W. P. Carey Q3 2026 AFFO Reaches $1.33 as Investment Volume Grows

W. P. Carey Inc. reported third-quarter 2026 adjusted funds from operations of $1.33 per diluted share and projected full-year AFFO of $5.23 to $5.29 per share, as the net-lease REIT continued deploying capital while maintaining contractual rent growth across its portfolio.

The company expects 2026 investment volume of $1.8 billion to $2.1 billion. It had completed approximately $1.6 billion of investments through October 23, including $182 million during the third quarter and $143 million after quarter-end. Another $95 million of capital projects and commitments was scheduled for delivery in the fourth quarter.

At the $5.26 midpoint of its AFFO guidance, W. P. Carey projects 5.8% full-year AFFO-per-share growth. AFFO is a non-GAAP measure used by the company to assess operating performance after making adjustments to GAAP net income for specified non-cash and non-core items.

Rent Growth and Investment Activity

Contractual same-store rent growth was 2.6% year over year in the third quarter, unchanged from the second quarter and above the 2.4% reported for full-year 2025. More than 99% of annualized base rent comes from leases with contractual increases. Fixed escalations account for 49% of rent, CPI-linked terms represent 48%, and other structures make up the remaining 3%.

Investments completed through October 23 carried a 7.5% weighted-average going-in capitalization rate and an average lease term of 19 years. W. P. Carey estimated the average yield on those investments at 9.2% after incorporating contractual rent increases. About 76% of year-to-date volume was originated through sale-leaseback transactions, while 70% involved industrial and warehouse properties. North America accounted for 71% of the activity and Europe for 29%.

The company’s recent transactions included a $400 million sale-leaseback of 43 U.S. manufacturing facilities and a $202 million sale-leaseback of eight logistics and warehouse properties in Poland. W. P. Carey also had approximately $325 million committed to tenant-focused projects through the end of 2028, including build-to-suit developments, redevelopments and energy projects.

Portfolio and Asset Management

At September 30, W. P. Carey’s portfolio consisted of 1,755 properties leased to 383 tenants, with $1.7 billion of annualized base rent and a weighted-average lease term of 12 years. Occupancy was 98.6% based on square footage.

Industrial and warehouse properties generated 64% of annualized base rent, retail represented 22%, and other property types accounted for 14%. North America contributed 67% of rent and Europe 33%. The top 10 tenants represented 18.3% of annualized base rent, while investment-grade tenants accounted for 22.5%.

Lease maturities remain staggered, with less than 13% of annualized base rent scheduled to expire through 2029, assuming tenants do not exercise renewal or purchase options. The trailing eight-quarter rent recapture rate was 102.2%, indicating that rents on completed leasing transactions exceeded the prior in-place amounts in aggregate. The company said such outcomes typically required minimal capital expenditure while extending lease terms.

W. P. Carey sold $273 million of assets across 33 properties through the end of the third quarter, including $27 million during the quarter. Full-year disposition guidance is $350 million to $450 million.

Capital and 2026 Outlook

The REIT ended the quarter with $2.6 billion of liquidity, comprising $1.93 billion of revolving credit availability, $143 million of cash and $538 million of unsettled forward equity. Net debt to adjusted EBITDA was 5.2 times after including the unsettled forward equity, compared with 5.5 times before that adjustment.

W. P. Carey raised $889 million of forward equity and issued the equivalent of $1.5 billion of bonds during the first nine months of 2026. That included $350 million of 5.20% notes due in 2036, issued in July. Bonds issued during the year carried a weighted-average interest rate of 3.9%.

The balance sheet had a 3.3% weighted-average interest rate and a 4.7-year weighted-average debt maturity. Fixed-rate borrowings represented 95% of debt, while 98% of annualized base rent was unencumbered. The company carries Baa1 and BBB+ ratings from Moody’s and S&P, respectively, both with stable outlooks.

In addition to its AFFO and investment targets, W. P. Carey expects 2026 general and administrative expenses of $104 million to $106 million, property expenses of $54 million to $57 million, and AFFO tax expense of $40 million to $43 million. Its current quarterly dividend equates to $3.80 per share on an annualized basis, up 4.4% year over year. Management expects annual retained cash flow of $250 million to $300 million after dividends and capital expenditures.

The outlook remains subject to execution on planned investments, dispositions and capital projects. W. P. Carey also identified fluctuating interest rates, inflation, tariffs, pressure on tenants, geopolitical conflict, political instability and public-health disruptions among the uncertainties that could cause actual results to differ from management’s expectations.