06/27/2022 | by
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1315_Nareit Testimonials_REITweek_Fox_2022-06-24_v4

Jason Fox, CEO of W.P. Carey Inc. (NYSE: WPC), participated in a video interview in conjunction with Nareit’s REITweek: 2022 Investor Conference in New York on June 7-9.

Fox discussed how the REIT is positioned for the current environment of higher inflation and potential recession. He noted that W.P. Carey offers “a unique combination of growth and downside protection,” with growth coming from external acquisitions as well as from embedded opportunities within the portfolio.

Of existing leases, 99% have rent increases, Fox said, and 58% of that portion are tied to inflation.

“We really expect to see meaningful upside in our portfolio; tailwinds from inflation that will outpace all of our peers. That should lead to record same store growth for us in 2022,” Fox said. W.P. Carey has already spoken of growth above 3% for this year, he said, which is typically twice what it has seen historically. “Given the lag of how inflation flows through, we should see even more upside, perhaps above 4%, in 2023.”

Meanwhile, W.P. Carey offers downside protection through diversification, as well as by focusing on the quality of underwriting, and tenant credit, Fox said.

Fox commented on the REIT’s overweight focus on industrial, which makes up about 50% of its portfolio. The company is also focusing on essential retail, mainly in Europe, where it believes fundamentals are stronger. More recently, W.P. Carey has been exploring U.S. retail as a potential new vertical, he noted.

Fox also discussed the company’s planned merger with CPA:18, which is expected to close in early August. He noted that there is “no integration risk whatsoever,” and pointed to the upside potential, especially from self-storage assets.