W.P. Carey Closes 3 Deals Totaling $124M

October 8, 2019

The company finalized two sale-leaseback transactions and a build-to-suit commitment involving industrial properties in the U.S., Mexico and Europe.

Industrial property in W.P. Carey’s portfolio. Image courtesy of W.P. Carey

W.P. Carey has covered a great deal of international ground with three recent investments totaling $124 million. The New York-based net lease REIT just announced two sale-leaseback transactions and one build-to-suit commitment involving industrial assets in the U.S., Mexico and Europe.

In a sale-leaseback agreement with one of the world’s leading producers of high-performance tools, W.P. Carey acquired three properties totaling 980,000 square feet. Two of the triple-net leased facilities are located in the U.S., and the third is sited in Mexico. In another sale-leaseback deal, the company spent $16 million on the purchase of a 203,000-square-foot light industrial facility in metropolitan Rotterdam, the Netherlands. The recently renovated property is occupied under a triple-net lease by Europe’s leading provider of self-service coffee and vending solutions provider.

The third transaction involved a $55 million build-to-suit commitment with a global automotive components and systems supplier for an R&D facility in metropolitan Frankfurt, Germany. The 168,000-square-foot property will be occupied under a triple-net lease upon its scheduled completion in early 2021.

End-of-year forecast

While W.P. Carey did not disclose the source of financing for the three transactions, the REIT noted on Aug. 2, during its earnings conference call for the second quarter, that it would likely rely on disposition proceeds to fund acquisitions during the second half of the year. Per W.P. Carey’s adjusted funds from operations guidance, the company expects dispositions from its real estate portfolio to total between $400 million and $700 million in 2019.

W.P. Carey has had a typically acquisitive year—transactions included sale-leasebacks and build-to-suits like the commitment for a $75 million, 290,000-square-foot food production facility for Cuisine Solutions in San Antonio, Texas, during the first quarter—and the REIT anticipates brisk activity will continue through the end of 2019. As Jason Fox, CEO of W.P. Carey Inc., said during the Aug. 2 call, “We do hope that and expect that [the pipeline] will build a little bit more as we get into the fourth quarter. That’s typically what we see coming into the end of each year.”