WPC
W P Carey INC
NYSE
8-K: W. P. Carey Tenant, True Value, Files for Chapter 11 Bankruptcy
Sentiment:
Current Report
15 October 2024 6:10 AM
W. P. Carey Inc. reports that its 15th largest tenant, True Value Company, has filed for Chapter 11 bankruptcy and agreed to sell its operations to Do it Best Corp.
Worse than expected
The bankruptcy filing of a major tenant is generally considered a negative event that could impact future revenue.
Summary
- W. P. Carey Inc. has announced that one of its tenants, True Value Company, has initiated voluntary Chapter 11 bankruptcy proceedings.
- True Value has also entered into an agreement to sell substantially all of its business operations to Do it Best Corp.
- As of June 30, 2024, W. P. Carey leased nine properties to True Value, generating an annualized base rent (ABR) of $18.7 million.
- These leases were structured through two master leases and three individual leases, with a weighted-average lease term of 14.1 years.
- True Value is current on rent payments through October 2024.
- The properties leased to True Value include distribution warehouses and a manufacturing facility across multiple states.
Sentiment
Score: 3
Explanation: The sentiment is negative due to the bankruptcy filing of a significant tenant, which introduces uncertainty and potential financial risks for W. P. Carey.
Positives
- True Value is current on rent payments through October 2024, indicating no immediate loss of rental income.
- The weighted-average lease term of 14.1 years suggests a long-term relationship, which may provide some stability in the future.
Negatives
- True Value's Chapter 11 filing introduces uncertainty regarding future rental income from these properties.
- The sale of True Value's operations to Do it Best Corp. could lead to changes in lease agreements or occupancy.
Risks
- The bankruptcy of True Value could result in potential lease renegotiations or terminations.
- There is a risk of reduced or delayed rental payments during the bankruptcy proceedings.
- The sale of True Value's operations may introduce new risks related to the new ownership and their business strategy.
Future Outlook
The document does not provide specific forward-looking statements, but the situation with True Value's bankruptcy and sale introduces uncertainty regarding future rental income and lease agreements.
Management Comments
- W. P. Carey Inc. is reporting the Chapter 11 filing of its tenant, True Value Company.
Industry Context
The bankruptcy filing of a major tenant like True Value highlights the risks associated with tenant concentration in real estate investment trusts (REITs). It also underscores the importance of diversification and robust lease agreements.
Comparison to Industry Standards
- While the document does not provide specific industry benchmarks, the impact of a tenant bankruptcy on a REIT's income stream is a common concern.
- Other REITs with similar tenant profiles may face similar risks, and investors will likely compare how W. P. Carey manages this situation to its peers.
- Companies like Prologis and Duke Realty, which focus on industrial properties, may be considered peers, but their tenant base and lease structures may differ.
Stakeholder Impact
- Shareholders may experience a negative impact on the stock price due to the uncertainty surrounding the bankruptcy.
- Employees of W. P. Carey may be affected by the potential changes in the company's financial performance.
- The bankruptcy of True Value may impact its suppliers and customers.
Next Steps
- W. P. Carey will likely monitor the bankruptcy proceedings and the sale of True Value's operations.
- The company may need to renegotiate lease terms or find new tenants for the affected properties.
Legal Proceedings
- True Value has initiated voluntary Chapter 11 proceedings in the U.S. Bankruptcy Court for the District of Delaware.
Key Dates
- 2024-06-30: Date of reference for property details and annualized base rent (ABR) information.
- 2024-10-14: Date True Value initiated voluntary Chapter 11 proceedings.
- 2024-10-15: Date of the 8-K filing by W. P. Carey.
Keywords
bankruptcy, Chapter 11, real estate, lease, tenant, W. P. Carey, True Value, Do it Best Corp, ABR, rent
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.
Disclaimer: This summary was generated by artificial intelligence and its accuracy is not guaranteed. The information provided here is for general informational purposes only and does not constitute financial advice, recommendation, or endorsement of any kind. It may contain errors or omissions. You should not rely on this information to make financial decisions. Always seek the advice of a qualified financial professional before making any investment or financial decisions. Use of this information is at your own risk.