- Company name
- Realty Income
- Sector
- Net lease REIT
- About
- Realty Income is a real estate investment trust (REIT) that owns commercial properties and rents them on long-term net leases. Under a net lease, the tenant pays most of the property costs, such as taxes, insurance and maintenance. At September 30, 2026, it owned or held interests in 15,536 properties, leased to 1,842 clients in 96 industries in the United States and Europe. Occupancy was 98.8%, and the weighted average remaining lease term was about 8.5 years. Its largest clients include Dollar General, 7-Eleven, Walgreens and Family Dollar. Realty Income pays a dividend every month and has raised it for 116 consecutive quarters. It also invests through funds and joint ventures, such as a joint venture in hyperscale data centers in Northern Virginia.
- Thesis
- The market prices Realty Income as a bond-like stock that suffers when interest rates stay high. Realty Income grows by buying properties with borrowed money and new shares, so its growth depends on the spread between property yields and its cost of capital. Interest expense rose to $938 million in the first nine months of 2026 from $847 million a year earlier. AFFO per share grows slowly, by about 4% a year: Realty Income expects $4.45 to $4.46 for 2026. Some large tenants are retailers under pressure, such as pharmacies and discount stores. For the gap to close, three things must be true. Interest rates must fall, or Realty Income must keep buying properties at yields well above its cost of capital, as with the 6.8% initial cash yield on Q3 2026 investments. Occupancy must stay near 99% and rent recapture on re-leased properties must stay above 100%. New growth channels, such as the data center joint ventures and the investment management funds and joint ventures in the United States and Europe, must add to AFFO per share growth. The Q4 2026 report with the 2027 guidance, expected in February 2027, gives the next test and shows the growth rate for next year. If rates fall, the gap can close over the next four to eight quarters. The main reason it may not close is interest rates that stay high, which keep the value of income stocks low.
- Risks
- Higher interest rates increase the cost of new debt and reduce the spread between property yields and the cost of capital. Interest expense rose 11% in the first nine months of 2026. If rates stay high, growth in AFFO per share can slow.
Some large clients are retailers under pressure. Dollar General, Walgreens and Family Dollar together paid about 8.7% of annualized base rent at September 30, 2026. Store closures or bankruptcies can reduce rent and cause impairments, which were $256 million in the first nine months of 2026.
Realty Income now invests in new areas, such as data centers, casinos, investment management funds and European properties. These areas carry different risks, and they can give lower returns than expected.
Realty Income issues new shares to fund growth. If its share price stays low, new shares cost more and reduce the growth in AFFO per share.
- Balance sheet
- Cash: $369M
Debt: $31.7B
Net debt: $31.4B
Net debt / EBITDA: 5.4× (high)
Ratings: Fitch A (stable outlook)
Realty Income funds its properties with unsecured notes, term loans, commercial paper, its credit facilities and new shares. At September 30, 2026, total debt was $31.74 billion and cash was $369 million, so net debt was $31.37 billion. Net debt was 5.4 times annualized pro forma adjusted EBITDAre, which is the ratio the company uses, the same as at June 30, 2026. At September 30, 2026, 93.3% of debt principal had a fixed rate, the average interest rate was 3.8%, and commercial paper was $1.54 billion. Realty Income also had $1.09 billion of expected proceeds from shares sold forward that were not yet settled. In Q3 2026, it issued €600 million of notes due 2032 and $1.0 billion of convertible notes due 2031, and it raised its credit facilities to $5.5 billion, with maturities in April 2029 and July 2030. Liquidity at its share was $5.39 billion at September 30, 2026. Fitch gave it an A rating with a stable outlook in August 2026.
As of Sep 30, 2026.
- Checkpoints
- Nov 2, 2026: Q3 2026 results: AFFO per share and investment yields. Passed. Watch: AFFO per share growth near 4% and occupancy near 99% pass; a cut in 2026 guidance or occupancy below 98% fails. Outcome: AFFO per share rose 3.7% to $1.12, occupancy stayed at 98.8%, and Realty Income raised its 2026 AFFO per share guidance to $4.45 to $4.46.
Feb 2, 2027 (estimate): 2027 AFFO per share guidance. Pending. Watch: 2027 guidance for AFFO per share growth of about 4% or more passes; guidance for lower growth fails.
- Recent events
- Nov 2, 2026: Realty Income reported Q3 2026 results. AFFO per share rose 3.7% to $1.12. Net income was $404 million, or $0.43 per share. It invested $2.6 billion, or $2.2 billion at its share, at an initial cash yield of 6.8%. Occupancy was 98.8%, and the rent recapture rate was 103.5%. It raised its 2026 AFFO per share guidance to $4.45 to $4.46 and kept its target of $10.0 billion of investments. In September 2026, KKR invested €528 million for 49% of a new joint venture with 54 net lease properties in four European countries, and Realty Income raised its dividend for the 116th consecutive quarter, to an annual rate of $3.258 per share.
Aug 20, 2026: Realty Income amended two term loan agreements. The Wells Fargo term loan of $500 million is now due August 20, 2027.
Aug 14, 2026: Realty Income issued $1.0 billion of 3.750% convertible senior notes due 2031. The initial purchasers had an option to buy up to $125 million more.
Aug 5, 2026: Realty Income reported Q2 2026 results. AFFO per share rose 3.8% to $1.09. Net income was $344 million, or $0.37 per share. It invested $2.6 billion, or $2.1 billion at its share, at an initial cash yield of 7.3%. Occupancy was 98.8%, and the rent recapture rate was 102.7%. It raised its 2026 AFFO per share guidance to $4.44 to $4.45. On August 3, 2026, Fitch Ratings gave Realty Income an issuer rating of A with a stable outlook. In the 10-Q, Realty Income said that its new joint venture with Cloud Capital expects to invest up to $1.4 billion for a 45% stake in three Northern Virginia data centers worth more than $6.0 billion, with leases of 15 to 20 years. It closed on the first asset after June 30, 2026.
Jul 10, 2026: Realty Income amended its unsecured revolving credit facilities and raised their size to $5.5 billion from $4.0 billion. They have two $2.75 billion tranches that mature in April 2029 and July 2030. It also raised its commercial paper programs to $5.5 billion.
Jul 7, 2026: Realty Income closed an offer of €600 million of 3.625% notes due 2032.