10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

þ	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended June 30, 2018
or
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from to

Commission File Number: 000-54970

CORPORATE PROPERTY ASSOCIATES 18 – GLOBAL INCORPORATED

(Exact name of registrant as specified in its charter)

Maryland	90-0885534
(State of incorporation)	(I.R.S. Employer Identification No.)
50 Rockefeller Plaza
New York, New York	10020
(Address of principal executive offices)	(Zip Code)

Investor Relations (212) 492-8920

(212) 492-1100

(Registrant’s telephone numbers, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o	Accelerated filer o	Non-accelerated filer þ
		(Do not check if a smaller reporting company)
Smaller reporting company o	Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

Registrant has 113,956,225 shares of Class A common stock, $0.001 par value, and 31,713,872 shares of Class C common stock, $0.001 par value, outstanding at August 3, 2018.

INDEX

		Page No.
PART I — FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets	2
	Condensed Consolidated Statements of Operations	3
	Condensed Consolidated Statements of Comprehensive (Loss) Income	4
	Condensed Consolidated Statements of Equity	5
	Condensed Consolidated Statements of Cash Flows	6
	Notes to Condensed Consolidated Financial Statements	7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		32
Item 3. Quantitative and Qualitative Disclosures About Market Risk		54
Item 4. Controls and Procedures		57
PART II — OTHER INFORMATION
Item 2. Unregistered Sales of Equity Securities		58
Item 6. Exhibits		59
Signatures		60

Forward-Looking Statements

This Quarterly Report on Form 10-Q, or this Report, including Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 2 of Part I of this Report, contains forward-looking statements within the meaning of the federal securities laws.

These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. These forward-looking statements include, but are not limited to, statements regarding: the amount and timing of any future dividends; statements regarding our corporate strategy and underlying assumptions about our portfolio (e.g. occupancy rate, lease terms, and tenant credit quality, including our expectations about tenant bankruptcies and interest coverage), possible new acquisitions and dispositions, and our international exposure and acquisition volume; our future capital expenditure levels, including any plans to fund our future liquidity needs, and future leverage and debt service obligations; our capital structure; statements that we make regarding our ability to remain qualified for taxation as a real estate investment trust, or REIT, and the recently adopted Tax Cuts and Jobs Act in the United States; the impact of recently issued accounting pronouncements; other regulatory activity, such as the General Data Protection Regulation in the European Union or other data privacy initiatives; and the general economic outlook. It is important to note that our actual results could be materially different from those projected in such forward-looking statements. Other unknown or unpredictable factors could also have material adverse effects on our business, financial condition, liquidity, results of operations, Modified funds from operations, or MFFO, and prospects. You should exercise caution in relying on forward-looking statements as they involve known and unknown risks, uncertainties, and other factors that may materially affect our future results, performance, achievements, or transactions. Information on factors that could impact actual results and cause them to differ from what is anticipated in the forward-looking statements contained herein is included in this Report as well as in our other filings with the Securities and Exchange Commission, or the SEC, including but not limited to those described in Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2017, as filed with the SEC on March 12, 2018, or the 2017 Annual Report. Moreover, because we operate in a very competitive and rapidly changing environment, new risks are likely to emerge from time to time. Given these risks and uncertainties, shareholders are cautioned not to place undue reliance on these forward-looking statements as a prediction of future results, which speak only as of the date of this Report, unless noted otherwise. Except as required by federal securities laws and the rules and regulations of the SEC, we do not undertake to revise or update any forward-looking statements.

All references to “Notes” throughout the document refer to the footnotes to the condensed consolidated financial statements of the registrant in Part I, Item 1. Financial Statements (Unaudited).

CPA:18 – Global 6/30/2018 10-Q– 1

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements.

CORPORATE PROPERTY ASSOCIATES 18 – GLOBAL INCORPORATED

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in thousands, except share and per share amounts)

	June 30, 2018			December 31, 2017
Assets
Investments in real estate:
Real estate — Land, buildings and improvements	$	1,275,023		$	1,263,172
Operating real estate — Land, buildings and improvements	568,601			566,489
Real estate under construction	195,122			134,366
Net investments in direct financing leases	41,648			39,957
In-place lease intangible assets	270,957			274,723
Other intangible assets	34,967			35,811
Investments in real estate	2,386,318			2,314,518
Accumulated depreciation and amortization	(282,588		)	(252,067		)
Net investments in real estate	2,103,730			2,062,451
Cash and cash equivalents	90,971			71,068
Accounts receivable and other assets, net	204,242			197,478
Total assets	$	2,398,943		$	2,330,997
Liabilities and Equity
Debt:
Non-recourse mortgages, net	$	1,223,215		$	1,129,432
Bonds payable, net	147,311			146,016
Debt, net	1,370,526			1,275,448
Accounts payable, accrued expenses and other liabilities	149,808			148,031
Due to affiliates	11,780			13,767
Distributions payable	21,967			21,686
Total liabilities	1,554,081			1,458,932
Commitments and contingencies (Note 10)
Preferred stock, $0.001 par value; 50,000,000 shares authorized; none issued	—			—
Class A common stock, $0.001 par value; 320,000,000 shares authorized; 112,849,543 and 111,193,651 shares, respectively, issued and outstanding	113			110
Class C common stock, $0.001 par value; 80,000,000 shares authorized; 31,410,984 and 31,189,137 shares, respectively, issued and outstanding	31			31
Additional paid-in capital	1,273,685			1,257,840
Distributions and accumulated losses	(453,823		)	(420,005		)
Accumulated other comprehensive loss	(40,749		)	(33,212		)
Total stockholders’ equity	779,257			804,764
Noncontrolling interests	65,605			67,301
Total equity	844,862			872,065
Total liabilities and equity	$	2,398,943		$	2,330,997

See Notes to Condensed Consolidated Financial Statements.

CPA:18 – Global 6/30/2018 10-Q– 2

CORPORATE PROPERTY ASSOCIATES 18 – GLOBAL INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(in thousands, except share and per share amounts)

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Revenues
Lease revenues:
Rental income	$	28,456		$	24,542		$	57,013		$	47,902
Interest income from direct financing leases	913			906			1,831			1,880
Total lease revenues	29,369			25,448			58,844			49,782
Operating real estate income	20,309			20,316			39,972			39,696
Other operating income	3,930			3,426			7,447			6,443
Other interest income	1,795			1,783			3,575			3,532
	55,403			50,973			109,838			99,453
Operating Expenses
Depreciation and amortization	16,892			18,728			34,524			37,679
Property expenses	10,190			10,209			20,024			18,418
Operating real estate expenses	8,220			8,448			16,379			16,482
General and administrative	1,800			1,752			3,445			3,481
Acquisition and other expenses	17			(7		)	17			45
	37,119			39,130			74,389			76,105
Other Income and Expenses
Interest expense	(13,294		)	(11,791		)	(26,224		)	(23,244		)
Other gains and (losses)	(2,072		)	9,459			5,920			12,121
Equity in losses of equity method investment in real estate	(235		)	(254		)	(559		)	(353		)
	(15,601		)	(2,586		)	(20,863		)	(11,476		)
Income before income taxes	2,683			9,257			14,586			11,872
Benefit from (provision for) income taxes	298			(1,123		)	713			(1,193		)
Net Income	2,981			8,134			15,299			10,679
Net income attributable to noncontrolling interests (inclusive of Available Cash Distributions to a related party of $2,830, $2,186, $4,735, and $3,861, respectively)	(3,315		)	(2,350		)	(5,306		)	(4,274		)
Net (Loss) Income Attributable to CPA:18 – Global	$	(334	)	$	5,784		$	9,993		$	6,405
Class A Common Stock
Net (loss) income attributable to CPA:18 – Global	$	(213	)	$	4,600		$	7,901		$	5,179
Basic and diluted weighted-average shares outstanding	113,010,970			109,533,769			112,564,943			108,998,427
Basic and diluted (loss) income per share	$	—		$	0.04		$	0.07		$	0.05
Distributions Declared Per Share	$	0.1563		$	0.1563		$	0.3126		$	0.3126
Class C Common Stock
Net (loss) income attributable to CPA:18 – Global	$	(121	)	$	1,184		$	2,092		$	1,226
Basic and diluted weighted-average shares outstanding	31,593,597			31,030,596			31,517,919			30,898,107
Basic and diluted (loss) income per share	$	—		$	0.04		$	0.07		$	0.04
Distributions Declared Per Share	$	0.1378		$	0.1382		$	0.2753		$	0.2762

See Notes to Condensed Consolidated Financial Statements.

CPA:18 – Global 6/30/2018 10-Q– 3

CORPORATE PROPERTY ASSOCIATES 18 – GLOBAL INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (UNAUDITED)

(in thousands)

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Net Income	$	2,981		$	8,134		$	15,299		$	10,679
Other Comprehensive (Loss) Income
Foreign currency translation adjustments	(22,582		)	19,541			(11,005		)	23,697
Realized and unrealized gain (loss) on derivative instruments	3,418			(3,824		)	2,759			(4,281		)
	(19,164		)	15,717			(8,246		)	19,416
Comprehensive (Loss) Income	(16,183		)	23,851			7,053			30,095
Amounts Attributable to Noncontrolling Interests
Net income	(3,315		)	(2,350		)	(5,306		)	(4,274		)
Foreign currency translation adjustments	2,326			(2,265		)	709			(2,795		)
Comprehensive income attributable to noncontrolling interests	(989		)	(4,615		)	(4,597		)	(7,069		)
Comprehensive (Loss) Income Attributable to CPA:18 – Global	$	(17,172	)	$	19,236		$	2,456		$	23,026

See Notes to Condensed Consolidated Financial Statements.

CPA:18 – Global 6/30/2018 10-Q– 4

CORPORATE PROPERTY ASSOCIATES 18 – GLOBAL INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (UNAUDITED)

Six Months EndedJune 30, 2018 and 2017

(in thousands, except share and per share amounts)

	CPA:18 – Global Stockholders
											Additional Paid-In Capital			Distributions and Accumulated Losses			Accumulated Other Comprehensive Loss			Total CPA:18 – Global Stockholders			Noncontrolling Interests
	Common Stock
	Class A					Class C
	Shares		Amount			Shares		Amount																		Total
Balance at January 1, 2018	111,193,651		$	110		31,189,137		$	31		$	1,257,840		$	(420,005	)	$	(33,212	)	$	804,764		$	67,301		$	872,065
Shares issued	2,008,147		2			625,174		1			22,012									22,015						22,015
Shares issued to affiliate	711,157		1								5,970									5,971						5,971
Contributions from noncontrolling interests																				—			1,174			1,174
Distributions to noncontrolling interests																				—			(7,467		)	(7,467		)
Distributions declared ($0.3126 and $0.2753 per share to Class A and Class C, respectively)														(43,811		)				(43,811		)				(43,811		)
Net income														9,993						9,993			5,306			15,299
Other comprehensive loss:
Foreign currency translation adjustments																	(10,296		)	(10,296		)	(709		)	(11,005		)
Realized and unrealized gain on derivative instruments																	2,759			2,759						2,759
Repurchase of shares	(1,063,412	)	—			(403,327	)	(1		)	(12,137		)							(12,138		)				(12,138		)
Balance at June 30, 2018	112,849,543		$	113		31,410,984		$	31		$	1,273,685		$	(453,823	)	$	(40,749	)	$	779,257		$	65,605		$	844,862
Balance at January 1, 2017	107,460,081		$	107		30,469,144		$	30		$	1,222,139		$	(360,673	)	$	(61,704	)	$	799,899		$	66,005		$	865,904
Shares issued	2,133,836		2			687,204		1			22,276									22,279						22,279
Shares issued to affiliate	686,096		1								5,420									5,421						5,421
Contributions from noncontrolling interests																				—			3,118			3,118
Distributions to noncontrolling interests																				—			(8,261		)	(8,261		)
Distributions declared ($0.3126 and $0.2762 per share to Class A and Class C, respectively)														(42,611		)				(42,611		)				(42,611		)
Net income														6,405						6,405			4,274			10,679
Other comprehensive income:
Foreign currency translation adjustments																	20,902			20,902			2,795			23,697
Realized and unrealized loss on derivative instruments																	(4,281		)	(4,281		)				(4,281		)
Repurchase of shares	(822,433	)	(1		)	(127,524	)	—			(7,348		)							(7,349		)				(7,349		)
Balance at June 30, 2017	109,457,580		$	109		31,028,824		$	31		$	1,242,487		$	(396,879	)	$	(45,083	)	$	800,665		$	67,931		$	868,596

See Notes to Condensed Consolidated Financial Statements.

CPA:18 – Global 6/30/2018 10-Q– 5

CORPORATE PROPERTY ASSOCIATES 18 – GLOBAL INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(in thousands)

	Six Months Ended June 30,
	2018			2017
Cash Flows — Operating Activities
Net Cash Provided by Operating Activities	$	44,960		$	43,091
Cash Flows — Investing Activities
Funding and advances for build-to-suit projects	(44,941		)	(30,497		)
Acquisitions of real estate, build-to-suit projects and direct financing leases	(37,985		)	(27,331		)
Proceeds from insurance settlements	7,074			3,895
Capital expenditures on real estate	(7,033		)	(5,458		)
Value added taxes refunded in connection with the acquisitions of real estate	3,374			12,050
Value added taxes paid in connection with acquisitions of real estate	(3,290		)	(2,491		)
Proceeds from repayment of notes receivable	2,546			—
Payment of deferred acquisition fees to an affiliate	(2,238		)	(2,854		)
Proceeds from sale of real estate	771			—
Other investing activities, net	12			(39		)
Capital contributions to equity investment	(6		)	(5,616		)
Return of capital from equity investments	—			236
Net Cash Used in Investing Activities	(81,716		)	(58,105		)
Cash Flows — Financing Activities
Proceeds from mortgage financing	128,010			32,613
Distributions paid	(43,530		)	(42,210		)
Scheduled payments and prepayments of mortgage principal	(22,654		)	(6,323		)
Proceeds from issuance of shares	20,970			21,175
Repurchase of shares	(12,138		)	(7,349		)
Distributions to noncontrolling interests	(7,467		)	(8,261		)
Contributions from noncontrolling interests	1,174			2,339
Payment of deferred financing costs and mortgage deposits	(965		)	(526		)
Other financing activities, net	540			(43		)
Proceeds from notes payable to affiliate	—			11,196
Repayment of notes payable to affiliate	—			(4,495		)
Net Cash Provided by (Used in) Financing Activities	63,940			(1,884		)
Change in Cash and Cash Equivalents and Restricted Cash During the Period
Effect of exchange rate changes on cash and cash equivalents and restricted cash	(2,690		)	2,776
Net increase (decrease) in cash and cash equivalents and restricted cash	24,494			(14,122		)
Cash and cash equivalents and restricted cash, beginning of period	90,183			93,741
Cash and cash equivalents and restricted cash, end of period	$	114,677		$	79,619

See Notes to Condensed Consolidated Financial Statements.

CPA:18 – Global 6/30/2018 10-Q– 6

CORPORATE PROPERTY ASSOCIATES 18 – GLOBAL INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 1. Organization

Organization

Corporate Property Associates 18 – Global Incorporated, or CPA:18 – Global, and, together with its consolidated subsidiaries, we, us, or our, is a publicly owned, non-traded REIT, that invests primarily in a diversified portfolio of income-producing commercial real estate properties leased to companies and other real estate related assets, both domestically and internationally. We were formed in 2012 and are managed by W. P. Carey Inc., or WPC, through one of its subsidiaries, or collectively, our Advisor. As a REIT, we are not subject to U.S. federal income taxation as long as we satisfy certain requirements, principally relating to the nature of our income and the level of our distributions, among other factors. We earn revenue primarily by leasing the properties we own to single corporate tenants, predominantly on a triple-net lease basis, which requires the tenant to pay substantially all of the costs associated with operating and maintaining the property. Revenue is subject to fluctuation due to the timing of new lease transactions, lease terminations, lease expirations, contractual rent adjustments, tenant defaults, sales of properties, and changes in foreign currency exchange rates.

Substantially all of our assets and liabilities are held by CPA:18 Limited Partnership, or the Operating Partnership, and at June 30, 2018 we owned 99.97% of general and limited partnership interests in the Operating Partnership. The remaining interest in the Operating Partnership is held by a subsidiary of WPC.

At June 30, 2018, our portfolio was comprised of full or partial ownership interests in 59 properties, substantially all of which were fully-occupied and triple-net leased to 100 tenants totaling 10.2 million square feet. The remainder of our portfolio was comprised of our full or partial ownership interests in 69 self-storage properties and 14 multi-family and student-housing properties totaling 6.7 million square feet.

We operate in three reportable business segments: Net Lease, Self Storage, and Multi-Family. Our Net Lease segment includes our investments in net-leased properties, whether they are accounted for as operating leases or direct financing leases. Our Self Storage segment is comprised of our investments in self-storage properties. Our Multi-Family segment is comprised of our investments in six multi-family residential properties and eight student-housing developments. In addition, we have an All Other category that includes our notes receivable investments (Note 12). Our reportable business segments and All Other category are the same as our reporting units.

We raised aggregate gross proceeds in our initial public offering of approximately $1.2 billion through April 2, 2015, which is the date we closed our offering. We have fully invested the proceeds from our initial public offering. In addition, from inception through June 30, 2018, $133.6 million and $37.0 million of distributions to our shareholders were reinvested in our Class A and Class C common stock, respectively, through our Distribution Reinvestment Plan, or DRIP.

Note 2. Basis of Presentation

Basis of Presentation

Our interim condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and, therefore, do not necessarily include all information and footnotes necessary for a fair statement of our consolidated financial position, results of operations, and cash flows in accordance with generally accepted accounting principles in the United States, or GAAP. The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP.

In the opinion of management, the unaudited financial information for the interim periods presented in this Report reflects all normal and recurring adjustments necessary for a fair statement of financial position, results of operations, and cash flows. Our interim condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and accompanying notes for the year ended December 31, 2017, which are included in the 2017 Annual Report, as certain disclosures that would substantially duplicate those contained in the audited consolidated financial statements have not been included in this Report. Operating results for interim periods are not necessarily indicative of operating results for an entire year.

CPA:18 – Global 6/30/2018 10-Q– 7

Notes to Condensed Consolidated Financial Statements (Unaudited)

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and the disclosure of contingent amounts in our condensed consolidated financial statements and the accompanying notes. Actual results could differ from those estimates.

Basis of Consolidation

Our condensed consolidated financial statements reflect all of our accounts, including those of our controlled subsidiaries. The portions of equity in consolidated subsidiaries that are not attributable, directly or indirectly, to us are presented as noncontrolling interests. All significant intercompany accounts and transactions have been eliminated.

When we obtain an economic interest in an entity, we evaluate the entity to determine if it should be deemed a variable interest entity, or VIE, and, if so, whether we are the primary beneficiary and are therefore required to consolidate the entity. We apply accounting guidance for consolidation of VIEs to certain entities in which the equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. Fixed price purchase and renewal options within a lease, as well as certain decision-making rights within a loan or joint-venture agreement, can cause us to consider an entity a VIE. Limited partnerships and other similar entities that operate as a partnership will be considered VIEs unless the limited partners hold substantive kick-out rights or participation rights. Significant judgment is required to determine whether a VIE should be consolidated. We review the contractual arrangements provided for in the partnership agreement or other related contracts to determine whether the entity is considered a VIE and to establish whether we have any variable interests in the VIE. We then compare our variable interests, if any, to those of the other variable interest holders to determine which party is the primary beneficiary of the VIE based on whether the entity (i) has the power to direct the activities that most significantly impact the economic performance of the VIE and (ii) has the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. The liabilities of these VIEs are non-recourse to us and can only be satisfied from each VIE’s respective assets.

At June 30, 2018, we considered 16 entities to be VIEs, 15 of which we consolidated as we are considered the primary beneficiary. At December 31, 2017, we considered 12 entities to be VIEs, 11 of which we consolidated. The following table presents a summary of selected financial data of the consolidated VIEs included in the condensed consolidated balance sheets (in thousands):

	June 30, 2018			December 31, 2017
Real estate — Land, buildings and improvements	$	370,439		$	373,954
Real estate under construction	171,872			107,732
In-place lease intangible assets	87,185			88,617
Other intangible assets	17,536			18,040
Accumulated depreciation and amortization	(61,354		)	(54,592		)
Cash and cash equivalents	10,585			5,030
Accounts receivable and other assets, net	34,167			33,219
Total assets	630,430			572,000
Non-recourse mortgages, net	$	255,406		$	218,267
Bonds payable, net	60,945			60,577
Accounts payable, accrued expenses and other liabilities	52,637			46,858
Total liabilities	368,988			325,702

At both June 30, 2018 and December 31, 2017, we hadone unconsolidated VIE, which we account for under the equity method of accounting. We do not consolidate this entity because we are not the primary beneficiary and the nature of our involvement in the activities of the entity allows us to exercise significant influence on, but does not give us power over, decisions that significantly affect the economic performance of the entity. As of June 30, 2018 and December 31, 2017, the net carrying amount of this equity investment was $19.6 million and $20.9 million, respectively, and our maximum exposure to loss in this entity is limited to our investment. 

CPA:18 – Global 6/30/2018 10-Q– 8

Notes to Condensed Consolidated Financial Statements (Unaudited)

At times, the carrying value of our equity investment may fall below zero for certain investments. We intend to fund our share of the jointly owned investment’s future operating deficits should the need arise. However, we have no legal obligation to pay for any of the liabilities of such investments nor do we have any legal obligation to fund the operating deficits. At both June 30, 2018 and December 31, 2017, our sole equity investment did not have a carrying value below zero.

Accounting Policy Update

Distributions from Equity Method Investments — We classify distributions received from equity method investments using the cumulative earnings approach. Distributions received are considered returns on the investment and classified as cash inflows from operating activities. If, however, the investor’s cumulative distributions received, less distributions received in prior periods determined to be returns of investment, exceeds cumulative equity in earnings recognized, the excess is considered a return of investment and is classified as cash inflows from investing activities.

Reclassifications 

Certain prior period amounts have been reclassified to conform to the current period presentation.

In the second quarter of 2018, we reclassified notes receivable, equity investment in real estate, and goodwill to be included within Accounts receivable and other assets, net in our condensed consolidated balance sheets. Additionally, we reclassified deferred income taxes to be included within Accounts payable, accrued expenses and other liabilities in our condensed consolidated balance sheets. Prior period balances have been reclassified to conform to the current period presentation.

The following table presents a summary of amounts included in Accounts receivable and other assets, net in the condensed consolidated financial statements (in thousands):

	June 30, 2018		December 31, 2017
Accounts receivable and other assets, net
Notes receivable (Note 5)	$	63,954	$	66,500
Accounts receivable, net	33,249		32,572
Goodwill (Note 6)	27,562		26,084
Restricted cash	23,706		19,115
Equity investment in real estate (Note 4)	19,594		20,919
Prepaid expenses	14,484		13,496
Other assets	21,693		18,792
	$	204,242	$	197,478

The following table presents a summary of amounts included in Accounts payable, accrued expenses and other liabilities in the condensed consolidated financial statements (in thousands):

	June 30, 2018		December 31, 2017
Accounts payable, accrued expenses and other liabilities
Deferred income taxes	$	61,619	$	63,980
Accounts payable and accrued expenses	40,769		39,626
Deferred revenue	13,622		11,975
Intangible liabilities, net (Note 6)	10,393		11,009
Other liabilities	23,405		21,441
	$	149,808	$	148,031

CPA:18 – Global 6/30/2018 10-Q– 9

Notes to Condensed Consolidated Financial Statements (Unaudited)

Restricted Cash — In connection with our adoption of Accounting Standards Update, or ASU, 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, as described below, we revised our condensed consolidated statements of cash flows to include restricted cash when reconciling the beginning-of-period and end-of-period cash amounts shown on the statement of cash flows. As a result, we retrospectively revised prior periods presented to conform to the current period presentation. Restricted cash primarily consists of security deposits and amounts required to be reserved pursuant to lender agreements for debt service, capital improvements, and real estate taxes. The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the condensed consolidated balance sheets to the condensed consolidated statements of cash flows (in thousands):

	June 30, 2018		December 31, 2017
Cash and cash equivalents	$	90,971	$	71,068
Restricted cash (a)	23,706		19,115
Total cash and cash equivalents and restricted cash	$	114,677	$	90,183

__________

(a) Restricted cash is included within Accounts receivable and other assets, net on our condensed consolidated balance sheets.

Recent Accounting Pronouncements

Pronouncements Adopted as of June 30, 2018

In May 2014, the Financial Accounting Standards Board, or FASB, issued ASU2014-09, Revenue from Contracts with Customers (Topic 606). ASU 2014-09 is a comprehensive new revenue recognition model requiring a company to recognize revenue to depict the transfer of goods or services to a customer at an amount reflecting the consideration it expects to receive in exchange for those goods or services. ASU 2014-09 does not apply to our lease revenues, which constitute a majority of our revenues, but will primarily apply to revenues generated from our operating properties. We adopted this guidance for our interim and annual periods beginning January 1, 2018 using the modified retrospective transition method applied to any contracts not completed as of that date. There were no changes to the prior period presentations of revenue. Results of operations for reporting periods beginning January 1, 2018 are presented under Topic 606. The adoption of Topic 606 did not have a material impact on our condensed consolidated financial statements.

Revenue is recognized when, or as, control of promised goods or services is transferred to customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. At contract inception, we assess the services promised in our contracts with customers and identify a performance obligation for each promise to transfer to the customer a good or service (or bundle of goods or services) that is distinct. To identify the performance obligations, we consider all of the services promised in the contract regardless of whether they are explicitly stated or are implied by customary business practices.

In January 2016, the FASB issued ASU 2016-01, Financial Instruments — Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. ASU 2016-01 requires all equity investments (other than those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value, with changes in the fair value recognized through net income. We adopted this guidance for our interim and annual periods beginning January 1, 2018. The adoption of ASU 2016-01 did not have a material impact on our condensed consolidated financial statements.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. ASU 2016-15 intends to reduce diversity in practice for certain cash flow classifications, including, but not limited to (i) debt prepayment or debt extinguishment costs, (ii) contingent consideration payments made after a business combination, (iii) proceeds from the settlement of insurance claims, and (iv) distributions received from equity method investees. We retrospectively adopted this guidance for our interim and annual periods beginning January 1, 2018. The adoption of ASU 2016-15 did not have a material impact on our condensed consolidated financial statements.

CPA:18 – Global 6/30/2018 10-Q– 10

Notes to Condensed Consolidated Financial Statements (Unaudited)

In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. ASU 2016-18 intends to reduce diversity in practice for the classification and presentation of changes in restricted cash on the statement of cash flows. ASU 2016-18 requires that the statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. We retrospectively adopted this guidance for our interim and annual periods beginning January 1, 2018. See Restricted Cash above for additional information.

In February 2017, the FASB issued ASU 2017-05, Other Income — Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets. ASU 2017-05 clarifies the scope and application of Accounting Standards Codification, or ASC, 610-20 on the sale or transfer of nonfinancial assets and in substance nonfinancial assets to non-customers, including partial sales. Nonfinancial assets within the scope of this Subtopic include the sale of land, buildings and intangible assets. ASU 2017-05 further clarifies that a financial asset is within the scope of Subtopic 610-20 if it meets the definition of an in substance nonfinancial asset. The amendments define the term “in substance nonfinancial asset,” in part, as a financial asset promised to a counterparty in a contract if substantially all of the fair value of the assets (recognized and unrecognized) that are promised to the counterparty in the contract is concentrated in nonfinancial assets. This amendment also clarifies that nonfinancial assets within the scope of Subtopic 610-20 may include nonfinancial assets transferred within a legal entity to a counterparty. For example, a parent company may transfer control of nonfinancial assets by transferring ownership interests in a consolidated subsidiary. We adopted this guidance for our interim and annual periods beginning January 1, 2018 and applied the modified retrospective transition method (applicable to any contracts not completed as of that date). The adoption of ASU 2017-05 did not have a material impact on our condensed consolidated financial statements.

Pronouncements to be Adopted after June 30, 2018

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 modifies the principles for the recognition, measurement, presentation, and disclosure of leases for both parties to a contract, the lessee and the lessor. ASU 2016-02 provides new guidelines that change the accounting for leasing arrangements for lessees, whereby their rights and obligations under substantially all leases, existing and new, would be capitalized and recorded on the balance sheet. For lessors, however, the accounting remains largely equivalent to the current model, with the distinction between operating, sales-type, and direct financing leases retained, but updated to align with certain changes to the lessee model and the new revenue recognition standard. ASU 2016-02 also replaces existing sale-leaseback guidance with a new model that requires symmetrical accounting between the seller-lessee and buyer-lessor. Additionally, ASU 2016-02 requires lessors to record costs paid directly by a lessee on behalf of a lessor (e.g., real estate taxes and insurance costs) on a gross basis and will require extensive quantitative and qualitative disclosures.

Early application is permitted for all entities. ASU 2016-02 provides two transition methods. The first transition method allows for application of the new model at the beginning of the earliest comparative period presented. Under the second transition method, comparative periods would not be restated, with any cumulative effect adjustments recognized in the opening balance of retained earnings in the period of adoption. In addition, a practical expedient was recently issued by the FASB, which allows lessors to combine non-lease components with related lease components if certain conditions are met. Further, in March 2018, the FASB approved, but has not yet finalized or issued, an update to allow lessors to make a policy election to record certain costs (e.g., insurance) paid directly by the lessee net, if the uncertainty regarding these variable amounts is not expected to ultimately be resolved. We will adopt this guidance for our interim and annual periods beginning January 1, 2019 and expect to use the second transition method. ASU 2016-02 is expected to impact our condensed consolidated financial statements as we have certain operating office and land lease arrangements for which we are the lessee and also certain lease arrangements that include common area maintenance services (non-lease components) where we are the lessor. We are evaluating the impact of ASU 2016-02 and have not yet determined if it will have a material impact on our business or our condensed consolidated financial statements.

CPA:18 – Global 6/30/2018 10-Q– 11

Notes to Condensed Consolidated Financial Statements (Unaudited)

In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses. ASU 2016-13 introduces a new model for estimating credit losses based on current expected credit losses for certain types of financial instruments, including loans receivable, held-to-maturity debt securities, and net investments in direct financing leases, amongst other financial instruments. ASU 2016-13 also modifies the impairment model for available-for-sale debt securities and expands the disclosure requirements regarding an entity’s assumptions, models, and methods for estimating the allowance for losses. ASU 2016-13 will be effective for public business entities in fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, with early application of the guidance permitted. We are in the process of evaluating the impact of adopting ASU 2016-13 on our condensed consolidated financial statements.

In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. ASU 2017-12 will make more financial and nonfinancial hedging strategies eligible for hedge accounting. It also amends the presentation and disclosure requirements and changes how companies assess hedge effectiveness. It is intended to more closely align hedge accounting with companies’ risk management strategies, simplify the application of hedge accounting, and increase transparency as to the scope and results of hedging programs. ASU 2017-12 will be effective in fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. We are in the process of evaluating the impact of adopting ASU 2017-12 on our condensed consolidated financial statements, and will adopt the standard for the fiscal year beginning January 1, 2019.

Note 3. Agreements and Transactions with Related Parties

Transactions with Our Advisor

We have an advisory agreement with our Advisor whereby our Advisor performs certain services for us under a fee arrangement, including the identification, evaluation, negotiation, purchase, and disposition of real estate and related assets and mortgage loans; day-to-day management; and the performance of certain administrative duties. We also reimburse our Advisor for general and administrative duties performed on our behalf. The advisory agreement has a term of one year and may be renewed for successive one-year periods. We may terminate the advisory agreement upon 60 days’ written notice without cause or penalty.

The following tables present a summary of fees we paid, expenses we reimbursed, and distributions we made to our Advisor and other affiliates (which excludes the annual distribution and shareholder servicing fee that impacts equity as further disclosed below the tables), in accordance with the terms of the relevant agreements (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018			2017
Amounts Included in the Condensed Consolidated Statements of Operations
Asset management fees	$	3,151	$	2,767	$	6,025		$	5,476
Available Cash Distributions	2,830		2,186		4,735			3,861
Personnel and overhead reimbursements	716		787		1,433			1,569
Director compensation	40		53		80			105
Interest expense on deferred acquisition fees, affiliate loan, and accretion of interest on annual distribution and shareholder servicing fee (a)	20		319		(42		)	620
	$	6,757	$	6,112	$	12,231		$	11,631
Advisor Fees Capitalized
Current acquisition fees	$	2,379	$	—	$	3,100		$	1,393
Deferred acquisition fees	1,903		—		2,480			1,114
Capitalized personnel and overhead reimbursements	259		2		371			184
	$	4,541	$	2	$	5,951		$	2,691

__________

(a) For the three and six months ended June 30, 2018 interest on the annual distribution and shareholder servicing fee is excluded as it is paid directly to selected dealers rather than through Carey Financial LLC, or Carey Financial, as discussed further below.

CPA:18 – Global 6/30/2018 10-Q– 12

Notes to Condensed Consolidated Financial Statements (Unaudited)

The following table presents a summary of amounts included in Due to affiliates in the condensed consolidated financial statements (in thousands):

	June 30, 2018		December 31, 2017
Due to Affiliates
Deferred acquisition fees, including accrued interest	$	5,786	$	6,693
Accounts payable and other	3,316		6,102
Current acquisition fees	1,652		—
Asset management fees payable	1,026		972
	$	11,780	$	13,767

Loans from WPC

In July 2016, our board of directors and the board of directors of WPC approved unsecured loans from WPC to us, at the sole discretion of WPC’s management, of up to $50.0 million in the aggregate, at a rate equal to the rate at which WPC can borrow funds under its senior credit facility, for acquisition funding purposes.

As of June 30, 2018 and December 31, 2017, we had no loans outstanding to WPC.

Asset Management Fees

Pursuant to the advisory agreement, our Advisor is entitled to an annual asset management fee ranging from 0.5% to 1.5%, depending on the type of investment and based on the average market value or average equity value, as applicable, of our investments. Asset management fees are payable in cash and/or shares of our Class A common stock at our option, after consultation with our Advisor. If our Advisor receives all or a portion of its fees in shares, the number of shares issued is determined by dividing the dollar amount of fees by our most recently published estimated net asset value per share, or NAV, per Class A share, which was $8.57 as of March 31, 2018. For the three and six months ended June 30, 2018 and the year ended December 31, 2017, our Advisor received its asset management fees in shares of our Class A common stock. At June 30, 2018, our Advisor owned 4,327,814 shares, or 3.0%, of our outstanding Class A common stock. Asset management fees are included in Property expenses in the condensed consolidated financial statements.

Annual Distribution and Shareholder Servicing Fee

Through June 30, 2017, Carey Financial, the wholly-owned subsidiary of our Advisor that was a registered broker-dealer, was entitled to receive an annual distribution and shareholder servicing fee from us in connection with our Class C common stock, which it may have re-allowed to selected dealers. Beginning with the payment for the third quarter of 2017 (paid during the first month of the fourth quarter of 2017) the annual distribution and shareholder servicing fees are paid directly to selected dealers rather than through Carey Financial. The amount of the annual distribution and shareholder servicing fee is 1.0% of the most recently published NAV of our Class C common stock. The annual distribution and shareholder servicing fee accrues daily and is payable quarterly in arrears. We will no longer incur the annual distribution and shareholder servicing fee beginning on the date at which, in the aggregate, underwriting compensation from all sources reaches 10.0% of the gross proceeds from our initial public offering, which it had not yet reached as of June 30, 2018. At June 30, 2018 and December 31, 2017, we recorded a liability of $4.8 million and $5.7 million, respectively, within Accounts payable, accrued expenses and other liabilities in the condensed consolidated financial statements.

CPA:18 – Global 6/30/2018 10-Q– 13

Notes to Condensed Consolidated Financial Statements (Unaudited)

Acquisition and Disposition Fees

Our Advisor receives acquisition fees, a portion of which is payable upon acquisition, while the remaining portion is subordinated to a preferred return of a non-compounded cumulative distribution of 5.0% per annum (based initially on our invested capital). The initial acquisition fee and subordinated acquisition fee are 2.5% and 2.0%, respectively, of the aggregate total cost of our portion of each investment for all investments, other than those in readily marketable real estate securities purchased in the secondary market, for which our Advisor will not receive any acquisition fees. Deferred acquisition fees are scheduled to be paid in three equal annual installments following the quarter in which a property was purchased and are subject to the preferred return described above. The preferred return was achieved as of the periods ended June 30, 2018 and December 31, 2017. Unpaid installments of deferred acquisition fees are included in Due to affiliates in the condensed consolidated financial statements and bear interest at an annual rate of 2.0%. The cumulative total acquisition costs, including acquisition fees paid to the advisor, may not exceed 6.0% of the aggregate contract purchase price of all investments, which is measured at the end of each year. During the year ended December 31, 2017, we overpaid acquisition fees to our Advisor totaling $0.7 million, and as a result, we recorded a reimbursement receivable from our Advisor for this amount and included it within Accounts receivable and other assets, net in our condensed consolidated financial statements. This amount was repaid to us during the period ended June 30, 2018.

In addition, our Advisor may be entitled to receive a disposition fee equal to the lesser of (i) 50.0% of the competitive real estate commission (as defined in the advisory agreement) or (ii) 3.0% of the contract sales price of the investment being sold. These fees are paid at the discretion of our board of directors.

Personnel and Overhead Reimbursements

Under the terms of the advisory agreement, our Advisor allocates a portion of its personnel and overhead expenses to us and the other entities that are managed by WPC and its affiliates, including Corporate Property Associates 17 – Global, Carey Watermark Investors Incorporated, Carey Watermark Investors 2 Incorporated, and Carey European Housing Fund I L.P., which are collectively referred to as the Managed Programs. Our Advisor also allocated a portion of its personnel and overhead expenses to Carey Credit Income Fund (now known as Guggenheim Credit Income Fund) prior to September 11, 2017, which was the effective date of its resignation as the advisor to that fund. Our Advisor allocates these expenses to us on the basis of our trailing four quarters of reported revenues in comparison to those of WPC and other entities managed by WPC and its affiliates.

We reimburse our Advisor for various expenses it incurs in the course of providing services to us. We reimburse certain third-party expenses paid by our Advisor on our behalf, including property-specific costs, professional fees, office expenses, and business development expenses. In addition, we reimburse our Advisor for the allocated costs of personnel and overhead in managing our day-to-day operations, including accounting services, stockholder services, corporate management, and property management and operations. We do not reimburse our Advisor for the cost of personnel if these personnel provide services for transactions for which our Advisor receives a transaction fee, such as for acquisitions and dispositions. Under the advisory agreement, the amount of applicable personnel costs allocated to us is capped at 1.0% and 2.0% for 2018 and 2017, respectively, of pro rata lease revenues for each year. Costs related to our Advisor’s legal transactions group are based on a schedule of expenses relating to services performed for different types of transactions, such as financing, lease amendments, and dispositions, among other categories, and includes 0.25% of the total investment cost of an acquisition. In general, personnel and overhead reimbursements are included in General and administrative expenses in the condensed consolidated financial statements. However, we capitalize certain of the costs related to our Advisor’s legal transactions group if the costs relate to a transaction that is not considered to be a business combination.

Excess Operating Expenses

Our Advisor is obligated to reimburse us for the amount by which our operating expenses exceeds the “2%/25% guidelines” (the greater of 2% of average invested assets or 25% of net income) as defined in the advisory agreement for any 12-month period, subject to certain conditions. For the most recent trailing four quarters, our operating expenses were below this threshold.

CPA:18 – Global 6/30/2018 10-Q– 14

Notes to Condensed Consolidated Financial Statements (Unaudited)

Available Cash Distributions

WPC’s interest in the Operating Partnership entitles it to receive distributions of up to 10.0% of the available cash generated by the Operating Partnership, referred to as the Available Cash Distribution, which is defined as cash generated from operations, excluding capital proceeds, as reduced by operating expenses and debt service, excluding prepayments and balloon payments. Available Cash Distributions are included in Net income attributable to noncontrolling interests in the condensed consolidated financial statements.

Jointly Owned Investments and Other Transactions with our Affiliates

At June 30, 2018, we owned interests ranging from 50% to 99% in jointly owned investments, with the remaining interests held by affiliates or by third parties. We consolidate all of these joint ventures with exception to our sole equity investment (Note 4), which we account for under the equity method of accounting. Additionally, no other parties hold any rights that overcome our control. We account for the minority share of these investments as noncontrolling interests.

Note 4. Real Estate, Operating Real Estate, Real Estate Under Construction, and Equity Investment in Real Estate

Real Estate — Land, Buildings and Improvements

Real estate, which consists of land and buildings leased to others, and which are subject to operating leases, is summarized as follows (in thousands):

	June 30, 2018			December 31, 2017
Land	$	204,198		$	202,500
Buildings and improvements	1,070,825			1,060,672
Less: Accumulated depreciation	(101,331		)	(87,886		)
	$	1,173,692		$	1,175,286

During the six months ended June 30, 2018, the U.S. dollar strengthened against the euro, as the end-of-period rate for the U.S. dollar in relation to the euro decreased by 2.8% to $1.1658 from $1.1993. As a result, the carrying value of our Real estate — land, buildings and improvements decreased by $17.5 million from December 31, 2017 to June 30, 2018.

Depreciation expense, including the effect of foreign currency translation, on our real estate was $7.9 million and $6.7 million for the three months ended June 30, 2018 and 2017, respectively, and $15.8 million and $13.0 million for the six months ended June 30, 2018 and 2017, respectively.

Operating Real Estate — Land, Buildings and Improvements

Operating real estate, which consists of our self-storage and multi-family properties, is summarized as follows (in thousands):

	June 30, 2018			December 31, 2017
Land	$	98,432		$	98,429
Buildings and improvements	470,169			468,060
Less: Accumulated depreciation	(52,409		)	(43,786		)
	$	516,192		$	522,703

Depreciation expense on our operating real estate was $4.3 million and $4.5 million for the three months ended June 30, 2018 and 2017, respectively, and $8.7 million and $8.9 million for the six months ended June 30, 2018 and 2017, respectively.

CPA:18 – Global 6/30/2018 10-Q– 15

Notes to Condensed Consolidated Financial Statements (Unaudited)

Real Estate Under Construction

The following table provides the activity of our Real estate under construction (in thousands):

	Six Months Ended June 30, 2018
Beginning balance	$	134,366
Capitalized funds	87,646
Placed into service	(25,900		)
Foreign currency translation adjustments	(3,498		)
Capitalized interest	2,508
Ending balance	$	195,122

Capitalized Funds

We entered into the following build-to-suit investments during the six months ended June 30, 2018 (amounts based on the exchange rate of the euro on the date of acquisition):

• $10.5 million to enter into a build-to-suit joint venture with a third party for a student-housing development site located in Barcelona, Spain on March 8, 2018. We acquired 99% of the equity in this investment at closing. This property is under construction and is currently projected to be completed in September 2019, at which point our total investment is expected to be approximately $28.5 million. Since we are responsible for substantially all of the economics but we proportionally have less voting rights, this investment is considered to be a VIE that we consolidate (Note 2);

• $9.3 million to enter into a build-to-suit joint venture with a third party for a student-housing development site located in Coimbra, Portugal on June 11, 2018. We acquired 99% of the equity in this investment at closing. This property is under construction and is currently projected to be completed in September 2019, at which point our total investment is expected to be approximately $26.3 million. Since we are responsible for substantially all of the economics but we proportionally have less voting rights, this investment is considered to be a VIE that we consolidate (Note 2);

• $13.1 million to enter into a build-to-suit project for a student-housing development site located in San Sebastian, Spain on June 14, 2018. This property is under construction and is currently projected to be completed in September 2020, at which point our total investment is expected to be approximately $36.7 million. As there is insufficient equity at risk, the investment is considered to be a VIE (Note 2); and

• $13.1 million to enter into a build-to-suit project for a student-housing development site located in Barcelona, Spain on June 25, 2018. This property is under construction and is currently projected to be completed in September 2020, at which point our total investment is expected to be approximately $31.7 million. As there is insufficient equity at risk, the investment is considered to be a VIE (Note 2).

Ghana — On February 19, 2016, we entered into a build-to-suit joint venture with a third party for a university complex development site located in Accra, Ghana. As of June 30, 2018, total capitalized funds related to this investment were $32.5 million, inclusive of accrued construction costs of $0.9 million and the effect of recording deferred tax liabilities of $3.7 million.

At the time of the investment, the joint venture entered into an agreement for third-party financing in an amount up to $41.0 million from the Overseas Private Investment Corporation, or OPIC, a developmental finance institution of the U.S. Government, with an estimated interest rate based on the U.S. Treasury rate plus 300 basis points. The transaction, including the funding of this loan, was subject to the tenant obtaining a letter of credit, which did not occur, and as a result the tenant was in default under its concession agreement with us. Because of the tenant’s default, we terminated the concession agreement in May 2018, and therefore we will not pursue the completion of this project. We are currently pursuing appropriate remedies, including payment from the tenant or through our insurance policy. We had no amounts outstanding under this financing arrangement at June 30, 2018. 

CPA:18 – Global 6/30/2018 10-Q– 16

Notes to Condensed Consolidated Financial Statements (Unaudited)

We have evaluated this investment for impairment and probability-weighted different scenarios in estimating future undiscounted cash flows, including payment from the tenant or through our insurance policy. Because we believe there is a high probability that we will recover the full amount invested, we have not recorded any impairment charge in connection with this investment as of June 30, 2018, although recovery may take additional time. We will continue to monitor this investment for impairment.

During the six months ended June 30, 2018, total capitalized funds primarily related to our build-to-suit projects, which were comprised principally of initial funding of $47.9 million and construction draws of $39.7 million. Capitalized funds include accrued costs of $2.5 million, which is a non-cash investing activity.

Capitalized Interest

Capitalized interest includes amortization of the mortgage discount and deferred financing costs and interest incurred during construction, which totaled $2.5 million during the six months ended June 30, 2018 and is a non-cash investing activity.

Placed into Service

During the six months ended June 30, 2018, a total of $25.9 million was placed into service and reclassified to Real estate — land, buildings and improvements, principally related to the remaining portion of a substantially completed hotel, which is a non-cash investing activity.

Ending Balance

At June 30, 2018, we had eight open build-to-suit projects with aggregate unfunded commitments of approximately $181.7 million, excluding capitalized interest, accrued costs, and capitalized acquisition fees for our Advisor.

Equity Investment in Real Estate

We have an interest in an unconsolidated investment in our Self Storage segment that relates to a joint venture for the development of four self-storage facilities in Canada. This investment is jointly owned with a third party, which is also the general partner. Our ownership interest in the joint venture is 90%. As of June 30, 2018, the joint-venture partner had not purchased its 10% equity interest, which will be funded by the distributions it is eligible to receive upon properties being placed into service. We do not consolidate this entity because we are not the primary beneficiary and the nature of our involvement in the activities of the entity allows us to exercise significant influence but does not give us power over decisions that significantly affect the economic performance of the entity.

At June 30, 2018 and December 31, 2017, our total equity investment balance for these properties was $19.6 million and $20.9 million, respectively, which is included in Accounts receivable and other assets, net in the condensed consolidated financial statements. At June 30, 2018 and December 31, 2017, the joint venture had total third-party recourse debt of $23.3 million and $21.5 million, respectively. At June 30, 2018, the unfunded commitments for the build-to-suit projects totaled approximately $20.2 million.

Note 5. Finance Receivables

Assets representing rights to receive money on demand or at fixed or determinable dates are referred to as finance receivables. Our finance receivables portfolio consists of our notes receivable (which are included in Accounts receivable and other assets, net in the condensed consolidated financial statements) and our Net investments in direct financing leases. Operating leases are not included in finance receivables as such amounts are not recognized as an asset in the condensed consolidated financial statements.

Notes Receivable

Our notes receivable at December 31, 2017 consisted of a $28.0 million mezzanine tranche of 10-year commercial mortgage-backed securities on the Cipriani banquet halls in New York, New York (referred to as Cipriani) and a $38.5 million mezzanine loan collateralized by 27 retail stores in Minnesota, Wisconsin, and Iowa leased to Mills Fleet Farm Group LLC (referred to as Mills Fleet). We have and will continue to receive interest-only payments on each of these loans through maturity in July 2024 and October 2018, respectively.

CPA:18 – Global 6/30/2018 10-Q– 17

Notes to Condensed Consolidated Financial Statements (Unaudited)

During the six months ended June 30, 2018, we received partial repayments for the Mills Fleet mezzanine loan totaling $2.5 million. As a result, the balances for the receivables at June 30, 2018 were $28.0 million and $36.0 million for Cipriani and Mills Fleet, respectively.

Credit Quality of Finance Receivables

We generally invest in facilities that we believe are critical to a tenant’s business and therefore have a lower risk of tenant default. At both June 30, 2018 and December 31, 2017, we had no significant finance receivable balances that were past due and we had not established any allowances for credit losses. Additionally, there were no modifications of finance receivables during the six months ended June 30, 2018. We evaluate the credit quality of our finance receivables utilizing an internal five-point credit rating scale, with one representing the highest credit quality and five representing the lowest. The credit quality evaluation of our finance receivables is updated quarterly.

A summary of our finance receivables by internal credit quality rating is as follows (dollars in thousands):

	Number of Tenants/Obligors at		Carrying Value at
Internal Credit Quality Indicator	June 30, 2018	December 31, 2017	June 30, 2018		December 31, 2017
1	—	—	$	—	$	—
2	2	2	15,738		14,386
3	2	2	29,734		29,716
4	2	2	60,130		62,355
5	—	—	—		—
	0		$	105,602	$	106,457

Note 6. Intangible Assets and Liabilities

In-place lease intangibles are included in In-place lease intangible assets in the condensed consolidated financial statements. Below-market ground lease intangibles and above-market rent intangibles are included in Other intangible assets in the condensed consolidated financial statements. Below-market rent intangibles and above-market ground lease intangibles are included in Accounts payable, accrued expenses and other liabilities in the condensed consolidated financial statements.

The following table presents a reconciliation of our goodwill, which is included in our Net Lease segment and included in Accounts receivable and other assets, net in the condensed consolidated financial statements (in thousands):

	Six Months Ended June 30, 2018
Balance at January 1, 2018	$	26,084
Other	1,629
Foreign currency translation	(151		)
Balance at June 30, 2018	$	27,562

CPA:18 – Global 6/30/2018 10-Q– 18

Notes to Condensed Consolidated Financial Statements (Unaudited)

Intangible assets and liabilities are summarized as follows (in thousands):

		June 30, 2018									December 31, 2017
	Amortization Period (Years)	Gross Carrying Amount			Accumulated Amortization			Net Carrying Amount			Gross Carrying Amount			Accumulated Amortization			Net Carrying Amount
Finite-Lived Intangible Assets
In-place lease	4 - 23	$	270,957		$	(123,210	)	$	147,747		$	274,723		$	(115,515	)	$	159,208
Below-market ground lease	30 - 99	22,362			(1,538		)	20,824			23,000			(1,238		)	21,762
Above-market rent	4 - 30	12,605			(4,100		)	8,505			12,811			(3,642		)	9,169
		305,924			(128,848		)	177,076			310,534			(120,395		)	190,139
Indefinite-Lived Intangible Assets
Goodwill		27,562			—			27,562			26,084			—			26,084
Total intangible assets		$	333,486		$	(128,848	)	$	204,638		$	336,618		$	(120,395	)	$	216,223
Finite-lived Intangible Liabilities
Below-market rent	5 - 30	$	(15,423	)	$	5,133		$	(10,290	)	$	(15,476	)	$	4,573		$	(10,903	)
Above-market ground lease	81	(108		)	5			(103		)	(110		)	4			(106		)
Total intangible liabilities		$	(15,531	)	$	5,138		$	(10,393	)	$	(15,586	)	$	4,577		$	(11,009	)

Net amortization of intangibles, including the effect of foreign currency translation, was $4.6 million and $7.5 million for the three months ended June 30, 2018 and 2017, respectively, and $9.9 million and $15.6 million for the six months ended June 30, 2018 and 2017, respectively. Amortization of below-market rent and above-market rent intangibles is recorded as an adjustment to Rental income, amortization of below-market and above-market ground lease intangibles is included in Property expenses, and amortization of in-place lease intangibles is included in Depreciation and amortization expense in the condensed consolidated financial statements.

Note 7. Fair Value Measurements

The fair value of an asset is defined as the exit price, which is the amount that would either be received when an asset is sold or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The guidance establishes a three-tier fair value hierarchy based on the inputs used in measuring fair value. These tiers are: Level 1, for which quoted market prices for identical instruments are available in active markets, such as money market funds, equity securities, and U.S. Treasury securities; Level 2, for which there are inputs other than quoted prices included within Level 1 that are observable for the instrument, such as certain derivative instruments including interest rate caps, interest rate swaps, foreign currency forward contracts and foreign currency collars; and Level 3, for securities that do not fall into Level 1 or Level 2 and for which little or no market data exists, therefore requiring us to develop our own assumptions.

Items Measured at Fair Value on a Recurring Basis

The methods and assumptions described below were used to estimate the fair value of each class of financial instrument. For significant Level 3 items, we have also provided the unobservable inputs.

Derivative Assets — Our derivative assets, which are included in Accounts receivable and other assets, net in the condensed consolidated financial statements, are comprised of foreign currency forward contracts, interest rate swaps, interest rate caps, and foreign currency collars (Note 8). These derivative instruments were measured at fair value using readily observable market inputs, such as quotations on interest rates, and were classified as Level 2 as these instruments are custom, over-the-counter contracts with various bank counterparties that are not traded in an active market.

CPA:18 – Global 6/30/2018 10-Q– 19

Notes to Condensed Consolidated Financial Statements (Unaudited)

Derivative Liabilities — Our derivative liabilities, which are included in Accounts payable, accrued expenses and other liabilities in the condensed consolidated financial statements, are comprised of interest rate swaps and foreign currency collars (Note 8). These derivative instruments were measured at fair value using readily observable market inputs, such as quotations on interest rates, and were classified as Level 2 because they are custom, over-the-counter contracts with various bank counterparties that are not traded in an active market.

Rent Guarantees — Our rent guarantees, which are included in Accounts receivable and other assets, net in the condensed consolidated financial statements, are related to two of our international investments. These rent guarantees were measured at fair value using a discounted cash flow model, and were classified as Level 3 because the model uses unobservable inputs. At both June 30, 2018 and December 31, 2017, our rent guarantees had a fair value of $0.7 million. We determined the fair value of the rent guarantees based on an estimate of discounted cash flows using a discount rate that ranged from 7% to 9% and a growth rate that ranged from 1% to 2%, which are considered significant unobservable inputs. Significant increases or decreases to these inputs in isolation would result in a significant change in the fair value measurement. During the three and six months ended June 30, 2018, we recognized $0.5 million and $0.6 million, respectively, of mark-to-market gains related to these rent guarantees within Other income and expenses on our condensed consolidated financial statements. During the three and six months ended June 30, 2017, we recognized $0.4 million and $0.5 million, respectively, of mark-to-market gains related to these rent guarantees within Other income and expenses on our condensed consolidated financial statements.

We did not have any transfers into or out of Level 1, Level 2, and Level 3 measurements during the three and six months ended June 30, 2018 and 2017. Gains and losses (realized and unrealized) recognized on items measured at fair value on a recurring basis included in earnings are reported within Other gains and (losses) on our condensed consolidated financial statements.

Our other financial instruments had the following carrying values and fair values as of the dates shown (dollars in thousands):

		June 30, 2018				December 31, 2017
	Level	Carrying Value		Fair Value		Carrying Value		Fair Value
Debt, net (a) (b)	3	$	1,370,526	$	1,387,730	$	1,275,448	$	1,301,844
Notes receivable (c) (d)	3	63,954		66,454		66,500		69,000

___________

(a) Debt, net consists of Non-recourse mortgages, net and Bonds payable, net. At June 30, 2018 and December 31, 2017, the carrying value of Non-recourse mortgages, net includes unamortized deferred financing costs of $7.5 million and $7.0 million, respectively. At both June 30, 2018 and December 31, 2017, the carrying value of Bonds payable, net includes unamortized deferred financing costs of $0.8 million (Note 9).

(b) We determined the estimated fair value of our Non-recourse mortgages, net and Bonds payable, net using a discounted cash flow model that estimates the present value of the future loan payments by discounting such payments at current estimated market interest rates. The estimated market interest rates take into account interest rate risk and the value of the underlying collateral, which includes quality of the collateral, the credit quality of the tenant/obligor, and the time until maturity.

(c) We determined the estimated fair value of our Notes receivable using a discounted cash flow model with rates that take into account the credit of the tenant/obligor, order of payment tranches, and interest rate risk. We also considered the value of the underlying collateral, taking into account the quality of the collateral, the credit quality of the tenant/obligor, the time until maturity, and the current market interest rate.

(d) During the six months ended June 30, 2018, we received partial repayments for the Mills Fleet mezzanine loan totaling $2.5 million. As a result, the balances for the notes receivable at June 30, 2018 were $28.0 million and $36.0 million for Cipriani and Mills Fleet, respectively (Note 5).

We estimated that our other financial assets and liabilities (excluding net investments in direct financing leases) had fair values that approximated their carrying values at both June 30, 2018 and December 31, 2017.

CPA:18 – Global 6/30/2018 10-Q– 20

Notes to Condensed Consolidated Financial Statements (Unaudited)

Note 8. Risk Management and Use of Derivative Financial Instruments

Risk Management

In the normal course of our ongoing business operations, we encounter economic risk. There are four main components of economic risk that impact us: interest rate risk, credit risk, market risk, and foreign currency risk. We are primarily subject to interest rate risk on our interest-bearing liabilities. Credit risk is the risk of default on our operations and our tenants’ inability or unwillingness to make contractually required payments. Market risk includes changes in the value of our properties and related loans, as well as changes in the value of our other investments due to changes in interest rates or other market factors. We own international investments, primarily in Europe, and are subject to risks associated with fluctuating foreign currency exchange rates.

Derivative Financial Instruments

When we use derivative instruments, it is generally to reduce our exposure to fluctuations in interest rates and foreign currency exchange rate movements. We have not entered into, and do not plan to enter into financial instruments for trading or speculative purposes. In addition to entering into derivative instruments on our own behalf, we may also be a party to derivative instruments that are embedded in other contracts. The primary risks related to our use of derivative instruments include: (i) a counterparty to a hedging arrangement defaulting on its obligation and (ii) a downgrade in the credit quality of a counterparty to such an extent that our ability to sell or assign our side of the hedging transaction is impaired. While we seek to mitigate these risks by entering into hedging arrangements with large financial institutions that we deem to be creditworthy, it is possible that our hedging transactions, which are intended to limit losses, could adversely affect our earnings. Furthermore, if we terminate a hedging arrangement, we may be obligated to pay certain costs, such as transaction or breakage fees. We have established policies and procedures for risk assessment, as well as the approval, reporting, and monitoring of derivative financial instrument activities.

We measure derivative instruments at fair value and record them as assets or liabilities, depending on our rights or obligations under the applicable derivative contract. Derivatives that are not designated as hedges must be adjusted to fair value through earnings. For a derivative designated, and that qualified, as a cash flow hedge, the effective portion of the change in fair value of the derivative is recognized in Other comprehensive (loss) income until the hedged item is recognized in earnings. For a derivative designated, and that qualified, as a net investment hedge, the effective portion of the change in its fair value and/or the net settlement of the derivative is reported in Other comprehensive (loss) income as part of the cumulative foreign currency translation adjustment. The ineffective portion of the change in fair value of any derivative is immediately recognized in earnings.

All derivative transactions with an individual counterparty are governed by a master International Swap and Derivatives Association agreement, which can be considered as a master netting arrangement; however, we report all our derivative instruments on a gross basis on our condensed consolidated financial statements. At both June 30, 2018 and December 31, 2017, no cash collateral had been posted or received for any of our derivative positions.

CPA:18 – Global 6/30/2018 10-Q– 21

Notes to Condensed Consolidated Financial Statements (Unaudited)

The following table sets forth certain information regarding our derivative instruments (in thousands):

Derivatives Designated as Hedging Instruments	Balance Sheet Location	Asset Derivatives Fair Value at				Liability Derivatives Fair Value at
		June 30, 2018		December 31, 2017		June 30, 2018			December 31, 2017
Foreign currency forward contracts	Accounts receivable and other assets, net	$	2,217	$	2,419	$	—		$	—
Interest rate swaps	Accounts receivable and other assets, net	1,509		553		—			—
Foreign currency collars	Accounts receivable and other assets, net	165		258		—			—
Interest rate caps	Accounts receivable and other assets, net	1		1		—			—
Foreign currency collars	Accounts payable, accrued expenses and other liabilities	—		—		(1,988		)	(3,266		)
Interest rate swaps	Accounts payable, accrued expenses and other liabilities	—		—		(176		)	(698		)
Derivatives Not Designated as Hedging Instruments
Foreign currency collars	Accounts payable, accrued expenses and other liabilities	—		—		—			(366		)
Total		$	3,892	$	3,231	$	(2,164	)	$	(4,330	)

The following tables present the impact of our derivative instruments in the condensed consolidated financial statements (in thousands):

	Amount of Gain (Loss) Recognized on Derivatives in Other Comprehensive (Loss) Income (Effective Portion)
	Three Months Ended June 30,					Six Months Ended June 30,
Derivatives in Cash Flow Hedging Relationships	2018		2017			2018			2017
Foreign currency collars	$	2,626	$	(2,379	)	$	1,421		$	(2,613	)
Foreign currency forward contracts	427		(1,162		)	(202		)	(1,634		)
Interest rate swaps	363		(277		)	1,520			(32		)
Interest rate caps	2		(6		)	20			(2		)
Derivatives in Net Investment Hedging Relationship (a)
Foreign currency collars	80		(23		)	(46		)	(33		)
Foreign currency forward contracts	23		(88		)	—			(107		)
Total	$	3,521	$	(3,935	)	$	2,713		$	(4,421	)

___________

(a) The effective portion of the changes in fair value and the settlement of these contracts is reported in the foreign currency translation adjustment section of Other comprehensive (loss) income until the underlying investment is sold, at which time we reclassify the gain or loss to earnings.

CPA:18 – Global 6/30/2018 10-Q– 22

Notes to Condensed Consolidated Financial Statements (Unaudited)

		Amount of Gain (Loss) on Derivatives Reclassified from Other Comprehensive (Loss) Income into Income (Effective Portion)
Derivatives in Cash Flow Hedging Relationships	Location of Gain (Loss) Recognized in Income	Three Months Ended June 30,						Six Months Ended June 30,
		2018			2017			2018			2017
Foreign currency forward contracts	Other gains and (losses)	$	237		$	334		$	459		$	690
Interest rate swaps	Interest expense	(76		)	(176		)	(159		)	(387		)
Foreign currency collars	Other gains and (losses)	(26		)	77			(180		)	169
Interest rate caps	Interest expense	(8		)	(10		)	(39		)	(15		)
Total		$	127		$	225		$	81		$	457

Amounts reported in Other comprehensive (loss) income related to our interest rate swaps will be reclassified to Interest expense as interest payments are made on our variable-rate debt. Amounts reported in Other comprehensive (loss) income related to foreign currency derivative contracts will be reclassified to Other gains and (losses) when the hedged foreign currency contracts are settled. At June 30, 2018, we estimated that less than $0.1 million and an additional $0.6 million will be reclassified as Interest expense and Other gains and (losses), respectively, during the next 12 months.

The following table presents the impact of our derivative instruments in the condensed consolidated financial statements (in thousands):

		Amount of Gain (Loss) on Derivatives Recognized in Income
Derivatives Not in Cash Flow Hedging Relationships	Location of Gain (Loss) Recognized in Income	Three Months Ended June 30,						Six Months Ended June 30,
		2018			2017			2018			2017
Foreign currency collars	Other gains and (losses)	$	56		$	(25	)	$	(95	)	$	(45	)
Interest rate swaps	Interest expense	(41		)	27			(47		)	(22		)
Derivatives in Cash Flow Hedging Relationships (a)
Foreign currency collars	Other gains and (losses)	(5		)	(5		)	(15		)	(4		)
Interest rate swaps	Interest expense	(1		)	7			5			10
Total		$	9		$	4		$	(152	)	$	(61	)

__________

(a) Relates to the ineffective portion of the hedging relationship.

Interest Rate Swaps and Caps

We are exposed to the impact of interest rate changes primarily through our borrowing activities. To limit this exposure, we attempt to obtain mortgage financing on a long-term, fixed-rate basis. However, from time to time, we or our joint investment partners have obtained, and may in the future obtain, variable-rate non-recourse mortgage loans and, as a result, we have entered into, and may continue to enter into interest rate swap agreements or interest rate cap agreements with counterparties. Interest rate swaps, which effectively convert the variable-rate debt service obligations of a loan to a fixed rate, are agreements in which one party exchanges a stream of interest payments for a counterparty’s stream of cash flow over a specific period. The notional, or face, amount on which the swaps are based is not exchanged. Interest rate caps limit the effective borrowing rate of variable-rate debt obligations while allowing participants to share in downward shifts in interest rates. Our objective in using these derivatives is to limit our exposure to interest rate movements.

CPA:18 – Global 6/30/2018 10-Q– 23

Notes to Condensed Consolidated Financial Statements (Unaudited)

The interest rate swaps and caps that our consolidated subsidiaries had outstanding at June 30, 2018 are summarized as follows (currency in thousands):

Interest Rate Derivatives	Number of Instruments	Notional Amount		Fair Value at June 30, 2018 (a)
Interest rate swaps	9	94,283	USD	$	1,374
Interest rate swap	1	10,025	EUR	(41		)
Interest rate cap	2	11,300	USD	1
				$	1,334

___________

(a) Fair value amount is based on the exchange rate of the euro at June 30, 2018, as applicable.

Foreign Currency Contracts

We are exposed to foreign currency exchange rate movements, primarily in the euro and, to a lesser extent, the Norwegian krone. We manage foreign currency exchange rate movements by generally placing our debt service obligation on an investment in the same currency as the tenant’s rental obligation to us. This reduces our overall exposure to the net cash flow from that investment. However, we are subject to foreign currency exchange rate movements to the extent that there is a difference in the timing and amount of the rental obligation and the debt service. Realized and unrealized gains and losses recognized in earnings related to foreign currency transactions are included in Other gains and (losses) in the condensed consolidated financial statements.

In order to hedge certain of our foreign currency cash flow exposures, we enter into foreign currency forward contracts and collars. A foreign currency forward contract is a commitment to deliver a certain amount of currency at a certain price on a specific date in the future. By entering into forward contracts and holding them to maturity, we are locked into a future currency exchange rate for the term of the contract. A foreign currency collar guarantees that the exchange rate of the currency will not fluctuate beyond the range of the options’ strike prices. Our foreign currency forward contracts and foreign currency collars have maturities of 74 months or less.

The following table presents the foreign currency derivative contracts we had outstanding and their designations at June 30, 2018 (currency in thousands):

Foreign Currency Derivatives	Number of Instruments	Notional Amount		Fair Value at June 30, 2018
Designated as Cash Flow Hedging Instruments
Foreign currency collars	48	31,964	EUR	$	(1,789	)
Foreign currency forward contracts	19	7,375	EUR	1,598
Foreign currency forward contracts	13	20,293	NOK	559
Foreign currency collars	24	49,470	NOK	(79		)
Designated as Net Investment Hedging Instruments
Foreign currency forward contracts	2	4,504	NOK	60
Foreign currency collars	3	16,750	NOK	45
				$	394

Credit Risk-Related Contingent Features

We measure our credit exposure on a counterparty basis as the net positive aggregate estimated fair value of our derivatives, net of any collateral received. No collateral was received as of June 30, 2018. At June 30, 2018, our total credit exposure was $3.1 million and the maximum exposure to any single counterparty was $1.8 million.

CPA:18 – Global 6/30/2018 10-Q– 24

Notes to Condensed Consolidated Financial Statements (Unaudited)

Some of the agreements we have with our derivative counterparties contain cross-default provisions that could trigger a declaration of default on our derivative obligations if we default, or are capable of being declared in default, on certain of our indebtedness. At June 30, 2018, we had not been declared in default on any of our derivative obligations. The estimated fair value of our derivatives in a net liability position was $2.2 million and $4.4 million at June 30, 2018 and December 31, 2017, respectively, which included accrued interest and any nonperformance risk adjustments. If we had breached any of these provisions at June 30, 2018 or December 31, 2017, we could have been required to settle our obligations under these agreements at their aggregate termination value of $2.3 million and $4.5 million, respectively.

Note 9. Debt, net

Debt, net consists of Non-recourse mortgages, net and Bonds payable, net, which are collateralized by the assignment of real estate properties. At June 30, 2018, our debt bore interest at fixed annual rates ranging from 1.6% to 5.8% and variable contractual annual rates ranging from 1.6% to 8.0%, with maturity dates ranging from 2018 to 2039.

Financing Activity During 2018

On May 9, 2018, we obtained a $34.0 million term loan encumbering seven self-storage properties located in Southern California.  The properties were encumbered by a first mortgage loan in the amount of $16.4 million, which was paid in full on the same date using a portion of the proceeds from the term loan.  The term loan bears an annual fixed interest rate of 4.5%, with a term to maturity of three years. We have two options to extend the maturity date, each by an additional year. The principal balance is due at maturity and interest is payable monthly.

On February 13, 2018, we obtained a construction loan of $48.8 million for a student-housing development project located in Portsmouth, United Kingdom (based on the exchange rate of the British pound sterling at the date of acquisition). The loan bears a variable interest rate for outstanding drawn balances, with a term to maturity of 1.8 years and an interest rate of 6.0% as of June 30, 2018. We had drawn $29.1 million on the construction loan (based on the exchange rate of the British pound sterling at the date of each drawdown) as of June 30, 2018.

During the six months ended June 30, 2018, we had additional drawdowns of $14.1 million (based on the exchange rate of the British pound sterling at the date of each drawdown) on a construction loan related to a student-housing development project located in Cardiff, United Kingdom. The loan bears an annual interest rate of 7.5% plus the London Interbank Offered Rate, or LIBOR, for outstanding drawn balances, with a term to maturity of two years. Additionally, we drew down $52.4 million (based on the exchange rate of the euro at the date of drawdown) on the non-recourse mortgage loan for a completed build-to-suit hotel in Munich, Germany. The loan bears an annual interest rate of 2.8%, with a term to maturity of 5.4 years.

Scheduled Debt Principal Payments

Scheduled debt principal payments during the remainder of 2018, each of the next four calendar years following December 31, 2018, and thereafter are as follows (in thousands):

Years Ending December 31,	Total
2018 (remainder)	$	9,084
2019	58,138
2020	124,786
2021	206,022
2022	195,229
Thereafter through 2039	785,278
Total principal payments	1,378,537
Unamortized deferred financing costs	(8,250		)
Unamortized discount, net	239
Total	$	1,370,526

Certain amounts in the table above are based on the applicable foreign currency exchange rate at June 30, 2018.

CPA:18 – Global 6/30/2018 10-Q– 25

Notes to Condensed Consolidated Financial Statements (Unaudited)

The carrying value of our Non-recourse mortgages, net and Bonds payable, net decreased by $13.7 million in the aggregate from December 31, 2017 to June 30, 2018, reflecting the impact of the strengthening of the U.S. dollar relative to certain foreign currencies (primarily the euro) during the same period.

Debt Covenants

As of December 31, 2017, we had repaid a total of $1.8 million (amount is based on the exchange rate of the euro as of the date of repayments) of principal on our Agrokor mortgage loan as a result of a debt service coverage ratio covenant breach. The covenant breach will be cured once the net operating income for the related property exceeds the amount set forth in the related loan agreement. As of June 30, 2018, less than $0.1 million of additional payments have been made on the loan principal. As Agrokor is currently in financial distress, there is uncertainty regarding future rent collections (Note 12) and whether the default can be cured.

As of December 31, 2017, we were in breach of a loan-to-value covenant on one of our bonds payable. On June 14, 2018, we entered into a pledge agreement with the bondholders to cure the covenant breach, pursuant to which we deposited $5.6 million (based on the exchange rate for the Norwegian krone on the date of deposit) in a bank account and granted a first priority interest in, and pledged the account to, the bondholders. The pledge of the account to the bondholders will stay in effect until the loan-to-value ratio is within the threshold set forth in the bond agreement or until the bonds are paid in full. There were no changes to the amounts or timing of scheduled interest and principal payments. The balance in the pledged account, based on the exchange rate as of June 30, 2018, was $5.5 million and is included as restricted cash within Accounts receivable and other assets, net on our condensed consolidated balance sheets.

Note 10. Commitments and Contingencies

At June 30, 2018, we were not involved in any material litigation. Various claims and lawsuits arising in the normal course of business are pending against us. The results of these proceedings are not expected to have a material adverse effect on our consolidated financial position or results of operations. See Note 4 for unfunded construction commitments.

CPA:18 – Global 6/30/2018 10-Q– 26

Notes to Condensed Consolidated Financial Statements (Unaudited)

Note 11. Net (Loss) Income Per Share and Equity

Basic and Diluted (Loss) Income Per Share

The following table presents net (loss) income per share (in thousands, except share and per share amounts):

	Three Months Ended June 30, 2018						Three Months Ended June 30, 2017
	Basic and Diluted Weighted-Average Shares Outstanding	Allocation of Net Loss			Basic and Diluted Net (Loss) Income Per Share		Basic and Diluted Weighted-Average Shares Outstanding	Allocation of Net Income		Basic and Diluted Net Income Per Share
Class A common stock	113,010,970	$	(213	)	$	—	109,533,769	$	4,600	$	0.04
Class C common stock	31,593,597	(121		)	—		31,030,596	1,184		0.04
Net (loss) income attributable to CPA:18 – Global		$	(334	)				$	5,784

	Six Months Ended June 30, 2018					Six Months Ended June 30, 2017
	Basic and Diluted Weighted-Average Shares Outstanding	Allocation of Net Income		Basic and Diluted Net Income Per Share		Basic and Diluted Weighted-Average Shares Outstanding	Allocation of Net Income		Basic and Diluted Net Income Per Share
Class A common stock	112,564,943	$	7,901	$	0.07	108,998,427	$	5,179	$	0.05
Class C common stock	31,517,919	2,092		0.07		30,898,107	1,226		0.04
Net income attributable to CPA:18 – Global		$	9,993				$	6,405

The allocation of Net (loss) income attributable to CPA:18 – Global is calculated based on the basic and diluted weighted-average shares outstanding for Class A and Class C common stock for each respective period. For both the three and six months ended June 30, 2018, the allocation of net (loss) income for our Class A common stock excluded $0.1 million of interest expense related to the accretion of interest on our annual distribution and shareholder servicing fee liability, which is only applicable to our Class C common stock (Note 3). For the three and six months ended June 30, 2017, the allocation of net income for our Class A common stock excluded $0.1 million and $0.2 million, respectively, of interest expense related to the accretion of interest on our annual distribution and shareholder servicing fee liability (Note 3).

Distributions

Distributions are declared at the discretion of our board of directors and are not guaranteed. For the three months ended June 30, 2018, our board of directors declared quarterly distributions of $0.1563 per share for our Class A common stock and $0.1378 per share for our Class C common stock, which was paid on July 16, 2018 to stockholders of record on June 29, 2018, in the amount of $22.0 million.

CPA:18 – Global 6/30/2018 10-Q– 27

Notes to Condensed Consolidated Financial Statements (Unaudited)

Reclassifications Out of Accumulated Other Comprehensive Loss

The following tables present a reconciliation of changes in Accumulated other comprehensive loss by component for the periods presented (in thousands):

	Three Months Ended June 30, 2018
	Gains and (Losses) on Derivative Instruments			Foreign Currency Translation Adjustments			Total
Beginning balance	$	(1,741	)	$	(22,170	)	$	(23,911	)
Other comprehensive loss before reclassifications	3,545			(22,582		)	(19,037		)
Amounts reclassified from accumulated other comprehensive loss to:
Other gains and (losses)	(211		)	—			(211		)
Interest expense	84			—			84
Net current-period other comprehensive loss	3,418			(22,582		)	(19,164		)
Net current-period other comprehensive loss attributable to noncontrolling interests	—			2,326			2,326
Ending balance	$	1,677		$	(42,426	)	$	(40,749	)

	Three Months Ended June 30, 2017
	Gains and (Losses) on Derivative Instruments			Foreign Currency Translation Adjustments			Total
Beginning balance	$	5,130		$	(63,665	)	$	(58,535	)
Other comprehensive income before reclassifications	(3,599		)	19,541			15,942
Amounts reclassified from accumulated other comprehensive loss to:
Other gains and (losses)	(411		)	—			(411		)
Interest expense	186			—			186
Net current-period other comprehensive income	(3,824		)	19,541			15,717
Net current-period other comprehensive income attributable to noncontrolling interests	—			(2,265		)	(2,265		)
Ending balance	$	1,306		$	(46,389	)	$	(45,083	)

CPA:18 – Global 6/30/2018 10-Q– 28

Notes to Condensed Consolidated Financial Statements (Unaudited)

	Six Months Ended June 30, 2018
	Gains and (Losses) on Derivative Instruments			Foreign Currency Translation Adjustments			Total
Beginning balance	$	(1,082	)	$	(32,130	)	$	(33,212	)
Other comprehensive loss before reclassifications	2,840			(11,005		)	(8,165		)
Amounts reclassified from accumulated other comprehensive loss to:
Other gains and (losses)	(279		)	—			(279		)
Interest expense	198			—			198
Net current-period other comprehensive loss	2,759			(11,005		)	(8,246		)
Net current-period other comprehensive loss attributable to noncontrolling interests	—			709			709
Ending balance	$	1,677		$	(42,426	)	$	(40,749	)

	Six Months Ended June 30, 2017
	Gains and (Losses) on Derivative Instruments			Foreign Currency Translation Adjustments			Total
Beginning balance	$	5,587		$	(67,291	)	$	(61,704	)
Other comprehensive income before reclassifications	(3,824		)	23,697			19,873
Amounts reclassified from accumulated other comprehensive loss to:
Other gains and (losses)	(859		)	—			(859		)
Interest expense	402			—			402
Net current-period other comprehensive income	(4,281		)	23,697			19,416
Net current-period other comprehensive income attributable to noncontrolling interests	—			(2,795		)	(2,795		)
Ending balance	$	1,306		$	(46,389	)	$	(45,083	)

See Note 8 for additional information on our derivative activity recognized within Other comprehensive (loss) income for the periods presented.

CPA:18 – Global 6/30/2018 10-Q– 29

Notes to Condensed Consolidated Financial Statements (Unaudited)

Note 12. Segment Reporting

We operate in three reportable business segments: Net Lease, Self Storage, and Multi-Family. Our Net Lease segment includes our investments in net-leased properties, whether they are accounted for as operating leases or direct financing leases. Our Self Storage segment is comprised of our investments in self-storage properties. Our Multi-Family segment is comprised of our investments in six multi-family residential properties and eight student-housing developments. In addition, we have an All Other category that includes our notes receivable investments. The following tables present a summary of comparative results and assets for these business segments (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Net Lease
Revenues (a)	$	33,299		$	28,882		$	66,291		$	56,252
Operating expenses (b) (c)	(19,307		)	(18,319		)	(38,426		)	(34,355		)
Interest expense	(9,002		)	(6,999		)	(17,860		)	(13,994		)
Other income and (expenses), excluding interest expense	1,555			540			5,906			745
Benefit from (provision for) income taxes	88			(705		)	233			(639		)
Net income attributable to noncontrolling interests	(485		)	(198		)	(579		)	(436		)
Net income attributable to CPA:18 – Global	$	6,148		$	3,201		$	15,565		$	7,573
Self Storage
Revenues	$	14,398		$	13,856		$	28,371		$	27,049
Operating expenses	(8,762		)	(11,663		)	(18,111		)	(23,752		)
Interest expense	(3,288		)	(3,039		)	(6,382		)	(6,044		)
Other income and (expenses), excluding interest expense (d)	(266		)	(308		)	(745		)	(406		)
Provision for income taxes	(28		)	(48		)	(55		)	(125		)
Net income (loss) attributable to CPA:18 – Global	$	2,054		$	(1,202	)	$	3,078		$	(3,278	)
Multi-Family
Revenues	$	5,911		$	6,452		$	11,601		$	12,620
Operating expenses	(4,194		)	(4,554		)	(8,356		)	(8,880		)
Interest expense	(923		)	(1,434		)	(1,828		)	(2,586		)
Other income and (expenses), excluding interest expense	151			3			152			4
Benefit from (provision for) income taxes	47			(200		)	60			(227		)
Net loss attributable to noncontrolling interests	—			34			8			23
Net income attributable to CPA:18 – Global	$	992		$	301		$	1,637		$	954
All Other
Revenues	$	1,795		$	1,783		$	3,575		$	3,532
Operating expenses	(1		)	(2		)	(2		)	(10		)
Net income attributable to CPA:18 – Global	$	1,794		$	1,781		$	3,573		$	3,522
Corporate
Unallocated Corporate Overhead (e)	$	(8,492	)	$	3,889		$	(9,125	)	$	1,495
Net income attributable to noncontrolling interests — Available Cash Distributions	$	(2,830	)	$	(2,186	)	$	(4,735	)	$	(3,861	)
Total Company
Revenues	$	55,403		$	50,973		$	109,838		$	99,453
Operating expenses	(37,119		)	(39,130		)	(74,389		)	(76,105		)
Interest expense	(13,294		)	(11,791		)	(26,224		)	(23,244		)
Other income and (expenses), excluding interest expense	(2,307		)	9,205			5,361			11,768
Benefit from (provision for) income taxes	298			(1,123		)	713			(1,193		)
Net income attributable to noncontrolling interests	(3,315		)	(2,350		)	(5,306		)	(4,274		)
Net (loss) income attributable to CPA:18 – Global	$	(334	)	$	5,784		$	9,993		$	6,405

CPA:18 – Global 6/30/2018 10-Q– 30

Notes to Condensed Consolidated Financial Statements (Unaudited)

	Total Assets
	June 30, 2018		December 31, 2017
Net Lease	$	1,546,102	$	1,572,437
Self Storage	394,704		398,944
Multi-Family	349,605		256,875
Corporate	44,161		35,812
All Other	64,371		66,929
Total Company	$	2,398,943	$	2,330,997

__________

(a) We recognized straight-line rent adjustments of $1.2 million and $1.1 million for the three months ended June 30, 2018 and 2017, respectively, and $2.5 million and $2.1 million for the six months ended June 30, 2018 and 2017, respectively, which increased Lease revenues within our condensed consolidated financial statements for each period.

(b) In April 2017, the Croatian government passed a special law assisting the restructuring of companies considered of systemic significance in Croatia. This law directly impacts our Agrokor tenant, which is currently experiencing financial distress and received a credit downgrade from both Standard & Poor’s and Moody’s. As a result of these financial difficulties and uncertainty regarding future rent collections from the tenant, we recorded bad debt expense of $2.1 million and $1.0 million during the six months ended June 30, 2018 and 2017, respectively. In July 2018, the creditors of Agrokor reached a settlement plan to attempt to restructure the company, but as of the date of this Report, we are unable to assess the potential impact of that plan on this investment.

(c) As a result of the financial difficulties and uncertainty regarding future rent collections from a tenant in Stavanger, Norway, we recorded bad debt expense of $0.6 million and $1.1 million during the three and six months ended June 30, 2017, respectively.

(d) Includes Equity in losses of equity method investment in real estate.

(e) Included in unallocated corporate overhead are asset management fees and general and administrative expenses. These expenses are calculated and reported at the portfolio level and not evaluated as part of any segment’s operating performance.

CPA:18 – Global 6/30/2018 10-Q– 31

Item 2. Management’s Discussion and Analysis of Financial Condition andResults of Operations.

Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to provide the reader with information that will assist in understanding our financial statements and the reasons for changes in certain key components of our financial statements from period to period. Management’s Discussion and Analysis of Financial Condition and Results of Operations also provides the reader with our perspective on our financial position and liquidity, as well as certain other factors that may affect our future results. Our Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the 2017 Annual Report and subsequent reports filed under the Securities Exchange Act of 1934.

Business Overview

As described in more detail in Item 1 of the 2017 Annual Report, we are a publicly owned, non-traded REIT that invests in a diversified portfolio of income-producing commercial properties leased to companies and other real estate-related assets, both domestically and outside the United States. In addition, our portfolio includes self-storage and multi-family investments. As a REIT, we are not subject to U.S. federal income taxation as long as we satisfy certain requirements, principally relating to the nature of our income, the level of our distributions, and other factors. We earn revenue principally by leasing the properties we own to single corporate tenants, primarily on a triple-net lease basis, which requires the tenant to pay substantially all of the costs associated with operating and maintaining the property. Revenue is subject to fluctuation because of the timing of new lease transactions, lease terminations, lease expirations, contractual rent adjustments, tenant defaults, sales of properties, and foreign currency exchange rates. We commenced operations in May 2013 and are managed by our Advisor. We hold substantially all of our assets and conduct substantially all of our business through our Operating Partnership. We are the general partner of, and own 99.97% of the interests in, the Operating Partnership. The remaining interest in the Operating Partnership is held by a subsidiary of WPC.

Significant Developments

Net Asset Values

Our Advisor calculates our NAVs as of each quarter-end by relying in part on rolling update appraisals covering approximately 25% of our real estate portfolio each quarter, adjusted to give effect to the estimated fair value of our debt, all provided by an independent third party, as well as other adjustments. Since the quarterly NAV estimates are not based on a full appraisal of the entire portfolio, to the extent any estimated NAV per share adjustments are within 1% of the previously disclosed NAV per share, the quarterly NAV per share will remain unchanged. We monitor properties not appraised during the quarter to identify ones that may have experienced a significant event and obtain updated third-party appraisals for such properties. Our NAVs are based on a number of variables, including individual tenant credits, lease terms, lending credit spreads, foreign currency exchange rates, share counts, tenant defaults, and development projects that are not yet generating income, among others. We do not control all of these variables and, as such, cannot predict how they will change in the future. The majority of our costs associated with development projects (which are not yet generating income) are included in Real estate under construction in our condensed consolidated financial statements and totaled approximately $195.1 million as of June 30, 2018. Our NAVs as of March 31, 2018 were $8.57 for both our Class A and Class C common stock. Please see our Current Report on Form 8-K dated May 30, 2018 for additional information regarding the calculation of our NAVs. Our Advisor currently intends to determine our quarterly NAVs as of June 30, 2018 during the third quarter of 2018.

The accrued distribution and shareholder servicing fee payable has been valued using a hypothetical liquidation value and, as a result, the NAVs do not reflect any obligation to pay future distribution and shareholder servicing fees. At June 30, 2018, the liability balance for the distribution and shareholder servicing fee was $4.8 million.

CPA:18 – Global 6/30/2018 10-Q– 32

Financial Highlights

During the six months ended June 30, 2018, we completed the following, as further described in the condensed consolidated financial statements.

Acquisition and Financing Activity

We entered into four new student-housing build-to-suit transactions for an aggregate amount of $123.2 million (amount based on the exchange rate of the euro on the respective acquisition dates), inclusive of unfunded future commitments and acquisition related costs and fees.

We obtained a construction loan of $48.8 million, and drew down $29.1 million, for a student-housing development project located in Portsmouth, United Kingdom (based on the exchange rate of the British pound sterling at the date of acquisition and drawdowns, respectively). In addition, we drew down $66.5 million (based on the exchange rate of the euro and British pound sterling at the date of the respective drawdowns) from third-party non-recourse financings related to two of our build-to-suit investments. We also obtained a $34.0 million term loan encumbering seven self-storage properties located in Southern California and used a portion of the proceeds to repay the existing mortgage loan encumbering those properties of $16.4 million (Note 9).

Consolidated Results

(in thousands)

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Total revenues	$	55,403		$	50,973		$	109,838		$	99,453
Acquisition and other expenses	17			(7		)	17			45
Net (loss) income attributable to CPA:18 – Global	(334		)	5,784			9,993			6,405
Cash distributions paid	21,844			21,215			43,530			42,210
Net cash provided by operating activities (a)							44,960			43,091
Net cash used in investing activities (a)							(81,716		)	(58,105		)
Net cash provided by (used in) financing activities (a)							63,940			(1,884		)
Supplemental financial measures (b):
FFOattributable to CPA:18 – Global	15,153			23,072			41,573			41,154
MFFO attributable to CPA:18 – Global	16,392			12,796			33,959			27,695
Adjusted MFFO attributable to CPA:18 – Global	15,995			13,350			33,090			28,861

__________

(a) On January 1, 2018, we adopted ASU 2016-15 and ASU 2016-18, which revised how certain items are presented in the condensed consolidated statements of cash flows. As a result of adopting this guidance, we retrospectively revised Net cash provided by operating activities, Net cash used in investing activities, and Net cash provided by financing activities within our condensed consolidated statements of cash flows for the six months ended June 30, 2017, as described in Note 2.

(b) We consider the performance metrics listed above, including Funds from operations, or FFO, MFFO, and Adjusted modified funds from operations, or Adjusted MFFO, which are supplemental measures that are not defined by GAAP, referred to herein as non-GAAP measures, to be important measures in the evaluation of our operating performance. See Supplemental Financial Measures below for our definitions of these non-GAAP measures and reconciliations to their most directly comparable GAAP measures.

CPA:18 – Global 6/30/2018 10-Q– 33

Revenues and Net Income Attributable to CPA:18 – Global

Total revenues increased for the three and six months ended June 30, 2018 as compared to the same periods in 2017, primarily as a result of the accretive impact of our investments acquired or placed into service during 2017 and 2018 and the positive effect of the strengthening of foreign currencies (primarily the euro) in relation to the U.S. dollar between the periods.

Net (loss) income attributable to CPA:18 – Global was a net loss for the three months ended June 30,2018 and net income for the same period in 2017, primarily due to a decrease in foreign currency gains relating to our short-term intercompany loans at our international investments and an increase in interest expense. This was partially offset by an increase in revenue as well as a decrease in depreciation and amortization expense as certain self-storage in-place lease intangible assets fully amortized subsequent to June 30, 2017. Lastly, there was a gain recognized during the three months ended June 30,2018 related to the insurance proceeds received for the rebuild of a property that was damaged by a tornado in 2017.

Net income attributable to CPA:18 – Global increased for the six months ended June 30,2018 compared to the same period in 2017, as a result of an increase in revenue as well as a decrease in depreciation and amortization expense as certain self-storage in-place lease intangible assets fully amortized subsequent to June 30, 2017. Additional improvements to Net income attributable to CPA:18 – Global resulted from a gain recognized during the six months ended June 30,2018 related to the insurance proceeds received for the rebuild of a property that was damaged by a tornado in 2017. These improvements were partially offset by a decrease in foreign currency gains relating to our short-term intercompany loans at our international investments and an increase in interest expense.

FFO, MFFO, and Adjusted MFFO Attributable to CPA:18 – Global

FFO decreased for the three months ended June 30,2018 as compared to the same period in 2017, primarily as a result of foreign currency losses relating to our short-term intercompany loans at our international investments, partially offset by the accretive impact of our investments acquired or placed into service in 2017 and 2018 as well as the gain recognized on insurance proceeds received for the rebuild of a property that was damaged by a tornado in 2017. FFO was relatively unchanged for the six months ended June 30, 2018 compared to the same period in 2017, as foreign currency losses for the period were substantially offset by the accretive impact of our investments acquired or placed into service in 2017 and 2018 as well as the gain recognized on insurance proceeds received for the rebuild of a property that was damaged by a tornado in 2017.

MFFO and Adjusted MFFO increased for the three and six months ended June 30, 2018 as compared to the same periods in 2017, primarily as a result of the accretive impact of our investments acquired or placed into service during 2017 and 2018, partially offset by an increase in interest expense.

CPA:18 – Global 6/30/2018 10-Q– 34

Portfolio Overview

We hold a diversified portfolio of income-producing commercial real estate properties and other real estate-related assets. We make investments both domestically and internationally. Portfolio information is provided on a pro rata basis, unless otherwise noted below, to better illustrate the economic impact of our various net-leased, jointly owned investments. See Terms and Definitions below for a description of pro rata amounts.

Portfolio Summary

	June 30, 2018			December 31, 2017
Number of net-leased properties (a)	59			59
Number of operating properties (b)	83			79
Number of tenants (a)	100			98
Total square footage (in thousands)	16,866			16,873
Occupancy — Single-tenant	98.3		%	99.7		%
Occupancy — Multi-tenant	96.1		%	92.4		%
Occupancy — Self-storage	92.1		%	89.2		%
Occupancy — Multi-family	92.3		%	90.9		%
Weighted-average lease term — Single-tenant properties (in years)	10.5			11.1
Weighted-average lease term — Multi-tenant properties (in years)	6.8			7.1
Number of countries	13			12
Total assets (consolidated basis in thousands)	$	2,398,943		$	2,330,997
Net investments in real estate (consolidated basis in thousands)	2,103,730			2,062,451
Debt, net —pro rata (in thousands)	1,279,005			1,184,896

	Six Months Ended June 30,
(dollars in thousands, except exchange rates)	2018			2017
Acquisition volume — consolidated (c)	$	123,996		$	39,363
Acquisition volume —pro rata (d)	123,218			56,182
Financing obtained — consolidated	129,616			44,159
Financing obtained —pro rata	128,406			47,138
Average U.S. dollar/euro exchange rate	1.2108			1.0821
Average U.S. dollar/Norwegian krone exchange rate	0.1262			0.1180
Average U.S. dollar/British pound sterling exchange rate	1.3764			1.2582
Change in the U.S. CPI (e)	2.2		%	1.5		%
Change in the Harmonized Index of Consumer Prices (e)	1.2		%	0.6		%
Change in the Norwegian CPI (e)	2.2		%	1.3		%

__________

(a) Represents our single-tenant and multi-tenant properties, including the build-to-suit project located in Accra, Ghana which we recently terminated (Note 4), and, accordingly, excludes all operating properties. We consider a property to be multi-tenant if it does not have a single tenant that comprises more than 75% of the contractual minimum ABR for the property. See Terms and Definitions below for a description of ABR.

(b) At June 30, 2018, our operating portfolio consisted of 69 self-storage properties and 14 multi-family properties (including eight student-housing properties), all of which are managed by third parties. Our operating portfolio also includes self-storage and multi-family build-to-suit projects.

(c) Includes build-to-suit transactions and related budget amendments, which are reflected as the total commitment for the build-to-suit funding, and excludes investments in unconsolidated joint ventures.

(d) Includes build-to-suit transactions and related budget amendments, which are reflected as the total commitment for the build-to-suit funding, and includes investments in unconsolidated joint ventures, which include our equity investment in real estate (Note 4).

CPA:18 – Global 6/30/2018 10-Q– 35

(e) Many of our lease agreements include contractual increases indexed to changes in the U.S. Consumer Price Index, or U.S. CPI, or similar indices in the jurisdictions where the properties are located.

Net-Leased Portfolio

The tables below represent information about our net-leased portfolio on a pro rata basis and, accordingly, exclude all operating properties at June 30, 2018. See Terms and Definitions below for a description of pro rata metrics and ABR.

Top Ten Tenants by ABR

(dollars in thousands)

Tenant/Lease Guarantor	Property Type	Tenant Industry	Location	ABR		Percent
Fentonir Trading & Investments Limited (a)	Hotel	Hotel, Gaming, and Leisure	Munich and Stuttgart, Germany	$	7,583	8	%
Rabobank Groep NV (a)	Office	Banking	Eindhoven, Netherlands	6,000		6	%
Sweetheart Cup Company, Inc.	Warehouse	Containers, Packaging, and Glass	University Park, Illinois	5,957		6	%
Albion Resorts (a)	Hotel	Hotel, Gaming, and Leisure	Albion, Mauritius	5,165		5	%
Siemens AS (a)	Office	Capital Equipment	Oslo, Norway	4,723		5	%
Bank Pekao S.A. (a)	Office	Banking	Warsaw, Poland	4,399		5	%
COOP Ost AS (a)	Retail	Grocery	Oslo, Norway	3,932		4	%
State Farm Automobile Co.	Office	Insurance	Austin, Texas	3,766		4	%
Royal Vopak NV (a)	Office	Oil and Gas	Rotterdam, Netherlands	3,695		4	%
State of Iowa Board of Regents	Office	Sovereign and Public Finance	Coralville and Iowa City, Iowa	3,512		4	%
Total				$	48,732	51	%

__________

(a) ABR amounts are subject to fluctuations in foreign currency exchange rates.

Portfolio Diversification by Geography

(dollars in thousands)

Region	ABR		Percent
United States
Midwest	$	22,509	23	%
South	11,689		12	%
East	3,483		4	%
West	429		—	%
U.S. Total	38,110		39	%
International
The Netherlands	15,121		16	%
Norway	13,574		14	%
Germany	11,014		11	%
Mauritius	5,165		5	%
Poland	4,453		5	%
United Kingdom	3,567		4	%
Croatia	2,854		3	%
Slovakia	2,445		3	%
International Total	58,193		61	%
Total	$	96,303	100	%

CPA:18 – Global 6/30/2018 10-Q– 36

Portfolio Diversification by Property Type

(dollars in thousands)

Property Type	ABR		Percent
Office	$	46,991	49	%
Hotel	14,593		15	%
Industrial	12,933		13	%
Warehouse	12,590		13	%
Retail	9,196		10	%
Total	$	96,303	100	%

Portfolio Diversification by Tenant Industry

(dollars in thousands)

Industry Type	ABR		Percent
Hotel, Gaming, and Leisure	$	14,621	15	%
Banking	10,399		11	%
Sovereign and Public Finance	7,158		8	%
Grocery	6,786		7	%
Containers, Packaging, and Glass	5,956		6	%
Retail	5,301		6	%
Capital Equipment	5,071		5	%
Insurance	4,678		5	%
Utilities: Electric	4,080		4	%
Oil and Gas	3,885		4	%
Business Services	3,526		4	%
Metals and Mining	3,393		4	%
Media: Advertising, Printing, and Publishing	3,299		3	%
High Tech Industries	3,284		3	%
Healthcare and Pharmaceuticals	2,501		3	%
Consumer Services	2,091		2	%
Automotive	2,009		2	%
Construction and Building	1,805		2	%
Non-Durable Consumer Goods	1,289		1	%
Telecommunications	1,063		1	%
Electricity	1,042		1	%
Wholesale	1,042		1	%
Other (a)	2,024		2	%
Total	$	96,303	100	%

__________

(a) Includes ABR from tenants in the following industries: cargo transportation, durable consumer goods and environmental industries.

CPA:18 – Global 6/30/2018 10-Q– 37

Lease Expirations

(dollars in thousands)

Year of Lease Expiration (a) (b)	Number of Leases Expiring	ABR		Percent
Remaining 2018	5	$	353	—	%
2019	7	1,159		1	%
2020	7	1,265		1	%
2021	6	1,349		1	%
2022	8	2,117		2	%
2023	16	15,661		16	%
2024	10	5,151		5	%
2025	9	7,028		7	%
2026	8	6,865		7	%
2027	8	6,220		7	%
2028	5	5,280		6	%
2029	4	9,090		10	%
2030	6	4,364		5	%
2031	4	5,090		5	%
Thereafter (>2031)	14	25,311		27	%
Total	117	$	96,303	100	%

__________

(a) Assumes tenant does not exercise renewal option.

(b) These maturities also include our multi-tenant properties, which generally have a shorter duration than our single-tenant properties, and on a combined basis represent pro rata ABR of $3.6 million.

CPA:18 – Global 6/30/2018 10-Q– 38

Operating Properties

At June 30, 2018, our operating portfolio consisted of 69 self-storage properties, which had an average occupancy rate of 92.1%, and 14 multi-family properties (including eight student-housing developments), which had an average occupancy rate of 92.3%. At June 30, 2018, our operating portfolio was comprised as follows (square footage in thousands):

Location	Number of Properties	Square Footage
Florida	23	2,277
Texas	13	1,201
California	10	860
Georgia	5	593
Nevada	3	243
Delaware	3	241
North Carolina	2	403
Illinois	2	100
Hawaii	2	95
Kentucky	1	121
Washington, D.C.	1	67
South Carolina	1	63
New York	1	61
Louisiana	1	59
Massachusetts	1	58
Missouri	1	41
Oregon	1	40
U.S. Total	71	6,523
Canada (a)	4	150
Spain (b)	4	—
United Kingdom (c)	3	—
Portugal (d)	1	—
International Total	12	150
Total	83	6,673

__________

(a) Includes three build-to-suit projects for self-storage facilities that are unconsolidated investments and are included in Accounts receivable and other assets, net in the condensed consolidated financial statements.

(b) Includes four build-to-suit projects for student-housing developments.

(c) Includes three build-to-suit projects for student-housing developments.

(d) Includes one build-to-suit project for a student-housing development.

CPA:18 – Global 6/30/2018 10-Q– 39

Build-to-Suit and Development Projects

As of June 30, 2018, we had the following consolidated development projects, including joint ventures, which remain under construction (dollars in thousands):

Estimated Completion Date	Property Type	Location	Ownership Percentage (a)		Number of Buildings	Square Footage	Estimated Project Totals (b)		Amount Funded (b) (c)
Q3 2018	Student Housing	Portsmouth, United Kingdom	97.0	%	1	126,807	$	64,567	$	46,544
Q3 2018	Student Housing	Cardiff, United Kingdom	94.5	%	1	96,983	41,521		33,544
Q2 2019	Student Housing	Barcelona, Spain	98.7	%	1	112,980	24,703		10,646
Q3 2019	Student Housing	Coimbra, Portugal	98.5	%	1	135,076	25,757		7,814
Q2 2020	Student Housing	Swansea, United Kingdom (d)	94.5	%	1	176,496	48,646		9,364
Q2 2020	Student Housing	Malaga, Spain	100.0	%	1	88,878	40,613		4,840
Q3 2020	Student Housing	San Sebastian, Spain	100.0	%	1	126,075	35,281		9,678
Q3 2020	Student Housing	Barcelona, Spain	100.0	%	3	77,504	30,586		10,765
N/A (e)	Office/Student Housing	Accra, Ghana (e)	100.0	%	6	506,537	27,956		27,956
					16	1,447,336	$	339,630	161,151
Third-party contributions (f)									(1,345		)
Total									$	159,806

__________

(a) Represents our expected ownership percentage upon the completion of each respective development project.

(b) Amounts related to certain of our build-to-suit projects are denominated in a foreign currency. For these projects, amounts are based on their respective exchange rates as of June 30, 2018, where applicable.

(c) Amounts exclude capitalized interest, accrued costs, and capitalized acquisition fees for our Advisor, which are all included in Real estate under construction.

(d) Amount funded for the project includes $7.3 million of prepaid ground lease rent that is included in Accounts receivable and other assets, net on our condensed consolidated balance sheets.

(e) On February 19, 2016, the joint venture entered into an agreement for third-party financing in an amount up to $41.0 million from OPIC. The transaction, including the funding of this loan, was subject to the tenant obtaining a letter of credit, which did not occur, and as a result the tenant was in default under its concession agreement with us. Because of the tenant’s default, we terminated the concession agreement in May 2018, and therefore we will not pursue the completion of this project (Note 4).

(f) Amount represents the funds contributed from our joint-venture partners.

As of June 30, 2018, we had the following unconsolidated joint-venture development projects, which remain under construction (dollars in thousands):

Estimated Completion Date	Property Type	Location (a)	Ownership Percentage (b)		Number of Buildings	Square Footage	Estimated Project Totals (c)		Amount Funded (c)
Q4 2018	Self Storage	Toronto, Canada	89.9	%	1	119,000	$	15,945	$	9,784
Q4 2018	Self Storage	Vaughan, Canada	90.0	%	1	105,150	14,864		12,609
Q1 2020	Self Storage	Vaughan, Canada	90.0	%	1	95,475	14,642		2,884
					3	319,625	$	45,451	$	25,277

__________

(a) These properties all relate to an unconsolidated investment, which we account for under the equity method of accounting.

CPA:18 – Global 6/30/2018 10-Q– 40

(b) Represents our expected ownership percentage upon the completion of each respective development project. As of June 30, 2018, the joint-venture partner had not yet purchased its 10% equity interest, which will be funded by the distributions it is eligible to receive upon the properties being placed into service.

(c) Amounts related to our Canadian build-to-suit projects are denominated in Canadian dollars, which have been partially funded with third-party financing. For these projects, U.S. dollar amounts are based on their respective exchange rate as of June 30, 2018.

Terms and Definitions

Pro Rata Metrics— The portfolio informationabovecontains certain metrics prepared under the pro rata consolidation method.We refer to these metrics as pro rata metrics. We have a number of investments, usually with our affiliates, in which our economic ownership is less than 100%. Under the full consolidation method, we report 100% of the assets, liabilities, revenues, and expenses of those investments that are deemed to be under our control or for which we are deemed to be the primary beneficiary, even if our ownership is less than 100%. Also, for all other jointly owned investments, which we do not control, we report our net investment and our net income or loss from that investment. Under the pro rata consolidation method, we generally present our proportionate share, based on our economic ownership of these jointly owned investments, of the portfolio metrics of those investments. Multiplying each of our jointly owned investments’ financial statement line items by our percentage ownership and adding or subtracting those amounts from our totals, as applicable, may not accurately depict the legal and economic implications of holding an ownership interest of less than 100% in our jointly owned investments.

ABR—ABR represents contractual minimum annualized base rent for our net-leased properties, net of receivable reserves as determined by GAAP, and reflects exchange rates as of June 30, 2018. If there is a rent abatement, we annualize the first monthly contractual base rent following the free rent period. ABR is not applicable to operating properties.

CPA:18 – Global 6/30/2018 10-Q– 41

Results of Operations

We evaluate our results of operations with a focus on: (i) our ability to generate the cash flow necessary to meet our objectives of funding distributions to stockholders and (ii) increasing the value of our real estate investments. As a result, our assessment of operating results gives less emphasis to the effect of unrealized gains and losses, which may cause fluctuations in net (loss) income for comparable periods but have no impact on cash flows, and to other non-cash charges, such as depreciation and impairment charges.

The following table presents the comparative results of operations (in thousands):

	Three Months Ended June 30,									Six Months Ended June 30,
	2018			2017			Change			2018			2017			Change
Revenues
Lease revenues	$	29,369		$	25,448		$	3,921		$	58,844		$	49,782		$	9,062
Operating real estate income	20,309			20,316			(7		)	39,972			39,696			276
Reimbursable tenant costs	3,724			3,201			523			7,046			6,167			879
Interest income and other	2,001			2,008			(7		)	3,976			3,808			168
	55,403			50,973			4,430			109,838			99,453			10,385
Operating Expenses
Depreciation and amortization:
Net-leased properties	12,408			11,009			1,399			24,832			21,616			3,216
Operating properties	4,484			7,719			(3,235		)	9,692			16,063			(6,371		)
	16,892			18,728			(1,836		)	34,524			37,679			(3,155		)
Property expenses:
Operating properties	8,220			8,448			(228		)	16,379			16,482			(103		)
Reimbursable tenant costs	3,724			3,201			523			7,046			6,167			879
Net-leased properties	3,315			4,241			(926		)	6,953			6,775			178
Asset management fees	3,151			2,767			384			6,025			5,476			549
	18,410			18,657			(247		)	36,403			34,900			1,503
General and administrative	1,800			1,752			48			3,445			3,481			(36		)
Acquisition and other expenses	17			(7		)	24			17			45			(28		)
	37,119			39,130			(2,011		)	74,389			76,105			(1,716		)
Other Income and Expenses
Interest expense	(13,294		)	(11,791		)	(1,503		)	(26,224		)	(23,244		)	(2,980		)
Other gains and (losses)	(2,072		)	9,459			(11,531		)	5,920			12,121			(6,201		)
Equity in losses of equity method investment in real estate	(235		)	(254		)	19			(559		)	(353		)	(206		)
	(15,601		)	(2,586		)	(13,015		)	(20,863		)	(11,476		)	(9,387		)
Income before income taxes	2,683			9,257			(6,574		)	14,586			11,872			2,714
Benefit from (provision for) income taxes	298			(1,123		)	1,421			713			(1,193		)	1,906
Net Income	2,981			8,134			(5,153		)	15,299			10,679			4,620
Net income attributable to noncontrolling interests	(3,315		)	(2,350		)	(965		)	(5,306		)	(4,274		)	(1,032		)
Net (Loss) Income Attributable to CPA:18 – Global	$	(334	)	$	5,784		$	(6,118	)	$	9,993		$	6,405		$	3,588

Lease Composition and Leasing Activities

As of June 30, 2018, approximately 52.4% of our leases (based on ABR) provided for adjustments based on formulas indexed to changes in the U.S. CPI (or similar indices for the jurisdiction in which the property is located), some of which are subject to caps and/or floors. In addition, 42.7% of our leases (based on ABR) have fixed rent adjustments, for a scheduled average ABR increase of 2.5% over the next 12 months. Lease revenues from our international investments are subject to exchange rate fluctuations, primarily from the euro.

CPA:18 – Global 6/30/2018 10-Q– 42

Property Level Contribution

The following table presents the property level contribution for our consolidated net-leased and operating properties, as well as a reconciliation to Net (loss) income attributable to CPA:18 – Global (in thousands):

	Three Months Ended June 30,									Six Months Ended June 30,
	2018			2017			Change			2018			2017			Change
Existing Net-Leased Properties
Lease revenues	$	25,261		$	24,465		$	796		$	50,753		$	48,773		$	1,980
Depreciation and amortization	(11,038		)	(10,669		)	(369		)	(21,774		)	(21,260		)	(514		)
Property expenses	(2,610		)	(3,003		)	393			(5,586		)	(5,470		)	(116		)
Property level contribution	11,613			10,793			820			23,393			22,043			1,350
Recently Acquired Net-Leased Properties
Lease revenues	4,108			983			3,125			8,091			1,009			7,082
Depreciation and amortization	(1,370		)	(340		)	(1,030		)	(3,058		)	(357		)	(2,701		)
Property expenses	(705		)	(1,211		)	506			(1,367		)	(1,272		)	(95		)
Property level contribution	2,033			(568		)	2,601			3,666			(620		)	4,286
Existing Operating Properties
Revenues	20,309			19,595			714			39,972			38,305			1,667
Depreciation and amortization	(4,484		)	(7,466		)	2,982			(9,692		)	(15,580		)	5,888
Property expenses	(8,220		)	(8,237		)	17			(16,379		)	(16,007		)	(372		)
Property level contribution	7,605			3,892			3,713			13,901			6,718			7,183
Properties Sold
Operating property revenues	—			721			(721		)	—			1,391			(1,391		)
Operating property expenses	—			(211		)	211			—			(475		)	475
Depreciation and amortization	—			(253		)	253			—			(482		)	482
Property expenses	—			(27		)	27			—			(33		)	33
Property level contribution	—			230			(230		)	—			401			(401		)
Property Level Contribution	21,251			14,347			6,904			40,960			28,542			12,418
Add other income:
Interest income and other	2,001			2,008			(7		)	3,976			3,808			168
Less other expenses:
Asset management fees	(3,151		)	(2,767		)	(384		)	(6,025		)	(5,476		)	(549		)
General and administrative	(1,800		)	(1,752		)	(48		)	(3,445		)	(3,481		)	36
Acquisition and other expenses	(17		)	7			(24		)	(17		)	(45		)	28
	18,284			11,843			6,441			35,449			23,348			12,101
Other Income and Expenses
Interest expense	(13,294		)	(11,791		)	(1,503		)	(26,224		)	(23,244		)	(2,980		)
Other gains and (losses)	(2,072		)	9,459			(11,531		)	5,920			12,121			(6,201		)
Equity in losses of equity method investment in real estate	(235		)	(254		)	19			(559		)	(353		)	(206		)
	(15,601		)	(2,586		)	(13,015		)	(20,863		)	(11,476		)	(9,387		)
Income before income taxes	2,683			9,257			(6,574		)	14,586			11,872			2,714
Benefit from (provision for) income taxes	298			(1,123		)	1,421			713			(1,193		)	1,906
Net Income	2,981			8,134			(5,153		)	15,299			10,679			4,620
Net income attributable to noncontrolling interests	(3,315		)	(2,350		)	(965		)	(5,306		)	(4,274		)	(1,032		)
Net (Loss) Income Attributable to CPA:18 – Global	$	(334	)	$	5,784		$	(6,118	)	$	9,993		$	6,405		$	3,588

Property level contribution is a non-GAAP measure that we believe to be a useful supplemental measure for management and investors in evaluating and analyzing the financial results of our net-leased and operating properties over time. Property level contribution presents the lease and operating property revenues, less property expenses and depreciation and amortization. We believe that Property level contribution allows for meaningful comparison between periods of the direct costs of owning and operating our net-leased assets and operating properties. When a property is leased on a net lease basis, reimbursable tenant costs are recorded as both income and property expense and, therefore, have no impact on the Property level contribution. While we believe that Property level contribution is a useful supplemental measure, it should not be considered as an alternative to Net income (loss) attributable to CPA:18 – Global as an indication of our operating performance.

CPA:18 – Global 6/30/2018 10-Q– 43

Existing Net-Leased Properties

Existing net-leased properties are those we acquired or placed into service prior to January 1, 2017. For the periods presented, there were 54 existing net-leased properties.

For the three months ended June 30, 2018 compared to the same period in 2017, property level contribution from existing net-leased properties increased by $0.8 million, primarily due to an increase in lease revenues of $0.8 million and a decrease in property expenses of $0.4 million, partially offset by an increase in depreciation and amortization expense of $0.4 million.

For the six months ended June 30, 2018 compared to the same period in 2017, property level contribution from existing net-leased properties increased by $1.4 million, primarily due to an increase in lease revenues of $2.0 million, partially offset by an increase in depreciation and amortization expense of $0.5 million.

The increases in lease revenues and depreciation and amortization expense for the three and six months ended June 30, 2018 compared to the same periods in 2017 were primarily due to the strengthening of foreign currencies (primarily the euro) in relation to the U.S. dollar between the periods.

Recently Acquired Net-Leased Properties

Recently acquired net-leased properties are those that we acquired or placed into service subsequent to December 31, 2016. For the periods presented, there were five recently acquired net-leased properties, including the build-to-suit project located in Accra, Ghana which we recently terminated (Note 4).

For the three and six months ended June 30, 2018 compared to the same periods in 2017, property level contribution from recently acquired net-leased properties increased by $2.6 million and $4.3 million, respectively, primarily due to three build-to-suit projects that were placed into service after the second quarter of 2017.

Existing Operating Properties

Existing operating properties are those we acquired or placed into service prior to January 1, 2017. For the periods presented, there were 71 existing operating properties.

For the three months ended June 30, 2018 compared to the same period in 2017, property level contribution from existing operating properties increased by $3.7 million, primarily due to an increase in revenues of $0.7 million and a decrease in depreciation and amortization expense of $3.0 million.

For the six months ended June 30, 2018 compared to the same period in 2017, property level contribution from existing operating properties increased by $7.2 million, primarily due to an increase in revenues of $1.7 million and a decrease in depreciation and amortization expense of $5.9 million.

The increases in revenues in both periods were primarily due to increased market rents. The decreases in depreciation and amortization expense in both periods were primarily due to certain in-place lease intangible assets becoming fully amortized subsequent to June 30, 2017.

Properties Sold

In October 2017, we sold a student-housing property located in Reading, United Kingdom, which was previously classified as Operating real estate — land, buildings and improvements in the condensed consolidated financial statements.

Other Revenues and Expenses

Interest Income and Other

For both the three and six months ended June 30, 2018 compared to the same periods in 2017, interest income remained relatively flat.

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Asset Management Fees

For the three and six months ended June 30, 2018 compared to the same periods in 2017, asset management fees increased by $0.4 million and $0.5 million, respectively, primarily due to the increased fair market value of our assets as well as investment volume subsequent to the second quarter of 2017, which increased the asset base from which our Advisor earns a fee.

General and Administrative

For both the three and six months ended June 30, 2018 compared to the same periods in 2017, general and administrative expenses remained relatively flat.

Acquisition and Other Expenses

Acquisition expenses represent direct costs incurred to acquire properties in transactions that are accounted for as business combinations, whereby such costs are required to be expensed as incurred (Note 2). On January 1, 2017, we adopted ASU 2017-01 (Note 2), and as a result, all transaction costs incurred during the three and six months ended June 30, 2018 were capitalized since our acquisitions during the period were classified as asset acquisitions. Most of our future acquisitions are likely to be classified as asset acquisitions under this accounting standard.

For both the three and six months ended June 30, 2018 compared to the same periods in 2017, acquisition expenses remained relatively flat.

Interest Expense

Our interest expense is directly impacted by the mortgage loans or other financing obtained or assumed in connection with our investing activity (Note 9). For the three and six months ended June 30, 2018 compared to the same periods in 2017, interest expense increased by $1.5 million and $3.0 million, respectively, primarily due to an increase in mortgage and bond financing obtained in connection with our investing activity during the respective periods. Our average outstanding debt balance was $1.3 billion during both the three and six months ended June 30, 2018 and $1.2 billion during both the three and six months ended June 30, 2017. Our weighted-average interest rate was 3.9% during both the three and six months ended June 30, 2018 and 4.1% during both the three and six months ended June 30, 2017.

Other Gains and (Losses)

Other gains and (losses) primarily consists of gains and losses on foreign currency transactions and derivative instruments. We make intercompany loans to a number of our foreign subsidiaries, most of which do not have the U.S. dollar as their functional currency. Remeasurement of foreign currency intercompany transactions that are scheduled for settlement, consisting primarily of accrued interest and short-term loans, are included in the determination of net income. We also recognize gains or losses on foreign currency transactions when we repatriate cash from our foreign investments or hold foreign currencies in entities with a U.S. dollar currency designation. In addition, we have certain derivative instruments, including foreign currency contracts, that are not designated as hedges for accounting purposes, for which realized and unrealized gains and losses are included in earnings. The timing and amount of such gains or losses cannot always be estimated and are subject to fluctuation.

For the three months ended June 30, 2018, we recognized net other losses of $2.1 million, which were primarily comprised of $4.1 million of foreign currency losses, largely related to foreign currency losses recorded on our short-term intercompany loans at our international investments, partially offset by a $0.9 million gain recognized as a result of the insurance proceeds received for the rebuild of a property that was damaged by a tornado in 2017, $0.5 million of gains on rent guarantees (Note 7), and $0.4 million of gains on derivatives.

For the six months ended June 30, 2018, we recognized net other gains of $5.9 million, which were primarily comprised of a $5.3 million gain recognized as a result of the insurance proceeds received for the rebuild of a property that was damaged by a tornado in 2017, $0.6 million of gains on rent guarantees, and $0.3 million of gains on derivatives. These gains were partially offset by $0.5 million of realized and unrealized foreign currency losses.

CPA:18 – Global 6/30/2018 10-Q– 45

For the three months ended June 30, 2017, we recognized net other gains of $9.5 million, which were primarily comprised of $8.5 million of realized and unrealized foreign currency transaction gains related to our international investments, primarily related to our short-term intercompany loans, $0.4 million of realized gains recognized on foreign currency forward contracts and collars, and $0.4 million of gains recognized on the change in fair value of rent guarantees.

For the six months ended June 30, 2017, we recognized net other gains of $12.1 million, which were primarily comprised of $10.5 million of realized and unrealized foreign currency transaction gains related to our international investments, $0.8 million of realized gains recognized on foreign currency forward contracts and collars, and $0.5 million of gains recognized on the change in the fair value of rent guarantees.

Equity in Losses of Equity Method Investment in Real Estate

For the three months ended June 30, 2018 compared to the same period in 2017, equity in losses of equity method investment in real estate remained relatively flat. For the six months ended June 30, 2018 compared to the same period in 2017, equity in losses of equity method investment in real estate increased by $0.2 million, primarily due to depreciation at two of our Canadian self-storage facilities upon completion of distinct phases of the overall development.

Benefit from (Provision for) Income Taxes

Our provision for income taxes is primarily related to our international properties.

During the three and six months ended June 30, 2018, we recorded a benefit from income taxes of $0.3 million and $0.7 million, respectively, comprised of a provision for current taxes of $0.3 million and $0.5 million, respectively, and a benefit from deferred taxes of $0.6 million and $1.2 million, respectively.

During the three and six months ended June 30, 2017, we recorded a provision for income taxes of $1.1 million and $1.2 million, respectively, comprised of a provision for current taxes of $1.0 million and $1.1 million, respectively, and a provision for deferred taxes of $0.1 million in both periods.

Net Income Attributable to Noncontrolling Interests

For both the three and six months ended June 30, 2018 compared to the same periods in 2017, net income attributable to noncontrolling interests increased by $1.0 million, primarily due to increases in the available cash generated by the Operating Partnership, which we refer to as the Available Cash Distribution (Note 3).

Liquidity and Capital Resources

We use the cash flow generated from our investments primarily to meet our operating expenses, service debt, and fund distributions to stockholders. We currently expect that, for the short-term, the aforementioned cash requirements will be funded by our cash on hand and financings. We may also use proceeds from financings and asset sales for the acquisition of real estate and real estate-related investments.

Our liquidity would be adversely affected by unanticipated costs and greater-than-anticipated operating expenses. To the extent that our working capital reserve is insufficient to satisfy our cash requirements, additional funds may be provided from cash generated from operations or through short-term borrowings. In addition, we may incur indebtedness in connection with the acquisition of real estate, refinance debt on existing properties, or arrange for the leveraging of any previously unfinanced property.

CPA:18 – Global 6/30/2018 10-Q– 46

Sources and Uses of Cash During the Period

We closed our initial public offering on April 2, 2015 and have invested the proceeds of that offering. Our cash flows will fluctuate periodically due to a number of factors, which may include, among other things: the timing of purchases and sales of real estate; the timing of the receipt of proceeds from, and the repayment of, non-recourse mortgage loans and bonds payable, and the receipt of lease revenues; whether our Advisor receives fees in shares of our common stock or cash, which our board of directors must elect after consultation with our Advisor; the timing and characterization of distributions received from equity investments in real estate; the timing of payments of the Available Cash Distributions to our Advisor; and changes in foreign currency exchange rates. Despite these fluctuations, we believe our investments will generate sufficient cash from operations to meet our normal recurring short-term and long-term liquidity needs. We may also use existing cash resources, the proceeds of non-recourse mortgage loans, sales of assets, distributions reinvested in our common stock through our DRIP, and the issuance of additional equity securities to meet these needs. We assess our ability to access capital on an ongoing basis. Our sources and uses of cash during the period are described below.

Operating Activities — Net cash provided by operating activities increased by $1.9 million during the six months ended June 30,2018 as compared to the same period in 2017, primarily reflecting the impact of investments acquired or placed into service during 2017 and 2018.

Investing Activities — Our investing activities are generally comprised of real estate purchases, funding of build-to-suit development projects, payment of deferred acquisition fees to our Advisor for asset acquisitions, and capitalized property-related costs.

Net cash used in investing activities totaled $81.7 million for the six months ended June 30, 2018. This was primarily the result of cash outflows of $44.9 million to fund construction costs of our build-to-suit projects (Note 4), $38.0 million for our real estate investments (Note 4), and $7.0 million for capital expenditures on our owned real estate. We also had cash inflows of $7.1 million from insurance settlements and $2.5 million from repayments of notes receivable (Note 5).

Financing Activities — Net cash provided by financing activities totaled $63.9 million for the six months ended June 30,2018. This was primarily due to cash inflows of $128.0 million from non-recourse mortgage financings (Note 9) and $21.0 million of distributions that were reinvested by stockholders in shares of our common stock through our DRIP. We had cash outflows of $43.5 million related to distributions paid to our stockholders, $22.7 million for scheduled payments and prepayments of mortgage loan principal, $12.1 million for the repurchase of shares of our common stock pursuant to our redemption program described below, and $7.5 million for distributions to noncontrolling interests.

Distributions

Our objectives are to generate sufficient cash flow over time to provide stockholders with distributions and to continue to seek investments with potential for capital appreciation throughout varying economic cycles. For the six months ended June 30, 2018, we declared distributions to stockholders of $43.8 million, which were comprised of $21.8 million of cash distributions and $22.0 million reinvested by stockholders in shares of our common stock pursuant to our DRIP. From inception through June 30, 2018, we declared distributions to stockholders totaling $346.0 million, which were comprised of cash distributions of $164.4 million and $181.6 million reinvested by stockholders in shares of our common stock pursuant to our DRIP.

We believe that FFO, a non-GAAP measure, is the most appropriate metric to evaluate our ability to fund distributions to stockholders. For a discussion of FFO, see Supplemental Financial Measures below. Over the life of our company, the regular quarterly cash distributions we pay are expected to be principally sourced from our FFO or cash flow from operations. However, we have funded a portion of our cash distributions to date using net proceeds from our initial public offering and there can be no assurance that our FFO or cash flow from operations will be sufficient to cover our future distributions. Our distribution coverage using FFO was approximately 94.9% of total distributions declared for the six months ended June 30, 2018, and we funded all of these distributions from Net cash provided by operating activities.

CPA:18 – Global 6/30/2018 10-Q– 47

Redemptions

We maintain a quarterly redemption program pursuant to which we may, at the discretion of our board of directors, redeem shares of our common stock from stockholders seeking liquidity. During the six months ended June 30, 2018, we received requests to redeem 1,063,412 and 403,327 shares of Class A and Class C common stock, respectively, comprised of 211 and 86 redemption requests, respectively, which we fulfilled at an average price of $8.31 and $8.18 per share for the Class A and Class C common stock, respectively. As of the date of this Report, we have fulfilled all of the valid redemption requests that we received during the six months ended June 30, 2018. Except for redemptions sought in special circumstances, the redemption price of the shares listed above was 95% of our most recently published quarterly NAV. For shares redeemed under special circumstances, the redemption price was the greater of the price paid to acquire the shares from us or 95% of our most recently published quarterly NAV.

Summary of Financing

The table below summarizes our non-recourse mortgages and bonds payable (dollars in thousands):

	June 30, 2018			December 31, 2017
Carrying Value (a)
Fixed rate	$	1,161,580		$	1,123,540
Variable rate:
Amount subject to interest rate swaps and caps	116,265			100,181
Amount subject to floating interest rate	92,681			51,727
	208,946			151,908
	$	1,370,526		$	1,275,448
Percent of Total Debt
Fixed rate	85		%	88		%
Variable rate	15		%	12		%
	100		%	100		%
Weighted-Average Interest Rate at End of Period
Fixed rate	3.9		%	4.0		%
Variable rate (b)	4.8		%	4.1		%

___________

(a) Aggregate debt balance includes unamortized deferred financing costs totaling $8.3 million as of both June 30, 2018 and December 31, 2017, and unamortized discount, net of $0.2 million and unamortized premium, net of $1.1 million as of June 30, 2018 and December 31, 2017, respectively (Note 9).

(b) The impact of our derivative instruments is reflected in the weighted-average interest rates.

Cash Resources

At June 30, 2018, our cash resources consisted of cash and cash equivalents totaling $91.0 million. Of this amount, $40.6 million (at then-current exchange rates) was held in foreign subsidiaries, which may be subject to restrictions or significant costs should we decide to repatriate these funds. As of June 30, 2018, we had $26.9 million available to borrow under our third-party financing arrangements for either funding of construction or mortgage financing upon completion of certain of our build-to-suit and development projects (Note 9). Our cash resources may be used for future investments and can be used for working capital needs, other commitments, and distributions to our stockholders. In addition, our unleveraged properties had an aggregate carrying value of $97.1 million at June 30, 2018, although there can be no assurance that we would be able to obtain financing for these properties.

In July 2016, our board of directors and the board of directors of WPC approved unsecured loans from WPC to us for acquisition funding purposes, at the sole discretion of WPC’s management, of up to $50.0 million in the aggregate, at a rate equal to the rate at which WPC can borrow funds under its senior credit facility. At June 30, 2018, we had no such loans outstanding from WPC.

CPA:18 – Global 6/30/2018 10-Q– 48

Cash Requirements

During the next 12 months, we expect that our cash requirements will include payments to acquire new investments, funding capital commitments such as build-to-suit projects, paying distributions to our stockholders and to our affiliates that hold noncontrolling interests in entities we control, making share repurchases pursuant to our redemption plan, and making scheduled debt service payments, as well as other normal recurring operating expenses. One balloon payment totaling $5.6 million on our consolidated mortgage loan obligations is due during the next 12 months. Our Advisor is actively seeking to refinance this loan, although there can be no assurance that it will be able to do so on favorable terms, or at all. We expect to fund $115.4 million related to capital and other lease commitments during the next 12 months. We expect to fund future investments, capital commitments, any capital expenditures on existing properties, and scheduled and unscheduled debt payments on our mortgage loans through the use of our cash reserves, cash generated from operations, and proceeds from financings and asset sales.

Off-Balance Sheet Arrangements and Contractual Obligations

The table below summarizes our debt, off-balance sheet arrangements, and other contractual obligations (primarily our capital commitments and lease obligations) at June 30, 2018 and the effect that these arrangements and obligations are expected to have on our liquidity and cash flow in the specified future periods (in thousands):

	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Debt — principal (a)	$	1,378,537	$	12,597	$	244,992	$	416,549	$	704,399
Interest on borrowings and deferred acquisition fees	282,471		56,024		101,106		73,828		51,513
Capital commitments (b)	201,838		114,569		87,269		—		—
Operating and other lease commitments (c)	11,926		827		1,419		722		8,958
Deferred acquisition fees — principal (d)	4,800		2,634		2,166		—		—
Annual distribution and shareholder servicing fee (e)	4,780		1,046		3,734		—		—
Asset retirement obligations (f)	2,938		—		—		—		2,938
	$	1,887,290	$	187,697	$	440,686	$	491,099	$	767,808

__________

(a) Represents the non-recourse mortgages and bonds payable that we obtained in connection with our investments. At June 30, 2018, this excludes $8.3 million of deferred financing costs and $0.2 million of unamortized discount, net (Note 9).

(b) Capital commitments include our current build-to-suit projects totaling $198.6 million (Note 4) and $3.2 million of outstanding commitments on build-to-suit projects that have been placed into service.

(c) Operating commitments consist of rental obligations under ground leases. Other lease commitments consist of our estimated share of future rents payable pursuant to the advisory agreement for the purpose of leasing office space used for the administration of real estate entities, which is calculated as our allocable portion of WPC’s future minimum rent amounts using the allocation percentages for overhead reimbursement as of June 30, 2018 (Note 3).

(d) Represents deferred acquisition fees due to our Advisor as a result of our acquisitions. These fees are scheduled to be paid in three equal annual installments following the quarter in which a property was purchased.

(e) Represents the estimated liability for the present value of the remaining annual distribution and shareholder servicing fee in connection with our Class C common stock (Note 3).

(f) Represents the amount of future obligations estimated for the removal of asbestos and environmental waste in connection with certain of our acquisitions, payable upon the retirement or sale of the assets.

Amounts in the table above that relate to our foreign operations are based on the exchange rate of the local currencies at June 30, 2018, which consisted primarily of the euro and Norwegian krone and, to a lesser extent, the British pound sterling. At June 30, 2018, we had no material capital lease obligations for which we were the lessee, either individually or in the aggregate.

CPA:18 – Global 6/30/2018 10-Q– 49

Equity Method Investment

We have an interest in an unconsolidated investment that relates to a joint venture for the development of self-storage facilities in Canada (Note 4). This investment is jointly owned with a third party, which is also the general partner. At June 30, 2018, the total equity investment balance for these properties was $19.6 million. The joint venture also had total third-party recourse debt of $23.3 million.

Supplemental Financial Measures

In the real estate industry, analysts and investors employ certain non-GAAP supplemental financial measures in order to facilitate meaningful comparisons between periods and among peer companies. Additionally, in the formulation of our goals and in the evaluation of the effectiveness of our strategies, we use FFO, MFFO, and Adjusted MFFO, which are non-GAAP measures. We believe that these measures are useful to investors to consider because they may assist them to better understand and measure the performance of our business over time and against similar companies. A description of FFO, MFFO, and Adjusted MFFO and reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are provided below.

FFO, MFFO, and Adjusted MFFO

Due to certain unique operating characteristics of real estate companies, as discussed below, the National Association of Real Estate Investment Trusts, Inc., or NAREIT, an industry trade group, has promulgated a non-GAAP measure known as FFO which we believe to be an appropriate supplemental measure, when used in addition to and in conjunction with results presented in accordance with GAAP, to reflect the operating performance of a REIT. The use of FFO is recommended by the REIT industry as a supplemental non-GAAP measure. FFO is not equivalent to nor a substitute for net income or loss as determined under GAAP.

We define FFO, a non-GAAP measure, consistent with the standards established by the White Paper on FFO approved by the Board of Governors of NAREIT, as revised in February 2004. The White Paper defines FFO as net income or loss computed in accordance with GAAP, excluding gains or losses from sales of property, impairment charges on real estate, and depreciation and amortization from real estate assets; and after adjustments for unconsolidated partnerships and jointly owned investments. Adjustments for unconsolidated partnerships and jointly owned investments are calculated to reflect FFO. Our FFO calculation complies with NAREIT’s policy described above. However, NAREIT’s definition of FFO does not distinguish between the conventional method of equity accounting and the hypothetical liquidation at book value method of accounting for unconsolidated partnerships and jointly owned investments.

The historical accounting convention used for real estate assets requires straight-line depreciation of buildings and improvements. We believe that, since real estate values historically rise and fall with market conditions, including inflation, interest rates, the business cycle, unemployment, and consumer spending, presentations of operating results for a REIT using historical accounting for depreciation may be less informative. Historical accounting for real estate involves the use of GAAP. Any other method of accounting for real estate such as the fair value method cannot be construed to be any more accurate or relevant than the comparable methodologies of real estate valuation found in GAAP. Nevertheless, we believe that the use of FFO, which excludes the impact of real estate-related depreciation and amortization, as well as impairment charges of real estate-related assets, provides a more complete understanding of our performance to investors and to management; and when compared year over year, reflects the impact on our operations from trends in occupancy rates, rental rates, operating costs, general and administrative expenses, and interest costs, which may not be immediately apparent from net income. In particular, we believe it is appropriate to disregard impairment charges, as this is a fair value adjustment that is largely based on market fluctuations and assessments regarding general market conditions, which can change over time. While impairment charges are excluded from the calculation of FFO, it could be difficult to recover any impairment charges. However, FFO, MFFO, and Adjusted MFFO, as described below, should not be construed to be more relevant or accurate than the current GAAP methodology in calculating net income or in its applicability in evaluating the operating performance of the company. The method utilized to evaluate the value and performance of real estate under GAAP should be construed as a more relevant measure of operational performance and considered more prominently than the non-GAAP measures FFO, MFFO, and Adjusted MFFO and the adjustments to GAAP in calculating FFO, MFFO, and Adjusted MFFO.

CPA:18 – Global 6/30/2018 10-Q– 50

Changes in the accounting and reporting promulgations under GAAP (for acquisition fees and expenses from a capitalization/depreciation model to an expensed-as-incurred model) were put into effect in 2009. These changes to GAAP accounting for real estate subsequent to the establishment of NAREIT’s definition of FFO have prompted an increase in cash-settled expenses, such as acquisition fees that are typically accounted for as operating expenses. Management believes these fees and expenses do not affect our overall long-term operating performance. Publicly registered, non-traded REITs typically have a significant amount of acquisition activity and are substantially more dynamic during their initial years of investment and operation. While other start-up entities may also experience significant acquisition activity during their initial years, we believe that non-listed REITs are unique in that they have a limited life with targeted exit strategies within a relatively limited time frame after acquisition activity ceases. We currently intend to begin the process of achieving a liquidity event (i.e., listing of our common stock on a national exchange, a merger or sale of our assets, or another similar transaction) beginning in April 2022, which is seven years following the closing of our initial public offering. Due to the above factors and other unique features of publicly registered, non-traded REITs, the Institute for Portfolio Alternatives (formerly known as the Investment Program Association), or the IPA, an industry trade group, has standardized a measure known as MFFO, which the IPA has recommended as a supplemental measure for publicly registered non-traded REITs and which we believe to be another appropriate non-GAAP measure to reflect the operating performance of a non-traded REIT. MFFO is not equivalent to our net income or loss as determined under GAAP, and MFFO may not be a useful measure of the impact of long-term operating performance on value if we do not continue to operate with a limited life and targeted exit strategy, as currently intended. We believe that, because MFFO excludes costs that we consider more reflective of investing activities and other non-operating items included in FFO, and also excludes acquisition fees and expenses that affect our operations only in periods in which properties are acquired, MFFO can provide, on a going forward basis, an indication of the sustainability (that is, the capacity to continue to be maintained) of our operating performance after the period in which we are acquiring properties and once our portfolio is in place. By providing MFFO, we believe we are presenting useful information that assists investors and analysts to better assess the sustainability of our operating performance now that our initial public offering has been completed and once essentially all of our properties have been acquired. We also believe that MFFO is a recognized measure of sustainable operating performance by the non-traded REIT industry. Further, we believe MFFO is useful in comparing the sustainability of our operating performance, with the sustainability of the operating performance of other real estate companies that are not as involved in acquisition activities. MFFO should only be used to assess the sustainability of a company’s operating performance after a company’s offering has been completed and properties have been acquired, as it excludes acquisition costs that have a negative effect on a company’s operating performance during the periods in which properties are acquired.

We define MFFO, a non-GAAP measure, consistent with the IPA’s Practice Guideline 2010-01, Supplemental Performance Measure for Publicly Registered, Non-Listed REITs: Modified Funds from Operations, or the Practice Guideline, issued by the IPA in November 2010. The Practice Guideline defines MFFO as FFO further adjusted for the following items, included in the determination of GAAP net income, as applicable: acquisition fees and expenses; amounts relating to deferred rent receivables and amortization of above- and below-market leases and liabilities (which are adjusted in order to reflect such payments from a GAAP accrual basis to a cash basis of disclosing the rent and lease payments); accretion of discounts and amortization of premiums on debt investments; nonrecurring impairments of real estate-related investments (i.e., infrequent or unusual, not reasonably likely to recur in the ordinary course of business); mark-to-market adjustments included in net income; nonrecurring gains or losses included in net income from the extinguishment or sale of debt, hedges, foreign exchange, derivatives, or securities holdings where trading of such holdings is not a fundamental attribute of the business plan, unrealized gains or losses resulting from consolidation from, or deconsolidation to, equity accounting, and after adjustments for consolidated and unconsolidated partnerships and jointly owned investments, with such adjustments calculated to reflect MFFO on the same basis. The accretion of discounts and amortization of premiums on debt investments, unrealized gains and losses on hedges, foreign exchange, derivatives or securities holdings, unrealized gains and losses resulting from consolidations, as well as other listed cash flow adjustments are adjustments made to net income in calculating the cash flows provided by operating activities and, in some cases, reflect gains or losses that are unrealized and may not ultimately be realized.

Our MFFO calculation complies with the IPA’s Practice Guideline described above. In calculating MFFO, we exclude acquisition-related expenses, amortization of above- and below-market leases, fair value adjustments of derivative financial instruments, deferred rent receivables, and the adjustments of such items related to noncontrolling interests. Under GAAP, acquisition fees and expenses are characterized as operating expenses in determining operating net income. These expenses are paid in cash by a company. All paid and accrued acquisition fees and expenses will have negative effects on returns to investors, the potential for future distributions, and cash flows generated by the company, unless earnings from operations or net sales proceeds from the disposition of other properties are generated to cover the purchase price of the property, these fees and expenses, and other costs related to such property. Further, under GAAP, certain contemplated non-cash fair value and other non-cash adjustments are considered operating non-cash adjustments to net income in determining cash flow from operating activities.

CPA:18 – Global 6/30/2018 10-Q– 51

Our management uses MFFO and the adjustments used to calculate it in order to evaluate our performance against other non-traded REITs, which have limited lives with short and defined acquisition periods and targeted exit strategies shortly thereafter. As noted above, MFFO may not be a useful measure of the impact of long-term operating performance on value if we do not continue to operate in this manner. We believe that MFFO and the adjustments used to calculate it allow us to present our performance in a manner that takes into account certain characteristics unique to non-traded REITs, such as their limited life, defined acquisition period, and targeted exit strategy, and is therefore a useful measure for investors. For example, acquisition costs are generally funded from the proceeds of our offering and other financing sources and not from operations. By excluding expensed acquisition costs, the use of MFFO provides information consistent with management’s analysis of the operating performance of the properties. Additionally, fair value adjustments, which are based on the impact of current market fluctuations and underlying assessments of general market conditions, but can also result from operational factors such as rental and occupancy rates, may not be directly related or attributable to our current operating performance. By excluding such changes that may reflect anticipated and unrealized gains or losses, we believe MFFO provides useful supplemental information.

In addition, our management uses Adjusted MFFO as another measure of sustainable operating performance. Adjusted MFFO adjusts MFFO for deferred income tax expenses and benefits, which are non-cash items that may cause short-term fluctuations in net income but have no impact on current period cash flows. Additionally, we adjust MFFO to reflect the realized gains/losses on the settlement of foreign currency derivatives to arrive at Adjusted MFFO. Foreign currency derivatives are a fundamental part of our operations in that they help us manage the foreign currency exposure we have associated with cash flows from our international investments.

Presentation of this information is intended to provide useful information to investors as they compare the operating performance of different REITs, although it should be noted that not all REITs calculate FFO, MFFO, and Adjusted MFFO the same way, so comparisons with other REITs may not be meaningful. Furthermore, FFO, MFFO, and Adjusted MFFO are not necessarily indicative of cash flow available to fund cash needs and should not be considered as an alternative to net income as an indication of our performance, as an alternative to cash flows from operations as an indication of our liquidity, or indicative of funds available to fund our cash needs including our ability to make distributions to our stockholders. FFO, MFFO, and Adjusted MFFO should be reviewed in conjunction with other GAAP measurements as an indication of our performance.

Neither the SEC, NAREIT, nor any other regulatory body has passed judgment on the acceptability of the adjustments that we use to calculate FFO, MFFO, and Adjusted MFFO. In the future, the SEC, NAREIT, or another regulatory body may decide to standardize the allowable adjustments across the non-traded REIT industry and we would have to adjust our calculation and characterization of FFO, MFFO, or Adjusted MFFO accordingly.

CPA:18 – Global 6/30/2018 10-Q– 52

FFO, MFFO, and Adjusted MFFO were as follows (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Net (loss) income attributable to CPA:18 – Global	$	(334	)	$	5,784		$	9,993		$	6,405
Adjustments:
Depreciation and amortization of real property	17,070			18,795			34,748			37,814
Proportionate share of adjustments for noncontrolling interests	(1,701		)	(1,596		)	(3,449		)	(3,168		)
Proportionate share of adjustments to equity in net income of partially owned entities	118			89			281			103
Total adjustments	15,487			17,288			31,580			34,749
FFO (as defined by NAREIT) attributable to CPA:18 – Global	15,153			23,072			41,573			41,154
Adjustments:
Unrealized losses (gains) on foreign currency, derivatives, and other	3,780			(8,467		)	5,320			(10,502		)
Realized gains on foreign currency, derivatives, and other (a)	(1,570		)	(908		)	(11,014		)	(1,432		)
Straight-line and other rent adjustments (b)	(1,407		)	(1,208		)	(2,707		)	(2,355		)
Amortization of premium/discount on debt investments and fair market value adjustments, net	367			184			720			610
Proportionate share of adjustments for noncontrolling interests	82			111			106			195
Above- and below-market rent intangible lease amortization, net (c)	(32		)	(35		)	(58		)	(74		)
Acquisition and other expenses (d)	17			(7		)	17			45
Loss on extinguishment of debt	2			54			2			54
Total adjustments	1,239			(10,276		)	(7,614		)	(13,459		)
MFFO attributable to CPA:18 – Global	16,392			12,796			33,959			27,695
Adjustments:
Deferred taxes	(386		)	143			(926		)	307
Hedging gains	(11		)	411			57			859
Total adjustments	(397		)	554			(869		)	1,166
Adjusted MFFO attributable to CPA:18 – Global	$	15,995		$	13,350		$	33,090		$	28,861

__________

(a) During the three and six months ended June 30, 2018, we recognized gains of $0.9 million and $5.3 million, respectively, as a result of the insurance proceeds received for the rebuild of a property that was damaged by a tornado in 2017.

(b) Under GAAP, rental receipts are allocated to periods using an accrual basis. This may result in timing of income recognition that is significantly different than underlying contract terms. By adjusting for these items (to reflect such payments from a GAAP accrual basis to a cash basis of disclosing the rent and lease payments), management believes that MFFO and Adjusted MFFO provides useful supplemental information on the realized economic impact of lease terms and debt investments, provides insight on the contractual cash flows of such lease terms and debt investments, and aligns results with management’s analysis of operating performance.

(c) Under GAAP, certain intangibles are accounted for at cost and reviewed at least annually for impairment, and certain intangibles are assumed to diminish predictably in value over time and amortized, similar to depreciation and amortization of other real estate related assets that are excluded from FFO. However, because real estate values and market lease rates historically rise or fall with market conditions, management believes that by excluding charges relating to amortization of these intangibles, MFFO, and Adjusted MFFO provides useful supplemental information on the performance of the real estate.

(d) On January 1, 2017, we adopted ASU 2017-01 and, as a result, transaction costs are more likely to be capitalized since we expect most of our future acquisitions to be classified as asset acquisitions under this standard.

CPA:18 – Global 6/30/2018 10-Q– 53

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Market Risk

Market risk is the exposure to loss resulting from changes in interest rates, foreign currency exchange rates, and equity prices. The primary risks that we are exposed to are interest rate risk and foreign currency exchange risk. We are also exposed to further market risk as a result of tenant concentrations in certain industries and/or geographic regions, since adverse market factors can affect the ability of tenants in a particular industry/region to meet their respective lease obligations. In order to manage this risk, our Advisor views our collective tenant roster as a portfolio and attempts to diversify such portfolio so that we are not overexposed to a particular industry or geographic region.

Generally, we do not use derivative instruments to hedge credit/market risks or for speculative purposes. However, from time to time, we may enter into foreign currency forward contracts and collars to hedge our foreign currency cash flow exposures.

Interest Rate Risk

The values of our real estate, related fixed-rate debt obligations, and notes receivable investments are subject to fluctuations based on changes in interest rates. The value of our real estate is also subject to fluctuations based on local and regional economic conditions and changes in the creditworthiness of lessees, which may affect our ability to refinance property-level mortgage debt when balloon payments are scheduled (if we do not choose to repay the debt when due). Interest rates are highly sensitive to many factors, including governmental monetary and tax policies, domestic and international economic and political conditions, and other factors beyond our control. An increase in interest rates would likely cause the fair value of our assets to decrease. Increases in interest rates may also have an impact on the credit profile of certain tenants.

We are exposed to the impact of interest rate changes primarily through our borrowing activities. To limit this exposure, we have historically attempted to obtain non-recourse mortgage financing on a long-term, fixed-rate basis. However, from time to time, we or our joint investment partners have obtained, and may in the future obtain, variable-rate non-recourse mortgage loans, and, as a result, we have entered into, and may continue to enter into, interest rate swap agreements or interest rate cap agreements with counterparties. See Note 8 for additional information on our interest rate swaps and caps.

At June 30, 2018, our outstanding debt either bore interest at fixed rates, was swapped or capped to a fixed rate or, in the case of one of our Norwegian investments, inflation-linked to the Norwegian CPI. Our debt obligations are more fully described in Note 9 and Liquidity and Capital Resources — Summary of Financing in Item 1 above. The following table presents principal cash outflows for the remainder of 2018, each of the next four calendar years following December 31, 2018, and thereafter, based upon expected maturity dates of our debt obligations outstanding at June 30, 2018 (in thousands):

	2018 (Remainder)		2019		2020		2021		2022		Thereafter		Total		Fair value
Fixed-rate debt (a)	$	2,564	$	5,229	$	117,176	$	160,801	$	177,196	$	708,648	$	1,171,614	$	1,167,454
Variable rate debt	$	6,520	$	52,909	$	7,610	$	45,221	$	18,033	$	76,630	$	206,923	$	220,275

__________

(a) Amounts are based on the exchange rate at June 30, 2018, as applicable.

The estimated fair value of our fixed-rate debt and variable-rate debt, which either have effectively been converted to a fixed rate through the use of interest rate swaps or, in the case of one our Norwegian investments, is inflation-linked to the Norwegian CPI, is affected by changes in interest rates. A decrease or increase in interest rates of 1% would change the estimated fair value of this debt at June 30, 2018 by an aggregate increase of $53.7 million or an aggregate decrease of $59.6 million, respectively. Annual interest expense on our unhedged variable-rate debt at June 30, 2018 would increase or decrease by $0.9 million for each respective 1% change in annual interest rates.

As more fully described under Liquidity and Capital Resources — Summary of Financing in Item 2 above, a portion of our variable-rate debt in the table above bore interest at fixed rates at June 30, 2018, but has interest rate reset features that will change the fixed interest rates to then-prevailing market fixed rates at certain points during their term. This debt is generally not subject to short-term fluctuations in interest rates.

CPA:18 – Global 6/30/2018 10-Q– 54

Foreign Currency Exchange Rate Risk

We own international investments, primarily in Europe and, as a result, are subject to risk from the effects of exchange rate movements in various foreign currencies, primarily the euro and the Norwegian krone, which may affect future costs and cash flows. Although most of our foreign investments through the second quarter of 2018 were conducted in these currencies, we may conduct business in other currencies in the future. We manage foreign currency exchange rate movements by generally placing both our debt service obligation to the lender and the tenant’s rental obligation to us in the same currency. This reduces our overall exposure to the actual equity that we have invested and the equity portion of our cash flow. In addition, we may use currency hedging to further reduce the exposure to our equity cash flow. We are generally a net receiver of these currencies (we receive more cash than we pay out), therefore our foreign operations benefit from a weaker U.S. dollar and are adversely affected by a stronger U.S. dollar, relative to the foreign currency.

We have obtained, and may in the future obtain, non-recourse mortgage and bond financing in local currencies. To the extent that currency fluctuations increase or decrease rental revenues, as translated to U.S. dollars, the change in debt service, as translated to U.S. dollars, will partially offset the effect of fluctuations in revenue and, to some extent, mitigate the risk from changes in foreign currency exchange rates.

Scheduled future minimum rents, exclusive of renewals, under non-cancelable operating leases for our consolidated foreign operations as of June 30, 2018 during the remainder of 2018, each of the next four calendar years following December 31, 2018, and thereafter, are as follows (in thousands): 

Lease Revenues (a)	2018 (Remainder)		2019		2020		2021		2022		Thereafter		Total
Euro (b)	$	25,120	$	49,983	$	49,103	$	49,117	$	49,040	$	422,640	$	645,003
Norwegian krone (c)	6,994		13,890		13,616		12,911		12,467		55,732		115,610
British pound sterling (d)	1,549		3,376		3,282		3,031		2,762		11,587		25,587
	$	33,663	$	67,249	$	66,001	$	65,059	$	64,269	$	489,959	$	786,200

Scheduled debt service payments (principal and interest) for mortgage notes and bonds payable, for our foreign operations as of June 30, 2018, during the remainder of 2018, each of the next four calendar years following December 31, 2018, and thereafter, are as follows (in thousands):

Debt Service(a) (e)	2018 (Remainder)		2019		2020		2021		2022		Thereafter		Total
Euro (b)	$	6,510	$	13,272	$	96,491	$	79,774	$	40,787	$	155,487	$	392,321
Norwegian krone (c)	3,564		6,138		6,138		50,017		4,207		116,436		186,500
British pound sterling (d)	2,263		54,909		25,024		—		—		—		82,196
	$	12,337	$	74,319	$	127,653	$	129,791	$	44,994	$	271,923	$	661,017

__________

(a) Amounts are based on the applicable exchange rates at June 30, 2018. Contractual rents and debt obligations are denominated in the functional currency of the country where each property is located.

(b) We estimate that, for a 1% increase or decrease in the exchange rate between the euro and the U.S. dollar, there would be a corresponding change in the projected estimated property-level cash flow at June 30, 2018 of $2.5 million.

(c) We estimate that, for a 1% increase or decrease in the exchange rate between the Norwegian krone and the U.S. dollar, there would be a corresponding change in the projected estimated property-level cash flow at June 30, 2018 of $0.7 million.

(d) We estimate that, for a 1% increase or decrease in the exchange rate between the British pound sterling and the U.S. dollar, there would be a corresponding change in the projected estimated property-level cash flow at June 30, 2018 of $0.6 million.

(e) Interest on unhedged variable-rate debt obligations was calculated using the applicable annual interest rates and balances outstanding at June 30, 2018.

CPA:18 – Global 6/30/2018 10-Q– 55

As a result of scheduled balloon payments on certain of our international debt obligations, projected debt service obligations exceed projected lease revenues in 2020 and 2021 for investments denominated in the euro, in 2018 (remainder), 2019 and 2020 for the British pound sterling, and in 2021 and after 2022 for the Norwegian krone. We currently anticipate that, by their respective due dates, we will have refinanced certain of these loans, but there can be no assurance that we will be able to do so on favorable terms, if at all. If refinancing has not occurred, we would expect to use our cash resources to make these payments, if necessary.

Concentration of Credit Risk

Concentrations of credit risk arise when a number of tenants are engaged in similar business activities or have similar economic risks or conditions that could cause them to default on their lease obligations to us. We regularly monitor our portfolio to assess potential concentrations of credit risk as we make additional investments. While we believe our portfolio is reasonably well-diversified, it does contain concentrations in excess of 10% based on the percentage of our consolidated total revenues or pro rata ABR.

For the six months ended June 30, 2018, our consolidated portfolio had the following significant characteristics in excess of 10%, based on the percentage of our consolidated total revenues:

• 63% related to domestic properties, which included concentrations of 14% and 12% in Florida and Texas, respectively; and

• 37% related to international properties.

At June 30, 2018, our net-leased portfolio, which excludes our operating properties, had the following significant property and lease characteristics in excess of 10% in certain areas, based on the percentage of our pro rata ABR as of that date:

• 39% related to domestic properties;

• 61% related to international properties, which included a concentration of 16% in the Netherlands, 14% in Norway, and 11% in Germany;

• 49% related to office properties, 15% related to hotel properties, 13% related to industrial properties, 13% related to warehouse properties, and 10% related to retail properties; and

• 15% related to the hotel, gaming, and leisure industry and 11% related to the banking industry.

CPA:18 – Global 6/30/2018 10-Q– 56

Item 4. Controls and Procedures.

Disclosure Controls and Procedures

Our disclosure controls and procedures include internal controls and other procedures designed to provide reasonable assurance that information required to be disclosed in this and other reports filed under the Securities Exchange Act of 1934, as amended, or the Exchange Act, is recorded, processed, summarized, and reported within the required time periods specified in the SEC’s rules and forms; and that such information is accumulated and communicated to management, including our chief executive officer and chief financial officer, to allow timely decisions regarding required disclosures. It should be noted that no system of controls can provide complete assurance of achieving a company’s objectives and that future events may impact the effectiveness of a system of controls.

Our chief executive officer and chief financial officer, after conducting an evaluation, together with members of our management, of the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2018, have concluded that our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) were effective as of June 30, 2018 at a reasonable level of assurance.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

CPA:18 – Global 6/30/2018 10-Q– 57

PART II — OTHER INFORMATION

Item 2. Unregistered Sales of Equity Securities.

Unregistered Sales of Equity Securities

During the three months ended June 30, 2018, we issued 365,936 shares of our Class A common stock to our Advisor as consideration for asset management fees. These shares were issued at our most recently published NAV of $8.57 per share. Since none of these transactions were considered to have involved a “public offering” within the meaning of Section 4(a)(2) of the Securities Act of 1933, the shares issued were deemed to be exempt from registration. In acquiring our shares, our Advisor represented that such interests were being acquired by it for investment purposes and not with a view to the distribution thereof. From inception and through June 30, 2018, we have issued a total of 4,327,814 shares of our Class A common stock to our Advisor as consideration for asset management fees.

Issuer Purchases of Equity Securities

The following table provides information with respect to repurchases of our common stock pursuant to our redemption plan during the three months ended June 30, 2018:

	Class A			Class C
2018 Period	Total number of Class A shares purchased (a)	Average price paid per share		Total number of Class C shares purchased (a)	Average price paid per share		Total number of shares purchased as part of publicly announced plans or program (a)	Maximum number (or approximate dollar value)of shares that may yet be purchased under the plans or program (a)
April	—	$	—	—	$	—	N/A	N/A
May	—	—		—	—		N/A	N/A
June	612,957	8.39		269,547	8.17		N/A	N/A
Total	612,957			269,547

___________

(a) Represents shares of our Class A and Class C common stock requested to be repurchased under our redemption plan, pursuant to which we may elect to redeem shares at the request of our stockholders, subject to certain exceptions, conditions, and limitations. The maximum amount of shares purchasable by us in any period depends on a number of factors and is at the discretion of our board of directors. During the three months ended June 30, 2018, we received 118 and 51 redemption requests for Class A and Class C common stock, respectively. As of the date of this Report, we have fulfilled all of the valid redemptions requests that we received during the three months ended June 30, 2018. We generally receive fees in connection with share redemptions. The average price paid per share will vary depending on the number of redemption requests that were made during the period, the number of redemption requests that qualify for special circumstances, and the most recently published quarterly NAV.

CPA:18 – Global 6/30/2018 10-Q– 58

Item 6. Exhibits.

The following exhibits are filed with this Report, except where indicated.

Exhibit No.	Description	Method of Filing
31.1	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith
31.2	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith
32	Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	Filed herewith
101.INS	XBRL Instance Document	Filed herewith
101.SCH	XBRL Taxonomy Extension Schema Document	Filed herewith
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document	Filed herewith
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document	Filed herewith
101.LAB	XBRL Taxonomy Extension Label Linkbase Document	Filed herewith
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document	Filed herewith

CPA:18 – Global 6/30/2018 10-Q– 59

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

			Corporate Property Associates 18 – Global Incorporated
Date:	August 9, 2018
		By:	/s/ Mallika Sinha
			Mallika Sinha
			Chief Financial Officer
			(Principal Financial Officer)

CPA:18 – Global 6/30/2018 10-Q– 60

EXHIBIT INDEX

The following exhibits are filed with this Report, except where indicated.

Exhibit No.	Description	Method of Filing
31.1	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith
31.2	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith
32	Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	Filed herewith
101.INS	XBRL Instance Document	Filed herewith
101.SCH	XBRL Taxonomy Extension Schema Document	Filed herewith
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document	Filed herewith
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document	Filed herewith
101.LAB	XBRL Taxonomy Extension Label Linkbase Document	Filed herewith
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document	Filed herewith

EX-31.1

Exhibit 31.1

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Jason E. Fox, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Corporate Property Associates 18 – Global Incorporated;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an Annual Report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 9, 2018

/s/ Jason E. Fox    

Jason E. Fox

Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Mallika Sinha, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Corporate Property Associates 18 – Global Incorporated;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an Annual Report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 9, 2018

/s/ Mallika Sinha    

Mallika Sinha

Chief Financial Officer

EX-32

Exhibit 32

Certifications Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Corporate Property Associates 18 – Global Incorporated on Form 10-Q for the period ended June 30, 2018 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned officers of Corporate Property Associates 18 – Global Incorporated, does hereby certify, to the best of such officer’s knowledge and belief, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Corporate Property Associates 18 – Global Incorporated.

Date: August 9, 2018

/s/ Jason E. Fox    

Jason E. Fox

Chief Executive Officer

Date: August 9, 2018

/s/ Mallika Sinha    

Mallika Sinha

Chief Financial Officer

The certification set forth above is being furnished as an exhibit solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and is not being filed as part of the Report as a separate disclosure document of Corporate Property Associates 18 – Global Incorporated or the certifying officers.

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Corporate Property Associates 18 – Global Incorporated and will be retained by Corporate Property Associates 18 – Global Incorporated and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2018	Aug. 03, 2018
Document Information [Line Items]
Document Type	10-Q
Document Period End Date	Jun. 30, 2018
Amendment Flag	false
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--12-31
Entity Central Index Key	0001558235
Entity Filer Category	Non-accelerated Filer
Entity Registrant Name	Corporate Property Associates 18 Global Incorporated
Class A
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		113,956,225
Class C
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		31,713,872

XML

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Investments in real estate:
Real estate — Land, buildings and improvements	$ 1,275,023	$ 1,263,172
Operating real estate — Land, buildings and improvements	568,601	566,489
Real estate under construction	195,122	134,366
Net investments in direct financing leases	41,648	39,957
In-place lease intangible assets	270,957	274,723
Other intangible assets	34,967	35,811
Investments in real estate	2,386,318	2,314,518
Accumulated depreciation and amortization	(282,588)	(252,067)
Net investments in real estate	2,103,730	2,062,451
Cash and cash equivalents	90,971	71,068
Accounts receivable and other assets, net	204,242	197,478
Total assets	2,398,943	2,330,997
Debt:
Non-recourse mortgages, net	1,223,215	1,129,432
Bonds payable, net	147,311	146,016
Debt, net	1,370,526	1,275,448
Accounts payable, accrued expenses and other liabilities	149,808	148,031
Due to affiliates	11,780	13,767
Distributions payable	21,967	21,686
Total liabilities	1,554,081	1,458,932
Commitments and contingencies (Note 10)
Preferred stock, $0.001 par value; 50,000,000 shares authorized; none issued	0	0
Additional paid-in capital	1,273,685	1,257,840
Distributions and accumulated losses	(453,823)	(420,005)
Accumulated other comprehensive loss	(40,749)	(33,212)
Total stockholders’ equity	779,257	804,764
Noncontrolling interests	65,605	67,301
Total equity	844,862	872,065
Total liabilities and equity	2,398,943	2,330,997
Class A common stock
Debt:
Common stock	113	110
Class C common stock
Debt:
Common stock	$ 31	$ 31

XML

Condensed Consolidated Balance Sheets (Unaudited) (Parentheticals) - $ / shares	Jun. 30, 2018	Dec. 31, 2017
CPA®:18 – Global stockholders’ equity:
Preferred stock, par value (usd per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (shares)	50,000,000	50,000,000
Preferred stock, shares issued (shares)	0	0
Class A
CPA®:18 – Global stockholders’ equity:
Common stock, par value (usd per share)	$ 0.001	$ 0.001
Common stock, shares authorized (shares)	320,000,000	320,000,000
Common stock, shares outstanding (shares)	112,849,543	111,193,651
Class C
CPA®:18 – Global stockholders’ equity:
Common stock, par value (usd per share)	$ 0.001	$ 0.001
Common stock, shares authorized (shares)	80,000,000	80,000,000
Common stock, shares outstanding (shares)	31,410,984	31,189,137

XML

Condensed Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Lease revenues:
Rental income	$ 28,456	$ 24,542	$ 57,013	$ 47,902
Interest income from direct financing leases	913	906	1,831	1,880
Total lease revenue	29,369	25,448	58,844	49,782
Operating real estate income	20,309	20,316	39,972	39,696
Other operating income	3,930	3,426	7,447	6,443
Other interest income	1,795	1,783	3,575	3,532
Total revenues	55,403	50,973	109,838	99,453
Operating Expenses
Depreciation and amortization	16,892	18,728	34,524	37,679
Property expenses	10,190	10,209	20,024	18,418
Operating real estate expenses	8,220	8,448	16,379	16,482
General and administrative	1,800	1,752	3,445	3,481
Acquisition and other expenses	17	(7)	17	45
Operating Expenses	37,119	39,130	74,389	76,105
Other Income and Expenses
Interest expense	(13,294)	(11,791)	(26,224)	(23,244)
Other gains and (losses)	(2,072)	9,459	5,920	12,121
Equity in losses of equity method investment in real estate	(235)	(254)	(559)	(353)
Other Income and Expenses	(15,601)	(2,586)	(20,863)	(11,476)
Income before income taxes	2,683	9,257	14,586	11,872
Benefit from (provision for) income taxes	298	(1,123)	713	(1,193)
Net Income	2,981	8,134	15,299	10,679
Net income attributable to noncontrolling interests (inclusive of Available Cash Distributions to a related party of $2,830, $2,186, $4,735, and $3,861, respectively)	(3,315)	(2,350)	(5,306)	(4,274)
Net (Loss) Income Attributable to CPA:18 – Global	(334)	5,784	9,993	6,405
Class A
Other Income and Expenses
Interest expense	(100)	(100)	(100)	(200)
Net (Loss) Income Attributable to CPA:18 – Global	$ (213)	$ 4,600	$ 7,901	$ 5,179
Basic and diluted weighted-average shares outstanding (shares)	113,010,970	109,533,769	112,564,943	108,998,427
Basic and diluted income per share (in dollars per share)	$ 0.00	$ 0.04	$ 0.07	$ 0.05
Distributions declared per share (in dollars per share)	$ 0.1563	$ 0.1563	$ 0.3126	$ 0.3126
Class C
Other Income and Expenses
Net (Loss) Income Attributable to CPA:18 – Global	$ (121)	$ 1,184	$ 2,092	$ 1,226
Basic and diluted weighted-average shares outstanding (shares)	31,593,597	31,030,596	31,517,919	30,898,107
Basic and diluted income per share (in dollars per share)	$ 0.00	$ 0.04	$ 0.07	$ 0.04
Distributions declared per share (in dollars per share)	$ 0.1378	$ 0.1382	$ 0.2753	$ 0.2762

XML

Condensed Consolidated Statements of Income (Unaudited) (Parentheticals) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Income Statement [Abstract]
Distributions of available cash	$ 2,830	$ 2,186	$ 4,735	$ 3,861

XML

Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Statement of Comprehensive Income [Abstract]
Net Income	$ 2,981	$ 8,134	$ 15,299	$ 10,679
Other Comprehensive (Loss) Income
Foreign currency translation adjustments	(22,582)	19,541	(11,005)	23,697
Realized and unrealized gain (loss) on derivative instruments	3,418	(3,824)	2,759	(4,281)
Other Comprehensive (Loss) Income	(19,164)	15,717	(8,246)	19,416
Comprehensive (Loss) Income	(16,183)	23,851	7,053	30,095
Amounts Attributable to Noncontrolling Interests
Net income	(3,315)	(2,350)	(5,306)	(4,274)
Foreign currency translation adjustments	2,326	(2,265)	709	(2,795)
Comprehensive income attributable to noncontrolling interests	(989)	(4,615)	(4,597)	(7,069)
Comprehensive (Loss) Income Attributable to CPA:18 – Global	$ (17,172)	$ 19,236	$ 2,456	$ 23,026

XML

Condensed Consolidated Statements of Equity (Unaudited) - USD ($) $ in Thousands	Total	Class A	Class C	Total CPA 18 - Global Stockholders	Common Stock Class A	Common Stock Class C	Additional Paid-In Capital	Distributions and Accumulated Losses	Accumulated Other Comprehensive Loss	Noncontrolling Interests
Beginning equity balance, value at Dec. 31, 2016	$ 865,904			$ 799,899	$ 107	$ 30	$ 1,222,139	$ (360,673)	$ (61,704)	$ 66,005
Beginning equity balance, shares at Dec. 31, 2016					107,460,081	30,469,144
Statements of Equity
Shares issued, value	22,279			22,279	$ 2	$ 1	22,276
Shares issued, shares					2,133,836	687,204
Shares issued to affiliate, value	5,421			5,421	$ 1		5,420
Shares issued to affiliate, shares					686,096
Contributions from noncontrolling interests	3,118									3,118
Distributions to noncontrolling interests	(8,261)									(8,261)
Distributions declared	(42,611)			(42,611)				(42,611)
Net Income	10,679			6,405				6,405		4,274
Other comprehensive (loss) income:
Foreign currency translation adjustments	23,697			20,902					20,902	2,795
Realized and unrealized loss on derivative instruments	(4,281)			(4,281)					(4,281)
Repurchase of shares, value	(7,349)			(7,349)	$ (1)	$ 0	(7,348)
Repurchase of shares, shares					(822,433)	(127,524)
Ending equity balance, value at Jun. 30, 2017	868,596			800,665	$ 109	$ 31	1,242,487	(396,879)	(45,083)	67,931
Ending equity balance, shares at Jun. 30, 2017					109,457,580	31,028,824
Beginning equity balance, value at Mar. 31, 2017									(58,535)
Statements of Equity
Net Income	8,134
Other comprehensive (loss) income:
Foreign currency translation adjustments	19,541
Realized and unrealized loss on derivative instruments	(3,824)
Ending equity balance, value at Jun. 30, 2017	868,596			800,665	$ 109	$ 31	1,242,487	(396,879)	(45,083)	67,931
Ending equity balance, shares at Jun. 30, 2017					109,457,580	31,028,824
Beginning equity balance, value at Dec. 31, 2017	872,065			804,764	$ 110	$ 31	1,257,840	(420,005)	(33,212)	67,301
Beginning equity balance, shares at Dec. 31, 2017		111,193,651	31,189,137		111,193,651	31,189,137
Statements of Equity
Shares issued, value	22,015			22,015	$ 2	$ 1	22,012
Shares issued, shares					2,008,147	625,174
Shares issued to affiliate, value	5,971			5,971	$ 1		5,970
Shares issued to affiliate, shares					711,157
Contributions from noncontrolling interests	1,174									1,174
Distributions to noncontrolling interests	(7,467)									(7,467)
Distributions declared	(43,811)			(43,811)				(43,811)
Net Income	15,299			9,993				9,993		5,306
Other comprehensive (loss) income:
Foreign currency translation adjustments	(11,005)			(10,296)					(10,296)	(709)
Realized and unrealized loss on derivative instruments	2,759			2,759					2,759
Repurchase of shares, value	(12,138)			(12,138)	$ 0	$ (1)	(12,137)
Repurchase of shares, shares					(1,063,412)	(403,327)
Ending equity balance, value at Jun. 30, 2018	844,862			779,257	$ 113	$ 31	1,273,685	(453,823)	(40,749)	65,605
Ending equity balance, shares at Jun. 30, 2018		112,849,543	31,410,984		112,849,543	31,410,984
Beginning equity balance, value at Mar. 31, 2018									(23,911)
Statements of Equity
Net Income	2,981
Other comprehensive (loss) income:
Foreign currency translation adjustments	(22,582)
Realized and unrealized loss on derivative instruments	3,418
Ending equity balance, value at Jun. 30, 2018	$ 844,862			$ 779,257	$ 113	$ 31	$ 1,273,685	$ (453,823)	$ (40,749)	$ 65,605
Ending equity balance, shares at Jun. 30, 2018		112,849,543	31,410,984		112,849,543	31,410,984

XML

Condensed Consolidated Statements of Equity (Unaudited) (Parentheticals) - $ / shares	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Class A
Statements of Equity
Distributions declared per share (in dollars per share)	$ 0.3126	$ 0.3126
Class C
Statements of Equity
Distributions declared per share (in dollars per share)	0.2753	0.2762
Common Stock | Class A
Statements of Equity
Distributions declared per share (in dollars per share)	0.3126	0.3126
Common Stock | Class C
Statements of Equity
Distributions declared per share (in dollars per share)	$ 0.2753	$ 0.2762

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Cash Flows — Operating Activities
Net Cash Provided by Operating Activities	$ 44,960	$ 43,091
Cash Flows — Investing Activities
Funding and advances for build-to-suit projects	(44,941)	(30,497)
Acquisitions of real estate, build-to-suit projects and direct financing leases	(37,985)	(27,331)
Proceeds from insurance settlements	7,074	3,895
Capital expenditures on real estate	(7,033)	(5,458)
Value added taxes refunded in connection with the acquisitions of real estate	3,374	12,050
Value added taxes paid in connection with acquisitions of real estate	(3,290)	(2,491)
Proceeds from repayment of notes receivable	2,546	0
Payment of deferred acquisition fees to an affiliate	(2,238)	(2,854)
Proceeds from sale of real estate	771	0
Other investing activities, net	12	(39)
Capital contributions to equity investment	(6)	(5,616)
Return of capital from equity investments	0	236
Net Cash Used in Investing Activities	(81,716)	(58,105)
Cash Flows — Financing Activities
Proceeds from mortgage financing	128,010	32,613
Distributions paid	(43,530)	(42,210)
Scheduled payments and prepayments of mortgage principal	(22,654)	(6,323)
Proceeds from issuance of shares	20,970	21,175
Repurchase of shares	(12,138)	(7,349)
Distributions to noncontrolling interests	(7,467)	(8,261)
Contributions from noncontrolling interests	1,174	2,339
Payment of deferred financing costs and mortgage deposits	(965)	(526)
Other financing activities, net	540	(43)
Proceeds from notes payable to affiliate	0	11,196
Repayment of notes payable to affiliate	0	(4,495)
Net Cash Provided by (Used in) Financing Activities	63,940	(1,884)
Change in Cash and Cash Equivalents and Restricted Cash During the Period
Effect of exchange rate changes on cash and cash equivalents and restricted cash	(2,690)	2,776
Net increase (decrease) in cash and cash equivalents and restricted cash	24,494	(14,122)
Cash and cash equivalents and restricted cash, beginning of period	90,183	93,741
Cash and cash equivalents and restricted cash, end of period	$ 114,677	$ 79,619

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Organization

6 Months Ended

Jun. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization

Organization

Organization

Corporate Property Associates 18 – Global Incorporated, or CPA:18 – Global, and, together with its consolidated subsidiaries, we, us, or our, is a publicly owned, non-traded REIT, that invests primarily in a diversified portfolio of income-producing commercial real estate properties leased to companies and other real estate related assets, both domestically and internationally. We were formed in 2012 and are managed by W. P. Carey Inc., or WPC, through one of its subsidiaries, or collectively, our Advisor. As a REIT, we are not subject to U.S. federal income taxation as long as we satisfy certain requirements, principally relating to the nature of our income and the level of our distributions, among other factors. We earn revenue primarily by leasing the properties we own to single corporate tenants, predominantly on a triple-net lease basis, which requires the tenant to pay substantially all of the costs associated with operating and maintaining the property. Revenue is subject to fluctuation due to the timing of new lease transactions, lease terminations, lease expirations, contractual rent adjustments, tenant defaults, sales of properties, and changes in foreign currency exchange rates.

Substantially all of our assets and liabilities are held by CPA:18 Limited Partnership, or the Operating Partnership, and at June 30, 2018 we owned 99.97% of general and limited partnership interests in the Operating Partnership. The remaining interest in the Operating Partnership is held by a subsidiary of WPC.

At June 30, 2018, our portfolio was comprised of full or partial ownership interests in 59 properties, substantially all of which were fully-occupied and triple-net leased to 100 tenants totaling 10.2 million square feet. The remainder of our portfolio was comprised of our full or partial ownership interests in 69 self-storage properties and 14 multi-family and student-housing properties totaling 6.7 million square feet.

We operate in three reportable business segments: Net Lease, Self Storage, and Multi-Family. Our Net Lease segment includes our investments in net-leased properties, whether they are accounted for as operating leases or direct financing leases. Our Self Storage segment is comprised of our investments in self-storage properties. Our Multi-Family segment is comprised of our investments in six multi-family residential properties and eight student-housing developments. In addition, we have an All Other category that includes our notes receivable investments (Note 12). Our reportable business segments and All Other category are the same as our reporting units.

We raised aggregate gross proceeds in our initial public offering of approximately $1.2 billion through April 2, 2015, which is the date we closed our offering. We have fully invested the proceeds from our initial public offering. In addition, from inception through June 30, 2018, $133.6 million and $37.0 million of distributions to our shareholders were reinvested in our Class A and Class C common stock, respectively, through our Distribution Reinvestment Plan, or DRIP.

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Basis of Presentation

6 Months Ended

Jun. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

Basis of Presentation

Basis of Presentation

Our interim condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and, therefore, do not necessarily include all information and footnotes necessary for a fair statement of our consolidated financial position, results of operations, and cash flows in accordance with generally accepted accounting principles in the United States, or GAAP. The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP.

In the opinion of management, the unaudited financial information for the interim periods presented in this Report reflects all normal and recurring adjustments necessary for a fair statement of financial position, results of operations, and cash flows. Our interim condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and accompanying notes for the year ended December 31, 2017, which are included in the 2017 Annual Report, as certain disclosures that would substantially duplicate those contained in the audited consolidated financial statements have not been included in this Report. Operating results for interim periods are not necessarily indicative of operating results for an entire year.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and the disclosure of contingent amounts in our condensed consolidated financial statements and the accompanying notes. Actual results could differ from those estimates.

Basis of Consolidation

Our condensed consolidated financial statements reflect all of our accounts, including those of our controlled subsidiaries. The portions of equity in consolidated subsidiaries that are not attributable, directly or indirectly, to us are presented as noncontrolling interests. All significant intercompany accounts and transactions have been eliminated.

When we obtain an economic interest in an entity, we evaluate the entity to determine if it should be deemed a variable interest entity, or VIE, and, if so, whether we are the primary beneficiary and are therefore required to consolidate the entity. We apply accounting guidance for consolidation of VIEs to certain entities in which the equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. Fixed price purchase and renewal options within a lease, as well as certain decision-making rights within a loan or joint-venture agreement, can cause us to consider an entity a VIE. Limited partnerships and other similar entities that operate as a partnership will be considered VIEs unless the limited partners hold substantive kick-out rights or participation rights. Significant judgment is required to determine whether a VIE should be consolidated. We review the contractual arrangements provided for in the partnership agreement or other related contracts to determine whether the entity is considered a VIE and to establish whether we have any variable interests in the VIE. We then compare our variable interests, if any, to those of the other variable interest holders to determine which party is the primary beneficiary of the VIE based on whether the entity (i) has the power to direct the activities that most significantly impact the economic performance of the VIE and (ii) has the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. The liabilities of these VIEs are non-recourse to us and can only be satisfied from each VIE’s respective assets.

At June 30, 2018, we considered 16 entities to be VIEs, 15 of which we consolidated as we are considered the primary beneficiary. At December 31, 2017, we considered 12 entities to be VIEs, 11 of which we consolidated. The following table presents a summary of selected financial data of the consolidated VIEs included in the condensed consolidated balance sheets (in thousands):

	June 30, 2018			December 31, 2017
Real estate — Land, buildings and improvements	$	370,439		$	373,954
Real estate under construction	171,872			107,732
In-place lease intangible assets	87,185			88,617
Other intangible assets	17,536			18,040
Accumulated depreciation and amortization	(61,354		)	(54,592		)
Cash and cash equivalents	10,585			5,030
Accounts receivable and other assets, net	34,167			33,219
Total assets	630,430			572,000
Non-recourse mortgages, net	$	255,406		$	218,267
Bonds payable, net	60,945			60,577
Accounts payable, accrued expenses and other liabilities	52,637			46,858
Total liabilities	368,988			325,702

At both June 30, 2018 and December 31, 2017, we hadone unconsolidated VIE, which we account for under the equity method of accounting. We do not consolidate this entity because we are not the primary beneficiary and the nature of our involvement in the activities of the entity allows us to exercise significant influence on, but does not give us power over, decisions that significantly affect the economic performance of the entity. As of June 30, 2018 and December 31, 2017, the net carrying amount of this equity investment was $19.6 million and $20.9 million, respectively, and our maximum exposure to loss in this entity is limited to our investment. 

At times, the carrying value of our equity investment may fall below zero for certain investments. We intend to fund our share of the jointly owned investment’s future operating deficits should the need arise. However, we have no legal obligation to pay for any of the liabilities of such investments nor do we have any legal obligation to fund the operating deficits. At both June 30, 2018 and December 31, 2017, our sole equity investment did not have a carrying value below zero.

Accounting Policy Update

Distributions from Equity Method Investments — We classify distributions received from equity method investments using the cumulative earnings approach. Distributions received are considered returns on the investment and classified as cash inflows from operating activities. If, however, the investor’s cumulative distributions received, less distributions received in prior periods determined to be returns of investment, exceeds cumulative equity in earnings recognized, the excess is considered a return of investment and is classified as cash inflows from investing activities.

Reclassifications 

Certain prior period amounts have been reclassified to conform to the current period presentation.

In the second quarter of 2018, we reclassified notes receivable, equity investment in real estate, and goodwill to be included within Accounts receivable and other assets, net in our condensed consolidated balance sheets. Additionally, we reclassified deferred income taxes to be included within Accounts payable, accrued expenses and other liabilities in our condensed consolidated balance sheets. Prior period balances have been reclassified to conform to the current period presentation.

The following table presents a summary of amounts included in Accounts receivable and other assets, net in the condensed consolidated financial statements (in thousands):

	June 30, 2018		December 31, 2017
Accounts receivable and other assets, net
Notes receivable (Note 5)	$	63,954	$	66,500
Accounts receivable, net	33,249		32,572
Goodwill (Note 6)	27,562		26,084
Restricted cash	23,706		19,115
Equity investment in real estate (Note 4)	19,594		20,919
Prepaid expenses	14,484		13,496
Other assets	21,693		18,792
	$	204,242	$	197,478

The following table presents a summary of amounts included in Accounts payable, accrued expenses and other liabilities in the condensed consolidated financial statements (in thousands):

	June 30, 2018		December 31, 2017
Accounts payable, accrued expenses and other liabilities
Deferred income taxes	$	61,619	$	63,980
Accounts payable and accrued expenses	40,769		39,626
Deferred revenue	13,622		11,975
Intangible liabilities, net (Note 6)	10,393		11,009
Other liabilities	23,405		21,441
	$	149,808	$	148,031

Restricted Cash — In connection with our adoption of Accounting Standards Update, or ASU, 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, as described below, we revised our condensed consolidated statements of cash flows to include restricted cash when reconciling the beginning-of-period and end-of-period cash amounts shown on the statement of cash flows. As a result, we retrospectively revised prior periods presented to conform to the current period presentation. Restricted cash primarily consists of security deposits and amounts required to be reserved pursuant to lender agreements for debt service, capital improvements, and real estate taxes. The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the condensed consolidated balance sheets to the condensed consolidated statements of cash flows (in thousands):

	June 30, 2018		December 31, 2017
Cash and cash equivalents	$	90,971	$	71,068
Restricted cash (a)	23,706		19,115
Total cash and cash equivalents and restricted cash	$	114,677	$	90,183

__________

(a) Restricted cash is included within Accounts receivable and other assets, net on our condensed consolidated balance sheets.

Recent Accounting Pronouncements

Pronouncements Adopted as of June 30, 2018

In May 2014, the Financial Accounting Standards Board, or FASB, issued ASU2014-09, Revenue from Contracts with Customers (Topic 606). ASU 2014-09 is a comprehensive new revenue recognition model requiring a company to recognize revenue to depict the transfer of goods or services to a customer at an amount reflecting the consideration it expects to receive in exchange for those goods or services. ASU 2014-09 does not apply to our lease revenues, which constitute a majority of our revenues, but will primarily apply to revenues generated from our operating properties. We adopted this guidance for our interim and annual periods beginning January 1, 2018 using the modified retrospective transition method applied to any contracts not completed as of that date. There were no changes to the prior period presentations of revenue. Results of operations for reporting periods beginning January 1, 2018 are presented under Topic 606. The adoption of Topic 606 did not have a material impact on our condensed consolidated financial statements.

Revenue is recognized when, or as, control of promised goods or services is transferred to customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. At contract inception, we assess the services promised in our contracts with customers and identify a performance obligation for each promise to transfer to the customer a good or service (or bundle of goods or services) that is distinct. To identify the performance obligations, we consider all of the services promised in the contract regardless of whether they are explicitly stated or are implied by customary business practices.

In January 2016, the FASB issued ASU 2016-01, Financial Instruments — Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. ASU 2016-01 requires all equity investments (other than those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value, with changes in the fair value recognized through net income. We adopted this guidance for our interim and annual periods beginning January 1, 2018. The adoption of ASU 2016-01 did not have a material impact on our condensed consolidated financial statements.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. ASU 2016-15 intends to reduce diversity in practice for certain cash flow classifications, including, but not limited to (i) debt prepayment or debt extinguishment costs, (ii) contingent consideration payments made after a business combination, (iii) proceeds from the settlement of insurance claims, and (iv) distributions received from equity method investees. We retrospectively adopted this guidance for our interim and annual periods beginning January 1, 2018. The adoption of ASU 2016-15 did not have a material impact on our condensed consolidated financial statements.

In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. ASU 2016-18 intends to reduce diversity in practice for the classification and presentation of changes in restricted cash on the statement of cash flows. ASU 2016-18 requires that the statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. We retrospectively adopted this guidance for our interim and annual periods beginning January 1, 2018. See Restricted Cash above for additional information.

In February 2017, the FASB issued ASU 2017-05, Other Income — Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets. ASU 2017-05 clarifies the scope and application of Accounting Standards Codification, or ASC, 610-20 on the sale or transfer of nonfinancial assets and in substance nonfinancial assets to non-customers, including partial sales. Nonfinancial assets within the scope of this Subtopic include the sale of land, buildings and intangible assets. ASU 2017-05 further clarifies that a financial asset is within the scope of Subtopic 610-20 if it meets the definition of an in substance nonfinancial asset. The amendments define the term “in substance nonfinancial asset,” in part, as a financial asset promised to a counterparty in a contract if substantially all of the fair value of the assets (recognized and unrecognized) that are promised to the counterparty in the contract is concentrated in nonfinancial assets. This amendment also clarifies that nonfinancial assets within the scope of Subtopic 610-20 may include nonfinancial assets transferred within a legal entity to a counterparty. For example, a parent company may transfer control of nonfinancial assets by transferring ownership interests in a consolidated subsidiary. We adopted this guidance for our interim and annual periods beginning January 1, 2018 and applied the modified retrospective transition method (applicable to any contracts not completed as of that date). The adoption of ASU 2017-05 did not have a material impact on our condensed consolidated financial statements.

Pronouncements to be Adopted after June 30, 2018

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 modifies the principles for the recognition, measurement, presentation, and disclosure of leases for both parties to a contract, the lessee and the lessor. ASU 2016-02 provides new guidelines that change the accounting for leasing arrangements for lessees, whereby their rights and obligations under substantially all leases, existing and new, would be capitalized and recorded on the balance sheet. For lessors, however, the accounting remains largely equivalent to the current model, with the distinction between operating, sales-type, and direct financing leases retained, but updated to align with certain changes to the lessee model and the new revenue recognition standard. ASU 2016-02 also replaces existing sale-leaseback guidance with a new model that requires symmetrical accounting between the seller-lessee and buyer-lessor. Additionally, ASU 2016-02 requires lessors to record costs paid directly by a lessee on behalf of a lessor (e.g., real estate taxes and insurance costs) on a gross basis and will require extensive quantitative and qualitative disclosures.

Early application is permitted for all entities. ASU 2016-02 provides two transition methods. The first transition method allows for application of the new model at the beginning of the earliest comparative period presented. Under the second transition method, comparative periods would not be restated, with any cumulative effect adjustments recognized in the opening balance of retained earnings in the period of adoption. In addition, a practical expedient was recently issued by the FASB, which allows lessors to combine non-lease components with related lease components if certain conditions are met. Further, in March 2018, the FASB approved, but has not yet finalized or issued, an update to allow lessors to make a policy election to record certain costs (e.g., insurance) paid directly by the lessee net, if the uncertainty regarding these variable amounts is not expected to ultimately be resolved. We will adopt this guidance for our interim and annual periods beginning January 1, 2019 and expect to use the second transition method. ASU 2016-02 is expected to impact our condensed consolidated financial statements as we have certain operating office and land lease arrangements for which we are the lessee and also certain lease arrangements that include common area maintenance services (non-lease components) where we are the lessor. We are evaluating the impact of ASU 2016-02 and have not yet determined if it will have a material impact on our business or our condensed consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses. ASU 2016-13 introduces a new model for estimating credit losses based on current expected credit losses for certain types of financial instruments, including loans receivable, held-to-maturity debt securities, and net investments in direct financing leases, amongst other financial instruments. ASU 2016-13 also modifies the impairment model for available-for-sale debt securities and expands the disclosure requirements regarding an entity’s assumptions, models, and methods for estimating the allowance for losses. ASU 2016-13 will be effective for public business entities in fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, with early application of the guidance permitted. We are in the process of evaluating the impact of adopting ASU 2016-13 on our condensed consolidated financial statements.

In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. ASU 2017-12 will make more financial and nonfinancial hedging strategies eligible for hedge accounting. It also amends the presentation and disclosure requirements and changes how companies assess hedge effectiveness. It is intended to more closely align hedge accounting with companies’ risk management strategies, simplify the application of hedge accounting, and increase transparency as to the scope and results of hedging programs. ASU 2017-12 will be effective in fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. We are in the process of evaluating the impact of adopting ASU 2017-12 on our condensed consolidated financial statements, and will adopt the standard for the fiscal year beginning January 1, 2019.

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Agreements and Transactions with Related Parties

6 Months Ended

Jun. 30, 2018

Related Party Transactions [Abstract]

Agreements and Transactions with Related Parties

Agreements and Transactions with Related Parties

Transactions with Our Advisor

We have an advisory agreement with our Advisor whereby our Advisor performs certain services for us under a fee arrangement, including the identification, evaluation, negotiation, purchase, and disposition of real estate and related assets and mortgage loans; day-to-day management; and the performance of certain administrative duties. We also reimburse our Advisor for general and administrative duties performed on our behalf. The advisory agreement has a term of one year and may be renewed for successive one-year periods. We may terminate the advisory agreement upon 60 days’ written notice without cause or penalty.

The following tables present a summary of fees we paid, expenses we reimbursed, and distributions we made to our Advisor and other affiliates (which excludes the annual distribution and shareholder servicing fee that impacts equity as further disclosed below the tables), in accordance with the terms of the relevant agreements (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018			2017
Amounts Included in the Condensed Consolidated Statements of Operations
Asset management fees	$	3,151	$	2,767	$	6,025		$	5,476
Available Cash Distributions	2,830		2,186		4,735			3,861
Personnel and overhead reimbursements	716		787		1,433			1,569
Director compensation	40		53		80			105
Interest expense on deferred acquisition fees, affiliate loan, and accretion of interest on annual distribution and shareholder servicing fee (a)	20		319		(42		)	620
	$	6,757	$	6,112	$	12,231		$	11,631
Advisor Fees Capitalized
Current acquisition fees	$	2,379	$	—	$	3,100		$	1,393
Deferred acquisition fees	1,903		—		2,480			1,114
Capitalized personnel and overhead reimbursements	259		2		371			184
	$	4,541	$	2	$	5,951		$	2,691

__________

(a) For the three and six months ended June 30, 2018 interest on the annual distribution and shareholder servicing fee is excluded as it is paid directly to selected dealers rather than through Carey Financial LLC, or Carey Financial, as discussed further below.

The following table presents a summary of amounts included in Due to affiliates in the condensed consolidated financial statements (in thousands):

	June 30, 2018		December 31, 2017
Due to Affiliates
Deferred acquisition fees, including accrued interest	$	5,786	$	6,693
Accounts payable and other	3,316		6,102
Current acquisition fees	1,652		—
Asset management fees payable	1,026		972
	$	11,780	$	13,767

Loans from WPC

In July 2016, our board of directors and the board of directors of WPC approved unsecured loans from WPC to us, at the sole discretion of WPC’s management, of up to $50.0 million in the aggregate, at a rate equal to the rate at which WPC can borrow funds under its senior credit facility, for acquisition funding purposes.

As of June 30, 2018 and December 31, 2017, we had no loans outstanding to WPC.

Asset Management Fees

Pursuant to the advisory agreement, our Advisor is entitled to an annual asset management fee ranging from 0.5% to 1.5%, depending on the type of investment and based on the average market value or average equity value, as applicable, of our investments. Asset management fees are payable in cash and/or shares of our Class A common stock at our option, after consultation with our Advisor. If our Advisor receives all or a portion of its fees in shares, the number of shares issued is determined by dividing the dollar amount of fees by our most recently published estimated net asset value per share, or NAV, per Class A share, which was $8.57 as of March 31, 2018. For the three and six months ended June 30, 2018 and the year ended December 31, 2017, our Advisor received its asset management fees in shares of our Class A common stock. At June 30, 2018, our Advisor owned 4,327,814 shares, or 3.0%, of our outstanding Class A common stock. Asset management fees are included in Property expenses in the condensed consolidated financial statements.

Annual Distribution and Shareholder Servicing Fee

Through June 30, 2017, Carey Financial, the wholly-owned subsidiary of our Advisor that was a registered broker-dealer, was entitled to receive an annual distribution and shareholder servicing fee from us in connection with our Class C common stock, which it may have re-allowed to selected dealers. Beginning with the payment for the third quarter of 2017 (paid during the first month of the fourth quarter of 2017) the annual distribution and shareholder servicing fees are paid directly to selected dealers rather than through Carey Financial. The amount of the annual distribution and shareholder servicing fee is 1.0% of the most recently published NAV of our Class C common stock. The annual distribution and shareholder servicing fee accrues daily and is payable quarterly in arrears. We will no longer incur the annual distribution and shareholder servicing fee beginning on the date at which, in the aggregate, underwriting compensation from all sources reaches 10.0% of the gross proceeds from our initial public offering, which it had not yet reached as of June 30, 2018. At June 30, 2018 and December 31, 2017, we recorded a liability of $4.8 million and $5.7 million, respectively, within Accounts payable, accrued expenses and other liabilities in the condensed consolidated financial statements.

Acquisition and Disposition Fees

Our Advisor receives acquisition fees, a portion of which is payable upon acquisition, while the remaining portion is subordinated to a preferred return of a non-compounded cumulative distribution of 5.0% per annum (based initially on our invested capital). The initial acquisition fee and subordinated acquisition fee are 2.5% and 2.0%, respectively, of the aggregate total cost of our portion of each investment for all investments, other than those in readily marketable real estate securities purchased in the secondary market, for which our Advisor will not receive any acquisition fees. Deferred acquisition fees are scheduled to be paid in three equal annual installments following the quarter in which a property was purchased and are subject to the preferred return described above. The preferred return was achieved as of the periods ended June 30, 2018 and December 31, 2017. Unpaid installments of deferred acquisition fees are included in Due to affiliates in the condensed consolidated financial statements and bear interest at an annual rate of 2.0%. The cumulative total acquisition costs, including acquisition fees paid to the advisor, may not exceed 6.0% of the aggregate contract purchase price of all investments, which is measured at the end of each year. During the year ended December 31, 2017, we overpaid acquisition fees to our Advisor totaling $0.7 million, and as a result, we recorded a reimbursement receivable from our Advisor for this amount and included it within Accounts receivable and other assets, net in our condensed consolidated financial statements. This amount was repaid to us during the period ended June 30, 2018.

In addition, our Advisor may be entitled to receive a disposition fee equal to the lesser of (i) 50.0% of the competitive real estate commission (as defined in the advisory agreement) or (ii) 3.0% of the contract sales price of the investment being sold. These fees are paid at the discretion of our board of directors.

Personnel and Overhead Reimbursements

Under the terms of the advisory agreement, our Advisor allocates a portion of its personnel and overhead expenses to us and the other entities that are managed by WPC and its affiliates, including Corporate Property Associates 17 – Global, Carey Watermark Investors Incorporated, Carey Watermark Investors 2 Incorporated, and Carey European Housing Fund I L.P., which are collectively referred to as the Managed Programs. Our Advisor also allocated a portion of its personnel and overhead expenses to Carey Credit Income Fund (now known as Guggenheim Credit Income Fund) prior to September 11, 2017, which was the effective date of its resignation as the advisor to that fund. Our Advisor allocates these expenses to us on the basis of our trailing four quarters of reported revenues in comparison to those of WPC and other entities managed by WPC and its affiliates.

We reimburse our Advisor for various expenses it incurs in the course of providing services to us. We reimburse certain third-party expenses paid by our Advisor on our behalf, including property-specific costs, professional fees, office expenses, and business development expenses. In addition, we reimburse our Advisor for the allocated costs of personnel and overhead in managing our day-to-day operations, including accounting services, stockholder services, corporate management, and property management and operations. We do not reimburse our Advisor for the cost of personnel if these personnel provide services for transactions for which our Advisor receives a transaction fee, such as for acquisitions and dispositions. Under the advisory agreement, the amount of applicable personnel costs allocated to us is capped at 1.0% and 2.0% for 2018 and 2017, respectively, of pro rata lease revenues for each year. Costs related to our Advisor’s legal transactions group are based on a schedule of expenses relating to services performed for different types of transactions, such as financing, lease amendments, and dispositions, among other categories, and includes 0.25% of the total investment cost of an acquisition. In general, personnel and overhead reimbursements are included in General and administrative expenses in the condensed consolidated financial statements. However, we capitalize certain of the costs related to our Advisor’s legal transactions group if the costs relate to a transaction that is not considered to be a business combination.

Excess Operating Expenses

Our Advisor is obligated to reimburse us for the amount by which our operating expenses exceeds the “2%/25% guidelines” (the greater of 2% of average invested assets or 25% of net income) as defined in the advisory agreement for any 12-month period, subject to certain conditions. For the most recent trailing four quarters, our operating expenses were below this threshold.

Available Cash Distributions

WPC’s interest in the Operating Partnership entitles it to receive distributions of up to 10.0% of the available cash generated by the Operating Partnership, referred to as the Available Cash Distribution, which is defined as cash generated from operations, excluding capital proceeds, as reduced by operating expenses and debt service, excluding prepayments and balloon payments. Available Cash Distributions are included in Net income attributable to noncontrolling interests in the condensed consolidated financial statements.

Jointly Owned Investments and Other Transactions with our Affiliates

At June 30, 2018, we owned interests ranging from 50% to 99% in jointly owned investments, with the remaining interests held by affiliates or by third parties. We consolidate all of these joint ventures with exception to our sole equity investment (Note 4), which we account for under the equity method of accounting. Additionally, no other parties hold any rights that overcome our control. We account for the minority share of these investments as noncontrolling interests.

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Real Estate, Operating Real Estate, Real Estate Under Construction, and Equity Investment in Real Estate

6 Months Ended

Jun. 30, 2018

Real Estate [Abstract]

Real Estate, Operating Real Estate, Real Estate Under Construction, and Equity Investment in Real Estate

Real Estate, Operating Real Estate, Real Estate Under Construction, and Equity Investment in Real Estate

Real Estate — Land, Buildings and Improvements

Real estate, which consists of land and buildings leased to others, and which are subject to operating leases, is summarized as follows (in thousands):

	June 30, 2018			December 31, 2017
Land	$	204,198		$	202,500
Buildings and improvements	1,070,825			1,060,672
Less: Accumulated depreciation	(101,331		)	(87,886		)
	$	1,173,692		$	1,175,286

During the six months ended June 30, 2018, the U.S. dollar strengthened against the euro, as the end-of-period rate for the U.S. dollar in relation to the euro decreased by 2.8% to $1.1658 from $1.1993. As a result, the carrying value of our Real estate — land, buildings and improvements decreased by $17.5 million from December 31, 2017 to June 30, 2018.

Depreciation expense, including the effect of foreign currency translation, on our real estate was $7.9 million and $6.7 million for the three months ended June 30, 2018 and 2017, respectively, and $15.8 million and $13.0 million for the six months ended June 30, 2018 and 2017, respectively.

Operating Real Estate — Land, Buildings and Improvements

Operating real estate, which consists of our self-storage and multi-family properties, is summarized as follows (in thousands):

	June 30, 2018			December 31, 2017
Land	$	98,432		$	98,429
Buildings and improvements	470,169			468,060
Less: Accumulated depreciation	(52,409		)	(43,786		)
	$	516,192		$	522,703

Depreciation expense on our operating real estate was $4.3 million and $4.5 million for the three months ended June 30, 2018 and 2017, respectively, and $8.7 million and $8.9 million for the six months ended June 30, 2018 and 2017, respectively.

Real Estate Under Construction

The following table provides the activity of our Real estate under construction (in thousands):

	Six Months Ended June 30, 2018
Beginning balance	$	134,366
Capitalized funds	87,646
Placed into service	(25,900		)
Foreign currency translation adjustments	(3,498		)
Capitalized interest	2,508
Ending balance	$	195,122

Capitalized Funds

We entered into the following build-to-suit investments during the six months ended June 30, 2018 (amounts based on the exchange rate of the euro on the date of acquisition):

• $10.5 million to enter into a build-to-suit joint venture with a third party for a student-housing development site located in Barcelona, Spain on March 8, 2018. We acquired 99% of the equity in this investment at closing. This property is under construction and is currently projected to be completed in September 2019, at which point our total investment is expected to be approximately $28.5 million. Since we are responsible for substantially all of the economics but we proportionally have less voting rights, this investment is considered to be a VIE that we consolidate (Note 2);

• $9.3 million to enter into a build-to-suit joint venture with a third party for a student-housing development site located in Coimbra, Portugal on June 11, 2018. We acquired 99% of the equity in this investment at closing. This property is under construction and is currently projected to be completed in September 2019, at which point our total investment is expected to be approximately $26.3 million. Since we are responsible for substantially all of the economics but we proportionally have less voting rights, this investment is considered to be a VIE that we consolidate (Note 2);

• $13.1 million to enter into a build-to-suit project for a student-housing development site located in San Sebastian, Spain on June 14, 2018. This property is under construction and is currently projected to be completed in September 2020, at which point our total investment is expected to be approximately $36.7 million. As there is insufficient equity at risk, the investment is considered to be a VIE (Note 2); and

• $13.1 million to enter into a build-to-suit project for a student-housing development site located in Barcelona, Spain on June 25, 2018. This property is under construction and is currently projected to be completed in September 2020, at which point our total investment is expected to be approximately $31.7 million. As there is insufficient equity at risk, the investment is considered to be a VIE (Note 2).

Ghana — On February 19, 2016, we entered into a build-to-suit joint venture with a third party for a university complex development site located in Accra, Ghana. As of June 30, 2018, total capitalized funds related to this investment were $32.5 million, inclusive of accrued construction costs of $0.9 million and the effect of recording deferred tax liabilities of $3.7 million.

At the time of the investment, the joint venture entered into an agreement for third-party financing in an amount up to $41.0 million from the Overseas Private Investment Corporation, or OPIC, a developmental finance institution of the U.S. Government, with an estimated interest rate based on the U.S. Treasury rate plus 300 basis points. The transaction, including the funding of this loan, was subject to the tenant obtaining a letter of credit, which did not occur, and as a result the tenant was in default under its concession agreement with us. Because of the tenant’s default, we terminated the concession agreement in May 2018, and therefore we will not pursue the completion of this project. We are currently pursuing appropriate remedies, including payment from the tenant or through our insurance policy. We had no amounts outstanding under this financing arrangement at June 30, 2018. 

We have evaluated this investment for impairment and probability-weighted different scenarios in estimating future undiscounted cash flows, including payment from the tenant or through our insurance policy. Because we believe there is a high probability that we will recover the full amount invested, we have not recorded any impairment charge in connection with this investment as of June 30, 2018, although recovery may take additional time. We will continue to monitor this investment for impairment.

During the six months ended June 30, 2018, total capitalized funds primarily related to our build-to-suit projects, which were comprised principally of initial funding of $47.9 million and construction draws of $39.7 million. Capitalized funds include accrued costs of $2.5 million, which is a non-cash investing activity.

Capitalized Interest

Capitalized interest includes amortization of the mortgage discount and deferred financing costs and interest incurred during construction, which totaled $2.5 million during the six months ended June 30, 2018 and is a non-cash investing activity.

Placed into Service

During the six months ended June 30, 2018, a total of $25.9 million was placed into service and reclassified to Real estate — land, buildings and improvements, principally related to the remaining portion of a substantially completed hotel, which is a non-cash investing activity.

Ending Balance

At June 30, 2018, we had eight open build-to-suit projects with aggregate unfunded commitments of approximately $181.7 million, excluding capitalized interest, accrued costs, and capitalized acquisition fees for our Advisor.

Equity Investment in Real Estate

We have an interest in an unconsolidated investment in our Self Storage segment that relates to a joint venture for the development of four self-storage facilities in Canada. This investment is jointly owned with a third party, which is also the general partner. Our ownership interest in the joint venture is 90%. As of June 30, 2018, the joint-venture partner had not purchased its 10% equity interest, which will be funded by the distributions it is eligible to receive upon properties being placed into service. We do not consolidate this entity because we are not the primary beneficiary and the nature of our involvement in the activities of the entity allows us to exercise significant influence but does not give us power over decisions that significantly affect the economic performance of the entity.

At June 30, 2018 and December 31, 2017, our total equity investment balance for these properties was $19.6 million and $20.9 million, respectively, which is included in Accounts receivable and other assets, net in the condensed consolidated financial statements. At June 30, 2018 and December 31, 2017, the joint venture had total third-party recourse debt of $23.3 million and $21.5 million, respectively. At June 30, 2018, the unfunded commitments for the build-to-suit projects totaled approximately $20.2 million.

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Finance Receivables

6 Months Ended

Jun. 30, 2018

Receivables [Abstract]

Finance Receivables

Finance Receivables

Assets representing rights to receive money on demand or at fixed or determinable dates are referred to as finance receivables. Our finance receivables portfolio consists of our notes receivable (which are included in Accounts receivable and other assets, net in the condensed consolidated financial statements) and our Net investments in direct financing leases. Operating leases are not included in finance receivables as such amounts are not recognized as an asset in the condensed consolidated financial statements.

Notes Receivable

Our notes receivable at December 31, 2017 consisted of a $28.0 million mezzanine tranche of 10-year commercial mortgage-backed securities on the Cipriani banquet halls in New York, New York (referred to as Cipriani) and a $38.5 million mezzanine loan collateralized by 27 retail stores in Minnesota, Wisconsin, and Iowa leased to Mills Fleet Farm Group LLC (referred to as Mills Fleet). We have and will continue to receive interest-only payments on each of these loans through maturity in July 2024 and October 2018, respectively.

During the six months ended June 30, 2018, we received partial repayments for the Mills Fleet mezzanine loan totaling $2.5 million. As a result, the balances for the receivables at June 30, 2018 were $28.0 million and $36.0 million for Cipriani and Mills Fleet, respectively.

Credit Quality of Finance Receivables

We generally invest in facilities that we believe are critical to a tenant’s business and therefore have a lower risk of tenant default. At both June 30, 2018 and December 31, 2017, we had no significant finance receivable balances that were past due and we had not established any allowances for credit losses. Additionally, there were no modifications of finance receivables during the six months ended June 30, 2018. We evaluate the credit quality of our finance receivables utilizing an internal five-point credit rating scale, with one representing the highest credit quality and five representing the lowest. The credit quality evaluation of our finance receivables is updated quarterly.

A summary of our finance receivables by internal credit quality rating is as follows (dollars in thousands):

	Number of Tenants/Obligors at		Carrying Value at
Internal Credit Quality Indicator	June 30, 2018	December 31, 2017	June 30, 2018		December 31, 2017
1	—	—	$	—	$	—
2	2	2	15,738		14,386
3	2	2	29,734		29,716
4	2	2	60,130		62,355
5	—	—	—		—
	0		$	105,602	$	106,457

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Intangible Assets and Liabilities

6 Months Ended

Jun. 30, 2018

Intangible Assets And Liabilities [Abstract]

Intangible Assets and Liabilities

Intangible Assets and Liabilities

In-place lease intangibles are included in In-place lease intangible assets in the condensed consolidated financial statements. Below-market ground lease intangibles and above-market rent intangibles are included in Other intangible assets in the condensed consolidated financial statements. Below-market rent intangibles and above-market ground lease intangibles are included in Accounts payable, accrued expenses and other liabilities in the condensed consolidated financial statements.

The following table presents a reconciliation of our goodwill, which is included in our Net Lease segment and included in Accounts receivable and other assets, net in the condensed consolidated financial statements (in thousands):

	Six Months Ended June 30, 2018
Balance at January 1, 2018	$	26,084
Other	1,629
Foreign currency translation	(151		)
Balance at June 30, 2018	$	27,562

Intangible assets and liabilities are summarized as follows (in thousands):

		June 30, 2018									December 31, 2017
	Amortization Period (Years)	Gross Carrying Amount			Accumulated Amortization			Net Carrying Amount			Gross Carrying Amount			Accumulated Amortization			Net Carrying Amount
Finite-Lived Intangible Assets
In-place lease	4 - 23	$	270,957		$	(123,210	)	$	147,747		$	274,723		$	(115,515	)	$	159,208
Below-market ground lease	30 - 99	22,362			(1,538		)	20,824			23,000			(1,238		)	21,762
Above-market rent	4 - 30	12,605			(4,100		)	8,505			12,811			(3,642		)	9,169
		305,924			(128,848		)	177,076			310,534			(120,395		)	190,139
Indefinite-Lived Intangible Assets
Goodwill		27,562			—			27,562			26,084			—			26,084
Total intangible assets		$	333,486		$	(128,848	)	$	204,638		$	336,618		$	(120,395	)	$	216,223
Finite-lived Intangible Liabilities
Below-market rent	5 - 30	$	(15,423	)	$	5,133		$	(10,290	)	$	(15,476	)	$	4,573		$	(10,903	)
Above-market ground lease	81	(108		)	5			(103		)	(110		)	4			(106		)
Total intangible liabilities		$	(15,531	)	$	5,138		$	(10,393	)	$	(15,586	)	$	4,577		$	(11,009	)

Net amortization of intangibles, including the effect of foreign currency translation, was $4.6 million and $7.5 million for the three months ended June 30, 2018 and 2017, respectively, and $9.9 million and $15.6 million for the six months ended June 30, 2018 and 2017, respectively. Amortization of below-market rent and above-market rent intangibles is recorded as an adjustment to Rental income, amortization of below-market and above-market ground lease intangibles is included in Property expenses, and amortization of in-place lease intangibles is included in Depreciation and amortization expense in the condensed consolidated financial statements.

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Fair Value Measurements

6 Months Ended

Jun. 30, 2018

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

The fair value of an asset is defined as the exit price, which is the amount that would either be received when an asset is sold or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The guidance establishes a three-tier fair value hierarchy based on the inputs used in measuring fair value. These tiers are: Level 1, for which quoted market prices for identical instruments are available in active markets, such as money market funds, equity securities, and U.S. Treasury securities; Level 2, for which there are inputs other than quoted prices included within Level 1 that are observable for the instrument, such as certain derivative instruments including interest rate caps, interest rate swaps, foreign currency forward contracts and foreign currency collars; and Level 3, for securities that do not fall into Level 1 or Level 2 and for which little or no market data exists, therefore requiring us to develop our own assumptions.

Items Measured at Fair Value on a Recurring Basis

The methods and assumptions described below were used to estimate the fair value of each class of financial instrument. For significant Level 3 items, we have also provided the unobservable inputs.

Derivative Assets — Our derivative assets, which are included in Accounts receivable and other assets, net in the condensed consolidated financial statements, are comprised of foreign currency forward contracts, interest rate swaps, interest rate caps, and foreign currency collars (Note 8). These derivative instruments were measured at fair value using readily observable market inputs, such as quotations on interest rates, and were classified as Level 2 as these instruments are custom, over-the-counter contracts with various bank counterparties that are not traded in an active market.

Derivative Liabilities — Our derivative liabilities, which are included in Accounts payable, accrued expenses and other liabilities in the condensed consolidated financial statements, are comprised of interest rate swaps and foreign currency collars (Note 8). These derivative instruments were measured at fair value using readily observable market inputs, such as quotations on interest rates, and were classified as Level 2 because they are custom, over-the-counter contracts with various bank counterparties that are not traded in an active market.

Rent Guarantees — Our rent guarantees, which are included in Accounts receivable and other assets, net in the condensed consolidated financial statements, are related to two of our international investments. These rent guarantees were measured at fair value using a discounted cash flow model, and were classified as Level 3 because the model uses unobservable inputs. At both June 30, 2018 and December 31, 2017, our rent guarantees had a fair value of $0.7 million. We determined the fair value of the rent guarantees based on an estimate of discounted cash flows using a discount rate that ranged from 7% to 9% and a growth rate that ranged from 1% to 2%, which are considered significant unobservable inputs. Significant increases or decreases to these inputs in isolation would result in a significant change in the fair value measurement. During the three and six months ended June 30, 2018, we recognized $0.5 million and $0.6 million, respectively, of mark-to-market gains related to these rent guarantees within Other income and expenses on our condensed consolidated financial statements. During the three and six months ended June 30, 2017, we recognized $0.4 million and $0.5 million, respectively, of mark-to-market gains related to these rent guarantees within Other income and expenses on our condensed consolidated financial statements.

We did not have any transfers into or out of Level 1, Level 2, and Level 3 measurements during the three and six months ended June 30, 2018 and 2017. Gains and losses (realized and unrealized) recognized on items measured at fair value on a recurring basis included in earnings are reported within Other gains and (losses) on our condensed consolidated financial statements.

Our other financial instruments had the following carrying values and fair values as of the dates shown (dollars in thousands):

		June 30, 2018				December 31, 2017
	Level	Carrying Value		Fair Value		Carrying Value		Fair Value
Debt, net (a) (b)	3	$	1,370,526	$	1,387,730	$	1,275,448	$	1,301,844
Notes receivable (c) (d)	3	63,954		66,454		66,500		69,000

___________

(a) Debt, net consists of Non-recourse mortgages, net and Bonds payable, net. At June 30, 2018 and December 31, 2017, the carrying value of Non-recourse mortgages, net includes unamortized deferred financing costs of $7.5 million and $7.0 million, respectively. At both June 30, 2018 and December 31, 2017, the carrying value of Bonds payable, net includes unamortized deferred financing costs of $0.8 million (Note 9).

(b) We determined the estimated fair value of our Non-recourse mortgages, net and Bonds payable, net using a discounted cash flow model that estimates the present value of the future loan payments by discounting such payments at current estimated market interest rates. The estimated market interest rates take into account interest rate risk and the value of the underlying collateral, which includes quality of the collateral, the credit quality of the tenant/obligor, and the time until maturity.

(c) We determined the estimated fair value of our Notes receivable using a discounted cash flow model with rates that take into account the credit of the tenant/obligor, order of payment tranches, and interest rate risk. We also considered the value of the underlying collateral, taking into account the quality of the collateral, the credit quality of the tenant/obligor, the time until maturity, and the current market interest rate.

(d) During the six months ended June 30, 2018, we received partial repayments for the Mills Fleet mezzanine loan totaling $2.5 million. As a result, the balances for the notes receivable at June 30, 2018 were $28.0 million and $36.0 million for Cipriani and Mills Fleet, respectively (Note 5).

We estimated that our other financial assets and liabilities (excluding net investments in direct financing leases) had fair values that approximated their carrying values at both June 30, 2018 and December 31, 2017.

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Risk Management and Use of Derivative Financial Instruments

6 Months Ended

Jun. 30, 2018

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Risk Management and Use of Derivative Financial Instruments

Risk Management and Use of Derivative Financial Instruments

Risk Management

In the normal course of our ongoing business operations, we encounter economic risk. There are four main components of economic risk that impact us: interest rate risk, credit risk, market risk, and foreign currency risk. We are primarily subject to interest rate risk on our interest-bearing liabilities. Credit risk is the risk of default on our operations and our tenants’ inability or unwillingness to make contractually required payments. Market risk includes changes in the value of our properties and related loans, as well as changes in the value of our other investments due to changes in interest rates or other market factors. We own international investments, primarily in Europe, and are subject to risks associated with fluctuating foreign currency exchange rates.

Derivative Financial Instruments

When we use derivative instruments, it is generally to reduce our exposure to fluctuations in interest rates and foreign currency exchange rate movements. We have not entered into, and do not plan to enter into financial instruments for trading or speculative purposes. In addition to entering into derivative instruments on our own behalf, we may also be a party to derivative instruments that are embedded in other contracts. The primary risks related to our use of derivative instruments include: (i) a counterparty to a hedging arrangement defaulting on its obligation and (ii) a downgrade in the credit quality of a counterparty to such an extent that our ability to sell or assign our side of the hedging transaction is impaired. While we seek to mitigate these risks by entering into hedging arrangements with large financial institutions that we deem to be creditworthy, it is possible that our hedging transactions, which are intended to limit losses, could adversely affect our earnings. Furthermore, if we terminate a hedging arrangement, we may be obligated to pay certain costs, such as transaction or breakage fees. We have established policies and procedures for risk assessment, as well as the approval, reporting, and monitoring of derivative financial instrument activities.

We measure derivative instruments at fair value and record them as assets or liabilities, depending on our rights or obligations under the applicable derivative contract. Derivatives that are not designated as hedges must be adjusted to fair value through earnings. For a derivative designated, and that qualified, as a cash flow hedge, the effective portion of the change in fair value of the derivative is recognized in Other comprehensive (loss) income until the hedged item is recognized in earnings. For a derivative designated, and that qualified, as a net investment hedge, the effective portion of the change in its fair value and/or the net settlement of the derivative is reported in Other comprehensive (loss) income as part of the cumulative foreign currency translation adjustment. The ineffective portion of the change in fair value of any derivative is immediately recognized in earnings.

All derivative transactions with an individual counterparty are governed by a master International Swap and Derivatives Association agreement, which can be considered as a master netting arrangement; however, we report all our derivative instruments on a gross basis on our condensed consolidated financial statements. At both June 30, 2018 and December 31, 2017, no cash collateral had been posted or received for any of our derivative positions.

The following table sets forth certain information regarding our derivative instruments (in thousands):

Derivatives Designated as Hedging Instruments	Balance Sheet Location	Asset Derivatives Fair Value at				Liability Derivatives Fair Value at
		June 30, 2018		December 31, 2017		June 30, 2018			December 31, 2017
Foreign currency forward contracts	Accounts receivable and other assets, net	$	2,217	$	2,419	$	—		$	—
Interest rate swaps	Accounts receivable and other assets, net	1,509		553		—			—
Foreign currency collars	Accounts receivable and other assets, net	165		258		—			—
Interest rate caps	Accounts receivable and other assets, net	1		1		—			—
Foreign currency collars	Accounts payable, accrued expenses and other liabilities	—		—		(1,988		)	(3,266		)
Interest rate swaps	Accounts payable, accrued expenses and other liabilities	—		—		(176		)	(698		)
Derivatives Not Designated as Hedging Instruments
Foreign currency collars	Accounts payable, accrued expenses and other liabilities	—		—		—			(366		)
Total		$	3,892	$	3,231	$	(2,164	)	$	(4,330	)

The following tables present the impact of our derivative instruments in the condensed consolidated financial statements (in thousands):

	Amount of Gain (Loss) Recognized on Derivatives in Other Comprehensive (Loss) Income (Effective Portion)
	Three Months Ended June 30,					Six Months Ended June 30,
Derivatives in Cash Flow Hedging Relationships	2018		2017			2018			2017
Foreign currency collars	$	2,626	$	(2,379	)	$	1,421		$	(2,613	)
Foreign currency forward contracts	427		(1,162		)	(202		)	(1,634		)
Interest rate swaps	363		(277		)	1,520			(32		)
Interest rate caps	2		(6		)	20			(2		)
Derivatives in Net Investment Hedging Relationship (a)
Foreign currency collars	80		(23		)	(46		)	(33		)
Foreign currency forward contracts	23		(88		)	—			(107		)
Total	$	3,521	$	(3,935	)	$	2,713		$	(4,421	)

___________

(a) The effective portion of the changes in fair value and the settlement of these contracts is reported in the foreign currency translation adjustment section of Other comprehensive (loss) income until the underlying investment is sold, at which time we reclassify the gain or loss to earnings.

		Amount of Gain (Loss) on Derivatives Reclassified from Other Comprehensive (Loss) Income into Income (Effective Portion)
Derivatives in Cash Flow Hedging Relationships	Location of Gain (Loss) Recognized in Income	Three Months Ended June 30,						Six Months Ended June 30,
		2018			2017			2018			2017
Foreign currency forward contracts	Other gains and (losses)	$	237		$	334		$	459		$	690
Interest rate swaps	Interest expense	(76		)	(176		)	(159		)	(387		)
Foreign currency collars	Other gains and (losses)	(26		)	77			(180		)	169
Interest rate caps	Interest expense	(8		)	(10		)	(39		)	(15		)
Total		$	127		$	225		$	81		$	457

Amounts reported in Other comprehensive (loss) income related to our interest rate swaps will be reclassified to Interest expense as interest payments are made on our variable-rate debt. Amounts reported in Other comprehensive (loss) income related to foreign currency derivative contracts will be reclassified to Other gains and (losses) when the hedged foreign currency contracts are settled. At June 30, 2018, we estimated that less than $0.1 million and an additional $0.6 million will be reclassified as Interest expense and Other gains and (losses), respectively, during the next 12 months.

The following table presents the impact of our derivative instruments in the condensed consolidated financial statements (in thousands):

		Amount of Gain (Loss) on Derivatives Recognized in Income
Derivatives Not in Cash Flow Hedging Relationships	Location of Gain (Loss) Recognized in Income	Three Months Ended June 30,						Six Months Ended June 30,
		2018			2017			2018			2017
Foreign currency collars	Other gains and (losses)	$	56		$	(25	)	$	(95	)	$	(45	)
Interest rate swaps	Interest expense	(41		)	27			(47		)	(22		)
Derivatives in Cash Flow Hedging Relationships (a)
Foreign currency collars	Other gains and (losses)	(5		)	(5		)	(15		)	(4		)
Interest rate swaps	Interest expense	(1		)	7			5			10
Total		$	9		$	4		$	(152	)	$	(61	)

__________

(a) Relates to the ineffective portion of the hedging relationship.

Interest Rate Swaps and Caps

We are exposed to the impact of interest rate changes primarily through our borrowing activities. To limit this exposure, we attempt to obtain mortgage financing on a long-term, fixed-rate basis. However, from time to time, we or our joint investment partners have obtained, and may in the future obtain, variable-rate non-recourse mortgage loans and, as a result, we have entered into, and may continue to enter into interest rate swap agreements or interest rate cap agreements with counterparties. Interest rate swaps, which effectively convert the variable-rate debt service obligations of a loan to a fixed rate, are agreements in which one party exchanges a stream of interest payments for a counterparty’s stream of cash flow over a specific period. The notional, or face, amount on which the swaps are based is not exchanged. Interest rate caps limit the effective borrowing rate of variable-rate debt obligations while allowing participants to share in downward shifts in interest rates. Our objective in using these derivatives is to limit our exposure to interest rate movements.

The interest rate swaps and caps that our consolidated subsidiaries had outstanding at June 30, 2018 are summarized as follows (currency in thousands):

Interest Rate Derivatives	Number of Instruments	Notional Amount		Fair Value at June 30, 2018 (a)
Interest rate swaps	9	94,283	USD	$	1,374
Interest rate swap	1	10,025	EUR	(41		)
Interest rate cap	2	11,300	USD	1
				$	1,334

___________

(a) Fair value amount is based on the exchange rate of the euro at June 30, 2018, as applicable.

Foreign Currency Contracts

We are exposed to foreign currency exchange rate movements, primarily in the euro and, to a lesser extent, the Norwegian krone. We manage foreign currency exchange rate movements by generally placing our debt service obligation on an investment in the same currency as the tenant’s rental obligation to us. This reduces our overall exposure to the net cash flow from that investment. However, we are subject to foreign currency exchange rate movements to the extent that there is a difference in the timing and amount of the rental obligation and the debt service. Realized and unrealized gains and losses recognized in earnings related to foreign currency transactions are included in Other gains and (losses) in the condensed consolidated financial statements.

In order to hedge certain of our foreign currency cash flow exposures, we enter into foreign currency forward contracts and collars. A foreign currency forward contract is a commitment to deliver a certain amount of currency at a certain price on a specific date in the future. By entering into forward contracts and holding them to maturity, we are locked into a future currency exchange rate for the term of the contract. A foreign currency collar guarantees that the exchange rate of the currency will not fluctuate beyond the range of the options’ strike prices. Our foreign currency forward contracts and foreign currency collars have maturities of 74 months or less.

The following table presents the foreign currency derivative contracts we had outstanding and their designations at June 30, 2018 (currency in thousands):

Foreign Currency Derivatives	Number of Instruments	Notional Amount		Fair Value at June 30, 2018
Designated as Cash Flow Hedging Instruments
Foreign currency collars	48	31,964	EUR	$	(1,789	)
Foreign currency forward contracts	19	7,375	EUR	1,598
Foreign currency forward contracts	13	20,293	NOK	559
Foreign currency collars	24	49,470	NOK	(79		)
Designated as Net Investment Hedging Instruments
Foreign currency forward contracts	2	4,504	NOK	60
Foreign currency collars	3	16,750	NOK	45
				$	394

Credit Risk-Related Contingent Features

We measure our credit exposure on a counterparty basis as the net positive aggregate estimated fair value of our derivatives, net of any collateral received. No collateral was received as of June 30, 2018. At June 30, 2018, our total credit exposure was $3.1 million and the maximum exposure to any single counterparty was $1.8 million.

Some of the agreements we have with our derivative counterparties contain cross-default provisions that could trigger a declaration of default on our derivative obligations if we default, or are capable of being declared in default, on certain of our indebtedness. At June 30, 2018, we had not been declared in default on any of our derivative obligations. The estimated fair value of our derivatives in a net liability position was $2.2 million and $4.4 million at June 30, 2018 and December 31, 2017, respectively, which included accrued interest and any nonperformance risk adjustments. If we had breached any of these provisions at June 30, 2018 or December 31, 2017, we could have been required to settle our obligations under these agreements at their aggregate termination value of $2.3 million and $4.5 million, respectively.

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Debt, net

6 Months Ended

Jun. 30, 2018

Debt Disclosure [Abstract]

Debt, net

Debt, net

Debt, net consists of Non-recourse mortgages, net and Bonds payable, net, which are collateralized by the assignment of real estate properties. At June 30, 2018, our debt bore interest at fixed annual rates ranging from 1.6% to 5.8% and variable contractual annual rates ranging from 1.6% to 8.0%, with maturity dates ranging from 2018 to 2039.

Financing Activity During 2018

On May 9, 2018, we obtained a $34.0 million term loan encumbering seven self-storage properties located in Southern California.  The properties were encumbered by a first mortgage loan in the amount of $16.4 million, which was paid in full on the same date using a portion of the proceeds from the term loan.  The term loan bears an annual fixed interest rate of 4.5%, with a term to maturity of three years. We have two options to extend the maturity date, each by an additional year. The principal balance is due at maturity and interest is payable monthly.

On February 13, 2018, we obtained a construction loan of $48.8 million for a student-housing development project located in Portsmouth, United Kingdom (based on the exchange rate of the British pound sterling at the date of acquisition). The loan bears a variable interest rate for outstanding drawn balances, with a term to maturity of 1.8 years and an interest rate of 6.0% as of June 30, 2018. We had drawn $29.1 million on the construction loan (based on the exchange rate of the British pound sterling at the date of each drawdown) as of June 30, 2018.

During the six months ended June 30, 2018, we had additional drawdowns of $14.1 million (based on the exchange rate of the British pound sterling at the date of each drawdown) on a construction loan related to a student-housing development project located in Cardiff, United Kingdom. The loan bears an annual interest rate of 7.5% plus the London Interbank Offered Rate, or LIBOR, for outstanding drawn balances, with a term to maturity of two years. Additionally, we drew down $52.4 million (based on the exchange rate of the euro at the date of drawdown) on the non-recourse mortgage loan for a completed build-to-suit hotel in Munich, Germany. The loan bears an annual interest rate of 2.8%, with a term to maturity of 5.4 years.

Scheduled Debt Principal Payments

Scheduled debt principal payments during the remainder of 2018, each of the next four calendar years following December 31, 2018, and thereafter are as follows (in thousands):

Years Ending December 31,	Total
2018 (remainder)	$	9,084
2019	58,138
2020	124,786
2021	206,022
2022	195,229
Thereafter through 2039	785,278
Total principal payments	1,378,537
Unamortized deferred financing costs	(8,250		)
Unamortized discount, net	239
Total	$	1,370,526

Certain amounts in the table above are based on the applicable foreign currency exchange rate at June 30, 2018.

The carrying value of our Non-recourse mortgages, net and Bonds payable, net decreased by $13.7 million in the aggregate from December 31, 2017 to June 30, 2018, reflecting the impact of the strengthening of the U.S. dollar relative to certain foreign currencies (primarily the euro) during the same period.

Debt Covenants

As of December 31, 2017, we had repaid a total of $1.8 million (amount is based on the exchange rate of the euro as of the date of repayments) of principal on our Agrokor mortgage loan as a result of a debt service coverage ratio covenant breach. The covenant breach will be cured once the net operating income for the related property exceeds the amount set forth in the related loan agreement. As of June 30, 2018, less than $0.1 million of additional payments have been made on the loan principal. As Agrokor is currently in financial distress, there is uncertainty regarding future rent collections (Note 12) and whether the default can be cured.

As of December 31, 2017, we were in breach of a loan-to-value covenant on one of our bonds payable. On June 14, 2018, we entered into a pledge agreement with the bondholders to cure the covenant breach, pursuant to which we deposited $5.6 million (based on the exchange rate for the Norwegian krone on the date of deposit) in a bank account and granted a first priority interest in, and pledged the account to, the bondholders. The pledge of the account to the bondholders will stay in effect until the loan-to-value ratio is within the threshold set forth in the bond agreement or until the bonds are paid in full. There were no changes to the amounts or timing of scheduled interest and principal payments. The balance in the pledged account, based on the exchange rate as of June 30, 2018, was $5.5 million and is included as restricted cash within Accounts receivable and other assets, net on our condensed consolidated balance sheets.

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2018

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

At June 30, 2018, we were not involved in any material litigation. Various claims and lawsuits arising in the normal course of business are pending against us. The results of these proceedings are not expected to have a material adverse effect on our consolidated financial position or results of operations. See Note 4 for unfunded construction commitments.

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Net (Loss) Income Per Share and Equity

6 Months Ended

Jun. 30, 2018

Earnings Per Share [Abstract]

Net (Loss) Income Per Share and Equity

Net (Loss) Income Per Share and Equity

Basic and Diluted (Loss) Income Per Share

The following table presents net (loss) income per share (in thousands, except share and per share amounts):

	Three Months Ended June 30, 2018						Three Months Ended June 30, 2017
	Basic and Diluted Weighted-Average Shares Outstanding	Allocation of Net Loss			Basic and Diluted Net (Loss) Income Per Share		Basic and Diluted Weighted-Average Shares Outstanding	Allocation of Net Income		Basic and Diluted Net Income Per Share
Class A common stock	113,010,970	$	(213	)	$	—	109,533,769	$	4,600	$	0.04
Class C common stock	31,593,597	(121		)	—		31,030,596	1,184		0.04
Net (loss) income attributable to CPA:18 – Global		$	(334	)				$	5,784

	Six Months Ended June 30, 2018					Six Months Ended June 30, 2017
	Basic and Diluted Weighted-Average Shares Outstanding	Allocation of Net Income		Basic and Diluted Net Income Per Share		Basic and Diluted Weighted-Average Shares Outstanding	Allocation of Net Income		Basic and Diluted Net Income Per Share
Class A common stock	112,564,943	$	7,901	$	0.07	108,998,427	$	5,179	$	0.05
Class C common stock	31,517,919	2,092		0.07		30,898,107	1,226		0.04
Net income attributable to CPA:18 – Global		$	9,993				$	6,405

The allocation of Net (loss) income attributable to CPA:18 – Global is calculated based on the basic and diluted weighted-average shares outstanding for Class A and Class C common stock for each respective period. For both the three and six months ended June 30, 2018, the allocation of net (loss) income for our Class A common stock excluded $0.1 million of interest expense related to the accretion of interest on our annual distribution and shareholder servicing fee liability, which is only applicable to our Class C common stock (Note 3). For the three and six months ended June 30, 2017, the allocation of net income for our Class A common stock excluded $0.1 million and $0.2 million, respectively, of interest expense related to the accretion of interest on our annual distribution and shareholder servicing fee liability (Note 3).

Distributions

Distributions are declared at the discretion of our board of directors and are not guaranteed. For the three months ended June 30, 2018, our board of directors declared quarterly distributions of $0.1563 per share for our Class A common stock and $0.1378 per share for our Class C common stock, which was paid on July 16, 2018 to stockholders of record on June 29, 2018, in the amount of $22.0 million.

Reclassifications Out of Accumulated Other Comprehensive Loss

The following tables present a reconciliation of changes in Accumulated other comprehensive loss by component for the periods presented (in thousands):

	Three Months Ended June 30, 2018
	Gains and (Losses) on Derivative Instruments			Foreign Currency Translation Adjustments			Total
Beginning balance	$	(1,741	)	$	(22,170	)	$	(23,911	)
Other comprehensive loss before reclassifications	3,545			(22,582		)	(19,037		)
Amounts reclassified from accumulated other comprehensive loss to:
Other gains and (losses)	(211		)	—			(211		)
Interest expense	84			—			84
Net current-period other comprehensive loss	3,418			(22,582		)	(19,164		)
Net current-period other comprehensive loss attributable to noncontrolling interests	—			2,326			2,326
Ending balance	$	1,677		$	(42,426	)	$	(40,749	)

	Three Months Ended June 30, 2017
	Gains and (Losses) on Derivative Instruments			Foreign Currency Translation Adjustments			Total
Beginning balance	$	5,130		$	(63,665	)	$	(58,535	)
Other comprehensive income before reclassifications	(3,599		)	19,541			15,942
Amounts reclassified from accumulated other comprehensive loss to:
Other gains and (losses)	(411		)	—			(411		)
Interest expense	186			—			186
Net current-period other comprehensive income	(3,824		)	19,541			15,717
Net current-period other comprehensive income attributable to noncontrolling interests	—			(2,265		)	(2,265		)
Ending balance	$	1,306		$	(46,389	)	$	(45,083	)

	Six Months Ended June 30, 2018
	Gains and (Losses) on Derivative Instruments			Foreign Currency Translation Adjustments			Total
Beginning balance	$	(1,082	)	$	(32,130	)	$	(33,212	)
Other comprehensive loss before reclassifications	2,840			(11,005		)	(8,165		)
Amounts reclassified from accumulated other comprehensive loss to:
Other gains and (losses)	(279		)	—			(279		)
Interest expense	198			—			198
Net current-period other comprehensive loss	2,759			(11,005		)	(8,246		)
Net current-period other comprehensive loss attributable to noncontrolling interests	—			709			709
Ending balance	$	1,677		$	(42,426	)	$	(40,749	)

	Six Months Ended June 30, 2017
	Gains and (Losses) on Derivative Instruments			Foreign Currency Translation Adjustments			Total
Beginning balance	$	5,587		$	(67,291	)	$	(61,704	)
Other comprehensive income before reclassifications	(3,824		)	23,697			19,873
Amounts reclassified from accumulated other comprehensive loss to:
Other gains and (losses)	(859		)	—			(859		)
Interest expense	402			—			402
Net current-period other comprehensive income	(4,281		)	23,697			19,416
Net current-period other comprehensive income attributable to noncontrolling interests	—			(2,795		)	(2,795		)
Ending balance	$	1,306		$	(46,389	)	$	(45,083	)

See Note 8 for additional information on our derivative activity recognized within Other comprehensive (loss) income for the periods presented.

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Segment Reporting

6 Months Ended

Jun. 30, 2018

Segment Reporting [Abstract]

Segment Reporting

Segment Reporting

We operate in three reportable business segments: Net Lease, Self Storage, and Multi-Family. Our Net Lease segment includes our investments in net-leased properties, whether they are accounted for as operating leases or direct financing leases. Our Self Storage segment is comprised of our investments in self-storage properties. Our Multi-Family segment is comprised of our investments in six multi-family residential properties and eight student-housing developments. In addition, we have an All Other category that includes our notes receivable investments. The following tables present a summary of comparative results and assets for these business segments (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Net Lease
Revenues (a)	$	33,299		$	28,882		$	66,291		$	56,252
Operating expenses (b) (c)	(19,307		)	(18,319		)	(38,426		)	(34,355		)
Interest expense	(9,002		)	(6,999		)	(17,860		)	(13,994		)
Other income and (expenses), excluding interest expense	1,555			540			5,906			745
Benefit from (provision for) income taxes	88			(705		)	233			(639		)
Net income attributable to noncontrolling interests	(485		)	(198		)	(579		)	(436		)
Net income attributable to CPA:18 – Global	$	6,148		$	3,201		$	15,565		$	7,573
Self Storage
Revenues	$	14,398		$	13,856		$	28,371		$	27,049
Operating expenses	(8,762		)	(11,663		)	(18,111		)	(23,752		)
Interest expense	(3,288		)	(3,039		)	(6,382		)	(6,044		)
Other income and (expenses), excluding interest expense (d)	(266		)	(308		)	(745		)	(406		)
Provision for income taxes	(28		)	(48		)	(55		)	(125		)
Net income (loss) attributable to CPA:18 – Global	$	2,054		$	(1,202	)	$	3,078		$	(3,278	)
Multi-Family
Revenues	$	5,911		$	6,452		$	11,601		$	12,620
Operating expenses	(4,194		)	(4,554		)	(8,356		)	(8,880		)
Interest expense	(923		)	(1,434		)	(1,828		)	(2,586		)
Other income and (expenses), excluding interest expense	151			3			152			4
Benefit from (provision for) income taxes	47			(200		)	60			(227		)
Net loss attributable to noncontrolling interests	—			34			8			23
Net income attributable to CPA:18 – Global	$	992		$	301		$	1,637		$	954
All Other
Revenues	$	1,795		$	1,783		$	3,575		$	3,532
Operating expenses	(1		)	(2		)	(2		)	(10		)
Net income attributable to CPA:18 – Global	$	1,794		$	1,781		$	3,573		$	3,522
Corporate
Unallocated Corporate Overhead (e)	$	(8,492	)	$	3,889		$	(9,125	)	$	1,495
Net income attributable to noncontrolling interests — Available Cash Distributions	$	(2,830	)	$	(2,186	)	$	(4,735	)	$	(3,861	)
Total Company
Revenues	$	55,403		$	50,973		$	109,838		$	99,453
Operating expenses	(37,119		)	(39,130		)	(74,389		)	(76,105		)
Interest expense	(13,294		)	(11,791		)	(26,224		)	(23,244		)
Other income and (expenses), excluding interest expense	(2,307		)	9,205			5,361			11,768
Benefit from (provision for) income taxes	298			(1,123		)	713			(1,193		)
Net income attributable to noncontrolling interests	(3,315		)	(2,350		)	(5,306		)	(4,274		)
Net (loss) income attributable to CPA:18 – Global	$	(334	)	$	5,784		$	9,993		$	6,405

	Total Assets
	June 30, 2018		December 31, 2017
Net Lease	$	1,546,102	$	1,572,437
Self Storage	394,704		398,944
Multi-Family	349,605		256,875
Corporate	44,161		35,812
All Other	64,371		66,929
Total Company	$	2,398,943	$	2,330,997

__________

(a) We recognized straight-line rent adjustments of $1.2 million and $1.1 million for the three months ended June 30, 2018 and 2017, respectively, and $2.5 million and $2.1 million for the six months ended June 30, 2018 and 2017, respectively, which increased Lease revenues within our condensed consolidated financial statements for each period.

(b) In April 2017, the Croatian government passed a special law assisting the restructuring of companies considered of systemic significance in Croatia. This law directly impacts our Agrokor tenant, which is currently experiencing financial distress and received a credit downgrade from both Standard & Poor’s and Moody’s. As a result of these financial difficulties and uncertainty regarding future rent collections from the tenant, we recorded bad debt expense of $2.1 million and $1.0 million during the six months ended June 30, 2018 and 2017, respectively. In July 2018, the creditors of Agrokor reached a settlement plan to attempt to restructure the company, but as of the date of this Report, we are unable to assess the potential impact of that plan on this investment.

(c) As a result of the financial difficulties and uncertainty regarding future rent collections from a tenant in Stavanger, Norway, we recorded bad debt expense of $0.6 million and $1.1 million during the three and six months ended June 30, 2017, respectively.

(d) Includes Equity in losses of equity method investment in real estate.

(e) Included in unallocated corporate overhead are asset management fees and general and administrative expenses. These expenses are calculated and reported at the portfolio level and not evaluated as part of any segment’s operating performance.

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Basis of Presentation (Policies)

6 Months Ended

Jun. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

Basis of Presentation

Our interim condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and, therefore, do not necessarily include all information and footnotes necessary for a fair statement of our consolidated financial position, results of operations, and cash flows in accordance with generally accepted accounting principles in the United States, or GAAP.

Basis of Consolidation

Basis of Consolidation

Our condensed consolidated financial statements reflect all of our accounts, including those of our controlled subsidiaries. The portions of equity in consolidated subsidiaries that are not attributable, directly or indirectly, to us are presented as noncontrolling interests. All significant intercompany accounts and transactions have been eliminated.

Variable Interest Entity

When we obtain an economic interest in an entity, we evaluate the entity to determine if it should be deemed a variable interest entity, or VIE, and, if so, whether we are the primary beneficiary and are therefore required to consolidate the entity. We apply accounting guidance for consolidation of VIEs to certain entities in which the equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. Fixed price purchase and renewal options within a lease, as well as certain decision-making rights within a loan or joint-venture agreement, can cause us to consider an entity a VIE. Limited partnerships and other similar entities that operate as a partnership will be considered VIEs unless the limited partners hold substantive kick-out rights or participation rights. Significant judgment is required to determine whether a VIE should be consolidated. We review the contractual arrangements provided for in the partnership agreement or other related contracts to determine whether the entity is considered a VIE and to establish whether we have any variable interests in the VIE. We then compare our variable interests, if any, to those of the other variable interest holders to determine which party is the primary beneficiary of the VIE based on whether the entity (i) has the power to direct the activities that most significantly impact the economic performance of the VIE and (ii) has the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. The liabilities of these VIEs are non-recourse to us and can only be satisfied from each VIE’s respective assets.

Restricted Cash

Restricted Cash — In connection with our adoption of Accounting Standards Update, or ASU, 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, as described below, we revised our condensed consolidated statements of cash flows to include restricted cash when reconciling the beginning-of-period and end-of-period cash amounts shown on the statement of cash flows. As a result, we retrospectively revised prior periods presented to conform to the current period presentation. Restricted cash primarily consists of security deposits and amounts required to be reserved pursuant to lender agreements for debt service, capital improvements, and real estate taxes.

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board, or FASB, issued ASU2014-09, Revenue from Contracts with Customers (Topic 606). ASU 2014-09 is a comprehensive new revenue recognition model requiring a company to recognize revenue to depict the transfer of goods or services to a customer at an amount reflecting the consideration it expects to receive in exchange for those goods or services. ASU 2014-09 does not apply to our lease revenues, which constitute a majority of our revenues, but will primarily apply to revenues generated from our operating properties. We adopted this guidance for our interim and annual periods beginning January 1, 2018 using the modified retrospective transition method applied to any contracts not completed as of that date. There were no changes to the prior period presentations of revenue. Results of operations for reporting periods beginning January 1, 2018 are presented under Topic 606. The adoption of Topic 606 did not have a material impact on our condensed consolidated financial statements.

Revenue is recognized when, or as, control of promised goods or services is transferred to customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. At contract inception, we assess the services promised in our contracts with customers and identify a performance obligation for each promise to transfer to the customer a good or service (or bundle of goods or services) that is distinct. To identify the performance obligations, we consider all of the services promised in the contract regardless of whether they are explicitly stated or are implied by customary business practices.

In January 2016, the FASB issued ASU 2016-01, Financial Instruments — Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. ASU 2016-01 requires all equity investments (other than those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value, with changes in the fair value recognized through net income. We adopted this guidance for our interim and annual periods beginning January 1, 2018. The adoption of ASU 2016-01 did not have a material impact on our condensed consolidated financial statements.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. ASU 2016-15 intends to reduce diversity in practice for certain cash flow classifications, including, but not limited to (i) debt prepayment or debt extinguishment costs, (ii) contingent consideration payments made after a business combination, (iii) proceeds from the settlement of insurance claims, and (iv) distributions received from equity method investees. We retrospectively adopted this guidance for our interim and annual periods beginning January 1, 2018. The adoption of ASU 2016-15 did not have a material impact on our condensed consolidated financial statements.

In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. ASU 2016-18 intends to reduce diversity in practice for the classification and presentation of changes in restricted cash on the statement of cash flows. ASU 2016-18 requires that the statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. We retrospectively adopted this guidance for our interim and annual periods beginning January 1, 2018. See Restricted Cash above for additional information.

In February 2017, the FASB issued ASU 2017-05, Other Income — Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets. ASU 2017-05 clarifies the scope and application of Accounting Standards Codification, or ASC, 610-20 on the sale or transfer of nonfinancial assets and in substance nonfinancial assets to non-customers, including partial sales. Nonfinancial assets within the scope of this Subtopic include the sale of land, buildings and intangible assets. ASU 2017-05 further clarifies that a financial asset is within the scope of Subtopic 610-20 if it meets the definition of an in substance nonfinancial asset. The amendments define the term “in substance nonfinancial asset,” in part, as a financial asset promised to a counterparty in a contract if substantially all of the fair value of the assets (recognized and unrecognized) that are promised to the counterparty in the contract is concentrated in nonfinancial assets. This amendment also clarifies that nonfinancial assets within the scope of Subtopic 610-20 may include nonfinancial assets transferred within a legal entity to a counterparty. For example, a parent company may transfer control of nonfinancial assets by transferring ownership interests in a consolidated subsidiary. We adopted this guidance for our interim and annual periods beginning January 1, 2018 and applied the modified retrospective transition method (applicable to any contracts not completed as of that date). The adoption of ASU 2017-05 did not have a material impact on our condensed consolidated financial statements.

Pronouncements to be Adopted after June 30, 2018

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 modifies the principles for the recognition, measurement, presentation, and disclosure of leases for both parties to a contract, the lessee and the lessor. ASU 2016-02 provides new guidelines that change the accounting for leasing arrangements for lessees, whereby their rights and obligations under substantially all leases, existing and new, would be capitalized and recorded on the balance sheet. For lessors, however, the accounting remains largely equivalent to the current model, with the distinction between operating, sales-type, and direct financing leases retained, but updated to align with certain changes to the lessee model and the new revenue recognition standard. ASU 2016-02 also replaces existing sale-leaseback guidance with a new model that requires symmetrical accounting between the seller-lessee and buyer-lessor. Additionally, ASU 2016-02 requires lessors to record costs paid directly by a lessee on behalf of a lessor (e.g., real estate taxes and insurance costs) on a gross basis and will require extensive quantitative and qualitative disclosures.

Early application is permitted for all entities. ASU 2016-02 provides two transition methods. The first transition method allows for application of the new model at the beginning of the earliest comparative period presented. Under the second transition method, comparative periods would not be restated, with any cumulative effect adjustments recognized in the opening balance of retained earnings in the period of adoption. In addition, a practical expedient was recently issued by the FASB, which allows lessors to combine non-lease components with related lease components if certain conditions are met. Further, in March 2018, the FASB approved, but has not yet finalized or issued, an update to allow lessors to make a policy election to record certain costs (e.g., insurance) paid directly by the lessee net, if the uncertainty regarding these variable amounts is not expected to ultimately be resolved. We will adopt this guidance for our interim and annual periods beginning January 1, 2019 and expect to use the second transition method. ASU 2016-02 is expected to impact our condensed consolidated financial statements as we have certain operating office and land lease arrangements for which we are the lessee and also certain lease arrangements that include common area maintenance services (non-lease components) where we are the lessor. We are evaluating the impact of ASU 2016-02 and have not yet determined if it will have a material impact on our business or our condensed consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses. ASU 2016-13 introduces a new model for estimating credit losses based on current expected credit losses for certain types of financial instruments, including loans receivable, held-to-maturity debt securities, and net investments in direct financing leases, amongst other financial instruments. ASU 2016-13 also modifies the impairment model for available-for-sale debt securities and expands the disclosure requirements regarding an entity’s assumptions, models, and methods for estimating the allowance for losses. ASU 2016-13 will be effective for public business entities in fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, with early application of the guidance permitted. We are in the process of evaluating the impact of adopting ASU 2016-13 on our condensed consolidated financial statements.

In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. ASU 2017-12 will make more financial and nonfinancial hedging strategies eligible for hedge accounting. It also amends the presentation and disclosure requirements and changes how companies assess hedge effectiveness. It is intended to more closely align hedge accounting with companies’ risk management strategies, simplify the application of hedge accounting, and increase transparency as to the scope and results of hedging programs. ASU 2017-12 will be effective in fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. We are in the process of evaluating the impact of adopting ASU 2017-12 on our condensed consolidated financial statements, and will adopt the standard for the fiscal year beginning January 1, 2019.

Accounting Policy Update

Distributions from Equity Method Investments — We classify distributions received from equity method investments using the cumulative earnings approach. Distributions received are considered returns on the investment and classified as cash inflows from operating activities. If, however, the investor’s cumulative distributions received, less distributions received in prior periods determined to be returns of investment, exceeds cumulative equity in earnings recognized, the excess is considered a return of investment and is classified as cash inflows from investing activities.

Reclassifications 

Certain prior period amounts have been reclassified to conform to the current period presentation.

In the second quarter of 2018, we reclassified notes receivable, equity investment in real estate, and goodwill to be included within Accounts receivable and other assets, net in our condensed consolidated balance sheets. Additionally, we reclassified deferred income taxes to be included within Accounts payable, accrued expenses and other liabilities in our condensed consolidated balance sheets. Prior period balances have been reclassified to conform to the current period presentation.

Intangible Assets and Liabilities

Amortization of below-market rent and above-market rent intangibles is recorded as an adjustment to Rental income, amortization of below-market and above-market ground lease intangibles is included in Property expenses, and amortization of in-place lease intangibles is included in Depreciation and amortization expense in the condensed consolidated financial statements.

Fair Value Measurements

The fair value of an asset is defined as the exit price, which is the amount that would either be received when an asset is sold or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The guidance establishes a three-tier fair value hierarchy based on the inputs used in measuring fair value. These tiers are: Level 1, for which quoted market prices for identical instruments are available in active markets, such as money market funds, equity securities, and U.S. Treasury securities; Level 2, for which there are inputs other than quoted prices included within Level 1 that are observable for the instrument, such as certain derivative instruments including interest rate caps, interest rate swaps, foreign currency forward contracts and foreign currency collars; and Level 3, for securities that do not fall into Level 1 or Level 2 and for which little or no market data exists, therefore requiring us to develop our own assumptions.

Derivative Assets — Our derivative assets, which are included in Accounts receivable and other assets, net in the condensed consolidated financial statements, are comprised of foreign currency forward contracts, interest rate swaps, interest rate caps, and foreign currency collars (Note 8). These derivative instruments were measured at fair value using readily observable market inputs, such as quotations on interest rates, and were classified as Level 2 as these instruments are custom, over-the-counter contracts with various bank counterparties that are not traded in an active market.

Derivative Liabilities — Our derivative liabilities, which are included in Accounts payable, accrued expenses and other liabilities in the condensed consolidated financial statements, are comprised of interest rate swaps and foreign currency collars (Note 8). These derivative instruments were measured at fair value using readily observable market inputs, such as quotations on interest rates, and were classified as Level 2 because they are custom, over-the-counter contracts with various bank counterparties that are not traded in an active market.

Derivatives

We measure derivative instruments at fair value and record them as assets or liabilities, depending on our rights or obligations under the applicable derivative contract. Derivatives that are not designated as hedges must be adjusted to fair value through earnings. For a derivative designated, and that qualified, as a cash flow hedge, the effective portion of the change in fair value of the derivative is recognized in Other comprehensive (loss) income until the hedged item is recognized in earnings. For a derivative designated, and that qualified, as a net investment hedge, the effective portion of the change in its fair value and/or the net settlement of the derivative is reported in Other comprehensive (loss) income as part of the cumulative foreign currency translation adjustment. The ineffective portion of the change in fair value of any derivative is immediately recognized in earnings.

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Basis of Presentation Basis of Presentation (Tables)

6 Months Ended

Jun. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Variable Interest Entities

The following table presents a summary of selected financial data of the consolidated VIEs included in the condensed consolidated balance sheets (in thousands):

	June 30, 2018			December 31, 2017
Real estate — Land, buildings and improvements	$	370,439		$	373,954
Real estate under construction	171,872			107,732
In-place lease intangible assets	87,185			88,617
Other intangible assets	17,536			18,040
Accumulated depreciation and amortization	(61,354		)	(54,592		)
Cash and cash equivalents	10,585			5,030
Accounts receivable and other assets, net	34,167			33,219
Total assets	630,430			572,000
Non-recourse mortgages, net	$	255,406		$	218,267
Bonds payable, net	60,945			60,577
Accounts payable, accrued expenses and other liabilities	52,637			46,858
Total liabilities	368,988			325,702

Schedule of Details of Accounts Receivables, Accounts Payable, and Other Assets and Liabilities

The following table presents a summary of amounts included in Accounts receivable and other assets, net in the condensed consolidated financial statements (in thousands):

	June 30, 2018		December 31, 2017
Accounts receivable and other assets, net
Notes receivable (Note 5)	$	63,954	$	66,500
Accounts receivable, net	33,249		32,572
Goodwill (Note 6)	27,562		26,084
Restricted cash	23,706		19,115
Equity investment in real estate (Note 4)	19,594		20,919
Prepaid expenses	14,484		13,496
Other assets	21,693		18,792
	$	204,242	$	197,478

The following table presents a summary of amounts included in Accounts payable, accrued expenses and other liabilities in the condensed consolidated financial statements (in thousands):

	June 30, 2018		December 31, 2017
Accounts payable, accrued expenses and other liabilities
Deferred income taxes	$	61,619	$	63,980
Accounts payable and accrued expenses	40,769		39,626
Deferred revenue	13,622		11,975
Intangible liabilities, net (Note 6)	10,393		11,009
Other liabilities	23,405		21,441
	$	149,808	$	148,031

Reconciliation of Cash and Cash Equivalents

The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the condensed consolidated balance sheets to the condensed consolidated statements of cash flows (in thousands):

	June 30, 2018		December 31, 2017
Cash and cash equivalents	$	90,971	$	71,068
Restricted cash (a)	23,706		19,115
Total cash and cash equivalents and restricted cash	$	114,677	$	90,183

__________

(a) Restricted cash is included within Accounts receivable and other assets, net on our condensed consolidated balance sheets.

Restrictions on Cash and Cash Equivalents

The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the condensed consolidated balance sheets to the condensed consolidated statements of cash flows (in thousands):

	June 30, 2018		December 31, 2017
Cash and cash equivalents	$	90,971	$	71,068
Restricted cash (a)	23,706		19,115
Total cash and cash equivalents and restricted cash	$	114,677	$	90,183

__________

(a) Restricted cash is included within Accounts receivable and other assets, net on our condensed consolidated balance sheets.

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Agreements and Transactions with Related Parties (Tables)

6 Months Ended

Jun. 30, 2018

Related Party Transactions [Abstract]

Schedule of Related Party Transactions

The following tables present a summary of fees we paid, expenses we reimbursed, and distributions we made to our Advisor and other affiliates (which excludes the annual distribution and shareholder servicing fee that impacts equity as further disclosed below the tables), in accordance with the terms of the relevant agreements (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018			2017
Amounts Included in the Condensed Consolidated Statements of Operations
Asset management fees	$	3,151	$	2,767	$	6,025		$	5,476
Available Cash Distributions	2,830		2,186		4,735			3,861
Personnel and overhead reimbursements	716		787		1,433			1,569
Director compensation	40		53		80			105
Interest expense on deferred acquisition fees, affiliate loan, and accretion of interest on annual distribution and shareholder servicing fee (a)	20		319		(42		)	620
	$	6,757	$	6,112	$	12,231		$	11,631
Advisor Fees Capitalized
Current acquisition fees	$	2,379	$	—	$	3,100		$	1,393
Deferred acquisition fees	1,903		—		2,480			1,114
Capitalized personnel and overhead reimbursements	259		2		371			184
	$	4,541	$	2	$	5,951		$	2,691

__________

(a) For the three and six months ended June 30, 2018 interest on the annual distribution and shareholder servicing fee is excluded as it is paid directly to selected dealers rather than through Carey Financial LLC, or Carey Financial, as discussed further below.

The following table presents a summary of amounts included in Due to affiliates in the condensed consolidated financial statements (in thousands):

	June 30, 2018		December 31, 2017
Due to Affiliates
Deferred acquisition fees, including accrued interest	$	5,786	$	6,693
Accounts payable and other	3,316		6,102
Current acquisition fees	1,652		—
Asset management fees payable	1,026		972
	$	11,780	$	13,767

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Real Estate, Operating Real Estate, Real Estate Under Construction, and Equity Investment in Real Estate (Tables)

6 Months Ended

Jun. 30, 2018

Real Estate [Abstract]

Schedule of Real Estate Properties

Real estate, which consists of land and buildings leased to others, and which are subject to operating leases, is summarized as follows (in thousands):

	June 30, 2018			December 31, 2017
Land	$	204,198		$	202,500
Buildings and improvements	1,070,825			1,060,672
Less: Accumulated depreciation	(101,331		)	(87,886		)
	$	1,173,692		$	1,175,286

Operating real estate, which consists of our self-storage and multi-family properties, is summarized as follows (in thousands):

	June 30, 2018			December 31, 2017
Land	$	98,432		$	98,429
Buildings and improvements	470,169			468,060
Less: Accumulated depreciation	(52,409		)	(43,786		)
	$	516,192		$	522,703

Real Estate Under Construction

The following table provides the activity of our Real estate under construction (in thousands):

	Six Months Ended June 30, 2018
Beginning balance	$	134,366
Capitalized funds	87,646
Placed into service	(25,900		)
Foreign currency translation adjustments	(3,498		)
Capitalized interest	2,508
Ending balance	$	195,122

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Finance Receivables (Tables)

6 Months Ended

Jun. 30, 2018

Receivables [Abstract]

Financing Receivable Credit Quality Indicators

A summary of our finance receivables by internal credit quality rating is as follows (dollars in thousands):

	Number of Tenants/Obligors at		Carrying Value at
Internal Credit Quality Indicator	June 30, 2018	December 31, 2017	June 30, 2018		December 31, 2017
1	—	—	$	—	$	—
2	2	2	15,738		14,386
3	2	2	29,734		29,716
4	2	2	60,130		62,355
5	—	—	—		—
	0		$	105,602	$	106,457

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Intangible Assets and Liabilities (Tables)

6 Months Ended

Jun. 30, 2018

Intangible Assets And Liabilities [Abstract]

Goodwill Rollforward

The following table presents a reconciliation of our goodwill, which is included in our Net Lease segment and included in Accounts receivable and other assets, net in the condensed consolidated financial statements (in thousands):

	Six Months Ended June 30, 2018
Balance at January 1, 2018	$	26,084
Other	1,629
Foreign currency translation	(151		)
Balance at June 30, 2018	$	27,562

Schedule Of Intangible Assets and Liabilities

Intangible assets and liabilities are summarized as follows (in thousands):

		June 30, 2018									December 31, 2017
	Amortization Period (Years)	Gross Carrying Amount			Accumulated Amortization			Net Carrying Amount			Gross Carrying Amount			Accumulated Amortization			Net Carrying Amount
Finite-Lived Intangible Assets
In-place lease	4 - 23	$	270,957		$	(123,210	)	$	147,747		$	274,723		$	(115,515	)	$	159,208
Below-market ground lease	30 - 99	22,362			(1,538		)	20,824			23,000			(1,238		)	21,762
Above-market rent	4 - 30	12,605			(4,100		)	8,505			12,811			(3,642		)	9,169
		305,924			(128,848		)	177,076			310,534			(120,395		)	190,139
Indefinite-Lived Intangible Assets
Goodwill		27,562			—			27,562			26,084			—			26,084
Total intangible assets		$	333,486		$	(128,848	)	$	204,638		$	336,618		$	(120,395	)	$	216,223
Finite-lived Intangible Liabilities
Below-market rent	5 - 30	$	(15,423	)	$	5,133		$	(10,290	)	$	(15,476	)	$	4,573		$	(10,903	)
Above-market ground lease	81	(108		)	5			(103		)	(110		)	4			(106		)
Total intangible liabilities		$	(15,531	)	$	5,138		$	(10,393	)	$	(15,586	)	$	4,577		$	(11,009	)

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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2018

Fair Value Disclosures [Abstract]

Schedule Of Other Financial Instruments In Carrying Values And Fair Values

Our other financial instruments had the following carrying values and fair values as of the dates shown (dollars in thousands):

		June 30, 2018				December 31, 2017
	Level	Carrying Value		Fair Value		Carrying Value		Fair Value
Debt, net (a) (b)	3	$	1,370,526	$	1,387,730	$	1,275,448	$	1,301,844
Notes receivable (c) (d)	3	63,954		66,454		66,500		69,000

___________

(a) Debt, net consists of Non-recourse mortgages, net and Bonds payable, net. At June 30, 2018 and December 31, 2017, the carrying value of Non-recourse mortgages, net includes unamortized deferred financing costs of $7.5 million and $7.0 million, respectively. At both June 30, 2018 and December 31, 2017, the carrying value of Bonds payable, net includes unamortized deferred financing costs of $0.8 million (Note 9).

(b) We determined the estimated fair value of our Non-recourse mortgages, net and Bonds payable, net using a discounted cash flow model that estimates the present value of the future loan payments by discounting such payments at current estimated market interest rates. The estimated market interest rates take into account interest rate risk and the value of the underlying collateral, which includes quality of the collateral, the credit quality of the tenant/obligor, and the time until maturity.

(c) We determined the estimated fair value of our Notes receivable using a discounted cash flow model with rates that take into account the credit of the tenant/obligor, order of payment tranches, and interest rate risk. We also considered the value of the underlying collateral, taking into account the quality of the collateral, the credit quality of the tenant/obligor, the time until maturity, and the current market interest rate.

(d) During the six months ended June 30, 2018, we received partial repayments for the Mills Fleet mezzanine loan totaling $2.5 million. As a result, the balances for the notes receivable at June 30, 2018 were $28.0 million and $36.0 million for Cipriani and Mills Fleet, respectively (Note 5).

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Risk Management and Use of Derivative Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2018

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value

The following table sets forth certain information regarding our derivative instruments (in thousands):

Derivatives Designated as Hedging Instruments	Balance Sheet Location	Asset Derivatives Fair Value at				Liability Derivatives Fair Value at
		June 30, 2018		December 31, 2017		June 30, 2018			December 31, 2017
Foreign currency forward contracts	Accounts receivable and other assets, net	$	2,217	$	2,419	$	—		$	—
Interest rate swaps	Accounts receivable and other assets, net	1,509		553		—			—
Foreign currency collars	Accounts receivable and other assets, net	165		258		—			—
Interest rate caps	Accounts receivable and other assets, net	1		1		—			—
Foreign currency collars	Accounts payable, accrued expenses and other liabilities	—		—		(1,988		)	(3,266		)
Interest rate swaps	Accounts payable, accrued expenses and other liabilities	—		—		(176		)	(698		)
Derivatives Not Designated as Hedging Instruments
Foreign currency collars	Accounts payable, accrued expenses and other liabilities	—		—		—			(366		)
Total		$	3,892	$	3,231	$	(2,164	)	$	(4,330	)

Schedule of Derivative Instruments, Effect on Other Comprehensive Income (Loss)

The following tables present the impact of our derivative instruments in the condensed consolidated financial statements (in thousands):

	Amount of Gain (Loss) Recognized on Derivatives in Other Comprehensive (Loss) Income (Effective Portion)
	Three Months Ended June 30,					Six Months Ended June 30,
Derivatives in Cash Flow Hedging Relationships	2018		2017			2018			2017
Foreign currency collars	$	2,626	$	(2,379	)	$	1,421		$	(2,613	)
Foreign currency forward contracts	427		(1,162		)	(202		)	(1,634		)
Interest rate swaps	363		(277		)	1,520			(32		)
Interest rate caps	2		(6		)	20			(2		)
Derivatives in Net Investment Hedging Relationship (a)
Foreign currency collars	80		(23		)	(46		)	(33		)
Foreign currency forward contracts	23		(88		)	—			(107		)
Total	$	3,521	$	(3,935	)	$	2,713		$	(4,421	)

___________

(a) The effective portion of the changes in fair value and the settlement of these contracts is reported in the foreign currency translation adjustment section of Other comprehensive (loss) income until the underlying investment is sold, at which time we reclassify the gain or loss to earnings.

		Amount of Gain (Loss) on Derivatives Reclassified from Other Comprehensive (Loss) Income into Income (Effective Portion)
Derivatives in Cash Flow Hedging Relationships	Location of Gain (Loss) Recognized in Income	Three Months Ended June 30,						Six Months Ended June 30,
		2018			2017			2018			2017
Foreign currency forward contracts	Other gains and (losses)	$	237		$	334		$	459		$	690
Interest rate swaps	Interest expense	(76		)	(176		)	(159		)	(387		)
Foreign currency collars	Other gains and (losses)	(26		)	77			(180		)	169
Interest rate caps	Interest expense	(8		)	(10		)	(39		)	(15		)
Total		$	127		$	225		$	81		$	457

Derivative Instruments, Gain (Loss)

The following table presents the impact of our derivative instruments in the condensed consolidated financial statements (in thousands):

		Amount of Gain (Loss) on Derivatives Recognized in Income
Derivatives Not in Cash Flow Hedging Relationships	Location of Gain (Loss) Recognized in Income	Three Months Ended June 30,						Six Months Ended June 30,
		2018			2017			2018			2017
Foreign currency collars	Other gains and (losses)	$	56		$	(25	)	$	(95	)	$	(45	)
Interest rate swaps	Interest expense	(41		)	27			(47		)	(22		)
Derivatives in Cash Flow Hedging Relationships (a)
Foreign currency collars	Other gains and (losses)	(5		)	(5		)	(15		)	(4		)
Interest rate swaps	Interest expense	(1		)	7			5			10
Total		$	9		$	4		$	(152	)	$	(61	)

__________

(a) Relates to the ineffective portion of the hedging relationship.

Schedule of Derivative Instruments

The interest rate swaps and caps that our consolidated subsidiaries had outstanding at June 30, 2018 are summarized as follows (currency in thousands):

Interest Rate Derivatives	Number of Instruments	Notional Amount		Fair Value at June 30, 2018 (a)
Interest rate swaps	9	94,283	USD	$	1,374
Interest rate swap	1	10,025	EUR	(41		)
Interest rate cap	2	11,300	USD	1
				$	1,334

___________

(a) Fair value amount is based on the exchange rate of the euro at June 30, 2018, as applicable.

The following table presents the foreign currency derivative contracts we had outstanding and their designations at June 30, 2018 (currency in thousands):

Foreign Currency Derivatives	Number of Instruments	Notional Amount		Fair Value at June 30, 2018
Designated as Cash Flow Hedging Instruments
Foreign currency collars	48	31,964	EUR	$	(1,789	)
Foreign currency forward contracts	19	7,375	EUR	1,598
Foreign currency forward contracts	13	20,293	NOK	559
Foreign currency collars	24	49,470	NOK	(79		)
Designated as Net Investment Hedging Instruments
Foreign currency forward contracts	2	4,504	NOK	60
Foreign currency collars	3	16,750	NOK	45
				$	394

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Debt, net (Tables)

6 Months Ended

Jun. 30, 2018

Debt Disclosure [Abstract]

Schedule of Debt Maturities

Scheduled debt principal payments during the remainder of 2018, each of the next four calendar years following December 31, 2018, and thereafter are as follows (in thousands):

Years Ending December 31,	Total
2018 (remainder)	$	9,084
2019	58,138
2020	124,786
2021	206,022
2022	195,229
Thereafter through 2039	785,278
Total principal payments	1,378,537
Unamortized deferred financing costs	(8,250		)
Unamortized discount, net	239
Total	$	1,370,526

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Net (Loss) Income Per Share and Equity (Tables)

6 Months Ended

Jun. 30, 2018

Earnings Per Share [Abstract]

Basic and Diluted Loss Per Share

The following table presents net (loss) income per share (in thousands, except share and per share amounts):

	Three Months Ended June 30, 2018						Three Months Ended June 30, 2017
	Basic and Diluted Weighted-Average Shares Outstanding	Allocation of Net Loss			Basic and Diluted Net (Loss) Income Per Share		Basic and Diluted Weighted-Average Shares Outstanding	Allocation of Net Income		Basic and Diluted Net Income Per Share
Class A common stock	113,010,970	$	(213	)	$	—	109,533,769	$	4,600	$	0.04
Class C common stock	31,593,597	(121		)	—		31,030,596	1,184		0.04
Net (loss) income attributable to CPA:18 – Global		$	(334	)				$	5,784

	Six Months Ended June 30, 2018					Six Months Ended June 30, 2017
	Basic and Diluted Weighted-Average Shares Outstanding	Allocation of Net Income		Basic and Diluted Net Income Per Share		Basic and Diluted Weighted-Average Shares Outstanding	Allocation of Net Income		Basic and Diluted Net Income Per Share
Class A common stock	112,564,943	$	7,901	$	0.07	108,998,427	$	5,179	$	0.05
Class C common stock	31,517,919	2,092		0.07		30,898,107	1,226		0.04
Net income attributable to CPA:18 – Global		$	9,993				$	6,405

Reclassification out of Accumulated Other Comprehensive Income

The following tables present a reconciliation of changes in Accumulated other comprehensive loss by component for the periods presented (in thousands):

	Three Months Ended June 30, 2018
	Gains and (Losses) on Derivative Instruments			Foreign Currency Translation Adjustments			Total
Beginning balance	$	(1,741	)	$	(22,170	)	$	(23,911	)
Other comprehensive loss before reclassifications	3,545			(22,582		)	(19,037		)
Amounts reclassified from accumulated other comprehensive loss to:
Other gains and (losses)	(211		)	—			(211		)
Interest expense	84			—			84
Net current-period other comprehensive loss	3,418			(22,582		)	(19,164		)
Net current-period other comprehensive loss attributable to noncontrolling interests	—			2,326			2,326
Ending balance	$	1,677		$	(42,426	)	$	(40,749	)

	Three Months Ended June 30, 2017
	Gains and (Losses) on Derivative Instruments			Foreign Currency Translation Adjustments			Total
Beginning balance	$	5,130		$	(63,665	)	$	(58,535	)
Other comprehensive income before reclassifications	(3,599		)	19,541			15,942
Amounts reclassified from accumulated other comprehensive loss to:
Other gains and (losses)	(411		)	—			(411		)
Interest expense	186			—			186
Net current-period other comprehensive income	(3,824		)	19,541			15,717
Net current-period other comprehensive income attributable to noncontrolling interests	—			(2,265		)	(2,265		)
Ending balance	$	1,306		$	(46,389	)	$	(45,083	)

	Six Months Ended June 30, 2018
	Gains and (Losses) on Derivative Instruments			Foreign Currency Translation Adjustments			Total
Beginning balance	$	(1,082	)	$	(32,130	)	$	(33,212	)
Other comprehensive loss before reclassifications	2,840			(11,005		)	(8,165		)
Amounts reclassified from accumulated other comprehensive loss to:
Other gains and (losses)	(279		)	—			(279		)
Interest expense	198			—			198
Net current-period other comprehensive loss	2,759			(11,005		)	(8,246		)
Net current-period other comprehensive loss attributable to noncontrolling interests	—			709			709
Ending balance	$	1,677		$	(42,426	)	$	(40,749	)

	Six Months Ended June 30, 2017
	Gains and (Losses) on Derivative Instruments			Foreign Currency Translation Adjustments			Total
Beginning balance	$	5,587		$	(67,291	)	$	(61,704	)
Other comprehensive income before reclassifications	(3,824		)	23,697			19,873
Amounts reclassified from accumulated other comprehensive loss to:
Other gains and (losses)	(859		)	—			(859		)
Interest expense	402			—			402
Net current-period other comprehensive income	(4,281		)	23,697			19,416
Net current-period other comprehensive income attributable to noncontrolling interests	—			(2,795		)	(2,795		)
Ending balance	$	1,306		$	(46,389	)	$	(45,083	)

See Note 8 for additional information on our derivative activity recognized within Other comprehensive (loss) income for the periods presented.

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Segment Reporting (Tables)

6 Months Ended

Jun. 30, 2018

Segment Reporting [Abstract]

Reconciliation of Revenue from Segments to Consolidated

(a) We recognized straight-line rent adjustments of $1.2 million and $1.1 million for the three months ended June 30, 2018 and 2017, respectively, and $2.5 million and $2.1 million for the six months ended June 30, 2018 and 2017, respectively, which increased Lease revenues within our condensed consolidated financial statements for each period.

(b) In April 2017, the Croatian government passed a special law assisting the restructuring of companies considered of systemic significance in Croatia. This law directly impacts our Agrokor tenant, which is currently experiencing financial distress and received a credit downgrade from both Standard & Poor’s and Moody’s. As a result of these financial difficulties and uncertainty regarding future rent collections from the tenant, we recorded bad debt expense of $2.1 million and $1.0 million during the six months ended June 30, 2018 and 2017, respectively. In July 2018, the creditors of Agrokor reached a settlement plan to attempt to restructure the company, but as of the date of this Report, we are unable to assess the potential impact of that plan on this investment.

(c) As a result of the financial difficulties and uncertainty regarding future rent collections from a tenant in Stavanger, Norway, we recorded bad debt expense of $0.6 million and $1.1 million during the three and six months ended June 30, 2017, respectively.

(d) Includes Equity in losses of equity method investment in real estate.

(e) Included in unallocated corporate overhead are asset management fees and general and administrative expenses. These expenses are calculated and reported at the portfolio level and not evaluated as part of any segment’s operating performance.

The following tables present a summary of comparative results and assets for these business segments (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Net Lease
Revenues (a)	$	33,299		$	28,882		$	66,291		$	56,252
Operating expenses (b) (c)	(19,307		)	(18,319		)	(38,426		)	(34,355		)
Interest expense	(9,002		)	(6,999		)	(17,860		)	(13,994		)
Other income and (expenses), excluding interest expense	1,555			540			5,906			745
Benefit from (provision for) income taxes	88			(705		)	233			(639		)
Net income attributable to noncontrolling interests	(485		)	(198		)	(579		)	(436		)
Net income attributable to CPA:18 – Global	$	6,148		$	3,201		$	15,565		$	7,573
Self Storage
Revenues	$	14,398		$	13,856		$	28,371		$	27,049
Operating expenses	(8,762		)	(11,663		)	(18,111		)	(23,752		)
Interest expense	(3,288		)	(3,039		)	(6,382		)	(6,044		)
Other income and (expenses), excluding interest expense (d)	(266		)	(308		)	(745		)	(406		)
Provision for income taxes	(28		)	(48		)	(55		)	(125		)
Net income (loss) attributable to CPA:18 – Global	$	2,054		$	(1,202	)	$	3,078		$	(3,278	)
Multi-Family
Revenues	$	5,911		$	6,452		$	11,601		$	12,620
Operating expenses	(4,194		)	(4,554		)	(8,356		)	(8,880		)
Interest expense	(923		)	(1,434		)	(1,828		)	(2,586		)
Other income and (expenses), excluding interest expense	151			3			152			4
Benefit from (provision for) income taxes	47			(200		)	60			(227		)
Net loss attributable to noncontrolling interests	—			34			8			23
Net income attributable to CPA:18 – Global	$	992		$	301		$	1,637		$	954
All Other
Revenues	$	1,795		$	1,783		$	3,575		$	3,532
Operating expenses	(1		)	(2		)	(2		)	(10		)
Net income attributable to CPA:18 – Global	$	1,794		$	1,781		$	3,573		$	3,522
Corporate
Unallocated Corporate Overhead (e)	$	(8,492	)	$	3,889		$	(9,125	)	$	1,495
Net income attributable to noncontrolling interests — Available Cash Distributions	$	(2,830	)	$	(2,186	)	$	(4,735	)	$	(3,861	)
Total Company
Revenues	$	55,403		$	50,973		$	109,838		$	99,453
Operating expenses	(37,119		)	(39,130		)	(74,389		)	(76,105		)
Interest expense	(13,294		)	(11,791		)	(26,224		)	(23,244		)
Other income and (expenses), excluding interest expense	(2,307		)	9,205			5,361			11,768
Benefit from (provision for) income taxes	298			(1,123		)	713			(1,193		)
Net income attributable to noncontrolling interests	(3,315		)	(2,350		)	(5,306		)	(4,274		)
Net (loss) income attributable to CPA:18 – Global	$	(334	)	$	5,784		$	9,993		$	6,405

Reconciliation of Assets from Segment to Consolidated

	Total Assets
	June 30, 2018		December 31, 2017
Net Lease	$	1,546,102	$	1,572,437
Self Storage	394,704		398,944
Multi-Family	349,605		256,875
Corporate	44,161		35,812
All Other	64,371		66,929
Total Company	$	2,398,943	$	2,330,997

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Organization - Narratives (Details) $ in Thousands, ft² in Millions	6 Months Ended		39 Months Ended	78 Months Ended
	Jun. 30, 2018 USD ($) ft² segment property tenant	Jun. 30, 2017 USD ($)	Apr. 02, 2015 USD ($)	Jun. 30, 2018 USD ($) ft² property tenant
Public Offering
Capital interest ownership in operating partnership	99.97%			99.97%
Additional Disclosures
Number of properties	59			59
Number of tenants | tenant	100			100
Area of real estate property (sqft) | ft²	10.2			10.2
Number of reportable segments | segment	3
Proceeds from issuance of shares | $	$ 20,970	$ 21,175	$ 1,200,000
Class A common stock
Additional Disclosures
Proceeds from dividend reinvestment plan | $				$ 133,600
Class C common stock
Additional Disclosures
Proceeds from dividend reinvestment plan | $				$ 37,000
Multi-family | Multi-family
Additional Disclosures
Number of properties	6			6
Student housing developments | Multi-family
Additional Disclosures
Number of properties	8			8
Operating Real Estate
Additional Disclosures
Area of real estate property (sqft) | ft²	6.7			6.7
Operating Real Estate | Self Storage
Additional Disclosures
Number of properties	69			69
Operating Real Estate | Multi-family
Additional Disclosures
Number of properties	14			14

XML

Basis of Presentation Basis of Presentation - Narratives (Details) $ in Thousands	Jun. 30, 2018 USD ($) vie	Dec. 31, 2017 USD ($) vie
Variable Interest Entity
Variable interest entities consolidated, count	15	11
Variable interest entities, count	16	12
Variable interest entities unconsolidated, count	1	1
Equity investment in real estate | $	$ 19,594	$ 20,919
Equity method investments
Variable Interest Entity
Equity investment in real estate | $	$ 19,600	$ 20,900

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Basis of Presentation - Variable Interest Entity Disclosure (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Assets
Real estate — Land, buildings and improvements	$ 1,275,023	$ 1,263,172
Real estate under construction	195,122	134,366
In-place lease intangible assets	270,957	274,723
Other intangible assets	34,967	35,811
Accumulated depreciation and amortization	(282,588)	(252,067)
Cash and cash equivalents	90,971	71,068
Accounts receivable and other assets, net	204,242	197,478
Total assets	2,398,943	2,330,997
Liabilities
Non-recourse mortgages, net	1,223,215	1,129,432
Bonds payable, net	147,311	146,016
Accounts payable, accrued expenses and other liabilities	149,808	148,031
Total liabilities	1,554,081	1,458,932
VIE
Assets
Real estate — Land, buildings and improvements	370,439	373,954
Real estate under construction	171,872	107,732
In-place lease intangible assets	87,185	88,617
Other intangible assets	17,536	18,040
Accumulated depreciation and amortization	(61,354)	(54,592)
Cash and cash equivalents	10,585	5,030
Accounts receivable and other assets, net	34,167	33,219
Total assets	630,430	572,000
Liabilities
Non-recourse mortgages, net	255,406	218,267
Bonds payable, net	60,945	60,577
Accounts payable, accrued expenses and other liabilities	52,637	46,858
Total liabilities	$ 368,988	$ 325,702

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Basis of Presentation - Accounts Receivable and Other Assets (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Notes receivable (Note 5)	$ 63,954	$ 66,500
Accounts receivable, net	33,249	32,572
Goodwill (Note 6)	27,562	26,084
Restricted cash	23,706	19,115
Equity investment in real estate (Note 4)	19,594	20,919
Prepaid expenses	14,484	13,496
Other assets	21,693	18,792
Accounts receivable and other assets, net	$ 204,242	$ 197,478

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Basis of Presentation - Accounts Payable, Accrued Expenses and Other Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Deferred income taxes	$ 61,619	$ 63,980
Accounts payable and accrued expenses	40,769	39,626
Deferred revenue	13,622	11,975
Intangible liabilities, net (Note 6)	10,393	11,009
Other liabilities	23,405	21,441
Accounts payable, accrued expenses and other liabilities	$ 149,808	$ 148,031

XML

Basis of Presentation - Cash, Cash Equivalents, and Restricted Cash Equivalents Reconciliation (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017	Jun. 30, 2017	Dec. 31, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Cash and cash equivalents	$ 90,971	$ 71,068
Restricted cash	23,706	19,115
Total cash and cash equivalents and restricted cash	$ 114,677	$ 90,183	$ 79,619	$ 93,741

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Agreements and Transactions with Related Parties - Narratives (Details) - USD ($)	6 Months Ended
	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Jul. 31, 2016
Related Party Transaction
Maximum line of credit approved by directors				$ 50,000,000.0
Due to Related Party
Underwriting compensation limit (as a percentage)	10.00%
Preferred return (as a percentage)	5.00%
Due from advisor			$ 700,000
Personnel and overhead reimbursement (as a percentage)	1.00%		2.00%
Legal fee reimbursement rate	0.25%
Distributions of available cash (as a percentage)	10.00%
Current
Due to Related Party
Acquisition fees (as a percentage)	2.50%
Deferred
Due to Related Party
Acquisition fees (as a percentage)	2.00%
Interest rate on deferred acquisition fee	2.00%
Accounts payable, accrued expenses and other liabilities
Due to Related Party
Estimated future payments	$ 4,800,000		$ 5,700,000
Class A common stock
Related Party Transaction
Net asset value (usd per share)		$ 8.57
Number of shares held by advisor (shares)	112,849,543		111,193,651
Class C
Related Party Transaction
Number of shares held by advisor (shares)	31,410,984		31,189,137
Due to Related Party
Shareholder servicing fee (as a percentage)	1.00%
Real estate commission
Due to Related Party
Subordinated disposition fees (as a percentage)	50.00%
Contract sales price of investment
Due to Related Party
Subordinated disposition fees (as a percentage)	3.00%
Average invested asset
Due to Related Party
Percentage of operating expense reimbursement	2.00%
Adjusted net income
Due to Related Party
Percentage of operating expense reimbursement	25.00%
Minimum
Due to Related Party
Equity method investments ownership percentage	50.00%
Minimum | Average market value of investment
Related Party Transaction
Asset management fees (as a percentage)	0.50%
Maximum
Due to Related Party
Acquisition fees (as a percentage)	6.00%
Equity method investments ownership percentage	99.00%
Maximum | Average equity value of investment
Related Party Transaction
Asset management fees (as a percentage)	1.50%
W.P. Carey
Related Party Transaction
Loan from related party	$ 0		$ 0
Advisor | Class A common stock
Related Party Transaction
Number of shares held by advisor (shares)	4,327,814
Advisor owned percentage of common stock	3.00%

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Agreements and Transactions with Related Parties - Related Party Income (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Amounts Included in the Condensed Consolidated Statements of Operations
Operating expenses	$ 37,119	$ 39,130	$ 74,389	$ 76,105
Available Cash Distributions	2,830	2,186	4,735	3,861
Personnel and overhead reimbursements	716	787	1,433	1,569
Director compensation	40	53	80	105
Interest expense on deferred acquisition fees, affiliate loan, and accretion of interest on annual distribution and shareholder servicing fee (a)	20	319	(42)	620
Operating expenses	6,757	6,112	12,231	11,631
Advisor Fees Capitalized
Current acquisition fees	2,379	0	3,100	1,393
Deferred acquisition fees	1,903	0	2,480	1,114
Capitalized personnel and overhead reimbursements	259	2	371	184
Transaction fees incurred	4,541	2	5,951	2,691
Asset management fees
Amounts Included in the Condensed Consolidated Statements of Operations
Operating expenses	$ 3,151	$ 2,767	$ 6,025	$ 5,476

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Agreements and Transactions with Related Parties - Due to Affiliates (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Due to Affiliates
Deferred acquisition fees, including accrued interest	$ 5,786	$ 6,693
Accounts payable and other	3,316	6,102
Current acquisition fees	1,652	0
Asset management fees payable	1,026	972
Due to affiliate	$ 11,780	$ 13,767

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Real Estate, Operating Real Estate, Real Estate Under Construction, and Equity Investment in Real Estate - Narratives (Details) $ in Thousands						1 Months Ended		3 Months Ended		6 Months Ended
	Jun. 25, 2018 USD ($)	Jun. 14, 2018 USD ($)	Jun. 11, 2018 USD ($)	Mar. 08, 2018 USD ($)	Feb. 19, 2016 USD ($)	Sep. 30, 2020 USD ($)	Sep. 30, 2019 USD ($)	Jun. 30, 2018 USD ($) property $ / €	Jun. 30, 2017 USD ($)	Jun. 30, 2018 USD ($) property $ / €	Jun. 30, 2017 USD ($)	Dec. 31, 2017 USD ($) $ / €
Real Estate Properties
Effect of exchange rate fluctuation								$ (22,582)	$ 19,541	$ (11,005)	$ 23,697
Acquisition
Capitalized funds										87,646
Non-recourse mortgages, net								1,223,215		1,223,215		$ 1,129,432
Construction loan								$ 39,700		39,700
Capitalized interest										2,508
Placed into service										$ 25,900
Number of properties | property								59		59
Equity investment in real estate								$ 19,594		$ 19,594		20,919
Noncash investing
Acquisition
Accrued liabilities								2,500		2,500
Initial Funding
Acquisition
Capitalized funds										47,900
Real Estate
Real Estate Properties
Effect of exchange rate fluctuation										(17,500)
Acquisition
Depreciation expense								7,900	6,700	15,800	13,000
Real Estate | Student Housing in Barcelona, Spain
Acquisition
Investment purchase price				$ 10,500
Ownership Interest In joint venture (percentage)				99.00%
Real Estate | Student Housing in Barcelona, Spain | Forecasted
Acquisition
Investment purchase price							$ 28,500
Real Estate | Student Housing in Coimbra, Portugal
Acquisition
Investment purchase price			$ 9,300
Ownership Interest In joint venture (percentage)			99.00%
Real Estate | Student Housing in Coimbra, Portugal | Forecasted
Acquisition
Investment purchase price							$ 26,300
Real Estate | Student Housing in San Sebastian, Spain
Acquisition
Investment purchase price		$ 13,100
Real Estate | Student Housing in San Sebastian, Spain | Forecasted
Acquisition
Investment purchase price						$ 36,700
Real Estate | Student Housing in Barcelona Spain
Acquisition
Investment purchase price	$ 13,100
Real Estate | Student Housing in Barcelona Spain | Forecasted
Acquisition
Investment purchase price						$ 31,700
Operating Real Estate
Acquisition
Depreciation expense								4,300	$ 4,500	$ 8,700	$ 8,900
Build To Suit Projects
Acquisition
Number of BTS projects | property										8
Unfunded commitment								181,700		$ 181,700
Build To Suit Projects | Equity method investments
Acquisition
Unfunded commitment								20,200		20,200
Build To Suit Projects | University in Accra, Ghana
Acquisition
Capitalized funds										32,500
Accrued liabilities								900		900
Deferred tax liability								3,700		3,700
Non-recourse mortgages, net					$ 41,000
Build To Suit Projects | University in Accra, Ghana | US Treasury
Acquisition
Variable interest rate on debt					3.00%
Equity method investments
Acquisition
Equity investment in real estate								19,600		19,600		20,900
Equity method investment, liabilities								$ 23,300		$ 23,300		$ 21,500
Equity method investments | Self Storage
Acquisition
Number of properties | property								4		4
Equity method investments ownership percentage								90.00%		90.00%
Equity method investment counterparty ownership percentage								10.00%		10.00%
Euro
Real Estate Properties
Decrease in foreign currency exchange rate								2.80%		2.80%
Foreign currency exchange rate | $ / €								1.1658		1.1658		1.1993

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Real Estate, Operating Real Estate, Real Estate Under Construction, and Equity Investment in Real Estate - Property Plant and Equipment (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Investments in real estate:
Net investments in real estate	$ 2,103,730	$ 2,062,451
Real Estate
Investments in real estate:
Land	204,198	202,500
Buildings and improvements	1,070,825	1,060,672
Less: Accumulated depreciation	(101,331)	(87,886)
Net investments in real estate	1,173,692	1,175,286
Operating Real Estate
Investments in real estate:
Land	98,432	98,429
Buildings and improvements	470,169	468,060
Less: Accumulated depreciation	(52,409)	(43,786)
Net investments in real estate	$ 516,192	$ 522,703

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Real Estate, Operating Real Estate, Real Estate Under Construction, and Equity Investment in Real Estate - Rollforward of Real Estate Under Construction (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2018 USD ($)
Real Estate Under Construction
Beginning balance	$ 134,366
Capitalized funds	87,646
Placed into service	(25,900)
Foreign currency translation adjustments	(3,498)
Capitalized interest	2,508
Ending balance	$ 195,122

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Finance Receivables - Narratives (Details) $ in Thousands	6 Months Ended		12 Months Ended
	Jun. 30, 2018 USD ($) property	Jun. 30, 2017 USD ($)	Dec. 31, 2017 USD ($) property
Accounts, Notes, Loans and Financing Receivable
Notes receivable	$ 63,954		$ 66,500
Number of properties | property	59
Proceeds from repayment of notes receivable	$ 2,546	$ 0
Property Leased to Mills Fleet Farm Group LLC
Accounts, Notes, Loans and Financing Receivable
Notes receivable	36,000		$ 38,500
Number of properties | property			27
Proceeds from repayment of notes receivable	$ 2,500
Cipriani
Accounts, Notes, Loans and Financing Receivable
Notes receivable			$ 28,000
Accounts receivable, term			10 years

XML

Finance Receivables - Internal Credit Quality Rating (Details) $ in Thousands	Jun. 30, 2018 USD ($) tenant	Dec. 31, 2017 USD ($) tenant
Credit Quality Of Finance Receivables
Carrying Value	$ 105,602	$ 106,457
Internally Assigned Grade 1
Credit Quality Of Finance Receivables
Number of tenants and obligors | tenant	0	0
Carrying Value	$ 0	$ 0
Internally Assigned Grade 2
Credit Quality Of Finance Receivables
Number of tenants and obligors | tenant	2	2
Carrying Value	$ 15,738	$ 14,386
Internally Assigned Grade 3
Credit Quality Of Finance Receivables
Number of tenants and obligors | tenant	2	2
Carrying Value	$ 29,734	$ 29,716
Internally Assigned Grade 4
Credit Quality Of Finance Receivables
Number of tenants and obligors | tenant	2	2
Carrying Value	$ 60,130	$ 62,355
Internally Assigned Grade 5
Credit Quality Of Finance Receivables
Number of tenants and obligors | tenant	0	0
Carrying Value	$ 0	$ 0

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Intangible Assets and Liabilities - Narratives (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Intangible Assets And Liabilities [Abstract]
Net amortization of intangibles	$ 4.6	$ 7.5	$ 9.9	$ 15.6

XML

Intangible Assets and Liabilities - Goodwill Rollforward (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2018 USD ($)
Goodwill
Goodwill - beginning balance	$ 26,084
Other	1,629
Foreign currency translation	(151)
Goodwill - ending balance	$ 27,562

XML

Intangible Assets and Liabilities - Intangible Assets and Liabilities Summary (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2018	Dec. 31, 2017
Amortizable Intangible Assets
Finite-lived intangible assets, gross	$ 305,924	$ 310,534
Less: accumulated amortization	(128,848)	(120,395)
Finite-lived intangible assets, net	177,076	190,139
Goodwill	27,562	26,084
Total intangible assets, gross	333,486	336,618
Total intangible assets, net	204,638	216,223
Amortizable Intangible Liability
Finite-Lived Intangible Liabilities, Gross	(15,531)	(15,586)
Finite Lived Intangible Liabilities Accumulated Amortization	5,138	4,577
Finite Lived Intangible Liabilities Net	(10,393)	(11,009)
Below-market rent
Amortizable Intangible Liability
Finite-Lived Intangible Liabilities, Gross	(15,423)	(15,476)
Finite Lived Intangible Liabilities Accumulated Amortization	5,133	4,573
Finite Lived Intangible Liabilities Net	$ (10,290)	(10,903)
Below-market rent | Minimum
Finite Lived Intangible Assets Liabilities [Line Items]
Finite-lived intangible asset, useful life	5 years
Below-market rent | Maximum
Finite Lived Intangible Assets Liabilities [Line Items]
Finite-lived intangible asset, useful life	30 years
Above-market ground lease
Finite Lived Intangible Assets Liabilities [Line Items]
Finite-lived intangible asset, useful life	81 years
Amortizable Intangible Liability
Finite-Lived Intangible Liabilities, Gross	$ (108)	(110)
Finite Lived Intangible Liabilities Accumulated Amortization	5	4
Finite Lived Intangible Liabilities Net	(103)	(106)
In-place lease
Amortizable Intangible Assets
Finite-lived intangible assets, gross	270,957	274,723
Less: accumulated amortization	(123,210)	(115,515)
Finite-lived intangible assets, net	$ 147,747	159,208
In-place lease | Minimum
Finite Lived Intangible Assets Liabilities [Line Items]
Finite-lived intangible asset, useful life	4 years
In-place lease | Maximum
Finite Lived Intangible Assets Liabilities [Line Items]
Finite-lived intangible asset, useful life	23 years
Below-market ground lease
Amortizable Intangible Assets
Finite-lived intangible assets, gross	$ 22,362	23,000
Less: accumulated amortization	(1,538)	(1,238)
Finite-lived intangible assets, net	$ 20,824	21,762
Below-market ground lease | Minimum
Finite Lived Intangible Assets Liabilities [Line Items]
Finite-lived intangible asset, useful life	30 years
Below-market ground lease | Maximum
Finite Lived Intangible Assets Liabilities [Line Items]
Finite-lived intangible asset, useful life	99 years
Above-market rent
Amortizable Intangible Assets
Finite-lived intangible assets, gross	$ 12,605	12,811
Less: accumulated amortization	(4,100)	(3,642)
Finite-lived intangible assets, net	$ 8,505	$ 9,169
Above-market rent | Minimum
Finite Lived Intangible Assets Liabilities [Line Items]
Finite-lived intangible asset, useful life	4 years
Above-market rent | Maximum
Finite Lived Intangible Assets Liabilities [Line Items]
Finite-lived intangible asset, useful life	30 years

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Fair Value Measurements - Narratives (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018 USD ($)	Jun. 30, 2017 USD ($)	Jun. 30, 2018 USD ($)	Jun. 30, 2017 USD ($)	Dec. 31, 2017 USD ($)
Fair Value
Rent guarantees, fair value	$ 700		$ 700		$ 700
Asset fair value adjustment	500	$ 400	600	$ 500
Deferred financing costs	8,250		8,250
Proceeds from repayment of notes receivable			2,546	$ 0
Notes receivable	63,954		63,954		66,500
Cipriani
Fair Value
Notes receivable					28,000
Property Leased to Mills Fleet Farm Group LLC
Fair Value
Proceeds from repayment of notes receivable			2,500
Notes receivable	36,000		36,000		38,500
Non recourse debt
Fair Value
Deferred financing costs	7,500		7,500		7,000
Bonds payable
Fair Value
Deferred financing costs	$ 800		$ 800		$ 800
Discount rate | Minimum
Fair Value
Discount rate on rent guarantee	0.07		0.07
Discount rate | Maximum
Fair Value
Discount rate on rent guarantee	0.09		0.09
Growth rate | Minimum
Fair Value
Discount rate on rent guarantee	0.01		0.01
Growth rate | Maximum
Fair Value
Discount rate on rent guarantee	0.02		0.02

XML

Fair Value Measurements - Carrying Value and Fair Value Measurements (Details) - Level 3 - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Carrying Value
Liabilities
Debt, net	$ 1,370,526	$ 1,275,448
Notes receivable	63,954	66,500
Fair Value
Liabilities
Debt, net	1,387,730	1,301,844
Notes receivable	$ 66,454	$ 69,000

XML

Risk Management and Use of Derivative Financial Instruments - Narratives (Details) - USD ($)	6 Months Ended
	Jun. 30, 2018	Dec. 31, 2017
Derivative
Cash collateral posted	$ 0	$ 0
Derivative instrument remaining maturity period	74 months
Collateral received	$ 0
Total credit exposure	3,100,000
Derivative in net liability position	2,200,000	4,400,000
Termination value of assets	2,300,000	$ 4,500,000
Individual Counterparty
Derivative
Total credit exposure	1,800,000
Interest expense
Derivative
Estimated amount of derivative income loss to be reclassified to interest expense in the next 12 months	100,000
Other income
Derivative
Estimated amount of derivative income loss to be reclassified to interest expense in the next 12 months	$ 600,000

XML

Risk Management and Use of Derivative Financial Instruments - Information Regarding Derivative Instruments (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Derivatives, Fair Value
Derivative asset fair value	$ 3,892	$ 3,231
Derivative liability, fair value	(2,164)	(4,330)
Designated as Hedging Instrument | Accounts receivable and other assets, net | Foreign currency forward contracts
Derivatives, Fair Value
Derivative asset fair value	2,217	2,419
Designated as Hedging Instrument | Accounts receivable and other assets, net | Interest rate swaps
Derivatives, Fair Value
Derivative asset fair value	1,509	553
Designated as Hedging Instrument | Accounts receivable and other assets, net | Foreign currency collars
Derivatives, Fair Value
Derivative asset fair value	165	258
Designated as Hedging Instrument | Accounts receivable and other assets, net | Interest rate caps
Derivatives, Fair Value
Derivative asset fair value	1	1
Designated as Hedging Instrument | Accounts payable, accrued expenses and other liabilities | Interest rate swaps
Derivatives, Fair Value
Derivative liability, fair value	(176)	(698)
Designated as Hedging Instrument | Accounts payable, accrued expenses and other liabilities | Foreign currency collars
Derivatives, Fair Value
Derivative liability, fair value	(1,988)	(3,266)
Derivatives Not Designated as Hedging Instruments | Accounts payable, accrued expenses and other liabilities | Foreign currency forward contracts
Derivatives, Fair Value
Derivative liability, fair value	$ 0	$ (366)

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Risk Management and Use of Derivative Financial Instruments - Derivative Gain Loss Recognized in OCI (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain (Loss) Recognized on Derivatives in Other Comprehensive (Loss) Income (Effective Portion)	$ 3,521	$ (3,935)	$ 2,713	$ (4,421)
Derivatives in Cash Flow Hedging Relationships | Foreign currency collars
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain (Loss) Recognized on Derivatives in Other Comprehensive (Loss) Income (Effective Portion)	2,626	(2,379)	1,421	(2,613)
Derivatives in Cash Flow Hedging Relationships | Foreign currency forward contracts
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain (Loss) Recognized on Derivatives in Other Comprehensive (Loss) Income (Effective Portion)	427	(1,162)	(202)	(1,634)
Derivatives in Cash Flow Hedging Relationships | Interest rate swaps
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain (Loss) Recognized on Derivatives in Other Comprehensive (Loss) Income (Effective Portion)	363	(277)	1,520	(32)
Derivatives in Cash Flow Hedging Relationships | Interest rate caps
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain (Loss) Recognized on Derivatives in Other Comprehensive (Loss) Income (Effective Portion)	2	(6)	20	(2)
Net Investment Hedging | Foreign currency collars
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain (Loss) Recognized on Derivatives in Other Comprehensive (Loss) Income (Effective Portion)	80	(23)	(46)	(33)
Net Investment Hedging | Foreign currency forward contracts
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain (Loss) Recognized on Derivatives in Other Comprehensive (Loss) Income (Effective Portion)	$ 23	$ (88)	$ 0	$ (107)

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Risk Management and Use of Derivative Financial Instruments - Derivative Gain (Loss) Reclassified From OCI (Details) - Derivatives in Cash Flow Hedging Relationships - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Amount of Gain (Loss) on Derivatives Reclassified from Other Comprehensive (Loss) Income into Income (Effective Portion)
Amount of Gain (Loss) on Derivatives Reclassified from Other Comprehensive (Loss) Income into Income (Effective Portion)	$ 127	$ 225	$ 81	$ 457
Foreign currency forward contracts | Other gains and (losses)
Amount of Gain (Loss) on Derivatives Reclassified from Other Comprehensive (Loss) Income into Income (Effective Portion)
Amount of Gain (Loss) on Derivatives Reclassified from Other Comprehensive (Loss) Income into Income (Effective Portion)	237	334	459	690
Foreign currency collars | Other gains and (losses)
Amount of Gain (Loss) on Derivatives Reclassified from Other Comprehensive (Loss) Income into Income (Effective Portion)
Amount of Gain (Loss) on Derivatives Reclassified from Other Comprehensive (Loss) Income into Income (Effective Portion)	(26)	77	(180)	169
Interest rate swaps | Interest expense
Amount of Gain (Loss) on Derivatives Reclassified from Other Comprehensive (Loss) Income into Income (Effective Portion)
Amount of Gain (Loss) on Derivatives Reclassified from Other Comprehensive (Loss) Income into Income (Effective Portion)	(76)	(176)	(159)	(387)
Interest rate caps | Interest expense
Amount of Gain (Loss) on Derivatives Reclassified from Other Comprehensive (Loss) Income into Income (Effective Portion)
Amount of Gain (Loss) on Derivatives Reclassified from Other Comprehensive (Loss) Income into Income (Effective Portion)	$ (8)	$ (10)	$ (39)	$ (15)

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Risk Management and Use of Derivative Financial Instruments - Derivative Gain (Loss) Recognized in Income (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Amount of Gain (Loss) on Derivatives Recognized in Income
Amount of Gain (Loss) on Derivatives Recognized in Income	$ 9	$ 4	$ (152)	$ (61)
Derivatives Not Designated as Hedging Instruments | Foreign currency collars | Other gains and (losses)
Amount of Gain (Loss) on Derivatives Recognized in Income
Amount of Gain (Loss) on Derivatives Recognized in Income	56	(25)	(95)	(45)
Derivatives Not Designated as Hedging Instruments | Interest rate swaps | Interest expense
Amount of Gain (Loss) on Derivatives Recognized in Income
Amount of Gain (Loss) on Derivatives Recognized in Income	(41)	27	(47)	(22)
Designated as Hedging Instrument | Foreign currency collars | Other gains and (losses)
Amount of Gain (Loss) on Derivatives Recognized in Income
Amount of Gain (Loss) on Derivatives Recognized in Income	(5)	(5)	(15)	(4)
Designated as Hedging Instrument | Interest rate swaps | Interest expense
Amount of Gain (Loss) on Derivatives Recognized in Income
Amount of Gain (Loss) on Derivatives Recognized in Income	$ (1)	$ 7	$ 5	$ 10

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Risk Management and Use of Derivative Financial Instruments - Interest Rate Swap and Caps Summary (Details) € in Thousands, $ in Thousands	Jun. 30, 2018 USD ($) instrument	Jun. 30, 2018 EUR (€) instrument
Derivative
Fair value	$ 1,334
Interest rate swaps | USD
Derivative
Number of Instruments | instrument	9	9
Notional Amount	$ 94,283
Fair value	$ 1,374
Interest rate swaps | Euro
Derivative
Number of Instruments | instrument	1	1
Notional Amount | €		€ 10,025
Fair value	$ (41)
Interest rate caps | USD
Derivative
Number of Instruments | instrument	2	2
Notional Amount	$ 11,300
Fair value	$ 1

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Risk Management and Use of Derivative Financial Instruments - Foreign Currency Derivatives Details (Details) - Designated as Hedging Instrument € in Thousands, kr in Thousands, $ in Thousands	Jun. 30, 2018 USD ($) instrument	Jun. 30, 2018 NOK (kr) instrument	Jun. 30, 2018 EUR (€) instrument
Foreign currency forward contracts and collars
Derivative
Fair value	$ 394
Derivatives in Cash Flow Hedging Relationships | Foreign currency collars | Euro
Derivative
Number of Instruments | instrument	48	48	48
Notional Amount | €			€ 31,964
Fair value	$ (1,789)
Derivatives in Cash Flow Hedging Relationships | Foreign currency forward contracts and collars | Euro
Derivative
Number of Instruments | instrument	19	19	19
Notional Amount | €			€ 7,375
Fair value	$ 1,598
Derivatives in Cash Flow Hedging Relationships | Foreign currency forward contracts and collars | NOK
Derivative
Number of Instruments | instrument	13	13	13
Notional Amount | kr		kr 20,293
Fair value	$ 559
Derivatives in Cash Flow Hedging Relationships | Foreign currency collars | NOK
Derivative
Number of Instruments | instrument	24	24	24
Notional Amount | kr		kr 49,470
Fair value	$ (79)
Net Investment Hedging | Foreign currency collars | NOK
Derivative
Number of Instruments | instrument	3	3	3
Notional Amount | kr		kr 16,750
Fair value	$ 45
Net Investment Hedging | Foreign currency forward contracts and collars | NOK
Derivative
Number of Instruments | instrument	2	2	2
Notional Amount | kr		kr 4,504
Fair value	$ 60

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Debt, net - Narratives (Details)				3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 14, 2018 USD ($)	May 09, 2018 USD ($) property extension	Feb. 13, 2018 USD ($)	Jun. 30, 2018 USD ($) property	Jun. 30, 2017 USD ($)	Jun. 30, 2018 USD ($) property	Jun. 30, 2017 USD ($)	Dec. 31, 2017 USD ($)	Jul. 31, 2016 USD ($)
Debt Instruments
Debt instrument range, beginning						Dec. 31, 2018
Debt instrument range, ending						Dec. 31, 2039
Proceeds from mortgage financing						$ 128,010,000	$ 32,613,000
Number of properties | property				59		59
Secured debt				$ 1,223,215,000		$ 1,223,215,000		$ 1,129,432,000
Debt instrument face amount									$ 50,000,000.0
Construction loan				39,700,000		39,700,000
Effect of exchange rate fluctuation				(22,582,000)	$ 19,541,000	(11,005,000)	23,697,000
Repayments of debt						22,654,000	$ 6,323,000
Amounts placed into pledged restricted cash account to cure breach of loan to value covenant	$ 5,600,000
Restricted cash				23,706,000		23,706,000		19,115,000
Long-term debt
Debt Instruments
Effect of exchange rate fluctuation						(13,700,000)
Accounts receivable and other assets, net
Debt Instruments
Restricted cash				$ 5,500,000		5,500,000
Agrokor
Debt Instruments
Repayments of debt						100,000		$ 1,800,000
Self Storage facility in Southern California
Debt Instruments
Proceeds from mortgage financing		$ 34,000,000
Number of properties | property		7
Secured debt		$ 16,400,000
Stated interest rate		4.50%
Debt instrument term		3 years
Number of extension options | extension		2
Student Housing in Portsmouth, United Kingdom
Debt Instruments
Debt instrument term			1 year 9 months
Debt instrument face amount			$ 48,800,000
Variable interest rate on debt			6.00%
Construction loan			$ 29,100,000
Student Housing in Cardiff, United Kingdom
Debt Instruments
Proceeds from mortgage financing						$ 14,100,000
Stated interest rate				7.50%		7.50%
Debt instrument term						2 years
Hotel in Munich, Germany
Debt Instruments
Proceeds from mortgage financing						$ 52,400,000
Stated interest rate				2.80%		2.80%
Debt instrument term						5 years 4 months 20 days
Fixed Interest Rate | Minimum
Debt Instruments
Mortgage loan on real estate, interest rate						1.60%
Fixed Interest Rate | Maximum
Debt Instruments
Mortgage loan on real estate, interest rate						5.80%
Variable Interest Rate | Minimum
Debt Instruments
Mortgage loan on real estate, interest rate						1.60%
Variable Interest Rate | Maximum
Debt Instruments
Mortgage loan on real estate, interest rate						8.00%

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Debt - Schedule of Debt Principal Payments (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Long-term Debt, Fiscal Year Maturity
2018 (remainder)	$ 9,084
2019	58,138
2020	124,786
2021	206,022
2022	195,229
Thereafter through 2039	785,278
Long term debt gross	1,378,537
Unamortized deferred financing costs	(8,250)
Unamortized discount, net	239
Debt, net	$ 1,370,526	$ 1,275,448

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Net (Loss) Income Per Share and Equity - Narratives (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Distributions Declared
Interest expense	$ 13,294	$ 11,791	$ 26,224	$ 23,244
Dividends payment			Jul. 16, 2018
Distributions payable	21,967		$ 21,967		$ 21,686
Class A
Distributions Declared
Interest expense	$ 100	$ 100	$ 100	$ 200
Distributions declared per share (in dollars per share)	$ 0.1563	$ 0.1563	$ 0.3126	$ 0.3126
Class C
Distributions Declared
Distributions declared per share (in dollars per share)	$ 0.1378	$ 0.1382	$ 0.2753	$ 0.2762

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Net (Loss) Income Per Share and Equity - Basic and Diluted Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Basic and Diluted
Allocation of Net Loss	$ (334)	$ 5,784	$ 9,993	$ 6,405
Class A common stock
Basic and Diluted
Weighted-Average Shares Outstanding (shares)	113,010,970	109,533,769	112,564,943	108,998,427
Allocation of Net Loss	$ (213)	$ 4,600	$ 7,901	$ 5,179
Basic and diluted income per share (in dollars per share)	$ 0.00	$ 0.04	$ 0.07	$ 0.05
Class C common stock
Basic and Diluted
Weighted-Average Shares Outstanding (shares)	31,593,597	31,030,596	31,517,919	30,898,107
Allocation of Net Loss	$ (121)	$ 1,184	$ 2,092	$ 1,226
Basic and diluted income per share (in dollars per share)	$ 0.00	$ 0.04	$ 0.07	$ 0.04

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Net (Loss) Income Per Share and Equity - Reclassifications Out of Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Reconciliation Of Accumulated Comprehensive Income
Beginning equity balance, value			$ 872,065	$ 865,904
Amounts reclassified from accumulated other comprehensive income (loss) to:
Interest expense	$ 13,294	$ 11,791	26,224	23,244
Other Comprehensive (Loss) Income	(19,164)	15,717	(8,246)	19,416
Ending equity balance, value	844,862	868,596	844,862	868,596
Accumulated Other Comprehensive Loss
Reconciliation Of Accumulated Comprehensive Income
Beginning equity balance, value	(23,911)	(58,535)	(33,212)	(61,704)
Amounts reclassified from accumulated other comprehensive income (loss) to:
Ending equity balance, value	(40,749)	(45,083)	(40,749)	(45,083)
Gains and Losses on Derivative Instruments
Reconciliation Of Accumulated Comprehensive Income
Beginning equity balance, value	(1,741)	5,130	(1,082)	5,587
Amounts reclassified from accumulated other comprehensive income (loss) to:
Ending equity balance, value	1,677	1,306	1,677	1,306
Foreign Currency Translation Adjustments
Reconciliation Of Accumulated Comprehensive Income
Beginning equity balance, value	(22,170)	(63,665)	(32,130)	(67,291)
Amounts reclassified from accumulated other comprehensive income (loss) to:
Ending equity balance, value	(42,426)	(46,389)	(42,426)	(46,389)
AOCI Including Portion Attributable to Noncontrolling Interest
Reconciliation Of Accumulated Comprehensive Income
Other comprehensive income (loss) before reclassifications	(19,037)	15,942	(8,165)	19,873
Amounts reclassified from accumulated other comprehensive income (loss) to:
Other Comprehensive (Loss) Income	(19,164)	15,717	(8,246)	19,416
AOCI Including Portion Attributable to Noncontrolling Interest | Reclassification out of Accumulated Other Comprehensive Income
Amounts reclassified from accumulated other comprehensive income (loss) to:
Other gains and (losses)	(211)	(411)	(279)	(859)
Interest expense	84	186	198	402
Gains and (Losses) on Derivative Instruments
Reconciliation Of Accumulated Comprehensive Income
Other comprehensive income (loss) before reclassifications	3,545	(3,599)	2,840	(3,824)
Amounts reclassified from accumulated other comprehensive income (loss) to:
Other Comprehensive (Loss) Income	3,418	(3,824)	2,759	(4,281)
Gains and (Losses) on Derivative Instruments | Reclassification out of Accumulated Other Comprehensive Income
Amounts reclassified from accumulated other comprehensive income (loss) to:
Other gains and (losses)	(211)	(411)	(279)	(859)
Interest expense	84	186	198	402
Foreign Currency Translation Adjustments
Reconciliation Of Accumulated Comprehensive Income
Other comprehensive income (loss) before reclassifications	(22,582)	19,541	(11,005)	23,697
Amounts reclassified from accumulated other comprehensive income (loss) to:
Other Comprehensive (Loss) Income	(22,582)	19,541	(11,005)	23,697
Foreign Currency Translation Adjustments | Reclassification out of Accumulated Other Comprehensive Income
Amounts reclassified from accumulated other comprehensive income (loss) to:
Other gains and (losses)	0	0	0	0
Interest expense	0	0	0	0
Noncontrolling Interest
Amounts reclassified from accumulated other comprehensive income (loss) to:
Net current-period other comprehensive loss (income) attributable to noncontrolling interests	2,326	(2,265)	709	(2,795)
Gains and (Losses) on Derivative Instruments
Amounts reclassified from accumulated other comprehensive income (loss) to:
Net current-period other comprehensive loss (income) attributable to noncontrolling interests	0	0	0	0
Foreign Currency Translation Adjustments
Amounts reclassified from accumulated other comprehensive income (loss) to:
Net current-period other comprehensive loss (income) attributable to noncontrolling interests	$ 2,326	$ (2,265)	$ 709	$ (2,795)

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Segment Reporting - Narratives (Details) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2018 USD ($) property	Jun. 30, 2017 USD ($)	Jun. 30, 2018 USD ($) segment property	Jun. 30, 2017 USD ($)
Segment Reporting Information
Number of properties | property	59		59
Number of reportable segments | segment			3
Multi-family | Multi-family
Segment Reporting Information
Number of properties | property	6		6
Multi-family | Student housing developments
Segment Reporting Information
Number of properties | property	8		8
Net Lease | Operating Segments
Segment Reporting Information
Straight line rent adjustment | $	$ 1.2	$ 1.1	$ 2.5	$ 2.1
Net Lease | Operating Segments | Agrokor
Segment Reporting Information
Bad debt expense | $			$ 2.1	1.0
Net Lease | Operating Segments | Property in Stavanger, Norway
Segment Reporting Information
Bad debt expense | $		$ 0.6		$ 1.1

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Segment Reporting - Income Statement (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Segment Reporting Information, Profit (Loss)
Revenues	$ 55,403	$ 50,973	$ 109,838	$ 99,453
Operating expenses	(37,119)	(39,130)	(74,389)	(76,105)
Interest expense	(13,294)	(11,791)	(26,224)	(23,244)
Other income and (expenses), excluding interest expense	(2,307)	9,205	5,361	11,768
Benefit from (provision for) income taxes	298	(1,123)	713	(1,193)
Net income attributable to noncontrolling interests	(3,315)	(2,350)	(5,306)	(4,274)
Net (Loss) Income Attributable to CPA:18 – Global	(334)	5,784	9,993	6,405
Operating Segments | Net Lease
Segment Reporting Information, Profit (Loss)
Revenues	33,299	28,882	66,291	56,252
Operating expenses	(19,307)	(18,319)	(38,426)	(34,355)
Interest expense	(9,002)	(6,999)	(17,860)	(13,994)
Other income and (expenses), excluding interest expense	1,555	540	5,906	745
Benefit from (provision for) income taxes	88	(705)	233	(639)
Net income attributable to noncontrolling interests	(485)	(198)	(579)	(436)
Net (Loss) Income Attributable to CPA:18 – Global	6,148	3,201	15,565	7,573
Operating Segments | Self Storage
Segment Reporting Information, Profit (Loss)
Revenues	14,398	13,856	28,371	27,049
Operating expenses	(8,762)	(11,663)	(18,111)	(23,752)
Interest expense	(3,288)	(3,039)	(6,382)	(6,044)
Other income and (expenses), excluding interest expense	(266)	(308)	(745)	(406)
Benefit from (provision for) income taxes	(28)	(48)	(55)	(125)
Net (Loss) Income Attributable to CPA:18 – Global	2,054	(1,202)	3,078	(3,278)
Operating Segments | Multi-family
Segment Reporting Information, Profit (Loss)
Revenues	5,911	6,452	11,601	12,620
Operating expenses	(4,194)	(4,554)	(8,356)	(8,880)
Interest expense	(923)	(1,434)	(1,828)	(2,586)
Other income and (expenses), excluding interest expense	151	3	152	4
Benefit from (provision for) income taxes	47	(200)	60	(227)
Net income attributable to noncontrolling interests	0	34	8	23
Net (Loss) Income Attributable to CPA:18 – Global	992	301	1,637	954
All Other
Segment Reporting Information, Profit (Loss)
Revenues	1,795	1,783	3,575	3,532
Operating expenses	(1)	(2)	(2)	(10)
Net (Loss) Income Attributable to CPA:18 – Global	1,794	1,781	3,573	3,522
Corporate
Segment Reporting Information, Profit (Loss)
Net income attributable to noncontrolling interests	(2,830)	(2,186)	(4,735)	(3,861)
Unallocated Corporate Overhead	$ (8,492)	$ 3,889	$ (9,125)	$ 1,495

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Segment Reporting - Segment Assets (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Segment Reporting Information, Additional Information
Assets	$ 2,398,943	$ 2,330,997
Net Lease
Segment Reporting Information, Additional Information
Assets	1,546,102	1,572,437
Self Storage
Segment Reporting Information, Additional Information
Assets	394,704	398,944
Multi-family
Segment Reporting Information, Additional Information
Assets	349,605	256,875
Corporate
Segment Reporting Information, Additional Information
Assets	44,161	35,812
All Other
Segment Reporting Information, Additional Information
Assets	$ 64,371	$ 66,929