UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q



þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

		For the quarterly period ended ~~September~~June 30, ~~2016~~2017

or

o		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: 000-54970

CORPORATE PROPERTY ASSOCIATES 18 – GLOBAL INCORPORATED

(Exact name of registrant as specified in its charter)



Maryland		90-0885534
(State of incorporation)		(I.R.S. Employer Identification No.)

50 Rockefeller Plaza
New York, New York		10020
(Address of principal executive offices)		(Zip Code)

Investor Relations (212) 492-8920

(212) 492-1100

(Registrant’s telephone numbers, including area code)

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 þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated ~~filer”~~filer,” “smaller reporting company,” and ~~“smaller reporting~~“emerging growth company” in Rule 12b-2 of the Exchange Act.



Large accelerated filer o	Accelerated filer o	Non-accelerated filer þ	~~Smaller reporting company~~ o
		(Do not check if a smaller reporting company)

Smaller reporting company o	Emerging growth company o

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. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

Registrant has ~~107,499,845~~110,652,080 shares of Class A common stock, $0.001 par value, and ~~30,529,040~~31,375,781 shares of Class C common stock, $0.001 par value, outstanding at ~~October 31, 2016.~~August 11, 2017.

INDEX



		Page No.
PART I −— FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
	Consolidated Balance Sheets	2
	Consolidated Statements of Operations	3
	Consolidated Statements of Comprehensive ~~Loss~~Income (Loss)	4
	Consolidated Statements of Equity	5
	Condensed Consolidated Statements of Cash Flows	6
	Notes to Consolidated Financial Statements	7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		3130
Item 3. Quantitative and Qualitative Disclosures About Market Risk		5556
Item 4. Controls and Procedures		5859

PART II −— OTHER INFORMATION
Item 2. Unregistered Sales of Equity Securities ~~and Use of Proceeds~~		5960
Item 6. Exhibits		61
Signatures		62

Forward-Looking Statements

This Quarterly Report on Form 10-Q, or this Report, including Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 2 of Part I 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. It is important to note that our actual results could be materially different from those projected in such forward-looking statements. 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, or the SEC, including but not limited to those described in Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, ~~2015,~~2016, as filed with the SEC on March ~~15, 2016,~~14, 2017, or the ~~2015~~2016 Annual ~~Report, and in our Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2016, as filed with the SEC on August 9, 2016.~~Report. 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.

All references to “Notes” throughout the document refer to the footnotes to the consolidated financial statements of the registrant in Part I, Item 1. Financial Statements (Unaudited).

CPA^®:18 – Global 9/6/30/~~2016~~2017 10-Q – 1

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements.

CORPORATE PROPERTY ASSOCIATES 18 – GLOBAL INCORPORATED

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in thousands, except share and per share amounts)


	September 30, 2016			December 31, 2015			June 30, 2017			December 31, 2016
Assets
Investments in real estate:
Real estate, at cost	$	1,024,242		$	986,574
Operating real estate, at cost	573,354			490,852
Accumulated depreciation	(73,933		)	(42,194		)
Net investments in properties	1,523,663			1,435,232
Real estate							$	1,163,279		$	990,810
Operating real estate							613,999			606,558
Real estate under construction	197,938			131,930			140,541			182,612
Net investment in direct financing leases	50,182			51,966
Note receivable	28,000			28,000
Net investments in direct financing leases							39,215			49,596
In-place lease intangible assets							269,608			260,469
Other intangible assets							34,312			32,082
Investments in real estate							2,260,954			2,122,127
Accumulated depreciation and amortization							(211,380		)	(168,974		)
Net investments in real estate	1,799,783			1,647,128			2,049,574			1,953,153
Equity investments in real estate	14,484			12,588
Notes receivable							66,500			66,500
Equity investment in real estate							20,777			14,694
Cash and cash equivalents	84,775			117,453			55,549			72,028
In-place lease intangible assets, net	191,869			212,420
Other intangible assets, net	30,945			31,421
Other assets, net							78,521			79,545
Goodwill	25,103			23,389			25,280			23,526
Other assets, net	84,587			90,284
Total assets	$	2,231,546		$	2,134,683		$	2,296,201		$	2,209,446
Liabilities and Equity
Liabilities:
Non-recourse debt, net	$	997,955		$	865,327
Debt:
Non-recourse mortgages, net							$	1,067,350		$	1,019,158
Bonds payable, net	147,677			133,886			142,665			138,253
Deferred income taxes	50,156			47,313
Debt, net							1,210,015			1,157,411
Accounts payable, accrued expenses and other liabilities	81,737			71,397			80,814			69,006
Due to affiliate	27,333			43,974			53,702			53,711
Deferred income taxes							61,678			42,419
Distributions payable	20,777			20,078			21,396			20,995
Total liabilities	1,325,635			1,181,975			1,427,605			1,343,542
Commitments and contingencies (Note 11)
Equity:
CPA^®:18 – Global stockholders’ equity:
Commitments and contingencies (Note 10)

Preferred stock, $0.001 par value; 50,000,000 shares authorized; none issued	—			—			—			—
Class A common stock, $0.001 par value; 320,000,000 shares authorized; 106,335,979 and 103,214,083 shares, respectively, issued and outstanding	106			103
Class C common stock, $0.001 par value; 80,000,000 shares authorized; 30,190,015 and 29,536,899 shares, respectively, issued and outstanding	30			30
Class A common stock, $0.001 par value; 320,000,000 shares authorized; 109,457,580 and 107,460,081 shares, respectively, issued and outstanding							109			107
Class C common stock, $0.001 par value; 80,000,000 shares authorized; 31,028,824 and 30,469,144 shares, respectively, issued and outstanding							31			30
Additional paid-in capital	1,211,035			1,178,990			1,242,487			1,222,139
Distributions and accumulated losses	(326,084		)	(247,995		)	(396,879		)	(360,673		)
Accumulated other comprehensive loss	(48,545		)	(50,316		)	(45,083		)	(61,704		)
Total CPA^®:18 – Global stockholders’ equity	836,542			880,812
Total stockholders’ equity							800,665			799,899
Noncontrolling interests	69,369			71,896			67,931			66,005
Total equity	905,911			952,708			868,596			865,904
Total liabilities and equity	$	2,231,546		$	2,134,683		$	2,296,201		$	2,209,446

See Notes to Consolidated Financial ~~Statements (Unaudited).~~Statements.

CPA^®:18 – Global 9/6/30/~~2016~~2017 10-Q – 2

CORPORATE PROPERTY ASSOCIATES 18 – GLOBAL INCORPORATED

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(in thousands, except share and per share amounts)


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015			2017			2016			2017			2016
Revenues
Lease revenues:
Rental income	$	23,620		$	20,628		$	69,887		$	56,054		$	24,542		$	22,974		$	47,902		$	46,267
Interest income from direct financing leases	1,131			1,047			3,452			3,079			906			1,150			1,880			2,321
Total lease revenues	24,751			21,675			73,339			59,133			25,448			24,124			49,782			48,588
Other real estate income	18,711			12,308			52,190			27,332			20,316			17,842			39,696			33,479
Other operating income	3,112			2,376			9,138			6,128			3,426			3,039			6,443			6,026
Other interest income	710			710			2,130			2,120			1,783			710			3,532			1,420
	47,284			37,069			136,797			94,713			50,973			45,715			99,453			89,513
Operating Expenses
Depreciation and amortization	20,876			17,652			62,771			44,303			18,728			21,392			37,679			41,895
Property expenses													10,209			6,471			18,418			12,730
Other real estate expenses	8,634			5,380			23,261			11,660			8,448			7,837			16,482			14,627
Property expenses	6,946			5,612			19,676			13,703
General and administrative	1,601			2,735			5,151			6,459			1,752			1,514			3,481			3,550
Acquisition expenses	36			10,795			4,747			34,575
Acquisition and other expenses													(7		)	2,816			45			4,711
	38,093			42,174			115,606			110,700			39,130			40,030			76,105			77,513
Other Income and Expenses
Interest expense	(11,025		)	(7,970		)	(31,705		)	(24,065		)	(11,791		)	(10,320		)	(23,244		)	(20,680		)
Other income and (expenses)	87			(2,324		)	1,120			(4,256		)	9,459			(2,952		)	12,121			1,033
Equity in losses of equity method investment in real estate													(254		)	—			(353		)	—
	(10,938		)	(10,294		)	(30,585		)	(28,321		)	(2,586		)	(13,272		)	(11,476		)	(19,647		)
Loss before income taxes and gain (loss) on sale of real estate	(1,747		)	(15,399		)	(9,394		)	(44,308		)
Income (loss) before income taxes and loss on sale of real estate													9,257			(7,587		)	11,872			(7,647		)
(Provision for) benefit from income taxes	(103		)	1,062			(303		)	854			(1,123		)	133			(1,193		)	(200		)
Loss before gain (loss) on sale of real estate	(1,850		)	(14,337		)	(9,697		)	(43,454		)
Gain (loss) on sale of real estate, net of tax	—			6,654			(63		)	6,654
Net Loss	(1,850		)	(7,683		)	(9,760		)	(36,800		)
Net income attributable to noncontrolling interests (inclusive of Available Cash Distributions to a related party of $1,662, $1,705, $5,319, and $4,021, respectively)	(2,231		)	(2,092		)	(6,730		)	(5,096		)
Net Loss Attributable to CPA®:18 – Global	$	(4,081	)	$	(9,775	)	$	(16,490	)	$	(41,896	)

Income (loss) before loss on sale of real estate													8,134			(7,454		)	10,679			(7,847		)
Loss on sale of real estate, net of tax													—			—			—			(63		)
Net Income (Loss)													8,134			(7,454		)	10,679			(7,910		)
Net income attributable to noncontrolling interests (inclusive of Available Cash Distributions to a related party of $2,186, $2,380, $3,861, and $3,657, respectively)													(2,350		)	(2,758		)	(4,274		)	(4,499		)
Net Income (Loss) Attributable to CPA^®:18 – Global													$	5,784		$	(10,212	)	$	6,405		$	(12,409	)
Class A Common Stock
Net loss attributable to CPA^®:18 – Global	$	(3,083	)	$	(7,078	)	$	(12,569	)	$	(31,659	)
Net income (loss) attributable to CPA^®:18 – Global													$	4,600		$	(7,882	)	$	5,179		$	(9,485	)
Basic and diluted weighted-average shares outstanding	106,279,055			102,293,880			105,148,891			101,471,695			109,533,769			105,182,645			108,998,427			104,577,599
Basic and diluted loss per share	$	(0.03	)	$	(0.07	)	$	(0.12	)	$	(0.31	)
Basic and diluted income (loss) per share													$	0.04		$	(0.07	)	$	0.05		$	(0.09	)
Distributions Declared Per Share	$	0.1563		$	0.1563		$	0.4689		$	0.4687		$	0.1563		$	0.1563		$	0.3126		$	0.3126

Class C Common Stock
Net loss attributable to CPA^®:18 – Global	$	(998	)	$	(2,697	)	$	(3,921	)	$	(10,237	)
Net income (loss) attributable to CPA^®:18 – Global													$	1,184		$	(2,330	)	$	1,226		$	(2,924	)
Basic and diluted weighted-average shares outstanding	30,205,326			29,279,706			29,964,756			26,925,898			31,030,596			29,928,571			30,898,107			29,843,149
Basic and diluted loss per share	$	(0.03	)	$	(0.09	)	$	(0.13	)	$	(0.38	)
Basic and diluted income (loss) per share													$	0.04		$	(0.08	)	$	0.04		$	(0.10	)
Distributions Declared Per Share	$	0.1376		$	0.1340		$	0.4089		$	0.3998		$	0.1382		$	0.1376		$	0.2762		$	0.2713

See Notes to Consolidated Financial ~~Statements (Unaudited).~~Statements.

CPA^®:18 – Global 9/6/30/~~2016~~2017 10-Q – 3

CORPORATE PROPERTY ASSOCIATES 18 – GLOBAL INCORPORATED

CONSOLIDATED STATEMENTS OF COMPREHENSIVE ~~LOSS~~INCOME (LOSS) (UNAUDITED)

(in thousands)


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015			2017			2016			2017			2016
Net Loss	$	(1,850	)	$	(7,683	)	$	(9,760	)	$	(36,800	)
Net Income (Loss)													$	8,134		$	(7,454	)	$	10,679		$	(7,910	)
Other Comprehensive Income (Loss)
Foreign currency translation adjustments	2,963			(6,724		)	8,739			(28,202		)	19,541			(10,788		)	23,697			5,776
Change in net unrealized (loss) gain on derivative instruments	(928		)	837			(4,678		)	3,115			(3,824		)	95			(4,281		)	(3,750		)
	2,035			(5,887		)	4,061			(25,087		)	15,717			(10,693		)	19,416			2,026
Comprehensive Income (Loss)	185			(13,570		)	(5,699		)	(61,887		)	23,851			(18,147		)	30,095			(5,884		)

Amounts Attributable to Noncontrolling Interests
Net income	(2,231		)	(2,092		)	(6,730		)	(5,096		)	(2,350		)	(2,758		)	(4,274		)	(4,499		)
Foreign currency translation adjustments	(813		)	1,300			(2,290		)	5,480			(2,265		)	1,193			(2,795		)	(1,477		)
Comprehensive (income) loss attributable to noncontrolling interests	(3,044		)	(792		)	(9,020		)	384
Comprehensive Loss Attributable to CPA^®:18 – Global	$	(2,859	)	$	(14,362	)	$	(14,719	)	$	(61,503	)
Comprehensive income attributable to noncontrolling interests													(4,615		)	(1,565		)	(7,069		)	(5,976		)
Comprehensive Income (Loss) Attributable to CPA^®:18 – Global													$	19,236		$	(19,712	)	$	23,026		$	(11,860	)

See Notes to Consolidated Financial ~~Statements (Unaudited).~~Statements.

CPA^®:18 – Global 9/6/30/~~2016~~2017 10-Q – 4

CORPORATE PROPERTY ASSOCIATES 18 – GLOBAL INCORPORATED

CONSOLIDATED STATEMENTS OF EQUITY (UNAUDITED)

~~Nine~~Six Months Ended ~~September~~June 30, ~~2016~~2017 and ~~2015~~2016

(in thousands, except share and per share amounts)


	CPA^®:18 – Global Stockholders																																CPA^®:18 – Global Stockholders
										Additional Paid-In Capital				Distributions and Accumulated Losses				Accumulated Other Comprehensive Loss				Total CPA^®:18 – Global Stockholders				Noncontrolling Interests																				Additional Paid-In Capital				Distributions and Accumulated Losses				Accumulated Other Comprehensive Loss				Total CPA^®:18 – Global Stockholders				Noncontrolling Interests
	Common Stock																				Common Stock
	Class A					Class C															Class A									Class C
	Shares		Amount			Shares		Amount									Total				Shares								Amount				Shares			Amount									Total
Balance at January 1, 2016	103,214,083		$	103		29,536,899		$	30				$		1,178,990					$	(247,995				)					$	(50,316	)		$	880,812			$	71,896			$	952,708
Shares issued, net of offering costs	2,900,565		3			939,990		—					32,450														32,453								32,453
Balance at January 1, 2017																																	107,460,081			$	107			30,469,144			$	30			$	1,222,139			$	(360,673	)		$	(61,704	)		$	799,899			$	66,005			$	865,904
Shares issued																																	2,133,836			2				687,204			1			22,276												22,279								22,279
Shares issued to affiliate	913,907		1										7,390												7,391								7,391			686,096			1										5,420												5,421								5,421
Stock-based compensation	12,658		—							100															100								100
Contributions from noncontrolling interests																									—				41				41																												—				3,118				3,118
Distributions to noncontrolling interests																								—				(11,588		)		(11,588		)																										—				(8,261		)		(8,261		)
Distributions declared ($0.4689 and $0.4089 per share to Class A and Class C, respectively)														(61,599		)							(61,599		)						(61,599		)
Distributions declared ($0.3126 and $0.2762 per share to Class A and Class C, respectively)																																																		(42,611		)						(42,611		)						(42,611		)
Net income																																																		6,405								6,405				4,274				10,679
Other comprehensive income:
Foreign currency translation adjustments																																																						20,902				20,902				2,795				23,697
Change in net unrealized loss on derivative instruments																																																						(4,281		)		(4,281		)						(4,281		)
Repurchase of shares																																	(822,433	)		(1		)		(127,524	)		—			(7,348		)										(7,349		)						(7,349		)
Balance at June 30, 2017																																	109,457,580			$	109			31,028,824			$	31		$	1,242,487			$	(396,879	)		$	(45,083	)		$	800,665			$	67,931			$	868,596

Balance at January 1, 2016																																	103,214,083			$	103			29,536,899			$	30		$	1,178,990			$	(247,995	)		$	(50,316	)		$	880,812			$	71,896			$	952,708
Shares issued																																	1,851,942			2				599,187			—			21,475												21,477								21,477
Shares issued to affiliate																																	599,386			—				—			—			4,906												4,906								4,906
Contributions from noncontrolling interests																																																										—				41				41
Distributions to noncontrolling interests																																																										—				(8,077		)		(8,077		)
Distributions declared ($0.3126 and $0.2713 per share to Class A and Class C, respectively)																																																		(40,825		)						(40,825		)						(40,825		)
Net loss														(16,490		)						(16,490		)		6,730				(9,760		)																		(12,409		)						(12,409		)		4,499				(7,910		)
Other comprehensive income:
Foreign currency translation adjustments																		6,449				6,449				2,290				8,739																								4,299				4,299				1,477				5,776
Change in net unrealized loss on derivative instruments																		(4,678		)		(4,678		)						(4,678		)																						(3,750		)		(3,750		)						(3,750		)
Repurchase of shares	(705,234	)	(1		)	(286,874	)	—		(7,895		)										(7,896		)						(7,896		)	(424,910	)		—				(215,842	)		—			(5,162		)										(5,162		)						(5,162		)
Balance at September 30, 2016	106,335,979		$	106		30,190,015		$	30	$	1,211,035			$	(326,084	)		$	(48,545	)		$	836,542			$	69,369			$	905,911

Balance at January 1, 2015	99,924,009		$	100		18,026,013		$	18	$	1,055,342			$	(111,878	)		$	(20,941	)		$	922,641			$	77,587			$	1,000,228
Shares issued, net of offering costs	2,478,960		2			11,312,950		11		124,715												124,728								124,728
Shares issued to affiliate	490,598		1							4,906												4,907								4,907
Stock-based compensation	11,111		—							100												100								100
Contributions from noncontrolling interests																						—				4,132				4,132
Distributions to noncontrolling interests																						—				(7,454		)		(7,454		)
Distributions declared ($0.4687 and $0.3998 per share to Class A and Class C, respectively)														(58,309		)						(58,309		)						(58,309		)
Net loss														(41,896		)						(41,896		)		5,096				(36,800		)
Other comprehensive loss:
Foreign currency translation adjustments																		(22,722		)		(22,722		)		(5,480		)		(28,202		)
Change in net unrealized gain on derivative instruments																		3,115				3,115								3,115
Repurchase of shares	(544,294	)	—			(44,685	)	—		(5,621		)										(5,621		)						(5,621		)
Balance at September 30, 2015	102,360,384		$	103		29,294,278		$	29	$	1,179,442			$	(212,083	)		$	(40,548	)		$	926,943			$	73,881			$	1,000,824
Balance at June 30, 2016																																	105,240,501			$	105			29,920,244			$	30		$	1,200,209			$	(301,229	)		$	(49,767	)		$	849,348			$	69,836			$	919,184

See Notes to Consolidated Financial ~~Statements (Unaudited).~~Statements.

CPA^®:18 – Global 9/6/30/~~2016~~2017 10-Q – 5

CORPORATE PROPERTY ASSOCIATES 18 – GLOBAL INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(in thousands)


	Nine Months Ended September 30,						Six Months Ended June 30,
	2016			2015			2017			2016
Cash Flows — Operating Activities
Net Cash Provided by Operating Activities	$	56,005		$	24,380		$	39,761		$	32,293
Cash Flows — Investing Activities
Funding and advances for build-to-suit projects	(81,119		)	(34,978		)	(30,514		)	(54,001		)
Acquisitions of real estate, net of cash acquired	(55,307		)	(658,384		)
Value added taxes paid in connection with acquisition of real estate	(7,994		)	(3,407		)
Acquisitions of real estate and direct financing leases							(27,687		)	(55,328		)
Value added taxes refunded in connection with acquisitions of real estate							12,050			2,814
Capital contributions to equity investment							(5,616		)	(3,596		)
Change in investing restricted cash							3,480			579
Capital expenditures on real estate	(5,363		)	(4,181		)	(3,089		)	(3,410		)
Payment of deferred acquisition fees to an affiliate	(4,476		)	(2,995		)	(2,854		)	(3,409		)
Value added taxes refunded in connection with acquisition of real estate	4,224			—
Value added taxes paid in connection with acquisition of real estate							(2,491		)	(4,687		)
Return of capital from equity investments							236			2,175
Other investing activities, net							(38		)	37
Deposits for investments	4,000			(4,000		)	—			4,000
Capital contributions to equity investment	(3,850		)	(5,469		)
Return of capital from equity investments in real estate	2,243			(48		)
Change in investing restricted cash	340			(7,208		)
Other investing activities, net	47			—
Proceeds from sale of real estate	40			35,674			—			40
Net Cash Used in Investing Activities	(147,215		)	(684,996		)	(56,523		)	(114,786		)
Cash Flows — Financing Activities
Distributions paid							(42,210		)	(40,334		)
Proceeds from mortgage financing	106,601			436,656			32,613			72,290
Distributions paid	(60,900		)	(56,014		)
Proceeds from issuance of shares, net of issuance costs	30,588			125,243
Proceeds from issuance of shares							21,175			20,166
Proceeds from notes payable to affiliate							11,196			—
Distributions to noncontrolling interests	(11,588		)	(7,454		)	(8,261		)	(8,077		)
Repurchase of shares	(7,896		)	(5,621		)	(7,349		)	(5,162		)
Scheduled payments and prepayments of mortgage principal							(6,323		)	(1,526		)
Repayment of notes payable to affiliate							(4,495		)	—
Contributions from noncontrolling interests							2,339			41
Payment of deferred financing costs and mortgage deposits							(526		)	(798		)
Change in financing restricted cash	5,171			(3,197		)	(30		)	4,941
Scheduled payments and prepayments of mortgage principal	(3,641		)	(49,082		)
Payment of deferred financing costs and mortgage deposits	(796		)	(5,137		)
Contributions from noncontrolling interests	41			2,692
Proceeds from bond financing	—			66,328
Other financing activities, net	—			(44		)	(13		)	—
Net Cash Provided by Financing Activities	57,580			504,370
Net Cash (Used in) Provided by Financing Activities							(1,884		)	41,541
Change in Cash and Cash Equivalents During the Period
Effect of exchange rate changes on cash and cash equivalents	952			(3,441		)	2,167			411
Net decrease in cash and cash equivalents	(32,678		)	(159,687		)	(16,479		)	(40,541		)
Cash and cash equivalents, beginning of period	117,453			429,548			72,028			117,453
Cash and cash equivalents, end of period	$	84,775		$	269,861		$	55,549		$	76,912

See Notes to Consolidated Financial ~~Statements (Unaudited).~~Statements.

CPA^®:18 – Global 9/6/30/~~2016~~2017 10-Q – 6

CORPORATE PROPERTY ASSOCIATES 18 – GLOBAL INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 1. Organization

Organization

Corporate Property Associates 18 – Global Incorporated, or CPA^®:18 – Global, ~~and,~~ together with its consolidated subsidiaries, ~~we, us, or our,~~ is a publicly owned, ~~non-listed~~non-traded real estate investment trust, or REIT, that invests primarily in a diversified portfolio of income-producing commercial real estate properties leased to companies and other real estate related assets, both domestically and internationally. We were formed in 2012 and are managed by W. P. Carey Inc., or WPC, through one of its subsidiaries, or collectively, our Advisor. As a REIT, we are not subject to U.S. federal income taxation as long as we satisfy certain requirements, principally relating to the nature of our income and the level of our distributions, among other factors. We earn revenue primarily by leasing the properties we own to single corporate tenants, predominantly on a triple-net lease basis, which requires the tenant to pay substantially all of the costs associated with operating and maintaining the property. Revenue is subject to fluctuation due to the timing of new lease transactions, lease terminations, lease expirations, contractual rent adjustments, tenant defaults, sales of properties, and changes in foreign currency exchange rates.

Substantially all of our assets and liabilities are held by CPA^®:18 Limited Partnership, or the Operating Partnership, and at ~~September~~June 30, ~~2016~~2017 we owned 99.97% of general and limited partnership interests in the Operating Partnership. The remaining interest in the Operating Partnership is held by a subsidiary of WPC.

At ~~September~~June 30, ~~2016,~~2017, our portfolio was comprised of full or partial ownership interests in 59 properties, the majority of which were fully-occupied and triple-net leased to ~~102~~101 tenants totaling ~~9.6~~10.1 million square feet. The remainder of our portfolio was comprised of our full or partial ownership interests in 6769 self-storage properties and ~~eight~~nine multi-family properties totaling ~~6.5~~6.8 million square feet.

We raised aggregate gross proceeds in our initial public offering of approximately $1.2 billion through April 2, 2015, which is the date we closed our offering. From inception through September 30, 2016, we also received distribution reinvestment plan proceeds of $74.8 million and $18.3 million from our Class A and Class C common stock, respectively.

We operate in ~~two~~three reportable business segments: Net Lease, Self Storage, and ~~Self Storage.~~Multi Family. Our Net Lease segment includes our investments in net-leased properties, whether they are accounted for as operating leases or direct financing leases. Our Self Storage segment is comprised of our investments in self-storage properties. Our Multi Family segment is comprised of our investments in multi-family residential properties and student-housing developments. In addition, we have an All Other category that includes our ~~multi-family~~notes receivable investments ~~and our investment in a note receivable~~ (Note 1312). Our reportable business segments and All Other category are the same as our reporting units.

~~Note 2. Revisions~~We raised aggregate gross proceeds in our initial public offering of ~~Previously-Issued Financial Statements~~

~~Error Associated with Financing Costs~~

~~During~~approximately $1.2 billion through April 2, 2015, which is the ~~second quarter of 2015,~~date we ~~identified an error related to the capitalization of financing costs associated with the refinancing of a mortgage loan, which should have been recorded as Interest expense within~~closed our ~~consolidated statement of operations for the three months ended March 31, 2015.~~offering. We have ~~revised~~fully invested the proceeds from our ~~consolidated statement of operations, which increased Other income and (expenses), Loss before income taxes, Net loss, and Net loss attributable to CPA~~^®~~:18 – Global by $0.9~~initial public offering. In addition, from inception through June 30, 2017, $100.0 million and ~~Net loss per share for~~$26.4 million of distributions to our shareholders were reinvested in our Class A and Class C common stock, by $0.01. This also resulted in a corresponding decrease of $0.9 million to Other assets, Total assets, Distributions and accumulated losses, and Total equity within the consolidated balance sheet and, where applicable, within the consolidated statement of equity. In addition, the amounts for Net loss, Comprehensive loss and Comprehensive loss attributable to CPA^®~~:18 – Global on the consolidated statement of comprehensive loss for the three months ended March 31, 2015 increased by $0.9 million.~~

~~CPA~~^®~~:18 – Global 9/30/2016 10-Q~~– 7

~~Notes to Consolidated Financial Statements (Unaudited)~~

~~Revision of Share Repurchases~~

~~During the year ended December 31, 2015, we determined that~~respectively, through our presentation of common shares repurchased should be classified as a reduction to Common stock, for the par amount of the common shares repurchased and as a reduction to Additional paid-in capital for the excess over the amount allocated to common stock, as well as included as shares unissued within the consolidated financial statements. We previously classified common shares repurchased as Treasury stock in our consolidated financial statements. We evaluated the impact of this correction on previously-issued financial statements and concluded they were not materially misstated. In order to conform previous financial statements to the current period, we elected to revise previously-issued financial statements the next time such financial statements are filed. The correction eliminates Treasury stock of $7.1 million as of September 30, 2015 and results in corresponding reductions of Common stock and Additional paid-in capital, but has no impact on total equity within the consolidated balance sheets as of September 30, 2015 and consolidated statements of equity for the nine months ended September 30, 2015. The accompanying consolidated statement of equity for the nine months ended September 30, 2015 has been revised accordingly. The misclassification had no impact on the previously-reported consolidated statements of operations, consolidated statements of comprehensive loss,Distribution Reinvestment Plan, or ~~condensed consolidated statements of cash flows.~~DRIP.

Note 3.2. Basis of Presentation

Basis of Presentation

Our interim consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and, therefore, do not necessarily include all information and footnotes necessary for a fair statement of our consolidated financial position, results of operations, and cash flows in accordance with generally accepted accounting principles in the United States, or GAAP.

In the opinion of management, the unaudited financial information for the interim periods presented in this Report reflects all normal and recurring adjustments necessary for a fair statement of financial position, results of operations, and cash flows. Our interim consolidated financial statements should be read in conjunction with our audited consolidated financial statements and accompanying notes for the year ended December 31, ~~2015,~~2016, which are included in the ~~2015~~2016 Annual Report, as certain disclosures that would substantially duplicate those contained in the audited consolidated financial statements have not been included in this Report. Operating results for interim periods are not necessarily indicative of operating results for an entire year.

CPA^®:18 – Global 6/30/2017 10-Q– 7

Notes to Consolidated Financial Statements (Unaudited)

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.

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.

~~On January 1, 2016, we adopted the Financial Accounting Standards Board’s, or FASB’s, Accounting Standards Update, or~~ ~~ASU, 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis~~, as described in the Recent Accounting Pronouncements section below, which amends the current consolidation guidance, including introducing a separate consolidation analysis specific to limited partnerships and other similar entities. When we obtain an economic interest in an entity, we evaluate the entity to determine if it should be deemed a variable interest entity, or 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

~~CPA~~^®~~:18 – Global 9/30/2016 10-Q~~– 8

~~Notes to Consolidated Financial Statements (Unaudited)~~

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. We performed this analysis on all of our subsidiary entities following the guidance in ASU 2015-02 to determine whether they qualify as VIEs and whether they should be consolidated or accounted for as equity investments in an unconsolidated venture. As a result of this change in guidance, we determined that eight entities that were previously classified as voting interest entities should now be classified as VIEs as of January 1, 2016 and therefore included in our VIE disclosures. However, there was no change in determining whether or not we consolidate these entities as a result of the new guidance. We elected to retrospectively adopt ASU 2015-02, which resulted in changes to our VIE disclosures within the consolidated balance sheets. There were no other changes to our consolidated balance sheets or results of operations for the periods presented. The liabilities of these VIEs are non-recourse to us and can only be satisfied from each VIE’s respective ~~assets, except for the financing arrangement of our sole equity method investment, for which we have provided the lender with a guarantee of amounts due primarily of principal and interest payments.~~assets.

At ~~September~~June 30, ~~2016,~~2017, we considered 13 entities to be VIEs, 12 of which we consolidated as we are considered the primary beneficiary. ~~At December 31, 2015,~~We previously determined that a build-to-suit project in Eindhoven, the Netherlands was a VIE. In May 2017, we ~~considered 12 entities VIEs, 11~~made our final payment to the developer for this project and now own 100% of ~~which~~the voting rights (Note 4). As such, we ~~consolidated as we are considered the primary beneficiary.~~no longer determine it to be a VIE. The following table presents a summary of selected financial data of the consolidated VIEs included in the consolidated balance sheets (in thousands):


	September 30, 2016		December 31, 2015		June 30, 2017			December 31, 2016
Net investments in properties	$	379,733	$	360,049
Real estate					$	392,985		$	371,385
Operating real estate					49,018			43,948
Real estate under construction	182,883		119,115		140,541			162,371
Net investments in direct financing leases	11,177		12,684		—			10,516
In-place lease intangible assets					87,521			81,798
Other intangible assets					24,225			22,376
Accumulated depreciation and amortization					(47,745		)	(37,412		)
Net investments in real estate					646,545			654,982
Cash and cash equivalents	12,402		18,356		7,143			15,260
In-place lease intangible assets, net	70,215		73,487
Other intangible assets, net	22,365		22,316
Other assets, net	44,117		52,915		32,103			41,975
Total assets	$	722,892	$	658,922	$	685,791		$	712,217

Non-recourse debt, net	$	231,548	$	196,436
Non-recourse mortgages, net					$	224,431		$	235,425
Bonds payable, net	61,669		56,259		59,239			57,615
Deferred income taxes	22,948		21,577		26,802			20,437
Accounts payable, accrued expenses and other liabilities	33,836		29,163		22,108			30,946
Total liabilities	$	350,001	$	303,435	$	332,580		$	344,423

CPA^®:18 – Global 6/30/2017 10-Q– 8

Notes to Consolidated Financial Statements (Unaudited)

~~As of September~~At both June 30, ~~2016~~2017 and December 31, ~~2015,~~2016, we had one unconsolidated VIE, which we account for under the equity method of accounting. We do not consolidate this entity because we are not the primary beneficiary and the nature of our involvement in the activities of the entity allows us to exercise significant influence on, but does not give us power over, decisions that significantly affect the economic performance of the entity. As of ~~September~~June 30, ~~2016~~2017 and December 31, ~~2015,~~2016, the net carrying amount of ~~our~~this equity investment was ~~$14.5~~$20.8 million and ~~$12.6~~$14.7 million, respectively, and our maximum exposure to loss in this entity is limited to our investment. ~~The~~

At times, the carrying value of our equity investment may fall below zero for certain investments. We intend to fund our share of the jointly owned investment’s future operating deficits should the need arise. However, we have no legal obligation to pay for any of the liabilities of such investments nor do we have any legal obligation to fund the operating deficits. At June 30, 2017, our sole equity investment did not have a carrying value below zero.

Reclassifications

Certain prior period amounts have been reclassified to conform to the current period presentation. ~~Our consolidated balance sheets at September 30, 2016~~In the second quarter of 2017, we reclassified in-place lease intangible assets, net and ~~December 31, 2015, include a separate classification of our Equity~~other intangible assets, net to be included within Net investments in real estate ~~for the amounts of $14.5 million and $12.6 million, respectively, which was previously classified in Other assets, net~~ in our ~~historical quarterly~~consolidated balance sheets. The accumulated amortization on these assets is now included in Accumulated depreciation and ~~annual reports.~~

~~On January 1, 2016, we adopted~~ ~~ASU 2015-03, Interest-Imputation of Interest (Subtopic 835-30)~~ ~~as described~~amortization in our consolidated balance sheets. Prior period balances have been reclassified to conform to the Recent Accounting Pronouncements section below. ASU 2015-03 changes the presentation of debt issuance costs, which were previously recognized as an asset and requires that they be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. As a result of adopting this guidance, we reclassified $9.0 million of deferred financing costs from Other assets, net to Non-recourse debt, net and Bonds payable, net as of December 31, 2015.

~~CPA~~^®~~:18 – Global 9/30/2016 10-Q~~– 9

~~Notes to Consolidated Financial Statements (Unaudited)~~

current period presentation.

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU,~~ASU~~ 2014-09, Revenue from Contracts with Customers (Topic 606). ASU 2014-09 is a comprehensive new revenue recognition model requiring a company to recognize revenue to depict the transfer of goods or services to a customer at an amount reflecting the consideration it expects to receive in exchange for those goods or services. ASU 2014-09 does not apply to our lease revenues, which constitute a majority of our revenues, but will apply to reimbursed tenant costs and revenues generated from our operating properties. ~~Additionally,~~We will adopt this guidance ~~modifies disclosures regarding~~for our annual and interim periods beginning January 1, 2018 using one of two methods: retrospective restatement for each reporting period presented at the ~~nature, amount, timing and uncertainty~~time of ~~revenue and cash flows arising from contracts~~adoption, or retrospectively with ~~customers. In August 2015,~~ the ~~FASB issued ASU 2015-14, which defers~~cumulative effect of initially applying this guidance recognized at the ~~effective~~ date of ~~ASU 2014-09 for all entities by one year, beginning in 2018, with early~~initial application. We have not decided which method of adoption ~~permitted but not before 2017, the original public company effective date.~~we will use. We are ~~currently~~ evaluating the impact of ~~ASU 2014-09 on our consolidated financial statements~~the new standard and have not yet determined ~~the method by which we~~if it will ~~adopt the standard.~~

~~In February 2015, the FASB issued~~ ~~ASU 2015-02, Consolidation (Topic 810).~~ ASU 2015-02 amends the current consolidation guidance, including modification of the guidance for evaluating whether limited partnerships and similar legal entities are VIEs or voting interest entities. The guidance does not amend the existing disclosure requirements for VIEs or voting interest model entities. The guidance, however, modified the requirements to qualify under the voting interest model. Under the revised guidance, ASU 2015-02 requires an entity to classify a limited liability company or a limited partnership as a VIE unless the partnership provides partners with either substantive kick-out rights or substantive participating rights over the managing member or general partner. Please refer to the discussion in the Basis of Consolidation section above.

~~In April 2015, the FASB issued~~ ~~ASU 2015-03, Interest-Imputation of Interest (Subtopic 835-30).~~ ASU 2015-03 changed the presentation of debt issuance costs, which were previously recognized as a deferred charge (that is, an asset) and required that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. ASU 2015-03 does not affect the recognition and measurement guidance for debt issuance costs. ASU 2015-03 is effective for periods beginning after December 15, 2015, early adoption is permitted and retrospective application is required. We adopted ASU 2015-03 on January 1, 2016 and have disclosed the reclassification of our debt issuance costs in the Reclassifications section above.

~~In September 2015, the FASB issued~~ ~~ASU 2015-16, Business Combinations (Topic 805).~~ ASU 2015-16 eliminates the requirement that an acquirer in a business combination account for measurement period adjustments retrospectively. Instead, an acquirer will recognize a measurement period adjustment during the period in which it determines the amount of the adjustment, including the effect on earnings of any amounts it would have recorded in previous periods if the accounting had been completed at the acquisition date. ASU 2015-16 is effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years, early adoption is permitted and prospective application is required for adjustments that are identified after the effective date of this update. We elected to early adopt ASU 2015-16 and implemented the standard prospectively beginning July 1, 2015. The adoption and implementation of the standard did not have a material impact on our business or our consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842).ASU 2016-02 outlines a new model for accounting by lessees, whereby their rights and obligations under substantially all leases, existing and new, would be capitalized and recorded on the balance sheet. For lessors, however, the accounting remains largely unchanged from the current model, with the distinction between operating and financing leases retained, but updated to align with certain changes to the lessee model and the new revenue recognition standard. The new standard also replaces existing sale-leaseback guidance with a new model applicable to both lessees and lessors. Additionally, the new standard requires extensive quantitative and qualitative disclosures. ASU 2016-02 is effective for ~~U.S.~~ GAAP public companies for fiscal years beginning after December 15, 2018, including interim periods within those fiscal ~~years; for all other entities, the final lease standard will be effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020.~~years. Early application will be permitted for all entities. The new standard must be adopted using a modified retrospective transition of the new guidance and provides for certain practical expedients. Transition will require application of the new model at the beginning of the earliest comparative period presented. The ASU is expected to impact our consolidated financial statements as we have certain operating office and land lease arrangements for which we are the lessee. We are evaluating the impact of the new standard and have not yet determined if it will have a material impact on our business or our consolidated financial statements.

~~CPA~~^®~~:18 – Global 9/30/2016 10-Q~~– 10

~~Notes to Consolidated Financial Statements (Unaudited)~~

~~In March 2016, the FASB issued~~ ~~ASU 2016-05, Derivatives and Hedging (Topic 815): Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships.~~ ASU 2016-05 clarifies that a change in counterparty to a derivative contract in and of itself, does not require the dedesignation of a hedging relationship. ASU 2016-05 is effective for fiscal years beginning after December 15, 2016, including interim periods within those years. Early adoption is permitted and entities have the option of adopting this guidance on a prospective basis to new derivative contracts or on a modified retrospective basis. We elected to early adopt ASU 2016-05 on January 1, 2016 on a prospective basis and there was no impact on our consolidated financial statements.

~~In March 2016, the FASB issued~~ ~~ASU 2016-07, Investments - Equity Method and Joint Ventures (Topic 323).~~ ASU 2016-07 simplifies the transition to the equity method of accounting. ASU 2016-07 eliminates the requirement to apply the equity method of accounting retrospectively when a reporting entity obtains significant influence over a previously held investment. Instead the equity method of accounting will be applied prospectively from the date significant influence is obtained. The new standard should be applied prospectively for investments that qualify for the equity method of accounting in interim and annual periods beginning after December 15, 2016. Early adoption is permitted and we elected to early adopt this standard as of January 1, 2016. The adoption of this standard had no impact on our consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments -— Credit Losses.ASU 2016-13 introduces a new model for estimating credit losses based on current expected credit losses for certain types of financial instruments, including loans receivable, held-to-maturity debt securities, and net investments in direct financing leases, amongst other financial instruments. ASU 2016-13 also modifies the impairment model for available-for-sale debt securities and expands the disclosure requirements regarding an entity’s assumptions, models, and methods for estimating the allowance for losses. ASU 2016-13 will be effective for public business entities in fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, with early application of the guidance permitted. We are in the process of evaluating the impact of adopting ASU 2016-13 on our consolidated financial statements.

CPA^®:18 – Global 6/30/2017 10-Q– 9

Notes to Consolidated Financial Statements (Unaudited)

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. ASU 2016-15 intends to reduce diversity in practice for certain cash flow classifications, including, but not limited to (i) debt prepayment or debt extinguishment costs, (ii) contingent consideration payments made after a business combination, (iii) proceeds from the settlement of insurance claims, and (iv) distributions received from equity method investees. ASU 2016-15 will be effective for public business entities in fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, with early application of the guidance permitted. We are in the process of evaluating the impact of adopting ASU 2016-15 on our consolidated financial ~~statements.~~statements and will adopt the standard for the fiscal year beginning January 1, 2018.

In October 2016, the FASB issued ASU 2016-17, Consolidation (Topic 810): Interests Held through Related Parties That Are under Common Control. ASU 2016-17 changes how a reporting entity that is a decision maker should consider indirect interests in a VIE held through an entity under common control. If a decision maker must evaluate whether it is the primary beneficiary of a VIE, it will only need to consider its proportionate indirect interest in the VIE held through a common control party. ASU 2016-17 amends ASU 2015-02, which we adopted on January 1, 2016, and which currently directs the decision maker to treat the common control party’s interest in the VIE as if the decision maker held the interest itself. ASU 2016-17 is effective for public business entities in fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. We adopted ASU 2016-17 as of January 1, 2017 on a prospective basis. The adoption of this standard did not have a material impact on our consolidated financial statements.

In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. ASU 2016-18 intends to reduce diversity in practice for the classification and presentation of changes in restricted cash on the statement of cash flows. ASU 2016-18 requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. ASU 2016-18 will be effective for public business entities in fiscal years beginning after December 15, ~~2016,~~2017, including interim periods within those fiscal years, with early adoption permitted. We are in the process of evaluating the impact of adopting ASU ~~2016-17~~2016-18 on our consolidated financial statements and will adopt the standard for the fiscal year beginning January 1, 2018.

In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. ASU 2017-01 intends to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. Under the current implementation guidance in Topic 805, there are three elements of a business: inputs, processes, and outputs. While an integrated set of assets and activities, collectively referred to as a “set,” that is a business usually has outputs, outputs are not required to be present. ASU 2017-01 provides a screen to determine when a set is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. ASU 2017-01 will be effective for public business entities in fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, with early adoption permitted. We elected to early adopt ASU 2017-01 on January 1, 2017 on a prospective basis. While our acquisitions have historically been classified as either business combinations or asset acquisitions, certain acquisitions that were classified as business combinations by us likely would have been considered asset acquisitions under the new standard. As a result, transaction costs are more likely to be capitalized since we expect most of our future acquisitions to be classified as asset acquisitions under this new standard. In addition, goodwill that was previously allocated to businesses that were sold or held for sale will no longer be allocated and written off upon sale if future sales were deemed to be sales of assets and not businesses.

In January 2017, the FASB issued ASU 2017-04, Intangibles — Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. ASU 2017-04 removes step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. All other goodwill impairment guidance will remain largely unchanged. Entities will continue to have the option to perform a qualitative assessment to determine if a quantitative impairment test is necessary. ASU 2017-04 will be effective for public business entities in fiscal years beginning after December 15, 2019, including interim periods within those fiscal years in which a goodwill impairment test is performed, with early adoption permitted. We adopted ASU 2017-04 as of April 1, 2017 on a prospective basis. The adoption of this standard did not have a material impact on our consolidated financial statements.

CPA^®:18 – Global 9/6/30/~~2016~~2017 10-Q – 1110

Notes to Consolidated Financial Statements (Unaudited)

In February 2017, the FASB issued ASU 2017-05, Other Income — Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20). ASU 2017-05 clarifies that a financial asset is within the scope of Subtopic 610-20 if it meets the definition of an in substance nonfinancial asset. The amendments define the term “in substance nonfinancial asset,” in part, as a financial asset promised to a counterparty in a contract if substantially all of the fair value of the assets (recognized and unrecognized) that are promised to the counterparty in the contract is concentrated in nonfinancial assets. If substantially all of the fair value of the assets that are promised to the counterparty in a contract is concentrated in nonfinancial assets, then all of the financial assets promised to the counterparty are in substance nonfinancial assets within the scope of Subtopic 610-20. This amendment also clarifies that nonfinancial assets within the scope of Subtopic 610-20 may include nonfinancial assets transferred within a legal entity to a counterparty. For example, a parent company may transfer control of nonfinancial assets by transferring ownership interests in a consolidated subsidiary. ASU 2017-05 is effective for periods beginning after December 15, 2017, with early application permitted for fiscal years beginning after December 15, 2016. We are currently evaluating the impact of ASU 2017-05 on our consolidated financial statements.

Note 4.3. Agreements and Transactions with Related Parties

Transactions with Our Advisor

We have an advisory agreement with our Advisor whereby our Advisor performs certain services for us under a fee arrangement, including the identification, evaluation, negotiation, purchase, and disposition of real estate and related assets and mortgage loans; day-to-day management; and the performance of certain administrative duties. We also reimburse our Advisor for general and administrative duties performed on our behalf. The advisory agreement has a term of one year and may be renewed for successive one-year periods. We may terminate the advisory agreement upon 60 days’ written notice without cause or penalty.

The following tables present a summary of fees we paid, expenses we reimbursed, and distributions we made to our Advisor and other affiliates ~~which excludes the fees that impact equity as further disclosed below the tables,~~ in accordance with the terms of the relevant agreements (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended June 30,				Six Months Ended June 30,
	2016		2015		2016		2015		2017		2016		2017		2016
Amounts Included in the Consolidated Statements of Operations
Asset management fees	$	2,547	$	2,098	$	7,424	$	5,244	$	2,767	$	2,468	$	5,476	$	4,877
Available Cash Distributions	1,662		1,705		5,319		4,021		2,186		2,380		3,861		3,657
Personnel and overhead reimbursements	601		409		2,210		852		787		740		1,569		1,609
Interest expense on deferred acquisition fees and accretion of interest on annual distribution and shareholder servicing fee	203		101		631		274
Stock-based compensation	100		100		100		100
Interest expense on deferred acquisition fees, interfund loan, and accretion of interest on annual distribution and shareholder servicing fee									319		188		620		428
Director compensation									53		53		105		105
Acquisition expenses	—		6,851		3,484		25,532		—		2,322		—		3,484
Annual distribution and shareholder servicing fee ^(a)	—		671		—		1,836
	$	5,113	$	11,935	$	19,168	$	37,859	$	6,112	$	8,151	$	11,631	$	14,160

Acquisition Fees Capitalized
Personnel and overhead reimbursements									$	2	$	73	$	184	$	248
Current acquisition fees	$	1,166	$	677	$	2,987	$	7,052	—		452		1,393		1,821
Deferred acquisition fees	933		542		2,390		5,641		—		362		1,114		1,457
Capitalized personnel and overhead reimbursements	35		—		283		—
	$	2,134	$	1,219	$	5,660	$	12,693	$	2	$	887	$	2,691	$	3,526

~~___________~~


~~(a)~~	For the three and nine months ended September 30, 2016, we paid $0.6 million and $1.9 million, respectively, related to the annual distribution and shareholder servicing fee, which, beginning in the fourth quarter of 2015, is accounted for as a reduction in our shareholder servicing fee liability and additional paid-in capital in our consolidated financial statements.

CPA^®:18 – Global 6/30/2017 10-Q– 11

Notes to Consolidated Financial Statements (Unaudited)

The following table presents a summary of amounts included in Due to affiliate in the consolidated financial statements (in thousands):

September 30, 2016 December 31, 2015
Due to Affiliate
Deferred acquisition fees, including interest $ 16,255
$ 26,747
Shareholder servicing fee liability 7,868
9,394
Accounts payable and other 2,178
3,872
Asset management fees payable 846
813
Current acquisition fees 186
3,148
$ 27,333
$ 43,974

~~CPA~~^®~~:18 – Global 9/30/2016 10-Q~~– 12

~~Notes to Consolidated Financial Statements (Unaudited)~~

~~Organization and Offering Costs~~

Pursuant to the advisory agreement, we were liable for certain expenses related to our initial public offering, including filing, legal, accounting, printing, advertising, transfer agent, and escrow fees, which were deducted from the gross proceeds of the offering. We reimbursed Carey Financial LLC, or Carey Financial, our dealer manager and an affiliate of our Advisor (who may then reimburse selected dealers) for reasonable bona fide due diligence expenses incurred that were supported by a detailed and itemized invoice. Total underwriting compensation paid in connection with our offering, including selling commissions and the dealer manager fee, and reimbursements made by Carey Financial to selected dealers and investment advisors, did not exceed the limitations prescribed by the Financial Industry Regulatory Authority, Inc., the regulator for broker-dealers like Carey Financial, which limit underwriting compensation to 10% of gross offering proceeds. Our Advisor agreed to be responsible for the repayment of organization and offering expenses (excluding selling commissions and dealer manager fees paid to Carey Financial and selected dealers and fees paid and expenses reimbursed to selected dealers) that exceeded, in the aggregate, 1.5% of the gross proceeds from our initial public offering. From inception and through September 30, 2016, our Advisor incurred organization and offering costs of $8.7 million on our behalf, all of which we were obligated to pay because such costs did not exceed 1.5% of the gross proceeds from our initial public offering. As a result, we have fully repaid our Advisor for such costs, which we have charged to stockholders’ equity in our consolidated financial statements.



	June 30, 2017		December 31, 2016
Due to Affiliate
Loan from WPC, including accrued interest	$	34,569	$	27,580
Deferred acquisition fees, including accrued interest	9,150		15,305
Shareholder servicing fee liability	6,560		7,422
Accounts payable and other	2,494		2,454
Asset management fees payable	922		866
Current acquisition fees	7		84
	$	53,702	$	53,711

Loans from WPC

In January 2013, our board of directors and the board of directors of WPC approved unsecured loans from WPC to us of up to $100.0 million, in the aggregate, at a rate equal to the rate at which WPC was able to borrow funds under its senior credit facility, for the purpose of facilitating acquisitions approved by our Advisor’s investment committee that we would not otherwise have had sufficient available funds to complete. All loans were made solely at the discretion of WPC’s management. This line of credit with WPC was terminated in January 2016. In July 2016, our board of directors and the board of directors of WPC approved unsecured loans from WPC to us, at the sole discretion of WPC’s management, of up to $50.0 million in the aggregate, at a rate equal to the rate at which WPC can borrow funds under its senior credit facility, for acquisition funding purposes. ~~We did not borrow any funds~~

On October 31, 2016, we borrowed $27.5 million from WPC ~~during~~to partially finance a new investment, and that amount remained outstanding at December 31, 2016. The annual interest rate equaled London Interbank Offered Rate, or LIBOR, as of the ~~three~~loan date plus 1.1% through February 22, 2017. After that date, the annual interest rate equals LIBOR plus 1.0%, reflecting the lower rate available under WPC’s amended and ~~nine~~restated senior credit facility. The scheduled maturity date of the loan is October 31, 2017.

On May 15, 2017, we borrowed an additional $11.2 million from WPC to partially finance the final payment to the developer for a build-to-suit project in Eindhoven, the Netherlands (Note 4). The scheduled maturity date of the loan is May 15, 2018. During the six months ended ~~September~~June 30, ~~2016 or 2015, nor did~~2017, we ~~have any amounts~~repaid $4.5 million to WPC, and as a result, a total of $34.6 million remains outstanding, including accrued interest, to WPC at ~~September~~June 30, ~~2016 or December 31, 2015. See~~ 2017.

Subsequent to June 30, 2017, we repaid an additional $15.2 million of loans outstanding to WPC (Note 1413~~, Subsequent Events.~~).

Asset Management Fees

Pursuant to the advisory agreement, our Advisor is entitled to an annual asset management fee ranging from 0.5% to 1.5%, depending on the type of investment and based on the average market value or average equity value, as applicable, of our investments. ~~We amended the advisory agreement in 2015, so that the asset~~Asset management fees are payable in cash and/or shares of our Class A common stock at our option, after consultation with our Advisor. If our Advisor receives all or a portion of its fees in shares, the number of shares issued is determined by dividing the dollar amount of fees by our most recently published estimated net asset value per share, or NAV, per Class A share which was ~~published in August 2016 and estimated to be~~ $7.90 ~~for Class A common stock~~ as of ~~June 30, 2016 (before our initial NAV was published in~~ March ~~2016, as was the case at December~~ 31, ~~2015, we used the offering price of our Class A shares of $10.00 per share).~~2017. For ~~both~~ the three and ~~nine~~six months ended ~~September~~June 30, ~~2016 and 2015,~~2017, our Advisor received its asset management fees in shares of our Class A common ~~stock, which is a non-cash financing activity.~~stock. At ~~September~~June 30, ~~2016,~~2017, our Advisor owned ~~1,889,683~~2,915,292 shares, or ~~1.4%~~2.1%, of our Class A common stock outstanding. Asset management fees are included in Property expenses in the consolidated financial statements.

~~Selling Commissions and Dealer Manager Fees~~

Pursuant to our dealer manager agreement, Carey Financial received a selling commission in connection with our initial public offering of $0.70 and $0.14 per share sold and a dealer manager fee of $0.30 and $0.21 per share sold for the Class A and Class C common stock, respectively. Our initial public offering closed on April 2, 2015. These amounts were recorded in Additional paid-in capital in the consolidated financial statements. We recorded selling commissions and dealer manager fees of $107.9 million on a cumulative basis through September 30, 2016.

~~Annual Distribution and Shareholder Servicing Fee~~

Carey Financial also receives an annual distribution and shareholder servicing fee in connection with our Class C common stock, which it may re-allow to selected dealers. The amount of the annual distribution and shareholder servicing fee was initially 1.0% of the offering price per share of our Class C common stock before we began reporting our NAV, but is now 1.0% of the most recently published NAV of our Class C common stock, which was published in August 2016 and estimated to be $7.90 for Class C common stock as of June 30, 2016. The annual distribution and shareholder servicing fee accrues daily and is

CPA^®:18 – Global 9/6/30/~~2016~~2017 10-Q – 1312

Notes to Consolidated Financial Statements (Unaudited)

Annual Distribution and Shareholder Servicing Fee

Carey Financial LLC, or Carey Financial, the broker-dealer subsidiary of our Advisor, received an annual distribution and shareholder servicing fee from us in connection with our Class C common stock, which it may have re-allowed to selected dealers. The amount of the annual distribution and shareholder servicing fee is 1.0% of the most recently published NAV of our Class C common stock. The annual distribution and shareholder servicing fee accrues daily and is payable quarterly in arrears. We will no longer incur the annual distribution and shareholder servicing fee beginning on the date at which, in the aggregate, underwriting compensation from all sources, including the annual distribution and shareholder servicing fee, any organizational and offering fee paid for underwriting and underwriting compensation paid by WPC and its affiliates, reaches 10.0% of the gross proceeds from our initial public offering, which it ~~has~~had not yet ~~reached.~~reached as of June 30, 2017. At ~~September~~June 30, ~~2016~~2017 and December 31, ~~2015,~~2016, we ~~had~~recorded a liability of ~~$7.9~~$6.6 million and ~~$9.4~~$7.4 million, respectively, within Due to affiliate in the consolidated financial statements to reflect the present value of the estimated future payments ~~that we expect to pay Carey Financial.~~of the annual distribution and shareholder servicing fee.

Acquisition and Disposition Fees

Our Advisor receives acquisition fees, a portion of which is payable upon acquisition, while the remaining portion is subordinated to a preferred return of a non-compounded cumulative distribution of 5.0% per annum (based initially on our invested capital). The initial acquisition fee and subordinated acquisition fee are 2.5% and 2.0%, respectively, of the aggregate total cost of our portion of each investment for all investments, other than those in ~~readily-marketable~~readily marketable real estate securities purchased in the secondary market, for which our Advisor will not receive any acquisition fees. Deferred acquisition fees are scheduled to be paid in three equal annual installments following the quarter in which a property was purchased and are subject to the preferred return described above. The preferred return was achieved as of the periods ended ~~September~~June 30, ~~2016~~2017 and December 31, ~~2015.~~2016. Unpaid deferred acquisition fees are included in Due to affiliate in the consolidated financial statements and bear interest at an annual rate of 2%2.0%. The cumulative total acquisition costs, including acquisition fees paid to the advisor, may not exceed 6.0% of the aggregate contract purchase price of all investments, which is measured at the end of each year.

In addition, pursuant to the advisory agreement, our Advisor may be entitled to receive a disposition fee equal to the lesser of (i) 50.0% of the competitive real estate commission (as defined in the advisory agreement) or (ii) 3.0% of the contract sales price of the investment being sold. These fees are paid at the discretion of our board of directors.

Personnel and Overhead Reimbursements

Under the terms of the advisory agreement, our Advisor allocates a portion of its personnel and overhead expenses to us and the other entities that are managed by WPC and its affiliates, including Corporate Property Associates 17 – Global, ~~Incorporated,~~ or CPA^®:17 – Global; Carey Watermark Investors Incorporated, or CWI 1; Carey Watermark Investors 2 Incorporated, or CWI 2; Carey Credit Income Fund, or CCIF; and Carey European ~~Student~~ Housing Fund I L.P., or CESH I.I; which are collectively referred to as the Managed Programs. Our Advisor allocates these expenses to us on the basis of our trailing four quarters of reported revenues ~~and~~in comparison to those of WPC and other entities managed by WPC and its affiliates.

We reimburse our Advisor for various expenses it incurs in the course of providing services to us. We reimburse certain third-party expenses paid by our Advisor on our behalf, including property-specific costs, professional fees, office expenses, and business development expenses. In addition, we reimburse our Advisor for the allocated costs of personnel and overhead in managing our day-to-day operations, including accounting services, stockholder services, corporate management, and property management and operations. We do not reimburse our Advisor for the cost of personnel if these personnel provide services for transactions for which our Advisor receives a transaction fee, such as for acquisitions and dispositions. Under the advisory agreement currently in place, the amount of applicable personnel costs allocated to us was capped at ~~2.4% for 2015 and~~ 2.2% for 2016 of pro rata lease revenues for ~~each~~the year. Beginning in 2017, the cap decreases to 2.0% of pro rata lease revenues for ~~that~~the year. Costs related to our Advisor’s legal transactions group are based on a schedule of expenses relating to services performed for different types of transactions, such as financing, lease amendments, and dispositions, among other categories, and includes 0.25% of the total investment cost of an acquisition. In general, personnel and overhead reimbursements are included in General and administrative expenses in the consolidated financial statements. However, we capitalize certain of the costs related to our Advisor’s legal transactions group if the costs relate to a transaction that is not considered to be a business combination.

CPA^®:18 – Global 6/30/2017 10-Q– 13

Notes to Consolidated Financial Statements (Unaudited)

Excess Operating Expenses

Our Advisor is obligated to reimburse us for the amount by which our operating expenses exceeds the “2%/25% guidelines” (the greater of 2% of average invested assets or 25% of net income) as defined in the advisory agreement for any 12-month period, subject to certain conditions. For the most recent four trailing quarters, our operating expenses were below this threshold.

~~CPA~~^®~~:18 – Global 9/30/2016 10-Q~~– 14

~~Notes to Consolidated Financial Statements (Unaudited)~~

Available Cash Distributions

WPC’s interest in the Operating Partnership entitles it to receive distributions of 10.0% of the available cash generated by the Operating Partnership, referred to as the Available Cash Distribution, which is defined as cash generated from operations, excluding capital proceeds, as reduced by operating expenses and debt service, excluding prepayments and balloon payments. Available Cash Distributions are included in Net income attributable to noncontrolling interests in the consolidated financial statements.

~~Jointly-Owned~~Jointly Owned Investments and Other Transactions with our Affiliates

At ~~September~~June 30, ~~2016,~~2017, we owned interests ranging from 50% to 97% in ~~jointly-owned~~jointly owned investments, with the remaining interests held by affiliates or by third parties. We consolidate all of these joint ventures with exception to our sole equity investment (Note 54), which we account for under the equity method of accounting. Additionally, no other parties hold any rights that overcome our control. We account for the minority share of these investments as noncontrolling interests.

Note ~~5. Net Investments in Properties and~~4. Real Estate, Operating Real Estate, Real Estate Under Construction, and Equity Investment in Real Estate

Real Estate

Real estate, which consists of land and buildings leased to others, at cost, and which are subject to operating leases, is summarized as follows (in thousands):


	September 30, 2016			December 31, 2015			June 30, 2017			December 31, 2016
Land	$	179,564		$	173,094		$	191,645		$	173,184
Buildings and improvements	844,679			813,480			971,634			817,626
Less: Accumulated depreciation	(51,243		)	(31,467		)	(71,021		)	(55,980		)
	$	973,000		$	955,107		$	1,092,258		$	934,830

The carrying value of our Real estate increased by ~~$21.9~~$36.6 million from December 31, ~~2015~~2016 to ~~September~~June 30, ~~2016,~~2017, due to the weakening of the U.S. dollar relative to foreign currencies (primarily the euro) during the period.

Depreciation expense, including the effect of foreign currency translation, on our real estate was $6.7 million and $6.4 million for the three months ended June 30, 2017 and 2016, respectively, and $13.0 million and $12.8 million for the six months ended June 30, 2017 and 2016, respectively. Accumulated depreciation of real estate is included in Accumulated depreciation and amortization in the consolidated financial statements.

Acquisition of Real Estate During 2017

On March 14, 2017, we acquired a 90% controlling interest in a warehouse facility in Iowa City, Iowa, which was deemed to be an asset acquisition, at a total cost of $8.2 million, including net lease intangibles of $1.6 million (Note 6) and acquisition-related costs of $0.4 million that were capitalized. The seller retained a 10% interest in the property, which is the equivalent of $0.8 million of the purchase price.

CPA^®:18 – Global 6/30/2017 10-Q– 14

Notes to Consolidated Financial Statements (Unaudited)

Operating Real Estate

Operating real estate, which consists of our self-storage and multi-family properties, at cost, is summarized as follows (in thousands):


	September 30, 2016			December 31, 2015			June 30, 2017			December 31, 2016
Land	$	100,616		$	86,016		$	106,037		$	105,631
Buildings and improvements	472,737			404,836			507,962			500,927
Less: Accumulated depreciation	(22,690		)	(10,727		)	(35,901		)	(26,937		)
	$	550,663		$	480,125		$	578,098		$	579,621

The carrying value of our Operating real estate increased by $2.4 million from December 31, 2016 to June 30, 2017, due to the weakening of the U.S. dollar relative to foreign currencies during the period.

Depreciation expense, including the effect of foreign currency translation, on our operating real estate was ~~$10.6~~$4.5 million and ~~$8.6~~$4.1 million for the three months ended ~~September~~June 30, ~~2016~~2017 and ~~2015,~~2016, respectively, and ~~$31.2~~$8.9 million and ~~$22.0~~$7.8 million for the ~~nine~~six months ended ~~September~~June 30, 2017 and 2016, ~~and 2015,~~ respectively.

~~Acquisitions of Real Estate and Operating Real Estate During 2016~~

~~Asset Acquisition~~

On February 19, 2016, we invested in a build-to-suit joint venture with a third party for a university complex development site located in Accra, Ghana for $6.5 million, which includes capitalized acquisition costs of $2.6 million. Upon completion of this project, which is estimated to be in 2018, our total investment is expected to be approximately $65.7 million. We deemed this investment to be a VIE since the joint venture does not have sufficient equity at risk. Additionally, we consolidate the entity, since we currently wholly own and control the joint venture. See Real Estate Under Construction below for more details.

~~CPA~~^®~~:18 – Global 9/30/2016 10-Q~~– 15

~~Notes to Consolidated Financial Statements (Unaudited)~~

In connection with the above project, on February 19, 2016, the joint venture obtained third-party financing (subject to the tenant obtaining a letter of credit, which has not yet occurred) in an amount up to $41.0 million, with an estimated interest rate based on the U.S. treasury rate plus 300 basis points. As of September 30, 2016, we had no amount outstanding under this financing arrangement. In addition, the joint venture has procured a policy of political risk insurance on its equity investment, which is subject to coverage-specific limits and other conditions.

~~Business Combinations~~ — ~~Self-Storage Properties~~

~~During the nine months ended September 30, 2016, we acquired the following four self-storage investments, for a total of $43.0 million:~~

~~$20.3 million for five facilities, including three in Delaware, one in Milford, Massachusetts, and one in Washington D.C., on April 11, 2016;~~

~~$11.0 million for a facility in Gilroy, California on February 17, 2016;~~

~~$5.6 million for a facility in Avondale, Louisiana on January 14, 2016; and~~

~~$6.1 million for a facility in Kissimmee, Florida on January 14, 2016.~~

In connection with these self-storage property transactions, we incurred acquisition expenses totaling $4.7 million, which are included in Acquisition expenses in the consolidated financial statements.

During the nine months ended September 30, 2016, we obtained non-recourse mortgage loans totaling $108.3 million, of which $13.8 million relate to our 2016 acquisitions and the remainder related to our 2015 acquisitions. In addition, we assumed certain non-recourse mortgage loans totaling $27.9 million, which related to the properties we acquired on April 11, 2016 (~~Note 10~~).

~~Summary of Assets Acquired and Liabilities Assumed~~

The following tables present a summary of assets acquired and liabilities assumed in our business combinations at the date of acquisition, and revenues and earnings thereon since their respective dates of acquisition through ~~September 30, 2016~~ ~~(in thousands):~~

Self-Storage Properties ^(a)
Cash consideration $ 43,023
Assets acquired at fair value:
Land $ 11,573
Buildings 51,231
In-place lease intangible assets 8,158
Other assets acquired 447
71,409
Liabilities assumed at fair value:
Mortgages assumed (27,925 )
Other liabilities assumed (461 )
(28,386 )
Total identifiable net assets $ 43,023

Self-Storage Properties
Respective Acquisition dates through September 30, 2016
Revenues $ 4,052

Net loss $ (6,078 )
Net loss attributable to CPA^®:18 – Global
$ (6,078 )

~~___________~~

~~CPA~~^®~~:18 – Global 9/30/2016 10-Q~~– 16

~~Notes to Consolidated Financial Statements (Unaudited)~~

~~(a)~~

The purchase price for each transaction was allocated to the assets acquired and liabilities assumed based upon their preliminary fair values. The information in this table is based on the best estimates of management as of the date of this Report. We are in the process of finalizing our assessment of the fair value of the assets acquired and liabilities assumed. Accordingly, the fair value of these assets acquired and liabilities assumed are subject to change.

Real Estate Under Construction

The following table provides the activity of our Real estate under construction (in thousands):


	Nine Months Ended September 30, 2016			Six Months Ended June 30, 2017
Beginning balance	$	131,930		$	182,612
Capitalized funds	93,575			72,802
Capitalized interest	5,137
Foreign currency translation adjustments	(2,839		)	11,997
Placed into service	(29,865		)	(130,040		)
Capitalized interest				3,170
Ending balance	$	197,938		$	140,541

Capitalized Funds

On May 17, 2017, we made our final payment to the developer for the build-to-suit project located in Eindhoven, the Netherlands for $18.7 million, which was based on the exchange rate of the euro on the date of the acquisition. The payment was included in the expected total investment amount when the first draw of the build-to-suit was funded in March 2015. Additionally, we also recorded $9.4 million of deferred tax liabilities in connection with our investment in this project. Simultaneous with the payment to the developer, the project was completed and placed into service.

During the six months ended June 30, 2017, construction commenced on one of our previous build-to-suit investments (Note 5). The net investment of $10.7 million was reclassified to Real estate under construction from Net investments in direct financing leases during the six months ended June 30, 2017.

Ghana — On February 19, 2016, we invested in a build-to-suit joint venture with a third party for a university complex development site located in Accra, Ghana. As of June 30, 2017, total capitalized funds related to this investment were $32.5 million, inclusive of accrued construction costs of $3.1 million and the effect of recording deferred tax liabilities of $3.7 million.

At the time of the investment, the joint venture obtained third-party financing in an amount up to $41.0 million from the Overseas Private Investment Corporation (“OPIC”), a financial institution of the U.S. Government, with an estimated interest rate based on the U.S. Treasury rate plus 300 basis points. Funding of this loan is subject to the tenant obtaining a letter of credit, which to date has not occurred. Because the tenant has not obtained the required letter of credit, it is in default under its concession agreement with us, and we are currently unable to estimate when this project will be completed, if at all. As a result, as of June 30, 2017, we had no amount outstanding under this financing arrangement. If the project is completed, our total investment is expected to be approximately $65.7 million.

CPA^®:18 – Global 6/30/2017 10-Q– 15

Notes to Consolidated Financial Statements (Unaudited)

We have evaluated this investment for impairment and probability-weighted different possible scenarios in estimating future undiscounted cash flows, including payment from the tenant or through the insurance policy that we have with regard to the completion of this project. Because we believe there is a high probability that we will recover the full amount we have invested, we have not recorded any impairment charge in connection with this investment as of June 30, 2017, although recovery may take a period of time from the date a claim is filed. We will continue to monitor the investment for impairment.

During the ~~nine~~six months ended ~~September~~June 30, ~~2016,~~2017, total capitalized funds primarily related to our build-to-suit projects, which were comprised primarily of initial funding of ~~$6.5~~$20.0 million and construction draws of ~~$87.1~~$37.7 million. Capitalized funds include accrued costs of ~~$5.7~~$4.3 million, which ~~are~~is a non-cash investing activity.

Capitalized Interest —

Capitalized interest includes amortization of the mortgage discount and deferred financing costs and interest incurred during construction, which totaled ~~$5.1~~$3.2 million during the ~~nine~~six months ended ~~September~~June 30, ~~2016~~2017 and is a non-cash investing activity. ~~Of that total, $0.3 million of capitalized interest relates to our equity investment in real estate.~~

Placed into Service —

During the ~~nine~~six months ended ~~September~~June 30, ~~2016,~~2017, we placed into service a partially completed student-housing development and two build-to-suit ~~expansion~~ projects ~~and one partially completed student housing development~~ totaling ~~$29.9~~$130.0 million, which is a non-cash investing activity. ~~Of that total, $15.1 million was reclassified to Operating real estate, at cost and $14.8 million was reclassified to Real estate, at cost.~~

Ending Balance—

At ~~September~~June 30, ~~2016,~~2017, we had ~~six~~five open build-to-suit projects ~~and one open build-to-suit expansion project~~ with aggregate unfunded commitments ~~totaling~~of approximately ~~$176.4 million, which included $22.4 million related to our equity investment. At September 30, 2016, the aggregate unfunded commitments related to our VIEs totaled $169.2~~$119.2 million.

Equity Investment in Real Estate

We have an interest in an unconsolidated investment in our Self Storage segment that relates to a joint venture ~~project~~ for the development offour self-storage facilities in Canada. This investment is ~~jointly-owned~~jointly owned with a third party, which is also ~~serves as~~ the general partner. Our ownership interest in the joint venture is 90%; the joint-venture partner is funding its equity interest with the distributions they are eligible to receive upon the properties being placed into service. As of June 30, 2017, the joint-venture partner had not funded their 10% equity interest. We do not consolidate this entity because we are not the primary beneficiary and the nature of our involvement in the activities of the entity allows us to exercise significant influence but does not give us power over decisions that significantly affect the economic performance of the entity.

On ~~May 2, 2016,~~January 26, 2017, the joint venture purchased a vacant parcel of land in ~~Vaughan,~~Toronto, Ontario for ~~$2.0~~$5.1 million, which is based on the exchange rate of the Canadian dollar at the date of acquisition. This parcel of land will be the site of our ~~third~~fourth self-storage development in Canada as a part of this joint venture.

~~On July 1, 2016,~~During the six months ended June 30, 2017, we commenced operations in ~~one~~two Canadian self-storage ~~facility~~facilities upon the completion of a distinct ~~phase~~phases of the overall development, and as a result, ~~$2.9~~placed $9.3 million and $10.1 million of the total ~~project was placed~~amounts for these projects into service. During ~~both~~ the three and ~~nine~~six months ended ~~September~~June 30, ~~2016,~~2017, we incurred losses of ~~less than $0.1~~$0.2 million and $0.3 million, respectively, relating to ~~this project,~~these distinct phases of the projects, which isare included in ~~Other income and (expenses)~~Equity in losses of equity method investment in real estate on our consolidated financial statements.

At ~~September~~June 30, ~~2016~~2017 and December 31, ~~2015,~~2016, our total equity investment balance for these properties was ~~$14.5~~$20.8 million and ~~$12.6~~$14.7 million, respectively, and the joint venture had total third-party recourse debt of ~~$10.7~~$17.9 million and ~~$0.1~~$13.8 million, respectively. At June 30, 2017, the unfunded commitments for these build-to-suit projects totaled approximately $28.3 million.

CPA^®:18 – Global 9/6/30/~~2016~~2017 10-Q – 1716

Notes to Consolidated Financial Statements (Unaudited)

Note 6.5. 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 Notes receivable and our Net investments in direct financing ~~leases and our Note receivable.~~leases. Operating leases are not included in finance receivables as such amounts are not recognized as an asset in the consolidated financial statements.

Notes Receivable

Our Notes receivable at both June 30, 2017 and December 31, 2016 consist of a $28.0 million mezzanine tranche of 10-year commercial mortgage-backed securities on the Cipriani banquet halls in New York, New York and a $38.5 million mezzanine loan collateralized by 27 retail stores in Minnesota, Wisconsin, and Iowa leased to Mills Fleet Farm Group LLC. We have and will continue to receive interest-only payments on each of these loans through maturity in July 2024 and October 2018, respectively. As a result, the balance for the receivables at June 30, 2017 remained $28.0 million and $38.5 million, respectively.

Net Investments in Direct Financing Leases

Interest income from direct financing leases was ~~$1.1~~$0.9 million and ~~$1.0~~$1.2 million for the three months ended ~~September~~June 30, ~~2016~~2017 and ~~2015,~~2016, respectively, and ~~$3.5~~$1.9 million and ~~$3.1~~$2.3 million for the ~~nine~~six months ended ~~September~~June 30, ~~2016~~2017 and ~~2015,~~2016, respectively.

~~Disposition~~

~~On December 30, 2013 and March 7, 2014,~~In 2015, we ~~entered into domestic net lease financing transactions~~invested in a joint venture with ~~subsidiaries of Crowne Group Inc., from whom we acquired~~ a ~~total of five industrial facilities~~third party to purchase an office building located in ~~South Carolina, Indiana,~~Cardiff, United Kingdom to be redeveloped into student-housing. The existing tenant vacated the building on January 31, 2017. Upon lease termination, construction commenced, and ~~Michigan. In August 2015,~~ the ~~tenants exercised their purchase options and we sold these five industrial facilities back~~net investment of $10.7 million was reclassified to Real estate under construction during the ~~subsidiaries of Crowne Group Inc. for $35.7 million. During the three and nine~~six months ended ~~September~~June 30, 2015, we recognized a gain on sale of $6.7 million, which is included in Gain on sale of real estate, net of tax in our consolidated financial statements. Simultaneously, we paid off the existing mortgage loan that encumbered all of these properties2017 (Note 104) and terminated the interest rate swap agreement that was in place. As a result, we recognized a $1.1 million loss on extinguishment of debt within Other income and (expenses) on our consolidated financial statements..

Credit Quality of Finance Receivables

We generally seek investments in facilities that we believe are critical to a tenant’s business and ~~that we believe~~ have a low risk of tenant default. At both ~~September~~June 30, ~~2016~~2017 and December 31, ~~2015,~~2016, we had no significant ~~balances of our~~ finance ~~receivables~~receivable balances that were past due and we had not established any allowances for credit losses. Additionally, there were no modifications of finance receivables during the ~~nine~~six months ended ~~September~~June 30, ~~2016 or the year ended December 31, 2015.~~2017. 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. The credit quality evaluation of our finance receivables was last updated in the ~~third~~second quarter of ~~2016.~~2017.

A summary of our finance receivables by internal credit quality rating is as follows (dollars in thousands):


	Number of Tenants/Obligors at		Carrying Value at				Number of Tenants/Obligors at		Carrying Value at
Internal Credit Quality Indicator	September 30, 2016	December 31, 2015	September 30, 2016		December 31, 2015		June 30, 2017	December 31, 2016	June 30, 2017		December 31, 2016
1	1	1	$	11,177	$	12,684	—	1	$	—	$	10,516
2	1	1	9,135		9,065		1	1	9,193		9,154
3	4	4	57,870		58,217		2	2	29,698		29,679
4	—	—	—		—		3	3	66,824		66,747
5	—	—	—		—		—	—	—		—
	0		$	78,182	$	79,966	0		$	105,715	$	116,096

Note 7.6. Intangible Assets and Liabilities

In connection with our ~~acquisitions of properties~~investment activity (Note 54) during the ~~nine~~six months ended ~~September~~June 30, ~~2016,~~2017, we ~~have~~ recorded In-place lease intangibles of ~~$8.2~~$1.6 million that are being amortized over ~~a period of approximately two~~14.4 years. In-place lease intangibles are included in In-place lease intangible assets ~~net~~ in the consolidated financial statements. Below-market ground lease intangibles and above-market rent intangibles are included in Other intangible assets ~~net~~ in the consolidated financial statements. Below-market rent intangibles and above-market ground lease intangibles are included in Accounts payable, accrued expenses and other liabilities in the consolidated financial statements.

CPA^®:18 – Global 9/6/30/~~2016~~2017 10-Q – 1817

Notes to Consolidated Financial Statements (Unaudited)

Goodwill ~~represents~~is included in the consideration exceeding the fair value of the identifiable assets acquired and liabilities assumed for certain of our previously acquired investments that were deemed to be business combinations. Goodwill resulted primarily from recognizing deferred tax liabilities in connection with the acquisition of certain of our foreign investments.consolidated financial statements. The following table presents a reconciliation of our goodwill, which is included in our Net Lease reporting unit (in thousands):

Nine Months Ended
September 30, 2016
Balance at January 1, 2016 $ 23,389
Foreign currency translation 1,714
Balance at September 30, 2016 $ 25,103



	Six Months Ended June 30, 2017
Balance at January 1, 2017	$	23,526
Foreign currency translation	1,046
Other	708
Balance at June 30, 2017	$	25,280

Intangible assets ~~intangible~~and liabilities ~~and goodwill~~ are summarized as follows (in thousands):


	September 30, 2016									December 31, 2015										June 30, 2017									December 31, 2016
	Gross Carrying Amount			Accumulated Amortization			Net Carrying Amount			Gross Carrying Amount			Accumulated Amortization			Net Carrying Amount			Amortization Period (Years)	Gross Carrying Amount			Accumulated Amortization			Net Carrying Amount			Gross Carrying Amount			Accumulated Amortization			Net Carrying Amount
Amortizable Intangible Assets
Finite-Lived Intangible Assets
In-place lease	$	266,908		$	(75,039	)	$	191,869		$	255,510		$	(43,090	)	$	212,420		1 - 23	$	269,608		$	(100,504	)	$	169,104		$	260,469		$	(83,031	)	$	177,438
Below-market ground lease	21,416			(642		)	20,774			20,894			(325		)	20,569			15 - 99	21,894			(970		)	20,924			20,236			(706		)	19,530
Above-market rent	12,327			(2,156		)	10,171			12,174			(1,322		)	10,852			3 - 30	12,418			(2,984		)	9,434			11,846			(2,320		)	9,526
	300,651			(77,837		)	222,814			288,578			(44,737		)	243,841				303,920			(104,458		)	199,462			292,551			(86,057		)	206,494
Unamortizable Intangible Assets
Indefinite-Lived Intangible Assets
Goodwill	25,103			—			25,103			23,389			—			23,389				25,280			—			25,280			23,526			—			23,526
Total intangible assets	$	325,754		$	(77,837	)	$	247,917		$	311,967		$	(44,737	)	$	267,230			$	329,200		$	(104,458	)	$	224,742		$	316,077		$	(86,057	)	$	230,020

Amortizable Intangible Liabilities
Finite-lived Intangible Liabilities
Below-market rent	$	(15,295	)	$	2,999		$	(12,296	)	$	(15,439	)	$	1,546		$	(13,893	)	4 - 30	$	(15,384	)	$	3,914		$	(11,470	)	$	(15,192	)	$	3,234		$	(11,958	)
Above-market ground lease	(106		)	3			(103		)	(121		)	2			(119		)	81	(106		)	4			(102		)	(101		)	3			(98		)
Total intangible liabilities	$	(15,401	)	$	3,002		$	(12,399	)	$	(15,560	)	$	1,548		$	(14,012	)		$	(15,490	)	$	3,918		$	(11,572	)	$	(15,293	)	$	3,237		$	(12,056	)

Net amortization of intangibles, including the effect of foreign currency translation, was ~~$10.3~~$7.5 million and ~~$9.0~~$10.9 million for the three months ended ~~September~~June 30, ~~2016~~2017 and ~~2015,~~2016, respectively, and ~~$31.5~~$15.6 million and ~~$22.4~~$21.2 million for the ~~nine~~six months ended ~~September~~June 30, ~~2016~~2017 and ~~2015,~~2016, respectively. Amortization of below-market and above-market rent intangibles is recorded as an adjustment to Rental ~~income,~~income; amortization of below-market and above-market ground lease intangibles is included in Property ~~expenses,~~expenses; and amortization of in-place lease intangibles is included in Depreciation and amortization ~~expense.~~expense in the consolidated financial statements.

Note 8.7. 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, foreign currency forward contracts 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.

CPA^®:18 – Global 6/30/2017 10-Q– 18

Notes to Consolidated Financial Statements (Unaudited)

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 along with their weighted-average ranges.

Derivative Assets — Our derivative assets, which are included in Other assets, net in the consolidated financial statements, are comprised of foreign currency forward contracts, interest rate swaps, interest rate caps, and foreign currency collars (Note 98). These derivative

~~CPA~~^®~~:18 – Global 9/30/2016 10-Q~~– 19

~~Notes to Consolidated Financial Statements (Unaudited)~~

instruments were measured at fair value using readily observable market inputs, such as quotations on interest rates, and 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.

Derivative Liabilities — Our derivative liabilities, which are included in Accounts payable, accrued expenses and other liabilities in the consolidated financial statements, are comprised of interest rate swaps and foreign currency collars (Note 98). These derivative instruments were measured at fair value using readily observable market inputs, such as quotations on interest rates, and were classified as Level 2 because they are custom, over-the-counter contracts with various bank counterparties that are not traded in an active market.

Rent Guarantees — Our rent guarantees, which are included in Other assets, net in the consolidated financial statements, are related to three of our international investments. These rent guarantees were measured at fair value using a discounted cash flow model, and were classified as Level 3 because the model uses unobservable inputs. At ~~September~~June 30, ~~2016~~2017 and December 31, ~~2015,~~2016, our rent guarantees had a fair value of ~~$0.9~~$0.6 million and ~~$1.3~~$0.5 million, respectively. We determined the fair value of the rent guarantees based on an estimate of discounted cash flows using a discount rate that ranged from 7% to 9% and a growth rate that ranged from 1% to 2%, which are considered significant unobservable inputs. Significant increases or decreases to these inputs in isolation would result in a significant change in the fair value measurement. During the three and ~~nine~~six months ended ~~September~~June 30, 2017, we recognized $0.4 million and $0.5 million, respectively, of mark-to-market gains related to these rent guarantees within Other income and (expenses) on our consolidated financial statements. During the three and six months ended June 30, 2016, we recognized ~~$0.3~~$1.0 million and ~~$1.1~~$0.8 million, respectively, of mark-to-market gains related to these rent guarantees within Other income and (expenses) on our consolidated financial statements.

We did not have any transfers into or out of Level 1, Level 2, and Level 3 ~~category of~~ measurements during the three and ~~nine~~six months ended ~~September~~June 30, ~~2016~~2017 and ~~2015.~~2016. Gains and losses (realized and unrealized) included in earnings are reported inwithin Other income and (expenses) ~~in the~~on our consolidated financial statements.

Our other financial instruments had the following carrying values and fair values as of the dates shown (dollars in thousands):

September 30, 2016 December 31, 2015
Level Carrying Value Fair Value Carrying Value Fair Value
Debt ^{(a) (b)}
3 $ 1,145,632
$ 1,192,071
$ 999,213
$ 1,022,641
Note receivable ^(c)
3 28,000
28,400
28,000
28,400



		June 30, 2017				December 31, 2016
	Level	Carrying Value		Fair Value		Carrying Value		Fair Value
Debt, net ^{(a) (b)}	3	$	1,210,015	$	1,233,288	$	1,157,411	$	1,177,409
Notes receivable ^(c)	3	66,500		68,450		66,500		68,450

___________

(a)

~~In accordance with ASU 2015-03, we reclassified deferred financing costs from Other assets,~~Debt, net toconsists of Non-recourse debt, net and Bonds payable, ~~net as of December 31, 2015 (Note 3~~).net. At ~~September~~June 30, ~~2016~~2017 and December 31, ~~2015,~~2016, the carrying value of Non-recourse debt, net includes unamortized deferred financing costs of ~~$8.4~~$7.9 million and ~~$8.3~~$7.6 million, respectively. At both ~~September~~June 30, ~~2016~~2017 and December 31, ~~2015,~~2016, the carrying value of Bonds payable, net includes unamortized deferred financing costs of ~~$0.7 million.~~$0.9 million (Note 9).

(b)

We determined the estimated fair value of our ~~non-recourse~~Non-recourse debt and ~~bonds~~Bonds payable 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 take into account 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.

(c)

We determined the estimated fair value of our ~~note~~Notes receivable using a discounted cash flow model with rates that take into account the credit of the tenant/obligor, order of payment tranches, and interest rate risk. We also considered the value of the underlying collateral, taking into account the quality of the collateral, the credit quality of the tenant/obligor, the time until maturity, and the current market interest rate.

We estimated that our other financial assets and liabilities (excluding net investments in direct financing leases) had fair values that approximated their carrying values at both ~~September~~June 30, ~~2016~~2017 and December 31, ~~2015.~~2016.

CPA^®:18 – Global 9/6/30/~~2016~~2017 10-Q – 2019

Notes to Consolidated Financial Statements (Unaudited)

Note 9.8. 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 ~~assets and~~ liabilities. 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, as well as changes in the value of our other investments due to changes in interest rates or other market factors. We own international investments, primarily in Europe, 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.~~contracts. 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 a derivative designated, and that qualified, as a cash flow hedge, the effective portion of the change in fair value of the derivative is recognized in Other comprehensive income (loss) until the hedged item is recognized in earnings. For a derivative designated, and that qualified, as a net investment hedge, the effective portion of the change in its fair value and/or the net settlement of the derivative ~~are~~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 when the hedged investment is either sold or substantially liquidated.~~ The ineffective portion of the change in fair value of any derivative is immediately recognized in earnings.

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 ~~September~~June 30, ~~2016~~2017 and December 31, ~~2015~~2016, no cash collateral had been posted or received for any of our derivative positions.

~~The following table sets forth certain information regarding our derivative instruments (in thousands):~~

Derivatives Designated as Hedging Instruments Balance Sheet Location Asset Derivatives Fair Value at Liability Derivatives Fair Value at
September 30, 2016 December 31, 2015 September 30, 2016 December 31, 2015
Foreign currency forward contracts and collars Other assets, net $ 4,576
$ 7,471
$ —
$ —
Interest rate caps Other assets, net 1
17
—
—
Foreign currency collars Accounts payable, accrued expenses and other liabilities —
—
(201 ) (28 )
Interest rate swaps Accounts payable, accrued expenses and other liabilities —
—
(3,514 ) (1,568 )
$ 4,577
$ 7,488
$ (3,715 ) $ (1,596 )

CPA^®:18 – Global 9/6/30/~~2016~~2017 10-Q – 2120

Notes to Consolidated Financial Statements (Unaudited)

The following table ~~presents~~sets forth certain information regarding our derivative instruments (in thousands):



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	June 30, 2017		December 31, 2016		June 30, 2017			December 31, 2016
Foreign currency forward contracts	Other assets, net	$	3,763	$	5,502	$	—		$	—
Interest rate swaps	Other assets, net	336		393
Foreign currency collars	Other assets, net	239		1,284
Interest rate caps	Other assets, net	3		1		—			—
Foreign currency collars	Accounts payable, accrued expenses and other liabilities	—		—		(1,600		)	(33		)
Interest rate swaps	Accounts payable, accrued expenses and other liabilities	—		—		(1,138		)	(1,151		)
Total		$	4,341	$	7,180	$	(2,738	)	$	(1,184	)

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 Income (Loss) (Effective Portion)												Amount of Gain (Loss) Recognized on Derivatives in Other Comprehensive Income (Loss) (Effective Portion)
	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended June 30,						Six Months Ended June 30,
Derivatives in Cash Flow Hedging Relationships	2016			2015			2016			2015			2017			2016			2017			2016
Foreign currency forward contracts and collars	$	(1,294	)	$	835		$	(2,715	)	$	2,624
Foreign currency collars													$	(2,379	)	$	651		$	(2,613	)	$	(432	)
Foreign currency forward contracts													(1,162		)	279			(1,634		)	(989		)
Interest rate swaps	366			22			(1,947		)	524			(277		)	(832		)	(32		)	(2,313		)
Interest rate caps	—			(20		)	(16		)	(33		)	(6		)	(3		)	(2		)	(16		)
Derivatives in Net Investment Hedging Relationship ^(a)
Foreign currency forward contracts and collars	(166		)	276			(306		)	366
Foreign currency forward contracts													(88		)	69			(107		)	(132		)
Foreign currency collars													(23		)	7			(33		)	(8		)
Total	$	(1,094	)	$	1,113		$	(4,984	)	$	3,481		$	(3,935	)	$	171		$	(4,421	)	$	(3,890	)

___________


(a)	The effective portion of the ~~change~~changes in fair value ~~and the settlement~~ of these contracts ~~are~~is reported in the foreign currency translation adjustment section of Other comprehensive income (loss) ~~until the underlying investment is sold, at which time we reclassify the gain or loss to earnings.~~.

~~The following table presents the impact of our derivative instruments in the consolidated financial statements (in thousands):~~


		Amount of Gain (Loss) on Derivatives Reclassified from Other Comprehensive Income (Loss) into Income (Effective Portion)													Amount of Gain (Loss) on Derivatives Reclassified from Other Comprehensive Income (Loss) into Income (Effective Portion)
Derivatives in Cash Flow Hedging Relationships	Location of Gain (Loss) Recognized in Income	Three Months Ended September 30,						Nine Months Ended September 30,						Location of Gain (Loss) Recognized in Income	Three Months Ended June 30,						Six Months Ended June 30,
Derivatives in Cash Flow Hedging Relationships	Location of Gain (Loss) Recognized in Income	2016			2015			2016			2015			Location of Gain (Loss) Recognized in Income	2017			2016			2017			2016
Foreign currency forward contracts and collars	Other income and (expenses)	$	342		$	308		$	1,010		$	870
Foreign currency forward contracts														Other income and (expenses)	$	334		$	296		$	690		$	629
Interest rate swaps	Interest expense	(230		)	(1,401		)	(660		)	(2,001		)	Interest expense	(176		)	(217		)	(387		)	(429		)
Foreign currency collars														Other income and (expenses)	77			—			169			39
Interest rate caps	Interest expense	(1		)	—			(1		)	—			Interest expense	(10		)	(1		)	(15		)	(1		)
Total		$	111		$	(1,093	)	$	349		$	(1,131	)		$	225		$	78		$	457		$	238

CPA^®:18 – Global 6/30/2017 10-Q– 21

Notes to Consolidated Financial Statements (Unaudited)

Amounts reported in Other comprehensive income (loss) related to our interest rate swaps will be reclassified to Interest expense as interest ~~is incurred~~payments are made on our variable-rate debt. Amounts reported in Other comprehensive income (loss) related to foreign currency derivative contracts will be reclassified to Other income and (expenses) when the hedged foreign currency contracts are settled. At ~~September~~June 30, ~~2016,~~2017, we estimated that an additional ~~$0.8~~$0.5 million and ~~$1.2~~$1.0 million will be reclassified as Interest expense and Other ~~income and (expenses),~~expenses, 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													Amount of Gain (Loss) on Derivatives Recognized in Income
Derivatives Not in Cash Flow Hedging Relationships	Location of Gain (Loss) Recognized in Income	Three Months Ended September 30,						Nine Months Ended September 30,						Location of Gain (Loss) Recognized in Income	Three Months Ended June 30,						Six Months Ended June 30,
Derivatives Not in Cash Flow Hedging Relationships	Location of Gain (Loss) Recognized in Income	2016			2015			2016			2015			Location of Gain (Loss) Recognized in Income	2017			2016			2017			2016
Interest rate swaps														Interest expense	$	27		$	—		$	(22	)	$	—
Foreign currency collars	Other income and (expenses)	$	(11	)	$	—		$	(21	)	$	—		Other income and (expenses)	(25		)	3			(45		)	(10		)
Interest rate swaps	Interest expense	—			(63		)	—			(63		)
Derivatives in Cash Flow Hedging Relationships
Interest rate swaps ^(a)	Interest expense	5			—			1			—			Interest expense	7			(5		)	10			(5		)
		$	(6	)	$	(63	)	$	(20	)	$	(63	)
Foreign currency collars														Other income and (expenses)	(5		)	—			(4		)	—
Total															$	4		$	(2	)	$	(61	)	$	(15	)

__________


(a)	Relates to the ineffective portion of the hedging relationship.

~~CPA~~^®~~:18 – Global 9/30/2016 10-Q~~– 22

~~Notes to Consolidated Financial Statements (Unaudited)~~

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 attempt to obtain mortgage financing on a long-term, fixed-rate basis. However, from time to time, we or our investment partners may obtain non-recourse variable-rate mortgage loans and, as a result, 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 ~~September~~June 30, ~~2016~~2017 are summarized as follows (currency in thousands):


Interest Rate Derivatives	Number of Instruments	Notional Amount		Fair Value at September 30, 2016			Number of Instruments	Notional Amount		Fair Value at June 30, 2017 ^(a)
Interest rate swaps	7	54,255	USD	$	(3,514	)	8	61,388	USD	$	(790	)
Interest rate swap							1	10,506	EUR	(12		)
Interest rate caps	2	22,000	USD	1			3	27,700	USD	3
				$	(3,513	)				$	(799	)

___________


(a)	Fair value amount is based on the exchange rate of the euro at June 30, 2017, as applicable.

CPA^®:18 – Global 6/30/2017 10-Q– 22

Notes to Consolidated Financial Statements (Unaudited)

Foreign Currency Contracts ~~and Collars~~

We are exposed to foreign currency exchange rate movements, primarily in the euro and, to a lesser extent, the Norwegian krone. We manage foreign currency exchange rate movements by generally placing our debt service obligation on an investment in the same currency as the tenant’s rental obligation to us. This reduces our overall exposure to the net cash flow from that investment. However, we are subject to foreign currency exchange rate movements to the extent that there is a difference in the timing and amount of the rental obligation and the debt service. Realized and unrealized gains and losses recognized in earnings related to foreign currency transactions are included in Other income and (expenses) in the consolidated financial statements.

In order to hedge certain of our foreign currency cash flow exposures, we enter into foreign currency forward contracts and collars. A foreign currency forward contract is a commitment to deliver a certain amount of currency at a certain price on a specific date in the future. By entering into forward contracts and holding them to maturity, we are locked into a future currency exchange rate for the term of the contract. A foreign currency collar ~~consists of a written call option and a purchased put option to sell the foreign currency and~~ guarantees that the exchange rate of the currency will not fluctuate beyond the range of the options’ strike prices. ~~These instruments lock the range in which a foreign currency exchange rate may fluctuate.~~ Our foreign currency forward contracts and foreign currency collars have maturities of 7674 months or less.

The following table presents the foreign currency derivative contracts we had outstanding and their designations at ~~September~~June 30, ~~2016~~2017 (currency in thousands):

Foreign Currency Derivatives Number of Instruments Notional
Amount Fair Value at
September 30, 2016
Designated as Cash Flow Hedging Instruments
Foreign currency forward contracts and collars 65 28,133
EUR $ 3,049
Foreign currency forward contracts and collars 47 92,041
NOK 1,200
Designated as Net Investment Hedging Instruments
Foreign currency forward contracts and collars 7 30,513
NOK 126
$ 4,375

~~CPA~~^®~~:18 – Global 9/30/2016 10-Q~~– 23

~~Notes to Consolidated Financial Statements (Unaudited)~~



Foreign Currency Derivatives	Number of Instruments	Notional Amount		Fair Value at June 30, 2017
Designated as Cash Flow Hedging Instruments
Foreign currency forward contracts	27	10,434	EUR	$	2,455
Foreign currency collars	51	32,873	EUR	(1,500		)
Foreign currency forward contracts	21	33,249	NOK	1,042
Foreign currency collars	21	49,970	NOK	151
Designated as Net Investment Hedging Instruments
Foreign currency collars	4	24,740	NOK	164
Foreign currency forward contracts	3	5,773	NOK	90
				$	2,402

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 ~~September~~June 30, ~~2016.~~2017. At ~~September~~June 30, ~~2016,~~2017, our total credit exposure was ~~$4.2~~$3.2 million and the maximum exposure to any single counterparty was ~~$2.8~~$2.4 million.

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 ~~September~~June 30, ~~2016,~~2017, 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 ~~$3.8~~$2.7 million and ~~$1.6~~$1.2 million at ~~September~~June 30, ~~2016~~2017 and December 31, ~~2015,~~2016, respectively, which included accrued interest and any nonperformance risk adjustments. If we had breached any of these provisions at ~~September~~June 30, ~~2016~~2017 or December 31, ~~2015,~~2016, we could have been required to settle our obligations under these agreements at their aggregate termination value of ~~$4.2~~$3.0 million and ~~$1.7~~$1.3 million, respectively.

Note ~~10.~~9. Non-Recourse ~~Debt~~Mortgages and Bonds Payable

At ~~September~~June 30, ~~2016,~~2017, our debt bore interest at fixed annual rates ranging from 1.6% to 5.8% and variable contractual annual rates ranging from ~~2.2%~~1.6% to 5.1%, with maturity dates from ~~2017~~2018 to 2039.

CPA^®:18 – Global 6/30/2017 10-Q– 23

Notes to Consolidated Financial Statements (Unaudited)

Financing Activity During 2017

During the ~~nine~~six months ended ~~September~~June 30, ~~2016,~~2017, we obtained ~~or assumed several~~four non-recourse mortgage financings totaling ~~$120.4~~$23.2 million, with a weighted-average annual interest rate of ~~4.5%~~5.2% and term to maturity of ~~nine~~5.7 years. In addition, we ~~obtained~~refinanced two non-recourse mortgage loans for a ~~€48.0~~total of $17.0 million with a weighted-average interest rate of 2.6% and term to maturity of 4.5 years. We had an additional draw down of $3.9 million (based on the exchange rate of the euro at the date of the draw down) on our senior construction-to-term mortgage loan related to the development of an office building located in Eindhoven, the ~~Netherlands, which~~Netherlands. The loan bears an interest rate of Euro Interbank Offered Rate, or EURIBOR, plus 2.5% for each draw ~~down. As~~down unless EURIBOR is below zero, in which case the margin of ~~September 30, 2016, we had drawn $15.8 million on this loan, at an~~2.5% plus the liquidity spread of 0.7% for a total interest rate of ~~3.19%, which is based on the exchange rate of the euro at the date of each drawdown. Upon the~~3.2% will be applied. Subsequent to completion of the development project, this loan will be converted to a seven-year term loan, at which time it will bear a fixed interest rate of ~~1.75%~~1.8%.

In addition, during the nine months ended September 30, 2016, we entered into agreements for third-party non-recourse mortgage financing related to the following build-to-suit investments, which had no amounts drawn as of September 30, 2016:


•	~~$41.0 million that will be used to finance the construction of the university complex development site located in Accra, Ghana (Note 5), which is subject to the tenant obtaining a letter of credit and will bear an interest rate based on the U.S. treasury rate plus 300 basis points upon draw down;~~

~~€15.2 million that is expected to be available upon the substantial completion of a hotel located in Hamburg, Germany, which will bear an interest rate of 2.1% upon draw down; and~~

€12.8 million that was scheduled to become available upon the completion of the expansion of an industrial facility located in Michalovce, Slovakia, which will bear an interest rate based upon the Euro Interbank Offered Rate plus 3.1% upon draw down. This expansion was completed during the three months ended September 30, 2016, and we drew down on the mortgage proceeds on October 14, 2016.

~~In conjunction with the August 2015 sale of the Crowne Group Inc. properties (Note 6~~), we paid off the existing mortgage loans that encumbered all of these properties. The buyer paid the prepayment penalty on our behalf due to the unwinding of the related interest rate swap agreement. During the three and nine months ended September 30, 2015, we recognized a loss on extinguishment of debt of $1.1 million related to the termination of this swap within Other income and (expenses) in our consolidated financial statements.

~~CPA~~^®~~:18 – Global 9/30/2016 10-Q~~– 24

~~Notes to Consolidated Financial Statements (Unaudited)~~

Scheduled Debt Principal Payments

Scheduled debt principal payments during the remainder of ~~2016,~~2017, each of the next four calendar years following December 31, ~~2016,~~2017, and thereafter are as follows (in thousands):


Years Ending December 31,	Total			Total
2016 (remainder)	$	1,117
2017	22,668
2017 (remainder)				$	2,923
2018	27,296			28,328
2019	5,644			7,008
2020	115,415			124,385
2021				169,231
Thereafter through 2039	982,363			885,869
	1,154,503			1,217,744
Unamortized deferred financing costs				(8,747		)
Unamortized premium, net	279			1,018
Deferred financing costs ^(a)	(9,150		)
Total	$	1,145,632		$	1,210,015

~~___________~~


~~(a)~~	~~In accordance with ASU 2015-03, we reclassified deferred financing costs from Other assets, net to Non-recourse debt, net and Bonds payable, net as of December 31, 2015 (Note 3~~).

Certain amounts in the table above are based on the applicable foreign currency exchange rate at ~~September~~June 30, ~~2016.~~ 2017.

The carrying value of our Non-recourse ~~debt,~~mortgages, net and Bonds payable, net increased by ~~$14.5~~$25.2 million in the aggregate from December 31, ~~2015~~2016 to ~~September~~June 30, ~~2016,~~2017, reflecting the impact of the weakening of the U.S. dollar relative to certain foreign currencies (primarily the euro) during the same period.

Note ~~11.~~10. Commitments and Contingencies

At ~~September~~June 30, ~~2016~~2017, 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. See Note 54 for unfunded construction commitments.

~~Note 12. Loss Per Share and Equity~~

~~Basic and Diluted Loss Per Share~~

~~The following table presents loss per share (in thousands, except share and per share amounts):~~

Three Months Ended September 30, 2016 Three Months Ended September 30, 2015
Basic and Diluted Weighted-Average
Shares Outstanding Allocation of Loss Basic and Diluted Loss
Per Share
Basic and Diluted Weighted-Average
Shares Outstanding
Allocation of Loss Basic and Diluted Loss
Per Share
Class A common stock 106,279,055
$ (3,083 ) $ (0.03 ) 102,293,880
$ (7,078 ) $ (0.07 )
Class C common stock 30,205,326
(998 ) (0.03 ) 29,279,706
(2,697 ) (0.09 )
Net loss attributable to CPA^®:18 – Global
$ (4,081 ) $ (9,775 )

CPA^®:18 – Global 9/6/30/~~2016~~2017 10-Q – 2524

Notes to Consolidated Financial Statements (Unaudited)

Note 11. Net Income (Loss) Per Share and Equity

Basic and Diluted Income (Loss) Per Share

The following table presents net income (loss) per share (in thousands, except share and per share amounts):


	Nine Months Ended September 30, 2016							Nine Months Ended September 30, 2015 ^(a)							Three Months Ended June 30, 2017					Three Months Ended June 30, 2016
	Basic and Diluted Weighted-Average Shares Outstanding	Allocation of Loss			Basic and Diluted Loss Per Share			Basic and Diluted Weighted-Average Shares Outstanding	Allocation of Loss			Basic and Diluted Loss Per Share			Basic and Diluted Weighted-Average Shares Outstanding	Allocation of Net Income		Basic and Diluted Net Income Per Share		Basic and Diluted Weighted-Average Shares Outstanding	Allocation of Net Loss			Basic and Diluted Net Loss Per Share
Class A common stock	105,148,891	$	(12,569	)	$	(0.12	)	101,471,695	$	(31,659	)	$	(0.31	)	109,533,769	$	4,600	$	0.04	105,182,645	$	(7,882	)	$	(0.07	)
Class C common stock	29,964,756	(3,921		)	(0.13		)	26,925,898	(10,237		)	(0.38		)	31,030,596	1,184		0.04		29,928,571	(2,330		)	(0.08		)
Net loss attributable to CPA^®:18 – Global		$	(16,490	)					$	(41,896	)
Net income (loss) attributable to CPA^®:18 – Global																$	5,784				$	(10,212	)

~~___________~~

~~(a)~~

~~As discussed in~~ ~~Note 3, we revised our consolidated statement of operations for the three months ended March 31, 2015.~~



	Six Months Ended June 30, 2017					Six Months Ended June 30, 2016
	Basic and Diluted Weighted-Average Shares Outstanding	Allocation of Net Income		Basic and Diluted Net Income Per Share		Basic and Diluted Weighted-Average Shares Outstanding	Allocation of Net Loss			Basic and Diluted Net Loss Per Share
Class A common stock	108,998,427	$	5,179	$	0.05	104,577,599	$	(9,485	)	$	(0.09	)
Class C common stock	30,898,107	1,226		0.04		29,843,149	(2,924		)	(0.10		)
Net income (loss) attributable to CPA^®:18 – Global		$	6,405				$	(12,409	)

The allocation of Net ~~loss~~income (loss) attributable to CPA^®:18 – Global is calculated based on the basic and diluted weighted-average shares outstanding for Class A and Class C common stock for each respective period. For the three and ~~nine~~six months ended ~~September~~June 30, ~~2016,~~2017, the allocation for Class A common stock ~~excludes~~excluded $0.1 million and ~~$0.3~~$0.2 million ~~respectively,~~ of interest expense related to the accretion of interest on our annual distribution and shareholder servicing fee liability, which is only applicable to Class C common stock (Note 43). For the three and ~~nine~~six months ended ~~September~~June 30, ~~2015,~~2016, the allocation for Class A common stock ~~excludes~~excluded $0.1 million and $0.2 million of interest expense related to the accretion of interest on our annual distribution and shareholder servicing fee ~~of $0.7 million and $1.8 million, respectively,~~liability, which is only ~~allocated~~applicable to Class C common stock (Note 43).

Distributions

Distributions are declared at the discretion of our board of directors and are not guaranteed. During the three months ended ~~September~~June 30, ~~2016,~~2017, our board of directors declared quarterly distributions of $0.1563 per share for our Class A common stock and ~~$0.1376~~$0.1382 per share for our Class C common ~~stock. Distributions~~stock, which was paid on July 14, 2017 to stockholders of record on June 30, 2017, in the amount of $21.4 million.

During the six months ended June 30, 2017, our board of directors declared distributions in the aggregate amount of ~~$20.8~~$34.1 million ~~were paid on October 14, 2016 to stockholders of record on September 30, 2016.~~

~~During the nine months ended September 30, 2016, our board of directors declared quarterly distributions aggregating to a total of $49.4 million~~per share for our Class A common stock and ~~$12.2~~$8.5 million per share for our Class C common stock, which equates to ~~$0.4689~~$0.3126 and $0.2762 per share, ~~for our Class A common stock and $0.4089 per share for our Class C common stock.~~

Distributions are declared at the discretion of our board of directors and are not guaranteed. Until we fully invest the net proceeds of our initial public offering, we expect that a portion of our distributions will be paid from offering proceeds, which reduces amounts available to invest in properties and could lower our overall return.respectively.

CPA^®:18 – Global 9/6/30/~~2016~~2017 10-Q – 2625

Notes to Consolidated Financial Statements (Unaudited)

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):


	Three Months Ended September 30, 2016									Three Months Ended June 30, 2017
	Gains and Losses on Derivative Instruments			Foreign Currency Translation Adjustments			Total			Gains and Losses on Derivative Instruments			Foreign Currency Translation Adjustments			Total
Beginning balance	$	1,610		$	(51,377	)	$	(49,767	)	$	5,130		$	(63,665	)	$	(58,535	)
Other comprehensive income before reclassifications	(817		)	2,963			2,146			(3,599		)	19,541			15,942
Amounts reclassified from accumulated other comprehensive loss to:
Interest expense	231			—			231			186			—			186
Other income and (expenses)	(342		)	—			(342		)	(411		)	—			(411		)
Net current-period Other comprehensive income	(928		)	2,963			2,035			(3,824		)	19,541			15,717
Net current-period Other comprehensive loss attributable to noncontrolling interests	—			(813		)	(813		)
Net current-period Other comprehensive income attributable to noncontrolling interests										—			(2,265		)	(2,265		)
Ending balance	$	682		$	(49,227	)	$	(48,545	)	$	1,306		$	(46,389	)	$	(45,083	)


	Three Months Ended September 30, 2015									Three Months Ended June 30, 2016
	Gains and Losses on Derivative Instruments			Foreign Currency Translation Adjustments			Total			Gains and Losses on Derivative Instruments			Foreign Currency Translation Adjustments			Total
Beginning balance	$	3,430		$	(39,391	)	$	(35,961	)	$	1,515		$	(41,782	)	$	(40,267	)
Other comprehensive loss before reclassifications	(256		)	(6,724		)	(6,980		)	173			(10,788		)	(10,615		)
Amounts reclassified from accumulated other comprehensive income (loss) to:
Amounts reclassified from accumulated other comprehensive loss to:
Interest expense	1,401			—			1,401			218			—			218
Other income and (expenses)	(308		)	—			(308		)	(296		)	—			(296		)
Net current-period Other comprehensive loss	837			(6,724		)	(5,887		)	95			(10,788		)	(10,693		)
Net current-period Other comprehensive loss attributable to noncontrolling interests	—			1,300			1,300			—			1,193			1,193
Ending balance	$	4,267		$	(44,815	)	$	(40,548	)	$	1,610		$	(51,377	)	$	(49,767	)

CPA^®:18 – Global 9/6/30/~~2016~~2017 10-Q – 2726

Notes to Consolidated Financial Statements (Unaudited)


	Nine Months Ended September 30, 2016									Six Months Ended June 30, 2017
	Gains and Losses on Derivative Instruments			Foreign Currency Translation Adjustments			Total			Gains and Losses on Derivative Instruments			Foreign Currency Translation Adjustments			Total
Beginning balance	$	5,360		$	(55,676	)	$	(50,316	)	$	5,587		$	(67,291	)	$	(61,704	)
Other comprehensive income before reclassifications	(4,329		)	8,739			4,410			(3,824		)	23,697			19,873
Amounts reclassified from accumulated other comprehensive loss to:
Interest expense	661			—			661			402			—			402
Other income and (expenses)	(1,010		)	—			(1,010		)	(859		)	—			(859		)
Net current-period Other comprehensive income	(4,678		)	8,739			4,061			(4,281		)	23,697			19,416
Net current-period Other comprehensive income attributable to noncontrolling interests	—			(2,290		)	(2,290		)	—			(2,795		)	(2,795		)
Ending balance	$	682		$	(49,227	)	$	(48,545	)	$	1,306		$	(46,389	)	$	(45,083	)


	Nine Months Ended September 30, 2015									Six Months Ended June 30, 2016
	Gains and Losses on Derivative Instruments			Foreign Currency Translation Adjustments			Total			Gains and Losses on Derivative Instruments			Foreign Currency Translation Adjustments			Total
Beginning balance	$	1,152		$	(22,093	)	$	(20,941	)	$	5,360		$	(55,676	)	$	(50,316	)
Other comprehensive loss before reclassifications	1,984			(28,202		)	(26,218		)
Amounts reclassified from accumulated other comprehensive income (loss) to:
Other comprehensive income before reclassifications										(3,512		)	5,776			2,264
Amounts reclassified from accumulated other comprehensive loss to:
Interest expense	2,001			—			2,001			430			—			430
Other income and (expenses)	(870		)	—			(870		)	(668		)	—			(668		)
Net current-period Other comprehensive loss	3,115			(28,202		)	(25,087		)
Net current-period Other comprehensive loss attributable to noncontrolling interests	—			5,480			5,480
Net current-period Other comprehensive income										(3,750		)	5,776			2,026
Net current-period Other comprehensive income attributable to noncontrolling interests										—			(1,477		)	(1,477		)
Ending balance	$	4,267		$	(44,815	)	$	(40,548	)	$	1,610		$	(51,377	)	$	(49,767	)

CPA^®:18 – Global 9/6/30/~~2016~~2017 10-Q – 2827

Notes to Consolidated Financial Statements (Unaudited)

Note ~~13.~~12. Segment Reporting

We operate in ~~two~~three reportable business segments: Net Lease, Self Storage, and ~~Self Storage.~~Multi Family. Our Net Lease segment includes our investments in net-leased properties, whether they are accounted for as operating leases or direct financing leases. Our Self Storage segment is comprised of our investments in self-storage properties. Our Multi Family segment is comprised of our investments in multi-family residential properties and student-housing developments. In addition, we have an All Other category that includes our ~~multi-family~~notes receivable investments ~~and our investment in a note receivable~~ (Note 1). The following tables present a summary of comparative results and assets for these business segments (in thousands):


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015			2017			2016 ^(a)			2017			2016 ^(a)
Net Lease
Revenues	$	27,869		$	24,056		$	82,500		$	65,288
Operating expenses	(15,448		)	(20,559		)	(46,170		)	(51,479		)
Revenues ^(b)													$	28,882		$	27,169		$	56,252		$	54,631
Operating expenses ^{(c) (d)}													(18,319		)	(15,438		)	(34,355		)	(30,722		)
Interest expense	(7,516		)	(6,151		)	(22,096		)	(18,921		)	(6,999		)	(7,263		)	(13,994		)	(14,580		)
Other income and expenses, excluding interest expense	382			(2,502		)	1,093			(2,405		)	540			640			745			711
(Provision for) benefit from income taxes	(16		)	2,626			210			1,489			(705		)	405			(639		)	226
Gain (loss) on sale of real estate, net of tax	—			6,654			(63		)	6,654
Loss on sale of real estate, net of tax													—			—			—			(63		)
Net income attributable to noncontrolling interests	(607		)	(419		)	(1,441		)	(1,190		)	(198		)	(376		)	(436		)	(835		)
Net income (loss) attributable to CPA^®:18 – Global	$	4,664		$	3,705		$	14,033		$	(564	)
Net income attributable to CPA^®:18 – Global													$	3,201		$	5,137		$	7,573		$	9,368
Self Storage
Revenues	$	13,079		$	7,153		$	35,785		$	16,128		$	13,856		$	12,397		$	27,049		$	22,706
Operating expenses(e)	(14,106		)	(10,492		)	(44,354		)	(28,546		)	(11,663		)	(16,500		)	(23,752		)	(30,248		)
Interest expense	(2,976		)	(1,492		)	(7,971		)	(3,385		)	(3,039		)	(2,734		)	(6,044		)	(4,995		)
Other income and expenses, excluding interest expense(f)	(69		)	18			(86		)	29			(308		)	(9		)	(406		)	(17		)
Provision for income taxes	(12		)	(13		)	(103		)	(36		)	(48		)	(56		)	(125		)	(91		)
Net loss attributable to CPA^®:18 – Global	$	(4,084	)	$	(4,826	)	$	(16,729	)	$	(15,810	)	$	(1,202	)	$	(6,902	)	$	(3,278	)	$	(12,645	)
Multi Family
Revenues													$	6,452		$	5,439		$	12,620		$	10,756
Operating expenses													(4,554		)	(4,131		)	(8,880		)	(8,048		)
Interest expense													(1,434		)	(1,211		)	(2,586		)	(2,419		)
Other income and expenses, excluding interest expense													3			—			4			—
Provision for income taxes													(200		)	(51		)	(227		)	(79		)
Net income attributable to noncontrolling interests													34			(2		)	23			(7		)
Net income attributable to CPA^®:18 – Global													$	301		$	44		$	954		$	203
All Other
Revenues	$	6,336		$	5,860		$	18,512		$	13,297		$	1,783		$	710		$	3,532		$	1,420
Operating expenses	(4,327		)	(6,334		)	(12,375		)	(18,774		)	(2		)	—			(10		)	—
Interest expense	(1,221		)	(1,298		)	(3,640		)	(2,557		)
Provision for income taxes	(28		)	(50		)	(107		)	(34		)
Net (income) loss attributable to noncontrolling interests	38			32			30			115
Net income (loss) attributable to CPA^®:18 – Global	$	798		$	(1,790	)	$	2,420		$	(7,953	)
Net income attributable to CPA^®:18 – Global													$	1,781		$	710		$	3,522		$	1,420
Corporate
Unallocated Corporate Overhead ^(a)	$	(3,797	)	$	(5,159	)	$	(10,895	)	$	(13,548	)
Net income attributable to noncontrolling interests – Available Cash Distributions	$	(1,662	)	$	(1,705	)	$	(5,319	)	$	(4,021	)
Unallocated Corporate Overhead ^(g)													$	3,889		$	(6,821	)	$	1,495		$	(7,098	)
Net income attributable to noncontrolling interests — Available Cash Distributions													$	(2,186	)	$	(2,380	)	$	(3,861	)	$	(3,657	)
Total Company
Revenues	$	47,284		$	37,069		$	136,797		$	94,713		$	50,973		$	45,715		$	99,453		$	89,513
Operating expenses	(38,093		)	(42,174		)	(115,606		)	(110,700		)	(39,130		)	(40,030		)	(76,105		)	(77,513		)
Interest expense	(11,025		)	(7,970		)	(31,705		)	(24,065		)	(11,791		)	(10,320		)	(23,244		)	(20,680		)
Other income and expenses, excluding interest expense	87			(2,324		)	1,120			(4,256		)	9,205			(2,952		)	11,768			1,033
(Provision for) benefit from income taxes	(103		)	1,062			(303		)	854			(1,123		)	133			(1,193		)	(200		)
Gain (loss) on sale of real estate, net of tax	—			6,654			(63		)	6,654
Loss on sale of real estate, net of tax													—			—			—			(63		)
Net income attributable to noncontrolling interests	(2,231		)	(2,092		)	(6,730		)	(5,096		)	(2,350		)	(2,758		)	(4,274		)	(4,499		)
Net loss attributable to CPA^®:18 – Global	$	(4,081	)	$	(9,775	)	$	(16,490	)	$	(41,896	)
Net income (loss) attributable to CPA^®:18 – Global													$	5,784		$	(10,212	)	$	6,405		$	(12,409	)

CPA^®:18 – Global 9/6/30/~~2016~~2017 10-Q – 2928

Notes to Consolidated Financial Statements (Unaudited)


	Total Long-Lived Assets				Total Assets				Total Assets
	September 30, 2016		December 31, 2015		September 30, 2016		December 31, 2015 ^(b)		June 30, 2017		December 31, 2016
Net Lease(h)	$	1,179,108	$	1,105,237	$	1,498,257	$	1,446,865	$	1,537,643	$	1,453,148
Self Storage	371,082		314,247		416,835		363,284		406,343		410,781
Multi Family ^(h)									260,193		230,509
All Other	249,593		227,644		260,131		238,240		66,913		66,936
Corporate	—		—		56,323		86,294		25,109		48,072
Total Company	$	1,799,783	$	1,647,128	$	2,231,546	$	2,134,683	$	2,296,201	$	2,209,446

__________


(a)	Amounts for the three and six months ended June 30, 2016 are presented to conform to the three reportable business segment presentation for the current period.


(b)	We recognized straight-line rent adjustments of $1.1 million and $1.0 million during the three months ended June 30, 2017 and 2016, respectively, and $2.1 million and $2.2 million for the six months ended June 30, 2017 and 2016, respectively, which increased Lease revenues within our consolidated financial statements for each period.

(c)

In April 2016, the Croatian government passed a special law assisting the restructuring of companies considered of systematic significance in Croatia. This law directly impacts our tenant, which is currently experiencing financial distress and recently received a credit downgrade from both Standard & Poor’s and Moody’s. As a result of the financial difficulties and the uncertainty regarding future rent collections from the tenant, we recorded bad debt expense of $1.0 million and $2.0 million during the three and six months ended June 30, 2017, respectively.


(d)	As a result of financial difficulties and uncertainty regarding future rent collections from a tenant in Stavanger, Norway, we recorded bad debt expense of $0.6 million and $1.1 million during the three and six months ended June 30, 2017, respectively.


(e)	Includes acquisition expenses incurred in connection with self-storage transactions. Since adopting ASU 2017-01 as of January 1, 2017 (Note 2), no acquisitions have been deemed business combinations.


(f)	Includes Equity in losses of equity method investment in real estate.


(g)	Included in unallocated corporate overhead are asset management fees and general and administrative expenses. These expenses are calculated and reported at the portfolio level and not evaluated as part of any segment’s operating performance.

~~(b)~~(h)

~~In accordance with ASU 2015-03, we~~On January 31, 2017, construction commenced on one of our previously acquired build-to-suit investments located in Cardiff, United Kingdom. Upon commencement of construction, the net investment was reclassified ~~deferred~~to Real estate under construction from Net investments in direct financing ~~costs from Other assets, net to Non-recourse debt, net and Bonds payable, net as of December 31, 2015~~leases (Note 34). As the build-to-suit is intended to be a student-housing development, we reclassified the net investment to Multi Family from Net Lease during 2017.

Note ~~14.~~13. Subsequent ~~Events~~Event

On ~~November 1, 2016,~~August 4, 2017, we ~~acquired a $38.5~~repaid $15.2 million ~~mezzanine loan, as part~~ of ~~the financing of 27 retail stores in Minnesota, Wisconsin, and Iowa leased~~loans outstanding to a third party. We will receive interest at an annual rate of London Interbank Offered Rate, or LIBOR, plus 10% and the loan has a scheduled maturity date of October 9, 2018 with three one-year extension options. On October 31, 2016, we received $27.5 million of loan proceeds from WPC ~~which was used to partially finance this investment, and has an annual interest rate of LIBOR as of the issue date plus 1.1% and a scheduled maturity date of October 31, 2017.~~

(Note 3).

CPA^®:18 – Global 9/6/30/~~2016~~2017 10-Q – 3029

Item 2. 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 provide the reader with information that will assist in understanding our financial statements and the reasons for changes in certain key components of our financial statements from period to period. Management’s Discussion and Analysis of Financial Condition and Results of Operations also provides the reader with our perspective on our financial position and liquidity, as well as certain other factors that may affect our future results. Our Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the ~~2015~~2016 Annual Report and subsequent reports filed under the Securities Exchange Act of 1934.

Business Overview

As described in more detail in Item 1 of the ~~2015~~2016 Annual Report, we are a publicly owned, ~~non-listed~~non-traded REIT that invests primarily in commercial properties leased to companies domestically and internationally. As opportunities arise, we also make other types of ~~commercial~~ real estate-related investments, which includes our self-storage and multi-family investments. As a REIT, we are not subject to U.S. federal income taxation as long as we satisfy certain requirements, principally relating to the nature of our income, the level of our distributions, and other factors. We earn revenue principally by leasing the properties we own to single corporate tenants, primarily on a triple-net lease basis, which requires the tenant to pay substantially all of the costs associated with operating and maintaining the property. Revenue is subject to fluctuation because of the timing of new lease transactions, lease terminations, lease expirations, contractual rent adjustments, tenant defaults, sales of properties, and foreign currency exchange rates. We commenced operations in May 2013 and are managed by our Advisor. We hold substantially all of our assets and conduct substantially all of our business through ~~the~~our Operating Partnership. We are the general partner of, and own 99.97% of the interests in, the Operating Partnership. The remaining interest in the Operating Partnership is held by a subsidiary of WPC.

Significant Developments

~~Management Changes~~Non-Traded Retail Fundraising Platform Closure

On ~~September 22, 2016,~~June 15, 2017, WPC’s board of directors approved a plan to exit all non-traded retail fundraising activities carried out by its wholly-owned broker-dealer subsidiary, Carey Financial, effective June 30, 2017. We will pay the annual distribution and shareholder servicing fees directly to the selected dealers rather than through Carey Financial beginning with the fees for the third quarter of 2017. There is no change in the amount of distribution and shareholder servicing fees that we announced that Mr. Hisham A. Kader resigned as Chief Financial Officer. Ms. ToniAnn Sanzone was appointed as Chief Financial Officer, having served as our Chief Accounting Officer since 2015. Ms. Sanzone joined us in 2013 as Controller.incur.

Net Asset Value

Our Advisor calculated our quarterly ~~NAV~~NAVs as of ~~June 30, 2016~~March 31, 2017 in accordance with our valuation policies and on June 16, 2017, we announced that our Advisor had determined that the quarterly NAV for both our Class A and Class C common stock was $7.90, ~~which was the same as of March~~unchanged from December 31, 2016. Our Advisor calculated our ~~NAV~~NAVs by relying in part on a prior appraisal of the fair market value of our real estate portfolio as of December 31, 2015, an updated appraisal of the fair market value of approximately an additional 25% of our real estate portfolio as of September 30, 2016, an updated appraisal of the fair market value of approximately 25% of our real estate portfolio as of December 31, 2016, an updated appraisal of the fair market value of approximately 25% of our real estate portfolio as of March 31, 2017 and updated estimates of the fair market value of debt as of ~~June 30, 2016, both~~March 31, 2017, all provided by an independent third ~~party.~~party, as described below. Our Advisor then updated the prior appraisal and the updated appraisals of our real estate portfolio and adjusted the resulting net equity of our real estate portfolio for certain items. Our ~~NAV is~~NAVs are based on a number of variables, including individual tenant credits, lease terms, lending credit spreads, foreign currency exchange rates, share counts, tenant defaults, and development projects that are not yet generating income, among others. We do not control all of these variables and, as such, cannot predict how they will change in the future. The majority of our costs associated with development projects, which are not yet generating income, is included in Real estate under construction in our consolidated financial statements and was approximately ~~$197.9~~$140.5 million as of ~~September~~June 30, ~~2016.~~2017. For additional information on ~~the~~our calculation of our quarterly ~~NAV~~NAVs at ~~June 30, 2016,~~March 31, 2017, please see our Current Report on Form 8-K dated ~~August 19, 2016.~~June 16, 2017. Our Advisor currently intends to determine our NAVs as of June 30, 2017 during the third quarter of 2017.

CPA^®:18 – Global 6/30/2017 10-Q– 30

Beginning with our quarterly ~~NAV~~NAVs as of September 30, 2016, we ~~will~~ obtain a rolling appraisal of the fair market value of our real estate portfolio, whereby approximately 25% of our real estate assets (based on asset value) is appraised each quarter and we continue to obtain estimates of the fair market value of our debt as of the respective balance sheet date, both to be provided by an independent third party. Since the quarterly NAV ~~estimate is~~estimates are not based on a full appraisal of the entire portfolio, to the extent ~~the~~any estimated NAV per share adjustments are within +/- 1% of the previously disclosed NAV per share, the quarterly NAV per share will remain unchanged. We ~~will continue to~~ monitor properties not appraised during the quarter to identify ones that may have experienced a significant event and obtain updated third-party appraisals for such properties.

The accrued distribution and shareholder servicing fee payable has been valued using a hypothetical liquidation value and, as a result, the NAVs do not reflect any obligation to pay future distribution and shareholder servicing fees. At June 30, 2017, the accrual for the distribution and shareholder servicing fee was $6.6 million.

Acquisition and Financing Activity

During the six months ended June 30, 2017, we acquired one new investment for an aggregate amount of $8.2 million and purchased a vacant parcel of land for a self-storage development project as part of our joint venture with a third party for $5.1 million, which is based on the exchange rate of the Canadian dollar at the date of acquisition. Additionally, we made our final payment to the developer for a build-to-suit project located in Eindhoven, the Netherlands for $18.7 million, which is based on the exchange rate of the euro on the date of the acquisition.

During the six months ended June 30, 2017, we obtained mortgage financing totaling $23.2 million and refinanced non-recourse mortgage loans totaling $17.0 million. In addition, we had an additional draw down of $3.9 million (based on the exchange rate of the euro at the date of the draw down) on our senior construction-to-term mortgage loan. During the six months ended June 30, 2017, we borrowed $11.2 million from WPC and repaid $4.5 million (Note 3).

CPA^®:18 – Global 9/6/30/~~2016~~2017 10-Q – 31

~~Acquisition and Financing Activity~~

~~During the nine months ended September 30, 2016, we acquired six new investments for an aggregate amount of $141.3 million and obtained mortgage financing totaling $136.2 million.~~

On November 1, 2016, we acquired a $38.5 million mezzanine loan, as part of the financing of 27 retail stores in Minnesota, Wisconsin, and Iowa leased to a third party. We will receive interest at an annual rate of LIBOR plus 10% and the loan has a scheduled maturity date of October 9, 2018 with three one-year extension options. On October 31, 2016, we received $27.5 million of loan proceeds from WPC, which was used to partially finance this investment, and has an annual interest rate of LIBOR as of the issue date plus 1.1% with a scheduled maturity date of October 31, 2017.

Portfolio Overview

We intend to continue to acquire a diversified portfolio of income-producing commercial real estate properties and other real estate-related assets. We expect to make these investments both domestically and internationally. Portfolio information is provided on a ~~consolidated basis to facilitate the review of our accompanying consolidated financial statements. In addition, we provide selected information on a~~ pro rata basis, unless otherwise noted below, to better illustrate the economic impact of our various net-leased, ~~jointly-owned~~jointly owned investments. See Terms and Definitions below for a description of pro rata amounts.

Portfolio Summary


	September 30, 2016			December 31, 2015			June 30, 2017			December 31, 2016
Number of net-leased properties ^(a)	59			58			59			59
Number of operating properties ^(b)	75			66			78			76
Number of tenants ^(a)	102			96			101			103
Total square footage (in thousands)	16,114			15,442			16,838			16,259
Occupancy — Single-tenant ^(c)	100.0		%	100.0		%	100.0		%	100.0		%
Occupancy — Multi-tenant ^(c)	97.4		%	93.4		%	93.4		%	98.4		%
Occupancy — Self-storage	91.3		%	87.1		%	92.8		%	91.0		%
Occupancy — Multi-family	94.9		%	93.5		%	93.2		%	93.9		%
Weighted-average lease term — Single-tenant properties (in years) ^(c)	11.0			11.5			10.6			10.8
Weighted-average lease term — Multi-tenant properties (in years) ^(c)	7.2			7.8			7.4			7.1
Number of countries	11			10			11			11
Total assets (in thousands)	$	2,231,546		$	2,134,683
Net investments in real estate (in thousands)	1,799,783			1,647,128
Total assets (consolidated basis in thousands)							$	2,296,201		$	2,209,446
Net investments in real estate (consolidated basis in thousands) ^(c)							2,049,574			1,953,153


	Nine Months Ended September 30,						Six Months Ended June 30,
(dollars in thousands, except exchange rate)	2016			2015			2017			2016
Acquisition volume — consolidated ^{(d) (e)}	$	141,306		$	857,379		$	39,363		$	141,306
Acquisition volume —pro rata ^{(c) (d) (e) (f)}	156,840			860,901
Acquisition volume —pro rata ^{(d) (e) (f)}							56,182			156,840
Financing obtained — consolidated	136,206			493,265			44,159			101,245
Financing obtained —pro rata ^{(c) (f)}	145,795			484,117
Financing obtained —pro rata ^(f)							47,138			101,245
Average U.S. dollar/euro exchange rate	1.1161			1.1148			1.0821			1.1158
Average U.S. dollar/Norwegian krone exchange rate ^(g)	0.1190			0.1266			0.1180			0.1184
Average U.S. dollar/British pound sterling exchange rate ^(h)	1.3939			1.5324			1.2582			1.4335
Increase in the U.S. CPI ⁽ⁱ⁾	2.1		%	1.3		%
Increase in the Harmonized Index of Consumer Prices ⁽ⁱ⁾	0.4		%	0.3		%
Increase in the Norwegian CPI ⁽ⁱ⁾	3.2		%	2.0		%
Change in the U.S. CPI ^(g)							1.5		%	1.9		%
Change in the Harmonized Index of Consumer Prices ^(g)							0.6		%	0.5		%
Change in the Norwegian CPI ^(g)							1.3		%	2.9		%

__________


(a)	Represents our single-tenant and multi-tenant properties within our net-leased portfolio and, accordingly, excludes all operating properties. We consider a property to be multi-tenant if it does not have a single tenant that comprises more than 75% of the contractual minimum ABR for the property. See Terms and Definitions below for a description of ABR.

~~CPA~~^®~~:18 – Global 9/30/2016 10-Q~~– 32


(b)	At ~~September~~June 30, ~~2016~~2017, our operating portfolio consisted of 6769 self-storage properties and ~~eight~~nine multi-family properties, all of which are managed by third parties.


(c)	~~Represents pro rata basis. See Terms and Definitions below for~~ In the second quarter of 2017, we reclassified certain line items in our consolidated balance sheets. As a ~~description~~result, Net investments in real estate as of ~~pro rata metrics.~~December 31, 2016 has been revised to conform to the current period presentation (Note 2).


(d)	Includes consolidated investments and build-to-suit transactions including related budget amendments, which are reflected as the total commitment for the build-to-suit funding, and excludes investments in unconsolidated joint ventures.


(e)	Includes acquisition-related expenses, which were included in Acquisition expenses in the consolidated financial statements.


(f)	Includes investments in unconsolidated joint ventures, which include our equity investment in real estate (Note 54).


(g)	The average exchange rate for the U.S. dollar in relation to the Norwegian krone decreased by 6% during the nine months ended September 30, 2016 as compared to the same period in 2015, resulting in a negative impact on earnings in 2016 from our Norwegian krone-denominated investments.


~~(h)~~	The average exchange rate for the U.S. dollar in relation to the British pound sterling decreased by 9.0% during the nine months ended September 30, 2016 as compared to the same period in 2015, resulting in a negative impact on earnings in 2016 from our British pound sterling-denominated investments.


~~(i)~~	Many of our lease agreements include contractual increases indexed to changes in the U.S. Consumer Price Index, or CPI, or similar indices.

CPA^®:18 – Global 6/30/2017 10-Q– 32

Net-Leased Portfolio

The tables below represent information about our net-leased portfolio on a ~~consolidated and~~ pro rata basis and, accordingly, exclude all operating properties at ~~September~~June 30, ~~2016~~2017. See Terms and Definitions below for a description of pro rata metrics and ABR.

Top Ten Tenants by ABR

(dollars in ~~thousands, except percentages)~~thousands)


				Consolidated				Pro Rata
Tenant/Lease Guarantor	Property Type	Tenant Industry	Location	ABR		Percent		ABR		Percent		Property Type	Tenant Industry	Location	ABR		Percent
Bank Pekao S.A. ^(a)	Office	Banking	Warsaw, Poland	$	8,395	9	%	$	4,198	5	%
State Farm Automobile Co.	Office	Insurance	Austin, Texas	7,384		8	%	3,692		4	%
Konzum d.d. ^(a)	Retail	Grocery	Split, Zadar, Zagreb (3), Croatia	6,311		6	%	5,048		6	%
Apply Sørco AS ^(a)	Office	Business Services	Stavanger, Norway	5,653		6	%	2,883		3	%
Rabobank Groep NV ^(a)												Office	Banking	Eindhoven, Netherlands	$	5,788	6	%
Sweetheart Cup Company, Inc.	Warehouse	Containers, Packaging, and Glass	University Park, Illinois	5,646		6	%	5,646		7	%	Warehouse	Containers, Packaging, and Glass	University Park, Illinois	5,646		6	%
Konzum d.d. ^{(a) (b)}												Retail	Grocery	Split, Zadar, Zagreb (3), Croatia	5,176		6	%
Albion Resorts ^(a)	Hotel	Hotel, Gaming, and Leisure	Albion, Mauritius	4,880		5	%	4,880		6	%	Hotel	Hotel, Gaming, and Leisure	Albion, Mauritius	4,990		5	%
Siemens AS ^(a)	Office	Capital Equipment	Oslo, Norway	4,560		5	%	4,560		5	%	Office	Capital Equipment	Oslo, Norway	4,538		5	%
Bank Pekao S.A. ^(a)												Office	Banking	Warsaw, Poland	4,305		5	%
COOP Ost AS ^(a)	Retail	Grocery	Oslo, Norway	4,211		4	%	3,794		5	%	Retail	Grocery	Oslo, Norway	3,776		4	%
State Farm Automobile Co.												Office	Insurance	Austin, Texas	3,692		4	%
Royal Vopak NV ^(a)	Office	Oil and Gas	Rotterdam, Netherlands	3,483		4	%	3,483		4	%	Office	Oil and Gas	Rotterdam, Netherlands	3,568		4	%
Board of Regents, State of Iowa	Office	Sovereign and Public Finance	Coralville, Iowa	3,315		3	%	2,984		4	%	Office	Sovereign and Public Finance	Coralville and Iowa City, Iowa	3,512		4	%
Total				$	53,838	56	%	$	41,168	49	%				$	44,991	49	%

__________


(a)	ABR amounts are subject to fluctuations in foreign currency exchange rates.

(b)

In April 2016, the Croatian government passed a special law assisting the restructuring of companies considered of systematic significance in Croatia. This law directly impacts Konzum d.d., which is currently experiencing financial distress and recently received a credit downgrade from both Standard & Poor’s and Moody’s. As a result of the financial difficulties and the uncertainty regarding future rent collections from the tenant, we recorded bad debt expense of $1.0 million and $2.0 million during the three and six months ended June 30, 2017, respectively.

CPA^®:18 – Global 9/6/30/~~2016~~2017 10-Q – 33

Portfolio Diversification by Geography

(dollars in ~~thousands, except percentages)~~thousands)


	Consolidated				Pro Rata
Region	ABR		Percent		ABR		Percent		ABR		Percent
United States
Midwest	$	21,893	23	%	$	21,562	26	%	$	22,261	24	%
South	15,123		16	%	11,431		14	%	11,493		12	%
East	3,354		3	%	3,354		4	%	3,414		4	%
West	412		—	%	412		—	%	420		1	%
U.S. Total	40,782		42	%	36,759		44	%	37,588		41	%

International
The Netherlands									14,615		16	%
Norway	17,031		18	%	13,614		16	%	13,770		15	%
The Netherlands	8,783		9	%	8,783		11	%
Poland	8,525		9	%	4,263		5	%
Germany									5,402		6	%
Croatia	6,311		7	%	5,048		6	%	5,176		6	%
Mauritius	4,880		5	%	4,880		6	%	4,990		5	%
Poland									4,371		5	%
United Kingdom	4,285		4	%	4,235		5	%	3,400		4	%
Germany	3,674		4	%	3,562		4	%
Slovakia	2,095		2	%	2,095		3	%	2,143		2	%
International Total	55,584		58	%	46,480		56	%	53,867		59	%

Total	$	96,366	100	%	$	83,239	100	%	$	91,455	100	%

Portfolio Diversification by Property Type

(dollars in ~~thousands, except percentages)~~thousands)


	Consolidated				Pro Rata
Property Type	ABR		Percent		ABR		Percent		ABR		Percent
Office	$	52,405	55	%	$	41,298	50	%	$	46,497	51	%
Retail	12,842		13	%	10,933		13	%
Industrial	12,488		13	%	12,488		15	%	12,674		14	%
Warehouse	11,552		12	%	11,552		14	%	12,165		13	%
Retail									11,258		12	%
Hotel	7,079		7	%	6,968		8	%	8,861		10	%
Total	$	96,366	100	%	$	83,239	100	%	$	91,455	100	%

CPA^®:18 – Global 9/6/30/~~2016~~2017 10-Q – 34

Portfolio Diversification by Tenant Industry

(dollars in ~~thousands, except percentages)~~thousands)


	Consolidated				Pro Rata
Industry Type	ABR		Percent		ABR		Percent		ABR		Percent
Banking									$	10,093	11	%
Grocery	$	10,522	11	%	$	8,843	11	%	8,953		10	%
Banking	8,395		9	%	4,198		5	%
Insurance	8,250		9	%	4,559		5	%
Hotel, Gaming, and Leisure									8,902		10	%
Sovereign and Public Finance	7,857		8	%	7,475		9	%	7,053		8	%
Hotel, Gaming, and Leisure	7,159		7	%	7,007		8	%
Business Services	6,896		7	%	4,126		5	%
Containers, Packaging, and Glass	5,646		6	%	5,646		7	%	5,646		6	%
Capital Equipment	5,364		6	%	5,364		6	%	5,308		6	%
Retail Stores	4,712		5	%	4,712		6	%	5,071		6	%
Insurance									4,579		5	%
Business Services									4,136		4	%
Utilities: Electric									3,952		4	%
Oil and Gas	3,972		4	%	3,969		5	%	3,749		4	%
Utilities: Electric	3,897		4	%	3,897		5	%
Metals and Mining									3,327		4	%
High Tech Industries	3,359		4	%	3,248		4	%	3,243		4	%
Metals and Mining	3,263		3	%	3,263		4	%
Media: Advertising, Printing, and Publishing	3,175		3	%	3,175		4	%	3,214		4	%
Healthcare and Pharmaceutical									2,198		2	%
Consumer Services	2,105		2	%	2,025		2	%	2,029		2	%
Healthcare and Pharmaceuticals	2,096		2	%	2,096		3	%
Automotive	1,934		2	%	1,934		2	%	1,956		2	%
Construction and Building	1,742		2	%	1,742		2	%	1,771		2	%
Non-Durable Consumer Goods	1,249		1	%	1,249		2	%	1,262		1	%
Telecommunications	1,039		1	%	1,013		1	%	1,038		1	%
Electricity	1,012		1	%	1,012		1	%	1,027		1	%
Wholesale	988		1	%	988		1	%	988		1	%
Cargo Transportation	907		1	%	907		1	%
Other ^(a)	827		1	%	791		1	%	1,960		2	%
Total	$	96,366	100	%	$	83,239	100	%	$	91,455	100	%

__________


(a)	Includes ABR from tenants in the following industries: ~~environmental industries and~~cargo transportation, durable consumer ~~goods.~~goods, and environmental industries.

CPA^®:18 – Global 9/6/30/~~2016~~2017 10-Q – 35

Lease Expirations

(dollars in ~~thousands, except percentages and number of leases)~~thousands)


	Consolidated ^(a)					Pro Rata ^(a)
Year of Lease Expiration ^(b)	Number of Leases Expiring	ABR		Percent		Number of Leases Expiring	ABR		Percent
Remaining 2016	4	$	186	—	%	4	$	186	—	%
2017	7	1,204		1	%	7	1,091		1	%
Year of Lease Expiration ^{(a) (b)}											Number of Leases Expiring	ABR		Percent
Remaining 2017											4	$	267	—	%
2018	6	678		1	%	6	654		1	%	5	250		1	%
2019	7	998		1	%	7	998		1	%	6	973		1	%
2020	7	1,898		2	%	7	1,811		2	%	7	1,226		1	%
2021	4	1,315		1	%	4	1,205		1	%	6	1,290		1	%
2022	5	1,733		2	%	5	1,733		2	%	8	2,035		2	%
2023	12	19,387		20	%	12	14,763		18	%	13	14,844		16	%
2024	10	4,718		5	%	10	4,718		6	%	10	5,033		6	%
2025	9	6,389		7	%	9	6,389		8	%	9	6,789		7	%
2026	7	6,626		7	%	7	6,626		8	%	8	6,752		7	%
2027	7	5,645		6	%	7	5,645		7	%	8	6,016		7	%
2028	6	14,496		15	%	6	8,034		10	%	5	7,973		9	%
2029	5	9,213		9	%	5	9,213		11	%	5	9,407		10	%
2030											6	4,335		5	%
Thereafter	22	21,880		23	%	22	20,173		24	%	17	24,265		27	%
Total	118	$	96,366	100	%	118	$	83,239	100	%	117	$	91,455	100	%

__________


(a)	Assumes tenant does not exercise renewal option.


(b)	These maturities also include our multi-tenant properties, which generally have a shorter duration than our single-tenant properties, and on a combined basis represent ~~both consolidated and~~ pro rata ABR of $3.4 million. All the years listed above include multi-tenant properties, except 2026.

CPA^®:18 – Global 9/6/30/~~2016~~2017 10-Q – 36

Operating Properties

At ~~September~~June 30, ~~2016,~~2017, our operating portfolio consisted of 6769 self-storage properties, which had an average occupancy rate of ~~91.3%~~92.8%, and ~~eight~~nine multi-family properties, which had an average occupancy rate of ~~94.9%~~93.2%. At ~~September~~June 30, ~~2016,~~2017, our operating portfolio was comprised as follows (square footage in thousands):


Location	Number of Properties	Square Footage	Number of Properties	Square Footage
Florida	23	2,277	23	2,277
Texas	13	1,201	13	1,201
California	10	860	10	860
Georgia	5	593	5	593
Nevada	3	243	3	243
Delaware	3	241	3	241
North Carolina	2	403	2	403
Illinois			2	100
Hawaii	2	95	2	95
Kentucky	1	121	1	121
District of Columbia	1	67	1	67
South Carolina	1	63	1	63
New York	1	61	1	61
Louisiana	1	59	1	59
Illinois	1	58
Massachusetts	1	58	1	58
Missouri	1	41	1	41
Oregon	1	40	1	40
U.S. Total	70	6,481	71	6,523
Canada ^(a)	3	18	4	150
United Kingdom ^(b)	2	—	3	103
International Total	5	18	7	253
Total	75	6,499	78	6,776

__________


(a)	Represents ~~three~~four build-to-suit projects for self-storage facilities.


(b)	~~Represents~~Includes two build-to-suit projects for ~~student housing~~student-housing developments.

CPA^®:18 – Global 9/6/30/~~2016~~2017 10-Q – 37

Build-to-Suit and Development Projects

As of ~~September~~June 30, ~~2016,~~2017, we had the following consolidated development properties and joint-venture development projects, which remain under ~~construction:~~

(construction (dollars in ~~thousands, except square footage, number of buildings, and ownership percentage)~~thousands):


Estimated Completion Date		Property Type	Location	Ownership Percentage ^(a)		Number of Buildings	Square Footage	Estimated Project Totals ^(b)		Amount Funded ^{(b) (c)}				Property Type	Location	Ownership Percentage ^(a)		Number of Buildings	Square Footage	Estimated Project Totals ^(b)		Amount Funded ^{(b) (c)}
Q4 2016		Student Housing	Reading, England ^(d)	96.0	%	1	103,194	$	42,778	$	36,736
Q2 2017		Hotel	Hamburg, Germany	100.0	%	1	104,286	20,856		13,692
Q2 2017		Hotel	Munich, Germany	94.9	%	1	244,176	71,700		63,421
Q2 2017		Office	Eindhoven, Netherlands	100.0	%	1	269,100	85,183		46,525
Q4 2017		Office/Student Housing	Accra, Ghana	100.0	%	5	506,537	60,630		15,241
Q3 2017														Hotel	Munich, Germany	94.9	%	1	244,176	$	73,312	$	64,936
Q4 2017		Hotel	Stuttgart, Germany ^(e)	94.9	%	1	244,513	3,436		3,436				Hotel	Stuttgart, Germany ^(d)	94.9	%	1	244,513	3,513		3,513
Q3 2018		Student Housing	Portsmouth, England	97.0	%	1	126,807	58,749		10,280				Student Housing	Portsmouth, England	97.0	%	1	126,807	63,688		16,193
Q3 2018														Student Housing	Cardiff, Wales	94.5	%	1	96,983	38,529		12,844
TBD														Office/Student Housing	Accra, Ghana ^(e)	100.0	%	6	506,537	60,630		22,990
						11	1,598,613	$	343,332	189,331								10	1,219,016	$	239,672	120,476
Third-party contributions ^(f)	Third-party contributions ^(f)									(861		)	Third-party contributions ^(f)									(904		)
Total										$	188,470											$	119,572

__________


(a)	Represents our expected ownership percentage upon the completion of each respective development project.


(b)	Amounts related to certain of our build-to-suit projects are denominated in a foreign currency. For these projects, amounts are based on their respective spot rates as of ~~September~~June 30, ~~2016,~~2017, where applicable.

(c)

Amounts presented include certain costs that have been fully funded as of ~~September~~June 30, ~~2016~~2017 and are included in Other assets, net but not yet used in construction and therefore not included in Real estate under construction. These amounts also exclude capitalized interest, accrued costs, and capitalized acquisition fees for our Advisor, which are all included in Real estate under construction.


(d)	During the three months ended September 30, 2016, we commenced operations on the completed student-housing rooms of the development, and as a result $15.1 million of the total project was placed into service. The remainder of the student-housing rooms is currently expected to be placed into service during the fourth quarter of 2016.


~~(e)~~	This project relates to a build-to-suit expansion of an existing hotel, which we have fully funded but was still under development as of ~~September~~June 30, ~~2016.~~2017.


(e)	On February 19, 2016, the joint venture obtained third-party financing in an amount up to $41.0 million, subject to the tenant obtaining a letter of credit. Since the tenant has not to date obtained the required letter of credit, we are currently unable to estimate when this project will be completed, if at all (Note 4).


(f)	Amount represents the funds contributed from our joint-venture partners.

As of ~~September~~June 30, ~~2016,~~2017, we had the following unconsolidated development properties and joint-venture development projects, which remain under ~~construction:~~

(construction (dollars in ~~thousands, except square footage, number of buildings, and ownership percentage)~~thousands):

Estimated Completion Date Property Type
Location ^(a)

Ownership Percentage ^(b)
Number of Buildings Square Footage
Estimated Project Totals ^(c)

Amount Funded ^(c)
Q1 2017 Self Storage Vaughan, Canada 90.0 % 1
105,150
$ 14,959
$ 8,622
Q1 2017 Self Storage
Mississauga, Canada ^(d)
90.0 % 1
92,125
13,841
9,806
Q1 2018 Self Storage Vaughan, Canada 90.0 % 1
95,475
14,576
2,546
3
292,750
$ 43,376
$ 20,974



Estimated Completion Date	Property Type	Location ^{(a) (d)}	Ownership Percentage ^(b)		Number of Buildings	Square Footage	Estimated Project Totals ^(c)		Amount Funded ^(c)
Q2 2018	Self Storage	Vaughan, Canada	90.0	%	1	105,150	$	15,197	$	11,418
Q2 2018	Self Storage	Toronto, Canada	90.0	%	1	119,000	16,303		5,589
Q3 2018	Self Storage	Vaughan, Canada	90.0	%	1	95,475	14,970		2,778
					3	319,625	$	46,470	$	19,785

__________

(a)

These properties all relate to ~~our sole~~an unconsolidated investment, which we account for under the equity method of accounting. We do not consolidate this entity because we are not the primary beneficiary and the nature of our involvement in the activities of the entity allows us to exercise significant influence but does not give us power over decisions that significantly affect the economic performance of the entity.

~~CPA~~^®~~:18 – Global 9/30/2016 10-Q~~– 38


(b)	Represents our expected ownership percentage upon the completion of each respective development project. As of ~~September~~June 30, ~~2016,~~2017, the joint-venture partner ~~has~~had not yet purchased ~~their~~its 10% equity interest, which will be funded by the distributions they are eligible to receive upon the properties being placed into ~~service.~~service (Note 4).


(c)	Amounts related to our Canadian build-to-suit projects are denominated in Canadian dollars, which have been partially funded with ~~third party~~third-party financing. For these projects, U.S. dollar amounts are based on their respective ~~spot rates~~exchange rate as of ~~September~~June 30, ~~2016.~~2017.

CPA^®:18 – Global 6/30/2017 10-Q– 38

(d)

~~On July 1, 2016,~~During the six months ended June 30, 2017, we commenced operations in ~~one~~two Canadian self-storage ~~facility~~facilities upon the completion of a distinct ~~phase~~phases of the overall development, and as a result, ~~$2.9~~placed $9.3 million and $10.1 million of the total ~~project was placed~~amounts for these projects into service. During ~~both~~ the three and ~~nine~~six months ended ~~September~~June 30, ~~2016,~~2017, we ~~have~~ incurred losses of ~~less than $0.1~~$0.2 million and $0.3 million, respectively, relating to ~~this project,~~these distinct phases of the projects, which isare included in ~~Other income and (expenses)~~Equity in losses of equity method investment in real estate on our consolidated financial statements.

Terms and Definitions

Pro Rata Metrics — The portfolio information above contains certain metrics prepared under the pro rata consolidation method. We refer to these metrics as pro rata metrics. We have a number of investments, usually with our affiliates, in which our economic ownership is less than 100%. Under the full consolidation method, 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~~jointly owned investments, which we do not control, we report our net investment and our net income or loss from that investment. Under the pro rata consolidation method, we generally present our proportionate share, based on our economic ownership of these ~~jointly-owned~~jointly owned investments, of the portfolio metrics of those investments. Multiplying each of the jointly owned investments’ financial statement line items by our percentage ownership and adding those amounts to 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 such jointly owned investments.

ABR — ABR represents contractual minimum annualized base rent for our net-leased properties, and reflects exchange rates as of the date of this Report. 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.

Financial Highlights

(in thousands)


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015			2017			2016			2017			2016
Total revenues	$	47,284		$	37,069		$	136,797		$	94,713		$	50,973		$	45,715		$	99,453		$	89,513
Acquisition expenses	36			10,795			4,747			34,575			(7		)	2,816			45			4,711
Net loss attributable to CPA^®:18 – Global	(4,081		)	(9,775		)	(16,490		)	(41,896		)
Net income (loss) attributable to CPA^®:18 – Global													5,784			(10,212		)	6,405			(12,409		)

Cash distributions paid	20,566			19,711			60,900			56,014			21,215			20,256			42,210			40,334

Net cash provided by operating activities							56,005			24,380									39,761			32,293
Net cash used in investing activities							(147,215		)	(684,996		)							(56,523		)	(114,786		)
Net cash provided by financing activities							57,580			504,370
Net cash (used in) provided by financing activities																			(1,884		)	41,541

Supplemental financial measures:
FFOattributable to CPA^®:18 – Global ^(a)	15,297			(293		)	41,859			(8,715		)	23,072			9,672			41,154			26,562
MFFO attributable to CPA^®:18 – Global ^(a)	14,395			11,541			43,000			29,592			12,796			14,916			27,695			28,605
Adjusted MFFO attributable to CPA^®:18 – Global ^(a)	14,786			10,677			43,732			28,626			13,350			15,098			28,861			28,946

__________

~~CPA~~^®~~:18 – Global 9/30/2016 10-Q~~– 39

(a)

We consider the performance metrics listed above, including Funds from ~~(used in)~~ operations, or FFO, Modified funds from operations, or MFFO, and Adjusted modified funds from operations, or Adjusted MFFO, which are supplemental measures that are not defined by GAAP, orreferred to herein as non-GAAP measures, to be important measures in the evaluation of our results of operations and capital resources. We evaluate our results of operations with a primary focus on the ability to generate cash flow necessary to meet our objective of funding distributions to stockholders.operating performance. See Supplemental Financial Measures below for our definitions of these non-GAAP measures and reconciliations to their most directly comparable GAAP measures.

Total revenues ~~Net loss attributable to CPA~~^®~~:18 – Global, Net cash provided by operating activities, FFO, MFFO, and Adjusted MFFO~~ improved for both the ~~nine~~three and six months ended ~~September~~June 30, ~~2016~~2017 as compared to the same ~~period~~periods in ~~2015,~~2016, primarily ~~reflecting~~as a result of the accretive impact of our investments acquired ~~or placed into service~~ during 2016 and ~~2015.~~2017.

CPA^®:18 – Global 9/6/30/2017 10-Q– 39

Net income attributable to CPA^®:18 – Global and FFO improved for both the three and six months ended June 30, 2017 as compared to the same periods in 2016, primarily as a result of the accretive impact of our investments acquired during 2016 and 2017. Additional improvements resulted from an increase in realized and unrealized foreign currency transaction gains related to our international investments, as well as a decrease in acquisition expenses.

MFFO and Adjusted MFFO decreased for both the three and six months ended June 30, 2017 as compared to the same periods in 2016, primarily due to provisions for bad debt expense related to two tenants and an increase in interest expense. Additionally, MFFO decreased as a result of an increase in deferred taxes relating to our investment in Mauritius.

CPA^®:18 – Global 6/30/2017 10-Q – 40

Results of Operations

We evaluate our results of operations with a primary focus on our ability to generate cash flow necessary to meet our objectives of funding distributions to stockholders and increasing the value of our real estate investments. As a result, our assessment of operating results gives less emphasis to the effect of unrealized gains and losses, which may cause fluctuations in net income for comparable periods but have no impact on cash flows, and to other non-cash charges, such as depreciation and impairment charges.

The following table presents the comparative results of operations (in thousands):


	Three Months Ended September 30,									Nine Months Ended September 30,									Three Months Ended June 30,									Six Months Ended June 30,
	2016			2015			Change			2016			2015			Change			2017			2016			Change			2017			2016			Change
Revenues
Lease revenues	$	24,751		$	21,675		$	3,076		$	73,339		$	59,133		$	14,206		$	25,448		$	24,124		$	1,324		$	49,782		$	48,588		$	1,194
Other real estate income - operating property revenues	18,711			12,308			6,403			52,190			27,332			24,858			20,316			17,842			2,474			39,696			33,479			6,217
Reimbursable tenant costs	3,017			2,602			415			8,793			6,348			2,445			3,201			3,006			195			6,167			5,776			391
Interest income and other	805			484			321			2,475			1,900			575			2,008			743			1,265			3,808			1,670			2,138
	47,284			37,069			10,215			136,797			94,713			42,084			50,973			45,715			5,258			99,453			89,513			9,940
Operating Expenses
Depreciation and amortization:
Net-leased properties	11,151			9,766			1,385			34,145			26,282			7,863			11,009			11,470			(461		)	21,616			22,994			(1,378		)
Operating properties	9,725			7,886			1,839			28,626			18,021			10,605			7,719			9,922			(2,203		)	16,063			18,901			(2,838		)
	20,876			17,652			3,224			62,771			44,303			18,468			18,728			21,392			(2,664		)	37,679			41,895			(4,216		)
Property expenses:
Operating properties	8,634			5,380			3,254			23,261			11,660			11,601			8,448			7,837			611			16,482			14,627			1,855
Net-leased properties																			4,241			997			3,244			6,775			2,077			4,698
Reimbursable tenant costs	3,017			2,602			415			8,793			6,348			2,445			3,201			3,006			195			6,167			5,776			391
Asset management fees	2,547			2,098			449			7,424			5,244			2,180			2,767			2,468			299			5,476			4,877			599
Net-leased properties	1,382			912			470			3,459			2,111			1,348
	15,580			10,992			4,588			42,937			25,363			17,574			18,657			14,308			4,349			34,900			27,357			7,543
General and administrative	1,601			2,735			(1,134		)	5,151			6,459			(1,308		)	1,752			1,514			238			3,481			3,550			(69		)
Acquisition expenses	36			10,795			(10,759		)	4,747			34,575			(29,828		)
Acquisition and other expenses																			(7		)	2,816			(2,823		)	45			4,711			(4,666		)
	38,093			42,174			(4,081		)	115,606			110,700			4,906			39,130			40,030			(900		)	76,105			77,513			(1,408		)
Other Income and Expenses
Interest expense	(11,025		)	(7,970		)	(3,055		)	(31,705		)	(24,065		)	(7,640		)	(11,791		)	(10,320		)	(1,471		)	(23,244		)	(20,680		)	(2,564		)
Other income and (expenses)	87			(2,324		)	2,411			1,120			(4,256		)	5,376			9,459			(2,952		)	12,411			12,121			1,033			11,088
Equity in losses of equity method investment in real estate																			(254		)	—			(254		)	(353		)	—			(353		)
	(10,938		)	(10,294		)	(644		)	(30,585		)	(28,321		)	(2,264		)	(2,586		)	(13,272		)	10,686			(11,476		)	(19,647		)	8,171
Loss before income taxes and gain (loss) on sale of real estate	(1,747		)	(15,399		)	13,652			(9,394		)	(44,308		)	34,914
Income (loss) before income taxes and loss on sale of real estate																			9,257			(7,587		)	16,844			11,872			(7,647		)	19,519
(Provision for) benefit from income taxes	(103		)	1,062			(1,165		)	(303		)	854			(1,157		)	(1,123		)	133			(1,256		)	(1,193		)	(200		)	(993		)
Loss before gain (loss) on sale of real estate	(1,850		)	(14,337		)	12,487			(9,697		)	(43,454		)	33,757
Gain (loss) on sale of real estate, net of tax	—			6,654			(6,654		)	(63		)	6,654			(6,717		)
Net Loss	(1,850		)	(7,683		)	5,833			(9,760		)	(36,800		)	27,040
Income (loss) before loss on sale of real estate																			8,134			(7,454		)	15,588			10,679			(7,847		)	18,526
Loss on sale of real estate, net of tax																			—			—			—			—			(63		)	63
Net Income (Loss)																			8,134			(7,454		)	15,588			10,679			(7,910		)	18,589
Net income attributable to noncontrolling interests	(2,231		)	(2,092		)	(139		)	(6,730		)	(5,096		)	(1,634		)	(2,350		)	(2,758		)	408			(4,274		)	(4,499		)	225
Net Loss Attributable to CPA^®:18 – Global	$	(4,081	)	$	(9,775	)	$	5,694		$	(16,490	)	$	(41,896	)	$	25,406
Supplemental financial measures:
MFFO Attributable to CPA^®:18 – Global ^(a)	$	14,395		$	11,541		$	2,854		$	43,000		$	29,592		$	13,408
Adjusted MFFO Attributable to CPA^®:18 – Global ^(a)	$	14,786		$	10,677		$	4,109		$	43,732		$	28,626		$	15,106
Net Income (Loss) Attributable to CPA^®:18 – Global																			$	5,784		$	(10,212	)	$	15,996		$	6,405		$	(12,409	)	$	18,814

~~__________~~

CPA^®:18 – Global 9/6/30/~~2016~~2017 10-Q – 41

~~(a)~~

We consider MFFO and Adjusted MFFO, which are supplemental measures that are not defined by GAAP, or non-GAAP measures, to be important measures in the evaluation of our results of operations and capital resources. We evaluate our results of operations with a primary focus on the ability to generate cash flow necessary to meet our objective of funding distributions to stockholders. See ~~Supplemental Financial Measures~~ ~~below for our definitions of these non-GAAP measures and reconciliations to their most directly comparable GAAP measures.~~

Lease Composition and Leasing Activities

As of ~~September~~June 30, ~~2016,~~2017, approximately ~~54.7%~~59.1% of our leases, based on consolidated ABR, provide for adjustments based on formulas indexed to changes in the U.S. CPI, or similar indices for the jurisdiction in which the property is located, some of which have caps and/or floors. In addition, ~~38.1%~~36.7% of our leases on that same basis have fixed rent adjustments, for which consolidated ABR is scheduled to increase by an average of ~~2.5%~~3.1% in the next 12 months. We own international investments and, therefore, lease revenues from these investments are subject to exchange rate fluctuations in various foreign currencies, primarily the euro.

The following discussion presents a summary of rents on existing properties arising from leases with new tenants, or second generation leases, and renewed leases with existing tenants for the periods presented and, therefore, does not include new acquisitions for our portfolio during the periods presented.

During the ~~nine~~three months ended ~~September~~June 30, ~~2016,~~2017, we did not enter into any new leases or modify any existing leases.

During the six months ended June 30, 2017, we signed ~~three such leases~~one lease extension with an existing tenant totaling ~~23,776~~5,400 square feet of leased space. ~~Of these leases, two were with~~The new ~~tenants and one was a lease extension with an existing tenant. The weighted average new rent for these leases is $20.39 per square foot and the former~~ rent for the lease extension ~~was $16.71. During the three months ended September 30, 2016, no such leases were signed.~~remained at $19.66 per square foot.

CPA^®:18 – Global 9/6/30/~~2016~~2017 10-Q – 42

Property Level Contribution

The following table presents the property level contribution for our consolidated net-leased and operating properties, as well as a reconciliation to Net ~~loss~~income (loss) attributable to CPA^®:18 – Global (in thousands):


	Three Months Ended September 30,									Nine Months Ended September 30,									Three Months Ended June 30,									Six Months Ended June 30,
	2016			2015			Change			2016			2015			Change			2017			2016			Change			2017			2016			Change
Existing Net-Leased Properties
Lease revenues	$	17,032		$	17,146		$	(114	)	$	50,209		$	51,841		$	(1,632	)	$	24,465		$	24,124		$	341		$	48,773		$	48,588		$	185
Depreciation and amortization	(7,831		)	(7,954		)	123			(23,348		)	(23,830		)	482			(10,669		)	(11,473		)	804			(21,260		)	(22,997		)	1,737
Property expenses	(777		)	(449		)	(328		)	(2,014		)	(1,807		)	(207		)	(4,123		)	(997		)	(3,126		)	(6,608		)	(2,077		)	(4,531		)
Property level contribution	8,424			8,743			(319		)	24,847			26,204			(1,357		)	9,673			11,654			(1,981		)	20,905			23,514			(2,609		)
Recently Acquired Net-Leased Properties
Lease revenues	7,719			4,124			3,595			23,130			5,517			17,613			983			—			983			1,009			—			1,009
Depreciation and amortization	(3,321		)	(1,812		)	(1,509		)	(10,797		)	(2,452		)	(8,345		)	(340		)	—			(340		)	(357		)	—			(357		)
Property expenses	(605		)	(463		)	(142		)	(1,445		)	(304		)	(1,141		)	(118		)	—			(118		)	(167		)	—			(167		)
Property level contribution	3,793			1,849			1,944			10,888			2,761			8,127			525			—			525			485			—			485
Properties Sold
Revenues	—			405			(405		)	—			1,775			(1,775		)
Depreciation and amortization	—			—			—			—			—			—
Property expenses	—			—			—			—			—			—
Property level contribution	—			405			(405		)	—			1,775			(1,775		)
Existing Operating Properties
Revenues	4,875			4,431			444			14,131			12,593			1,538			17,570			16,064			1,506			34,306			31,367			2,939
Depreciation and amortization	(1,855		)	(2,068		)	213			(6,052		)	(6,798		)	746			(5,863		)	(8,520		)	2,657			(12,379		)	(17,200		)	4,821
Property expenses	(2,160		)	(1,916		)	(244		)	(6,282		)	(5,492		)	(790		)	(7,610		)	(7,356		)	(254		)	(14,746		)	(14,033		)	(713		)
Property level contribution	860			447			413			1,797			303			1,494			4,097			188			3,909			7,181			134			7,047
Recently Acquired Operating Properties
Revenues	13,836			7,877			5,959			38,059			14,739			23,320			2,746			1,778			968			5,390			2,112			3,278
Depreciation and amortization	(7,869		)	(5,818		)	(2,051		)	(22,574		)	(11,223		)	(11,351		)	(1,856		)	(1,399		)	(457		)	(3,683		)	(1,698		)	(1,985		)
Property expenses	(6,474		)	(3,464		)	(3,010		)	(16,979		)	(6,168		)	(10,811		)	(838		)	(481		)	(357		)	(1,736		)	(594		)	(1,142		)
Property level contribution	(507		)	(1,405		)	898			(1,494		)	(2,652		)	1,158			52			(102		)	154			(29		)	(180		)	151
Total Property Level Contribution
Lease revenues	24,751			21,675			3,076			73,339			59,133			14,206
Property expenses	(1,382		)	(912		)	(470		)	(3,459		)	(2,111		)	(1,348		)
Operating property revenues	18,711			12,308			6,403			52,190			27,332			24,858
Operating property expenses	(8,634		)	(5,380		)	(3,254		)	(23,261		)	(11,660		)	(11,601		)
Depreciation and amortization	(20,876		)	(17,652		)	(3,224		)	(62,771		)	(44,303		)	(18,468		)
Property Level Contribution	12,570			10,039			2,531			36,038			28,391			7,647			14,347			11,740			2,607			28,542			23,468			5,074
Add other income:
Interest income and other	805			484			321			2,475			1,900			575			2,008			743			1,265			3,808			1,670			2,138
Less other expenses:
Asset management fees	(2,547		)	(2,098		)	(449		)	(7,424		)	(5,244		)	(2,180		)	(2,767		)	(2,468		)	(299		)	(5,476		)	(4,877		)	(599		)
General and administrative	(1,601		)	(2,735		)	1,134			(5,151		)	(6,459		)	1,308			(1,752		)	(1,514		)	(238		)	(3,481		)	(3,550		)	69
Acquisition expenses	(36		)	(10,795		)	10,759			(4,747		)	(34,575		)	29,828			7			(2,816		)	2,823			(45		)	(4,711		)	4,666
Other Income and Expenses
Interest expense	(11,025		)	(7,970		)	(3,055		)	(31,705		)	(24,065		)	(7,640		)	(11,791		)	(10,320		)	(1,471		)	(23,244		)	(20,680		)	(2,564		)
Other income and (expenses)	87			(2,324		)	2,411			1,120			(4,256		)	5,376			9,459			(2,952		)	12,411			12,121			1,033			11,088
Equity in losses of equity method investment in real estate																			(254		)	—			(254		)	(353		)	—			(353		)
	(10,938		)	(10,294		)	(644		)	(30,585		)	(28,321		)	(2,264		)	(2,586		)	(13,272		)	10,686			(11,476		)	(19,647		)	8,171
Loss before income taxes and gain (loss) on sale of real estate	(1,747		)	(15,399		)	13,652			(9,394		)	(44,308		)	34,914
Income (loss) before income taxes and loss on sale of real estate																			9,257			(7,587		)	16,844			11,872			(7,647		)	19,519
(Provision for) benefit from income taxes	(103		)	1,062			(1,165		)	(303		)	854			(1,157		)	(1,123		)	133			(1,256		)	(1,193		)	(200		)	(993		)
Loss before gain (loss) on sale of real estate	(1,850		)	(14,337		)	12,487			(9,697		)	(43,454		)	33,757
Gain (loss) on sale of real estate, net of tax	—			6,654			(6,654		)	(63		)	6,654			(6,717		)
Net Loss	(1,850		)	(7,683		)	5,833			(9,760		)	(36,800		)	27,040
Income (loss) before loss on sale of real estate																			8,134			(7,454		)	15,588			10,679			(7,847		)	18,526
Loss on sale of real estate, net of tax																			—			—			—			—			(63		)	63
Net Income (Loss)																			8,134			(7,454		)	15,588			10,679			(7,910		)	18,589
Net income attributable to noncontrolling interests	(2,231		)	(2,092		)	(139		)	(6,730		)	(5,096		)	(1,634		)	(2,350		)	(2,758		)	408			(4,274		)	(4,499		)	225
Net Loss Attributable to CPA^®:18 – Global	$	(4,081	)	$	(9,775	)	$	5,694		$	(16,490	)	$	(41,896	)	$	25,406
Net Income (Loss) Attributable to CPA^®:18 – Global																			$	5,784		$	(10,212	)	$	15,996		$	6,405		$	(12,409	)	$	18,814

CPA^®:18 – Global 9/6/30/~~2016~~2017 10-Q – 43

Property level contribution is a non-GAAP ~~financial~~ measure that we believe to be a useful supplemental measure for management and investors in evaluating and analyzing the financial results of our net-leased and operating properties over time. Property level contribution presents the lease and operating property revenues, less property expenses and depreciation and amortization. We believe that Property level contribution allows for meaningful comparison between periods of the direct costs of owning and operating our net-leased assets and operating properties. When a property is leased on a net lease basis, reimbursable tenant costs are recorded as both income and property expense and, therefore, have no impact on the Property level contribution. While we believe that Property level contribution is a useful supplemental measure, it should not be considered as an alternative to Net ~~loss~~income (loss) attributable to CPA^®:18 – Global as an indication of our operating performance.

Existing Net-Leased Properties

Existing net-leased properties are those we acquired prior to January 1, ~~2015 and were not sold during the periods presented.~~2016. For the periods presented, there were 4254 existing net-leased properties.

For the three and ~~nine~~six months ended ~~September~~June 30, ~~2016~~2017 compared to the same periods in ~~2015,~~2016, property level contribution for existing net-leased properties decreased by ~~$0.3~~$2.0 million and ~~$1.4~~$2.6 million, ~~respectively. The decrease for the nine months ended September 30, 2016 compared to 2015 was~~respectively, primarily due to ~~the weakening~~increased property expenses resulting from bad debt expense of ~~the Norwegian krone between the periods, which reduced the lease revenues on several~~$1.6 million and $3.0 million, respectively, associated with two of our ~~properties denominated in this currency.~~jointly-owned investments during 2017.

Recently Acquired Net-Leased Properties

Recently acquired net-leased properties are those that we acquired or placed into service subsequent to December 31, ~~2014~~.2015. For the periods presented, there were three recently acquired net-leased properties.

For the three and ~~nine~~six months ended ~~September~~June 30, ~~2016,~~2017, compared to the same periods in ~~2015,~~2016, property level contribution from recently acquired net-leased properties increased by ~~$1.9~~$0.5 million, primarily due to an increase in revenues relating to leases associated with an acquisition in the first quarter of 2017 and ~~$8.1 million, respectively, primarily as a result of the properties we acquired or~~two build-to-suits placed into service during ~~2015 and 2016.~~the second quarter of 2017.

~~Properties Sold~~

In August 2015, we sold five industrial facilities back to subsidiaries of Crowne Group Inc., which were previously classified as Net investments in direct financing leases in the consolidated financial statements. These dispositions were made as a result of the tenants exercising their purchase options. For the three and nine months ended September 30, 2015, property level contribution from these properties was $0.4 million and $1.8 million, respectively, which excludes the gain on sale of real estate of $6.7 million that we recognized as a result of this disposition.

Existing Operating Properties

Existing operating properties are those we acquired prior to January 1, ~~2015.~~2016. For the periods presented, there were 1662 existing operating properties.

For the three ~~and nine~~ months ended ~~September~~June 30, ~~2016~~2017 compared to the same ~~periods~~period in ~~2015,~~2016, property level contribution ~~for~~from existing operating properties increased by ~~$0.4~~$3.9 million, primarily due to an increase in revenues of $1.5 million and ~~$1.5 million, respectively.~~a decrease in depreciation and amortization expense of $2.7 million. The increase in revenues was primarily due to ~~the~~an increase of ~~our~~the average occupancy rate for our self-storage properties from ~~September~~June 30, ~~2015~~2016 to ~~September~~June 30, ~~2016,~~2017, which rose from ~~88.2%~~91.6% to ~~91.3%~~92.8%, respectively. The decrease in depreciation and amortization expense was primarily due to in-place lease intangible assets becoming fully amortized subsequent to June 30, 2016.

For the six months ended June 30, 2017, compared to the same period in 2016, property level contribution from existing operating properties increased by $7.0 million, primarily due to an increase in revenues of $2.9 million and a decrease in depreciation and amortization expense of $4.8 million. The increase in revenues was primarily due to an increase of the average occupancy rate for our self-storage properties from June 30, 2016 to June 30, 2017, which rose from 91.6% to 92.8%, respectively. The decrease in depreciation and amortization expense was primarily due to in-place lease intangible assets becoming fully amortized subsequent to June 30, 2016.

Recently Acquired Operating Properties

Recently acquired operating properties are those that we acquired or placed into service subsequent to December 31, 2015. For the periods presented, there were ten recently acquired operating properties.

For the three ~~and nine~~ months ended ~~September~~June 30, ~~2016,~~2017, compared to the same ~~periods~~period in ~~2015,~~2016, property level contribution from recently acquired operating properties remained substantially flat due to increased lease revenues of $1.0 million being offset by ~~$0.9~~increased depreciation and amortization expense and property expenses of $0.5 million and ~~$1.2~~$0.4 million, respectively. These increases were ~~primarily~~ due to the operating properties we acquired and placed into service, primarily a completed student-housing development, during ~~2015~~2016 and ~~2016.~~

2017.

CPA^®:18 – Global 9/6/30/~~2016~~2017 10-Q – 44

For the six months ended June 30, 2017, compared to the same period in 2016, property level contribution from recently acquired operating properties remained substantially flat due to increased lease revenues of $3.3 million being offset by increased depreciation and amortization expense and property expenses of $2.0 million and $1.1 million, respectively. These increases were due to the operating properties we acquired and placed into service, primarily a completed student-housing development, during 2016 and 2017.

Other Revenues and Expenses

Interest Income and Other

For the three and six months ended June 30, 2017, compared to the same periods in 2016, interest income and other increased by $1.3 million and $2.1 million, respectively, primarily due to interest earned on our mezzanine loan investment that was acquired in November 2016.

Property Expenses — Asset Management Fees

For the three and ~~nine~~six months ended ~~September~~June 30, ~~2016,~~2017, compared to the same periods in ~~2015,~~2016, asset management fees increased by ~~$0.4~~$0.3 million and ~~$2.2~~$0.6 million, respectively, due to ~~the growth in our~~ investment volume during ~~2015~~2017 and 2016, which increased the asset base from which our Advisor earns a fee.

General and Administrative

For the three ~~and nine~~ months ended ~~September~~June 30, ~~2016,~~2017, compared to the same ~~periods~~period in ~~2015,~~2016, general and administrative expenses ~~decreased~~increased by ~~$1.1~~$0.2 million, ~~and $1.3 million, respectively,~~ primarily due to a decrease in broker-dealer expenses of $0.7 million and $1.8 million, respectively, and a decrease in professional fees of $0.8 million for both the three and nine months ended September 30, 2016, partially offset by an increase in personnel and overhead expenses reimbursed to our Advisor of ~~$0.2 million and $1.1 million, respectively.~~$0.1 million. The ~~decrease in broker dealer expenses~~increase was ~~primarily attributable~~due to our higher trailing four quarters of reported revenues compared to those of the Managed Programs during the three months ended June 30, 2017.

For the six months ended June 30, 2017, compared to the change in accounting treatment for the annual distribution and shareholder servicing fee in connection with our Class C common stock. Prior to the fourth quarter of 2015, we recorded the annual distribution and shareholder servicing fee within Generalsame period 2016, general and administrative expenses in our consolidated financial statements. As of December 31, 2015, the estimated future costs of such expenses have been included as a liability with an offset to additional paid-in capital. The liability is reduced as payments are made. The decrease in professional fees was primarily attributable to the decrease in investment volume forremained relatively flat.

Acquisition Expenses

For the three and ~~nine~~six months ended ~~September~~June 30, ~~2016,~~2017, compared to the same periods in ~~2015. The increases in personnel and overhead expenses were a result of our increased revenues, which had a direct impact on the costs allocated to us by our Advisor under the advisory agreement (Note 4~~).

~~Acquisition Expenses~~

~~For the three and nine months ended September 30,~~ 2016, ~~compared to the same periods in 2015,~~ acquisition expenses decreased by ~~$10.8~~$2.8 million and ~~$29.8~~$4.7 million, respectively, primarily due to a decrease in investment volume for acquisitions that were deemed to be business combinations, for which fees are required to be expensed under current accounting ~~guidance.~~guidance, due to our early adoption, on January 1, 2017, of ASU 2017-01, which clarified when transactions should be accounted for as acquisitions of assets or businesses (Note 2).

Interest Expense

Our interest expense is directly impacted by the mortgage ~~and bond~~loans or other financing obtained or assumed in connection with our investing ~~activity. During the three and nine months ended September 30, 2016, we obtained financing of~~ ~~$35.0 million and $136.2 million, respectively~~activity (Note 109).

For the three and ~~nine~~six months ended ~~September~~June 30, ~~2016,~~2017, compared to the same periods in ~~2015,~~2016, interest expense increased by ~~$3.1~~$1.5 million and ~~$7.6~~$2.6 million, respectively, primarily due to an increase in mortgage and bond financing obtained or assumed in connection with our investing activity during ~~2015~~the respective periods. Our average outstanding debt balance was $1.2 billion and ~~2016.~~$1.1 billion during both the three and six months ended June 30, 2017 and 2016, respectively. Our weighted-average interest rate was 4.1% during both the three and six months ended June 30, 2017 and 2016, respectively.

CPA^®:18 – Global 6/30/2017 10-Q– 45

Other Income and (Expenses)

Other income and (expenses) primarily consists of gains and losses on foreign currency transactions, and derivative ~~instruments, and extinguishment of debt.~~instruments. We make intercompany loans to a number of our foreign subsidiaries, most of which do not have the U.S. dollar as their functional currency. Remeasurement of foreign currency intercompany transactions that are scheduled for settlement, consisting primarily of accrued interest and short-term loans, are included in the determination of net income. We also recognize gains or losses on foreign currency transactions when we repatriate cash from our foreign investments or hold foreign currencies in entities with a U.S. dollar currency designation. In addition, we have certain derivative instruments, including foreign currency contracts, that are not designated as hedges for accounting purposes, for which realized and unrealized gains and losses are included in earnings. The timing and amount of such gains or losses cannot always be estimated and are subject to fluctuation.

For the three months ended ~~September~~June 30, ~~2016,~~2017, we recognized net other income of ~~$0.1~~$9.5 million, which was primarily comprised of ~~$0.3~~$8.5 million of realized and unrealized foreign currency transaction gains related to our international investments, primarily related to our short-term intercompany loans, $0.4 million of realized gains recognized on foreign currency forward contracts and collars, and ~~$0.3~~$0.4 million of gains recognized on the change in fair value of rent ~~guarantees, partially offset by $0.6~~guarantees.

For the six months ended June 30, 2017, we recognized net other income of $12.1 million, which was primarily comprised of $10.5 million of realized and unrealized foreign currency transaction gains related to our international investments, $0.8 million of realized gains recognized on foreign currency forward contracts and collars, and $0.5 million of gains recognized on the change in the fair value of rent guarantees.

For the three months ended June 30, 2016, we recognized net other expenses of $3.0 million, which was primarily comprised of $4.3 million of realized and unrealized foreign currency transaction losses related to our international investments, ~~which was primarily related to our short-term intercompany loans.~~

~~CPA~~^®~~:18 – Global 9/30/2016 10-Q~~– 45

partially offset by $0.9 million of gains recognized on a change in fair value of rent guarantees and $0.3 million of gains recognized on foreign currency forward contracts and collars.

For the ~~three~~six months ended September 30, 2015, we recognized net other expense of $2.3 million, which was primarily comprised of loss on extinguishment of debt of $2.6 million largely related to our disposal of the Crowne Group Inc. properties and the refinancing of certain mortgage loans, partially offset by interest income received on our cash balances held with financial institutions of $0.4 million.

~~For the nine months ended September~~June 30, 2016, we recognized net other income of ~~$1.1~~$1.0 million, which was primarily comprised of ~~$1.1~~the $0.9 million of gains recognized on the change in fair value of rent guarantees, ~~$0.4~~$0.7 million of gains recognized on derivatives, and $0.2 million of interest income received on our cash balances held with financial institutions, ~~and $0.2 million of gains recognized on derivatives,~~ partially offset by ~~$0.4~~$0.8 million of realized and unrealized foreign currency transaction losses related to our international investments.

Equity in Losses of Equity Method Investment in Real Estate

For the ~~nine~~three and six months ended ~~September~~June 30, ~~2015,~~2017, we recognized ~~net other expense~~equity in losses of ~~$4.3 million, which was primarily comprised~~equity method investment in real estate of ~~realized and unrealized foreign currency transaction losses related to our international investments of $4.3~~$0.3 million and ~~loss on extinguishment~~$0.4 million, respectively, which were primarily due to the commencement of ~~debt~~operations in one Canadian self-storage facility upon the completion of ~~$2.3 million, partially offset by interest income received on our cash balances held with financial institutions~~a distinct phase of ~~$1.5 million and gains recognized on derivatives of $0.8 million.~~the overall development in July 2016.

(Provision for) Benefit from Income Taxes

Our provision for income taxes is primarily related to our international properties.

For the three and ~~nine~~six months ended ~~September~~June 30, ~~2016, provision for income taxes was~~ ~~$0.1 million and $0.3 million, respectively, as~~2017 compared to the same periods in ~~2015 that was in a tax benefit position of $1.1~~2016, provision for income taxes increased by $1.3 million and ~~$0.9~~$1.0 million, respectively, ~~or a change of $1.2 million for both periods. The change is~~ primarily due to ~~$0.8 million of~~an increased overall tax rate for our property located in Mauritius. Additionally, a ~~deferred~~higher tax ~~benefit associated with one of our foreign investments~~provision resulted from revenue generated from a building expansion that ~~we acquired during the three and nine months ended September~~was placed into service in Slovakia subsequent to June 30, ~~2015.~~2016.

~~Gain on Sale of Real Estate, Net of Tax~~

For both the three and nine months ended September 30, 2015, we sold five industrial facilities back to the subsidiaries of Crowne Group Inc. for $35.7 million and recognized a gain on sale of real estate, net of tax of $6.7 million.

Net Income Attributable to Noncontrolling Interests

For the three ~~and nine~~ months ended ~~September~~June 30, ~~2016,~~2017, compared to the same ~~periods~~period in ~~2015,~~2016, net income attributable to noncontrolling interests ~~increased~~decreased by ~~$0.1~~$0.4 million, ~~and $1.6 million, respectively. The increase for~~primarily due to the ~~three~~bad debt expense associated with two jointly owned investments.

For the six months ended ~~September~~June 30, 2017, compared to the same period in 2016, ~~was~~net income attributable to noncontrolling interest decreased by $0.2 million, primarily due to the bad debt expense associated with two jointly owned investments, offset by an increase in the ~~income generated from certain of our joint-venture investments. The increase for the nine months ended September 30, 2016 was primarily due to an increase in the distribution of~~ available cash ofgenerated by the Operating Partnership, which we refer to as the Available Cash Distribution (Note 43).

~~Modified Funds from Operations and Adjusted Modified Funds from Operations~~

~~MFFO and Adjusted MFFO are non-GAAP measures that we use to evaluate our business. For a definition of MFFO and Adjusted MFFO, and a reconciliation to net loss attributable to CPA~~^®~~:18 – Global, see~~ ~~Supplemental Financial Measures~~ ~~below.~~

For the three and nine months ended September 30, 2016, compared to the same periods in 2015, MFFO increased by $2.9 million and $13.4 million, respectively, primarily as a result of the accretive impact of our investments acquired or placed into service during 2015 and 2016.

For the three and nine months ended September 30, 2016, compared to the same periods in 2015, Adjusted MFFO increased by $4.1 million and $15.1 million, respectively, primarily as a result of the accretive impact of our investments acquired or placed into service during 2015 and 2016.

~~Liquidity and Capital Resources~~

Our principal demands for funds will be for the acquisition of real estate and real estate related investments and the payment of acquisition-related expenses, operating expenses, interest and principal on current and future indebtedness, and distributions to stockholders. We currently expect that, for the short-term, these cash requirements will be funded by our cash on hand, financings, the uninvested capital remaining from our initial public offering, and loans from our Advisor when necessary (~~Note 14~~). We raised aggregate gross proceeds in our initial public offering of approximately $1.2 billion through April 2, 2015, which is the date we closed our offering. We expect that in the future, as our portfolio grows and matures, our properties will provide sufficient cash flow to cover operating expenses and the payment of stockholder distributions.

CPA^®:18 – Global 9/6/30/~~2016~~2017 10-Q – 46

Liquidity and Capital Resources

We use the cash flow generated from our investments primarily to meet our operating expenses, service debt, and fund distributions to stockholders. We currently expect that, for the short-term, the aforementioned cash requirements will be funded by our cash on hand and financings. We may also use proceeds from financings and asset sales for the acquisition of real estate and real estate-related investments.

Our liquidity would be adversely affected by unanticipated costs and greater-than-anticipated operating expenses. To the extent that our working capital reserve is insufficient to satisfy our cash requirements, additional funds may be provided from cash generated from operations or through short-term ~~borrowings from third parties and from our Advisor.~~borrowings. In addition, we may incur indebtedness in connection with the acquisition of real estate, refinance the debt thereon, arrange for the leveraging of any previously unfinanced property, or reinvest the proceeds of financings or refinancings in additional properties.

Sources and Uses of Cash During the Period

We closed our initial public offering on April 2, 2015 and have invested the proceeds of that offering. We expect to ~~use the~~continue to invest, primarily in a diversified portfolio of income-producing commercial properties and other real estate-related assets, with our primary source of operating cash flow to be generated from cash flow from our ~~investments primarily to pay our operating expenses, service debt and fund distributions to our stockholders. Our~~investments. We expect that these cash flows will fluctuate periodically due to a number of factors, which may include, among other things: the timing of purchases and sales of real estate; the timing of ~~our build-to-suit fundings; the timing of~~ the receipt of proceeds from, and the repayment of, non-recourse mortgage loans and bonds payable, and the receipt of lease revenues; whether our Advisor receives ~~its~~ fees in shares of our common stock or cash, ~~or a combination of both (as elected by~~which our board of directors must elect after consultation with our ~~Advisor);~~Advisor; the timing and characterization of distributions received from equity investments in real estate; the timing of payments of ~~fees and~~ the Available Cash Distributions to our Advisor; and changes in foreign currency exchange rates. Despite these fluctuations, we believe our investments will generate sufficient cash from operations to meet our normal recurring short-term and long-term liquidity ~~needs in~~needs. We may also use existing cash resources, the ~~future as described below. However, as we continue~~proceeds of non-recourse mortgage loans, proceeds from notes payable to ~~invest the capital raised~~WPC, sales of assets, distributions reinvested in our ~~initial public offering, it may be necessary~~common stock through our DRIP, and the issuance of additional equity securities to ~~use~~meet these needs. We assess our ability to access capital on an ongoing basis. Our sources and uses of cash during the ~~proceeds from our offering to fund our operating activities and distributions to our stockholders.~~period are described below.

Operating Activities — Net cash provided by operating activities increased by ~~$31.6~~$7.5 million during the ~~nine~~six months ended ~~September~~June 30, ~~2016~~2017 as compared the same period in ~~2015,~~2016, primarily reflecting the impact of investments acquired during ~~2015~~2016 and ~~2016.~~2017.

Investing Activities — Our investing activities are generally comprised of real estate purchases, funding of build-to-suit development projects, payment of deferred acquisition fees to our Advisor for asset acquisitions, and capitalized property-related costs.

Net cash used in investing activities totaled ~~$147.2~~$56.5 million for the ~~nine~~six months ended ~~September~~June 30, ~~2016.~~2017. This was primarily the result of cash outflows of ~~$81.1~~$30.5 million to fund construction costs of our build-to-suit projects ~~and $55.3~~(Note 4), $27.7 million for our real estate ~~investments.~~investments, $5.6 million for capital contributions to our equity investments, and $3.1 million for capital expenditures on our owned real estate. We also had cash inflows of $12.1 million for value added taxes refunded in connection with real estate acquisitions.

Financing Activities — Net cash ~~provided by~~used in financing activities totaled ~~$57.6~~$1.9 million for the ~~nine~~six months ended ~~September~~June 30, ~~2016.~~2017. This was primarily due to ~~proceeds of $106.6 million from non-recourse mortgage financings and $30.6 million of net proceeds received through our distribution reinvestment plan. We also had~~ cash outflows of ~~$60.9~~$42.2 million related to distributions paid to our stockholders, ~~$11.6~~$8.3 million for distributions to noncontrolling interests, ~~and $7.9~~$7.3 million for the repurchase of shares of our common stock pursuant to our redemption ~~program.~~program, and $6.3 million for scheduled payments and prepayments of mortgage loan principal. We received cash proceeds of $32.6 million from non-recourse mortgage financings (Note 9), $21.2 million of net proceeds received through our DRIP, $6.7 million net proceeds from notes payable to WPC (Note 3), and $2.3 million contributions from noncontrolling interest.

CPA^®:18 – Global 6/30/2017 10-Q– 47

Distributions

Our objectives are to generate sufficient cash flow over time to provide stockholders with distributions and to continue to seek investments with potential for capital appreciation throughout varying economic cycles. For the ~~nine~~six months ended ~~September~~June 30, ~~2016,~~2017, we ~~paid~~declared distributions to stockholders of ~~$60.9~~$42.6 million, which were comprised of ~~$28.4~~$20.3 million of cash distributions and ~~$32.5~~$22.3 million reinvested by stockholders in shares of our common stock pursuant to our ~~distribution reinvestment plan.~~DRIP. From inception through ~~September~~June 30, ~~2016,~~2017, we declared distributions to stockholders totaling ~~$195.4~~$259.0 million, which were comprised of cash distributions of ~~$91.2~~$121.4 million and ~~$104.1~~$137.6 million reinvested by stockholders in shares of our common stock pursuant to our ~~distribution reinvestment plan.~~DRIP. We believe that FFO, a non-GAAP measure, is the most appropriate metric to evaluate our ability to fund distributions to stockholders. For a discussion of FFO, see Supplemental Financial Measures below.

Over the life of our company, the regular quarterly cash distributions we pay are expected to be principally sourced from our FFO or cash flow from operations. However, we have funded a portion of our cash distributions to date using net proceeds from our initial public offering and there can be no assurance that our FFO or cash flow from operations will be sufficient to cover our future distributions. Our distribution coverage using FFO was approximately ~~68.0%~~94.9% and ~~23.2%~~35.0% of total distributions declared for the ~~nine~~six months ended ~~September~~June 30, ~~2016~~2017 and on a cumulative basis through that date, respectively, with the balance funded primarily with proceeds from our ~~offering. Our distribution coverage using cash flow from operations was approximately~~ ~~90.9%~~offering and, ~~49.3%~~to a lesser extent, other sources. We funded 93.3% of total distributions declared for the ~~nine~~six months ended ~~September~~June 30, ~~2016 and on a~~2017 from Net cash provided by operating activities. Since inception, we have funded 57.0% of our cumulative ~~basis through that date, respectively,~~distributions from Net cash provided by operating activities, with the ~~balance~~remaining 43.0%, or $111.3 million, being funded primarily with proceeds from our ~~offering.~~offering and, to a lesser extent, other sources. FFO and cash flow from operations are first applied to current period distributions, then to any deficit from prior period cumulative

~~CPA~~^®~~:18 – Global 9/30/2016 10-Q~~– 47

negative FFO or cumulative negative cash flow, as applicable, and finally to future period distributions. ~~Until~~As we have fully invested the proceeds of our offering, we expect that in the future, if distributions cannot be fully sourced from FFO or cash flow from operations, they may be sourced from the proceeds of financings or the sales of ~~assets with any remainder to be funded by the uninvested proceeds from our offering.~~assets. In determining our distribution policy ~~during the periods in which~~to date, we ~~are investing capital, we place~~have placed primary emphasis on projections of cash flow from operations, together with cash distributions from our unconsolidated investments, rather than on historical results of operations (though these and other factors may be a part of our consideration). Thus, in setting a distribution rate, we focus primarily on expected returns from those investments we have already made, including ongoing build-to-suit projects that have not yet been placed into service, as well as our anticipated rate of return from any future investments, to assess the sustainability of a particular distribution rate over time.

Redemptions

We maintain a quarterly redemption program pursuant to which we may, at the discretion of our board of directors, redeem shares of our common stock from stockholders seeking liquidity. During the ~~nine~~six months ended ~~September~~June 30, ~~2016,~~2017, we received ~~197~~222 and 4140 requests to redeem ~~705,233~~822,433 and ~~286,875~~127,524 shares of Class A and Class C common stock, respectively, ~~most~~all of which were ~~redeemed in 2016,~~satisfied as of the date of this Report, at a weighted-average price, net of redemption fees, of ~~$7.94~~$7.77 and ~~$8.01~~$7.55 per share, respectively, totaling ~~$7.9~~$7.3 million for both Class A and Class C common stock. Except for redemptions sought in special circumstances, the redemption price of the shares listed above was 95% of our most recently published NAV. For shares redeemed under special circumstances, the redemption price was the greater of the price paid to acquire the shares from us or 95% of our most recently published NAV.

CPA^®:18 – Global 6/30/2017 10-Q– 48

Summary of Financing

The table below summarizes our non-recourse ~~debt~~mortgages and bonds payable (dollars in thousands):


	September 30, 2016			December 31, 2015 ^(a)			June 30, 2017			December 31, 2016
Carrying Value(a)
Fixed rate	$	1,014,053		$	910,483		$	1,037,284		$	1,009,817
Variable rate:
Amount subject to interest rate swaps and caps	75,219			51,747			100,252			83,007
Amount subject to floating interest rate	41,472			36,983			40,935			39,319
Amount of fixed-rate debt subject to interest rate reset features	14,888			—
Amount of variable rate debt subject to interest rate reset features							31,544			25,268
	131,579			88,730			172,731			147,594
	$	1,145,632		$	999,213		$	1,210,015		$	1,157,411
Percent of Total Debt
Fixed rate	89		%	91		%	86		%	87		%
Variable rate	11		%	9		%	14		%	13		%
	100		%	100		%	100		%	100		%
Weighted-Average Interest Rate at End of Period
Fixed rate	4.1		%	4.1		%	4.1		%	4.1		%
Variable rate ^(b)(a)	3.7		%	3.5		%	3.7		%	3.8		%

___________

(a)

~~In accordance with ASU 2015-03, we reclassified~~Aggregate debt balance includes unamortized deferred financing costs ~~from Other assets, net to Non-recourse debt, net~~totaling $8.7 million and ~~Bonds payable, net~~$8.9 million as of June 30, 2017 and December 31, ~~2015 (Note 3~~).

2016, respectively, and unamortized premium totaling $1.0 million and $0.5 million as of June 30, 2017 and December 31, 2016, respectively.


(b)	The impact of our derivative instruments is reflected in the weighted-average interest rates.

~~CPA~~^®~~:18 – Global 9/30/2016 10-Q~~– 48

Cash Resources

At ~~September~~June 30, ~~2016,~~2017, our cash resources consisted of cash and cash equivalents totaling ~~$84.8~~$55.5 million. Of this amount, ~~$25.4~~$28.8 million, at then-current exchange rates, was held in foreign subsidiaries, but we could be subject to restrictions or significant costs should we decide to repatriate these amounts. As of ~~September~~June 30, ~~2016,~~2017, we had ~~$68.8~~$39.4 million available to borrow under third-party financing arrangements for either funding of construction or mortgage financing upon completion of certain of our build-to-suit and development projects (Note 109), which excludes $41.0 million related to the university complex development site located in Accra, Ghana (Note 54) that is subject to the tenant obtaining a letter of credit. Our cash resources may be used for future investments and can be used for working capital needs, other commitments, and distributions to our stockholders.

In July 2016, our board of directors and the board of directors of WPC approved unsecured loans from WPC to us, at the sole discretion of WPC’s management, of up to $50.0 million in the aggregate, at a rate equal to the rate at which WPC ~~is able to~~can borrow funds under its senior credit facility, for acquisition funding purposes. ~~On October 31, 2016,~~At June 30, 2017, we ~~received $27.5~~had $34.2 million of ~~loan proceeds~~such loans outstanding from ~~WPC at an~~WPC. The annual interest rate ~~equal to~~equaled LIBOR plus 1.1% ~~and a maturity~~through February 22, 2017. After that date, ~~of October 31,~~ the annual interest rate equals LIBOR plus 1.0%.

CPA^®:18 – Global 6/30/2017 (10-Q~~Note 14~~).– 49

Cash Requirements

During the next 12 months, we expect that our cash requirements will include payments to acquire new investments, funding capital commitments such as build-to-suit projects, paying distributions to our stockholders and to our affiliates that hold noncontrolling interests in entities we control, making share repurchases pursuant to our redemption plan, and making ~~any~~scheduled debt servicing payments, as well as other normal recurring operating expenses. Balloon payments totaling ~~$18.0~~$16.4 million on our consolidated mortgage loan obligations to third parties are due during the next 12 months. Our Advisor is actively seeking to refinance certain of these loans, although there can be no assurance that it will be able to do so on favorable terms, ifor at all. Additionally, we have two outstanding loans from WPC which are set to mature in October 2017 and May 2018, respectively (Note 3). We expect to fund ~~$106.7~~$90.2 million related to capital and other lease commitments during the next 12 months. We expect to fund future investments, capital commitments, any capital expenditures on existing properties, and scheduled and unscheduled debt payments on our mortgage loans through the use of our cash reserves, cash generated from operations, and ~~financing.~~proceeds from financings and asset sales.

Off-Balance Sheet Arrangements and Contractual Obligations

The table below summarizes our debt, off-balance sheet arrangements, and other contractual obligations (primarily our capital commitments and lease obligations) at ~~September~~June 30, ~~2016~~2017 and the effect that these arrangements and obligations are expected to have on our liquidity and cash flow in the specified future periods (in thousands):

Total
Less than
1 year
1-3 years 3-5 years
More than
5 years
Debt — principal ^(a)
$ 1,154,503
$ 22,568
$ 32,694
$ 189,897
$ 909,344
Interest on borrowings and deferred acquisition fees 328,571
46,518
90,823
84,029
107,201
Capital commitments ^(b)
177,140
106,040
71,100
—
—
Deferred acquisition fees — principal ^(c)
16,243
12,149
4,094
—
—
Other lease commitments ^(d)
12,318
674
1,338
1,098
9,208
Annual distribution and shareholder servicing fee ^(e)
7,868
467
3,881
3,520
—
Asset retirement obligations ^(f)
2,698
—
—
—
2,698
$ 1,699,341
$ 188,416
$ 203,930
$ 278,544
$ 1,028,451



	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Debt, net — principal ^(a)	$	1,217,744	$	22,313	$	53,829	$	366,275	$	775,327
Interest on borrowings and deferred acquisition fees	305,450		49,053		95,492		81,300		79,605
Capital commitments ^(b)	154,307		89,488		64,819		—		—
Loan from WPC — principal ^(c)	34,201		34,201		—		—		—
Operating and other lease commitments ^(d)	12,254		736		1,436		892		9,190
Deferred acquisition fees — principal ^(e)	8,835		7,732		1,103		—		—
Annual distribution and shareholder servicing fee ^(f)	6,560		955		4,048		1,557		—
Asset retirement obligations ^(g)	2,798		—		—		—		2,798
	$	1,742,149	$	204,478	$	220,727	$	450,024	$	866,920

__________


(a)	Represents the non-recourse ~~mortgage~~ debt and bonds payable that we obtained in connection with our investments. At ~~September~~June 30, ~~2016,~~2017, this excludes ~~$8.9~~$8.7 million of deferred financing costs and $1.0 million of unamortized ~~premium.~~premium, net.


(b)	Capital commitments include our current build-to-suit projects totaling ~~$176.4~~$147.5 million (Note 54), a $6.7 million outstanding commitment on a build-to-suit project that has been placed into service, and ~~$0.7~~$0.1 million related to other construction commitments.


(c)	~~Represents deferred acquisition fees due~~ On August 4, 2017, we repaid $15.2 million of loans outstanding to ~~our Advisor as a result of our acquisitions. These fees are scheduled to be paid in three equal annual installments from the date of each respective acquisition.~~WPC (Note 13).

(d)

~~Other lease~~Operating commitments consist of rental obligations under ground ~~leases and~~leases. Other lease commitments consist of our share of future rents payable pursuant to the advisory agreement for the purpose of leasing office space used for the administration of real estate entities, which is calculated as our allocable portion of WPC’s future minimum rent amounts using the allocation percentages for overhead reimbursement as of ~~September~~June 30, ~~2016~~2017 (Note 43).

~~CPA~~^®~~:18 – Global 9/30/2016 10-Q~~– 49


(e)	Represents deferred acquisition fees due to our Advisor as a result of our acquisitions. These fees are scheduled to be paid in three equal annual installments following the quarter in which a property was purchased.


(f)	Represents the estimated liability for the present value of the remaining annual distribution and shareholder servicing fee in connection with our Class C common stock ~~payable to Carey Financial~~ (Note 43).


~~(f)~~(g)	Represents the amount of future obligations estimated for the removal of asbestos and environmental waste in connection with certain of our acquisitions, payable upon the retirement or sale of the assets.

Amounts in the table above that relate to our foreign operations are based on the exchange rate of the local currencies at ~~September~~June 30, ~~2016~~2017, which consisted primarily of the euro and Norwegian krone and, to a lesser extent, the British pound sterling. At ~~September~~June 30, ~~2016~~2017, we had no material capital lease obligations for which we were the lessee, either individually or in the aggregate.

CPA^®:18 – Global 6/30/2017 10-Q– 50

Equity Method Investment

We have an interest in an unconsolidated investment that relates to a joint venture for the development of self-storage facilities in Canada. This investment is ~~jointly-owned~~jointly owned with a third party, which is also the general partner. At ~~September~~June 30, ~~2016,~~2017, the total equity investment balance for these properties was ~~$14.5~~$20.8 million. The joint venture also had total third-party recourse debt of ~~$10.7~~$17.9 million.

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 FFO, MFFO, and Adjusted MFFO, which are non-GAAP measures. 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, MFFO, and Adjusted MFFO and reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are provided below.

FFO, MFFO, and Adjusted MFFO

Due to certain unique operating characteristics of real estate companies, as discussed below, the National Association of Real Estate Investment Trusts, Inc., or NAREIT, an industry trade group, has 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 revised in February 2004. The White Paper defines FFO as net income or loss computed in accordance with GAAP, excluding gains or losses from sales of property, impairment charges on real estate, and depreciation and amortization from real estate assets; and after adjustments for unconsolidated partnerships and ~~jointly-owned~~jointly owned investments. Adjustments for unconsolidated partnerships and ~~jointly-owned~~jointly owned investments are calculated to reflect FFO. Our FFO calculation complies with NAREIT’s policy described above. However, NAREIT’s definition of FFO does not distinguish between the conventional method of equity accounting and the hypothetical liquidation at book value method of accounting for unconsolidated partnerships and ~~jointly-owned~~jointly owned investments.

The historical accounting convention used for real estate assets requires straight-line depreciation of buildings and improvements, which implies that the value of real estate assets diminishes predictably over time, especially if such assets are not adequately maintained or repaired and renovated as required by relevant circumstances and/or is requested or required by lessees for operational purposes in order to maintain the value disclosed. We believe that, since real estate values historically rise and fall with market conditions, including inflation, interest rates, the business cycle, unemployment, and consumer spending, presentations of operating results for a REIT using historical accounting for depreciation may be less informative. Historical accounting for real estate involves the use of GAAP. Any other method of accounting for real estate such as the fair value method cannot be construed to be any more accurate or relevant than the comparable methodologies of real estate valuation found in GAAP. Nevertheless, we believe that the use of FFO, which excludes the impact of real estate-related depreciation and amortization, as well as impairment charges of real estate-related assets, provides a more complete understanding of our performance to investors and to management; and when compared year over year, reflects the impact on our operations from trends in occupancy rates, rental rates, operating costs, general and administrative expenses, and interest costs, which may not be immediately apparent from net income. In particular, we believe it is appropriate to disregard

~~CPA~~^®~~:18 – Global 9/30/2016 10-Q~~– 50

impairment charges, as this is a fair value adjustment that is largely based on market fluctuations and assessments regarding general market conditions, which can change over time. An asset will only be evaluated for impairment if certain impairment indicators exist. Then a two-step process is performed, of which first is to determine whether an asset is impaired by comparing the carrying value, or book value, to the total estimated undiscounted future cash flows (including net rental and lease revenues, net proceeds on the sale of the property, and any other ancillary cash flows at a property or group level under GAAP) from such asset, then measure the impairment loss as the excess of the carrying value over its estimated fair value. It should be noted, however, that determinations of whether impairment charges have been incurred are based partly on anticipated operating performance, because estimated undiscounted future cash flows from a property (including estimated future net rental and lease revenues, net proceeds on the sale of the property, and certain other ancillary cash flows) are taken into account in determining whether an impairment charge has been incurred. While impairment charges are excluded from the calculation of FFO

CPA^®:18 – Global 6/30/2017 10-Q– 51

described above due to the fact that impairments are based on estimated future undiscounted cash flows, it could be difficult to recover any impairment charges. However, FFO, MFFO, and Adjusted MFFO, as described below, should not be construed to be more relevant or accurate than the current GAAP methodology in calculating net income or in its applicability in evaluating the operating performance of the company. The method utilized to evaluate the value and performance of real estate under GAAP should be construed as a more relevant measure of operational performance and considered more prominently than the non-GAAP measures FFO, MFFO, and Adjusted MFFO and the adjustments to GAAP in calculating FFO, MFFO, and Adjusted MFFO.

Changes in the accounting and reporting promulgations under GAAP (for acquisition fees and expenses from a capitalization/depreciation model to an expensed-as-incurred model) were put into effect in 2009. These changes to GAAP accounting for real estate subsequent to the establishment of NAREIT’s definition of FFO have prompted an increase in cash-settled expenses, such as acquisition fees that are typically accounted for as operating expenses. Management believes these fees and expenses do not affect our overall long-term operating performance. Publicly registered, ~~non-listed~~non-traded REITs typically have a significant amount of acquisition activity and are substantially more dynamic during their initial years of investment and operation. While other start-up entities may also experience significant acquisition activity during their initial years, we believe that non-listed REITs are unique in that they have a limited life with targeted exit strategies within a relatively limited time frame after acquisition activity ceases. We currently intend to begin the process of achieving a liquidity event (i.e., listing of our common stock on a national exchange, a merger or sale of our assets, or another similar transaction) beginning in April 2022, which is seven years following the closing of our initial public offering. Due to the above factors and other unique features of publicly registered, ~~non-listed~~non-traded REITs, the Investment Program Association, an industry trade group, has standardized a measure known as MFFO, which the Investment Program Association has recommended as a supplemental measure for publicly registered ~~non-listed~~non-traded REITs and which we believe to be another appropriate non-GAAP measure to reflect the operating performance of a ~~non-listed~~non-traded REIT having the characteristics described above. MFFO is not equivalent to our net income or loss as determined under GAAP, and MFFO may not be a useful measure of the impact of long-term operating performance on value if we do not continue to operate with a limited life and targeted exit strategy, as currently intended. We believe that, because MFFO excludes costs that we consider more reflective of investing activities and other non-operating items included in FFO, and also excludes acquisition fees and expenses that affect our operations only in periods in which properties are acquired, MFFO can provide, on a going forward basis, an indication of the sustainability (that is, the capacity to continue to be maintained) of our operating performance after the period in which we are acquiring properties and once our portfolio is in place. By providing MFFO, we believe we are presenting useful information that assists investors and analysts to better assess the sustainability of our operating performance now that our initial public offering has been completed and once essentially all of our properties have been acquired. We also believe that MFFO is a recognized measure of sustainable operating performance by the ~~non-listed~~non-traded REIT industry. Further, we believe MFFO is useful in comparing the sustainability of our operating performance, with the sustainability of the operating performance of other real estate companies that are not as involved in acquisition activities. MFFO should only be used to assess the sustainability of a company’s operating performance after a company’s offering has been completed and properties have been acquired, as it excludes acquisition costs that have a negative effect on a company’s operating performance during the periods in which properties are acquired.

We define MFFO, a non-GAAP measure, consistent with the Investment Program Association’s Guideline 2010-01, Supplemental Performance Measure for Publicly Registered, Non-Listed REITs: Modified Funds from Operations,, or the Practice Guideline, issued by the Investment Program Association in November 2010. The Practice Guideline defines MFFO as FFO further adjusted for the following items, included in the determination of GAAP net income, as applicable: acquisition fees and expenses; amounts relating to deferred rent receivables and amortization of above- and below-market leases and liabilities (which are adjusted in order to reflect such payments from a GAAP accrual basis to a cash basis of disclosing the rent and lease payments); accretion of discounts and amortization of premiums on debt investments; nonrecurring impairments of real estate-related investments (i.e., infrequent or unusual, not reasonably likely to recur in the ordinary course of business); mark-to-market adjustments included in net income; nonrecurring gains or losses included in net income from the extinguishment or sale of debt, hedges, foreign exchange, derivatives, or securities holdings where trading of such holdings is not a fundamental

~~CPA~~^®~~:18 – Global 9/30/2016 10-Q~~– 51

attribute of the business plan, unrealized gains or losses resulting from consolidation from, or deconsolidation to, equity accounting, and after adjustments for consolidated and unconsolidated partnerships and ~~jointly-owned~~jointly owned investments, with such adjustments calculated to reflect MFFO on the same basis. The accretion of discounts and amortization of premiums on debt investments, unrealized gains and losses on hedges, foreign exchange, derivatives or securities holdings, unrealized gains and losses resulting from consolidations, as well as other listed cash flow adjustments are adjustments made to net income in calculating the cash flows provided by operating activities and, in some cases, reflect gains or losses that are unrealized and may not ultimately be realized.

CPA^®:18 – Global 6/30/2017 10-Q– 52

Our MFFO calculation complies with the Investment Program Association’s Practice Guideline described above. In calculating MFFO, we exclude acquisition-related expenses, amortization of above- and below-market leases, fair value adjustments of derivative financial instruments, deferred rent receivables, and the adjustments of such items related to noncontrolling interests. Under GAAP, acquisition fees and expenses are characterized as operating expenses in determining operating net income. These expenses are paid in cash by a company. All paid and accrued acquisition fees and expenses will have negative effects on returns to investors, the potential for future distributions, and cash flows generated by the company, unless earnings from operations or net sales proceeds from the disposition of other properties are generated to cover the purchase price of the property, these fees and expenses, and other costs related to such property. Further, under GAAP, certain contemplated non-cash fair value and other non-cash adjustments are considered operating non-cash adjustments to net income in determining cash flow from operating activities.

Our management uses MFFO and the adjustments used to calculate it in order to evaluate our performance against other ~~non-listed~~non-traded REITs, which have limited lives with short and defined acquisition periods and targeted exit strategies shortly thereafter. As noted above, MFFO may not be a useful measure of the impact of long-term operating performance on value if we do not continue to operate in this manner. We believe that MFFO and the adjustments used to calculate it allow us to present our performance in a manner that takes into account certain characteristics unique to ~~non-listed~~non-traded REITs, such as their limited life, defined acquisition period, and targeted exit strategy, and is therefore a useful measure for investors. For example, acquisition costs are generally funded from the proceeds of our offering and other financing sources and not from operations. By excluding expensed acquisition costs, the use of MFFO provides information consistent with management’s analysis of the operating performance of the properties. Additionally, fair value adjustments, which are based on the impact of current market fluctuations and underlying assessments of general market conditions, but can also result from operational factors such as rental and occupancy rates, may not be directly related or attributable to our current operating performance. By excluding such changes that may reflect anticipated and unrealized gains or losses, we believe MFFO provides useful supplemental information.

In addition, our management uses ~~an adjusted MFFO,~~ Adjusted MFFO as another measure of sustainable operating performance. Adjusted MFFO adjusts MFFO for deferred income tax expenses and benefits, which are non-cash items that may cause short-term fluctuations in net income but have no impact on current period cash flows. Additionally, we adjust MFFO to reflect the realized gains/losses on the settlement of foreign currency derivatives to arrive at Adjusted MFFO. Foreign currency derivatives are a fundamental part of our operations in that they help us manage the foreign currency exposure we have associated with cash flows from our international investments.

Presentation of this information is intended to provide useful information to investors as they compare the operating performance of different REITs, although it should be noted that not all REITs calculate FFO, MFFO, and Adjusted MFFO the same way, so comparisons with other REITs may not be meaningful. Furthermore, FFO, MFFO, and Adjusted MFFO are not necessarily indicative of cash flow available to fund cash needs and should not be considered as an alternative to net income as an indication of our performance, as an alternative to cash flows from operations as an indication of our liquidity, or indicative of funds available to fund our cash needs including our ability to make distributions to our stockholders. FFO, MFFO, and Adjusted MFFO should be reviewed in conjunction with other GAAP measurements as an indication of our performance.

Neither the SEC, NAREIT, nor any other regulatory body has passed judgment on the acceptability of the adjustments that we use to calculate FFO, MFFO, and Adjusted MFFO. In the future, the SEC, NAREIT, or another regulatory body may decide to standardize the allowable adjustments across the ~~non-listed~~non-traded REIT industry and we would have to adjust our calculation and characterization of FFO, MFFO, or Adjusted MFFO accordingly.

CPA^®:18 – Global 9/6/30/~~2016~~2017 10-Q – 5253

FFO, MFFO, and Adjusted MFFO were as follows (in thousands):


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015 ^(a)			2017			2016			2017			2016
Net loss attributable to CPA^®:18 – Global	$	(4,081	)	$	(9,775	)	$	(16,490	)	$	(41,896	)
Net income (loss) attributable to CPA^®:18 – Global													$	5,784		$	(10,212	)	$	6,405		$	(12,409	)
Adjustments:
Depreciation and amortization of real property	20,978			17,689			63,078			44,419			18,795			21,495			37,814			42,100
Loss on sale of real estate, net of tax	—			(6,654		)	63			(6,654		)	—			—			—			63
Proportionate share of adjustments to equity in net income of partially owned entities to arrive at FFO:
Depreciation and amortization of real property													89			—			103			—
Proportionate share of adjustments for noncontrolling interests to arrive at FFO	(1,600		)	(1,553		)	(4,792		)	(4,584		)	(1,596		)	(1,611		)	(3,168		)	(3,192		)
Total adjustments	19,378			9,482			58,349			33,181			17,288			19,884			34,749			38,971
FFO attributable to CPA^®:18 – Global — as defined by NAREIT	15,297			(293		)	41,859			(8,715		)
FFO attributable to CPA^®:18 – Global (as defined by NAREIT)													23,072			9,672			41,154			26,562
Adjustments:
Straight-line and other rent adjustments^(b)	(1,127		)	(1,060		)	(3,535		)	(2,853		)
Realized gains on foreign currency, derivatives and other	(786		)	(210		)	(1,890		)	(765		)
Unrealized losses on foreign currency, derivatives and other	680			403			1,276			4,261
Unrealized (gains) losses on foreign currency, derivatives, and other													(8,467		)	4,045			(10,502		)	596
Straight-line and other rent adjustments^(a)													(1,208		)	(1,134		)	(2,355		)	(2,396		)
Realized gains on foreign currency, derivatives, and other													(908		)	(651		)	(1,432		)	(1,104		)
Amortization of premium/discount on debt investments and fair market value adjustments, net	330			217			951			647			184			395			610			621
Above- and below-market rent intangible lease amortization, net ^(c)	(124		)	(32		)	(616		)	44
Acquisition expenses^(d)	36			10,795			4,747			34,575
Loss on extinguishment of debt	—			1,635			—			2,335
Loss (gain) on extinguishment of debt													54			(12		)	54			(12		)
Above- and below-market rent intangible lease amortization, net ^(b)													(35		)	(231		)	(74		)	(492		)
Acquisition expenses^(c)													(7		)	2,816			45			4,711
Proportionate share of adjustments for noncontrolling interests to arrive at MFFO	89			86			208			63			111			16			195			119
Total adjustments	(902		)	11,834			1,141			38,307			(10,276		)	5,244			(13,459		)	2,043
MFFO attributable to CPA^®:18 – Global	14,395			11,541			43,000			29,592			12,796			14,916			27,695			28,605
Adjustments:
Hedging gains	343			308			1,012			870			411			298			859			669
Deferred taxes	48			(1,172		)	(280		)	(1,836		)	143			(116		)	307			(328		)
Total adjustments	391			(864		)	732			(966		)	554			182			1,166			341
Adjusted MFFO attributable to CPA^®:18 – Global	$	14,786		$	10,677		$	43,732		$	28,626		$	13,350		$	15,098		$	28,861		$	28,946

__________

(a)

~~As discussed in~~ ~~Note 2~~, during the second quarter of 2015, we discovered an error related to the capitalization of financing costs associated with the refinancing of a mortgage loan related to our consolidated financial statements as of and for the three months ended March 31, 2015. We corrected this error and revised our consolidated financial statements as of and for the three months ended March 31, 2015, including our presentation of FFO and MFFO. This error resulted in a $0.9 million increase to each of Net loss attributable to CPA^®~~:18 – Global and FFO attributable to CPA~~^®~~:18 – Global, but had no impact on MFFO attributable to CPA~~^®~~:18 – Global for the three months ended March 31, 2015.~~

~~(b)~~

Under GAAP, rental receipts are allocated to periods using an accrual basis. This may result in timing of income recognition that is significantly different than underlying contract terms. By adjusting for these items (to reflect such payments from a GAAP accrual basis to a cash basis of disclosing the rent and lease payments), management believes that MFFO, and Adjusted MFFO provides useful supplemental information on the realized economic impact of lease terms and debt investments, provides insight on the contractual cash flows of such lease terms and debt investments, and aligns results with management’s analysis of operating performance.

~~(c)~~(b)

Under GAAP, certain intangibles are accounted for at cost and reviewed at least annually for impairment, and certain intangibles are assumed to diminish predictably in value over time and amortized, similar to depreciation and amortization of other real estate related assets that are excluded from FFO. However, because real estate values and market lease rates historically rise or fall with market conditions, management believes that by excluding charges relating to amortization of these intangibles, MFFO, and Adjusted MFFO provides useful supplemental information on the performance of the real estate.

CPA^®:18 – Global 9/6/30/~~2016~~2017 10-Q – 5354

~~(d)~~(c)

In evaluating investments in real estate, management differentiates the costs to acquire the investment from the operations derived from the investment. Such information would be comparable only for ~~non-listed~~non-traded REITs that have completed their acquisition activity and have other similar operating characteristics. By excluding expensed acquisition costs, ~~and amortization of deferred acquisition fees,~~ management believes MFFO and Adjusted MFFO ~~provides~~provide useful supplemental information that is comparable for each type of real estate investment and is consistent with management’s analysis of the investing and operating performance of our properties. Acquisition fees and expenses include payments to our Advisor or third parties. Acquisition fees and expenses under GAAP are considered operating expenses and as expenses included in the determination of net income (loss) ~~and income (loss) from continuing operations, both of~~, which ~~are~~is a performance ~~measures~~measure under GAAP. All paid and accrued acquisition fees and expenses will have negative effects on returns to stockholders, the potential for future distributions, and cash flows generated by us, unless earnings from operations or net sales proceeds from the disposition of properties are generated to cover the purchase price of the property, these fees and expenses, and other costs related to the property.

CPA^®:18 – Global 9/6/30/~~2016~~2017 10-Q – 5455

Item 3. 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 risks that we are exposed to are interest rate risk and foreign currency exchange risk. 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 can affect the ability of tenants in a particular industry/region to meet their respective lease obligations. In order to manage this risk, our Advisor views our collective tenant roster as a portfolio and attempts to diversify such portfolio so that we are not overexposed to a particular industry or geographic region.

Generally, we do not use derivative instruments to hedge credit/market risks or for speculative purposes. However, from time to time, we may enter into foreign currency forward contracts and collars to hedge our foreign currency cash flow exposures.

Interest Rate Risk

The values of our real estate, related fixed-rate debt obligations, and ~~note~~notes receivable investments 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 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 assets to 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 have historically attempted to obtain non-recourse mortgage financing on a long-term, fixed-rate basis. However, from time to time, we or our joint investment partners have obtained, and may in the future obtain, variable-rate non-recourse mortgage loans, and, as a result, we have entered into, and may continue to enter into, interest rate swap agreements or interest rate cap agreements with lenders. Interest rate swap agreements effectively convert the variable-rate debt service obligations of a loan to a fixed rate, while interest rate cap agreements limit the underlying interest rate from exceeding a specified strike rate. Interest rate swaps are agreements in which one party exchanges a stream of interest payments for a counterparty’s stream of cash flows over a specific period, and interest rate caps limit the effective borrowing rate of variable-rate debt obligations while allowing participants to share in downward shifts in interest rates. These interest rate swaps and caps are derivative instruments that, where applicable, are designated as cash flow hedges on the forecasted interest payments on the debt obligation. The face amount on which the swaps or caps are based is not exchanged. Our objective in using these derivatives is to limit our exposure to interest rate movements. At ~~September~~June 30, ~~2016~~2017, we estimated that the total fair value of our interest rate swaps and caps, which are included in Other assets, net and Accounts payable, accrued expenses and other liabilities in the consolidated financial statements, was in a net liability position of ~~$3.5~~$0.8 million (Note 98).

At ~~September~~June 30, ~~2016,~~2017, our outstanding debt either bore interest at fixed rates, was swapped or capped to a fixed rate or, in the case of one of our Norwegian investments, inflation-linked to the Norwegian CPI. The annual interest rates on our fixed-rate debt at ~~September~~June 30, ~~2016~~2017 ranged from 1.6% to 5.8%. The contractual annual interest rates on our variable-rate debt at ~~September~~June 30, ~~2016~~2017 ranged from ~~2.2%~~1.6% to 5.1%. Our debt obligations are more fully described in Note 109 and Liquidity and Capital Resources –— Summary of Financing in Item 2 above. The following table presents principal cash outflows for the remainder of ~~2016,~~2017, each of the next four calendar years following December 31, ~~2016,~~2017, and thereafter, based upon expected maturity dates of our debt obligations outstanding at ~~September~~June 30, ~~2016~~2017 (in thousands):


	2016 (Remainder)		2017		2018		2019		2020		Thereafter		Total		Fair value		2017 ^(a) (Remainder)		2018		2019		2020		2021		Thereafter		Total		Fair value
Fixed-rate debt^(a)(b)	$	901	$	21,800	$	4,159	$	4,462	$	114,194	$	877,649	$	1,023,165	$	1,049,460	$	2,158	$	4,525	$	5,154	$	116,786	$	158,022	$	759,824	$	1,046,469	$	1,049,909
Variable rate debt ^(a)(b)	$	216	$	868	$	23,137	$	1,182	$	1,221	$	104,714	$	131,338	$	142,611	$	765	$	23,803	$	1,854	$	7,599	$	11,209	$	126,045	$	171,275	$	183,379

__________


(a)	Excludes $34.2 million of net loan proceeds from WPC, in aggregate, used to partially finance a new investment and the final payment to the developer for a build-to-suit project (Note 3).


(b)	Amounts are based on the exchange rate at ~~September~~June 30, ~~2016,~~2017, as applicable.

CPA^®:18 – Global 9/6/30/~~2016~~2017 10-Q – 5556

The estimated fair value of our fixed-rate debt and variable-rate debt, which ~~has~~ either have effectually been ~~effectively~~ converted to a fixed rate through the use of interest rate swaps or, in the case of one our Norwegian investments, is inflation-linked to the Norwegian CPI, ~~approximated their carrying values.~~is affected by changes in interest rates. A decrease or increase in interest rates of 1% would change the estimated fair value of this debt at ~~September~~June 30, ~~2016~~2017 by an aggregate increase of ~~$60.6~~$55.8 million or an aggregate decrease of ~~$66.2~~$60.8 million, respectively. Annual interest expense on our unhedged variable-rate debt at ~~September~~June 30, ~~2016~~2017 would increase or decrease by $0.4 million for each ~~corresponding~~respective 1% change in annual interest rates.

As more fully described under Liquidity and Capital Resources –— Summary of Financing in Item 2 above, a portion of our variable-rate debt in the table above bore interest at fixed rates at ~~September~~June 30, ~~2016~~2017, but has interest rate reset features that will change the fixed interest rates to then-prevailing market fixed rates at certain points during their term. This debt is generally not subject to short-term fluctuations in interest rates.

Foreign Currency Exchange Rate Risk

We own international investments, primarily in Europe, and as a result, are subject to risk from the effects of exchange rate movements in various foreign currencies, primarily the euro and the Norwegian krone, ~~and, to a lesser extent, the British pound sterling,~~ which may affect future costs and cash flows. Although most of our foreign investments through the ~~third~~second quarter of ~~2016~~2017 were conducted in these currencies, we may conduct business in other currencies in the future. We manage foreign currency exchange rate movements by generally placing both our debt service obligation to the lender and the tenant’s rental obligation to us in the same currency. This reduces our overall exposure to the actual equity that we have invested and the equity portion of our cash flow. 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), 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 have obtained, and may in the future obtain, non-recourse mortgage and bond financing in local currencies. To the extent that currency fluctuations increase or decrease rental revenues, as translated to U.S. dollars, the change in debt service, 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.

The June 23, 2016 referendum by voters in the United Kingdom to exit the European Union, a process commonly referred to as “Brexit,” adversely impacted global markets, including the ~~respective~~ currencies, and has resulted in a ~~sharp~~ decline in the value of the British pound sterling ~~and to a lesser extent, the euro~~ as compared to the U.S. dollar. In October 2016, the Prime Minister of the United Kingdom announced that the formal withdrawal process would be triggered in the first quarter of 2017. As a result, the end-of-period rate for the U.S. dollar in relation to the British pound sterling at October 31, 2016 decreased by 6.2% to $1.2155 from $1.2962 at September 30, 2016. Volatility in exchange rates is expected to continue as the United Kingdom negotiates its likely exit from the European Union.

As of June 30, 2017, 4% and 35% of our total pro rata ABR was from the United Kingdom and other European Union countries, respectively. Any impact from Brexit on us will depend, in part, on the outcome of the related tariff, trade, regulatory, and other negotiations. Although it is unknown what the result of those negotiations will be, it is possible that new terms may adversely affect our operations and financial results.

Scheduled future minimum rents, exclusive of renewals, under non-cancelable operating leases for our consolidated foreign operations as of ~~September~~June 30, ~~2016~~2017 during the remainder of ~~2016,~~2017, each of the next four calendar years following December 31, ~~2016,~~2017, and thereafter, are as follows (in thousands):


Lease Revenues ^(a)	2016 (Remainder)		2017		2018		2019		2020		Thereafter		Total		2017 (Remainder)		2018		2019		2020		2021		Thereafter		Total
Euro ^(b)	$	7,682	$	37,950	$	39,062	$	39,101	$	38,464	$	340,094	$	502,353	$	20,734	$	42,543	$	42,596	$	41,736	$	41,652	$	339,726	$	528,987
Norwegian krone ^(c)	3,979		15,766		15,766		15,766		15,466		78,872		145,615		7,196		14,290		14,306		14,045		13,359		60,082		123,278
British pound sterling ^(d)	1,039		4,045		3,830		3,699		3,123		12,145		27,881		1,723		3,254		3,150		2,882		2,647		12,219		25,875
	$	12,700	$	57,761	$	58,658	$	58,566	$	57,053	$	431,111	$	675,849	$	29,653	$	60,087	$	60,052	$	58,663	$	57,658	$	412,027	$	678,140

CPA^®:18 – Global 9/6/30/~~2016~~2017 10-Q – 5657

Scheduled debt service payments (principal and interest) for mortgage notes and bonds ~~denominated in Norwegian krone,~~payable, for our ~~consolidated~~ foreign operations as of ~~September~~June 30, ~~2016,~~2017, during the remainder of ~~2016,~~2017, each of the next four calendar years following December 31, ~~2016,~~2017, and thereafter, are as follows (in thousands):


Debt Service ^(a)	2016 (Remainder)		2017		2018		2019		2020		Thereafter		Total
Debt Service ^{(a) (e)}															2017 (Remainder)		2018		2019		2020		2021		Thereafter		Total
Euro ^(b)	$	2,416	$	21,362	$	9,394	$	9,468	$	90,904	$	128,296	$	261,840	$	5,293	$	10,058	$	10,432	$	93,692	$	75,426	$	99,265	$	294,166
Norwegian krone ^(c)	3,349		5,957		5,957		5,957		5,957		168,321		195,498		3,215		5,719		5,719		5,719		48,404		113,187		181,963
British pound sterling ^(d)	245		973		973		973		24,672		—		27,836		488		974		974		24,702		—		—		27,138
	$	6,010	$	28,292	$	16,324	$	16,398	$	121,533	$	296,617	$	485,174	$	8,996	$	16,751	$	17,125	$	124,113	$	123,830	$	212,452	$	503,267

__________


(a)	Amounts are based on the applicable exchange rates at ~~September~~June 30, ~~2016~~2017. Contractual rents and debt obligations are denominated in the functional currency of the country where each property is located.


(b)	We estimate that, for a 1% increase or decrease in the exchange rate between the euro and the U.S. dollar, there would be a corresponding change in the projected estimated property-level cash flow at ~~September~~June 30, ~~2016~~2017 of ~~$2.4~~$2.3 million.


(c)	We estimate that, for a 1% increase or decrease in the exchange rate between the Norwegian krone and the U.S. dollar, there would be a corresponding change in the projected estimated property-level cash flow at ~~September~~June 30, ~~2016~~2017 of ~~$0.5~~$0.6 million.


(d)	We estimate that, for a 1% increase or decrease in the exchange rate between the British pound sterling and the U.S. dollar, there would be an insignificant corresponding change in the projected estimated property-level cash flow at ~~September~~June 30, ~~2016.~~2017.


(e)	Interest on unhedged variable-rate debt obligations was calculated using the applicable annual interest rates and balances outstanding at June 30, 2017.

As a result of scheduled balloon payments on certain of our international debt obligations, projected debt service obligations exceed projected lease revenues ~~during~~in 2020 and 2021 for investments denominated in the euro, ~~and~~in 2020 for the British pound sterling, and after 2020 for the Norwegian krone. We currently anticipate that, by their respective due dates, we will have refinanced certain of these loans, but there can be no assurance that we will be able to do so on favorable terms, if at all. If refinancing has not occurred, we would expect to use our cash resources to make these payments, if necessary.

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. ~~Our~~We regularly monitor our portfolio ~~is currently exposed~~ to assess potential concentrations of credit risk as we ~~have not yet fully invested the proceeds from our initial public offering.~~make additional investments. While we believe our portfolio is reasonably well-diversified, it does contain concentrations in excess of 10% based on the percentage of our consolidated total revenues or pro rata ABR.

For the ~~nine~~six months ended ~~September~~June 30, ~~2016,~~2017, our consolidated portfolio had the following significant characteristics in excess of 10%, based on the percentage of our consolidated total revenues:

~~67%~~68% related to domestic properties, which included concentrations of ~~15%~~14% and ~~14%~~13% in Florida and Texas, respectively; and

~~33%~~32% related to international properties.

At ~~September~~June 30, ~~2016,~~2017, our ~~consolidated~~ net-leased 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 ~~consolidated~~pro rata ABR as of that date:

~~42%~~41% related to domestic properties, which included a concentration of 10% in ~~Texas of 11%;~~Illinois;

~~58%~~59% related to international properties, which included a concentration in the Netherlands of 16% and Norway of ~~18%~~15%; ~~and~~

~~55%~~51% related to office properties, 14% related to industrial properties, 13% related to warehouse properties, 12% related to retail properties, ~~13%~~10% related to ~~industrial properties, 12% related to warehouse properties,~~hotel properties; and

11% related to the banking industry, 10% related to the grocery industry, and 10% related to the hotel, gaming, and leisure industry.

CPA^®:18 – Global 9/6/30/~~2016~~2017 10-Q – 5758

Item 4. 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, or 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 ~~September~~June 30, ~~2016~~2017, have concluded that our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) were effective as of ~~September~~June 30, ~~2016~~2017 at a reasonable level of assurance.

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.

CPA^®:18 – Global 9/6/30/~~2016~~2017 10-Q – 5859

PART II — OTHER INFORMATION

Item 2. Unregistered Sales of Equity ~~Securities and Use of Proceeds.~~Securities.

Unregistered Sales of Equity Securities

During the three months ended ~~September~~June 30, ~~2016~~2017, we issued ~~314,520~~348,033 shares of our Class A common stock to our Advisor as consideration for asset management fees. These shares were ~~either~~ issued at our most recently published NAV of $7.90 per ~~share or, prior to the first NAV being published, $10.00 per share, which is the price at which our shares of our Class A common stock were sold in our initial public offering.~~share. Since none of these transactions were considered to have involved a “public offering” within the meaning of Section 4(a)(2) of the Securities Act of 1933, the shares issued were deemed to be exempt from registration. In acquiring our shares, our Advisor represented that such interests were being acquired by it for investment purposes and not with a view to the distribution thereof. From inception and through ~~September~~June 30, ~~2016,~~2017, we have issued a total of ~~1,889,683~~2,915,292 shares of our Class A common stock to our Advisor as consideration for asset management fees.

~~Use of Offering Proceeds~~

The Registration Statement (File No. 333-185111) for our initial public offering was declared effective by the SEC on May 7, 2013 and we closed the offering on April 2, 2015. As of September 30, 2016, the cumulative use of proceeds from our initial public offering was as follows (dollars in thousands):

Common Stock

Class A
Class C
Total
Shares registered ^(a)
100,000,000
26,737,968

126,737,968
Aggregate price of offering amount registered ^(a)
$ 1,000,000
$ 250,000

$ 1,250,000
Shares sold^(b)
97,936,653
28,467,928

126,404,581
Aggregated offering price of amount sold $ 977,410
$ 266,108

$ 1,243,518
Direct or indirect payments to directors, officers, general partners
of the issuer or their associates; to persons owning ten percent or more
of any class of equity securities of the issuer; and to affiliates of the issuer (73,427 ) (9,506 )
(82,933 )
Direct or indirect payments to others (31,258 ) (6,016 )
(37,274 )
Net offering proceeds to the issuer after deducting expenses $ 872,725

$ 250,586

1,123,311
Purchases of real estate, net of financing and noncontrolling interest

(953,844 )
Distributions paid (195,354 )
Proceeds from the sale of real estate 35,709
Working capital (1,795 )
Temporary investments in cash and cash equivalents $ 8,027

~~__________~~


~~(a)~~	~~These amounts are based on the assumption that the shares sold in our initial public offering were composed of 80% Class A common stock and 20% Class C common stock.~~


~~(b)~~	Excludes shares issued to affiliates, including our Advisor, and shares issued pursuant to our distribution reinvestment plan. We ceased accepting new orders for shares of Class A and Class C common stock on June 30, 2014 and March 27, 2015, respectively.

~~CPA~~^®~~:18 – Global 9/30/2016 10-Q~~– 59

Issuer Purchases of Equity Securities

The following table provides information with respect to repurchases of our common stock pursuant to our redemption plan during the three months ended ~~September~~June 30, ~~2016~~2017:

Class A Class C
2016 Period
Total number of Class A
shares purchased ^(a)
Average price
paid per share
Total number of Class C
shares purchased ^(a)
Average price
paid per share
Total number of shares
purchased as part of
publicly announced plans or program ^(a)

Maximum number (or
approximate dollar value)of shares that may yet be
purchased under the plans or program ^(a)
July —
$ —
—
$ —
N/A N/A
August —
—
—
—
N/A N/A
September 307,081
7.78
71,033
7.66
N/A N/A
Total 307,081
71,033



	Class A			Class C
2017 Period	Total number of Class A shares purchased ^(a)	Average price paid per share		Total number of Class C shares purchased ^(a)	Average price paid per share		Total number of shares purchased as part of publicly announced plans or program ^(a)	Maximum number (or approximate dollar value)of shares that may yet be purchased under the plans or program ^(a)
April	—	$	—	—	$	—	N/A	N/A
May	—	—		—	—		N/A	N/A
June	529,451	7.67		71,703	7.56		N/A	N/A
Total	529,451			71,703

___________

(a)

Represents shares of our Class A and Class C common stock requested to be repurchased under our redemption plan, pursuant to which we may elect to redeem shares at the request of our stockholders, subject to certain exceptions, conditions, and limitations. The maximum amount of shares purchasable by us in any period depends on a number of factors and is at the discretion of our board of directors. During the three months ended ~~September~~June 30, ~~2016~~2017, we received 68133 and 1620 redemption requests for Class A and Class C common stock, ~~respectively, most~~respectively. As of ~~which~~the date of this Report, all such requests were ~~satisfied during that period.~~satisfied. We generally receive fees in connection with share redemptions. The average price paid per share will vary depending on the number of redemption requests that were made during the period, the number of redemption requests that qualify for special circumstances, and the most recently published NAV.

CPA^®:18 – Global 9/6/30/~~2016~~2017 10-Q – 60

Item 6. Exhibits.

The following exhibits are filed with this Report, except where indicated.



Exhibit No.	Description	Method of Filing
~~3.1~~	~~Amended and Restated Bylaws of Corporate Property Associates 18 – Global Incorporated~~	~~Incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed on August 23, 2016~~

31.1	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith

31.2	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith

32	Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	Filed herewith

101	The following materials from Corporate Property Associates 18 – Global Incorporated’s Quarterly Report on Form 10-Q for the quarter ended ~~September~~June 30, ~~2016,~~2017, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets at ~~September~~June 30, ~~2016~~2017 and December 31, ~~2015,~~2016, (ii) Consolidated Statements of Operations for the three and ~~nine~~six months ended ~~September~~June 30, ~~2016~~2017 and ~~2015,~~2016, (iii) Consolidated Statements of Comprehensive ~~Loss~~Income (Loss) for the three and ~~nine~~six months ended ~~September~~June 30, ~~2016~~2017 and ~~2015,~~2016, (iv) Consolidated Statements of Equity for the ~~nine~~six months ended ~~September~~June 30, ~~2016~~2017 and ~~2015,~~2016, (v) Condensed Consolidated Statements of Cash Flows for the ~~nine~~six months ended ~~September~~June 30, ~~2016~~2017 and ~~2015,~~2016, and (vi) Notes to Consolidated Financial Statements.	Filed herewith

CPA^®:18 – Global 9/6/30/~~2016~~2017 10-Q – 61

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.



			Corporate Property Associates 18 – Global Incorporated
Date:	~~November 9, 2016~~August 14, 2017
		By:	/s/ ~~ToniAnn Sanzone~~Mallika Sinha
			~~ToniAnn Sanzone~~Mallika Sinha
			Chief Financial Officer
			(Principal Financial ~~and~~Officer)

Date:	August 14, 2017
		By:	/s/ Kristin Sabia
			Kristin Sabia
			Chief Accounting Officer
			(Principal Accounting Officer)

CPA^®:18 – Global 9/6/30/~~2016~~2017 10-Q – 62

EXHIBIT INDEX

The following exhibits are filed with this Report, except where indicated.



Exhibit No.	Description	Method of Filing
~~3.1~~	~~Amended and Restated Bylaws of Corporate Property Associates 18 – Global Incorporated~~	~~Incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed on August 23, 2016~~

31.1	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith

31.2	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith

32	Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	Filed herewith

101	The following materials from Corporate Property Associates 18 – Global Incorporated’s Quarterly Report on Form 10-Q for the quarter ended ~~September~~June 30, ~~2016,~~2017, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets at ~~September~~June 30, ~~2016~~2017 and December 31, ~~2015,~~2016, (ii) Consolidated Statements of Operations for the three and ~~nine~~six months ended ~~September~~June 30, ~~2016~~2017 and ~~2015,~~2016, (iii) Consolidated Statements of Comprehensive ~~Loss~~Income (Loss) for the three and ~~nine~~six months ended ~~September~~June 30, ~~2016~~2017 and ~~2015,~~2016, (iv) Consolidated Statements of Equity for the ~~nine~~six months ended ~~September~~June 30, ~~2016~~2017 and ~~2015,~~2016, (v) Condensed Consolidated Statements of Cash Flows for the ~~nine~~six months ended ~~September~~June 30, ~~2016~~2017 and ~~2015,~~2016, and (vi) Notes to Consolidated Financial Statements.	Filed herewith



	Self-Storage Properties ^(a)
Cash consideration	$	43,023
Assets acquired at fair value:
Land	$	11,573
Buildings	51,231
In-place lease intangible assets	8,158
Other assets acquired	447
	71,409
Liabilities assumed at fair value:
Mortgages assumed	(27,925		)
Other liabilities assumed	(461		)
	(28,386		)
Total identifiable net assets	$	43,023



	Self-Storage Properties
	Respective Acquisition dates through September 30, 2016
Revenues	$	4,052

Net loss	$	(6,078	)
Net loss attributable to CPA^®:18 – Global	$	(6,078	)



	Nine Months Ended September 30, 2016
Balance at January 1, 2016	$	23,389
Foreign currency translation	1,714
Balance at September 30, 2016	$	25,103



Estimated Completion Date	Property Type	Location ^(a)	Ownership Percentage ^(b)		Number of Buildings	Square Footage	Estimated Project Totals ^(c)		Amount Funded ^(c)
Q1 2017	Self Storage	Vaughan, Canada	90.0	%	1	105,150	$	14,959	$	8,622
Q1 2017	Self Storage	Mississauga, Canada ^(d)	90.0	%	1	92,125	13,841		9,806
Q1 2018	Self Storage	Vaughan, Canada	90.0	%	1	95,475	14,576		2,546
					3	292,750	$	43,376	$	20,974



	Class A			Class C
2016 Period	Total number of Class A shares purchased ^(a)	Average price paid per share		Total number of Class C shares purchased ^(a)	Average price paid per share		Total number of shares purchased as part of publicly announced plans or program ^(a)	Maximum number (or approximate dollar value)of shares that may yet be purchased under the plans or program ^(a)
July	—	$	—	—	$	—	N/A	N/A
August	—	—		—	—		N/A	N/A
September	307,081	7.78		71,033	7.66		N/A	N/A
Total	307,081			71,033