W.P. Carey & Co. LLC

NYSE: WPC

 

 

W.P. Carey & Co. LLC (WPC), formerly known as Carey Diversified LLC, is a real estate investment company that acquires, owns and manages commercial properties leased to companies nationwide, primarily on a triple net basis. WPC also earns fees as the advisor to five affiliated CPA(R) REITs that each make similar investments. Under the advisory agreements with the CPA(R) REITs, WPC performs services related to the day-to-day management of the CPA(R) REITs and transaction-related services.

 

The company owns and manages commercial and industrial properties located in 41 states and Europe and net leased to more than 260 tenants. As of December 31, 2003, WPCs portfolio consisted of 171 properties in the United States and 15 properties in Europe, totaling more than 18.4 million square feet. In addition, WPC manages more than 500 additional net leased properties on behalf of the CPA(R) REITs: Carey Institutional Properties Incorporated, Corporate Property Associates 12 Incorporated, Corporate Property Associates 14 Incorporated and Corporate Property Associates 15 Incorporated.

 

WPCs core investment strategy on behalf of both itself and the REITs is to purchase properties leased to a variety of companies on a single tenant net lease basis that are either owned outright or owned by an entity that it manages. The company has a well-developed process with established procedures and systems for acquiring net leased property. In evaluating opportunities, WPC carefully examines the credit, management and other attributes of the tenant and the importance of the property under consideration to the tenant's operations. WPC believes that it has one of the most extensive underwriting processes in the industry has an experienced staff of professionals involved with underwriting transactions. WPC seeks to identify those prospective tenants whose creditworthiness is likely to improve over time.

 

In structuring net lease investment, WPCs strategy is to:

 

    Combine the stability and security of long-term lease payments, including rent increases, with the appreciation potential inherent in the ownership of real estate;

    Enhance current returns by utilizing varied lease structures;

    Reduce credit risk by diversifying investments by tenant, type of facility, geographic location and tenant industry; and

    Increase potential returns by obtaining equity enhancements from the tenant when possible, such as warrants to purchase tenant common stock.

 

The leases generally place the economic burden of ownership on the tenant by requiring them to pay the costs of maintenance, insurance, taxes, structural repairs, and other operating expenses. WPC also tries to include in its lease clauses provided for mandatory rent increases or periodic increases tied to the CPI or other indices; covenants restricting tenants activity, to reduce the risk of a change in credit quality; indemnification of WPC for environmental and other liabilities; and guarantees from parent companies or other entities.

 

WPCs objective is to increase shareholder value and its funds from operations through prudent management of its real estate assets and opportunistic investments and through the expansion of its asset and private equity management business. The company expects to evaluate a number of different investment opportunities in a variety of property types and geographic locations, and to pursue the most attractive based upon its analysis of the risk/return tradeoffs. WPC will continue to own each property as long as it believes ownership helps attain its objectives.

 

WPC presently intends to:

 

             Increase revenues from the management business, both by increasing assets under management as the CPA(R) REITs acquire additional property and organizing new investment entities;

 

             Seek additional investment and other opportunities that leverage core management skills (which include in-depth credit analysis, asset valuation and sophisticated structuring techniques)

 

             Optimize the current portfolio of properties through expansion of existing properties, timely dispositions and favorable lease modifications

 

             Utilize its size and access to capital to refinance existing debt

 

             Increase its access to capital.

 

W.P. Carey & Co. trades on the New York Stock and Pacific Stock Exchanges under the symbol WPC. For more information, visit the companys website at http://www.wpcarey.com/ or contact Joseph Martell at 212-492-8963, [email protected].

 

 

Financial Information from 2003 10-K

(in thousands, except per unit amounts)

 

 

2003

2002

Market value*

$778,220

$571,557

Assets

$906,505

$893,524

Net property, plant & equipment

$617,604

$651,690

Long-term debt

$209,193

$235,049

Members equity

$594,787

$570,888

Revenues

$163,379

$155,944

Operating income

$92,698

$67,697

Net income (loss)

$62,878

$46,588

Net income (loss)/unit

$1.72

$1.31

Distribution / unit

$1.73

$1.72

High unit price

$33.14

$25.90

Low unit price

$24.15

$21.28

*As of June 30, 2003 and June 28, 2002.

 

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