Welcome to W. P. Carey's first quarter 2021 earnings conference call. My name is Jesse, and I will be your operator today. All lines have been placed on mute to prevent any background noise. Please note that today's event is being recorded. After today's prepared remarks, we will be taking questions via the phone line. Instructions on how to do so will be given at the appropriate time. I will now turn today's program over to Peter Sands, Head of Investor Relations. Mr. Sands, please go ahead. Good morning, everyone. Thank you for joining us this morning for our 2021 first quarter earnings call. Before we begin, I would like to remind everyone that some of the statements made on this call are not historic facts and may be deemed forward-looking statements. Factors that could cause actual results to differ materially from W. P. Carey's expectations are provided in our SEC filings. An online replay of this conference call will be made available in the investor relations section of our website at wpcarey.com, where it will be archived for approximately one year, and where you can also find copies of our investor presentations and other related materials. With that, I'll pass the call over to our Chief Executive Officer, Jason Fox. Thank you, Peter, and good morning, everyone. I'm pleased to report that many of the positive trends we saw in the fourth quarter of 2020 have continued into 2021. We've had a very strong start to the year on several fronts. First, we're already on pace to exceed our initial expectations for investment volume in 2021, and our near-term pipeline is as strong, perhaps even stronger than it's ever been, with over $500 million of active deals at an advanced stage, much of which we expect to close during the second quarter. Second, we've delivered industry-leading rent collections throughout the pandemic and continue to have high confidence in how our portfolio will perform going forward, especially in a macro environment where the U.S. and global economies are expected to improve as COVID cases decline and business activity rebounds. Third, we executed on two significant bond issuances during the first quarter, highlighting our access to very attractively priced capital, locking in record low coupons in both the U.S. and Europe, and refinancing the majority of near-term debt maturities with our next meaningful maturity now scheduled in 2024. In the past week, we were also placed on positive outlook by Moody's, which reflects the positive trajectory of our business and balance sheet and gives us confidence that we will continue to have access to attractively priced capital going forward. Fourth, we raised equity through our ATM, creatively funding our recent investment activity and modestly de-levering compared to where we ended the fourth quarter. We also still have equity proceeds available through the equity forward we raised in 2020. Plenty of flexibility in how we fund our investment activity over the remainder of the year. The combination of closed investments, our active pipeline, strong portfolio performance, and raising capital at attractive spreads on new investments has allowed us to raise our AFFO guidance for 2021. Toni Sanzone, our CFO, will discuss our guidance raise along with our results for the quarter and balance sheet activity. Toni and I are joined this morning by John Park, our President, and Brooks Gordon, our Head of Asset Management. During the first quarter, we completed $214 million of investments, comprising $149 million of acquisitions and $65 million of completed capital projects. Our first quarter investments had a weighted average initial cap rate of 6.6%, like virtually all of our investments, provide built-in rent growth averaging 2.25% for those with fixed increases, which occur over long lease terms averaging 23 years. Reflecting our diversified approach, our first quarter investments spanned most of our core property types, though the bulk of our deals continued to be in industrial and warehouse, which currently comprise about half of our portfolio on an ABR basis. I'll touch upon a few of the more notable deals from the first quarter. In February, we completed the $75 million sale leaseback of two packing, production, and distribution facilities net leased to Prima Wawona, the leading vertically integrated grower, packer, and shipper of seasonal high-value summer fruit in the U.S. If you like peaches, there's a roughly one in three chance the last one you ate was processed in these facilities. The properties are strategically located in proximity to the tenant's farmland in California's Central Valley and represent the majority of its storage, processing, and distribution operations, a significant portion of which is cold storage. The tenant has invested significantly in the facilities, underscoring their criticality, and they're triple net leased under a master lease for a 25-year term with fixed annual rent increases. During the quarter, we also completed the $52 million build-to-suit of a new industrial R&D facility in Germany net leased to American Axle, which is a global tier 1 supplier of automotive components and systems, including electric drive technologies. The facility is strategically located in a prime industrial park near the Frankfurt Airport and triple net leased for a 20-year term with rent increases tied to German CPI. Since quarter end, we've completed three additional acquisitions totaling $186 million, the majority of which relates to our second significant investment over the last six months in grocery retail. Specifically, in early April, we closed the $119 million sale leaseback of three hypermarket properties located in Southern and Central France, which rank among the tenant's top performing sites. They're triple net leased to Casino, one of the largest food retailers in the world. From an ESG perspective, this was also an opportunity to invest in a tenant committed to transitioning to renewable energy. The properties are on a long-term master lease with rent increases tied to French CPI. Including the transactions we completed in April, our investment volume year to date totals $400 million. In addition to accretive acquisitions, a meaningful contributor to our future growth comes from the rent increases built into our leases, a significant portion of which is tied to inflation. Given renewed expectations for higher inflation, I'll take a moment to provide a little extra detail on our rent escalations. 99% of our ABR is generated by leases with some form of built-in rent increases. 61% of ABR comes from leases tied to inflation. If we enter a period of sustained inflation, we remain very well positioned for it to flow through as incremental rent growth. Of our leases with rent increases tied to inflation, the majority, representing 38% of total ABR, is based on uncapped CPI, with the largest category being those tied to U.S. CPI. The other 23% of ABR that's tied to inflation includes leases with floors and/or caps, which we refer to as CPI-based. Within this category, the average floor is around 1.5% on an annualized basis, and the average cap is approximately 3%. In an inflationary environment, if our 3% caps become relevant, it would likely mean that we would be achieving substantially higher same-store rent growth than we are today. For now, however, the floors continue to be more relevant than the caps as drivers of annual growth in our leases. Finally, 35% of ABR is generated from leases with fixed rent increases, where the average increase is approximately 2% on an annualized basis. Rent increases generally occur annually, over time will flow through to rents. Given the profile of our rent escalations, we believe we are the one of the best positioned net lease REITs for inflation. Turning to how we're positioned in the current environment. In the U.S., with economic indicators trending positive on the back of a vaccine-led recovery, we're seeing strong deal flow across almost all property types, the exception being office, where sellers seem to be taking a wait and see approach given the significant rise of work from home during the pandemic. Industrial assets continue to be aggressively pursued by a wide range of buyers, but it remains a very deep and diverse sector, and we continue to find plenty of accretive opportunities as our recent transaction momentum demonstrates, underpinned by our cost of capital. As the manufacturing sector continues to gather strength in the U.S., it should support growing interest in sale leasebacks as a means of freeing up capital to be redeployed in companies' core businesses. In Europe, while competition also remains strong for industrial assets, our significantly lower cost of debt in the region results in spreads that are generally 50-100 basis points wider than for comparable assets in the U.S. Food retail, particularly grocery, has proven to be a resilient sector during the pandemic and has seen further cap rate compression, especially in the U.S., driven by a flight to quality. We generally prefer retail in Europe where there is lower retail square footage per capita, higher barriers to entry, and less competition. As our recent sizable investments in retail grocery illustrate, we have good access to deals in this sector, successfully executing on top-performing stores. A recent market theme in Europe has been the record amounts of real estate being sold by companies as they look to shore up their COVID-impacted balance sheets. As the market leader for sale leaseback transactions in the region, this is a positive trend that expands our addressable market, and we're confident in our ability to capture our share of deals. Before I conclude my remarks on spreads and our ability to continue generating growth even in an environment where cap rates remain tight, our cost of debt has become increasingly efficient in recent years. In Europe, we issued nine-year bonds during the first quarter with a coupon below 1%. In the U.S., we issued 12-year bonds with a coupon in the low 2s. In addition, our investments continue to have attractive built-in growth, and we originate leases that tend to be the longest in the net lease sector. We believe it's important for investors to understand not only the day one accretion from our going-in cash cap rates, but also the average yield we are achieving over lease terms of 20 years or more with strong annual rent bumps. For an investment with an initial cap rate in the mid 6s, the average yield over 20 years with 2% annual rent bumps is approximately 8%. In closing, through a combination of the deals we've closed to date, the capital projects and commitments scheduled to complete this year, and a near-term pipeline that's the strongest we've seen in many years, we're on track for a record year for deal volume, supported by a favorable cost of capital, substantial liquidity, and the flexibility to access capital markets opportunistically. With that, I'll pass the call over to Toni. Thank you, Jason, and good morning, everyone. This morning we reported AFFO of $1.22 per diluted share and real estate AFFO of $1.19 per share. We had a strong first quarter on all fronts with our investment activity and debt refinancings positioning us well to raise our earnings expectations for the remainder of the year. As Jason mentioned, we have over $500 million of active deals in our near-term pipeline. Our portfolio continues to perform consistently well as it has since the start of the pandemic, with first quarter rent collections at 98% of ABR. The number of tenants with rent disruption remains very small and manageable, with no new themes to report. During the first quarter, we had one retail tenant in Europe partially pay rent as a result of a temporary lockdown. We excluded the unpaid portion totaling $2.9 million from AFFO, in line with our continued conservative approach to revenue recognition. We're actively pursuing this rent and would only recognize it in revenue and AFFO once there is more certainty of collection. As a reminder, we had no significant rent receivable from 2020 and minimal rent deferrals. The few deferrals we did have were part of broader lease restructures, where the deferred rent amount is now reflected in current ABR, and the tenants have resumed paying rent. Overall, our collection rate remains very strong and on track with our expectations for the year, with April collections in line with the first quarter. As such, going forward, we will be reporting rent collections on a quarterly basis. Turning to same-store rent growth. Comprehensive same-store rent growth, which is based on pro rata rental income included in AFFO, was negative 0.6% year-over-year, in part reflecting the fact that the prior period was pre-COVID. As we've previously noted, this metric will move around from quarter to quarter, especially as COVID-related disruptions and rent recoveries flow through the period-over-period comparisons in our results. For the full year, we expect our comprehensive same-store rent growth to be in line with our pre-COVID growth rates. Contractual same-store rent growth, which reflects the average rent increases in our leases, was 1.6% year-over-year, a 10 basis point increase over the fourth quarter, driven primarily by a rent escalation for Advance Auto, which has moved back into our top 10 tenant list as a result. Leasing activity for the quarter was primarily comprised of five-year lease extensions on properties leased to OBI, a do it yourself retailer in Europe, extending the maturity from 2024 to 2029 with full rent recapture on $14 million, or 1.2% of ABR, and no capital outlay. On a trailing eight quarter basis, we've recaptured 95% of the prior rent, which relates to 11.5% of ABR and added 7.2 years of incremental lease term while spending just $1.44 per sq ft on tenant improvements and leasing commissions. Moving on to our balance sheet activity. The first quarter was a busy quarter for our capital markets activity, raising over $1 billion in well-priced long-term and permanent capital. In February, we issued $425 million of 12-year senior unsecured notes at a coupon of 2.25%, representing a 108 basis point spread to the benchmark treasury. Also in February, we issued EUR 525 million of 9-year unsecured notes at a coupon of 0.95%, representing a 110 basis point spread to the benchmark. I'm pleased to say both of these bond issuances were executed at our tightest spreads and lowest coupons to date, demonstrating the continued strengthening of our credit profile. Proceeds from these offerings were primarily used to prepay approximately $400 million of mortgages with a weighted average interest rate just over 5%, and for the early redemption of EUR 500 million bonds, which carried a 2% coupon and was scheduled to mature in 2023. In addition to taking advantage of favorable market conditions and getting ahead of a rising interest rate environment, we effectively reduced refinancing risk by addressing the majority of our debt due before 2024 while extending our weighted average debt maturity from 4.8 years-5.9 years. We further advanced our unsecured debt strategy, reducing secure debt as a percentage of gross assets to 4.6%, down from 7.2% at the end of the fourth quarter, and increasing our unencumbered ABR to 87%. Locking in these long-term rates also resulted in an overall reduction to our weighted average cost of debt by 20 basis points to 2.7%, which is expected to generate annualized interest savings of approximately $17 million. Since the debt repayments occurred closer to the end of the first quarter, we expect to see the interest savings start to flow through earnings more meaningfully beginning in the second quarter. On the equity side, during the first quarter, we tapped into our ATM program, issuing just over 2 million shares of common stock at a weighted average price of $70.26 per share, raising net proceeds of $140 million. Far in the second quarter, we've issued just over 443,000 shares at a weighted average price of $71.67 per share, raising additional net proceeds of approximately $31 million. We continue to have the flexibility to settle approximately 2.5 million shares under forward agreements in 2021 for anticipated net proceeds of approximately $160 million. From a leverage perspective, we ended the first quarter with debt to gross assets of 41.2% and net debt to adjusted EBITDA of 5.9x, which does not factor in the additional equity we have available to issue under forward agreements. We continue to target debt to gross assets in the low to mid 40% range and net debt to adjusted EBITDA in the mid to high 5x. Our successful execution raising capital this quarter has bolstered our already strong balance sheet with over $1.8 billion credit facility virtually undrawn at the end of the quarter, ensuring we remain extremely well positioned to execute on our investment pipeline and retain significant flexibility on when we decide to access the capital markets. Turning now to our 2021 guidance. As announced this morning, we've raised our AFFO guidance range by $0.06 at the midpoint, driven primarily by the strong momentum in our investment activity year to date, both in terms of volume and pace, as well as by the interest savings we will generate from the debt refinancing activity I discussed earlier. We've increased our investment volume range to between $1.25 billion and $1.75 billion, which as always, includes capital investments and commitments scheduled to complete this year. Our expectations for disposition activity remain unchanged at between $250 million and $350 million for the year. Year to date, disposition activity has generated about $93 million in proceeds, including $79 million that closed in the second quarter. Our guidance continues to assume uncollected rents of between 1% and 2% of ABR. We continue to expect G&A expense for the full year to fall within our original range of $79 million-$83 million. I'll note that our first quarter G&A generally trends higher than other quarters due to the timing of payroll-related taxes, and is therefore not a run rate for the rest of the year. Embedded in our AFFO guidance is $9.7 million of cash dividends generated by other real estate investments, which we spoke about on our last earnings call. In January, we received a $6.4 million dividend on our common equity investment in Lineage Logistics, which we assume will be the only distribution we receive from Lineage this year. In April, we received $3.3 million of preferred stock dividends on our investment in Watermark Lodging Trust, reflecting the amount due for the prior four quarters. These dividends will be the primary components of a new line item on our income statement called non-operating income. Taking all of this together, for the full year, we currently expect total AFFO of between $4.87 and $4.97 per share, including real estate AFFO of between $4.74 and $4.84 per share. In closing, we remain focused on growth. Our strong start to the year and robust pipeline put us on a path to deliver our highest annual investment volume since converting to a REIT. Furthermore, our balance sheet is well positioned for rising rates, with no significant maturities until 2024, and we have one of the best-positioned net lease portfolios with embedded rent growth, especially for an inflationary environment. With that, I'll hand the call back to the operator for questions. Thank you. At this time, we will take questions. If you would like to ask a question, simply press star, then the number one on your telephone keypad. If you would like to withdraw your question, press star, then the number two. Our first question is coming from the line of Harshil Nanalal with Green Street. Please proceed with your question. Thank you. I just wanted to ask, in light of yesterday's deal of Realty Income acquiring VEREIT, do you feel like the competitive landscape will change with Realty Income entering continental Europe, and further that will make it more difficult or competitive for you to get deals there? Yeah, good morning. I don't think it really changes anything. Certainly they are now a larger net lease REIT, but they've been making progress moving towards Europe, the U.K. first, based on what we read that they say, Europe next. It's a big market over there. It's as large if not larger than the United States. There's actually a higher percentage of owner-occupied real estate. The sale leaseback market is even deeper. Generally, we don't compete directly with them in the U.S. There's probably a little bit more overlap than what we do in Europe. I don't think this changes things. If anything, I'll say that anything that brings attention to the net lease space, maybe in particular, a diversified model within the net lease space and one that includes geographic diversification, I think that's a positive from my point of view. Thank you. Another one from me. Can you talk about the occupancy declines on a sequential basis in the past two quarters? What is driving this? Can you talk about what you're expecting going forward? I know you don't provide guidance on this, but just your outlook would be helpful. Yeah, Brooks, you want to take that one? Sure. Vacancy did tick up slightly. It's a few properties, I think five over that period that have come off lease. Not really any trends in there. Pretty anecdotal. We do expect occupancy will tick back up to in the 99% range, over the course of this year. There's a lot of activity in process. Active deals on roughly 30% of that vacant square footage and good prospects on the balance. That'll go up and down in any given quarter, but we would expect it to remain in that 99% range in the long run. Great. Thank you. You're welcome. Thank you. Our next question is coming from the line of Joshua Dennerlein with Bank of America. Please proceed with your question. Yeah. Hey, guys. Hope everyone's well. Hey, good morning, Josh. Question on the inflation front. What inflation metric are your leases based on? Maybe what's the lag between when we see inflation and how that hits your P&L? Sorry, Josh, I didn't hear the very first part. You said what's the metrics? The inflation metric. Like is it a core CPI- Oh, got it. CPI or some other metric? Yeah, depends on the region clearly. Brooks, do you have the details on kind of driving into the type of CPI? Sure. As Jason said, it's really a mixed bag. On balance, the majority are on the headline basis. In Europe, there's a bit more diversity in terms of country specific or whether it's more of a producer measure or not. On the whole, it's largely a headline type metric. From a timing perspective, CPI itself has a bit of a lag just inherently, as actual price increases flow through the year-over-year metric. From our lease perspective, it really just depends on when the actual bump occurs. The frequency of our bumps is generally annually. It's on a weighted average basis, I think about one and a half years. It will flow through our revenues for sure, but there is a bit of a lag there. Okay. Interesting. Cool. Yeah. Josh, as I think you know, we do have close to two-thirds of our leases tied to CPI, which is why you're asking the question, of course. We think there could be some real upside in our same stores going forward. Yeah, I know, it's nice that it applied to headline inflation too. That always seems like it's got a little bit more juice than core. Nice work. Impressive on the euro debt issuance below 1%. Do you think you'll continue to increase your leverage in Europe to continue to enhance your spreads, or is there some kind of governor that you would limit yourself to over there? Yeah. It's more of a hedging mechanism, certainly. Toni, why don't you dig into some of the details? Yeah. We certainly do look to increase and over-lever in Europe to protect ourselves on the foreign currency side. I don't expect that we would take that up significantly higher than where we are from a leverage perspective. I think we'll, by and large, keep the balance of where we stand now. I don't think we're looking to find a mix to really artificially create any arbitrage there. Awesome. Thanks, guys. Appreciate it. Thanks, Josh. Thank you. Our next question comes from Sheila McGrath with Evercore. Please proceed with your question. Yes, good morning. Jason, you mentioned new opportunities emerging in manufacturing. In general, is pricing of these assets, are they at a meaningful yield premium to more traditional warehouses? Just some more color on how you're sourcing these opportunities. Are they widely marketed or relationship driven? Yeah. I'll take the first part of the question first. Certainly, the headlines that we all read about are for logistics assets when we hear about them trading in the fours or even sub-fours on occasion. A lot of that is driven by the type of real estate, the location, but also the fact that these are shorter-term leases, in many cases multi-tenant, and there's a real mark-to-market opportunity when those leases expire, so that the stabilized yields might be meaningfully higher. What we're behind are stabilized assets. The ZIP code in which our cap rates would range for logistics themselves are probably more in the low fives and up into the sixes, depending on a number of factors. You talk about sourcing. Much of what we do are sale leaseback. There's inherently a more limited universe of buyers that participate in that market. We think we do have some pricing power in addition to the benefits that we get on structuring and underwriting, given that our tenant is also our counterparty on the sale. Digging a little deeper, we do see that industrial is a really deep and diverse sector. It's not just logistics assets, as you pointed out. There's also manufacturing, particularly light manufacturing that we do a meaningful amount in. Food production, cold storage we've talked about, R&D. All property types we've had success targeting and properties that tend to have a meaningful yield premium, just given the fewer buyers targeting those assets. Generally, for cap rates, I would say our targets are from 5% to 7%, and we've averaged in the mid-sixes over the last 18 months, maybe a little longer. I think that'll continue going forward. Perhaps it dips down a little bit depending on the mix of assets and what we see trending in the market. We feel pretty good about our ability to find these deals, in many cases off market. In some cases, very limited marketing, given the structuring of the transaction. Okay, great. One more question for me. You do have lower investment-grade revenues versus your peers, and that might be some of the reason that you traded a lower multiple. Can you just outline for us how you don't necessarily think your strategy is more risky despite this differentiation, either over historic context on collection losses or underwriting losses, just to give people the perception of the risk inherent in your strategy? Yeah, sure. We do have perhaps a little bit lower investment-grade rents compared to some of our peers. It still stands around 30%, so it is a meaningful portion. Obviously those cash flows are quite strong. Where we do focus, the reason why it is 30% and not higher perhaps, is because we do focus in the just below investment-grade credit spectrum. An area that we think there is much less capital flow. It requires more underwriting expertise where our deal team can really differentiate themselves. We have a long history of deep credit underwriting and structuring capabilities that I think really provides a competitive advantage for us. Of course, you are also going to get some incremental better yields there. You also get better structuring. We get longer lease terms. We get better bumps. We occasionally get covenants there. It does not necessarily lead to any difference in performance. I think our collections throughout the pandemic reflects that. From the very beginning we were in the mid-90s, trended quickly, once we got into summer, to the high 90s, and we remained in that area. It's mainly because when we're targeting sub-investment grade, we're also focusing on larger companies. Companies with balance sheets that can withstand some economic disruption, that have access to institutional capital, and we think that's really the sweet spot for investing in net lease. Thank you. One quick question for Toni. On the non-operating income, you said no more Lineage distributions. Is that the case also for Watermark, so that line item goes to zero? That's our assumption right now. The Watermark preferreds, their quarterly payments, they can pay it quarterly or annually. We're currently assuming we just collected the last four quarters, that we don't see anything else for the rest of this year in guidance. Okay, thank you. Thanks, Sheila. Thank you. Our next question comes from the line of Manny Korchman with Citi. Please proceed with your question. Hey, good morning, everyone. Jason, you talked about a pipeline, I think of $500 million with most expected to close in 2Q. Can you just give us a rough breakdown of the types of properties within that near-term pipeline? Yeah, sure. I'll just recap quickly what we've done for the year so far. We feel like we've had great momentum coming out of Q2 in the beginning of Q4, and the beginning of Q1. That's about $400 million of deals completed, another $130 million of capital project. These are under-construction properties that are fully leased that we expect to complete in 2021, and therefore commence rent. There's about 530 locked in, yes, I did reference, I would call it, over $500 million of deals in advanced stages. Much of that we think will close in the second quarter and the pipeline continues to build as well. Year to date, just to give you some comparison. Year to date, what we've closed is about 55% industrial, I think 30% retail, which is predominantly in Europe. The split between the U.S. Europe is about 50/50. Call it 55/45 U.S. to Europe. The pipeline is trending more towards industrial. It's 80-plus% industrial at this point in time. The remaining amount is really retail, and again, it's slightly higher weighted towards the U.S., call it 60/40. That pipeline is changing and building. The components of that will change as well. What we've done year to date is almost entirely sale leasebacks, build-to-suits, or expansions of our existing portfolio. I think all but one transaction at this point, year to date, falls in those categories. We're still having a lot of success sourcing through those channels and putting meaningful amount of dollars to work. Great. If we look at your overall pipeline for the year, you obviously increased your acquisition guidance. How have you changed your pricing expectations on that increased pipeline, if at all? Well, given our diversified approach, we really target a wide range of cap rates. I'd say generally speaking, we've talked about this before, probably it's from 5%-7% with some outliers above and below those ranges, depending on the specific details of a particular transaction. Year to date, I think we're mid-6 cap rate. I do think that probably trends down a little bit, maybe into the low to mid-6s. A lot of it will depend on the mix of properties, in particular Europe. Cap rates might be a little bit lower in Europe, call it 50 basis points lower. Our borrowing costs are still at least 50 basis points, probably more like 100 basis points cheaper there. We're still generating better spreads despite the lower cap rates. I think the other thing to note is that we talk about going-in cap rates, I think you really got to factor in the bump structure that we have. I mentioned that at the beginning of the call that our leases have meaningful bumps and the going-in cap rates maybe are less relevant. The average yield or unlevered IRR in many cases is more important in how we look at deals and how we evaluate their spread to our cost of capital. Thanks, Jason. Yep. Welcome, Manny. Thank you. Our next question comes from Greg McGinniss with Scotiabank. Please proceed with your question. Hey, good morning. In regards to the pipeline, I guess just transactions in general, have you changed your internal approach or are there some external factors that may be contributing to the improved pipeline? Does this potentially point to a longer-term trend of increasing investment expectations in future years? It's a good question, Greg. We've gotten that question in some individual meetings as well. I think there's a couple things to talk about here. We understand the perception because the last number of years we've hovered around the $1 billion mark. It's probably helpful just to provide some context here on why maybe that's not a good run rate for us and it's something higher. If you look back over the last number of years, there are some macro forces or really strategic events at W. P. Carey that are important to note. For one, we closed CPA:17 merger at the end of 2018. From there, we continued the process of winding down the investment management platform. As a result, our cost of capital has improved since 2018. That's really expanded our funnel. We began putting that into practice in, call it 2019, especially by the end of that year and into the beginning of 2020. I think at that time, we had closed probably about $500 million of deals in that fourth quarter, and maybe the first couple of weeks of January. We were really beginning to hit our stride. In fact, last March, we were sitting on a very sizable pipeline, probably something that feels a lot similar to what it is right now. Of course, we got derailed by COVID, which clearly none of us could have predicted. I think what you're seeing now in 2021 is really just a combination of having a clear runway, free of all distractions from some of our prior strategic changes, and really a cost of capital that works quite well. Certainly, our diversified approach helps. We can generate a pretty wide opportunity set across property types and geographies, and as I mentioned a few minutes ago, a broad range of cap rates. Our improved cost of capital has also allowed us to expand that range to include probably more in that lower yielding bottom end of that range, but what we think are higher quality industrial assets, maybe ones that have higher embedded growth or better market dynamics. Lastly, you've seen us continue to ramp up sale leasebacks, and the availability of sale leasebacks really continues to increase, we feel, is a bit of a permanent shift in how corporates view owning versus leasing real estate. As a market leader in sale leasebacks, I think this is really a good trend for us. All of this is now being reflected in 2021. I mentioned year-to-date, about $400 million deals done to date, another 130 under construction, and then the pipeline of call it half a billion and really growing. We feel like that's a sustainable trajectory for us, and there's no reason to think that won't continue going forward. Okay, great. Thanks for the color. A quick funding question. On the forward equity offering, do you actually need to settle that? Does it maybe make sense to let it expire and just keep using the ATM at $73 a share versus the forward at $63? No, I think we would have to settle that sometime this year. I don't think we have to, but I do think our expectation is that we like that capital still. We like having the flexibility of having it out there. As you mentioned, we did tap the ATM at pretty accretive pricing compared to our investment activity. I think you would expect us to continue to do that as well as to potentially draw the remaining proceeds, perhaps even as soon as the end of the second quarter. I think we'll just keep an eye on the investment volume. I think the point is we have a significant amount of activity ahead of us that we need to fund, and we like our opportunity set and where we can fund that from. I think both avenues are attractive to us. All right. Thanks, Toni. Thank you. As a reminder, if you would like to ask a question at this time, please press star one on your telephone keypad. Our next question comes from the line of Frank Li with BMO. Please proceed with your question. Hi, morning, everyone. Jason, just curious if you also took a look at. Morning, Frank. Hi, Jason. Just curious if you also took a look at the VEREIT deal, and does that transaction make it more imperative for you to do a similar deal given their combined market cap and the advantages that brings? Yeah, it's a high-profile transaction, we're digesting that announcement and the details that were provided. We probably can't talk too much about it specifically. I don't think it changes anything from how we're motivated. We still are looking at everything, whether it's portfolios, individual acquisitions, and potentially M&A as well. I don't think that changes. Realty Income, as I mentioned earlier, they were the largest. They're a little bit larger now. I think it's business as usual for us. Okay, thanks. Then you mentioned the majority of the $500 million of active deals will likely close in the second quarter. That'll put you close to $1 billion for the year if you include the capital investment projects. Is it safe to assume that there could be some upside to your investment guidance range, given that the acquisitions tend to be back-end weighted? Yes. It's hard to predict what happens for the rest of the year. We don't have a lot of visibility into more than the next three months, but the trends are quite positive, and I think if we continue at the pace that we're on right now, I think you could probably expect something that could put us in the top half of that range or maybe even above the range. We're talking next, in the end of July, perhaps, we're talking about a further increase. It's hard to predict. As you know, our transactions tend to be a little bit lumpier, so maybe even less visibility into them. We like our pace right now. We like the market opportunity. We like our cost of capital and liquidity. We're feeling quite positive about it. Okay. Just one more, and then if we look at your capital investment pipeline, you added a lab project. I think this is the first one in this property type. Can you talk about the opportunity there and potential for additional similar projects? Yeah, with our diversified approach, we feel that R&D is kind of a hybrid between industrial and office in some ways. It's a specific use. The tenant tends to have a high investment into the property as well. We kind of do these on long lease terms, which is the case here. You get some incremental cap rate given that it's a little bit outside of the core focus of most industrial buyers who focus on warehouse. We like a lot about R&D. We think there are more opportunities. There are some in our pipeline that we're looking at right now. Again, as a diversified net lease investor, we have the benefits to look across a broad range of property types, and we'll continue to do that. Okay, great. Thanks, Jason. Yep. You're welcome. Thank you. At this time, I am not showing any further questions. I'll now hand the call back to Mr. Sands. Great. Thank you, everyone, for your interest in W. P. Carey. If anyone has additional questions, please call investor relations directly on 212-492-1110. That concludes today's call. You may now disconnect.