WP Carey is a real estate investment trust or REIT for short that specializes in sale-leaseback and net-lease space. The company has been around for over 40 years and became publicly traded starting in 1998. They have a broad array of clients and are diversified over multiple industries which mitigates against market disruptions in any one industry. They breakdown of their clientele is listed below:
There are some pretty recognizable names on the list and some staples within industries. The important thing to look at with WPC, and any REIT, is when leases will expire. Through 2018 only 3.1% of the tenants are schedule to have their leases expire, this doesn’t mean that they are going to not renew, just that they are schedule to. What’s extremely comforting is that at the time of this writing 45% of their leases are scheduled to expire after 2025. This gives me some comfort as it not only gives the company plenty of time to replace attrition if need be, but also knowing that almost half of their portfolio is already locked in for over the next decade.
This week WPC increased their 0.5% from $0.99 to $0.995/share per quarter. This may not seem like much, but WPC has increased their dividend 4 times in the last year. The dividend was $0.9742 back in March of 2016 and I’d rather have minor increases quickly than a one time increase yearly as it allows me to purchase more quicker.
Despite the challenges that may be ahead of the REIT space, rising interests rates and potential brick and mortar challenges, I still really like the space. I don’t see retail going completely away and I think WPC is positioned in a meaningful way to continue profitability.