W. P. Carey Inc. (NYSE:WPC) Q3 2019 Earnings Conference Call - Final Transcript

Nov 01, 2019 • 10:00 am ET


W. P. Carey Inc. (NYSE:WPC) Q3 2019 Earnings Conference Call - Final Transcript


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Hello, and welcome to W. P. Carey's Third Quarter 2019 Earnings Conference Call. My name is, Jessie, and I will be your operator today. [Operator Instructions]

I will now turn today's program over to Peter Sands, Director of Institutional Investor Relations. Mr. Sands, please go ahead.

Peter Sands

Good morning, everyone. Thank you for joining us today for our 2019 third quarter earnings call.

Before we begin, I would like to remind everyone that some of the statements made on this call are not historic facts and may be deemed forward-looking statements. Factors that could cause actual results to differ materially from W. P. Carey's expectations are provided in our SEC filings. An online replay of this conference call will be made available in the Investor Relations section of our website at wpcarey.com, where it will be archived for approximately one year, and where you can also find copies of our investor presentations.

And with that, I'll hand the call over to our Chief Executive Officer, Jason Fox.

Jason E. Fox

Thank you, Peter, and good morning, everyone. Since our last earnings call, we further strengthened our balance sheet, we continued to make accretive investments, including adding significantly to our deal pipeline for 2020.

Today, I'll review our recent investment activity, give a brief update on a couple of our top 10 tenants and talk about the steps we've taken to ensure we're well-positioned to drive future earnings growth regardless of the economic backdrop. Toni Sanzone, our CFO will cover our third quarter results and updated guidance, the financial impact of the CWI merger, as well as some of the details on our recent capital markets activity and balance sheet positioning.

We're joined this morning by our President, John Park; and our Head of Asset Management, Brooks Gordon, who are available to take your questions when we get to that part of the call.

Before talking about the third quarter, I want to briefly give some context to our recent announcement about the proposed merger and internalization of the two CWI lodging funds we manage. In 2017, we established a plan to simplify the Company and improve our earnings quality by focusing exclusively on investing for our own balance sheet. Our merger with CPA:17, which we completed a year ago accelerated that strategy, essentially transforming us into a pure-play net lease REIT. And while last week's announcement about the CWI funds has a relatively minor impact on us. It does take us incrementally closer to generating 100% of earnings from our real estate portfolio and bring to fruition the strategic plan we set in motion two years ago.

Turning back to the quarter and starting with the market environment. In the U.S., the third quarter was very much a continuation of the same competitive environment we've spoken about on prior calls. In Europe, negative rates and the search for yield continues to attract investors to net lease, driving further yield compression, especially for prime industrial assets. We remain focused on high-quality real estate that is operationally