##### 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 1934
 For the quarterly period ended June 30, 2008
 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: 001-32162
 
 CORPORATE PROPERTY ASSOCIATES 16  GLOBAL INCORPORATED
  Maryland
    
    80-0067704(State of incorporation)
    
    (I.R.S. Employer Identification No.)50 Rockefeller PlazaNew York, New York
    
    10020(Address of principal executive office)
    
    (Zip Code)
 Investor Relations (212) 492-8920
(212) 492-1100
 þ o
  Large accelerated filer
o
    
    Accelerated filer o
    
    Non-accelerated filer  
þ
(Do not check if a smaller reporting company)
    
    Smaller reporting company o
 o þ




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##### 



INDEX
 Page No.PART I  FINANCIAL INFORMATIONItem 1.  Financial Statements*Consolidated Balance Sheets as of June 30, 2008 and December 31, 2007
    
    
    2Consolidated Statements of Income for the three and six months ended June 30, 2008 and 2007
    
    
    3Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2008 and 2007
    
    
    3Consolidated Statements of Cash Flows for the six months ended June 30, 2008 and 2007
    
    
    4Notes to Consolidated Financial Statements
    
    
    5Item 2.  Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    15Item 3.  Quantitative and Qualitative Disclosures About Market Risk
    
    
    26Item 4T.  Controls and Procedures
    
    
    27PART II  OTHER INFORMATIONItem 2.  Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    28Item 4.  Submission of Matters to a Vote of Security Holders
    
    
    28Item 6.  Exhibits
    
    
    28Signatures
    
    
    29EX-10.1: ASSET MANAGEMENT AGREEMENTEX-10.2: AMENDMENT NO. 1 TO THE AMENDED AND RESTATED ADVISORY AGREEMENTEX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32: CERTIFICATIONS
  
 *
    
    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. Forward Looking Statements
   CPA ® :16  Global 6/30/2008 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 per share amounts)
 June 30, 2008
    
    
    December 31, 2007(NOTE)AssetsReal estate, net
    
    $
    1,755,313
    
    
    $
    1,597,457Net investment in direct financing leases
    
    
    382,874
    
    
    
    343,721Equity investments in real estate
    
    
    188,572
    
    
    
    178,661Real estate under construction
    
    
    
    
    
    
    50,140Notes receivable
    
    
    385,327
    
    
    
    358,079Cash and cash equivalents
    
    
    201,126
    
    
    
    211,759Intangible assets, net
    
    
    167,912
    
    
    
    163,824Funds in escrow
    
    
    115,042
    
    
    
    137,473Other assets, net
    
    
    37,113
    
    
    
    40,755Total assets
    
    $
    3,233,279
    
    
    $
    3,081,869Liabilities and Shareholders EquityLiabilities:Non-recourse debt
    
    $
    1,532,121
    
    
    $
    1,403,299Accounts payable, accrued expenses and other liabilities
    
    
    62,423
    
    
    
    69,419Prepaid and deferred rental income and security deposits
    
    
    102,605
    
    
    
    96,057Due to affiliates
    
    
    19,690
    
    
    
    52,291Distributions payable
    
    
    19,864
    
    
    
    19,432Total liabilities
    
    
    1,736,703
    
    
    
    1,640,498Minority interest in consolidated entities
    
    
    472,216
    
    
    
    420,274Commitments and contingencies (Note 7)Shareholders equity:Common stock, $0.001 par value; 250,000,000 shares authorized;
122,987,159 and 120,567,308 shares issued and outstanding, respectively
    
    
    123
    
    
    
    121Additional paid-in capital
    
    
    1,107,373
    
    
    
    1,085,506Distributions in excess of accumulated earnings
    
    
    (108,353
    )
    
    
    (82,481
    )Accumulated other comprehensive income
    
    
    43,912
    
    
    
    31,9051,043,055
    
    
    
    1,035,051Less, treasury stock at cost, 2,009,977 and 1,500,198 shares, respectively
    
    
    (18,695
    )
    
    
    (13,954
    )Total shareholders equity
    
    
    1,024,360
    
    
    
    1,021,097Total liabilities and shareholders equity
    
    $
    3,233,279
    
    
    $
    3,081,869
   CPA ® :16  Global 6/30/2008 10-Q 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 June 30,
    
    
    Six months ended June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007RevenuesRental income
    
    $
    38,888
    
    
    $
    29,028
    
    
    $
    75,669
    
    
    $
    47,271Interest income from direct financing leases
    
    
    7,596
    
    
    
    6,468
    
    
    
    14,677
    
    
    
    12,614Interest income on notes receivable
    
    
    7,857
    
    
    
    6,310
    
    
    
    15,138
    
    
    
    6,616Other real estate income
    
    
    6,455
    
    
    
    
    
    
    
    10,996
    
    
    
    Other income
    
    
    882
    
    
    
    326
    
    
    
    1,456
    
    
    
    47061,678
    
    
    
    42,132
    
    
    
    117,936
    
    
    
    66,971Operating ExpensesDepreciation and amortization
    
    
    (11,724
    )
    
    
    (8,515
    )
    
    
    (22,853
    )
    
    
    (13,747
    )Property expenses
    
    
    (7,723
    )
    
    
    (5,181
    )
    
    
    (15,226
    )
    
    
    (9,170
    )Other real estate expenses
    
    
    (4,949
    )
    
    
    
    
    
    
    (8,989
    )
    
    
    General and administrative
    
    
    (2,866
    )
    
    
    (1,900
    )
    
    
    (6,136
    )
    
    
    (3,219
    )(27,262
    )
    
    
    (15,596
    )
    
    
    (53,204
    )
    
    
    (26,136
    )Other Income and ExpensesIncome from equity investments in real estate
    
    
    3,035
    
    
    
    1,519
    
    
    
    5,588
    
    
    
    3,271Other interest income
    
    
    1,145
    
    
    
    6,122
    
    
    
    2,737
    
    
    
    12,319Minority interest in income
    
    
    (8,217
    )
    
    
    (6,116
    )
    
    
    (16,415
    )
    
    
    (6,626
    )Gain on foreign currency transactions,
derivative instruments
and other, net


    860
    
    
    
    49
    
    
    
    3,044
    
    
    
    318Interest expense
    
    
    (22,049
    )
    
    
    (17,175
    )
    
    
    (43,356
    )
    
    
    (27,367
    )(25,226
    )
    
    
    (15,601
    )
    
    
    (48,402
    )
    
    
    (18,085
    )Income before income taxes
    
    
    9,190
    
    
    
    10,935
    
    
    
    16,330
    
    
    
    22,750Provision for income taxes
    
    
    (1,357
    )
    
    
    (892
    )
    
    
    (2,685
    )
    
    
    (1,409
    )Net Income
    
    $
    7,833
    
    
    $
    10,043
    
    
    $
    13,645
    
    
    $
    21,341Earnings Per Share
    
    $
    0.06
    
    
    $
    0.09
    
    
    $
    0.11
    
    
    $
    0.19Weighted Average Shares Outstanding
    
    
    120,930,804
    
    
    
    115,527,351
    
    
    
    120,435,559
    
    
    
    115,102,574Distributions Declared Per Share
    
    $
    0.1642
    
    
    $
    0.1622
    
    
    $
    0.3279
    
    
    $
    0.3239
  
 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)  (in thousands)
 Three months ended June 30,
    
    
    Six months ended June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Net Income
    
    $
    7,833
    
    
    $
    10,043
    
    
    $
    13,645
    
    
    $
    21,341Other Comprehensive IncomeChange in unrealized (loss) gain on marketable securities
    
    
    10
    
    
    
    (111
    )
    
    
    (9
    )
    
    
    (105
    )Foreign currency translation adjustment
    
    
    (2,243
    )
    
    
    2,571
    
    
    
    11,262
    
    
    
    4,775Change in unrealized gain on derivative instruments
    
    
    2,016
    
    
    
    1,666
    
    
    
    754
    
    
    
    1,959(217
    )
    
    
    4,126
    
    
    
    12,007
    
    
    
    6,629Comprehensive Income
    
    $
    7,616
    
    
    $
    14,169
    
    
    $
    25,652
    
    
    $
    27,970
  CPA ® :16  Global 6/30/2008 10-Q 3




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##### Table of Contents



CORPORATE
PROPERTY ASSOCIATES 16  GLOBAL INCORPORATED
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)  (in thousands)
 Six months ended June 30,2008
    
    
    2007Cash Flows  Operating ActivitiesNet income
    
    $
    13,645
    
    
    $
    21,341Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization including intangible assets and deferred financing costs
    
    
    24,686
    
    
    
    13,893Straight-line rent adjustments and amortization of rent-related intangibles
    
    
    42
    
    
    
    (189
    )Income from equity investments in real estate in excess of distributions received
    
    
    (3,018
    )
    
    
    (1,278
    )Minority interest in income
    
    
    16,415
    
    
    
    6,626Issuance of shares to affiliate in satisfaction of fees due
    
    
    6,383
    
    
    
    3,895Realized gain on foreign currency transactions, net
    
    
    (1,477
    )
    
    
    (277
    )Unrealized gain on foreign currency and derivative transactions, net
    
    
    (1,431
    )
    
    
    (41
    )Realized gain on sale of real estate
    
    
    (136
    )
    
    
    Increase in accrued interest
    
    
    295
    
    
    
    5,516(Decrease) increase in due to affiliates
    
    
    (3,688
    )
    
    
    5,159Change in other operating assets and liabilities, net
    
    
    6,929
    
    
    
    3,278Net cash provided by operating activities
    
    
    58,645
    
    
    
    57,923Cash Flows  Investing ActivitiesDistributions from equity investments in real estate in excess of equity income
    
    
    6,479
    
    
    
    1,396Contributions to equity investments in real estate
    
    
    (6,205
    )
    
    
    (723
    )Acquisitions of real estate and other capital expenditures
    
    
    (125,785
    )
    
    
    (385,182
    )Funding/purchases of notes receivable
    
    
    (1,926
    )
    
    
    (337,764
    )Funds placed in escrow for future acquisition and construction of real estate
    
    
    (18,511
    )
    
    
    (19,112
    )Release of funds held in escrow for acquisition and construction of real estate
    
    
    40,616
    
    
    
    3,985VAT taxes recovered (paid) in connection with acquisitions of real estate
    
    
    3,286
    
    
    
    (796
    )Proceeds from sale of real estate
    
    
    22,886
    
    
    
    Proceeds from maturity of short-term investment
    
    
    
    
    
    
    1,698Receipt of principal payment of mortgage note receivable
    
    
    149
    
    
    
    142Payment of deferred acquisition fees to affiliate
    
    
    (29,546
    )
    
    
    Net cash used in investing activities
    
    
    (108,557
    )
    
    
    (736,356
    )Cash Flows  Financing ActivitiesDistributions paid
    
    
    (39,085
    )
    
    
    (34,623
    )Distributions paid to minority interest partners
    
    
    (18,686
    )
    
    
    (296,565
    )Contributions from minority interest partners
    
    
    282
    
    
    
    333,368Proceeds from mortgages and notes payable
    
    
    100,212
    
    
    
    604,203Scheduled payments of mortgage principal
    
    
    (8,462
    )
    
    
    (4,941
    )Prepayment of note payable
    
    
    (3,286
    )
    
    
    Deferred financing costs and mortgage deposits, net of deposits refunded
    
    
    (456
    )
    
    
    (149
    )Proceeds from issuance of shares, net of costs of raising capital
    
    
    15,486
    
    
    
    14,871Purchase of treasury stock
    
    
    (4,741
    )
    
    
    (3,955
    )Net cash provided by financing activities
    
    
    41,264
    
    
    
    612,209Change in Cash and Cash Equivalents During the PeriodEffect of exchange rate changes on cash
    
    
    (1,985
    )
    
    
    (3,032
    )Net (decrease) increase in cash and cash equivalents
    
    
    (10,633
    )
    
    
    (69,256
    )Cash and cash equivalents, beginning of period
    
    
    211,759
    
    
    
    464,223Cash and cash equivalents, end of period
    
    $
    201,126
    
    
    $
    394,967
  CPA ® :16  Global 6/30/2008 10-Q 4




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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)  (in thousands, except share and per share amounts)
 Note 1. Business
 
 Note 2. Basis of Presentation
  Basis of Consolidation
     CPA ® :16  Global 6/30/2008 10-Q 5




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##### Table of Contents



Notes to Consolidated Financial Statements
  Information about International Geographic Areas
  Out-of-Period Adjustment
  Adoption of New Accounting Pronouncements
 SFAS 157
   Fair Value Measurements at Reporting Date Using:Quoted Prices inActive Markets for
    
    
    Significant Other
    
    
    UnobservableIdentical Assets
    
    
    Observable Inputs
    
    
    InputsDescription
    
    June 30, 2008
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Assets:Marketable equity securities
    
    $
    2,280
    
    
    $
    
    
    
    $
    
    
    
    $
    2,280Derivative assets
    
    
    8,141
    
    
    
    
    
    
    
    
    
    
    
    8,141$
    10,421
    
    
    $
    
    
    
    $
    
    
    
    $
    10,421Liabilities:Derivative liabilities
    
    $
    (27
    )
    
    $
    
    
    
    $
    (27
    )
    
    $
    
  CPA ® :16  Global 6/30/2008 10-Q 6




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##### Table of Contents



Notes to Consolidated Financial Statements
 Fair Value Measurements UsingSignificant Unobservable Inputs (Level 3 only)Marketable
    
    
    Derivative
    
    
    
    
    
    
    Marketable
    
    
    DerivativeSecurities
    
    
    Assets
    
    
    Total Assets
    
    
    Securities
    
    
    Assets
    
    
    Total AssetsThree months ended June 30, 2008
    
    
    Six months ended June 30, 2008Beginning balance
    
    $
    2,345
    
    
    $
    8,166
    
    
    $
    10,511
    
    
    $
    2,438
    
    
    $
    6,246
    
    
    $
    8,684Total gains or losses (realized and
unrealized):Included in earnings
    
    
    
    
    
    
    14
    
    
    
    14
    
    
    
    
    
    
    
    1,449
    
    
    
    1,449Included in other
comprehensive income
    
    
    10
    
    
    
    (39
    )
    
    
    (29
    )
    
    
    (9
    )
    
    
    446
    
    
    
    437Amortization and accretion
    
    
    (75
    )
    
    
    
    
    
    
    (75
    )
    
    
    (149
    )
    
    
    
    
    
    
    (149
    )Purchases, issuances, and settlements
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Ending balance
    
    $
    2,280
    
    
    $
    8,141
    
    
    $
    10,421
    
    
    $
    2,280
    
    
    $
    8,141
    
    
    $
    10,421The amount of total gains or losses for the
period included in earnings attributable to
the change in unrealized gains or losses
relating to assets still held at the
reporting date
    
    $
    
    
    
    $
    14
    
    
    $
    14
    
    
    $
    
    
    
    $
    1,449
    
    
    $
    1,449
  SFAS 159
  Recent Accounting Pronouncements
 SFAS 141R
  SFAS 160
  SFAS 161
  CPA ® :16  Global 6/30/2008 10-Q 7




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##### Table of Contents



Notes to Consolidated Financial Statements
  FSP 142-3
  Note 3. Agreements and Transactions with Related Parties
  st ®
   CPA ® :16  Global 6/30/2008 10-Q 8




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##### Table of Contents



Notes to Consolidated Financial Statements
     ® ® CPA®:17

 Note 4. Real Estate
  June 30, 2008
    
    
    December 31, 2007Land
    
    $
    365,754
    
    
    $
    338,639Buildings
    
    
    1,452,007
    
    
    
    1,301,396Less: Accumulated depreciation
    
    
    (62,448
    )
    
    
    (42,578
    )$
    1,755,313
    
    
    $
    1,597,457
  CPA ® :16  Global 6/30/2008 10-Q 9




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##### Table of Contents



Notes to Consolidated Financial Statements
  Note 5. Equity Investments in Real Estate
   Ownership Interest
    
    Carrying ValueLessee
    
    at June 30, 2008
    
    June 30, 2008
    
    
    December 31, 2007Equity Investments in Real Estate:U-Haul Moving Partners, Inc. and Mercury Partners, LP
    
    
    31
    %
    
    $
    35,359
    
    
    $
    34,919Schuler A.G. (a)
    
    
    33
    %
    
    
    27,817
    
    
    
    25,537Hellweg Die Profi-Baumarkte GmbH & Co. KG (Hellweg 1) (a)
    
    
    25
    %
    
    
    20,428
    
    
    
    18,449Police Prefecture, French Government (a)
    
    
    50
    %
    
    
    14,895
    
    
    
    14,601OBI A.G. (a)
    
    
    25
    %
    
    
    14,230
    
    
    
    13,251TietoEnator Plc (a)
    
    
    40
    %
    
    
    10,785
    
    
    
    10,573Pohjola Non-life Insurance Company (a)
    
    
    40
    %
    
    
    10,743
    
    
    
    10,442Lindenmaier A.G. (a)
    
    
    33
    %
    
    
    6,771
    
    
    
    6,218Actuant Corporation (a)
    
    
    50
    %
    
    
    3,157
    
    
    
    2,761Consolidated Systems, Inc.
    
    
    40
    %
    
    
    2,184
    
    
    
    2,274Thales S.A. (a)
    
    
    35
    %
    
    
    2,175
    
    
    
    5,814148,544
    
    
    
    144,839ADC Equity Arrangement:Soho House Beach House LLC (b)
    
    

N/A
    
    
    40,028
    
    
    
    33,822$
    188,572
    
    
    $
    178,661
 
 (a)
    
    Carrying value of investment is affected by the impact of fluctuations in the exchange rate
of the Euro.(b)
    
    In 2007, we entered into a domestic build-to-suit project that we account for under the
equity method of accounting as it constitutes an ADC equity arrangement. The ADC equity
arrangement provides for a fixed annual interest rate of 5.8% and matures in April 2010. We
are committed to purchase the property at a fixed price upon completion, and the borrower has
little or no equity in the transaction. At June 30, 2008 and December 31, 2007, we have funded
$38,651 and $31,070, respectively, of our total commitment of $58,400.  June 30, 2008
    
    
    December 31, 2007Assets
    
    $
    1,487,040
    
    
    $
    1,388,446Liabilities
    
    
    (971,507
    )
    
    
    (924,421
    )Partners and members equity
    
    $
    515,533
    
    
    $
    464,025
 CPA ® :16  Global 6/30/2008 10-Q 10




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##### Table of Contents



Notes to Consolidated Financial Statements
 Three months ended June 30,
    
    
    Six months ended June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Revenue
    
    $
    31,860
    
    
    $
    25,930
    
    
    $
    61,779
    
    
    $
    50,545Expenses
    
    
    (23,560
    )
    
    
    (19,888
    )
    
    
    (45,219
    )
    
    
    (38,633
    )Net income
    
    $
    8,300
    
    
    $
    6,042
    
    
    $
    16,560
    
    
    $
    11,912Our share of income
from equity
investments in real
estate
    
    $
    3,035
    
    
    $
    1,519
    
    
    $
    5,588
    
    
    $
    3,271
 
 (a)
    
    Inclusive of amortization of differences between the fair value of investments acquired and
the carrying value of the ventures net assets as of the date of acquisition. Note 6. Acquisitions of Real Estate-Related Investments
  Real Estate Acquired
 2008 
 2007 
 Hellweg 2 Investment
    Equity Investments in Real Estate Acquired
 2007 
 CPA ® :16  Global 6/30/2008 10-Q 11




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##### Table of Contents



Notes to Consolidated Financial Statements
  Mortgage Notes Receivable Acquired
 2007 
 Real Estate Under Construction
 2007 
 Note 7. Commitments and Contingencies
  Maryland Securities Commission
 ®
 Note 8. Advisor Settlement of SEC Investigation
 ® ®
  Note 9. Risk Management and Use of Derivative Financial Instruments
 Risk Management
  Use of Derivative Financial Instruments
   CPA ® :16  Global 6/30/2008 10-Q 12




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##### Table of Contents



Notes to Consolidated Financial Statements
 Interest Rate Swaps
      Embedded Credit Derivative
  Foreign Currency Exchange
  Concentration of Credit Risk
  CPA ® :16  Global 6/30/2008 10-Q 13




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##### Table of Contents



Notes to Consolidated Financial Statements
    Note 10. Income Taxes
     Note 11. Subsequent Event
  CPA ® :16  Global 6/30/2008 10-Q 14




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##### Table of Contents



ITEM 2.  MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS  (in thousands, except share and per share amounts)
  Business Overview
  Highlights
 Financial Highlights
 
    
    Total revenues for the second quarter of 2008 were $61,678, compared to $42,132 in the
second quarter of 2007, and $117,936 for the six months ended June 30, 2008, compared to
$66,971 for the same period of 2007. Revenue generated from new investments, including
investments recently placed into service, contributed the majority of the increases for
both periods.
    
    Net income for the second quarter of 2008 was $7,833, compared to $10,043 in the second
quarter of 2007, and $13,645 for the six months ended June 30, 2008, compared to $21,341
for the same period of 2007. As a result of investing the proceeds of
our offering during 2007 and 2008, other interest income decreased
significantly, while the increase in revenues resulting from these
investments was partially offset by increases in expenses associated
with these properties, including non-cash expenses (depreciation and
amortization).
    
    Cash flow from operating activities for the six months ended June 30, 2008 was $58,645,
compared to $57,923 for the same period of 2007.
    
    Our quarterly cash distribution increased to $0.1642 per share for the second quarter of
2008, or $0.66 per share on an annualized basis.
  Fund Highlights
 Investment Activity
 Financing Activity
 Sale of
Interest in Joint Venture ® ®
 Current Trends
  CPA ® :16  Global 6/30/2008 10-Q 15




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##### Table of Contents



Investment Opportunities
    Six months ended June 30,2008
    
    
    2007Total investments(a)
    
    $
    122,819
    
    
    $
    744,222Number of investments
    
    
    5
    
    
    
    9Average investment size
    
    $
    24,564
    
    
    $
    82,691Percentage of international investments
    
    
    52
    %
    
    
    64
    %
 
 (a)
    
    Inclusive of minority interest or reflecting our proportionate share of total cost under the
equity method of accounting, and based upon the foreign exchange rate at the date of
acquisition, as applicable.  Mortgage Financing
  Commercial Real Estate
  Corporate Defaults
  CPA ® :16  Global 6/30/2008 10-Q 16




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##### Table of Contents



Competition
  CPI
  Exchange Rate Movements
  Results of Operations
  Six months ended June 30,2008
    
    
    2007Rental income
    
    $
    75,669
    
    
    $
    47,271Interest income from direct financing leases
    
    
    14,677
    
    
    
    12,614$
    90,346
    
    
    $
    59,885
 CPA ® :16  Global 6/30/2008 10-Q 17




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##### Table of Contents



Six months ended June 30,Lessee
    
    2008
    
    
    2007Hellweg Die Profi-Baumarkte GmbH & Co. KG (Hellweg 2) (a) (b) (c)
    
    $
    19,275
    
    
    $
    8,044Telcordia Technologies, Inc.
    
    
    4,600
    
    
    
    4,509Berry Plastics
 Corporation(d)
    
    
    3,331
    
    
    
    Nordic Cold Storage LLC(d)
    
    
    3,111
    
    
    
    2,446Fraikin SAS (b) (d)
    
    
    3,101
    
    
    
    2,923The Talaria Company (Hinckley) (c)
    
    
    2,480
    
    
    
    2,487International Aluminum Corp. and United States Aluminum of Canada Ltd. (b) (d)
    
    
    2,183
    
    
    
    204LFD Manufacturing Ltd., IDS Logistics (Thailand) Ltd. and IDS Manufacturing SDN BHD (b)
    
    
    2,134
    
    
    
    1,765MetoKote Corporation, MetoKote Canada Limited and MetoKote de Mexico(b) (e)
    
    
    2,050
    
    
    
    1,937Huntsman International, LLC
    
    
    2,003
    
    
    
    2,003Ply Gem Industries, Inc. (b)
    
    
    1,905
    
    
    
    1,824Performance Fibers GmbH(b)
    
    
    1,845
    
    
    
    1,617Gortz & Schiele GmbH & Co. and Goertz & Schiele Corporation (b) (c) (e)
    
    
    1,844
    
    
    
    1,648TRW Vehicle Safety Systems Inc. (e)
    
    
    1,784
    
    
    
    1,784Holopack International Corp. (d)
    
    
    1,781
    
    
    
    863Bobs Discount Furniture, LLC (f)
    
    
    1,759
    
    
    
    1,098Foss Manufacturing Company, LLC (g)
    
    
    1,742
    
    
    
    1,589Kings Super Markets Inc.
    
    
    1,708
    
    
    
    1,708Universal Technical Institute of California, Inc. (d)
    
    
    1,700
    
    
    
    Finisar Corporation
    
    
    1,632
    
    
    
    1,632Dicks Sporting Goods, Inc. (c) (f)
    
    
    1,562
    
    
    
    1,450Willy Voit GmbH & Co. Stanz-und Metallwerk (b) (d) (e)
    
    
    1,490
    
    
    
    Polestar Petty Ltd. (b)
    
    
    1,484
    
    
    
    1,460Other (b) (d) (e) (f) (g)
    
    
    23,842
    
    
    
    16,894$
    90,346
    
    
    $
    59,885
 
 (a)
    
    Investment acquired in April 2007 (see Results of Operations below). We also own an equity
investment in other properties leased to this tenant through a 2005 transaction.(b)
    
    Revenue amounts are subject to fluctuations in foreign currency exchange rates.(c)
    
    These revenues are generated in consolidated joint ventures with affiliates and include lease
revenues applicable to minority interests totaling $20,647 and $9,728 for the six months ended
June 30, 2008 and 2007, respectively.(d)
    
    We acquired all or a portion of this investment (or certain
investments included in Other) during 2007.(e)
    
    Tenant operates in the automotive industry. Included in Other are lease revenues from two
additional tenants operating in the automotive industry totaling $1,741 and $1,552 for the six
months ended June 30, 2008 and 2007, respectively.(f)
    
    We placed an expansion at this investment (or certain
investments included in Other) into service in 2007.(g)
    
    Increase was due to CPI-based rent increase. CPA ® :16  Global 6/30/2008 10-Q 18




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##### Table of Contents



Ownership Interest
    
    Six months ended June 30,Lessee
    
    at June 30, 2008
    
    2008
    
    
    2007U-Haul Moving Partners, Inc. and Mercury Partners, L.P.
    
    
    31
    %
    
    $
    14,193
    
    
    $
    14,193OBI A.G. (a) (b)
    
    
    25
    %
    
    
    8,955
    
    
    
    7,432Hellweg Die Profi-Baumarkte GmbH & Co. KG (a) (c) (d)
    
    
    25
    %
    
    
    7,884
    
    
    
    6,821Thales S.A. (a) (d)
    
    
    35
    %
    
    
    7,407
    
    
    
    6,354Pohjola Non-life Insurance Company(a) (d)
    
    
    40
    %
    
    
    4,860
    
    
    
    4,089TietoEnator Plc (a) (d)
    
    
    40
    %
    
    
    4,546
    
    
    
    3,840Police Prefecture, French Government (a) (d)
    
    
    50
    %
    
    
    4,124
    
    
    
    3,313Schuler A.G. (a) (e)
    
    
    33
    %
    
    
    3,514
    
    
    
    Lindenmaier A.G. (a) (e) (f)
    
    
    33
    %
    
    
    1,389
    
    
    
    Actuant Corporation(a) (d)
    
    
    50
    %
    
    
    985
    
    
    
    831Consolidated Systems, Inc.(e)
    
    
    40
    %
    
    
    911
    
    
    
    911$
    58,768
    
    
    $
    47,784
 
 (a)
    
    Revenue amounts are subject to fluctuations in foreign currency exchange rates.(b)
    
    We acquired an interest in an additional property leased to this tenant during 2007.(c)
    
    In April 2007, we acquired an interest in additional properties leased to this tenant that we
consolidate.(d)
    
    Increase was due to CPI-based (or equivalent) rent increases as well as fluctuations in
foreign currency exchange rates.(e)
    
    We acquired our interest in this investment during 2007.(f)
    
    Tenant operates in the automotive industry.   Lease Revenues
   CPA ® :16  Global 6/30/2008 10-Q 19




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##### Table of Contents



Interest Income on Notes Receivable
  Other Real Estate Income
   Depreciation and Amortization
  Property Expenses
  Other Real Estate Expenses
   General and Administrative
   Income from Equity Investments in Real Estate
   CPA ® :16  Global 6/30/2008 10-Q 20




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##### Table of Contents



Other Interest Income
  Minority Interest in Income
   Gain on Foreign Currency Transactions, Derivative Instruments and Other, Net
    Interest Expense
  Provision for Income Taxes
  Net Income
  CPA ® :16  Global 6/30/2008 10-Q 21




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##### Table of Contents



Financial Condition
 Sources and Uses of Cash During the Period
   Operating Activities
 Investing Activities
 Financing Activities
 CPA ® :16  Global 6/30/2008 10-Q 22




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##### Table of Contents



Summary of Financing
  June 30,2008
    
    
    2007Balance:Fixed rate
    
    $
    1,497,295
    
    
    $
    1,204,478Variable rate (a)
    
    
    34,826
    
    
    
    30,667Total
    
    $
    1,532,121
    
    
    $
    1,235,145Percent of total debt:Fixed rate
    
    
    98
    %
    
    
    98
    %Variable rate (a)
    
    
    2
    %
    
    
    2
    %100
    %
    
    
    100
    %Weighted average interest rate at end of period:Fixed rate
    
    
    5.9
    %
    
    
    5.8
    %Variable rate (a)
    
    
    5.4
    %
    
    
    5.1
    %
 
 (a)
    
    Included in variable rate debt at June 30, 2008 is (i) $3,979 that has been effectively
converted to fixed rates through interest rate swap derivative instruments and (ii) $30,847 in
mortgage obligations that currently bear interest at a fixed rate but which have interest rate
reset features that may change the interest rates to then prevailing market fixed rates at
certain points in their term. There are no interest rate resets scheduled during the next
twelve months. Cash Resources
    Cash Requirements
  Off-Balance Sheet Arrangements and Contractual Obligations
  CPA ® :16  Global 6/30/2008 10-Q 23




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##### Table of Contents



Less than
    
    
    
    
    
    
    
    
    
    
    More thanTotal
    
    
    1 year
    
    

13 years
    
    

35 years
    
    
    5 yearsNon-recourse debt  Principal
    
    $
    1,532,121
    
    
    $
    16,324
    
    
    $
    47,473
    
    
    $
    59,103
    
    
    $
    1,409,221Deferred acquisition fees  Principal
    
    
    14,722
    
    
    
    8,764
    
    
    
    5,958
    
    
    
    
    
    
    
    Interest on non-recourse debt and deferred
acquisition fees (a)
    
    
    797,469
    
    
    
    90,689
    
    
    
    176,800
    
    
    
    170,470
    
    
    
    359,510Lending commitments (b)
    
    
    30,893
    
    
    
    30,893
    
    
    
    
    
    
    
    
    
    
    
    Operating and other lease commitments (c)
    
    
    65,611
    
    
    
    1,857
    
    
    
    3,769
    
    
    
    3,830
    
    
    
    56,155$
    2,440,816
    
    
    $
    148,527
    
    
    $
    234,000
    
    
    $
    233,403
    
    
    $
    1,824,886
 
 (a)
    
    Interest on an unhedged variable rate debt obligation was calculated using the applicable
variable interest rate and balance outstanding as of June 30, 2008.(b)
    
    Represents unfunded amounts on an ADC equity arrangement and a commitment to provide a loan
to a developer of a domestic property. The total commitments for the ADC equity arrangement
and the loan are $58,400 and $14,800, respectively, of which $38,651 and $3,656 has been
funded as of June 30, 2008, respectively.(c)
    
    Operating and other lease commitments consist primarily of rent obligations under ground
leases and our share of future 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. Amounts under the cost-sharing agreement are allocated among the
entities based on gross revenues and are adjusted quarterly. Rental obligations under ground
leases are inclusive of minority interest of approximately $11,674.    Ownership
    
    
    
    
    
    Total ThirdLessee
    
    Interest
    
    Total Assets
    
    
    Party Debt
    
    
    Maturity DateThales S.A. (a)
    
    
    35
    %
    
    $
    116,628
    
    
    $
    88,285
    
    
    
    7/2011U-Haul Moving Partners, Inc. and Mercury Partners, LP
    
    
    31
    %
    
    
    310,446
    
    
    
    170,032
    
    
    
    5/2014Actuant Corporation (a)
    
    
    50
    %
    
    
    20,604
    
    
    
    13,694
    
    
    
    5/2014TietoEnator Plc (a)
    
    
    40
    %
    
    
    114,637
    
    
    
    86,179
    
    
    
    7/2014Pohjola Non-life Insurance Company (a)
    
    
    40
    %
    
    
    124,779
    
    
    
    96,275
    
    
    
    1/2015Hellweg Die Profi-Baumarkte GmbH & Co. KG (Hellweg
1) (a) (b)
    
    
    25
    %
    
    
    223,063
    
    
    
    129,206
    
    
    
    5/2015Consolidated Systems, Inc.
    
    
    40
    %
    
    
    17,285
    
    
    
    11,773
    
    
    
    11/2016Lindenmaier A.G. (a) (c)
    
    
    33
    %
    
    
    35,212
    
    
    
    14,164
    
    
    
    10/2017OBI A.G. (a) (c)
    
    
    25
    %
    
    
    258,744
    
    
    
    193,733
    
    
    
    3/2018Police Prefecture, French Government (a)
    
    
    50
    %
    
    
    135,883
    
    
    
    101,179
    
    
    
    8/2020Schuler A.G. (a) (c)
    
    
    33
    %
    
    
    82,275
    
    
    
    
    
    
    
    N/ASoho House Beach House LLC (c) (d)
    
    
    N/A
    
    
    47,484
    
    
    
    
    
    
    
    N/A$
    1,487,040
    
    
    $
    904,520
 CPA ® :16  Global 6/30/2008 10-Q 24




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##### Table of Contents



(a)
    
    Dollar amounts are based on the applicable exchange rate as of June 30, 2008.(b)
    
    Under the  loan agreement, this tenant has an obligation to meet certain loan
covenants, which were not  met as of December 31, 2007. As a result, the lender had retained
rental receipts of $8,501, which it released to the venture in May 2008
as a result of the tenants renewed compliance
with these loan covenants. Our interest in this venture had a carrying value of $20,428 at
June 30, 2008. In April 2007, we acquired an interest in
the Hellweg 2 transaction, which we
consolidate. There is no event of default associated with the Hellweg 2 transaction.(c)
    
    We acquired all or part of our interest in this investment during 2007.(d)
    
    We account for this investment under the equity method of accounting as it constitutes an ADC
equity arrangement (Note 5). Subsequent Event
  CPA ® :16  Global 6/30/2008 10-Q 25




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##### Table of Contents



ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 (in thousands)
 Market Risks
   Interest Rate Risk
       2008
    
    2009
    
    2010
    
    2011
    
    2012
    
    Thereafter
    
    Total
    
    Fair valueFixed rate debt
    
    $
    7,634
    
    
    $
    19,079
    
    
    $
    23,179
    
    
    $
    26,413
    
    
    $
    28,999
    
    
    $
    1,391,991
    
    
    $
    1,497,295
    
    
    $
    1,318,755Variable rate debt
    
    $
    224
    
    
    $
    453
    
    
    $
    458
    
    
    $
    463
    
    
    $
    468
    
    
    $
    32,760
    
    
    $
    34,826
    
    
    $
    33,814
  CPA ® :16  Global 6/30/2008 10-Q 26




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##### Table of Contents



Foreign Currency Exchange Rate Risk
   
 Item 4T.  Controls and Procedures
 Disclosure Controls and Procedures
   Changes in Internal Control over Financial Reporting
  CPA ® :16  Global 6/30/2008 10-Q 27




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##### Table of Contents



PART II
 (in thousands, except share and per share amounts)
 
 Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds
   Maximum number (orTotal number of shares
    
    approximate dollar value)purchased as part of
    
    of shares that may yet beTotal number of
    
    Average price
    
    publicly announced
    
    purchased under the2008 Period
    

shares purchased(a)
    
    paid per share
    

plans or programs(a)
    

plans or programs(a)April
    
    
    
    
    
    
    
    
    
    
    N/A
    
    
    
    N/AMay
    
    
    
    
    
    
    
    
    
    
    N/A
    
    
    
    N/AJune
    
    
    278,661
    
    
    $
    9.30
    
    
    
    N/A
    
    
    
    N/ATotal
    
    
    278,661
 
 (a)
    
    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 our
distribution reinvestment and stock 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 market. 
 Item 4.  Submission of Matters to a Vote of Security Holders
  Name of Director
    
    Shares Voting For
    
    Shares WithheldWm. Polk Carey
    
    
    60,324,894
    
    
    
    1,618,918Gordon F. DuGan
    
    
    60,393,949
    
    
    
    1,549,863Elizabeth P. Munson
    
    
    60,406,717
    
    
    
    1,537,095Richard J. Pinola
    
    
    60,403,549
    
    
    
    1,540,263
  
 Item 6.  Exhibits
 Exhibit No.
    
    Description
    
    Method of Filing10.1
    
    
    Asset Management Agreement dated as of July 1, 2008 between Corporate Property Associates 16  Global Incorporated and W. P. Carey & Co. B.V.
    
    Filed herewith10.2
    
    
    Amendment No. 1 to the Amended and Restated Advisory Agreement dated as of July 1, 2008 between
Corporate Property Associates 16  Global Incorporated and Carey Asset Management Corp.
    
    Filed herewith31.1
    
    
    Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
    
    Filed herewith31.2
    
    
    Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
    
    Filed herewith32
    
    
    Certifications of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002
    
    Filed herewith
 CPA ® :16  Global 6/30/2008 10-Q 28




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##### Table of Contents



SIGNATURES
  Corporate Property Associates 16  Global IncorporatedDate 8/14/2008
    By:
    /s/ Mark J. DeCesarisMark J. DeCesarisManaging Director and acting Chief Financial Officer
(acting Principal Financial Officer)Date 8/14/2008
    By:
    /s/ Thomas J. RidingsThomas J. RidingsExecutive Director and Chief Accounting Officer
(Principal Accounting Officer) CPA ® :16
 Global 6/30/2008 10-Q 29