W.P. Carey Exits Office Market as Demand Sinks Because of 'Work-From-Home' Trend

Empty Office

Justin Sullivan / Staff / Getty Images

Key Takeaways

  • W.P. Carey is getting out of the office real estate market after the pandemic-related rise in "work from home" impacted demand.
  • The company will spin off some of its office properties and sell the rest.
  • CEO Jason Fox said the move will help the firm lower its cost of capital and help create long-term value for shareholders.

The collapse in demand for commercial office space after the pandemic-related rise in "work from home" (WFH) has led W.P. Carey (WPC) to exit that business segment. The real estate investor announced that its board has unanimously agreed to exit the market by spinning off or selling all the office assets in its portfolio.

The plan calls for 59 of the properties to be placed into Net Lease Office Properties (NLOP), a separate, publicly-traded real estate investment trust (REIT), with the remaining 87 put up for sale. As of June 30, W.P. Carey had 1,475 net lease properties and 85 self-storage facilities. 

The spinoff is scheduled to occur on or around November 1, while the sale is set for January 2024.

CEO Jason Fox said by taking these steps, W.P. Carey will be “enhancing the overall quality of our portfolio, improving the quality and stability of our earnings, and incrementally benefiting our credit profile.” He added that the company will achieve a lower cost of capital and be better positioned to create long-term value for investors.

Shares of W.P. Carey tumbled close to 8% on Thursday following the news, falling to their lowest level in more than three years.

WFC

TradingView

Do you have a news tip for Investopedia reporters? Please email us at
Article Sources
Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.
  1. W.P. Carey. "W. P. Carey Announces Strategic Plan to Exit Office."

Compare Accounts
×
The offers that appear in this table are from partnerships from which Investopedia receives compensation. This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace.
Provider
Name
Description