Mark DeCesaris - CEO Toni Sanzone - CFO Jason Fox - President Brooks Gordon - Head, Asset Management Peter Sands - Director, Institutional IR.

R.J. Milligan - Robert W. Baird Chris Lucas - Capital One Securities Joshua Dennerlein – Bank of America Merrill Lynch Nick Joseph - Citigroup Todd Stender - Wells Fargo John Massocca - Ladenburg Thalmann.

Hello and welcome to W. P. Carey's Third Quarter 2017 Earnings Conference Call. My name is Diego 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, Director of Institutional Investor Relations. Mr. Sands, please go ahead..

Good morning, everyone, and thank you for joining us today for our 2017 third quarter earnings call. 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 Web site at wpcarey.com where it will be archived for approximately one year. And with that, I will turn the call over to Mark..

Good morning, everyone, and thank you for listening to our third quarter earnings call today. Joining me are Jason Fox, President and incoming CEO; John Park, Head of Strategic Planning and Capital Markets and incoming President; Brooks Gordon, Head of our Global Asset Management; and Toni Sanzone, our Chief Financial Officer.

Today marks a beginning of the next chapter for W. P. Carey; a simpler, more efficient company with a clear strategic focus and the management team with the right mix of age and experience to lead this company well into the future.

Approximately two years ago, the Board of Directors asked me to take on the position of CEO with two clear directives; develop a clear strategic vision and put in place an organization to execute that vision with the right mix of aging experience to bring stability to the management team.

While the timing and steps necessary to develop this plan wasn’t clear, we did know the first step was to understand both investor perception of our business model and what issues were holding back investors from investing in W. P. Carey. As I have previously stated, we met with over 250 equity and fixed income investors during my first 10 months.

We listened and along with the Board of Directors put in place a plan to meet those directives. Today, we are a leaner company having reduced our SG&A run rate by approximately 35%. We have streamlined the senior management team and made our reporting and decision making more efficient.

We have gone through a significant Board refresh, reducing the size of our outside independent directors to nine and bringing on four new directors with CEO-level operational experience, global real estate investment experience, portfolio management experience and we are now at full strength with the addition of our newest director, Margaret Lewis, Chairman of the Federal Reserve Bank of Richmond.

Each of our directors brings relevant experience, fresh ideas and different perspectives. Lastly, we have a clear strategic focus with our exit from the non-traded retail capital space.

With that exit comes a focus of putting all net lease investments directly on our balance sheet where our investors will recognize 100% of the revenue stream generated by new investments. These were all issues raised in our meetings with investors. We listened and executed a plan to address them.

I have been questioned many times in those meetings regarding the stability of the senior management team. Investors have also made it clear they look for management teams who bring long-term stability to the company. I heard you and in some respects your questions led me to the decision I am announcing today.

We are a different company than we were two years ago. Going forward, we will increase our balance sheet and grow earnings through direct net lease investments while continuing to manage our existing funds through to the end of their respective lifecycles. Our focus will be on direct net lease investment.

I am extremely pleased both on a personal and a professional basis in announcing Jason Fox as the next CEO of W. P. Carey.

In Jason, we not only have an individual with tremendous leadership skills, an individual that has been groomed to be a CEO, but also someone who knows net lease inside and out, understands and has significant experience in acquiring and managing a global net lease portfolio.

He has the age, skills and experience and most importantly the commitment to lead this company well into the next decade. He is supported by a management team with an average tenure at W. P. Carey of 17 years.

Individuals like John Park, incoming President with 30 years of experience and a key player in every transformative transaction this company has undertaken.

Gino Sabatini, an 18-year veteran who heads up the global investment team; Brooks Gordon, who has been a leader in the asset management group for 12 years and now heads up global asset management; Toni Sanzone, a Deloitte veteran with an additional 12 years of REIT experience, five of which have been with W. P.

Carey; John Miller, our Chief Investment Officer, with 14 years at W. P. Carey and 40 years of relevant experience mostly at the Equitable; and Susan Hyde, our Chief Administrative Officer, 27 years of experience at the company.

Not since our Founder, Bill Carey, passed away in 2012 have we had a management team with this mix of age, experience and a clear concise strategic vision to lead this company. The Board and I have been working on this succession plan for the past five months and we are unanimous that Jason Fox should lead the company in its next phase.

I am committed to working with Jason and ensuring a seamless transition to his new role as CEO. I want to emphasize, however, that there are some core tenants that we remain dedicated to and have deep conviction in. Principles such as diversification in the net lease portfolio, proactive asset management and investment discipline.

These core tenants are the backbone of a track record we have built over 45 years and the main reason we have been able to deliver uninterrupted dividend growth since going public in 1998 and the total shareholder return of 1,100% over that same time period.

I have always believed in these principles and never lost sight of them as we brought about the necessary change to this organization over the last two years. And I believe that our investors will continue to see long-term value from this philosophy.

Having worked with Jason for many years and closely over the last two, I know he has the same conviction that will continue to ensure that these core principles serve as a basis upon which this company delivers long-term value to its shareholders. I will now turn the call over to our incoming CEO, Jason Fox..

Thank you, Mark, and good morning, everyone. Let me start by publicly recognizing Mark for all that he’s done for W. P. Carey, particularly over the last two years. Without his leadership during a time of particular need, the company would not be in a position of strength that it is today. On a personal level, I want to thank Mark.

He has been a mentor and a good friend and I’m grateful to have worked closely with him. I think it’s important to note that this change is different from the one that was made when Mark took over at the start of 2016.

This is a transition of leadership rather than a shift in strategy and one that’s expected to both be seamless and add stability to our business.

The vision and long-term strategy for the company that have been established during Mark’s tenure as CEO have been our shared vision and strategy, and one that I have been closely involved in developing and implementing. My background from the investments side of the business speaks to the future direction of the company.

Ultimately, our growth will be exclusively driven by our core business of net lease investing for our balance sheet supported by the proactive management of our portfolio.

You’ve often heard us say that we’re focused on one vector, net lease, and I continue to believe that the best way to do that is through a diversified portfolio without reliance on any one market or asset type where we can allocate capital to opportunities offering the best risk-adjusted returns at any given point and time.

And we will remain focused on our core underwriting principles, a constant for over 45 years. We have repositioned our balance sheet and become a more regular issuer in the capital markets which will continue, supported by regular and open dialogue with investors.

I remain committed to an unsecured debt strategy and maintaining our investment grade rating. And as a simpler, more focused business with increasingly stable and recurring revenue, we expect our cost of capital to further improve. I’m excited by the opportunities ahead for W. P.

Carey and the chance to lead the talented group of employees that have helped bring us this far. I look forward to updating you on future calls, but for now let’s move on to business as usual and let’s start with the acquisition environment, which remains challenging.

In the U.S., rents within both the industrial and office sectors are historical highs and cap rates remain at historical lows. Transaction volume in the industrial sector has slowed from its 2015 peak but remains high, the price per square foot often exceeding replacement costs, in many cases, by wide margins.

In office, transaction volume also remains high and the average price per square foot continues to climb, up about 20% over the last 12 months alone. Vacancy rates are low and demand is outpacing supply, resulting in climbing construction deliveries.

On top of that, we believe the current market fundamentals will promote additional development activity ultimately resulting in downward pressure on rents. In Europe, the economic recovery currently underway is expected to continue. Rising inflation is boosting investor appetite for net lease assets with inflation-linked rent escalators.

Year-to-date, deal flow in Europe has been significantly better than last year. However, deals continue to face downward pressure particularly for core assets and like in the U.S., industrial and logistics remain the main sought after asset classes across Europe.

While these market conditions may give us pause on the acquisition front, they are clearly a positive for valuations of existing industrial and warehouse assets in our portfolio which comprise about 44%. Similarly, from a valuation standpoint, 30% of our portfolio in Europe benefits from continued cap rate compression in the region.

While our cost of capital allows us to make accretive acquisitions in this environment, we are staying disciplined in our underwriting and not chasing deals for the sake of short-term earnings growth where we do not have conviction in their long-term risk return characteristics.

So far in 2017, deal flow has picked up and we have reviewed a substantial number of opportunities, both in the U.S. and Europe. However, we continue to see the best opportunities in sale-leasebacks and build-to-suit transactions. We’re also to source deals with more attractive structures and yields.

Given the tight market conditions I described and as prudent allocators of capital, we have been net sellers over the last two years with increased focus on generating attractive opportunities within our portfolio through expansions, renovations and follow-on deals with existing tenants.

Such deal flow is truly proprietary and it enables us to extend lease term, enhance asset criticality and often obtain above market yields with tenants we already know well. And we are currently targeting such opportunities in relation to over $1 billion of existing assets in our portfolio.

Total investment activities for the nine months through the end of the third quarter totaled $64 million and was comprised almost entirely of expansions at a weighted average cap rate of around 8% and a weighted average lease term of 21 years.

Currently, we also have four expansion projects with existing tenants and one build-to-suit project underway that we expect to complete over the next 12 months for a total investment of about $83 million. Moving to dispositions.

During the 2017 third quarter, the company disposed of five properties for total gross proceeds of $60 million bringing total dispositions for the first nine months of this year to $133 million. Turning to our portfolio metrics, starting with leasing activity, which relates to only a very small portion of it.

We entered into two lease extensions with existing tenants during the quarter, recapturing 100% of the expiring rent and adding seven years of incremental weighted average lease term. We also entered into one new lease with an existing tenant with a term of 14.2 years. Our lease expirations continue to be managed well ahead of time.

We currently have nothing remaining for 2017. In 2018, we have five leases expiring representing just 1.2% of total ABR, all of which have either been addressed or are in active negotiations. Similarly, over three quarters of the ABR expiring in 2019 and over half of that expiring in 2020 is already in process. Turning to our same-store metrics.

Year-over-year, our same-store rents were 1.5% higher on a constant currency basis, which is consistent with the first and second quarters of this year and up from 0.9% for the 2016 third quarter.

At quarter end, 99% of our portfolio ABR came from leases with built-in contractual rent escalations, including 69% tied to CPI ensuring that our portfolio remains well positioned for higher levels of inflation which has started to pick up again both in the U.S. and Europe.

Regarding tenant credit, 28% of ABR came from tenants that are either investment grade or wholly-owned subsidiaries of investment grade companies.

In conclusion, at quarter end, our net lease portfolio was comprised of 890 properties covering roughly 86 million square feet leased to 211 tenants with a weighted average lease term of 9.5 years, and occupancy remained high at 99.8%. Our top 10 tenants represented 32% of ABR with a weighted average lease term of 11.1 years.

ABR from top 10 tenants expiring within the next five years represents approximately 2% of total ABR. 68% of ABR came from our properties in North America and 30% from properties in Europe, predominantly located in the developed economies of Northern and Western Europe. And with that, I'll hand the call over to Toni..

Thank you, Jason, and good morning, everyone. I’ll walk through our results and highlights for the third quarter and provide an update on our guidance range. We had a solid quarter generating AFFO per diluted share of $1.37, which is up 2.2% compared to $1.34 for the prior year period.

On a segment basis, our core business of Owned Real Estate generated AFFO of $1.07 per diluted share or about 78% of total AFFO for the third quarter, with the remaining $0.30 or 22% coming from the Investment Management segment. As a reminder, those percentages are based on the revised segment presentation we introduced last quarter.

On a year-over-year basis, the impact of our net dispositions activity over the last 12 months has been moderately offset by rent growth embedded in our own real estate portfolio and a stronger euro.

As you may recall, some of our larger asset dispositions occurred in the back half of 2016 and we see that reflected in the year-over-year comparisons of our lease revenue.

As Jason mentioned, thanks to our rent growth year-over-year was 1.5% on a constant currency basis resulting from rent escalations across our portfolio, including certain of our larger tenants.

For the Investment Management segment, we continue to see the mix of revenue shift towards recurring stable income streams which now contribute far more meaningfully to the segment results than fees that are more one-time in nature.

For the quarter, asset management revenues and earnings from our interest in the managed funds totaled $30.5 million generated from assets under management which totaled 13.2 billion at the end of the quarter.

Structuring revenue of $9.8 million was largely driven by one transaction during the quarter, the acquisition of a property for our lodging funds for a little over $400 million. This was an opportunistic acquisition for the lodging portfolio which had not been factored into our earlier guidance estimates for the year.

Having now fully invested the capital within each of the funds, future investment activity on behalf of the managed funds will be limited to capital recycling as we actively manage those portfolios.

As an update to our previously announced exit from retail fundraising, since the end of the last quarter we have achieved two important milestones in our evolution towards becoming a more focused and streamlined net lease REIT. First, we completed the wind down of our broker-dealer business in October.

You will see in our results for the quarter, the trailing off of dealer manager fees and expenses and other advisory revenue resulting from the settlement of our final fundraising transactions. Going forward, you can expect these line items on the income statement to go to zero, further simplifying our financial statements.

Second, we stepped down as the adviser to Carey Credit Income Fund, which is the BDC we launched in 2015. Guggenheim Partners, which previously acted as the sub-adviser o the Fund, has been appointed as sole adviser.

In connection with exiting these activities and in line with our previous estimates, we’ve incurred restructuring charges of approximately $9.1 million on a year-to-date basis including $1.4 million during the third quarter, which are excluded from AFFO. Shifting now to expenses.

G&A expense continues to reflect the impact of the changes we’ve made to our cost structure over the last two years with cost totaling $17.2 million for the quarter.

We have started to recognize savings from exiting our non-traded retail fundraising platform and are tracking ahead of our initial expectations with G&A expected to total approximately $72 million for 2017. Including the full year impact of those savings, we expect our SG&A run rate to come down further in 2018 to under $70 million.

You will also see in our segment results a shift in the allocation of G&A expense between the segments with an increase in the weighting towards Owned Real Estate in line with the recent changes in our business.

We currently expect this split to be approximately 65% for Owned Real Estate and 35% for our Investment Management segment, which is reflected in our third quarter results. Interest expense for the 2017 third quarter declined by $3.2 million or 7% on a year-over-year basis.

Through the end of the third quarter, we’ve repaid $360 million in mortgage debt on a pro rata basis with the weighted average interest rate of 5.2%. At the end of the quarter, our weighted average cost of debt was 3.5%, down from 3.8% a year ago. Our balance sheet remains strong and flexible.

At quarter end, we had $1.5 billion of cash and available capacity on our credit facility with pro rata debt maturities of approximately $28 million remaining in 2017 and $229 million due in 2018. Our weighted average debt maturity was 5.6 years.

At the end of the third quarter, net debt to enterprise value was 36.8%, total consolidated debt to gross assets was 48.3% and net debt to adjusted EBITDA was 5.5x. Turning now to our guidance.

Taking into account greater than expected G&A savings and acquisition volume on behalf of the lodging funds above our initial expectations, we are raising and narrowing our 2017 AFFO guidance range to between $5.25 and $5.35 per diluted share.

In terms of our Owned portfolio, as Jason mentioned, we continue to evaluate transactions with a disciplined approach while also identifying and building a pipeline of investment opportunities within our existing portfolio.

From a timing standpoint, any transactions closed between now and the end of the year will have little to no impact on current year AFFO. The majority of our expansion activities, including those that are currently in progress, are more likely to contribute to our results starting in 2018.

Similarly, from a disposition standpoint, transactions we are currently working on are unlikely to have any significant impact on 2017 AFFO. The initial disposition guidance range we’ve provided in February assume the exercise of certain purchased options, most of which have since been restructured or were not exercised.

The remaining dispositions remain part of our asset management plan and we continue to work through those deals, although the transaction timing for the majority of the remaining dispositions may slip to the first quarter of 2018.

Within our managed funds, we have closed an approximately $50 million follow-on investment since the end of the third quarter and have identified an additional $50 million of investment activity that we hope to close by the end of the year. Including those transactions, we expect total structuring revenue of about $35 million for the 2017 full year.

Beyond that, investments within the managed funds will be limited to capital recycling causing structuring revenue to come down significantly from the current year. As a result, we expect greater stability in our revenues going forward.

To wrap up, our portfolio continues to perform well while we maintain discipline in a competitive acquisition environment. We are seeing the simplification of our business translate through our results and we remain well positioned to continue progressing on our long-term strategy.

And with that, I will hand the call back to the operator to take questions..

Thank you. At this time, we will take you questions. [Operator Instructions]. Our first question comes from R.J. Milligan with Baird. Please state your question..

Good morning, everyone..

Good morning..

Good morning, R.J..

I wanted to sort of get a little bit more color, obviously you guys think the market’s a little overheated in terms of cap rates and what do you think cracks that market or pulls you guys off the sidelines and back involved on the acquisition front?.

Yes, I think there’s two things there. You’re right. We see it as competitive right now, lots of capital flows are finding their way into net lease markets. So we have been maintaining our discipline and we’ll stay patient. And we’ll find the right deals at the right pricing, we’ll do those.

But I will say over this past quarter and as the years progressed, we have seen transaction volumes pick up in terms of the deal flow that comes through our investment department. Things are looking more interesting than they had been in the past, so we’re underrating a lot of deals. Cautiously optimistic about our pipeline right now.

I think you’ll also see us have an uptick in the number of build-to-suits that we do both expansions within our portfolio of existing assets as well as new transactions.

One of the risks that we’ve observed and talked about in the current marketplace is that given the low cap rates many assets are trading at prices that are well above replacement costs, so we think build-to-suits will help us acquire assets at a better basis and we do generate a more attractive yield there. So that’s where our focus is.

And we’ll just continue to track the market. And our cost to capital has been getting better as well. And while we can do deals accretively now, we’re obviously focused on total return too. So I’m optimistic that you’ll see some more activity..

Okay.

And maybe a little bit of commentary on what you guys are seeing in Europe and asset pricing there?.

Yes. Europe is not a very different story than what we’re seeing in the U.S. It’s competitive there. You’ve seen more cap rate compression more quickly over the last several years in Europe. And I would say on average, we’re seeing yields on opportunities that we traditionally target over there in the low to mid-6s.

There are assets that would typically fit our profile. They’re dipping in the 5s and we tend not to be all that interested in those but we’re still keeping our finger on the pulse. And obviously that depends on country and it can vary quite widely..

Great. That’s helpful. Thanks, guys..

You’re welcome..

Thank you. Our next question comes from Chris Lucas with Capital One Securities. Please state your question..

Good morning..

Good morning, everybody. Just a couple of quick questions.

On the CCIF that you guys resigned as the co-adviser on, the value of this – I guess the securities that you held, where does that show up on the balance sheet or do those go away? What happened with those?.

We do still hold our investment. It’s roughly just under $25 million and it’s now in other assets since it’s no longer an equity investment..

Okay, great. Thank you.

And then I guess Jason just going in and thinking about next year, as it relates to the tenant repurchase options, what sort of exposure do you have there for 2018?.

Yes, it’s a good question. I’ll let Brooks Gordon answer that question. He’s very close to all that..

Sure. We have one purchase option next year which we expect will be exercised in the kind of $25 million range. I will say on purchase options broadly, it’s not unusual for a purchase option to be in a sale-leaseback transaction. But what is consistent throughout our portfolio is that purchase options are generally very landlord-friendly.

They’re often at the end of a very long lease term. And typically it’s at a multiple of our acquisition costs or fair market value, kind of the greater of those. So we really only have two material purchase options in our portfolio; the New York Times transaction which we discussed before and the U-Haul portfolio out in 2024.

The rest are not material to our total asset base..

Okay, that’s helpful. Thank you. And then I guess my last question just kind of going back over the transaction market.

Who were the competitors that you’re losing out to or financing strategies that you’re losing out to in the current environment? What’s the source of capital there?.

In the U.S. – in Europe for that matter as well, we’re seeing a lot of foreign capital come into the U.S. So it’s in the form of both private equity or pension fund advisers, but it’s been a little bit less the public REITs as of recent and more some of the private capital.

And a lot of that private capital don’t necessarily go directly into the types of assets that we target. They still may target the gateway markets a little bit more heavily, although they’ve even moved outside of those as well.

But it was a bit of a domino effect as some of those core investors are pushed out into secondary markets, they may bump into us a little bit more. So if there’s a theme, I would say it’s going to be foreign capital who like the relative safety of the dollar as well..

Okay, great. Thank you. That’s all I had this morning..

You’re welcome..

Thank you. Our next question comes from Joshua Dennerlein with Bank of America. Please state your question..

Hi. Good morning, guys..

Good morning..

Good morning..

Are there any other managed funds that you would consider kind of not being the manager in the future, or have you thought of that or is this just kind of with the BDC?.

As I’ve discussed before, Josh, the BDC was a different structure. It was a perpetual life fund. Those investors came in understanding that capital was going to be continually raised, so it was a very small fund.

So we worked with the directors of that fund as well as our sub-adviser to move that over to Guggenheim which we think is in the best interest of those investors. Our remaining funds, which are CPA [Technical Difficulty] they’re very profitable. They are funds that investors who came in based on W. P.

Carey’s reputation and we’ll manage those two to the respective liquidations of those funds going forward..

Thanks, Mark. I appreciate it. That’s it for me. But congrats, Mark, and congrats, Jason..

Thanks, Josh..

Thanks, Josh. I appreciate that..

Our next question comes from Nick Joseph with Citigroup. Please state your question..

Good morning, Nick..

Good morning. Mark, congratulations first of all..

Thank you..

Is there any accelerated comp or other vesting associated with your departure?.

At this point in time there has been no discussion on that. It will be closed at whatever point in time that there is an effect. And any changes in our compensation structure would be reflected in 2018 guidance..

Okay.

And then, Mark, I know you’re coming off the Carey Board, but are you staying on the board of the managed funds?.

No, I am not. December 31st I will end my tenure with W. P. Carey both as the CEO and other boards of all of the funds..

Okay.

And then for Jason and John, are you associated with any of the managed funds formally right now and will that change when Mark comes off at the end of the year?.

Yes, I’m an officer of those funds. I’m not on the boards. I think we’ll --.

Historically, we have had the CEO of W. P. Carey serve on the boards of the managed funds. Obviously, when those funds begin to look at their liquidation alternatives, at that point they form their own committee of independent directors and anybody affiliated with W. P. Carey steps off at that point in time and isn’t part of that process..

Okay.

So I guess just finally on CPA 17 with devaluating the liquidity alternatives, can you give us an update of where that is in the process?.

I really can’t. That’s the independent directors from time to time with look at strategic alternatives and liquidity options for their funds. It doesn’t always mean the liquidity option will be forthcoming. In some cases it’s just to identify steps that will ultimately optimize our portfolio over time in the execution of those steps.

So I really can’t give you any more clarity than that. As I’ve said, we feel we’re the best buyer of those assets and we’d like to have them but that will be a process that will be in the hands of the independent directors of that fund over time..

Thanks. And just maybe finally on guidance, it looks like you flagged 4Q for AFFO as $1.31 at the midpoint which comes down from $1.37 in the third quarter.

So, maybe if you can just run through the key changes for sequential AFFO growth?.

Yes, I think the largest driver you’ll see there is the structuring revenue that I highlighted is really being an outlier this quarter with the $400 million acquisition in our CWI funds. I think absent a transaction like that, our investment volume is expected to be fairly low going forward and that’s reflected in the Q4 versus Q3 comparison..

So is the Q4 run rate of $1.31 the kind of right run rate going into 2018 and structuring revenues kind of remaining lower going forward?.

We’re not really at a point where we’re giving 2018 guidance at this point. So I think we’ll get into that on the fourth quarter earnings call..

Thanks. Congratulations, again..

Thanks, Nick..

Thank you, Nick..

Our next question comes from Todd Stender with Wells Fargo. Please state your question..

Hi. Good morning..

Good morning, Todd..

Good morning, Todd..

Just to stick on the guidance piece, I don’t know if I missed this. What’s your comfort with sticking with your full year acquisition guidance? I think it’s in the 450 to 650 range..

Yes, we’re not really updating that number. I think that – as I said earlier, our pipeline is looking more robust but it’s difficult to tell with the transactions that we have in our radar and there are several large meaningful size sale-leasebacks that they could be year-end deals if we’re able to secure them.

Lots of work to be done on all of those, but they also could close on the other half of the calendar, if they close at all. So really not update on those numbers..

And there wasn’t much included in guidance, because I guess they were truly backend weighted?.

I think that’s a good point you’re making there. As it relates to earnings for 2017, any deals that close between now and the end of the year are really not going to have a meaningful impact on AFFO and that’s really the same for dispositions too..

Okay. Thank you. And then just looking at your projects, your built-to-suits redevelopments, the Q2 projects on the supplemental, I don’t see them on the Q3 project schedule unless I’m missing something.

Do they not show up or just to see a transition of when they’re funded and when they’re fully committed?.

Once they’re completed, Todd, they move into the investment section..

Okay.

But any of the Q2 investments still being funded just to see how much quarter-by-quarter you’re contributing?.

Yes, I think those might be complete at this point..

That’s correct. Yes, those have all been completed..

So you’ll see the contribution show up in the investment section once it’s actually been completed and is contributing to our revenue..

Got it, okay. Thank you. And then the Nord Anglia, the new one that shows up, the Coconut Creek one, can you describe the yield you expect on that? What type of facility? It’s looks pretty big, 130,000 square feet.

Can you just give us a little more color on that?.

As you recall when we did the Nord sale-leaseback transaction, we agreed to fund future expansion activity there. So these are three independent schools and we’re funding expansions of their facilities. And important thing to note there is that our lease term resets to the full extended term upon completion of each of these expansions.

So that’s effectively when all said and done is going to give us an effective lease term of close to almost 30 years. And we’re working closely with them to finish out those expansions over the next two years and actually looking at some others with them as well. And those expansions are happening at the same cap rate as the going in transaction..

So the Coconut Creek one, that’s not a built-to-suit. That’s an expansion..

Well, we’re building to suit a component of the campus as an existing campus and we’re adding additional facilities..

Okay.

And what type of yield is that?.

It’s in the 7s is where it was. That was the original deal. I don’t think we disclose for various reasons cap rates on individual investments..

Okay, got it. Thank you..

Thanks, Todd..

Thanks, Todd..

Thank you. Our next question comes from Daniel Donlan with Ladenburg Thalmann. Please state your question..

Good morning, everyone. It’s actually John Massocca on for Dan..

Good morning..

Good morning, John..

Most of my questions have been answered but just one quick one. I know you talked about CWI basically – the CWIs being fully deployed at this point and the CPAs probably fully deployed by the end of this year.

What’s kind of the plan with CESH and when will that I wouldn’t call program but investment vehicle be fully deployed, incentive and all structuring revenue?.

Yes, that’s the European student housing fund and that capital is fully committed. So you won’t see new investments in that fund but there are a number of development projects underway, so the capital is committed to those projects..

So essentially capital recycling is going to be the only structuring revenue Jan 1, 2018 going forward..

That’s correct..

That’s right. It will be likely mostly in the CPA funds and it’s not going to result in meaningful volume relative to 2017 or prior years..

And how – is G&A in your Investment Management going to go down dramatically because of that run rate base just starting then, or is this kind of the run rate for I guess less actively investing Investment Management business?.

Well, I’ve given you the run rate in G&A for the total company coming down to under $70 million next year. I don’t see any further changes in that structure similar to the ones that we’ve had over the past few years as we always continue to look for ways to identify efficiencies. I think on the total company basis that’s about right.

On the segment allocation, the split that I mentioned in my remarks of the 65% to 35%, I think you can look at that as a reasonable estimate going forward..

Makes sense. That’s it for me. Thanks very much. And congratulations, Jason, and congratulations, Mark..

Thank you. I appreciate that..

[Operator Instructions]. .

Listen, I want to thank everyone. And in conclusion, I want to thank our Board of Directors for allowing me to have had a part in the changes we have brought about over the last two years. I also want to thank each of the members of the management team and the dedicated employees of W. P. Carey.

It was a pleasure to work side-by-side with each one of you over the last two years as we made decisions and executed on this plan. Every company must go through periods of change to continue to be successful over the long term. This company has gone through unprecedented change over the last two years.

It is come away a leaner, more efficient organization with a clear focus. I leave knowing this company is in the hands of a strong and capable management team that will lead this company well into the next decade. Thank you..

Thank you for your interest in W. P. Carey. If you have additional questions, please call institutional Investor Relations on 212-492-1110. That concludes today's call. You may now disconnect. Thank you..

All parties may disconnect. Have a good day..