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W.P. Carey, valued at about $23 billion, was left with a commercial real estate portfolio of 1,475 net lease properties and 85 self-storage operating properties. W.P. Carey said it intends to focus on investing in more lucrative sectors such as single-tenant, industrial, warehouse, and retail assets in the US and Northern and Western Europe.
“While we’ve meaningfully reduced our office exposure in recent years, the plan we’ve announced this morning vastly accelerates our exit from office — enhancing the overall quality of our portfolio, improving the quality and stability of our earnings, and incrementally benefiting our credit profile,” said W. P. Carey CEO Jason Fox. “Ultimately, with a clear path to monetizing our legacy office assets, we believe we will achieve a lower cost of capital and be better 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 in the US and some 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 be transferred from NLOP to W. P. Carey.
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