BEWARE!! There are two recent tenders for CPA 15. MPF mailed a tender for $8.25. CGM countered at $8.50. Both are complicated and both have been denounced by W.P.Carey. I have buyers who will pay more and pay quicker. Trades with individual buyers cannot be canceled, while the tender offers can be withdrawn. Call us at 602-721-4730. My buyers have a limited amount of capital and will purchase on a first come basis.
The intent of this newsletter is to give you brief overview of CPA 14, 15, and 16. We are including the three programs in one newsletter because of their similarities. All have the same purpose and strategy with their performance being comparable. To get a better picture of what is currently happening and information on the market for these units, click above on the Update link.
CPA 14 commenced its offering in November of 1997 and concluded in 2001. CPA 15 opened at the conclusion of CPA 14 in November of 2001 and remained open until August of 2004. CPA 16 was raising money from mid-2003 through 2006. Total outstanding shares: CPA 14 = 87 million; CPA 15 = 125 million; CPA 16 = 123 million.
CPA REITs individually are not the largest non-traded REITs by assets, but these as a group total $7.5 billion – CPA 14 = $1.5B, CPA 15 =$3.0B, CPA 16 =$2.9B. (See www.REITsecondaryexchange.com for details on other REITs)
The Defined Purpose of these REITs is “to provide investors with increasing distributions and long-term investment growth by focusing primarily on tenant creditworthiness, building lasting relationships and investing in a broadly diversified portfolio of real estate assets. Through this approach, we attempt to protect investors in all market cycles.”
Corporate Property Associates’ Strategy is to provide “long-term financing solutions to quality companies throughout the United States and Europe. We purchase and lease back real estate assets, enabling companies to reinvest the newly freed up capital in their businesses – a process known as sale-leaseback financing.” In addition to investing in Europe and the United States, CPA 16 also invest throughout the world.
Cash Flow: CPA has so far met its goal of providing increasing cash flow for its investors. In the latest report, however, they point out increasing impairment charges, lowering revenue streams, increasing tenant bankruptcies and reference to difficult economic times. CPA 16 has been able to sustain level distributions by significantly increasing the amount of return of capital in each successive distribution. Time will tell whether they can continue to find cash to maintain their record. We prefer to see distributions funded entirely from Cash from Operations.
Repurchase Plans are integral parts of non-traded REITs. Since CPA 14, CPA 15, and CPA 16 have no public market, the REITs are designed to provide limited liquidity to the investors through a repurchase plan. Both CPA 14 and CPA 15 have indefinitely suspended the plans until further notice. If you are considering selling your position, go to www.REITsecondaryexchange.com.
Portfolio: Each REIT’s portfolio is diverse both in type of, as well as, location. CPA 16 is more diverse geographically since it is not limited the EU and United States. CPA 14 owns 314 buildings serving 87 tenants; CPA 15 owns 363 buildings with 79 tenants; and CPA 16 owns 288 buildings with 79 tenants. All three REITs own between 27 million and 30 million square feet. As of September 2009, the vacancy rate for CPA 14 was 4%, CPA 15 was 3%, and CPA 16 was only 1%.
W. P. Carey & Co. LLC manages the portfolios of the three REITs. It has approximately $10 billion of assets under management and is listed on the New York Stock Exchange – symbol WPC. Of all the REITs and management companies we watch, W. P. Carey and the CPA products are the best managed and most reliable.
Inland American is the largest, active non-traded REIT with assets of over $11 billion.
Inland Western, a $7 billion REIT, had planned to liquidate several years ago.
Wells Real Estate II is heavily invested in office buildings with more than half east of the Mississippi River.
CPA has four active REITs with combined assets of over $8 billion. These include CPA 14, CPA 15, CPA 16 Global, and CPA 17 Global
Cole Credit II is a REIT that focuses on freestanding, single-tenant retail properties.