Diversified REIT W. P. Carey has been busy revamping its portfolio and dividend strategy, making it an attractive option for income-seeking investors. After recognizing the challenges facing the office sector, the company made the bold decision to exit this space and redirect its focus towards more promising areas.
As a result, W. P. Carey spun off a portion of its office portfolio to shareholders and sold the remaining properties, raising over $1 billion in cash. This strategic move allowed the REIT to reset its dividend, reducing its payout ratio from 80% to a more conservative 70-75% range. This shift enables the company to retain more cash for future investments.
With its balance sheet significantly strengthened, W. P. Carey has been actively investing in new properties with higher long-term rent growth potential, such as warehouses and industrial buildings. The REIT has already invested $641 million in new acquisitions, including a 19-property industrial and warehouse portfolio across the US and Canada.
As the company’s portfolio and cash flow continue to grow, W. P. Carey has begun to rebuild its dividend, raising its payment three times this year by nearly 2%. With its investment volume expected to accelerate, reaching $1.25-1.75 billion in 2024, the REIT’s dividend is poised to grow at an even faster rate.
W. P. Carey’s 5.5% yield and steadily rising dividend make it an appealing choice for investors seeking a reliable stream of passive income. As the company continues to execute its strategic plan, its high-yielding payout is likely to continue growing, providing a attractive opportunity for income-focused investors.
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