W. P. Carey Office Spin-off Notes

October 16, 2023 Update

  • Regular way trading will begin on November 2
  • WPC shareholders will receive 1 share of NLOP for every 15 shares of WPC

October 3, 2023 Update

  • Good overview
  • I think the spin-off will be interesting as it will be a liquidation

October 3, 2023 Update

On September 21, 2023, W. P. Carey (WPC) announced that it will exit the office assets within its portfolio. It will sell 87 office properties and put another 59 into a new company which will be spun off.

The new company will be called Net Lease Office Properties (NLOP). Usually, spin-off transactions take 6-18 months to be completed, but WPC has clearly been working on this transaction for a while as it the plan is for it to be completed by November 1. Further, the form 10 has already been filed.

NLOP is expected to comprise a portfolio of 59 high-quality office properties, totaling approximately 9.2 million leasable square feet primarily leased to corporate tenants on a single-tenant net lease basis. The vast majority of the office properties that will be owned by NLOP are located in the U.S., with the balance in Europe. NLOP’s portfolio will consist of 62 corporate tenants operating in a variety of industries, generating average base rent (ABR) of more than $141 million as of June 30, 2023.

The strategy of NLOP is going to be to sell its office buildings and distribute proceeds to shareholders. This looks like it could be a very interesting opportunity. It appears that WPC is selling at the bottom of the office cycle.  Here is the transcript from the spin-off announcement call.