1250873--3/23/2006--CORPORATE_PROPERTY_ASSOCIATES_16_GLOBAL

related topics

{investment, property, distribution}

{tax, income, asset}

{provision, law, control}

{stock, price, share}

{regulation, change, law}

{loss, insurance, financial}

{loan, real, estate}

{financial, litigation, operation}

{debt, indebtedness, cash}

{property, intellectual, protect}

{control, financial, internal}

{personnel, key, retain}

{cost, regulation, environmental}

CORPORATE PROPERTY ASSOCIATES 16 GLOBAL INCORPORATED International investment risks, including currency fluctuation, adverse political or economic developments, lack of uniform accounting standards (including availability of information in accordance with U.S. generally accepted accounting principles), the tax treatment of transaction structures, uncertainty of foreign laws and the difficulty of enforcing certain obligations in other countries may adversely affect our operations and our ability to make distributions. The offering price for shares of our common stock was determined by our board of directors. Shareholders equity interests may be diluted. CORPORATE PROPERTY ASSOCIATES 16 GLOBAL INCORPORATED We were incorporated in June 2003 and have a limited operating history. Our success is dependent on the performance of our advisor. WPC and Carey Financial are the subjects of an ongoing SEC investigation, the effects of which could be materially adverse to them and, possibly, us. Our advisor has limited experience managing a REIT that has a significant focus on international investments. CORPORATE PROPERTY ASSOCIATES 16 GLOBAL INCORPORATED A delay in investing funds may adversely affect or cause a delay in our ability to deliver expected returns to investors and may adversely affect our performance. Our board of directors may change our investment policies without shareholder approval, which could alter the nature of your investment. We may not be able to raise sufficient funds in our offering and through our distribution reinvestment plan to make investments that will enable us to achieve our portfolio diversification objectives. We may have difficulty selling or re-leasing our properties. The inability of a tenant in a single tenant property to pay rent will reduce our revenues. CORPORATE PROPERTY ASSOCIATES 16 GLOBAL INCORPORATED The bankruptcy or insolvency of tenants may cause a reduction in revenue. CORPORATE PROPERTY ASSOCIATES 16 GLOBAL INCORPORATED Our highly leveraged tenants may have a higher possibility of filing for bankruptcy or insolvency. The credit profile of our tenants may create a higher risk of lease defaults and therefore lower revenues. We may recognize substantial impairment charges on properties we own. Our sale-leaseback agreements may permit tenants to purchase a property at a predetermined price, which could limit our realization of any appreciation. Liability for uninsured losses could adversely affect our financial condition. CORPORATE PROPERTY ASSOCIATES 16 GLOBAL INCORPORATED Potential liability for environmental matters could adversely affect our financial condition. Our use of debt to finance acquisitions could adversely affect our cash flow. CORPORATE PROPERTY ASSOCIATES 16 GLOBAL INCORPORATED Balloon payment obligations may adversely affect our financial condition. Our participation in joint ventures creates additional risk. We do not fully control the management for our properties. We may incur costs to finish build-to-suit properties. CORPORATE PROPERTY ASSOCIATES 16 GLOBAL INCORPORATED Mortgages on our international properties are subject to provisions over which we have no control which could cause us to default and potentially lose our investment in the property and may adversely affect our revenues and distributions to our shareholders. The termination or replacement of our advisor could trigger a default or repayment event under our mortgage loans for some of our properties. Loans collateralized by non-real estate assets create additional risk and may adversely affect our REIT qualification. CORPORATE PROPERTY ASSOCIATES 16 GLOBAL INCORPORATED Payment of fees to our advisor will reduce cash available for investment and distribution. Our advisor may be subject to conflicts of interest. We have limited independence from our advisor. CORPORATE PROPERTY ASSOCIATES 16 GLOBAL INCORPORATED We face competition from affiliates of our advisor in the purchase, sale, lease and operation of properties. Our capital raising ability is principally reliant on one selected dealer. A potential change in United States accounting standards regarding operating leases may make the leasing of facilities less attractive to our potential domestic tenants, which could reduce overall demand for our leasing services. Requirements to obtain U.S. GAAP financial statements from tenants in certain cases may cause us to have to forego an investment opportunity. CORPORATE PROPERTY ASSOCIATES 16 GLOBAL INCORPORATED Your investment return may be reduced if we are required to register as an investment company under the Investment Company Act. Compliance with the Americans with Disabilities Act may require us to spend substantial amounts of money which could adversely affect our operating results. CORPORATE PROPERTY ASSOCIATES 16 GLOBAL INCORPORATED We are subject to the risks of real estate ownership which could reduce the value of our properties. There is not, and may never be a public market for our shares, so it will be difficult for shareholders to sell shares quickly. Failing to qualify as a REIT would adversely affect our operations and ability to make distributions. CORPORATE PROPERTY ASSOCIATES 16 GLOBAL INCORPORATED We may need to use leverage to make distributions. The IRS may treat sale-leaseback transactions as loans, which could jeopardize our REIT qualification. Dividends payable by REITs generally do not qualify for reduced U.S. federal income tax rates because qualifying REITs do not pay U.S. federal income tax on their net income. Possible legislative or other actions affecting REITs could adversely affect our shareholders and us. The ability of our board of directors to revoke our REIT election without shareholder approval may cause adverse consequences to our shareholders. CORPORATE PROPERTY ASSOCIATES 16 GLOBAL INCORPORATED The limit on the number of our shares a person may own may discourage a takeover. Maryland law could restrict change in control. Our articles of incorporation permit our board of directors to issue stock with terms that may subordinate the rights of the holders of our current common stock or discourage a third party from acquiring us. There are special considerations for pension or profit-sharing trusts, Keoghs or IRAs.

Full 10-K form ▸

1250873--3/23/2006--CORPORATE_PROPERTY_ASSOCIATES_16_GLOBAL_INC