Financial Data and Key Metrics Changes - The company sourced $43 billion in volumes during the quarter, matching the total sourced volume for all of 2024 and marking the highest quarterly volume in its history [8][9] - Year-to-date, the company has sourced approximately $66 billion of investment opportunities, on track to surpass the previous high watermark of $95 billion reached in 2022 [9] - The company increased its 2025 investment volume guidance to approximately $5 billion and raised the low end of its AFFO per share guidance to a range of $4.24 to $4.28 [13][16] Business Line Data and Key Metrics Changes - The company invested $1.2 billion globally at a 7.2% weighted average initial cash yield, with a selectivity ratio of less than 3% [8][10] - In Europe, the company accounted for $889 million or 76% of its investment volume at a 7.3% weighted average initial cash yield [9][10] - In the U.S., the company invested $282 million at a 7% weighted average initial cash yield, reflecting a moderation in transaction volumes domestically [10] Market Data and Key Metrics Changes - 57% of the year-to-date volume has been sourced domestically, with the remainder in Europe [9] - The company expanded into its eighth European country, Poland, with transactions involving a leading manufacturer and a grocery store operator [10][24] - The company reported a portfolio occupancy rate of 98.6%, slightly above the historical median of 98.2% from 2010 to 2024 [12] Company Strategy and Development Direction - The company aims to capitalize on two global megatrends: the growing demand for durable income-oriented investment solutions and the rising interest from corporations in asset-light strategies [5][6] - The company is pursuing adjacent growth verticals, including private capital and credit investments, while maintaining a focus on its core real estate net lease vertical [6][7] - The company is actively managing real estate on behalf of third parties, utilizing an open-end fund structure to enhance acquisition investment spreads [19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the structural advantages of the business model, including scale, diversification, and data analytics, to create value through various economic conditions [21] - The company anticipates approximately 75 basis points of potential rent loss in 2025, slightly higher than historical experience, primarily due to certain tenants acquired through public M&A transactions [13][14] - The credit watch list stands at 4.6% of annualized base rent, with management noting strong results from recent bankruptcy resolutions [15] Other Important Information - The company raised $632 million of equity through its ATM at a weighted average stock price of $56.39 per share [16] - The company finished the second quarter with net debt to annualized pro forma adjusted EBITDA of 5.5 times, in line with its leverage target [17] - The company has $5.4 billion of liquidity at quarter end, including $800 million of cash and $4 billion of availability under its credit facility [17] Q&A Session Summary Question: Opportunity in Poland - Management highlighted Poland as a fast-growing market with favorable property laws, leading to successful transactions in the region [23][24] Question: Acquisition Guidance Changes - The low end of acquisition guidance was raised due to conservatism amid uncertainty in U.S. and European policies, while the high end remained unchanged [26][27] Question: Sourcing Volume and Selectivity - Management confirmed that selectivity remains a priority, with a significant amount of sourced transactions not pursued due to insufficient initial yield [29][30] Question: Retail Park Opportunities - Management noted that retail parks in Ireland are a major source of uplift, while the UK market is also showing positive trends [32][34] Question: Tenant Health and Tariffs - Management indicated that the credit watch list accounts for potential impacts from tariffs, with minimal exposure to vulnerable industries [39][41] Question: Competitive Landscape and Supply Dynamics - Management acknowledged increased competition from private capital but emphasized the company's established underwriting maturity as a competitive advantage [51][52] Question: Lease Expirations and Bankruptcy Impact - Management stated that lease expirations were primarily driven by natural flows rather than bankruptcies, with a strong renewal rate among existing clients [97]

Financial Data and Key Metrics Changes - Realty Income invested $1.2 billion in the second quarter at a 7.2% weighted average initial cash yield, with a spread of 181 basis points over the short-term weighted average cost of capital [6] - The company sourced $43 billion in volumes, matching the total sourced volume for all of 2024 and marking the highest quarterly volume in its history [6] - Year-to-date, the company has sourced approximately $66 billion of investment opportunities, on track to surpass the previous high watermark of $95 billion reached in 2022 [7] Business Line Data and Key Metrics Changes - In Europe, Realty Income invested $889 million, accounting for 76% of the investment volume at a 7.3% weighted average initial cash yield [8] - In the U.S., the company invested $282 million at a 7% weighted average initial cash yield, reflecting a selective approach rather than a lack of opportunities [9] - The portfolio occupancy rate was 98.6%, slightly above the historical median of 98.2% from 2010 to 2024 [11] Market Data and Key Metrics Changes - 57% of the year-to-date volume has been sourced domestically, with the remainder in Europe [7] - The company expanded into its eighth European country, Poland, with transactions involving a leading manufacturer and a grocery store operator [9][24] Company Strategy and Development Direction - Realty Income aims to capitalize on two global megatrends: the growing demand for durable income-oriented investment solutions and the rising interest from corporations in asset-light strategies [5] - The company is focusing on expanding its private capital and credit investments while maintaining its core real estate net lease vertical [5] - The company is increasing its 2025 investment volume guidance to approximately $5 billion, reflecting confidence in its acquisition pipeline [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the structural advantages of the business model, including scale, diversification, and data analytics, to create value across various economic conditions [20] - The company anticipates approximately 75 basis points of potential rent loss in 2025, slightly higher than historical experience, primarily due to certain tenants acquired through public M&A transactions [12] - The credit watch list stands at 4.6% of annualized base rent, indicating a proactive approach to managing tenant health and potential risks [13] Other Important Information - Realty Income raised $632 million of equity through its ATM at a weighted average stock price of $56.39 per share [14] - The company has $5.4 billion of liquidity at quarter-end, including $800 million in cash and $4 billion available under its credit facility [16] Q&A Session Summary Question: Expansion into Poland - Management highlighted Poland's strong GDP growth and favorable property laws as key factors for expansion, with initial transactions involving distribution centers and industrial assets [24] Question: Acquisition Guidance Changes - The low end of acquisition guidance was raised due to conservatism amid uncertainty in U.S. and European policies, while the high end remained unchanged [26] Question: Selectivity in Acquisitions - Management confirmed a selective approach, stating that $3.7 billion of transactions were declined due to insufficient initial yield, emphasizing the importance of accretive transactions [30] Question: Investment Activity in Europe - The majority of investments in Europe were in the industrial sector, with a focus on retail parks in Ireland, which are seen as a significant growth opportunity [32][34] Question: Tenant Health and Tariffs - The company has minimal exposure to industries most affected by tariffs, with a diversified client base providing confidence in managing potential risks [40] Question: Competitive Landscape and Supply-Demand Dynamics - Management acknowledged increased competition from private capital sources but emphasized the company's established underwriting maturity as a competitive advantage [52][55] Question: Lease Expirations and Bankruptcy Impact - Lease expirations increased slightly, but management noted that the majority were natural expirations rather than driven by bankruptcies, with a strong renewal rate [100][101]

1Q25 W. P. Carey Inc. Investor Presentation 50+ Years of Investing for the Long Run® Table of Contents | Overview | 3 | | --- | --- | | Real Estate Portfolio | 7 | | Balance Sheet | 20 | | Corporate Responsibility | 24 | | Appendix – Additional Tenant Data | 26 | Unless otherwise noted, all data in this presentation is as of March 31, 2025. Amounts may not sum to totals due to rounding. Overview 3 Company Highlights W. P. Carey (NYSE: WPC) is a REIT that specializes in investing in single-tenant net lease c ...