Update 8/2/22 – W. P. Carey has completed its acquisition of CPA:18, adding 65 self-storage facilities it previously managed to its owned portfolio. The transaction’s closing “concludes the company’s exit from the non-traded REIT business, incrementally simplifying the company and enhancing its earnings quality,” officials said in a press release.

As expected, CPA:18 stockholders received 0.0978 shares of W. P. Carey common stock, plus $3 of cash for each share of CPA:18 common stock. In connection with the transaction, W. P. Carey also indicated it expects to issue 13.8 million shares of its common stock to increase its equity market capitalization to approximately $18 billion.

3/2/22 – W. P. Carey Inc., a global net-lease real estate investment trust (REIT) that owns more than 180 self-storage facilities nationwide, has agreed to acquire Corporate Property Associates 18 – Global Inc. (CPA:18), a publicly registered, non-traded REIT it already manages. The $2.7 billion cash-and-stock deal will bring fresh self-storage properties and other diversified assets into the W. P. Carey portfolio. The transaction is expected to close during the third quarter, according to a press release.

As of Dec. 31, the CPA:18 portfolio included full or partial ownership in 65 self-storage facilities and four student-housing projects (one operating and three in development) that total 5.1 million square feet. It also has ownership interests in 53 triple-net-lease properties comprising 10.4 million square feet, the release stated.

Under the merger agreement, W. P. Carey has offered CPA:18 shareholders 0.0978 of a share of W. P. Carey common stock, plus $3 of cash, for each share of CPA:18 common stock. The offer had an implied value of $10.45 per chare as of Feb. 25, the release stated. W. P. Carey expects to fund the purchase with existing liquidity and net proceeds from the sale of some CPA:18 assets prior to closing. Once the transaction is complete, W. P. Carey stockholders will own about 93% of the combined company, with CPA:18 stockholders owning 7%.

“This acquisition presents a unique and compelling opportunity to acquire assets we know extremely well that are aligned with our current portfolio, in a transaction that’s immediately accretive to our real estate AFFO [adjusted funds from operations] per share,” said Jason Fox, CEO of W. P. Carey. “We expect this accretion to largely replace the income we generated from managing CPA:18, with higher-quality lease revenues; and we see the potential for additional upside. Furthermore, it will essentially conclude our exit from investment management, further simplifying our business and enhancing our scale.”

CPA:18 has a 30-day “go shop” window until March 30, which allows it to negotiate alternative proposals with third parties.

W.P. Carey ranked No. 10 on the 2021 Inside Self-Storage Top-Operators List of facility owners, with 189 properties comprising more than 13.4 million rentable square feet. Self-storage is the smallest segment of the company’s portfolio at 4.8% of its holdings. In contrast, industrial/warehouse properties comprise 49.7%, followed by office (19.5%) and retail (17.6%), according to the company website.

Based in New York, W. P. Carey has an enterprise value of approximately $22 billion. Its diversified portfolio of commercial real estate includes 1,304 net-lease properties comprising approximately 156 million square feet.

Sources:
PR Newswire, W. P. Carey Inc. Completes $2.7 Billion Merger with CPA:18
Reuters, REIT WP Carey to Buy Corporate Property Associates 18 in $2.7 Bln Deal
PR Newswire, W. P. Carey Inc. and CPA:18 - Global Announce Proposed Merger
W. P. Carey, W. P. Carey Announces Proposed Merger with CPA:18 in a $2.7 Billion Transaction