FINAL TRANSCRIPT
CONFERENCE CALL TRANSCRIPT
W. P. CAREY & CO. LLC FIRST QUARTER EARNINGS CONFERENCE CALL
MAY. 05. 2005 / 2:00 PM ET
CORPORATE PARTICIPANTS
CURT RITTER
W. P. Carey & Co. LLC, Director of Corporate Communications
GORDON DUGAN
W. P. Carey & Co. LLC, CEO and President
CLAUDE FERNANDEZ
W. P. Carey & Co. LLC, Acting CFO
TOM ZACHARIAS
W. P. Carey & Co. LLC, Chief Operating Officer
BILL CAREY
W. P. Carey & Co. LLC, Chairman
CONFERENCE CALL PARTICIPANTS
DAVID AUBUCHON
A.G. Edwards - Analyst
MICHAEL BEALL
Davenport Securities
PRESENTATION
OPERATOR
Thank you for standing by and welcome to the W. P. Carey & Company LLC
first-quarter earnings release conference call and webcast. Today's conference
is being recorded and this time I would like to turn the conference over to W.
P. Carey & Company's Director of Corporate Communications, Mr. Curt Ritter.
Please go ahead, sir.
CURT RITTER - W. P. CAREY & CO. LLC - DIRECTOR OF CORPORATE COMMUNICATIONS
Thank you. Good afternoon and welcome everyone to W. P. Carey's first quarter
2005 earnings conference call and webcast. Joining us today are W. P. Carey's
Chairman Bill Carey, CEO and President Gordon DuGan, Acting Chief Financial
Officer Claude Fernandez and Chief Operating Officer and Asset Management
Director Tom Zacharias. Today's call is also being simulcast on our web site
wpcarey.com.
A replay of today's call will be available at 4 o'clock this afternoon. The
telephone number for the replay is 1-888-203-1112 with the access code 4427453.
Before I turn the call over to Gordon, I need to inform you that statements made
in this earnings call that are not historic fact may be deemed forward-looking
statements. Factors that could cause actual results to differ materially from W.
P. Carey's expectations are listed in our SEC filings. As always, if you have
any questions or comments following this conference call, please call our
investor relations department at 1-800-WP CAREY, or send us an e-mail
ir@wpcarey.com. Now I'd like to turn the call over to Gordon.
GORDON DUGAN - W. P. CAREY & CO. LLC - CEO
Good afternoon, everyone. As you see in our press release, our quarterly results
were good for the first quarter this year. Claude Fernandez, our acting Chief
Financial Officer, will get into these numbers in a little bit more detail in a
minute, but I wanted to give an overview for everyone.
Our revenues were up to 44 million from 33.7 million the year before and this is
largely due to increased investment activity as well as greater rental income.
In addition, our income from continuing operations was up to 14.5 million versus
10.3 million from the year earlier period and this is due to again increased
rental and the increase in management performance fees.
Our earnings-per-share was down to $0.15 versus $0.28 in the prior year and net
income was down to 5.8 million versus 11.1. And this is as we delineated in the
press release due largely to impairment charges that Tom Zacharias will talk
about a bit later.
Our FFO as we calculate it was up to $0.61 a share from $0.55 a share in the
earlier period, or 23.9 million versus 21.4 million. Cash flow for the quarter
was strong as we lay out in this press release.
Additionally, in the management change section as you see in this press release,
there are management changes outlining including change in John Park's status.
As you can appreciate, this is not something we can comment on any further at
this time.
Additionally, we have a bullet point relating to the restatement of our 2004
results. Claude Fernandez again will get into that in a little bit more detail.
But the net effect is we had a $2 million understatement of earnings for 2004.
I thought I might step back and talk a little that more broadly about the
marketplace for a moment. I attended and spoke at the Real Share Net Lease
conference earlier this week and one of the participants presented a series of
industry slides. I made some notes on that an I would just share some of these
global figures with you.
The net lease market as he calculated is 15% of all commercial property sales
and as he has calculated, the market has doubled in the last two years. Other
comments that he made in general terms, flattening of the yield curve he sees as
positive for sale leaseback transactions and we're hopeful that that's true as
well as the difference between the short end of the borrowing curve and the long
end have narrowed significantly and we think that that hopefully will drive
corporations to seek more long-term financing and the sale leaseback can compete
in that marketplace. He pointed out that cap rates have fallen across the
commercial real estate sector, but that the spread to treasuries has remained
relatively stable. And he also mentioned that real estate in his view remains an
attractive investment relative to other investment types, and he does not see
that changing.
In terms of our business, the first quarter was an active quarter. We completed
roughly $360 million of investments and those investments were made with tenants
across a number of industries and with properties located in several countries.
Our owned and managed assets have surpassed $7 billion and we are pleased with
that.
On the challenge side, CPA(R):16 - Global, we're not currently raising funds in
CPA(R):16 - Global and due to the threshold for performance fees, we're not
currently collecting -- it is a -- it provides a lower amount of fees relative
to the other funds. In addition, this is a competitive environment in both the
dimension, the real
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estate finance and corporate demand market places. There is a great deal of
liquidity and we are cautious about the competitive environment as we see it.
Within that competitive environment though, I would remind everyone that we are
able to compete for transactions. We look for transactions where we can compete
based on the complexity of the transaction relationships with tenant companies
or our brand names and we think of are all effective competitive tools.
Lastly, we have a well-capitalized and conservative balance sheet and we
remained focused on continuing the 32-year tradition of W. P. Carey of serving
our investors and clients. With that, I will turn it over to Claude Fernandez,
our Acting Chief Financial Officer.
CLAUDE FERNANDEZ - W. P. CAREY & CO. LLC - ACTING CFO
Thank you, Gordon. The Company experienced very strong growth in revenues in the
first quarter of 2005 as compared to 2004. Management revenue increased by 8.9
million and this was substantially driven by higher investment activity during
the quarter. We closed approximately $367 million of acquisitions in the first
quarter of 2005 as compared to 68 million in the first quarter of 2004.
An additional driver for the increase in management revenues has been the growth
in assets under management. Assets under management have grown to approximately
$5.8 billion as compared to approximately $4.8 billion in the first quarter of
2004. So these two factors accounted for the growth in management revenues
during the quarter.
Lease revenues derived from our principal business also increased by $2.8
million in the first quarter and this is primarily related to the acquisition of
approximately $140 million of net lease real estate from one of our affiliates
in 2004. Reported revenues do not include approximately 4.8 million of
management income that is subject to the achievement of a hurdle -- a
performance hurdle by CPA(R):16 - Global. Upon achievement of that performance
hurdle, this income will be recognized for financial reporting purposes. But as
of now, it is not.
The increases in revenues were partially offset by some growth in expenses.
General expenses increased primarily as a result of increased investment
activity during the quarter. Operating expenses were relatively stable between
the two quarters. Income tax expense, however, did increase again primarily
driven as a result of higher revenue growth in the first quarter. Income from
continuing operations did exhibit strong growth from -- to 14.5 million from
approximately 10.2 million in the first quarter of 2004. Income from
discontinued operations showed a reduction primarily related to impairment
charges recognized on three properties that are held for sale. And as Gordon
mentioned, these will be addressed in a bit more detail by our chief operating
officer. Overall, net income did decrease from 11.1 to 5.9 million for the
quarter after taking into account
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the impairment charge.
With respect to funds from operations, funds from operations exhibit fairly
healthy growth with $0.61 a share from $0.55 a share in the first quarter of
2004 the. Again, the driver of this growth is primarily the growth in revenues
from the management business and the principal business.
TOM ZACHARIAS - W. P. CAREY & CO. LLC - CHIEF OPERATING OFFICER
Thank you, Claude. This is Tom Zacharias, and I will speak a little bit about
the real estate assets in the LLC. In the first quarter, GAAP earnings were
affected by write-downs taken in two transactions that we reported in an
eight-page disclosure that was filed several weeks ago. These write-downs relate
to in the first stage a transaction we did with Gibson Greeting Cards back in
1983 which allowed them to purchase the building at fair market value in 2005.
We on March 23, got a notice that they intended to do that which is under the
terms of the valuation method, will result in us taking a write-down. The
initial write-down that we've recognized in this quarter is 8.9 million.
The other item relates to the Lavonia Hotel in Lavonia, Michigan where we plan
to sell this at a price that is about 800,000 below what we're carrying it on
our books at a GAAP value. Also in this quarter, we had -- we were successful in
selling three small vacant buildings in -- a Kmart in Denton, Texas the former
tooling systems facility in Frankenmuth, Michigan and a small Rochester button
facility in South Boston, Virginia. That will reduce vacancy by about 260,000
square feet.
In addition, we were successful in leasing 200,000 square feet of vacant space
in Salisbury, North Carolina to Alcoa for an initial five-year term. Also
released today were the results of a very positive transaction which closed on
Monday and this is the sale of three facilities that we leased to a company
called Apogent in Portsmouth, New Hampshire; Rochester, Minnesota and Dubuque,
Iowa. We acquired these buildings in 1988 and we are selling them for -- or
we've actually sold them for 28.8 million which results in a $9.1 million GAAP
gain, and this gain will be reflected in the second quarter.
BILL CAREY - W. P. CAREY & CO. LLC - CHAIRMAN
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Thank you, Tom. This is Bill Carey and I would like to thank the team for
producing a great quarter with a regard to write-downs and the write-ups has
being as more or less as a matter of timing. So you had the write-downs in the
first with and the write-up in the second quarter and that is more or less what
neutralized it. There is nothing that you can see here, I can see here, that
doesn't make for a great quarter. I'm very proud of the team for producing that
and that the properties are doing well and the funds are doing well.
CURT RITTER - W. P. CAREY & CO. LLC - DIRECTOR OF CORPORATE COMMUNICATIONS
Thank you. At this time, we will open the floor for questions.
QUESTION AND ANSWER
OPERATOR
(Operator Instructions). David AuBuchon, A.G. Edwards.
DAVID AUBUCHON - A.G. EDWARDS - ANALYST
Thank you, good afternoon. Gordon, looking at the transaction volume within the
private REITs this quarter and based on previous run rates, I would think that
the management fee income line would be much higher than it was reported in the
quarter. Is this related to the 4.8 million of fees that were not booked related
any hurdles not met at this point?
GORDON DUGAN - W. P. CAREY & CO. LLC - CEO
I will let Claude speak to that.
CLAUDE FERNANDEZ - W. P. CAREY & CO. LLC - ACTING CFO
This is Claude. That's primarily related to the fact that although we closed
those transactions, we were not able to book approximately 4.2 million in fees
related directly to the closing of those transaction. Had we been able to book
them, I think you would have seen the relationship more the way you would have
expected.
DAVID AUBUCHON - A.G. EDWARDS - ANALYST
And why we not able to book them?
CLAUDE FERNANDEZ - W. P. CAREY & CO. LLC - ACTING CFO
Because CPA(R):16 - Global must achieve a performance hurdle which is
effectively a 6% cumulative dividend return, distribution return, to its
investors before those fees may be collected.
GORDON DUGAN - W. P. CAREY & CO. LLC - CEO
And since we're still in the investment ramp-up period, we have not hit that
hurdle, so we expect a lower contribution from CPA(R):16 - Global going forward.
DAVID AUBUCHON - A.G. EDWARDS - ANALYST
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What is your best guess at this point in time given what you see in the business
environment when you would be able to hit that return?
CLAUDE FERNANDEZ - W. P. CAREY & CO. LLC - ACTING CFO
I don't think we have a projection on that, David.
DAVID AUBUCHON - A.G. EDWARDS - ANALYST
Okay. Is that 4.2 million, that's all cash, or would that be dollars that would
be reinvested into or be received in shares of the private REIT?
CLAUDE FERNANDEZ - W. P. CAREY & CO. LLC - ACTING CFO
Those would be received in shares.
DAVID AUBUCHON - A.G. EDWARDS - ANALYST
Okay. Can you provide a little bit more detail regarding the, I guess the
initiation of the process of John Parks resigning? Was it something from
directly from the SEC, or was it from WPC?
GORDON DUGAN - W. P. CAREY & CO. LLC - CEO
Dave, the best I can say is that the press release and the prior disclosure are
all we're able to say and we have disclosed what we're able to disclose.
DAVID AUBUCHON - A.G. EDWARDS - ANALYST
Okay. And then he is still an employee of the company -- can you describe the
managing director's strategic planning role?
BILL CAREY - W. P. CAREY & CO. LLC - CHAIRMAN
He is still an employee of the Company in that role.
DAVID AUBUCHON - A.G. EDWARDS - ANALYST
Okay. Is that a new position, or is it something that was created for John.
BILL CAREY - W. P. CAREY & CO. LLC - CHAIRMAN
It's a new position -- this is Bill Carey -- that we've needed for some time,
and I believe John can do a really great job. I think he's quite pleased with
the opportunity there.
DAVID AUBUCHON - A.G. EDWARDS - ANALYST
And do you -- an external candidate at this point in time, Gordon, is the
preferred route at this point in time?
GORDON DUGAN - W. P. CAREY & CO. LLC - CEO
That's correct. We've initiated a search, meaning that we're beginning the
process of the search for an external candidate for this role.
DAVID AUBUCHON - A.G. EDWARDS - ANALYST
Okay. And so just given what you see in the environment, your comments in the
press and just on the call seem to be a little bit more bearish than you have
been in the past. Has momentum in the business slowed to a point where you
believe it has gotten to a point where continuing to generate
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the growth that we've seen in the past is no longer an option?
GORDON DUGAN - W. P. CAREY & CO. LLC - CEO
I can speak to -- however my tone came across, I will say that we have had a
very active first quarter. We are pleased with that. We continue to be able to
compete for deals but I have to say that we do see a very liquid environment out
there with a lot of capital. And so we have been cautious about the competitive
environment for several quarters and I think my comments have reflected that.
And we remain cautious that there's a lot of capital out there is chasing deals.
But within that context, we have been as the first quarter shows able to compete
and able to find attractive investments.
DAVID AUBUCHON - A.G. EDWARDS - ANALYST
But you're no longer raising money within the CPA(R):16 - Global vehicle?
GORDON DUGAN - W. P. CAREY & CO. LLC - CEO
That is correct. We have a temporary cessation of funds and we're in the process
of shifting from our first offering to second offering in CPA(R):16 - Global and
we have plenty of cash to invest in that entity, so that's one area in which
we're focused and using the investment opportunities obviously for our managed
REITs.
DAVID AUBUCHON - A.G. EDWARDS - ANALYST
And my next question was going to be how much cash is available? Can you
disclose that?
GORDON DUGAN - W. P. CAREY & CO. LLC - CEO
As of the left filing, Claude?
CLAUDE FERNANDEZ - W. P. CAREY & CO. LLC - ACTING CFO
We currently have approximately 200 million in cash in CPA(R):14 available to
invest, plus some in others.
DAVID AUBUCHON - A.G. EDWARDS - ANALYST
Okay, thanks.
OPERATOR
(Operator Instructions). Michael Beall, Davenport Securities
MICHAEL BEALL - DAVENPORT
Good afternoon. Just to come back to the CPA(R):16 - Global things not hit our
threshold (ph), is that because what we have actually invested have not been the
spreads wide enough, or is it simply or mainly a matter of carrying large cash
balances and sort of having more cash than we were able to invest, or none of
the above?
GORDON DUGAN - W. P. CAREY & CO. LLC - CEO
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I would say that it's a -- the cash that we've been able to invest we are able
to meet the threshold return. But having it -- this is an investment ramp-up
period issue where you raise the cash just on the balance sheet (indiscernible)
earning short-term interest rates. And until we get that invested, it's hard to
get to the performance hurdle.
MICHAEL BEALL - DAVENPORT
And we have about $1 billion more under management today than we did a year ago,
but I guess would it be fair to say we have replaced money that we were earning
incentive fees on say with those funds that we liquidated last year with new
money where we're not?
GORDON DUGAN - W. P. CAREY & CO. LLC - CEO
It's not quite that case because CPA(R):15 has grown significantly over that
period where we are in the incentive fee. And going forward really CPA(R):16 -
Global where we don't have this incentive fee will be a large part of it, but we
still have grown assets under management and still have grown CPA(R):15 where we
are reaching the incentive fee. So it's not a zero versus 100 or 100 versus zero
equation; it's a blend.
MICHAEL BEALL - DAVENPORT
Gotcha. And I guess just looking at the next few quarters in this year, we have
the lack of the incentive fee in CPA(R):16 - Global and we could have, we had
relatively robust acquisition activity in the first quarter. So the sense in
that may be slowing in the next quarter or two because of competition and
everything. So I guess the numbers the next few quarters won't look particularly
good. You're sort of preparing us for that?
GORDON DUGAN - W. P. CAREY & CO. LLC - CEO
Mike, I guess what I would say is, as you know, we don't provide guidance or
project forward our earnings. But the competitive nature of the marketplace is
something we have been speaking about in the past and the investment business is
lumpy, so we're always cautious about that and we remain cautious about any type
of expectation on a quarter-to-quarter basis. But in the CPA(R):16 - Global,
that number is the amount that we are currently not recognizing and so that's
why we want you to have it.
MICHAEL BEALL - DAVENPORT
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Just getting back quickly to the write-off, a $9 million write-off, I'm always
sort of don't quite understand how these things sort of like come out of the
blue. And in that particular case, it was based on a tenant's ability to stay in
the building or not. Was it a clear-cut economic decision on their part not to
do that? It had a $9 million GAAP impact on their statements. Was it a $9
million economic decision on their part that would have been clear for years
that they would've taken the action they had taken?
CLAUDE FERNANDEZ - W. P. CAREY & CO. LLC - ACTING CFO
I can explain that a little bit. They were paying 3.7 million in rent for two
facilities. One of them they were using and one of them they were not using and
we did not know really what they were going to do because they didn't have that
much of an interest in owning these facilities. But because of this window that
they had to buy it at a fair market value unencumbered by the lease, they've
elected to give us notice that they intend to buy it and we're going through the
appraisal process now. It's one of those things, we don't know exactly where
it's all going to turn out. They have a contractual right to buy it and they
might end up buying one and not the other, but we're working through that. And
because of their notice to us of their exercising their option, we are taking
the write-down.
MICHAEL BEALL - DAVENPORT
I just say, as a shareholder, it's just hard to know what's lurking out there --
anyway. Last thing as it relates to the issue that was related to John Parks, is
there any settlement with the regulatory people?
Have we finalized that, or are we in the process of that? What can you say about
that?
GORDON DUGAN - W. P. CAREY & CO. LLC - CEO
We just cannot comment, Mike. I'm sorry. It's in process.
MICHAEL BEALL - DAVENPORT
Okey-doke, thanks a lot.
OPERATOR
(Operator Instructions). David AuBuchon, A.G. Edwards.
DAVID AUBUCHON - A.G. EDWARDS - ANALYST
On the 3 buildings that you're selling or are going to close in the second
quarter, do you see more of that type of activity? Is that something where you
can become more aggressive than try to
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rationalize some of the value that you do see in your portfolio versus some of
the write-down we have been seeing?
TOM ZACHARIAS - W. P. CAREY & CO. LLC - CHIEF OPERATING OFFICER
David, it's Tom Zacharias. That's a very good question and this was a very nice
transaction. We sold these buildings at an 8.3% cap rate. We have been, we are
spending more and more time working the assets. You have seen a significant
reduction in the vacancy. We're down to around 5%. We have just concluded a
lease for a 528,000 square feet in a building that was vacant. So there's a lot
of asset management activity that I think you will see over the next two
quarters that will be positive for the portfolio.
DAVID AUBUCHON - A.G. EDWARDS - ANALYST
Is there number or a range that you can provide?
TOM ZACHARIAS - W. P. CAREY & CO. LLC - CHIEF OPERATING OFFICER
No, because what it is, we have, we're working many different transactions. What
closes and doesn't close, it's hard to know.
DAVID AUBUCHON - A.G. EDWARDS - ANALYST
Okay. Going -- a little bit more on operating metrics I guess on the portfolio
within WPC vacancy.
Tom just mentioned it was 5%. Where's -- a lot of people asked about what's the
- -- if you looked at your in-place rents versus the market, where would it kind
of shake out to be -- can you provide a little bit more detail on the operating
metrics of the portfolio right now?
GORDON DUGAN - W. P. CAREY & CO. LLC - CEO
I will turn it over to Tom, but our average lease term, Tom, today is just
around six years?
TOM ZACHARIAS - W. P. CAREY & CO. LLC - CHIEF OPERATING OFFICER
Yes, 6.3.
GORDON DUGAN - W. P. CAREY & CO. LLC - CEO
6.3 years, and that is metric that we look at. In the vacancy, the only other
point I would make on the vacancies, selling vacant buildings not only provides
us with some cash but obviously it lowers the operating expenses because an
empty building is a fire you have to keep feeding. And so the vacancy has a --
leasing up space has that double impact obviously. It's not only getting rental
income and whether it is leased or sold getting rid of operating expenses that
you're carrying. Tom, I don't know if you'd care to comment any more on the
portfolio metrics?
TOM ZACHARIAS - W. P. CAREY & CO. LLC - CHIEF OPERATING OFFICER
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Yes. For 2005 lease expirations, we've gone out and renewed pretty much
everything that was expiring. We're working on '06 and '07. We're being very
aggressive at maintaining cash flow, and sometimes renewal rents are above
market, above what they're paying, sometimes they're below. It's hard to
generalize.
DAVID AUBUCHON - A.G. EDWARDS - ANALYST
Okay. And then on like an SAB (ph) basis, and it's not a number that's disclosed
or you disclose it, but if you look at your payout ratio this quarter dividend
versus SAB, where would you guess that falls out?
TOM ZACHARIAS - W. P. CAREY & CO. LLC - CHIEF OPERATING OFFICER
Well, we do have cash flow from operations disclosed and as you see, there's
cash flow from operating activities was strong relative to the dividend. There's
some noise in that, so it's not a perfect SAD (ph) number, but since we don't
not have an FAD (ph) number out there Dave, I really cannot comment on that,
although I appreciate the question.
GORDON DUGAN - W. P. CAREY & CO. LLC - CEO
Dave, I would just add that if you're looking at that first quarter cash flow
from operations, about 4 million of the increased release of that increase in
cash flow relates to the receipt of annual payments of deferred fees, so you may
want to keep that in mind as you look at it.
BILL CAREY - W. P. CAREY & CO. LLC - CHAIRMAN
It is -- this is Bill Carey -- something I always look at, cash flow from
operations and dividends paid.
And when it's close, I get concerned; when it's like this with 27.5 million net
flow from operations, 16.5 at dividends paid, I feel reasonably comfortable.
DAVID AUBUCHON - A.G. EDWARDS - ANALYST
Okay, thank you.
OPERATOR
Michael Beall, Davenport.
MICHAEL BEALL - DAVENPORT
Gordon, going back to your sort of initial comments just a little more flavor,
if you will, you mentioned that demand -- well, first of all, you said for
awhile and I'm sure it's true that there's too much capital or plenty of capital
chasing deals, but you also alluded to a growth in the amount of real estate
that is owned and under the net lease basis.
GORDON DUGAN - W. P. CAREY & CO. LLC - CEO
That's right.
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MICHAEL BEALL - DAVENPORT
So just comment -- is that -- and you related it to the yield curve flattening
perhaps. Bit do you think there's a longer term trend trying to look out a
little bit between not just this quarter or next -- a longer-term increase in
demand for what we provide? And then just the second question is, you mentioned
there's a lot of capital, or I know when there's a lot of people tend to bid
more aggressively, but are you surrounded by what you'd consider to be
irrational competitors in terms of what they're willing to do a deal for?
GORDON DUGAN - W. P. CAREY & CO. LLC - CEO
No, I think a lot of, I think for the most part, I would not describe it as
irrational. I think most of our competitors are rational investors. From time to
time, you see things that make you scratch your head, but I think that's true
anywhere. It's interesting because there are these two countervailing trends.
There's a lot of capital looking for yield type investments, and when we see
that, we remark on it. At the same time, the net lease market has been growing.
That trend continues and we are positive about -- hopefully the flattening of
the yield curve will be positive for generating new investments. But there are
some countervailing trends and that's an overall picture and there's some good,
there are some things that we comment on that we just want to have out there.
But overall, to me it's sort of the proof is in the pudding and we have been
over the past year able to find a satisfactory number of attractive investments
and the volume has been good. And so while we have been cautious, we were
cautious at the end of last year, we had a good first quarter and it's just hard
to tell but we want you to hear both messages.
MICHAEL BEALL - DAVENPORT
Just in closing, can you just give me an example that I can share with some of
my friends here, where we at W. P. Carey have a little bit of a competitive edge
in terms of seeing deals that others see or having access to deal flow that
maybe or maybe it's not true, is not exposed to the whole world so that maybe we
are able to negotiate a more reasonable deal?
GORDON DUGAN - W. P. CAREY & CO. LLC - CEO
We try to base our transactions on relationships and what I would say there is
that, and I don't have
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a number in front of me, but a number of our transactions are investments that
aren't seen by other players. And at the same time, we try to keep that somewhat
quiet just because we don't want to shine a big spotlight on that fact and we're
transacting with sophisticated people. So it's more of a question of not getting
into a bidding war. And the reason, the example I would give for you on that is
that in many of our transactions, we are part of the acquisition of a business.
And if the saleleaseback is happening at the same time the business is being
bought, oftentimes the financial buyer must have certainty of close from the
leaseback provider. And I think we stand up very well in that environment
because of our brand name and our long-term track record. But in those cases, a
financial buyer just cannot have anything go wrong or his -- their purchase of
the Company is subject to our being able to show up with the sale-leaseback on
time and on terms. And I think we try to compete in that area.
MICHAEL BEALL - DAVENPORT
Thanks again.
OPERATOR
There are no further questions at this time. I will turn it back over to our
speakers for any additional or closing comments.
CURT RITTER - W. P. CAREY & CO. LLC - DIRECTOR OF CORPORATE COMMUNICATIONS
Thank you very much for joining us today. Once again, if you have any additional
questions, please feel free to contact our investor relations department at
1-800-WP CAREY and we look forward to speaking with you next quarter.
GORDON DUGAN - W. P. CAREY & CO. LLC - CEO
Thank you all.
OPERATOR
That does conclude today's conference call. We thank you for your participation.
You may now disconnect at this time.
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