Realty Income Business Questions
- We primarily own properties that are leased to retail businesses. Examples include *#number-1-top-industry#*, *#number-2-top-industry#*, *#number-3-top-industry#*, and *#number-4-top-industry#*.
- We also own non-retail properties, with industrial buildings comprising approximately *#non-retail-percentage-of-properties#* of revenue
- Our properties are typically freestanding structures (not attached to another building as in a shopping mall or strip center)
- These properties are owned under triple-net leases where the client pays the property’s operating expenses including taxes, maintenance and insurance
- As of *#end-of-quarter-date#*, our occupancy rate was *#Portfolio-Occupancy#*%
- Historically, our portfolio occupancy has never been below 96.6%
- You can view our portfolio occupancy history here
- We generally look to acquire properties with 10- to 20-year initial lease agreements
- As of *#end-of-quarter-date#*, our leased, single-client properties have a weighted-average remaining lease term of approximately *#weighted-average-lease-term#* years
- We owned *#number-of-properties-exact#* properties as of *#end-of-quarter-date#*
- The properties are located throughout all *#geographies#*
- You can view the number of properties in each state by viewing this geographic diversification map
We maintain relationships with clients, real estate developers, owners, brokers, private equity firms and investment banks to uncover single-asset and portfolio acquisition opportunities
“Cap rate” is short for lease capitalization rate and is the same as lease yield. This is a measure that is used to determine the annual return generated from lease payments in relation to the purchase price of a property
As part of our investment criteria, we focus on acquiring properties with many of the following attributes:
- Clients with reliable and sustainable cash flow;
- Clients with revenue and cash flow from multiple sources;
- Clients that are willing to sign a long-term lease (10 or more years);
- Clients that are large owners and users of real estate;
- Real estate that is critical to the client’s ability to generate revenue (i.e. they need the property in which they operate in order to conduct their business);
- Real estate with property valuations that approximate replacement cost; and
- Real estate with rental or lease payments that approximate market rents
- To close transactions in a timely manner, we purchase properties for cash using our *#credit-facility-capacity-without-accordion#* acquisition credit facility, which also has a *#commercial-paper-program-capacity#* accordion expansion feature. We also have a $1.5 billion US Commercial Paper Program and a $1.5 billion Euro Commercial Paper Program. We use our unsecured revolving credit facility as a liquidity backstop for the repayment of the notes issued under these commercial paper programs.
- We ultimately seek to permanently fund acquisitions by issuing common stock, preferred stock or long-term bonds
- The type of funding we use to permanently finance acquisitions is determined based on our targeted leverage ratios and market conditions
- Yes, the majority of our leases have some form of rent increases
- Rent increases are negotiated at the time the lease is agreed upon
- Rent increases can vary based on the client’s business and the lease agreement
- We disclose lease expirations by year in our financial supplements
Cost Basis and Tax Information
- They are substantially taxed as ordinary income, and your tax bracket determines the amount of taxes you will pay
- Click here for prior year dividend tax treatment
- Consult a tax specialist for more specific information
Dividend Questions
- View our dividend payment history and the dividend yield
- Dividends are declared when and if the Board of Directors approves the dividend during its regularly scheduled monthly meetings
- Dividend payments have historically occurred on the 15th of the month (or the next business day if the 15th is a weekend or holiday)
- Increases in the amount of the dividend are at the discretion of the Board of Directors and are generally determined by increases in the company’s cash flow, or adjusted funds from operations
- View our Dividend Amount and Investment Proposition
- There are some additional administrative costs associated with paying dividends monthly, rather than quarterly. However, we believe the benefits to our shareholders outweigh these additional costs.
- We pay dividends monthly because we believe our shareholders desire monthly income to pay for monthly expenses
- Monthly dividends. Realty Income pays cash dividends monthly, rather than quarterly. The predictability of our business model’s underlying revenue stream affords us the ability to deliver more frequent dividend payments to shareholders.
- Growth. Since our public listing in 1994, our dividend has grown at a compound average annual growth rate of approximately *#Compound-Average-Annual-Dividend-Growth-Rate#*. We have increased our cash dividend for *#consecutive-quarterly-dividend-increases#* consecutive quarters.
- Stability. Dividend income we provide to our shareholders tends to be reliable since it is supported by long-term leases with tenants we have determined can be relied upon to make lease payments. Throughout our operating history, we have never decreased the amount of our regular monthly dividend payment.
- Increases in the amount of the dividend are at the discretion of the Board of Directors and are generally determined by increases in the company’s cash flow, or adjusted funds from operations
- View our Dividend Amount and Track Record
Typically, investors look at a company’s dividend payout ratio to determine the sustainability of the dividend payment. This ratio is usually calculated based on net income. As a real estate company, there is a supplemental measure called “adjusted funds from operations”, or “AFFO”, that better reflects the company’s ability to generate cash flow to pay the dividend. Most research analysts use AFFO to assess dividend-paying ability. The AFFO calculation removes the non-cash impact of real estate depreciation and amortization and property sale gains or losses to net income, while adjusting for other unique revenue and expense items that are not pertinent to measuring ongoing operating performance.
Why net income is an improper measure to determine dividend-paying capacity:
- If net income is the only measure used to assess operating performance and dividend-paying ability for a real estate company, it appears that most of these companies pay out more in dividends than they earn. This is because depreciation expense is a significant non-cash charge for companies whose assets are primarily real estate.
- The net income calculation also includes non-recurring gains or losses from the sale of properties, which can cause net income to vary materially.
How depreciation works:
- Companies are typically required to estimate the “life” of their buildings and equipment and depreciate them over their estimated useful lives. Based on these estimated lives, they are required to record depreciation charges each period.
- Real estate assets, on the other hand, are long-lived, income-producing assets and, in many cases, may actually appreciate in value over time.
- This depreciation charge is usually the largest expense on the REIT income statement, particularly if the REIT (such as Realty Income) owns a very large real estate portfolio.
How we calculate AFFO:
You can learn more about how AFFO is calculated by viewing our Adjusted Funds from Operations calculation from our most recent Earnings Release.
Financial Performance Questions
As of *#end-of-quarter-date#*, our debt to total market capitalization was *#debt-to-total-market-capitalization-rate#*. Total debt outstanding of approximately *#total-debt-outstanding#* included:
- *#long-term-notes-bonds-mortgages-and-term-loan#* in long-term notes, bonds, mortgages, and a term loan
- *#borrowings-on-revolving-credit-facility-and-commercial-paper-program#* of borrowings on our revolving credit facility and commercial paper program
Realty Income’s capital structure consists primarily of common stock, or equity. It is our goal to maintain a conservative balance sheet and keep the use of debt at a manageable level.
- Utilizing modest amounts of leverage reduces overall financial risk and the potential volatility in our long-term cash flow and stock price
- In general, when raising capital to permanently fund acquisitions, we consider market conditions to determine the optimal mix of capital that offers both a cost-effective and a conservative funding option
- Our equity market capitalization was approximately *#equity-market-capitalization#* (as of *#end-of-quarter-date#*)
- Realty Income’s total market capitalization was *#total-market-capitalization#* (as of *#end-of-quarter-date#*), which consisted of:
- *#equity-market-capitalization#* of common stock
- *#long-term-notes-bonds-mortgages-and-term-loan#* in long-term notes, bonds, mortgages, and a term loan
- *#borrowings-on-revolving-credit-facility-and-commercial-paper-program#* of borrowings on our acquisition credit facility and commercial paper
General Investor Questions
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- Please follow this link to see our Annual Reports
- You can also email us at [email protected] or call toll free at 800-375-6700 to request a hard copy
- Computershare can answer most of your account questions if you are a registered shareholder
- Computershare can be reached at 877-218-2434 (toll free)
- You can also call Realty Income Investor Relations Department at 877-924-6266 (toll free) or email us at [email protected], though we have limited access to account information
Call Computershare at 877-218-2434 (toll free) or contact our Investor Relations Department at 877-924-6266 (toll free) or email us at [email protected]
If you are a registered shareholder, you can contact Computershare at 877-218-2434 (toll free) and request a replacement check. You may also request a replacement through your Computershare account. You can also call Realty Income’s Investor Relations Department at 877-924-6266 (toll free) or email us at [email protected]
Request this from [email protected] or contact Computershare and request a duplicate 1099. They can be reached at 877-218-2434 (toll free). You can also process this request by logging on and accessing your account through Computershare
- Realty Income is covered by several research analysts. This research is proprietary, so any research report that might be available will need to be obtained from your financial advisor’s firm
- The views expressed by analysts are their own and are not endorsed by Realty Income
- Please send an email to [email protected]
- 11995 El Camino Real, San Diego, CA, 92130
- 877-924-6266 (toll free)
- You can get a quote by visiting the Stock Information page
- Share price quotes can also be accessed on various internet financial news sites by entering the ticker symbol “O”
- Share price quotes for Realty Income are shown under our ticker symbol “O” on the financial pages of various newspapers
Our dividend increase history, monthly/annualized dividend amounts, and other important information is located on the Investment Proposition page.
Follow this link to the Direct Stock Purchase and Dividend Reinvestment Plan
To request shareholder materials, contact us by email or phone.
Investing Questions
Direct Stock Purchase and Dividend Reinvestment Plans
No — A Direct Stock Purchase Program is very different from a traditional brokerage account.
Some of the differences are:
- The account is set up online or by mailing in the proper forms to a transfer agent
- The dollar amount that you want to invest or reinvest will determine the number of shares that you will own
- New shares being purchased will be priced at the volume weighted average price per share of our common stock traded on the New York Stock Exchange (NYSE) during regular trading hours on the investment date
- The price for shares that are reinvested will be determined by calculating the average of the low and high sales price per share, as reported by the NYSE, on the last day of trading prior to the reinvestment date
See the prospectus for pricing and investment cost details for the Direct Stock Purchase Program.
- A Direct Stock Purchase program is a program administered by a public company's transfer agent that allows investors to buy shares of the company through the transfer agent rather than a brokerage firm
- These programs are designed for investors who would like to make regular and continuous investments in a company
- A transfer agent is an agent retained by a company to maintain records of investors' account balances, handle transfers of securities for an issuing company, and other administrative details of owning shares directly. Our transfer agent is Computershare
- The process of acquiring shares through a direct stock purchase program is significantly different as compared to purchasing shares through a brokerage firm
- An online account is set up with Computershare, our transfer agent
- The investor must read and certify that he/she has read the prospectus that outlines the program details
- Shares can be purchased on a continuous monthly basis or as a one-time investment, at the investor's discretion
- The minimum initial investment is $1,500 (or $100/month if enrolling in continuous monthly purchases) for all new accounts set up through Computershare
- A dividend reinvestment program offers a shareholder the ability to purchase additional shares of Realty Income every month using their cash dividend to fund share purchases
- There may be fees associated with online dividend reinvestment through Computershare, our transfer agent
- See the prospectus for information on when and how fees may apply
- If shares are already held through Computershare, the online dividend reinvestment enrollment form must be completed at the Computershare website
- Shareholders have the option to reinvest a portion or all of their monthly dividend
- Investor must certify that he/she has read the prospectus that outlines the program
- Once the dividend reinvestment enrollment form has been completed, dividends will be reinvested within 5 days after the dividend has been paid
You may elect to receive plan materials via regular mail and return the completed forms to Computershare. However, all plan statements and account information is administered online. Account statement notification will be transmitted via email and accessed online.
We have no recommendation. Each investor is different.