Transformational but a natural evolution” is how Trevor Bond,president and CEO of what is now W.P. Carey Inc., describes hiscompany’s Sept. 28 conversion to a REIT. “Going from an LLC to aREIT is an important change in our form and structure, but it’s anatural evolution in that nothing’s changing in terms of our basicapproach to the business,” Bond tells REAL ESTATE FORUM. “It givesus some additional capabilities that are very importantstrategically, yet with the same fundamental approach.”

That essential modus operandi was established in 1973 by Wm.Polk Carey, the late founder of what is now reportedly the world’slargest owner/manager of net-leased assets. Although Carey did notinvent sale-leasebacks, having done them in one-off transactionssince the 1950s, he was among the pioneers in the concept of “poolsof net-leased assets held in securitized form,” says Bond. Careydid this initially through limited partnerships and later began aseries of public non-traded REIT affiliates that the companymanages externally, including Corporate Property Associates 15Inc., with which W.P. Carey merged on the day it became a REIT. Themerger created a company with a market capitalization of $5 billionand a net lease portfolio of more than 39 million square feetglobally.

For CPA:15’s shareholders, the merger provided a satisfying andlucrative outcome, while for W.P. Carey as a whole, it did morethan simply double the company’s size. It also made it moreappealing to institutional investors, “which was one of our goals,”says Bond. Further, being listed in REIT indices enhancesshareholder value, and Bond says the company was surprised at howquickly its addition to the MSCI US REIT and MSCI US Mid Cap 450indices was approved: two days after the newly minted trustcommenced trading on the New York Stock Exchange.