W. P. Carey Inc. Reit · NYSE:WPC
W. P. Carey Inc. Reit — W. P. Carey — Investor Presentation (May 2013)
34 slides from W. P. Carey Inc. Reit's investor presentation, May 2013
Slide 1: Investing for the Long Run
Investing for the Long Run TM May 2013
Slide 2: Disclosures
Disclosures Cautionary Statement Concerning 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 Lit
Slide 3: Investment Highlights
Investment Highlights • Largest owner/manager of triple net lease assets • Superior credit and real estate underwriting platform leveraged across various industries and property types • Stable cash flows from long-term leases to creditworthy tenants • Solid stream of fee income from $8.6 billion of
Slide 4: Investment Strategy
Investment Strategy • Generate attractive risk-adjusted returns by identifying growing companies with real estate assets globally • Create upside through lease escalations, credit improvements and real estate appreciation • Protect downside by combining credit and real estate underwriting with sophi
Slide 5: Sale-Leaseback Process
Sale-Leaseback Process • Alternative form of financing • Company sells its real estate for cash and enters into long-term lease • Long-term leases translate into steady cash flow Investing for the Long RunTM | 5
Slide 6: Background: W. P. Carey Inc.
Background: W. P. Carey Inc. 1 • Founded in 1973 and publicly listed since 1998, W. P. Carey (NYSE: WPC) is a publicly traded REIT specializing in sale- leaseback investments of corporate-owned real estate worldwide • The Company’s REIT conversion, which became effective October 1, 2012, expanded it
Slide 7: The Latest Chapter: Conversion to REIT Status
The Latest Chapter: Conversion to REIT Status Benefits of the Merger with CPA®:15 Benefits of REIT Conversion • Supports W. P. Carey’s overall strategy and • Enhances W. P. Carey’s access to capital significantly grows W. P. Carey’s high-quality markets real estate asset base • Creates better curren
Slide 8: Our Business Model
Our Business Model Owns Manages Diversified Net Lease Portfolio CPA® REITs and CWI • Owns $7.1 billion of net-leased real • Manages $8.6 billion of net-leased real estate(1) estate • Generates approximately 84% of its • Generates approximately 16% of its revenue through its owned real revenue in fee
Slide 9: Our Real Estate Portfolio
Our Real Estate Portfolio
Slide 10: W. P. Carey's Portfolio
W. P. Carey’s Portfolio Combined Portfolio by Property Type(4) Current market capitalization of approximately $7.1 billion High-quality portfolio of premium assets • 422 properties(1) • 39 million square feet(2) • 124 tenants • 98.8% occupancy(3) Combined Portfolio by Geography(4) • Diversified port
Slide 11: Diversification: By Geography
Diversification: By Geography Investing for the Long RunTM | 11
Slide 12: Diversification: By Tenant Industry
Diversification: By Tenant Industry Diversification by Tenant Industry(1) 1) Based on pro rata ABR as of March 31, 2013. Investing for the Long RunTM | 12
Slide 13: Major Tenants: Established Corporate Credits
Major Tenants: Established Corporate Credits Annualized % of Top 10 Tenants – Combined Company Rent Total ($’000)(1) Leading German Do-It-Yourself (DIY) retailer with a broad footprint across Germany and Austria $25,992 8% North America’s largest moving and storage operator with nearly 16,000 locati
Slide 14: Stable Cash Flows from Long-Term Leases
Stable Cash Flows from Long-Term Leases Lease Maturity Schedule(1) • Average lease term of 8.8 years • Low near-term rollover: 13.1% through 2015 1) Based on pro rata ABR as of March 31, 2013. Investing for the Long RunTM | 14
Slide 15: Internal Growth from Built-In Rent Increases
Internal Growth from Built-In Rent Increases Built-In Contractual Rent Increases(1) • 95% of leases include either fixed or CPI-based rent increases or percentage rent. 1) Based on annualized base rents and exchange rates as of March 31, 2013. Investing for the Long RunTM | 15
Slide 16: Financial Results
Financial Results
Slide 17: Financial Highlights
Financial Highlights • Broad access to equity capital – Public – REIT conversion will likely increase liquidity and access to public capital – Private – W. P. Carey raised $2.9 billion via CPA®:17 - Global, its latest non- traded CPA® REIT offering, and $265 million via Carey Watermark Investors(1)
Slide 18: Combined Company Supports Continued Dividend Growth
Combined Company Supports Continued Dividend Growth Consistent Historical Growth Dividend Well Covered • W. P. Carey has increased its dividend every • AFFO payout ratio of 79.6% based on results for year since going public in 1998 the quarter ended March 31, 2013 • Current annualized rate of $3.28
Slide 19: Dividend is Well-Covered
Dividend is Well-Covered Per ShareFunds from Operations Coverage(1) DividendsAdjusted as a % of AFFO Payout Ratio 63% 51% 71% 55% 56% 63% 65% 62% 46% 65% 1) Does not include special dividends. Investing for the Long RunTM | 19 Note: Past performance does not guarantee future results.
Slide 20: Five-Year Total Return Comparison
Five-Year Total Return Comparison Returns have outpaced major indices, including the S&P 500 and the MSCI US REIT Index Five-Year Total Return Comparison Note: Past performance does not guarantee future results. Source: SNL Financial LC, Charlottesville, VA, 2013, www.snl.com Investing for the Long
Slide 21: CPA Program Performance
CPA® Program Performance Total Return as Average Annual IRR Program Program Life % of Original Total Return (Net of Fees) Investment (Net of Fees) CPA®:1 1979-1998 237% 7.2% 7.0% CPA®:2 1980-1998 369% 14.9% 13.2% CPA®:3 1981-1998 408% 18.8% 15.1% CPA®:4 1983-1998 310% 13.9% 12.2% CPA®:5 1984-1998 21
Slide 22: Fees Earned from Asset Management
Fees Earned from Asset Management WPC earns contractual fees as Advisor to the CPA® REITs and CWI Acquisition Fee(1) 4.5% Asset Management Fee(2) 0.5% per annum Cash Flow Participation(3) 10% Back-end Participation 15% of gain over a 6% return 1) We generally receive structuring revenue of up to an
Slide 23: Peer Analysis
Peer Analysis(1) Price / 2013E AFFO 2013E AFFO Payout YTD Total Return Dividend Yield(2) 1) Based on SNL consensus data and May 8, 2013 closing share prices. Investing for the Long RunTM | 23 2) Based on current annualized dividend rates.
Slide 24: Strong Balance Sheet
Strong Balance Sheet Combined Company Metrics Debt Maturity Schedule(4) Combined Company Equity Market Capitalization $5.1 billion Total Debt $2.0 billion Total Capitalization $7.1 billion Selected Metrics Total Debt / Total Market Cap. 27.9% Current Dividend Annualized $3.28 (1) Dividend Yield 4.4%
Slide 25: Appendix
APPENDIX
Slide 26: Blue Cross and Blue Shield of Minnesota
Investment Strategy Blue Cross and Blue Shield of Minnesota Facility Type Six-building headquarters campus and two additional properties Purchase Price $169 million Location Minneapolis, Aurora and Virginia, MN • Blue Cross of Minnesota was chartered in 1933 as Minnesota's first health plan • Blue C
Slide 27: The New York Times Company
Investment Strategy The New York Times Company Facility Type Global Headquarters Purchase Price $234 million Location New York City • Constructed for approximately $500 million in 2007 • Purchased for $234 million - 40% of the appraised value of the asset • 15-year lease, initial cap rate of 10.75%,
Slide 28: C1000 B.V.
Investment Strategy C1000 B.V. Facility Type Portfolio of 6 logistics properties leased on a long-term triple net basis Purchase Price $208 million Location Netherlands • C1000 B.V. is a leading Dutch supermarket with 371 stores across the Netherlands • Portfolio of 6 logistics properties represents
Slide 29: Metro A.G.
Investment Strategy Metro A.G. Facility Type 20 cash and carry stores Purchase Price $396 million Location Throughout Italy • Lease is guaranteed by its German parent company, Metro A.G. • Metro A.G. is the world’s largest cash and carry operator and third largest retailer, with 2011 revenues totali
Slide 30: Case Study – New Lease: Google, Inc.
Case Study – New Lease Google, Inc. Venice, CA Background • Acquirer: WPC • Initial Acquisition: 1994 • Square Feet: 67,682 • Original Tenant: Omnicom Group • Omnicom Lease Expiration: 9/2010 • Annual Rent: $1.2M ($17.64 PSF) Opportunity Outcome • Landmark Frank Gehry Designed • Worked With Adjacent
Slide 31: Case Study – Opportunistic Disposition: Best Buy
Case Study – Opportunistic Disposition Best Buy Co. Inc. National Big Box Portfolio Background • Acquirer: CPA®:14 (37%) & CPA®:15 (63%) • Initial Acquisition: 1993 • Acquisition Cost: $46M • Square Feet: 452,348 (12 stores) • Annual Rent: $4.2M ($17.64 PSF) • Remaining Lease Term: 6.5 years Opportu
Slide 32: Case Study – Opportunistic Disposition: Médica France
Case Study – Opportunistic Disposition Médica France, S.A. Nursing Homes in France Background • Acquirer: WPC (46%) & CPA®:15 (54%) • Initial Acquisition: 2002 • Acquisition Cost: $43.5M • Square Feet: 336,923 (6 nursing homes) • Annual Rent: $6.2M ($18.40 PSF) • Remaining Lease Term: 9.5 years Oppo
Slide 33: Case Study – Strategic Disposition: Shoprite Supermarkets
Case Study – Strategic Disposition Shoprite Supermarkets Hudson Valley Area of NY Background • Acquirer: CPA®:14 (44%) & CPA®:15 (66%) • Initial Acquisition: 1992, 1993 • Acquisition Cost: $20.1M • Square Feet: 196,590 (3 grocery stores) • Annual Rent: $3.3M ($16.91 PSF) • Remaining Lease Term: ~12
Slide 34: Case Study – Early Lease Extension: Dr. Pepper Snapple Group
Case Study – Early Lease Extension Dr. Pepper Snapple Group Houston & Irving, TX Background • Acquirer: WPC • Initial Acquisition: 1989 • Acquisition Price: $28.4M • Original SF: 721,947 (2 Bottling Plants) • Current Expanded SF: 1.27 MSF • Annual Rent: $5.0M ($3.52 PSF) • Remaining Lease Term: 2 ye