- Earnings call transcript Q3 2022

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Operator

Hello, and welcome to the W. P. Carey Third Quarter 2022 Financial Results Conference Call and Webcast. [Operator Instructions].

As a reminder, this conference is being recorded. to Institutional call Investor pleasure Sands, to my of Director Relations. now turn over the Peter It's Peter, please go ahead.

Peter Sands

earnings Good morning, for quarter morning us joining call. everyone. Thank our you XXXX for this third

materials. filings. P. made in to begin, we the that Fox. online the materially made available archived the hand are Relations be An be and I and website differ historic and Jason like deemed our Factors W. find will to on And our over X our call Before cause remind related forward-looking actual at approximately call where in where this Chief this results Carey's statements. with would be Investor of some provided conference will that, everyone of of facts Executive SEC expectations section also may Officer, are can presentations not copies it I'll statements of our you year replay that from wpcarey.com, investor for could other call

Jason Fox

current remarks on before The recent question why do net lease. approaching would right X to for Thank powder. that, the with time I in our track of on we share quickly. property is continents, of reasons focus over Accordingly, dry ready attractive remains new the the generated across this real is our to per evolving AFFO you, is which we're quarter with backdrop, utilize when pleased they types within liquidity climate, to expectations how areas morning third X%. capitalize several a key activity positioned as opportunities morning, Carey my say Despite critical X good ability growth per and over unsettled position I outline share results just significant of on investment in year-over-year across opportunities armed P. we're market strength, raising full Peter, uniquely our year to strong invest W. our arise. estate the for I'll AFFO I'm and business, But everyone. and

a higher our investment X.X% contractual which we in third the more growth through growth, same-store to reached rent have drive quarter. First, best-in-class environment, for challenging ability the AFFO

flows to contractual even rents, expect higher our As in move into we current continue between benefits growth X.X% X% and rent XXXX same-store to through to XXXX. inflation seeing the to and

an Second, have exceptionally strong position. we've raised capital well-priced liquidity and

BAA price XXs, in untapped million We far raised prices. $XXX priced we've $X and permanent long-term issuance. on through approximately raised currently in over $X XXXX, of upgrade and recent equity continue our appropriately to should mid-Xs raised our So by of approximately billion capital debt recent liquidity, the we pricing the at Eurobond averaging have Moody's we're in a stock our private bonds. And to X in ability priced capital our forwards total investing placement billion opportunities. confident with at attractive Furthermore, of in enhance

of investment benefits aligned from are which anticipated, loss realize CPA:XX benefiting self-storage we're lease existing accretion real more from management with operating merger initially portfolio, better completed with portfolio. earnings. from than to we estate our expect than offsetting assets AFFO high-quality resulted CPA:XX, our with and well its Third, in we additional gains recently sizable the net

of provide them, selling them. attractive incrementally to value, we including rates several lease, assets net some at converting portion And to we these fundamentals, of as or source for continuing maximize growth. look to self-storage as strong cap a Given a have tailwind hold to capital our options

recent backdrop. our Moving the activity and now to investment market

points which our leaseback. year-to-date, XX% focused about raised a quarter Overall, billion During fund both mid-Xs acquisitions. cap cap our the including sale the The weighted investment of earlier with quarter stock our in generally recent we've and approach, our explore Keep was the we our a which, in sizable was capital average acquisitions regions our mid-XXs. quarter, a had majority our primarily third added were and merger. while more cap the totaling to X.X%, about capital we investments the rate during the driven a projects. volume $X.X lower opportunities XX rates $X assets excludes equity industrial of Within by we industrial, than deal average remained quarter for $XXX it in XXXX the third X.X%, of of our significant completed rate investments. private through external on able our diversified rate at environment. volume quarter, the our to majority bringing investments quarter third Eurobond at of And completed acquisitions, of billion than in course, of mind, on million, large continue basis And good we closed third investment number to period debt made in through the price raised comprised U.S., third interest placement a warehouse in and wider volume

our including competition moved Recently, new on Over cap back, have mode Xs. lower of a and range cost market up risk-off higher the the and given rates, we sellers, at interesting, already Since equities the We're we're balance react more pricing secure which higher a to with turning to use expectations, and a cap are at favor. of raised, reducing market to exerting achieve. to conditions current of come sellers our of or sale-leaseback capital to and Buyers from although to rate power debt. conditions. further active been dry under asset-level Sellers yields, for quickly. we're in not with sheet in deal powder largely getting a believe then, equity With deals, new slow significant pricing are do higher sellers demanding full acclimating have although we which are so lenders on that's and their traction actively transacted bond been buyers more into some stubbornly different closed deals. of uncertain, rates beginning and pressure, likely timing have inability period, able also incrementally buyers. deals become strong holding have dramatic has leveraged sellers certainty however, proceeds yields provide however, remains speeds, to sidelined amid pool increase to stepped cap smaller have we believe Deal however,

deals, greater challenging note activity I We that it tempered predict to investment retail. of remainder the expectations properties see volume commodity investments the larger rate types our namely industrial than investment the current near market focus over also expect the we We've on, for would year, warehouse to leasebacks movements term. particularly and but for and make cap this of conditions sale

deals comfortable pipeline bottom half with the of today, our With in range. we the feel the

will have us governed higher on capital year continue with higher that, having largely we prices safest allow enter power funding of priced rates along current the $X after are activity capitalize with broadly we'll reasonable by capital poised and guidance inflation-driven and to move take pricing beginning portfolios we're liquidity, We're sellers' up to cap costs, our recession positioned pool we've over to XXXX, and spreads. the cash pricing, in and of with REIT they to a transact Management, economic P. one has us questions sitting investment more to rent opportunities, potential raised the the hand cycles. I'll the into billion sellers from ideally in a raised at Gordon. ability review exert top to the of next into for at call willingness stability with acclimate at over environment, Asset for W. able attractive XXXX, Our Toni arise. amid appropriately opportunities will smaller Head Until deals continue the our well-priced to our however, buyers in cap to half rates. growth. setting as we Sanzone, to our our results, to which which And investing benefiting summary, is Brooks to In proven flows be the CFO, sector-leading wider balance align push sheet, we'll best Carey on And extent and across of

Toni Sanzone

Jason, from AFFO $X.XX AFFO share, reporting entirely everyone. segment, you, and almost estate derived morning, quarter, strong per total third share. per X.X% quarter $X.XX of real up a $X.XX which generated good year-ago Thank our We and the from or had of

and Our with real operating results reflect same-store rent our contribution activity as the growth and sector-leading merger from well accretive the as investment in net impact our CPA:XX. lease of net estate the acquired

our August about As acquired. annualized of that third quarter yet closed full transaction $XX merger or a not the acquired ABR. therefore, base properties, XX of assets do results net capture rent quarter we with CPA:XX, lease from Through and earnings X, our a adding million reminder, on

or in but to lease majority of vast is XX also core high-quality of organic any operating portfolio, net and our our reflected to serves improve comprise We the diversification ABR which metrics, same-store not growth. self-storage properties, overall incrementally acquired adds which our a our further or

today, result, the we growth. essentially properties, portfolio NOI annualized which baseline XX operating of XXXX, are of NOI future have million approximately $XX a operating which a self-storage generating is As for for

to our Additional we've properties. I want that on Marriott convert XX we of added leased remind also will found everyone own in details to are on page to net that the currently this portfolio XXXX, supplemental. hotels January a be new can operating

in the no lease in revenue NOI change material to annualized their AFFO. roughly resulting they expect are We contribution with generating, to currently be line

Turning level tied and rent offer Carey with growth from of inflation. protection now highest our asset with lease to rent management the generated continues increases sector, W. of P. to inflation leases the ABR to net same-store activities. within XX%

third peer year-over-year, growth rent During in the overall lease group. the to our quarter, record highest a contractual same-store X.X% increased net

same-store a produce lag trending extensions well million, same-store net current based to the growth recoveries or inflation-based the redevelop for into XX first payment renewals redevelopment our In higher-yielding We period, rent included for lease this reflecting Also year the period, space, quarter proceeds weighted recapturing or mitigate pro the quarter to the Comprehensive comprised moderate, our an adding we of terminated which overall will for rent leasing was the rent order the X.X% during escalate, office X% property which further into with had the activity between XX Even elevated quarter average starts in level a large termination, an lease have just year XXXX. end XXXX. to the prior it growth asset. with on received the growth rata X.X% period. downtime activity $X.X the before quarter AFFO, during third of and will bringing for during we gross same-store carrying remainder we impact increasing totaling years effect and leases tenant expect of improving our the Disposition million, at properties the $XXX term. the which $XX of leases in if to for in X quarter, over on outcome and track already continue our up. third rents rent during disposition Given of portion to year-over-year, a is fourth which XXX% we rental on active through timing new total signed of lease proceeds our the to proactively to lab million. costs levels X% of of in our lag with inflation a similar connection third around and at quarter prior September lease overall elevated

between currently expect $XXX we to complete full year, million totaling and $XXX dispositions the million. For

nonpayments risks to of foreign the to to in change, environment And provide situation want to experienced dollar. tenant levels. or hedge, taking energy regarding quarter into expect hedging compared but operations as stemming appear million approach risk mitigating our first, our typically to flow received strengthening of impact the stress AFFO, communications assets or of third the our war recent as which remarkably a to $XX the date, base denominated European cash locking account any contractual our the have those expense, out. our business hedging X risk Given at is on the decline closely about well currency our important remain continued $X.X exposure; couple test net nor proven natural a share our we year-to-date, high interest perform a statement to portfolio. year. into in through flow any challenges income income current on hedges, Realized the from hedges reduced our to would flow energy assuming per very primarily million throughout our around the currency debt strengthening After euro, and line the And currency about X% We exposure I result the that our region's impact further of second, our of points rates in next to year, at more reduces guidance in Amid foreign current the on cash AFFO in X the the currencies, start very we a laddered gains prices, movements monitor materially of to we've not the in and dollar: movements, our And European nonoperating portfolio in dual which their serves the overweighting due expected in spike tenants flow has highlight rates same well. foreign costs. net defaults through to has as their our and currency initial level current inbound cycles as strategy are cash net the could offsetting at generating from in approach hedging, effective been protection the XXXX totaled U.S. Europe, COVID and Ukraine. low-cost years resilient across as for

Of higher lower by the resulting concurrent the AFFO. extent potential pound hedging or offset levels, realized in course, euro our gains, be currency would British flows cash to to strengthened upside partly foreign

to markets activity. now sheet Moving balance and capital our

access the forms very remain of by quarter continued the and our As various position, Jason equity raised discussed, we ability we and to strong during further capital. debt capital in bolstered a third

and the debt respectively. XXX continued I'm XXX of coupon handful growth the X unsecured to capital EUR XX-year debt with senior we benchmark successfully a debt at weighted was XXX capital issued euro say at On average average market over priced over years. of tranches that notes the additional executed issuances bond offering term X.X pleased in private inaugural points rates, quarter, priced among supports are X.XX% of and a attractively accretive which only offering a we well locking REITs weighted we executed, X- through million basis and investments. the that X This during of side, an placement tranches in

of will, fourth our the share of reflected in our On forwards $XXX we side, equity be capital to This the fully the end portion the equity settled quarter million towards outstanding close generating proceeds. a count. and therefore, quarter, diluted during in occurred quarter

investments our an further We liquidity price in the $XXX unsettled share. additional over our billion strengthened exceptionally facility, $X.X which, $XXX our maintains therefore, dry conjunction from fund sold portion the powder raised equity to with us average price From ability form In $X additional have million shares roughly balance in on positioning, forwards share. X.X million approximately ended $XXX raised $XX of of billion. equity per in an selling also forwards, sheet undrawn our an currently through credit of future at drawn equity strong the million previously quarter locking ATM with per position, forwards, conjunction forwards, program, liquidity to of we, a an over unsettled at totaling average available equity an about third with million standpoint, $XX around the we revolving equity

next Looking to significant our debt maturities.

until about mortgages of XXXX view $XXX as have and due no maturing very manageable. million we which bonds XXXX, We in

assumed X% interest the had weighted refinancings merger, in a mortgage had we the which interest peer strongest the to quarter high of of lease a At of X.X%. of Similarly, healthy. end, quarter target Overall, end years. of X.Xx And group. XXs. debt our the target recent debt-to-EBITDA $XXX debt end, Xx. be assets of interest weighted million is well-timed our metrics was leverage average debt among very debt mid- average In rate conjunction net approximately we've with remain within low was gross Our coverage continues the reflecting in mid- which well our to XX%, range cash to X.Xx, at at range outstanding net low to rate of completed

which upgrade vast on the borrowing rate of the credit benefits ratings our debt. represents our facility, recent majority spreads costs, by revolving Our Moody's our incrementally including floating

our growth number AFFO driven The midpoint, on a and now Moving implying share guidance. issuance. over factors, including per and execution performance real quarter We're estate per share. third by share that well of debt is our as strong increased AFFO announce by guidance of increase portfolio per the outcomes year-over-year we've as AFFO the pleased successful lease-related X% X% on of just to $X.XX to total at

We're We also $X.XX of and between for $X.XX real of AFFO including share, between reflecting Jason rates in which expect to AFFO the we and between narrowed discussed. $X.X a range volume costs, funding full range our as per slowly estate cap transaction are year, adjusting $X.XX billion, total AFFO per guidance revising investment $X higher $X.XX our and billion share. and to environment

a in and Of are us And call our spreads and back closing, possible during rates that, to the course, year, the in for will position higher driven I'll continue per growth in meaningfully XXXX see impact puts questions. as quarter externally In the with fourth business, we AFFO positive for we rent investments full given hand begin operator balance to growth the share. that where to closed our not widen. move sector-leading year the with sheet best cap momentum

Operator

Instructions]. [Operator

from Our today first is from Raymond question James. coming R.J. Milligan

Richard Milligan

first is Toni. My question for

AFFO for XQ about of $X.XX implies XQ guidance $X.XX. to did and guys You in $X.XX

maybe mentioned $X.XX that from but for acquisitions, pieces down higher the higher mentioned more us give fees, that for which wondering the share I would benefit getting walk also XQ, you clarity AFFO could to you count. some XQ. you was XQ imply term weren't think midpoint the if a lease you on at credit I full you in some just

Toni Sanzone

Good Yes. question, Sure. R.J.

going really number And here, mix handful things in of through on some recurring nature. a take some which onetime of and a there's those. I'll of of a of think are I nature kind items, have more a that couple a of

denominated pound. think And as base loan there. is rates we're really on about limited it the in relates had facility, fourth first, through in I and that talked interest in September, we it to it's but variable I base flow quarter. expecting we euro we've as our through you have credit to facilities, said, that and rate our think increase we're see more about to think our -- I fourth quarter which term our rates, rates the before seeing flow are there, if negative credit And really, balances debt,

seeing quarter say. impact of up base we're So of to on going drive quarter, there, I the the to of kind about would an rates the have the tune that's fourth in and $X.XX really impact

talked also We we've strategy. think which highlighted hedging impact about the of our I FX,

quarter-over-quarter, to and think of about I in of where the see rates $X.XX expectation relates impact stay for they'll the are where as a you'll year. for there decline rest the it kind terms today our of

that So one-offs of some year-end. at as there. could well kind recurring a we I we those couple the there's all look you And outcome have get QX, kind quarter. fourth foreign out of tax when It items. beyond a a QX not happen in to through push could are think favorable assuming the at comes type adjustment in them more we're there -- of That if

some And delta to could there were the a happen, material of really loan think But -- that that the on midpoint, of push third some in quarter build the aggregated quarter-over-quarter. I went top it the close potentially that recoveries that's receivable accrued handful there. kind that and end. other tracking of through a it doesn't above items things we're that smaller something that's more So around us if interest to on

Richard Milligan

of happen for and only guess acquisitions you're in then left the just And of the months sort bigger Jason. of higher range for And the question at guidance range There's that implied your guys XQ? I opening for hit what or to could a a you here do think sitting guidance, XQ helpful. curious, implied in in I'm end X that would with That's have the end more. low midpoint to picture I quarter, wide [indiscernible] but comments, comfortable by

Jason Fox

quite for end Yes. are as year. than on Sure, It's R.J. Transaction activity Look, it's where predict deal a the perhaps where up period. our we difficult even guess and now. robust active really market active volume on end we the might is end of or typical year the best more right of to actually

is out and think big getting discovery are of kicked not kind price million They're hundred getting many those I road relationship of a are are the that a part what seen process pursuing, many dollars would transactions question bit. done. characterize how as the several be deals remains the as down do to market in of that actively of we're repriced We deals. and little of I have which many

very we requirements, if year-end. we're achieving as still yields current the are sure we're returns transact best where the we're position given who the So meet there the focused a but by expectations, not we'll and making get we and debt underwriting appropriate timing markets. in buyer we're to can And feel that and levels on pricing in sure gaps point

as the as willingness what reasonable have answer our is view big at maybe sellers' going pricing. on we depend to expectations, to a we'll to cost any changes to factor their capital And of really investment volume transact So well. lot is picture in

Richard Milligan

rate And a is the but And more be we're bit leasebacks, more cap in property to curious expansion. helpful. versus That's -- little else expect amount you're international there mentioned I any category, think sale whether movements. or most it seeing of where little you're U.S. you a particular seeing then you see where bit movement seeing type,

Jason Fox

leasebacks. the can pricing sale little more bit where a And we a in theme going for have that's years over us It's Yes. to be power.

out market. on target competitors or those asset past that space. levered And had of And they're level of are are debt. in there more fewer that that think I the many that private buyers rely mostly that the the equity

when a we're to really, see those use think by of driven about proceeds. continuing leaseback, expansion. are sale-leasebacks sale think And a you I So

less think I for a So there's use need rising capital. or -- have of rates around because sensitivity they a

some I through. if movement Europe. that think is translate will that my And open-ended can liquidity in some that some case, motivated are there have the funds that may create we guess issues. is, There are be sellers That more seeing opportunities.

probably on -- I that of all the still end look and the lease, not proven lease, of movement sale retail, course, rates leasebacks. but cap much of U.S. we they're the of low as think It's those part although stickier. have adjusted market. we track I industrial have as a at and do mean seeing net that, up but in as big well, we're what

Operator

Next today Capital Markets. BMO from question John Kim is coming from

Unidentified Analyst

They have Jason, assets. you mentioned boost provided nice storage with to performance quarter. several options a this you your

Of with given But you these assets? since course, Or assets always you inclined history in has all to your retain are quarters. them could acquired reverse as view future operating assets, outright? changed more that at your

Jason Fox

do and plans We them We've for a self-storage been in our operating space ways. XXXX have them. assets. new on since update of long the operating No Yes. that history many owning in

whatever think options these. assets. attractive that's with not year, we yes, if or We it while lease. we growth, convert All, optimize very could meantime, at of relative attractive was to be what And own. it like we'll So even alternatives, think, reinvest prices table. some lease the sell but we've NOI in could next certainly net are to going with to the have in net we I to choose. lot be X. some continue we patient of the We previously same-store good way a could think value done It's growth We the path be still still combination to in lease the there'll and net 'XX, could some on is be probably with of

Unidentified Analyst

either Courtyard the as a more words, not other assets, assets? net Marriott structure or retain them sell inclined to with to are operating you lease In them? convert those by And

Jason Fox

Yes.

Marriott? of do I bit give want think around to color kind a that's little fair. Brooks, of you

Brooks Gordon

be those. mentioned, outcome expected Courtyards those Toni in Sure. continue And as X Toni we for underlying and as to economics January disposition That Marriott the hotels. in with expired to are a upside transition. roughly mentioned, manage of those having XX a there's the of will be that From operate will so seamless will operating to convert 'XX, And view earnings really the impact. as real redevelopment net lease the no opportunities. perspective, economics, assets line attractive which

those investigate The So those so we'll X appropriate opportunities likely assets, time. retain those at exit further. the while we balance, likely over we'll

aren't to likely those So holds. be long-term

Unidentified Analyst

Okay. me. one last for And one

You -- on converting provide could as asset space. to you wondering yields mentioned where you and lease an if termination located, expect office was color spend to I conversion development capital lab the get more is the it? to

Brooks Gordon

Sure.

has the our some is on on for expansion site well. the stop, table bar a the in train supplemental -- next to labs Pleasanton, as CapEx as and appears this in room So unchanged our It's California. right stop, great location

payment research tenant long-term termination an medical entered a fast-growing prior lease a with toolmaker. labs, unchanged received simultaneously is and which we the a effectively So from into

very order bumps high higher the So much criticality. than term, of the rent will be to on long prior better rent, the XX% XX%

So a for creates of we value like lot that that asset. outcome, really

Operator

is question from Paolone next Anthony coming JPMorgan. Your from

Anthony Paolone

and through a for the of line as midpoint $X.XX thanks talking kind look we Toni, closer the to at to being guess look as XQ. bottom the should $X.XX rate XQ? X for the bit the Great. But or of to by -- bridge XXXX, is and implied items just the from we I to run

Toni Sanzone

Yes.

color of kind to trying end think year. of there the the into gets I'm give it as I some

X guidance of kind otherwise. a this volatility and items at due look quarter. at to to we're recoveries we're think and and little next handful as I a about, talked really too we've termination point, any soon of into for least be to getting hesitant kind of at There's us always varying year's

clear there continue there's you that suggest think picture to a item more on growth. and certainty how suspect to I we'll where wouldn't for things the right extrapolate That's on call. quarter fourth lag to that But given we I to we I of the see that in the run a So and in time now rate kind same-store QX. look terms of flow from would guidance one more earnings leases. through are good we'll have our give

So above guidance. give we trend range. that's point this probably clarity continue but without at on comments some that can level that my And detail we to to X% any of on highlighted the only more those X.X% assumption would getting the there, we see into upwards remarks you in

Anthony Paolone

guys lot just And understand. then, do sale mentioned of a else, use I of you a Jason, you the sellers proceeds. as Okay. anything more have than leasebacks

So the some drag sale other can and you act proceeds the credit when so what's they willing they're in because the quickly get just get since markets pretty hesitancy think maybe on deals? more debt to of and are of those willing the Or on to what over like are go like stuff wondering moved? more how have their And route I control those guess estate real leaseback seem those other about elements alternatives And like feet financing things? they can estate? straightforward more either selling hump the to are go there real folks to that

Jason Fox

some if the is the And terms that's this much grade, think just sale can the high-yield call that companies. cap rates And and target or all a leaseback. of markets. investment-grade it as moved what's significantly, the questions. where you opportunity equity, well. many -- interesting is seen typically are Yes. debt inject And has really alternatives, of to private the that those than companies right the investment a in a equity BB-type further rated it's below issue for debt look now we are bonds we've And so making company It's good I alternatives to market

gives it us some there. power So pricing

rents alternative And can that's an sellers, I us, think they the right, we're on master more are make pull deals. we can these there on zeroing about. the levers focus bumps think interesting whether it's structure in But you're really we how proceeds. for to market and leases, for we deals interesting, on

think that, it opportunity for that attractive So and some to into will continue us but there's limits XXXX. now, is maybe right we set

Operator

Street. Green from Allaway Spenser from coming is question next Our

Spenser Allaway

commentary tenant it health the provided on European energy you to relates cost. for as Thanks the

and in whether you've hasn't tenants have the you any months? But comment it and explicit was you any coverage by at changes recent communication rent maybe hoping could sounds moment, So just topic. like guys broadly understand concern any don't seen on I been there this on

Jason Fox

want Brooks, that? take you do to

Brooks Gordon

Sure.

seen the So energy. businesses, mentioned, DIY, have I far not spikes. ABR comes And we our the note essential as that finance, from retail, cost telecom, specifically Europe, thus kind European out majority important to of really coming Toni of government, think around impact any it's energy specific food of

Those manufacturing really global impacts represent expect our directly And around so of more is felt Europe, put the highest the assets total context, in manufacturing are of X% example. And usage, the as our manufacturing-type have to of X% only of you'd ABR. ABR. heavier that the in operations. for And really that, in among most about power only kind

going industrial much direct, different in on assets, reasonably But manufacturing Elsewhere have largely margins. of very certainly it's than to customers. a some a contained double-digit impacts Europe, single we're we be types in sort underwrite on type high been typically impact pressure of thus the far, industry said, less with or It's in the would passed coverages coverage. these So the that coverage. exposure. And when retail

on the real So of diversification. really They and do scale we with fundamentals to critical adapt companies. leases have estate fall back long and our big

So we [indiscernible] set well pretty done challenges absorb to far, think and we're up so. these have thus

Spenser Allaway

for cap back that lows to since seen And the we've I circling that the helpful XXX level, Great. have basis think, really rates about moved to second. 'XX. been slower Okay. That's points, in have color. adjust in cap At of ballpark we've maybe high a heard just European then rates a

that of with observed thus curious, is in range? you consistent Is Just that what kind 'XX? guys have far

Jason Fox

Yes, but a to that's agree movement, probably that's relative an of mean at cost probably moved I Europe. the fair. have how debt they I has adjusted. I in equilibrium. mean meaningful not still It's much

the -- from the the XX year last earnings about call rates I we of We saw point talked XXX to think of basis the beginning seen movement. this. year, beginning July in more we've them from cap around to broadly,

the the little movement relative But another basis Europe. XX to debt probably certainly of Europe lagging cost is I base time U.S. think saw broad bit, we've increases and to of and and points in I spreads, there. the around magnitude over we seen a rates mid-September in up, the XX sharper the think that's since probably debt

Operator

from from question Joseph coming Next Nick is Citi.

Nicholas Joseph

I'm curious a there if you're new sale-leaseback that on lease Is negotiations seeing any including on in changes in CPI. your given lease? terms, just pushback higher

Jason Fox

with CPI, the that In terms question? is of terms lease

Nicholas Joseph

Yes.

today, lease a signing to is just lease new where include CPI In more if terms today given there later? [indiscernible] you're is a pushback CPI of

Jason Fox

that the the mainly it's I And Yes. able mean to through leasebacks these where sign. of leases again, terms. we can we're length dictate sale sourcing not impacting we're

average term for weighted years, new Even year, above XX slightly the maybe. I XX was deals. think years. our QX it's for around lease

In uncapped inflation Europe, standard, of vary was this U.S. does to customary. CPI-linked common it that prior bit we've leases the between are Europe. seen. very CPI, jump look, In little in terms more And a and

So more the of I still it's on. little -- conversation, focusing can now customary we're we would say and CPI caps and but bit a that are something floors part that

think still the at them is focus and on the more on we leasebacks, are fix same U.S., we and not But again, probably we something I for, that in had amount achieving past. standard. sale as the it's push in

it's there's some that So just not impacted are there. the CPI But increases by inflation. change

we're fixed our typical Our deal that getting increases in now.

seeing of range of now fixed many probably to it's half increases in range some X% We're the with X%. X% been around that. that and them above top I think the in in and even historically,

in different all of it's kind places. So through flowing

Nicholas Joseph

ABR XXXX? forward the then difference you revenue. converge going delta walked there between you the the into the noise of to still could same-store expect that and comprehensive keep And Would through is Or some and That's those helpful. two? same-store the

Toni Sanzone

Yes.

think and happened. would I that by coming of expect are of disruption the the is recoveries to that still really the timing rent recoveries, when driven through some noise we there see

baseline which saw XXXX, this some of the happen kind in of for to some we see this year. the comparison recoveries So recovery year. continued And we've

will had saw quarter-to-quarter sense period in in. of So depending come recovery vary the from it on any we period which disruption which really we

part, I there. same-store growth, comprehensive drive the some to think large there do contractual see but we to overall the variability in will expect continue So be

Operator

RBC question Markets. Capital next Your coming is Heffern from from Brad

Bradley Heffern

economic It the Europe you're that the or is there this also component quarter, over on of you that of pricing I'm the related attractiveness assets is that sounded just moving U.S. either of the that's were seeing faster like there? to the more in and focused part in U.S. backdrop general curious, a the

Jason Fox

it's spreads of backdrop There think and of targeting. over there. the I pursuing more economic are type the we're we're deals

and our expectations between think there's think I we debt still costs priced and on where deals based that maybe generally, of bigger should gone capital. sellers' where bit a be little more gap cost have

So the it's sellers' types expectations. it's of deals or the quality not seeing, more think against we're I

Bradley Heffern

still bit Okay. be decline Got it. XX to little And on that quarter-over-quarter. is you know Or that's then point wider? basis I healthy, a collections, but a to they're can that lumpiness? anything there there curious, point was that I'm very just causing is

Toni Sanzone

from... drivers material no Yes,

Brooks Gordon

I... Toni,

Toni Sanzone

you the that, have Do Brooks? detail on

Brooks Gordon

this been all subsequently of just kind collected. Sure. course I Most would election. of normal characterize that's

trends I there. point So any wouldn't to real

Operator

you. Thank

Greg from coming Scotiabank. from is today McGinniss question Next

Greg McGinniss

for transaction prior get Just a softened much to market has the how compared trying understanding quarters. better to

regarding for you about a talk their that total impact not environment how investment their you the sale seeing fewer is have more the rate So of opportunities? just challenging that from economic up sellers cap much are are market with expectations? own of investment of Jason, adjusted could maybe what made looking companies And Or during leasebacks? if options

Jason Fox

Yes. the is is the last strong. of And weekly I and some made you reviewing quite And think we're of a point looking sale-leasebacks. activity portfolio interesting. deals distressed on in mean transaction deals some there. lots U.S. in I These some are, transactions funds from of lots basis, that well. cases, These are as sellers. more some These Europe, are are getting this increasingly

say, time. So of I years significantly I'm relative it's range the a would deals, lower though. kind past is deals But in are or that to to not this of I probably of point, sure quarters percentage point think transacting at wide your predominantly sale-leasebacks last

many future are perhaps ongoing. whether I still more clear might than a the when they're I alternatives consider lot just and meaningful still think a a costs leasebacks. there reluctant price getting there's discovery And better there's think gone, and that's where of expensive, think the are debt in have to but to up especially sellers sale lock be in. And now move costs pricing, process higher to I uncertainty continue time because lock it's you

but of great is predict, to to much transactions. a So through of there of not lot flows a activities, matter hard just actual how that visibility,

Bradley Heffern

Right.

cap as what another view how frame mean cap rates. you're assuming maybe own? simplify your you Maybe similar for then to do capital? acquisitions? you actually on already out And fair. I that are what market That's underlying what is cost And credit Okay. you targeting current regarding of way just rates seeing to to

Jason Fox

look us. various capital ways sure. mean, cost I of for look, to there's at Yes,

we maybe only trading of our given direct day. And swapping Europe. and or XX-year For capital equity any or dependent not debt I we're that look either mean put at Xs for higher on clearly assuming the debt in the we current issue bank do the that this of into to our account ability equity more where generate. the Xs. probably through our could we instance, and cost capital or free exclusively It's on some bonds raised the And account can that in free That Xs, flow into cash in by hand, trading of flow price puts issuances forwards taking year or any capital cost debt. lower on if in the euros, U.S. bank other in and maybe we our with in cost factoring cash say.

and your lot to So to at it, capital our is this view question. what's around and goes putting look ways of maybe work, a expectation important more but to

perspective we're today. our the reflect we the are them want debt that now is think we to pricing I markets seeing deals wider that in when looking at

average about yields really to the rates for are cost our IRRs targeting So we would term. or unlevered deals leases. that or continue to When cap given wider versus moving of we're capital in near executing expect into the spreads, looking bumps spreads that at we we're our built the any think

I likely would range So X% average high would would expect in clearly to from and And to X% say moved in probably targeting Xs. up in into past us more And I inflation-based somewhere higher after the of in we're Xs in factoring the Xs maybe rent yields to the now, to range right that X% now. generate the midpoint that X% leases. be cap rates. the and has

deals a reason do midpoint of there's generally, So very more with extent lean have a aggressive. can there's little And we on there's going I use. zip of the to some on well-priced that's quality parts get the a but we're moving thinking that the equity But of a kind that we we're interesting that about, And lot to to forwards of code margin kind range be bit Maybe into. to higher think mentioned. I focused here.

Bradley Heffern

just That's in could I definitely Toni. for helpful. throw more if And one

environment, the you're given bad has 'XX? economic included results maybe on been well? debt the in much thinking Just watch curious complicated touch as about how and list about tenant XXXX just how more And

Toni Sanzone

Yes.

of near collection kind XXX%. has trended been -- just rate there's -- talked as the XXXX we think I about

haven't impact it's really flowing our less this XX year, ABR, that's any points we than So if that. on numbers through basis seen material

getting we'll a In into more experience over year really that of see been to start continuing But with next as adjust And terms the good. to year we conservative I the of guidance, year, as we're has portfolio kind view. continue pay. the I we'll think we're think tenants evaluate our

to up portfolio continues hold Our perform well. and

our I there's in assumptions So year. into any for reason any us major think change to going don't next expect

Operator

Capital Your from next Lucas is from Chris Securities. coming question One

Christopher Lucas

just quick of a on Jason, recap CPA:XX. kind

office announced, part of you're, Are know company about billion are million net with Or billion the that. $X of added as $X.X Or was $X.X think, planned? some still you I dispositions where be at you talked going stand? transaction the when was those I to and I planned deal complete to dispositions there assets, those? were do think you

Jason Fox

around can Brooks, give you want -- that? to you some color do

Brooks Gordon

working closed that. still items or on. X we're We've There's of Sure. the X majority

point student have stabilized been at assets wanted student Some of that on. XXXX, CPA:XX, largely to The what that Brookfield, all was our but housing. housing in to may the this sold it's transact we piece slip from European which biggest of into perspective of

We property. one for it's that housing high-quality at evaluate We'll student own property to options U.S. the in well. time Austin, very right the continue as in

Christopher Lucas

quarter as that sort so sort over of did third asset then a Toni, making to results? of follow-up, hold contribution meaningful

Toni Sanzone

that material I within in, Obviously, at we, a any and No, material and that say had large, of by the don't up range say, was dispositions. there think movement the as would has all been don't there's end of flipping factored from disposition I of I narrowed and kind range impact we I where from are. moved the our think we year, but those shifted,

Christopher Lucas

thinking on how that about we and And the should Okay. are next And split domestic be timing? there you're maturing Toni, be thinking should then how last And you, question sticking between nondomestic year, how a mortgages with is the we currencies? refinancing them? looking for me, at about

Toni Sanzone

with In to take think borrowings, hasn't view the that debt, for will mortgage and terms secured of we continue we changed unsecured replace debt the us. I that

how size terms the into sheet in next would So of grand million that of course majority in just I out, number maturities of at next us of $XXX-plus look around the year. pay balance maturity, in of which expect year. That when the we over we'll the timing those take the and about total insignificant at of pretty in is but at the scheme we'll markets that continue occurs to our

have So of do terms of and that. a in would I how lot we think optionality we manageable, pretty it's

on some our we time facility, where to some it the access With terms the we flexibility want and of us markets. liquidity credit gives have in

U.S. look similar best us. In where don't think relative have I are are market but see U.S. as is kind breakdown that opportunities to the terms and portfolio and markets Europe where where that at again, in of me, the the we'll of for front the of to in Europe. probably split between overall we I and And well. it's the

Operator

Instructions]. [Operator

question Thalmann. from next Our is coming from Ladenburg Massocca John

John Massocca

quick me the on one sheet. a just balance So for

forward any at provides you of or other but XXXX outstanding how equity equity markets As longer given about just kind we a I to do been of there's you beyond, or capital potentially over out want outstanding, term, to a still that attractive kind even given maybe markets mean, the much even in think keep dislocated, opportunities time, become there? the optionality investment have you

Jason Fox

can and the It's you think Yes. we a do what And like through been equity question. doing. about ATM those like the we highlight we've good I forwards,

well. a the We larger We also year like did as flexibility. last issuance

quantify a So I number. if can don't know I

forwards. I the mean the to using really spreads look market, they're for it's a depend of we I not, markets markets point we how think like. in if good it's equity of pause, and those be to number the the and deals dry may we market, I factors, equity we're probably think lot what on stay a transaction of continue by up about going issue think funding really good to going If take with front the mainly in there's dictated deals time. in to but do our a any probably at what could powder

John Massocca

a capital if balance, similar available if high relatively of maybe some at not guess relatively rates, remains assume kind I attractive we maintain you But least of should at balance? kind

Jason Fox

our it's that's how I cost we of what have think comment on probably our on lot think But depend that to fair cap that I where capital. fair, a going and moved, is made. Again, can but rates actively I she deploy Yes. a think that's of perspective capital

Operator

or over question-and-answer back the for turn We like management any our reached to the of session. closing. floor to I'd end further

Peter Sands

interest P. you, your Thank W. morning. for everyone, in Great. Carey this

have questions, call. concludes Relations call And XXX-XX-XXXX. that you Investor additional please today's on If directly

disconnect. now may You

W. P. Carey (WPC) 4 Nov 222022 Q3 Earnings call transcript