W. P. Carey Announces Proposed Acquisition of CPA:15 and Conversion to REIT

NEW YORK, NY–(Marketwire -02/21/12)- Investment firm W. P. Carey & Co. LLC (“W. P. Carey“) announced today that its Board of Directors has approved its conversion to a real estate investment trust (“REIT”) and that its Board of Directors and the Board of Directors of its publicly held, non-traded REIT affiliate, Corporate Property Associates 15 Incorporated (“CPA®:15″), have unanimously approved a definitive merger agreement pursuant to which W. P. Carey will acquire CPA®:15 immediately following the REIT conversion. Under the terms of the proposed merger, CPA®:15 stockholders will receive $1.25 in cash and 0.2326 of a share of W. P. Carey common stock for each CPA®:15 share at closing. The transaction values CPA®:15 at $2.6 billion, including the assumption of CPA®:15 debt of $1.2 billion, as of December 31, 2011. The new REIT, to be named W. P. Carey Inc., will continue to trade on the New York Stock Exchange under the symbol WPC (NYSE: WPC – News). The conversion to a REIT is subject to the approval of W. P. Carey shareholders and the merger is subject to approval of both the shareholders of W. P. Carey and the stockholders of CPA®:15.
Following the merger, W. P. Carey Inc. is expected to have a total equity market capitalization of approximately $3 billion, total market capitalization of $5 billion and a portfolio of 43 million square feet of corporate real estate leased to 135 companies around the world. W. P. Carey Inc. will continue to manage the firm’s Corporate Property Associates (CPA®) series of publicly held, non-traded REITs.
The proposed merger is expected to be accretive to both AFFO per share and CAD per share for W. P. Carey. W. P. Carey currently anticipates that, following the transactions, the new REIT will increase its annual dividend to $2.60 per share to maintain compliance with REIT tax requirements.
W. P. Carey believes that the benefits of the proposed merger and conversion to REIT status include:

• Significant increase in W. P. Carey Inc.’s scale and real estate under ownership
• Increased financial strength and flexibility to access capital for growth
• Enhanced cash available for continued dividend growth
• Simplified tax reporting for shareholders
• Further diversification of its shareholder base over time, including from active and passive REIT investors

W. P. Carey President and CEO Trevor Bond commented, “We believe that the proposed merger and REIT conversion are in the best interests of both W. P. Carey and CPA®:15 investors. In addition to providing liquidity for CPA®:15 investors, this transaction will enhance our strength and flexibility, with a larger balance sheet and more diversified portfolio. Over the long-term, we believe it will allow us to capitalize on new opportunities that are consistent with our established investment parameters and our overall business strategy of growing assets under ownership and enhancing shareholder value.”
BofA Merrill Lynch is acting as financial advisor to W. P. Carey and DLA Piper US LLP is acting as the legal advisor to W. P. Carey. Deutsche Bank is acting as financial advisor to CPA®:15 and Clifford Chance LLP is acting as legal advisor to CPA®:15.
A joint proxy statement/prospectus will be filed on Form S-4 with the Securities and Exchange Commission, which will describe the proposed merger and REIT conversion. Completion of the transactions is subject to receipt of all third-party consents as well as the approval of shareholders and stockholders of both companies and satisfaction of customary closing conditions. The transactions are currently expected to close by the third quarter of 2012, although there can be no assurance of such timing.
CONFERENCE CALL & WEBCAST
Please call at least 10 minutes prior to call to register.
Time: Wednesday, February 22 at 10:30 AM (ET)
Call-in Number: 1-866-524-3160
(International) + 1-412-317-6760
Webcast: www.wpcarey.com/merger
W. P. Carey & Co. LLCW. P. Carey & Co. LLC (NYSE: WPC – News) owns and manages a global investment portfolio of approximately $12 billion. W. P. Carey provides companies worldwide with long term sale leaseback and build to suit financing and engages in other types of real estate-related investment. Publicly traded on the New York Stock Exchange (WPC), W. P. Carey and its CPA® series of income-generating, non-traded REITs help companies and private equity firms unlock capital tied up in real estate assets. The W. P. Carey Group’s investments are highly diversified, comprising contractual agreements with approximately 288 long term corporate tenants spanning 28 industries and 18 countries. www.wpcarey.com
Cautionary Statement Concerning Forward-Looking Statements:
Certain of the matters discussed in this communication constitute forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, both as amended by the Private Securities Litigation Reform Act of 1995. The forward-looking statements include, among other things, statements regarding the intent, belief or expectations of W. P. Carey and can be identified by the use of words such as “may,” “will,” “should,” “would,” “assume,” “outlook,” “seek,” “plan,” “believe,” “expect,” “anticipate,” “intend,” “estimate,” “forecast” and other comparable terms. These forward-looking statements include, but are not limited to, statements regarding the benefits of the REIT Conversion and the Merger, integration plans and expected synergies, the expected benefits of the REIT Conversion, anticipated future financial and operating performance and results, including estimates of growth, and the expected timing of completion of the proposed REIT Conversion and the Merger. These statements are based on the current expectations of the management of W. P Carey. It is important to note that W. P. Carey’s actual results could be materially different from those projected in such forward-looking statements. There are a number of risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Other unknown or unpredictable factors could also have material adverse effects on future results, performance or achievements of the combined company. Discussions of some of these other important factors and assumptions are contained in W. P. Carey’s filings with the SEC and are available at the SEC’s website at http://www.sec.gov, including: (a) Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2010 as filed with the SEC on February 25, 2011 and (b) in the Current Report on Form 8-K filed with the SEC on June 10, 2011. These risks, as well as other risks associated with the proposed merger, will be more fully discussed in the joint proxy statement/prospectus that will be included in the Registration Statement on Form S-4 that W. P. Carey will file with the SEC in connection with the proposed REIT Conversion and the Merger. In light of these risks, uncertainties, assumptions and factors, the forward-looking events discussed in this communication may not occur. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this communication. Except as required under the federal securities laws and the rules and regulations of the SEC, W. P. Carey does not undertake any obligation to release publicly any revisions to the forward-looking statements to reflect events or circumstances after the date of this communication or to reflect the occurrence of unanticipated events.
Additional Information and Where to find it:
This communication shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended. W. P. Carey intends to file a registration statement on Form S-4 that will include a joint proxy statement / prospectus and other relevant documents to be mailed by W. P. Carey and CPA®:15 to their respective security holders in connection with the proposed REIT Conversion and the Merger. WE URGE INVESTORS TO READ THE JOINT PROXY STATEMENT/ PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT W. P. CAREY, CPA®:15 AND THE PROPOSED REIT CONVERSION AND MERGER. INVESTORS ARE URGED TO READ THESE DOCUMENTS CAREFULLY AND IN THEIR ENTIRETY. Investors will be able to obtain these materials (when they become available) and other documents filed with the SEC free of charge at the SEC’s website (http://www.sec.gov). In addition, these materials (when they become available) will also be available free of charge by accessing W. P. Carey’s website (http://www.wpcarey.com) or by accessing CPA®:15′s website (http://www.cpa15.com). Investors may also read and copy any reports, statements and other information filed by W. P. Carey or CPA®:15, with the SEC, at the SEC public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 or visit the SEC’s website for further information on its public reference room.
Participants in the Proxy Solicitation:
Information regarding W. P. Carey’s directors and executive officers is available in its proxy statement filed with the SEC by W. P. Carey on April 29, 2011 in connection with its 2011 annual meeting of shareholders, and information regarding CPA®:15′s directors and executive officers is available in its proxy statement filed with the SEC by CPA®:15 on April 29, 2011 in connection with its 2011 annual meeting of stockholders. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the joint proxy statement/prospectus and other relevant materials to be filed with the SEC when they become available.
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Scott's Real Estate Investment Trust announces financing and leasing update

TORONTO , Feb. 1, 2012 /CNW/ –  Scott’s Real Estate Investment Trust (TSX: SRQ.UN) (“Scott’s REIT”) today announced the following:

• Extends $32 million original IPO mortgage one year to February 1, 2013
• Enters an agreement for a new first mortgage in Atlantic Canada for $8.5 million
• Re-leases an additional four previously disclaimed properties
• Extends six leases in New Brunswick

Extension of $32 Million IPO Mortgage
Scott’s REIT received a further one-year extension for its $32 million IPO mortgage to February 1, 2013 from February 1, 2012 . The extension has been granted using the same terms as the original loan; 4.9 per cent interest only, payable monthly, and the mortgage is open for payment at any time during the one-year extension period.
New $8.5 Million Atlantic Canada Mortgage
Scott’s REIT entered into an agreement for a first mortgage with First National Financial LP in the amount of $8.5 million , with a further $1 million available if certain leasing targets are met. The mortgage will be secured by 24 properties located in New Brunswick and Nova Scotia, the primary tenant of which is FMI Atlantic Inc. The mortgage will have a term of five years, amortized over a 25-year period, and will bear an interest rate of 4.95 per cent. The mortgage is expected to close during the month of February 2012 and is subject to customary closing conditions. The proceeds from the mortgage will be used to pay down a portion of the $32 million IPO mortgage.
“The extension and partial pay-down of the IPO loan will provide the REIT with much needed stability over this transitional period and will provide the necessary time for Scott’s REIT to re-lease its portfolio as we return occupancy to historical levels,” said Teresa Neto , CFO of Scott’s REIT. “In addition, the extension also provides Scott’s REIT the flexibility to seek alternative refinancing for the remaining outstanding balance of the IPO mortgage, once Priszm announces and executes sales of its Quebec , Manitoba and Alberta KFC operations.”
Leasing Update
Scott’s REIT has completed four new leases for sites disclaimed and previously leased by Priszm, including three sites in Quebec which were disclaimed effective January 27, 2012 . The fourth site is located in London , Ontario and has been leased to Starbucks. Each of the four leases were signed at rents higher than the rent under the previous Priszm lease. Including these four new leases, Scott’s REIT has now leased 18 of the total 43 sites disclaimed, or 40.4% of the total disclaimed GLA.
“We are seeing strong interest in many of our vacant sites as evidenced by how quickly we have been able to re-lease a notable portion of the properties,” said Kevin Salsberg , Chief Operating Officer of Scott’s REIT. “Some of these sites were vacant less than a month before we re-leased them and we believe most of the remaining vacant sites will be re-leased over the next twelve months.”
In addition, Scott’s REIT has also successfully extended six leases in New Brunswick with FMI Atlantic Inc. as KFC restaurants, extending the terms by five years to the year 2023. FMI Atlantic is also the dominant Pizza Hut operator in Atlantic Canada .
“We will be working with our tenants to secure extensions where possible, in particular with the operators seeking to invest in their businesses for the long term”, said Mr. Salsberg .” Extended lease terms with capital invested in the real estate is a win for our tenants and Scott’s REIT”.
About Scott’s Real Estate Investment Trust
Scott’s REIT (TSX: SRQ.UN) is Canada’s premier small-box retail property owner with 229 properties in eight provinces across Canada . Scott’s REIT’s properties are well located and geographically diverse across Canada with the majority of all properties containing long-term quadruple net leases. To find out more about Scott’s Real Estate Investment Trust (TSX: SRQ.UN), visit our website at www.scottsreit.com.
Forward-Looking Statements
This document contains certain information that may constitute forward-looking information within the meaning of securities laws. In some cases, forward-looking information can be identified by the use of terms such as “may”, “will”, “should”, “expect”, “plan”, “anticipate”, “believe”, “intend”, “estimate”, “predict”, “potential”, “continue” or other similar expressions concerning matters that are not historical facts. Forward-looking information may relate to management’s future outlook and anticipated events or results, and may include statements or information regarding future growth opportunities and potential and expected cash distributions or cash distribution levels. In particular, information regarding the REIT’s monthly cash distributions and information relating to the impact of the REIT’s recent acquisitions on annual revenues and interest expense is forward-looking information. Forward-looking information is based on certain factors and assumptions regarding, among other things, occupancy rates, property expense and capital expenditures. While the REIT considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect. Forward looking-information is subject to certain factors, including risks and uncertainties, which could cause actual results to differ materially from what is currently expected. Such factors include risks relating to the REIT’s reliance on Priszm LP, the REIT’s second largest tenant, risks associated with investment in real property, competition, reliance on key personnel, financing and refinancing risks, environmental matters, tenant risks, risks related to current economic conditions and other risk factors more particularly described in the REIT’s Annual Information Form for the year ended December 31, 2010 . You should not place undue importance on forward-looking information and should not rely upon this information as of any other date. Other than as required by applicable Canadian securities law, the REIT does not undertake to update this information at any particular time. Additional information identifying risks and uncertainties is contained in Scott’s REIT filings with the Canadian securities regulators, available at www.sedar.com.

Scott's Real Estate Investment Trust announces January distribution and provides an update on Priszm

TORONTO , Jan. 18, 2012 /CNW/ – Scott’s Real Estate Investment Trust (TSX: SRQ-UN.TO – News) (“Scott’s REIT”) today announced a cash distribution for of $0.0708 per unit for the month of January 2012 . The distribution will be payable on February 15, 2012 to Unitholders of record on January 31, 2012 .
Scott’s REIT reviews the amount of its distributions on an ongoing basis and considers a number of factors including expected cash flows based on occupancy rates, operating expenses, capital expenditures and debt service requirements. Although Scott’s REIT has maintained the same distribution amount for 74 consecutive months in accordance with its distribution policy, there can be no assurance that any future distributions will be at the current level.
Update on Priszm
On January 16, 2012 , the Receiver (Duff & Phelps Canada Restructuring Inc., formerly Richter Inc.) for Priszm Income Fund (“Priszm”) gave notice to the REIT that it intends to disclaim an additional eleven leases effective January 27, 2012 . All eleven leases are located in the province of Quebec .
The REIT plans to market the eleven sites immediately and will either re-lease or potentially dispose of the properties.
“We believe we are getting close to understanding what restaurants KFC will be operating after Priszm completes the sales of its restaurants to new operators, and this will help us stabilize our portfolio going forward,” said Teresa Neto , CFO of Scott’s REIT.  “While it has taken a year to get through this process, Scott’s REIT will come out of the Priszm situation stronger, with more tenant diversity and upgraded assets.”
In total, Priszm has turned back 43 sites thus far (including the 11 disclaimed Quebec sites) of which 14 have been re-leased.
“It will take the balance of 2012 to re-lease the bulk of these sites, but so far Scott’s REIT has received strong interest in most of the vacant locations,” said Ms. Neto . “We finished the year with an occupancy rate of approximately 95.1 per cent which is a strong number. Including committed occupancy and these eleven disclaimed sites our occupancy drops only modestly to 93.6 per cent.”
Scott’s REIT continues to pursue its claim on the proceeds from the sales of Priszm’s operations, and the Receiver continues to set aside $13.4 million from those proceeds until such claim is determined. There can be no assurance as to the outcome of any litigation involving this claim.
About Scott’s Real Estate Investment Trust
Scott’s REIT (TSX: SRQ-UN.TO – News) is Canada’s premier small-box retail property owner with 229 properties in eight provinces across Canada . Scott’s REIT’s properties are well located and geographically diverse across Canada with the majority of all properties containing long-term quadruple net leases. To find out more about Scott’s Real Estate Investment Trust (TSX: SRQ-UN.TO – News), visit our website at www.scottsreit.com.
Forward-Looking Statements
This document contains certain information that may constitute forward-looking information within the meaning of securities laws. In some cases, forward-looking information can be identified by the use of terms such as “may”, “will”, “should”, “expect”, “plan”, “anticipate”, “believe”, “intend”, “estimate”, “predict”, “potential”, “continue” or other similar expressions concerning matters that are not historical facts. Forward-looking information may relate to management’s future outlook and anticipated events or results, and may include statements or information regarding future growth opportunities and potential and expected cash distributions or cash distribution levels. In particular, information regarding the REIT’s monthly cash distributions and information relating to the impact of the REIT’s recent acquisitions on annual revenues and interest expense is forward-looking information. Forward-looking information is based on certain factors and assumptions regarding, among other things, occupancy rates, property expense and capital expenditures. While the REIT considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect. Forward looking-information is subject to certain factors, including risks and uncertainties, which could cause actual results to differ materially from what is currently expected. Such factors include risks relating to the REIT’s reliance on Priszm LP, the REIT’s largest tenant in terms of rental revenue, risks associated with investment in real property, competition, reliance on key personnel, financing and refinancing risks, environmental matters, tenant risks, risks related to current economic conditions and other risk factors more particularly described in the REIT’s Annual Information Form for the year ended December 31, 2010 . You should not place undue importance on forward-looking information and should not rely upon this information as of any other date. Other than as required by applicable Canadian securities law, the REIT does not undertake to update this information at any particular time. Additional information identifying risks and uncertainties is contained in Scott’s REIT filings with the Canadian securities regulators, available at http://www.sedar.com/.
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