunTM | 76 Keep fine tuning the investment /asset management process Transform over time – C corp. Sub S LLC REIT – Asset manager to owner Long-Term Strategy
Slide 77: Improved Access to Capital Markets
Investing for the Long RunTM | 77 Improved access to capital markets Currency to pursue future growth opportunities W. P. Carey REIT
Slide 78: Why Keep the Investment Management Business?
Investing for the Long RunTM | 78 Why keep the investment management business? “Asset management business seems really complicated” W. P. Carey REIT
Slide 79: Owner, Shareholder, GP and Manager
Investing for the Long RunTM | 79 Owner (100%, majority, minority), shareholder, GP and manager W. P. Carey REIT
Slide 80: Complex Reporting = Complex Business
Investing for the Long RunTM | 80 Owner (100%, majority, minority), shareholder, GP and manager W. P. Carey REIT Complex reporting = Complex business
Slide 81: Same Process, Same People, Operating Leverage
Investing for the Long RunTM | 81 Same process Same people Operating leverage Same decision making W. P. Carey REIT
Slide 82: Investment Management Business: Capital Source
Investing for the Long RunTM | 82 Capital Source Non-dilutive to existing shareholders Long-term and patient Cycle resistant access Investment Management Business
Slide 83: CPA Program Performance
CPA® Program Performance Investing for the long runTM | 83 Program Program Life Total Return as % of Original Investment Average Annual Total Return (Net of Fees) IRR (Net of Fees) CPA®:1 1979-1998 237% 7.2% 7.0% CPA®:2 1980-1998 369% 14.9% 13.2% CPA®:3 1982-1998 408% 18.8% 15.1% CPA®:4 1983-1998 31
Slide 84: Economic Benefits of Investment Management Business
Investing for the Long RunTM | 84 Economic benefits of our investment management business High margins Allows us to spread our costs over a bigger asset base Investment Management
Slide 85: WPC Earns Contractual Fees as Advisor
Investing for the long runTM | 85 We receive structuring revenue of up to 4.5% of the total cost of long-term, net-lease investments made by each CPA®: REIT. For certain types of non-long term net lease investments acquired on behalf of CPA®:17 – Global, structuring revenue may range from 0% to 1.75
Slide 86: Maintain and Enhance Access to Multiple Sources of Capital
Investing for the Long RunTM | 86 Keep fine tuning the investment / asset management process Maintain and enhance access to multiple sources of capital Long-Term Strategy
Slide 87: Overview of Managed Funds
Overview of Managed Funds Mark Goldberg, President - Carey Financial Investing for the long runTM | 87
Slide 88: Why Do We Like the Non-Traded REIT Vehicle?
Why as an investment manager do we like the Non-Traded REIT vehicle? Size and scope of the investment management space. Why do we attract significant capital? How does our investment discipline allow us to stand alone? Is the model sustainable? What are our growth prospects? Managed Funds Review Inv
Slide 89: Why Do We Like Non-Traded REITs?
Why As an Asset Manager Do We Like Non-Traded REITs? Average Holding Product Structure Period Mutual Funds Separate Accounts Variable Annuities Non-Traded REITs (CPA®) Sources: Cerulli Associates, Investment Company Institute, National Association of Variable Annuities and Investment Program Institu
Slide 90: The Size and Scope of Investment Management Funds
Capital Inflow (in millions) The Size and Scope of Investment Management Funds Investing for the long runTM | 90 Public NT-REITs 2003 $7,057 2004 6,254 2005 5,837 2006 6,666 2007 11,519 2008 9,585 2009 6,105 2010 8,107 2011 8,358 2012 10,284 10-Yr Total $79,772 10-Yr Avg $7,977
Slide 91: The Size and Scope of Investment Management Funds
Public NT-REITs Equity by Traded REITs Total Equity by REITs NT REITs As % Total REIT Equity 2003 $7,057 $8,117 $15,174 47% 2004 6,254 15,318 21,572 29% 2005 5,837 12,310 18,147 32% 2006 6,666 17,966 24,632 27% 2007 11,519 13,674 25,193 46% 2008 9,585 11,623 21,208 45% 2009 6,105 24,234 30,339 20% 2
Slide 92: The Size and Scope of Investment Management Funds
The Size and Scope of Investment Management Funds Investing for the long runTM | 92 Capital Inflow (in millions)
Slide 93: The Size and Scope of Investment Management Funds
The Size and Scope of Investment Management Funds Investing for the long runTM | 93 Capital Inflow (in millions)
Slide 94: The Size and Scope of Investment Management Funds
The Size and Scope of Investment Management Funds Investing for the long runTM | 94 Capital Inflow (in millions)
Slide 95: Non-Traded REIT Liquidity Events
Non-Traded REIT Date of Liquidity Event Event Type Years Invested Equity $ in millions 1 Cornerstone Realty Income Trust, Inc. 4/1997 Listing 4.3 300 2 Apple Suites, Inc. 1/2003 Merger 3.5 125 3 Inland Real Estate Corporation 6/2004 Listing 9.7 539 4 CIP 8/2004 Merger 13.1 141 5 CPA®:10 8/2004 * Mer
Slide 96: Why Do NTRs Attract Significant Capital?
Weighted Average Hold Weighted Average IRR - Low - High Investing for the long runTM | 96 Why Do NTRs Attract Significant Capital? Source: Blue Vault Partners, LLC, Nontraded REIT Industry Full-Cycle Performance Study 6/1/2012 8.5 years 9.55% 3.9% 27.8%
Slide 97: Distribution of CPA REIT IRRs
*Internally sourced. CPA®:1 CPA®:2 CPA®:3 CPA®:4 CPA®:5 CPA®:6 CPA®:7 CPA®:8 CPA®:9 CPA®:10 CPA®:11 CPA®:12 CPA®:14 CPA®:15 Standard Deviation Distribution of CPA® REIT IRRs show a very tight return dispersion How Our Investment Discipline Allows Us to Stand Alone Investing for the long runTM | 97 A
Slide 98: Remaining Industry Non-Liquidated Funds
* As of 12/31/2012, not including DRIP proceeds. Data for 4 funds unavailable. Source: Stanger 72 remaining funds $59.9 billion in original equity* $88.3 billion of GAAP book assets Remaining Industry Non-Liquidated Funds Investing for the long runTM | 98
Slide 99: W. P. Carey Managed Funds Capital Raised
2003 $559M 2004 542 2005 10 2006 550 2007 0 2008 342 2009 438 2010 593 2011 630 2012 1,039 Total $4.7B W. P. Carey Managed Funds Capital Raised Top two sponsors raised $3.4B Top two sponsors raised $5.1B How Our Investment Discipline Allows Us to Stand Alone Investing for the long runTM | 99
Slide 100: Founder Quote on Investment Discipline
“I continue to be proud of the job that our people are doing for me as an investor and for all of my fellow investors. As to one of the things that I’ve been striving for was not to be too dependent upon investment volume because we don’t want to be pressured into investing when it’s not the time to
Slide 101: CPA Programs Quarterly Distributions
The CPA® Programs have: 801 quarterly distributions over 34 year 676 quarterly distributions increasing over prior quarter 8 quarterly distributions decreasing over prior quarter How Our Investment Discipline Allows Us to Stand Alone Investing for the long runTM | 101 As of Past performance does not
Slide 102: CPA Programs Quarterly Distributions
The CPA® Programs have: 801 quarterly distributions over 34 years 676 quarterly distributions increasing 8 quarterly distributions decreasing No full term investor has lost money in any completed CPA® Program. How Our Investment Discipline Allows Us to Stand Alone Investing for the long runTM | 102
Slide 103: Is the Model Sustainable?
Regulatory Actions High Commission Product Is the Model Sustainable? Investing for the long runTM | 103
Slide 104: What Are Our Growth Prospects?
Carey Watermark Investors Future Funds Broader Distribution What Are Our Growth Prospects? Investing for the long runTM | 104
Slide 105: Investment Funds Review
Why as an asset manager do we like the NTR vehicle? Size and Scope of the NTR Investment Management Space. Why do NTRs attract significant capital? How does our investment discipline allow us to stand alone? Is the model sustainable? What are our growth prospects? Long duration Steady and growing Pe
Slide 106: Q&A
Q&A Investing for the long runTM | 106
Slide 107: Financial Review
Financial Review Katy Rice, Chief Financial Officer Investing for the long runTM | 107
Slide 108: Financial Highlights: Strong Operating Results
Investing for the long runTM | 108 Financial Highlights Strong Operating Results AFFO - 7.7% CAGR over past 5 years CPA®:15 merger and REIT conversion created platform for growth Note: Past performance does not guarantee future results.
Slide 109: Financial Highlights: Broad Access to Equity Capital
Investing for the long runTM | 109 Financial Highlights Broad access to equity capital Public – Equity market for REITs remains strong Private Raised $2.9 billion via CPA®:17 – Global, with $372 million available(1) Raised $228 million via CWI, with $38 million available(1) Capital raises dictated b
Slide 110: Financial Highlights: Conservative Capital Structure
Investing for the long runTM | 110 Financial Highlights Conservative capital structure Total Debt to Total Market Cap of 29.8% All non-recourse leverage, except line of credit Exploring feasibility of unsecured debt funding model for WPC Note: Past performance does not guarantee future results.
Slide 111: Financial Highlights: Well-Covered Dividend
Investing for the long runTM | 111 Financial Highlights Well-covered dividend Increased quarterly dividends each of the past 48 consecutive quarters Annual dividend growth has averaged 2.9% from 1998–2012 Note: Past performance does not guarantee future results.
Slide 112: Historical Operating Results
Investing for the long runTM | 112 Historical Operating Results Includes market capitalization based on WPC’s 3/28/2013 closing price of $67.40 and pro rata debt as of 12/31/2012. Includes the estimated value of assets under management, cash and distributions payable. In millions 2008 2009 2010 2011
Slide 113: Historical Operating Results
Investing for the long runTM | 113 Historical Operating Results WPC Inc. 2008 2009 2010 2011 2012 AFFO $124.5 $122.9 $130.9 $188.9 $180.6 AFFO per share (diluted) $3.09 $3.09 $3.27 $4.71 $3.76 Diluted Shares outstanding (wtd avg) 40,221 39,713 40,008 40,098 48,078 88% of WPC’s pro forma AFFO is deri
Slide 114: Strong Balance Sheet
Investing for the long runTM | 114 Strong Balance Sheet WPC Inc. Capitalization Equity Market Capitalization(1) $4.6 billion Total Debt $2.0 billion Total Capitalization $6.6 billion Selected Metrics Total Debt / Total Market Capitalization (1) 29.8% Current Dividend Annualized $3.28 2012 AFFO Per S
Slide 115: Dividend Growth
Investing for the long runTM | 115 Dividend Growth Consistent Historical Growth WPC has increased its dividend every year since going public in 1998 Announced 24% dividend increase for Q1 2013 Reflects addition of CPA®:15 assets Target to distribute 100% of taxable income Note: Annualized dividend p
Slide 116: Five-Year Total Return Comparison
Returns have outpaced major indices, including the S&P 500 and the FTSE NAREIT Equity REIT index Investing for the long runTM | 116 Five-Year Total Return Comparison Note: Past performance does not guarantee future results. Source: SNL Financial LC, Charlottesville, VA, 2012, www.snl.com
Slide 117: Conclusion
Conclusion Trevor Bond, President and Chief Executive Officer Investing for the long runTM | 117
Slide 118: Q&A
Q&A Investing for the long runTM | 118