Dear Fellow Shareholders

Throughout 2010, volatility in the global capital markets enabled W. P. Carey once again to demonstrate how our balanced business model serves our investors and shareholders well during periods of uncertainty. In a year characterized by swings in sentiment, between fear and confidence, the stability of our revenue streams stood out. Funds from Operations—as adjusted rose to $3.27 per share, from $3.09 in 2009, and we increased our dividend again, which marked 40 consecutive quarters of such increases.

Other 2010 highlights were as follows:

• We provided our shareholders with a total annual return of 20.4%.
• We raised over $590 million in equity through our broker/dealer subsidiary, Carey Financial.
• We made investments totaling $1.1 billion on behalf of our CPA^® REITS and for our own portfolio.
• We expanded our global presence to 17 countries, including China, where we consummated our first transaction, with China's largest non-state-owned corporation.
• We entered the lodging sector through our launch of Carey Watermark Investors.

W. P. Carey achieved these results despite—and in some ways because of—the uncertain global market conditions. For example, during the course of the year, real estate debt markets segmented into two tiers—the have and have-not worlds—in a way that was favorable to us. The first tier includes quality tenants and properties with lower loan-to-value ratios, for which there was ample non-recourse debt available. Because much of what we purchase fell into this category, we were able to arrange attractive acquisition debt and to refinance existing investments on improved terms.

Such segmentation took place in the unsecured debt markets, too. Larger companies that were already well capitalized—the haves—had access to inexpensive debt, but for the have-nots, a large group of smaller and medium-size corporations, the debt markets were less accommodating. As a result, our form of long-term sale-leaseback financing became all the more attractive to the kinds of companies we typically target, i.e., those that have established products and strong management but lack capital.