W.P. Carey completes acquisition of affiliated nontraded REIT

Deal for Corporate Property Associates 16 Global is industry's latest liquidity event

Feb 3, 2014 @ 2:05 pm

By Bruce Kelly

+ Zoom

It's liquidity, liquidity everywhere for investors holding nontraded real estate investment trusts as publicly traded W.P. Carey Inc. said Monday it had completed its acquisition of an affiliated nontraded REIT, Corporate Property Associates 16 Global Inc.

Launched in 2003 and sold by representatives with independent broker-dealers at $10 per share, CPA 16 investors will receive 0.183 shares of W.P. Carey common stock, which was valued $61.48 per share when the deal was first announced in July. That valued CPA 16, which has $3.3 billion in assets, at $11.25 per share at the time. CPA 16's most recently published net asset value per share was $8.70, according to the REIT's quarterly report from November.

The acquisition was completed on Friday.

Nontraded REITs were roundly criticized after the credit crisis for high fees, lack of transparency and low liquidity that locks up investors for lengthy time periods. Some large REITs struggled and saw their valuations and distributions diminish.

The pace of nontraded REITs listing on exchanges or merging with other publicly traded companies has picked up over the last two years. Last week, Inland American Real Estate Trust Inc., the largest nontraded REIT with $9.5 billion in assets, said it had suspended its current share repurchase program, signaling it may soon be in line for a merger or listing of its shares.

Last year, six nontraded REITs announced or transacted “liquidity events.”

Shares of W.P Carey, a global net-lease REIT with an enterprise value of $9.6 billion, were down 45 cents in trading Monday at $58.63 per share.

0
Comments

What do you think?

View comments

Recommended for you

Sponsored financial news

Featured video

INTV

Help special needs families get started on a lifetime of planning

Managing editor Christina Nelson talks with special projects editor Liz Skinner about specialists who say any adviser can and should get the financial ball rolling for people in this community.

Video Spotlight

Are Your Clients Prepared For Market Downturns?

Sponsored by Prudential

Recommended Video

Path to growth

Latest news & opinion

10 best financial adviser jokes

How many financial advisers does it take to screw in a lightbulb?

With margins crashing, broker-dealers look to merge: report

Increased regulation is straining profit margins among broker-dealers, sending many of them into the arms of their bigger brethren.

Hackers may have profited from SEC breach

The hack of the agency's Edgar filing system occurred in 2016, but the regulator didn't conclude until last month that the cybercriminals may have used their bounty to make illicit trades.

Top 10 financial firms ranked by investor satisfaction

Find out which firm took the top slot for overall investor satisfaction for the second year in a row.

What not to say to clients when the markets drop

Here's what advisers should steer clear of saying the next time stocks turn downward.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print