UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-‑K



þ	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, ~~2016~~2017



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: 000-52891

CORPORATE PROPERTY ASSOCIATES 17 – GLOBAL INCORPORATED

(Exact name of registrant as specified in its charter)



Maryland		20-8429087
(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)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Common Stock, Par Value $0.001 Per Share

Common Stock, Par Value $0.001 Per Share

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No þ

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No þ

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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-‑K. þ

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” ~~and~~ “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 ~~Smaller reporting company o~~ (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 no active market for its common stock. Non-affiliates held ~~329~~333,~~735~~696,~~167~~813 shares of common stock at June 30, ~~2016~~2017.

As of March 39, ~~2017~~2018, there were ~~346~~352,~~194~~603,~~072~~437 shares of common stock of registrant outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

The registrant incorporates by reference its definitive Proxy Statement with respect to its ~~2017~~2018 Annual Meeting of Stockholders, to be filed with the Securities and Exchange Commission within 120 days following the end of its fiscal year, into Part III of this Annual Report on Form 10-‑K.

INDEX

		Page No.
PART I
Item 1.	Business	23
Item 1A.	Risk Factors	910
Item 1B.	Unresolved Staff Comments	3130
Item 2.	Properties	31
Item 3.	Legal Proceedings	3231
Item 4.	Mine Safety Disclosures	3231
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	3332
Item 6.	Selected Financial Data	3433
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3534
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	63
Item 8.	Financial Statements and Supplementary Data	66
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	~~131~~134
Item 9A.	Controls and Procedures	~~131~~134
Item 9B.	Other Information	~~131~~134
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	~~132~~135
Item 11.	Executive Compensation	~~132~~135
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	~~132~~135
Item 13.	Certain Relationships and Related Transactions, and Director Independence	~~132~~135
Item 14.	Principal Accounting Fees and Services	~~132~~135
PART IV
Item 15.	Exhibits and Financial Statement Schedules	~~133~~136
Item 16.	Form 10-K Summary	~~135~~138
SIGNATURES		~~136~~139

Forward-Looking Statements

This Annual Report on Form 10-K, or this Report, including Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 7 of Part II 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. ItThese isforward-looking ~~important~~statements include, but are not limited to, ~~note~~statements ~~that~~regarding: tenant credit quality; the general economic outlook; our ~~actual~~corporate ~~results~~strategy; ~~could~~our becapital ~~materially~~structure; ~~different~~our ~~from~~portfolio ~~those~~lease ~~projected~~terms; inour ~~such~~international ~~forward-looking~~exposure ~~statements.~~and ~~You~~acquisition ~~should~~volume, ~~exercise~~including ~~caution~~the ineffects ~~relying~~of onthe ~~forward-looking~~United ~~statements~~Kingdom’s asdecision ~~they~~to ~~involve~~exit ~~known~~the ~~and~~European ~~unknown~~Union; ~~risks,~~our ~~uncertainties,~~expectations about tenant bankruptcies and ~~other~~interest ~~factors~~coverage; statements that ~~may~~we ~~materially~~make ~~affect~~regarding our ~~future~~ability ~~results,~~to ~~performance,~~remain ~~achievements,~~qualified orfor ~~transactions.~~taxation ~~Information~~as ona ~~factors~~real ~~that~~estate ~~could~~investment trust, or REIT; the impact ~~actual~~of ~~results~~recently ~~and~~issued ~~cause~~accounting ~~them~~pronouncements, tothe ~~differ~~recently ~~from~~adopted ~~what~~Tax isCuts ~~anticipated~~and Jobs Act in the ~~forward-looking~~United ~~statements~~States, ~~contained~~and ~~herein~~other isregulatory ~~included~~activity, insuch ~~this~~as ~~Report~~the asGeneral ~~well~~Data asProtection Regulation in ~~our~~the European Union or other ~~filings~~data ~~with~~privacy initiatives; the ~~Securities~~amount and ~~Exchange~~timing ~~Commission,~~of orany ~~the~~future ~~SEC,~~dividends; ~~including~~our ~~but~~existing ~~not~~or ~~limited~~future toleverage ~~those~~and ~~described~~debt inservice ~~Item~~obligations; ~~1A.~~our ~~Risk~~future ~~Factors~~capital ofexpenditure ~~this~~levels; ~~Report.~~our ~~Except~~future asfinancing ~~required~~transactions; byand ~~federal~~our ~~securities~~future ~~laws~~liquidity ~~and~~needs. ~~the~~These ~~rules~~statements ~~and~~are ~~regulations~~based ofon the ~~SEC,~~current weexpectations doof ~~not~~our ~~undertake~~management. It is important to ~~revise~~note orthat ~~update~~our ~~any~~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

CPA:17 – Global 2017 10-K – 1

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 of this 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 consolidated financial statements of the registrant in Part II, Item 8. Financial Statements and Supplementary Data.

CPA®:17 – Global ~~2016~~2017 10-K – 12

PART I

Item 1. Business.

General Development of Business

Overview

Corporate Property Associates 17 – Global Incorporated, or CPA®:17 – Global, and, together with its consolidated subsidiaries, we, us, or our, is a publicly owned, non-traded ~~real estate investment trust, or~~ REIT, that invests in a diversified portfolio of income-producing commercial properties and other real estate-related assets, both domestically and outside the United States. 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 conduct substantially all of our investment activities and own all of our assets through CPA®:17 Limited Partnership, a Delaware limited partnership, which is our Operating Partnership. In addition to being a general partner and a limited partner of the Operating Partnership, we also own a 99.99% capital interest in the Operating Partnership. W. P. Carey Holdings, LLC, or Carey Holdings, also known as the Special General Partner, an indirect subsidiary of our sponsor, W. P. Carey Inc., or WPC, holds the remaining 0.01% special general partner interest in the Operating Partnership.

Our core investment strategy is to acquire, own, and manage a portfolio of commercial real estate properties leased to a diversified group of companies on a single-tenant, net-leased basis. Our net leases generally require the tenant to pay substantially all of the costs associated with operating and maintaining the property, such as maintenance, insurance, taxes, structural repairs, and other operating expenses. Leases of this type are referred to as triple-net leases. We generally seek to include in our leases:


•	clauses providing for mandated rent increases or periodic rent increases over the term of the lease tied to increases in the Consumer Price Index, or CPI, or other similar index for the jurisdiction in which the property is located or, when appropriate, increases tied to the volume of sales at the property;


•	indemnification for environmental and other liabilities;


•	operational or financial covenants of the tenant; and


•	guarantees of lease obligations from parent companies or letters of credit.

We are managed by WPC through certain of its subsidiaries, or collectively, our Advisor. WPC is a publicly traded REIT listed on the New York Stock Exchange under the symbol “WPC.” Pursuant to an advisory agreement, our Advisor provides both strategic and day-to-day management services for us, including capital funding services, investment research and analysis, investment financing and other investment-related services, asset management, disposition of assets, investor relations, and administrative services. Our Advisor also provides office space and other facilities for us. We pay asset management fees and certain transactional fees to our Advisor and also reimburse our Advisor for certain expenses incurred in providing services to us, including expenses associated with personnel provided for administration of our operations. The current advisory agreement ishas ~~scheduled~~a toterm ~~expire~~of onone ~~December~~year ~~31,~~and ~~2017,~~may ~~unless~~be renewed infor ~~accordance~~successive ~~with~~one-year ~~its terms~~periods. AsOur ~~of December 31, 2016, our~~ Advisor also ~~served~~serves in this capacity for Corporate Property Associates 18 – Global Incorporated, or CPA®:18 – Global, a publicly owned, non-traded REIT with an investment strategy similar to ours, which, together with us, is referred to as the CPA® REITs. Our Advisor also currently serves in this capacity for Carey Watermark Investors Incorporated, ~~or CWI 1,~~ and Carey Watermark Investors 2 Incorporated, ~~or CWI 2,~~ which are publicly owned, non-traded REITs that invest in hotel and lodging-related properties, which, together with the CPA® REITs, are referred to as the Managed REITs. WPC also advises Carey ~~Credit Income Fund, or CCIF, a non-traded business development company, and Carey~~ European Student Housing Fund I, L.P., or CESH I, a limited partnership formed for the purpose of developing, owning, and operating student housing properties in Europe, which, together with the Managed REITs, ~~are~~is referred to as the Managed Programs.

We were formed as a Maryland corporation in February 2007. We commenced our initial public offering in November 2007 and our follow-on offering in April 2011. We raised aggregate gross proceeds of approximately $2.9 billion from our initial public offering, which closed in April 2011, and our follow-on offering, which closed in January 2013. From inception through December 31, ~~2016~~2017, we have also received proceeds from our Distribution Reinvestment Plan, or DRIP, of $~~574~~676.0 million. Although we have substantially invested all of the proceeds from our offerings, we intend to continue to use our cash reserves and cash generated from operations to acquire, own, and manage a portfolio of commercial properties leased to a diversified group of companies primarily on a single-tenant, net-leased basis.

CPA®:17 – Global ~~2016~~2017 10-K – 23

Our estimated net asset value per share, or NAV, as of December 31, ~~2015~~2016 was $10.2411. See Significant Developments in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations for more details regarding our NAV.

We have no employees. At December 31, ~~2016~~2017, our Advisor ~~employed~~had ~~281~~207 ~~individuals~~full-time employees who are available to perform services for us under our advisory agreement (Note 3).

Financial Information About Segments

We operate in two reportable business segments: Net Lease and Self Storage. Our Net Lease segment includes our domestic and foreign investments in net-leased properties, whether they are accounted for as operating or direct financing leases. Our Self Storage segment is comprised of our investments in self-storage properties. In addition, we have investments in loans receivable, commercial mortgage-backed securities, or CMBS, one hotel, and certain other properties, which are included in our All Other category. See Note 15 for financial information about our segments and geographic concentrations.

Business Objectives and Strategy

Our objectives are to:


•	provide attractive risk-adjusted returns for our stockholders;


•	generate sufficient cash flow over time to provide investors with increasing distributions;


•	seek investments with potential for capital appreciation; and


•	use leverage to enhance the returns on our investments.

We seek to achieve these objectives by investing in a portfolio of income-producing commercial properties, which are primarily leased to a diversified group of companies on a net-leased basis.

We intend our portfolio to be diversified by property type, geography, tenant, and industry. We are not required to meet any diversification standards and have no specific policies or restrictions regarding the geographic areas where we make investments, the industries in which our tenants or borrowers may conduct business, or the percentage of our capital that we may invest in a particular asset type.

Our Portfolio

At December 31, ~~2016~~2017, our net lease portfolio was comprised of full or partial ownership interests in ~~395~~411 properties, substantially all of which were fully-occupied and triple-net leased to ~~121~~116 tenants, and totaled approximately 4344.4 million square feet ~~on a pro rata basis~~. ~~The~~In ~~remainder~~addition, of our portfolio ~~at that date~~ was comprised of full or majority ownership interests in 38 operating properties, including 37 self-storage properties and ~~a partial ownership interest in~~ one hotel property, for an aggregate of approximately 32.7 million square feet. See Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Portfolio Overview for more information about our portfolio.

Asset Management

Our Advisor is generally responsible for all aspects of our operations, including selecting our investments, formulating and evaluating the terms of each proposed acquisition, arranging for the acquisition of the investment, negotiating the terms of borrowings, managing our day-to-day operations, and arranging for and negotiating sales of assets. With respect to our net-leased investments, asset management functions include entering into new or modified transactions to meet the evolving needs of current tenants, re-leasing properties, credit and real estate risk analysis, building expansions and redevelopments, refinancing debt and selling assets. With respect to our self-storage investments, asset management functions include engaging unaffiliated third parties for management of our investments, active oversight of property managers, credit and real estate risk analysis, refinancing debt, and selling assets.

CPA®:17 – Global ~~2016~~2017 10-K – 34

Our Advisor monitors, on an ongoing basis, compliance by tenants with their lease obligations and other factors that could affect the financial performance of any of our properties. Monitoring involves verifying that each tenant has paid real estate taxes, assessments, and other expenses relating to the properties it occupies and confirming that appropriate insurance coverage is being maintained by the tenant. Our Advisor also utilizes third-party asset managers for certain domestic and international investments. Our Advisor reviews financial statements of our tenants and undertakes physical inspections of the condition and maintenance of our properties. Additionally, our Advisor periodically analyzes each tenant’s financial condition, the industry in which each tenant operates, and each tenant’s relative strength in its industry. With respect to other real estate-related assets such as debentures, mortgage loans, B Notes, and mezzanine loans, asset management operations include evaluating potential borrowers’ creditworthiness, operating history, and capital structure. With respect to any investments in ~~commercial mortgage-backed securities, or~~ CMBS, or other mortgage-related instruments that we may make, our Advisor ~~will~~is be responsible for selecting, acquiring, and facilitating the acquisition or disposition of such investments, including monitoring the portfolio on an ongoing basis. Our Advisor also monitors our portfolio to ensure that investments in equity and debt securities of companies engaged in real estate activities do not require us to register as an “investment company.”

Holding Period

We generally intend to hold each property we invest in for an extended period depending on the type of investment. The determination of whether a particular property should be sold or otherwise disposed of will be made after consideration of relevant factors, including prevailing economic conditions, with a view to achieving maximum capital appreciation for our stockholders or avoiding increases in risk. No assurance can be given that these objectives will be realized.

One of our objectives is ultimately to provide our stockholders with the opportunity to obtain liquidity for their investments in us. We may provide liquidity for our stockholders through sales of assets (either on a portfolio basis or individually), a listing of our shares on a stock exchange, a merger (which may include a merger with one or more of the Managed REITs, WPC or its affiliates), an enhanced redemption program or another transaction approved by our board of directors. We are under no obligation to liquidate our portfolio within any particular period since the precise timing will depend on real estate and financial markets, economic conditions of the areas in which the properties are located, and tax effects on stockholders that may prevail in the future. Furthermore, there can be no assurance that we will be able to consummate a liquidity event. During the quarter ended September 30, 2017, our board of directors formed a special committee of independent directors to begin the process of evaluating possible liquidity alternatives for our shareholders. There can be no assurance as to the form or timing of any liquidity alternative or that any alternative will be pursued at all. We do not intend to discuss the evaluation process unless and until a particular alternative is selected. In the two most recent instances in which stockholders of non-traded REITs managed by our Advisor were provided with liquidity, Corporate Property Associates 15 Incorporated, or CPA®:15, and Corporate Property Associates 16 – Global Incorporated, or CPA®:16 – Global, merged with and into subsidiaries of WPC on September 28, 2012 and January 31, 2014, respectively. Prior to that, the liquidating entity merged with another, later-formed REIT managed by WPC, as with the merger of Corporate Property Associates 14 Incorporated, ~~or CPA®:14,~~ with CPA®:16 – Global on May 2, 2011.

Financing Strategies

Consistent with our investment policies, we use leverage when available on terms we believe are favorable. We will generally borrow in the same currency that is used to pay rent on the property. This enables us to hedge a significant portion of our currency risk on international investments. We, through the subsidiaries we form to make investments, will generally seek to borrow on a non-recourse basis and in amounts that we believe will maximize the return to our stockholders, although we also borrow on a recourse basis at the corporate level. The use of non-recourse mortgage financing may allow us to improve returns to our stockholders and to limit our exposure on any investment to the amount invested. Non-recourse indebtedness means the indebtedness of the borrower or its subsidiaries that is secured only by the assets to which such indebtedness relates without recourse to the borrower or any of its subsidiaries, other than in case of customary carve-outs for which the borrower or its subsidiaries acts as guarantor in connection with such indebtedness, such as fraud, misappropriation, misapplication of funds, environmental conditions, and material misrepresentation. Since non-recourse financing generally restricts the lender’s claim on the assets of the borrower, the lender generally may only take back the asset securing the debt, which protects our other assets. In some cases, particularly with respect to non-U.S. investments, the lenders may require that they have recourse to other assets owned by a subsidiary borrower, in addition to the asset securing the debt. Such recourse generally would not extend to the assets of our other subsidiaries. Lenders typically seek to include change of control provisions in the terms of a loan, making the termination or replacement of our Advisor, or the dissolution of our Advisor, events of default or events requiring the immediate repayment of the full outstanding balance of the loan. While we attempt through negotiations not to include such provisions, lenders may require them. During 2015, we entered into the Senior Credit Facility (Note 10) in order to increase financial flexibility and our range of capital sources. The Senior Credit Facility, which is unsecured, consists of a $200.0 million revolving credit facility, or the Revolver, and a $50.0 million delayed-draw term loan facility, or the Term Loan, and is ~~used for our working capital needs and for new investments, as well as for other general corporate purposes.~~

CPA®:17 – Global ~~2016~~2017 10-K – 45

used for our working capital needs and for new investments, as well as for other general corporate purposes. The Senior Credit Facility is scheduled to mature on August 26, 2018, and may be extended by us for two 12-month periods.

Aggregate borrowings on our portfolio as a whole may not exceed, on average, the lesser of 75% of the total costs of all investments or 300% of our net assets, unless the excess is approved by a majority of the independent directors and disclosed to stockholders in our next quarterly report, along with the reason for the excess. Net assets are our total assets (other than intangibles), valued at cost before deducting depreciation, reserves for bad debts and other non-cash reserves, less total liabilities.

Our charter currently provides that we will not borrow funds from our directors, WPC, our Advisor or any of their respective affiliates unless the transaction is approved by a majority of our directors (including a majority of the independent directors) who do not have an interest in the transaction, as being fair, competitive, and commercially reasonable and not less favorable than those prevailing for loans between unaffiliated third parties under the same circumstances.

Investment Strategies

Long-Term Net-Leased Assets

We invest primarily in income-producing commercial real estate properties that are, upon acquisition, improved or being developed or that are to be developed within a reasonable period after acquisition. ~~Most~~A significant portion of our acquisitions are subject to long-term net leases, which require the tenant to pay substantially all of the costs associated with operating and maintaining the property. In analyzing potential investments, our Advisor reviews various aspects of a transaction, including the tenant and the underlying real estate fundamentals, to determine whether a potential investment and lease can be structured to satisfy our investment criteria. In evaluating net-leased transactions, our Advisor generally considers, among other things, the following aspects of each transaction:

Tenant/Borrower Evaluation — Our Advisor evaluates each potential tenant or borrower for its creditworthiness, typically considering factors such as management experience, industry position and fundamentals, operating history, and capital structure. Our Advisor also rates each asset based on its market, liquidity, and criticality to the tenant’s operations, as well as other factors that may be ~~relevant~~unique to a particular investment. Our Advisor seeks opportunities in which it believes the tenant may have a stable or improving credit profile or credit potential that has not been fully recognized by the market. Whether a prospective tenant or borrower is creditworthy is determined by our Advisor’s investment department and its independent investment committee, as described below. Our Advisor defines creditworthiness as a risk-reward relationship appropriate to its investment strategies, which may or may not coincide with ratings issued by the credit rating agencies. AsOur ~~such,~~Advisor ~~creditworthy~~has ~~does~~a ~~not~~robust ~~mean~~internal credit rating system and may designate a tenant as “implied investment grade,” aseven ~~defined~~if by the credit rating agencies have not made a rating determination.

Our Advisor generally seeks investments in facilities that it believes are critical to a tenant’s current business and that it believes have a low risk of tenant default. Our Advisor rates each asset based on the asset’s market and liquidity and also based on how critical the asset is to the tenant’s operations. Our Advisor also evaluates the credit quality of our tenants utilizing an internal five-point credit rating scale, with one representing the highest credit quality (investment grade or equivalent) and five representing the lowest (bankruptcy or foreclosure). Investment grade ratings are provided by third-party rating agencies, such as Standard & Poor’s Ratings Services or Moody’s Investors Service, although our Advisor may determine that a tenant is equivalent to investment grade even if the credit rating agencies have not made that determination. As of December 31, ~~2016~~2017, we had 12 tenants that were rated investment grade. Ratings for other tenants are generated internally utilizing metrics such as interest coverage and debt-to-earnings before interest, taxes, depreciation, and amortization, or EBITDA. These metrics are computed internally based on financial statements obtained from each tenant on a quarterly basis. Under the terms of our lease agreements, tenants are generally required to provide us with periodic financial statements. As of December 31, ~~2016~~2017, we had ~~109~~103 below-investment grade tenants, with a weighted-average credit rating of 3.24. The aforementioned credit rating data does not include our multi-tenant ~~properties~~ and operating properties.

Properties Critical to Tenant/Borrower Operations — Our Advisor generally focuses on properties that it believes are critical to the ongoing operations of the tenant. Our Advisor believes that these properties generally provide better protection, ~~generally~~particularly ~~as well as~~ in the event of a bankruptcy, since a tenant or /borrower is less likely to risk the loss of a critically important lease or property in a bankruptcy proceeding or otherwise.

~~Diversification~~CPA:17 —– ~~Our~~Global ~~Advisor~~2017 attempts to diversify our portfolio to avoid dependence on any one particular tenant, borrower, collateral type, geographic location, or tenant/borrower industry. By diversifying the portfolio, our Advisor seeks to reduce the adverse effect of a single under10-~~performing~~K ~~investment~~– or a downturn in any particular industry or geographic region. While our Advisor has not endeavored to maintain any particular standard of diversity in our owned portfolio, we believe that it is reasonably well-diversified. Our Advisor also assesses the relative risk of our portfolio on a quarterly basis.6

~~CPA®:17~~Diversification –— ~~Global~~Our ~~2016~~Advisor 10attempts to diversify our portfolio to avoid undue dependence on any one particular tenant, borrower, collateral type, geographic location, or industry. By diversifying the portfolio, our Advisor seeks to reduce the adverse effect of a single under-Kperforming –investment 5or a downturn in any particular industry or geographic region. While our Advisor has not endeavored to maintain any particular standard of diversity in our owned portfolio, we believe that it is reasonably well-diversified. Our Advisor also assesses the relative risk of our portfolio on a quarterly basis.

Lease Terms — Generally, the net-leased properties in which we invest will be leased on a full-recourse basis to the tenants or their affiliates. In addition, our Advisor seeks to include a clause in each lease that provides for increases in rent over the term of the lease. These increases are either fixed (i.e., mandated on specific dates) or tied ~~generally~~ to increases in inflation indices ~~such~~(e.g., as the CPI or other similar ~~index~~indices in the jurisdiction inwhere ~~which~~ the property is located), but may contain caps or other limitations, either on an annual or overall basis. In the case of retail stores and hotels, the lease may provide for participation in gross revenues of the tenant above a stated level, which we refer to as percentage rent. ~~Alternatively, a lease may provide for mandated rental increases on specific dates or other methods.~~

Real Estate Evaluation — Our Advisor reviews and evaluates the physical condition of the property and the market in which it is located. Our Advisor considers a variety of factors, including current market rents, replacement cost, residual valuation, property operating history, demographic characteristics of the location and accessibility, competitive properties, and suitability for re-leasing. Our Advisor obtains third-party environmental and engineering reports and market studies, ifwhen ~~needed~~required. When considering an investment outside the United States, our Advisor will also consider factors particular to ~~the~~a ~~laws~~country ofor ~~foreign~~region, ~~countries~~including geopolitical risk, in addition to the risks normally associated with real property investments.

Transaction Provisions to Enhance and Protect Value — Our Advisor attempts to include provisions in our leases it believes may help to protect our investment from changes in the tenant’s operating and financial characteristics, ofwhich ~~a tenant that~~ may affect the tenant’s ability to satisfy its obligations to us or reduce the value of our investment. Such provisions include covenants requiring our consent tofor ~~specified~~certain ~~tenant activity~~activities, requiring ~~the tenant to provide~~ indemnification protections and/or security deposits, and requiring the tenant to satisfy specific operating tests. Our Advisor may also seek to enhance the likelihood ofthat a tenant’s ~~lease~~will ~~obligations~~satisfy ~~being~~their ~~satisfied~~lease obligations through a ~~guaranty~~letter of ~~obligations~~credit or guaranty from the tenant’s ~~corporate~~ parent or other entity~~, or through a letter of credit~~. ~~This~~Such credit ~~enhancement~~enhancements, if obtained, ~~provides~~provide us with additional financial security. However, in markets where competition for net-leased transactions is strong, some or all of these lease provisions may be difficult to obtain. In addition, in some circumstances, tenants may retain the ~~right~~option to repurchase the property ~~leased~~typically byat the ~~tenant. The option purchase price is generally the~~ greater of the contract purchase price ~~and~~or the fair market value of the property at the time the option is exercised.

Operating Real Estate and Other

Our operating real estate portfolio ~~comprises~~is ~~interests~~comprised inof 37 self-storage properties and one hotel property. As of December 31, ~~2016~~2017, these properties were managed by third parties that receive management fees.

Self-Storage and Hotel Investments — Our Advisor combines a rigorous underwriting process and active oversight of property managers with a goal to generate attractive risk-adjusted returns. We had full ownership interests in 37 self-storage properties and majority ownership of one hotel as of December 31, ~~2016~~2017.

Other Equity Enhancements — Our Advisor may attempt to obtain equity enhancements in connection with transactions. These equity enhancements may involve warrants exercisable at a future time to purchase stock of the tenant or borrower or their parent. If warrants are obtained, and become exercisable, and if the value of the stock subsequently exceeds the exercise price of the warrant, equity enhancements can help us to achieve our goal of increasing investor returns.

CPA:17 – Global 2017 10-K – 7

Other Real Estate-Related Assets

We have acquired or may in the future acquire other real estate assets, including, but not limited to, the following:


•	Opportunistic Investments — These may include short-term net leases, vacant property, land, multi-tenanted property, non-commercial property, and property leased to non-related tenants.


•	Mortgage Loans Collateralized by Commercial Real Properties — We have invested in, and may in the future invest in, commercial mortgages and other commercial real estate interests consistent with the requirements for qualification as a REIT.


•	B Notes — We may purchase from third parties, and may retain from mortgage loans we originate and securitize or sell, subordinated interests referred to as B Notes.

• Mezzanine Loans — We have invested in, and may continue to invest in, mezzanine loans. ~~Investments~~that ~~in mezzanine loans~~ take the form of subordinated loans secured by second mortgages on the underlying property or loans secured by a pledge of the ownership interests in the entity that directly or indirectly owns the property.

CPA®:17 – Global 2016 10-K – 6

•

Commercial Mortgage-Backed Securities — We have invested in, and may in the future invest in, CMBS and other mortgage-related or asset-backed instruments, including CMBS issued or guaranteed by agencies of the U.S. government, non-agency mortgage instruments, and collateralized mortgage obligations that are fully collateralized by a portfolio of mortgages or mortgage-related securities, to the extent consistent with the requirements for qualification as a REIT. In most cases, mortgage-backed securities distribute principal and interest payments on the mortgages to investors. Interest rates on these instruments can be fixed or variable. Some classes of mortgage-backed securities may be entitled to receive mortgage prepayments before other classes do. Therefore, the prepayment risk for a particular instrument may be different than for other mortgage-related securities. We have designated our CMBS investments as securities held to maturity.


•	Equity and Debt Securities of Companies Engaged in Real Estate Activities, including other REITs — We have invested in, and may in the future invest in, equity and debt securities (including common and preferred stock, as well as limited partnership or other interests) of companies engaged in real estate activities.

Transactions with Affiliates

We have entered, and expect in the future to enter, into transactions with our affiliates, including other CPA® REITs and our Advisor or its affiliates, if we believe that doing so is consistent with our investment objectives and we comply with our investment policies and procedures. These transactions typically take the form of equity investments in jointly owned entities, direct purchases of assets, mergers, or other types of transactions. Joint ventures with affiliates of WPC are permitted only if:


•	a majority of our directors (including a majority of our independent directors) not otherwise interested in the transaction approve the allocation of the transaction among the affiliates as being fair and reasonable to us; and


•	the affiliate makes its investment on substantially the same terms and conditions as us.

Investment Decisions

Our Advisor’s investment department, under the oversight of its chief investment officer, is primarily responsible for evaluating, negotiating, and structuring potential investment opportunities for the CPA® REITs and WPC. Our Advisor also has an independent investment committee that provides services to the CPA® REITs, CESH I, and WPC. Before an investment is made on our behalf, the transaction is reviewed by the investment committee. The independent investment committee is not directly involved in originating or negotiating potential investments, but instead functions as a separate and final step in the investment process. Our Advisor places special emphasis on having experienced individuals serve on its investment committee. Subject to limited exceptions, our Advisor generally will not invest in a transaction on our behalf unless it is approved by the investment committee.

The investment committee has developed policies that permit some investments to be made on our behalf without committee approval. Under current policy, certain investments may be approved by either the chairman of the investment committee or the Advisor’s chief investment officer. Additional such delegations may be made in the future, at the discretion of the investment committee.

CPA:17 – Global 2017 10-K – 8

Competition

We face active competition from many sources for investment opportunities in commercial properties net leased to tenants both domestically and internationally. In general, we believe our Advisor’s experience in real estate, credit underwriting, and transaction structuring should allow us to compete effectively for commercial properties and other real estate-related assets. However, competitors may be willing to accept rates of return, lease terms, other transaction terms, or levels of risk that we may find unacceptable.

We may also compete for investment opportunities with WPC, and the other Managed Programs~~, and entities that may in the future be managed by our Advisor~~. Our Advisor has undertaken in the advisory agreement to use its best efforts to present investment opportunities to us and to provide us with a continuing and suitable investment program. Our Advisor follows allocation guidelines set forth in the advisory agreement when allocating investments among us, WPC, the other Managed Programs, and entities that our Advisor may manage in the future. Each quarter, our independent directors review the allocations made by our Advisor during the most recently completed quarter. Compliance with the allocation guidelines is one of the factors that our independent directors expect to consider when deciding whether to renew the advisory agreement each year.

CPA®:17 – Global 2016 10-K – 7

Environmental Matters

We have invested in, and expect to continue to invest in, properties currently or historically used as industrial, manufacturing, and commercial properties. Under various federal, state, and local environmental laws and regulations, current and former owners and operators of property may have liability for the cost of investigating, cleaning up, or disposing of hazardous materials released at, on, under, in, or from the property. These laws typically impose responsibility and liability without regard to whether the owner or operator knew of or was responsible for the presence of hazardous materials or contamination, and liability under these laws is often joint and several. Third parties may also make claims against owners or operators of properties for personal injuries and property damage associated with releases of hazardous materials. As part of our efforts to mitigate these risks, we typically engage third parties to perform assessments of potential environmental risks when evaluating a new acquisition of property, and we frequently require sellers to address them before closing or obtain contractual protection (indemnities, cash reserves, letters of credit, or other instruments) from property sellers, tenants, a tenant’s parent company, or another third party to address known or potential environmental issues. With respect to our hotel and self-storage investments, which are not subject to net-lease arrangements, there is no tenant of the property to provide indemnification, so we may be liable for costs associated with environmental contamination in the event any such circumstances arise after we acquire the property.

Financial Information About Geographic Areas

See Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Portfolio Overview and Note 15 for financial information pertaining to our geographic operations.

Available Information

We will supply to any stockholder, upon written request and without charge, a copy of this Report as filed with the SEC. All filings we make with the SEC, including this Report, our quarterly reports on Form 10-Q, and our current reports on Form 8-K, and any amendments to those reports, are available for free on our website, http://www.cpa17global.com, as soon as reasonably practicable after they are filed with or furnished to the SEC. We are providing our website address solely for the information of investors. We do not intend our website to be an active link or to otherwise incorporate the information contained on our website into this Report or other filings with the SEC. Our SEC filings are available to be read or copied at the SEC’s Public Reference Room at 100 F Street, NE, Washington, D.C. 20549. Information regarding the operation of the Public Reference Room can be obtained by calling the SEC at 1-800-SEC-0330. Our filings can also be obtained for free on the SEC’s website at http://www.sec.gov. Our Code of Business Conduct and Ethics, which applies to all employees, including our chief executive officer and chief financial officer, is available on our website, http://www.cpa17global.com. We intend to make available on our website any future amendments or waivers to our Code of Business Conduct and Ethics within four business days after any such amendments or waivers.

CPA®:17 – Global ~~2016~~2017 10-K – 89

Item 1A. Risk Factors.

Our business, results of operations, financial condition, and ability to pay distributions at the current rate could be materially adversely affected by various risks and uncertainties, including those enumerated below. These risk factors may have affected, and in the future could affect, our actual operating and financial results, and could cause such results to differ materially from those in any forward-looking statements. You should not consider this list exhaustive. New risk factors emerge periodically and we cannot assure you that the factors described below list all risks that may become material to us at any later time.

~~Adverse~~The ~~changes~~price inof ~~general~~shares ~~economic~~being ~~conditions~~offered ~~can~~through ~~negatively~~our ~~affect~~DRIP is determined by our ~~business~~board of directors based upon our NAV from time to time and may not be indicative of the price at which the shares would trade if they were listed on an exchange or actively traded by brokers.

~~Our~~The ~~success~~price isof ~~dependent~~the ~~upon~~shares ~~general~~currently ~~economic~~being ~~conditions~~offered through our DRIP was determined by our board of directors in the ~~United~~exercise ~~States~~of its business judgment based upon our NAV from time to time. The valuation methodologies underlying our estimated NAV involve subjective judgments. Valuations of real properties do not necessarily represent the price at which a willing buyer would purchase our properties; therefore, there can be no assurance that we would realize the values underlying our NAV if we were to sell our assets and indistribute the ~~international~~net ~~geographic~~proceeds ~~areas~~to ~~where~~our astockholders. ~~substantial~~In ~~number~~addition, the values of our ~~investments~~assets and debt are ~~located~~likely to fluctuate over time. ~~Adverse~~This ~~changes~~price inmay ~~economic~~not ~~conditions~~be inindicative of (i) the ~~United~~price ~~States~~at orwhich ~~those~~shares ~~countries~~would trade if they were listed on an exchange or ~~regions~~actively ~~would~~traded ~~likely~~by ~~have~~brokers, (ii) the proceeds that a ~~negative~~stockholder ~~impact~~would onreceive ~~real~~if ~~estate~~we ~~values~~were ~~and,~~liquidated ~~accordingly~~or dissolved, ~~our~~or ~~financial~~(iii) ~~performance~~the ~~and~~value of our ~~ability~~portfolio at the time you were able to ~~pay~~dispose ~~distributions~~of your shares.

The price of shares being offered through our DRIP was determined by our board of directors based upon our NAV and may not be indicative of the price at which the shares would trade if they were listed on an exchange or actively traded by brokers.

The price of the shares currently being offered through our DRIP was determined by our board of directors in the exercise of its business judgment based upon our NAV as of December 31, 2015. The valuation methodologies underlying our estimated NAV involved subjective judgments. Valuations of real properties do not necessarily represent the price at which a willing buyer would purchase our properties; therefore, there can be no assurance that we would realize the values underlying our NAV if we were to sell our assets and distribute the net proceeds to our stockholders. In addition, the values of our assets and debt are likely to fluctuate over time. This price may not be indicative of (i) the price at which shares would trade if they were listed on an exchange or actively traded by brokers, (ii) the proceeds that a stockholder would receive if we were liquidated or dissolved, or (iii) the value of our portfolio at the time you were able to dispose of your shares.

We may be unable to pay or maintain cash distributions or increase distributions over time.

The amount of cash we have available for distribution to stockholders is affected by many factors, such as the performance of our Advisor in selecting investments for us to make, selecting tenants for our properties, and securing financing arrangements; our ability to buy properties; the amount of rental income from our properties; our operating expense levels; existing financing covenants; as well as many other variables. We may not always be in a position to pay distributions to our stockholders and any distributions we do make may not increase over time. Our board of directors, in its sole discretion, will determine on a quarterly basis the amount of cash to be distributed to our stockholders based on a number of considerations, including, but not limited to, our results of operations, cash flow and capital requirements; economic and tax considerations; our borrowing capacity; applicable provisions of the Maryland General Corporation Law; and other factors (including debt covenant restrictions that may impose limitations on cash payments and future acquisitions and divestitures). Our actual results may differ significantly from the assumptions used by our board of directors in establishing the distribution rate to our stockholders. There is also a risk that we may not have sufficient cash from operations to make a distribution required to maintain our REIT status. Consequently, our distribution levels are not guaranteed and may fluctuate.

~~Our~~In the past, our distributions have exceeded, and may in the future exceed, our cash flow from operating activities and our earnings.

Over the life of our company, the regular quarterly cash distributions we pay are expected to be principally sourced from cash flow from operating activities as determined in accordance with U.S. generally accepted accounting principles, or GAAP. ~~However,~~Although wefor ~~have~~the ~~funded~~year 2%ended ofDecember 31, ~~our~~2017 ~~cash~~and ~~distributions~~since toinception, ~~date~~we ~~using~~funded ~~net~~all ~~proceeds~~of these distributions from ~~our~~GAAP ~~public~~cash ~~offerings~~flow ~~and~~from operating activities, there can be no assurance that our GAAP cash flow from operating activities will be sufficient to cover our future distributions. ~~For the year ended December 31, 2016, we covered approximately 95% of our distributions with cash flow from operating activities.~~ If our properties doare not ~~continue~~generating ~~to generate~~ sufficient cash flow or our other expenses require it, we may need to use other sources of funds, such as proceeds from asset sales or borrowings, to fund distributions in order to satisfy REIT requirements. If we fund distributions from borrowings, such financing will incur interest costs and need to be repaid. The portion of our distributions that exceed our earnings and profits may represent a return of capital to our stockholders.

CPA®:17 – Global ~~2016~~2017 10-K – 910

Stockholders’ equity interests may be diluted.

Our stockholders do not have preemptive rights to any shares of common stock issued by us in the future. Therefore, if we (i) sell shares of common stock in the future, including those issued pursuant to our DRIP, (ii) ~~sell securities that are convertible into our common stock, (iii)~~ issue ~~common stock in a private placement to institutional investors, or (iv) issue~~ shares of common stock to our independent directors or to our Advisor and its affiliates for payment of fees in lieu of cash, or (iii) issue additional common stock or other securities that are convertible into our common stock, then existing stockholders and investors that purchased their shares in our initial public offering will experience dilution of their percentage ownership in us. Depending on the terms of such transactions, most notably the offering price per share, which may be less than the price paid per share in our initial public offering, and the value of our properties and other investments, existing stockholders might also experience a dilution in the book value per share of their investment in us.

If we recognize substantial impairment charges on our properties or investments, our net income may be reduced.

We have and may continue to incur substantial impairment charges, which we are required to recognize: (i) whenever we sell a property for less than its carrying value or we determine that the carrying amount of the property is not recoverable and exceeds its fair value; (ii) for direct financing leases, whenever the unguaranteed residual value of the underlying property has declined on an other-than-temporary basis; and (iii) for equity investments, whenever the estimated fair value of the investment’s underlying net assets in comparison with the carrying value of our interest in the investment has declined on an other-than-temporary basis. By their nature, the timing or extent of impairment charges are not predictable. We may incur non-cash impairment charges in the future, which may reduce our net income.

Our board of directors may change our investment policies without stockholder approval, which could alter the nature of your investment.

Our charter requires that our independent directors review our investment policies at least annually to determine that the policies are in the best interest of our stockholders. These policies may change over time. ~~The~~and ~~methods of implementing our investment policies~~ may also vary, as new investment techniques are developed. Except as otherwise provided in our charter, our investment policies, the methods for their implementation, ~~and~~as well as our other objectives, policies, and procedures, may be altered by a majority of our directors (including a majority of the independent directors), without the approval of our stockholders. As a result, the nature of your investment could change without your consent. Material changes in our investment focus will be described in our periodic reports filed with the SEC; however, these reports would typically be filed after changes in our investment focus have been made, and in some cases, several months after such changes. A change in our investment strategy may, among other things, increase our exposure to interest rate risk, default risk, and commercial real property market fluctuations, all of which could materially adversely affect our ability to achieve our investment objectives.

We are not required to meet any diversification standards; therefore, our investments may become subject to concentration risks.

Subject to our intention to maintain our qualification as a REIT, there are no limitations on the number or value of particular types of investments that we may make. We are not required to meet any diversification standards, including geographic diversification standards. Therefore, our investments may become concentrated in type or geographic location, which could subject us to significant concentration risks with potentially adverse effects on our investment objectives.

Our success is dependent on the performance of our Advisor, but the past performance of other programs managed by our Advisor may not be indicative of our success.

Our ability to achieve our investment objectives and to pay distributions is largely dependent upon the performance of our Advisor in the acquisition of investments, the selection of tenants, the determination of any financing arrangements, and the management of our assets. 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 performance of past programs managed by our Advisor may not be indicative of our Advisor’s performance with respect to us. We cannot guarantee that our Advisor will be able to successfully manage and achieve liquidity for us to the extent it has done so for prior programs.

CPA:17 – Global 2017 10-K – 11

We have invested in, and may continue to invest in, assets outside our Advisor’s core expertise and incur losses as a result.

We are not restricted in the types of investments we may make;. weWe have invested in, and may continue to invest in, assets outside our Advisor’s core expertise of long-term, net-leased properties and self-storage. Our Advisor may not be as familiar with the potential risks of investments outside net-leased properties and self-storage. If we continue to invest in assets outside our Advisor’s core expertise, our Advisor’s reduced experience level could result in diminished investment performance, which in turn could adversely affect our revenues, NAV, and distributions to our stockholders.

CPA®:17 – Global 2016 10-K – 10

with the potential risks of investments outside net-leased properties and self-storage. If we continue to invest in assets outside our Advisor’s core expertise, our Advisor’s reduced experience level when evaluating investments outside long-term, net-leased properties could result in diminished investment performance, which in turn could adversely affect our revenues, NAV, and distributions to stockholders.

WPC and our dealer manager are parties to a settlement agreement with the SEC and are subject to a federal court injunction as well as a consent order with the Maryland Division of Securities.

In 2008, WPC and Carey Financial, LLC, or Carey Financial, the dealer manager for our public offerings, settled all matters relating to an investigation by the SEC, including matters relating to payments by certain non-traded REITs managed by our Advisor during 2000-2003 to broker-dealers that distributed their shares, which were alleged by the SEC to be undisclosed underwriting compensation, which WPC and Carey Financial neither admitted nor denied. In connection with implementing the settlement, a federal court injunction was entered against WPC and Carey Financial enjoining them from violating a number of provisions of the federal securities laws. Any further violation of these laws by WPC or Carey Financial could result in civil remedies, including sanctions, fines, and penalties, which may be more severe than if the violation had occurred without the injunction being in place. Additionally, if WPC or Carey Financial breaches the terms of the injunction, the SEC may petition the court to vacate the settlement and restore the SEC’s original action to the active docket for all purposes.

In 2012, CPA®:15, WPC, and Carey Financial settled all matters relating to an investigation by the state of Maryland regarding the sale of unregistered securities of CPA®:15 in 2002 and 2003. Under the consent order, CPA®:15, WPC, and Carey Financial agreed, without admitting or denying liability, to cease and desist from any further violations of selling unregistered securities in Maryland. Contemporaneous with the issuance of the consent order, CPA®:15, WPC, and Carey Financial paid the Maryland Division of Securities a civil penalty of $10,000.

Additional regulatory action, litigation, or governmental proceedings could adversely affect us by, among other things, distracting WPC from its duties to us, resulting in significant monetary damages to WPC, which could adversely affect their ability to perform services for us, or resulting in injunctions or other restrictions on WPC’s ability to act as our Advisor in the United States or in one or more states.

We may be deterred from terminating the advisory agreement because, upon certain termination events, our Operating Partnership must decide whether to exercise its right to repurchase all or a portion of Carey Holdings’ interests.

The termination or resignation of Carey Asset Management Corp. as our Advisor, including by non-renewal of the advisory agreement and replacement with an entity that is not an affiliate of our Advisor, would give our Operating Partnership the right, but not the obligation, to repurchase all or a portion of Carey Holdings’ special general partner interest in our Operating Partnership at a value based on the lesser of: (i) five times the amount of the last completed fiscal year’s special general partner distributions; and (ii) the discounted present value of the estimated future special general partner distributions until April 7, 2021. This repurchase could be prohibitively expensive and require the Operating Partnership to sell assets in order to complete the repurchase. If our Operating Partnership does not exercise its repurchase right and Carey Holdings’ interest is converted into a special limited partnership interest, we might be unable to find another entity that would be willing to act as our Advisor while Carey Holdings owns a significant interest in the Operating Partnership. Even if we do find another entity to act as our Advisor, we may be subject to higher fees than those charged by Carey Asset Management Corp. These considerations could deter us from terminating the advisory agreement.

The repurchase of Carey Holdings’ special general partner interest in our Operating Partnership upon termination of our Advisor may discourage certain business combination transactions.

In the event of a merger or other extraordinary corporate transaction in which our advisory agreement is terminated and an affiliate of WPC does not replace Carey Asset Management Corp. as our Advisor, the Operating Partnership must either repurchase all or a portion of Carey Holdings’ special general partner interest in our Operating Partnership at the value described in the immediately preceding risk factor or obtain Carey Holdings’ consent to the merger. This obligation may deter a transaction in which we are not the surviving entity. This deterrence may limit the opportunity for stockholders to receive a premium for their shares that might otherwise exist if a third party ~~were~~attempted to ~~attempt to~~ acquire us through a merger or other extraordinary corporate transaction.

CPA®:17 – Global 2016 10-K – 11

Change of control provisions under our Senior Credit Facility and the financing arrangements for some of our assets could trigger a default or repayment event.

Under the credit agreement governing our Senior Credit Facility, a default is triggered if a change in control occurs relating to our ownership. A change of control is defined as (i) any group or person becoming the beneficial owner, directly or indirectly, of 35% or more of our equity securities entitled to vote for members of the board of directors on a fully-diluted basis; or (ii) any person or persons acting in concert acquiring, directly or indirectly, a controlling influence over our management or policies, or control over 35% or more of our equity securities entitled to vote for members of the board of directors on a fully-diluted basis. If a change of control occurs and a default is triggered under our credit agreement, our Senior Credit Facility may be terminated and any outstanding balances accelerated to immediate repayment.

In addition, lenders for certain financing arrangements related to our assets may request change of control provisions in their loan documentation that would make the termination or replacement of WPC or its affiliates as our Advisor an event of default or an event triggering the immediate repayment of the full outstanding balance of the loan. If an event of default or a repayment event occurs with respect to any of our loans, our revenues and distributions to our stockholders may be adversely affected.

CPA:17 – Global 2017 10-K – 12

Payment of fees to our Advisor and distributions to our Special General Partner will reduce cash available for investment and distribution.

Our Advisor performs services for us in connection with the selection and acquisition of our investments, the management and leasing of our properties, and the administration of our other investments. Pursuant to the advisory agreement, asset management fees payable to our Advisor may be paid in cash or shares of our common stock at our option, after consultation with our Advisor. If our Advisor receives all or a portion of its fees in cash, we will pay our Advisor substantial cash fees for these services. In addition, our Special General Partner is entitled to certain distributions from our Operating Partnership. The payment of these fees and distributions will reduce the amount of cash available for investments or distribution to our stockholders.

We have limited independence from our Advisor and its affiliates, who may be subject to conflicts of interest.

We delegate our management functions to our Advisor, for which it earns fees pursuant to the advisory agreement. Although at least a majority of our board of directors must be independent, we have limited independence from our Advisor due to the delegation of management functions. As part of its management duties, our Advisor manages our business and selects our investments. Our Advisor and its affiliates have potential conflicts of interest in their dealings with us. Circumstances under which a conflict could arise between us and our Advisor and its affiliates include:

• our Advisor is compensated for certain transactions on our behalf (e.g., acquisitions of investments, ~~leases, sales,~~ and ~~financing~~sales), which may cause our Advisor to engage in transactions that generate higher fees, rather than transactions that are more appropriate or beneficial for our business;


•	agreements between us and our Advisor, including agreements regarding compensation, will not be negotiated on an arm’s-length basis, as would occur if the agreements were with unaffiliated third parties;


•	acquisitions of single assets or portfolios of assets from affiliates (including WPC or the other Managed REITs), subject to our investment policies and procedures, in the form of a direct purchase of assets, a merger, or another type of transaction;


•	competition with WPC and the other entities managed by it for investments, which are resolved by our Advisor (although our Advisor is required to use its best efforts to present a continuing and suitable investment program to us, allocation decisions present conflicts of interest, which may not be resolved in the manner most favorable to our interests);

•

decisions regarding asset sales, which could impact the timing and amount of fees payable to our Advisor, as well as allocations and distributions payable to the Special General Partner pursuant to its special general partner interests (e.g., our Advisor receives asset management fees and may decide not to sell an asset; however, the Special General Partner will be entitled to certain profit allocations and cash distributions based upon sales of assets as a result of its Operating Partnership profits interest);


•	business combination transactions, including mergers with WPC or another Managed REIT;


•	decisions regarding liquidity events, which may entitle our Advisor and its affiliates to receive additional fees and distributions in relation to the liquidations;


•	a recommendation by our Advisor that we declare distributions at a particular rate because our Advisor and Special General Partner may begin collecting subordinated fees once the applicable preferred return rate has been met;

CPA®:17 – Global 2016 10-K – 12


•	disposition fees based on the sale price of assets, as well as interests in disposition proceeds based on net cash proceeds from the sale, exchange, or other disposition of assets, may cause a conflict between our Advisor’s desire to sell an asset and our plans for the asset; and


•	the termination and negotiation of the advisory agreement and other agreements with our Advisor and its affiliates.

Our NAV is computed by our Advisor relying in part on information that our Advisor provides to a third party.

Our NAV is computed by our Advisor relying in part upon an annual third-party appraisal of the fair market value of our real estate and third-party estimates of the fair market value of our debt. Any valuation includes the use of estimates and our valuation may be influenced by the information provided to the third party by our Advisor. Because our NAV is an estimate and can change as interest rate and real estate markets fluctuate, there is no assurance that a stockholder will realize such NAV in connection with any liquidity event.

CPA:17 – Global 2017 10-K – 13

We face competition from our Advisor and its affiliates in the purchase, sale, lease, and operation of properties.

WPC and its affiliates specialize in providing lease financing services to corporations ~~and in sponsoring funds that invest in real estate, such as CPA®:18 – Global, and to a lesser extent, the other Managed Programs~~. WPC and CPA®:18 – Global have investment policies and return objectives that are similar to ours and they, as well as the other Managed Programs, are ~~currently~~ actively seeking ~~opportunities~~investment ~~to invest capital~~opportunities. Therefore, WPC and its affiliates, including ~~the~~CPA:18 ~~other~~– ~~Managed Programs~~Global, ~~and future entities advised by WPC,~~ may compete with us with respect to properties; potential purchasers, sellers, and lessees of properties; and mortgage financing for properties. We do not have a non-competition agreement with WPC or the other Managed Programs. ~~and~~In ~~there~~addition, ~~are~~some ~~few restrictions on WPC’s ability to sponsor or manage funds or other investment vehicles that may compete with us in the future. Some~~ of the ~~entities~~Managed ~~formed~~Programs ~~and managed by WPC~~ may be focused specifically on particular types of investments and receive preference in the allocation of those types of investments.

We face active competition from unrelated parties for the investments we make.

We face active competition for our investments from many sources, including insurance companies, credit companies, pension funds, private individuals, financial institutions, finance companies, investment companies, and other REITs. We also face competition from institutions that provide or arrange for other types of commercial financing through private or public offerings of equity or debt or traditional bank financings. These institutions may accept greater risk or lower returns, allowing them to offer more attractive terms to prospective tenants. In addition, when evaluating acceptable rates of return on our behalf, our Advisor considers a variety of factors, such as the cost of raising capital, the amount of revenue it can earn, and our performance hurdle rate. These factors may limit the number of investments that our Advisor makes on our behalf. Our Advisor believes that the investment community remains risk averse and that the net lease financing market is perceived as a relatively conservative investment vehicle. Accordingly, it expects increased competition for investments, both domestically and internationally. Further capital inflows into our marketplace will place additional pressure on the returns that we can generate from our investments, as well as our Advisor’s willingness and ability to execute transactions. In addition, the majority of our current investments are in single-tenant commercial properties that are subject to triple-net leases. Many factors, including changes in tax laws or accounting rules, may make these types of sale-leaseback transactions less attractive to potential sellers and lessees.

Our Advisor may hire subadvisors without stockholder consent.

Our Advisor has the right to appoint one or more subadvisors with additional expertise in our target asset classes to assist our Advisor with investment decisions and asset management. We do not have control over which subadvisors our Advisor may choose and our Advisor may not have the necessary expertise to effectively monitor the subadvisors’ investment decisions.

If we internalize our management functions, stockholders’ interests could be diluted and we could incur significant self-management costs.

In the future, our board of directors may consider internalizing the functions currently performed for us by our Advisor by, among other methods, acquiring our Advisor. The method by which we could internalize these functions could take many forms. There is no assurance that internalizing our management functions will be beneficial to us and our stockholders. There is also no assurance that the key employees of our Advisor who perform services for us would elect to work directly for us, instead of remaining with our Advisor or another affiliate of WPC. An acquisition of our Advisor could also result in dilution of your interests as a stockholder and could reduce earnings per share. Additionally, we may not realize the perceived benefits, be able to properly integrate a new staff of managers and employees, or be able to effectively replicate the services provided previously by our Advisor. Internalization transactions, including the acquisition of advisors or property managers affiliated with entity sponsors, have also, in some cases, been the subject of litigation. Even if these claims are without merit, we could be forced to spend significant resources defending claims, which would reduce the amount of funds available for us to invest in properties or other investments and to pay distributions. All of these factors could have a material adverse effect on our results of operations, financial condition, and ability to pay distributions.

CPA®:17 – Global ~~2016~~2017 10-K – 1314

~~previously~~We by our Advisor. Internalization transactions, including the acquisition of advisors or property managers affiliated with entity sponsors, have also, in some cases, been the subject of litigation. Even if these claims are without merit, we could be ~~forced~~adversely toaffected ~~spend~~if ~~significant~~our ~~resources~~Advisor ~~defending claims~~sold, ~~which~~transferred ~~would reduce the amount of funds available for us to invest in properties~~ or ~~other~~otherwise ~~investments~~discontinued ~~and~~its toinvestment ~~pay~~management ~~distributions~~business. ~~All of these factors could have a material adverse effect on our results of operations, financial condition, and ability to pay distributions.~~

WeIf WPC were to sell or otherwise transfer its advisory business to another Managed Program, we could be adversely affected ifbecause our Advisor ~~completed~~could anbe ~~internalization~~incentivized ~~with~~to ~~another~~make decisions regarding investment allocation, asset management, liquidity transactions, and other matters that are more favorable to its Managed Program owner than to us. In addition, if WPC discontinued its investment management business entirely, we would have to find a new Advisor, who may not be familiar with our company, may not provide the same level of services as our Advisor, and may charge fees that are higher than the fees we pay to our Advisor, all of which may materially adversely affect our performance and delay or otherwise negatively impact our ability to effect a liquidity event. If we terminate the advisory agreement and repurchase the Special General Partner’s interest in our Operating Partnership, which we would have the right to do in such circumstances, the costs to us could be substantial and we may have difficulty finding a replacement advisor that would perform at a level at least as high as that of our Advisor. As of June 30, 2017, WPC exited non-traded retail fundraising activities and no longer sponsors new investment programs, although it currently expects to continue serving as our Advisor through the end of our life cycle.

If WPC were to sell or otherwise transfer its advisory business to another Managed Program, we could be adversely affected because our Advisor could be incentivized to make decisions regarding investment allocation, asset management, liquidity transactions, and other matters that are more favorable to its Managed Program owner than to us. If we terminate the advisory agreement and repurchase the Special General Partner’s interest in our Operating Partnership, which we would have the right to do in such circumstances, the costs to us could be substantial and we may have difficulty finding a replacement advisor that would perform at a level at least as high as that of our Advisor.

The value of our real estate is subject to fluctuation.

We are subject to all of the general risks associated with the ownership of real estate. While the revenues from our leases are not directly dependent upon the value of the real estate owned, significant declines in real estate values could adversely affect us in many ways, including a decline in the residual values of properties at lease expiration, possible lease abandonments by tenants, and a decline in the attractiveness of triple-net lease transactions to potential sellers. We also face the risk that lease revenue will be insufficient to cover all corporate operating expenses and debt service payments we incur. General risks associated with the ownership of real estate include:


•	adverse changes in general or local economic conditions;


•	changes in the supply of, or demand for, similar or competing properties;


•	changes in interest rates and operating expenses;


•	competition for tenants;


•	changes in market rental rates;


•	inability to lease or sell properties upon termination of existing leases;


•	renewal of leases at lower rental rates;


•	inability to collect rents from tenants due to financial hardship, including bankruptcy;


•	changes in tax, real estate, zoning, or environmental laws that adversely impact the value of real estate;


•	failure to comply with federal, state, and local legal and regulatory requirements, including the Americans with Disabilities Act or fire and life-safety requirements;


•	uninsured property liability, property damage, or casualty losses;


•	unexpected expenditures for capital improvements or to bring properties into compliance with applicable federal, state, and local laws;


•	exposure to environmental losses;


•	changes in foreign exchange rates; and


•	force majeure and other factors beyond the control of our management.

In addition, the initial appraisals that we obtain on our properties are generally based on the value of the properties when they are leased. If the leases on the properties terminate, the value of the properties may fall significantly below the appraised value, which could result in impairment charges on the properties.

Our ability to fully control the management of our net-leased properties may be limited.

The tenants or managers of net-leased properties are responsible for maintenance and other day-to-day management of the properties. If a property is not adequately maintained in accordance with the terms of the applicable lease, we may incur expenses for deferred maintenance expenditures or other liabilities once the property becomes free of the lease. While our leases generally provide for recourse against the tenant in these instances, a bankrupt or financially-troubled tenant may be more likely to defer maintenance and it may be more difficult to enforce remedies against such a tenant. In addition, to the extent tenants are unable to successfully conduct their operations, their ability to pay rent may be adversely affected. Although we endeavor to monitor, on an ongoing basis, compliance by tenants with their lease obligations and other factors that could affect the financial performance of our properties, such monitoring may not always ascertain or forestall deterioration either in the condition of a property or the financial circumstances of a tenant.

CPA®:17 – Global ~~2016~~2017 10-K – 1415

Our participation in joint ventures creates additional risk.

~~From~~We ~~time~~have ~~to time~~participated, weand may in the future participate, in joint ventures to purchase assets together with ~~the other~~ CPA®: ~~REITs~~18 ~~and/or~~- Global, WPC and its other affiliates, and/or ~~may do so as well with~~ third parties. There are additional risks involved in joint venture transactions, including acquisitions, development and construction of real estate, or ADC Arrangements, that we determine are similar to joint venture transactions. As a co-investor in a joint venture, we would not be in a position to exercise sole decision-making authority relating to the property, the joint venture, or our investment partner. In addition, there is the potential that our joint venture partner may become bankrupt or that we may have diverging or inconsistent economic or business interests. These diverging interests could, among other things, expose us to liabilities in the joint venture in excess of our proportionate share of those liabilities. The partition rights of each owner in a jointly owned property could reduce the value of each portion of the divided property. In addition, the fiduciary obligation that our Advisor or members of our board of directors may owe to our partner in an affiliated transaction may make it more difficult for us to enforce our rights.

We may have difficulty selling or re-leasing our properties and this lack of liquidity may limit our ability to quickly change our portfolio in response to changes in economic or other conditions.

Real estate investments are generally less liquid than many other financial assets, which may limit our ability to quickly adjust our portfolio in response to changes in economic or other conditions. Some of our net leases involve properties that are designed for the particular needs of a tenant. With these properties, we may be required to renovate or make rent concessions in order to lease the property to another tenant. In addition, if we are forced to sell these properties, we may have difficulty selling it to a party other than the tenant due to the property’s unique design. These and other limitations may affect our ability to sell properties without adversely affecting returns to our stockholders.

The recent changes in both U.S. and international accounting standards regarding operating leases may make the leasing of facilities less attractive to our potential tenants, which could reduce overall demand for our leasing services.

A lease is classified by a tenant as a capital lease if the significant risks and rewards of ownership are considered to reside with the tenant. This situation is generally considered to be met if, among other things, the non-cancelable lease term is more than 75% of the useful life of the asset or if the present value of the minimum lease payments equals 90% or more of the leased property’s fair value at lease inception. Under capital lease accounting for a tenant, both the leased asset and liability are reflected on their balance sheet. If the lease does not meet any of the criteria for a capital lease, the lease is considered an operating lease by the tenant and the obligation does not appear on the tenant’s balance sheet; rather, the contractual future minimum payment obligations are only disclosed in the footnotes thereto. Thus, entering into an operating lease can appear to enhance a tenant’s balance sheet in comparison to direct ownership. In the first quarter of 2016, both the Financial Accounting Standards Board, ~~or FASB,~~ and the International Accounting Standards Board, ~~or IASB,~~ issued new standards on lease accounting ~~which~~that bring most leases, both existing and new, ononto the balance sheet for lessees. For lessors, however, the accounting remains largely unchanged and the distinction between operating and finance leases ~~is retained~~continues. The new standards also replace existing sale-leaseback guidance with new models applicable to both lessees and lessors. These changes ~~would~~ impact most companies but are particularly applicable to those that are significant users of real estate. The standards ~~outline~~outlined a completely new model for accounting by lessees, whereby their rights and obligations under most leases, existing and new, would be capitalized and recorded on the balance sheet. For some companies, the new accounting guidance may influence whether ~~or not~~, or the extent to which, they ~~may~~will enter into the type of sale-leaseback transactions in which we specialize.

Our operations could be restricted if we become subject to the Investment Company Act and your investment return, if any, may be reduced if we are required to register as an investment company under the Investment Company Act.

A person will generally be deemed to be an “investment company” for purposes of the Investment Company Act of 1940, or the Investment Company Act, if:


•	it is, or holds itself out as being, engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting, or trading in securities; or


•	it owns or proposes to acquire investment securities having a value exceeding 40% of the value of its total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis, which is referred to as the “40% test.”

CPA®:17 – Global ~~2016~~2017 10-K – 1516

We believe that we and our subsidiaries are engaged primarily in the business of acquiring and owning interests in real estate. We do not hold ourselves out as being engaged primarily in the business of investing, reinvesting, or trading in securities. Accordingly, we do not believe that we are an investment company as defined under the Investment Company Act. If we were required to register as an investment company, we would have to comply with a variety of substantive requirements under the Investment Company Act that impose, among other things, (i) limitations on our capital structure (including our ability to use leverage), (ii) restrictions on specified investments, (iii) prohibitions on proposed transactions with “affiliated persons” (as defined in the Investment Company Act), and (iv) compliance with reporting, record keeping, voting, proxy disclosure, and other rules and regulations that would significantly increase our operating expenses.

Securities issued by majority-owned subsidiaries, such as our operating partnership, are excepted from the term “investment securities” for purposes of the 40% test described in the second bullet point above because they are not themselves investment companies and do not rely on the exception from the definition of investment company set forth in Section 3(c)(1) or Section 3(c)(7) of the Investment Company Act, hence our operating partnership generally expects to satisfy the 40% test. However, depending on the nature of its investments, our operating partnership may rely upon the exclusion from registration as an investment company pursuant to Section 3(c)(5)(C) of the Investment Company Act, which is available for entities “primarily engaged in the business of purchasing or otherwise acquiring mortgages and other liens on and interests in real estate.” This exclusion generally requires that at least 55% of the operating partnership’s assets must be comprised of qualifying real estate assets and at least 80% of its portfolio must be comprised of qualifying real estate assets and real estate-related assets. Qualifying assets for this purpose include mortgage loans and other assets, including certain mezzanine loans and B notes, that the SEC staff in various no-action letters has affirmed can be treated as qualifying assets. We treat the following as real estate-related assets: CMBS, debt and equity securities of companies primarily engaged in real estate businesses, and securities issued by pass-through entities of which substantially all the assets consist of qualifying assets and/or real estate-related assets. We rely on guidance published by the SEC staff or on our analyses of guidance published with respect to other types of assets to determine which assets are qualifying real estate assets and real estate-related assets. In August 2011, the SEC issued a concept release soliciting public comment on a wide range of issues relating to Section (3)(c)(5)(C), including the nature of the assets that qualify for purposes of the exemption and whether mortgage REITs should be regulated in a manner similar to investment companies. There can be no assurance that the laws and regulations governing the Investment Company Act status of REITs, including the guidance of the SEC or its staff regarding this exclusion, will not change in a manner that adversely affects our operations. To the extent that the SEC staff publishes new or different guidance with respect to these matters, we may be required to adjust our strategy accordingly. In addition, we may be limited in our ability to make certain investments and these limitations could result in the operating partnership holding assets we might wish to sell or selling assets we might wish to hold.

Because the operating partnership is not an investment company and does not rely on the exclusion from investment company registration provided by Section 3(c)(1) or 3(c)(7), and the operating partnership is our majority-owned subsidiary, our interests in the operating partnership do not constitute investment securities for purposes of the 40% test. Our interest in the operating partnership is our only material asset; therefore, we believe that we satisfy the 40% test.

To maintain compliance with an Investment Company Act exemption or exclusion, we may be unable to sell assets we would otherwise want to sell and may need to sell assets we would otherwise wish to retain. In addition, we may have to acquire additional income or loss generating assets that we might not otherwise have acquired, or may have to forego opportunities to acquire interests in companies that we would otherwise want to acquire and that would be important to our investment strategy. If we were required to register as an investment company, we would be prohibited from engaging in our business as currently contemplated because the Investment Company Act imposes significant limitations on leverage. In addition, we would have to seek to restructure the advisory agreement because the compensation that it contemplates would not comply with the Investment Company Act. If we fail to comply with the Investment Company Act, criminal and civil actions could be brought against us, our contracts could be unenforceable unless a court were to require enforcement, and a court could appoint a receiver to take control of us and liquidate our business.

CPA®:17 – Global ~~2016~~2017 10-K – 1617

We use derivative financial instruments to hedge against interest rate and currency fluctuations, which could reduce the overall return on our investments.

We use derivative financial instruments to hedge exposures to changes in interest rates and currency rates. These instruments involve risk, such as the risk that counterparties may fail to perform under the terms of the derivative contract or that such arrangements may not be effective in reducing our exposure to interest rate changes. In addition, the use of such instruments may reduce the overall return on our investments. These instruments may also generate income that may not be treated as qualifying REIT income for purposes of the 75% or 95% REIT income test. See “Because the REIT provisions of the Internal Revenue Code limit our ability to hedge effectively, the cost of our hedging may increase, and we may incur tax liabilities” below.

Because we invest in properties located outside the United States, we are exposed to additional risks.

We have invested, and may continue to invest in, properties located outside the United States. At December 31, ~~2016~~2017, our directly owned real estate properties located outside of the United States represented 3446% of consolidated contractual minimum annualized base rent, or ABR. These investments may be affected by factors particular to the local jurisdiction where the property is located and may expose us to additional risks, including:


•	enactment of laws relating to the foreign ownership of property (including expropriation of investments), or laws and regulations relating to our ability to repatriate invested capital, profits, or cash and cash equivalents back to the United States;


•	legal systems where the ability to enforce contractual rights and remedies may be more limited than under U.S. law;

• difficulty in complying with conflicting obligations in various jurisdictions and the burden of complying with a wide variety of foreign laws, which may be more stringent than U.S. laws (including land use, zoning, and environmental laws) including the General Data Protection Regulation in the European Union that becomes effective on May 25, 2018;

• tax requirements vary by country and existing foreign tax laws and interpretations may change (e.g., the on-going implementation of the European Union’s Anti-Tax Avoidance Directive), which may result in additional taxes on our international investments;


•	changes in operating expenses, including real estate and other tax rates, in particular countries;


•	adverse market conditions caused by changes in national or local economic or political conditions;


•	changing laws or governmental rules and policies; and


•	changes in relative interest rates and the availability, cost, and terms of mortgage funds resulting from varying national economic policies.

In addition, the lack of publicly available information in certain jurisdictions in accordance with GAAP could impair our ability to analyze transactions and may cause us to forego an investment opportunity. It may also impair our ability to receive timely and accurate financial information from tenants necessary to meet our reporting obligations to financial institutions or governmental and regulatory agencies. Certain of these risks may be greater in emerging markets and less developed countries. Further, our Advisor’s expertise to date has primarily been in the United States and certain countries in Europe and Asia. Our Advisor has less experience in other international markets and may not be as familiar with the potential risks to our investments in these areas, which could cause us to incur losses as a result.

Our Advisor may engage third-party asset managers in international jurisdictions to monitor compliance with legal requirements and lending agreements with respect to properties we own. Failure to comply with applicable requirements may expose us or our operating subsidiaries to additional liabilities.

Economic conditions and regulatory changes leading up to and following the United Kingdom’s ~~potential~~ exit from the European Union could have a material adverse effect on our business and results of operations.

Following a referendum ~~on June 23, 2016,~~ in which voters in the United Kingdom approved an exit from the European Union, iton ~~was~~March ~~expected~~29, ~~that~~2017, the ~~British~~United ~~government~~Kingdom ~~would~~invoked ~~initiate~~Article a50 of the Treaty on European Union and initiated the process to leave the European Union (a process commonly referred to as “Brexit”). OnGiven ~~January 24, 2017,~~ the ~~Supreme~~ongoing ~~Court~~negotiations ~~of the United Kingdom ruled that Parliamentary approval will be required~~ to ~~give~~determine the ~~Article~~terms 50of ~~Notice that will start~~ the United Kingdom’s ~~withdrawal~~future ~~process.~~relationship Wewith ~~cannot~~the ~~predict~~European ~~when~~Union, orwe cannot predict how the ~~referendum~~Brexit ~~may~~process will be implemented, ~~if at all,~~ and are continuing to assess the potential impact, if any, of ~~the~~these ~~referendum~~events on our operations, financial condition, and results of operations.

CPA®:17 – Global ~~2016~~2017 10-K – 1718

If the referendum is passed into law, negotiations would commence to determine the future terms of the United Kingdom’s relationship with the European Union, including the terms of trade between the United Kingdom and the European Union. The announcement of Brexit caused significant volatility in global stock markets and currency exchange rate fluctuations ~~that resulted in the strengthening of the U~~.S. ~~dollar against foreign currencies in which we conduct business.~~ As described elsewhere in this Report, we own real estate in foreign jurisdictions, including the United Kingdom and ~~other~~ European countries, and we translate revenue denominated in foreign currency into U.S. dollars for our financial statements. During periods of a strengthening U.S. dollar, our reported international lease revenue is reduced because foreign currencies translate into fewer U.S. dollars.

The longer-term effects of Brexit will depend on ~~any~~the agreements that the United Kingdom makes to retain access to European Union markets, either during athe transitional period or more permanently. The real estate industry faces substantial uncertainty regarding the impact of ~~the potential exit of the United Kingdom from the European Union~~Brexit. Adverse consequences could include, ~~and~~but are not limited to: global economic uncertainty and deterioration, volatility in currency exchange rates, adverse changes in regulation of the real estate industry, disruptions to the markets we invest in and the tax jurisdictions we operate in (which may adversely impact tax benefits or liabilities in these or other jurisdictions), and/or negative impacts on the operations and financial conditions of our tenants. In addition, Brexit could lead to legal uncertainty and potentially divergent national laws and regulations as the United Kingdom determines which European Union laws to replace or replicate. Any of these effects of Brexit, among others, could have a material negative impact on our operations, financial condition and results of operations.

Fluctuations in exchange rates may adversely affect our results and our NAV.

We are subject to potential fluctuations in exchange rates between foreign currencies and the U.S. dollar (our principal foreign currency exposures are to the euro and, to a lesser extent, the British pound sterling, the Japanese yen, and the Norwegian krone). We attempt to mitigate a portion of the currency fluctuation risk by financing our properties in the local currency denominations, although there can be no assurance that this will be effective. Since we have historically placed both our debt obligations and tenants’ rental obligations to us in the same currency, our results of our foreign operations are adversely affected by a stronger U.S. dollar relative to foreign currencies (i.e., absent other considerations, a stronger U.S. dollar will reduce both our revenues and our expenses), which may in turn adversely affect our NAV.

Because we use debt to finance investments, our cash flow could be adversely affected.

Most of our investments were made by borrowing a portion of the total investment and securing the loan with a mortgage on the property. We generally borrow on a non-recourse basis to limit our exposure on any property to the amount of equity invested in the property. If we are unable to make our debt payments as required, a lender could foreclose on the property or properties securing its debt. Additionally, lenders for our international mortgage loan transactions typically incorporate various covenants and other provisions (including loan to value ratio, debt service coverage ratio, and material adverse changes in the borrower’s or tenant’s business) that can cause a technical loan default. Accordingly, if the real estate value declines or the tenant defaults, the lender would have the right to foreclose on its security. If any of these events were to occur, it could cause us to lose part or all of our investment, which could reduce the value of our portfolio and revenues available for distribution to our stockholders.

Some of our financing may also require us to make a balloon payment at maturity. Our ability to make such balloon payments will depend upon our ability to refinance the obligation, invest additional equity, or sell the underlying property. When a balloon payment is due, however, we may be unable to refinance the balloon payment on terms as favorable as the original loan, make the payment with existing cash or cash resources, or sell the property at a price sufficient to cover the payment. Our ability to accomplish these goals will be affected by various factors existing at the relevant time, such as the state of national and regional economies, local real estate conditions, available mortgage or interest rates, availability of credit, our equity in the mortgaged properties, our financial condition, the operating history of the mortgaged properties, and tax laws. A refinancing or sale could affect the rate of return to stockholders and the projected disposition timing of our assets.

CPA®:17 – Global ~~2016~~2017 10-K – 1819

Our level of indebtedness and the limitations imposed on us by our debt agreements could have significant adverse consequences.

Our consolidated indebtedness as of December 31, ~~2016~~2017 was approximately $2.10 billion, representing a leverage ratio (total debt less cash to EBITDA) of approximately 46.31. This consolidated indebtedness was comprised of (i) $21.08 billion in ~~non-recourse~~ mortgages and (ii) $49101.89 million outstanding under our Senior Credit Facility. Our level of indebtedness and the limitations imposed by our debt agreements (including the credit agreement for our Senior Credit Facility), could have significant adverse consequences, including the following:


•	it may increase our vulnerability to general adverse economic conditions and limit our flexibility in planning for, or reacting to, changes in our business and industry;


•	we may be required to use a substantial portion of our cash flow from operations for the payment of principal and interest on indebtedness, thereby reducing our ability to fund working capital, acquisitions, capital expenditures, and general corporate requirements;


•	we may be at a disadvantage compared to our competitors with comparatively less indebtedness;


•	it could cause us to violate restrictive covenants in our debt agreements, which would entitle lenders and other debtholders to accelerate the maturity of such debt;


•	debt service requirements and financial covenants relating to our indebtedness may limit our ability to maintain our REIT qualification;


•	we may be unable to hedge our debt; counterparties may fail to honor their obligations under our hedge agreements; our hedge agreements may not effectively protect us from interest rate or currency fluctuation risk; and we will be exposed to existing, and potentially volatile, interest or currency exchange rates upon the expiration of our hedge agreements;


•	because a portion of our debt bears interest at variable rates, increases in interest rates could materially increase our interest expense;


•	we may be forced to dispose of one or more of our properties, possibly on disadvantageous terms, in order to service our debt or if we fail to meet our debt service obligations, in whole or in part;


•	upon any default on our secured indebtedness, lenders may foreclose on the properties or our interests in the entities that own the properties securing such indebtedness and receive an assignment of rents and leases; and


•	we may be unable to raise additional funds as needed or on favorable terms, which could, among other things, adversely affect our ability to capitalize upon acquisition opportunities or meet operational needs.

If any one of these events were to occur, our business, financial condition, liquidity, results of operations, earnings, and prospects, as well as our ability to satisfy all of our debt obligations (including those under our Senior Credit Facility or similar debt that we may incur in the future), could be materially and adversely affected. Furthermore, foreclosures could create taxable income without accompanying cash proceeds, a circumstance that could hinder our ability to meet the REIT distribution requirements imposed by the Internal Revenue Code.

Because most of our properties are occupied by a single tenant, our success is materially dependent upon their financial stability.

Most of our properties are occupied by a single tenant; therefore, the success of our investments is materially dependent on the financial stability of these tenants. Revenues from several of our tenants/guarantors constitute a significant percentage of our revenues. For the year ended December 31, ~~2016~~2017, our five largest tenants/guarantors represented approximately 3533% of our total consolidated revenue. Lease payment defaults by tenants could negatively impact our net income and reduce the amounts available for distribution to our stockholders. As some of our tenants may not have a recognized credit rating, these tenants may have a higher risk of lease defaults than tenants with a recognized credit rating. In addition, the bankruptcy or default of a tenant could cause the loss of lease payments as well as an increase in the costs incurred to carry the property until it can be re-leased or sold. We have had, and may in the future have, tenants file for bankruptcy protection. In the event of a default, we may experience delays in enforcing our rights as landlord and may incur substantial costs in protecting our investment and re-leasing our property. If a lease is terminated, there is no assurance that we will be able to re-lease the property for the rent previously received or sell the property without incurring a loss.

CPA®:17 – Global ~~2016~~2017 10-K – 1920

The bankruptcy or insolvency of tenants or borrowers may cause a reduction in our revenue and an increase in our expenses.

Bankruptcy or insolvency of a tenant or borrower could cause: the loss of lease or interest and principal payments, an increase in the costs incurred to carry the asset, litigation, a reduction in the value of our shares, and/or a decrease in amounts available for distribution to our stockholders. Under U.S. bankruptcy law, a tenant that is the subject of bankruptcy proceedings has the option of assuming or rejecting any unexpired lease. If the tenant rejects the lease, any resulting claim we have for breach of the lease (excluding collateral securing the claim) will be treated as a general unsecured claim. The maximum claim will be capped at the amount owed for unpaid rent prior to the bankruptcy (unrelated to the termination), plus the greater of one year’s lease payments or 15% of the remaining lease payments payable under the lease (but no more than three years’ lease payments). In addition, due to the long-term nature of our leases and, in some cases, terms providing for the repurchase of a property by the tenant, a bankruptcy court could recharacterize a net-leased transaction as a secured lending transaction. If that were to occur, we would not be treated as the owner of the property, but we might have rights as a secured creditor. Those rights would not include a right to compel the tenant to timely perform its obligations under the lease but may instead entitle us to “adequate protection,” a bankruptcy concept that applies to protect against a decrease in the value of the property if the value of the property is less than the balance owed to us.

Insolvency laws outside the United States may not be as favorable to reorganization or the protection of a debtor’s rights as in the United States. Our right to terminate a lease for default may be more likely to be enforced in foreign jurisdictions where a debtor/tenant or its insolvency representative lacks the right to force the continuation of a lease without our consent. Nonetheless, such laws may permit a tenant or an appointed insolvency representative to terminate a lease if it so chooses.

In addition, in circumstances where the bankruptcy laws of the United States are considered to be more favorable to debtors and/or their reorganization, entities that are not ordinarily perceived as U.S. entities may seek to take advantage of U.S. bankruptcy laws (an entity would be eligible to be a debtor under the U.S. bankruptcy laws if it had a domicile (state of incorporation or registration), place of business, or assets in the United States). If a tenant became a debtor under U.S. bankruptcy laws, it would then have the option of assuming or rejecting any unexpired lease. As a general matter, after the commencement of bankruptcy proceedings and prior to assumption or rejection of an expired lease, U.S. bankruptcy laws provide that, until such unexpired lease is assumed or rejected, the tenant or its trustee must perform the tenant’s obligations under the lease in a timely manner. However, under certain circumstances, the time period for performance of such obligations may be extended by an order of the bankruptcy court. We and certain of the other CPA® programs previously managed by our Advisor have had tenants file for bankruptcy protection and have been involved in bankruptcy-related litigation (including with several international tenants). Historically, four of the seventeen CPA® programs managed by our Advisor temporarily reduced the rate of distributions to their investors as a result of adverse developments involving tenants. Highly leveraged tenants that experience downturns in their operating results due to adverse changes to their business or economic conditions may have a higher possibility of filing for bankruptcy or insolvency.

Similarly, if a borrower under one of our loan transactions declares bankruptcy, there may not be sufficient funds to satisfy its payment obligations to us, which may adversely affect our revenue and distributions to our stockholders. The mortgage loans that we may invest in, as well as the mortgage loans underlying the CMBS in which we have invested and may continue to invest in, may also be subject to delinquency, foreclosure, and loss, which could result in losses to us.

We may incur costs to finish build-to-suit properties.

We have in the past acquired, and may in the future acquire undeveloped land or partially developed buildings in order to construct build-to-suit facilities for a prospective tenant. The primary risks of build-to-suit projects are the potential for failing to meet an agreed-upon delivery schedule and cost-overruns, which may, among other things, cause total project costs to exceed the original budget and may depress our NAV until the projects come online. While some prospective tenants will bear these risks, we may be required to bear these risks in other instances, which means that (i) we may have to advance funds to cover cost-overruns that we would not be able to recover through increased rent payments or (ii) that we may experience delays in the project that delay commencement of rent. We will attempt to minimize these risks through guaranteed maximum price contracts, review of contractor financials, and completing plans and specifications prior to commencement of construction. The incurrence of the additional costs described above or any non-occupancy by a prospective tenant upon completion may reduce the project’s and our portfolio’s returns or result in losses, which may adversely affect our NAV.

CPA®:17 – Global ~~2016~~2017 10-K – 2021

We are subject to risks posed by fluctuating demand and significant competition in the self-storage industry.

Our self-storage facilities are subject to the operating risks common to the self-storage industry. These risks include, but are not limited to, the following:


•	decreases in demand for rental spaces in a particular locale;


•	changes in supply of similar or competing self-storage facilities in an area;


•	changes in market rental rates; and


•	rent defaults by customers.

Our self-storage facilities compete with other self-storage facilities in their geographic markets. As a result of competition, the self-storage facilities could experience a decrease in occupancy levels and rental rates, which would decrease our cash available for distribution. We compete in operations and for acquisition opportunities with companies that have substantial financial resources. Competition may reduce the number of suitable acquisition opportunities offered to us and increase the bargaining power of property owners seeking to sell. The self-storage industry has at times experienced overbuilding in response to perceived increases in demand. A recurrence of overbuilding may cause our self-storage properties to experience a decrease in occupancy levels, limit their ability to increase rents, and compel them to offer discounts.

A decrease in demand for self-storage space would likely have an adverse effect on revenues from our operating portfolio.

A decrease in the demand for self-storage space would likely have an adverse effect on revenues from our operating portfolio. Demand for self-storage space has been and could be adversely affected by weakness in national, regional, and local economies; changes in supply of, or demand for, similar or competing self-storage facilities in an area; and the excess amount of self-storage space in a particular market. To the extent that any of these conditions occur, they are likely to affect market rents for self-storage space, which could cause a decrease in our revenues. For the year ended December 31, ~~2016~~2017, revenue generated from our self-storage investments represented approximately 108% of total revenue.

We depend on the abilities of the property managers of our self-storage facilities.

We contract with independent property managers to operate our self-storage facilities on a day-to-day basis. Although we consult with the property managers with respect to strategic business plans, we may be limited, depending on the terms of the applicable management agreement, in our ability to direct the actions of the independent property managers, particularly with respect to daily operations. Thus, even if we believe that our self-storage facilities are being operated inefficiently or in a manner that does not result in satisfactory occupancy rates or operating profits, we may not have sufficient rights under a particular management agreement to force the property manager to change its method of operation. We can only seek redress if a property manager violates the terms of the applicable management agreement, and then only to the extent of the remedies provided in the agreement. We are, therefore, substantially dependent on the ability of the independent property managers to successfully operate our self-storage facilities. Some of our management agreements may have lengthy terms, may not be terminable by us before the agreement’s expiration and may require the payment of termination fees. In the event that we are able to and do replace any of our property managers, we may experience significant disruptions at the self-storage facilities, which may adversely affect our results of operations.

Short-term leases may expose us to the effects of declining market rent.

Certain types of the properties we own and may acquire, such as self-storage ~~and multi-family~~ properties, typically have short-term leases (generally one year or less) with tenants. There is no assurance that we will be able to renew these leases as they expire or attract replacement tenants on comparable terms, if at all.

Potential liability for environmental matters could adversely affect our financial condition.

Our properties are currently invested, and we expect to continue to invest, in real properties historically used for industrial, manufacturing, and other commercial purposes, and some of our tenants may handle hazardous or toxic substances, generate hazardous wastes, or discharge regulated pollutants to the environment. We therefore may own properties that have known or potential environmental contamination as a result of historical or ongoing operations. Buildings and structures on the properties we purchase may have known or suspected asbestos-containing building materials. We may invest in properties located in countries that have adopted laws or observe environmental management standards that are less stringent than those generally followed in the United States, which may pose a greater risk that releases of hazardous or toxic substances have occurred.

CPA®:17 – Global ~~2016~~2017 10-K – 2122

Leasing properties to tenants that engage in these activities, and owning properties historically and currently used for industrial, manufacturing, and commercial purposes, will cause us to be subject to the risk of liabilities under environmental laws. Some of these laws could impose the following on us:


•	responsibility and liability for the costs of investigation and removal (including at appropriate disposal facilities) or remediation of hazardous or toxic substances in, on, or migrating from our real property, generally without regard to our knowledge of, or responsibility for, the presence of these contaminants;


•	liability for claims by third parties based on damages to natural resources or property, personal injuries, or costs of removal or remediation of hazardous or toxic substances in, on, or migrating from our property; and


•	responsibility for managing asbestos-containing building materials and third-party claims for exposure to those materials.

Our costs of investigation, remediation, or removal of hazardous or toxic substances, or for third-party claims for damages, may be substantial and could exceed the amounts estimated and recorded within our consolidated financial statements. The presence of hazardous or toxic substances on one of our properties, or the failure to properly remediate a contaminated property, could (i) give rise to a lien in favor of the government for costs it may incur to address the contamination, or (ii) otherwise adversely affect our ability to sell or lease the property or to borrow using the property as collateral. In addition, environmental liabilities, or costs or operating limitations imposed on a tenant by environmental laws, could affect its ability to make rental payments to us. And although we endeavor to avoid doing so, we may be required, in connection with any future divestitures of property, to provide buyers with indemnification against potential environmental liabilities. With respect to our self-storage investments, where there is no tenant to provide indemnification under a net-lease arrangement, we may be liable for costs associated with environmental contamination in the event any such circumstances arise after we acquire the property.

We and our independent property operators ~~will~~ rely on information technology in our operations, and any material failure, inadequacy, interruption, or security failure of that technology could harm our business.

We and our independent property operators ~~will~~ rely on information technology networks and systems, including the Internet, to process, transmit, and store electronic information, and to manage or support a variety of business processes, including financial transactions and records, personal identifying information, ~~reservations,~~ billing, and operating data. We ~~will~~ purchase some of our information technology from third-party vendors and we ~~will~~ rely on commercially available systems, software, tools, and monitoring to provide security for processing, transmission, and storage of confidential ~~customer~~ information (e.~~g.,~~ ~~individually identifiable information, including information relating to financial accounts).~~ It is possible that our safety and security measures will not be able to prevent improper system functions, damage, or the improper access or disclosure of personally identifiable information. Security breaches, including physical or electronic break-ins, computer viruses, attacks by hackers, and similar breaches, can create system disruptions, shutdowns, or unauthorized disclosure of confidential information. Any failure to maintain proper function, security, and availability of our information systems could interrupt our operations, damage our reputation, subject us to liability claims or regulatory penalties, and could have a material adverse effect on our business, financial condition, and results of operations.

The occurrence of cyber incidents to our Advisor, or a deficiency in our Advisor’s cyber security, could negatively impact our business by causing a disruption to our operations, a compromise or corruption of our confidential information, and/or damage to our business relationships, all of which could negatively impact our financial results.

A cyber incident is considered to be any adverse event that threatens the confidentiality, integrity, or availability of information resources. More specifically, a cyber incident could be (i) an intentional attack, which could include gaining unauthorized access to systems to disrupt operations, corrupt data, or steal confidential information; or (ii) an unintentional accident or error. As our Advisor’s reliance on technology has increased, so have the risks posed to our Advisor’s systems, both internal and outsourced. Our Advisor may also store or come into contact with sensitive information and data. If, our Advisor or ~~their~~its partners fail to comply with applicable privacy or data security laws in handling this information, including the new General Data Protection Regulation in the European Union, we could face significant legal and financial exposure to claims of governmental agencies and parties whose privacy is compromised. The three primary risks that could directly result from the occurrence of a cyber incident include operational interruption, damage to our relationship with our tenants, and private data exposure. We and our Advisor maintain insurance intended to cover some of these risks, but it may not be sufficient to cover the losses from any future breaches of our Advisor’s systems. Our Advisor has implemented processes, procedures, and controls to help mitigate these risks, but these measures, as well as our and our Advisor’s increased awareness of a risk of a cyber incident, do not guarantee that our financial results will not be negatively impacted by such an incident.

CPA®:17 – Global ~~2016~~2017 10-K – 2223

The mortgage loans in which we may invest and the mortgage loans underlying the CMBS in which we have invested, and may continue to invest in, may be subject to delinquency, foreclosure, and loss, which could result in losses to us.

The ability of a borrower to repay a loan secured by an income-producing property is typically dependent upon the successful operation of the property, rather than the existence of independent income or assets of the borrower. If the net operating income of the property is reduced, the borrower’s ability to repay the loan may be impaired. The net operating income of an income-producing property can be affected by the risks particular to real estate described above, as well as, among other things:

• tenant mix;

• success of tenant businesses;

• property management decisions;

• property location and condition;

• competition from comparable types of properties;

• changes in specific industry segments;

• declines in regional or local real estate values, or rental or occupancy rates; and

• increases in interest rates, real estate tax rates, and other operating expenses.

In the event of a default under a mortgage loan (or any financing lease or net lease that is recharacterized as a mortgage loan) held directly by us, we will bear a risk of loss of principal to the extent of any deficiency between the value of the collateral and the principal and accrued interest of the mortgage loan, which could have a material adverse effect on our ability to achieve our investment objectives. In the event of the bankruptcy of a mortgage loan borrower (or any tenant under a financing lease or a net lease that is recharacterized as a mortgage loan), the mortgage loan (or any financing lease or net lease that is recharacterized as a mortgage loan) for that borrower will be deemed to be secured only to the extent of the value of the underlying collateral at the time of bankruptcy (as determined by the bankruptcy court) and the lien securing the mortgage loan will be subject to the avoidance powers of the bankruptcy trustee or debtor-in-possession to the extent the lien is unenforceable under state law. Foreclosure of a mortgage loan (or any financing lease or net lease that is recharacterized as a mortgage loan) can be an expensive and lengthy process that could have a substantial negative effect on our anticipated return on the foreclosed mortgage loan.

The B Notes, C Notes, subordinate mortgage notes and participation interests in mortgage loans in which we have invested, and may continue to invest in, may be subject to risks relating to the structure and terms of the transactions, as well as subordination in bankruptcy, and there may not be sufficient funds or assets remaining to satisfy the subordinate notes, which may result in losses to us.

We have invested in, and may continue to invest in, B Notes, C Notes, subordinate mortgage notes and participation interests in mortgage loans, to the extent consistent with our investment guidelines and the rules applicable to REITs. These investments are subordinate to first mortgages on commercial real estate properties and are secured by subordinate rights to the commercial real estate properties or by equity interests in the commercial entity. A B Note is a mortgage loan typically (i) secured by a first mortgage on a single large commercial property or group of related properties and (ii) subordinated to an A Note secured by the same first mortgage on the same collateral. B Notes (including C Notes, which are junior to B Notes) reflect similar credit risks to comparably rated CMBS, but are typically secured by a single property and so reflect the increased risks associated with a single property compared to a pool of properties. B Notes are also less liquid than CMBS, thus we may be unable to dispose of underperforming or non-performing investments. The higher risks associated with our subordinate position in B Note investments could subject us to increased risk of losses.

If a borrower defaults or declares bankruptcy, there may not be sufficient funds or assets remaining to satisfy the subordinate notes in which we may have invested after senior obligations are met. And since each transaction is privately negotiated, B Notes, C Notes, and subordinate mortgage notes can vary in their structural characteristics and lender rights and we cannot predict the terms of each investment. Our right to control the default or bankruptcy process following a default will vary from transaction to transaction. The subordinate real estate-related debt we may invest in may not give us the right to demand foreclosure. Furthermore, the presence of intercreditor agreements may limit our ability to amend our loan documents, assign our loans, accept prepayments, exercise our remedies, or control decisions made in bankruptcy proceedings relating to borrowers. Bankruptcy and borrower litigation can significantly increase the time needed for us to acquire underlying collateral in the event of a default, during which time the collateral may decline in value. In addition, there are significant costs and delays associated with the foreclosure process.

CPA®:17 – Global 2016 10-K – 23

The Internal Revenue Service has also issued restrictive guidance as to when a loan secured by equity in an entity will be treated as a qualifying REIT asset. Failure to comply with such guidance could jeopardize our ability to continue to qualify as a REIT.

Interest rate fluctuations and changes in prepayment rates could reduce our ability to generate income on our investments in commercial mortgage loans.

The yield on our investments in commercial mortgage loans may be sensitive to changes in prevailing interest rates and prepayment rates. Therefore, changes in interest rates may affect our net interest income, which is the difference between the interest income we earn on our interest-earning investments and the interest expense we incur in financing these investments. We will often price loans at a spread to either U.S. Treasury obligations, swaps, or the London Interbank Offered Rate. A decrease in these indexes may lower the yield on our investments. Conversely, if these indexes rise materially, borrowers may become delinquent or default on the high-leverage loans we occasionally target. As discussed below with respect to mortgage loans underlying CMBS, when a borrower prepays a mortgage loan more quickly than we expect, our expected return on the investment generally will be adversely affected.

We may invest in subordinate CMBS, which are subject to a greater risk of loss than more senior securities.

We may invest in a variety of subordinate CMBS, to the extent consistent with our investment guidelines and the rules applicable to REITs. The ability of a borrower to make payments on a loan underlying these securities is dependent primarily upon the successful operation of the property, rather than the existence of independent income or assets of the borrower. In the event of default and the exhaustion of any equity support, reserve fund, letter of credit, and any classes of securities junior to those in which we invest, we may not be able to recover our full investment in the securities.

The expense of (i) enforcing the underlying mortgage loans (including litigation expenses), (ii) protecting the properties securing the mortgage loans and the lien on the mortgaged properties, and, (iii) if such expenses are advanced by the servicer of the mortgage loans, interest on such advances, will all be allocated to junior securities prior to more senior classes of securities issued in the securitization. Prior to reducing distributions to more senior securities, distributions to more junior securities may also be reduced by payments of compensation to any servicer engaged to enforce a defaulted mortgage loan. Such expenses and servicing compensation may be substantial; thus, in the event of a default or loss on one or more mortgage loans contained in a securitization, we may not be able to recover our investment.

Investment in non-conforming and non-investment grade loans may involve increased risk of loss.

We may acquire or originate certain loans that do not conform to conventional loan criteria applied by traditional lenders and that are not rated or are rated below investment grade (i.e., lower than Baa3 for investments rated by Moody’s Investors Service and BBB- or below for Standard & Poor’s Ratings Services). The non-investment grade ratings for these loans typically result from the overall leverage of the loans, the lack of a strong operating history for the properties underlying the loans, the borrowers’ credit history, the properties’ underlying cash flow, or other factors. As a result, these loans have a higher risk of default and loss than conventional loans. Any loss we incur may reduce distributions to our stockholders. There are no limits on the percentage of unrated or non-investment grade assets we may hold in our portfolio.

Investments in mezzanine loans involve greater risks of loss than senior loans secured by income producing properties.

We may continue to invest in mezzanine loans, which take the form of subordinated loans secured by second mortgages on the underlying property or loans secured by a pledge of the ownership interests in the entity that directly or indirectly owns the property. These types of investments involve a higher degree of risk than a senior mortgage loan because the investment may become unsecured as a result of foreclosure by the senior lender. If the entity providing the pledge of its ownership interests as security declares bankruptcy, we may not have full recourse to the assets of the property-owning entity or the assets of the entity may not be sufficient to satisfy our mezzanine loan. If a borrower defaults on our mezzanine loan or debt senior to our loan, or in the event of a borrower bankruptcy, our mezzanine loan will be satisfied only after the senior debt is paid in full. As a result, we may not recover some or all of our investment, which could result in losses. In addition, mezzanine loans may have higher loan-to-value ratios than conventional mortgage loans, resulting in less equity in the property and increasing the risk of loss of principal.

CPA®:17 – Global 2016 10-K – 24

We have invested, and may continue to invest, in debt securities which are subject to specific risks relating to the particular issuer of securities and to the general risks of investing in subordinated real estate securities.

Debt securities are generally unsecured and may also be subordinated to other obligations of the issuer. We may also invest in debt securities that are rated below investment grade. As a result, our investments in debt securities are subject to the specific risks described above with respect to mortgage loans and mortgage-backed securities, as well as the following general risks:

• risk of delinquency and foreclosure, including the risk of loss in such events;

• the dependence upon the successful operation of, and net income from, real property;

• general risks associated with interests in real property;

• additional risks presented by certain types and/or uses of commercial property;

• limited liquidity in the secondary trading market;

• substantial market price volatility resulting from changes in prevailing interest rates;

• subordination to the prior claims of banks and other senior lenders to the issuer;

• the operation of mandatory sinking fund or call/redemption provisions during periods of declining interest rates that could cause the issuer to reinvest premature redemption proceeds in lower yielding assets;

• the possibility that earnings of the debt security issuer may be insufficient to meet its debt service; and

• the declining creditworthiness and potential for insolvency of debt issuers during periods of rising interest rates and economic downturn.

These risks may adversely affect the value of outstanding debt securities and the ability of debt issuers to repay principal and interest.

Investments in loans collateralized by non-real estate assets create additional risk and may adversely affect our REIT qualification.

We may invest in secured corporate loans, which are loans collateralized by real property, personal property connected to real property (i.e., fixtures), and/or personal property, on which another lender may hold a first priority lien. If a default occurs, the value of the collateral may not be sufficient to repay all of the lenders that have an interest in the collateral. Our rights in bankruptcy will be different for these loans than typical net lease transactions. To the extent the loans are only collateralized by personal property or the value of the real estate collateral is less than the aggregate amount of our loans and equal or higher-priority loans secured by the real estate collateral, that portion of the loan will not be considered a “real estate asset” for purposes of the 75% REIT asset test. Also, income from that portion of such loans will not qualify under the 75% REIT income test for REIT qualification.

Investments in securities of REITs, real estate operating companies, and companies with significant real estate assets will expose us to many of the same general risks associated with direct real property ownership.

Investments we may make in other REITs, real estate operating companies, and companies with significant real estate assets, directly or indirectly through other real estate funds, will be subject to many of the same general risks associated with direct real property ownership. In particular, equity REITs may be affected by changes in the value of the underlying properties, while mortgage REITs may be affected by the quality of any credit extended. Since these REIT investments are securities, however, they may also be exposed to market risk and price volatility due to changes in financial market conditions and the other changes discussed below.

The value of the equity securities of companies engaged in real estate activities that we may invest in could be volatile and may decline.

The value of equity securities of companies engaged in real estate activities, including those of REITs, fluctuates in response to issuer, political, market, and economic developments. In the short term, equity prices can fluctuate dramatically in response to these developments. Different parts of the market and types of equity securities can react in divergent ways to these developments and they can affect a single issuer; multiple issuers within an industry, economic sector, or geographic region; or the market as a whole. These fluctuations in value could result in significant gains or losses being reported in our financial statements because we will be required to periodically mark such investments to market.

The real estate industry is sensitive to economic downturns. The value of equity securities of companies engaged in real estate activities can be adversely affected by changes in real estate values and rental income, property taxes, interest rates, and tax and regulatory requirements. In addition, the value of a REIT’s equity securities can depend on the structure and amount of cash

CPA®:17 – Global 2016 10-K – 25

flow generated by the REIT. It is possible that our investments in securities may decline in value even though the obligor on the securities is not in default of its obligations to us.

The lack of an active public trading market for our shares, combined with the ownership limitation on our shares, may discourage a takeover and make it difficult for stockholders to sell shares quickly or at all.

There is no active public trading market for our shares and we do not expect one to develop. Moreover, we are not required to complete a liquidity event by a specified date. To assist us in meeting the REIT qualification rules, among other things, our charter also prohibits the ownership by one person or an affiliated group of (i) more than 9.8% in value of our shares of stock of any class or series (including common shares or any preferred shares) or (ii) more than 9.8% in value or number, whichever is more restrictive, of our outstanding shares of common stock, unless exempted by our board of directors. This ownership limitation may discourage third parties from making a potentially attractive tender offer for your shares, thereby inhibiting a change of control in us. In addition, you should not rely on our redemption plan as a method to sell shares promptly because it includes numerous restrictions that limit your ability to sell your shares to us and our board of directors may amend, suspend, or terminate the plan without advance notice. In particular, the redemption plan provides that we may redeem shares only if we have sufficient funds available for redemption and to the extent the total number of shares for which redemption is requested in any quarter, together with the aggregate number of shares redeemed in the preceding three fiscal quarters, does not exceed 5% of the total number of our shares outstanding as of the last day of the immediately preceding fiscal quarter. Given these limitations, it may be difficult for investors to sell their shares promptly or at all. In addition, the price received for any shares sold prior to a liquidity event is likely to be less than the proportionate value of the real estate we own. Investor suitability standards imposed by certain states may also make it more difficult for investors to sell their shares to someone in those states. As a result, our shares should only be purchased as a long-term investment.

We do not operate our hotel investment and, as a result, do not have complete control over the implementation of our strategic decisions.

In order for us to satisfy certain REIT qualification rules, we cannot directly operate the hotel that we own. Instead, our taxable REIT subsidiary, or TRS, engages an independent management company to serve as the property manager for our hotel. The management company operating the hotel makes and implements strategic business decisions, such as decisions with respect to the repositioning of the franchise, food and beverage operations, and other similar decisions. Decisions made by the management company operating the hotel may not be in the best interests of the hotel or us. Accordingly, we cannot assure you that the management company operating our hotel will operate it in a manner that is in our best interests.

Conflicts of interest may arise between holders of our common stock and holders of partnership interests in our Operating Partnership.

Our directors and officers have duties to us and our stockholders under Maryland law in connection with their management of us. At the same time, our Operating Partnership was formed in Delaware and we, as general partner, have duties under Delaware law to our Operating Partnership and ~~the~~any other limited partners in connection with our management of our Operating Partnership. Our duties as general partner of our Operating Partnership may come into conflict with the duties of our directors and officers to us and our stockholders.

Under Delaware law, a general partner of a Delaware limited partnership owes its limited partners the duties of good faith and fair dealing. Other duties, including fiduciary duties, may be modified or eliminated in the partnership’s partnership agreement. The partnership agreement of our Operating Partnership provides that, for so long as we own a controlling interest in our Operating Partnership, any conflict that cannot be resolved in a manner not adverse to either our stockholders or the limited partners will be resolved in favor of our stockholders. The provisions of Delaware law that allow the fiduciary duties of a general partner to be modified by a partnership agreement have not been tested in a court of law, and we have not obtained an opinion of counsel covering the provisions set forth in the partnership agreement that purport to waive or restrict our fiduciary duties.

In addition, the partnership agreement expressly limits our liability by providing that we and our officers, directors, agents, employees, and designees will not be liable or accountable to our Operating Partnership for losses sustained, liabilities incurred, or benefits not derived if we or our officers, directors, agents, employees, or designees, as the case may be, acted in good faith. Furthermore, our Operating Partnership is required to indemnify us and our officers, directors, agents, employees, and designees to the extent permitted by applicable law from, and against, any and all claims arising from operations of our Operating Partnership, unless it is established that: (i) the act or omission was committed in bad faith, was fraudulent, or was the result of active and deliberate dishonesty; (ii) the indemnified party actually received an improper personal benefit in money, property, or services; or (iii) in the case of a criminal proceeding, the indemnified person had reasonable cause to believe that the act or omission was unlawful. These limitations on liability do not supersede the indemnification provisions of our charter.

CPA®:17 – Global ~~2016~~2017 10-K – 2624

money, property, or services; or (iii) in the case of a criminal proceeding, the indemnified person had reasonable cause to believe that the act or omission was unlawful. These limitations on liability do not supersede the indemnification provisions of our charter.

Maryland law could restrict a change in control, which could have the effect of inhibiting a change in control even if a change in control were in our stockholders’ interest.

Provisions of Maryland law applicable to us prohibit business combinations with:


•	any person who beneficially owns 10% or more of the voting power of our outstanding voting stock, referred to as an interested stockholder;


•	an affiliate or associate who, at any time within the two-year period prior to the date in question, was the beneficial owner of 10% or more of the voting power of our outstanding stock, also referred to as an interested stockholder; or


•	an affiliate of an interested stockholder.

These prohibitions last for five years after the most recent date on which the interested stockholder became an interested stockholder. Thereafter, any business combination must be recommended by our board of directors and approved by the affirmative vote of at least 80% of the votes entitled to be cast by holders of our outstanding voting stock and two-thirds of the votes entitled to be cast by holders of our voting stock (other than voting stock held by the interested stockholder or by an affiliate or associate of the interested stockholder). These requirements could have the effect of inhibiting a change in control even if a change in control were in our stockholders’ interest. These provisions of Maryland law do not apply, however, to business combinations that are approved or exempted by our board of directors prior to the time that someone becomes an interested stockholder. In addition, a person is not an interested stockholder if the board of directors approved in advance the transaction by which he or she otherwise would have become an interested stockholder. However, in approving a transaction, the board of directors may provide that its approval is subject to compliance, at or after the time of approval, with any terms and conditions determined by the board.

Our charter permits our board of directors to issue stock with terms that may subordinate the rights of the holders of our current common stock or discourage a third party from acquiring us.

Our board of directors may determine that it is in our best interest to classify or reclassify any unissued stock and establish the preferences, conversion or other rights, voting powers, restrictions, limitations as to distributions, qualifications, and terms or conditions of redemption of any such stock. Thus, our board of directors could authorize the issuance of such stock with terms and conditions that could subordinate the rights of the holders of our common stock or have the effect of delaying, deferring, or preventing a change in control of us, including an extraordinary transaction (such as a merger, tender offer, or sale of all or substantially all of our assets) that might provide a premium price for holders of our common stock. However, the issuance of preferred stock must also be approved by a majority of independent directors not otherwise interested in the transaction, who will have access at our expense to our legal counsel or to independent legal counsel. In addition, the board of directors, with the approval of a majority of the entire board and without any action by the stockholders, may amend our charter from time to time to increase or decrease the aggregate number of shares or the number of shares of any class or series that we have authority to issue. If our board of directors determines to take any such action, it will do so in accordance with the duties it owes to holders of our common stock.

Risks Related to REIT Structure

While we believe that we are properly organized as a REIT in accordance with applicable law, we cannot guarantee that the Internal Revenue Service will find that we have qualified as a REIT.

We believe that we are organized in conformity with the requirements for qualification as a REIT under the Internal Revenue Code beginning with our 2007 taxable year and that our current and anticipated investments and plan of operation will enable us to meet and continue to meet the requirements for qualification and taxation as a REIT. Investors should be aware, however, that the Internal Revenue Service or any court could take a position different from our own. Given the highly complex nature of the rules governing REITs, the ongoing importance of factual determinations, and the possibility of future changes in our circumstances, no assurance can be given that we will qualify as a REIT for any particular year.

~~Furthermore,~~CPA:17 ~~our~~– ~~qualification~~Global ~~and~~2017 ~~taxation~~10-K as– a REIT will depend on our satisfaction of certain asset, income, organizational, distribution, stockholder ownership, and other requirements on a continuing basis. Our ability to satisfy the quarterly asset tests under applicable Internal Revenue Code provisions and Treasury Regulations will depend in part upon our board of directors’ 25

~~CPA®:17~~Furthermore, –our ~~Global~~qualification ~~2016~~and ~~10-K~~taxation –as 27a REIT will depend on our satisfaction of certain asset, income, organizational, distribution, stockholder ownership, and other requirements on a continuing basis. Our ability to satisfy the quarterly asset tests under applicable Internal Revenue Code provisions and Treasury Regulations will depend in part upon our board of directors’ good faith analysis of the fair market values of our assets, some of which are not susceptible to a precise determination. Our compliance with the REIT income and quarterly asset requirements also depends upon our ability to successfully manage the composition of our income and assets on an ongoing basis. While we believe that we will satisfy these tests, we cannot guarantee that this will be the case on a continuing basis.

good faith analysis of the fair market values of our assets, some of which are not susceptible to a precise determination. Our compliance with the REIT income and quarterly asset requirements also depends upon our ability to successfully manage the composition of our income and assets on an ongoing basis. While we believe that we will satisfy these tests, we cannot guarantee that this will be the case on a continuing basis.

The Internal Revenue Service may treat sale-leaseback transactions as loans, which could jeopardize our REIT qualification.

The Internal Revenue Service may take the position that specific sale-leaseback transactions that we treat as true leases are not true leases for U.S. federal income tax purposes but are, instead, financing arrangements or loans. If a sale-leaseback transaction were so recharacterized, we might fail to satisfy the qualification requirements applicable to REITs.

If we fail to remain qualified as a REIT, we would be subject to federal income tax at corporate income tax rates and would not be able to deduct distributions to stockholders when computing our taxable income.

If, in any taxable year, we fail to qualify for taxation as a REIT and are not entitled to relief under the Internal Revenue Code, we will:


•	not be allowed a deduction for distributions to stockholders in computing our taxable income;

• be subject to federal and state income tax, including any applicable alternative minimum tax for taxable years ending prior to January 1, 2018, on our taxable income at regular corporate rates; and


•	be barred from qualifying as a REIT for the four taxable years following the year when we were disqualified.

Any such corporate tax liability could be substantial and would reduce the amount of cash available for distributions to our stockholders, which in turn could have an adverse impact on the value of our common stock. This adverse impact could last for five or more years because, unless we are entitled to relief under certain statutory provisions, we will be taxed as a corporation beginning the year in which the failure occurs and for the following four years.

If we fail to qualify for taxation as a REIT, we may need to borrow funds or liquidate some investments to pay the additional tax liability. Were this to occur, funds available for investment would be reduced. REIT qualification involves the application of highly technical and complex provisions of the Internal Revenue Code to our operations, as well as various factual determinations concerning matters and circumstances not entirely within our control. There are limited judicial or administrative interpretations of these provisions. Although we plan to continue to operate in a manner consistent with the REIT qualification rules, we cannot assure you that we will qualify in a given year or remain so qualified.

If we fail to make required distributions, we may be subject to federal corporate income tax.

We intend to declare regular quarterly distributions, the amount of which will be determined, and is subject to adjustment, by our board of directors. To continue to qualify and be taxed as a REIT, we will generally be required to distribute at least 90% of our REIT taxable income (determined without regard to the dividends-paid deduction and excluding net capital gain) each year to our stockholders. Generally, we expect to distribute all, or substantially all, of our REIT taxable income. If our cash available for distribution falls short of our estimates, we may be unable to maintain the proposed quarterly distributions that approximate our taxable income and we may fail to qualify for taxation as a REIT. In addition, our cash flows from operations may be insufficient to fund required distributions as a result of differences in timing between the actual receipt of income and the recognition of income for federal income tax purposes or the effect of nondeductible expenditures (e.g. capital expenditures, payments of compensation for which Section 162(m) of the Internal Revenue Code denies a deduction, the creation of reserves, or required debt service or amortization payments). To the extent we satisfy the 90% distribution requirement, but distribute less than 100% of our REIT taxable income, we will be subject to federal corporate income tax on our undistributed taxable income. We will also be subject to a 4.0% nondeductible excise tax if the actual amount that we pay out to our stockholders for a calendar year is less than a minimum amount specified under the Internal Revenue Code. In addition, in order to continue to qualify as a REIT, any C corporation earnings and profits to which we succeed must be distributed as of the close of the taxable year in which we accumulate or acquire such C corporation’s earnings and profits.

CPA®:17 – Global ~~2016~~2017 10-K – 2826

Because certain covenants in our debt instruments may limit our ability to make required REIT distributions, we could be subject to taxation.

Our existing debt instruments include, and our future debt instruments may include, covenants that limit our ability to make required REIT distributions. If the limits set forth in these covenants prevent us from satisfying our REIT distribution requirements, we could fail to qualify for federal income tax purposes as a REIT. If the limits set forth in these covenants do not jeopardize our qualification for taxation as a REIT, but prevent us from distributing 100% of our REIT taxable income, we will be subject to federal corporate income tax, and potentially a nondeductible excise tax, on the retained amounts.

Because we will be required to satisfy numerous requirements imposed upon REITs, we may be required to borrow funds, sell assets, or raise equity on terms that are not favorable to us.

In order to meet the REIT distribution requirements and maintain our qualification and taxation as a REIT, we may need to borrow funds, sell assets, or raise equity, even if the then-prevailing market conditions are not favorable for such transactions. If our cash flows are not sufficient to cover our REIT distribution requirements, it could adversely impact our ability to raise short- and long-term debt, sell assets, or offer equity securities in order to fund the distributions required to maintain our qualification and taxation as a REIT. Furthermore, the REIT distribution requirements may increase the financing we need to fund capital expenditures, future growth, and expansion initiatives, which would increase our total leverage.

In addition, if we fail to comply with certain asset ownership tests at the end of any calendar quarter, we must generally correct the failure within 30 days after the end of the calendar quarter or qualify for certain statutory relief provisions to avoid losing our REIT qualification. As a result, we may be required to liquidate otherwise attractive investments. These actions may reduce our income and amounts available for distribution to our stockholders.

Because the REIT rules require us to satisfy certain rules on an ongoing basis, our flexibility or ability to pursue otherwise attractive opportunities may be limited.

To qualify as a REIT for federal income tax purposes, we must continually satisfy tests concerning, among other things, the sources of our income, the nature and diversification of our assets, the amounts we distribute to our stockholders, and the ownership of our common stock. Compliance with these tests will require us to refrain from certain activities and may hinder our ability to make certain attractive investments, including the purchase of non-qualifying assets, the expansion of non-real estate activities, and investments in the businesses to be conducted by our taxable REIT subsidiaries, or TRSs, thereby limiting our opportunities and the flexibility to change our business strategy. Furthermore, acquisition opportunities in domestic and international markets may be adversely affected if we need or require target companies to comply with certain REIT requirements prior to closing on acquisitions.

To meet our annual distribution requirements, we may be required to distribute amounts that may otherwise be used for our operations, including amounts that may be invested in future acquisitions, capital expenditures, or debt repayment; and it is possible that we might be required to borrow funds, sell assets, or raise equity to fund these distributions, even if the then-prevailing market conditions are not favorable for such transactions.

Because the REIT provisions of the Internal Revenue Code limit our ability to hedge effectively, the cost of our hedging may increase and we may incur tax liabilities.

The REIT provisions of the Internal Revenue Code limit our ability to hedge assets and liabilities that are not incurred to acquire or carry real estate. Generally, income from hedging transactions that have been properly identified for tax purposes (which we enter into to manage interest rate risk with respect to borrowings to acquire or carry real estate assets) and income from certain currency hedging transactions related to our non-U.S. operations, do not constitute “gross income” for purposes of the REIT gross income tests (such a hedging transaction is referred to as a “qualifying hedge”). In addition, if we enter into a qualifying hedge, but dispose of the underlying property (or a portion thereof) or the underlying debt (or a portion thereof) is extinguished, we can enter into a hedge of the original qualifying hedge, and income from the subsequent hedge will also not constitute “gross income” for purposes of the REIT gross income tests. To the extent that we enter into other types of hedging transactions, the income from those transactions is likely to be treated as non-qualifying income for purposes of the REIT gross income tests. As a result of these rules, we may need to limit our use of advantageous hedging techniques or implement those hedges through a TRS. This could increase the cost of our hedging activities because our TRSs could be subject to tax on income or gains resulting from such hedges or limit our hedging and therefore expose us to greater interest rate risks than we would otherwise want to bear. In addition, losses in any of our TRSs generally will not provide any tax benefit, except for being carried forward for use against future taxable income in the TRSs.

CPA®:17 – Global ~~2016~~2017 10-K – 2927

We ~~intend to~~ use TRSs, which may cause us to fail to qualify as a REIT.

To qualify as a REIT for federal income tax purposes, we ~~plan to~~ hold our non-qualifying REIT assets and conduct our non-qualifying REIT income activities in or through ~~one or more~~ TRSs. The net income of our TRSs is not required to be distributed to us and income that is not distributed to us will generally not be subject to the REIT income distribution requirement. However, there may be limitations on our ability to accumulate earnings in our TRSs and the accumulation or reinvestment of significant earnings in our TRSs could result in adverse tax treatment. In particular, if the accumulation of cash in our TRSs causes the fair market value of our TRS interests and certain other non-qualifying assets to exceed 2520% of the fair market value of our assets (or, 25% for tax years beginning after ~~December~~July 3130, ~~2017,~~2008 ~~20%~~and ofbefore ~~the~~December ~~fair~~31, ~~market value of our assets~~2017), we would lose tax efficiency and could potentially fail to qualify as a REIT.

Because the REIT rules limit our ability to receive distributions from TRSs, our ability to fund distribution payments using cash generated through our TRSs may be limited.

Our ability to receive distributions from our TRSs is limited by the rules we must comply with in order to maintain our REIT status. In particular, at least 75% of our gross income for each taxable year as a REIT must be derived from real estate-related sources, which principally includes gross income from the leasing of our properties. Consequently, no more than 25% of our gross income may consist of dividend income from our TRSs and other non-qualifying income types. Thus, our ability to receive distributions from our TRSs is limited and may impact our ability to fund distributions to our stockholders using cash flows from our TRSs. Specifically, if our TRSs become highly profitable, we might be limited in our ability to receive net income from our TRSs in an amount required to fund distributions to our stockholders commensurate with that profitability.

Our ownership of TRSs will be subject to limitations that could prevent us from growing our portfolio and our transactions with our TRSs could cause us to be subject to a 100% penalty tax on certain income or deductions if those transactions are not conducted on an arm’s-length basis.

Overall, ~~(i) for taxable years beginning prior to January 1, 2018,~~ no more than 2520% of the value of a REIT’s gross assets, ~~and~~ (~~ii)~~25% for ~~taxable~~tax years beginning after ~~December~~July 3130, ~~2017,~~2008 noand ~~more~~before ~~than~~December ~~20%~~31, ~~of the value of a REIT’s gross assets~~2017), may consist of interests in TRSs; compliance with this limitation could limit our ability to grow our portfolio. In addition, the Internal Revenue Code limits the deductibility of interest paid or accrued by a TRS to its parent REIT to assure that the TRS is subject to an appropriate level of corporate taxation. The Internal Revenue Code also imposes a 100% excise tax on certain transactions between a TRS and its parent REIT that are not conducted on an arm’s-length basis. We will monitor the value of investments in our TRSs in order to ensure compliance with TRS ownership limitations and will structure our transactions with our TRSs on terms that we believe are arm’s-length to avoid incurring the 100% excise tax described above. There can be no assurance, however, that we will be able to comply with the TRS ownership limitation or be able to avoid application of the 100% excise tax.

~~Because~~Dividends ~~distributions~~ payable by REITs ~~generally~~ do not qualify for the reduced tax rates on dividend income from C corporations, which could adversely affect the value of our common stock ~~could be adversely affected~~.

~~Certain~~The ~~distributions~~maximum ~~payable~~U.S. byfederal ~~domestic~~income ortax rate for certain qualified ~~foreign~~dividends payable by C corporations to U.S. stockholders that are individuals, trusts, and estates inis ~~the~~20%. ~~United~~Dividends ~~States~~payable by REITs, however, are ~~currently~~generally not eligible for ~~federal~~the ~~income~~reduced ~~tax~~qualified atdividend arate. ~~maximum~~However, ~~rate~~for oftaxable ~~20%.~~years ~~Distributions~~beginning ~~payable~~after byDecember ~~REITs~~31, in2017 ~~contrast~~and before January 1, ~~are~~2026, ~~generally~~under ~~not~~the ~~eligible~~recently ~~for~~enacted ~~this~~Tax ~~reduced~~Cuts ~~rate~~and Jobs Act, ~~unless~~noncorporate ~~the~~taxpayers ~~distributions~~may ~~are~~deduct ~~attributable~~up to 20% of certain qualified business income, including “qualified REIT dividends” (generally, dividends received by ~~the~~a REIT ~~from~~shareholder ~~other~~that ~~corporations~~are ~~that~~not ~~would~~designated ~~otherwise~~as becapital ~~eligible~~gain ~~for~~dividends or qualified dividend income), subject to certain limitations, resulting in an effective maximum U.S. federal income tax rate of 29.6% on such income. Although the reduced ~~rate~~U.S. ~~This~~federal income tax rate applicable to qualified dividends from C corporations does not adversely affect the taxation of REITs or dividends paid by REITs, the more favorable ~~tax~~rates ~~rate~~applicable ~~for~~to regular corporate ~~distributions~~dividends, together with the recently reduced corporate tax rate (21%), could cause ~~qualified~~ investors who are individuals, trusts and estates to perceive investments in REITs to be relatively less attractive than investments in the ~~stock~~stocks of non-REIT corporations that pay ~~distributions~~dividends, which could adversely affect the value of ~~REIT~~the ~~stocks~~shares of REITs, including our common stock.

CPA:17 – Global 2017 10-K – 28

Even if we continue to qualify as a REIT, certain of our business activities will be subject to corporate level income tax and foreign taxes, which will continue to reduce our cash flows, and we will have potential deferred and contingent tax liabilities.

Even if we qualify for taxation as a REIT, we may be subject to certain (i) federal, state, local, and foreign taxes on our income and assets, including alternative minimum taxes for taxable years ending prior to January 1, 2018; (ii) taxes on any undistributed income and state, local, or foreign income; and (iii) franchise, property, and transfer taxes. In addition, we could be required to pay an excise or penalty tax under certain circumstances in order to utilize one or more relief provisions under the Internal Revenue Code to maintain qualification for taxation as a REIT, which could be significant in amount.

CPA®:17 – Global 2016 10-K – 30

Any TRS assets and operations would continue to be subject, as applicable, to federal and state corporate income taxes and to foreign taxes in the jurisdictions in which those assets and operations are located. Any of these taxes would decrease our earnings and our cash available for distributions to stockholders.

We will also be subject to a federal corporate level tax at the highest regular corporate rate (currently 3521% for year ~~2017~~2018) on all or a portion of the gain recognized from a sale of assets formerly held by any C corporation that we acquire on a carry-over basis transaction occurring within a five-year period after we acquire such assets, to the extent the built-in gain based on the fair market value of those assets on the effective date of the REIT election is in excess of our then tax basis. The tax on subsequently sold assets will be based on the fair market value and built-in gain of those assets as of the beginning of our holding period. Gains from the sale of an asset occurring after the specified period will not be subject to this corporate level tax. We expect to have only a de minimis amount of assets subject to these corporate tax rules and do not expect to dispose of any significant assets subject to these corporate tax rules.

Because dividends received by foreign stockholders are generally taxable, we may be required to withhold a portion of our distributions to such persons.

Ordinary dividends received by foreign stockholders that are not effectively connected with the conduct of a U.S. trade or business are generally subject to U.S. withholding tax at a rate of 30%, unless reduced by an applicable income tax treaty. Additional rules with respect to certain capital gain distributions will apply to foreign stockholders that own more than 10% of our common stock.

The ability of our board of directors to revoke our REIT election, without stockholder approval, may cause adverse consequences for our stockholders.

Our organizational documents permit our board of directors to revoke or otherwise terminate our REIT election, without the approval of our stockholders, if it determines that it is no longer in our best interest to continue to qualify as a REIT. If we cease to be a REIT, we will not be allowed a deduction for dividends paid to stockholders in computing our taxable income, and we will be subject to U.S. federal income tax at regular corporate rates and state and local taxes, which may have adverse consequences on the total return to our stockholders.

Federal and state income tax laws governing REITs and related interpretations may change at any time, and any such legislative or other actions affecting REITs could have a negative effect on us and our stockholders.

Federal and state income tax laws governing REITs or the administrative interpretations of those laws may be amended at any time. Federal, state, and foreign tax laws are under constant review by persons involved in the legislative process, at the Internal Revenue Service and the U.S. Department of the Treasury, and at various state and foreign tax authorities. Changes to tax laws, regulations, or administrative interpretations, which may be applied retroactively, could adversely affect us or our stockholders. We cannot predict whether, when, in what forms, or with what effective dates, the tax laws, regulations, and administrative interpretations applicable to us or our stockholders may be changed. Accordingly, we cannot assure you that any such change will not significantly affect our ability to qualify for taxation as a REIT and/or the attendant tax consequences to us or our stockholders.

CPA:17 – Global 2017 10-K – 29

Recent changes to U.S. tax laws could have a negative impact on our business.

On December 22, 2017, the President signed a tax reform bill into law, referred to herein as the “Tax Cuts and Jobs Act,” which among other things:


•	reduces the corporate income tax rate from 35% to 21% (including with respect to our TRSs);


•	reduces the rate of U.S. federal withholding tax on distributions made to non-U.S. shareholders by a REIT that are attributable to gains from the sale or exchange of U.S. real property interests from 35% to 21%;


•	allows for an immediate 100% deduction of the cost of certain capital asset investments (generally excluding real estate assets), subject to a phase-down of the deduction percentage over time;


•	changes the recovery periods for certain real property and building improvements (e.g. to 15 years for qualified improvement property under the modified accelerated cost recovery system, to 30 years (previously 40 years) for residential real property, and 20 years (previously 40 years) for qualified improvement property under the alternative depreciation system);

•

restricts the deductibility of interest expense by businesses (generally, to 30% of the business’s adjusted taxable income) except, among others, real property businesses electing out of such restriction; generally, we expect our business to qualify as such a real property business, but businesses conducted by our TRSs may not qualify, and we have not yet determined whether our subsidiaries can and/or will make such an election;


•	requires the use of the less favorable alternative depreciation system to depreciate real property in the event a real property business elects to avoid the interest deduction restriction above;


•	restricts the benefits of like-kind exchanges that defer capital gains for tax purposes to exchanges of real property;


•	permanently repeals the “technical termination” rule for partnerships, meaning sales or exchanges of the interests in a partnership will be less likely to, among other things, terminate the taxable year of, and restart the depreciable lives of assets held by, such partnership for tax purposes;


•	requires accrual method taxpayers to take certain amounts in income no later than the taxable year in which such income is taken into account as revenue in an applicable financial statement prepared under GAAP, which, with respect to certain leases, could accelerate the inclusion of rental income;


•	eliminates the federal corporate alternative minimum tax;


•	implements a one-time deemed repatriation tax on corporate profits (at a rate of 15.5% on cash assets and 8% on non-cash assets) held offshore, which profits are not taken into account for purposes of the REIT gross income tests;


•	reduces the highest marginal income tax rate for individuals to 37% from 39.6% (excluding, in each case, the 3.8% Medicare tax on net investment income);

•

generally allows a deduction for individuals equal to 20% of certain income from pass-through entities, including ordinary dividends distributed by a REIT (excluding capital gain dividends and qualified dividend income), generally resulting in a maximum effective federal income tax rate applicable to such dividends of 29.6% compared to 37% (excluding, in each case, the 3.8% Medicare tax on net investment income); and


•	limits certain deductions for individuals, including deductions for state and local income taxes, and eliminates deductions for miscellaneous itemized deductions (including certain investment expenses).

As a REIT, we are required to distribute at least 90% of our taxable income to our shareholders annually. As a result of the changes to U.S. federal tax laws implemented by the Tax Cuts and Jobs Act, our taxable income and the amount of distributions to our stockholders required to maintain our REIT status, as well as our relative tax advantage as a REIT, could change.

The Tax Cuts and Jobs Act is a complex revision to the U.S. federal income tax laws with impacts on different categories of taxpayers and industries, which will require subsequent rulemaking and interpretation in a number of areas. In addition, many provisions in the Tax Cuts and Jobs Act, particularly those affecting individual taxpayers, expire at the end of 2025. The long-term impact of the Tax Cuts and Jobs Act on the overall economy, government revenues, our tenants, us, and the real estate industry cannot be reliably predicted at this time. Furthermore, the Tax Cuts and Jobs Act may negatively impact certain of our tenants’ operating results, financial condition, and future business plans. The Tax Cuts and Jobs Act may also result in reduced government revenues, and therefore reduced government spending, which may negatively impact some of our tenants that rely on government funding. There can be no assurance that the Tax Cuts and Jobs Act will not negatively impact our operating results, financial condition, and future business operations.

Item 1B. Unresolved Staff Comments.

None.

CPA:17 – Global 2017 10-K – 30

Item 2. Properties.

Our principal corporate offices are located in the offices of our Advisor at 50 Rockefeller Plaza, New York, NY 10020.

See Item 1. Business — Our Portfolio for a discussion of the properties we hold for rental operations and Part II, Item 8. Financial Statements and Supplementary Data — Schedule III — Real Estate and Accumulated Depreciation for a detailed listing of such properties.

CPA®:17 – Global 2016 10-K – 31

Item 3. Legal Proceedings.

At December 31, ~~2016~~2017, 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.

Item 4. Mine Safety Disclosures.

Not applicable.

CPA®:17 – Global ~~2016~~2017 10-K – 3231

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Unlisted Shares and Distributions

There is no active public trading market for our shares. At March 39, ~~2017~~2018, there were 8079,~~950~~488 holders of record of our shares.

We are required to distribute annually at least 90% of our distributable REIT net taxable income to maintain our status as a REIT. Quarterly distributions ~~paid~~declared by us for the past two years are as follows:

	Years Ended December 31,
	2016		2015
	2017		2016
First quarter	$	0.1625	$	0.1625
Second quarter	0.1625		0.1625
Third quarter	0.1625		0.1625
Fourth quarter	0.1625		0.1625
	$	0.6500	$	0.6500

Our Senior Credit Facility (as described in Note 10) contains certain covenants that restrict the amount of distributions that we can pay.

Unregistered Sales of Equity Securities

During the three months ended December 31, ~~2016~~2017, we issued ~~363~~728,~~518~~185 shares of our common stock to our Advisor as consideration for asset management fees. These shares were issued at $10.2411 per share, which represented our most recently published NAV as approved by our board of directors at the date of issuance. 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, as amended, 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 through December 31, ~~2016~~2017, we have issued a total of 1114,~~874~~647,~~009~~412 shares of our common stock to our Advisor as consideration for asset management fees.

All prior sales of unregistered securities have been reported in our previously filed quarterly and annual reports on Form 10-Q and Form 10-K, respectively.

Issuer Purchases of Equity Securities

The following table provides information with respect to repurchases of our common stock during the three months ended December 31, ~~2016~~2017:

	Total number ofshares purchased (a)	Average pricepaid per share		Total number of sharespurchased as part ofpublicly announced plans or program (a)	Maximum number (orapproximate dollar value)of shares that may yet bepurchased under the plans or program (a)
2016 Period
2017 Period
October	238,~~498~~000	$	9.5260	N/A	N/A
November	—	—		N/A	N/A
December	21,~~049~~641,~~005~~914	9.5650		N/A	N/A
Total	21,~~072~~649,~~503~~914

__________

~~(a)~~CPA:17 ~~Represents~~– ~~shares~~Global of2017 ~~our~~10-K ~~common~~– stock 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 December 31, 2016, we received 366 redemption requests for our common stock. As of the date of this Report, all such requests were satisfied. We generally receive fees in connection with share redemptions.32

~~CPA®:17~~(a) –Represents ~~Global~~shares ~~2016~~of ~~10-K~~our –common 33stock 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 December 31, 2017, we redeemed 451 redemption requests for our common stock, which excludes the October 2017 redemptions noted above that were received in September 2017 but not processed until October 2017. As of the date of this Report, we have fulfilled all of the valid requests that we received during the three months ended December 31, 2017. The average price paid per share will vary depending on the number of redemption requests that were made during the period, the most recently published NAV, and the amount of time a stockholder has held their respective shares.

Item 6. Selected Financial Data.

The following selected financial data should be read in conjunction with the consolidated financial statements and related notes in Item 8 (in thousands, except per share data):

	Years Ended December 31,
	2016			2015			2014			2013			2012
	2017			2016			2015			2014			2013
Operating Data
Revenues from continuing operations (a)	$	~~440~~447,~~362~~654		$	~~426~~440,~~947~~362		$	~~396~~426,~~706~~947		$	~~362~~396,~~772~~706		$	~~289~~362,~~977~~772
Income from continuing operations (a)	~~229~~136,~~208~~169			~~124~~229,~~120~~208			~~106~~124,~~993~~120			60106,~~162~~993			6860,~~171~~162
Net income	~~229~~136,~~208~~169			~~124~~229,~~120~~208			~~106~~124,~~993~~120			67106,~~649~~993			7067,~~094~~649
Net income attributable to noncontrolling interests	(38,~~863~~882		)	(3938,~~915~~863		)	(3239,~~842~~915		)	(2832,~~935~~842		)	(2628,~~498~~935		)
Net income attributable to CPA®:17 – Global	190,345			84,205			74,151			38,714			43,596
Net income attributable to CPA:17 – Global	97,287			190,345			84,205			74,151			38,714
Basic and diluted earnings per share:
Income from continuing operations attributable to CPA®:17 – Global (a)	0.56			0.25			0.23			0.10			0.16
Income from continuing operations attributable to CPA:17 – Global (a)	0.28			0.56			0.25			0.23			0.10
Net income attributable to CPA®:17 – Global	0.56			0.25			0.23			0.12			0.17
Net income attributable to CPA:17 – Global	0.28			0.56			0.25			0.23			0.12
Cash distributions declared per share	0.6500			0.6500			0.6500			0.6500			0.6500
Balance Sheet Data
Total assets (b)	$	4,698,923		$	4,613,190		$	4,591,238		$	4,695,775		$	4,401,264
Total assets	$	4,587,470		$	4,698,923		$	4,613,190		$	4,591,238		$	4,695,775
Net investments in real estate	3,228,104			3,174,855			3,062,287			3,149,131			2,824,246
Net investments in real estate (b)	3,736,921			3,745,466			3,699,823			3,577,665			3,707,369
Long-term obligations (b) (c)	2,078,585			2,000,742			1,891,224			1,914,410			1,645,033
Long-term obligations (c)	1,957,954			2,078,585			2,000,742			1,891,224			1,914,410
Other Information
Net cash provided by operating activities	$	~~211~~257,~~369~~034		$	~~243~~211,~~884~~369		$	~~210~~243,~~055~~884		$	~~182~~210,~~598~~055		$	~~158~~182,~~004~~598
Net cash provided by (used in) investing activities	986,~~316~~676			~~(348~~98,~~065~~316		)	(~~214~~348,~~927~~065		)	(~~533~~214,~~189~~927		)	(~~838~~533,~~787~~189		)
Net cash (used in) provided by financing activities	(~~182~~427,~~523~~021		)	(9182,~~709~~523		)	(~~126~~9,~~182~~709		)	~~109~~(126,~~239~~182		)	1109,~~150,361~~239
Cash distributions paid	~~220~~224,~~991~~964			~~215~~220,~~914~~991			~~209~~215,~~054~~914			~~198~~209,~~440~~054			~~147~~198,~~649~~440
Distributions declared	~~222~~225,~~046~~993			~~217~~222,~~311~~046			~~210~~217,~~862~~311			~~203~~210,~~598~~862			~~161~~203,~~773~~598

__________

(a) Amounts for the years ended December 31, 2017, 2016, 2015, and 2014 include the operating results of properties sold or held for sale. Prior to 2014, operating results of properties sold or held for sale were included in income from discontinued operations.

(b) OnIn ~~January~~the 1,second ~~2016,~~quarter weof ~~adopted Accounting Standards Update~~2017, orwe ~~ASU,~~reclassified ~~2015-03,~~certain ~~which~~line ~~changes~~items ~~the presentation of debt issuance costs (previously recognized as an asset) and requires that they be presented~~ in ~~the~~our consolidated balance ~~sheet as a direct deduction from the carrying amount of that debt liability~~sheets. As a result ~~of adopting this guidance~~, weNet ~~reclassified~~investments ~~deferred~~in ~~financing~~real ~~costs~~estate ~~totaling~~as ~~$12.8~~of ~~million,~~December ~~$14.7 million~~31, ~~$16.8 million~~2016, ~~and $15.0 million from Other assets~~2015, ~~net to Non-recourse debt~~2014, ~~net~~ and~~/or~~ ~~Senior~~2013 ~~Credit~~has ~~Facility,~~been ~~net~~revised asto ofconform ~~December~~to ~~31,~~the ~~2015,~~current ~~2014,~~year ~~2013,~~presentation ~~and~~(Note ~~2012, respectively~~2).

(c) All years include non-recourse mortgage obligations (Note 10) and deferred acquisition fee installments, including interest thereon (Note 3); 2017, 2016, and 2015 include ~~outside~~ borrowings on our Senior Credit Facility of $101.9 million, $49.8 million, and $112.8 million, respectively.

CPA®:17 – Global ~~2016~~2017 10-K – 3433

Item 7. Management’s Discussion and Analysis of Financial Condition and Results 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.

We operate in two reportable business segments: Net Lease and Self Storage. Our Net Lease segment includes our domestic and foreign investments in net-leased properties, whether they are accounted for as operating or direct financing leases. Our Self Storage segment is comprised of our investments in self-storage properties. In addition, we have investments in loans receivable, CMBS, one hotel, and certain other properties, which are included in our All Other category (Note 15).

The following discussion should be read in conjunction with our consolidated financial statements included in Item 8 of this Report and the matters described under Item 1A. Risk Factors.

Business Overview

We are a publicly owned, non-traded REIT that invests primarily in commercial properties leased to companies domestically and internationally. As opportunities arise, we also make other types of commercial real estate-related 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 were formed in 2007 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 99.99% of the interests in, the Operating Partnership. The remaining interest in the Operating Partnership is held by a subsidiary of WPC. We have previously stated our intention to consider liquidity events for investors generally commencing eight to twelve years following the investment of substantially all of the net proceeds from our initial public offering, which occurred in April 2011. During the quarter ended September 30, 2017, our board of directors formed a special committee of independent directors to begin the process of evaluating possible liquidity alternatives for our shareholders. There can be no assurance as to the form or timing of any liquidity alternative or that any alternative will be pursued at all. We do not intend to discuss the evaluation process unless and until a particular alternative is selected.

Significant Developments

Management Changes

Mr. Mark J. DeCesaris retired from his positions as our chief executive officer and a Director in connection with his resignation from those positions of WPC, all effective as of December 31, 2017. On ~~September~~December 226, ~~2016~~2017, weour ~~announced~~board ~~that~~of directors elected Mr. ~~Hisham~~Jason AE. ~~Kader~~Fox, ~~resigned~~the asincoming chief executive officer of WPC, to become our chief ~~financial~~executive officer, ~~and~~effective ~~that~~as ~~Ms.~~of ~~ToniAnn~~January ~~Sanzone~~1, ~~would~~2018, beand ~~appointed~~to asfill the vacancy on our ~~new~~board, ~~chief~~effective ~~financial~~as ~~officer.~~of Msthat same date. ~~Sanzone~~Until ~~joined~~he usbecame inchief ~~2013~~executive ~~and~~officer, Mr. Fox has served as ~~our~~president ~~chief~~of ~~accounting~~WPC ~~officer~~ since 2015. ~~She~~and ~~also~~previously ~~serves~~served asin ~~chief~~various ~~financial~~capacities ~~officer~~in WPC’s Investment Department, including as its Head of Global Investments, since joining WPC in 2002.

On October 5, 2016, we announced that Ms. Kristin Sabia was appointed as our chief accounting officer, succeeding Ms. Sanzone, who remains as our chief financial officer, in that role. Ms. Sabia joined us in 2012 and served as our controller since 2015.

On December 12, 2016, we announced that Mr. Thomas E. Zacharias, managing director and chief operating officer of WPC informed WPC’s Board of Directors of his decision to retire effective March 31, 2017. Effective as of that same date, Mr. Zacharias will also resign from his position as our chief operating officer.

Net Asset Value

Our Advisor calculates our NAV annually as of year-end, and has determined that our NAV was $10.2411 as of December 31, ~~2015~~2016. Our Advisor generally calculates our NAV by relying in part on an appraisal of the fair market value of our real estate provided by a third party, adjusted to give effect to the estimated fair value of mortgage loans encumbering our assets (also provided by a third party) as well as other adjustments. Our NAV is based on a number of variables, including individual tenant credits, lease terms, lending credit spreads, foreign currency exchange rates, and tenant defaults, among others. We do not control all of these variables and, as such, cannot predict how they will change in the future. For additional information regarding the calculation of our NAV as of December 31, ~~2015~~2016, please see our Form 8-K dated March 14, 2016. Our Advisor currently intends to determine our NAV as of December 31, ~~2016~~2017 during the first quarter of ~~2017~~2018.

CPA®:17 – Global ~~2016~~2017 10-K – 3534

Acquisitions

During ~~2016~~2017, we acquired ~~ten~~two domestic and three international investments at a total cost of approximately $~~240~~58.36 million and $152.8 million, respectively, inclusive of acquisition related costs and fees. ~~These~~Three of our investments ~~were~~are ~~comprised~~build-to-suit oftransactions, ~~six~~which ~~domestic~~include ~~investments~~the ~~totaling~~total ~~$108~~commitment for funding on each project.5 ~~million,~~One ~~three~~of our international investments ~~totaling~~is ~~$106.2~~a ~~million,~~joint ~~and~~venture ~~the~~investment ~~remaining~~that ~~15%~~we ~~controlling~~account ~~interest~~for ~~acquired~~as ~~related~~an toequity amethod ~~pre-existing~~investment, ~~equity~~and ~~investment~~the intotal acost ~~self-storage~~excludes ~~portfolio~~our ~~totaling~~portion ~~$25.7~~of ~~million~~mortgage financing, as described below (Note 6). Amounts are based on the exchange rate of the foreign currency at the date of acquisition, as applicable (Note 4).

Shelborne Transaction

On October 3, 2017, we restructured our investment in the Shelborne hotel. Pursuant to the accounting guidance on ADC Arrangements, we previously accounted for the loan we had provided Shelborne Operating Associates, LLC, or the Shelborne Loan, under the equity method of accounting. In the restructuring, all equity interests in the investment were transferred to us in satisfaction of the Shelborne Loan. Simultaneously, we transferred a 4.5% minority interest to one of the original equity partners in exchange for a cash contribution of $4.0 million from that partner. As a result of the restructuring, we became the managing member with the controlling financial interest in the investment, which we consolidate (Note 4). We recorded a loss on change in control of interests of $13.9 million during 2017, which was the difference between the carrying value of our previously held equity investment of $118.7 million and the fair value of our 95.5% ownership interest on the date of restructuring of $104.9 million.

During September 2017, the Shelborne hotel sustained damage from Hurricane Irma. The damage to the hotel is estimated at $31.2 million and the estimated insurance deductible is $1.8 million. In addition, we have incurred additional costs of $1.4 million related to remediation work and $2.7 million in costs incurred related to our insurance adjuster. As of December 31, 2017, insurance receivables outstanding relating to the hurricane damage were $30.8 million.

Dispositions

During ~~2016~~2017, we sold 34four ~~self~~net-~~storage~~lease properties for total proceeds of $~~259~~28.16 million, net of closing costs, and recognized aan aggregate gain on ~~the~~ sale of ~~these~~$2.9 ~~assets~~million. In addition, during 2017, we sold our interest in an entertainment complex, which we refer to as the I-drive Property, to the developer that constructed it for net proceeds of $~~132~~23.95 million. In connection with the dispositions, we provided $34.0 million of seller financing in the ~~aggregate~~form of a mezzanine loan, and recorded a deferred gain on sale of $2.1 Amillion, ~~portion~~which will be recognized upon recovery of the ~~proceeds~~cost of the property from the ~~sales~~future ~~were~~cash ~~used~~proceeds to(Note ~~repay~~4, ~~non-recourse~~Note ~~mortgage~~5). ~~loans~~In ~~encumbering~~connection with the ~~properties~~restructuring ~~with~~of ~~outstanding~~our ~~principal~~investment ~~balances~~in ~~aggregating~~the ~~$84.7~~related ~~million~~observation wheel, ~~and~~which we refer to as athe ~~result~~I-drive Wheel, we also recorded a ~~loss~~deferred ongain ~~extinguishment~~of $16.4 million, which will be recognized into income upon recovery of ~~debt~~the cost of ~~$15.8~~the ~~million~~Wheel Loan (Note 5).

Financing Activity

During ~~2016~~2017, we ~~obtained~~refinanced ~~seven~~two ~~new~~ non-recourse mortgage ~~financings~~loans ~~and~~totaling ~~completed~~$157.7 ~~two~~million ~~additional~~with ~~drawdowns~~new onnon-recourse ~~already existing~~ mortgage ~~financings~~financing totaling $~~170~~180.90 million, ~~net of discounts,~~ with a weighted-average annual interest rate and term to maturity of 2.08% and ~~7.1~~three years, respectively, which had weighted-average annual interest rate of 3.7% ~~Additionally~~prior to refinancing. In addition, inwe ~~connection~~obtained ~~with~~mortgage financing related to the ~~acquisition~~international joint venture investment described above, of ~~the~~which ~~remaining~~our ~~15%~~portion ~~controlling~~totaled ~~interest~~$88.0 inmillion a(Note ~~self-storage~~6). ~~portfolio~~During 2017, we ~~assumed~~drew ~~the~~down ~~remaining~~on ~~15%~~two ofnon-recourse ~~the outstanding~~ mortgage ~~debt~~loans totaling $6925.81 million ~~net~~that ofhave ~~discounts with~~ a weighted-average annual interest rate and term to maturity of 43.51% and ~~1.1~~seven years, respectively ~~(Note 10)~~.

~~During~~In ~~2016~~addition, during 2017, we ~~defeased~~repaid ~~seven~~13 non-recourse mortgage loans ~~with outstanding principal balances~~ totaling $~~121~~261.94 million, 11 of which were scheduled to mature in 2017 and ~~recognized~~two ~~losses~~of which were scheduled to mature in 2018 (amount is based on ~~extinguishment~~the exchange rate of ~~debt~~the ~~totaling~~euro as of the date of repayment). Of that amount, $2360.60 million. ~~These~~related to the non-recourse mortgage ~~loans~~loan ~~had~~that awas ~~weighted-average~~repaid ~~interest~~in ~~rate~~full ~~and~~at ~~remaining~~closing ~~term~~by tothe ~~maturity~~buyer in connection with the sale of the I-drive Property (Note 4), on which we recognized a loss on extinguishment of debt of $1.9%3 ~~and~~million 5(Note 10).7 ~~years,~~In ~~respectively~~addition, ~~and~~in ~~encumbered~~connection awith ~~total~~our disposition of 52a ~~self-storage~~property ~~properties~~located in Pordenone, 34Italy, which was part of ~~which~~a ~~were~~larger ~~sold~~portfolio ~~(Note~~of ~~14)~~properties located throughout Italy and 18leased to a single tenant, we repaid a portion of ~~which~~the ~~were~~principal ~~refinanced~~balance ~~with~~of ~~new~~the non-recourse mortgage ~~loans~~loan ~~totaling~~on that portfolio for a total of $~~65.~~9.3 million. ~~These~~(amount ~~loans~~is ~~have~~based aon ~~weighted-average~~the ~~interest~~exchange rate ~~and~~of ~~term~~the toeuro ~~maturity~~as of ~~3.0%~~the ~~and~~date of 4repayment).8 ~~years, respectively.~~

During ~~2016~~2017, we ~~exercised~~drew ~~the~~down $119.2 ~~delayed~~million from ~~draw option on~~ our ~~Term~~Senior ~~Loan~~Credit ~~and~~Facility ~~borrowed~~(amount ~~$50.0~~is ~~million.~~based ~~The~~on ~~Term~~the ~~Loan~~exchange ~~bears~~rate ~~interest~~of atthe ~~LIBOR~~euro ~~plus~~or ayen, ~~margin~~as ofapplicable, ~~1.55%~~on ~~and~~the isdate ~~scheduled~~of toeach ~~mature~~draw), onof ~~August 26,~~which ~~2018,~~we ~~unless~~have ~~extended~~since ~~pursuant~~repaid to$69.0 ~~its~~million ~~terms~~(Note 10).

~~Additionally,~~CPA:17 ~~during~~– ~~the~~Global ~~2016,~~2017 ~~we refinanced four non~~10-~~recourse~~K ~~mortgage~~– loans totaling $206.4 million with new non-recourse mortgage financing totaling $211.8 million and recognized a loss on extinguishment of debt of $0.8 million. These mortgage loans have a weighted-average interest rate and term of 2.0% and 4.7 years, respectively. 35

~~CPA®:17~~As –of ~~Global~~December 31, ~~2016~~2017, 10we were in breach of a loan-Kto-value, –or 36LTV, covenant on one of our non-recourse mortgage loans. On January 22, 2018, we repaid $6.1 million (amount is based on the exchange rate of the euro as of the date of repayment) of principal on this loan to cure the covenant breach (Note 10).

Hurricane Harvey and Hurricane Irma

During 2017, certain of our properties were damaged by Hurricane Harvey and Hurricane Irma. We evaluated these properties to determine if any losses should be recognized and, as a result, recognized a loss on our Shelborne hotel in Miami, Florida as discussed above.

Tax Cuts and Jobs Act

On December 22, 2017, the Tax Cuts and Jobs Act was signed into law by President Trump. The new tax legislation, which is expected to have a minimal impact on our operating results, cash flows, and financial condition, contains several key tax provisions, including the reduction of the U.S. corporate income tax rate from 35% to 21% effective January 1, 2018. Other key provisions that have implications to the real estate industry include the limitation of the tax deductibility of interest expense, acceleration of expensing of certain business assets, deductions for pass-through business income, and limitations on loss carryforwards. In addition, the effect of the international provisions of the Tax Cuts and Jobs Act establishes a territorial-style system for taxing foreign-source income of domestic multinational corporations and imposes a one-time repatriation of foreign earnings and profits for which the inclusions can be spread over an eight-year period.

As a result of the Tax Cuts and Jobs Act, for periods beginning on January 1, 2018:


•	Tax rates are permanently reduced on businesses conducted by taxable corporations. The Tax Cuts and Jobs Act is expected to have a favorable impact on the effective tax rate and net income as reported under GAAP for our TRSs;


•	New limitations on interest deductions are imposed with an exemption for electing real estate businesses. Generally, we expect our business to qualify as such a real property business, but businesses conducted by our TRSs may not qualify, and we have not yet determined whether our subsidiaries can and/or will make such an election;


•	Depreciation expensing rules provide taxpayers with 100% expensing deductions for qualifying new or used property acquired and placed in service between September 28, 2017 and December 31, 2022, with annual 20% step-downs generally from 2023 – 2026; however, this will have a limited impact on us due to the interest limitation exception election;


•	Our non-corporate shareholders may be entitled to deduct 20% of qualified REIT ordinary dividends without regard to wage limitations, asset-based limitations, qualified trade or business limitations, or qualified business income limitations;


•	Net operating loss, or NOL, carryforwards arising in tax years beginning after 2017 now may reduce only 80% of taxable income of any year, and NOL carryforwards can be carried forward indefinitely but can no longer be carried back to prior years; however, the Tax Cuts and Jobs Act does not restrict the usage of our existing NOLs, which arose through 2017; and


•	The territorial tax system taxes our income earned within the United States, as opposed to worldwide income, but will have a minimal impact on us due to the ability of REITs to deduct dividends paid.

CPA:17 – Global 2017 10-K – 36

Portfolio Overview

We ~~intend~~hold ~~to continue to acquire~~ a diversified portfolio of income-producing commercial real estate properties and other real estate-related assets. We ~~expect to~~ make ~~these~~ investments both domestically and internationally. Portfolio information is provided on a ~~consolidated~~pro rata basis, tounless ~~facilitate~~otherwise ~~the~~noted ~~review of our accompanying consolidated financial statements. In addition~~below, ~~we provide such information on a pro rata basis~~ 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

	December 31,
	2016			2015
	2017			2016
Number of net-leased properties	~~395~~411			~~377~~395
Number of operating properties (a)	38			7238
Number of tenants (b)	~~121~~116			~~111~~121
Total square footage (in thousands) (c)	46,119			45,741
Total square footage (in thousands)	47,039			46,119
Occupancy (b) (c)	99.72		%	99.96		%
Occupancy (b)	99.72		%	99.72		%
Weighted-average lease term (in years) (c)	12.9			13.7
Weighted-average lease term (in years)	11.8			12.9
Number of countries (c)	14			13
Number of countries	16			14
Total assets (in thousands) (d)	$	4,698,923		$	4,613,190
Total assets (consolidated basis in thousands)	$	4,587,470		$	4,698,923
Net investments in real estate (in thousands) (d)	3,228,104			3,174,855
Net investments in real estate (consolidated basis in thousands) (c)	3,736,921			3,745,466
Debt, net — pro rata (in thousands)	2,128,673			2,314,937

	Years Ended December 31,
(dollars in thousands, except exchange rate)	2016			2015			2014
(dollars in millions, except exchange rates)	2017			2016			2015
Acquisition volume — consolidated (d) (e) (f)	$	233.8		$	357.8		$	121.5
Acquisition volume — consolidated (d) (e)	$	69.9		$	233.8		$	357.8
Acquisition volume — pro rata (c) (e) (f)	240.3			366.9			291.3
Acquisition volume — pro rata (e) (f)	211.4			240.3			366.9
Financing obtained — consolidated (d) (g)	448.6			170.2			92.8
Financing obtained — consolidated (g)	205.1			448.6			170.2
Financing obtained — pro rata (c) (g) (h)	465.5			170.2			164.1
Financing obtained — pro rata (g) (h)	293.1			465.5			170.2
Average U.S. dollar/euro exchange rate	1.~~1067~~1292			1.~~1099~~1067			1.~~3295~~1099
Average U.S. dollar/British pound sterling exchange rate	1.3558			1.5286			1.6482
Change in the U.S. CPI (i)	2.1		%	2.0		%	0.7		%
Average U.S. dollar/Japanese yen exchange rate	0.0092			0.0083			0.0095
Change in the Harmonized Index of Consumer Prices (i)	1.4		%	1.2		%	0.2		%
Change in the U.S. CPI (i)	2.0		%	0.7		%	0.8		%
Change in the Harmonized Index of Consumer Prices (i)	1.2		%	0.2		%	(0.2		)%

__________

(a) Operating properties are comprised of full ownership interests in 37 self-storage properties with an average occupancy of 91.9% and 93.0% at December 31, 2017 and 2016, ~~full~~respectively, orand ~~partial~~a ~~ownership~~majority ~~interests~~interest in ~~71 self-storage properties with an average occupancy of 90.6% at December 31, 2015, and~~ one hotel property at each date; all of which ~~were~~are managed by third parties.


(b)	Excludes operating properties.

(c) ~~Represents~~In ~~pro~~the ~~rata~~second ~~basis.~~quarter ~~See~~of ~~Terms~~2017, ~~and~~we ~~Definitions~~reclassified ~~below~~certain ~~for~~line items in our consolidated balance sheets. As a ~~description~~result, amounts for certain line items included within Net investments in real estate as of ~~pro~~December ~~rata~~31, ~~amounts~~2016 have been revised to the current year presentation (Note 2).

(d) ~~Represents~~Includes ~~consolidated~~build-to-suit ~~basis~~transactions that are reflected as the total commitment for the build-to-suit funding, and excludes investments in unconsolidated joint ventures.

(e) Includes ~~build~~acquisition-~~to-suit~~related ~~transactions,~~costs ~~which~~and ~~are~~fees ~~reflected~~for asbusiness ~~the~~combinations ~~total~~(if ~~commitment~~applicable), ~~for~~which are expensed in the ~~build-to-suit~~consolidated ~~funding~~financial statements.

(f) Includes ~~acquisition~~build-~~related~~to-suit ~~costs~~transactions ~~and~~that ~~fees~~are reflected as the total commitment for ~~business~~the ~~combinations~~build-to-suit funding, and investments in unconsolidated joint ventures, which ~~are~~include ~~expensed~~our equity investments in ~~the~~real ~~consolidated~~estate ~~financial~~(Note ~~statements~~6).

(g) Includes refinancings, ~~on a consolidated basis,~~ of $~~277~~180.70 million, $5277.97 million, and $245.9 million obtained during the years ended December 31, ~~2016~~2017, ~~2015~~2016, and ~~2014~~2015, respectively.

(h) Financing on a pro rata basis during the year ended December 31, ~~2016~~2017 and ~~2014~~2016 includes our share of the ~~non-recourse~~ mortgage financing related to certain of our joint venture investments.

(i) Many of our lease agreements include contractual increases indexed to changes in the CPI or similar indices in the jurisdictions in which the properties are located.

CPA®:17 – Global ~~2016~~2017 10-K – 37

Net-Leased Portfolio

The tables below represent information about our net-leased portfolio on a ~~consolidated and~~ pro rata basis and, accordingly, exclude all operating properties at December 31, ~~2016~~2017. See Terms and Definitions below for a description of pro rata amounts and ABR.

Top Ten Tenants by ABR

(dollars in thousands~~, except percentages~~)

				Consolidated				Pro Rata
Tenant/Lease Guarantor	Property Type	Tenant Industry	Location	ABR		Percent
Tenant/Lease Guarantor	Property Type	Tenant Industry	Location	ABR		Percent		ABR		Percent
Metro Cash & Carry Italia S.p.A. (a)	Retail	Retail Stores	Germany; Italy	$	28,627	7	%
The New York Times Company	Office	Media: Advertising, Printing and Publishing	New York, NY	$	26,844	8	%	$	14,764	4	%
Konzum d.d. (referred to as Agrokor) (a) (b)	Retail; Warehouse	Grocery	Croatia	25,043		7	%
Metro Cash & Carry Italia S.p.A. (a)	Retail	Retail Stores	Germany; Italy	25,729		8	%	25,729		7	%
Advance Stores Company, Inc.	Office; Warehouse	Retail Stores	Various U.S.	18,345		5	%
Agrokor d.d. (a)	Retail; Warehouse	Grocery	Croatia	20,629		6	%	21,821		6	%
Kesko Senukai (a)	Retail; Warehouse	Retail Stores	Estonia; Latvia; Lithuania	15,006		4	%
General Parts, Inc.	Office; Warehouse	Retail Stores	Various U.S.	18,345		5	%	18,345		5	%
The New York Times Company	Office	Media: Advertising, Printing and Publishing	New York, NY	14,986		4	%
Lineage Logistics Holdings, LLC	Warehouse	Business Services	Various U.S.	14,~~024~~375		4	%	~~14,024~~		4	%
KBR, Inc.	Office	Business Services	Houston, TX	1312,~~786~~567		43	%	~~13,786~~		4	%
Blue Cross and Blue Shield of Minnesota, Inc.	~~Office~~Education Facility; ~~Other~~Office	Insurance	Various MN	12,~~206~~450		43	%	~~12,206~~		3	%
IDL Master Tenant, LLC	Retail	Retail Stores	Orlando, FL	10,290		3	%	10,290		3	%
Hellweg Die Profi-Baumärkte GmbH & Co. KG (referred to as Hellweg 2) (a)	Retail	Retail Stores	Germany	12,195		3	%
Eroski Sociedad Cooperativa (a)	Retail; Warehouse	Grocery	Spain	8,704		3	%	9,347		3	%
Jumbo Logistiek Vastgoed B.V. (a)	Warehouse	Grocery	Netherlands	11,041		3	%
FM Logistics (a)	Industrial; Warehouse	Cargo Transportation	Czech Republic, Poland, Slovakia	8,617		3	%	8,617		2	%
Total				$	164,635	43	%
Total				$	159,174	48	%	$	148,929	41	%

__________


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

~~CPA®:17~~(b) –In ~~Global~~April 2016, ~~10-K~~the –Croatian 38government passed a special law assisting the restructuring of companies considered of systematic 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 the financial difficulties and the uncertainty regarding future rent collections from the tenant, we recorded bad debt expense of $8.1 million during the year ended December 31, 2017. In addition, during the year ended December 31, 2017, we recognized impairment charges of $3.8 million on a property within the Agrokor portfolio that we consolidate and a $4.3 million impairment charge on our Agrokor equity method investment.

CPA:17 – Global 2017 10-K – 38

Portfolio Diversification by Geography

(dollars in thousands~~, except percentages~~)

	Consolidated				Pro Rata
	Pro Rata
Region	ABR		Percent		~~ABR~~		~~Percent~~
United States
South	$	66,847	20	%	$	72,480	20	%
Midwest	$	70,815	18	%
Midwest	64,103		19	%	69,108		19	%
South	61,052		16	%
East	5745,~~745~~715		1712	%	~~45,036~~		13	%
West	31,~~985~~199		108	%	~~30,348~~		8	%
United States Total	~~220~~208,~~680~~781		6654	%	~~216,972~~		60	%
International
Italy	24,222		7	%	24,222		7	%
Poland	29,851		8	%
Poland	22,030		7	%	26,056		7	%
Italy	26,912		7	%
Croatia	2025,~~629~~043		67	%	~~21,821~~		6	%
Spain	16,170		5	%	16,813		5	%
Germany	21,306		6	%
Germany	9,961		3	%	18,778		5	%
Spain	19,527		5	%
United Kingdom	4,776		2	%	4,776		1	%
Netherlands	16,612		4	%
Lithuania	411,~~283~~075		13	%	~~4,283~~		2	%
The Netherlands	3,574		1	%	14,542		4	%
United Kingdom	5,253		1	%
Other (a)	617,~~674~~472		25	%	~~12,120~~		3	%
International Total	~~112~~173,~~319~~051		3446	%	~~143,411~~		40	%
Total	$	~~332~~381,~~999~~832	100	%	$	~~360,383~~	~~100~~	%

__________

(a) ~~Consolidated~~Includes ~~includes~~ ABR from tenants in Hungary, the Czech Republic, Slovakia, Japan, ~~and~~Latvia, ~~Slovakia.~~Norway, ~~Pro rata includes ABR from tenants in the aforementioned countries plus Hungary~~ and ~~Norway~~Estonia.

Portfolio Diversification by Property Type

(dollars in thousands~~, except percentages~~)

	Consolidated				Pro Rata
	Pro Rata
Property Type	ABR		Percent		~~ABR~~		~~Percent~~
Office	$	102,860	31	%	$	100,477	28	%
Warehouse	$	107,688	28	%
Warehouse	82,762		25	%	98,283		27	%
Office	102,858		27	%
Retail	7794,~~849~~555		2325	%	~~87,278~~		24	%
Industrial	5154,~~934~~608		1614	%	~~52,594~~		15	%
Other (a)	1722,~~594~~123		56	%	~~21,751~~		6	%
Total	$	~~332~~381,~~999~~832	100	%	$	~~360,383~~	~~100~~	%

__________

(a) ~~Consolidated~~Includes ~~includes~~ ABR from tenants with the following property types: education facility, fitness facility, self-storage, land, and net-leased student housing ~~and land~~. ~~Pro rata includes ABR from tenants with the aforementioned property types and self-storage.~~

CPA®:17 – Global ~~2016~~2017 10-K – 39

Portfolio Diversification by Tenant Industry

(dollars in thousands~~, except percentages~~)

	Consolidated				Pro Rata
	Pro Rata
Industry Type	ABR		Percent		~~ABR~~		~~Percent~~
Retail Stores	$	90108,~~173~~759	2728	%	$	~~102,549~~	28	%
Business Services	37,506		11	%	40,015		11	%
Grocery	52,004		14	%
Media: Advertising, Printing, and Publishing	30,768		9	%	18,688		5	%
Business Services	38,717		10	%
Grocery	29,333		9	%	45,072		13	%
Media: Advertising, Printing, and Publishing	18,526		5	%
Capital Equipment	14,287		4	%	14,287		4	%
Insurance	16,215		4	%
Consumer Services	13,282		4	%	13,376		4	%
Cargo Transportation	16,057		4	%
Insurance	12,206		4	%	15,898		4	%
Capital Equipment	14,685		4	%
Cargo Transportation	12,098		4	%	13,553		4	%
Consumer Services	13,533		4	%
Telecommunications	1011,~~747~~549		3	%	~~10,770~~		3	%
Automotive	10,~~427~~299		3	%	~~9,434~~		3	%
Non-Durable Consumer Goods	9,495		3	%	7,441		2	%
Media: Broadcasting and Subscription	10,244		3	%
Healthcare and Pharmaceuticals	9,~~375~~581		3	%	~~9,375~~		3	%
Media: Broadcasting and Subscription	9,181		3	%	9,181		3	%
Banking	9,226		2	%
Hotel, Gaming, and Leisure	89,~~888~~111		32	%	~~8,926~~		2	%
Beverage, Food, and Tobacco	8,~~373~~864		32	%	~~8,373~~		2	%
High Tech Industries	7,060		2	%	6,026		2	%
Containers, Packing, and Glass	7,671		2	%
Banking	4,611		1	%	8,575		2	%
Non-Durable Consumer Goods	7,503		2	%
Containers, Packing, and Glass	3,886		1	%	7,540		2	%
High Tech Industries	6,496		2	%
Other (a)	1112,~~303~~792		3	%	~~11,304~~		3	%
Total	$	~~332~~381,~~999~~832	100	%	$	~~360,383~~	~~100~~	%

__________

(a) Includes ABR from tenants in the following industries: wholesale; construction and building; aerospace and defense; consumer transportation; chemicals, plastics, and rubber; ~~construction and building; consumer transportation;~~ durable consumer goods; ~~environmental~~real ~~industries~~estate; ~~finance;~~ metals and mining; ~~real estate~~finance; and ~~wholesale~~environmental industries.

CPA®:17 – Global ~~2016~~2017 10-K – 40

Lease Expirations

(dollars in thousands~~, except percentages and number of leases~~)

	Consolidated (a)					Pro Rata (a)
	Pro Rata
Year of Lease Expiration	Number of Leases Expiring	ABR		Percent		Number of Leases Expiring	ABR		Percent
Year of Lease Expiration (a)	Number of Leases Expiring	ABR		Percent
2017 (b)	14	4,062		1	%	16	1,561		—	%
2018 (b)	14	$	1,472	—	%
2018	2	124		—	%	5	146		—	%
2019	4	2,469		1	%
2019	5	2,481		1	%	5	2,481		1	%
2020	5	279		—	%
2020	6	313		—	%	6	313		—	%
2021	7	1,792		1	%
2021	8	2,028		1	%	8	1,641		—	%
2022	4	4,262		1	%
2022	1	2,606		1	%	2	4,059		1	%
2023	7	4,773		1	%
2023	2	305		—	%	6	4,203		1	%
2024	11	33,752		9	%
2024	7	38,972		12	%	11	32,344		9	%
2025	16	24,320		6	%
2025	17	23,477		7	%	17	23,477		7	%
2026	17	27,401		7	%
2026	11	11,471		3	%	17	22,439		6	%
2027	22	31,243		8	%
2027	22	29,839		9	%	22	29,839		8	%
2028	26	41,396		11	%
2028	26	38,029		11	%	28	42,254		12	%
2029	4	6,543		2	%
2029	4	6,194		2	%	4	6,194		2	%
2030	21	56,415		15	%
2030	21	53,263		16	%	22	64,107		18	%
2031	7	24,210		6	%
Thereafter	4260	~~119~~121,~~835~~505		3632	%	45	~~125,325~~		35	%
Total	~~188~~225	$	~~332~~381,~~999~~832	100	%	~~214~~	$	~~360,383~~	~~100~~	%

__________


(a)	Assumes tenant does not exercise any renewal option.

(b) Month-to-month leases with ABR oftotaling $01.41 million are included in ~~2017~~2018 ABR.

~~Self-Storage~~Operating ~~Summary~~Properties

~~Our~~At ~~self-storage properties had an average occupancy rate of 93.0% at~~ December 31, ~~2016~~2017, ~~and~~our operating properties were comprised as follows (square footage in thousands):

State	Number of Properties	Square Footage
Illinois	13	~~834~~710
California	7	476
Florida (a)	5	452
New York	5	335
Florida	4	327
Hawaii	4	259
Georgia	2	79
North Carolina	1	80
Texas	1	75
Consolidated Total	37	2,465
Total	38	2,466

~~CPA®:17 – Global 2016 10-K – 41~~__________


(a)	Includes one hotel property that we consolidate (Note 4).

CPA:17 – Global 2017 10-K – 41

Terms and Definitions

Pro Rata Metrics — The portfolio information above contains 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 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 and reflects exchange rates as of ~~the~~December 31, ~~date of this Report~~2017. 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.

Financial Highlights

(in thousands)

	Years Ended December 31,
	2016			2015			2014
	2017			2016			2015
Total revenues	$	~~440~~447,~~362~~654		$	~~426~~440,~~947~~362		$	~~396~~426,~~706~~947
Net income attributable to CPA®:17 – Global	190,345			84,205			74,151
Net income attributable to CPA:17 – Global	97,287			190,345			84,205
Cash distributions paid	~~220~~224,~~991~~964			~~215~~220,~~914~~991			~~209~~215,~~054~~914
Net cash provided by operating activities	~~211~~257,~~369~~034			~~243~~211,~~884~~369			~~210~~243,~~055~~884
Net cash provided by (used in) investing activities	986,~~316~~676			~~(348~~98,~~065~~316		)	(~~214~~348,~~927~~065		)
Net cash used in financing activities	(~~182~~427,~~523~~021		)	(9182,~~709~~523		)	(~~126~~9,~~182~~709		)
Supplemental financial measures:
FFO attributable to CPA®:17 – Global (a)	245,557			224,760			195,883
FFO attributable to CPA:17 – Global (a)	259,947			245,557			224,760
MFFO attributable to CPA®:17 – Global (a)	225,010			199,883			194,636
MFFO attributable to CPA:17 – Global (a)	237,558			225,010			199,883
Adjusted MFFO attributable to CPA®:17 – Global (a)	234,541			210,945			202,837
Adjusted MFFO attributable to CPA:17 – Global (a)	235,794			234,541			210,945

__________

(a) We consider the performance metrics listed above, including Funds from ~~Operations~~operations, or FFO, ~~Modified funds from operations, or~~ MFFO, and Adjusted modified funds from operations, or Adjusted MFFO, which are supplemental measures that are not defined by GAAP, both 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.

Consolidated Results

Revenues and Net Income Attributable to CPA®:17 – Global

~~2016~~2017 vs. ~~2015~~2016 — Total revenues increased by $7.3 million during ~~2016~~2017 as compared to ~~2015~~2016, primarily due to ana ~~increase~~$15.7 inmillion ~~lease~~write-off ~~revenues driven by new acquisitions and the acceleration~~ of a below-market lease ~~from~~intangible aliability ~~tenant~~related ~~of a domestic property pursuant~~ to a lease modification/termination ~~agreement,~~on ~~partially~~the ~~offset~~property byleased ~~bankruptcy~~to ~~settlement~~KBR, ~~claim~~Inc., ~~proceeds~~which ~~received~~was ~~during~~recognized ~~2015.~~in ~~Net~~Rental income ~~attributable~~in tothe ~~CPA®:17~~current –year ~~Global~~(Note ~~increased~~14). ~~during~~In ~~2016~~addition, aswe ~~compared~~had toan ~~2015,~~increase ~~primarily~~in ~~due~~revenues attributable to anour ~~aggregate~~recently ~~gain~~acquired onproperties ~~sale~~and ofan ~~real~~increase ~~estate,~~in ~~net~~interest ofincome ~~tax~~as ofa ~~$132.9~~result ~~million~~of ~~and~~certain aloan ~~gain~~receivables onthat ~~change~~originated in ~~control~~March of2017 ~~interests~~(Note of5), ~~$49.9~~all ~~million~~of ~~recognized~~which ~~during~~was ~~2016,~~partially ~~slightly~~ offset by ~~impairment~~our ~~charges~~2016 ~~totaling $29.7 million~~ and ~~loss~~2017 ~~on extinguishment of debt totaling $24~~dispositions.4 ~~million recorded during 2016.~~

CPA®:17 – Global ~~2016~~2017 10-K – 42

~~2015~~Net ~~vs.~~income ~~2014~~attributable —to ~~Total~~CPA:17 ~~revenues~~– ~~increased~~Global decreased by $93.1 million during ~~2015~~2017 as compared to ~~2014~~2016, primarily due to ana ~~increase~~gain inon ~~interest~~sale ~~income~~of ~~due~~real toestate, ~~new~~net ~~loans~~of ~~that~~tax weof ~~originated~~$132.9 inmillion, ~~2015~~which ~~and~~pertained anto ~~increase~~34 ~~in revenues from new investments acquired and build~~self-~~to-suit~~storage ~~projects~~properties ~~placed~~sold ~~into~~in ~~service~~2016 ~~after~~(Note ~~December 31~~14), ~~2014.~~a ~~Total~~gain ~~revenues~~on change in ~~2015~~control ~~also~~of ~~included~~interests of $649.39 million ofrecognized ~~proceeds~~in ~~received~~2016, ~~from~~and a ~~bankruptcy~~loss ~~settlement~~on ~~claim~~change ~~with a former tenant. These increases~~ in ~~revenues~~control ~~were partially offset by the impact~~ of ~~the~~interests ~~weakening~~ of ~~foreign~~$13.9 ~~currencies~~million ~~(primarily~~recognized ~~the~~in ~~euro) to the U~~2017.S. ~~dollar~~These onfactors ~~revenue~~were ~~from~~partially ~~our~~offset ~~foreign~~by ~~investments~~a $22.5 ~~Net~~million ~~income~~decrease ~~attributable~~in tolosses ~~CPA®:17~~on –extinguishment ~~Global~~of ~~increased~~debt ~~during 2015 as compared to 2014,~~ primarily ~~due~~related to the ~~increase~~properties sold in ~~total revenues mentioned above~~2016, ~~slightly offset by~~ a decrease in ~~gain~~interest onexpense ~~sale~~as ofa ~~real~~result ~~estate, net~~ of ~~tax~~loans ~~and~~repaid aor ~~decrease~~refinanced induring ~~equity~~2016 inand ~~earnings~~2017 ofas ~~equity~~well ~~method~~as ~~investments~~an inincrease ~~real estate. The decrease~~ in ~~gain~~foreign oncurrency ~~sale~~transaction ofgains ~~real~~that ~~estate,~~resulted ~~net~~from ~~of tax was due to~~ the ~~partial~~U.S. ~~sale~~dollar ofweakening Iagainst ~~Shops~~other ~~LLC~~currencies, onprimarily ~~which~~the ~~we recognized gains of $2.2 million and $12.4 million during 2015 and 2014~~euro, ~~respectively~~between ~~(Note~~the ~~14)~~periods.

~~FFO~~2016 ~~attributable~~vs. 2015 — Total revenues increased by $13.4 million during 2016 as compared to ~~CPA®:17~~2015, –primarily ~~Global~~due to an increase in lease revenues driven by new acquisitions and the acceleration of a below-market lease from a tenant of a domestic property pursuant to a lease termination agreement, partially offset by bankruptcy settlement claim proceeds received during 2015 and a decrease in interest income due to a loan receivable that was repaid in December 2015.

~~2016~~Net ~~vs.~~income ~~2015 — FFO~~ attributable to CPA®:17 – Global increased by $106.1 million during 2016 as compared to 2015, primarily due to the ~~$49.9~~aggregate ~~million~~ gain on ~~change~~sale inof ~~control~~real ofestate, ~~interests~~net ~~and~~of antax ~~additional~~of $10132.69 million ofand ~~income~~the ~~recognized~~gain ~~related~~on tochange ~~termination~~in ~~fees~~control onof ~~one~~interests of ~~our~~$49.9 ~~equity~~million ~~investments~~recognized during ~~the~~2016 ~~current~~discussed ~~year~~above, ~~partially~~slightly offset by ~~the~~impairment ~~loss~~charges ontotaling ~~extinguishment of debt of~~ $2429.47 million and anloss ~~impairment~~on ~~charge~~extinguishment of debt totaling $2224.84 million torecorded ~~reduce goodwill of one of our equity investments at the investee level to its fair value recognized~~ during ~~the current year~~2016.

~~2015 vs. 2014 —~~ FFO ~~attributable~~Attributable to CPA®:17 – Global increased during 2015 as compared to 2014, primarily due to the increase in total revenue slightly offset by the decrease in equity in earnings of equity method investments in real estate, which are both noted above.

~~MFFO~~2017 ~~and~~vs. ~~Adjusted~~2016 ~~MFFO~~— FFO attributable to CPA®:17 – Global increased during 2017 as compared to 2016, primarily due to foreign currency transaction fluctuations, a decrease to loss on extinguishment of debt, a reduction in interest expense as a result of loan payoffs and refinancings, and a change in deferred tax expenses. These factors were partially offset by a decrease in gain on change in control of interests.

2016 vs. 2015 — ~~MFFO~~FFO ~~and Adjusted MFFO~~ attributable to CPA®:17 – Global increased during 2016 as compared to 2015, primarily asdue ato ~~result of~~ the ~~accretive~~$49.9 ~~impact~~million ofgain ~~our~~on ~~investments~~change ~~acquired~~in orcontrol ~~placed~~of ~~into~~interests ~~service during 2015~~ and ~~2016 and~~ an additional $10.6 million of income recognized related to termination fees ~~related~~on to one of our equity investments. ~~This~~during ~~increase~~the ~~was~~current year, partially offset by athe ~~reduction~~loss inon ~~other~~extinguishment ~~real~~of ~~estate~~debt ~~income~~of as$24.4 amillion ~~result~~and an impairment charge of ~~the~~$22.8 ~~disposition~~million to reduce goodwill of 34one ~~self-storage~~of ~~properties.~~our equity investments at the investee level to its fair value recognized during 2016.

~~2015 vs. 2014 —~~ MFFO and Adjusted MFFO ~~attributable~~Attributable to CPA®:17 – Global increased during 2015 as compared to 2014, primarily as a result of the accretive impact of our investments acquired or placed into service during 2015 and 2014, partially offset by the impact of the decrease in the average U.S. dollar relative to foreign currencies (primarily the euro) between the periods.

2017 vs. 2016 — MFFO attributable to CPA®:17 – Global increased during 2017 as compared to 2016, ~~10-K~~primarily as a result of the accretive impact of our investments acquired or placed into service during 2016 and 2017, a reduction in interest expense, and a benefit from income taxes recognized in 2017. These increases were partially offset by the impact of our 2017 and 2016 dispositions and the bad debt expense recognized in connection with our Agrokor investment (Note 15). Adjusted MFFO attributable to CPA:17 – 43Global increased during 2017 as compared to 2016, primarily as a result of the accretive impact of our investments acquired or placed into service during 2016 and 2017 and a reduction of interest expense, partially offset by the impact of our recent dispositions and the bad debt expense recognized in connection with our Agrokor investment.

2016 vs. 2015 — MFFO and Adjusted MFFO attributable to CPA:17 – Global increased during 2016 as compared to 2015, primarily as a result of the accretive impact of our investments acquired or placed into service during 2015 and 2016 and an additional $10.6 million of income recognized related to termination fees related to one of our equity investments. This increase was partially offset by a reduction in other real estate income as a result of the disposition of 34 self-storage properties.

CPA:17 – Global 2017 10-K – 43

Results of Operations

We evaluate our results of operations with a primary focus on our ability to generate cash flow necessary to meet our objectives of funding distributions to stockholders and increasing the value in 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 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):

	Years Ended December 31,
	2016			2015			Change			2015			2014			Change
	2017			2016			Change			2016			2015			Change
Revenues
Lease revenues	$	~~356~~367,~~841~~632		$	~~327~~356,~~192~~841		$	2910,~~649~~791		$	~~327~~356,~~192~~841		$	~~309~~327,~~175~~192		$	1829,~~017~~649
Other real estate income - operating property revenues	46,623			49,562			(2,939		)	49,562			53,107			(3,545		)
Other real estate income — operating property revenues	40,309			46,623			(6,314		)	46,623			49,562			(2,939		)
Reimbursable tenant costs	2826,~~382~~531			28,~~631~~382			(~~249~~1,851		)	28,~~631~~382			2628,~~863~~631			~~1,768~~(249		)
Interest income and other	813,~~516~~182			218,~~562~~516			~~(13~~4,~~046~~666		)	218,~~562~~516			721,~~561~~562			14(13,~~001~~046		)
	440,362			426,947			13,415			426,947			396,706			30,241
	447,654			440,362			7,292			440,362			426,947			13,415
Operating Expenses
Depreciation and amortization:
Net-leased properties	~~108~~103,~~532~~160			94108,~~726~~532			13(5,~~806~~372		)	94108,~~726~~532			8794,~~796~~726			613,~~930~~806
Operating properties	1312,~~727~~470			1213,~~006~~727			(1,~~721~~257		)	1213,~~006~~727			1412,~~371~~006			(21,~~365~~721		)
	122,259			106,732			15,527			106,732			102,167			4,565
	115,630			122,259			(6,629		)	122,259			106,732			15,527
Property expenses:
Asset management fees	29,~~705~~363			29,~~192~~705			~~513~~(342		)	29,~~192~~705			2629,~~694~~192			~~2,498~~513
Reimbursable tenant costs	2826,~~382~~531			28,~~631~~382			(~~249~~1,851		)	28,~~631~~382			2628,~~863~~631			~~1,768~~(249		)
Operating properties	18,331			20,502			(2,171		)	20,502			25,584			(5,082		)
Net-leased properties	19,219			11,952			7,267			11,952			13,784			(1,832		)
Net-leased properties	11,952			13,784			(1,832		)	13,784			11,926			1,858
Operating properties	17,923			18,331			(408		)	18,331			20,502			(2,171		)
	88,370			92,109			(3,739		)	92,109			91,067			1,042
	93,036			88,370			4,666			88,370			92,109			(3,739		)
Impairment charges	29,706			1,023			28,683			1,023			570			453
General and administrative	15,358			16,310			(952		)	16,310			18,377			(2,067		)
General and administrative	16,310			18,377			(2,067		)	18,377			22,253			(3,876		)
Impairment charges	8,959			29,706			(20,747		)	29,706			1,023			28,683
Acquisition expenses	7,157			651			6,506			651			5,169			(4,518		)
Acquisition and other expenses	1,343			7,157			(5,814		)	7,157			651			6,506
	263,802			218,892			44,910			218,892			221,226			(2,334		)
	234,326			263,802			(29,476		)	263,802			218,892			44,910
	176,560			208,055			(31,495		)	208,055			175,480			32,575
	213,328			176,560			36,768			176,560			208,055			(31,495		)
Other Income and Expenses
Interest expense	(9888,~~813~~270		)	(9398,~~551~~813		)	(510,~~262~~543		)	(9398,~~551~~813		)	(93,~~001~~551		)	(~~550~~5,262		)
Gain on change in control of interests	49,922			—			49,922			—			—			—
Other income and (expenses)	23,231			(1,728		)	24,959			(1,728		)	1,912			(3,640		)
Loss on extinguishment of debt	(24,376		)	(275		)	(24,101		)	(275		)	(263		)	(12		)
(Loss) gain on change in control of interests	(13,851		)	49,922			(63,773		)	49,922			—			49,922
Equity in earnings of equity method investments in real estate	3,262			14,667			(11,405		)	14,667			24,073			(9,406		)
Loss on extinguishment of debt	(1,922		)	(24,376		)	22,454			(24,376		)	(275		)	(24,101		)
Other income and (expenses)	(1,728		)	1,912			(3,640		)	1,912			(1,909		)	3,821
Equity in earnings of equity method investments in real estate	261			3,262			(3,001		)	3,262			14,667			(11,405		)
	(71,733		)	(77,247		)	5,514			(77,247		)	(71,100		)	(6,147		)
	(80,551		)	(71,733		)	(8,818		)	(71,733		)	(77,247		)	5,514
Income before income taxes and gain on sale of real estate	~~104~~132,~~827~~777			~~130~~104,~~808~~827			~~(25~~27,~~981~~950		)	~~130~~104,~~808~~827			~~104~~130,~~380~~808			26(25,~~428~~981		)
Provision for income taxes	(8,477		)	(8,885		)	408			(8,885		)	(10,725		)	1,840
Benefit from (provision for) income taxes	513			(8,477		)	8,990			(8,477		)	(8,885		)	408
Income before gain on sale of real estate	96133,~~350~~290			~~121~~96,~~923~~350			~~(25~~36,~~573~~940		)	~~121~~96,~~923~~350			93121,~~655~~923			28(25,~~268~~573		)
Gain on sale of real estate, net of tax	~~132~~2,~~858~~879			2132,~~197~~858			~~130~~(129,~~661~~979		)	2132,~~197~~858			132,~~338~~197			~~(11~~130,~~141~~661		)
Net Income	~~229~~136,~~208~~169			~~124~~229,~~120~~208			~~105~~(93,~~088~~039		)	~~124~~229,~~120~~208			~~106~~124,~~993~~120			17105,~~127~~088
Net income attributable to noncontrolling interests	(38,~~863~~882		)	(3938,~~915~~863		)	~~1,052~~(19		)	(3938,~~915~~863		)	(3239,~~842~~915		)	(71,~~073~~052		)
Net Income Attributable to CPA®:17 – Global	$	190,345		$	84,205		$	106,140		$	84,205		$	74,151		$	10,054
Net Income Attributable to CPA:17 – Global	$	97,287		$	190,345		$	(93,058	)	$	190,345		$	84,205		$	106,140

CPA®:17 – Global ~~2016~~2017 10-K – 44

Lease Composition ~~and Leasing Activities~~

As of December 31, ~~2016~~2017, approximately 5162.03% of our net leases, based on ~~consolidated~~ ABR, provide for adjustments based on formulas indexed to changes in the CPI, or similar indices for the jurisdiction in which the property is located, some of which have caps and/or floors. In addition, 4535.08% of our net leases on that same basis have fixed rent adjustments, for which ~~consolidated~~ ABR is scheduled to increase by an average of 14.57% in the next 12 months. We own international investments and, therefore, lease revenues from these investments are subject to exchange rate fluctuations in various foreign currencies, primarily the euro.

~~The~~CPA:17 ~~following~~– ~~discussion~~Global ~~presents~~2017 a10-K ~~summary~~– of rents on existing properties arising from leases with new tenants, or second generation leases, and renewed leases with existing tenants for the periods presented and, therefore, does not include new acquisitions for our portfolio during the periods presented.45

2016 — During 2016, we signed seven leases totaling 210,121 square feet of leased space. Of these leases, one was with a new tenant and six were extensions with existing tenants. The weighted-average new rent for these leases is $8.17 per square foot, compared to the average former rent of $7.83 per square foot. We provided aggregate tenant improvement allowances totaling $2.5 million on two of these leases.

2015 — During 2015, we entered into ten leases totaling 210,160 square feet of leased space. Of these leases, three were with new tenants and seven were extensions with existing tenants. The weighted-average new rent for these leases was $14.54 per square foot, compared to the average former rent of $15.11 per square foot. We provided tenant improvement allowances totaling less than $0.4 million on four of these leases.

2014 — During 2014, we entered into three leases totaling 4,673 square feet of leased space. Of these leases, one was with a new tenant and two were extensions with existing tenants. The weighted-average new rent for these leases was $19.91 per square foot, compared to the average former rent of $18.14 per square foot. We provided tenant improvement allowances totaling less than $0.1 million on two of these leases.

CPA®:17 – Global 2016 10-K – 45

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 income attributable to CPA®:17 – Global (in thousands):

	Years Ended December 31,
	2016			2015			Change			2015			2014			Change
	2017			2016			Change			2016			2015			Change
Existing Net-Leased Properties
Lease revenues	$	~~286~~317,~~758~~166		$	~~286~~296,~~412~~208		$	~~346~~20,958		$	~~286~~296,~~412~~208		$	~~300~~295,~~762~~641		$	~~(14,350~~567	)
Depreciation and amortization	(7680,~~476~~653		)	(7780,~~359~~181		)	~~883~~(472		)	(7780,~~359~~181		)	(8183,~~679~~063		)	42,~~320~~882
Property expenses	(1118,~~071~~436		)	(11,~~585~~397		)	~~514~~(7,039		)	(11,~~585~~397		)	(11,~~086~~703		)	~~(499~~306		)
Property level contribution	~~199~~218,~~211~~077			~~197~~204,~~468~~630			113,~~743~~447			~~197~~204,~~468~~630			~~207~~200,~~997~~875			~~(10~~3,~~529~~755		)
Recently Acquired Net-Leased Properties
Lease revenues	5443,~~090~~532			3229,~~448~~920			2113,~~642~~612			3229,~~448~~920			312,~~695~~548			2817,~~753~~372
Depreciation and amortization	(19,~~690~~366		)	(13,~~030~~357		)	(6,~~660~~009		)	(13,~~030~~357		)	(45,~~263~~373		)	(87,~~767~~984		)
Property expenses	(~~422~~750		)	(~~1,113~~771		)	~~691~~21			(~~1,113~~771		)	(~~269~~281		)	(~~844~~490		)
Property level contribution	3323,~~978~~416			1815,~~305~~792			157,~~673~~624			1815,~~305~~792			~~(837~~6,894		)	198,~~142~~898
Existing Operating Properties
Operating property revenues	2628,~~752~~322			2526,~~312~~765			1,~~440~~557			2526,~~312~~765			2225,~~924~~652			21,~~388~~113
Operating property expenses	(1110,~~009~~549		)	(1011,~~453~~009		)	~~(556~~460		)	(1011,~~453~~009		)	(910,~~587~~663		)	(~~866~~346		)
Depreciation and amortization	(43,~~782~~860		)	(54,~~079~~782		)	~~297~~922			(54,~~079~~782		)	(5,~~744~~079		)	~~665~~297
Property level contribution	1013,~~961~~913			910,~~780~~974			12,~~181~~939			910,~~780~~974			79,~~593~~910			21,~~187~~064
Recently Acquired Operating Properties
Operating property revenues	711,~~656~~958			—7,656			74,~~656~~302			—7,656			—			—7,656
Depreciation and amortization	(68,~~658~~610		)	—(6,658		)	(61,~~658~~952		)	—(6,658		)	—			—(6,658		)
Operating property expenses	(27,~~282~~623		)	—(2,292		)	(25,~~282~~331		)	—(2,292		)	—			—(2,292		)
Property level contribution	(14,~~284~~275		)	—(1,294		)	(12,~~284~~981		)	—(1,294		)	—			—(1,294		)
Properties Sold or Held for Sale
Lease revenues	156,~~993~~934			830,~~332~~713			7(23,~~661~~779		)	830,~~332~~713			419,~~718~~003			311,~~614~~710
Operating property revenues	~~12,215~~29			2412,~~250~~202			(12,~~035~~173		)	2412,~~250~~202			3023,~~183~~910			(511,~~933~~708		)
Operating property expenses	~~(4,702~~42		)	(94,~~426~~702		)	4,~~724~~744			(94,~~426~~702		)	(159,~~342~~217		)	54,~~916~~515
Property expenses	~~(797~~174		)	(~~1,709~~112		)	~~912~~286			(~~1,709~~112		)	(12,~~226~~422		)	~~(483~~2,310		)
Depreciation and amortization	(143,~~653~~141		)	(1117,~~264~~281		)	(314,~~389~~140		)	(1117,~~264~~281		)	(1013,~~481~~217		)	(~~783~~4,064		)
Property level contribution	84,~~056~~038			1020,~~183~~820			(216,~~127~~782		)	1020,~~183~~820			718,~~852~~057			2,~~331~~763
Property Level Contribution	~~250~~255,~~922~~169			~~235~~250,~~736~~922			154,~~186~~247			~~235~~250,~~736~~922			~~222~~235,~~605~~736			1315,~~131~~186
Add other income:
Interest income and other	813,~~516~~182			218,~~562~~516			~~(13~~4,~~046~~666		)	218,~~562~~516			721,~~561~~562			14(13,~~001~~046		)
Less other expenses:
Impairment charges	(29,706		)	(1,023		)	(28,683		)	(1,023		)	(570		)	(453		)
Asset management fees	(29,363		)	(29,705		)	342			(29,705		)	(29,192		)	(513		)
Asset management fees	(29,705		)	(29,192		)	(513		)	(29,192		)	(26,694		)	(2,498		)
General and administrative	(15,358		)	(16,310		)	952			(16,310		)	(18,377		)	2,067
General and administrative	(16,310		)	(18,377		)	2,067			(18,377		)	(22,253		)	3,876
Impairment charges	(8,959		)	(29,706		)	20,747			(29,706		)	(1,023		)	(28,683		)
Acquisition expenses	(7,157		)	(651		)	(6,506		)	(651		)	(5,169		)	4,518
Acquisition and other expenses	(1,343		)	(7,157		)	5,814			(7,157		)	(651		)	(6,506		)
Other Income and Expenses
Interest expense	(9888,~~813~~270		)	(9398,~~551~~813		)	(510,~~262~~543		)	(9398,~~551~~813		)	(93,~~001~~551		)	(~~550~~5,262		)
Gain on change in control of interests	49,922			—			49,922			—			—			—
Other income and (expenses)	23,231			(1,728		)	24,959			(1,728		)	1,912			(3,640		)
Loss on extinguishment of debt	(24,376		)	(275		)	(24,101		)	(275		)	(263		)	(12		)
(Loss) gain on change in control of interests	(13,851		)	49,922			(63,773		)	49,922			—			49,922
Equity in earnings of equity method investments in real estate	3,262			14,667			(11,405		)	14,667			24,073			(9,406		)
Loss on extinguishment of debt	(1,922		)	(24,376		)	22,454			(24,376		)	(275		)	(24,101		)
Other income and (expenses)	(1,728		)	1,912			(3,640		)	1,912			(1,909		)	3,821
Equity in earnings of equity method investments in real estate	261			3,262			(3,001		)	3,262			14,667			(11,405		)
	(71,733		)	(77,247		)	5,514			(77,247		)	(71,100		)	(6,147		)
	(80,551		)	(71,733		)	(8,818		)	(71,733		)	(77,247		)	5,514
Income before income taxes and gain on sale of real estate	~~104~~132,~~827~~777			~~130~~104,~~808~~827			~~(25~~27,~~981~~950		)	~~130~~104,~~808~~827			~~104~~130,~~380~~808			26(25,~~428~~981		)
Provision for income taxes	(8,477		)	(8,885		)	408			(8,885		)	(10,725		)	1,840
Benefit from (provision for) income taxes	513			(8,477		)	8,990			(8,477		)	(8,885		)	408
Income before gain on sale of real estate	96133,~~350~~290			~~121~~96,~~923~~350			~~(25~~36,~~573~~940		)	~~121~~96,~~923~~350			93121,~~655~~923			28(25,~~268~~573		)
Gain on sale of real estate, net of tax	~~132~~2,~~858~~879			2132,~~197~~858			~~130~~(129,~~661~~979		)	2132,~~197~~858			132,~~338~~197			~~(11~~130,~~141~~661		)
Net Income	~~229~~136,~~208~~169			~~124~~229,~~120~~208			~~105~~(93,~~088~~039		)	~~124~~229,~~120~~208			~~106~~124,~~993~~120			17105,~~127~~088
Net income attributable to noncontrolling interests	(38,~~863~~882		)	(3938,~~915~~863		)	~~1,052~~(19		)	(3938,~~915~~863		)	(3239,~~842~~915		)	(71,~~073~~052		)
Net Income Attributable to CPA®:17 – Global	$	190,345		$	84,205		$	106,140		$	84,205		$	74,151		$	10,054
Net Income Attributable to CPA:17 – Global	$	97,287		$	190,345		$	(93,058	)	$	190,345		$	84,205		$	106,140

CPA®:17 – Global ~~2016~~2017 10-K – 46

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 attributable to CPA®:17 – Global as an indication of our operating performance.

Existing Net-Leased Properties

Existing net-leased properties are those we acquired or placed into service prior to January 1, ~~2014~~2015 and were not sold during the years presented. At December 31, ~~2016~~2017, we had ~~220~~224 existing net-leased properties.

~~2016~~2017 vs. ~~2015~~2016 — For the year ended December 31, ~~2016~~2017 as compared to ~~2015~~2016, property level contribution for existing net-leased properties increased by $113.74 million, primarily due to an increase in lease revenues of $021.30 million, ~~and~~partially aoffset ~~decrease~~by increases in ~~depreciation~~property expenses and ~~amortization~~depreciation ~~expenses~~ and ~~property~~amortization expenses of $07.90 million and $0.5 million, respectively. Lease revenues increased primarily due to ~~CPI-related~~the ~~rent increases of~~ $015.7 million ~~and~~write-off anof ~~increase~~a ofbelow-market ~~$0.7~~lease ~~million~~intangible ~~related~~liability tothat ~~the~~was ~~completion~~recognized ofin anRental ~~expansion~~income ofthat ~~one~~related ofto ~~our~~the ~~properties,~~KBR ~~partially~~Inc. ~~offset~~lease bymodification/termination a(Note ~~decrease~~14) ofand $01.54 million ~~related~~as toa ~~the~~result ~~decrease~~of an increase in the average exchange rate of the U.S. dollar ~~relative~~in relation to foreign currencies (primarily the euro) between the ~~periods~~years. ~~and~~Property aexpenses ~~decrease~~increased primarily due to bad debt expense of $08.61 million related to our Agrokor investment (Note 15), partially offset by a ~~lease~~refund ~~expiration~~of real estate taxes totaling $1.4 million received during 2017.

~~2015~~2016 vs. ~~2014~~2015 — For the year ended December 31, ~~2015~~2016 as compared to ~~2014~~2015, property level contribution for existing net-leased properties ~~decreased~~increased by $103.58 million, primarily due to aan ~~decrease~~increase in lease revenues of $~~14.4 million and an increase in property expenses of $~~0.56 million, ~~partially~~and ~~offset~~decreases ~~by a decrease~~ in depreciation and amortization expenses and property expenses of $42.39 million. ~~Lease~~and ~~revenues were lower primarily related to a decrease of~~ $170.3 million, ~~as a result of the weakening of the average exchange rate of the U~~respectively.S. ~~dollar~~Lease ~~relative~~revenues toincreased ~~foreign currencies (primarily the euro) between the periods, partially offset~~ by ~~an increase of~~ $10.97 million ~~related~~due to the completion of ~~two~~an ~~property~~expansion ~~expansions~~of ~~and~~one ~~CPI-related~~of ~~rent~~our ~~increases~~properties ofduring ~~$1.4~~October ~~million~~2015. Depreciation and amortization ~~expenses~~ decreased primarily due to a ~~decrease~~tenant ofthat ~~$5.1~~exercised ~~million~~a ~~related~~lease torenewal ~~the~~option ~~decrease~~ in ~~the~~October ~~average~~2015 ~~exchange~~that ~~rate~~extended of the ~~U.S.~~life ~~dollar~~of ~~relative~~the toIn-place ~~foreign~~lease ~~currencies~~intangible ~~(primarily~~asset ~~the~~and ~~euro)~~reduced ~~between~~ the ~~periods,~~periodic ~~slightly~~amortization ~~offset~~expense bysubsequent ~~an increase of $0.4 million related~~ to athe ~~property~~ that ~~was placed into service during 2015~~date.

Recently Acquired Net-Leased Properties

Recently acquired net-leased properties are those that we acquired or placed into service subsequent to December 31, ~~2013~~2014. Since January 1, 2015, we have acquired 14 investments, comprised of 31 properties.

~~2016~~2017 vs. ~~2015~~2016 — For the year ended December 31, ~~2016~~2017 as compared to ~~2015~~2016, property level contribution from recently acquired net-leased properties increased by $~~15.~~7.6 million, primarily due to an increase in lease revenues of $2113.6 million as a result of the new investments that we acquired or placed into service during ~~2016~~2017 and ~~2015~~2016, ~~and a decrease in property expenses of $0.7 million,~~ partially offset by an increase in depreciation and amortization expenses of $6.70 million as a result of those new investments. The decrease in property expenses was primarily due to a reversal of bad debt reserve in 2016 that was originally recorded in 2015. This reserve was specific to a tenant that was past due on its rent payments during 2015 but has since become current with its payments.

~~2015~~2016 vs. ~~2014~~2015 — For the year ended December 31, ~~2015~~2016 as compared to ~~2014~~2015, property level contribution from recently acquired net-leased properties increased by $198.19 million, primarily due to an increase in lease revenues of $2817.84 million, ~~which~~as ~~included~~a ~~$17.1~~result ~~million~~of ~~related~~the to new ~~acquisitions~~investments ~~and~~that ~~$11.7~~we ~~million~~acquired ~~related~~or toplaced ~~properties~~into ~~that~~service ~~were~~during ~~placed~~2016 ~~into~~and ~~service~~2015, partially offset by an increase in depreciation and amortization expenses of $8.80 million and property expenses of $0.5 million as a result of those new investments.

Existing Operating Properties

Existing operating properties are those we acquired or placed into service prior to January 1, ~~2014~~2015 and were not sold during the years presented. At December 31, ~~2016~~2017, we had 32 wholly owned existing self-storage properties. Additionally, other real estate operations includes the results of operations of a parking garage attached to one of our existing net-leased properties.

~~2016~~CPA:17 ~~vs.~~– ~~2015~~Global —2017 ~~For~~10-K ~~the~~– year ended December 31, 2016, compared to 2015, property level contribution from existing operating properties increased by $1.2 million, primarily due to an increase in operating revenues of $1.4 million and a decrease in depreciation and amortization expenses of $0.3 million, partially offset by an increase in property expenses of $0.6 million, 47

~~CPA®:17~~2017 –vs. ~~Global~~2016 — For the year ended December 31, 2017, compared to 2016, ~~10-K~~property –level 47contribution from existing operating properties increased by $2.9 million, primarily due to an increase in operating revenues of $1.6 million and a decrease in depreciation and amortization expenses and property expenses of $0.9 million and $0.5 million, respectively. Operating revenues increased primarily due an increase in the storage unit rates in 2017 compared to 2016. Depreciation and amortization expense decreased primarily because certain of our intangibles assets were fully amortized during 2017 compared to a full year of amortization in 2016.

~~primarily~~2016 asvs. a2015 ~~result~~— ofFor anthe ~~increase~~year inended ~~maintenance~~December ~~costs.~~31, ~~Operating~~2016, ~~revenues~~compared to 2015, property level contribution from existing operating properties increased by $1.1 million, primarily due to an increase in ~~the~~operating ~~occupancy~~revenues ~~rate~~of $1.1 million and a decrease in ~~2016~~depreciation ~~compared~~and toamortization ~~2015~~expenses of $0.3 million, partially offset by aan ~~decrease~~increase in property expenses of $0.43 million. ~~related~~Operating torevenues ~~income~~increased ~~generated~~primarily ~~from~~due ~~the~~an ~~parking~~increase ~~garage~~in ~~attached~~the tostorage ~~one~~unit ofrate ~~our~~in ~~existing~~2016 ~~net-leased~~compared ~~properties~~to 2015.

2015 vs. 2014 — For the year ended December 31, 2015 as compared to 2014, property level contribution from existing operating properties increased by $2.2 million, primarily due an increase in operating revenues of $2.4 million and a decrease in depreciation and amortization expense of $0.7 million, partially offset by an increase in property expenses of $0.9 million. Operating revenues increased primarily due to an increase in the occupancy rate in 2015 compared to 2014.

Recently Acquired Operating Properties

Recently acquired operating properties includes ~~a jointly owned investment in~~ five self-storage properties ~~where~~in which we acquired the remaining 15% controlling interest in April 2016, ~~which~~and wethat were previously accounted for as an equity investment in real estate. As a result of the ~~acquisitions~~acquisition of the controlling interest, we ~~consolidate~~have consolidated this investment since April 2016 and reflect 100% of the property level contribution from these assets ~~for~~(Note 4). In addition, recently acquired operating properties includes the ~~year~~Shelborne ~~ended~~hotel, ~~December 31~~the ownership of which was restructured on October 3, ~~2016~~2017 by converting our underlying loan in the investment to equity and transferring the original partners’ equity interest in the investment to us (Note 4). As a result of the restructuring, we determined that this investment should no longer be accounted for as an ADC Arrangement and we consolidate this investment.

2017 vs. 2016 — For the year ended December 31, 2017 as compared to 2016, property level contribution from recently acquired operating properties decreased by $3.0 million, primarily due to an increase in property expenses and depreciation and amortization of $5.3 million and $2.0 million, respectively, partially offset by an increase in revenue of $4.3 million. Property expenses and revenues both increased primarily as a result of the activity related to the Shelborne hotel as noted above.

Properties Sold or Held for Sale

~~Properties~~For ~~sold~~the ~~and~~year ended December 31, 2017, we disposed of five net-lease properties, one of which was classified as held for sale ~~represent~~at ~~only~~December ~~those~~31, ~~properties~~2016 ~~that~~(Note ~~did~~4, ~~not~~Note ~~qualify~~14). As a result, lease revenues for ~~classification~~the asyears ~~discontinued~~ended ~~operations~~December 31, 2017 and 2016 include acceleration of below-market lease intangible liabilities of $3.3 million and $13.9 million, respectively, related to the KBR Inc. lease termination (Note 14).

~~During~~For the year ended December 31, 2016, we sold 34 self-storage properties, ~~and we had a property classified as held for sale at December 31, 2016~~ (Note 14). ~~Property~~As a result, property level contribution for 2016 includes the acceleration of certain lease intangibles pursuant to a lease termination, which had a net positive impact of $3.4 million for that period.

~~During~~We ~~the~~did ~~year~~not ~~ended~~dispose ~~December 31,~~of ~~2014,~~or weclassify ~~sold~~any aproperties ~~hotel that had been classified~~ as anheld ~~operating~~for ~~property~~sale infor the ~~consolidated~~year ~~financial~~ended ~~statements (Note 14) and recognized a gain on the sale of this hotel of $14.6 million that is included in Gain on sale of real estate~~December 31, ~~net of tax in the consolidated financial statements~~2015.

Other Revenues and Expenses

Interest Income and Other

Interest income and other primarily consists of interest earned on our loans receivable and CMBS investments, as well as other income received related to our properties.

2017 vs. 2016 — For the year ended December 31, 2017 as compared to 2016, interest income and other increased by $4.7 million, primarily as a result of the four loans originated in March 2017 in connection with the I-drive Property disposition and I-drive Wheel restructuring (Note 4, Note 5) that generated $4.8 million of interest income in the aggregate.

2016 vs. 2015 — For the year ended December 31, 2016 as compared to 2015, interest income and other decreased by $13.0 million. Contributing to this decrease was the receipt of a $6.3 million bankruptcy settlement claim with a former tenant in 2015, as well as $4.2 million in lower interest income related to a loan receivable that was repaid in December 2015. We also recognized $2.9 million of higher loan premium accretion, which was fully accreted through the loan’s originally scheduled maturity in January 2016.

~~2015~~CPA:17 ~~vs.~~– ~~2014~~Global —2017 ~~For~~10-K ~~the~~– year ended December 31, 2015 as compared to 2014, interest income and other increased by $14.0 million, primarily due to interest income totaling $6.7 million received from the loans receivable that we funded during 2015. Additionally, we received proceeds of $6.3 million from a bankruptcy settlement claim with a former tenant during 2015.48

Impairment Charges

Where the undiscounted cash flows for an asset are less than the asset’s carrying value when considering and evaluating the various alternative courses of action that may occur, we recognize an impairment charge to reduce the carrying value of the asset to its estimated fair value. Further, when we classify an asset as held for sale, we carry the asset at the lower of its current carrying value or its fair value, less estimated cost to sell. Our impairment charges are more fully described in Note 8.

For the year ended December 31, 2016, we incurred an impairment charge of $29.2 million on a property classified as Assets held for sale as of December 31, 2016 in order to reduce the carrying value of the property to its estimated fair value. The fair value measurement approximated its estimated selling price, less estimated costs to sell.

CPA®:17 – Global 2016 10-K – 48

During the years ended December 31, 2016, 2015, and 2014, we incurred other-than-temporary impairment charges of $0.5 million, $1.0 million, and $0.6 million, respectively, on our CMBS investments to reduce their carrying values to their estimated fair values as a result of non-performance.

General and Administrative

2016 vs. 2015 — For the year ended December 31, 2016 as compared to 2015, general and administrative expenses decreased by $2.1 million, primarily due to decreases in personnel and overhead reimbursement costs of $2.9 million, which was partially offset by an $0.8 million increase of investor relations expenses. The decrease in personnel and overhead reimbursement costs were primarily driven by the increase in revenue from other entities managed by WPC and its affiliates, which directly impacts the allocation of our Advisor’s expenses to us (Note 3).

2015 vs. 2014 — For the year ended December 31, 2015 as compared to 2014, general and administrative expenses decreased by $3.9 million, primarily due to decreases in investor relations expenses of $2.2 million, office expenses of $0.9 million, and other general and administrative expenses of $0.6 million. Investor relations expenses declined due to lower annual report and proxy statement costs.

Property Expenses — Asset Management Fees

2017 vs. 2016 — For the year ended December 31, 2017 as compared to 2016, asset management fees decreased by $0.3 million as a result of dispositions since December 31, 2016, slightly offset by an increase in the estimated fair market value of our real estate portfolio, both of which impact the asset base from which our Advisor earns a fee.

2016 vs. 2015 — For the year ended December 31, 2016 as compared to 2015, asset management fees increased by $0.5 million as a result of investments acquired since December 31, 2015 and an increase in the estimated fair market value of our real estate portfolio, both of which increased the asset base from which our Advisor earns a fee.

~~2015~~General ~~vs. 2014 — For the year ended December 31, 2015 as compared to 2014, asset management fees increased by $2.5 million as a result of investments acquired since December 31, 2014~~ and ~~an increase in the estimated fair market value of our real estate portfolio, both of which increased the asset base from which our Advisor earns a fee.~~Administrative

~~Acquisition~~2017 ~~Expenses~~vs. 2016 — For the year ended December 31, 2017 as compared to 2016, general and administrative expenses decreased by $1.0 million, primarily due to decreases in personnel and overhead reimbursement costs and investor relations expenses of $0.5 million and $0.4 million, respectively. The decrease in personnel and overhead reimbursement costs was primarily driven by a decrease in compensation costs incurred by WPC and its affiliates, which directly impacts the allocation of our Advisor’s expenses to us (Note 3). The decrease in investor relations expenses was primarily driven by decreases in transfer agent and proxy costs.

~~Acquisition~~2016 ~~expenses~~vs. ~~represent~~2015 ~~direct~~— ~~costs~~For ~~incurred~~the year ended December 31, 2016 as compared to ~~acquire~~2015, ~~properties~~general and administrative expenses decreased by $2.1 million, primarily due to decreases in ~~transactions~~personnel ~~that~~and ~~are~~overhead ~~accounted~~reimbursement ~~for~~costs asof ~~business~~$2.9 ~~combinations~~million, ~~whereby~~which ~~such~~was partially offset by a $0.8 million increase of investor relations expenses. The decrease in personnel and overhead reimbursement costs ~~are~~were ~~required~~primarily todriven beby ~~expensed~~the asincrease ~~incurred~~in revenue from other entities managed by WPC and its affiliates, which directly impacts the allocation of our Advisor’s expenses to us (Note 43).

~~2016~~Impairment — For the year ended December 31, 2016, Acquisition expenses totaled $7.2 million and related to the properties acquired during the year that were deemed to be business combinations, which includes $3.7 million related to the acquisition of the remaining 15% controlling interest in a portfolio of five self-storage properties that were previously accounted for as equity investments in real estate. Charges

~~2015~~Where —the ~~For~~undiscounted ~~the~~cash ~~year~~flows ~~ended~~for ~~December~~an ~~31,~~asset ~~2015,~~are ~~Acquisition~~less ~~expenses~~than ~~totaled~~the ~~$0.7~~asset’s ~~million~~carrying value when considering and ~~related~~evaluating ~~primarily~~the tovarious ~~acquisition-related~~alternative ~~costs~~courses ~~and~~of ~~fees~~action ~~incurred~~that inmay ~~connection~~occur, ~~with~~we ~~funding~~recognize ~~two~~an ~~loans~~impairment ~~totaling~~charge ~~$42~~to reduce the carrying value of the asset to its estimated fair value.6 ~~million~~Further, ~~(Note~~when 5)we classify an asset as held for sale, we carry the ~~development~~asset at the lower of ~~two~~its ~~hotels~~current carrying value or its fair value, less estimated costs to sell. Our impairment charges are more fully described in Note 8.

~~2014 —~~ For the year ended December 31, ~~2014~~2017, ~~Acquisition~~we ~~expenses~~incurred ~~totaled~~impairment charges of $58.23 million ~~and~~to ~~related~~reduce the carrying value of certain properties to ~~acquisition~~their ~~costs~~estimated ~~incurred~~fair onvalue, ~~two~~consisting ~~business~~of ~~combinations.~~the following:


•	$4.5 million, inclusive of $1.5 million attributed to a noncontrolling interest, recognized on one property in which we were notified by that the tenant will not be renewing its lease, which we expect to have difficulty replacing the tenant upon the lease expiration; and


•	$3.8 million recognized on a property within the Agrokor portfolio, which is direct result of the financial difficulties of the tenant.

For the year ended December 31, 2016, we incurred impairment charges of $29.2 million on one property classified as Assets held for sale as of December 31, 2016 in order to reduce the carrying value of the property to its estimated fair value. The fair value measurement approximated its estimated selling price, less estimated costs to sell.

For the years ended December 31, 2017, 2016 and 2015, we incurred other-than-temporary impairment charges of $0.7 million, $0.5 million, and $1.0 million, respectively, on our CMBS investments to reduce their carrying values to their estimated fair values as a result of non-performance.

Acquisition and Other Expenses

Acquisition and other 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 4). However, following our adoption of ASU 2017-01 on January 1, 2017, all investment transaction costs incurred during the year ended December 31, 2017 were capitalized since our acquisitions during the year were classified as asset acquisitions. Most of our future acquisitions are likely to be classified as asset acquisitions under this accounting standard (Note 2).

CPA:17 – Global 2017 10-K – 49

2017 — For the year ended December 31, 2017, acquisition and other expenses totaled $1.3 million, of which $0.5 million related to deal costs for transactions that have not yet been consummated and $0.5 million related to transaction costs of a property that was acquired in 2016.

2016 — For the year ended December 31, 2016, acquisition and other expenses totaled $7.2 million and related to the properties acquired during the year that were deemed to be business combinations, which includes $3.7 million related to the acquisition of the remaining 15% controlling interest in a portfolio of five self-storage properties that were previously accounted for as equity investments in real estate.

2015 — For the year ended December 31, 2015, acquisition and other expenses totaled $0.7 million and related primarily to acquisition-related costs and fees incurred in connection with funding two loans totaling $42.6 million for the development of two hotels.

Interest Expense

~~2016~~2017 vs. ~~2015~~2016 — ~~During~~For the year ended December 31, ~~2016~~2017 as compared to ~~2015~~2016, interest expense ~~increased~~decreased by $510.35 million, primarily due to ~~(i)~~a ~~$3.2~~decrease ~~million~~in ofour ~~interest~~average ~~expense~~outstanding ~~recorded during 2016 related to mortgage~~ debt ofbalance ~~$69.8~~and ~~million~~lower ~~that~~weighted weaverage ~~consolidated in connection with the acquisition of the remaining 15% controlling~~ interest inrate ~~a portfolio of five self-storage properties (Note 4), (ii) lower capitalized interest of $1.6 million~~ on our ~~build-to-suit properties, and (iii ) an increase of $0.4 million related to the increase in our~~ average outstanding debt ~~in connection with our investment activity~~ during ~~2015~~the ~~and~~years ~~2016~~presented. Our average outstanding debt balance ~~was~~decreased $231.07 ~~billion~~million ~~and $1.9 billion~~ during the ~~years~~year ended December 31, ~~2016~~2017 ~~and~~as ~~2015,~~compared ~~respectively~~to 2016. Our weighted-average interest rate was 4.40% and 4.74% during the years ended December 31, ~~2016~~2017 and ~~2015~~2016, respectively.

~~2015~~2016 vs. ~~2014~~2015 — ~~During~~For the year ended December 31, ~~2015~~2016 as compared to ~~2014~~2015, interest expense increased by $05.63 million, primarily due to (i) an$3.2 ~~increase~~million of ~~$8.6~~interest ~~million~~expense recorded during 2016 related to mortgage ~~financing~~debt ~~obtained~~of or$69.8 ~~assumed~~million that we consolidated in connection with ~~our~~the ~~investment~~acquisition ~~activity~~of ~~and~~the remaining 15% controlling interest in a portfolio of five self-storage properties (Note 4), (ii) lower capitalized interest of $1.6 million on our build-to-suit ~~projects~~properties, ~~placed~~and ~~into~~(iii ~~service~~) an increase of $0.4 million related to the increase in our average outstanding debt in connection with our investment activity during 2015 and ~~2014~~2016. ~~and~~Our ~~(ii)~~average outstanding debt balance was $2.0 billion and $1.9 ~~million~~billion ofduring the years ended December 31, 2016 and 2015, respectively. Our weighted-average interest ~~expense~~rate was 4.4% and 4.7% during the years ended December 31, 2016 and 2015, respectively.

~~CPA®:17~~Other –Income ~~Global~~and ~~2016 10-K – 49~~(Expenses)

~~incurred~~Other ~~during~~income ~~2015~~and ~~related~~(expenses) toprimarily ~~our~~consists ~~Senior~~of ~~Credit~~gains ~~Facility,~~and ~~partially~~losses ~~offset~~on byforeign ~~(i)~~currency atransactions, ~~decrease~~and ofderivative $4instruments.6 ~~million~~We ~~due~~make tointercompany ~~the~~loans ~~impact~~to ofa ~~the~~number ~~weakening~~ of our foreign ~~currencies~~subsidiaries, ~~(primarily~~most ~~the~~of ~~euro)~~which indo ~~relation~~not tohave the U.S. dollar, ~~(ii)~~as atheir ~~decrease~~functional currency. Remeasurement of ~~$3.3~~foreign ~~million~~currency ~~related~~intercompany totransactions ~~the~~that ~~impact~~are ofscheduled ~~four~~for ~~repayments~~settlement, consisting primarily of ~~non-recourse~~accrued ~~mortgage~~interest ~~loans~~and ~~during~~short-term ~~2015~~loans, ~~and~~are ~~(iii)~~included ain ~~decrease~~the determination of $1net income.0 ~~million~~We ~~related~~also torecognize ~~the~~gains ~~maturity~~or oflosses anon ~~interest~~foreign ~~rate~~currency ~~cap~~transactions when we repatriate cash from our foreign investments or hold foreign currencies in ~~August~~entities ~~2014~~designated onas ~~the~~U.S. ~~non-recourse~~dollar ~~mortgage~~functional ~~loan~~currency. ~~encumbering~~In ~~the~~addition, ~~property~~we ~~leased~~have tocertain ~~The~~derivative ~~New~~instruments, ~~York~~including ~~Times~~common ~~Company~~stock warrants, foreign currency contracts, and a swap, that are not designated as hedges for accounting purposes, for which werealized ~~did~~and ~~not~~unrealized ~~record~~gains ~~amortization~~and ~~during~~losses ~~2015~~are included in earnings. The timing and amount of such gains or losses cannot always be estimated and are subject to fluctuation.

~~Gain~~2017 — For the year ended December 31, 2017, we recognized net other income of $23.2 million, which was primarily comprised of unrealized foreign currency transaction gains related to our international investments of $18.5 million and gains on ~~Change~~derivatives inof ~~Control~~$6.6 million, partially offset by losses recognized as a result of ~~Interests~~hurricane damage totaling $2.6 million (Note 4).

~~During~~2016 — For the year ended December 31, 2016, we ~~recorded~~recognized anet ~~$49.9~~other ~~million~~expenses ~~gain on change in control~~ of ~~interests~~$1.7 inmillion, ~~connection~~which ~~with~~was ~~our~~primarily ~~acquisition~~comprised of ~~the~~unrealized ~~remaining~~foreign ~~15%~~currency ~~controlling~~transaction ~~interest~~losses inrelated ato ~~jointly~~our ~~owned~~international ~~investment~~investments inof ~~five self-storage properties that was previously accounted for as an equity method investment~~$9.4 ~~As a result of this acquisition~~million, wepartially ~~consolidate~~offset ~~this~~by ~~investment~~gains asrecognized ~~of December 31, 2016. The gain~~ on ~~change~~derivatives ~~in control represents the difference between our carrying values and the fair values~~ of ~~our~~$7.6 ~~previously held equity interests in these properties (Note 4)~~million.

2015 — For the year ended December 31, 2015, we recognized net other income of $1.9 million, which was primarily comprised of gains recognized on derivatives of $8.0 million and interest income received on our cash balances held with financial institutions of $1.3 million, partially offset by realized and unrealized foreign currency transaction losses related to our international investments of $6.6 million and other losses of $0.7 million primarily related to the write-off of a tenant purchase option that expired in July 2015.

CPA:17 – Global 2017 10-K – 50

(Loss) Gain on Change in Control of Interests

2017 — For the year ended December 31, 2017, we recorded a non-cash loss on change in control of interests of $13.9 million in connection with the Shelborne hotel restructuring, which was the difference between the carrying value from our previously held Shelborne equity investment of $118.7 million and the fair value of our 95.5% ownership interest on the date of restructuring of $104.9 million (Note 4).

2016 — For the year ended December 31, 2016, we recorded a $49.9 million gain on change in control of interests in connection with our acquisition of the remaining 15% controlling interest in a jointly owned investment in five self-storage properties, which was the difference between the carrying value from our previously held equity investment of $15.1 million and the fair value of $64.9 million on April 11, 2016 (Note 4). As a result of this acquisition, we consolidate this investment as of December 31, 2017.

Loss on Extinguishment of Debt

~~2016~~2017 — ~~During~~For the year ended December 31, ~~2016~~2017, we recognized a loss on extinguishment of debt of $241.49 million, primarily due to ~~seven~~the ~~non-recourse~~$1.3 ~~mortgage~~million ~~loans~~loss that ~~were~~related ~~defeased~~to orthe ~~refinanced during 2016, which resulted in a loss on extinguishment of debt of~~ $2360.60 million ~~primarily~~non-recourse ~~comprised~~mortgage ofloan ~~prepayment~~that ~~penalties~~was ~~and~~repaid ~~defeasance~~by ~~costs~~the ~~(Note~~buyer ~~10).~~at ~~The~~closing ~~defeasance~~in ~~was~~connection ~~primarily~~with ~~due to~~ the ~~disposition and refinancing of certain self~~I-~~storage~~drive ~~properties~~Property disposition (Note 1410).

~~During~~2016 ~~both~~— For the ~~years~~year ended December 31, ~~2015 and 2014~~2016, we recognized a loss on extinguishment of debt of $024.34 million, ~~related~~primarily due to seven non-recourse mortgage loans that were defeased or refinanced during 2016, which resulted in a loss on extinguishment of debt of $23.6 million primarily comprised of prepayment penalties and defeasance costs (Note 10). The defeasance was primarily due to the disposition and refinancing of certain self-storage properties (Note 14).

~~CPA®:17~~2015 –— ~~Global~~For ~~2016~~the ~~10-K~~year –ended 50December 31, 2015, we recognized a loss on extinguishment of debt of $0.3 million related to the refinancing of certain properties.

CPA:17 – Global 2017 10-K – 51

Equity in Earnings of Equity Method Investments in Real Estate

Equity in earnings of equity method investments in real estate is recognized in accordance with the investment agreement for each of our equity method investments and, where applicable, based upon an allocation of the investment’s net assets at book value as if the investment were hypothetically liquidated at the end of each reporting period. Further details about our equity method investments are discussed in Note 6. The following table presents the details of our Equity in earnings of equity method investments in real estate (in thousands):

	Years Ended December 31,
Lessee	~~2016~~2017			~~2015~~2016			~~2014~~2015
Net Lease:
C1000 Logistiek Vastgoed B.V. (a)	$	4,385		$	3,502		$	4,358
Apply Sørco AS (referred to as Apply) (a) (b)	$	(6,977	)	$	(1,316	)	$	491
U-Haul Moving Partners, Inc. and Mercury Partners, LP	2,448			2,437			2,344
Hellweg 2 (a) (c) (d)	5,348			572			6,586
Berry Plastics Corporation	1,671			1,640			1,384
Agrokor (a) (e)	(4,413		)	421			307
Apply Sørco AS (a) (b)	(1,316		)	491			(321		)
Jumbo Logistiek Vastgoed B.V. (a)	3,366			4,385			3,502
BPS Nevada, LLC	1,029			1,507			1,630
U-Haul Moving Partners, Inc. and Mercury Partners, LP	2,449			2,448			2,437
Tesco plc (a)	817			701			419
Berry Global Inc.	1,767			1,671			1,640
State Farm	721			787			734
BPS Nevada, LLC	1,222			1,029			1,507
Eroski Sociedad Cooperativa — Mallorca (a) (c)	663			649			(146		)
Kesko Senukai (a) (f)	1,004			—			—
Bank Pekao S.A. (a) (d)	662			707			(3,349		)
Tesco Global Aruhazak Zrt. (a)	908			817			701
Hellweg Die Profi-Baumärkte GmbH & Co. KG (referred to as Hellweg 2) (a) (e)	572			6,586			1,619
Bank Pekao S.A. (a)	836			662			707
Agrokor d.d. (referred to as Agrokor 5) (a)	421			307			413
State Farm Automobile Co.	759			721			787
Dick’s Sporting Goods, Inc.	121			115			105
Eroski Sociedad Cooperativa — Mallorca (a)	646			663			649
	12,194			19,429			9,190
Dick’s Sporting Goods, Inc.	194			121			115
	7,109			12,194			19,429
Self-Storage:
Madison Storage NYC, LLC and Veritas Group IX-NYC, LLC (f)	(433		)	(1,858		)	(2,033		)
Madison Storage NYC, LLC and Veritas Group IX-NYC, LLC (g)	—			(433		)	(1,858		)
	(433		)	(1,858		)	(2,033		)
	—			(433		)	(1,858		)
All Other:
Shelborne Property Associates, LLC (g)	(8,852		)	2,082			5,263
Shelborne Operating Associates, LLC (referred to as Shelborne) (h) (i) (j)	(8,697		)	(8,852		)	2,082
BPS Nevada, LLC - Preferred Equity (h)	3,193			2,670			170
BG LLH, LLC (k)	1,326			297			(4,867		)
IDL Wheel Tenant, LLC (i)	(3,137		)	(2,789		)	—
BPS Nevada, LLC — Preferred Equity (l)	1,211			3,193			2,670
BG LLH, LLC (j)	297			(4,867		)	11,483
IDL Wheel Tenant, LLC (m)	(688		)	(3,137		)	(2,789		)
	(8,499		)	(2,904		)	16,916
	(6,848		)	(8,499		)	(2,904		)
Total equity in earnings of equity method investments in real estate	$	~~3,262~~261		$	143,~~667~~262		$	2414,~~073~~667

__________


(a)	Amounts include impact of fluctuations in the exchange rate of the applicable foreign currency.

(b) ~~On October 31, 2014, we and CPA®:18 – Global acquired an office facility leased to Apply Sørco AS through this investment.~~ Amount for ~~2016~~2017 includes an other-than-temporary impairment charge of $16.93 million recognized on ~~our~~this investment (Note 8).

(c) ~~Amount~~The ~~for~~increase ~~2014~~in ~~includes~~equity anearnings ~~other-than-temporary~~was ~~impairment~~due ~~charge~~to ofa ~~$0.8~~reduction ~~million~~in ~~recognized~~interest onexpense for the ~~investment~~year ~~due~~ended toDecember 31, 2017 as compared 2016, which was the result of a ~~decline~~related mortgage loan that was repaid in ~~market~~January ~~conditions~~2017 (Note 86).

(d) ~~The~~Amount ~~amount~~ for ~~2014~~the ~~includes~~year ~~our~~ended ~~$4.2~~December ~~million~~31, ~~share~~2015 ofincludes ~~acquisition expenses incurred by~~ the ~~investment,~~recognition ~~through~~of ~~which~~tax webenefits ~~and~~of ~~CPA®:18~~$6.2 –million ~~Global~~as ~~acquired~~ an ~~office~~outcome ~~facility~~of ~~leased~~the totax ~~Bank~~audits ~~Pekao~~for ~~S.A.~~the onprior ~~March 31, 2014~~years.

(e) ~~The~~Amount ~~decrease~~for in2017 ~~income~~includes ~~primarily relates to the recognition of tax benefits as~~ an ~~outcome~~other-than-temporary ofimpairment ~~the~~charge ~~tax audits for the prior years. The lower tax assessments for 2013 led to a tax benefit adjustment~~ of $64.23 million ~~during~~recognized ~~the~~on ~~year~~this ~~ended~~investment ~~December 31, 2015~~ (Note 68).

(f) InOn ~~April~~May ~~2016~~23, 2017, we ~~purchased~~entered ~~the~~into ~~remaining~~a ~~15%~~joint ~~controlling~~venture investment to acquire a 70% interest in ~~this~~a ~~equity~~real ~~investment~~estate ~~and~~portfolio ~~therefore~~for ~~consolidated~~a ~~this~~total ~~investment~~cost ~~since~~of $141.5 million, which excludes our portion of non-recourse mortgage financing totaling $88.0 million (dollar amounts are based on the exchange rate of the euro on the date of ~~purchase~~acquisition) (Note 46).

~~CPA®:17~~(g) –In ~~Global~~April 2016, ~~10-K~~we –purchased 51the remaining 15% controlling interest in this equity investment and therefore consolidated this investment since the date of purchase (Note 4).

~~(g)~~CPA:17 ~~The~~– ~~amount~~Global ~~for~~2017 ~~2016 includes a $22.8 million impairment charge to reduce goodwill at the investee level to its fair value partially offset by $~~10.6-K ~~million~~– of income recognized in conjunction with the termination of a management agreement and a $10.6 million gain representing the portion of losses guaranteed by the previous management company under the terms of the management agreement. In addition, we recognized $7.3 million of total losses related to this investment during 2016, which primarily relate to capital contributions from our partners to partially fund cumulative losses that had previously been recognized on our investment as a result of applying the hypothetical liquidation book value model. The decrease in equity earnings recognized in 2015 as compared to 2014 was primarily because we were required to absorb more losses during 2015 since the other partners’ capital balances were reduced to zero.52

(h) ~~The~~On ~~increase~~October in3, ~~equity~~2017, ~~earnings~~we ~~recognized~~restructured inour ~~2015~~Shelborne ashotel ~~compared~~investment toby ~~2014~~converting ~~was~~the ~~related~~underlying loan to equity and, in addition, each of the ~~preferred~~partners transferred their equity ~~position~~interest in the investment ~~that~~to weus. ~~acquired~~As ona ~~November~~result 19of the restructuring, ~~2014~~we ~~and~~determined ~~February~~that 2,this ~~2015~~investment should no longer be accounted for as an ADC Arrangement (Note 4). Upon restructuring, inwe ~~two~~obtained ~~separate~~approximately ~~tranches~~95.5% ~~The~~(increased ~~preferred~~from ~~equity~~33%) ~~position~~of ~~provided~~the interest in the entity which simultaneously satisfied the outstanding mortgage loans on the property due to us. We concluded that we should consolidate this investment with the remaining 4.5% noncontrolling interest held by one of the original joint venture partners. During the year ended December 31, 2017, we recognized a ~~preferred~~loss ~~rate~~on change in control of ~~return~~interests ~~between~~of 8%$13.9 ~~and~~million ~~12%~~as ~~during~~a ~~2015~~result of this restructuring.

(i) ~~This~~For ~~build-~~the year ended December 31, 2017, as a result of Hurricane Irma and prior to~~-suit~~ the restructuring of this investment, ~~was~~we ~~placed~~incurred ~~into~~damage ~~service~~at the hotel, which we currently expect to be covered by insurance after the estimated deductible of $1.7 million is paid (Note 4). We recognized this charge within Equity in ~~May~~earnings ~~2015~~of ~~and~~equity ~~operated~~method atinvestments ain ~~loss~~real ~~for~~estate ~~2016~~on ~~and~~our ~~2015~~consolidated financial statements.

(j) The ~~increase~~amount infor 2016 ~~was~~includes ~~driven~~a by$22.8 ~~the~~million ~~increase~~impairment incharge ~~operating~~to ~~income~~reduce ~~related~~goodwill toat ~~increased~~the ~~profitability~~investee ~~and~~level ~~margins.~~to ~~This~~its ~~investment~~fair ~~also~~value ~~recognized~~partially aoffset ~~gain~~by on$10.6 ~~sale~~million ~~related~~of toincome ~~two~~recognized ~~dispositions~~ in ~~the~~conjunction ~~third~~with ~~quarter~~the termination of ~~2016.~~a Inmanagement ~~addition,~~agreement inand ~~2016,~~a ~~this~~$10.6 ~~investment~~million ~~recognized~~gain arepresenting ~~bargain~~the ~~purchase~~portion ~~gain~~of ~~related~~losses toguaranteed anby ~~acquisition~~the ~~and~~previous amanagement ~~gain~~company onunder ~~sale~~the ~~related~~terms toof ~~disposition~~the management agreement. ~~These~~In ~~increases~~addition, ~~were~~we ~~partially~~recognized ~~offset~~$7.3 bymillion ~~additional~~of ~~expenses~~total losses related to athis ~~refinancing~~investment induring 2016., ~~This~~which ~~investment~~primarily ~~operated~~relate atto acapital ~~loss~~contributions ~~for~~from ~~2015.~~our ~~Amount~~partners ~~for~~to ~~2014~~partially ~~includes~~fund ~~equity~~cumulative ~~earnings~~losses ofthat ~~$11.5~~had ~~million,~~previously ~~which~~been ~~was~~recognized ~~primarily~~on ~~comprised of~~ our ~~share~~investment ofas a ~~bargain~~result ~~purchase~~of ~~gain~~applying ~~recorded by~~ the ~~investment~~hypothetical ~~during~~liquidation ~~the~~book ~~year~~value model.

~~Other~~(k) ~~Income~~The ~~and~~increase ~~(Expenses)~~in equity earnings for the year ended December 31, 2017 as compared to 2016 was primarily due to the write off of deferred financing costs during 2016 as a result of debt restructuring on this investment.

~~Other income and~~ (~~expenses~~l) ~~primarily~~This ~~consists~~investment ofrepresents ~~gains~~a ~~and~~preferred ~~losses~~equity ~~on foreign currency transactions~~interest, ~~and~~with ~~derivative instruments. We make intercompany loans to~~ a ~~number~~preferred rate of ~~our~~return ~~foreign subsidiaries, most~~ of ~~which do not have the U~~12%.S. ~~dollar~~On asMay ~~their functional currency. Remeasurement of foreign currency intercompany transactions that are scheduled for settlement~~19, ~~consisting primarily of accrued interest and short term loans~~2017, ~~are~~we ~~included~~received in the ~~determination~~full repayment of ~~net income. We also recognize gains or losses on foreign currency transactions when we repatriate cash from~~ our ~~foreign~~preferred ~~investments~~equity orinterest ~~hold~~totaling ~~foreign currencies in entities designated as U~~$27.S.0 ~~dollar~~million; ~~functional currency. In addition~~therefore, wethe ~~have~~preferred ~~certain~~equity ~~derivative~~interest ~~instruments,~~is ~~including~~now common stock warrants, foreign currency contracts, and a swaption, that are not designated as hedges for accounting purposes, for which realized and unrealized gains and losses are included in earningsretired. ~~The timing and amount of such gains or losses cannot always be estimated and are subject to fluctuation.~~

~~2016~~(m) —This ~~During~~investment ~~the~~was ~~year~~restructured ~~ended~~on ~~December~~March 3117, ~~2016~~2017 and, weas ~~recognized~~a ~~net other expenses of $1.7 million~~result, ~~which~~we ~~was~~have ~~primarily~~reclassified ~~comprised~~the ofequity ~~unrealized~~investment ~~foreign currency transaction losses related~~ to ~~our~~a ~~international~~loan ~~investments~~receivable, ofincluded ~~$9.4~~in ~~million~~Other assets, ~~partially~~net ~~offset~~in bythe ~~gains~~consolidated ~~recognized~~financial onstatements ~~derivatives~~(Note ~~of $7~~4).~~6 million.~~

~~2015~~Benefit —from ~~During~~(Provision ~~the~~for) ~~year~~Income ended December 31, 2015, we recognized net other income of $1.9 million, which was primarily comprised of gains recognized on derivatives of $8.0 million and interest income received on our cash balances held with financial institutions of $1.3 million, partially offset by realized and unrealized foreign currency transaction losses related to our international investments of $6.6 million and other losses of $0.7 million primarily related to the write-off of a purchase option which expired in July 2015.Taxes

~~2014~~Our —provision ~~During~~for ~~the~~income ~~year~~taxes ~~ended~~is ~~December 31, 2014, we recognized net other expenses of $1.9 million, which was~~ primarily ~~comprised of realized and unrealized foreign currency transaction losses~~ related to our international ~~investments~~properties ~~of $7.4 million, partially offset by gains recognized on derivatives of $3.0 million~~ and ~~interest~~taxable ~~income of $2~~subsidiaries.~~4 million.~~

~~Provision~~2017 — For the year ended December 31, 2017, we recorded a benefit for ~~Income~~income ~~Taxes~~taxes of $0.5 million, comprised of deferred income tax benefits of $4.5 million and current income taxes of $4.0 million. The current year benefit for income taxes includes the impact of the Tax Cuts and Jobs Act, which was signed into law on December 22, 2017, and lowered the U.S. corporate income tax rate from 35% to 21%. As a result, we recognized a deferred tax benefit of $6.6 million for the year ended December 31, 2017 related to one of our domestic investments.

~~Our~~2016 — For the year ended December 31, 2016, we recorded a provision for income taxes isof ~~primarily~~$8.5 ~~related~~million, tocomprised ~~our~~of ~~international~~deferred ~~properties~~income taxes of $4.7 million and current income taxes of $3.8 million.

~~2016~~2015 — ~~During~~For the year ended December 31, ~~2016~~2015, we recorded a provision for income taxes of $8.59 million, comprised of deferred income taxes of $4.72 million and current income taxes of $34.87 million.

2015 — During the year ended December 31, 2015, we recorded a provision for income taxes of $8.9 million, comprised of deferred income taxes of $4.2 million and current income taxes of $4.7 million.

2014 — During the year ended December 31, 2014, we recorded a provision for income taxes of $10.7 million, comprised of deferred income taxes of $7.7 million and current income taxes of $3.0 million.

CPA®:17 – Global 2016 10-K – 52

Gain on Sale of Real Estate, Net of Tax

Gain on sale of real estate, net of tax consists of gain on the sale of properties that were sold.

2017 — For the year ended December 31, 2017, we recognized a gain on sale of real estate, net of tax of $2.9 million as a result of the sale of four net-lease properties and a parcel of land (Note 14).

2016 — During the year ended December 31, 2016, we recognized a gain on sale of real estate, net of tax of $132.9 million as a result of the sale of 34 self-storage properties (Note 14).

2015 — During the year ended December 31, 2015, we recognized a deferred gain on sale of real estate, net of tax of $2.2 million asthat awas ~~result~~related ofto ~~the~~an ~~partial~~equity ~~sale~~option ~~related~~that toexpired Iin ~~Shops~~2015 ~~LLC,~~that orrelated ~~the~~to Ia ~~Shops~~partial ~~Partial~~sale ~~Sale,~~that ~~which~~ occurred in 2014 (Note 14).

~~2014~~CPA:17 —– ~~During~~Global ~~the~~2017 ~~year~~10-K ~~ended~~– December 31, 2014, we recognized a $12.4 million gain on sale of real estate, net of tax as a result of the I Shops Partial Sale. In addition, we recognized a $0.8 million gain on sale of real estate, net of tax as a result of granting an easement at one of our properties (Note 14).53

Net Income Attributable to Noncontrolling Interests

2017 vs. 2016 — For the year ended December 31, 2017 as compared to 2016, net income attributable to noncontrolling interests increased by less than $0.1 million, primarily due to an increase of $1.9 million in the Available Cash Distribution paid to our Advisor (Note 3), partially offset by a decrease related to one of our jointly owned investments that recognized an impairment charge in 2017.

2016 vs. 2015 — For the year ended December 31, 2016 as compared to 2015, net income attributable to noncontrolling interests decreased by $1.1 million, primarily due to a decrease of $1.1 million related to income generated from certain of our joint-venture investments, which included a $2.1 million gain of our affiliate’s share of proceeds from a bankruptcy settlement claim with a former tenant received during the second quarter of 2015.

2015 vs. 2014 — For the year ended December 31, 2015 as compared to 2014, net income attributable to noncontrolling interests increased by $7.1 million, primarily due to an increase of $4.2 million in the distribution of available cash of the Operating Partnership, which we refer to as the Available Cash Distribution, paid to our Advisor as a result of our investment activity since December 31, 2014. As discussed in Note 3, our Advisor owns a 0.01% special general partner interest in our Operating Partnership entitling it to up to 10% of the available cash of our Operating Partnership, as defined in the partnership agreement. Additionally, our affiliate’s share of proceeds from a bankruptcy settlement claim with a former tenant received during the second quarter of 2015 was $2.1 million.

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, financings, or unused capacity under our Senior Credit Facility. 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 affected adversely 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 the debt thereon, arrange for the leveraging of any previously unfinanced property, or reinvest the proceeds of financings or refinancings in additional properties.

Sources and Uses of Cash During the Year

~~We expect to continue to invest in a diversified portfolio of income-producing commercial properties and other real estate-related assets.~~ 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 the proceeds from, and the repayment of, non-recourse mortgage loans 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 Distribution to our Advisor; and changes in foreign currency exchange rates. Despite these fluctuations, we believe our investments will generate sufficient cash from operations and from equity distributions in excess of equity income in real estate 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, unused capacity under our Senior Credit Facility, 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 year are described below.

~~CPA®:17~~2017 ~~– Global 2016 10-K – 53~~

Operating Activities — Net cash provided by operating activities increased by $45.7 million during 2017 as compared to 2016, primarily due to a reduction in the loss on extinguishment of debt related to prepayment penalties on certain loans encumbering the self-storage properties that were sold in 2016, a reduction in interest expense related to those loans, a reduction in acquisition expenses since we did not have any acquisitions that were classified as business combinations in 2017, an increase in the cash flows generated from our 2016 and 2017 acquisitions, and past due receivables collected on our I-drive Property, which were partially offset by a decrease in the rent collected on our Agrokor investments (Note 8).

Investing Activities — Our investing activities are generally comprised of real estate-related transactions (purchases and sales), payment of deferred acquisition fees to our Advisor related to asset acquisitions, and capitalized property-related costs. During 2017, we used $153.5 million to fund capital contributions to our equity investments in real estate, primarily due to the $90.3 million contribution for Hellweg 2 mortgage loan payoffs and $51.3 million for our Kesko Senukai investment (Note 6), and received $40.0 million as a return of capital from our equity method investments. We completed the sale of five net-lease properties for total proceeds of $111.2 million, net of selling costs (Note 14). We also received proceeds from the repayment of a preferred equity interest of $27.0 million (Note 6) and we funded $12.0 million and $10.8 million for build-to-suit expansion projects and a real estate acquisition, respectively.

CPA:17 – Global 2017 10-K – 54

Financing Activities — During 2017, we made scheduled and unscheduled mortgage principal payments totaling $458.0 million and received $203.5 million in proceeds from non-recourse mortgage financings related to new and existing investments (Note 10). We paid distributions to our stockholders totaling $225.0 million, which consisted of $122.9 million of cash distributions and $102.1 million of distributions that were reinvested by stockholders in shares of our common stock through our DRIP. We received $119.2 million of proceeds related to the Revolver under our Senior Credit Facility, of which $69.0 million was repaid during 2017. We also paid $61.9 million for the repurchase of shares pursuant to our redemption plan as described below, and paid distributions of $40.3 million to affiliates that hold noncontrolling interests in various investments jointly owned with us.

2016

Operating Activities — Net cash provided by operating activities decreased by $32.5 million during 2016 as compared to 2015, primarily due to an increase in defeasance fees and costs paid in connection with debt repayments of $23.0 million, a $3.4 million increase in acquisition expenses related to our business combinations, a $3.5 million increase in interest expense paid during the year as a result of higher average outstanding debt due to our investing activity in 2016 and 2015, and the effect of having received $6.3 million in 2015 from a bankruptcy settlement claim with a former tenant, partially offset by an increase in operating cash flow generated from investments acquired during 2016 and 2015.

Investing Activities — Our investing activities are generally comprised of real estate-related transactions (purchases and sales), payment of deferred acquisition fees to our Advisor related to asset acquisitions, and capitalized property-related costs. During 2016, we sold 34 self-storage properties for proceeds of $258.3 million, net of selling costs. We funded $203.1 million for real estate investment acquisitions, $13.3 million for build-to-suit projects, and $10.7 million for capital expenditures on owned real estate (Note 4, Note 5). We received $42.7 million as a return of capital from our equity method investments and $12.6 million of loan receivable repayment proceeds, and used $11.0 million to fund capital contributions to our equity investments in real estate. We recovered $23.8 million of value-added taxes in connection with our international acquisitions.

Financing Activities — During 2016, our gross borrowings under our Senior Credit Facility were $225.7 million, including a $50.0 million delayed draw of our Term Loan, and repayments were $289.6 million. We received $267.0 million in proceeds from non-recourse mortgage financings related to new and existing investments (Note 10). We paid distributions to our stockholders for the fourth quarter of 2015 and the first, second, and third quarters of 2016 totaling $221.0 million, which consisted of $117.4 million of cash distributions and $103.6 million of distributions that were reinvested by stockholders in shares of our common stock through our DRIP. We also made scheduled and unscheduled mortgage principal installments totaling $177.5 million, paid $50.0 million for the repurchase of shares pursuant to our redemption plan as described below, and paid distributions of $38.2 million to affiliates that hold noncontrolling interests in various investments jointly owned with us.

2015

Operating Activities — Net cash provided by operating activities increased by $33.8 million during 2015 as compared to 2014, primarily reflecting the increase in operating cash flows from investments acquired during 2015 and 2014.

Investing Activities — During 2015, we used $301.4 million to acquire six investments and invest in capital expenditures for owned real estate and $24.3 million to fund construction costs on build-to-suit projects (Note 4, Note 5). We used $42.6 million to fund two loans receivable and received $40.0 million from the repayment of a loan receivable from a third party (Note 5). We contributed $39.0 million to jointly owned investments, including $9.1 million to acquire a follow-on equity interest in an existing investment (Note 6). We received $35.0 million as a return of capital from our equity investments in real estate. We paid value added taxes totaling $37.5 million in connection with several international investments and recovered $15.2 million of value added taxes during 2015, including amounts paid in prior years. Payments of deferred acquisition fees to our Advisor totaled $6.4 million (Note 3).

Financing Activities — During 2015, we paid distributions to our stockholders for the fourth quarter of 2014 and the first, second, and third quarters of 2015 totaling $215.9 million, which consisted of $112.2 million of cash distributions and $103.7 million of distributions that were reinvested by stockholders in our shares through our DRIP. Our gross borrowings under our Senior Credit Facility were $235.4 million and repayments were $120.4 million. We received $170.2 million in proceeds from mortgage financings related to new and existing investments (Note 10). We made scheduled and unscheduled mortgage principal installments totaling $121.3 million, and received contributions totaling $15.9 million from an affiliate that holds noncontrolling interests in various entities with us to pay off mortgage loans (Note 10). We obtained a $25.0 million loan from WPC, which we repaid in full during the third quarter of 2015 (Note 3). We also paid distributions of $35.7 million to affiliates that hold noncontrolling interests in various investments jointly owned with us. As described further below, we also paid $37.1 million to repurchase shares of our common stock pursuant to our quarterly redemption program.

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. During ~~2016~~2017, we declared distributions to our stockholders totaling $~~222~~226.0 million, which consisted of $~~118~~124.76 million of cash distributions and $~~103~~101.34 million of distributions reinvested by stockholders in our shares through our DRIP. We funded ~~95%~~all of these distributions from Net cash provided by operating activities,. ~~with~~Since ~~the~~inception, ~~remainder~~we have funded all of our cumulative distributions from ~~other~~Net ~~investing~~cash ~~and~~provided ~~financing~~by operating activities. Cash flow from operations is first applied to current period distributions, then to any deficit from prior period cumulative negative cash ~~flows~~flow, and finally to future period distributions. ~~Since~~We ~~inception~~expect that, wein ~~have~~the ~~funded~~future, if distributions cannot be fully sourced from net cash provided by operating activities, they may be sourced from the proceeds of financings or sales of assets.

CPA®:17 – Global 2016 10-K – 54

98% of our cumulative distributions from Net cash provided by operating activities, with the remaining 2%, or $25.3 million, being funded primarily from proceeds of our public offerings and, to a lesser extent, other sources. Cash flow from operations is first applied to current period distributions, then to any deficit from prior period cumulative negative cash flow, and finally to future period distributions. As we have fully invested the proceeds of our offerings, we expect that in the future, if distributions cannot be fully sourced from net cash provided by operating activities, they may be sourced from the proceeds of financings or sales of assets. In determining our distribution policy during the periods in which we are investing capital, we place primary emphasis on projections of cash flow from operations, together with cash distributions from our unconsolidated investments, rather than on historical results of operations (though these and other factors may be a part of our consideration). Thus, in setting a distribution rate, we focus primarily on expected returns from those investments we have already made, as well as our anticipated rate of return from future investments, to assess the sustainability of a particular distribution rate over time.

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 years ended December 31, ~~2016~~2017 and ~~2015~~2016, we ~~received~~redeemed 16,~~267~~517,080 and ~~1,146 requests to redeem~~ 5,229,975 ~~and 4,048,280~~ shares, respectively, of our common stock pursuant to our redemption plan, ~~all~~comprised of ~~which~~1,899 ~~were~~and ~~redeemed~~1,267 asrequests, ofrespectively, ~~the~~at ~~date~~a ~~of this Report. The~~ weighted-average price per share atof ~~which the shares were redeemed was~~ $9.5649 and $9.1656, respectively. As of the date of this Report, ~~which~~we ishave ~~net~~fulfilled all of the valid redemptions ~~fees,~~requests ~~totaling~~that ~~$50.0~~have ~~million~~been ~~and~~received ~~$37.1~~during ~~million~~the year ended December 31, ~~respectively~~2017.

CPA:17 – Global 2017 10-K – 55

Summary of Financing

The table below summarizes our ~~non-recourse~~ debt and Senior Credit Facility (dollars in thousands):

	December 31,
	2016			2015 (a)
	2017			2016
Carrying Value
Carrying Value (a)
Fixed rate	$	1,~~236~~013,~~058~~378		$	1,~~301~~236,~~875~~058
Variable rate:
Senior Credit Facility - Term Loan	49,751			—
Senior Credit Facility — Revolver	52,016			—
Senior Credit Facility - Revolver	—			112,834
Senior Credit Facility — Term Loan	49,915			49,751
Non-recourse debt:
Amount subject to interest rate swaps and caps	455,143			292,291
Floating interest rate mortgage loans	~~493~~380,~~901~~938			~~167~~493,~~825~~901
Amount subject to interest rate swaps and caps	292,291			412,074
	938,012			835,943
	835,943			692,733
	$	1,951,390		$	2,072,001
	$	2,072,001		$	1,994,608
Percent of Total Debt
Fixed rate	6052		%	6560		%
Variable rate	4048		%	3540		%
	100		%	100		%
Weighted-Average Interest Rate at End of Year
Fixed rate	4.98		%	54.19		%
Variable rate (b)	2.9		%	32.69		%

__________

(a) InAggregate ~~accordance~~debt ~~with~~balance ~~ASU~~includes ~~2015-03,~~unamortized ~~we reclassified~~ deferred financing costs ~~from~~totaling ~~Other~~$8.0 ~~assets,~~million ~~net~~and to$9.5 ~~Non-recourse~~million ~~debt~~as of December 31, ~~net~~2017 and ~~the~~2016, ~~Term~~respectively, ~~Loan~~and ~~included~~unamortized indiscount ~~Senior~~totaling ~~Credit~~$5.5 ~~Facility,~~million ~~net~~and $6.3 million as of December 31, ~~2015~~2017 ~~(Note~~and 2)2016, respectively.


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

CPA®:17 – Global 2016 10-K – 55

Cash Resources

At December 31, ~~2016~~2017, our cash resources consisted primarily of cash and cash equivalents totaling $~~273~~119.61 million. Of this amount, $3035.37 million, at then-current exchange rates, was held in foreign subsidiaries, but we could be subject to restrictions or significant costs should we decide to repatriate these ~~amounts~~funds. As of the date of this Report, we also had unused capacity of $~~166~~167.20 million on our Senior Credit Facility. 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 $712.6 million at December 31, 2017, although there can be no assurance that we would be able to obtain financing for these properties.

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 ~~and ADC Arrangements~~; paying distributions to our stockholders and to our affiliates that hold noncontrolling interests in entities we control; payments to acquire new investments; making share repurchases pursuant to our redemption plan; making scheduled mortgage debt service payments and repayments of borrowings under our Revolver (Note 10); as well as other normal recurring operating expenses. Balloon payments totaling $~~387~~137.95 million ~~and $88.8 million~~ on our consolidated ~~and unconsolidated non-recourse~~ mortgage loan obligations, ~~respectively,~~ are ~~also~~ due during the next 12 months. Our Advisor is actively seeking to refinance certain of these loans, although there can be no assurance that it will be able to do so on favorable terms, or at all. Capital and other lease commitments totaling $1153.50 million are expected to be funded during the next 12 months. We expect to fund ~~future~~capital ~~investments~~commitments, ~~capital~~any ~~commitments~~future investments, any capital expenditures on existing properties, scheduled and unscheduled debt payments on our mortgage loans, and repayments of borrowings under our Revolver through the use of our cash reserves; cash generated from operations; and proceeds from repayments of loans receivable, financings, and asset sales. On February 1, 2017, we refinanced a non-recourse mortgage loan of $92.4 million, which was scheduled to mature on February 1, 2017, with a new loan of $105.0 million that has an interest rate of LIBOR plus 1.8% and is scheduled to mature in February 2020 (Note 17).

OnCPA:17 ~~February~~– ~~28,~~Global 2017, ~~we repaid two non~~10-~~recourse~~K ~~mortgage~~– ~~loans totaling $42.9 million, both of which were scheduled to mature in the first quarter of 2017 (amount is based on the exchange rate of the euro as of the date of repayment) (Note 17).~~56

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 December 31, 2017 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 than1 year		1-3 years		3-5 years		More than5 years
Non-recourse debt — principal (a)	$	2,037,745	$	425,253	$	161,080	$	665,889	$	785,523
Mortgage debt, net — principal (a)	$	1,862,835	$	71,628	$	501,806	$	802,916	$	486,485
Senior Credit Facility – Term Loan — principal (b)	50,000		—		50,000		—		—
Senior Credit Facility — Revolver — principal	52,016		52,016		—		—		—
Deferred acquisition fees — principal	7,346		3,885		3,461		—		—
Senior Credit Facility — Term Loan — principal (b)	50,000		50,000		—		—		—
Interest on borrowings and deferred acquisition fees	351,498		79,061		125,498		95,061		51,878
Deferred acquisition fees — principal	6,193		3,515		2,678		—		—
Operating and other lease commitments (c)	73,974		2,858		5,886		4,156		61,074
Interest on borrowings and deferred acquisition fees	301,989		75,639		130,270		72,033		24,047
Asset retirement obligations, net (d)	17,749		—		—		—		17,749
Operating and other lease commitments (c)	71,778		2,883		6,027		2,060		60,808
Capital commitments (e)	9,531		8,665		866		—		—
Asset retirement obligations, net (d)	16,932		—		—		—		16,932
	$	2,547,843	$	519,722	$	346,791	$	765,106	$	916,224
Capital commitments (e)	56,505		50,151		6,354		—		—
	$	2,418,248	$	305,832	$	647,135	$	877,009	$	588,272

__________

(a) Excludes deferred financing costs totaling $97.39 million and unamortized discount, net of $65.25 million, which were included in ~~Non-recourse~~Mortgage debt, net at December 31, ~~2016. On February 1,~~ 2017~~, we refinanced a non-recourse mortgage loan of $92~~.4 million, which was scheduled to mature on February 1, 2017, with a new loan of $105.0 million that has an interest rate of LIBOR plus 1.8% and is scheduled to mature in February 2020. On February 28, 2017, we repaid two non-recourse mortgage loans totaling $42.9 million, which were both scheduled to mature in the first quarter of 2017 (amount is based on the exchange rate of the euro as of the date of repayment).

(b) Excludes deferred financing costs ~~totaling~~of $0.21 million and unamortized discount of less than $0.1 million on our Term Loan within the Senior Credit Facility, which is scheduled to mature on August 26, 2018, unless extended pursuant to its terms (Note 10).

~~CPA®:17~~(c) –Operating ~~Global~~commitments ~~2016~~consist ~~10-K~~of –rental 56obligations under ground leases. Other lease commitments consist of our estimated share of future rents payable for the purpose of leasing office space pursuant to the advisory agreement. Amounts are estimated based on current allocation percentages among WPC and the other Managed Programs as of December 31, 2017 (Note 3).

(c) Operating commitments consist of rental obligations under ground leases. Other lease commitments consist of our estimated share of future rents payable for the purpose of leasing office space pursuant to the advisory agreement. Amounts are estimated based on current allocation percentages among WPC and the other Managed Programs as of December 31, 2016 (Note 3).


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

(e) Capital commitments include ~~construction commitments related to build-to-suit projects placed into service of~~ $855.75 million ~~(Note 4)~~ and $01.90 million related to unfunded construction commitments and tenant ~~improvements~~improvement allowances, respectively.

Amounts in the table above that relate to our foreign operations are based on the exchange rate of the local currencies at December 31, ~~2016~~2017, which consisted primarily of the euro. At December 31, ~~2016~~2017, we had no material capital lease obligations for which we were the lessee, either individually or in the aggregate.

Equity Method Investments

We have interests in unconsolidated investments that primarily own single-tenant properties net leased to companies. Generally, the underlying investments are jointly owned with our affiliates (Note 6). At December 31, ~~2016~~2017, on a combined basis, these investments had total assets of approximately $4.14 billion and third-party non-recourse mortgage debt of $2.6 billion. At that date, our pro rata share of the aggregate debt for these investments was $~~459~~335.60 million. Cash requirements with respect to our share of these debt obligations are discussed above under Cash Requirements. In January 2017, our jointly owned Hellweg 2 equity investment repaid non-recourse mortgage loans with an aggregate principal balance of approximately $243.8 million, of which our interest was $89.0 million (Note 17).

CPA:17 – Global 2017 10-K – 57

Environmental Obligations

In connection with the purchase of many of our properties, we required the sellers to perform environmental reviews. We believe, based on the results of these reviews, that our properties were in substantial compliance with federal, state, and foreign environmental statutes at the time the properties were acquired. However, portions of certain properties have been subject to some degree of contamination, principally in connection with leakage from underground storage tanks, surface spills, or other on-site activities. In most instances where contamination has been identified, tenants are actively engaged in the remediation process and addressing identified conditions. Sellers are generally subject to environmental statutes and regulations regarding the discharge of hazardous materials and any related remediation obligations, and we frequently require sellers to address them before closing or obtain contractual protections (e.g. indemnities, cash reserves, letters of credit, or other instruments) from sellers when we acquire a property. In addition, our leases generally require tenants to indemnify us from all liabilities and losses related to the leased properties and the provisions of such indemnifications specifically address environmental matters. The leases generally include provisions that allow for periodic environmental assessments, paid for by the tenant, and allow us to extend leases until such time as a tenant has satisfied its environmental obligations. Certain of our leases allow us to require financial assurances from tenants, such as performance bonds or letters of credit, if the costs of remediating environmental conditions are, in our estimation, in excess of specified amounts. With respect to our operating properties, which are not subject to net-lease arrangements, there is no tenant to provide for indemnification, so we may be liable for costs associated with environmental contamination in the event any such circumstances arise. However, we believe that the ultimate resolution of environmental matters should not have a material adverse effect on our financial condition, liquidity, or results of operations.

Critical Accounting Estimates

Our significant accounting policies are described in Note 2. Many of these accounting policies require judgment and the use of estimates and assumptions when applying these policies in the preparation of our consolidated financial statements. On a quarterly basis, we evaluate these estimates and judgments based on historical experience as well as other factors that we believe to be reasonable under the circumstances. These estimates are subject to change in the future if underlying assumptions or factors change. Certain accounting policies, while significant, may not require the use of estimates. Those accounting policies that require significant estimation and/or judgment are described under Critical Accounting Policies and Estimates in Note 2. The recent accounting change that may potentially impact our business is described under Recent Accounting Pronouncements in Note 2.

CPA®:17 – Global 2016 10-K – 57

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.

CPA:17 – Global 2017 10-K – 58

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.

~~CPA®:17~~The –historical ~~Global~~accounting ~~2016~~convention 10used for real estate assets requires straight-Kline –depreciation 58of 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.

The ~~historical~~Investment ~~accounting~~Program ~~convention~~Association, ~~used~~an ~~for~~industry ~~real~~trade ~~estate~~group, ~~assets~~has ~~requires~~standardized ~~straight-line~~a ~~depreciation~~measure ofknown ~~buildings~~as ~~and improvements~~MFFO, which ~~implies that~~ the ~~value~~Investment ofProgram ~~real~~Association ~~estate~~has ~~assets~~recommended ~~diminishes~~as ~~predictably~~a ~~over~~supplemental ~~time,~~measure ~~especially~~for ifpublicly ~~such~~registered ~~assets~~non-traded ~~are~~REITs ~~not adequately maintained or repaired~~ and ~~renovated~~which aswe ~~required~~believe byto ~~relevant~~be ~~circumstances~~another ~~and/or~~appropriate isnon-GAAP ~~requested~~measure ~~or required by lessees for operational purposes in order~~ to ~~maintain~~reflect the ~~value~~operating ~~disclosed.~~performance Weof ~~believe~~a ~~that,~~non-traded ~~since~~REIT. ~~real~~MFFO ~~estate~~is ~~values~~not ~~historically~~equivalent ~~rise~~to ~~and~~our ~~fall~~net ~~with~~income ~~market~~or ~~conditions,~~loss ~~including~~as ~~inflation,~~determined ~~interest~~under ~~rates~~GAAP, ~~the business cycle, unemployment,~~ and ~~consumer~~MFFO ~~spending,~~may ~~presentations~~not ofbe ~~operating results for~~ a ~~REIT~~useful ~~using~~measure ~~historical~~of ~~accounting for depreciation may be less informative. Historical accounting for real estate involves~~ the ~~use~~impact of ~~GAAP.~~long-term ~~Any~~operating ~~other~~performance ~~method~~on ~~of accounting for real estate such as the fair~~ value ~~method~~if ~~cannot~~we bedo ~~construed~~not continue to beoperate ~~any~~with ~~more~~a ~~accurate~~limited orlife ~~relevant~~and ~~than~~targeted ~~the~~exit ~~comparable~~strategy, ~~methodologies~~as ofcurrently ~~real estate valuation found in GAAP~~intended. ~~Nevertheless,~~We we believe that ~~the use of FFO~~, ~~which~~because MFFO excludes ~~the~~costs ~~impact~~that ofwe ~~real~~consider ~~estate-related depreciation and amortization, as well as impairment charges of real estate-related assets, provides a~~ more ~~complete~~reflective ~~understanding~~ of ~~our~~investing ~~performance~~activities ~~to investors~~ and toother ~~management;~~non-operating ~~and~~items ~~when~~included ~~compared year over year, reflects the impact on our operations from trends~~ in ~~occupancy rates~~FFO, ~~rental~~and ~~rates,~~also ~~operating~~excludes ~~costs,~~acquisition ~~general~~fees and ~~administrative~~ expenses, ~~and~~that ~~interest~~affect ~~costs,~~our ~~which~~operations ~~may~~only ~~not~~in beperiods ~~immediately~~in ~~apparent~~which ~~from~~properties ~~net~~are ~~income. In particular~~acquired, weMFFO ~~believe~~can itprovide, ison ~~appropriate~~a togoing ~~disregard~~forward ~~impairment charges~~basis, asan ~~this~~indication isof athe ~~fair~~sustainability ~~value adjustment~~ (that is ~~largely based on market fluctuations and assessments regarding general market conditions~~, ~~which~~the ~~can~~capacity ~~change~~to ~~over~~continue ~~time.~~to ~~An asset will only~~ be ~~evaluated~~maintained) ~~for~~of ~~impairment~~our ifoperating ~~certain~~performance ~~impairment~~after ~~indicators~~the ~~exist.~~period ~~Then~~in ~~a two-step process is performed, of~~ which ~~first~~we isare toacquiring ~~determine~~properties ~~whether~~and anonce ~~asset~~our portfolio is ~~impaired~~in byplace. ~~comparing~~By ~~the~~providing ~~carrying value~~MFFO, orwe ~~book~~believe ~~value,~~we toare ~~the~~presenting ~~total~~useful ~~estimated~~information ~~undiscounted~~that ~~future~~assists ~~cash~~investors ~~flows (including net rental~~ and ~~lease~~analysts ~~revenues,~~to ~~net~~better ~~proceeds~~assess on the ~~sale~~sustainability of ~~the~~our ~~property,~~operating ~~and~~performance ~~any~~now ~~other~~that ~~ancillary~~our ~~cash~~offering ~~flows~~has atbeen acompleted ~~property~~and oronce ~~group~~essentially ~~level~~all ~~under GAAP) from such asset, then measure the impairment loss as the excess~~ of ~~the~~our ~~carrying~~properties ~~value~~have ~~over~~been ~~its estimated fair value~~acquired. ItWe ~~should~~also bebelieve ~~noted, however,~~ that ~~determinations~~MFFO ofis ~~whether~~a ~~impairment~~recognized ~~charges~~measure ~~have~~of ~~been~~sustainable ~~incurred are based partly on anticipated~~ operating performance, ~~because~~by ~~estimated undiscounted future cash flows from a property (including estimated future net rental and lease revenues, net proceeds on~~ the ~~sale~~non-traded ofREIT ~~the~~industry. ~~property~~Further, ~~and~~we ~~certain~~believe ~~other~~MFFO ~~ancillary~~is ~~cash~~useful ~~flows) are taken into account~~ in ~~determining~~comparing ~~whether~~the ansustainability ~~impairment~~of ~~charge~~our ~~has~~operating ~~been~~performance, ~~incurred.~~with ~~While impairment charges are excluded from~~ the ~~calculation~~sustainability of ~~FFO~~the ~~described~~operating ~~above~~performance ~~due~~of toother ~~the~~real ~~fact~~estate companies that ~~impairments~~ are ~~based~~not onas ~~estimated~~involved ~~future~~in ~~undiscounted~~acquisition ~~cash flows, it could be difficult to recover any impairment charges~~activities. ~~However, FFO,~~ MFFO, ~~and Adjusted MFFO, as described below,~~ should ~~not~~only be ~~construed~~used to beassess ~~more relevant or accurate than~~ the ~~current~~sustainability ~~GAAP~~of ~~methodology~~a incompany’s ~~calculating net income or in its applicability in evaluating the~~ operating performance ofafter ~~the~~a company.’s ~~The~~offering ~~method~~has ~~utilized~~been tocompleted ~~evaluate the value~~ and ~~performance~~properties ofhave ~~real~~been ~~estate~~acquired, ~~under GAAP should be construed~~ as ait ~~more~~excludes ~~relevant~~acquisition ~~measure~~costs ofthat ~~operational~~have ~~performance~~a ~~and~~negative ~~considered~~effect ~~more~~on ~~prominently~~a ~~than~~company’s ~~the~~operating ~~non-GAAP~~performance ~~measures~~during ~~FFO, MFFO, and Adjusted MFFO and~~ the ~~adjustments~~periods ~~to GAAP~~ in ~~calculating~~which ~~FFO,~~properties ~~MFFO,~~are ~~and Adjusted MFFO~~acquired.

~~Changes~~We indefine ~~the~~MFFO ~~accounting~~consistent ~~and~~with 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~~Investment ofProgram ~~NAREIT~~Association’s ~~definition~~Guideline ~~of FFO have prompted an increase in cash~~2010-~~settled expenses~~01, ~~such~~Supplemental asPerformance ~~acquisition~~Measure ~~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~~Registered, ~~non~~Non-~~traded~~Listed REITs: ~~typically~~Modified ~~have~~Funds afrom ~~significant~~Operations, ~~amount~~or ofthe ~~acquisition~~Practice 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 yearsGuideline, weissued ~~believe~~by ~~that~~the ~~non-traded~~Investment ~~REITs~~Program ~~are~~Association ~~unique~~ in ~~that~~November 2010. ~~they~~The ~~have~~Practice aGuideline ~~limited~~defines ~~life~~MFFO ~~with~~as ~~targeted~~FFO ~~exit~~further ~~strategies~~adjusted ~~within~~for ~~a relatively limited time frame after acquisition activity ceases. We currently intend to begin~~ the ~~process~~following ~~of achieving a liquidity event (i.e.~~items, ~~listing~~included ofin ~~our common stock on a national exchange, a merger or sale of our assets, or another similar transaction) within eight to 12 years following~~ the ~~investment~~determination of ~~substantially~~GAAP ~~all of the~~ net ~~proceeds~~income, ~~from~~as ~~our~~applicable: ~~initial~~acquisition ~~public~~fees ~~offering,~~and ~~which~~expenses; ~~occurred~~amounts inrelating ~~April 2011. Due~~ to ~~the~~deferred ~~above~~rent ~~factors~~receivables and ~~other~~amortization ~~unique features~~ of ~~publicly registered, non~~above-~~traded~~ ~~REITs,~~and the Investment Program Association, an industry trade group, has standardized a measure known as MFFO, which the Investment Program Association has recommended as a supplemental measure for publicly registered nonbelow-~~traded~~market ~~REITs~~leases and liabilities (which weare ~~believe~~adjusted toin beorder ~~another appropriate non-GAAP measure~~ to reflect ~~the~~such ~~operating~~payments ~~performance~~from of a ~~non-traded~~GAAP ~~REIT~~accrual ~~having~~basis ~~the characteristics described above. MFFO is not equivalent~~ to ~~our~~a ~~net~~cash ~~income~~basis orof ~~loss~~disclosing asthe ~~determined~~rent ~~under GAAP,~~ and ~~MFFO~~lease ~~may~~payments); ~~not~~accretion beof adiscounts ~~useful~~and ~~measure~~amortization of ~~the~~premiums ~~impact of long-term operating performance~~ on ~~value~~debt ifinvestments; wenonrecurring doimpairments ~~not~~of ~~continue~~real toestate-related ~~operate~~investments ~~with a limited life and targeted exit strategy~~(i.e., asinfrequent ~~currently~~or ~~intended. We believe that~~unusual, ~~because~~not ~~MFFO~~reasonably ~~excludes~~likely ~~costs~~to ~~that~~recur wein ~~consider~~the ~~more~~ordinary ~~reflective~~course of ~~investing~~business); ~~activities and other non~~mark-~~operating~~to-market ~~items~~adjustments included in ~~FFO,~~net ~~and~~income; ~~also~~nonrecurring ~~excludes~~gains ~~acquisition~~or ~~fees~~losses ~~and~~included ~~expenses that affect our operations only~~ in ~~periods~~net inincome ~~which~~from ~~properties~~the ~~are~~extinguishment ~~acquired,~~or ~~MFFO~~sale ~~can~~of ~~provide~~debt, ~~on a going forward basis~~hedges, anforeign ~~indication of the sustainability (that is~~exchange, ~~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~~derivatives, weor ~~believe~~securities weholdings ~~are~~where ~~presenting~~trading ~~useful information that assists investors and analysts to better assess the sustainability~~ of ~~our~~such ~~operating~~holdings ~~performance now that our offering has been completed and once essentially all of our properties have been acquired. We also believe that MFFO~~ is not a ~~recognized~~fundamental ~~measure~~attribute of ~~sustainable operating performance by~~ the ~~non-traded~~business ~~REIT industry. Further~~plan, weunrealized ~~believe~~gains ~~MFFO~~or islosses ~~useful~~resulting infrom ~~comparing~~consolidation ~~the sustainability of our operating performance~~from, ~~with~~or ~~the~~deconsolidation ~~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~~equity ~~the~~accounting, ~~sustainability~~and ofafter ~~a company’s~~

CPA®:17 – Global ~~2016~~2017 10-K – 59

~~operating~~adjustments ~~performance~~for ~~after~~consolidated aand ~~company’s~~unconsolidated ~~offering~~partnerships ~~has~~and ~~been~~jointly ~~completed~~owned investments, with such adjustments calculated to reflect MFFO on the same basis. The accretion of discounts and ~~properties~~amortization ~~have~~of ~~been~~premiums ~~acquired~~on debt investments, unrealized gains and losses on hedges, foreign exchange, derivatives or securities holdings, unrealized gains and losses resulting from consolidations, as itwell ~~excludes~~as ~~acquisition~~other ~~costs~~listed ~~that~~cash ~~have~~flow aadjustments ~~negative~~are ~~effect~~adjustments onmade ato ~~company’s~~net ~~operating~~income ~~performance~~in ~~during~~calculating the ~~periods~~cash flows provided by operating activities and, in ~~which~~some ~~properties~~cases, reflect gains or losses that are ~~acquired~~unrealized and may not ultimately be realized.

We define MFFO consistent with the Investment Program Association’s Guideline 2010-01, Supplemental Performance Measure for Publicly Registered, Non-Listed REITs: Modified Funds from Operations, or the Practice Guideline, issued by the Investment Program Association 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 Investment Program Association’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.

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.

CPA®:17 – Global 2016 10-K – 60

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:17 – Global 2017 10-K – 60

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

	Years Ended December 31,
	2016			2015			2014
	2017			2016			2015
Net income attributable to CPA®:17 – Global	$	190,345		$	84,205		$	74,151
Net income attributable to CPA:17 – Global	$	97,287		$	190,345		$	84,205
Adjustments:
Gain on sale of real estate (a)	(132,858		)	(2,197		)	(4,251		)
Depreciation and amortization of real property	115,824			122,391			106,502
Depreciation and amortization of real property	122,391			106,502			99,210
Impairment charges on real estate	8,276			29,183			—
Impairment charges on real estate	29,183			—			—
Gain on sale of real estate (a)	(2,879		)	(132,858		)	(2,197		)
Proportionate share of adjustments to equity in net income of partially owned entities to arrive at FFO	37,067			36,813			27,422
Proportionate share of adjustments to equity in net income of partially owned entities	43,533			37,067			36,813
Proportionate share of adjustments for noncontrolling interests to arrive at FFO	(571		)	(563		)	(649		)
Proportionate share of adjustments for noncontrolling interests (b)	(2,094		)	(571		)	(563		)
Total adjustments	55162,~~212~~660			~~140~~55,~~555~~212			~~121~~140,~~732~~555
FFO attributable to CPA®:17 – Global — as defined by NAREIT	245,557			224,760			195,883
FFO (as defined by NAREIT) attributable to CPA:17 – Global	259,947			245,557			224,760
Adjustments:
Gain on change in control of interests (b)	(49,922		)	—			—
Above- and below-market rent intangible lease amortization, net (c) (d)	(17,826		)	(14,160		)	(3,632		)
Loss on extinguishment of debt (c)	24,376			275			263
Straight-line and other rent adjustments (e)	(16,546		)	(18,182		)	(20,365		)
Straight-line and other rent adjustments (d)	(18,182		)	(20,365		)	(19,041		)
Unrealized (gains) losses on foreign currency, derivatives, and other	(15,059		)	7,028			5,079
Above- and below-market rent intangible lease amortization, net (e)	(14,160		)	(3,632		)	(404		)
Loss (gain) on change in control of interests (f)	13,851			(49,922		)	—
Acquisition expenses (f)	7,157			651			7,877
Realized gains on foreign currency, derivatives and other	(7,053		)	(5,695		)	(5,868		)
Unrealized losses on foreign currency, derivatives, and other	7,028			5,079			2,045
Loss on extinguishment of debt (g)	1,922			24,376			275
Realized (gains) losses on foreign currency, derivatives and other	(5,695		)	(5,868		)	2,709
Amortization of premiums/discounts on debt investments, net	1,814			2,206			637
Amortization of premiums (accretion of discounts) on debt investments, net	2,206			637			(824		)
Acquisition and other expenses (h)	1,343			7,157			651
Impairment charges (g)	523			1,023			570
Impairment charges, held-to-maturity securities	683			523			1,023
Proportionate share of adjustments to equity in net income of partially owned entities to arrive at MFFO (h) (i)	25,755			(3,100		)	5,324
Proportionate share of adjustments to equity in net income of partially owned entities (i) (j)	14,872			25,755			(3,100		)
Proportionate share of adjustments for noncontrolling interests to arrive at MFFO	367			423			234
Proportionate share of adjustments for noncontrolling interests	(390		)	367			423
Total adjustments	(2022,~~547~~389		)	(2420,~~877~~547		)	(124,~~247~~877		)
MFFO attributable to CPA®:17 – Global	225,010			199,883			194,636
MFFO attributable to CPA:17 – Global	237,558			225,010			199,883
Adjustments:
Hedging gains	7,219			8,751			612
Deferred taxes and other adjustments (k)	(8,148		)	2,312			2,311
Deferred taxes	2,312			2,311			7,589
Hedging gains	6,384			7,219			8,751
Total adjustments	9(1,~~531~~764		)	119,~~062~~531			811,~~201~~062
Adjusted MFFO attributable to CPA®:17 – Global	$	234,541		$	210,945		$	202,837
Adjusted MFFO attributable to CPA:17 – Global	$	235,794		$	234,541		$	210,945

__________


(a)	During the year ended December 31, 2016, we recognized a gain on sale of real estate, net of tax of $132.9 million as a result of the sale of 34 self-storage properties (Note 14).

(b) ~~Gain~~Amount ~~on change in control of interests~~ for the year ended December 31, ~~2016~~2017 ~~represents~~includes ~~gain~~$1.5 ~~recognized~~million onrelated ~~our~~to ~~acquisition~~an ofimpairment acharge ~~15%~~recognized ~~controlling~~on ~~interest~~one inof ~~five~~our ~~self~~consolidated joint-~~storage~~venture ~~properties,~~investments ~~which we had previously accounted for as an equity method investment~~ (Note 68).

~~CPA®:17~~(c) –Amount ~~Global~~for the year ended December 31, 2017 includes a $15.7 million write-off and $3.3 million of acceleration of below-market lease intangible liabilities, related to the KBR Inc. lease modification/termination (Note 14). Amount for the year ended December 31, 2016 10includes a $13.9 million acceleration of below-Kmarket –lease 61intangible liabilities, related to the KBR Inc. lease termination (Note 14).

(cd) ~~During~~Under ~~the~~GAAP, ~~year~~certain ~~ended~~intangibles ~~December~~are ~~31,~~accounted ~~2016,~~for ~~this~~at ~~amount~~cost ~~primarily~~and ~~relates~~reviewed at least annually for impairment and certain intangibles are assumed to ~~the~~diminish ~~seven~~predictably ~~non-recourse~~in ~~mortgage~~value ~~loans~~over ~~that~~time ~~were~~and ~~defeased~~amortized, ~~with~~similar ~~outstanding~~to ~~principal~~depreciation ~~balances~~and ~~totaling~~amortization ~~$121~~of other real estate related assets that are excluded from FFO.9 ~~million~~However, ~~net~~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 ~~discounts~~these intangibles, MFFO and ~~recognized~~Adjusted ~~losses~~MFFO onprovides ~~extinguishment~~useful ofsupplemental ~~debt~~information ~~totaling~~on ~~$23.6~~the ~~million~~performance ~~(Note~~of ~~10)~~the real estate.

~~(d)~~CPA:17 ~~Under~~– ~~GAAP,~~Global ~~rental~~2017 ~~receipts~~10-K ~~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.61

(e) Under GAAP, ~~certain~~rental ~~intangibles~~receipts are ~~accounted~~allocated ~~for~~to atperiods ~~cost~~using ~~and~~an ~~reviewed~~accrual atbasis. ~~least~~This ~~annually~~may ~~for~~result ~~impairment~~in ~~and~~timing ~~certain~~of ~~intangibles~~income ~~are~~recognition ~~assumed~~that tois ~~diminish~~significantly ~~predictably~~different inthan ~~value~~underlying ~~over~~contract ~~time~~terms. ~~and~~By ~~amortized,~~adjusting ~~similar~~for these items (to ~~depreciation~~reflect ~~and~~such ~~amortization~~payments offrom ~~other~~a ~~real~~GAAP ~~estate~~accrual ~~related~~basis ~~assets~~to ~~that~~a ~~are~~cash ~~excluded~~basis ~~from~~of ~~FFO.~~disclosing ~~However~~the rent and lease payments), ~~because~~management ~~real~~believes ~~estate~~that ~~values~~MFFO and ~~market~~Adjusted ~~lease~~MFFO ~~rates~~provides ~~historically~~useful ~~rise~~supplemental orinformation ~~fall~~on ~~with~~the ~~market~~realized ~~conditions,~~economic ~~management~~impact ~~believes~~of ~~that~~lease terms and debt investments, byprovides ~~excluding~~insight ~~charges~~on ~~relating~~the tocontractual ~~amortization~~cash flows of ~~these~~such ~~intangibles,~~lease ~~MFFO~~terms and ~~Adjusted~~debt ~~MFFO~~investments, ~~provides~~and ~~useful~~aligns ~~supplemental~~results ~~information~~with onmanagement’s ~~the~~analysis ~~performance~~ of ~~the~~operating ~~real estate~~performance.

(f) InLoss ~~evaluating~~on ~~investments~~change in ~~real~~control ~~estate,~~of ~~management~~interests ~~differentiates~~for the ~~costs~~year toended ~~acquire~~December ~~the~~31, ~~investment~~2017 ~~from~~represents the ~~operations~~loss ~~derived~~recognized ~~from~~on the ~~investment.~~restructuring ~~Such~~of ~~information~~the ~~would~~Shelborne behotel ~~comparable only for non-traded REITs that have completed their acquisition activity and have other similar operating characteristics. By excluding expensed acquisition costs~~investment, ~~management~~which ~~believes~~we ~~MFFO~~had ~~and~~previously ~~Adjusted~~accounted ~~MFFO provides useful supplemental information that is comparable~~ for ~~each~~as ~~type~~an ofequity ~~real~~method ~~estate~~ investment ~~and~~(Note is4, ~~consistent~~Note ~~with~~6). ~~management’s~~Gain ~~analysis~~on ofchange ~~the~~in ~~investing~~control ~~and operating performance~~ of ~~our~~interests ~~properties.~~for ~~Acquisition fees and expenses include payments to our Advisor or third parties. Acquisition fees and expenses under GAAP are considered operating expenses and as expenses included in~~ the ~~determination~~year ofended ~~net~~December ~~income~~31, a2016 ~~performance~~represents ~~measure~~gain ~~under~~recognized ~~GAAP.~~on ~~All~~our ~~paid and accrued~~ acquisition ~~fees~~of ~~and~~a ~~expenses~~15% ~~will~~controlling ~~have~~interest ~~negative~~in ~~effects~~five onself-storage ~~returns to stockholders~~properties, ~~the~~which ~~potential~~we ~~for~~had ~~future~~previously ~~distributions,~~accounted ~~and~~for ~~cash~~as ~~flows~~an ~~generated~~equity bymethod ~~us,~~investment ~~unless~~(Note ~~earnings from operations or net sales proceeds from the disposition of properties are generated to cover the purchase price of the property~~4, ~~these~~Note ~~fees and expenses and other costs related to the property~~6).

(g) ~~Impairment~~During ~~charges~~the ~~were~~year ~~incurred~~ended onDecember ~~our~~31, ~~CMBS~~2016, ~~portfolio~~this ~~and~~amount ~~are~~primarily ~~considered~~relates ~~non-real~~to ~~estate~~the ~~impairments.~~seven Asnon-recourse ~~such,~~mortgage ~~these~~loans ~~impairment~~that ~~charges~~ were ~~not~~defeased ~~included~~with asoutstanding anprincipal ~~add-back~~balances ~~adjustment~~totaling in$121.9 ~~our~~million, ~~computation~~net of ~~FFO~~discounts, ~~as defined by NAREIT, but are included as an adjustment in arriving at MFFO~~ and ~~Adjusted~~recognized ~~MFFO~~losses ~~because~~on ~~these~~extinguishment ~~charges~~of ~~are~~debt ~~not~~totaling ~~directly~~$23.6 ~~related~~million or(Note ~~attributable to our operations~~10).

(h) ~~During~~In ~~the~~evaluating ~~year~~investments ~~ended~~in ~~December~~real 31estate, ~~2016,~~management differentiates the ~~investee~~costs to acquire the investment from the operations derived from the investment. Such information would be comparable only for non-traded REITs that have completed their acquisition activity and have other similar operating characteristics. By excluding expensed acquisition costs, management believes MFFO and Adjusted MFFO provides useful supplemental information that is comparable for each type of ~~one~~real estate investment and is consistent with management’s analysis of the investing and operating performance of our ~~equity~~properties. ~~investments~~Acquisition ~~incurred~~fees and expenses include payments to our Advisor or third parties. Acquisition fees and expenses under GAAP are considered operating expenses and as expenses included in the determination of net income, a ~~$22~~performance measure under GAAP.8 ~~million~~All ~~impairment~~paid ~~charge~~and accrued acquisition fees and expenses will have negative effects on returns to ~~reduce~~stockholders, ~~goodwill~~the atpotential for future distributions, and cash flows generated by us, unless earnings from operations or net sales proceeds from the ~~investee~~disposition ~~level~~of properties are generated to ~~its~~cover ~~fair~~the ~~value~~purchase price of the property, these fees and expenses and other costs related to the property. On January 1, 2017, we adopted ASU 2017-01 (Note 82), 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.

(i) ~~Amount~~During ~~for~~ the year ended December 31, ~~2015~~2016, ~~includes~~ the ~~reversal~~investee of ~~$6.2~~one ~~million~~ of ~~liabilities~~our ~~for~~equity ~~German~~investments ~~real~~incurred ~~estate~~a ~~transfer taxes. These transfer taxes were originally recorded for~~ $822.18 million ~~and~~impairment ~~were~~charge ~~related~~ to ~~the~~reduce ~~restructuring~~goodwill ofat the ~~Hellweg~~investee 2level ~~investment in October 2013. The variance between the original amount and the reversal is due~~ to ~~the~~its ~~decrease~~fair invalue ~~the exchange rate of the U.S. dollar in relation to the euro between 2013 and 2015~~ (Note 68).

~~CPA®:17~~(j) –Amount ~~Global~~for ~~2016~~the ~~10-K~~year –ended 62December 31, 2015 includes the reversal of $6.2 million of liabilities for German real estate transfer taxes. These transfer taxes were originally recorded for $8.1 million and were related to the restructuring of the Hellweg 2 investment in October 2013. The variance between the original amount and the reversal is due to the decrease in the exchange rate of the U.S. dollar in relation to the euro between 2013 and 2015.


(k)	Amount for the year ended December 31, 2017, includes the impact of the Tax Cuts and Jobs Act, which was signed into law on December 22, 2017, and lowered the U.S. corporate income tax rate from 35% to 21% (Note 13).

CPA:17 – Global 2017 10-K – 62

Item 7A. 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 to hedge our foreign currency cash flow exposures.

Interest Rate Risk

The values of our real estate, related fixed-rate debt obligations, our Senior Credit Facility, and our loans 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 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, ~~swaptions,~~ and may continue to enter into, swaptions, interest rate swap agreements or interest rate cap agreements with lenders. Interest rate swap agreements effectively convert the variable-rate debt service obligations of a loan to a fixed rate, while interest rate cap agreements limit the underlying interest rate from exceeding a specified strike rate. Interest rate swaps are agreements in which one party exchanges a stream of interest payments for a counterparty’s stream of cash flows over a specific period, and interest rate caps limit the effective borrowing rate of variable-rate debt obligations while allowing participants to share in downward shifts in interest rates. These interest rate swaps and caps are derivative instruments that, where applicable, are designated as cash flow hedges on the forecasted interest payments on the debt obligation. The face amount on which the swaps or caps are based is not exchanged. A swaption is an option that gives us the right, but not the obligation, to enter into an interest rate swap under which we would pay a fixed-rate and receive a variable-rate. At the option’s expiration, we may also elect to cash settle the option if such option is “in-the-money” or allow the option to expire at no additional cost to us. Our objective in using these derivatives is to limit our exposure to interest rate movements. At December 31, ~~2016~~2017, we estimated that the total fair value of our interest rate swaps, ~~caps,~~ and ~~swaption~~caps, which are included in Other assets, net and Accounts payable, accrued expenses and other liabilities in the consolidated financial statements, was in a net liability position of $53.85 million (Note 9).

At December 31, ~~2016~~2017, our outstanding debt either bore interest at fixed rates, bore interest at floating rates, was swapped or capped to a fixed rate, or bore interest at fixed rates that were scheduled to convert to then-prevailing market fixed rates at certain future points during their term. The annual interest rates on our fixed-rate debt at December 31, ~~2016~~2017 ranged from 1.9% to 107.94%. The contractual annual interest rates on our variable-rate debt at December 31, ~~2016~~2017 ranged from 1.3% to 6.0%. Our debt obligations are more fully described in Note 10 and Liquidity and Capital Resources –— Summary of Financing in Item 7 above. The following table presents principal cash outflows based upon expected maturity dates of our debt obligations outstanding at December 31, ~~2016~~2017 (in thousands):

	2017		2018		2019		2020		2021		Thereafter		Total		Fair value
	2018		2019		2020		2021		2022		Thereafter		Total		Fair value
Fixed-rate debt (a)	$	~~246~~50,~~697~~681	$	5729,~~417~~778	$	28126,~~217~~200	$	~~117~~214,~~245~~021	$	~~213~~272,~~699~~046	$	~~579~~326,~~631~~341	$	1,~~242~~019,~~906~~067	$	1,~~259~~023,~~880~~241
Variable-rate debt (a) (b)	$	~~178~~122,~~555~~963	$	8244,~~646~~674	$	42301,~~800~~154	$	~~117~~238,~~613~~036	$	~~217~~78,~~332~~813	$	~~205~~160,~~893~~144	$	~~844~~945,~~839~~784	$	~~843~~942,~~472~~817

__________

(a) Amounts are based on the exchange rate at December 31, ~~2016~~2017, as applicable.

~~(b)~~CPA:17 ~~Includes~~– ~~$50.0~~Global ~~million~~2017 ~~outstanding~~10-K ~~term~~– ~~loan under our Senior Credit Facility, which is scheduled to mature on August 26, 2018, unless extended pursuant to its terms.~~63

~~CPA®:17~~(b) –Includes ~~Global~~$50.0 ~~2016~~million ~~10-K~~outstanding –Term 63Loan under our Senior Credit Facility, which is scheduled to mature on August 26, 2018, unless extended pursuant to its terms.

At December 31, ~~2016~~2017, the estimated fair value of our fixed-rate debt, ~~and~~as well as any variable-rate debt that currently bears interest at fixed rates or has effectively been converted to a fixed rate through the use of interest rate swaps, 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 December 31, ~~2016~~2017 by an aggregate increase of $5348.10 million or an aggregate decrease of $7566.59 million, respectively. Annual interest expense on our unhedged variable-rate debt at December 31, ~~2016~~2017 would increase or decrease by $5.4.8 million for each respective 1% change in annual interest rates.

As more fully described under Liquidity and Capital Resources –— Summary of Financing in Item 7 above, a portion of our variable-rate debt in the table above bore interest at fixed rates at December 31, ~~2016~~2017, 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.

Foreign Currency Exchange Rate Risk

We own international investments, primarily in Europe and Asia, and as a result, are subject to risk from the effects of exchange rate movements in various foreign currencies, primarily the euro and, to a lesser extent, the British pound sterling, the Japanese yen, and the Norwegian krone, which may affect future costs and cash flows. Although all of our ~~foreign~~international investments through the fourth quarter of ~~2016~~2017 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 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.

The ~~Brexit~~June 23, 2016 referendum by voters in the United Kingdom to exit the European Union, a process commonly referred to as “Brexit,” adversely impacted global markets, including certain currencies, and has resulted in a ~~sharp~~ decline in the value of the British pound sterling ~~and, to a lesser extent, the euro,~~ as compared to the U.S. dollar. InVolatility ~~addition,~~ in ~~October~~exchange ~~2016,~~rates ~~the~~is ~~Prime~~expected ~~Minister~~to ofcontinue as the United Kingdom ~~announced~~negotiates ~~that~~its ~~the~~likely ~~formal~~exit ~~withdrawal~~from ~~process would be triggered in~~ the ~~first~~European ~~quarter of 2017~~Union. As aof ~~result~~December 31, ~~the~~2017, ~~end-of-period~~1% ~~rate~~and ~~for~~43% ~~the~~of ~~U.S.~~our ~~dollar~~total inpro ~~relation~~rata toABR ~~the~~was ~~British~~from ~~pound~~the ~~sterling~~United atKingdom ~~December~~and ~~31,~~other ~~2016~~European ~~decreased~~Union bycountries, 5respectively.0% Any toimpact ~~$1.2312~~ from ~~$1.2962~~Brexit aton ~~September~~us 30will depend, ~~2016.~~in ~~Volatility~~part, inon ~~exchange~~the ~~rates~~outcome isof ~~expected~~the torelated ~~continue~~tariff, astrade, ~~the~~regulatory, ~~United~~and ~~Kingdom~~other ~~negotiates~~negotiations. Although ~~its~~it ~~potential~~is ~~exit~~unknown ~~from~~what the ~~European~~result ~~Union.~~of Asthose ofnegotiations ~~December 31,~~will ~~2016~~be, 1%it ~~and~~is ~~38%~~possible ofthat ~~our~~new ~~total~~terms ~~pro~~may ~~rata~~adversely ~~ABR~~affect ~~was~~our ~~from~~operations ~~the United Kingdom~~ and ~~other~~financial ~~European Union countries, respectively~~results.

~~Any~~Scheduled ~~impact~~future ~~from~~minimum ~~Brexit on us will depend~~rents, inexclusive ~~part, on the outcome~~ of ~~the~~renewals, ~~related~~under ~~tariff,~~non-cancelable ~~trade,~~operating ~~regulatory~~leases, ~~and~~for ~~other~~our ~~negotiations. Although~~consolidated itforeign isoperations ~~unknown~~as ~~what the result~~ of ~~those~~December 31, ~~negotiations will be~~2017, itduring iseach ~~possible~~of ~~that~~the ~~new~~next ~~terms~~five ~~may~~calendar ~~adversely~~years ~~affect~~and ~~our~~thereafter, ~~operations~~are ~~and~~as ~~financial~~follows ~~results.~~(in thousands):

Scheduled future minimum rents, exclusive of renewals, under non-cancelable operating leases, for our consolidated foreign operations as of December 31, 2016, during each of the next five calendar years and thereafter, are as follows (in thousands):



Lease Revenues ^(a)	2018		2019		2020		2021		2022		Thereafter		Total
Euro ^(b)	$	120,305	$	120,491	$	121,010	$	120,098	$	119,748	$	764,966	$	1,366,618
British pound sterling ^(c)	5,249		5,249		5,263		5,249		5,249		42,093		68,352
Japanese yen ^(d)	2,708		2,708		2,715		2,708		653		—		11,492
	$	128,262	$	128,448	$	128,988	$	128,055	$	125,650	$	807,059	$	1,446,462

Lease Revenues (a)	2017		2018		2019		2020		2021		Thereafter		Total
Euro (b)	$	104,625	$	104,777	$	104,932	$	105,361	$	104,574	$	766,649	$	1,290,918
British pound sterling (c)	4,773		4,773		4,773		4,786		4,773		42,862		66,740
Japanese yen (d)	2,697		2,697		2,697		2,697		2,697		673		14,158
	$	112,095	$	112,247	$	112,402	$	112,844	$	112,044	$	810,184	$	1,371,816

CPA:17 – Global 2017 10-K – 64

~~CPA®:17~~Scheduled –debt ~~Global~~service ~~2016~~payments ~~10-K~~(principal –and 64interest) for mortgage notes payable for our consolidated foreign operations as of December 31, 2017, during each of the next five calendar years and thereafter, are as follows (in thousands):

Scheduled debt service payments (principal and interest) for mortgage notes payable for our consolidated foreign operations as of December 31, 2016, during each of the next five calendar years and thereafter, are as follows (in thousands):



Debt Service ^(a) (e)	2018		2019		2020		2021		2022		Thereafter		Total
Euro ^(b)	$	62,747	$	28,987	$	107,975	$	165,042	$	92,297	$	180,839	$	637,887
British pound sterling ^(c)	1,695		12,613		379		17,579		—		—		32,266
Japanese yen ^(d)	22,263		—		—		—		—		—		22,263
	$	86,705	$	41,600	$	108,354	$	182,621	$	92,297	$	180,839	$	692,416

Debt Service (a) (e)	2017		2018		2019		2020		2021		Thereafter		Total
Euro (b)	$	147,660	$	27,092	$	24,203	$	93,646	$	143,824	$	219,555	$	655,980
British pound sterling (c)	1,585		1,554		11,498		355		16,019		—		31,011
Japanese yen (d)	22,697		—		—		—		—		—		22,697
	$	171,942	$	28,646	$	35,701	$	94,001	$	159,843	$	219,555	$	709,688

__________

(a) Amounts are based on the applicable exchange rates at December 31, ~~2016~~2017. Contractual rents and debt obligations are denominated in the functional currency of the country of each property. Our foreign operations denominated in the Norwegian krone are related to an unconsolidated jointly owned investment and is excluded from the amounts in the tables.

(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 December 31, ~~2016~~2017 of $67.3 million.

(c) 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 December 31, ~~2016~~2017 of $0.4 million.

(d) We estimate that, for a 1% increase or decrease in the exchange rate between the Japanese yen and the U.S. dollar, there would be a corresponding change in the projected estimated property-level cash flow at December 31, ~~2016~~2017 of less than $0.1 million.

(e) Interest on unhedged variable-rate debt obligations was calculated using the applicable annual interest rates and balances outstanding at December 31, ~~2016~~2017.

AsProjected adebt ~~result~~service ofobligations ~~scheduled~~exceed ~~balloon~~projected ~~payments~~lease onrevenues ~~certain~~denominated ofin ~~our~~Japanese ~~international~~yen ~~non-recourse~~in ~~mortgage loans~~2018, ~~projected~~British ~~debt~~pound ~~service~~sterling ~~obligations~~in ~~exceed~~2019, ~~projected~~and ~~lease~~euros ~~revenues~~and British pound sterling in ~~2017~~2021. InThis ~~2017,~~is ~~balloon~~primarily ~~payments~~due ~~totaling~~to ~~$137.7~~balloon ~~million~~payments ~~are~~on ~~due~~certain onof ~~nine~~our non-recourse mortgage loans that are collateralized by properties that we own with affiliates. We currently anticipate that, by their respective due dates, we will have refinanced or repaid certain of these loans using our cash resources, including unused capacity on our credit facility and proceeds from dispositions, but there can be no assurance that we will be able to do so on favorable terms, if at all. On February 28, 2017, we repaid two international non-recourse mortgage loans totaling $42.9 million, which were both scheduled to mature in the first quarter of 2017 (amount is based on the exchange rate of the euro as of the date of repayment) (Note 17).

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. While we believe our portfolio is reasonably well diversified, it does contain concentrations in certain areas in excess of 10%, based on the percentage of our consolidated total revenues or pro rata ABR.

For the year ended December 31, ~~2016~~2017, our consolidated portfolio had the following significant characteristics in excess of 10%, based on the percentage of our consolidated total revenues:

• 7472% related to domestic properties, which included a concentration in Texas and New York of 15% and 10%, respectively; and

• 2628% related to international properties.

At December 31, ~~2016~~2017, our ~~consolidated~~ net-leased portfolio, which excludes investments within our Self Storage segment as well as in our All Other category, had the following significant property and lease characteristics in excess of 10% in certain areas, based on the percentage of our ~~consolidated~~pro rata ABR as of that date:

• 6654% related to domestic properties;

• 3446% related to international properties;

• 3128% related to ~~office~~warehouse facilities, 2527% related to ~~warehouse~~office facilities, 2325% related to retail facilities, and 1614% related to industrial facilities; and

• 2728% related to the retail stores industry, ~~and 11~~14% related to the grocery industry, and 10% related to business ~~services~~service industry.

CPA®:17 – Global ~~2016~~2017 10-K – 65

Item 8. Financial Statements and Supplementary Data.

TABLE OF CONTENTS	Page No.
Report of Independent Registered Public Accounting Firm	67
Consolidated Balance Sheets	68
Consolidated Statements of Income	69
Consolidated Statements of Comprehensive Income	70
Consolidated Statements of Equity	71
Consolidated Statements of Cash Flows	73
Notes to Consolidated Financial Statements	75
Schedule II — Valuation and Qualifying Accounts	120
Schedule II — Valuation and Qualifying Accounts for the Years Ended December 31, 2017, 2016, and 2015	123
Schedule III — Real Estate and Accumulated Depreciation	121
Schedule III — Real Estate and Accumulated Depreciation for the Years Ended December 31, 2017, 2016, and 2015	124
Notes to Schedule III	128
Schedule IV — Mortgage Loans on Real Estate for the Years Ended December 31, 2017, 2016, and 2015	132
Schedule IV — Mortgage Loans on Real Estate	129
Notes to Schedule IV	130

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.

CPA®:17 – Global ~~2016~~2017 10-K – 66

~~REPORT~~Report OFof ~~INDEPENDENT~~Independent ~~REGISTERED~~Registered ~~PUBLIC~~Public ~~ACCOUNTING~~Accounting ~~FIRM~~Firm

To the Board of Directors and Stockholders of ~~Corporate Property Associates 17 – Global Incorporated:~~

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of income and comprehensive income, of equity and of cash flows, listed in the table of contents appearing under Item 8 present fairly, in all material respects, the financial position of Corporate Property Associates 17 – Global Incorporated and its subsidiaries (the “Company”) as of December 31, 2016 and 2015, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2016 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 index appearing under Item 8 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 financial 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/~~Opinion ~~PricewaterhouseCoopers~~on ~~LLP~~the Financial Statements

We have audited the accompanying consolidated balance sheets of Corporate Property Associates 17 – Global Incorporated and its subsidiaries as of December 31, 2017 and 2016, and the related consolidated statements of income, comprehensive income, equity and cash flows for each of the three years in the period ended December 31, 2017, including the related notes and financial statement schedules listed in the accompanying index (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2017 and 2016, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2017 in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/PricewaterhouseCoopers LLP

New York, New York

March 914, ~~2017~~2018

~~CPA®:17~~We –have ~~Global~~served ~~2016~~as ~~10-K~~the –Company’s 67auditor since 2007.

CPA:17 – Global 2017 10-K – 67

CORPORATE PROPERTY ASSOCIATES 17 – GLOBAL INCORPORATED

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)

	December 31,
	2016			2015
	2017			2016
Assets
Investments in real estate:
Real estate, at cost	$	2,745,424		$	2,658,877
Real estate — Land, buildings and improvements	$	2,772,611		$	2,745,424
Operating real estate, at cost	258,971			275,521
Operating real estate — Land, buildings and improvements	340,772			258,971
Accumulated depreciation	(299,533		)	(256,175		)
Net investments in direct financing leases	509,228			508,392
Net investments in properties	2,704,862			2,678,223
In-place lease intangible assets	629,961			620,149
Real estate under construction	—			1,068
Other intangible assets	111,004			103,918
Assets held for sale	~~14,850~~—			—14,850
Net investments in direct financing leases	508,392			495,564
Investments in real estate	4,363,576			4,251,704
Net investments in real estate	3,228,104			3,174,855
Accumulated depreciation and amortization	(626,655		)	(506,238		)
Equity investments in real estate	451,105			514,147
Net investments in real estate	3,736,921			3,745,466
Cash and cash equivalents	273,635			152,889
Equity investments in real estate	409,254			451,105
In-place lease and tenant relationship intangible assets, net	438,551			445,223
Cash and cash equivalents	119,094			273,635
Other intangible assets, net	79,115			80,049
Other assets, net	322,201			228,717
Other assets, net	228,413			246,027
Total assets	$	4,587,470		$	4,698,923
Total assets	$	4,698,923		$	4,613,190
Liabilities and Equity
Liabilities:
Debt:
Non-recourse debt, net	$	2,022,250		$	1,881,774
Mortgage debt, net	$	1,849,459		$	2,022,250
Senior Credit Facility, net	49101,~~751~~931			~~112~~49,~~834~~751
Accounts payable, accrued expenses and other liabilities	128,911			133,948
Debt, net	1,951,390			2,072,001
Below-market rent and other intangible liabilities, net	82,799			96,701
Accounts payable, accrued expenses and other liabilities	132,751			128,911
Deferred income taxes	32,655			24,929
Below-market rent and other intangible liabilities, net	61,222			82,799
Due to affiliates	11,723			13,634
Deferred income taxes	30,524			32,655
Distributions payable	55,830			54,775
Due to affiliates	11,467			11,723
Total liabilities	2,383,919			2,318,595
Distributions payable	56,859			55,830
Total liabilities	2,244,213			2,383,919
Commitments and contingencies (Note 11)
Equity:
CPA®:17 – Global stockholders’ equity:
Preferred stock, $0.001 par value; 50,000,000 shares authorized; none issued	—			—
Common stock, $0.001 par value; 900,000,000 shares authorized; and 343,575,840 and 337,065,419 shares, respectively, issued and outstanding	343			337
Common stock, $0.001 par value; 900,000,000 shares authorized; and 349,899,827 and 343,575,840 shares, respectively, issued and outstanding	349			343
Additional paid-in capital	3,~~106~~174,~~456~~786			3,~~037~~106,~~727~~456
Distributions in excess of accumulated earnings	(~~732~~861,~~613~~319		)	(~~700~~732,~~912~~613		)
Accumulated other comprehensive loss	(~~156~~78,~~676~~420		)	(~~139~~156,~~805~~676		)
Total CPA®:17 – Global stockholders’ equity	2,217,510			2,197,347
Total stockholders’ equity	2,235,396			2,217,510
Noncontrolling interests	97107,~~494~~861			97,~~248~~494
Total equity	2,~~315~~343,~~004~~257			2,~~294~~315,~~595~~004
Total liabilities and equity	$	4,~~698~~587,~~923~~470		$	4,~~613~~698,~~190~~923

See Notes to Consolidated Financial Statements.

CPA®:17 – Global ~~2016~~2017 10-K – 68

CORPORATE PROPERTY ASSOCIATES 17 – GLOBAL INCORPORATED

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except share and per share amounts)

	Years Ended December 31,
	2016			2015			2014
	2017			2016			2015
Revenues
Lease revenues:
Rental income	$	~~298~~309,~~775~~233		$	~~271~~298,~~523~~775		$	~~254~~271,~~658~~523
Interest income from direct financing leases	58,~~066~~399			5558,~~669~~066			5455,~~517~~669
Total lease revenues	~~356~~367,~~841~~632			~~327~~356,~~192~~841			~~309~~327,~~175~~192
Other real estate income	4640,~~623~~309			4946,~~562~~623			5349,~~107~~562
Other operating income	3027,~~224~~875			3630,~~591~~224			2836,~~536~~591
Other interest income	611,~~674~~838			136,~~602~~674			513,~~888~~602
	440,362			426,947			396,706
	447,654			440,362			426,947
Operating Expenses
Depreciation and amortization	~~122~~115,~~259~~630			~~106~~122,~~732~~259			~~102~~106,~~167~~732
Property expenses	7075,~~728~~209			7270,~~514~~728			6672,~~402~~514
Impairment charges	29,706			1,023			570
Other real estate expenses	17,827			17,642			19,595
Other real estate expenses	17,642			19,595			24,665
General and administrative	15,358			16,310			18,377
General and administrative	16,310			18,377			22,253
Impairment charges	8,959			29,706			1,023
Acquisition expenses	7,157			651			5,169
Acquisition and other expenses	1,343			7,157			651
	263,802			218,892			221,226
	234,326			263,802			218,892
Other Income and Expenses
Interest expense	(9888,~~813~~270		)	(9398,~~551~~813		)	(93,~~001~~551		)
Gain on change in control of interests	49,922			—			—
Other income and (expenses)	23,231			(1,728		)	1,912
Loss on extinguishment of debt	(24,376		)	(275		)	(263		)
(Loss) gain on change in control of interests	(13,851		)	49,922			—
Equity in earnings of equity method investments in real estate	3,262			14,667			24,073
Loss on extinguishment of debt	(1,922		)	(24,376		)	(275		)
Other income and (expenses)	(1,728		)	1,912			(1,909		)
Equity in earnings of equity method investments in real estate	261			3,262			14,667
	(71,733		)	(77,247		)	(71,100		)
	(80,551		)	(71,733		)	(77,247		)
Income before income taxes and gain on sale of real estate	~~104~~132,~~827~~777			~~130~~104,~~808~~827			~~104~~130,~~380~~808
Provision for income taxes	(8,477		)	(8,885		)	(10,725		)
Benefit from (provision for) income taxes	513			(8,477		)	(8,885		)
Income before gain on sale of real estate, net of tax	96133,~~350~~290			~~121~~96,~~923~~350			93121,~~655~~923
Gain on sale of real estate, net of tax	~~132~~2,~~858~~879			2132,~~197~~858			132,~~338~~197
Net Income	~~229~~136,~~208~~169			~~124~~229,~~120~~208			~~106~~124,~~993~~120
Net income attributable to noncontrolling interests (inclusive of Available Cash Distributions to a related party of $24,765, $24,668, and $20,427, respectively)	(38,863		)	(39,915		)	(32,842		)
Net income attributable to noncontrolling interests (inclusive of Available Cash Distributions to a related party of $26,675, $24,765, and $24,668, respectively)	(38,882		)	(38,863		)	(39,915		)
Net Income Attributable to CPA®:17 – Global	$	190,345		$	84,205		$	74,151
Net Income Attributable to CPA:17 – Global	$	97,287		$	190,345		$	84,205
Basic and Diluted Earnings Per Share	$	0.5628		$	0.2556		$	0.2325
Basic and Diluted Weighted-Average Shares Outstanding	~~342~~348,~~147~~329,~~444~~966			~~334~~342,~~468~~147,~~363~~444			~~324~~334,~~117~~468,~~508~~363

See Notes to Consolidated Financial Statements.

CPA®:17 – Global ~~2016~~2017 10-K – 69

CORPORATE PROPERTY ASSOCIATES 17 – GLOBAL INCORPORATED

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

	Years Ended December 31,
	2016			2015			2014
	2017			2016			2015
Net Income	$	~~229~~136,~~208~~169		$	~~124~~229,~~120~~208		$	~~106~~124,~~993~~120
Other Comprehensive Loss
Other Comprehensive Income (Loss)
Foreign currency translation adjustments	~~(18~~100,~~785~~948		)	(8118,~~037~~785		)	(9381,~~401~~037		)
Change in net unrealized gain on derivative instruments	1,349			20,889			24,439
Change in net unrealized (loss) gain on derivative instruments	(20,462		)	1,349			20,889
Change in unrealized gain on marketable securities	29			29			285
Change in unrealized gain on marketable investments	33			29			29
	(17,407		)	(60,119		)	(68,677		)
	80,519			(17,407		)	(60,119		)
Comprehensive Income	~~211~~216,~~801~~688			64211,~~001~~801			3864,~~316~~001
Amounts Attributable to Noncontrolling Interests
Net income	(38,~~863~~882		)	(3938,~~915~~863		)	(3239,~~842~~915		)
Foreign currency translation adjustments	~~536~~(2,263		)	~~1,321~~536			1,~~523~~321
Change in net unrealized gain on derivative instruments	—			—			(411		)
Comprehensive income attributable to noncontrolling interests	(41,145		)	(38,327		)	(38,594		)
Comprehensive income attributable to noncontrolling interests	(38,327		)	(38,594		)	(31,730		)
Comprehensive Income Attributable to CPA:17 – Global	$	175,543		$	173,474		$	25,407
Comprehensive Income Attributable to CPA®:17 – Global	$	173,474		$	25,407		$	6,586

See Notes to Consolidated Financial Statements.

CPA®:17 – Global ~~2016~~2017 10-K – 70

CORPORATE PROPERTY ASSOCIATES 17 – GLOBAL INCORPORATED

CONSOLIDATED STATEMENTS OF EQUITY

Years Ended December 31, ~~2016~~2017, ~~2015~~2016, and ~~2014~~2015

(in thousands, except share and per share amounts)

	CPA®:17 – Global
	CPA:17 – Global
	Total Outstanding Shares		Common Stock			Additional Paid-In Capital			Distributions in Excess of Accumulated Earnings			Accumulated Other Comprehensive Loss			Total CPA®:17– Global Stockholders			Noncontrolling Interests			Total
Balance at January 1, 2017	343,575,840		$	343		$	3,106,456		$	(732,613	)	$	(156,676	)	$	2,217,510		$	97,494		$	2,315,004
Shares issued	10,064,364		10			102,068									102,078						102,078
Shares issued to affiliates	2,773,407		3			28,051									28,054						28,054
Shares issued to directors	9,891		—			100									100						100
Distributions declared ($0.6500 per share)									(225,993		)				(225,993		)				(225,993		)
Distributions to noncontrolling interests															—			(40,290		)	(40,290		)
Contributions from noncontrolling interests															—			9,512			9,512
Net income									97,287						97,287			38,882			136,169
Other comprehensive income:
Foreign currency translation adjustments												98,685			98,685			2,263			100,948
Realized and unrealized loss on derivative instruments												(20,462		)	(20,462		)				(20,462		)
Change in unrealized gain on marketable investments												33			33						33
Repurchase of shares	(6,523,675	)	(7		)	(61,889		)							(61,896		)				(61,896		)
Balance at December 31, 2017	349,899,827		$	349		$	3,174,786		$	(861,319	)	$	(78,420	)	$	2,235,396		$	107,861		$	2,343,257
Balance at January 1, 2016	337,065,419		$	337		$	3,037,727		$	(700,912	)	$	(139,805	)	$	2,197,347		$	97,248		$	2,294,595
Shares issued, net of offering costs	10,255,011		10			103,608									103,618						103,618
Shares issued	10,255,011		10			103,608									103,618						103,618
Shares issued to directors	9,766		—			100									100						100
Shares issued to affiliates	1,469,025		1			14,975									14,976						14,976
Contributions from noncontrolling interests															—			147			147
Shares issued to directors	9,766		—			100									100						100
Distributions declared ($0.6500 per share)									(222,046		)				(222,046		)				(222,046		)
Distributions to noncontrolling interests															—			(38,228		)	(38,228		)
Contributions from noncontrolling interests															—			147			147
Net income									190,345						190,345			38,863			229,208
Other comprehensive loss:
Foreign currency translation adjustments												(18,249		)	(18,249		)	(536		)	(18,785		)
Change in net unrealized gain on derivative instruments												1,349			1,349						1,349
Realized and unrealized gain on derivative instruments												1,349			1,349						1,349
Change in unrealized gain on marketable securities												29			29						29
Change in unrealized gain on marketable investments												29			29						29
Repurchase of shares	(5,223,381	)	(5		)	(49,954		)							(49,959		)				(49,959		)
Balance at December 31, 2016	343,575,840		$	343		$	3,106,456		$	(732,613	)	$	(156,676	)	$	2,217,510		$	97,494		$	2,315,004
Balance at January 1, 2015	328,480,839		$	328		$	2,955,440		$	(567,806	)	$	(81,007	)	$	2,306,955		$	78,442		$	2,385,397
Shares issued, net of offering costs	11,009,104		11			103,646									103,657						103,657
Shares issued to directors	10,288		—			100									100						100
Shares issued to affiliates	1,613,468		2			15,628									15,630						15,630
Contributions from noncontrolling interests															—			15,928			15,928
Distributions declared ($0.6500 per share)									(217,311		)				(217,311		)				(217,311		)
Distributions to noncontrolling interests															—			(35,716		)	(35,716		)
Net income									84,205						84,205			39,915			124,120
Other comprehensive loss:
Foreign currency translation adjustments												(79,716		)	(79,716		)	(1,321		)	(81,037		)
Change in net unrealized gain on derivative instruments												20,889			20,889						20,889
Change in unrealized gain on marketable securities												29			29						29
Repurchase of shares	(4,048,280	)	(4		)	(37,087		)							(37,091		)				(37,091		)
Balance at December 31, 2015	337,065,419		$	337		$	3,037,727		$	(700,912	)	$	(139,805	)	$	2,197,347		$	97,248		$	2,294,595

(Continued)

CPA®:17 – Global ~~2016~~2017 10-K – 71

CORPORATE PROPERTY ASSOCIATES 17 – GLOBAL INCORPORATED

CONSOLIDATED STATEMENTS OF EQUITY

(Continued)

Years Ended December 31, ~~2016~~2017, ~~2015~~2016, and ~~2014~~2015

(in thousands, except share and per share amounts)

	CPA®:17 – Global
	CPA:17 – Global
	Total Outstanding Shares		Common Stock			Additional Paid-In Capital			Distributions in Excess of Accumulated Earnings			Accumulated Other Comprehensive Loss			Total CPA®:17– Global Stockholders			Noncontrolling Interests			Total
Balance at January 1, 2014	317,353,899		$	317		$	2,852,456		$	(431,095	)	$	(13,442	)	$	2,408,236		$	77,488		$	2,485,724
Balance at January 1, 2015	328,480,839		$	328		$	2,955,440		$	(567,806	)	$	(81,007	)	$	2,306,955		$	78,442		$	2,385,397
Shares issued, net of offering costs	11,168,340		11			101,972									101,983						101,983
Shares issued	11,009,104		11			103,646									103,657						103,657
Shares issued to affiliates	21,~~756~~613,~~965~~468		32			2615,~~384~~628									2615,~~387~~630						2615,~~387~~630
Distributions declared ($0.6500 per share)									(210,862		)				(210,862		)				(210,862		)
Shares issued to directors	10,288		—			100									100						100
Distributions to noncontrolling interests															—			(30,776		)	(30,776		)
Distributions declared ($0.6500 per share)									(217,311		)				(217,311		)				(217,311		)
Net income									74,151						74,151			32,842			106,993
Distributions to noncontrolling interests															—			(35,716		)	(35,716		)
Contributions from noncontrolling interests															—			15,928			15,928
Net income									84,205						84,205			39,915			124,120
Other comprehensive loss:
Foreign currency translation adjustments												(9179,~~878~~716		)	(9179,~~878~~716		)	(1,~~523~~321		)	(9381,~~401~~037		)
Change in net unrealized gain on derivative instruments												24,028			24,028			411			24,439
Realized and unrealized gain on derivative instruments												20,889			20,889						20,889
Change in unrealized gain on marketable securities												285			285						285
Change in unrealized gain on marketable investments												29			29						29
Repurchase of shares	(24,~~798~~048,~~365~~280	)	(34		)	(2537,~~372~~087		)							(2537,~~375~~091		)				(2537,~~375~~091		)
Balance at December 31, 2014	328,480,839		$	328		$	2,955,440		$	(567,806	)	$	(81,007	)	$	2,306,955		$	78,442		$	2,385,397
Balance at December 31, 2015	337,065,419		$	337		$	3,037,727		$	(700,912	)	$	(139,805	)	$	2,197,347		$	97,248		$	2,294,595

See Notes to Consolidated Financial Statements.

CPA®:17 – Global ~~2016~~2017 10-K – 72

CORPORATE PROPERTY ASSOCIATES 17 – GLOBAL INCORPORATED

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	Years Ended December 31,
	2016			2015			2014
	2017			2016			2015
Cash Flows — Operating Activities
Net income	$	~~229~~136,~~208~~169		$	~~124~~229,~~120~~208		$	~~106~~124,~~993~~120
Adjustments to net income:
Gain on sale of real estate	(132,858		)	(2,197		)	(13,338		)
Depreciation and amortization, including intangible assets and deferred financing costs	121,749			129,712			112,722
Depreciation and amortization, including intangible assets and deferred financing costs	129,712			112,722			104,894
Non-cash asset management fee expense and directors’ compensation	29,463			14,953			14,696
Gain on change in control of interests	(49,922		)	—			—
Realized and unrealized (gain) loss on foreign currency transactions and other	(18,040		)	8,746			7,696
Straight-line rent adjustment and amortization of rent-related intangibles	(36,080		)	(21,420		)	(19,101		)
Straight-line rent	(14,386		)	(14,900		)	(17,062		)
Impairment charges	29,706			1,023			570
Equity in losses of equity method investments in real estate in excess of distributions received	14,201			11,745			2,501
Non-cash asset management fee expense and directors’ compensation	14,953			14,696			26,387
Loss (gain) on change in control of interests	13,851			(49,922		)	—
Equity in losses (earnings) of equity method investments in real estate in excess of distributions received	11,745			2,501			(13,974		)
Impairment charges	8,959			29,706			1,023
Realized and unrealized loss on foreign currency transactions and other	8,746			7,696			5,408
Write-off of real estate, provision for doubtful accounts, and other non-cash adjustments	(7,159		)	(1,453		)	2,646
Deferred income tax expense	4,683			4,150			7,599
Amortization of rent-related intangibles and deferred rental revenue	(6,153		)	(19,637		)	(6,076		)
Accretion of commercial mortgage-backed securities and other	(1,827		)	(3,760		)	(554		)
Deferred income tax (benefit) expense	(4,500		)	4,683			4,150
Loss on extinguishment of debt	1,136			58			—
Accretion of commercial mortgage-backed securities and other	(3,171		)	(1,827		)	(3,760		)
Other non-cash adjustments	90			928			—
Gain on sale of real estate	(2,879		)	(132,858		)	(2,197		)
Settlement of derivative asset	—			2,948			—
Loss on extinguishment of debt	1,587			1,136			58
Net changes in other operating assets and liabilities	2,077			419			5,171
Settlement of derivative asset	(26		)	—			2,948
Net Cash Provided by Operating Activities	211,369			243,884			210,055
Net changes in other operating assets and liabilities	(12,631		)	2,077			419
Net Cash Provided by Operating Activities	257,034			211,369			243,884
Cash Flows — Investing Activities
Proceeds from sale of real estate	258,293			—			68,789
Capital contributions to equity investments in real estate	(153,460		)	(11,048		)	(39,015		)
Acquisitions of real estate and direct financing leases	(203,093		)	(293,324		)	(74,993		)
Proceeds from sale of real estate	111,229			258,293			—
Return of capital from equity investments in real estate	4239,~~744~~974			3442,~~962~~744			8334,~~882~~962
Value added taxes refunded in connection with acquisition of real estate	23,769			15,194			4,852
Proceeds from repayment of preferred equity interest	27,000			—			—
Funding for build-to-suit projects	(1312,~~312~~021		)	(2413,~~258~~312		)	(6824,~~901~~258		)
Proceeds from repayment of loan receivable	12,600			40,000			—
Acquisitions of real estate and direct financing leases	(10,822		)	(203,093		)	(293,324		)
Capital contributions to equity investments in real estate	(11,048		)	(39,015		)	(199,470		)
Value added taxes refunded in connection with acquisition of real estate	7,334			23,769			15,194
Capital expenditures on owned real estate	(10,682		)	(8,035		)	(4,352		)
Other investing activities, net	4,689			2,407			—
Value added taxes paid in connection with acquisition of real estate	(5,712		)	(37,540		)	(5,499		)
Payment of deferred acquisition fees to an affiliate	(3,828		)	(2,631		)	(6,382		)
Payment of deferred acquisition fees to an affiliate	(2,631		)	(6,382		)	(6,755		)
Capital expenditures on owned real estate	(2,958		)	(10,682		)	(8,035		)
Deposits for investments	2,501			(1,000		)	—
Value added taxes paid in connection with acquisition of real estate	(1,941		)	(5,712		)	(37,540		)
Other investing activities, net	2,407			—			—
Changes in investing restricted cash	1,480			1,870			6,300
Changes in investing restricted cash	1,870			6,300			(4,691		)
Proceeds from repayment of loan receivable	—			12,600			40,000
Proceeds from repayment of debenture	610			7,633			—
Deposits for investments	—			2,501			(1,000		)
Funding of loans receivable	—			(42,600		)	—
Proceeds from repayment of debenture	—			610			7,633
Investment in securities	—			—			(7,789		)
Funding of loans receivable	—			—			(42,600		)
Net Cash Provided by (Used in) Investing Activities	986,~~316~~676			~~(348~~98,~~065~~316		)	(~~214~~348,~~927~~065		)
Cash Flows — Financing Activities
Repayments of Senior Credit Facility	(289,558		)	(120,400		)	—
Scheduled payments and prepayments of mortgage principal	(458,010		)	(177,469		)	(121,267		)
Proceeds from mortgage financing	266,970			170,233			92,791
Distributions paid	(224,964		)	(220,991		)	(215,914		)
Proceeds from Senior Credit Facility	225,693			235,367			—
Proceeds from mortgage financing	203,478			266,970			170,233
Distributions paid	(220,991		)	(215,914		)	(209,054		)
Proceeds from Senior Credit Facility	119,235			225,693			235,367
Scheduled payments and prepayments of mortgage principal	(177,469		)	(121,267		)	(51,309		)
Proceeds from issuance of shares, net of issuance costs	102,078			103,618			103,657
Proceeds from issuance of shares, net of issuance costs	103,618			103,657			101,983
Repayments of Senior Credit Facility	(68,990		)	(289,558		)	(120,400		)
Repurchase of shares	(4961,~~959~~896		)	(3749,~~091~~959		)	(2537,~~375~~091		)
Distributions to noncontrolling interests	(3840,~~228~~290		)	(3538,~~716~~228		)	(3035,~~776~~716		)
Payment of financing costs and mortgage deposits, net of deposits refunded	(2,284		)	(3,408		)	(878		)
Contributions from noncontrolling interests	4,001			147			15,928
Changes in financing restricted cash	(462		)	(1,098		)	(3,564		)
Payment of financing costs and mortgage deposits, net of deposits refunded	(1,058		)	(2,203		)	(3,544		)
Contributions from noncontrolling interests	147			15,928			—
Other financing activities, net	(595		)	(81		)	—
Proceeds from notes payable to affiliate	—			25,000			—
Changes in financing restricted cash	(10		)	(462		)	(962		)
Repayment of notes payable to affiliate	—			(25,000		)	—
Proceeds from notes payable to affiliate	—			—			25,000
Net Cash Used in Financing Activities	(182,523		)	(9,709		)	(126,182		)
Repayment of notes payable to affiliate	—			—			(25,000		)
Net Cash Used in Financing Activities	(427,021		)	(182,523		)	(9,709		)
Change in Cash and Cash Equivalents During the Year
Effect of exchange rate changes on cash	(68,~~416~~770		)	(86,~~940~~416		)	(118,~~335~~940		)
Net increase (decrease) in cash and cash equivalents	120,746			(122,830		)	(142,389		)
Net (decrease) increase in cash and cash equivalents	(154,541		)	120,746			(122,830		)
Cash and cash equivalents, beginning of year	~~152~~273,~~889~~635			~~275~~152,~~719~~889			~~418~~275,~~108~~719
Cash and cash equivalents, end of year	$	~~273~~119,~~635~~094		$	~~152~~273,~~889~~635		$	~~275~~152,~~719~~889

See Notes to Consolidated Financial Statements.

CPA®:17 – Global ~~2016~~2017 10-K – 73

CORPORATE PROPERTY ASSOCIATES 17 – GLOBAL INCORPORATED

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Continued)

Supplemental Cash Flow Information

(in thousands)

	Years Ended December 31,
	2016		2015		2014
	2017		2016		2015
Interest paid, net of amounts capitalized	$	9383,~~590~~734	$	9093,~~448~~590	$	90,~~477~~448
Interest capitalized	$	—	$	~~1,632~~—	$	41,~~852~~632
Income taxes paid	$	43,~~650~~761	$	34,~~399~~650	$	43,~~467~~399

See Notes to Consolidated Financial Statements.

CPA®:17 – Global ~~2016~~2017 10-K – 74

CORPORATE PROPERTY ASSOCIATES 17 – GLOBAL INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Organization

Corporate Property Associates 17 – Global Incorporated, or CPA®:17 – Global, and, together with its consolidated subsidiaries, we, us, or our, is a publicly owned, non-traded real estate investment trust, or REIT, that invests primarily in commercial real estate properties leased to companies both domestically and internationally. We were formed in 2007 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 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 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®:17 Limited Partnership, or the Operating Partnership, and at December 31, ~~2016~~2017, we owned 99.99% 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 December 31, ~~2016~~2017, our portfolio was comprised of full or partial ownership interests in ~~395~~411 ~~fully-occupied~~ properties, substantially all of which were fully-occupied and triple-net leased to ~~121~~116 tenants, and totaled approximately 4344.4 million square feet (unaudited). In addition, our portfolio was comprised of full or ~~partial~~majority ownership interests in 38 operating properties, including 37 self-storage properties and one hotel property, for an aggregate of approximately 32.7 million square feet (unaudited). ~~As opportunities arise, we may also make other types of commercial real estate-related investments.~~

We operate in two reportable business segments: Net Lease and Self Storage. Our Net Lease segment includes our domestic and foreign investments in net-leased properties, whether they are accounted for as operating or direct financing leases. Our Self Storage segment is comprised of our investments in self-storage properties. In addition, we have investments in loans receivable, commercial mortgage-backed securities, or CMBS, one hotel, and certain other properties, which are included in our All Other category (Note 15). Our reportable business segments and All Other category are the same as our reporting units.

We raised aggregate gross proceeds of approximately $2.9 billion from our initial public offering, which closed in April 2011, and our follow-on offering, which closed in January 2013. ~~From~~We have fully invested the proceeds from our initial and follow-on public offerings. In addition, from inception through December 31, ~~2016~~2017, we$676.0 ~~have~~million ~~also~~of ~~received~~distributions to our shareholders were reinvested in our common stock through our Distribution Reinvestment Plan, or DRIP~~, proceeds of $574~~.~~0 million.~~

Note 2. Summary of Significant Accounting Policies ~~and Estimates~~

Critical Accounting Policies and Estimates

Accounting for Acquisitions

In accordance with the guidance for business combinations, we determine whether a transaction or other event is a business combination, which requires that the assets acquired and liabilities assumed constitute a business. Each business combination is then accounted for by applying the acquisition method. If the assets acquired are not a business, we account for the transaction or other event as an asset acquisition. Under both methods, we recognize the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquired entity. In addition, for transactions that are business combinations, we evaluate the existence of goodwill or a gain from a bargain purchase. We capitalize acquisition-related costs and fees associated with asset acquisitions. We immediately expense acquisition-related costs and fees associated with business combinations. However, following our adoption of Accounting Standards Update, or ASU, 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, on January 1, 2017, as described below, all transaction costs incurred during the year ended December 31, 2017 were capitalized since our acquisitions during the year were classified as asset acquisitions. Most of our future acquisitions are likely to be classified as asset acquisitions.

~~Purchase~~CPA:17 ~~Price~~– ~~Allocation~~Global of2017 Tangible Assets — When we acquire properties with leases classified as operating leases, we allocate the purchase price to the tangible and intangible assets and liabilities acquired based on their estimated fair values. The tangible assets consist of land, buildings, and site improvements. The intangible assets include the above10-K ~~and~~– below-market value of leases and the in-place leases, which include the value of tenant relationships. Land is typically valued utilizing the sales comparison (or market) approach. Buildings are valued, as if vacant, using the cost and/or income approach. Site improvements are valued using the cost approach. The fair value of real estate is determined (i) primarily by reference to portfolio appraisals, which determines their values on a property level, by applying a discounted cash flow analysis to the estimated net operating income for each property in the portfolio during the remaining anticipated lease term, and (ii) by the estimated residual value, which is based on a hypothetical sale of the property upon expiration of a lease factoring in the re-75

CPA®:17 – Global 2016 10-K – 75

Notes to Consolidated Financial Statements

Purchase Price Allocation of Tangible Assets — When we acquire properties with leases classified as operating leases, we allocate the purchase price to the tangible and intangible assets and liabilities acquired based on their estimated fair values. The tangible assets consist of land, buildings, and site improvements. The intangible assets include the above- and below-market value of leases and the in-place leases, which includes the value of tenant relationships. Land is typically valued utilizing the sales comparison (or market) approach. Buildings are valued, as if vacant, using the cost and/or income approach. Site improvements are valued using the cost approach. The fair value of real estate is determined (i) primarily by reference to portfolio appraisals, which determines their values on a property level, by applying a discounted cash flow analysis to the estimated net operating income for each property in the portfolio during the remaining anticipated lease term, and (ii) by the estimated residual value, which is based on a hypothetical sale of the property upon expiration of a lease factoring in the re-tenanting of such property at estimated current market rental rates, applying a selected capitalization rate, and deducting estimated costs of sale.

Assumptions used in the model are property-specific where this information is available; however, when certain necessary information is not available, we use available regional and property-type information. Assumptions and estimates include the following:


•	a discount rate or internal rate of return;


•	the marketing period necessary to put a lease in place;


•	carrying costs during the marketing period;


•	leasing commissions and tenant improvement allowances;


•	market rents and growth factors of these rents; and


•	a market lease term and a capitalization rate to be applied to an estimate of market rent at the end of the market lease term.

The discount rates and residual capitalization rates used to value the properties are selected based on several factors, including:


•	the creditworthiness of the lessees;


•	industry surveys;


•	property type;


•	property location and age;


•	current lease rates relative to market lease rates; and


•	anticipated lease duration.

In the case where a tenant has a purchase option deemed to be favorable to the tenant, or the tenant has long-term renewal options at rental rates below estimated market rental rates, we include the value of the exercise of such purchase option or long-term renewal options in the determination of residual value.

The remaining economic life of leased assets is estimated by relying in part upon third-party appraisals of the leased assets, industry standards, and based on our experience. Different estimates of remaining economic life will affect the depreciation expense that is recorded.

Purchase Price Allocation of Intangible Assets and Liabilities — We record above- and below-market lease intangible assets and liabilities for acquired properties based on the present value (using a discount rate reflecting the risks associated with the leases acquired including consideration of the credit of the lessee) of the difference between (i) the contractual rents to be paid pursuant to the leases negotiated or 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 the estimated lease term which includes renewal options that have rental rates below estimated market rental rates. We discount the difference between the estimated market rent and contractual rent to a present value using an interest rate reflecting our current assessment of the risk associated with the lease acquired, which includes a consideration of the credit of the lessee. Estimates of market rent are generally determined by us relying in part upon a third-party appraisal obtained in connection with the property acquisition and can include estimates of market rent increase factors, which are generally provided in the appraisal or by local real estate brokers. We measure the fair value of below-market purchase option liabilities we acquire as the excess of the present value of the fair value of the real estate over the present value of the tenant’s exercise price at the option date.

We evaluate the specific characteristics of each tenant’s lease and any pre-existing relationship with each tenant in determining the value of in-place lease intangibles. To determine the value of in-place lease intangibles, we consider the following:

• estimated market rent;

• estimated carrying costs of the property during a hypothetical expected lease-up period; and

• current market conditions and costs to execute similar leases, including tenant improvement allowances and rent concessions.

Estimated carrying costs of the property include real estate taxes, insurance, other property operating costs, and estimates of lost rentals at market rates during the market participants’ expected lease-up periods, based on assessments of specific market conditions.

CPA®:17 – Global 2016 10-K – 76

Notes to Consolidated Financial Statements

We determine these values using our estimates or by relying in part upon third-party appraisals conducted by independent appraisal firms.

WeCPA:17 ~~amortize~~– ~~the~~Global ~~above-market~~2017 ~~lease intangible as a reduction of lease revenue over the remaining contractual lease term. We amortize the below~~10-~~market~~K ~~lease~~– intangible as an increase to lease revenue over the initial term and any renewal periods in the respective leases. We include the value of above-market leases in Other intangible assets, net in the consolidated financial statements. We include the value of below-market leases in Below-market rent and other intangible liabilities in the consolidated financial statements. We include the amortization of above- and below-market ground lease intangibles in Property expenses in the consolidated financial statements.76

~~The~~Notes ~~value of any in-place lease is estimated~~ to beConsolidated ~~equal~~Financial to the acquirer’s avoidance of costs as a result of having tenants in place, that would be necessary to lease the property for a lease term equal to the remaining primary in-place lease term and the value of investment grade tenancy. The cost avoidance is derived first by determining the in-place lease term on the subject lease. Then, based on our review of the market, the cost to be borne by a property owner to replicate a market lease to the remaining in-place term is estimated. These costs consist of: (i) rent lost during downtime (i.e. assumed periods of vacancy), (ii) estimated expenses that would be incurred by the property owner during periods of vacancy, (iii) rent concessions (i.e. free rent), (iv) leasing commissions, and (v) tenant improvements allowances given to tenants. We determine these values using our estimates or by relying in part upon third-party appraisals. We amortize the value of in-place lease intangibles to expense over the remaining initial term of each lease. The amortization period for intangibles does not exceed the remaining depreciable life of the building.Statements

IfWe aamortize the above-market lease isintangible ~~terminated,~~as wea ~~charge~~reduction of lease revenue over the ~~unamortized~~remaining ~~portion~~contractual oflease ~~above-~~term. ~~and~~We amortize the below-market lease ~~values~~intangible as an increase to ~~rental~~lease ~~income~~revenue over the initial term and any renewal periods in~~-place~~ ~~lease~~the ~~values~~respective toleases ~~amortization~~(Note ~~expense~~7).

~~Purchase~~The ~~Price~~value ~~Allocation~~of any in-place lease is estimated to be equal to the acquirer’s avoidance of ~~Debt~~costs —as ~~When~~a weresult ~~acquire~~of ~~leveraged~~having ~~properties~~tenants in place, that would be necessary to lease the ~~fair~~property for a lease term equal to the remaining primary in-place lease term and the value of ~~the~~investment ~~related~~grade ~~debt~~tenancy. ~~instruments~~The cost avoidance is ~~determined~~derived ~~using~~first aby ~~discounted~~determining ~~cash~~the ~~flow~~in-place ~~model~~lease ~~with~~term ~~rates~~on ~~that~~the ~~take~~subject ~~into~~lease. ~~account~~Then, ~~the~~based ~~credit~~on our review of the ~~tenants~~market, ~~where~~the ~~applicable,~~cost ~~and~~to ~~interest~~be ~~rate~~borne ~~risk.~~by ~~Such~~a ~~resulting~~property ~~premium~~owner orto ~~discount~~replicate isa ~~amortized~~market ~~over~~lease to the remaining in-place term is estimated. These costs consist of: ~~the~~(i) rent ~~obligation~~lost during downtime (i.e. Weassumed ~~also~~periods ~~consider~~of vacancy), (ii) estimated expenses that would be incurred by the ~~value~~property owner during periods of ~~the~~vacancy, ~~underlying~~(iii) rent ~~collateral~~concessions ~~taking~~(i.e. ~~into~~free ~~account~~rent), (iv) leasing commissions, and (v) tenant improvements allowances given to tenants. We determine these values using our estimates or by relying in part upon third-party appraisals. We amortize the ~~quality~~value of ~~the~~in-place ~~collateral,~~lease intangibles to expense over the ~~credit~~remaining ~~quality~~initial term of ~~the~~each ~~tenant,~~lease ~~the~~(Note ~~time~~7). ~~until~~The ~~maturity~~amortization ~~and~~period for intangibles does not exceed the ~~current~~remaining ~~interest~~depreciable ~~rate~~life of the building.

If a lease is terminated, we charge the unamortized portion of above- and below-market lease values to rental income and in-place lease values to amortization expense. If a lease is amended, we will determine whether the economics of the amended lease continue to support the existence of the above- or below-market lease intangibles.

Purchase Price Allocation of Debt — When we acquire leveraged properties, the fair value of the related debt instruments is determined using a discounted cash flow model with rates that take into account the credit of the tenants, where applicable, and interest rate risk. Such resulting premium or discount is amortized into Interest expense within our consolidated financial statements over the remaining term of the obligation. We also consider the value of the underlying collateral, taking into account the quality of the collateral, the credit quality of the tenant, the time until maturity and the current interest rate.

Purchase Price Allocation of Goodwill — In the case of a business combination, after identifying all tangible and intangible assets and liabilities, the excess consideration paid over the fair value of the assets and liabilities acquired and assumed, respectively, represents goodwill. We allocate goodwill to reporting units in which such goodwill arises. In the event we dispose of a property that constitutes a business under U.S. generally accepted accounting principles, or GAAP, from a reporting unit with goodwill, we allocate a portion of the reporting unit’s goodwill to that business in determining the gain or loss on the disposal of the business. The amount of goodwill allocated to the business is based on the relative fair value of the business to the fair value of the reporting unit. As part of purchase accounting, we record any deferred tax assets and/or liabilities resulting from the difference between the tax basis and GAAP basis of the investment in the taxing jurisdiction. Such deferred tax amount will be included in purchase accounting and may impact the amount of goodwill recorded depending on the fair value of all of the other assets and liabilities and the amounts paid.

Impairments

We periodically assess whether there are any indicators that the value of our long-lived real estate and related intangible 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, an upcoming lease expiration, a tenant with credit difficulty, the termination of a lease by a tenant, or a likely disposition of the property. We may incur impairment charges on long-lived assets, including real estate-, related intangible assets, direct financing leases, assets held for sale, and equity investments in real estate. We may also incur impairment charges on marketable ~~securities~~investments, loans receivable and goodwill. Our policies and estimates for evaluating whether these assets are impaired are presented below.

Real Estate — For real estate assets held for investment and related intangible 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’s asset group to the estimated future net undiscounted cash flow that we expect the property’s asset group will generate, including any estimated proceeds from the eventual sale of the property’s asset group. The undiscounted cash flow analysis requires us to make our best estimate of market rents, residual values, and holding periods. We estimate market rents and residual values using market information from outside sources, such as third-party market research, external appraisals, broker quotes, or recent comparable sales. 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.

CPA®:17 – Global ~~2016~~2017 10-K – 77

Notes to Consolidated Financial Statements

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.

As our investment objective is to hold properties on a long-term basis, holding periods used in the undiscounted cash flow analysis are generally ten years, but may be less if our intent is to hold a property for less than ten years. Depending on the assumptions made and estimates used, the future cash flow projected in the evaluation of long-lived assets and associated intangible assets can vary within a range of outcomes. We consider the likelihood of possible outcomes in determining our estimate of future cash flows and, if warranted, we apply a probability-weighted method to the different possible scenarios. If the future net undiscounted cash flow of the property’s asset group is less than the carrying value, the carrying value of the property’s asset group is considered not recoverable. We then measure the impairment loss as the excess of the carrying value of the property’s asset group over its estimated fair value. The estimated fair value of the property’s asset group is primarily determined using market information from outside sources, such as broker quotes or recent comparable sales. 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.

Assets Held for Sale — We classify real estate assets that are ~~accounted~~subject ~~for~~to as operating leases or direct financing 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 compare the asset’s fair value less estimated cost to sell to its carrying value, and if the fair value less estimated cost to sell is less than the property’s carrying value, we reduce the carrying value to the fair value less estimated cost to sell. We base the fair value on the contract and the estimated cost to sell on information provided by brokers and legal counsel. We will continue to review the property for subsequent changes in the fair value and may recognize an additional impairment charge if warranted.

Real Estate Sales — In the unlikely event that we decide not to sell a property previously classified as held for sale, we reclassify the property as held and used. We measure and record a property that is reclassified as held and used at the lower of (i) 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 (ii) 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, we no longer have continuing involvement, 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.

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 and third-party estimates where available. If this review indicates that a decline in residual value has occurred that is other-than-temporary, we recognize an impairment charge equal to the difference between the fair value and carrying amount of the residual value.

We also assess the carrying amount for recoverability and if, as a result of the decreased expected cash flows, we determine that our carrying value is not fully recoverable, we record an allowance for credit losses to reflect the change in the estimate of the future cash flows that includes rent. Accordingly, the net investment balance is written down to fair value. When we enter into a contract to sell the real estate assets that are recorded as direct financing leases, we evaluate whether we believe it is probable that the disposition will occur. If we determine that the disposition is probable, we will classify the net investment as held for sale and write down the net investment to its fair value if the fair value is less than the carrying value.

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 an impairment has occurred and is determined to be other-than-temporary, we measure the charge as the excess of the carrying value of our investment over its estimated fair value, which is determined by calculating our share of the estimated fair market value of the underlying net assets based on the terms of the applicable partnership or joint venture agreement. For our equity investments in real estate, we calculate the estimated fair value of the underlying investment’s real estate or net investment in direct financing lease as described in Real Estate and Direct Financing Leases above. The fair value of the underlying investment’s debt, if any, is calculated based on market interest rates and other market information. The fair value of the underlying investment’s other financial assets and liabilities (excluding net investments in direct financing leases) have fair values that generally approximate their carrying values.

~~Goodwill~~CPA:17 —– WeGlobal ~~evaluate~~2017 ~~goodwill for possible impairment at least annually or upon the occurrence of a triggering event using a two~~10-~~step~~K ~~process.~~– A triggering event is an event or circumstance that would more likely than not reduce the fair value of a reporting unit below its carrying amount, including sales of properties defined as businesses for which the relative size of the sold property is significant to the reporting unit, that could impact our goodwill impairment calculations.78

The goodwill impairment test is a two-step test. However, we have the option to qualitatively assess any potential impairment via step zero prior to analyzing steps one and two quantitatively. In this step, the macroeconomic environment in which the reporting unit operates is analyzed for any significant changes, such as deterioration in a market in which we operate or deterioration in overall financial performance, such as declining cash flows. Also, entity-specific changes are analyzed, such as changes in management, strategy, or composition of reporting unit. If, after assessing the overall macroeconomic environment, it is unlikely that the fair value is less than the carrying value, steps one and two do not need to be performed.

CPA®:17 – Global 2016 10-K – 78

Notes to Consolidated Financial Statements

IfGoodwill — We evaluate goodwill for possible impairment at least annually or upon the occurrence of a triggering event using a two-step ~~zero~~process. A triggering event is an event or circumstance that would more likely than not ~~considered~~reduce the fair value of a reporting unit below its carrying amount, including sales of properties defined as businesses for which the ~~first~~relative ~~step~~size of the sold property is significant to the reporting unit, that could impact our goodwill impairment calculations. To identify any impairment, we first compare the estimated fair value of each of our reporting units with their respective carrying amount, including goodwill. If the fair value of the reporting unit exceeds its carrying amount, we do not consider goodwill to be impaired and no further analysis is required. If the carrying amount of the reporting unit exceeds its estimated fair value, we then perform the second step to determine and measure the amount of the potential impairment charge.

For the second step, if it were required, wean ~~compare~~impairment ~~the~~loss ~~implied~~is ~~fair~~recognized ~~value~~in ofan ~~the goodwill for each reporting unit with its respective carrying~~ amount ~~and record an impairment charge~~ equal to the excess of the carrying amount over ~~the~~its ~~implied~~estimated fair value., Welimited ~~would~~to ~~determine~~ the ~~implied~~total ~~fair~~amount ~~value~~ of ~~the~~ goodwill byallocated ~~allocating the estimated fair value of the reporting unit~~ to ~~its~~that ~~assets and liabilities. The excess of the estimated fair value of the~~ reporting unit ~~over the amounts assigned to its assets and liabilities is the implied fair value of the goodwill~~.

Loans Receivable — We evaluate our loans receivable on a periodic basis to determine if there are any indicators that the value may be impaired. We determine the estimated fair value of these financial instruments 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.

Debt Securities — We have investments in debt securities that are designated as securities held to maturity. On a quarterly basis, we evaluate our debt securities to determine if they have experienced an other-than temporary decline in value. If the market value of the debt security is below its amortized cost, and we either intend to sell the security or it is more likely than not that we will be required to sell the security before its anticipated recovery, we record the entire amount of the other-than-temporary impairment charge in earnings. Additionally, we consider the significance of the decline and other factors contributing to the decline, such as delinquency, expected credit losses, the length of time that the fair market value has been below cost, and expected market conditions (including volatility), in our analysis of whether a decline is other than temporary. Under current authoritative accounting guidance, if the debt security’s market value is below its amortized cost and we either intend to sell the security or it is more likely than not that we will be required to sell the security before its anticipated recovery, we record the entire amount of the other-than-temporary impairment charge in earnings.

We do not intend to sell our debt securities and we do not expect that it is more likely than not that we will be required to sell these investments before their anticipated recovery. However, if we determine that an other-than-temporary impairment has occurred, we calculate the total impairment charge as the difference between the carrying value of our debt securities and their estimated fair value. We then separate the other-than-temporary impairment charge into the non-credit loss portion and the credit loss portion. We determine the non-credit loss portion by analyzing the changes in spreads on high credit quality debt securities as compared with the changes in spreads on the debt securities being analyzed for other-than-temporary impairment. We generally perform this analysis over a time period from the date of acquisition of the debt securities through the date of the analysis. Any resulting loss is deemed to represent losses due to the illiquidity of the debt securities and is recorded as a separate component of other comprehensive loss in equity. We then measure the credit loss portion of the other-than-temporary impairment as the residual amount of the other-than-temporary impairment. We record the non-credit loss portion in earnings.

Following recognition of the other-than-temporary impairment, the difference between the new cost basis of the debt securities and cash flows expected to be collected is accreted to Other interest income over the remaining expected lives of the securities.

Other Accounting Policies

Basis of Consolidation — Our consolidated financial statements reflect all of our accounts, including those of our controlled subsidiaries and our tenancy-in-common interest, as described below. 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.

On January 1, 2016, we adopted the Financial Accounting Standards Board’s, or FASB’s, Accounting Standards Update, or ASU, 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis, as described in the Recent Accounting Pronouncements section below, which amends the current consolidation guidance, including introducing a separate consolidation analysis specific to limited partnerships and other similar entities. 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 a VIE 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

CPA®:17 – Global ~~2016~~2017 10-K – 79

Notes to Consolidated Financial Statements

~~variable~~review ~~interest~~the ~~holders~~contractual toarrangements ~~determine~~provided ~~which~~for ~~party~~in is the ~~primary~~partnership ~~beneficiary~~agreement ofor ~~the~~other ~~VIE~~related ~~based~~contracts onto determine whether the entity ~~(i)~~is ~~has~~considered ~~the~~a ~~power to direct the activities that most significantly impact the economic performance of the~~ VIE, and ~~(ii) has the obligation~~ to ~~absorb~~establish ~~losses~~whether orwe ~~the~~have ~~right~~any tovariable ~~receive~~interests ~~benefits~~in of the VIE ~~that could potentially be significant to the VIE~~. We ~~performed~~then ~~this~~compare ~~analysis~~our onvariable ~~all~~interests, ofif ~~our~~any, ~~subsidiary~~to ~~entities~~those ~~following~~of the ~~guidance~~other invariable ~~ASU~~interest ~~2015-02~~holders to determine ~~whether~~which ~~they~~party ~~qualify~~is asthe ~~VIEs~~primary ~~and~~beneficiary ~~whether~~of ~~they~~the ~~should~~VIE bebased ~~consolidated~~on orwhether ~~accounted~~the ~~for~~entity as(i) ~~equity~~has ~~investments~~the inpower anto ~~unconsolidated~~direct ~~venture.~~the Asactivities ~~a result of this change in guidance, we determined~~ that 15most ~~entities~~significantly ~~that~~impact ~~were~~the ~~previously~~economic ~~classified~~performance ~~as voting interest entities should be classified as VIEs as~~ of ~~January~~the 1,VIE ~~2016~~ and ~~therefore~~(ii) ~~included~~has inthe ~~our~~obligation ~~VIE~~to ~~disclosures.~~absorb ~~However,~~losses ~~there was no change in determining whether~~ or ~~not we consolidate these entities as we continue not to be~~ the ~~primary~~right ~~beneficiary. We elected~~ to ~~retrospectively~~receive ~~adopt~~benefits ~~ASU~~of ~~2015-02,~~the ~~which resulted in changes to our~~ VIE ~~disclosures.~~that ~~There~~could ~~were~~potentially nobe ~~other~~significant ~~changes~~ to ~~our consolidated balance sheets or results of operations for~~ the ~~periods presented~~VIE. The liabilities of these VIEs are non-recourse to us and can only be satisfied from each VIE’s respective assets.

At December 31, ~~2016~~2017, we considered 2721 entities VIEs, 13nine of which we consolidated as we are considered the primary beneficiary and one of which we accounted for as a loan receivable. The following table presents a summary of selected financial data of the consolidated VIEs, included in the consolidated balance sheets (in thousands):

	December 31,
	2016			2015
	2017			2016 (a) (b)
Net investments in properties	$	313,000		$	309,030
Real estate — Land, buildings and improvements	$	109,426		$	225,347
Net investments in direct financing leases	315,251			303,112
Operating real estate — Land, buildings and improvements	80,658			11,388
In-place lease and tenant relationship intangible assets, net	19,336			20,269
Net investments in direct financing leases	312,234			315,251
Other assets, net	65,557			66,654
In-place lease intangible assets	8,650			8,795
Total assets	714,896			705,535
Accumulated depreciation and amortization	(26,395		)	(25,000		)
Non-recourse debt, net	$	265,874		$	262,830
Other assets, net	73,620			52,565
Accounts payable, accrued expenses and other liabilities	14,440			15,662
Total assets	567,929			590,526
Deferred income taxes	15,687			10,675
Mortgage debt, net	$	104,213		$	192,839
Total liabilities	296,673			289,889
Accounts payable, accrued expenses and other liabilities	12,693			11,187
Deferred income taxes	12,374			15,687
Total liabilities	129,662			220,077

At both December 31, 2016 and 2015, we had 13 unconsolidated VIEs, all of which we account for under the equity method of accounting. We do not consolidate these entities because we are not the primary beneficiary and the nature of our involvement in the activities of these entities allows us to exercise significant influence on, but does not give us power over, decisions that significantly affect the economic performance of these entities. As of December 31, 2016 and 2015, the net carrying amount of our investments in these entities was $377.4 million and $432.6 million, respectively, and our maximum exposure to loss in these entities was limited to our investments.___________

~~At December 31, 2016, we had an investment in~~ (a) ~~tenancy-in-common~~In ~~interest~~the insecond aquarter ~~portfolio~~ of ~~international~~2017, ~~properties.~~we ~~Consolidation~~reclassified ofcertain ~~this~~line ~~investment~~items isin ~~not~~our ~~required~~consolidated asbalance ~~such~~sheets, ~~interest~~as ~~does~~described ~~not~~below. ~~qualify~~As as a ~~VIE and does not meet the control requirement for consolidation. Accordingly~~result, weamounts ~~account~~ for ~~this~~certain ~~investment~~line ~~using~~items ~~the~~included ~~equity~~within ~~method~~Net ofinvestments ~~accounting. We use the equity method of accounting because the shared decision-making involved~~ in areal ~~tenancy-in-common~~estate ~~interest~~have ~~investment~~been ~~provides~~reclassified usto ~~with~~conform ~~significant~~to ~~influence on~~ the ~~operating~~current ~~and~~period ~~financial decisions of this investment~~presentation.

At(b) ~~times~~The consolidated financial statements as of and for the year ended December 31, 2016 accurately reflect the ~~carrying~~correct ~~value~~accounting treatment for VIEs. In the second quarter of ~~our~~2017, ~~equity~~we ~~investments~~identified ~~may~~an ~~fall~~error ~~below~~in ~~zero~~the ~~for~~notes ~~certain~~to ~~investments~~the consolidated financial statements as of December 31, 2016 related to the VIE tabular disclosure above in which we improperly classified four consolidated entities as VIEs. We ~~intend~~concluded tothat ~~fund~~the ~~our~~disclosure ~~share~~error ofto the ~~jointly~~table ~~owned~~above ~~investments’~~was ~~future~~not ~~operating~~material ~~deficits~~to ~~should~~the notes to the ~~need~~consolidated ~~arise~~financial statements. ~~However~~As such, we have nocorrected ~~legal~~the ~~obligation~~information toas ~~pay~~of ~~for~~December ~~any~~31, of2016 in the ~~liabilities~~table ofabove ~~such~~to ~~investments~~correctly ~~nor~~exclude dothese wefour ~~have~~entities, ~~any~~which ~~legal~~reduced ~~obligation~~(i) toReal ~~fund~~estate ~~operating~~— ~~deficits~~land, buildings and improvements by $111.1 Atmillion; ~~December 31~~(ii) in-place lease intangible assets by $21.8 million; (iii) accumulated depreciation and amortization by $21.6 million; (iv) other assets, ~~2016~~net by $13.0 million; (v) total assets by $124.4 million; (vi) mortgage debt, ~~none~~net ofby ~~our~~$73.0 ~~equity~~million; ~~investments~~(vii) ~~had~~accounts ~~carrying~~payable, ~~values~~accrued ~~below~~expenses ~~zero~~and other liabilities by $3.3 million; and (viii) total liabilities by $76.6 million.

~~Reclassifications~~At December —31, ~~Certain~~2017 ~~prior~~and ~~period~~2016, ~~amounts~~we ~~have~~had ~~been~~11 ~~reclassified~~and to13 ~~conform~~unconsolidated toVIEs, respectively, all of which we account for under the ~~current~~equity ~~period~~method ~~presentation~~of accounting. We ~~currently~~do ~~present~~not ~~Loss~~consolidate onthese ~~extinguishment~~entities because we are not the primary beneficiary and the nature of ~~debt~~our involvement in the activities of these entities allows us to exercise significant influence on, ~~its~~but ~~own~~does ~~line~~not ~~item~~give inus power over, decisions that significantly affect the ~~consolidated~~economic ~~financial~~performance ~~statements~~of these entities. As of December 31, ~~which~~2017 ~~was~~and ~~previously~~2016, ~~included~~the net carrying amount of our investments in ~~Other~~these ~~income~~entities was $282.0 million and ~~(expenses)~~$377.4 million, respectively, and our maximum exposure to loss in these entities was limited to our investments.

~~CPA®:17~~At –December 31, ~~Global~~2017, ~~2016~~we 10had an investment in a tenancy-Kin-common –interest 80in a portfolio of international properties. Consolidation of this investment is not required as such interest does not qualify as a VIE and does not meet the control requirement 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 tenancy-in-common interest investment provides us with significant influence on the operating and financial decisions of this investment.

CPA:17 – Global 2017 10-K – 80

Notes to Consolidated Financial Statements

OnAt ~~January 1~~times, ~~2016,~~the wecarrying ~~adopted~~value ~~ASU 2015-03, Interest-Imputation~~ of ~~Interest~~our ~~(Subtopic~~equity ~~835-30)~~investments asmay ~~described~~fall inbelow ~~the~~zero ~~Recent~~for ~~Accounting~~certain ~~Pronouncements section below~~investments. ~~ASU~~We ~~2015-03~~intend ~~changes~~to ~~the~~fund ~~presentation~~our share of ~~debt~~the ~~issuance~~jointly ~~costs,~~owned ~~which~~investments’ ~~were~~future ~~previously~~operating ~~recognized~~deficits asshould anthe ~~asset~~need ~~and~~arise. ~~requires~~However, ~~that~~we ~~they~~have beno ~~presented~~legal inobligation ~~the~~to ~~balance~~pay ~~sheet~~for asany aof ~~direct deduction from~~ the ~~carrying~~liabilities ~~amount~~ of ~~that~~such ~~debt~~investments ~~liability.~~nor Asdo awe ~~result~~have ofany ~~adopting~~legal ~~this~~obligation ~~guidance,~~to wefund ~~reclassified~~operating ~~$12~~deficits.8 ~~million~~At ~~of deferred financing costs~~December 31, ~~net from Other assets~~2017, ~~net~~none toof ~~Non-recourse~~our ~~debt,~~equity ~~net~~investments ~~and~~had ~~Senior~~carrying ~~Credit~~values ~~Facility,~~below ~~net as of December 31, 2015~~zero.

Reclassifications — Certain prior year amounts have been reclassified to conform to the current year presentation.

In the second quarter of 2017, we reclassified in-place lease intangible assets, net and other intangible assets, net to be included within Net investments in real estate in our consolidated balance sheets. The accumulated amortization on these assets is now included in Accumulated depreciation and amortization in our consolidated balance sheets. In addition, we reclassified goodwill, which was previously included in other intangibles, net to be included in Other assets, net. Prior period balances have been reclassified to conform to the current period presentation.

Real Estate and Operating Real Estate — We carry land, buildings, and personal property at cost less accumulated depreciation. We capitalize improvements and significant renovations that extend the useful life of the properties, while we expense replacements, maintenance, and repairs that do not improve or extend the lives of the respective assets as incurred.

Real Estate Under Construction — For properties under construction, operating expenses, including interest charges and other property expenses (e.g. real estate taxes, insurance and legal costs) are capitalized rather than expensed. We capitalize interest by applying the interest rate applicable to any funding specific to the property or 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 — We provide funding to developers for the acquisition, development, and construction of real estate, or ADC Arrangements. Under such ADC Arrangements, we may participate in the residual profits of the project through the sale or refinancing of the property. We evaluate these arrangements to determine if they have characteristics similar to a loan or if the characteristics are more similar to a joint venture or partnership, such as participating in the risks and rewards of the project as an owner or an investment partner. For those arrangements with characteristics of a loan, we follow the accounting guidance for loans and disclose within our Finance Receivables footnote (Note 5). When we determine that the characteristics are more similar to a jointly owned investment or partnership, we account for those arrangements under the equity method of accounting (Note 6). Once the investment or partnership begins operations, we use the hypothetical liquidation at book value method to calculate income or loss (which considers the principal and interest under the loan to be a preferential return).

Assets Held for Sale — We classify those assets that are associated with 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, less estimated cost to sell.

Loans 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 over the life of the loan. 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. Our loans receivable are included in Other assets, net in the consolidated financial statements. We generate revenue in the form of interest payments from the borrower, which are recognized in Other interest income in the consolidated financial statements.

Allowance for Doubtful Accounts — We consider rents due under leases and payments under loans receivable to be past-due or delinquent when a contractually required rent, principal payment, or interest payment is not remitted in accordance with the provisions of the underlying agreement. We evaluate each account individually and set up an allowance when, based upon current information and events, it is probable that we will be unable to collect all amounts due according to the existing contractual terms and the amount can be reasonably estimated.

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. Our cash and cash equivalents are held in the custody of several financial institutions, and these balances, at times, exceed federally-insurable limits. We seek to mitigate this risk by depositing funds only with major financial institutions.

~~CPA®:17~~Debt –Securities — ~~Global~~We ~~2016~~have 10investments, such as CMBS, that were designated as securities held to maturity on the date of acquisition, in accordance with current accounting guidance. We carry these securities at cost, net of unamortized premiums and discounts, which are recognized in interest income using an effective yield or “interest” method, and assess them for other-Kthan-temporary –impairment 81on a quarterly basis.

CPA:17 – Global 2017 10-K – 81

Notes to Consolidated Financial Statements

Other Assets and Liabilities — We include ~~commercial~~prepaid ~~paper~~expenses, ~~and~~deferred ~~money~~rental ~~market~~income, ~~funds.~~tenant ~~Our~~receivables, deferred charges, escrow balances held by lenders, restricted cash balances, deferred tax assets, marketable debt securities, derivative assets, and ~~cash~~loans ~~equivalents~~receivable ~~are~~in ~~held~~Other assets, net in the ~~custody~~consolidated financial statements. We include derivative liabilities, amounts held on behalf of ~~several~~tenants, ~~financial~~asset ~~institutions~~retirement obligations, and ~~these~~deferred ~~balances,~~revenue atin ~~times~~Accounts payable, ~~exceed~~accrued ~~federally-insurable~~expenses ~~limits.~~and Weother ~~seek~~liabilities toin ~~mitigate~~the ~~this~~consolidated ~~risk~~financial bystatements. ~~depositing~~Deferred ~~funds~~charges ~~only~~include costs incurred in connection with ~~major~~the Revolver in the Senior Credit Facility that are amortized over the term of the facility and included in Interest expense in the consolidated financial ~~institutions~~statements. Deferred rental income for operating leases is the aggregate cumulative difference between scheduled rents that vary during the lease term and rent recognized on a straight-line basis.

~~Debt~~Deferred ~~Securities~~Acquisition Fees Payable to Affiliate — WeFees ~~have~~payable ~~investments,~~to ~~such~~our asAdvisor ~~commercial~~for structuring and negotiating investments and related mortgage~~-backed~~ ~~securities,~~financing oron ~~CMBS~~our behalf are included in Due to affiliates (Note 3). This fee, ~~that~~together ~~were~~with ~~designated~~its asaccrued ~~securities~~interest, ~~held~~is topayable ~~maturity~~in three equal annual installments on the ~~date~~first business day of ~~acquisition,~~the infiscal ~~accordance~~quarter ~~with~~immediately ~~current~~following ~~accounting~~the ~~guidance.~~fiscal Wequarter ~~carry~~in ~~these~~which ~~securities~~an atinvestment ~~cost~~is made, ~~net~~and ofthe ~~unamortized~~first ~~premiums~~business ~~and~~day ~~discounts,~~of ~~which~~the ~~are~~corresponding ~~recognized~~fiscal quarter in ~~interest~~each ~~income~~of ~~using~~the ansubsequent ~~effective~~two ~~yield~~fiscal oryears. ~~“interest”~~The ~~method,~~timing ~~and~~of ~~assess~~the ~~them~~payment ~~for~~of ~~other~~such fees is subject to preferred return criterion, a non-~~than-temporary~~compounded ~~impairment~~cumulative distribution return of 5% per annum (based initially on aour ~~quarterly~~invested ~~basis~~capital).

Other Assets and Liabilities — We include prepaid expenses, deferred rental income, tenant receivables, deferred charges, escrow balances held by lenders, restricted cash balances, deferred tax assets, marketable debt securities, derivative assets, and loans receivable in Other assets, net in the consolidated financial statements. We include derivative liabilities, amounts held on behalf of tenants, and deferred revenue in Accounts payable, accrued expenses and other liabilities in the consolidated financial statements. Deferred charges include costs incurred in connection with the Revolver in the Senior Credit Facility that are amortized over the term of the facility and included in Interest expense in the consolidated financial statements. Deferred rental income for operating leases is the aggregate cumulative difference 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 our Advisor for structuring and negotiating investments and related mortgage financing on our behalf are included in Due to affiliates (Note 3). This fee, together with its accrued interest, is payable in three equal annual installments on the first business day of the fiscal quarterly immediately following the fiscal quarter in which an investment is made, and the first business day of the corresponding fiscal quarter in each of the subsequent two fiscal years. The timing of the payment of such fees is subject to preferred return criterion, a non-compounded cumulative distribution return of 5% per annum (based initially on our invested capital).

Share Repurchases — Share repurchases are recorded as a reduction of common stock par value and additional paid-in capital 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.

Noncontrolling Interests — We account for the special general partner interest in our Operating Partnership as a noncontrolling interest (Note 3). The special general partner interest in our Operating Partnership entitles W. P. Carey Holdings, LLC, or Carey Holdings, also known as the Special General Partner, to cash distributions and, in the event there is a termination or non-renewal of the advisory agreement, redemption rights. Cash distributions to the Special General Partner are accounted for as an allocation to net income attributable to noncontrolling interest.

Revenue Recognition — We lease real estate to others primarily on a triple-net leased basis whereby the tenant is generally responsible for operating expenses relating to the property, including property taxes, insurance, maintenance, repairs, and improvements. For the years ended December 31, ~~2016~~2017, ~~2015~~2016, and ~~2014~~2015, our tenants, pursuant to their lease obligations, have made direct payment to the taxing authorities of real estate taxes of approximately $2226.93 million, $2322.69 million, and $2223.26 million, respectively.

Substantially all of our leases provide for either scheduled rent increases, periodic rent adjustments based on formulas indexed to changes in the Consumer Price Index, or CPI, or similar indices, or percentage rents. CPI-based adjustments are contingent on future events and are therefore not included as minimum rent 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. Percentage rents were insignificant for the periods presented. For the years ended December 31, 2016, 2015, and 2014, we recognized straight-line rent adjustments of $15.2 million, $17.2 million, and $15.5 million, respectively, which increased Rental income within our consolidated financial statements for each year.

For our operating leases, we record real estate at cost less accumulated depreciation; we recognize future minimum rental revenue on a straight-line basis over the non-cancelable lease term of the related leases and charge expenses to operations as incurred (Note 4).

We record leases accounted for under the direct financing method as a net investment in leases (Note 5). The net investment is equal to the cost of the leased assets. The difference between the cost and the gross investment, which includes the residual value of the leased asset and the future minimum rents, is unearned income. 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.

~~CPA®:17~~Asset –Retirement ~~Global~~Obligations ~~2016~~— 10Asset retirement obligations relate to the legal obligations associated with the retirement of long-Klived –assets 82that result from the acquisition, construction, development, and/or normal operation of a long-lived asset. The fair value of a liability for an asset retirement obligation is recorded in the period in which it is incurred and the cost of such liability is recorded as an increase in the carrying amount of the related long-lived asset by the same amount. The liability is accreted each period in Property expenses on our consolidated financial statements and the capitalized cost is depreciated over the estimated remaining life of the related long-lived asset. Revisions to estimated retirement obligations result in adjustments to the related capitalized asset and corresponding liability.

CPA:17 – Global 2017 10-K – 82

Notes to Consolidated Financial Statements

Asset Retirement Obligations — Asset retirement obligations relate to the legal obligations associated with the retirement of long-lived assets that result from the acquisition, construction, development, and/or normal operation of a long-lived asset. The fair value of a liability for an asset retirement obligation is recorded in the period in which it is incurred and the cost of such liability is recorded as an increase in the carrying amount of the related long-lived asset by the same amount. The liability is accreted each period and the capitalized cost is depreciated over the estimated remaining life of the related long-lived asset. Revisions to estimated retirement obligations result in adjustments to the related capitalized asset and corresponding liability.

In order to determine the fair value of the asset retirement obligations, we make certain estimates and assumptions including, among other things, projected cash flows, the borrowing interest rate, and an assessment of market conditions that could significantly impact the estimated fair value. These estimates and assumptions are subjective.

Depreciation — We compute depreciation of building and related improvements using the straight-line method over the estimated remaining useful lives of the properties (not to exceed 40 years) and furniture, fixtures, and equipment (generally up to 7seven 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.

Interest Capitalized in Connection with Real Estate Under Construction — ~~Operating real estate is stated at cost less accumulated depreciation.~~ Interest directly related to build-to-suit projects is capitalized. We consider a build-to-suit project as substantially completed upon the completion of improvements. If discrete portions of a project are substantially completed and occupied and other portions have not yet reached that stage, the substantially completed portions are accounted for separately. We allocate costs incurred between the portions under construction and the portions substantially completed and only capitalize those costs associated with the portion under construction. We determine an interest rate to be applied for capitalizing interest based on a blended rate of our debt obligations.

Foreign Currency Translation and Transaction Gains and Losses — We have interests in real estate investments primarily in Europe, for which the functional currency is either the euro or the British pound sterling. We perform the translation from euro or the British pound sterling 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 year. We report the gains and losses resulting from such translation as a component of other comprehensive loss in equity. These translation gains and losses are released to net income when we have substantially exited from all investments in the related currency.

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. Also, intercompany foreign currency transactions that are scheduled for settlement, consisting primarily of accrued interest and the translation to the reporting currency of short-term subordinated intercompany debt with scheduled principal payments, are included in the determination of net income.

Intercompany foreign currency transactions of a long-term nature (that is, settlement is not planned or anticipated in the foreseeable future), in which the entities to the transactions are consolidated or accounted for by the equity method in our consolidated financial statements, are not included in net income but are reported as a component of other comprehensive income in equity.

Filing Compare · Corporate Property Associates 17 - Global INC