NYSE-listed net lease real estate investment trust (REIT) WP Carey is spinning off a large majority of its office portfolio into a separately listed REIT called Net Lease Office Properties (NLOP).
The spin-off is part of the US-based company’s plan to exit the office sector and focus on its warehouse and industrial assets. WP Carey said that the spin-off will help it to monetise its legacy office portfolio, improve its overall portfolio quality, and enhance its credit profile.
As part of the plan to exit the office assets within its portfolio, WP Carey is transferring 59 office properties to NLOP and intends to sell 87 other office properties.
Jason Fox, WP Carey’s CEO, said: “While we’ve meaningfully reduced our office exposure in recent years, the plan we’ve announced this morning vastly accelerates our exit from office — enhancing the overall quality of our portfolio, improving the quality and stability of our earnings, and incrementally benefiting our credit profile.
“Ultimately, with a clear path to monetising our legacy office assets, we believe we will achieve a lower cost of capital and be better positioned for long-term value creation for our shareholders.”
NLOP’s portfolio of 9.2m sqft, represents $141m (€132m) or 10% of WP Carey’s annualised based rent (ABR). The vast majority of the office properties that will be owned by NLOP are located in the US, with the balance in Europe.
The 87 office properties generated approximately $77m of ABR.
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