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The following table
sets forth certain information regarding the properties owned by Realty
Income as of January 1, 1999, classified according to the business of
the respective tenants.
| (1) |
Annualized
rent is calculated by multiplying the monthly contractual base rent
as of January 1, 1999 for each of the properties by 12 and adding
the 1998 historical percentage rent, which totaled $1.7 million
(i.e., additional rent calculated as a percentage of the tenant’s
gross sales above a specified level). For the properties under construction,
an estimated contractual base rent is used based upon the estimated
total costs of each property. |
Description
of Leasing Structure
At January 1, 1998, approximately 99% of the Company’s properties were
leased pursuant to net leases. In most cases, the leases:
| • |
Were for initial
terms of from 10 to 20 years and the tenant has an option to extend
the initial term; |
| • |
In general, the leases require the tenant to pay property taxes,
insurance, and expenses of maintaining the property; |
| • |
Generally
provide for a minimum base rent plus future increases (typically
subject to ceilings) based on increases in the consumer price index,
additional rent based upon the tenant’s gross sales above a specified
level (i.e., percentage rent), or fixed increases. Where leases
provide for rent increases based on increases in the consumer price
index, generally such increases permanently become part of the base
rent. Where leases provide for percentage rent, this additional
rent is typically payable only if the tenant’s gross sales for a
given period (usually one year) exceed a specified level, and then
is typically calculated as a percentage of only the amount of gross
sales in excess of such level. |
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