W. P. Carey Inc. Reit · NYSE:WPC
W. P. Carey Inc. Reit — Q3 2023 Earnings Presentation
31 slides from W. P. Carey Inc. Reit's earnings presentation, Nov 3, 2023
Slide 1: W. P. Carey Inc. Investor Presentation 3Q23
W. P. Carey Inc. Investor Presentation 3Q23 Investing for the Long Run®
Slide 2: Table of Contents
Table of Contents Overview 3 Summary of Strategic Plan to Exit Office 7 Real Estate Portfolio 13 Balance Sheet 24 ESG 28 Unless otherwise noted, all data in this presentation is as of September 30, 2023. Amounts may not sum to totals due to rounding.
Slide 3: Overview
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Slide 4: Company Highlights
Company Highlights W. P. Carey (NYSE: WPC) is a REIT that specializes in investing in single-tenant net lease commercial real estate, primarily in the U.S. and Northern and Western Europe One of the largest owners of net lease real estate and among the top 25 REITs in the MSCI US REIT Index Highly d
Slide 5: Investment Strategy
Investment Strategy • Generate attractive risk-adjusted returns by investing in net Transactions Evaluated on Four Key Factors lease commercial real estate, primarily in the U.S. and Northern and Western Europe • Industry drivers and trends • Protect downside by combining credit and real estate Cred
Slide 6: 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 7: Summary of Strategic Plan to Exit Office
Summary of Strategic Plan to Exit Office 7
Slide 8: Overview (1)
Overview (1) Strategic Plan 4 – Accelerated exit of office (the “Transaction”) by: (i) Spinning-off the majority of WPC’s office portfolio into a publicly-traded REIT, Net Lease Office Properties (NYSE: NLOP) (the “Spin-Off”) (ii) Selling office assets remaining on WPC’s balance sheet (the “Office S
Slide 9: Strategic Rationale
Strategic Rationale Clear path to monetizing WPC’s legacy office portfolio – Transaction accelerates WPC’s office exit strategy, aligning WPC’s portfolio with its investment focus on growing its core net lease portfolio Enhances WPC’s growth profile through improved cost of capital – Transaction i
Slide 10: Accelerates Existing Office Disposition Strategy
Accelerates Existing Office Disposition Strategy • WPC has reduced its office exposure from 30% of ABR in 2015 to under 16% today – the Transaction greatly accelerates that trajectory • Expect balance sheet sales to be completed by early 2024 and generate total gross sale proceeds of approximately $
Slide 11: W. P. Carey Post-Transaction Portfolio
W. P. Carey Post-Transaction Portfolio (1) Portfolio post-Transaction focused on industrial / warehouse, essential retail and net lease self-storage Gross Real Estate Book Value (2) $15.6 billion Size ABR $1.25 billion 62% Property Type (% of ABR) 14% Industrial / Warehouse Industrial 5% 34% Warehou
Slide 12: Credit Profile and Balance Sheet
Credit Profile and Balance Sheet Maintains strong and flexible investment grade balance with strengthened credit profile Pro Forma Transaction Capitalization ($MM) (2) 9/30/23 Total Equity (3) $11,569 • W. P. Carey to remain the largest diversified net lease REIT and a top 25 REIT in the MSCI US REI
Slide 13: Real Estate Portfolio
Real Estate Portfolio 13
Slide 14: Large Diversified Portfolio
Large Diversified Portfolio (1) Number of Properties 1,472 Number of Tenants 395 Square Footage 179.2 million ABR $1.46 billion Net-Lease Portfolio North America / Europe / Other (% of ABR) 66% / 33% / 1% Contractual Rent Escalation: CPI-linked / Fixed / Other (2) 52% / 44% / 4% WALT 11.0 years Occu
Slide 15: Top Ten Net Lease Tenants
Top Ten Net Lease Tenants (1) One of the lowest Top 10 concentrations among the net lease peer group Number of ABR WALT % of Tenant Description Properties ($ millions) (years) Total Net lease self-storage properties in the U.S. (2) 78 $39 0.5 2.6% Pharmaceutical R&D and advanced manufacturing proper
Slide 16: Property and Industry Diversification
Property and Industry Diversification (1) Property Type Diversification (% of ABR) Tenant Industry Diversification (% of ABR) 11% 52% 15% Industrial / Warehouse 20% 4% 29% 2% 3% 3% 16% 3% 9% 3% 3% 8% 4% 4% 17% 23% 7% 4% 6% 6% Industrial 29% Retail Stores (2) 20% Business Services 4% Warehouse 23% Co
Slide 17: Geographic Diversification
Geographic Diversification (1) W. P. Carey has been investing internationally for approximately 25 years, primarily in Northern and Western Europe Other (4), 1% $8MM Through our financing and hedging strategies, Europe, 33% we’ve significantly mitigated currency risk $483MM through a combination of
Slide 18: Internal Growth from Contractual Rent Increases
Internal Growth from Contractual Rent Increases (1) Over 99% of ABR comes from leases with contractual rent increases, including 52% linked to CPI None Other (2) 1% 3% Uncapped CPI 36% Fixed 44% CPI-linked 52% Capped CPI 16% 1. Portfolio information reflects pro rata ownership of real estate assets
Slide 19: Same Store ABR Growth
Same Store ABR Growth Contractual same store growth of 4.2% (1) 4.5% 4.3% 4.3% 4.2% 4.0% 3.5% 3.4% 3.4% 3.0% 3.0% 2.7% 2.5% 2.0% 1.8% 1.6% 1.6% 1.5% 1.5% 1.5% 1.0% 0.5% 0.0% 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 1. Contractual same store portfolio includes leases that were cont
Slide 20: Lease Expirations and Average Lease Term
Lease Expirations and Average Lease Term (1) Weighted-average lease term of 11.0 years Lease Expirations (% ABR) (2) 50.0% 50% 40% 30% 20% 10% 6.1% 5.7% 5.5% 4.6% 4.9% 4.8% 4.8% 5.0% 4.4% 3.2% 1.0% 0% (3) 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 Thereafter 1. Portfolio information refl
Slide 21: Historical Occupancy
Historical Occupancy (1) Stable occupancy maintained during the aftermath of the global financial crisis and throughout the COVID-19 pandemic Occupancy (% Square Feet) (2) 100% 98.4% 98.8% 99.0% 99.2% 99.3% 99.8% 98.3% 98.9% 98.5% 98.5% 98.8% 98.9% 96.6% 97.3% 80% 60% 40% 20% 0% 2010 2011 2012 2013
Slide 22: Recent Acquisitions – Case Studies
Recent Acquisitions – Case Studies Recent investment activity has been focused primarily on mission critical industrial and warehouse properties and essential retail Recent Acquisitions Coop Apotex ABC February - November 2022 (30 properties) April 2023 (11 properties) April 2023 (9 properties) Purc
Slide 23: Capital Investments – Case Studies
Capital Investments – Case Studies Capital investments have become a more meaningful part of our investment activity and allow us to pursue follow-on opportunities with existing tenants Recent Capital Investments Upfield Group Berry Plastics Unchained Labs Completed July 2022 Completed March 2023 Co
Slide 24: Balance Sheet
Balance Sheet 24
Slide 25: Balance Sheet Overview
Balance Sheet Overview Capitalization ($MM) (1) 9/30/23 Capitalization (%) Total Equity (2) $11,569 4% 8% Pro Rata Net Debt Equity (2) Senior Unsecured Notes USD 2,900 Senior Unsecured Notes EUR 3,046 Senior Unsecured Notes 58% Mortgage Debt, pro rata USD 557 Unsecured Revolving Credit Facility / Mo
Slide 26: Debt Maturity Schedule
Debt Maturity Schedule Principal at Maturity (1) Mortgage Unsecured Unsecured Unsecured Unsecured 2,200 Debt (2) Bonds (EUR) Bonds (USD) Term Loans Revolving Credit Facility (3) 2,000 1,800 517 1,600 1,400 1,200 530 $MM 559 1,000 500 800 350 21 600 450 2 530 400 350 530 530 325 530 556 500 200 364 4
Slide 27: Unsecured Bond Covenants
Unsecured Bond Covenants (1) Investment grade balance sheet with recent upgrades to Baa1 (stable) from Moody’s and BBB+ (stable) from S&P Senior Unsecured Notes (2) Metric Covenant September 30, 2023 Total Debt / Total Leverage Total Assets ≤ 60% 40.0% Secured Debt / Secured Debt Leverage Total Asse
Slide 28: ESG
ESG WP. CAREY 28
Slide 29: ESG Strategy
ESG Strategy • As we celebrate our 50th anniversary, we remain committed to our founder’s dedication to Investing for the Long Run® and Doing Good While Doing Well® and his ongoing commitment to making a positive difference within our business, local communities and beyond • Our cross-functional ESG
Slide 30: 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 (as amended, the “Securities Act”) and the Securities Exchange Act of 1934 (as amended, the “Exchan
Slide 31: Disclosures
Disclosures The following non-GAAP financial measures are used in this presentation 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 of our capital str
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