W.P. Carey CEO exits as company undergoes strategic review

In an unexpected move, the large net lease real estate investment trust and REIT manager W.P. Carey Inc. said Wednesday its CEO and a member of its board, Trevor Bond, was stepping down. He is being replaced by current Carey board member and former chief financial officer Mark J. DeCesaris, who served as an executive for the company from 2005 to 2013. The market reacted negatively to the news. At noon on Thursday, shares of W.P. Carey had dropped $4.27 per share, or 7.6%. Shares were trading at $51.62. Mr. Bond was stepping down “to pursue other interests,” the company said in a statement. The company said in November it was exploring breaking up into three businesses: a U.S. net lease REIT that would own and manage domestic commercial properties, an international net lease unit, and an asset management company to create nontraded REITs and other alternative investment products. Along with Mr. Bond's departure, W.P. Carey said it had hired J.P. Morgan Securities as an adviser in its strategic review. In a press release, W.P. Carey said it would have no further comment about its strategic review until the process has been concluded. Its fourth quarter and full-year earnings are to be released on February 25. “This does seem out of the blue,” said Paul Adornato, an analyst with BMO Capital Markets Corp. “To have senior management departures two weeks before earnings and more clarity on the strategic review is very unusual. “Reading between the lines, all we can presume is that the board did not like the direction in which the strategic review was heading,” he said. “Beyond that, what else can we say?” W.P. Carey has long been a partner with independent broker-dealers, which have sold Carey nontraded REITs for decades. Mr. Bond was “very well regarded by analysts and investors,” particularly for his credibility and his focus on transparency in the REIT industry, Mr. Adornato said.