The Biggest Number From W.P. Carey's Latest Quarter: 4.3%
W.P. Carey (NYSE: WPC) is one of the largest net lease real estate investment trusts (REITs). The business is usually driven by fairly long leases, with W.P. Carey's average remaining lease term coming in at 11.2 years. That's good because tenants are locked in for the long term, but it's also bad because inflation can take a big bite out of the income a property generates if it isn't adjusted higher over time. On that front, W.P. Carey has a very good record, as evidenced by its 4.3% same-store rental growth in the second quarter.
Perhaps the most important thing to understand about net lease REITs like W.P. Carey is that they are a mixture of a landlord and a financial partner. The simplest transaction here is that a company with vital property sells it to a net lease REIT and then instantly leases it back under a net lease. A net lease requires the tenant to pay for most property-level operating costs. The cash it generates can be used to fund growth investments or to solidify the balance sheet, among other things.
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Source Fool.com
