10q10k10q10k.net

What changed in W. P. Carey Inc.'s 10-K — 2023 vs 2024

vs

Paragraph-level year-over-year comparison of W. P. Carey Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+246 added−279 removedSource: 10-K (2025-02-12) vs 10-K (2024-02-09)

Top changes in W. P. Carey Inc.'s 2024 10-K

246 paragraphs added · 279 removed · 201 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

93 edited+32 added−60 removed32 unchanged
Biggest changeCarey 2023 10-K – 29 Portfolio Diversification by Geography (in thousands, except percentages) Region ABR ABR Percent Square Footage (a) Square Footage Percent United States South Texas $ 86,296 6.4 % 11,274 6.5 % Florida 42,710 3.2 % 3,816 2.2 % Georgia 27,542 2.1 % 4,333 2.5 % Tennessee 24,161 1.8 % 3,921 2.3 % Alabama 22,270 1.7 % 3,353 1.9 % Other (b) 16,288 1.2 % 2,402 1.4 % Total South 219,267 16.4 % 29,099 16.8 % Midwest Illinois 57,057 4.3 % 10,164 5.9 % Ohio 33,767 2.5 % 6,947 4.0 % Indiana 29,727 2.2 % 5,137 3.0 % Michigan 24,103 1.8 % 4,241 2.4 % Wisconsin 16,624 1.2 % 3,074 1.8 % Other (b) 52,296 3.9 % 7,713 4.5 % Total Midwest 213,574 15.9 % 37,276 21.6 % East North Carolina 35,530 2.7 % 8,156 4.7 % Pennsylvania 30,459 2.3 % 3,374 2.0 % New York 20,556 1.5 % 2,262 1.3 % South Carolina 19,208 1.4 % 4,952 2.9 % Kentucky 18,130 1.4 % 2,983 1.7 % Massachusetts 16,836 1.3 % 1,255 0.7 % New Jersey 13,680 1.0 % 797 0.5 % Virginia 13,623 1.0 % 1,761 1.0 % Other (b) 24,145 1.8 % 3,799 2.2 % Total East 192,167 14.4 % 29,339 17.0 % West California 60,741 4.5 % 5,889 3.4 % Arizona 20,133 1.5 % 2,664 1.5 % Utah 14,522 1.1 % 2,021 1.2 % Other (b) 53,631 4.0 % 4,776 2.8 % Total West 149,027 11.1 % 15,350 8.9 % United States Total 774,035 57.8 % 111,064 64.3 % International Germany 73,065 5.5 % 6,535 3.8 % Spain 68,077 5.1 % 5,862 3.4 % The Netherlands 62,775 4.7 % 7,054 4.1 % Poland 59,988 4.5 % 8,158 4.7 % Canada (c) 50,861 3.8 % 5,087 2.9 % United Kingdom 48,505 3.6 % 4,432 2.6 % Italy 42,238 3.1 % 5,381 3.1 % Denmark 25,053 1.9 % 3,002 1.7 % Croatia 23,200 1.7 % 2,063 1.2 % France 21,745 1.6 % 1,679 1.0 % Lithuania 13,569 1.0 % 1,640 1.0 % Other (d) 76,241 5.7 % 10,711 6.2 % International Total 565,317 42.2 % 61,604 35.7 % Total $ 1,339,352 100.0 % 172,668 100.0 % W.
Biggest changeCarey 2024 10-K – 28 Portfolio Diversification by Geography (in thousands, except percentages) Region ABR ABR Percent Square Footage (a) Square Footage Percent United States Midwest Illinois $ 63,397 4.7 % 9,945 5.6 % Ohio 42,184 3.2 % 8,375 4.8 % Indiana 36,337 2.7 % 6,107 3.5 % Michigan 25,466 1.9 % 4,600 2.6 % Wisconsin 19,437 1.5 % 3,340 1.9 % Other (b) 50,953 3.8 % 7,227 4.1 % Total Midwest 237,774 17.8 % 39,594 22.5 % East North Carolina 41,271 3.1 % 8,783 5.0 % Pennsylvania 32,182 2.4 % 3,416 1.9 % South Carolina 22,902 1.7 % 5,307 3.0 % Kentucky 22,553 1.7 % 4,485 2.6 % New York 21,944 1.7 % 2,284 1.3 % New Jersey 18,711 1.4 % 954 0.5 % Massachusetts 16,584 1.2 % 1,188 0.7 % Other (b) 33,821 2.5 % 5,157 2.9 % Total East 209,968 15.7 % 31,574 17.9 % South Texas 81,425 6.1 % 10,438 5.9 % Florida 38,690 2.9 % 3,295 1.9 % Georgia 24,436 1.8 % 4,293 2.4 % Tennessee 24,334 1.8 % 4,004 2.3 % Alabama 23,269 1.7 % 3,430 1.9 % Other (b) 17,770 1.3 % 2,422 1.4 % Total South 209,924 15.6 % 27,882 15.8 % West California 62,270 4.7 % 5,463 3.1 % Arizona 21,005 1.6 % 2,269 1.3 % Utah 14,542 1.1 % 2,021 1.1 % Other (b) 57,617 4.3 % 5,105 2.9 % Total West 155,434 11.7 % 14,858 8.4 % United States Total 813,100 60.8 % 113,908 64.6 % International The Netherlands 60,091 4.5 % 7,054 4.0 % Poland 59,110 4.4 % 8,455 4.8 % Italy 57,179 4.3 % 8,183 4.6 % Canada (c) 54,697 4.1 % 5,450 3.1 % United Kingdom 49,882 3.7 % 4,505 2.6 % Germany 49,013 3.7 % 5,840 3.3 % Spain 34,383 2.6 % 3,073 1.7 % Croatia 24,665 1.8 % 2,063 1.2 % Denmark 24,060 1.8 % 3,002 1.7 % France 21,725 1.6 % 1,679 1.0 % Mexico (d) 21,716 1.6 % 3,604 2.0 % Other (e) 67,551 5.1 % 9,604 5.4 % International Total 524,072 39.2 % 62,512 35.4 % Total $ 1,337,172 100.0 % 176,420 100.0 % W.
(b) Other properties within South include assets in Louisiana, Arkansas, Oklahoma, and Mississippi. Other properties within Midwest include assets in Minnesota, Iowa, Kansas, Missouri, Nebraska, South Dakota, and North Dakota. Other properties within East include assets in Maryland, Connecticut, West Virginia, New Hampshire, and Maine.
(b) Other properties within Midwest include assets in Minnesota, Iowa, Kansas, Missouri, Nebraska, South Dakota, and North Dakota. Other properties within East include assets in Virginia, Connecticut, Maryland, West Virginia, New Hampshire, and Maine. Other properties within South include assets in Louisiana, Arkansas, Oklahoma, and Mississippi.
We believe that the ultimate resolution of any environmental matters should not have a material adverse effect on our financial condition, liquidity, or results of operations. We record environmental obligations within Accounts payable, accrued expenses and other liabilities in the consolidated financial statements. See Item 1A. Risk Factors for further discussion of potential environmental risks.
We believe that the ultimate resolution of any environmental matters should not have a material adverse effect on our financial condition, liquidity, or results of operations. We record environmental obligations within Accounts payable, accrued expenses and other liabilities in the consolidated financial statements. See Item 1A. Risk Factors for further discussion of potential environmental risks. W. P.
We believe that these measures are useful to investors to consider because they may assist them to better understand and measure the performance of our business over time and against similar companies. A description of FFO and AFFO and reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are provided below.
We believe that these measures are useful to investors to consider because they may assist them to better understand and measure the performance of our business over time and against similar companies. A description of FFO and AFFO and reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are provided below. W. P.
If the future net undiscounted cash flow of the property’s asset group is less than the carrying value, the carrying value of the property’s asset group is considered not recoverable. We then measure the impairment loss as the excess of the carrying value of the property’s asset group over its estimated fair value. W. P.
If the future net undiscounted cash flow of the property’s asset group is less than the carrying value, the carrying value of the property’s asset group is considered not recoverable. We then measure the impairment loss as the excess of the carrying value of the property’s asset group over its estimated fair value.
Merger and Other Expenses For the year ended December 31, 2023, merger and other expenses are primarily comprised of costs incurred in connection with the Spin-Off, which was completed in November 2023 ( Note 3 ).
For the year ended December 31, 2023, merger and other expenses are primarily comprised of costs incurred in connection with the Spin-Off, which was completed in November 2023 ( Note 3 ). W. P.
We may also use existing cash resources, available capacity under our Senior Unsecured Credit Facility, proceeds from term loans or other bank debt, proceeds from dispositions of properties (including expected proceeds from the exercise of purchase options and the Office Sale Program ( Note 1 )), and the issuance of additional debt or equity securities, such as issuances of common stock through our ATM Program ( Note 14 ), in order to meet our short-term and long-term liquidity needs.
We may also use existing cash resources, available capacity under our Senior Unsecured Credit Facility, proceeds from term loans or other bank debt, proceeds from dispositions of properties (including the Office Sale Program ( Note 1 )), and the issuance of additional debt or equity securities, such as issuances of common stock through our ATM Program ( Note 14 ), in order to meet our short-term and long-term liquidity needs.
We may also use existing cash resources, available capacity under our Unsecured Revolving Credit Facility, mortgage loan proceeds, and the issuance of additional debt or equity securities to meet these needs. Certain amounts disclosed above are based on the applicable foreign currency exchange rate at December 31, 2023. W. P.
We may also use existing cash resources, available capacity under our Unsecured Revolving Credit Facility, mortgage loan proceeds, and the issuance of additional debt or equity securities to meet these needs. Certain amounts disclosed above are based on the applicable foreign currency exchange rate at December 31, 2024.
We assess our ability to access capital on an ongoing basis. Our sources and uses of cash during the period are described below. W. P.
We assess our ability to access capital on an ongoing basis. Our sources and uses of cash during the period are described below.
Funds from Operations and Adjusted Funds from Operations Due to certain unique operating characteristics of real estate companies, as discussed below, the National Association of Real Estate Investment Trusts (“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.
Carey 2024 10-K – 42 Funds from Operations and Adjusted Funds from Operations Due to certain unique operating characteristics of real estate companies, as discussed below, the National Association of Real Estate Investment Trusts (“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.
See Supplemental Financial Measures below for our definition of this non-GAAP measure and a reconciliation to its most directly comparable GAAP measure.
See Supplemental Financial Measures below for our definition of this non-GAAP measure and a reconciliation to its most directly comparable GAAP measure. W. P.
Financing Activities — Our financing activities are generally comprised of borrowings and repayments under our Unsecured Revolving Credit Facility and Unsecured Term Loans, issuances and repayments of the Senior Unsecured Notes, payments and prepayments of non-recourse mortgage loans, issuances of common equity, and payments of dividends to stockholders.
Financing Activities — Our financing activities are generally comprised of borrowings and repayments under our Unsecured Revolving Credit Facility and Unsecured Term Loans, issuances and repayments of the Senior Unsecured Notes, payments of non-recourse mortgage loans, issuances of common equity, and payments of dividends to stockholders. W. P.
We have certain investments in which our economic ownership is less than 100%. On a full consolidation basis, we report 100% of the assets, liabilities, revenues, and expenses of those investments that are deemed to be under our control or for which we are deemed to be the primary beneficiary, even if our ownership is less than 100%.
On a full consolidation basis, we report 100% of the assets, liabilities, revenues, and expenses of those investments that are deemed to be under our control or for which we are deemed to be the primary beneficiary, even if our ownership is less than 100%.
(g) Equity income, including amounts that are not typically recognized for FFO and AFFO, is recognized within Earnings (losses) from equity method investments on the consolidated statements of income. This represents adjustments to equity income to reflect FFO and AFFO on a pro rata basis. (h) Adjustments disclosed elsewhere in this reconciliation are on a consolidated basis.
(d) Equity income, including amounts that are not typically recognized for FFO and AFFO, is recognized within Earnings from equity method investments on the consolidated statements of income. This represents adjustments to equity income to reflect FFO and AFFO on a pro rata basis. (e) Adjustments disclosed elsewhere in this reconciliation are on a consolidated basis.
(b) Includes ABR from tenants in the following industries: wholesale, aerospace and defense, insurance, banking, environmental industries, oil and gas, media: advertising, printing, and publishing, consumer transportation, forest products and paper, and electricity. Also includes square footage for vacant properties. W. P.
(b) Includes ABR from tenants in the following industries: aerospace and defense, insurance, telecommunications, sovereign and public finance, environmental industries, media: advertising, printing, and publishing, oil and gas, consumer transportation, forest products and paper, banking, and electricity. Also includes square footage for vacant properties. W. P.
This adjustment reflects our FFO or AFFO on a pro rata basis. (i) Primarily comprised of gains and losses on extinguishment of debt, the mark-to-market fair value of equity securities, and foreign currency exchange rate movements, as well as non-cash allowance for credit losses on loans receivable and finance leases.
This adjustment reflects our FFO or AFFO on a pro rata basis. (f) Primarily comprised of gains and losses on extinguishment of debt, the mark-to-market fair value of equity securities, foreign currency exchange rate movements, and changes in the non-cash allowance for credit losses on loans receivable and finance leases.
(d) Includes assets in Mexico, Belgium, Finland, Hungary, Norway, Mauritius, Slovakia, Portugal, the Czech Republic, Austria, Sweden, Latvia, Japan, and Estonia. (e) Includes automotive dealerships. (f) Includes ABR from tenants with the following property types: education facility, specialty, laboratory, hotel (net lease), research and development, and land. W. P.
(e) Includes assets in Lithuania, Belgium, Hungary, Norway, Mauritius, Slovakia, Portugal, the Czech Republic, Austria, Sweden, Latvia, Japan, Finland, and Estonia. (f) Includes automotive dealerships. (g) Includes ABR from tenants with the following property types: education facility, self-storage (net lease), specialty, laboratory, office, research and development, hotel (net lease), and land. W. P.
Carey 2023 10-K – 44 Environmental Obligations In connection with the purchase of many of our properties, we required the sellers to perform environmental reviews. We believe, based on the results of these reviews, that our properties were in substantial compliance with federal, state, and foreign environmental statutes at the time the properties were acquired.
Environmental Obligations In connection with the purchase of many of our properties, we have required the sellers to perform environmental reviews. We believe, based on the results of these reviews, that these properties were in substantial compliance with federal, state, and foreign environmental statutes at the time the properties were acquired.
We may also access the capital markets through additional debt (denominated in both U.S. dollars and euros) and equity offerings, as well as term loans and other bank debt. Our cash resources can be used for working capital needs and other commitments and may be used for future investments.
W. P. Carey 2024 10-K – 40 We may also access the capital markets through additional debt (denominated in both U.S. dollars and euros) and equity offerings, as well as term loans and other bank debt. Our cash resources can be used for working capital needs and other commitments and may be used for future investments.
Critical Accounting Estimates Our significant accounting policies are described in Note 2 . Many of these accounting policies require judgment and the use of estimates and assumptions when applying these policies in the preparation of our consolidated financial statements.
Carey 2024 10-K – 41 Critical Accounting Estimates Our significant accounting policies are described in Note 2 . Many of these accounting policies require judgment and the use of estimates and assumptions when applying these policies in the preparation of our consolidated financial statements.
Carey 2023 10-K – 45 Supplemental Financial Measures In the real estate industry, analysts and investors employ certain non-GAAP supplemental financial measures in order to facilitate meaningful comparisons between periods and among peer companies.
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.
“Operating properties recently reclassified from net-leased properties or recently acquired” include (i) four net-leased hotel properties that converted to operating properties in the first quarter of 2023 (after which we began recognizing operating property revenues and expenses from these properties ( Note 6 )) and (ii) five self-storage operating properties acquired during the year ended December 31, 2023 ( Note 6 ).
“Operating properties recently reclassified from net-leased properties or recently acquired” include (i) three net-leased hotel properties that converted to operating properties in the first quarter of 2023 (after which we began recognizing operating property revenues and expenses from these properties), (ii) five self-storage operating properties acquired during 2023, and (iii) one self-storage operating property acquired during 2024 ( Note 6 ).
Carey 2023 10-K – 46 Consolidated FFO and AFFO were as follows (in thousands): Years Ended December 31, 2023 2022 Net income attributable to W. P.
Carey 2024 10-K – 43 FFO and AFFO were as follows (in thousands): Years Ended December 31, 2024 2023 Net income attributable to W. P.
ABR — ABR represents contractual minimum annualized base rent for our net-leased properties and reflects exchange rates as of December 31, 2023. If there is a rent abatement, we annualize the first monthly contractual base rent following the free rent period. ABR is not applicable to operating properties. W. P.
ABR — ABR represents contractual minimum annualized base rent for our net-leased properties and reflects exchange rates as of December 31, 2024. 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 and is presented on a pro rata basis.
Other properties within West include assets in Colorado, Oregon, Nevada, Washington, Hawaii, Idaho, Montana, Wyoming, and New Mexico. (c) $46.8 million (92.1%) of ABR from properties in Canada is denominated in U.S. dollars, with the balance denominated in Canadian dollars.
Other properties within West include assets in Oregon, Colorado, Washington, Nevada, Montana, Hawaii, Idaho, Wyoming, and New Mexico. (c) $49.5 million (90.5%) of ABR from properties in Canada is denominated in U.S. dollars, with the balance denominated in Canadian dollars. (d) All ABR from properties in Mexico is denominated in U.S. dollars.
During the next 12 months following December 31, 2023 and thereafter, we expect that our significant cash requirements will include: • paying dividends to our stockholders; • funding acquisitions of new investments ( Note 6 ); • funding future capital commitments ( Note 6 ) and tenant improvement allowances; • making scheduled principal and balloon payments on our debt obligations, including (i) $500 million of senior notes due in April 2024 and (ii) €500 million of senior notes due in July 2024 ( Note 12 ); • making scheduled interest payments on our debt obligations (future interest payments total $939.6 million, with $229.4 million due during the next 12 months; interest on unhedged variable-rate debt obligations was calculated using the applicable annual variable interest rates and balances outstanding at December 31, 2023); and • other normal recurring operating expenses.
During the next 12 months following December 31, 2024 and thereafter, we expect that our significant cash requirements will include: • paying dividends to our stockholders; • funding acquisitions of new investments ( Note 6 ); • funding future capital commitments ( Note 6 ) and tenant improvement allowances; • making scheduled principal and balloon payments on our debt obligations, including $450 million of senior notes that were repaid in February 2025 ( Note 19 ); • making scheduled interest payments on our debt obligations (future interest payments total $1.3 billion, with $246.9 million due during the next 12 months; interest on unhedged variable-rate debt obligations was calculated using the applicable annual variable interest rates and balances outstanding at December 31, 2024); and • other normal recurring operating expenses.
For the periods presented, there were 947 existing net-leased properties. W. P. Carey 2023 10-K – 34 For the year ended December 31, 2023 as compared to 2022, lease revenues from existing net-leased properties increased due to the following items (in millions): __________ (a) Excludes fixed minimum rent increases, which are reflected as straight-line rent adjustments within lease revenues.
Carey 2024 10-K – 33 For the year ended December 31, 2024 as compared to 2023, lease revenues from existing net-leased properties increased due to the following items (in millions): __________ (a) Excludes fixed minimum rent increases, which are reflected as straight-line rent adjustments within lease revenues.
Financial Highlights During the year ended December 31, 2023, we completed the following (as further described in the consolidated financial statements): Real Estate Investments • We acquired 16 investments totaling $1.2 billion ( Note 6 ). • We completed three construction projects at a cost totaling $60.7 million ( Note 6 ). • We funded approximately $38.2 million for a construction loan to build a retail complex in Las Vegas, Nevada, during the year ended December 31, 2023.
Financial Highlights During the year ended December 31, 2024, we completed the following (as further described in the consolidated financial statements): Real Estate Investments • We acquired 29 investments totaling $1.4 billion ( Note 6 ). • We completed five construction projects at a cost totaling $87.0 million ( Note 6 ). • We funded approximately $16.3 million for a construction loan to build a retail complex in Las Vegas, Nevada, during the year ended December 31, 2024.
Property Expenses, Excluding Reimbursable Tenant Costs For the year ended December 31, 2023 as compared to 2022, property expenses, excluding reimbursable tenant costs, decreased by $6.3 million, primarily due to the release of real estate taxes accrued for a cash basis tenant during the current year.
Property Expenses, Excluding Reimbursable Tenant Costs For the year ended December 31, 2024 as compared to 2023, property expenses, excluding reimbursable tenant costs, increased by $5.2 million, primarily due to the release of real estate taxes accrued for a cash basis tenant during 2023.
(c) We acquired a secured loan receivable with a fair value of $23.4 million in our merger with a former affiliate, Corporate Property Associates 17 – Global Incorporated, in October 2018 (“CPA:17 Merger”), for which the outstanding principal of $34.0 million was fully repaid to us in September 2022 ( Note 7 ).
(c) We acquired a secured loan receivable with a fair value of $13.3 million in our merger with a former affiliate, Corporate Property Associates 17 – Global Incorporated, in October 2018, for which the outstanding principal of $24.0 million was fully repaid to us in March 2024 ( Note 7 ).
“Net-leased properties sold, held for sale, derecognized, or reclassified to operating properties or sales-type leases” include: • 23 net-leased properties disposed of during the year ended December 31, 2023; • two net-leased properties classified as held for sale at December 31, 2023, both of which were sold in January 2024 ( Note 6 , Note 19 ); • 23 net-leased properties disposed of during the year ended December 31, 2022; • a portfolio of 12 net-leased hotel properties that converted to operating properties in the first quarter of 2023 upon expiration of the master lease with the Marriott Corporation, after which we began recognizing operating property revenues and expenses from these properties ( Note 6 ) (eight of these properties were sold during the third and fourth quarters of 2023); • portfolios of (i) 78 net-leased self-storage properties that were reclassified to net investments in sales-type leases in the first quarter of 2023, since the tenant provided notice of its intention to exercise its option to repurchase the properties, and (ii) 70 net-leased office properties that were reclassified to net investments in sales-type leases in the fourth quarter of 2023, since we agreed to sell the portfolio to the tenant, resulting in a lease modification; following these transactions, we began recognizing earnings from these properties within Income from finance leases and loans receivable in the consolidated financial statements; and • 59 net-leased properties derecognized in connection with the Spin-Off ( Note 3 ).
“Net-leased properties sold, held for sale, derecognized, or reclassified to operating properties or sales-type leases” include: • 175 net-leased properties disposed of during the year ended December 31, 2024; • 23 net-leased properties disposed of during the year ended December 31, 2023; • a portfolio of 12 net-leased hotel properties that converted to operating properties in the first quarter of 2023 upon expiration of the master lease with the Marriott Corporation, after which we began recognizing operating property revenues and expenses from these properties (eight of these properties were sold during the third and fourth quarters of 2023 and one property was sold during the second quarter of 2024); • two net-leased properties that were reclassified to net investments in sales-type leases in the third quarter of 2024, since we agreed to sell the properties to the tenant, resulting in a lease modification; following this transaction, we began recognizing earnings from these properties within Income from finance leases and loans receivable in the consolidated financial statements (these properties were sold in January 2025 ( Note 19 )); and • 59 net-leased properties derecognized in connection with the Spin-Off ( Note 3 ).
“Existing operating properties” are those that we acquired or placed into service prior to January 1, 2022 and that were not sold or held for sale during the periods presented.
Operating Property Revenues and Expenses “Existing operating properties” are those that we acquired or placed into service prior to January 1, 2023 and that were not sold, held for sale, or reclassified to net-leased properties during the periods presented.
As of December 31, 2023, scheduled debt principal payments total $1.3 billion during 2024 and $707.3 million during 2025 ( Note 12 ).
As of December 31, 2024, scheduled debt principal payments total $669.5 million during 2025 and $1.5 billion during 2026 ( Note 12 ).
Other Income and Expenses, and Provision for Income Taxes Gain on Sale of Real Estate, Net Gain on sale of real estate, net, consists of gains and losses on the sale of properties that were (i) disposed of, (ii) subject to the exercise of a purchase option, or (iii) subject to a purchase agreement resulting in a lease modification during the reporting period, as more fully described in Note 6 , Note 7 , and Note 17 .
Carey 2024 10-K – 37 Gain on Sale of Real Estate, Net Gain on sale of real estate, net, consists of gains and losses on the sale of properties that were (i) disposed of, (ii) subject to the exercise of a purchase option, (iii) subject to a purchase agreement resulting in a lease modification during the reporting period or (iv) included in assets held for sale and subject to a revised estimated purchase price during the reporting period, as more fully described in Note 6 , Note 7 , and Note 17 .
AFFO also reflects adjustments for unconsolidated partnerships and jointly owned investments. We use AFFO as one measure of our operating performance when we formulate corporate goals, evaluate the effectiveness of our strategies, and determine executive compensation.
We use AFFO as one measure of our operating performance when we formulate corporate goals, evaluate the effectiveness of our strategies, and determine executive compensation.
(b) Primarily comprised of higher reimbursable maintenance costs at certain properties. “Recently acquired net-leased properties” are those that we acquired or placed into service subsequent to December 31, 2021 and that were not sold or held for sale during the periods presented. Since January 1, 2022, we acquired 34 investments (comprised of 196 properties) and placed two properties into service.
“Recently acquired net-leased properties” are those that we acquired or placed into service subsequent to December 31, 2022 and that were not sold or held for sale during the periods presented. Since January 1, 2023, we acquired 37 investments (comprised of 342 properties).
P. Carey $ 1,118,267 $ 1,060,598 Summary FFO (as defined by NAREIT) attributable to W. P. Carey $ 1,061,226 $ 1,105,613 AFFO attributable to W. P. Carey $ 1,118,267 $ 1,060,598 W. P.
P. Carey $ 1,035,945 $ 1,118,267 Summary FFO (as defined by NAREIT) attributable to W. P. Carey $ 894,343 $ 1,061,226 AFFO attributable to W. P.
Of this amount, $203.1 million, at then-current exchange rates, was held in foreign subsidiaries, and we could be subject to restrictions or significant costs should we decide to repatriate these amounts; • our Unsecured Revolving Credit Facility, with available capacity of $1.6 billion (net of amounts reserved for standby letters of credit totaling $6.5 million); and • unleveraged properties that had an aggregate asset carrying value of approximately $13.6 billion at December 31, 2023, although there can be no assurance that we would be able to obtain financing for these properties.
Of this amount, $141.9 million, at then-current exchange rates, was held in foreign subsidiaries, and we could be subject to restrictions or significant costs should we decide to repatriate these amounts; • funds totaling $14.6 million that are held by an intermediary and have been designated for future tax-deferred like-kind exchanges under Section 1031 of the Internal Revenue Code (“1031 Exchange”) transactions ( Note 2 ); • our Unsecured Revolving Credit Facility, with available capacity of $1.9 billion (net of amounts reserved for standby letters of credit totaling $4.9 million); and • unleveraged properties that had an aggregate asset carrying value of approximately $13.6 billion at December 31, 2024, although there can be no assurance that we would be able to obtain financing for these properties.
“Operating properties sold or held for sale” are comprised of (i) the eight hotel operating properties sold during the year ended December 31, 2023 and (ii) a parking garage attached to a net-leased property that was derecognized in connection with the Spin-Off ( Note 3 ).
“Operating properties sold, held for sale, derecognized, or reclassified to net-leased properties” are comprised of (i) nine hotel operating properties sold during 2023 and 2024, (ii) a parking garage attached to a net-leased property that was derecognized in connection with the Spin-Off ( Note 3 ), and (iii) three self-storage operating properties that were reclassified to net-leased properties during 2024 ( Note 6 ).
We exclude these items from GAAP net income to arrive at AFFO as they are not the primary drivers in our decision-making process and excluding these items provides investors a view of our portfolio performance over time and makes it more comparable to other REITs that are currently not engaged in acquisitions, mergers, and restructuring, which are not part of our normal business operations.
We exclude these items from GAAP net income to arrive at AFFO as they are not the primary drivers in our decision-making process and excluding these items provides investors a view of our portfolio performance over time and makes it more comparable to other REITs. AFFO also reflects adjustments for unconsolidated partnerships and jointly owned investments.
Carey — Investment Management $ 3,254 $ 17,816 __________ (a) Amount for the year ended December 31, 2023 includes (i) a gain on sale of real estate of $176.2 million recognized upon receiving notice of the exercise of a purchase option for a portfolio of 78 net-lease self-storage properties and the reclassification of the investment to net investments in sales-type leases and (ii) a gain on sale of real estate of $59.1 million recognized upon entering into an agreement to sell our portfolio of 70 office properties located in Spain to the tenant occupying the properties and the reclassification of the investment to net investments in sales-type leases ( Note 7 ).
Carey $ 1,035,945 $ 1,118,267 __________ (a) Amount for the year ended December 31, 2023 includes (i) a gain on sale of real estate of $176.2 million recognized upon the reclassification of a portfolio of 78 net-lease self-storage properties to net investments in sales-type leases and (ii) a gain on sale of real estate of $59.1 million recognized upon the reclassification of a portfolio of 70 office properties located in Spain to net investments in sales-type leases ( Note 7 ).
Summary of Financing The table below summarizes our Senior Unsecured Notes, our non-recourse mortgages, and our Senior Unsecured Credit Facility (dollars in thousands): December 31, 2023 2022 Carrying Value Fixed rate: Senior Unsecured Notes (a) $ 6,035,686 $ 5,916,400 Unsecured Term Loans subject to interest rate swaps (a) 549,109 — Non-recourse mortgages (a) (b) 513,863 907,303 7,098,658 6,823,703 Variable rate: Unsecured Term Loans (a) 576,455 552,539 Unsecured Revolving Credit Facility 403,785 276,392 Non-recourse mortgages (a) : Floating interest rate mortgage loans 65,284 213,958 Amount subject to interest rate caps — 11,156 1,045,524 1,054,045 $ 8,144,182 $ 7,877,748 Percent of Total Debt Fixed rate 87 % 87 % Variable rate 13 % 13 % 100 % 100 % Weighted-Average Interest Rate at End of Year Fixed rate 2.9 % 2.9 % Variable rate (c) 5.1 % 3.5 % Total debt 3.2 % 3.0 % ____________ (a) Aggregate debt balance includes unamortized discount, net, totaling $31.8 million and $35.9 million as of December 31, 2023 and 2022, respectively, and unamortized deferred financing costs totaling $21.5 million and $26.0 million as of December 31, 2023 and 2022, respectively.
Carey 2024 10-K – 39 Summary of Financing The table below summarizes our Senior Unsecured Notes, our non-recourse mortgages, and our Senior Unsecured Credit Facility (dollars in thousands): December 31, 2024 2023 Carrying Value Fixed rate: Senior Unsecured Notes (a) $ 6,505,907 $ 6,035,686 Unsecured Term Loans subject to interest rate swaps (a) (b) 517,524 549,109 Non-recourse mortgages (a) (c) 401,821 513,863 7,425,252 7,098,658 Variable rate: Unsecured Term Loans (a) 558,302 576,455 Unsecured Revolving Credit Facility 55,448 403,785 Non-recourse mortgages (a) — 65,284 613,750 1,045,524 $ 8,039,002 $ 8,144,182 Percent of Total Debt Fixed rate 92 % 87 % Variable rate 8 % 13 % 100 % 100 % Weighted-Average Interest Rate at End of Year Fixed rate 3.2 % 2.9 % Variable rate 4.7 % 5.1 % Total debt 3.3 % 3.2 % ____________ (a) Aggregate debt balance includes unamortized discount, net, totaling $39.3 million and $31.8 million as of December 31, 2024 and 2023, respectively, and unamortized deferred financing costs totaling $30.9 million and $21.5 million as of December 31, 2024 and 2023, respectively.
Investing Activities — Our investing activities are generally comprised of real estate-related transactions (purchases and sales) and funding for build-to-suit activities and other capital expenditures on real estate. We also received $28.0 million from repayments of loans receivable and $10.5 million in distributions from equity method investments.
Investing Activities — Our investing activities are generally comprised of real estate-related transactions (purchases and sales) and funding for build-to-suit activities and other capital expenditures on real estate. We also received $24.0 million in 2024 from the repayment of a loan receivable ( Note 7 ).
Our assessment of our operations is focused on long-term sustainability and not on such non-cash items, which may cause short-term fluctuations in net income but have no impact on cash flows. Additionally, we exclude non-core income and expenses, such as gains or losses from extinguishment of debt, merger and acquisition expenses, and spin-off expenses.
Our assessment of our operations is focused on long-term sustainability and not on such non-cash items, which may cause short-term fluctuations in net income but have no impact on cash flows.
Portfolio information is provided on a pro rata basis, unless otherwise noted below, to better illustrate the economic impact of our various net-leased jointly owned investments. See Terms and Definitions below for a description of pro rata amounts.
We invest in high-quality single tenant industrial, warehouse, and retail properties subject to long-term net leases with built-in rent escalators. Portfolio information is provided on a pro rata basis, unless otherwise noted below, to better illustrate the economic impact of our various net-leased jointly owned investments. See Terms and Definitions below for a description of pro rata amounts.
Portfolio Summary As of December 31, Net-leased Properties 2023 2022 ABR (in thousands) $ 1,339,352 $ 1,381,899 Number of net-leased properties 1,424 1,449 Number of tenants 336 392 Total square footage (in thousands) 172,668 175,957 Occupancy 98.1 % 98.8 % Weighted-average lease term (in years) 11.7 10.8 Operating Properties Number of operating properties: 96 87 Number of self-storage operating properties 89 84 Number of hotel operating properties (a) 5 1 Number of student housing operating properties 2 2 Occupancy (self-storage operating properties) 90.3 % 91.0 % Number of countries 26 26 Total assets (in thousands) $ 17,976,783 $ 18,102,035 Net investments in real estate (in thousands) 14,913,899 15,488,898 Years Ended December 31, 2023 2022 Acquisition volume (in millions) (b) $ 1,264.2 $ 1,265.5 Construction projects completed (in millions) 60.7 148.1 Average U.S. dollar/euro exchange rate 1.0813 1.0540 Average U.S. dollar/British pound sterling exchange rate 1.2433 1.2373 __________ (a) During the first quarter of 2023, the master lease expired on certain hotel properties previously classified as net-leased properties, which converted to operating properties.
Portfolio Summary As of December 31, Net-leased Properties 2024 2023 ABR (in thousands) $ 1,337,172 $ 1,339,352 Number of net-leased properties 1,555 1,424 Number of tenants 355 336 Total square footage (in thousands) 176,420 172,668 Occupancy 98.6 % 98.1 % Weighted-average lease term (in years) 12.3 11.7 Operating Properties Number of operating properties: 84 96 Number of self-storage operating properties (a) 78 89 Number of hotel operating properties (b) 4 5 Number of student housing operating properties 2 2 Occupancy (self-storage operating properties) 89.6 % 90.3 % Number of countries 26 26 Total assets (in thousands) $ 17,535,024 $ 17,976,783 Net investments in real estate (in thousands) 14,580,475 14,913,899 Years Ended December 31, 2024 2023 Acquisition volume (in millions) (c) $ 1,477.0 $ 1,264.2 Construction projects completed (in millions) 87.0 60.7 Average U.S. dollar/euro exchange rate 1.0820 1.0813 Average U.S. dollar/British pound sterling exchange rate 1.2781 1.2433 __________ (a) During the third quarter of 2024, we entered into net lease agreements for certain self-storage properties previously classified as operating properties.
Carey $ 708,334 $ 599,139 Adjustments: Depreciation and amortization of real property 571,750 500,764 Gain on sale of real estate, net (a) (315,984) (43,476) Impairment charges — real estate (b) 86,411 39,119 Gain on change in control of interests (c) (d) — (33,931) Impairment charges — Investment Management goodwill (e) — 29,334 Proportionate share of adjustments to earnings from equity method investments (f) (g) 11,381 15,155 Proportionate share of adjustments for noncontrolling interests (h) (666) (491) Total adjustments 352,892 506,474 FFO (as defined by NAREIT) attributable to W.
Carey $ 460,839 $ 708,334 Adjustments: Depreciation and amortization of real property 485,088 571,750 Gain on sale of real estate, net (a) (74,822) (315,984) Impairment charges — real estate (b) 43,595 86,411 Gain on change in control of interests (c) (31,849) — Proportionate share of adjustments to earnings from equity method investments (d) 11,871 11,381 Proportionate share of adjustments for noncontrolling interests (e) (379) (666) Total adjustments 433,504 352,892 FFO (as defined by NAREIT) attributable to W.
P. Carey 2023 10-K – 38 Earnings from Equity Method Investments in Real Estate Our equity method investments in real estate are more fully described in Note 9 .
Earnings from Equity Method Investments Our equity method investments are more fully described in Note 9 .
(e) Of the 23 properties leased to ABC Technologies Holdings Inc., nine are located in Canada, eight are located in the United States, and six are located in Mexico. W. P.
(b) ABR amounts are subject to fluctuations in foreign currency exchange rates. (c) Of the 23 properties leased to ABC Technologies Holdings Inc., nine are located in Canada, eight are located in the United States, and six are located in Mexico.
Carey 1,061,226 1,105,613 Adjustments: Straight-line and other leasing and financing adjustments (71,869) (54,431) Other (gains) and losses (i) 36,184 (96,038) Stock-based compensation 34,504 32,841 Above- and below-market rent intangible lease amortization, net 34,164 41,390 Amortization of deferred financing costs 20,544 17,203 Merger and other expenses (j) 4,954 19,387 Other amortization and non-cash items 1,735 1,931 Tax expense (benefit) — deferred and other (199) (3,759) Proportionate share of adjustments to earnings from equity method investments (g) (2,535) (2,770) Proportionate share of adjustments for noncontrolling interests (h) (441) (769) Total adjustments 57,041 (45,015) AFFO attributable to W.
Carey 894,343 1,061,226 Adjustments: Other (gains) and losses (f) 137,988 36,184 Straight-line and other leasing and financing adjustments (80,899) (71,869) Stock-based compensation 40,894 34,504 Above- and below-market rent intangible lease amortization, net 26,144 34,164 Amortization of deferred financing costs 18,845 20,544 Merger and other expenses (g) 4,457 4,954 Tax benefit — deferred and other (4,245) (199) Other amortization and non-cash items 2,303 1,735 Proportionate share of adjustments to earnings from equity method investments (d) (3,531) (2,535) Proportionate share of adjustments for noncontrolling interests (e) (354) (441) Total adjustments 141,602 57,041 AFFO attributable to W.
To the extent that our working capital reserve is insufficient to satisfy our cash requirements, additional funds may be provided from cash from operations to meet our normal recurring short-term and long-term liquidity needs.
Our liquidity could be adversely affected by an unanticipated disruption to our operating cash flow, which could include interrupted rent collections or 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 from operations to meet our normal recurring short-term and long-term liquidity needs.
(c) Amount for the year ended December 31, 2022 represents a gain recognized on the remaining interests in four investments acquired in the CPA:18 Merger, which we had previously accounted for under the equity method ( Note 4 ).
(c) Amount for the year ended December 31, 2024 represents a gain recognized on the remaining interest in an investment acquired during the third quarter of 2024, which we had previously accounted for under the equity method ( Note 9 ).
Carey 2023 10-K – 37 Interest Expense For the year ended December 31, 2023 as compared to 2022, interest expense increased by $72.7 million, primarily due to (i) an increase of $35.6 million related to non-recourse mortgage loans assumed in the CPA:18 Merger on August 1, 2022 ( Note 4 ), (ii) higher outstanding balances and interest rates on our Senior Unsecured Credit Facility, (iii) our Unsecured Term Loan due 2026 that we entered into in April 2023 ( Note 12 ), and (iv) two senior unsecured notes issuances totaling $334.8 million (based on the exchange rate of the euro on the dates of issuance) with a weighted-average interest rate of 3.6% completed in September 2022, partially offset by the reduction of our mortgage debt outstanding by prepaying or repaying at or close to maturity a total of $483.1 million of non-recourse mortgage loans with a weighted-average interest rate of 4.8% since January 1, 2022 ( Note 12 ).
Carey 2024 10-K – 36 Other Income and Expenses, and Provision for Income Taxes Interest Expense For the year ended December 31, 2024 as compared to 2023, interest expense decreased by $14.5 million, primarily due to (i) lower outstanding balances on our Unsecured Revolving Credit Facility, (ii) the reduction of our mortgage debt outstanding by prepaying or repaying at or close to maturity a total of $583.0 million of non-recourse mortgage loans with a weighted-average interest rate of 4.7% since January 1, 2023, and (iii) the derecognition of non-recourse mortgage loans with an aggregate carrying value totaling $164.7 million in connection with the Spin-Off on November 1, 2023, partially offset by (i) our Unsecured Term Loan due 2026 that we entered into in April 2023 ( Note 12 ) and (ii) higher outstanding balances and interest rates on our Senior Unsecured Notes.
Cash Requirements and Liquidity As of December 31, 2023, we had (i) $633.9 million of cash and cash equivalents and (ii) approximately $1.6 billion of available capacity under our Unsecured Revolving Credit Facility (net of amounts reserved for standby letters of credit totaling $6.5 million).
Cash Requirements and Liquidity As of December 31, 2024, we had (i) $640.4 million of cash and cash equivalents, (ii) $14.6 million of funds that are held by an intermediary and have been designated for future 1031 Exchange transactions ( Note 2 ), and (iii) approximately $1.9 billion of available capacity under our Unsecured Revolving Credit Facility (net of amounts reserved for standby letters of credit totaling $4.9 million).
We focus our efforts on accretive investing and improving portfolio quality through re-leasing efforts, including negotiation of lease renewals, or selectively selling assets in order to increase value in our real estate portfolio. Through our Investment Management segment, we earn fees and other income from the management of NLOP and CESH.
We evaluate our results of operations with a primary focus on increasing and enhancing the value, quality, and number of our properties. We focus our efforts on accretive investing and improving portfolio quality through re-leasing efforts, including negotiation of lease renewals, or selectively selling assets in order to increase value in our real estate portfolio. W. P.
Carey 2023 10-K – 43 Cash Resources At December 31, 2023, our cash resources consisted of the following: • cash and cash equivalents totaling $633.9 million.
Cash Resources At December 31, 2024, our cash resources consisted of the following: • cash and cash equivalents totaling $640.4 million.
Carey 3,497 7,536 Net income attributable to W. P. Carey 708,334 599,139 Dividends declared 880,605 859,655 Net cash provided by operating activities 1,073,432 1,003,556 Net cash used in investing activities (905,883) (1,052,531) Net cash provided by financing activities 292,562 57,887 Supplemental financial measures (a) : Adjusted funds from operations attributable to W. P.
Carey 460,839 708,334 Dividends declared 770,426 880,605 Net cash provided by operating activities (a) 1,833,112 1,073,432 Net cash used in investing activities (1,133,892) (905,883) Net cash (used in) provided by financing activities (688,468) 292,562 Supplemental financial measures (b) : Adjusted funds from operations attributable to W. P.
FFO and AFFO, or similarly titled measures disclosed by other REITs, may not be comparable to our FFO and AFFO measures. W. P. Carey 2023 10-K – 49
These non-GAAP measures should be used in conjunction with net income as defined by GAAP. FFO and AFFO, or similarly titled measures disclosed by other REITs, may not be comparable to our FFO and AFFO measures. W. P. Carey 2024 10-K – 45
For the periods presented, we recorded operating property revenues from 11 existing operating properties, comprised of ten self-storage operating properties (which excludes nine self-storage properties accounted for under the equity method) and one hotel operating property.
For the periods presented, we recorded operating property revenues from 75 existing operating properties, comprised of 72 self-storage operating properties, two student housing operating properties, and one hotel operating property.
Gain on Change in Control of Interests In connection with the CPA:18 Merger, during the year ended December 31, 2022, we acquired the remaining interests in four investments in which we already had a joint interest and accounted for under the equity method.
Gain on Change in Control of Interests On September 1, 2024, we acquired the remaining interest in an investment in which we already had a joint interest and accounted for under the equity method.
Carey 2023 10-K – 39 The following table presents other gains and (losses) within our Real Estate segment (in thousands): Years Ended December 31, 2023 2022 Change Other Gains and (Losses) Change in allowance for credit losses on finance receivables ( Note 7 ) (a) $ (29,074) $ 14,363 $ (43,437) Net realized and unrealized losses on foreign currency exchange rate movements (b) (5,458) (26,866) 21,408 Non-cash unrealized losses on non-hedging derivatives (3,918) (898) (3,020) Gain on extinguishment of debt 2,940 1,301 1,639 Non-cash unrealized gains related to an increase in the fair value of our investment in common shares of WLT ( Note 10 ) — 49,233 (49,233) Non-cash unrealized gains related to an increase in the fair value of our investment in shares of Lineage Logistics ( Note 10 ) — 38,582 (38,582) Non-cash unrealized gains related to an increase in the fair value of our investment in preferred shares of WLT ( Note 10 ) — 18,688 (18,688) Gain on repayment of secured loan receivable (c) — 10,613 (10,613) Adjustment to insurance receivable acquired as part of a prior merger (d) — (9,358) 9,358 Other (917) 1,491 (2,408) $ (36,427) $ 97,149 $ (133,576) __________ (a) As a result of the declining financial position of one of our top ten tenants, we recognized a $28.8 million allowance for credit loss during the year ended December 31, 2023, based on our expectation of collecting lower rents going forward.
The following table presents other gains and (losses) (in thousands): Years Ended December 31, 2024 2023 Change Other Gains and (Losses) Non-cash unrealized losses related to a decrease in the fair value of our investment in shares of Lineage ( Note 10 ) $ (134,002) $ — $ (134,002) Change in allowance for credit losses on finance receivables ( Note 7 ) (a) (27,629) (29,074) 1,445 Net realized and unrealized gains (losses) on foreign currency exchange rate movements (b) 11,491 (5,454) 16,945 Gain on repayment of secured loan receivable (c) 10,650 — 10,650 Non-cash unrealized gains (losses) on non-hedging derivatives 1,913 (3,918) 5,831 (Loss) gain on extinguishment of debt (205) 2,940 (3,145) Other (206) (678) 472 $ (137,988) $ (36,184) $ (101,804) __________ (a) As a result of the declining financial position of one of our top ten tenants, we recognized a $28.8 million non-cash allowance for credit loss during the year ended December 31, 2023, based on our expectation of collecting lower rents going forward.
While we believe that FFO and AFFO are important supplemental measures, they should not be considered as alternatives to net income as an indication of a company’s operating performance. These non-GAAP measures should be used in conjunction with net income as defined by GAAP.
Amount for the year ended December 31, 2023 is primarily comprised of costs incurred in connection with the Spin-Off ( Note 1 , Note 3 ). While we believe that FFO and AFFO are important supplemental measures, they should not be considered as alternatives to net income as an indication of a company’s operating performance.
Due to the change in control of these four jointly owned investments, we recorded a gain on change in control of interests of $11.4 million reflecting the difference between our carrying values and the preliminary estimated fair values of our previously held equity interests on August 1, 2022.
Due to the change in control of this jointly owned investment, we recorded a gain on change in control of interests of $31.8 million reflecting the difference between our carrying value and the fair value of our previously held equity interest. Subsequent to this acquisition, we consolidated this wholly owned investment ( Note 9 ).
For the year ended December 31, 2023 as compared to 2022, general and administrative expenses increased by $7.1 million, primarily due to higher compensation expense, increased employee benefits expense, increased professional fees and expenses resulting from the assets acquired in the CPA:18 Merger ( Note 4 ), and no longer receiving reimbursements from CPA:18 – Global.
General and Administrative For the year ended December 31, 2024 as compared to 2023, general and administrative expenses increased by $2.6 million, primarily due to higher compensation expense and employee benefits expense.
Amount for the year ended December 31, 2022 includes $19.8 million of sale-leasebacks classified as loans receivable ( Note 7 ). W. P. Carey 2023 10-K – 28 Net-Leased Portfolio The tables below represent information about our net-leased portfolio at December 31, 2023 on a pro rata basis and, accordingly, exclude all operating properties.
Carey 2024 10-K – 27 Net-Leased Portfolio The tables below represent information about our net-leased portfolio at December 31, 2024 on a pro rata basis and, accordingly, exclude all operating properties. See Terms and Definitions below for a description of pro rata amounts and ABR.
Carey (AFFO) 1,118,267 1,060,598 Diluted weighted-average shares outstanding 215,760,496 200,427,124 __________ (a) We consider Adjusted funds from operations (“AFFO”), a supplemental measure that is not defined by U.S. generally accepted accounting principles (“GAAP”) (a “non-GAAP measure”), to be an important measure in the evaluation of our operating performance.
Such proceeds are included within Net cash provided by operating activities in accordance with Accounting Standards Codification (“ASC”) 842, Leases . (b) We consider Adjusted funds from operations (“AFFO”), a supplemental measure that is not defined by U.S. generally accepted accounting principles (“GAAP”) (a “non-GAAP measure”), to be an important measure in the evaluation of our operating performance.
We no longer receive certain fees and distributions from CPA:18 – Global following the completion of the CPA:18 Merger on August 1, 2022 ( Note 4 ). Despite these fluctuations, we believe that we will generate sufficient cash from operations to meet our normal recurring short-term liquidity needs.
Despite these fluctuations, we believe that we will generate sufficient cash from operations to meet our normal recurring short-term liquidity needs.
As a result, during the year ended December 31, 2023, we reclassified 12 consolidated hotel properties from net leases to operating properties ( Note 6 ). We sold eight of these hotel operating properties during the third and fourth quarters of 2023 ( Note 17 ).
As a result, during the third quarter of 2024, we reclassified 12 self-storage properties from operating properties to net leases ( Note 6 , Note 9 ). In addition, we acquired one self-storage operating property during 2024 ( Note 6 ). (b) We sold one hotel operating property during 2024 ( Note 6 , Note 17 ).
(b) Includes non-recourse mortgages subject to variable-to-fixed interest rate swaps totaling $45.0 million and $83.0 million as of December 31, 2023 and 2022, respectively. (c) The impact of our interest rate swaps and caps is reflected in the weighted-average interest rates. W. P.
(b) The interest rate swaps on these Unsecured Term Loans expired on December 31, 2024, after which the Unsecured Term Loans incur interest at a variable rate. (c) Includes non-recourse mortgages subject to variable-to-fixed interest rate swaps totaling $43.5 million and $45.0 million as of December 31, 2024 and 2023, respectively.
For the year ended December 31, 2023 as compared to 2022, stock-based compensation expense increased by $1.7 million, primarily due to higher amortization of restricted share units, partially offset by the impact of changes in the projected payout for performance share units.
For the year ended December 31, 2024 as compared to 2023, stock-based compensation expense increased by $6.4 million, primarily due to (i) changes in projected performance share units (“PSUs”) payouts of $4.4 million, (ii) the modification of restricted share units (“RSUs”) and PSUs in connection with an executive departure totaling $1.1 million, and (iii) the higher value of RSUs granted in 2024 compared to those RSUs that vested in 2024 totaling $1.0 million.
The following table presents certain information about our outstanding debt (dollars in thousands): Years Ended December 31, 2023 2022 Average outstanding debt balance $ 8,404,466 $ 7,392,208 Weighted-average interest rate 3.2 % 2.7 % Non-Operating Income Non-operating income primarily consists of realized gains and losses on derivative instruments, dividends from equity securities, and interest income on our loans to affiliates and cash deposits.
The following table presents certain information about our outstanding debt (dollars in thousands): Years Ended December 31, 2024 2023 Average outstanding debt balance $ 7,948,034 $ 8,404,466 Weighted-average interest rate 3.2 % 3.2 % Other Gains and (Losses) Other gains and (losses) primarily consists of gains and losses on (i) the mark-to-market fair value of equity securities, (ii) extinguishment of debt, (iii) foreign currency exchange rate movements (except those foreign currency-denominated unsecured debt instruments that were designated as net investment hedges ( Note 11 )), and (iv) changes in the non-cash allowance for credit losses on loans receivable and finance leases.
Top Ten Tenants by ABR (dollars in thousands) Tenant/Lease Guarantor Description Number of Properties ABR ABR Percent Weighted-Average Lease Term (Years) U-Haul Moving Partners Inc. and Mercury Partners, LP (a) Net lease self-storage properties in the U.S. 78 $ 38,751 2.9 % 0.2 State of Andalusia (b) (c) Government office properties in Spain 70 32,539 2.4 % 11.0 Apotex Pharmaceutical Holdings Inc.
Top Ten Tenants by ABR (dollars in thousands) Tenant/Lease Guarantor Description Number of Properties ABR ABR Percent Weighted-Average Lease Term (Years) Extra Space Storage, Inc. Net lease self-storage properties in the U.S. leased to publicly traded self-storage REIT 39 $ 35,557 2.7 % 24.7 Apotex Pharmaceutical Holdings Inc.
Carey 2023 10-K – 36 Operating Expenses Depreciation and Amortization For the year ended December 31, 2023 as compared to 2022, depreciation and amortization expense for net-leased properties and self-storage operating properties increased primarily due to the impact of net acquisition activity (including properties acquired in the CPA:18 Merger ( Note 4 )), partially offset by the impact of the Spin-Off ( Note 3 ).
Operating Expenses Depreciation and Amortization For the year ended December 31, 2024 as compared to 2023, depreciation and amortization expense decreased primarily due to the impact of the Spin-Off ( Note 3 ), the Office Sale Program, and other dispositions, partially offset by the impact of property acquisition activity and certain tenant vacancies (amortization of intangible assets for such properties was accelerated upon vacancy).
Therefore, we recorded a $10.6 million gain on repayment of this secured loan receivable. (d) This insurance receivable was acquired in the CPA:17 Merger.
Therefore, we recorded a $10.7 million gain on repayment of this secured loan receivable during the year ended December 31, 2024. W. P.
The timing and amount of such gains or losses cannot always be estimated and are subject to fluctuation. Certain of our foreign currency-denominated unsecured debt instruments were designated as net investment hedges during the years ended December 31, 2023 and 2022 .
The timing and amount of such gains or losses cannot always be estimated and are subject to fluctuation.
Net Income Attributable to W. P. Carey Net income attributable to W. P. Carey increased in 2023 as compared to 2022. Net income from Real Estate attributable to W. P.
Net Income Attributable to W. P. Carey Net income attributable to W. P.
For the year ended December 31, 2022, merger and other expenses are primarily comprised of costs incurred in connection with the CPA:18 Merger ( Note 4 ), which was completed in August 2022.
Merger and Other Expenses For the year ended December 31, 2024, merger and other expenses are primarily comprised of the write-off of a value added tax receivable that was previously recorded in connection with an international investment.
Provision for Income Taxes For the year ended December 31, 2023 as compared to 2022, provision for income taxes within our Real Estate segment increased by $23.0 million, primarily due to (i) higher current taxes as a result of rent increases driven by CPI adjustments at existing international properties, (ii) deferred tax benefits recognized during the prior year period related to the release of valuation allowances on certain foreign properties, and (iii) the impact of international property acquisitions.
Carey 2024 10-K – 38 Provision for Income Taxes For the year ended December 31, 2024 as compared to 2023, provision for income taxes decreased by $12.3 million, primarily due to (i) the impact of international lease restructurings during 2024, (ii) the impact of international office property dispositions, and (iii) the release of deferred tax assets in connection with the tax restructuring of certain international properties during 2023, partially offset by a deferred tax benefit recognized during 2023 related to an impairment charge recorded on a foreign property.
(c) Includes ABR of $32.5 million from a portfolio of 70 properties leased to State of Andalusia that was sold in January 2024 ( Note 19 ). Terms and Definitions Pro Rata Metrics —The portfolio information above contains certain metrics prepared on a pro rata basis. We refer to these metrics as pro rata metrics.
Terms and Definitions Pro Rata Metrics — The portfolio information above contains certain metrics prepared on a pro rata basis. We refer to these metrics as pro rata metrics. We have certain investments in which our economic ownership is less than 100%.
Stock-based Compensation Expense For a description of our equity plans and awards, please see Note 15 . Stock-based compensation expense is fully recognized within our Real Estate segment.
The tenant was previously not current on real estate taxes due, and repaid the outstanding amount in the second quarter of 2023. Impairment Charges — Real Estate Our impairment charges on real estate are described in Note 10 . Stock-Based Compensation Expense For a description of our equity plans and awards, please see Note 15 .

… 105 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

68 edited+9 added−12 removed130 unchanged
Biggest changeIf we are unable to find alternative credit arrangements or other funding in a high interest environment, our business needs may not be adequately met. Certain financial covenants could also be affected as a result of higher operating and debt service costs, which may place restrictions on our liquidity.
Biggest changeHigher interest rates are often the result of challenges in the broader financing markets, and such challenges could impact our ability to arrange third-party debt, including to refinance maturing debt in part or in whole when due. If we are unable to find alternative credit arrangements or other funding sources, our financing needs may not be adequately met. W. P.
We are not required to meet any property-type, tenant or geographic diversification standards. Therefore, our investments may become concentrated by type, tenant or geographic location, which could subject us to significant risks with potentially adverse effects on our investment objectives.
We are not required to meet any tenant industry, geographic diversification or property-type standards. Therefore, our investments may become concentrated by tenant industry, geographic location, type or tenant which could subject us to significant risks with potentially adverse effects on our investment objectives.
We will also be subject to a 4.0% nondeductible excise tax if the actual amount that we pay out to our stockholders for a calendar year is less than a minimum amount specified under the Internal Revenue Code.
We will also be subject to a 4% nondeductible excise tax if the actual amount that we pay out to our stockholders for a calendar year is less than a minimum amount specified under the Internal Revenue Code.
Additionally, in the event that we have to declare dividends in-kind in order to satisfy the REIT annual distribution requirements, a holder of our common stock will be required to report dividend income as a result of such distributions even though we distributed no cash or only nominal amounts of cash to such stockholder. W. P.
Additionally, in the event that we have to declare dividends in-kind in order to satisfy the REIT annual distribution requirements, a holder of our common stock will be required to report dividend income as a result of such distributions even though we distributed no cash or only nominal amounts of cash to such stockholder.
If, in any taxable year, we fail to qualify for taxation as a REIT and are not entitled to relief under the Internal Revenue Code, we will: • not be allowed a deduction for distributions to stockholders in computing our taxable income; • be subject to federal and state income tax, including a 15% corporate minimum tax on certain corporations and a 1% excise tax on certain stock repurchases by certain corporations, among other changes, on our taxable income at regular corporate rate; and • be barred from qualifying as a REIT for the four taxable years following the year when we were disqualified.
If, in any taxable year, we fail to qualify for taxation as a REIT and are not entitled to relief under the Internal Revenue Code, we will: • not be allowed a deduction for distributions to stockholders in computing our taxable income; • be subject to federal and state income tax, including a 15% corporate minimum tax on certain corporations and a 1% excise tax on certain stock repurchases by certain corporations on our taxable income at regular corporate rate; and • be barred from qualifying as a REIT for the four taxable years following the year when we were disqualified.
In particular, if the accumulation of cash in our TRSs causes the fair market value of our TRS interests and certain other non-qualifying assets to exceed 20% of the fair market value of our assets, we would lose tax efficiency and could potentially fail to qualify as a REIT.
In particular, if the accumulation of cash in our TRSs causes the fair market value of our TRS interests and certain other non-qualifying assets to exceed 20% of the fair market value of our assets, we would lose tax efficiency and could potentially fail to qualify as a REIT. W. P.
Given the highly complex nature of the rules governing REITs, the ongoing importance of factual determinations, and the possibility of future changes in our circumstances, no assurance can be given that we will qualify as a REIT for any particular year.
Given the highly complex nature of the rules governing REITs, the ongoing importance of factual determinations, and the possibility of future changes in our circumstances, no assurance can be given that we will qualify as a REIT for any particular year. W. P.
Any TRS assets and operations would continue to be subject, as applicable, to federal and state corporate income taxes and to foreign taxes in the jurisdictions in which those assets and operations are located. Any of these taxes would decrease our earnings and our cash available for distributions to stockholders.
Any TRS assets and operations would continue to be subject, as applicable, to federal and state corporate income taxes and to foreign taxes in the jurisdictions in which those assets and operations are located. Any of these taxes would decrease our earnings and our cash available for distributions to stockholders. W. P.
In addition, in order to continue to qualify as a REIT, any C corporation earnings and profits to which we succeed must be distributed as of the close of the taxable year in which we accumulate or acquire such C corporation’s earnings and profits. W. P.
In addition, in order to continue to qualify as a REIT, any C corporation earnings and profits to which we succeed must be distributed as of the close of the taxable year in which we accumulate or acquire such C corporation’s earnings and profits.
Entry into new asset classes or countries may subject us to new laws and regulations with which we are not familiar, or from which we are currently exempt, and may lead to increased litigation and regulatory risk and costs.
Entry into new asset classes or countries may subject us to new laws and regulations with which we are not familiar, or from which we are currently exempt, and may lead to increased litigation and regulatory risk and costs. W. P.
There can be no assurance that the insurance we maintain to cover some of these risks will be sufficient to cover the losses from any future breaches of our systems. Further information relating to cybersecurity risk management is discussed in Item 1 C. Cybersecurity in this Report. Item 1B. Unresolved Staff Comments. None.
There can be no assurance that the insurance we maintain to cover some of these risks will be sufficient to cover the losses from any future breaches of our systems. Further information relating to cybersecurity risk management is discussed in Item 1C. Cybersecurity in this Report. Item 1B. Unresolved Staff Comments. None.
We will also be subject to a federal corporate level tax at the highest regular corporate rate (currently 21%) on all or a portion of the gain recognized from a sale of assets formerly held by any C corporation that we acquire on a carry-over basis transaction occurring within a five-year period after we acquire such assets, to the extent the built-in gain based on the fair market value of those assets on the effective date of the REIT election is in excess of our then tax basis.
Carey 2024 10-K – 17 We will also be subject to a federal corporate level tax at the highest regular corporate rate (currently 21%) on all or a portion of the gain recognized from a sale of assets formerly held by any C corporation that we acquire on a carry-over basis transaction occurring within a five-year period after we acquire such assets, to the extent the built-in gain based on the fair market value of those assets on the effective date of the REIT election is in excess of our then tax basis.
Furthermore, the REIT distribution requirements may increase the financing we need to fund capital expenditures, future growth, and expansion initiatives, which would increase our total leverage.
Furthermore, the REIT distribution requirements may increase the financing we need to fund capital expenditures, future growth, and expansion initiatives, which would increase our total leverage. W. P.
This more favorable tax rate for regular corporate distributions could cause qualified investors to perceive investments in REITs to be less attractive than investments in the stock of corporations that pay distributions, which could adversely affect the value of REIT stocks, including our common stock. W. P.
The more favorable tax rate for regular corporate distributions could cause qualified investors to perceive investments in REITs to be less attractive than investments in the stock of corporations that pay distributions, which could adversely affect the value of REIT stocks, including our common stock.
Although we do not intend to hold any properties that would be characterized as held for sale to customers in the ordinary course of our business, such characterization is a factual determination and no guarantee can be given that the IRS would agree with our characterization of our properties or that we will always be able to satisfy the available safe harbors.
Although we do not intend to hold any properties that would be characterized as held for sale to customers in the ordinary course of our business, such characterization is a factual determination and no guarantee can be given that the Internal Revenue Service would agree with our characterization of our properties or that we will always be able to satisfy the available safe harbors.
Our Board, in its sole discretion, may exempt a person from such ownership limits, provided that they obtain such representations, covenants, and undertakings as appropriate to determine that the exemption would not affect our REIT status.
Our board of directors (our “Board”), in its sole discretion, may exempt a person from such ownership limits, provided that they obtain such representations, covenants, and undertakings as appropriate to determine that the exemption would not affect our REIT status.
Risks Related to Our Liquidity and Capital Resources Our level of indebtedness could have significant adverse consequences and our cash flow may be insufficient to meet our debt service obligations. Our consolidated indebtedness as of December 31, 2023, was approximately $8.1 billion, representing a consolidated debt to gross assets ratio of approximately 41.6%.
Risks Related to Our Liquidity and Capital Resources Our level of indebtedness could have significant adverse consequences and our cash flow may be insufficient to meet our debt service obligations. Our consolidated indebtedness as of December 31, 2024, was approximately $8.0 billion, representing a consolidated debt to gross assets ratio of approximately 41.6%.
The trading volume and market price of our common stock may fluctuate significantly and be adversely impacted in response to a number of factors, including disruption in the banking industry, continued inflation, and other macroeconomic developments.
The trading volume and market price of our common stock may fluctuate significantly and be adversely impacted in response to a number of factors, including disruption in the banking industry, inflation, trade disputes, and other macroeconomic developments.
Carey 2023 10-K – 7 • difficulty in complying with conflicting obligations in various jurisdictions and the burden of observing a variety of evolving foreign laws, regulations, and governmental rules and policies, which may be more stringent than U.S. laws and regulations (including land use, zoning, environmental, financial, and privacy laws and regulations, such as the European Union’s General Data Protection Regulation); • tax requirements vary by country and existing foreign tax laws and interpretations may change (e.g., the on-going implementation of the European Union’s Anti-Tax Avoidance Directives and the new global minimum tax (“Pillar Two”)), which may result in additional taxes on our international investments or additional taxes as a result of Pillar Two; • changes in operating expenses in particular countries or regions; • increased energy and commodity prices in Europe; • foreign exchange rates; and • geopolitical and military conflict risk and adverse market conditions caused by changes in national or regional economic or political conditions, including the ongoing conflict between Russia and Ukraine, rising tensions between China and Taiwan and the conflict in the Middle East (which may impact relative interest rates, the terms or availability of debt financing, customers’ ability and willingness to renew agreements, make payments, and enter into new agreements, and energy costs).
Carey 2024 10-K – 7 • trade disputes with other countries, the possibility of changes to some international trade agreements, and government regulatory actions, including the imposition of tariffs, trade barriers or other protectionist actions; • difficulty in complying with conflicting obligations in various jurisdictions and the burden of observing a variety of evolving foreign laws, regulations, and governmental rules and policies, which may be more stringent than U.S. laws and regulations (including land use, zoning, environmental, financial, and privacy laws and regulations, such as the European Union’s General Data Protection Regulation); • tax requirements vary by country and existing foreign tax laws and interpretations may change (e.g., the on-going implementation of the European Union’s Anti-Tax Avoidance Directives and the new global minimum tax (“Pillar Two”)), which may result in additional taxes on our international investments or additional taxes as a result of Pillar Two; • changes in operating expenses in particular countries or regions; • increased energy and commodity prices in Europe; • foreign exchange rates; and • geopolitical and military conflict risk and adverse market conditions caused by changes in national or regional economic or political conditions, including the ongoing conflict between Russia and Ukraine, rising tensions between China and Taiwan and the conflict in the Middle East (which may impact relative interest rates, the terms or availability of debt financing, customers’ ability and willingness to renew agreements, make payments, and enter into new agreements, and energy costs).
Furthermore, tenants and potential tenants of our properties may also be adversely impacted by inflation and high interest rates, which could negatively impact our tenants’ ability to pay rent and the demand for our properties. W. P.
Furthermore, tenants and potential tenants of our properties may be adversely impacted by inflation and high interest rates, which could negatively impact our tenants’ ability to pay rent and the demand for our properties.
This limitation on the deductibility of net business interest could result in additional taxable income for us and our subsidiaries that are C corporations, including our TRSs, unless we or our subsidiaries qualify as real estate companies and elect not to be subject to such limitation in exchange for using longer depreciation periods that may otherwise be available.
This limitation on the deductibility of net business interest could result in additional taxable income for us and our subsidiaries that are C corporations, including our TRSs, unless we or our subsidiaries qualify as a real property trade or business and elect not to be subject to such limitation in exchange for using longer depreciation periods that may otherwise be available.
Our Board may also increase or decrease the common stock ownership limit and/or the aggregate stock ownership limit, so long as the change would not result in five or fewer persons beneficially owning more than 49.9% in value of our outstanding stock; • “business combination” provisions that, subject to limitations, prohibit certain business combinations between us and an “interested stockholder” (defined generally as any person who beneficially owns 10% or more of the voting power of our outstanding voting stock), or an affiliate thereof, for five years after the most recent date on which the stockholder becomes an interested stockholder, and thereafter imposes appraisal rights and supermajority voting requirements on these combinations; • “control share” provisions that provide that holders of “control shares” of our company (defined as outstanding voting shares which, when aggregated with all other shares owned or controlled by the stockholder, entitle the stockholder to exercise one of three increasing ranges of voting power in electing directors) acquired in a “control share acquisition” (defined as the direct or indirect acquisition of ownership or control of issued and outstanding “control shares”) have no voting rights except to the extent approved by our stockholders by the affirmative vote of at least two-thirds of all the votes entitled to be cast on the matter, excluding all interested shares; and • our charter empowers our Board, without stockholder approval, to increase or decrease the aggregate number of shares of our stock or the number of shares of stock of any class or series that we have authority to issue, classify any unissued shares of common stock or preferred stock, reclassify any previously classified, but unissued, shares of common stock or preferred stock into one or more classes or series of stock, and issue such shares of stock so classified or reclassified, and our Board may determine the relative rights, preferences, and privileges of any class or series of common stock or preferred stock issued, including terms that could have the effect of delaying or preventing a change of control transaction.
Carey 2024 10-K – 13 • “business combination” provisions that, subject to limitations, prohibit certain business combinations between us and an “interested stockholder” (defined generally as any person who beneficially owns 10% or more of the voting power of our outstanding voting stock), or an affiliate thereof, for five years after the most recent date on which the stockholder becomes an interested stockholder, and thereafter imposes appraisal rights and supermajority voting requirements on these combinations; • “control share” provisions that provide that holders of “control shares” of our company (defined as outstanding voting shares which, when aggregated with all other shares owned or controlled by the stockholder, entitle the stockholder to exercise one of three increasing ranges of voting power in electing directors) acquired in a “control share acquisition” (defined as the direct or indirect acquisition of ownership or control of issued and outstanding “control shares”) have no voting rights except to the extent approved by our stockholders by the affirmative vote of at least two-thirds of all the votes entitled to be cast on the matter, excluding all interested shares; and • our charter empowers our Board, without stockholder approval, to increase or decrease the aggregate number of shares of our stock or the number of shares of stock of any class or series that we have authority to issue, classify any unissued shares of common stock or preferred stock, reclassify any previously classified, but unissued, shares of common stock or preferred stock into one or more classes or series of stock, and issue such shares of stock so classified or reclassified, and our Board may determine the relative rights, preferences, and privileges of any class or series of common stock or preferred stock issued, including terms that could have the effect of delaying or preventing a change of control transaction.
We are currently assessing our obligations under these laws and regulations but we expect that compliance with these laws and regulations could result in substantial compliance costs, retrofit costs and construction costs, including monitoring and reporting costs and capital expenditures for environmental control facilities and other new equipment.
Carey 2024 10-K – 9 We are currently assessing our obligations under these laws and regulations but we expect that compliance with these laws and regulations could result in substantial compliance costs, retrofit costs and construction costs, including monitoring and reporting costs and capital expenditures for environmental control facilities and other new equipment.
At December 31, 2023, we had $579.1 million of property-level mortgage debt on a non-recourse basis, which limits our exposure on any property to the amount of equity invested in the property. If we are unable to make our mortgage-related debt payments as required, a lender could foreclose on the property or properties securing its debt.
At December 31, 2024, we had $401.8 million of property-level mortgage debt on a non-recourse basis, which limits our exposure on any property to the amount of equity invested in the property. If we are unable to make our mortgage-related debt payments as required, a lender could foreclose on the property or properties securing its debt.
Carey 2023 10-K – 10 The value of our real estate is subject to fluctuation.
Carey 2024 10-K – 10 The value of our real estate is subject to fluctuation.
Because the REIT rules limit our ability to receive distributions from TRSs, our ability to fund distribution payments using cash generated through our TRSs may be limited. Our ability to receive distributions from our TRSs is limited by the rules we must comply with in order to maintain our REIT status.
Carey 2024 10-K – 16 Because the REIT rules limit our ability to receive distributions from TRSs, our ability to fund distribution payments using cash generated through our TRSs may be limited. Our ability to receive distributions from our TRSs is limited by the rules we must comply with in order to maintain our REIT status.
Carey 2023 10-K – 19 We may make investments in asset classes or countries outside of our core investment strategy which may be perceived as complicating our strategy relative to our peers. We may need to expand beyond our current asset class mix to grow our portfolio.
We may make investments in asset classes or countries outside of our core investment strategy which may be perceived as complicating our strategy relative to our peers. We may need to expand beyond our current asset class mix to grow our portfolio.
This consolidated indebtedness was comprised of (i) $6.0 billion in Senior Unsecured Notes (as defined in Note 12 ), (ii) $403.8 million outstanding under our Unsecured Revolving Credit Facility (as defined in Note 12 ), (iii) $1.1 billion outstanding under our Unsecured Term Loans (as defined in Note 12 ), and (iv) $579.1 million in non-recourse mortgage loans on various properties.
This consolidated indebtedness was comprised of (i) $6.5 billion in Senior Unsecured Notes (as defined in Note 12 ), (ii) $55.4 million outstanding under our Unsecured Revolving Credit Facility (as defined in Note 12 ), (iii) $1.1 billion outstanding under our Unsecured Term Loans (as defined in Note 12 ), and (iv) $401.8 million in non-recourse mortgage loans on various properties.
In addition, despite our substantial outstanding indebtedness and the restrictions in the agreements governing our indebtedness, we may incur significantly more indebtedness in the future, which would exacerbate the risks discussed above. W. P. Carey 2023 10-K – 12 Restrictive covenants in our credit agreement and indentures may limit our ability to expand or fully pursue our business strategies.
In addition, despite our substantial outstanding indebtedness and the restrictions in the agreements governing our indebtedness, we may incur significantly more indebtedness in the future, which would exacerbate the risks discussed above. Restrictive covenants in our credit agreement and indentures may limit our ability to expand or fully pursue our business strategies.
Our charter, our bylaws, and Maryland law also contain W. P. Carey 2023 10-K – 14 other provisions that may delay, defer, or prevent a transaction or a change of control that might involve a premium price for our common stock or otherwise be in the best interests of our stockholders.
Our charter, our bylaws, and Maryland law also contain other provisions that may delay, defer, or prevent a transaction or a change of control that might involve a premium price for our common stock or otherwise be in the best interests of our stockholders.
Carey 2023 10-K – 15 Because certain covenants in our debt instruments may limit our ability to make required REIT distributions, we could be subject to taxation. Our existing debt instruments include, and our future debt instruments may include, covenants that limit our ability to make required REIT distributions.
Because certain covenants in our debt instruments may limit our ability to make required REIT distributions, we could be subject to taxation. Our existing debt instruments include, and our future debt instruments may include, covenants that limit our ability to make required REIT distributions.
In addition, losses in any of our TRSs generally will not provide any tax benefit, except for being carried forward for use against future taxable income in the TRSs. W. P. Carey 2023 10-K – 16 We use TRSs, which may cause us to fail to qualify as a REIT.
In addition, losses in any of our TRSs generally will not provide any tax benefit, except for being carried forward for use against future taxable income in the TRSs. We use TRSs, which may cause us to fail to qualify as a REIT.
Failure to hedge effectively against interest rate changes and foreign exchange rate changes may have a material adverse effect on our business, financial condition and results of operations.
Carey 2024 10-K – 19 Failure to hedge effectively against interest rate changes and foreign exchange rate changes may have a material adverse effect on our business, financial condition and results of operations.
Carey 2023 10-K – 8 A significant amount of our leases will expire within the next five years and we may have difficulty re-leasing or selling our properties if tenants do not renew their leases. Approximately 21% of our leases, based on our ABR as of December 31, 2023, are due to expire within the next five years.
A significant amount of our leases will expire within the next five years and we may have difficulty re-leasing or selling our properties if tenants do not renew their leases. Approximately 20% of our leases, based on our ABR as of December 31, 2024, are due to expire within the next five years.
These actions may reduce our income and amounts available for distribution to our stockholders. Because the REIT rules require us to satisfy certain rules on an ongoing basis, our flexibility or ability to pursue otherwise attractive opportunities may be limited.
As a result, we may be required to liquidate otherwise attractive investments. These actions may reduce our income and amounts available for distribution to our stockholders. Because the REIT rules require us to satisfy certain rules on an ongoing basis, our flexibility or ability to pursue otherwise attractive opportunities may be limited.
Furthermore, our qualification and taxation as a REIT will depend on our satisfaction of certain asset, income, organizational, distribution, stockholder ownership, and other requirements on a continuing basis.
Carey 2024 10-K – 14 Furthermore, our qualification and taxation as a REIT will depend on our satisfaction of certain asset, income, organizational, distribution, stockholder ownership, and other requirements on a continuing basis.
A refinancing or sale could affect the rate of return to stockholders and the projected disposition timeline of our assets. W. P. Carey 2023 10-K – 13 Risks Related to our Corporate Structure and Maryland Law Certain provisions of our charter and Maryland law could inhibit changes in control.
A refinancing or sale could affect the rate of return to stockholders and the projected disposition timeline of our assets. Risks Related to our Corporate Structure and Maryland Law Certain provisions of our charter and Maryland law could inhibit changes in control.
Our results of our foreign operations are adversely affected by a stronger U.S. dollar relative to foreign currencies (i.e., absent other considerations, a stronger U.S. dollar will reduce both our revenues and our expenses). Inflation and high interest rates may adversely affect our financial condition and results of operations.
Our results of our foreign operations are adversely affected by a stronger U.S. dollar relative to foreign currencies (i.e., absent other considerations, a stronger U.S. dollar will reduce both our revenues and our expenses). Inflation and high interest rates have adversely affected our financial condition and results of operations and may continue to do so in the future.
We cannot predict whether, when, in what forms, or with what effective dates, the tax laws, regulations, and administrative W. P. Carey 2023 10-K – 18 interpretations applicable to us or our stockholders may be changed.
We cannot predict whether, when, in what forms, or with what effective dates, the tax laws, regulations, and administrative interpretations applicable to us or our stockholders may be changed.
For example, high interest rates and equity costs may increase our cost of capital relative to our competitors and place additional pressure on investment spreads if capitalization rates (which generally respond to higher interest rates on a lag) remain constant or decline. Our portfolio is concentrated in industrial, warehouse and retail properties.
For example, high interest rates and equity costs may increase our cost of capital relative to our competitors and place additional pressure on investment spreads if capitalization rates (which generally respond to higher interest rates on a lag) remain constant or decline. Our portfolio is concentrated by tenant industry and geographic location.
Carey 2023 10-K – 17 Even if we continue to qualify as a REIT, certain of our business activities will be subject to corporate level income tax and foreign taxes, which will continue to reduce our cash flows, and we will have potential deferred and contingent tax liabilities.
Even if we continue to qualify as a REIT, certain of our business activities will be subject to other tax liabilities, which will continue to reduce our cash flows, and we will have potential deferred and contingent tax liabilities.
In addition, if we fail to comply with certain asset tests at the end of any calendar quarter, we must generally correct the failure within 30 days after the end of the calendar quarter or qualify for certain statutory relief provisions to avoid losing our REIT qualification. As a result, we may be required to liquidate otherwise attractive investments.
Carey 2024 10-K – 15 In addition, if we fail to comply with certain asset tests at the end of any calendar quarter, we must generally correct the failure within 30 days after the end of the calendar quarter or qualify for certain statutory relief provisions to avoid losing our REIT qualification.
Since net-lease REITs must be able to deploy capital with agility and consistency, if we cannot access the capital markets upon favorable terms or at all, we may be required to liquidate one or more investments, including when an investment has not yet realized its maximum return, which could also result in adverse tax consequences and affect our ability to capitalize on acquisition opportunities and/or meet operational needs.
Since net-lease REITs must be able to deploy capital with agility and consistency, if we cannot access the capital markets upon favorable terms or at all, we may be required to liquidate one or more investments, including when an investment has not yet realized its maximum return, which W. P.
We also face the risk that lease revenue will be insufficient to cover all corporate operating expenses and the debt service payments we incur. Because most of our properties are occupied by a single tenant, our success is materially dependent upon the tenant’s financial stability.
We also face the risk that lease revenue will be insufficient to cover all corporate operating expenses and the debt service payments we incur. Our success is materially dependent on the financial stability of our tenants. The success of our business is dependent on the financial stability of the tenants occupying our properties.
Because we invest in properties located outside the United States, we are exposed to additional risks. We have invested, and may continue to invest, in properties located outside the United States. At December 31, 2023, our real estate properties located outside of the United States represented 42% of our ABR.
We have invested, and may continue to invest, in properties located outside the United States. At December 31, 2024, our real estate properties located outside of the United States represented 39% of our ABR and our real estate properties located in Europe represented 33% of our ABR.
In addition, the deduction for net business interest is generally limited to 30% of the borrower’s adjusted taxable income (excluding non-business income, net operating losses, business interest income, and, for taxable years beginning before January 1, 2022, computed without regard to depreciation and amortization).
In addition, the deduction for net business interest is generally limited to 30% of the borrower’s adjusted taxable income (excluding non-business income, net operating losses and business interest income).
We may be materially adversely affected by laws, regulations or other issues related to climate change as well as by potential physical impacts related to climate change. We are subject to laws and regulations related to climate change.
We may be materially adversely affected by laws, regulations or other issues related to climate change as well as by potential physical impacts related to climate change. We are subject to laws and regulations related to climate change. For example, the State of California has enacted climate change disclosure requirements, including emissions requirements.
In the event an increase in our costs is not sufficiently offset by contractual rent increases or increases in other revenue, we may be required to implement measures to conserve cash or preserve liquidity.
In the event an increase in our expenses is not sufficiently offset by contractual rent increases or increases in other revenue, we may be required to implement measures to conserve cash or preserve liquidity. Certain financial covenants could be affected by higher operating and debt service costs, which may also place restrictions on our liquidity.
Our credit ratings could change based upon, among other things, our historical and projected business, financial condition, liquidity, results of operations, and prospects. These ratings are subject to ongoing evaluation by credit rating agencies and we cannot provide any assurance that our ratings will not be changed or withdrawn by a rating agency in the future.
These ratings are subject to ongoing evaluation by credit rating agencies and we cannot provide any assurance that our ratings will not be changed or withdrawn by a rating agency in the future.
While the vast majority of leases contain rent escalators, including inflation-linked rent escalators, these costs could increase at a rate higher than our rental and other revenue.
Carey 2024 10-K – 8 While the vast majority of our leases contain rent escalators, including inflation-linked rent escalators, expenses due to inflation or elevated interest rates could increase at a rate higher than our rental and other revenue.
When we do pursue a project or acquisition, we may not succeed in leasing newly developed or acquired properties at rents sufficient to cover the costs of acquisition or development and operations. Difficulties in integrating acquisitions may prove costly or time-consuming and could divert management’s attention from other activities.
We may not succeed in consummating desired acquisitions or in completing developments on time or within budget. When we do pursue a project or acquisition, we may not succeed in leasing newly developed or acquired properties at rents sufficient to cover the costs of acquisition or development and operations.
Acquisitions or developments in new markets or industries where we do not have the same level of market knowledge may result in poorer than anticipated performance. We may also abandon acquisition or development opportunities that management has begun pursuing and consequently fail to recover expenses already incurred and will have devoted management’s time to a matter not consummated.
We may also abandon acquisition or development opportunities that management has begun pursuing and consequently fail to recover expenses already incurred and will have devoted management’s time to a matter not consummated.
Because we are subject to possible liabilities relating to environmental matters, we could incur unexpected costs and our ability to sell or otherwise dispose of a property may be negatively impacted.
Changes in laws or regulations, including federal, state, or local laws, relating to climate change could result in increased capital expenditures to improve the energy efficiency of our properties. Because we are subject to possible liabilities relating to environmental matters, we could incur unexpected costs and our ability to sell or otherwise dispose of a property may be negatively impacted.
We cannot predict how future laws and regulations, or future interpretations of current laws and regulations related to climate change will affect our business, financial condition and results of operations. W. P. Carey 2023 10-K – 9 In addition to the laws and regulations surrounding climate change, the potential physical impacts of climate change on our operations are highly uncertain.
We cannot predict how future laws and regulations, or future interpretations of current laws and regulations related to climate change will affect our business, financial condition and results of operations.
We may issue debt or equity securities or incur additional borrowings in the future.
Future issuances of debt and equity securities may negatively affect the market price of our common stock. We may issue debt or equity securities or incur additional borrowings in the future.
Because distributions payable by REITs generally do not qualify for reduced tax rates, the value of our common stock could be adversely affected.
WPC, and some of its subsidiaries, have made such election to be classified as a real property trade or business. Because distributions payable by REITs generally do not qualify for reduced tax rates, the value of our common stock could be adversely affected.
These events have resulted in and may in the future result in property damage and closures and may adversely impact the operations of our tenants. Even if these events do not directly impact our properties, they have impacted and may continue to impact us and our tenants through increases in insurance, energy or other costs.
Even if these events do not directly impact our properties, they have impacted and may continue to impact us and our tenants through increases in insurance, energy or other costs. In addition, the ongoing transition to non-carbon based energy presents certain risks for us and our tenants, including risks related to high energy costs and energy shortages, among other things.
The breach of any of these covenants could result in a default under our indebtedness, which could result in the acceleration of the maturity of such indebtedness and potentially other indebtedness. If any of our indebtedness is accelerated prior to maturity, we may not be able to repay such indebtedness or refinance such indebtedness on favorable terms, or at all.
If any of our indebtedness is accelerated prior to maturity, we may not be able to repay such indebtedness or refinance such indebtedness on favorable terms, or at all. A downgrade in our credit ratings could materially adversely affect our business and financial condition as well as the market price of our Senior Unsecured Notes.
We may acquire or develop properties or acquire other real estate related companies when we believe that an acquisition or development is consistent with our business strategies. We may not succeed in consummating desired acquisitions or in completing developments on time or within budget.
Carey 2024 10-K – 11 We may acquire or develop properties or acquire other real estate related companies, and this may create risks. We may acquire or develop properties or acquire other real estate related companies when we believe that an acquisition or development is consistent with our business strategies.
In September 2023, we announced that we were resetting our dividend policy, targeting an AFFO payout ratio of approximately 70% to 75%. Our ability to continue to pay dividends in the future may be adversely affected by the risk factors described in this Report.
Our ability to continue to pay dividends in the future may be adversely affected by the risk factors described in this Report.
Lease payment defaults by tenants could negatively impact our net income and reduce the amounts available for distribution to stockholders. The bankruptcy or insolvency of tenants may cause a reduction in our revenue and an increase in our expenses. We have had, and may in the future have, tenants file for bankruptcy protection.
A default of a tenant on its lease payments may cause us to lose some of the anticipated revenue from an investment property. The bankruptcy or insolvency of tenants may cause a reduction in our revenue and an increase in our expenses. We have had, and may in the future have, tenants file for bankruptcy protection.
However, increased operating expenses at properties not subject to full triple-net leases could cause us to incur additional operating expenses. Inflation could also impact other costs incurred by the company including general and administrative costs and foreign income taxes.
However, inflationary pressures on property expenses at properties not subject to triple-net leases can and have caused us to incur additional expense. Inflation can and has impacted other expenses incurred by us including general and administrative costs.
Moreover, market turmoil could lead to decreased consumer confidence and widespread reduction of business activity, which may materially and adversely impact us, including our ability to acquire and dispose of properties. Future issuances of debt and equity securities may negatively affect the market price of our common stock.
Carey 2024 10-K – 18 could also result in adverse tax consequences and affect our ability to capitalize on acquisition opportunities and/or meet operational needs. Moreover, market turmoil could lead to decreased consumer confidence and widespread reduction of business activity, which may materially and adversely impact us, including our ability to acquire and dispose of properties.
High interest rates, inflation and a potential economic downturn may severely affect our tenants’ businesses, financial condition and liquidity, leading to an increase in tenant bankruptcy or insolvency. In addition, a portion of our tenants may fail to meet their obligations to us in full (or at all), or may otherwise seek modifications of such obligations.
In addition, a portion of our tenants may fail to meet their obligations to us in full (or at all), or may otherwise seek modifications of such obligations, which would reduce our revenue and increase our expenses. W. P.
A downgrade in our credit ratings could materially adversely affect our business and financial condition as well as the market price of our Senior Unsecured Notes. We plan to manage our operations to maintain investment grade status with a capital structure consistent with our current profile.
We plan to manage our operations to maintain investment grade status with a capital structure consistent with our current profile. There can be no assurance that we will be able to maintain our current credit ratings. Our credit ratings could change based upon, among other things, our historical and projected business, financial condition, liquidity, results of operations, and prospects.
Since 2021, inflation and interest rates have been elevated compared to recent years. Inflation and high interest rates could have an adverse impact on our financial condition. Our leases typically require tenants to pay all property operating expenses and increases in those property-level expenses at our leased properties generally do not affect us.
Periods of inflation and elevated interest rates, particularly when sustained over a longer time horizon, have an adverse impact on our operations and financial condition. Net leases typically require our tenants to pay all property operating costs, including increases from inflation, and thus reduce our direct exposure to inflation in property expenses.
In addition, the European Union Corporate Sustainability Reporting Directive (“CSRD”) became effective in 2023 and requires expansive disclosures on various sustainability topics.
In addition, the European Union Corporate Sustainability Reporting Directive (CSRD) became effective in 2023 and requires expansive disclosures on various sustainability topics. Regulations and other expectations are not uniform, and may be inconsistently interpreted or applied, which can increase the complexity and costs of compliance as well as any associated litigation or enforcement risks. W. P.
These changes may result in physical damage to, or a decrease in demand for, our properties located in the areas affected by these conditions and may adversely impact out tenants’ abilities to fulfill their obligations under their leases.
These events have resulted in and may in the future result in property damage and closures and may adversely impact the operations of our tenants and their ability to fulfill their obligations under their leases.
Removed
For example, following the Spin-Off of 59 of our office assets which closed in November 2023, and the sale of a significant portion of our remaining office portfolio through our Office Sale Program, almost 80% of our ABR as of December 31, 2023 is concentrated in industrial/warehouse and retail assets.
Added
For example, 22% of our ABR as of December 31, 2024 is concentrated by tenant industry in retail stores and 67% of our ABR as of December 31, 2024 is concentrated in properties located in North America. Because we invest in properties located outside the United States, we are exposed to additional risks.
Removed
High interest rates could also increase the cost of our existing variable-rate debt, new debt obligations entered into in the future and potentially impair our ability to arrange third-party financing, including refinancing maturing debt in part or in full as it comes due.
Added
Elevated interest rates have also increased the cost of our variable-rate debt and new debt obligations we have entered into, negatively impacting the results of our operations and limiting our investment opportunities.
Removed
For example, the SEC has proposed climate change rules which are expected to be approved in 2024 and, as proposed, would require us to provide extensive information including greenhouse gas emissions and certain climate-related financial metrics in our audited financial statements. The State of California has also enacted new climate change disclosure requirements, including emissions requirements.
Added
High interest rates, inflation, the imposition of tariffs, heightened vacancy rates, extended loan maturities and an environment of increased loan delinquencies, may severely affect our tenants’ businesses, financial condition and liquidity, leading to an increase in tenant bankruptcy or insolvency.
Removed
These may include extreme weather, changes in rainfall and storm patterns and intensity, increased strength of hurricanes, water shortages, changing sea levels and changing temperatures.
Added
Difficulties in integrating acquisitions may prove costly or time-consuming and could divert management’s attention from other activities. Acquisitions or developments in new markets or industries where we do not have the same level of market knowledge may result in poorer than anticipated performance.
Removed
Chronic climate change may also lead to increased costs for our tenants to adapt to the demands and expectations of climate change or lower carbon usage, including with respect to heating, cooling or electricity costs, retrofitting properties to be more energy efficient or comply with new rules or regulations, or other unforeseen costs.
Added
The breach of any of these covenants could result in a default under our indebtedness, which could result in the W. P. Carey 2024 10-K – 12 acceleration of the maturity of such indebtedness and potentially other indebtedness.
Removed
In addition, the ongoing transition to non-carbon based energy presents certain risks for us and our tenants, including risks related to high energy costs and energy shortages, among other things. Changes in laws or regulations, including federal, state, or local laws, relating to climate change could result in increased capital expenditures to improve the energy efficiency of our properties.
Added
Our Board may also increase or decrease the common stock ownership limit and/or the aggregate stock ownership limit, so long as the change would not result in five or fewer persons beneficially owning more than 49.9% in value of our outstanding stock; W. P.

… 9 more changes not shown on this page.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

15 edited+1 added−2 removed7 unchanged
Biggest changeWe have relationships with a number of third party service providers to assist with cybersecurity containment and remediation efforts, including outside legal counsel, vendors and external insurance brokers. In the event of a cybersecurity incident, we intend to follow the steps outlined in our incident response plan, including notifying our senior management, as appropriate.
Biggest changeIn the event of a cybersecurity incident, the incident response team is responsible for following the steps outlined in our incident response plan, including notifying our senior management, as appropriate.
We have also engaged our managed security provider to manage a supply chain defense subscription that will help obtain clear visibility into cybersecurity risks across third party vendors by proactively identifying, prioritizing, and driving remediation for cyber risks posed by critical business partners.
We have also engaged our managed security provider to manage a supply chain defense subscription that will help obtain visibility into cybersecurity risks across third party vendors by proactively identifying, prioritizing, and driving remediation for cyber risks posed by critical business partners.
Our cybersecurity approach incorporates a layered portfolio of comprehensive employee training programs, multiple resources to manage and monitor the evolving threat landscape, effective Board oversight of cybersecurity risks and knowledgeable teams responsible for preventing and detecting cybersecurity risks.
Our cybersecurity approach incorporates a layered portfolio of employee training programs, multiple resources to manage and monitor the evolving threat landscape, Board oversight of cybersecurity risks and knowledgeable teams responsible for preventing and detecting cybersecurity risks.
Following the conclusion of an incident, we, with the assistance of the incident response team, will generally reassess the effectiveness of the cybersecurity program and incident response plan, make adjustments as appropriate and report to our senior management and our Audit Committee on these matters.
Following the conclusion of an incident, we, with the assistance of the incident response team, will generally reassess the effectiveness of the cybersecurity program and incident response plan, identify potential adjustments as appropriate and report to our senior management and our Audit Committee on these matters.
Carey 2023 10-K – 21 Detection and Analysis Cybersecurity incidents may be detected through a variety of means, including but not limited to automated event-detection notifications or similar technologies which are monitored by our managed cybersecurity provider, notifications from employees, vendors or service providers, and notifications from third party information technology system providers.
Detection and Analysis Cybersecurity incidents may be detected through a variety of means, including but not limited to automated event-detection notifications or similar technologies which are monitored by our managed cybersecurity provider, notifications from employees, vendors or service providers, and notifications from third party information technology system providers.
Our managed security provider’s risk operations center will escalate certain alerts regarding third-party vendors directly to the appropriate business partners thus providing direct collaboration with third parties, saving time and improving risk reduction while safeguarding our relationships with such third parties. W. P.
Our managed security provider’s risk operations center will escalate certain alerts regarding third-party vendors directly to the IT Department thus providing direct collaboration with third parties, saving time and improving risk reduction while safeguarding our relationships with such third parties.
Board oversight of risk is also performed as needed between meetings through the Audit Committee and communications between management and the Board. The Board receives periodic education around cybersecurity risks and best practices. Additionally, the Audit Committee, which consists solely of independent directors, is responsible for overseeing cybersecurity risks and related initiatives.
Board oversight of risk is also performed between meetings through the Audit Committee and communications between management and the Board. The Board receives periodic education around cybersecurity risks and best practices. W. P. Carey 2024 10-K – 20 Additionally, the Audit Committee, which consists solely of independent directors, is responsible for overseeing cybersecurity risks and related initiatives.
Once a potential cybersecurity incident is identified, including a third party cybersecurity event, the incident response team designated pursuant to our incident response plan follows the procedures set forth in the plan to investigate the potential incident, such as determining the nature of the event (e.g., ransomware or personal data breach) and assessing the severity of the event and sensitivity of any compromised data.
Once a potential cybersecurity incident is identified, including a third party cybersecurity event, the incident response team designated pursuant to our incident response plan follows the procedures set forth in the plan to investigate the potential incident, such as determining the nature of the event and assessing the severity of the event.
Our information technology team also recently worked with various third-party consultants to update our incident response plan. In addition, our information technology team conducts routine security assessments as well as ongoing cybersecurity training campaigns for employees to enhance awareness and increase vigilance for the various types of cybersecurity attacks to which they may be exposed.
In addition, our information technology team conducts routine security assessments as well as ongoing cybersecurity training campaigns for employees and our Board to enhance awareness and increase vigilance for the various types of cybersecurity attacks to which they may be exposed.
The Audit Committee reviews our enterprise risk and cybersecurity risks. It also reviews the steps management has taken to protect against threats to our information systems and security and receives updates on cybersecurity on a quarterly basis. Our information technology team is led by our Chief Information Officer who has extensive experience working with information security systems.
The Audit Committee reviews our enterprise risk and cybersecurity risks. It also reviews the steps management has taken to protect against threats to our information systems and security and receives updates on cybersecurity on a quarterly basis.
Item 1C. Cybersecurity. We believe we maintain an information technology and cybersecurity program appropriate for a company our size, taking into account our operations and risks. W. P. Carey 2023 10-K – 20 Management and Board Oversight We are committed to cybersecurity and vigilantly protecting all our resources and information from unauthorized access.
Item 1C. Cybersecurity. We maintain an information technology and cybersecurity program. Management and Board Oversight We are committed to cybersecurity and vigilantly protecting all our resources and information from unauthorized access.
Our information technology and internal audit teams utilize frameworks based on industry standards to identify and mitigate information security risks and oversee an active cybersecurity training program. For example, in January 2023, our information technology team held a tabletop exercise with senior management to consider different cybersecurity scenarios.
Our information technology and internal audit teams utilize frameworks consistent with well-recognized industry cybersecurity frameworks to identify and mitigate information security risks and oversee an active cybersecurity training program.
Containment, Eradication, Recovery, and Reporting In the event of a cybersecurity incident, the incident response team is initially focused on containing the cybersecurity incident as quickly and efficiently as possible, consistent with the procedures in the incident response plan.
Containment, Eradication, Recovery, and Reporting In the event of a cybersecurity incident, the incident response team is responsible for containing the cybersecurity incident, consistent with the procedures in the incident response plan. W. P. Carey 2024 10-K – 21 Once a cybersecurity incident is contained, the focus shifts to remediation.
Eradication and recovery activities depend on the nature of the cybersecurity incident. They may include returning affected systems to an operationally ready state, confirming that the affected systems are functioning normally and implementing, as necessary, additional monitoring to look for future related activity.
Eradication and recovery activities depend on the nature of the cybersecurity incident. They may include returning affected systems to an operationally ready state and confirming that the affected systems are functioning normally. We have relationships with a number of third party service providers to assist with cybersecurity containment and remediation efforts, including outside legal counsel, vendors and external insurance brokers.
Cybersecurity Risks As of December 31, 2023, we are not aware of any material cybersecurity incidents that impacted the Company in the last three years. However, we routinely face risks of potential incidents, whether through cyber-attacks or cyber intrusions over the Internet, ransomware and other forms of malware, computer viruses, attachments to emails, phishing attempts, extortion or other scams.
Cybersecurity Risks As of December 31, 2024, we are not aware of any instances of material cybersecurity incidents that impacted the Company in the last three years. However, there can be no assurance that our cybersecurity efforts and measures will be effective or that attempted cybersecurity incidents or disruptions would not be successful or damaging. See Item 1A.
Removed
Containment procedures may include shutting down systems; disconnecting systems from a network, disabling specific ports, protocols, services, functions, etc., disabling access to compromised systems; examining code in a controlled environment and making forensic backups of affected systems for possible legal action for third party forensic analysis. Once a cybersecurity incident is contained, the focus shifts to remediation.
Added
Our information technology team is led by our Chief Information Officer who reports to our Chief Financial Officer and has extensive experience working with information security systems.
Removed
For a discussion of these risks, see Item 1A.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed0 unchanged
Biggest changeItem 3. Legal Proceedings. Various claims and lawsuits arising in the normal course of business are pending against us. The results of these proceedings are not expected to have a material adverse effect on our consolidated financial position or results of operations. W. P. Carey 2023 10-K – 22
Biggest changeItem 3. Legal Proceedings. Various claims and lawsuits arising in the normal course of business are pending against us. The results of these proceedings are not expected to have a material adverse effect on our consolidated financial position or results of operations.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

4 edited+1 added−2 removed0 unchanged
Biggest changeDividends We currently intend to continue paying cash dividends consistent with our historical practice; however, our Board determines the amount and timing of any future dividend payments to our stockholders based on a variety of factors.
Biggest changeDividends We currently intend to continue paying cash dividends consistent with our historical practice; however, our Board determines the amount and timing of any future dividend payments to our stockholders based on a variety of factors. Refer to Note 14 for information on the tax treatment of our dividends.
The graph does not reflect any adjustments for the Spin-Off of NLOP that was completed on November 1, 2023 and accomplished via a pro rata dividend of one NLOP common share for every 15 shares of WPC common stock outstanding ( Note 3 ). At December 31, 2018 2019 2020 2021 2022 2023 W. P.
The graph does not reflect any adjustments for the Spin-Off of NLOP that was completed on November 1, 2023 and accomplished via a pro rata dividend of one NLOP common share for every 15 shares of WPC common stock outstanding ( Note 3 ). At December 31, 2019 2020 2021 2022 2023 2024 W. P.
Stock Price Performance Graph The graph below provides an indicator of cumulative total stockholder returns for our common stock for the period December 31, 2018 to December 31, 2023, as compared with the S&P 500 Index and the MSCI US REIT Index. The graph assumes a $100 investment on December 31, 2018, together with the reinvestment of all dividends.
Stock Price Performance Graph The graph below provides an indicator of cumulative total stockholder returns for our common stock for the period December 31, 2019 to December 31, 2024, as compared with the S&P 500 Index and the MSCI US REIT Index. The graph assumes a $100 investment on December 31, 2019, together with the reinvestment of all dividends.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock is listed on the NYSE under the ticker symbol “WPC.” At February 2, 2024 there were 8,163 registered holders of record of our common stock. This figure does not reflect the beneficial ownership of shares of our common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock is listed on the NYSE under the ticker symbol “WPC.” At February 7, 2025 there were 7,508 registered holders of record of our common stock. This figure does not reflect the beneficial ownership of shares of our common stock.
Removed
Carey Inc. $ 100.00 $ 128.84 $ 121.13 $ 148.85 $ 149.55 $ 134.86 S&P 500 Index 100.00 131.49 155.68 200.37 164.08 207.21 MSCI US REIT Index 100.00 125.84 116.31 166.39 125.61 142.87 The stock price performance included in this graph is not indicative of future stock price performance.
Added
Carey Inc. $ 100.00 $ 94.01 $ 115.52 $ 116.07 $ 104.67 $ 93.59 S&P 500 Index 100.00 118.40 152.39 124.79 157.59 197.02 MSCI US REIT Index 100.00 92.43 132.23 99.82 113.54 123.47 The stock price performance included in this graph is not indicative of future stock price performance.
Removed
Our dividend for the fourth quarter of 2023 of $0.860 per share reflects both our strategic exit from the office assets within our portfolio (announced on September 21, 2023) ( Note 1 ) and a lower payout ratio.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

3 edited+0 added−1 removed0 unchanged
Biggest changeThe following discussion should be read in conjunction with our consolidated financial statements in Item 8 of this Report and the matters described under Item 1A. Risk Factors .
Biggest changeThis item also provides our perspective on our financial position and liquidity, as well as certain other factors that may affect our future results. The following discussion should be read in conjunction with our consolidated financial statements in Item 8 of this Report and the matters described under Item 1A. Risk Factors .
Please see our Annual Report on Form 10-K for the year ended December 31, 2022 for discussion of our financial condition and results of operations for the year ended December 31, 2021. Refer to
Please see our Annual Report on Form 10-K for the year ended December 31, 2023 for discussion of our financial condition and results of operations for the year ended December 31, 2022. Refer to
Item 6. Reserved W. P. Carey 2023 10-K – 24 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to assist in understanding our financial statements and the reasons for changes in certain key components of our financial statements from period to period.
Item 6. Reserved W. P. Carey 2024 10-K – 23 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to assist in understanding our financial statements and the reasons for changes in certain key components of our financial statements from period to period.
Removed
This item also provides our perspective on our financial position and liquidity, as well as certain other factors that may affect our future results. The discussion also breaks down the financial results of our business by segment to provide a better understanding of how these segments and their results affect our financial condition and results of operations.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

8 edited+1 added−1 removed6 unchanged
Biggest changeOur Code of Business Conduct and Ethics, which applies to all employees, including our chief executive officer and chief financial officer, is also available on our website. We intend to make available on our website any future amendments or waivers to our Code of Business Conduct and Ethics within four business days after any such amendments or waivers.
Biggest changeOur Code of Business Conduct and Ethics, which applies to all directors, officers, and employees, including our chief executive officer and chief financial officer, is also available on our website.
Carey 2023 10-K – 6 Available Information We will supply to any stockholder, upon written request and without charge, a copy of this Report as filed with the SEC. Our filings can also be obtained for free on the SEC’s website at http://www.sec.gov.
Carey 2024 10-K – 6 Available Information We will supply to any stockholder, upon written request and without charge, a copy of this Report as filed with the SEC. Our filings can also be obtained for free on the SEC’s website at http://www.sec.gov.
Diversity We believe that our success is dependent upon the diverse backgrounds and perspectives of our employees and directors. W. P.
Inclusive Culture We believe that our success is dependent upon the diverse backgrounds and perspectives of our employees and directors. W. P.
Tenant/Lease Information At December 31, 2023, our tenants/leases had the following characteristics: • Number of tenants — 336; • Investment grade tenants as a percentage of total ABR — 18%; • Implied investment grade tenants as a percentage of total ABR — 6%; • Weighted-average lease term — 11.7 years; • 99.6% of our leases as a percentage of total ABR provide rent adjustments as follows: ◦ CPI and similar — 56.2% ◦ Fixed — 40.7% ◦ Other — 2.7% Human Capital Investing in Our Employees At December 31, 2023, we had 197 employees, 144 of which were located in the United States and 53 of which were located in Europe.
Tenant/Lease Information At December 31, 2024, our tenants/leases had the following characteristics: • Number of tenants — 355; • Investment grade tenants as a percentage of total ABR — 16%; • Implied investment grade tenants as a percentage of total ABR — 8%; • Weighted-average lease term — 12.3 years; • 99.6% of our leases as a percentage of total ABR provide rent adjustments as follows: ◦ CPI and similar — 50.7% ◦ Fixed — 45.7% ◦ Other — 3.2% Human Capital Investing in Our Employees At December 31, 2024, we had 203 employees, 146 of which were located in the United States and 57 of which were located in Europe.
We strive to make W. P. Carey a great place to work by attracting a diverse pool of the best and brightest applicants and making them feel supported as they grow with the company.
We seek to hire and retain a highly qualified workforce in compliance with applicable federal and other laws and regulations. We strive to make W. P. Carey a great place to work by attracting a diverse pool of the best and brightest applicants and making them feel supported as they grow with the company.
We are providing our website address solely for the information of investors and do not intend for it to be an active link. We do not intend to incorporate the information contained on our website into this Report or other documents filed with or furnished to the SEC.
We do not intend to incorporate the information contained on our website into this Report or other documents filed with or furnished to the SEC.
We offer various levels of training, including “Respect in the Workplace,” skills training, Diversity, Equity & Inclusion, and executive coaching, as well as additional training including safety and cybersecurity. By engaging with our employees and investing in their careers through training and development, we have built a talented workforce capable of executing our business strategies.
We offer various types of training, including trainings focused on maintaining a supportive corporate culture, safety and cybersecurity trainings, executive coaching to facilitate leadership development and trainings focused on job skills and development. By engaging with our employees and investing in their careers through training and development, we have built a talented workforce capable of executing our business strategies.
We are also signatory to the CEO Action Pledge for Diversity & Inclusion, which reflects our commitment to fostering a more diverse and inclusive workforce. Employee Wellness and Benefits The health and wellness of our employees and their families are paramount and our comprehensive benefits package is designed to address the evolving needs of our diverse workforce and their dependents.
We actively work to foster an inclusive corporate culture that respects differences in race, sexual orientation and gender identity, national origin, creeds, and other differences. Employee Wellness and Benefits The health and wellness of our employees and their families are paramount and our comprehensive benefits package is designed to address the evolving needs of our diverse workforce and their dependents.
Removed
Our diversity, equity and inclusion initiative is designed to facilitate conversations around race, sexual orientation and gender identity, national origin, creeds, and other important topics. These conversations, led by our Diversity, Equity & Inclusion Advisory Committee, provide a forum for us to translate our positions as a company into action in both our internal and external communities.
Added
We intend to make available on our website any future amendments or waivers to our Code of Business Conduct and Ethics within four business days after any such amendments or waivers. We are providing our website address solely for the information of investors and do not intend for it to be an active link.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

9 edited+1 added−0 removed14 unchanged
Biggest change(b) Amounts include non-recourse mortgages and unsecured term loans subject to variable-to-fixed interest rate swaps. Amounts are primarily comprised of principal payments for our Senior Unsecured Notes ( Note 12 ). The estimated fair value of our fixed-rate debt and our variable-rate debt is affected by changes in interest rates.
Biggest change(b) Amounts include non-recourse mortgages and unsecured term loans subject to variable-to-fixed interest rate swaps. Amounts are primarily comprised of principal payments for our Senior Unsecured Notes ( Note 12 ). In February 2025, we repaid our $450 million of 4.0% Senior Notes due 2025 at maturity ( Not e 19 ).
We have obtained, and may in the future obtain, non-recourse mortgage financing in the local currency. We have also completed several offerings of euro-denominated senior notes, and have borrowed under our Senior Unsecured Credit Facility in foreign currencies, including the euro, British pound sterling, and Japanese yen ( Note 12 ).
We have obtained, and may in the future obtain, non-recourse mortgage financing in the local currency. We have also completed several offerings of euro-denominated senior notes, and have borrowed under our Senior Unsecured Credit Facility and Unsecured Term Loan due 2026 in foreign currencies, including the euro, British pound sterling, and Japanese yen ( Note 12 ).
Carey 2023 10-K – 50 Foreign Currency Exchange Rate Risk We own international investments, primarily in Europe, Canada, and Japan, and as a result are subject to risk from the effects of exchange rate movements in various foreign currencies, primarily the euro, the British pound sterling, the Canadian dollar, the Japanese yen, and certain other currencies which may affect future costs and cash flows.
Carey 2024 10-K – 46 Foreign Currency Exchange Rate Risk We own international investments, primarily in Europe, Canada, and Japan, and as a result are subject to risk from the effects of exchange rate movements in various foreign currencies, primarily the euro, the British pound sterling, the Danish krone, the Canadian dollar, the Japanese yen, and certain other currencies which may affect future costs and cash flows.
Annual interest expense on our unhedged variable-rate debt that does not bear interest at fixed rates at December 31, 2023 would increase or decrease by $6.9 million for our euro-denominated debt, by $3.4 million for our British pound sterling-denominated debt, and by $0.2 million for our Japanese yen-denominated debt for each respective 1% change in annual interest rates. W. P.
Annual interest expense on our unhedged variable-rate debt that does not bear interest at fixed rates at December 31, 2024 would increase or decrease by $3.8 million for our British pound sterling-denominated debt, $2.2 million for our euro-denominated debt, and by $0.2 million for our Japanese yen-denominated debt for each respective 1% change in annual interest rates. W. P.
While we believe our portfolio is well-diversified, it does contain concentrations in certain areas. For the year ended December 31, 2023, our consolidated portfolio had the following significant characteristics in excess of 10%, based on the percentage of our consolidated total revenues: • 66% related to domestic operations; and • 34% related to international operations.
While we believe our portfolio is well-diversified, it does contain concentrations in certain areas. For the year ended December 31, 2024, our consolidated portfolio had the following significant characteristics in excess of 10%, based on the percentage of our consolidated total revenues: • 64% related to domestic operations; and • 36% related to international operations.
We estimate that, for a 1% increase or decrease in the exchange rate between the euro, British pound sterling, or Japanese yen and the U.S. dollar, there would be a corresponding change in the projected estimated cash flow (scheduled future rental revenues, net of scheduled future debt service payments for the next 12 months) for our consolidated foreign operations at December 31, 2023 of $2.6 million, $0.3 million, and less than $0.1 million, respectively, excluding the impact of our derivative instruments.
We estimate that, for a 1% increase or decrease in the exchange rate between the euro, British pound sterling, or Danish krone and the U.S. dollar, there would be a corresponding change in the projected estimated cash flow (scheduled future rental revenues, net of scheduled future debt service payments for the next 12 months) for our consolidated foreign operations at December 31, 2024 of $1.8 million, $0.3 million, and $0.2 million, respectively, excluding the impact of our derivative instruments.
At December 31, 2023, our net-lease portfolio, which excludes our operating properties, had the following significant property and lease characteristics in excess of 10% in certain areas, based on the percentage of our ABR as of that date: • 58% related to domestic properties; • 42% related to international properties; • 32% related to industrial facilities, 26% related to warehouse facilities, and 21% related to retail facilities; and • 23% related to the retail stores industry (including automotive dealerships).
At December 31, 2024, our net-lease portfolio, which excludes our operating properties, had the following significant property and lease characteristics in excess of 10% in certain areas, based on the percentage of our ABR as of that date: • 61% related to domestic properties; • 39% related to international properties; • 36% related to industrial facilities, 27% related to warehouse facilities, and 22% related to retail facilities; and • 22% related to the retail stores industry (including automotive dealerships).
The primary market risks that we are exposed to are interest rate risk and foreign currency exchange risk; however, we do not use derivative instruments to hedge credit/market risks or for speculative purposes. From time to time, we may enter into foreign currency collars to hedge our foreign currency cash flow exposures.
The primary market risks that we are exposed to are interest rate risk and foreign currency exchange risk; however, we do not use derivative instruments to hedge credit/market risks or for speculative purposes.
The following table presents principal cash flows based upon expected maturity dates of our debt obligations outstanding at December 31, 2023 (in thousands): 2024 2025 2026 2027 2028 Thereafter Total Fair Value Fixed-rate debt (a) (b) $ 1,213,465 $ 707,259 $ 1,547,876 $ 553,168 $ 553,207 $ 2,572,559 $ 7,147,534 $ 6,654,802 Variable-rate debt (a) $ 65,284 $ — $ — $ — $ 580,881 $ 403,786 $ 1,049,951 $ 1,045,523 __________ (a) Amounts are based on the exchange rate at December 31, 2023, as applicable.
The following table presents principal cash flows based upon expected maturity dates of our debt obligations outstanding at December 31, 2024 (in thousands): 2025 2026 2027 2028 2029 Thereafter Total Fair Value Fixed-rate debt (a) (b) $ 669,459 $ 1,479,745 $ 529,329 $ 591,068 $ 492,535 $ 3,730,015 $ 7,492,151 $ 7,119,253 Variable-rate debt (a) $ — $ — $ — $ 561,653 $ 55,448 $ — $ 617,101 $ 645,418 __________ (a) Amounts are based on the exchange rate at December 31, 2024, as applicable.
Added
The estimated fair value of our fixed-rate debt and our variable-rate debt is affected by changes in interest rates.

Other WPC 10-K year-over-year comparisons