W. P. Carey Traditionally 'Investing for the Long Run'

NEW YORK (TheStreet) -- W. P. Carey Inc. (WPC) completed its first day of trading as a REIT, with shares down 1.69 percent to $48.17 on Monday.

President and CEO Trevor Bond said in a statement early in the day that the increase in scale and liquidity that would result from its REIT conversion would enhance its appeal to individual and institutional investors, giving it better access to public equity markets.

Almost 10 months ago the company's founder, William Polk Carey, passed away after leading the iconic sale-leaseback legend to more than four decades of consistency and repeatable dividend success. Carey once explained his company's value proposition:

"These returns demonstrate our success in fulfilling our most important corporate mission: Investing for the long run. Our aim is to help our investors build and maintain lifestyles, and have the resources they need to meet their obligations and achieve their dreams, without constant worry about where the income to fund will come."

As one of the largest triple-net REITs in the nation, W.P. Carey owns 429 properties comprised of around 39.1 million square feet leased to more than 130 companies around the world with a diverse portfolio across geographies, industries, and property types.

The newly merged companies -- W. P. Carey & Co. LLC and Corporate Property Associates 15 Inc. -- are now one, W. P. Carey Inc., The REIT has more than $5 billion in net-leased real estate ($3.1 billion in equity market cap and $1.9 billion in debt).

The current dividend yield is 5.3%.

The definition of Carey's "long run" dates back to the company's founding in 1973 and its subsequent stock listing in 1998. As a pioneer of the "sale/leaseback" industry, Carey focused on strategic stable cash flows generated from long-term leases to creditworthy tenants.

Accordingly, Carey was the first to exploit the business model and the company's trademark -- "Investing for the Long Run" -- became synonymous with dividend repeatability.

In fact, Carey has consistently increased the company's dividends each of the past 45 consecutive quarters and the annual dividend growth averaged 2.4% from 1998 to 2011.

Carey's board of directors established its third quarter 2012 cash distribution at 65% per share, which equates to an annualized rate of $2.60 per share and a 15% increase over the previous quarter. The cash dividend is payable on Oct. 16, to shareholders of record as of Oct. 2. This marks W. P. Carey's 46th consecutive distribution increase, including its predecessor company.

Bond commented, "We are excited to reach this milestone in W. P. Carey's history. While our disciplined, long-term investment strategy remains the same, as a result of these transactions, we expect that the REIT status, significant increase in real estate under ownership and expected dividend growth will provide our shareholders with a compelling investment and help us further diversify our shareholder base over time, including active and passive REIT investors. With a larger balance sheet and greater flexibility to access capital for growth, we are well positioned to capitalize on new opportunities that are consistent with our established investment parameters and enhance shareholder value."

Carey will continue to manage the Corporate Property Associates (CPA series publicly held, non-traded REITs) and the newly converted REIT will provide meaningful liquidity and broader access to capital.

In addition, I expect that the REIT could receive a lift to its share price in mid-November when the company is added to the MSCI US REIT Index.

William Carey nailed the mantra, "Investing for the Long Haul" and now that the company he founded is officially a REIT, investors will be able to benefit from all of the attributes of being a REIT -- transparency, liquidity and diversification -- while most importantly preserving principal and generating consistent returns on monies invested.

At the time of publication the author held no positions in any of the stocks mentioned.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

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