W. P. Carey
Annual Report 2016

Plain-text annual report

2016 Annual Report Investing for the long run™ Creating long-term value through diversity Dear Fellow Investors, Diverse Real Estate Portfolio Diverse Sources of Capital W. P. Carey Inc. (NYSE: WPC) Diverse Geographic Footprint and Opportunity in US and Europe 2016 was a year of advancement for W. P. Carey, building on our more than 40-year history of Investing for the Long Run and maintaining our focus on delivering superior risk-adjusted returns for shareholders. In the short span of one year, we made significant progress in several key areas of our business designed to better position us for sustainable, long-term growth: We enhanced the quality of our real estate portfolio, further transitioned our business toward higher quality revenue streams, continued to strengthen and add flexibility to our balance sheet, and implemented sustainable expense reductions. I am pleased to report that within the context of these initiatives, we have increased both our AFFO and dividends while maintaining a conservative payout ratio, generating AFFO of $5.12 per diluted share and declaring distributions totaling $3.93 per share. As we have since our inception, we continue to focus on generating durable and recurring income streams, which we believe is a critical component of creating shareholder value. Founded in 1973, publicly traded since 1998 and a REIT since 2012, W. P. Carey has delivered attractive returns to our stakeholders for more than four decades. In 2017, we will continue our transformation to a net lease REIT by focusing on increased higher- quality revenues and ongoing operational efficiencies. Guided by our cycle-tested, risk management-driven portfolio strategy, we will continue to capitalize on new opportunities, grow the value of our portfolio and improve the quality of our earnings. As always, we will do so within the framework of our long-term perspective, which has helped us successfully navigate various market cycles. 2016 was an unusually active year for capital recycling at W. P. Carey as we sought to improve the value and income-generating strength of our diversified real estate portfolio through proactive asset management, selective dispositions and strategic investments. Total disposition volume was relatively high at $636 million, which was weighted toward residual risk assets with weak criticality, low renewal probability and a remaining weighted average lease term of four years. On the acquisitions side, we completed approximately $544 million of on-balance sheet investments with a weighted average lease term of just over 20 years, extending the overall portfolio’s weighted average lease term to 9.7 years and improving both its criticality and overall quality. We have and will continue to focus on credit underwriting, asset criticality and real estate fundamentals while originating and negotiating leases with attractive risk-adjusted pricing. 1% We believe that a net lease real estate portfolio — where lease duration is long, typically 15 to 20 years — should be diversified across tenant, industry, asset class and geography to help insulate income generated by the portfolio during industry-specific downturns or geographic-specific events. Our diversified approach to new investments allows us to be opportunistic and generate incremental returns within acceptable risk parameters. The majority of our assets — including all of our 2016 investments — are sourced as sale-leaseback transactions. This is an important differentiator from other net lease REITs that buy existing leases in the secondary market and one that we believe yields several competitive advantages. With few buyers legitimately competing outside the “ In the short span of one year, we made significant progress in several key areas of our business designed to better position us for sustainable, long-term growth.” 99% of our leases have contractual rent increases, positioning us well for a potentially higher inflationary environment 43% 43% 1% 4% 4% 26% 26% 26% R e R e n t E s c a l a t io 26% ns n t E s c a l a t io ns Uncapped CPI (43%) CPI-based (26%) Fixed (26%) Other (4%) None (1%) Uncapped CPI (43%) CPI-based (26%) Fixed (26%) Other (4%) None (1%) 2016 Annual Report | 1 commodity segment of the net lease market, our 43-year track record of executing highly structured sale-leaseback transactions gives us a strong presence and a wider pool of opportunities. As a result, we get increased access to senior management and information, allowing us to more thoroughly evaluate the tenant’s long-term prospects and understand specific transaction risks and merits. In addition, greater access to the real estate itself allows us to better determine its value, quality and criticality to the tenant. Sourcing and structuring complex sale-leasebacks enable us to generate a significant cap rate premium relative to both the commodity segment of the net lease market and assets that trade on the secondary market. We are also able to structure more institutional quality leases with longer lease terms, improved financial covenants when warranted, greater downside protections based on the information gathered during underwriting and better rent escalations frequently tied to the Consumer Price Index. Entering what is anticipated to be a higher inflationary environment, we believe these escalations will lead to increased revenues and incremental value to our shareholders. Our platform affords us the advantage of deploying capital in both North America and Europe, investing where comparative risk-adjusted returns are most attractive and quickly shifting geographic focus as opportunities change. We have been doing business in Europe since 1998 with an investment team in London and asset management operations in Amsterdam. Investing internationally allows us to effectively compete for net lease transactions with companies that have an international footprint — as we did this year, acquiring properties from a tenant with operations in the US, Canada and Mexico. One of the biggest misperceptions of net lease investing is that assets do not need the level of management required by other real estate classes. However, I firmly believe that just as the underwriting and structuring of the lease create value, active management is required to maintain, and in many instances increase and harvest, that value. One of our primary initiatives continues to be improving the quality of our portfolio through acquisitions and proactive asset management by extending weighted average lease term and selectively selling assets to increase profitability and maintain a high occupancy rate, currently 99%. We review assets using the same criteria utilized when investing in those assets. We regularly evaluate tenant credit, ensure the leased assets have remained critical to the operations of the tenant and confirm tenant compliance with the lease terms. Our investment grade balance sheet offers strength and flexibility for our operations. The progress we have made in recent years continued in 2016 and in early 2017, including our US dollar-denominated bond issue in September 2016, our euro- denominated bond issue in January 2017, and the renewal and upsizing of our credit facility in February 2017. As a result, we have increased our weighted average debt maturity and reduced balance sheet risk while lowering our weighted average interest rate and growing our unencumbered asset pool. Our access to the European debt market has also enabled us to increase the proportion of total debt denominated in euros, thereby increasing the natural hedge on our euro-denominated rents and further insulating NAV exposure to the euro. Looking ahead, we see additional opportunities to replace mortgage debt with lower cost bond financing. As we grow our balance sheet through acquisitions, we expect our leverage metrics to remain at similar levels while improving our credit profile through the execution of our unsecured debt strategy. We will continue our path toward becoming a more frequent bond issuer in the unsecured markets over the long term, supported by regular investor outreach to further enhance the liquidity of our outstanding bonds and tighten their spreads. During 2016, we also activated and utilized our “at the market” program, issuing equity opportunistically and raising net proceeds of $84 million at attractive pricing relative to the investments we made during the year. While 95% of our 2016 AFFO was generated by on-balance sheet net lease assets, our Investment Management business also generated attractive and profitable revenue streams. Within this segment, the revenue mix continues to migrate away from one-time structuring fees and toward recurring asset management revenue streams, better positioning the company for stable growth over the long term. As our business changes and we adapt to market conditions, we will continue to focus on cost efficiencies. In 2016, we executed on our cost-reduction plan, delivering a 20% decrease in general and administrative expenses compared with 2015. We expect these efficiencies to be sustainable and will continue to assess our overall cost structure with an eye toward making it as operationally efficient as possible. During the year, we increased investor outreach and enhanced the supplemental information we provide our investors. I personally have spent a great deal of time meeting with our stakeholders, explaining the value of our platform, our track record investing in both North America and Europe, the evolution of our Investment Management business as we adapt to changes in the regulatory environment, the value embedded in our portfolio due to the structure of our leases and our future plans. Maximizing recurring revenues and sustainable cash flow is our primary goal. As investors understand and recognize our success in this effort, we believe their appreciation of the quality of our earnings and the value of our portfolio will continue to increase. In closing, I would like to acknowledge the service of our Chief Operating Officer, Thomas Zacharias, who, after 15 years with W. P. Carey, has decided to retire from the firm. He has been a loyal and valuable member of our team and, while he will be missed, has built a solid asset management team in New York and Amsterdam that is well-positioned for the future. I also want to acknowledge the passing of one of our directors, Charles Parente, this past November. Chuck served as Chairman and member of the Audit Committee for more than 10 years and brought to our Board a deep knowledge of accounting matters, as well as extensive executive experience. He was a friend and mentor to me personally, and he is greatly missed. As part of our ongoing Board refreshment efforts, we saw the retirement of five directors, and we welcomed three new directors: Mark Alexander, Peter Farrell and Chris Niehaus. Each brings his own area of expertise, and we are fortunate to have individuals of this caliber join our Board. Along those lines, I want to thank our entire Board of Directors — past and present — for their support, as well as our shareholders and bondholders for their continued trust. Although I have been with W. P. Carey for more than a decade, serving as CFO and then Board member, after completing my first year as CEO, I am more appreciative than ever to work with a very talented senior management team, supported by dedicated employees whose efforts have enabled us to achieve our goals this past year and enter 2017 with confidence and momentum. Bill Carey always prided himself on surrounding himself with the “best and the brightest,” and I am certain that if he were here, he would feel that way today. Mark J. DeCesaris Chief Executive Officer $3.96*  W. P. Carey’s Total Return Since Going Public in 1998 W. P. Carey’s Annualized Dividends 955% $1.65  $1.73  $1.96  $2.44  WPC MSCI US REIT Index S&P 500 445% 249% Total return from January 21, 1998 to February 28, 2017 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Past performance is not a guarantee of future results. *Record date of December 30, 2016 2 | W. P. Carey Inc. 2016 Annual Report | 3 Building on our 40+ year history of investing for the long run, we have grown our assets under management to more than $23 billion.* Founded in 1973, we have been publicly traded since 1998, a REIT since 2012 and a leading net lease investor for more than four decades. 2016 Assets under management surpass $23 billion* 2014 W. P. Carey merges with CPA®:16 – Global Investment grade ratings from Moody’s and S&P Inaugural $500 million US bond issuance and $282 million public equity offering 2012 W. P. Carey merges with CPA®:15 and becomes a publicly traded REIT 2009 W. P. Carey Group closes $225 million New York Times sale-leaseback, providing capital when other sources were unavailable 1998 CPA®:1-9 consolidate into Carey Diversified LLC and begin trading on the New York Stock Exchange 1999 London Investment office opens 2002 W. P. Carey completes $1 billion in sale-leaseback transactions 1973 W. P. Carey & Co., Inc. founded by Wm. Polk Carey, pioneering retail offerings of pooled net lease assets to investors 1982 Gibson Greeting Cards transaction marks the first use of sale-leaseback financing to fund an LBO 1979 CPA® series of investment programs begins 1993 Assets under management surpass $1 billion 2000 Merger of Carey Diversified LLC and W. P. Carey & Co. Inc. creates W. P. Carey & Co. LLC (NYSE: WPC) 2003 Assets under management surpass $5 billion 2008 Amsterdam Asset Management office opens; assets under management surpass $10 billion W. P. Carey performance n r u t e R l a t o T S&P 500 Index 1970 1980 1990 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 1979/1980 Silver bubble – Hunt Brothers / Prime rate hits 21% 1990 Persian Gulf crisis 2001 9/11 attacks 2002/2003 Enron / Tyco / WorldCom bankruptcies / Iraq invasion 1987 Black Monday / 21% market drop 2000 Technology bubble collapse 1973/1974 Arab oil embargo / Franklin National Bank failure 4 | W. P. Carey Inc. 2009 Housing bubble 2008 US financial institutions failure 2010/2011 European sovereign debt crisis / Global stock markets plummet *Represents AUM of approximately $12.9 billion for the Managed Programs and enterprise value of approximately $10.5 billion for W. P. Carey. 2015 Stock market sell-off 2016 Annual Report | 5 We remain focused on growing and improving the quality of our owned real estate portfolio while maintaining high occupancy rates with limited carrying costs and extending our weighted average lease term. $659 million in annualized base rent 99% annualized base rent from leases with built-in increases 9.7 years weighted average lease term 903 net lease properties 6 | W. P. Carey Inc. 2016 Annual Report | 7 As of December 31, 2016 Executing on our portfolio strategy, a cycle-tested process founded on four key criteria, has allowed us to grow our real estate portfolio while maintaining its diversity and mitigating downside risk. Proactively manage our portfolio Apply the same four criteria to new acquisitions and dispositions Evaluate capital recycling opportunities that maintain the diversity of our portfolio The same four key criteria are applied to each acquisition and disposition: Acquisitions Our Portfolio Four Key Criteria • Creditworthiness of the tenant • Criticality of asset to tenant’s business • Fundamental value of real estate • Transaction structure and pricing 1 3 4 Dispositions 29.9% 14.2% 15.6% 25.4% Industrial (29.9%) Office (25.4%) Retail (15.6%) Warehouse (14.2%) Self-Storage (4.8%) Other2 (10.1%) 2 Other includes ABR from tenants within the following property types: hotel, education facility, theater, net lease student housing and fitness facility. Our recognized expertise in North America and Europe provides access to a more diverse, deeper and broader pool of investment opportunities. Our portfolio spans 19 countries and a range of property types and industries, allowing us to mitigate risk tied to any single region, property type or industry. 4.8% 10.1% ational (3 3 . 9 % ) n r e t n I Property Type United States (66.1%) United States (66.1%) Germany (8.6%) United Kingdom (4.8%) Spain (4.1%) Finland (2.8%) Poland (2.5%) The Netherlands (2.1%) France (2.0%) Canada (1.9%) Australia (1.7%) Other1 (3.4%) Other includes assets in Norway, Austria, Hungary, Sweden, Belgium, Mexico, Thailand, Malaysia and Japan. 4.8% 10.1% 14.2% 29.9% 15.6% 25.4% Industrial (29.9%) Office (25.4%) Retail (15.6%) Warehouse (14.2%) Self-Storage (4.8%) Other2 (10.1%) 2 Other includes ABR from tenants within the following property types: hotel, education facility, theater, net lease student housing and fitness facility. Wholesale (2.2%) Business Services (1.8%) Durable Consumer Goods (1.7%) Aerospace and Defense (1.6%) Grocery (1.6%) Chemicals, Plastics and Rubber (1.5%) Metals and Mining (1.3%) Oil and Gas (1.2%) Non-durable Consumer Goods (1.2%) Telecommunications (1.1%) Banking (1.1%) Other4 (2.1%) Geographic ational (3 3 . 9 % ) n r e t n I United States (66.1%) Tenant Industry 1 United States (66.1%) Germany (8.6%) United Kingdom (4.8%) Spain (4.1%) Finland (2.8%) Poland (2.5%) The Netherlands (2.1%) France (2.0%) Canada (1.9%) Australia (1.7%) Retail Stores3 (16.8%) Other1 (3.4%) Consumer Services (10.4%) Automotive (7.9%) Other includes assets in Norway, Austria, Hungary, Sweden, Sovereign and Public Finance (5.7%) Belgium, Mexico, Thailand, Construction and Building (5.5%) Malaysia and Japan. Hotel, Gaming and Leisure (5.3%) High-Tech Industries (5.0%) Beverage, Food and Tobacco (4.4%) Cargo Transportation (4.2%) Media: Advertising, Printing and Publishing (4.2%) Healthcare and Pharmaceuticals (4.2%) Containers, Packaging and Glass (4.1%) Capital Equipment (3.9%) Retail Stores includes automotive dealerships. Other includes ABR from tenants in the following industries: insurance; electricity; media: broadcasting and subscription; forest products and paper; and environmental industries. Also includes square footage for vacant properties. 8 | W. P. Carey Inc. 2016 Annual Report | 9 In the same way that underwriting and structuring of new net lease investments create value, proactive asset management is required to maximize value and identify recycling opportunities that further improve overall portfolio quality. Consistent with our proactive management strategy of maximizing value and identifying capital recycling opportunities that allow us to improve portfolio quality, we completed $636 million of property dispositions in 2016. Featured Dispositions Amylin Pharmaceuticals Long-Term Evaluation of Tenant’s Business • Amylin was acquired by AstraZeneca, resulting in a major credit upgrade and increased value of remaining contractual rent Market Considerations • Top life sciences market near cyclical peak • Highest and best value required conversion to true lab space Asset Criticality Asset Quality Deal Structure Added Portfolio Value • Acquisition by AstraZeneca eliminated need for two-building office and lab campus • Premier San Diego location but large capital investment required to convert to lab and provide competitive amenities • Low potential return on invested capex compared with sale • Change of control provisions and sublease consent rights in initial lease agreement led to credit upgrade, providing potential purchaser with three years of remaining cash flow backed by investment grade tenant • Sale allowed W. P. Carey to exit asset at peak market pricing and avoid major capital investment • Reinvested proceeds into long-term investment with risk/reward characteristics better aligned with W. P. Carey’s key criteria Advanced Micro Devices (AMD) • AMD business changed substantially during lease term • Transitioned to an asset-light model, resulting in stronger tenant over time but evolving real estate needs • Strong Silicon Valley office market with attractive residential upside opportunity • AMD determined it could operate in a smaller office footprint; two-building office campus no longer critical for tenant’s business • High-quality real estate on large land parcel in Silicon Valley with flexible in-place zoning augmented disposition opportunity • Amended lease structure allowed W. P. Carey to facilitate sale to residential developer by eliminating renewal options, enabling earlier conversion to higher value use • Realized substantial upside of residential conversion while avoiding costly entitlement process and market risk • Transaction structure allowed W. P. Carey to control sale timing and recycle capital into long-term, critical industrial portfolio with capital gain deferred through a 1031 exchange Kraft Foods Group Inc. • Kraft-Heinz merger • Strong suburban led to shift in corporate real estate strategy and cost structure office submarket, but tenant preferred urban office environment • Kraft-Heinz merger resulted in headquarter relocation to Pittsburgh; remaining Chicago employees moved to smaller footprint downtown • High-quality office • Highly structured campus benefited from extensive recent renovation at tenant’s cost and substantially below-market rent disposition accommodated three-party transaction, including substantial termination payment and sale to an owner-user • Deployed recycled capital into long-term investment while optimizing deal structure for tax efficiency 10 | W. P. Carey Inc. 2016 Annual Report | 11 Our 2016 investment activity continued to focus on the generation of higher quality, recurring income streams through the acquisition of assets leased on a long-term basis to creditworthy tenants where leases provide for contractual built-in rental escalations. Applying our four key investment criteria, we recycled the capital generated by our portfolio dispositions into new investments that maintain the diversity of our portfolio while improving its overall quality. Featured Investments Long-Term Evaluation of Tenant’s Business Market Considerations Asset Criticality Asset Quality Deal Structure Added Portfolio Value ABC Group Properties: 14 Location: US, Canada, Mexico (3 US states) Lease Term: 20 years Purchase Price: $141 million Escalations: CPI based Size: 2,400,000 sq. ft. • Industry-leading thermoplastic automotive supplier backed by established private equity firm • Strong, vertically integrated business with plans for further growth and diversification • Majority of Canadian properties located in the greater Toronto area; a market with high barriers to entry for new developments • Growing auto parts manufacturing industry • 2.4 million square feet of vertically integrated manufacturing facilities representing the majority of ABC’s North American footprint, including headquarters, polymer production and machine tooling facilities • Advanced manufacturing facilities equipped with full-scale, in-house equipment, benefiting from significant recent tenant investment • Three long-term USD net leases with built-in rent growth • Cross-defaulted master leases by country, limiting exposure in the event of bankruptcy • Purchased using proceeds redeployed from the sale of an aging portfolio of properties into critical assets leased to a strong tenant on a long-term basis • In turn, W. P. Carey improved its weighted average lease term and overall risk profile Nord Anglia Properties: 3 Location: US (FL and TX) Lease Term: 25 years Purchase Price and Build-to-Suit Commitment: $296 million Escalations: CPI based Initial Size: 592,000 sq. ft. • Industry-leading education company and global operator of premium international schools with 43 schools globally • Stable business model with predictable growth and plans for expansion • Local markets with high foreign direct investment, large expatriate populations and rising disposable income • High enrollment with planned renovations and expansion • Commitment to fund $128 million of expansions and improvements will enhance criticality • Well-maintained, state-of- the-art facilities featuring several amenities, including athletic facilities, theaters, boarding suites and swimming pools • Planned expansion to facilities will increase quality and value of assets • Long-term net leases with • Recycled capital from built-in rent growth • Completion of build-to-suit expansions will restart 25-year terms of the annual uncapped CPI- indexed triple-net leases dispositions in 2015/2016 into higher quality, longer lease-term assets largely through a 1031 exchange • Acquisition provides predictable cash flows, compelling returns and annual rent escalations • Industry-leading concrete pipe manufacturing company Forterra Properties: 49 Location: US, Canada (22 US states) Lease Term: 20 years Purchase Price: $218 million Escalations: 2% fixed Size: 4,000,000 sq. ft. • Local markets with high barriers to entry due to high cost of new developments and long-standing relationships between established companies and customers • Diversified portfolio across US and Canada • Highly critical portfolio of 49 mission-critical facilities representing a significant portion of tenant’s concrete gravity pipe and concrete pressure pipe manufacturing operations • Large portfolio of concrete • Long-term net leases • Purchased using proceeds pipe manufacturing facilities that supply and support municipal infrastructure nationwide with built-in rent growth from AMD disposition • Cross-defaulted master leases by country • Replaced one-year remaining lease with a 20-year lease on a critical diversified industrial portfolio through a 1031 exchange 12 | W. P. Carey Inc. 2016 Annual Report | 13 We have a 40+ year track record of investing successfully on behalf of more than 140,000 investors. Our business plan involves leveraging our established and well-regarded investment management arm to raise new funds and expand our assets under management. We believe it is our responsibility to continue doing good while doing well through our Carey Forward initiative. Prior Programs Since our founding in 1973, we have provided retail investors with the opportunity to invest in pools of income-generating commercial real estate assets. Of our 17 Corporate Property Associates (CPA®) programs, 15 have completed their full investment cycles, delivering stable income to generations of investors through good times and bad. Expanded Offerings Our managed program AUM has continued to grow with the addition of our lodging, corporate credit and student housing offerings. At the same time, within our income- generating commercial real estate offerings, the primary focus has shifted from net lease to other types of income-generating real estate assets. 1 Past performance is not a guarantee of future results. 2 With the exception of CCIF and CESH I, AUM represents estimated fair value of the real estate assets based in part upon third-party appraisals plus cash and cash equivalents less distributions payable. For CCIF and CESH I, AUM represents fair value of the investment assets plus cash and cash equivalents. 14 | W. P. Carey Inc. CPA®:1 CPA®:2 CPA®:3 CPA®:4 CPA®:5 CPA®:6 CPA®:7 CPA®:8 CPA®:9 CPA®:10 CIP® CPA®:12 CPA®:14 CPA®:15 Program life 1979-1998 1980-1998 1982-1998 1983-1998 1984-1998 1985-1998 1987-1998 1988-1998 1989-1998 1991-2002 1992-2004 1994-2006 1998-2011 2002-2012 CPA®:16 – Global 2003-2014 Total cash distributions plus liquidation value per $10,000 investment1 Average annual return1 $23,670 $36,863 $40,806 $31,008 $21,025 $26,382 $21,504 $22,851 $18,393 $20,833 $24,243 $23,689 $21,719 $20,208 $17,649 7.17% 14.89% 18.81% 13.85% 7.72% 12.47% 10.15% 13.10% 9.59% 8.81% 11.22% 10.91% 8.96% 9.58% 7.64% Net lease properties Other income- generating properties 395 38 59 35 76 10 Commenced Offering status CPA®:17 – Global Diversified Net Lease 2007 Closed CWI 1 Lodging 2010 Closed CPA®:18 – Global Income-Generating Commercial Real Estate 2013 Closed CWI 2 Lodging CCIF Corporate Credit CESH I Student Housing 2015 Open 2015 Open 2016 Open AUM2 $6.0 billion $2.9 billion $2.2 billion $1.4 billion $301 million $102 million We introduced our Carey Forward program in 2013 as a tribute to our founder, Wm. Polk Carey, whose strong beliefs and philosophies formed the thread in the fabric of the company. Mr. Carey’s generosity, sense of duty and lifelong commitment to Doing Good While Doing Well® were truly inspiring. In honor of his legacy, we have maintained the same dedication not only to financing properties for companies but also to helping the communities we serve. We have continued growing the Carey Forward program by demonstrating a sustained enthusiasm for building and fostering productive relationships between our company and our communities. The program encourages employees to become involved in philanthropic and charitable activities, dedicate their time and resources to meaningful causes and initiatives, and bring to philanthropic and community organizations the same level of skill and excellence they devote to their professional responsibilities. Although the organizations and activities we support can vary, our focus is on enhancing and further improving our communities through youth development and education, hunger relief, healthcare, animal welfare, and arts and restoration. In 2016, we supported the following organizations: • City Harvest • Covenant House • New York Blood Center • New York Cares • St. Jude Children’s Research Hospital • Susan G. Komen • Volunteers of America $20K raised for City Harvest as part of its Skip Lunch Fight Hunger campaign $5K+ raised for the No-Shave November campaign to drive awareness and funding for cancer prevention 575+ hours spent volunteering $15K raised to support local children in need through New York Cares 2016 Annual Report | 15 Nick J.M. van Ommen Former Chief Executive Officer, European Public Real Estate Association Reginald Winssinger Chairman of National Portfolio, Inc. Senior Management Mark J. DeCesaris Chief Executive Officer Jason E. Fox President Mark M. Goldberg President, Investment Management; Chairman of Carey Financial, LLC Brooks G. Gordon Managing Director & Head of Asset Management Susan C. Hyde Managing Director, Chief Marketing Officer, Chief Ethics Officer & Corporate Secretary Paul Marcotrigiano Managing Director & Chief Legal Officer John J. Park Managing Director & Director of Strategy and Capital Markets Gino Sabatini Managing Director & Head of Investments ToniAnn Sanzone Managing Director & Chief Financial Officer Executive Offices W. P. Carey Inc. 50 Rockefeller Plaza New York, NY 10020 1-212-492-1100 1-800-WP CAREY (1-800-972-2739) Transfer Agent Computershare Shareowner Services P.O. Box 43006 Providence, RI 02940-3006 1-888-200-8690 Institutional Investor Relations Peter Sands Director of Institutional Investor Relations 1-212-492-1110 institutionalir@wpcarey.com Individual Investor Relations 1-800-WP CAREY (1-800-972-2739) ir@wpcarey.com Auditors PricewaterhouseCoopers LLP Form 10-K A copy of our Annual Report on Form 10-K as filed with the US Securities and Exchange Commission may be obtained without charge at www.sec.gov, by writing to the Executive Offices at the above address or by visiting our website at www.wpcarey.com. Trading Information Shares of W. P. Carey Inc. trade on the New York Stock Exchange under the ticker WPC. Corporate Information Board of Directors Benjamin H. Griswold, IV Chairman of the Board & Chairman of the Executive Committee; Partner & Chairman of Brown Advisory, Inc. Mary M. VanDeWeghe Vice Chair of the Board; Chief Executive Officer & President of Forte Consulting Inc. Mark J. DeCesaris Chief Executive Officer Mark A. Alexander Chairman of the Audit Committee; Chairman & Chief Executive Officer of Landmark Property Group, LLC Nathaniel S. Coolidge Former Head of Bond & Corporate Finance Department, John Hancock Mutual Life Insurance Company Peter J. Farrell Chairman of the Compensation Committee; Partner, CityInterests, LLC Axel K.A. Hansing Partner, Coller Capital, Ltd. Jean Hoysradt Former Chief Investment Officer of Mousse Partners Limited Richard C. Marston, Ph.D. James R.F. Guy Professor of Finance & Economics at the Wharton School of the University of Pennsylvania Christopher J. Niehaus Chairman of the Investment Committee & Chairman of the Nominating and Corporate Governance Committee; Partner, GreenOak Real Estate 16 | W. P. Carey Inc. wpcarey.com y n a p m o C + s i g d O : n g i s e d d n a n o i t c e r i d e v i t a e r C y n a p m o C n a g e n n e H e h T : g n i t n i r P W. P. Carey Inc. 50 Rockefeller Plaza New York, NY 10020 1-800-WP CAREY www.wpcarey.com NYSE: WPC Follow us: The paper and printer used in the production of the W. P. Carey 2016 Annual Report are certified to Forest Stewardship Council® (FSC®) standards, which promote environmentally appropriate, socially beneficial and economically viable management of the world’s forests. This report was printed on paper containing 10% postconsumer waste material. 

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