W. P. Carey (WPC) Expands With Investments Worth $468 Million
W. P. Carey Inc. WPC recently announced industrial portfolio investments worth $468 million in Canada. The investments are in line with the company’s externally-driven growth strategy, which is focused on high-quality industrial assets.
So far in the year, the company has completed $650 million in investments, with the majority of these related to industrial properties. The latest investments comprised the sale-leaseback of a critical portfolio of four pharmaceutical R&D and manufacturing campuses with Apotex Pharmaceutical Holdings, Inc. Apotex is a global pharmaceutical company and the largest generic drug manufacturer in Canada.
The portfolio involves a large portion of Apotex's global operations, comprising 11 properties encompassing 2.3 million square feet of space. The portfolio is spread across four campuses, which are located in attractive industrial submarkets within the Greater Toronto Area, making the investment strategic for W. P. Carey.
Amid an e-commerce boom, growth in industries and companies making efforts to improve supply-chain efficiencies, the demand for industrial real estate space has been shooting up. Apart from the fast adoption of e-commerce, the industrial real estate space is poised to gain traction over the long run from a likely rise in the inventory levels of companies as a precaution for any supply-chain disruption. This will offer opportunities to industrial landlords to enjoy a favorable market environment.
W. P. Carey too is well-poised to benefit from investments in the industrial real estate space in some attractive markets worldwide. Particularly, WPC’s latest move reflects its ability to secure accretive transactions efficiently. It will help the company secure steady rental revenues over the long term, with the sale-leaseback transaction being structured as a triple-net master lease with the rent payable in U.S. dollars and fixed-rent escalations over a 20-year term.
With a high-quality portfolio of critical commercial real estate, the diversified net lease REIT, W. P. Carey, is likely to benefit from the healthy demand for its spaces. The company is focused on investing in high-quality single-tenant industrial, warehouse and retail properties located in the United States, and Northern and Western Europe, which it leases on a long-term basis, with built-in rent escalators.
Shares of W. P. Carey, currently carrying a Zacks Rank #3 (Hold), have climbed 5.2% in the past six months, outperforming the industry’s growth of 3.5%.
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Stocks to Consider
Some better-ranked stocks from the REIT sector are Americold Realty Trust, Inc. COLD and Terreno Realty Corporation TRNO, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Terreno Realty Corporation’s ongoing year’s FFO per share has been raised two cents over the past two months to $2.17.
The Zacks Consensus Estimate for Americold Realty’s 2023 FFO per share is currently pegged at $1.19, which suggests 7.2% year-over-year growth.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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