W.P. Carey NYSE: WPC reported first-quarter 2026 results that management said reflected “continued strong execution across the business,” led by investment activity and capital markets actions that the company believes have largely pre-funded its growth plan for the year.
Chief Executive Officer Jason Fox said the REIT is raising full-year guidance for both investment volume and adjusted funds from operations (AFFO) per share, citing deals completed year-to-date, a “very strong” pipeline, and a “more favorable outlook for estimated rent loss.”
Investment activity and pipeline
Fox said W. P. Carey has completed approximately $680 million of investments so far in 2026 and has “over half a billion dollars of deals currently at advanced stages,” including “the sale leaseback of a large industrial portfolio that’s in the final stages of closing.” In total, he said the company has “clear visibility into well over $1 billion of investments” when factoring in the pipeline and capital projects expected to deliver this year.
Management increased full-year investment volume guidance by $250 million to a range of $1.5 billion to $2.0 billion. Fox said the company expects an “average cap rate of approximately 7.5%” across closed deals, the pipeline, and capital projects delivering in 2026, and said it expects to “remain around that level” for the full year.
Fox added that closed transactions have averaged 7.2% year-to-date, which he attributed largely to timing and a mix skewed toward “some of what we expect to be our tightest cap rate deals over the first half of the year.” He also said investment activity early in the year has been weighted toward Europe and Canada, where the company secured lower-cost debt during the quarter, helping maintain attractive spreads versus “going-in” cap rates.
By property type, Fox said roughly 60% of first-quarter investment volume went to warehouse and industrial assets, with retail accounting for about 40% due largely to a sale-leaseback with Go Auto for a portfolio of auto dealerships in the Greater Vancouver area. Fox said Go Auto is the second-largest automotive dealership group in Canada and now ranks among W. P. Carey’s top 25 tenants by annual base rent (ABR).
On large transactions, Fox said deals in the $200 million to $300 million range are a regular part of the company’s flow given its scale, and noted another “larger sale leaseback” industrial transaction in the U.S. expected to close within a couple weeks.
Capital projects and Carey Tenant Solutions
Fox said the company completed four capital projects totaling $68 million during the quarter and has 11 capital projects totaling about $280 million delivering over the next 12 months. He said the projects are generating cap rates “incrementally higher” than year-to-date investments and expected full-year levels, and described them as a proprietary source of deal flow that can extend lease terms and enhance asset importance to tenants.
Asked about the Carey Tenant Solutions platform, Fox said these construction-oriented projects—build-to-suits, expansions, and redevelopments—are an established part of W. P. Carey’s business but have been more formally branded to support broader tenant outreach. He said the company has historically done “around $200 million per year” in such projects on average, and that it currently has about $280 million of projects in process, with roughly $180 million expected to complete in 2026, plus an active pipeline of potential projects.
Earnings, rent growth, and portfolio performance
Chief Financial Officer Toni Sanzone reported first-quarter AFFO per share of $1.30, up $0.13, or 11.1%, from the prior-year quarter. She attributed the year-over-year increase primarily to accretive investment activity and said the company has closed $2.8 billion of investments since the start of 2025.
Reflecting updated investment expectations and a lower estimated potential rent loss assumption, Sanzone said W. P. Carey raised 2026 AFFO per share guidance to $5.16 to $5.26, which she said implies 4.8% growth at the midpoint.
On rent growth, Sanzone said contractual same-store rent growth was 2.4% year-over-year in the first quarter, with fixed and CPI-linked escalations averaging 2.4%. For the full year, she said the company continues to expect contractual same-store growth in the “mid 2% range.”
Comprehensive same-store rent growth, which includes re-leasing, rent collections, vacancies, and lease restructurings, was 1% in the first quarter, which Sanzone said was “largely” driven by vacancy. She said comprehensive growth can fluctuate, but historically has trailed contractual by about 100 basis points on average.
Portfolio occupancy ended the quarter at 98.1%, up slightly from the fourth quarter, and Sanzone said it is expected to improve further as the company re-tenants or disposes of vacant assets.
Management also highlighted leasing activity. Sanzone said first-quarter re-leasing resulted in overall recapture of 103% of prior rents on 1.4% of portfolio ABR and added just over five years of weighted average lease term.
Dispositions, credit, and capital markets
First-quarter asset sales generated $163 million of gross proceeds, including the sale of the 11 remaining operating self-storage properties for $75 million. Sanzone said this completed the company’s exit from operating self-storage, generating about $860 million of aggregate proceeds at an average cap rate “just below 6%,” which has been recycled into higher-yielding investments.
On forward-looking disposition plans, Head of Asset Management Brooks Gordon said the company is maintaining flexibility with a full-year disposition range of $250 million to $750 million. He said W. P. Carey is evaluating a few hotels and one student housing property for potential disposition in the back half of 2026 or into next year.
Credit performance was described as stable. Sanzone said there have been “no new material changes in credit” so far this year, prompting the company to reduce the potential rent loss assumption embedded in guidance to $8 million to $12 million, down from $10 million to $15 million previously. Gordon added that Hellweg remains the largest watch-list exposure at about 1% of ABR and is “coming down quite quickly,” and cited Cornerstone—about 60 basis points of ABR—as another notable watch-list tenant, stating the company expects Cornerstone to restructure at some point but does not expect an impact given the “very critical” real estate.
W. P. Carey also detailed significant capital markets activity. Sanzone said the company accessed close to $2 billion of capital in the first quarter, including a EUR 1 billion senior unsecured note offering in two EUR 500 million tranches with coupon rates of 3.25% (five-year maturity) and 3.75% (nine-year maturity). She said proceeds were used to address an April Eurobond maturity, repay a EUR 215 million term loan, and increase liquidity.
In addition, Sanzone said the company amended its credit agreement, replacing the euro term loan with a new Canadian dollar term loan at an all-in rate of about 3.1% to fund Canadian investments, and improved its revolver pricing grid by 5 basis points. On equity, she said W. P. Carey sold 6.9 million shares on a forward basis for $497 million of gross proceeds and settled 3.45 million shares for $247 million of net proceeds, leaving 9.7 million shares to be settled, representing anticipated net proceeds of $653 million as of the end of March.
Sanzone said the company ended the quarter with approximately $2.8 billion of liquidity, and noted minimal remaining 2026 debt maturities, primarily $350 million of U.S. bonds due in October. She reported a weighted average interest rate on debt of 3.1% for the quarter and net debt to Adjusted EBITDA of 5.3x including unsettled forward equity (5.7x excluding it).
On shareholder returns, Sanzone said W. P. Carey increased its quarterly dividend 4.5% year-over-year to $0.93 per share in March, with a payout ratio of 72%.
Fox said management has not seen transaction activity slow due to recent geopolitical tensions, and told analysts the company has not observed impacts on its European portfolio from global macro events, citing diversification and a tenant base he described as largely comprised of large companies.
Looking ahead, Fox said W. P. Carey expects to refine investment guidance as the year progresses and expressed confidence in continued deployment capacity given liquidity and forward equity position. He also said the company remains confident it is on track to deliver “double-digit total shareholder returns again in 2026,” before any multiple expansion.
About W.P. Carey NYSE: WPC
W. P. Carey Inc is a diversified net-lease real estate investment trust specializing in single-tenant commercial properties. The company structures sale-leaseback and build-to-suit transactions to provide long-term net lease financing across a variety of asset classes, including industrial facilities, office buildings, retail centers and self-storage facilities. By employing triple net leases, W. P. Carey transfers property operating expenses, taxes and maintenance responsibility to tenants, creating a stable, predictable income stream for investors.
Founded in 1973 by William Polk Carey, the firm has expanded organically and through strategic mergers and acquisitions.
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