> ## Content Index > Fetch the complete content index at: https://www.bullished.co/llms.txt > Use this file to discover other available public pages before exploring further. # W.P. Carey Sees Cap Rates Moving Toward High Sevens, Some Eights — And Plans 2027 Deals Without New Stock - URL: https://www.bullished.co/w-p-carey-sees-cap-rates-moving-toward-high-sevens-some-eights-and-plans-2027-deals-c437ceac/ - Published: 2026-10-28T16:16:37.000Z - Updated: 2026-10-28T16:16:37.000Z - Description: CEO Jason Fox says deals now price in the mid to high sevens, and $540 million of forward equity is among 2027 funding sources. - Author: Matteo Parrino - Tags: Earnings, WPC, Industry: Real Estate [W.P. Carey](https://www.bullished.co/tag/wpc/), the REIT that owns commercial property and leases it to companies on long-term net leases, expects to buy at first-year yields in the high sevens and sometimes the eights if long-term rates stay elevated, CEO Jason Fox told analysts on the company's [third-quarter earnings call](https://www.sec.gov/Archives/edgar/data/1025378/000102537826000129/wpc2026q38-kerexh991.htm?ref=bullished.co). He said the company can fund 2027 investing without selling new stock. ## Cap rates creeping up Cap rates, the first-year rent as a share of purchase price, averaged 7.5% on [roughly $1.6 billion](https://www.sec.gov/Archives/edgar/data/1025378/000102537826000129/wpc2026q38-kerexh991.htm?ref=bullished.co) of investments so far this year, Fox said. Deals closed in the third quarter and expected in the fourth average in the mid to high sevens, against the low to mid sevens in the first half. Rent bumps matter as much as the starting yield, he said. They lift average yields over a lease's life "well into the nines," keeping spreads inside the company's historical target of 200 to 300 basis points over its spot cost of capital. Asked by a UBS analyst how fast pricing reaches eight, Fox said timing is hard to predict and depends on where rates settle. A month or two of stable rates around 5% would likely put pricing in the high sevens on average, he said. The company is pursuing a pipeline of $200 million to $300 million of deals in process, and Fox said it would hope to keep pushing cap rates higher if the 10-year Treasury stays at or above 5%. Fox said sale-leasebacks, where a company sells its property and rents it back, should reprice fastest, while investment-grade retail will take longer. Full-year investment guidance now runs $1.8 billion to $2.1 billion, with only the low end raised. ## Funding 2027 without equity Fox listed the sources: about $540 million of forward equity raised at around $73 a share, about $300 million of annual retained cash flow, ordinary-course asset sales, and a stake in Lineage that he put at $150 million to $200 million, depending on the stock price. He told a Scotiabank analyst the company would not hit "the sell button" the day the Lineage shares unlock, but would probably liquidate over a quarter or two and reinvest in core net lease. Liquidity ended the quarter at $2.6 billion, and CFO Toni Sanzone said net debt to adjusted EBITDA was 5.5 times, or 5.2 times counting unsettled forward equity. Eleven tenant expansion and build-to-suit projects already underway will add about $325 million of investment over the next 12 to 24 months, Fox said, including about $95 million due in the fourth quarter. ## Earnings and the fourth-quarter dip Adjusted funds from operations per share were $1.33 in the third quarter, [up 6.4% from a year earlier](https://www.prnewswire.com/news-releases/w-p-carey-announces-third-quarter-2026-financial-results-302921196.html?ref=bullished.co), Sanzone said. The company raised its 2026 range to $5.23 to $5.29, implying 5.8% growth at the midpoint. She guided to a lower fourth quarter because of rent abatements, including four months of free rent on one Nord Anglia property, a two to three cent hit in total. She said the third quarter is a better starting point for 2027 growth than the fourth. Potential rent loss from tenant credit events fell to $3 million to $5 million, from $7 million to $10 million. Fox cautioned that higher rates are a headwind for the whole industry through tighter spreads and transaction uncertainty. The company's next refinancing test is a €500 million bond maturing in April 2027, which Sanzone said it expects to replace with another euro bond. ### Sources - [Document](https://www.sec.gov/Archives/edgar/data/1025378/000102537826000129/wpc2026q38-kerexh991.htm?ref=bullished.co) — sec.gov - [W.P. Carey Q3 earnings beat as investment activity holds up (WPC:NYSE) | Seeking Alpha](https://seekingalpha.com/news/4658350-wp-carey-q3-earnings-beat-as-investment-activity-holds-up?ref=bullished.co) — seekingalpha.com - [W.P. Carey (WPC) Beats Q3 FFO and Revenue Estimates](https://finance.yahoo.com/real-estate/articles/w-p-carey-wpc-beats-212012617.html?.tsrc=rss&ref=bullished.co) — Yahoo Finance - [W. P. Carey FFO of $1.33 beats by $0.03, revenue of $468.3M beats by $8.55M (NYSE:WPC) | Seeking Alpha](https://seekingalpha.com/news/4658365-w-p-carey-ffo-of-1%5F33-beats-by-0%5F03-revenue-of-468%5F3m-beats-by-8%5F55m?ref=bullished.co) — seekingalpha.com - [W. P. Carey Announces Third Quarter 2026 Financial Results](https://www.prnewswire.com/news-releases/w-p-carey-announces-third-quarter-2026-financial-results-302921196.html?ref=bullished.co) — prnewswire.com ### More on W.P. Carey - [W. P. Carey Lifts 2026 Profit Outlook To $5.23-$5.29 A Share As Rent Growth Holds](https://www.bullished.co/w-p-carey-lifts-2026-profit-outlook-to-5-23-5-29-a-share-as-rent-growth-holds-98702260/) [All W.P. Carey (WPC) coverage →](https://www.bullished.co/tag/wpc/)