8-K - WPC - Equibles

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the SecuritiesExchange Act of 1934

Date of report (Date of earliest event reported):

September 21, 2023

W. P. Carey Inc.

(Exact Name of Registrant as Specified in its Charter)

Maryland	001-13779	45-4549771
(State of incorporation)	(Commission File Number)	(IRS Employer Identification No.)
One Manhattan West, 395 9th Avenue, 58th FloorNew York, New York	10001
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(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code:

(212) 492-1100

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨	Written communications pursuant to Rule 425 under the Securities<br>Act (17 CFR 230.425)
¨	Soliciting material pursuant to Rule 14a-12 under the Exchange<br>Act (17 CFR 240.14a-12)
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¨	Pre-commencement communications pursuant to Rule 14d-2(b) under<br>the Exchange Act (17 CFR 240.14d-2(b))
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¨	Pre-commencement communications pursuant to Rule 13e-4(c) under<br>the Exchange Act (17 CFR 240.13e-4(c))
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Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.001 Par Value	WPC	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Item 7.01 Regulation FD Disclosure.

On September 21, 2023, W. P. Carey Inc. (the “Company”) released an updated investor presentation on the “Investors” section of its website at http://www.wpcarey.com. A copy of the updated investor presentation is also attached as Exhibit 99.1 and incorporated by reference herein. The only change from the previously furnished version was to correct a typographical error on page 2 of the presentation of the 2023 adjusted funds from operations (AFFO) guidance range to conform to the guidance range of $5.18 to $5.26 presented on the Company’s conference call on September 21, 2023.

The information furnished pursuant to this Item 7.01, including Exhibit 99.1 and the information contained on the Company’s website, shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that Section, and shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act.

Forward Looking Statements

Certain of the matters discussed in this Current Report on Form 8-K constitute forward-looking statements within the meaning of the Securities Act and the Exchange Act, both as amended by the Private Securities Litigation Reform Act of 1995. The forward-looking statements include, among other things, statements regarding the intent, belief or expectations of the Company and can be identified by the use of words such as “may,” “will,” “should,” “would,” “will be,” “goals,” “believe,” “project,” “expect,” “anticipate,” “intend,” “estimate,” “opportunities,” “possibility,” “strategy,” “maintain” or the negative version of these words and other comparable terms. These forward-looking statements include, but are not limited to, statements regarding: the future financial performance of the Company, the expected timing and outcome of the proposed spin-off of certain of the Company’s office properties, if it occurs at all; the timing or amount of borrowings under the financing arrangements contemplated by the spin-off, if any, the fees and expenses related thereto, and the reimbursement of such fees and expenses relating thereto; and the anticipated office sale program. These statements are based on the current expectations of the Company’s management, and it is important to note that the Company’s actual results could be materially different from those projected in such forward-looking statements. There are a number of risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Other unknown or unpredictable risks or uncertainties, like the risks related to inflation and increased interest rates, the effects of pandemics and global outbreaks of contagious diseases (such as the COVID-19 pandemic) and domestic or geopolitical crises, such as terrorism, military conflict (including the ongoing conflict between Russia and Ukraine and the global response to it), war or the perception that hostilities may be imminent, political instability or civil unrest, or other conflict, and those additional risk factors discussed in reports that the Company has filed with the SEC, could also have material adverse effects on the Company’s future results, performance or achievements. Discussions of some of these other important factors and assumptions are contained in the Company’s filings with the SEC and are available at the SEC's website at http://www.sec.gov, including Part I, Item 1A. Risk Factors in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, as well as the risks described under the heading “Risk Factors” in the Form 10. Investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this communication, unless noted otherwise. Except as required under the federal securities laws and the rules and regulations of the SEC, the Company does not undertake any obligation to release publicly any revisions to the forward-looking statements to reflect events or circumstances after the date of this communication or to reflect the occurrence of unanticipated events.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.	Description
99.1	Investor presentation by the Company.
104	Cover Page Interactive Data File (embedded within the Inline XBRL document).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

			W. P. Carey Inc.
Date:	September 22, 2023	By:	/s/ ToniAnn Sanzone
			ToniAnn Sanzone<br><br>Chief Financial Officer

Exhibit 99.1

Investing for the Long Run®<br>Investor Presentation<br>September 2023<br>Strategic Plan to<br>Exit Office
2<br>Overview<br>Strategic Plan<br> – Accelerated exit of office (the “Transaction”) by:<br>(i) Spinning-off the majority of WPC’s office portfolio into a publicly-traded REIT, Net Lease Office Properties (NYSE: NLOP) (the “Spin-Off”)<br>(ii) Selling office assets remaining on WPC’s balance sheet (the “Office Sale Program”)<br>4<br>Spin-Off<br> – NLOP expected to be comprised of 59 net leased office properties, with ABR of ~$141 million, almost all of which are located in the U.S.<br> – Net lease portfolio with favorable weighting to investment grade-rated tenants, built-in rent growth and staggered lease maturities<br> – Business plan focused on maximizing value for shareholders through strategic asset management and disposition of properties over time with<br>proceeds from operating cash flow and sales used to repay debt and pay distributions to its shareholders<br> – Capitalized with approximately $169 million of existing mortgage debt outstanding and a new $455 million debt financing package, with<br>approximately $350 million of net proceeds from the new financing to be transferred to WPC<br> – Externally managed by WPC given its in-depth knowledge of the assets, desire to maintain efficiency and timeline of NLOP’s business plan<br>Office Sale Program<br> – Office Sale Program is expected to be mostly complete by the end of 2023 with Spanish government sale expected in January 2024<br> • Spanish government office portfolio consisting of 70 properties with a total ABR of ~$32 million and located in Spain<br> • Additional 17 office properties, with ABR of ~$45 million, comprised primarily of single-tenant properties in Europe excluded from the Spin-Off (1)<br>Go Forward WPC<br> – Portfolio comprised primarily of industrial / warehouse, essential retail and self-storage assets with 11+ year WALT and favorable rent increases<br> – Reset dividend policy, targeting a pro forma AFFO payout ratio of approximately 70% to 75%<br> – Generate approximately $735 million from NLOP transfer and equity forward settlement used to repay debt and to fund new investments<br> – Updated 2023 AFFO guidance to be between $5.18 and $5.26 for both Total Company AFFO per share and Real Estate AFFO per share<br> – Transaction maintains leverage targets and incrementally improves liquidity and overall credit profile<br>Timing<br> – Spin-Off does not require shareholder approval and is expected to close on or around November 1, 2023, subject to closing conditions<br>Note: portfolio information reflects pro rata ownership of real estate assets (excluding operating properties) as of June 30, 2023.<br>(1) Includes second largest office asset, which served as the headquarters for the largest provider of digital pay television in Spain, that was sold In July 2023. ABR and pro rata debt outstanding at the time of disposition were $9 million and $46<br>million, respectively.
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3<br>Strategic Rationale<br> Clear path to monetizing WPC’s legacy office portfolio<br> – Transaction accelerates WPC’s office exit strategy, aligning WPC’s portfolio with its investment focus on growing its core net lease portfolio<br> Enhances WPC’s growth profile through improved cost of capital<br> – Transaction is expected to broaden WPC’s appeal to debt and equity investors and serve as a catalyst to drive a re-rating of WPC<br> – Post-Transaction portfolio expected to comprise higher-quality assets commanding an improved portfolio valuation and higher multiple<br> – Lower cost of capital widens WPC’s investment spreads and enhances its overall earnings growth profile<br> – Furthers WPC’s ability to drive sector-leading same-store rent growth through a combination of CPI and fixed rent escalators<br> Increases the quality and stability of WPC’s earnings and cash flows through better end-of-lease outcomes<br> – Post-Transaction WPC benefits from higher overall releasing spreads, reduced downtimes and carrying costs and lower capex requirements<br> Improves portfolio quality and key metrics post-separation<br> – Vast majority of remaining net lease portfolio to comprise industrial / warehouse, essential retail and self-storage assets<br> – Increases overall real estate quality, criticality, and WALT of the portfolio with all other metrics largely in line with pre-Transaction levels<br> Maintains strong, scalable investment grade balance sheet<br> – No material change to balance sheet and WPC will remain a top 25 REIT in the RMZ index<br> – A credit positive with BBB+ (stable) and Baa1 (stable) unsecured credit ratings expected to remain unchanged<br> – Leverage to remain within WPC’s target range of mid-to-high 5s net debt to EBITDA<br> Uniquely positioned to successfully manage NLOP’s disposition plan<br> – WPC originated and has managed office since inception and has a deep understanding of the assets and markets
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4<br>30.0%<br>25.5%<br>16.1%<br>5.8%<br>0.0%<br>YE 2015 YE 2018 Today (6/30/23) Post-Spin-Off Post-Office Sale Program<br> • WPC has reduced its office exposure from 30% of ABR in 2015 to 16% today – the Transaction greatly accelerates that trajectory<br> • Expect balance sheet sales to be completed by early 2024 and generate sale proceeds of approximately $800 million<br> – WPC has already sold or is in the advanced stages of selling assets representing the majority of Office Sale Program ABR<br>Accelerates Existing Office Disposition Strategy<br>Office Exposure as % of Total ABR<br>Note: Current portfolio information reflects pro rata ownership of real estate assets (excluding operating properties) as of June 30, 2023.<br>(1) Excludes office properties that will be redeveloped or reclassified into other property types and office properties that are subject to master leases with tenants owning additional property types.<br>Office Sale Program<br>represents ~5% of total<br>WPC ABR as of 6/30/23<br>Residual office assets on<br>master leases or will be<br>redeveloped into other<br>property types<br>(1)
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5<br>Part #1 – Portfolio Spun-Off to NLOP Part #2 – Office Sale Program<br>Other Office Portfolio Spanish government (1)<br>Number of Properties 59 70 17<br>Number of Tenants 62 1 20<br>Square Footage 8.7 million 2.8 million 3.2 million<br>ABR $141 million $32 million $45 million<br>Property Expenses and Taxes ~$7.0 million ~$4.5 million ~$6.0 million<br>North America / Europe (% of ABR) 89% / 11% --% / 100% 17% / 83%<br>Escalations: CPI-linked / Fixed / Other (2) (% of ABR) 21% / 73% / 6% 100% / --% / --% 77% / 16% / 8%<br>WALT 5.7 years 11.5 years 8.2 years<br>Occupancy 97.1% 100.0% 86.7%<br>Investment Grade Tenants (% of ABR) 66.9% 100.0% 48.5%<br>Top 10 Tenant Concentration (% of ABR) 49.8% 100.0% 50.1%<br>Mortgage Debt Outstanding $169 million $-- $140 million<br>Weighted Average Interest Rate 4.8% --% 4.8%<br>Two-Part Office Exit Strategy<br>Note: portfolio information reflects pro rata ownership of real estate assets (excluding operating properties) as of June 30, 2023. Percentage figures may not sum to 100% due to rounding.<br>(1) Includes second largest office asset, which served as the headquarters for the largest provider of digital pay television in Spain, that was sold In July 2023. ABR and pro rata debt outstanding at the time of disposition were $9 million and $46<br>million, respectively.<br>(2) Other includes leases with percentage rent (i.e., participation in the gross revenues of the tenant above a stated level) and other increases, as well as leases with no escalations.<br>Substantial progress already made for Office Sale Program
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6<br>W. P. Carey Pro Forma Portfolio<br>Note: Portfolio information reflects pro rata ownership of real estate assets (excluding operating properties) as of June 30, 2023. Percentage figures may not sum to 100% due to rounding.<br>(1) Gross real estate value represents consolidated real estate assets before accumulated depreciation on buildings and improvements, net of accumulated amortization on in-place lease intangible assets and above-market rent intangible assets.<br>(2) Includes automotive dealerships.<br>(3) includes education facility, hotel (net lease), laboratory, specialty, research & development, fitness facility, student housing (net lease), theater, funeral home, restaurant, land, outdoor advertising and parking. Includes office properties that will<br>be redeveloped or reclassified into other property types and office properties that are subject to master leases with tenants owning additional property types in the Post-Spin-Off and Post-Transaction scenarios.<br>(4) Metrics shown for operating self-storage portfolio only; excludes net-lease self-storage assets which are captured in net-lease portfolio metrics.<br>Portfolio post-Transaction focused on industrial / warehouse, essential retail and net lease self-storage<br>WPC (June 30, 2023) WPC (Post-Spin-Off) WPC (Post-Transaction)<br>Gross Real Estate Book Value $18.1 billion $16.6 billion $15.8 billion (1)<br>Size ABR $1.47 billion $1.33 billion $1.25 billion<br>Property Type (% of ABR)<br>Net Lease Portfolio % of Office Contribution 16.1% 5.8% 0.0% WALT 11.2 years 11.8 years 11.9 years<br>Occupancy 99.0% 99.1% 99.3%<br>Investment Grade Tenants (% of ABR) 29.9% 26.0% 23.3%<br>Number of Properties 1,475 1,416 1,329<br>Number of Tenants 398 340 324<br>Square Footage 180.0 million 171.3 million 165.4 million<br>Number of Properties 85 85 85<br>Self-Storage (4) Number of Units 52,693 52,693 52,693 Average Occupancy 91.9% 91.9% 91.9%<br>62%<br>Industrial /<br>Warehouse<br>34%<br>28%<br>20%<br>5%<br>13%<br>32%<br>26%<br>6%<br>19%<br>5%<br>12%<br>29%<br>24% 16%<br>17%<br>4% 10%<br>Industrial<br>Warehouse<br>Office<br>Retail (2)<br>Self-Storage<br>Other (3)<br>58%<br>Industrial /<br>Warehouse<br>53%<br>Industrial /<br>Warehouse
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7<br>1.6%<br>5.6% 3.2% 4.7% 5.0% 4.2% 5.4% 2.7% 5.2% 3.2%<br>59.2%<br>2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 Thereafter<br>66%<br>33%<br>1%<br>Go Forward W. P. Carey Net Lease Portfolio Post-Transaction<br>Note: portfolio information reflects pro rata ownership of real estate assets (excluding operating properties) as of June 30, 2023. Percentage figures may not sum to 100% due to rounding.<br>(1) Includes properties in the United States, Canada and Mexico<br>(2) Includes properties in Mauritius and Japan.<br>(3) The Company received notice during the 2023 first quarter from a related party of U-Haul of its intention to exercise its repurchase option on the properties in the U-Haul net lease self-storage portfolio.<br>(4) Assumes tenants do not exercise any renewal or purchase options.<br>(5) Includes ABR of $38.8 million from the U-Haul net lease self-storage portfolio. WPC received notice during the 2023 first quarter from a related party of U-Haul of its intention to exercise its repurchase option on the properties in this portfolio.<br>North America (1)<br>Europe<br>Other (2)<br>Geographic Diversification (% of ABR) Top 10 Tenants<br>Geography<br>Lease Expiration Schedule (4)<br>(3)<br>(5)<br>% of<br>Total ABR<br>Number of<br>Properties Tenant Location<br>1 North America 78 3.1%<br>2 North America 11 2.5%<br>3 Europe 20 2.4%<br>4 Europe 35 2.4%<br>5 North America 27 2.0%<br>6 North America 23 1.9%<br>7 Europe 25 1.9%<br>8 North America 3 1.8%<br>9 Europe 19 1.8%<br>10 North America 9 1.7%<br>Top 10 Total 250 21.5%
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8<br>37%<br>18%<br>42%<br>3%<br>0%<br>Internal Growth Profile<br>Note: portfolio information reflects pro rata ownership of real estate assets (excluding operating properties) as of June 30, 2023. Percentage figures may not sum to 100% due to rounding.<br>(1) Represents leases with percentage rent (i.e., participation in the gross revenues of the tenant above a stated level) and other increases.<br>(2) Contractual same store portfolio includes leases that were continuously in place during the prior twelve-month period. Excludes leases for properties that were acquired, sold or vacated, or were subject to lease renewals, extensions or<br>modifications at any time that affected ABR during that period. For purposes of comparability, ABR is presented on a constant currency basis using exchange rates as of the end of the period.<br>Uncapped CPI<br>CPI-based<br>Fixed<br>Other (1)<br>None<br>Post-Transaction Contractual Rent Increases (% of ABR) WPC Standalone Historical Same Store ABR Growth (2)<br>55% CPI-linked ABR pro forma for the Transaction<br>Rent Increase<br>WPC is well-positioned for internal growth, with sector-leading contractual rent increases<br>2.7%<br>3.0%<br>3.4% 3.4%<br>4.3% 4.3%<br>1Q22 2Q22 3Q22 4Q22 1Q23 2Q23<br>55%<br>CPI-linked
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9<br>92%<br>8%<br>Transaction Expected to Drive Re-rating of W. P. Carey’s Valuation Multiple<br>Net Lease Price / 2023E AFFO Multiples WPC Pro Forma for Transaction<br>Property Type (% of ABR)<br> Portfolio focused on higher quality<br>and lower cap rate real estate<br> Increases weighting to industrial /<br>warehouse from 53% to 62% of ABR<br> Increases WALT from 11.2 to 11.9 years<br> Increases earnings stability and<br>quality of cash flows through<br>improved end-of-lease outcomes<br> Enhanced growth profile through cost<br>of capital improvements<br>18.2x<br>15.3x 15.3x<br>14.0x 13.8x<br>12.0x 11.9x<br>11.1x<br>STAG LXP ADC EPRT O NNN Current<br>WPC<br>BNL<br>Rerating<br>WALT 4.6 years 5.9 years 8.6 years 14.0 years 9.6 years 10.2 years 11.2 years 10.7 years<br>Industrial / Warehouse<br>Office<br>Retail<br>Other 100% 100% 100% 53% 17% 16%<br>13% 14%<br>83%<br>3% 1%<br>Industrial /<br>Warehouse<br>62%<br>Retail<br>20%<br>Other<br>18%<br>Source: Public filings, FactSet; market data as of August 29, 2023. Percentage figures may not sum to 100% due to rounding.<br>Note: WPC portfolio information reflects pro rata ownership of real estate assets (excluding operating properties) as of June 30, 2023. Peer portfolio data as of June 30, 2023.<br>4%<br>83%<br>13%<br>51%<br>12% 6%<br>31%
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10<br>Leverage Metrics June 30, 2023<br>Capitalization ($MM) June 30, 2023 Pro Forma Transaction (1)<br>(1) Amounts may not sum to totals due to rounding.<br>(2) Based on a closing stock price of $67.56 on June 30, 2023 and 213,901,170 common shares outstanding as of June 30, 2023.<br>(3) Pro rata net debt to enterprise value and pro rata net debt to Adjusted EBITDA are based on pro rata debt less consolidated cash and cash equivalents.<br>(4) Adjusted EBITDA represents 2Q23 annualized Adjusted EBITDA, as reported in the Form 8-K filed with the SEC on July 28, 2023.<br>(5) Gross assets represent consolidated total assets before accumulated depreciation on real estate. Gross assets are net of accumulated amortization on in-place lease and above-market rent intangible assets.<br>Maintains strong and flexible investment grade balance with strengthened credit profile<br> • W. P. Carey to remain the largest diversified net lease REIT and a top<br>25 REIT in the RMZ<br> • WPC expects to continuing operating within leverage targets of mid-to-high 5s net debt to EBITDA and low-to-mid 40s debt to gross assets<br> • Viewed as a credit positive by both S&P and Moody’s with no change<br>expected to BBB+ / Baa1 ratings<br> • Incrementally improves liquidity – NLOP transfer of approximately $350<br>million largely used to repay revolver maintaining substantial capacity<br> • Equity forwards settled raising $385 million of proceeds for capital<br>needs, including investments and repayment of debt<br> • Improves debt maturities through revolver pay down and removal of<br>$308 million in mortgage debt from NLOP and Office Sale Program<br> • Office Sale Program expected to generate ~$800 million in disposition<br>proceeds, providing additional liquidity<br> • Unsecured debt covenants all remain well within required thresholds<br>Total Equity $14,451 (2)<br>Pro Rata Net Debt<br>Senior Unsecured Notes USD 2,900<br>Senior Unsecured Notes EUR 3,124<br>Mortgage Debt, pro rata USD 661<br>Mortgage Debt, pro rata (EUR $345 / Other $85) 430<br>Unsecured Revolving Credit Facility USD 110<br>Unsecured Revolving Credit Facility (EUR $402 / Other $17) 419<br>Unsecured Term Loans (EUR $777 / GBP $342) 1,119<br>Total Pro Rata Debt $8,763<br>Less: Cash and Cash Equivalents (204)<br>Total Pro Rata Net Debt $8,559<br>Enterprise Value $23,010<br>Total Capitalization $23,214<br>Pro Rata Net Debt / Adjusted EBITDA 5.7x (3), (4)<br>Pro Rata Net Debt / Enterprise Value (2), (3) 37.2%<br>Total Consolidated Debt / Gross Assets (5) 41.3%<br>Weighted Average Interest Rate (pro rata) 3.3%<br>Weighted Average Debt Maturity (pro rata) 3.9 years<br>Credit Profile and Balance Sheet
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11<br>Transaction Timeline<br>Office Sale Program underway; closing of the Spin-Off is anticipated on or around November 1<br>NLOP Office Sales<br>Office Sale Program<br>Today October 2023 November 2023 2024 Beyond<br> Early November:<br>Funding of NLOP debt financing;<br>Distribution of NLOP shares to<br>WPC shareholders<br> Early October:<br>Seek SEC effectiveness
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12<br>Compelling Strategic Transaction<br> Greatly accelerates trajectory of reducing WPC’s exposure to office and focusing exclusively on growing core net lease portfolio<br> Results in a highly-desirable, more valuable core real estate portfolio largely consisting of industrial / warehouse, essential retail and<br>net lease self-storage with higher criticality and a longer weighted-average lease term<br> Enhances the quality and stability of cash flows and earnings through better end-of-lease outcomes driven by higher overall releasing<br>spreads, reduced downtime and carrying costs, and lower capex requirements<br> Serves as a catalyst to drive a re-rating of valuation and cost of capital improvement, positively impacting WPC’s ability to invest<br>accretively at attractive returns<br> Maintains WPC’s large, strong and scalable investment grade balance sheet, with no change to current leverage targets,<br>incrementally improving liquidity and overall credit profile<br> WPC positioned to further drive growth through a dividend reset, targeting an AFFO payout ratio of low-to-mid 70s, enabling a higher<br>proportion of cash flow to be retained going forward that can be accretively reinvested
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13<br>Net Lease Office<br>Properties (NLOP)
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14<br>U.S. Europe Total<br>Number of Properties 54 5 59<br>Number of Tenants 57 5 62<br>Square Footage 7.9 million 0.8 million 8.7 million<br>ABR $126 million $16 million $141 million<br>Escalations: CPI-linked / Fixed / Other (1) (% of ABR) 15% / 78% / 7% 68% / 32% / --% 21% / 73% / 6%<br>WALT 5.8 years 5.0 years 5.7 years<br>Occupancy 96.8% 100.0% 97.1%<br>Investment Grade Tenants (% of ABR) 62.8% 100.0% 66.9%<br>Top 10 Tenant Concentration (% of ABR) 43.3% 6.5% 49.8%<br>89%<br>11%<br>Portfolio Overview<br>Note: portfolio information reflects pro rata ownership of real estate assets (excluding operating properties) as of June 30, 2023. Percentage figures may not sum to 100% due to rounding.<br>(1) Other includes leases with percentage rent (i.e., participation in the gross revenues of the tenant above a stated level) and other increases, as well as leases with no escalations.<br>High-quality, diversified net lease portfolio of 59 assets with favorable exposure to investment grade credit<br>that will be strategically sold over time to pay down debt and maximize shareholder value<br>89%<br>11%<br>U.S.<br>Europe<br>% of ABR
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15<br>Top 10 Tenants and Select Asset Overview<br>Long-Term Cash Flow Long-Term Renewal<br> • Situation: 15-year lease renewal<br>upon completion of in-process<br>renovation<br> • Tenant: Caremark PCS Health, LLC<br> • Guarantor: CVS Health Corporation<br> • Location: Scottsdale, Arizona<br> • ABR: $4.3 million<br> • Size: 354,888 square feet<br> • Lease Expiration: December 2038<br> • Year Built / Renovated: 1977 / 2023<br> • Situation: 16+ year lease term with<br>investment-grade tenant<br> • Tenant: Federal Express Corp.<br> • Guarantor: FedEx Corporation<br> • Location: Collierville, Tennessee<br> • ABR: $5.5 million<br> • Size: 390,380 square feet<br> • Lease Expiration: November 2039<br> • Year Built / Renovated: 1999 / 2016<br>Note: portfolio information reflects pro rata ownership of real estate assets (excluding operating properties) as of June 30, 2023.<br>Top 10 Tenants<br>% of Total<br>NLOP ABR<br>Number of<br>Properties Tenant Location<br>1 12.0% Houston, Texas 1<br>6 9.4% Eagan, Minnesota 2<br>3 6.3% Texas / Florida 3<br>1 3.9% Collierville, Tennessee<br>4<br>1 3.5% Stavanger, Norway 5<br>1 3.1% The Woodlands, Texas<br>6<br>1 3.0% Scottsdale, Arizona 7<br>1 3.0% Oslo, Norway 8<br>1 2.8% Playa Vista, California<br>9<br>1 2.8% Morrisville, North Carolina 10<br>Top 10 Total 17 49.8%
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16<br>NLOP Financing, Advisory Agreements and Governance<br>Mortgage Loan<br> • Size: $335 million<br> • Maturity: Two years plus two one-year extension options<br> • Rate: Term SOFR + 5.00%, subject to a 3.85% floor and a required purchase of a SOFR cap no greater than 5.35%<br>Mezzanine Loan<br> • Size: $120 million<br> • Maturity: Five years<br> • Rate: 10.0% current with 4.5% payment-in-kind (PIK) accrual feature<br>New Debt<br>Financing<br> • Duration: Three years with one-year renewals<br> • Asset Management Fee: Initial $7.5 million annual fee reducing over time as assets are sold<br> • Reimbursement: Flat annual G&A reimbursement of $4 million – covering administrative services, including<br>personnel costs<br> • Termination Rights: Either party may terminate for convenience with 180 days’ notice<br> • Termination Fee to WPC: 2x the actual fees payable by NLOP during the four fiscal quarters preceding the<br>termination (1.5x during any renewal term) if terminated by NLOP for convenience or Advisor for cause<br>Advisory<br>Agreements<br> • Entity: Maryland REIT with opt-out of MUTA<br> • Board Composition: 5 trustees (3 independent), all with significant WPC and / or WPC-managed funds experience<br> • Management: Jason Fox to serve as CEO and Toni Sanzone to serve as CFO<br>Governance
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17<br>Appendix
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18<br>Primary Tenant Location Primary Tenant Industry Credit (1)<br>Rent Increase<br>Type<br>Property<br>ABR<br>($000s)<br>% of<br>Total ABR<br>Property<br>SF<br>(000s) (2)<br>Property<br>WALT<br>(years) (3)<br>In-Place<br>Mortgage<br>Debt<br>($000s)<br>KBR, Inc. Houston, Texas Construction & Engineering Non-IG Fixed $18,179 12.9% 1,063 6.8 $ --<br>FedEx Corporation Collierville, Tennessee Air Freight & Logistics IG Fixed 5,450 3.9% 390 16.4 --<br>BCBSM, Inc. Eagan, Minnesota Managed Health Care IG Fixed 4,952 3.5% 443 3.6 --<br>Total E&P Norge AS Stavanger, Norway Oil & Gas Exploration & Production IG Fixed 4,896 3.5% 276 8.0 --<br>JPMorgan Chase Bank, N.A. Fort Worth, Texas Diversified Banks IG CPI (Capped) 4,661 3.3% 384 6.7 --<br>McKesson Corporation (US Oncology) The Woodlands, Texas Health Care Distributors IG Fixed 4,406 3.1% 204 0.6 --<br>CVS Health Corporation Scottsdale, Arizona Health Care Services IG None 4,300 3.0% 355 15.5 --<br>Siemens AS Oslo, Norway Industrial Conglomerates IG CPI (Uncapped) 4,252 3.0% 166 2.5 39,613<br>Omnicom Group, Inc. Playa Vista, California Advertising IG None 3,961 2.8% 120 5.3 --<br>Pharmaceutical Product Development, LLC Morrisville, North Carolina Pharmaceuticals IG Fixed 3,905 2.8% 220 10.4 --<br>Orbital ATK, Inc. Plymouth, Minnesota Aerospace & Defense IG Fixed 3,746 2.6% 191 1.4 26,012<br>E.On UK PLC Houghton le Spring, United Kingdom Internet Retail IG CPI (Capped) 3,607 2.6% 217 2.1 --<br>R.R. Donnelley & Sons Company Warrenville, Illinois Commercial Printing Non-IG Fixed 3,261 2.3% 167 4.3 --<br>Board of Regents, State of Iowa Coralville, Iowa Government Related Services IG CPI (Uncapped) 3,254 2.3% 192 7.3 --<br>Caremark RX, L.L.C. Chandler, Arizona Health Care Services IG Fixed 3,213 2.3% 183 0.9 --<br>Bankers Financial Corporation St. Petersburg, Florida Property & Casualty Insurance Non-IG Fixed 3,073 2.2% 168 5.1 --<br>DMG MORI SEIKI U.S.A., INC. Hoffman Estates, Illinois Industrial Machinery IG Fixed 3,027 2.1% 105 6.3 --<br>JPMorgan Chase Bank, N.A. Tampa, Florida Diversified Banks IG CPI (Capped) 2,934 2.1% 176 6.7 --<br>Exelon Generation Company, LLC Warrenville, Illinois Electric Utilities IG Fixed 2,862 2.0% 147 3.0 20,326<br>Google, LLC Venice, California Internet Software & Services IG Fixed 2,844 2.0% 68 2.3 19,277<br>BCBSM, Inc. Eagan, Minnesota Managed Health Care IG Fixed 2,831 2.0% 228 3.6 --<br>ICU MEDICAL, INC. Plymouth, Minnesota Health Care Supplies Non-IG Fixed 2,770 2.0% 182 4.2 --<br>Intuit Inc. Plano, Texas Internet Software & Services IG Fixed 2,577 1.8% 166 3.0 21,900<br>BCBSM, Inc. Eagan, Minnesota Managed Health Care IG Fixed 2,522 1.8% 145 3.6 --<br>BCBSM, Inc. Eagan, Minnesota Managed Health Care IG Fixed 2,519 1.8% 203 3.6 --<br>AVT Technology Solutions LLC Tempe, Arizona Technology Distributors IG Fixed 2,405 1.7% 132 0.6 13,298<br>Veritas Bermuda, LTD Roseville, Minnesota Systems Software Non-IG Fixed 2,167 1.5% 136 9.4 --<br>Cenlar FSB Yardley, Pennsylvania Regional Banks Non-IG Fixed 2,000 1.4% 106 5.0 --<br>Raytheon Company Tucson, Arizona Aerospace & Defense IG CPI (Capped) 1,978 1.4% 144 8.8 --<br>iHeartCommunications, Inc. San Antonio, Texas Broadcasting Non-IG Fixed 1,971 1.4% 120 11.6 --<br>NLOP Property List<br>Note: portfolio information reflects pro rata ownership of real estate assets (excluding operating properties) as of June 30, 2023.<br>Indicates an asset that is in the J.P. Morgan financing collateral pool.<br>(1) “IG” refers to tenants or lease guarantors with investment grade ratings and subsidiaries of non-guarantor parent companies with investment grade ratings (BBB- or higher from S&P or Baa3 or higher from Moody’s). Rating for primary tenant.<br>(2) Excludes 570,999 of operating square footage for a parking garage associated with one asset.<br>(3) Assumes parties do not exercise any renewal or purchase options pursuant to their applicable leases.<br>(4) Denotes multi-tenant property. Primary tenant generating largest percentage of ABR shown.<br>(5) Property was recently re-leased; rent converts to a fixed rent increase structure upon completion of an in-process renovation, which is expected to occur in the first half of 2024.<br>(4)<br>(4)<br>(4)<br>(4)<br>(5)
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19<br>Primary Tenant Location Primary Tenant Industry Credit (1)<br>Rent Increase<br>Type<br>Property<br>ABR<br>($000s)<br>% of<br>Total ABR<br>Property<br>SF<br>(000s) (2)<br>Property<br>WALT<br>(years) (3)<br>In-Place<br>Mortgage<br>Debt<br>($000s)<br>Cofinity, Inc./Aetna Life Insurance Co. Southfield, Michigan Multi-line Insurance IG Fixed 1,907 1.3% 94 1.6 --<br>Arbella Service Company, Inc. Quincy, Massachusetts Property & Casualty Insurance IG Fixed 1,850 1.3% 132 3.9 --<br>Undisclosed – UK insurance company Newport, United Kingdom Property & Casualty Insurance IG CPI (Capped) 1,753 1.2% 81 10.9 --<br>ICF Consulting Group, Inc. Martinsville, Virginia IT Consulting & Other Services Non-IG CPI (Uncapped) 1,725 1.2% 93 3.6 --<br>Safelite Group, Inc. Rio Rancho, New Mexico Specialized Consumer Services Non-IG Fixed 1,473 1.0% 95 5.9 --<br>Acosta, Inc. Jacksonville, Florida Advertising Non-IG Fixed 1,453 1.0% 88 4.1 10,155<br>Master Lock Company, LLC Oak Creek, Wisconsin Building Products Non-IG Fixed 1,409 1.0% 121 8.9 --<br>JPMorgan Chase Bank, N.A. Tampa, Florida Diversified Banks IG CPI (Capped) 1,360 1.0% 136 1.7 --<br>Midcontinent Independent Stm Op Inc Eagan, Minnesota Electric Utilities IG Fixed 1,118 0.8% 60 2.7 9,216<br>Emerson Electric Co. Houston, Texas Industrial Machinery IG Fixed 1,056 0.7% 52 2.3 --<br>North American Lighting, Inc. Farmington Hills, Michigan Auto Parts & Equipment Non-IG Fixed 1,032 0.7% 75 2.8 6,292<br>Nokia Corporation Krakow, Poland Communications Equipment IG CPI (Uncapped) 1,024 0.7% 53 1.2 --<br>Radiate Holdings, L.P. San Marcos, Texas Cable & Satellite Non-IG CPI (Capped) 1,013 0.7% 47 5.2 223<br>International Business Machines Corporation Hartland, Wisconsin IT Consulting & Other Services IG CPI (Uncapped) 909 0.6% 81 2.4 2,059<br>Pioneer Credit Recovery, Inc. Moorestown, New Jersey Diversified Support Services Non-IG Fixed 899 0.6% 66 1.6 --<br>Arcfield Acquisition Corporation King of Prussia, Pennsylvania Aerospace & Defense Non-IG Fixed 851 0.6% 89 3.1 --<br>Charter Communications Operating, LLC Bridgeton, Missouri Cable & Satellite Non-IG Fixed 781 0.6% 78 1.8 --<br>Carhartt, Inc. Dearborn, Michigan Apparel, Accessories & Luxury Non-IG Fixed 748 0.5% 59 11.4 --<br>Xileh Holding Inc. Auburn Hills, Michigan Multi-Sector Holdings IG Fixed 694 0.5% 55 14.5 --<br>Undisclosed – multi-national provider of industrial gases Houston, Texas Industrial Gases IG Fixed 605 0.4% 50 2.5 --<br>APCO Holdings, Inc. Norcross, Georgia Property & Casualty Insurance Non-IG Fixed 600 0.4% 51 7.7 --<br>AVL Michigan Holding Corporation Plymouth, Michigan Auto Parts & Equipment Non-IG Fixed 575 0.4% 70 0.6 --<br>Radiate Holdings, L.P. Waco, Texas Cable & Satellite Non-IG CPI (Capped) 446 0.3% 31 5.2 74<br>S&ME, Inc. Raleigh, North Carolina Environmental & Facilities Services Non-IG Fixed 417 0.3% 28 1.3 --<br>Radiate Holdings, L.P. Corpus Christi, Texas Cable & Satellite Non-IG CPI (Capped) 334 0.2% 21 5.2 56<br>BCBSM, Inc. Eagan, Minnesota Managed Health Care IG Fixed 298 0.2% 30 3.6 --<br>Radiate Holdings, L.P. Odessa, Texas Cable & Satellite Non-IG CPI (Capped) 223 0.2% 21 5.2 37<br>Radiate Holdings, L.P. San Marcos, Texas Cable & Satellite Non-IG CPI (Capped) 200 0.1% 14 5.2 --<br>BCBSM, Inc. Eagan, Minnesota Managed Health Care IG Fixed 183 0.1% 12 3.6 --<br>NLOP Property List (cont.)<br>(4)<br>(4)<br>(4)<br>Note: portfolio information reflects pro rata ownership of real estate assets (excluding operating properties) as of June 30, 2023.<br>Indicates an asset that is in the J.P. Morgan financing collateral pool.<br>(1) “IG” refers to tenants or lease guarantors with investment grade ratings and subsidiaries of non-guarantor parent companies with investment grade ratings (BBB- or higher from S&P or Baa3 or higher from Moody’s). Rating for primary tenant.<br>(2) Excludes 570,999 of operating square footage for a parking garage associated with one asset.<br>(3) Assumes parties do not exercise any renewal or purchase options pursuant to their applicable leases.<br>(4) Denotes multi-tenant property. Primary tenant generating largest percentage of ABR shown.
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20<br>Cautionary Statement Concerning Forward-Looking Statements<br>Overview<br>Additional information regarding NLOP and the proposed Spin-Off can be found in the preliminary Registration Statement on Form 10 filed by NLOP<br>with the Securities and Exchange Commission (the “SEC”) on September 21, 2023 (as may be amended, the “Form 10”).<br>Cautionary Statement Concerning Forward-Looking Statements<br>Certain of the matters discussed in this communication constitute forward-looking statements within the meaning of the Securities Act of 1933 (as<br>amended, the “Securities Act”) and the Securities Exchange Act of 1934 (as amended, the “Exchange Act”), both as amended by the Private<br>Securities Litigation Reform Act of 1995. The forward-looking statements include, among other things, statements regarding the intent, belief or<br>expectations of the Company and can be identified by the use of words such as “may,” “will,” “should,” “would,” “will be,” “will continue,” “will likel<br>y<br>result,” “believe,” “project,” “expect,” “anticipate,” “intend,” “estimate” “opportunities,” “possibility,” “strategy,” “maintain” or the negative version of<br>these words and other comparable terms. These forward-looking statements include, but are not limited to, statements that are not historical facts.<br>These statements are based on the current expectations of our management, and it is important to note that our actual results could be materially<br>different from those projected in such forward-looking statements. There are a number of risks and uncertainties that could cause actual results to<br>differ materially from the forward-looking statements. Other unknown or unpredictable risks or uncertainties, like the risks related to inflation and<br>increased interest rates, the effects of pandemics and global outbreaks of contagious diseases (such as the COVID-19 pandemic) and domestic or<br>geopolitical crises, such as terrorism, military conflict (including the ongoing conflict between Russia and Ukraine and the global response to it), war<br>or the perception that hostilities may be imminent, political instability or civil unrest, or other conflict, and those additional risk factors discussed in<br>reports that we have filed with the SEC, could also have material adverse effects on our future results, performance or achievements. Discussions<br>of some of these other important factors and assumptions are contained in W. P. Carey’s filings with the SEC and are available at the SEC’s website<br>at http://www.sec.gov, including Part I, Item 1A. Risk Factors in W. P. Carey’s Annual Report on Form 10-K for the fiscal year ended December 31,<br>2022 as well as the risks described under the heading “Risk Factors” in the Form 10. Investors are cautioned not to place undue reliance on these<br>forward-looking statements, which speak only as of the date of this communication, unless noted otherwise. Except as required under the federal<br>securities laws and the rules and regulations of the SEC, W. P. Carey does not undertake any obligation to release publicly any revisions to the<br>forward-looking statements to reflect events or circumstances after the date of this communication or to reflect the occurrence of unanticipated<br>events.<br>All data presented herein is as of June 30, 2023 unless otherwise noted.<br>Amounts may not sum to totals due to rounding.<br>Past performance does not guarantee future results.
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21<br>Disclosures<br>The following non-GAAP financial measures are used in this presentation<br>FFO and AFFO<br>Due to certain unique operating characteristics of real estate companies, as discussed below, NAREIT, an industry trade group, has promulgated a non-GAAP<br>measure known as FFO, which we believe to be an appropriate supplemental measure, when used in addition to and in conjunction with results presented in<br>accordance with GAAP, to reflect the operating performance of a REIT. The use of FFO is recommended by the REIT industry as a supplemental non-GAAP<br>measure. FFO is not equivalent to, nor a substitute for, net income or loss as determined under GAAP.<br>We define FFO, a non-GAAP measure, consistent with the standards established by the White Paper on FFO approved by the Board of Governors of NAREIT, as<br>restated in December 2018. The White Paper defines FFO as net income or loss computed in accordance with GAAP, excluding gains or losses from sales of<br>property, impairment charges on real estate, gains or losses on changes in control of interests in real estate and depreciation and amortization from real estate<br>assets; and after adjustments for unconsolidated partnerships and jointly owned investments. Adjustments for unconsolidated partnerships and jointly owned<br>investments are calculated to reflect FFO.<br>We also modify the NAREIT computation of FFO to adjust GAAP net income for certain non-cash charges, such as amortization of real estate-related intangibles,<br>deferred income tax benefits and expenses, straight-line rent and related reserves, other non-cash rent adjustments, non-cash allowance for credit losses on direct<br>financing leases and other assets, stock-based compensation, non-cash environmental accretion expense and amortization of deferred financing costs. Our<br>assessment of our operations is focused on long-term sustainability and not on such non-cash items, which may cause short-term fluctuations in net income but<br>have no impact on cash flows. Additionally, we exclude non-core income and expenses, such as gains or losses from extinguishment of debt and merger and<br>acquisition expenses. We also exclude realized and unrealized gains/losses on foreign currency exchange transactions (other than those realized on the settlement<br>of foreign currency derivatives), which are not considered fundamental attributes of our business plan and do not affect our overall long-term operating<br>performance. We refer to our modified definition of FFO as AFFO. We exclude these items from GAAP net income to arrive at AFFO as they are not the primary<br>drivers in our decision-making process and excluding these items provides investors a view of our portfolio performance over time and makes it more comparable<br>to other REITs that are currently not engaged in acquisitions, mergers and restructuring, which are not part of our normal business operations. AFFO also reflects<br>adjustments for unconsolidated partnerships and jointly owned investments. We use AFFO as one measure of our operating performance when we formulate<br>corporate goals, evaluate the effectiveness of our strategies and determine executive compensation.<br>We believe that AFFO is a useful supplemental measure for investors to consider as we believe it will help them to better assess the sustainability of our operating<br>performance without the potentially distorting impact of these short-term fluctuations. However, there are limits on the usefulness of AFFO to investors. For<br>example, impairment charges and unrealized foreign currency losses that we exclude may become actual realized losses upon the ultimate disposition of the<br>properties in the form of lower cash proceeds or other considerations. We use our FFO and AFFO measures as supplemental financial measures of operating<br>performance. We do not use our FFO and AFFO measures as, nor should they be considered to be, alternatives to net income computed under GAAP, or as<br>alternatives to net cash provided by operating activities computed under GAAP, or as indicators of our ability to fund our cash needs.
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22<br>Disclosures (cont.)<br>The following non-GAAP financial measures are used in this presentation<br>EBITDA and Adjusted EBITDA<br>We believe that EBITDA is a useful supplemental measure to investors and analysts for assessing the performance of our business segments because (i) it removes<br>the impact of our capital structure from our operating results and (ii) it is helpful when comparing our operating performance to that of companies in our industry<br>without regard to such items, which can vary substantially from company to company. Adjusted EBITDA as disclosed represents EBITDA, modified to include other<br>adjustments to GAAP net income for certain non-cash charges, such as impairments, non-cash rent adjustments and unrealized gains and losses from our hedging<br>activity. Additionally, we exclude gains and losses on sale of real estate, which are not considered fundamental attributes of our business plans and do not affect<br>our overall long-term operating performance. We exclude these items from adjusted EBITDA as they are not the primary drivers in our decision-making process.<br>Adjusted EBITDA reflects adjustments for unconsolidated partnerships and jointly owned investments. Our assessment of our operations is focused on long-term<br>sustainability and not on such non-cash and noncore items, which may cause short-term fluctuations in net income but have no impact on cash flows. We believe<br>that adjusted EBITDA is a useful supplemental measure to investors and analysts, although it does not represent net income that is computed in accordance with<br>GAAP. Accordingly, adjusted EBITDA should not be considered as an alternative to net income or as an indicator of our financial performance. EBITDA and adjusted<br>EBITDA as calculated by us may not be comparable to similarly titled measures of other companies.<br>Other Metrics<br>Pro Rata Metrics<br>This presentation contains certain metrics prepared on a pro rata basis. We refer to these metrics as pro rata metrics. We have a number of investments, usually<br>with our affiliates, in which our economic ownership is less than 100%. On a full consolidation basis, we report 100% of the assets, liabilities, revenues and expenses<br>of those investments that are deemed to be under our control or for which we are deemed to be the primary beneficiary, even if our ownership is less than 100%.<br>Also, for all other jointly owned investments, which we do not control, we report our net investment and our net income or loss from that investment. On a pro rata<br>basis, we generally present our proportionate share, based on our economic ownership of these jointly owned investments, of the assets, liabilities, revenues and<br>expenses of those investments. Multiplying each of our jointly owned investments’ financial statement line items by our percentage ownership and adding or<br>subtracting those amounts from our totals, as applicable, may not accurately depict the legal and economic implications of holding an ownership interest of less<br>than 100% in our jointly owned investments.<br>ABR<br>ABR represents contractual minimum annualized base rent for our net-leased properties and reflects exchange rates as June 30, 2023. If there is a rent abatement,<br>we annualize the first monthly contractual base rent following the free rent period. ABR is not applicable to operating properties and is presented on a pro rata<br>basis.
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