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W. P. Carey Inc. Closes $217 Million Sale-Leaseback of 49-Property Industrial Portfolio

U.S. and Canadian properties subject to guaranteed long-term triple-net leases

Apr 22, 2016

NEW YORK, April 22, 2016 /PRNewswire/ -- W. P. Carey Inc. (NYSE: WPC), a leading internally-managed net lease REIT specializing in corporate sale-leaseback and build-to-suit financing, and the acquisition of single-tenant net lease properties worldwide, announced today that it has acquired a 4.0 million square foot, 49-property industrial portfolio located in the U.S. and Canada for an aggregate purchase price of approximately $217 million. The properties are leased to wholly-owned subsidiaries of Forterra Building Products ("Forterra") for a period of 20 years and are guaranteed by Forterra.

W. P. Carey Closes $217 Million Sale-Leaseback of 49-Property Industrial Portfolio

Key Facts

  • Industry-leading concrete and pipe manufacturing company: Forterra is a multinational manufacturer of concrete and clay building products. Based in Irving, Texas, Forterra employs more than 5,400 people and operates more than 125 facilities with products available throughout the U.S., Canada and the United Kingdom.
  • Critical operating properties: The portfolio is comprised of 43 properties in the U.S. totaling approximately 3.5 million square feet and six  properties in Canada totaling approximately 0.5 million square feet, which combined represent a significant portion of Forterra's concrete gravity pipe and concrete pressure pipe manufacturing operations. Composed primarily of multiple buildings located near major freeways, the facilities include office, concrete manufacturing, concrete quality control testing and storage facilities that support strong underlying operations of the company's key business segments.
  • Long-term net leases with built-in rent growth: The 20-year triple net leases include fixed annual two percent rent escalations.

Management Commentary

Gino Sabatini, W. P. Carey Managing Director and Head of Net Lease Investments, commented: "The sale-leaseback transaction with Forterra demonstrates how our access to capital, together with our expertise in credit underwriting and real estate analysis, enables us to structure large complex sale-leaseback transactions with privately held companies. Providing steady, predictable cash flows, compelling returns and annual rent escalations, the investment is also supported by the long-term lease and the strength of Forterra's guarantee. Consistent with our established investment critieria, we believe the acquisition is a sound addition for W. P. Carey Inc.'s portfolio, which extends its weighted average lease-term and is accretive to cash flow."

Jeff Bradley, CEO of Forterra, noted, "W. P. Carey's ability to analyze and evaluate our critical operating assets in multiple locations, assess our current and ongoing operating strategy, as well as our financial strength allowed them to close the acquisition of 49 individual assets on a timely and efficient basis."

Forterra was represented on the transaction by Brian Scott and Andrew Sandquist of CBRE.

W. P. Carey Inc.
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This press release contains forward-looking statements within the meaning of U.S. Federal securities laws. The comments of Mr. Sabatini are examples of forward looking statements. A number of factors could cause W. P. Carey's actual results, performance or achievement to differ materially from those anticipated. Among those risks, trends and uncertainties are the general economic climate; the supply of and demand for commercial properties; interest rate levels; the availability of financing; and other risks associated with the acquisition and ownership of properties, including risks that the tenants will not pay rent, or that costs may be greater than anticipated. For further information on factors that could impact W. P. Carey, reference is made to its filings with the U.S. Securities and Exchange Commission.

W. P. Carey Inc. Contacts:
Media Contact:
Guy Lawrence
+ 1 212-308-3333
gblawrence@rosslawpr.com  

Institutional Investors:
Peter Sands
+1 212-492-1110
institutionalir@wpcarey.com

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SOURCE W. P. Carey Inc.