W.P. Carey, valued at about $23 billion, was left with a industrial real estate portfolio of 1,475 net lease properties and 85 self-storage operating properties. W.P. Carey said it intends to give attention to investing in additional lucrative sectors akin to single-tenant, industrial, warehouse, and retail assets within the US and Northern and Western Europe.
“While we’ve meaningfully reduced our office exposure in recent times, the plan we’ve announced this morning vastly accelerates our exit from office — enhancing the general quality of our portfolio, improving the standard and stability of our earnings, and incrementally benefiting our credit profile,” said W. P. Carey CEO Jason Fox. “Ultimately, with a transparent path to monetizing our legacy office assets, we imagine we are going to achieve a lower cost of capital and be higher positioned for long-term value creation for our shareholders.”
Details on NLOP
NLOP’s assets will account for roughly 10% of W. P. Carey’s annualized base rent (ABR) as of mid-2023. This offshoot will comprise 59 prime office spaces, spanning over 9.2 million sq. ft., mostly within the US and a few in Europe. The tenant list includes 62 corporate entities across industries, pulling in an ABR of over $141 million.
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The firm sees NLOP assuming $169 million of pre-existing mortgage debt while entering a $455 million debt agreement with J.P. Morgan. In tandem with the spinoff, an estimated $350 million will likely be transferred from NLOP to W. P. Carey.