ESCONDIDO, CALIFORNIA, February 2, 2005 — Realty Income Corporation (Realty Income), The Monthly Dividend Company®, (NYSE: O) today announced operating results for the fourth quarter and year ended December 31, 2004.

• Revenue increased 14.5% to $45.8 million
• Funds from Operations (FFO) available to common stockholders decreased 8.0% to $28.8 million
• FFO per diluted common share decreased 14.3% to $0.36 per share
• FFO per diluted share was reduced by a $0.03 per share non-cash charge for property impairments
• Net income available to common stockholders per diluted common share decreased to $0.31 per share
• Same store rents increased 1.3% to $33.64 million
• Invested $37.3 million in 12 additional properties
• Increased the monthly dividend amount for the 21^th consecutive quarter to an annual rate of $1.32 per share
• Celebrated 10 years of trading on the New York Stock Exchange (NYSE)

• Revenue increased 20.9% to $175.6 million
• FFO available to common stockholders increased 14.3% to $118.2 million
• FFO per diluted common share increased 3.4% to $1.50 per share
• FFO per diluted common share was reduced by $0.08 per share in non-cash charges for property impairments and origination costs on redeemed preferred stock
• Net income available to common stockholders per diluted common share increased to $1.15 per share
• Same store rents increased 1.8% to $132.31 million
• Invested $215.3 million in 194 properties during 2004
• Portfolio occupancy was 97.9% at the end of the year
• Paid the 413^th consecutive monthly dividend in December 2004
• Raised $71.6 million in a common stock offering
• Redeemed all outstanding shares of Class B and C Preferred shares
• Raised approximately $127.9 million in a Class D Preferred stock offering
• Total return to stockholders was 32.7% in 2004

Financial Results

Revenue Increases
Realty Income's revenue for the quarter ended December 31, 2004 increased 14.5% to $45.8 million as compared to $40.0 million for the same quarter in 2003.

Revenue for the year ended December 31, 2004 increased 20.9% to $175.6 million from $145.3 million for the year ended 2003.

Net Income Available to Common Stockholders
Net income available to common stockholders for the quarter ended December 31, 2004 was $24.3 million as compared to $25.1 million for the same period in 2003. On a diluted per common share basis, net income for the quarter was $0.31 per share as compared to $0.34 per share for the same period in 2003.

Net income available to common stockholders, for the year ended December 31, 2004, was $90.2 million as compared to $76.7 million in 2003. On a diluted per common share basis, net income was $1.15 per share in 2004 as compared to $1.08 per share in 2003. During 2004, net income available to common stockholders included one-time, non-cash charges totaling $3.8 million, or approximately $0.05 per share. These non-cash charges represent the Class B and Class C preferred stock original issuance costs that were paid in 1999 and recorded as a reduction to net income available to common stockholders in 2004 when the stock was redeemed.

The calculation to determine net income for a real estate company includes gains from the sale of investment properties and impairments. The amount of gains on property sales and impairments varies from quarter to quarter. This variance can significantly impact net income.

During the fourth quarter of 2004, income from continuing operations available to common stockholders increased by $0.01 to $0.25 per diluted share as compared to $0.24 per diluted share for the same period in 2003.

During 2004, income from continuing operations available to common stockholders increased by $0.02 to $0.90 per diluted share as compared to $0.88 per diluted share in 2003.

FFO Available to Common Stockholders
For the quarter ended December 31, 2004, FFO decreased 8.0% to $28.8 million as compared to $31.3 million for the same quarter in 2003. FFO per diluted common share decreased 14.3% to $0.36 per share for the quarter ended December 31, 2004 as compared to $0.42 per share for the same period in 2003. FFO per diluted common share was reduced by a $0.03 per share non-cash charge for property impairment.

For the year ended December 31, 2004, FFO increased 14.3% to $118.2 million as compared to $103.4 million in 2003. FFO per diluted common share increased 3.4% to $1.50 per share as compared to $1.45 per share in 2003. FFO per diluted common share for 2004 was reduced by $0.08 per share in non-cash charges for property impairments and origination costs on redeemed preferred stock. For 2004, non-cash charges for property impairments equated to $0.03 in FFO per diluted common share and non-cash charges for origination costs on redeemed preferred stock equated to $0.05 in FFO per diluted common share.

In addition, the comparable FFO figures for the quarter and year ended December 31, 2003 have been adjusted to reflect additional impairments on the sale of certain properties during these periods. These additional impairments relate to properties where a contract for the sale of a property and the closing of the sale transaction occurred during the same quarterly period. As these transactions were contracted for and closed during the same quarter, losses on the sales were booked and reflected in the Company's financial statements but no impairments were booked on these properties in the Company's calculation of FFO. The Company now believes that such impairments on property sales should be deducted from the calculation of FFO. FFO for the quarter and year ended December 31, 2003 was reduced by $240,000 or $0.003 per share and $672,000 or $0.009 per share, respectively. The impact from these transactions were previously included in the Company's calculation for net income and, as such, have no impact on the Company's previously reported consolidated statements of income or consolidated balance sheets for these periods.

The Company considers FFO to be an appropriate supplemental measure of a Real Estate Investment Trust's (REITs) operating performance as it is based on net income analysis of property portfolio performance that excludes non-cash items such as depreciation. FFO is an alternative, non-GAAP, measure that is also considered to be a good indicator of a company's ability to generate income to pay dividends. Realty Income defines FFO consistent with the National Association of Real Estate Investment Trust's (NAREIT) definition as net income available to common stockholders plus depreciation and amortization of assets uniquely significant to the real estate industry.

Dividend Information
In December 2004, Realty Income announced the 29^th consecutive quarterly increase in the amount of the monthly dividend on its common stock. This marked the 32^nd increase in the amount of the dividend since the Company's listing on the New York Stock Exchange in 1994. The stock-split adjusted monthly dividend amount was increased to $0.11 per share from $0.109375 per share for an annualized amount of $1.32 per share. Through December 2004, on an annualized basis, the common stock dividend increased 10.0%.

During 2004, Realty Income paid twelve monthly dividends totaling $1.24125 per common share and increased the amount of the monthly dividend five times. Throughout its 36-year operating history, the Company has paid 413 consecutive monthly dividends. The Company continues its 36-year history of declaring and paying dividends every month.

During 2004, the Company also paid dividends totaling $1.01563 per share on its Class B preferred stock, $1.37882 per share on its Class C preferred stock, and $1.01406 per share on its Class D preferred stock.

Real Estate Portfolio Update
As of December 31, 2004, Realty Income's portfolio of freestanding, single-tenant, retail properties consisted of 1,533 properties located in 48 states, leased to 93 retail chains doing business in 30 retail industries. The properties are leased under long-term, net leases with a weighted average remaining lease term of approximately 12.0 years.

Portfolio Management Activities
The Company's portfolio of retail real estate, owned primarily under 15- to 20-year net leases, continues to perform well and provide dependable lease revenue supporting the payment of monthly dividends. As of December 31, 2004, portfolio occupancy was 97.9% with only 32 properties available for lease out of 1,533 properties in the portfolio.

Rent Increases
Same store rents, on the 1,052 properties under lease during the three months ended December 31, 2004 and 2003, increased 1.3% to $33.64 million from $33.21 million in 2003. Same store rents on the same 1,052 properties under lease during the years ended December 31, 2004 and 2003, increased 1.8% to $132.31 million compared to $129.94 million in 2003.

Property Acquisitions
During the fourth quarter, Realty Income invested $37.3 million in 12 new properties and properties under development with an initial average contractual lease yield of 9.1%. The 12 new properties are located in nine states and are 100% leased under net-lease agreements with an initial average lease length of 20.4 years. They are leased to seven different retail chains in six industries: automotive service, automotive collision service, health and fitness, motor vehicle dealership, restaurant and sporting goods.

For the year ended December 31, 2004, Realty Income and its wholly-owned subsidiary, Crest Net Lease, Inc., invested $215.3 million in 194 new properties and properties under development. Realty Income invested $193.8 million in 172 new properties and properties under development with an initial average contractual lease yield of 9.5%. The 172 new properties are located in 18 states and are 100% leased under net-lease agreements with an initial average lease length of 17.5 years. They are leased to 12 different retail chains in seven industries: automotive service, automotive collision service, convenience store, health and fitness, motor vehicle dealership, restaurant and sporting goods. Crest Net Lease invested $21.5 million in 22 new properties and properties under development.

Property Dispositions
Realty Income continued to successfully execute its asset disposition program. The objective of the program is to sell assets when the Company believes the reinvestment of the sale proceeds will generate higher returns, enhance the credit quality of the Company's real estate portfolio or increase the average lease length.

During the fourth quarter ended December 31, 2004, Realty Income sold 16 properties and executed a partial sale of land from three properties for $14.8 million, which resulted in a gain on sales from 14 properties of $5.9 million and impairments on two properties of $1.3 million. The properties sold consisted of: five child care locations, one consumer electronics store, six convenience stores and four restaurants. The proceeds were, or will be, used to pay down the Company's acquisition credit facility and invest in new properties.

For the year ended December 31, 2004, Realty Income sold 43 properties and executed a partial sale of land from three properties for $35.4 million, which resulted in a gain on sales for 38 properties of $12.7 million and impairments on five properties of $1.7 million. The properties sold consisted of: one automotive service location, 16 child care locations, three consumer electronics stores, 10 convenience stores, and 13 restaurants. The proceeds were, or will be, used to pay down the Company's acquisition credit facility and invest in new properties.

Other Activities

Issued Common Stock
In March 2004, Realty Income issued 1.6 million common shares (prior to the stock split) priced at $44.75 per share. Gross proceeds from the offering were $71.6 million. The net proceeds from this offering were used to repay borrowings on the Company's $250 million unsecured acquisition credit facility.

Redeemed Class B and Class C Preferred Shares
In June 2004, Realty Income redeemed all 2,745,700 shares outstanding of the Company's 9-3/8% Class B Cumulative Redeemable Preferred stock. In July 2004, the Company redeemed all 1,380,000 shares outstanding of the Company's 9-1/2% Class C Cumulative Redeemable Preferred stock.

Issued Class D Preferred Shares
Realty Income raised approximately $127.9 million by issuing 5.1 million shares of 7-3/8% Class D Cumulative Redeemable Preferred stock with dividends paid monthly. The shares were issued in an offering of 4.0 million preferred shares on May 27, 2004 priced at $25.00 per share and in an additional offering of 1.1 million preferred shares priced at $25.4311 per share on October 19, 2004. The net proceeds from both offerings were used to redeem all outstanding shares of the Company's Class B and C preferred shares, repay borrowings on the Company's $250 million unsecured acquisition credit facility and for other general corporate purposes.

Stock Split
Realty Income completed a 2-for-1 stock split after the market close on December 31, 2004. As a result of the stock split, total outstanding shares were increased from approximately 39.65 million shares to 79.30 million shares.

Crest Net Lease
Crest Net Lease is a wholly-owned subsidiary of Realty Income focused on acquiring and subsequently marketing net-leased properties for sale. During the fourth quarter ended December 31, 2004, Crest sold eight properties for $8.3 million and reported a gain on sales of $0.7 million.

For the year ended December 31, 2004, Crest sold 51 properties for $75.0 million and reported a gain on sales of $10.3 million. Crest also invested $21.5 million in 22 new properties and properties under development. As of the end of the year Crest carried a property inventory of $10.1 million, which consists of eight properties held for sale.

Management's long-term goal is for Crest to carry an average inventory of approximately $20 to $25 million in properties. Crest generates an earnings spread on the difference between the lease payments it receives on the properties held in inventory and the cost of the capital used to acquire properties. Management believes that at this level of inventory, rental revenue will exceed the ongoing operating expenses of Crest without any property sales.

Crest's contribution to Realty Income's FFO depends on the timing and number of property sales, if any, in a given quarter. As such, Crest's contribution can fluctuate and add volatility to the Company's reported FFO on a comparable quarterly and annualized basis. During the fourth quarter ended December 31, 2004, Crest generated $598,000, or $0.01 per diluted common share, in FFO (and net income) for Realty Income as compared to $4.1 million, or $0.06 per diluted common share generated in the fourth quarter of 2003. For the year ended 2004, Crest generated $7.8 million, or $0.10 per diluted common share in FFO (and net income) for Realty Income as compared to $4.6 million, or $0.06 per diluted common share during 2003.

CEO Comments on Year-to-Date Operating Results

Commenting on Realty Income's financial results and real estate operations, Tom A. Lewis, Chief Executive Officer stated, “We are pleased to report that 2004 was an excellent year for operations of The Monthly Dividend Company®. We ended the year with increases in revenue, earnings, dividends and in the size and diversification of the Company's real estate portfolio. We also enjoyed five dividend increases and saw the price of our common stock grow from $40.00 at the beginning of the year to $50.58 at the end of the year (prior to the stock split). Including dividends paid and share price increases, the total return to shareholders for 2004 was a healthy 32.7%.

“We were also gratified that we enjoyed another good year in property acquisitions. During 2004, Realty Income and Crest Net invested $215.3 million in 194 new properties. We continue to enjoy attractive lease yields on new acquisitions even in the current low interest rate environment. At the same time we were pleased with the Company's continued access to the public capital markets during 2004. We issued both common and preferred shares over the course of the year, which allowed us to access capital to continue our growth while maintaining one of the most conservative balance sheets in our industry. We also redeemed all outstanding Preferred B and C shares, which will generate $2.1 million in annual savings based on the difference in the amount of the dividend paid on the new Preferred D shares in comparison to the amount of the dividend previously paid on the Preferred B and C shares.

“The Company's core portfolio of real estate exhibited stable occupancy, ending the year with 97.9% of our properties occupied. We believe this excellent performance is due to our continued focus on acquiring properties leased to retailers that sell basic human needs goods and services which consumers use every day. Finally, our subsidiary, Crest Net Lease, continued to perform well, contributing $7.8 million, or $0.10 per share, to Realty Income's funds from operations in 2004.

“Crest's ability to acquire and subsequently sell properties has increased Realty Income's overall ability to acquire large portfolios of properties and maintain excellent diversification by industry, tenant and geographic location in our core portfolio. While Crest's contribution to the Company's net income and FFO have been substantial, its dependence on property sales to generate earnings will add volatility to our results on a quarter to quarter basis. For example, while Crest generated $0.10 of FFO per diluted common share for Realty Income in 2004 as compared to $0.06 in 2003, during the fourth quarter of 2004, Crest's contribution to Realty Income's FFO per share was $0.01 per share as compared to $0.06 per share in the fourth quarter of 2003. We expect that Crest's contribution to FFO will impact the Company positively over the coming years, but will continue to be volatile on a quarterly comparative basis.

“Looking forward to 2005, we are optimistic about the Company's operations and financial performance for the year ahead. We enter the year with strong portfolio occupancy, a clean and uncomplicated balance sheet, access to acquisition opportunities as well as capital to fund our growth. As such, we believe we should be able to continue to deliver solid operational performance during 2005.

“We are fortunate that, as The Monthly Dividend Company®, we have continued to offer a dependable source of monthly income to our shareholders throughout market swings and economic uncertainties. We continue to grow our FFO at a rate that has allowed us to provide regular dividend increases as well as solid dividend coverage and a conservative FFO payout ratio. Based on our continued strong performance in 2004, we were able to raise the dividend five times during the year, for a total increase in the amount of the annualized dividend of 10%.”

Earnings Commentary

Realty Income's FFO per common share has historically tended to be stable and fairly predictable because of the long-term leases that are the primary source of the Company's revenue. There are, however, several factors that can cause FFO per common share to vary from levels that have been anticipated by the Company. These factors include, but are not limited to, changes in interest rates, occupancy rates, periodically accessing the capital markets, the level and timing of property acquisitions and dispositions, lease rollovers, the general real estate market, the economy, charges for property impairments, and the operations of Crest Net Lease.

2005 Estimates
Management estimates that FFO per common share for 2005 should range from $1.59 to $1.62, which would equate to an increase of approximately 6% to 8% over 2004 FFO per share of $1.50. FFO for 2005 is based on an estimated diluted net income per share range of $1.11 to $1.14, adjusted (in accordance with NAREIT's definition of FFO) for estimated real estate depreciation of $0.54 and potential gain on sales of investment properties of $0.06 per share.

Management further estimates Crest Net Lease could contribute between $0.03 to $0.05 per share to Realty Income's FFO (and net income) during 2005. Crest's primary business is the purchase and sale of properties for a profit. These sales may occur at various times during the course of the year, which could cause FFO, in certain quarters, to fluctuate from normal levels.

The Company does not intend to provide quarterly estimates of FFO. Absent any changes in annual FFO guidance at the end of each quarter, it may be presumed that the Company's overall estimate for the year has not changed.

Forward-Looking Statements
Statements in this press release that are not strictly historical are “forward-looking” statements. Forward-looking statements involve known and unknown risks, which may cause the Company's actual future results to differ materially from expected results. These risks include, among others, general economic conditions, local real estate conditions, the availability of capital to finance planned growth, property acquisitions and the timing of these acquisitions, charges for property impairments, the outcome of any legal proceedings to which the Company is a party, and the profitability of the Company's subsidiary, Crest Net Lease, as described in the Company's filings with the Securities and Exchange Commission. Consequently, such forward-looking statements should be regarded solely as reflections of the Company's current operating plans and estimates. Actual operating results may differ materially from what is expressed or forecast in this press release. The Company undertakes no obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date these statements were made.

Realty Income is The Monthly Dividend Company®, a New York Stock Exchange real estate company dedicated to providing shareholders with dependable monthly income. As of December 31, 2004, the Company had paid 413 consecutive monthly dividends throughout its 35-year operating history. The monthly income is supported by the cash flows from over 1,500 retail properties owned under long-term lease agreements with leading regional and national retail chains. The Company is an active buyer of net-leased retail properties nationwide.