Exhibit 99.5

Item 8. Financial Statements and Supplementary Data.

The following financial statements and schedules are filed as a part of this Report:

Report of Independent Registered Public Accounting Firm			2
Consolidated Balance Sheets			3
Consolidated Statements of Operations			4
Consolidated Statements of Comprehensive (Loss) Income			5
Consolidated Statements of Equity			6
Consolidated Statements of Cash Flows			7
Notes to Consolidated Financial Statements			9
Schedule III — Real Estate and Accumulated Depreciation			41
Notes to Schedule III			44
Schedule IV — Mortgage Loans on Real Estate			45
Notes to Schedule IV			45

Financial statement schedules other than those listed above are omitted because the required information is given in the financial statements, including the notes thereto, or because the conditions requiring their filing do not exist.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of Corporate Property Associates 16 — Global Incorporated:

In our opinion, the consolidated financial statements listed in the accompanying index present fairly, in all material respects, the financial position of Corporate Property Associates 16 - Global Incorporated and its subsidiaries (the “Company”) at December 31, 2009 and 2008, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2009 in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedules listed in the accompanying index present fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. These financial statements and financial statement schedules are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and financial statement schedules based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

/s/ PricewaterhouseCoopers LLP
New York, New York

March 26, 2010, except with respect to our opinion insofar as it relates to the effects of the discontinued operations as discussed in Notes 2, 10, 11, 17, 18, and 20, as to which the date is January 4, 2011.

CORPORATE PROPERTY ASSOCIATES 16 — GLOBAL INCORPORATED
CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)

		December 31,
		2009				2008
Assets
Investments in real estate:
Real estate, at cost		$	1,696,872			$	1,661,160
Operating real estate, at cost			83,718				82,776
Accumulated depreciation			(118,833	)			(80,249	)
Net investments in properties			1,661,757				1,663,687
Real estate under construction			61,588				483
Net investment in direct financing leases			342,055				341,335
Equity investments in real estate			158,149				185,120
Net investments in real estate			2,223,549				2,190,625
Notes receivable			362,707				351,200
Cash and cash equivalents			83,985				174,209
Intangible assets, net			162,432				168,088
Funds in escrow			21,586				52,163
Other assets, net			34,746				30,918
Total assets		$	2,889,005			$	2,967,203
Liabilities and Equity
Liabilities:
Non-recourse debt		$	1,445,889			$	1,438,226
Accounts payable, accrued expenses and other liabilities			36,290				52,836
Prepaid and deferred rental income and security deposits			58,063				56,053
Due to affiliates			14,193				21,502
Distributions payable			20,346				20,140
Total liabilities			1,574,781				1,588,757
Redeemable noncontrolling interests			337,397				331,841
Commitments and contingencies (Note 13)
Equity:
CPA®:16 — Global shareholders’ equity:
Common stock, $.001 par value; 250,000,000 shares authorized; 129,995,172 and 125,352,123 shares issued, respectively			130				125
Additional paid-in capital			1,174,230				1,130,135
Distributions in excess of accumulated earnings			(225,462	)			(141,938	)
Accumulated other comprehensive income			5,397				2,140
			954,295				990,462
Less, treasury stock at cost, 7,134,071 and 3,286,473 shares, respectively			(65,636	)			(30,566	)
Total CPA®:16 — Global shareholders’ equity			888,659				959,896
Noncontrolling interests			88,168				86,709
Total equity			976,827				1,046,605
Total liabilities and equity		$	2,889,005			$	2,967,203

See Notes to Consolidated Financial Statements.

CORPORATE PROPERTY ASSOCIATES 16 — GLOBAL INCORPORATED
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share amounts)

		For the years ended December 31,
		2009				2008				2007
Revenues
Rental income		$	150,837			$	147,862			$	110,688
Interest income from direct financing leases			27,448				28,864				24,134
Interest income on notes receivable			28,796				29,478				20,743
Other real estate income			23,234				23,214				3,459
Other operating income			3,587				3,310				1,835
			233,902				232,728				160,859
Operating Expenses
Depreciation and amortization			(47,415	)			(45,225	)			(31,190	)
Property expenses			(33,026	)			(31,786	)			(20,718	)
Other real estate expenses			(18,064	)			(19,377	)			(3,250	)
General and administrative			(9,059	)			(12,521	)			(9,483	)
Impairment charges			(35,146	)			(890	)			—
			(142,710	)			(109,799	)			(64,641	)
Other Income and Expenses
Income from equity investments in real estate			13,837				8,769				2,104
Other interest income			217				4,083				20,303
Gain on extinguishment of debt			6,512				—				—
Other income and (expenses)			(734	)			(1,822	)			5,099
Interest expense			(80,782	)			(82,997	)			(63,836	)
			(60,950	)			(71,967	)			(36,330	)
Income before income taxes			30,242				50,962				59,888
Provision for income taxes			(5,795	)			(4,169	)			(2,837	)
Income from continuing operations			24,447				46,793				57,051
Discontinued Operations
Income from operations of discontinued properties			1,690				567				1,547
Gain on sale of real estate			7,634				—				—
Impairment charges			(20,812	)			—				—
(Loss) income from discontinued operations			(11,488	)			567				1,547
Net Income			12,959				47,360				58,598
Add: Net loss (income) attributable to noncontrolling interests			8,050				(339	)			(6,048	)
Less: Net income attributable to redeemable noncontrolling interests			(23,549	)			(26,774	)			(18,346	)
Net (Loss) Income Attributable to CPA®16 — Global Shareholders		$	(2,540	)		$	20,247			$	34,204
(Loss) Earnings Per Share
Income from continuing operations attributable to CPA®16 — Global shareholders		$	—			$	0.16			$	0.28
(Loss) income from discontinued operations attributable to CPA®16 — Global shareholders			(0.02	)			0.01				0.01
Net (loss) income attributable to CPA®16 — Global shareholders		$	(0.02	)		$	0.17			$	0.29
Weighted Average Shares Outstanding			122,824,957				121,314,180				116,654,112
Amounts Attributable to CPA®16 — Global Shareholders
Income from continuing operations, net of tax		$	401			$	19,292			$	33,074
(Loss) income from discontinued operations, net of tax			(2,941	)			955				1,130
Net (loss) income		$	(2,540	)		$	20,247			$	34,204

See Notes to Consolidated Financial Statements.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(in thousands)

		For the years ended December 31,
		2009				2008				2007
Net Income		$	12,959			$	47,360			$	58,598
Other Comprehensive Income (Loss):
Foreign currency translation adjustment			11,613				(44,188	)			(6,415	)
Change in unrealized (loss) gain on derivative instruments			(900	)			(3,968	)			1,539
Change in unrealized (loss) gain on marketable securities			(28	)			55				12
			10,685				(48,101	)			(4,864	)
Comprehensive income (loss)			23,644				(741	)			53,734
Amounts Attributable to Noncontrolling Interests:
Net loss (income)			8,050				(339	)			(6,048	)
Foreign currency translation adjustment			(1,860	)			3,459				(4,829	)
Change in unrealized gain on derivative instruments			(13	)			—				—
Comprehensive loss (income) attributable to noncontrolling interests			6,177				3,120				(10,877	)
Amounts Attributable to Redeemable Noncontrolling Interests:
Net income			(23,549	)			(26,774	)			(18,346	)
Foreign currency translation adjustment			(5,555	)			14,877				32,508
Comprehensive (income) loss attributable to redeemable noncontrolling interests			(29,104	)			(11,897	)			14,162
Comprehensive Income (Loss) Attributable to CPA®16 — Global Shareholders		$	717			$	(9,518	)		$	57,019

See Notes to Consolidated Financial Statements.

CORPORATE PROPERTY ASSOCIATES 16 — GLOBAL INCORPORATED
CONSOLIDATED STATEMENTS OF EQUITY
For the years ended December 31, 2009, 2008 and 2007
(in thousands, except share and per share amounts)

														Distributions				Accumulated								Total
										Additional				in Excess of				Other								CPA®:16 —
						Common				Paid-in				Accumulated				Comprehensive				Treasury				Global				Noncontrolling
		Shares				Stock				Capital				Earnings				(Loss) Income				Stock				Shareholders				Interests				Total
Balance at January 1, 2007			113,988,048			$	115			$	1,028,933			$	(40,769	)		$	9,090			$	(6,638	)		$	990,731			$	31,358			$	1,022,089
Shares issued $.001 par, at $10 per share, net of offering costs			3,584,285				4				33,763																33,767								33,767
Shares, $.001 par, issued to the advisor at $10 per share			2,281,172				2				22,810																22,812								22,812
Distributions declared ($0.6498 per share)															(75,916	)											(75,916	)							(75,916	)
Contributions																											—				330,387				330,387
Distributions to noncontrolling interests																											—				(299,067	)			(299,067	)
Net income															34,204												34,204				6,048				40,252
Other comprehensive income (loss):
Foreign currency translation adjustment																			21,264								21,264				4,829				26,093
Change in unrealized loss on derivative instruments																			1,539								1,539								1,539
Change in unrealized gain (loss) on marketable securities																			12								12								12
Repurchase of shares			(786,395	)																			(7,316	)			(7,316	)							(7,316	)
Balance at December 31, 2007			119,067,110				121				1,085,506				(82,481	)			31,905				(13,954	)			1,021,097				73,555			$	1,094,652
Shares issued $.001 par, at $10 per share, net of offering costs			3,543,833				3				32,220																32,223								32,223
Shares, $.001 par, issued to the advisor at $10 per share			1,240,982				1				12,409																12,410								12,410
Distributions declared ($0.6576 per share)															(79,704	)											(79,704	)							(79,704	)
Contributions																											—				24,396				24,396
Distributions to noncontrolling interests																											—				(8,122	)			(8,122	)
Net income															20,247												20,247				339				20,586
Other comprehensive income (loss):
Foreign currency translation adjustment																			(25,852	)							(25,852	)			(3,459	)			(29,311	)
Change in unrealized loss on derivative instruments																			(3,968	)							(3,968	)							(3,968	)
Change in unrealized gain (loss) on marketable securities																			55								55								55
Repurchase of shares			(1,786,275	)																			(16,612	)			(16,612	)							(16,612	)
Balance at December 31, 2008			122,065,650				125				1,130,135				(141,938	)			2,140				(30,566	)			959,896				86,709				1,046,605
Shares issued $.001 par, at $9.80 and $10.00 per share, net of offering costs			3,440,053				4				32,257																32,261								32,261
Shares, $.001 par, issued to the advisor at $9.80 per share			1,202,996				1				11,838																11,839								11,839
Distributions declared ($0.6621 per share)															(80,984	)											(80,984	)							(80,984	)
Contributions																											—				24,884				24,884
Distributions to noncontrolling interests																											—				(17,248	)			(17,248	)
Net income															(2,540	)											(2,540	)			(8,050	)			(10,590	)
Other comprehensive income (loss):
Foreign currency translation adjustment																			4,198								4,198				1,860				6,058
Change in unrealized loss on derivative instruments																			(913	)							(913	)			13				(900	)
Change in unrealized gain (loss) on marketable securities																			(28	)							(28	)							(28	)
Repurchase of shares			(3,847,598	)																			(35,070	)			(35,070	)			—				(35,070	)
Balance at December 31, 2009			122,861,101			$	130			$	1,174,230			$	(225,462	)		$	5,397			$	(65,636	)		$	888,659			$	88,168			$	976,827

See Notes to Consolidated Financial Statements.

CORPORATE PROPERTY ASSOCIATES 16 — GLOBAL INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

		For the years ended December 31,
		2009				2008				2007
Cash Flows — Operating Activities
Net income		$	12,959			$	47,360			$	58,598
Adjustments to net income: Depreciation and amortization including intangible assets and deferred financing costs			49,348				47,800				33,180
Straight-line rent adjustments, amortization of rent-related intangibles and financing lease adjustments			3,007				821				788
Income from equity investments in real estate in excess of distributions received			1,788				3,987				2,987
Issuance of shares to affiliate in satisfaction of fees due			11,839				12,410				25,175
Realized loss (gain) on foreign currency transactions, net			400				(1,407	)			(2,360	)
Unrealized loss (gain) on foreign currency and derivative transactions, net			378				3,365				(2,739	)
Realized gain on sale of real estate			(7,634	)			(136	)			—
Gain on extinguishment of debt			(8,825	)			—				—
Impairment charges			55,958				890				—
Change in other operating assets and liabilities, net (a)			661				2,345				5,356
Net cash provided by operating activities			119,879				117,435				120,985
Cash Flows — Investing Activities
Distributions from equity investments in real estate in excess of equity income			46,959				12,064				4,256
Contributions to equity investments in real estate			(62,448	)			(8,274	)			(64,518	)
Acquisition of real estate and other capital expenditures (b)			(137,380	)			(150,219	)			(638,182	)
Funding/purchases of note receivable			(5,978	)			(7,291	)			(315,940	)
Funds placed in escrow for future acquisition and construction of real estate			—				(18,843	)			(43,496	)
Release of funds held in escrow for acquisition and construction of real estate			11,122				39,072				5,349
Proceeds from sale of real estate			28,185				22,886				—
Payment of deferred acquisition fees to affiliate			(9,082	)			(29,546	)			—
VAT taxes paid in connection with acquisition of real estate			—				—				(885	)
VAT taxes recovered in connection with acquisition of real estate			—				3,711				—
Proceeds from maturity of short-term investments			—				—				1,698
Receipt of principal payment of mortgage note receivable			—				301				288
Net cash used in investing activities			(128,622	)			(136,139	)			(1,051,430	)
Cash Flows — Financing Activities
Distributions paid			(80,778	)			(79,011	)			(72,551	)
Distributions paid to noncontrolling interests			(44,447	)			(36,349	)			(300,107	)
Contributions from noncontrolling interests			24,884				747				313,081
Proceeds from mortgages and notes payable			78,516				102,124				731,574
Scheduled payments of mortgage principal			(18,747	)			(15,487	)			(18,053	)
Prepayment of mortgages and note payable			(34,781	)			(4,312	)			—
Deferred financing costs and mortgage deposits, net of deposits refunded			(386	)			(688	)			(975	)
Proceeds from issuance of shares, net of costs of raising capital			32,261				32,223				31,404
Purchase of treasury stock			(35,070	)			(16,612	)			(7,316	)
Net cash (used in) provided by financing activities			(78,548	)			(17,365	)			677,057
Change in Cash and Cash Equivalents During the Year
Effect of exchange rate changes on cash			(2,933	)			(1,481	)			924
Net decrease in cash and cash equivalents			(90,224	)			(37,550	)			(252,464	)
Cash and cash equivalents, beginning of year			174,209				211,759				464,223
Cash and cash equivalents, end of year		$	83,985			$	174,209			$	211,759

Non-cash investing and financing activities

CORPORATE PROPERTY ASSOCIATES 16 — GLOBAL INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS, CONTINUED

Supplemental cash flow information (in thousands):

		Years ended December 31,
		2009				2008				2007
Interest paid, net of amounts capitalized		$	81,620			$	86,044			$	58,924
Interest capitalized		$	2,446			$	2,419			$	2,662
Income taxes paid		$	3,880			$	5,717			$	1,409

See Notes to Consolidated Financial Statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Business and Organization

Corporate Property Associates 16 — Global Incorporated is a publicly owned, non-actively traded REIT that invests in commercial properties leased to companies domestically and internationally. 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 leased 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 increases, tenant defaults and sales of properties. At December 31, 2009, our portfolio was comprised of our full or partial ownership interests in 386 properties, substantially all of which were triple-net leased to 79 tenants, and totaled approximately 27 million square feet (on a pro rata basis) with an occupancy rate of approximately 99%. We were formed as a Maryland corporation in June 2003 and are managed by the advisor.

Note 2. Summary of Significant Accounting Policies

Basis of Consolidation

The consolidated financial statements reflect all of our accounts including those of our majority-owned and/or controlled subsidiaries. The portion of equity in a subsidiary that is not attributable, directly or indirectly, to us is 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 the entity is deemed a variable interest entity, or VIE, and if we are deemed to be the primary beneficiary under current authoritative accounting guidance. We consolidate (i) entities that are VIEs and of which we are deemed to be the primary beneficiary and (ii) entities that are non-VIEs that we control. Entities that we account for under the equity method (i.e., at cost, increased or decreased by our share of earnings or losses, less distributions, plus fundings) include (i) entities that are VIEs and of which we are not deemed to be the primary beneficiary and (ii) entities that are non-VIEs that we do not control but over which we have the ability to exercise significant influence. We will reconsider our determination of whether an entity is a VIE and who the primary beneficiary is if certain events occur that are likely to cause a change in the original determinations.

In determining whether we control a non-VIE, we consider that the general partners in a limited partnership (or similar entity) are presumed to control the entity regardless of the level of their ownership and, accordingly, may be required to consolidate the entity. This presumption may be overcome if the agreements provide the limited partners with either (a) the substantive ability to dissolve (liquidate) the limited partnership or otherwise remove the general partners without cause or (b) substantive participating rights. If it is deemed that the limited partners’ rights overcome the presumption of control by a general partner of the limited partnership, the general partner must account for its investment in the limited partnership using the equity method of accounting.

We have an investment in a domestic tenant-in-common interest. Consolidation of this investment is not required as it does not qualify as a VIE and does not meet the control requirement required for consolidation. Accordingly, we account for this investment using the equity method of accounting. We use the equity method of accounting because the shared decision-making involved in a tenant-in-common interest investment creates an opportunity for us to have significant influence on the operating and financial decision of this investment and thereby creates some responsibility by us for a return on our investment.

Out-of-Period Adjustments

During the fourth quarter of 2008, we identified errors in the consolidated financial statements for the years ended December 31, 2005 through 2008. These errors related to accounting for pre-operating activities of certain hotel investments (aggregating $0.5 million in 2007 and $0.4 million, $0.2 million and $0.1 million for the three months ended March 31, 2008, June 30, 2008, September 30, 2008, respectively) and minimum rent increases for a lessee (aggregating $1.8 million over the period from 2005-2007 and $0.1 million in each of the first three quarters of 2008). In addition, during the first quarter of 2007, we identified errors in the consolidated financial statements for the years ended December 31, 2005 and 2006 related to accounting for foreign income taxes (aggregating $0.4 million over the period from 2005-2006).

Notes to Consolidated Financial Statements

We concluded that these adjustments were not material to any prior periods’ consolidated financial statements. We also concluded that the cumulative adjustment was not material to the year ended December 31, 2008, nor was it material to the years ended 2007, 2006 and 2005. As such, this cumulative effect was recorded in the consolidated statements of operations as out-of-period adjustments in the periods the issues were identified. The effect of these adjustments was to increase net income by $1.3 million for 2008 and decrease net income by $0.1 million, $0.4 million and $0.4 million for the years ended December 31, 2007, 2006 and 2005, respectively.

Use of Estimates

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 consolidated financial statements and the accompanying notes. Actual results could differ from those estimates.

Reclassifications and Revisions

Certain prior year amounts have been reclassified to conform to the current year presentation. The consolidated financial statements included in this Report have been retrospectively adjusted to reflect the adoption of accounting guidance for noncontrolling interests during the year ended December 31, 2009, as well as the disposition (or planned disposition) of certain properties as discontinued operations for all periods presented.

Purchase Price Allocation

When we acquire properties accounted for as operating leases, we allocate the purchase costs to the tangible and intangible assets and liabilities acquired based on their estimated fair values. We determine the value of the tangible assets, consisting of land and buildings, as if vacant, and record intangible assets, including the above-market and below-market value of leases, the value of in-place leases and the value of tenant relationships, at their relative estimated fair values. See Real Estate Leased to Others and Depreciation below for a discussion of our significant accounting policies related to tangible assets. We include the value of below-market leases in Prepaid and deferred rental income and security deposits in the consolidated financial statements.

We record above-market and below-market lease values for owned properties based on the present value (using an interest rate reflecting the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the leases negotiated and in place at the time of acquisition of the properties and (ii) our estimate of fair market lease rates for the property or equivalent property, both of which are measured over a period equal to the estimated market lease term. We amortize the capitalized above-market lease value as a reduction of rental income over the estimated market lease term. We amortize the capitalized below-market lease value as an increase to rental income over the initial term and any fixed rate renewal periods in the respective leases.

We allocate the total amount of other intangibles to in-place lease values and tenant relationship intangible values based on our evaluation of the specific characteristics of each tenant’s lease and our overall relationship with each tenant. The characteristics we consider in allocating these values include estimated market rent, the nature and extent of the existing relationship with the tenant, the expectation of lease renewals, estimated carrying costs of the property if vacant and estimated costs to execute a new lease, among other factors. We determine these values using third party appraisals or our estimates. We amortize the capitalized value of in-place lease intangibles to expense over the remaining initial term of each lease. We amortize the capitalized value of tenant relationships to expense over the initial and expected renewal terms of the lease. No amortization period for intangibles will exceed the remaining depreciable life of the building.

If a lease is terminated, we charge the unamortized portion of each intangible, including above-market and below-market lease values, in-place lease values and tenant relationship values, to expense.

Real Estate and Operating Real Estate

We carry land and buildings and personal property at cost less accumulated depreciation. We capitalize renewals and improvements, while we expense as incurred replacements, maintenance and repairs that do not improve or extend the lives of the respective assets.

Notes to Consolidated Financial Statements

Real Estate Under Construction and Redevelopment

For properties under construction, operating expenses including interest charges and other property expenses, including real estate taxes, are capitalized rather than expensed and incidental revenue is recorded as a reduction of capitalized project (i.e., construction) costs. We capitalize interest by applying the interest rate applicable to outstanding borrowings to the average amount of accumulated qualifying expenditures for properties under construction during the period.

Acquisition, Development and Construction Loans (“ADC Equity Arrangements”)

We evaluate mortgage loans where we participate in residual interests through loan provisions or other contracts to ascertain whether we have the same risks and rewards as an owner or a venture partner. Where we conclude that such arrangements are more appropriately treated as a hypothetical investment in real estate, we reflect such investment as part of “equity method investments in real estate” (Note 6). In these cases, our loan position is treated as preference capital in the hypothetical partnership rather than a loan and no interest income is recorded.

Notes Receivable

For investments in mortgage notes and loan participations, the loans are initially reflected at acquisition cost which consists of the outstanding balance, net of the acquisition discount or premium. We amortize any discount or premium as an adjustment to increase or decrease, respectively, the yield realized on these loans using the effective interest method. As such, differences between carrying value and principal balances outstanding do not represent embedded losses or gains as we generally plan to hold such loans to maturity.

Cash and Cash Equivalents

We consider all short-term, highly liquid investments that are both readily convertible to cash and have a maturity of three months or less at the time of purchase to be cash equivalents. Items classified as cash equivalents include commercial paper and money-market funds. At December 31, 2009 and 2008, our cash and cash equivalents were held in the custody of several financial institutions, and these balances, at times, exceeded federally insurable limits. We seek to mitigate this risk by depositing funds only with major financial institutions.

Marketable Securities

Marketable securities, which consist of an interest-only participation in a mortgage note receivable, are classified as available for sale securities and reported at fair value, with any unrealized gains and losses on these securities reported as a component of other comprehensive income (“OCI”) until realized.

Other Assets and Other Liabilities

We include interest receivable, tax receivable, stock warrants, marketable securities, deferred charges and deferred rental income in Other assets. We include derivatives and miscellaneous amounts held on behalf of tenants in Other liabilities. Deferred charges are costs incurred in connection with mortgage financings and refinancings that are amortized over the terms of the mortgages and included in Interest expense in the consolidated financial statements. Deferred rental income is the aggregate cumulative difference for operating leases between scheduled rents that vary during the lease term, and rent recognized on a straight-line basis.

Deferred Acquisition Fees Payable to Affiliate

Fees payable to the advisor for structuring and negotiating investments and related mortgage financing on our behalf are included in Due to affiliates. A portion of these fees is payable in equal annual installments each January of the three calendar years following the date a property was purchased. Payment of such fees is subject to the performance criterion (Note 3).

Treasury Stock

Treasury stock is recorded at cost.

Notes to Consolidated Financial Statements

Real Estate Leased to Others

We lease real estate to others primarily on a triple-net leased basis, whereby the tenant is generally responsible for all operating expenses relating to the property, including property taxes, insurance, maintenance, repairs, renewals and improvements. We charge expenditures for maintenance and repairs, including routine betterments, to operations as incurred. We capitalize significant renovations that increase the useful life of the properties. For the years ended December 31, 2009, 2008 and 2007, although we are legally obligated for the payment, pursuant to our lease agreements with our tenants, lessees were responsible for the direct payment to the taxing authorities of real estate taxes of $14.7 million, $14.0 million and $9.8 million, respectively.

We diversify our real estate investments among various corporate tenants engaged in different industries, by property type and by geographic area (Note 10). Substantially all of our leases provide for either scheduled rent increases, periodic rent adjustments based on formulas indexed to changes in the CPI or similar indices or percentage rents. CPI-based adjustments are contingent on future events and are therefore not included in straight-line rent calculations. We recognize rents from percentage rents as reported by the lessees, which is after the level of sales requiring a rental payment to us is reached.

We account for leases as operating or direct financing leases as described below:

Operating leases — We record real estate at cost less accumulated depreciation; we recognize future minimum rental revenue on a straight-line basis over the term of the related leases and charge expenses (including depreciation) to operations as incurred (Note 4).

Direct financing method — We record leases accounted for under the direct financing method at their net investment (Note 5). We defer and amortize unearned income to income over the lease term so as to produce a constant periodic rate of return on our net investment in the lease.

On an ongoing basis, we assess our ability to collect rent and other tenant-based receivables and determine an appropriate allowance for uncollected amounts. Because we have a limited number of lessees (20 lessees represented 68% of lease revenues during 2009), we believe that it is necessary to evaluate the collectability of these receivables based on the facts and circumstances of each situation rather than solely using statistical methods. Therefore, in recognizing our provision for uncollected rents and other tenant receivables, we evaluate actual past due amounts and make subjective judgments as to the collectability of those amounts based on factors including, but not limited to, our knowledge of a lessee’s circumstances, the age of the receivables, the tenant’s credit profile and prior experience with the tenant. Even if a lessee has been making payments, we may reserve for the entire receivable amount if we believe there has been significant or continuing deterioration in the lessee’s ability to meet its lease obligations.

Acquisition Costs

The FASB has revised its guidance for business combinations. The revised guidance establishes principles and requirements for how the acquirer in a business combination must recognize and measure in its financial statements the identifiable assets acquired, the liabilities assumed, any noncontrolling interests in the entity acquired, and goodwill acquired in a business combination. Additionally, the revised guidance requires that an acquiring entity must immediately expense all acquisition costs and fees associated with a business combination, while such costs are capitalized for transactions deemed to be acquisitions of an asset. To the extent we make investments that are deemed to be business combinations, our results of operations will be negatively impacted by the immediate expensing of acquisition costs and fees incurred in accordance with the revised guidance, whereas in the past such costs and fees would have been capitalized and allocated to the cost basis of the acquisition. Post acquisition, there will be a subsequent positive impact on our results of operations through a reduction in depreciation expense over the estimated life of the properties. For those investments that are not deemed to be a business combination, the revised guidance is not expected to have a material impact on our consolidated financial statements. Historically, we have not acquired investments that would be deemed a business combination under the revised guidance.

During 2009, we made investments totaling $163.6 million, inclusive of amounts attributable to noncontrolling interests of $45.9 million, that were deemed to be real estate asset acquisitions. Costs and fees capitalized in connection with this investment activity totaled $7.8 million, inclusive of amounts attributable to noncontrolling interests of $2.3 million. We did not make any investments that were deemed to be business combinations during 2009.

Notes to Consolidated Financial Statements

Depreciation

We compute depreciation of building and related improvements using the straight-line method over the estimated useful lives of the properties, or improvements, which range from 3 to 40 years. We compute depreciation of tenant improvements using the straight-line method over the lesser of the remaining term of the lease or the estimated useful life.

Impairments

We periodically assess whether there are any indicators that the value of our long-lived assets may be impaired or that their carrying value may not be recoverable. These impairment indicators include, but are not limited to, the vacancy of a property that is not subject to a lease; a lease default by a tenant that is experiencing financial difficulty; the termination of a lease by a tenant or the rejection of a lease in a bankruptcy proceeding. Impairment charges do not necessarily reflect the true economic loss caused by the default of the tenant, which may be greater or less than the impairment amount. In addition, we use non-recourse debt to finance our acquisitions, and to the extent that the value of an asset is written down to below the value of its debt, there is an unrealized gain that will be triggered when we turn the asset back to the lender in satisfaction of the debt. We may incur impairment charges on long-lived assets, including real estate, direct financing leases, assets held for sale and equity investments in real estate. We may also incur impairment charges on marketable securities. Our policies for evaluating whether these assets are impaired are presented below.

Real Estate

For real estate assets in which an impairment indicator is identified, we follow a two-step process to determine whether an asset is impaired and to determine the amount of the charge. First, we compare the carrying value of the property to the future net undiscounted cash flow that we expect the property will generate, including any estimated proceeds from the eventual sale of the property. The undiscounted cash flow analysis requires us to make our best estimate of market rents, residual values and holding periods. Depending on the assumptions made and estimates used, the future cash flow projected in the evaluation of long-lived assets can vary within a range of outcomes. We consider the likelihood of possible outcomes in determining the best possible estimate of future cash flows. If the future net undiscounted cash flow of the property is less than the carrying value, the property is considered to be impaired. We then measure the loss as the excess of the carrying value of the property over its estimated fair value, as determined using market information. In cases where the available market information is not deemed appropriate, we perform a future net cash flow analysis discounted for inherent risk associated with each asset to determine an estimated fair value.

Direct Financing Leases

We review our direct financing leases at least annually to determine whether there has been an other-than-temporary decline in the current estimate of residual value of the property. The residual value is our estimate of what we could realize upon the sale of the property at the end of the lease term, based on market information. If this review indicates that a decline in residual value has occurred that is other-than-temporary, we recognize an impairment charge and revise the accounting for the direct financing lease to reflect a portion of the future cash flow from the lessee as a return of principal rather than as revenue. While we evaluate direct financing leases if there are any indicators that the residual value may be impaired, the evaluation of a direct financing lease can be affected by changes in long-term market conditions even though the obligations of the lessee are being met.

Assets Held for Sale

We classify assets that are accounted for as operating leases as held for sale when we have entered into a contract to sell the property, all material due diligence requirements have been satisfied and we believe it is probable that the disposition will occur within one year. When we classify an asset as held for sale, we calculate its estimated fair value as the expected sale price, less expected selling costs. We then compare the asset’s estimated fair value to its carrying value, and if the estimated fair value is less than the property’s carrying value, we reduce the carrying value to the estimated fair value. We will continue to review the property for subsequent changes in the estimated fair value, and may recognize an additional impairment charge if warranted.

If circumstances arise that we previously considered unlikely and, as a result, we decide not to sell a property previously classified as held for sale, we reclassify the property as held and used. We record a property that is reclassified as held and used at the lower of (a) its carrying amount before the property was classified as held for sale, adjusted for any depreciation expense that would have been recognized had the property been continuously classified as held and used, or (b) the estimated fair value at the date of the subsequent decision not to sell.

Notes to Consolidated Financial Statements

Equity Investments in Real Estate

We evaluate our equity investments in real estate on a periodic basis to determine if there are any indicators that the value of our equity investment may be impaired and whether or not that impairment is other-than-temporary. To the extent impairment has occurred, we measure the charge as the excess of the carrying value of our investment over its estimated fair value, which is determined by multiplying the estimated fair value of the underlying venture’s net assets by our ownership interest percentage.

Marketable Securities

We evaluate our marketable securities for impairment if a decline in estimated fair value below cost basis is significant and/or has lasted for an extended period of time. We review the underlying cause of the decline in value and the estimated recovery period, as well as the severity and duration of the decline, to determine if the decline is other-than-temporary. In our evaluation, we consider our ability and intent to hold these investments for a reasonable period of time sufficient for us to recover our cost basis. We also evaluate the near-term prospects for each of these investments in relation to the severity and duration of the decline. If we determine that the decline is other-than-temporary, we record an impairment charge to reduce our cost basis to the estimated fair value of the security.

Assets Held for Sale

We classify assets that are accounted for as operating leases as held for sale when we have entered into a contract to sell the property, all material due diligence requirements have been satisfied and we believe it is probable that the disposition will occur within one year. Assets held for sale are recorded at the lower of carrying value or estimated fair value, which is generally calculated as the expected sale price, less expected selling costs. The results of operations and the related gain or loss on sale of properties that have been sold or that are classified as held for sale are included in discontinued operations (Note 17).

If circumstances arise that we previously considered unlikely and, as a result, we decide not to sell a property previously classified as held for sale, we reclassify the property as held and used. We record a property that is reclassified as held and used at the lower of (a) its carrying amount before the property was classified as held for sale, adjusted for any depreciation expense that would have been recognized had the property been continuously classified as held and used or (b) the estimated fair value at the date of the subsequent decision not to sell.

We recognize gains and losses on the sale of properties when, among other criteria, the parties are bound by the terms of the contract, all consideration has been exchanged and all conditions precedent to closing have been performed. At the time the sale is consummated, a gain or loss is recognized as the difference between the sale price, less any selling costs, and the carrying value of the property.

Foreign Currency Translation

We have interests in real estate investments in the European Union, Canada, Malaysia, Mexico and Thailand and own interests in properties in the European Union. The functional currencies for these investments are primarily the Euro and the British Pound Sterling and, to a lesser extent, the Swedish krona, the Canadian dollar, the Thai baht, and the Malaysian ringgit. We perform the translation from these local currencies to the U.S. dollar for assets and liabilities using current exchange rates in effect at the balance sheet date and for revenue and expense accounts using a weighted average exchange rate during the period. We report the gains and losses resulting from this translation as a component of OCI in equity. At December 31, 2009 and 2008, the cumulative foreign currency translation adjustment gain was $7.8 million and $3.6 million, respectively.

Foreign currency transactions may produce receivables or payables that are fixed in terms of the amount of foreign currency that will be received or paid. A change in the exchange rates between the functional currency and the currency in which a transaction is denominated increases or decreases the expected amount of functional currency cash flows upon settlement of that transaction. That increase or decrease in the expected functional currency cash flows is an unrealized foreign currency transaction gain or loss that generally will be included in determining net income for the period in which the exchange rate changes. Likewise, a transaction gain or loss (measured from the transaction date or the most recent intervening balance sheet date, whichever is later), realized upon settlement of a foreign currency transaction generally will be included in net income for the period in which the transaction is settled. Foreign currency transactions that are (i) designated as, and are effective as, economic hedges of a net investment and (ii) intercompany foreign currency transactions that are of a long-term nature (that is, settlement is not planned or anticipated in the foreseeable future), when the entities to the transactions are consolidated or accounted for by the equity method in our financial statements are not included in determining net income are accounted for in the same manner as foreign currency translation adjustments and reported as a component of OCI in equity. Investments in international equity investments in real estate are funded in part through subordinated intercompany debt.

Notes to Consolidated Financial Statements

Foreign currency intercompany transactions that are scheduled for settlement, consisting primarily of accrued interest and the translation to the reporting currency of intercompany subordinated debt with scheduled principal repayments, are included in the determination of net income. We recognized an unrealized gain of $0.4 million, an unrealized loss of $0.2 million and an unrealized gain of less than $0.1 million from such transactions for the years ended December 31, 2009, 2008 and 2007, respectively. For the years ended December 31, 2009, 2008, and 2007, we recognized a realized loss of $0.4 million and realized gains of $1.4 million and $2.0 million, respectively, on foreign currency transactions in connection with the transfer of cash from foreign operations of subsidiaries to the parent company.

Derivative Instruments

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. If a derivative is designated as a hedge, depending on the nature of the hedge, changes in the fair value of the derivative will either be offset against the change in fair value of the hedged asset, liability, or firm commitment through earnings, or recognized in OCI until the hedged item is recognized in earnings. The ineffective portion of a derivative’s change in fair value will be immediately recognized in earnings.

Income Taxes

We have elected to be taxed as a REIT under Sections 856 through 860 of the Code. In order to maintain our qualification as a REIT, we are required, among other things, to distribute at least 90% of our REIT net taxable income to our shareholders and meet certain tests regarding the nature of our income and assets. As a REIT, we are not subject to federal income tax with respect to the portion of our income that meets certain criteria and is distributed annually to shareholders. Accordingly, no provision for federal income taxes is included in the consolidated financial statements with respect to these operations. We believe we have operated, and we intend to continue to operate, in a manner that allows us to continue to meet the requirements for taxation as a REIT.

We conduct business in various states and municipalities within the U.S. and the European Union and, as a result, we or one or more of our subsidiaries file income tax returns in the U.S. federal jurisdiction and various state and certain foreign jurisdictions. As a result, we are subject to certain foreign, state and local taxes and a provision for such taxes is included in the consolidated financial statements.

Significant judgment is required in determining our tax provision and in evaluating our tax positions. We establish tax reserves based on a benefit recognition model, which we believe could result in a greater amount of benefit (and a lower amount of reserve) being initially recognized in certain circumstances. Provided that the tax position is deemed more likely than not of being sustained, we recognize the largest amount of tax benefit that is greater than 50 percent likely of being ultimately realized upon settlement. We derecognize the tax position when it is no longer more likely than not of being sustained.

We elected to treat certain of our corporate subsidiaries as a taxable REIT subsidiary (“TRS”). In general, a TRS may perform additional services for our tenants and generally may engage in any real estate or non-real estate related business (except for the operation or management of health care facilities or lodging facilities or providing to any person, under a franchise, license or otherwise, rights to any brand name under which any lodging facility or health care facility is operated). A TRS is subject to corporate federal income tax. Our TRS subsidiaries own hotels that are managed on our behalf by third party hotel management companies.

Our earnings and profits, which determine the taxability of dividends to shareholders, differ from net income reported for financial reporting purposes due primarily to differences in depreciation, including hotel properties, for federal income tax purposes. Deferred income taxes relate primarily to our TRSs and are accounted for using the asset and liability method. Under this method, deferred income taxes are recognized for temporary differences between the financial reporting bases of assets and liabilities of our TRSs and their respective tax bases and for their operating loss and tax credit carry forwards based on enacted tax rates expected to be in effect when such amounts are realized or settled. However, deferred tax assets are recognized only to the extent that it is more likely than not that they will be realized based on consideration of available evidence, including tax planning strategies and other factors.

Although our TRSs may operate at a profit for federal income tax purposes in future periods, we cannot quantify the value of our deferred tax assets with certainty. Therefore, any deferred tax assets have been reserved as we have not concluded that it is more likely than not that these deferred tax assets will be realizable.

Notes to Consolidated Financial Statements

(Loss) Earnings Per Share

We have a simple equity capital structure with only common stock outstanding. As a result, (loss) earnings per share, as presented, represents both basic and dilutive per-share amounts for all periods presented in the consolidated financial statements.

Subsequent Events

In May 2009, the FASB issued authoritative guidance for subsequent events, which we adopted as required in the second quarter of 2009. The guidance establishes general standards of accounting for and disclosures of events that occur after the balance sheet date but before financial statements are issued or are available to be issued.

Future Accounting Requirements

In June 2009, the FASB issued amended guidance related to the consolidation of VIEs. These amendments require an enterprise to qualitatively assess the determination of the primary beneficiary of a VIE based on whether the entity (1) has the power to direct matters that most significantly impact the activities of the VIE, and (2) has the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. The amendments change the consideration of kick-out rights in determining if an entity is a VIE, which may cause certain additional entities to now be considered VIEs. Additionally, they require an ongoing reconsideration of the primary beneficiary and provide a framework for the events that trigger a reassessment of whether an entity is a VIE. This guidance is effective for us beginning January 1, 2010. We are currently assessing the potential impact that the adoption of the new guidance will have on our financial position and results of operations.

Note 3. Agreements and Transactions with Related Parties

We have an advisory agreement with the advisor whereby the advisor performs certain services for us for a fee. Under the terms of this agreement, which was amended and renewed effective October 1, 2009, the advisor manages our day-to-day operations, for which we pay the advisor asset management and performance fees, and structures and negotiates the purchase and sale of investments and debt placement transactions for us, for which we pay the advisor structuring and subordinated disposition fees. In addition, we reimburse the advisor for certain administrative duties performed on our behalf. We also have certain agreements with joint ventures. These transactions are described below.

Asset Management and Performance Fees

Under the advisory agreement, we pay the advisor asset management and performance fees, each of which are 1/2 of 1% per annum of our average invested assets and are computed as provided for in the advisory agreement. The performance fees are subordinated to the performance criterion, a non-compounded cumulative annual distribution return of 6% per annum. The asset management and performance fees are payable in cash or restricted shares of our common stock at the advisor’s option. If the advisor elects to receive all or a portion of its fees in restricted shares, the number of restricted shares issued is determined by dividing the dollar amount of fees by our most recently published estimated net asset value per share as approved by our board of directors. For 2009 and 2008, the advisor elected to receive its asset management fees in cash and its performance fees in restricted shares of our common stock. For 2007, the advisor elected to receive both its asset management and performance fees in restricted shares of our common stock. We incurred base asset management fees of $11.7 million, $12.0 million and $9.0 million in 2009, 2008 and 2007, respectively, with performance fees in like amounts, both of which are included in Property expenses in the consolidated financial statements. At December 31, 2009, the advisor owned 5,738,582 shares (4.7%) of our common stock.

Transaction Fees

Under the advisory agreement, we also pay the advisor acquisition fees for structuring and negotiating investments and related mortgage financing on our behalf. Acquisition fees average 4.5% or less of the aggregate cost of investments acquired and are comprised of a current portion of 2.5%, which is paid at the date the property is purchased, and a deferred portion of 2%, which is payable in equal annual installments each January of the three calendar years following the date a property was purchased, subject to satisfying the 6% performance criterion. Interest on unpaid installments is 5% per year. During 2009, 2008 and 2007, we incurred current acquisition fees of $3.0 million, $4.2 million and $17.2 million, respectively, and deferred acquisition fees of $2.4 million, $3.4 million and $13.9 million, respectively. In addition, in May 2008, CPA^®:17 — Global purchased from us an additional interest in a venture as described below. In connection with this purchase, CPA^®:17 — Global assumed from us deferred acquisition fees payable totaling $0.6 million. Unpaid installments of deferred acquisition fees totaled $9.0 million and $15.7 million at December 31, 2009 and 2008, respectively, and are included in Due to affiliates in the consolidated financial statements. We paid annual deferred acquisition fee installments of $9.1 million and $29.5 million in cash to the advisor in January 2009 and 2008, respectively. We paid our first installment in January 2008.

Notes to Consolidated Financial Statements

We also pay fees to the advisor for services provided to us in connection with the disposition of investments. These fees, which are subordinated to the performance criterion and certain other provisions included in the advisory agreement, are deferred and are payable to the advisor only in connection with a liquidity event. Subordinated disposition fees totaled $1.0 million at December 31, 2009. There were no subordinated disposition fees at December 31, 2008 as we did not sell any assets in 2008.

Other Expenses

We reimburse the advisor for various expenses it incurs in the course of providing services to us. We reimburse certain third-party expenses paid by the advisor on our behalf, including property-specific costs, professional fees, office expenses and business development expenses. In addition, we reimburse the advisor for the allocated costs of personnel and overhead in providing management of our day-to-day operations, including accounting services, shareholder services, corporate management, and property management and operations. We do not reimburse the advisor for the cost of personnel if these personnel provide services for transactions for which the advisor receives a transaction fee, such as acquisitions, dispositions and refinancings. We incurred personnel reimbursements of $3.1 million, $3.1 million and $2.3 million for 2009, 2008 and 2007, respectively, which are included in General and administrative expenses in the consolidated financial statements.

The 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 twelve-month period. If in any year our operating expenses exceed the 2%/25% guidelines, the advisor will have an obligation to reimburse us for such excess, subject to certain conditions. If our independent directors find that the excess expenses were justified based on any unusual and nonrecurring factors that they deem sufficient, the advisor may be paid in future years for the full amount or any portion of such excess expenses, but only to the extent that the reimbursement would not cause our operating expenses to exceed this limit in any such year. We will record any reimbursement of operating expenses as a liability until any contingencies are resolved and will record the reimbursement as a reduction of asset management and performance fees at such time that a reimbursement is fixed, determinable and irrevocable. Our operating expenses have not exceeded the amount that would require the advisor to reimburse us.

Joint Ventures and Other Transactions with Affiliates

Together with certain affiliates, we participate in an entity that leases office space used for the administration of real estate entities. Under the terms of an agreement among the participants in this entity, rental, occupancy and leasehold improvement costs are allocated among the participants based on gross revenues and are adjusted quarterly. Our share of expenses incurred was $0.8 million, $0.8 million and $0.5 million in 2009, 2008 and 2007, respectively. Based on gross revenues through December 31, 2009, our current share of future annual minimum lease payments under this agreement would be $0.7 million annually through 2016.

We own interests in entities ranging from 25% to 70%, as well as a jointly-controlled tenant-in-common interest in a property, with the remaining interests held by affiliates. We consolidate certain of these entities (Note 2) and account for the remainder under the equity method of accounting (Note 6).

In June 2008, our affiliate, CPA^®:17 — Global, exercised its option to purchase an additional 49.99% interest in a domestic venture in which we and CPA^®:17 — Global previously held 99.99% and 0.01% interests, respectively. In connection with this transaction, we recognized a gain of $0.1 million as a result of the sale of our interest in the venture. We continue to consolidate this investment because, in our capacity as the managing member, we have the right to control operations as well as the ability to dissolve the venture or otherwise purchase the interest of the other member.

In June 2007, we met our performance criterion, and as a result, amounts included in Due to affiliates in the consolidated balance sheets totaling $45.9 million at June 30, 2007, consisting of performance fees of $11.9 million, deferred acquisition fees of $31.7 million and interest thereon of $2.3 million, became payable to the advisor. We paid the previously deferred performance fees totaling $11.9 million to the advisor in July 2007 in the form of 1,194,549 restricted shares of our common stock. The deferred acquisition fees of $31.7 million and interest thereon of $2.3 million were payable to the advisor in cash beginning in January 2008. We paid installments of $28.3 million and $4.7 million in January 2008 and 2009, respectively, and paid the remaining installment of $1.1 million in January 2010. These amounts are exclusive of deferred acquisition fees and interest thereon incurred in connection with transactions completed subsequent to meeting the performance criterion.

Notes to Consolidated Financial Statements

Note 4. Net Investments in Properties

Real Estate

Real estate, which consists of land and buildings leased to others, at cost, and accounted for as operating leases, is summarized as follows (in thousands):

		December 31,
		2009				2008
Land		$	345,347			$	340,216
Buildings			1,351,525				1,320,944
Less: Accumulated depreciation			(112,385	)			(76,943	)
		$	1,584,487			$	1,584,217

Operating Real Estate

Operating real estate, which consists primarily of our hotel operations, at cost, is summarized as follows (in thousands):

		December 31,
		2009				2008
Land		$	8,296			$	8,296
Buildings			75,422				74,480
Less: Accumulated depreciation			(6,448	)			(3,306	)
		$	77,270			$	79,470

Acquisitions of Real Estate

2009 — In July 2009, a venture in which we and an affiliate hold 51% and 49% interests, respectively, and which we consolidate, entered into an investment in Hungary for a total cost of approximately $93.6 million, inclusive of noncontrolling interest of $45.9 million and acquisition fees payable to the advisor. In connection with this investment, which was deemed to be a real estate asset acquisition, we capitalized acquisition-related costs and fees totaling $4.6 million, inclusive of amounts attributable to noncontrolling interests of $2.3 million.

2008 — During 2008, we acquired six investments in properties located in the United States, Finland, France and Germany at a total cost of $125.4 million.

Real Estate Under Construction

2009 —As of September 30, 2009, we consolidated a domestic build-to-suit project that was previously accounted for under the equity method of accounting (Note 6). During 2008, we entered into this domestic build-to-suit project for a total cost of up to $61.2 million that we accounted for under the equity method of accounting as it constituted an ADC equity arrangement (Note 2). Total estimated construction costs for this project were increased to $63.0 million during 2009. The ADC equity arrangement provided for a fixed annual interest rate of 5.8% and was scheduled to mature in April 2010. We were committed to purchase the property at a fixed price upon completion, and the borrower had little or no equity in the transaction. Costs incurred on this project through December 31, 2009 of $61.6 million have been presented as Real estate under construction in the consolidated balance sheet.

Additionally, during 2009, we entered into and completed a domestic expansion project for an existing tenant totaling $4.5 million. Capitalized acquisition-related costs and fees related to this project totaled $0.2 million. Upon completion of this expansion, we sold the property to an affiliate of our tenant for $50.6 million, net of selling costs (Note 17).

2008 — During 2008, we entered into two domestic build-to-suit projects for a total cost of up to $12.2 million, based on estimated construction costs. Costs incurred on these projects through December 31, 2008 of $0.5 million have been presented as Real estate under construction in the consolidated balance sheet.

Notes to Consolidated Financial Statements

Scheduled future minimum rents, exclusive of renewals and expenses paid by tenants, percentage of sales rents and future CPI — based adjustments, under non-cancelable operating leases are as follows (in thousands):

Years ending December 31,
2010		$	160,135
2011			160,640
2012			161,007
2013			161,308
2014			161,713
Thereafter through 2031			1,789,242

There were no percentage rents for operating leases in 2009, 2008 and 2007.

Note 5. Net Investment in Direct Financing Leases

Net investment in direct financing leases is summarized as follows (in thousands):

		December 31,
		2009				2008
Minimum lease payments receivable		$	546,606			$	564,513
Unguaranteed residual value			263,380				259,506
			809,986				824,019
Less: unearned income			(467,931	)			(482,684	)
		$	342,055			$	341,335

See Note 11 for a discussion of impairment charges incurred during 2009 and 2008, respectively.

Scheduled future minimum rents, exclusive of renewals and expenses paid by tenants, percentage of sales rents and future CPI — based adjustments, under non-cancelable direct financing leases are as follows (in thousands):

Years ending December 31,
2010		$	31,261
2011			31,314
2012			31,375
2013			31,429
2014			31,487
Thereafter through 2031			389,740

There were no percentage rents for direct financing leases in 2009, 2008 and 2007.

Note 6. Equity Investments in Real Estate

We own interests in single-tenant net leased properties leased to corporations through noncontrolling interests in (i) partnerships and limited liability companies in which our ownership interests are 50% or less but over which we exercise significant influence, and (ii) as tenants-in-common subject to common control (Note 2). All of the underlying investments are owned with affiliates. We account for these investments under the equity method of accounting (i.e., at cost, increased or decreased by our share of earnings or losses, less distributions, plus fundings).

Our equity investments in real estate included an investment in a mortgage loan (an Acquisition, Development and Construction, or “ADC,” arrangement) where we participated in residual interests through the loan provisions or other contracts and which we concluded was more appropriately treated as a hypothetical investment in real estate. This investment was reflected as part of equity method investments in real estate and our loan position was treated as preference capital to the hypothetical partnership rather than a loan, with no interest income recorded. We acquired the equity interest and consolidated this investment in our financial statements at September 30, 2009. The acquisition of this interest did not have a material impact on our financial position and results of operations.

During 2009, we incurred impairment charges in Income from continuing operations totaling $50.9 million on several of our consolidated investments. Primarily as a result of these impairment charges, our 2009 results reflect a loss from continuing operations before income taxes attributable to CPA^®:16 — Global shareholders. Because of the loss reflected in our 2009 results, we have provided disaggregated summarized financial information for our unconsolidated ventures in the tables below.

Notes to Consolidated Financial Statements

The following table sets forth our ownership interests in our equity investments in real estate and their respective carrying values. The carrying value of these ventures is affected by the timing and nature of distributions (dollars in thousands):

				Ownership				Carrying Value at
				Interest at				December 31,
Lessee		Subsidiary Name(s)		December 31, 2009				2009				2008
Equity Investments in Real Estate:
U-Haul Moving Partners, Inc. and Mercury Partners, LP		UH Storage (DE) LP			31	%		$	33,834			$	34,817
The New York Times Company		620 Eighth NYT (NY) LP & 620 Eighth Lender NYT LP			27	%			33,195				—
Schuler A.G. (a)		Property in Göppingen, Germany (b)			33	%			23,469				22,982
Hellweg Die Profi-Baumarkte GmbH & Co. KG (Hellweg 1) (a)		Wegell GMBH			25	%			18,934				16,058
TietoEnator Plc (a)		Finit (FI) LLC			40	%			8,488				8,385
Police Prefecture, French Government (a) (c)		Tissue SARL			50	%			8,268				13,310
OBI A.G. (a) (c)		Pol Beaver LLC			25	%			6,794				8,829
Pohjola Non-life Insurance Company (a) (c)		Pohj Landlord (Finland) LLC			40	%			6,632				7,696
Frontier Spinning Mills, Inc.		FRO SPIN (NC) LLC			40	%			6,077				15,551
Actebis Peacock GmbH (a)		Tech Landlord (GER) LLC			30	%			5,644				5,833
Actuant Corporation (a)		GB-ACT (GER) LP			50	%			2,758				2,845
Consolidated Systems, Inc.		Property in Columbia, South Carolina (b)			40	%			2,131				2,164
Lindenmaier A.G. (a)		Linden (GER) LLC			33	%			1,569				4,565
Thales S.A. (a)		BBA I Invest SARL			35	%			356				—
									158,149				143,035
ADC Equity Arrangement:
Soho House Beach House LLC		Carey 16 Lending Corp.			N/A				—				42,085
								$	158,149			$	185,120

The New York Times Company

In March 2009, 620 Eighth NYT (NY) LP and 620 Eighth Lender NYT LP completed a net lease financing transaction with respect to a leasehold condominium interest, encompassing approximately 750,000 rentable square feet, in the office headquarters of The New York Times Company for approximately $233.7 million, inclusive of acquisition fees payable to the advisor. We, our advisor and another affiliate, CPA^®:17 — Global, hold 27.25% 17.75% and 55% interests, respectively, in both 620 Eighth NYT (NY) LP and 620 Eighth Lender NYT LP. Our share of the purchase price was approximately $64.2 million, which we funded with our existing cash resources. We account for this investment under the equity method of accounting as we do not have a controlling interest in the entity but exercise significant influence over it. In connection with this investment, which was deemed a direct financing lease, 620 Eighth NYT (NY) LP and 620 Eighth Lender NYT LP capitalized acquisition-related costs and fees totaling $8.7 million. In August 2009, 620 Eighth NYT (NY) LP and 620 Eighth Lender NYT LP obtained mortgage financing on the New York Times property of $119.8 million at an annual interest rate of LIBOR plus 4.75% that has been capped at 8.75% through the use of an interest rate cap. This new financing has a term of five years.

Schuler A.G.

In 2007, we and an affiliate obtained 33% and 67% tenant-in-common interests in a property in Göppingen, Germany leased to Schuler, A.G. for a total cost of $73.8 million.

Notes to Consolidated Financial Statements

Hellweg Die Profi-Baumarkte GmbH & Co. KG

During 2009, Wegell GmbH prepaid $7.4 million of its non-recourse mortgage obligation in exchange for the lender’s agreement to amend certain loan covenants related to the tenant. Wegell GmbH subsequently placed $5.3 million into escrow to be used for an expansion of a property and received additional proceeds of $3.5 million from the same mortgage loan to partially finance the expansion.

OBI A.G.

At December 31, 2009, the carrying value of this investment included our share of the net loss on interest rate swap derivative instruments recognized by the venture during 2009.

Frontier Spinning Mills, Inc.

In 2008, we and an affiliate obtained 40% and 60% interests, respectively, in FRO SPIN (NC) LLC, a domestic venture that leases properties to Frontier Spinning Mills, Inc., at a total cost of $38.9 million. In July 2009, FRO SPIN (NC) LLC obtained mortgage financing of $23.4 million and distributed the proceeds to the venture partners.

Actebis Peacock GmbH

In 2008, we and an affiliate obtained 30% and 70% interests, respectively, in a German venture that leases properties to Actebis Peacock GmbH at a total cost of $69.4 million, including a commitment to construct an expansion for a total cost of up to $11.1 million. The venture obtained non-recourse mortgage financing of $36.1 million, with a fixed annual interest rate of 6.5% and a term of 7 years. The venture also obtained a commitment for additional financing of up to $7.8 million for the purpose of constructing the expansion. No costs had been incurred and no mortgage proceeds had been drawn down in connection with the proposed expansion at December 31, 2009.

Lindenmaier A.G.

In 2007, we and an affiliate obtained 33% and 67% interests, respectively, in Linden (GER) LLC, a German venture that leases properties to Lindenmaier A.G., at a total cost of $30.8 million. Linden (GER) LLC simultaneously obtained mortgage financing of $12.8 million and distributed the proceeds to the venture partners. Amounts are based on the exchange rate of the Euro at the date of acquisition and financing.

In April 2009, Lindenmaier A.G. filed for bankruptcy in Germany. In July 2009, the venture entered into an interim lease agreement with Lindenmaier that expired in February 2010 and was then converted to a month-to-month lease. This interim agreement provides for substantially lower rental income than the original lease. We recognized other-than-temporary impairment charges of $2.7 million and $1.4 million during 2009 and 2008, respectively, in connection with this venture. (Note 11).

Notes to Consolidated Financial Statements

During 2009 and 2008, Linden (GER) LLC incurred impairment charges of $12.3 million and less than $0.1 million to reduce its carrying value in the properties to the properties’ estimated fair value. Other-than-temporary impairment charges on equity investments in real estate are calculated using a different method than impairment charges related to net investments in properties and net investments in direct financing leases, and therefore the other-than-temporary impairment charges recognized by us during 2009 and 2008 are not comparable to the impairment charges recognized by Linden (GER) LLC. See Impairments in Note 2 for an explanation of each method.

Thales S.A.

In July 2009, this venture sold four of its five properties back to the tenant for $46.6 million and recognized a gain on sale of $11.1 million. The proceeds were used to partially repay the existing non-recourse mortgage loan on these properties, which had an outstanding balance of $74.7 million at the date of the sale. The remaining loan balance of $28.1 million is collateralized by the unsold fifth property. We recognized net other-than-temporary impairment charges of $0.9 million and $1.7 million during 2009 and 2008, respectively in connection with this venture (Note 11). At December 31, 2008, our proportionate share of losses at the equity investment level, including impairment charges, was greater than our investment basis, and as such, the carrying value of our equity investment was reduced to zero.

During 2009 and 2008, the venture that owns the Thales, S.A. properties incurred impairment charges of $0.8 million and $35.4 million to reduce its carrying value in several of the properties to their estimated fair value. Other-than-temporary impairment charges recognized by us during 2009 and 2008 are not comparable to the impairment charges recognized by the venture. See Impairments in Note 2 for an explanation of each method.

Soho House Beach House LLC

In 2008, we entered into a domestic build-to-suit project for a total cost of up to $61.2 million that we accounted for under the equity method of accounting as it constituted an ADC equity arrangement (Note 2). Total estimated construction costs were increased to $63.0 million during 2009. The ADC equity arrangement provided for a fixed annual interest rate of 5.8% and was scheduled to mature in April 2010. We were committed to purchase the property at a fixed price upon completion, and the borrower had little or no equity in the transaction. At December 31, 2008, we had funded $37.0 million of our total commitment of $63.0 million. We consolidated this investment in our financial statements from September 30, 2009.

The following tables present summarized balance sheet information for our equity investments in real estate. Amounts provided are the total amounts attributable to the ventures and do not represent our proportionate share (in thousands):

		December 31, 2009
						620 Eighth NYT
						(NY) LP & 620																																Property in
						Eighth Lender								FRO SPIN (NC)				Linden (GER)				Pohj Landlord								UH Storage (DE)								Göppingen,
		Total				NYT LP (d)				Finit (FI) LLC				LLC				LLC				(Finland) LLC				Tissue SARL				LP				Wegell GMBH				Germany				All Others (e)
Assets
Net investments in real estate (a)		$	1,336,512			$	235,608			$	87,261			$	38,809			$	16,965			$	92,431			$	92,398			$	231,202			$	183,588			$	73,868			$	284,382
Intangible assets			109,472				—				8,401				—				—				10,018				14,993				39,457				—				—				36,603
Other assets, net (b)			58,391				6,151				3,130				335				1,089				1,828				1,954				23,442				12,293				442				7,727
Total assets		$	1,504,375			$	241,759			$	98,792			$	39,144			$	18,054			$	104,277			$	109,345			$	294,101			$	195,881			$	74,310			$	328,712
Liabilities and Equity
Debt		$	932,778			$	119,154			$	75,785			$	23,300			$	12,656			$	85,729			$	90,602			$	164,328			$	106,937			$	—			$	254,287
Other liabilities (c)			70,533				2,520				1,421				538				909				2,000				2,571				20,234				14,008				6,108				20,224
Total liabilities			1,003,311				121,674				77,206				23,838				13,565				87,729				93,173				184,562				120,945				6,108				274,511
Partners’/ members’ equity			501,064				120,085				21,586				15,306				4,489				16,548				16,172				109,539				74,936				68,202				54,201
Total liabilities and equity		$	1,504,375			$	241,759			$	98,792			$	39,144			$	18,054			$	104,277			$	109,345			$	294,101			$	195,881			$	74,310			$	328,712

Notes to Consolidated Financial Statements

		December 31, 2008
																																		Property in
										FRO SPIN (NC)				Linden (GER)				Pohj Landlord								UH Storage (DE)								Göppingen,
		Total				Finit (FI) LLC				LLC				LLC				(Finland) LLC				Tissue SARL				LP				Wegell GMBH				Germany				All Others (e)
Assets
Net investments in real estate (a)		$	1,150,415			$	87,825			$	38,866			$	29,136			$	92,851			$	92,710			$	235,930			$	181,261			$	73,254			$	318,582
Intangible assets			125,698				9,437				—				1,122				11,482				16,292				42,108				—				—				45,257
Other assets, net (b)			102,773				1,777				373				739				2,175				9,051				22,066				7,220				14				59,358
Total assets		$	1,378,886			$	99,039			$	39,239			$	30,997			$	106,508			$	118,053			$	300,104			$	188,481			$	73,268			$	423,197
Liabilities and Equity
Debt		$	850,125			$	76,170			$	—			$	12,574			$	85,419			$	89,924			$	168,202			$	113,754			$	—			$	304,082
Other liabilities (c)			61,110				1,442				361				691				1,955				1,855				19,302				11,390				6,434				17,680
Total liabilities			911,235				77,612				361				13,265				87,374				91,779				187,504				125,144				6,434				321,762
Partners’/ members’ equity			467,651				21,427				38,878				17,732				19,134				26,274				112,600				63,337				66,834				101,435
Total liabilities and equity		$	1,378,886			$	99,039			$	39,239			$	30,997			$	106,508			$	118,053			$	300,104			$	188,481			$	73,268			$	423,197