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    WPC
    Earnings call· Mar 2026(Q1 FY26)

    W. P. Carey Q1 FY26 earnings call WPC

    Apr 29, 2026 Source

    Executive summary

    W. P. Carey Inc. Q1 FY26 — Strong Investment Activity and Raised Guidance

    W. P. Carey delivered a strong first quarter, marked by robust investment activity and proactive capital raising, leading to an upward revision of full-year guidance for both investment volume and AFFO per share. The company continues to benefit from its diversified portfolio and strategic capital deployment, pre-funding its 2026 investment needs. Management remains confident in achieving double-digit total shareholder returns for the year.

    Highlights

    5

    • Raised full-year investment volume guidance by $250 million to a range of $1.5 billion to $2 billion.

    • Increased full-year AFFO per share guidance to $5.16-$5.26, implying 4.8% growth at the midpoint.

    • Completed $680 million in investments year-to-date, with a strong pipeline providing visibility into over $1 billion.

    • Achieved 103% recapture of prior rents on re-leasing activity, adding over 5 years of weighted average lease term.

    • Secured $2.8 billion in total liquidity, including $653 million in anticipated net proceeds from unsettled forward equity.

    Concerns

    3

    • Comprehensive same-store rent growth of 1% for the quarter trailed contractual growth of 2.4% due to vacancy impacts.

    • Non-reimbursed property expenses included $1.2 million in demolition costs, with additional costs expected in Q2.

    • G&A expense of $27.3 million for Q1 was the highest of the year due to payroll taxes.

    Guidance & targets

    11
    CategoryTargetConfidence
    Full-year Investment Volume
    $1.5 billion to $2 billion
    high materiality
    High
    Full-year Average Cap Rate
    around 7.5%
    medium materiality
    High
    Full-year AFFO per Share
    $5.16 and $5.26
    high materiality
    High
    Full-year Contractual Same-Store Rent Growth
    mid-2% range
    medium materiality
    High
    Full-year Potential Rent Loss Assumption
    $8 million and $12 million
    medium materiality
    High
    Q2 Other Lease-Related Income
    in line with the first quarter
    low materiality
    High
    Full-year Other Lease-Related Income
    low to mid-$30 million range
    low materiality
    High
    Full-year Non-reimbursed Property Expenses
    $56 million and $60 million
    medium materiality
    High
    Full-year G&A Expense
    $103 million and $106 million
    medium materiality
    High
    Full-year Weighted Average Interest Rate on Debt
    low to mid-3% range
    medium materiality
    High
    Dividend Growth
    in line with our AFFO growth
    high materiality
    High

    Operational metrics

    27
    Investment Volume
    $680 million
    YTD Q1 FY26

    So far this year, we completed investments totaling approximately $680 million.

    Average Cap Rate on Closed Transactions
    7.2%
    YTD Q1 FY26

    with closed transactions averaging 7.2%.

    Average Yield on New Deals
    around 9%
    Q1 FY26

    As a result, we're still achieving average yields of around 9% over long lease terms.

    Capital Projects Completed
    4
    Q1 FY26

    We completed 4 capital projects during the quarter, totaling $68 million, which are included in our year-to-date investment volume

    Retained Cash Flow
    around $300 million
    FY26

    As a reminder, we also expect to generate around $300 million of retained cash flow this year, providing an additional source of equity capital.

    AFFO per Share
    $1.30up $0.13 or 11.1% YoY
    Q1 FY26

    AFFO per share was $1.30 for the first quarter, which represented a $0.13 or 11.1% increase compared to the first quarter of last year.

    Disposition Gross Proceeds
    $163 million
    Q1 FY26

    First quarter asset sales generated gross proceeds totaling $163 million.

    Self-Storage Exit Aggregate Proceeds
    approximately $860 million
    Program-to-date

    With that, we've now completed our exit from operating self-storage, further simplifying our business and generating aggregate proceeds of approximately $860 million at an average cap rate just below 6%

    Fixed Rent Escalations on New Investments
    2.8%
    Q1 FY26

    while the other 1 quarter had fixed rent escalations averaging 2.8% annually.

    Other Lease-Related Income
    $10.5 million
    Q1 FY26

    Other lease-related income for the first quarter was $10.5 million in line with our expectations

    Non-reimbursed Property Expenses
    $14.6 million
    Q1 FY26

    Non-reimbursed property expenses totaled $14.6 million for the quarter. which includes approximately $1.2 million of demolition costs related to redevelopment work

    G&A Expense
    $27.3 million
    Q1 FY26

    G&A expense totaled $27.3 million for the first quarter, in line with our expectations since the first quarter tends to be the highest of the year for G&A given the timing of payroll taxes.

    Senior Unsecured Eurobond Issuance
    EUR 1 billion
    Q1 FY26

    In February, we issued EUR 1 billion of senior unsecured notes, comprising to EUR 500 million tranches with coupon rates of 3.25% on a long 5-year maturity and 3.75% on a long 9-year maturity.

    Canadian Dollar Term Loan
    new
    Q1 FY26

    In March, we amended our credit agreement, replacing the euro term loan I just mentioned with the new Canadian dollar term loan at a current all-in rate of approximately 3.1%

    Revolver Pricing Grid Improvement
    5 basis points
    Q1 FY26

    At the same time, we were able to improve our overall revolver pricing grid by 5 basis points at all levels, incrementally lowering our cost of debt.

    Forward Equity Shares Sold
    6.9 million
    Q1 FY26

    We also successfully executed in the equity markets during the quarter, selling 6.9 million shares on a forward basis, representing total gross proceeds of $497 million.

    Forward Equity Shares Settled
    3.45 million
    Q1 FY26

    At the end of the first quarter, we settled 3.45 million shares under forward sale agreements for net proceeds totaling $247 million

    Forward Equity Shares Remaining to be Settled
    9.7 million
    As of Q1 FY26 end

    leaving us with 9.7 million shares remaining to be settled, representing anticipated net proceeds of $653 million as of the end of March.

    Total Liquidity
    approximately $2.8 billion
    As of Q1 FY26 end

    Driven by our capital markets activity, we ended the first quarter with substantial liquidity totaling approximately $2.8 billion, including availability on our credit facility, cash on hand and unsettled forward equity.

    Remaining Debt Maturities
    $350 million
    FY26

    Our remaining debt maturities this year are minimal, primarily comprising the $350 million of U.S. bonds we have maturing in October.

    Weighted Average Interest Rate on Debt
    3.1%
    Q1 FY26

    The weighted average interest rate on our debt remains low at 3.1% for the first quarter

    Quarterly Dividend per Share
    $0.93up 4.5% YoY
    Q1 FY26

    In March, we increased our quarterly dividend 4.5% year-over-year to $0.93 per share

    Dividend Payout Ratio
    72%
    Q1 FY26

    maintaining a healthy payout ratio of 72%.

    Poland Portfolio Exposure
    about 5%
    Current

    So yes, good market for us. I think we'll stay active there, but we're certainly mindful that it's become about 5% of our portfolio.

    Lease Expirations
    1.8%
    FY26

    2026 is very manageable. It's about 1.8% by ABR.

    Lease Expirations
    3.5%
    FY27

    In 2027, we've got about 3.5% expiring.

    Net Leased Marriott Lease Expiration
    $5 million
    FY25

    One item to note is we have the expiration of the final tranche of net leased [ Marriotts ] in 2025, that's around $5 million of ABR.

    Industry KPIs

    8
    MetricValueDetails
    Occupancy rate98.1%%
    Disposition volume$163 millionUSD
    Same store noi growth2.4%%
    Investment volume closed$680 millionUSD
    Net debt adjusted EBITDA5.3xx
    Ffo core ffo normalized ffo per share$1.30USD
    Development pipeline under construction$280 millionUSD
    Lease renewal spread re leasing recapture103%%

    Orderbook & backlog

    2
    Investment Pipeline (Advanced Stages)over $0.5 billionQ1 FY26

    Includes a large industrial portfolio sale leaseback in final stages of closing.

    Capital Projects in Process$280 millionQ1 FY26

    Total value of 11 capital projects delivering over the next 12 months.

    Deals & partnerships

    2
    Go AutoSale leaseback of a portfolio of auto dealerships in Greater Vancouver area.

    Go Auto is the second largest automotive dealership group in Canada and now ranks among W.P. Carey's top 25 largest tenants by ABR. Deal included CPI-based rent escalations.

    RobinAcquisition of a deal in Poland.

    Robin is one of the largest 3PL operators in Poland, a market leader. Deal included CPI-based rent escalations.

    Capital programs

    1
    Carey Tenant Solutions Projectsunderway$280 million
    Period spend: $180 million
    Start: Ongoing

    Benefit: Incrementally higher cap rates, extended lease terms, enhanced strategic importance of assets.

    Currently, and we provide a lot of detail on our sub around this. We have about $280 million of projects in process and about $180 million of that $20 million will complete this year.

    Risks & headwinds

    4
    Geopolitical Tensions and Higher Energy Prices in EuropeOngoing

    Not quantified

    Mitigation: Diversified portfolio with large, well-capitalized tenants; no noticeable impact to date.

    Potential for Increased Competition in Industrial Net LeaseFuture

    Not quantified

    Mitigation: Company's scale, experience, execution, and track record differentiate it; competitive advantages outweigh increased capital flows.

    Over-levered Balance Sheet of Cornerstone TenantOngoing

    60 basis points of ABR

    Mitigation: W. P. Carey owns very critical real estate for Cornerstone; no earnings impact expected despite potential restructuring.

    Vacancy Impact on Comprehensive Same-Store Rent GrowthQ1 FY26, potentially ongoing

    1% comprehensive vs 2.4% contractual in Q1

    Mitigation: Actively re-tenanting or disposing of vacant assets; expected to improve further.

    What to watch in Q2 FY26

    5

    Investment Volume Progress

    Next quarter
    Current$680 million year-to-date
    TargetProgress towards $1.5 billion to $2 billion full-year guidance

    Why it matters

    Investment volume is a key driver of AFFO growth and reflects the company's ability to deploy capital effectively.

    Given our activity and outlook, we've raised our guidance range for full year investment volume by $250 million to between $1.5 billion and $2 billion.

    Q&A highlights

    8

    Are global macro events and the conflict in Iran impacting the European portfolio or causing concern?

    Management stated no noticeable impact to date, citing the diversification and large, well-capitalized tenants in their portfolio who can withstand cycles.

    “No. I guess there's a little bit more potential for uncertainty in Europe, given higher energy prices there, but it hasn't impacted us.”

    asked by Michael Goldsmith · answered by Jason Fox

    2 min read6 chapters

    Detailed Narrative

    01

    Investment Strategy and Pipeline

    W. P. Carey commenced the year with significant investment activity, deploying $680 million year-to-date, primarily in warehouse and industrial properties (60%) and retail (40%). The company maintains a robust pipeline exceeding $0.5 billion, including a large industrial portfolio sale-leaseback nearing closure, providing clear visibility into over $1 billion in total investments. This strong deal flow, coupled with strategic capital raising, led to an upward revision of full-year investment volume guidance to $1.5 billion to $2 billion.

    02

    Capital Markets Execution and Liquidity

    The company proactively strengthened its balance sheet by accessing nearly $2 billion in capital during Q1. This included a EUR 1 billion senior unsecured Eurobond offering at attractive coupons (3.25% and 3.75%) and a Canadian dollar term loan at approximately 3.1%. Additionally, W. P. Carey sold 6.9 million shares on a forward basis, generating $497 million in gross proceeds, effectively pre-funding its 2026 investment needs and bolstering total liquidity to $2.8 billion.

    03

    Portfolio Performance and Rent Escalations

    The portfolio demonstrated solid performance with 98.1% occupancy and contractual same-store rent growth of 2.4% year-over-year. New investments continue to feature strong rent escalations, with approximately three-quarters of Q1 volume incorporating CPI-linked increases and the remainder having fixed escalations averaging 2.8% annually. The company noted that CPI-based leases are more customary in Europe, where a significant portion of recent investments occurred.

    04

    Asset Management and Dispositions

    W. P. Carey completed its exit from operating self-storage with the sale of 11 properties for $75 million, bringing aggregate proceeds from this strategy to $860 million. The company maintains a flexible disposition strategy for the year, targeting $250 million to $750 million, with potential sales of hotels and a student housing property under evaluation. Re-leasing activity resulted in a 103% recapture of prior rents, extending lease terms by over 5 years.

    05

    Credit Quality and Rent Loss

    The company lowered its full-year potential rent loss assumption to $8 million-$12 million, reflecting stable credit performance across the portfolio and strong rent collections. While a few tenants remain on the watch list, management expressed confidence in the criticality of their real estate and the overall diversification of the portfolio to mitigate potential impacts.

    06

    Carey Tenant Solutions Initiative

    The long-standing program for build-to-suits, expansions, and redevelopments, now branded as Carey Tenant Solutions, continues to be a proprietary source of deal flow. The company has $280 million in projects in process, with $180 million expected to complete this year, generating incrementally higher cap rates and extending lease terms.

    AI-generated summary of the company’s earnings call. Not investment advice.