W. P. Carey Inc. (NYSE: WPC) announced its 2023 investment volume of approximately $1.3 billion, including fourth quarter investments totaling about $320 million at a weighted-average cap rate of 7.7%. Jason Fox, Chief Executive Officer of W. P. Carey, commented on the company's investment strategy and performance, stating, "Throughout 2023, pricing expectations among sellers persistently lagged rising interest rates, causing deals to take longer to negotiate and close, especially during the second half of the year. Given this dynamic, we remained disciplined and actively exerted our pricing power to preserve spread, closing $320 million of investments at an approximately 7.7% weighted-average cap rate during the fourth quarter. This brought our 2023 investment volume to $1.3 billion, with two additional investments totaling around $180 million scheduled to close in January."
The company's 2023 investment focus remained on acquiring high-quality, single-tenant warehouse and industrial assets, which comprised approximately 75% of its full-year investment volume. Geographically, around 80% of its 2023 volume was in North America, and 20% was in Europe.
W. P. Carey ranks among the largest net lease Real Estate Investment Trusts (REITs) with a well-diversified portfolio of high-quality, operationally critical commercial real estate, including 1,413 net lease properties covering approximately 171 million square feet and a portfolio of 86 self-storage operating properties, pro forma for the spin-off of net lease office properties, as of September 30, 2023.
The company's full 8-K submission is available here.
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (MM) | $886 | $1,233 | $1,209 | $1,332 | $1,479 | $1,732 |
| Revenue Growth | n/a | 39.18% | -1.9% | 10.11% | 11.08% | 17.07% |
| Operating Margins | 50% | 27% | 37% | 33% | 42% | 47% |
| Net Margins | 46% | 25% | 38% | 31% | 41% | 45% |
| Net Income (MM) | $412 | $305 | $455 | $410 | $599 | $774 |
| Net Interest Expense (MM) | $178 | $233 | $210 | $197 | $219 | $287 |
| Depreciation & Amort. (MM) | $291 | $447 | $443 | $476 | $503 | $585 |
| Diluted Shares (MM) | 118 | 171 | 175 | 183 | 200 | 215 |
| Free Cash Flow (MM) | $401 | $647 | $594 | $926 | $1,004 | $1,114 |
| Current Ratio | 1.0 | 1.0 | 1.0 | 1.0 | 1.0 | 1.0 |
| Total Debt (MM) | $6,379 | $6,054 | $6,696 | $6,792 | $7,878 | $8,288 |
| Net Debt / EBITDA | 8.44 | 7.51 | 7.26 | 7.24 | 6.83 | 5.84 |
W. P. Carey has growing revenues and no capital expenditures, decent operating margins with a stable trend, and irregular cash flows. However, the firm suffers from declining EPS growth and a highly leveraged balance sheet.
