##### Table of Contents



UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
   Form 10-Q
  þ

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended September 30, 2006oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          
    to   Commission File Number:
    001-32162
  CORPORATE PROPERTY ASSOCIATES
    16  GLOBAL INCORPORATED
 (Exact name of registrant as
    specified in its charter)
   Maryland

80-0067704(State of
    incorporation)

(I.R.S. Employer Identification
    No.)50 Rockefeller Plaza

10020New York, New York

(Zip Code)(Address of principal executive
    office)    Investor Relations
    (212) 492-8920
 (212) 492-1100
 (Registrants telephone
    numbers, including area code)
   þ o
  Rule 12b-2
 o o þ
  Rule 12b-2 o þ




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##### 



CORPORATE
    PROPERTY ASSOCIATES 16  GLOBAL INCORPORATED
  INDEX
  Page No.PART I 
    FINANCIAL INFORMATIONItem 1.



    Financial Statements*Consolidated
    Balance Sheets as of September 30, 2006 and
    December 31, 2005


2Consolidated
    Statements of Income for the three and nine months ended
    September 30, 2006 and 2005


3Consolidated
    Statements of Comprehensive Income for the three and nine months
    ended September 30, 2006 and 2005


4Consolidated
    Statement of Shareholders Equity for the nine months ended
    September 30, 2006


5Consolidated
    Statements of Cash Flows for the nine months ended
    September 30, 2006 and 2005


6Notes to
    Consolidated Financial Statements


7Item 2.



    Managements Discussion and Analysis of Financial Condition
    and Results of Operations


16Item 3.


 Quantitative
    and Qualitative Disclosures About Market Risk


25Item 4.


 Controls and
    Procedures


26PART II 
    OTHER INFORMATIONItem 2.


 Unregistered
    Sales of Equity Securities and Use of Proceeds


27Item 6.



    Exhibits


27Signatures


28     *
    
    The summarized consolidated financial statements contained
    herein are unaudited; however, in the opinion of management, all
    adjustments (consisting of normal recurring adjustments)
    necessary for a fair statement of such financial statements have
    been included.EX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32: CERTIFICATION  Forward
    Looking Statements
  Form 10-Q, Form 10-K Form 10-K
  Form 10-Q,
  1




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##### Table of Contents



CORPORATE
    PROPERTY ASSOCIATES 16  GLOBAL INCORPORATED
 PART I ITEM 1. 
    FINANCIAL STATEMENTS

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in thousands, except share and share amounts)  September 30,


December 31,2006


2005 (NOTE)ASSETSReal estate, net

$
500,900


$
386,615Net investment in direct financing
    leases


206,646



152,772Equity investments in real estate


108,928



97,179Real estate under construction


51,140



15,026Mortgage notes receivable


9,598



29,798Cash and cash equivalents


331,469



155,374Short-term investments


2,235



1,698Marketable securities


2,858



2,996Funds in escrow


8,499



6,377Intangible assets, net


84,847



66,589Due from affiliates






590Deferred offering costs


5,740



4,028Other assets, net


10,053



10,607Total assets

$
1,322,913


$
929,649LIABILITIES AND
    SHAREHOLDERS EQUITYLiabilities:Limited recourse mortgage notes
    payable

$
480,521


$
358,370Accrued interest


2,907



2,330Accounts payable, accrued expenses
    and other liabilities


3,907



10,163Due to affiliates


18,117



9,475Deferred acquisition fees payable
    to affiliate


23,672



17,708Prepaid and deferred rental income
    and security deposits


23,816



18,548Distributions payable


12,899



8,926Total liabilities


565,839



425,520Minority interest in consolidated
    entities


17,373



17,134Commitments and contingencies
    (Note 9)Shareholders equity:Common stock, $0.001 par
    value; 250,000,000 shares authorized; 86,845,106 and
    57,268,850 shares issued and outstanding, respectively


87



57Additional paid-in capital


776,160



514,014Distributions in excess of
    accumulated earnings


(35,113
)


(22,416
)Accumulated other comprehensive
    income (loss)


3,796



(3,148
)744,930



488,507Less, treasury stock at cost,
    562,292 and 162,564 shares, respectively


(5,229
)


(1,512
)Total shareholders equity


739,701



486,995Total liabilities and
    shareholders equity

$
1,322,913


$
929,649      2




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##### Table of Contents



CORPORATE
    PROPERTY ASSOCIATES 16  GLOBAL INCORPORATED
 CONSOLIDATED
    STATEMENTS OF INCOME (UNAUDITED) (in thousands, except share and per share amounts)  Three Months Ended September 30,


Nine Months Ended September 30,2006


2005


2006


2005REVENUES:Rental income

$
12,723


$
8,472


$
34,876


$
19,359Interest income from direct
    financing leases


4,413



2,657



10,935



6,964Interest income on mortgage
    receivable


356



709



1,722



1,768Other operating income


223



137



966



34417,715



11,975



48,499



28,435OPERATING EXPENSES:Depreciation and amortization


(3,405
)


(2,187
)


(9,119
)


(4,907
)Property expenses


(3,525
)


(2,449
)


(9,249
)


(5,743
)General and administrative


(1,063
)


(1,237
)


(3,436
)


(3,282
)(7,993
)


(5,873
)


(21,804
)


(13,932
)OTHER INCOME AND
    EXPENSES:Income from equity investments in
    real estate


1,776



1,604



5,256



4,122Other interest income


3,399



1,259



6,830



4,266Minority interest in income


(468
)


(210
)


(1,459
)


(340
)Gain (loss) on foreign currency
    transactions, derivative instruments and other, net


163



(477
)


229



(663
)Interest expense


(6,837
)


(4,291
)


(17,947
)


(10,013
)(1,967
)


(2,115
)


(7,091
)


(2,628
)NET INCOME

$
7,755


$
3,987


$
19,604


$
11,875BASIC EARNINGS PER
    SHARE

$
0.10


$
0.07


$
0.29


$
0.21DISTRIBUTIONS DECLARED PER
    SHARE

$
0.1601


$
0.1500


$
0.4764


$
0.4200WEIGHTED AVERAGE
    SHARES OUTSTANDING  BASIC


81,569,191



56,660,533



67,911,308



56,106,453    3




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##### Table of Contents



CORPORATE
    PROPERTY ASSOCIATES 16  GLOBAL INCORPORATED
 CONSOLIDATED
    STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)(in
    thousands) Three Months Ended September 30,


Nine Months Ended September 30,2006


2005


2006


2005Net income

$
7,755


$
3,987


$
19,604


$
11,875Other comprehensive income (loss):Change in unrealized loss on
    marketable securities


70







67



Change in foreign currency
    translation adjustment


2,197



2,468



6,746



(4,463
)Unrealized (loss) gain on
    derivative instrument


(1,116
)






131



1,151



2,468



6,944



(4,463
)Comprehensive income

$
8,906


$
6,455


$
26,548


$
7,412    4




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##### Table of Contents



CORPORATE
    PROPERTY ASSOCIATES 16  GLOBAL INCORPORATED
 CONSOLIDATED
    STATEMENT OF SHAREHOLDERS EQUITY

For the nine months ended September 30, 2006

(in thousands, except share and per share amounts) Distributions in


AccumulatedAdditional


Excess of


OtherCommon


Paid-In


Accumulated


Comprehensive


TreasuryStock


Capital


Earnings


Income (Loss)


Stock


TotalBalance at December 31, 2005

$
57


$
514,014


$
(22,416
)

$
(3,148
)

$
(1,512
)

$
486,99529,190,590 shares issued
    $.001 par, at $10 per share, net of offering costs


30



258,289















258,319385,666 shares, $.001 par,
    issued to the advisor at $10 per share






3,857















3,857Distributions declared










(32,301
)










(32,301
)Net income










19,604











19,604Change in other comprehensive
    income (loss)














6,944







6,944Repurchase of 399,728 shares


















(3,717
)


(3,717
)Balance at September 30, 2006

$
87


$
776,160


$
(35,113
)

$
3,796


$
(5,229
)

$
739,701    5




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##### Table of Contents



CORPORATE
    PROPERTY ASSOCIATES 16  GLOBAL INCORPORATED
 CONSOLIDATED
    STATEMENTS OF CASH FLOWS (UNAUDITED)

(in thousands) Nine Months Ended September 30,2006


2005CASH FLOWS FROM OPERATING
    ACTIVITIES:Net income

$
19,604


$
11,875Adjustments to reconcile net income
    to net cash provided by operating activities:Depreciation and amortization
    including intangible assets and deferred financing costs


9,353



4,681(Gain) loss on foreign currency
    transactions, net


(394
)


1,365Unrealized gain on derivative
    instrument






(702
)Equity income in real estate in
    excess of distributions received


(1,338
)


(413
)Issuance of shares to affiliate in
    satisfaction of fees due


3,857



2,199Minority interest in income


1,459



340Straight-line rent adjustments and
    amortization of rent-related intangibles


(1,354
)


(692
)Increase in accrued interest


549



1,444Increase in due to affiliates(a)


4,902



3,375Increase in accounts payable,
    accrued expenses and other liabilities(a)


384



3,943Increase in prepaid and deferred
    rental income and security deposits


807



4,626Net change in other operating
    assets and liabilities


(364
)


(1,048
)Net cash provided by operating
    activities


37,465



30,993CASH FLOWS FROM INVESTING
    ACTIVITIES:Distributions from equity
    investments in real estate in excess of equity income


3,420



3,055Acquisition of real estate and
    equity investments in real estate(b)


(215,902
)


(381,753
)Contributions to equity investments
    in real estate


(10,088
)


(38,499
)Funds placed in escrow for future
    acquisition and construction


(28,419
)


Release of funds held in escrow for
    future acquisition and construction


26,454



19,631VAT taxes recovered (paid) from
    purchase of real estate


4,008



(2,044
)Purchase of mortgage note receivable






(12,798
)Receipt of principal payment of
    mortgage note receivable


206



153Receipt of principal prepayment of
    mortgage note receivable


20,000



Proceeds from short-term investments






2,888Purchases of securities






(32,625
)Proceeds from sale of securities






96,425Net cash used in investing
    activities


(200,321
)


(345,567
)CASH FLOWS FROM FINANCING
    ACTIVITIES:Distributions paid


(28,328
)


(20,443
)Distributions paid to minority
    interest partners


(1,220
)


(399
)Contributions from minority
    interest partners






6,724Proceeds from mortgages(c)


119,744



202,853Scheduled payments of mortgage
    principal


(4,571
)


(1,795
)Deferred financing costs and
    mortgage deposits, net of deposits refunded


(1,356
)


854Proceeds from issuance of shares,
    net of costs of raising capital


258,319



42,553Purchase of treasury stock


(3,717
)


(1,227
)Net cash provided by financing
    activities


338,871



229,120Effect of exchange rate changes on
    cash


80



(775
)Net increase (decrease) in cash and
    cash equivalents


176,095



(86,229
)Cash and cash equivalents,
    beginning of period


155,374



217,310Cash and cash equivalents, end of
    period

$
331,469


$
131,081     (a)
    
    Changes in due to affiliates and accounts payable, accrued
    expenses and other liabilities excludes amounts related to the
    raising of capital (financing activities) pursuant to the
    Companys public offerings. At September 30, 2006 and
    2005, the amount due to the Companys advisor for such
    costs was $5,742 and $2,233, respectively. The above caption
    also excludes deferred acquisition fees payable related to the
    acquisition of real estate (investing activities).(b)
    
    The cost basis of real estate investments acquired during the
    nine months ended September 30, 2006 and 2005 also includes
    deferred acquisition fees payable of $5,964 and $8,577,
    respectively.(c)
    
    Net of $2,325 retained by mortgage lenders during the nine
    months ended September 30, 2005.   6




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##### Table of Contents



CORPORATE
    PROPERTY ASSOCIATES 16  GLOBAL INCORPORATED
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (in thousands, except share and per share amounts)
  NOTE 1.
    Business    NOTE 2.
    Basis of
    Presentation  Regulation S-X Form 10-K
  Principles
    of Consolidation
  and/or
    Information
    about International Geographic Areas
   7




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##### Table of Contents



CORPORATE
    PROPERTY ASSOCIATES 16  GLOBAL INCORPORATED
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (in thousands, except share and per share amounts)
    Reclassifications
    Recent
    Accounting Pronouncements
           8




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##### Table of Contents



CORPORATE
    PROPERTY ASSOCIATES 16  GLOBAL INCORPORATED
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (in thousands, except share and per share amounts)
    NOTE 3.
    Organization
    and Offerings      NOTE 4.
    Transactions
    with Related Parties  day-to-day day-to-day
   9




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##### Table of Contents



CORPORATE
    PROPERTY ASSOCIATES 16  GLOBAL INCORPORATED
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (in thousands, except share and per share amounts)
          NOTE 5.
    Real
    Estate    September 30,


December 31,2006


2005Cost

$
513,250


$
392,210Less: Accumulated depreciation


(12,350
)


(5,595
)$
500,900


$
386,615   NOTE 6.
    Equity
    Investments in Real Estate  ® ® U-Haul
 10




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##### Table of Contents



CORPORATE
    PROPERTY ASSOCIATES 16  GLOBAL INCORPORATED
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (in thousands, except share and per share amounts)
    September 30,


December 31,2006


2005Assets (primarily real estate)

$
319,365


$
323,364Liabilities (primarily mortgage
    notes payable)


(195,886
)


(196,752
)Partners and members
    equity

$
123,479


$
126,612Companys share of equity
    investees net assets

$
38,200


$
39,182   Nine Months Ended September 30,2006


2005Revenue (primarily rental income)

$
21,437


$
21,426Expenses (primarily interest on
    mortgages and depreciation)


(14,263
)


(14,167
)Net income

$
7,174


$
7,259Companys share of net income
    from equity investments in real estate

$
2,189


$
2,216       September 30,


December 31,2006


2005Assets (primarily real estate)

$
810,328


$
575,944Liabilities (primarily mortgage
    notes payable)


(720,739
)


(419,690
)Partners and members
    equity

$
89,589


$
156,254Companys share of equity
    investees net assets

$
70,728


$
57,997   Nine Months Ended September 30,2006


2005Revenue (primarily rental income)

$
41,845


$
27,573Expenses (primarily interest on
    mortgages and depreciation)


(33,357
)


(21,750
)Net income

$
8,488


$
5,823Companys share of net income
    from equity investments in real estate

$
3,067


$
1,906  11




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##### Table of Contents



CORPORATE
    PROPERTY ASSOCIATES 16  GLOBAL INCORPORATED
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (in thousands, except share and per share amounts)
  NOTE 7.
    Acquisitions
    of Real Estate-Related Investments  Real
    Estate Acquired
  2006
  2005
  Equity
    Investments in Real Estate Acquired
  2006
  2005
  Mortgage
    Notes Receivable Acquired
  2005 10-year 25-year
 12




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##### Table of Contents



CORPORATE
    PROPERTY ASSOCIATES 16  GLOBAL INCORPORATED
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (in thousands, except share and per share amounts)
  Real
    Estate Under Construction
  2006 build-to-suit build-to-suit build-to-suit
  NOTE 8.
    Intangibles      September 30,


December 31,2006


2005Lease intangiblesIn-place lease

$
55,429


$
43,481Tenant relationship


16,927



12,808Above-market rent


18,479



13,150Less: accumulated amortization


(5,988
)


(2,850
)$
84,847


$
66,589Below-market rent

$
(15,540
)

$
(11,866
)Less: accumulated amortization


905



420$
(14,635
)

$
(11,446
)     NOTE 9.
    Commitments
    and Contingencies      ®
 13




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##### Table of Contents



CORPORATE
    PROPERTY ASSOCIATES 16  GLOBAL INCORPORATED
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (in thousands, except share and per share amounts)
  ® ® ® ®
  ® ® ® ® ®
        NOTE 10.
    Pro Forma
    Financial Information   14




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##### Table of Contents



CORPORATE
    PROPERTY ASSOCIATES 16  GLOBAL INCORPORATED
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (in thousands, except share and per share amounts)
    Three Months Ended September 30,2006


2005Pro forma total revenues

$
18,038


$
16,511Pro forma net income


7,510



4,215Pro forma earnings per share:Basic and diluted

$
0.09


$
0.05   Nine Months Ended September 30,2006


2005Pro forma total revenues

$
53,368


$
48,875Pro forma net income


19,258



12,887Pro forma earnings per share:Basic and diluted

$
0.22


$
0.15     NOTE 11.
    Subsequent
    Events     15




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##### Table of Contents



CORPORATE
    PROPERTY ASSOCIATES 16  GLOBAL INCORPORATED
  ITEM 2.  MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS
 (in thousands, except share and per share amounts)
    EXECUTIVE
    OVERVIEW
  Business
    Overview
    Current
    Developments and Trends
      build-to-suit
         16




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##### Table of Contents



CORPORATE
    PROPERTY ASSOCIATES 16  GLOBAL INCORPORATED
  ITEM 2.  MANAGEMENTS DISCUSSION AND
    ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS  (Continued)
 (in thousands, except share and per share amounts)
    year-to-date
        How
    Management Evaluates Results of Operations
     17




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##### Table of Contents



CORPORATE
    PROPERTY ASSOCIATES 16  GLOBAL INCORPORATED
  ITEM 2.  MANAGEMENTS DISCUSSION AND
    ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS  (Continued)
 (in thousands, except share and per share amounts)
          Nine Months Ended September 30,2006


2005Rental income

$
34,876


$
19,359Interest income from direct
    financing leases


10,935



6,964$
45,811


$
26,323  18




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##### Table of Contents



CORPORATE
    PROPERTY ASSOCIATES 16  GLOBAL INCORPORATED
  ITEM 2.  MANAGEMENTS DISCUSSION AND
    ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS  (Continued)
 (in thousands, except share and per share amounts)
    Nine Months Ended September 30,2006


2005Telcordia Technologies, Inc.(a)

$
6,692


$
4,823The Talaria Company
    (Hinckley)(a)(b)


3,759



2,030Huntsman International, LLC(a)


3,019



241MetoKote Corporation,
    MetoKote Canada Limited and MetoKote de Mexico(a)(c)


2,860



1,229Ply Gem Industries, Inc.(c)


2,659



2,564Finisar Corporation(a)


2,453



2,154Foss Manufacturing Company, LLC(f)


2,397



2,397Polestar Petty Ltd.(c)


2,004



2,015LFD Manufacturing Limited and IDS
    Logistics (Thailand) Limited(a)(c)(e)


1,762



1,162Murray International Metals,
    Limited(a)(c)


1,561



Kings Super Markets Inc.(d)


1,457



HMS Healthcare, Inc.


1,278



1,351Plantagen Finland Oy and Plantagen
    Sverige AB(c)


1,252



1,279Bobs Discount Furniture,
    LLC(a)


1,236



119Xpedite Systems, Inc.


1,194



1,194Precise Technology Group,
    Inc.


1,086



1,021Castle Rock Industries, Inc.


1,025



993Dicks Sporting Goods,
    Inc.(a)(b)


1,012



Hilite Germany GmbH & Co.
    KG(c)(d)


862



Career Education Corp.(a)


764



238Utex Industries, Inc.(d)


720



Other(a)(c)(d)


4,759



1,513$
45,811


$
26,323     (a)
    
    We acquired or placed into service our interest in this
    investment during 2005.(b)
    
    Includes lease revenues applicable to minority interests
    totaling $2,139 and $609 in 2006 and 2005, respectively.(c)
    
    Revenue amounts are subject to fluctuations in foreign currency
    exchange rates.(d)
    
    We acquired or placed into service our interest in this
    investment during 2006.(e)
    
    We completed an expansion at this property in December 2005.(f)
    
    In May 2006, Foss Manufacturing Company, LLC assumed the lease
    of Foss Manufacturing Company, Inc., which was operating under
    bankruptcy protection since September 2005. 19




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##### Table of Contents



CORPORATE
    PROPERTY ASSOCIATES 16  GLOBAL INCORPORATED
  ITEM 2.  MANAGEMENTS DISCUSSION AND
    ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS  (Continued)
 (in thousands, except share and per share amounts)
    Nine Months Ended September 30,2006


2005U-Haul Moving Partners, Inc. and
    Mercury Partners, LP

$
6,587


$
6,587Thales S.A.(a)


2,929



2,951Hellweg Die Profi-Baumarkte
    GmbH & Co. KG(a)(b)


2,370



893Police Prefecture, French
    Government(a)(b)


2,319



662Pohjola Non-life Insurance
    Company(a)


2,267



2,269TietoEnator Plc(a)


2,121



2,126OBI A.G. (a)(c)


1,706



Actuant Corporation(a)


571



562$
20,870


$
16,050     (a)
    
    Revenue amounts are subject to fluctuations in foreign currency
    exchange rates.(b)
    
    We acquired or placed into service our interest in this
    investment during 2005.(c)
    
    We acquired or placed into service our interest in this
    investment during 2006.  RESULTS
    OF OPERATIONS
    Lease
    Revenues
         20




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##### Table of Contents



CORPORATE
    PROPERTY ASSOCIATES 16  GLOBAL INCORPORATED
  ITEM 2.  MANAGEMENTS DISCUSSION AND
    ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS  (Continued)
 (in thousands, except share and per share amounts)
  Depreciation
    and Amortization
    Property
    Expenses
      Income
    from Equity Investments in Real Estate
      Other
    Interest Income
    Minority
    Interest in Income
      Interest
    Expense
   21




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##### Table of Contents



CORPORATE
    PROPERTY ASSOCIATES 16  GLOBAL INCORPORATED
  ITEM 2.  MANAGEMENTS DISCUSSION AND
    ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS  (Continued)
 (in thousands, except share and per share amounts)
   Net
    Income
    FINANCIAL
    CONDITION
  Uses of
    Cash During the Period
      build-to-suit build-to-suit 2006 year-to-date
      Cash
    Resources
   22




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##### Table of Contents



CORPORATE
    PROPERTY ASSOCIATES 16  GLOBAL INCORPORATED
  ITEM 2.  MANAGEMENTS DISCUSSION AND
    ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS  (Continued)
 (in thousands, except share and per share amounts)
      
    The impact of investments entered into or placed into service
    during 2006, the full year impact of investments entered into
    during 2005 and the expected completion of a
    build-to-suit
    project in 2006, all of which we expect will have a net positive
    impact on cash flow.
    The advisors election in 2006 to continue to receive asset
    management and performance fees in restricted shares. The
    advisor has not yet made its election for 2007 and accordingly
    cash flow could be significantly adversely affected if the
    advisor decides to receive payment for asset management and
    performance fees in cash versus restricted shares.
    Scheduled rent increases on several properties during 2006 and
    2007 should result in additional cash from operations.  Cash
    Requirements
  build-to-suit
    Summary
    of Financing
    September 30,2006


2005Balance:Fixed rate

$
480,521


$
296,933Variable rate






Total

$
480,521


$
296,933Weighted average interest rate
    at end of period:Fixed rate


5.96
%


5.88
%  23




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##### Table of Contents



CORPORATE
    PROPERTY ASSOCIATES 16  GLOBAL INCORPORATED
  ITEM 2.  MANAGEMENTS DISCUSSION AND
    ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS  (Continued)
 (in thousands, except share and per share amounts)
  Aggregate
    Contractual Agreements
    Less








MoreThan








Than1


1-3


3-5


5Total


Year


Years


Years


YearsMortgage notes payable 
    Principal

$
480,521


$
7,939


$
19,641


$
24,221


$
428,720Mortgage notes payable 
    Interest


302,079



24,240



56,057



69,427



152,355Deferred acquisition fees due to
    affiliates  Principal


23,672



8,399



13,278



1,995



Deferred acquisition fees due to
    affiliates  Interest


3,867



2,634



1,133



100



Build-to-suit
    commitments(1)


82,719



82,719











Operating leases(2)


2,922



188



573



588



1,573$
895,780


$
126,119


$
90,682


$
96,331


$
582,648     (1)
    
    Represents remaining
    build-to-suit
    commitments for four projects. Commitments include a project in
    Blairsville, Pennsylvania where estimated total construction
    costs are currently projected to total approximately $25,152, of
    which $8,978 was funded as of September 30, 2006; a project
    in Plainfield, Indiana where estimated total construction costs
    are currently projected to total approximately $17,600 of which
    $13,682 was funded as of September 30, 2006; a project in
    Laramie, Wyoming, where estimated total construction costs are
    currently projected to total approximately $24,731 of which
    $14,063 was funded as of September 30, 2006; a project in
    Bloomington, Minnesota, where estimated total construction costs
    are currently projected to total approximately $47,200 of which
    $6,988 was funded as of September 30, 2006 and a project in
    Norwich, Connecticut, where estimated total construction costs
    are currently projected to total approximately $12,500 of which
    $753 was funded as of September 30, 2006.(2)
    
    Operating lease obligations consist primarily of our share of
    minimum rents payable under an office cost-sharing agreement
    with certain affiliates for the purpose of leasing office space
    used for the administration of real estate entities. Such
    amounts are allocated among the entities based on gross revenues
    and are adjusted quarterly.      SUBSEQUENT
    EVENTS
     24




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##### Table of Contents



CORPORATE
    PROPERTY ASSOCIATES 16  GLOBAL INCORPORATED
  ITEM 3. 
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 (in
    thousands)
    Interest
    Rate Risk
      Fair2006


2007


2008


2009


2010


Thereafter


Total


ValueFixed rate debt

$
1,833


$
8,361


$
9,594


$
10,557


$
11,508


$
438,668


$
480,521


$
479,932Weighted average interest rate


6.01
%


5.94
%


5.97
%


5.99
%


6.00
%


5.95
%     and/or
  Foreign
    Currency Exchange Rate Risk
     25




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##### Table of Contents



CORPORATE
    PROPERTY ASSOCIATES 16  GLOBAL INCORPORATED
 ITEM 4. 
    CONTROLS AND PROCEDURES    Rule 13a-15(e)
   26




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##### Table of Contents



CORPORATE
    PROPERTY ASSOCIATES 16  GLOBAL INCORPORATED
 PART II(in
    thousands, except share and per share amounts) ITEM 2. 
    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
    PROCEEDS      Maximum Number(or ApproximateTotal Number


Dollar Value)of Shares


of SharesPurchased as


that MayPart of


Yet beTotal Number


Average Price


Publicly Announced


Purchased Underof Shares


Paid per


Plans or


the Plans2006 Period

Purchased(1)


Share


Programs(1)


or Programs(1)July


24,363


$
9.30



N/A



N/AAugust





$




N/A



N/ASeptember


137,750


$
9.30



N/A



N/ATotal


162,113     (1)
    
    All shares were purchased pursuant to our redemption plan, which
    we announced in December 2003. Under our redemption plan we may
    elect to redeem shares of our common stock subject to certain
    conditions and limitations. The maximum amount of shares
    purchasable by us in any period depends on the availability of
    funds generated by the Distribution Reinvestment and Share
    Purchase Plan and other factors at the discretion of our Board
    of Directors. However, at no time during a
    12-month
    period may the number of shares redeemed by us exceed 5% of the
    number of shares of our outstanding common stock at the
    beginning of such period. The redemption plan will terminate if
    and when our shares are listed on a national securities exchange
    or included for quotation on Nasdaq. ITEM 6. 
    EXHIBITS  31
.1

Certification of Chief Executive
    Officer pursuant to Section 302 of the Sarbanes-Oxley Act
    of 200231
.2

Certification of Chief Financial
    Officer pursuant to Section 302 of the Sarbanes-Oxley Act
    of 200232


Certification of Chief Executive
    Officer and Chief Financial Officer pursuant to Section 906
    of the Sarbanes-Oxley Act of 2002  27




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##### Table of Contents



CORPORATE
    PROPERTY ASSOCIATES 16  GLOBAL INCORPORATED
 SIGNATURES    CORPORATE PROPERTY ASSOCIATES 16 -
    GLOBAL INCORPORATED11/14/2006
    Date

By:

/s/  Mark
    J. DeCesarisMark
    J. DeCesaris
    Managing Director and acting Chief Financial Officer
    (acting Principal Financial Officer)11/14/2006
    Date

By:

/s/  Claude
    FernandezClaude
    Fernandez
    Managing Director and Chief Accounting Officer
    (Principal Accounting Officer)  28