W. P. Carey (WPC) investor relations material

Investment activity and guidance

• Raised 2026 AFFO per share guidance to $5.16–$5.26, driven by strong investment activity and improved rent loss outlook.

• Increased full-year investment volume guidance to $1.5–$2 billion, with $1.1 billion completed and $400 million in advanced pipeline.

• Majority of investments are in industrial assets, especially manufacturing and warehouse, with significant activity in Europe and Canada.

• Sale-leaseback transactions, such as the $400 million GardenCore deal, are a key strategy, providing long-term, high-quality tenants.

• Carey Tenant Solutions platform aims to increase build-to-suit and redevelopment projects, targeting $300–$350 million annually in coming years.

Portfolio performance and credit risk

• Lowered rent loss assumption to $8–$12 million due to improved visibility and reduced exposure to riskier tenants.

• Continued reduction of exposure to Hellweg, expected to exit top 50 tenants by year-end.

• Cornerstone, a non-top-25 tenant, may restructure but is expected to continue paying rent without disruption.

• Portfolio is diversified, with over 400 tenants and no other significant credit risks identified.

• Focus on large, resilient tenants with limited exposure to consumer-oriented businesses, supporting stable credit performance.

Internal growth and lease structure

• Over half of leases are indexed to inflation, especially in Europe, providing positive exposure to inflationary environments.

• New deals in Europe continue to secure CPI-linked rent bumps, often with caps and floors for protection.

• Fixed rent increases have risen to 2.5–3.5% in recent deals, reflecting market trends and asset focus.

• Internal growth from rent escalations is a key earnings driver, offering more certainty than external acquisitions.