PART I — FINANCIAL INFORMATION [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) W. P. Carey Inc.'s unaudited consolidated financial statements for Q2 and H1 2025 and 2024 are presented, covering Balance Sheets, Income, Comprehensive Income, Equity, Cash Flows, and detailed notes [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) Total assets increased to approximately **$18.0 billion** as of June 30, 2025, from **$17.5 billion** at year-end 2024, driven by net real estate investments, with total debt rising to **$8.6 billion** from **$8.0 billion** Consolidated Balance Sheet Summary (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$17,998,197** | **$17,535,024** | | Net investments in real estate | $15,340,146 | $14,580,475 | | Cash and cash equivalents | $244,831 | $640,373 | | **Total Liabilities** | **$9,772,865** | **$9,100,900** | | Debt, net | $8,635,985 | $8,039,002 | | **Total Equity** | **$8,225,332** | **$8,434,124** | [Consolidated Statements of Income](index=6&type=section&id=Consolidated%20Statements%20of%20Income) Q2 2025 total revenues increased to **$430.8 million**, but Net Income Attributable to W. P. Carey significantly decreased to **$51.2 million** (or **$0.23 per diluted share**) from **$142.9 million** (or **$0.65 per diluted share**), primarily due to higher other losses Q2 and H1 2025 vs 2024 Income Statement Highlights (in thousands, except EPS) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $430,777 | $389,672 | $840,635 | $779,470 | | Net Income Attributable to W. P. Carey | $51,220 | $142,895 | $177,044 | $302,118 | | Diluted Earnings Per Share | $0.23 | $0.65 | $0.80 | $1.37 | [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For H1 2025, net cash from operating activities decreased significantly to **$677.2 million** from **$1.26 billion** in H1 2024, mainly due to lower proceeds from sales-type leases, with investing activities using **$541.8 million** and financing activities using **$420.3 million** Six Months Ended June 30 Cash Flow Summary (in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $677,196 | $1,256,595 | | Net Cash Used in Investing Activities | ($541,846) | ($387,164) | | Net Cash Used in Financing Activities | ($420,252) | ($318,016) | | Net (decrease) increase in cash | ($264,552) | $537,699 | [Notes to Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail accounting policies and financial activities, covering business organization, real estate acquisitions and dispositions, finance receivables, debt structure, fair value measurements, and subsequent events - The company operates as a single reportable segment, investing in operationally-critical, single-tenant commercial real estate properties, primarily under long-term, triple-net leases[34](index=34&type=chunk) - During the first six months of 2025, the company acquired **81 properties** for total capitalized costs of **$542.7 million**[63](index=63&type=chunk)[65](index=65&type=chunk) - In the first six months of 2025, the company sold **55 properties** for net proceeds of **$487.3 million**, recognizing a net gain of **$96.6 million**[182](index=182&type=chunk) - Subsequent to the quarter end, in July 2025, the company completed **four acquisitions** totaling **$227.2 million** and issued **$400.0 million** of **4.650% Senior Notes due 2030**[185](index=185&type=chunk)[186](index=186&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=37&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance, highlighting significant developments, consolidated results, and a detailed portfolio overview, covering revenue and expense drivers, liquidity, capital resources, and non-GAAP AFFO reconciliation [Significant Developments](index=37&type=section&id=Significant%20Developments) In H1 2025, the company actively managed capital and balance sheet, acquiring **$800.6 million** in investments, disposing of **55 properties** for **$487.3 million**, repaying **$450 million** in senior notes, and refinancing a **€500.0 million** term loan - Key activities for the first six months of 2025 include: acquired **ten investments** totaling **$800.6 million**; disposed of **55 properties** for net proceeds of **$487.3 million**; repaid **$450 million** of **4.000% Senior Notes due 2025** at maturity; and refinanced a **€500.0 million** term loan, extending maturity to April 2029[195](index=195&type=chunk)[192](index=192&type=chunk)[196](index=196&type=chunk) [Consolidated Results](index=39&type=section&id=Consolidated%20Results) Total revenues increased in Q2 and H1 2025 due to net investment activity and rent escalations, but Net Income decreased significantly from non-cash unrealized losses, while Adjusted Funds from Operations (AFFO) increased, reflecting core operational growth Consolidated Results Summary (in thousands) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Total revenues | $430,777 | $389,672 | $840,635 | $779,470 | | Net income attributable to W. P. Carey | $51,220 | $142,895 | $177,044 | $302,118 | | AFFO attributable to W. P. Carey | $282,670 | $257,099 | $540,490 | $508,991 | - The decrease in Net Income was primarily due to non-cash unrealized losses on the company's investment in shares of Lineage, higher losses from foreign debt remeasurement, and a higher allowance for credit losses[200](index=200&type=chunk) - The increase in AFFO was driven by the accretive impact of net investment activity, rent escalations, and leasing activity[201](index=201&type=chunk) [Portfolio Overview](index=40&type=section&id=Portfolio%20Overview) As of June 30, 2025, the portfolio comprised **1,600 net-leased** and **72 operating properties**, with **98.2% occupancy** for net-leased assets, diversified geographically and by property type, with **60.2% of ABR** from the U.S. and industrial/warehouse as largest types Portfolio Summary as of June 30, 2025 | Metric | Value | | :--- | :--- | | Number of net-leased properties | 1,600 | | Occupancy (net-leased) | 98.2% | | Weighted-average lease term | 12.1 years | | ABR (in thousands) | $1,469,552 | - The top ten tenants represent **19.4% of total ABR**, with the largest tenant, Extra Space Storage, Inc., accounting for **2.7%**[206](index=206&type=chunk) Portfolio Diversification by Property Type (by ABR) | Property Type | ABR Percent | | :--- | :--- | | Industrial | 37.7% | | Warehouse | 26.2% | | Retail | 22.3% | | Other | 13.8% | [Results of Operations](index=46&type=section&id=Results%20of%20Operations) Lease revenues increased from acquisitions and rent escalations, while 'Other Gains and (Losses)' shifted to a significant loss due to a **$69.0 million** non-cash unrealized equity investment loss and foreign currency movements, and interest expense rose slightly from higher debt balances - Lease revenues from existing net-leased properties increased by **$18.6 million** in Q2 2025 and **$36.2 million** in H1 2025 compared to the prior year, primarily due to contractual rent escalations and positive leasing activity[221](index=221&type=chunk)[222](index=222&type=chunk) - Other gains and (losses) shifted from a **$2.5 million** gain in Q2 2024 to a **$148.8 million** loss in Q2 2025, mainly caused by a **$69.0 million** non-cash unrealized loss on the investment in Lineage Logistics and a **$66.4 million** loss on foreign currency exchange rate movements[247](index=247&type=chunk) - Interest expense increased by **$6.6 million** for the first six months of 2025 compared to 2024, driven by higher outstanding debt balances, partially offset by lower rates on certain term loans[248](index=248&type=chunk) [Liquidity and Capital Resources](index=54&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with **$244.8 million** cash, **$1.3 billion** available credit, and **$135.2 million** for 1031 exchanges as of June 30, 2025, with **89% fixed-rate debt**; future cash needs are funded through operations, dispositions, and capital markets - As of June 30, 2025, the company's primary cash resources included: Cash and cash equivalents: **$244.8 million**; Funds for 1031 Exchange transactions: **$135.2 million**; Available capacity on Unsecured Revolving Credit Facility: **~$1.3 billion**[267](index=267&type=chunk) Debt Composition as of June 30, 2025 | Debt Type | Percent of Total Debt | Weighted-Average Interest Rate | | :--- | :--- | :--- | | Fixed rate | 89% | 3.0% | | Variable rate | 11% | 4.3% | | **Total debt** | **100%** | **3.2%** | - Net cash from operating activities decreased by **$579.4 million** in H1 2025 compared to H1 2024, mainly due to lower proceeds from sales of net investments in sales-type leases[259](index=259&type=chunk) [Supplemental Financial Measures](index=56&type=section&id=Supplemental%20Financial%20Measures) This section defines and reconciles non-GAAP FFO and AFFO to GAAP Net Income, used by management to evaluate operating performance, with Q2 2025 AFFO at **$282.7 million**, an increase from Q2 2024 Reconciliation of Net Income to FFO and AFFO (in thousands) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income attributable to W. P. Carey | $51,220 | $142,895 | $177,044 | $302,118 | | FFO (as defined by NAREIT) | $124,824 | $259,038 | $344,227 | $523,775 | | AFFO attributable to W. P. Carey | $282,670 | $257,099 | $540,490 | $508,991 | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=59&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company manages interest rate risk through fixed-rate debt and derivatives, and foreign currency risk from international investments via local currency financing and hedging instruments like foreign currency collars - A **1% change** in annual interest rates would impact interest expense on unhedged variable-rate debt by **$5.9 million** for USD-denominated debt and **$2.5 million** for EUR-denominated debt[292](index=292&type=chunk) - A **1% change** in the EUR/USD exchange rate would cause a corresponding change of **$2.2 million** in the projected estimated cash flow from consolidated foreign operations over the next 12 months[294](index=294&type=chunk) - The company uses foreign currency collars and local currency debt to hedge its exposure to foreign currency fluctuations[294](index=294&type=chunk)[296](index=296&type=chunk) [Item 4. Controls and Procedures](index=61&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded the company's disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective at a reasonable level of assurance as of June 30, 2025[300](index=300&type=chunk) - No changes in internal control over financial reporting occurred during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, internal controls[301](index=301&type=chunk) PART II — OTHER INFORMATION [Item 6. Exhibits](index=62&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including supplemental indentures for new debt offerings, Sarbanes-Oxley Act certifications by the CEO and CFO, and interactive data files in XBRL format - The report includes exhibits such as the Twelfth Supplemental Indenture for the **4.650% Senior Notes due 2030**, certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act, and XBRL data files[304](index=304&type=chunk) [Signatures](index=63&type=section&id=Signatures) The report is duly signed and authorized by the company's Chief Financial Officer and Chief Accounting Officer as of July 30, 2025 - The Form 10-Q was signed on **July 30, 2025**, by ToniAnn Sanzone, Chief Financial Officer, and Brian Zander, Chief Accounting Officer[307](index=307&type=chunk)

Financial Data and Key Metrics Changes - The company reported an AFFO per share of $1.28 for the second quarter, representing a 9.4% increase year-over-year, driven by accretive investment activity and sector-leading rent growth [16] - The full-year AFFO guidance range has been raised to between $4.87 and $4.95 per share, implying a 4.5% year-over-year growth at the midpoint [16][27] - Contractual same-store rent growth for the second quarter was 2.3% year-over-year, with comprehensive same-store rent growth at 4% [17] Business Line Data and Key Metrics Changes - The majority of second-quarter investments were in warehouse and industrial properties, which also represent the bulk of the investment pipeline [10] - The average yield on investments year-to-date is in the mid-nine percent range, one of the highest in the net lease sector [8][10] - The company has closed approximately $550 million in deals during the second quarter at an initial weighted average cap rate of 7.5% [8] Market Data and Key Metrics Changes - Investments were primarily concentrated in the U.S., with a notable increase in deal volume in Europe during the third quarter [10] - The company has identified a strong pipeline of $700 million in advanced-stage deals, with expectations for continued favorable market conditions [9] Company Strategy and Development Direction - The company is focused on maintaining strong investment volume and has raised its investment guidance for the year, expecting to complete $1.4 billion to $1.8 billion in investments [16][27] - The strategy includes accretive sales of non-core assets, with an expectation of achieving over 100 basis points of spread between asset sales and new investments [12] - The company aims to continue building its portfolio through capital projects, including build-to-suits and expansions, with nearly $300 million of projects underway [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining momentum despite broader economic uncertainties, noting no unforeseen disruptions in business or tenant credit events [7][26] - The company is monitoring trade policy developments but has not seen direct impacts on its portfolio [14][56] - Management believes the foundation built this year positions the company well for long-term growth and value creation for shareholders [27] Other Important Information - The company declared a dividend of $0.90 per share, representing a 3.4% increase over the prior year, with a payout ratio of approximately 73% of AFFO per share [25] - The company ended the second quarter with liquidity of about $1.7 billion and a low weighted average cost of debt at 3.1% [23][24] Q&A Session Summary Question: Expectations for comprehensive income in the second half of the year - Management expects comprehensive income to normalize in the back half of the year, potentially tracking slightly above contractual levels [29][31] Question: Transition of self-storage operating portfolio to net lease structure - The company has flexibility regarding the remaining self-storage portfolio and may lean towards more sales or conversions to net lease structures [33] Question: AFFO guidance implications for the second half of the year - Management highlighted that the second quarter's elevated other lease-related income is expected to normalize, impacting AFFO guidance [42][43] Question: Credit quality of tenants and market conditions - Management noted improved credit quality among tenants and a stable transaction market, which is driving increased opportunities [78] Question: Impact of new entrants in the net lease market - Management acknowledged increased competition but remains confident in its ability to compete effectively in the market [83] Question: Acquisition and disposition cap rates for the quarter - The company reported acquisition cap rates in the mid-sevens and disposition cap rates approaching 6% for the full year [95][96]

Financial Data and Key Metrics Changes - The company raised its full year AFFO growth outlook to 4.5% at the midpoint of the revised guidance range, driven by strong first half results [5][15] - AFFO per share for the second quarter was $1.28, representing a 9.4% increase year-over-year [15] - The company lowered its potential rent loss estimate to between $10 million and $15 million, down from $15 million to $20 million [18] Business Line Data and Key Metrics Changes - Year-to-date investments exceeded $1 billion, with $550 million closed in the second quarter at an initial weighted average cap rate of 7.5% [7][15] - The average yield on investments, factoring in rent escalations, is in the mid-nine percent range, one of the highest in the net lease sector [7][10] - Contractual same store rent growth for the second quarter was 2.3% year-over-year, with comprehensive same store rent growth at 4% [16][17] Market Data and Key Metrics Changes - The majority of second quarter investments were in warehouse and industrial properties, with a strong focus on the U.S. market [10] - Investment spreads in Europe have generally remained wider, contributing to a significant portion of the near-term pipeline [10] Company Strategy and Development Direction - The company is focused on accretive sales of non-core assets to fund new investments, with a goal of achieving over 100 basis points of spread between asset sales and new investments [12] - The company plans to ramp up its retail vertical while continuing to find better risk-adjusted returns in the industrial sector [71] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining momentum despite broader economic uncertainties, with no unforeseen disruptions in business to date [6][26] - The company anticipates a strong second half of the year, with potential to achieve high-end revised guidance ranges for both investments and earnings [26] Other Important Information - The company issued $400 million in bonds to enhance liquidity and strengthen its balance sheet, maintaining a low overall weighted average cost of debt at 3.1% [22][23] - The dividend was increased to $0.90 per share, representing a 3.4% increase over the prior year, with a payout ratio of approximately 73% of AFFO per share [24][25] Q&A Session Summary Question: Expectations for comprehensive income in the second half of the year - Management expects comprehensive income to normalize in the back half of the year, potentially tracking slightly above contractual levels [29][30] Question: Transitioning self-storage assets to net lease structure - The company has flexibility with the remaining self-storage portfolio and may lean into more sales or convert some to net lease [32][34] Question: AFFO guidance and potential headwinds - Management highlighted that the second quarter's elevated other lease-related income is a timing issue, and they expect to grow AFFO despite potential rent reserve impacts [44][46] Question: Credit quality of tenants and market conditions - The company targets sub-investment grade tenants and has seen improved credit quality among its tenant base [48][80] Question: Impact of trade discussions on business - Management noted no significant impacts from trade discussions to date, but they continue to monitor the situation [58][60] Question: Opportunities in Europe and the U.S. - The company sees good opportunities in both regions, with a balanced pipeline expected for the second half of the year [67][68] Question: Acquisition and disposition cap rates - Year-to-date acquisition cap rates are around 7.5%, while disposition cap rates are expected to approach 6% for the full year [96][98]

Portfolio Overview - W P Carey has a large, diversified portfolio comprising 1,600 properties and 370 tenants[20] - The portfolio's square footage totals 178 million[20] - The Annualized Base Rent (ABR) for the portfolio is $147 billion[20] - The weighted-average lease term (WALT) is 121 years, with an occupancy rate of 982%[20] - Investment grade tenants account for 218% of ABR, while the top 10 tenants contribute 194% of ABR[20] Geographic and Property Type Diversification - North America accounts for 66% of ABR, while Europe accounts for 34%, and other regions account for 1%[20] - Industrial/Warehouse properties make up 64% of the total portfolio ABR[29] - Contractual rent escalation is primarily CPI-linked (50%) or fixed (46%)[20] Financial Highlights - The company's total equity stands at $13660 million[63] - Total pro rata net debt is $8419 million, resulting in an enterprise value of $22079 million[63] - Pro rata net debt to adjusted EBITDA is 58x, and pro rata net debt to enterprise value is 381%[63]

Key Takeaways W.P. Carey (WPC) reported second-quarter 2025 adjusted funds from operations (AFFO) per share of $1.28, surpassing the Zacks Consensus Estimate of $1.23. The figure improved 9.4% from the year-ago quarter. Results reflected higher revenues, aided by strong investment activity and a disciplined disposition strategy. WPC raised its full-year 2025 AFFO per share guidance. Quarterly revenues of $384.5 million underperformed the Zacks Consensus Estimate of $416.3 million. However, revenues increase ...

W.P. Carey (WPC) came out with quarterly funds from operations (FFO) of $1.28 per share, beating the Zacks Consensus Estimate of $1.23 per share. This compares to FFO of $1.17 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an FFO surprise of +4.07%. A quarter ago, it was expected that this real estate investment trust would post FFO of $1.2 per share when it actually produced FFO of $1.17, delivering a surprise of -2.5%.Over the last four quarters, ...

Overview [Summary Metrics](index=4&type=section&id=Summary%20Metrics) W. P. Carey's Q2 2025 highlights include an AFFO per diluted share of **$1.28**, pro rata net debt to adjusted EBITDA of **5.8x**, and **98.2%** net-leased property occupancy Q2 2025 Key Financial Results | Metric | Value | | :--- | :--- | | Revenues, including reimbursable costs | $430,777 (in thousands) | | Net income attributable to W. P. Carey | $51,220 (in thousands) | | Net income per diluted share | $0.23 | | AFFO attributable to W. P. Carey | $282,670 (in thousands) | | AFFO per diluted share | $1.28 | | Dividends declared per share | $0.900 | Q2 2025 Capitalization & Credit Metrics | Metric | Value | | :--- | :--- | | Enterprise value | $22,079,394 (in thousands) | | Pro rata net debt to enterprise value | 38.1% | | Pro rata net debt to adjusted EBITDA (annualized) | 5.8x | | Total consolidated debt to gross assets | 43.2% | | Weighted-average debt maturity | 4.7 years | Q2 2025 Real Estate Portfolio Highlights (Pro Rata) | Metric | Value | | :--- | :--- | | ABR – total portfolio | $1,469,552 (in thousands) | | Number of net-leased properties | 1,600 | | Occupancy – net-leased properties | 98.2% | | Weighted-average lease term | 12.1 years | | Investment volume – current quarter | $548,638 (in thousands) | | Dispositions – current quarter | $364,203 (in thousands) | [Components of Net Asset Value](index=6&type=section&id=Components%20of%20Net%20Asset%20Value) This section details W. P. Carey's Net Asset Value components as of June 30, 2025, showing **$369.2 million** in normalized pro rata cash NOI and **$8.8 billion** in total pro rata debt Normalized Pro Rata Cash NOI (Q2 2025) | Category | Amount (in thousands) | | :--- | :--- | | Net lease properties | $353,095 | | Self-storage and other operating properties | $16,083 | | **Total normalized pro rata cash NOI** | **$369,178** | Selected Balance Sheet Items (As of June 30, 2025) | Item | Amount (in thousands) | | :--- | :--- | | Total pro rata debt outstanding | $8,799,502 | | Cash and cash equivalents | $244,831 | | Investment in shares of Lineage (a cold storage REIT) | $201,827 | | Cash held at qualified intermediaries | $135,181 | Financial Results [Consolidated Statements of Income – Last Five Quarters](index=9&type=section&id=Consolidated%20Statements%20of%20Income%20%E2%80%93%20Last%20Five%20Quarters) Q2 2025 consolidated income shows **$430.8 million** in total revenues and **$51.2 million** net income, impacted by **$148.8 million** in other losses Quarterly Income Statement Highlights (in thousands, except per share data) | Metric | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $430,777 | $409,858 | $406,165 | $397,383 | $389,672 | | Net Income Attributable to W. P. Carey | $51,220 | $125,824 | $47,023 | $111,698 | $142,895 | | Diluted Earnings Per Share | $0.23 | $0.57 | $0.21 | $0.51 | $0.65 | - The 'Other gains and (losses)' for Q2 2025 included a **$69.0 million mark-to-market unrealized loss** on the Lineage investment, **$66.4 million in net losses on foreign currency exchange**, and a **$9.9 million allowance for credit losses**[23](index=23&type=chunk) [FFO and AFFO, Consolidated – Last Five Quarters](index=10&type=section&id=FFO%20and%20AFFO%2C%20Consolidated%20%E2%80%93%20Last%20Five%20Quarters) Q2 2025 AFFO attributable to W. P. Carey reached **$282.7 million**, or **$1.28 per diluted share**, with FFO at **$0.57 per diluted share**, reflecting non-cash adjustments Quarterly FFO and AFFO per Diluted Share | Metric | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | FFO per diluted share | $0.57 | $0.99 | $0.85 | $0.83 | $1.18 | | AFFO per diluted share | $1.28 | $1.17 | $1.21 | $1.18 | $1.17 | - The primary adjustment from FFO to AFFO in Q2 2025 was the add-back of **$148.8 million in 'Other (gains) and losses'**, which included mark-to-market losses and foreign currency movements[27](index=27&type=chunk)[29](index=29&type=chunk) [Elements of Pro Rata Statement of Income and AFFO Adjustments](index=11&type=section&id=Elements%20of%20Pro%20Rata%20Statement%20of%20Income%20and%20AFFO%20Adjustments) This section details Q2 2025 AFFO adjustments to GAAP income, highlighting reversals for **$121.9 million** in depreciation and **$148.7 million** in other gains/losses - The purpose of this presentation is to help investors understand the impact of each AFFO adjustment on the GAAP statement of income line items[31](index=31&type=chunk) - Major non-cash adjustments to arrive at AFFO for Q2 2025 include reversing **$121.9 million** in depreciation and amortization and adding back **$148.7 million** in 'Other gains and (losses)'[32](index=32&type=chunk) [Capital Expenditures](index=12&type=section&id=Capital%20Expenditures) Q2 2025 capital expenditures totaled approximately **$2.1 million** in turnover costs and **$1.1 million** in maintenance capital expenditures Capital Expenditures (Q2 2025, in thousands) | Category | Amount | | :--- | :--- | | **Turnover Costs** | | | Total Tenant Improvements and Leasing Costs | $1,714 | | Property improvements | $366 | | **Total Turnover Costs** | **$2,080** | | **Maintenance Capital Expenditures** | **$1,105** | Balance Sheets and Capitalization [Consolidated Balance Sheets](index=14&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets reached **$18.0 billion**, with net debt at **$8.6 billion** and total equity at **$8.2 billion**, reflecting changes from year-end 2024 Balance Sheet Comparison (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total assets | $17,998,197 | $17,535,024 | | Debt, net | $8,635,985 | $8,039,002 | | Total equity | $8,225,332 | $8,434,124 | [Capitalization](index=15&type=section&id=Capitalization) As of June 30, 2025, W. P. Carey's total market capitalization was approximately **$22.5 billion**, comprising **$13.7 billion** in equity and **$8.8 billion** in pro rata debt Market Capitalization (As of June 30, 2025, in thousands) | Component | Market Value | | :--- | :--- | | Total Equity Market Capitalization | $13,659,904 | | Total Pro Rata Debt | $8,799,502 | | **Total Capitalization** | **$22,459,406** | [Debt Overview](index=16&type=section&id=Debt%20Overview) As of June 30, 2025, total pro rata debt was **$8.8 billion**, with a **3.2%** weighted-average interest rate and **4.7-year** maturity, predominantly recourse senior unsecured notes Pro Rata Debt Summary (As of June 30, 2025) | Metric | Value | | :--- | :--- | | Total Outstanding Balance | $8,799,502 (in thousands) | | Weighted-Average Interest Rate | 3.2% | | Weighted-Average Maturity | 4.7 years | | % Fixed Rate (incl. swapped) | ~92.6% (75.0% fixed notes + 11.3% swapped + 3.4% fixed non-recourse) | | % Floating Rate | ~7.8% (7.4% revolver + 0.4% floating non-recourse) | [Debt Maturity](index=19&type=section&id=Debt%20Maturity) The debt maturity schedule is well-laddered, with **12.6%** maturing in 2026 and the majority of debt maturing after 2028, indicating minimal near-term risk Upcoming Debt Maturities (% of Total Outstanding) | Year of Maturity | % of Total Outstanding Balance | | :--- | :--- | | Remaining 2025 | 0.5% | | 2026 | 12.6% (1.9% Non-Recourse + 6.7% + 4.0% Recourse) | | 2027 | 7.1% | | 2028 | 10.5% | | 2029 | 12.9% | [Senior Unsecured Notes](index=20&type=section&id=Senior%20Unsecured%20Notes) W. P. Carey maintains investment-grade credit ratings and was in compliance with all Senior Unsecured Note financial covenants as of June 30, 2025, with ample headroom Senior Unsecured Note Covenant Compliance (As of June 30, 2025) | Covenant Metric | Required | Actual | | :--- | :--- | :--- | | Total Debt / Total Assets | ≤ 60% | 42.1% | | Secured Debt / Total Assets | ≤ 40% | 1.2% | | Consolidated EBITDA / Annual Debt Service Charge | ≥ 1.5x | 4.9x | | Unencumbered Assets / Total Unsecured Debt | ≥ 150% | 230.4% | Real Estate Portfolio [Investment Activity](index=22&type=section&id=Investment%20Activity) H1 2025 saw **$823.8 million** in investments, mainly industrial and warehouse properties, alongside **$494.0 million** in dispositions and **$289.7 million** in capital commitments [Investment Volume](index=22&type=section&id=Investment%20Volume) YTD 2025 investment volume reached **$823.8 million**, with Q2 contributing **$548.6 million** primarily in property investments and loan funding for industrial and warehouse assets YTD 2025 Investment Volume (in thousands) | Period | Property Investments | Loan Funding | Total | | :--- | :--- | :--- | :--- | | 1Q25 | $273,168 | $1,984 | $275,152 | | 2Q25 | $545,460 | $3,178 | $548,638 | | **Year-to-Date Total** | **$818,628** | **$5,154** | **$823,782** | [Capital Investments and Commitments](index=23&type=section&id=Capital%20Investments%20and%20Commitments) Total capital commitments are **$289.7 million**, with **$109.5 million** expected in 2025, covering build-to-suits, redevelopments, and renovations through 2027 Capital Commitments by Completion Year (in thousands) | Expected Completion | Remaining Commitment | Total Commitment | | :--- | :--- | :--- | | 2025 | $65,412 | $109,525 | | 2026 | $62,627 | $71,943 | | 2027 | $99,595 | $108,269 | | **Total** | **$227,634** | **$289,737** | [Dispositions](index=24&type=section&id=Dispositions) YTD 2025 dispositions totaled **$494.0 million** in gross sale price, with Q2 sales of **$364.2 million** including specialty properties and self-storage assets YTD 2025 Dispositions (in thousands) | Period | Gross Sale Price | | :--- | :--- | | 1Q25 | $129,832 | | 2Q25 | $364,203 | | **Year-to-Date Total** | **$494,035** | [Joint Ventures](index=25&type=section&id=Joint%20Ventures) As of June 30, 2025, joint ventures reported **$33.8 million** in pro rata ABR, with unconsolidated JVs holding **$210.0 million** in pro rata debt Joint Venture Summary (Pro Rata, in thousands) | Venture Type | Debt Outstanding | ABR | | :--- | :--- | :--- | | Unconsolidated JVs | $209,948 | $23,295 | | Consolidated JVs | $— | $10,463 | | **Total** | **$209,948** | **$33,758** | [Portfolio Diversification](index=26&type=section&id=Portfolio%20Diversification) The portfolio is highly diversified, with top 10 tenants at **19.4%** ABR, industrial/warehouse at **63.9%**, and **60.2%** of ABR from the U.S. [Top 25 Tenants](index=26&type=section&id=Top%2025%20Tenants) Tenant diversification is strong, with the top 10 tenants representing **19.4%** of ABR and the largest tenant, Extra Space Storage, Inc., at **2.7%** Tenant Concentration by ABR | Tenant Group | % of Total ABR | | :--- | :--- | | Top 10 Tenants | 19.4% | | Top 20 Tenants | 31.7% | | Top 25 Tenants | 36.1% | [Diversification by Property Type](index=27&type=section&id=Diversification%20by%20Property%20Type) The portfolio is concentrated in industrial (**37.7%**) and warehouse (**26.2%**) properties, totaling **63.9%** of ABR, with retail at **22.3%** ABR by Property Type | Property Type | ABR % | | :--- | :--- | | Industrial | 37.7% | | Warehouse | 26.2% | | Retail | 22.3% | | Other | 13.8% | [Diversification by Tenant Industry](index=28&type=section&id=Diversification%20by%20Tenant%20Industry) The portfolio is diversified across essential industries, with Food Retail (**10.3%**), Packaged Foods & Meats (**9.1%**), and Home Improvement Retail (**7.2%**) as top sectors Top 5 Industries by ABR | Industry Type | ABR % | | :--- | :--- | | Food Retail | 10.3% | | Packaged Foods & Meats | 9.1% | | Home Improvement Retail | 7.2% | | Auto Parts & Equipment | 5.7% | | Automotive Retail | 5.3% | [Diversification by Geography](index=29&type=section&id=Diversification%20by%20Geography) Geographic diversification shows **60.2%** of ABR from the U.S. and **39.8%** internationally, with key international exposures in Italy, Netherlands, and Poland ABR by Geography | Region | ABR % | | :--- | :--- | | U.S. Total | 60.2% | | International Total | 39.8% | | **Top U.S. Regions** | | | Midwest | 16.6% | | South | 16.4% | | **Top International Countries** | | | Italy | 4.7% | | The Netherlands | 4.6% | | Poland | 4.5% | [Lease Characteristics](index=31&type=section&id=Lease%20Characteristics) The portfolio features robust lease characteristics, with **96.3%** having contractual rent increases, **4.0%** comprehensive same-store growth, and a well-staggered expiration schedule [Contractual Rent Increases](index=31&type=section&id=Contractual%20Rent%20Increases) The net-lease portfolio benefits from built-in rent growth, with **50.0%** of ABR CPI-linked and **46.3%** having fixed rent increases, ensuring predictable revenue ABR by Rent Adjustment Measure | Rent Adjustment Measure | ABR % | | :--- | :--- | | CPI-linked | 50.0% | | Fixed | 46.3% | | Other | 3.3% | | None | 0.4% | [Same-Store Analysis](index=32&type=section&id=Same-Store%20Analysis) Same-store portfolio showed healthy growth, with contractual ABR up **2.3%** year-over-year and comprehensive pro rata rental income increasing **4.0%** for the quarter Same-Store Growth Metrics | Metric | % Increase | | :--- | :--- | | Contractual Same-Store Growth (YoY ABR) | 2.3% | | Comprehensive Same-Store Growth (QoQ Rental Income) | 4.0% | [Leasing Activity](index=35&type=section&id=Leasing%20Activity) Q2 2025 leasing activity included two renewals with **76.8%** rent recapture and four new leases adding **$3.7 million** in ABR with an **18.6-year** average term - Lease renewals and extensions in Q2 2025 had a weighted average rent recapture of **76.8%** and an incremental lease term of **5.4 years**[122](index=122&type=chunk) - New leases signed in Q2 2025 added **$3.7 million** in ABR with a weighted average lease term of **18.6 years**, primarily driven by two new self-storage net leases[123](index=123&type=chunk)[124](index=124&type=chunk) [Lease Expirations](index=36&type=section&id=Lease%20Expirations) The lease expiration schedule is well-laddered, with only **1.2%** of ABR expiring in remaining 2025 and **44.4%** after 2038, indicating long-term stability Lease Expirations by ABR | Year of Expiration | ABR % | | :--- | :--- | | Remaining 2025 | 1.2% | | 2026 | 2.6% | | 2027 | 4.3% | | 2028 | 4.6% | | Thereafter (>2038) | 44.4% | [Self-Storage Operating Properties Portfolio](index=37&type=section&id=Self-Storage%20Operating%20Properties%20Portfolio) The self-storage portfolio comprises **66 properties** totaling **4.8 million square feet** with **90.6%** occupancy, diversified across key U.S. states Self-Storage Portfolio Summary | Metric | Value | | :--- | :--- | | Number of Properties | 66 | | Total Square Footage | 4,788 (in thousands) | | Total Occupancy | 90.6% | Appendix [Normalized Pro Rata Cash NOI](index=39&type=section&id=Normalized%20Pro%20Rata%20Cash%20NOI) This section reconciles to Normalized Pro Rata Cash NOI, a non-GAAP measure, showing **$369.2 million** for Q2 2025 after adjustments for non-cash items and portfolio changes Reconciliation to Normalized Pro Rata Cash NOI (Q2 2025, in thousands) | Line Item | Amount | | :--- | :--- | | Pro Rata Cash NOI | $366,646 | | Adjustment to normalize for net lease investments and dispositions | $4,015 | | Adjustment to normalize for operating property dispositions | ($1,483) | | **Normalized Pro Rata Cash NOI** | **$369,178** | [Adjusted EBITDA – Last Five Quarters](index=41&type=section&id=Adjusted%20EBITDA%20%E2%80%93%20Last%20Five%20Quarters) Q2 2025 Adjusted EBITDA was **$361.4 million**, an increase from the prior quarter, reconciled from net income by adding back depreciation, interest, and non-core items Quarterly Adjusted EBITDA (in thousands) | Period | Adjusted EBITDA | | :--- | :--- | | Q2 2025 | $361,370 | | Q1 2025 | $335,499 | | Q4 2024 | $342,628 | | Q3 2024 | $339,036 | | Q2 2024 | $326,773 | [Disclosures Regarding Non-GAAP and Other Metrics](index=42&type=section&id=Disclosures%20Regarding%20Non-GAAP%20and%20Other%20Metrics) This section provides definitions and rationale for non-GAAP financial measures and other key metrics, including FFO, AFFO, Pro Rata Cash NOI, and Adjusted EBITDA - Defines FFO (Funds from Operations) consistent with NAREIT standards, as net income excluding gains/losses from property sales, impairment charges, and real estate depreciation[150](index=150&type=chunk)[151](index=151&type=chunk) - Defines AFFO (Adjusted Funds from Operations) as FFO further adjusted for non-cash items like straight-line rent, stock-based compensation, amortization of intangibles, and certain non-core expenses[152](index=152&type=chunk) - Explains that Pro Rata Metrics present the company's proportionate share of assets, liabilities, revenues, and expenses from jointly owned investments, based on economic ownership[160](index=160&type=chunk)

Financial Performance - W. P. Carey reported a net income of $51.2 million for the second quarter of 2025, a decrease of 64.2% from $142.9 million in the same quarter of 2024, primarily due to a mark-to-market loss of $69.0 million on shares of Lineage [9][10] - The diluted earnings per share for the second quarter were $0.23, down from $0.65 in the previous year [29] - Adjusted Funds from Operations (AFFO) for the second quarter were $1.28 per diluted share, reflecting a 9.4% increase from $1.17 per diluted share in the second quarter of 2024 [10][29] Revenue and Investment Activity - Total revenues for the second quarter reached $430.8 million, a 10.5% increase from $389.7 million in the second quarter of 2024, driven by lease revenues and net investment activity [8][29] - The company completed investments totaling $1.1 billion year-to-date, including $548.6 million in the second quarter [7][23] - The company raised its full-year AFFO guidance to between $4.87 and $4.95 per diluted share, based on anticipated investment volume of $1.4 billion to $1.8 billion [5][16] Dividend and Shareholder Returns - The company declared a quarterly cash dividend of $0.900 per share, equivalent to an annualized rate of $3.60 per share, representing a 3.4% increase compared to the second quarter of 2024 [11][29] - The dividend was paid on July 15, 2025, to shareholders of record as of June 30, 2025 [11] Real Estate Portfolio - As of June 30, 2025, W. P. Carey’s net lease portfolio consisted of 1,600 properties covering approximately 178 million square feet, with a weighted-average lease term of 12.1 years and an occupancy rate of 98.2% [19][24] - The company reported a contractual same-store rent growth of 2.3% year-over-year [18] Balance Sheet and Capitalization - The company had total liquidity of $1.7 billion as of June 30, 2025, including $1.3 billion available under its Senior Unsecured Credit Facility and $244.8 million in cash and cash equivalents [20] - Subsequent to the quarter end, W. P. Carey issued $400 million of 4.650% Senior Unsecured Notes due 2030 [4][21]

Core Insights - W.P. Carey (WPC) is expected to report second-quarter 2025 results on July 29, with anticipated year-over-year increases in revenues and funds from operations (FFO) per share [1][9] Financial Performance - In the last reported quarter, WPC posted a core FFO per share of $1.17, missing the Zacks Consensus Estimate of $1.20, due to revenue impacts from dispositions, although net investment activity and lease structuring provided some support [2] - Over the past four quarters, WPC's core FFO per share surpassed the Zacks Consensus Estimate twice, met once, and missed once, with an average beat of 0.01% [3] Factors Influencing Performance - The company's performance in the second quarter is likely to benefit from its focus on sale-leaseback transactions, which involve acquiring critical real estate and leasing it back to the seller on a long-term, triple-net basis, leading to higher occupancy and better risk-adjusted returns [3] - Long-term net leases with built-in rent escalations and strategic portfolio rebalancing are expected to contribute to higher revenue generation during the quarter [4] Revenue Estimates - The Zacks Consensus Estimate for WPC's lease revenues is $354.7 million, reflecting a growth of 9.44% from the prior year, while total revenues are estimated at $414.1 million, indicating a rise of 6.27% year-over-year [5] - However, tenant bankruptcies may have resulted in rent losses, negatively impacting the company's top line for the reported quarter [5][9] Analyst Sentiment - The Zacks Consensus Estimate for quarterly FFO per share has remained unchanged at $1.23 over the past two months, suggesting a 5.13% increase year-over-year [6] - Current predictions do not indicate a surprise in FFO per share for WPC this quarter, with an Earnings ESP of 0.00% and a Zacks Rank of 3 [7] Comparative Analysis - Other REITs such as American Tower (AMT) and Cousins Properties (CUZ) are highlighted as potential stocks to consider, with AMT having an Earnings ESP of +0.95% and a Zacks Rank of 2, while CUZ has an Earnings ESP of +0.36% and a Zacks Rank of 3 [8][10]

Group 1 - Sensor Unlimited is part of the investing group Envision Early Retirement, which focuses on generating high income and growth through dynamic asset allocation [2] - The group offers two model portfolios: one for short-term survival and withdrawal, and another for aggressive long-term growth [2] - Monthly updates on holdings, tax discussions, and ticker critiques are provided to members [2] Group 2 - Sensor Unlimited has a PhD in financial economics and has spent the last decade covering the mortgage market, commercial market, and banking industry [3] - The focus areas include asset allocation and ETFs related to the overall market, bonds, banking and financial sectors, and housing markets [3]