W. P. Carey(WPC)2025-02-12 18:28Financial Data and Key Metrics Changes - The company reported an AFFO per share of 4.70 per share, supported by record investment volume and internal growth [27] - The average cash cap rates on fourth quarter investments were in the mid to low sevens, with an average of 7.5% for the year [9][10] - The company expects AFFO growth in the mid-three percent range for 2025, supporting a total return of around ten percent combined with a dividend yield of over six percent [7][20] Business Line Data and Key Metrics Changes - The investment volume for Q4 2024 was over 1.6 billion for the year [9] - The company achieved a contractual same-store rent growth of 2.6% year over year for Q4 2024, with expectations to remain in the mid-two percent range for Q1 2025 [28] - The net lease portfolio generated an ABR of over 2.6 billion and a manageable debt maturity profile [40][42] - The company expects to generate between 4.92 per share in AFFO for 2025, reflecting a growth of about 3.6% at the midpoint [36] Q&A Session Summary Question: Impact of tariffs on the portfolio and new investments - Management acknowledged that tariffs add uncertainty but noted diversification as a protective measure, with potential long-term benefits from onshoring manufacturing [51][52] Question: Updates on Joanne's and Advanced Auto Parts - Management indicated that Joanne's is expected to go into liquidation, while Advanced Auto Parts has a master lease with no near-term impact [56][57] Question: Same-store growth cadence - Management expects same-store growth to be highest in Q1 2025, declining thereafter to the low twos by year-end [60][61] Question: Capital allocation in Europe - Management expressed confidence in European investments, noting the ability to generate wider spreads compared to the US [62][64] Question: Non-core asset dispositions - Management confirmed that the majority of dispositions will be non-core assets, primarily self-storage, with expectations of positive spreads between disposition and reinvestment cap rates [68][70] Question: Broader bad debt guidance for 2025 - Management indicated an estimated 20 million for potential rent loss from tenant credit events, reflecting a cautious approach [30][96] Question: Lease expirations in 2025 - Management noted that only 1.8% of leases are expiring in 2025, with the majority being warehouse and industrial properties [102][104] Question: Loan to value and borrowing capacity - Management estimated the loan to value in the 70-80% range, indicating capacity to borrow more depending on deal activity [106][108] Question: Expansion into retail - Management confirmed ongoing interest in expanding into retail, particularly with Dollar General, while maintaining a focus on warehouse and industrial investments [135][138]