W.P. Carey announced today that it is exiting the office market through a spin-off and asset sales.

"While we've meaningfully reduced our office exposure in recent years, the plan we've announced this morning vastly accelerates our exit from office — enhancing the overall quality of our portfolio, improving the quality and stability of our earnings, and incrementally benefiting our credit profile," said W. P. Carey CEO Jason Fox in prepared remarks. "Ultimately, with a clear path to monetizing our legacy office assets, we believe we will achieve a lower cost of capital and be better positioned for long-term value creation for our shareholders."

The spin-off part, which does not require shareholder approval, is a new publicly traded REIT called Net Lease Office Properties (NLOP) comprising 59 office properties, totaling 9.2 million leasable square feet primarily leased on single-tenant net lease basis to corporate tenants. The portfolio consists of 62 corporate tenants in a variety of industries and generates more than $141 million in annual base rent. The spin-off is expected to close around November 1, 2023.