W. P. Carey Releases 2024 CEO Letter

Rhea-AI Summary

W. P. Carey (NYSE: WPC), a leading net lease REIT, has released its 2024 CEO Letter highlighting key achievements. The company completed its office exit strategy and established a new AFFO baseline for future growth. In 2024, WPC completed $1.6 billion of investments in industrial, warehouse, and retail properties across the U.S. and Europe.

The company achieved 2.6% year-over-year contractual same-store rent growth, maintaining best-in-class rent escalations on new investments. As of December 31, 2024, WPC's portfolio includes 1,555 net lease properties covering approximately 176 million square feet and 78 self-storage operating properties.

CEO Jason Fox emphasized the company's transformation into a simpler, more dynamic business with a strong balance sheet, access to multiple capital forms, exceptional rent growth, and a proven investment approach positioned for sustainable growth.

Positive

• Completed $1.6 billion in new investments at attractive spreads
• Achieved 2.6% same-store rent growth, among best in net lease sector
• Successfully executed office exit strategy
• Maintained strong balance sheet with access to multiple capital sources
• Record investment activity in Q4 2024

Negative

• Lower inflation impact on rent escalations

Insights

REIT Investment Analyst

W.P. Carey's 2024 CEO letter signals the successful completion of its office exit strategy, a significant portfolio transformation that establishes a new baseline for AFFO growth. This strategic pivot away from office properties—a sector facing structural challenges—positions WPC for more sustainable growth through focusing on industrial, warehouse, and retail assets.

The $1.6 billion of investments completed at attractive spreads to capital costs demonstrates the company's ability to execute its capital deployment strategy effectively, particularly encouraging given the record Q4 activity. More impressive is the 2.6% contractual same-store rent growth, which remains among the sector's best—a direct result of their sale-leaseback approach that typically yields superior rent escalation clauses compared to standard acquisitions.

Their capital markets execution appears sound, with successful debt issuance at favorable pricing relative to investment yields, maintaining the balance sheet strength essential for REITs in the current interest rate environment. The portfolio now encompasses 1,555 net lease properties plus 78 self-storage operating properties, providing diversification while maintaining focus on operationally-critical real estate.

The characterization of 2024 as "transitional" acknowledges short-term adjustments from the office exit while highlighting the stronger foundation now established. This strategic realignment toward higher-quality assets with better growth characteristics should translate to more predictable and resilient cash flows going forward.

Real Estate Market Strategist

WPC's strategic shift toward industrial, warehouse and retail properties represents excellent market positioning in the current real estate landscape. By exiting office exposure—typically the most volatile segment with challenging post-pandemic demand dynamics—they've effectively de-risked their portfolio while focusing on property types with stronger fundamental tailwinds.

The industrial and warehouse focus aligns perfectly with structural logistics trends driving demand for distribution networks, while their selective retail approach likely targets necessity-based and service-oriented retail that's proven resilient against e-commerce disruption. The geographic diversification across U.S. and European markets provides additional stability through exposure to different economic cycles.

Their sale-leaseback emphasis is particularly noteworthy, as it typically enables better tenant quality assessment and often yields stronger rent escalation provisions than secondary market acquisitions. This approach explains their superior 2.6% same-store rent growth despite moderating inflation, suggesting embedded contractual rent increases that will deliver consistent growth regardless of economic conditions.

The inclusion of 78 self-storage properties adds a complementary operating business with different economic drivers than their core net lease portfolio. Self-storage typically offers higher margins and operational control, balancing the predictable but lower-growth characteristics of triple-net leases.

This transformation creates a cleaner, more focused investment thesis centered on recession-resistant property types with contractual growth mechanisms—exactly what investors should value in the net lease REIT sector.

NEW YORK, March 28, 2025 /PRNewswire/ -- W. P. Carey (W. P. Carey, NYSE: WPC), a leading net lease REIT specializing in corporate sale-leasebacks, build-to-suits and the acquisition of single-tenant net lease properties, today announced the release of its 2024 CEO Letter to shareholders. The letter can be viewed and downloaded from W. P. Carey's website at www.wpcarey.com/CEO-Letter.

2024 highlights include:­

• A new foundation for growth: With the successful completion of W. P. Carey's office exit strategy, the company has established a new baseline for AFFO, setting the foundation for sustainable future growth in earnings and dividends that will drive long-term value for its shareholders.
• Strong investment activity:­ W. P. Carey maintained its focus on investing primarily in high-quality, single-tenant industrial, warehouse and retail properties both in the U.S. and Europe, completing $1.6 billion of investments at attractive spreads to its cost of capital and ending the year with a record quarter of activity.
• Best-in-class rent growth:­ W. P. Carey continued to achieve best-in-class rent escalations on new investments, resulting from its focus on sale-leasebacks. Despite lower inflation, the strength of the company's fixed rent bumps supported year-over-year contractual same-store rent growth of 2.6%, which remains among the best in the net lease sector.
• Continued balance sheet strength and successful capital markets execution: W. P. Carey remained committed to maintaining a strong, conservative balance sheet with access to multiple forms of capital. Investment activity continued to be supported by successful execution in the debt capital markets, with bonds issued at attractive pricing relative to the yields achieved on new investments.

Jason Fox, Chief Executive Officer and President, W. P. Carey, said: "Following 2024's transitional year, I'm excited as we look to the future. Today, W. P. Carey stands as a simpler, more dynamic business well positioned with a strong balance sheet, access to multiple forms of capital, exceptional rent growth and a proven investment approach—all of which provide a foundation for sustainable growth and long-term value creation."

W. P. Carey Inc.

W. P. Carey ranks among the largest net lease REITs with a well-diversified portfolio of high-quality, operationally critical commercial real estate, which includes 1,555 net lease properties covering approximately 176 million square feet and a portfolio of 78 self-storage operating properties as of December 31, 2024. With offices in New York, London, Amsterdam and Dallas, the company remains focused on investing primarily in single-tenant, industrial, warehouse and retail properties located in the U.S. and Northern and Western Europe, under long-term net leases with built-in rent escalations.

www.wpcarey.com

This press release may contain forward-looking statements within the meaning of U.S. Federal securities laws. The comments of Mr. Fox are examples of forward-looking statements. A number of factors could cause W. P. Carey's actual results, performance or achievement to differ materially from those anticipated. Other unknown or unpredictable risks or uncertainties, like the risks related to fluctuating interest rates, the impact of inflation on our tenants and us, the effects of pandemics and global outbreaks of contagious diseases, and domestic or geopolitical crises, such as terrorism, military conflict, war or the perception that hostilities may be imminent, political instability or civil unrest, or other conflict, and those additional risk factors discussed in reports that we have filed with the Securities and Exchange Commission (SEC), could also have material adverse effects on our future results, performance or achievements. Discussions of some of these other important factors and assumptions are contained in W. P. Carey's filings with the SEC and are available at the SEC's website at http://www.sec.gov, including Part I, Item 1A. Risk Factors in W. P. Carey's Annual Report on Form 10-K for the fiscal year ended December 31, 2024. 

Supplemental Information

For further information concerning AFFO, which is a non-GAAP supplemental performance metric, including descriptions of non-GAAP financial measures and reconciliations to GAAP measures, please see our Current Report on Form 8-K filed with the SEC on February 11, 2025, and made available on the Company's website at ir.wpcarey.com/investor-relations.

Institutional Investors:
Peter Sands
1 (212) 492-1110
institutionalir@wpcarey.com

Individual Investors:
W. P. Carey Inc.
1 (212) 492-8920
ir@wpcarey.com

Press Contact:
Anna McGrath
1 (212) 492-1166
amcgrath@wpcarey.com

 

View original content to download multimedia:https://www.prnewswire.com/news-releases/w-p-carey-releases-2024-ceo-letter-302413710.html

SOURCE W. P. Carey Inc.

FAQ

What was W. P. Carey's (WPC) investment volume in 2024?

WPC completed $1.6 billion of investments in industrial, warehouse, and retail properties across the U.S. and Europe in 2024.

What was WPC's same-store rent growth in 2024?

W. P. Carey achieved 2.6% year-over-year contractual same-store rent growth in 2024.

How many properties did W. P. Carey (WPC) own as of December 31, 2024?

WPC owned 1,555 net lease properties and 78 self-storage operating properties as of December 31, 2024.

What major strategic change did WPC complete in 2024?

WPC successfully completed its office exit strategy, establishing a new baseline for AFFO and future growth.