##### 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 September 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
 (Exact name of registrant as specified in its charter)
 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  (Registrants telephone numbers, including area code)
 þ o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer þ
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ




---



##### 



INDEX
 Page No.PART I  FINANCIAL INFORMATIONItem 1.  Financial Statements*Consolidated Balance Sheets as of September 30, 2008 and December 31, 2007
    
    
    2Consolidated Statements of Income for the three and nine months ended September 30, 2008 and 2007
    
    
    3Consolidated Statements of Comprehensive (Loss) Income for the three and nine months ended
September 30, 2008 and 2007
    
    
    3Consolidated Statements of Cash Flows for the nine months ended September 30, 2008 and 2007
    
    
    4Notes to Consolidated Financial Statements
    
    
    5Item 2.  Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    16Item 3.  Quantitative and Qualitative Disclosures About Market Risk
    
    
    27Item 4T.  Controls and Procedures
    
    
    28PART II  OTHER INFORMATIONItem 2.  Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    29Item 6.  Exhibits
    
    
    29Signatures
    
    
    30EX-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 9/30/2008 10-Q1




---



##### 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)
 September 30, 2008
    
    
    December 31, 2007(NOTE)AssetsReal estate, net
    
    $
    1,691,130
    
    
    $
    1,597,457Net investment in direct financing leases
    
    
    359,738
    
    
    
    343,721Equity investments in real estate
    
    
    178,466
    
    
    
    178,661Real estate under construction
    
    
    
    
    
    
    50,140Notes receivable
    
    
    356,024
    
    
    
    358,079Cash and cash equivalents
    
    
    198,115
    
    
    
    211,759Intangible assets, net
    
    
    168,447
    
    
    
    163,824Funds in escrow
    
    
    85,564
    
    
    
    137,473Other assets, net
    
    
    29,648
    
    
    
    40,755Total assets
    
    $
    3,067,132
    
    
    $
    3,081,869Liabilities and Shareholders EquityLiabilities:Non-recourse debt
    
    $
    1,466,924
    
    
    $
    1,403,299Accounts payable, accrued expenses and other liabilities
    
    
    55,327
    
    
    
    69,419Prepaid and deferred rental income and security deposits
    
    
    85,090
    
    
    
    96,057Due to affiliates
    
    
    19,903
    
    
    
    52,291Distributions payable
    
    
    20,062
    
    
    
    19,432Total liabilities
    
    
    1,647,306
    
    
    
    1,640,498Minority interest in consolidated entities
    
    
    429,465
    
    
    
    420,274Commitments and contingencies (Note 7)Shareholders equity:Common stock, $0.001 par value; 250,000,000 shares authorized;
124,156,048 and 120,567,308 shares issued and outstanding, respectively
    
    
    124
    
    
    
    121Additional paid-in capital
    
    
    1,118,611
    
    
    
    1,085,506Distributions in excess of accumulated earnings
    
    
    (123,411
    )
    
    
    (82,481
    )Accumulated other comprehensive income
    
    
    16,871
    
    
    
    31,9051,012,195
    
    
    
    1,035,051Less, treasury stock at cost, 2,347,540 and 1,500,198 shares, respectively
    
    
    (21,834
    )
    
    
    (13,954
    )Total shareholders equity
    
    
    990,361
    
    
    
    1,021,097Total liabilities and shareholders equity
    
    $
    3,067,132
    
    
    $
    3,081,869
   CPA®:16  Global 9/30/2008 10-Q 2




---



##### 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 30,2008
    
    
    2007
    
    
    2008
    
    
    2007RevenuesRental income
    
    $
    38,866
    
    
    $
    32,073
    
    
    $
    114,535
    
    
    $
    79,344Interest income from direct financing leases
    
    
    7,412
    
    
    
    6,814
    
    
    
    22,089
    
    
    
    19,428Interest income on notes receivable
    
    
    7,571
    
    
    
    6,784
    
    
    
    22,709
    
    
    
    13,400Other real estate income
    
    
    6,929
    
    
    
    18
    
    
    
    17,925
    
    
    
    18Other income
    
    
    575
    
    
    
    564
    
    
    
    2,031
    
    
    
    1,03461,353
    
    
    
    46,253
    
    
    
    179,289
    
    
    
    113,224Operating ExpensesDepreciation and amortization
    
    
    (12,032
    )
    
    
    (8,926
    )
    
    
    (34,885
    )
    
    
    (22,673
    )Property expenses
    
    
    (8,151
    )
    
    
    (5,603
    )
    
    
    (23,377
    )
    
    
    (14,773
    )Other real estate expenses
    
    
    (5,324
    )
    
    
    
    
    
    
    (14,313
    )
    
    
    General and administrative
    
    
    (3,884
    )
    
    
    (2,959
    )
    
    
    (10,020
    )
    
    
    (6,178
    )(29,391
    )
    
    
    (17,488
    )
    
    
    (82,595
    )
    
    
    (43,624
    )Other Income and ExpensesIncome from equity investments in real estate
    
    
    3,026
    
    
    
    2,434
    
    
    
    8,614
    
    
    
    5,705Other interest income
    
    
    1,114
    
    
    
    4,542
    
    
    
    3,851
    
    
    
    16,861Minority interest in income
    
    
    (4,604
    )
    
    
    (11,656
    )
    
    
    (21,019
    )
    
    
    (18,282
    )Loss (gain) on foreign currency transactions, derivative
instruments and other, net
    
    
    (3,371
    )
    
    
    6,211
    
    
    
    (327
    )
    
    
    6,529Interest expense
    
    
    (21,972
    )
    
    
    (18,740
    )
    
    
    (65,328
    )
    
    
    (46,107
    )(25,807
    )
    
    
    (17,209
    )
    
    
    (74,209
    )
    
    
    (35,294
    )Income before income taxes
    
    
    6,155
    
    
    
    11,556
    
    
    
    22,485
    
    
    
    34,306Provision for income taxes
    
    
    (1,151
    )
    
    
    (1,194
    )
    
    
    (3,836
    )
    
    
    (2,603
    )Net Income
    
    $
    5,004
    
    
    $
    10,362
    
    
    $
    18,649
    
    
    $
    31,703Earnings Per Share
    
    $
    0.04
    
    
    $
    0.08
    
    
    $
    0.15
    
    
    $
    0.27Weighted Average Shares Outstanding
    
    
    121,817,667
    
    
    
    117,570,074
    
    
    
    120,899,625
    
    
    
    115,934,112Distributions Declared Per Share
    
    $
    0.1647
    
    
    $
    0.1627
    
    
    $
    0.4926
    
    
    $
    0.4866The accompanying notes are an integral part of these consolidated financial statements.CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (UNAUDITED)(in thousands)Three months ended September 30,
    
    
    Nine months ended September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Net Income
    
    $
    5,004
    
    
    $
    10,362
    
    
    $
    18,649
    
    
    $
    31,703Other Comprehensive (Loss) IncomeChange in unrealized gain on marketable securities
    
    
    23
    
    
    
    114
    
    
    
    14
    
    
    
    9Foreign currency translation adjustment
    
    
    (25,571
    )
    
    
    9,821
    
    
    
    (14,309
    )
    
    
    14,596Change in unrealized (loss) gain on derivative instruments
    
    
    (1,493
    )
    
    
    (445
    )
    
    
    (739
    )
    
    
    1,514(27,041
    )
    
    
    9,490
    
    
    
    (15,034
    )
    
    
    16,119Comprehensive (Loss) Income
    
    $
    (22,037
    )
    
    $
    19,852
    
    
    $
    3,615
    
    
    $
    47,822
  CPA®:16  Global 9/30/2008 10-Q3




---



##### Table of Contents



CORPORATE PROPERTY ASSOCIATES 16  GLOBAL INCORPORATED
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
 (in thousands)
 Nine months ended September 30,2008
    
    
    2007Cash Flows  Operating ActivitiesNet income
    
    $
    18,649
    
    
    $
    31,703Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization including intangible assets and deferred financing costs
    
    
    37,492
    
    
    
    22,862Straight-line rent adjustments and amortization of rent-related intangibles
    
    
    (530
    )
    
    
    (33
    )Income from equity investments in real estate in excess of distributions received
    
    
    1,842
    
    
    
    (1,768
    )Minority interest in income
    
    
    21,019
    
    
    
    18,282Issuance of shares to affiliate in satisfaction of fees due
    
    
    9,406
    
    
    
    20,333Realized gain on foreign currency transactions, net
    
    
    (2,648
    )
    
    
    (320
    )Unrealized loss (gain) on foreign currency and derivative transactions, net
    
    
    3,111
    
    
    
    (6,209
    )Realized gain on sale of real estate
    
    
    (136
    )
    
    
    Increase in accrued interest
    
    
    235
    
    
    
    6,957Decrease in due to affiliates
    
    
    (3,688
    )
    
    
    (6,670
    )Change in other operating assets and liabilities, net
    
    
    11,364
    
    
    
    4,857Net cash provided by operating activities
    
    
    96,116
    
    
    
    89,994Cash Flows  Investing ActivitiesDistributions from equity investments in real estate in excess of equity income
    
    
    8,869
    
    
    
    1,885Contributions to equity investments in real estate
    
    
    (12,682
    )
    
    
    (24,818
    )Acquisitions of real estate and other capital expenditures
    
    
    (125,972
    )
    
    
    (531,469
    )Funding/purchases of notes receivable
    
    
    (4,169
    )
    
    
    (337,764
    )Funds placed in escrow for future acquisition and construction of real estate
    
    
    (18,511
    )
    
    
    (19,188
    )Release of funds held in escrow for acquisition and construction of real estate
    
    
    39,072
    
    
    
    4,084VAT taxes recovered (paid) in connection with acquisitions of real estate
    
    
    3,286
    
    
    
    (885
    )Proceeds from sale of real estate
    
    
    22,886
    
    
    
    Proceeds from maturity of short-term investment
    
    
    
    
    
    
    1,698Receipt of principal payment of mortgage note receivable
    
    
    225
    
    
    
    215Payment of deferred acquisition fees to affiliate
    
    
    (29,546
    )
    
    
    Net cash used in investing activities
    
    
    (116,542
    )
    
    
    (906,242
    )Cash Flows  Financing ActivitiesDistributions paid
    
    
    (58,949
    )
    
    
    (53,367
    )Distributions paid to minority interest partners
    
    
    (28,511
    )
    
    
    (296,838
    )Contributions from minority interest partners
    
    
    406
    
    
    
    319,773Proceeds from mortgages and notes payable
    
    
    100,212
    
    
    
    710,965Scheduled payments of mortgage principal
    
    
    (11,746
    )
    
    
    (7,845
    )Prepayment of note payable
    
    
    (4,312
    )
    
    
    Deferred financing costs and mortgage deposits, net of deposits refunded
    
    
    (450
    )
    
    
    (463
    )Proceeds from issuance of shares, net of costs of raising capital
    
    
    23,702
    
    
    
    23,155Purchase of treasury stock
    
    
    (7,880
    )
    
    
    (5,461
    )Net cash provided by financing activities
    
    
    12,472
    
    
    
    689,919Change in Cash and Cash Equivalents During the PeriodEffect of exchange rate changes on cash
    
    
    (5,690
    )
    
    
    483Net decrease in cash and cash equivalents
    
    
    (13,644
    )
    
    
    (125,846
    )Cash and cash equivalents, beginning of period
    
    
    211,759
    
    
    
    464,223Cash and cash equivalents, end of period
    
    $
    198,115
    
    
    $
    338,377
  CPA®:16  Global 9/30/2008 10-Q4




---



##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 Note 1. Business
  Note 2. Basis of Presentation
  Basis of Consolidation
     CPA®:16  Global 9/30/2008 10-Q5




---



##### Table of Contents



Notes to Consolidated Financial Statements
  Information about International Geographic Areas
  Reclassifications and Revisions
  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
    
    September 30, 2008
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Assets:Marketable securities
    
    $
    2,227
    
    
    $
    
    
    
    $
    
    
    
    $
    2,227Derivative assets
    
    
    3,556
    
    
    
    
    
    
    
    
    
    
    
    3,556$
    5,783
    
    
    $
    
    
    
    $
    
    
    
    $
    5,783Liabilities:Derivative liabilities
    
    $
    81
    
    
    $
    
    
    
    $
    81
    
    
    $
    
 CPA®:16  Global 9/30/2008 10-Q6




---



##### Table of Contents



Notes to Consolidated Financial Statements
  Fair Value Measurements Using Significant Unobservable Inputs (Level 3 only)Marketable
    
    
    Derivative
    
    
    
    
    
    
    Marketable
    
    
    DerivativeSecurities
    
    
    Assets
    
    
    Total Assets
    
    
    Securities
    
    
    Assets
    
    
    Total AssetsThree months ended September 30, 2008
    
    
    Nine months ended September 30, 2008Beginning balance
    
    $
    2,280
    
    
    $
    8,141
    
    
    $
    10,421
    
    
    $
    2,438
    
    
    $
    6,246
    
    
    $
    8,684Total gains or losses (realized and
unrealized):Included in earnings
    
    
    
    
    
    
    (4,184
    )
    
    
    (4,184
    )
    
    
    
    
    
    
    (2,735
    )
    
    
    (2,735
    )Included in other comprehensive income
    
    
    23
    
    
    
    (401
    )
    
    
    (378
    )
    
    
    14
    
    
    
    45
    
    
    
    59Amortization and accretion
    
    
    (76
    )
    
    
    
    
    
    
    (76
    )
    
    
    (225
    )
    
    
    
    
    
    
    (225
    )Purchases, issuances, and settlements
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Ending balance
    
    $
    2,227
    
    
    $
    3,556
    
    
    $
    5,783
    
    
    $
    2,227
    
    
    $
    3,556
    
    
    $
    5,783The 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
    
    $
    
    
    
    $
    (4,184
    )
    
    $
    (4,184
    )
    
    $
    
    
    
    $
    (2,735
    )
    
    $
    (2,735
    )
  SFAS 159
  Recent Accounting Pronouncements
 SFAS 141R
  SFAS 160
  SFAS 161
  CPA®:16  Global 9/30/2008 10-Q7




---



##### Table of Contents



Notes to Consolidated Financial Statements
  FSP 142-3
  EITF 03-6-1
  Note 3. Agreements and Transactions with Related Parties
  st ®
 CPA®:16
 Global 9/30/2008 10-Q8




---



##### Table of Contents



Notes to Consolidated Financial Statements
      ® ® ®
 Note 4. Real Estate
  September 30, 2008
    
    
    December 31, 2007Land
    
    $
    352,575
    
    
    $
    338,639Buildings
    
    
    1,409,242
    
    
    
    1,301,396Less: Accumulated depreciation
    
    
    (70,687
    )
    
    
    (42,578
    )$
    1,691,130
    
    
    $
    1,597,457
 CPA®:16  Global 9/30/2008 10-Q9




---



##### Table of Contents



Notes to Consolidated Financial Statements
   Note 5. Equity Investments in Real Estate
   CPA®:16  Global 9/30/2008 10-Q10




---



##### Table of Contents



Notes to Consolidated Financial Statements
  Ownership Interest
    
    
    Carrying ValueLessee
    
    at September 30, 2008
    
    
    September 30, 2008
    
    
    December 31, 2007Equity Investments in Real Estate:U-Haul Moving Partners, Inc. and Mercury Partners, LP
    
    
    31
    %
    
    $
    35,061
    
    
    $
    34,919Schuler A.G. (a)
    
    
    33
    %
    
    
    24,523
    
    
    
    25,537Hellweg Die Profi-Baumarkte GmbH & Co. KG (Hellweg 1) (a)
    
    
    25
    %
    
    
    16,281
    
    
    
    18,449Police Prefecture, French Government (a)
    
    
    50
    %
    
    
    13,731
    
    
    
    14,601OBI A.G. (a)
    
    
    25
    %
    
    
    11,875
    
    
    
    13,251TietoEnator Plc (a)
    
    
    40
    %
    
    
    9,652
    
    
    
    10,573Pohjola Non-life Insurance Company (a)
    
    
    40
    %
    
    
    8,290
    
    
    
    10,442Lindenmaier A.G. (a)
    
    
    33
    %
    
    
    6,317
    
    
    
    6,218Actebis Peacock GmbH. (a) (c)
    
    
    30
    %
    
    
    6,115
    
    
    
    Actuant Corporation (a)
    
    
    50
    %
    
    
    2,936
    
    
    
    2,761Consolidated Systems, Inc.
    
    
    40
    %
    
    
    2,174
    
    
    
    2,274Thales S.A. (a)
    
    
    35
    %
    
    
    1,555
    
    
    
    5,814138,510
    
    
    
    144,839ADC Equity Arrangement:Soho House Beach House LLC (b)
    
    
    N/A
    
    
    
    39,956
    
    
    
    33,822$
    178,466
    
    
    $
    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 September 30, 2008 and December 31, 2007, we had
funded $40.1 million and $31.1 million, respectively, of our total commitment of $58.4
million.(c)
    
    We acquired our interest in this investment during the third quarter of 2008.  September 30, 2008
    
    
    December 31, 2007Assets
    
    $
    1,413,890
    
    
    $
    1,388,446Liabilities
    
    
    (933,997
    )
    
    
    (924,421
    )Partners and members equity
    
    $
    479,893
    
    
    $
    464,025
 Three months ended September 30,
    
    
    Nine months ended September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Revenue
    
    $
    31,232
    
    
    $
    28,683
    
    
    $
    93,011
    
    
    $
    79,228Expenses
    
    
    (23,131
    )
    
    
    (21,250
    )
    
    
    (68,350
    )
    
    
    (59,883
    )Impairment charges (b)
    
    
    (13,214
    )
    
    
    
    
    
    
    (13,214
    )
    
    
    Net (loss) income
    
    $
    (5,113
    )
    
    $
    7,433
    
    
    $
    11,447
    
    
    $
    19,345Our share of income from equity
investments in real estate
(a)
    
    $
    3,026
    
    
    $
    2,434
    
    
    $
    8,614
    
    
    $
    5,705
 
 (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.(b)
    
    During the third quarter of 2008, one of our equity investees incurred an impairment charge
of $13.2 million (for the entire venture, not our proportionate share) on two vacant French
properties in order to reduce the properties carrying values to their estimated fair values. CPA®:16  Global 9/30/2008 10-Q11




---



##### Table of Contents



Notes to Consolidated Financial Statements
 Note 6. Acquisitions of Real Estate-Related Investments
  Real Estate Acquired
   Hellweg 2 Investment
   Equity Investments in Real Estate Acquired
    Mortgage Notes Receivable Acquired
  CPA®:16  Global 9/30/2008 10-Q12




---



##### Table of Contents



Notes to Consolidated Financial Statements
 Real Estate Under Construction
  Note 7. Commitments and Contingencies
  Maryland Securities Commission
  Note 8. Risk Management and Use of Derivative Financial Instruments
 Risk Management
  Use of Derivative Financial Instruments
   Interest Rate Swaps
    CPA®:16  Global 9/30/2008 10-Q13




---



##### Table of Contents



Notes to Consolidated Financial Statements
   Embedded Credit Derivative
  Stock Warrants
   Foreign Currency Exchange
  Concentration of Credit Risk
   CPA®:16  Global 9/30/2008 10-Q14




---



##### Table of Contents



Notes to Consolidated Financial Statements
   Note 9. Income Taxes
      CPA®:16  Global 9/30/2008 10-Q15




---



##### Table of Contents



ITEM 2.  MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  Business Overview
  Highlights
 Financial Highlights
 -
    
    Total revenues for the third quarter of 2008 were $61.4 million, compared to $46.3
million in the third quarter of 2007, and $179.3 million for the nine months ended
September 30, 2008, compared to $113.2 million 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 was $5 million for the third quarter of 2008, compared to $10.4 million in
the third quarter of 2007, and $18.6 million for the nine months ended September 30, 2008,
compared to $31.7 million 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 nine months ended September 30, 2008 was
$96.1 million, compared to $90 million for the same period of 2007.-
    
    Our quarterly cash distribution increased to $0.1647 per share for the third quarter of
2008, or $0.66 per share on an annualized basis.
  Fund Highlights
 Investment Activity
 Financing Activity
 Current Trends
   CPA®:16  Global 9/30/2008 10-Q16




---



##### Table of Contents



Investment Opportunities
   Financing Conditions
   Credit Conditions/Commercial Real Estate
  Corporate Defaults
    CPA®:16  Global 9/30/2008 10-Q17




---



##### Table of Contents



Competition
  CPI
  Exchange Rate Movements
   Nine months ended September 30,2008
    
    2007Total investments(a)
    
    $
    192,209
    
    
    $
    909,473Number of investments
    
    
    6
    
    
    
    14Average investment size
    
    $
    32,035
    
    
    $
    64,962Percentage of international investments
    
    
    69
    %
    
    
    60
    %
 
 (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. CPA®:16  Global 9/30/2008 10-Q18




---



##### Table of Contents



Results of Operations
  Nine months ended September 30,2008
    
    
    2007Rental income
    
    $
    114,535
    
    
    $
    79,344Interest income from direct financing leases
    
    
    22,089
    
    
    
    19,428$
    136,624
    
    
    $
    98,772
  Nine months ended September 30,Lessee
    
    2008
    
    
    2007Hellweg Die Profi-Baumarkte GmbH & Co. KG (Hellweg 2) (a) (b) (c)
    
    $
    28,845
    
    
    $
    16,561Telcordia Technologies, Inc. (d)
    
    
    6,943
    
    
    
    6,805Berry Plastics Corporation (e)
    
    
    4,991
    
    
    
    Nordic Cold Storage LLC (e)
    
    
    4,676
    
    
    
    4,010Fraikin SAS (b) (e)
    
    
    4,592
    
    
    
    4,125The Talaria Company (Hinckley) (c)
    
    
    3,725
    
    
    
    3,736International Aluminum Corp. and United States Aluminum of Canada Ltd. (b) (e)
    
    
    3,312
    
    
    
    1,303LFD Manufacturing Ltd., IDS Logistics (Thailand) Ltd. and IDS Manufacturing SDN BHD (b) (d)
    
    
    3,131
    
    
    
    2,704MetoKote Corporation, MetoKote Canada Limited and MetoKote de Mexico (b) (d) (f)
    
    
    3,100
    
    
    
    2,950Huntsman International, LLC
    
    
    3,011
    
    
    
    3,011Ply Gem Industries, Inc. (b)
    
    
    2,859
    
    
    
    2,755Gortz & Schiele GmbH & Co. and Goertz & Schiele Corporation (b) (c) (f) (g)
    
    
    2,772
    
    
    
    2,510Performance Fibers GmbH(b)
    
    
    2,749
    
    
    
    2,438TRW Vehicle Safety Systems Inc. (f)
    
    
    2,676
    
    
    
    2,676Holopack International Corp.(e)
    
    
    2,674
    
    
    
    1,588Bobs Discount Furniture, LLC(h)
    
    
    2,658
    
    
    
    1,661Foss Manufacturing Company, LLC (d)
    
    
    2,627
    
    
    
    2,455Universal Technical Institute of California, Inc. (e)
    
    
    2,564
    
    
    
    700Kings Super Markets Inc.
    
    
    2,562
    
    
    
    2,562Finisar Corporation
    
    
    2,453
    
    
    
    2,453Dicks Sporting Goods, Inc. (c) (h)
    
    
    2,347
    
    
    
    2,236Willy Voit GmbH & Co. Stanz-und Metallwerk (b) (e) (f)
    
    
    2,235
    
    
    
    586Polestar Petty Ltd. (b)
    
    
    2,203
    
    
    
    2,215Other (b) (d) (e) (f) (h)
    
    
    36,919
    
    
    
    26,732$
    136,624
    
    
    $
    98,772
 
 (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)
    
    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 $30.9 million and $18.8 million for the
nine months ended September 30, 2008 and 2007, respectively.(d)
    
    Increase was due to CPI-based rent increase.(e)
    
    We acquired all or a portion of this investment (or certain investments included in Other
in the table above) during 2007.(f)
    
    Tenant operates in the automotive industry. Included in Other are lease revenues from two
additional tenants operating in the automotive industry totaling $2.6 million and $2.4 million
for the nine months ended September 30, 2008 and 2007, respectively.(g)
    
    This tenant filed for bankruptcy protection in Germany in November 2008.(h)
    
    We placed an expansion at this investment (or certain investments included in Other in the
table above) into service in 2007. CPA®:16  Global 9/30/2008 10-Q19




---



##### Table of Contents



Ownership Interest at
    
    
    Nine months ended September 30,Lessee
    
    September 30, 2008
    
    
    2008
    
    
    2007U-Haul Moving Partners, Inc. and Mercury Partners, L.P.
    
    
    31
    %
    
    $
    21,329
    
    
    $
    21,329OBI A.G. (a) (b)
    
    
    25
    %
    
    
    13,373
    
    
    
    11,369Hellweg Die Profi-Baumarkte GmbH & Co. KG (a) (c) (d)
    
    
    25
    %
    
    
    11,760
    
    
    
    10,375Thales S.A. (a) (d)
    
    
    35
    %
    
    
    11,052
    
    
    
    9,639Pohjola Non-life Insurance Company(a) (d)
    
    
    40
    %
    
    
    7,251
    
    
    
    6,214TietoEnator Plc (a) (d)
    
    
    40
    %
    
    
    6,821
    
    
    
    5,858Police Prefecture, French Government (a) (d)
    
    
    50
    %
    
    
    6,247
    
    
    
    5,162Schuler A.G. (a) (e)
    
    
    33
    %
    
    
    5,263
    
    
    
    668Lindenmaier A.G. (a) (e) (f)
    
    
    33
    %
    
    
    2,094
    
    
    
    Actuant Corporation(a) (d)
    
    
    50
    %
    
    
    1,480
    
    
    
    1,269Consolidated Systems, Inc.(e)
    
    
    40
    %
    
    
    1,373
    
    
    
    1,373Actebis Peacock GmbH. (a)(g)
    
    
    30
    %
    
    
    1,088
    
    
    
    $
    89,131
    
    
    $
    73,256
 
 (a)
    
    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.(g)
    
    We acquired our interest in this investment during 2008.   Lease Revenues
  CPA®:16  Global 9/30/2008 10-Q20




---



##### Table of Contents



Interest Income on Notes Receivable
   Other Real Estate Income
   Depreciation and Amortization
  Property Expenses
  Other Real Estate Expenses
   General and Administrative
   CPA®:16  Global 9/30/2008 10-Q21




---



##### Table of Contents



Income from Equity Investments in Real Estate
   Other Interest Income
  Minority Interest in Income
    Gain on Foreign Currency Transactions, Derivative Instruments and Other, Net
   Interest Expense
   CPA®:16  Global 9/30/2008 10-Q22




---



##### Table of Contents



Provision for Income Taxes
  Net Income
  Financial Condition
 Sources and Uses of Cash During the Period
   Operating Activities
 Investing Activities
 Financing Activities
  CPA®:16  Global 9/30/2008 10-Q23




---



##### Table of Contents



Summary
of Financing
  September 30,2008
    
    
    2007Balance:Fixed rate
    
    $
    1,434,837
    
    
    $
    1,341,028Variable rate (a)
    
    
    32,087
    
    
    
    32,481Total
    
    $
    1,466,924
    
    
    $
    1,373,509Percent 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
    %
    
    
    5.2
    %
 
 (a)
    
    Included in variable rate debt at September 30, 2008 is (i) $4 million that has been
effectively converted to fixed rates through interest rate swap derivative instruments and
(ii) $28.1 million in mortgage obligations that bore  interest at a fixed rate but
that  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
   CPA®:16  Global 9/30/2008 10-Q24




---



##### Table of Contents



Cash Requirements
  Off-Balance Sheet Arrangements and Contractual Obligations
  Less than
    
    
    
    
    
    
    
    
    
    
    More thanTotal
    
    
    1 year
    
    
    1-3 years
    
    
    3-5 years
    
    
    5 yearsNon-recourse debt  Principal
    
    $
    1,466,924
    
    
    $
    17,465
    
    
    $
    47,396
    
    
    $
    58,477
    
    
    $
    1,343,586Deferred acquisition fees  Principal
    
    
    15,070
    
    
    
    8,880
    
    
    
    6,190
    
    
    
    
    
    
    
    Interest on non-recourse debt and deferred
acquisition fees (a)
    
    
    747,934
    
    
    
    87,048
    
    
    
    169,441
    
    
    
    163,102
    
    
    
    328,343Lending commitments (b)
    
    
    27,195
    
    
    
    27,195
    
    
    
    
    
    
    
    
    
    
    
    Operating and other lease commitments (c)
    
    
    61,390
    
    
    
    1,759
    
    
    
    3,552
    
    
    
    3,639
    
    
    
    52,440$
    2,318,513
    
    
    $
    142,347
    
    
    $
    226,579
    
    
    $
    225,218
    
    
    $
    1,724,369
 
 (a)
    
    Interest on an unhedged variable rate debt obligation was calculated using the applicable
variable interest rate and balance outstanding as of September 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 $58.4 million and $14.8 million, respectively, of which $40.1 million and
$5.9 million has been funded as of September 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 $10.7 million.    CPA®:16  Global 9/30/2008 10-Q25




---



##### Table of Contents



Ownership
    
    
    
    
    
    
    Total ThirdLessee
    
    Interest
    
    
    Total Assets
    
    
    Party Debt
    
    
    Maturity DateThales S.A. (a)
    
    
    35
    %
    
    $
    92,600
    
    
    $
    79,824
    
    
    7/2011U-Haul Moving Partners, Inc. and Mercury Partners, LP
    
    
    31
    %
    
    
    310,092
    
    
    
    169,140
    
    
    5/2014Actuant Corporation (a)
    
    
    50
    %
    
    
    18,884
    
    
    
    12,464
    
    
    5/2014TietoEnator Plc (a)
    
    
    40
    %
    
    
    104,151
    
    
    
    78,475
    
    
    7/2014Pohjola Non-life Insurance Company (a)
    
    
    40
    %
    
    
    110,195
    
    
    
    87,800
    
    
    1/2015Hellweg Die Profi-Baumarkte GmbH & Co. KG (Hellweg
1) (a) (b)
    
    
    25
    %
    
    
    191,037
    
    
    
    116,594
    
    
    5/2015Actebis Peacock GmbH. (a) (c)
    
    
    30
    %
    
    
    54,661
    
    
    
    32,944
    
    
    7/2015Consolidated Systems, Inc.
    
    
    40
    %
    
    
    17,231
    
    
    
    11,736
    
    
    11/2016Lindenmaier A.G. (a)
    
    
    33
    %
    
    
    32,525
    
    
    
    12,921
    
    
    10/2017OBI A.G. (a)
    
    
    25
    %
    
    
    230,900
    
    
    
    176,428
    
    
    3/2018Police Prefecture, French Government (a)
    
    
    50
    %
    
    
    124,348
    
    
    
    92,369
    
    
    8/2020Schuler A.G. (a)
    
    
    33
    %
    
    
    75,144
    
    
    
    
    
    
    N/ASoho House Beach House LLC (d)
    
    
    N/A
    
    
    
    52,122
    
    
    
    
    
    
    N/A$
    1,413,890
    
    
    $
    870,695
 
 (a)
    
    Dollar amounts are based on the applicable exchange rate as of September 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
$8.5 million, 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
$16.3 million at September 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 part of our interest in this investment during 2008.(d)
    
    We account for this investment under the equity method of accounting as it constitutes an ADC
equity arrangement (Note 5). CPA®:16  Global 9/30/2008 10-Q26




---



##### Table of Contents



ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 Market Risks
   Interest Rate Risk
       2008
    
    2009
    
    2010
    
    2011
    
    2012
    
    Thereafter
    
    Total
    
    Fair valueFixed rate debt
    
    $
    3,833
    
    
    $
    18,542
    
    
    $
    22,432
    
    
    $
    25,565
    
    
    $
    28,052
    
    
    $
    1,336,413
    
    
    $
    1,434,837
    
    
    $
    1,280,614Variable rate debt
    
    $
    104
    
    
    $
    420
    
    
    $
    425
    
    
    $
    430
    
    
    $
    435
    
    
    $
    30,273
    
    
    $
    32,087
    
    
    $
    31,486
  CPA®:16  Global 9/30/2008 10-Q27




---



##### 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 9/30/2008 10-Q28




---



##### Table of Contents



PART II
 
 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)July
    
    
    
    
    
    
    
    
    
    
    N/A
    
    
    
    N/AAugust
    
    
    
    
    
    
    
    
    
    
    N/A
    
    
    
    N/ASeptember
    
    
    337,563
    
    
    $
    9.30
    
    
    
    N/A
    
    
    
    N/ATotal
    
    
    337,563
 
 (a)
    
    Represents shares of our common stock purchased pursuant to our redemption plan, which
we announced in December 2003. Under our redemption plan, we may elect to redeem shares at the
request of our shareholders, 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 6.  Exhibits
 Exhibit No.
    
    Description
    
    Method of Filing31.1
    
    Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
    
    Filed herewith31.2
    
    Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
    
    Filed herewith32
    
    Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
    
    Filed herewith
 CPA®:16  Global 9/30/2008 10-Q29




---



##### Table of Contents



SIGNATURES
  Corporate Property Associates 16  Global IncorporatedDate 11/14/2008
    By:
    /s/ Mark J. DeCesarisMark J. DeCesarisManaging Director and acting Chief Financial Officer

(Principal Financial Officer) Date 11/14/2008
    By:
    /s/ Thomas J. RidingsThomas J. RidingsExecutive Director and Chief Accounting Officer

(Principal Accounting Officer) CPA®:16  Global 9/30/2008 10-Q30