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

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

Why some retirement plan advisers think Fidelity is invading their turf

InvestmentNews editor Frederick P. Gabriel Jr. and reporter Greg Iacurci talk about this week's cover story that looks at whether Fidelity Investments is stepping on the toes of retirement plan advisers.

Latest news & opinion

Is Fidelity competing with retirement plan advisers?

As the Boston-based mutual fund giant expands the products and services it brings to the retirement market, some financial advisers say the firm is encroaching on their turf.

Gun violence hits investment strategies, sparks political debates with advisers

Screening out weapons companies has limited downside.

Whistleblower said to collect $30 million in JPMorgan case

The bank did not properly disclose that it was steering asset-management customers into investments that would be profitable for JPMorgan Chase.

Social Security underpaid 82% of dually entitled widows and widowers

Agency failed to tell survivors that they could switch to a higher retirement benefit later.

If Finra eases firm oversight of outside business activities, broker-dealers could lose revenue

Brokerage firms would no longer be able to charge reps for supervising nonaffiliated RIAs.

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print