NEW YORK CITY—Contained in last week's third-quarter earnings announcement from W.P. Carey Inc. was a little-noticed detail: the company's board is exploring a possible separation into three distinct entities. A spokesman for the net lease REIT told GlobeSt.com Monday that no further details had been disclosed since CEO Trevor Bond discussed the possible separation during last week's earnings call. Investment News previously reported the company's exploration of this option.

In response to analyst questions, Bond said the split would occur along the lines of WPC's three core competencies: US net lease, European net lease and investment management. "We believe that separation would provide for more focused and simplified structures that would be easier for investors to understand," Bond said on last Tuesday's call. "We think that, aligning each platform with sector specific shareholders is desirable and that we could achieve a cost of capital most appropriate to each entity by this alignment," while also allowing WPC to allocate capital "in a more focused way."

Most importantly, said Bond, "This could potentially allow us to pursue individual growth and business opportunities for each of the separate entities. For instance, the investment management arm would have a greater ability to grow, unconstrained by REIT status. We can also pursue individual inorganic growth strategy."

Remaining within the REIT space would be WPC's net lease businesses in both Europe and the US. The company has had European operations since 1998, Bond said; "based on our portfolio there, we would be the largest public net lease REIT, if that's the route we chose to go." Domestically, a standalone US REIT would be "one of the largest of the net lease REITs even without the European assets. It would be pure play."

Bond noted that all three platforms are "staffed appropriately" for growth as separate businesses. He also said that "nothing is ruled out" in terms of the possibility of selling one or more of the platforms, but noted that until specific plans are developed, it's "business as usual."