W.P. Carey completes acquisition of affiliated nontraded REIT

Acquisition of Corporate Property Associates 16 Global is industry's latest liquidity event.
JUN 18, 2014
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.

Latest News

Maryland bars advisor over charging excessive fees to clients
Maryland bars advisor over charging excessive fees to clients

Blue Anchor Capital Management and Pickett also purchased “highly aggressive and volatile” securities, according to the order.

Wave of SEC appointments signals regulatory shift with implications for financial advisors
Wave of SEC appointments signals regulatory shift with implications for financial advisors

Reshuffle provides strong indication of where the regulator's priorities now lie.

US insurers want to take a larger slice of the retirement market through the RIA channel
US insurers want to take a larger slice of the retirement market through the RIA channel

Goldman Sachs Asset Management report reveals sharpened focus on annuities.

Why DA Davidson's wealth vice chairman still follows his dad's investment advice
Why DA Davidson's wealth vice chairman still follows his dad's investment advice

Ahead of Father's Day, InvestmentNews speaks with Andrew Crowell.

401(k) participants seek advice, but few turn to financial advisors
401(k) participants seek advice, but few turn to financial advisors

Cerulli research finds nearly two-thirds of active retirement plan participants are unadvised, opening a potential engagement opportunity.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today’s choppy market waters, says Myles Lambert, Brighthouse Financial.

SPONSORED Beyond the dashboard: Making wealth tech human

How intelliflo aims to solve advisors' top tech headaches—without sacrificing the personal touch clients crave