W.P. Carey Stock Up 9% in Three Months: Will It Continue to Rise?

W.P. Carey WPC shares have rallied 9% in three months, outperforming the industry's upside of 0.5%.

The company is poised to benefit from a high-quality, mission-critical, diversified portfolio of single-tenant net lease commercial real estate in the United States, and Northern and Western Europe. Its specialty in long-term sale-leaseback transactions with contractual rental bumps leads to steady revenue generation. Strategic portfolio repositioning efforts appear promising. A solid balance sheet aids future growth endeavors.

Last month, WPC reported second-quarter 2025 adjusted funds from operations (AFFO) per share of $1.28, surpassing the Zacks Consensus Estimate of $1.23. The figure improved 9.4% from the year-ago quarter.

Results reflected higher revenues, aided by strong investment activity and a disciplined disposition strategy. WPC raised its full-year 2025 AFFO per share guidance.

Factors Behind WPC Stock Price Rise: Will This Trend Last?

W.P. Carey invests in high-quality assets that are mission-critical for its tenants’ operations. Through accretive expansions, renovations and follow-on deals, the company capitalizes on the existing tenant relationships by generating value-creation opportunities within its existing portfolio. As such, due to the inherent nature of its portfolio, the REIT enjoys higher occupancy, which stood at 98.2% as of June 30, 2025 and generates better risk-adjusted returns.

The company specializes in sale-leaseback transactions, whereby it acquires critical real estate and then leases it back to the seller on a long-term, triple-net basis. Under this arrangement, the lessee needs to pay the majority of the operational and maintenance costs for the property. As such, W.P. Carey can generate steady revenues with minimal investments.

Moreover, the portfolio is well-diversified by tenant, industry, property type and geography, which aids steady revenue generation. The existence of rent escalations yields stable cash flows. More than 99% of the annualized base rent comes from leases with contractual rent increases, with 50% linked to the consumer price index.

W.P. Carey has been capitalizing on growth opportunities. The total investment value for the second quarter stood at $548.6 million. In the second quarter of 2025, the company committed to funding new capital investments and commitments to the tune of $108.3 million, scheduled to be completed in 2027. During the same period, WPC sold 46 properties for gross sale proceeds of $364.2 million. Such match-funding efforts indicate the company’s prudent capital management practices and will relieve pressure from its balance sheet, which is encouraging.

WPC has a healthy balance sheet position with ample liquidity. As of June 30, 2025, the company had a total liquidity of $1.7 billion, including around $1.3 billion of available capacity under its senior unsecured credit facility, $244.8 million of cash and cash equivalents and $135.2 million of cash held at qualified intermediaries. W.P. Carey’s share of pro rata net debt to adjusted EBITDA was 5.8X. The company also enjoys investment-grade ratings of BBB+ from S&P Global Ratings and Baa1 from Moody’s, rendering it favorable access to the debt market.

Key Risks for WPC

Due to the uncertain macroeconomic situation with policy changes, choppiness in the real estate market continues with subdued demand, which is a concern for W.P. Carey. Tenant bankruptcy woes also ail.

Analysts seem bearish about this Zacks Rank #2 (Buy) company. The Zacks Consensus Estimate for its 2025 FFO per share has been revised southward by 2 cents to $4.87 over the past month.

Other Stocks to Consider

Some other top-ranked stocks from the broader REIT sector are Host Hotels & Resorts (HST) and Terreno Realty (TRNO), each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for HST’s 2025 FFO per share is pegged at $2.35, suggesting a year-over-year decrease of 1%.

The consensus estimate for TRNO’s 2025 FFO per share stands at $2.60, indicating an increase of 7.4% year over year.

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.

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This article originally published on Zacks Investment Research (zacks.com).

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