W.P. Carey 2Q26 AFFO Beats JPMe/Street w/ Strong Investment Momentum; Guidance Raised, Growth Over 5%

Research evidence excerpt

W.P. Carey 2Q26 AFFO Beats JPMe/Street w/ Strong Investment Momentum; Guidance Raised, Growth Over 5%

xecuted 972k sf of lease renewals and

extensions in 2Q, which amounted to about 0.4% of ABR. New lease rates for this space were

up on the warehouse and retail leases by 39.3% and 12.2%, respectively. Industrial leases,

which made up the majority of this quarter’s leasing volume, were the drag, falling 7.5%.

Blended, it recaptured 101% on the activity with 7.8 years of lease term. It also leased 1.2

million with new tenants, all in the warehouse and industrial portfolio, with an average term

of 15.5 years. Total cap ex and leasing commissions for all its leasing in 2Q ran $8.5 million,

compared with $2.9 million in 1Q26, $6.7 million in 4Q25, $2.6 million in 3Q25 and $1.1

million in 2Q25. Our assumption for leasing cap ex in 2Q was $3.0 million.

Strong pre-funded equity position for future deal activity. During the quarter, WPC sold

5.27 million shares of common stock subject to forward sale agreements for anticipated gross

proceeds of approximately $392 million. It settled 5.07 million shares of previously sold

forward equity for $345 million, and even after this, it has unsettled equity totaling 9.9 million

shares for $691 million. Subsequent to quarter end, WPC issued $350 million of 5.2% Senior

Unsecured Notes due 2036, with proceeds scheduled to prepay $350 million of 4.25% Senior

Unsecured Notes due October 2026. This puts the balance sheet in a strong position, in our

view, with net debt to EBITDA being 5.5x at quarter end, and it would be 5.1x assuming the

settlement of the forward equity. Between the unsettled forward equity and free cash flow,

it has enough liquidity to keep leverage levels maintained and complete its acquisition goals