W.P. Carey's $172M CMBS is Largest Sale of its Type

NEW YORK CITY-Investment firm W.P. Carey & LLC has closed on what it says is the largest CMBS in the history of single-tenant, triple-net leased loans of non-credit-tenant lease assets. The $172-million bond sale, known as Carey Commercial Mortgage Trust Commercial Mortgage Pass-Through Certificates, was backed by mortgages placed on more than 60 properties owned and/or managed by W. P. Carey.

Moody’s Investors Service and Fitch Ratings issued triple-A ratings for $120 million worth of the bonds, which are located throughout the US and cross all real estate sectors. All bonds sold by W.P. Carey are rated triple-B or above. “We retained the traunches below triple B,” W.P. Carey CFO John Park tells GlobeSt.com. “Obviously, this is a success for us. Historically, our loss rate has been extremely low. By retaining the most junior piece, it’s really showing our confidence in the collateral pool. This is another avenue of financing for W.P. Carey.”

“This transaction was a watershed moment for W. P. Carey as it shows the innovative ability of W. P. Carey’s Finance Group to successfully find new ways of accessing the capital markets, regardless of macroeconomic conditions,” says W. P. Carey’s Co-CEO and President Gordon F. DuGan. “We believe that with interest rates at 40-years lows, now was a good time to lock in long-term financing for our investors. We pride ourselves in our history and tradition of serving as conservative and serious fiduciaries to our investors. This CMBS is evidence that our time-tested philosophy, that we’ve maintained for close to 30 years, will continue to benefit our investors in the future.”

Firms assisting W.P. Carey in its structuring and underwriting of its CMBS included Price & Marshall, a boutique investment bank which specializes in securitized transactions; Hunter, Keith, Marshall & Co., and Stone & Youngberg LLC, which handled the sale of the bonds; Reed Smith LLP and Baker & McKenzie, which provided legal counsel; and Ernst & Young LLP, which provided accounting and tax advisory services.