0001025378wpc:IndustrialFacilityinMcCallaALMemberwpc:RealEstateSubjectToOperatingLeaseMember2021-12-31IndustrialFacilitiesInHamptonNHMemberwpc:RealEstateSubjectToOperatingLeaseMember2023-01-012023-12-31
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 20212023
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from__________ to __________
Commission File Number: 001-13779
W. P. Carey Inc.
(Exact name of registrant as specified in its charter)
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| Maryland | 45-4549771 |
| (State of incorporation) | (I.R.S. Employer Identification No.) |
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| One Manhattan West, 395 9th Avenue, 58th Floor | |
| New York, | New York | 10001 |
| (Address of principal executive offices) | (Zip Code) |
Investor Relations (212) 492-8920
(212) 492-1100
(Registrant’s telephone numbers, including area code)
Securities registered pursuant to Section 12(b) of the Act:
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| Title of each class | | Trading Symbol(s) | | Name of exchange on which registered |
| Common Stock, $0.001 Par Value | | WPC | | New York Stock Exchange |
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☑ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☑
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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| Large accelerated filer | ☑ | Accelerated filer | ☐ | Non-accelerated filer | ☐ |
| | | | | |
| Smaller reporting company | ☐ | Emerging growth company | ☐ | | |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☑
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☑
State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of last business day of the registrant’s most recently completed second fiscal quarter: $13.7$14.4 billion.
As of February 4, 2022,2, 2024, there were 190,607,438218,672,432 shares of Common Stock of registrant outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
The registrant incorporates by reference its definitive Proxy Statement with respect to its 20222024 Annual Meeting of Stockholders, to be filed with the Securities and Exchange Commission within 120 days following the end of its fiscal year, into Part III of this Annual Report on Form 10-K.
INDEX
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| | | Page No. |
| PART I | | |
| Item 1. | | |
| Item 1A. | | |
| Item 1B. | | |
| Item 1C. | | |
| Item 2. | | |
| Item 3. | | |
| Item 4. | | |
| PART II | | |
| Item 5. | | |
| Item 6. | | |
| Item 7. | | |
| Item 7A. | | |
| Item 8. | | |
| Item 9. | | |
| Item 9A. | | |
| Item 9B. | | |
| Item 9C. | | |
| PART III | | |
| Item 10. | | |
| Item 11. | | |
| Item 12. | | |
| Item 13. | | |
| Item 14. | | |
| PART IV | | |
| Item 15. | | |
| Item 16. | | |
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| W. P. Carey 20212023 10-K – 1 |
Forward-Looking Statements
This Annual Report on Form 10-K (the “Report”), including Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 7 of Part II of this Report, contains forward-looking statements within the meaning of the federal securities laws. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. These forward-looking statements include, but are not limited to statements regarding: our corporate strategy and estimated or future economic performance and results, including the general economic outlook andNLOP Spin-Off (as defined herein); our expectations surrounding the continued impact of the novel coronavirus (“COVID-19”) pandemic onbroader macroeconomic environment and the ability of tenants to pay rent; our business, financial condition, liquidity, results of operations, and prospects; underlying assumptions about our portfolio, including tenant rent collections and bankruptcies, as well as the estimated fair value of our investments and properties; the amount and timing of any future dividends; our future capital expenditure and leverage levels, debt service obligations, and any plans to fund our future liquidity needs; prospective statements regarding our access to the capital markets, including related to our credit ratings, ability to sell shares under our “at-the-market” program (“ATM Program”), and settlement of our Equity Forwards (as defined herein); the outlook for the investment programs that we manage, including possible liquidity events for those programs; statements that we make regarding our ability to remain qualified for taxation as a real estate investment trust (“REIT”); and the impact of recently issued accounting pronouncements and other regulatory activity.
These statements are based on the current expectations of our management. It is important to note that our actual results could be materially different from those projected in such forward-looking statements. There are a number of risks and uncertainties that could cause actual results to differ materially from these forward-looking statements. Other unknown or unpredictable risks or uncertainties, like the risks related to fluctuating interest rates, the impact of inflation on our tenants and us, the effects of pandemics and global outbreaks of contagious diseases, (suchand domestic or geopolitical crises, such as the current COVID-19 pandemic)terrorism, military conflict, war or the fear of such outbreaks,perception that hostilities may be imminent, political instability or civil unrest, or other conflict, could also have material adverse effects on our business, financial condition, liquidity, results of operations, and prospects. You should exercise caution in relying on forward-looking statements as they involve known and unknown risks, uncertainties, and other factors that may materially affect our future results, performance, achievements, or transactions. Information on factors that could impact actual results and cause them to differ from what is anticipated in the forward-looking statements contained herein is included in this Report, as well as in our other filings with the Securities and Exchange Commission (“SEC”), including but not limited to those described in Item 1A. Risk Factors and Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of this Report. Moreover, because we operate in a very competitive and rapidly changing environment, new risks are likely to emerge from time to time. Given these risks and uncertainties, potential investors are cautioned not to place undue reliance on these forward-looking statements as a prediction of future results, which speak only as of the date of this presentation, unless noted otherwise. Except as required by federal securities laws and the rules and regulations of the SEC, we do not undertake to revise or update any forward-looking statements.
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| W. P. Carey 20212023 10-K – 2 |
PART I
Item 1. Business.
General Development of Business
W. P. Carey Inc. (“W. P. Carey”), is an internally-managed diversified REIT that, together with our consolidated subsidiaries and predecessors, is an internally-managed diversified REIT and a leading owner of commercial real estate, net-leased to companies located primarily in the United States and Northern and Western Europe on a long-term basis. The vast majority of our revenues originate from lease revenue provided by our real estate portfolio, which is comprised primarily of single-tenant industrial, warehouse, office, retail, and self-storage facilities that are critical to our tenants’ operations. Our portfolio is comprised of 1,3041,424 properties, net-leased to 352336 tenants in 2426 countries. As of December 31, 2021,2023, approximately 63%58% of our contractual minimum annualized base rent (“ABR”) was generated by properties located in the United States and approximately 35%37% was generated by properties located in Europe. As of that same date, our portfolio included 2096 operating properties, comprised of 1989 self-storage properties, five hotels, and one hotel.
We also earn fees and other income by managing the portfolios of two remaining non-traded investment programs through our investment management business. We no longer sponsor new investment programs.student housing properties.
In September 2023, we announced a plan to exit the office assets within our portfolio by (i) spinning-off 59 office properties into Net Lease Office Properties, a Maryland real estate investment trust (“NLOP”), so that it became a separate publicly-traded REIT (the “Spin-Off”), and (ii) implementing an asset sale program to dispose of 87 office properties retained by us (the “Office Sale Program”), which is targeted to be completed in the first half of 2024. Seventy-nine of the 87 office properties have been sold as of the date of this Report, for gross proceeds of approximately $608.1 million (Note 19).
On November 1, 2023, we completed the Spin-Off, contributing 59 office properties to NLOP (Note 3). Following the closing of the Spin-Off, NLOP operates as a separate publicly-traded REIT, which we externally manage pursuant to certain advisory agreements (the “NLOP Advisory Agreements”).
On August 1, 2022, one of our former investment programs, Corporate Property Associates 18 – Global Incorporated (“CPA:18 – Global”), merged with and into one of our indirect subsidiaries (the “CPA:18 Merger”), which added approximately $2.2 billion of real estate assets to our portfolio (Note 4).
Narrative Description of Business
Business Objectives and Strategy
Our primary business objective is to invest in a diversified portfolio of high-quality, mission-critical assets subject to long-term net leases with built-in rent escalators for the purpose of generating stable cash flows, enabling us to grow our dividend and increase long-term stockholder value.
Our investment strategy primarily focuses on owning and actively managing a diverse portfolio of commercial real estate that is net-leased to credit-worthy companies. We review and evaluate the fundamental value of the underlying real estate. We believe that many companies prefer to lease rather than own their corporate real estate because it allows them to deploy their capital more effectively into their core competencies. We specialize in sale-leaseback transactions, where we acquire a company’s critical real estate and then lease it back to them on a long-term, triple-net basis, which requires them to pay substantially all of the costs associated with operating and maintaining the property (such as real estate taxes, insurance, and facility maintenance). Compared to other types of real estate investments, sale-leaseback transactions typically produce a more predictable income stream and require minimal capital expenditures, which in turn generate revenues that provide our stockholders with a stable, growing source of income.
We believe that diversification across property type, tenant, tenant industry, and geographic location, as well as diversification of our lease expirations and scheduled rent increases, are vital aspects of portfolio risk management and accordingly have constructed a portfolio of real estate that we believe is well-diversified across each of these categories. We capitalize on our large portfolio and existing tenant relationships through accretive expansions, renovations, and follow-on deals. We actively
manage our real estate portfolio to monitor tenant credit quality and lease renewal risks. We also maintain ample liquidity, a conservative capital structure, and access to multiple forms of capital.
Our business operates in two segments: Real Estate and Investment Management, as described herein and in Note 1. Our Real Estate segment generates the vast majority of our earnings through the lease revenues we earn from our real estate investments. Through our Investment Management segment, we earnWe have historically earned asset management fees and other compensation from the management of $2.7 billion of assetsnon-traded real estate investment programs through our Investment Management segment. Following the close of the following entities: (i) Corporate Property Associates CPA:18 Merger, our advisory agreements with CPA:18 – Global Incorporated (“were terminated (Note 4). As used herein, “Managed Programs” refers to CPA:18 – Global”)Global (through August 1, 2022) and (ii) Carey European Student Housing Fund I, L.P. (“CESH”). On April 13, 2020, two of our former investment programs, Carey Watermark Investors Incorporated (“CWI 1”) and Carey Watermark Investors 2 Incorporated (“CWI 2”) (together, the “CWI REITs”), merged in an all-stock transaction (the “CWI 1 and CWI 2 Merger”). Following the close of the
CWI 1 and CWI 2 Merger, our advisory agreements with CWI 1 and CWI 2 were terminated and CWI 2 was renamed Watermark Lodging Trust, Inc. (“WLT”) (Note 3). As used herein, “Managed REITs” refers to CPA:18 – Global and the CWI REITs (through April 13, 2020). We refer to the Managed REITs and CESH as the “Managed Programs.” We continue to act as the advisor to the two remaining Managed ProgramsCESH and currently expect to do so through the end of their respectiveits life cyclescycle. We also act as the advisor to NLOP pursuant to the NLOP Advisory Agreements (Note 35).
We intend to operate our business in a manner that is consistent with the maintenance of our status as a REIT for federal income tax purposes. In addition, we expect to manage our investments in order to maintain our exemption from registration as an investment company under the Investment Company Act of 1940, as amended.
Investment Strategies
When considering potential net-lease investments for our real estate portfolio, we review various aspects of a transaction to determine whether the investment and lease structure will satisfy our investment criteria. We generally analyze the following main aspects of each transaction:
Tenant/Borrower Evaluation — We evaluate each potential tenant or borrower for creditworthiness, typically considering factors such as management experience, industry position and fundamentals, operating history, and capital structure. We also rate each asset based on its market, liquidity, and criticality to the tenant’s operations, as well as other factors that may be unique to a particular investment. We seek opportunities where we believe the tenant may have a stable or improving credit profile or credit potential that has not been fully recognized by the market. We define creditworthiness as a risk-reward relationship appropriate to our investment strategies, which may or may not coincide with ratings issued by the credit rating agencies. We have a robust internal credit rating system and may designate subsidiaries of non-guarantor parent companies with investment grade ratings as “implied investment grade.”
Properties Critical to Tenant/Borrower Operations — We generally focus on properties and facilities that we believe are critical to the ongoing operations of the tenant. We believe that these properties generally provide better protection, particularly in the event of a bankruptcy, since a tenant/borrower is less likely to risk the loss of a critically important lease or property in a bankruptcy proceeding or otherwise.
Diversification — We attempt to diversify our portfolio to avoid undue dependence on any one particular tenant, borrower, collateral type, geographic location, or industry. By diversifying our portfolio, we seek to reduce the adverse effect of a single underperforming investment or a downturn in any particular industry or geographic region. While we do not set any fixed diversity metrics in our portfolio, we believe that it is well-diversified.
Lease Terms — Generally, the net-leased properties we invest in are leased on a full-recourse basis to the tenants or their affiliates. In addition, the vast majority of our leases provide for scheduled rent increases over the term of the lease (see Our Portfolio below). These rent increases are either fixed (i.e., mandated on specific dates) or tied to increases in inflation indices (e.g., the Consumer Price Index (“CPI”) or similar indices in the jurisdiction where the property is located), but may contain caps or other limitations, either on an annual or overall basis. In the case of retail stores and hotels, the lease may provide for participation in the gross revenues of the tenant above a stated level, which we refer to as percentage rent.
Real Estate Evaluation — We review and evaluate the physical condition of the property and the market in which it is located. We consider a variety of factors, including current market rents, replacement cost, residual valuation, property operating history, demographic characteristics of the location and accessibility, competitive properties, and suitability for re-leasing. We obtain third-party environmental and engineering reports and market studies when required. When considering an investment outside the United States, we will also consider factors particular to a country or region, including geopolitical risk, in addition to the risks normally associated with real property investments. See Item 1A. Risk Factors.
Transaction Provisions to Enhance and Protect Value — When negotiating leases with potential tenants, we attempt to include provisions that we believe help to protect the investment from material changes in the tenant’s operating and financial characteristics, which may affect the tenant’s ability to satisfy its obligations to us or reduce the value of the investment. Such provisions include covenants requiring our consent for certain activities, requiring indemnification protections and/or security deposits, and requiring the tenant to satisfy specific operating tests. We may also seek to enhance the likelihood that a tenant will satisfy their lease obligations through a letter of credit or guaranty from the tenant’s parent or other entity. Such credit enhancements, if obtained, provide us with additional financial security. However, in markets where competition for net-lease transactions is strong, some or all of these lease provisions may be difficult to obtain.
Competition — We face active competition from many sources, both domestically and internationally, for net-lease investment opportunities in commercial properties. In general, we believe that our management’s experience in real estate, credit underwriting, and transaction structuring will allow us to compete effectively for commercial properties. However, competitors may be willing to accept rates of return, lease terms, other transaction terms, or levels of risk that we find unacceptable.
Asset Management
We believe that proactive asset management is essential to maintaining and enhancing property values. Important aspects of asset management include entering into new or modified transactions to meet the evolving needs of current tenants, re-leasing properties, credit and real estate risk analysis, building expansions and redevelopments, repositioning assets, sustainability and efficiency analysis and retrofits, and strategic dispositions. We regularly engage directly with our tenants and form long-term working relationships with their decision makers in order to provide proactive solutions and to obtain an in-depth, real-time understanding of tenant credit.
We monitor compliance by tenants with their lease obligations and other factors that could affect the financial performance of our real estate investments on an ongoing basis, which typically involves ensuring that each tenant has paid real estate taxes and other expenses relating to the properties it occupies and is maintaining appropriate insurance coverage. To ensure such compliance at our properties, we often engage the expertise of third parties to complete property inspections. We also review tenant financial statements and undertake regular physical inspections of the properties to verify their condition and maintenance. Additionally, we periodically analyze each tenant’s financial condition, the industry in which each tenant operates, and each tenant’s relative strength in its industry. The in-depth understanding of our tenants’ businesses and direct relationships with their management teams provides strong visibility into potential issues as well as additional investment opportunities. Our business intelligence platform provides real-time surveillance and early warning, allowing asset managers to work with tenants to enforce lease provisions, and where appropriate, consider lease modifications. Our proactive asset management philosophy has proven particularly applicable during the COVID-19 pandemic.
Financing Strategies
We believe in maintaining ample liquidity, a conservative capital structure, and access to multiple forms of capital. We preserve balance sheet flexibility and liquidity by maintaining significant capacity on our $1.8$2.0 billion unsecured revolving credit facility (the “Unsecured Revolving Credit Facility”), as well as any amounts available to us under our term loanloans (“Unsecured Term Loan”) and delayed draw term loan (“Delayed Draw Term Loan”Loans”), which, together with our Unsecured Revolving Credit Facility, we refer to collectively as our “Senior Unsecured Credit Facility.” We generally use the Unsecured Revolving Credit Facility to fund our immediate capital needs, including new acquisitions and the repayment of secured mortgage debt as we continue to unencumber assets. We seek to replace short-term financing with more permanent forms of capital, including, but not limited to, common stock, unsecured debt securities, bank debt, and proceeds from asset sales. When evaluating which form of capital to pursue, we take into consideration multiple factors, including our corporate leverage levels and targets, and the most attractive source of capital available to us. We may choose to issue unsecured debt securities and bank debt denominated in foreign currencies in part to fund international acquisitions, unencumber assets, and mitigate our exposure to fluctuations in exchange rates. We strive to maintain an investment grade rating, which places limitations on the amount of leverage acceptable in our capital structure. Although we expect to continue to have access to a wide variety of capital sources and maintain our investment grade rating, there can be no assurance that we will be able to do so in the future.
Our Portfolio
At December 31, 2021,2023, our portfolio had the following characteristics:
•Number of properties — full or partial ownership interests in 1,3041,424 net-leased properties, 1989 self-storage properties, five hotels, and one hotel;two student housing properties;
•Total net-leased square footage — approximately 156173 million; and
•Occupancy rate — approximately 98.5%98.1%.
Tenant/Lease Information
At December 31, 2021,2023, our tenants/leases had the following characteristics:
•Number of tenants — 352;336;
•Investment grade tenants as a percentage of total ABR — 22%18%;
•Implied investment grade tenants as a percentage of total ABR — 8%6%;
•Weighted-average lease term — 10.811.7 years;
•99.4%99.6% of our leases as a percentage of total ABR provide rent adjustments as follows:
◦CPI and similar — 58.7%56.2%
◦Fixed — 36.9%40.7%
◦Other — 3.8%2.7%
Human Capital
Investing in Our Employees
At December 31, 2021,2023, we had 183197 employees, 129144 of which were located in the United States and 5453 of which were located in Europe. We strive to make W. P. Carey a great place to work by attracting a diverse pool of the best and brightest applicants and making them feel supported and included as they progress and grow with the company. We offer various levels of training, including management training, executive training, skills training, and “Respect in the Workplace”Workplace,” skills training, in addition to our “Conversations at Carey” educational program.Diversity, Equity & Inclusion, and executive coaching, as well as additional training including safety and cybersecurity. By engaging with our employees and investing in their careers through training and development, we have built a talented workforce capable of executing our business strategies.
Diversity
We believe that our success is dependent upon the diverse backgrounds and perspectives of our employees and directors. W. P. Carey is an equal opportunity employer and considers qualified applicants regardless of race, color, religion, sexual orientation, gender, gender identity or expression, national origin, age, disability, military or veteran status, genetic information, or other statuses protected by applicable federal, state, and local law. In 2020, we launched ourOur diversity, equity and inclusion initiative which is designed to facilitate conversations around race, sexual orientation and gender identity, national origin, creeds, and other important topics. These conversations, led by our Diversity, Equity & Inclusion Advisory Committee, provide a forum for us to translate our positions as a company into action in both our internal and external communities. We are also signatory to the CEO Action Pledge for Diversity & Inclusion, which reflects our commitment to fostering a more diverse and inclusive workforce.
Employee Wellness and Benefits
The health and wellness of our employees and their families are paramount and our comprehensive benefits package is designed to address the changingevolving needs of employeesour diverse workforce and their dependents. Our benefits package is evaluated on an annual basis. In addition to robust health and wellness benefits, we also provide our employees with competitive compensation programs, with a focus on both current compensation and retirement planning for their future.
To enhance transparency and maintain a sense of community during the COVID-19 pandemic, we have communicated frequently through town halls, virtual seminars, and emails. We also reinforced the availability of our corporate benefits, including telemedicine and confidential counseling, and provided additional resources for managing stress, anxiety, and isolation.
Additional information regarding our human capital programs and initiatives is available in our annual Proxy Statement and Environmental, Social, and Governance (“ESG”) Report, which can be found on our company website. Information on our website, including our ESG Report, is not incorporated by reference into this Report.
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| W. P. Carey 20212023 10-K – 6 |
Available Information
We will supply to any stockholder, upon written request and without charge, a copy of this Report as filed with the SEC. Our filings can also be obtained for free on the SEC’s website at http://www.sec.gov. All filings we make with the SEC, including this Report, our quarterly reports on Form 10-Q, and our current reports on Form 8-K, as well as any amendments to those reports, are available for free on the Investor Relations portion of our website (http://www.wpcarey.com), as soon as reasonably practicable after they are filed with or furnished to the SEC.
Our quarterly earnings conference call and investor presentations are accessible by the public. We generally announce via press release the dates and conference call details for upcoming scheduled quarterly earnings announcements and webcast investor presentations, which are also available in the Investor Relations section of our website approximately ten days prior to the event.
Our Code of Business Conduct and Ethics, which applies to all employees, including our chief executive officer and chief financial officer, is also available on our website. We intend to make available on our website any future amendments or waivers to our Code of Business Conduct and Ethics within four business days after any such amendments or waivers. We are providing our website address solely for the information of investors and do not intend for it to be an active link. We do not intend to incorporate the information contained on our website into this Report or other documents filed with or furnished to the SEC.
Item 1A. Risk Factors.
Our business, results of operations, financial condition, and ability to pay dividends could be materially adversely affected by various risks and uncertainties, including those enumerated below, which could cause such results to differ materially from those in any forward-looking statements. You should not consider this list exhaustive. New risk factors emerge periodically and we cannot assure you that the factors described below list all risks that may become material to us at any later time.
Risks Related to Our Portfolio and Ownership of Real Estate
We face an increasingly competitive marketplace for investments.
The net lease financing market is perceived as a relatively conservative investment vehicle and there has been increasing capital inflows into our sector; accordingly, we face escalating competition for investments, both domestically and internationally. We compete for investments with many other financial institutions and investors, including other REITs, private equity firms, pension funds, and financereal estate companies. Operating in a competitive marketplace for investments could have a negative impact on our revenue growth. Our competitors may accept greater risk, or lower returns, or a combination thereof allowing them to offer more attractive terms when pursuing investment opportunities. Access to prospective tenants. Further capital inflows intoand the cost of that capital could further impact the returns we generate from investments relative to our sector will place additional pressure oncompetitors and impair our ability to execute transactionsinvest accretively. For example, high interest rates and the returns that we can generate from investments. In particular, private equity real estate investors have raised record amounts of capital in recent periods, which is expected to be deployed into acquisitions that are contributing to an increasingly competitive marketplace.
In addition, expectations of rising interest ratescosts may increase our cost of capital whilerelative to our competitors and place additional pressure on investment spreads if capitalization rates (which generally respond to higher interest rates on a lag) could remain lowconstant or continue to decline, thereby placing additional pressure on investment spreads throughout the net lease sector. Finally, the vast majority of our current investments aredecline.
Our portfolio is concentrated in single-tenant commercial properties that are subject to triple-net leases. Many factors, including changes in tax laws or accounting rules, may make these types of sale-leaseback transactions less attractive to potential sellersindustrial, warehouse and lessees, which could negatively affect our ability to increase these types of investments.retail properties.
We are not required to meet any diversification standards; therefore, our investments may become subject to concentration risks.
Subject to our intention to maintain our qualification as a REIT, we are not required to meet anyproperty-type, tenant or geographic diversification standards. Therefore, our investments may become concentrated inby type, tenant or geographic location, which could subject us to significant risks (e.g., COVID-19 has negatively impacted certain sectors more harshly than others) with potentially adverse effects on our investment objectives.
We may incur substantial impairment charges.
We may incur substantial impairment charges, For example, following the Spin-Off of 59 of our office assets which could adversely affectclosed in November 2023, and the sale of a significant portion of our resultsremaining office portfolio through our Office Sale Program, almost 80% of operations or limit our ability to disposeABR as of assets at attractive pricesDecember 31, 2023 is concentrated in industrial/warehouse and may reduce the availability of buyer financing. By their nature, the timing or extent of impairment charges are not predictable.retail assets.
Because we invest in properties located outside the United States, we are exposed to additional risks.
We have invested, and may continue to invest, in properties located outside the United States. At December 31, 2021,2023, our real estate properties located outside of the United States represented 37%42% of our ABR. These investments may be affected by factors particular to the local jurisdiction where the property is located and may expose us to additional risks, including:
•enactment of laws relating to foreign ownership of property (including expropriation of investments), or laws and regulations relating to our ability to repatriate invested capital, profits, or cash and cash equivalents back to the United States;
•legal systems where the ability to enforce contractual rights and remedies may be more limited than under U.S. law;
•difficulty in complying with conflicting obligations in various jurisdictions and the burden of observing a variety of evolving foreign laws, regulations, and governmental rules and policies, which may be more stringent than U.S. laws and regulations (including land use, zoning, environmental, financial, and privacy laws and regulations, such as the European Union’s General Data Protection Regulation);
•tax requirements vary by country and existing foreign tax laws and interpretations may change (e.g., the on-going implementation of the European Union’s Anti-Tax Avoidance Directives)Directives and the new global minimum tax (“Pillar Two”)), which may result in additional taxes on our international investments;investments or additional taxes as a result of Pillar Two;
•changes in operating expenses in particular countries or regions;
•increased energy and commodity prices in Europe;
•foreign exchange rates; and
•geopolitical and military conflict risk and adverse market conditions caused by changes in national or regional economic or political conditions, including the ongoing conflict between Russia and Ukraine, rising tensions between China and Taiwan and the conflict in the Middle East (which may impact relative interest rates, and the terms or availability of mortgage funds)debt financing, customers’ ability and willingness to renew agreements, make payments, and enter into new agreements, and energy costs).
The failure of our compliance and internal control systems to properly mitigate such additional risks, or of our operating infrastructure to support such international investments, could result in operational failures, regulatory fines, or other governmental sanctions. We may engage third-party asset managers in international jurisdictions to monitor compliance with legal requirements and lending agreements. Failure to comply with applicable requirements may expose us, our operating subsidiaries, or the entities we manage to additional liabilities. Our operations in the United Kingdom, the European Economic Area, and other countries are subject to significant compliance, disclosure, and other obligations.
In addition, the lack of publicly available information in certain jurisdictions could impair our ability to analyze transactions and may cause us to forego an investment opportunity. It may also impair our ability to receive timely and accurate financial information from tenants necessary to meet reporting obligations to financial institutions or governmental and regulatory agencies. Certain of these risks may be greater in less developed countries. Further, our expertise to date is primarily in the United States and certain countries in Europe. We have less experience in other international markets and may not be as familiar with the potential risks to investments in these areas, which could cause us and the entities we manage to incur losses.
We are also subject to potential fluctuations in exchange rates between foreign currencies and the U.S. dollar because we translate revenue denominated in foreign currency into U.S. dollars for our financial statements (our principal exposure is to the euro). Our results of our foreign operations are adversely affected by a stronger U.S. dollar relative to foreign currencies (i.e., absent other considerations, a stronger U.S. dollar will reduce both our revenues and our expenses).
Inflation and high interest rates may adversely affect our financial condition and results of operations.
Since 2021, inflation and interest rates have been elevated compared to recent years. Inflation and high interest rates could have an adverse impact on our financial condition. Our leases typically require tenants to pay all property operating expenses and increases in those property-level expenses at our leased properties generally do not affect us. However, increased operating expenses at properties not subject to full triple-net leases could cause us to incur additional operating expenses. Inflation could also impact other costs incurred by the company including general and administrative costs and foreign income taxes. While the vast majority of leases contain rent escalators, including inflation-linked rent escalators, these costs could increase at a rate higher than our rental and other revenue.
High interest rates could also increase the cost of our existing variable-rate debt, new debt obligations entered into in the future and potentially impair our ability to arrange third-party financing, including refinancing maturing debt in part or in full as it comes due. If we are unable to find alternative credit arrangements or other funding in a high interest environment, our business needs may not be adequately met. Certain financial covenants could also be affected as a result of higher operating and debt service costs, which may place restrictions on our liquidity. In the event an increase in our costs is not sufficiently offset by contractual rent increases or increases in other revenue, we may be required to implement measures to conserve cash or preserve liquidity.
Furthermore, tenants and potential tenants of our properties may also be adversely impacted by inflation and high interest rates, which could negatively impact our tenants’ ability to pay rent and the demand for our properties.
A significant amount of our leases will expire within the next five years and we may have difficulty re-leasing or selling our properties if tenants do not renew their leases.
Within the next five years, approximately 24%Approximately 21% of our leases, based on our ABR as of December 31, 2021,2023, are due to expire.expire within the next five years. If these leases are not renewed or if the properties cannot be re-leased on terms that yield comparable payments, our lease revenues could be substantially adversely affected. In addition, when attempting to re-lease such properties, we may incur significant costs and the terms of any new or renewed leases will depend on prevailing market conditions at that time. We may also seek to sell such properties and incur losses due to prevailing market conditions. Some of our properties are designed for the particular needs of a tenant; thus, we may be required to renovate or make rent concessions in order to lease the property to another tenant. If we need to sell such properties, we may have difficulty selling it to a third party due to the property’s unique design. Real estate investments are generally less liquid than many other financial assets, which may limit our ability to quickly
adjust our portfolio in response to changes in economic or other conditions. These and other limitations may adversely affect returns to our stockholders.
Certain of our leases permit tenants to purchase a property at a predetermined price, which could limit our realization of any appreciation or result in a loss.
Under our existing leases, certain tenants have a right to repurchase the properties they lease from us. The purchase price may be a fixed price or it may be based on a formula or the market value at the time of exercise. If a tenant exercises its right to purchase the property and the property’s market value has increased beyond that price, we would not be able to fully realize the appreciation on that property. Additionally, if the price at which the tenant can purchase the property is less than our carrying value (e.g., where the purchase price is based on an appraised value), we may incur a loss. In addition, we may also be unable to reinvest proceeds from these dispositions in investments with similar or better investment returns.
Our ability to control the management of our net-leased properties is limited, which limits our ability to manage property deterioration risks and could impact our ESG ratings and our ability to make ESG disclosures.
The lack of direct control over our net-leased properties due to the fact that tenants or managers of net-leased properties are responsible for maintenance and other day-to-day management of the properties. If a property is not adequately maintained in accordance with the terms of the applicable lease, we may incur expenses for deferred maintenance expenditures or other liabilities once the property becomes free of the lease. While our leases generally provide for recourse against the tenant in these instances, a bankrupt or financially troubled tenant may be more likely to defer maintenance and it may be more difficult to enforce remedies against such a tenant. Although we endeavor to monitor compliance by tenants with their lease obligations and other factors that could affect the financial performance of our properties on an ongoing basis, we may not always be able to ascertain or forestall deterioration in the condition of a property or the financial circumstances of a tenant.
This lack of control over our net-leased properties also makes it difficult for us to collect property-level environmental metrics and to enforce sustainability initiatives, which may impact our ability to comply with certain ESG disclosure requirements (such as the SEC’s expected new ESG disclosure rules) or engage effectively with established ESG frameworks and standards, such as the Global Real Estate Sustainability Benchmarks, the Task Force for Climate-Related Financial Disclosures and the Sustainability Accounting Standards Board. If we are unable to successfully collect the data necessary to comply with ESG disclosure requirements, we may be subject to increased regulatory risk; and if such data is incomplete or unfavorable, our relationship with our investor base, our stock price, our ESG ratings and our access to capital may be negatively impacted.
The value of our real estate is subjectWe may be materially adversely affected by laws, regulations or other issues related to fluctuation.climate change as well as by potential physical impacts related to climate change.
We are subject to alllaws and regulations related to climate change. For example, the SEC has proposed climate change rules which are expected to be approved in 2024 and, as proposed, would require us to provide extensive information including greenhouse gas emissions and certain climate-related financial metrics in our audited financial statements. The State of California has also enacted new climate change disclosure requirements, including emissions requirements. In addition, the general risks associated with the ownership of real estate, which include:European Union Corporate Sustainability Reporting Directive (“CSRD”) became effective in 2023 and requires expansive disclosures on various sustainability topics.
•adverse changesWe are currently assessing our obligations under these laws and regulations but we expect that compliance with these laws and regulations could result in general or local economic conditions,substantial compliance costs, retrofit costs and construction costs, including changes in interest rates or foreign exchange rates;
•changes in the supply of, or demand for, similar or competing properties;
•competition for tenantsmonitoring and changes in market rental rates;
•inability to lease or sell properties upon termination of existing leases, or renewal of leases at lower rental rates;
•inability to collect rents from tenants due to financial hardship, including bankruptcy;
•changes in tax, real estate, zoning, or environmental laws that adversely impact the value of real estate;
•failure to comply with federal, state,reporting costs and local legal and regulatory requirements, including the Americans with Disabilities Act and fire or life-safety requirements;
•uninsured property liability, property damage, or casualty losses;
•changes in operating expenses or unexpectedcapital expenditures for capital improvements;
•exposure to environmental losses; and
•force majeurecontrol facilities and other factors beyond the control of our management.
While the revenues from our leases are not directly dependent upon the value of the real estate owned, significant declines in real estate values could adversely affect us in many ways, including a decline in the residual values of properties at lease expiration, possible lease abandonment by tenants, and a decline in the attractiveness of triple-net lease transactions to potential sellers.new equipment. We also face the riskexpect that lease revenueover time we will likely need to be insufficientprepared to cover all corporate operating expensescontend with overlapping, yet distinct, climate-related disclosure requirements in multiple jurisdictions. Noncompliance with these laws or regulations may result in potential cost increases, litigation, fines, penalties, brand or reputational damage, loss of tenants, lower valuation and the debt service payments we incur.higher investor activism activities. We cannot predict how future laws and regulations, or future interpretations of current laws and regulations related to climate change will affect our business, financial condition and results of operations.
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| W. P. Carey 20212023 10-K – 9 |
Because mostIn addition to the laws and regulations surrounding climate change, the potential physical impacts of climate change on our operations are highly uncertain. These may include extreme weather, changes in rainfall and storm patterns and intensity, increased strength of hurricanes, water shortages, changing sea levels and changing temperatures. These changes may result in physical damage to, or a decrease in demand for, our properties are occupiedlocated in the areas affected by a single tenant,these conditions and may adversely impact out tenants’ abilities to fulfill their obligations under their leases. Chronic climate change may also lead to increased costs for our success is materially dependent upontenants to adapt to the tenant’s financial stability.demands and expectations of climate change or lower carbon usage, including with respect to heating, cooling or electricity costs, retrofitting properties to be more energy efficient or comply with new rules or regulations, or other unforeseen costs.
MostThe direct and indirect impact on us and our tenants from severe weather, flooding, and other effects of climate change, and the economic and reputational impacts of the transition to non-carbon based energy, could adversely affect our financial condition, operating results, and cash flows.
Our properties have historically been impacted by severe weather, but the effects have been small or moderate in scope. In the future, the adverse impacts from hurricanes, water shortages, changing sea levels, flooding, wildfires and other severe weather conditions are occupied bylikely to worsen as a single tenant; therefore, the successresult of our investments is materially dependent on the financial stability of these tenants. Revenues from several of our tenants/guarantors constitute a significant percentage of our lease revenues. Our top ten tenants accounted for approximately 20% of total ABR at December 31, 2021. Lease payment defaults by tenants could negatively impact our net income and reduce the amounts available for distribution to stockholders.
The bankruptcy or insolvency of tenants may cause a reductionclimate change. These events have resulted in our revenue and an increase in our expenses.
We have had, and may in the future have, tenants file for bankruptcy protection. Bankruptcy or insolvency of a tenant could lead to the loss of lease or interestresult in property damage and principal payments, an increase in the carrying cost of the property,closures and litigation. If one or a series of bankruptcies or insolvencies is significant enough (more likely during a period of economic downturn), it could lead to a reduction in the value of our shares and/or a decrease in our dividend. Under U.S. bankruptcy law, a tenant that is the subject of bankruptcy proceedings has the option of assuming or rejecting any unexpired lease. If the tenant rejects the lease, any resulting claim we have for breach of the lease (excluding collateral securing the claim) will be treated as a general unsecured claim and the maximum claim will be capped. In addition, due to the long-term nature of our leases and, in some cases, terms providing for the repurchase of a property by the tenant, a bankruptcy court could recharacterize a net lease transaction as a secured lending transaction. Insolvency laws outside the United States may be more or less favorable to reorganization or the protection of a debtor’s rights as in the United States. In circumstances where the bankruptcy laws of the United States are considered to be more favorable to debtors and/or their reorganization, entities that are not ordinarily perceived as U.S. entities may seek to take advantage of U.S. bankruptcy laws.
The continued disruption and reduced economic activity caused by COVID-19 may severely affect our tenants’ businesses, financial condition and liquidity, leading to an increase in tenant bankruptcy or insolvency. In addition, a portion of our tenants may fail to meet their obligations to us in full (or at all), or may otherwise seek modifications of such obligations. Certain jurisdictions may also enact laws or regulations that impact or alter our ability to collect rent under our existing least terms. The ultimate extent to which COVID-19 will continue toadversely impact the operations of our tenants. Even if these events do not directly impact our properties, they have impacted and may continue to impact us and our tenants will depend on future developments, which remain uncertainthrough increases in insurance, energy or other costs. In addition, the ongoing transition to non-carbon based energy presents certain risks for us and cannot be predicted with confidence. our tenants, including risks related to high energy costs and energy shortages, among other things. Changes in laws or regulations, including federal, state, or local laws, relating to climate change could result in increased capital expenditures to improve the energy efficiency of our properties.
Because we are subject to possible liabilities relating to environmental matters, we could incur unexpected costs and our ability to sell or otherwise dispose of a property may be negatively impacted.
We have invested, and may in the future invest, in real properties historically or currently used for industrial, manufacturing, and other commercial purposes, and some of our tenants may handle hazardous or toxic substances, generate hazardous wastes, or discharge regulated pollutants to the environment. Buildings and structures on the properties we purchase may have known or suspected asbestos-containing building materials. We may invest in properties located in countries that have adopted laws or observe environmental management standards that are less stringent than those generally followed in the United States, which may pose a greater risk that releases of hazardous or toxic substances have occurred. We therefore may own properties that have known or potential environmental contamination as a result of historical or ongoing operations, which may expose us to liabilities under environmental laws. Some of these laws could impose the following on us:
•responsibility and liability for the cost of investigation and removal or remediation (including at appropriate disposal facilities) of hazardous or toxic substances in, on, or migrating from our property, generally without regard to our knowledge of, or responsibility for, the presence of these contaminants;
•liability for claims by third parties based on damages to natural resources or property, personal injuries, or costs of removal or remediation of hazardous or toxic substances in, on, or migrating from our property; and
•responsibility for managing asbestos-containing building materials and third-party claims for exposure to those materials.
Costs relating to investigation, remediation, or removal of hazardous or toxic substances, or for third-party claims for damages, may be substantial and could exceed any amounts estimated and recorded within our consolidated financial statements. The presence of hazardous or toxic substances at any of our properties, or the failure to properly remediate a contaminated property, could (i) give rise to a lien in favor of the government for costs it may incur to address the contamination or (ii) otherwise adversely affect our ability to sell or lease the property or to borrow using the property as collateral. In addition, environmental liabilities, or costs or operating limitations imposed on a tenant by environmental laws, could affect its ability to make rental
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| W. P. Carey 2021 10-K– 10
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payments to us. And although we endeavor to avoid doing so, we may be required, in connection with any future divestitures of property, to provide buyers with indemnifications against potential environmental liabilities.
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| W. P. Carey 2023 10-K– 10 |
The value of our real estate is subject to fluctuation.
We are subject to all of the general risks associated with the ownership of real estate, which include:
•adverse changes in general or local economic conditions, including changes in interest rates or foreign exchange rates;
•changes in the supply of, or demand for, similar or competing properties;
•competition for tenants and changes in market rental rates;
•the ongoing need for capital improvements;
•Federal Reserve short term rate decisions;
•the mortgage market and real estate market in the United States;
•inability to lease or sell properties upon termination of existing leases, or renewal of leases at lower rental rates;
•inability to collect rents from tenants due to financial hardship, including bankruptcy;
•changes in tax, real estate, zoning, or environmental laws that adversely impact the value of real estate;
•failure to comply with federal, state, and local legal and regulatory requirements, including the Americans with Disabilities Act and fire or life-safety requirements;
•changes in governmental rules and fiscal policies;
•uninsured property liability, property damage, or casualty losses;
•increased operating costs, which may not necessarily be offset by increased rents, including insurance premiums, utilities and real estate taxes, due to inflation and other factors;
•exposure to environmental losses and the effects of climate change; and
•civil unrest, acts of war, terrorism, acts of God, including earthquakes, hurricanes and other natural disasters (which may result in uninsured losses) and other factors beyond our control.
While the revenues from our leases are not directly dependent upon the value of the real estate owned, significant declines in real estate values could adversely affect us in many ways, including a decline in the residual values of properties at lease expiration, possible lease abandonment by tenants, and a decline in the attractiveness of triple-net lease transactions to potential sellers. We also face the risk that lease revenue will be insufficient to cover all corporate operating expenses and the debt service payments we incur.
Because most of our properties are occupied by a single tenant, our success is materially dependent upon the tenant’s financial stability.
Most of our properties are occupied by a single tenant each; therefore, the success of our investments is materially dependent on the financial stability of these tenants. Revenues from several of our tenants/guarantors constitute a significant percentage of our lease revenues. Our top ten tenants accounted for approximately 21% of total ABR at December 31, 2023. Lease payment defaults by tenants could negatively impact our net income and reduce the amounts available for distribution to stockholders.
The bankruptcy or insolvency of tenants may cause a reduction in our revenue and an increase in our expenses.
We have had, and may in the future have, tenants file for bankruptcy protection. Bankruptcy or insolvency of a tenant could lead to the loss of lease or interest and principal payments, an increase in the carrying cost of the property, and litigation. If one or a series of bankruptcies or insolvencies is significant enough (more likely during a period of economic downturn), it could lead to a reduction in the value of our shares and/or a decrease in our dividend. Under U.S. bankruptcy law, a tenant that is the subject of bankruptcy proceedings has the option of assuming or rejecting any unexpired lease. If the tenant rejects the lease, any resulting claim we have for breach of the lease (excluding collateral securing the claim) will be treated as a general unsecured claim and the maximum claim will be capped. In addition, due to the long-term nature of our leases and, in some cases, terms providing for the repurchase of a property by the tenant, a bankruptcy court could recharacterize a net lease transaction as a secured lending transaction. Insolvency laws outside the United States may be more or less favorable to reorganization or the protection of a debtor’s rights as in the United States. In circumstances where the bankruptcy laws of the United States are considered to be more favorable to debtors and/or their reorganization, entities that are not ordinarily perceived as U.S. entities may seek to take advantage of U.S. bankruptcy laws.
High interest rates, inflation and a potential economic downturn may severely affect our tenants’ businesses, financial condition and liquidity, leading to an increase in tenant bankruptcy or insolvency. In addition, a portion of our tenants may fail to meet their obligations to us in full (or at all), or may otherwise seek modifications of such obligations. Certain jurisdictions may also enact laws or regulations that impact or alter our ability to collect rent under our existing least terms.
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| W. P. Carey 2023 10-K– 11 |
We may not achieve some or all the expected benefits of the Spin-Off and the Office Sale Program.
We may not be able to achieve the full strategic and financial benefits expected to result from the Spin-Off and the Office Sale Program, or such benefits may be delayed due to a variety of circumstances, not all of which may be under our control. We may not achieve the anticipated benefits of the Spin-Off or the Office Sale Program for a variety of reasons, including, among others: (i) the transactions may not generate the anticipated improvements in our cost of or access to capital; and (ii) we may be subject to unexpected costs related to the Spin-Off, including as a result of our indemnification obligations under the Separation and Distribution Agreement or obligations related to indebtedness associated with the transfer of NLOP assets and any guaranties related thereto. Failure to achieve some or all the benefits expected to result from the Spin-Off and the Office Sale Program, or a delay in realizing such benefits, may have a material adverse effect on our business, financial condition and results of operations.
We may acquire or develop properties or acquire other real estate related companies, and this may create risks.
We may acquire or develop properties or acquire other real estate related companies when we believe that an acquisition or development is consistent with our business strategies. We may not succeed in consummating desired acquisitions or in completing developments on time or within budget. When we do pursue a project or acquisition, we may not succeed in leasing newly developed or acquired properties at rents sufficient to cover the costs of acquisition or development and operations. Difficulties in integrating acquisitions may prove costly or time-consuming and could divert management’s attention from other activities. Acquisitions or developments in new markets or industries where we do not have the same level of market knowledge may result in poorer than anticipated performance. We may also abandon acquisition or development opportunities that management has begun pursuing and consequently fail to recover expenses already incurred and will have devoted management’s time to a matter not consummated. Furthermore, our acquisitions of new properties or companies will expose us to the liabilities of those properties or companies, some of which we may not be aware of at the time of the acquisition. In addition, development of our existing properties presents similar risks.
Risks Related to Our Liquidity and Capital Resources
Our level of indebtedness could have significant adverse consequences and our cash flow may be insufficient to meet our debt service obligations.
Our consolidated indebtedness as of December 31, 20212023, was approximately $6.8$8.1 billion, representing a consolidated debt to gross assets ratio of approximately 40.1%41.6%. This consolidated indebtedness was comprised of (i) $5.7$6.0 billion in Senior Unsecured Notes (as defined in Note 1012), (ii) $721.2$403.8 million outstanding under our Senior Unsecured Revolving Credit Facility (as defined in Note 1012), (iii) $1.1 billion outstanding under our Unsecured Term Loans (as defined in Note 12), and (iii) $368.5(iv) $579.1 million in non-recourse mortgage loans on various properties. Our level of indebtedness could have significant adverse consequences on our business and operations, including the following:
•it may increase our vulnerability to changes in economic conditions (including increases in interest rates) and limit our flexibility in planning for, or reacting to, changes in our business and/or industry;
•we may be at a disadvantage compared to our competitors with comparatively less indebtedness;
•we may be unable to hedge our debt, or such hedges may fail or expire, leaving us exposed to potentially volatile interest or currency exchange rates;
•any default on our secured indebtedness may lead to foreclosures, creating taxable income that could hinder our ability to meet the REIT distribution requirements imposed by the Internal Revenue Code; and
•we may be unable to refinance our indebtedness or obtain additional financing as needed or on favorable terms.
Our ability to generate sufficient cash flow determines whether we will be able to (i) meet our existing or potential future debt service obligations; (ii) refinance our existing or potential future indebtedness; and (iii) fund our operations, working capital, acquisitions, capital expenditures, and other important business uses. Our future cash flow is subject to many factors beyond our control and we cannot assure you that our business will generate sufficient cash flow from operations, or that future sources of cash will be available to us on favorable terms, to meet all of our debt service obligations and fund our other important business uses or liquidity needs. As a result, we may be forced to take other actions to meet those obligations, such as selling properties, raising equity, or delaying capital expenditures, any of which may not be feasible or could have a material adverse effect on us. In addition, despite our substantial outstanding indebtedness and the restrictions in the agreements governing our indebtedness, we may incur significantly more indebtedness in the future, which would exacerbate the risks discussed above.
The anticipated replacement of the London Inter-bank Offered Rate (“LIBOR”) with an alternative reference rate may cause disruptions that will have an adverse effect on us.
In July 2017, the Financial Conduct Authority (“FCA”), the authority that regulates LIBOR, announced that it intends to stop compelling banks to submit rates for the calculation of LIBOR after 2021. As a result, the Federal Reserve Board and the Federal Reserve Bank of New York organized the Alternative Reference Rates Committee, which identified the Secured Overnight Financing Rate (“SOFR”) as its preferred alternative to USD LIBOR in derivatives and other financial contracts. On November 30, 2020, the FCA announced a partial extension of this deadline, indicating its intention to cease the publication of the one-week and two-month USD LIBOR settings immediately following December 31, 2021, and the remaining USD LIBOR settings immediately following the LIBOR publication on June 30, 2023. While we expect LIBOR to be available in substantially its current form until at least such date, it is possible that LIBOR will become unavailable prior to that point; in which case, the risks associated with the transition to an alternative reference rate will be accelerated and magnified. The introduction of an alternative rate also may create additional basis risk and increased volatility as alternative rates are phased in and utilized in parallel with LIBOR.
We have financial contracts that are indexed to LIBOR and have transitioned certain non-USD LIBOR base rates phased out at the end of 2021 to their respective alternative reference rates. Our Senior Unsecured Credit Facility contains provisions that contemplate alternative methods to establishing a base rate upon LIBOR’s retirement. We expect to manage the transition to alternative reference rates using the language set forth in our agreements and through potential modifications to our debt and derivative instruments. In some instances, transitioning to an alternative reference rate may require negotiations with lenders and other counterparties, which could present challenges if we disagree regarding the method of transition. We continue to monitor and evaluate the risks related to potential changes in LIBOR availability, which include potential changes to financial products and market practices, borrowing rates, interest obligations, and the value of debt and derivative instruments. We are not able to predict when LIBOR will ultimately cease to be published or how SOFR will be calculated and implemented as an
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| W. P. Carey 20212023 10-K – 1112 |
alternative reference rate to USD LIBOR. In addition, there is no guarantee that the transition period will not result in general financial market disruptions, significant increases in benchmark rates or borrowing costs to borrowers, any of which could have an adverse effect on our financing costs, liquidity, results of operations, and overall financial condition.
Restrictive covenants in our credit agreement and indentures may limit our ability to expand or fully pursue our business strategies.
The credit agreement for our Senior Unsecured Credit Facility and the indentures governing our Senior Unsecured Notes contain financial and operating covenants that, among other things, require us to meet specified financial ratios and may limit our ability to take specific actions, even if we believe them to be in our best interest (e.g., subject to certain exceptions, our ability to consummate a merger, consolidation, or a transfer of all or substantially all of our consolidated assets to another person is restricted). These covenants may restrict our ability to expand or fully pursue our business strategies. Our ability to comply with these and other provisions of our debt agreements may be affected by changes in our operating and financial performance, changes in general business and economic conditions, adverse regulatory developments, or other events beyond our control. The breach of any of these covenants could result in a default under our indebtedness, which could result in the acceleration of the maturity of such indebtedness and potentially other indebtedness. If any of our indebtedness is accelerated prior to maturity, we may not be able to repay such indebtedness or refinance such indebtedness on favorable terms, or at all.
A downgrade in our credit ratings could materially adversely affect our business and financial condition as well as the market price of our Senior Unsecured Notes.
We plan to manage our operations to maintain investment grade status with a capital structure consistent with our current profile,profile. In September 2022 our rating was upgraded by Moody’s to Baa1 and in January 2023 our rating was upgraded by S&P Global Ratings to BBB+, but there can be no assurance that we will be able to maintain our current credit ratings. Our credit ratings could change based upon, among other things, our historical and projected business, financial condition, liquidity, results of operations, and prospects. These ratings are subject to ongoing evaluation by credit rating agencies and we cannot provide any assurance that our ratings will not be changed or withdrawn by a rating agency in the future. If any of the credit rating agencies downgrades or lowers our credit rating, or if any credit rating agency indicates that it has placed our rating on a “watch list” for a possible downgrading or lowering, or otherwise indicates that its outlook for our rating is negative, it could have a material adverse effect on our costs and availability of capital, which could in turn have a material adverse effect on us and on our ability to satisfy our debt service obligations (including those under our Senior Unsecured Credit Facility, our Senior Unsecured Notes, or other similar debt securities that we issue) and to pay dividends on our common stock. Furthermore, any such action could negatively impact the market price of our Senior Unsecured Notes.
Some of our properties are encumbered by mortgage debt, which could adversely affect our cash flow.
At December 31, 2021,2023, we had $368.5$579.1 million of property-level mortgage debt on a non-recourse basis, which limits our exposure on any property to the amount of equity invested in the property. If we are unable to make our mortgage-related debt payments as required, a lender could foreclose on the property or properties securing its debt. Additionally, lenders for our mortgage loan transactions typically incorporated various covenants and other provisions (including loan to value ratio, debt service coverage ratio, and material adverse changes in the borrower’s or tenant’s business) that can cause a technical loan default. Accordingly, if the real estate value declines or the tenant defaults, the lender would have the right to foreclose on its security. If any of these events were to occur, it could cause us to lose part or all of our investment, which could reduce the value of our portfolio and revenues available for distribution to our stockholders.
Some of our property-level financing may also require us to make a balloon payment at maturity. Our ability to make such balloon payments may depend upon our ability to refinance the obligation or sell the underlying property. When a balloon payment is due, however, we may be unable to refinance the balloon payment on terms as favorable as the original loan, make the payment with existing cash or cash resources, or sell the property at a price sufficient to cover the payment. Our ability to accomplish these goals will be affected by various factors existing at the relevant time, such as the state of national and regional economies, local real estate conditions, available mortgage or interest rates, availability of credit, our equity in the mortgaged properties, our financial condition, the operating history of the mortgaged properties, and tax laws. A refinancing or sale could affect the rate of return to stockholders and the projected disposition timeline of our assets.
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| W. P. Carey 20212023 10-K – 1213 |
Risks Related to our Corporate Structure and Maryland Law
OurCertain provisions of our charter and Maryland law containcould inhibit changes in control.
Certain provisions thatof our charter and of the Maryland General Corporation Law (“MGCL”) may delayhave the effect of inhibiting a third party from making a proposal to acquire us or preventimpeding a change of control transaction.that could provide our stockholders with the opportunity to realize a premium over the then-prevailing market price of our common stock, including:
Our•to protect against the loss of our REIT status due to concentration of ownership levels, our charter subject to certain exceptions, authorizes our boardgenerally limits the ability of directors (our “Board”) to take such actions as are necessary and desirable to limit anya person, to beneficialown, actually or constructive ownership ofconstructively, more than 9.8%, in either value or number of shares, whichever is more restrictive, of our aggregate outstanding shares of (i) common and preferred stock (excluding any outstanding shares of our common or preferred stock not treated as outstanding for federal income tax purposes) or (ii) common stock (excluding any of our outstanding shares of common stock not treated as outstanding for federal income tax purposes).stock. Our Board, in its sole discretion, may exempt a person from such ownership limits, provided that they obtain such representations, covenants, and undertakings as appropriate to determine that the exemption would not affect our REIT status. Our Board may also increase or decrease the common stock ownership limit and/or the aggregate stock ownership limit, so long as the change would not result in five or fewer persons beneficially owning more than 49.9% in value of our outstanding stock. The ownership limits and other stock ownership restrictions contained in our charter may delay or prevent a transaction or change of control that might involve a premium price for our common stock or otherwise be in the best interests of our stockholders.
Our Board may modify our authorized shares of stock of any class or series and may create and issue a class or series of common stock or preferred stock without stockholder approval.
Our charter empowers our Board to, without stockholder approval, increase or decrease the aggregate number of shares of our stock or the number of shares of stock of any class or series that we have authority to issue; classify any unissued shares of common stock or preferred stock; reclassify any previously classified, but unissued, shares of common stock or preferred stock into one or more classes or series of stock; and issue such shares of stock so classified or reclassified. Our Board may determine the relative rights, preferences, and privileges of any class or series of common stock or preferred stock issued. As a result, we may issue series or classes of common stock or preferred stock with preferences, dividends, powers, and rights (voting or otherwise) senior to the rights of current holders of our common stock. The issuance of any such classes or series of common stock or preferred stock could also have the effect of delaying or preventing a change of control transaction that might otherwise be in the best interests of our stockholders.
Certain provisions of Maryland law could inhibit changes in control.
Certain provisions of the Maryland General Corporation Law (“MGCL”) may have the effect of inhibiting a third party from making a proposal to acquire us or impeding a change of control that could provide our stockholders with the opportunity to realize a premium over the then-prevailing market price of our common stock, including:
•“business combination” provisions that, subject to limitations, prohibit certain business combinations between us and an “interested stockholder” (defined generally as any person who beneficially owns 10% or more of the voting power of our outstanding voting stock), or an affiliate thereof, for five years after the most recent date on which the stockholder becomes an interested stockholder, and thereafter imposes special appraisal rights and supermajority voting requirements on these combinations; and
•“control share” provisions that provide that holders of “control shares” of our company (defined as outstanding voting shares which, when aggregated with all other shares owned or controlled by the stockholder, entitle the stockholder to exercise one of three increasing ranges of voting power in electing directors) acquired in a “control share acquisition” (defined as the direct or indirect acquisition of ownership or control of issued and outstanding “control shares”) have no voting rights except to the extent approved by our stockholders by the affirmative vote of at least two-thirds of all the votes entitled to be cast on the matter, excluding all interested shares.shares; and
•our charter empowers our Board, without stockholder approval, to increase or decrease the aggregate number of shares of our stock or the number of shares of stock of any class or series that we have authority to issue, classify any unissued shares of common stock or preferred stock, reclassify any previously classified, but unissued, shares of common stock or preferred stock into one or more classes or series of stock, and issue such shares of stock so classified or reclassified, and our Board may determine the relative rights, preferences, and privileges of any class or series of common stock or preferred stock issued, including terms that could have the effect of delaying or preventing a change of control transaction.
The statuteMGCL permits various exemptions from its provisions, including business combinations that are exempted by a board of directors prior to the time that the “interested stockholder” becomes an interested stockholder. Our Board has, by resolution, exempted any business combination between us and any person who is an existing, or becomes in the future, an “interested stockholder.” Consequently, the five-year prohibition and the supermajority vote requirements will not apply to business combinations between us and any such person. As a result, such person may be able to enter into business combinations with us that may not be in the best interest of our stockholders, without compliance with the supermajority vote requirements and the other provisions of the statute. Additionally, this resolution may be altered, revoked, or repealed in whole or in part at any time and we may opt back into the business combination provisions of the MGCL. If this resolution is revoked or repealed, the statute may discourage others from trying to acquire control of us and increase the difficulty of consummating any offer. In the
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case of the control share provisions of the MGCL, we have elected to opt out of these provisions of the MGCL pursuant to a provision in our bylaws. If we amend our bylaws to remove or modify this provision, the control share provisions of the statute may discourage others from trying to acquire control of us and increase the difficulty of consummating any offer.
Additionally, Title 3, Subtitle 8 of the MGCL permits our Board, without stockholder approval and regardless of what is currently provided in our charter or our bylaws, to implement certain governance provisions, some of which we do not currently have. We have optedOur charter contains a provision opting out of Section 3-803 of the MGCL, which permits a board of directors to be divided into classes pursuant to Title 3, Subtitle 8by Board action and without a stockholder-approved charter amendment. This provision can be modified only with a board recommendation and stockholder approval of the MGCL. Any amendment or repeal of this resolution must be approvedcharter amendment. If we elect in the same manner as an amendmentfuture to our charter. Thebecome subject to any of the remaining provisions of Title 3, Subtitle 8 of the MGCL, such an election may have the effect of inhibiting a third party from making an acquisition proposal for our company or of delaying, deferring, or preventing a change in control of our company under circumstances that otherwise could provide the holders of our common stock with the opportunity to realize a premium over the then-current market price. Our charter, our bylaws, and Maryland law also contain
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other provisions that may delay, defer, or prevent a transaction or a change of control that might involve a premium price for our common stock or otherwise be in the best interests of our stockholders.
Risks Related to our REIT Structure
While we believe that we are properly organized as a REIT in accordance with applicable law, we cannot guarantee that the Internal Revenue Service will find that we have qualified as a REIT.
We believe that we are organized in conformity with the requirements for qualification as a REIT under the Internal Revenue Code beginning with our 2012 taxable year and that our current and anticipated investments and plan of operation will enable us to meet and continue to meet the requirements for qualification and taxation as a REIT. Investors should be aware, however, that the Internal Revenue Service or any court could take a position different from our own. Given the highly complex nature of the rules governing REITs, the ongoing importance of factual determinations, and the possibility of future changes in our circumstances, no assurance can be given that we will qualify as a REIT for any particular year.
Furthermore, our qualification and taxation as a REIT will depend on our satisfaction of certain asset, income, organizational, distribution, stockholder ownership, and other requirements on a continuing basis. Our ability to satisfy the quarterly asset tests under applicable Internal Revenue Code provisions and Treasury Regulations will depend on the fair market values of our assets, some of which are not susceptible to a precise determination. Our compliance with the REIT income and quarterly asset requirements also depends upon our ability to successfully manage the composition of our income and assets on an ongoing basis. While we believe that we will satisfy these tests, we cannot guarantee that this will be the case on a continuing basis.
If we fail to remain qualified as a REIT, we would be subject to federal income tax at corporate income tax rates and would not be able to deduct distributions to stockholders when computing our taxable income.
If, in any taxable year, we fail to qualify for taxation as a REIT and are not entitled to relief under the Internal Revenue Code, we will:
•not be allowed a deduction for distributions to stockholders in computing our taxable income;
•be subject to federal and state income tax, including any applicable alternative minimum tax (for taxable years ending prior to January 1, 2018), on our taxable income at regular corporate rate; and
•be barred from qualifying as a REIT for the four taxable years following the year when we were disqualified.
Any such corporate tax liability could be substantial and would reduce the amount of cash available for distributions to our stockholders, which in turn could have an adverse impact on the value of our common stock. This adverse impact could last for five or more years because, unless we are entitled to relief under certain statutory provisions, we will be taxed as a corporation beginning the year in which the failure occurs and for the following four years.
If we fail to qualify for taxation as a REIT, we may need to borrow funds or liquidate some investments to pay the additional tax liability. Were this to occur, funds available for investment would be reduced. REIT qualification involves the application of highly technical and complex provisions of the Internal Revenue Code to our operations, as well as various factual determinations concerning matters and circumstances not entirely within our control. There are limited judicial or administrative interpretations of these provisions. Although we plan to continue to operate in a manner consistent with the REIT qualification rules, we cannot assure you that we will qualify in a given year or remain so qualified.
If we fail to remain qualified as a REIT, we would be subject to federal income tax at corporate income tax rates and would not be able to deduct distributions to stockholders when computing our taxable income.
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If, in any taxable year, we fail to qualify for taxation as a REIT and are not entitled to relief under the Internal Revenue Code, we will:
•not be allowed a deduction for distributions to stockholders in computing our taxable income;
•be subject to federal and state income tax, including a 15% corporate minimum tax on certain corporations and a 1% excise tax on certain stock repurchases by certain corporations, among other changes, on our taxable income at regular corporate rate; and
•be barred from qualifying as a REIT for the four taxable years following the year when we were disqualified.
If we fail to make required distributions, we may be subject to federal corporate income tax.
We intend to declare regular quarterly distributions, the amount of which will be determined, and is subject to adjustment, by our Board. To continue to qualify and be taxed as a REIT, we will generally be required to distribute at least 90% of our REIT taxable income (determined without regard to the dividends-paid deduction and excluding net capital gain) each year to our stockholders. Generally, we expect to distribute all, or substantially all, of our REIT taxable income. If our cash available for distribution falls short of our estimates, we may be unable to maintain the proposed quarterly distributions that approximate our taxable income and we may fail to qualify for taxation as a REIT. In addition, our cash flows from operations may be insufficient to fund required distributions as a result of differences in timing between the actual receipt of income and the recognition of income for federal income tax purposes or the effect of nondeductible expenditures (e.g., capital expenditures, payments of compensation for which Section 162(m) of the Internal Revenue Code denies a deduction, the creation of reserves, or required debt service or amortization payments). To the extent we satisfy the 90% distribution requirement, but distribute less than 100% of our REIT taxable income, we will be subject to federal corporate income tax on our undistributed taxable income. We will also be subject to a 4.0% nondeductible excise tax if the actual amount that we pay out to our stockholders for a calendar year is less than a minimum amount specified under the Internal Revenue Code. In addition, in order to continue to qualify as a REIT, any C corporation earnings and profits to which we succeed must be distributed as of the close of the taxable year in which we accumulate or acquire such C corporation’s earnings and profits.
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Because certain covenants in our debt instruments may limit our ability to make required REIT distributions, we could be subject to taxation.
Our existing debt instruments include, and our future debt instruments may include, covenants that limit our ability to make required REIT distributions. If the limits set forth in these covenants prevent us from satisfying our REIT distribution requirements, we could fail to qualify for federal income tax purposes as a REIT. If the limits set forth in these covenants do not jeopardize our qualification for taxation as a REIT, but prevent us from distributing 100% of our REIT taxable income, we will be subject to federal corporate income tax, and potentially a nondeductible excise tax, on the retained amounts.
Because we are required to satisfy numerous requirements imposed upon REITs, we may be required to borrow funds, sell assets, or raise equity on terms that are not favorable to us.
In order to meet the REIT distribution requirements and maintain our qualification and taxation as a REIT, we may need to borrow funds, sell assets, or raise equity, even if the then-prevailing market conditions are not favorable for such transactions. If our cash flows are not sufficient to cover our REIT distribution requirements, it could adversely impact our ability to raise short- and long-term debt, sell assets, or offer equity securities in order to fund the distributions required to maintain our qualification and taxation as a REIT. Furthermore, the REIT distribution requirements may increase the financing we need to fund capital expenditures, future growth, and expansion initiatives, which would increase our total leverage.
In addition, if we fail to comply with certain asset ownership tests at the end of any calendar quarter, we must generally correct the failure within 30 days after the end of the calendar quarter or qualify for certain statutory relief provisions to avoid losing our REIT qualification. As a result, we may be required to liquidate otherwise attractive investments. These actions may reduce our income and amounts available for distribution to our stockholders.
Because the REIT rules require us to satisfy certain rules on an ongoing basis, our flexibility or ability to pursue otherwise attractive opportunities may be limited.
To qualify as a REIT for federal income tax purposes, we must continually satisfy tests concerning, among other things, the sources of our income, the nature and diversification of our assets, the amounts we distribute to our stockholders, and the ownership of our common stock. Compliance with these tests will require us to refrain from certain activities and may hinder our ability to make certain attractive investments, including the purchase of non-qualifying assets, the expansion of non-real estate activities, and investments in the businesses to be conducted by our taxable REIT subsidiaries (“TRSs”), thereby limiting our opportunities and the flexibility to change our business strategy. Furthermore, acquisition opportunities in domestic and international markets may be adversely affected if we need or require target companies to comply with certain REIT requirements prior to closing on acquisitions. Also, please see the risk “There can be no assurance that we will be able to maintain cash dividends” below.
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Because the REIT provisions of the Internal Revenue Code limit our ability to hedge effectively, the cost of our hedging may increase and we may incur tax liabilities.
The REIT provisions of the Internal Revenue Code limit our ability to hedge assets and liabilities that are not incurred to acquire or carry real estate. Generally, income from hedging transactions that have been properly identified for tax purposes (which we enter into to manage interest rate risk with respect to borrowings to acquire or carry real estate assets) and income from certain currency hedging transactions related to our non-U.S. operations, do not constitute “gross income” for purposes of the REIT gross income tests (such a hedging transaction is referred to as a “qualifying hedge”). In addition, if we enter into a qualifying hedge, but dispose of the underlying property (or a portion thereof) or the underlying debt (or a portion thereof) is extinguished, we can enter into a hedge of the original qualifying hedge, and income from the subsequent hedge will also not constitute “gross income” for purposes of the REIT gross income tests. To the extent that we enter into other types of hedging transactions, the income from those transactions is likely to be treated as non-qualifying income for purposes of the REIT gross income tests. As a result of these rules, we may need to limit our use of advantageous hedging techniques or implement those hedges through a TRS. This could increase the cost of our hedging activities because our TRSs could be subject to tax on income or gains resulting from such hedges or expose us to greater interest rate risks than we would otherwise want to bear. In addition, losses in any of our TRSs generally will not provide any tax benefit, except for being carried forward for use against future taxable income in the TRSs.
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We use TRSs, which may cause us to fail to qualify as a REIT.
To qualify as a REIT for federal income tax purposes, we hold our non-qualifying REIT assets and conduct our non-qualifying REIT income activities in or through one or more TRSs. The net income of our TRSs is not required to be distributed to us. Income that is not distributed to us by our domestic TRSs will generally not be subject to the REIT income distribution requirement. However, certain income that is not distributed to us by our foreign TRSs may be deemed distributed to us by operation of certain provisions of the U.S. TaxInternal Revenue Code and generally subject to REIT income distribution requirements. In addition, there may be limitations on our ability to accumulate earnings in our TRSs and the accumulation or reinvestment of significant earnings in our TRSs could result in adverse tax treatment. In particular, if the accumulation of cash in our TRSs causes the fair market value of our TRS interests and certain other non-qualifying assets to exceed 20% of the fair market value of our assets, we would lose tax efficiency and could potentially fail to qualify as a REIT.
Because the REIT rules limit our ability to receive distributions from TRSs, our ability to fund distribution payments using cash generated through our TRSs may be limited.
Our ability to receive distributions from our TRSs is limited by the rules we must comply with in order to maintain our REIT status. In particular, at least 75% of our gross income for each taxable year as a REIT must be derived from real estate-related sources, which principally includes gross income from the leasing of our properties. Consequently, no more than 25% of our gross income may consist of dividend income from our TRSs and other non-qualifying income types. Thus, our ability to receive distributions from our TRSs is limited and may impact our ability to fund distributions to our stockholders using cash flows from our TRSs. Specifically, if our TRSs become highly profitable, we might be limited in our ability to receive net income from our TRSs in an amount required to fund distributions to our stockholders commensurate with that profitability.
Transactions with our TRSs could cause us to be subject to a 100% penalty tax on certain income or deductions if those transactions are not conducted on an arm’s-length basis.
The Internal Revenue Code limits the deductibility of interest paid or accrued by a TRS to its parent REIT to assure that the TRS is subject to an appropriate level of corporate taxation. The Internal Revenue Code also imposes a 100% excise tax on certain transactions between a TRS and its parent REIT that are not conducted on an arm’s-length basis. We will monitor the value of investments in our TRSs in order to ensure compliance with TRS ownership limitations and will structure our transactions with our TRSs on terms that we believe are arm’s-length to avoid incurring the 100% excise tax described above. There can be no assurance, however, that we will be able to comply with the TRS ownership limitation or be able to avoid application of the 100% excise tax.
We may be subject to a limitation on our deductions for business interest expense.
In addition, the deduction for net business interest is generally limited to 30% of the borrower’s adjusted taxable income (excluding non-business income, net operating losses, business interest income, and, for taxable years beginning before January 1, 2022, computed without regard to depreciation and amortization). This limitation on the deductibility of net business interest could result in additional taxable income for us and our subsidiaries that are C corporations, including our TRSs, unless we or our subsidiaries qualify as real estate companies and elect not to be subject to such limitation in exchange for using longer depreciation periods that may otherwise be available.
Because distributions payable by REITs generally do not qualify for reduced tax rates, the value of our common stock could be adversely affected.
Certain distributions payable by domestic or qualified foreign corporations to individuals, trusts, and estates in the United States are currently eligible for federal income tax at a maximum rate of 20% plus the 3.8% Medicare tax on net investment income, if
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applicable. Distributions payable by REITs, in contrast, are generally not eligible for this reduced rate, unless the distributions are attributable to dividends received by the REIT from other corporations that would otherwise be eligible for the reduced rate. This more favorable tax rate for regular corporate distributions could cause qualified investors to perceive investments in REITs to be less attractive than investments in the stock of corporations that pay distributions, which could adversely affect the value of REIT stocks, including our common stock.
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Even if we continue to qualify as a REIT, certain of our business activities will be subject to corporate level income tax and foreign taxes, which will continue to reduce our cash flows, and we will have potential deferred and contingent tax liabilities.
Even if we qualify for taxation as a REIT, we may be subject to certain (i) federal, state, local, and foreign taxes on our income and assets (including alternative minimum taxes for taxable years ending prior to January 1, 2018);assets; (ii) taxes on any undistributed income and state, local, or foreign income; and (iii) franchise, property, and transfer taxes. In addition, we could be required to pay an excise or penalty tax under certain circumstances in order to utilize one or more relief provisions under the Internal Revenue Code to maintain qualification for taxation as a REIT, which could be significant in amount.
Any TRS assets and operations would continue to be subject, as applicable, to federal and state corporate income taxes and to foreign taxes in the jurisdictions in which those assets and operations are located. Any of these taxes would decrease our earnings and our cash available for distributions to stockholders.
We will also be subject to a federal corporate level tax at the highest regular corporate rate (currently 21%) on all or a portion of the gain recognized from a sale of assets formerly held by any C corporation that we acquire on a carry-over basis transaction occurring within a five-year period after we acquire such assets, to the extent the built-in gain based on the fair market value of those assets on the effective date of the REIT election is in excess of our then tax basis. The tax on subsequently sold assets will be based on the fair market value and built-in gain of those assets as of the beginning of our holding period. Gains from the sale of an asset occurring after the specified period will not be subject to this corporate level tax. We expect to have only a de minimis amount of assets subject to these corporate tax rules and do not expect to dispose of any significant assets subject to these corporate tax rules.
Because dividends received by foreign stockholders are generally taxable, we may be required to withhold a portion of our distributions to such persons.
Ordinary dividends received by foreign stockholders that are not effectively connected with the conduct of a U.S. trade or business are generally subject to U.S. withholding tax at a rate of 30%, unless reduced by an applicable income tax treaty. Additional rules with respect to certain capital gain distributions will apply to foreign stockholders that own more than 10% of our common stock.
The tax imposed on REITs engaging in “prohibited transactions” may limit our ability to engage in transactions which would be treated as sales for federal income tax purposes.
A REIT’s net income from prohibited transactions is subject to a 100% penalty tax. In general, prohibited transactions are sales or other dispositions of property, other than foreclosure property, held primarily for sale to customers in the ordinary course of business, unless certain safe harbor exceptions apply. Although we do not intend to hold any properties that would be characterized as held for sale to customers in the ordinary course of our business, such characterization is a factual determination and no guarantee can be given that the IRS would agree with our characterization of our properties or that we will always be able to satisfy the available safe harbors.
The ability of our Board to revoke our REIT election, without stockholder approval, may cause adverse consequences for our stockholders.
Our organizational documents permit our Board to revoke or otherwise terminate our REIT election, without the approval of our stockholders, if it determines that it is no longer in our best interest to continue to qualify as a REIT. If we cease to be a REIT, we will not be allowed a deduction for dividends paid to stockholders in computing our taxable income and we will be subject to federal income tax at regular corporate rate and state and local taxes, which may have adverse consequences on the total return to our stockholders.
Federal and state income tax laws governing REITs and related interpretations may change at any time, and any such legislative or other actions affecting REITs could have a negative effect on us and our stockholders.
Federal and state income tax laws governing REITs or the administrative interpretations of those laws may be amended at any time. Federal, state, and foreign tax laws are under constant review by persons involved in the legislative process, at the Internal Revenue Service and the U.S. Department of the Treasury, and at various state and foreign tax authorities. Changes to tax laws, regulations, or administrative interpretations, which may be applied retroactively, could adversely affect us or our stockholders. We cannot predict whether, when, in what forms, or with what effective dates, the tax laws, regulations, and administrative
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interpretations applicable to us or our stockholders may be changed. Accordingly, we cannot assure you that any such change will not significantly affect our ability to qualify for taxation as a REIT or the federal income tax consequences to you or us.
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Risks Related to Our Overall Business
We are subject to the volatility of the capital markets, which may impact our ability to deploy capital.
The trading volume and market price of our common stock may fluctuate significantly and be adversely impacted in response to a number of factors.factors, including disruption in the banking industry, continued inflation, and other macroeconomic developments. Therefore, our current or historical trading volume and share prices are not indicative of the number of shares of our common stock that will trade going forward or how the market will value shares of our common stock in the future. In addition, the capital markets may experience extreme volatility, disruption and periods of dislocation (e.g., during pandemics or a global financial crisis), which could make it more difficult for us to raise capital. Since net-lease REITs must be able to deploy capital with agility and consistency, if we cannot access the capital markets upon favorable terms or at all, we may be required to liquidate one or more investments, including when an investment has not yet realized its maximum return, which could also result in adverse tax consequences and affect our ability to capitalize on acquisition opportunities and/or meet operational needs. Moreover, market turmoil could lead to decreased consumer confidence and widespread reduction of business activity, which may materially and adversely impact us, including our ability to acquire and dispose of properties.
Future issuances of debt and equity securities may negatively affect the market price of our common stock.
We may issue debt or equity securities or incur additional borrowings in the future. Future issuances of debt securities would increase our interest costs and rank senior to our common stock upon our liquidation, and additional issuances of equity securities would dilute the holdings of our existing common stockholders (and any preferred stock may rank senior to our common stock for the purposes of making distributions), both of which may negatively affect the market price of our common stock. However, our future growth will depend, in part, upon our ability to raise additional capital, including through the issuance of debt and equity securities. Because our decision to issue additional debt or equity securities or incur additional borrowings in the future will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing, nature, or success of our future capital raising efforts. Thus, common stockholders bear the risk that our future issuances of debt or equity securities, or our incurrence of additional borrowings, will negatively affect the market price of our common stock.
There can be no assurance that we will be able to maintain cash dividends.
In September 2023, we announced that we were resetting our dividend policy, targeting an AFFO payout ratio of approximately 70% to 75%. Our ability to continue to pay dividends in the future may be adversely affected by the risk factors described in this Report. More specifically, while we expect to continue our current dividend practices, we can give no assurance that we will be able to maintain dividend levels in the future for various reasons, including the following:
•there is no assurance that rents from our properties will increase or that future acquisitions will increase our cash available for distribution to stockholders, and we may not have enough cash to pay such dividends due to changes in our cash requirements, capital plans, cash flow, or financial position;
•our Board, in its sole discretion, determines the amount and timing of any future dividend payments to our stockholders based on a number of factors, therefore our dividend levels are not guaranteed and may fluctuate; and
•the amount of dividends that our subsidiaries may distribute to us may be subject to restrictions imposed by state law or regulators, as well as the terms of any current or future indebtedness that these subsidiaries may incur.
Furthermore, certain agreements relating to our borrowings may, under certain circumstances, prohibit or otherwise restrict our ability to pay dividends to our common stockholders. Future dividends, if any, are expected to be based upon our earnings, financial condition, cash flows and liquidity, debt service requirements, capital expenditure requirements for our properties, financing covenants, and applicable law. If we do not have sufficient cash available to pay dividends, we may need to fund the shortage out of working capital or revenues from future acquisitions, if any, or borrow to provide funds for such dividends, which would reduce the amount of funds available for investment and increase our future interest costs. Our inability to pay dividends, or to pay dividends at expected levels, could adversely impact the market price of our common stock.
Our accounting policies and methods are fundamental Additionally, in the event that we have to how we record and report our financial position and results of operations, and they require managementdeclare dividends in-kind in order to make estimates, judgments, and assumptions about matters that are inherently uncertain.
Our accounting policies and methods are fundamental to how we record and report our financial position and results of operations. We have identified several accounting policies as being critical tosatisfy the presentationREIT annual distribution requirements, a holder of our financial position and resultscommon stock will be required to report dividend income as a result of operations because they require managementsuch distributions even though we distributed no cash or only nominal amounts of cash to make particularly subjective or complex judgments about matters thatsuch stockholder.
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are inherently uncertain
We may make investments in asset classes or countries outside of our core investment strategy which may be perceived as complicating our strategy relative to our peers.
We may need to expand beyond our current asset class mix to grow our portfolio. As a result, we intend, to the extent that market conditions warrant, to seek to grow our business by increasing our investments in existing businesses, pursuing new investment strategies (including investment opportunities in new asset classes), developing new types of investment structures and becauseproducts, and expanding into new geographic markets and businesses. Introducing new types of investment structures and products could increase the complexities involved in managing such investments, including to ensure compliance with regulatory requirements and terms of the likelihood that materially different amounts wouldinvestment. Making investments in assets classes or countries outside of our core investment strategy may also be recorded under different conditions or using different assumptions. Due to the inherent uncertainty of the estimates, judgments, and assumptions associated with these critical accounting policies, we cannot provide any assurance that we will not make significant subsequent adjustmentsperceived as complicating our strategy relative to our consolidated financial statements. If our judgments, assumptions,peers.
Entry into new asset classes or countries may subject us to new laws and allocations proveregulations with which we are not familiar, or from which we are currently exempt, and may lead to be incorrect, or if circumstances change,increased litigation and regulatory risk and costs.
Failure to hedge effectively against interest rate changes and foreign exchange rate changes may have a material adverse effect on our business, financial condition revenues, operating expense,and results of operations, liquidity, ability to pay dividends, or stock price may be materially adversely affected.operations.
Our future success depends onThe interest rate and foreign exchange rate hedge instruments we may use to manage some of our exposure to interest rate and foreign exchange rate volatility involve risk, such as the successful recruitmentrisk that counterparties may fail to honor their obligations under these arrangements. Failure to hedge effectively against such interest rate and retention of personnel, including our executives.
Our future success depends in large partforeign exchange rate changes may have a material adverse effect on our ability to hirebusiness, financial condition and retain a sufficient numberresults of qualified and diverse personnel. Failure to recruit from a diverse pool of qualified candidates, particularly in light of recent labor shortages triggered by the COVID-19 pandemic, could negatively impact the dynamic growth of our company. In addition, the nature of our executive officers’ experience and the extent of the relationships they have developed with real estate professionals and financial institutions are important to the success of our business. We cannot provide any assurances regarding their continued employment with us. The loss of the services of certain of our executive officers could detrimentally affect our business and prospects, and a sustained labor shortage or increased turnover rates among our employees, as a result of the COVID-19 pandemic or other factors, could increase costs and materially adversely affect our business.operations.
The occurrence of cyber incidents, or a deficiency in our cyber security, could negatively impact our business by causing a disruption to our operations, a compromise or corruption of our confidential information, and/or damage to our business relationships, all of which could negatively impact our financial results.
A cyber incident is considered to be any adverse event that threatens the confidentiality, integrity, or availability of our information resources, which could be an intentional attack or an unintentional accident or error. We use informationInformation technology, communication networks, and other computer resources are essential for us to carry out important operational activities and to maintain our business records. With the advent of remote work environments and technologies, we face heightened cybersecurity risks as our employees and counterparties increasingly depend on the internet and face greater exposure to malware and phishing attacks. These heightened cybersecurity risks may increase our vulnerability to cyber-attacks and cause disruptions to our internal control procedures.
In addition, we may store or come into contact with sensitive information and data. If we or our third-party service providers fail to comply with applicable privacy or data security laws in handling this information, including the General Data Protection Regulation and the California Consumer Privacy Act, we could face significant legal and financial exposure to claims of governmental agencies and parties whose privacy is compromised, including sizable fines and penalties.
We have implemented processes, procedures, and controls, which are reviewed periodically and are intended to address ongoing and evolving cyber security risks, butrisks. However, these measures as well as our increased awareness of a risk of a cyber incident, do not guarantee that our financial results will not be negatively impacted by such an incident.incident, especially in light of the fact that it is not always possible to anticipate, detect, or recognize threats to our systems. The primary risks that could directly result from the occurrence of a cyber incident include operational interruption, damage to our relationship with our tenants, expensive remediation efforts, liability exposure under federal and state law, and private data exposure. A significant and extended disruption could damage our business or reputation; cause a loss of revenue; have an adverse effect on tenant relations; cause an unintended or unauthorized public disclosure; or lead to the misappropriation of proprietary, personal identifying and confidential information; all of which could result in us incurring significant expenses to address and remediate or otherwise resolve these kinds of issues. There can be no assurance that the insurance we maintain to cover some of these risks will be sufficient to cover the losses from any future breaches of our systems.
Our business may continueFurther information relating to be adversely affected by COVID-19.
We are unable to predict the impact of ongoing disruptions caused by additional surges of COVID-19 transmission. The economic downturn and market volatility caused by the COVID-19 pandemic has already eroded the financial condition of certain of our tenants and operating properties; therefore, we cannot predict the impact that COVID-19 will continue to have on our tenants’ ability to pay rent and any information provided regarding historical rent collections should not serve as an indication of expected future rent collections. We also cannot assure you that conditionscybersecurity risk management is discussed in
the bank lending, capital, and other financial markets will not deteriorate as a result of the ongoing disruptions caused by COVID-19, causing our access to capital and other sources of funding to become constrained, which could adversely affect the terms or even availability of future borrowings, renewals, and refinancings. ChangesItem1C.Cybersecurity in laws and regulatory policies, including any governmental actions related to COVID-19 and the effects of fiscal and monetary policy changes, could result in business disruptions and subject us to additional market volatility and risks. On a company-level, rapidly changing guidance regarding COVID-19 protocols could subject us to risks arising from potential legal liabilities. The extent to which COVID-19 will impact our results and operations | | | | | |
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will depend on future developments, including progression in vaccination and treatment regimes, the frequency and duration of additional surges in transmission, and governmental actions taken to contain or mitigate the impacts of COVID-19, all of which are highly uncertain and cannot be predicted with confidence.
Item 1B. Unresolved Staff Comments.
None.
Item 1C. Cybersecurity.
We believe we maintain an information technology and cybersecurity program appropriate for a company our size, taking into account our operations and risks.
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| W. P. Carey 2023 10-K– 20 |
Management and Board Oversight
We are committed to cybersecurity and vigilantly protecting all our resources and information from unauthorized access. Our cybersecurity approach incorporates a layered portfolio of comprehensive employee training programs, multiple resources to manage and monitor the evolving threat landscape, effective Board oversight of cybersecurity risks and knowledgeable teams responsible for preventing and detecting cybersecurity risks.
As part of the Board’s oversight of risk management, the Board reviews our cyber-risks with management and the actions we are taking to mitigate such risks. These actions include implementing industry-recognized practices for protecting systems, third-party monitoring of certain systems and cybersecurity training for employees. Board oversight of risk is also performed as needed between meetings through the Audit Committee and communications between management and the Board. The Board receives periodic education around cybersecurity risks and best practices.
Additionally, the Audit Committee, which consists solely of independent directors, is responsible for overseeing cybersecurity risks and related initiatives. The Audit Committee reviews our enterprise risk and cybersecurity risks. It also reviews the steps management has taken to protect against threats to our information systems and security and receives updates on cybersecurity on a quarterly basis.
Our information technology team is led by our Chief Information Officer who has extensive experience working with information security systems. Our information technology team consists of individuals with expertise in assessing, preventing and addressing cybersecurity risk and is responsible for executing our cybersecurity program as well as communicating regularly with senior management, our cybersecurity governance committee, the Audit Committee and the Board. Our cybersecurity governance committee, comprised of our Chief Financial Officer, Chief Legal Officer, Chief Information Officer, Head of Internal Audit and senior members of our information technology team are responsible for developing and maintaining our cybersecurity policies and standards, monitoring ongoing compliance and program updates, and ensuring our information security is aligned with our business objectives and strategies.
Processes for Assessing, Identifying and Managing Material Risks from Cybersecurity Threats
Our cybersecurity program focuses on (1) preventing and preparing for cybersecurity incidents, (2) detecting and analyzing cybersecurity incidents and (3) containing, eradicating, recovering from and reporting cybersecurity events.
Prevention and Preparation
We employ a variety of measures to prevent threats related to privacy, information technology security and cybersecurity, which include password protection, frequent mandatory password change events, multi-factor authentication, internal phishing testing, vulnerability scanning and penetration testing.
Our information technology and internal audit teams utilize frameworks based on industry standards to identify and mitigate information security risks and oversee an active cybersecurity training program. For example, in January 2023, our information technology team held a tabletop exercise with senior management to consider different cybersecurity scenarios. Our information technology team also recently worked with various third-party consultants to update our incident response plan.
In addition, our information technology team conducts routine security assessments as well as ongoing cybersecurity training campaigns for employees to enhance awareness and increase vigilance for the various types of cybersecurity attacks to which they may be exposed. Our internal audit team evaluates and monitors our internal controls over systems access in an effort to mitigate information security risks that may result from unauthorized access to systems and data.
Third-party vendors are vetted through our service delivery program to ensure they have an established cybersecurity program. We have also engaged our managed security provider to manage a supply chain defense subscription that will help obtain clear visibility into cybersecurity risks across third party vendors by proactively identifying, prioritizing, and driving remediation for cyber risks posed by critical business partners. Our managed security provider’s risk operations center will escalate certain alerts regarding third-party vendors directly to the appropriate business partners thus providing direct collaboration with third parties, saving time and improving risk reduction while safeguarding our relationships with such third parties.
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| W. P. Carey 2023 10-K– 21 |
Detection and Analysis
Cybersecurity incidents may be detected through a variety of means, including but not limited to automated event-detection notifications or similar technologies which are monitored by our managed cybersecurity provider, notifications from employees, vendors or service providers, and notifications from third party information technology system providers. Once a potential cybersecurity incident is identified, including a third party cybersecurity event, the incident response team designated pursuant to our incident response plan follows the procedures set forth in the plan to investigate the potential incident, such as determining the nature of the event (e.g., ransomware or personal data breach) and assessing the severity of the event and sensitivity of any compromised data.
Containment, Eradication, Recovery, and Reporting
In the event of a cybersecurity incident, the incident response team is initially focused on containing the cybersecurity incident as quickly and efficiently as possible, consistent with the procedures in the incident response plan. Containment procedures may include shutting down systems; disconnecting systems from a network, disabling specific ports, protocols, services, functions, etc., disabling access to compromised systems; examining code in a controlled environment and making forensic backups of affected systems for possible legal action for third party forensic analysis.
Once a cybersecurity incident is contained, the focus shifts to remediation. Eradication and recovery activities depend on the nature of the cybersecurity incident. They may include returning affected systems to an operationally ready state, confirming that the affected systems are functioning normally and implementing, as necessary, additional monitoring to look for future related activity.
We have relationships with a number of third party service providers to assist with cybersecurity containment and remediation efforts, including outside legal counsel, vendors and external insurance brokers.
In the event of a cybersecurity incident, we intend to follow the steps outlined in our incident response plan, including notifying our senior management, as appropriate.
Following the conclusion of an incident, we, with the assistance of the incident response team, will generally reassess the effectiveness of the cybersecurity program and incident response plan, make adjustments as appropriate and report to our senior management and our Audit Committee on these matters.
Cybersecurity Risks
As of December 31, 2023, we are not aware of any material cybersecurity incidents that impacted the Company in the last three years. However, we routinely face risks of potential incidents, whether through cyber-attacks or cyber intrusions over the Internet, ransomware and other forms of malware, computer viruses, attachments to emails, phishing attempts, extortion or other scams. For a discussion of these risks, see Item 1A. Risk Factors — The occurrence of cyber incidents, or a deficiency in our cyber security, could negatively impact our business by causing a disruption to our operations, a compromise or corruption of our confidential information, and/or damage to our business relationships, all of which could negatively impact our financial results.
Item 2. Properties.
Our principal corporate offices are located at One Manhattan West, 395 9th Avenue, 58th Floor, New York, NY 10001 and our international offices are located in London and Amsterdam. We have additional office space domestically in Dallas. We lease all of these offices and believe these leases are suitable for our operations for the foreseeable future.
Item 3. Legal Proceedings.
Various claims and lawsuits arising in the normal course of business are pending against us. The results of these proceedings are not expected to have a material adverse effect on our consolidated financial position or results of operations.
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| W. P. Carey 2023 10-K– 22 |
Item 4. Mine Safety Disclosures.
Not applicable.
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| W. P. Carey 20212023 10-K – 2023 |
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
Market Information
Our common stock is listed on the NYSE under the ticker symbol “WPC.” At February 4, 20222, 2024 there were 8,3198,163 registered holders of record of our common stock. This figure does not reflect the beneficial ownership of shares of our common stock.
Stock Price Performance Graph
The graph below provides an indicator of cumulative total stockholder returns for our common stock for the period December 31, 20162018 to December 31, 2021,2023, as compared with the S&P 500 Index and the FTSE NAREIT Equity REITsMSCI US REIT Index. The graph assumes a $100 investment on December 31, 2016,2018, together with the reinvestment of all dividends. The graph does not reflect any adjustments for the Spin-Off of NLOP that was completed on November 1, 2023 and accomplished via a pro rata dividend of one NLOP common share for every 15 shares of WPC common stock outstanding (Note 3).
| | | | At December 31, | | At December 31, |
| | | 2016 | | 2017 | | 2018 | | 2019 | | 2020 | | 2021 | | 2018 | | 2019 | | 2020 | | 2021 | | 2022 | | 2023 |
| W. P. Carey Inc. | W. P. Carey Inc. | $ | 100.00 | | | $ | 123.88 | | | $ | 125.22 | | | $ | 161.33 | | | $ | 151.67 | | | $ | 186.38 | |
| S&P 500 Index | S&P 500 Index | 100.00 | | | 121.83 | | | 116.49 | | | 153.17 | | | 181.35 | | | 233.41 | |
| FTSE NAREIT Equity REITs Index | 100.00 | | | 105.23 | | | 100.36 | | | 126.45 | | | 116.34 | | | 166.64 | |
| MSCI US REIT Index | |
The stock price performance included in this graph is not indicative of future stock price performance.
Dividends
We currently intend to continue paying cash dividends consistent with our historical practice; however, our Board determines the amount and timing of any future dividend payments to our stockholders based on a variety of factors.
Securities Authorized for Issuance Under Equity Compensation Plans
This information will be contained in our definitive proxy statement Our dividend for the
2022 Annual Meetingfourth quarter of
Stockholders, to be filed2023 of $0.860 per share reflects both our strategic exit from the office assets within
120 days following the end of our
fiscal year,portfolio (announced on September 21, 2023) (Note 1) and is incorporated herein by reference.a lower payout ratio.
Item 6. Reserved
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| W. P. Carey 20212023 10-K – 2124 |
Item 6. Reserved
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to assist in understanding our financial statements and the reasons for changes in certain key components of our financial statements from period to period. This item also provides our perspective on our financial position and liquidity, as well as certain other factors that may affect our future results. The discussion also breaks down the financial results of our business by segment to provide a better understanding of how these segments and their results affect our financial condition and results of operations.
The following discussion should be read in conjunction with our consolidated financial statements in Item 8 of this Report and the matters described under Item 1A. Risk Factors. Please see our Annual Report on Form 10-K for the year ended December 31, 20202022 for discussion of our financial condition and results of operations for the year ended December 31, 2019.2021. Refer to Item 1. Business for a description of our business.
Significant Developments
COVID-19Strategic Office Exit
We continueIn September 2023, we announced a plan to actively engageexit the office assets within our portfolio by (i) spinning-off 59 office properties into NLOP, so that it became a separate publicly-traded REIT, and (ii) implementing the Office Sale Program, which is targeted to be completed in discussions with our tenants regarding the impactfirst half of 2024.
NLOP Spin-Off
On November 1, 2023, we completed the Spin-Off of 59 office properties into NLOP, as described in further detail in Note 3. Following the closing of the COVID-19 pandemic on their business operations, liquidity, and financial position. ThroughSpin-Off, NLOP operates as a separate publicly-traded REIT, for which we serve as advisor pursuant to the NLOP Advisory Agreements executed in connection with the Spin-Off.
Office Sale Program
In addition to the Spin-Off, 87 of our office properties will be sold under the Office Sale Program, which is targeted to be completed in the first half of 2024. These properties generated ABR totaling approximately $76 million as of the date of the Office Sale Program announcement. Seventy-nine of the 87 office properties have been sold as of the date of this Report, we have received from tenants over 99.8%for gross proceeds of contractual base rent due during the fourth quarter of 2021 (based on contractual minimum annualized base rent (“ABR”approximately $608.1 million (Note 19) as of September 30, 2021). Given the ongoing uncertainty surrounding the impact of the COVID-19 pandemic, we are unable to predict its effect on our tenants’ continued ability to pay rent. Therefore, information provided in this Report regarding rent collections should not serve as an indication of expected future rent collections.
Financial Highlights
During the year ended December 31, 2021,2023, we completed the following (as further described in the consolidated financial statements):
Real Estate
Investments
•We acquired 2816 investments totaling $1.5$1.2 billion (Note 4, Note 56). •We completed fourthree construction projects at a cost totaling $88.2$60.7 million (Note 46). •We entered into an agreement to fundfunded approximately $38.2 million for a construction loan of approximately $224.9 million forto build a retail complex in Las Vegas, Nevada.Nevada, during the year ended December 31, 2023. Through December 31, 2021,2023, we have funded $103.7$231.4 million (Note 79). •We committed to fund six build-to-suitfour redevelopment or expansion projects totaling $63.5 million (based on the exchange rate of the euro at December 31, 2021, as applicable).$84.1 million. We currently expect to complete the projects in 20222024 and 20232025 (Note 46). •We entered into a purchase agreement to acquire four retail (car wash) facilities in the United States for approximately $20.3 million, which is expected to be completed in 2024.
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| W. P. Carey 2023 10-K– 25 |
Dispositions
•As part of our active capital recycling program, weWe disposed of 2431 properties for total proceeds, net of selling costs, of $163.6$446.4 million, including eight properties sold under the Office Sale Program for total proceeds, net of selling costs, of $216.9 million (Note 1517). Eight of the properties sold were hotel operating properties. These dispositions exclude properties contributed to NLOP in the Spin-Off (Note 3).
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| W. P. Carey 2021 10-K– 22
|
Financing and Capital Markets Transactions
•On February 25, 2021,In April 2023, we completed an underwritten public offering of $425.0entered into a new €500.0 million of 2.250% Senior Notes due 2033, at a price of 98.722% of par value. These 2.250% Senior Notes due 2033 have a 12.1-yearunsecured term and are scheduled to matureloan maturing on April 1, 20332026, which was drawn in full at closing. In conjunction with the closing of this Unsecured Term Loan due 2026, we executed variable-to-fixed interest rate swaps that fix the total per annum interest rate at 4.34% through the end of 2024. The Unsecured Term Loan due 2026 was incorporated into the Senior Unsecured Credit Facility in December 2023 (Note 1012). •On March 8, 2021,In December 2023, we completed an underwritten public offeringamended and restated our multi-currency Senior Unsecured Credit Facility to (i) increase the capacity of €525.0our Unsecured Revolving Credit Facility from $1.8 billion to $2.0 billion and extend the maturity of this facility by four years to February 14, 2029, and (ii) refinance our £270.0 million of 0.950% Senior NotesGBP Term Loan due 2030, at a price of 99.335% of par value, issued2028 and our €215.0 million EUR Term Loan due 2028 by our wholly owned finance subsidiary, WPC Eurobond B.V., and fully and unconditionally guaranteed by us. These 0.950% Senior Notes due 2030 have a 9.2-year term and are scheduled to mature on June 1, 2030. We usedextending the net proceeds from this offering to redeem the €500.0 million of 2.0% Senior Notes due 2023, for which we paid a “make-whole” amount of $26.2 million (based on the exchange rate of the euro as of thematurity date of redemption) (Note 10). •On October 15, 2021, we completedeach term loan by three years to February 14, 2028, with an underwritten public offering of $350.0 million of 2.450% Senior Notes due 2032, at a price of 99.048% of par value, in our inaugural green bond offering. These 2.450% Senior Notes due 2032 have a 10.3-yearoption to extend these term and are scheduledloans by up to mature on February 1, 2032. We intend to fully allocate an amount equal to the net proceeds from this offering to the financing and refinancing, in whole or in part, of one or more recently completed or future eligible green projects (as defined in the prospectus supplement for the offering) (Note 10).•On June 7, 2021, we offered 6,037,500 shares of common stock through our June 2021 Equity Forwards, for gross proceeds of approximately $454.6 million. In addition, on August 9, 2021, we offered 5,175,000 shares of common stock through our August 2021 Equity Forwards, for gross proceeds of approximately $403.7 million. During theadditional year, ended December 31, 2021, we settled portions of our Equity Forwards by delivering 9,798,209 shares of common stocksubject to certain forward purchasers for net proceeds of $697.0 million.customary conditions. As of December 31, 2021, 3,925,000 shares remained outstanding2023, the aggregate principal amount (of revolving and term loans) available under the Senior Unsecured Credit Facility was able to be increased up to an amount not to exceed the U.S. dollar equivalent of $4.35 billion, subject to the conditions to increase set forth in our Equity Forwardscredit agreement (Note 12).•We issued 4,690,073settled in full our ATM Forwards by delivering 7,826,840 shares of our common stock under our ATM Program at a weighted-average price of $73.42 per share, for net proceeds of $340.0approximately $634 million (Note 1214). •We reduced our mortgage debt outstanding by prepaying or repaying at or close to maturity a total of $777.8$368.0 million of non-recourse mortgage loans (including prepayment penalties totaling $45.2 million) with a weighted-average interest rate of 4.8%4.9% (Note 1012).
Investment Management
Assets Under Management
•As of December 31, 2021, we managed total assets of approximately $2.7 billion on behalf of CPA:18 – Global and CESH. We expect that the vast majority of our Investment Management earnings going forward will be generated from asset management fees and our ownership interests in CPA:18 – Global and CESH.
Dividends to Stockholders
We declared cash dividends totaling $4.205$4.067 per share, comprised of four quarterly dividends per share of $1.048, $1.050, $1.052,$1.067, $1.069, $1.071, and $1.055.$0.860. Our fourth quarter dividend of $0.860 per share reflects both our strategic exit from the office assets within our portfolio (announced on September 21, 2023) and a lower payout ratio.
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| W. P. Carey 20212023 10-K – 2326 |
Consolidated Results
(in thousands, except shares)
| | Years Ended December 31, |
| 2021 | | 2020 |
| Years Ended December 31, | | | Years Ended December 31, |
| 2023 | | | 2023 | | 2022 |
| Revenues from Real Estate | Revenues from Real Estate | $ | 1,312,126 | | | $ | 1,177,997 | |
| Revenues from Investment Management | Revenues from Investment Management | 19,398 | | | 31,322 | |
| Total revenues | Total revenues | 1,331,524 | | | 1,209,319 | |
| | Net income from Real Estate attributable to W. P. Carey | Net income from Real Estate attributable to W. P. Carey | 384,766 | | | 459,512 | |
| Net income (loss) from Investment Management attributable to W. P. Carey | 25,222 | | | (4,153) | |
| Net income from Real Estate attributable to W. P. Carey | |
| Net income from Real Estate attributable to W. P. Carey | |
| Net income from Investment Management attributable to W. P. Carey | |
| Net income attributable to W. P. Carey | Net income attributable to W. P. Carey | 409,988 | | | 455,359 | |
| | Dividends declared | Dividends declared | 781,626 | | | 732,020 | |
| Dividends declared | |
| Dividends declared | |
| | Net cash provided by operating activities | Net cash provided by operating activities | 926,479 | | | 801,538 | |
| Net cash provided by operating activities | |
| Net cash provided by operating activities | |
| Net cash used in investing activities | Net cash used in investing activities | (1,566,727) | | | (539,932) | |
| Net cash provided by (used in) financing activities | 557,048 | | | (210,713) | |
| Net cash provided by financing activities | |
| Supplemental financial measures (a): | |
Supplemental financial measures (a): | |
Supplemental financial measures (a): | Supplemental financial measures (a): | | | | | |
| Adjusted funds from operations attributable to W. P. Carey (AFFO) — Real Estate | Adjusted funds from operations attributable to W. P. Carey (AFFO) — Real Estate | 896,139 | | | 804,175 | |
| Adjusted funds from operations attributable to W. P. Carey (AFFO) — Investment Management | Adjusted funds from operations attributable to W. P. Carey (AFFO) — Investment Management | 25,352 | | | 24,911 | |
| Adjusted funds from operations attributable to W. P. Carey (AFFO) | Adjusted funds from operations attributable to W. P. Carey (AFFO) | 921,491 | | | 829,086 | |
| | Diluted weighted-average shares outstanding | Diluted weighted-average shares outstanding | 183,127,098 | | | 174,839,428 | |
| Diluted weighted-average shares outstanding | |
| Diluted weighted-average shares outstanding | |
__________
(a)We consider Adjusted funds from operations (“AFFO”), a supplemental measure that is not defined by U.S. generally accepted accounting principles (“GAAP”) (a “non-GAAP measure”), to be an important measure in the evaluation of our operating performance. See Supplemental Financial Measures below for our definition of this non-GAAP measure and a reconciliation to its most directly comparable GAAP measure.
Revenues
Real Estate revenue increased in 20212023 as compared to 2020,2022, primarily due to higher lease revenues (substantially as a result of property acquisition activity and rent escalations, as well as the strengthening euronet-leased properties we acquired in the CPA:18 Merger on August 1, 2022 (Note 4)) and British pound sterling,higher operating property revenues (primarily from the operating properties we acquired in the CPA:18 Merger on August 1, 2022 and the positive impact on rent collections as businesses recovered12 hotel properties that converted from net-lease to operating properties during the effectsfirst quarter of the COVID-19 pandemic,2023), partially offset by property dispositions)the impact of the Spin-Off (Note 3) and higher lease termination andlower other lease-related income (Note 4). Investment Management revenue decreased in 2021 as compared to 2020, primarily due to lower asset management revenue and reimbursable costs earned from the Managed Programs following the termination of our advisory agreements in connection with the closing of the CWI 1 and CWI 2 Merger on April 13, 2020 (Note 36).
Net Income Attributable to W. P. Carey
Net income attributable to W. P. Carey increased in 2023 as compared to 2022. Net income from Real Estate attributable to W. P. Carey decreased in 2021 as compared to 2020,increased primarily due to a higher lossgain on extinguishmentsale of debtreal estate and the impact of real estate acquisitions (including from properties acquired in the CPA:18 Merger on August 1, 2022) (Note 6, Note 17), partially offset by higher interest expense, non-cash unrealized gains recognized on certain investments in equity securities during the prior year (Note 10), a lower aggregate gain on sale of real estatehigher impairment charges and allowance for credit losses (Note 1510), and a deferred tax benefit as a resultthe impact of the release of a deferred tax liability relating to our investment in shares of Lineage Logistics during the prior yearSpin-Off (Note 14), partially offset by the impact of real estate acquisitions, the positive impact on rent collections as businesses recovered from the effects of the COVID-19 pandemic, and lower interest expense. In addition, we recognized non-cash unrealized gains on our investment in shares of Lineage Logistics during both the current and prior year (Note 83). Net income from Investment Management attributable to W. P. Carey increased in 2021 as compared to 2020,decreased primarily due to other-than temporarythe cessation of fees and distributions previously earned from CPA:18 – Global prior to the CPA:18 Merger. We also recognized an impairment chargescharge on goodwill within our equity method investments in CWI 1 and CWI 2Investment Management segment during the prior year period (Note 8), partially offset by. In addition, we recognized a non-cash net gain recognized on change in control of interests during the redemption of our special general partner interests in CWI 1 and CWI 2prior year in connection with the WLT management internalization in April 2020CPA:18 Merger (Note 34), as well as the cessation of revenues previously earned from CWI 1 and CWI 2..
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| W. P. Carey 20212023 10-K – 2427 |
AFFO
AFFO increased in 20212023 as compared to 2020,2022, primarily due to higher lease revenues from net investment activity lowerand rent escalations, partially offset by higher interest expense and the positive impact on rent collections as businesses recovered from the effects of the COVID-19 pandemic, partially offset by lower Investment Management revenues due to the WLT management internalization in April 2020Spin-Off (Note 1, Note 3).
Portfolio Overview
Our portfolio is comprised of operationally-critical, commercial real estate assets net leased to tenants located primarily in the United States and Northern and Western Europe. We invest in high-quality single tenant industrial, warehouse, office, retail, and self-storage (net lease) properties subject to long-term leases with built-in rent escalators. Portfolio information is provided on a pro rata basis, unless otherwise noted below, to better illustrate the economic impact of our various net-leased jointly owned investments. See Terms and Definitions below for a description of pro rata amounts.
Portfolio Summary
| | | | | | | | | | | |
| As of December 31, |
| 2021 | | 2020 |
| ABR (in thousands) | $ | 1,247,764 | | | $ | 1,183,217 | |
| Number of net-leased properties | 1,304 | | | 1,243 | |
Number of operating properties (a) | 20 | | | 20 | |
| Number of tenants (net-leased properties) | 352 | | | 350 | |
| Total square footage (net-leased properties, in thousands) | 155,674 | | | 144,259 | |
| Occupancy (net-leased properties) | 98.5 | % | | 98.5 | % |
| Weighted-average lease term (net-leased properties, in years) | 10.8 | | | 10.6 | |
Number of countries (b) | 24 | | | 25 | |
| Total assets (in thousands) | $ | 15,480,630 | | | $ | 14,707,636 | |
| Net investments in real estate (in thousands) | 13,037,369 | | | 12,386,572 | |
| | | | | | | | | | | |
| As of December 31, |
| Net-leased Properties | 2023 | | 2022 |
| ABR (in thousands) | $ | 1,339,352 | | | $ | 1,381,899 | |
| Number of net-leased properties | 1,424 | | | 1,449 | |
| Number of tenants | 336 | | | 392 | |
| Total square footage (in thousands) | 172,668 | | | 175,957 | |
| Occupancy | 98.1 | % | | 98.8 | % |
| Weighted-average lease term (in years) | 11.7 | | | 10.8 | |
| | | |
| Operating Properties | | | |
| Number of operating properties: | 96 | | | 87 | |
| Number of self-storage operating properties | 89 | | | 84 | |
Number of hotel operating properties (a) | 5 | | | 1 | |
| Number of student housing operating properties | 2 | | | 2 | |
| Occupancy (self-storage operating properties) | 90.3 | % | | 91.0 | % |
| | | |
| Number of countries | 26 | | | 26 | |
| Total assets (in thousands) | $ | 17,976,783 | | | $ | 18,102,035 | |
| Net investments in real estate (in thousands) | 14,913,899 | | | 15,488,898 | |
| | Years Ended December 31, |
| 2021 | | 2020 |
Acquisition volume (in millions) (c) | $ | 1,627.9 | | | $ | 661.4 | |
| Years Ended December 31, | | | Years Ended December 31, |
| 2023 | | | 2023 | | 2022 |
Acquisition volume (in millions) (b) | |
| Construction projects completed (in millions) | Construction projects completed (in millions) | 88.2 | | | 171.2 | |
| Average U.S. dollar/euro exchange rate | Average U.S. dollar/euro exchange rate | 1.1830 | | | 1.1410 | |
| Average U.S. dollar/British pound sterling exchange rate | Average U.S. dollar/British pound sterling exchange rate | 1.3755 | | | 1.2834 | |
__________
(a)At bothDuring the first quarter of 2023, the master lease expired on certain hotel properties previously classified as net-leased properties, which converted to operating properties. As a result, during the year ended December 31, 2021 and 2020,2023, we reclassified 12 consolidated hotel properties from net leases to operating properties consisted(Note 6). We sold eight of 19 self-storagethese hotel operating properties (of which we consolidated ten, with an average occupancyduring the third and fourth quarters of 95.3% at December 31, 2021), and one hotel property, with an average occupancy of 45.2%2023 (Note 17). (b)Amounts for the year ended December 31, 2021 (due to the adverse effect2023 and 2022 include $38.2 million and $89.5 million, respectively, of the COVID-19 pandemic).
(b)We sold our only remaining investment in Belgium during 2021.
(c)Amountfunding for the year ended December 31, 2021 includes $217.0 million of sale-leasebacks classified as loans receivablea construction loan (Note 59). Amount for the year ended December 31, 20212022 excludes properties acquired in the CPA:18 Merger (Note 4). Amount for the year ended December 31, 2022 includes $103.7$19.8 million of funding for a construction loansale-leasebacks classified as loans receivable (Note 7).
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| W. P. Carey 20212023 10-K – 2528 |
Net-Leased Portfolio
The tables below represent information about our net-leased portfolio at December 31, 20212023 on a pro rata basis and, accordingly, exclude all operating properties. See Terms and Definitions below for a description of pro rata amounts and ABR.
Top Ten Tenants by ABR
(dollars in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Tenant/Lease Guarantor | | Description | | Number of Properties | | ABR | | ABR Percent | | Weighted-Average Lease Term (Years) |
| U-Haul Moving Partners Inc. and Mercury Partners, LP | | Net lease self-storage properties in the U.S. | | 78 | | | $ | 38,751 | | | 3.1 | % | | 2.3 | |
State of Andalucía (a) | | Government office properties in Spain | | 70 | | | 29,490 | | | 2.4 | % | | 13.0 | |
Hellweg Die Profi-Baumärkte GmbH & Co. KG (a) | | Do-it-yourself retail properties in Germany | | 35 | | | 28,388 | | | 2.3 | % | | 15.2 | |
Metro Cash & Carry Italia S.p.A. (a) | | Business-to-business wholesale stores in Italy and Germany | | 20 | | | 28,087 | | | 2.2 | % | | 6.8 | |
Pendragon PLC (a) | | Automotive dealerships in the United Kingdom | | 69 | | | 23,852 | | | 1.9 | % | | 8.4 | |
OBI Group (a) | | Do-it-yourself retail properties in Poland | | 26 | | | 22,635 | | | 1.8 | % | | 8.4 | |
| Marriott Corporation | | Net lease hotel properties in the U.S. | | 18 | | | 21,100 | | | 1.7 | % | | 2.0 | |
| Extra Space Storage, Inc. | | Net lease self-storage properties in the U.S. | | 27 | | | 20,688 | | | 1.6 | % | | 22.3 | |
| Advance Auto Parts, Inc. | | Distribution facilities in the U.S. | | 29 | | | 19,851 | | | 1.6 | % | | 11.1 | |
| Nord Anglia Education, Inc. | | K-12 private schools in the U.S. | | 3 | | | 19,473 | | | 1.6 | % | | 21.7 | |
| Total | | | | 375 | | | $ | 252,315 | | | 20.2 | % | | 10.4 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Tenant/Lease Guarantor | | Description | | Number of Properties | | ABR | | ABR Percent | | Weighted-Average Lease Term (Years) |
U-Haul Moving Partners Inc. and Mercury Partners, LP (a) | | Net lease self-storage properties in the U.S. | | 78 | | | $ | 38,751 | | | 2.9 | % | | 0.2 | |
State of Andalusia (b) (c) | | Government office properties in Spain | | 70 | | | 32,539 | | | 2.4 | % | | 11.0 | |
Apotex Pharmaceutical Holdings Inc. (d) | | Pharmaceutical R&D and advanced manufacturing properties in Canada | | 11 | | | 31,528 | | | 2.3 | % | | 19.2 | |
Metro Cash & Carry Italia S.p.A. (b) | | Business-to-business wholesale stores in Italy and Germany | | 20 | | | 30,352 | | | 2.3 | % | | 4.5 | |
Hellweg Die Profi-Baumärkte GmbH & Co. KG (b) | | Do-it-yourself retail properties in Germany | | 35 | | | 30,182 | | | 2.2 | % | | 13.2 | |
| Extra Space Storage, Inc. | | Net lease self-storage properties in the U.S. | | 27 | | | 25,036 | | | 1.9 | % | | 20.3 | |
OBI Group (b) | | Do-it-yourself retail properties in Poland | | 26 | | | 24,857 | | | 1.9 | % | | 7.4 | |
ABC Technologies Holdings Inc. (d) (e) | | Automotive component manufacturing properties in North America | | 23 | | | 24,251 | | | 1.8 | % | | 19.3 | |
Fortenova Grupa d.d. (b) | | Grocery stores and warehouses in Croatia | | 19 | | | 22,367 | | | 1.7 | % | | 10.3 | |
| Nord Anglia Education, Inc. | | K-12 private schools in the U.S. | | 3 | | | 22,245 | | | 1.7 | % | | 19.7 | |
| Total | | | | 312 | | | $ | 282,108 | | | 21.1 | % | | 11.8 | |
__________
(a)Mercury Partners, LP (a related party of U-Haul Moving Partners Inc.) provided notice that it intends to exercise its option to repurchase the 78 properties it is leasing during the first quarter of 2024 (Note 7). (b)ABR amounts are subject to fluctuations in foreign currency exchange rates.
(c)In January 2024, we sold this portfolio of properties (Note 19). (d)ABR from these properties is denominated in U.S. dollars.
(e)Of the 23 properties leased to ABC Technologies Holdings Inc., nine are located in Canada, eight are located in the United States, and six are located in Mexico.
| | | | | |
| W. P. Carey 20212023 10-K – 2629 |
Portfolio Diversification by Geography
(in thousands, except percentages)
| | Region | Region | | ABR | | ABR Percent | | Square Footage (a) | | Square Footage Percent | Region | | ABR | | ABR Percent | | Square Footage (a) | | Square Footage Percent |
| United States | United States | | | | | | | | |
| South | South | |
| South | |
| South | |
| Texas | |
| Texas | |
| Texas | Texas | | $ | 103,805 | | | 8.3 | % | | 11,869 | | | 7.6 | % | | $ | 86,296 | | | 6.4 | | 6.4 | % | | 11,274 | | | 6.5 | | 6.5 | % |
| Florida | Florida | | 51,231 | | | 4.1 | % | | 4,460 | | | 2.9 | % | Florida | | 42,710 | | | 3.2 | | 3.2 | % | | 3,816 | | | 2.2 | | 2.2 | % |
| Georgia | Georgia | | 23,875 | | | 1.9 | % | | 3,512 | | | 2.3 | % | Georgia | | 27,542 | | | 2.1 | | 2.1 | % | | 4,333 | | | 2.5 | | 2.5 | % |
| Tennessee | Tennessee | | 22,057 | | | 1.8 | % | | 3,291 | | | 2.1 | % | Tennessee | | 24,161 | | | 1.8 | | 1.8 | % | | 3,921 | | | 2.3 | | 2.3 | % |
| Alabama | Alabama | | 18,456 | | | 1.5 | % | | 3,085 | | | 2.0 | % | Alabama | | 22,270 | | | 1.7 | | 1.7 | % | | 3,353 | | | 1.9 | | 1.9 | % |
Other (b) | Other (b) | | 15,675 | | | 1.2 | % | | 2,356 | | | 1.5 | % | Other (b) | | 16,288 | | | 1.2 | | 1.2 | % | | 2,402 | | | 1.4 | | 1.4 | % |
| Total South | Total South | | 235,099 | | | 18.8 | % | | 28,573 | | | 18.4 | % | Total South | | 219,267 | | | 16.4 | | 16.4 | % | | 29,099 | | | 16.8 | | 16.8 | % |
| Midwest | Midwest | | | | | | | | |
| Illinois | Illinois | | 59,840 | | | 4.8 | % | | 8,328 | | | 5.3 | % |
| Minnesota | | 32,138 | | | 2.6 | % | | 3,225 | | | 2.1 | % |
| Illinois | |
| Illinois | | | 57,057 | | | 4.3 | % | | 10,164 | | | 5.9 | % |
| Ohio | | Ohio | | 33,767 | | | 2.5 | % | | 6,947 | | | 4.0 | % |
| Indiana | Indiana | | 26,940 | | | 2.1 | % | | 4,734 | | | 3.0 | % | Indiana | | 29,727 | | | 2.2 | | 2.2 | % | | 5,137 | | | 3.0 | | 3.0 | % |
| Ohio | | 18,306 | | | 1.5 | % | | 3,921 | | | 2.5 | % |
| Michigan | | Michigan | | 24,103 | | | 1.8 | % | | 4,241 | | | 2.4 | % |
| Wisconsin | Wisconsin | | 16,086 | | | 1.3 | % | | 3,245 | | | 2.1 | % | Wisconsin | | 16,624 | | | 1.2 | | 1.2 | % | | 3,074 | | | 1.8 | | 1.8 | % |
| Michigan | | 15,076 | | | 1.2 | % | | 2,599 | | | 1.7 | % |
Other (b) | Other (b) | | 32,401 | | | 2.6 | % | | 5,073 | | | 3.3 | % | Other (b) | | 52,296 | | | 3.9 | | 3.9 | % | | 7,713 | | | 4.5 | | 4.5 | % |
| Total Midwest | Total Midwest | | 200,787 | | | 16.1 | % | | 31,125 | | | 20.0 | % | Total Midwest | | 213,574 | | | 15.9 | | 15.9 | % | | 37,276 | | | 21.6 | | 21.6 | % |
| East | East | | | | | | | | |
| North Carolina | North Carolina | | 35,813 | | | 2.9 | % | | 8,098 | | | 5.2 | % |
| North Carolina | |
| North Carolina | | | 35,530 | | | 2.7 | % | | 8,156 | | | 4.7 | % |
| Pennsylvania | Pennsylvania | | 30,790 | | | 2.4 | % | | 3,673 | | | 2.4 | % | Pennsylvania | | 30,459 | | | 2.3 | | 2.3 | % | | 3,374 | | | 2.0 | | 2.0 | % |
| New Jersey | | 22,809 | | | 1.8 | % | | 1,235 | | | 0.8 | % |
| Massachusetts | | 22,187 | | | 1.8 | % | | 1,407 | | | 0.9 | % |
| New York | New York | | 17,630 | | | 1.4 | % | | 2,221 | | | 1.4 | % | New York | | 20,556 | | | 1.5 | | 1.5 | % | | 2,262 | | | 1.3 | | 1.3 | % |
| South Carolina | South Carolina | | 14,840 | | | 1.2 | % | | 4,087 | | | 2.6 | % | South Carolina | | 19,208 | | | 1.4 | | 1.4 | % | | 4,952 | | | 2.9 | | 2.9 | % |
| Kentucky | | Kentucky | | 18,130 | | | 1.4 | % | | 2,983 | | | 1.7 | % |
| Massachusetts | | Massachusetts | | 16,836 | | | 1.3 | % | | 1,255 | | | 0.7 | % |
| New Jersey | | New Jersey | | 13,680 | | | 1.0 | % | | 797 | | | 0.5 | % |
| Virginia | | Virginia | | 13,623 | | | 1.0 | % | | 1,761 | | | 1.0 | % |
Other (b) | Other (b) | | 47,109 | | | 3.8 | % | | 8,009 | | | 5.1 | % | Other (b) | | 24,145 | | | 1.8 | | 1.8 | % | | 3,799 | | | 2.2 | | 2.2 | % |
| Total East | Total East | | 191,178 | | | 15.3 | % | | 28,730 | | | 18.4 | % | Total East | | 192,167 | | | 14.4 | | 14.4 | % | | 29,339 | | | 17.0 | | 17.0 | % |
| West | West | | | | | | | | |
| California | California | | 70,052 | | | 5.6 | % | | 6,537 | | | 4.2 | % |
| California | |
| California | | | 60,741 | | | 4.5 | % | | 5,889 | | | 3.4 | % |
| Arizona | Arizona | | 29,784 | | | 2.4 | % | | 3,365 | | | 2.1 | % | Arizona | | 20,133 | | | 1.5 | | 1.5 | % | | 2,664 | | | 1.5 | | 1.5 | % |
| Utah | | Utah | | 14,522 | | | 1.1 | % | | 2,021 | | | 1.2 | % |
Other (b) | Other (b) | | 60,892 | | | 4.9 | % | | 6,333 | | | 4.1 | % | Other (b) | | 53,631 | | | 4.0 | | 4.0 | % | | 4,776 | | | 2.8 | | 2.8 | % |
| Total West | Total West | | 160,728 | | | 12.9 | % | | 16,235 | | | 10.4 | % | Total West | | 149,027 | | | 11.1 | | 11.1 | % | | 15,350 | | | 8.9 | | 8.9 | % |
| United States Total | United States Total | | 787,792 | | | 63.1 | % | | 104,663 | | | 67.2 | % | United States Total | | 774,035 | | | 57.8 | | 57.8 | % | | 111,064 | | | 64.3 | | 64.3 | % |
| International | International | | | | | | | | |
| United Kingdom | | 61,843 | | | 5.0 | % | | 5,099 | | | 3.3 | % |
| Germany | Germany | | 61,465 | | | 4.9 | % | | 6,440 | | | 4.1 | % |
| Poland | | 58,799 | | | 4.7 | % | | 7,959 | | | 5.1 | % |
| Germany | |
| Germany | | | 73,065 | | | 5.5 | % | | 6,535 | | | 3.8 | % |
| Spain | Spain | | 56,099 | | | 4.5 | % | | 4,708 | | | 3.0 | % | Spain | | 68,077 | | | 5.1 | | 5.1 | % | | 5,862 | | | 3.4 | | 3.4 | % |
| The Netherlands | The Netherlands | | 56,044 | | | 4.5 | % | | 6,948 | | | 4.5 | % | The Netherlands | | 62,775 | | | 4.7 | | 4.7 | % | | 7,054 | | | 4.1 | | 4.1 | % |
| Poland | | Poland | | 59,988 | | | 4.5 | % | | 8,158 | | | 4.7 | % |
Canada (c) | | Canada (c) | | 50,861 | | | 3.8 | % | | 5,087 | | | 2.9 | % |
| United Kingdom | | United Kingdom | | 48,505 | | | 3.6 | % | | 4,432 | | | 2.6 | % |
| Italy | Italy | | 26,364 | | | 2.1 | % | | 2,386 | | | 1.5 | % | Italy | | 42,238 | | | 3.1 | | 3.1 | % | | 5,381 | | | 3.1 | | 3.1 | % |
| France | | 20,328 | | | 1.6 | % | | 1,685 | | | 1.1 | % |
| Denmark | Denmark | | 17,724 | | | 1.4 | % | | 2,559 | | | 1.7 | % | Denmark | | 25,053 | | | 1.9 | | 1.9 | % | | 3,002 | | | 1.7 | | 1.7 | % |
| Croatia | Croatia | | 16,901 | | | 1.4 | % | | 1,726 | | | 1.1 | % | Croatia | | 23,200 | | | 1.7 | | 1.7 | % | | 2,063 | | | 1.2 | | 1.2 | % |
| Canada | | 14,084 | | | 1.1 | % | | 2,213 | | | 1.4 | % |
Other (c) | | 70,321 | | | 5.7 | % | | 9,288 | | | 6.0 | % |
| France | | France | | 21,745 | | | 1.6 | % | | 1,679 | | | 1.0 | % |
| Lithuania | | Lithuania | | 13,569 | | | 1.0 | % | | 1,640 | | | 1.0 | % |
Other (d) | | Other (d) | | 76,241 | | | 5.7 | % | | 10,711 | | | 6.2 | % |
| International Total | International Total | | 459,972 | | | 36.9 | % | | 51,011 | | | 32.8 | % | International Total | | 565,317 | | | 42.2 | | 42.2 | % | | 61,604 | | | 35.7 | | 35.7 | % |
| Total | Total | | $ | 1,247,764 | | | 100.0 | % | | 155,674 | | | 100.0 | % | Total | | $ | 1,339,352 | | | 100.0 | | 100.0 | % | | 172,668 | | | 100.0 | | 100.0 | % |
| | | | | |
| W. P. Carey 20212023 10-K – 2730 |
Portfolio Diversification by Property Type
(in thousands, except percentages)
| | Property Type | Property Type | | ABR | | ABR Percent | | Square Footage (a) | | Square Footage Percent | Property Type | | ABR | | ABR Percent | | Square Footage (a) | | Square Footage Percent |
| Industrial | Industrial | | $ | 322,284 | | | 25.8 | % | | 54,221 | | | 34.8 | % | Industrial | | $ | 432,256 | | | 32.3 | | 32.3 | % | | 68,962 | | | 39.9 | | 39.9 | % |
| Warehouse | Warehouse | | 297,942 | | | 23.9 | % | | 54,793 | | | 35.2 | % | Warehouse | | 353,781 | | | 26.4 | | 26.4 | % | | 64,724 | | | 37.5 | | 37.5 | % |
Retail (e) | | Retail (e) | | 278,526 | | | 20.8 | % | | 21,124 | | | 12.2 | % |
| Office | Office | | 243,741 | | | 19.5 | % | | 16,151 | | | 10.4 | % | Office | | 72,067 | | | 5.4 | | 5.4 | % | | 5,202 | | | 3.0 | | 3.0 | % |
Retail (d) | | 220,016 | | | 17.6 | % | | 19,139 | | | 12.3 | % |
| Self Storage (net lease) | Self Storage (net lease) | | 59,438 | | | 4.8 | % | | 5,810 | | | 3.7 | % | Self Storage (net lease) | | 63,786 | | | 4.7 | | 4.7 | % | | 5,810 | | | 3.4 | | 3.4 | % |
Other (e) | | 104,343 | | | 8.4 | % | | 5,560 | | | 3.6 | % |
Other (f) | | Other (f) | | 138,936 | | | 10.4 | % | | 6,846 | | | 4.0 | % |
| Total | Total | | $ | 1,247,764 | | | 100.0 | % | | 155,674 | | | 100.0 | % | Total | | $ | 1,339,352 | | | 100.0 | | 100.0 | % | | 172,668 | | | 100.0 | | 100.0 | % |
__________
(a)Includes square footage for any vacant properties.
(b)Other properties within South include assets in Louisiana, Arkansas, Oklahoma, and Mississippi. Other properties within Midwest include assets in Minnesota, Iowa, Kansas, Missouri, Kansas, Nebraska, Iowa, NorthSouth Dakota, and SouthNorth Dakota. Other properties within East include assets in Virginia, Kentucky, Maryland, Connecticut, West Virginia, New Hampshire, and Maine. Other properties within West include assets in Colorado, Oregon, Colorado, Utah,Nevada, Washington, Nevada, Hawaii, Idaho, Montana, Wyoming, and New Mexico, Idaho, Wyoming, Montana, and Alaska.Mexico.
(c)$46.8 million (92.1%) of ABR from properties in Canada is denominated in U.S. dollars, with the balance denominated in Canadian dollars.
(d)Includes assets in Lithuania,Mexico, Belgium, Finland, Hungary, Norway, Mexico, Hungary,Mauritius, Slovakia, Portugal, the Czech Republic, Austria, Sweden, Slovakia,Latvia, Japan, Latvia, and Estonia.
(d)(e)Includes automotive dealerships.
(e)(f)Includes ABR from tenants with the following property types: education facility, specialty, laboratory, hotel (net lease), laboratory, fitness facility, theater, student housing (net lease), restaurant,research and development, and land.
| | | | | |
| W. P. Carey 20212023 10-K – 2831 |
Portfolio Diversification by Tenant Industry
(in thousands, except percentages)
| | Industry Type | Industry Type | | ABR | | ABR Percent | | Square Footage | | Square Footage Percent | Industry Type | | ABR | | ABR Percent | | Square Footage | | Square Footage Percent |
Retail Stores (a) | Retail Stores (a) | | $ | 272,627 | | | 21.9 | % | | 34,040 | | | 21.9 | % | Retail Stores (a) | | $ | 306,553 | | | 22.9 | | 22.9 | % | | 37,151 | | | 21.5 | | 21.5 | % |
| Consumer Services | Consumer Services | | 102,202 | | | 8.2 | % | | 7,850 | | | 5.0 | % | Consumer Services | | 127,118 | | | 9.5 | | 9.5 | % | | 8,288 | | | 4.8 | | 4.8 | % |
| Beverage and Food | | Beverage and Food | | 110,599 | | | 8.3 | % | | 15,759 | | | 9.1 | % |
| Automotive | Automotive | | 81,158 | | | 6.5 | % | | 12,310 | | | 7.9 | % | Automotive | | 95,700 | | | 7.1 | | 7.1 | % | | 14,502 | | | 8.4 | | 8.4 | % |
| Beverage and Food | | 78,613 | | | 6.3 | % | | 10,182 | | | 6.5 | % |
| Grocery | Grocery | | 72,546 | | | 5.8 | % | | 7,714 | | | 5.0 | % | Grocery | | 83,227 | | | 6.2 | | 6.2 | % | | 7,406 | | | 4.3 | | 4.3 | % |
| Healthcare and Pharmaceuticals | | Healthcare and Pharmaceuticals | | 72,079 | | | 5.4 | % | | 6,656 | | | 3.9 | % |
| Cargo Transportation | Cargo Transportation | | 63,845 | | | 5.1 | % | | 9,491 | | | 6.1 | % | Cargo Transportation | | 60,993 | | | 4.6 | | 4.6 | % | | 9,122 | | | 5.3 | | 5.3 | % |
| Healthcare and Pharmaceuticals | | 60,465 | | | 4.8 | % | | 5,372 | | | 3.5 | % |
| Construction and Building | | 50,279 | | | 4.0 | % | | 9,005 | | | 5.8 | % |
| Business Services | | 47,045 | | | 3.8 | % | | 4,018 | | | 2.6 | % |
| Containers, Packaging, and Glass | | Containers, Packaging, and Glass | | 49,844 | | | 3.7 | % | | 8,580 | | | 5.0 | % |
| Capital Equipment | Capital Equipment | | 44,766 | | | 3.6 | % | | 7,387 | | | 4.7 | % | Capital Equipment | | 49,300 | | | 3.7 | | 3.7 | % | | 8,053 | | | 4.7 | | 4.7 | % |
| Durable Consumer Goods | Durable Consumer Goods | | 44,001 | | | 3.5 | % | | 9,951 | | | 6.4 | % | Durable Consumer Goods | | 47,361 | | | 3.5 | | 3.5 | % | | 10,240 | | | 5.9 | | 5.9 | % |
| Construction and Building | | Construction and Building | | 47,206 | | | 3.5 | % | | 9,036 | | | 5.2 | % |
| Sovereign and Public Finance | | Sovereign and Public Finance | | 43,424 | | | 3.2 | % | | 3,368 | | | 2.0 | % |
| Hotel and Leisure | Hotel and Leisure | | 41,141 | | | 3.3 | % | | 2,214 | | | 1.4 | % | Hotel and Leisure | | 42,030 | | | 3.1 | | 3.1 | % | | 2,053 | | | 1.2 | | 1.2 | % |
| Sovereign and Public Finance | | 39,327 | | | 3.2 | % | | 3,241 | | | 2.1 | % |
| Containers, Packaging, and Glass | | 38,627 | | | 3.1 | % | | 6,538 | | | 4.2 | % |
| Chemicals, Plastics, and Rubber | | Chemicals, Plastics, and Rubber | | 32,779 | | | 2.5 | % | | 5,929 | | | 3.4 | % |
| Non-Durable Consumer Goods | | Non-Durable Consumer Goods | | 32,680 | | | 2.4 | % | | 6,805 | | | 3.9 | % |
| Business Services | | Business Services | | 28,054 | | | 2.1 | % | | 2,983 | | | 1.7 | % |
| High Tech Industries | High Tech Industries | | 31,197 | | | 2.5 | % | | 3,315 | | | 2.1 | % | High Tech Industries | | 23,614 | | | 1.8 | | 1.8 | % | | 2,624 | | | 1.5 | | 1.5 | % |
| Insurance | | 25,764 | | | 2.1 | % | | 1,749 | | | 1.1 | % |
| Banking | | 19,935 | | | 1.6 | % | | 1,247 | | | 0.8 | % |
| Metals | Metals | | 16,203 | | | 1.3 | % | | 3,119 | | | 2.0 | % | Metals | | 22,765 | | | 1.7 | | 1.7 | % | | 4,347 | | | 2.5 | | 2.5 | % |
| Non-Durable Consumer Goods | | 15,696 | | | 1.3 | % | | 5,250 | | | 3.4 | % |
| Aerospace and Defense | | 15,459 | | | 1.2 | % | | 1,357 | | | 0.9 | % |
| Telecommunications | Telecommunications | | 15,274 | | | 1.2 | % | | 1,479 | | | 0.9 | % | Telecommunications | | 14,030 | | | 1.1 | | 1.1 | % | | 1,500 | | | 0.9 | | 0.9 | % |
| Chemicals, Plastics, and Rubber | | 14,282 | | | 1.1 | % | | 1,853 | | | 1.2 | % |
| Media: Broadcasting and Subscription | | 13,120 | | | 1.1 | % | | 784 | | | 0.5 | % |
| Wholesale | | 12,758 | | | 1.0 | % | | 2,005 | | | 1.3 | % |
Other (b) | Other (b) | | 31,434 | | | 2.5 | % | | 4,203 | | | 2.7 | % | Other (b) | | 49,996 | | | 3.7 | | 3.7 | % | | 8,266 | | | 4.8 | | 4.8 | % |
| Total | Total | | $ | 1,247,764 | | | 100.0 | % | | 155,674 | | | 100.0 | % | Total | | $ | 1,339,352 | | | 100.0 | | 100.0 | % | | 172,668 | | | 100.0 | | 100.0 | % |
__________
(a)Includes automotive dealerships.
(b)Includes ABR from tenants in the following industries: wholesale, aerospace and defense, insurance, banking, environmental industries, oil and gas, media: advertising, printing, and publishing, oil and gas, environmental industries, consumer transportation, forest products and paper, real estate, and electricity. Also includes square footage for vacant properties.
| | | | | |
| W. P. Carey 20212023 10-K – 2932 |
Lease Expirations
(dollars and square footage in thousands)
| Year of Lease Expiration (a) | Year of Lease Expiration (a) | | Number of Leases Expiring | | Number of Tenants with Leases Expiring | | ABR | | ABR Percent | | Square Footage | | Square Footage Percent | Year of Lease Expiration (a) | | Number of Leases Expiring | | Number of Tenants with Leases Expiring | | ABR | | ABR Percent | | Square Footage | | Square Footage Percent |
| 2022 | | 25 | | | 25 | | | $ | 29,669 | | | 2.4 | % | | 1,982 | | | 1.3 | % |
| 2023 | | 31 | | | 28 | | | 46,810 | | | 3.8 | % | | 5,405 | | | 3.5 | % |
2024 (b) | 2024 (b) | | 45 | | | 39 | | | 96,501 | | | 7.7 | % | | 12,403 | | | 8.0 | % | 2024 (b) | | 29 | | | 23 | | 23 | | | $ | | $ | 60,324 | | | 4.5 | | 4.5 | % | | 7,886 | | | 4.6 | | 4.6 | % |
| 2025 | 2025 | | 60 | | | 29 | | | 63,961 | | | 5.1 | % | | 7,417 | | | 4.8 | % | 2025 | | 36 | | | 17 | | 17 | | | 45,090 | | 45,090 | | | 3.4 | | 3.4 | % | | 5,767 | | | 3.3 | | 3.3 | % |
| 2026 | 2026 | | 40 | | | 29 | | | 57,615 | | | 4.6 | % | | 8,219 | | | 5.3 | % | 2026 | | 37 | | | 28 | | 28 | | | 59,834 | | 59,834 | | | 4.5 | | 4.5 | % | | 8,502 | | | 4.9 | | 4.9 | % |
| 2027 | 2027 | | 56 | | | 32 | | | 83,964 | | | 6.7 | % | | 8,847 | | | 5.7 | % | 2027 | | 43 | | | 26 | | 26 | | | 62,571 | | 62,571 | | | 4.7 | | 4.7 | % | | 7,149 | | | 4.1 | | 4.1 | % |
| 2028 | 2028 | | 40 | | | 22 | | | 60,495 | | | 4.8 | % | | 4,568 | | | 2.9 | % | 2028 | | 41 | | | 25 | | 25 | | | 57,892 | | 57,892 | | | 4.3 | | 4.3 | % | | 4,669 | | | 2.7 | | 2.7 | % |
| 2029 | 2029 | | 50 | | | 23 | | | 55,310 | | | 4.4 | % | | 6,702 | | | 4.3 | % | 2029 | | 56 | | | 29 | | 29 | | | 75,809 | | 75,809 | | | 5.7 | | 5.7 | % | | 9,218 | | | 5.3 | | 5.3 | % |
| 2030 | 2030 | | 27 | | | 23 | | | 65,876 | | | 5.3 | % | | 5,642 | | | 3.6 | % | 2030 | | 29 | | | 26 | | 26 | | | 36,051 | | 36,051 | | | 2.7 | | 2.7 | % | | 3,941 | | | 2.3 | | 2.3 | % |
| 2031 | 2031 | | 66 | | | 16 | | | 73,930 | | | 5.9 | % | | 8,642 | | | 5.5 | % | 2031 | | 35 | | | 19 | | 19 | | | 66,987 | | 66,987 | | | 5.0 | | 5.0 | % | | 8,345 | | | 4.8 | | 4.8 | % |
| 2032 | 2032 | | 38 | | | 18 | | | 53,114 | | | 4.3 | % | | 7,098 | | | 4.6 | % | 2032 | | 38 | | | 19 | | 19 | | | 41,613 | | 41,613 | | | 3.1 | | 3.1 | % | | 5,799 | | | 3.4 | | 3.4 | % |
| 2033 | 2033 | | 28 | | | 22 | | | 77,386 | | | 6.2 | % | | 10,159 | | | 6.5 | % | 2033 | | 30 | | | 23 | | 23 | | | 76,477 | | 76,477 | | | 5.7 | | 5.7 | % | | 10,797 | | | 6.3 | | 6.3 | % |
| 2034 | | 47 | | | 15 | | | 74,503 | | | 6.0 | % | | 7,765 | | | 5.0 | % |
2034 (c) | | 2034 (c) | | 50 | | | 19 | | | 94,644 | | | 7.1 | % | | 9,188 | | | 5.3 | % |
| 2035 | 2035 | | 14 | | | 14 | | | 26,944 | | | 2.2 | % | | 4,906 | | | 3.1 | % | 2035 | | 19 | | | 16 | | 16 | | | 35,500 | | 35,500 | | | 2.6 | | 2.6 | % | | 5,885 | | | 3.4 | | 3.4 | % |
| Thereafter (>2035) | | 223 | | | 97 | | | 381,686 | | | 30.6 | % | | 53,632 | | | 34.4 | % |
| 2036 | | 2036 | | 45 | | | 19 | | | 71,427 | | | 5.3 | % | | 10,958 | | | 6.4 | % |
| 2037 | | 2037 | | 26 | | | 13 | | | 61,555 | | | 4.6 | % | | 6,441 | | | 3.7 | % |
| Thereafter (>2037) | | Thereafter (>2037) | | 259 | | | 108 | | | 493,578 | | | 36.8 | % | | 64,885 | | | 37.6 | % |
| Vacant | Vacant | | — | | | — | | | — | | | — | % | | 2,287 | | | 1.5 | % | Vacant | | — | | | — | | — | | | — | | — | | | — | | — | % | | 3,238 | | | 1.9 | | 1.9 | % |
| Total | Total | | 790 | | | $ | 1,247,764 | | | 100.0 | % | | 155,674 | | | 100.0 | % | Total | | 773 | | | | | $ | | | | $ | 1,339,352 | | | 100.0 | | 100.0 | % | | 172,668 | | | 100.0 | | 100.0 | % |
__________
(a)Assumes tenants do not exercise any renewal options or purchase options.
(b)Includes ABR of $38.8 million from a tenant (U-Haul Moving Partners, Inc. and Mercury Partners, LP) that holds anprovided notice of its intention to exercise its option to repurchase the 78 properties it is leasing in April 2024. There can be no assurance that such repurchase will be completed.during the first quarter of 2024 (Note 7).
Terms and Definitions
Pro Rata Metrics —The portfolio information above contains certain metrics prepared on a pro rata basis. We refer to these metrics as pro rata metrics. We have a number ofcertain investments usually with our affiliates, in which our economic ownership is less than 100%. On a full consolidation basis, we report 100% of the assets, liabilities, revenues, and expenses of those investments that are deemed to be under our control or for which we are deemed to be the primary beneficiary, even if our ownership is less than 100%. Also, for all other jointly owned investments, which we do not control, we report our net investment and our net income or loss from that investment. On a pro rata basis, we generally present our proportionate share, based on our economic ownership of these jointly owned investments, of the portfolio metrics of those investments. Multiplying each of our jointly owned investments’ financial statement line items by our percentage ownership and adding or subtracting those amounts from our totals, as applicable, may not accurately depict the legal and economic implications of holding an ownership interest of less than 100% in our jointly owned investments.
ABR — ABR represents contractual minimum annualized base rent for our net-leased properties and reflects exchange rates as of December 31, 2021.2023. If there is a rent abatement, we annualize the first monthly contractual base rent following the free rent period. ABR is not applicable to operating properties.
| | | | | |
| W. P. Carey 20212023 10-K – 3033 |
Results of Operations
We operate in two reportable segments: Real Estate and Investment Management. We evaluate our results of operations with a primary focus on increasing and enhancing the value, quality, and number of properties in our Real Estate segment. We focus our efforts on accretive investing and improving portfolio quality through re-leasing efforts, including negotiation of lease renewals, or selectively selling assets in order to increase value in our real estate portfolio. Through our Investment Management segment, we expect to continue to earn fees and other income from the management of the portfolios of the remaining Managed Programs until those programs reach the end of their respective life cycles.NLOP and CESH. Refer to Note 1618 for tables presenting the comparative results of our Real Estate and Investment Management segments.
Real Estate
Revenues
The following table presents revenues within our Real Estate segment (in thousands):
| | Years Ended December 31, |
| 2021 | | 2020 | | Change |
| Years Ended December 31, | | | Years Ended December 31, |
| 2023 | | | 2023 | | 2022 | | Change |
| Real Estate Revenues | Real Estate Revenues | | | | | |
| Lease revenues from: | Lease revenues from: | |
| Lease revenues from: | |
| Lease revenues from: | |
| Existing net-leased properties | |
| Existing net-leased properties | |
| Existing net-leased properties | Existing net-leased properties | $ | 1,062,470 | | | $ | 1,034,306 | | | $ | 28,164 | |
| Recently acquired net-leased properties | Recently acquired net-leased properties | 108,858 | | | 22,922 | | | 85,936 | |
| Net-leased properties sold or held for sale | 6,110 | | | 23,395 | | | (17,285) | |
| Net-leased properties acquired in the CPA:18 Merger | |
| Net-leased properties sold, held for sale, derecognized, or reclassified to operating properties or sales-type leases | |
| Total lease revenues (including reimbursable tenant costs) | Total lease revenues (including reimbursable tenant costs) | 1,177,438 | | | 1,080,623 | | | 96,815 | |
| Income from direct financing leases and loans receivable | 67,555 | | | 74,893 | | | (7,338) | |
| Lease termination income and other | 53,655 | | | 11,082 | | | 42,573 | |
| Operating property revenues | 13,478 | | | 11,399 | | | 2,079 | |
| $ | 1,312,126 | | | $ | 1,177,997 | | | $ | 134,129 | |
| Income from finance leases and loans receivable | |
| Operating property revenues from: | |
| Operating properties acquired in the CPA:18 Merger | |
| Operating properties acquired in the CPA:18 Merger | |
| Operating properties acquired in the CPA:18 Merger | |
| Operating properties sold or held for sale | |
| Operating properties recently reclassified from net-leased properties or recently acquired | |
| Existing operating properties | |
| Total operating property revenues | |
| Other lease-related income | |
| $ | |
Lease Revenues
“Existing net-leased properties” are those that we acquired or placed into service prior to January 1, 20202022 and that were not sold, or held for sale, derecognized, or reclassified to operating properties or sales-type leases during the periods presented. For the periods presented, there were 1,071947 existing net-leased properties.
| | | | | |
| W. P. Carey 2023 10-K– 34 |
For the year ended December 31, 20212023 as compared to 2020,2022, lease revenues from existing net-leased properties increased due to the following items (in millions):
__________
| | | | | |
| W. P. Carey 2021 10-K– 31
|
(a)Excludes fixed minimum rent increases, which are reflected as straight-line rent adjustments within lease revenues.
(b)Primarily related to (i) straight-line rent adjustments and (ii) write-offs of above/below-market rent intangibles.
(c)Primarily comprised of winter storm-related charges recorded during the first quarter of 2021 from a tenanthigher reimbursable maintenance costs at a property in Texas.certain properties.
“Recently acquired net-leased properties” are those that we acquired or placed into service subsequent to December 31, 20192021 and that were not sold or held for sale during the periods presented. Since January 1, 2020,2022, we acquired 4034 investments (comprised of 115 properties and six land parcels under buildings that we already own)196 properties) and placed two properties into service.
“Net-leased properties acquired in the CPA:18 Merger” on August 1, 2022 (Note 4) consisted of 28 net-leased properties that were not sold, or held for sale” include (i) 24sale, or derecognized during the periods presented.
“Net-leased properties sold, held for sale, derecognized, or reclassified to operating properties or sales-type leases” include:
•23 net-leased properties disposed of during the year ended December 31, 2021; (ii) 2023;
•two net-leased properties classified as held for sale at December 31, 2021,2023, both of which were sold in January and February 20222024 (Note 46, Note 1719); and (iii) 21 •23 net-leased properties disposed of during the year ended December 31, 2020. 2022;
•a portfolio of 12 net-leased hotel properties that converted to operating properties in the first quarter of 2023 upon expiration of the master lease with the Marriott Corporation, after which we began recognizing operating property revenues and expenses from these properties (Note 6) (eight of these properties were sold during the third and fourth quarters of 2023); •portfolios of (i) 78 net-leased self-storage properties that were reclassified to net investments in sales-type leases in the first quarter of 2023, since the tenant provided notice of its intention to exercise its option to repurchase the properties, and (ii) 70 net-leased office properties that were reclassified to net investments in sales-type leases in the fourth quarter of 2023, since we agreed to sell the portfolio to the tenant, resulting in a lease modification; following these transactions, we began recognizing earnings from these properties within Income from finance leases and loans receivable in the consolidated financial statements; and
•59 net-leased properties derecognized in connection with the Spin-Off (Note 3).
Our dispositions are more fully described in Note 15.
Income from Direct Financing Leases and Loans Receivable
We currently present Income from direct financing leases and loans receivable on its own line item in the consolidated statements of income. Previously, income from direct financing leases was included within Lease revenues and income from loans receivable was included within Lease termination income and other in the consolidated statements of income. Prior period amounts have been reclassified to conform to the current period presentation.
For the year ended December 31, 2021 as compared to 2020, income from direct financing leases and loans receivable decreased due to the following items (in millions):
Lease Termination Income and Other
Lease termination income and other is described in Note 417.
| | | | | |
| W. P. Carey 20212023 10-K – 3235 |
Income from Finance Leases and Loans Receivable
For the year ended December 31, 2023 as compared to 2022, income from finance leases and loans receivable increased due to the following items (in millions):
Operating Property Revenues and Expenses
“Operating properties acquired in the CPA:18 Merger” consisted of 65 self-storage properties and two student housing properties, which contributed operating property revenues, depreciation and amortization, and operating property expenses since August 1, 2022, the date of the CPA:18 Merger December 31, 2023 (Note 4).
“Operating properties sold or held for sale” are comprised of (i) the eight hotel operating properties sold during the year ended December 31, 2023 and (ii) a parking garage attached to a net-leased property that was derecognized in connection with the Spin-Off (Note 3).
“Operating properties recently reclassified from net-leased properties or recently acquired” include (i) four net-leased hotel properties that converted to operating properties in the first quarter of 2023 (after which we began recognizing operating property revenues and expenses from these properties (Note 6)) and (ii) five self-storage operating properties acquired during the year ended December 31, 2023 (Note 6).
“Existing operating properties” are those that we acquired or placed into service prior to January 1, 2022 and that were not sold or held for sale during the periods presented. For the periods presented, we recorded operating property revenues from
1211 existing operating properties, comprised of ten self-storage operating properties (which excludes nine self-storage properties accounted for under the equity method) and
twoone hotel operating
properties (one of which was sold in January 2020, as described in Note 15).property. For our remaining hotel operating property, revenues and expenses increased by $3.2$2.3 million and $1.6$1.5 million, respectively, for the year ended December 31, 20212023 as compared to 2020,2022, reflecting higher occupancy as the hotel’s business recovered from the COVID-19 pandemic. In addition, for the year ended December 31, 2021 as compared to 2020, operating property revenues and expenses decreased by $1.9 million each, due to the hotel saleoccupancy.
Other Lease-Related Income
Other lease-related income is described in January 2020. Furthermore, for our self-storage operating properties, revenues and expenses increased by $0.7 million and $0.2 million, respectively, for the year ended December 31, 2021 as compared to 2020, reflecting higher occupancy and unit rates.Note 6.
| | | | | |
| W. P. Carey 2023 10-K– 36 |
Operating Expenses
Depreciation and Amortization
The following table presents depreciation and amortization expense within our Real Estate segment (in thousands):
| | | | | | | | | | | | | | | | | |
| Years Ended December 31, |
| 2021 | | 2020 | | Change |
| Depreciation and Amortization | | | | | |
| Net-leased properties | $ | 467,803 | | | $ | 433,829 | | | $ | 33,974 | |
| Operating properties | 2,747 | | | 4,017 | | | (1,270) | |
| Corporate | 5,439 | | | 4,102 | | | 1,337 | |
| $ | 475,989 | | | $ | 441,948 | | | $ | 34,041 | |
For the year ended December 31,
20212023 as compared to
2020,2022, depreciation and amortization expense for net-leased
properties and self-storage operating properties increased primarily due to the impact of
net acquisition activity
and(including properties acquired in the
strengthening of foreign currencies (primarily the euro) in relation to the U.S. dollar between the periods,CPA:18 Merger (Note 4)), partially offset by in-place lease intangible assets recorded on certain net-leased self-storage properties becoming fully amortized during 2020.
Beginning with the second quarterimpact of 2020, corporate depreciation and amortization expense is fully recognized within our Real Estate segment, consistent with the segment allocation changes described below under Spin-Off (General and AdministrativeNote 3).
General and Administrative
Beginning with the second quarter of 2020, general and administrative expenses attributed to our Investment Management segment are comprised of the incremental costs of providing services to the Managed Programs, which are fully reimbursed by those funds (resulting in no net expense for us). All other general and administrative expenses are attributed torecognized within our Real Estate segment. Previously, general and administrative expenses were allocated based on time incurred by our personnel for the Real Estate and Investment Management segments. In light of the termination of the advisory agreements with CWI 1 and CWI 2 in connection with the WLT management internalization (Note 3), we now view essentially all assets, liabilities, and operational expenses as part of our Real Estate segment, other than incremental activities that are expected to wind down as we manage CPA:18 – Global and CESH through the end of their respective life cycles (Note 2). This change between the segments had no impact on our consolidated financial statements.
For the year ended December 31, 20212023 as compared to 2020,2022, general and administrative expenses allocated to our Real Estate segment increased by $11.8$7.1 million, primarily due to (i) higher incentive compensation expense, (ii) lower overheadincreased employee benefits expense, increased professional fees and expenses resulting from the assets acquired in the CPA:18 Merger (Note 4), and no longer receiving reimbursements from WLT following the termination of all services provided under the transition services agreement, and (iii) the change in methodology for allocation of expenses between our Real Estate and Investment Management segments discussed above.CPA:18 – Global.
Impairment Charges — Real Estate
| | | | | |
| W. P. Carey 2021 10-K– 33
|
Our impairment charges on real estate are described in Note 10.
Property Expenses, Excluding Reimbursable Tenant Costs
For the year ended December 31, 20212023 as compared to 2020,2022, property expenses, excluding reimbursable tenant costs, increaseddecreased by $3.8$6.3 million, primarily due to the release of real estate taxes accrued for a cash basis tenant vacancies during 2020the current year. The tenant was previously not current on real estate taxes due, and 2021 (which resultedrepaid the outstanding amount in the second quarter of 2023. This decrease was partially offset by the recovery of property expenses no longer being reimbursable)taxes in the prior year period due to a successful court ruling and higher property tax assessments atexpenses related to certain properties.properties acquired in the CPA:18 Merger.
Stock-based Compensation Expense
For a description of our equity plans and awards, please see Note 1315. Beginning with the second quarter of 2020, stock-basedStock-based compensation expense is fully recognized within our Real Estate segment. In light of the termination of the advisory agreements with CWI 1 and CWI 2 in connection with the WLT management internalization (Note 3), we believe that this allocation methodology is appropriate, as described above (Note 2). This change between the segments had no impact on our consolidated financial statements.
For the year ended December 31, 20212023 as compared to 2020,2022, stock-based compensation expense allocated to the Real Estate segment increased by $9.6$1.7 million, primarily due to higher amortization of restricted share units, partially offset by the impact of changes in the projected payout for performance share units.
Impairment Charges
Our impairment charges are described in Note 8.
Merger and Other Expenses
For the year ended December 31, 2021,2023, merger and other expenses allocated to our Real Estate segment totaled benefits of $4.6 million,are primarily comprised of reversals of estimated liabilities for German real estate transfer taxes that were previously recordedcosts incurred in connection with business combinationsthe Spin-Off, which was completed in prior years.November 2023 (Note 3).
For the year ended December 31, 2022, merger and other expenses are primarily comprised of costs incurred in connection with the CPA:18 Merger (Note 4), which was completed in August 2022.
Other Income and (Expenses),Expenses, and (Provision for) Benefit fromProvision for Income Taxes
Interest Expense
For the year ended December 31, 2021 as compared to 2020, interest expense decreased by $13.3 million, primarily due to the reduction of our mortgage debt outstanding by prepaying or repaying at or close to maturity a total of $1.1 billion of non-recourse mortgage loans with a weighted-average interest rate of 4.9% since January 1, 2020, partially offset by four senior unsecured notes issuances totaling $1.9 billion (based on the exchange rate of the euro on the dates of issuance for our euro-denominated senior unsecured notes) with a weighted-average interest rate of 1.9% completed since January 1, 2020.
The following table presents certain information about our outstanding debt (dollars in thousands):
| | | | | | | | | | | |
| Years Ended December 31, |
| 2021 | | 2020 |
| Average outstanding debt balance | $ | 6,906,997 | | | $ | 6,411,355 | |
| Weighted-average interest rate | 2.6 | % | | 3.0 | % |
Gain on Sale of Real Estate, Net
Gain on sale of real estate, net, consists of gaingains and losses on the sale of properties that were (i) disposed of, (ii) subject to the exercise of a purchase option, or (iii) subject to a purchase agreement resulting in a lease modification during the reporting period. Our dispositions areperiod, as more fully described in Note 156, Note 7, and Note 17.
| | | | | |
| W. P. Carey 20212023 10-K – 3437 |
(Losses) Earnings from Equity Method Investments in Real EstateInterest Expense
Our equity method investmentsFor the year ended December 31, 2023 as compared to 2022, interest expense increased by $72.7 million, primarily due to (i) an increase of $35.6 million related to non-recourse mortgage loans assumed in real estate are more fully described in the CPA:18 Merger on August 1, 2022 (Note 74), (ii) higher outstanding balances and interest rates on our Senior Unsecured Credit Facility, (iii) our Unsecured Term Loan due 2026 that we entered into in April 2023 (Note 12), and (iv) two senior unsecured notes issuances totaling $334.8 million (based on the exchange rate of the euro on the dates of issuance) with a weighted-average interest rate of 3.6% completed in September 2022, partially offset by the reduction of our mortgage debt outstanding by prepaying or repaying at or close to maturity a total of $483.1 million of non-recourse mortgage loans with a weighted-average interest rate of 4.8% since January 1, 2022 (Note 12).
The following table presents (losses) earnings from equity method investmentscertain information about our outstanding debt (dollars in real estate (in thousands):
| | | | | | | | | | | | | | | | | |
| Years Ended December 31, |
| 2021 | | 2020 | | Change |
| (Losses) Earnings from Equity Method Investments in Real Estate | | | | | |
Losses from WLT (a) | $ | (10,790) | | | $ | (5,028) | | | $ | (5,762) | |
Proportionate share of impairment charge or other-than-temporary impairment charge recognized on Bank Pekao (Note 7, Note 8) | (13,220) | | | (8,276) | | | (4,944) | |
Other-than-temporary impairment charge on State Farm Mutual Automobile Insurance Co. (Note 7, Note 8) | (6,830) | | | — | | | (6,830) | |
| Earnings from Las Vegas Retail Complex | 3,017 | | | — | | | 3,017 | |
Earnings from Johnson Self Storage (b) | 2,460 | | | 570 | | | 1,890 | |
Earnings from Fortenova Grupa d.d. (c) | 1,542 | | | 371 | | | 1,171 | |
| Other | 4,172 | | | 3,346 | | | 826 | |
| $ | (19,649) | | | $ | (9,017) | | | $ | (10,632) | |
__________
(a)Losses for each period are primarily due to the adverse impact of the COVID-19 pandemic on WLT’s operations. In addition, losses for 2021 reflect four quarters of activity as compared to two quarters for 2020. We record (losses) earnings from this investment on a one quarter lag.
(b)Increase is primarily due to higher occupancy rates at these self-storage facilities.
(c)Increase is primarily due to improved performance at these properties, as well as our proportionate share of a gain recognized on the sale of one of the properties in this portfolio. | | | | | | | | | | | |
| Years Ended December 31, |
| 2023 | | 2022 |
| Average outstanding debt balance | $ | 8,404,466 | | | $ | 7,392,208 | |
| Weighted-average interest rate | 3.2 | % | | 2.7 | % |
Non-Operating Income
Non-operating income primarily consists of realized gains and losses on derivative instruments, dividends from equity securities, and interest income on our loans to affiliates and cash deposits.
The following table presents non-operating income within our Real Estate segment (in thousands):
| | | | | | | | | | | | | | | | | |
| Years Ended December 31, |
| 2021 | | 2020 | | Change |
| Non-Operating Income | | | | | |
Cash dividend from our investment in Lineage Logistics (Note 8) | $ | 6,438 | | | $ | — | | | $ | 6,438 | |
Cash dividends from our investment in preferred shares of WLT (Note 8) | 4,893 | | | — | | | 4,893 | |
| Realized gains on foreign currency forward collars and contracts | 2,357 | | | 8,162 | | | (5,805) | |
| Interest income related to our loans to affiliates and cash deposits | 90 | | | 808 | | | (718) | |
| $ | 13,778 | | | $ | 8,970 | | | $ | 4,808 | |
| | | | | | | | | | | | | | | | | |
| Years Ended December 31, |
| 2023 | | 2022 | | Change |
| Non-Operating Income | | | | | |
Realized gains on foreign currency collars (Note 11) | $ | 14,485 | | | $ | 24,058 | | | $ | (9,573) | |
| Interest income related to our loans to affiliates and cash deposits | 6,944 | | | 1,011 | | | 5,933 | |
Cash dividends from our investment in Lineage Logistics (Note 10) | — | | | 4,308 | | | (4,308) | |
Cash dividends from our investment in preferred shares of WLT (Note 10) | — | | | 912 | | | (912) | |
| $ | 21,429 | | | $ | 30,289 | | | $ | (8,860) | |
| | | | | |
| W. P. Carey 2023 10-K– 38 |
Earnings from Equity Method Investments in Real Estate
Our equity method investments in real estate are more fully described in Note 9. The following table presents earnings from equity method investments in real estate (in thousands): | | | | | | | | | | | | | | | | | |
| Years Ended December 31, |
| 2023 | | 2022 | | Change |
| Earnings from Equity Method Investments in Real Estate | | | | | |
| Existing Equity Method Investments: | | | | | |
Earnings from Las Vegas Retail Complex (a) | $ | 12,763 | | | $ | 10,077 | | | $ | 2,686 | |
| Earnings from Johnson Self Storage | 4,572 | | | 4,334 | | | 238 | |
Earnings from Kesko Senukai (b) | 1,385 | | | 3,908 | | | (2,523) | |
| Earnings from Harmon Retail Center | 855 | | | 1,051 | | | (196) | |
| 19,575 | | | 19,370 | | | 205 | |
Equity Method Investments Consolidated after the CPA:18 Merger (Note 4): | | | | | |
Proportionate share of impairment charge recognized on Bank Pekao (Note 10) | — | | | (4,610) | | | 4,610 | |
| Other | — | | | 1,461 | | | (1,461) | |
| — | | | (3,149) | | | 3,149 | |
| $ | 19,575 | | | $ | 16,221 | | | $ | 3,354 | |
__________
(a)Increase is due to funding of this construction loan since January 1, 2022, which has an interest rate of 6.0%.
(b)Decrease is primarily due to higher rent collections at these retail properties during the prior year, where certain rents were previously disputed and subsequently collected.
Other Gains and (Losses)
Other gains and (losses) primarily consists of gains and losses on (i) extinguishment of debt, (ii) the mark-to-market fair value of equity securities, (ii) extinguishment of debt, and (iii) foreign currency transactions.exchange rate movements, as well as changes in the allowance for credit losses on finance receivables. The timing and amount of such gains or losses cannot always be estimated and are subject to fluctuation. CertainAll of our foreign currency-denominated unsecured debt instruments were designated as net investment hedges during the years ended December 31, 20212023 and 20202022. Therefore, no gains and losses on foreign currency transactionsexchange rate movements were recognized on the remeasurement of such instruments during those periods (Note 911).
| | | | | |
| W. P. Carey 20212023 10-K – 3539 |
The following table presents other gains and (losses) within our Real Estate segment (in thousands):
| | | | | | | | | | | | | | | | | |
| Years Ended December 31, |
| 2021 | | 2020 | | Change |
| Other Gains and (Losses) | | | | | |
Non-cash unrealized gains related to an increase in the fair value of our investment in shares of Lineage Logistics (Note 8) | $ | 76,312 | | | $ | 48,326 | | | $ | 27,986 | |
Loss on extinguishment of debt (a) | (75,339) | | | (1,487) | | | (73,852) | |
Net realized and unrealized (losses) gains on foreign currency transactions (b) | (15,608) | | | 11,018 | | | (26,626) | |
Change in allowance for credit losses on finance receivables (Note 5) | (266) | | | (22,259) | | | 21,993 | |
| Other | 1,225 | | | 1,506 | | | (281) | |
| $ | (13,676) | | | $ | 37,104 | | | $ | (50,780) | |
| | | | | | | | | | | | | | | | | |
| Years Ended December 31, |
| 2023 | | 2022 | | Change |
| Other Gains and (Losses) | | | | | |
Change in allowance for credit losses on finance receivables (Note 7) (a) | $ | (29,074) | | | $ | 14,363 | | | $ | (43,437) | |
Net realized and unrealized losses on foreign currency exchange rate movements (b) | (5,458) | | | (26,866) | | | 21,408 | |
| Non-cash unrealized losses on non-hedging derivatives | (3,918) | | | (898) | | | (3,020) | |
| Gain on extinguishment of debt | 2,940 | | | 1,301 | | | 1,639 | |
Non-cash unrealized gains related to an increase in the fair value of our investment in common shares of WLT (Note 10) | — | | | 49,233 | | | (49,233) | |
Non-cash unrealized gains related to an increase in the fair value of our investment in shares of Lineage Logistics (Note 10) | — | | | 38,582 | | | (38,582) | |
Non-cash unrealized gains related to an increase in the fair value of our investment in preferred shares of WLT (Note 10) | — | | | 18,688 | | | (18,688) | |
Gain on repayment of secured loan receivable (c) | — | | | 10,613 | | | (10,613) | |
Adjustment to insurance receivable acquired as part of a prior merger (d) | — | | | (9,358) | | | 9,358 | |
| Other | (917) | | | 1,491 | | | (2,408) | |
| $ | (36,427) | | | $ | 97,149 | | | $ | (133,576) | |
__________
(a)AmountAs a result of the declining financial position of one of our top ten tenants, we recognized a $28.8 million allowance for credit loss during the year ended December 31, 2021 is related to the prepayment2023, based on our expectation of mortgage loans (primarily comprised of prepayment penalties totaling $45.2 million) and redemption of the €500.0 million of 2.0% Senior Notes due 2023 in March 2021 (primarily comprised of a “make-whole” amount of $26.2 million related to the redemption) (Note 10).collecting lower rents going forward. (b)We makeRemeasurement of certain foreign currency-denominated intercompany loans to a number ofmonetary assets and liabilities that are held by our foreign subsidiaries most of which do not have the U.S. dollar asin currencies other than their functional currency. Remeasurement of foreign currency intercompany transactions that are scheduled for settlement, consisting primarily of accrued interest and amortizing loans, are included in other gains and (losses). This includes foreign currency-denominated intercompany loans to our foreign subsidiaries that are scheduled for settlement. Beginning in the first quarter of 2023, our intercompany loans subject to remeasurement were hedged by certain of our foreign currency-denominated unsecured debt that we de-designated as net investment hedges.
(c)We acquired a secured loan receivable with a fair value of $23.4 million in our merger with a former affiliate, Corporate Property Associates 17 – Global Incorporated, in October 2018 (“CPA:17 Merger”), for which the outstanding principal of $34.0 million was fully repaid to us in September 2022 (Note 7). Therefore, we recorded a $10.6 million gain on repayment of this secured loan receivable. (d)This insurance receivable was acquired in the CPA:17 Merger.
Gain on Change in Control of Interests
In connection with the CPA:18 Merger, during the year ended December 31, 2022, we acquired the remaining interests in four investments in which we already had a joint interest and accounted for under the equity method. Due to the change in control of these four jointly owned investments, we recorded a gain on change in control of interests of $11.4 million reflecting the difference between our carrying values and the preliminary estimated fair values of our previously held equity interests on August 1, 2022. Subsequent to the CPA:18 Merger, we consolidated these wholly owned investments (Note 4).
Provision for) Benefit fromfor Income Taxes
For the year ended December 31, 2021, we recorded a2023 as compared to 2022, provision for income taxes of $28.7 million, compared to a benefit from income taxes of $18.5 million recognized during the year ended December 31, 2020, within our Real Estate segment. During the year ended December 31, 2020, we recognized a deferred tax benefit of $37.2segment increased by $23.0 million, primarily due to (i) higher current taxes as a result of the release of arent increases driven by CPI adjustments at existing international properties, (ii) deferred tax liability relating to our investment in shares of Lineage Logistics (Note 13), which converted to a REITbenefits recognized during the prior year period related to the release of valuation allowances on certain foreign properties, and is therefore no longer subject to federal and state income taxes. In addition,(iii) the impact of international taxes increased due to acquisitions and various new tax laws and regulations.property acquisitions.
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| W. P. Carey 2023 10-K– 40 |
Investment Management
We earn revenue as the advisor to the Managed Programs.Programs and NLOP. For the periods presented, we acted as advisor to the following Managed Programs: CPA:18 – Global CWI(through August 1, (through April 13, 2020), CWI 2 (through April 13, 2020),2022) and CESH. The CWIUpon completion of the CPA:18 Merger on August 1, and CWI 2 Merger closed on April 13, 2020, and as a result,2022 (Note 4), the advisory agreementsagreement with each of CWI 1 and CWI 2CPA:18 – Global was terminated, and CWI 2 was renamed Watermark Lodging Trust, Inc. (“WLT”).we ceased earning revenue from CPA:18 – Global. We provided certain serviceshave acted as advisor to WLT pursuant to a transition services agreement, which was terminatedNLOP since the Spin-Off on October 13, 2021November 1, 2023 (Note 3).
We no longer raise capital for new or existing funds, but wefunds. We act as the advisor to CESH and currently expect to continue managing CPA:18 – Global and CESH and earn the various fees described belowdo so through the end of their respectiveits life cyclescycle. We also act as the advisor to NLOP pursuant to the NLOP Advisory Agreements (Note 1, Note 35). As of December 31, 2021, we managed total assets of approximately $2.7 billion on behalf of the Managed Programs.
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| W. P. Carey 2021 10-K– 36
|
Revenues
The following table presents revenues within our Investment Management segment (in thousands):
| | Years Ended December 31, |
| 2021 | | 2020 | | Change |
| Years Ended December 31, | | | Years Ended December 31, |
| 2023 | | | 2023 | | 2022 | | Change |
| Investment Management Revenues | Investment Management Revenues | | | | | |
| Asset management and other revenue | |
| Asset management revenue | |
| Asset management revenue | |
| Asset management revenue | |
| NLOP | |
| NLOP | |
| NLOP | |
| CESH | |
| CPA:18 – Global | CPA:18 – Global | $ | 12,528 | | | $ | 12,112 | | | $ | 416 | |
| CWI 1 | — | | | 3,795 | | | (3,795) | |
| CWI 2 | — | | | 3,367 | | | (3,367) | |
| 2,184 | |
| Other advisory income and reimbursements | |
| NLOP | |
| NLOP | |
| NLOP | |
| 667 | |
| Reimbursable costs from affiliates | |
| CESH | CESH | 2,835 | | | 3,193 | | | (358) | |
| 15,363 | | | 22,467 | | | (7,104) | |
| Reimbursable costs from affiliates | | | | | |
| CESH | |
| CESH | |
| CPA:18 – Global | CPA:18 – Global | 2,874 | | | 2,854 | | | 20 | |
| CWI 1 | — | | | 1,867 | | | (1,867) | |
| CWI 2 | — | | | 1,301 | | | (1,301) | |
| CESH | 878 | | | 1,170 | | | (292) | |
| WLT | 283 | | | 1,663 | | | (1,380) | |
| 4,035 | | | 8,855 | | | (4,820) | |
| $ | 19,398 | | | $ | 31,322 | | | $ | (11,924) | |
| 368 | |
| $ | |
Asset Management and Other Revenue
Asset management and other revenue includes asset management revenue, structuring revenue, and other advisory revenue. During the periods presented, we earned asset management revenue from (i) NLOP (since the Spin-Off on November 1, 2023 (Note 3)) based on an annual fee of $7.5 million, which will be proportionately reduced following the disposition of a portfolio property, (ii) CESH based on its gross assets under management at fair value, and (iii) CPA:18 – Global (prior to the CPA:18 Merger) based on the value of its real estate-related assets under management, (ii) the CWI REITs, prior to the CWI 1 and CWI 2 Merger (Note 3), based on the value of their lodging-related real estate assets under management, and (iii) CESH based on its gross assets under management at fair value. Asset management revenue may increase or decrease depending upon changes in the Managed Programs’ asset bases as a result of purchases, sales, or changes in the appraised value of the real estate-related and lodging-related assets in their investment portfolios.management. For 2021,2023, we received asset management feesrevenue from (i) CPA:18 – Global in shares of its common stock,NLOP and (ii) CESH in cash. Asset management revenues from NLOP and CESH are expected to decline as assets are sold.
Other Advisory Income and Reimbursements
We
Under the advisory agreement with NLOP, we earn
structuringa base administrative amount of approximately $4.0 million annually, for certain administrative services, including day-to-day management services, investor relations, accounting, tax, legal, and other
advisory revenue when we structure new investments on behalf of the Managed Programs. Since we no longer raise capital for new or existing funds, and we no longer serve as advisor to CWI 1 and CWI 2 (Note 3), structuring and other advisory revenue has recently been and is expected to be insignificant going forward. For the year ended December 31, 2020, structuring and other advisory revenue was comprised of $0.3 million for structuring a mortgage refinancing on behalf of CWI 2 and $0.2 million related to increasesadministrative matters, paid in build-to-suit funding commitments for certain CPA:18 – Global investments.cash.
Operating Expenses
General and Administrative, Stock-based Compensation Expense, and Depreciation and Amortization
Beginning with the second quarter of 2020, general and administrative expenses attributed to ourImpairment Charges — Investment Management segment are comprised of the incremental costs of providing services to the Managed Programs, which are fully reimbursed by those funds (resulting in no net expense for us). All other general and administrative expenses are attributed to our Real Estate segment. Previously, general and administrative expenses were allocated basedGoodwill
Our impairment charges on time incurred by our personnel for the Real Estate and Investment Management segments. In addition, beginning with the second quarter of 2020, stock-based compensation expense and corporate depreciation and amortization expensegoodwill are more fully recognized within our Real Estate segment. In light of the termination of the advisory agreements with CWI 1 and CWI 2described in connection with the WLT management internalization (Note 310), we now view essentially all assets, liabilities, and operational expenses as part of our Real Estate segment, other than incremental activities that are expected to wind down as we manage CPA:18 – Global and CESH through the end of their respective life cycles (Note 2). These changes between the segments had no impact on our consolidated financial statements.
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| W. P. Carey 20212023 10-K – 3741 |
Other Income and Expenses, and (Provision for) Benefit from Income Taxes
As discussed
Gain on Change in Control of Interests
Note 3, certain personnel costs and overhead costs are charged toIn connection with the remaining Managed Programs and reimbursed to usCPA:18 Merger, during the year ended December 31, 2022, we recognized a gain on change in accordance with their respective advisory agreements. In addition, following the closingcontrol of the CWI 1 and CWI 2 Merger on April 13, 2020, we began recording reimbursements from WLTinterests of $22.5 million within our Investment Management segment pursuantrelated to a transition services agreement. On October 13, 2021, all services provided under the transition services agreement were terminated.difference between the carrying value and the preliminary estimated fair value of our previously held equity interest in shares of CPA:18 – Global’s common stock (Note 4).
Subadvisor Fees
Pursuant to the terms of the subadvisory agreements we had with the third-party subadvisors in connection with both CWI 1 and CWI 2, we paid a subadvisory fee equal to 20% of the amount of fees paid to us by CWI 1 and 25% of the amount of fees paid to us by CWI 2. Upon completion of the CWI 1 and CWI 2 Merger on April 13, 2020 (Note 3), the subadvisory agreements were terminated, and we no longer pay subadvisory fees.
Other Income and Expenses, and Benefit from Income Taxers
Earnings (Losses) from Equity Method Investments in the Managed Programs
Earnings (losses)The following table presents the details of our earnings from equity method investments in the Managed Programs is recognized in accordance with GAAP (Note 79). In addition, we are entitled to receive distributions of Available Cash (Note 3) from the operating partnership of CPA:18 – Global. The net income of our unconsolidated investments fluctuates based on the timing of transactions, such as new leases and property sales, as well as the level of impairment charges. The following table presents the details of our Earnings (losses) from equity method investments in the Managed Programs (in thousands): | | | | | | | | | | | |
| Years Ended December 31, |
| 2021 | | 2020 |
| Earnings (losses) from equity method investments in the Managed Programs: | | | |
Distributions of Available Cash from CPA:18 – Global (a) | $ | 7,345 | | | $ | 7,225 | |
Earnings (losses) from equity method investments in the Managed Programs (b) | 1,475 | | | (2,662) | |
Other-than-temporary impairment charges on our equity method investments in CWI 1 and CWI 2 (c) | — | | | (47,112) | |
Gain on redemption of special general partner interests in CWI 1 and CWI 2, net (d) | — | | | 33,009 | |
| Earnings (losses) from equity method investments in the Managed Programs | $ | 8,820 | | | $ | (9,540) | |
| | | | | | | | | | | |
| Years Ended December 31, |
| 2023 | | 2022 |
| Earnings from equity method investments in the Managed Programs: | | | |
Distributions of Available Cash from CPA:18 – Global (a) | $ | — | | | $ | 8,746 | |
Earnings from equity method investments in the Managed Programs (a) | — | | | 4,542 | |
| Earnings from equity method investments in the Managed Programs | $ | — | | | $ | 13,288 | |
__________
(a)We are entitled to receive distributions of up to 10%As a result of the Available Cash fromcompletion of the operating partnership of CPA:18 – Global, as defined in its operating partnership agreementMerger on August 1, 2022 (Note 34). Distributions of Available Cash received and earned from CPA:18 – Global fluctuate based on the timing of certain events, including acquisitions and dispositions. (b)The increase for the year ended December 31, 2021 as compared to 2020 was primarily due to an increase of $1.2 million, we no longer recognize equity income from our investment in shares of common stock of CPA:18 – Global resulting from an increaseor receive distributions of Available Cash (as defined in our ownership since we receive asset management revenueCPA:18 – Global’s partnership agreement) from CPA:18 – Global in shares of its common stock. In addition, during the year ended December 31, 2020, we recognized losses of $1.6 million and $1.3 million from our investments in shares of CWI 1 and CWI 2 common stock, respectively (prior to the CWI 1 and CWI 2 Merger in April 2020 (Note 3)). Subsequent to the CWI 1 and CWI 2 Merger, our investment in shares of WLT (formerly CWI 2) common stock is included in our Real Estate segment (Note 3).(c)During the year ended December 31, 2020, we recognized other-than-temporary impairment charges of $27.8 million and $19.3 million on our equity method investments in CWI 1 and CWI 2, respectively, to reduce the carrying values of our investments to their estimated fair values, due to the adverse effect of the COVID-19 pandemic on the operations of CWI 1 and CWI 2 (Note 8).(d)Immediately following the closing of the CWI 1 and CWI 2 Merger, in connection with the redemption of the special general partner interests that we previously held in CWI 1 and CWI 2, we recognized a non-cash net gain on sale of $33.0 million during the year ended December 31, 2020 (Note 3, Note 6).Global.
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| W. P. Carey 2021 10-K– 38
|
Benefit from (Provision for) Income Taxes
For the year ended December 31, 2021 as compared to 2020,2023 we recorded a benefit from income taxes within our Investment Management segment decreased by $2.0 million. Duringof $0.4 million, compared to a provision for income taxes of $6.3 million recognized during the year ended December 31, 2020, we recognized (i) a deferred tax benefit of $6.3 million as a result of the other-than-temporary impairment charges that we recognized on our equity method investments in CWI 1 and CWI 2 during the period, (ii) a current tax benefit of $4.7 million as a result of carrying back certain net operating losses in accordance with the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) that was enacted on March 27, 2020, and (iii) deferred tax expense of $8.3 million due to the establishment of a valuation allowance since we do not expect our Investment Management segment to realize its deferred tax assets.
Net Income Attributable to Noncontrolling Interests
For the year ended December 31, 2020, net income attributable to noncontrolling interests2022, within our Investment Management segment was comprised of a gain of $9.9 million recognized on the redemption of noncontrolling interests in the special general partner interests previously held by the respective subadvisors for CWI 1 and CWI 2segment. During 2022, in connection with the CWI 1 and CWI 2CPA:18 Merger, (Note 3).we incurred one-time current taxes upon the recognition of taxable income associated with the accelerated vesting of shares previously issued by CPA:18 – Global to us for asset management services performed.
Liquidity and Capital Resources
Sources and Uses of Cash During the Year
We use the cash flow generated from our investments primarily to meet our operating expenses, service debt, and fund dividends to stockholders. Our cash flows fluctuate periodically due to a number of factors, which may include, among other things: the timing of our equity and debt offerings; the timing of purchases and sales of real estate; the timing of the repayment of mortgage loans, our Senior Unsecured Notes, and our Unsecured Term Loans; the timing of our receipt of lease revenues; the timing and amount of other lease-related payments; the timing of settlement of foreign currency transactions; changes in foreign currency exchange rates; the receipt of asset management fees in either shares of the common stock of CPA:18 – Global or cash;and the timing of distributions from equity investments in the Managed Programsmethod investments. We no longer receive certain fees and real estate; and the receipt of distributions of Available Cash from CPA:18 – Global.Global following the completion of the CPA:18 Merger on August 1, 2022 (Note 4). Despite these fluctuations, we believe that we will generate sufficient cash from operations to meet our normal recurring short-term and long-term liquidity needs. We may also use existing cash resources, available capacity under our Senior Unsecured Credit Facility, proceeds from term loans or other bank debt, proceeds from dispositions of properties (including expected proceeds from the exercise of purchase options and the Office Sale Program (Note 1)), and the issuance of additional debt or equity securities, such as issuances of common stock through our Equity Forwards and ATM Program (Note 1214), in order to meet theseour short-term and long-term liquidity needs. We assess our ability to access capital on an ongoing basis. Our sources and uses of cash during the period are described below.
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| W. P. Carey 2023 10-K– 42 |
Operating Activities — Net cash provided by operating activities increased by $124.9$69.9 million during 20212023 as compared to 2020,2022, primarily due to an increase in cash flow generated from net investment activity (including properties acquired in the CPA:18 Merger (Note 4)) and scheduled rent increases at existing properties, partially offset by higher lease termination and other income, the positive impact on rent collections as businesses recovered from the effects of the COVID-19 pandemic, lower interest expense and cash dividends received from our investments in sharesthe impact of Lineage Logistics and WLT during the current yearSpin-Off (Note 83).
Investing Activities — Our investing activities are generally comprised of real estate-related transactions (purchases and sales) and funding for build-to-suit activities and other capital expenditures on real estate. In addition to these types of transactions, during the year ended December 31, 2021, we used $41.0 million to fund short-term loans to the Managed Programs, while $62.0 million of such loans were repaid (Note 3). We also received $14.0$28.0 million from repayments of loans receivable and $10.5 million in distributions from equity method investments.
Financing Activities — Our financing activities are generally comprised of borrowings and repayments under our Unsecured Revolving Credit Facility and Unsecured Term Loans, issuances and repayments of the Senior Unsecured Notes, payments and prepayments of non-recourse mortgage loans, issuances of common equity, and payments of dividends to stockholders. In addition to these types of transactions, during the year ended December 31, 2021,2023, we (i) redeemedreceived $343.9 million in proceeds in connection with the €500.0 million of 2.0% Senior Notes due 2023 for a total of $617.4 millionSpin-Off (Note 10), (ii) received $697.0 million in net proceeds from the issuance of common stock under our Equity Forwards (Note 12), and (iii) received $340.0 million in net proceeds from the issuance of common stock under our ATM Program (Note 123).
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| W. P. Carey 2021 10-K– 39
|
Summary of Financing
The table below summarizes our Senior Unsecured Notes, our non-recourse mortgages, and our Senior Unsecured Credit Facility (dollars in thousands):
| | December 31, |
| 2021 | | 2020 |
| December 31, | | | December 31, |
| 2023 | | | 2023 | | 2022 |
| Carrying Value | Carrying Value | | | |
| Fixed rate: | Fixed rate: | |
| Fixed rate: | |
| Fixed rate: | |
Senior Unsecured Notes (a) | Senior Unsecured Notes (a) | $ | 5,701,913 | | | $ | 5,146,192 | |
Non-recourse mortgages (a) | 235,898 | | | 920,378 | |
| 5,937,811 | | | 6,066,570 | |
Senior Unsecured Notes (a) | |
Senior Unsecured Notes (a) | |
Unsecured Term Loans subject to interest rate swaps (a) | |
Non-recourse mortgages (a) (b) | |
| 7,098,658 | |
| Variable rate: | Variable rate: | | | |
Unsecured Term Loans (a) | |
Unsecured Term Loans (a) | |
Unsecured Term Loans (a) | |
| Unsecured Revolving Credit Facility | Unsecured Revolving Credit Facility | 410,596 | | | 82,281 | |
Unsecured Term Loans (a) | 310,583 | | | 321,971 | |
Non-recourse mortgages (a): | Non-recourse mortgages (a): | |
| Amount subject to interest rate swaps and caps | 79,055 | | | 147,094 | |
| Floating interest rate mortgage loans | Floating interest rate mortgage loans | 53,571 | | | 78,082 | |
| 853,805 | | | 629,428 | |
| $ | 6,791,616 | | | $ | 6,695,998 | |
| Floating interest rate mortgage loans | |
| Floating interest rate mortgage loans | |
| Amount subject to interest rate caps | |
| 1,045,524 | |
| $ | |
| | Percent of Total Debt | Percent of Total Debt | |
| Percent of Total Debt | |
| Percent of Total Debt | |
| Fixed rate | |
| Fixed rate | |
| Fixed rate | Fixed rate | 87 | % | | 91 | % | 87 | % | | 87 | % |
| Variable rate | Variable rate | 13 | % | | 9 | % | Variable rate | 13 | % | | 13 | % |
| | | 100 | % | | 100 | % | | 100 | % | | 100 | % |
| Weighted-Average Interest Rate at End of Year | Weighted-Average Interest Rate at End of Year | | | |
| Fixed rate | Fixed rate | 2.7 | % | | 3.0 | % |
Variable rate (b) | 1.1 | % | | 1.6 | % |
| Fixed rate | |
| Fixed rate | | 2.9 | % | | 2.9 | % |
Variable rate (c) | | Variable rate (c) | 5.1 | % | | 3.5 | % |
| Total debt | Total debt | 2.5 | % | | 2.9 | % | Total debt | 3.2 | % | | 3.0 | % |
____________
(a)Aggregate debt balance includes unamortized discount, net, totaling $30.9$31.8 million and $28.3$35.9 million as of December 31, 20212023 and 2020,2022, respectively, and unamortized deferred financing costs totaling $28.8$21.5 million and $24.3$26.0 million as of December 31, 20212023 and 2020,2022, respectively.
(b)Includes non-recourse mortgages subject to variable-to-fixed interest rate swaps totaling $45.0 million and $83.0 million as of December 31, 2023 and 2022, respectively.
(c)The impact of our interest rate swaps and caps is reflected in the weighted-average interest rates.
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| W. P. Carey 2023 10-K– 43 |
Cash Resources
At December 31, 2021,2023, our cash resources consisted of the following:
•cash and cash equivalents totaling $165.4$633.9 million. Of this amount, $74.1$203.1 million, at then-current exchange rates, was held in foreign subsidiaries, and we could be subject to restrictions or significant costs should we decide to repatriate these amounts;
•our Unsecured Revolving Credit Facility, with available capacity of $1.4$1.6 billion (net of amounts reserved for standby letters of credit totaling $1.2$6.5 million);
•available proceeds under our Equity Forwards of approximately $293.7 million (based on 3,925,000 remaining shares outstanding and a net offering price of $74.84 per share as of December 31, 2021); and
•unleveraged properties that had an aggregate asset carrying value of approximately $12.4$13.6 billion at December 31, 2021,2023, although there can be no assurance that we would be able to obtain financing for these properties.
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| W. P. Carey 2021 10-K– 40
|
Historically, we haveWe may also accessedaccess the capital markets through additional debt (denominated in both U.S. dollars and euros) and equity offerings. During the year ended December 31, 2021, we issued (i) €525.0 million of 0.950% Senior Notes due 2030, $425.0 million of 2.250% Senior Notes due 2033,offerings, as well as term loans and $350.0 million of 2.450% Senior Notes due 2032 (our inaugural green bond offering) (Note 11), (ii) 9,798,209 shares of common stock under our Equity Forwards for aggregate net proceeds of $697.0 million (Note 12), and (iii) 4,690,073 shares of common stock under our ATM Program for net proceeds of $340.0 million (Note 12). As of December 31, 2021, we had approximately $293.7 million of available proceeds under our Equity Forwards and $272.1 million remained available for issuance under our current ATM Program (Note 12). See Note 17, Subsequent Events for issuances under our current ATM Program subsequent to December 31, 2021 and through the date of this Report.other bank debt.
Our cash resources can be used for working capital needs and other commitments and may be used for future investments.
Cash Requirements and Liquidity
As of December 31, 2021,2023, we had $165.4(i) $633.9 million of cash and cash equivalents and (ii) approximately $1.4$1.6 billion of available capacity under our Unsecured Revolving Credit Facility (net of amounts reserved for standby letters of credit totaling $1.2$6.5 million), and available proceeds under our Equity Forwards of approximately $293.7 million (based on 3,925,000 remaining shares outstanding and a net offering price of $74.84 as of that date). Our Senior Unsecured Credit Facility includes (i) a $1.8$2.0 billion Unsecured Revolving Credit Facility and(scheduled to mature on February 14, 2029), (ii) our Unsecured Term Loans due 2028 totaling $576.5 million outstanding (scheduled to mature on February 14, 2028), and (iii) our Unsecured Term Loan due 2026 totaling $310.6$549.1 million outstanding (scheduled to mature on April 24, 2026), as of December 31, 20212023 (Note 1012), and is scheduled to mature on February 20, 2025.. As of December 31, 2021,2023, scheduled debt principal payments total $45.8$1.3 billion during 2024 and $707.3 million through December 31, 2022 and $236.7 million through December 31, 2023, and our Senior Unsecured Notes do not start to mature until April 2024during 2025 (Note 1012).
During the next 12 months following December 31, 20212023 and thereafter, we expect that our significant cash requirements will include:
•paying dividends to our stockholders;
•funding acquisitions of new investments (Note 6); •funding future capital commitments (Note 6) and tenant improvement allowances; •making scheduled principal and balloon payments on our debt obligations, including (i) $500 million of senior notes due in April 2024 and (ii) €500 million of senior notes due in July 2024 (Note 1012); •making scheduled interest payments on our debt obligations (future interest payments total $884.3$939.6 million, with $169.6$229.4 million due during the next 12 months; interest on unhedged variable-rate debt obligations was calculated using the applicable annual variable interest rates and balances outstanding at December 31, 2021);
•funding future capital commitments and tenant improvement allowances (Note 4)2023); and•other normal recurring operating expenses.
We expect to fund these cash requirements through cash generated from operations, cash received from dispositions of properties, the use of our cash reserves or unused amounts on our Unsecured Revolving Credit Facility (as described above), proceeds from term loans or other bank debt, issuances of common stock through our Equity Forwards and/or ATM Program (Note 1214), and potential issuances of additional debt or equity securities. We may also choose to pursue the acquisitions of new investments and prepayments ofprepay certain of our non-recourse mortgage loan obligations, depending on our capital needs and improvements in market conditions at that time.
Our liquidity could be adversely affected by unanticipated costs and greater-than-anticipated operating expenses, and the adverse impact of the COVID-19 pandemic.expenses. To the extent that our working capital reserve is insufficient to satisfy our cash requirements, additional funds may be provided from cash from operations to meet our normal recurring short-term and long-term liquidity needs. We may also use existing cash resources, available capacity under our Unsecured Revolving Credit Facility, mortgage loan proceeds, and the issuance of additional debt or equity securities to meet these needs. The extent to which the COVID-19 pandemic impacts our liquidity and debt covenants will depend on future developments, which are highly uncertain and cannot be predicted with confidence. The potential impact of the COVID-19 pandemic on our tenants and properties could also have a material adverse effect on our liquidity and debt covenants.
Certain amounts disclosed above are based on the applicable foreign currency exchange rate at December 31, 2021.2023.
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| W. P. Carey 20212023 10-K – 4144 |
Environmental Obligations
In connection with the purchase of many of our properties, we required the sellers to perform environmental reviews. We believe, based on the results of these reviews, that our properties were in substantial compliance with federal, state, and foreign environmental statutes at the time the properties were acquired. However, portions of certain properties have been subject to some degree of contamination, principally in connection with leakage from underground storage tanks, surface spills, or other on-site activities. In most instances where contamination has been identified, tenants are actively engaged in the remediation process and addressing identified conditions. We believe that the ultimate resolution of any environmental matters should not have a material adverse effect on our financial condition, liquidity, or results of operations. We record environmental obligations within Accounts payable, accrued expenses and other liabilities in the consolidated financial statements. See Item 1A. Risk Factors for further discussion of potential environmental risks.
Critical Accounting Estimates
Our significant accounting policies are described in Note 2. Many of these accounting policies require judgment and the use of estimates and assumptions when applying these policies in the preparation of our consolidated financial statements. On a quarterly basis, we evaluate these estimates and judgments based on historical experience as well as other factors that we believe to be reasonable under the circumstances. These estimates are subject to change in the future if underlying assumptions or factors change. Certain accounting policies, while significant, may not require the use of estimates. ThoseBelow is a summary of certain critical accounting estimates used in the preparation of our consolidated financial statements. Please also refer to our accounting policies that require significant estimation and/or judgment are described under Critical Accounting Policies and Estimates in Note 2. The proposed accounting changes that may potentially impact our business are also described under Recently Adopted Accounting Pronouncements in Note 2.
Accounting for Acquisitions
In accordance with the guidance for business combinations and asset acquisitions, we recognize the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquired entity. When we acquire properties with leases classified as operating leases, we allocate the purchase price to the tangible and intangible assets and liabilities acquired based on their estimated fair values.
The tangible assets consist of land, buildings, and site improvements. The intangible assets and liabilities include the above- and below-market value of leases and the in-place leases, which includes the value of tenant relationships. The recorded allocations of tangible and intangible assets incorporate discount rates, capitalization rates, interest rates, market rents, leasing commissions, and certain other assumptions and estimates. We use considerable judgment in developing such assumptions and estimates, and significant increases or decreases in these key assumptions and estimates would result in a significantly lower or higher fair value measurement of the real estate assets being acquired.
Impairments of Real Estate
For real estate assets held for investment and related intangible assets in which an impairment indicator is identified, we follow a two-step process to determine whether an asset is impaired and to determine the amount of the charge. First, we compare the carrying value of the property’s asset group to the estimated future net undiscounted cash flow that we expect the property’s asset group will generate, including any estimated proceeds from the eventual sale of the property’s asset group. The undiscounted cash flow analysis requires us to make our best estimate of market rents, residual values, and holding periods. We estimate market rents and residual values using market information from outside sources such as third-party market research, external appraisals, broker quotes, or recent comparable sales.
As our investment objective is to hold properties on a long-term basis, holding periods used in the undiscounted cash flow analysis are generally ten years, but may be less if our intent is to hold a property for less than ten years. Depending on the assumptions made and estimates used, the future cash flow projected in the evaluation of long-lived assets and associated intangible assets can vary within a range of outcomes. We consider the likelihood of possible outcomes in determining our estimate of future cash flows and, if warranted, we apply a probability-weighted method to the different possible scenarios. If the future net undiscounted cash flow of the property’s asset group is less than the carrying value, the carrying value of the property’s asset group is considered not recoverable. We then measure the impairment loss as the excess of the carrying value of the property’s asset group over its estimated fair value.
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| W. P. Carey 2023 10-K– 45 |
Supplemental Financial Measures
In the real estate industry, analysts and investors employ certain non-GAAP supplemental financial measures in order to facilitate meaningful comparisons between periods and among peer companies. Additionally, in the formulation of our goals and in the evaluation of the effectiveness of our strategies, we use Funds from Operations (“FFO”) and AFFO, which are non-GAAP measures defined by our management. We believe that these measures are useful to investors to consider because they may assist them to better understand and measure the performance of our business over time and against similar companies. A description of FFO and AFFO and reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are provided below.
Funds from Operations and Adjusted Funds from Operations
Due to certain unique operating characteristics of real estate companies, as discussed below, the National Association of Real Estate Investment Trusts Inc. (“NAREIT”), an industry trade group, has promulgated a non-GAAP measure known as FFO, which we believe to be an appropriate supplemental measure, when used in addition to and in conjunction with results presented in accordance with GAAP, to reflect the operating performance of a REIT. The use of FFO is recommended by the REIT industry as a supplemental non-GAAP measure. FFO is not equivalent to, nor a substitute for, net income or loss as determined under GAAP.
We define FFO, a non-GAAP measure, consistent with the standards established by the White Paper on FFO approved by the Board of Governors of NAREIT, as restated in December 2018. The White Paper defines FFO as net income or loss computed in accordance with GAAP, excluding gains or losses from salesthe sale of property,certain real estate, impairment charges on real estate or other assets incidental to the company’s main business, gains or losses on changes in control of interests in real estate, and depreciation and amortization from real estate assets; and after adjustments for unconsolidated partnerships and jointly owned investments. Adjustments for unconsolidated partnerships and jointly owned investments are calculated to reflect FFO.FFO on the same basis.
We also modify the NAREIT computation of FFO to adjust GAAP net income for certain non-cash charges, such as amortization of real estate-related intangibles, deferred income tax benefits and expenses, straight-line rent and related reserves, other non-cash rent adjustments, non-cash allowance for credit losses on loans receivable and direct financingfinance leases, stock-based compensation, non-cash environmental accretion expense, amortization of discounts and premiums on debt, and amortization of deferred financing costs. Our assessment of our operations is focused on long-term sustainability and not on such non-cash items, which may cause short-term fluctuations in net income but have no impact on cash flows. Additionally, we exclude non-core income and expenses, such as gains or losses from extinguishment of debt, and merger and acquisition expenses, and spin-off expenses. We also exclude realized and unrealized gains/losses on foreign currency exchange transactionsrate movements (other than those
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| W. P. Carey 2021 10-K– 42
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realized on the settlement of foreign currency derivatives), which are not considered fundamental attributes of our business plan and do not affect our overall long-term operating performance. We refer to our modified definition of FFO as AFFO. We exclude these items from GAAP net income to arrive at AFFO as they are not the primary drivers in our decision-making process and excluding these items provides investors a view of our portfolio performance over time and makes it more comparable to other REITs that are currently not engaged in acquisitions, mergers, and restructuring, which are not part of our normal business operations. AFFO also reflects adjustments for unconsolidated partnerships and jointly owned investments. We use AFFO as one measure of our operating performance when we formulate corporate goals, evaluate the effectiveness of our strategies, and determine executive compensation.
We believe that AFFO is a useful supplemental measure for investors to consider as we believe it will help them to better assess the sustainability of our operating performance without the potentially distorting impact of these short-term fluctuations. However, there are limits on the usefulness of AFFO to investors. For example, impairment charges and unrealized foreign currency losses that we exclude may become actual realized losses upon the ultimate disposition of the properties in the form of lower cash proceeds or other considerations. We use our FFO and AFFO measures as supplemental financial measures of operating performance. We do not use our FFO and AFFO measures as, nor should they be considered to be, alternatives to net income computed under GAAP, or as alternatives to net cash provided by operating activities computed under GAAP, or as indicators of our ability to fund our cash needs.
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| W. P. Carey 2023 10-K– 46 |
Consolidated FFO and AFFO were as follows (in thousands):
| | Years Ended December 31, |
| 2021 | | 2020 |
| Years Ended December 31, | | | Years Ended December 31, |
| 2023 | | | 2023 | | 2022 |
| Net income attributable to W. P. Carey | Net income attributable to W. P. Carey | $ | 409,988 | | | $ | 455,359 | |
| Adjustments: | Adjustments: | |
| Depreciation and amortization of real property | Depreciation and amortization of real property | 470,554 | | | 437,885 | |
| Gain on sale of real estate, net | (40,425) | | | (109,370) | |
| Impairment charges | 24,246 | | | 35,830 | |
Proportionate share of adjustments to earnings from equity method investments (a) (b) (c) (d) | 32,213 | | | 46,679 | |
Proportionate share of adjustments for noncontrolling interests (e) | (16) | | | (18) | |
| Depreciation and amortization of real property | |
| Depreciation and amortization of real property | |
Gain on sale of real estate, net (a) | |
Impairment charges — real estate (b) | |
Gain on change in control of interests (c) (d) | |
Impairment charges — Investment Management goodwill (e) | |
Proportionate share of adjustments to earnings from equity method investments (f) (g) | |
Proportionate share of adjustments for noncontrolling interests (h) | |
| Total adjustments | Total adjustments | 486,572 | | | 411,006 | |
| FFO (as defined by NAREIT) attributable to W. P. Carey | FFO (as defined by NAREIT) attributable to W. P. Carey | 896,560 | | | 866,365 | |
| Adjustments: | Adjustments: | | | |
Straight-line and other leasing and financing adjustments (f) | (83,267) | | | (41,498) | |
| Straight-line and other leasing and financing adjustments | |
| Straight-line and other leasing and financing adjustments | |
| Straight-line and other leasing and financing adjustments | |
Other (gains) and losses (i) | |
| Stock-based compensation | |
| Above- and below-market rent intangible lease amortization, net | Above- and below-market rent intangible lease amortization, net | 53,585 | | | 48,712 | |
| Stock-based compensation | 24,881 | | | 15,938 | |
| Amortization of deferred financing costs | Amortization of deferred financing costs | 13,523 | | | 12,223 | |
Other (gains) and losses (g) | 12,885 | | | (37,165) | |
Tax (benefit) expense — deferred and other (h) (i) (j) | (5,967) | | | (48,835) | |
Merger and other expenses (k)(j) | Merger and other expenses (k)(j) | (4,546) | | | 247 | |
| Other amortization and non-cash items | Other amortization and non-cash items | 1,709 | | | 1,864 | |
Proportionate share of adjustments to earnings from equity method investments (d) | 12,152 | | | 10,821 | |
Proportionate share of adjustments for noncontrolling interests (e) | (24) | | | 414 | |
| Tax expense (benefit) — deferred and other | |
Proportionate share of adjustments to earnings from equity method investments (g) | |
Proportionate share of adjustments for noncontrolling interests (h) | |
| Total adjustments | Total adjustments | 24,931 | | | (37,279) | |
| AFFO attributable to W. P. Carey | AFFO attributable to W. P. Carey | $ | 921,491 | | | $ | 829,086 | |
| | Summary | Summary | |
| Summary | |
| Summary | |
| FFO (as defined by NAREIT) attributable to W. P. Carey | |
| FFO (as defined by NAREIT) attributable to W. P. Carey | |
| FFO (as defined by NAREIT) attributable to W. P. Carey | FFO (as defined by NAREIT) attributable to W. P. Carey | $ | 896,560 | | | $ | 866,365 | |
| AFFO attributable to W. P. Carey | AFFO attributable to W. P. Carey | $ | 921,491 | | | $ | 829,086 | |
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| W. P. Carey 20212023 10-K – 4347 |
FFO and AFFO from Real Estate were as follows (in thousands):
| | Years Ended December 31, |
| 2021 | | 2020 |
| Years Ended December 31, | | | Years Ended December 31, |
| 2023 | | | 2023 | | 2022 |
| Net income from Real Estate attributable to W. P. Carey | Net income from Real Estate attributable to W. P. Carey | $ | 384,766 | | | $ | 459,512 | |
| Adjustments: | Adjustments: | |
| Depreciation and amortization of real property | Depreciation and amortization of real property | 470,554 | | | 437,885 | |
| Gain on sale of real estate, net | (40,425) | | | (109,370) | |
| Impairment charges | 24,246 | | | 35,830 | |
Proportionate share of adjustments to earnings from equity method investments (a) (d) | 32,213 | | | 22,036 | |
| Depreciation and amortization of real property | |
| Depreciation and amortization of real property | |
Gain on sale of real estate, net (a) | |
Impairment charges — real estate (b) | |
Gain on change in control of interests (c) | |
Proportionate share of adjustments to earnings from equity method investments (f) (g) | |
Proportionate share of adjustments for noncontrolling interests (e)(h) | Proportionate share of adjustments for noncontrolling interests (e)(h) | (16) | | | (18) | |
| Total adjustments | Total adjustments | 486,572 | | | 386,363 | |
| FFO (as defined by NAREIT) attributable to W. P. Carey — Real Estate | FFO (as defined by NAREIT) attributable to W. P. Carey — Real Estate | 871,338 | | | 845,875 | |
| Adjustments: | Adjustments: | | | |
Straight-line and other leasing and financing adjustments (f) | Straight-line and other leasing and financing adjustments (f) | (83,267) | | | (41,498) | |
Straight-line and other leasing and financing adjustments (f) | |
Straight-line and other leasing and financing adjustments (f) | |
Other (gains) and losses (i) | |
| Stock-based compensation | |
| Above- and below-market rent intangible lease amortization, net | Above- and below-market rent intangible lease amortization, net | 53,585 | | | 48,712 | |
| Stock-based compensation | 24,881 | | | 15,247 | |
Other (gains) and losses (g) | 13,676 | | | (37,104) | |
| Amortization of deferred financing costs | Amortization of deferred financing costs | 13,523 | | | 12,223 | |
Tax (benefit) expense — deferred and other (i) | (4,938) | | | (45,511) | |
Merger and other expenses (k) | (4,597) | | | (937) | |
Merger and other expenses (j) | |
| Other amortization and non-cash items | Other amortization and non-cash items | 1,709 | | | 1,665 | |
| Tax benefit — deferred and other | |
Proportionate share of adjustments to earnings from equity method investments (d)(g) | Proportionate share of adjustments to earnings from equity method investments (d)(g) | 10,253 | | | 5,089 | |
Proportionate share of adjustments for noncontrolling interests (e)(h) | Proportionate share of adjustments for noncontrolling interests (e)(h) | (24) | | | 414 | |
| Total adjustments | Total adjustments | 24,801 | | | (41,700) | |
| AFFO attributable to W. P. Carey — Real Estate | AFFO attributable to W. P. Carey — Real Estate | $ | 896,139 | | | $ | 804,175 | |
| | Summary | Summary | |
| Summary | |
| Summary | |
| FFO (as defined by NAREIT) attributable to W. P. Carey — Real Estate | |
| FFO (as defined by NAREIT) attributable to W. P. Carey — Real Estate | |
| FFO (as defined by NAREIT) attributable to W. P. Carey — Real Estate | FFO (as defined by NAREIT) attributable to W. P. Carey — Real Estate | $ | 871,338 | | | $ | 845,875 | |
| AFFO attributable to W. P. Carey — Real Estate | AFFO attributable to W. P. Carey — Real Estate | $ | 896,139 | | | $ | 804,175 | |
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| W. P. Carey 20212023 10-K – 4448 |
FFO and AFFO from Investment Management were as follows (in thousands):
| | Years Ended December 31, |
| 2021 | | 2020 |
| Net income (loss) from Investment Management attributable to W. P. Carey | $ | 25,222 | | | $ | (4,153) | |
| Years Ended December 31, | | | Years Ended December 31, |
| 2023 | | | 2023 | | 2022 |
| Net income from Investment Management attributable to W. P. Carey | |
| Adjustments: | Adjustments: | |
Proportionate share of adjustments to earnings from equity method investments (b) (c) (d) | — | | | 24,643 | |
Impairment charges — Investment Management goodwill (e) | |
Impairment charges — Investment Management goodwill (e) | |
Impairment charges — Investment Management goodwill (e) | |
Gain on change in control of interests (d) | |
| Total adjustments | Total adjustments | — | | | 24,643 | |
| FFO (as defined by NAREIT) attributable to W. P. Carey — Investment Management | FFO (as defined by NAREIT) attributable to W. P. Carey — Investment Management | 25,222 | | | 20,490 | |
| Adjustments: | Adjustments: | | | |
Tax (benefit) expense — deferred and other (h) (j) | (1,029) | | | (3,324) | |
Other (gains) and losses (g) | (791) | | | (61) | |
Other (gains) and losses (i) | |
Other (gains) and losses (i) | |
Other (gains) and losses (i) | |
| Tax expense — deferred and other | |
| Merger and other expenses | Merger and other expenses | 51 | | | 1,184 | |
| Stock-based compensation | — | | | 691 | |
| Other amortization and non-cash items | — | | | 199 | |
Proportionate share of adjustments to earnings from equity method investments (d) | 1,899 | | | 5,732 | |
Proportionate share of adjustments to earnings from equity method investments (g) | |
| Total adjustments | Total adjustments | 130 | | | 4,421 | |
| AFFO attributable to W. P. Carey — Investment Management | AFFO attributable to W. P. Carey — Investment Management | $ | 25,352 | | | $ | 24,911 | |
| | Summary | Summary | |
| Summary | |
| Summary | |
| FFO (as defined by NAREIT) attributable to W. P. Carey — Investment Management | |
| FFO (as defined by NAREIT) attributable to W. P. Carey — Investment Management | |
| FFO (as defined by NAREIT) attributable to W. P. Carey — Investment Management | FFO (as defined by NAREIT) attributable to W. P. Carey — Investment Management | $ | 25,222 | | | $ | 20,490 | |
| AFFO attributable to W. P. Carey — Investment Management | AFFO attributable to W. P. Carey — Investment Management | $ | 25,352 | | | $ | 24,911 | |
__________
(a)Amounts for the years ended December 31, 2021 and 2020 include non-cash other-than-temporary impairment charges totaling $6.8 million and $8.3 million, respectively, recognized on certain equity method investments in real estate (Note 7, Note 8). Amount for the year ended December 31, 20212023 includes (i) a gain on sale of real estate of $176.2 million recognized upon receiving notice of the exercise of a purchase option for a portfolio of 78 net-lease self-storage properties and the reclassification of the investment to net investments in sales-type leases and (ii) a gain on sale of real estate of $59.1 million recognized upon entering into an agreement to sell our portfolio of 70 office properties located in Spain to the tenant occupying the properties and the reclassification of the investment to net investments in sales-type leases (Note 7). (b)Amount for the year ended December 31, 2023 includes an impairment charge of $47.3 million recognized on the 59 properties contributed to NLOP in connection with the Spin-Off (Note 1, Note 10). (c)Amount for the year ended December 31, 2022 represents a gain recognized on the remaining interests in four investments acquired in the CPA:18 Merger, which we had previously accounted for under the equity method (Note 4). (d)Amount for the year ended December 31, 2022 represents a gain recognized on our previously held interest in shares of CPA:18 – Global common stock in connection with the CPA:18 Merger (Note 4). (e)Amount for the year ended December 31, 2022 represents an impairment charge recognized on goodwill within our Investment Management segment, since future Investment Management cash flows are expected to be minimal (Note 8, Note 10). (f)Amount for the year ended December 31, 2022 includes our $13.2$4.6 million proportionate share of an impairment charge recognized on an equity method investment in real estate (Note 79). (b)Amount for the year ended December 31, 2020 includes a non-cash net gain of $33.0 million (inclusive of $9.9 million attributable to the redemption of a noncontrolling interest that the former subadvisors for CWI 1 and CWI 2 held in the special general partner interests) recognized in connection with consideration received at closing of the CWI 1 and CWI 2 Merger (Note 3, Note 6).(c)Amount for the year ended December 31, 2020 includes non-cash other-than-temporary impairment charges totaling $47.1 million recognized on our equity investments in CWI 1 and CWI 2 (Note 8).(d)(g)Equity income, including amounts that are not typically recognized for FFO and AFFO, is recognized within Earnings (losses) from equity method investments on the consolidated statements of income. This represents adjustments to equity income to reflect FFO and AFFO on a pro rata basis.
(e)(h)Adjustments disclosed elsewhere in this reconciliation are on a consolidated basis. This adjustment reflects our FFO or AFFO on a pro rata basis.
(f)Amount for the year ended December 31, 2021 includes an adjustment to exclude $37.8 million of lease termination fees received from a tenant, as such amount was determined to be non-core income (Note 4).(g)(i)Primarily comprised of gains and losses on extinguishment of debt, the mark-to-market fair value of equity securities, and foreign currency transactions,exchange rate movements, as well as non-cash allowance for credit losses on loans receivable and direct financingfinance leases.
(h)Amount for the year ended December 31, 2020 includes one-time taxes incurred upon the recognition of taxable income associated with the accelerated vesting of shares (previously issued by CWI 1 and CWI 2 to us for asset management services performed) in connection with the CWI 1 and CWI 2 Merger.
(i)Amount for the year ended December 31, 2020 includes a non-cash deferred tax benefit of $37.2 million as a result of the release of a deferred tax liability relating to our investment in shares of Lineage Logistics, which converted to a REIT during the prior year and is therefore no longer subject to federal and state income taxes (Note 14).(j)Amount for the year ended December 31, 2020 includes a one-time tax benefit2023 is primarily comprised of $4.7 million as a result of carrying back certain net operating lossescosts incurred in accordanceconnection with the CARES Act, which was enacted on March 27, 2020Spin-Off (Note 141, Note 3). | | | | | |
| W. P. Carey 2021 10-K– 45
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(k)Amount for the year ended December 31, 20212022 is primarily comprised of reversals of estimated liabilities for German real estate transfer taxes that were previously recordedcosts incurred in connection with business combinations in prior years.the CPA:18 Merger (Note 4).
While we believe that FFO and AFFO are important supplemental measures, they should not be considered as alternatives to net income as an indication of a company’s operating performance. These non-GAAP measures should be used in conjunction with net income as defined by GAAP. FFO and AFFO, or similarly titled measures disclosed by other REITs, may not be comparable to our FFO and AFFO measures.
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| W. P. Carey 20212023 10-K – 4649 |
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
Market Risk
Market risk is the exposure to loss resulting from changes in interest rates, foreign currency exchange rates, and equity prices. The primary market risks that we are exposed to are interest rate risk and foreign currency exchange risk; however, we do not use derivative instruments to hedge credit/market risks or for speculative purposes. From time to time, we may enter into foreign currency collars to hedge our foreign currency cash flow exposures.
We are also exposed to further market risk as a result of tenant concentrations in certain industries and/or geographic regions, since adverse market factors (such as the COVID-19 pandemic) can affect the ability of tenants in a particular industry/region to meet their respective lease obligations. In order to manage this risk, we view our collective tenant roster as a portfolio and we attempt to diversify such portfolio so that we are not overexposed to a particular industry or geographic region.
Interest Rate Risk
The values of our real estate and related fixed-rate debt obligations, as well as the values of our unsecured debt obligations, are subject to fluctuations based on changes in interest rates. The value of our real estate is also subject to fluctuations based on local and regional economic conditions (including the ongoing impact of the COVID-19 pandemic) and changes in the creditworthiness of lessees, which may affect our ability to refinance property-level mortgage debt when balloon payments are scheduled, if we do not choose to repay the debt when due. Interest rates are highly sensitive to many factors, including governmental monetary and tax policies, domestic and international economic and political conditions, and other factors beyond our control. An increase in interest rates would likely cause the fair value of our owned and managed assets to decrease, which would create lower revenues from managed assets and lower investment performance for the Managed Programs.decrease. Increases in interest rates may also have an impact on the credit profile of certain tenants.
We are exposed to the impact of interest rate changes primarily through our borrowing activities. To limit this exposure, we generally seek long-term debt financing on a fixed-rate basis. However, from timewe are subject to time, we orvariable-rate interest on our joint investment partners obtained,Unsecured Term Loans, Unsecured Revolving Credit Facility, and may in the future obtain, variable-ratecertain of our non-recourse mortgage loans and, as a result, wedebt. We have entered into, and may continue to enter into, interest rate swap agreements or interest rate cap agreements with counterparties.counterparties related to certain of our variable-rate debt. See Note 911 for additional information on our interest rate swaps and caps.
At December 31, 2021, a significant portion (approximately 88.6%) of our long-term debt either bore interest at fixed rates or was swapped or capped to a fixed rate. Our debt obligations are more fully described in Note 1012 and Liquidity and Capital Resources — Summary of Financing in Item 7 above. The following table presents principal cash flows based upon expected maturity dates of our debt obligations outstanding at December 31, 20212023 (in thousands): | | 2022 | | 2023 | | 2024 | | 2025 | | 2026 | | Thereafter | | Total | | Fair Value |
| 2024 | | | 2024 | | 2025 | | 2026 | | 2027 | | 2028 | | Thereafter | | Total | | Fair Value |
Fixed-rate debt (a) (b) | Fixed-rate debt (a) (b) | $ | 26,974 | | | $ | 91,643 | | | $ | 1,090,626 | | | $ | 509,741 | | | $ | 948,371 | | | $ | 3,328,988 | | | $ | 5,996,343 | | | $ | 6,222,246 | |
Variable-rate debt (a) | Variable-rate debt (a) | $ | 18,813 | | | $ | 99,278 | | | $ | 14,828 | | | $ | 722,075 | | | $ | — | | | $ | — | | | $ | 854,994 | | | $ | 853,002 | |
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(a)Amounts are based on the exchange rate at December 31, 2021,2023, as applicable.
(b)Amounts after 2023include non-recourse mortgages and unsecured term loans subject to variable-to-fixed interest rate swaps. Amounts are primarily comprised of principal payments for our Senior Unsecured Notes (Note 1012).
The estimated fair value of our fixed-rate debt and our variable-rate debt that currently bears interest at fixed rates or has effectively been converted to a fixed rate through the use of interest rate swaps, or that has been subject to interest rate caps, is affected by changes in interest rates. Annual interest expense on our unhedged variable-rate debt that does not bear interest at fixed rates at December 31, 20212023 would increase or decrease by $3.9$6.9 million for our euro-denominated debt, by $3.4 million for our British pound sterling-denominated debt, by $3.7 million for our euro-denominated debt, and by $0.2 million for our Japanese yen-denominated debt for each respective 1% change in annual interest rates.
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| W. P. Carey 20212023 10-K – 4750 |
Foreign Currency Exchange Rate Risk
We own international investments, primarily in Europe, Canada, and Japan, and as a result are subject to risk from the effects of exchange rate movements in various foreign currencies, primarily the euro, the British pound sterling, the Canadian dollar, and the Japanese yen, and certain other currencies which may affect future costs and cash flows. We have obtained, and may in the future obtain, non-recourse mortgage financing in the local currency. We have also completed several offerings of euro-denominated senior notes, and have borrowed under our Senior Unsecured Credit Facility in foreign currencies, including the euro, British pound sterling, and Japanese yen (Note 1012). Volatile market conditions arising from the ongoing effects of the COVID-19 global pandemic, as well as othercertain macroeconomic factors may result in significant fluctuations in foreign currency exchange rates. To the extent that currency fluctuations increase or decrease rental revenues, as translated to U.S. dollars, the change in debt service (comprised of principal and interest, excluding balloon payments), as translated to U.S. dollars, will partially offset the effect of fluctuations in revenue and, to some extent, mitigate the risk from changes in foreign currency exchange rates. We estimate that, for a 1% increase or decrease in the exchange rate between the euro, British pound sterling, or Japanese yen and the U.S. dollar, there would be a corresponding change in the projected estimated cash flow (scheduled future rental revenues, net of scheduled future debt service payments for the next 12 months) for our consolidated foreign operations at December 31, 20212023 of $2.5$2.6 million, $0.6$0.3 million, and less than $0.1 million, respectively, excluding the impact of our derivative instruments.
In addition, we may use currency hedging to further reduce the exposure to our equity cash flow. We are generally a net receiver of these currencies (we receive more cash than we pay out), and therefore our foreign operations benefit from a weaker U.S. dollar and are adversely affected by a stronger U.S. dollar, relative to the foreign currency.
We enter into foreign currency collars to hedge certain of our foreign currency cash flow exposures. See Note 911 for additional information on our foreign currency collars.
Concentration of Credit Risk
Concentrations of credit risk arise when a number of tenants are engaged in similar business activities or have similar economic risks or conditions that could cause them to default on their lease obligations to us. We regularly monitor our portfolio to assess potential concentrations of credit risk. While we believe our portfolio is well-diversified, it does contain concentrations in certain areas.
For the year ended December 31, 2021,2023, our consolidated portfolio had the following significant characteristics in excess of 10%, based on the percentage of our consolidated total revenues:
•65%66% related to domestic operations; and
•35%34% related to international operations.
At December 31, 2021,2023, our net-lease portfolio, which excludes our operating properties, had the following significant property and lease characteristics in excess of 10% in certain areas, based on the percentage of our ABR as of that date:
•63%58% related to domestic properties;
•37%42% related to international properties;
•26%32% related to industrial facilities, 24%26% related to warehouse facilities, 20% related to office facilities, and 18%21% related to retail facilities; and
•22%23% related to the retail stores industry (including automotive dealerships).
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| W. P. Carey 20212023 10-K – 4851 |
Item 8. Financial Statements and Supplementary Data.
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Financial statement schedules other than those listed above are omitted because the required information is given in the financial statements, including the notes thereto, or because the conditions requiring their filing do not exist.
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| W. P. Carey 20212023 10-K – 4952 |
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders of W. P. Carey Inc.
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of W. P. Carey Inc. and its subsidiaries (the “Company”) as of December 31, 20212023 and 2020,2022, and the related consolidated statements of income, of comprehensive income, of equity and of cash flows for each of the three years in the period ended December 31, 2021,2023, including the related notes and financial statement schedules listed in the accompanying index (collectively referred to as the “consolidated financial statements”). We also have audited the Company’s internal control over financial reporting as of December 31, 2021,2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 20212023 and 20202022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 20212023 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021,2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by the COSO.
Basis for Opinions
The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control Overover Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
| | | | | |
| W. P. Carey 20212023 10-K – 5053 |
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Purchase Price Allocation for Asset Acquisitions
As described in Notes 2 4, and 56 to the consolidated financial statements, the Company completed real estate acquisitions for total consideration of $1.5$1.2 billion during the year ended December 31, 2021.2023. For acquired properties with leases classified as operating leases, management allocatedallocates the purchase price to the tangible and intangible assets and liabilities based on their estimated fair values. Management determines the fair value of real estate under the income approach using either the discounted cash flow method or the direct capitalization method. For the discounted cash flow method, the fair value of real estate is determined (i) by applying a discounted cash flow analysis to the estimated net operating income for each property in the portfolio during the remaining anticipated lease term and (ii) by the estimated residual value, which is based on a hypothetical sale of the property upon expiration of a lease factoring in the re-tenanting of such property at estimated market rental rates, and applying a selected capitalization rate. For the direct capitalization method, the fair value of real estate is determined (i) by the stabilized estimated net operating income for each property in the portfolio and (ii) a selected capitalization rate. For any acquisitions that do not qualify as sale-leaseback transactions, management records above- and below-market lease intangible assets and liabilities for acquired properties based on the present value, using a discount rate reflecting the risks associated with the leases acquired. For acquired properties with tenants in place, management records in-place lease intangible assets based on the estimated value ascribed to the avoidance of costs of leasing the properties for the remaining primary in-place lease terms.
The principal considerations for our determination that performing procedures relating to the purchase price allocation for acquisitions is a critical audit matter are (i) the significant judgment by management to determinewhen developing the estimated fair value measurements of tangible and intangible assets and liabilities to allocate the purchase price, which resulted inprice; (ii) a high degree of auditor judgment, and subjectivity in performing procedures relating to these fair value measurements; (ii) significant auditor judgment, subjectivity and effort in performing procedures and evaluating audit evidencemanagement’s significant assumptions related to the significant assumptions used in the fair value measurement of the tangible and intangible assets and liabilities, specifically the capitalization rates, market rental rates and discount rates;rates used in the discounted cash flow method for tangible and intangible assets and capitalization rates used in the direct capitalization method for tangible assets; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to purchase price allocations for acquisitions, including controls over management’s valuationdevelopment of the estimated fair value of the tangible and intangible assets and liabilities and controls over the review of thesignificant assumptions related to capitalization rates, market rental rates and discount rates assumptions.rates. These procedures also included, among others, for a sample of acquisitions (i) reading the executed purchase agreements and leasing documents; (ii) using professionals with specialized skill and knowledge to assist in testing management’s process for estimatingdeveloping the estimated fair value of tangible and intangible assets and liabilities byliabilities; (iii) evaluating the appropriateness of the valuation methodsdiscounted cash flow and direct capitalization methods; (iv) testing the completeness and accuracy of underlying data used in the discounted cash flow and direct capitalization methods; (v) evaluating the reasonableness of the significant assumptions relatingused by management related to the capitalization rates, market rental rates and discount rates which involved considering comparable market dataused in the discounted cash flow method for tangible and other industry factors; (iii)intangible assets and capitalization rates used in the direct capitalization method for tangible assets. Professionals with specialized skill and knowledge were used to assist in evaluating (i) the accuracyappropriateness of the purchase price allocation;discounted cash flow and (iv) testingdirect capitalization methods and (ii) the completenessreasonableness of the significant assumptions related to capitalization rates, market rental rates, and accuracy of data provided by management.discount rates.
| | | | | |
| W. P. Carey 2023 10-K– 54 |
/s/ PricewaterhouseCoopers LLP
New York, New York
February 11, 20229, 2024
We have served as the Company’s auditor since 1973, which includes periods before the Company became subject to SEC reporting requirements.
| | | | | |
| W. P. Carey 20212023 10-K – 5155 |
W. P. CAREY INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
| | December 31, |
| 2021 | | 2020 |
| December 31, | | | December 31, |
| 2023 | | | 2023 | | 2022 |
| Assets | Assets | | | |
| Investments in real estate: | Investments in real estate: | |
| Land, buildings and improvements | $ | 11,875,407 | | | $ | 10,939,619 | |
| Net investments in direct financing leases and loans receivable | 813,577 | | | 736,117 | |
| Investments in real estate: | |
| Investments in real estate: | |
| Land, buildings and improvements — net lease and other | |
| Land, buildings and improvements — net lease and other | |
| Land, buildings and improvements — net lease and other | |
| Land, buildings and improvements — operating properties | |
| Net investments in finance leases and loans receivable | |
| In-place lease intangible assets and other | In-place lease intangible assets and other | 2,386,000 | | | 2,301,174 | |
| Above-market rent intangible assets | Above-market rent intangible assets | 843,410 | | | 881,159 | |
| Investments in real estate | Investments in real estate | 15,918,394 | | | 14,858,069 | |
| Accumulated depreciation and amortization | Accumulated depreciation and amortization | (2,889,294) | | | (2,490,087) | |
| Assets held for sale, net | Assets held for sale, net | 8,269 | | | 18,590 | |
| Net investments in real estate | Net investments in real estate | 13,037,369 | | | 12,386,572 | |
| Equity method investments | Equity method investments | 356,637 | | | 283,446 | |
| Cash and cash equivalents | Cash and cash equivalents | 165,427 | | | 248,662 | |
| Due from affiliates | 1,826 | | | 26,257 | |
| Other assets, net | Other assets, net | 1,017,842 | | | 851,881 | |
| Goodwill | Goodwill | 901,529 | | | 910,818 | |
Total assets (a) | Total assets (a) | $ | 15,480,630 | | | $ | 14,707,636 | |
| Liabilities and Equity | Liabilities and Equity | | | |
| Debt: | Debt: | |
| Debt: | |
| Debt: | |
| Senior unsecured notes, net | Senior unsecured notes, net | $ | 5,701,913 | | | $ | 5,146,192 | |
| Senior unsecured notes, net | |
| Senior unsecured notes, net | |
| Unsecured term loans, net | |
| Unsecured revolving credit facility | Unsecured revolving credit facility | 410,596 | | | 82,281 | |
| Unsecured term loans, net | 310,583 | | | 321,971 | |
| Non-recourse mortgages, net | Non-recourse mortgages, net | 368,524 | | | 1,145,554 | |
| Debt, net | Debt, net | 6,791,616 | | | 6,695,998 | |
| Accounts payable, accrued expenses and other liabilities | Accounts payable, accrued expenses and other liabilities | 572,846 | | | 603,663 | |
| Below-market rent and other intangible liabilities, net | Below-market rent and other intangible liabilities, net | 183,286 | | | 197,248 | |
| Deferred income taxes | Deferred income taxes | 145,572 | | | 145,844 | |
| Dividends payable | Dividends payable | 203,859 | | | 186,514 | |
Total liabilities (a) | Total liabilities (a) | 7,897,179 | | | 7,829,267 | |
Commitments and contingencies (Note 12) | 0 | | 0 |
Commitments and contingencies (Note 13) | | Commitments and contingencies (Note 13) | | | |
| | Preferred stock, $0.001 par value, 50,000,000 shares authorized; none issued | Preferred stock, $0.001 par value, 50,000,000 shares authorized; none issued | — | | | — | |
| Common stock, $0.001 par value, 450,000,000 shares authorized; 190,013,751 and 175,401,757 shares, respectively, issued and outstanding | 190 | | | 175 | |
| Preferred stock, $0.001 par value, 50,000,000 shares authorized; none issued | |
| Preferred stock, $0.001 par value, 50,000,000 shares authorized; none issued | |
| Common stock, $0.001 par value, 450,000,000 shares authorized; 218,671,874 and 210,620,949 shares, respectively, issued and outstanding | |
| Additional paid-in capital | Additional paid-in capital | 9,977,686 | | | 8,925,365 | |
| Distributions in excess of accumulated earnings | Distributions in excess of accumulated earnings | (2,224,231) | | | (1,850,935) | |
| Deferred compensation obligation | Deferred compensation obligation | 49,810 | | | 42,014 | |
| Accumulated other comprehensive loss | Accumulated other comprehensive loss | (221,670) | | | (239,906) | |
| Total stockholders’ equity | Total stockholders’ equity | 7,581,785 | | | 6,876,713 | |
| Noncontrolling interests | Noncontrolling interests | 1,666 | | | 1,656 | |
| Total equity | Total equity | 7,583,451 | | | 6,878,369 | |
| Total liabilities and equity | Total liabilities and equity | $ | 15,480,630 | | | $ | 14,707,636 | |
__________
(a)See Note 2 for details related to variable interest entities (“VIEs”).
See Notes to Consolidated Financial Statements.
| | | | | |
| W. P. Carey 20212023 10-K – 5256 |
W. P. CAREY INC.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except share and per share amounts)
| | Years Ended December 31, |
| 2021 | | 2020 | | 2019 |
| Years Ended December 31, | | | Years Ended December 31, |
| 2023 | | | 2023 | | 2022 | | 2021 |
| Revenues | Revenues | | | | | |
| Real Estate: | Real Estate: | |
| Real Estate: | |
| Real Estate: | |
| Lease revenues | Lease revenues | $ | 1,177,438 | | | $ | 1,080,623 | | | $ | 987,984 | |
| Income from direct financing leases and loans receivable | 67,555 | | | 74,893 | | | 105,112 | |
| Lease termination income and other | 53,655 | | | 11,082 | | | 29,547 | |
| Lease revenues | |
| Lease revenues | |
| Income from finance leases and loans receivable | |
| Operating property revenues | Operating property revenues | 13,478 | | | 11,399 | | | 50,220 | |
| 1,312,126 | | | 1,177,997 | | | 1,172,863 | |
| Other lease-related income | |
| 1,738,139 | |
| Investment Management: | Investment Management: | | | | | |
| Asset management and other revenue | 15,363 | | | 22,467 | | | 43,356 | |
| Asset management revenue | |
| Asset management revenue | |
| Asset management revenue | |
| Other advisory income and reimbursements | |
| Reimbursable costs from affiliates | Reimbursable costs from affiliates | 4,035 | | | 8,855 | | | 16,547 | |
| 19,398 | | | 31,322 | | | 59,903 | |
| 1,331,524 | | | 1,209,319 | | | 1,232,766 | |
| 3,219 | |
| 1,741,358 | |
| Operating Expenses | Operating Expenses | | | | | |
| Depreciation and amortization | Depreciation and amortization | 475,989 | | | 442,935 | | | 447,135 | |
| Depreciation and amortization | |
| Depreciation and amortization | |
| General and administrative | General and administrative | 81,888 | | | 75,950 | | | 75,293 | |
| Operating property expenses | |
| Impairment charges — real estate | |
| Reimbursable tenant costs | Reimbursable tenant costs | 62,417 | | | 56,409 | | | 55,576 | |
| Property expenses, excluding reimbursable tenant costs | Property expenses, excluding reimbursable tenant costs | 47,898 | | | 44,067 | | | 39,545 | |
| Stock-based compensation expense | Stock-based compensation expense | 24,881 | | | 15,938 | | | 18,787 | |
| Impairment charges | 24,246 | | | 35,830 | | | 32,539 | |
| Operating property expenses | 9,848 | | | 9,901 | | | 38,015 | |
| Merger and other expenses | Merger and other expenses | (4,546) | | | 247 | | | 101 | |
| Reimbursable costs from affiliates | Reimbursable costs from affiliates | 4,035 | | | 8,855 | | | 16,547 | |
| Subadvisor fees | — | | | 1,469 | | | 7,579 | |
| 726,656 | | | 691,601 | | | 731,117 | |
| Impairment charges — Investment Management goodwill | |
| 1,018,007 | |
| Other Income and Expenses | Other Income and Expenses | | | | | |
| Gain on sale of real estate, net | |
| Gain on sale of real estate, net | |
| Gain on sale of real estate, net | |
| Interest expense | Interest expense | (196,831) | | | (210,087) | | | (233,325) | |
| Gain on sale of real estate, net | 40,425 | | | 109,370 | | | 18,143 | |
| Other gains and (losses) | |
| Non-operating income | Non-operating income | 13,860 | | | 9,587 | | | 22,551 | |
| Other gains and (losses) | (12,885) | | | 37,165 | | | 8,924 | |
| (Losses) earnings from equity method investments | (10,829) | | | (18,557) | | | 23,229 | |
| Loss on change in control of interests | — | | | — | | | (8,416) | |
| (166,260) | | | (72,522) | | | (168,894) | |
| Earnings (losses) from equity method investments | |
| Gain on change in control of interests | |
| 28,965 | |
| Income before income taxes | Income before income taxes | 438,608 | | | 445,196 | | | 332,755 | |
| (Provision for) benefit from income taxes | (28,486) | | | 20,759 | | | (26,211) | |
| Provision for income taxes | |
| Net Income | Net Income | 410,122 | | | 465,955 | | | 306,544 | |
| Net income attributable to noncontrolling interests | (134) | | | (10,596) | | | (1,301) | |
| Net loss (income) attributable to noncontrolling interests | |
| Net Income Attributable to W. P. Carey | Net Income Attributable to W. P. Carey | $ | 409,988 | | | $ | 455,359 | | | $ | 305,243 | |
| | Basic Earnings Per Share | |
| Basic Earnings Per Share | |
| Basic Earnings Per Share | Basic Earnings Per Share | $ | 2.25 | | | $ | 2.61 | | | $ | 1.78 | |
| Diluted Earnings Per Share | Diluted Earnings Per Share | $ | 2.24 | | | $ | 2.60 | | | $ | 1.78 | |
| Weighted-Average Shares Outstanding | Weighted-Average Shares Outstanding | | | | | |
| Basic | Basic | 182,486,476 | | | 174,504,406 | | | 171,001,430 | |
| Basic | |
| Basic | |
| Diluted | Diluted | 183,127,098 | | | 174,839,428 | | | 171,299,414 | |
See Notes to Consolidated Financial Statements.
| | | | | |
| W. P. Carey 20212023 10-K – 5357 |
W. P. CAREY INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)
| | | | Years Ended December 31, | | Years Ended December 31, |
| | | 2021 | | 2020 | | 2019 | | 2023 | | 2022 | | 2021 |
| Net Income | Net Income | $ | 410,122 | | | $ | 465,955 | | | $ | 306,544 | |
| Other Comprehensive Income (Loss) | Other Comprehensive Income (Loss) | |
| Foreign currency translation adjustments derecognized in connection with the Spin-Off | |
| Foreign currency translation adjustments derecognized in connection with the Spin-Off | |
| Foreign currency translation adjustments derecognized in connection with the Spin-Off | |
| Unrealized (loss) gain on derivative instruments | |
| Foreign currency translation adjustments | Foreign currency translation adjustments | (35,736) | | | 47,746 | | | 376 | |
| Unrealized gain (loss) on derivative instruments | 35,305 | | | (31,978) | | | (1,054) | |
| Unrealized gain on investments | 18,688 | | | — | | | 7 | |
| 18,257 | | | 15,768 | | | (671) | |
| (Reclassification of unrealized gain on investments to net income) / Unrealized gain on investments | |
| 28,993 | |
| Comprehensive Income | Comprehensive Income | 428,379 | | | 481,723 | | | 305,873 | |
| | Amounts Attributable to Noncontrolling Interests | Amounts Attributable to Noncontrolling Interests | |
| Net income | (134) | | | (10,596) | | | (1,301) | |
| Amounts Attributable to Noncontrolling Interests | |
| Amounts Attributable to Noncontrolling Interests | |
| Net loss (income) | |
| Net loss (income) | |
| Net loss (income) | |
| Foreign currency translation adjustments | |
| Unrealized gain on derivative instruments | Unrealized gain on derivative instruments | (21) | | | (7) | | | — | |
| Comprehensive income attributable to noncontrolling interests | (155) | | | (10,603) | | | (1,301) | |
| Comprehensive (income) loss attributable to noncontrolling interests | |
| Comprehensive Income Attributable to W. P. Carey | Comprehensive Income Attributable to W. P. Carey | $ | 428,224 | | | $ | 471,120 | | | $ | 304,572 | |
See Notes to Consolidated Financial Statements.
| | | | | |
| W. P. Carey 20212023 10-K – 5458 |
W. P. CAREY INC.
CONSOLIDATED STATEMENTS OF EQUITY
(in thousands, except share and per share amounts)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| W. P. Carey Stockholders | | | | |
| | | | | | | Distributions | | | | Accumulated | | | | | | |
| Common Stock | | Additional | | in Excess of | | Deferred | | Other | | Total | | | | |
| $0.001 Par Value | | Paid-in | | Accumulated | | Compensation | | Comprehensive | | W. P. Carey | | Noncontrolling | | |
| Shares | | Amount | | Capital | | Earnings | | Obligation | | Loss | | Stockholders | | Interests | | Total |
| Balance at January 1, 2021 | 175,401,757 | | | $ | 175 | | | $ | 8,925,365 | | | $ | (1,850,935) | | | $ | 42,014 | | | $ | (239,906) | | | $ | 6,876,713 | | | $ | 1,656 | | | $ | 6,878,369 | |
| Shares issued under forward sale agreements, net | 9,798,209 | | | 10 | | | 697,034 | | | | | | | | | 697,044 | | | | | 697,044 | |
| Shares issued under “at-the-market” offering, net | 4,690,073 | | | 5 | | | 340,061 | | | | | | | | | 340,066 | | | | | 340,066 | |
| Shares issued upon delivery of vested restricted share awards | 119,268 | | | — | | | (3,822) | | | | | | | | | (3,822) | | | | | (3,822) | |
| Shares issued upon purchases under employee share purchase plan | 4,444 | | | — | | | 305 | | | | | | | | | 305 | | | | | 305 | |
| Amortization of stock-based compensation expense | | | | | 24,881 | | | | | | | | | 24,881 | | | | | 24,881 | |
| Deferral of vested shares, net | | | | | (7,044) | | | | | 7,044 | | | | | — | | | | | — | |
| Distributions to noncontrolling interests | | | | | | | | | | | | | — | | | (145) | | | (145) | |
| Dividends declared ($4.205 per share) | | | | | 906 | | | (783,284) | | | 752 | | | | | (781,626) | | | | | (781,626) | |
| Net income | | | | | | | 409,988 | | | | | | | 409,988 | | | 134 | | | 410,122 | |
| Other comprehensive income: | | | | | | | | | | | | | | | | | |
| Foreign currency translation adjustments | | | | | | | | | | | (35,736) | | | (35,736) | | | | | (35,736) | |
| Unrealized gain on derivative instruments | | | | | | | | | | | 35,284 | | | 35,284 | | | 21 | | | 35,305 | |
| Unrealized gain on investments | | | | | | | | | | | 18,688 | | | 18,688 | | | | | 18,688 | |
| Balance at December 31, 2021 | 190,013,751 | | | $ | 190 | | | $ | 9,977,686 | | | $ | (2,224,231) | | | $ | 49,810 | | | $ | (221,670) | | | $ | 7,581,785 | | | $ | 1,666 | | | $ | 7,583,451 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| W. P. Carey Stockholders | | | | |
| | | | | | | Distributions | | | | Accumulated | | | | | | |
| Common Stock | | Additional | | in Excess of | | Deferred | | Other | | Total | | | | |
| $0.001 Par Value | | Paid-in | | Accumulated | | Compensation | | Comprehensive | | W. P. Carey | | Noncontrolling | | |
| Shares | | Amount | | Capital | | Earnings | | Obligation | | Loss | | Stockholders | | Interests | | Total |
| Balance at January 1, 2023 | 210,620,949 | | | $ | 211 | | | $ | 11,706,836 | | | $ | (2,486,633) | | | $ | 57,012 | | | $ | (283,780) | | | $ | 8,993,646 | | | $ | 14,998 | | | $ | 9,008,644 | |
| Shares issued under forward equity, net | 7,826,840 | | | 8 | | | 633,834 | | | | | | | | | 633,842 | | | | | 633,842 | |
| Shares issued upon delivery of vested restricted share awards | 218,266 | | | — | | | (13,679) | | | | | | | | | (13,679) | | | | | (13,679) | |
| Shares issued upon purchases under employee share purchase plan | 5,819 | | | — | | | 347 | | | | | | | | | 347 | | | | | 347 | |
Distributions in connection with the Spin-Off (Note 3) | | | | | (578,818) | | | (229,712) | | | | | 35,664 | | | (772,866) | | | (4,406) | | | (777,272) | |
| Amortization of stock-based compensation expense | | | | | 34,504 | | | | | | | | | 34,504 | | | | | 34,504 | |
| Deferral of vested shares, net | | | | | (4,521) | | | | | 4,521 | | | | | — | | | | | — | |
| Acquisition of noncontrolling interests | | | | | 3,663 | | | | | | | | | 3,663 | | | (3,663) | | | — | |
| Distributions to noncontrolling interests | | | | | | | | | | | | | — | | | (3,263) | | | (3,263) | |
| Contributions from noncontrolling interests | | | | | | | | | | | | | — | | | 2,886 | | | 2,886 | |
| Dividends declared ($4.067 per share) | | | | | 2,295 | | | (883,413) | | | 513 | | | | | (880,605) | | | | | (880,605) | |
| Net income | | | | | | | 708,334 | | | | | | | 708,334 | | | (70) | | | 708,264 | |
| Other comprehensive loss: | | | | | | | | | | | | | | | | | |
| Unrealized loss on derivative instruments | | | | | | | | | | | (26,429) | | | (26,429) | | | | | (26,429) | |
| Foreign currency translation adjustments | | | | | | | | | | | 19,678 | | | 19,678 | | | 80 | | | 19,758 | |
| Balance at December 31, 2023 | 218,671,874 | | | $ | 219 | | | $ | 11,784,461 | | | $ | (2,891,424) | | | $ | 62,046 | | | $ | (254,867) | | | $ | 8,700,435 | | | $ | 6,562 | | | $ | 8,706,997 | |
(Continued)
| | | | | |
| W. P. Carey 20212023 10-K – 5559 |
W. P. CAREY INC.
CONSOLIDATED STATEMENTS OF EQUITY
(Continued)
(in thousands, except share and per share amounts)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| W. P. Carey Stockholders | | | | |
| | | | | | | Distributions | | | | Accumulated | | | | | | |
| Common Stock | | Additional | | in Excess of | | Deferred | | Other | | Total | | | | |
| $0.001 Par Value | | Paid-in | | Accumulated | | Compensation | | Comprehensive | | W. P. Carey | | Noncontrolling | | |
| Shares | | Amount | | Capital | | Earnings | | Obligation | | Loss | | Stockholders | | Interests | | Total |
| Balance at January 1, 2020 | 172,278,242 | | | $ | 172 | | | $ | 8,717,535 | | | $ | (1,557,374) | | | $ | 37,263 | | | $ | (255,667) | | | $ | 6,941,929 | | | $ | 6,244 | | | $ | 6,948,173 | |
Cumulative-effect adjustment for the adoption of ASU 2016-13, Financial Instruments — Credit Losses | | | | | | | (14,812) | | | | | | | (14,812) | | | | | (14,812) | |
| Shares issued under forward sale agreements, net | 2,951,791 | | | 3 | | | 199,478 | | | | | | | | | 199,481 | | | | | 199,481 | |
| Shares issued upon delivery of vested restricted share awards | 162,331 | | | — | | | (5,372) | | | | | | | | | (5,372) | | | | | (5,372) | |
| Shares issued upon purchases under employee share purchase plan | 6,893 | | | — | | | 389 | | | | | | | | | 389 | | | | | 389 | |
| Shares issued under “at-the-market” offering, net | 2,500 | | | — | | | 60 | | | | | | | | | 60 | | | | | 60 | |
| Amortization of stock-based compensation expense | | | | | 15,938 | | | | | | | | | 15,938 | | | | | 15,938 | |
| Deferral of vested shares, net | | | | | (3,854) | | | | | 3,854 | | | | | — | | | | | — | |
| Distributions to noncontrolling interests | | | | | | | | | | | | | — | | | (5,326) | | | (5,326) | |
| Dividends declared ($4.172 per share) | | | | | 1,191 | | | (734,108) | | | 897 | | | | | (732,020) | | | | | (732,020) | |
Redemption of noncontrolling interest (Note 3) | | | | | | | | | | | | | — | | | (9,865) | | | (9,865) | |
| Net income | | | | | | | 455,359 | | | | | | | 455,359 | | | 10,596 | | | 465,955 | |
| Other comprehensive income: | | | | | | | | | | | | | | | | | |
| Foreign currency translation adjustments | | | | | | | | | | | 47,746 | | | 47,746 | | | | | 47,746 | |
| Unrealized loss on derivative instruments | | | | | | | | | | | (31,985) | | | (31,985) | | | 7 | | | (31,978) | |
| Balance at December 31, 2020 | 175,401,757 | | | $ | 175 | | | $ | 8,925,365 | | | $ | (1,850,935) | | | $ | 42,014 | | | $ | (239,906) | | | $ | 6,876,713 | | | $ | 1,656 | | | $ | 6,878,369 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| W. P. Carey Stockholders | | | | |
| | | | | | | Distributions | | | | Accumulated | | | | | | |
| Common Stock | | Additional | | in Excess of | | Deferred | | Other | | Total | | | | |
| $0.001 Par Value | | Paid-in | | Accumulated | | Compensation | | Comprehensive | | W. P. Carey | | Noncontrolling | | |
| Shares | | Amount | | Capital | | Earnings | | Obligation | | Loss | | Stockholders | | Interests | | Total |
| Balance at January 1, 2022 | 190,013,751 | | | $ | 190 | | | $ | 9,977,686 | | | $ | (2,224,231) | | | $ | 49,810 | | | $ | (221,670) | | | $ | 7,581,785 | | | $ | 1,666 | | | $ | 7,583,451 | |
| Shares issued to stockholders of CPA:18 – Global in connection with CPA:18 Merger | 13,786,302 | | | 14 | | | 1,205,736 | | | | | | | | | 1,205,750 | | | | | 1,205,750 | |
| Shares issued under forward equity, net | 3,925,000 | | | 4 | | | 284,198 | | | | | | | | | 284,202 | | | | | 284,202 | |
| Shares issued under our prior ATM Program, net | 2,740,295 | | | 3 | | | 218,098 | | | | | | | | | 218,101 | | | | | 218,101 | |
| Shares issued upon delivery of vested restricted share awards | 152,830 | | | — | | | (6,612) | | | | | | | | | (6,612) | | | | | (6,612) | |
| Shares issued upon purchases under employee share purchase plan | 2,771 | | | — | | | 205 | | | | | | | | | 205 | | | | | 205 | |
| Amortization of stock-based compensation expense | | | | | 32,841 | | | | | | | | | 32,841 | | | | | 32,841 | |
| Deferral of vested shares, net | | | | | (6,696) | | | | | 6,696 | | | | | — | | | | | — | |
| Acquisition of noncontrolling interests in connection with the CPA:18 Merger | | | | | | | | | | | | | — | | | 14,367 | | | 14,367 | |
| Distributions to noncontrolling interests | | | | | | | | | | | | | — | | | (413) | | | (413) | |
| Contributions from noncontrolling interests | | | | | | | | | | | | | — | | | 30 | | | 30 | |
| Dividends declared ($4.242 per share) | | | | | 1,380 | | | (861,541) | | | 506 | | | | | (859,655) | | | | | (859,655) | |
| Net income | | | | | | | 599,139 | | | | | | | 599,139 | | | (657) | | | 598,482 | |
| Other comprehensive loss: | | | | | | | | | | | | | | | | | |
| Foreign currency translation adjustments | | | | | | | | | | | (63,154) | | | (63,154) | | | 5 | | | (63,149) | |
| Unrealized gain on derivative instruments | | | | | | | | | | | 19,732 | | | 19,732 | | | | | 19,732 | |
| Reclassification of unrealized gain on investments to net income | | | | | | | | | | | (18,688) | | | (18,688) | | | | | (18,688) | |
| Balance at December 31, 2022 | 210,620,949 | | | $ | 211 | | | $ | 11,706,836 | | | $ | (2,486,633) | | | $ | 57,012 | | | $ | (283,780) | | | $ | 8,993,646 | | | $ | 14,998 | | | $ | 9,008,644 | |
(Continued)
| | | | | |
| W. P. Carey 20212023 10-K – 5660 |
W. P. CAREY INC.
CONSOLIDATED STATEMENTS OF EQUITY
(Continued)
(in thousands, except share and per share amounts)
| | W. P. Carey Stockholders | |
| | Distributions | | Accumulated | | |
| Common Stock | | Additional | | in Excess of | | Deferred | | Other | | Total | |
| $0.001 Par Value | | Paid-in | | Accumulated | | Compensation | | Comprehensive | | W. P. Carey | | Noncontrolling | |
| Shares | | Amount | | Capital | | Earnings | | Obligation | | Loss | | Stockholders | | Interests | | Total |
| Balance at January 1, 2019 | 165,279,642 | | | $ | 165 | | | $ | 8,187,335 | | | $ | (1,143,992) | | | $ | 35,766 | | | $ | (254,996) | | | $ | 6,824,278 | | | $ | 5,777 | | | $ | 6,830,055 | |
| Shares issued under “at-the-market” offering, net | 6,672,412 | | | 6 | | | 523,387 | | | 523,393 | | | 523,393 | |
| W. P. Carey Stockholders | |
| | | | | | | Distributions | |
| | | | | | | Distributions | |
| | | | | | | Distributions | |
| Common Stock | |
| Common Stock | |
| Common Stock | |
| $0.001 Par Value | |
| $0.001 Par Value | |
| $0.001 Par Value | |
| Shares | |
| Shares | |
| Shares | | | Amount | | Capital | | Earnings | | Obligation | | Loss | | Stockholders | | Interests | | Total |
| Balance at January 1, 2021 | |
| Shares issued under forward equity, net | |
| Shares issued under our prior ATM Program, net | |
| Shares issued upon delivery of vested restricted share awards | Shares issued upon delivery of vested restricted share awards | 322,831 | | | 1 | | | (15,766) | | | (15,765) | | | (15,765) | |
| Shares issued upon purchases under employee share purchase plan | Shares issued upon purchases under employee share purchase plan | 3,357 | | | — | | | 252 | | | 252 | | | 252 | |
| Amortization of stock-based compensation expense | |
| Deferral of vested shares, net | Deferral of vested shares, net | | (1,445) | | | 1,445 | | | — | | | — | |
| Amortization of stock-based compensation expense | | 18,787 | | | 18,787 | | | 18,787 | |
| Contributions from noncontrolling interests | | — | | | 849 | | | 849 | |
| Distributions to noncontrolling interests | Distributions to noncontrolling interests | | — | | | (1,683) | | | (1,683) | |
| Dividends declared ($4.140 per share) | | 4,985 | | | (718,625) | | | 52 | | | (713,588) | | | (713,588) | |
| Dividends declared ($4.205 per share) | |
| Net income | Net income | | 305,243 | | | 305,243 | | | 1,301 | | | 306,544 | |
| Other comprehensive income: | |
| Unrealized loss on derivative instruments | | (1,054) | | | (1,054) | | | (1,054) | |
| Other comprehensive loss: | |
| Foreign currency translation adjustments | Foreign currency translation adjustments | | 376 | | | 376 | | | 376 | |
| Foreign currency translation adjustments | |
| Foreign currency translation adjustments | |
| Unrealized gain on derivative instruments | |
| Unrealized gain on investments | Unrealized gain on investments | | 7 | | | 7 | | | 7 | |
| Balance at December 31, 2019 | 172,278,242 | | | $ | 172 | | | $ | 8,717,535 | | | $ | (1,557,374) | | | $ | 37,263 | | | $ | (255,667) | | | $ | 6,941,929 | | | $ | 6,244 | | | $ | 6,948,173 | |
| Balance at December 31, 2021 | |
See Notes to Consolidated Financial Statements.
| | | | | |
| W. P. Carey 20212023 10-K – 5761 |
W. P. CAREY INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
| | Years Ended December 31, |
| 2021 | | 2020 | | 2019 |
| Years Ended December 31, | | | Years Ended December 31, |
| 2023 | | | 2023 | | 2022 | | 2021 |
| Cash Flows — Operating Activities | Cash Flows — Operating Activities | | | | | |
| Net income | |
| Net income | |
| Net income | Net income | $ | 410,122 | | | $ | 465,955 | | | $ | 306,544 | |
| Adjustments to net income: | Adjustments to net income: | |
| Depreciation and amortization, including intangible assets and deferred financing costs | Depreciation and amortization, including intangible assets and deferred financing costs | 490,722 | | | 456,210 | | | 460,030 | |
| Depreciation and amortization, including intangible assets and deferred financing costs | |
| Depreciation and amortization, including intangible assets and deferred financing costs | |
| Gain on sale of real estate, net | |
| Impairment charges — real estate | |
| Straight-line rent adjustments | |
| Stock-based compensation expense | |
| Amortization of rent-related intangibles and deferred rental revenue | Amortization of rent-related intangibles and deferred rental revenue | 56,910 | | | 52,736 | | | 84,878 | |
| Straight-line rent adjustments | (50,565) | | | (50,299) | | | (46,260) | |
| Gain on sale of real estate, net | (40,425) | | | (109,370) | | | (18,143) | |
| Stock-based compensation expense | 24,881 | | | 15,938 | | | 18,787 | |
| Impairment charges | 24,246 | | | 35,830 | | | 32,539 | |
| Net realized and unrealized losses (gains) on extinguishment of debt, equity securities, foreign currency transactions, and other | 15,505 | | | (55,810) | | | (466) | |
| Increase (decrease) in allowance for credit losses | |
| (Earnings) losses from equity method investments | |
| Distributions of earnings from equity method investments | Distributions of earnings from equity method investments | 15,471 | | | 9,419 | | | 26,772 | |
| Asset management revenue received in shares of Managed REITs | (12,528) | | | (16,642) | | | (30,555) | |
| Losses (earnings) from equity method investments | 10,829 | | | 18,557 | | | (23,229) | |
| Deferred income tax (benefit) expense | (4,703) | | | (49,076) | | | 9,255 | |
| Change in allowance for credit losses | 266 | | | 22,259 | | | — | |
| Loss on change in control of interests | — | | | — | | | 8,416 | |
| Net realized and unrealized losses (gains) on extinguishment of debt, equity securities, foreign currency exchange rate movements, and other | |
| Deferred income tax benefit | |
| Gain on change in control of interests | |
| Impairment charges — Investment Management goodwill | |
| Asset management revenue received in shares of Managed Programs | |
| Net changes in other operating assets and liabilities | Net changes in other operating assets and liabilities | (14,252) | | | 5,831 | | | (16,491) | |
| Net Cash Provided by Operating Activities | Net Cash Provided by Operating Activities | 926,479 | | | 801,538 | | | 812,077 | |
| Cash Flows — Investing Activities | Cash Flows — Investing Activities | | | | | |
| Purchases of real estate | Purchases of real estate | (1,306,858) | | | (656,313) | | | (717,666) | |
| Investments in direct financing leases and loans receivable | (217,711) | | | — | | | — | |
| Purchases of real estate | |
| Purchases of real estate | |
| Proceeds from sales of real estate | Proceeds from sales of real estate | 163,638 | | | 366,532 | | | 307,959 | |
| Funding for real estate construction, redevelopments, and other capital expenditures on real estate | Funding for real estate construction, redevelopments, and other capital expenditures on real estate | (113,616) | | | (207,256) | | | (165,490) | |
| Capital contributions to equity method investments | Capital contributions to equity method investments | (107,552) | | | (4,253) | | | (2,595) | |
| Proceeds from repayment of loans receivable | |
| Other investing activities, net | |
| Return of capital from equity method investments | |
| Tenant-funded escrow for investing activities | |
| Cash paid to stockholders of CPA:18 – Global in the CPA:18 Merger | |
| Cash and restricted cash acquired in connection with the CPA:18 Merger | |
Proceeds from redemption of WLT preferred stock and cash exchanged for WLT common stock (Note 10) | |
| Proceeds from repayment of short-term loans to affiliates | Proceeds from repayment of short-term loans to affiliates | 62,048 | | | 51,702 | | | 46,637 | |
| Funding of short-term loans to affiliates | Funding of short-term loans to affiliates | (41,000) | | | (26,481) | | | (36,808) | |
| Other investing activities, net | (19,631) | | | 1,165 | | | (8,882) | |
| Return of capital from equity method investments | 13,955 | | | 19,483 | | | 34,365 | |
| Purchases of securities | — | | | (95,511) | | | — | |
| Proceeds from repayment of loans receivable | — | | | 11,000 | | | 19,707 | |
| Investments in loans receivable | |
| Net Cash Used in Investing Activities | Net Cash Used in Investing Activities | (1,566,727) | | | (539,932) | | | (522,773) | |
| Cash Flows — Financing Activities | Cash Flows — Financing Activities | | | | | |
| Proceeds from Unsecured Revolving Credit Facility | Proceeds from Unsecured Revolving Credit Facility | 2,000,639 | | | 1,019,158 | | | 1,336,824 | |
| Proceeds from Unsecured Revolving Credit Facility | |
| Proceeds from Unsecured Revolving Credit Facility | |
| Repayments of Unsecured Revolving Credit Facility | Repayments of Unsecured Revolving Credit Facility | (1,663,869) | | | (1,137,026) | | | (1,227,153) | |
| Dividends paid | |
| Proceeds from shares issued under forward equity, net of selling costs | |
| Proceeds from Unsecured Term Loans | |
| Proceeds in connection with the Spin-Off | |
| Scheduled payments of mortgage principal | |
| Prepayments of mortgage principal | |
| Payment of financing costs | |
| Payments for withholding taxes upon delivery of equity-based awards | |
| Distributions to noncontrolling interests | |
| Contributions from noncontrolling interests | |
| Other financing activities, net | |
| Proceeds from issuance of Senior Unsecured Notes | Proceeds from issuance of Senior Unsecured Notes | 1,385,059 | | | 495,495 | | | 870,635 | |
| Dividends paid | (764,281) | | | (726,955) | | | (704,396) | |
| Prepayments of mortgage principal | (745,124) | | | (68,501) | | | (1,028,795) | |
| Proceeds from shares issued under forward sale agreements, net of selling costs | 697,044 | | | 199,716 | | | — | |
| Proceeds from shares issued under our prior ATM Program, net of selling costs | |
| Redemption of Senior Unsecured Notes | Redemption of Senior Unsecured Notes | (617,442) | | | — | | | — | |
| Proceeds from shares issued under ATM Program, net of selling costs | 339,968 | | | 158 | | | 523,287 | |
| Scheduled payments of mortgage principal | (64,290) | | | (275,746) | | | (210,414) | |
| Payment of financing costs | (11,295) | | | (14,205) | | | (6,716) | |
| Other financing activities, net | 4,606 | | | 8,917 | | | 5,550 | |
| Payments for withholding taxes upon delivery of equity-based awards | (3,822) | | | (5,372) | | | (15,766) | |
| Distributions paid to noncontrolling interests | (145) | | | (5,326) | | | (1,683) | |
| Proceeds from Unsecured Term Loans | — | | | 298,974 | | | — | |
| Contributions from noncontrolling interests | — | | | — | | | 849 | |
| Net Cash Provided by (Used in) Financing Activities | 557,048 | | | (210,713) | | | (457,778) | |
| Net Cash Provided by Financing Activities | |
| Change in Cash and Cash Equivalents and Restricted Cash During the Year | Change in Cash and Cash Equivalents and Restricted Cash During the Year | | | | | |
| Effect of exchange rate changes on cash and cash equivalents and restricted cash | Effect of exchange rate changes on cash and cash equivalents and restricted cash | (10,629) | | | 9,368 | | | (4,071) | |
| Net (decrease) increase in cash and cash equivalents and restricted cash | (93,829) | | | 60,261 | | | (172,545) | |
| Effect of exchange rate changes on cash and cash equivalents and restricted cash | |
| Effect of exchange rate changes on cash and cash equivalents and restricted cash | |
| Net increase (decrease) in cash and cash equivalents and restricted cash | |
| Cash and cash equivalents and restricted cash, beginning of year | Cash and cash equivalents and restricted cash, beginning of year | 311,779 | | | 251,518 | | | 424,063 | |
| Cash and cash equivalents and restricted cash, end of year | Cash and cash equivalents and restricted cash, end of year | $ | 217,950 | | | $ | 311,779 | | | $ | 251,518 | |
See Notes to Consolidated Financial Statements.
| | | | | |
| W. P. Carey 2023 10-K– 62 |
W. P. CAREY INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Continued)
Supplemental Non-Cash Investing and Financing Activities:
2023 — On November 1, 2023, we completed the Spin-Off (as defined herein) (Note 3). The following table summarizes non-cash assets, liabilities, and equity derecognized in connection with the Spin-Off and provides a reconciliation to cash proceeds from the Spin-Off (in thousands): | | | | | |
| Impact of the Spin-Off | |
| Total assets derecognized (excluding cash and cash equivalents and restricted cash) | $ | 1,361,616 | |
| Total liabilities and equity derecognized | (438,913) | |
| Total non-cash assets, liabilities, and equity derecognized | 922,703 | |
| Reduction to Additional paid-in capital | (578,818) | |
| Proceeds in connection with the Spin-Off | $ | 343,885 | |
2022 — On August 1, 2022, CPA:18 – Global (as defined herein) merged with and into one of our indirect subsidiaries in the CPA:18 Merger (as defined herein) (Note 4). The following table summarizes estimated fair values of the assets acquired and liabilities assumed in the CPA:18 Merger (in thousands): | | | | | |
| Total Consideration | |
| Fair value of W. P. Carey shares of common stock issued | $ | 1,205,750 | |
| Cash consideration paid | 423,297 | |
| Cash paid for fractional shares | 138 | |
| Fair value of our equity interest in CPA:18 – Global prior to the CPA:18 Merger | 88,299 | |
| Fair value of our equity interest in jointly owned investments with CPA:18 – Global prior to the CPA:18 Merger | 28,574 | |
| 1,746,058 | |
| Assets Acquired at Fair Value | |
| Land, buildings and improvements — net lease and other | 881,613 | |
| Land, buildings and improvements — operating properties | 1,000,447 | |
| Net investments in finance leases and loans receivable | 38,517 | |
| In-place lease and other intangible assets | 224,458 | |
| Above-market rent intangible assets | 61,090 | |
| Assets held for sale | 85,026 | |
| Goodwill | 172,346 | |
| Other assets, net (excluding restricted cash) | 25,229 | |
| Liabilities Assumed at Fair Value | |
| Non-recourse mortgages, net | 900,173 | |
| Accounts payable, accrued expenses and other liabilities | 90,035 | |
| Below-market rent and other intangible liabilities | 16,836 | |
| Deferred income taxes | 52,320 | |
| Amounts attributable to noncontrolling interests | 14,367 | |
| Net assets acquired excluding cash and restricted cash | 1,414,995 | |
| Cash and cash equivalents and restricted cash acquired | $ | 331,063 | |
See Notes to Consolidated Financial Statements.
| | | | | |
| W. P. Carey 20212023 10-K – 5863 |
W. P. CAREY INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Business and Organization
W. P. Carey Inc. (“W. P. Carey”) is a real estate investment trust (“REIT”) that, together with our consolidated subsidiaries, invests primarily in operationally-critical, single-tenant commercial real estate properties located in the United States and Northern and Western Europe that are leased on a long-term basis. We earn revenue principally by leasing the properties we own to companies on a triple-net lease basis, which generally requires each tenant to pay the costs associated with operating and maintaining the property.
Founded in 1973, our shares of common stock are listed on the New York Stock Exchange under the symbol “WPC.”
We elected to be taxed as a REIT under Section 856 through 860 of the Internal Revenue Code effective as of February 15, 2012. As a REIT, we are not subject to federal income taxes on income and gains that we distribute to our stockholders as long as we satisfy certain requirements, principally relating to the nature of our income and the level of our distributions, as well as other factors. We also own real property in jurisdictions outside the United States through foreign subsidiaries and are subject to income taxes on our pre-tax income earned from properties in such countries. Through
In September 2023, we announced a plan to exit the office assets within our taxable REIT subsidiariesportfolio by (i) spinning-off 59 office properties into Net Lease Office Properties (“TRSs”NLOP”), we also earn revenue as the advisor to certain non-traded investment programs. We hold all of ourso that it became a separate publicly-traded real estate assets attributableinvestment trust (the “Spin-Off”), and (ii) implementing an asset sale program to our Real Estate segment underdispose of 87 office properties retained by us (the “Office Sale Program”), which is targeted to be completed in the REIT structure, while the activities conducted by our Investment Management segment subsidiaries have been organized under TRSs.first half of 2024.
On April 13, 2020, two ofNovember 1, 2023, we completed the non-traded REITs that we advised, Carey Watermark Investors Incorporated (“CWI 1”) and Carey Watermark Investors 2 Incorporated (“CWI 2”) (together, the “CWI REITs”), merged in an all-stock transaction, with CWI 2 as the surviving entity (the “CWI 1 and CWI 2 Merger”). Following the close of the CWI 1 and CWI 2 Merger, our advisory agreements with CWI 1 and CWI 2 were terminated, CWI 2 was renamed Watermark Lodging Trust, Inc. (“WLT”), and we beganSpin-Off, contributing 59 office properties to provide certain services to WLT pursuant to a transition services agreement (which was terminated on October 13, 2021). At December 31, 2021, we were the advisor to the following entitiesNLOP (Note 3):. Following the closing of the Spin-Off, NLOP operates as a separate publicly-traded REIT, which we externally manage pursuant to certain advisory agreements (the “NLOP Advisory Agreements”).
•On August 1, 2022, a non-traded REIT that we previously advised, Corporate Property Associates 18 – Global Incorporated (“CPA:18 – Global”), a publicly owned, non-traded REIT that primarily invests in commercial real estate properties; merged with and into one of our indirect subsidiaries (the “CPA:18 Merger”) (Note 4). At December 31, 2023, we referwere the advisor to CPA:18 – Global together with the CWI REITs as the “Managed REITs” (as used throughout this Report, the term “Managed REITs” does not include CWI 1 and CWI 2 after April 13, 2020); and•Carey European Student Housing Fund I, L.P. (“CESH”), a limited partnership formed for the purpose of developing, owning, and operating student housing properties and similar investments in Europe (Note 35); we. We refer to CPA:18 – Global (prior to the Managed REITsCPA:18 Merger) and CESH collectively as the “Managed Programs.”
We no longer raise capital for new or existing funds, but currently expect to continue managing CPA:18 – Global and CESH through the end of their respective life cycles (Note 3).
On August 31, 2021, CPA:18 – Global reported that its independent directors intended to begin the process of evaluating possible liquidity alternatives for its shareholders, including a transaction involving us or one of our subsidiaries. There can be no assurance that any such liquidity transaction will occur in the near future or at all.
Reportable Segments
Real Estate — Lease revenues from our real estate investments generate the vast majority of our earnings. We invest primarily in commercial properties located in the United States and Northern and Western Europe, which are leased to companies on a triple-net lease basis. At December 31, 2021,2023, our owned portfolio was comprised of our full or partial ownership interests in 1,3041,424 properties, totaling approximately 156173 million square feet (unaudited), substantially all of which were net leased to 352336 tenants, with a weighted-average lease term of 10.811.7 years and an occupancy rate of 98.5%98.1% (unaudited). In addition, at December 31, 2021,2023, our portfolio was comprised of full or partial ownership interests in 2096 operating properties, including 1989 self-storage properties, five hotels, and 1 hotel,two student housing properties, totaling approximately 1.47.3 million square feet (unaudited).
| | | | | |
| W. P. Carey 2021 10-K– 59
|
Notes to Consolidated Financial Statements
Investment Management — Through our TRSs, weWe manage the real estate investment portfolios for the Managed Programs,NLOP and CESH, for which we earn asset management revenue.revenue and other advisory income and reimbursements. We may earn incentive revenue andalso be entitled to receive other compensation throughcertain distributions pursuant to our advisory agreementsarrangements with certain of the Managed Programs, including in connection with providing a liquidity event for CPA:18 – Global’s stockholders. In addition, we include equity income generated through our (i) ownership of shares and limited partnership units of the Managed Programs (Note 7) and (ii) special general partner interest in the operating partnership of CPA:18 – Global (through which we participate in its cash flows (Note 3)), in our Investment Management segment.
CESH. At December 31, 2021, the Managed Programs owned all2023, NLOP’s portfolio was comprised of its full or a portion of 56 net-leased properties (including certain properties in which we also have anpartial ownership interest), totaling approximately 10.8 million square feet (unaudited), substantially all of which were leased to 50 tenants, with an occupancy rate of approximately 98.3%. The Managed Programs also had interests in 66 operating properties (totaling approximately 5.1 million square feet (unaudited) in the aggregate) and 4 active55 properties. At December 31, 2023, CESH wholly owned one build-to-suit projects at the same date.project.
Note 2. Summary of Significant Accounting Policies
Critical Accounting Policies and Estimates
Accounting for Acquisitions
In accordance with the guidance for business combinations, we determine whether a transaction or other event is a business combination, which requires that the assets acquired and liabilities assumed constitute a business. If the assets acquired are not a
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| W. P. Carey 2023 10-K– 64 |
Notes to Consolidated Financial Statements
business, we account for the transaction or other event as an asset acquisition. Under both methods, we recognize the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquired entity. In addition, for transactions that are business combinations, we evaluate the existence of goodwill or a gain from a bargain purchase. We capitalize acquisition-related costs and fees associated with asset acquisitions. We immediately expense acquisition-related costs and fees associated with business combinations. All transaction costs incurred during the reporting period were capitalized since our acquisitions were classified as asset acquisitions.acquisitions (excluding the CPA:18 Merger).
Purchase Price Allocation of Tangible Assets — When we acquire properties with leases classified as operating leases, we allocate the purchase price to the tangible and intangible assets and liabilities acquired based on their estimated fair values. The tangible assets consist of land, buildings, and site improvements. The intangible assets include the above- and below-market value of leases and the in-place leases, which includes the value of tenant relationships. Land is typically valued utilizing the sales comparison (or market) approach. Buildings are valued, as if vacant, using the cost and/or income approach. TheUnder the cost approach, the fair value of real estate is based on estimated costs to construct a vacant building with similar characteristics. Under the income approach, we use either the discounted cash flow method or the direct capitalization method. For the discounted cash flow method, the fair value of real estate is determined (i) by applying a discounted cash flow analysis to the estimated net operating income for each property in the portfolio during the remaining anticipated lease term and (ii) by the estimated residual value, which is based on a hypothetical sale of the property upon expiration of a lease factoring in the re-tenanting of such property at estimated market rental rates, and applying a selected capitalization rate. For the direct capitalization method, the fair value of real estate is determined (i) by the stabilized estimated net operating income for each property in the portfolio and (ii) a selected capitalization rate.
Assumptions used in the model are property-specific where this information is available; however, when certain necessary information is not available, we use available regional and property-type information. Assumptions and estimates include the following:
•a discount rate or internal rate of return;
•market rents, growth factors of rents, and market lease term;
•a capitalization raterates to be applied to an estimate of market rent at the beginning and/or the end of the market lease term;
•the marketing period necessary to put a lease in place;
•carrying costs during the marketing period; and
•leasing commissions and tenant improvement allowances.
The discount rates and residual capitalization rates used to value the properties are selected based on several factors, including:
•the creditworthiness of the lessees;
•industry surveys;
•property type;
•property location and age;
•current lease rates relative to market lease rates; and
•anticipated lease duration.
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| W. P. Carey 2021 10-K– 60
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Notes to Consolidated Financial Statements
In the case where a tenant has a purchase option deemed to be favorable to the tenant, or the tenant has long-term renewal options at rental rates below estimated market rental rates, we generally include the value of the exercise of such purchase option or long-term renewal options in the determination of residual value.
The remaining economic life of leased assets is estimated by relying in part upon third-party appraisals of the leased assets and industry standards. Different estimates of remaining economic life will affect the depreciation expense that is recorded.
Purchase Price Allocation of Intangible Assets and Liabilities — For acquired properties that do not qualify as sale-leaseback transactions, wWee record above- and below-market lease intangible assets and liabilities for acquired properties based on the present value (using a discount rate reflecting the risks associated with the leases acquired including consideration of the credit of the lessee) of the difference between (i) the contractual rents to be paid pursuant to the leases negotiated or in place at the time of acquisition of the properties and (ii) our estimate of fair market lease rates for the property or equivalent property, both of which are measured over the estimated lease term, which includes renewal options that have rental rates below estimated market rental rates. We discount the difference between the estimated market rent and contractual rent to a present value using an interest rate reflecting our current assessment of the risk associated with the lease acquired, which includes a consideration of the credit of the lessee. When we enter into sale-leaseback transactions with above- or below-market leases, the intangibles
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| W. P. Carey 2023 10-K– 65 |
Notes to Consolidated Financial Statements
will be accounted for as loan receivables or prepaid rent liabilities, respectively. We measure the fair value of below-market purchase option liabilities we acquire as the excess of the present value of the fair value of the real estate over the present value of the tenant’s exercise price at the option date. We determine these values using our estimates or by relying in part upon third-party valuations conducted by independent appraisal firms.
We amortize the above-market lease intangible as a reduction of lease revenue over the remaining contractual lease term. We amortize the below-market lease intangible as an increase to lease revenue over the initial term and any renewal periods in the respective leases. We include the value of below-market leases in Below-market rent and other intangible liabilities in the consolidated financial statements.
The value of anyFor acquired properties with tenants in place, we record in-place lease isintangible assets based on the estimated to be equalvalue ascribed to the acquirer’s avoidance of costs as a result of having tenants in place, that would be necessary to leaseleasing the propertyproperties for a lease term equal to the remaining primary in-place lease term and the value of investment grade tenancy.terms. The cost avoidance is derived first by determining the in-place lease term on the subject lease. Then, based on our review of the market, the cost to be borne by a property owner to replicate a market lease to the remaining in-place term is estimated. These costs consist of: (i) rent lost during downtime (i.e., assumed periods of vacancy), (ii) estimated expenses that would be incurred by the property owner during periods of vacancy, (iii) rent concessions (i.e., free rent), (iv) leasing commissions, and (v) tenant improvements allowances given to tenants. We determine these values using our estimates or by relying in part upon third-party valuations. We amortize the value of in-place lease intangibles to depreciation and amortization expense over the remaining initial term of each lease. The amortization period for intangibles does not exceed the remaining depreciable life of the building.
If a lease is terminated, we charge the unamortized portion of above- and below-market lease values to rental income and in-place lease values to amortization expense. If a lease is amended, we will determine whether the economics of the amended lease continue to support the existence of the above- or below-market lease intangibles.
Purchase Price Allocation of Debt — When we acquire leveraged properties, the fair value of the related debt instruments is determined using a discounted cash flow model with rates that take into account the credit of the tenants, where applicable, and interest rate risk. Such resulting premium or discount is amortized over the remaining term of the obligation. We also consider the value of the underlying collateral, taking into account the quality of the collateral, the credit quality of the tenant, the time until maturity and the current interest rate.
Purchase Price Allocation of Goodwill — In the case of a business combination, after identifying all tangible and intangible assets and liabilities, the excess consideration paid over the fair value of the assets and liabilities acquired and assumed, respectively, represents goodwill. We allocate goodwill to the respective reporting units in which such goodwill arises. Goodwill acquired in certain business combinations was attributed to the Real Estate segment which comprises 1one reporting unit. In the event we dispose of a property or an investment that constitutes a business under U.S. generally accepted accounting principles (“GAAP”) from a reporting unit with goodwill, we allocate a portion of the reporting unit’s goodwill to that business in determining the gain or loss on the disposal of the business. The amount of goodwill allocated to the business is based on the relative fair value of the business to the fair value of the reporting unit. As part of purchase accounting for a business, we record any deferred tax assets and/or liabilities resulting from the difference between the tax basis and GAAP basis of the investment
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| W. P. Carey 2021 10-K– 61
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Notes to Consolidated Financial Statements
in the taxing jurisdiction. Such deferred tax amount will be included in purchase accounting and may impact the amount of goodwill recorded depending on the fair value of all of the other assets and liabilities and the amounts paid.
Financing Arrangements — In accordance with Accounting Standards Codification (“ASC”) 310, Receivables and ASC 842, Leases, real estate assets acquired through a sale-leaseback transaction are accounted for as a financing arrangement if the investment does not meet the criteria for sale-leaseback accounting. We record such investments within Net investments in direct financingfinance leases and loans receivable on the consolidated balance sheets. Rent payments from these investments are included within Income from direct financingfinance leases and loans receivable on the consolidated statements of income.
Impairments
Real Estate — We periodically assess whether there are any indicators that the value of our long-lived real estate and related intangible assets may be impaired or that their carrying value may not be recoverable. These impairment indicators include, but are not limited to, vacancies, an upcoming lease expiration, a tenant with credit difficulty, the termination of a lease by a tenant, or a likely disposition of the property.
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| W. P. Carey 2023 10-K– 66 |
Notes to Consolidated Financial Statements
For real estate assets held for investment and related intangible assets in which an impairment indicator is identified, we follow a two-step process to determine whether an asset is impaired and to determine the amount of the charge. First, we compare the carrying value of the property’s asset group to the estimated future net undiscounted cash flow that we expect the property’s asset group will generate, including any estimated proceeds from the eventual sale of the property’s asset group. The undiscounted cash flow analysis requires us to make our best estimate of market rents, residual values, and holding periods. We estimate market rents and residual values using market information from outside sources such as third-party market research, external appraisals, broker quotes, or recent comparable sales.
As our investment objective is to hold properties on a long-term basis, holding periods used in the undiscounted cash flow analysis are generally ten years, but may be less if our intent is to hold a property for less than ten years. Depending on the assumptions made and estimates used, the future cash flow projected in the evaluation of long-lived assets and associated intangible assets can vary within a range of outcomes. We consider the likelihood of possible outcomes in determining our estimate of future cash flows and, if warranted, we apply a probability-weighted method to the different possible scenarios. If the future net undiscounted cash flow of the property’s asset group is less than the carrying value, the carrying value of the property’s asset group is considered not recoverable. We then measure the impairment loss as the excess of the carrying value of the property’s asset group over its estimated fair value.
Assets Held for Sale — We generally classify real estate assets that are subject to operating leases as held for sale when we have entered into a contract to sell the property, all material due diligence requirements have been satisfied, we received a non-refundable deposit, and we believe it is probable that the disposition will occur within one year. When we classify an asset as held for sale, we compare the asset’s fair value less estimated cost to sell to its carrying value, and if the fair value less estimated cost to sell is less than the property’s carrying value, we reduce the carrying value to the fair value less estimated cost to sell. We will continue to review the property for subsequent changes in the fair value, and may recognize an additional impairment charge, if warranted.
Direct Financing Leases — This policy was superseded by Accounting Standards Update (“ASU”) 2016-13, Financial Instruments — Credit Losses, which we adopted on January 1, 2020 and which is described below under Credit Losses. Prior to this adoption, we periodically assessed whether there were any indicators that the value of our net investments in direct financing leases may have been impaired. When determining a possible impairment, we considered the collectibility of direct financing lease receivables for which a reserve would have been required if any losses were both probable and reasonably estimable. In addition, we determined whether there had been a permanent decline in the estimate of the residual value of the property. If this review indicated a permanent decline in the fair value of the asset below its carrying value, we recognized an impairment charge.
Equity Method Investments — We evaluate our equity method investments on a periodic basis to determine if there are any indicators that the value of our equity investment may be impaired and whether or not that impairment is other-than-temporary. To the extent an impairment has occurred and is determined to be other-than-temporary, we measure the charge as the excess of the carrying value of our investment over its estimated fair value, which is determined by calculating our share of the estimated fair market value of the underlying net assets based on the terms of the applicable partnership or joint-venture agreement. For our investment in CPA:18 – Global, we calculate the estimated fair value of our investment using its most recently published net asset value per share (“NAV”) multiplied by the number of shares owned. For our equity investments in real estate, we
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| W. P. Carey 2021 10-K– 62
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Notes to Consolidated Financial Statements
calculate the estimated fair value of the underlying investment’s real estate or net investment in direct financing lease as described in Real Estate and Direct Financing Leases above. The fair value of the underlying investment’s debt, if any, is calculated based on market interest rates and other market information. The fair value of the underlying investment’s other financial assets and liabilities (excluding net investment in direct financing leases) have fair values that generally approximate their carrying values.
Goodwill — We evaluate goodwill for possible impairment at least annually or upon the occurrence of a triggering event. Such a triggering event within our Investment Management segment dependsdepended on the timing and form of liquidity events for the Managed Programs (Note 34, Note 5). To identify any impairment, we first assess qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying value. This assessment is used as a basis to determine whether it is necessary to calculate reporting unit fair values. If necessary, we calculate the estimated fair value of the Investment Management reporting unit by utilizing a discounted cash flow analysis methodology and available NAVs.net asset values. We calculate the estimated fair value of the Real Estate reporting unit by utilizing our market capitalization and the aforementioned fair value of the Investment Management segment. Impairments, if any, will be the difference between the reporting unit’s fair value and carrying amount, not to exceed the carrying amount of goodwill.
Credit Losses
We adopted ASU 2016-13, Financial Instruments — Credit Losses on January 1, 2020, which replaces the “incurred loss” model with an “expected loss” model, resulting in the earlier recognition of credit losses even if the risk of loss is remote. This standard applies to financial assets measured at amortized cost and certain other instruments, including net investments in direct financing leases and loans receivable. This standard does not apply to receivables arising from operating leases, which are within the scope of Topic 842. We adopted ASU 2016-13 using the modified retrospective method, under which we recorded a cumulative-effect adjustment as a charge to retained earnings of $14.8 million on January 1, 2020, which is reflected within our consolidated statements of equity.
The allowance for credit losses, which is recorded as a reduction to Net investments in direct financingfinance leases and loans receivable on our consolidated balance sheets, is measured on a pool basis by credit ratings (Note 57), using a probability of default method based on the lessees’ respective credit ratings, the expected value of the underlying collateral upon its repossession, and our historical loss experience related to other direct financing leases. Included in our model are factors that incorporate forward-looking information. If we determine that a finance lease no longer shares risk characteristics with other finance leases in the pool, we evaluate the finance lease for expected credit losses on an individual basis. Allowance for credit losses is included in our consolidated statements of income within Other gains and (losses).
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| W. P. Carey 2023 10-K– 67 |
Notes to Consolidated Financial Statements
Other Accounting Policies
Basis of Consolidation — Our consolidated financial statements reflect all of our accounts, including those of our controlled subsidiaries. The portions of equity in consolidated subsidiaries that are not attributable, directly or indirectly, to us are presented as noncontrolling interests. All significant intercompany accounts and transactions have been eliminated.
When we obtain an economic interest in an entity, we evaluate the entity to determine if it should be deemed a VIE and, if so, whether we are the primary beneficiary and are therefore required to consolidate the entity. We apply accounting guidance for consolidation of VIEs to certain entities in which the equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. Fixed price purchase and renewal options within a lease, as well as certain decision-making rights within a loan or joint-venture agreement, can cause us to consider an entity a VIE. Limited partnerships and other similar entities that operate as a partnership will be considered a VIE unless the limited partners hold substantive kick-out rights or participation rights. Significant judgment is required to determine whether a VIE should be consolidated. We review the contractual arrangements provided for in the partnership agreement or other related contracts to determine whether the entity is considered a VIE, and to establish whether we have any variable interests in the VIE. We then compare our variable interests, if any, to those of the other variable interest holders to determine which party is the primary beneficiary of the VIE based on whether the entity (i) has the power to direct the activities that most significantly impact the economic performance of the VIE and (ii) has the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. The liabilities of these VIEs are non-recourse to us and can only be satisfied from each VIE’s respective assets.
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| W. P. Carey 2021 10-K– 63
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Notes to Consolidated Financial Statements
At December 31, 20212023 and 2020,2022, we considered 1421 and 1216 entities to be VIEs, respectively, of which we consolidated 615 and 5,11, respectively, as we are considered the primary beneficiary. The following table presents a summary of selected financial data of the consolidated VIEs included in our consolidated balance sheets (in thousands):
| | December 31, |
| 2021 | | 2020 |
| Land, buildings and improvements | $ | 426,831 | | | $ | 423,333 | |
| Net investments in direct financing leases and loans receivable | 144,103 | | | 15,242 | |
| December 31, | | | December 31, |
| 2023 | | | 2023 | | 2022 |
| Land, buildings and improvements — net lease and other | |
| Land, buildings and improvements — operating properties | |
| Net investments in finance leases and loans receivable | |
| In-place lease intangible assets and other | In-place lease intangible assets and other | 42,884 | | | 41,997 | |
| Above-market rent intangible assets | Above-market rent intangible assets | 26,720 | | | 26,720 | |
| Accumulated depreciation and amortization | Accumulated depreciation and amortization | (154,413) | | | (137,827) | |
| Total assets | Total assets | 500,884 | | | 381,953 | |
| | Non-recourse mortgages, net | Non-recourse mortgages, net | $ | 1,485 | | | $ | 3,508 | |
| Non-recourse mortgages, net | |
| Non-recourse mortgages, net | |
| Below-market rent and other intangible liabilities, net | Below-market rent and other intangible liabilities, net | 20,568 | | | 22,283 | |
| Total liabilities | Total liabilities | 46,302 | | | 48,971 | |
At December 31, 20212023 and 2020,2022, our 8six and 7five unconsolidated VIEs, respectively, included our interests in (i) 6 and 5three unconsolidated real estate investments, respectively, which we account for under the equity method of accounting (we do not consolidate these entities because we are not the primary beneficiary and the nature of our involvement in the activities of these entities allows us to exercise significant influence on, but does not give us power over, decisions that significantly affect the economic performance of these entities), and (ii) 2two unconsolidated investments in equity securities, which we accounted for as investments in shares of the entities at fair value. As of December 31, 20212023 and 2020,2022, the net carrying amount of our investments in these entities was $581.3$729.8 million and $425.3$693.4 million, respectively, and our maximum exposure to loss in these entities was limited to our investments. In addition, we have a variable interest in NLOP, which we also deem a VIE, as of December 31, 2023, due to our guarantee of a non-recourse mortgage loan with approximately $19 million principal balance outstanding as of December 31, 2023 encumbering a property that was derecognized in the Spin-Off (Note 3); we do not expect to have to perform under this guarantee. Should we have to perform, the Separation and Distribution Agreement (as defined in Note 3) includes an indemnification provision, for which we could recover any amounts paid under the guarantee.
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| W. P. Carey 2023 10-K– 68 |
Notes to Consolidated Financial Statements
Leases
As a Lessee: Right-of-use (“ROU”) assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments under the lease. We determine if an arrangement contains a lease at contract inception and determine the classification of the lease at commencement. Operating and financing lease ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. We do not include renewal options in the lease term when calculating the lease liability unless we are reasonably certain we will exercise the option. Variable lease payments are excluded from the ROU assets and lease liabilities and are recognized in the period in which the obligation for those payments is incurred. Our variable lease payments consist of increases as a result of the Consumer Price Index (“CPI”) or other comparable indices, taxes, and maintenance costs. Lease expense for lease payments is recognized on a straight-line basis over the term of the lease. Below-market ground lease intangible assets and above-market ground lease intangible liabilities are included as a component of ROU assets. See Note 46 for additional disclosures on the presentation of these amounts in our consolidated balance sheets.
The implicit rate within our operating leases is generally not determinable and, as a result, we use our incremental borrowing rate at the lease commencement date to determine the present value of lease payments. The determination of our incremental borrowing rate requires judgment. We determine our incremental borrowing rate for each lease using estimated baseline mortgage rates. These baseline rates are determined based on a review of current mortgage debt market activity for benchmark securities across domestic and international markets, utilizing a yield curve. The rates are then adjusted for various factors, including level of collateralization and lease term.
As a Lessor: We combine non-lease components (lease arrangements that include common area maintenance services) with related lease components (lease revenues), since both the timing and pattern of transfer are the same for the non-lease component and related lease component, the lease component is the predominant component, and the lease component would otherwise be classified as an operating lease. For (i) operating lease arrangements involving real estate that include common area maintenance services and (ii) all real estate arrangements that include real estate taxes and insurance costs, we present these amounts within lease revenues in our consolidated statements of income. We record amounts reimbursed by the lessee in the period in which the applicable expenses are incurred, if the reimbursements are deemed collectible.
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| W. P. Carey 2021 10-K– 64Net investments in sales-type leases are accounted for under ASC 842, Leases. Upon lease commencement or lease modification, we assess lease classification to determine whether the lease should be classified as an operating, direct financing, or sales-type lease. If the lease is determined to be a sales-type lease, we record a net investment in the lease, which is equal to the sum of the lease payments receivable and the unguaranteed residual value, discounted at the rate implicit in the lease. Any difference between the fair value of the asset and the net investment in the lease is considered a gain on sale of real estate and recognized upon execution of the lease.
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Notes to Consolidated Financial Statements
Reclassifications — Certain prior period amounts have been reclassified to conform to the current period presentation.
Asset management revenue and structuring and other advisory revenueAmounts due from affiliates are now included within Asset management and other revenue in the consolidated statements of income.
We currently present Non-operating income on its own line item in the consolidated statements of income, which was previously included within Other gains and (losses). Non-operating income primarily consists of realized gains and losses on derivative instruments, dividends from equity securities, and interest income on our cash deposits and loans to affiliates.
We currently present Income from direct financing leases and loans receivable on its own line item in the consolidated statements of income. Previously, income from direct financing leases was included within Lease revenues and income from loans receivable was included within Lease termination income and other in the consolidated statements of income.
Loans receivable are now included within the retitled line item Net investments in direct financing leases and loans receivable in the consolidated balance sheets. Previously, loans receivable were included within Other assets, net in the consolidated balance sheets.
Restricted Cash — Restricted cash primarily consists of security deposits and Previously, such amounts required to be reserved pursuant to lender agreements for debt service, capital improvements, and real estate taxes. The following table provides a reconciliation of cash and cash equivalents and restricted cash reportedwere included within Due from affiliates in the consolidated balance sheets to the consolidated statements of cash flows (in thousands):
| | | | | | | | | | | | | | | | | |
| December 31, |
| 2021 | | 2020 | | 2019 |
| Cash and cash equivalents | $ | 165,427 | | | $ | 248,662 | | | $ | 196,028 | |
| Restricted cash | 52,523 | | | 63,117 | | | 55,490 | |
| Total cash and cash equivalents and restricted cash | $ | 217,950 | | | $ | 311,779 | | | $ | 251,518 | |
Land, Buildings and Improvements — We carry land, buildings, and improvements at cost less accumulated depreciation. We capitalize costs that extend the useful life of properties or increase their value, while we expense maintenance and repairs that do not improve or extend the lives of the respective assets as incurred.
Gain/Loss on Sale — We recognize gains and losses on the sale of properties when the transaction meets the definition of a contract, criteria are met for the sale of one or more distinct assets, and control of the properties is transferred.sheets.
Cash and Cash Equivalents — We consider all short-term, highly liquid investments that are both readily convertible to cash and have a maturity of three months or less at the time of purchase to be cash equivalents. Items classified as cash equivalents include commercial paper and money market funds. Our cash and cash equivalents are held in the custody of several financial institutions, and these balances, at times, exceed federally insurable limits. We seek to mitigate this risk by depositing funds only with major financial institutions.
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| W. P. Carey 2023 10-K– 69 |
Notes to Consolidated Financial Statements
Restricted Cash — Restricted cash primarily consists of security deposits and amounts required to be reserved pursuant to lender agreements for debt service, capital improvements, and real estate taxes. The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the consolidated balance sheets to the consolidated statements of cash flows (in thousands):
| | | | | | | | | | | | | | | | | |
| December 31, |
| 2023 | | 2022 | | 2021 |
| Cash and cash equivalents | $ | 633,860 | | | $ | 167,996 | | | $ | 165,427 | |
Restricted cash (a) | 58,111 | | | 56,145 | | | 52,523 | |
| Total cash and cash equivalents and restricted cash | $ | 691,971 | | | $ | 224,141 | | | $ | 217,950 | |
__________
(a)Restricted cash is included within Other assets, net on our consolidated balance sheets.
Real Estate and Operating Real Estate — We carry land, buildings, and improvements at cost less accumulated depreciation. We capitalize costs that extend the useful life of properties or increase their value, while we expense maintenance and repairs that do not improve or extend the lives of the respective assets as incurred.
Gain/Loss on Sale — We recognize gains and losses on the sale of properties when the transaction meets the definition of a contract, criteria are met for the sale of one or more distinct assets, and control of the properties is transferred.
Internal-Use Software Development Costs and Cloud Computing Arrangements — We expense costs associated with the assessment stage of software development projects. Upon completion of the preliminary project assessment stage, we capitalize internal and external costs associated with the application development stage. We expense the personnel-related costs of training and data conversion. We also expense costs associated with the post-implementation and operation stage, including maintenance and specified upgrades; however, we capitalize internal and external costs associated with significant upgrades to existing systems that result in additional functionality. Cloud computing arrangement costs follow the internal-use software accounting guidance to determine which implementation costs to capitalize as assets or expense as incurred. Capitalized internal-use software development costs are amortized on a straight-line basis over the software’s estimated useful life, which is three to seven years. Capitalized implementation costs related to a service contract will be amortized over the term of the hosting arrangement beginning when the component of the hosting arrangement is ready for its intended use. Periodically, we reassess the useful life considering technology, obsolescence, and other factors.
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| W. P. Carey 2021 10-K– 65
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Notes to Consolidated Financial Statements
Other Assets and Liabilities — We include prepaid expenses, deferred rental income, tenant receivables, deferred charges, escrow balances held by lenders, restricted cash balances, marketable securities, derivative assets, other intangible assets, corporate fixed assets, our investment in shares of Lineage Logistics (a cold storage REIT) (Note 810), our investment in shares of Guggenheim Credit Income Fund (“GCIF”) (Note 810), and office lease ROU assets in Other assets, net. We include derivative liabilities, amounts held on behalf of tenants, operating lease liabilities, and deferred revenue in Accounts payable, accrued expenses and other liabilities.
Revenue Recognition, Real Estate Leased to Others — We lease real estate to others primarily on a triple-net leased basis, whereby the tenant is generally responsible for operating expenses relating to the property, including property taxes, insurance, maintenance, repairs, and improvements.
Substantially all of our leases provide for either scheduled rent increases, periodic rent adjustments based on formulas indexed to changes in the CPI or similar indices, or percentage rents. CPI-based adjustments are contingent on future events and are therefore not included as minimum rent in straight-line rent calculations. We recognize rents from percentage rents as reported by the lessees, which is after the level of sales requiring a rental payment to us is reached. Percentage rents were insignificant for the periods presented.
For our operating leases, we recognize future minimum rental revenue on a straight-line basis over the non-cancelable lease term of the related leases and charge expenses to operations as incurred (Note 46). We record leases accounted for under the direct financing method as a net investment in direct financing leases (Note 57). The net investment is equal to the cost of the leased assets. The difference between the cost and the gross investment, which includes the residual value of the leased asset and the future minimum rents, is unearned income. We defer and amortize unearned income to income over the lease term so as to produce a constant periodic rate of return on our net investment in the lease.
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| W. P. Carey 2023 10-K– 70 |
Notes to Consolidated Financial Statements
Revenue from contracts under ASC 606, Revenue from Contracts with Customers is recognized when, or as, control of promised goods or services is transferred to customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. At contract inception, we assess the services promised in our contracts with customers and identify a performance obligation for each promise to transfer to the customer a good or service (or bundle of goods or services) that is distinct. To identify the performance obligations, we consider all of the services promised in the contract regardless of whether they are explicitly stated or are implied by customary business practices. ASC 606 does not apply to our lease revenues, which constitute a majority of our revenues, but primarily applies to revenues generated from our hotel operating properties and our Investment Management segment.
Revenue from contracts for our Real Estate segment primarily represented hotel operating property revenues of $7.2$76.2 million, $5.9$12.0 million, and $29.4$7.2 million for the years ended December 31, 2023, 2022, and 2021, 2020, and 2019, respectively. respectively, generated from 13 hotels located in the United States (12 of which were reclassified from net leases to operating properties in the first quarter of 2023 (Note 6); eight of these properties were sold during year ended December 31, 2023 (Note 17)).
Such operating property revenues are primarily comprised of revenues from room rentals and from food and beverage services at our hotel operating properties during those years. We identified a single performance obligation for each distinct service. Performance obligations are typically satisfied at a point in time, at the time of sale, or at the rendering of the service. Fees are generally determined to be fixed. Payment is typically due immediately following the delivery of the service.
Revenue from contracts under ASC 606 from our Investment Management segment is discussed in Note 3.
Lease revenue (including straight-line lease revenue) is only recognized when deemed probable of collection. Collectibility is assessed for each tenant receivable using various criteria including credit ratings (Note 5), guarantees, past collection issues, and the current economic and business environment affecting the tenant. If collectibility of the contractual rent stream is not deemed probable, revenue will only be recognized upon receipt of cash from the tenant.Revenue Recognition, Investment Management Operations — We earn structuring revenue and asset management revenue in connection with providing services to the Managed Programs. We earn structuring revenue for services we provide in connection with the analysis, negotiation,Programs and structuring of transactions, including acquisitions and dispositions and the placement of mortgage financing obtained by the Managed Programs.NLOP. We earn asset management revenue from property management, leasing, and advisory services performed. In addition, we
We earn subordinated incentiveother advisory income and disposition revenue related to the disposition of properties. We may also earn termination revenuereimbursements from NLOP for certain administrative services, including day-to-day management services, investor relations, accounting, tax, legal, and other administrative matters, paid in connection with a liquidity event and/or the termination of the advisory agreements for the Managed REITs.cash.
The Managed Programs reimburse us for certain personnel and overhead costs that we incur on their behalf. We record reimbursement income as the expenses are incurred, subject to limitations imposed by the advisory agreements. Revenue from contracts under ASC 606 from our Investment Management segment is discussed in Note 5.
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| W. P. Carey 2021 10-K– 66
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Notes to Consolidated Financial Statements
Asset Retirement Obligations — Asset retirement obligations relate to the legal obligations associated with the retirement of long-lived assets that result from the acquisition, construction, development, and/or normal operation of a long-lived asset. The fair value of a liability for an asset retirement obligation is recorded in the period in which it is incurred or at the point of acquisition of an asset with an assumed asset retirement obligation, and the cost of such liability is recorded as an increase in the carrying amount of the related long-lived asset by the same amount. The liability is accreted each period and the capitalized cost is depreciated over the estimated remaining life of the related long-lived asset. Revisions to estimated retirement obligations result in adjustments to the related capitalized asset and corresponding liability.
In order to determine the fair value of the asset retirement obligations, we make certain estimates and assumptions including, among other things, projected cash flows, the borrowing interest rate, and an assessment of market conditions that could significantly impact the estimated fair value. These estimates and assumptions are subjective.
Depreciation — We compute depreciation of building and related improvements using the straight-line method over the estimated remaining useful lives of the properties (not to exceed 40 years) and furniture, fixtures, and equipment. We compute depreciation of tenant improvements using the straight-line method over the lesser of the remaining term of the lease or the estimated useful life.
Stock-Based Compensation — We have granted restricted share awards (“RSAs”), restricted share units (“RSUs”), and performance share units (“PSUs”) to certain employees, independent directors, and nonemployees. Grants were awarded in the name of the recipient subject to certain restrictions of transferability and a risk of forfeiture. Stock-based compensation expense for all equity-classified stock-based compensation awards is based on the grant date fair value estimated in accordance with current accounting guidance for share-based payments, which includes awards granted to certain nonemployees. We recognize these compensation costs for only those shares expected to vest on a straight-line basis over the requisite service or performance period of the award. We include stock-based compensation within Additional paid-in capital in the consolidated statements of equity and Stock-based compensation expense in the consolidated statements of income.
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| W. P. Carey 2023 10-K– 71 |
Notes to Consolidated Financial Statements
Foreign Currency Translation and Transaction Gains and Losses — We have interests in international real estate investments primarily in Europe, Canada, and Japan, and the primary functional currencies for those investments are the euro, the British pound sterling, the Canadian dollar, and the Japanese yen. We perform the translation from these currencies to the U.S. dollar for assets and liabilities using current exchange rates in effect at the balance sheet date and for revenue and expense accounts using the average exchange rate during the month in which the transaction occurs. We report the gains and losses resulting from such translation as a component of other comprehensive income in equity. These translation gains and losses are released to net income (within Gain on sale of real estate, net, in the consolidated statements of income) when we have substantially exited from all investments in the related currency.
A transaction gain or loss (measured from the transaction date or the most recent intervening balance sheet date, whichever is later), realized upon settlement of a foreign currency transaction generally will be included in net income for the period in which the transaction is settled. Also, foreign currency intercompany transactions that are scheduled for settlement, consisting primarily of accrued interest and the translation to the reporting currency of intercompany debt that is short-term or has scheduled principal payments, are included in the determination of net income (within Other gains and (losses) in the statements of income).
The translation impact of foreign currency transactions of a long-term nature (that is, settlement is not planned or anticipated in the foreseeable future), in which the entities involved in the transactions are consolidated or accounted for by the equity method in our consolidated financial statements, are not included in net income but are reported as a component of other comprehensive income in equity.
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| W. P. Carey 2021 10-K– 67
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Notes to Consolidated Financial Statements
Derivative Instruments — We measure derivative instruments at fair value and record them as assets or liabilities, depending on our rights or obligations under the applicable derivative contract. Derivatives that are not designated as hedges must be adjusted to fair value through earnings. For derivatives designated and that qualify as cash flow hedges, the change in fair value of the derivative is recognized in Other comprehensive income (loss) until the hedged transaction affects earnings. Gains and losses on the cash flow hedges representing hedge components excluded from the assessment of effectiveness are recognized in earnings over the life of the hedge on a systematic and rational basis, as documented at hedge inception in accordance with our accounting policy election. Such gains and losses are recorded within Other gains and (losses) or Interest expense in our consolidated statements of income. The earnings recognition of excluded components is presented in the same line item as the hedged transactions. For derivatives designated and that qualify as a net investment hedge, the change in the fair value and/or the net settlement of the derivative is reported in Other comprehensive income (loss) as part of the cumulative foreign currency translation adjustment. Amounts are reclassified out of Other comprehensive income (loss) into earnings (within Gain on sale of real estate, net, in our consolidated statements of income) when the hedged investment is either sold or substantially liquidated. In accordance with fair value measurement guidance, counterparty credit risk is measured on a net portfolio position basis.
Segment Allocation Changes — Beginning with the second quarter of 2020, general and administrative expenses attributed to our Investment Management segment are comprised of the incremental costs of providing services to the Managed Programs, which are fully reimbursed by those funds (resulting in no net expense for us). All other general and administrative expenses are attributed to our Real Estate segment. Previously, general and administrative expenses were allocated based on time incurred by our personnel for the Real Estate and Investment Management segments. In addition, beginning with the second quarter of 2020, stock-based compensation expense and corporate depreciation and amortization expense are fully recognized within our Real Estate segment. In light of the termination of the advisory agreements with CWI 1 and CWI 2 in connection with the WLT management internalization (Note 3), we now view essentially all assets, liabilities, and operational expenses as part of our Real Estate segment, other than incremental activities that are expected to wind down as we manage CPA:18 –Global and CESH through the end of their respective life cycles. These changes between the segments had no impact on our consolidated financial statements.
In addition, our investments in WLT, and income recognized from our investments in WLT, are included within our Real Estate segment, since we are not the advisor to that company. Previously, our investments in CWI 1 and CWI 2, and income recognized from our investments in CWI 1 and CWI 2, were included within our Investment Management segment (Note 3).Income Taxes — We conduct business in various states and municipalities primarily within North America and Europe, and as a result, we or one or more of our subsidiaries file income tax returns in the United States federal jurisdiction and various state and foreign jurisdictions. We derive most of our REIT income from our real estate operations under our Real Estate segment. Our domestic real estate operations are generally not subject to federal tax, and accordingly, no provision has been made for U.S. federal income taxes in the consolidated financial statements for these operations. These operations may be subject to certain state and local taxes, as applicable. We conductPrior to the CPA:18 Merger, we conducted our Investment Management operations primarily through TRSs. In general, a TRS may perform additional services for our tenants and generally may engage in any real estate or non-real estate-related business. These operations are subject to federal, state, local, and foreign taxes, as applicable. Our financial statements are prepared on a consolidated basis including these TRSs and include a provision for current and deferred taxes on these operations.
Significant judgment is required in determining our tax provision and in evaluating our tax positions. We establish tax reserves based on a benefit recognition model, which could result in a greater amount of benefit (and a lower amount of reserve) being initially recognized in certain circumstances. Provided that the tax position is deemed more likely than not of being sustained, we recognize the largest amount of tax benefit that is greater than 50% likely of being ultimately realized upon settlement. We derecognize the tax position when it is no longer more likely than not of being sustained.
Our earnings and profits, which determine the taxability of distributions to stockholders, differ from net income reported for financial reporting purposes due primarily to differences in depreciation, including hotel properties, and timing differences of rent recognition and certain expense deductions, for federal income tax purposes.
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| W. P. Carey 2023 10-K– 72 |
Notes to Consolidated Financial Statements
We recognize deferred income taxes in certain of our subsidiaries taxable in the United States or in foreign jurisdictions. Deferred income taxes are generally the result of temporary differences (items that are treated differently for tax purposes than for GAAP purposes as described in Note 1416). In addition, deferred tax assets arise from unutilized tax net operating losses, generated in prior years. Deferred income taxes are computed under the asset and liability method. The asset and liability method requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between tax bases and financial bases of assets and liabilities. We provide a valuation allowance against our | | | | | |
| W. P. Carey 2021 10-K– 68
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Notes to Consolidated Financial Statements
deferred income tax assets when we believe that it is more likely than not that all or some portion of the deferred income tax asset may not be realized. Whenever a change in circumstances causes a change in the estimated realizability of the related deferred income tax asset, the resulting increase or decrease in the valuation allowance is included in deferred income tax expense (benefit).
Earnings Per Share — Basic earnings per share is calculated by dividing net income available to common stockholders as adjusted for unallocated earnings attributable to the nonvested RSUs by the weighted-average number of shares of common stock outstanding during the year. Diluted earnings per share reflects potentially dilutive securities (RSAs, RSUs, PSUs, and shares available for issuance under our Equity Forwards and ATM Forwards) using the treasury stock method, except when the effect would be anti-dilutive.
Reference Rate Reform — During the first quarter of 2023, we applied the guidance in ASC 848, Reference Rate Reform and elected the practical expedient to transition certain contracts that reference London Interbank Offered Rate (“LIBOR”) to the Secured Overnight Financing Rate (“SOFR”), including our Senior Unsecured Credit Facility (Note 12) and certain derivative instruments. The application of this guidance did not have a material impact on our consolidated financial statements.
Use of Estimates — The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and the disclosure of contingent amounts in our consolidated financial statements and the accompanying notes. Actual results could differ from those estimates.
Recently Adopted Accounting Pronouncements
Note 3. NLOP Spin-Off
In March 2020,
Spin-Off
On November 1, 2023, we completed the Financial Accounting Standards Board (“FASB”) issued Spin-Off of 59 office properties into NLOP (ASU 2020-04, Reference Rate Reform (Topic 848): FacilitationNote 1). The Spin-Off was accomplished via a pro rata dividend of one NLOP common share for every 15 shares of WPC common stock outstanding. Following the closing of the Effects of Reference Rate Reform on Financial Reporting. ASU 2020-04 contains practical expedientsSpin-Off, NLOP operates as a separate publicly-traded REIT, for reference rate reform-related activities that impact debt, leases, derivatives, and other contracts. On January 7, 2021,which we serve as advisor pursuant to the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, which clarifies that certain optional expedients and exceptionsNLOP Advisory Agreements executed in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected byconnection with the transition. We have evaluated contracts that reference London Interbank Offered Rate (“LIBOR”) or other discontinued reference rates and accounted for the necessary modifications with a replacement reference rate using the expedients and exceptions provided for in ASU 2020-04 and ASU 2021-01. As of December 31, 2021, this reference rate transition impacted only our Senior Unsecured Credit Facility,Spin-Off, as described below in further detail. On the Senior Unsecured Credit Facility was amendeddate of the Spin-Off, NLOP’s portfolio of 59 office properties totaled approximately 9.3 million leasable square feet (including 0.6 million of operating square footage for a parking garage at a domestic property) (unaudited) primarily leased to transition62 corporate tenants on a single-tenant net lease basis. The vast majority of the office properties owned by NLOP are located in the United States, with the balance in Europe. NLOP’s portfolio generated ABR totaling approximately $145 million as of September 30, 2023. We also derecognized non-recourse mortgages encumbering ten properties totaling $164.7 million.
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| W. P. Carey 2023 10-K– 73 |
Notes to certain replacement reference rates. Consolidated Financial Statements
The adoptionfollowing table summarizes assets, liabilities, and equity derecognized in connection with the Spin-Off (in thousands):
| | | | | |
| Assets | |
| Investments in real estate: | |
| Land, buildings and improvements — net lease and other | $ | 1,299,400 | |
| In-place lease and other intangible assets | 373,631 | |
| Above-market rent intangible assets | 58,426 | |
| Investments in real estate | 1,731,457 | |
| Accumulated depreciation and amortization | (454,768) | |
| Net investments in real estate | 1,276,689 | |
| Cash and cash equivalents and restricted cash | 9,141 | |
| Other assets, net (excluding restricted cash) | 70,472 | |
| 61,737 | |
| (47,282) | |
| Total assets | $ | 1,370,757 | |
| Liabilities and Equity | |
| Non-recourse mortgages, net | $ | 164,743 | |
| Accounts payable, accrued expenses and other liabilities | 54,199 | |
| Below-market rent and other intangible liabilities | 11,799 | |
| Deferred income taxes | 9,718 | |
| Total liabilities | 240,459 | |
| |
| Distributions in excess of accumulated earnings | 229,712 | |
| Accumulated other comprehensive loss | (35,664) | |
| Noncontrolling interests | 4,406 | |
| Total equity | 198,454 | |
| Total liabilities and equity | $ | 438,913 | |
The following table summarizes the impact to the components of these standards did not haveTotal equity in connection with the Spin-Off (in thousands):
| | | | | |
| Impact to Total Equity | |
| Total assets derecognized (excluding cash and cash equivalents and restricted cash) | $ | (1,361,616) | |
| Total liabilities derecognized | 240,459 | |
| Net assets derecognized | (1,121,157) | |
| Less: Proceeds in connection with the Spin-Off, reflecting cash and cash equivalents and restricted cash derecognized (described below under “Debt Facility”) | 343,885 | |
| Impact to Total equity | $ | (777,272) | |
| |
| Impact to Components of Total Equity | |
| Distributions in excess of accumulated earnings derecognized | $ | (229,712) | |
| Accumulated other comprehensive income derecognized | 35,664 | |
| Noncontrolling interests derecognized | (4,406) | |
| Reduction to Additional paid-in capital | (578,818) | |
| Impact to Total equity | $ | (777,272) | |
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| W. P. Carey 2023 10-K– 74 |
Notes to Consolidated Financial Statements
NLOP Agreements
Pursuant to the NLOP Advisory Agreements, which we entered into on November 1, 2023, we provide NLOP with strategic management services, including asset management, property disposition support, and various related services. NLOP will pay us an asset management fee of approximately $7.5 million annually, which will be proportionately reduced following the disposition of a material impactportfolio property. Such fees are included in Asset management revenue on our consolidated financial statements.statements of income. In addition, NLOP will reimburse us a base administrative amount of approximately $4.0 million annually, for certain administrative services, including day-to-day management services, investor relations, accounting, tax, legal, and other administrative matters. Such amounts are included in Other advisory income and reimbursements on our consolidated statements of income.
On October 31, 2023, we entered into a Separation and Distribution Agreement, which set forth the various individual transactions to be consummated that comprised the Separation and the Distribution, including the assets transferred to and liabilities assumed by NLOP.
On October 31, 2023, we also entered into a Tax Matters Agreement, which governs the respective rights, responsibilities, and obligations of us and NLOP after the Distribution, with respect to tax liabilities and benefits, the preparation and filing of tax returns, the control of audits and other tax proceedings, tax covenants, tax indemnification, cooperation, and information sharing.
Debt Facility
In September 2023, NLOP entered into a new $455 million debt facility, which was executed by NLOP and funded upon the closing of the Spin-Off on November 1, 2023 (the “NLOP Financing Arrangements”). Approximately $343.9 million of this amount (net of (i) transaction expenses and (ii) cash and cash equivalents and restricted cash derecognized) was retained by us in connection with the Spin-Off.
Spin-Off Costs
In connection with the Spin-Off, we have incurred approximately $61.6 million in total costs, comprised of (i) $10.0 million of advisory fees, which is included in Merger and other expenses on our consolidated statements of income ($4.9 million of such fees were recognized during 2022 and $5.1 million were recognized during the year ended December 31, 2023); and (ii) $51.6 million of additional Spin-Off related costs (including $14.4 million of financing costs incurred in connection with the NLOP Financing Arrangements), which were reimbursed to us by NLOP in connection with the Spin-Off.
Note 3.4. Merger with CPA:18 – Global
CPA:18 Merger
On February 27, 2022, we and certain of our subsidiaries entered into a merger agreement with CPA:18 – Global, pursuant to which CPA:18 – Global would merge with and into one of our indirect subsidiaries in exchange for shares of our common stock and cash, subject to approval by the stockholders of CPA:18 – Global. The CPA:18 Merger and related transactions were approved by the stockholders of CPA:18 – Global on July 26, 2022 and completed on August 1, 2022.
At the effective time of the CPA:18 Merger, each share of CPA:18 – Global common stock issued and outstanding immediately prior to the effective time of the CPA:18 Merger was canceled and, in exchange for cancellation of such share, the rights attaching to such share were converted automatically into the right to receive (i) 0.0978 shares of our common stock and (ii) $3.00 in cash, which we refer to herein as the Merger Consideration. Each share of CPA:18 – Global common stock owned by us or any of our subsidiaries immediately prior to the effective time of the CPA:18 Merger was automatically canceled and retired, and ceased to exist, for no Merger Consideration. In exchange for the 141,099,002 shares of CPA:18 – Global common stock that we and our subsidiaries did not previously own, we paid total merger consideration of approximately $1.6 billion, consisting of (i) the issuance of 13,786,302 shares of our common stock with a fair value of $1.2 billion, based on the closing price of our common stock on August 1, 2022 of $87.46 per share, (ii) cash consideration of $423.3 million, and (iii) cash of $0.1 million paid in lieu of issuing any fractional shares of our common stock. Pursuant to the terms of the definitive merger agreement, in connection with the closing of the CPA:18 Merger, we waived certain back-end fees that we would have otherwise been entitled to receive from CPA:18 – Global upon its liquidation pursuant to the terms of our pre-closing advisory agreement with CPA:18 – Global.
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| W. P. Carey 2023 10-K– 75 |
Notes to Consolidated Financial Statements
Immediately prior to the closing of the CPA:18 Merger, CPA:18 – Global’s portfolio was comprised of full or partial ownership interests in 42 leased properties (including seven properties in which we already owned a partial ownership interest), substantially all of which were net leased with a weighted-average lease term of 7.0 years, an occupancy rate of 99.3% (unaudited), and an estimated contractual minimum annualized base rent (“ABR”) totaling $81.0 million, as well as 65 self-storage operating properties and two student housing operating properties totaling 5.1 million square feet (unaudited). The related property-level debt was comprised of non-recourse mortgage loans with an aggregate consolidated fair value of approximately $900.2 million with a weighted-average annual interest rate of 5.1% as of August 1, 2022. From the closing of the CPA:18 Merger through December 31, 2022, lease revenues, operating property revenues, and net income from properties acquired were $42.7 million, $39.2 million, and $12.3 million, respectively.
Two of the net lease properties that we acquired in the CPA:18 Merger were classified as Assets held for sale, with an aggregate fair value of $85.0 million at acquisition. From the closing of the CPA:18 Merger through December 31, 2022, lease revenues from these properties totaled $4.9 million. We sold one of these properties in August 2022 for total proceeds, net of selling costs, of $44.5 million, and recognized a loss on sale of $0.2 million (Note 17). We sold the other property in October 2023 for total proceeds, net of selling costs, of $29.5 million (Note 17).
Purchase Price Allocation
We accounted for the CPA:18 Merger as a business combination under the acquisition method of accounting. After consideration of all applicable factors pursuant to the business combination accounting rules, we were considered the “accounting acquirer” due to various factors, including the fact that our stockholders held the largest portion of the voting rights in the combined company upon completion of the CPA:18 Merger. Costs related to the CPA:18 Merger have been expensed as incurred and classified within Merger and other expenses in the consolidated statements of income, totaling $17.2 million for the year ended December 31, 2022.
Goodwill
The $172.3 million of goodwill recorded in the CPA:18 Merger was primarily due to the premium we paid over CPA:18 – Global’s estimated fair value. Management believes the premium is supported by several factors, including that the CPA:18 Merger (i) concludes our exit from the non-traded REIT business, (ii) adds a high-quality diversified portfolio of net lease assets that is well-aligned with our existing portfolio, (iii) enhances certain portfolio metrics, and (iv) adds an attractive portfolio of self-storage operating properties.
The fair value of the 13,786,302 shares of our common stock issued in the CPA:18 Merger as part of the consideration paid for CPA:18 – Global of $1.6 billion was derived from the closing market price of our common stock on the acquisition date. As required by GAAP, the fair value related to the assets acquired and liabilities assumed, as well as the shares exchanged, has been computed as of the date we gained control, which was the closing date of the CPA:18 Merger, in a manner consistent with the methodology described above.
Goodwill is not deductible for income tax purposes.
Equity Investments
During the third quarter of 2022, we recognized a gain on change in control of interests of approximately $22.5 million, which was the difference between the carrying value of approximately $65.8 million and the fair value of approximately $88.3 million of our previously held equity interest in 8,556,732 shares of CPA:18 – Global’s common stock.
The CPA:18 Merger also resulted in our acquisition of the remaining interests in four investments in which we already had a joint interest and accounted for under the equity method. Upon acquiring the remaining interests in these investments, we owned 100% of these investments and thus accounted for the acquisitions of these interests utilizing the purchase method of accounting. Due to the change in control of the four jointly owned investments that occurred, we recorded a gain on change in control of interests of approximately $11.4 million during the third quarter of 2022, which was the difference between our
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| W. P. Carey 2023 10-K– 76 |
Notes to Consolidated Financial Statements
carrying values and the fair values of our previously held equity interests on August 1, 2022 of approximately $17.2 million and approximately $28.6 million, respectively. Subsequent to the CPA:18 Merger, we consolidate these wholly owned investments.
Pro Forma Financial Information (Unaudited)
The following consolidated pro forma financial information has been presented as if the CPA:18 Merger had occurred on January 1, 2021 for the years ended December 31, 2022 and 2021. The pro forma financial information is not necessarily indicative of what the actual results would have been had the CPA:18 Merger on that date, nor does it purport to represent the results of operations for future periods.
(in thousands)
| | | | | | | | | | | |
| Years Ended December 31, |
| 2022 | | 2021 |
| Pro forma total revenues | $ | 1,590,233 | | | $ | 1,509,828 | |
Note 5. Agreements and Transactions with Related Parties
Advisory Agreements and Partnership Agreements with the Managed Programs and NLOP
We currently have advisory agreementsarrangements with CPA:18 – Global and CESH, pursuant to which we earn fees and are entitled to receive reimbursement for certain fund management expenses. Upon completion of the CWI 1 and CWI 2CPA:18 Merger on April 13, 2020, as described below,August 1, 2022 (Note 4), our advisory agreements with CWI 1 and CWI 2 were terminated, and we no longer receive fees, reimbursements, or distributions of Available Cash from CWI 1 and CWI 2. We no longer raise capital for new or existing funds, but we currently expect to continue to manage CPA:18 – Global and CESH and earn various fees (as described below) through the end of their respective life cycles. We have partnership agreements with CPA:18 – Global were terminated, and CESH, and under the partnership agreement withwe ceased earning revenue from CPA:18 – Global, weGlobal. The NLOP Advisory Agreements are entitled to receive certain cash distributions from its operating partnership.described in Note 3.
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| W. P. Carey 2021 10-K– 69
|
Notes to Consolidated Financial Statements
The following tables present a summary of revenue earned, reimbursable costs, and distributions of Available Cash received/accrued from the Managed Programs, NLOP, and WLTWatermark Lodging Trust, Inc. (“WLT”) (a former affiliate) for the periods indicated, included in the consolidated financial statements (in thousands):
| | | | Years Ended December 31, | | Years Ended December 31, |
| | | 2021 | | 2020 | | 2019 | | 2023 | | 2022 | | 2021 |
Asset management revenue (a) | Asset management revenue (a) | $ | 15,363 | | | $ | 21,973 | | | $ | 39,132 | |
Other advisory income and reimbursements (a) | |
Reimbursable costs from affiliates (a) | |
Distributions of Available Cash (b) | Distributions of Available Cash (b) | 7,345 | | | 7,225 | | | 21,489 | |
Reimbursable costs from affiliates (a) | 4,035 | | | 8,855 | | | 16,547 | |
Interest income on deferred acquisition fees and loans to affiliates (c) | 120 | | | 369 | | | 2,237 | |
Structuring and other advisory revenue (a) | — | | | 494 | | | 4,224 | |
| $ | 26,863 | | | $ | 38,916 | | | $ | 83,629 | |
Interest income on loans to affiliates (c) | |
| $ | |
| | Years Ended December 31, |
| 2021 | | 2020 | | 2019 |
| Years Ended December 31, | | | Years Ended December 31, |
| 2023 | | | 2023 | | 2022 | | 2021 |
| NLOP | |
| CESH | |
| CPA:18 – Global | CPA:18 – Global | $ | 22,867 | | | $ | 22,200 | | | $ | 26,039 | |
| CWI 1 | — | | | 5,662 | | | 30,770 | |
| CWI 2 | — | | | 4,668 | | | 21,584 | |
| CESH | 3,713 | | | 4,723 | | | 5,236 | |
| WLT (reimbursed transition services) | WLT (reimbursed transition services) | 283 | | | 1,663 | | | — | |
| | | $ | 26,863 | | | $ | 38,916 | | | $ | 83,629 | |
__________
(a)Amounts represent revenues from contracts under ASC 606.
(b)Included within (Losses) earningsEarnings (losses) from equity method investments in the consolidated statements of income.
(c)Included within Non-operating income in the consolidated statements of income.
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| W. P. Carey 2023 10-K– 77 |
Notes to Consolidated Financial Statements
The following table presents a summary of amounts included in Duedue from affiliates, which are included within Other assets, net in the consolidated financial statements (in thousands):
| | December 31, |
| 2021 | | 2020 |
| Reimbursable costs | $ | 974 | | | $ | 1,760 | |
| December 31, | | | December 31, |
| 2023 | | | 2023 | | 2022 |
| Asset management fees receivable | Asset management fees receivable | 494 | | | 1,054 | |
| Accounts receivable | Accounts receivable | 336 | | | 305 | |
| Current acquisition fees receivable | 19 | | | 136 | |
| Deferred acquisition fees receivable, including accrued interest | 3 | | | 1,858 | |
| Short-term loans to affiliates, including accrued interest | — | | | 21,144 | |
| $ | 1,826 | | | $ | 26,257 | |
| Reimbursable costs | |
| $ | |
Performance Obligations and Significant Judgments
The fees earned pursuant to our advisory agreements are considered variable consideration. For the agreements that include multiple performance obligations, including asset management and investment structuring services, revenue is allocated to each performance obligation based on estimates of the price that we would charge for each promised service if it were sold on a standalone basis.
Judgment is applied in assessing whether there should be a constraint on the amount of fees recognized, such as amounts in excess of certain threshold limits with respect to the contract price or any potential clawback provisions included in certain of our arrangements. We exclude fees subject to such constraints to the extent it is probable that a significant reversal of those amounts will occur.
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| W. P. Carey 2021 10-K– 70
|
Notes to Consolidated Financial Statements
Asset Management Revenue
Under the advisory agreementsagreement with the Managed Programs,CESH, we earn asset management revenue for managing their investment portfolios. The following table presentsat a summaryrate of our1.0% based on its gross assets at fair value, paid in cash. Under the advisory agreement with NLOP, we earn an asset management fee arrangements withof approximately $7.5 million annually, which will be proportionately reduced following the remaining Managed Programs:
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Managed Program | | Rate | | Payable | | Description |
CPA:18 – Global | | 0.5% – 1.5% | | In shares of its Class A common stock and/or cash, at the option of CPA:18 – Global; payable 50% in cash and 50% in shares of its Class A common stock for 2019 and for January 1, 2020 to March 31, 2020; payable in shares of its Class A common stock effective as of April 1, 2020 | | Rate depends on the type of investment and is based on the average market or average equity value, as applicable |
CESH | | 1.0% | | In cash | | Based on gross assets at fair value |
For CWI 1 and CWI 2 (prior to the closingdisposition of the CWI 1 and CWI 2 Merger on April 13, 2020), we earned asset management fees of 0.5% and 0.55%, respectively, of the average market values of their respective investment portfolios, paid in shares of their common stock and Class A common stock, respectively. We were required to pay 20% and 25% of such fees to the subadvisors of CWI 1 and CWI 2, respectively.a portfolio property.
The performance obligation for asset management services is satisfied over time as services are rendered. The time-based output method is used to measure progress over time, as this is representative of the transfer of the services. We are compensated for our services on a monthly or quarterly basis. However, these services represent a series of distinct daily services under ASC 606, Revenue from Contracts with Customers. Accordingly, we satisfy the performance obligation and resolve the variability associated with our fees on a daily basis. We apply the practical expedient and, as a result, do not disclose variable consideration attributable to wholly or partially unsatisfied performance obligations as of the end of the reporting period.
In providing asset management services, we are reimbursed for certain costs. Direct reimbursement of these costs does not represent a separate performance obligation. Payment for asset management services is typically due on the first business day following the month of the delivery of the service.
Structuring and Other Advisory Revenue
Under the terms of the advisory agreements with the Managed Programs, we may earn revenue for structuringIncome and negotiating investments. For CPA:18 – Global and CESH, we may earn fees of 4.5% and 2.0%, respectively, of the total aggregate cost of the investments or commitments made. For CWI 1 and CWI 2 (prior to the closing of the CWI 1 and CWI 2 Merger on April 13, 2020), we were entitled to fees for structuring investments and loan refinancings. We were required to pay 20% and 25% of such fees to the subadvisors of CWI 1 and CWI 2, respectively.
The performance obligation for investment structuring services is satisfied at a point in time upon the closing of an investment acquisition, when there is an enforceable right to payment, and control (as well as the risks and rewards) has been transferred. Determining when control transfers requires management to make judgments that affect the timing of revenue recognized. Payment is due either on the day of acquisition (current portion) or deferred, as described above (Note 5). We do not believe the deferral of the fees represents a significant financing component.Reimbursements
Under the advisory agreement with NLOP, we earn a base administrative amount of approximately $4.0 million annually, for certain administrative services, including day-to-day management services, investor relations, accounting, tax, legal, and other administrative matters, paid in cash.
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| W. P. Carey 2021 10-K– 71
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Notes to Consolidated Financial Statements
Reimbursable Costs from Affiliates
The existing Managed Programs reimburseCESH reimburses us in cash for certain personnel and overhead costs that we incur on their behalf. For CPA:18 – Global, such costs (excluding those related to our legal transactions group, our senior management, and our investments team) are charged to CPA:18 – Global based on the average of the trailing 12-month aggregate reported revenues of the Managed Programs and us, and personnel costs are capped at 1.0% of CPA:18 – Global’s pro rata lease revenues for 2021, 2020, and 2019; for the legal transactions group, costs are charged according to a fee schedule. For the CWI REITs, the reimbursements were based on actual expenses incurred, excluding those related to our senior management, and allocated between the CWI REITs based on the percentage of their total pro rata hotel revenues for the most recently completed quarter. Reimbursements from the CWI REITs ceased following the closing of the CWI 1 and CWI 2 Merger on April 13, 2020; after that date, we began recording reimbursements from WLT pursuant to a transition services agreement (described below) based on actual expenses incurred. On October 13, 2021, all services provided under the transition services agreement were terminated. For CESH, reimbursements areits behalf, based on actual expenses incurred.
Distributions of Available Cash
We arewere entitled to receive distributions of up to 10% of the Available Cash (as defined in CPA:18 – Global’s partnership agreement) from the operating partnershipspartnership of CPA:18 – Global, payable quarterly in arrears. After completion of the CWI 1 and CWI 2CPA:18 Merger on April 13, 2020,August 1, 2022 (Note 4), we no longer receive distributions of Available Cash from CWI 1 and CWI 2. Prior to the closing of the CWI 1 and CWI 2 Merger, we were required to pay 20% and 25% of such distributions to the subadvisors of CWI 1 and CWI 2, respectively.CPA:18 – Global.
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| W. P. Carey 2023 10-K– 78 |
Notes to Consolidated Financial Statements
Back-End Fees and Interests in the Managed Programs
Under our advisory agreementsarrangements with certain of the Managed Programs,CESH, we may also receive compensation in connection with providing a liquidity eventsevent for their stockholders.its investors. Such back-end fees or interests include or may include disposition fees, interests in disposition proceeds, and distributions related to ownership of shares or limited partnership units in the Managed Programs. On August 31, 2021, CPA:18 – Global reported that its independent directors intended to begin the process of evaluating possible liquidity alternatives for its shareholders, including a transaction involving us or one of our subsidiaries. The timing and form of any liquidity event is at the discretion of the special committee composed of CPA:18 – Global’s independent directors. Therefore, thereproceeds. There can be no assurance as to whether or when any back-end fees or interests will be realized. Back-end fees and interests relatedPursuant to the CWI 1terms of the definitive merger agreement, in connection with the closing of the CPA:18 Merger, we waived certain back-end fees that we would have been entitled to receive from CPA:18 – Global upon its liquidation pursuant to the terms of our advisory agreement and CWI 2 Merger are described below.partnership agreement with CPA:18 – Global (Note 4).
Other Transactions with Affiliates
CWI 1 and CWI 2 Merger
On October 22, 2019, CWI 1 and CWI 2 announced that they had entered into a definitive merger agreement under which the two companies intended to merge in an all-stock transaction, with CWI 2 as the surviving entity. The CWI 1 and CWI 2 Merger was approved by the stockholders of CWI 1 and CWI 2 on April 8, 2020 and closed on April 13, 2020. Subsequently, CWI 2 was renamed WLT, as described in Note 1. In connection with the CWI 1 and CWI 2 Merger, we entered into an internalization agreement and a transition services agreement. Immediately following the closing of the CWI 1 and CWI 2 Merger, (i) the advisory agreements with each of CWI 1 and CWI 2 and each of their respective operating partnerships terminated, (ii) the subadvisory agreements with the subadvisors for CWI 1 and CWI 2 were terminated, (iii) pursuant to the internalization agreement, two of our representatives were appointed to the board of directors of WLT (however both representatives resigned from the board of directors of WLT on April 29, 2020), and (iv) we provided certain transition services at cost to WLT, pursuant to a transition services agreement. On October 13, 2021, all services provided under the transition services agreement were terminated.
In accordance with the merger agreement, at the effective time of the CWI 1 and CWI 2 Merger, each issued and outstanding share of CWI 1’s common stock (or fraction thereof), was converted into the right to receive 0.9106 shares (the “exchange ratio”) of CWI 2 Class A common stock. As a result, we exchanged 6,074,046 shares of CWI 1 common stock for 5,531,025 shares of CWI 2 Class A common stock.
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| W. P. Carey 2021 10-K– 72
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Notes to Consolidated Financial Statements
Pursuant to the internalization agreement, the operating partnerships of each of CWI 1 and CWI 2 redeemed the special general partner interests that we previously held, for which we received 1,300,000 shares of CWI 2 preferred stock with a liquidation preference of $50.00 per share and 2,840,549 shares in CWI 2 Class A common stock (which was a non-cash investing activity). In connection with this redemption, we recognized a non-cash net gain on sale of $33.0 million, which was included within (Losses) earnings from equity method investments in the consolidated statements of income for the year ended December 31, 2020. This net gain on sale was recorded based on:
•a fair value of $46.3 million for the 1,300,000 shares of CWI 2 preferred stock that we received (Note 8);•a fair value of $11.6 million for the 2,840,549 shares in CWI 2 common stock that we received (Note 7);•a gain recognized on the redemption of the noncontrolling interest in the special general partner interests previously held by the respective subadvisors for CWI 1 and CWI 2 of $9.9 million (which is included within Net income attributable to noncontrolling interests in our consolidated statements of income and Redemption of noncontrolling interest in our consolidated statements of equity);
•an allocation of $34.3 million of goodwill within our Investment Management segment in accordance with ASC 350, Intangibles—goodwill and other, since the WLT management internalization resulted in a sale of a portion of our Investment Management business (the allocation of goodwill was based on the relative fair value of the portion of the Investment Management business sold) (Note 6); and•the carrying value of our previously held equity investments in the operating partnerships of CWI 1 and CWI 2 (Note 7), which totaled $0.5 million on the date of the merger.
We accounted for our investment in shares of WLT (formerly CWI 2) preferred stock as available-for-sale debt securities, which is included in Other assets, net in the consolidated financial statements, at fair value. We classified this investment as Level 3 because we primarily used a discounted cash flow valuation model that incorporates unobservable inputs to determine its fair value. In January 2022, WLT redeemed in full our 1,300,000 shares of its preferred stock for gross proceeds of $65.0 million (based on the liquidation preference of $50.00 per share, as described above) (Note 17). Since this redemption was based on market conditions that existed as of December 31, 2021, during the year ended December 31, 2021, we recognized an unrealized gain on our investment in preferred shares of WLT of $18.7 million, which was recognized within Other comprehensive income (loss) in the consolidated financial statements. The fair value of our investment in preferred shares of WLT approximated its carrying value, which was $65.0 million and $46.3 million as of December 31, 2021 and 2020, respectively (Note 8).
Prior to the closing of the CWI 1 and CWI 2 Merger, we owned 3,836,669 shares of CWI 2 Class A common stock. Following the closing of the CWI 1 and CWI 2 Merger, execution of the internalization agreement, and CWI 2 being renamed WLT, we own 12,208,243 shares of WLT common stock, which we account for as an equity method investment. We follow the hypothetical liquidation at book value (“HLBV”) model and recognize within equity income our proportionate share of WLT’s earnings based on our ownership of common stock of WLT, after giving effect to preferred dividends owed by WLT. We record our investment in shares of common stock of WLT on a one quarter lag. Our investment in shares of common stock of WLT, which is included in Equity method investments in the consolidated financial statements (as an equity method investment in real estate), had a carrying value of $33.4 million and $44.2 million as of December 31, 2021 and 2020, respectively (Note 7).
Loans to Affiliates
From time to time, our Boardboard of directors (our “Board”) has approved the making of secured and unsecured loans or lines of credit from us to certain of the Managed Programs, at our sole discretion, generally for the purpose of facilitating acquisitions or for working capital purposes.
The principal outstanding balance on our line of credit to CPA:18 – Global was $21.1 million as of December 31, 2020. In July 2022, CPA:18 – Global repaid the $16.0 million principal outstanding in full during the year ended December 31, 2021. In the fourth quarter of 2021, the maturity date of thisbalance on its line of credit was extended from March 31, 2022 to March 31, 2023. In January 2022, we loaned $13.0 million toin full. The loan agreement with CPA:18 – Global.
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| W. P. Carey 2021 10-K– 73
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Notes to Consolidated Financial Statements
CPA:17 Merger
On October 31, 2018, Corporate Property Associates 17 – Global Incorporated (“was terminated upon completion of the CPA:17 – Global”), a former affiliate, merged18 Merger on August 1, 2022. No such line of credit with and into one of our wholly owned subsidiaries (the “CPA:17 Merger”), which we accounted for as a business combination under the acquisition method of accounting. The purchase price was allocated to the assets acquired and liabilities assumed, based upon their preliminary fair values at October 31, 2018. We identified certain measurement period adjustmentsCESH existed during the third quarter of 2019 that impacted the provisional accounting (resulting in a $15.8 million increase in Goodwill (Note 6)). As a result, during 2019, we recorded a loss on change in control of interests of $8.4 million on the purchase of the remaining interest in a real estate investment from CPA:17 – Global in the CPA:17 Merger (Note 5).reporting period.
Other
At December 31, 2021,2023, we owned interests in 10eight jointly owned investments in real estate, (including our investment in shares of common stock of WLT, as described above), with the remaining interests held by affiliates or third parties. We consolidate four such investments and account for 9 suchthe remaining four investments under the equity method of accounting (Note 79) and consolidate the remaining investment.. In addition, we owned stock of CPA:18 – Global and limited partnership units of CESH at that date. We accounted for our investment in CPA:18 – Global under the equity method of accounting and elected to account for our investment in CESH under the fair value option (Note 79).
Note 4.6. Land, Buildings and Improvements, and Assets Held for Sale
Land, Buildings and Improvements — Operating LeasesNet Lease and Other
Land and buildings leased to others, which are subject to operating leases, and real estate under construction, are summarized as follows (in thousands):
| | December 31, |
| 2021 | | 2020 |
| December 31, | | | December 31, |
| 2023 | | | 2023 | | 2022 |
| Land | Land | $ | 2,151,327 | | | $ | 2,012,688 | |
| Buildings and improvements | Buildings and improvements | 9,525,858 | | | 8,724,064 | |
| Real estate under construction | Real estate under construction | 114,549 | | | 119,391 | |
| Less: Accumulated depreciation | Less: Accumulated depreciation | (1,448,020) | | | (1,206,912) | |
| $ | 10,343,714 | | | $ | 9,649,231 | |
| $ | |
During 2021,2023, the U.S. dollar strengthenedweakened against the euro, as the end-of-period rate for the U.S. dollar in relation to the euro decreasedincreased by 7.7%3.6% to $1.1326$1.1050 from $1.2271.$1.0666. As a result of this fluctuation in foreign currency exchange rates, the carrying value of our Land, buildings and improvements subject to operating leases decreased— net lease and other increased by $244.1$129.9 million from December 31, 20202022 to December 31, 2021.2023.
See Note 3 for a description of land, buildings and improvements derecognized in connection with the Spin-Off.
See Note 7 for a description of land, buildings and improvements reclassified to net investments in sales-type leases during the year ended December 31, 2023.
On January 31, 2023, the master lease expired on certain hotel properties previously classified as net-lease properties, which converted to operating properties. As a result, in February 2023, we reclassified 12 consolidated hotel properties with an aggregate carrying value of $164.6 million from Land, buildings and improvements — net lease and other to Land, buildings and improvements — operating properties. Effective as of that time, we began recognizing operating property revenues and expenses from these properties, whereas previously we recognized lease revenues from these properties.
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| W. P. Carey 2023 10-K– 79 |
Notes to Consolidated Financial Statements
In connection with changes in lease classifications due to extensions of the underlying leases, we reclassified 7five properties with an aggregate carrying value of $76.9$25.4 million from Net investments in direct financingfinance leases and loans receivable to Land, buildings and improvements subject to operating leases— net lease and other during 20212023 (Note 57).
As discussed in Note 4, we acquired 39 consolidated properties subject to existing operating leases in the CPA:18 Merger, which increased the carrying value of our Land, buildings and improvements — net lease and other by $881.6 million during the year ended December 31, 2022.
Depreciation expense, including the effect of foreign currency translation, on our buildings and improvements subject to operating leases was $286.4$325.8 million, $258.9$299.4 million, and $229.0$286.4 million for the years ended December 31, 2021, 2020,2023, 2022, and 2019,2021, respectively.
During 2021, we determined that the tenant/seller in the January 2020 acquisition of an industrial facility in Aurora, Oregon, would not be able to secure an easement on the property. As a result, the tenant/seller forfeited $5.0 million of the initial purchase price that we held back at the time of acquisition, the release of which was contingent on securing the easement. Since we previously accounted for this as a contingent liability and included the $5.0 million holdback within our capitalized real estate, we reduced the carrying value of Land, buildings and improvements subject to operating leases by this amount during 2021 and removed the corresponding liability from Accounts payable, accrued expenses and other liabilities on our consolidated balance sheets.
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| W. P. Carey 2021 10-K– 74
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Notes to Consolidated Financial Statements
Acquisitions of Real Estate During 20212023
During 2021,2023, we entered into the following investments, which were deemed to be real estate asset acquisitions (dollars in thousands):
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| Property Location(s) | | Number of Properties | | Date of Acquisition | | Property Type | | Total Capitalized Costs (a) |
| Grove City, Ohio, and Anderson, South Carolina | | 2 | | 2/2/2021 | | Warehouse | | $ | 19,129 | |
Various, New Jersey and Pennsylvania (b) | | 10 | | 2/11/2021 | | Retail; Office | | 55,115 | |
Central Valley, California (c) | | 4 | | 2/11/2021 | | Warehouse; Land | | 75,008 | |
Various, France (d) (e) | | 3 | | 4/1/2021 | | Retail | | 119,341 | |
| Searcy, Arkansas | | 1 | | 4/14/2021 | | Industrial | | 14,038 | |
| Detroit, Michigan | | 1 | | 4/27/2021 | | Warehouse | | 52,810 | |
Solihull, United Kingdom (d) (e) | | 1 | | 5/4/2021 | | Warehouse | | 194,954 | |
| New Rochelle, New York | | 1 | | 5/5/2021 | | Student Housing (Net Lease) | | 26,109 | |
| Groveport, Ohio | | 1 | | 5/5/2021 | | Industrial | | 27,133 | |
| Dakota, Illinois | | 1 | | 5/12/2021 | | Industrial | | 65,043 | |
| San Jose, California | | 1 | | 5/13/2021 | | Industrial | | 51,949 | |
| Opelika, Alabama | | 1 | | 6/7/2021 | | Warehouse | | 48,897 | |
| Niles and Elk Grove Village, Illinois; and Guelph, Canada | | 3 | | 6/9/2021 | | Warehouse | | 42,829 | |
| Rome, New York | | 1 | | 6/10/2021 | | Warehouse | | 44,781 | |
| St. Louis, Missouri | | 1 | | 8/2/2021 | | Office | | 7,924 | |
| Frankfort, Indiana | | 1 | | 8/26/2021 | | Warehouse | | 113,544 | |
Various, United States (f) | | 6 | | 9/1/2021 | | Land | | 17,396 | |
| Rogers, Minnesota | | 1 | | 9/9/2021 | | Warehouse | | 26,531 | |
| Chattanooga, Tennessee | | 2 | | 10/19/2021 | | Industrial | | 40,728 | |
| Mankato, Minnesota | | 1 | | 11/12/2021 | | Warehouse | | 17,665 | |
Various, Denmark (e) | | 11 | | 12/7/2021 | | Retail | | 46,129 | |
| Lawrence, Kansas | | 1 | | 12/9/2021 | | Industrial | | 25,728 | |
Various, Poland (d) (e) | | 7 | | 12/15/2021 | | Retail | | 74,345 | |
| Cary, Illinois | | 1 | | 12/28/2021 | | Industrial | | 44,399 | |
Various, Netherlands (e) | | 5 | | 12/29/2021 | | Retail | | 51,636 | |
Various, New Jersey and Pennsylvania (g) | | 5 | | Various | | Outdoor Advertising | | 3,989 | |
| | 73 | | | | | | $ | 1,307,150 | |
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| Property Location(s) | | Number of Properties | | Date of Acquisition | | Property Type | | Total Capitalized Costs (a) |
| Various, United States | | 6 | | 1/12/2023 | | Industrial | | $ | 64,861 | |
Various, Italy (5 properties) and Spain (3 properties) (a) | | 8 | | 3/23/2023 | | Industrial | | 79,218 | |
| Various, Canada | | 11 | | 4/1/2023 | | Industrial, Warehouse | | 467,811 | |
Various, United States (4 properties), Canada (3 properties), and Mexico (2 properties) (b) | | 9 | | 4/18/2023 | | Industrial | | 97,952 | |
| Various, United States | | 9 | | 5/5/2023; 5/26/2023 | | Retail (Car Wash) | | 39,713 | |
| Various, United States | | 4 | | 6/15/2023 | | Education (Medical School) | | 139,092 | |
| Dothan, Alabama and Queensbury, New York | | 2 | | 10/24/2023; 10/26/2023 | | Retail (Car Wash) | | 8,658 | |
Various, United States (c) | | 7 | | 11/17/2023 | | Retail (Car Wash) | | 35,577 | |
Various, Italy (7 properties), Spain (3 properties), and Germany (1 property) (a) | | 11 | | 11/29/2023 | | Industrial, Warehouse | | 157,095 | |
| Houston, Texas | | 1 | | 12/5/2023 | | Warehouse | | 61,610 | |
| San Diego, California | | 2 | | 12/11/2023 | | Industrial, Research & Development | | 13,324 | |
| Phoenix, Arizona | | 1 | | 12/22/2023 | | Retail | | 13,791 | |
| | 71 | | | | | | $ | 1,178,702 | |
__________
(a)This table excludes the sale-leasebacks classified as loans receivable completed during 2021 (Note 5). (b)This acquisition is comprised of 7 retail facilities and 3 office facilities.
(c)This acquisition is comprised of 2 warehouse facilities and 2 parcels of land.
(d)We also recorded estimated deferred tax liabilities of (i) $8.8 million on the investment in France, (ii) $3.6 million on the investment in the United Kingdom, and (iii) $0.7 million on the investment in Poland, with corresponding increases to the asset values, due to temporary tax and GAAP differences established in connection with the acquisitions.
(e)Amount reflects the applicable exchange rate on the date of transaction.
(f)(b)This acquisition is compromised of the land under buildingsAmount includes $3.1 million for an expansion at a property leased to this tenant that we already own.
(g)(c)We also entered into ana purchase agreement to fund loans for certain outdoor advertising infrastructure. At the end of the loan term, we will acquire the properties. In accordance with ASC 810, Consolidation, we determined that these loans wouldfour additional retail (car wash) facilities leased to this tenant totaling $20.3 million, which is expected to be consolidated.
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| W. P. Carey 20212023 10-K – 7580 |
Notes to Consolidated Financial Statements
The aggregate purchase price allocation for investments disclosed above is as follows (dollars in thousands):
| | | | | |
| Total Capitalized Costs |
| Land | $ | 190,968212,594 | |
| Buildings and improvements | 946,908774,131 | |
Intangibles:Intangible assets: | |
In-place lease (weighted-average expected life of 20.721.2 years) | 198,869185,878 | |
Below-market rent (weighted-average expected life of 11.1 years) | (9,995) | |
| Right-of-use assets: | |
LandFinance lease right-of-use assets(a)
| 12,981 | | 5,979 |
Above-market ground lease intangibles, net | (4,155) | |
| Prepaid rent liabilities | (15,445)(6,882) | |
| Operating lease liabilities(5,979) | |
| $ | 1,307,1501,178,702 | |
Acquisitions of Real Estate During 2020 —(a) We entered into 14 investments, which were deemedRepresents consideration paid to acquire a leasehold interest in land, buildings and improvements. The lease was determined to be real estate asset acquisitions, at a total cost of $661.4 million, includingfinance lease due to our intention to acquire the land, of $105.4 million, buildings of $449.4 million, and netimprovements upon lease intangibles of $106.6 million.expiration. These assets are included in In-place lease intangible assets and other in the consolidated balance sheets.
Acquisitions of Real Estate During 20192022 — — We entered into 23 investments, which were deemed to be real estate asset acquisitions, at a total cost of $737.5 million,$1.2 billion, including land of $86.3$145.1 million, buildings of $523.3$853.0 million, in-place lease intangibles of $152.9 million, below-market rent intangibles of $7.0 million, and ROU assets of $12.3 million. These investments exclude properties acquired in the CPA:18 Merger (Note 4).
Acquisitions of Real Estate During 2021 — We entered into 28 investments, which were deemed to be real estate asset acquisitions, at a total cost of $1.3 billion, including land of $191.0 million, buildings of $946.9 million, net lease intangibles of $134.9$188.9 million, aland lease ROU assets of $6.0 million, above-market ground lease intangibles, net, of $4.2 million (included within ROU assets), prepaid rent liabilityliabilities of $6.1$15.4 million, a debt premiumand operating lease liabilities of $0.8 million (related to the non-recourse mortgage loan assumed in connection with an acquisition), and net other liabilities assumed of $0.1$6.0 million.
Dollar amounts are based on the exchange rates of the foreign currencies on the dates of activity, as applicable.
Real Estate Under Construction — Net Lease and Operating Properties
During 2021,2023, we capitalized real estate under construction totaling $83.3$92.5 million. The number of construction projects in progress with balances included in real estate under construction was 611 and 5eight as of December 31, 20212023 and 2020,2022, respectively. Aggregate unfunded commitments totaled approximately $55.3$71.8 million and $81.8$61.1 million as of December 31, 20212023 and 2020,2022, respectively.
During 2021,2023, we completed the following construction projects (dollars in thousands):
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| Property Location(s) | | Primary Transaction Type | | Number of Properties | | Date of Completion | | Property Type | | Total Capitalized Costs (a) |
| Mason, Ohio | | Expansion | | 1 | | 1/15/2021 | | Office | | $ | 2,428 | |
Langen, Germany (a) | | Build-to-Suit | | 1 | | 2/4/2021 | | Industrial | | 52,719 | |
San Donato Milanese, Italy (a) | | Renovation | | 1 | | 6/30/2021 | | Retail; Office | | 7,244 | |
| Whitehall, Pennsylvania | | Redevelopment | | 1 | | 8/18/2021 | | Warehouse | | 25,769 | |
| | | | 4 | | | | | | $ | 88,160 | |
__________
(a)Amount reflects the applicable exchange rate on the date of transaction. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Property Location(s) | | Primary Transaction Type | | Number of Properties | | Date of Completion | | Property Type | | Total Capitalized Costs (a) |
| Evansville, Indiana and Lawrence, Kansas | | Renovation | | 2 | | 3/23/2023 | | Industrial | | $ | 20,637 | |
| Pleasanton, California | | Redevelopment | | 1 | | 8/21/2023 | | Laboratory | | 13,905 | |
| Chattanooga, Tennessee | | Expansion | | 1 | | 11/20/2023 | | Warehouse | | 26,128 | |
| | | | 4 | | | | | | $ | 60,670 | |
During 2020,2022, we completed 5six construction projects, at a total cost of $171.2$148.1 million.
During 2019,2021, we completed 7four construction projects, at a total cost of $122.5$88.2 million.
During 2021,2023, we committed to fund 6 build-to-suitfour redevelopment or expansion projects, totaling $63.5 million (based on the exchange ratefor an aggregate amount of the euro at December 31, 2021, as applicable).$84.1 million. We currently expect to complete the projects in 20222024 and 2023.2025.
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| W. P. Carey 2021 10-K– 76
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Notes to Consolidated Financial Statements
Capitalized interest incurred during construction was $2.5$0.6 million, $2.9$1.3 million, and $2.5 million for the years ended December 31, 2021, 2020,2023, 2022, and 20192021 respectively, which reduces Interest expense in the consolidated statements of income.
Dollar amounts are based on the exchange rates of the foreign currencies on the dates of activity, as applicable. | | | | | |
| W. P. Carey 2023 10-K– 81 |
Notes to Consolidated Financial Statements
Dispositions of Properties
During 2021,2023, we sold 1620 properties, which were classified as Land, buildings and improvements subject to operating leases.— net lease and other. As a result, the carrying value of our Land, buildings and improvements subject to operating leases— net lease and other decreased by $62.6$197.5 million from December 31, 20202022 to December 31, 2021.2023 (Note 17).
Lease TerminationOther Lease-Related Income and Other
20212023 — For the year ended December 31, 2021,2023, Other lease-related income on our consolidated statements of income included: (i) lease termination income totaling $11.9 million received from two tenants in connection with the sales of the properties they occupied and (ii) otherlease-related settlements totaling $9.1 million.
2022 — For the year ended December 31, 2022, Other lease-related income on our consolidated statements of income included: (i) other lease-related settlements totaling $17.6 million; (ii) lease termination income totaling $12.4 million received from two tenants; and (iii) income from a parking garage attached to one of our net-leased properties totaling $1.6 million.
2021 — For the year ended December 31, 2021, Other lease-related income on our consolidated statements of income included: (i) lease termination income of $41.0 million received from a tenant; (ii) other lease-related settlements totaling $9.8 million;million; and (iii) income from a parking garage attached to one of our net-leased properties totaling $1.9$1.9 million.
2020 — For the year ended December 31, 2020, lease termination income and other on our consolidated statements of income included: (i) lease-related settlements totaling $7.9 million and (ii) income from a parking garage attached to one of our net-leased properties totaling $2.3 million.
2019 — For the year ended December 31, 2019, lease termination income and other on our consolidated statements of income included: (i) lease-related settlements totaling $24.1 million and (ii) income from a parking garage attached to one of our net-leased properties totaling $3.5 million (Note 5).
Leases
Operating Lease Income
Lease income related to operating leases recognized and included in the consolidated statements of income is as follows (in thousands):
| | Years Ended December 31, |
| 2021 | | 2020 | | 2019 |
| Years Ended December 31, | | | Years Ended December 31, |
| 2023 | | | 2023 | | 2022 | | 2021 |
| Lease income — fixed | Lease income — fixed | $ | 1,066,250 | | | $ | 981,430 | | | $ | 898,111 | |
Lease income — variable (a) | Lease income — variable (a) | 111,188 | | | 99,193 | | | 89,873 | |
| Total operating lease income | Total operating lease income | $ | 1,177,438 | | | $ | 1,080,623 | | | $ | 987,984 | |
__________
(a)Includes (i) rent increases based on changes in the CPI and other comparable indices and (ii) reimbursements for property taxes, insurance, and common area maintenance services.
Scheduled Future Lease Payments to be Received
Scheduled future lease payments to be received (exclusive of expenses paid by tenants, percentage of sales rents, and future CPI-based adjustments) under non-cancelable operating leases at December 31, 20212023 are as follows (in thousands):
| | Years Ending December 31, | Years Ending December 31, | | Total | Years Ending December 31, | | Total |
| 2022 | | $ | 1,140,093 | |
| 2023 | | 1,116,058 | |
| 2024 | 2024 | | 1,058,713 | |
| 2025 | 2025 | | 997,909 | |
| 2026 | 2026 | | 946,077 | |
| 2027 | |
| 2028 | |
| Thereafter | Thereafter | | 8,154,484 | |
| Total | Total | | $ | 13,413,334 | |
| | | | | |
| W. P. Carey 2021 10-K– 77
|
Notes to Consolidated Financial Statements
See Note 56 for scheduled future lease payments to be received under non-cancelable direct financing leases and sales-type leases.
| | | | | |
| W. P. Carey 2023 10-K– 82 |
Notes to Consolidated Financial Statements
Lease Cost
Lease costs for operating leases are included in (i) General and administrative expenses (office leases), (ii) Property expenses, excluding reimbursable tenant costs (land leases), and (iii) Reimbursable tenant costs (land leases) in the consolidated statements of income. Certain information related to the total lease cost for operating leases is as follows (in thousands):
| | Years Ended December 31, |
| 2021 | | 2020 | | 2019 |
| Years Ended December 31, | | | Years Ended December 31, |
| 2023 | | | 2023 | | 2022 | | 2021 |
| Fixed lease cost | Fixed lease cost | $ | 16,426 | | | $ | 17,616 | | | $ | 14,503 | |
| Variable lease cost | Variable lease cost | 1,149 | | | 1,089 | | | 1,186 | |
| Total lease cost | Total lease cost | $ | 17,575 | | | $ | 18,705 | | | $ | 15,689 | |
During the years ended December 31, 2021, 2020,2023, 2022, and 2019,2021, we received sublease income totaling approximately $5.1$4.9 million, $5.5$4.6 million, and $5.4$5.1 million, respectively, which is included in Lease revenues in the consolidated statements of income.
Other Information
Supplemental balance sheet information related to ROU assets and lease liabilities is as follows (dollars in thousands):
| | | | | | | | | | | | | | | | | |
| | | December 31, |
| Location on Consolidated Balance Sheets | | 2021 | | 2020 |
| Operating ROU assets — land leases | In-place lease intangible assets and other | | $ | 106,095 | | | $ | 119,590 | |
| Operating ROU assets — office leases | Other assets, net | | 59,902 | | | 61,137 | |
| Total operating ROU assets | | | $ | 165,997 | | | $ | 180,727 | |
| | | | | |
| Operating lease liabilities | Accounts payable, accrued expenses and other liabilities | | $ | 146,437 | | | $ | 151,466 | |
| | | | | |
| Weighted-average remaining lease term — operating leases | | | 26.1 years | | 29.2 years |
| Weighted-average discount rate — operating leases | | | 6.8 | % | | 7.1 | % |
| Number of land lease arrangements | | | 66 | | 68 |
Number of office space arrangements (a) | | | 4 | | 7 |
| Lease term range (excluding extension options not reasonably certain of being exercised) | | <1 – 100 years | | <1 – 100 years |
__________
(a)The leases for our former office spaces in New York expired on January 31, 2021. | | | | | | | | | | | | | | | | | |
| | | December 31, |
| Location on Consolidated Balance Sheets | | 2023 | | 2022 |
| Operating ROU assets — land leases | In-place lease intangible assets and other | | $ | 114,080 | | | $ | 123,834 | |
| Finance ROU assets — land and building leases | In-place lease intangible assets and other | | 26,034 | | | 12,598 | |
| Operating ROU assets — office leases | Other assets, net | | 54,730 | | | 56,674 | |
| Total operating ROU assets | | | $ | 194,844 | | | $ | 193,106 | |
| | | | | |
| Operating lease liabilities | Accounts payable, accrued expenses and other liabilities | | $ | 138,733 | | | $ | 146,302 | |
| | | | | |
| Weighted-average remaining lease term — operating leases | | 23.8 years | | 25.8 years |
| Weighted-average discount rate — operating leases | | | 6.6 | % | | 6.8 | % |
| Number of land lease arrangements — operating leases | | 66 | | 72 |
| Number of land and building lease arrangements — finance leases | | 2 | | 1 |
| Number of office space arrangements | | | 4 | | 4 |
| Lease term range (excluding extension options not reasonably certain of being exercised) | | <1 – 98 years | | <1 – 99 years |
Cash paid for operating lease liabilities included in Net cash provided by operating activities totaled $13.9$16.1 million, $15.5$15.8 million, and $14.6$13.9 million for the years ended December 31, 2023, 2022, and 2021, 2020,respectively.
During the year ended December 31, 2023, we acquired a leasehold interest in land, buildings and 2019, respectively. There are noimprovements for $13.0 million, which is included in Net cash used in investing activities on the consolidated statements of cash flows. The lease was determined to be a finance lease due to our intention to acquire the land, or office direct financing leasesbuildings and improvements upon lease expiration in 20 years. During the year ended December 31, 2023, we recognized $0.2 million of rent expense for this finance lease, which is included in Depreciation and amortization on our consolidated statements of income.
We assumed seven land lease arrangements in the CPA:18 Merger, for which we are the lessee, therefore there are no relatedlessee. As a result, we capitalized (i) ROU assets ortotaling $24.5 million (comprised of below-market ground lease liabilities.intangibles totaling $17.9 million and land lease ROU assets totaling $6.6 million), which are included within In-place lease intangible assets and other on our consolidated balance sheets, and (ii) operating lease liabilities totaling $6.6 million, which are included within Accounts payable, accrued expenses and other liabilities on our consolidated balance sheets.
| | | | | |
| W. P. Carey 20212023 10-K – 7883 |
Notes to Consolidated Financial Statements
Undiscounted Cash Flows
A reconciliation of the undiscounted cash flows for operating leases recorded on the consolidated balance sheet within Accounts payable, accrued expenses and other liabilities as of December 31, 20212023 is as follows (in thousands):
| | Years Ending December 31, | Years Ending December 31, | | Total | Years Ending December 31, | | Total |
| 2022 | | $ | 14,230 | |
| 2023 | | 14,246 | |
| 2024 | 2024 | | 13,137 | |
| 2025 | 2025 | | 13,092 | |
| 2026 | 2026 | | 13,034 | |
| 2027 | |
| 2028 | |
| Thereafter | Thereafter | | 275,259 | |
| Total lease payments | Total lease payments | | 342,998 | |
| Less: amount of lease payments representing interest | Less: amount of lease payments representing interest | | (196,561) | |
| Present value of future lease payments/lease obligations | Present value of future lease payments/lease obligations | | $ | 146,437 | |
Land, Buildings and Improvements — Operating Properties
At both December 31, 2021 and 2020,2023, Land, buildings and improvements attributable to— operating properties consisted of our investments in 1080 consolidated self-storage properties, five consolidated hotels, and 1two consolidated student housing properties. At December 31, 2022, Land, buildings and improvements — operating properties consisted of our investments in 75 consolidated self-storage properties, two consolidated student housing properties, and one consolidated hotel. Below is a summary of our Land, buildings and improvements attributable to— operating properties (in thousands):
| | December 31, |
| 2021 | | 2020 |
| December 31, | | | December 31, |
| 2023 | | | 2023 | | 2022 |
| Land | Land | $ | 10,452 | | | $ | 10,452 | |
| Buildings and improvements | Buildings and improvements | 73,221 | | | 73,024 | |
| Real estate under construction | |
| Less: Accumulated depreciation | Less: Accumulated depreciation | (16,750) | | | (14,004) | |
| $ | 66,923 | | | $ | 69,472 | |
| $ | |
As described above under Land, Buildings and Improvements — Net Lease and Other, on January 31, 2023, the master lease expired on certain hotel properties previously classified as net-lease properties, which converted to operating properties. As a result, in February 2023, we reclassified 12 consolidated hotel properties with an aggregate carrying value of $164.6 million from Land, buildings and improvements — net lease and other to Land, buildings and improvements — operating properties. We sold eight of these hotel properties during the third and fourth quarters of 2023. As a result of these dispositions, the carrying value of our Land, buildings and improvements — operating properties decreased by $89.7 million from December 31, 2022 to December 31, 2023 (Note 17).
During the year ended December 31, 2023, the U.S. dollar weakened against the British pound sterling, resulting in an increase of $5.1 million in the carrying value of our Land, buildings and improvements — operating properties from December 31, 2022 to December 31, 2023.
During the year ended December 31, 2023, we completed a student housing development project and reclassified $25.5 million from real estate under construction to buildings and improvements attributable to operating properties.
Depreciation expense, including the effect of foreign currency translation, on our buildings and improvements attributable to operating properties was $2.7$29.8 million, $2.8$11.6 million, and $6.9$2.7 million for the years ended December 31, 2023, 2022, and 2021, 2020, and 2019, respectively.
| | | | | |
| W. P. Carey 2023 10-K– 84 |
Notes to Consolidated Financial Statements
During the year ended December 31, 2023, we entered into the following self-storage operating property investments, which were deemed to be real estate asset acquisitions (dollars in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Property Location(s) | | Number of Properties | | Date of Acquisition | | Property Type | | Total Capitalized Costs |
Little Rock, Arkansas (a) | | 1 | | 6/22/2023 | | Self-Storage | | $ | 6,166 | |
| Houston, Texas | | 1 | | 8/25/2023 | | Self-Storage | | 13,120 |
| Knoxville and Springfield, Tennessee | | 2 | | 12/8/2023 | | Self-Storage | | 15,580 |
| Bastrop, Texas | | 1 | | 12/15/2023 | | Self-Storage | | 12,443 |
| | 5 | | | | | | $ | 47,309 | |
__________
(a)We also committed to fund $3.6 million for an expansion at this facility, which is expected to be completed in the first quarter of 2024.
The aggregate purchase price allocation for investments disclosed above is as follows (dollars in thousands):
| | | | | |
| Total Capitalized Costs |
| Land | $ | 13,547 | |
| Buildings and improvements | 31,923 | |
| Intangible assets: | |
| In-place lease (weighted-average expected life of 0.5 years) | 1,839 | |
| $ | 47,309 | |
For the year ended December 31, 2023, Land, buildings and improvements — operating properties revenues totaling $180.3 million were comprised of $164.5 million in lease revenues and $15.8 million in other income (such as food and beverage revenue) from 80 consolidated self-storage properties, 13 consolidated hotels, and two consolidated student housing properties. For the year ended December 31, 2022, Land, buildings and improvements — operating properties revenues totaling $59.2 million were comprised of $54.4 million in lease revenues and $4.8 million in other income (such as food and beverage revenue) from 75 consolidated self-storage, two consolidated student housing properties and one consolidated hotel. For the year ended December 31, 2021, Operating propertyLand, buildings and improvements — operating properties revenues totaling $13.5 million were comprised of $11.2 million in lease revenues and $2.3 million in other income (such as food and beverage revenue) from 10ten consolidated self-storage properties and 1one consolidated hotel. For the year ended December 31, 2020, Operating property revenues totaling $11.4 million were comprised of $9.5 million in lease revenues and $1.9 million in other income from 10 consolidated self-storage properties and 2 consolidated hotels. For the year ended December 31, 2019, Operating property revenues totaling $50.2 million were comprised of $39.5 million in lease revenues and $10.7 million in other income from 37 consolidated self-storage properties and 2 consolidated hotels. We derive self-storage revenue primarily from rents received from customers who rent storage space under month-to-month leases for personal or business use. We derive hotel revenue primarily from room rentals, as well as food, beverage, and other services. We earn student housing operating revenue primarily from leases of one year or less with individual students.
| | | | | |
| W. P. Carey 2021 10-K– 79
|
Notes to Consolidated Financial Statements
Assets Held for Sale, Net
Below is a summary of our properties held for sale (in thousands):
| | December 31, | | | December 31, |
| 2023 | | | 2023 | | 2022 |
| Land, buildings and improvements — net lease and other | |
| | December 31, |
| 2021 | | 2020 |
| Land, buildings and improvements | $ | 10,628 | | | $ | 14,051 | |
| In-place lease intangible assets and other | |
| In-place lease intangible assets and other | |
| In-place lease intangible assets and other | In-place lease intangible assets and other | — | | | 12,754 | |
| Above-market rent intangible assets | Above-market rent intangible assets | — | | | 518 | |
| Accumulated depreciation and amortization | Accumulated depreciation and amortization | (2,359) | | | (8,733) | |
| Assets held for sale, net | Assets held for sale, net | $ | 8,269 | | | $ | 18,590 | |
At December 31, 2021,2023, we had 2two properties classified as Assets held for sale, net, with an aggregate carrying value of $8.3$37.1 million. TheseWe sold both of these properties were sold in January and February 20222024 for gross proceeds of $36.6 million (Note 1719). At December 31, 20202022, we had 4three properties classified as Assets held for sale, net, with an aggregatedaggregate carrying value of $18.6$57.9 million. These properties were sold in 2021.2023.
| | | | | |
| W. P. Carey 2023 10-K– 85 |
Notes to Consolidated Financial Statements
Note 5.7. Finance Receivables
Assets representing rights to receive money on demand or at fixed or determinable dates are referred to as finance receivables. Our finance receivables portfolio consists of our Net investments in direct financingfinance leases and loans receivable (net of allowance for credit losses), and deferred acquisition fees.. Operating leases are not included in finance receivables. See Note 2 and Note 46 for information on ROU operating lease assets recognized in our consolidated balance sheets.
Finance Receivables
InvestmentsNet investments in direct financingfinance leases and loans receivable are summarized as follows (in thousands):
| | Maturity Date | | December 31, |
| 2021 | | 2020 |
| Maturity Date | | | Maturity Date | | December 31, |
| | 2023 | | | | 2023 | | 2022 |
Net investments in sales-type leases (a) | |
Net investments in direct financing leases (a)(b) | Net investments in direct financing leases (a)(b) | N/A | | $ | 572,205 | | | $ | 711,974 | |
Sale-leaseback transactions accounted for as loans receivable (b)(c) | Sale-leaseback transactions accounted for as loans receivable (b)(c) | 2038 - 2052 | | 217,229 | | | — | |
Secured loans receivable (a)(d) | Secured loans receivable (a)(d) | 2022 - 2025 | | 24,143 | | | 24,143 | |
| $ | 813,577 | | | $ | 736,117 | |
| | | $ | |
__________
(a)These investments are assessed for credit loss allowances but no such allowances were recorded as of December 31, 2023 or 2022.
(b)Amounts are net of allowance for credit losses, as disclosed below.below under Net Investments in Direct Financing Leases.
(b)(c)These investments are accounted for as loans receivable in accordance with ASC 310, Receivables and ASC 842, Leases. Such investments were completed during the year ended December 31, 2021 and are described in the table below under Loans Receivable. Maturity dates reflect the current lease maturity dates. Amounts are net of allowance for credit losses of $0.8 million as of December 31, 2023. No such allowance was recorded as of December 31, 2022.
(d)Amounts are net of allowance for credit losses of $2.1 million as of both December 31, 2023 and 2022.
During the year ended December 31, 2023, the U.S. dollar weakened against the euro, resulting in a $27.7 million increase in the carrying value of Net investments in finance leases and loans receivable from December 31, 2022 to December 31, 2023.
Net Investments in Direct Financing Leases
Net investments in direct financing leases is summarized as follows (in thousands):
| | December 31, |
| 2021 | | 2020 |
| December 31, | | | December 31, |
| 2023 | | | 2023 | | 2022 |
| Lease payments receivable | Lease payments receivable | $ | 414,002 | | | $ | 527,691 | |
| Unguaranteed residual value | Unguaranteed residual value | 545,896 | | | 677,722 | |
| 959,898 | | | 1,205,413 | |
| 719,746 | |
| Less: unearned income | Less: unearned income | (370,353) | | | (476,365) | |
Less: allowance for credit losses (a) | Less: allowance for credit losses (a) | (17,340) | | | (17,074) | |
| $ | 572,205 | | | $ | 711,974 | |
| $ | |
__________
| | | | | |
| W. P. Carey 2021 10-K– 80
|
Notes to Consolidated Financial Statements
(a)During the years ended December 31, 20212023 and 2020,2022, we recorded a net allowance for credit losses of $0.3$28.2 million and $9.7a net release of allowance for credit losses of $3.9 million, respectively, on our net investments in direct financing leases due to (i) the declining financial position of one of our top ten tenants during the year ended December 31, 2023 and (ii) changes in expected economic conditions,credit quality for certain other tenants, which was included within Other gains and (losses) in our consolidated statements of income.
20212023 — Income from direct financing leases, which is included in Income from finance leases and loans receivable in the consolidated financial statements, was $49.9 million for the year ended December 31, 2023.
During the year ended December 31, 2023, we reclassified five properties with a carrying value of $25.4 million from Net investments in finance leases and loans receivable to Real estate in connection with changes in lease classifications due to extensions of the underlying leases (Note 6). | | | | | |
| W. P. Carey 2023 10-K– 86 |
Notes to Consolidated Financial Statements
2022 — Income from direct financing leases, which is included in Income from finance leases and loans receivable in the consolidated financial statements, was $53.0 million for the year ended December 31, 2022.
As discussed in Note 4, we acquired one consolidated property subject to a direct financing lease in the CPA:18 Merger, which increased the carrying value of our Net investments in finance leases and loans receivable by $10.5 million during the year ended December 31, 2022.
2021 — Income from direct financing leases, which was included in Income from finance leases and loans receivable in the consolidated financial statements, was $63.2 million for the year ended December 31, 2021. During
Net Investments in Sales-Type Leases
On February 28, 2023, the tenant occupying our portfolio of 78 net-lease self-storage properties located in the United States provided notice of its intention to exercise its option to repurchase the properties. The purchase price will be calculated using the U.S. CPI as of the closing date. In accordance with ASC 842, Leases, we reclassified these net-lease assets to net investments in sales-type leases totaling $451.4 million on our consolidated balance sheets (based on the present value of remaining rents and estimated purchase price, using the CPI rates as of the exercise notice date), since the tenant provided notice of its intention to exercise its purchase option. In connection with this transaction, we reclassified the following amounts to Net investments in finance leases and loans receivable: (i) $393.7 million from Land, buildings and improvements — net lease and other, (ii) $36.6 million from In-place lease intangible assets and other, (iii) $22.4 million from Above-market rent intangible assets, (iv) $18.5 million from Below-market rent and other intangible liabilities, net, and (v) $159.0 million from Accumulated depreciation and amortization. We recognized an aggregate Gain on sale of real estate, net, of $176.2 million during the year ended December 31, 2021,2023 related to this transaction. We sold a portion of this portfolio in February 2024 (Note 19).
On October 16, 2023, the tenant occupying an industrial/office facility located in Nagold, Germany, provided notice of its intention to exercise its option to repurchase the property. In accordance with ASC 842, Leases, we sold 4 properties accounted for asreclassified this net-lease asset to net investments in sales-type leases totaling $20.6 million on our consolidated balance sheets (based on the estimated purchase price and the foreign currency exchange rate of the euro on the date of notice), since the tenant provided notice of its intention to exercise its purchase option. In connection with this transaction, we reclassified $20.6 million from net investments in direct financing leases that hadto net investments in sales-type leases (both are included within Net investments in finance leases and loans receivable on our consolidated balance sheets). No gain or loss on sale of real estate was recognized related to this transaction.
On October 31, 2023, we entered into an agreement to sell our portfolio of 70 office properties located in Spain to the tenant occupying the properties. In accordance with ASC 842, Leases, we reclassified these net-lease assets to net investments in sales-type leases totaling $348.6 million on our consolidated balance sheets (based on the estimated purchase price and the foreign currency exchange rate of the euro on the agreement date), since this agreement resulted in a lease modification. In connection with this transaction, we reclassified the following amounts to Net investments in finance leases and loans receivable: (i) $269.0 million from Land, buildings and improvements — net lease and other, (ii) $57.4 million from In-place lease intangible assets and other, (iii) $21.7 million from Other assets, net, and (iv) $76.4 million from Accumulated depreciation and amortization. We recognized an aggregate Gain on sale of real estate, net, carrying value of $35.8 million. During$59.1 million during the year ended December 31, 2021, we reclassified 7 properties with a carrying value2023 related to this transaction, reflecting balances of $76.9$14.6 million from Net investmentswithin Deferred income taxes and $3.2 million within Accounts payable, accrued expenses and other liabilities for this investment. This investment was sold in direct financing leases and loans receivable to Land, buildings and improvements subject to operating leases in connection with changes in lease classifications due to extensions of the underlying leasesJanuary 2024 (Note 419). During the year ended December 31, 2021, the U.S. dollar strengthened against the euro, resulting in an $23.2 million decrease in the carrying value of Net investments in direct financing leases and loans receivable from December 31, 2020 to December 31, 2021.
2020 — IncomeEarnings from direct financingour net investments in sales-type leases which isare included in Income from direct financingfinance leases and loans receivable in the consolidated financial statements, was $73.9and totaled $38.1 million for the year ended December 31, 2020.
2019 — Income2023. Prior to this reclassification to net investments in sales-type leases, earnings from direct financing leases, which was includedthis investment were recognized in Income from direct financing leases and loans receivableLease revenues in the consolidated financial statements, was $98.4 million for the year ended December 31, 2019.statements.
| | | | | |
| W. P. Carey 2023 10-K– 87 |
During the third quarter of 2019, we identified measurement period adjustments that impacted the provisional accounting for an investment classified as net
Notes to Consolidated Financial Statements
Net investments in direct financingsales-type leases which was acquired in the CPA:17 Merger on October 31, 2018 (is summarized as follows (in thousands):
| | | | | | | | | | | |
| December 31, |
| 2023 | | 2022 |
Lease payments receivable (a) | $ | 849,881 | | | $ | — | |
| | | |
| 849,881 | | | — | |
| Less: unearned income | (14,147) | | | — | |
| | | |
| $ | 835,734 | | | $ | — | |
__________
(a)Note 3). Prior to the CPA:17 Merger, we already had a joint interest in this investment and accounted for it under the equity method (subsequent to the CPA:17 Merger, we consolidated this wholly owned investment). As such, the CPA:17 MergerIncludes estimated purchase price allocated to this investment decreased by approximately $21.0 million. In addition, we recorded a loss on change in control of interests of $8.4 million during the third quarter of 2019, reflecting adjustments to the difference between our carrying value and the preliminary estimated fair value of this former equity interest on October 31, 2018. We also recorded impairment charges totaling $25.8 million on this investment during the third quarter of 2019 (Note 8).total rents owed.
Scheduled Future Lease Payments to be Received
Scheduled future lease payments to be received (exclusive of expenses paid by tenants, percentage of sales rents, and future CPI-based adjustments) under non-cancelable direct financing leases and sales-type leases at December 31, 20212023 are as follows (in thousands):
| | Years Ending December 31, | Years Ending December 31, | | Total | Years Ending December 31, | | Total |
| 2022 | | $ | 57,056 | |
| 2023 | | 55,840 | |
| 2024 | | 52,535 | |
2024 (a) | |
| 2025 | 2025 | | 45,808 | |
| 2026 | 2026 | | 44,347 | |
| 2027 | |
| 2028 | |
| Thereafter | Thereafter | | 158,416 | |
| Total | Total | | $ | 414,002 | |
__________
(a)Includes $849.9 million for the net investments in sales-type leases described above, representing the estimated purchase prices of the investments plus remaining rents. One investment was sold in January 2024 for gross proceeds of approximately $359 million (Note 19).
See Note 46 for scheduled future lease payments to be received under non-cancelable operating leases.
| | | | | |
| W. P. Carey 20212023 10-K – 8188 |
Notes to Consolidated Financial Statements
Loans Receivable
In August 2023, one of our secured loans receivable was repaid to us for $28.0 million. In connection with this repayment, we received an $0.6 million prepayment penalty from the borrower, which was included in Income from finance leases and loans receivable in the consolidated financial statements for the year ended December 31, 2023. This secured loan receivable was initially acquired in the CPA:18 Merger (Note 4).
During the year ended December 31, 2023, we recorded an allowance for credit losses of $0.8 million on our sale-leaseback transactions accounted for as loans receivable due to changes in economic conditions.
In September 2022, one of our secured loans receivable was repaid to us for $34.0 million. In connection with this repayment, we recorded a release of allowance for credit losses of $10.5 million since the loan principal was fully repaid.
During the year ended December 31, 2022, we entered into one sale-leaseback, which was deemed to be a loan receivable, at a cost of $19.8 million
During the year ended December 31, 2021, we entered into the followingthree sale-leasebacks, which were deemed to be loans receivable, in accordance with ASC 310, Receivables and ASC 842, Leases (dollars in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Property Location(s) | | Number of Properties | | Date of Acquisition | | Property Type | | Total Investment |
| Various, Germany and Czech Republic | | 4 | | 12/20/2021 | | Industrial | | $ | 29,166 | |
| Various, Netherlands | | 9 | | 12/29/2021 | | Retail | | 43,731 | |
| Santa Rosa, California; Pocatello, Idaho; and White City, Oregon | | 3 | | 12/29/2021 | | Industrial | | 144,103 | |
| | 16 | | | | | | $ | 217,000 | |
Dollar amounts are based on the exchange rates of the foreign currencies on the dates of activity, as applicable.
At both December 31, 2021 and 2020, we had 2 secured loans receivable related to a domestic investment with an aggregate carrying value of $24.1 million (net of allowance for credit losses of $12.6 million), which are included in Net investments in direct financing leases and loans receivable in the consolidated financial statements. In the first quarter of 2021, we entered into an agreement with the borrowers, who agreed to pay us at maturity a total of $3.7 million of unpaid interest due over the previous year. We did not recognize this interest in the consolidated financial statements due to uncertainty of collectibility. Earnings from our loans receivable are included in Income from direct financingfinance leases and loans receivable in the consolidated financial statements, and totaled $4.3$19.1 million, $1.0$21.2 million, and $6.2$4.3 million for the years ended December 31, 2023, 2022, and 2021, 2020, and 2019, respectively. We did not recognize income from our secured loans receivable during the second, third, or fourth quarters of 2020, since such income was deemed uncollectible as a result of the COVID-19 pandemic (Note 2).
Credit Quality of Finance Receivables
We generally invest in facilities that we believe are critical to a tenant’s business and therefore have a lower risk of tenant default. During the year ended December 31, 2023, we reclassified certain assets to net investments in sales-type leases (which are considered finance receivables), as described above under Net Investments in Sales-Type Leases. At both December 31, 20212023 and 2020, other than uncollected income from our secured loans receivable (as noted above),2022, no material balances of our finance receivables were past due. Other than the lease extensions noted above under Net Investments in Direct Financing Leases above,, there were no material modifications of finance receivables during the year ended December 31, 2021.2023.
We evaluate the credit quality of our finance receivables utilizing an internal five-point credit rating scale, with one representing the highest credit quality and five representing the lowest. A credit quality of one through three indicates a range of investment grade to stable. A credit quality of four through five indicates a range of inclusion on the watch list to risk of default. The credit quality evaluation of our finance receivables is updated quarterly. We believe the credit quality of our deferred acquisition fees receivable falls under category one, as CPA:18 – Global is expected to have the available cash to make such payments (Note 3).
A summary of our finance receivables by internal credit quality rating, excluding our deferred acquisition fees receivable (Note 3) and allowance for credit losses, is as follows (dollars in thousands): | | Number of Tenants / Obligors at December 31, | | Carrying Value at December 31, |
| | Number of Tenants / Obligors at December 31, | | | | Number of Tenants / Obligors at December 31, | | Carrying Value at December 31, |
| Internal Credit Quality Indicator | Internal Credit Quality Indicator | | 2021 | | 2020 | | 2021 | | 2020 | Internal Credit Quality Indicator | | 2023 | | 2022 | | 2023 | | 2022 |
| 1 – 3 | 1 – 3 | | 17 | | 18 | | $ | 703,280 | | | $ | 587,103 | |
| 4 | 4 | | 9 | | 9 | | 140,230 | | | 141,944 | |
| 5 | 5 | | — | | 2 | | — | | | 36,737 | |
| $ | 843,510 | | | $ | 765,784 | |
| | | | | | $ | |
| | | | | |
| W. P. Carey 20212023 10-K – 8289 |
Notes to Consolidated Financial Statements
Note 6.8. Goodwill and Other Intangibles
We have recorded net lease and internal-use software development and trade name intangibles that are being amortized over periods ranging from three yearsone year to 48 years. In-place lease intangibles, at cost are included in In-place lease intangible assets and other in the consolidated financial statements. Above-market rent intangibles, at cost are included in Above-market rent intangible assets in the consolidated financial statements. Accumulated amortization of in-place lease and above-market rent intangibles is included in Accumulated depreciation and amortization in the consolidated financial statements. Internal-use software development and trade name intangibles are included in Other assets, net in the consolidated financial statements. Below-market rent and below-market purchase option intangibles are included in Below-market rent and other intangible liabilities, net in the consolidated financial statements.
Net lease intangibles recorded in connection with property acquisitions during the year ended December 31, 2023 are described in Note 6.
In connection with certain business combinations, including the CPA:18 Merger (Note 4), we recorded goodwill as a result of consideration exceeding the fair values of the assets acquired and liabilities assumed (Note 2). The goodwill was attributed to our Real Estate reporting unit as it relates to the real estate assets we acquired in such business combinations. The following table presents a reconciliation of our goodwill (in thousands): | | | | | | | | | | | | | | | | | |
| Real Estate | | Investment Management | | Total |
| Balance at January 1, 2019 | $ | 857,337 | | | $ | 63,607 | | | $ | 920,944 | |
CPA:17 Merger measurement period adjustments (Note 3) | 15,802 | | | — | | | 15,802 | |
| Foreign currency translation adjustments | (2,058) | | | — | | | (2,058) | |
| Balance at December 31, 2019 | 871,081 | | | 63,607 | | | 934,688 | |
| Foreign currency translation adjustments | 10,403 | | | — | | | 10,403 | |
Allocation of goodwill based on portion of Investment Management business sold (Note 3) | — | | | (34,273) | | | (34,273) | |
| Balance at December 31, 2020 | 881,484 | | | 29,334 | | | 910,818 | |
| Foreign currency translation adjustments | (9,289) | | | — | | | (9,289) | |
| Balance at December 31, 2021 | $ | 872,195 | | | $ | 29,334 | | | $ | 901,529 | |
| | | | | | | | | | | | | | | | | |
| Real Estate | | Investment Management | | Total |
| Balance at January 1, 2021 | $ | 881,484 | | | $ | 29,334 | | | $ | 910,818 | |
| Foreign currency translation adjustments | (9,289) | | | — | | | (9,289) | |
| Balance at December 31, 2021 | 872,195 | | | 29,334 | | | 901,529 | |
Acquisition of CPA:18 – Global (Note 4) | 172,346 | | | — | | | 172,346 | |
| Foreign currency translation adjustments | (7,129) | | | — | | | (7,129) | |
| — | | | (29,334) | | | (29,334) | |
| Balance at December 31, 2022 | 1,037,412 | | | — | | | 1,037,412 | |
Allocation of goodwill distributed to NLOP (Note 3) | (61,737) | | | — | | | (61,737) | |
| Foreign currency translation adjustments | 2,614 | | | — | | | 2,614 | |
| Balance at December 31, 2023 | $ | 978,289 | | | $ | — | | | $ | 978,289 | |
Current accounting guidance requires that we test for the recoverability of goodwill at the reporting unit level. The test for recoverability must be conducted at least annually, or more frequently if events or changes in circumstances indicate that the carrying value of goodwill may not be recoverable. We performed (i) our annual test for impairment in October 20212023 and (ii) a test for impairment in connection with the Spin-Off in November 2023, for goodwill recorded in both segmentsour Real Estate segment and found no impairment indicated.
| | | | | |
| W. P. Carey 20212023 10-K – 8390 |
Notes to Consolidated Financial Statements
Intangible assets, intangible liabilities, and goodwill are summarized as follows (in thousands):
| | December 31, |
| 2021 | | 2020 |
| Gross Carrying Amount | | Accumulated Amortization | | Net Carrying Amount | | Gross Carrying Amount | | Accumulated Amortization | | Net Carrying Amount |
| December 31, | | | December 31, |
| 2023 | | | 2023 | | 2022 |
| Gross Carrying Amount | | | Gross Carrying Amount | | Accumulated Amortization | | Net Carrying Amount | | Gross Carrying Amount | | Accumulated Amortization | | Net Carrying Amount |
| Finite-Lived Intangible Assets | Finite-Lived Intangible Assets | | | | | | | | | | | |
| Internal-use software development costs | Internal-use software development costs | $ | 19,553 | | | $ | (18,682) | | | $ | 871 | | | $ | 19,204 | | | $ | (15,711) | | | $ | 3,493 | |
| Trade name | 3,975 | | | (3,581) | | | 394 | | | 3,975 | | | (2,786) | | | 1,189 | |
| 23,528 | | | (22,263) | | | 1,265 | | | 23,179 | | | (18,497) | | | 4,682 | |
| Internal-use software development costs | |
| Internal-use software development costs | |
| 20,745 | |
| Lease Intangibles: | Lease Intangibles: | | | | | | | | | | | |
| In-place lease | In-place lease | 2,279,905 | | | (934,663) | | | 1,345,242 | | | 2,181,584 | | | (828,219) | | | 1,353,365 | |
| In-place lease | |
| In-place lease | |
| Above-market rent | Above-market rent | 843,410 | | | (489,861) | | | 353,549 | | | 881,159 | | | (440,952) | | | 440,207 | |
| 3,123,315 | | | (1,424,524) | | | 1,698,791 | | | 3,062,743 | | | (1,269,171) | | | 1,793,572 | |
| Indefinite-Lived Goodwill | | | | | | | | | | | |
| 2,875,512 | |
| Goodwill | |
| Goodwill | |
| Goodwill | |
| Goodwill | Goodwill | 901,529 | | | — | | | 901,529 | | | 910,818 | | | — | | | 910,818 | |
| Total intangible assets | Total intangible assets | $ | 4,048,372 | | | $ | (1,446,787) | | | $ | 2,601,585 | | | $ | 3,996,740 | | | $ | (1,287,668) | | | $ | 2,709,072 | |
| | Finite-Lived Intangible Liabilities | Finite-Lived Intangible Liabilities | |
| Finite-Lived Intangible Liabilities | |
| Finite-Lived Intangible Liabilities | |
| Below-market rent | |
| Below-market rent | |
| Below-market rent | Below-market rent | $ | (272,483) | | | $ | 105,908 | | | $ | (166,575) | | | $ | (270,730) | | | $ | 90,193 | | | $ | (180,537) | |
| Indefinite-Lived Intangible Liabilities | Indefinite-Lived Intangible Liabilities | |
| Below-market purchase option | Below-market purchase option | (16,711) | | | — | | | (16,711) | | | (16,711) | | | — | | | (16,711) | |
| Below-market purchase option | |
| Below-market purchase option | |
| Total intangible liabilities | Total intangible liabilities | $ | (289,194) | | | $ | 105,908 | | | $ | (183,286) | | | $ | (287,441) | | | $ | 90,193 | | | $ | (197,248) | |
During 2021,2023, the U.S. dollar strengthenedweakened against the euro, resulting in an decreaseincrease of $43.9$18.8 million in the carrying value of our net intangible assets from December 31, 20202022 to December 31, 2021. 2023. See Note 3 for a description of intangible assets and liabilities derecognized in connection with the Spin-Off. See Note 7 for a description of intangible assets and liabilities reclassified to net investments in sales-type leases during the year ended December 31, 2023.
Net amortization of intangibles, including the effect of foreign currency translation, was $236.6$247.5 million, $226.2$229.2 million, and $272.0$236.6 million for the years ended December 31, 2021, 2020,2023, 2022, and 2019,2021, respectively. Amortization of below-market rent and above-market rent intangibles is recorded as an adjustment to Lease revenues and amortization of internal-use software development trade name, and in-place lease intangibles is included in Depreciation and amortization.
Based on the intangible assets and liabilities recorded at December 31, 2021,2023, scheduled annual net amortization of intangibles for each of the next five calendar years and thereafter is as follows (in thousands):
| | Years Ending December 31, | Years Ending December 31, | | Net Decrease in Lease Revenues | | Increase to Amortization | | Total | Years Ending December 31, | | Net Decrease in Lease Revenues | | Increase to Amortization | | Total |
| 2022 | | $ | 41,856 | | | $ | 157,727 | | | $ | 199,583 | |
| 2023 | | 34,771 | | | 146,690 | | | 181,461 | |
| 2024 | 2024 | | 33,241 | | | 132,148 | | | 165,389 | |
| 2025 | 2025 | | 28,451 | | | 122,199 | | | 150,650 | |
| 2026 | 2026 | | 24,617 | | | 110,791 | | | 135,408 | |
| 2027 | |
| 2028 | |
| Thereafter | Thereafter | | 24,038 | | | 676,952 | | | 700,990 | |
| Total | Total | | $ | 186,974 | | | $ | 1,346,507 | | | $ | 1,533,481 | |
| | | | | |
| W. P. Carey 20212023 10-K – 8491 |
Notes to Consolidated Financial Statements
Note 7.9. Equity Method Investments
We own interests in (i) the Managed Programs, (ii) certain unconsolidated real estate investments with CPA:18 – Global and third parties and (iii) WLT.in the Managed Programs. We account for our interests in these investments under the equity method of accounting (i.e., at cost, increased or decreased by our share of earnings or losses, less distributions, plus contributions and other adjustments required by equity method accounting, such as basis differences) or at fair value by electing the equity method fair value option available under GAAP.
We classify distributions received from equity method investments using the cumulative earnings approach. In general, distributions received are considered returns on the investment and classified as cash inflows from operating activities. If, however, the investor’s cumulative distributions received, less distributions received in prior periods determined to be returns of investment, exceeds cumulative equity in earnings recognized, the excess is considered a return of investment and is classified as cash inflows from investing activities.
Interests in Unconsolidated Real Estate Investments
We own equity interests in properties that are generally leased to companies through noncontrolling interests in partnerships and limited liability companies that we do not control but over which we exercise significant influence. The underlying investments are jointly owned with third parties. We account for these investments under the equity method of accounting. Operating results of our unconsolidated real estate investments are included in the Real Estate segment.
The following table sets forth our ownership interests in our equity method investments in real estate, excluding the Managed Programs, and their respective carrying values (dollars in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Ownership Interest at | | Carrying Value at December 31, |
| Lessee/Fund/Description | | Co-owner | | December 31, 2023 | | 2023 | | 2022 |
Las Vegas Retail Complex (a) | | Third Party | | N/A | | $ | 235,979 | | | $ | 196,352 | |
| Johnson Self Storage | | Third Party | | 90% | | 63,934 | | | 65,707 | |
Kesko Senukai (b) | | Third Party | | 70% | | 28,860 | | | 38,569 | |
Harmon Retail Corner (c) | | Third Party | | 15% | | 24,229 | | | 24,649 | |
| | | | | | $ | 353,002 | | | $ | 325,277 | |
__________
(a)See “Las Vegas Retail Complex” below for discussion of this equity method investment in real estate.
(b)The carrying value of this investment is affected by fluctuations in the exchange rate of the euro.
(c)This investment is reported using the hypothetical liquidation at book value model, which may be different than pro rata ownership percentages, primarily due to the capital structure of the partnership agreement.
We received aggregate distributions of $29.1 million, $27.8 million, and $18.6 million from our unconsolidated real estate investments for the years ended December 31, 2023, 2022, and 2021, respectively. At December 31, 2023 and 2022, the aggregate unamortized basis differences on our unconsolidated real estate investments were $18.0 million and $19.1 million, respectively.
Las Vegas Retail Complex
On June 10, 2021, we entered into an agreement to fund a construction loan of approximately $261.9 million for a retail complex in Las Vegas, Nevada, at an interest rate of 6.0% and term of 36 months. Through December 31, 2023, we funded $231.4 million, with the remaining amount expected to be funded in 2024. We hold a purchase option for two net-leased units at the complex upon its completion, as well as an equity purchase option to acquire a 47.5% equity interest in the partnership that owns the borrower. As of the agreement date, we did not deem the exercise of the purchase options to be reasonably certain.
| | | | | |
| W. P. Carey 2023 10-K– 92 |
Notes to Consolidated Financial Statements
In accordance with ASC 810, Consolidation, we determined that this loan will not be consolidated, but due to the characteristics of the arrangement (including our participation in expected residual profits), the risks and rewards of the agreement are similar to those associated with an investment in real estate rather than a loan. Therefore, the loan will be treated as an implied investment in real estate (i.e., an equity method investment in real estate) for accounting purposes in accordance with the acquisition, development and construction arrangement sub-section of ASC 310, Receivables. Equity income from this investment was $12.8 million and $10.1 million for the years ended December 31, 2023 and 2022, respectively, which was recognized within Earnings (losses) from equity method investments in our consolidated statements of income.
Managed Programs
We own interests in the Managed Programs and account for these interests under the equity method because, as their advisor, we do not exert control over, but we do have the ability to exercise significant influence over, the Managed Programs. Operating results of the Managed Programs are included in the Investment Management segment.
The following table sets forth certain information about our investments in the Managed Programs (dollars in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | % of Outstanding Shares Owned at | | Carrying Amount of Investment at |
| | December 31, | | December 31, |
| Fund | | 2021 | | 2020 | | 2021 | | 2020 |
CPA:18 – Global (a) | | 5.578 | % | | 4.569 | % | | $ | 60,836 | | | $ | 51,949 | |
| CPA:18 – Global operating partnership | | 0.034 | % | | 0.034 | % | | 209 | | | 209 | |
CESH (b) | | 2.430 | % | | 2.430 | % | | 3,689 | | | 4,399 | |
| | | | | | $ | 64,734 | | | $ | 56,557 | |
__________
(a)During 2021, we received asset management revenue from CPA:18 – Global in shares of its common stock, which increased our ownership percentage in CPA:18 – Global (Note 3).(b)Investment is accounted for at fair value.Las Vegas Retail Complex
CPA:18 – Global— We received distributions from this investment during the years endedOn June 10, 2021, we entered into an agreement to fund a construction loan of approximately $261.9 million for a retail complex in Las Vegas, Nevada, at an interest rate of 6.0% and term of 36 months. Through December 31, 2021, 2020, and 2019 of $3.52023, we funded $231.4 million, $2.6 million, and $3.3 million, respectively.with the remaining amount expected to be funded in 2024. We received distributions from our investmenthold a purchase option for two net-leased units at the complex upon its completion, as well as an equity purchase option to acquire a 47.5% equity interest in the CPA:18 – Global operating partnership duringthat owns the years ended December 31, 2021, 2020, and 2019borrower. As of $7.3 million, $7.2 million, and $8.1 million, respectively (Note 3).the agreement date, we did not deem the exercise of the purchase options to be reasonably certain.
CWI 1— We received distributions from this investment during the years ended December 31, 2020 (through April 13, 2020, the date of the CWI 1 and CWI 2 Merger (Note 3)) and 2019 of $0.8 million and $2.7 million, respectively. We received distributions from our investment in the CWI 1 operating partnership during the year ended December 31, 2019 of $7.1 million (Note 3). We did not receive such a distribution during 2020 (through April 13, 2020), as a result of the adverse effect of the COVID-19 pandemic on the operations of CWI 1.
CWI 2— We received distributions from this investment during the years ended December 31, 2020 (through April 13, 2020, the date of the CWI 1 and CWI 2 Merger (Note 3)) and 2019 of $0.5 million and $1.6 million, respectively. We received distributions from our investment in the CWI 2 operating partnership during the year ended December 31, 2019 of $6.3 million (Note 3). We did not receive such a distribution during 2020 (through April 13, 2020), as a result of the adverse effect of the COVID-19 pandemic on the operations of CWI 2.
CESH— We have elected to account for our investment in CESH at fair value by selecting the equity method fair value option available under GAAP. We record our investment in CESH on a one quarter lag; therefore, the balance of our equity method investment in CESH recorded as of December 31, 2021 is based on the estimated fair value of our investment as of September 30, 2021. We received distributions from this investment during the year ended December 31, 2021 of $1.3 million. We did not receive distributions from this investment during the years ended December 31, 2020 or 2019.
| | | | | |
| W. P. Carey 20212023 10-K – 8592 |
Notes to Consolidated Financial Statements
At December 31, 2021 and 2020, the aggregate unamortized basis differences on our equity method investments in the Managed Programs were $23.3 million and $18.8 million, respectively.
Interests in Other Unconsolidated Real Estate Investments and WLT
We own equity interests in properties, we determined that are generally leased to companies through noncontrolling interests in partnerships and limited liability companies that we dothis loan will not controlbe consolidated, but over which we exercise significant influence. The underlying investments are jointly owned with affiliates or third parties. In addition, we own shares of WLT common stock, as described in Note 3. We account for these investments under the equity method of accounting. Investments in unconsolidated investments are required to be evaluated periodically for impairment. We periodically compare an investment’s carrying value to its estimated fair value and recognize an impairment chargedue to the extent thatcharacteristics of the carrying value exceeds fair valuearrangement (including our participation in expected residual profits), the risks and such decline is determinedrewards of the agreement are similar to be other than temporary. Operating results of our unconsolidated real estate investments are included in the Real Estate segment.
The following table sets forth our ownership interests in our equity method investmentsthose associated with an investment in real estate excludingrather than a loan. Therefore, the Managed Programs, and their respective carrying values (dollars in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Ownership Interest at | | Carrying Value at December 31, |
| Lessee | | Co-owner | | December 31, 2021 | | 2021 | | 2020 |
Las Vegas Retail Complex (a) | | Third Party | | N/A | | $ | 104,114 | | | $ | — | |
| Johnson Self Storage | | Third Party | | 90% | | 67,573 | | | 68,979 | |
Kesko Senukai (b) | | Third Party | | 70% | | 41,955 | | | 46,443 | |
WLT (c) | | WLT | | 5% | | 33,392 | | | 44,182 | |
Harmon Retail Corner (d) | | Third Party | | 15% | | 24,435 | | | 23,815 | |
State Farm Mutual Automobile Insurance Co. (e) | | CPA:18 – Global | | 50% | | 7,129 | | | 15,475 | |
Apply Sørco AS (f) | | CPA:18 – Global | | 49% | | 5,909 | | | 7,156 | |
Bank Pekao (b) (g) | | CPA:18 – Global | | 50% | | 4,460 | | | 17,850 | |
Fortenova Grupa d.d. (b) (h) | | CPA:18 – Global | | 20% | | 2,936 | | | 2,989 | |
| | | | | | $ | 291,903 | | | $ | 226,889 | |
__________
(a)See “Las Vegas Retail Complex” below for discussion of this equity methodloan will be treated as an implied investment in real estate.
(b)The carrying value of this investment is affected by fluctuations in the exchange rate of the euro.
(c)Following the closing of the CWI 1 and CWI 2 Merger, we own 12,208,243 shares of common stock of WLT, which we account for asestate (i.e., an equity method investment in real estate. We followestate) for accounting purposes in accordance with the HLBV modelacquisition, development and construction arrangement sub-section of ASC 310, Receivables. Equity income from this investment was $12.8 million and $10.1 million for this investment. We record any earnings from our investment in shares of common stock of WLT on a one quarter lag (Note 3). For the years ended December 31, 20212023 and 2020, we recognized losses of $10.8 million and $5.0 million,2022, respectively, from our equity method investment in WLT (due to the adverse impact of the COVID-19 pandemic on its operations), which was recognized within Earnings (losses) from equity method investments in our consolidated statements of income. At December 31, 2021 and 2020, we also owned an investment in preferred shares of WLT (Note 3), which is included in Other assets, net in the consolidated financial statements (Note 8) and was fully redeemed in January 2022 (Note 17).(d)This investment is reported using the HLBV model, which may be different than pro rata ownership percentages, primarily due to the capital structure of the partnership agreement.
(e)We recognized an other-than-temporary impairment charge of $6.8 million on this investment during 2021, as described in Note 8.(f)The carrying value of this investment is affected by fluctuations in the exchange rate of the Norwegian krone.
(g)We recognized our $13.2 million proportionate share of an impairment charge recorded on this investment during 2021, which was reflected within (Losses) earnings from equity method investments in our consolidated statements of income. The estimated fair value of the investment declined due to notice of non-renewal of the lease by the current tenant at the international office facility owned by the investment (lease expiration is in May 2023). The fair value measurement was determined by estimating discounted cash flows using two significant unobservable inputs, which were the residual capitalization rate (range of 6.75% to 7.75%) and estimated market rents (range of $17 to $18 per square foot).
(h)In October 2021, 1 of the properties in this investment was sold for $14.1 million, net of selling costs (our proportionate share was $2.8 million), and a net gain on sale of $2.0 million was recognized (our proportionate share was $0.4 million).
| | | | | |
| W. P. Carey 2021 10-K– 86
|
Notes to Consolidated Financial Statements
We received aggregate distributions of $18.6 million, $17.8 million, and $17.0 million from our other unconsolidated real estate investments for the years ended December 31, 2021, 2020, and 2019, respectively. At December 31, 2021 and 2020, the aggregate unamortized basis differences on our unconsolidated real estate investments were $7.9 million and $16.1 million, respectively. This decrease was primarily due to an other-than-temporary impairment charge that we recognized on an equity method investment in real estate during the year ended December 31, 2021, as described above and in Note 8.
Las Vegas Retail Complex
On June 10, 2021, we entered into an agreement to fund a construction loan of approximately $224.9$261.9 million for a retail complex in Las Vegas, Nevada, at an interest rate of 6.0% and term of 36 months. Through December 31, 2021,2023, we funded $103.7$231.4 million, with the remaining amount expected to be funded over the 15 to 22 months following closing.in 2024. We hold a purchase option for 2two net-leased units at the complex upon its completion, as well as an equity purchase option to acquire a 47.5% equity interest in the partnership that owns the borrower. As of the agreement date, we did not deem the exercise of the purchase options to be reasonably certain.
| | | | | |
| W. P. Carey 2023 10-K– 92 |
Notes to Consolidated Financial Statements
In accordance with ASC 810, Consolidation, we determined that this loan will not be consolidated, but due to the characteristics of the arrangement (including our participation in expected residual profits), the risks and rewards of the agreement are similar to those associated with an investment in real estate rather than a loan. Therefore, the loan will be treated as an implied investment in real estate (i.e., an equity method investment in real estate) for accounting purposes in accordance with the acquisition, development and construction arrangement sub-section of ASC 310, Receivables. InterestEquity income from this investment was $3.0$12.8 million and $10.1 million for the yearyears ended December 31, 2021,2023 and 2022, respectively, which was recognized within (Losses) earningsEarnings (losses) from equity method investments in our consolidated statements of income.
Managed Programs
We own interests in the Managed Programs and account for these interests under the equity method because, as their advisor, we do not exert control over, but we do have the ability to exercise significant influence over, the Managed Programs. Operating results of the Managed Programs are included in the Investment Management segment.
CPA:18 – Global— We received distributions from this investment during the years ended December 31, 2022 and 2021 of $1.6 million and $3.5 million, respectively. We received distributions from our investment in the CPA:18 – Global operating partnership during the years ended December 31, 2022 and 2021 of $8.7 million and $7.3 million, respectively (Note 5).
CESH— We have elected to account for our investment in 2.43% of CESH at fair value by selecting the equity method fair value option available under GAAP. We record our investment in CESH on a one quarter lag; therefore, the balance of our equity method investment in CESH recorded as of December 31, 2023 is based on the estimated fair value of our investment as of September 30, 2023. The carrying amount of our investment in CESH was $1.3 million and $2.2 million as of December 31, 2023 and 2022, respectively. We received distributions from this investment during the years ended December 31, 2023, 2022, and 2021 of $1.2 million, $1.2 million, and $1.3 million, respectively.
Note 8.10. Fair Value Measurements
The fair value of an asset is defined as the exit price, which is the amount that would either be received when an asset is sold or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The guidance establishes a three-tier fair value hierarchy based on the inputs used in measuring fair value. These tiers are: Level 1, for which quoted market prices for identical instruments are available in active markets, such as money market funds, equity securities, and U.S. Treasury securities; Level 2, for which there are inputs other than quoted prices included within Level 1 that are observable for the instrument, such as certain derivative instruments including interest rate caps, interest rate swaps, and foreign currency collars; and Level 3, for securities that do not fall into Level 1 or Level 2 and for which little or no market data exists, therefore requiring us to develop our own assumptions.
Items Measured at Fair Value on a Recurring Basis
The methods and assumptions described below were used to estimate the fair value of each class of financial instrument. For significant Level 3 items, we have also provided the unobservable inputs.
Derivative Assets and Liabilities — Our derivative assets and liabilities, which are included in Other assets, net and Accounts payable, accrued expenses and other liabilities, respectively, in the consolidated financial statements, are comprised of foreign currency collars, interest rate swaps, interest rate caps, and stock warrants (Note 911).
The valuation of our derivative instruments (excluding stock warrants) is determined using a discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, as well as observable market-based inputs, including interest rate curves, spot and forward rates, and implied volatilities. We incorporate credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of our derivative instruments for the effect of nonperformance risk, we have considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees. These derivative instruments were classified as Level 2 as these instruments are custom, over-the-counter contracts with various bank counterparties that are not traded in an active market.
| | | | | |
| W. P. Carey 2023 10-K– 93 |
Notes to Consolidated Financial Statements
The stock warrants were measured at fair value using valuation models that incorporate market inputs and our own assumptions about future cash flows. We classified these assets as Level 3 because these assets are not traded in an active market.
| | | | | |
| W. P. Carey 2021 10-K– 87
|
Notes to Consolidated Financial Statements
Equity Method Investment in CESH — We have elected to account for our investment in CESH, which is included in Equity method investments in the consolidated financial statements, at fair value by selecting the equity method fair value option available under GAAP (Note 79). We classified this investment as Level 3 because we primarily used valuation models that incorporate unobservable inputs to determine its fair value.
Investment in Shares of Lineage Logistics — We have elected to apply the measurement alternative under ASU 2016-01, Financial Instruments — Overall (Subtopic 825-10) to account for our investment in shares of Lineage Logistics (a cold storage REIT), which is included in Other assets, net in the consolidated financial statements. Under this alternative, the carrying value is adjusted for any impairments or changes in fair value resulting from observable transactions for similar or identical investments in the issuer. We classified this investment as Level 3 because it is not traded in an active market. During the years ended December 31, 2021, 2020,2022 and 2019,2021, we recognized non-cash unrealized gains on our investment in shares of Lineage Logistics totaling $76.3 million, $48.3$38.6 million and $32.9$76.3 million, respectively, due to secondary market transactions at a higher price per share, which was recorded within Other gains and (losses) in the consolidated financial statements. In addition, during the year ended December 31, 2021,2022, we received a cash dividenddividends of $6.4$4.3 million from our investment in shares of Lineage Logistics, which was recorded within Non-operating income in the consolidated financial statements. See Note 14 for further discussion of the impact of Lineage Logistics’s conversion to a REIT during the first quarter of 2020. In addition, in October 2020, we purchased additional shares of Lineage Logistics for $95.5 million. The fair value of this investment was $366.3 million and $290.0$404.9 million at both December 31, 20212023 and 2020, respectively.2022.
Investment in Shares of GCIF — We account for our investment in shares of GCIF, which is included in Other assets, net in the consolidated financial statements, at fair value. We classified this investment as Level 2 because we used a quoted price from an inactive market to determine its fair value. During the year ended December 31, 2021,2023, we received liquidating distributions from our investment in shares of GCIF totaling $1.5$1.0 million, which reduced the cost basis of our investment (in March 2021, GCIF announced its intention to liquidate and to distribute substantially all of its assets). During the year ended December 31, 2021, we redeemed a portion of our investment in shares of GCIF for approximately $0.8 million and recognized a net loss of $0.1 million, which was included within Other gains and (losses) in the consolidated statements of income. In addition, during the years ended December 31, 2021, 2020, and 2019, we received distributions from our investment in shares of GCIF totaling less than $0.1 million, $0.6 million, and $2.0 million, respectively, which were recorded within Non-operating income in the consolidated financial statements. During the year ended December 31, 2021, we recognized unrealized gains on our investment in shares of GCIF totaling $0.6 million, which was recognized within Other gains and (losses) in the consolidated financial statements. The fair value of our investment in shares of GCIF was $4.3$0.8 million and $6.1$1.7 million at December 31, 20212023 and 2020,2022, respectively.
Investment in Preferred Shares of WLT — We account for our investment in preferred shares of WLT (Note 3), which is included in Other assets, net in the consolidated financial statements, as available-for-sale debt securities at fair value. The fair value was primarily determined by a discounted cash flow approach based on a weighted-average probability analysis of certain redemption options. We classified this investment as Level 3 because the discounted cash flow valuation model incorporates unobservable inputs to determine its fair value, including a cash flow discount rate of 15% as of December 31, 2020. In January 2022, WLT redeemed in full our 1,300,000 shares of its preferred stock for gross proceeds of $65.0 million (based on the liquidation preference of $50.00 per share), as described in Note 3 and Note 17. Since this redemption was based on market conditions that existed as of December 31, 2021, during the year ended December 31, 2021, we recognized an unrealized gain on our investment in preferred shares of WLT of $18.7 million, which was recognized within Other comprehensive income (loss) in the consolidated financial statements. In January 2022, in connection with this redemption, we reclassified this $18.7 million unrealized gain from Accumulated other comprehensive loss to Other gains and (losses) in the consolidated financial statements (Note 14). During the year ended December 31, 2021,2022, we received cash dividends of $4.9$0.9 million from our investment in preferred shares of WLT, which was recorded within Non-operating income in the consolidated financial statements. The fair value
Investment in Common Shares of WLT — In January 2022, we reclassified our investment in 12,208,243 shares of common stock of WLT from equity method investments to equity securities, since we no longer had significant influence over WLT, following the redemption of our investment in preferred shares of WLT, as described above. As a result, we accounted for this investment, which was $65.0included in Other assets, net in the consolidated financial statements, at fair value. We classified this investment as Level 3 because it is not traded in an active market. We recognized non-cash unrealized gains of $49.2 million and $46.3 million ason our investment in shares of common stock of WLT during the year ended December 31, 20212022, reflecting the most recently published net asset value of WLT, which was recorded within Other gains and 2020, respectively.(losses) in the consolidated financial statements. WLT completed its previously announced sale to private real estate funds in October 2022 and we received $82.6 million in cash proceeds. Upon completion of this transaction, we have no remaining interest in WLT.
We did not have any transfers into or out of Level 1, Level 2, and Level 3 category of measurements during either the years ended December 31, 20212023 or 2020.2022. Gains and losses (realized and unrealized) recognized on items measured at fair value on a recurring basis included in earnings are reported within Other gains and (losses) on our consolidated financial statements.
| | | | | |
| W. P. Carey 20212023 10-K – 8894 |
Notes to Consolidated Financial Statements
Our other material financial instruments had the following carrying values and fair values as of the dates shown (dollars in thousands):
| | December 31, 2021 | | December 31, 2020 |
| Level | | Carrying Value | | Fair Value | | Carrying Value | | Fair Value |
| | | December 31, 2023 | | | | | December 31, 2023 | | December 31, 2022 |
| Level | | | Level | | Carrying Value | | Fair Value | | Carrying Value | | Fair Value |
Senior Unsecured Notes, net (a) (b) (c) | Senior Unsecured Notes, net (a) (b) (c) | 2 | | $ | 5,701,913 | | | $ | 5,984,228 | | | $ | 5,146,192 | | | $ | 5,639,586 | |
Non-recourse mortgages, net (a) (b) (d) | Non-recourse mortgages, net (a) (b) (d) | 3 | | 368,524 | | | 369,841 | | | 1,145,554 | | | 1,148,551 | |
__________
(a)The carrying value of Senior Unsecured Notes, net (Note 1012) includes unamortized deferred financing costs of $28.7$21.0 million and $23.9$25.9 million at December 31, 20212023 and 2020,2022, respectively. The carrying value of Non-recourse mortgages, net includes unamortized deferred financing costs of less than $0.1 million and $0.4 million at both December 31, 20212023 and 2020, respectively.2022. (b)The carrying value of Senior Unsecured Notes, net includes unamortized discount of $29.2$20.1 million and $22.6$24.1 million at December 31, 20212023 and 2020,2022, respectively. The carrying value of Non-recourse mortgages, net includes unamortized discount of $0.8$4.3 million and $4.5$10.3 million at December 31, 20212023 and 2020,2022, respectively.
(c)For those Senior Unsecured Notes for which there are no observable market prices (specifically, our private placement Senior Unsecured Notes (Note 12)), we used a discounted cash flow model that estimates the present value of future loan payments by discounting such payments at current estimated market interest rates. We consider these notes to be within the Level 3 category. For all other Senior Unsecured Notes, we determined the estimated fair value of the Senior Unsecured Notes using observed market prices in an open market, which may experience limited trading volume. We consider these notes to be within the Level 2 category. (d)We determined the estimated fair value of our non-recourse mortgage loans using a discounted cash flow model that estimates the present value of the future loan payments by discounting such payments at current estimated market interest rates. The estimated market interest rates consider interest rate risk and the value of the underlying collateral, which includes quality of the collateral, the credit quality of the tenant/obligor, and the time until maturity.
We estimated that our other financial assets and liabilities, including amounts outstanding under our Senior Unsecured Credit Facility (Note 1012), but excluding finance receivables (Note 57), had fair values that approximated their carrying values at both December 31, 20212023 and 2020.2022.
Items Measured at Fair Value on a Non-Recurring Basis (Including Impairment Charges)
We periodically assess whether there are any indicators that the value of our real estate investments may be impaired or that their carrying value may not be recoverable.recoverable, including investments impacted by the Spin-Off and Office Sale Program (Note 1). Our impairment policies are described in Note 2.
The following table presents information about assets for which we recorded an impairment charge and that were measured at fair value on a non-recurring basis (in thousands):
| | Years Ended December 31, |
| Years Ended December 31, | | | Years Ended December 31, |
| | | 2021 | | 2020 | | 2019 | | 2023 | | 2022 | | 2021 |
| | | Fair Value
Measurements | | Impairment
Charges | | Fair Value
Measurements | | Impairment
Charges | | Fair Value
Measurements | | Impairment
Charges | | Fair Value
Measurements | | Impairment
Charges | | Fair Value
Measurements | | Impairment
Charges | | Fair Value
Measurements | | Impairment
Charges |
| Impairment Charges | Impairment Charges | | | | | | | | | | | |
| Land, buildings and improvements and intangibles | $ | 29,494 | | | $ | 24,246 | | | $ | 31,350 | | | $ | 35,830 | | | $ | 1,012 | | | $ | 1,345 | |
| Real estate and intangibles | |
| Real estate and intangibles | |
| Real estate and intangibles | |
| Investment Management goodwill | |
| Equity method investments | Equity method investments | 8,175 | | | 6,830 | | | 55,245 | | | 55,387 | | | — | | | — | |
| Net investments in direct financing leases | — | | | — | | | — | | | — | | | 33,115 | | | 31,194 | |
| $ | 31,076 | | | $ | 91,217 | | | $ | 32,539 | |
| | | $ | |
| | | | | |
| W. P. Carey 20212023 10-K – 8995 |
Notes to Consolidated Financial Statements
Impairment charges, and their related triggering events and fair value measurements, recognized during 2021, 2020,2023, 2022, and 20192021 were as follows:
Land, BuildingsReal Estate and ImprovementsIntangibles
The impairment charges described below are reflected within Impairment charges — real estate in our consolidated statements of income.
2023 — During the year ended December 31, 2023, we recorded an impairment charge of $47.3 million related to the 59 properties that were contributed to NLOP in the Spin-Off (Note 3). The fair value measurements for certain of these properties were determined by estimating discounted cash flows using the following unobservable inputs:
•Market rents ranging from $6 per square foot to $65 per square foot;
•Cash flow discount rates ranging from 6.5% to 12.0%; and Intangibles
•Terminal capitalization rates ranging from 5.5% to 12.0%.
Additionally, the fair value measurements for certain of these properties approximated their estimated selling prices.
The fair value measurements for the non-recourse mortgages encumbering certain of the properties that were contributed to NLOP were determined using a discounted cash flow model that estimates the present value of the future loan payments by discounting such payments at current estimated market interest rates. The estimated market interest rates consider interest rate risk and the value of the underlying collateral, which includes quality of the collateral, the credit quality of the tenant/obligor, and the time until maturity.
In addition, during the year ended December 31, 2023, we recognized impairment charges totaling $39.1 million on three office properties in order to reduce their carrying values to their estimated fair values, which approximated their estimated selling prices. We sold one of these properties in October 2023.
2022 — During the year ended December 31, 2022, we recognized impairment charges totaling $39.1 million on 11 properties in order to reduce their carrying values to their estimated fair values, as follows:
•$12.4 million on three properties based on their estimated selling prices; we sold one of these properties in August 2022, one in March 2023, and one in January 2024 (Note 19); •$10.9 million on a property due to changes in expected cash flows related to the existing tenant’s lease expiration in 2023. The fair value measurement was determined by estimating discounted cash flows using two significant unobservable inputs, which were the cash flow discount rate (14.0%) and terminal capitalization rate (11.0%); we sold this property in November 2023;
•$9.3 million on six Pendragon PLC properties in order to reduce the carrying values of the properties to their estimated fair values. The fair value measurements for the properties were determined using a direct capitalization rate analysis; the capitalization rate for the various scenarios ranged from 4.75% to 10.00%. In March 2022, we entered into a transaction to restructure certain leases with Pendragon PLC (a tenant at certain automotive dealerships in the United Kingdom). Under this restructuring, we extended the leases on 30 properties by 11 years (no change to rent) and entered into an agreement to dispose of 12 properties, with the tenant continuing to pay rent until the earlier of sale date or certain specified dates over the following 12 months; four of these properties were sold during 2022; and
•$6.5 million on a property due to a potential property vacancy.
2021 — During the year ended December 31, 2021, we recognized impairment charges totaling $24.2 million on 2two properties in order to reduce the carrying values of the properties to their estimated fair values, as follows:
•$16.3 million on a property due to the existingformer tenant’s non-renewal of its lease expiring in 2022; the fair value measurement was determined by estimating discounted cash flows using four significant unobservable inputs, which were the cash flow discount rate (range of 7.00% to 9.00%), terminal capitalization rate (range of 6.00% to 7.00%), estimated market rents (range of $10 to $11 per square foot), and estimated capital expenditures ($100 per square foot); we sold this property in September 2022; and
•$7.9 million on a property due to a lease termination and resulting vacancy; the fair value measurement for the property was based on the sales prices for comparable properties.properties; we sold this property in March 2023.
| | | | | |
| W. P. Carey 2023 10-K– 96 |
2020
Notes to Consolidated Financial Statements
Investment Management Goodwill
The impairment charges described below are reflected within Impairment charges — Investment Management goodwill in our consolidated statements of income.
2022 — During the year ended December 31, 2020, we recognized impairment charges totaling $35.8 million on 6 properties in order to reduce the carrying values of the properties to their estimated fair values, as follows:
•$16.0 million on 2 properties leased to the same tenant, due to potential property vacancies; the fair value measurements for the properties were determined using a direct capitalization rate analysis based on the probability of vacancy versus the tenant continuing in the lease; the capitalization rate for the various scenarios ranged from 6% to 11%;
•$12.6 million on an international property due to a tenant bankruptcy; the fair value measurement for the property was determined by using a probability-weighted approach of lease restructure and vacancy scenarios;
•$3.4 million on an international property based on its estimated selling price; the property was sold in September 2020;
•$2.8 million on an international property due to a lease expiration and resulting vacancy; the fair value measurement for the property approximated its estimated selling price; and
•$1.0 million on a property based on its estimated selling price; the property was sold in September 2021.
2019 —During the year ended December 31, 2019,2022, we recognized an impairment charge of $1.3$29.3 million on a propertygoodwill within our Investment Management segment in order to reduce theits carrying value of the property to its estimated fair value. The fair value measurement for this property approximated its estimated selling price, and this property was sold in February 2020.of $0, since future Investment Management cash flows are expected to be minimal following the CPA:18 Merger (Note 4).
Equity Method Investments
The other-than-temporary impairment charges described below are reflected within (Losses) earningsEarnings (losses) from equity method investments in our consolidated statements of income.
2021 — During the year ended December 31, 2021, we recognized an other-than-temporary impairment charge of $6.8 million on a jointly owned real estate investment to reduce the carrying value of our investment to its estimated fair value, which declined due to changes in expected cash flows related to the existing tenant’s lease expiration in 2028. The fair value measurement was determined by estimating discounted cash flows using three significant unobservable inputs, which were the cash flow discount rate (5.75%), residual discount rate (7.50%), and residual capitalization rate (6.75%).
2020 — During the year ended December 31, 2020, we recognized other-than-temporary impairment charges of $27.8 million and $19.3 million on our equity method investments in CWI 1 and CWI 2, respectively, to reduce the carrying values of our investments to their estimated fair values, due to the COVID-19 pandemic, which had an adverse effect on the operations of CWI 1 and CWI 2. The fair value measurements were estimated based on implied asset value changes and changes in market capitalizations for publicly traded lodging REITs, all of which was obtained from third-party market data.
During the year ended December 31, 2020, we recognized an other-than-temporary impairment charge of $8.3 million on a jointly owned real estate investment to reduce the carrying value of our investment to its estimated fair value, which declined due to an uncertain probability of lease renewal with the tenant at the international office facility owned by the investment (lease expiration is in May 2023). The fair value measurement was determined by relying on an estimate of the fair market value of the property and the related mortgage loan, both provided by a third party.
| | | | | |
| W. P. Carey 2021 10-K– 90
|
Notes to Consolidated Financial Statements
Net Investments in Direct Financing Leases
2019 —During the year ended December 31, 2019, we recognized impairment charges totaling $31.2 million on 5 properties accounted for as Net investments in direct financing leases, primarily due to a lease restructuring, based on the cash flows expected to be derived from the underlying assets (discounted at the rate implicit in the lease), in accordance with ASC 310, Receivables.
Note 9.11. Risk Management and Use of Derivative Financial Instruments
Risk Management
In the normal course of our ongoing business operations, we encounter economic risk. There are four main components of economic risk that impact us: interest rate risk, credit risk, market risk, and foreign currency risk. We are primarily subject to interest rate risk on our interest-bearing liabilities, including our Senior Unsecured Credit Facility (Note 1012) and unhedged variable-rate non-recourse mortgage loans. Credit risk is the risk of default on our operations and our tenants’ inability or unwillingness to make contractually required payments. Market risk includes changes in the value of our properties and related loans, Senior Unsecured Notes, and other securities, and the shares or limited partnership units we hold in the Managed Programs, due to changes in interest rates or other market factors. We own investments in North America, Europe, and Japan and are subject to risks associated with fluctuating foreign currency exchange rates.
Derivative Financial Instruments
When we use derivative instruments, it is generally to reduce our exposure to fluctuations in interest rates and foreign currency exchange rate movements. We have not entered into, and do not plan to enter into, financial instruments for trading or speculative purposes. In addition to entering into derivative instruments on our own behalf, we may also be a party to derivative instruments that are embedded in other contracts, and we may be granted common stock warrants by lessees when structuring lease transactions, which are considered to be derivative instruments. The primary risks related to our use of derivative instruments include a counterparty to a hedging arrangement defaulting on its obligation and a downgrade in the credit quality of a counterparty to such an extent that our ability to sell or assign our side of the hedging transaction is impaired. While we seek to mitigate these risks by entering into hedging arrangements with large financial institutions that we deem to be creditworthy, it is possible that our hedging transactions, which are intended to limit losses, could adversely affect our earnings. Furthermore, if we terminate a hedging arrangement, we may be obligated to pay certain costs, such as transaction or breakage fees. We have established policies and procedures for risk assessment and the approval, reporting, and monitoring of derivative financial instrument activities.
We measure derivative instruments at fair value and record them as assets or liabilities, depending on our rights or obligations under the applicable derivative contract. Derivatives that are not designated as hedges must be adjusted to fair value through earnings. For derivatives designated and that qualify as cash flow hedges, the change in fair value of the derivative is recognized in Other comprehensive income (loss) until the hedged item is recognized in earnings. Gains and losses on the cash flow hedges representing hedge components excluded from the assessment of effectiveness are recognized in earnings over the life of the hedge on a systematic and rational basis, as documented at hedge inception in accordance with our accounting policy election. Such gains and losses are recorded within Other gains and (losses) or Interest expense in our consolidated statements of income. The earnings recognition of excluded components is presented in the same line item as the hedged transactions. For derivatives designated and that qualify as a net investment hedge, the change in the fair value and/or the net settlement of the
| | | | | |
| W. P. Carey 2023 10-K– 97 |
Notes to Consolidated Financial Statements
derivative is reported in Other comprehensive income (loss) as part of the cumulative foreign currency translation adjustment. Amounts are reclassified out of Other comprehensive income (loss) into earnings (within Gain on sale of real estate, net, in our consolidated statements of income) when the hedged net investment is either sold or substantially liquidated.
All derivative transactions with an individual counterparty are governed by a master International Swap and Derivatives Association agreement, which can be considered as a master netting arrangement; however, we report all our derivative instruments on a gross basis on our consolidated financial statements. At both December 31, 20212023 and 2020,2022, no cash collateral had been posted nor received for any of our derivative positions.
| | | | | |
| W. P. Carey 2021 10-K– 91
|
Notes to Consolidated Financial Statements
The following table sets forth certain information regarding our derivative instruments (in thousands):
| | Derivatives Designated as Hedging Instruments | Derivatives Designated as Hedging Instruments | | Balance Sheet Location | | Asset Derivatives Fair Value at | | Liability Derivatives Fair Value at | Derivatives Designated as Hedging Instruments | | Balance Sheet Location | | Asset Derivatives Fair Value at | | Liability Derivatives Fair Value at |
| December 31, 2021 | | December 31, 2020 | | December 31, 2021 | | December 31, 2020 | | | December 31, 2023 | | December 31, 2022 | | December 31, 2023 | | December 31, 2022 |
| Foreign currency collars | Foreign currency collars | | Other assets, net | | $ | 19,484 | | | $ | 3,489 | | | $ | — | | | $ | — | |
| Interest rate caps | | Other assets, net | | 1 | | | — | | | — | | | — | |
| Interest rate swaps | |
| Interest rate cap | |
| Foreign currency collars | Foreign currency collars | | Accounts payable, accrued expenses and other liabilities | | — | | | — | | | (1,311) | | | (15,122) | |
| Interest rate swaps | Interest rate swaps | | Accounts payable, accrued expenses and other liabilities | | — | | | — | | | (908) | | | (5,859) | |
| 19,485 | | | 3,489 | | | (2,219) | | | (20,981) | |
| | | | 15,098 | |
| Derivatives Not Designated as Hedging Instruments | Derivatives Not Designated as Hedging Instruments | | | | | | | | |
| Stock warrants | Stock warrants | | Other assets, net | | 4,600 | | | 5,800 | | | — | | | — | |
| 4,600 | | | 5,800 | | | — | | | — | |
| Stock warrants | |
| Stock warrants | |
| Foreign currency collars | |
| | | | — | |
| Total derivatives | Total derivatives | | $ | 24,085 | | | $ | 9,289 | | | $ | (2,219) | | | $ | (20,981) | |
The following tables present the impact of our derivative instruments in the consolidated financial statements (in thousands):
| | Amount of Gain (Loss) Recognized on Derivatives in Other Comprehensive (Loss) Income (a) |
| Years Ended December 31, |
| | Amount of Gain (Loss) Recognized on Derivatives in Other Comprehensive (Loss) Income (a) | | | | Amount of Gain (Loss) Recognized on Derivatives in Other Comprehensive (Loss) Income (a) |
| | Years Ended December 31, | | | | Years Ended December 31, |
| Derivatives in Cash Flow Hedging Relationships | Derivatives in Cash Flow Hedging Relationships | | 2021 | | 2020 | | 2019 | Derivatives in Cash Flow Hedging Relationships | | 2023 | | 2022 | | 2021 |
| Foreign currency collars | Foreign currency collars | | $ | 29,805 | | | $ | (24,818) | | | $ | 5,997 | |
| Interest rate swaps | Interest rate swaps | | 4,198 | | | (1,553) | | | (1,666) | |
| Interest rate caps | Interest rate caps | | 6 | | | 6 | | | 219 | |
| Foreign currency forward contracts | | — | | | (5,272) | | | (4,253) | |
Derivatives in Net Investment Hedging Relationships (b) | |
| Foreign currency collars | | — | | | 9 | | | 10 | |
| Foreign currency forward contracts | | — | | | — | | | 7 | |
| Total | Total | | $ | 34,009 | | | $ | (31,628) | | | $ | 314 | |
| | Amount of Gain (Loss) on Derivatives Reclassified from
Other Comprehensive (Loss) Income |
| | | | Amount of Gain (Loss) on Derivatives Reclassified from
Other Comprehensive (Loss) Income | | | | | | Amount of Gain (Loss) on Derivatives Reclassified from
Other Comprehensive (Loss) Income |
| Derivatives in Cash Flow Hedging Relationships | Derivatives in Cash Flow Hedging Relationships | | Location of Gain (Loss) Recognized in Income | | Years Ended December 31, | Derivatives in Cash Flow Hedging Relationships | | Location of Gain (Loss) Recognized in Income | | Years Ended December 31, |
| 2021 | | 2020 | | 2019 | | | 2023 | | 2022 | | 2021 |
| Foreign currency collars | |
Interest rate swaps and caps (c)(b) | Interest rate swaps and caps (c)(b) | | Interest expense | | $ | (932) | | | $ | (1,818) | | | $ | (2,256) | |
| Foreign currency collars | | Non-operating income | | 854 | | | 4,956 | | | 5,759 | |
| Foreign currency forward contracts | | Non-operating income | | — | | | 5,716 | | | 9,582 | |
| Total | Total | | $ | (78) | | | $ | 8,854 | | | $ | 13,085 | |
__________
(a)Excludes net losses of $2.0 million, net gains of $1.3 million, net losses of $0.3$3.6 million, and net lossesgains of $1.4$1.3 million recognized on unconsolidated jointly owned investments for the years ended December 31, 2021, 2020,2023, 2022, and 2019,2021, respectively.
| | | | | |
| W. P. Carey 2023 10-K– 98 |
(b)The changes in fair value of these contracts are reported in the foreign currency translation adjustment section of Other comprehensive income (loss).
Notes to Consolidated Financial Statements
(c)(b)Amount for the year ended December 31, 2021 excludes other comprehensive income totaling $3.1 million that was released from the consolidated financial statements (along with the related liability balances) upon the termination of interest rate swaps in connection with certain prepayments of non-recourse mortgage loans during the period (Note 1012).
| | | | | |
| W. P. Carey 2021 10-K– 92
|
Notes to Consolidated Financial Statements
Amounts reported in Other comprehensive income (loss) related to interest rate derivative contracts will be reclassified to Interest expense as interest is incurred on our variable-rate debt. Amounts reported in Other comprehensive income (loss) related to foreign currency derivative contracts will be reclassified to Non-operating income when the hedged foreign currency contracts are settled. As of December 31, 2021,2023, we estimate that an additional $0.5$0.9 million and $7.6$7.1 million will be reclassified as Interest expense and Non-operating income, respectively, during the next 12 months.
The following table presents the impact of our derivative instruments in the consolidated financial statements (in thousands):
| | Amount of Gain (Loss) on Derivatives Recognized in Income |
| Derivatives Not in Cash Flow Hedging Relationships | | Location of Gain (Loss) Recognized in Income | | Years Ended December 31, |
| 2021 | | 2020 | | 2019 |
| Foreign currency collars | | Non-operating income | | $ | 1,503 | | | $ | (2,477) | | | $ | 184 | |
| Stock warrants | | Other gains and (losses) | | (1,200) | | | 800 | | | (500) | |
| Interest rate swaps | | Other gains and (losses) | | — | | | 106 | | | (118) | |
| Foreign currency forward contracts | | Non-operating income | | — | | | (43) | | | 575 | |
| Interest rate swaps | | Interest expense | | — | | | — | | | 265 | |
| | | | Amount of Gain (Loss) on Derivatives Recognized in Income | | | | | | Amount of Gain (Loss) on Derivatives Recognized in Income |
| Derivatives in Cash Flow Hedging Relationships | | Derivatives in Cash Flow Hedging Relationships | | Location of Gain (Loss) Recognized in Income | | Years Ended December 31, |
| Derivatives in Cash Flow Hedging Relationships | | | | 2023 | | 2022 | | 2021 |
| Interest rate swaps | Interest rate swaps | | Interest expense | | 1,592 | | | 2,132 | | | (941) | |
| Interest rate caps | | Interest expense | | — | | | — | | | (220) | |
| Foreign currency forward contracts | | Other gains and (losses) | | — | | | — | | | (132) | |
| Foreign currency collars | |
| Derivatives Not in Cash Flow Hedging Relationships | |
| Stock warrants | |
| Stock warrants | |
| Stock warrants | |
| Foreign currency collars | Foreign currency collars | | Other gains and (losses) | | — | | | — | | | 7 | |
| Total | Total | | $ | 1,895 | | | $ | 518 | | | $ | (880) | |
See below for information on our purposes for entering into derivative instruments.
Interest Rate Swaps and Caps
We are exposed to the impact of interest rate changes primarily through our borrowing activities. To limit this exposure, we generally seek long-term debt financing on a fixed-rate basis. However, from time to time, we or our investment partners have obtained, and may in the future obtain, variable-rate (i) non-recourse mortgage loans and (ii) unsecured term loans (Note 12), and, as a result, we have entered into, and may continue to enter into, interest rate swap agreements or interest rate cap agreements with counterparties. Interest rate swaps, which effectively convert the variable-rate debt service obligations of a loan to a fixed rate, are agreements in which one party exchanges a stream of interest payments for a counterparty’s stream of cash flow over a specific period. The notional, or face, amount on which the swaps are based is not exchanged. Interest rate caps limit the effective borrowing rate of variable-rate debt obligations while allowing participants to share in downward shifts in interest rates. Our objective in using these derivatives is to limit our exposure to interest rate movements.
The interest rate swaps and caps that our consolidated subsidiaries had outstanding at December 31, 20212023 are summarized as follows (currency in thousands):
| | Interest Rate Derivatives | Interest Rate Derivatives | | Number of Instruments | | Notional
Amount | | Fair Value at
December 31, 2021 (a) | Interest Rate Derivatives | | Number of Instruments | | Notional
Amount | | Fair Value at
December 31, 2023 (a) |
| Designated as Cash Flow Hedging Instruments | Designated as Cash Flow Hedging Instruments | | | | | | |
| Interest rate swaps | Interest rate swaps | | 2 | | 47,199 | | EUR | | $ | (761) | |
| Interest rate swap | | 1 | | 16,343 | | USD | | (147) | |
| Interest rate cap | | 1 | | 10,764 | | EUR | | 1 | |
| $ | (907) | |
| Interest rate swaps | |
| Interest rate swaps | |
| Interest rate swaps | |
| | | | | | | $ | |
__________
(a)Fair value amounts are based on the exchange rate of the euro or British pound sterling at December 31, 2021,2023, as applicable.
| | | | | |
| W. P. Carey 20212023 10-K – 9399 |
Notes to Consolidated Financial Statements
Foreign Currency Collars
We are exposed to foreign currency exchange rate movements, primarily in the euro and, to a lesser extent, the British pound sterling the Norwegian krone, and certain other currencies. In order to hedge certain of our foreign currency cash flow exposures, we enter into foreign currency collars. A foreign currency collar consists of a written call option and a purchased put option to sell the foreign currency at a range of predetermined exchange rates. A foreign currency collar guarantees that the exchange rate of the currency will not fluctuate beyond the range of the options’ strike prices. Our foreign currency collars have maturities of 6259 months or less.
The following table presents the foreign currency derivative contracts we had outstanding at December 31, 20212023 (currency in thousands):
| | Foreign Currency Derivatives | Foreign Currency Derivatives | | Number of Instruments | | Notional
Amount | | Fair Value at December 31, 2021 | Foreign Currency Derivatives | | Number of Instruments | | Notional
Amount | | Fair Value at December 31, 2023 |
| Designated as Cash Flow Hedging Instruments | Designated as Cash Flow Hedging Instruments | | | | | | |
| Foreign currency collars | Foreign currency collars | | 88 | | 323,300 | | EUR | | $ | 17,762 | |
| Foreign currency collars | Foreign currency collars | | 91 | | 56,180 | | GBP | | 411 | |
| $ | 18,173 | |
| Foreign currency collars | |
| Foreign currency collars | |
| Not Designated as Cash Flow Hedging Instruments | |
| Foreign currency collars | |
| Foreign currency collars | |
| Foreign currency collars | |
| | | | | | | $ | |
Credit Risk-Related Contingent Features
We measure our credit exposure on a counterparty basis as the net positive aggregate estimated fair value of our derivatives, net of any collateral received. No collateral was received as of December 31, 2021.2023. At December 31, 2021,2023, our total credit exposure and the maximum exposure to any single counterparty was $18.4$10.3 million and $4.9$2.6 million, respectively.
Some of the agreements we have with our derivative counterparties contain cross-default provisions that could trigger a declaration of default on our derivative obligations if we default, or are capable of being declared in default, on certain of our indebtedness. At December 31, 2021,2023, we had not been declared in default on any of our derivative obligations. The estimated fair value of our derivatives in a net liability position was $2.2$5.9 million and $25.1$1.7 million at December 31, 20212023 and 2020,2022, respectively, which included accrued interest and any nonperformance risk adjustments. If we had breached any of these provisions at December 31, 20212023 or 2020,2022, we could have been required to settle our obligations under these agreements at their aggregate termination value of $2.3$6.0 million and $25.6$1.7 million, respectively.
Net Investment Hedges
BorrowingsCertain borrowings under our Senior Unsecured Notes, Unsecured Revolving Credit Facility, and Unsecured Term Loans (all as defined in Note 1012) denominated in euro, British pounds sterling, or Japanese yen are designated as, and are effective as, economic hedges of our net investments in foreign entities.
Exchange rate variations impact our financial results because the financial results of our foreign subsidiaries are translated to U.S. dollars each period, with the effect of exchange rate variations being recorded in Other comprehensive income (loss) as part of the cumulative foreign currency translation adjustment. As a result, changes in the value of our borrowings under our euro-denominated senior notes and changes in the value of our euro, Japanese yen, and British pound sterling borrowings under our Senior Unsecured Credit Facility, related to changes in the spot rates, will be reported in the same manner as foreign currency translation adjustments, which are recorded in Other comprehensive income (loss) as part of the cumulative foreign currency translation adjustment. Such (losses) gains (losses) related to non-derivative net investment hedges were $255.9$(121.8) million, $(280.4)$214.3 million, and $33.4$255.9 million for the years ended December 31, 2021, 2020,2023, 2022, and 2019,2021, respectively.
| | | | | |
| W. P. Carey 20212023 10-K – 94100 |
Notes to Consolidated Financial Statements
Note 10.12. Debt
Term Loan Agreement
On April 24, 2023, we entered into a €500.0 million unsecured term loan maturing on April 24, 2026 (our “Unsecured Term Loan due 2026”), comprised of (i) a €300.0 million term loan (our “Term Loan due 2026”) and (ii) a €200.0 million delayed draw term loan (our “Delayed Draw Term Loan due 2026”), which was drawn in full at closing.
The Unsecured Term Loan due 2026 borrowing rate pursuant to the credit agreement is 85 basis points over EURIBOR, based on our credit ratings of BBB+ and Baa1. In conjunction with the closing of the Unsecured Term Loan due 2026, we executed variable-to-fixed interest rate swaps that fix the total per annum interest rate at 4.34% through the end of 2024, in the absence of any change to our credit ratings from their current levels of BBB+ and Baa1 (Note 11). The Unsecured Term Loan due 2026 was incorporated into the Senior Unsecured Credit Facility in December 2023.
Senior Unsecured Credit Facility
On February 20, 2020,In January 2023, we entered into a Third Amendment to the Fourth Amendedcredit agreement to transition from LIBOR to SOFR (Note 2).
On December 14, 2023, we amended and Restatedrestated our multi-currency Senior Unsecured Credit Facility which hasto (i) increase the capacity of approximately $2.1 billion, comprised of (i) a $1.8 billionour unsecured revolving credit facility for our working capital needs, acquisitions, and other general corporate purposes (our “Unsecured Revolving Credit Facility”), from $1.8 billion to $2.0 billion and extend the maturity of this facility by four years to February 14, 2029, and (ii) a £150.0refinance our £270.0 million term loan (our “Term Loan”“GBP Term Loan due 2028”), and (iii) a €96.5our €215.0 million delayed draw term loan (our “Delayed Draw“EUR Term Loan”Loan due 2028”). by extending the maturity date of each term loan by three years to February 14, 2028, with an option to extend each of these term loans by up to an additional year, subject to certain customary conditions. We refer to our Term Loan and Delayed Draw Term Loanthese term loans collectively as the “Unsecured Term Loans”Loans due 2028.” We refer to our Unsecured Term Loan due 2026 and the entire facilityUnsecured Term Loans due 2028 collectively as our “Unsecured Term Loans.” We refer to our Unsecured Revolving Credit Facility and our Unsecured Term Loans collectively as our “Senior Unsecured Credit Facility.” In December 2021, the Senior Unsecured Credit Facility was amended to transition certain LIBOR-based rates that were discontinued after December 31, 2021 to successor alternative reference rates. The updated reference rates are included in the Senior Unsecured Credit Facility table below.
As of December 31, 2021, this reference rate transition impacted only our Senior Unsecured Credit Facility.
The Senior Unsecured Credit Facility includes2023, the ability to borrow in certain currencies other than U.S. dollars and has a maturity date of February 20, 2025. The aggregate principal amount (of revolving and term loans) available under the Senior Unsecured Credit Facility maywas able to be increased up to an amount not to exceed the U.S. dollar equivalent of $2.75$4.35 billion, subject to the conditions to increase set forth in our credit agreement.
As of both December 31, 2021 and 2020, we have drawn down our Unsecured Term Loans in full.
At December 31, 2021,2023, our Unsecured Revolving Credit Facility had available capacity of approximately $1.4$1.6 billion (net of amounts reserved for standby letters of credit totaling $1.2$6.5 million). We incur an annual facility fee of 0.20%0.15% of the total commitment on our Unsecured Revolving Credit Facility based on our credit ratings of BBB+ and Baa1, which is included within Interest expense in our consolidated statements of income.
The following table presents a summary of our Senior Unsecured Credit Facility (dollars in thousands):
| | | Interest Rate at December 31, 2021 (a) | | Maturity Date at December 31, 2021 | | Principal Outstanding Balance at
December 31, |
| Senior Unsecured Credit Facility | Senior Unsecured Credit Facility | | 2021 | | 2020 | Senior Unsecured Credit Facility | | Interest Rate at December 31, 2023 (a) | | Maturity Date at December 31, 2023 | | Principal Outstanding Balance at
December 31, |
| Unsecured Term Loans: | | | | | | | | |
Term Loan — borrowing in British pounds sterling (b) (c) (d) | | SONIA + 0.9826% | | 2/20/2025 | | $ | 202,183 | | | $ | 204,737 | |
Delayed Draw Term Loan — borrowing in euros (e) | | EURIBOR + 0.95% | | 2/20/2025 | | 109,296 | | | 118,415 | |
| 311,479 | | | 323,152 | |
| Senior Unsecured Credit Facility | | Senior Unsecured Credit Facility | | | | 2023 | | 2022 |
| Unsecured Term Loan due 2026 — borrowing in euros (c) | |
Unsecured Term Loan due 2026 — borrowing in euros (c) | |
Unsecured Term Loan due 2026 — borrowing in euros (c) | |
GBP Term Loan due 2028 — borrowing in British pounds sterling (d) | |
EUR Term Loan due 2028 — borrowing in euros (e) | |
| | | | | | 1,133,381 | |
| Unsecured Revolving Credit Facility: | Unsecured Revolving Credit Facility: | | | | |
Borrowing in euros (e) | Borrowing in euros (e) | | EURIBOR + 0.85% | | 2/20/2025 | | 205,001 | | | 58,901 | |
Borrowing in British pounds sterling (c) (d) | | SONIA + 0.8826% | | 2/20/2025 | | 184,660 | | | — | |
Borrowing in euros (e) | |
Borrowing in euros (e) | |
Borrowing in Japanese yen (f) | Borrowing in Japanese yen (f) | | TIBOR + 0.85% | | 2/20/2025 | | 20,935 | | | 23,380 | |
| 410,596 | | | 82,281 | |
| $ | 722,075 | | | $ | 405,433 | |
| | | | | | 403,785 | |
| | | | | | $ | |
__________
| | | | | |
| W. P. Carey 2023 10-K– 101 |
Notes to Consolidated Financial Statements
(a)The applicable interest rate at December 31, 20212023 was based on the credit rating for our Senior Unsecured Notes of BBB/Baa2.BBB+/Baa1.
(b)Balance excludesBalances exclude unamortized discount of $0.9$7.4 million and $1.2$1.5 million at December 31, 20212023 and 2020, respectively.2022, respectively, and unamortized deferred financing costs of $0.4 million at December 31, 2023.
(c)Interest rate is subject to variable-to-fixed interest rate swaps that fix the total per annum interest rate at 4.34% through December 31, 2024.
(d)SONIA means Sterling Overnight Index Average.
(d)Interest rate includes both a spread adjustment to the base rate (in connection with the reference rate transition discussed in Note 2) and a credit spread.(e)EURIBOR means Euro Interbank Offered Rate.
(f)TIBOR means Tokyo Interbank Offered Rate.
| | | | | |
| W. P. Carey 2021 10-K– 95
|
Notes to Consolidated Financial Statements
Senior Unsecured Notes
As set forth in the table below, we have euro and U.S. dollar-denominated senior unsecured notes outstanding with an aggregate principal balance outstanding of $5.8$6.1 billion at December 31, 20212023 (the “Senior Unsecured Notes”).
On February 25, 2021, we completed an underwritten public offering of $425.0 million of 2.250% Senior Notes due 2033, at a price of 98.722% of par value. These 2.250% Senior Notes due 2033 have a 12.1-year term and are scheduled to mature on April 1, 2033. Proceeds from this offering were used to prepay non-recourse mortgage loans totaling $427.5 million (including prepayment penalties), as described below.
On March 8, 2021, we completed an underwritten public offering of €525.0 million of 0.950% Senior Notes due 2030, at a price of 99.335% of par value, issued by our wholly owned finance subsidiary, WPC Eurobond B.V., and fully and unconditionally guaranteed by us. These 0.950% Senior Notes due 2030 have a 9.2-year term and are scheduled to mature on June 1, 2030. Proceeds from this offering were used to redeemWe redeemed the €500.0 million of 2.0% Senior Notes due 2023 in March 2021. In connection with this redemption, we paid a “make-whole” amount of $26.2 million (based on the exchange rate of the euro as of the date of redemption) and recognized a loss on extinguishment of $28.2 million, which is included within Other gains and (losses) on our consolidated statements of income.
On October 15, 2021, we completed an underwritten public offering of $350.0 million of 2.450% Senior Notes due 2032, at a price of 99.048% of par value, in our inaugural green bond offering. These 2.450% Senior Notes due 2032 have a 10.3-year term and are scheduled to mature on February 1, 2032.income for the year ended December 31, 2021.
Interest on the Senior Unsecured Notes is payable annually or semi-annually in arrears for our euro-denominated senior notes and semi-annually for U.S. dollar-denominated senior notes.arrears. The Senior Unsecured Notes can be redeemed at par within three months of their respective maturities, or we can call the notes at any time for the principal, accrued interest, and a make-whole amount based upon the applicable government bond yield plus 20 to 35 basis points. The following table presents a summary of our Senior Unsecured Notes outstanding at December 31, 20212023 (currency in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Principal Amount | | Coupon Rate | | Maturity Date | | Principal Outstanding Balance at December 31, |
Senior Unsecured Notes, net (a) | | Issue Date | | | | | 2021 | | 2020 |
| 2.0% Senior Notes due 2023 | | 1/21/2015 | | € | 500,000 | | | 2.0 | % | | Redeemed | | $ | — | | | $ | 613,550 | |
| 4.6% Senior Notes due 2024 | | 3/14/2014 | | $ | 500,000 | | | 4.6 | % | | 4/1/2024 | | 500,000 | | | 500,000 | |
| 2.25% Senior Notes due 2024 | | 1/19/2017 | | € | 500,000 | | | 2.25 | % | | 7/19/2024 | | 566,300 | | | 613,550 | |
| 4.0% Senior Notes due 2025 | | 1/26/2015 | | $ | 450,000 | | | 4.0 | % | | 2/1/2025 | | 450,000 | | | 450,000 | |
| 2.250% Senior Notes due 2026 | | 10/9/2018 | | € | 500,000 | | | 2.250 | % | | 4/9/2026 | | 566,300 | | | 613,550 | |
| 4.25% Senior Notes due 2026 | | 9/12/2016 | | $ | 350,000 | | | 4.25 | % | | 10/1/2026 | | 350,000 | | | 350,000 | |
| 2.125% Senior Notes due 2027 | | 3/6/2018 | | € | 500,000 | | | 2.125 | % | | 4/15/2027 | | 566,300 | | | 613,550 | |
| 1.350% Senior Notes due 2028 | | 9/19/2019 | | € | 500,000 | | | 1.350 | % | | 4/15/2028 | | 566,300 | | | 613,550 | |
| 3.850% Senior Notes due 2029 | | 6/14/2019 | | $ | 325,000 | | | 3.850 | % | | 7/15/2029 | | 325,000 | | | 325,000 | |
| 0.950% Senior Notes due 2030 | | 3/8/2021 | | € | 525,000 | | | 0.950 | % | | 6/1/2030 | | 594,615 | | | — | |
| 2.400% Senior Notes due 2031 | | 10/14/2020 | | $ | 500,000 | | | 2.400 | % | | 2/1/2031 | | 500,000 | | | 500,000 | |
| 2.450% Senior Notes due 2032 | | 10/15/2021 | | $ | 350,000 | | | 2.450 | % | | 2/1/2032 | | 350,000 | | | — | |
| 2.250% Senior Notes due 2033 | | 2/25/2021 | | $ | 425,000 | | | 2.250 | % | | 4/1/2033 | | 425,000 | | | — | |
| | | | | | | | | | $ | 5,759,815 | | | $ | 5,192,750 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Principal Amount | | Coupon Rate | | Maturity Date | | Principal Outstanding Balance at December 31, |
Senior Unsecured Notes, net (a) | | Issue Date | | | | | 2023 | | 2022 |
| 4.6% Senior Notes due 2024 | | 3/14/2014 | | $ | 500,000 | | | 4.6 | % | | 4/1/2024 | | $ | 500,000 | | | $ | 500,000 | |
| 2.25% Senior Notes due 2024 | | 1/19/2017 | | € | 500,000 | | | 2.25 | % | | 7/19/2024 | | 552,500 | | | 533,300 | |
| 4.0% Senior Notes due 2025 | | 1/26/2015 | | $ | 450,000 | | | 4.0 | % | | 2/1/2025 | | 450,000 | | | 450,000 | |
| 2.25% Senior Notes due 2026 | | 10/9/2018 | | € | 500,000 | | | 2.25 | % | | 4/9/2026 | | 552,500 | | | 533,300 | |
| 4.25% Senior Notes due 2026 | | 9/12/2016 | | $ | 350,000 | | | 4.25 | % | | 10/1/2026 | | 350,000 | | | 350,000 | |
| 2.125% Senior Notes due 2027 | | 3/6/2018 | | € | 500,000 | | | 2.125 | % | | 4/15/2027 | | 552,500 | | | 533,300 | |
| 1.35% Senior Notes due 2028 | | 9/19/2019 | | € | 500,000 | | | 1.35 | % | | 4/15/2028 | | 552,500 | | | 533,300 | |
| 3.85% Senior Notes due 2029 | | 6/14/2019 | | $ | 325,000 | | | 3.85 | % | | 7/15/2029 | | 325,000 | | | 325,000 | |
| 3.41% Senior Notes due 2029 | | 9/28/2022 | | € | 150,000 | | | 3.41 | % | | 9/28/2029 | | 165,750 | | | 159,990 | |
| 0.95% Senior Notes due 2030 | | 3/8/2021 | | € | 525,000 | | | 0.95 | % | | 6/1/2030 | | 580,125 | | | 559,965 | |
| 2.4% Senior Notes due 2031 | | 10/14/2020 | | $ | 500,000 | | | 2.4 | % | | 2/1/2031 | | 500,000 | | | 500,000 | |
| 2.45% Senior Notes due 2032 | | 10/15/2021 | | $ | 350,000 | | | 2.45 | % | | 2/1/2032 | | 350,000 | | | 350,000 | |
| 3.7% Senior Notes due 2032 | | 9/28/2022 | | € | 200,000 | | | 3.7 | % | | 9/28/2032 | | 221,000 | | | 213,320 | |
| 2.25% Senior Notes due 2033 | | 2/25/2021 | | $ | 425,000 | | | 2.25 | % | | 4/1/2033 | | 425,000 | | | 425,000 | |
| | | | | | | | | | $ | 6,076,875 | | | $ | 5,966,475 | |
__________
(a)Aggregate balance excludes unamortized deferred financing costs totaling $28.7$21.1 million and $23.8$25.9 million, and unamortized discount totaling $29.2$20.1 million and $22.5$24.1 million at December 31, 20212023 and 2020,2022, respectively.
In connection with the offering of the 2.250% Senior Notes due 2033 in February 2021, the 0.950% Senior Notes due 2030 in March 2021, and the 2.450% Senior Notes due 2032 in October 2021, we incurred financing costs totaling $11.3 million during the year ended December 31, 2021, which are included in the Senior Unsecured Notes, net in the consolidated financial statements and are being amortized to Interest expense over the term of their respective Senior Notes.
| | | | | |
| W. P. Carey 2021 10-K– 96
|
Notes to Consolidated Financial Statements
Covenants
The credit agreements for our Senior Unsecured Credit Agreement,Facility, each of the Senior Unsecured Notes, and certain of our non-recourse mortgage loan agreements include customary financial maintenance covenants that require us to maintain certain ratios and benchmarks at the end of each quarter. The credit agreement for our Senior Unsecured Credit AgreementFacility also contains various customary affirmative and negative covenants applicable to us and our subsidiaries, subject to materiality and other qualifications, baskets, and exceptions as outlined in the Credit Agreement.credit agreement. We were in compliance with all of these covenants at December 31, 2021.2023.
| | | | | |
| W. P. Carey 2023 10-K– 102 |
Notes to Consolidated Financial Statements
We may make unlimited Restricted Payments (as defined in the credit agreement for our Senior Unsecured Credit Agreement)Facility), as long as no non-payment default or financial covenant default has occurred before, or would on a pro forma basis occur as a result of, the Restricted Payment. In addition, we may make Restricted Payments in an amount required to (i) maintain our REIT status and (ii) as a result of that status, not pay federal or state income or excise tax, as long as the loans under the Credit Agreement have not been accelerated and no bankruptcy or event of default has occurred.
Obligations under the Unsecured Revolving Credit Facility may be declared immediately due and payable upon the occurrence of certain events of default as defined in the credit agreement for our Senior Unsecured Credit Agreement,Facility, including failure to pay any principal when due and payable, failure to pay interest within five business days after becoming due, failure to comply with any covenant, representation or condition of any loan document, any change of control, cross-defaults, and certain other events as set forth in the Credit Agreement,credit agreement, with grace periods in some cases.
Non-Recourse Mortgages
Non-recourse mortgages consist of mortgage notes payable, which are collateralized by the assignment of real estate properties. For a list of our encumbered properties, please see Schedule III — Real Estate and Accumulated Depreciation. At December 31, 2021,2023, the weighted-average interest ratesrate for our fixed-ratetotal non-recourse mortgage notes payable was 4.6% (fixed-rate and variable-rate non-recourse mortgage notes payable were 4.8%4.5% and 2.0%5.6%, respectively,respectively), with maturity dates ranging from JuneJanuary 2024 to April 2039.
See Note 3 for a description of non-recourse mortgages derecognized in connection with the Spin-Off.
CPA:18 Merger
In connection with the CPA:18 Merger on August 1, 2022 (Note 4), we assumed property-level debt comprised of non-recourse mortgage loans with fair values totaling $900.2 million and recorded an aggregate fair market value net discount of $13.1 million. The fair market value net discount will be amortized to September 2031.interest expense over the remaining lives of the related loans. These non-recourse mortgage loans had a weighted-average annual interest rate of 5.1% on the merger date.
Repayments During 20212023
During the year ended December 31, 2021,2023, we (i) prepaid non-recourse mortgage loans totaling $745.1 million, and (ii) repaid non-recourse mortgage loans at or close to maturity with an aggregate principal balance of approximately $32.7$268.1 million, and (ii) prepaid non-recourse mortgage loans totaling $99.8 million. We recognized an aggregate net loss on extinguishment of debt of $47.2$3.5 million on these repayments, primarily comprised of prepayment penalties totaling $45.2 million, which is included within Other gains and (losses) on our consolidated statements of income. The weighted-average interest rate for these non-recourse mortgage loans on their respective dates of repayment was 4.8%4.9%.
Repayments During 20202022
During the year ended December 31, 2020,2022, we (i) repaid non-recourse mortgage loans at or close to maturity with an aggregate principal balance of approximately $225.9$104.7 million and (ii) prepaid non-recourse mortgage loans totaling $68.5$10.4 million. We recognized an aggregate net loss on extinguishment of debt of $1.3 million on these repayments, which is included within Other gains and (losses) on our consolidated statements of income. The weighted-average interest rate for these non-recourse mortgage loans on their respective dates of repayment was 5.1%4.4%. Amounts are based on the exchange rate of the related foreign currency as of the date of repayment, as applicable.
Interest Paid
For the years ended December 31, 2021, 2020,2023, 2022, and 2019,2021, interest paid was $190.8$269.7 million, $190.6$191.0 million, and $208.4$190.8 million, respectively.
Foreign Currency Exchange Rate Impact
During the year ended December 31, 2021,2023, the U.S. dollar strengthenedweakened against the euro, resulting in an aggregate decreaseincrease of $274.8$161.4 million in the aggregate carrying values of our Non-recourse mortgages, net, Senior Unsecured Credit Facility, and Senior Unsecured Notes, net from December 31, 20202022 to December 31, 2021.2023.
| | | | | |
| W. P. Carey 20212023 10-K – 97103 |
Notes to Consolidated Financial Statements
Scheduled Debt Principal Payments
Scheduled debt principal payments as of December 31, 20212023 are as follows (in thousands):
| | | | | | | | |
| Years Ending December 31, | | Total (a) |
| 2022 | | $ | 45,787 | |
| 2023 | | 190,921 | |
| 2024 | | 1,105,454 | |
| 2025 | | 1,231,816 | |
| 2026 | | 948,371 | |
| Thereafter through 2033 | | 3,328,988 | |
| Total principal payments | | 6,851,337 | |
Unamortized discount, net (b) | | (30,911) | |
| Unamortized deferred financing costs | | (28,810) | |
| Total | | $ | 6,791,616 | |
__________ | | | | | | | | |
| Years Ending December 31, | | Total |
| 2024 | | $ | 1,278,749 | |
| 2025 | | 707,259 | |
| 2026 | | 1,547,876 | |
| 2027 | | 553,168 | |
| 2028 | | 1,134,088 | |
| Thereafter through 2039 | | 2,976,345 | |
| Total principal payments | | 8,197,485 | |
| Unamortized discount, net | | (31,817) | |
| Unamortized deferred financing costs | | (21,486) | |
| Total | | $ | 8,144,182 | |
(a)
Certain amounts are based on the applicable foreign currency exchange rate at December 31, 2021.
(b)Represents the unamortized discount on the Senior Unsecured Notes of $29.2 million in aggregate, unamortized discount, net, of $0.8 million in aggregate primarily resulting from the assumption of property-level debt in connection with business combinations, and unamortized discount of $0.9 million on the Term Loan.2023.
Note 11.13. Commitments and Contingencies
At December 31, 2021,2023, we were not involved in any material litigation. Various claims and lawsuits arising in the normal course of business are pending against us. The results of these proceedings are not expected to have a material adverse effect on our consolidated financial position or results of operations.
Note 12.14. Equity
Common Stock
Dividends paid to stockholders consist of ordinary income, capital gains, return of capital or a combination thereof for income tax purposes. Our dividends per share are summarized as follows:
| | | | Dividends Paid | | Dividends Paid |
| During the Years Ended December 31, |
| During the Years Ended December 31, | | | During the Years Ended December 31, |
| | | 2021 | | 2020 | | 2019 | | 2023 | | 2022 | | 2021 |
| Ordinary income | Ordinary income | $ | 3.3300 | | | $ | 3.3112 | | | $ | 3.1939 | |
| Return of capital | Return of capital | 0.5407 | | | — | | | 0.9194 | |
| Capital gains | Capital gains | 0.3253 | | | 0.8528 | | | 0.0187 | |
Total dividends paid (a) | Total dividends paid (a) | $ | 4.1960 | | | $ | 4.1640 | | | $ | 4.1320 | |
__________
(a)A portionAmount for the year ended December 31, 2023 includes a distribution of dividends paid during 2019 has been applied$0.7627 per share representing the taxable distribution of shares of NLOP that occurred in conjunction with the Spin-Off on November 1, 2023 (Note 3). The per share distribution rate is based on the exchange ratio of one share of NLOP distributed for every 15 shares of WPC held and the fair market value of NLOP shares distributed in the Spin-Off, which was determined to 2018 for income tax purposes.be $11.44 per NLOP share, using a three-day volume weighted average price.
During the fourth quarter of 2021,2023, our Board declared a quarterly dividend of $1.055$0.860 per share, which was paid on January 14, 202216, 2024 to stockholders of record as of December 31, 2021.29, 2023.
| | | | | |
| W. P. Carey 20212023 10-K – 98104 |
Notes to Consolidated Financial Statements
Earnings Per Share
Under current authoritative guidance for determining earnings per share, all nonvested share-based payment awards that contain non-forfeitable rights to dividends are considered to be participating securities and therefore are included in the computation of earnings per share under the two-class method. The two-class method is an earnings allocation formula that determines earnings per share for each class of common shares and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings. We apply the two-class method of computing earnings per share because during prior years, certain of our nonvested RSUs contained rights to receive non-forfeitable dividend equivalents or dividends. The calculation of earnings per share below excludes the income attributable to the nonvested participating RSUs from the numerator and such nonvested shares in the denominator. The following table summarizes basic and diluted earnings (dollars in thousands):
| | | | Years Ended December 31, | | Years Ended December 31, |
| | | 2021 | | 2020 | | 2019 | | 2023 | | 2022 | | 2021 |
| Net income attributable to W. P. Carey | $ | 409,988 | | | $ | 455,359 | | | $ | 305,243 | |
| Net income attributable to nonvested participating RSUs | — | | | — | | | (77) | |
| | Net income – basic and diluted | |
| | Net income – basic and diluted | |
| | Net income – basic and diluted | Net income – basic and diluted | $ | 409,988 | | | $ | 455,359 | | | $ | 305,166 | |
| | Weighted-average shares outstanding – basic | Weighted-average shares outstanding – basic | 182,486,476 | | | 174,504,406 | | | 171,001,430 | |
| Weighted-average shares outstanding – basic | |
| Weighted-average shares outstanding – basic | |
| Effect of dilutive securities | Effect of dilutive securities | 640,622 | | | 335,022 | | | 297,984 | |
| Weighted-average shares outstanding – diluted | Weighted-average shares outstanding – diluted | 183,127,098 | | | 174,839,428 | | | 171,299,414 | |
For the years ended December 31, 2021, 2020,2023, 2022, and 2019, there were no2021, potentially dilutive securities excluded from the computation of diluted earnings per share.share were insignificant.
At-The-Market Equity OfferingAcquisitions of Noncontrolling Interests
On May 30, 2023, we acquired the remaining 3% interest in an international jointly owned investment (which we already consolidated) from the noncontrolling interest holders for nominal consideration, bringing our ownership interest to 100%. No gain or loss was recognized on the transaction. We recorded an adjustment of approximately $1.2 million to Additional paid-in capital in our consolidated statements of equity for the year ended December 31, 2023 related to the difference between the consideration transferred and the carrying value of the noncontrolling interest related to this investment.
On July 18, 2023, we acquired the remaining 10% interest in a domestic jointly owned investment (which we already consolidated) from the noncontrolling interest holders for $2.4 million, bringing our ownership interest to 100%. No gain or loss was recognized on the transaction. We recorded an adjustment of approximately $2.5 million to Additional paid-in capital in our consolidated statements of equity for the three and year ended December 31, 2023 related to the difference between the consideration transferred and the carrying value of the noncontrolling interest related to this investment.
ATM Program
On August 9, 2019,May 2, 2022, we filed a prospectus supplement with the SEC, pursuant to which we may offer and sell shares of our common stock from time to time, up to an aggregate gross sales price of $750.0 million, throughestablished a continuous “at-the-market” offering program (“ATM Program”) with a syndicate of banks. The related equity sales agreement contemplates that, in additionbanks, pursuant to issuingwhich shares of our common stock having an aggregate gross sales price of up to $1.0 billion may be sold (i) directly through or to the banks acting as sales agents or as principal for their own accounts we may also enter into separate forward sale agreements withor (ii) through or to participating banks or their affiliates acting as forward purchasers.sellers on behalf of any forward purchasers pursuant to a forward sale agreement (our “ATM Forwards”). Effective as of that date, we terminated a prior ATM Program that was established on February 27,August 9, 2019. Previously, on February 27, 2019, we also terminated an earlier ATM Program that was established on March 1, 2017.
DuringThe following table sets forth certain information regarding the year ended December 31, 2021, we issued 4,690,073issuance of shares of our common stock under our currentprior ATM Program atduring the periods presented (net proceeds in thousands):
| | | | | | | | | | | | | | | | | |
| Years Ended December 31, |
| 2023 | | 2022 | | 2021 |
| Shares of common stock issued | — | | | 2,740,295 | | | 4,690,073 | |
| Weighted-average price per share | $ | — | | | $ | 80.79 | | | $ | 73.42 | |
| Net proceeds | $ | — | | | $ | 218,081 | | | $ | 339,968 | |
Forward Equity
We settled the ATM Forwards in full prior to the maturity date of each ATM Forward via physical delivery of the outstanding shares of common stock in exchange for cash proceeds. The forward sale price that we received upon physical settlement of the ATM Forwards was (i) subject to adjustment on a
weighted-average pricedaily basis based on a floating interest rate factor equal to a specified daily rate less a spread (i.e., if the specified daily rate is less than the spread on any day, the interest rate factor will result in a daily reduction of
$73.42 per share for net proceeds of $340.0 million. During the
year ended December 31, 2020, we issued 2,500applicable forward sale price) and (ii) decreased based on amounts related to expected dividends on shares of our common stock
under our currentduring the term of the ATM
Program at a weighted-average price of $72.05 per share for net proceeds of $0.2 million. During the year ended December 31, 2019, we issued 6,672,412 shares of our common stock under our current and former ATM Programs at a weighted-average price of $79.70 per share for net proceeds of $523.3 million. As of December 31, 2021, $272.1 million remained available for issuance under our current ATM Program. See Note 17, Subsequent Events for issuances under our current ATM Program subsequent to December 31, 2021 and through the date of this Report.Forwards.
| | | | | |
| W. P. Carey 2023 10-K– 105 |
Notes to Consolidated Financial Statements
We determined that our ATM Forwards met the criteria for equity classification and were therefore exempt from derivative accounting. We recorded the ATM Forwards at fair value at inception, which we determined to be zero. Subsequent changes to fair value are not required under equity classification.
From time to time, we have entered into underwriting agreements and forward sale agreements with syndicates of banks acting as underwriters, forward sellers, and/or forward purchasers in connection with public offerings of our common stock.stock (the “Equity Forwards”). At the closing of these transactions, the offered shares were borrowed from third parties by the banks acting as forward purchasers and sold to the underwriters for distribution at the respective gross offering prices. As a result of this forward construct, we did not receive any proceeds from the sale of shares at the closing of each offering, but rather at later settlement dates. We have determined that the forward sale agreements meet the criteria for equity classification and are therefore exempt from derivative accounting. We recorded the forward sale agreements at fair value at inception, which we determined to be zero. Subsequent changes to fair value are not required under equity classification.
| | | | | |
| W. P. Carey 2021 10-K– 99
|
Notes to Consolidated Financial Statements
We refer tosettled all of our three forward equity offerings presented below as the June 2020 Equity Forwards June 2021 Equity Forwards, and August 2021 Equity Forwards (collectively, the “Equity Forwards”) (gross offering proceeds at closing in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Agreement Date (a) | | Shares Offered (b) | | Gross Offering Price | | Gross Offering Proceeds at Closing | | Outstanding Shares as of December 31, 2021 |
June 2020 Equity Forwards (c) | 6/17/2020 | | 5,462,500 | | $ | 70.00 | | | $ | 382,375 | | | — |
June 2021 Equity Forwards (c) | 6/7/2021 | | 6,037,500 | | 75.30 | | | 454,624 | | | — |
| August 2021 Equity Forwards | 8/9/2021 | | 5,175,000 | | 78.00 | | | 403,650 | | | 3,925,000 |
| | | | | | | | | 3,925,000 |
__________
(a)We expect to settle the Equity Forwards in full within 18 months of the respective agreement dates via physical delivery of the outstanding shares of common stock in exchange for cash proceeds, although we may elect cash settlement or net share settlement for all or a portion of our obligations under the Equity Forwards, subject to certain conditions.
(b)Includes 712,500, 787,500, and 675,000 shares of common stock purchased by certain underwriters in connection with the June 2020 Equity Forwards, June 2021 Equity Forwards, and August 2021 Equity Forwards, respectively, upon the exercise of 30-day options to purchase additional shares.
(c)All remaining outstanding shares were settled during the year ended December 31, 2021.reporting period.
The following table sets forth certain information regarding the settlement of our Equity Forwardsforward equity during the periods presented (dollars in thousands):
| | Years Ended December 31, |
| 2021 | | 2020 |
| Years Ended December 31, | | | Years Ended December 31, |
| 2023 | | | 2023 | | 2022 | | 2021 |
| Shares of common stock delivered | Shares of common stock delivered | 9,798,209 | | | 2,951,791 | |
| Net proceeds | Net proceeds | $ | 697,044 | | | $ | 199,716 | |
| | | | | |
| W. P. Carey 20212023 10-K – 100106 |
Notes to Consolidated Financial Statements
Reclassifications Out of Accumulated Other Comprehensive Loss
The following tables present a reconciliation of changes in Accumulated other comprehensive loss by component for the periods presented (in thousands):
| | Gains and (Losses) on Derivative Instruments | | Foreign Currency Translation Adjustments | | Gains and (Losses) on Investments | | Total |
| Balance at January 1, 2019 | $ | 14,102 | | | $ | (269,091) | | | $ | (7) | | | $ | (254,996) | |
| Gains and (Losses) on Derivative Instruments | | | Gains and (Losses) on Derivative Instruments | | Foreign Currency Translation Adjustments | | Gains and (Losses) on Investments | | Total |
| Balance at January 1, 2021 | |
| Other comprehensive income before reclassifications | Other comprehensive income before reclassifications | 12,031 | | | 376 | | | 7 | | | 12,414 | |
| Amounts reclassified from accumulated other comprehensive loss to: | Amounts reclassified from accumulated other comprehensive loss to: | |
| Non-operating income | (15,341) | | | — | | | — | | | (15,341) | |
| Interest expense | Interest expense | 2,256 | | | — | | | — | | | 2,256 | |
| Total | (13,085) | | | — | | | — | | | (13,085) | |
| Net current period other comprehensive loss | (1,054) | | | 376 | | | 7 | | | (671) | |
| Balance at December 31, 2019 | 13,048 | | | (268,715) | | | — | | | (255,667) | |
| Other comprehensive income before reclassifications | (23,124) | | | 47,746 | | | — | | | 24,622 | |
| Amounts reclassified from accumulated other comprehensive loss to: | |
| Non-operating income | (10,672) | | | — | | | — | | | (10,672) | |
| Interest expense | Interest expense | 1,818 | | | — | | | — | | | 1,818 | |
| Total | (8,854) | | | — | | | — | | | (8,854) | |
| Net current period other comprehensive income | (31,978) | | | 47,746 | | | — | | | 15,768 | |
| Net current period other comprehensive income attributable to noncontrolling interests | (7) | | | — | | | — | | | (7) | |
| Balance at December 31, 2020 | (18,937) | | | (220,969) | | | — | | | (239,906) | |
| Other comprehensive income before reclassifications | 35,227 | | | (35,736) | | | 18,688 | | | 18,179 | |
| Amounts reclassified from accumulated other comprehensive loss to: | |
| Interest expense | Interest expense | 932 | | | — | | | — | | | 932 | |
| Non-operating income | Non-operating income | (854) | | | — | | | — | | | (854) | |
| Total | Total | 78 | | | — | | | — | | | 78 | |
| Net current period other comprehensive income | Net current period other comprehensive income | 35,305 | | | (35,736) | | | 18,688 | | | 18,257 | |
| Net current period other comprehensive income attributable to noncontrolling interests | Net current period other comprehensive income attributable to noncontrolling interests | (21) | | | — | | | — | | | (21) | |
| Balance at December 31, 2021 | Balance at December 31, 2021 | $ | 16,347 | | | $ | (256,705) | | | $ | 18,688 | | | $ | (221,670) | |
| Other comprehensive loss before reclassifications | |
| Amounts reclassified from accumulated other comprehensive loss to: | |
| Non-operating income | |
| Non-operating income | |
| Non-operating income | |
| Interest expense | |
| |
| Total | |
| Net current period other comprehensive loss | |
| Net current period other comprehensive income attributable to noncontrolling interests | |
| Balance at December 31, 2022 | |
| Other comprehensive income before reclassifications | |
Other comprehensive income derecognized in connection with the Spin-Off (Note 3) | |
| Amounts reclassified from accumulated other comprehensive loss to: | |
| Non-operating income | |
| Non-operating income | |
| Non-operating income | |
| Interest expense | |
| Total | |
| Net current period other comprehensive income | |
| Net current period other comprehensive income attributable to noncontrolling interests | |
| Balance at December 31, 2023 | |
See Note 911 for additional information on our derivatives activity recognized within Other comprehensive income (loss) for the periods presented.
| | | | | |
| W. P. Carey 2023 10-K– 107 |
Notes to Consolidated Financial Statements
Note 13.15. Stock-Based and Other Compensation
Stock-Based Compensation
At December 31, 2021,2023, we maintained severalthe stock-based compensation plans as described below. The total compensation expense (net of forfeitures) for awards issued under these plans was $24.9$34.5 million, $15.9$32.8 million, and $18.8$24.9 million for the years ended December 31, 2021, 2020,2023, 2022, and 2019,2021, respectively, which was included in Stock-based compensation expense in the consolidated financial statements. The tax (expense) benefit recognized by us related to these awards totaled $0.8 million, $4.7$(4.3) million and $5.1$0.8 million for the years ended December 31, 2022 and 2021, 2020, and 2019, respectively. No such benefit was recorded during the year ended December 31, 2023. The tax (expenses) benefits for the years ended December 31, 2021, 2020,2022 and 20192021 were reflected as a deferred tax (expense) benefit within (Provision for) benefit fromProvision for income taxes in the consolidated financial statements.
| | | | | |
| W. P. Carey 2021 10-K– 101
|
Notes to Consolidated Financial Statements
2017 Share Incentive Plan
We maintain the 2017 Share Incentive Plan, which authorizes the issuance of up to 4,000,000 shares of our common stock. The 2017 Share Incentive Plan provides for the grant of various stock- and cash-based awards, including (i) share options, (ii) RSUs, (iii) PSUs, (iv) RSAs, and (v) dividend equivalent rights. At December 31, 2021, 2,638,3672023, 1,646,877 shares remained available for issuance under the 2017 Share Incentive Plan, which is more fully described in the 2019 Annual Report.
Employee Share Purchase Plan
We sponsor an employee share purchase plan (“ESPP”) pursuant to which eligible employees may contribute up to 10% of compensation, subject to certain limits, to purchase our common stock semi-annually at a price equal to 90% of the fair market value at certain plan defined dates. Compensation expense under this plan for each of the years ended December 31, 2021, 2020, and 2019 was less than $0.1 million. Cash received from purchases under the ESPP during the years ended December 31, 2021, 2020, and 2019 was $0.3 million, $0.4 million, and $0.3 million, respectively.
Restricted and Conditional Awards
Nonvested RSAs, RSUs, and PSUs at December 31, 20212023 and changes during the years ended December 31, 20212023, 2020,2022, and 20192021 were as follows:
| | RSA and RSU Awards | | PSU Awards |
| Shares | | Weighted-Average Grant Date Fair Value | | Shares | | Weighted-Average Grant Date Fair Value |
| Nonvested at January 1, 2019 | 277,002 | | | $ | 62.41 | | | 331,216 | | | $ | 78.82 | |
| RSA and RSU Awards | | | RSA and RSU Awards | | PSU Awards |
| Shares | | | Shares | | Weighted-Average Grant Date Fair Value | | Shares | | Weighted-Average Grant Date Fair Value |
| Nonvested at January 1, 2021 | |
| Granted | Granted | 163,447 | | | 72.86 | | | 84,006 | | | 92.16 | |
Vested (a) | Vested (a) | (152,364) | | | 62.11 | | | (403,701) | | | 74.04 | |
| Forfeited | Forfeited | (4,108) | | | 68.10 | | | (2,829) | | | 75.81 | |
Adjustment (b) | Adjustment (b) | — | | | — | | | 322,550 | | | 77.69 | |
| Nonvested at December 31, 2019 | 283,977 | | | 68.51 | | | 331,242 | | | 80.90 | |
| Nonvested at December 31, 2021 | |
| Granted | Granted | 146,162 | | | 81.02 | | | 90,518 | | | 104.65 | |
Vested (a) | Vested (a) | (163,607) | | | 69.62 | | | (156,838) | | | 80.42 | |
| Forfeited | Forfeited | (5,555) | | | 71.69 | | | (6,715) | | | 88.94 | |
Adjustment (b) | Adjustment (b) | — | | | — | | | 3,806 | | | 62.07 | |
| Nonvested at December 31, 2020 | 260,977 | | | 74.75 | | | 262,013 | | | 88.99 | |
| Nonvested at December 31, 2022 | |
Granted (c) | Granted (c) | 194,940 | | | 66.40 | | | 134,290 | | | 86.19 | |
Vested (a) | Vested (a) | (137,267) | | | 71.99 | | | (151,678) | | | 76.04 | |
| Forfeited | Forfeited | (11,656) | | | 60.98 | | | (16,463) | | | 93.91 | |
Adjustment (b) | Adjustment (b) | — | | | — | | | 170,093 | | | 71.17 | |
Nonvested at December 31, 2021 (d) | 306,994 | | | $ | 71.21 | | | 398,255 | | | $ | 86.86 | |
Nonvested at December 31, 2023 (d) | |
__________
(a)The grant date fair value of shares vested during the years ended December 31, 2023, 2022, and 2021 2020, and 2019 was $21.4$36.1 million, $24.0$26.5 million, and $39.4$21.4 million, respectively. Employees have the option to take immediate delivery of the shares upon vesting or defer receipt to a future date pursuant to previously made deferral elections. At December 31, 20212023 and 2020,2022, we had an obligation to issue 1,104,0201,196,955 and 986,8591,181,947 shares, respectively, of our common stock underlying such deferred awards, which is recorded within Total stockholders’ equity as a Deferred compensation obligation of $49.8$62.0 million and $42.0$57.0 million, respectively.
(b)Vesting and payment of the PSUs is conditioned upon certain company and/or market performance goals being met during the relevant three-year performance period. The ultimate number of PSUs to be vested will depend on the extent to which the performance goals are met and can range from zero to 3three times the original awards. As a result, we recorded adjustments to reflect the number of shares expected to be issued when the PSUs vest.
| | | | | |
| W. P. Carey 20212023 10-K – 102108 |
Notes to Consolidated Financial Statements
(c)The grant date fair value of RSAs and RSUs reflect our stock price on the date of grant on a 1-for-oneone-for-one basis. The grant date fair value of PSUs was determined utilizing (i) a Monte Carlo simulation model to generate an estimate of our future stock price over the three-year performance period and (ii) future financial performance projections.period. To estimate the fair value of PSUs granted during the year ended December 31, 2021,2023, we used a risk-free interest rate of 0.2%3.8%, an expected volatility rate of 36.7%38.2%, and assumed a dividend yield of zero.
(d)At December 31, 2021,2023, total unrecognized compensation expense related to these awards was approximately $25.5$41.9 million, with an aggregate weighted-average remaining term of 1.71.9 years.
At the end of each reporting period, we evaluate the ultimate number of PSUs we expect to vest (based upon the extent to which we have met and expect to meet the performance goals) and where appropriate, revise our estimate and associated expense. We do not revise the associated expense on PSUs expected to vest based on market performance. Upon vesting, the RSUs and PSUs may be converted into shares of our common stock. Both the RSUs and PSUs carry dividend equivalent rights. Dividend equivalent rights on RSUs issued under the predecessor employee plan are paid in cash on a quarterly basis, whereas dividend equivalent rights on RSUs issued under the 2017 Share Incentive Plan are accrued and paid in cash only when the underlying shares vest, which is generally on an annual basis. Dividend equivalents on PSUs accrue during the performance period and are converted into additional shares of common stock at the conclusion of the performance period to the extent the PSUs vest. Dividend equivalent rights are accounted for as a reduction to retained earnings to the extent that the awards are expected to vest.
In connection with the Spin-Off (Note 3), each RSU and PSU outstanding at November 1, 2023 received an equitable adjustment equal to the ratio of the five-day volume weighted average per-share price of our common stock prior to the Spin-Off divided by the five-day volume weighted average per-share of our common stock following the Spin-Off. Concurrently, our Board approved amending the performance vesting conditions assigned to the 2021 and 2022 PSU outstanding awards. The equitable adjustment and the amended performance vesting conditions were considered modifications in accordance with the provisions of ASC 718, Compensation-Stock Compensation. As a result, we compared the fair value of each award immediately prior to the modification to the fair value immediately after the modification to measure incremental compensation cost, if any. The modification resulted in minimal incremental fair value. The table above is inclusive of these adjustments.
Employee Share Purchase Plan
We sponsor an employee share purchase plan (“ESPP”) pursuant to which eligible employees may contribute up to 10% of compensation, subject to certain limits, to purchase our common stock semi-annually at a price equal to 90% of the fair market value at certain plan defined dates. Compensation expense under this plan for each of the years ended December 31, 2023, 2022, and 2021 was less than $0.1 million. Cash received from purchases under the ESPP during the years ended December 31, 2023, 2022, and 2021 was $0.3 million, $0.2 million, and $0.3 million, respectively.
Profit-Sharing Plan
We sponsor a qualified profit-sharing plan and trust that generally permits all employees, as defined by the plan, to make pre-tax contributions into the plan. We are under no obligation to contribute to the plan and the amount of any contribution is determined by and at the discretion of our Board. In December 2021, 2020,2023, 2022, and 2019,2021, our Board determined that the contribution to the plan for each of those respective years would be 10% of an eligible participant’s cash compensation, up to the legal maximum allowable in each of those years of $33,000 for 2023, $30,500 for 2022, and $29,000 for 2021, $28,500 for 2020, and $28,000 for 2019.2021. For the years ended December 31, 2021, 2020,2023, 2022, and 2019,2021, amounts expensed for contributions to the trust were $2.2$2.6 million, $1.9$2.3 million, and $2.1$2.2 million, respectively, which were included in General and administrative expenses in the consolidated financial statements. The profit-sharing plan is a deferred compensation plan and is therefore considered to be outside the scope of current accounting guidance for stock-based compensation.
| | | | | |
| W. P. Carey 2023 10-K– 109 |
Notes to Consolidated Financial Statements
Note 14.16. Income Taxes
Income Tax Provision
The components of our provision for (benefit from) income taxes for the periods presented are as follows (in thousands):
| | Years Ended December 31, |
| 2021 | | 2020 | | 2019 |
| Years Ended December 31, | | | Years Ended December 31, |
| 2023 | | | 2023 | | 2022 | | 2021 |
| Federal | Federal | | | | | |
| Current | Current | $ | (405) | | | $ | (1,118) | | | $ | 407 | |
Deferred (a) | 17 | | | (33,040) | | | 9,579 | |
| (388) | | | (34,158) | | | 9,986 | |
| Current | |
| Current | |
| Deferred | |
| (291) | |
| State and Local | State and Local | | | | | |
| Current | Current | 3,008 | | | 3,284 | | | (3,814) | |
Deferred (a) | (30) | | | (7,756) | | | (376) | |
| 2,978 | | | (4,472) | | | (4,190) | |
| Current | |
| Current | |
| Deferred | |
| 3,456 | |
| Foreign | Foreign | | | | | |
| Current | Current | 30,599 | | | 26,137 | | | 20,363 | |
| Current | |
| Current | |
| Deferred | Deferred | (4,703) | | | (8,266) | | | 52 | |
| 25,896 | | | 17,871 | | | 20,415 | |
| Total Provision for (Benefit from) Income Taxes | $ | 28,486 | | | $ | (20,759) | | | $ | 26,211 | |
| 40,887 | |
| Total Provision for Income Taxes | |
| | | | | |
| W. P. Carey 2021 10-K– 103
|
Notes to Consolidated Financial Statements
A reconciliation of effective income tax for the periods presented is as follows (in thousands):
| | Years Ended December 31, | | | Years Ended December 31, |
| 2023 | | | 2023 | | 2022 | | 2021 |
| | | Years Ended December 31, |
Pre-tax income attributable to taxable subsidiaries (a) | |
| | 2021 | | 2020 | | 2019 |
Pre-tax income attributable to taxable subsidiaries (a) | |
| Pre-tax income (loss) attributable to taxable subsidiaries (b) (c) | $ | 37,861 | | | $ | (56,789) | | | $ | 74,754 | |
Pre-tax income attributable to taxable subsidiaries (a) | |
| | Federal provision at statutory tax rate (21%) | Federal provision at statutory tax rate (21%) | $ | 7,951 | | | $ | (11,926) | | | $ | 15,698 | |
| Federal provision at statutory tax rate (21%) | |
| Federal provision at statutory tax rate (21%) | |
| Change in valuation allowance | Change in valuation allowance | 13,178 | | | 13,946 | | | 11,041 | |
| State and local taxes, net of federal benefit | |
| Non-deductible expense | Non-deductible expense | 3,148 | | | 6,303 | | | 5,313 | |
| State and local taxes, net of federal benefit | 2,713 | | | 2,336 | | | 4,062 | |
| Rate differential | |
| Windfall tax benefit | Windfall tax benefit | (1,375) | | | (2,132) | | | (5,183) | |
Rate differential (d) | (232) | | | (632) | | | (6,820) | |
| Non-taxable income | — | | | (2) | | | 103 | |
Revocation of TRS Status (a) | — | | | (37,249) | | | — | |
Tax expense related to allocation of goodwill based on portion of Investment Management business sold (Note 3) | — | | | 7,203 | | | — | |
| Other | Other | 3,103 | | | 1,394 | | | 1,997 | |
| Total provision for (benefit from) income taxes | $ | 28,486 | | | $ | (20,759) | | | $ | 26,211 | |
| Total provision for income taxes | |
__________
(a)Amount for the year ended December 31, 2020 includes an aggregate deferred tax benefit of $37.2 million as a result of the release of a deferred tax liability relating to our investment in shares of Lineage Logistics (Note 8), which converted to a REIT during the year and is therefore no longer subject to federal and state income taxes (b)Pre-tax loss attributable to taxable subsidiaries for 2020 was primarily driven by: (i) a portion of the other-than-temporary impairment charges totaling $47.1 million recognized on our equity method investments in CWI 1 and CWI 2 (Note 8), (ii) the allocation of $34.3 million of goodwill within our Investment Management segment as a result of the WLT management internalization (Note 3), and (iii) an impairment charge of $12.6 million recognized on an international property (Note 8).(c)Pre-tax income attributable to taxable subsidiaries for 20192022 includes unrealized gains on our investment in shares of Lineage Logistics totaling $32.9 million (prior to its REIT conversion in 2020, as described below) (Note 8).(d)Amount for the year ended December 31, 2019 includes a current tax benefit of approximately $6.3 million due to a change in tax position for state and local taxes.
Benefit from income taxes for the year ended December 31, 2020 includes a deferred tax benefit of $6.3 million as a result of the other-than-temporary impairment charges that we recognized on our equity method investments in CWI 1 and CWI 2 during the year (Note 8).
In light of the COVID-19 outbreak during the first quarter of 2020, we continue to monitor domestic and international tax considerations and the potential impact on our consolidated financial statements. The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) (U.S. federal legislation enacted on March 27, 2020 in response to the COVID-19 pandemic) provides that net operating losses incurred in 2018, 2019, or 2020 may be carried back to offset taxable income, earned duringrecognized in connection with the five-year period priorCPA:18 Merger, associated with the accelerated vesting of shares previously issued by CPA:18 – Global to the year in which the net operating loss was incurred. As a result, we recognized a $4.7 million current tax benefit during the year ended December 31, 2020 by carrying back certain net operating losses, which is included in Benefit from income taxes disclosed in the tables above.us for asset management services performed.
| | | | | |
| W. P. Carey 20212023 10-K – 104110 |
Notes to Consolidated Financial Statements
Deferred Income Taxes
Deferred income taxes at December 31, 20212023 and 20202022 consist of the following (in thousands):
| | | | | | | | | | | |
| | December 31, |
| | 2021 | | 2020 |
| Deferred Tax Assets | | | |
| Net operating loss and other tax credit carryforwards | $ | 55,147 | | | $ | 49,869 | |
| Basis differences — foreign investments | 52,705 | | | 43,089 | |
| Unearned and deferred compensation | 15,895 | | | 9,753 | |
Lease liabilities (a) | 14,752 | | | 14,144 | |
| Other | 374 | | | — | |
| Total deferred tax assets | 138,873 | | | 116,855 | |
| Valuation allowance | (108,812) | | | (86,069) | |
| Net deferred tax assets | 30,061 | | | 30,786 | |
| Deferred Tax Liabilities | | | |
| Basis differences — foreign investments | (145,524) | | | (145,838) | |
ROU assets (a) | (12,637) | | | (12,618) | |
| Basis differences — equity investees | (1,195) | | | (2,364) | |
| Deferred revenue | — | | | (97) | |
| Other | — | | | (632) | |
| Total deferred tax liabilities | (159,356) | | | (161,549) | |
| Net Deferred Tax Liability | $ | (129,295) | | | $ | (130,763) | |
__________
(a)Balances represent our basis differences for our office leases on domestic taxable subsidiaries. Basis differences on our foreign ground leases are included within the line item Basis differences — foreign investments. | | | | | | | | | | | |
| | December 31, |
| | 2023 | | 2022 |
| Deferred Tax Assets | | | |
| Net operating loss and other tax credit carryforwards | $ | 52,375 | | | $ | 63,454 | |
| Basis differences — foreign investments | 35,553 | | | 62,099 | |
| Unearned and deferred compensation | — | | | 643 | |
| | | |
| Other | 1,017 | | | 1,242 | |
| Total deferred tax assets | 88,945 | | | 127,438 | |
| Valuation allowance | (69,800) | | | (106,185) | |
| Net deferred tax assets | 19,145 | | | 21,253 | |
| Deferred Tax Liabilities | | | |
| Basis differences — foreign investments | (181,277) | | | (179,761) | |
| | | |
| | | |
| Total deferred tax liabilities | (181,277) | | | (179,761) | |
| Net Deferred Tax Liability | $ | (162,132) | | | $ | (158,508) | |
Our deferred tax assets and liabilities are primarily the result of temporary differences related to the following:
•Basis differences between tax and GAAP for certain international real estate investments. For income tax purposes, in certain acquisitions, we assume the seller’s basis, or the carry-over basis, in the acquired assets. The carry-over basis is typically lower than the purchase price, or the GAAP basis, resulting in a deferred tax liability with an offsetting increase to goodwill or the acquired tangible or intangible assets;
•Timing differences generated by differences in the GAAP basis and the tax basis of assets such as those related to capitalized acquisition costs, straight-line rent, prepaid rents, and intangible assets, as well as unearned and deferred compensation;
•Basis differences in equity investments represents fees earned in shares recognized under GAAP into income and deferred for U.S. taxes based upon a share vesting schedule; and
•Tax net operating losses in certain subsidiaries, including those domiciled in foreign jurisdictions, that may be realized in future periods if the respective subsidiary generates sufficient taxable income. Certain net operating losses and interest carryforwards were subject to limitations as a result of the CPA:1718 Merger, and thus could not be applied to reduce future income tax liabilities.
As of December 31, 2021,2023, U.S. federal and state net operating loss carryforwards were $21.0$17.3 million and $12.7$11.3 million, respectively, which will begin to expire in 2033. As of December 31, 2021,2023, net operating loss carryforwards in foreign jurisdictions were $84.2$70.2 million, which will begin to expire in 2022.2024.
The net deferred tax liability in the table above is comprised of deferred tax asset balances, net of certain deferred tax liabilities and valuation allowances, of $16.3$18.5 million and $15.1$20.5 million at December 31, 20212023 and 2020,2022, respectively, which are included in Other assets, net in the consolidated balance sheets, and other deferred tax liability balances of $145.6$180.7 million and $145.8$179.0 million at December 31, 20212023 and 2020,2022, respectively, which are included in Deferred income taxes in the consolidated balance sheets.
| | | | | |
| W. P. Carey 2021 10-K– 105
|
Notes to Consolidated Financial Statements
Our taxable subsidiaries recognize tax positions in the financial statements only when it is more likely than not that the position will be sustained on examination by the relevant taxing authority based on the technical merits of the position. A position that meets this standard is measured at the largest amount of benefit that will more likely than not be realized on settlement. A liability is established for differences between positions taken in a tax return and amounts recognized in the financial statements.
| | | | | |
| W. P. Carey 2023 10-K– 111 |
Notes to Consolidated Financial Statements
The following table presents a reconciliation of the beginning and ending amount of unrecognized tax benefits (in thousands):
| | | | Years Ended December 31, | | Years Ended December 31, |
| | | 2021 | | 2020 | | 2023 | | 2022 |
| Beginning balance | Beginning balance | $ | 6,312 | | | $ | 5,756 | |
| Decrease due to lapse in statute of limitations | Decrease due to lapse in statute of limitations | (508) | | | (783) | |
| Addition based on tax positions related to the prior year | |
| Foreign currency translation adjustments | Foreign currency translation adjustments | (451) | | | 515 | |
| Decrease due to Spin-Off | |
| Addition based on tax positions related to the current year | Addition based on tax positions related to the current year | 326 | | | 591 | |
| Addition based on tax positions related to the prior year | 315 | | | 233 | |
| Increase due to CPA:18 Merger | |
| Ending balance | Ending balance | $ | 5,994 | | | $ | 6,312 | |
At December 31, 20212023 and 2020,2022, we had unrecognized tax benefits as presented in the table above that, if recognized, would have a favorable impact on our effective income tax rate in future periods. These unrecognized tax benefits are recorded as liabilities within Accounts payable, accrued expenses and other liabilities on our consolidated balance sheets. We recognize interest and penalties related to uncertain tax positions in income tax expense. At December 31, 20212023 and 2020,2022, we had approximately $2.1$1.3 million and $1.7$1.6 million, respectively, of accrued interest related to uncertain tax positions.
Income Taxes Paid
Income taxes paid were $44.3$38.6 million, $43.5$42.6 million, and $35.3$44.3 million for the years ended December 31, 2021, 2020,2023, 2022, and 2019,2021, respectively.
Real Estate Operations
We elected to be taxed as a REIT under Section 856 through 860 of the Internal Revenue Code effective as of February 15, 2012. In order to maintain our qualification as a REIT, we are required, among other things, to distribute at least 90% of our REIT net taxable income to our stockholders and meet certain tests regarding the nature of our income and assets. As a REIT, we are not subject to federal income taxes on our income and gains that we distribute to our stockholders as long as we satisfy certain requirements, principally relating to the nature of our income and the level of our distributions, as well as other factors. We believe that we have operated, and we intend to continue to operate, in a manner that allows us to continue to qualify as a REIT. We conduct business primarily in North America and Europe, and as a result, we or one or more of our subsidiaries file income tax returns in the United States federal jurisdiction and various state, local, and foreign jurisdictions.
Investment Management Operations
We conductPrior to the CPA:18 Merger, we conducted our investment management services in our Investment Management segment through TRSs. Our use of TRSs enablesenabled us to engage in certain businesses while complying with the REIT qualification requirements and also allowsallowed us to retain income generated by these businesses for reinvestment without the requirement to distribute those earnings. Certain of our inter-company transactions that have been eliminated in consolidation for financial accounting purposes arewere also subject to taxation. Periodically, shares in the Managed REITs that are payable to our TRSs in consideration of services rendered are distributed from TRSs to us.
Tax authorities in the relevant jurisdictions may select our tax returns for audit and propose adjustments before the expiration of the statute of limitations. Our tax returns filed for tax years 20162018 through 20202022 or any ongoing audits remain open to adjustment in the major tax jurisdictions.
| | | | | |
| W. P. Carey 20212023 10-K – 106112 |
Notes to Consolidated Financial Statements
Note 15.17. Property Dispositions
We have an active capital recycling program, with a goal of extending the average lease term through reinvestment, improving portfolio credit quality through dispositions and acquisitions of assets, increasing the asset criticality factor in our portfolio, and/or executing strategic dispositions of assets. We may decide to dispose of a property when it is vacant as a result of tenants vacating space, tenants electing not to renew their leases, tenant insolvency, or lease rejection in the bankruptcy process. In such cases, we assess whether we can obtain the highest value from the property by selling it, as opposed to re-leasing it. We may also sell a property when we receive an unsolicited offer or negotiate a price for an investment that is consistent with our strategy for that investment.investment or, in certain instances, when we sell a property back to the tenant. When it is appropriate to do so, we classify the property as an asset held for sale on our consolidated balance sheet.
In addition, we implemented the Office Sale Program in September 2023, which is targeted to be completed in the first half of 2024 (Note 1).
All property dispositions are recorded within our Real Estate segment and are also discussed in Note 46 and . These dispositions exclude properties contributed to NLOP in the Spin-Off (Note 53).
2023 — During the year ended December 31, 2023, we sold 31 properties for total proceeds, net of selling costs, of $446.4 million, and recognized a net gain on these sales totaling $80.7 million (inclusive of income taxes totaling $1.6 million recognized upon sale). Eight of the properties sold during 2023 were hotel operating properties.
This disposition activity includes the sale of eight properties under the Office Sale Program for total proceeds, net of selling costs, of $216.9 million, resulting in a net gain on these sales totaling $3.6 million.
2022 — During the year ended December 31, 2022, we sold 23 properties for total proceeds, net of selling costs, of $234.7 million, and recognized a net gain on these sales totaling $43.5 million (inclusive of income taxes totaling $5.3 million recognized upon sale). This disposition activity included two properties acquired in the CPA:18 Merger, one of which was classified as assets held for sale and sold in August 2022 (Note 4).
2021 — During the year ended December 31, 2021, we sold 24 properties for total proceeds, net of selling costs, of $163.6 million, and recognized a net gain on these sales totaling $40.4 million (inclusive of income taxes totaling $4.7 million recognized upon sale).
2020 — During the year ended December 31, 2020, we sold 22 properties for total proceeds, net of selling costs, of $366.5 million (inclusive of $4.7 million attributable to a noncontrolling interest), and recognized a net gain on these sales totaling $109.4 million (inclusive of income taxes totaling $3.0 million recognized upon sale and $0.6 million attributable to a noncontrolling interest). Disposition activity included the sale of 1 of our 2 hotel operating properties in January 2020 for total proceeds, net of selling costs, of $103.5 million (inclusive of $4.7 million attributable to a noncontrolling interest).
2019 — During the year ended December 31, 2019, we sold 14 properties for total proceeds, net of selling costs, of $308.0 million and recognized a net gain on these sales totaling $10.9 million (inclusive of income taxes totaling $1.2 million recognized upon sale).
In June 2019, a loan receivable was repaid in full to us for $9.3 million, which resulted in a net loss of $0.1 million.
In October 2019, we transferred ownership of 6 properties and the related non-recourse mortgage loan, which had an aggregate asset carrying value of $42.3 million and a mortgage carrying value of $43.4 million (including a $13.8 million discount on the mortgage loan), respectively, on the date of transfer, to the mortgage lender, resulting in a net gain of $8.3 million (outstanding principal balance was $56.4 million and we wrote off $5.6 million of accrued interest payable).
In addition, in December 2019, we transferred ownership of a property and the related non-recourse mortgage loan, which had an aggregate asset carrying value of $10.4 million and a mortgage carrying value of $8.2 million (including a $0.5 million discount on the mortgage loan), respectively, on the date of transfer, to the mortgage lender, resulting in a net loss of $1.0 million (outstanding principal balance was $8.7 million and we wrote off $0.9 million of accrued interest payable).
| | | | | |
| W. P. Carey 20212023 10-K – 107113 |
Notes to Consolidated Financial Statements
Note 16.18. Segment Reporting
We evaluate our results from operations by our 2two major business segments: Real Estate and Investment Management (Note 1). The following tables present a summary of comparative results and assets for these business segments (in thousands):
Real Estate
| | Years Ended December 31, |
| 2021 | | 2020 | | 2019 |
| Years Ended December 31, | | | Years Ended December 31, |
| 2023 | | | 2023 | | 2022 | | 2021 |
| Revenues | Revenues | | | | | |
| Lease revenues | Lease revenues | $ | 1,177,438 | | | $ | 1,080,623 | | | $ | 987,984 | |
| Income from direct financing leases and loans receivable | 67,555 | | | 74,893 | | | 105,112 | |
| Lease termination income and other | 53,655 | | | 11,082 | | | 29,547 | |
Operating property revenues (a) | 13,478 | | | 11,399 | | | 50,220 | |
| 1,312,126 | | | 1,177,997 | | | 1,172,863 | |
| Lease revenues | |
| Lease revenues | |
| Income from finance leases and loans receivable | |
| Operating property revenues | |
| Other lease-related income | |
| 1,738,139 | |
| Operating Expenses | Operating Expenses | | | | | |
Depreciation and amortization (b) | 475,989 | | | 441,948 | | | 443,300 | |
General and administrative (b) | 81,888 | | | 70,127 | | | 56,796 | |
| Depreciation and amortization | |
| Depreciation and amortization | |
| Depreciation and amortization | |
| General and administrative | |
| Operating property expenses | |
| Impairment charges — real estate | |
| Reimbursable tenant costs | Reimbursable tenant costs | 62,417 | | | 56,409 | | | 55,576 | |
| Property expenses, excluding reimbursable tenant costs | Property expenses, excluding reimbursable tenant costs | 47,898 | | | 44,067 | | | 39,545 | |
Stock-based compensation expense (b) | 24,881 | | | 15,247 | | | 13,248 | |
| Impairment charges | 24,246 | | | 35,830 | | | 32,539 | |
| Operating property expenses | 9,848 | | | 9,901 | | | 38,015 | |
| Stock-based compensation expense | |
| Merger and other expenses | Merger and other expenses | (4,597) | | | (937) | | | 101 | |
| 722,570 | | | 672,592 | | | 679,120 | |
| 1,017,639 | |
| Other Income and Expenses | Other Income and Expenses | | | | | |
| Gain on sale of real estate, net | |
| Gain on sale of real estate, net | |
| Gain on sale of real estate, net | |
| Interest expense | Interest expense | (196,831) | | | (210,087) | | | (233,325) | |
| Gain on sale of real estate, net | 40,425 | | | 109,370 | | | 18,143 | |
| (Losses) earnings from equity method investments in real estate | (19,649) | | | (9,017) | | | 2,361 | |
| Other gains and (losses) | |
| Non-operating income | Non-operating income | 13,778 | | | 8,970 | | | 20,478 | |
| Other gains and (losses) | (13,676) | | | 37,104 | | | 9,773 | |
| Loss on change in control of interests | — | | | — | | | (8,416) | |
| (175,953) | | | (63,660) | | | (190,986) | |
| Earnings (losses) from equity method investments in real estate | |
| Gain on change in control of interests | |
| 28,709 | |
| Income before income taxes | Income before income taxes | 413,603 | | | 441,745 | | | 302,757 | |
| (Provision for) benefit from income taxes | (28,703) | | | 18,498 | | | (30,802) | |
| Provision for income taxes | |
| Net Income from Real Estate | Net Income from Real Estate | 384,900 | | | 460,243 | | | 271,955 | |
| Net (income) loss attributable to noncontrolling interests | (134) | | | (731) | | | 110 | |
| Net loss (income) attributable to noncontrolling interests | |
| Net Income from Real Estate Attributable to W. P. Carey | Net Income from Real Estate Attributable to W. P. Carey | $ | 384,766 | | | $ | 459,512 | | | $ | 272,065 | |
| | | | | |
| W. P. Carey 20212023 10-K – 108114 |
Notes to Consolidated Financial Statements
Investment Management
| | Years Ended December 31, | | | Years Ended December 31, |
| 2023 | | | 2023 | | 2022 | | 2021 |
| Revenues | |
| Asset management revenue | |
| Asset management revenue | |
| Asset management revenue | |
| Other advisory income and reimbursements | |
| Reimbursable costs from affiliates | |
| 3,219 | |
| Operating Expenses | |
| Reimbursable costs from affiliates | |
| Reimbursable costs from affiliates | |
| Reimbursable costs from affiliates | |
| Impairment charges — Investment Management goodwill | |
| Merger and other expenses | |
| 368 | |
| Other Income and Expenses | |
| Other gains and (losses) | |
| Other gains and (losses) | |
| Other gains and (losses) | |
| Non-operating income | |
| Gain on change in control of interests | |
| Earnings from equity method investments in the Managed Programs | |
| 256 | |
| Income before income taxes | |
| Benefit from (provision for) income taxes | |
| | | Years Ended December 31, |
| Net Income from Investment Management Attributable to W. P. Carey | |
| | 2021 | | 2020 | | 2019 |
| Revenues | | | | | |
| Asset management revenue | $ | 15,363 | | | $ | 22,467 | | | $ | 43,356 | |
| Reimbursable costs from affiliates | 4,035 | | | 8,855 | | | 16,547 | |
| Net Income from Investment Management Attributable to W. P. Carey | |
| | 19,398 | | | 31,322 | | | 59,903 | |
| Operating Expenses | | | | | |
| Reimbursable costs from affiliates | 4,035 | | | 8,855 | | | 16,547 | |
| Merger and other expenses | 51 | | | 1,184 | | | — | |
General and administrative (b) | — | | | 5,823 | | | 18,497 | |
| Subadvisor fees | — | | | 1,469 | | | 7,579 | |
Depreciation and amortization (b) | — | | | 987 | | | 3,835 | |
Stock-based compensation expense (b) | — | | | 691 | | | 5,539 | |
| 4,086 | | | 19,009 | | | 51,997 | |
| Other Income and Expenses | | | | | |
| Earnings (losses) from equity method investments in the Managed Programs | 8,820 | | | (9,540) | | | 20,868 | |
| Other gains and (losses) | 791 | | | 61 | | | (849) | |
| Non-operating income | 82 | | | 617 | | | 2,073 | |
| 9,693 | | | (8,862) | | | 22,092 | |
| Income before income taxes | 25,005 | | | 3,451 | | | 29,998 | |
| Benefit from income taxes | 217 | | | 2,261 | | | 4,591 | |
| Net Income from Investment Management | 25,222 | | | 5,712 | | | 34,589 | |
| Net income attributable to noncontrolling interests | — | | | (9,865) | | | (1,411) | |
| Net Income (Loss) from Investment Management Attributable to W. P. Carey | $ | 25,222 | | | $ | (4,153) | | | $ | 33,178 | |
| Net Income from Investment Management Attributable to W. P. Carey | |
Total Company
| | Years Ended December 31, |
| 2021 | | 2020 | | 2019 |
| Years Ended December 31, | | | Years Ended December 31, |
| 2023 | | | 2023 | | 2022 | | 2021 |
| Revenues | Revenues | $ | 1,331,524 | | | $ | 1,209,319 | | | $ | 1,232,766 | |
| Operating expenses | Operating expenses | 726,656 | | | 691,601 | | | 731,117 | |
| Other income and expenses | Other income and expenses | (166,260) | | | (72,522) | | | (168,894) | |
| (Provision for) benefit from income taxes | (28,486) | | | 20,759 | | | (26,211) | |
| Net income attributable to noncontrolling interests | (134) | | | (10,596) | | | (1,301) | |
| Provision for income taxes | |
| Net loss (income) attributable to noncontrolling interests | |
| Net income attributable to W. P. Carey | Net income attributable to W. P. Carey | $ | 409,988 | | | $ | 455,359 | | | $ | 305,243 | |
| | | | | | | | | | | |
| Total Assets at December 31, |
| 2021 | | 2020 |
| Real Estate | $ | 15,344,703 | | | $ | 14,582,015 | |
| Investment Management | 135,927 | | | 125,621 | |
| Total Company | $ | 15,480,630 | | | $ | 14,707,636 | |
__________ | | | | | | | | | | | |
| Total Assets at December 31, |
| 2023 | | 2022 |
| Real Estate | $ | 17,966,126 | | | $ | 18,077,155 | |
| Investment Management | 10,657 | | | 24,880 | |
| Total Company | $ | 17,976,783 | | | $ | 18,102,035 | |
(a)Operating property revenues from our hotels include (i) $7.2 million, $4.0 million, and $15.0 million for the years ended December 31, 2021, 2020, and 2019, respectively, generated from a hotel in Bloomington, Minnesota (revenues reflect the impact of the COVID-19 pandemic on the hotel’s operations), and (ii) $1.9 million and $14.4 million for the years ended December 31, 2020 and 2019, respectively, generated from a hotel in Miami, Florida, which was sold in January 2020 (Note 15).
| | | | | |
| W. P. Carey 20212023 10-K – 109115 |
Notes to Consolidated Financial Statements
(b)Beginning with the second quarter of 2020, general and administrative expenses attributed to our Investment Management segment are comprised of the incremental costs of providing services to the Managed Programs, which are fully reimbursed by those funds (resulting in no net expense for us). All other general and administrative expenses are attributed to our Real Estate segment. Previously, general and administrative expenses were allocated based on time incurred by our personnel for the Real Estate and Investment Management segments. In addition, beginning with the second quarter of 2020, stock-based compensation expense and corporate depreciation and amortization expense are fully recognized within our Real Estate segment. In light of the termination of the advisory agreements with CWI 1 and CWI 2 in connection with the WLT management internalization (Note 3), we now view essentially all assets, liabilities, and operational expenses as part of our Real Estate segment, other than incremental activities that are expected to wind down as we manage CPA:18 – Global and CESH through the end of their respective life cycles (Note 2). These changes between the segments had no impact on our consolidated financial statements.
Our portfolio is comprised of domestic and international investments. At December 31, 2021,2023, our international investments within our Real Estate segment were comprised of investments in Poland, Germany, Spain, the Netherlands, Poland, the United Kingdom, Canada, Italy, France, Denmark, Croatia, Denmark, Canada,Norway, Mexico, Finland, Mexico, Norway,Belgium, Lithuania, Mauritius, Hungary, Slovakia, Portugal, Lithuania, the Czech Republic, Sweden, Slovakia, Austria, Japan, Latvia, and Estonia. We sold our only remaining investment in Belgium during 2021. No tenant or international country individually comprised at least 10% of our total lease revenues for the years ended December 31, 2021, 2020,2023, 2022, or 2019,2021, or at least 10% of our total long-lived assets at December 31, 20212023 or 2020.2022. Revenues and assets within our Investment Management segment are entirely domestic. The following tables present the geographic information for our Real Estate segment (in thousands):
| | Years Ended December 31, |
| 2021 | | 2020 | | 2019 |
| Years Ended December 31, | | | Years Ended December 31, |
| 2023 | | | 2023 | | 2022 | | 2021 |
| Revenues | Revenues | | | | | |
| Domestic | |
| Domestic | |
| Domestic | Domestic | $ | 860,961 | | | $ | 756,763 | | | $ | 783,828 | |
| International | International | 451,165 | | | 421,234 | | | 389,035 | |
| Total | Total | $ | 1,312,126 | | | $ | 1,177,997 | | | $ | 1,172,863 | |
| | | | | | | | | | | |
| | December 31, |
| | 2021 | | 2020 |
Long-lived Assets (a) | | | |
| Domestic | $ | 8,170,448 | | | $ | 7,589,805 | |
| International | 4,866,921 | | | 4,796,767 | |
| Total | $ | 13,037,369 | | | $ | 12,386,572 | |
| | | |
| Equity Investments in Real Estate | | | |
| Domestic | $ | 236,643 | | | $ | 152,451 | |
| International | 55,260 | | | 74,438 | |
| Total | $ | 291,903 | | | $ | 226,889 | |
__________
(a)Consists of Net investments in real estate. In 2021, we reclassified loans receivable to be included within Net investments in real estate (Note 2). As a result, Net investments in real estate as of December 31, 2020 has been revised to conform to the current period presentation. | | | | | | | | | | | |
| | December 31, |
| | 2023 | | 2022 |
| Long-lived Assets | | | |
| Domestic | $ | 9,049,540 | | | $ | 10,053,422 | |
| International | 5,864,359 | | | 5,435,476 | |
| Total | $ | 14,913,899 | | | $ | 15,488,898 | |
| | | |
| Equity Investments in Real Estate | | | |
| Domestic | $ | 324,142 | | | $ | 286,708 | |
| International | 28,860 | | | 38,569 | |
| Total | $ | 353,002 | | | $ | 325,277 | |
| | | | | |
| W. P. Carey 20212023 10-K – 110116 |
Notes to Consolidated Financial Statements
Note 17.19. Subsequent Events
Acquisitions
In January and February 2022,2024, we completed 2two acquisitions totaling approximately $166.3$177.1 million. They are as follows:
•$29.6 million (based on the exchange ratefor two properties, a supermarket and its associated gas station, in Doncaster, United Kingdom; and
•$147.5 million for a portfolio of the euro on the date of acquisition, as applicable).five industrial facilities in Italy.
Dispositions
Office Sale Program
In January and February 2022,2024, we sold 2 domestic71 properties pursuant to the Office Sale Program for gross proceeds totaling $19.3 million. Theseof $387.8 million, including a portfolio of 70 government office properties werelocated in Spain (Note 1, Note 7). The other property was classified as held for sale as of December 31, 20212023 (Note 46).
Dividend from and Redemption of our Investment in Preferred Shares of WLTNet-Lease Self-Storage Dispositions
In January 2022,February 2024, we received a $0.9 million cash dividend from our investment in preferred shares of WLT (Note 8). In addition, in January 2022, our investment in 1,300,000 preferred shares of WLT was redeemed in full,sold 16 net-lease self-storage properties leased to the same tenant for gross proceeds of $65.0 million (based on a liquidation preference$88.5 million. The remaining 62 properties in this portfolio are expected to be sold in multiple tranches during the first quarter of $50.00 per share, as described in 2024 (Note 37).
Issuances Under our ATM ProgramOther Dispositions
In January 2022,and February 2024, we issued 593,060 shares of our common stock under our current ATM Program at a weighted-average price of $81.29 per sharesold three other properties for netgross proceeds of approximately $47$14.5 million. AsOne of the datethese properties was classified as held for sale as of this Report, approximately $223.9 million remained available for issuance under our current ATM ProgramDecember 31, 2023 (Note 126).
Dividend from our Investment in Shares of Lineage Logistics
In February 2022,January 2024, we received a cash dividend of $4.3$3.0 million from our investment in shares of Lineage Logistics (Note 810).
CESH DistributionMortgage Loan Repayments
In January 2022,February 2024, we received a distribution from our investment in CESH of $1.2 million (Note 7).repaid at maturity two non-recourse mortgage loans totaling approximately $60.1 million. | | | | | |
| W. P. Carey 20212023 10-K – 111117 |
W. P. CAREY INC.
SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS
Years Ended December 31, 2021, 2020,2023, 2022, and 20192021
(in thousands)
| | Description | Description | | Balance at
Beginning
of Year | | Other Additions | | Deductions | | Balance at
End of Year | Description | | Balance at
Beginning
of Year | | Other Additions | | Deductions | | Balance at
End of Year |
| Year Ended December 31, 2023 | |
| Valuation reserve for deferred tax assets | |
| Valuation reserve for deferred tax assets | |
| Valuation reserve for deferred tax assets | |
| | Year Ended December 31, 2022 | |
| Year Ended December 31, 2022 | |
| Year Ended December 31, 2022 | |
| Valuation reserve for deferred tax assets | |
| Valuation reserve for deferred tax assets | |
| Valuation reserve for deferred tax assets | |
| | Year Ended December 31, 2021 | |
| Year Ended December 31, 2021 | |
| Year Ended December 31, 2021 | Year Ended December 31, 2021 | | | | | | | | |
| Valuation reserve for deferred tax assets | Valuation reserve for deferred tax assets | | $ | 86,069 | | | $ | 40,895 | | | $ | (18,152) | | | $ | 108,812 | |
| | Year Ended December 31, 2020 | |
| Valuation reserve for deferred tax assets | Valuation reserve for deferred tax assets | | $ | 73,643 | | | $ | 31,470 | | | $ | (19,044) | | | $ | 86,069 | |
| | Year Ended December 31, 2019 | |
| Valuation reserve for deferred tax assets | Valuation reserve for deferred tax assets | | $ | 54,499 | | | $ | 22,384 | | | $ | (3,240) | | | $ | 73,643 | |
| | | | | |
| W. P. Carey 20212023 10-K – 112118 |
W. P. CAREY INC.
SCHEDULE III — REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 20212023
(in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Initial Cost to Company | | Cost Capitalized Subsequent to
Acquisition (a) | | Increase
(Decrease)
in Net
Investments (b) | | Gross Amount at which
Carried at Close of Period (c) (d) | | Accumulated Depreciation (d) | | Date of Construction | | Date Acquired | | Life on which
Depreciation in Latest
Statement of
Income
is Computed |
| | | | | | | | | | |
| | | | | | | | | | |
| Description | | Encumbrances | | Land | | Buildings | | | | Land | | Buildings | | Total | | | | |
| Land, Buildings and Improvements Subject to Operating Leases | | | | | | | | | | | | | | | | | | | | |
| Industrial facilities in Erlanger, KY | | $ | — | | | $ | 1,526 | | | $ | 21,427 | | | $ | 2,966 | | | $ | (84) | | | $ | 1,526 | | | $ | 24,309 | | | $ | 25,835 | | | $ | 14,823 | | | 1979; 1987 | | Jan. 1998 | | 40 yrs. |
| Industrial facilities in Thurmont, MD and Farmington, NY | | — | | | 729 | | | 5,903 | | | — | | | — | | | 729 | | | 5,903 | | | 6,632 | | | 3,026 | | | 1964; 1983 | | Jan. 1998 | | 15 yrs. |
| Warehouse facilities in Anchorage, AK and Commerce, CA | | — | | | 4,905 | | | 11,898 | | | — | | | 12 | | | 4,905 | | | 11,910 | | | 16,815 | | | 6,994 | | | 1948; 1975 | | Jan. 1998 | | 40 yrs. |
| Industrial facility in Toledo, OH | | — | | | 224 | | | 2,408 | | | — | | | — | | | 224 | | | 2,408 | | | 2,632 | | | 1,906 | | | 1966 | | Jan. 1998 | | 40 yrs. |
| Industrial facility in Goshen, IN | | — | | | 239 | | | 940 | | | — | | | — | | | 239 | | | 940 | | | 1,179 | | | 557 | | | 1973 | | Jan. 1998 | | 40 yrs. |
| Office facility in Raleigh, NC | | — | | | 1,638 | | | 2,844 | | | 187 | | | (2,554) | | | 828 | | | 1,287 | | | 2,115 | | | 1,027 | | | 1983 | | Jan. 1998 | | 20 yrs. |
| Office facility in King of Prussia, PA | | — | | | 1,219 | | | 6,283 | | | 1,295 | | | — | | | 1,219 | | | 7,578 | | | 8,797 | | | 4,430 | | | 1968 | | Jan. 1998 | | 40 yrs. |
| Industrial facility in Pinconning, MI | | — | | | 32 | | | 1,692 | | | — | | | — | | | 32 | | | 1,692 | | | 1,724 | | | 1,015 | | | 1948 | | Jan. 1998 | | 40 yrs. |
| Industrial facilities in Sylmar, CA | | — | | | 2,052 | | | 5,322 | | | — | | | (1,889) | | | 1,494 | | | 3,991 | | | 5,485 | | | 2,406 | | | 1962; 1979 | | Jan. 1998 | | 40 yrs. |
| Retail facilities in several cities in the following states: Alabama, Florida, Georgia, Illinois, Louisiana, Missouri, New Mexico, North Carolina, South Carolina, Tennessee, and Texas | | — | | | 9,382 | | | — | | | 238 | | | 14,696 | | | 9,025 | | | 15,291 | | | 24,316 | | | 8,644 | | | Various | | Jan. 1998 | | 15 yrs. |
| Industrial facility in Glendora, CA | | — | | | 1,135 | | | — | | | — | | | 1,942 | | | 1,152 | | | 1,925 | | | 3,077 | | | 577 | | | 1950 | | Jan. 1998 | | 10 yrs. |
| Warehouse facility in Doraville, GA | | — | | | 3,288 | | | 9,864 | | | 17,079 | | | (11,410) | | | 3,288 | | | 15,533 | | | 18,821 | | | 2,285 | | | 2016 | | Jan. 1998 | | 40 yrs. |
| Office facility in Collierville, TN and warehouse facility in Corpus Christi, TX | | — | | | 3,490 | | | 72,497 | | | 3,513 | | | (15,608) | | | 288 | | | 63,604 | | | 63,892 | | | 22,296 | | | 1989; 1999 | | Jan. 1998 | | 40 yrs. |
| Land in Irving and Houston, TX | | — | | | 9,795 | | | — | | | — | | | — | | | 9,795 | | | — | | | 9,795 | | | — | | | N/A | | Jan. 1998 | | N/A |
| Industrial facility in Chandler, AZ | | — | | | 5,035 | | | 18,957 | | | 8,373 | | | 516 | | | 5,035 | | | 27,846 | | | 32,881 | | | 15,946 | | | 1989 | | Jan. 1998 | | 40 yrs. |
| Office facility in Bridgeton, MO | | — | | | 842 | | | 4,762 | | | 2,523 | | | (196) | | | 842 | | | 7,089 | | | 7,931 | | | 4,039 | | | 1972 | | Jan. 1998 | | 40 yrs. |
| Retail facility in Waterford Township, MI | | — | | | 1,039 | | | 4,788 | | | 236 | | | (2,297) | | | 494 | | | 3,272 | | | 3,766 | | | 1,428 | | | 1972 | | Jan. 1998 | | 35 yrs. |
| Warehouse facility in Memphis, TN | | — | | | 1,882 | | | 3,973 | | | 294 | | | (3,892) | | | 328 | | | 1,929 | | | 2,257 | | | 1,483 | | | 1969 | | Jan. 1998 | | 15 yrs. |
| Industrial facility in Romulus, MI | | — | | | 454 | | | 6,411 | | | 525 | | | — | | | 454 | | | 6,936 | | | 7,390 | | | 2,071 | | | 1970 | | Jan. 1998 | | 10 yrs. |
| Retail facility in Bellevue, WA | | — | | | 4,125 | | | 11,812 | | | 393 | | | (123) | | | 4,371 | | | 11,836 | | | 16,207 | | | 6,874 | | | 1994 | | Apr. 1998 | | 40 yrs. |
| Office facility in Rio Rancho, NM | | — | | | 1,190 | | | 9,353 | | | 5,866 | | | (238) | | | 2,287 | | | 13,884 | | | 16,171 | | | 7,136 | | | 1999 | | Jul. 1998 | | 40 yrs. |
| Office facility in Moorestown, NJ | | — | | | 351 | | | 5,981 | | | 1,667 | | | 1 | | | 351 | | | 7,649 | | | 8,000 | | | 4,682 | | | 1964 | | Feb. 1999 | | 40 yrs. |
| Industrial facilities in Lenexa, KS and Winston-Salem, NC | | — | | | 1,860 | | | 12,539 | | | 3,075 | | | (1,135) | | | 1,725 | | | 14,614 | | | 16,339 | | | 7,746 | | | 1968; 1980 | | Sep. 2002 | | 40 yrs. |
| Office facilities in Playa Vista and Venice, CA | | 20,058 | | | 2,032 | | | 10,152 | | | 52,817 | | | 1 | | | 5,889 | | | 59,113 | | | 65,002 | | | 18,865 | | | 1991; 1999 | | Sep. 2004; Sep. 2012 | | 40 yrs. |
| Warehouse facility in Greenfield, IN | | — | | | 2,807 | | | 10,335 | | | 223 | | | (8,383) | | | 967 | | | 4,015 | | | 4,982 | | | 2,144 | | | 1995 | | Sep. 2004 | | 40 yrs. |
| Retail facility in Hot Springs, AR | | — | | | 850 | | | 2,939 | | | 2 | | | (2,614) | | | — | | | 1,177 | | | 1,177 | | | 510 | | | 1985 | | Sep. 2004 | | 40 yrs. |
| Warehouse facilities in Apopka, FL | | — | | | 362 | | | 10,855 | | | 1,195 | | | (155) | | | 337 | | | 11,920 | | | 12,257 | | | 4,628 | | | 1969 | | Sep. 2004 | | 40 yrs. |
| Land in San Leandro, CA | | — | | | 1,532 | | | — | | | — | | | — | | | 1,532 | | | — | | | 1,532 | | | — | | | N/A | | Dec. 2006 | | N/A |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Initial Cost to Company | | Cost Capitalized Subsequent to
Acquisition (a) | | Increase
(Decrease)
in Net
Investments (b) | | Gross Amount at which
Carried at Close of Period (c) (d) | | Accumulated Depreciation (d) | | Date of Construction | | Date Acquired | | Life on which
Depreciation in Latest
Statement of
Income
is Computed |
| | | | | | | | | | |
| | | | | | | | | | |
| Description | | Encumbrances | | Land | | Buildings | | | | Land | | Buildings | | Total | | | | |
| Real Estate Subject to Operating Leases | | | | | | | | | | | | | | | | | | | | |
| Industrial facilities in Erlanger, KY | | $ | — | | | $ | 1,526 | | | $ | 21,427 | | | $ | 2,966 | | | $ | (84) | | | $ | 1,526 | | | $ | 24,309 | | | $ | 25,835 | | | $ | 15,989 | | | 1979; 1987 | | Jan. 1998 | | 40 yrs. |
| Industrial facilities in Thurmont, MD and Farmington, NY | | — | | | 729 | | | 5,903 | | | — | | | — | | | 729 | | | 5,903 | | | 6,632 | | | 3,814 | | | 1964; 1983 | | Jan. 1998 | | 15 yrs. |
| Warehouse facility in Commerce, CA | | — | | | 4,905 | | | 11,898 | | | — | | | (3,043) | | | 4,573 | | | 9,187 | | | 13,760 | | | 6,279 | | | 1948 | | Jan. 1998 | | 40 yrs. |
| Industrial facility in Goshen, IN | | — | | | 239 | | | 940 | | | — | | | — | | | 239 | | | 940 | | | 1,179 | | | 650 | | | 1973 | | Jan. 1998 | | 40 yrs. |
| Industrial facilities in Sylmar, CA | | — | | | 2,052 | | | 5,322 | | | — | | | (1,889) | | | 1,494 | | | 3,991 | | | 5,485 | | | 2,603 | | | 1962; 1979 | | Jan. 1998 | | 40 yrs. |
| Retail facilities in the United States | | — | | | 9,382 | | | — | | | 238 | | | 14,483 | | | 9,025 | | | 15,078 | | | 24,103 | | | 11,286 | | | Various | | Jan. 1998 | | 15 yrs. |
| Land in Glendora, CA | | — | | | 1,135 | | | — | | | — | | | 17 | | | 1,152 | | | — | | | 1,152 | | | — | | | N/A | | Jan. 1998 | | N/A |
| Warehouse facility in Doraville, GA | | — | | | 3,288 | | | 9,864 | | | 17,079 | | | (11,410) | | | 3,288 | | | 15,533 | | | 18,821 | | | 3,308 | | | 2016 | | Jan. 1998 | | 40 yrs. |
| Warehouse facility in Corpus Christi, TX | | — | | | 3,490 | | | 72,497 | | | 3,513 | | | (77,927) | | | 288 | | | 1,285 | | | 1,573 | | | 835 | | | 1989 | | Jan. 1998 | | 40 yrs. |
| Land in Irving and Houston, TX | | — | | | 9,795 | | | — | | | — | | | — | | | 9,795 | | | — | | | 9,795 | | | — | | | N/A | | Jan. 1998 | | N/A |
| Industrial facility in Chandler, AZ | | — | | | 5,035 | | | 18,957 | | | 8,373 | | | 516 | | | 5,035 | | | 27,846 | | | 32,881 | | | 17,537 | | | 1989 | | Jan. 1998 | | 40 yrs. |
| Warehouse facility in Memphis, TN | | — | | | 1,882 | | | 3,973 | | | 294 | | | (3,892) | | | 328 | | | 1,929 | | | 2,257 | | | 1,700 | | | 1969 | | Jan. 1998 | | 15 yrs. |
| Industrial facility in Romulus, MI | | — | | | 454 | | | 6,411 | | | 525 | | | — | | | 454 | | | 6,936 | | | 7,390 | | | 3,461 | | | 1970 | | Jan. 1998 | | 10 yrs. |
| Retail facility in Bellevue, WA | | — | | | 4,125 | | | 11,812 | | | 393 | | | (123) | | | 4,371 | | | 11,836 | | | 16,207 | | | 7,425 | | | 1994 | | Apr. 1998 | | 40 yrs. |
| Industrial facility in Winston-Salem, NC | | — | | | 1,860 | | | 12,539 | | | 3,075 | | | (7,325) | | | 925 | | | 9,224 | | | 10,149 | | | 6,051 | | | 1980 | | Sep. 2002 | | 40 yrs. |
| Warehouse facility in Greenfield, IN | | — | | | 2,807 | | | 10,335 | | | 223 | | | (8,383) | | | 967 | | | 4,015 | | | 4,982 | | | 2,431 | | | 1995 | | Sep. 2004 | | 40 yrs. |
| Warehouse facilities in Apopka, FL | | — | | | 362 | | | 10,855 | | | 1,195 | | | (155) | | | 337 | | | 11,920 | | | 12,257 | | | 5,155 | | | 1969 | | Sep. 2004 | | 40 yrs. |
| Land in San Leandro, CA | | — | | | 1,532 | | | — | | | — | | | — | | | 1,532 | | | — | | | 1,532 | | | — | | | N/A | | Dec. 2006 | | N/A |
| Retail facility in Austin, TX | | — | | | 1,725 | | | 5,168 | | | — | | | — | | | 1,725 | | | 5,168 | | | 6,893 | | | 3,098 | | | 1995 | | Dec. 2006 | | 29 yrs. |
| Retail facility in Wroclaw, Poland | | — | | | 3,600 | | | 10,306 | | | — | | | (3,913) | | | 2,763 | | | 7,230 | | | 9,993 | | | 2,867 | | | 2007 | | Dec. 2007 | | 40 yrs. |
| Warehouse facility in Mallorca, Spain | | — | | | 11,109 | | | 12,636 | | | — | | | (1,780) | | | 10,257 | | | 11,708 | | | 21,965 | | | 3,973 | | | 2008 | | Jun. 2010 | | 40 yrs. |
| Industrial facilities in Auburn, IN; Clinton Township, MI; and Bluffton, OH | | — | | | 4,403 | | | 20,298 | | | — | | | (3,870) | | | 2,589 | | | 18,242 | | | 20,831 | | | 6,553 | | | 1968; 1975; 1995 | | Sep. 2012; Jan. 2014 | | 30 yrs. |
| Land in Irvine, CA | | — | | | 4,173 | | | — | | | — | | | — | | | 4,173 | | | — | | | 4,173 | | | — | | | N/A | | Sep. 2012 | | N/A |
| Industrial facility in Alpharetta, GA | | — | | | 2,198 | | | 6,349 | | | 1,247 | | | — | | | 2,198 | | | 7,596 | | | 9,794 | | | 2,967 | | | 1997 | | Sep. 2012 | | 30 yrs. |
| Warehouse facility in St. Petersburg, FL | | — | | | 3,280 | | | 24,627 | | | 4,675 | | | (20,393) | | | 1,814 | | | 10,375 | | | 12,189 | | | 3,794 | | | 1996 | | Sep. 2012 | | 30 yrs. |
| Retail facility in Baton Rouge, LA | | — | | | 4,168 | | | 5,724 | | | 3,200 | | | — | | | 4,168 | | | 8,924 | | | 13,092 | | | 3,510 | | | 2003 | | Sep. 2012 | | 30 yrs. |
| Research and development facility in San Diego, CA | | — | | | 7,804 | | | 16,729 | | | 5,939 | | | (832) | | | 7,804 | | | 21,836 | | | 29,640 | | | 8,476 | | | 2002 | | Sep. 2012 | | 30 yrs. |
| Industrial facility in Richmond, CA | | — | | | 895 | | | 1,953 | | | — | | | — | | | 895 | | | 1,953 | | | 2,848 | | | 734 | | | 1999 | | Sep. 2012 | | 30 yrs. |
| Warehouse facilities in the United States | | — | | | 16,386 | | | 84,668 | | | 14,997 | | | — | | | 16,386 | | | 99,665 | | | 116,051 | | | 33,568 | | | Various | | Sep. 2012 | | 30 yrs. |
| Industrial facilities in Rocky Mount, NC and Lewisville, TX | | — | | | 2,163 | | | 17,715 | | | 609 | | | (8,389) | | | 1,132 | | | 10,966 | | | 12,098 | | | 4,109 | | | 1948; 1989 | | Sep. 2012 | | 30 yrs. |
| Industrial facilities in Chattanooga, TN | | — | | | 558 | | | 5,923 | | | — | | | — | | | 558 | | | 5,923 | | | 6,481 | | | 2,202 | | | 1974; 1989 | | Sep. 2012 | | 30 yrs. |
| | | | | |
| W. P. Carey 2021 10-K– 113 |
SCHEDULE III — REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)
December 31, 2021
(in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Initial Cost to Company | | Cost Capitalized
Subsequent to
Acquisition (a) | | Increase
(Decrease)
in Net
Investments (b) | | Gross Amount at which
Carried at Close of Period (c) (d) | | Accumulated Depreciation (d) | | Date of Construction | | Date Acquired | | Life on which
Depreciation in Latest
Statement of
Income
is Computed |
| | | | | | | | | | |
| | | | | | | | | | |
| Description | | Encumbrances | | Land | | Buildings | | | | Land | | Buildings | | Total | | | | |
| Fitness facility in Austin, TX | | — | | | 1,725 | | | 5,168 | | | — | | | — | | | 1,725 | | | 5,168 | | | 6,893 | | | 2,735 | | | 1995 | | Dec. 2006 | | 29 yrs. |
| Retail facility in Wroclaw, Poland | | — | | | 3,600 | | | 10,306 | | | — | | | (3,664) | | | 2,832 | | | 7,410 | | | 10,242 | | | 2,576 | | | 2007 | | Dec. 2007 | | 40 yrs. |
| Office facility in Fort Worth, TX | | — | | | 4,600 | | | 37,580 | | | 186 | | | — | | | 4,600 | | | 37,766 | | | 42,366 | | | 11,240 | | | 2003 | | Feb. 2010 | | 40 yrs. |
| Warehouse facility in Mallorca, Spain | | — | | | 11,109 | | | 12,636 | | | — | | | (1,230) | | | 10,514 | | | 12,001 | | | 22,515 | | | 3,472 | | | 2008 | | Jun. 2010 | | 40 yrs. |
| Net-lease hotels in Irvine, Sacramento, and San Diego, CA; Orlando, FL; Des Plaines, IL; Indianapolis, IN; Louisville, KY; Linthicum Heights, MD; Newark, NJ; Albuquerque, NM; and Spokane, WA | | — | | | 32,680 | | | 198,999 | | | — | | | — | | | 32,680 | | | 198,999 | | | 231,679 | | | 50,737 | | | 1989; 1990 | | Sep. 2012 | | 34 - 37 yrs. |
| Industrial facilities in Auburn, IN; Clinton Township, MI; and Bluffton, OH | | — | | | 4,403 | | | 20,298 | | | — | | | (3,870) | | | 2,589 | | | 18,242 | | | 20,831 | | | 5,276 | | | 1968; 1975; 1995 | | Sep. 2012; Jan. 2014 | | 30 yrs. |
| Office facility in Irvine, CA | | — | | | 4,173 | | | — | | | — | | | 13,766 | | | 4,173 | | | 13,766 | | | 17,939 | | | 224 | | | 1981 | | Sep. 2012 | | 31 yrs. |
| Industrial facility in Alpharetta, GA | | — | | | 2,198 | | | 6,349 | | | 1,247 | | | — | | | 2,198 | | | 7,596 | | | 9,794 | | | 2,383 | | | 1997 | | Sep. 2012 | | 30 yrs. |
| Office facility in Clinton, NJ | | 13,360 | | | 2,866 | | | 34,834 | | | — | | | (16,301) | | | 2,866 | | | 18,533 | | | 21,399 | | | 10,570 | | | 1987 | | Sep. 2012 | | 30 yrs. |
| Office facilities in St. Petersburg, FL | | — | | | 3,280 | | | 24,627 | | | 3,288 | | | — | | | 3,280 | | | 27,915 | | | 31,195 | | | 8,089 | | | 1996; 1999 | | Sep. 2012 | | 30 yrs. |
| Movie theater in Baton Rouge, LA | | — | | | 4,168 | | | 5,724 | | | 3,200 | | | — | | | 4,168 | | | 8,924 | | | 13,092 | | | 2,700 | | | 2003 | | Sep. 2012 | | 30 yrs. |
| Industrial and office facility in San Diego, CA | | — | | | 7,804 | | | 16,729 | | | 5,415 | | | (832) | | | 7,804 | | | 21,312 | | | 29,116 | | | 6,778 | | | 2002 | | Sep. 2012 | | 30 yrs. |
| Industrial facility in Richmond, CA | | — | | | 895 | | | 1,953 | | | — | | | — | | | 895 | | | 1,953 | | | 2,848 | | | 604 | | | 1999 | | Sep. 2012 | | 30 yrs. |
| Warehouse facilities in Kingman, AZ; Woodland, CA; Jonesboro, GA; Kansas City, MO; Springfield, OR; Fogelsville, PA; and Corsicana, TX | | — | | | 16,386 | | | 84,668 | | | 8,737 | | | — | | | 16,386 | | | 93,405 | | | 109,791 | | | 26,470 | | | Various | | Sep. 2012 | | 30 yrs. |
| Industrial facilities in Rocky Mount, NC and Lewisville, TX | | — | | | 2,163 | | | 17,715 | | | 609 | | | (8,389) | | | 1,132 | | | 10,966 | | | 12,098 | | | 3,341 | | | 1948; 1989 | | Sep. 2012 | | 30 yrs. |
| Industrial facilities in Chattanooga, TN | | — | | | 558 | | | 5,923 | | | — | | | — | | | 558 | | | 5,923 | | | 6,481 | | | 1,810 | | | 1974; 1989 | | Sep. 2012 | | 30 yrs. |
| Industrial facility in Mooresville, NC | | — | | | 756 | | | 9,775 | | | — | | | — | | | 756 | | | 9,775 | | | 10,531 | | | 2,979 | | | 1997 | | Sep. 2012 | | 30 yrs. |
| Industrial facility in McCalla, AL | | — | | | 960 | | | 14,472 | | | 42,662 | | | (254) | | | 2,076 | | | 55,764 | | | 57,840 | | | 10,959 | | | 2004 | | Sep. 2012 | | 31 yrs. |
| Office facility in Lower Makefield Township, PA | | — | | | 1,726 | | | 12,781 | | | 4,378 | | | — | | | 1,726 | | | 17,159 | | | 18,885 | | | 4,847 | | | 2002 | | Sep. 2012 | | 30 yrs. |
| Industrial facility in Fort Smith, AZ | | — | | | 1,063 | | | 6,159 | | | — | | | — | | | 1,063 | | | 6,159 | | | 7,222 | | | 1,857 | | | 1982 | | Sep. 2012 | | 30 yrs. |
| Retail facilities in Greenwood, IN and Buffalo, NY | | 3,035 | | | — | | | 19,990 | | | — | | | — | | | — | | | 19,990 | | | 19,990 | | | 5,963 | | | 2000; 2003 | | Sep. 2012 | | 30 - 31 yrs. |
| Industrial facilities in Bowling Green, KY and Jackson, TN | | — | | | 1,492 | | | 8,182 | | | 600 | | | — | | | 1,492 | | | 8,782 | | | 10,274 | | | 2,481 | | | 1989; 1995 | | Sep. 2012 | | 31 yrs. |
| Education facilities in Rancho Cucamonga, CA and Exton, PA | | — | | | 14,006 | | | 33,683 | | | 9,428 | | | (20,142) | | | 6,638 | | | 30,337 | | | 36,975 | | | 6,893 | | | 2004 | | Sep. 2012 | | 31 - 32 yrs. |
| Industrial facilities in St. Petersburg, FL; Buffalo Grove, IL; West Lafayette, IN; Excelsior Springs, MO; and North Versailles, PA | | — | | | 6,559 | | | 19,078 | | | 3,285 | | | — | | | 6,559 | | | 22,363 | | | 28,922 | | | 5,859 | | | Various | | Sep. 2012 | | 31 yrs. |
| Industrial and warehouse facility in Mesquite, TX | | — | | | 2,702 | | | 13,029 | | | — | | | — | | | 2,702 | | | 13,029 | | | 15,731 | | | 85 | | | 1972 | | Sep. 2012 | | 31 yrs. |
| | | | | |
| W. P. Carey 2021 10-K– 114
|
SCHEDULE III — REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)
December 31, 2021
(in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | Cost Capitalized
Subsequent to
Acquisition (a) | | Increase
(Decrease)
in Net
Investments (b) | | Gross Amount at which
Carried at Close of Period (c) (d) | | Accumulated Depreciation (d) | | Date of Construction | | Date Acquired | | Life on which
Depreciation in Latest
Statement of
Income
is Computed |
| | | | | | | | | | | | | |
| | | | Initial Cost to Company | | | | | | | |
| Description | | Encumbrances | | Land | | Buildings | | | | Land | | Buildings | | Total | | | | |
| Industrial facilities in Tolleson, AZ; Alsip, IL; and Solvay, NY | | — | | | 6,080 | | | 23,424 | | | — | | | — | | | 6,080 | | | 23,424 | | | 29,504 | | | 6,931 | | | 1990; 1994; 2000 | | Sep. 2012 | | 31 yrs. |
| Fitness facilities in Memphis TN and Bedford, TX | | — | | | 4,877 | | | 4,258 | | | 5,215 | | | 1,156 | | | 3,023 | | | 12,483 | | | 15,506 | | | 4,557 | | | 1990; 1995 | | Sep. 2012 | | 31 yrs. |
| Warehouse facilities in Oceanside, CA and Concordville, PA | | 1,487 | | | 3,333 | | | 8,270 | | | — | | | — | | | 3,333 | | | 8,270 | | | 11,603 | | | 2,454 | | | 1989; 1996 | | Sep. 2012 | | 31 yrs. |
| Net-lease self-storage facilities located throughout the United States | | — | | | 74,551 | | | 319,186 | | | — | | | (50) | | | 74,501 | | | 319,186 | | | 393,687 | | | 93,694 | | | Various | | Sep. 2012 | | 31 yrs. |
| Warehouse facility in La Vista, NE | | 17,740 | | | 4,196 | | | 23,148 | | | — | | | — | | | 4,196 | | | 23,148 | | | 27,344 | | | 6,403 | | | 2005 | | Sep. 2012 | | 33 yrs. |
| Office facility in Pleasanton, CA | | — | | | 3,675 | | | 7,468 | | | — | | | — | | | 3,675 | | | 7,468 | | | 11,143 | | | 2,186 | | | 2000 | | Sep. 2012 | | 31 yrs. |
| Office facility in San Marcos, TX | | — | | | 440 | | | 688 | | | — | | | — | | | 440 | | | 688 | | | 1,128 | | | 201 | | | 2000 | | Sep. 2012 | | 31 yrs. |
| Office facility in Chicago, IL | | — | | | 2,169 | | | 19,010 | | | 83 | | | (72) | | | 2,169 | | | 19,021 | | | 21,190 | | | 5,522 | | | 1910 | | Sep. 2012 | | 31 yrs. |
| Industrial facilities in Hollywood and Orlando, FL | | — | | | 3,639 | | | 1,269 | | | — | | | — | | | 3,639 | | | 1,269 | | | 4,908 | | | 369 | | | 1996 | | Sep. 2012 | | 31 yrs. |
| Warehouse facility in Golden, CO | | — | | | 808 | | | 4,304 | | | 77 | | | — | | | 808 | | | 4,381 | | | 5,189 | | | 1,399 | | | 1998 | | Sep. 2012 | | 30 yrs. |
| Industrial facility in Texarkana, TX | | — | | | 1,755 | | | 4,493 | | | — | | | (2,783) | | | 216 | | | 3,249 | | | 3,465 | | | 944 | | | 1997 | | Sep. 2012 | | 31 yrs. |
| Industrial facility in South Jordan, UT | | — | | | 2,183 | | | 11,340 | | | 1,642 | | | — | | | 2,183 | | | 12,982 | | | 15,165 | | | 3,656 | | | 1995 | | Sep. 2012 | | 31 yrs. |
| Warehouse facility in Ennis, TX | | — | | | 478 | | | 4,087 | | | 145 | | | (145) | | | 478 | | | 4,087 | | | 4,565 | | | 1,187 | | | 1989 | | Sep. 2012 | | 31 yrs. |
| Office facility in Paris, France | | — | | | 23,387 | | | 43,450 | | | 703 | | | (7,980) | | | 20,597 | | | 38,963 | | | 59,560 | | | 10,876 | | | 1975 | | Sep. 2012 | | 32 yrs. |
| Retail facilities in Bydgoszcz, Czestochowa, Jablonna, Katowice, Kielce, Lodz, Lubin, Olsztyn, Opole, Plock, Rybnik, Walbrzych, and Warsaw, Poland | | — | | | 26,564 | | | 72,866 | | | — | | | (11,902) | | | 23,354 | | | 64,174 | | | 87,528 | | | 24,959 | | | Various | | Sep. 2012 | | 23 - 34 yrs. |
| Industrial facilities in Danbury, CT and Bedford, MA | | — | | | 3,519 | | | 16,329 | | | — | | | — | | | 3,519 | | | 16,329 | | | 19,848 | | | 5,061 | | | 1965; 1980 | | Sep. 2012 | | 29 yrs. |
| Industrial facility in Brownwood, TX | | — | | | 722 | | | 6,268 | | | — | | | — | | | 722 | | | 6,268 | | | 6,990 | | | 1,254 | | | 1964 | | Sep. 2012 | | 15 yrs. |
| Industrial facility in Rochester, MN | | — | | | 809 | | | 14,236 | | | — | | | — | | | 809 | | | 14,236 | | | 15,045 | | | 208 | | | 1997 | | Sep. 2012 | | 31 yrs. |
| Industrial and office facility in Tampere, Finland | | — | | | 2,309 | | | 37,153 | | | — | | | (5,177) | | | 1,981 | | | 32,304 | | | 34,285 | | | 8,857 | | | 2012 | | Jun. 2013 | | 40 yrs. |
| Office facility in Quincy, MA | | — | | | 2,316 | | | 21,537 | | | 127 | | | — | | | 2,316 | | | 21,664 | | | 23,980 | | | 5,031 | | | 1989 | | Jun. 2013 | | 40 yrs. |
| Office facility in Salford, United Kingdom | | — | | | — | | | 30,012 | | | — | | | (4,152) | | | — | | | 25,860 | | | 25,860 | | | 5,505 | | | 1997 | | Sep. 2013 | | 40 yrs. |
| Office facility in Lone Tree, CO | | — | | | 4,761 | | | 28,864 | | | 3,381 | | | — | | | 4,761 | | | 32,245 | | | 37,006 | | | 7,769 | | | 2001 | | Nov. 2013 | | 40 yrs. |
| Office facility in Mönchengladbach, Germany | | 30,302 | | | 2,154 | | | 6,917 | | | 50,626 | | | (1,254) | | | 2,175 | | | 56,268 | | | 58,443 | | | 8,627 | | | 2015 | | Dec. 2013 | | 40 yrs. |
| Fitness facility in Houston, TX | | — | | | 2,430 | | | 2,270 | | | — | | | — | | | 2,430 | | | 2,270 | | | 4,700 | | | 802 | | | 1995 | | Jan. 2014 | | 23 yrs. |
| Fitness facility in St. Charles, MO | | — | | | 1,966 | | | 1,368 | | | 1,352 | | | — | | | 1,966 | | | 2,720 | | | 4,686 | | | 962 | | | 1987 | | Jan. 2014 | | 27 yrs. |
| Office facility in Scottsdale, AZ | | — | | | 22,300 | | | 42,329 | | | — | | | — | | | 22,300 | | | 42,329 | | | 64,629 | | | 1,788 | | | 1977 | | Jan. 2014 | | 34 yrs. |
| Industrial facility in Aurora, CO | | — | | | 737 | | | 2,609 | | | — | | | — | | | 737 | | | 2,609 | | | 3,346 | | | 654 | | | 1985 | | Jan. 2014 | | 32 yrs. |
| Warehouse facility in Burlington, NJ | | — | | | 3,989 | | | 6,213 | | | 377 | | | — | | | 3,989 | | | 6,590 | | | 10,579 | | | 2,058 | | | 1999 | | Jan. 2014 | | 26 yrs. |
| | | | | |
| W. P. Carey 2021 10-K– 115
|
SCHEDULE III — REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)
December 31, 2021
(in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | Cost Capitalized
Subsequent to
Acquisition (a) | | Increase
(Decrease)
in Net
Investments (b) | | Gross Amount at which
Carried at Close of Period (c) (d) | | Accumulated Depreciation (d) | | Date of Construction | | Date Acquired | | Life on which
Depreciation in Latest
Statement of
Income
is Computed |
| | | | | | | | | | | | | |
| | | | Initial Cost to Company | | | | | | | |
| Description | | Encumbrances | | Land | | Buildings | | | | Land | | Buildings | | Total | | | | |
| Industrial facility in Albuquerque, NM | | — | | | 2,467 | | | 3,476 | | | 606 | | | — | | | 2,467 | | | 4,082 | | | 6,549 | | | 1,223 | | | 1993 | | Jan. 2014 | | 27 yrs. |
| Industrial facility in North Salt Lake, UT | | — | | | 10,601 | | | 17,626 | | | — | | | (16,936) | | | 4,388 | | | 6,903 | | | 11,291 | | | 2,088 | | | 1981 | | Jan. 2014 | | 26 yrs. |
| Industrial facility in Lexington, NC | | — | | | 2,185 | | | 12,058 | | | — | | | (2,519) | | | 494 | | | 11,230 | | | 11,724 | | | 3,203 | | | 2003 | | Jan. 2014 | | 28 yrs. |
| Land in Welcome, NC | | — | | | 980 | | | 11,230 | | | — | | | (11,724) | | | 486 | | | — | | | 486 | | | — | | | N/A | | Jan. 2014 | | N/A |
| Industrial facilities in Evansville, IN; Lawrence, KS; and Baltimore, MD | | — | | | 4,005 | | | 44,192 | | | — | | | — | | | 4,005 | | | 44,192 | | | 48,197 | | | 14,677 | | | 1911; 1967; 1982 | | Jan. 2014 | | 24 yrs. |
| Industrial facilities in Colton, CA; Bonner Springs, KS; and Dallas, TX and land in Eagan, MN | | — | | | 8,451 | | | 25,457 | | | — | | | 298 | | | 8,451 | | | 25,755 | | | 34,206 | | | 7,099 | | | 1978; 1979; 1986 | | Jan. 2014 | | 17 - 34 yrs. |
| Retail facility in Torrance, CA | | — | | | 8,412 | | | 12,241 | | | 1,839 | | | (76) | | | 8,335 | | | 14,081 | | | 22,416 | | | 4,584 | | | 1973 | | Jan. 2014 | | 25 yrs. |
| Office facility in Houston, TX | | — | | | 6,578 | | | 424 | | | 560 | | | — | | | 6,578 | | | 984 | | | 7,562 | | | 547 | | | 1978 | | Jan. 2014 | | 27 yrs. |
| Land in Doncaster, United Kingdom | | — | | | 4,257 | | | 4,248 | | | — | | | (8,103) | | | 402 | | | — | | | 402 | | | — | | | N/A | | Jan. 2014 | | N/A |
| Warehouse facility in Norwich, CT | | — | | | 3,885 | | | 21,342 | | | — | | | 2 | | | 3,885 | | | 21,344 | | | 25,229 | | | 5,981 | | | 1960 | | Jan. 2014 | | 28 yrs. |
| Warehouse facility in Norwich, CT | | — | | | 1,437 | | | 9,669 | | | — | | | — | | | 1,437 | | | 9,669 | | | 11,106 | | | 2,710 | | | 2005 | | Jan. 2014 | | 28 yrs. |
| Warehouse facility in Whitehall, PA | | — | | | 7,435 | | | 9,093 | | | 26,529 | | | (9,545) | | | 6,983 | | | 26,529 | | | 33,512 | | | 240 | | | 2021 | | Jan. 2014 | | 40 yrs. |
| Retail facility in York, PA | | — | | | 3,776 | | | 10,092 | | | — | | | (6,413) | | | 527 | | | 6,928 | | | 7,455 | | | 1,625 | | | 2005 | | Jan. 2014 | | 34 yrs. |
| Industrial facility in Pittsburgh, PA | | — | | | 1,151 | | | 10,938 | | | — | | | — | | | 1,151 | | | 10,938 | | | 12,089 | | | 3,498 | | | 1991 | | Jan. 2014 | | 25 yrs. |
| Warehouse facilities in Atlanta, GA and Elkwood, VA | | — | | | 5,356 | | | 4,121 | | | — | | | (2,104) | | | 4,284 | | | 3,089 | | | 7,373 | | | 878 | | | 1975 | | Jan. 2014 | | 28 yrs. |
| Warehouse facility in Harrisburg, NC | | — | | | 1,753 | | | 5,840 | | | 781 | | | (111) | | | 1,642 | | | 6,621 | | | 8,263 | | | 1,796 | | | 2000 | | Jan. 2014 | | 26 yrs. |
| Industrial facility in Chandler, AZ; industrial, office, and warehouse facility in Englewood, CO; and land in Englewood, CO | | 2,209 | | | 4,306 | | | 7,235 | | | — | | | 3 | | | 4,306 | | | 7,238 | | | 11,544 | | | 1,894 | | | 1978; 1987 | | Jan. 2014 | | 30 yrs. |
| Industrial facility in Cynthiana, KY | | 1,130 | | | 1,274 | | | 3,505 | | | 525 | | | (107) | | | 1,274 | | | 3,923 | | | 5,197 | | | 1,107 | | | 1967 | | Jan. 2014 | | 31 yrs. |
| Industrial facilities in Albemarle and Old Fort, NC and Holmesville, OH | | — | | | 5,507 | | | 18,653 | | | — | | | — | | | 5,507 | | | 18,653 | | | 24,160 | | | 145 | | | 1955; 1966; 1970 | | Jan. 2014 | | 32 yrs. |
| Industrial facility in Columbia, SC | | — | | | 2,843 | | | 11,886 | | | — | | | — | | | 2,843 | | | 11,886 | | | 14,729 | | | 4,166 | | | 1962 | | Jan. 2014 | | 23 yrs. |
| Movie theater in Midlothian, VA | | — | | | 2,824 | | | 16,618 | | | — | | | — | | | 2,824 | | | 16,618 | | | 19,442 | | | 1,742 | | | 2000 | | Jan. 2014 | | 40 yrs. |
| Net-lease student housing facility in Laramie, WY | | — | | | 1,966 | | | 18,896 | | | — | | | — | | | 1,966 | | | 18,896 | | | 20,862 | | | 5,383 | | | 2007 | | Jan. 2014 | | 33 yrs. |
| Warehouse facilities in Mendota, IL; Toppenish, WA; and Plover, WI | | — | | | 1,444 | | | 21,208 | | | — | | | (623) | | | 1,382 | | | 20,647 | | | 22,029 | | | 7,291 | | | 1996 | | Jan. 2014 | | 23 yrs. |
| Office facility in Sunnyvale, CA | | — | | | 9,297 | | | 24,086 | | | — | | | (14,792) | | | 7,306 | | | 11,285 | | | 18,591 | | | 11,285 | | | 1981 | | Jan. 2014 | | 31 yrs. |
| Industrial facilities in Hampton, NH | | — | | | 8,990 | | | 7,362 | | | — | | | — | | | 8,990 | | | 7,362 | | | 16,352 | | | 1,921 | | | 1976 | | Jan. 2014 | | 30 yrs. |
| Industrial facilities located throughout France | | — | | | 36,306 | | | 5,212 | | | 337 | | | 6,367 | | | 26,219 | | | 22,003 | | | 48,222 | | | 2,444 | | | Various | | Jan. 2014 | | 23 yrs. |
| Retail facility in Fairfax, VA | | — | | | 3,402 | | | 16,353 | | | — | | | — | | | 3,402 | | | 16,353 | | | 19,755 | | | 4,916 | | | 1998 | | Jan. 2014 | | 26 yrs. |
| Retail facility in Lombard, IL | | — | | | 5,087 | | | 8,578 | | | — | | | — | | | 5,087 | | | 8,578 | | | 13,665 | | | 2,578 | | | 1999 | | Jan. 2014 | | 26 yrs. |
| Warehouse facility in Plainfield, IN | | — | | | 1,578 | | | 29,415 | | | 706 | | | — | | | 1,578 | | | 30,121 | | | 31,699 | | | 7,710 | | | 1997 | | Jan. 2014 | | 30 yrs. |
| | | | | |
| W. P. Carey 2021 10-K– 116
|
SCHEDULE III — REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)
December 31, 2021
(in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Initial Cost to Company | | Cost Capitalized Subsequent to Acquisition (a) | | Increase (Decrease) in Net Investments (b) | | Gross Amount at which Carried at Close of Period (c) (d) | | Accumulated Depreciation (d) | | Date of Construction | | Date Acquired | | Life on which
Depreciation in Latest
Statement of
Income
is Computed |
| | | | | | | | | | |
| | | | | | | | | | |
| Description | | Encumbrances | | Land | | Buildings | | | | Land | | Buildings | | Total | | | | |
| Retail facility in Kennesaw, GA | | — | | | 2,849 | | | 6,180 | | | 5,530 | | | (76) | | | 2,773 | | | 11,710 | | | 14,483 | | | 3,369 | | | 1999 | | Jan. 2014 | | 26 yrs. |
| Retail facility in Leawood, KS | | — | | | 1,487 | | | 13,417 | | | — | | | — | | | 1,487 | | | 13,417 | | | 14,904 | | | 4,033 | | | 1997 | | Jan. 2014 | | 26 yrs. |
| Office facility in Tolland, CT | | — | | | 1,817 | | | 5,709 | | | — | | | 11 | | | 1,817 | | | 5,720 | | | 7,537 | | | 1,651 | | | 1968 | | Jan. 2014 | | 28 yrs. |
| Warehouse facilities in Lincolnton, NC and Mauldin, SC | | — | | | 1,962 | | | 9,247 | | | — | | | — | | | 1,962 | | | 9,247 | | | 11,209 | | | 2,607 | | | 1988; 1996 | | Jan. 2014 | | 28 yrs. |
| Retail facilities located throughout Germany | | — | | | 81,109 | | | 153,927 | | | 10,510 | | | (135,774) | | | 27,939 | | | 81,833 | | | 109,772 | | | 21,202 | | | Various | | Jan. 2014 | | Various |
| Office facility in Southfield, MI | | — | | | 1,726 | | | 4,856 | | | 89 | | | — | | | 1,726 | | | 4,945 | | | 6,671 | | | 1,264 | | | 1985 | | Jan. 2014 | | 31 yrs. |
| Office facility in The Woodlands, TX | | — | | | 3,204 | | | 24,997 | | | — | | | — | | | 3,204 | | | 24,997 | | | 28,201 | | | 6,282 | | | 1997 | | Jan. 2014 | | 32 yrs. |
| Warehouse facilities in Valdosta, GA and Johnson City, TN | | — | | | 1,080 | | | 14,998 | | | 1,841 | | | — | | | 1,080 | | | 16,839 | | | 17,919 | | | 4,726 | | | 1978; 1998 | | Jan. 2014 | | 27 yrs. |
| Industrial facility in Amherst, NY | | 6,273 | | | 674 | | | 7,971 | | | — | | | — | | | 674 | | | 7,971 | | | 8,645 | | | 2,815 | | | 1984 | | Jan. 2014 | | 23 yrs. |
| Industrial and warehouse facilities in Westfield, MA | | — | | | 1,922 | | | 9,755 | | | 7,435 | | | 9 | | | 1,922 | | | 17,199 | | | 19,121 | | | 5,051 | | | 1954; 1997 | | Jan. 2014 | | 28 yrs. |
| Warehouse facility in Kotka, Finland | | — | | | — | | | 8,546 | | | — | | | (6,971) | | | — | | | 1,575 | | | 1,575 | | | 1,295 | | | 2001 | | Jan. 2014 | | 23 yrs. |
| Office facility in Bloomington, MN | | — | | | 2,942 | | | 7,155 | | | — | | | — | | | 2,942 | | | 7,155 | | | 10,097 | | | 1,999 | | | 1988 | | Jan. 2014 | | 28 yrs. |
| Warehouse facility in Gorinchem, Netherlands | | 2,750 | | | 1,143 | | | 5,648 | | | — | | | (1,141) | | | 951 | | | 4,699 | | | 5,650 | | | 1,313 | | | 1995 | | Jan. 2014 | | 28 yrs. |
| Retail facility in Cresskill, NJ | | — | | | 2,366 | | | 5,482 | | | — | | | 19 | | | 2,366 | | | 5,501 | | | 7,867 | | | 1,398 | | | 1975 | | Jan. 2014 | | 31 yrs. |
| Retail facility in Livingston, NJ | | — | | | 2,932 | | | 2,001 | | | — | | | 14 | | | 2,932 | | | 2,015 | | | 4,947 | | | 587 | | | 1966 | | Jan. 2014 | | 27 yrs. |
| Retail facility in Montclair, NJ | | — | | | 1,905 | | | 1,403 | | | — | | | 6 | | | 1,905 | | | 1,409 | | | 3,314 | | | 410 | | | 1950 | | Jan. 2014 | | 27 yrs. |
| Retail facility in Morristown, NJ | | — | | | 3,258 | | | 8,352 | | | — | | | 26 | | | 3,258 | | | 8,378 | | | 11,636 | | | 2,441 | | | 1973 | | Jan. 2014 | | 27 yrs. |
| Retail facility in Summit, NJ | | — | | | 1,228 | | | 1,465 | | | — | | | 8 | | | 1,228 | | | 1,473 | | | 2,701 | | | 429 | | | 1950 | | Jan. 2014 | | 27 yrs. |
| Industrial facilities in Georgetown, TX and Woodland, WA | | — | | | 965 | | | 4,113 | | | — | | | — | | | 965 | | | 4,113 | | | 5,078 | | | 965 | | | 1998; 2001 | | Jan. 2014 | | 33 - 35 yrs. |
| Education facilities in Union, NJ; Allentown and Philadelphia, PA; and Grand Prairie, TX | | — | | | 5,365 | | | 7,845 | | | — | | | 5 | | | 5,365 | | | 7,850 | | | 13,215 | | | 2,233 | | | Various | | Jan. 2014 | | 28 yrs. |
| Industrial facility in Salisbury, NC | | — | | | 1,499 | | | 8,185 | | | — | | | — | | | 1,499 | | | 8,185 | | | 9,684 | | | 2,335 | | | 2000 | | Jan. 2014 | | 28 yrs. |
| Industrial facility in Twinsburg, OH and office facility in Plymouth, MI | | — | | | 2,831 | | | 10,565 | | | 386 | | | (2,244) | | | 2,501 | | | 9,037 | | | 11,538 | | | 2,553 | | | 1991; 1995 | | Jan. 2014 | | 27 yrs. |
| Industrial facility in Cambridge, Canada | | — | | | 1,849 | | | 7,371 | | | — | | | (1,110) | | | 1,626 | | | 6,484 | | | 8,110 | | | 1,643 | | | 2001 | | Jan. 2014 | | 31 yrs. |
| Industrial facilities in Peru, IL; Huber Heights, Lima, and Sheffield, OH; and Lebanon, TN | | — | | | 2,962 | | | 17,832 | | | — | | | — | | | 2,962 | | | 17,832 | | | 20,794 | | | 4,517 | | | Various | | Jan. 2014 | | 31 yrs. |
| Industrial facility in Ramos Arizpe, Mexico | | — | | | 1,059 | | | 2,886 | | | — | | | — | | | 1,059 | | | 2,886 | | | 3,945 | | | 729 | | | 2000 | | Jan. 2014 | | 31 yrs. |
| | | | | |
| W. P. Carey 2021 10-K– 117
|
SCHEDULE III — REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)
December 31, 2021
(in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Initial Cost to Company | | Cost Capitalized Subsequent to Acquisition (a) | | Increase (Decrease) in Net Investments (b) | | Gross Amount at which Carried at Close of Period (c) (d) | | Accumulated Depreciation (d) | | Date of Construction | | Date Acquired | | Life on which
Depreciation in Latest
Statement of
Income
is Computed |
| | | | | | | | | | |
| | | | | | | | | | |
| Description | | Encumbrances | | Land | | Buildings | | | | Land | | Buildings | | Total | | | | |
| Industrial facilities in Salt Lake City, UT | | — | | | 2,783 | | | 3,773 | | | — | | | — | | | 2,783 | | | 3,773 | | | 6,556 | | | 955 | | | 1983; 2002 | | Jan. 2014 | | 31 - 33 yrs. |
| Net-lease student housing facility in Blairsville, PA | | — | | | 1,631 | | | 23,163 | | | — | | | — | | | 1,631 | | | 23,163 | | | 24,794 | | | 6,385 | | | 2005 | | Jan. 2014 | | 33 yrs. |
| Education facility in Mooresville, NC | | 966 | | | 1,795 | | | 15,955 | | | — | | | — | | | 1,795 | | | 15,955 | | | 17,750 | | | 501 | | | 2002 | | Jan. 2014 | | 33 yrs. |
| Warehouse facilities in Atlanta, Doraville, and Rockmart, GA | | — | | | 6,488 | | | 77,192 | | | — | | | — | | | 6,488 | | | 77,192 | | | 83,680 | | | 21,418 | | | 1959; 1962; 1991 | | Jan. 2014 | | 23 - 33 yrs. |
| Warehouse facility in Muskogee, OK | | — | | | 554 | | | 4,353 | | | — | | | (3,437) | | | 158 | | | 1,312 | | | 1,470 | | | 317 | | | 1992 | | Jan. 2014 | | 33 yrs. |
| Industrial facility in Richmond, MO | | — | | | 2,211 | | | 8,505 | | | 747 | | | — | | | 2,211 | | | 9,252 | | | 11,463 | | | 2,584 | | | 1996 | | Jan. 2014 | | 28 yrs. |
| Industrial facility in Tuusula, Finland | | — | | | 6,173 | | | 10,321 | | | — | | | (2,769) | | | 5,137 | | | 8,588 | | | 13,725 | | | 2,666 | | | 1975 | | Jan. 2014 | | 26 yrs. |
| Office facility in Turku, Finland | | — | | | 5,343 | | | 34,106 | | | 1,320 | | | (6,662) | | | 4,445 | | | 29,662 | | | 34,107 | | | 8,091 | | | 1981 | | Jan. 2014 | | 28 yrs. |
| Industrial facility in Turku, Finland | | — | | | 1,105 | | | 10,243 | | | — | | | (1,890) | | | 920 | | | 8,538 | | | 9,458 | | | 2,437 | | | 1981 | | Jan. 2014 | | 28 yrs. |
| Industrial facility in Baraboo, WI | | — | | | 917 | | | 10,663 | | | 1,403 | | | — | | | 917 | | | 12,066 | | | 12,983 | | | 6,509 | | | 1988 | | Jan. 2014 | | 13 yrs. |
| Warehouse facility in Phoenix, AZ | | — | | | 6,747 | | | 21,352 | | | 380 | | | — | | | 6,747 | | | 21,732 | | | 28,479 | | | 6,211 | | | 1996 | | Jan. 2014 | | 28 yrs. |
| Land in Calgary, Canada | | — | | | 3,721 | | | — | | | — | | | (448) | | | 3,273 | | | — | | | 3,273 | | | — | | | N/A | | Jan. 2014 | | N/A |
| Industrial facilities in Sandersville, GA; Erwin, TN; and Gainesville, TX | | 1,024 | | | 955 | | | 4,779 | | | — | | | — | | | 955 | | | 4,779 | | | 5,734 | | | 1,220 | | | 1950; 1986; 1996 | | Jan. 2014 | | 31 yrs. |
| Industrial facility in Buffalo Grove, IL | | 3,523 | | | 1,492 | | | 12,233 | | | — | | | — | | | 1,492 | | | 12,233 | | | 13,725 | | | 3,132 | | | 1996 | | Jan. 2014 | | 31 yrs. |
| Industrial facilities in West Jordan, UT and Tacoma, WA; office facility in Eugene, OR; and warehouse facility in Perris, CA | | — | | | 8,989 | | | 5,435 | | | — | | | 8 | | | 8,989 | | | 5,443 | | | 14,432 | | | 1,534 | | | Various | | Jan. 2014 | | 28 yrs. |
| Office facility in Carlsbad, CA | | — | | | 3,230 | | | 5,492 | | | — | | | — | | | 3,230 | | | 5,492 | | | 8,722 | | | 1,843 | | | 1999 | | Jan. 2014 | | 24 yrs. |
| Movie theater in Pensacola, FL | | — | | | 1,746 | | | — | | | — | | | 5,181 | | | 1,746 | | | 5,181 | | | 6,927 | | | 206 | | | 2001 | | Jan. 2014 | | 33 yrs. |
| Movie theater in Port St. Lucie, FL | | — | | | 4,654 | | | 2,576 | | | — | | | — | | | 4,654 | | | 2,576 | | | 7,230 | | | 746 | | | 2000 | | Jan. 2014 | | 27 yrs. |
| Industrial facility in Nurieux-Volognat, France | | — | | | 121 | | | 5,328 | | | — | | | (814) | | | 100 | | | 4,535 | | | 4,635 | | | 1,110 | | | 2000 | | Jan. 2014 | | 32 yrs. |
| Industrial facility in Monheim, Germany | | — | | | 2,500 | | | 5,727 | | | — | | | (196) | | | 2,445 | | | 5,586 | | | 8,031 | | | 49 | | | 1992 | | Jan. 2014 | | 32 yrs. |
| Warehouse facility in Suwanee, GA | | — | | | 2,330 | | | 8,406 | | | — | | | — | | | 2,330 | | | 8,406 | | | 10,736 | | | 1,967 | | | 1995 | | Jan. 2014 | | 34 yrs. |
| Retail facilities in Wichita, KS and Oklahoma City, OK and warehouse facility in Wichita, KS | | — | | | 1,878 | | | 8,579 | | | 3,128 | | | (89) | | | 1,878 | | | 11,618 | | | 13,496 | | | 2,992 | | | 1954; 1975; 1984 | | Jan. 2014 | | 24 yrs. |
| Industrial facilities in Fort Dodge, IA and Menomonie and Oconomowoc, WI | | — | | | 1,403 | | | 11,098 | | | — | | | — | | | 1,403 | | | 11,098 | | | 12,501 | | | 5,407 | | | 1996 | | Jan. 2014 | | 16 yrs. |
| Industrial facility in Mesa, AZ | | — | | | 2,888 | | | 4,282 | | | — | | | — | | | 2,888 | | | 4,282 | | | 7,170 | | | 1,244 | | | 1991 | | Jan. 2014 | | 27 yrs. |
| Industrial facility in North Amityville, NY | | — | | | 3,486 | | | 11,413 | | | — | | | — | | | 3,486 | | | 11,413 | | | 14,899 | | | 3,474 | | | 1981 | | Jan. 2014 | | 26 yrs. |
| Industrial facility in Fort Collins, CO | | — | | | 821 | | | 7,236 | | | — | | | — | | | 821 | | | 7,236 | | | 8,057 | | | 1,745 | | | 1993 | | Jan. 2014 | | 33 yrs. |
| Warehouse facility in Elk Grove Village, IL | | — | | | 4,037 | | | 7,865 | | | — | | | — | | | 4,037 | | | 7,865 | | | 11,902 | | | 784 | | | 1980 | | Jan. 2014 | | 22 yrs. |
| Office facility in Washington, MI | | — | | | 4,085 | | | 7,496 | | | — | | | — | | | 4,085 | | | 7,496 | | | 11,581 | | | 1,812 | | | 1990 | | Jan. 2014 | | 33 yrs. |
| | | | | |
| W. P. Carey 2021 10-K– 118
|
SCHEDULE III — REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)
December 31, 2021
(in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Initial Cost to Company | | Cost Capitalized Subsequent to Acquisition (a) | | Increase (Decrease) in Net Investments (b) | | Gross Amount at which Carried at Close of Period (c) (d) | | Accumulated Depreciation (d) | | Date of Construction | | Date Acquired | | Life on which
Depreciation in Latest
Statement of
Income
is Computed |
| | | | | | | | | | |
| | | | | | | | | | | |
| Description | | Encumbrances | | Land | | Buildings | | | | Land | | Buildings | | Total | | | | |
| Office facility in Houston, TX | | — | | | 522 | | | 7,448 | | | 227 | | | — | | | 522 | | | 7,675 | | | 8,197 | | | 2,315 | | | 1999 | | Jan. 2014 | | 27 yrs. |
| Industrial facilities in Conroe, Odessa, and Weimar, TX and industrial and office facility in Houston, TX | | — | | | 4,049 | | | 13,021 | | | — | | | 133 | | | 4,049 | | | 13,154 | | | 17,203 | | | 5,578 | | | Various | | Jan. 2014 | | 12 - 22 yrs. |
| Education facility in Sacramento, CA | | 24,452 | | | — | | | 13,715 | | | — | | | — | | | — | | | 13,715 | | | 13,715 | | | 3,249 | | | 2005 | | Jan. 2014 | | 34 yrs. |
| Industrial facility in Sankt Ingbert, Germany | | — | | | 2,226 | | | 17,460 | | | — | | | 814 | | | 2,318 | | | 18,182 | | | 20,500 | | | 904 | | | 1960 | | Jan. 2014 | | 34 yrs. |
| Industrial facilities in City of Industry, CA; Chelmsford, MA; and Lancaster, TX | | — | | | 5,138 | | | 8,387 | | | — | | | 43 | | | 5,138 | | | 8,430 | | | 13,568 | | | 2,408 | | | 1969; 1974; 1984 | | Jan. 2014 | | 27 yrs. |
| Office facility in Tinton Falls, NJ | | — | | | 1,958 | | | 7,993 | | | 725 | | | — | | | 1,958 | | | 8,718 | | | 10,676 | | | 2,171 | | | 2001 | | Jan. 2014 | | 31 yrs. |
| Industrial facility in Woodland, WA | | — | | | 707 | | | 1,562 | | | — | | | — | | | 707 | | | 1,562 | | | 2,269 | | | 351 | | | 2009 | | Jan. 2014 | | 35 yrs. |
| Warehouse facilities in Gyál and Herceghalom, Hungary | | — | | | 14,601 | | | 21,915 | | | — | | | (6,133) | | | 12,148 | | | 18,235 | | | 30,383 | | | 7,070 | | | 2002; 2004 | | Jan. 2014 | | 21 yrs. |
| Industrial facility in Windsor, CT | | — | | | 453 | | | 637 | | | 3,422 | | | (83) | | | 453 | | | 3,976 | | | 4,429 | | | 569 | | | 1999 | | Jan. 2014 | | 33 yrs. |
| Industrial facility in Aurora, CO | | — | | | 574 | | | 3,999 | | | — | | | — | | | 574 | | | 3,999 | | | 4,573 | | | 807 | | | 2012 | | Jan. 2014 | | 40 yrs. |
| Office facility in Chandler, AZ | | — | | | 5,318 | | | 27,551 | | | 105 | | | — | | | 5,318 | | | 27,656 | | | 32,974 | | | 6,221 | | | 2000 | | Mar. 2014 | | 40 yrs. |
| Warehouse facility in University Park, IL | | — | | | 7,962 | | | 32,756 | | | 221 | | | — | | | 7,962 | | | 32,977 | | | 40,939 | | | 7,187 | | | 2008 | | May 2014 | | 40 yrs. |
| Office facility in Stavanger, Norway | | — | | | 10,296 | | | 91,744 | | | — | | | (30,175) | | | 7,321 | | | 64,544 | | | 71,865 | | | 12,102 | | | 1975 | | Aug. 2014 | | 40 yrs. |
| Laboratory facility in Westborough, MA | | — | | | 3,409 | | | 37,914 | | | 53,065 | | | — | | | 3,409 | | | 90,979 | | | 94,388 | | | 10,458 | | | 1992 | | Aug. 2014 | | 40 yrs. |
| Office facility in Andover, MA | | — | | | 3,980 | | | 45,120 | | | 323 | | | — | | | 3,980 | | | 45,443 | | | 49,423 | | | 8,723 | | | 2013 | | Oct. 2014 | | 40 yrs. |
| Office facility in Newport, United Kingdom | | — | | | — | | | 22,587 | | | — | | | (3,654) | | | — | | | 18,933 | | | 18,933 | | | 3,460 | | | 2014 | | Oct. 2014 | | 40 yrs. |
| Industrial facility in Lewisburg, OH | | — | | | 1,627 | | | 13,721 | | | — | | | — | | | 1,627 | | | 13,721 | | | 15,348 | | | 2,757 | | | 2014 | | Nov. 2014 | | 40 yrs. |
| Industrial facility in Opole, Poland | | — | | | 2,151 | | | 21,438 | | | — | | | (2,102) | | | 1,960 | | | 19,527 | | | 21,487 | | | 4,035 | | | 2014 | | Dec. 2014 | | 38 yrs. |
| Office facilities located throughout Spain | | — | | | 51,778 | | | 257,624 | | | 10 | | | (22,516) | | | 50,911 | | | 235,985 | | | 286,896 | | | 43,111 | | | Various | | Dec. 2014 | | Various |
| Retail facilities located throughout the United Kingdom | | — | | | 66,319 | | | 230,113 | | | 277 | | | (43,800) | | | 56,372 | | | 196,537 | | | 252,909 | | | 45,277 | | | Various | | Jan. 2015 | | 20 - 40 yrs. |
| Warehouse facility in Rotterdam, Netherlands | | — | | | — | | | 33,935 | | | 20,767 | | | 232 | | | — | | | 54,934 | | | 54,934 | | | 7,608 | | | 2014 | | Feb. 2015 | | 40 yrs. |
| Retail facility in Bad Fischau, Austria | | — | | | 2,855 | | | 18,829 | | | — | | | 1,108 | | | 3,001 | | | 19,791 | | | 22,792 | | | 3,888 | | | 1998 | | Apr. 2015 | | 40 yrs. |
| Industrial facility in Oskarshamn, Sweden | | — | | | 3,090 | | | 18,262 | | | — | | | (1,860) | | | 2,821 | | | 16,671 | | | 19,492 | | | 2,997 | | | 2015 | | Jun. 2015 | | 40 yrs. |
| Office facility in Sunderland, United Kingdom | | — | | | 2,912 | | | 30,140 | | | — | | | (4,464) | | | 2,518 | | | 26,070 | | | 28,588 | | | 4,843 | | | 2007 | | Aug. 2015 | | 40 yrs. |
| Industrial facilities in Gersthofen and Senden, Germany and Leopoldsdorf, Austria | | — | | | 9,449 | | | 15,838 | | | — | | | 440 | | | 9,613 | | | 16,114 | | | 25,727 | | | 3,176 | | | 2008; 2010 | | Aug. 2015 | | 40 yrs. |
| Net-lease hotels in Clive, IA; Baton Rouge, LA; St. Louis, MO; Greensboro, NC; Mount Laurel, NJ; and Fort Worth, TX | | — | | | — | | | 49,190 | | | 17,396 | | | — | | | 17,396 | | | 49,190 | | | 66,586 | | | 9,001 | | | 1988; 1989; 1990 | | Oct. 2015 | | 38 - 40 yrs. |
| | | | | |
| W. P. Carey 20212023 10-K – 119
|
SCHEDULE III — REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)
December 31, 20212023
(in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Initial Cost to Company | | Cost Capitalized Subsequent to Acquisition (a) | | Increase (Decrease) in Net Investments (b) | | Gross Amount at which Carried at Close of Period (c) (d) | | Accumulated Depreciation (d) | | Date of Construction | | Date Acquired | | Life on which
Depreciation in Latest
Statement of
Income
is Computed |
| | | | | | | | | | |
| | | | | | | | | | | |
| Description | | Encumbrances | | Land | | Buildings | | | | Land | | Buildings | | Total | | | | |
| Retail facilities in Almere, Amsterdam, Eindhoven, Houten, Nieuwegein, Utrecht, Veghel, and Zwaag, Netherlands | | — | | | 5,698 | | | 38,130 | | | 79 | | | 2,391 | | | 6,008 | | | 40,290 | | | 46,298 | | | 7,668 | | | Various | | Nov. 2015 | | 30 - 40 yrs. |
| Office facility in Irvine, CA | | — | | | 7,626 | | | 16,137 | | | — | | | — | | | 7,626 | | | 16,137 | | | 23,763 | | | 2,552 | | | 1977 | | Dec. 2015 | | 40 yrs. |
| Education facility in Windermere, FL | | — | | | 5,090 | | | 34,721 | | | 15,333 | | | — | | | 5,090 | | | 50,054 | | | 55,144 | | | 10,183 | | | 1998 | | Apr. 2016 | | 38 yrs. |
| Industrial facilities located throughout the United States | | — | | | 66,845 | | | 87,575 | | | 65,400 | | | (56,517) | | | 49,680 | | | 113,623 | | | 163,303 | | | 24,613 | | | Various | | Apr. 2016 | | Various |
| Industrial facilities in North Dumfries and Ottawa, Canada | | — | | | 17,155 | | | 10,665 | | | — | | | (17,990) | | | 6,097 | | | 3,733 | | | 9,830 | | | 1,637 | | | 1967; 1974 | | Apr. 2016 | | 28 yrs. |
| Education facilities in Coconut Creek, FL and Houston, TX | | — | | | 15,550 | | | 83,862 | | | 63,830 | | | — | | | 15,550 | | | 147,692 | | | 163,242 | | | 22,173 | | | 1979; 1984 | | May 2016 | | 37 - 40 yrs. |
| Office facility in Southfield, MI and warehouse facilities in London, KY and Gallatin, TN | | — | | | 3,585 | | | 17,254 | | | — | | | — | | | 3,585 | | | 17,254 | | | 20,839 | | | 2,517 | | | 1969; 1987; 2000 | | Nov. 2016 | | 35 - 36 yrs. |
| Industrial facilities in Brampton, Toronto, and Vaughan, Canada | | — | | | 28,759 | | | 13,998 | | | — | | | — | | | 28,759 | | | 13,998 | | | 42,757 | | | 2,433 | | | Various | | Nov. 2016 | | 28 - 35 yrs. |
| Industrial facilities in Queretaro and San Juan del Rio, Mexico | | — | | | 5,152 | | | 12,614 | | | — | | | — | | | 5,152 | | | 12,614 | | | 17,766 | | | 1,785 | | | Various | | Dec. 2016 | | 28 - 40 yrs. |
| Industrial facility in Chicago, IL | | — | | | 2,222 | | | 2,655 | | | 3,511 | | | — | | | 2,222 | | | 6,166 | | | 8,388 | | | 1,393 | | | 1985 | | Jun. 2017 | | 30 yrs. |
| Industrial facility in Zawiercie, Poland | | — | | | 395 | | | 102 | | | 10,378 | | | (316) | | | 383 | | | 10,176 | | | 10,559 | | | 939 | | | 2018 | | Aug. 2017 | | 40 yrs. |
| Office facility in Roseville, MN | | — | | | 2,560 | | | 16,025 | | | 141 | | | — | | | 2,560 | | | 16,166 | | | 18,726 | | | 1,872 | | | 2001 | | Nov. 2017 | | 40 yrs. |
| Industrial facility in Radomsko, Poland | | — | | | 1,718 | | | 59 | | | 14,454 | | | (501) | | | 1,670 | | | 14,060 | | | 15,730 | | | 1,172 | | | 2018 | | Nov. 2017 | | 40 yrs. |
| Warehouse facility in Sellersburg, IN | | — | | | 1,016 | | | 3,838 | | | — | | | — | | | 1,016 | | | 3,838 | | | 4,854 | | | 514 | | | 2000 | | Feb. 2018 | | 36 yrs. |
| Retail and warehouse facilities in Appleton, Madison, and Waukesha, WI | | — | | | 5,512 | | | 61,230 | | | — | | | — | | | 5,465 | | | 61,277 | | | 66,742 | | | 7,161 | | | 1995; 2004 | | Mar. 2018 | | 36 - 40 yrs. |
| Office and warehouse facilities located throughout Denmark | | — | | | 20,304 | | | 185,481 | | | — | | | (4,177) | | | 19,892 | | | 181,716 | | | 201,608 | | | 20,077 | | | Various | | Jun. 2018 | | 25 - 41 yrs. |
| Retail facilities located throughout the Netherlands | | — | | | 38,475 | | | 117,127 | | | — | | | (4,236) | | | 37,428 | | | 113,938 | | | 151,366 | | | 14,011 | | | Various | | Jul. 2018 | | 26 - 30 yrs. |
| Industrial facility in Oostburg, WI | | — | | | 786 | | | 6,589 | | | — | | | — | | | 786 | | | 6,589 | | | 7,375 | | | 1,023 | | | 2002 | | Jul. 2018 | | 35 yrs. |
| Warehouse facility in Kampen, Netherlands | | — | | | 3,251 | | | 12,858 | | | 126 | | | (363) | | | 3,177 | | | 12,695 | | | 15,872 | | | 1,765 | | | 1976 | | Jul. 2018 | | 26 yrs. |
| Warehouse facility in Azambuja, Portugal | | — | | | 13,527 | | | 35,631 | | | 28,067 | | | (2,159) | | | 13,235 | | | 61,831 | | | 75,066 | | | 5,284 | | | 1994 | | Sep. 2018 | | 28 yrs. |
| Retail facilities in Amsterdam, Moordrecht, and Rotterdam, Netherlands | | — | | | 2,582 | | | 18,731 | | | 11,338 | | | (142) | | | 2,569 | | | 29,940 | | | 32,509 | | | 2,689 | | | Various | | Oct. 2018 | | 27 - 37 yrs. |
| Office and warehouse facilities in Bad Wünnenberg and Soest, Germany | | — | | | 2,916 | | | 39,687 | | | — | | | (251) | | | 2,898 | | | 39,454 | | | 42,352 | | | 3,351 | | | 1982; 1986 | | Oct. 2018 | | 40 yrs. |
| Industrial facility in Norfolk, NE | | — | | | 802 | | | 3,686 | | | — | | | — | | | 802 | | | 3,686 | | | 4,488 | | | 396 | | | 1975 | | Oct. 2018 | | 40 yrs. |
| Education facility in Chicago, IL | | — | | | 7,720 | | | 17,266 | | | — | | | (7,945) | | | 5,113 | | | 11,928 | | | 17,041 | | | 1,459 | | | 1912 | | Oct. 2018 | | 40 yrs. |
| Fitness facilities in Phoenix, AZ and Columbia, MD | | — | | | 18,286 | | | 33,030 | | | — | | | — | | | 18,286 | | | 33,030 | | | 51,316 | | | 2,778 | | | 2006 | | Oct. 2018 | | 40 yrs. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Initial Cost to Company | | Cost Capitalized
Subsequent to
Acquisition (a) | | Increase
(Decrease)
in Net
Investments (b) | | Gross Amount at which
Carried at Close of Period (c) (d) | | Accumulated Depreciation (d) | | Date of Construction | | Date Acquired | | Life on which
Depreciation in Latest
Statement of
Income
is Computed |
| | | | | | | | | | |
| | | | | | | | | | |
| Description | | Encumbrances | | Land | | Buildings | | | | Land | | Buildings | | Total | | | | |
| Industrial facility in Mooresville, NC | | — | | | 756 | | | 9,775 | | | — | | | — | | | 756 | | | 9,775 | | | 10,531 | | | 3,624 | | | 1997 | | Sep. 2012 | | 30 yrs. |
| Industrial facility in McCalla, AL | | — | | | 960 | | | 14,472 | | | 42,662 | | | (254) | | | 2,076 | | | 55,764 | | | 57,840 | | | 14,475 | | | 2004 | | Sep. 2012 | | 31 yrs. |
| Industrial facility in Fort Smith, AZ | | — | | | 1,063 | | | 6,159 | | | — | | | — | | | 1,063 | | | 6,159 | | | 7,222 | | | 2,259 | | | 1982 | | Sep. 2012 | | 30 yrs. |
| Retail facilities in Greenwood, IN and Buffalo, NY | | 617 | | | — | | | 19,990 | | | — | | | — | | | — | | | 19,990 | | | 19,990 | | | 7,252 | | | 2000; 2003 | | Sep. 2012 | | 30 - 31 yrs. |
| Industrial facilities in Bowling Green, KY and Jackson, TN | | — | | | 1,492 | | | 8,182 | | | 600 | | | — | | | 1,492 | | | 8,782 | | | 10,274 | | | 3,061 | | | 1989; 1995 | | Sep. 2012 | | 31 yrs. |
| Education facility in Rancho Cucamonga, CA and laboratory facility in Exton, PA | | — | | | 14,006 | | | 33,683 | | | 9,659 | | | (20,142) | | | 6,638 | | | 30,568 | | | 37,206 | | | 9,521 | | | 2004 | | Sep. 2012 | | 31 - 32 yrs. |
| Industrial facilities in St. Petersburg, FL; Buffalo Grove, IL; West Lafayette, IN; Excelsior Springs, MO; and North Versailles, PA | | — | | | 6,559 | | | 19,078 | | | 3,285 | | | — | | | 6,559 | | | 22,363 | | | 28,922 | | | 7,456 | | | Various | | Sep. 2012 | | 31 yrs. |
| Industrial and warehouse facility in Mesquite, TX | | — | | | 2,702 | | | 13,029 | | | 1,450 | | | — | | | 2,702 | | | 14,479 | | | 17,181 | | | 928 | | | 1972 | | Sep. 2012 | | 31 yrs. |
| Industrial facilities in Tolleson, AZ; Alsip, IL; and Solvay, NY | | — | | | 6,080 | | | 23,424 | | | 546 | | | — | | | 6,080 | | | 23,970 | | | 30,050 | | | 8,465 | | | 1990; 1994; 2000 | | Sep. 2012 | | 31 yrs. |
| Retail facility in Memphis, TN | | — | | | 4,877 | | | 4,258 | | | 5,215 | | | (2,353) | | | 2,027 | | | 9,970 | | | 11,997 | | | 5,003 | | | 1990 | | Sep. 2012 | | 31 yrs. |
| Warehouse facilities in Oceanside, CA and Concordville, PA | | 578 | | | 3,333 | | | 8,270 | | | 116 | | | — | | | 3,333 | | | 8,386 | | | 11,719 | | | 2,984 | | | 1989; 1996 | | Sep. 2012 | | 31 yrs. |
| Warehouse facility in La Vista, NE | | 16,339 | | | 4,196 | | | 23,148 | | | — | | | — | | | 4,196 | | | 23,148 | | | 27,344 | | | 7,787 | | | 2005 | | Sep. 2012 | | 33 yrs. |
| Laboratory facility in Pleasanton, CA | | — | | | 3,675 | | | 7,468 | | | 14,855 | | | — | | | 3,675 | | | 22,323 | | | 25,998 | | | 2,809 | | | 2000 | | Sep. 2012 | | 40 yrs. |
| Office facility in Chicago, IL | | — | | | 2,169 | | | 19,010 | | | 83 | | | (72) | | | 2,169 | | | 19,021 | | | 21,190 | | | 6,726 | | | 1910 | | Sep. 2012 | | 31 yrs. |
| Industrial facilities in Hollywood and Orlando, FL | | — | | | 3,639 | | | 1,269 | | | — | | | — | | | 3,639 | | | 1,269 | | | 4,908 | | | 448 | | | 1996 | | Sep. 2012 | | 31 yrs. |
| Warehouse facility in Golden, CO | | — | | | 808 | | | 4,304 | | | 77 | | | — | | | 808 | | | 4,381 | | | 5,189 | | | 1,701 | | | 1998 | | Sep. 2012 | | 30 yrs. |
| Industrial facility in Texarkana, TX | | — | | | 1,755 | | | 4,493 | | | — | | | (2,783) | | | 216 | | | 3,249 | | | 3,465 | | | 1,148 | | | 1997 | | Sep. 2012 | | 31 yrs. |
| Industrial facility in South Jordan, UT | | — | | | 2,183 | | | 11,340 | | | 2,254 | | | — | | | 2,183 | | | 13,594 | | | 15,777 | | | 4,572 | | | 1995 | | Sep. 2012 | | 31 yrs. |
| Warehouse facility in Ennis, TX | | — | | | 478 | | | 4,087 | | | 145 | | | (145) | | | 478 | | | 4,087 | | | 4,565 | | | 1,444 | | | 1989 | | Sep. 2012 | | 31 yrs. |
| Specialty facility in Paris, France | | — | | | 23,387 | | | 43,450 | | | 703 | | | (9,432) | | | 20,095 | | | 38,013 | | | 58,108 | | | 12,958 | | | 1975 | | Sep. 2012 | | 32 yrs. |
| Retail facilities in Poland | | — | | | 26,564 | | | 72,866 | | | — | | | (14,035) | | | 22,785 | | | 62,610 | | | 85,395 | | | 29,617 | | | Various | | Sep. 2012 | | 23 - 34 yrs. |
| Industrial facilities in Danbury, CT and Bedford, MA | | — | | | 3,519 | | | 16,329 | | | 43 | | | — | | | 3,519 | | | 16,372 | | | 19,891 | | | 6,157 | | | 1965; 1980 | | Sep. 2012 | | 29 yrs. |
| Industrial facility in Brownwood, TX | | — | | | 722 | | | 6,268 | | | — | | | — | | | 722 | | | 6,268 | | | 6,990 | | | 2,089 | | | 1964 | | Sep. 2012 | | 15 yrs. |
| Industrial facility in Rochester, MN | | — | | | 809 | | | 14,236 | | | 3,351 | | | — | | | 809 | | | 17,587 | | | 18,396 | | | 1,198 | | | 1997 | | Sep. 2012 | | 31 yrs. |
| Office facility in Salford, United Kingdom | | — | | | — | | | 30,012 | | | — | | | (9,122) | | | — | | | 20,890 | | | 20,890 | | | 6,405 | | | 1997 | | Sep. 2013 | | 40 yrs. |
| Office facility in Mönchengladbach, Germany | | 27,300 | | | 2,154 | | | 6,917 | | | 50,626 | | | (2,678) | | | 2,122 | | | 54,897 | | | 57,019 | | | 11,162 | | | 2015 | | Dec. 2013 | | 40 yrs. |
| Retail facility in Houston, TX | | — | | | 2,430 | | | 2,270 | | | — | | | — | | | 2,430 | | | 2,270 | | | 4,700 | | | 1,004 | | | 1995 | | Jan. 2014 | | 23 yrs. |
| Retail facility in St. Charles, MO | | — | | | 1,966 | | | 1,368 | | | 1,658 | | | — | | | 1,966 | | | 3,026 | | | 4,992 | | | 1,329 | | | 1987 | | Jan. 2014 | | 27 yrs. |
| | | | | |
| W. P. Carey 20212023 10-K – 120 |
SCHEDULE III — REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)
December 31, 20212023
(in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Initial Cost to Company | | Cost Capitalized Subsequent to Acquisition (a) | | Increase (Decrease) in Net Investments (b) | | Gross Amount at which Carried at Close of Period (c) (d) | | Accumulated Depreciation (d) | | Date of Construction | | Date Acquired | | Life on which
Depreciation in Latest
Statement of
Income
is Computed |
| | | | | | | | | | |
| | | | | | | | | | | |
| Description | | Encumbrances | | Land | | Buildings | | | | Land | | Buildings | | Total | | | | |
| Retail facility in Gorzow, Poland | | — | | | 1,736 | | | 8,298 | | | — | | | (59) | | | 1,726 | | | 8,249 | | | 9,975 | | | 752 | | | 2008 | | Oct. 2018 | | 40 yrs. |
| Industrial facilities in Sergeant Bluff, IA; Bossier City, LA; and Alvarado, TX | | 9,349 | | | 6,460 | | | 49,462 | | | — | | | — | | | 6,460 | | | 49,462 | | | 55,922 | | | 4,504 | | | Various | | Oct. 2018 | | 40 yrs. |
| Industrial facility in Glendale Heights, IL | | — | | | 4,237 | | | 45,484 | | | — | | | — | | | 4,237 | | | 45,484 | | | 49,721 | | | 1,822 | | | 1991 | | Oct. 2018 | | 38 yrs. |
| Industrial facilities in Mayodan, Sanford, and Stoneville, NC | | — | | | 3,505 | | | 20,913 | | | — | | | — | | | 3,505 | | | 20,913 | | | 24,418 | | | 1,438 | | | 1992; 1997; 1998 | | Oct. 2018 | | 29 yrs. |
| Warehouse facility in Dillon, SC | | — | | | 3,424 | | | 43,114 | | | — | | | — | | | 3,424 | | | 43,114 | | | 46,538 | | | 3,926 | | | 2001 | | Oct. 2018 | | 40 yrs. |
| Office facility in Birmingham, United Kingdom | | — | | | 7,383 | | | 7,687 | | | — | | | 650 | | | 7,702 | | | 8,018 | | | 15,720 | | | 667 | | | 2009 | | Oct. 2018 | | 40 yrs. |
| Retail facilities located throughout Spain | | — | | | 17,626 | | | 44,501 | | | — | | | (365) | | | 17,523 | | | 44,239 | | | 61,762 | | | 3,795 | | | Various | | Oct. 2018 | | 40 yrs. |
| Warehouse facility in Gadki, Poland | | — | | | 1,376 | | | 6,137 | | | — | | | (44) | | | 1,368 | | | 6,101 | | | 7,469 | | | 529 | | | 2011 | | Oct. 2018 | | 40 yrs. |
| Office facility in The Woodlands, TX | | — | | | 1,697 | | | 52,289 | | | — | | | — | | | 1,697 | | | 52,289 | | | 53,986 | | | 4,243 | | | 2009 | | Oct. 2018 | | 40 yrs. |
| Office facility in Hoffman Estates, IL | | — | | | 5,550 | | | 14,214 | | | — | | | — | | | 5,550 | | | 14,214 | | | 19,764 | | | 1,196 | | | 2009 | | Oct. 2018 | | 40 yrs. |
| Warehouse facility in Zagreb, Croatia | | — | | | 15,789 | | | 33,287 | | | — | | | (288) | | | 15,696 | | | 33,092 | | | 48,788 | | | 4,167 | | | 2001 | | Oct. 2018 | | 26 yrs. |
| Industrial facilities in Middleburg Heights and Union Township, OH | | 4,333 | | | 1,295 | | | 13,384 | | | — | | | — | | | 1,295 | | | 13,384 | | | 14,679 | | | 1,115 | | | 1990; 1997 | | Oct. 2018 | | 40 yrs. |
| Retail facility in Las Vegas, NV | | — | | | — | | | 79,720 | | | — | | | — | | | — | | | 79,720 | | | 79,720 | | | 6,325 | | | 2012 | | Oct. 2018 | | 40 yrs. |
| Industrial facilities located in Phoenix, AZ; Colton, Fresno, Los Angeles, Orange, Pomona, and San Diego, CA; Holly Hill and Safety Harbor, FL; Rockmart, GA; Durham, NC; Columbia, SC; Ooltewah, TN; and Dallas, TX | | — | | | 20,517 | | | 14,135 | | | — | | | 30,060 | | | 22,585 | | | 42,127 | | | 64,712 | | | 2,353 | | | Various | | Oct. 2018 | | 40 yrs. |
| Warehouse facility in Bowling Green, KY | | — | | | 2,652 | | | 51,915 | | | — | | | — | | | 2,652 | | | 51,915 | | | 54,567 | | | 4,849 | | | 2011 | | Oct. 2018 | | 40 yrs. |
| Warehouse facilities in Cannock, Liverpool, Luton, Plymouth, Southampton, and Taunton United Kingdom | | — | | | 6,791 | | | 2,315 | | | — | | | 393 | | | 7,084 | | | 2,415 | | | 9,499 | | | 225 | | | Various | | Oct. 2018 | | 40 yrs. |
| Industrial facility in Evansville, IN | | — | | | 180 | | | 22,095 | | | — | | | — | | | 180 | | | 22,095 | | | 22,275 | | | 1,795 | | | 2009 | | Oct. 2018 | | 40 yrs. |
| Office facilities in Tampa, FL | | — | | | 3,889 | | | 49,843 | | | 759 | | | — | | | 3,889 | | | 50,602 | | | 54,491 | | | 4,178 | | | 1985; 2000 | | Oct. 2018 | | 40 yrs. |
| Warehouse facility in Elorrio, Spain | | — | | | 7,858 | | | 12,728 | | | — | | | (120) | | | 7,812 | | | 12,654 | | | 20,466 | | | 1,213 | | | 1996 | | Oct. 2018 | | 40 yrs. |
| Industrial and office facilities in Elberton, GA | | — | | | 879 | | | 2,014 | | | — | | | — | | | 879 | | | 2,014 | | | 2,893 | | | 230 | | | 1997; 2002 | | Oct. 2018 | | 40 yrs. |
| Office facility in Tres Cantos, Spain | | 53,571 | | | 24,344 | | | 39,646 | | | — | | | (377) | | | 24,200 | | | 39,413 | | | 63,613 | | | 3,397 | | | 2002 | | Oct. 2018 | | 40 yrs. |
| Office facility in Hartland, WI | | 2,430 | | | 1,454 | | | 6,406 | | | — | | | — | | | 1,454 | | | 6,406 | | | 7,860 | | | 572 | | | 2001 | | Oct. 2018 | | 40 yrs. |
| Retail facilities in Dugo Selo, Kutina, Samobor, Spansko, and Zagreb, Croatia | | — | | | 5,549 | | | 12,408 | | | 1,625 | | | 6,572 | | | 6,767 | | | 19,387 | | | 26,154 | | | 2,229 | | | 2000; 2002; 2003 | | Oct. 2018 | | 26 yrs. |
| Office and warehouse facilities located throughout the United States | | — | | | 42,793 | | | 193,666 | | | — | | | — | | | 42,793 | | | 193,666 | | | 236,459 | | | 17,037 | | | Various | | Oct. 2018 | | 40 yrs. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | Cost Capitalized
Subsequent to
Acquisition (a) | | Increase
(Decrease)
in Net
Investments (b) | | Gross Amount at which
Carried at Close of Period (c) (d) | | Accumulated Depreciation (d) | | Date of Construction | | Date Acquired | | Life on which
Depreciation in Latest
Statement of
Income
is Computed |
| | | | | | | | | | | | | |
| | | | Initial Cost to Company | | | | | | | |
| Description | | Encumbrances | | Land | | Buildings | | | | Land | | Buildings | | Total | | | | |
| Industrial facility in Aurora, CO | | — | | | 737 | | | 2,609 | | | — | | | — | | | 737 | | | 2,609 | | | 3,346 | | | 819 | | | 1985 | | Jan. 2014 | | 32 yrs. |
| Warehouse facility in Burlington, NJ | | — | | | 3,989 | | | 6,213 | | | 377 | | | — | | | 3,989 | | | 6,590 | | | 10,579 | | | 2,588 | | | 1999 | | Jan. 2014 | | 26 yrs. |
| Industrial facility in Albuquerque, NM | | — | | | 2,467 | | | 3,476 | | | 715 | | | — | | | 2,467 | | | 4,191 | | | 6,658 | | | 1,609 | | | 1993 | | Jan. 2014 | | 27 yrs. |
| Industrial facility in North Salt Lake, UT | | — | | | 10,601 | | | 17,626 | | | — | | | (16,936) | | | 4,388 | | | 6,903 | | | 11,291 | | | 2,616 | | | 1981 | | Jan. 2014 | | 26 yrs. |
| Industrial facility in Lexington, NC | | — | | | 2,185 | | | 12,058 | | | — | | | (2,519) | | | 494 | | | 11,230 | | | 11,724 | | | 4,012 | | | 2003 | | Jan. 2014 | | 28 yrs. |
| Industrial facility in Dallas, TX | | — | | | 3,190 | | | 10,010 | | | — | | | — | | | 3,190 | | | 10,010 | | | 13,200 | | | 451 | | | 1968 | | Jan. 2014 | | 32 yrs. |
| Land in Welcome, NC | | — | | | 980 | | | 11,230 | | | — | | | (11,724) | | | 486 | | | — | | | 486 | | | — | | | N/A | | Jan. 2014 | | N/A |
| Industrial facilities in Evansville, IN; Lawrence, KS; and Baltimore, MD | | — | | | 4,005 | | | 44,192 | | | 20,636 | | | — | | | 4,005 | | | 64,828 | | | 68,833 | | | 19,478 | | | 1911; 1967; 1982 | | Jan. 2014 | | 24 yrs. |
| Industrial facilities in Colton, CA; Bonner Springs, KS; Eagan, MN; and Dallas, TX | | — | | | 8,451 | | | 25,457 | | | — | | | 11,200 | | | 8,451 | | | 36,657 | | | 45,108 | | | 9,183 | | | Various | | Jan. 2014 | | 17 - 34 yrs. |
| Retail facility in Torrance, CA | | — | | | 8,412 | | | 12,241 | | | 2,468 | | | (77) | | | 8,335 | | | 14,709 | | | 23,044 | | | 5,863 | | | 1973 | | Jan. 2014 | | 25 yrs. |
| Warehouse facility in Houston, TX | | — | | | 6,578 | | | 424 | | | 560 | | | — | | | 6,578 | | | 984 | | | 7,562 | | | 733 | | | 1978 | | Jan. 2014 | | 27 yrs. |
| Warehouse facility in Norwich, CT | | — | | | 3,885 | | | 21,342 | | | — | | | 2 | | | 3,885 | | | 21,344 | | | 25,229 | | | 7,492 | | | 1960 | | Jan. 2014 | | 28 yrs. |
| Warehouse facility in Norwich, CT | | — | | | 1,437 | | | 9,669 | | | — | | | — | | | 1,437 | | | 9,669 | | | 11,106 | | | 3,394 | | | 2005 | | Jan. 2014 | | 28 yrs. |
| Warehouse facility in Whitehall, PA | | — | | | 7,435 | | | 9,093 | | | 27,148 | | | (9,545) | | | 6,983 | | | 27,148 | | | 34,131 | | | 1,721 | | | 2021 | | Jan. 2014 | | 40 yrs. |
| Retail facility in York, PA | | — | | | 3,776 | | | 10,092 | | | — | | | (6,413) | | | 527 | | | 6,928 | | | 7,455 | | | 2,035 | | | 2005 | | Jan. 2014 | | 34 yrs. |
| Warehouse facilities in Atlanta, GA and Elkwood, VA | | — | | | 5,356 | | | 4,121 | | | — | | | (3,219) | | | 4,284 | | | 1,974 | | | 6,258 | | | 703 | | | 1975 | | Jan. 2014 | | 28 yrs. |
| Warehouse facility in Harrisburg, NC | | — | | | 1,753 | | | 5,840 | | | 781 | | | (111) | | | 1,642 | | | 6,621 | | | 8,263 | | | 2,347 | | | 2000 | | Jan. 2014 | | 26 yrs. |
| Industrial facility in Chandler, AZ; and industrial and warehouse facility in Englewood, CO | | 857 | | | 4,306 | | | 7,235 | | | — | | | 3 | | | 4,306 | | | 7,238 | | | 11,544 | | | 2,372 | | | 1978; 1987 | | Jan. 2014 | | 30 yrs. |
| Industrial facility in Cynthiana, KY | | 510 | | | 1,274 | | | 3,505 | | | 525 | | | (107) | | | 1,274 | | | 3,923 | | | 5,197 | | | 1,407 | | | 1967 | | Jan. 2014 | | 31 yrs. |
| Industrial facilities in Albemarle and Old Fort, NC and Holmesville, OH | | — | | | 5,507 | | | 18,653 | | | — | | | — | | | 5,507 | | | 18,653 | | | 24,160 | | | 1,299 | | | 1955; 1966; 1970 | | Jan. 2014 | | 32 yrs. |
| Industrial facility in Columbia, SC | | — | | | 2,843 | | | 11,886 | | | — | | | — | | | 2,843 | | | 11,886 | | | 14,729 | | | 5,218 | | | 1962 | | Jan. 2014 | | 23 yrs. |
| Retail facility in Midlothian, VA | | — | | | 2,824 | | | 16,618 | | | — | | | — | | | 2,824 | | | 16,618 | | | 19,442 | | | 2,969 | | | 2000 | | Jan. 2014 | | 40 yrs. |
| Specialty facility in Laramie, WY | | — | | | 1,966 | | | 18,896 | | | — | | | — | | | 1,966 | | | 18,896 | | | 20,862 | | | 6,456 | | | 2007 | | Jan. 2014 | | 33 yrs. |
| Warehouse facilities in Mendota, IL; Toppenish, WA; and Plover, WI | | — | | | 1,444 | | | 21,208 | | | — | | | (623) | | | 1,382 | | | 20,647 | | | 22,029 | | | 9,132 | | | 1996 | | Jan. 2014 | | 23 yrs. |
| Land in Sunnyvale, CA | | — | | | 9,297 | | | 24,086 | | | — | | | (26,077) | | | 7,306 | | | — | | | 7,306 | | | — | | | N/A | | Jan. 2014 | | N/A |
| Industrial facilities in Hampton, NH | | — | | | 8,990 | | | 7,362 | | | — | | | — | | | 8,990 | | | 7,362 | | | 16,352 | | | 2,406 | | | 1976 | | Jan. 2014 | | 30 yrs. |
| Industrial facilities in France | | — | | | 36,306 | | | 5,212 | | | 3,114 | | | 4,799 | | | 25,290 | | | 24,141 | | | 49,431 | | | 3,810 | | | Various | | Jan. 2014 | | 23 yrs. |
| Retail facility in Lombard, IL | | — | | | 5,087 | | | 8,578 | | | — | | | — | | | 5,087 | | | 8,578 | | | 13,665 | | | 3,230 | | | 1999 | | Jan. 2014 | | 26 yrs. |
| Warehouse facility in Plainfield, IN | | — | | | 1,578 | | | 29,415 | | | 2,176 | | | — | | | 1,578 | | | 31,591 | | | 33,169 | | | 9,873 | | | 1997 | | Jan. 2014 | | 30 yrs. |
| Retail facility in Kennesaw, GA | | — | | | 2,849 | | | 6,180 | | | 5,530 | | | (76) | | | 2,773 | | | 11,710 | | | 14,483 | | | 4,563 | | | 1999 | | Jan. 2014 | | 26 yrs. |
| Retail facility in Leawood, KS | | — | | | 1,487 | | | 13,417 | | | — | | | — | | | 1,487 | | | 13,417 | | | 14,904 | | | 5,051 | | | 1997 | | Jan. 2014 | | 26 yrs. |
| Industrial facility in Tolland, CT | | — | | | 1,817 | | | 5,709 | | | — | | | 11 | | | 1,817 | | | 5,720 | | | 7,537 | | | 2,068 | | | 1968 | | Jan. 2014 | | 28 yrs. |
| | | | | |
| W. P. Carey 20212023 10-K – 121 |
SCHEDULE III — REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)
December 31, 20212023
(in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Initial Cost to Company | | Cost Capitalized Subsequent to Acquisition (a) | | Increase (Decrease) in Net Investments (b) | | Gross Amount at which Carried at Close of Period (c) (d) | | Accumulated Depreciation (d) | | Date of Construction | | Date Acquired | | Life on which
Depreciation in Latest
Statement of
Income
is Computed |
| | | | | | | | | | |
| | | | | | | | | | | |
| Description | | Encumbrances | | Land | | Buildings | | | | Land | | Buildings | | Total | | | | |
| Warehouse facilities in Breda, Elst, Gieten, Raalte, and Woerden, Netherlands | | — | | | 37,755 | | | 91,666 | | | — | | | (761) | | | 37,533 | | | 91,127 | | | 128,660 | | | 7,605 | | | Various | | Oct. 2018 | | 40 yrs. |
| Warehouse facilities in Oxnard and Watsonville, CA | | — | | | 22,453 | | | 78,814 | | | — | | | — | | | 22,453 | | | 78,814 | | | 101,267 | | | 6,608 | | | 1975; 1994; 2002 | | Oct. 2018 | | 40 yrs. |
| Retail facilities located throughout Italy | | — | | | 75,492 | | | 138,280 | | | 7,242 | | | (2,107) | | | 75,048 | | | 143,859 | | | 218,907 | | | 12,495 | | | Various | | Oct. 2018 | | 40 yrs. |
| Land in Hudson, NY | | — | | | 2,405 | | | — | | | — | | | — | | | 2,405 | | | — | | | 2,405 | | | — | | | N/A | | Oct. 2018 | | N/A |
| Office facility in Houston, TX | | — | | | 2,136 | | | 2,344 | | | — | | | — | | | 2,136 | | | 2,344 | | | 4,480 | | | 229 | | | 1982 | | Oct. 2018 | | 40 yrs. |
| Office facility in Martinsville, VA | | — | | | 1,082 | | | 8,108 | | | — | | | — | | | 1,082 | | | 8,108 | | | 9,190 | | | 722 | | | 2011 | | Oct. 2018 | | 40 yrs. |
| Land in Chicago, IL | | — | | | 9,887 | | | — | | | — | | | — | | | 9,887 | | | — | | | 9,887 | | | — | | | N/A | | Oct. 2018 | | N/A |
| Industrial facility in Fraser, MI | | — | | | 1,346 | | | 9,551 | | | — | | | — | | | 1,346 | | | 9,551 | | | 10,897 | | | 824 | | | 2012 | | Oct. 2018 | | 40 yrs. |
| Net-lease self-storage facilities located throughout the United States | | — | | | 19,583 | | | 108,971 | | | — | | | — | | | 19,583 | | | 108,971 | | | 128,554 | | | 9,785 | | | Various | | Oct. 2018 | | 40 yrs. |
| Warehouse facility in Middleburg Heights, OH | | — | | | 542 | | | 2,507 | | | — | | | — | | | 542 | | | 2,507 | | | 3,049 | | | 209 | | | 2002 | | Oct. 2018 | | 40 yrs. |
| Net-lease self-storage facility in Fort Worth, TX | | — | | | 691 | | | 6,295 | | | — | | | — | | | 691 | | | 6,295 | | | 6,986 | | | 578 | | | 2004 | | Oct. 2018 | | 40 yrs. |
| Retail facilities in Delnice, Pozega, and Sesvete, Croatia | | — | | | 5,519 | | | 9,930 | | | 1,291 | | | (251) | | | 5,486 | | | 11,003 | | | 16,489 | | | 1,360 | | | 2011 | | Oct. 2018 | | 27 yrs. |
| Office facilities in Eagan and Virginia, MN | | — | | | 16,302 | | | 91,239 | | | — | | | (722) | | | 15,954 | | | 90,865 | | | 106,819 | | | 7,988 | | | Various | | Oct. 2018 | | 40 yrs. |
| Retail facility in Orlando, FL | | — | | | 6,262 | | | 25,134 | | | 430 | | | — | | | 6,371 | | | 25,455 | | | 31,826 | | | 2,046 | | | 2011 | | Oct. 2018 | | 40 yrs. |
| Industrial facility in Avon, OH | | — | | | 1,447 | | | 5,564 | | | — | | | — | | | 1,447 | | | 5,564 | | | 7,011 | | | 503 | | | 2001 | | Oct. 2018 | | 40 yrs. |
| Industrial facility in Chimelow, Poland | | — | | | 6,158 | | | 28,032 | | | — | | | (201) | | | 6,122 | | | 27,867 | | | 33,989 | | | 2,420 | | | 2012 | | Oct. 2018 | | 40 yrs. |
| Net-lease self-storage facility in Fayetteville, NC | | — | | | 1,839 | | | 4,654 | | | — | | | — | | | 1,839 | | | 4,654 | | | 6,493 | | | 545 | | | 2001 | | Oct. 2018 | | 40 yrs. |
| Retail facilities in Huntsville, AL; Bentonville, AR; Bossier City, LA; Lee's Summit, MO; Fayetteville, TN, and Fort Worth, TX | | — | | | 19,529 | | | 42,318 | | | — | | | — | | | 19,529 | | | 42,318 | | | 61,847 | | | 3,718 | | | Various | | Oct. 2018 | | 40 yrs. |
| Education facilities in Montgomery, AL and Savannah, GA | | 13,061 | | | 5,508 | | | 12,032 | | | — | | | — | | | 5,508 | | | 12,032 | | | 17,540 | | | 1,045 | | | 1969; 2002 | | Oct. 2018 | | 40 yrs. |
| Office facilities in St. Louis, MO | | — | | | 1,297 | | | 5,362 | | | 7,951 | | | — | | | 1,836 | | | 12,774 | | | 14,610 | | | 1,041 | | | 1995; 1999 | | Oct. 2018; Aug. 2021 | | 40 yrs. |
| Office and warehouse facility in Zary, PL | | — | | | 2,062 | | | 10,034 | | | — | | | (71) | | | 2,050 | | | 9,975 | | | 12,025 | | | 888 | | | 2013 | | Oct. 2018 | | 40 yrs. |
| Industrial facilities in San Antonio, TX and Sterling, VA | | — | | | 3,198 | | | 23,981 | | | 78,727 | | | — | | | 7,228 | | | 98,678 | | | 105,906 | | | 4,792 | | | 1980; 2020 | | Oct. 2018; Dec. 2018 | | 40 yrs. |
| Industrial facility in Elk Grove Village, IL | | — | | | 5,511 | | | 10,766 | | | 2 | | | — | | | 5,511 | | | 10,768 | | | 16,279 | | | 914 | | | 1961 | | Oct. 2018 | | 40 yrs. |
| Industrial facility in Portage, WI | | 4,052 | | | 3,450 | | | 7,797 | | | — | | | — | | | 3,450 | | | 7,797 | | | 11,247 | | | 746 | | | 1970 | | Oct. 2018 | | 40 yrs. |
| Office facility in Warrenville, IL | | — | | | 3,662 | | | 23,711 | | | — | | | — | | | 3,662 | | | 23,711 | | | 27,373 | | | 1,987 | | | 2002 | | Oct. 2018 | | 40 yrs. |
| Warehouse facility in Saitama Prefecture, Japan | | — | | | 13,507 | | | 25,301 | | | 5,778 | | | (6,369) | | | 12,641 | | | 25,576 | | | 38,217 | | | 1,995 | | | 2007 | | Oct. 2018 | | 40 yrs. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | Cost Capitalized
Subsequent to
Acquisition (a) | | Increase
(Decrease)
in Net
Investments (b) | | Gross Amount at which
Carried at Close of Period (c) (d) | | Accumulated Depreciation (d) | | Date of Construction | | Date Acquired | | Life on which
Depreciation in Latest
Statement of
Income
is Computed |
| | | | | | | | | | | | | |
| | | | Initial Cost to Company | | | | | | | |
| Description | | Encumbrances | | Land | | Buildings | | | | Land | | Buildings | | Total | | | | |
| Warehouse facilities in Lincolnton, NC and Mauldin, SC | | — | | | 1,962 | | | 9,247 | | | — | | | — | | | 1,962 | | | 9,247 | | | 11,209 | | | 3,265 | | | 1988; 1996 | | Jan. 2014 | | 28 yrs. |
| Retail facilities in Germany | | — | | | 81,109 | | | 153,927 | | | 10,510 | | | (138,475) | | | 27,233 | | | 79,838 | | | 107,071 | | | 26,426 | | | Various | | Jan. 2014 | | Various |
| Laboratory facility in The Woodlands, TX | | — | | | 3,204 | | | 24,997 | | | — | | | — | | | 3,204 | | | 24,997 | | | 28,201 | | | 7,868 | | | 1997 | | Jan. 2014 | | 32 yrs. |
| Warehouse facilities in Valdosta, GA and Johnson City, TN | | — | | | 1,080 | | | 14,998 | | | 1,841 | | | — | | | 1,080 | | | 16,839 | | | 17,919 | | | 6,064 | | | 1978; 1998 | | Jan. 2014 | | 27 yrs. |
| Industrial facility in Amherst, NY | | 5,446 | | | 674 | | | 7,971 | | | — | | | — | | | 674 | | | 7,971 | | | 8,645 | | | 3,526 | | | 1984 | | Jan. 2014 | | 23 yrs. |
| Industrial and warehouse facilities in Westfield, MA | | — | | | 1,922 | | | 9,755 | | | 7,435 | | | 9 | | | 1,922 | | | 17,199 | | | 19,121 | | | 6,650 | | | 1954; 1997 | | Jan. 2014 | | 28 yrs. |
| Warehouse facility in Gorinchem, Netherlands | | — | | | 1,143 | | | 5,648 | | | 131 | | | (1,276) | | | 928 | | | 4,718 | | | 5,646 | | | 1,604 | | | 1995 | | Jan. 2014 | | 28 yrs. |
| Retail facility in Cresskill, NJ | | — | | | 2,366 | | | 5,482 | | | — | | | 19 | | | 2,366 | | | 5,501 | | | 7,867 | | | 1,751 | | | 1975 | | Jan. 2014 | | 31 yrs. |
| Retail facility in Livingston, NJ | | — | | | 2,932 | | | 2,001 | | | — | | | 14 | | | 2,932 | | | 2,015 | | | 4,947 | | | 735 | | | 1966 | | Jan. 2014 | | 27 yrs. |
| Retail facility in Montclair, NJ | | — | | | 1,905 | | | 1,403 | | | — | | | 6 | | | 1,905 | | | 1,409 | | | 3,314 | | | 514 | | | 1950 | | Jan. 2014 | | 27 yrs. |
| Retail facility in Morristown, NJ | | — | | | 3,258 | | | 8,352 | | | — | | | 26 | | | 3,258 | | | 8,378 | | | 11,636 | | | 3,058 | | | 1973 | | Jan. 2014 | | 27 yrs. |
| Retail facility in Summit, NJ | | — | | | 1,228 | | | 1,465 | | | — | | | 8 | | | 1,228 | | | 1,473 | | | 2,701 | | | 538 | | | 1950 | | Jan. 2014 | | 27 yrs. |
| Industrial facilities in Georgetown, TX and Woodland, WA | | — | | | 965 | | | 4,113 | | | — | | | — | | | 965 | | | 4,113 | | | 5,078 | | | 1,209 | | | 1998; 2001 | | Jan. 2014 | | 33 - 35 yrs. |
| Education facilities in Union, NJ; Allentown and Philadelphia, PA; and Grand Prairie, TX | | — | | | 5,365 | | | 7,845 | | | — | | | 5 | | | 5,365 | | | 7,850 | | | 13,215 | | | 2,796 | | | Various | | Jan. 2014 | | 28 yrs. |
| Industrial facility in Salisbury, NC | | — | | | 1,499 | | | 8,185 | | | — | | | — | | | 1,499 | | | 8,185 | | | 9,684 | | | 2,924 | | | 2000 | | Jan. 2014 | | 28 yrs. |
| Industrial facility in Twinsburg, OH | | — | | | 2,831 | | | 10,565 | | | 386 | | | (6,975) | | | 1,293 | | | 5,514 | | | 6,807 | | | 2,000 | | | 1991 | | Jan. 2014 | | 27 yrs. |
| Industrial facility in Cambridge, Canada | | — | | | 1,849 | | | 7,371 | | | — | | | (1,441) | | | 1,560 | | | 6,219 | | | 7,779 | | | 1,974 | | | 2001 | | Jan. 2014 | | 31 yrs. |
| Industrial facilities in Peru, IL; Huber Heights, Lima, and Sheffield, OH; and Lebanon, TN | | — | | | 2,962 | | | 17,832 | | | — | | | — | | | 2,962 | | | 17,832 | | | 20,794 | | | 5,658 | | | Various | | Jan. 2014 | | 31 yrs. |
| Industrial facility in Ramos Arizpe, Mexico | | — | | | 1,059 | | | 2,886 | | | — | | | — | | | 1,059 | | | 2,886 | | | 3,945 | | | 913 | | | 2000 | | Jan. 2014 | | 31 yrs. |
| Industrial facilities in Salt Lake City, UT | | — | | | 2,783 | | | 3,773 | | | — | | | — | | | 2,783 | | | 3,773 | | | 6,556 | | | 1,196 | | | 1983; 2002 | | Jan. 2014 | | 31 - 33 yrs. |
| Specialty facility in Blairsville, PA | | — | | | 1,631 | | | 23,163 | | | — | | | — | | | 1,631 | | | 23,163 | | | 24,794 | | | 7,718 | | | 2005 | | Jan. 2014 | | 33 yrs. |
| Education facility in Mooresville, NC | | — | | | 1,795 | | | 15,955 | | | — | | | — | | | 1,795 | | | 15,955 | | | 17,750 | | | 1,465 | | | 2002 | | Jan. 2014 | | 33 yrs. |
| Warehouse facilities in Atlanta, Doraville, and Rockmart, GA | | — | | | 6,488 | | | 77,192 | | | — | | | — | | | 6,488 | | | 77,192 | | | 83,680 | | | 26,827 | | | 1959; 1962; 1991 | | Jan. 2014 | | 23 - 33 yrs. |
| Warehouse facility in Muskogee, OK | | — | | | 554 | | | 4,353 | | | — | | | (3,437) | | | 158 | | | 1,312 | | | 1,470 | | | 397 | | | 1992 | | Jan. 2014 | | 33 yrs. |
| Industrial facility in Richmond, MO | | — | | | 2,211 | | | 8,505 | | | 747 | | | — | | | 2,211 | | | 9,252 | | | 11,463 | | | 3,293 | | | 1996 | | Jan. 2014 | | 28 yrs. |
| Industrial facility in Tuusula, Finland | | — | | | 6,173 | | | 10,321 | | | — | | | (3,105) | | | 5,011 | | | 8,378 | | | 13,389 | | | 3,258 | | | 1975 | | Jan. 2014 | | 26 yrs. |
| Warehouse facility in Phoenix, AZ | | — | | | 6,747 | | | 21,352 | | | 380 | | | — | | | 6,747 | | | 21,732 | | | 28,479 | | | 7,901 | | | 1996 | | Jan. 2014 | | 28 yrs. |
| Land in Calgary, Canada | | — | | | 3,721 | | | — | | | — | | | (582) | | | 3,139 | | | — | | | 3,139 | | | — | | | N/A | | Jan. 2014 | | N/A |
| | | | | |
| W. P. Carey 20212023 10-K – 122 |
SCHEDULE III — REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)
December 31, 20212023
(in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Initial Cost to Company | | Cost Capitalized Subsequent to Acquisition (a) | | Increase (Decrease) in Net Investments (b) | | Gross Amount at which Carried at Close of Period (c) (d) | | Accumulated Depreciation (d) | | Date of Construction | | Date Acquired | | Life on which
Depreciation in Latest
Statement of
Income
is Computed |
| | | | | | | | | | |
| | | | | | | | | | | |
| Description | | Encumbrances | | Land | | Buildings | | | | Land | | Buildings | | Total | | | | |
| Retail facility in Dallas, TX | | — | | | 2,977 | | | 16,168 | | | — | | | — | | | 2,977 | | | 16,168 | | | 19,145 | | | 1,316 | | | 1913 | | Oct. 2018 | | 40 yrs. |
| Office facility in Houston, TX | | — | | | 23,161 | | | 104,266 | | | 919 | | | — | | | 23,161 | | | 105,185 | | | 128,346 | | | 8,465 | | | 1973 | | Oct. 2018 | | 40 yrs. |
| Retail facilities located throughout Croatia | | — | | | 9,000 | | | 13,002 | | | 1,415 | | | (4,722) | | | 7,757 | | | 10,938 | | | 18,695 | | | 1,214 | | | Various | | Oct. 2018 | | 29 - 37 yrs. |
| Office facility in Northbrook, IL | | — | | | — | | | 493 | | | — | | | — | | | — | | | 493 | | | 493 | | | 156 | | | 2007 | | Oct. 2018 | | 40 yrs. |
| Education facilities in Chicago, IL | | — | | | 18,510 | | | 163 | | | — | | | (11,855) | | | 6,744 | | | 74 | | | 6,818 | | | 33 | | | 2014; 2015 | | Oct. 2018 | | 40 yrs. |
| Warehouse facility in Dillon, SC | | — | | | 3,516 | | | 44,933 | | | — | | | — | | | 3,516 | | | 44,933 | | | 48,449 | | | 4,061 | | | 2013 | | Oct. 2018 | | 40 yrs. |
| Net-lease self-storage facilities in New York City, NY | | — | | | 29,223 | | | 77,202 | | | 414 | | | — | | | 29,223 | | | 77,616 | | | 106,839 | | | 6,203 | | | Various | | Oct. 2018 | | 40 yrs. |
| Net-lease self-storage facility in Hilo, HI | | — | | | 769 | | | 12,869 | | | — | | | — | | | 769 | | | 12,869 | | | 13,638 | | | 1,034 | | | 2007 | | Oct. 2018 | | 40 yrs. |
| Net-lease self-storage facility in Clearwater, FL | | — | | | 1,247 | | | 5,733 | | | — | | | — | | | 1,247 | | | 5,733 | | | 6,980 | | | 525 | | | 2001 | | Oct. 2018 | | 40 yrs. |
| Warehouse facilities in Gadki, Poland | | — | | | 10,422 | | | 47,727 | | | 57 | | | (341) | | | 10,361 | | | 47,504 | | | 57,865 | | | 4,183 | | | 2007; 2010 | | Oct. 2018 | | 40 yrs. |
| Net-lease self-storage facility in Orlando, FL | | — | | | 1,070 | | | 8,686 | | | — | | | — | | | 1,070 | | | 8,686 | | | 9,756 | | | 749 | | | 2000 | | Oct. 2018 | | 40 yrs. |
| Retail facility in Lewisville, TX | | — | | | 3,485 | | | 11,263 | | | — | | | — | | | 3,485 | | | 11,263 | | | 14,748 | | | 955 | | | 2004 | | Oct. 2018 | | 40 yrs. |
| Industrial facility in Wageningen, Netherlands | | — | | | 5,227 | | | 18,793 | | | — | | | 142 | | | 5,197 | | | 18,965 | | | 24,162 | | | 1,645 | | | 2013 | | Oct. 2018 | | 40 yrs. |
| Office facility in Haibach, Germany | | 7,920 | | | 1,767 | | | 12,229 | | | — | | | (6,885) | | | 850 | | | 6,261 | | | 7,111 | | | 893 | | | 1993 | | Oct. 2018 | | 40 yrs. |
| Net-lease self-storage facility in Palm Coast, FL | | — | | | 1,994 | | | 4,982 | | | — | | | — | | | 1,994 | | | 4,982 | | | 6,976 | | | 536 | | | 2001 | | Oct. 2018 | | 40 yrs. |
| Office facility in Auburn Hills, MI | | — | | | 1,910 | | | 6,773 | | | — | | | — | | | 1,910 | | | 6,773 | | | 8,683 | | | 586 | | | 2012 | | Oct. 2018 | | 40 yrs. |
| Net-lease self-storage facility in Holiday, FL | | — | | | 1,730 | | | 4,213 | | | — | | | — | | | 1,730 | | | 4,213 | | | 5,943 | | | 441 | | | 1975 | | Oct. 2018 | | 40 yrs. |
| Office facility in Tempe, AZ | | 13,661 | | | — | | | 19,533 | | | — | | | — | | | — | | | 19,533 | | | 19,533 | | | 1,635 | | | 2000 | | Oct. 2018 | | 40 yrs. |
| Office facility in Tucson, AZ | | — | | | 2,448 | | | 17,353 | | | — | | | — | | | 2,448 | | | 17,353 | | | 19,801 | | | 1,472 | | | 2002 | | Oct. 2018 | | 40 yrs. |
| Industrial facility in Drunen, Netherlands | | — | | | 2,316 | | | 9,370 | | | — | | | (68) | | | 2,303 | | | 9,315 | | | 11,618 | | | 787 | | | 2014 | | Oct. 2018 | | 40 yrs. |
| Industrial facility New Concord, OH | | 1,306 | | | 958 | | | 2,309 | | | — | | | — | | | 958 | | | 2,309 | | | 3,267 | | | 238 | | | 1999 | | Oct. 2018 | | 40 yrs. |
| Office facility in Krakow, Poland | | — | | | 2,381 | | | 6,212 | | | — | | | (50) | | | 2,367 | | | 6,176 | | | 8,543 | | | 526 | | | 2003 | | Oct. 2018 | | 40 yrs. |
| Retail facility in Gelsenkirchen, Germany | | 12,215 | | | 2,178 | | | 17,097 | | | — | | | (113) | | | 2,165 | | | 16,997 | | | 19,162 | | | 1,432 | | | 2000 | | Oct. 2018 | | 40 yrs. |
| Warehouse facilities in Mszczonow and Tomaszow Mazowiecki, Poland | | — | | | 8,782 | | | 53,575 | | | — | | | (367) | | | 8,730 | | | 53,260 | | | 61,990 | | | 4,862 | | | 1995; 2000 | | Oct. 2018 | | 40 yrs. |
| Office facility in Plymouth, MN | | — | | | 2,871 | | | 26,353 | | | 456 | | | — | | | 2,871 | | | 26,809 | | | 29,680 | | | 2,245 | | | 1999 | | Oct. 2018 | | 40 yrs. |
| Office facility in San Antonio, TX | | — | | | 3,094 | | | 16,624 | | | — | | | — | | | 3,094 | | | 16,624 | | | 19,718 | | | 1,419 | | | 2002 | | Oct. 2018 | | 40 yrs. |
| Warehouse facility in Sered, Slovakia | | — | | | 3,428 | | | 28,005 | | | — | | | (185) | | | 3,408 | | | 27,840 | | | 31,248 | | | 2,369 | | | 2004 | | Oct. 2018 | | 40 yrs. |
| Industrial facility in Tuchomerice, Czech Republic | | — | | | 7,864 | | | 27,006 | | | — | | | (205) | | | 7,818 | | | 26,847 | | | 34,665 | | | 2,255 | | | 1998 | | Oct. 2018 | | 40 yrs. |
| Office facility in Warsaw, Poland | | 34,427 | | | — | | | 44,990 | | | — | | | (265) | | | — | | | 44,725 | | | 44,725 | | | 3,664 | | | 2015 | | Oct. 2018 | | 40 yrs. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Initial Cost to Company | | Cost Capitalized Subsequent to Acquisition (a) | | Increase (Decrease) in Net Investments (b) | | Gross Amount at which Carried at Close of Period (c) (d) | | Accumulated Depreciation (d) | | Date of Construction | | Date Acquired | | Life on which
Depreciation in Latest
Statement of
Income
is Computed |
| | | | | | | | | | |
| | | | | | | | | | |
| Description | | Encumbrances | | Land | | Buildings | | | | Land | | Buildings | | Total | | | | |
| Industrial facilities in Kearney, MO; York, NE; Walbridge, OH; Rocky Mount, VA; and Martinsburg, WV | | — | | | 4,816 | | | 31,712 | | | 1,078 | | | — | | | 4,816 | | | 32,790 | | | 37,606 | | | 1,168 | | | Various | | Jan. 2014 | | 31 yrs. |
| Industrial facilities in Sandersville, GA; Erwin, TN; and Gainesville, TX | | — | | | 955 | | | 4,779 | | | — | | | — | | | 955 | | | 4,779 | | | 5,734 | | | 1,528 | | | 1950; 1986; 1996 | | Jan. 2014 | | 31 yrs. |
| Industrial facility in Buffalo Grove, IL | | 1,960 | | | 1,492 | | | 12,233 | | | — | | | — | | | 1,492 | | | 12,233 | | | 13,725 | | | 3,923 | | | 1996 | | Jan. 2014 | | 31 yrs. |
| Warehouse facility in Carlsbad, CA | | — | | | 3,230 | | | 5,492 | | | 158 | | | — | | | 3,230 | | | 5,650 | | | 8,880 | | | 2,309 | | | 1999 | | Jan. 2014 | | 24 yrs. |
| Retail facility in Pensacola, FL | | — | | | 1,746 | | | — | | | — | | | 5,181 | | | 1,746 | | | 5,181 | | | 6,927 | | | 516 | | | 2001 | | Jan. 2014 | | 33 yrs. |
| Retail facility in Port St. Lucie, FL | | — | | | 4,654 | | | 2,576 | | | — | | | — | | | 4,654 | | | 2,576 | | | 7,230 | | | 934 | | | 2000 | | Jan. 2014 | | 27 yrs. |
| Industrial facility in Nurieux-Volognat, France | | — | | | 121 | | | 5,328 | | | 157 | | | (925) | | | 98 | | | 4,583 | | | 4,681 | | | 1,357 | | | 2000 | | Jan. 2014 | | 32 yrs. |
| Industrial facility in Monheim, Germany | | — | | | 2,500 | | | 5,727 | | | — | | | (391) | | | 2,386 | | | 5,450 | | | 7,836 | | | 385 | | | 1992 | | Jan. 2014 | | 32 yrs. |
| Warehouse facility in Suwanee, GA | | — | | | 2,330 | | | 8,406 | | | — | | | — | | | 2,330 | | | 8,406 | | | 10,736 | | | 2,463 | | | 1995 | | Jan. 2014 | | 34 yrs. |
| Retail facilities in Wichita, KS and Oklahoma City, OK and warehouse facility in Wichita, KS | | — | | | 1,878 | | | 8,579 | | | 3,128 | | | (89) | | | 1,878 | | | 11,618 | | | 13,496 | | | 3,877 | | | 1954; 1975; 1984 | | Jan. 2014 | | 24 yrs. |
| Industrial facilities in Fort Dodge, IA and Menomonie and Oconomowoc, WI | | — | | | 1,403 | | | 11,098 | | | — | | | — | | | 1,403 | | | 11,098 | | | 12,501 | | | 6,772 | | | 1996 | | Jan. 2014 | | 16 yrs. |
| Industrial facility in Mesa, AZ | | — | | | 2,888 | | | 4,282 | | | — | | | — | | | 2,888 | | | 4,282 | | | 7,170 | | | 1,558 | | | 1991 | | Jan. 2014 | | 27 yrs. |
| Industrial facility in North Amityville, NY | | — | | | 3,486 | | | 11,413 | | | — | | | — | | | 3,486 | | | 11,413 | | | 14,899 | | | 4,352 | | | 1981 | | Jan. 2014 | | 26 yrs. |
| Industrial facility in Fort Collins, CO | | — | | | 821 | | | 7,236 | | | — | | | — | | | 821 | | | 7,236 | | | 8,057 | | | 2,185 | | | 1993 | | Jan. 2014 | | 33 yrs. |
| Warehouse facility in Elk Grove Village, IL | | — | | | 4,037 | | | 7,865 | | | — | | | — | | | 4,037 | | | 7,865 | | | 11,902 | | | 1,536 | | | 1980 | | Jan. 2014 | | 22 yrs. |
| Research and development facility in Washington, MI | | — | | | 4,085 | | | 7,496 | | | — | | | — | | | 4,085 | | | 7,496 | | | 11,581 | | | 2,269 | | | 1990 | | Jan. 2014 | | 33 yrs. |
| Industrial facilities in Conroe, Odessa, and Weimar, TX and industrial and office facility in Houston, TX | | — | | | 4,049 | | | 13,021 | | | — | | | 133 | | | 4,049 | | | 13,154 | | | 17,203 | | | 6,987 | | | Various | | Jan. 2014 | | 12 - 22 yrs. |
| Education facility in Sacramento, CA | | — | | | — | | | 13,715 | | | — | | | — | | | — | | | 13,715 | | | 13,715 | | | 4,070 | | | 2005 | | Jan. 2014 | | 34 yrs. |
| Industrial facility in Sankt Ingbert, Germany | | — | | | 2,226 | | | 17,460 | | | — | | | 314 | | | 2,261 | | | 17,739 | | | 20,000 | | | 1,933 | | | 1960 | | Jan. 2014 | | 34 yrs. |
| Industrial facilities in City of Industry, CA; Chelmsford, MA; and Lancaster, TX | | — | | | 5,138 | | | 8,387 | | | — | | | 43 | | | 5,138 | | | 8,430 | | | 13,568 | | | 3,016 | | | 1969; 1974; 1984 | | Jan. 2014 | | 27 yrs. |
| Office facility in Tinton Falls, NJ | | — | | | 1,958 | | | 7,993 | | | 725 | | | — | | | 1,958 | | | 8,718 | | | 10,676 | | | 2,780 | | | 2001 | | Jan. 2014 | | 31 yrs. |
| Industrial facility in Woodland, WA | | — | | | 707 | | | 1,562 | | | — | | | — | | | 707 | | | 1,562 | | | 2,269 | | | 439 | | | 2009 | | Jan. 2014 | | 35 yrs. |
| Warehouse facilities in Gyál and Herceghalom, Hungary | | — | | | 14,601 | | | 21,915 | | | — | | | (6,874) | | | 11,852 | | | 17,790 | | | 29,642 | | | 8,640 | | | 2002; 2004 | | Jan. 2014 | | 21 yrs. |
| Industrial facility in Windsor, CT | | — | | | 453 | | | 637 | | | 3,422 | | | (83) | | | 453 | | | 3,976 | | | 4,429 | | | 774 | | | 1999 | | Jan. 2014 | | 33 yrs. |
| Industrial facility in Aurora, CO | | — | | | 574 | | | 3,999 | | | — | | | — | | | 574 | | | 3,999 | | | 4,573 | | | 1,010 | | | 2012 | | Jan. 2014 | | 40 yrs. |
| Warehouse facility in University Park, IL | | — | | | 7,962 | | | 32,756 | | | 221 | | | — | | | 7,962 | | | 32,977 | | | 40,939 | | | 9,066 | | | 2008 | | May 2014 | | 40 yrs. |
| Laboratory facility in Westborough, MA | | — | | | 3,409 | | | 37,914 | | | 53,065 | | | — | | | 3,409 | | | 90,979 | | | 94,388 | | | 15,252 | | | 1992 | | Aug. 2014 | | 40 yrs. |
| | | | | |
| W. P. Carey 20212023 10-K – 123 |
SCHEDULE III — REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)
December 31, 20212023
(in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Initial Cost to Company | | Cost Capitalized Subsequent to Acquisition (a) | | Increase (Decrease) in Net Investments (b) | | Gross Amount at which Carried at Close of Period (c) (d) | | Accumulated Depreciation (d) | | Date of Construction | | Date Acquired | | Life on which
Depreciation in Latest
Statement of
Income
is Computed |
| | | | | | | | | | |
| | | | | | | | | | | |
| Description | | Encumbrances | | Land | | Buildings | | | | Land | | Buildings | | Total | | | | |
| Warehouse facility in Kaunas, Lithuania | | 37,507 | | | 10,199 | | | 47,391 | | | — | | | (339) | | | 10,139 | | | 47,112 | | | 57,251 | | | 4,053 | | | 2008 | | Oct. 2018 | | 40 yrs. |
| Net-lease student housing facility in Jacksonville, FL | | 11,686 | | | 906 | | | 17,020 | | | — | | | — | | | 906 | | | 17,020 | | | 17,926 | | | 1,394 | | | 2015 | | Oct. 2018 | | 40 yrs. |
| Warehouse facilities in Houston, TX | | — | | | 791 | | | 1,990 | | | — | | | — | | | 791 | | | 1,990 | | | 2,781 | | | 178 | | | 1972 | | Oct. 2018 | | 40 yrs. |
| Office facility in Oak Creek, WI | | — | | | 2,858 | | | 11,055 | | | — | | | — | | | 2,858 | | | 11,055 | | | 13,913 | | | 995 | | | 2000 | | Oct. 2018 | | 40 yrs. |
| Warehouse facilities in Shelbyville, IN; Kalamazoo, MI; Tiffin, OH; Andersonville, TN; and Millwood, WV | | — | | | 2,868 | | | 37,571 | | | — | | | — | | | 2,868 | | | 37,571 | | | 40,439 | | | 3,440 | | | Various | | Oct. 2018 | | 40 yrs. |
| Warehouse facility in Perrysburg, OH | | — | | | 806 | | | 11,922 | | | — | | | — | | | 806 | | | 11,922 | | | 12,728 | | | 1,127 | | | 1974 | | Oct. 2018 | | 40 yrs. |
| Warehouse facility in Dillon, SC | | — | | | 620 | | | 46,319 | | | 434 | | | — | | | 620 | | | 46,753 | | | 47,373 | | | 3,253 | | | 2019 | | Oct. 2018 | | 40 yrs. |
| Warehouse facility in Zabia Wola, Poland | | 15,973 | | | 4,742 | | | 23,270 | | | 5,636 | | | (166) | | | 4,715 | | | 28,767 | | | 33,482 | | | 2,388 | | | 1999 | | Oct. 2018 | | 40 yrs. |
| Office facility in Buffalo Grove, IL | | — | | | 2,224 | | | 6,583 | | | — | | | — | | | 2,224 | | | 6,583 | | | 8,807 | | | 569 | | | 1992 | | Oct. 2018 | | 40 yrs. |
| Warehouse facilities in McHenry, IL | | — | | | 5,794 | | | 21,141 | | | — | | | — | | | 5,794 | | | 21,141 | | | 26,935 | | | 2,665 | | | 1990; 1999 | | Dec. 2018 | | 27 - 28 yrs. |
| Industrial facilities in Chicago, Cortland, Forest View, Morton Grove, and Northbrook, IL and Madison and Monona, WI | | — | | | 23,267 | | | 9,166 | | | — | | | — | | | 23,267 | | | 9,166 | | | 32,433 | | | 1,091 | | | Various | | Dec. 2018; Dec. 2019 | | 35 - 40 yrs. |
| Warehouse facility in Kilgore, TX | | — | | | 3,002 | | | 36,334 | | | 14,096 | | | (6) | | | 3,002 | | | 50,424 | | | 53,426 | | | 4,023 | | | 2007 | | Dec. 2018 | | 37 yrs. |
| Industrial facility in San Luis Potosi, Mexico | | — | | | 2,787 | | | 12,945 | | | — | | | — | | | 2,787 | | | 12,945 | | | 15,732 | | | 1,149 | | | 2009 | | Dec. 2018 | | 39 yrs. |
| Industrial facility in Legnica, Poland | | — | | | 995 | | | 9,787 | | | 6,007 | | | (116) | | | 988 | | | 15,685 | | | 16,673 | | | 1,510 | | | 2002 | | Dec. 2018 | | 29 yrs. |
| Industrial facility in Meru, France | | — | | | 4,231 | | | 14,731 | | | 8 | | | (85) | | | 4,212 | | | 14,673 | | | 18,885 | | | 1,669 | | | 1997 | | Dec. 2018 | | 29 yrs. |
| Education facility in Portland, OR | | — | | | 2,396 | | | 23,258 | | | 4,218 | | | — | | | 2,396 | | | 27,476 | | | 29,872 | | | 2,401 | | | 2006 | | Feb. 2019 | | 40 yrs. |
| Office facility in Morrisville, NC | | — | | | 2,374 | | | 30,140 | | | 2,172 | | | — | | | 2,374 | | | 32,312 | | | 34,686 | | | 2,476 | | | 1998 | | Mar. 2019 | | 40 yrs. |
| Warehouse facility in Inwood, WV | | — | | | 3,265 | | | 36,692 | | | — | | | — | | | 3,265 | | | 36,692 | | | 39,957 | | | 2,804 | | | 2000 | | Mar. 2019 | | 40 yrs. |
| Industrial facility in Hurricane, UT | | — | | | 1,914 | | | 37,279 | | | — | | | — | | | 1,914 | | | 37,279 | | | 39,193 | | | 2,694 | | | 2011 | | Mar. 2019 | | 40 yrs. |
| Industrial facility in Bensenville, IL | | — | | | 8,640 | | | 4,948 | | | — | | | 300 | | | 8,940 | | | 4,948 | | | 13,888 | | | 574 | | | 1981 | | Mar. 2019 | | 40 yrs. |
| Industrial facility in Katowice, Poland | | — | | | — | | | 764 | | | 15,163 | | | 471 | | | — | | | 16,398 | | | 16,398 | | | 859 | | | 2019 | | Apr. 2019 | | 40 yrs. |
| Industrial facilities in Westerville, OH and North Wales, PA | | — | | | 1,545 | | | 6,508 | | | — | | | — | | | 1,545 | | | 6,508 | | | 8,053 | | | 564 | | | 1960; 1997 | | May 2019 | | 40 yrs. |
| Industrial facilities in Fargo, ND; Norristown, PA; and Atlanta, TX | | — | | | 1,616 | | | 5,589 | | | — | | | — | | | 1,616 | | | 5,589 | | | 7,205 | | | 590 | | | Various | | May 2019 | | 40 yrs. |
| Industrial facilities in Chihuahua and Juarez, Mexico | | — | | | 3,426 | | | 7,286 | | | — | | | — | | | 3,426 | | | 7,286 | | | 10,712 | | | 696 | | | 1983; 1986; 1991 | | May 2019 | | 40 yrs. |
| Warehouse facility in Statesville, NC | | — | | | 1,683 | | | 13,827 | | | — | | | — | | | 1,683 | | | 13,827 | | | 15,510 | | | 1,072 | | | 1979 | | Jun. 2019 | | 40 yrs. |
| Industrial facilities in Searcy, AR and Conestoga, PA | | — | | | 4,290 | | | 51,410 | | | 11,027 | | | — | | | 4,678 | | | 62,049 | | | 66,727 | | | 4,273 | | | 1950; 1951 | | Jun. 2019; Apr. 2021 | | 40 yrs. |
| Industrial facilities in Hartford and Milwaukee, WI | | — | | | 1,471 | | | 21,293 | | | — | | | — | | | 1,471 | | | 21,293 | | | 22,764 | | | 1,565 | | | 1964; 1992; 1993 | | Jul. 2019 | | 40 yrs. |
| Industrial facilities in Brockville and Prescott, Canada | | — | | | 2,025 | | | 9,519 | | | — | | | — | | | 2,025 | | | 9,519 | | | 11,544 | | | 702 | | | 1955; 1995 | | Jul. 2019 | | 40 yrs. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Initial Cost to Company | | Cost Capitalized Subsequent to Acquisition (a) | | Increase (Decrease) in Net Investments (b) | | Gross Amount at which Carried at Close of Period (c) (d) | | Accumulated Depreciation (d) | | Date of Construction | | Date Acquired | | Life on which
Depreciation in Latest
Statement of
Income
is Computed |
| | | | | | | | | | |
| | | | | | | | | | |
| Description | | Encumbrances | | Land | | Buildings | | | | Land | | Buildings | | Total | | | | |
| Research and development facility in Andover, MA | | — | | | 3,980 | | | 45,120 | | | 323 | | | — | | | 3,980 | | | 45,443 | | | 49,423 | | | 11,154 | | | 2013 | | Oct. 2014 | | 40 yrs. |
| Industrial facility in Lewisburg, OH | | — | | | 1,627 | | | 13,721 | | | — | | | — | | | 1,627 | | | 13,721 | | | 15,348 | | | 3,525 | | | 2014 | | Nov. 2014 | | 40 yrs. |
| Industrial facility in Opole, Poland | | — | | | 2,151 | | | 21,438 | | | — | | | (2,625) | | | 1,912 | | | 19,052 | | | 20,964 | | | 5,052 | | | 2014 | | Dec. 2014 | | 38 yrs. |
| Retail facilities in the United Kingdom | | — | | | 66,319 | | | 230,113 | | | 277 | | | (88,095) | | | 44,895 | | | 163,719 | | | 208,614 | | | 48,872 | | | Various | | Jan. 2015 | | 20 - 40 yrs. |
| Warehouse facility in Rotterdam, Netherlands | | — | | | — | | | 33,935 | | | 20,842 | | | (1,418) | | | — | | | 53,359 | | | 53,359 | | | 10,205 | | | 2014 | | Feb. 2015 | | 40 yrs. |
| Retail facility in Bad Fischau, Austria | | — | | | 2,855 | | | 18,829 | | | — | | | 552 | | | 2,928 | | | 19,308 | | | 22,236 | | | 4,726 | | | 1998 | | Apr. 2015 | | 40 yrs. |
| Industrial facility in Oskarshamn, Sweden | | — | | | 3,090 | | | 18,262 | | | — | | | (3,784) | | | 2,542 | | | 15,026 | | | 17,568 | | | 3,527 | | | 2015 | | Jun. 2015 | | 40 yrs. |
| Industrial facilities in Gersthofen and Senden, Germany and Leopoldsdorf, Austria | | — | | | 9,449 | | | 15,838 | | | — | | | (187) | | | 9,379 | | | 15,721 | | | 25,100 | | | 3,850 | | | 2008; 2010 | | Aug. 2015 | | 40 yrs. |
| Net-lease hotels in the United States | | — | | | — | | | 49,190 | | | 17,396 | | | — | | | 17,396 | | | 49,190 | | | 66,586 | | | 11,802 | | | 1988; 1989; 1990 | | Oct. 2015 | | 38 - 40 yrs. |
| Retail facilities in the Netherlands | | — | | | 5,698 | | | 38,130 | | | 79 | | | 1,264 | | | 5,862 | | | 39,309 | | | 45,171 | | | 9,917 | | | Various | | Nov. 2015 | | 30 - 40 yrs. |
| Specialty facility in Irvine, CA | | — | | | 7,626 | | | 16,137 | | | — | | | — | | | 7,626 | | | 16,137 | | | 23,763 | | | 3,373 | | | 1977 | | Dec. 2015 | | 40 yrs. |
| Education facility in Windermere, FL | | — | | | 5,090 | | | 34,721 | | | 15,333 | | | — | | | 5,090 | | | 50,054 | | | 55,144 | | | 12,548 | | | 1998 | | Apr. 2016 | | 38 yrs. |
| Industrial facilities in the United States | | — | | | 66,845 | | | 87,575 | | | 65,400 | | | (56,525) | | | 49,672 | | | 113,623 | | | 163,295 | | | 31,830 | | | Various | | Apr. 2016 | | Various |
| Industrial facilities in North Dumfries and Ottawa, Canada | | — | | | 17,155 | | | 10,665 | | | — | | | (18,393) | | | 5,847 | | | 3,580 | | | 9,427 | | | 1,753 | | | 1967; 1974 | | Apr. 2016 | | 28 yrs. |
| Education facilities in Coconut Creek, FL and Houston, TX | | — | | | 15,550 | | | 83,862 | | | 63,830 | | | — | | | 15,550 | | | 147,692 | | | 163,242 | | | 31,111 | | | 1979; 1984 | | May 2016 | | 37 - 40 yrs. |
| Office facility in Southfield, MI and warehouse facilities in London, KY and Gallatin, TN | | — | | | 3,585 | | | 17,254 | | | — | | | — | | | 3,585 | | | 17,254 | | | 20,839 | | | 3,495 | | | 1969; 1987; 2000 | | Nov. 2016 | | 35 - 36 yrs. |
| Industrial facilities in Brampton, Toronto, and Vaughan, Canada | | — | | | 28,759 | | | 13,998 | | | — | | | — | | | 28,759 | | | 13,998 | | | 42,757 | | | 3,379 | | | Various | | Nov. 2016 | | 28 - 35 yrs. |
| Industrial facilities in Queretaro and San Juan del Rio, Mexico | | — | | | 5,152 | | | 12,614 | | | 2,440 | | | — | | | 5,152 | | | 15,054 | | | 20,206 | | | 2,530 | | | Various | | Dec. 2016 | | 28 - 40 yrs. |
| Industrial facility in Chicago, IL | | — | | | 2,222 | | | 2,655 | | | 3,511 | | | — | | | 2,222 | | | 6,166 | | | 8,388 | | | 2,050 | | | 1985 | | Jun. 2017 | | 30 yrs. |
| Industrial facility in Zawiercie, Poland | | — | | | 395 | | | 102 | | | 10,378 | | | (573) | | | 374 | | | 9,928 | | | 10,302 | | | 1,412 | | | 2018 | | Aug. 2017 | | 40 yrs. |
| Industrial facility in Radomsko, Poland | | — | | | 1,718 | | | 59 | | | 37,496 | | | 731 | | | 1,630 | | | 38,374 | | | 40,004 | | | 2,704 | | | 2018 | | Nov. 2017 | | 40 yrs. |
| Warehouse facility in Sellersburg, IN | | — | | | 1,016 | | | 3,838 | | | — | | | — | | | 1,016 | | | 3,838 | | | 4,854 | | | 781 | | | 2000 | | Feb. 2018 | | 36 yrs. |
| Retail and warehouse facilities in Appleton, Madison, and Waukesha, WI | | — | | | 5,512 | | | 61,230 | | | — | | | — | | | 5,465 | | | 61,277 | | | 66,742 | | | 10,931 | | | 1995; 2004 | | Mar. 2018 | | 36 - 40 yrs. |
| Warehouse facilities in Denmark | | — | | | 20,304 | | | 185,481 | | | — | | | (14,902) | | | 19,001 | | | 171,882 | | | 190,883 | | | 29,557 | | | Various | | Jun. 2018 | | 25 - 41 yrs. |
| Retail facilities in the Netherlands | | — | | | 38,475 | | | 117,127 | | | — | | | (7,924) | | | 36,516 | | | 111,162 | | | 147,678 | | | 21,546 | | | Various | | Jul. 2018 | | 26 - 30 yrs. |
| Industrial facility in Oostburg, WI | | — | | | 786 | | | 6,589 | | | — | | | — | | | 786 | | | 6,589 | | | 7,375 | | | 1,526 | | | 2002 | | Jul. 2018 | | 35 yrs. |
| Warehouse facility in Kampen, Netherlands | | — | | | 3,251 | | | 12,858 | | | 126 | | | (750) | | | 3,100 | | | 12,385 | | | 15,485 | | | 2,722 | | | 1976 | | Jul. 2018 | | 26 yrs. |
| Warehouse facility in Azambuja, Portugal | | — | | | 13,527 | | | 35,631 | | | 28,051 | | | (3,988) | | | 12,912 | | | 60,309 | | | 73,221 | | | 9,122 | | | 1994 | | Sep. 2018 | | 28 yrs. |
| | | | | |
| W. P. Carey 20212023 10-K – 124 |
SCHEDULE III — REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)
December 31, 20212023
(in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Initial Cost to Company | | Cost Capitalized Subsequent to Acquisition (a) | | Increase (Decrease) in Net Investments (b) | | Gross Amount at which Carried at Close of Period (c) (d) | | Accumulated Depreciation (d) | | Date of Construction | | Date Acquired | | Life on which
Depreciation in Latest
Statement of
Income
is Computed |
| | | | | | | | | | |
| | | | | | | | | | | |
| Description | | Encumbrances | | Land | | Buildings | | | | Land | | Buildings | | Total | | | | |
| Industrial facility in Dordrecht, Netherlands | | — | | | 3,233 | | | 10,954 | | | — | | | 428 | | | 3,335 | | | 11,280 | | | 14,615 | | | 655 | | | 1986 | | Sep. 2019 | | 40 yrs. |
| Industrial facilities in York, PA and Lexington, SC | | — | | | 4,155 | | | 22,930 | | | — | | | — | | | 4,155 | | | 22,930 | | | 27,085 | | | 1,799 | | | 1968; 1971 | | Oct. 2019 | | 40 yrs. |
| Industrial facility in Queretaro, Mexico | | — | | | 2,851 | | | 12,748 | | | — | | | (3) | | | 2,851 | | | 12,745 | | | 15,596 | | | 903 | | | 1999 | | Oct. 2019 | | 40 yrs. |
| Office facility in Dearborn, MI | | — | | | 1,431 | | | 5,402 | | | — | | | — | | | 1,431 | | | 5,402 | | | 6,833 | | | 393 | | | 2002 | | Oct. 2019 | | 40 yrs. |
| Industrial facilities in Houston, TX and Metairie, LA and office facilities in Houston, TX and Mason, OH | | — | | | 6,130 | | | 24,981 | | | 2,145 | | | — | | | 6,130 | | | 27,126 | | | 33,256 | | | 1,649 | | | Various | | Nov. 2019 | | 40 yrs. |
| Industrial facility in Pardubice, Czech Republic | | — | | | 1,694 | | | 8,793 | | | 436 | | | 276 | | | 1,741 | | | 9,458 | | | 11,199 | | | 534 | | | 1970 | | Nov. 2019 | | 40 yrs. |
| Warehouse facilities in Brabrand, Denmark and Arlandastad, Sweden | | — | | | 6,499 | | | 27,899 | | | 42 | | | 1,503 | | | 6,803 | | | 29,140 | | | 35,943 | | | 1,691 | | | 2012; 2017 | | Nov. 2019 | | 40 yrs. |
| Retail facility in Hamburg, PA | | — | | | 4,520 | | | 34,167 | | | — | | | — | | | 4,520 | | | 34,167 | | | 38,687 | | | 1,996 | | | 2003 | | Dec. 2019 | | 40 yrs. |
| Warehouse facility in Charlotte, NC | | — | | | 6,481 | | | 82,936 | | | — | | | — | | | 6,481 | | | 82,936 | | | 89,417 | | | 4,782 | | | 1995 | | Dec. 2019 | | 40 yrs. |
| Warehouse facility in Buffalo Grove, IL | | — | | | 3,287 | | | 10,167 | | | — | | | — | | | 3,287 | | | 10,167 | | | 13,454 | | | 802 | | | 1987 | | Dec. 2019 | | 40 yrs. |
| Industrial facility in Hvidovre, Denmark | | — | | | 1,931 | | | 4,243 | | | — | | | 100 | | | 1,971 | | | 4,303 | | | 6,274 | | | 311 | | | 2007 | | Dec. 2019 | | 40 yrs. |
| Warehouse facility in Huddersfield, United Kingdom | | — | | | 8,659 | | | 29,752 | | | — | | | 799 | | | 8,839 | | | 30,371 | | | 39,210 | | | 1,612 | | | 2005 | | Dec. 2019 | | 40 yrs. |
| Warehouse facility in Newark, United Kingdom | | — | | | 21,869 | | | 74,777 | | | — | | | 2,521 | | | 22,439 | | | 76,728 | | | 99,167 | | | 3,810 | | | 2006 | | Jan. 2020 | | 40 yrs. |
| Industrial facility in Langen, Germany | | — | | | 14,160 | | | 7,694 | | | 32,169 | | | (3,028) | | | 13,232 | | | 37,763 | | | 50,995 | | | 856 | | | 2021 | | Jan. 2020 | | 40 yrs. |
| Industrial facility in Aurora, OR | | — | | | 2,914 | | | 21,459 | | | — | | | (5,000) | | | 2,914 | | | 16,459 | | | 19,373 | | | 797 | | | 1976 | | Jan. 2020 | | 40 yrs. |
| Warehouse facility in Vojens, Denmark | | — | | | 1,031 | | | 8,784 | | | — | | | 293 | | | 1,062 | | | 9,046 | | | 10,108 | | | 434 | | | 2020 | | Jan. 2020 | | 40 yrs. |
| Office facility in Kitzingen, Germany | | — | | | 4,812 | | | 41,125 | | | — | | | (526) | | | 4,758 | | | 40,653 | | | 45,411 | | | 1,844 | | | 1967 | | Mar. 2020 | | 40 yrs. |
| Warehouse facility in Knoxville, TN | | — | | | 2,455 | | | 47,446 | | | — | | | — | | | 2,455 | | | 47,446 | | | 49,901 | | | 1,802 | | | 2020 | | Jun. 2020 | | 40 yrs. |
| Industrial facilities in Bluffton and Plymouth, IN; and Lawrence, KS | | — | | | 674 | | | 33,519 | | | 20,542 | | | — | | | 1,064 | | | 53,671 | | | 54,735 | | | 1,099 | | | 1981; 2014; 2021 | | Sep 2020; Dec. 2021 | | 40 yrs. |
| Industrial facility in Huntley, IL | | — | | | 5,260 | | | 26,617 | | | — | | | — | | | 5,260 | | | 26,617 | | | 31,877 | | | 835 | | | 1996 | | Sep. 2020 | | 40 yrs. |
| Industrial facilities in Winter Haven, FL; Belvedere, IL; and Fayetteville, NC | | — | | | 8,232 | | | 31,745 | | | — | | | — | | | 8,232 | | | 31,745 | | | 39,977 | | | 969 | | | 1954; 1984; 1997 | | Oct. 2020 | | 40 yrs. |
| Retail facilities located throughout Spain | | — | | | 34,216 | | | 57,151 | | | — | | | (2,906) | | | 33,128 | | | 55,333 | | | 88,461 | | | 1,621 | | | Various | | Oct. 2020 | | 40 yrs. |
| Warehouse facility in Little Canada, MN | | — | | | 3,384 | | | 23,422 | | | — | | | — | | | 3,384 | | | 23,422 | | | 26,806 | | | 686 | | | 1987 | | Oct. 2020 | | 40 yrs. |
| Warehouse facility in Hurricane, UT | | — | | | 5,154 | | | 22,893 | | | — | | | — | | | 5,154 | | | 22,893 | | | 28,047 | | | 610 | | | 2005 | | Dec. 2020 | | 40 yrs. |
| Industrial facilities in Bethlehem, PA and Waco, TX | | — | | | 4,673 | | | 19,111 | | | — | | | — | | | 4,673 | | | 19,111 | | | 23,784 | | | 507 | | | Various | | Dec. 2020 | | 40 yrs. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Initial Cost to Company | | Cost Capitalized Subsequent to Acquisition (a) | | Increase (Decrease) in Net Investments (b) | | Gross Amount at which Carried at Close of Period (c) (d) | | Accumulated Depreciation (d) | | Date of Construction | | Date Acquired | | Life on which
Depreciation in Latest
Statement of
Income
is Computed |
| | | | | | | | | | |
| | | | | | | | | | | |
| Description | | Encumbrances | | Land | | Buildings | | | | Land | | Buildings | | Total | | | | |
| Retail facilities in Amsterdam, Moordrecht, and Rotterdam, Netherlands | | — | | | 2,582 | | | 18,731 | | | 11,338 | | | (934) | | | 2,507 | | | 29,210 | | | 31,717 | | | 4,732 | | | Various | | Oct. 2018 | | 27 - 37 yrs. |
| Warehouse facility in Bad Wünnenberg, Germany | | — | | | 2,916 | | | 39,687 | | | — | | | (22,500) | | | 1,266 | | | 18,837 | | | 20,103 | | | 2,542 | | | 1996 | | Oct. 2018 | | 40 yrs. |
| Industrial facility in Norfolk, NE | | — | | | 802 | | | 3,686 | | | — | | | — | | | 802 | | | 3,686 | | | 4,488 | | | 646 | | | 1975 | | Oct. 2018 | | 40 yrs. |
| Retail facilities in Phoenix, AZ and Columbia, MD | | — | | | 18,286 | | | 33,030 | | | — | | | — | | | 18,286 | | | 33,030 | | | 51,316 | | | 4,532 | | | 2006 | | Oct. 2018 | | 40 yrs. |
| Retail facility in Gorzow, Poland | | — | | | 1,736 | | | 8,298 | | | — | | | (302) | | | 1,684 | | | 8,048 | | | 9,732 | | | 1,197 | | | 2008 | | Oct. 2018 | | 40 yrs. |
| Industrial facilities in Sergeant Bluff, IA; Bossier City, LA; and Alvarado, TX | | — | | | 6,460 | | | 49,462 | | | — | | | — | | | 6,460 | | | 49,462 | | | 55,922 | | | 7,349 | | | Various | | Oct. 2018 | | 40 yrs. |
| Industrial facility in Glendale Heights, IL | | — | | | 4,237 | | | 45,484 | | | — | | | — | | | 4,237 | | | 45,484 | | | 49,721 | | | 4,195 | | | 1991 | | Oct. 2018 | | 38 yrs. |
| Industrial facilities in Mayodan, Sanford, and Stoneville, NC | | — | | | 3,505 | | | 20,913 | | | — | | | — | | | 3,505 | | | 20,913 | | | 24,418 | | | 2,877 | | | 1992; 1997; 1998 | | Oct. 2018 | | 29 yrs. |
| Warehouse facility in Dillon, SC | | — | | | 3,424 | | | 43,114 | | | — | | | — | | | 3,424 | | | 43,114 | | | 46,538 | | | 6,405 | | | 2001 | | Oct. 2018 | | 40 yrs. |
| Specialty facility in Birmingham, United Kingdom | | — | | | 7,383 | | | 7,687 | | | — | | | (240) | | | 7,266 | | | 7,564 | | | 14,830 | | | 1,026 | | | 2009 | | Oct. 2018 | | 40 yrs. |
| Retail facilities in Spain | | — | | | 17,626 | | | 44,501 | | | — | | | (1,870) | | | 17,096 | | | 43,161 | | | 60,257 | | | 6,041 | | | Various | | Oct. 2018 | | 40 yrs. |
| Warehouse facility in Gadki, Poland | | — | | | 1,376 | | | 6,137 | | | — | | | (226) | | | 1,335 | | | 5,952 | | | 7,287 | | | 841 | | | 2011 | | Oct. 2018 | | 40 yrs. |
| Warehouse facility in Zagreb, Croatia | | — | | | 15,789 | | | 33,287 | | | — | | | (1,478) | | | 15,313 | | | 32,285 | | | 47,598 | | | 6,632 | | | 2001 | | Oct. 2018 | | 26 yrs. |
| Industrial facilities in Middleburg Heights and Union Township, OH | | 3,439 | | | 1,295 | | | 13,384 | | | — | | | — | | | 1,295 | | | 13,384 | | | 14,679 | | | 1,820 | | | 1990; 1997 | | Oct. 2018 | | 40 yrs. |
| Retail facility in Las Vegas, NV | | — | | | — | | | 79,720 | | | — | | | — | | | — | | | 79,720 | | | 79,720 | | | 10,319 | | | 2012 | | Oct. 2018 | | 40 yrs. |
| Industrial facilities in the United States | | — | | | 20,517 | | | 14,135 | | | — | | | 30,060 | | | 22,585 | | | 42,127 | | | 64,712 | | | 4,598 | | | Various | | Oct. 2018 | | 40 yrs. |
| Warehouse facility in Bowling Green, KY | | — | | | 2,652 | | | 51,915 | | | 72,976 | | | (11) | | | 2,652 | | | 124,880 | | | 127,532 | | | 10,960 | | | 2011 | | Oct. 2018 | | 40 yrs. |
| Warehouse facilities in the United Kingdom | | — | | | 6,791 | | | 2,315 | | | — | | | (145) | | | 6,683 | | | 2,278 | | | 8,961 | | | 346 | | | Various | | Oct. 2018 | | 40 yrs. |
| Industrial facility in Evansville, IN | | — | | | 180 | | | 22,095 | | | — | | | — | | | 180 | | | 22,095 | | | 22,275 | | | 2,929 | | | 2009 | | Oct. 2018 | | 40 yrs. |
| Warehouse facility in Elorrio, Spain | | — | | | 7,858 | | | 12,728 | | | — | | | (619) | | | 7,622 | | | 12,345 | | | 19,967 | | | 1,931 | | | 1996 | | Oct. 2018 | | 40 yrs. |
| Industrial and office facilities in Elberton, GA | | — | | | 879 | | | 2,014 | | | — | | | — | | | 879 | | | 2,014 | | | 2,893 | | | 375 | | | 1997; 2002 | | Oct. 2018 | | 40 yrs. |
| Retail facilities in Dugo Selo, Kutina, Samobor, Spansko, and Zagreb, Croatia | | — | | | 5,549 | | | 12,408 | | | 1,691 | | | 5,937 | | | 6,602 | | | 18,983 | | | 25,585 | | | 3,711 | | | 2000; 2002; 2003 | | Oct. 2018 | | 26 yrs. |
| Office and warehouse facilities in the United States | | — | | | 42,793 | | | 193,666 | | | — | | | — | | | 42,793 | | | 193,666 | | | 236,459 | | | 27,795 | | | Various | | Oct. 2018 | | 40 yrs. |
| Warehouse facilities in Breda, Elst, Gieten, Raalte, and Woerden, Netherlands | | — | | | 37,755 | | | 91,666 | | | 4,787 | | | (3,872) | | | 36,619 | | | 93,717 | | | 130,336 | | | 12,321 | | | Various | | Oct. 2018 | | 40 yrs. |
| Warehouse facilities in Oxnard and Watsonville, CA | | — | | | 22,453 | | | 78,814 | | | — | | | — | | | 22,453 | | | 78,814 | | | 101,267 | | | 10,781 | | | 1975; 1994; 2002 | | Oct. 2018 | | 40 yrs. |
| Retail facilities in Italy | | — | | | 75,492 | | | 138,280 | | | 7,242 | | | (7,124) | | | 73,219 | | | 140,671 | | | 213,890 | | | 20,168 | | | Various | | Oct. 2018 | | 40 yrs. |
| | | | | |
| W. P. Carey 20212023 10-K – 125 |
SCHEDULE III — REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)
December 31, 20212023
(in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Initial Cost to Company | | Cost Capitalized Subsequent to Acquisition (a) | | Increase (Decrease) in Net Investments (b) | | Gross Amount at which Carried at Close of Period (c) (d) | | Accumulated Depreciation (d) | | Date of Construction | | Date Acquired | | Life on which
Depreciation in Latest
Statement of
Income
is Computed |
| | | | | | | | | | |
| | | | | | | | | | | |
| Description | | Encumbrances | | Land | | Buildings | | | | Land | | Buildings | | Total | | | | |
| Industrial facilities in St. Charles, MO and Green Bay, WI | | — | | | 2,966 | | | 20,055 | | | — | | | — | | | 2,966 | | | 20,055 | | | 23,021 | | | 521 | | | 1981; 2009 | | Dec. 2020 | | 40 yrs. |
| Industrial facilities in Pleasanton, KS; Savage, MN; Grove City, OH; and Mahanoy City, PA | | — | | | 7,717 | | | 21,569 | | | — | | | — | | | 7,717 | | | 21,569 | | | 29,286 | | | 539 | | | Various | | Dec. 2020 | | 40 yrs. |
| Outdoor advertising in Fort Washington, Huntington Valley, and West Chester, PA | | — | | | — | | | 492 | | | — | | | — | | | — | | | 492 | | | 492 | | | 11 | | | 2011; 2014; 2016 | | Jan. 2021 | | 40 yrs. |
| Warehouse facilities in Grove City, OH and Anderson, SC | | — | | | 1,415 | | | 15,151 | | | — | | | — | | | 1,415 | | | 15,151 | | | 16,566 | | | 346 | | | 1995; 2001 | | Feb. 2021 | | 40 yrs. |
| Office and retail facilities in NJ and PA | | — | | | 17,537 | | | 25,987 | | | — | | | — | | | 17,537 | | | 25,987 | | | 43,524 | | | 577 | | | Various | | Feb. 2021 | | 40 yrs. |
| Land and warehouse facilities in CA | | — | | | 8,513 | | | 45,669 | | | 6 | | | — | | | 8,516 | | | 45,672 | | | 54,188 | | | 1,017 | | | Various | | Feb. 2021 | | 40 yrs. |
| Retail facilities in France | | — | | | 15,954 | | | 104,578 | | | — | | | (4,310) | | | 15,384 | | | 100,838 | | | 116,222 | | | 1,899 | | | 1968; 1981; 1983 | | Apr. 2021 | | 40 yrs. |
| Warehouse facility in Detroit, MI | | — | | | 3,625 | | | 47,743 | | | — | | | — | | | 3,625 | | | 47,743 | | | 51,368 | | | 814 | | | 1991 | | Apr. 2021 | | 40 yrs. |
| Warehouse facility in Solihull, United Kingdom | | — | | | 42,137 | | | 123,315 | | | — | | | (4,479) | | | 40,996 | | | 119,977 | | | 160,973 | | | 1,989 | | | 2021 | | May 2021 | | 40 yrs. |
| Net-lease student housing facility in New Rochelle, NY | | — | | | 3,617 | | | 21,590 | | | — | | | — | | | 3,617 | | | 21,590 | | | 25,207 | | | 356 | | | 2018 | | May 2021 | | 40 yrs. |
| Industrial facility in Groveport, OH | | — | | | — | | | 26,639 | | | — | | | — | | | — | | | 26,639 | | | 26,639 | | | 440 | | | 1982 | | May 2021 | | 40 yrs. |
| Industrial facility in Dakota, IL | | — | | | 1,970 | | | 50,369 | | | — | | | — | | | 1,970 | | | 50,369 | | | 52,339 | | | 807 | | | 1978 | | May 2021 | | 40 yrs. |
| Industrial facility in San Jose, CA | | — | | | 12,808 | | | 31,714 | | | — | | | — | | | 12,808 | | | 31,714 | | | 44,522 | | | 506 | | | 1984 | | May 2021 | | 40 yrs. |
| Warehouse facility in Opelika, AL | | — | | | 2,115 | | | 39,980 | | | — | | | — | | | 2,115 | | | 39,980 | | | 42,095 | | | 570 | | | 2005 | | Jun. 2021 | | 40 yrs. |
| Warehouse facilities in Elk Grove Village and Niles, IL; and Guelph, Canada | | — | | | 12,932 | | | 25,096 | | | — | | | — | | | 12,932 | | | 25,096 | | | 38,028 | | | 354 | | | 1962; 1976; 1983 | | Jun. 2021 | | 40 yrs. |
| Warehouse facility in Rome, NY | | — | | | 1,480 | | | 47,781 | | | — | | | — | | | 1,480 | | | 47,781 | | | 49,261 | | | 671 | | | 2021 | | Jun. 2021 | | 40 yrs. |
| Warehouse facility in Frankfort, IN | | — | | | 5,423 | | | 95,915 | | | — | | | — | | | 5,423 | | | 95,915 | | | 101,338 | | | 841 | | | 2015 | | Aug. 2021 | | 40 yrs. |
| Warehouse facility in Rogers, MN | | — | | | 1,871 | | | 20,959 | | | — | | | — | | | 1,871 | | | 20,959 | | | 22,830 | | | 164 | | | 2005 | | Sep. 2021 | | 40 yrs. |
| Industrial facilities in Chattanooga, TN | | — | | | 4,859 | | | 29,302 | | | — | | | — | | | 4,859 | | | 29,302 | | | 34,161 | | | 149 | | | 2006; 2017 | | Oct. 2021 | | 40 yrs. |
| Warehouse facility in Mankato, MN | | — | | | 2,979 | | | 11,619 | | | — | | | — | | | 2,979 | | | 11,619 | | | 14,598 | | | 40 | | | 1976 | | Nov. 2021 | | 40 yrs. |
| Retail facilities in Denmark | | — | | | 2,695 | | | 38,428 | | | — | | | 255 | | | 2,711 | | | 38,667 | | | 41,378 | | | 66 | | | Various | | Dec. 2021 | | 40 yrs. |
| Retail facilities in Poland | | — | | | 15,110 | | | 47,511 | | | — | | | 356 | | | 15,196 | | | 47,781 | | | 62,977 | | | 56 | | | Various | | Dec. 2021 | | 40 yrs. |
| Industrial facility in Cary, IL | | — | | | 4,568 | | | 31,977 | | | — | | | — | | | 4,568 | | | 31,977 | | | 36,545 | | | 9 | | | 1975 | | Dec. 2021 | | 40 yrs. |
| Retail facilities in the Netherlands | | — | | | 9,342 | | | 32,770 | | | — | | | 86 | | | 9,361 | | | 32,837 | | | 42,198 | | | — | | | Various | | Dec. 2021 | | 40 yrs. |
| Outdoor advertising in Pennsauken, NJ | | — | | | 1,025 | | | 397 | | | — | | | — | | | 1,025 | | | 397 | | | 1,422 | | | — | | | Various | | Dec. 2021 | | 40 yrs. |
| | $ | 349,800 | | | $ | 2,303,743 | | | $ | 9,077,373 | | | $ | 844,244 | | | $ | (548,175) | | | $ | 2,151,327 | | | $ | 9,525,858 | | | $ | 11,677,185 | | | $ | 1,448,020 | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Initial Cost to Company | | Cost Capitalized Subsequent to Acquisition (a) | | Increase (Decrease) in Net Investments (b) | | Gross Amount at which Carried at Close of Period (c) (d) | | Accumulated Depreciation (d) | | Date of Construction | | Date Acquired | | Life on which
Depreciation in Latest
Statement of
Income
is Computed |
| | | | | | | | | | |
| | | | | | | | | | | |
| Description | | Encumbrances | | Land | | Buildings | | | | Land | | Buildings | | Total | | | | |
| Land in Hudson, NY | | — | | | 2,405 | | | — | | | — | | | — | | | 2,405 | | | — | | | 2,405 | | | — | | | N/A | | Oct. 2018 | | N/A |
| Land in Chicago, IL | | — | | | 9,887 | | | — | | | — | | | — | | | 9,887 | | | — | | | 9,887 | | | — | | | N/A | | Oct. 2018 | | N/A |
| Industrial facility in Fraser, MI | | — | | | 1,346 | | | 9,551 | | | — | | | — | | | 1,346 | | | 9,551 | | | 10,897 | | | 1,345 | | | 2012 | | Oct. 2018 | | 40 yrs. |
| Net-lease self-storage facilities in the United States | | — | | | 19,583 | | | 108,971 | | | — | | | — | | | 19,583 | | | 108,971 | | | 128,554 | | | 15,973 | | | Various | | Oct. 2018 | | 40 yrs. |
| Warehouse facility in Middleburg Heights, OH | | — | | | 542 | | | 2,507 | | | — | | | — | | | 542 | | | 2,507 | | | 3,049 | | | 341 | | | 2002 | | Oct. 2018 | | 40 yrs. |
| Net-lease self-storage facility in Fort Worth, TX | | — | | | 691 | | | 6,295 | | | — | | | — | | | 691 | | | 6,295 | | | 6,986 | | | 944 | | | 2004 | | Oct. 2018 | | 40 yrs. |
| Retail facilities in Delnice, Pozega, and Sesvete, Croatia | | — | | | 5,519 | | | 9,930 | | | 1,403 | | | (651) | | | 5,353 | | | 10,848 | | | 16,201 | | | 2,211 | | | 2011 | | Oct. 2018 | | 27 yrs. |
| Retail facility in Orlando, FL | | — | | | 6,262 | | | 25,134 | | | 430 | | | — | | | 6,371 | | | 25,455 | | | 31,826 | | | 3,338 | | | 2011 | | Oct. 2018 | | 40 yrs. |
| Industrial facility in Avon, OH | | — | | | 1,447 | | | 5,564 | | | — | | | — | | | 1,447 | | | 5,564 | | | 7,011 | | | 821 | | | 2001 | | Oct. 2018 | | 40 yrs. |
| Industrial facility in Chimelow, Poland | | — | | | 6,158 | | | 28,032 | | | — | | | (1,029) | | | 5,973 | | | 27,188 | | | 33,161 | | | 3,853 | | | 2012 | | Oct. 2018 | | 40 yrs. |
| Net-lease self-storage facility in Fayetteville, NC | | — | | | 1,839 | | | 4,654 | | | — | | | — | | | 1,839 | | | 4,654 | | | 6,493 | | | 890 | | | 2001 | | Oct. 2018 | | 40 yrs. |
| Retail facilities in the United States | | — | | | 19,529 | | | 42,318 | | | — | | | (7,938) | | | 17,297 | | | 36,612 | | | 53,909 | | | 5,267 | | | Various | | Oct. 2018 | | 40 yrs. |
| Education facilities in Montgomery, AL and Savannah, GA | | — | | | 5,508 | | | 12,032 | | | — | | | — | | | 5,508 | | | 12,032 | | | 17,540 | | | 1,705 | | | 1969; 2002 | | Oct. 2018 | | 40 yrs. |
| Office facilities in St. Louis, MO | | — | | | 1,297 | | | 5,362 | | | 7,951 | | | — | | | 1,836 | | | 12,774 | | | 14,610 | | | 2,049 | | | 1995; 1999 | | Oct. 2018; Aug. 2021 | | 40 yrs. |
| Warehouse facility in Zary, Poland | | — | | | 2,062 | | | 10,034 | | | — | | | (365) | | | 2,000 | | | 9,731 | | | 11,731 | | | 1,414 | | | 2013 | | Oct. 2018 | | 40 yrs. |
| Industrial facilities in San Antonio, TX and Sterling, VA | | — | | | 3,198 | | | 23,981 | | | 78,728 | | | (462) | | | 6,767 | | | 98,678 | | | 105,445 | | | 9,761 | | | 1980; 2020 | | Oct. 2018; Dec. 2018 | | 40 yrs. |
| Industrial facility in Elk Grove Village, IL | | — | | | 5,511 | | | 10,766 | | | 2,413 | | | — | | | 5,511 | | | 13,179 | | | 18,690 | | | 1,491 | | | 1961 | | Oct. 2018 | | 40 yrs. |
| Industrial facility in Portage, WI | | 3,693 | | | 3,450 | | | 7,797 | | | — | | | — | | | 3,450 | | | 7,797 | | | 11,247 | | | 1,218 | | | 1970 | | Oct. 2018 | | 40 yrs. |
| Warehouse facility in Saitama Prefecture, Japan | | — | | | 13,507 | | | 25,301 | | | 6,639 | | | (13,574) | | | 10,286 | | | 21,587 | | | 31,873 | | | 2,828 | | | 2007 | | Oct. 2018 | | 40 yrs. |
| Retail facility in Dallas, TX | | — | | | 2,977 | | | 16,168 | | | — | | | — | | | 2,977 | | | 16,168 | | | 19,145 | | | 2,148 | | | 1913 | | Oct. 2018 | | 40 yrs. |
| Retail facilities in Croatia | | — | | | 9,000 | | | 13,002 | | | 1,415 | | | (5,178) | | | 7,568 | | | 10,671 | | | 18,239 | | | 1,932 | | | Various | | Oct. 2018 | | 29 - 37 yrs. |
| Retail facility in Northbrook, IL | | — | | | — | | | 493 | | | 447 | | | — | | | — | | | 940 | | | 940 | | | 291 | | | 2007 | | Oct. 2018 | | 40 yrs. |
| Education facility in Chicago, IL | | — | | | 18,510 | | | 163 | | | — | | | (16,859) | | | 1,793 | | | 21 | | | 1,814 | | | 13 | | | 2015 | | Oct. 2018 | | 40 yrs. |
| Warehouse facility in Dillon, SC | | — | | | 3,516 | | | 44,933 | | | — | | | — | | | 3,516 | | | 44,933 | | | 48,449 | | | 6,625 | | | 2013 | | Oct. 2018 | | 40 yrs. |
| Net-lease self-storage facilities in New York City, NY | | — | | | 29,223 | | | 77,202 | | | 714 | | | — | | | 29,223 | | | 77,916 | | | 107,139 | | | 10,156 | | | Various | | Oct. 2018 | | 40 yrs. |
| Net-lease self-storage facility in Hilo, HI | | — | | | 769 | | | 12,869 | | | — | | | — | | | 769 | | | 12,869 | | | 13,638 | | | 1,687 | | | 2007 | | Oct. 2018 | | 40 yrs. |
| Net-lease self-storage facility in Clearwater, FL | | — | | | 1,247 | | | 5,733 | | | — | | | — | | | 1,247 | | | 5,733 | | | 6,980 | | | 856 | | | 2001 | | Oct. 2018 | | 40 yrs. |
| Warehouse facilities in Gadki, Poland | | — | | | 10,422 | | | 47,727 | | | 57 | | | (1,751) | | | 10,108 | | | 46,347 | | | 56,455 | | | 6,662 | | | 2007; 2010 | | Oct. 2018 | | 40 yrs. |
| | | | | |
| W. P. Carey 20212023 10-K – 126 |
SCHEDULE III — REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)
December 31, 20212023
(in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Initial Cost to Company | | Cost Capitalized Subsequent to Acquisition (a) | | Increase (Decrease) in Net Investments (b) | | Gross Amount at
which Carried at
Close of Period
Total | | Date of Construction | | Date Acquired |
| Description | | Encumbrances | | Land | | Buildings | | | | | |
| Direct Financing Method | | | | | | | | | | | | | | | | |
| Industrial facilities in Irving and Houston, TX | | $ | — | | | $ | — | | | $ | 27,599 | | | $ | — | | | $ | (4,168) | | | $ | 23,431 | | | 1978 | | Jan. 1998 |
| Retail facility in Freehold, NJ | | 2,986 | | | — | | | 17,067 | | | — | | | (379) | | | 16,688 | | | 2004 | | Sep. 2012 |
| Office facilities in Corpus Christi, Odessa, San Marcos, and Waco, TX | | 1,326 | | | 2,089 | | | 14,211 | | | — | | | (1,338) | | | 14,962 | | | 1969; 1996; 2000 | | Sep. 2012 |
| Retail facilities located throughout Germany | | — | | | 28,734 | | | 145,854 | | | 5,582 | | | (57,048) | | | 123,122 | | | Various | | Sep. 2012 |
| Warehouse facility in Brierley Hill, United Kingdom | | — | | | 2,147 | | | 12,357 | | | — | | | (1,175) | | | 13,329 | | | 1996 | | Sep. 2012 |
| Retail facilities in El Paso and Fabens, TX | | — | | | 4,777 | | | 17,823 | | | — | | | (85) | | | 22,515 | | | Various | | Jan. 2014 |
| Industrial facility in Dallas, TX | | — | | | 3,190 | | | 10,010 | | | — | | | 40 | | | 13,240 | | | 1968 | | Jan. 2014 |
| Industrial facility in Eagan, MN | | — | | | — | | | 11,548 | | | — | | | (532) | | | 11,016 | | | 1975 | | Jan. 2014 |
| Retail facility in Gronau, Germany | | — | | | 281 | | | 4,401 | | | — | | | (786) | | | 3,896 | | | 1989 | | Jan. 2014 |
| Industrial and warehouse facility in Newbridge, United Kingdom | | 9,515 | | | 6,851 | | | 22,868 | | | — | | | (7,560) | | | 22,159 | | | 1998 | | Jan. 2014 |
| Industrial facility in Mount Carmel, IL | | — | | | 135 | | | 3,265 | | | — | | | (247) | | | 3,153 | | | 1896 | | Jan. 2014 |
| Retail facility in Vantaa, Finland | | — | | | 5,291 | | | 15,522 | | | — | | | (3,496) | | | 17,317 | | | 2004 | | Jan. 2014 |
| Retail facility in Linköping, Sweden | | — | | | 1,484 | | | 9,402 | | | — | | | (3,073) | | | 7,813 | | | 2004 | | Jan. 2014 |
| Industrial facility in Calgary, Canada | | — | | | — | | | 7,076 | | | — | | | (850) | | | 6,226 | | | 1965 | | Jan. 2014 |
| Industrial facilities in Kearney, MO; Fair Bluff, NC; York, NE; Walbridge, OH; Middlesex Township, PA; Rocky Mount, VA; and Martinsburg, WV | | — | | | 5,780 | | | 40,860 | | | — | | | (561) | | | 46,079 | | | Various | | Jan. 2014 |
| Industrial facility in Göppingen, Germany | | — | | | 10,717 | | | 60,120 | | | — | | | (16,093) | | | 54,744 | | | 1930 | | Jan. 2014 |
| Industrial and office facility in Nagold, Germany | | — | | | 4,553 | | | 17,675 | | | — | | | (131) | | | 22,097 | | | 1994 | | Oct. 2018 |
| Warehouse facilities in Bristol, Leeds, Liverpool, Luton, Newport, Plymouth, and Southampton, United Kingdom | | — | | | 1,062 | | | 23,087 | | | — | | | 951 | | | 25,100 | | | Various | | Oct. 2018 |
| Warehouse facility in Gieten, Netherlands | | — | | | — | | | 15,258 | | | — | | | (138) | | | 15,120 | | | 1985 | | Oct. 2018 |
| Warehouse facility in Oxnard, CA | | — | | | — | | | 10,960 | | | — | | | (995) | | | 9,965 | | | 1975 | | Oct. 2018 |
| Industrial facilities in Bartow, FL; Momence, IL; Smithfield, NC; Hudson, NY; and Ardmore, OK | | — | | | 4,454 | | | 87,030 | | | — | | | 2,496 | | | 93,980 | | | Various | | Oct. 2018 |
| Industrial facility in Countryside, IL | | — | | | 563 | | | 1,457 | | | — | | | 34 | | | 2,054 | | | 1981 | | Oct. 2018 |
| Industrial facility in Clarksville, TN | | 3,225 | | | 1,680 | | | 10,180 | | | — | | | (82) | | | 11,778 | | | 1998 | | Oct. 2018 |
| Industrial facility in Bluffton, IN | | 1,672 | | | 503 | | | 3,407 | | | — | | | (32) | | | 3,878 | | | 1975 | | Oct. 2018 |
| Warehouse facility in Houston, TX | | — | | | — | | | 5,977 | | | — | | | (94) | | | 5,883 | | | 1972 | | Oct. 2018 |
| Less: allowance for credit losses | | | | | | | | | | (17,340) | | | (17,340) | | | | | |
| | $ | 18,724 | | | $ | 84,291 | | | $ | 595,014 | | | $ | 5,582 | | | $ | (112,682) | | | $ | 572,205 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Initial Cost to Company | | Cost Capitalized Subsequent to Acquisition (a) | | Increase (Decrease) in Net Investments (b) | | Gross Amount at which Carried at Close of Period (c) (d) | | Accumulated Depreciation (d) | | Date of Construction | | Date Acquired | | Life on which
Depreciation in Latest
Statement of
Income
is Computed |
| | | | | | | | | | |
| | | | | | | | | | | |
| Description | | Encumbrances | | Land | | Buildings | | | | Land | | Buildings | | Total | | | | |
| Net-lease self-storage facility in Orlando, FL | | — | | | 1,070 | | | 8,686 | | | — | | | — | | | 1,070 | | | 8,686 | | | 9,756 | | | 1,222 | | | 2000 | | Oct. 2018 | | 40 yrs. |
| Retail facility in Lewisville, TX | | — | | | 3,485 | | | 11,263 | | | — | | | — | | | 3,485 | | | 11,263 | | | 14,748 | | | 1,558 | | | 2004 | | Oct. 2018 | | 40 yrs. |
| Research and development facility in Wageningen, Netherlands | | — | | | 5,227 | | | 18,793 | | | — | | | (447) | | | 5,070 | | | 18,503 | | | 23,573 | | | 2,620 | | | 2013 | | Oct. 2018 | | 40 yrs. |
| Net-lease self-storage facility in Palm Coast, FL | | — | | | 1,994 | | | 4,982 | | | — | | | — | | | 1,994 | | | 4,982 | | | 6,976 | | | 871 | | | 2001 | | Oct. 2018 | | 40 yrs. |
| Net-lease self-storage facility in Holiday, FL | | — | | | 1,730 | | | 4,213 | | | — | | | — | | | 1,730 | | | 4,213 | | | 5,943 | | | 719 | | | 1975 | | Oct. 2018 | | 40 yrs. |
| Research and development facility in Drunen, Netherlands | | — | | | 2,316 | | | 9,370 | | | — | | | (351) | | | 2,247 | | | 9,088 | | | 11,335 | | | 1,253 | | | 2014 | | Oct. 2018 | | 40 yrs. |
| Industrial facility New Concord, OH | | 1,189 | | | 958 | | | 2,309 | | | — | | | — | | | 958 | | | 2,309 | | | 3,267 | | | 388 | | | 1999 | | Oct. 2018 | | 40 yrs. |
| Retail facility in Gelsenkirchen, Germany | | — | | | 2,178 | | | 17,097 | | | — | | | (580) | | | 2,112 | | | 16,583 | | | 18,695 | | | 2,280 | | | 2000 | | Oct. 2018 | | 40 yrs. |
| Warehouse facilities in Mszczonow and Tomaszow Mazowiecki, Poland | | — | | | 8,782 | | | 53,575 | | | — | | | (1,877) | | | 8,518 | | | 51,962 | | | 60,480 | | | 7,740 | | | 1995; 2000 | | Oct. 2018 | | 40 yrs. |
| Warehouse facility in Sered, Slovakia | | — | | | 3,428 | | | 28,005 | | | — | | | (946) | | | 3,325 | | | 27,162 | | | 30,487 | | | 3,771 | | | 2004 | | Oct. 2018 | | 40 yrs. |
| Industrial facility in Tuchomerice, Czech Republic | | — | | | 7,864 | | | 27,006 | | | — | | | (1,050) | | | 7,627 | | | 26,193 | | | 33,820 | | | 3,589 | | | 1998 | | Oct. 2018 | | 40 yrs. |
| Office facility in Warsaw, Poland | | 29,901 | | | — | | | 44,990 | | | 42 | | | (15,734) | | | — | | | 29,298 | | | 29,298 | | | 5,833 | | | 2015 | | Oct. 2018 | | 40 yrs. |
| Warehouse facility in Kaunas, Lithuania | | 35,382 | | | 10,199 | | | 47,391 | | | — | | | (1,734) | | | 9,892 | | | 45,964 | | | 55,856 | | | 6,451 | | | 2008 | | Oct. 2018 | | 40 yrs. |
| Specialty facility in Jacksonville, FL | | 11,429 | | | 906 | | | 17,020 | | | — | | | — | | | 906 | | | 17,020 | | | 17,926 | | | 2,275 | | | 2015 | | Oct. 2018 | | 40 yrs. |
| Warehouse facilities in Houston, TX | | — | | | 791 | | | 1,990 | | | — | | | — | | | 791 | | | 1,990 | | | 2,781 | | | 291 | | | 1972 | | Oct. 2018 | | 40 yrs. |
| Warehouse facilities in Shelbyville, IN; Kalamazoo, MI; Tiffin, OH; Andersonville, TN; and Millwood, WV | | — | | | 2,868 | | | 37,571 | | | — | | | — | | | 2,868 | | | 37,571 | | | 40,439 | | | 5,613 | | | Various | | Oct. 2018 | | 40 yrs. |
| Warehouse facility in Perrysburg, OH | | — | | | 806 | | | 11,922 | | | — | | | — | | | 806 | | | 11,922 | | | 12,728 | | | 1,839 | | | 1974 | | Oct. 2018 | | 40 yrs. |
| Warehouse facility in Dillon, SC | | — | | | 620 | | | 46,319 | | | 434 | | | — | | | 620 | | | 46,753 | | | 47,373 | | | 5,591 | | | 2019 | | Oct. 2018 | | 40 yrs. |
| Warehouse facility in Zabia Wola, Poland | | 14,476 | | | 4,742 | | | 23,270 | | | 5,636 | | | (983) | | | 4,599 | | | 28,066 | | | 32,665 | | | 3,831 | | | 1999 | | Oct. 2018 | | 40 yrs. |
| Laboratory facility in Buffalo Grove, IL | | — | | | 2,224 | | | 6,583 | | | — | | | — | | | 2,224 | | | 6,583 | | | 8,807 | | | 929 | | | 1992 | | Oct. 2018 | | 40 yrs. |
| Warehouse facilities in McHenry, IL | | — | | | 5,794 | | | 21,141 | | | — | | | — | | | 5,794 | | | 21,141 | | | 26,935 | | | 4,412 | | | 1990; 1999 | | Dec. 2018 | | 27 - 28 yrs. |
| Industrial facilities in Chicago, Cortland, Forest View, Morton Grove, and Northbrook, IL and Madison and Monona, WI | | — | | | 23,267 | | | 9,166 | | | — | | | — | | | 23,267 | | | 9,166 | | | 32,433 | | | 1,826 | | | Various | | Dec. 2018; Dec. 2019 | | 35 - 40 yrs. |
| Warehouse facility in Kilgore, TX | | — | | | 3,002 | | | 36,334 | | | 14,096 | | | (6) | | | 3,002 | | | 50,424 | | | 53,426 | | | 6,885 | | | 2007 | | Dec. 2018 | | 37 yrs. |
| Industrial facility in San Luis Potosi, Mexico | | — | | | 2,787 | | | 12,945 | | | — | | | — | | | 2,787 | | | 12,945 | | | 15,732 | | | 1,906 | | | 2009 | | Dec. 2018 | | 39 yrs. |
| Industrial facility in Legnica, Poland | | — | | | 995 | | | 9,787 | | | 6,007 | | | (523) | | | 963 | | | 15,303 | | | 16,266 | | | 2,495 | | | 2002 | | Dec. 2018 | | 29 yrs. |
| Industrial facility in Meru, France | | — | | | 4,231 | | | 14,731 | | | 8 | | | (545) | | | 4,109 | | | 14,316 | | | 18,425 | | | 2,709 | | | 1997 | | Dec. 2018 | | 29 yrs. |
| Education facility in Portland, OR | | — | | | 2,396 | | | 23,258 | | | 4,177 | | | — | | | 2,396 | | | 27,435 | | | 29,831 | | | 4,276 | | | 2006 | | Feb. 2019 | | 40 yrs. |
| | | | | |
| W. P. Carey 20212023 10-K – 127 |
SCHEDULE III — REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)
December 31, 20212023
(in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Initial Cost to Company | | Cost Capitalized Subsequent to
Acquisition (a) | | Increase (Decrease) in Net
Investments (b) | | Gross Amount at which Carried at Close of Period (c) (d) | | | | | | | | Life on which
Depreciation
in Latest
Statement of
Income is
Computed |
| Description | | Encumbrances | | Land | | Buildings | | Personal Property | | | | Land | | Buildings | | Personal Property | | Total | | Accumulated Depreciation (d) | | Date of Construction | | Date Acquired | |
| Land, Buildings and Improvements Attributable to Operating Properties – Hotels | | | | | | | | | | | | | | | | | | |
| Bloomington, MN | | $ | — | | | $ | 3,810 | | | $ | 29,126 | | | $ | 3,622 | | | $ | 6,182 | | | $ | (247) | | | $ | 3,874 | | | $ | 31,199 | | | $ | 7,420 | | | $ | 42,493 | | | $ | 12,899 | | | 2008 | | Jan. 2014 | | 34 yrs. |
| Land, Buildings and Improvements Attributable to Operating Properties – Self-Storage Facilities | | | | | | | | | | | | | | | | |
| Loves Park, IL | | — | | | 1,412 | | | 4,853 | | | — | | | 35 | | | — | | | 1,412 | | | 4,862 | | | 26 | | | 6,300 | | | 588 | | | 1997 | | Oct. 2018 | | 40 yrs. |
| Cherry Valley, IL | | — | | | 1,339 | | | 4,160 | | | — | | | 3 | | | — | | | 1,339 | | | 4,160 | | | 3 | | | 5,502 | | | 486 | | | 1988 | | Oct. 2018 | | 40 yrs. |
| Rockford, IL | | — | | | 695 | | | 3,873 | | | — | | | 26 | | | — | | | 695 | | | 3,890 | | | 9 | | | 4,594 | | | 413 | | | 1979 | | Oct. 2018 | | 40 yrs. |
| Rockford, IL | | — | | | 87 | | | 785 | | | — | | | — | | | — | | | 87 | | | 785 | | | — | | | 872 | | | 75 | | | 1979 | | Oct. 2018 | | 40 yrs. |
| Rockford, IL | | — | | | 454 | | | 4,724 | | | — | | | 12 | | | — | | | 454 | | | 4,733 | | | 3 | | | 5,190 | | | 414 | | | 1957 | | Oct. 2018 | | 40 yrs. |
| Peoria, IL | | — | | | 444 | | | 4,944 | | | — | | | 238 | | | — | | | 443 | | | 5,164 | | | 19 | | | 5,626 | | | 625 | | | 1990 | | Oct. 2018 | | 40 yrs. |
| East Peoria, IL | | — | | | 268 | | | 3,290 | | | — | | | 92 | | | — | | | 268 | | | 3,374 | | | 8 | | | 3,650 | | | 397 | | | 1986 | | Oct. 2018 | | 40 yrs. |
| Loves Park, IL | | — | | | 721 | | | 2,973 | | | — | | | 17 | | | — | | | 721 | | | 2,990 | | | — | | | 3,711 | | | 325 | | | 1978 | | Oct. 2018 | | 40 yrs. |
| Winder, GA | | — | | | 338 | | | 1,310 | | | — | | | 65 | | | — | | | 338 | | | 1,353 | | | 22 | | | 1,713 | | | 161 | | | 2006 | | Oct. 2018 | | 40 yrs. |
| Winder, GA | | — | | | 821 | | | 3,180 | | | — | | | 21 | | | — | | | 821 | | | 3,190 | | | 11 | | | 4,022 | | | 367 | | | 2001 | | Oct. 2018 | | 40 yrs. |
| | $ | — | | | $ | 10,389 | | | $ | 63,218 | | | $ | 3,622 | | | $ | 6,691 | | | $ | (247) | | | $ | 10,452 | | | $ | 65,700 | | | $ | 7,521 | | | $ | 83,673 | | | $ | 16,750 | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Initial Cost to Company | | Cost Capitalized Subsequent to Acquisition (a) | | Increase (Decrease) in Net Investments (b) | | Gross Amount at which Carried at Close of Period (c) (d) | | Accumulated Depreciation (d) | | Date of Construction | | Date Acquired | | Life on which
Depreciation in Latest
Statement of
Income
is Computed |
| | | | | | | | | | |
| | | | | | | | | | | |
| Description | | Encumbrances | | Land | | Buildings | | | | Land | | Buildings | | Total | | | | |
| Warehouse facility in Inwood, WV | | — | | | 3,265 | | | 36,692 | | | — | | | — | | | 3,265 | | | 36,692 | | | 39,957 | | | 4,830 | | | 2000 | | Mar. 2019 | | 40 yrs. |
| Industrial facility in Hurricane, UT | | — | | | 1,914 | | | 37,279 | | | — | | | — | | | 1,914 | | | 37,279 | | | 39,193 | | | 4,642 | | | 2011 | | Mar. 2019 | | 40 yrs. |
| Industrial facility in Bensenville, IL | | — | | | 8,640 | | | 4,948 | | | — | | | 300 | | | 8,940 | | | 4,948 | | | 13,888 | | | 990 | | | 1981 | | Mar. 2019 | | 40 yrs. |
| Industrial facility in Katowice, Poland | | — | | | — | | | 764 | | | 15,163 | | | 72 | | | — | | | 15,999 | | | 15,999 | | | 1,638 | | | 2019 | | Apr. 2019 | | 40 yrs. |
| Industrial facilities in Westerville, OH and North Wales, PA | | — | | | 1,545 | | | 6,508 | | | — | | | — | | | 1,545 | | | 6,508 | | | 8,053 | | | 999 | | | 1960; 1997 | | May 2019 | | 40 yrs. |
| Industrial facilities in Fargo, ND; Norristown, PA; and Atlanta, TX | | — | | | 1,616 | | | 5,589 | | | — | | | — | | | 1,616 | | | 5,589 | | | 7,205 | | | 1,004 | | | Various | | May 2019 | | 40 yrs. |
| Industrial facilities in Chihuahua and Juarez, Mexico | | — | | | 3,426 | | | 7,286 | | | — | | | — | | | 3,426 | | | 7,286 | | | 10,712 | | | 1,233 | | | 1983; 1986; 1991 | | May 2019 | | 40 yrs. |
| Warehouse facility in Statesville, NC | | — | | | 1,683 | | | 13,827 | | | — | | | — | | | 1,683 | | | 13,827 | | | 15,510 | | | 1,906 | | | 1979 | | Jun. 2019 | | 40 yrs. |
| Industrial facilities in Searcy, AR and Conestoga, PA | | — | | | 4,290 | | | 51,410 | | | 21,027 | | | — | | | 4,678 | | | 72,049 | | | 76,727 | | | 9,039 | | | 1950; 1951 | | Jun. 2019; Apr. 2021 | | 40 yrs. |
| Industrial facilities in Hartford and Milwaukee, WI | | — | | | 1,471 | | | 21,293 | | | — | | | — | | | 1,471 | | | 21,293 | | | 22,764 | | | 2,841 | | | 1964; 1992; 1993 | | Jul. 2019 | | 40 yrs. |
| Industrial facilities in Brockville and Prescott, Canada | | — | | | 2,025 | | | 9,519 | | | — | | | — | | | 2,025 | | | 9,519 | | | 11,544 | | | 1,278 | | | 1955; 1995 | | Jul. 2019 | | 40 yrs. |
| Industrial facility in Dordrecht, Netherlands | | — | | | 3,233 | | | 10,954 | | | — | | | 72 | | | 3,253 | | | 11,006 | | | 14,259 | | | 1,204 | | | 1986 | | Sep. 2019 | | 40 yrs. |
| Industrial facilities in York, PA and Lexington, SC | | — | | | 4,155 | | | 22,930 | | | — | | | — | | | 4,155 | | | 22,930 | | | 27,085 | | | 3,401 | | | 1968; 1971 | | Oct. 2019 | | 40 yrs. |
| Industrial facility in Queretaro, Mexico | | — | | | 2,851 | | | 12,748 | | | — | | | (3) | | | 2,851 | | | 12,745 | | | 15,596 | | | 1,707 | | | 1999 | | Oct. 2019 | | 40 yrs. |
| Industrial facilities in Houston, TX and Metairie, LA and office facilities in Houston, TX and Mason, OH | | — | | | 6,130 | | | 24,981 | | | 2,145 | | | — | | | 6,130 | | | 27,126 | | | 33,256 | | | 3,240 | | | Various | | Nov. 2019 | | 40 yrs. |
| Industrial facility in Pardubice, Czech Republic | | — | | | 1,694 | | | 8,793 | | | 436 | | | 3 | | | 1,698 | | | 9,228 | | | 10,926 | | | 1,016 | | | 1970 | | Nov. 2019 | | 40 yrs. |
| Warehouse facilities in Brabrand, Denmark and Arlandastad, Sweden | | — | | | 6,499 | | | 27,899 | | | 147 | | | (492) | | | 6,362 | | | 27,691 | | | 34,053 | | | 3,153 | | | 2012; 2017 | | Nov. 2019 | | 40 yrs. |
| Retail facility in Hamburg, PA | | — | | | 4,520 | | | 34,167 | | | — | | | — | | | 4,520 | | | 34,167 | | | 38,687 | | | 3,992 | | | 2003 | | Dec. 2019 | | 40 yrs. |
| Warehouse facility in Charlotte, NC | | — | | | 6,481 | | | 82,936 | | | — | | | — | | | 6,481 | | | 82,936 | | | 89,417 | | | 9,475 | | | 1995 | | Dec. 2019 | | 40 yrs. |
| Warehouse facility in Buffalo Grove, IL | | — | | | 3,287 | | | 10,167 | | | — | | | — | | | 3,287 | | | 10,167 | | | 13,454 | | | 1,295 | | | 1987 | | Dec. 2019 | | 40 yrs. |
| Industrial facility in Hvidovre, Denmark | | — | | | 1,931 | | | 4,243 | | | — | | | (53) | | | 1,923 | | | 4,198 | | | 6,121 | | | 601 | | | 2007 | | Dec. 2019 | | 40 yrs. |
| Warehouse facility in Huddersfield, United Kingdom | | — | | | 8,659 | | | 29,752 | | | — | | | (1,423) | | | 8,338 | | | 28,650 | | | 36,988 | | | 3,038 | | | 2005 | | Dec. 2019 | | 40 yrs. |
| Warehouse facility in Newark, United Kingdom | | — | | | 21,869 | | | 74,777 | | | — | | | (3,098) | | | 21,168 | | | 72,380 | | | 93,548 | | | 7,213 | | | 2006 | | Jan. 2020 | | 40 yrs. |
| Industrial facility in Langen, Germany | | — | | | 14,160 | | | 7,694 | | | 32,169 | | | (4,271) | | | 12,909 | | | 36,843 | | | 49,752 | | | 2,677 | | | 2021 | | Jan. 2020 | | 40 yrs. |
| Industrial facility in Aurora, OR | | — | | | 2,914 | | | 21,459 | | | — | | | (5,000) | | | 2,914 | | | 16,459 | | | 19,373 | | | 1,620 | | | 1976 | | Jan. 2020 | | 40 yrs. |
| Warehouse facility in Vojens, Denmark | | — | | | 1,031 | | | 8,784 | | | — | | | 24 | | | 1,033 | | | 8,806 | | | 9,839 | | | 863 | | | 2020 | | Jan. 2020 | | 40 yrs. |
| Office facility in Kitzingen, Germany | | — | | | 4,812 | | | 41,125 | | | — | | | (1,631) | | | 4,642 | | | 39,664 | | | 44,306 | | | 3,782 | | | 1967 | | Mar. 2020 | | 40 yrs. |
| Warehouse facility in Knoxville, TN | | — | | | 2,455 | | | 47,446 | | | — | | | — | | | 2,455 | | | 47,446 | | | 49,901 | | | 4,174 | | | 2020 | | Jun. 2020 | | 40 yrs. |
| | | | | |
| W. P. Carey 2023 10-K– 128 |
SCHEDULE III — REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)
December 31, 2023
(in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Initial Cost to Company | | Cost Capitalized Subsequent to Acquisition (a) | | Increase (Decrease) in Net Investments (b) | | Gross Amount at which Carried at Close of Period (c) (d) | | Accumulated Depreciation (d) | | Date of Construction | | Date Acquired | | Life on which
Depreciation in Latest
Statement of
Income
is Computed |
| | | | | | | | | | |
| | | | | | | | | | | |
| Description | | Encumbrances | | Land | | Buildings | | | | Land | | Buildings | | Total | | | | |
| Industrial facilities in Bluffton and Plymouth, IN; and Lawrence, KS | | — | | | 674 | | | 33,519 | | | 20,542 | | | — | | | 1,064 | | | 53,671 | | | 54,735 | | | 3,782 | | | 1981; 2014; 2021 | | Sep 2020; Dec. 2021 | | 40 yrs. |
| Industrial facility in Huntley, IL | | — | | | 5,260 | | | 26,617 | | | — | | | — | | | 5,260 | | | 26,617 | | | 31,877 | | | 2,165 | | | 1996 | | Sep. 2020 | | 40 yrs. |
| Industrial facilities in Winter Haven, FL; Belvedere, IL; and Fayetteville, NC | | — | | | 8,232 | | | 31,745 | | | — | | | — | | | 8,232 | | | 31,745 | | | 39,977 | | | 2,557 | | | 1954; 1984; 1997 | | Oct. 2020 | | 40 yrs. |
| Retail facilities in Spain | | — | | | 34,216 | | | 57,151 | | | 239 | | | (5,061) | | | 32,321 | | | 54,224 | | | 86,545 | | | 4,300 | | | Various | | Oct. 2020 | | 40 yrs. |
| Warehouse facility in Little Canada, MN | | — | | | 3,384 | | | 23,422 | | | — | | | — | | | 3,384 | | | 23,422 | | | 26,806 | | | 1,857 | | | 1987 | | Oct. 2020 | | 40 yrs. |
| Warehouse facility in Hurricane, UT | | — | | | 5,154 | | | 22,893 | | | 20,517 | | | — | | | 5,154 | | | 43,410 | | | 48,564 | | | 2,688 | | | 2005 | | Dec. 2020 | | 40 yrs. |
| Industrial facilities in Bethlehem, PA and Waco, TX | | — | | | 4,673 | | | 19,111 | | | — | | | — | | | 4,673 | | | 19,111 | | | 23,784 | | | 1,462 | | | Various | | Dec. 2020 | | 40 yrs. |
| Industrial facilities in Pleasanton, KS; Savage, MN; Grove City, OH; and Mahanoy City, PA | | — | | | 7,717 | | | 21,569 | | | — | | | — | | | 7,717 | | | 21,569 | | | 29,286 | | | 1,618 | | | Various | | Dec. 2020 | | 40 yrs. |
| Specialty facilities in Fort Washington, Huntington Valley, and West Chester, PA | | — | | | — | | | 492 | | | — | | | — | | | — | | | 492 | | | 492 | | | 36 | | | 2011; 2014; 2016 | | Jan. 2021 | | 40 yrs. |
| Warehouse facilities in Grove City, OH and Anderson, SC | | — | | | 1,415 | | | 15,151 | | | — | | | — | | | 1,415 | | | 15,151 | | | 16,566 | | | 1,103 | | | 1995; 2001 | | Feb. 2021 | | 40 yrs. |
| Office and retail facilities in NJ and PA | | — | | | 17,537 | | | 25,987 | | | — | | | — | | | 17,537 | | | 25,987 | | | 43,524 | | | 1,876 | | | Various | | Feb. 2021 | | 40 yrs. |
| Land and warehouse facilities in CA | | — | | | 8,513 | | | 45,669 | | | 6 | | | — | | | 8,516 | | | 45,672 | | | 54,188 | | | 3,300 | | | Various | | Feb. 2021 | | 40 yrs. |
| Research and development facility in Wageningen, Netherlands | | — | | | 1,429 | | | 5,777 | | | 18,658 | | | 2,223 | | | 1,548 | | | 26,539 | | | 28,087 | | | 987 | | | 2022 | | Mar. 2021 | | 40 yrs. |
| Retail facilities in France | | — | | | 15,954 | | | 104,578 | | | — | | | (7,141) | | | 15,009 | | | 98,382 | | | 113,391 | | | 6,772 | | | 1968; 1981; 1983 | | Apr. 2021 | | 40 yrs. |
| Warehouse facility in Detroit, MI | | — | | | 3,625 | | | 47,743 | | | — | | | — | | | 3,625 | | | 47,743 | | | 51,368 | | | 3,201 | | | 1991 | | Apr. 2021 | | 40 yrs. |
| Warehouse facility in Solihull, United Kingdom | | — | | | 42,137 | | | 123,315 | | | — | | | (13,601) | | | 38,673 | | | 113,178 | | | 151,851 | | | 7,535 | | | 2021 | | May 2021 | | 40 yrs. |
| Specialty facility in New Rochelle, NY | | — | | | 3,617 | | | 21,590 | | | — | | | — | | | 3,617 | | | 21,590 | | | 25,207 | | | 1,436 | | | 2018 | | May 2021 | | 40 yrs. |
| Industrial facility in Groveport, OH | | — | | | — | | | 26,639 | | | 2,904 | | | — | | | — | | | 29,543 | | | 29,543 | | | 1,905 | | | 1982 | | May 2021 | | 40 yrs. |
| Industrial facility in Dakota, IL | | — | | | 1,970 | | | 50,369 | | | — | | | — | | | 1,970 | | | 50,369 | | | 52,339 | | | 3,326 | | | 1978 | | May 2021 | | 40 yrs. |
| Industrial facility in San Jose, CA | | — | | | 12,808 | | | 31,714 | | | — | | | — | | | 12,808 | | | 31,714 | | | 44,522 | | | 2,092 | | | 1984 | | May 2021 | | 40 yrs. |
| Warehouse facility in Opelika, AL | | — | | | 2,115 | | | 39,980 | | | — | | | — | | | 2,115 | | | 39,980 | | | 42,095 | | | 2,569 | | | 2005 | | Jun. 2021 | | 40 yrs. |
| Warehouse facilities in Elk Grove Village and Niles, IL; and Guelph, Canada | | — | | | 12,932 | | | 25,096 | | | — | | | — | | | 12,932 | | | 25,096 | | | 38,028 | | | 1,609 | | | 1962; 1976; 1983 | | Jun. 2021 | | 40 yrs. |
| Warehouse facility in Rome, NY | | — | | | 1,480 | | | 47,781 | | | — | | | — | | | 1,480 | | | 47,781 | | | 49,261 | | | 3,060 | | | 2021 | | Jun. 2021 | | 40 yrs. |
| Warehouse facility in Frankfort, IN | | — | | | 5,423 | | | 95,915 | | | — | | | — | | | 5,423 | | | 95,915 | | | 101,338 | | | 5,637 | | | 2015 | | Aug. 2021 | | 40 yrs. |
| Warehouse facility in Rogers, MN | | — | | | 1,871 | | | 20,959 | | | — | | | — | | | 1,871 | | | 20,959 | | | 22,830 | | | 1,212 | | | 2005 | | Sep. 2021 | | 40 yrs. |
| Industrial facilities in Chattanooga, TN | | — | | | 4,859 | | | 29,302 | | | — | | | — | | | 4,859 | | | 29,302 | | | 34,161 | | | 1,614 | | | 2006; 2017 | | Oct. 2021 | | 40 yrs. |
| Warehouse facility in Mankato, MN | | — | | | 2,979 | | | 11,619 | | | — | | | — | | | 2,979 | | | 11,619 | | | 14,598 | | | 621 | | | 1976 | | Nov. 2021 | | 40 yrs. |
| Retail facilities in Denmark | | — | | | 2,695 | | | 38,428 | | | — | | | (843) | | | 2,639 | | | 37,641 | | | 40,280 | | | 1,947 | | | Various | | Dec. 2021 | | 40 yrs. |
| Retail facilities in Poland | | — | | | 15,110 | | | 47,511 | | | — | | | (1,178) | | | 14,826 | | | 46,617 | | | 61,443 | | | 2,385 | | | Various | | Dec. 2021 | | 40 yrs. |
| | | | | |
| W. P. Carey 2023 10-K– 129 |
SCHEDULE III — REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)
December 31, 2023
(in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Initial Cost to Company | | Cost Capitalized Subsequent to Acquisition (a) | | Increase (Decrease) in Net Investments (b) | | Gross Amount at which Carried at Close of Period (c) (d) | | Accumulated Depreciation (d) | | Date of Construction | | Date Acquired | | Life on which
Depreciation in Latest
Statement of
Income
is Computed |
| | | | | | | | | | |
| | | | | | | | | | | |
| Description | | Encumbrances | | Land | | Buildings | | | | Land | | Buildings | | Total | | | | |
| Industrial facility in Cary, IL | | — | | | 4,568 | | | 31,977 | | | — | | | — | | | 4,568 | | | 31,977 | | | 36,545 | | | 1,608 | | | 1975 | | Dec. 2021 | | 40 yrs. |
| Retail facilities in the Netherlands | | — | | | 9,342 | | | 32,770 | | | — | | | (942) | | | 9,133 | | | 32,037 | | | 41,170 | | | 1,608 | | | Various | | Dec. 2021 | | 40 yrs. |
| Specialty facilities in Flemington and Pennsauken, NJ | | — | | | 1,025 | | | 397 | | | 832 | | | — | | | 1,025 | | | 1,229 | | | 2,254 | | | 49 | | | Various | | Dec. 2021 | | 40 yrs. |
| Industrial facility in Pleasant Prairie, WI | | — | | | 1,443 | | | 16,532 | | | — | | | — | | | 1,443 | | | 16,532 | | | 17,975 | | | 816 | | | 2001 | | Jan. 2022 | | 40 yrs. |
| Specialty facilities in Spain | | — | | | 26,735 | | | 99,822 | | | — | | | (2,647) | | | 26,176 | | | 97,734 | | | 123,910 | | | 4,666 | | | Various | | Feb. 2022 | | 40 yrs. |
| Retail facilities in Denmark | | — | | | 3,295 | | | 35,898 | | | — | | | (206) | | | 3,260 | | | 35,727 | | | 38,987 | | | 1,539 | | | Various | | Various | | 40 yrs. |
| Industrial facility in Laval, Canada | | — | | | 4,014 | | | 16,037 | | | — | | | (828) | | | 3,848 | | | 15,375 | | | 19,223 | | | 718 | | | 1966 | | Feb. 2022 | | 40 yrs. |
| Warehouse facility in Chattanooga, TN | | — | | | 5,063 | | | 36,645 | | | 26,128 | | | — | | | 5,063 | | | 62,773 | | | 67,836 | | | 1,677 | | | 2003 | | Mar. 2022 | | 40 yrs. |
| Industrial facility in Coatzacoalcos, Mexico | | — | | | 9,805 | | | 17,622 | | | — | | | — | | | 9,805 | | | 17,622 | | | 27,427 | | | 741 | | | 1960 | | Apr. 2022 | | 40 yrs. |
| Industrial facility in Lowbanks, CA | | — | | | 3,574 | | | 1,605 | | | — | | | — | | | 3,574 | | | 1,605 | | | 5,179 | | | 67 | | | 1967 | | Apr. 2022 | | 40 yrs. |
| Industrial facilities in Chicago, IL; Geismar, LA; and Nashville, TN | | — | | | 9,300 | | | 26,945 | | | — | | | — | | | 9,300 | | | 26,945 | | | 36,245 | | | 1,111 | | | Various | | May 2022 | | 40 yrs. |
| Industrial and warehouse facilities in the United States | | — | | | 9,847 | | | 88,227 | | | — | | | — | | | 9,847 | | | 88,227 | | | 98,074 | | | 3,596 | | | Various | | May 2022 | | 40 yrs. |
| Retail facilities in Denmark | | — | | | 2,228 | | | 31,774 | | | — | | | 1,406 | | | 2,322 | | | 33,086 | | | 35,408 | | | 1,285 | | | Various | | Various | | 40 yrs. |
| Industrial facility in Medina, OH | | — | | | 2,029 | | | 22,938 | | | — | | | — | | | 2,029 | | | 22,938 | | | 24,967 | | | 885 | | | 1963 | | Jun. 2022 | | 40 yrs. |
| Warehouse facility in Bree, Belgium | | — | | | — | | | 73,302 | | | 42 | | | 4,684 | | | — | | | 78,028 | | | 78,028 | | | 2,939 | | | 1964 | | Jun. 2022 | | 40 yrs. |
| Retail facilities in Spain | | — | | | 4,906 | | | 12,825 | | | — | | | 1,479 | | | 5,315 | | | 13,895 | | | 19,210 | | | 503 | | | Various | | Jul. 2022 | | 40 yrs. |
| Industrial and warehouse facilities in the United States | | — | | | 27,543 | | | 192,197 | | | — | | | — | | | 27,543 | | | 192,197 | | | 219,740 | | | 6,898 | | | Various | | Jul. 2022 | | 40 yrs. |
| Retail facilities in Denmark | | — | | | 2,690 | | | 33,703 | | | — | | | 2,584 | | | 2,883 | | | 36,094 | | | 38,977 | | | 1,209 | | | Various | | Various | | 40 yrs. |
| Office facility in Austin, TX | | — | | | 31,095 | | | 45,393 | | | — | | | — | | | 31,095 | | | 45,393 | | | 76,488 | | | 1,611 | | | 1993 | | Aug. 2022 | | 40 yrs. |
| Land in Chicago, IL | | 1,849 | | | 3,873 | | | — | | | — | | | — | | | 3,873 | | | — | | | 3,873 | | | — | | | N/A | | Aug. 2022 | | N/A |
| Retail facilities in Croatia | | — | | | 1,367 | | | 23,337 | | | — | | | 1,973 | | | 1,476 | | | 25,201 | | | 26,677 | | | 894 | | | 2001; 2006 | | Aug. 2022 | | 40 yrs. |
| Warehouse in Streetsboro, OH | | 2,474 | | | 2,435 | | | 9,333 | | | — | | | — | | | 2,435 | | | 9,333 | | | 11,768 | | | 331 | | | 1993 | | Aug. 2022 | | 40 yrs. |
| Warehouse in University Park, IL | | 47,216 | | | 15,377 | | | 63,299 | | | 3,290 | | | — | | | 15,377 | | | 66,589 | | | 81,966 | | | 2,246 | | | 2003 | | Aug. 2022 | | 40 yrs. |
| Industrial facilities in Surprise, AZ; Temple, GA; and Houston, TX | | 9,390 | | | 2,994 | | | 26,100 | | | — | | | — | | | 2,994 | | | 26,100 | | | 29,094 | | | 926 | | | 1998; 2007; 2011 | | Aug. 2022 | | 40 yrs. |
| Warehouse facility in Jonesville, SC | | 25,441 | | | 2,895 | | | 32,152 | | | — | | | — | | | 2,895 | | | 32,152 | | | 35,047 | | | 1,141 | | | 1997 | | Aug. 2022 | | 40 yrs. |
| Warehouse facility in Albany, GA | | 5,174 | | | 3,108 | | | 12,220 | | | — | | | — | | | 3,108 | | | 12,220 | | | 15,328 | | | 434 | | | 1977 | | Aug. 2022 | | 40 yrs. |
| Industrial facilities in Dallas/Forth Worth, TX | | 4,241 | | | 3,918 | | | 9,817 | | | — | | | — | | | 3,918 | | | 9,817 | | | 13,735 | | | 348 | | | 1990; 2008 | | Aug. 2022 | | 40 yrs. |
| Warehouse facility in Byron Center, MI | | 6,366 | | | 1,925 | | | 10,098 | | | — | | | — | | | 1,925 | | | 10,098 | | | 12,023 | | | 358 | | | 2015 | | Aug. 2022 | | 40 yrs. |
| Net-lease hotel in Albion, Mauritius | | 8,363 | | | 7,633 | | | 29,274 | | | — | | | 2,947 | | | 8,243 | | | 31,611 | | | 39,854 | | | 1,122 | | | 2007 | | Aug. 2022 | | 40 yrs. |
| Net-lease hotel in Munich, Germany | | — | | | 17,892 | | | 61,405 | | | — | | | 6,331 | | | 19,320 | | | 66,308 | | | 85,628 | | | 2,353 | | | 2016 | | Aug. 2022 | | 40 yrs. |
| Industrial facility in Plymouth, MN | | 10,189 | | | 3,693 | | | 13,242 | | | 457 | | | — | | | 3,693 | | | 13,699 | | | 17,392 | | | 490 | | | 1975 | | Aug. 2022 | | 40 yrs. |
| Net-lease hotel in Hamburg, Germany | | 16,479 | | | 7,328 | | | 17,467 | | | — | | | 1,981 | | | 7,914 | | | 18,862 | | | 26,776 | | | 669 | | | 2017 | | Aug. 2022 | | 40 yrs. |
| | | | | |
| W. P. Carey 2023 10-K– 130 |
SCHEDULE III — REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)
December 31, 2023
(in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Initial Cost to Company | | Cost Capitalized Subsequent to Acquisition (a) | | Increase (Decrease) in Net Investments (b) | | Gross Amount at which Carried at Close of Period (c) (d) | | Accumulated Depreciation (d) | | Date of Construction | | Date Acquired | | Life on which
Depreciation in Latest
Statement of
Income
is Computed |
| | | | | | | | | | |
| | | | | | | | | | | |
| Description | | Encumbrances | | Land | | Buildings | | | | Land | | Buildings | | Total | | | | |
| Retail facility in Oslo, Norway | | 52,906 | | | 27,948 | | | 64,033 | | | 930 | | | (4,841) | | | 26,483 | | | 61,587 | | | 88,070 | | | 2,234 | | | 1971 | | Aug. 2022 | | 40 yrs. |
| Industrial facility in Michalovce, Slovakia | | — | | | 4,538 | | | 19,009 | | | — | | | 1,881 | | | 4,901 | | | 20,527 | | | 25,428 | | | 728 | | | 2006 | | Aug. 2022 | | 40 yrs. |
| Net-lease hotel in Stuttgart, Germany | | — | | | — | | | 31,276 | | | — | | | 2,497 | | | — | | | 33,773 | | | 33,773 | | | 1,198 | | | 1965 | | Aug. 2022 | | 40 yrs. |
| Industrial facility in Menomonee Falls, WI | | 11,677 | | | 2,726 | | | 17,453 | | | — | | | — | | | 2,726 | | | 17,453 | | | 20,179 | | | 619 | | | 1974 | | Aug. 2022 | | 40 yrs. |
| Warehouse facility in Iowa Falls, IA | | 6,192 | | | 997 | | | 8,819 | | | — | | | — | | | 997 | | | 8,819 | | | 9,816 | | | 313 | | | 2001 | | Aug. 2022 | | 40 yrs. |
| Warehouse facility in Westlake, OH | | — | | | 1,928 | | | 24,353 | | | — | | | — | | | 1,928 | | | 24,353 | | | 26,281 | | | 861 | | | 1972 | | Aug. 2022 | | 40 yrs. |
| Industrial facility in Hebron, Ohio and warehouse facility in Strongsville, OH | | — | | | 4,671 | | | 5,494 | | | — | | | — | | | 4,671 | | | 5,494 | | | 10,165 | | | 192 | | | 1969; 1999 | | Aug. 2022 | | 40 yrs. |
| Warehouse facility in Scarborough, Canada | | — | | | 5,092 | | | 1,868 | | | — | | | — | | | 5,092 | | | 1,868 | | | 6,960 | | | 65 | | | 1980 | | Aug. 2022 | | 40 yrs. |
| Specialty facilities in West Des Moines, IA and Clifton Park, NY | | — | | | 3,229 | | | 17,080 | | | — | | | — | | | 3,229 | | | 17,080 | | | 20,309 | | | 593 | | | 1971; 2021 | | Aug. 2022 | | 40 yrs. |
| Industrial facility in Orzinuovi, Italy | | — | | | 2,473 | | | 9,892 | | | — | | | 1,289 | | | 2,731 | | | 10,923 | | | 13,654 | | | 369 | | | 1978 | | Aug. 2022 | | 40 yrs. |
| Specialty facilities in West Chester, PA | | — | | | — | | | 559 | | | — | | | — | | | — | | | 559 | | | 559 | | | 24 | | | 2022 | | Oct. 2022 | | 40 yrs. |
| Industrial facilities in the United States | | — | | | 11,117 | | | 41,107 | | | — | | | — | | | 11,117 | | | 41,107 | | | 52,224 | | | 1,059 | | | Various | | Dec. 2022 | | 40 yrs. |
| Warehouse facility in Romulus, MI | | — | | | 2,788 | | | 33,353 | | | — | | | — | | | 2,788 | | | 33,353 | | | 36,141 | | | 838 | | | 2017 | | Dec. 2022 | | 40 yrs. |
| Industrial facility in Salisbury, NC | | — | | | 1,308 | | | 13,082 | | | — | | | — | | | 1,308 | | | 13,082 | | | 14,390 | | | 329 | | | 2015 | | Dec. 2022 | | 40 yrs. |
| Industrial facilities in the United States | | — | | | 11,503 | | | 42,967 | | | — | | | — | | | 11,503 | | | 42,967 | | | 54,470 | | | 1,042 | | | Various | | Jan. 2023 | | 40 yrs. |
| Industrial facilities in Italy and Spain | | — | | | 21,167 | | | 56,172 | | | 1 | | | 1,216 | | | 21,500 | | | 57,056 | | | 78,556 | | | 1,110 | | | Various | | Mar. 2023 | | 40 yrs. |
| Industrial and warehouse facilities in Canada | | — | | | 71,228 | | | 330,400 | | | — | | | — | | | 71,228 | | | 330,400 | | | 401,628 | | | 6,223 | | | Various | | Apr. 2023 | | 40 yrs. |
| Industrial facilities in Canada, Mexico, and the United States | | — | | | 11,873 | | | 55,997 | | | — | | | — | | | 11,873 | | | 55,997 | | | 67,870 | | | 990 | | | Various | | Apr. 2023 | | 40 yrs. |
| Retail (car wash) facilities in the United States | | — | | | 9,511 | | | 32,777 | | | — | | | — | | | 9,511 | | | 32,777 | | | 42,288 | | | 468 | | | Various | | May 2023; Oct. 2023 | | 40 yrs. |
| Education and specialty facilities in the United States | | — | | | 11,973 | | | 90,101 | | | — | | | — | | | 11,973 | | | 90,101 | | | 102,074 | | | 1,234 | | | Various | | Jun. 2023 | | 40 yrs. |
| Retail (car wash) facilities in the United States | | — | | | 8,120 | | | 22,857 | | | — | | | — | | | 8,120 | | | 22,857 | | | 30,977 | | | 70 | | | 2023 | | Nov. 2023 | | 40 yrs. |
| Industrial and warehouse facilities in Italy, Germany, and Spain | | — | | | 40,752 | | | 97,622 | | | — | | | 819 | | | 40,993 | | | 98,200 | | | 139,193 | | | 222 | | | Various | | Nov. 2023 | | 40 yrs. |
| Warehouse facility in Houston, TX | | — | | | 18,999 | | | 27,199 | | | — | | | — | | | 18,999 | | | 27,199 | | | 46,198 | | | 50 | | | 2000 | | Dec. 2023 | | 40 yrs. |
| Industrial and research and development facilities in San Diego, CA | | — | | | 5,739 | | | 6,397 | | | — | | | — | | | 5,739 | | | 6,397 | | | 12,136 | | | 9 | | | 1990 | | Dec. 2023 | | 40 yrs. |
| Retail facility in Phoenix, AZ | | — | | | 1,729 | | | 9,201 | | | — | | | — | | | 1,729 | | | 9,201 | | | 10,930 | | | 6 | | | 2023 | | Dec. 2023 | | 40 yrs. |
| | $ | 361,073 | | | $ | 2,436,311 | | | $ | 9,311,273 | | | $ | 1,013,029 | | | $ | (710,717) | | | $ | 2,248,300 | | | $ | 9,801,596 | | | $ | 12,049,896 | | | $ | 1,509,730 | | | | | | | |
| | | | | |
| W. P. Carey 2023 10-K– 131 |
SCHEDULE III — REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)
December 31, 2023
(in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Initial Cost to Company | | Cost Capitalized Subsequent to Acquisition (a) | | Increase (Decrease) in Net Investments (b) | | Gross Amount at
which Carried at
Close of Period
Total | | Date of Construction | | Date Acquired |
| Description | | Encumbrances | | Land | | Buildings | | | | | |
| Direct Financing Method | | | | | | | | | | | | | | | | |
| Industrial facilities in Irving and Houston, TX | | $ | — | | | $ | — | | | $ | 27,599 | | | $ | — | | | $ | (4,295) | | | $ | 23,304 | | | 1978 | | Jan. 1998 |
| Retail facility in Freehold, NJ | | — | | | — | | | 17,067 | | | — | | | (495) | | | 16,572 | | | 2004 | | Sep. 2012 |
| Retail facilities in Germany | | — | | | 28,734 | | | 145,854 | | | 5,582 | | | (60,775) | | | 119,395 | | | Various | | Sep. 2012 |
| Warehouse facility in Brierley Hill, United Kingdom | | — | | | 2,147 | | | 12,357 | | | — | | | (1,864) | | | 12,640 | | | 1996 | | Sep. 2012 |
| Retail facilities in El Paso and Fabens, TX | | — | | | 4,777 | | | 17,823 | | | — | | | (122) | | | 22,478 | | | Various | | Jan. 2014 |
| Retail facility in Gronau, Germany | | — | | | 281 | | | 4,401 | | | — | | | (881) | | | 3,801 | | | 1989 | | Jan. 2014 |
| Industrial facility in Mount Carmel, IL | | — | | | 135 | | | 3,265 | | | — | | | (364) | | | 3,036 | | | 1896 | | Jan. 2014 |
| Retail facility in Vantaa, Finland | | — | | | 5,291 | | | 15,522 | | | — | | | (3,918) | | | 16,895 | | | 2004 | | Jan. 2014 |
| Retail facility in Linköping, Sweden | | — | | | 1,484 | | | 9,402 | | | — | | | (3,844) | | | 7,042 | | | 2004 | | Jan. 2014 |
| Industrial facility in Calgary, Canada | | — | | | — | | | 7,076 | | | — | | | (1,105) | | | 5,971 | | | 1965 | | Jan. 2014 |
| Industrial facilities in Fair Bluff, NC and Valencia, PA | | — | | | 5,780 | | | 40,860 | | | — | | | (37,179) | | | 9,461 | | | 1968; 1976 | | Jan. 2014 |
| Industrial facility in Göppingen, Germany | | — | | | 10,717 | | | 60,120 | | | — | | | (19,043) | | | 51,794 | | | 1930 | | Jan. 2014 |
| Warehouse facilities in Bristol, Leeds, Liverpool, Luton, Newport, Plymouth, and Southampton, United Kingdom | | — | | | 1,062 | | | 23,087 | | | — | | | (532) | | | 23,617 | | | Various | | Oct. 2018 |
| Warehouse facility in Gieten, Netherlands | | — | | | — | | | 15,258 | | | — | | | (523) | | | 14,735 | | | 1985 | | Oct. 2018 |
| Warehouse facility in Oxnard, CA | | — | | | — | | | 10,960 | | | — | | | (1,926) | | | 9,034 | | | 1975 | | Oct. 2018 |
| Industrial facilities in Bartow, FL; Momence, IL; Smithfield, NC; Hudson, NY; and Ardmore, OK | | — | | | 4,454 | | | 87,030 | | | — | | | 3,129 | | | 94,613 | | | Various | | Oct. 2018 |
| Industrial facility in Countryside, IL | | — | | | 563 | | | 1,457 | | | — | | | 36 | | | 2,056 | | | 1981 | | Oct. 2018 |
| Industrial facility in Clarksville, TN | | 2,705 | | | 1,680 | | | 10,180 | | | — | | | (253) | | | 11,607 | | | 1998 | | Oct. 2018 |
| Industrial facility in Bluffton, IN | | 1,592 | | | 503 | | | 3,407 | | | — | | | (57) | | | 3,853 | | | 1975 | | Oct. 2018 |
| Warehouse facility in Houston, TX | | — | | | — | | | 5,977 | | | — | | | (166) | | | 5,811 | | | 1972 | | Oct. 2018 |
| Warehouse in Chicago, IL | | 5,056 | | | — | | | 10,517 | | | — | | | 73 | | | 10,590 | | | 1942 | | Aug. 2022 |
| Less: allowance for credit losses | | | | | | | | | | (36,977) | | | (36,977) | | | | | |
| | $ | 9,353 | | | $ | 67,608 | | | $ | 529,219 | | | $ | 5,582 | | | $ | (171,081) | | | $ | 431,328 | | | | | |
| | | | | |
| W. P. Carey 2023 10-K– 132 |
SCHEDULE III — REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)
December 31, 2023
(in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Initial Cost to Company | | Cost Capitalized Subsequent to
Acquisition (a) | | Increase (Decrease) in Net
Investments (b) | | Gross Amount at which Carried at Close of Period (c) (d) | | | | | | | | Life on which
Depreciation
in Latest
Statement of
Income is
Computed |
| Description | | Encumbrances | | Land | | Buildings | | Personal Property | | | | Land | | Buildings | | Personal Property | | Total | | Accumulated Depreciation (d) | | Date of Construction | | Date Acquired | |
| Operating Real Estate – Hotels | | | | | | | | | | | | | | | | | | |
| Bloomington, MN | | $ | — | | | $ | 3,810 | | | $ | 29,126 | | | $ | 3,622 | | | $ | 6,720 | | | $ | (314) | | | $ | 3,874 | | | $ | 31,296 | | | $ | 7,794 | | | $ | 42,964 | | | $ | 15,771 | | | 2008 | | Jan. 2014 | | 34 yrs. |
| Newark, NJ | | — | | | 4,912 | | | 5,581 | | | — | | | 58 | | | — | | | 4,912 | | | 5,581 | | | 58 | | | 10,551 | | | 1,720 | | | 1989 | | Sep. 2012 | | 37 yrs. |
| Sacramento, CA | | — | | | 1,690 | | | 18,472 | | | — | | | 7 | | | — | | | 1,690 | | | 18,472 | | | 7 | | | 20,169 | | | 5,577 | | | 1990 | | Sep. 2012 | | 38 yrs. |
| San Diego, CA | | — | | | 3,899 | | | 33,729 | | | — | | | 19 | | | — | | | 3,899 | | | 33,729 | | | 19 | | | 37,647 | | | 10,369 | | | 1989 | | Sep. 2012 | | 37 yrs. |
| Irvine, CA | | — | | | 3,720 | | | 24,983 | | | — | | | 22 | | | — | | | 3,720 | | | 24,983 | | | 22 | | | 28,725 | | | 8,164 | | | 1989 | | Sep. 2012 | | 35 yrs. |
| Operating Real Estate – Student Housing Facilities | | | | | | | | | | | | | | | | |
| Austin, TX | | — | | | 12,994 | | | 60,006 | | | — | | | 68 | | | — | | | 12,994 | | | 60,033 | | | 41 | | | 73,068 | | | 2,132 | | | 2020 | | Aug. 2022 | | 40 yrs. |
| Swansea, United Kingdom | | — | | | — | | | 32,884 | | | — | | | 59,389 | | | 8,613 | | | — | | | 100,886 | | | — | | | 100,886 | | | 2,860 | | | 2022 | | Aug. 2022 | | 40 yrs. |
| Operating Real Estate – Self-Storage Facilities | | | | | | | | | | | | | | | | |
| Loves Park, IL | | — | | | 1,412 | | | 4,853 | | | — | | | 103 | | | — | | | 1,412 | | | 4,921 | | | 35 | | | 6,368 | | | 969 | | | 1997 | | Oct. 2018 | | 40 yrs. |
| Cherry Valley, IL | | — | | | 1,339 | | | 4,160 | | | — | | | 18 | | | — | | | 1,339 | | | 4,160 | | | 18 | | | 5,517 | | | 795 | | | 1988 | | Oct. 2018 | | 40 yrs. |
| Rockford, IL | | — | | | 695 | | | 3,873 | | | — | | | 125 | | | — | | | 695 | | | 3,983 | | | 15 | | | 4,693 | | | 687 | | | 1979 | | Oct. 2018 | | 40 yrs. |
| Rockford, IL | | — | | | 87 | | | 785 | | | — | | | — | | | — | | | 87 | | | 785 | | | — | | | 872 | | | 122 | | | 1979 | | Oct. 2018 | | 40 yrs. |
| Rockford, IL | | — | | | 454 | | | 4,724 | | | — | | | 14 | | | — | | | 454 | | | 4,733 | | | 5 | | | 5,192 | | | 677 | | | 1957 | | Oct. 2018 | | 40 yrs. |
| Peoria, IL | | — | | | 444 | | | 4,944 | | | — | | | 238 | | | — | | | 444 | | | 5,164 | | | 18 | | | 5,626 | | | 1,074 | | | 1990 | | Oct. 2018 | | 40 yrs. |
| East Peoria, IL | | — | | | 268 | | | 3,290 | | | — | | | 108 | | | — | | | 268 | | | 3,374 | | | 24 | | | 3,666 | | | 661 | | | 1986 | | Oct. 2018 | | 40 yrs. |
| Loves Park, IL | | — | | | 721 | | | 2,973 | | | — | | | 27 | | | — | | | 721 | | | 3,000 | | | — | | | 3,721 | | | 532 | | | 1978 | | Oct. 2018 | | 40 yrs. |
| Winder, GA | | — | | | 338 | | | 1,310 | | | — | | | 107 | | | — | | | 338 | | | 1,375 | | | 42 | | | 1,755 | | | 277 | | | 2006 | | Oct. 2018 | | 40 yrs. |
| Winder, GA | | — | | | 821 | | | 3,180 | | | — | | | 43 | | | — | | | 821 | | | 3,198 | | | 25 | | | 4,044 | | | 607 | | | 2001 | | Oct. 2018 | | 40 yrs. |
| Kissimmee, FL | | 6,212 | | | 2,147 | | | 17,164 | | | — | | | 11 | | | — | | | 2,147 | | | 17,171 | | | 4 | | | 19,322 | | | 610 | | | 2005 | | Aug. 2022 | | 40 yrs. |
| St. Petersburg, FL | | 6,656 | | | 1,505 | | | 16,229 | | | — | | | 43 | | | — | | | 1,505 | | | 16,254 | | | 18 | | | 17,777 | | | 577 | | | 2007 | | Aug. 2022 | | 40 yrs. |
| Corpus Christi, TX | | 2,525 | | | 904 | | | 10,779 | | | — | | | 163 | | | — | | | 904 | | | 10,897 | | | 45 | | | 11,846 | | | 394 | | | 1998 | | Aug. 2022 | | 40 yrs. |
| Palm Desert, CA | | 6,383 | | | 1,036 | | | 22,714 | | | — | | | — | | | — | | | 1,036 | | | 22,714 | | | — | | | 23,750 | | | 806 | | | 2006 | | Aug. 2022 | | 40 yrs. |
| Kailua-Kona, HI | | 3,493 | | | 1,425 | | | 12,267 | | | — | | | 59 | | | — | | | 1,425 | | | 12,317 | | | 9 | | | 13,751 | | | 440 | | | 1991 | | Aug. 2022 | | 40 yrs. |
| Miami, FL | | 2,811 | | | 3,680 | | | 7,215 | | | — | | | 729 | | | — | | | 3,680 | | | 7,926 | | | 18 | | | 11,624 | | | 299 | | | 1986 | | Aug. 2022 | | 40 yrs. |
| Columbia, SC | | 2,831 | | | 2,481 | | | 5,217 | | | — | | | 9 | | | — | | | 2,481 | | | 5,222 | | | 4 | | | 7,707 | | | 185 | | | 1988 | | Aug. 2022 | | 40 yrs. |
| Kailua-Kona, HI | | 3,266 | | | 2,889 | | | 16,397 | | | — | | | 207 | | | — | | | 2,889 | | | 16,542 | | | 62 | | | 19,493 | | | 591 | | | 2004 | | Aug. 2022 | | 40 yrs. |
| Pompano Beach, FL | | 2,823 | | | 1,227 | | | 10,897 | | | — | | | 465 | | | — | | | 1,227 | | | 11,316 | | | 46 | | | 12,589 | | | 392 | | | 1992 | | Aug. 2022 | | 40 yrs. |
| Jensen Beach, FL | | 5,209 | | | 1,544 | | | 15,841 | | | — | | | 177 | | | — | | | 1,544 | | | 16,001 | | | 17 | | | 17,562 | | | 569 | | | 1989 | | Aug. 2022 | | 40 yrs. |
| Dickinson, TX | | 5,996 | | | 1,952 | | | 8,826 | | | — | | | 46 | | | — | | | 1,952 | | | 8,857 | | | 15 | | | 10,824 | | | 314 | | | 2001 | | Aug. 2022 | | 40 yrs. |
| Humble, TX | | 4,694 | | | 813 | | | 6,459 | | | — | | | 36 | | | — | | | 813 | | | 6,459 | | | 36 | | | 7,308 | | | 230 | | | 2009 | | Aug. 2022 | | 40 yrs. |
| Temecula, CA | | 6,057 | | | 2,368 | | | 20,802 | | | — | | | 35 | | | — | | | 2,368 | | | 20,837 | | | — | | | 23,205 | | | 738 | | | 2006 | | Aug. 2022 | | 40 yrs. |
| | | | | |
| W. P. Carey 2023 10-K– 133 |
SCHEDULE III — REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)
December 31, 2023
(in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Initial Cost to Company | | Cost Capitalized Subsequent to
Acquisition (a) | | Increase (Decrease) in Net
Investments (b) | | Gross Amount at which Carried at Close of Period (c) (d) | | | | | | | | Life on which
Depreciation
in Latest
Statement of
Income is
Computed |
| Description | | Encumbrances | | Land | | Buildings | | Personal Property | | | | Land | | Buildings | | Personal Property | | Total | | Accumulated Depreciation (d) | | Date of Construction | | Date Acquired | |
| Cumming, GA | | 2,665 | | | 655 | | | 10,455 | | | — | | | 20 | | | — | | | 655 | | | 10,455 | | | 20 | | | 11,130 | | | 373 | | | 1994 | | Aug. 2022 | | 40 yrs. |
| Naples, FL | | 9,994 | | | 6,826 | | | 20,254 | | | — | | | 263 | | | — | | | 6,826 | | | 20,493 | | | 24 | | | 27,343 | | | 747 | | | 1974 | | Aug. 2022 | | 40 yrs. |
| Valrico, FL | | 5,603 | | | 1,423 | | | 11,316 | | | — | | | 32 | | | — | | | 1,423 | | | 11,333 | | | 15 | | | 12,771 | | | 404 | | | 2009 | | Aug. 2022 | | 40 yrs. |
| Tallahassee, FL | | 4,905 | | | 1,534 | | | 14,416 | | | — | | | 46 | | | — | | | 1,534 | | | 14,444 | | | 18 | | | 15,996 | | | 514 | | | 1999 | | Aug. 2022 | | 40 yrs. |
| Sebastian, FL | | 1,817 | | | 529 | | | 7,917 | | | — | | | 38 | | | — | | | 529 | | | 7,955 | | | — | | | 8,484 | | | 284 | | | 1986 | | Aug. 2022 | | 40 yrs. |
| Lady Lake, FL | | 3,933 | | | 928 | | | 11,881 | | | — | | | 11 | | | — | | | 928 | | | 11,881 | | | 11 | | | 12,820 | | | 422 | | | 2010 | | Aug. 2022 | | 40 yrs. |
| Panama City Beach, FL | | 2,613 | | | 736 | | | 7,581 | | | — | | | 12 | | | — | | | 736 | | | 7,590 | | | 3 | | | 8,329 | | | 270 | | | 1997 | | Aug. 2022 | | 40 yrs. |
| Hesperia, CA | | — | | | 1,416 | | | 18,691 | | | — | | | 22 | | | — | | | 1,416 | | | 18,702 | | | 11 | | | 20,129 | | | 666 | | | 2004 | | Aug. 2022 | | 40 yrs. |
| Hesperia, CA | | — | | | 639 | | | 9,412 | | | — | | | 9 | | | — | | | 639 | | | 9,421 | | | — | | | 10,060 | | | 334 | | | 2007 | | Aug. 2022 | | 40 yrs. |
| Hesperia, CA | | — | | | 699 | | | 12,896 | | | — | | | 103 | | | — | | | 699 | | | 12,995 | | | 4 | | | 13,698 | | | 464 | | | 1985 | | Aug. 2022 | | 40 yrs. |
| Highland, CA | | — | | | 1,465 | | | 11,966 | | | — | | | 13 | | | — | | | 1,465 | | | 11,966 | | | 13 | | | 13,444 | | | 426 | | | 2003 | | Aug. 2022 | | 40 yrs. |
| Lancaster, CA | | — | | | 598 | | | 12,100 | | | — | | | — | | | — | | | 598 | | | 12,100 | | | — | | | 12,698 | | | 429 | | | 1989 | | Aug. 2022 | | 40 yrs. |
| Rialto, CA | | — | | | 3,502 | | | 16,924 | | | — | | | 14 | | | — | | | 3,502 | | | 16,924 | | | 14 | | | 20,440 | | | 601 | | | 2007 | | Aug. 2022 | | 40 yrs. |
| Thousand Palms, CA | | — | | | 2,465 | | | 17,632 | | | — | | | 12 | | | — | | | 2,465 | | | 17,642 | | | 2 | | | 20,109 | | | 626 | | | 2007 | | Aug. 2022 | | 40 yrs. |
| Lilburn, GA | | 2,331 | | | 1,555 | | | 6,225 | | | — | | | 29 | | | — | | | 1,555 | | | 6,236 | | | 18 | | | 7,809 | | | 225 | | | 1998 | | Aug. 2022 | | 40 yrs. |
| Stockbridge GA | | 1,619 | | | 308 | | | 7,238 | | | — | | | 53 | | | — | | | 308 | | | 7,268 | | | 23 | | | 7,599 | | | 263 | | | 2003 | | Aug. 2022 | | 40 yrs. |
| Louisville, KY | | 6,582 | | | 3,115 | | | 13,908 | | | — | | | 147 | | | — | | | 3,115 | | | 14,026 | | | 29 | | | 17,170 | | | 522 | | | 1998 | | Aug. 2022 | | 40 yrs. |
| St. Peters, MO | | 2,309 | | | 386 | | | 5,521 | | | — | | | 108 | | | — | | | 386 | | | 5,595 | | | 34 | | | 6,015 | | | 207 | | | 1991 | | Aug. 2022 | | 40 yrs. |
| Crystal Lake, IL | | 2,622 | | | 1,325 | | | 6,056 | | | — | | | 4 | | | — | | | 1,325 | | | 6,058 | | | 2 | | | 7,385 | | | 215 | | | 1977 | | Aug. 2022 | | 40 yrs. |
| Las Vegas, NV | | 6,345 | | | 717 | | | 20,963 | | | — | | | 216 | | | — | | | 717 | | | 21,156 | | | 23 | | | 21,896 | | | 749 | | | 1996 | | Aug. 2022 | | 40 yrs. |
| Panama City Beach, FL | | 6,151 | | | 666 | | | 17,086 | | | — | | | 50 | | | — | | | 666 | | | 17,104 | | | 32 | | | 17,802 | | | 609 | | | 2008 | | Aug. 2022 | | 40 yrs. |
| Sarasota, FL | | 5,203 | | | 1,076 | | | 13,597 | | | — | | | 19 | | | — | | | 1,076 | | | 13,602 | | | 14 | | | 14,692 | | | 484 | | | 2003 | | Aug. 2022 | | 40 yrs. |
| Sarasota, FL | | 3,804 | | | 638 | | | 10,175 | | | — | | | 43 | | | — | | | 638 | | | 10,197 | | | 21 | | | 10,856 | | | 363 | | | 2001 | | Aug. 2022 | | 40 yrs. |
| Leesburg, FL | | 2,406 | | | 1,272 | | | 5,888 | | | — | | | 33 | | | — | | | 1,272 | | | 5,910 | | | 11 | | | 7,193 | | | 210 | | | 1988 | | Aug. 2022 | | 40 yrs. |
| Palm Bay, FL | | 7,154 | | | 2,814 | | | 21,425 | | | — | | | 38 | | | — | | | 2,814 | | | 21,442 | | | 21 | | | 24,277 | | | 762 | | | 2000 | | Aug. 2022 | | 40 yrs. |
| Houston, TX | | 4,617 | | | 1,878 | | | 8,719 | | | — | | | 85 | | | — | | | 1,878 | | | 8,801 | | | 3 | | | 10,682 | | | 315 | | | 1971 | | Aug. 2022 | | 40 yrs. |
| Hudson, FL | | 3,252 | | | 669 | | | 6,092 | | | — | | | 41 | | | — | | | 669 | | | 6,092 | | | 41 | | | 6,802 | | | 218 | | | 2008 | | Aug. 2022 | | 40 yrs. |
| Las Vegas, NV | | 2,341 | | | 918 | | | 12,355 | | | — | | | 101 | | | — | | | 918 | | | 12,455 | | | 1 | | | 13,374 | | | 444 | | | 1984 | | Aug. 2022 | | 40 yrs. |
| Las Vegas, NV | | 2,211 | | | 829 | | | 11,275 | | | — | | | 43 | | | — | | | 829 | | | 11,286 | | | 32 | | | 12,147 | | | 403 | | | 1987 | | Aug. 2022 | | 40 yrs. |
| Ithaca, NY | | 2,296 | | | 890 | | | 4,484 | | | — | | | 10 | | | — | | | 890 | | | 4,484 | | | 10 | | | 5,384 | | | 160 | | | 1988 | | Aug. 2022 | | 40 yrs. |
| Kissimmee, FL | | — | | | 626 | | | 13,147 | | | — | | | 15 | | | — | | | 626 | | | 13,160 | | | 2 | | | 13,788 | | | 468 | | | 2015 | | Aug. 2022 | | 40 yrs. |
| El Paso, TX | | 3,707 | | | 2,126 | | | 5,628 | | | — | | | 73 | | | — | | | 2,126 | | | 5,701 | | | — | | | 7,827 | | | 203 | | | 1983 | | Aug. 2022 | | 40 yrs. |
| El Paso, TX | | 2,544 | | | 1,053 | | | 4,583 | | | — | | | 8 | | | — | | | 1,053 | | | 4,588 | | | 3 | | | 5,644 | | | 164 | | | 1980 | | Aug. 2022 | | 40 yrs. |
| | | | | |
| W. P. Carey 2023 10-K– 134 |
SCHEDULE III — REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)
December 31, 2023
(in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Initial Cost to Company | | Cost Capitalized Subsequent to
Acquisition (a) | | Increase (Decrease) in Net
Investments (b) | | Gross Amount at which Carried at Close of Period (c) (d) | | | | | | | | Life on which
Depreciation
in Latest
Statement of
Income is
Computed |
| Description | | Encumbrances | | Land | | Buildings | | Personal Property | | | | Land | | Buildings | | Personal Property | | Total | | Accumulated Depreciation (d) | | Date of Construction | | Date Acquired | |
| El Paso, TX | | 3,615 | | | 994 | | | 7,451 | | | — | | | 108 | | | — | | | 994 | | | 7,556 | | | 3 | | | 8,553 | | | 270 | | | 1980 | | Aug. 2022 | | 40 yrs. |
| El Paso, TX | | 3,632 | | | 1,295 | | | 6,318 | | | — | | | 36 | | | — | | | 1,295 | | | 6,354 | | | — | | | 7,649 | | | 226 | | | 1986 | | Aug. 2022 | | 40 yrs. |
| El Paso, TX | | 1,429 | | | 587 | | | 3,121 | | | — | | | 14 | | | — | | | 587 | | | 3,121 | | | 14 | | | 3,722 | | | 114 | | | 1985 | | Aug. 2022 | | 40 yrs. |
| El Paso, TX | | 3,721 | | | 1,143 | | | 5,894 | | | — | | | 92 | | | — | | | 1,143 | | | 5,986 | | | — | | | 7,129 | | | 214 | | | 1980 | | Aug. 2022 | | 40 yrs. |
| Fernandina Beach, FL | | 7,275 | | | 2,664 | | | 25,000 | | | — | | | 15 | | | — | | | 2,664 | | | 25,012 | | | 3 | | | 27,679 | | | 888 | | | 1986 | | Aug. 2022 | | 40 yrs. |
| Kissimmee, FL | | 3,451 | | | 2,149 | | | 6,223 | | | — | | | 174 | | | — | | | 2,149 | | | 6,388 | | | 9 | | | 8,546 | | | 227 | | | 1981 | | Aug. 2022 | | 40 yrs. |
| Houston, TX | | 2,760 | | | 1,350 | | | 6,257 | | | — | | | 12 | | | — | | | 1,350 | | | 6,257 | | | 12 | | | 7,619 | | | 223 | | | 1998 | | Aug. 2022 | | 40 yrs. |
| Houston, TX | | 2,960 | | | 1,112 | | | 8,044 | | | — | | | 82 | | | — | | | 1,112 | | | 8,094 | | | 32 | | | 9,238 | | | 289 | | | 2001 | | Aug. 2022 | | 40 yrs. |
| Portland, OR | | 6,354 | | | 994 | | | 10,176 | | | — | | | 1 | | | — | | | 994 | | | 10,176 | | | 1 | | | 11,171 | | | 361 | | | 2000 | | Aug. 2022 | | 40 yrs. |
| Greensboro, NC | | 4,040 | | | 1,389 | | | 15,175 | | | — | | | 178 | | | — | | | 1,389 | | | 15,275 | | | 78 | | | 16,742 | | | 546 | | | 1953 | | Aug. 2022 | | 40 yrs. |
| Avondale, LA | | 3,425 | | | 1,154 | | | 9,090 | | | — | | | — | | | — | | | 1,154 | | | 9,090 | | | — | | | 10,244 | | | 323 | | | 2008 | | Aug. 2022 | | 40 yrs. |
| Washington, D.C. | | — | | | 3,371 | | | 13,655 | | | — | | | — | | | — | | | 3,371 | | | 13,655 | | | — | | | 17,026 | | | 484 | | | 1962 | | Aug. 2022 | | 40 yrs. |
| Kissimmee, FL | | — | | | 1,770 | | | 7,034 | | | — | | | 36 | | | — | | | 1,770 | | | 7,052 | | | 18 | | | 8,840 | | | 252 | | | 2000 | | Aug. 2022 | | 40 yrs. |
| Milford, MA | | — | | | 951 | | | 11,935 | | | — | | | 9 | | | — | | | 951 | | | 11,935 | | | 9 | | | 12,895 | | | 424 | | | 2003 | | Aug. 2022 | | 40 yrs. |
| Millsboro, DE | | — | | | 1,180 | | | 14,286 | | | — | | | — | | | — | | | 1,180 | | | 14,286 | | | — | | | 15,466 | | | 507 | | | 2001 | | Aug. 2022 | | 40 yrs. |
| New Castle, DE | | — | | | 1,110 | | | 15,787 | | | — | | | — | | | — | | | 1,110 | | | 15,787 | | | — | | | 16,897 | | | 560 | | | 2005 | | Aug. 2022 | | 40 yrs. |
| Rehoboth, DE | | 8,079 | | | 1,565 | | | 18,284 | | | — | | | 13 | | | — | | | 1,565 | | | 18,284 | | | 13 | | | 19,862 | | | 650 | | | 1999 | | Aug. 2022 | | 40 yrs. |
| Chicago, IL | | — | | | 787 | | | 4,931 | | | — | | | 112 | | | — | | | 787 | | | 5,013 | | | 30 | | | 5,830 | | | 186 | | | 1990 | | Aug. 2022 | | 40 yrs. |
| Gilroy, CA | | — | | | 3,058 | | | 13,014 | | | — | | | 42 | | | — | | | 3,058 | | | 13,029 | | | 27 | | | 16,114 | | | 465 | | | 1999 | | Aug. 2022 | | 40 yrs. |
| Little Rock, AR | | — | | | 1,703 | | | 4,358 | | | — | | | — | | | — | | | 1,703 | | | 4,358 | | | — | | | 6,061 | | | 58 | | | 1996 | | Jun. 2023 | | 40 yrs. |
| Houston, TX | | — | | | 3,701 | | | 8,945 | | | — | | | 14 | | | — | | | 3,701 | | | 8,945 | | | 14 | | | 12,660 | | | 80 | | | 2006 | | Aug. 2023 | | 40 yrs. |
| Knoxville, TN | | — | | | 3,783 | | | 5,913 | | | — | | | — | | | — | | | 3,783 | | | 5,913 | | | — | | | 9,696 | | | 10 | | | 2008 | | Dec. 2023 | | 40 yrs. |
| Springfield, TN | | — | | | 1,587 | | | 3,651 | | | — | | | — | | | — | | | 1,587 | | | 3,651 | | | — | | | 5,238 | | | 6 | | | 1989 | | Dec. 2023 | | 40 yrs. |
| Bastrop, TX | | — | | | 2,772 | | | 9,055 | | | — | | | — | | | — | | | 2,772 | | | 9,055 | | | — | | | 11,827 | | | 11 | | | 2020 | | Dec. 2023 | | 40 yrs. |
| | $ | 208,721 | | | $ | 150,020 | | | $ | 1,021,083 | | | $ | 3,622 | | | $ | 71,695 | | | $ | 8,299 | | | $ | 150,084 | | | $ | 1,095,520 | | | $ | 9,115 | | | $ | 1,254,719 | | | $ | 80,057 | | | | | | | |
__________(a)Consists of the cost of improvements subsequent to acquisition and acquisition costs, including construction costs on build-to-suit transactions, legal fees, appraisal fees, title costs, and other related professional fees. For business combinations, transaction costs are excluded.
(b)The increase (decrease) in net investment was primarily due to (i) sales of properties, (ii) impairment charges, (iii) changes in foreign currency exchange rates, (iv) allowances for credit loss (Note 57), (v) reclassifications from net investments in direct financing leases to real estate subject to operating leases, and (vi) the amortization of unearned income from net investments in direct financing leases, which produces a periodic rate of return that at times may be greater or less than lease payments received. | | | | | |
| W. P. Carey 2023 10-K– 135 |
(c)Excludes (i) gross lease intangible assets of $3.1$2.9 billion and the related accumulated amortization of $1.4 billion, (ii) gross lease intangible liabilities of $289.2$203.4 million and the related accumulated amortization of $105.9$66.5 million, (iii) net investments in sales-type leases of $835.7 million, (iv) sale-leasebacks classified as loans receivable of $217.2$236.6 million, (iv)(v) secured loans receivable of $24.1$11.3 million (as disclosed in Schedule IV – Mortgage Loans on Real Estate), (v)(vi) assets held for sale, net of $8.3$37.1 million, and (vi)(vii) real estate under construction of $114.5$47.1 million. (d)A reconciliation of real estate and accumulated depreciation follows:
| | | | | |
| W. P. Carey 20212023 10-K – 128136 |
W. P. CAREY INC.
NOTES TO SCHEDULE III — REAL ESTATE AND ACCUMULATED DEPRECIATION
(in thousands)
| | Reconciliation of Land, Buildings and Improvements Subject to Operating Leases |
| Years Ended December 31, |
| 2021 | | 2020 | | 2019 |
| Reconciliation of Real Estate Subject to Operating Leases | | | Reconciliation of Real Estate Subject to Operating Leases |
| Years Ended December 31, | | | Years Ended December 31, |
| 2023 | | | 2023 | | 2022 | | 2021 |
| Beginning balance | Beginning balance | $ | 10,736,752 | | | $ | 9,703,504 | | | $ | 8,717,612 | |
| Derecognition through the Spin-Off | |
| Acquisitions | Acquisitions | 1,144,757 | | | 555,032 | | | 610,381 | |
| Reclassification to sales-type lease | |
| Dispositions | |
| Reclassification to operating properties | |
| Foreign currency translation adjustment | Foreign currency translation adjustment | (267,018) | | | 290,559 | | | (37,032) | |
| Capital improvements | |
| Reclassification to assets held for sale | |
| Reclassification from real estate under construction | Reclassification from real estate under construction | 86,179 | | | 176,211 | | | 122,519 | |
| Dispositions | (80,129) | | | (167,671) | | | (90,488) | |
| Reclassification from direct financing leases | Reclassification from direct financing leases | 76,929 | | | 183,789 | | | 76,934 | |
| Impairment charges | Impairment charges | (24,246) | | | (26,343) | | | (1,345) | |
| Capital improvements | 14,589 | | | 35,722 | | | 18,860 | |
| Reclassification to assets held for sale | (10,628) | | | (14,051) | | | — | |
| Reclassification from operating properties | — | | | — | | | 291,750 | |
| CPA:17 Merger measurement period adjustments | — | | | — | | | (5,687) | |
| Acquisitions through CPA:18 Merger | |
| Ending balance | Ending balance | $ | 11,677,185 | | | $ | 10,736,752 | | | $ | 9,703,504 | |
| | | | | | | | | | | | | | | | | |
| Reconciliation of Accumulated Depreciation for
Land, Buildings and Improvements Subject to Operating Leases |
| Years Ended December 31, |
| 2021 | | 2020 | | 2019 |
| Beginning balance | $ | 1,206,912 | | | $ | 950,452 | | | $ | 724,550 | |
| Depreciation expense | 286,347 | | | 259,337 | | | 232,927 | |
| Foreign currency translation adjustment | (25,298) | | | 24,764 | | | (916) | |
| Dispositions | (17,582) | | | (24,786) | | | (6,109) | |
| Reclassification to assets held for sale | (2,359) | | | (2,855) | | | — | |
| Ending balance | $ | 1,448,020 | | | $ | 1,206,912 | | | $ | 950,452 | |
| | Reconciliation of Land, Buildings and Improvements Attributable to Operating Properties |
| Years Ended December 31, |
| 2021 | | 2020 | | 2019 |
| Reconciliation of Accumulated Depreciation for
Real Estate Subject to Operating Leases | | | Reconciliation of Accumulated Depreciation for
Real Estate Subject to Operating Leases |
| Years Ended December 31, | | | Years Ended December 31, |
| 2023 | | | 2023 | | 2022 | | 2021 |
| Beginning balance | Beginning balance | $ | 83,476 | | | $ | 83,083 | | | $ | 466,050 | |
| Capital improvements | 197 | | | 393 | | | 1,853 | |
| Reclassification to operating leases | — | | | — | | | (291,750) | |
| Depreciation expense | |
| Derecognition through the Spin-Off | |
| Reclassification to sales-type lease | |
| Dispositions | |
| Reclassification to operating real estate | |
| Reclassification to assets held for sale | Reclassification to assets held for sale | — | | | — | | | (94,078) | |
| Reclassification from real estate under construction | — | | | — | | | 1,008 | |
| Foreign currency translation adjustment | |
| Ending balance | Ending balance | $ | 83,673 | | | $ | 83,476 | | | $ | 83,083 | |
| | | | | | | | | | | | | | | | | |
| Reconciliation of Accumulated Depreciation for
Land, Buildings and Improvements
Attributable to Operating Properties |
| Years Ended December 31, |
| 2021 | | 2020 | | 2019 |
| Beginning balance | $ | 14,004 | | | $ | 11,241 | | | $ | 10,234 | |
| Depreciation expense | 2,746 | | | 2,763 | | | 2,553 | |
| Reclassification to assets held for sale | — | | | — | | | (1,546) | |
| Ending balance | $ | 16,750 | | | $ | 14,004 | | | $ | 11,241 | |
| | | | | | | | | | | | | | | | | |
| Reconciliation of Operating Real Estate |
| Years Ended December 31, |
| 2023 | | 2022 | | 2021 |
| Beginning balance | $ | 1,077,326 | | | $ | 83,673 | | | $ | 83,476 | |
| Reclassification from operating leases | 221,028 | | | — | | | — | |
| Dispositions | (124,237) | | | — | | | — | |
| Acquisitions | 45,469 | | | — | | | — | |
| Reclassification from real estate under construction | 25,452 | | | 66,820 | | | — | |
| Foreign currency translation adjustment | 5,088 | | | 3,526 | | | — | |
| Capital improvements | 4,593 | | | 1,146 | | | 197 | |
| Acquisitions through CPA:18 Merger | — | | | 922,161 | | | — | |
| Ending balance | $ | 1,254,719 | | | $ | 1,077,326 | | | $ | 83,673 | |
| | | | | |
| W. P. Carey 2023 10-K– 137 |
| | | | | | | | | | | | | | | | | |
| Reconciliation of Accumulated Depreciation for
Operating Real Estate |
| Years Ended December 31, |
| 2023 | | 2022 | | 2021 |
| Beginning balance | $ | 28,295 | | | $ | 16,750 | | | $ | 14,004 | |
| Reclassification from operating leases | 56,434 | | | — | | | — | |
| Dispositions | (34,580) | | | — | | | — | |
| Depreciation expense | 29,840 | | | 11,541 | | | 2,746 | |
| Foreign currency translation adjustment | 68 | | | 4 | | | — | |
| Ending balance | $ | 80,057 | | | $ | 28,295 | | | $ | 16,750 | |
At December 31, 2021,2023, the aggregate cost of real estate that we and our consolidated subsidiaries own for federal income tax purposes was approximately $13.9$15.9 billion.
| | | | | |
| W. P. Carey 20212023 10-K – 129138 |
W. P. CAREY INC.
SCHEDULE IV — MORTGAGE LOANS ON REAL ESTATE
December 31, 20212023
(dollars in thousands)
| | Interest Rate | | Final Maturity Date | | Carrying Amount |
| | Interest Rate | | | | Interest Rate | | Final Maturity Date | | Carrying Amount |
| Description | Description | | Interest Rate | | Final Maturity Date | | Carrying Amount |
| Financing agreement — retail facility | |
| Financing agreement — observation wheel | Financing agreement — observation wheel | | 7.5 | % | | Mar. 2022 | | 11,250 | |
| $ | 24,143 | |
| Financing agreement — observation wheel | |
| Financing agreement — observation wheel | |
| | | | | | $ | |
| | Reconciliation of Mortgage Loans on Real Estate | | | Reconciliation of Mortgage Loans on Real Estate |
| | Reconciliation of Mortgage Loans on Real Estate | | Years Ended December 31, |
| | Years Ended December 31, |
| 2021 | | 2020 | | 2019 |
| 2023 | | | 2023 | | 2022 | | 2021 |
| Beginning balance | Beginning balance | $ | 24,143 | | | $ | 47,737 | | | $ | 57,737 | |
Allowance for credit losses (Note 5) | — | | | (12,594) | | | — | |
| Repayments | Repayments | — | | | (11,000) | | | (10,000) | |
Acquisition through CPA:18 Merger (Note 7) | |
| Gain on repayment of secured loan receivable | |
Change in allowance for credit losses (Note 7) | |
| Ending balance | Ending balance | $ | 24,143 | | | $ | 24,143 | | | $ | 47,737 | |
| | | | | |
| W. P. Carey 20212023 10-K – 130139 |
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.
None.
Item 9A. Controls and Procedures.
Disclosure Controls and Procedures
Our disclosure controls and procedures include internal controls and other procedures designed to provide reasonable assurance that information required to be disclosed in this and other reports filed under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized, and reported within the required time periods specified in the SEC’s rules and forms; and that such information is accumulated and communicated to management, including our chief executive officer and chief financial officer, to allow timely decisions regarding required disclosures. It should be noted that no system of controls can provide complete assurance of achieving a company’s objectives and that future events may impact the effectiveness of a system of controls.
Our chief executive officer and chief financial officer, after conducting an evaluation, together with members of our management, of the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2021,2023, have concluded that our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) were effective as of December 31, 20212023 at a reasonable level of assurance.
Management’s Report on Internal Control Over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.
Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may deteriorate.
We assessed the effectiveness of our internal control over financial reporting at December 31, 2021.2023. In making this assessment, we used criteria set forth in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our assessment, we concluded that, at December 31, 2021,2023, our internal control over financial reporting is effective based on those criteria.
The effectiveness of our internal control over financial reporting as of December 31, 20212023 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, and in connection therewith, PricewaterhouseCoopers LLP has issued an attestation report on the Company’s effectiveness of internal controls over financial reporting as of December 31, 2021,2023, as stated in their report in Item 8.
Changes in Internal Control Over Financial Reporting
There have been no changes in our internal control over financial reporting during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.
| | | | | |
| W. P. Carey 2023 10-K– 140 |
Item 9B. Other Information.
None.During the three months ended December 31, 2023, no director or officer of the Company, nor the Company itself, adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.
| | | | | |
| W. P. Carey 2021 10-K– 131
|
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
Not applicable.
| | | | | |
| W. P. Carey 20212023 10-K – 132141 |
PART III
Item 10. Directors, Executive Officers and Corporate Governance.
This information will be contained in our definitive proxy statement for the 20222024 Annual Meeting of Stockholders, to be filed within 120 days following the end of our fiscal year, and is incorporated herein by reference.
Item 11. Executive Compensation.
This information will be contained in our definitive proxy statement for the 20222024 Annual Meeting of Stockholders, to be filed within 120 days following the end of our fiscal year, and is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
This information will be contained in our definitive proxy statement for the 20222024 Annual Meeting of Stockholders, to be filed within 120 days following the end of our fiscal year, and is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions, and Director Independence.
This information will be contained in our definitive proxy statement for the 20222024 Annual Meeting of Stockholders, to be filed within 120 days following the end of our fiscal year, and is incorporated herein by reference.
Item 14. Principal Accounting Fees and Services.
This information will be contained in our definitive proxy statement for the 20222024 Annual Meeting of Stockholders, to be filed within 120 days following the end of our fiscal year, and is incorporated herein by reference.
| | | | | |
| W. P. Carey 20212023 10-K – 133142 |
PART IV
Item 15. Exhibits and Financial Statement Schedules.
(1) and (2) — Financial statements and schedules: see index to financial statements and schedules included in Item 8.
(3) Exhibits:
The following exhibits are filed with this Report. Documents other than those designated as being filed herewith are incorporated herein by reference.
| | | | | | | | | | | | | | |
Exhibit
No. | | Description | | Method of Filing |
| 3.1 | | | Articles of Amendment and Restatement of W. P. Carey Inc. dated June 15, 2017 | | |
| 3.2 | | | Fifth Amended and Restated Bylaws of W. P. Carey Inc. dated June 15, 2017 | | |
| 4.1 | | | Form of Common Stock Certificate | | |
| 4.2 | | | Indenture, dated as of March 14, 2014, by and between W. P. Carey Inc., as issuer and U.S. Bank National Association, as trustee | | |
| 4.3 | | | First Supplemental Indenture, dated as of March 14, 2014, by and between W. P. Carey Inc., as issuer, and U.S. Bank National Association, as trustee | | |
| 4.4 | | | Form of Global Note Representing $500,000,000 Aggregate Principal Amount of 4.60% Senior Notes due 2024 | | |
| 4.5 | | | Third Supplemental Indenture, dated January 26, 2015, by and between W. P. Carey Inc., as issuer, and U.S. Bank National Association, as trustee | | |
| 4.6 | | | Form of Note representing $450 Million Aggregate Principal Amount of 4.000% Senior Notes due 2025 | | |
| 4.7 | | | Fourth Supplemental Indenture, dated as of September 12, 2016, by and between W. P. Carey Inc., as issuer, and U.S. Bank National Association, as trustee | | |
| 4.8 | | | Form of Note representing $350 Million Aggregate Principal Amount of 4.250% Senior Notes due 2026 | | |
| 4.9 | | | Indenture, dated as of November 8, 2016, by and among WPC Eurobond B.V., as issuer, W. P. Carey Inc., as guarantor, and U.S. Bank National Association, as trustee | | |
| 4.10 | | | First Supplemental Indenture, dated as of January 19, 2017, by and among WPC Eurobond B.V., as issuer, W. P. Carey Inc., as guarantor, and U.S. Bank National Association, as trustee.trustee | | |
| | | | | |
| W. P. Carey 20212023 10-K – 134143 |
| | | | | | | | | | | | | | |
Exhibit
No. | | Description | | Method of Filing |
| 4.11 | | | Form of Note representing €500 Million Aggregate Principal Amount of 2.250% Senior Notes due 2024 | | |
| 4.12 | | | Second Supplemental Indenture dated as of March 6, 2018, by and among WPC Eurobond B.V., as issuer, W. P. Carey Inc., as guarantor, and U.S. Bank National Association, as trustee | | |
| 4.13 | | | Form of Note representing €500 Million Aggregate Principal Amount of 2.125% Senior Notes due 2027 | | |
| 4.14 | | | Third Supplemental Indenture dated as of October 9, 2018, by and among WPC Eurobond B.V., as issuer, W. P. Carey Inc., as guarantor, and U.S. Bank National Association, as trustee | | |
| 4.15 | | | Form of Note representing €500 Million Aggregate Principal Amount of 2.250% Senior Notes due 2026 | | |
| 4.16 | | | Fifth Supplemental Indenture, dated June 14, 2019, by and between W. P. Carey Inc., as issuer, and U.S. Bank National Association, as trustee | | |
| 4.17 | | | Form of Note representing $325 Million Aggregate Principal Amount of 3.850% Senior Notes due 2029 | | |
| 4.18 | | | Fourth Supplemental Indenture, dated as of September 19, 2019, by and among WPC Eurobond B.V., as issuer, W. P. Carey Inc., as guarantor, and U.S. Bank National Association, as trustee | | |
| 4.19 | | | Form of Note representing €500 Million Aggregate Principal Amount of 1.350% Senior Notes due 2028 | | |
| 4.20 | | | Description of Securities Registered under Section 12 of the Exchange Act | | |
| 4.21 | | | Sixth Supplemental Indenture, dated October 14, 2020, by and between W. P. Carey Inc., as issuer, and U.S. Bank National Association, as trustee | | |
| 4.22 | | | Form of Note representing $500 Million Aggregate Principal Amount of 2.400% Senior Notes due 2031 | | |
| 4.23 | | | Seventh Supplemental Indenture, dated February 25, 2021, by and between W. P. Carey Inc., as issuer, and U.S. Bank National Association, as trustee | | |
| 4.24 | | | Form of Note representing $425 Million Aggregate Principal Amount of 2.250% Senior Notes Due 2033 | | |
| 4.25 | | | Fifth Supplemental Indenture dated as of March 8, 2021, by and among WPC Eurobond B.V., as issuer, W. P. Carey Inc., as guarantor, and U.S. Bank National Association, as trustee | | |
| | | | | |
| W. P. Carey 20212023 10-K – 135144 |
| | | | | | | | | | | | | | |
Exhibit
No. | | Description | | Method of Filing |
| 4.26 | | | Form of Note representing €525 Million Aggregate Principal Amount of 0.950% Senior Notes Due 2030 | | |
| 4.27 | | | Eighth Supplemental Indenture, dated October 15, 2021, by and between W. P. Carey Inc., as issuer, and U.S. Bank National Association, as trustee | | |
| 4.28 | | | Form of Note representing $350 Million Aggregate Principal Amount of 2.450% Senior Notes due 2032 | | |
10.14.29 | | | Form of Note Representing €150,000,000 Aggregate Principal Amount of 3.41% Senior Notes due 2029 | | |
| 4.30 | | | Form of Note Representing €200,000,000 Aggregate Principal Amount of 3.70% Senior Notes due 2032 | | |
| 10.1† | | W. P. Carey Inc. 1997 Share Incentive Plan, as amended * | | |
10.2 | 10.2† | | W. P. Carey Inc. (formerly W. P. Carey & Co. LLC) Long-Term Incentive Program as amended and restated effective as of September 28, 2012 * | | |
10.3 | 10.3† | | W. P. Carey Inc. Amended and Restated Deferred Compensation Plan for Employees * | | |
10.4 | 10.4† | | Amended and Restated W. P. Carey Inc. 2009 Share Incentive Plan * | | |
10.5 | 10.5† | | 2017 Annual Incentive Compensation Plan | | |
10.6 | 10.6† | | 2017 Share Incentive Plan | | |
10.7 | 10.7† | | Form of Share Option Agreement under the 2017 Share Incentive Plan | | |
10.8 | 10.8† | | Form of Restricted Share Agreement under the 2017 Share Incentive Plan | | |
10.9 10.9† | | | Form of Restricted Share Unit Agreement under the 2017 Share Incentive Plan | | |
10.10 10.10† | | | Form of Long-Term Performance Share Unit Award Agreement pursuant to the W. P. Carey Inc. 2017 Share Incentive Plan | | |
10.11 10.11† | | | Form of Non-Employee Director Restricted Share Agreement under the 2017 Share Incentive Plan | | |
| | | | | |
| W. P. Carey 2023 10-K– 145 |
| | | | | |
| W. P. Carey 2021 10-K– 136November 20, 2023
|
| | | | | | | | | | | | | | |
Exhibit
No.10.14* | | Description | | Method of Filing |
10.14 | | | First Amendment to Amended and Restated AdvisoryLoan Agreement, dated as of January 30, 2018,September 20, 2023, by and among Corporate Property Associates 18 – Global Incorporated, CPA: 18 Limited PartnershipJPMorgan Chase Bank, N.A. and Carey Asset Management Corp.the borrowers named therein | | Incorporated by reference to Exhibit 10.21 to Annual Report on Form 10-K for the year ended December 31, 2017 filed February 23, 2018 |
10.15
| | | Second Amendment to Amended and Restated Advisory Agreement, dated as of May 11, 2020, among Corporate Property Associates 18 – Global Incorporated, CPA: 18 Limited Partnership and Carey Asset Management Corp. | | Incorporated by reference to Exhibit 10.1 to Quarterlythe Current Report on Form 10-Q for the quarter ended March 31, 20208-K filed May 13, 2020September 21, 2023 |
10.16 10.15* | | | Amended and Restated Asset ManagementMezzanine Loan Agreement, dated as of May 13, 2015, bySeptember 20, 2023, between NLO Mezzanine Borrower and among, Corporate Property Associates 18 – Global Incorporated, CPA:18 Limited Partnership and W. P. Carey & Co. B.V.JPMorgan Chase Bank, N.A. | | |
10.17 10.16* | | | FourthFifth Amended and Restated Credit Agreement, dated as of February 20, 2020,December 14, 2023, among W. P. Carey Inc. and Certain of its, each Designated Borrower from time to time party thereto, certain Subsidiaries identified therein, as Guarantors, the lenders party thereto and JPMorgan Chase Bank, of America, N.A., as Administrative Agent Bank of America, N.A., JPMorgan Chase Bank, N.A. and Wells Fargo Bank, N.A., as L/C Issuers, Bank of America, N.A., as Swing Line Lender, and the Lenders party thereto | | |
10.1810.17 | | | First Amendment (LIBOR Transition), dated as of December 1, 2021, to the Fourth Amended and Restated Credit Agreement, among W. P. Carey Inc. and Bank of America, N.A., as administrative agent | | Filed herewith |
10.19 | | | Agency Agreement dated as of January 19, 2017, by and among WPC Eurobond B.V., as issuer, W. P. Carey Inc., as guarantor, Elavon Financial Services DAC, UK Branch, as paying agent and U.S. Bank National Association, as transfer agent, registrar and trustee | | |
10.2010.18 | | | Agency Agreement dated as of March 6, 2018, by and among WPC Eurobond B.V., as issuer, W. P. Carey Inc., as guarantor, Elavon Financial Services DAC, UK Branch, as paying agent and U.S. Bank National Association, as transfer agent, registrar and trustee | | |
10.2110.19 | | | Agency Agreement dated as of October 9, 2018, by and among WPC Eurobond B.V., as issuer, W. P. Carey Inc., as guarantor, Elavon Financial Services DAC, UK Branch, as paying agent and U.S. Bank National Association, as transfer agent, registrar and trustee | | |
10.2210.20 | | | Equity Sales Agreement, dated August 9, 2019, by and among W. P. Carey Inc. and each of Barclays Capital Inc., BMO Capital Markets Corp., BNY Mellon Capital Markets, LLC, BofA Securities, Inc., BTIG, LLC, Capital One Securities, Inc., Fifth Third Securities, Inc., Jefferies LLC, J.P. Morgan Securities LLC, Regions Securities LLC, Scotia Capital (USA) Inc., Stifel, Nicolaus & Company, Incorporated and Wells Fargo Securities, LLC, as agents, and each of Barclays Bank PLC, Bank of Montreal, The Bank of New York Mellon, Bank of America, N.A., Jefferies LLC, JPMorgan Chase Bank, National Association, The Bank of Nova Scotia and Wells Fargo Bank, National Association, as forward purchasers | | Incorporated by reference to Exhibit 1.1 to Current Report on Form 8-K filed August 12, 2019 |
| | | | | |
| W. P. Carey 2021 10-K– 137
|
| | | | | | | | | | | | | | |
Exhibit
No. | | Description | | Method of Filing |
10.23 | | | Agency Agreement dated as of March 8, 2021, by and among WPC Eurobond B.V., as issuer, W. P. Carey Inc., as guarantor, Elavon Financial Services DAC, as paying agent and U.S. Bank National Association, as transfer agent, registrar and trustee | | |
10.2410.21 | | | Forward Confirmation,Equity Sales Agreement, dated August 9, 2021,May 2, 2022, by and among W. P. Carey Inc. and each of Barclays Capital Inc., BMO Capital Markets Corp., BNY Mellon Capital Markets, LLC, BofA Securities, Inc., BTIG, LLC, Capital One Securities, Inc., Fifth Third Securities, Inc., Jefferies LLC, JMP Securities LLC, J.P. Morgan Securities LLC, RBC Capital Markets, LLC, Regions Securities LLC, Scotia Capital (USA) Inc., and Wells Fargo Securities, LLC, as agents, and each of Barclays Bank PLC, Bank of Montreal, The Bank of New York Mellon, Bank of America, N.A., Jefferies LLC, JPMorgan Chase Bank, National Association, Regions Securities LLC, Royal Bank of Canada, The Bank of Nova Scotia and Wells Fargo Bank, National Association, as forward purchasers | | |
| 10.22 | | | Form of Forward Confirmation | | |
| | | | | |
| W. P. Carey 2023 10-K– 146 |
| | | | | | | | | | | | | | |
Exhibit
No. | | Description | | Method of Filing |
10.2510.23 | | | Forward Confirmation,Note Purchase Agreement, dated August 9, 2021,31, 2022, by and among W. P. Carey Inc. and Barclays Bank PLCthe purchasers listed in the purchaser schedule thereto | | |
10.26 10.24* | | | Forward Confirmation,Separation and Distribution Agreement, dated August 11, 2021, by and amongOctober 31, 2023, between W. P. Carey Inc. and J.P. Morgan Chase Bank, National AssociationNet Lease Office Properties | | |
10.27 10.25* | | | Forward Confirmation,Tax Matters Agreement, dated August 11, 2021, by and amongOctober 31, 2023, between W. P. Carey Inc. and Barclays Bank PLCNet Lease Office Properties | | |
| 10.26* | | Advisory Agreement, dated November 1, 2023, between W. P. Carey & Co. B.V. and Net Lease Office Properties | | |
| 10.27* | | Advisory Agreement, dated November 1, 2023, between W. P. Carey Management LLC and Net Lease Office Properties | | |
| 18.1 | | | Preferability letter of Independent Registered Public Accounting Firm | | |
| 21.1 | | | List of Registrant Subsidiaries | | |
| 23.1 | | | Consent of PricewaterhouseCoopers LLP | | |
| 31.1 | | | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | | |
| 31.2 | | | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | | |
| 32 | | | Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | | |
| 97.1 | | | Clawback Policy | | |
| 99.1 | | | Director and Officer Indemnification Policy | | |
| 101.INS | | XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL Document. | | Filed herewith |
| 101.SCH | | XBRL Taxonomy Extension Schema Document | | Filed herewith |
| 101.CAL | | XBRL Taxonomy Extension Calculation Linkbase Document | | Filed herewith |
101.DEF | | XBRL Taxonomy Extension Definition Linkbase Document | | Filed herewith |
| | | | | |
| W. P. Carey 20212023 10-K – 138147 |
| | | | | | | | | | | | | | |
Exhibit
No. | | Description | | Method of Filing |
| 101.DEF | | XBRL Taxonomy Extension Definition Linkbase Document | | Filed herewith |
| 101.LAB | | XBRL Taxonomy Extension Label Linkbase Document | | Filed herewith |
| 101.PRE | | XBRL Taxonomy Extension Presentation Linkbase Document | | Filed herewith |
| 104 | | | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) | | Filed herewith |
______________________
*† The referenced exhibit is a management contract or compensation plan or arrangement required to be filed as an exhibit pursuant to Item 15 (a)(3) of Form 10-K.
* Certain exhibits and schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company hereby undertakes to furnish supplemental copies of any of the omitted exhibits and schedules upon request by the SEC; provided, however, that the Company may request confidential treatment pursuant to Rule 24b-2 of the Exchange Act for any exhibits or schedules so furnished.
| | | | | |
| W. P. Carey 20212023 10-K – 139148 |
Item 16. Form 10-K Summary.
None.
| | | | | |
| W. P. Carey 20212023 10-K – 140149 |
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
| | | | | | | | | | | |
| | | W. P. Carey Inc. |
| | | |
| Date: | February 11, 20229, 2024 | By: | /s/ ToniAnn Sanzone |
| | | ToniAnn Sanzone |
| | | Chief Financial Officer |
Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| | | | | | | | | | | | | | |
| Signature | | Title | | Date |
| | | | |
| /s/ Jason E. Fox | | Director and Chief Executive Officer and Director | | February 11, 20229, 2024 |
| Jason E. Fox | | (Principal Executive Officer) | | |
| | | | |
| /s/ ToniAnn Sanzone | | Chief Financial Officer | | February 11, 20229, 2024 |
| ToniAnn Sanzone | | (Principal Financial Officer) | | |
| | | | |
/s/ Arjun MahalingamBrian Zander | | Chief Accounting Officer | | February 11, 20229, 2024 |
Arjun MahalingamBrian Zander | | (Principal Accounting Officer) | | |
| | | | |
| /s/ Christopher J. Niehaus | | ChairmanChair of the Board and Director | | February 11, 20229, 2024 |
| Christopher J. Niehaus | | | | |
| | | | |
| /s/ Mark A. Alexander | | Director | | February 11, 20229, 2024 |
| Mark A. Alexander | | | | |
| | | | |
| /s/ Constantin H. Beier | | Director | | February 9, 2024 |
| Constantin H. Beier | | | | |
| | | | |
| /s/ Tonit M. Calaway | | Director | | February 11, 20229, 2024 |
| Tonit M. Calaway | | | | |
| | | | |
| /s/ Peter J. Farrell | | Director | | February 11, 20229, 2024 |
| Peter J. Farrell | | | | |
| | | | |
| /s/ Robert J. Flanagan | | Director | | February 11, 20229, 2024 |
| Robert J. Flanagan | | | | |
| | | | |
/s/ Axel K. A. Hansing | | Director | | February 11, 2022 |
Axel K. A. Hansing | | | | |
| | | | |
/s/ Jean Hoysradt | | Director | | February 11, 2022 |
Jean Hoysradt | | | | |
| | | | |
| /s/ Margaret G. Lewis | | Director | | February 11, 20229, 2024 |
| Margaret G. Lewis | | | | |
| | | | |
/s/ NicolaasElisabeth T. Stheeman | | Director | | February 9, 2024 |
| Elisabeth T. Stheeman | | | | |
| | | | |
| /s/ Nick J. M. van Ommen | | Director | | February 11, 20229, 2024 |
NicolaasNick J. M. van Ommen | | | | |
| | | | | |
| W. P. Carey 20212023 10-K – 141150 |
EXHIBIT INDEX
The following exhibits are filed with this Report. Documents other than those designated as being filed herewith are incorporated herein by reference.
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Exhibit
No. | | Description | | Method of Filing |
3.1 | | | Articles of Amendment and Restatement | | |
3.2 | | | Fifth Amended and Restated Bylaws of W. P. Carey Inc. | | |
4.1 | | | Form of Common Stock Certificate | | |
4.2 | | | Indenture, dated as of March 14, 2014, by and between W. P. Carey Inc., as issuer and U.S. Bank National Association, as trustee | | |
4.3 | | | First Supplemental Indenture, dated as of March 14, 2014, by and between W. P. Carey Inc., as issuer, and U.S. Bank National Association, as trustee | | |
4.4 | | | Form of Global Note Representing $500,000,000 Aggregate Principal Amount of 4.60% Senior Notes due 2024 | | |
4.5 | | | Third Supplemental Indenture, dated January 26, 2015, by and between W. P. Carey Inc., as issuer, and U.S. Bank National Association, as trustee | | |
4.6 | | | Form of Note representing $450 Million Aggregate Principal Amount of 4.000% Senior Notes due 2025 | | |
4.7 | | | Fourth Supplemental Indenture, dated as of September 12, 2016, by and between W. P. Carey Inc., as issuer, and U.S. Bank National Association, as trustee | | |
4.8 | | | Form of Note representing $350 Million Aggregate Principal Amount of 4.250% Senior Notes due 2026 | | |
4.9 | | | Indenture, dated as of November 8, 2016, by and among WPC Eurobond B.V., as issuer, W. P. Carey Inc., as guarantor, and U.S. Bank National Association, as trustee | | |
4.10 | | | First Supplemental Indenture, dated as of January 19, 2017, by and among WPC Eurobond B.V., as issuer, W. P. Carey Inc., as guarantor, and U.S. Bank National Association, as trustee. | | |
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Exhibit
No. | | Description | | Method of Filing |
4.11 | | | Form of Note representing €500 Million Aggregate Principal Amount of 2.250% Senior Notes due 2024 | | |
4.12 | | | Second Supplemental Indenture dated as of March 6, 2018, by and among WPC Eurobond B.V., as issuer, W. P. Carey Inc., as guarantor, and U.S. Bank National Association, as trustee | | |
4.13 | | | Form of Note representing €500 Million Aggregate Principal Amount of 2.125% Senior Notes due 2027 | | |
4.14 | | | Third Supplemental Indenture dated as of October 9, 2018, by and among WPC Eurobond B.V., as issuer, W. P. Carey Inc., as guarantor, and U.S. Bank National Association, as trustee | | |
4.15 | | | Form of Note representing €500 Million Aggregate Principal Amount of 2.250% Senior Notes due 2026 | | |
4.16 | | | Fifth Supplemental Indenture, dated June 14, 2019, by and between W. P. Carey Inc., as issuer, and U.S. Bank National Association, as trustee | | |
4.17 | | | Form of Note representing $325 Million Aggregate Principal Amount of 3.850% Senior Notes due 2029 | | |
4.18 | | | Fourth Supplemental Indenture, dated as of September 19, 2019, by and among WPC Eurobond B.V., as issuer, W. P. Carey Inc., as guarantor, and U.S. Bank National Association, as trustee | | |
4.19 | | | Form of Note representing €500 Million Aggregate Principal Amount of 1.350% Senior Notes due 2028 | | |
4.20 | | | Description of Securities Registered under Section 12 of the Exchange Act | | |
4.21 | | | Sixth Supplemental Indenture, dated October 14, 2020, by and between W. P. Carey Inc., as issuer, and U.S. Bank National Association, as trustee | | |
4.22 | | | Form of Note representing $500 Million Aggregate Principal Amount of 2.400% Senior Notes due 2031 | | |
4.23 | | | Seventh Supplemental Indenture, dated February 25, 2021, by and between W. P. Carey Inc., as issuer, and U.S. Bank National Association, as trustee | | |
4.24 | | | Form of Note representing $425 Million Aggregate Principal Amount of 2.250% Senior Notes Due 2033 | | |
4.25 | | | Fifth Supplemental Indenture dated as of March 8, 2021, by and among WPC Eurobond B.V., as issuer, W. P. Carey Inc., as guarantor, and U.S. Bank National Association, as trustee | | |
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Exhibit
No. | | Description | | Method of Filing |
4.26 | | | Form of Note representing €525 Million Aggregate Principal Amount of 0.950% Senior Notes Due 2030 | | |
4.27 | | | Eighth Supplemental Indenture, dated October 15, 2021, by and between W. P. Carey Inc., as issuer, and U.S. Bank National Association, as trustee | | |
4.28 | | | Form of Note representing $350 Million Aggregate Principal Amount of 2.450% Senior Notes due 2032 | | |
10.1 | | | W. P. Carey Inc. 1997 Share Incentive Plan, as amended * | | |
10.2 | | | W. P. Carey Inc. (formerly W. P. Carey & Co. LLC) Long-Term Incentive Program as amended and restated effective as of September 28, 2012 * | | |
10.3 | | | W. P. Carey Inc. Amended and Restated Deferred Compensation Plan for Employees * | | |
10.4 | | | Amended and Restated W. P. Carey Inc. 2009 Share Incentive Plan * | | |
10.5 | | | 2017 Annual Incentive Compensation Plan | | |
10.6 | | | 2017 Share Incentive Plan | | |
10.7 | | | Form of Share Option Agreement under the 2017 Share Incentive Plan | | |
10.8 | | | Form of Restricted Share Agreement under the 2017 Share Incentive Plan | | |
10.9 | | | Form of Restricted Share Unit Agreement under the 2017 Share Incentive Plan | | |
10.10 | | | Form of Long-Term Performance Share Unit Award Agreement pursuant to the W. P. Carey Inc. 2017 Share Incentive Plan | | |
10.11 | | | Form of Non-Employee Director Restricted Share Agreement under the 2017 Share Incentive Plan | | |
10.12 | | | W. P. Carey Inc. 2009 Non-Employee Directors’ Incentive Plan *
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10.13 | | | Amended and Restated Advisory Agreement, dated as of January 1, 2015 by and among Corporate Property Associates 18 – Global Incorporated, CPA:18 Limited Partnership and Carey Asset Management Corp. | | |
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Exhibit
No. | | Description | | Method of Filing |
10.14 | | | First Amendment to Amended and Restated Advisory Agreement, dated as of January 30, 2018, among Corporate Property Associates 18 – Global Incorporated, CPA: 18 Limited Partnership and Carey Asset Management Corp. | | |
10.15 | | | Second Amendment to Amended and Restated Advisory Agreement, dated as of May 11, 2020, among Corporate Property Associates 18 – Global Incorporated, CPA: 18 Limited Partnership and Carey Asset Management Corp. | | |
10.16 | | | Amended and Restated Asset Management Agreement dated as of May 13, 2015, by and among, Corporate Property Associates 18 – Global Incorporated, CPA:18 Limited Partnership and W. P. Carey & Co. B.V. | | |
10.17 | | | Fourth Amended and Restated Credit Agreement, dated as of February 20, 2020, among W. P. Carey Inc. and Certain of its Subsidiaries identified therein as Guarantors, Bank of America, N.A., as Administrative Agent, Bank of America, N.A., JPMorgan Chase Bank, N.A. and Wells Fargo Bank, N.A., as L/C Issuers, Bank of America, N.A., as Swing Line Lender, and the Lenders party thereto | | |
10.18 | | | First Amendment (LIBOR Transition), dated as of December 1, 2021, to the Fourth Amended and Restated Credit Agreement, among W. P. Carey Inc. and Bank of America, N.A., as administrative agent | | |
10.19 | | | Agency Agreement dated as of January 19, 2017, by and among WPC Eurobond B.V., as issuer, W. P. Carey Inc., as guarantor, Elavon Financial Services DAC, UK Branch, as paying agent and U.S. Bank National Association, as transfer agent, registrar and trustee | | |
10.20 | | | Agency Agreement dated as of March 6, 2018, by and among WPC Eurobond B.V., as issuer, W. P. Carey Inc., as guarantor, Elavon Financial Services DAC, UK Branch, as paying agent and U.S. Bank National Association, as transfer agent, registrar and trustee | | |
10.21 | | | Agency Agreement dated as of October 9, 2018, by and among WPC Eurobond B.V., as issuer, W. P. Carey Inc., as guarantor, Elavon Financial Services DAC, UK Branch, as paying agent and U.S. Bank National Association, as transfer agent, registrar and trustee | | |
10.22 | | | Equity Sales Agreement, dated August 9, 2019, by and among W. P. Carey Inc. and each of Barclays Capital Inc., BMO Capital Markets Corp., BNY Mellon Capital Markets, LLC, BofA Securities, Inc., BTIG, LLC, Capital One Securities, Inc., Fifth Third Securities, Inc., Jefferies LLC, J.P. Morgan Securities LLC, Regions Securities LLC, Scotia Capital (USA) Inc., Stifel, Nicolaus & Company, Incorporated and Wells Fargo Securities, LLC, as agents, and each of Barclays Bank PLC, Bank of Montreal, The Bank of New York Mellon, Bank of America, N.A., Jefferies LLC, JPMorgan Chase Bank, National Association, The Bank of Nova Scotia and Wells Fargo Bank, National Association, as forward purchasers | | |
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Exhibit
No. | | Description | | Method of Filing |
10.23 | | | Agency Agreement dated as of March 8, 2021, by and among WPC Eurobond B.V., as issuer, W. P. Carey Inc., as guarantor, Elavon Financial Services DAC, as paying agent and U.S. Bank National Association, as transfer agent, registrar and trustee | | |
10.24 | | | Forward Confirmation, dated August 9, 2021, by and among W. P. Carey Inc. and J.P. Morgan Chase Bank, National Association | | |
10.25 | | | Forward Confirmation, dated August 9, 2021, by and among W. P. Carey Inc. and Barclays Bank PLC | | |
10.26 | | | Forward Confirmation, dated August 11, 2021, by and among W. P. Carey Inc. and J.P. Morgan Chase Bank, National Association | | |
10.27 | | | Forward Confirmation, dated August 11, 2021, by and among W. P. Carey Inc. and Barclays Bank PLC | | |
18.1 | | | Preferability letter of Independent Registered Public Accounting Firm | | |
21.1 | | | List of Registrant Subsidiaries | | |
23.1 | | | Consent of PricewaterhouseCoopers LLP | | |
31.1 | | | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | | |
31.2 | | | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | | |
32 | | | Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | | |
99.1 | | | Director and Officer Indemnification Policy | | |
101.INS | | XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL Document. | | Filed herewith |
101.SCH | | XBRL Taxonomy Extension Schema Document | | Filed herewith |
101.CAL | | XBRL Taxonomy Extension Calculation Linkbase Document | | Filed herewith |
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Exhibit
No. | | Description | | Method of Filing |
101.DEF | | XBRL Taxonomy Extension Definition Linkbase Document | | Filed herewith |
101.LAB | | XBRL Taxonomy Extension Label Linkbase Document | | Filed herewith |
101.PRE | | XBRL Taxonomy Extension Presentation Linkbase Document | | Filed herewith |
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*The referenced exhibit is a management contract or compensation plan or arrangement required to be filed as an exhibit pursuant to Item 15 (a)(3) of Form 10-K.
