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Date

Wednesday, April 29, 2026 at 11:00 a.m. ET

Call participants

  • Chief Executive Officer — Jason E. Fox
  • Chief Financial Officer — Toni Ann Sanzone
  • Head of Asset Management — Brooks G. Gordon
  • Chairman — Peter Sands

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Takeaways

  • AFFO per share -- $1.30 for the quarter, representing an increase of $0.13, or 11.1%.
  • Full-year AFFO guidance -- Raised to $5.16-$5.26 per share, implying 4.8% growth at the midpoint.
  • Investment volume -- $680 million completed year to date, with full-year guidance increased to $1.5-$2 billion.
  • Investment pipeline -- Over $5 billion in advanced stages, including a significant U.S. industrial sale-leaseback close to closing.
  • Average cap rate of closed deals YTD -- 7.2%, with full-year expectation around 7.5%.
  • Capital projects -- Four delivered totaling $68 million year to date; 11 projects totaling $280 million set to deliver within twelve months.
  • Portfolio occupancy -- 98.1%, an increase from the prior quarter.
  • Rent escalations -- Three quarters of YTD investments have CPI-based increases; fixed bumps average 2.8% annually.
  • Contractual same-store rent growth -- 2.4% for the quarter; full-year expectation in the mid-2% range.
  • Comprehensive same-store rent growth -- 1% for the quarter, driven lower than contractual by vacancy impacts.
  • Asset sales -- $163 million in proceeds, including $75 million from operating self-storage assets, finalizing exit from the self-storage segment.
  • Potential rent loss guidance -- Lowered to $8-$12 million (approximately 50-75 basis points of ABR).
  • Liquidity -- $2.8 billion at quarter end, including cash, credit facility, and unsettled forward equity.
  • Net debt to adjusted EBITDA -- 5.3x including forward equity; 5.7x excluding, both within target range.
  • Debt issuance activity -- €1 billion Eurobond issued in two tranches (3.25% and 3.75% coupon), reducing refinancing risk and funding new investments.
  • Equity capital raised -- 6.9 million shares sold on a forward basis for $497 million gross proceeds; $653 million in anticipated net proceeds from 9.7 million shares remaining to be settled post quarter-end.
  • Dividend -- Increased 4.5% year over year to $0.93 per share; payout ratio is 72%.
  • Full-year disposition guidance -- Maintained at $250-$750 million, with flexibility dependent on opportunities and capital allocation needs.
  • Major tenants from recent deals -- Go Auto (now among top 25 tenants by ABR) and Raben acquired in large, cross-border transactions.

Summary

W. P. Carey (WPC 1.00%) reported quarter-end liquidity of $2.8 billion, with minimal remaining 2026 debt maturities and proactive refinancing completed early in the year. The company’s heavy pipeline—totaling over $5 billion—supports raised investment and AFFO guidance, underpinned by significant deal flow weighted toward higher-yielding industrial and international assets. The completed sale of operating self-storage assets marks the company’s exit from that segment and ongoing portfolio simplification. Executives highlighted that 60% of YTD investments were allocated to warehouse and industrial property types, with most closed transactions occurring in Europe and Canada, benefiting from lower financing costs. Management indicated continued progress on tenancy diversification and portfolio risk mitigation, as seen by increased exposure to CPI-based rent escalators and lower expected rent loss this year.

  • W. P. Carey settled 3.45 million shares of forward equity in the first quarter, with $247 million in net proceeds realized and over $650 million of additional proceeds anticipated from shares not yet settled.
  • Eurobond issuance and a Canadian dollar term loan during the quarter supported investment activity at average interest rates of 3.5% for Eurobonds and 3.1% for the Canadian facility.
  • Reductions in potential credit loss and watch list exposures were specifically attributed to decreasing ABR from tenants Hellweg and Cornerstone, per management commentary.
  • W. P. Carey expects total non-reimbursed property expenses of $56-$60 million this year, with higher second-quarter costs anticipated from demolition activity.
  • New investments reflected a heavy mix of industrial and retail, highlighted by a Go Auto sale-leaseback in Greater Vancouver, and a major European logistics acquisition in Poland.

Industry glossary

  • ABR: Annualized Base Rent; the total rent contracted to be received on an annual basis from tenants, a key metric for REITs.
  • Cap rate: The ratio of a property’s net operating income to its purchase price, representing the expected rate of return on an investment property.
  • Comprehensive same-store rent growth: Rent growth measure factoring in vacancies, re-leasing, and lease restructurings, unlike contractual rent growth limited to in-place agreements.
  • CPI-based rent escalation: Lease term provision where rent increases are indexed to changes in the Consumer Price Index, providing an inflation hedge.
  • Forward equity: Equity capital raised via agreements to issue shares in the future, often to pre-fund acquisition and investment needs.

Full Conference Call Transcript

Jason E. Fox: Thanks, Peter. Good morning, everyone. I am pleased to say we started the year with continued strong execution across the business, particularly in our investment activity and capital raising, building on the foundation we have established for attractive, sustainable growth. Given our performance to date, we are raising our full-year guidance for both investment volume and AFFO per share, reflecting the investments we have completed to date, the strength of our pipeline, and a more favorable outlook for estimated rent loss. This morning, I will briefly recap some of the highlights from the quarter, focusing on our investment activity. Toni Ann Sanzone, our CFO, will then take you through the details behind our results, balance sheet, and guidance.

We are joined by Brooks G. Gordon, our Head of Asset Management, to help answer your questions. Starting with our investment activity, so far this year we have completed investments totaling approximately $680 million. Our pipeline remains very strong, with over $5 billion of deals currently at advanced stages, including the sale-leaseback of a large industrial portfolio in the final stages of closing. That gives us clear visibility into well over $1 billion of investments. Importantly, we continue to see strong momentum in our deal flow, with no noticeable impact on transaction activity to date from recent geopolitical tensions.

Given our activity and outlook, we have raised our guidance range for full-year investment volume from $250 million to between $1.5 and $2 billion. Factoring in what we have already closed, our current pipeline, and the capital projects we have delivering this year results in an average cap rate of approximately 7.5%, and for the full year, we expect to remain around that level. We continue to transact across a range of cap rates, and the deals we have closed year to date have generally skewed toward the low end of our target range and below where our pipeline is pricing, with closed transactions averaging 7.2%.

This largely reflects timing, as it includes some of what we expect to be our tightest cap rate deals over the first half of the year. I would also highlight that our investment activity to start the year has been mostly weighted towards Europe and Canada, where we secured lower cost debt during the quarter, including a two-tranche Eurobond offering at a 3.5% average coupon and a Canadian dollar term loan at just over 3%, helping maintain attractive spreads to our going-in cap rates. We also continue to originate deals with fixed rent bumps averaging in the high 2% range or with CPI-based rent escalations.

As a result, we are still achieving average yields of around 9% over long lease terms. During the first quarter, we allocated the majority of our capital to warehouse and industrial properties, which accounted for approximately 60% of investment volume. Retail represented the remaining 40%, driven largely by the sale-leaseback we completed with Go Auto for a portfolio of auto dealerships with strong site-level coverage concentrated in the Greater Vancouver area. Go Auto is the second largest automotive dealership group in Canada and now ranks among W. P. Carey Inc.'s top 25 largest tenants by ABR.

We completed four capital projects during the quarter, totaling $68 million, which are included in our year-to-date investment volume, and added a handful of small projects scheduled to deliver later this year. In total, we have 11 capital projects totaling approximately $280 million delivering over the next twelve months. These projects are generating cap rates incrementally higher than both our year-to-date investments and our full-year expectations, providing attractive risk-adjusted returns. As I have discussed in prior calls, these projects—particularly the expansions—frequently deliver above-market yields while also extending lease terms and enhancing the strategic importance of the assets involved.

Given the size of our portfolio and our long history in this area, further supported by our recent Carey Tenant Solutions initiative, we believe we are well positioned to expand this highly attractive proprietary source of deal flow. Our internal growth also remains strong and continues to trend higher on new investments, and if inflationary pressures from higher energy prices persist, our portfolio is uniquely positioned to benefit, given the high proportion of ABR with rent escalations tied to CPI. Lastly, turning to our sources of capital, our investment activity continues to be supported by well-executed capital raising, driven by the debt issuance and forward equity sales we completed in February.

In addition to further strengthening our balance sheet, these actions have effectively pre-funded our investment needs for 2026. We have also locked in attractive pricing and meaningfully reduced our exposure to potential further capital markets volatility this year. As a result, we are confident we can continue deploying capital throughout 2026. As a reminder, we also expect to generate around $300 million of retained cash flow this year, providing an additional source of equity capital. And while additional asset sales are not a core part of our funding strategy, we continue to have the flexibility to pursue additional accretive dispositions at attractive cap rates if needed.

Let me pause there and hand the call over to Toni to discuss our results, balance sheet, and guidance in more detail.

Toni Ann Sanzone: Thanks, Jason, and good morning, everyone. Starting with earnings, AFFO per share was $1.30 for the first quarter, which represents a $0.13, or 11.1%, increase compared to the first quarter of last year. Accretive investment activity continues to drive our year-over-year growth, having closed $2.8 billion of investments since the start of 2025 at accretive cap rates and healthy spreads to our funding sources. As we mentioned, given the pace and volume of our investment activity to start the year, as well as the strength of our pipeline, we have raised our expectations for both full-year investment volume and AFFO per share.

As outlined in our earnings release, we have increased our investment volume guidance to a range of $1.5 to $2 billion, which together with lower estimated potential rent loss results in an aggregate $0.03 increase to our AFFO per share guidance at the midpoint. For 2026, we therefore currently expect AFFO per share to total between $5.16 and $5.26, implying 4.8% growth at the midpoint. Turning to our portfolio, starting with dispositions, first-quarter asset sales generated gross proceeds totaling $163 million. This included the sale of the 11 remaining operating self-storage properties in our portfolio for $75 million.

With that, we have now completed our exit from operating self-storage, further simplifying our business, and generating aggregate proceeds of approximately $860 million at an average cap rate just below 6%, which we have recycled accretively into higher-yielding investments. Contractual same-store rent growth for the quarter was 2.4% year over year, with both fixed and CPI-linked rent escalations averaging 2.4%. For the full year, we continue to expect contractual same-store rent growth to average in the mid-2% range. We continue to achieve strong rent escalations on our new investments. About three quarters of our investment volume during the first quarter had leases with rent increases tied to CPI, while the other one quarter had fixed rent escalations averaging 2.8% annually.

Comprehensive same-store rent growth for the quarter, which takes into account the impacts of re-leasing, rent collections, vacancies, and lease restructurings, was 1%, with the variance to contractual driven largely by the impact of vacancy during the quarter. Given the nature of this metric, comprehensive same-store rent growth can vary from period to period, often due to one-time items or properties moving in and out of the same-store pool. Historically, our comprehensive same-store rent growth has trailed contractual by approximately 100 basis points on average, and we believe that is a reasonable estimate for the portfolio over the long term.

Portfolio occupancy at the end of the first quarter was 98.1%, up slightly from the fourth quarter, and is expected to improve further as we continue to re-tenant or dispose of vacant assets. Our portfolio continues to perform well, with no new material changes in credit throughout the portfolio so far this year. We have therefore lowered the potential rent loss assumption embedded in our AFFO guidance to between $8 million and $12 million, or about 50 to 75 basis points of ABR, down from our prior estimate of $10 million to $15 million. Based on what we see today, we would still characterize our revised assumption as conservative.

Our first-quarter re-leasing activity resulted in the overall recapture of 103% of prior rents on 1.4% of portfolio ABR and added just over five years of weighted average lease term. Other lease-related income for the first quarter was $10.5 million, in line with our expectations, and includes termination income related to redevelopment work that commenced this quarter. Based on our current visibility, we expect other lease-related income for the second quarter to be in line with the first quarter, and to total in the low- to mid-$30 million range for the full year as we continue to proactively manage our portfolio.

Non-reimbursed property expenses totaled $14.6 million for the quarter, which includes approximately $1.2 million of demolition costs related to redevelopment work as we discussed on our last call. We expect to incur additional demolition costs in the second quarter, which would increase non-reimbursed property expenses further before resuming to a more normalized run rate in the back half of the year. For the full year, we continue to expect non-reimbursed property expenses to total between $56 million and $60 million. G&A expense totaled $27.3 million for the first quarter, in line with our expectations, since the first quarter tends to be the highest of the year for G&A given the timing of payroll taxes.

For the full year, we continue to expect G&A to total between $103 million and $106 million, with the second quarter resuming a more regular run rate. Moving to our balance sheet, we were very active in the capital markets during the first quarter, accessing close to $2 billion of capital across a variety of sources, taking proactive steps to further strengthen our balance sheet and ensure we are well positioned to fund our projected investment activity. In February, we issued €1 billion of senior unsecured notes, comprising two €500 million tranches, with coupon rates of 3.25% on a long five-year maturity and 3.75% on a long nine-year maturity.

We executed during a particularly attractive window, with proceeds used to address our April Eurobond maturity, which we repaid in March, to retire a €215 million term loan, and to increase our overall liquidity to support externally driven growth. In March, we amended our credit agreement, replacing the euro term loan I just mentioned with a new Canadian dollar term loan at a current all-in rate of approximately 3.1%, with proceeds used to fund our Canadian investment activity. At the same time, we were able to improve our overall revolver pricing grid by five basis points at all levels, incrementally lowering our cost of debt.

We also successfully executed in the equity markets during the quarter, selling 6.9 million shares on a forward basis, representing total gross proceeds of $497 million. This, combined with the forward equity we sold under our ATM program in 2025, gives us enough runway to execute investment volume above the top end of our current guidance range. At the end of the first quarter, we settled 3.45 million shares under forward sale agreements for net proceeds totaling $247 million, leaving us with 9.7 million shares remaining to be settled, representing anticipated net proceeds of $653 million as of March.

Driven by our capital markets activity, we ended the first quarter with substantial liquidity totaling approximately $2.8 billion, including availability on our credit facility, cash on hand, and unsettled forward equity. Our remaining debt maturities this year are minimal, primarily comprising the $350 million of U.S. bonds we have maturing in October. The weighted average interest rate on our debt remains low at 3.1% for the first quarter, and is expected to remain in the low to mid-3% range for the full year after taking into account our recent bond issuances. Net debt to adjusted EBITDA ended the quarter at 5.3x, inclusive of unsettled forward equity.

Excluding the impact of unsettled forward equity, net debt to adjusted EBITDA was 5.7x, down from 5.9x at year end, and well within our target range of mid- to high-5x. Lastly, on our dividend, in March, we increased our quarterly dividend 4.5% year over year to $0.93 per share, maintaining a healthy payout ratio of 72%. Based on our current stock price, that equates to an attractive annualized dividend yield of over 5%. We expect our dividend to continue to grow in line with our AFFO growth while maintaining a conservative payout ratio. And with that, I will hand the call back to Jason.

Jason E. Fox: Thanks, Toni. In closing, we are pleased with our performance year to date, driven by the continued momentum in our investment activity, the strength of our pipeline, and our capital markets execution, all of which position us well to continue executing going forward. As we look ahead, we remain confident we are on track to deliver double-digit total shareholder returns again in 2026—and that is before any multiple expansion. Our projected earnings growth compares favorably across the net lease sector, and over time, we would expect that to be further reflected in our trading multiple. That concludes our prepared remarks. We will now open the call for questions.

Operator: Thank you. At this time, we will take questions. If you would like to ask a question, simply press star then the number one on your telephone keypad. Our first question comes from Michael Goldsmith with UBS. Please state your question.

Michael Goldsmith: Good morning. Thanks a lot for taking my questions. First, you have a third of the portfolio in Europe and continue to acquire there. Are you seeing any impact, or is there any worry that you have just given some of these global macro events, and also just the conflict in Iran? Is that having any impact on your portfolio in Europe?

Jason E. Fox: No. I guess there is a little bit more potential for uncertainty in Europe, given higher energy prices there, but it has not impacted us. When you think about our portfolio, it is diversified. We mainly have very large companies that can ride through different cycles, and we have shown that in the past. So there are not big concerns there. We feel good about the portfolio. We have not seen anything yet. I think that is certainly something I can say definitively.

Michael Goldsmith: Thanks for that, Jason. My follow-up question is, you said in the prepared remarks you have effectively pre-funded your investment needs for 2026. How are you thinking about funding going forward? Do you sit back and wait to see what comes to you and be opportunistic with your fundraising, or is this the time where you can be a little bit more aggressive, start to pre-fund 2027, and then if the volumes continue to pick up in 2026, it gives you the position to be more aggressive? Just trying to understand your thoughts in the funding environment and what is next there.

Jason E. Fox: Yes. I mean, we are sitting on $650 million of forward equity right now that is left to be settled. We have lots of liquidity, as you pointed out. In terms of more equity, I would say if there are good opportunities to get ahead of our needs for 2027 and raise more equity, we will always consider that. We are certainly comfortable where we are today, and a lot of it will depend on the investment opportunity set and what that looks like. That is probably going to be the biggest driver, but bottom line is we really do not have any visibility needs right now, so we can be, I think your word was, opportunistic.

Michael Goldsmith: Thank you very much. Good luck in the second quarter.

Jason E. Fox: Thanks.

Operator: Your next question comes from Jana Galan with Bank of America. Please state your question.

Jana Galan: Good morning. Could you please provide any updates on the Carey Tenant Solutions platform?

Jason E. Fox: Yes, sure. We talked about this in some detail on last quarter’s call. These are the types of construction projects that we have been doing for quite some time, dating back several decades. They include build-to-suits and redevelopments, and the reason why we have been more deliberate about talking about it is to make sure that people understand this is part of our business, and it is another part that we think we can grow. Part of the branding around it is to formalize it and be a little bit more holistic in our outreach to our tenants.

If you look historically at what we have done, it has probably been around $200 million per year—this will vary from year to year, but that is a decent average—and we think that can perhaps get bigger. One of the benefits of being a large REIT like we are is we have built up a very capable in-house project management team, and that is a real competitive advantage. In our outreach to tenants, what we can offer them—various development services and other solutions—can lead to follow-on deals. Currently, we have about $280 million of projects in process, and about $180 million of that will complete this year.

Beyond that, there is a really active pipeline of potential projects that we would expect to move along over the coming quarters.

Jana Galan: Thank you. And then also, with the self-storage operating assets, this disposition is now completed. What additional assets are you targeting to meet your full-year disposition guidance? And any plans on the other five operating assets?

Jason E. Fox: Brooks, you want to take that?

Brooks G. Gordon: Sure. As Toni mentioned, we maintain a pretty flexible disposition strategy for the year this early in the year—a range between $250 million and $750 million—so we really value that flexibility. In terms of other operating assets, we have a few hotels and one student housing property that we are evaluating for dispositions, potentially in the back half of this year but also potentially into next year. It is something we are looking at, but again, we maintain a lot of flexibility from a liquidity and capital perspective, so the investment pipeline will help drive where we land in that range.

Operator: Your next question comes from Anthony Paolone with JPMorgan. Please state your question.

Anthony Paolone: Great. Thanks. Good morning. Can you talk about the investment pipeline and what the geographic skew looks like at the moment, and also the property type buckets—where you are seeing more or less—and just where the dispersion around that mid-7s cap rate resides?

Jason E. Fox: Yes, sure. The pipeline remains strong. I mentioned earlier that it includes over a half-billion dollars of identified transactions, some of which are in advanced stages, and it includes one larger sale-leaseback of a sizable industrial portfolio in the U.S. that should close over the next couple of weeks. We also have around $180 million of capital projects that are scheduled to complete this year, so that is all part of the visibility into deal volume we have this year. In terms of geography, Europe continues to ramp. Of the deals closed year to date, about half were in Europe—a deal in Poland, Raben, was the largest—another 30% was in Canada, and the remainder was in the U.S.

For Europe, we see a continuation of the increased activity that we started seeing in the second half of last year, but that does not mean the U.S. is slowing. The pipeline is roughly back in line with our ABR mix—about two thirds in the U.S. and one third in Europe right now. By property type, consistent theme for us, we continue to see interesting opportunities in industrial—both manufacturing and warehouse. Year to date about 60% were industrial, and two thirds of that were warehouse. We also saw a pickup in retail, largely driven by the Go Auto deal we talked about earlier.

The pipeline is more heavily weighted towards industrial—probably 80% right now—but there are a lot of opportunities at the top of the funnel that will come in as well.

Anthony Paolone: And then you all historically had a strong tie-in with private equity. Have some of the challenges on the private credit side had any implications on your deal pipeline, either making sale-leasebacks more attractive or generally having any impact on your tenant base?

Jason E. Fox: Let me start on the deal impact. Our expectations are that sale-leasebacks could become a more interesting opportunity for some private equity-backed companies if there is a void with private capital to the extent underwriting or capital flows tighten up there. I would not say that is a theme we are seeing right now, but it is certainly a possibility that could emerge more. Brooks, I do not know if you are seeing anything within our portfolio related to private credit.

Brooks G. Gordon: No, we have not seen really discernible specific impacts. It is something we will continue to watch, but that has not been a factor as of yet.

Operator: Your next question comes from Smedes Rose with Citi. Please state your question.

Smedes Rose: Hi. Thanks a lot. In the past, you have spoken about leaning into retail more—you obviously completed some in Canada this quarter. How do you think about the rent escalators in that segment versus maybe in other asset classes?

Jason E. Fox: Yes, sure. There is a difference. Market standards for retail tend to be lighter bumps than what we are able to negotiate in industrial and warehouse. That makes sense. The warehouse market has grown substantially over the last couple of years in terms of rent growth, and a lot of the bumps we put into our leases are meant to be a proxy for market rent. The rents for warehouses or manufacturing plants for industrial companies tend not to be a big part of their cost inputs, whereas retail rent typically is their biggest expense, so there is more focus on that, and that is why historically you have seen flatter leases.

Where we target—sub-investment-grade retail—bump structures are probably on average in the 1.5% to 2% range, compared to industrial where we are seeing more like 2.5%, 3%, or even above that. Once you get into investment-grade retail—which we view as the commodity segment of net lease and tend not to participate in all that much—those leases tend to be even flatter, and really, the only way to differentiate yourself when investing there is through pricing. So there are meaningful differences between the two in terms of bump structures.

Smedes Rose: Thanks. And you mentioned some tighter cap rate spread deals you are looking at in 2026. Does that pertain to larger industrial portfolios, or is it more for one-off opportunities? Any commentary on pricing across larger deals versus smaller deals?

Jason E. Fox: It is not related to larger or smaller deals. The reference to the tighter cap rates was to the deals we have closed year to date—about $680 million—blended towards the lower end of our target range at 7.2%. My expectation is that those will be some of the tighter cap rate deals we close this quarter. Those also, importantly, were mostly in Europe and Canada where our borrowing costs are meaningfully cheaper than in the U.S., so despite the lower cap rate, we did see attractive spreads.

The other half of this is our pipeline, in addition to our capital investment projects delivering this year, are more in the upper end of our target range, which helps us blend to the mid-7s for the year. Overall it feels like cap rates have been relatively stable for the year despite macro volatility. Hard to predict what will happen in the second half, but because we transact across a wide range of cap rates, sometimes timing or mix will create some dispersion. I do not think it is any read-through to market trends or specific geographies or asset classes.

Operator: Your next question comes from Ryan Caviola with Green Street Advisors. Please state your question.

Ryan Caviola: Good morning. Thanks for taking my question. A quick one on onshoring. This trend should be a tailwind for the in-place industrial portfolio. Do you think those tailwinds will lead to more competition in bidding, with new buyers interested in industrial net lease, and will this lead to a continued focus on industrial acquisitions in Europe, or do you see it being an overall benefit for all buyers in that space?

Jason E. Fox: I think it is the latter. To the extent there is more onshoring or reshoring, we stand to benefit substantially. We are one of the larger owners of industrial properties, especially manufacturing, and to the extent it increases demand on the types of buildings that we own, we think that is good for rent growth and for the criticality factor that we underwrite in the buildings that we own. Could it attract more competition? Perhaps. If a particular end of the market becomes more attractive, you could see some capital flows in there, but it is a big market, and I think the positives would outweigh any kind of increased competitive capital flows.

Ryan Caviola: Thank you. And on the mix between new deals—embedding inflation-based increases in the lease versus focusing on higher fixed escalators—can you update us on where that stands and if this differs by country or industry?

Jason E. Fox: Since the spike in inflation four or five years back, CPI-based leases have gotten to be a little more difficult to negotiate into new deals, particularly in the U.S. In 2025, about a quarter of our deals had CPI-linked increases. So far this year, it is actually the opposite—about three quarters of deals closed to date were CPI-based. That is a function of geography more than anything else. In Europe, it is customary to have inflation-based increases embedded, and year to date more of our deals have been in Europe. The Go Auto deal in Canada also has a CPI-based increase. We certainly value having that inflation hedge built into our portfolio.

When we do not get inflation-based increases, the effects of higher inflation have still flowed through to our fixed increases, where historically our average fixed increase is closer to 2%, whereas the last three or four years we are probably 50 to 100 basis points above that on new deals with fixed increases. It is a good reminder of the differentiation of our portfolio compared to many of our net lease peers—we have substantial internal growth built into our model as opposed to just relying on spread investing and external growth.

Operator: Your next question comes from Mitch Germain with Citizens Bank. Please state your question.

Mitch Germain: Jason, to follow up on that topic, is it more standard to have a CPI-based lease in Europe versus what is acceptable here in the U.S.?

Jason E. Fox: Yes, it is definitely more standard and customary in Europe. We have always made it part of our model to the extent we can in the U.S. We have been around for fifty-something years at this point, and a lot of this dates back to the 1980s—themes of trying to create an inflation hedge within a fixed-income-type stream that net lease can sometimes be—and we think we have done a good job of that.

Mitch Germain: Got you. And clearly there is a lot of momentum in the business. Are you seeing some of the buyers that for the last couple of years have been on the sidelines reemerge? Is there any real change in the competitive balance within the investment sales markets?

Jason E. Fox: The net lease market has always been competitive, especially in the U.S. There have been some new entrants over the last couple of years. Some of the big asset managers have acquired other platforms. One thing we have observed—and we have heard this from some bankers as well—is it does not necessarily mean there are incrementally new players in the business; many of them have just changed brands from being independent to being part of a big asset manager. Regardless, it does not feel like it has been impactful. Ultimately, the results speak for themselves as we continue to generate substantial deal volume at attractive pricing and spreads, irrespective of competition. Beyond pricing, we have a lot of competitive advantages.

We have been doing this for a long time. Experience and execution really matter, especially when we are focused on more complex sale-leasebacks, and our track record and reputation in the market help differentiate us. It all seems manageable, and it is not showing up in the numbers.

Operator: Your next question comes from Eric Borden with BMO Capital Markets. Please state your question.

Eric Borden: Hey, good morning. Thanks for taking my question. I understand the spread between contractual and comprehensive growth can fluctuate from quarter to quarter, and over the long term the average spread has been around 100 basis points. What is your expectation for that spread for the remainder of the year, as it sounded like you may have some vacancies to address?

Toni Ann Sanzone: Sure. I think you covered the highlights. On the contractual side, we are expecting around mid-2% growth from our contractual lease escalations. On the comprehensive side—again factoring in vacancies, probably the biggest impact we see over the course of this year—it does move around from quarter to quarter due to items like collecting rents or recovery of rent in any one period. The 100 basis points is a good round number we use as our historical average and is a good estimate over the long term.

Factoring that in, we could see the range for this year being between 1%–2% on the comprehensive side, but it really does depend on how soon we address vacant asset dispositions and the timing of things like rent recoveries.

Eric Borden: That is helpful. And Jason, going back to your comments around your well-capitalized European tenant base who can absorb oil shocks and supply chain volatility, do you have any exposure to less capitalized tenants or tenant categories with higher sensitivity to commodity price swings, and how are you underwriting or monitoring that risk today?

Jason E. Fox: Brooks, do you want to take that? It is a broad question.

Brooks G. Gordon: The key point is what Jason mentioned: broad diversification, long-term leases, and high criticality. We transact with businesses of all sizes, from the biggest in the world to smaller companies. The bulk of our tenants by a large margin are large, well-capitalized companies, and that remains true in Europe as well. Our overall view of an oil shock is it is a risk we need to monitor very closely. We have not thus far seen direct impact. It is something we will pay close attention to. Our portfolio is constructed intentionally to absorb shocks or headwinds, and we have seen that a number of times over the decades. We are confident in that, and diversification is really key.

Operator: Your next question comes from Jim Kammert with Evercore ISI. Please state your question.

Jim Kammert: Good morning. Thank you. Are you willing to provide a little bit of color in terms of financial data regarding, say, Raben and Go Auto? Both from their websites look to be pretty substantial companies, but I think they are both privately owned, if I am not mistaken. Can you provide a little financial color around the size and scope of those companies?

Jason E. Fox: Yes. They are private companies, so we are under some restrictions in terms of talking about financial details. With Go Auto, we noted earlier that they are the second largest auto dealership platform in Canada. They are diversified across pretty much all the OEMs or brands, and they have had growth over many years at this point. I think sales for them are greater than $3 billion. I think Raben is also a large company. They are a Dutch company and one of the largest 3PL operators in Poland. I do not think we can talk about revenue or EBITDA, but they are one of the market leaders in the Poland market from a 3PL standpoint.

Jim Kammert: That is helpful. And as a derivative of the first question, it seems like you have knocked out a growing list of $200 million-plus transactions—Lifetime last year, and we just talked about Raben and Go Auto. Is that just happenstance, or is there some message to read into that in terms of your investing efficiency and where you are spending your time on the external side?

Jason E. Fox: I would say the majority of our deals typically fall within the $25 million to $100 million range. The average transaction is maybe around $50 million, perhaps a little bit bigger than that. But we do consistently see larger deals; they are part of our regular deal flow. In any given year, we would expect to bid on a number of larger sale-leasebacks—$200 million, $300 million, or even larger. You mentioned Go Auto and Raben, and last year, Life Time. We tend to complete several larger deals each year. We also have one larger sale-leaseback in the pipeline—an industrial deal in the U.S.—that should close over the next week or two.

It is part of the deal flow, and one of the benefits of our scale is that we can do larger deals as a regular part of our business.

Operator: Your next question comes from John Kilichowski with Wells Fargo. Please state your question.

John Kilichowski: Hi, good morning. Thanks for taking my question. My first one is on the new credit loss guide. Last quarter you talked about there not being any specific items you were looking into. Is there anything now this quarter that you have some sense of as to where credit is going to turn out, or is the $8 million to $12 million number still more of an open-ended space for things that may come up in the rest of the year?

Jason E. Fox: Toni, do you want to touch on the range and how that has changed? And then maybe, Brooks, you can give a little bit of color on credit watch.

Toni Ann Sanzone: I would say it is more the latter. We have not seen any material credit change in the portfolio since the start of the year, amongst our watch list and more broadly. With four months of good rent collections behind us and our current view of the tenants, we felt comfortable bringing down the range. The range is still larger than our typical historical losses, but that is more about being prudent in this uncertain macro environment—ensuring we are covered in a number of scenarios—rather than anything we are seeing currently in the portfolio.

Brooks G. Gordon: On credit watch generally, as Toni mentioned, it is pretty stable. We lowered the rent loss assumption range, which is the most direct tool we can offer you there. The watch list came down slightly as well. Some color: Hellweg remains the biggest exposure there—about 1% by ABR—and coming down quite quickly. We are on track to have that out of our top 25 around midyear. The only other tenant of note is Cornerstone, which is about 60 basis points of ABR. They are the largest exterior building products manufacturer—very large company, over $5 billion in revenue. They have been on watch. We expect they will restructure their balance sheet at some point; it is over-levered.

But we own very critical real estate and do not expect any impact there. The rest of the credit watch list is really diversified and much smaller tenants.

John Kilichowski: That is helpful. Thank you. Earlier, you gave some helpful color around some operating assets that you may be selling the rest of the year. Can you give some idea of the buckets of capital you are considering selling and the cap rates you think you could blend to for the rest of the year?

Brooks G. Gordon: As I mentioned, it is difficult to pin down with precision because we are maintaining a lot of flexibility in the disposition plan. Roughly at the midpoint, you can view it as split into two buckets. The first is a noncore, accretive exit—primarily operating properties. The final tranche of storage was the biggest piece. We are evaluating one student housing property and several hotels for the second half. Too early to determine exact timing. A few other noncore opportunities, including that we exited post quarter our only remaining Asian asset at a very good price. That is your first bucket.

The balance is risk mitigation and vacancy—transactions such as the former JOANN warehouse we sold, which we discussed last call—sold at a very attractive cap rate, mid-5s cap rate on the prior rent. Also, Hellweg assets we have been exiting and a few warehouse assets. From a pricing perspective, the first bucket would be mid-6s cap rate range, depending on what closes. The second bucket is harder to pin down at this point in the year, but considering there is some vacancy embedded, it is going to be a nice earnings tailwind in any event.

Operator: Before we take the next question in queue, a reminder to ask a question, press star 1 on your phone now. We are also accepting additional questions from those who have already asked one. Next question comes from Greg McGinniss with Scotiabank. Please state your question.

Greg McGinniss: Hey, good morning. Jason, how are you thinking about geographic diversity and density in certain countries in Europe? With Poland now your number one international exposure following the Raben acquisition, do you expect to see further increase in exposure there, or is there a limit at a country or regional level that you think is best for the portfolio?

Jason E. Fox: There is no specific cap or maximum exposure, but we are certainly very mindful of diversification. At the same time, given our scale, it would take some meaningful, sizable transactions to really move the needle. We have been investing in Poland for over two decades, and it has become a core piece of the broader European net lease market. For those who do not follow Europe as closely, it is the sixth-largest economy in the EU, a top-20 economy globally, and one of the fastest growing in the EU. Projected growth is about 3.3% this year. It is an attractive market for us.

The bulk of what we own there supports supply chains for large multinational companies—both manufacturing and logistics assets—that serve as a low-cost manufacturing and logistics hub into Western Europe. We will stay active there, but we are mindful that it has become about 5% of our portfolio. It is not a huge exposure, but we keep an eye on it.

Greg McGinniss: Thanks for the color. With visibility into over a billion dollars of deals at this point of the year, do you see investment guidance as conservative, or is there some expectation for deals to slow into year-end?

Jason E. Fox: We are confident we will continue generating higher deal volume throughout the year as we did last year. From a guidance perspective—we did this last year—we want to take a measured approach. Last year that led to a series of increases, and that is our preference going forward. Last quarter, our initial guidance was a starting point, and we just increased that by $50 million at the midpoint. As we progress through the year and get more visibility into the back half, we will refine that range and hopefully raise it further. We are off to a good start. You mentioned the billion dollars of visibility, which includes almost $700 million of closed investments to date.

The elements are there for another strong year, and we will reflect that in our guidance as appropriate as the year progresses.

Operator: Your next question comes from Jason Wayne with Barclays. Please state your question.

Jason Wayne: Hi. Thanks for the question. Looking at the lease expiration schedule, quarter over quarter, lease expirations came down as a percentage of ABR this year and next year. How much of that is due to looking at upcoming maturities proactively versus just changes in the portfolio?

Brooks G. Gordon: As you noted, we have been making a lot of progress on lease expirations. That cadence is pretty normal for us. The track record over the past ten or so years has been very good on rent recapture—around 100%—and very low TIs; you can see that flowing through our disclosure numbers. In other cases, we have noted a few assets where we are looking to re-lease, and we are working through those—that is part of it as well. From a lease expiration outlook perspective, 2026 is very manageable at about 1.8% by ABR. That is coming down quickly, and we are making good progress. We have a couple of nonrenewals expected in Q4.

These are high-quality warehouses with low market rents, so we are optimistic we will be able to push rents higher on those, but those are towards the end of the year, so not impactful to 2026. In 2027, we have about 3.5% expiring. That has come down a little bit subsequently as well from some renewals we achieved post quarter. It is a manageable year. One item to note is the expiration of the final tranche of net-leased Marriotts in 2025—around $5 million of ABR. We will exit those in due course, but there is coverage there, so there is no earnings impact. That is something we will look to address in 2027.

All in all, we are making good progress on lease expirations, and for assets with some nonrenewal, we are quite optimistic about our ability to push rent higher.

Jason Wayne: Alright. Thank you all.

Operator: At this time, I am not showing any further questions. I will now hand the call back to Mr. Sands.

Peter Sands: Great. Thank you, and thank you, everyone, for your interest in W. P. Carey Inc. If there are additional questions, please call Investor Relations directly at (212) 492-1110.

Operator: And that concludes today's call. You may now disconnect.