Is WP Carey Buying Corporate Property Associates

Is WP Carey Buying Corporate Property Associates


USA – It is being revealed that WP Carey is buying Corporate Property Associates and if the deal goes through, WP Carey might be paying $6 billion for this deal. Corporate Property Associates, which is a commercial property owner, is well known in the US and if the deal goes through, it would provide a big boost to the commercial market value in the US.

The company’s portfolio is already spread in Europe and North America and this purchase will include industrial facilities as well as office buildings. The company already has a long list of satisfied clients that further speaks about the legitimacy of the company including The New York Times, Hellweg, which is a German home improvement store and Marriott International.

As a part of this deal, Corporate Property Associates 17 stockholders will get 0.160 shares of WP Carey for every share held. This is equal to $10.72 per share if we base it on the closing price of the company on Friday.

With both hands joining in, the combined value of the company will be close to $17.3 billion. The company’s market capitalization will be valued at $11 billion, revealed WP Carey.  This value makes the company fall behind Realty Income Corp, which is the second biggest net lease REIT in the US with a market value of $15 billion.

The net lease REITs are currently collecting a portion of or all of the taxes, along with the maintenance costs, which are paid normally by those who own the property. This allows them to have a low-cost structure in general.

Most of WP Carey’s portfolio is made up by office buildings. In fact, office properties hold the biggest chunk of their portfolio at 26%. Other than this, the industrial facilities account for about 24% of the total combined company, whereas the retail properties and warehouses account for 19%.

When the terms of the offer were being revealed, it was said that the CPA 17 might evaluate different proposals and then enter in a phase of negotiations with the 3rd parties for at least 30 days. CPA 17 already had full or partial ownership interests in about 411 properties that totaled to 44.4 million square feet; this was given as of December 31st.

On the other hand, WP Carey already has a portfolio of 886 commercial real estate properties that cover about and roughly 85 million square feet.

The news and terms clearly reveal that this is a big move and step towards buying further property by WP Carey and the fact that the company is trying hard to increase its portfolio consistently. The deal is quite big and significant but going through this deal means that WP Carey would be spending about $6 billion of its income on the purchase and this purchase could mean significant things for the company, depending on what they end up doing with the purchase. The news has been confirmed by WP Carey so we can conclude that it is official.

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