Jason Fox, CEO of W.P. Carey Inc. (NYSE: WPC), participated in a video interview in conjunction with Nareit’s REITweek: Virtual Investor Conference (held June 2-4).
Fox outlined W.P. Carey’s emphasis on diversification as the best way to build a net lease portfolio.
Diversification provides a wider opportunity set for external growth as well as downside protection, Fox explained. The benefits of diversification were reflected in strong April and May rent collection of 96% and 95%, he said.
“We think the COVID-19 impact will serve as a catalyst for investors to refocus and place a higher value on broad diversification and view it as the best approach for net lease,” Fox said.
Based on the initial performance of its tenants and the conservative positioning of the balance sheet—which includes $1.7 billion of liquidity on a revolver and limited near-term debt maturities— “we’re confident that we’ll continue to have sufficient liquidity and importantly, flexibility, to navigate the environment ahead,” Fox said.
W.P. Carey is also actively evaluating opportunities right now, Fox said. “We think we’ll be more active in the second half, probably more focused on sale-leasebacks likely in warehouse and industrial properties,” he noted.
Fox also expects good opportunities within the existing portfolio. “Generally speaking, we have seen some of our best opportunities during times of crisis and we’re well positioned to take advantage of that,” he said.