W. P. Carey Q2 2025: Unpacking Contradictions in Tariffs, Cap Rates, and European Strategy

Tariff impact on tenants, acquisition and disposition cap rates, self-storage asset strategy, tariff impacts and investment strategy, and European acquisition strategy are the key contradictions discussed in W. P. Carey's latest 2025Q2 earnings call.



Strong Investment Activity:
- W. P. Carey reported completing over $1 billion in new investments in the second quarter of 2025, with an initial weighted average cap rate of 7.5% and a weighted average lease term of 19 years.
- The growth in investments was supported by favorable market conditions and the company's ability to close deals at attractive pricing.

Earnings and AFFO Growth:
- AFFO per share increased by 9.4% year-on-year to $1.28 for the second quarter, driven by accretive investment activity and sector-leading rent growth.
- The company raised its full-year AFFO guidance range to between $4.87 and $4.95 per share, indicating a 4.5% year-over-year growth at the midpoint.

Dispositions and Capital Management:
- The company declared a dividend of $0.90 per share, representing a 3.4% increase over the prior year, reflecting strong cash flows and earnings growth.
- W. P. Carey remained confident in achieving well over 100 basis points of spread between asset sales and new investments, expecting full-year dispositions to exceed $900 million.

Portfolio Performance and Credit Quality:
- Comprehensive same-store rent growth for the quarter was 4% year-on-year, reflecting timely rent collections and leasing activity.
- The company reduced its reserve for estimated potential rent loss to between $10 million and $15 million, indicating improved credit quality and the absence of significant tenant credit events.