W.P. Carey And Getty Realty 1-Day Sale

Core Insights - REITs are regaining favor in 2026, leading to renewed equity issuance opportunities for companies like W.P. Carey Inc. (WPC) and Getty Realty Corp. (GTY) [1][2] - Both companies experienced temporary declines in share prices following their equity offerings, presenting potential buying opportunities for investors [1][5] REIT Market Dynamics - Historically, REITs have been hesitant to issue equity due to concerns over dilution affecting AFFO/share and NAV [2] - In 2026, stock prices for WPC and GTY have risen due to strong earnings reports, making equity issuance more viable [2][3] Share Offerings Impact - Share offerings create temporary liquidity events that can significantly alter stock prices [4] - WPC's issuance of 6 million shares at $72 each raised $432 million, resulting in a 4% drop in stock price on the announcement day [6][10] - GTY's offering of 4 million shares at $32.75 led to a larger price drop of about 7% due to its proportionally larger impact on outstanding shares [14][16] Financial Metrics and Projections - WPC's expected AFFO/share for 2026 is $5.17, leading to a cost of equity of 7.18% from the recent issuance [10][12] - The capital raised will fund approximately $864 million in acquisitions, with a projected cash cap rate of around 7.25%, significantly above WPC's cost of capital [10][12] - GTY's expected AFFO/share is $2.51, with a cost of equity of 7.66% from its recent issuance, and a blended cost of capital of 6.71% [16][17] Management and Strategy - Effective REIT management is crucial for determining the success of equity offerings, focusing on cost of capital and cap rates on the use of proceeds [19][20] - Both WPC and GTY strategically chose to issue equity when market conditions were favorable, indicating disciplined management practices [21]