W. P. Carey Inc. Reit · NYSE:WPC
W. P. Carey Inc. Reit — W. P. Carey — Investor Presentation (December 2018)
27 slides from W. P. Carey Inc. Reit's investor presentation, Dec 6, 2018
Slide 1: W. P. Carey Inc. Investor Presentation 3Q18
W. P. Carey Inc. Investor Presentation 3Q18
Slide 2: Table of Contents
Table of Contents I. Overview II. Real Estate Portfolio III. Balance Sheet IV. Investment Management Unless otherwise noted, all data in this presentation is as of September 30, 2018. Amounts may not sum to totals due to rounding.
Slide 3: I. Overview
I. Overview
Slide 4: Company Highlights
Company Highlights W. P. Carey (NYSE: WPC) is a publicly-traded REIT that specializes in investing in net lease commercial real estate primarily in the U.S. and Northern and Western Europe One of the largest owners of net lease assets and among the Size top 25 REITs in the MSCI US REIT Index Highly
Slide 5: Business Model and Structure
(1) Business Model and Structure WPC is an internally-managed net lease REIT Public REIT (NYSE: WPC) ~$18 billion of Enterprise Value (2) (3) Advisor to Real Estate Portfolio (4) $7.5 billion of AUM Corporate Property Associates 18 – Global • 1,186 net lease properties / 133 million sq. ft. / 10.5 y
Slide 6: Advancements Since REIT Conversion
(1) Advancements Since REIT Conversion Acquisitions Balance Sheet & Capitalization • Completed $16 billion in investments on our • $3.7 billion of USD and Euro-denominated (3) bond balance sheet consisting of: issuance ̶ $12.9 billion through acquisition of CPA • Established $1.85 billion credit fac
Slide 7: Investment Strategy
Investment Strategy Transactions Evaluated on Four Key Factors • Generate attractive risk-adjusted returns by identifying • Industry drivers and trends and investing in net-lease commercial real estate, • Competitor analysis primarily in the U.S. and Northern & Western Europe Creditworthiness of Ten
Slide 8: Proactive Asset Management
Proactive Asset Management Domestic and international asset management capabilities to address lease expirations, changing tenant credit profiles and asset repositioning or dispositions • Asset management offices in New York and Amsterdam • W. P. Carey has proven experience repositioning assets thro
Slide 9: II. Real Estate Portfolio
WP. CAREY Il. Real Estate Portfolio
Slide 10: Large Diversified Portfolio – Pro Forma for Merger
(1) Large Diversified Portfolio – Pro Forma for Merger Number of Properties 1,186 Number of Tenants 304 133 million Square Footage ABR $1.1 billion US / Europe / Other (% of ABR) 62% / 35% / 3% Contractual Rent Escalation: CPI-linked / Fixed / Other 65% / 31% / 4% WALT 10.5 years Occupancy 98.3% 28.
Slide 11: Property and Industry Diversification – Pro Forma for Merger
(1) Property and Industry Diversification – Pro Forma for Merger By Property Type (% of ABR) Top 10 Tenants Number of ABR WALT % of 9% Properties ($ millions) (years) Total 24% 3% Industrial 24% Warehouse 20% 53 $47 18.4 4.4% Office 25% 19% (2) Retail 19% 78 36 5.6 3.3% 20% 3% Self-storage (Net Leas
Slide 12: Geographic Diversification – Pro Forma for Merger
(1) Geographic Diversification – Pro Forma for Merger W. P. Carey has been investing internationally for 20 years, primarily in Western and Northern Europe Other (2), 2.5%, $28MM Europe, 35% $381 MM United States, 62%, $669 MM (1) Portfolio information reflects pro rata ownership of real estate asse
Slide 13: Internal Growth from Contractual Rent Increases – Pro Forma for Merger
(1) Internal Growth from Contractual Rent Increases – Pro Forma for Merger Approximately 99% of leases have contractual rent increases, including 65% linked to CPI None, 0.7% (2) Other, 3% Uncapped CPI, 41% Fixed, 31% 65% CPI-linked CPI-based, 24% (1) Portfolio information reflects pro rata ownershi
Slide 14: Lease Expirations and Average Lease Term – Pro Forma for Merger
(1) Lease Expirations and Average Lease Term – Pro Forma for Merger Weighted average lease term of 10.5 years Lease Expirations (% ABR) (2) 60% 52.4% 50% 40% 30% 20% 12.4% 10% 6.9% 6.8% 4.6% 5.1% 3.5% 4.3% 2.2% 1.6% 0.1% 0% 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Thereafter (1) Portfolio i
Slide 15: Historical Occupancy
(1) Historical Occupancy Stable occupancy maintained during the credit crisis and economic downturn Occupancy (% Square Feet) 100% 99.1% 99.0% 99.8% 98.5% 97.1% 97.3% 98.4% 98.8% 99.2% 99.3% 98.3% 96.6% 80% 60% 40% 20% 0% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 (2) (1) Includes W
Slide 16: Recent Acquisitions – Case Studies
(1) Recent Acquisitions – Case Studies Completed investments totaling $692 million through the end of 3Q18 • Comprised of $617 million of on-balance-sheet acquisitions and $75 million of capital investment projects Recent Acquisitions Midwest Furniture Retailer Danske Fragtmænd Intergamma March 2018
Slide 17: Capital Investment Projects – Case Studies
(1) Capital Investment Projects – Case Studies Capital investment projects are becoming a more meaningful part of our investment activity • Completed on-balance-sheet capital investment projects totaling $75 million through the end of 3Q18 • An additional $113 million of development projects current
Slide 18: III. Balance Sheet
WP. CAREY Ill. Balance Sheet
Slide 19: Balance Sheet Overview – Pro Forma for Merger
Balance Sheet Overview – Pro Forma for Merger CPA:17 Merger Impact on Balance Sheet Capitalization ($MM) 9/30/18 (1) • Moderate and temporary increase in net debt / EBITDA with Total Equity $10,912 projected path to reduce post-transaction to below 6.0x Pro Rata Net Debt • Debt / gross assets lowere
Slide 20: Debt Maturity Schedule – Pro Forma for Merger
Debt Maturity Schedule – Pro Forma for Merger (1) Principal at Maturity (3) (3) Mortgage Debt Unsecured Revolver Unsecured Bonds (EUR) Unsecured Bonds (USD) 1,500 1,200 500 $MM 900 350 (2) 248 579 600 579 450 (4) 300 635 600 579 579 540 380 81 188 53 140 32 21 0 2018 2019 2020 2021 2022 2023 2024 20
Slide 21: Unsecured Bond Covenants – W. P. Carey Pre-Merger
(1) Unsecured Bond Covenants – W. P. Carey Pre-Merger Investment grade balance sheet with Baa2/stable rating from Moody’s and BBB/stable rating from S&P (2) Senior Unsecured Notes Metric Covenant September 30, 2018 Total Debt / Total Leverage ≤ 60% 46.0% Total Assets Secured Debt / ≤ 40% 9.4% Secure
Slide 22: History of Consistent Dividend Growth
History of Consistent Dividend Growth W. P. Carey has increased its dividend every year since going public in 1998 (1) • Current annualized dividend of $4.10 with a yield of 6.1% • Conservative and stable payout ratio since conversion to a REIT in September 2012 Dividends per Share & Payout Ratio (2
Slide 23: IV. Investment Management
WP. CAREY IV. Investment Management
Slide 24: Summary of Non-Traded Investment Programs
Summary of Non-Traded Investment Programs (1) Total AUM of $7.5 billion, including $1.5 billion of net lease AUM • Exited non-traded retail fundraising in June 2017 • Closed merger with CPA:17 in October 2018 CPA:18 CWI 1 CWI 2 CESH I Student Investment focus Diversified / Net Lease Lodging / Hospit
Slide 25: Cautionary Statement Concerning Forward-Looking Statements
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 Litigation Refor
Slide 26: Disclosures
Disclosures The following non-GAAP financial measures are used in this presentation FFO and AFFO Due to certain unique operating characteristics of real estate companies, as discussed below, the National Association of Real Estate Investment Trusts, Inc., or NAREIT, an industry trade group, has prom
Slide 27: Disclosures (cont’d)
Disclosures (cont’d) The following non-GAAP financial measures are used in this presentation (cont’d) EBITDA and Adjusted EBITDA We believe that EBITDA is a useful supplemental measure to investors and analysts for assessing the performance of our business segments because (i) it removes the impact