Hello, and welcome to W. P. Carey's Fourth Quarter and Full Year 2022 Earnings Conference Call. My name is Donna, 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 2022 fourth 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 Jason Fox, Chief Executive Officer. Thank you, Peter, good morning, everyone. 2023 marks several anniversaries for W. P. Carey. It was 50 years ago that Bill Carey founded the company. 25 years ago that we became a public company. It was also 25 years ago that we began investing in Europe, where we pioneered sale-leasebacks. The company has evolved considerably over the last 50 years. The most recent development being our exit from the non-traded REIT business, culminating in our merger with CPA:18. The completion of our transition to a pure-play net lease REIT in 2022 reflects our focus on real estate AFFO growth, driven by accretive investments and rent escalations. Despite the challenging market backdrop in 2022, we generated real estate AFFO growth of 6.3% per share for the year. This morning, I'll focus my remarks on our recent investment activity and outlook. Toni Sanzone, our CFO, will cover our results, the 2023 guidance we announced this morning, and our balance sheet positioning. We also have our President, John Park, and our Head of Asset Management, Brooks Gordon, on the line to take questions. Starting with externally driven growth. Over the course of 2022, the U.S. 10-year Treasury rate rose over 200 basis points, while cap rate lagged well behind as sellers were slow to adjust their expectations. Buyers fought to preserve spread, with transactions often taking longer to negotiate and close, especially sale-leasebacks tied to corporate M&A. Overall, our investment volume for the year totaled $1.4 billion at a weighted average cap rate of 6.3% and a weighted average lease term of 20 years. In addition to the more than $2 billion of real estate we added at a cap rate in the mid-sixes through the CPA:18 merger. With interest rates moving another leg higher in October, we actively exerted our pricing power during the fourth quarter, requiring higher yields and willing to be patient as cap rates began to move, creating opportunities to transact at more attractive spreads. I'm pleased to say we executed investments at meaningfully higher cap rates during the fourth quarter, although on investment volume that was lighter than we anticipated, totaling $159 million. Overall, these investments blended to a weighted average cap rate of 6.8%, primarily reflecting warehouse and industrial investments, with going-in cap rates in the high sixes and into the sevens. While interest rates have fallen somewhat since the 4th quarter, the large majority of the investment opportunities we are evaluating today also have cap rates in the high sixes and into the sevens, resulting in investment spreads that are considerably more attractive than they were for most of 2022 and at levels where we are comfortable transacting. Looking ahead, we are well positioned to take advantage of the current market environment. Our diversified approach gives us the ability to invest across property types, both in the U.S. and Europe, and ensures we have the widest possible funnel of opportunities with companies across a variety of industries. While we currently see more actionable opportunities in the U.S., where cap rates have adjusted more quickly, we do expect cap rates in Europe to catch up with higher interest rates. Furthermore, the environment for sale-leasebacks is as favorable as we've ever seen it, as high-yield debt and leverage loans remain very expensive. Companies are increasingly exploring alternative sources of capital, including sale-leasebacks. In fact, private equity firms that we previously never saw use sale-leasebacks are now looking at it as a source of capital, enabling us to develop new sponsor relationships. We expect these market conditions to continue for the foreseeable future, and that we will be the major beneficiary of the increased deal flow as the market leader in sale-leasebacks. Of course, the strength of our balance sheet, including significant liquidity, gives us a competitive advantage with sellers who remain concerned about execution risk. Our competitive position is especially compelling compared to bidders who rely on asset-level debt, which has either become prohibitively expensive or unavailable, particularly for tenants just below investment grade that we target. Currently, we have a strong near-term pipeline, with over $500 million of investments at advanced stages or under letters of intent. This, in conjunction with about $156 million of capital investments or commitments scheduled to complete in 2023, and the deals we've closed year to date gives us visibility into at least $700 million of deal volume a little over a month into the year. Given what we're seeing today, we expect to close meaningfully higher investment volume in 2023, totaling roughly $2 billion at higher cap rates and wider spreads. Moving to our capital markets activities. Despite sharply higher interest rates in a turbulent capital markets backdrop throughout much of 2022, our stock price held up extremely well. We ended the year as one of the top performing REITs. The relative strength of our stock has enabled us to raise well-priced equity capital, and we currently have about $560 million of equity available for settlement under forward sale agreements, raised at an average price of about $84 per share. On the debt side, we were one of a relatively small group of REITs to issue attractively priced debt in 2022, with our inaugural EUR 350 million private placement bond offering in September at an interest rate in the mid-3s. I'm pleased to say that the improvement in our credit profile was recognized by the rating agencies, with Moody's upgrading us to Baa1 in September, followed by S&P upgrading us to BBB+ a few weeks ago. These upgrades incrementally improve both our access to debt and cost of debt, which is currently among the best priced in the net lease sector. Our ability to raise well-priced capital in 2022, in conjunction with our revolving credit facility, has ensured we've entered 2023 exceptionally well positioned with more than enough dry powder to execute on our near-term pipeline on a leverage neutral basis. Given where this capital was raised, we are very comfortable with our ability to deploy it accretively through the deals currently in our pipeline and into new investments, given that transaction cap rates appear to be stabilizing around current levels. We are also comfortable with our ability to continue investing accretively at tighter cap rates than our current targets if we see interesting opportunities, given where we expect to be able to raise capital in 2023. Lastly, I want to touch briefly upon the quality of our portfolio amid concerns about inflation and the potential for at least a mild recession. We remain uniquely positioned within net lease with best in class rent growth and proven resiliency. We own a well-diversified portfolio of critical real estate leased to large companies on long term leases, with a weighted average lease term of just under 11 years. It also remains healthy, with occupancy at 98.8%, fourth quarter rent collections of over 99%, and a benign watch list. Before I hand over to Toni, I'd like to take this opportunity to thank our employees, past and present, who've helped shape W. P. Carey over the past 50 years into the company it is today. All of the milestones we're celebrating this year and the solid results we've achieved would not be possible without our dedicated and talented team. I'm proud that we've been included in the Bloomberg Gender-Equality Index for the third year in a row, one of only a handful of REITs selected this year, highlighting our long standing commitment to gender equality and an inclusive culture. With that, I'll pass the call over to Toni. Thank you, Jason. Good morning, everyone. This morning we reported AFFO per share of $1.29 for the fourth quarter, bringing full year AFFO per share to $5.29, and real estate AFFO per share to $5.20, an increase of 6.3% over the prior year, reflecting the accretive impact of both new investments and our merger with CPA:18, which closed in August, as well as the strength of our rent growth. During the fourth quarter, we continued to benefit from inflation protection built into our portfolio. Overall, contractual same-store rent growth remained at a record 3.4% year-over-year, which is up 160 basis points versus the year-ago quarter. Given the timing lag on which our inflation based leases escalate, we expect contractual same-store rent growth to remain elevated throughout 2023 and well into 2024, even if inflation comes down. We estimate that it will increase to around 4% in the first quarter, when roughly 40% of ABR with rent increases tied to inflation will go through scheduled rent bumps and remain around 4% for the full year. Comprehensive same store rent growth for the fourth quarter, which is based on the pro rata net lease rent included in our AFFO, was 1% year-over-year, primarily reflecting elevated rent recoveries in the prior year period. Normalizing for these recoveries brings comprehensive same store above 2%, which is about 100 basis points below our contractual same store and in line with historical trends. Comprehensive same store in the 2022 fourth quarter also included downtime on vacant assets, the large majority of which are in the process of being repositioned or expected to be sold during the first half of this year. Fourth quarter leasing activity comprised nine renewals or extensions. Overall, we continued to achieve positive rent recapture, totaling 110% of the prior rents, driven by warehouse and industrial, adding 8.3 years of weighted average lease term. Other lease related income for the fourth quarter included the $5 million settlement of a claim on the guarantor of a prior lease, the timing of which was accelerated, bringing the full year total for this line item to $33 million, just above our expectations for the year. For 2023, we are currently assuming that other lease related income remains relatively consistent with 2022 levels. Non-operating income for the fourth quarter primarily comprised realized gains from currency hedges totaling $6 million, down from almost $9 million for the third quarter. For the full year, non-operating income totaled $30 million, including $24 million in realized gains from currency hedges. Our 2023 guidance assumes currency rates remain at or around their current levels, which would result in expected gains from currency hedges of approximately $15 million. As a reminder, a strengthening euro would positively impact our cash flows and earnings, with lower hedging gains as an offset. Non-operating income in 2022 also included $4 million in dividends received from our equity interest in Lineage Logistics. We have not received and do not expect to receive a dividend from our investment in 2023. Lineage continues to perform well and our investment now totals just over $400 million, including a $39 million mark to market gain during the fourth quarter based on its most recent offering valuation. Disposition activity during the fourth quarter comprised six properties for gross proceeds of $68 million, bringing total disposition proceeds for the year to $244 million. A large portion of which were legacy CPA: 18 assets whose disposition was contemplated in conjunction with the transaction. Operating properties generated NOI of $17 million during the fourth quarter, up from $12 million for the third quarter, with the increase primarily reflecting a full quarter contribution from the operating self-storage portfolio we acquired as part of the CPA:18 merger. At year-end, our operating assets comprised 84 self-storage properties, two student housing properties, and one hotel. Separately, in January of this year, 12 of the Marriott hotels we own, which were previously net leased, converted to operating properties upon expiration of their master lease. Marriott will continue to operate and manage these hotels under long-term franchise agreements, and we expect their NOI contribution to be marginally higher than the $16 million of ABR they generated in 2022 as net lease assets. These are non-core assets that we plan to sell, with the exception of three for which we are pursuing very attractive redevelopment opportunities. We will provide updates as we make progress with the Marriott sales, but for purposes of our 2023 guidance, we are assuming they occur late in the year, recognizing they have the potential to move into 2024. For 2023, we expect NOI from all operating properties to total around $100 million, with roughly three quarters of that coming from self-storage, which is expected to achieve NOI growth in the mid to high single digits as compared to 2022. As a reminder, the same store metrics I discussed earlier reflect only net lease assets and not operating properties. Turning now to expenses. Interest expense totaled $68 million for the fourth quarter, bringing the full year total to $219 million, up 11% over the prior year. The weighted average interest rate on our debt was 3% for the 4th quarter and 2.7% for the full year. Our guidance currently assumes higher base rates will result in our weighted average cost of debt approaching the mid-threes. This is dependent on the specific timing and execution of capital markets activity as well as further interest rate movements. Non-reimbursed property expenses were $14 million for the 4th quarter, bringing the full year total to $51 million. The amounts for both periods were elevated as a result of higher vacant asset carrying costs, higher maintenance and legal expenses, as well as real estate tax accruals. For 2023, we currently expect non-reimbursed property expenses to decline to between $43 million and $47 million for the full year as a result of anticipated vacant asset sales and lease up. The resolution of certain tenant related back taxes and the timing of asset sales could move us to either end of that range. G&A expense was $23 million for the fourth quarter, bringing the full year amount to $89 million in line with our guidance range. For 2023, we expect G&A to be between $97 million-$100 million, which includes the loss of reimbursements from CPA:18 and reflects our larger asset base as well as inflationary increases. Tax expense totaled $10 million for the fourth quarter on an AFFO basis, which is mainly comprised of foreign taxes on our European portfolio. We expect tax expense to total between $40 million-$44 million for 2023, driven by the inflationary impact on foreign rents as well as the addition of assets acquired in the CPA:18 merger. Turning now to the 2023 guidance we announced this morning. We expect to generate AFFO of between $5.30 and $5.40 per share, all of which will come from real estate given our exit from the non-traded REIT business, implying about 3% growth on real estate AFFO at the midpoint. This is based on expected investment volume of between $1.75 billion and $2.25 billion. As Jason discussed, we currently have good visibility into at least $700 million of that. For now, we are assuming investment volume occurs relatively evenly throughout the year. Dispositions activity for the year is currently assumed to total between $300 million-$400 million, with the majority assumed to occur late in the year, reflecting our anticipated timing for the Marriott operating hotel sales, which I covered earlier. Moving to our capital markets activity and balance sheet positioning. We remain in a very strong capital position with significant dry powder, ample liquidity and moderate use of leverage, which is further supported by our capital raising activity. Towards the end of the fourth quarter, we settled just under 2.6 million shares of our outstanding equity forwards, which will therefore be fully reflected in our first quarter diluted share count. We also issued additional equity forwards through our ATM program, both during the 2022 fourth quarter and in January of this year. In conjunction with the existing equity forwards, we therefore currently have about $560 million of forward equity available to settle. We ended 2022 with $276 million drawn on our $1.8 billion revolving credit facility, which, in conjunction with our undrawn equity forwards, maintains an excellent liquidity position. Totaling just over $2.2 billion, providing ample liquidity to execute on our near-term pipeline on a leverage neutral basis and ensuring we continue to have significant flexibility in when we access capital markets. We currently have $430 million of mortgages due in 2023, a portion of which will be retired as part of our disposition plans and no bonds maturing until 2024. All of which we continue to view as very manageable, especially given the improving debt capital markets and our proven ability to access capital even during turbulent markets, as was the case in 2022. At year-end, our leverage metrics remained within our target ranges. Debt to gross assets was 39.8% at the low end of our target range of mid to low 40s, and net debt to EBITDA was 5.7x relative to our target range of mid to high 5 x. Cash interest expense coverage was 6.3 x, which moderated compared to the 6.7 x for the 3rd quarter, largely reflecting rising interest rates. We continue to provide stockholders with growing well-covered dividend income with a payout ratio of 80.2% for the year and an attractive dividend yield currently around 5.2%. In closing, despite the challenging market backdrop, we produced solid full-year results, primarily reflecting the accretive impact of new investments and our merger with CPA:18, as well as the strength of our rent escalations. As we look ahead, we have a strong near-term pipeline, which we are well positioned to execute on given the strength of our balance sheet. With that, I'll hand the call back to the operator for questions. Thank you. At this time, we will be taking questions. If you would like to ask a question, simply press the star, then the one on your telephone keypad. If you would like to withdraw your question, please press star then two. Once again, that's star 1 to register a question at this time. Our first question today is coming from John Kim of BMO Capital Markets. Please go ahead. Hey, guys, it's Eric on for John. I was just curious if you could kind of walk us through the puts and takes of the AFFO guidance. What's the per share impact from FX and then from interest expense? Thanks. Toni, you wanna take that one? Yep, I've got that one. Thanks, John. Yeah, I think we've highlighted a number of factors on the call. I think just to kind of summarize, you know, we are seeing a fair amount of growth from the investment activity and from the embedded CPI-based increases in our portfolio. We are seeing a number of offsetting factors. On the interest expense, you know, I think that's really the biggest headwind that we're seeing, and that's roughly about 3% growth on the offset. On the FX side, I'd say it's less, less so in terms of what we're projecting for 2023, just given kind of where rates are now and where they settled in over the last part of the year. I would say FX, you know, potentially could have a tailwind for us, as opposed to the way it worked against us in 2022. I definitely would say the largest driver is on the interest expense side. In addition to that, I highlighted some other points which included some leakage that we would expect from vacancy or downtime in certain assets, and then a few smaller items, which are the dividend payments that we're not receiving from Lineage and WALT that we received prior year, as well as some higher G&A and tax expenses. you know, all that really aggregates against the growth that we're seeing gets us to about 3% for the year. All right. Appreciate that. Appreciate the color on cap rates kind of widening out as we move into the first quarter of the year. Can you just kind of walk through what the different cap rates are amongst the sectors and geographies and where's the biggest spreads you're seeing today? Yeah, sure. Yeah. We think that cap rates kind of finally reached, you know, a bit of an equilibrium in the fourth quarter, and that has carried over to this year. Fourth quarter cap rates was about 6.8%, which was 50 basis points higher on average, or higher than the full year average, I should say. You know, I think that's flowing through the transaction markets as well. In terms of, you know, regions, you know, U.S. and Europe cap rates, I would say they're, you know, maybe similar zip codes at this point in time. I think the U.S. has maybe stabilized a little bit more. I think given where the cost to borrow is in Europe, we'd probably wanna see a little bit more cap rate increases to generate the type of spreads that we think we wanna transact at in Europe. You know, across property types, I would say on the low end of the increases is probably in U.S. retail. That has proven to be a little bit stickier, and maybe that makes sense. It's a bit more crowded in terms of competition within net lease, and maybe there's still some, you know, 1031 trades lingering. I think on the high end, it's where we've seen cap rates move would be in the industrial segment in particular, sale-leasebacks. I think when you think about corporates and private equity firms utilizing, say, lease backs, they're really looking at what are their alternative sources of capital, and that'd be mainly either the leverage loan market or the high yield debt markets, and those are still largely dislocated. I think we have some pricing power right now, within that market, and cap rates are reflecting that. All right. Thanks, guys. Appreciate the time. You're welcome. Thank you. Our next question is coming from Greg McGinniss of Scotiabank. Please go ahead. Hey, good morning. Congrats on the anniversary. Thank you. Thank you for the very robust opening remarks. You didn't leave me with many of my questions that I was gonna ask, but I do still have a couple in reserve here. One, Jason, if you could just touch on the types of assets in the pipeline right now, where you're seeing the most success in terms of assets with the more reasonable cap rates from a tenant and property type perspective. Yeah, sure. Just to kind of, you know, go through the kind of the visibility and the deal volume that we have. I mentioned, you know, over $700 million, that's comprised of about $500 million of pipeline that we call investments at advanced stages. The rest of it is either deals that have closed already here to date or these capital projects and other commitments that we, you know, have each year. They're scheduled to complete in 2023. That's probably about $150 million of that $700 million. You know, in terms of, you know, the types of deals in our pipeline, it's more weighted towards the U.S. right now and maybe North America more broadly. That seems to be the source of more actionable deals. As I mentioned earlier, transaction markets in Europe are still a little bit left to room to go to adjust to the sharper rate increases we saw in Europe. A little bit more weighted towards the U.S. and North America. Property type is consistent with what we've been buying in the past. It's, you know, 2022, I think 70% of our deals were industrial, both warehouse and manufacturing and some R&D, and I think the remainder was probably retail. That's true for the pipeline as well. It's gonna be predominantly industrial, R&D, warehouse production, and then we do have some retail both in the U.S. and Europe that we're looking at. I should say the bulk of what we're doing, again, are sale-leasebacks. The larger transactions in this pipeline are private equity backed deals and really in support of M&A activity. There's a little bit of uncertainty on how the timing works, more moving parts when you're closing transactions concurrently with a buyout. Of course, execution plays or execution risk is something that the sellers are much more focused on. I think for that reason, you know, we're a great partner and it's reflected in the pricing we can get from those deals. Okay, thank you very much for the color there. Just a couple quick questions on lease expirations. First, does the 3.9% that's expiring in 2023 include the 1% for Marriott? Recent rent recapture has been fairly strong, especially on the industrial assets. Can we view this as maybe more of a new normal for those warehouse and industrial leases? Brooks, you wanna take that? Sure. The 3.9% does include Marriott. If you back that off, it's about 2.8%. Another, call it 50 basis points, has sort of already been resolved since. That sleeves about 2.3% of ABR expiring in 2023, so quite manageable. With respect to your question on the actual leasing metrics, you know, certainly we've had a good run of results there, and we're quite encouraged by that. You know, that said, I wouldn't extrapolate any specific quarter or even a couple quarters. You know, we really like to look at more of a trailing eight number, and that's in and around 102% recapture. Hard to extrapolate a given quarter. It's very transaction specific. Agreed, there are some tailwinds, especially in our warehouse and industrial assets that have been benefiting us, and we look to keep capturing that. Okay, thank you. Thank you. The next question is coming from Josh Dennerlein of Bank of America. Please go ahead. Hello. This is Dan with Josh Dennerlein. Thanks for having me. My question is, what are your expectations for same store in 2023? Any additional commentary on what's driving you guys would be appreciated. Thank you. Yeah. Toni, do you? On the same- Do you wanna talk about that? Go ahead. Yeah. On the same store side, you know, I could give some comments there. We are expecting to continue to see inflation push through, just given the lag in our leases. We do expect that to tick up to about 4% and remain right around that level for the full year, and that's on the contractual same store side. I didn't catch the second part of the question. Just any type of additional commentary on what's driving the provided guidance. I'm sorry, driving the... The guidance. The guidance you provided. In terms of the growth for the full year? Yes. Yeah. I think I did just mention a little bit of the headwinds that we're experiencing in the upcoming years. You know, the interest expense being the largest factor, as I mentioned. There's really just an aggregation of a number of other smaller items that, you know, I highlighted being tax expense, G&A expense, and some of the dividend that we would have received in 2022 from Lineage and from WALT won't occur next year. Those things are aggregating in addition to some leakage that we're seeing on vacancy and some downside on certain assets downtime. Awesome. Thank you. Thank you. The next question is coming from Spenser Allaway of Green Street. Please go ahead. Yeah, thank you. Just on the Marriott assets, I understand that you're gonna provide, you know, more color as you go along. Just curious if you can just comment at a high level on how the market looks currently for these assets? Sure. Brooks, you wanna take that? Yep. As we noted, the 12 of those assets converted to operating in January. You know, that's a very seamless transition. Marriott continuing to operate those, and they're operating well. Hard to gauge in terms of exact timing and execution, but we think interest is gonna be pretty strong. We were looking to sell nine of those assets, where in our guidance, assuming that closes at year-end. Again, hard to specifically peg down timing. We wouldn't comment on pricing at this point. Three of the assets which we will retain are really excellent development opportunities. One is an industrial opportunity in Newark. Another is a really well-located potential lab opportunity in San Diego. Then the third is in Irvine, California. again, those will operate seamlessly in the meantime, as we pursue those opportunities. but very good, redevelopment sites there. Okay, thanks. Then maybe just more broadly on the transaction market, can you guys just provide some color on how total deal volume that you've sourced thus far in the year in both the U.S. and Europe compares to last year? You mean at this point in the year compared to this point last year? Is that the question, Spenser? Yeah, just trying to get a sense of how the overall, like, market looks. Just maybe not on everything that you're, you know, seriously underwriting, but just in terms of like, total deal volume just out there, being sourced. Yeah, look, I mean, it's as I mentioned earlier, I think that the sale-leaseback market right now is probably as strong as we've ever seen it, and there's a number of factors leading to that. You know, one of which is, you know, private equity firms and how they capitalize their businesses. I think the alternatives are just not as competitive cost-wise, mainly high-yield debt or leveraged loans. I think the second factor, at least in how we compete within the sale-leaseback market, is that mortgage availability really is still not all that strong or the execution is a little bit uncertain. A lot of the traditional real estate private equity buyers that we compete with, I would say they're still largely on the sidelines. I think those two factors are really kind of coming together to not to mention the fact that your debt rates have stabilized a little bit, which has led to maybe a tightening of the bid-ask spread between buyers and sellers for deals. Yeah, I think all of that combined has really set us up well for a transaction market. Compared to this time last year, I mean, look, when we started last year, we were quite bullish. Obviously the sharp interest rate increases in the first quarter, you know, kind of changed the trajectory of kind of the pipeline from last year. You know, where we sit right now, this is as strong as a beginning of the year pipeline as we've had in a long time. You know, there's some chunkier deals in there. As I mentioned earlier, you know, several of those are supporting M&A activity, so the timing, you know, can be a little bit uncertain. You know, we feel good about where we sit right now. You know, so I think it's a good market, and we'll see how the year progresses, of course. It's quite favorable right now. Thank you. You're welcome. Thank you. The next question is coming from Mitch Germain of JMP Securities. Please go ahead. Mitch, your line is live. Please go ahead and make sure your line is not muted on your end. Sorry about that. Sorry, I guess it's only about 5% of your debt that's coming due this year. What's the strategy for that mortgage debt? Yeah, that's right. I think it's about a little over $400 million of mortgages maturing this year. I think, you know, in the context of the size of our balance sheet and really our positioning, we really see that as being pretty manageable. I think we have a lot of optionality. We have, you know, over $1.5 billion of capacity in our revolving credit facility and about $560 million of equity forward sale agreements that, you know, are sitting kind of on the balance sheet waiting to take out. You know, I think we have a lot of options in terms of how we address that. You know, you'll expect to see us in the market on the debt side, given some of the, you know, the size of the pipeline, the deal volume we expect this year. You know, I think we're in a good position with the $430 million being really manageable for us. Great. And Jason, has anything evolved in your thinking on the operating storage portfolio? Yeah, I mean, look, we're still evaluating it. It's, you know, it's a property type that we've that we like. We've owned it for a long time. We have good property managers supporting us in Extra Space and in CubeSmart. I wouldn't say that the thinking has evolved. You know, we're still considering all the options. We can continue to own these. We can convert some or all to net lease. We can also look at selling some of them at attractive prices if we think that's the best way to fund, you know, new transactions. It certainly could be a combination of all the above, but nothing big has changed. I think in the meantime, we like the fundamentals. You know, growth has maybe slowed from the industry's peak of 2022, but, you know, we're still expecting, you know, really strong same-store growth for this portfolio this year. I think, you know, based on our property-level budgets, we're probably in the mid-to-high single digits for this portfolio. I think that we can, you know, be patient and continue to ride some of the increases. You know, overall, it's a nice complement to our net lease portfolio. I think we'll just be more opportunistic on what path we choose here. Thank you. You're welcome. Thank you. The next question is coming from Anthony Paolone of J.P. Morgan. Please go ahead. Thank you. First one is just on Lineage. I think you marked it up, but you talked about not getting, like a dividend this year. Just wondering if you could reconcile that and what's happening there. Yeah. I think we received a dividend from Lineage in the January of 2022, which we believe was reflective of kind of their taxable income positioning. You know, we didn't get that same dividend in January of this year, but I think, you know, as you highlighted, it's really the value of the investment is what we're looking at, and it continues to appreciate. We've marked it up with an offering that they did this year, and we're at about $400 million. We really think they're performing continually well, but the cash flow that they're generating off of the investment is probably somewhat variable from year to year. Okay. Understand. Then, Toni addressed the gap between the same store sort of bumps year-over-year versus the comprehensive same store in 2022. As we're thinking about 2023, though, that 4% that you outlined, do you think that's the number that converts down to AFFO or like, as the comprehensive same store, or do you think there's some drags to that? You know, I think you're right. The, the 2022 and even 2021, there was somewhat of a, you know, kind of a lot of moving parts in comprehensive with rental recoveries and that sort of thing. It did move from period to period. I would say pre-pandemic and, you know, kind of historically for us, we're seeing usually about a 100 basis point drag or so from the top line kind of contractual same store. I think, you know, that's a reasonable expectation for us into the future, is that, you know, there will always be kind of some offsets that run through there. That 100 and basis point drag against the top line is probably a good expectation for us. I think, I guess, just to make sure I understand this, if we're thinking about a build, you start with the four, maybe there's a 100 basis points of drag, and then we make whatever FX assumptions we want, I guess, would be on top of that to kind of think through what really flows down. That sounds right. Yep. Then just last one just to clarify. I think you said $100 million in operating property NOI for 2023. I didn't catch if you said this. Does Does that include 11 months of the Marriott properties, or does that not include the Marriott stuff? That does include the Marriotts. They're embedded in that $100 million. Okay. Got it. Thank you. Thank you. Our next question is coming from Brad Heffern of RBC Capital Markets. Please go ahead. Yeah. Hey, everybody. Jason, you talked about the sale-leaseback market being really robust. I guess I'm curious if you're seeing any better lease terms in addition to the higher volumes and cap rates, things like higher escalators, longer duration, better lease protections, anything like that? Yeah. I would say all the above. I mean, that's one of the benefits of sale-leasebacks is we, you know, write our own leases, negotiate our own leases, I should say, and, you know, to some extent, we can dictate the terms that are important to us. Lease term has been one we focused on for 2022. Our weighted average lease term, I think, was 19.9 years for new deals, which is in line with where we've been. I would expect that to be in line, or 2023 would be in line with that as well. You know, we do focus on that. I think, you know, in addition to cap rates, you know, we still are seeing some upward pressures on the type of bumps that we get. I think we're getting some pushback on inflation-linked increases, as you can imagine. Our caps that we put in place from time to time, and that's maybe more the conversation now, those are higher than where they've been historically. Some of that has flowed through to the fixed rate increases as well. I think historically, we've probably been around, you know, 2% fixed increases on average, and we're gonna be a little bit above that, is my expectation this year. I mean, we're above that for the leases that had fixed increases for 2022. look, I think that we have, you know, maybe a little bit more negotiating leverage in some of these deals, given that there's fewer alternatives for firms to raise capital. I think sale-leasebacks are a really good opportunity right now. There's fewer competition that targets sale-leasebacks, and there's even fewer that have and maybe none that have a history as long as ours in terms of execution. I think all those factors lead us to having, you know, incremental, you know, structuring abilities and, you know, we'll kind of measure, you know, what's important to us and what we get. Okay. Thanks for that. Then I was wondering if you could talk through the watch list. Has it expanded or contracted? I guess, is there anything that we need to be keeping an eye on, that maybe isn't obvious from the 18% of ABR that you disclose the tenants for? This is Brooks. Yeah. Credit quality overall is quite good. You know, again, to reiterate about 32% of ABR is investment grade. We're largely dealing with large companies with great access to capital and collecting materially all of our rent. From a watchlist perspective, it's in and around 2.5% of ABR. To put that into context, maybe the COVID peak was just over 4%. You know, credit quality has improved since then. You know, that said, we're certainly watching closely both macroeconomic and industry-specific headwinds. There's not really any trends or themes in the watchlist. It's very anecdotal and tenant-specific. Certainly at this point in the cycle, we wanna pay very, very close attention and we're doing that. That's kind of the status of the watchlist. You know, I wouldn't characterize it as anything different per se in recent quarters. Okay. Thank you. Thank you. The next question is coming from John Massocca of Ladenburg Thalmann. Please go ahead. Good morning. Maybe going back to the acquisition side of things and sale-leasebacks in particular, are you seeing a divergence in terms of pricing between investment grade rated tenants and kind of non-investment grade rated tenants, I know the latter is kind of where you tend to, you know, do deals most often, just kind of has there been a change in terms of pricing expectations for those two different buckets of potential tenants? You know, John, we're not I would say we're not really seeing many investment grade rated sale leasebacks. As you mentioned, that's typically not where we've focused. I think the real opportunity here where I suspect there is a pretty big divergence. The real opportunity here is just below investment grade, where those companies and those credits have much fewer alternatives to access capital. I think, you know, again, not that tuned into where investment grade sale leasebacks are, but I'm guessing that's been much more stable and probably hasn't increased as much. Just like the, you know, the investment grade bond markets haven't moved as much as the high yield markets. I think that's reflective in the pricing on sale leasebacks as well. In terms of your own balance sheet, how are you thinking about leverage today? It sounded like guidance kind of implies relatively flat leverage versus where you are at 4Q. Well, maybe given where equity pricing is, especially relative to debt pricing, does it make sense, you know, longer term to kind of bring leverage down just because, you know, the pricing differential is pretty attractive, particularly versus historically? Yeah, look, we're... I think. Okay. Sorry. Go ahead, Toni. Sorry. Go ahead, Toni. Sorry. Go ahead, Toni. Go ahead, Toni. Go ahead, Toni. You jump in. Yeah. I think, you know, we are still looking at kind of our target leverage levels, you know, in that mid to high five time range. I think, you know, we have leaned into our equity. Our equity pricing has been pretty favorable as a source of our cost of capital. You know, I don't think we view kind of the future environment in terms of where we can issue debt as keeping us out of the market long term. You know, I think we'll continue to kind of stay in the range that we're in right now. Somewhat leverage neutral to kind of what you're seeing there. I agree, we are definitely leaning into the equity given how well-priced it's been. I guess no philosophical change in that, you know, maybe, you know, mid-4 to 5 is the new kind of target range just because of an opportunity set here in the current environment. No, I would say we continue to kind of look at the existing target range. I, you know, look, I think our credit profile was just reaffirmed with the upgrades we got from the rating agencies. I think we're comfortable, you know, with the target ranges that we have in place now. Okay. That's it for me. Thank you very much. Great. Thanks, John. Once again, ladies and gentlemen, that is star one if you would like to register a question at this time. The next question is coming from Greg McGinniss of Scotiabank. Please go ahead. Hey, sorry, just one quick follow-up. Toni, I appreciate the color on the expected income from the operating properties. I'm just curious on looking at the kind of normalized pro rata cash NOI for self-storage and other operating properties. Saw that dropped this quarter from last quarter. Just wondering what's going on there. There's really nothing, you know, of note kind of going from quarter-to-quarter there. I think, you know, we continue to see the storage perform well. I highlighted sort of what our expectations are for the upcoming year and, you know, we think that's mid-to-high single-digit growth on storage. You know, there's probably some seasonality in there. We have one hotel portfolio, or one hotel asset rather in the portfolio that runs through that line. Annualizing that is probably ticking that number down a bit, but I would say just to look more to what we're projecting on a full year basis, which is for all of that portfolio, $100 million. Okay, thanks. That's it for me. Thank you. At this time, I'd like to turn the floor back over to Mr. Sands for closing comments. Thanks, Donna. Thanks everybody on the line for your interest in W. P. Carey. If you have additional questions, please call investor relations directly on 212-492-1110. That concludes today's call. You may now disconnect.