Shareholder Reports

CPA^®:14 First Quarter 2010 Shareholder Report  

Dear Fellow Shareholders,

Wm. Polk Carey founded the Corporate Property Associates series of investment programs 30+ years ago with the intention of creating an investment product that provided rising income and could work for shareholders in good times and in bad.  CPA^®:14 continues to perform well today for two fundamental reasons: our portfolio was constructed with the same long-term and conservative investment discipline W. P. Carey has adhered to for decades and we continue to manage our assets diligently today.

Distributions
We are proud to have been able to continue providing you with   a continuous income stream in the form of quarterly distribution payments.  Our first quarter 2010 distribution increased from the prior quarter and was paid at an annualized yield of 8.36%. These cash distributions continue to be supported by both adjusted cash flow from operating activities and funds from operations, as adjusted (AFFO); as per the table below, we paid out 69% and 80% of our adjusted cash flow and AFFO, respectively, in distributions for the first quarter of 2010.   

Distributions declared per share	$0.1996
Adjusted cash flow per share	$0.29
Payout ratio (distributions/Adjusted cash flow)	69%
AFFO per share	$0.25
Payout ratio (distributions/AFFO)	80%

^{For the three months ended March 31, 2010}

Portfolio Performance
Our occupancy rate of approximately 95% and long weighted-average lease term of 9.9 years are major determinants of why CPA:14’s cash flow has remained relatively stable over the past several years.  In addition, we have sought to diversify by tenant, industry, property type and region; at March 31, 2010, our portfolio was comprised of our full or partial ownership interests in 312 properties, substantially all of which were triple-net leased to 86 tenants in 38 states and 5 countries.

Because we invest internationally, we have exposure to currency exchange rate movements, primarily in the Euro.  However, we seek to mitigate our exposure to exchange rate fluctuations by incurring mortgage debt on properties in the same currency as our rent is paid.  We refer to the excess of the rental payments we receive on a property over the principal and interest we pay on the underlying mortgage debt as our “net rent.” As of March 31, 2010, we received approximately 16% of our net rent in Euros. While a significant decline in the value of the Euro could negatively affect our cash flow, we believe that having debt in the same currency as the rent provides a natural hedge against exchange rate movements.

Active Portfolio Management
We are currently focused on managing our existing portfolio of properties and seek to protect and enhance asset values through lease renewals, aggressive workouts, advantageous refinancing opportunities and strategic asset sales.

CPA^®:14 has sought to acquire assets that we believe are critically important to a tenant’s operations in order to mitigate risks such as tenant defaults and bankruptcy. We currently have several assets in various stages of the workout process, and we are working diligently to resolve these situations as quickly as possible.

In addition, we are currently working on refinancing the    $139 million in debt that we have coming due in the next 12 months, and believe we will have sufficient cash and borrowing capacity available to make these payments if refinancing is unavailable on acceptable terms. 

Looking Forward
We believe some of the trends we’re seeing—improving financing markets, rebounding real estate values and potentially fewer tenants in distress—will benefit us.  We also continue to face several challenges, including lower rent on renewals and low inflation (as our leases are generally tied to the consumer price index, this will likely limit rent increases in the future).        As we continue to navigate through this changing economic environment, we look forward to continue serving you, our investors. On behalf of the entire W. P. Carey family, we thank you for your ongoing confidence and support.

With best regards,

Wm. Polk Carey	Gordon F. DuGan	Gino M. Sabatini
Chairman of the Board	Chief Executive Officer	President

Please note that this letter provides only a summary of the information contained in our quarterly report on Form 10-Q for the three months ended March 31, 2010, which we filed with the Securities and Exchange Commission (SEC) on May 14, 2010. This letter also contains references to certain non-GAAP financial measures, including adjusted cash flow from operating activities and AFFO. A description of these non-GAAP measures and reconciliations to the most directly comparable GAAP measures can be found in our Supplemental Information attached as an exhibit to the current report on Form 8-K that we filed with the SEC on May 14, 2010. We encourage you to read both documents, either on the SEC website, www.sec.gov , or at www.cpa14.com .

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