1390213--3/31/2008--Corporate_Property_Associates_17_-_Global

related topics

{investment, property, distribution}

{loan, real, estate}

{tax, income, asset}

{loss, insurance, financial}

{provision, law, control}

{stock, price, share}

{regulation, change, law}

{financial, litigation, operation}

{property, intellectual, protect}

{interest, director, officer}

{gas, price, oil}

{personnel, key, retain}

{cost, regulation, environmental}

Stockholders equity interests may be diluted. As a new investor, you will experience substantial dilution in the net tangible book value of your shares equal to the offering costs associated with your shares. We may not be able to raise sufficient funds in this offering to make investments that will enable us to achieve our portfolio diversification objectives. Our board of directors may change our investment policies without stockholder approval, which could alter the nature of your investment. We are not required to meet any diversification standards; therefore, our investments may become subject to concentration of risk. Our success will be dependent on the performance of our advisor. We may invest in assets outside our advisor s core expertise and incur losses as a result. WPC and Carey Financial have recently settled the previously disclosed SEC investigation. If other actions are brought against WPC or Carey Financial, we could be adversely affected. Our advisor has limited experience managing a REIT that has a broad investment strategy. Exercising our right to repurchase all or a portion of Carey Holdings interests in our operating partnership upon certain termination events could be prohibitively expensive and could deter us from terminating the advisory agreement. The repurchase of Carey Holdings special general partner interest in our operating partnership upon the termination of Carey Asset Management as our advisor may discourage a takeover attempt if our advisory agreement would be terminated and Carey Asset Management not replaced by an affiliate of WPC as our advisor in connection therewith. The termination or replacement of our advisor could trigger a default or repayment event under our financing arrangements for some of our assets. Payment of fees to our advisor, and distributions to our special general partner, will reduce cash available for investment and distribution. Our advisor may be subject to conflicts of interest. We have limited independence from our advisor. We face competition from affiliates of our advisor in the purchase, sale, lease and operation of properties. The sales agent s affiliation with our advisor may cause a conflict of interest and may hinder the performance of its due diligence obligations. Our advisor may hire subadvisors in areas where our advisor is seeking additional expertise. Stockholders will not be able to review these subadvisors and our advisor may not have sufficient expertise to monitor the subadvisors. We do not fully control the management for our properties. We may incur material losses on some of our investments. Liability for uninsured losses could adversely affect our financial condition. A potential change in U.S. 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. Our net tangible book value may be adversely affected if we are required to adopt the fair value accounting provisions of SOP 07-1. Our participation in joint ventures creates additional risk. 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. Our derivative financial instruments used to hedge against interest rate and currency fluctuations could reduce the overall returns on your investment. 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. We may invest in new geographic areas that have risks that are greater or less well known to us and we may incur losses as a result. We will incur debt to finance our operations, which may subject us to an increased risk of loss. The inability of a tenant in a single tenant property to pay rent will reduce our revenues. The bankruptcy or insolvency of tenants or borrowers may cause a reduction in revenue. Our leases may permit tenants to purchase a property at a predetermined price, which could limit our realization of any appreciation. 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 incur costs to finish build-to-suit properties. We are subject, in part, to the risks of real estate ownership which could reduce the value of our properties. We may have difficulty selling or re-leasing our properties. Potential liability for environmental matters could adversely affect our financial condition. We face active competition for the investments we make. Non-net lease investments may involve higher risks and less current income, which could adversely affect distributions. Appraisals that we obtain may include leases in place on the property being appraised and if the leases terminate, the value of the property may become significantly lower. Deterioration in the credit markets could adversely affect our ability to finance or refinance investments and the ability of our tenants to meet their obligations which could affect our ability to make distributions. The mortgage loans in which we may invest and the mortgage loans underlying the mortgage-backed securities in which we may invest will be subject to delinquency, foreclosure and loss, which could result in losses to us. The B notes, subordinate mortgage notes, mezzanine loans and participation interests in mortgage and mezzanine loans in which we may invest may be subject to risks relating to the structure and terms of the transactions, as well as subordination in bankruptcy, and there may not be sufficient funds or assets remaining to satisfy the subordinate notes in which we may have invested, which may result in losses to us. Interest rate fluctuations and changes in prepayment rates could reduce our ability to generate income on our investments in mortgage loans. An increase in prepayment rates of the mortgages underlying any mortgage-backed securities in which we may invest may adversely affect the profitability of our investment in these securities. We may invest in subordinate mortgage-backed securities which are subject to a greater risk of loss than more senior securities. The B Notes in which we invest may be subject to additional risks relating to the privately negotiated structure and terms of the transaction, which may result in losses to us. Investment in non-conforming and non-investment grade loans may involve increased risk of loss. Investments in mezzanine loans involve greater risks of loss than senior loans secured by income producing properties. Our investments in debt securities are subject to specific risks relating to the particular issuer of securities and to the general risks of investing in subordinated real estate securities. Investments in securities of REITs, real estate operating companies and companies with significant real estate assets will expose us to many of the same general risks associated with direct real property ownership. The value of the equity securities of companies engaged in real estate activities that we may invest in may be volatile and may decline. We may invest in the equity securities of CDOs and such investments involve various significant risks, including that CDO equity receives distributions from the CDO only if the CDO generates enough income to first pay the holders of its debt securities and its expenses. Equity investments involve a greater risk of loss than traditional debt financing. There is not, and may never be a public market for our shares, so it will be difficult for stockholders to sell shares quickly. Failing to qualify as a REIT would adversely affect our operations and ability to make distributions. Our distributions may exceed our earnings. 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 stockholders and us. The power of our board of directors to revoke our REIT election without stockholder approval may cause adverse consequences to our stockholders. The limit on the number of our shares a person may own may discourage a takeover. Conflicts of interest may arise between holders of our common shares and holders of partnership interests in our operating partnership. Maryland law could restrict change in control. Our charter permits 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 ▸

1390213--3/31/2008--Corporate_Property_Associates_17_-_Global_INC