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LIMA, OH-An under performing fund operated by WP Carey & Co. has plunked down $42 million for a portfolio of seven industrial manufacturing facilities located in three US states, Canada and Mexico. The facilities were acquired from MetoKote Corp., which has leased back each of the facilities for 20 years.MetoKote provides protective coating applications to a variety of industries. The company is owned by JPMorgan Partners, a private equity unit of JPMorgan Chase & Co. WP Carey declined comment on the value of the leaseback. The transaction represents the company’s first investment in Mexico and second in Canada.The facilities are located in Peru, IL; Lima, Dayton and Cleveland, OH; Nashville, TN; Cambridge, Ontario, Canada; and Saltillo, Mexico. The properties were acquired in stages over the last several weeks for Corporate Property Associates 16-Global, one of WP Carey’s income generating funds. WP Carey director Gino Sabatini tells GlobeSt.com that WP Carey sees Mexico as “a land of opportunity” because the company specializes in sale-leasebacks and “there haven’t been a lot of those done down there.” Specifically with regard to the Saltillo property, Sabatini tells GlobeSt.com that the property is located one hour west of Monterey, which is a good location because “a lot of US companies have manufacturing operations in the area.”CPA: 16-Global is not meeting its performance criteria, which calls for a cumulative non-compounded distribution return of 6%, according to WP Carey’s latest SEC filing. As a result, the company WP Carey has set up to operate the funds has not received a portion of its transaction and management fees. Specifically, WP Carey says CPA REIT did not recognize deferred acquisition and asset based fees of $6.71 million and $1.5 million, respectively, for the six-month period ended June 30, 2005. Since the inception of CPA: 16-Global, CPA REIT has not recognized $14.25 million and $2.32 million, respectively. The company will only be able to recognize the fees if CPA(R):16-Global meets its performance criterion.”Because we currently expect that CPA: 16-Global will represent a significant portion of our total 2005 acquisition volume relative to the other CPA REITs and its performance criterion are not expected to be met during 2005, transaction based revenue for 2005 would likely moderate or decrease based on a similar investment volume,” the company states in a recent SEC filing.

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