This nearly 6.5% dividend yielding stock has $1.6 billion in acquisitions in 2024, setting the stage for more dividend growth in 2025.
Last year was a transition period for WP Carey (NYSE: WPC). The diversified real estate investment trust (REIT) spent the latter part of 2023 and the first few months of last year spinning off parts of its portfolio as it exited the office sector and sold off other secondary properties. He used those proceeds to rebuild his portfolio throughout the year, investing in total 1.6 billion dollars in new real estate.
Those deals made the REIT possible to slowly restore its dividend (it quadrupled its payout last year) after a reset in late 2023. That payout, now nearly 6.5%, looks set to continue rising in 2025 as WP Carey benefits from a recent surge in new investment and other growth drivers.
WP Carey’s total investment volume of $1.6 billion last year was toward the high end of its guidance range ($1.25 billion to $1.75 billion). It had a strong finish to the year, with record investment volume in the fourth quarter of $845 million.
Diversified REIT acquired a series of assets during the last period of the year. Significant offers included:
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Discount retail portfolios: Approximately $200 million was spent to purchase four portfolios of 106 discount retail properties in 21 states leased to Dollar General. they triple-net leases (NNN) have a weighted average remaining term of 14.3 years with built-in rent escalation. As part of that deal, in the first quarter of this year, they will buy nine more stores for about $20 million.
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Class A industrial facility: The REIT acquired a 1.1 million square foot US leased battery factory Canadian Solar for about 100 million dollars. The factory has NNN with the remaining 12.4 years of the term and an escalation clause.
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Manufacturing and Industrial Campus: WP Carey earned approximately $100 million sale-rent manufacturing and industrial campus with five buildings totaling 1.1 million square feet in Mexico. The company signed a 25-year contract NNN (with built-in escalator for rent) with tenant, one of the oldest and largest privately owned industrial manufacturing conglomerates in the US. The rent will be paid in US dollars.
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Data center: The REIT acquired a 209,000-square-foot data center in the US that was leased from three networks branch of the company Brookfield Infrastructure with 11.1 years remaining (and a built-in rental escalator) for about $100 million.
WP Carey has acquired a wide range of properties let to high quality tenants. All long-term leases contain rent escalation clauses that will provide the REIT with incremental income growth in future years.
