W.P. Carey Increases Portfolio with $119M in Buys in Southwest and Midwest

NEW YORK CITY—W.P. Carey Inc.’s head of investments Gino Sabatini told Globest.com’s Erika Morphy earlier this month that now is a good time for net lease REITs to make acquisitions. Today, he proved he wasn’t kidding.

The New York City-based firm that specializes in corporate sale-leasebacks, built to suits and purchases of single-tenant net lease properties, reports today that it has made approximately $119 million in new acquisitions/investments.

The company has spent $41 million to acquire a 550,000-square-foot distribution facility leased to Orgill, the world’s largest independent hardware distributor, in Kilgore, TX. The complex serves as its distribution center for Texas, Oklahoma, Louisiana and southern Arkansas. W. P. Carey has also agreed to provide up to an additional $14 million for a 329,000-square-foot expansion to the existing facility, with completion of the project expected mid-2019. The facility is triple-net leased for a period of 25 years, which will reset upon completion of the expansion, W.P. Carey reports.

In another deal, W.P. Carey has paid $33 million in the sale-leaseback of a six-property industrial portfolio with the largest independent waste company in Illinois and Wisconsin. The transaction includes five transfer stations/material recovery facilities and a corporate headquarters located in the greater Chicago area. The portfolio is under a master lease on a triple-net basis for a period of 25 years with annual CPI-based rent escalations.

In its final recent deal, W.P. Carey has made a $31 million investment in distribution, warehouse and global headquarters facilities leased to Brake Parts Inc., a multinational manufacturer and distributor of aftermarket automotive products. The properties are located in the greater Chicago area and include Brake Parts’ largest U.S. distribution facility. They are triple-net leased with a remaining lease term of 11 years and fixed annual rent escalations.

W.P. Carey’s Sabatini says that the firm’s latest deals illustrate “our proven ability to structure and close a diverse set of transactions that meet the critical year-end timing and closing requirements of our tenants and their sponsors. In today’s competitive environment, W. P. Carey’s access to capital and diversified investment approach enables us to invest in a range of property types, tenant industries and geographies.”

In an exclusive interview with Globest.com in early December, Sabatini was bullish on economic conditions and the opportunities the market currently offers that makes him believe that W.P. Carey will be a net acquirer in 2019.

“We see opportunities from multinational companies all the time where they are looking for us to close on a simultaneous basis and they’ll lease back with four or five facilities in different countries all around the world. I see no reason for that to change,” Sabatini said.

Last month, W.P. Carey announced the acquisition of a portfolio of four automotive retail and service sites, totaling approximately 201,000 square feet in the Netherlands for approximately $33 million. The portfolio is triple-net leased to Van Mossel Automotive Group, one of the largest Dutch automotive retail and leasing services providers, for a term of 17 years, and was completed in an off-market transaction.

In late October, W.P. Carey completed the $5.9-billion merger deal with one of its managed funds, Corporate Property Associates 17 – Global Inc. The 45-year-old REIT has an enterprise value of approximately $17 billion and a portfolio of operationally-critical commercial real estate that includes 1,186 net lease properties covering approximately 133 million square feet.