W.P. Carey’s Earnings Quality Improved by CPA:17 Merger, CEO Says

Jason Fox, CEO of W.P. Carey Inc. (NYSE: WPC), participated in a video interview at Nareit’s REITworld: 2018 Annual Conference in San Francisco.

Fox said that after W.P. Carey’s $5.9 billion merger with one of its managed funds, Corporate Property Associates 17 – Global Inc. (CPA:17), the company’s earnings quality will improve in three ways: with strategic benefits, portfolio benefits, and an improved balance sheet.

“We’re buying a very high-quality portfolio … one that we know very well,” Fox said. “Because we’ve managed it for such a long time, there’s really zero integration risk, which is quite rare for a merger of this size.”

Fox also said that diversification has been a core part of W.P. Carey’s business for a long time. “It helps us really insulate ourselves from any downturn in any one particular industry or geography,” he said.

Heading into 2019, Fox added that diversification will also help the company grow.

“We can allocate capital to where we see the best risk return opportunities across tenant industries, asset classes, and geographies,” he said. “We’ve seen great spread opportunities given the low cost of borrowing.”