REALTY INCOME CORP

Realty Income Corporation is an S&P 500 company and a real estate partner to the world's leading companies, founded in 1969. As of December 31, 2025, the company owned or held interests in a diversified portfolio of 15,511 ¹ properties located in all 50 states of the United States, the United Kingdom, and eight other countries in Europe, with approximately 355.0 million ² square feet of leasable space leased to 1,761 ³ clients doing business in 92 ⁴ separate industries. The company operates as a net lease real estate investment trust (REIT), focusing on the acquisition, ownership, and active management of freestanding commercial properties leased under long-term net lease agreements.

The company faces competition from other REITs, businesses, and other entities in the acquisition, development, and operation of freestanding commercial properties. As of December 31, 2025, 32.2% ⁵ of total portfolio annualized base rent came from properties leased to investment grade clients, their subsidiaries, or affiliated companies. The top 20 clients represented 35.8% ⁶ of annualized base rent, and 11 ⁷ of these clients have investment-grade credit ratings or are subsidiaries or affiliates of investment-grade companies. The company's competitive advantages include its scale, cost-of-capital advantages, proprietary data and predictive analytics platform, and a fully integrated European platform that would require significant time, scale, capital, and expertise for new entrants to replicate.

The company's primary business is the acquisition, ownership, and active management of freestanding commercial properties leased under long-term net lease agreements to a diversified base of operators. Under a net lease structure, clients are typically responsible for most or all property-level operating expenses, including real estate taxes, insurance, and maintenance, while the company receives contractually defined rental payments, many of which include embedded contractual rent escalations. The company generates revenue primarily through rental income, including reimbursements from clients for recoverable real estate taxes and operating expenses, and other revenue including interest income on financing receivables and loans and preferred equity investments. The company finances its business through a combination of long-term debt, equity, retained cash flow, and capital recycling through dispositions.

Retail properties represent a significant portion of the portfolio. Within this category, the company primarily targets properties that support service-oriented, non-discretionary, and/or low-price-point business models. As of December 31, 2025, the portfolio included 14,864 ⁸ retail properties with annualized base rent of $4,204,454,000 ⁹, representing 79.1% ¹⁰ of total annualized base rent. The industrial segment comprised 577 ¹¹ properties with annualized base rent of $816,509,000 ¹², representing 15.4% ¹³ of total annualized base rent. The gaming segment included 2 ¹⁴ properties with annualized base rent of $163,817,000 ¹⁵, representing 3.1% ¹⁶ of total annualized base rent. The 'Other' category included 68 ¹⁷ properties with annualized base rent of $125,747,000 ¹⁸, representing 2.4% ¹⁹ of total annualized base rent, primarily consisting of 27 ²⁰ properties classified as agriculture with $35.8 million ²¹ in annualized base rent, 14 ²² properties classified as office with $33.4 million ²³ in annualized base rent, 21 ²⁴ properties classified as country clubs with $27.9 million ²⁵ in annualized base rent, and three ²⁶ properties classified as data centers with $24.6 million ²⁷ in annualized base rent.

During the year ended December 31, 2025, the company invested $6.3 billion ²⁸ at an initial weighted average cash yield of 7.3% ²⁹, including investments in 380 ³⁰ properties, properties under development or expansion, unconsolidated entities, a preferred equity investment, and loans. In December 2025, the company acquired an $800.0 million ³¹ preferred equity interest in the real estate assets of CityCenter Las Vegas. The company sold 425 ³² properties with total net proceeds received of $744.0 million ³³. In November 2025, the company replaced its prior ATM program with a new ATM program, pursuant to which it may offer and sell up to 150.0 million ³⁴ shares of common stock. During the year, the company raised $2.4 billion ³⁵ of proceeds from the sale of common stock at a weighted average price of $57.14 ³⁶ per share, primarily through the settlement of 42.0 million ³⁷ shares of common stock under its ATM program. As of December 31, 2025, the company had outstanding forward sale agreements under its ATM program for a total of 12.6 million ³⁸ shares of common stock, representing expected net proceeds of approximately $708.5 million ³⁹. In April 2025, the company closed on the recast and expansion of its multi-currency unsecured credit facilities totaling $5.38 billion ⁴⁰, including a $1.38 billion ⁴¹ unsecured facility for the Fund. In November 2025, the company entered into a term loan agreement that provides for a £900.0 million ⁴² Sterling-denominated term loan facility. In October 2025, the company issued $400.0 million ⁴³ of 3.950% senior unsecured notes due February 2029 and $400.0 million ⁴⁴ of 4.500% senior unsecured notes due February 2033. In June 2025, the company issued €650.0 million ⁴⁵ of 3.375% senior unsecured notes due June 2031 and €650.0 million ⁴⁶ of 3.875% senior unsecured notes due June 2035. In April 2025, the company issued $600.0 million ⁴⁷ of 5.125% senior unsecured notes due April 2035. In December 2025, the company secured an additional $816.3 million ⁴⁸ in commitments for the Fund, bringing total commitments to approximately $1.5 billion ⁴⁹. In January 2026, the company announced the establishment of a strategic relationship with GIC, including the formation of a build-to-suit development joint venture with total combined commitments of over $1.5 billion ⁵⁰.

Total revenue for the year ended December 31, 2025 was $5,749,377,000 ⁵¹, compared to $5,271,142,000 ⁵² for the year ended December 31, 2024. Net income attributable to the Company was $1,058,590,000 ⁵³ for 2025, compared to $860,772,000 ⁵⁴ for 2024. Net income available to common stockholders was $1,058,590,000 ⁵⁵ for 2025, compared to $847,893,000 ⁵⁶ for 2024. Diluted net income per common share was $1.17 ⁵⁷ for 2025, compared to $0.98 ⁵⁸ for 2024. Total expenses were $4,785,982,000 ⁵⁹ for 2025, compared to $4,489,294,000 ⁶⁰ for 2024. Net cash provided by operating activities was $3,994,754,000 ⁶¹ for 2025, compared to $3,573,276,000 ⁶² for 2024.

Geographic expansion is an important component of the company's investment strategy. Since its initial entry into the U.K. in 2019, the company has grown and scaled its U.K. and European platforms, and as of December 31, 2025, U.K. and European assets represented approximately 19% ⁶³ of annualized base rent, compared to approximately 14% ⁶⁴ as of December 31, 2024. This growth reflects sustained investment activity in the region, with U.K. and Europe representing approximately 60% ⁶⁵ of total acquisition volume in 2025. During 2025, the company expanded its portfolio into Poland and the Netherlands. Subsequent to year-end, in January 2026, the company made initial investments in Mexico through a joint-venture with leading global institutional partners. The company regularly evaluates additional geographies globally where it believes it can partner with high-quality clients and operate within legal, regulatory, and real estate market environments that support its long-term risk-adjusted return objectives.

The company pursues selective expansion across real estate property types where favorable secular tailwinds support durable cash flows and attractive returns. In recent years, this has included greater investment activity in property types such as data centers, gaming, and industrial real estate. The company also complements its core equity real estate ownership activities with real estate credit investments. As of December 31, 2025, the company held loans and preferred equity interests totaling $3.1 billion ⁶⁶, an increase from $1.5 billion ⁶⁷ as of December 31, 2024. These investments provide attractive risk-adjusted return profiles and can serve as a natural hedge to the possible impact of rising interest rates on the company's cost of capital. The company also believes that participating in other investment structures and tangential real estate revenue-generating activities deepens its client relationships and supports broader strategic initiatives.

General and administrative expenses as a percentage of total revenue (excluding client reimbursements) were 3.7% ⁶⁸ for the year ended December 31, 2025, compared to 3.6% ⁶⁹ for the year ended December 31, 2024. Property expenses (excluding reimbursements) as a percentage of total revenue (excluding client reimbursements) were 1.6% ⁷⁰ for 2025, compared to 1.5% ⁷¹ for 2024. The company's weighted average interest rate on its revolving credit facilities, commercial paper, term loans, mortgages, and senior unsecured notes and bonds was 3.93% ⁷² for the year ended December 31, 2025, compared to 4.07% ⁷³ for the year ended December 31, 2024.

The company's predictive analytics platform uses machine learning models trained on proprietary financial and leasing data across more than 15,500 ⁷⁴ properties, combined with millions of external data points stored in its data warehouse. This technology foundation has supported the evaluation of more than $50 billion ⁷⁵ in transaction volume to date. The company's 'One Team' leverages proprietary capabilities including predictive analytics, a tailored ERP platform with source-to-book workflow automation, and robotic process automation initiatives that support scalability and operating leverage. As of December 31, 2025, the company's workforce comprises 544 ⁷⁶ professionals.

In February 2025, the company's Board of Directors authorized a share repurchase program for up to $2.0 billion ⁷⁷ in shares of common stock, which will expire in January 2028. No shares were repurchased in 2025. In January 2026, the company repurchased approximately 1.8 million ⁷⁸ shares of common stock for approximately $101.9 million ⁷⁹. The company's monthly dividend of $0.2700 ⁸⁰ per share represents a current annualized dividend of $3.240 ⁸¹ per share. The dividends paid per share during the year ended December 31, 2025 totaled $3.2170 ⁸², as compared to $3.1255 ⁸³ during the year ended December 31, 2024, an increase of $0.0915 ⁸⁴, or 2.9% ⁸⁵. Cash distributions to common stockholders totaled $2.92 billion ⁸⁶ in 2025, or approximately 159.0% ⁸⁷ of estimated taxable income of $1.84 billion ⁸⁸. The company distributed $3.22 ⁸⁹ per share to stockholders during 2025, representing 75.2% ⁹⁰ of diluted AFFO per share of $4.28 ⁹¹.

The company faces risks from inflation, which may adversely affect its results of operations, financial condition, and liquidity. During times when inflation is greater than increases in rent, as provided for in leases, rent increases may not keep up with the rate of inflation and other costs. Substantial inflationary pressures and increased costs may have an adverse impact on the company's clients if increases in their operating expenses exceed increases in revenue, which may adversely affect clients' ability to pay rent. The U.K. government plans to migrate away from the Retail Price Index to alternatives such as the Consumer Price Index including owner occupiers' housing costs, which may result in a lower measure of inflation and have a negative impact on lease revenue currently tied to RPI in the U.K. The company also faces risks from fluctuations in foreign currency exchange rates related to its international investments and debt, and from changes in interest rates, which could impact its cost of capital and the value of its investments.

The company's international investments and operations are subject to additional risks, including the laws, rules, and regulations applicable in jurisdictions outside the U.S., fluctuations in exchange rates between foreign currencies and the USD, challenges in establishing effective systems and controls to manage operations in different regions, potentially adverse tax consequences, and political instability. The company also faces risks related to its expansion into new investment verticals, property types, and transaction structures, which may be outside its core expertise and subject its investments to new and different business risks and exposures. The company's loans and investments in debt instruments expose it to risks associated with debt-oriented real estate investments, including fluctuations in the value of underlying assets, risks of delinquency or defaults by borrowers, and increased illiquidity.

The company's success is dependent on the financial stability of its clients, and a default of a client on its lease payments may cause the company to lose anticipated revenue. The bankruptcy or insolvency of a client could result in the termination of the lease agreement and material losses. As of December 31, 2025, 32.2% ⁹² of total portfolio annualized base rent comes from properties leased to investment grade clients, leaving significant exposure to non-investment grade clients. The company faces risks associated with its significant indebtedness, including $25.3 billion ⁹³ of outstanding unsecured senior debt securities as of December 31, 2025, and variable interest rate risk on its revolving credit facility, term loan facilities, and commercial paper programs. The company's international investments expose it to foreign currency exchange rate fluctuations, and during the year ended December 31, 2025, foreign currency and derivative loss, net was $28.7 million ⁹⁴. The company's expansion into new property types such as data centers, gaming, and industrial real estate, as well as its real estate credit investments totaling $3.1 billion ⁹⁵ as of December 31, 2025, subject it to new and different risks, including limited experience in managing these investments and potential regulatory burdens associated with lending and gaming properties.

Management's message emphasizes the company's mission to invest in people and places to deliver dependable monthly dividends that increase over time. The company has continued its 57-year history of paying monthly dividends by increasing the dividend five times during 2025 and once during 2026. As of February 2026, the company has paid 113 consecutive quarterly dividend increases and increased the dividend 133 times since its listing on the NYSE in 1994. Management highlights the company's strategic growth initiatives including geographic expansion, increased investment in property types with strong growth prospects, real estate investments across the capital structure, expansion of its private capital business, and strategic asset management initiatives. The company's capital philosophy focuses on balance sheet strength, cost-of-capital efficiency, and long-term risk management, with a goal of broadening and diversifying sources of capital to reduce reliance on public capital markets. Management emphasizes the company's predictive analytics and AI-enabled decisioning as core competitive advantages that strengthen its ability to source, underwrite, and manage a large and diversified net lease portfolio.