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What changed in W. P. Carey Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of W. P. Carey Inc.'s 2022 and 2023 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 2023 report.

+296 added−299 removedSource: 10-K (2024-02-09) vs 10-K (2023-02-10)

Top changes in W. P. Carey Inc.'s 2023 10-K

296 paragraphs added · 299 removed · 210 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

115 edited+50 added−31 removed20 unchanged
Biggest changeThe following table presents other gains and (losses) within our Real Estate segment (in thousands): Years Ended December 31, 2022 2021 Change Other Gains and (Losses) Non-cash unrealized gains related to an increase in the fair value of our investment in common shares of WLT ( Note 9 ) $ 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 9 ) 38,582 76,312 (37,730) Net realized and unrealized losses on foreign currency exchange rate movements (a) (26,866) (15,608) (11,258) Non-cash unrealized gains related to an increase in the fair value of our investment in preferred shares of WLT ( Note 9 ) 18,688 — 18,688 Change in allowance for credit losses on finance receivables ( Note 6 ) 14,363 (266) 14,629 Gain on repayment of secured loan receivable (b) 10,613 — 10,613 Adjustment to insurance receivable acquired as part of a prior merger (c) (9,358) — (9,358) Gain (loss) on extinguishment of debt (d) 1,301 (75,339) 76,640 Other 593 1,225 (632) $ 97,149 $ (13,676) $ 110,825 __________ (a) We make certain foreign currency-denominated intercompany loans to a number of our foreign subsidiaries, most of which do not have the U.S. dollar as their functional currency.
Biggest changeCarey 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.
Portfolio Overview Our portfolio is comprised of operationally-critical, commercial real estate assets net leased to tenants located primarily in the United States and Northern and Western Europe. We invest in high-quality single tenant industrial, warehouse, office, retail, and self-storage (net lease) properties subject to long-term leases with built-in rent escalators.
Portfolio Overview Our portfolio is comprised of operationally-critical, commercial real estate assets net leased to tenants located primarily in the United States and Northern and Western Europe. We invest in high-quality single tenant industrial, warehouse, retail, and self-storage (net lease) properties subject to long-term leases with built-in rent escalators.
(b) Other properties within South include assets in Louisiana, Arkansas, Oklahoma, and Mississippi. Other properties within Midwest include assets in Iowa, Missouri, Kansas, 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 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.
We also modify the NAREIT computation of FFO to adjust GAAP net income for certain non-cash charges, such as amortization of real estate-related intangibles, deferred income tax benefits and expenses, straight-line rent and related reserves, other non-cash rent adjustments, non-cash allowance for credit losses on loans receivable and direct financing leases, stock-based compensation, non-cash environmental accretion expense, amortization of discounts and premiums on debt, and amortization of deferred financing costs.
We also modify the NAREIT computation of FFO to adjust GAAP net income for certain non-cash charges, such as amortization of real estate-related intangibles, deferred income tax benefits and expenses, straight-line rent and related reserves, other non-cash rent adjustments, non-cash allowance for credit losses on loans receivable and finance leases, stock-based compensation, non-cash environmental accretion expense, amortization of discounts and premiums on debt, and amortization of deferred financing costs.
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, 2022. 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, 2023. W. P.
Our assessment of our operations is focused on long-term sustainability and not on such non-cash items, which may cause short-term fluctuations in net income but have no impact on cash flows. Additionally, we exclude non-core income and expenses, such as gains or losses from extinguishment of debt, and merger and acquisition expenses.
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.
ABR — ABR represents contractual minimum annualized base rent for our net-leased properties and reflects exchange rates as of December 31, 2022. 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, 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.
We do not use our FFO and AFFO measures as, nor should they be considered to be, alternatives to net income computed under GAAP, or as alternatives to net cash provided by operating activities computed under GAAP, or as indicators of our ability to fund our cash needs.
We do not use our FFO and AFFO measures as, nor should they be considered to be, alternatives to net income computed under GAAP, or as alternatives to net cash provided by operating activities computed under GAAP, or as indicators of our ability to fund our cash needs. W. P.
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 3 ). Despite these fluctuations, we believe that we will generate sufficient cash from operations to meet our normal recurring short-term and long-term liquidity needs.
We 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.
“Existing operating properties” are those that we acquired or placed into service prior to January 1, 2021 and that were not sold or held for sale during the periods presented.
“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.
Our cash flows fluctuate periodically due to a number of factors, which may include, among other things: the timing of our equity and debt offerings; the timing of purchases and sales of real estate; the timing of the repayment of mortgage loans and receipt of lease revenues; the timing and amount of other lease-related payments; the timing of settlement of foreign currency transactions; changes in foreign currency exchange rates; and the timing of distributions from equity method investments.
Our cash flows fluctuate periodically due to a number of factors, which may include, among other things: the timing of our equity and debt offerings; the timing of purchases and sales of real estate; the timing of the repayment of mortgage loans, our Senior Unsecured Notes, and our Unsecured Term Loans; the timing of our receipt of lease revenues; the timing and amount of other lease-related payments; the timing of settlement of foreign currency transactions; changes in foreign currency exchange rates; and the timing of distributions from equity method investments.
Therefore, we recorded a $10.6 million gain on repayment of this secured loan receivable. (c) This insurance receivable was acquired in the CPA:17 Merger.
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.
The White Paper defines FFO as net income or loss computed in accordance with GAAP, excluding gains or losses from sales of property, impairment charges on real estate or other assets incidental to the company’s main business, gains or losses on changes in control of interests in real estate, and depreciation and amortization from real estate assets; and after adjustments for unconsolidated partnerships and jointly owned investments.
The White Paper defines FFO as net income or loss computed in accordance with GAAP, excluding gains or losses from the sale of certain real estate, impairment charges on real estate or other assets incidental to the company’s main business, gains or losses on changes in control of interests in real estate, and depreciation and amortization from real estate assets; and after adjustments for unconsolidated partnerships and jointly owned investments.
(b) 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 6 ).
(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 ).
Carey 2022 10-K – 41 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.
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.
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%.
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%.
Carey 2022 10-K – 31 Results of Operations We operate in two reportable segments: Real Estate and Investment Management. We evaluate our results of operations with a primary focus on increasing and enhancing the value, quality, and number of properties in our Real Estate segment.
Carey 2023 10-K – 33 Results of Operations We operate in two reportable segments: Real Estate and Investment Management. We evaluate our results of operations with a primary focus on increasing and enhancing the value, quality, and number of properties in our Real Estate segment.
Net Income Attributable to W. P. Carey Net income attributable to W. P. Carey increased in 2022 as compared to 2021. Net income from Real Estate attributable to W. P.
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.
(Provision for) Benefit from Income Taxes For the year ended December 31, 2022 we recorded a provision for income taxes of $6.3 million, compared to a benefit from income taxes of $0.2 million recognized during the year ended December 31, 2021, within our Investment Management segment.
Benefit from (Provision for) Income Taxes For the year ended December 31, 2023 we recorded a benefit from income taxes of $0.4 million, compared to a provision for income taxes of $6.3 million recognized during the year ended December 31, 2022, within our Investment Management segment.
(b) Amount for the year ended December 31, 2022 represents a gain recognized on our previously held interest in shares of CPA:18 – Global common stock in connection with the CPA:18 Merger ( Note 3 ).
(d) Amount for the year ended December 31, 2022 represents a gain recognized on our previously held interest in shares of CPA:18 – Global common stock in connection with the CPA:18 Merger ( Note 4 ).
(d) Amount for the year ended December 31, 2022 includes our $4.6 million proportionate share of an impairment charge recognized on an equity method investment in real estate ( Note 8 ).
(f) Amount for the year ended December 31, 2022 includes our $4.6 million proportionate share of an impairment charge recognized on an equity method investment in real estate ( Note 9 ).
Of this amount, $96.6 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 $1.5 billion (net of amounts reserved for standby letters of credit totaling $0.6 million); • available proceeds under our ATM Forwards of approximately $530.0 million; and • unleveraged properties that had an aggregate asset carrying value of approximately $13.1 billion at December 31, 2022, although there can be no assurance that we would be able to obtain financing for these properties.
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.
We may also access the capital markets through additional debt (denominated in both U.S. dollars and euros) and equity offerings. Our cash resources can be used for working capital needs and other commitments and may be used for future investments.
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.
We also exclude realized and unrealized gains/losses on foreign currency exchange rate movements (other than those realized on the settlement of foreign currency derivatives), which are not considered fundamental attributes of our business plan W. P. Carey 2022 10-K – 42 and do not affect our overall long-term operating performance. We refer to our modified definition of FFO as AFFO.
We also exclude realized and unrealized gains/losses on foreign currency exchange rate movements (other than those realized on the settlement of foreign currency derivatives), which are not considered fundamental attributes of our business plan and do not affect our overall long-term operating performance. We refer to our modified definition of FFO as AFFO.
Carey 2022 10-K – 43 FFO and AFFO from Real Estate were as follows (in thousands): Years Ended December 31, 2022 2021 Net income from Real Estate attributable to W. P.
Carey 2023 10-K – 47 FFO and AFFO from Real Estate were as follows (in thousands): Years Ended December 31, 2023 2022 Net income from Real Estate attributable to W. P.
Carey 2022 10-K – 44 FFO and AFFO from Investment Management were as follows (in thousands): Years Ended December 31, 2022 2021 Net income from Investment Management attributable to W. P.
Carey 2023 10-K – 48 FFO and AFFO from Investment Management were as follows (in thousands): Years Ended December 31, 2023 2022 Net income from Investment Management attributable to W. P.
We may also choose to prepay certain of our non-recourse mortgage loan obligations, depending on our capital needs and market conditions at that time. Our liquidity could be adversely affected by unanticipated costs, greater-than-anticipated operating expenses, and the ongoing impact of the COVID-19 pandemic.
We may also choose to prepay certain of our non-recourse mortgage loan obligations, depending on our capital needs and market conditions at that time. Our liquidity could be adversely affected by unanticipated costs and greater-than-anticipated operating expenses.
We expect to fund these cash requirements through cash generated from operations, cash received from dispositions of properties, the use of our cash reserves or unused amounts on our Unsecured Revolving Credit Facility (as described above), issuances of common stock through our ATM Program ( Note 13 ), and potential issuances of additional debt or equity securities.
We expect to fund these cash requirements through cash generated from operations, cash received from dispositions of properties, the use of our cash reserves or unused amounts on our Unsecured Revolving Credit Facility (as described above), proceeds from term loans or other bank debt, issuances of common stock through our ATM Program ( Note 14 ), and potential issuances of additional debt or equity securities.
In addition, we recognized a gain on change in control of interests during the current year in connection with the CPA:18 Merger ( Note 3 ). W. P.
In addition, we recognized a gain on change in control of interests during the prior year in connection with the CPA:18 Merger ( Note 4 ). 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 2022 10-K – 45
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
Our dispositions are more fully described in Note 16 . W. P.
Our dispositions are more fully described in Note 17 . W. P.
(c) Amount for the year ended December 31, 2022 represents an impairment charge recognized on goodwill within our Investment Management segment, since future Investment Management cash flows are expected to be minimal ( Note 7 , Note 9 ).
(e) Amount for the year ended December 31, 2022 represents an impairment charge recognized on goodwill within our Investment Management segment, since future Investment Management cash flows are expected to be minimal ( Note 8 , Note 10 ).
Carey (AFFO) 1,060,598 921,491 Diluted weighted-average shares outstanding 200,427,124 183,127,098 __________ (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.
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.
(b) Includes ABR from tenants in the following industries: media: broadcasting and subscription, aerospace and defense, wholesale, media: advertising, printing, and publishing, oil and gas, utilities: electric, environmental industries, consumer transportation, forest products and paper, electricity, and real estate. Also includes square footage for vacant properties. W. P.
(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.
Carey $ 7,536 $ 25,222 Adjustments: Impairment charges — Investment Management goodwill (c) 29,334 — Gain on change in control of interests (a) (b) (22,526) — Total adjustments 6,808 — FFO (as defined by NAREIT) attributable to W. P.
Carey $ 3,497 $ 7,536 Adjustments: Impairment charges — Investment Management goodwill (e) — 29,334 Gain on change in control of interests (d) — (22,526) Total adjustments — 6,808 FFO (as defined by NAREIT) attributable to W. P.
Consolidated FFO and AFFO were as follows (in thousands): Years Ended December 31, 2022 2021 Net income attributable to W. P.
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.
Adjustments for unconsolidated partnerships and jointly owned investments are calculated to reflect FFO.
Adjustments for unconsolidated partnerships and jointly owned investments are calculated to reflect FFO on the same basis.
Carey — Investment Management 14,344 25,222 Adjustments: Tax expense (benefit) — deferred and other 4,405 (1,029) Other (gains) and losses (g) 1,111 (791) Merger and other expenses 3 51 Proportionate share of adjustments to earnings from equity method investments (e) (2,047) 1,899 Total adjustments 3,472 130 AFFO attributable to W. P.
Carey — Investment Management 3,497 14,344 Adjustments: Other (gains) and losses (i) (243) 1,111 Tax expense — deferred and other — 4,405 Merger and other expenses — 3 Proportionate share of adjustments to earnings from equity method investments (g) — (2,047) Total adjustments (243) 3,472 AFFO attributable to W. P.
Carey — Investment Management $ 17,816 $ 25,352 __________ (a) 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 3 ).
(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 ).
Cash Requirements and Liquidity As of December 31, 2022, we had (i) $168.0 million of cash and cash equivalents, (ii) approximately $1.5 billion of available capacity under our Unsecured Revolving Credit Facility (net of amounts reserved for standby letters of credit totaling $0.6 million), and (iii) available proceeds under our ATM Forwards of approximately $530.0 million.
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).
Carey — Investment Management $ 17,816 $ 25,352 Summary FFO (as defined by NAREIT) attributable to W. P. Carey — Investment Management $ 14,344 $ 25,222 AFFO attributable to W. P.
Carey — Investment Management $ 3,254 $ 17,816 Summary FFO (as defined by NAREIT) attributable to W. P. Carey — Investment Management $ 3,497 $ 14,344 AFFO attributable to W. P.
Impairment Charges Our impairment charges are described in Note 9 . Stock-based Compensation Expense For a description of our equity plans and awards, please see Note 14 . Stock-based compensation expense is fully recognized within our Real Estate segment.
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.
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.
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.
Carey 2022 10-K – 33 Income from Direct Financing Leases and Loans Receivable For the year ended December 31, 2022 as compared to 2021, income from direct financing leases and loans receivable decreased due to the following items (in millions): Operating Property Revenues and Expenses “Operating properties acquired in the CPA:18 Merger” on August 1, 2022 ( Note 3 ) consisted of 65 self-storage properties and two student housing properties, which contributed five months of operating property revenues, depreciation and amortization, and operating property expenses during the year ended December 31, 2022.
Carey 2023 10-K – 35 Income from Finance Leases and Loans Receivable For the year ended December 31, 2023 as compared to 2022, income from finance leases and loans receivable increased due to the following items (in millions): Operating Property Revenues and Expenses “Operating properties acquired in the CPA:18 Merger” consisted of 65 self-storage properties and two student housing properties, which contributed operating property revenues, depreciation and amortization, and operating property expenses since August 1, 2022, the date of the CPA:18 Merger December 31, 2023 ( Note 4 ).
Revenues Real Estate revenue increased in 2022 as compared to 2021, primarily due to higher lease revenues (substantially as a result of property acquisition activity and rent escalations, as well as the net-leased properties we acquired in the CPA:18 Merger on August 1, 2022 ( Note 3 ), partially offset by the impact of the weakening euro and British pound sterling) and higher operating property revenues (primarily from the operating properties we acquired in the CPA:18 Merger on August 1, 2022 ( Note 3 )), partially offset by lower other lease-related income ( Note 5 ).
Revenues Real Estate revenue increased in 2023 as compared to 2022, primarily due to higher lease revenues (substantially as a result of property acquisition activity and rent escalations, as well as the net-leased properties we acquired in the CPA:18 Merger on August 1, 2022 ( Note 4 )) and higher operating property revenues (primarily from the operating properties we acquired in the CPA:18 Merger on August 1, 2022 and the 12 hotel properties that converted from net-lease to operating properties during the first quarter of 2023), partially offset by the impact of the Spin-Off ( Note 3 ) and lower other lease-related income ( Note 6 ).
We also received $7.1 million in distributions from equity method investments. Financing Activities — Our financing activities are generally comprised of borrowings and repayments under our Unsecured Revolving Credit Facility and Unsecured Term Loans, issuances of the Senior Unsecured Notes, payments and prepayments of non-recourse mortgage loans, 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 and prepayments of non-recourse mortgage loans, issuances of common equity, and payments of dividends to stockholders.
Carey (AFFO) — Real Estate 1,042,782 896,139 Adjusted funds from operations attributable to W. P. Carey (AFFO) — Investment Management 17,816 25,352 Adjusted funds from operations attributable to W. P.
Carey (AFFO) — Real Estate 1,115,013 1,042,782 Adjusted funds from operations attributable to W. P. Carey (AFFO) — Investment Management 3,254 17,816 Adjusted funds from operations attributable to W. P.
P. Carey — Real Estate $ 1,042,782 $ 896,139 Summary FFO (as defined by NAREIT) attributable to W. P. Carey — Real Estate $ 1,091,269 $ 871,338 AFFO attributable to W. P. Carey — Real Estate $ 1,042,782 $ 896,139 W. P.
P. Carey — Real Estate $ 1,115,013 $ 1,042,782 Summary FFO (as defined by NAREIT) attributable to W. P. Carey — Real Estate $ 1,057,729 $ 1,091,269 AFFO attributable to W. P. Carey — Real Estate $ 1,115,013 $ 1,042,782 W. P.
Carey $ 599,139 $ 409,988 Adjustments: Depreciation and amortization of real property 500,764 470,554 Gain on sale of real estate, net (43,476) (40,425) Impairment charges — real estate 39,119 24,246 Gain on change in control of interests (a) (b) (33,931) — Impairment charges — Investment Management goodwill (c) 29,334 — Proportionate share of adjustments to earnings from equity method investments (d) (e) 15,155 32,213 Proportionate share of adjustments for noncontrolling interests (f) (491) (16) Total adjustments 506,474 486,572 FFO (as defined by NAREIT) attributable to W.
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 2022 10-K – 38 Other Income and Expenses, and (Provision for) Benefit from Income Taxes Earnings from Equity Method Investments in the Managed Programs The following table presents the details of our earnings from equity method investments in the Managed Programs ( Note 8 ) (in thousands): Years Ended December 31, 2022 2021 Earnings from equity method investments in the Managed Programs: Distributions of Available Cash from CPA:18 – Global (a) $ 8,746 $ 7,345 Earnings from equity method investments in the Managed Programs (a) (b) 4,542 1,475 Earnings from equity method investments in the Managed Programs $ 13,288 $ 8,820 __________ (a) As a result of the completion of the CPA:18 Merger on August 1, 2022 ( Note 3 ), we no longer recognize equity income from our investment in shares of common stock of CPA:18 – Global or receive distributions of Available Cash from CPA:18 – Global.
Earnings from Equity Method Investments in the Managed Programs The following table presents the details of our earnings from equity method investments in the Managed Programs ( Note 9 ) (in thousands): Years Ended December 31, 2023 2022 Earnings from equity method investments in the Managed Programs: Distributions of Available Cash from CPA:18 – Global (a) $ — $ 8,746 Earnings from equity method investments in the Managed Programs (a) — 4,542 Earnings from equity method investments in the Managed Programs $ — $ 13,288 __________ (a) As a result of the completion of the CPA:18 Merger on August 1, 2022 ( Note 4 ), we no longer recognize equity income from our investment in shares of common stock of CPA:18 – Global or receive distributions of Available Cash (as defined in CPA:18 – Global’s partnership agreement) from CPA:18 – Global.
P. Carey $ 1,060,598 $ 921,491 Summary FFO (as defined by NAREIT) attributable to W. P. Carey $ 1,105,613 $ 896,560 AFFO attributable to W. P. Carey $ 1,060,598 $ 921,491 W. P.
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.
During the next 12 months following December 31, 2022 and thereafter, we expect that our significant cash requirements will include: • paying dividends to our stockholders; (which we expect to be higher, following the issuance of 13,786,302 shares of our common stock in the CPA:18 Merger ( Note 3 )); • funding acquisitions of new investments ( Note 5 ); • funding future capital commitments and tenant improvement allowances ( Note 5 ); • making scheduled principal and balloon payments on our debt obligations ( Note 11 ); • making scheduled interest payments on our debt obligations (future interest payments total $927.7 million, with $231.6 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, 2022); and • other normal recurring operating expenses.
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.
For the year ended December 31, 2022 as compared to 2021, stock-based compensation expense increased by $8.0 million, primarily due to changes in the projected payout for performance share units.
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.
FFO is not equivalent to, nor a substitute for, net income or loss as determined under GAAP. We define FFO, a non-GAAP measure, consistent with the standards established by the White Paper on FFO approved by the Board of Governors of NAREIT, as restated in December 2018.
We define FFO, a non-GAAP measure, consistent with the standards established by the White Paper on FFO approved by the Board of Governors of NAREIT, as restated in December 2018.
(g) 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 direct financing leases.
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.
Carey — Real Estate 1,091,269 871,338 Adjustments: Other (gains) and losses (g) (97,149) 13,676 Straight-line and other leasing and financing adjustments (h) (54,431) (83,267) Above- and below-market rent intangible lease amortization, net 41,390 53,585 Stock-based compensation 32,841 24,881 Merger and other expenses (i) 19,384 (4,597) Amortization of deferred financing costs 17,203 13,523 Tax benefit — deferred and other (8,164) (4,938) Other amortization and non-cash items 1,931 1,709 Proportionate share of adjustments to earnings from equity method investments (e) (723) 10,253 Proportionate share of adjustments for noncontrolling interests (f) (769) (24) Total adjustments (48,487) 24,801 AFFO attributable to W.
Carey — Real Estate 1,057,729 1,091,269 Adjustments: Straight-line and other leasing and financing adjustments (71,869) (54,431) Other (gains) and losses (i) 36,427 (97,149) 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 19,384 Other amortization and non-cash items 1,735 1,931 Tax benefit — deferred and other (199) (8,164) Proportionate share of adjustments to earnings from equity method investments (g) (2,535) (723) Proportionate share of adjustments for noncontrolling interests (h) (441) (769) Total adjustments 57,284 (48,487) AFFO attributable to W.
Investment Management We earn revenue as the advisor to the Managed Programs. For the periods presented, we acted as advisor to the following Managed Programs: CPA:18 – Global (through August 1, 2022), CWI 1 and CWI 2 (through April 13, 2020), and CESH.
W. P. Carey 2023 10-K – 40 Investment Management We earn revenue as the advisor to the Managed Programs and NLOP. For the periods presented, we acted as advisor to the following Managed Programs: CPA:18 – Global (through August 1, 2022) and CESH.
Top Ten Tenants by ABR (dollars in thousands) Tenant/Lease Guarantor Description Number of Properties ABR ABR Percent Weighted-Average Lease Term (Years) U-Haul Moving Partners Inc. and Mercury Partners, LP Net lease self-storage properties in the U.S. 78 $ 38,751 2.8 % 1.3 State of Andalucía (a) Government office properties in Spain 70 29,271 2.1 % 12.0 Metro Cash & Carry Italia S.p.A.
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.
Operating Activities — Net cash provided by operating activities increased by $77.1 million during 2022 as compared to 2021, primarily due to an increase in cash flow generated from net investment activity (including properties acquired in the CPA:18 Merger ( Note 3 )) and scheduled rent increases at existing properties.
Carey 2023 10-K – 42 Operating Activities — Net cash provided by operating activities increased by $69.9 million during 2023 as compared to 2022, primarily due to an increase in cash flow generated from net investment activity (including properties acquired in the CPA:18 Merger ( Note 4 )) and scheduled rent increases at existing properties, partially offset by higher interest expense and the impact of the Spin-Off ( Note 3 ).
Carey $ 591,603 $ 384,766 Adjustments: Depreciation and amortization of real property 500,764 470,554 Gain on sale of real estate, net (43,476) (40,425) Impairment charges — real estate 39,119 24,246 Gain on change in control of interests (a) (b) (11,405) — Proportionate share of adjustments to earnings from equity method investments (d) (e) 15,155 32,213 Proportionate share of adjustments for noncontrolling interests (f) (491) (16) Total adjustments 499,666 486,572 FFO (as defined by NAREIT) attributable to W.
Carey $ 704,837 $ 591,603 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) — (11,405) 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 352,892 499,666 FFO (as defined by NAREIT) attributable to W.
For our hotel operating property, revenues and expenses increased by $4.9 million and $2.8 million, respectively, for the year ended December 31, 2022 as compared to 2021, reflecting higher occupancy as the hotel’s business recovers from the ongoing COVID-19 pandemic. Other Lease-Related Income Other lease-related income is described in Note 5 .
For our hotel operating property, revenues and expenses increased by $2.3 million and $1.5 million, respectively, for the year ended December 31, 2023 as compared to 2022, reflecting higher occupancy. Other Lease-Related Income Other lease-related income is described in Note 6 . W. P.
Carey 1,105,613 896,560 Adjustments: Other (gains) and losses (g) (96,038) 12,885 Straight-line and other leasing and financing adjustments (h) (54,431) (83,267) Above- and below-market rent intangible lease amortization, net 41,390 53,585 Stock-based compensation 32,841 24,881 Merger and other expenses (i) 19,387 (4,546) Amortization of deferred financing costs 17,203 13,523 Tax benefit — deferred and other (3,759) (5,967) Other amortization and non-cash items 1,931 1,709 Proportionate share of adjustments to earnings from equity method investments (e) (2,770) 12,152 Proportionate share of adjustments for noncontrolling interests (f) (769) (24) Total adjustments (45,015) 24,931 AFFO attributable to W.
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.
Operating Expenses Depreciation and Amortization For the year ended December 31, 2022 as compared to 2021, 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 3 )), partially offset by the weakening of foreign currencies (primarily the euro and British pound sterling) in relation to the U.S. dollar between the periods.
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 ).
(“NAREIT”), an industry trade group, has promulgated a non-GAAP measure known as FFO, which we believe to be an appropriate supplemental measure, when used in addition to and in conjunction with results presented in accordance with GAAP, to reflect the operating performance of a REIT. The use of FFO is recommended by the REIT industry as a supplemental non-GAAP measure.
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 2022 10-K – 24 Consolidated Results (in thousands, except shares) Years Ended December 31, 2022 2021 Revenues from Real Estate $ 1,468,101 $ 1,312,126 Revenues from Investment Management 10,985 19,398 Total revenues 1,479,086 1,331,524 Net income from Real Estate attributable to W. P. Carey 591,603 384,766 Net income from Investment Management attributable to W. P.
Carey 2023 10-K – 26 Consolidated Results (in thousands, except shares) Years Ended December 31, 2023 2022 Revenues from Real Estate $ 1,738,139 $ 1,468,101 Revenues from Investment Management 3,219 10,985 Total revenues 1,741,358 1,479,086 Net income from Real Estate attributable to W. P. Carey 704,837 591,603 Net income from Investment Management attributable to W. P.
Carey 7,536 25,222 Net income attributable to W. P. Carey 599,139 409,988 Dividends declared 859,655 781,626 Net cash provided by operating activities 1,003,556 926,479 Net cash used in investing activities (1,052,531) (1,566,727) Net cash provided by financing activities 57,887 557,048 Supplemental financial measures (a) : Adjusted funds from operations attributable to W. P.
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.
The following table presents non-operating income within our Real Estate segment (in thousands): Years Ended December 31, 2022 2021 Change Non-Operating Income Realized gains on foreign currency collars ( Note 10 ) $ 24,058 $ 2,357 $ 21,701 Cash dividend from our investment in Lineage Logistics ( Note 9 ) 4,308 6,438 (2,130) Interest income related to our loans to affiliates and cash deposits 1,011 90 921 Cash dividends from our investment in preferred shares of WLT ( Note 9 ) 912 4,893 (3,981) $ 30,289 $ 13,778 $ 16,511 Earnings (Losses) from Equity Method Investments in Real Estate Our equity method investments in real estate are more fully described in Note 8 .
The following table presents non-operating income within our Real Estate segment (in thousands): Years Ended December 31, 2023 2022 Change Non-Operating Income Realized gains on foreign currency collars ( Note 11 ) $ 14,485 $ 24,058 $ (9,573) Interest income related to our loans to affiliates and cash deposits 6,944 1,011 5,933 Cash dividends from our investment in Lineage Logistics ( Note 10 ) — 4,308 (4,308) Cash dividends from our investment in preferred shares of WLT ( Note 10 ) — 912 (912) $ 21,429 $ 30,289 $ (8,860) W.
“Recently acquired net-leased properties” are those that we acquired or placed into service subsequent to December 31, 2020 and that were not sold or held for sale during the periods presented. Since January 1, 2021, we acquired 48 investments (comprised of 192 properties and six land parcels under buildings that we already own) and placed three properties into service.
(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.
Amounts for the years ended December 31, 2022 and 2021 include $89.5 million and $103.7 million, respectively, of funding for a construction loan ( Note 8 ). W. P. Carey 2022 10-K – 26 Net-Leased Portfolio The tables below represent information about our net-leased portfolio at December 31, 2022 on a pro rata basis and, accordingly, exclude all operating properties.
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.
We may also use existing cash resources, available capacity under our Senior Unsecured Credit Facility, proceeds from dispositions of properties, and the issuance of additional debt or equity securities, such as issuances of common stock through our ATM Forwards ( Note 13 ), in order to meet these needs. We assess our ability to access capital on an ongoing basis.
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.
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, 2022 2021 Carrying Value Fixed rate: Senior Unsecured Notes (a) $ 5,916,400 $ 5,701,913 Non-recourse mortgages (a) 824,270 235,898 6,740,670 5,937,811 Variable rate: Unsecured Term Loans (a) 552,539 310,583 Unsecured Revolving Credit Facility 276,392 410,596 Non-recourse mortgages (a) : Floating interest rate mortgage loans 213,958 53,571 Amount subject to interest rate swaps and caps 94,189 79,055 1,137,078 853,805 $ 7,877,748 $ 6,791,616 Percent of Total Debt Fixed rate 86 % 87 % Variable rate 14 % 13 % 100 % 100 % Weighted-Average Interest Rate at End of Year Fixed rate 2.9 % 2.7 % Variable rate (b) 3.6 % 1.1 % Total debt 3.0 % 2.5 % ____________ (a) Aggregate debt balance includes unamortized discount, net, totaling $35.9 million and $30.9 million as of December 31, 2022 and 2021, respectively, and unamortized deferred financing costs totaling $26.0 million and $28.8 million as of December 31, 2022 and 2021, respectively.
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.
Asset management revenues from CESH are expected to decline as assets are sold. Operating Expenses Impairment Charges — Investment Management Goodwill Our impairment charges on Investment Management goodwill are more fully described in Note 9 . W. P.
Operating Expenses Impairment Charges — Investment Management Goodwill Our impairment charges on Investment Management goodwill are more fully described in Note 10 . W. P.
Other Income and (Expenses), and (Provision for) Benefit from Income Taxes Interest Expense For the year ended December 31, 2022 as compared to 2021, interest expense increased by $22.3 million, primarily due to (i) $20.1 million of interest expense incurred from August through December 2022 related to non-recourse mortgage loans assumed in the CPA:18 Merger ( Note 3 ), (ii) higher outstanding balances and interest rates on our Senior Unsecured Credit Facility, and (iii) five senior unsecured notes issuances totaling $1.7 billion (based on the exchange rate of the euro on the dates of issuance for our euro-denominated senior unsecured notes) with a weighted-average interest rate of 2.1% completed since January 1, 2021, partially offset by (i) the weakening of foreign currencies (primarily the euro and British pound sterling) in relation to the U.S. dollar between the periods and (ii) the reduction of our mortgage debt outstanding by prepaying or repaying at or close to maturity a total of $892.9 million of non-recourse mortgage loans with a weighted-average interest rate of 4.8% since January 1, 2021.
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 ).
For the year ended December 31, 2022 as compared to 2021, 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. (b) Primarily related to (i) straight-line rent adjustments and (ii) write-offs of above/below-market rent intangibles.
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 2022 10-K – 23 Investments • We acquired 23 investments totaling $1.2 billion ( Note 5 , Note 6 ). • We completed six construction projects at a cost totaling $148.1 million ( Note 5 ). • We funded approximately $89.5 million for a construction loan to build a retail complex in Las Vegas, Nevada, during the year ended December 31, 2022.
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.
In addition, we recognized non-cash unrealized gains on our investment in shares of Lineage Logistics during both the current and prior year ( Note 9 ). Net income from Investment Management attributable to W. P. Carey decreased primarily due to an impairment charge recognized on goodwill within our Investment Management segment ( Note 9 ).
Net income from Investment Management attributable to W. P. Carey decreased primarily due to the cessation of fees and distributions previously earned from CPA:18 – Global prior to the CPA:18 Merger. We also recognized an impairment charge on goodwill within our Investment Management segment during the prior year ( Note 8 ).
Revenues The following table presents revenues within our Investment Management segment (in thousands): Years Ended December 31, 2022 2021 Change Investment Management Revenues Asset management and other revenue CPA:18 – Global $ 6,956 $ 12,528 $ (5,572) CESH 1,511 2,835 (1,324) 8,467 15,363 (6,896) Reimbursable costs from affiliates CPA:18 – Global 2,040 2,874 (834) CESH 478 878 (400) WLT — 283 (283) 2,518 4,035 (1,517) $ 10,985 $ 19,398 $ (8,413) Asset Management and Other Revenue During the periods presented, we earned asset management revenue from (i) CPA:18 – Global (prior to the CPA:18 Merger) based on the value of its real estate-related assets under management and (ii) CESH based on its gross assets under management at fair value.
Revenues The following table presents revenues within our Investment Management segment (in thousands): Years Ended December 31, 2023 2022 Change Investment Management Revenues Asset management revenue NLOP $ 1,245 $ — $ 1,245 CESH 939 1,511 (572) CPA:18 – Global — 6,956 (6,956) 2,184 8,467 (6,283) Other advisory income and reimbursements NLOP 667 — 667 667 — 667 Reimbursable costs from affiliates CESH 368 478 (110) CPA:18 – Global — 2,040 (2,040) 368 2,518 (2,150) $ 3,219 $ 10,985 $ (7,766) Asset Management Revenue During the periods presented, we earned asset management revenue from (i) NLOP (since the Spin-Off on November 1, 2023 ( Note 3 )) based on an annual fee of $7.5 million, which will be proportionately reduced following the disposition of a portfolio property, (ii) CESH based on its gross assets under management at fair value, and (iii) CPA:18 – Global (prior to the CPA:18 Merger) based on the value of its real estate-related assets under management.
Portfolio Summary As of December 31, Net-leased Properties 2022 2021 ABR (in thousands) $ 1,381,899 $ 1,247,764 Number of net-leased properties (a) 1,449 1,304 Number of tenants 392 352 Total square footage (in thousands) 175,957 155,674 Occupancy 98.8 % 98.5 % Weighted-average lease term (in years) 10.8 10.8 Operating Properties Number of operating properties: (b) 87 20 Number of self-storage operating properties 84 19 Number of student housing operating properties 2 — Number of hotel operating properties 1 1 Occupancy (self-storage operating properties) 91.0 % 95.3 % Number of countries (c) 26 24 Total assets (in thousands) $ 18,102,035 $ 15,480,630 Net investments in real estate (in thousands) 15,488,898 13,037,369 Years Ended December 31, 2022 2021 Acquisition volume (in millions) (d) $ 1,265.5 $ 1,627.9 Construction projects completed (in millions) 148.1 88.2 Average U.S. dollar/euro exchange rate 1.0540 1.1830 Average U.S. dollar/British pound sterling exchange rate 1.2373 1.3755 __________ (a) We acquired 35 net-leased properties (in which we did not already have an ownership interest) in the CPA:18 Merger in August 2022 ( Note 3 ).
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.
Upon completion of the CPA:18 Merger on August 1, 2022 ( Note 3 ), the advisory agreement with CPA:18 – Global was terminated, and we ceased earning revenue from CPA:18 – Global.
Upon completion of the CPA:18 Merger on August 1, 2022 ( Note 4 ), the advisory agreement with CPA:18 – Global was terminated, and we ceased earning revenue from CPA:18 – Global. We have acted as advisor to NLOP since the Spin-Off on November 1, 2023 ( Note 3 ). We no longer raise capital for new or existing funds.
Those accounting policies that require significant estimation and/or judgment are described under Critical Accounting Policies and Estimates in Note 2 . 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.
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.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

71 edited+33 added−50 removed106 unchanged
Biggest changeCertain provisions of the Maryland General Corporation Law (“MGCL”) may have the effect of inhibiting a third party from making a proposal to acquire us or impeding a change of control that could provide our stockholders with the opportunity to realize a premium over the then-prevailing market price of our common stock, including: • “business combination” provisions that, subject to limitations, prohibit certain business combinations between us and an “interested stockholder” (defined generally as any person who beneficially owns 10% or more of the voting power of our outstanding voting stock), or an affiliate thereof, for five years after the most recent date on which the stockholder becomes an interested stockholder, and thereafter imposes special appraisal rights and supermajority voting requirements on these combinations; and • “control share” provisions that provide that holders of “control shares” of our company (defined as 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.
Biggest changeOur 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.
Entry into 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.
In addition, if we fail to comply with certain asset ownership tests at the end of any calendar quarter, we must generally correct the failure within 30 days after the end of the calendar quarter or qualify for certain statutory relief provisions to avoid losing our REIT qualification. As a result, we may be required to liquidate otherwise attractive investments.
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.
As a result, we intend, to the extent that market conditions warrant, to seek to grow our businesses by increasing our investments in existing businesses, pursuing new investment strategies (including investment opportunities in new asset classes), developing new types of investment structures and products, and expanding into new geographic markets and businesses.
As a result, we intend, to the extent that market conditions warrant, to seek to grow our business by increasing our investments in existing businesses, pursuing new investment strategies (including investment opportunities in new asset classes), developing new types of investment structures and products, and expanding into new geographic markets and businesses.
Risks Related to REIT Structure While we believe that we are properly organized as a REIT in accordance with applicable law, we cannot guarantee that the Internal Revenue Service will find that we have qualified as a REIT.
Risks Related to our REIT Structure While we believe that we are properly organized as a REIT in accordance with applicable law, we cannot guarantee that the Internal Revenue Service will find that we have qualified as a REIT.
In addition, environmental liabilities, or costs or operating limitations imposed on a tenant by environmental laws, could affect its ability to make rental payments to us. And although we endeavor to avoid doing so, we may be required, in connection with any future divestitures of property, to provide buyers with indemnifications against potential environmental liabilities.
In addition, environmental liabilities, or costs or operating limitations imposed on a tenant by environmental laws, could affect its ability to make rental payments to us. And although we endeavor to avoid doing so, we may be required, in connection with any future divestitures of property, to provide buyers with indemnifications against potential environmental liabilities. W. P.
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 2022 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. W. P. Carey 2023 10-K – 16 We use TRSs, which may cause us to fail to qualify as a REIT.
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.
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.
In addition, we could be required to pay an excise or penalty tax under certain circumstances in order to utilize one or more relief provisions under the Internal Revenue Code to maintain qualification for taxation as a REIT, which could be significant in amount. W. P.
In addition, we could be required to pay an excise or penalty tax under certain circumstances in order to utilize one or more relief provisions under the Internal Revenue Code to maintain qualification for taxation as a REIT, which could be significant in amount.
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.
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.
Carey 2022 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.
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.
The statute permits various exemptions from its provisions, including business combinations that are exempted by a board of directors prior to the time that the “interested stockholder” becomes an interested stockholder.
The MGCL permits various exemptions from its provisions, including business combinations that are exempted by a board of directors prior to the time that the “interested stockholder” becomes an interested stockholder.
Carey 2022 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. Within the next five years, approximately 26% of our leases, based on our ABR as of December 31, 2022, are due to expire.
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.
Carey 2022 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 growth our portfolio.
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.
At December 31, 2022, we had $1.1 billion 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, 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.
Most of our properties are occupied by a single tenant; therefore, the success of our investments is materially dependent on the financial stability of these tenants. Revenues from several of our tenants/guarantors constitute a significant percentage of our lease revenues. Our top ten tenants accounted for approximately 18% of total ABR at December 31, 2022.
Most of our properties are occupied by a single tenant each; therefore, the success of our investments is materially dependent on the financial stability of these tenants. Revenues from several of our tenants/guarantors constitute a significant percentage of our lease revenues. Our top ten tenants accounted for approximately 21% of total ABR at December 31, 2023.
Carey 2022 10-K – 17 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.
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.
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.
If we are unable to successfully collect the data necessary to comply with ESG disclosure requirements, we may be subject to increased regulatory risk; and if such data is incomplete or unfavorable, our relationship with our investor base, our stock price, and our access to capital may be negatively impacted. The value of our real estate is subject to fluctuation.
If we are unable to successfully collect the data necessary to comply with ESG disclosure requirements, we may be subject to increased regulatory risk; and if such data is incomplete or unfavorable, our relationship with our investor base, our stock price, our ESG ratings and our access to capital may be negatively impacted.
Income that is not distributed to us by our domestic TRSs will generally not be subject to the REIT income distribution requirement. However, certain income that is not distributed to us by our foreign TRSs may be deemed distributed to us by operation of certain provisions of the U.S. Tax Code and generally subject to REIT income distribution requirements.
Income that is not distributed to us by our domestic TRSs will generally not be subject to the REIT income distribution requirement. However, certain income that is not distributed to us by our foreign TRSs may be deemed distributed to us by operation of certain provisions of the Internal Revenue Code and generally subject to REIT income distribution requirements.
The remaining provisions of Title 3, Subtitle 8 of the MGCL may have the effect of inhibiting a third party from making an acquisition proposal for our company or of delaying, deferring, or preventing a change in control of our company under circumstances that otherwise could provide the holders of our common stock with the opportunity to realize a premium over the then-current market price.
If we elect in the future to become subject to any of the remaining provisions of Title 3, Subtitle 8 of the MGCL, such an election may have the effect of inhibiting a third party from making an acquisition proposal for our company or of delaying, deferring, or preventing a change in control of our company under circumstances that otherwise could provide the holders of our common stock with the opportunity to realize a premium over the then-current market price.
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. W. P. Carey 2022 10-K – 18 Future issuances of debt and equity securities may negatively affect the market price of our common stock.
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.
W. P. Carey 2022 10-K – 11 Our ability to generate sufficient cash flow determines whether we will be able to (i) meet our existing or potential future debt service obligations; (ii) refinance our existing or potential future indebtedness; and (iii) fund our operations, working capital, acquisitions, capital expenditures, and other important business uses.
Our ability to generate sufficient cash flow determines whether we will be able to (i) meet our existing or potential future debt service obligations; (ii) refinance our existing or potential future indebtedness; and (iii) fund our operations, working capital, acquisitions, capital expenditures, and other important business uses.
A cyber incident is considered to be any adverse event that threatens the confidentiality, integrity, or availability of our information resources, which could be an intentional attack or an unintentional accident or error. We use information technology and other computer resources to carry out important operational activities and to maintain our business records.
A cyber incident is considered to be any adverse event that threatens the confidentiality, integrity, or availability of our information resources, which could be an intentional attack or an unintentional accident or error. Information technology, communication networks, and other computer resources are essential for us to carry out important operational activities and maintain our business records.
If any of the credit rating agencies downgrades or lowers our credit rating, or if any credit rating agency indicates that it has placed our rating on a “watch list” for a possible downgrading or lowering, or otherwise indicates that its outlook for our rating is negative, it could have a material adverse effect on our costs and availability of capital, which could in turn have a material adverse effect on us and on our ability to satisfy our debt service obligations (including those under our Senior Unsecured Credit Facility, our Senior W.
If any of the credit rating agencies downgrades or lowers our credit rating, or if any credit rating agency indicates that it has placed our rating on a “watch list” for a possible downgrading or lowering, or otherwise indicates that its outlook for our rating is negative, it could have a material adverse effect on our costs and availability of capital, which could in turn have a material adverse effect on us and on our ability to satisfy our debt service obligations (including those under our Senior Unsecured Credit Facility, our Senior Unsecured Notes, or other similar debt securities that we issue) and to pay dividends on our common stock.
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.
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.
Carey 2022 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.
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.
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, 2022 was approximately $7.9 billion, representing a consolidated debt to gross assets ratio of approximately 39.8%.
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%.
Our organizational documents permit our Board to revoke or otherwise terminate our REIT election, without the approval of our stockholders, if it determines that it is no longer in our best interest to continue to qualify as a REIT.
The ability of our Board to revoke our REIT election, without stockholder approval, may cause adverse consequences for our stockholders. Our organizational documents permit our Board to revoke or otherwise terminate our REIT election, without the approval of our stockholders, if it determines that it is no longer in our best interest to continue to qualify as a REIT.
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.
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.
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 the Inflation Reduction Act of 2022 which was signed into law in the United States on August 16, 2022 and will be effective in 2023 (which introduced 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, 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.
We are also subject to potential fluctuations in exchange rates between foreign currencies and the U.S. dollar because we translate revenue denominated in foreign currency into U.S. dollars for our financial statements (our principal exposure is to the euro).
Certain of these risks may be greater in less developed countries. We are also subject to potential fluctuations in exchange rates between foreign currencies and the U.S. dollar because we translate revenue denominated in foreign currency into U.S. dollars for our financial statements (our principal exposure is to the euro).
Even if we qualify for taxation as a REIT, we may be subject to certain (i) federal, state, local, and foreign taxes on our income and assets (including alternative minimum taxes for taxable years ending prior to January 1, 2018); (ii) taxes on any undistributed income and state, local, or foreign income; and (iii) franchise, property, and transfer taxes.
Even if we qualify for taxation as a REIT, we may be subject to certain (i) federal, state, local, and foreign taxes on our income and assets; (ii) taxes on any undistributed income and state, local, or foreign income; and (iii) franchise, property, and transfer taxes.
The primary risks that could directly result from the occurrence of a cyber incident include operational interruption, damage to our relationship with our tenants, and private data exposure.
The primary risks that could directly result from the occurrence of a cyber incident include operational interruption, damage to our relationship with our tenants, expensive remediation efforts, liability exposure under federal and state law, and private data exposure.
This lack of control over our net-leased properties also makes it difficult for us to collect property-level environmental metrics and to enforce sustainability initiatives, which may impact our ability to comply with certain ESG disclosure requirements (such as the SEC’s expected new ESG disclosure rules) or engage effectively with established ESG frameworks and standards, such as the Global Real Estate Sustainability Benchmarks, the Task Force for Climate-Related Financial Disclosures and the Sustainability Accounting Standards Board.
The lack of direct control over our net-leased properties due to the fact that tenants or managers are responsible for maintenance and other day-to-day management of the properties also makes it difficult for us to collect property-level environmental metrics and to enforce sustainability initiatives, which may impact our ability to comply with certain ESG disclosure requirements or engage effectively with established ESG frameworks and standards, such as the Global Real Estate Sustainability Benchmarks, the Task Force for Climate-Related Financial Disclosures and the Sustainability Accounting Standards Board.
Increases in inflation could also impact other costs incurred by the company including general and administrative costs. 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.
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.
Our results of 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). W. P.
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.
Because the REIT provisions of the Internal Revenue Code limit our ability to hedge effectively, the cost of our hedging may increase and we may incur tax liabilities. The REIT provisions of the Internal Revenue Code limit our ability to hedge assets and liabilities that are not incurred to acquire or carry real estate.
The REIT provisions of the Internal Revenue Code limit our ability to hedge assets and liabilities that are not incurred to acquire or carry real estate.
Failure to hedge effectively against such interest rate and foreign exchange rate changes may have a material adverse effect on our business, financial condition and results of operations. Our future success depends on the successful recruitment and retention of personnel, including our executives.
Failure to hedge effectively against such interest rate and foreign exchange rate changes may have a material adverse effect on our business, financial condition and results of operations.
Carey 2022 10-K – 10 valuation and higher investor activism activities. We cannot predict how future laws and regulations, or future interpretations of current laws and regulations related to climate change will affect our business, financial condition and results of operations. Additionally, 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. 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.
This consolidated indebtedness was comprised of (i) $5.9 billion in Senior Unsecured Notes (as defined in Note 11 ), (ii) $828.9 million outstanding under our Senior Unsecured Credit Facility (as defined in Note 11 ), and (iii) $1.1 billion in non-recourse mortgage loans on various properties.
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.
The trading volume and market price of our common stock may fluctuate significantly and be adversely impacted in response to a number of factors.
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.
We intend to declare regular quarterly distributions, the amount of which will be determined, and is subject to adjustment, by our Board.
If we fail to make required distributions, we may be subject to federal corporate income tax. We intend to declare regular quarterly distributions, the amount of which will be determined, and is subject to adjustment, by our Board.
The Internal Revenue Code also imposes a 100% excise tax on certain transactions between a TRS and its parent REIT that are not conducted on an arm’s-length basis.
The Internal Revenue Code also imposes a 100% excise tax on certain transactions between a TRS and its parent REIT that are not conducted on an arm’s-length basis. We will structure our transactions with our TRSs on terms that we believe are arm’s-length to avoid incurring the 100% excise tax described above.
These investments may be affected by factors particular to the local jurisdiction where the property is located and may expose us to additional risks, including: • enactment of laws relating to foreign ownership of property (including expropriation of investments), or laws and regulations relating to our ability to repatriate invested capital, profits, or cash and cash equivalents back to the United States; • legal systems where the ability to enforce contractual rights and remedies may be more limited than under U.S. law; • difficulty in complying with conflicting obligations in various jurisdictions and the burden of observing a variety of evolving foreign laws, regulations, and governmental rules and policies, which may be more stringent than U.S. laws and regulations (including land use, zoning, environmental, financial, and privacy laws and regulations, such as the European Union’s General Data Protection Regulation); • tax requirements vary by country and existing foreign tax laws and interpretations may change (e.g., the on-going implementation of the European Union’s Anti-Tax Avoidance Directives), which may result in additional taxes on our international investments; • 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 (which may impact relative interest rates and the terms or availability of debt financing).
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).
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 Our charter and Maryland law contain provisions that may delay or prevent a change of control transaction.
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.
We are subject to all of the general risks associated with the ownership of real estate, which include: • adverse changes in general or local economic conditions, including changes in interest rates or foreign exchange rates; • changes in the supply of, or demand for, similar or competing properties; • competition for tenants and changes in market rental rates; • the ongoing need for capital improvements; • Federal Reserve short term rate decisions; • the mortgage market and real estate market in the United States; • inability to lease or sell properties upon termination of existing leases, or renewal of leases at lower rental rates; • inability to collect rents from tenants due to financial hardship, including bankruptcy; • changes in tax, real estate, zoning, or environmental laws that adversely impact the value of real estate; W.
We are subject to all of the general risks associated with the ownership of real estate, which include: • adverse changes in general or local economic conditions, including changes in interest rates or foreign exchange rates; • changes in the supply of, or demand for, similar or competing properties; • competition for tenants and changes in market rental rates; • the ongoing need for capital improvements; • Federal Reserve short term rate decisions; • the mortgage market and real estate market in the United States; • inability to lease or sell properties upon termination of existing leases, or renewal of leases at lower rental rates; • inability to collect rents from tenants due to financial hardship, including bankruptcy; • changes in tax, real estate, zoning, or environmental laws that adversely impact the value of real estate; • failure to comply with federal, state, and local legal and regulatory requirements, including the Americans with Disabilities Act and fire or life-safety requirements; • changes in governmental rules and fiscal policies; • uninsured property liability, property damage, or casualty losses; • increased operating costs, which may not necessarily be offset by increased rents, including insurance premiums, utilities and real estate taxes, due to inflation and other factors; • exposure to environmental losses and the effects of climate change; and • civil unrest, acts of war, terrorism, acts of God, including earthquakes, hurricanes and other natural disasters (which may result in uninsured losses) and other factors beyond our control.
P. Carey 2022 10-K – 12 Unsecured Notes, or other similar debt securities that we issue) and to pay dividends on our common stock. Furthermore, any such action could negatively impact the market price of our Senior Unsecured Notes. Some of our properties are encumbered by mortgage debt, which could adversely affect our cash flow.
Furthermore, any such action could negatively impact the market price of our Senior Unsecured Notes. Some of our properties are encumbered by mortgage debt, which could adversely affect our cash flow.
These may include changes in rainfall and storm patterns and intensity, increased strength of hurricanes, water shortages, changing sea levels and changing temperatures. These impacts may have a material adverse effect on our business, financial condition and results of operations.
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.
Although we plan to continue to operate in a manner consistent with the REIT qualification rules, we cannot assure you that we will qualify in a given year or remain so qualified. If we fail to make required distributions, we may be subject to federal corporate income tax.
There are limited judicial or administrative interpretations of these provisions. Although we plan to continue to operate in a manner consistent with the REIT qualification rules, we cannot assure you that we will qualify in a given year or remain so qualified.
We expect to have only a de minimis amount of assets subject to these corporate tax rules and do not expect to dispose of any significant assets subject to these corporate tax rules. Because dividends received by foreign stockholders are generally taxable, we may be required to withhold a portion of our distributions to such persons.
Because dividends received by foreign stockholders are generally taxable, we may be required to withhold a portion of our distributions to such persons.
If we are unable to find alternative credit arrangements or other funding in a high interest environment, our business needs may not be adequately met. Tenants and potential tenants of our properties may also be adversely impacted by inflation and rising interest rates, which could negatively impact our tenants’ ability to pay rent and the demand for our properties.
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.
There can be no assurance, however, that we will be able to comply with the TRS ownership limitation or be able to avoid application of the 100% excise tax. Because distributions payable by REITs generally do not qualify for reduced tax rates, the value of our common stock could be adversely affected.
Because distributions payable by REITs generally do not qualify for reduced tax rates, the value of our common stock could be adversely affected.
Our ability to control the management of our net-leased properties is limited, which limits our ability to manage property deterioration risks and could impact our ESG ratings and our ability to make ESG disclosures. The tenants or managers of net-leased properties are responsible for maintenance and other day-to-day management of the properties.
Our ability to control the management of our net-leased properties is limited, which could impact our ability to make ESG disclosures.
Our ability to continue to pay dividends in the future may be adversely affected by the risk factors described in this Report.
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.
By their nature, the timing or extent of impairment charges are not predictable. 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.
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.
Therefore, our investments may become concentrated in type or geographic location, which could subject us to significant risks with potentially adverse effects on our investment objectives. Inflation and increased interest rates may adversely affect our financial condition and results of operations.
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.
The continued disruption and reduced economic activity caused by COVID-19, rising 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.
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.
Furthermore, acquisition opportunities in domestic and international markets may be adversely affected if we need or require target companies to comply with certain REIT requirements prior to closing on acquisitions. Also, please see the risk “There can be no assurance that we will be able to maintain cash dividends” below.
Furthermore, acquisition opportunities in domestic and international markets may be adversely affected if we need or require target companies to comply with certain REIT requirements prior to closing on acquisitions. Because the REIT provisions of the Internal Revenue Code limit our ability to hedge effectively, the cost of our hedging may increase and we may incur tax liabilities.
Our leases typically require tenants to pay all property operating expenses and increases in those property-level expenses at our leased properties generally do not affect us. However, increased operating expenses at properties not subject to full triple-net leases could cause us to incur additional operating expenses.
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.
Our competitors may accept greater risk or lower returns, allowing them to offer more attractive terms to prospective tenants. Further capital inflows into our sector will place additional pressure on our ability to execute transactions and the returns that we can generate from investments.
Our competitors may accept greater risk, lower returns, or a combination thereof allowing them to offer more attractive terms when pursuing investment opportunities. Access to capital and the cost of that capital could further impact the returns we generate from investments relative to our competitors and impair our ability to invest accretively.
Additional rules with respect to certain capital gain distributions will apply to foreign stockholders that own more than 10% of our common stock. The ability of our Board to revoke our REIT election, without stockholder approval, may cause adverse consequences for our stockholders.
Additional rules with respect to certain capital gain distributions will apply to foreign stockholders that own more than 10% of our common stock. The tax imposed on REITs engaging in “prohibited transactions” may limit our ability to engage in transactions which would be treated as sales for federal income tax purposes.
Such 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. Noncompliance with these laws or regulations may result in potential cost increases, litigation, fines, penalties, brand or reputational damage, loss of tenants, lower W. P.
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 2022 10-K – 7 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 as a result of higher debt service costs, which may place restrictions on our liquidity.
If we are unable to find alternative credit arrangements or other funding in a high interest environment, our business needs may not be adequately met. Certain financial covenants could also be affected as a result of higher operating and debt service costs, which may place restrictions on our liquidity.
In addition, expectations of rising interest rates may increase our cost of capital, while capitalization rates (which generally respond to higher interest rates on a lag) could remain low or continue to decline, thereby placing additional pressure on investment spreads throughout the net lease sector.
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.
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. We are subject to risks related to the anticipated replacement of the London Inter-bank Offered Rate (“LIBOR”).
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.
We have opted out of Section 3-803 of the MGCL, which permits a board of directors to be divided into classes pursuant to Title 3, Subtitle 8 of the MGCL. Any amendment or repeal of this resolution must be approved in the same manner as an amendment to our charter.
Our charter contains a provision opting out of Section 3-803 of the MGCL, which permits a board of directors to be divided into classes pursuant by Board action and without a stockholder-approved charter amendment. This provision can be modified only with a board recommendation and stockholder approval of the charter amendment.
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. W. P. Carey 2022 10-K – 20 Our business may continue to be adversely affected by the ongoing COVID-19 pandemic.
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.
Our inability to pay dividends, or to pay dividends at expected levels, could adversely impact the market price of our common stock. Our accounting policies and methods are fundamental to how we record and report our financial position and results of operations, and they require management to make estimates, judgments, and assumptions about matters that are inherently uncertain.
Our inability to pay dividends, or to pay dividends at expected levels, could adversely impact the market price of our common stock.
In addition, a portion of our tenants may fail to meet their obligations to us in full (or at all), or may otherwise seek modifications of such obligations. Certain jurisdictions may also enact laws or regulations that impact or alter our ability to collect rent under our existing least terms.
Certain jurisdictions may also enact laws or regulations that impact or alter our ability to collect rent under our existing least terms. W. P. Carey 2023 10-K – 11 We may not achieve some or all the expected benefits of the Spin-Off and the Office Sale Program.
The ultimate extent to which COVID-19 will continue to impact the operations of our tenants will depend on future developments, which remain uncertain and cannot be predicted with confidence. We may be materially adversely affected by laws, regulations or other issues 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.
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The net lease financing market is perceived as a relatively conservative investment vehicle and there has been increasing capital inflows into our sector; accordingly, we face escalating competition for investments, both domestically and internationally. We compete for investments with many other financial institutions and investors, including other REITs, private equity firms, pension funds, and finance companies.
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We compete for investments with many other institutions and investors, including other REITs, private equity firms, pension funds, and real estate companies. Operating in a competitive marketplace for investments could have a negative impact on our revenue growth.
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In particular, private equity real estate investors have raised record amounts of capital in recent periods, which is expected to be deployed into acquisitions that are contributing to an increasingly competitive marketplace. This competitive marketplace for investments could also have a negative impact on our revenue growth.
Added
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.
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Finally, the vast majority of our current investments are in single-tenant commercial properties that are subject to triple-net leases. Many factors, including changes in tax laws or accounting rules, may make these types of sale-leaseback transactions less attractive to potential sellers and lessees, which could negatively affect our ability to increase these types of investments.
Added
These investments may be affected by factors particular to the local jurisdiction where the property is located and may expose us to additional risks, including: • enactment of laws relating to foreign ownership of property (including expropriation of investments), or laws and regulations relating to our ability to repatriate invested capital, profits, or cash and cash equivalents back to the United States; • legal systems where the ability to enforce contractual rights and remedies may be more limited than under U.S. law; W.
Removed
We are not required to meet any diversification standards; therefore, our investments may become subject to concentration risks. Subject to our intention to maintain our qualification as a REIT, we are not required to meet any diversification standards.
Added
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.
Removed
Increases in inflation and interest rates could have an adverse impact on the cost of our existing variable-rate debt, new debt obligations entered into in the future, and costs incurred by the company through its operations.

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Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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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.
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

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeStock Price Performance Graph The graph below provides an indicator of cumulative total stockholder returns for our common stock for the period December 31, 2017 to December 31, 2022, as compared with the S&P 500 Index, the FTSE NAREIT Equity REITs Index, and the MSCI US REIT Index, which we have added to the graph below since it serves as a benchmark index for our compensation decisions.
Biggest changeStock 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.
Dividends We currently intend to continue paying cash dividends consistent with our historical practice; however, our Board determines the amount and timing of any future dividend payments to our stockholders based on a variety of factors. W. P.
Dividends We currently intend to continue paying cash dividends consistent with our historical practice; however, our Board determines the amount and timing of any future dividend payments to our stockholders based on a variety of factors.
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 3, 2023 there were 8,982 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 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.
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We intend to discontinue presentation of the FTSE NAREIT Equity REITs Index in future stock price performance graphs, as the MSCI US REIT Index will serve as our industry index. The graph assumes a $100 investment on December 31, 2017, together with the reinvestment of all dividends. At December 31, 2017 2018 2019 2020 2021 2022 W. P.
Added
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.
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Carey Inc. $ 100.00 $ 101.08 $ 130.23 $ 122.44 $ 150.45 $ 151.16 S&P 500 Index 100.00 95.62 125.72 148.85 191.58 156.88 FTSE NAREIT Equity REITs Index 100.00 95.38 120.17 110.56 158.36 119.77 MSCI US REIT Index 100.00 95.43 120.09 110.99 158.79 119.87 The stock price performance included in this graph is not indicative of future stock price performance.
Added
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.
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Carey 2022 10-K – 22 Securities Authorized for Issuance Under Equity Compensation Plans This information will be contained in our definitive proxy statement for the 2023 Annual Meeting of Stockholders, to be filed within 120 days following the end of our fiscal year, and is incorporated herein by reference. Item 6. Reserved Item 7.
Added
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.
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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.
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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.
Removed
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 .
Removed
Please see our Annual Report on Form 10-K for the year ended December 31, 2021 for discussion of our financial condition and results of operations for the year ended December 31, 2020. Refer to

Item 7. Management's Discussion & Analysis

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

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Biggest changeCarey 2022 10-K – 5 Tenant/Lease Information At December 31, 2022, our tenants/leases had the following characteristics: • Number of tenants — 392; • Investment grade tenants as a percentage of total ABR — 24%; • Implied investment grade tenants as a percentage of total ABR — 7%; • Weighted-average lease term — 10.8 years; • 99.0% of our leases as a percentage of total ABR provide rent adjustments as follows: ◦ CPI and similar — 55.5% ◦ Fixed — 40.0% ◦ Other — 3.5% Human Capital Investing in Our Employees At December 31, 2022, we had 193 employees, 141 of which were located in the United States and 52 of which were located in Europe.
Biggest changeTenant/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.
All filings we make with the SEC, including this Report, our quarterly reports on Form 10-Q, and our current reports on Form 8-K, as well as any amendments to those reports, are available for free on the Investor Relations portion of our website (http://www.wpcarey.com), as soon as reasonably practicable after they are filed with or furnished to the SEC. W.
All filings we make with the SEC, including this Report, our quarterly reports on Form 10-Q, and our current reports on Form 8-K, as well as any amendments to those reports, are available for free on the Investor Relations portion of our website (http://www.wpcarey.com), as soon as reasonably practicable after they are filed with or furnished to the SEC.
Additional information regarding our human capital programs and initiatives is available in our annual Proxy Statement and Environmental, Social, and Governance (“ESG”) Report, which can be found on our company website. Information on our website, including our ESG Report, is not incorporated by reference into this Report.
Additional information regarding our human capital programs and initiatives is available in our annual Proxy Statement and Environmental, Social, and Governance (“ESG”) Report, which can be found on our company website. Information on our website, including our ESG Report, is not incorporated by reference into this Report. W. P.
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 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.
P. Carey 2022 10-K – 6 Our quarterly earnings conference call and investor presentations are accessible by the public. We generally announce via press release the dates and conference call details for upcoming scheduled quarterly earnings announcements and webcast investor presentations, which are also available in the Investor Relations section of our website approximately ten days prior to the event.
Our quarterly earnings conference call and investor presentations are accessible by the public. We generally announce via press release the dates and conference call details for upcoming scheduled quarterly earnings announcements and webcast investor presentations, which are also available in the Investor Relations section of our website approximately ten days prior to the event.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Portfolio Overview . W. P.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Portfolio Overview .

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe estimated fair value of our fixed-rate debt and our variable-rate debt that currently bears interest at fixed rates or has effectively been converted to a fixed rate through the use of interest rate swaps, or that has been subject to interest rate caps, is affected by changes in interest rates.
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.
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 11 ).
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 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, 2022 of $2.7 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 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.
Carey 2022 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 Canadian dollar, the Japanese yen, and certain other currencies which may affect future costs and cash flows.
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.
We enter into foreign currency collars to hedge certain of our foreign currency cash flow exposures. See Note 10 for additional information on our foreign currency collars.
We enter into foreign currency collars to hedge certain of our foreign currency cash flow exposures. See Note 11 for additional information on our foreign currency collars.
We are also exposed to further market risk as a result of tenant concentrations in certain industries and/or geographic regions, since adverse market factors (such as the COVID-19 pandemic) can affect the ability of tenants in a particular industry/region to meet their respective lease obligations.
We are also exposed to further market risk as a result of tenant concentrations in certain industries and/or geographic regions, since adverse market factors can affect the ability of tenants in a particular industry/region to meet their respective lease obligations.
The value of our real estate is also subject to fluctuations based on local and regional economic conditions (including the ongoing impact of the COVID-19 pandemic) and changes in the creditworthiness of lessees, which may affect our ability to refinance property-level mortgage debt when balloon payments are scheduled, if we do not choose to repay the debt when due.
The value of our real estate is also subject to fluctuations based on local and regional economic conditions and changes in the creditworthiness of lessees, which may affect our ability to refinance property-level mortgage debt when balloon payments are scheduled, if we do not choose to repay the debt when due.
While we believe our portfolio is well-diversified, it does contain concentrations in certain areas. For the year ended December 31, 2022, our consolidated portfolio had the following significant characteristics in excess of 10%, based on the percentage of our consolidated total revenues: • 67% related to domestic operations; and • 33% 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, 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.
We have entered into, and may continue to enter into, interest rate swap agreements or interest rate cap agreements with counterparties related to certain of our variable-rate non-recourse mortgage loans. See Note 10 for additional information on our interest rate swaps and caps.
We have entered into, and may continue to enter into, interest rate swap agreements or interest rate cap agreements with counterparties related to certain of our variable-rate debt. See Note 11 for additional information on our interest rate swaps and caps.
Annual interest expense on our unhedged variable-rate debt that does not bear interest at fixed rates at December 31, 2022 would increase or decrease by $5.9 million for our euro-denominated debt, by $3.7 million for our British pound sterling-denominated debt, by $0.3 million for U.S. dollar-denominated debt, and by $0.2 million for our Japanese yen-denominated debt for each respective 1% change in annual interest rates.
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.
At December 31, 2022, our net-lease portfolio, which excludes our operating properties, had the following significant property and lease characteristics in excess of 10% in certain areas, based on the percentage of our ABR as of that date: • 63% related to domestic properties; • 37% related to international properties; • 27% related to industrial facilities, 24% related to warehouse facilities, 17% related to office facilities, and 17% related to retail facilities; and • 21% related to the retail stores industry (including automotive dealerships).
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).
Volatile market conditions arising from the ongoing effects of the COVID-19 global pandemic, as well as other macroeconomic factors, may result in significant fluctuations in foreign currency exchange rates.
Volatile market conditions arising from certain macroeconomic factors may result in significant fluctuations in foreign currency exchange rates.
The following table presents principal cash flows based upon expected maturity dates of our debt obligations outstanding at December 31, 2022 (in thousands): 2023 2024 2025 2026 2027 Thereafter Total Fair Value Fixed-rate debt (a) (b) $ 239,146 $ 1,195,330 $ 791,654 $ 972,135 $ 533,760 $ 3,070,039 $ 6,802,064 $ 6,041,968 Variable-rate debt (a) $ 217,562 $ 36,138 $ 872,622 $ 11,290 $ — $ — $ 1,137,612 $ 1,135,000 __________ (a) Amounts are based on the exchange rate at December 31, 2022, as applicable.
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.
At December 31, 2022, a significant portion (approximately 86.8%) of our long-term debt either bore interest at fixed rates or was swapped or capped to a fixed rate. Our debt obligations are more fully described in Note 11 and Liquidity and Capital Resources — Summary of Financing in Item 7 above.
Our debt obligations are more fully described in Note 12 and Liquidity and Capital Resources — Summary of Financing in Item 7 above.
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(b) Amounts after 2023 are primarily comprised of principal payments for our Senior Unsecured Notes ( Note 11 ).

Other WPC 10-K year-over-year comparisons