WPC
W P Carey INC
NYSE
8-K: W. P. Carey Reports First Quarter 2024 Results, Affirms Full-Year Guidance
Sentiment:
Quarterly Report
30 April 2024 4:04 PM
W. P. Carey announced its financial results for the first quarter of 2024, reporting a net income of $159.2 million and affirming its full-year AFFO guidance.
Worse than expected
Net income and AFFO per share were down compared to the same period last year, indicating worse results.
Summary
- W. P. Carey reported a net income attributable to the company of $159.2 million for the first quarter of 2024, a decrease from $294.4 million in the same period last year.
- Diluted earnings per share were $0.72, down from $1.39 year-over-year.
- Adjusted Funds from Operations (AFFO) totaled $251.9 million, or $1.14 per diluted share, compared to $1.31 per diluted share in the first quarter of 2023.
- The company affirmed its 2024 AFFO guidance of between $4.65 and $4.75 per diluted share, based on an anticipated investment volume of $1.5 billion to $2.0 billion.
- W. P. Carey completed $374.5 million in investments year-to-date, including $280.3 million in the first quarter and $94.2 million subsequent to quarter end.
- Gross disposition proceeds totaled $889.2 million during the first quarter, including $410.5 million from the Office Sale Program and $478.6 million from non-office dispositions.
- Contractual same-store rent growth was 3.1% year-over-year on a constant currency basis.
- The company repaid $500 million of 4.6% Senior Unsecured Notes due 2024 subsequent to quarter end.
- The net lease portfolio occupancy rate was 99.1% as of March 31, 2024, up from 98.1% at the end of 2023.
Sentiment
Score: 6
Explanation: The sentiment is moderately positive. While the company reported lower earnings and AFFO compared to last year, they affirmed their full-year guidance and made progress on strategic initiatives. The strong occupancy rate and rent growth are positive indicators, but the decrease in earnings tempers the overall outlook.
Positives
- W. P. Carey affirmed its full-year AFFO guidance, indicating confidence in future performance.
- The company made significant progress in its office exit strategy, with substantial dispositions under the Office Sale Program.
- The net lease portfolio occupancy rate increased to 99.1%, demonstrating strong demand for their properties.
- The company has a strong deal pipeline, positioning them well for future investments.
- Contractual same-store rent growth was a solid 3.1% year-over-year.
Negatives
- Net income attributable to W. P. Carey decreased by 45.9% compared to the same quarter last year.
- AFFO per diluted share decreased by 13% compared to the first quarter of 2023.
- Revenues decreased by 8.9% compared to the first quarter of 2023, primarily due to the office exit strategy and the reclassification of U-Haul portfolio revenues.
Risks
- The company's strategic plan to exit office assets has resulted in lower lease revenues and net income.
- The reclassification of lease revenues for the U-Haul portfolio impacted revenue comparisons.
- Lower gain on sale of real estate contributed to the decrease in net income.
- The company faces risks related to fluctuating interest rates and the impact of inflation on tenants.
- The company is exposed to potential impacts from pandemics, global outbreaks, and geopolitical crises.
Future Outlook
The company affirms its 2024 AFFO guidance of between $4.65 and $4.75 per diluted share, based on anticipated full year investment volume of between $1.5 billion and $2.0 billion and disposition volume of between $1.2 billion and $1.4 billion.
Management Comments
- Jason Fox, Chief Executive Officer of W. P. Carey, stated that they had a productive start to the year, closing $375 million of investments and building a strong deal pipeline.
- He also noted excellent progress toward completing their office exit strategy and addressing recent tenant-specific issues.
- Management believes they have a distinct advantage in deploying capital into new investments and the strength of their rent escalations.
Industry Context
This announcement comes as the net lease REIT sector continues to navigate a changing interest rate environment and evolving tenant needs. W. P. Carey's strategic shift away from office assets reflects a broader trend in the industry to focus on more stable property types like industrial and warehouse.
Comparison to Industry Standards
- W. P. Carey's same-store rent growth of 3.1% is within the range of other large net lease REITs, such as Realty Income (O) and National Retail Properties (NNN), which have also reported similar growth rates in recent quarters.
- The company's occupancy rate of 99.1% is higher than the average for the sector, indicating strong demand for their properties.
- The disposition of office assets aligns with the strategy of other REITs that are reducing exposure to the office sector due to changing work patterns.
- W. P. Carey's focus on industrial and warehouse properties is consistent with the trend of increased demand for logistics and distribution facilities.
- Compared to peers like STORE Capital (STOR), W. P. Carey has a more diversified portfolio across property types and geographies, which may provide greater stability.
Stakeholder Impact
- Shareholders will be impacted by the decrease in net income and AFFO per share, but the affirmation of full-year guidance may provide some reassurance.
- Employees may be affected by the company's strategic shift and ongoing restructuring efforts.
- Tenants will be impacted by the company's asset management activities, including lease restructurings and potential dispositions.
- Creditors will be impacted by the company's debt repayment and ongoing capital management.
Next Steps
- The company plans to continue its strategic plan to exit office assets, targeting sales of remaining properties in the first half of 2024.
- W. P. Carey will focus on deploying capital into new investments, particularly in industrial, warehouse, and retail properties.
- The company will continue to monitor and manage its existing portfolio, addressing tenant-specific issues and lease expirations.
- The company will host a live conference call and audio webcast on May 1, 2024, to discuss the first quarter results.
Key Dates
- September 21, 2023: W. P. Carey announced its strategic plan to exit office assets.
- November 1, 2023: The spin-off of 59 office properties into Net Lease Office Properties (NLOP) was completed.
- February 15, 2024: W. P. Carey entered into a lease restructuring for a 35-property retail portfolio in Germany leased to Hellweg.
- March 14, 2024: The company's Board of Directors declared a quarterly cash dividend of $0.865 per share.
- March 31, 2024: End of the first quarter of 2024, for which financial results are reported.
- April 15, 2024: The quarterly dividend was paid to shareholders of record as of March 28, 2024.
- April 30, 2024: W. P. Carey issued its earnings release announcing financial results for the quarter ended March 31, 2024.
- May 1, 2024: Scheduled live conference call and audio webcast to discuss the first quarter results.
Keywords
Net Lease REIT, Real Estate Investment, AFFO, Office Dispositions, Investment Volume, Rent Growth, Occupancy Rate, Capital Investments, Real Estate Portfolio, Financial Results
WPC
W P Carey INC
NYSE
Sector: Real Estate
Filings with Classifications
Capital raise
1 May 2025 5:22 PM
Capital Raising Announcement
- W. P. Carey Inc. has entered into an Equity Sales Agreement to offer and sell shares of its common stock, with an aggregate offering price of up to $1,250,000,000.
- The shares may be offered and sold from time to time through various agents.
- W. P. Carey may also sell shares to an agent as principal for its own account.
Worse than expected
30 April 2025 4:08 PM
Quarterly Report
- Net income attributable to W. P. Carey decreased due to higher losses from foreign debt remeasurement and increased allowance for credit losses.
Better than expected
1 April 2025 5:10 PM
Credit Agreement Amendment
- The amendment extends the maturity of a significant €500 million term loan by three years, improving the company's debt maturity profile.
- It introduces the potential for lower borrowing costs through a new pricing tier linked to higher credit ratings.
- The removal of specific spread adjustments on USD SOFR and CAD CORRA borrowings offers potential interest savings.
Worse than expected
12 February 2025 4:27 PM
Annual Results
- Total revenues decreased in 2024 as compared to 2023, primarily due to lower lease revenues and lower operating property revenues.
- Net income attributable to W. P. Carey decreased in 2024 as compared to 2023, primarily due to lower gain on sale of real estate, non-cash unrealized losses recognized on investment in shares of Lineage, and the impact of the Spin-Off and the Office Sale Program.
- AFFO decreased in 2024 as compared to 2023, primarily due to the impact of the Spin-Off and Office Sale Program.
Capital raise
12 February 2025 4:27 PM
Annual Results
- The company may 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.
- The company may use existing cash resources, available capacity under our Senior Unsecured Credit Facility, proceeds from term loans or other bank debt, proceeds from dispositions of properties (including the Office Sale Program), and the issuance of additional debt or equity securities, such as issuances of common stock through our ATM Program, in order to meet our short-term and long-term liquidity needs.
Worse than expected
11 February 2025 4:10 PM
Earnings Release
- Net income attributable to W. P. Carey decreased by 67.4% in the fourth quarter compared to the same period in 2023.
- Full year AFFO per diluted share decreased by 9.3% from $5.18 in 2023 to $4.70 in 2024.
- Dividends declared during 2024 decreased by 14.2% compared to 2023.
- Revenues, including reimbursable costs, for the 2024 full year totaled $1.58 billion, down 9.2% from $1.74 billion for the 2023 full year.
Capital raise
13 November 2024 4:28 PM
Debt Offering Announcement
- W. P. Carey Inc. is raising $600 million through the issuance of 3.700% Senior Notes due in 2034.
- The offering is being underwritten by Barclays Bank PLC, BNP PARIBAS, J.P. Morgan Securities plc, and Bank of Montreal, London Branch.
Worse than expected
30 October 2024 4:06 PM
Quarterly Report
- The company's revenue, net income, and AFFO all decreased compared to the same period last year, indicating worse than expected results.
Worse than expected
29 October 2024 4:10 PM
Quarterly Report
- The company's net income and AFFO per share decreased compared to the same quarter last year, indicating worse results.
Worse than expected
15 October 2024 6:10 AM
Current Report
- The bankruptcy filing of a major tenant is generally considered a negative event that could impact future revenue.
Worse than expected
31 July 2024 4:06 PM
Quarterly Report
- Total revenues decreased due to lower lease revenues and operating property revenue.
- Net income attributable to W. P. Carey decreased due to the impact of the spin-off, asset sales, and impairment charges.
- AFFO decreased due to the impact of the spin-off, asset sales, lease restructurings and property vacancies.
Worse than expected
30 July 2024 4:06 PM
Quarterly Report
- The company's AFFO per diluted share decreased by 14.0% compared to the same quarter last year.
- The company lowered its full-year AFFO guidance by two cents per diluted share.
- Revenues decreased by 13.9% compared to the same quarter last year.
Capital raise
28 June 2024 4:15 PM
Debt Issuance Announcement
- W. P. Carey Inc. has raised $400 million through the issuance of 5.375% Senior Notes due 2034.
- The proceeds from this offering will be used for general corporate purposes, including potential investments and debt repayment.
Capital raise
20 June 2024 4:32 PM
Debt Offering Announcement
- The document details a $400 million offering of 5.375% Senior Notes due 2034.
- The company intends to use the net proceeds for general corporate purposes, including funding potential future investments and repaying indebtedness.
Capital raise
16 May 2024 4:10 PM
Debt Offering Announcement
- W. P. Carey Inc. has raised €650 million through the issuance of 4.250% Senior Notes due 2032.
- The offering was made pursuant to the company's automatic shelf registration statement and a final prospectus supplement.
Capital raise
8 May 2024 5:25 PM
Debt Offering Announcement
- W. P. Carey Inc. is raising $650 million through the issuance of senior notes.
- The notes are being offered to the public through an underwritten offering.
- The proceeds will be used for general corporate purposes and to repay existing debt.
Capital raise
1 May 2024 4:09 PM
Quarterly Report
- The company may use the at-the-market program (ATM Program) to issue additional equity securities.
- The company may also access the capital markets through additional debt offerings.
Worse than expected
1 May 2024 4:09 PM
Quarterly Report
- The company's revenue and net income decreased year-over-year, indicating worse performance compared to the previous year.
- AFFO also decreased, which is a key metric for REIT performance, suggesting a decline in operational profitability.
Worse than expected
30 April 2024 4:04 PM
Quarterly Report
- Net income and AFFO per share were down compared to the same period last year, indicating worse results.
Capital raise
9 February 2024 4:56 PM
Annual Results
- The company may access the capital markets through additional debt and equity offerings, as well as term loans and other bank debt.
- The company may issue common stock through its ATM Program.
Worse than expected
9 February 2024 4:56 PM
Annual Results
- The company's net income from Investment Management decreased due to the cessation of fees from CPA:18 Global.
- The company's fourth quarter dividend of $0.860 per share reflects a lower payout ratio.
Worse than expected
9 February 2024 7:39 AM
Quarterly Report
- The company's AFFO per diluted share for the fourth quarter and full year 2023 decreased compared to the previous year.
- The company's 2024 AFFO guidance is lower than the 2023 full year AFFO.
- Net income attributable to W. P. Carey decreased by 31.1% in the fourth quarter of 2023 compared to the same period in 2022.
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