Hello, and welcome to W. P. Carey's fourth quarter and full year 2023 earnings conference call. My name is Daryl, 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 to today's program over to Peter Sand, Head of Investor Relations. Mr. Sand, please go ahead. Good morning, everyone, and thank you for joining us this morning for our 2023 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 our Chief Executive Officer, Jason Fox. Thank you, Peter, and good morning, everyone. Today, I'll briefly recap 2023, talk about how we're positioned for the year ahead, with significant capital ready to deploy and an improving transaction market outlook. Toni Sanzone, our CFO, will focus on some of the details of our 2023 financial results and our 2024 guidance, both of which reflect the impacts of successfully executing on the office exit strategy we announced in September. Toni will also cover certain tenant-specific impacts we expect in 2024, which our guidance also reflects. John Park, our President, and Brooks Gordon, our Head of Asset Management, are also on the call to take questions. Starting with external growth. The 2023 transaction backdrop was largely a continuation of the one that existed in 2022, with cap rates lagging rising interest rates. Preserving investment spreads without resorting to investing in riskier assets, therefore remained a high priority for us. In the U.S., interest rates continued to move higher for most of the year, reaching a peak in October. The lease backs, however, remained an attractive source of capital for companies as high yield debt and other financing alternatives became very expensive. In April, we completed our single largest ever investment with the Apotex sale-leaseback on a portfolio of four pharmaceutical R&D and advanced manufacturing campuses. That was a new industrial subsector for us, but shares many of the key characteristics with other industrial assets we invest in, including critical operating properties backed by a tenant business with reliable cash flows on a long-term lease with attractive rent bumps. We've also expanded our focus to include more U.S. retail and now have investment officers dedicated to that sector. As a result, we completed a handful of retail transactions in 2023 across various subsectors and are exploring others, both in the U.S. and Europe, focusing on those we believe we can achieve terms and structures consistent with those we get on our other property types. In Europe, a steep rise in interest rates resulted in wide bid-ask spreads and a pronounced slowdown in transaction activity throughout 2023. We continued to find pockets of opportunity, however, and in November, completed a $157 million cross-border sale-leaseback of 11 manufacturing facilities in Italy, Spain, and Germany, with Fedrigoni, which is a global manufacturer of specialty papers for premium packaging and labeling. Investment volume for the fourth quarter totaled $346 million at a weighted average cap rate of 7.7%, which brought overall investment volume for 2023 to $1.3 billion at a weighted average cap rate of 7.6%. Single tenant industrial and warehouse assets represented about three-quarters of our full-year investment volume, and given the execution of our exit from office, now makes up a larger majority of our portfolio. Industrial and warehouse are very broad categories, however, comprised of many subsectors, providing both a wide investment opportunity set and added diversification. Sale-leasebacks, which have the advantage of enabling us to structure the lease terms, represented close to 90% of our 2023 investment volume. Going forward, we will continue to focus on originating investments through sale-leasebacks and build-to-suits in order to achieve the strong rent escalations, long lease terms, and robust protections we're able to get through lease structuring. Looking ahead, I'm pleased to say that in recent months, the outlook for the transaction environment has improved, both in the U.S. and Europe. Today, we're able to transact at cap rates well into the 7s, providing an attractive spread to our cost of capital. We're also seeing some pent-up supply from sellers and expect a pickup in corporate M&A, which often creates sale-leaseback opportunities. If market conditions play out as we expect, we believe we're very well positioned for higher investment volume in 2024. While it's still early, five weeks into the year, we've completed investments totaling $177 million and have over $100 million of capital investments and commitments scheduled to complete in 2024, in addition to an acquisition pipeline that continues to build. One aspect of our positioning for 2024 that I want to highlight is our substantial liquidity position. At the end of 2023, we had over $600 million of cash on our balance sheet. Since then, we've paid down some debt and funded some acquisitions with our cash, including paying down our credit facility with proceeds from the Spanish government disposition.... After the sale of the U-Haul portfolio for approximately $465 million, our cash balance will be close to $1 billion. With the additional cash we expect to generate from remaining office asset sales, plus free cash flow after paying our dividend, we could have close to $1.5 billion of cash to invest in 2024. We will also continue to have our $2 billion revolver to fund deals or address debt maturities in the short term. As we've discussed in the past, we have some unique additional internal sources of capital over the longer term, including our equity stake in Lineage Logistics, which we currently have marked at approximately $400 million. We view our cash position and internal sources of liquidity as meaningful differentiating factors compared to many other net lease REITs. We don't need to raise new capital to fund investments. We have a lot of flexibility on how we approach any new capital markets issuance this year. Our equity multiple has improved since we announced our office exit and benefited from the broader rally in REIT equities since the Fed signaled the end of its tightening cycle, notwithstanding some weaker performance in recent weeks. The liquidity of our stock has also benefited from our recent addition to the S&P 400 Index. So far in 2024, bond markets have generally been supportive of new REIT issuance, with rates coming off their 2023 highs and spreads compressing. Despite the substantial capital we've built up, we remain mindful of our overall cost of capital in achieving appropriate returns on our investments. Deals with going-in cap rates in the 7s and rent bumps over long lease terms that take their unlevered returns into the 8s and 9s provide an attractive spread, even if funded with newly issued capital. They are therefore also deals we're very comfortable executing with the liquidity we have on hand, so we continue to have a strong bias to deploy cash into new investments. Lastly, I want to briefly discuss the progress we've made with the office exit strategy we announced in September, laying out an ambitious plan to proactively exit our office exposure over an accelerated time frame. We're successfully and efficiently executing on that plan. I could not be prouder of our employees and the dedication and hard work they've shown, both in the lead up to the announcement and in the time since. In addition to the 59 properties that were spun off into NLOP in November, to date, we've sold 79 of the 87 properties under the office sale program, the largest component of which was the State of Andalusia portfolio sale we completed in January, all of which has reduced our exposure to office to just 2.7% of ABR. We're actively working on transactions to sell the remaining properties and expect to reduce our office exposure to a negligible amount over the coming months. Exiting office over a short space of time has reset the baseline from which we will grow AFFO without the headwinds associated with owning office assets. Since our announcement, office fundamentals have remained under pressure, while our multiple has expanded, reinforcing our conviction in the strategy and benefiting our cost of equity. Making us more competitive on deals, we're able to achieve wider investment spreads, thereby enhancing our ability to generate AFFO growth. With that, I'll pass the call over to Toni. Thank you, Jason, and good morning, everyone. This morning we reported AFFO per diluted share of $1.19 for the 2023 fourth quarter and $5.18 for the full year, which were 7.8% and 2.1% lower versus the prior year periods, respectively, driven by our exit from office assets, including the spin-off of NLOP in early November. During the fourth quarter, we sold 17 properties for gross proceeds of $266 million, including the sale of 7 properties for $132 million under our office sale program, bringing total dispositions for the year to $462 million. Our fourth quarter disposition activity also included the sale of 5 Marriott Hotel operating properties for $84 million. We've now sold eight of the 12 Marriott hotels that converted from net lease to operating properties in January of 2023, and we expect to sell one additional Marriott hotel this year. The remaining three will be held for redevelopment over the next few years, but will continue as operating properties throughout 2024. In January of this year, I'm pleased to say we completed the sale of our largest office asset, State of Andalusia portfolio, for approximately $360 million. This, along with the sale of another office asset in January, brings gross proceeds under the office sales program in 2024 to $388 million, and the total to date to $608 million. Looking ahead to 2024, our guidance assumes office sales totaling between $550 million and $600 million, including the $388 million already completed, with the remaining sales under the program weighted to the first half of the year. Our disposition guidance also includes the sale of the U-Haul net lease self-storage portfolio through the exercise of its purchase option for approximately $465 million. We expect to receive the proceeds in tranches during the first quarter and have collected the full first quarter of rent on the portfolio, totaling $9.7 million. Ordinary course dispositions in 2024 are expected to total between $150 million and $350 million, which includes the Marriott operating hotel I mentioned earlier. During 2023, our net lease portfolio continued to benefit from the high proportion of rents generated from leases, with increases tied to inflation, even as inflation remained well below its 2022 peak, both in the U.S. and Europe. This is reflected in the 4.1% year-over-year contractual same-store rent growth we reported for the fourth quarter. Based on current inflation forecasts, we expect our contractual same-store rent growth to be close to 3% for the 2024 first quarter and moderate to an average in the mid- to high-2s for the full year. Comprehensive same-store rent growth was 2.3% year-over-year for the fourth quarter, driven lower by the lease expiration on a large warehouse property, which previously generated ABR of $6.2 million. This vacancy also reduced our net lease portfolio occupancy to 98.1% at year-end as we work to retenant the property over the near term. We're currently in active negotiations to re-lease the property at or potentially slightly above the prior in-place rent, although our guidance assumes downtime on the property for most of 2024. While our historical experience with rent loss has been relatively negligible, our outlook for 2024 reflects our expectations on two specific assets, which we're closely monitoring. First, we are proactively working with one of our top 10 tenants, Hellweg, a do-it-yourself retailer in Europe, to restructure and extend its leases as it works to improve its financial position. Although this is a developing situation, our guidance currently assumes a rent abatement on this portfolio for the first quarter, totaling $7.5 million, and a reduction in annual rent going forward from approximately $30 million of ABR to an estimated $26 million. Second, the tenant of four cold storage and fruit packing facilities we own in Central Valley, California, which produces $5.2 million of ABR, has been operating in bankruptcy. While the tenant is current on rent through the end of February, we expect our lease to be rejected. Our guidance therefore assumes no additional rents from this tenant in 2024 as we work through a resolution and carry the properties vacant. In aggregate, our guidance assumes these two tenant situations have an estimated $0.07 impact on our 2024 AFFO through a combination of lost rent and carrying costs, partly offset by lower income taxes. Incremental to this, our guidance includes a normal course rent contingency of around 70 basis points of ABR. Other lease-related income for the 2023 fourth quarter was $2.6 million, bringing the full year total to $23.3 million, slightly below our expectations, as certain lease-related negotiations were pushed into 2024. For the 2024 full year, we are currently expecting this line item to total in the low- to mid-$20 million range, with visibility into almost half of that based on negotiations currently in process. Our operating property portfolio currently comprises 89 self-storage properties, five hotels, and two student housing properties, which are expected to generate between $85 million-$90 million of NOI in 2024, with approximately 80% coming from self-storage. Our 2024 guidance assumes same-store NOI from our operating self-storage portfolio is relatively flat to the prior year. Asset management fees and reimbursements totaled $2.1 million for the fourth quarter, primarily reflecting a partial period as the external manager of NLOP. For 2024, we expect our administrative reimbursement from NLOP to total $4 million, which is fixed over time, while our asset management fees are expected to total between $5 million-$7 million, declining over the course of the year with asset sales. As a reminder, both of these items have no impact on our G&A expense. Non-operating income totaled $7.4 million for the fourth quarter, driven primarily by $4.6 million of interest income on cash and realized gains on currency hedges of $2.9 million. For the full year, non-operating income totaled $21.4 million, comprised of $14.5 million in realized gains from currency hedges and $6.9 million of interest income. Our 2024 guidance assumes non-operating income totaling between $32 million and $36 million, including interest income on cash totaling between $19 million and $23 million, which is expected to be higher early in the year and decline as we invest excess cash. It also assumes that currency rates remain at or around their current levels, which would result in expected gains from currency hedges of approximately $10 million. Our 2024 guidance also includes a $3 million dividend from Lineage Logistics, which we received in January of this year and will flow through non-operating income in the first quarter. Non-reimbursed property expenses for the fourth quarter were $13.3 million, bringing the full year total to $44.5 million, which included a property tax accrual reversal of approximately $6 million early in 2023. For 2024, we expect non-reimbursed property expenses to total between $41 million and $45 million, reflecting a reduction in expenses associated with the office assets we have exited, partly offset by an expected increase in carrying costs related to the vacancies, which I discussed earlier. G&A expense was $21.5 million for the fourth quarter, bringing the full year total to $96 million. For 2024, we expect G&A to fall between $101 million and $103 million, reflecting inflationary increases. G&A expense typically trends higher in the first quarter, given the timing of certain payroll-related items. Tax expense on a cash or AFFO basis, which primarily reflects foreign taxes on our European assets, totaled $11.2 million for the fourth quarter and $44.3 million for 2023. For 2024, we are anticipating these taxes total between $38 million and $42 million in our guidance. Turning now to our 2024 guidance. We expect to generate full year AFFO per share between $4.65 and $4.75, with the decline versus 2023, driven primarily by the full year impact of the NLOP spin-off and the completion of the office sale program. Guidance assumes full year investment volume of between $1.5 billion and $2 billion and reflects the timing of investments and dispositions, with investment volume expected to be more back-end weighted, while dispositions are more front-end weighted, driven primarily by the State of Andalusia office portfolio sale and the U-Haul purchase option. Moving to our capital markets activity and balance sheet. We settled all outstanding equity forwards during the fourth quarter, issuing 4.7 million shares for net proceeds of $384 million shortly before the NLOP spin-off. In December, we completed the recast of our unsecured credit facility, pushing out the maturity on a significant portion of debt maturing over the next few years. We upsized our existing multicurrency revolver from $1.8 billion to $2 billion and pushed its term out four years to February of 2029. As part of the recast, we also refinanced a Euro term loan and a pound sterling term loan, extending their maturities three years to February 2028, with the option to extend for a further year, subject to certain conditions. The extension and upsizing of our credit facility demonstrates the continued strength and flexibility of our balance sheet, as well as the breadth of our valued banking relationships with 16 lenders participating. It also enhances our liquidity, further supporting accretive external growth going forward. Turning now to the strength of our liquidity position. During the fourth quarter, a significant amount of capital came back to us, including the distribution we received as part of the spin-off of NLOP and from the settlement of all outstanding equity forwards. We ended 2023 with total liquidity of $2.2 billion, including $634 million of cash. We expect our liquidity position to further increase during the first quarter, driven primarily by proceeds from the office sale program and the U-Haul disposition. As a result, we will remain exceptionally well positioned to both fund our acquisitions and manage our debt maturities in 2024, which, as Jason noted, gives us plenty of flexibility and allows us to be very opportunistic when we choose to access the capital markets. At year-end, our leverage metrics remained well within our target ranges, with debt to growth assets at 41.6%, which is at the low end of our target range of mid- to low-40s. Net debt to EBITDA was 5.6x relative to our target range of mid- to high-5x, although we expect it to be in the low-5x during the first half of 2024, as disposition proceeds are redeployed into new investments before returning to our targeted range in the second half. Lastly, regarding our dividend, during the fourth quarter, we reset our dividend about 20% lower to $0.86 per share, reflecting the impact of office exit strategy on AFFO and a lower targeted payout ratio. Reducing our target payout ratio to a low- to mid-70% range enables us to retain and accretively reinvest greater internally generated cash flow. Going forward, the intention is to grow our dividend in line with our AFFO, which we anticipate will enhance our dividend growth compared to recent years. In closing, 2024 is a transitional year, primarily reflecting the execution of our office exit strategy and establishing a new baseline from which to grow our AFFO going forward. We believe we're very well positioned to generate AFFO growth over both the near term and long term, supported by an improving investment environment, a strong balance sheet, and an exceptional liquidity position, as well as the embedded rent growth within our portfolio of high quality, primarily warehouse and industrial net lease assets. 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 number one on your telephone keypad. If you would like to withdraw your question, press Star, then number two. One moment, please, while we poll for your questions. Our first questions come from the line of Brad Heffern with RBC. Please proceed with your questions. Yeah, good morning, everyone. Thanks. On the guide, it seems like the offset to the investment volume is moving higher with these two credit issues and the warehouse lease expiration. I guess, first of all, is that correct? And is that the full extent of the offsets? And can you confirm that those issues weren't contemplated in the prior guide? Toni, you want to take that? That is correct. Yep, I've got that. Brad, that is correct. The impact that I highlighted on the call was about $0.07. That was not contemplated in our preliminary guidance. In terms of the offset, I think there were a handful of items. You know, we went out with a fairly wide range, three months ago. You know, things have come into focus since then. I'd say a handful of things aggregating to the delta there is probably better line of sight on re-leasing assumptions and rent recoveries, and then just generally a better outlook on interest base rates since early November. That in combination with the Lineage dividend, which we had not anticipated in our November guidance, really is largely offsetting that, keeping us at about the $4.70 midpoint. Okay, got it. And then I think your recent commentary on the watchlist had been, you know, relatively unconcerned. I guess, did these two credit issues largely come as a recent surprise? And, is there anything else that we need to be, keeping an eye on in addition to those? This is Brooks. So it's really both. So the one of them was on the watch list, and the situation with Hellweg that Toni described hadn't been. That was really a very late in the year development. They now are on our watch list. And as we mentioned, we're proactively addressing that situation. But the other tenant was on the watch list. Okay, but nothing else notable in terms of movement in the watch list? Watch list. No, the big story is really adding Hellweg. You know, outside of that, the watch list actually came down somewhat. So, you know, in total, it's around 4.25%. So that's certainly up, but the real addition there is Hellweg. Outside of that, the net reduction in ABR on watch list. Okay, thank you. Thank you. Our next questions come from the line of John Kim with BMO Capital Markets. Please proceed with your questions. Thank you. So on the Hellweg rent reset, down about $4 million, is there a EBITDA rent coverage metric that you can look at that shows that this new rent is sustainable? The reason why I ask is you had also rent abatement on top of that, so it seems like a further rent cut may be necessary. Yeah. So as I mentioned, we're working in conjunction with their other landlords as well to really put them on a better trajectory. So, you know, very sharp slowdown in their business towards the end of last year. You know, the rent abatement, combined with the ongoing rent reductions across their real estate portfolio, we think puts them in a much better position. We will keep them on our watch list because, you know, we need to see real execution there. From a coverage basis, you know, they're coming off a very slow period, but we would expect this to be kind of in the 1.25 coverage range. You know, that's before they execute on what we think is a robust turnaround plan. But again, we're gonna watch them very closely. But we do think the proactive action that we and other stakeholders are taking puts them in a much better place to operate through this. How do you define your watch list? Is it if the tenant starts paying their rents late, or do you have any other visibility or metrics that you look at that you know provide some clarity on who may be at issue paying rent going forward? Yeah, the watch list is really meant to be a tool for us to monitor tenants that we think could be at risk of default in a 12-18 months timeframe. And so that includes tenants that are operating in bankruptcy, as well as tenants where we see a potential risk of default in the future. You know, I'll note that that methodology has been consistent for a very long period of time, decades. And over that timeframe, you know, a small portion of the tenants on the watch list actually do end up defaulting. It certainly does happen, but it's really a management tool for us to track and monitor that. So it's meant to be forward-looking, and that's really kind of the time frames we have in mind. I'm just wondering with one of the tenant issues, you didn't have that them on your watch list last quarter, so obviously came as a surprise. And, yeah, I mean, the question is, do they send the others that are not on your watch list today, that, that could pop up? Yeah, certainly Hellweg was a rapidly developing situation. Really, that came into play at the very end of last year. You know, it's a company that operates with a higher leverage point and a somewhat smaller overall scale. But they've operated very consistently for 20+ years with that setup. And, you know, a variety of factors really contributed to what we saw as a very quickly evolving situation, and so we really wanted to be proactive, work with their other stakeholders to put them on a better path. So agreed, that wasn't one we had seen a year out, but it's something we're addressing proactively and working through it. Great. Thank you. Thank you. Our next questions come from the line of Anthony Paolone with J.P. Morgan. Please proceed with your questions. Yeah, thanks. So, Tony, on the same store, I guess you gave the contractual expectations that, you know, close to three in the first quarter and then drifting down. But, like, I guess if we incorporate the industrial vacancy, these couple credit items, you know, and then I guess you said another 70 basis points, like, where does that land us from just a, you know, core number for 2024, for, like, on a comprehensive basis? Yeah, I think the expectation, especially with the rent abatement for Hellweg, expected to happen in the first quarter, is that, you know, that would be most negatively impacted our first quarter, and then that would sort of stabilize but still be down over the course of the year, kind of reflecting the various items that I highlighted. So I do think that, from a comprehensive same store standpoint, we are looking at a relatively flat year, on a full year basis. Okay. And then, I mean, for the cold storage facility, for instance, you know, like, what does recovery for an asset like that look like? Like, does it have to get released or just a new agreement with the existing operator? Like, what happens with an asset like that? Yeah. So these are cold storage and fruit packing facilities, really right adjacent to the farmland in the Central Valley. So they remain very critical for addressing operating that farmland. Where we are right now is working through the resolution to find the operators of that farmland. And so that land is being sold, and we're in close contact with the buyer pool on that. You know, I'll note our rents are quite low there. It's around $3.50 per sq ft. So we think these facilities will be very attractive and critical to operating the land. That said, our guidance, as Tony mentioned, includes a vacancy for the remainder of the year in those assets. Okay. And then, maybe for Jason, the $1.5 billion-$2 billion of investment that you're assuming in guidance, can you maybe help us with just your confidence level? You know, you talked about the skew towards sale-leasebacks, which just intuitively seems maybe a bit more idiosyncratic than just, you know, being in the market day-to-day for secondary deals. And so, you know, with that level of volume and just the skew towards, you know, towards the deals that you like, you like to do, like, I don't know, I guess just help us with the confidence level there that you'll get there. Yeah, sure. You know, I mentioned earlier, we've closed about $200 million of deals year to date, maybe a little underneath that. And then we have another $100 million of capital projects and loan commitment fundings that we expect to complete this year. So, you know, a month, five weeks into the year, we have, you know, clear visibility into $300 million. And then the pipeline is building, and I think that 2024 is shaping up to be a pretty interesting environment. I mean, our view is there's a meaningful, you know, pent-up supply of sellers that are out there, both in the U.S., but maybe even more so in Europe, actually, given the spike in rates that we saw there over 2023. You know, that led to persistently wide bid-ask spreads and frozen transaction markets. You know, I think sellers' expectations have adjusted some. And then with interest rates having come down, that's really allowed us to get a little bit more aggressive on pricing, you know, lean in deals where we think we have a lot of interest. And I think that combination should help, you know, open up deal flow. And you mentioned sale-leasebacks, I think it's especially true there. I think that environment is still quite strong. It's a very attractive option for corporates and sponsor-backed companies, in particular, those just below investment grade that have, you know, fewer, cheaper options to fund deals. We think the private bid competition has remained thinned out. The CMBS markets are still not quite back. They remain constrained and unreliable. So I think that's going to help from a competitive position. And, you know, we're seeing opportunities. You know, but we also mentioned the capital position we're in, which is probably, as strong relative to our peers as, you know, we've ever been in, sitting on as much cash as we are. So, we do like how we're positioned. We do think the environment's interesting. You know, we have the bias to put that capital to work. But of course, we don't have visibility into a full year at this point. A lot of things have to come together. But we feel good about that guidance range at this point in time. Okay. Thank you. Thank you. Our next question has come from the line of Smedes Rose with Citi. Please proceed with your questions. Hi, thank you. I just wanted to ask you a little bit about the final exit from the office space. It looks like the timeline was extended a little bit from kind of early 2024 to the first half of 2024. Is there anything that's delaying that, or you just have a little more or maybe less visibility on that sale? And is that supporting some of the, I guess, your unchanged midpoint earnings outlook for the year by owning them a little longer? Brooks, you want to take the first half of that, and maybe Tony can take the second half? Sure. Yeah, as you mentioned, you know, we still continue to target the remaining office sales for the first half. You know, I'll note about 80% of our overall office sale program is either closed or under binding contract. You know, another 10%-12% of that is under contract and diligence, and then the remainder is in progress. You know, from a timing perspective, it's really comes down to diligence can take some time on these. I'll note in a few jurisdictions in Europe, there's also statutory preemption periods that need to pass before the local jurisdiction approves the sale. So that's a little bit of it. But we're making very good progress, and the real heavy lift is complete. And so, you know, we're optimistic on our, on our prospects to complete this imminently, and working actively through it. In terms of the guidance, I'd say that the disposition timing really didn't have a material impact. I think if anything, it was maybe about $0.01 from our initial expectations. Okay. And then I just wanted to turn back just to the pipeline a little bit. Obviously, you increased at the midpoint for the full year. But do you, could you sort of quantify what you see as sort of your near-term pipeline? I think in the third quarter, you talked about maybe $400 million of sort of near-term visibility. Can you just speak to what you're seeing now and, and maybe just some cap rate commentary in the near term? Yeah, sure. I mean, it's a little difficult right now to quantify the near-term pipeline. It's certainly building. It does include several large deals, but those are at, you know, I'd call it very early stages, so it's kind of difficult to translate that into a number. But, you know, we are off to a good start with the deals we've closed. And, you know, we do like kind of the market backdrop for us right now, as I explained a second ago, with sale leasebacks and, you know, a lot of seller supply out there that we think is going to come to market. So yes, we feel pretty positive right now. I think cap rates, you know, the cap rates, at least in the U.S., we think have been stabilizing over the last quarter or so. Interest rates came off the highs from October. You know, the ten-year treasury has been bouncing around 4 and the low 4s. So, you know, bid-ask spreads have tightened. We think that translates into some more market activity. Last year, we were at 7.7% for the fourth quarter, I think the full year was 7.6%. So we've seen a little bit of an uptick. I think right now we're targeting, you know, deals in the 7s. That works for us from a cost of capital standpoint, certainly we consider the liquidity that we have. So yeah. So I think Europe is maybe a little bit more dynamic. I mentioned that, you know, there's been some steeper increases in the debt markets there over the past 12-18 months, and a reversal of that more recently. I think, at this point, we can probably borrow 100-150 basis points inside of where we can borrow in US dollars, which, you know, you go back a quarter or two, and that was at par. So we've certainly seen some tightening of rates in Europe, which, you know, allows us to get a little bit more aggressive on cap rates. And with seller expectations adjusting, we think that's gonna help bridge that gap and loosen up that market some. You know, as we put numbers on it, you know, maybe Europe would be a little bit inside of where we're targeting in the U.S., but it certainly varies by country. You know, Germany, for instance, is probably, you know, on the lower end of a range, and maybe a country like Italy, you know, we can get a little bit more yield, you know, even though we're working with big kind of multinational companies in those markets. Okay, thank you. Welcome. Thank you. Our next question comes from the line of Mitch Germain with JMP Securities. Please proceed with your questions. Good morning. Jason, you mentioned some additions to or more emphasis on retail, maybe some additions to the team. Anything that you can share? Yeah, I mean, look, we've been, you know, we've been diversified for a long time. I think we always explore, you know, new growth verticals, and you know, we're focused on growing our opportunities. That retail has always been a big part of the U.S. net lease market. Europe, I think it's been more consistently something that we've been active in. In the U.S., I would say it's been more opportunistic when you think about some of the deals we've done in Las Vegas and in other areas. So yeah. So we've hired, over the last, you know, year or so, several dedicated investment officers. They have lots of experience acquiring retail net lease, and really deep relationships with tenants in the brokerage community. So, you know, given our scale, our reputation, we think we can take some market share. The market timing seems good. There's fewer competitors as a result of some of the consolidation that we've seen. And some of the existing players are starting to reach exposure limits to certain segments and even specific tenants. So I think that, you know, we've heard from conversations with brokers and tenants that, you know, we're a welcome participant, you know, help diversify their capital partners, and so we think it's a good time to ramp up. And, you know, we're optimistic that's gonna be a, you know, a contributor going forward to our deal volume. Got you. Thanks for that. You mentioned Hellweg. I believe you had suggested they ran a little bit high on leverage, and I'm curious if there was any other tenants in your portfolio that have either, A, a similar business model, or B, a similar balance sheet structure. Yeah, on the HELLWEG situation, you know, that's a very tenant-specific situation, and really was caused by a few combined factors, one of which was the pull forward in demand through COVID for their business, combined with balance sheet, and inventory issues. So, you know, in my view, that's really a tenant-specific situation. In the broader portfolio, it's a huge portfolio and broadly diversified. There's tenants of every sort. But we think our watch list is really where we see the potential for default risk. And so hard to comment on any specific tenants there, but it's really a broad range of business models, balance sheets and regions and industries. Great. Appreciate that. Thanks for taking my questions. Thank you. Our next question comes from the line of Greg McGinnis with Scotiabank. Please proceed with your questions. Hey, this is Greg, Scotia. Just regarding that large industrial lease that ended up falling out of guidance, was that an active negotiation, and the tenant decided to move elsewhere? Or were they consolidating? Can you just walk us through kind of the lease negotiation process regarding typical timing, and how close to the end of lease term tenants are typically resigning? Yeah, this one was a very specific situation where they just needed to downsize. It was too big a building for them, so there wasn't a renewal negotiation. We do feel very good about that situation. It's a, it's an excellent building, in the Chicago market, and as Tony mentioned, we're actively, in negotiations there to, to re-lease that. So, we think that would be a good outcome. In terms of more generally, we typically are pursuing lease negotiations with tenants anywhere from two to even five years before lease expiration, depending on the situation. And so it really runs the gamut. But this was a, a unique situation where great building, served them well, but it was just, it, they needed a different size. Okay, so were you just expecting to have a different tenant moving in there earlier than you are getting one, which is why it had a negative impact on guidance? If you already knew they were moving out? Well, no, I would say- Tony, do you want to clarify that? Yeah. Yeah, that was not one of the changes that was baked into our initial guidance range. Oh, okay. It was really the other kind of credit issues that were not baked in, so that one was contemplated. ... Okay. Okay, thank you. And sorry, just to clarify for myself on Hellweg. So there's a-- you're providing a free month of rent at the old rate, and then renegotiating to potentially $26 million a year going forward? So, to clarify there, we're. It's a one quarter rent abatement, so for Q1, and an ongoing reduction as you described. We are also extending that lease to 20 years. And, you know, I'll note that that's a similar structure that the other stakeholders are doing as well, so other landlords other than us. And so that really, in our view, shores up their financial position substantially, and really puts them on a better footing to pursue a robust turnaround plan. So, that's really the proactive approach there, to put them in position to execute. What was the catalyst to doing this deal and realizing that, hey, their financial position is maybe not as good as we thought? Was that them reaching out to you? No, we get financial disclosure from all of our tenants. And, you know, when we saw late last year their second half had deteriorated quite quickly, that's when we really took that proactive approach. And, you know, again, I think that was a combination of factors that aligned. And again, that's really a demand pull forward, which- ... which then dropped off quite quickly after COVID. You know, a broader slowdown in potential consumer spending and then an inventory mismatch. And so what we saw there was, you know, a risk that they could have a constrained liquidity position in 2024 and, you know, when they need to be buying inventory and really being aggressive We wanted to manage that situation, as did their other landlords and lenders, and working with the company itself. All stakeholders have come to the table and put the company in a better place. You know, from a status perspective, we're actively working on it. The deal is largely agreed, and we're in kind of documentation mode. ... and so we expect we'll get that completed over the coming month or so. Okay, thanks. And last one from me. I saw you did a deal with Morrisons Grocery Store in the UK. Curious if that's kind of opening the door for you to be doing more business with them, because we saw that they're doing other sale-leasebacks. What's your comfort level with the financials there? There's just been some news that, you know, not quite operating to the level they once were. And then if you could just, you know, if you're able to disclose your level of exposure to private equity-backed tenants as well. Yeah. So the deal with Morrisons, that was a relatively small deal. I'd kind of look at that more as a one-off opportunity. It was pretty opportunistic in nature, and we purchased it from a fund that had redemption pressures and had some liquidity needs. So, you know, we think it was a good opportunity to buy into what we view as a very good location, solid unit level economics, and we think that helps mitigate any, you know, I would say, the higher leverage that they're operating at. You know, could there be future deals there? Potentially. I don't think there's anything we're working on right now. It was not a sale-leaseback, so I wouldn't say there's a direct relationship there that could lead, you know, imminently to any new deals. But we've been active in grocery in Europe for quite some time, and I wouldn't necessarily rule it out. Okay, thank you. Yep, you're welcome. Thank you. Our next question is coming from the line of Spenser Allaway with Green Street. Please proceed with your questions. Thank you. Maybe just following up on the theme of pent-up seller demand you cited in both the U.S. and in Europe, can you just elaborate on whether there are any trends, either by property type or tenant industry? Yeah, I mean, I would say it's more of a broader theme and probably correlates a lot with, you know, sale-leasebacks, you know, in terms of being a source of relatively cheap capital compared to, you know, many of the other options. You know, we talked about wanting to ramp up retail, so, you know, we're hoping that we're seeing more opportunities there. I think the theme is probably most relevant to industrial transactions that tend to correlate maybe most with sale-leasebacks. So, you know, but I don't think there's any broader themes than that right now. Okay. And then lastly, on the office front, and thank you for the commentary thus far, but has anything changed in terms of the conversations you're having with the ongoing asset sales in terms of buyer expectations since you initiated the process a few months ago? No, I'd, I'd say, you know, over this period of time, our expectations have remained very firmly in place. You know, timing has moved around a little bit, on the final piece of this. But again, that, I think that's to be expected to a point. Pricing is held in about where we thought. And so, you know, we're confident we can get that done, and making good progress on the balance. And as I said, you know, the large majority of that is already closed. That's it for me. Thanks, guys. Thank you. Our next question comes from the line of R.J. Milligan with Raymond James. Please proceed with your questions. Yeah, good morning. Just a couple follow-ups. Tony, I think you mentioned in the original guidance, what was contemplated for credit loss for 2024? And how much of that has been used up, just given the known credit issues? ... Yeah, I mentioned in my remarks that, you know, we're starting the year with an estimate of about 70 basis points of ABR for overall rent-related contingency. That did not, as I mentioned, that's separate from the two tenant issues that I discussed that we quantified as having roughly a $0.07 impact. So we did not have the $0.07 in our initial guidance, but the 70 basis points is more normal course for us, and that would be in the range of what we had assumed back in November. So, does guidance still assume 70 additional basis points or what's- Yes, there's 70 additional basis points outside of the... That's really just kind of where we start the year. I mean, I think there's, you know, tenant disruptions from time to time. We generally are relatively conservative in keeping tenants on a cash basis if they're disputing any kind of rent. So, you know, that's meant to cover all kinds of broad issues over the course of the year. There's nothing really specific eating into that right now, you know, outside, and this is separate from the HELLWEG and the bankruptcy issue that Brooks mentioned. That's helpful. Thanks. And then my second question is, obviously, a lot of questions on the, on the watch list, but I just wanted to go back more towards the lease expirations. And so it looks like there's about $60 million of ABR expiring this year, and I realize some of that is U-Haul. But I'm just curious, you know, as your discussions have gone with some of these expirations, are there any other, material or major non-renewals expected for 2024? Yeah, as you mentioned, U-Haul is by far the biggest piece of our 2024 expirations, and making good progress on a lot of the others. In any given year, we'll have a couple non-renewals here or there. Not sizable ones. I think it's potentially for non-renewals a little under 50 basis points of ABR, and actively working on those. So certainly nothing material or of the size of the warehouse we're working on retenanting right now. Okay. That's it for me. Thanks, guys. Thank you. As a reminder, if you would like to ask a question, please press Star, then one on your telephone keypad. Our next questions come from the line of Joshua Dennerline with Bank of America. Please proceed with your questions. Hi, this is Farrell Granath on behalf of Josh Dennerline. I was wondering if you could walk me through or elaborate on with the dispositions and having, kind of more capital on hand, would you be holding this cash and getting about, like, a 5.5% yield or paying down the 2024 maturities at 3.5? Yeah. Sure. I can give a little color on that. Sorry, go ahead, Jason. Yeah, that's okay. Yeah, so in the short term, if we haven't deployed that capital into new investments, you know, likely result in a little bit of delevering. But to your point, you know, we can hold, you know, a lot of that in cash as well, given the returns that we can generate. I think the expectation is that we'll be at the low end of our target leverage range for probably the first half of 2024, but we're not planning to delever, you know, longer term. You know, we're still kind of targeting in the mid to high fives on a net debt to EBITDA basis. Okay. I just wanted to ask about the 80 basis points decline in occupancy. Is that being driven off of the bankruptcies, or is there other aspects in that? Brooks, do you want to take that? Yeah. Sure. No, no, the biggest driver is that warehouse. And so again, we're actively working on that, but that's really the moving part in the vacancy piece. Okay. Thank you. Thank you. At this time, I'm showing no further questions. I'll now hand the call back over to Mr. Sands. Great. Thanks, everyone, for your interest in W. P. Carey. If you have additional questions, please call investor relations directly on 212-492-1110. And that concludes today's call. You may now disconnect. Thank you. Thank you. 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