Realty Income (NYSE: O) lifts revenue and net income in H1 2026
Realty Income Corporation reported higher results for the quarter ended June 30, 2026. Total revenue was $1,547,711 thousand versus $1,410,378 thousand a year earlier, with growth in interest and dividend income on loans and preferred equity investments. Net income available to common stockholders rose to $343,955 thousand ($0.37 per share) from $196,919 thousand ($0.22 per share). For the first six months of 2026, revenue reached $3,096,438 thousand and net income available to common stockholders was $655,721 thousand ($0.70 per share), up from $446,734 thousand ($0.50 per share) in 2025.
At June 30, 2026, total assets were $76,441,475 thousand, including real estate held for investment, net, of $55,112,439 thousand and investment in loans and financing receivables, net, of $4,888,860 thousand. Notes and bonds payable totaled $25,416.1 million of principal (weighted average interest rate 3.9%), supplemented by $2,760,395 thousand of term loans and $2,762,585 thousand of revolving credit facilities and commercial paper.
The company continued to scale its net-lease platform, owning or holding interests in 15,588 properties and completing 328 property-related investments in the first half of 2026 for $3,577.5 million. It expanded its U.S. Core Plus Fund and formed the Apollo JV, which together contributed to noncontrolling interests of $2,384,520 thousand within total equity of $41,934,077 thousand.
Positive
- None.
Negative
- None.
Filing Explained
Existing holders face completed share issuance and conditional future share settlement on convertible notes, alongside Apollo sharing economics in a consolidated venture.
Form 10-Q is an unaudited quarterly report; this report covers
Before
As of
The specific follow-up is whether the convertible-note conditions occur before
Key Figures
Q2 2026 Total Revenue: $ 1,547,711 thousand
Q2 2026 Net Income to Common: $ 343,955 thousand
H1 2026 Operating Cash Flow: $ 2,019,585 thousand
+5 more
8 metrics
Q2 2026 Total Revenue
$ 1,547,711 thousand
Total revenue for the three months ended June 30, 2026
Q2 2026 Net Income to Common
$ 343,955 thousand
Net income available to common stockholders for the quarter ended June 30, 2026
H1 2026 Operating Cash Flow
$ 2,019,585 thousand
Net cash provided by operating activities for six months ended June 30, 2026
Total Assets
$ 76,441,475 thousand
Total assets as of June 30, 2026
Real Estate Acquisitions H1 2026
$ 3,577.5 million
Total investment in 328 acquired or development properties in the six months ended June 30, 2026
Loans Receivable Balance
$ 3,297.6 million
Total carrying value of loans receivable as of June 30, 2026
Notes and Bonds Principal
$ 25,416.1 million
Principal amount of senior unsecured notes and bonds outstanding as of June 30, 2026
Noncontrolling Interests
$ 2,384,520 thousand
Total noncontrolling interests within equity as of June 30, 2026
Key Terms
Variable interest entities, Noncontrolling interests, Sale-leaseback transactions, Commercial paper programs, +2 more
6 terms
Variable interest entities financial
"Variable interest entities ("VIEs") are entities that lack sufficient equity at risk"
A variable interest entity (VIE) is a business that a company controls through contracts or special arrangements instead of owning a majority of its shares, like steering a puppet without holding its ticket. Investors care because these arrangements can hide who really bears the financial risks and rewards, affect how assets and liabilities appear on financial statements, and create extra legal or enforcement uncertainty that can change the value and risk of an investment.
Noncontrolling interests financial
"The portion of a consolidated entity not owned by us is recorded as a noncontrolling interest"
The portion of a subsidiary’s equity and profits that belongs to outside owners rather than the parent company; when a parent reports consolidated results it includes the whole subsidiary but shows the noncontrolling slice separately. Think of a company’s subsidiary as a pie where the parent owns most slices but some are held by other investors — noncontrolling interests tell you how much of the pie and its future earnings don’t belong to the parent, which affects how much profit and net assets are truly attributable to the parent’s shareholders.
Sale-leaseback transactions financial
"properties we acquire that qualify as sale-leaseback transactions and for which the purchase price is in excess"
A sale-leaseback transaction is when an owner sells a property or asset and immediately rents it back from the buyer, like selling your house and signing a lease to keep living in it. For investors, it matters because the seller converts a fixed asset into cash while taking on a new rent expense, which can boost short-term liquidity but change long-term earnings, debt levels and risk profiles that affect valuation and creditworthiness.
Commercial paper programs financial
"we have a USD-denominated unsecured commercial paper program, under which we may issue"
A commercial paper program is an ongoing arrangement that lets a company sell short-term unsecured IOUs to borrow cash for everyday needs like payroll, inventory or short-term investments. Think of it as a corporate version of a short-term loan or a business credit card: it provides quick cash without a long-term bank loan. Investors watch these programs because they reveal a company’s short-term funding health, borrowing costs and credit risk, which can affect liquidity and near-term financial stability.
Net investment hedges financial
"enter into derivative instruments, such as cross-currency swaps that qualify as net investment hedges"
A net investment hedge is a financial step a company takes to protect the reported value of its ownership in foreign subsidiaries from swings in exchange rates. By using derivatives or foreign‑currency borrowings to offset translation gains or losses, the company reduces how much its balance sheet and reported equity jump around when currencies move — like locking a price tag on a foreign store so its value in the home currency stays steadier for investors.
Hypothetical liquidation at book value financial
"allocate income and loss attributable to the noncontrolling interest using the hypothetical liquidation at book value"
An estimate of what shareholders or creditors would receive if a company were closed and its assets sold using the values shown on its balance sheet rather than current market prices. It’s a hypothetical “what-if” cleanup calculation—like assuming you could sell a house for the exact number on your mortgage statement—and helps investors gauge a conservative floor for recovery in bankruptcy, restructuring, or worst-case valuation scenarios.
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FAQ
How did Realty Income (O) perform financially in Q2 2026?
Realty Income generated $1,547,711 thousand in total revenue in Q2 2026, up from $1,410,378 thousand in 2025. Net income available to common stockholders was $343,955 thousand, or $0.37 per share, compared with $196,919 thousand, or $0.22 per share, a year earlier.
What were Realty Income (O)'s results for the first half of 2026?
For the six months ended June 30, 2026, Realty Income reported $3,096,438 thousand in total revenue and net income available to common stockholders of $655,721 thousand, or $0.70 per share. Net cash provided by operating activities was $2,019,585 thousand over the same period.
How large is Realty Income (O)'s property portfolio and what did it acquire in H1 2026?
As of June 30, 2026, Realty Income owned or held interests in 15,588 properties across the U.S., U.K. and eight other European countries. In the first half of 2026 it completed 328 property-related investments totaling $3,577.5 million, with clients 51.8% retail and 48.1% industrial by net operating income.
What is Realty Income (O)'s debt profile as of June 30, 2026?
As of June 30, 2026, Realty Income had senior notes and bonds with $25,416.1 million of principal outstanding at a 3.9% weighted average interest rate, plus term loans carrying value of $2,774.9 million. It also issued $862.5 million of 3.500% convertible notes due January 2029.
What activity did Realty Income (O) report in loans and financing receivables?
Loans receivable had a total carrying value of $3,297.6 million at June 30, 2026, with a weighted average interest rate of 8.6% and weighted average term of 3.69 years. Financing receivables, mainly sale-leaseback adjustments and lease investments, totaled $1,591.3 million.
Which joint ventures and noncontrolling interests are significant for Realty Income (O)?
Realty Income consolidates several variable interest entities, including its U.S. Core Plus Fund and the Apollo JV. At June 30, 2026, total noncontrolling interests were $2,384,520 thousand, including $1,396,640 thousand for the Fund and $778,876 thousand for Apollo.
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
For the quarterly period ended June 30, 2026
or
Commission File Number 1-13374
(Exact name of registrant as specified in its charter)
(State or Other Jurisdiction of Incorporation or Organization) | (IRS Employer Identification Number) |
(Address of Principal Executive Offices)
Registrant’s telephone number, including area code: (858 ) 284-5000
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class | Trading Symbol(s) | Name of Each Exchange On Which Registered |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be
submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for
such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Table of Contents
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated
filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer,"
“accelerated filer,” "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
☒ | Accelerated filer | ☐ | Non-accelerated filer | ☐ | Smaller reporting company | |||||
Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended
transition period for complying with any new or revised financial accounting standards provided pursuant to
Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ No ☒
As of July 30, 2026, there were 946,218,033 shares of common stock outstanding.
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Table of Contents
REALTY INCOME CORPORATION
Index to Form 10-Q
June 30, 2026
PART I. | FINANCIAL INFORMATION | Page |
Item 1: | Financial Statements (Unaudited) | |
Consolidated Balance Sheets | 2 | |
Consolidated Statements of Income and Comprehensive Income | 3 | |
Consolidated Statements of Equity | 4 | |
Consolidated Statements of Cash Flows | 5 | |
Notes to Consolidated Financial Statements | 6 | |
Item 2: | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 35 |
Item 3: | Quantitative and Qualitative Disclosures About Market Risk | 59 |
Item 4: | Controls and Procedures | 61 |
PART II. | OTHER INFORMATION | |
Item 1A: | Risk Factors | 61 |
Item 2: | Unregistered Sales of Equity Securities and Use of Proceeds | 61 |
Item 5: | Other Information | 62 |
Item 6: | Exhibits | 62 |
SIGNATURE | 63 | |
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Table of Contents
PART I. FINANCIAL INFORMATION
Item 1: Financial Statements
REALTY INCOME CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts) (unaudited)
June 30, 2026 | December 31, 2025 | ||
ASSETS | |||
Real estate held for investment, at cost: | |||
Land | $ | $ | |
Buildings and improvements | |||
Total real estate held for investment, at cost | |||
Less accumulated depreciation and amortization | ( | ( | |
Real estate held for investment, net | |||
Real estate and lease intangibles held for sale, net | |||
Cash and cash equivalents | |||
Accounts receivable, net | |||
Lease intangible assets, net | |||
Goodwill | |||
Investment in loans and financing receivables, net | |||
Investment in unconsolidated entities | |||
Other assets, net | |||
Total assets | $ | $ | |
LIABILITIES AND EQUITY | |||
Distributions payable | $ | $ | |
Accounts payable and accrued expenses | |||
Lease intangible liabilities, net | |||
Other liabilities | |||
Revolving credit facilities and commercial paper | |||
Term loans, net | |||
Mortgages payable, net | |||
Notes payable, net | |||
Total liabilities | $ | $ | |
Commitments and contingencies (Note 18) | |||
Stockholders’ equity: | |||
Common stock and paid in capital, par value $ authorized, 30, 2026 and December 31, 2025, respectively | $ | $ | |
Distributions in excess of net income | ( | ( | |
Accumulated other comprehensive income | |||
Total stockholders’ equity | $ | $ | |
Noncontrolling interests | |||
Total equity | $ | $ | |
Total liabilities and equity | $ | $ |
The accompanying notes to consolidated financial statements are an integral part of these statements.
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REALTY INCOME CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(in thousands, except per share amounts) (unaudited)
Three months ended June 30, | Six months ended June 30, | |||||||
2026 | 2025 | 2026 | 2025 | |||||
REVENUE | ||||||||
Rental (including reimbursements) | $ | $ | $ | $ | ||||
Interest income on financing receivables | ||||||||
Interest and dividend income on loans and preferred equity investments | ||||||||
Other | ||||||||
Total revenue | ||||||||
EXPENSES | ||||||||
Depreciation and amortization | ||||||||
Interest | ||||||||
Property (including reimbursements) | ||||||||
General and administrative | ||||||||
Provisions for impairment of real estate | ||||||||
Provisions for credit losses on loans and financing receivables | ||||||||
Merger, transaction, and other costs, net | ||||||||
Total expenses | ||||||||
Gain on sales of real estate | ||||||||
Foreign currency and derivative loss, net | ( | ( | ( | ( | ||||
Equity in earnings of unconsolidated entities | ||||||||
Other income, net | ||||||||
Income before income taxes | ||||||||
Income taxes | ( | ( | ( | ( | ||||
Net income | ||||||||
Net income attributable to noncontrolling interests | ( | ( | ( | ( | ||||
Net income available to common stockholders | $ | $ | $ | $ | ||||
Amounts available to common stockholders per common share: | ||||||||
Net income, basic and diluted | $ | $ | $ | $ | ||||
Weighted average common shares outstanding: | ||||||||
Basic | ||||||||
Diluted | ||||||||
Net income available to common stockholders | $ | $ | $ | $ | ||||
Other comprehensive income: | ||||||||
Foreign currency translation adjustment | ( | |||||||
Unrealized (loss) gain on derivatives, net | ( | ( | ( | |||||
Total other comprehensive income | $( | $ | $( | $ | ||||
Comprehensive income available to common stockholders | $ | $ | $ | $ | ||||
The accompanying notes to consolidated financial statements are an integral part of these statements.
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REALTY INCOME CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EQUITY
(in thousands) (unaudited)
Three months ended June 30, 2026 and 2025
Shares of common stock | Common stock and paid in capital | Distributions in excess of net income | Accumulated other comprehensive income | Total stockholders ’ equity | Non- controlling interests | Total equity | |||||||
Balance, March 31, 2026 | $ | $( | $ | $ | $ | $ | |||||||
Net income | — | — | — | ||||||||||
Other comprehensive income | — | — | — | ( | ( | — | ( | ||||||
Distributions paid and payable | — | — | ( | — | ( | ( | ( | ||||||
Share issuances, net of costs | — | — | — | ||||||||||
Share repurchases | — | ( | — | — | ( | — | ( | ||||||
Contributions by noncontrolling interests, net of costs | — | ( | — | — | ( | ||||||||
Purchase of noncontrolling interests | — | ( | — | — | ( | ( | ( | ||||||
Reallocation of equity | — | — | — | ( | |||||||||
Share-based compensation, net | — | — | — | ||||||||||
Balance, June 30, 2026 | $ | $( | $ | $ | $ | $ | |||||||
Balance, March 31, 2025 | $ | $( | $ | $ | $ | $ | |||||||
Net income | — | — | — | ||||||||||
Other comprehensive income | — | — | — | — | |||||||||
Distributions paid and payable | — | — | ( | — | ( | ( | ( | ||||||
Share issuances, net of costs | — | — | — | ||||||||||
Contributions by noncontrolling interests, net of costs | — | — | — | — | — | ||||||||
Share-based compensation, net | — | — | — | ||||||||||
Balance, June 30, 2025 | $ | $( | $ | $ | $ | $ | |||||||
Six months ended June 30, 2026 and 2025 | |||||||||||||
Shares of common stock | Common stock and paid in capital | Distributions in excess of net income | Accumulated other comprehensive income | Total stockholders ’ equity | Non- controlling interests | Total equity | |||||||
Balance, December 31, 2025 | $ | $( | $ | $ | $ | $ | |||||||
Net income | — | — | — | ||||||||||
Other comprehensive income | — | — | — | ( | ( | — | ( | ||||||
Distributions paid and payable | — | — | ( | — | ( | ( | ( | ||||||
Share issuances, net of costs | — | — | — | ||||||||||
Share repurchases | ( | ( | — | — | ( | — | ( | ||||||
Contributions by noncontrolling interests, net of costs | — | ( | — | — | ( | ||||||||
Purchase of noncontrolling interests | — | ( | — | — | ( | ( | ( | ||||||
Reallocation of equity | — | — | ( | ||||||||||
Share-based compensation, net | — | — | — | ||||||||||
Balance, June 30, 2026 | $ | $( | $ | $ | $ | $ | |||||||
Balance, December 31, 2024 | $ | $( | $ | $ | $ | $ | |||||||
Net income | — | — | — | ||||||||||
Other comprehensive income | — | — | — | — | |||||||||
Distributions paid and payable | — | — | ( | — | ( | ( | ( | ||||||
Share issuances, net of costs | — | — | — | ||||||||||
Contributions by noncontrolling interests, net of costs | — | — | — | — | — | ||||||||
Share-based compensation, net | — | — | — | ||||||||||
Balance, June 30, 2025 | $ | $( | $ | $ | $ | $ | |||||||
The accompanying notes to consolidated financial statements are an integral part of these statements.
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REALTY INCOME CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands) (unaudited)
Six months ended June 30, | |||
2026 | 2025 | ||
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Net income | $ | $ | |
Adjustments to net income: | |||
Depreciation and amortization | |||
Amortization of share-based compensation | |||
Non-cash revenue adjustments | ( | ( | |
Amortization of net discounts on mortgages payable | |||
Amortization of net discounts on notes payable | |||
Amortization of deferred financing costs | |||
Foreign currency and unrealized derivative gain, net | ( | ( | |
Non-cash interest rate swaps | ( | ||
Payment-in-kind interest | ( | ||
Gain on sales of real estate | ( | ( | |
Equity in earnings of unconsolidated entities | ( | ( | |
Distributions on common equity from unconsolidated entities | |||
Provisions for impairment of real estate | |||
Provisions for credit losses on loans and financing receivables | |||
Deferred income tax expense | |||
Change in assets and liabilities | |||
Accounts receivable and other assets | ( | ( | |
Accounts payable, accrued expenses and other liabilities | |||
Net cash provided by operating activities | |||
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Investment in real estate | ( | ( | |
Improvements to real estate, including leasing costs | ( | ( | |
Investment in unconsolidated entities | ( | ( | |
Investment in loans and preferred equity | ( | ( | |
Proceeds from sales of real estate | |||
Proceeds from note receivable | |||
Insurance proceeds received | |||
Non-refundable escrow deposits | ( | ||
Net cash used in investing activities | ( | ( | |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Cash distributions to common stockholders | ( | ( | |
Borrowings on revolving credit facilities and commercial paper programs | |||
Payments on revolving credit facilities and commercial paper programs | ( | ( | |
Proceeds from term loan | |||
Principal payment on term loan | ( | ||
Proceeds from notes payable issued | |||
Principal payment on notes payable | ( | ( | |
Principal payments on mortgages payable | ( | ( | |
Repurchases of common stock | ( | ||
Proceeds from common stock offerings, net | |||
Proceeds from dividend reinvestment and stock purchase plan | |||
Distributions to noncontrolling interests | ( | ( | |
Contributions from noncontrolling interests, net of costs | |||
Debt issuance costs | ( | ( | |
Other financing activities, net | ( | ||
Net cash provided by financing activities | |||
Effect of exchange rate changes on cash and cash equivalents | ( | ||
Net increase in cash, cash equivalents and restricted cash | |||
Cash, cash equivalents and restricted cash, beginning of period | |||
Cash, cash equivalents and restricted cash, end of period | $ | $ | |
For supplemental disclosures, see note 16, Supplemental Disclosures of Cash Flow Information.
The accompanying notes to consolidated financial statements are an integral part of these statements.
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REALTY INCOME CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2026 (unaudited)
1.Summary of Significant Accounting Policies
Realty Income Corporation (“Realty Income,” the “Company,” “we,” “our” or “us”), a Maryland corporation, is an S&P
500 company and real estate partner to the world's leading companies®. The Company was founded in 1969 and
our shares of common stock trade on the New York Stock Exchange ("NYSE") under the symbol “O”.
As of June 30, 2026, we owned or held interests in a diversified portfolio of 15,588 properties located in all 50 states
of the United States ("U.S."), the United Kingdom ("U.K."), and eight other countries in Europe.
accounting principles generally accepted in the United States of America ("U.S. GAAP"). Intercompany accounts
and transactions are eliminated in consolidation. The U.S. Dollar ("USD") is our reporting currency. Unless
otherwise indicated, all dollar amounts are expressed in USD.
For our consolidated subsidiaries whose functional currency is not the USD, we translate their financial statements
into USD at the time we consolidate those subsidiaries’ financial statements. Generally, assets and liabilities are
translated at the exchange rate in effect at the balance sheet date. The resulting translation adjustments are
included in 'Accumulated other comprehensive income' ("AOCI") on our consolidated balance sheets. Certain
balance sheet items, primarily equity and capital-related accounts, are reflected at the historical exchange rate.
Income statement accounts are translated using the average exchange rate for the period.
We and certain of our consolidated subsidiaries have intercompany and third-party debt that is not denominated in
our functional currency. When the debt is remeasured to the functional currency of the entity, a gain or loss can
result. The resulting adjustment is reflected in 'Foreign currency and derivative loss, net' in our consolidated
statements of income and comprehensive income. In the statement of cash flows, cash flows denominated in
foreign currencies are translated using the exchange rates in effect at the time of the respective cash flows or at
average exchange rates for the period, depending on the nature of the cash flow items.
In the opinion of management, all adjustments (consisting only of normal recurring accruals) necessary to present a
fair statement of results for the interim periods presented have been included. Operating results for the three and six
months ended June 30, 2026 are not necessarily an indication of the results that may be expected for the entire
year. Readers of this quarterly report should refer to our audited consolidated financial statements for the year
ended December 31, 2025, which are included in our 2025 annual report on Form 10-K, as certain disclosures that
would substantially duplicate those contained in the audited financial statements have not been included in this
report.
all other entities in which we have a controlling financial interest. We evaluate whether we have a controlling
financial interest in an entity in accordance with Accounting Standards Codification ("ASC") 810, Consolidation.
Voting interest entities ("VOEs") are entities considered to have sufficient equity at risk and which the equity holders
have the obligation to absorb losses, the right to receive residual returns and the right to make decisions about the
entity’s activities. We consolidate voting interest entities in which we have a controlling financial interest, which we
typically have through holding of a majority of the entity’s voting equity interests.
not have the obligation to absorb losses, do not have the right to receive residual returns, do not have the right to
make decisions about the entity’s activities, or some combination of the above. A controlling financial interest in a
VIE is present when an entity has a variable interest, or a combination of variable interests, that provides the entity
with (i) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance
and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially
be significant to the VIE. An entity that meets both conditions above is deemed the primary beneficiary and
consolidates the VIE. We reassess our initial evaluation of whether an entity is a VIE when certain reconsideration
events occur. We reassess our determination of whether we are the primary beneficiary of a VIE on an ongoing
basis based on current facts and circumstances.
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As of June 30, 2026, we are considered the primary beneficiary of our U.S. Core Plus Fund (the "Fund"), our
strategic joint venture with Apollo Global Management, Inc. ("Apollo"), Realty Income, L.P. and certain investments,
including investments in joint ventures. Below is a summary of selected financial data of such consolidated VIEs,
included on our consolidated balance sheets as of June 30, 2026 and December 31, 2025 (in thousands):
June 30, 2026 | December 31, 2025 | ||
Net real estate | $ | $ | |
Total assets | $ | $ | |
Total liabilities | $ | $ |
The portion of a consolidated entity not owned by us is recorded as a noncontrolling interest. Noncontrolling
interests are reflected on our consolidated balance sheets as a component of equity. Noncontrolling interests that
were created or assumed as part of a business combination or asset acquisition were recognized at fair value as of
the date of the transaction. For further details, see note 9, Noncontrolling Interests.
items: 'Interest income on financing receivables', 'Interest and dividend income on loans and preferred equity
investments', and 'Other' to provide further detail on amounts included as 'Other' in our consolidated statements of
income and comprehensive income. 'Provisions for impairment' has also been disaggregated into the following line
items: 'Provisions for impairment of real estate' and 'Provisions for credit losses on loans and financing receivables'
in our consolidated statements of income and comprehensive income. Finally, 'Investment in loans and financing
receivables, net' has been disaggregated from 'Other assets, net' on our consolidated balance sheets. Prior periods
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities,
the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts
of revenues and expenses during the reporting period. Actual results could differ from those estimates.
available to common stockholders by the weighted average number of common shares outstanding during each
period. Diluted net income per common share is computed by dividing net income available to common
stockholders, plus income attributable to dilutive shares and convertible common units for the period, by the
weighted average number of common shares that would have been outstanding assuming the issuance of common
shares for all dilutive common shares outstanding during the reporting period, including common shares required to
satisfy the exchange obligation for convertible notes under the if-converted method, assuming all such convertible
notes were converted at the beginning of the reporting period, or date of issuance, if later. The average closing price
of our common stock for the reporting period is used as the basis for determining the dilutive effect on earnings per
U.S. Internal Revenue Code of 1986, as amended (the “Code”). We believe we have qualified and continue to
qualify as a REIT. Under the REIT operating structure, we are permitted to deduct dividends paid to our
stockholders in determining our taxable income. Assuming our dividends equal or exceed our taxable net income in
the U.S., we generally will not be required to pay U.S. income taxes on such income. Accordingly, no provision has
been made for federal income taxes in the accompanying consolidated financial statements, except for federal
income taxes of our taxable REIT subsidiaries ("TRS"). A TRS is a subsidiary of a REIT that is subject to federal,
state and local income taxes, as applicable. Our use of TRS entities enables us to engage in certain business
activities while complying with the REIT qualification requirements and to retain any income generated by these
businesses for reinvestment without the requirement to distribute those earnings. We are liable for taxes in our
applicable international territories and have made the appropriate provisions in those territories. Therefore, the
income taxes recorded in our consolidated statements of income and comprehensive income represent amounts for
U.S. income taxes on our TRS entities, city and state income and franchise taxes, as well as income taxes for the
applicable international territories.
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We recognize deferred income tax in our taxable subsidiaries, including certain international jurisdictions. Deferred
income tax assets and liabilities are generally the result of temporary differences between book and tax accounting,
such as timing differences caused by different useful lives used for depreciation. We provide for a valuation
allowance for deferred income tax assets if we believe some or all of the deferred income tax assets may not be
realized. We had $8.7 million and $4.3 million of net deferred tax liabilities as of June 30, 2026 and December 31,
2025, respectively, which are reported in 'Other liabilities' on our consolidated balance sheets.
Earnings and profits that determine the taxability of distributions to stockholders differ from net income reported for
financial reporting purposes primarily due to differences in the estimated useful lives and methods used to compute
depreciation and the carrying value (basis) of the investments in properties for tax purposes, among other things.
We regularly analyze our various international, federal and state filing positions and only recognize the income tax
effect in our financial statements when certain criteria regarding uncertain income tax positions have been met. We
believe that our income tax positions would more likely than not be sustained upon examination by all relevant
taxing authorities. Therefore, no provisions for uncertain tax positions have been recorded on our consolidated
financial statements.
operating leases. Under this method, leases that have fixed and determinable rent increases are recognized on a
straight-line basis over the lease term. Any rental revenue contingent upon our client’s sales, or percentage rent, is
recognized only after our client exceeds its sales breakpoint. Rental increases based upon changes in the
consumer price indices are recognized only after the changes in the indexes have occurred and are then applied
according to the lease agreements. Lease termination fees, which are included in rental revenue, are amortized
over the remaining term of the lease until we have no continuing obligation to provide services to such former client.
Contractually obligated rental revenue from our clients for recoverable real estate taxes and operating expenses is
included in contractually obligated reimbursements by our clients, a component of rental revenue, in the period
when such costs are incurred. Taxes and operating expenses paid directly by our clients are recorded on a net
basis.
Other revenue includes certain property-related revenue not included in rental revenue. Interest income on financing
receivables includes interest income recognized on financing receivables for certain leases with above-market
terms.
We assess the probability of collecting substantially all of the lease payments to which we are entitled under the
original lease contract as required under ASC 842, Leases. We assess the collectability of our future lease
payments based on an analysis of creditworthiness, economic trends and other facts and circumstances related to
the applicable clients. If we conclude the collection of substantially all of lease payments under a lease is less than
probable, rental revenue recognized for that lease is limited to cash received going forward, existing operating lease
receivables, including those related to straight-line rental revenue, must be written off as an adjustment to rental
revenue, and no further operating lease receivables are recorded for that lease until such future determination is
made that substantially all lease payments under that lease are now considered probable. If we subsequently
conclude that the collection of substantially all lease payments under a lease is probable, a reversal of lease
receivables previously written off is recognized.
In addition to the client-specific collectability assessment conducted, we may also recognize a general allowance,
We had $5.3 million and $5.1 million of general allowance as of June 30, 2026 and December 31, 2025,
respectively.
cost basis. We recognize interest income on loans receivable using a method that approximates the effective-
interest method. Direct costs associated with originating loans, along with any premium or discount, are deferred
and amortized as an adjustment to interest income over the term of the loan using the effective interest method.
When management identifies that the full recovery of the contractually specified payments of principal and interest
of a loan is less than probable, we evaluate the expected loss amount and place it on non-accrual status. We have
made an accounting policy election to record accrued interest on our loan portfolio separate from our loan
receivable and other lending investments. These loans are presented in Investment in loans and financing
receivables, net' and the related interest receivable is presented in 'Other assets, net' on our consolidated balance
sheets.
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Acquisition, Development and Construction ("ADC") Arrangements. We originate loans to third-party
borrowers for the acquisition, development, and construction of real estate. Each ADC arrangement is evaluated in
accordance with ASC 310, Receivables, which involves the determination of whether an arrangement should be
accounted for as a loan receivable or as an equity method investment. This analysis is applied only where the
borrower entity is not subject to consolidation under ASC 810, Consolidation. Specifically, we first assess whether
we are expected to receive more than 50% of the expected residual profits from the project, defined as profit above
a reasonable lender return from the sale, refinancing, or other use of the property. If our expected participation in
residual profits exceeds 50%, the arrangement must be accounted for as an equity method investment. If our
expected participation is 50% or less, we further evaluate whether the arrangement exhibits characteristics more
consistent with a loan or an equity method investment. This evaluation involves judgment and considers various
factors, including the significance of borrower equity in the project, loan-to-cost and loan-to-value metrics relative to
market, the existence of guarantees or binding lease arrangements, and interest rate and fee terms relative to
market, among others. We reassess the classification of each ADC arrangement if facts and circumstances
subsequently change in a manner that could affect the initial classification. Any reclassification is applied
prospectively. As of June 30, 2026, we have determined that all of our ADC loan arrangements have characteristics
more consistent with a loan than an equity method investment, and accordingly account for them as loan
receivables.
Financing Receivables. For properties we acquire that qualify as sale-leaseback transactions and for which the
purchase price is in excess of the fair value of the real estate acquired, the difference is accounted for as financing
receivables, presented within 'Investment in loans and financing receivables, net' on our consolidated balance
sheets. Rent payments are allocated between rental income and the financing receivable. Our net investments in
sales-type and direct financing leases are also accounted for as financing receivables. Interest income on financing
receivables is recognized using the interest rate implicit in the lease and presented within 'Interest income on
financing receivables' in our consolidated statements of income and comprehensive income.
loans and financing receivables, net' on our consolidated balance sheets, is based on our clients' respective credit
ratings, our historical experience, and the expected value of the underlying collateral upon its repossession. We
generally apply probability of default, discounted cash flow, or loss rate methods considering the risk characteristics
of each asset or pool. If we determine a financing receivable no longer shares risk characteristics with other
financing receivables in the pool, we evaluate the financing receivable for expected credit losses on an individual
basis. Included in our model are factors that incorporate forward-looking information. The measurement of expected
credit losses is also applicable to off-balance sheet credit exposures such as unfunded loan commitments. The
allowance for credit losses attributed to unfunded commitments is included in 'Other liabilities' on our consolidated
balance sheets. Changes in our allowance for credit losses are presented in 'Provisions for credit losses on loans
see note 5, Investments in Loans and Financing Receivables.
Goodwill is qualitatively assessed to determine whether a quantitative impairment assessment is necessary.
Impairment is the condition that exists when the carrying amount of goodwill exceeds its implied fair value. If the
carrying value of the asset exceeds its estimated fair value, an impairment loss is recognized, and the asset is
written down to its estimated fair value. We perform our annual goodwill impairment assessment as of June 30. We
During the six months ended June 30, 2026 and 2025, there were no
acquisition costs, including certain costs incurred for credit investment loans, (ii) organization costs for potential
strategic ventures and business lines, (iii) placement fees incurred in fundraising of the Fund, (iv) merger-related
and six months ended June 30, 2026, we incurred $2.1 million and $12.8 million, respectively, of merger,
transaction, and other costs, net consisting primarily of placement fees incurred in fundraising for the Fund and
certain joint venture formation costs.
additional paid-in capital on our consolidated balance sheets. Costs incurred in connection with the issuance of
noncontrolling interests, including direct and incremental costs associated with forming joint ventures and admitting
third-party investors, are capitalized as equity offering costs. Costs that are not directly attributable to the issuance
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("FASB") issued Accounting Standards Update ("ASU") 2025-06, Intangibles—Goodwill and Other—Internal-Use
Software, which simplifies the capitalization guidance by removing references to software development project
stages and further updates so that the guidance considers various software development methods. The
amendments in this ASU are effective for annual reporting periods beginning after December 15, 2027, and interim
reporting periods within those annual reporting periods, with early adoption permitted. The amendments in this
update permit an entity to apply the new guidance using a prospective, retrospective or modified transition
approach. While we are currently evaluating the impact of this pronouncement, we do not expect it will have a
material impact on our consolidated financial statements.
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—
Expense Disaggregation Disclosures, requiring all public business entities to provide additional disclosure of the
nature of expenses included in the income statement. This ASU is effective for fiscal years beginning after
December 15, 2026, and for interim reporting periods beginning after December 15, 2027, on a prospective basis,
with early adoption permitted. While the adoption is not expected to have an impact on our financial statements, it is
2.Supplemental Detail for Certain Components of Consolidated Balance Sheets (in thousands):
A. | Accounts receivable, net, consist of the following at: | June 30, 2026 | December 31, 2025 | |
Straight-line rent receivables, net | $ | $ | ||
Client receivables, net | ||||
$ | $ |
B. | Lease intangible assets, net, consist of the following at: | June 30, 2026 | December 31, 2025 | |
In-place leases | $ | $ | ||
Above-market leases | ||||
Accumulated amortization of in-place leases | ( | ( | ||
Accumulated amortization of above-market leases | ( | ( | ||
Other items | ||||
$ | $ |
C. | Other assets, net, consist of the following at: | June 30, 2026 | December 31, 2025 | |
Investment in preferred equity | $ | $ | ||
Right of use asset - financing leases, net | ||||
Right of use asset - operating leases, net | ||||
Value-added tax receivable | ||||
Prepaid expenses | ||||
Derivative assets and receivables - at fair value | ||||
Restricted escrow deposits | ||||
Interest receivable | ||||
Revolving credit facilities origination costs, net | ||||
Corporate assets, net | ||||
Impounds related to mortgages payable | ||||
Non-refundable escrow deposits | ||||
Other items | ||||
$ | $ |
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D. | Accounts payable and accrued expenses consist of the following at: | June 30, 2026 | December 31, 2025 | |
Notes payable - interest payable | $ | $ | ||
Derivative liabilities and payables - at fair value | ||||
Accrued income taxes | ||||
Value-added tax payable | ||||
Property taxes payable | ||||
Accrued property expenses | ||||
Accrued costs on properties under development | ||||
Mortgages, term loans, and credit line - interest payable | ||||
Other items | ||||
$ | $ |
E. | Lease intangible liabilities, net, consist of the following at: | June 30, 2026 | December 31, 2025 | |
Below-market leases | $ | $ | ||
Accumulated amortization of below-market leases | ( | ( | ||
$ | $ |
F. | Other liabilities consist of the following at: | June 30, 2026 | December 31, 2025 | |
Rent received in advance and other deferred revenue | $ | $ | ||
Lease liability - operating leases | ||||
Lease liability - financing leases | ||||
Security deposits | ||||
Other items | ||||
$ | $ |
3.Investments in Real Estate
A.Acquisitions of Real Estate
Number of Properties | Investment ($ in millions) | Weighted Average Lease Term (Years) | |||
Acquisitions | |||||
U.S. real estate | $ | ||||
Europe real estate | |||||
Total real estate acquisitions | $ | ||||
Real estate properties under development | |||||
U.S. real estate | $ | ||||
Europe real estate | |||||
Total real estate properties under development | $ | ||||
Total (1) | $ |
(1)Our clients occupying the new properties are 51.8 % retail, 48.1 % industrial, and 0.1 % other property types based on net operating income.
Approximately 48 % of the net operating income generated from acquisitions during the six months ended June 30, 2026 was from investment
grade rated clients, their subsidiaries, or affiliated companies at the date of acquisition.
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under development in the table above, was allocated as follows (in millions):
Acquisitions - USD | Acquisitions - Sterling | Acquisitions - Euro | |||
Land | $ | £ | € | ||
Buildings and improvements | |||||
Lease intangible assets (1) | |||||
Other assets (2) | |||||
Lease intangible liabilities (3) | ( | ( | ( | ||
Other liabilities (4) | ( | ( | |||
Total | $ | £ | € |
(1)The weighted average amortization period for acquired lease intangible assets is 10.7 years.
(2)USD-denominated other assets consists entirely of $44.3 million of financing receivables allocated to sale-leaseback transactions.
(3)The weighted average amortization period for acquired lease intangible liabilities is 13.5 years.
The aggregate Sterling-denominated purchase price of the assets acquired during the six months ended June 30,
2026 included contingent consideration obligations related to leasing activities for four U.K. retail park properties
acquired during this period. At June 30, 2026, we had accrued $11.5 million for remaining amounts deemed
probable and estimable.
The properties acquired during the six months ended June 30, 2026 generated total revenue and net income of
$49.8 million and $17.6 million, respectively.
B.Investments in Existing Properties
During the six months ended June 30, 2026, we capitalized costs of $81.0 million on existing properties in our
portfolio, consisting of $76.2 million for building improvements, $4.7 million for re-leasing costs, and $0.1 million for
recurring capital expenditures. In comparison, during the six months ended June 30, 2025, we capitalized costs of
$62.2 million on existing properties in our portfolio, consisting of $59.1 million for building improvements, $2.9
million for re-leasing costs, and $0.2 million for recurring capital expenditures.
C.Properties with Existing Leases
The value of the in-place and above-market leases is recorded to 'Lease intangible assets, net' on our consolidated
balance sheets, and the value of the below-market leases is recorded to 'Lease intangible liabilities, net' on our
consolidated balance sheets.
The values of the in-place leases are amortized as depreciation and amortization expense. The amounts amortized
to expense for all of our in-place leases for the six months ended June 30, 2026 and 2025 were $413.7 million and
$453.5 million, respectively.
The values of the above-market and below-market leases are amortized over the term of the respective leases,
including any bargain renewal options, as an adjustment to rental revenue in our consolidated statements of income
and comprehensive income. The amounts amortized as a net decrease to rental revenue for capitalized above-
market and below-market leases for the six months ended June 30, 2026 and 2025 were $15.0 million and $9.3
million, respectively.
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amortization of the above-market and below-market lease intangibles and the amortization of the in-place lease
intangibles as of June 30, 2026 (in thousands):
Net increase (decrease) to rental revenue | Increase to amortization expense | ||
2026 | $( | $ | |
2027 | ( | ||
2028 | ( | ||
2029 | ( | ||
2030 | ( | ||
Thereafter | |||
Total | $ | $ |
D.Gain on Sales of Real Estate
Three months ended June 30, | Six months ended June 30, | ||||||
2026 | 2025 | 2026 | 2025 | ||||
Number of properties | |||||||
Net sales proceeds | $ | $ | $ | $ | |||
Gain on sales of real estate | $ | $ | $ | $ | |||
4.Investments in Unconsolidated Entities
thousands):
Ownership % | Number of Properties | Carrying Amount (1) of Investment as of | Equity in earnings of unconsolidated entities | ||||||||
Six months ended June 30, | |||||||||||
As of June 30, 2026 | June 30, 2026 | December 31, 2025 | 2026 | 2025 | |||||||
Data Center Joint Venture (2) | $ | $ | $ | $ | |||||||
Bellagio Las Vegas Joint Venture - Common Equity Interest (3) | |||||||||||
Bellagio Las Vegas Joint Venture - Preferred Equity Interest (3) | n/a | n/a | |||||||||
Passport Park Joint Venture (4) | ( | ||||||||||
Total investment in unconsolidated entities | $ | $ | $ | $ | |||||||
(1)As of June 30, 2026, the total carrying amount of the investments exceeded the underlying equity in net assets (i.e., basis difference) by $9.9
million. This basis difference is primarily due to the capitalized interest related to the data center and Passport Park development joint
ventures.
(2)The joint venture with Digital Realty Trust, Inc. is expanding the capacity of its two data centers for the existing client, and our pro-rata share of
the estimated costs for this second phase of the development was $177.7 million as of June 30, 2026.
(3)During each of the six-month periods ended June 30, 2026 and 2025, we recognized interest income of $26.1 8.1
cumulative distributions, included within 'Interest and dividend income on loans and preferred equity investments' in our consolidated
statements of income and comprehensive income. The unconsolidated entity had total debt outstanding of $3.0 billion as of June 30, 2026, all
of which was non-recourse to us with limited customary exceptions.
(4)As of June 30, 2026, we held a 95.0 % common equity interest in the joint venture with Trammell Crow Company ("TCC"), with $70.4 million in
preferred equity. We have committed to investing an additional $60.1 million for development of three industrial facilities. We have determined
that we are not the primary beneficiary of this VIE because significant activities affecting economic performance are shared. TCC is the
managing member, and we do not have substantive kick-out rights. We will continuously evaluate whether we are the primary beneficiary as
power to direct significant activities can change during the joint venture's life. Our maximum loss exposure is limited to our common and
preferred equity investments and committed funding.
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5.Investments in Loans and Financing Receivables
A.Loans
millions):
June 30, 2026 | ||||||||||
Loan Type | Principal Balance | Total Carrying Value (1) | Future Funding Commitments (2) | Weighted Average Term (Years) (3) | Weighted Average Interest Rate (4) | |||||
Secured Loans (5) | $ | $ | $ | |||||||
Construction Loans | ||||||||||
Mortgage Loans | ||||||||||
Unsecured and Mezzanine Loans (6) | ||||||||||
Total | $ | $ | $ | |||||||
December 31, 2025 | ||||||||||
Loan Type | Principal Balance | Total Carrying Value (1) | Future Funding Commitments (2) | Weighted Average Term (Years) (3) | Weighted Average Interest Rate (4) | |||||
Secured Loans | $ | $ | $ | |||||||
Mortgage Loans | ||||||||||
Unsecured and Mezzanine Loans | ||||||||||
Total | $ | $ | $ | |||||||
(1)Total carrying value includes unamortized loan origination costs and allowances for credit losses. Total carrying amount excludes interest
receivable of $38.8 million and $27.8 million as of June 30, 2026 and December 31, 2025, respectively, which is presented in 'Other assets,
net' on our consolidated balance sheets.
(2)Our future funding commitments are subject to our borrowers’ compliance with the financial covenants and other applicable provisions of
each respective loan agreement.
(3)Based on original contractual maturity date assuming no extension options are exercised.
(4)The weighted average interest rate is based on outstanding principal balances and interest rates in place as of June 30, 2026 and December
31, 2025.
(5)Represents loans that have senior ranking security interests in certain assets pledged by borrowers, including material bank accounts,
receivables, real property, or equity securities, or a combination of such assets.
(6)Our investments in unsecured and mezzanine loans represent loans whose proceeds are being used by borrowers to fund data center and
industrial investments.
2026 (in millions):
Loans receivable, net as of March 31, 2026 | $ | |
Principal fundings | ||
Interest drawn on loans | ||
Accretion of original issue cost | ||
Change in allowance for credit losses | ( | |
Foreign currency remeasurement | ( | |
Loans receivable, net as of June 30, 2026 | $ |
Loans receivable, net as of December 31, 2025 | $ | |
Principal fundings | ||
Interest drawn on loans | ||
Accretion of original issue cost | ||
Change in allowance for credit losses | ( | |
Foreign currency remeasurement | ( | |
Loans receivable, net as of June 30, 2026 | $ |
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B.Financing Receivables
leaseback transactions accounted for as financing receivables in accordance with ASC 842, Leases, as of June 30,
2026 and December 31, 2025 (dollars in millions):
Carrying Value as of | |||||
Maturity | June 30, 2026 | December 31, 2025 | |||
Sale-leaseback transactions accounted for as financing receivables (1) | 2027 - 2050 | $ | $ | ||
Net investment in sales type and direct financing leases | 2027 - 2059 | ||||
Total | $ | $ | |||
(1)Amounts represent the portion of the purchase price allocated to above-market lease terms in sale-leaseback transactions, representing an
C.Allowance for Credit Losses
receivable for the three and six months ended June 30, 2026 and June 30, 2025 (in millions):
Three months ended June 30, 2026 | Loans Receivable | Financing Receivable | Unfunded Loan Commitments | Total | |||
Allowance for credit losses as of March 31, 2026 | $ | $ | $ | $ | |||
Provisions for credit losses (1) | ( | ( | |||||
Write-offs (2) | ( | ( | |||||
Foreign currency remeasurement | ( | ( | |||||
Allowance for credit losses as of June 30, 2026 | $ | $ | $ | $ | |||
Six months ended June 30, 2026 | |||||||
Allowance for credit losses as of December 31, 2025 | $ | $ | $ | $ | |||
Provisions for credit losses (1) | |||||||
Write-offs (2) | ( | ( | |||||
Foreign currency remeasurement | ( | ( | ( | ||||
Allowance for credit losses as of June 30, 2026 | $ | $ | $ | $ |
Three months ended June 30, 2025 | Loans Receivable | Financing Receivable | Unfunded Loan Commitments | Total | |||
Allowance for credit losses as of March 31, 2025 | $ | $ | $ | $ | |||
Provisions for credit losses | ( | ||||||
Write-offs | ( | ( | |||||
Foreign currency remeasurement | |||||||
Allowance for credit losses as of June 30, 2025 | $ | $ | $ | $ | |||
Six months ended June 30, 2025 | |||||||
Allowance for credit losses as of December 31, 2024 | $ | $ | $ | $ | |||
Provisions for credit losses | |||||||
Write-offs | ( | ( | |||||
Foreign currency remeasurement | |||||||
Allowance for credit losses as of June 30, 2025 | $ | $ | $ | $ |
(1) The provisions for credit losses on loans receivable were primarily attributable to initial expected credit losses on loans acquired or originated
during the three and six months ended June 30, 2026. For the three months ended June 30, 2026, the increase was partially offset by
favorable changes in estimated credit losses for existing loans.
(2) For the three and six months ended June 30, 2026, write-offs were primarily related to fully reserved financing receivables written off during the
periods.
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6.Credit Facilities and Commercial Paper Programs
A.RI Credit Facilities
We have $4.0 billion unsecured multicurrency revolving credit facilities, which include (a) a $2.0 billion unsecured
multicurrency revolving credit facility, consisting of two tranches, that will mature in April 2027 and (b) a $2.0 billion
unsecured multicurrency revolving credit facility, consisting of two tranches, that will mature in April 2029
(collectively, the “RI Credit Facilities”). The RI Credit Facilities also include two six-month extensions for each facility,
which can be exercised at our option.
The RI Credit Facilities allow us to borrow (a) under the two-year revolving credit facility (i) in up to four currencies
(including USD) under a $1.5 billion tranche thereunder and (ii) in up to 15 currencies (including USD) under a
$500.0 million tranche thereunder, and (b) under the four-year revolving credit facility (i) in up to four currencies
(including USD) under a $1.5 billion tranche thereunder and (ii) in up to 15 currencies (including USD) under a
$500.0 million tranche thereunder. The aggregate capacity of the RI Credit Facilities can be increased to up to $5.0
billion pursuant to an accordion expansion feature, which is subject to obtaining lender commitments.
Under the RI Credit Facilities, our investment grade credit ratings as of June 30, 2026 provide for (i) USD
borrowings at the Secured Overnight Financing Rate (“SOFR”) plus 0.725 % and (ii) British Pound Sterling ("GBP")
borrowings at the Sterling Overnight Indexed Average (“SONIA”) plus 0.725 %, and (iii) Euro ("EUR") borrowings at
Euro Interbank Offered Rate (“EURIBOR”) plus 0.725 %. A revolving credit facility commitment fee of 0.125 % is
payable on the total commitment amount. The credit agreement also provides flexibility to elect different interest rate
tenors or daily rate options for each currency tranche.
As of June 30, 2026, we had a borrowing capacity of $3.0 billion available on our RI Credit Facilities (subject to
customary conditions to borrowing) and an outstanding balance of $1.0 billion, including £189.0 million GBP and
€692.0 million EUR borrowings. As of December 31, 2025, we had a borrowing capacity of $2.7 billion and an
outstanding balance of $1.3 billion, including £597.0 million GBP and €444.0 million EUR borrowings.
The weighted average interest rate on outstanding borrowings under our RI Credit Facilities was 3.3 % during the six
months ended June 30, 2026. The weighted average interest rate on outstanding borrowings was 4.3 % during the
six months ended June 30, 2025. As of June 30, 2026, the weighted average interest rate on outstanding
borrowings under our RI Credit Facilities was 3.3 %.
As of June 30, 2026, origination costs of $14.3 million for RI Credit Facilities are included in 'Other assets, net', as
compared to $19.0 million as of December 31, 2025, on our consolidated balance sheets. These costs are being
amortized over the remaining term of our RI Credit Facilities.
In July 2026, we amended our RI Credit Facilities. For further details, see note 19, Subsequent Events.
B.Fund Credit Facilities
The Fund has a $1.38 billion unsecured credit facility, which provides for (a) up to $1.0 billion unsecured revolving
credit facility and (b) up to $380.0 million unsecured delayed draw term loan (collectively, the “Fund Credit
Facilities”). During the second quarter of 2026, the Fund drew all $380.0 million available under its unsecured
delayed draw term loan and used the proceeds to repay borrowings under its unsecured revolving credit facility. For
further details on the delayed draw term loan, see note 7, Term Loans. The revolving credit facility under the Fund
Credit Facilities matures in April 2029 and includes two six-month extensions, which can be exercised at our option.
The amount under the unsecured revolving credit facility can be increased to up to $2.0 billion pursuant to an
accordion expansion feature, which is subject to obtaining lender commitments.
Borrowings under the unsecured revolving credit facility bear interest at one-month term SOFR plus 1.050 %. A
revolving credit facility commitment fee of 0.150 % is payable on the total commitment amount.
As of June 30, 2026, we had available borrowing capacity of $718.5 million under our unsecured revolving credit
facility (subject to customary conditions to borrowing) and an outstanding balance of $281.5 million. As of December
31, 2025, we had available borrowing capacity under our Fund Credit Facilities of $1.2 billion and an outstanding
balance of $182.0 million, which included the delayed draw term loan until fully drawn in the second quarter of 2026.
The weighted average interest rate on outstanding borrowings under our unsecured revolving credit facility was
outstanding borrowings under our unsecured revolving credit facility was 4.7 %.
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As of June 30, 2026, origination costs of $5.3 million for the unsecured revolving credit facility are included in 'Other
assets, net' as compared to $6.2 million as of December 31, 2025, on our consolidated balance sheets, and are
being amortized over the remaining term of the facility. Prior to the second quarter of 2026, origination costs related
to the Fund Credit Facilities included costs for the delayed draw term loan.
C.Commercial Paper Programs
We have a USD-denominated unsecured commercial paper program, under which we may issue unsecured
commercial paper notes up to a maximum aggregate amount outstanding of $1.5 billion, as well as a EUR-
denominated unsecured commercial paper program, which permits us to issue additional unsecured commercial
notes up to a maximum aggregate amount of $1.5 billion (or foreign currency equivalent). Our EUR-denominated
unsecured commercial paper program may be issued in USD or various foreign currencies, including but not limited
to, EUR, GBP, Swiss Francs, Yen, Canadian Dollars, and Australian Dollars, in each case, pursuant to customary
terms in the European commercial paper market.
The commercial paper ranks pari passu in right of payment with all of our other unsecured senior indebtedness
outstanding, exclusive of unexchanged bonds from our merger with VEREIT, Inc. in 2021 and unexchanged Spirit
Realty Capital, Inc. (“Spirit”) bonds, including borrowings under our revolving credit facilities, our term loans and our
outstanding senior unsecured notes (and is structurally subordinated to all our subsidiary debt). Proceeds from
commercial paper borrowings are used for general corporate purposes.
As of June 30, 2026, the balance of borrowings outstanding under our commercial paper programs totaled $1.4
billion, including $961.1 million of USD borrowings and €421.0 million of EUR borrowings, compared to
$516.8 million outstanding commercial paper borrowings, including €407.0 million of EUR borrowings and $39.0
million of USD borrowings, as of December 31, 2025. The weighted average interest rate on outstanding borrowings
under our commercial paper programs was 3.0
use our revolving credit facilities as a liquidity backstop for the repayment of the notes issued under the commercial
paper programs. The commercial paper borrowings generally carry a term of less than a year.
In July 2026, we amended our USD-denominated and EUR-denominated unsecured commercial paper programs.
For further details, see note 19, Subsequent Events.
D.Financial Covenants
Our credit facilities are subject to various leverage and interest coverage ratio limitations, and as of June 30, 2026,
we were in compliance with the covenants under our credit facilities.
7.Term Loans
A.2026 Term Loan Facility
In March 2026, we closed a $693.9 million unsecured term loan due January 2036 at a fixed rate of 4.9 % (the "2026
Term Loan Facility") and executed a cross-currency swap on $500.0 million of proceeds for approximately
€431.0 million, achieving an effective blended borrowing rate of 4.34 %. As of June 30, 2026, the outstanding
principal balance was $703.0 million.
B.2026 Delayed Draw Term Loan
During the three months ended June 30, 2026, the Fund fully drew on its $380.0 million unsecured delayed draw
term loan under the Fund Credit Facilities. The delayed draw term loan matures in April 2028, includes four six-
interest rate at 4.92 %.
C.2025 Term Loan Facility
Our term loan agreement governing our multi-currency term loan provides for a £900.0 million Sterling-denominated
term loan facility that will initially mature in January 2028, before giving effect to one twelve-month extension option.
As of June 30, 2026, we had an outstanding balance of $1.2 billion. Our A3/A- credit ratings provide for a borrowing
rate of 80 basis points over the applicable benchmark rate, which includes adjusted SOFR for USD-denominated
loans and adjusted SONIA for GBP-denominated loans. In conjunction with the closing, we executed variable-to-
fixed interest rate swaps, which fix the weighted average per annum interest rate at 4.3 % over the two-year term.
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D.2024 Term Loan Facility
In January 2024, in connection with the merger with Spirit (the "Merger"), we entered into an amended and restated
term loan agreement that replaced Spirit's then-existing term loans with various lenders. As of June 30, 2026, we
had an outstanding balance of $500.0 million, due August 2027, which is subject to interest rate swaps that fix the
effective interest rate at 3.3 %.
E.Deferred Financing Costs
Deferred financing costs were $14.5 million as of June 30, 2026 and are included net of the term loans' principal
balance, as compared to $9.4 million as of December 31, 2025 on our consolidated balance sheets. These costs
are being amortized over the remaining term of the term loans.
8.Notes Payable
A.General
denominated. Foreign-denominated notes are converted at the applicable exchange rate on the balance sheet date.
The following are sorted by maturity date (in thousands):
Carrying Value (USD) as of | ||||||||
Maturity Dates | Principal (Currency Denomination) | June 30, 2026 | December 31, 2025 | |||||
January 13, 2026 | $ | $ | $ | |||||
March 15, 2026 | $ | |||||||
June 1, 2026 | $ | |||||||
September 15, 2026 | $ | |||||||
October 15, 2026 | $ | |||||||
January 14, 2027 | £ | |||||||
January 15, 2027 | $ | |||||||
January 15, 2027 | $ | |||||||
July 13, 2027 | £ | |||||||
August 15, 2027 | $ | |||||||
January 15, 2028 | $ | |||||||
January 15, 2028 | $ | |||||||
March 15, 2028 | $ | |||||||
June 15, 2028 | $ | |||||||
December 15, 2028 | $ | |||||||
due 2029 (2) | January 15, 2029 | $ | ||||||
February 1, 2029 | $ | |||||||
February 15, 2029 | $ | |||||||
June 15, 2029 | $ | |||||||
July 15, 2029 | $ | |||||||
October 15, 2029 | £ | |||||||
December 15, 2029 | $ | |||||||
January 15, 2030 | $ | |||||||
March 15, 2030 | $ | |||||||
June 30, 2030 | £ | |||||||
July 6, 2030 | € | |||||||
December 15, 2030 | £ | |||||||
January 15, 2031 | $ | |||||||
February 15, 2031 | $ | |||||||
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Carrying Value (USD) as of | ||||||||
Maturity Dates | Principal (Currency Denomination) | June 30, 2026 | December 31, 2025 | |||||
June 20, 2031 | € | |||||||
December 5, 2031 | £ | |||||||
February 15, 2032 | $ | |||||||
June 30, 2032 | £ | |||||||
October 13, 2032 | $ | |||||||
December 15, 2032 | $ | |||||||
February 1, 2033 | $ | |||||||
March 15, 2033 | $ | |||||||
April 15, 2033 | $ | |||||||
July 13, 2033 | £ | |||||||
July 15, 2033 | $ | |||||||
February 15, 2034 | $ | |||||||
May 20, 2034 | £ | |||||||
July 6, 2034 | € | |||||||
March 15, 2035 | $ | |||||||
April 15, 2035 | $ | |||||||
June 20, 2035 | € | |||||||
June 30, 2037 | £ | |||||||
December 5, 2039 | £ | |||||||
September 4, 2041 | £ | |||||||
January 14, 2042 | £ | |||||||
March 15, 2047 | $ | |||||||
September 1, 2054 | $ | |||||||
Total principal amount | $ | $ | ||||||
Unamortized net discounts and deferred financing costs | ( | ( | ||||||
$ | $ | |||||||
(1) Interest paid annually. Interest on the remaining senior unsecured notes and bond obligations included in the table is paid semi-annually.
(2) Please refer to Convertible Bond Issuance below for more details.
unamortized net discounts, deferred financing costs (dollars in millions):
Year of Maturity | Principal | |
2026 | $ | |
2027 | ||
2028 | ||
2029 | ||
2030 | ||
Thereafter | ||
Total | $ |
As of June 30, 2026, the weighted average interest rate on our notes and bonds payable was 3.9 % and the
weighted average remaining years until maturity was 5.8 years.
Interest incurred on the notes and bonds was $250.3 million and $229.4 million for the three months ended June 30,
2026 and 2025, respectively, and $494.7 million and $449.3 million for the six months ended June 30, 2026 and
2025, respectively.
Our outstanding notes and bonds are unsecured; accordingly, we have not pledged any assets as collateral for
these or any other obligations.
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The notes and bonds contain various covenants, including: (i) a limitation on incurrence of any debt which would
cause our debt to total adjusted assets ratio to exceed 60 %; (ii) a limitation on incurrence of any secured debt which
would cause our secured debt to total adjusted assets ratio to exceed 40 %; (iii) a limitation on incurrence of any
debt which would cause our debt service coverage ratio to be less than 1.5 times; and (iv) the maintenance at all
times of total unencumbered assets not less than 150 % of our outstanding unsecured debt. As of June 30, 2026, we
were in compliance with these covenants.
B.Convertible Bond Issuance
In January 2026, we issued $862.5 million principal amount of 3.500 % convertible senior notes due January 2029 in
a private offering, resulting in net proceeds of approximately $845.1 million. We used approximately $101.9 million
of the net proceeds to repurchase approximately 1.8 million shares of our common stock concurrently with the
pricing of the offering. The notes are senior, unsecured obligations of Realty Income and accrue interest at a rate of
repurchased, redeemed or converted. Before October 15, 2028, noteholders have the right to convert their notes
only upon the occurrence of certain events, including when the Company's stock price exceeds 130 % of the
applicable conversion price for a specified period, or upon the occurrence of certain corporate events, including a
fundamental change. From and after October 15, 2028, noteholders may convert their notes at any time at their
election until the close of business on the second scheduled trading day immediately before the maturity date. Upon
conversion, we are required to settle the principal amount in cash and may, at our election, settle any conversion
premium in cash, shares of our common stock, or a combination thereof, based on the applicable conversion rate.
The initial conversion rate is 14.4051 shares of common stock per $1,000 principal amount of notes, which
represents an initial conversion price of approximately $69.42 per share of common stock. The conversion rate will
be subject to adjustment upon the occurrence of certain events, including specified make-whole fundamental
change events as defined in the indenture.
C.Note Issuances
2026 Issuance | Date of Issuance | Maturity Date | Principal amount | Price of par value | Effective yield to maturity | |||||
April 2026 | April 2033 | $ |
In July 2026, we issued €600.0 million of 3.625 % senior unsecured notes due July 2032. See note 19, Subsequent
Events, to the consolidated financial statements for further details.
D.Note Repayments
maturity:
2026 Repayments | Date of Issuance | Maturity Date | Principal amount (in millions) | |||
January 2023 | January 2026 | $ | ||||
December 2020 | March 2026 | $ | ||||
June 2016 | June 2026 | $ |
9.Noncontrolling Interests
As of June 30, 2026, we have 13 entities with noncontrolling interests that we consolidate, including the Fund,
Apollo, Realty Income, L.P., and interests in consolidated property partnerships not wholly-owned by us.
The Fund is an open-end, perpetual life private fund, which is consolidated by Realty Income. In March 2026, we
closed our cornerstone equity capital raise round, securing $1.7 billion in commitments from third-party institutional
investors, of which $167.5 million was committed during the six months ended June 30, 2026. During the same
period, we called $948.0 million of capital. As of June 30, 2026, we owned approximately 26.8 % of the outstanding
limited partnership interests in the Fund.
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In March 2026, we established our Managed Insurance and Retirement Annuity investment platform as a vehicle to
pursue various co-investment opportunities with institutional investors. On March 31, 2026, we completed the
formation of MDC Mercury 2604 Venture, LLC (the "Apollo JV") and entered into an Amended and Restated Limited
Liability Company Agreement (the “JV Agreement”) with Apollo in connection with our Managed Insurance and
Retirement Annuity strategic initiative. Pursuant to the JV Agreement, we contributed 492 net lease properties in
exchange for 51,000,000 Class A Shares in the Apollo JV, and Apollo contributed $1.0 billion in cash in exchange for
a noncontrolling equity interest of 49,000,000 Class B Shares in the Apollo JV (such contributions by Realty Income
and Apollo, collectively, the "Apollo JV Transaction").
The Apollo JV is a variable interest entity ("VIE") under ASC 810 because the decision-making authority of the
Manager (our wholly owned subsidiary, Realty Income Property Management Co I, LLC) is not conveyed through an
equity interest, and the equity holders as a group therefore lack the power to direct the activities that most
significantly affect the Apollo JV's economic performance. We consolidate the Apollo JV as its primary beneficiary
because we have both (i) the power to direct the activities that most significantly affect its economic performance
through our role as the sole exclusive Manager that is exercisable independent of our equity ownership and (ii) the
obligation to absorb losses and right to receive benefits that could potentially be significant to the Apollo JV through
our 51 % equity interest and other contractual arrangements. The Class B Shares are classified as permanent equity
(noncontrolling interest) on our consolidated balance sheet because all redemption features are solely within our
control.
The Apollo JV Transaction was accounted for as an issuance of noncontrolling interest in a consolidated subsidiary
without a loss of control. We received $1.0 billion for Apollo’s initial capital contribution. The carrying amount of
Apollo's 49 % share of the net assets was $778.9 million, which was recognized as noncontrolling interest, with the
difference of $238.5 million recorded as an increase to additional paid-in capital ("APIC"). Direct and incremental
transaction costs of $20.7 million were recorded as a reduction of APIC for the six months ended June 30, 2026.
The JV Agreement provides for, among other things, quarterly distributions of available cash flow to the Apollo JV’s
members. Prior to Apollo achieving the Target IRR (as defined in the JV Agreement), the Class B Member will
receive a default allocation of 55 % of available cash flow, which may decrease to 49 % if the Apollo JV’s NOI
outperforms an upper level of certain performance metric, or increase to 60 % if the Apollo JV’s NOI underperforms
a lower level of certain performance metric. Because the parties' economic interests are not proportionate to their
stated ownership percentages, we allocate income and loss attributable to the noncontrolling interest using the
hypothetical liquidation at book value ("HLBV") method, taking into account any capital transactions between the
Company and Apollo.
With respect to Realty Income, L.P., as of June 30, 2026, outstanding common partnership units in our operating
partnership represented a 9.95 % ownership interest owned by third parties. We hold the remaining 90.05 % interest
and consolidate the entity.
(in thousands):
U.S. Core Plus Fund | Apollo | Realty Income, L.P. units (1) | Other Noncontrolling Interests | Total | ||||||
Carrying value as of December 31, 2025 | $ | $ | $ | $ | $ | |||||
Contributions | ||||||||||
Distributions | ( | ( | ( | ( | ||||||
Allocation of net income | ( | |||||||||
Reallocation of equity | ( | ( | ( | |||||||
Purchase of noncontrolling interests | ( | ( | ||||||||
Carrying value as of June 30, 2026 | $ | $ | $ | $ | $ |
(1) 2,681,808
As of June 30, 2026, we are considered the primary beneficiary of our Fund, Apollo, Realty Income, L.P. and other
VIEs. For further information, see note 1, Summary of Significant Accounting Policies.
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10.Fair Value Measurements
Fair value is defined as the price that would be received from the sale of an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date (the exit price).
ASC 820, Fair Value Measurements and Disclosures, sets forth a fair value hierarchy that categorizes inputs to
valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted
prices in active markets for identical assets or liabilities and lowest priority to unobservable inputs. Categorization
within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement.
•Level 1 – Quoted market prices in active markets for identical assets and liabilities
•Level 2 – Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities,
quoted prices in markets that are not active, or other market-corroborated inputs
•Level 3 – Inputs that are unobservable and significant to the overall fair value measurement
We evaluate our hierarchy disclosures each quarter and depending on various factors, it is possible that an asset or
liability may be classified differently from period to period. Changes in the type of inputs may result in a
reclassification for certain assets. We have not historically had changes in classifications and do not expect that
changes in classifications between levels will be frequent.
2026 and December 31, 2025 (in millions):
June 30, 2026 | ||||||||
Hierarchy Level | ||||||||
Carrying Value | Level 1 | Level 2 | Level 3 | |||||
Assets: | ||||||||
Loans receivable | $ | $ | $ | $ | ||||
Derivative assets | ||||||||
Total assets | $ | $ | $ | $ | ||||
Liabilities: | ||||||||
Term loans (1) | $ | $ | $ | $ | ||||
Mortgages payable (1) | ||||||||
Notes and bonds payable (1) | ||||||||
Derivative liabilities | ||||||||
Total liabilities | $ | $ | $ | $ | ||||
(1) Excludes non-cash net premiums and discounts, and deferred financing costs.
December 31, 2025 | ||||||||
Hierarchy Level | ||||||||
Carrying Value | Level 1 | Level 2 | Level 3 | |||||
Assets: | ||||||||
Loans receivable | $ | $ | $ | $ | ||||
Derivative assets | ||||||||
Total assets | $ | $ | $ | $ | ||||
Liabilities: | ||||||||
Term loans | $ | $ | $ | $ | ||||
Mortgages payable | ||||||||
Notes and bonds payable | ||||||||
Derivative liabilities | ||||||||
Total liabilities | $ | $ | $ | $ | ||||
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A.Financial Instruments Not Measured at Fair Value on our Consolidated Balance Sheets
The fair value of short-term financial instruments such as cash and cash equivalents, accounts receivable, escrow
deposits, accounts payable, distributions payable, revolving credit facilities and commercial paper borrowings, and
other liabilities approximate their carrying value in the accompanying consolidated balance sheets, due to their
short-term nature.
measured at fair value on our consolidated balance sheets (in millions):
June 30, 2026 | December 31, 2025 | |||||||
Carrying value | Fair value | Carrying value | Fair value | |||||
Loans receivable | $ | $ | $ | $ | ||||
Term loans (1) | $ | $ | $ | $ | ||||
Mortgages payable (1) | $ | $ | $ | $ | ||||
Notes and bonds payable (1) | $ | $ | $ | $ | ||||
The estimated fair values of our mortgage loans receivable, unsecured and other loans, private senior secured
loans receivable, our 2026 Term Loan Facility, mortgages payable, and private senior notes payable have been
calculated by discounting the future cash flows using an interest rate based upon the relevant input, such as forward
interest rate curve, plus an applicable credit-adjusted spread. Because this methodology includes unobservable
inputs that reflect our own internal assumptions and calculations, the measurement of estimated fair values related
to the named financial instruments are categorized as level 3 of the fair value hierarchy.
The estimated fair values of our publicly-traded senior secured loans receivable, publicly-traded senior notes and
bonds payable, and other term loans as discussed in note 7, Term Loans are based upon indicative market prices
and recent trading activity of each financial instrument. Because this methodology includes inputs that are less
observable by the public and are not necessarily reflected in active markets, the measurement of the estimated fair
values related to these financial instruments is categorized as level 2 of the fair value hierarchy. The fair value
estimation of secured loans receivable that are not publicly traded similarly incorporates less observable, market-
corroborated inputs.
Prior to the second quarter of 2026, the aggregate fair value of our term loans approximated carrying value due to
the frequent repricing of the variable interest rate charged on the borrowing.
B.Financial Instruments Measured at Fair Value on a Recurring Basis
For derivative assets and liabilities, we may utilize interest rate swaps, interest rate swaptions, and forward-starting
swaps to manage interest rate risk, and cross-currency swaps and foreign currency forwards to manage foreign
currency risk. The valuation of these instruments is determined using widely accepted valuation techniques,
including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the
contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs,
including interest rate curves, spot and forward rates, as well as option volatility.
Derivative fair values also include credit valuation adjustments to appropriately reflect both our own nonperformance
risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair
value of our derivative contracts for the effect of nonperformance risk, we have considered the impact of netting and
any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees.
Although we have determined that the majority of the inputs used to value our derivatives fall within level 2 on the
fair value hierarchy, the credit valuation adjustments associated with our derivatives utilize level 3 inputs, such as
estimates of current credit spreads, to evaluate the likelihood of default by ourselves and our counterparties.
However, as of June 30, 2026 and December 31, 2025, we assessed the significance of the impact of the credit
valuation adjustments on the overall valuation of our derivative positions and determined that the credit valuation
adjustments are not significant to the overall valuation of our derivatives. As a result, we determined that our
derivative valuations in their entirety are classified as level 2. For more details on our derivatives, see note 11,
Derivative Instruments.
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C.Items Measured at Fair Value on a Non-Recurring Basis
Impairment of Real Estate Investments
Certain financial and nonfinancial assets and liabilities are measured at fair value on a non-recurring basis and are
subject to fair value adjustments only under certain circumstances, such as when an impairment write-down occurs.
Depending on impairment triggering events during the applicable period, impairments are typically recorded for
properties sold, in the process of being sold, vacant, in bankruptcy, or experiencing difficulties with collection of rent.
indicated below (dollars in millions):
Three months ended June 30, | Six months ended June 30, | ||||||
2026 | 2025 | 2026 | 2025 | ||||
Carrying value prior to impairment | $ | $ | $ | $ | |||
Less: total provisions for impairment of real estate | ( | ( | ( | ( | |||
Carrying value after impairment | $ | $ | $ | $ | |||
Number of properties: | |||||||
Classified as held for sale | |||||||
Classified as held for investment | |||||||
Sold | |||||||
The valuation of impaired assets is determined by using widely accepted valuation techniques including income
capitalization approach, using net operating income for each property and applying a weighted average
capitalization rate of 8.6 %, recent comparable sales transactions, broker opinions of value with discounts based on
management judgment, and purchase offers received from third parties, which are level 3 inputs. We may consider
a single valuation technique or multiple valuation techniques, as appropriate, when estimating the fair value of such
real estate. Estimating future cash flows is highly subjective and estimates can differ materially from actual results.
11.Derivative Instruments
In the normal course of business, our operations are exposed to economic risks from interest rates and foreign
currency exchange rates. We may enter into derivative financial instruments to offset these underlying economic
risks.
We enter into foreign currency forward contracts to sell GBP or EUR and buy USD to hedge the foreign currency
risk associated with forecasted foreign-currency-denominated cash flows. There are no amounts excluded from the
assessment of hedge effectiveness for cash flow hedges of foreign exchange risk. We also use variable-to-fixed
interest rate swaps and interest rate swaption agreements to add stability to interest expense and to manage our
exposure to interest rate movements associated with our term loans or forecasted debt issuances. If it becomes
probable that a forecasted transaction will not occur within the specific time period or within an additional two-month
period thereafter, any related amounts deferred in AOCI are recognized immediately in earnings. During the six
months ended June 30, 2026, and 2025, no such amounts were recognized through the caption entitled 'Interest' in
our consolidated statements of income and comprehensive income.
Derivatives Designated as Hedging Instruments - Fair Value Hedges
Periodically, we enter into and designate fixed-to-floating interest rate swaps to manage interest rate risk by
managing our mix of fixed-rate and variable-rate debt. We also designate some of our cross-currency swaps as fair
value hedges as we use them to hedge foreign currency risk associated with changes in spot rates on foreign-
denominated on certain-foreign currency-denominated monetary assets and liabilities. For these hedging
instruments, we have elected to exclude the change in fair value of the cross-currency swaps attributable to the
difference between the spot and forward prices from the assessment of hedge effectiveness (the "excluded
component"). Changes in the fair value of the cross-currency swaps attributable to these excluded components are
recorded to other comprehensive income and subsequently recognized in 'Foreign currency and derivative loss, net'
on a systematic and rational basis, as net cash settlements and interest accruals on the respective cross currency
swaps occur, over the remaining life of the hedging instruments.
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Derivatives Designated as Hedging Instruments - Net Investment Hedges
To mitigate the foreign currency exchange rate variations associated with our investment in EUR-denominated
foreign operations, we may enter into derivative instruments, such as cross-currency swaps that qualify as net
investment hedges under the criteria prescribed in accordance with ASC 815-20, Hedging - General. We use the
spot method of assessing hedge effectiveness and apply the consistent election to the excluded component by
recognizing changes in the fair value of the hedging instruments attributable to the excluded component in the same
manner as described above. Any difference between the change in the fair value of the excluded components and
the amounts recognized in earnings is reported in other comprehensive income as part of the foreign cumulative
translation adjustment. The gain or loss on the portion of the derivative instruments included in the assessment of
effectiveness is reported in other comprehensive income as part of the 'Foreign currency translation adjustment' line
item, to the extent the relationship is highly effective. If our net investment changes during a reporting period, the
hedge relationship will be assessed for whether a de-designation is warranted (only if the hedge notional amount is
outside of prescribed tolerance). Further, certain EUR-denominated and GBP-denominated bonds and borrowings
under our revolving credit facilities and term loans may also be designated as, and are effective as, net investment
hedges. Changes in the value of such borrowings, related to changes in the spot rates, will be recorded in the same
manner as foreign currency translation adjustments. As of June 30, 2026, the total principal amount of foreign
currency debt obligations designated as net investment hedges was $2.4 billion.
Derivatives Not Designated as Hedging Instruments
We enter into foreign currency exchange swap agreements to economically hedge foreign currency exposures
arising in the normal course of business. These derivative contracts generally mature within one year and are not
designated as hedge instruments for accounting purposes. As the currency exchange swap is not accounted for as
a hedging instrument, the change in fair value is recorded in earnings through the caption entitled 'Foreign currency
2026 and December 31, 2025 (dollars in millions):
Derivative Type | Number of Instruments (1) | Notional Amount as of | Weighted Average Strike Rate (2) | Maturity Date (3) | Fair Value - asset (liability) as of | ||||
Derivatives Designated as Hedging Instruments | June 30, 2026 | December 31, 2025 | June 30, 2026 | December 31, 2025 | |||||
Interest rate swaps (4) | $ | $ | Aug 2027 - Apr 2030 | $ | $ | ||||
Cross-currency swaps - Fair Value | (5) | Feb 2029 - Jan 2036 | ( | ( | |||||
Cross-currency swaps - Net Investment | (6) | Oct 2032 | ( | ( | |||||
Foreign currency forwards | (7) | Jul 2026 - Dec 2028 | ( | ||||||
$ | $ | $( | $( | ||||||
Derivatives not Designated as Hedging Instruments | |||||||||
Currency exchange swaps | $ | $ | (8) | Jul 2026 - Jan 2027 | $ | $( | |||
$ | $ | $ | $( | ||||||
Total of all Derivatives | $ | $ | $( | $( | |||||
(1)This column represents the number of instruments outstanding as of June 30, 2026.
(2)Weighted average strike rate is calculated using the notional value as of June 30, 2026.
(3)This column represents maturity dates for instruments outstanding as of June 30, 2026.
(4)During the three months ended June 30, 2026, we entered into five variable-to-fixed interest rate swaps in connection with the delayed draw
term loan under the Fund Credit Facilities.
(5)USD fixed rate of 5.625 % and EUR weighted average fixed rate of 4.681 %. USD fixed rate of 3.950 % and GBP weighted average fixed rate of
fixed rate of 3.806 %.
(6)USD fixed rate of 5.625 % and EUR weighted average fixed rate of 4.716 %.
(7)Weighted average exchange rates of 1.34 for GBP-USD and 1.21 for EUR-USD.
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We measure our derivatives at fair value and include the balances within 'Other assets, net' and 'Accounts payable
and accrued expenses' on our consolidated balance sheets.
We have agreements with each of our derivative counterparties containing provisions under which we could be
declared in default on our derivative obligations if repayment of our indebtedness is accelerated by the lender due to
our default.
adjustments in other comprehensive income (in thousands):
Three months ended June 30, | Six months ended June 30, | ||||||
Derivatives in Cash Flow Hedging Relationships | 2026 | 2025 | 2026 | 2025 | |||
Interest rate swaps | $( | $( | $ | $( | |||
Foreign currency forwards | ( | ( | |||||
Interest rate swaptions | ( | ( | ( | ( | |||
Total derivatives in cash flow hedging relationships | $( | $( | $ | $( | |||
Derivatives in Fair Value Hedging Relationships | |||||||
Cross-currency swaps - Fair Value | $( | $( | $( | $ | |||
Total derivatives in fair value hedging relationships | $( | $( | $( | $ | |||
Total unrealized (loss) gain on derivatives, net | $( | $( | $ | $( | |||
Derivatives and Non-derivatives in Net Investment Hedging Relationships | |||||||
Cross-currency swaps - Net Investment | $( | $( | $ | $( | |||
Foreign currency debt | ( | ( | |||||
Total unrealized gain (loss) recorded in foreign currency translation adjustment | $ | $( | $ | $( | |||
Three months ended June 30, | Six months ended June 30, | ||||||||
Derivatives in Cash Flow Hedging Relationships | Location of Increase (Decrease) Recognized in Income | 2026 | 2025 | 2026 | 2025 | ||||
Interest rate swaps | Interest | $ | $ | $ | $ | ||||
Foreign currency forwards | Foreign currency and derivative loss, net | ( | ( | ( | ( | ||||
Interest rate swaptions | Interest | ||||||||
Total derivatives in cash flow hedging relationships | $ | $( | $( | $ | |||||
Derivatives in Fair Value Hedging Relationships | |||||||||
Cross-currency swaps - Fair Value (excluded component) | Foreign currency and derivative loss, net | $ | $( | $ | $( | ||||
Total derivatives in fair value hedging relationships | $ | $( | $ | $( | |||||
Derivatives in Net Investment Hedging Relationships | |||||||||
Cross-currency swaps - Net Investment (excluded component) | Foreign currency and derivative loss, net | $ | $ | $ | $ | ||||
Total derivatives in net investment hedging relationships | $ | $ | $ | $ | |||||
Net increase (decrease) to net income | $ | $( | $( | $ | |||||
We expect to reclassify $13.6 million from AOCI as a decrease to interest expense relating to interest rate swaps
and $9.9 million from AOCI as a decrease to foreign currency loss relating to foreign currency forwards within the
next twelve months.
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Three months ended June 30, | Six months ended June 30, | ||||||
2026 | 2025 | 2026 | 2025 | ||||
Realized foreign currency and derivative loss, net: | |||||||
Loss on the settlement of undesignated derivatives | $( | $( | $( | $( | |||
Loss on the settlement of designated derivatives reclassified from AOCI | ( | ( | ( | ( | |||
Gain (loss) on the settlement of transactions with third parties | ( | ( | |||||
Total realized foreign currency and derivative loss, net | $( | $( | $( | $( | |||
Unrealized foreign currency and derivative gain, net: | |||||||
Gain (loss) on the change in fair value of undesignated derivatives | $ | $( | $ | $( | |||
Gain (loss) on remeasurement of certain assets and liabilities | ( | ||||||
Total unrealized foreign currency and derivative gain, net | $ | $ | $ | $ | |||
Total foreign currency and derivative loss, net | $( | $( | $( | $( | |||
12.Lessor Operating Leases
As of June 30, 2026, we owned or held interests in 15,588 properties. Of the 15,588 properties, 15,218 , or 97.6 %,
are single-tenant properties, and the remainder are multi-tenant properties. As of June 30, 2026, 188 properties
were available for lease or sale. The majority of our leases are accounted for as operating leases.
As of June 30, 2026, most of the properties in our portfolio were leased under net lease agreements where our
client pays or reimburses us for property taxes and assessments and carries insurance coverage for public liability,
property damage, fire, and extended coverage.
thousands):
Three months ended June 30, | Six months ended June 30, | ||||||
2026 | 2025 | 2026 | 2025 | ||||
Minimum rent | $ | $ | $ | $ | |||
Tenant reimbursement income | |||||||
Straight-line rents | |||||||
Above and below-market lease amortization | ( | ( | ( | ( | |||
Percentage rent | |||||||
Lease termination income | |||||||
Other rent | |||||||
Provision for doubtful accounts | ( | ( | ( | ( | |||
Total rental revenue (including reimbursements) | $ | $ | $ | $ | |||
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13.Stockholders' Equity
A.Common Stock
We pay monthly distributions to our common stockholders. The following is a summary of monthly distributions paid
per common share for the periods indicated below:
Six months ended June 30, | |||
Month | 2026 | 2025 | |
January | $ | $ | |
February | |||
March | |||
April | |||
May | |||
June | |||
Total | $ | $ | |
As of June 30, 2026, a distribution of $0.2710
B.At-the-Market ("ATM") Program
In May 2026, we replaced our prior ATM program with a new ATM program, pursuant to which we may offer and sell
up to 150.0 million shares of common stock (1) by us to, or through, a consortium of banks acting as our sales
agents or (2) by a consortium of banks acting as forward sellers on behalf of any forward purchasers contemplated
thereunder, in each case by means of ordinary brokers' transactions on the NYSE under the ticker symbol "O" at
prevailing market prices or at negotiated prices. The current ATM program permits us to enter into both contingent
and non-contingent forward sale agreements. Under certain forward sale agreements, the applicable forward
purchaser may elect whether to exercise a purchase contingency (the "Contingency"), and any unexercised
Contingency is automatically exercised at expiration if the market price exceeds the applicable forward price. We
may receive a contingency premium in connection with such arrangements. Upon settlement, subject to certain
exceptions, we may elect, in our sole discretion, to cash settle or net share settle all or any portion of our obligations
under any forward sale agreements, in which cases we may not receive any proceeds (in the case of cash
settlement) or will not receive any proceeds (in the case of net share settlement), and we may owe cash (in the
case of cash settlement) or shares of our common stock (in the case of net share settlement) to the relevant forward
purchaser. As of June 30, 2026, we had 138.9 million shares remaining available for future issuance under our ATM
program. We anticipate maintaining the availability of our ATM program in the future, including by replenishing the
authorized shares issuable thereunder.
thousands):
Three months ended June 30, | Six months ended June 30, | ||||||
2026 | 2025 | 2026 | 2025 | ||||
Shares of common stock issued under the ATM program (1) | |||||||
Gross proceeds | $ | $ | $ | $ | |||
Sales agents' commissions and other offering expenses | ( | ( | ( | ( | |||
Net proceeds | $ | $ | $ | $ | |||
(1) During the three and six months ended June 30, 2026, 13.9 million and 22.1 million shares were sold, respectively. As of June 30, 2026, 21.1
million shares of common stock subject to forward sale confirmations have been executed, but not settled, at a weighted average initial gross
price of $60.14 per share. We currently expect to fully settle forward sale agreements outstanding by September 30, 2026, representing $1.2
billion in net proceeds, for which the weighted average forward price as of June 30, 2026 was $58.34 per share.
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C.Dividend Reinvestment and Stock Purchase Plan ("DRSPP")
Our DRSPP provides our common stockholders with a convenient and economical method of purchasing our
common stock and reinvesting their distributions. It also allows our current stockholders to buy additional shares of
common stock by reinvesting all or a portion of their distributions. Our DRSPP authorizes up to 26.0 million common
shares to be issued. As of June 30, 2026, we had 10.4 million shares remaining for future issuance under our
DRSPP program.
thousands):
Three months ended June 30, | Six months ended June 30, | ||||||
2026 | 2025 | 2026 | 2025 | ||||
Shares of common stock issued under the DRSPP program | |||||||
Gross proceeds | $ | $ | $ | $ | |||
D.Repurchases of Common Stock
We repurchased 1.8 million shares of our common stock during the six months ended June 30, 2026 for an
aggregate cost of $101.9 million. As of June 30, 2026, there was $1.9 billion remaining under the share repurchase
program authorized by the Board of Directors, which expires in January 2028.
14.Common Stock Incentive Plan
The amount of share-based compensation costs recognized in 'General and administrative' in our consolidated
statements of income and comprehensive income was $9.3 million and $8.1 million during the three months ended
June 30, 2026 and 2025, respectively, and $20.7 million and $14.0 million during the six months ended June 30,
2026, and 2025, respectively.
A.Restricted Stock and Restricted Stock Units
During the six months ended June 30, 2026, we granted a total of 304,832 shares of restricted stock and restricted
stock units under the Realty Income 2021 Incentive Award Plan (the "2021 Plan"). This amount included 32,140
shares granted to the independent members of our Board of Directors in connection with our annual awards in May
2026.
Restricted stock and restricted stock units granted to employees vest over a service period not exceeding four
service, and are subject to the director’s continued service through each applicable vesting date.
As of June 30, 2026, the remaining unamortized share-based compensation expense related to restricted stock
awards and units totaled $33.5 million, which is being amortized on a straight-line basis over the service period of
each applicable award. The amount of share-based compensation is based on the fair value of the stock at the
grant date. We define the grant date as the date the recipient and Realty Income have a mutual understanding of
the key terms and conditions of the award, and the recipient of the grant begins to benefit from, or be adversely
affected by, subsequent changes in the price of the shares.
B.Performance Shares
During the six months ended June 30, 2026, we granted 246,900 performance shares, as well as dividend
equivalent rights, to our executive officers. The performance shares are earned based on our Total Shareholder
Return (“TSR”) performance relative to select industry indices and peer groups as well as achievement of certain
operating metrics, and vest 50 % as of the date of which the plan administrator determines the achievement of the
applicable goals during the applicable three-year performance period and the remaining 50 % on January 1 of the
following year, subject to continued service.
As of June 30, 2026, the remaining share-based compensation expense related to the performance shares totaled
$34.0 million. The performance shares are recognized on a tranche-by-tranche basis over the service period. The
fair value of the performance shares was estimated on the date of grant using a Monte Carlo Simulation model.
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15.Net Income per Common Share
denominator of the diluted net income per common share computation (shares in thousands):
Three months ended June 30, | Six months ended June 30, | ||||||
2026 | 2025 | 2026 | 2025 | ||||
Weighted average shares used for the basic net income per share computation | |||||||
Incremental shares from share-based compensation | |||||||
Dilutive effect of forward ATM offerings | |||||||
Weighted average shares used for diluted net income per share computation | |||||||
Unvested shares from share-based compensation that were anti-dilutive | |||||||
Weighted average partnership common units convertible to common shares that were anti- dilutive | |||||||
Weighted average forward ATM offerings that were anti-dilutive | |||||||
Weighted average shares issuable upon conversion of the convertible notes that were anti-dilutive | |||||||
16.Supplemental Disclosures of Cash Flow Information
thousands):
Six months ended June 30, | |||
2026 | 2025 | ||
Supplemental disclosures: | |||
Cash paid for interest | $ | $ | |
Cash paid for income taxes | $ | $ | |
Non-cash activities: | |||
Net increase (decrease) in fair value of derivatives | $ | $( | |
Payment-in-kind interest expense on Term Loans | $ | $ | |
Payment-in-kind interest and dividend income on loans and preferred equity investments | $( | $ | |
sheets to the total of the cash, cash equivalents, and restricted cash reported within our consolidated statements of
cash flows (in thousands):
June 30, 2026 | June 30, 2025 | ||
Cash and cash equivalents shown in the consolidated balance sheets | $ | $ | |
Restricted escrow deposits (1) | |||
Impounds related to mortgages payable (1) | |||
Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows | $ | $ |
(1) Included within 'Other assets, net' on our consolidated balance sheets (see note 2, Supplemental Detail for Certain Components of
Consolidated Balance Sheets). These amounts consist of cash that we are legally entitled to, but that is not immediately available to us. As a
result, these amounts were considered restricted as of the dates presented.
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17.Segment and Geographic Information
A.Segment Information
Our business is characterized as primarily owning and leasing commercial properties under long-term, net lease
agreements (whereby clients are responsible for property taxes, insurance and maintenance costs), and these
economic characteristics are similar across various property types, geographic locations, and industries in which our
clients operate. Our chief operating decision maker ("CODM") is our President, Chief Executive Officer. Information
reviewed by our CODM in evaluating performance and allocating resources is primarily operating results and cash
flow analysis on a consolidated basis. Therefore, we operate and manage the business in one
reportable segment.
The CODM assesses performance and decides how to allocate resources based on net income that also is reported
on the income statement as consolidated net income. The measure of segment assets is reported on the balance
sheet as total consolidated assets. Our significant segment expenses include consolidated expense categories
presented in our consolidated statements of income and comprehensive income, as well as additional significant
segment expense categories reported within 'Property (including reimbursements)' and 'General and administrative'
expense captions, as follows (in thousands):
Three months ended June 30, | Six months ended June 30, | ||||||
2026 | 2025 | 2026 | 2025 | ||||
Property expenses (excluding reimbursements) | $ | $ | $ | $ | |||
Cash G&A expenses (1) | $ | $ | $ | $ | |||
(1) Represents 'General and administrative' expenses as presented in our consolidated statements of income and comprehensive income, less
Other segment items included in consolidated net income consist of 'Gain on sales of real estate' and 'Other
income, net', as presented in our consolidated statements of income and comprehensive income.
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B.Geographic Information
(in thousands):
Three months ended June 30, | ||||||||
2026 | ||||||||
U.S. | U.K. | Other (1) | Total | |||||
Retail | $ | $ | $ | $ | ||||
Industrial | ||||||||
Other (2) | ||||||||
Rental (including reimbursements) | $ | $ | $ | $ | ||||
Interest income on financing receivables | ||||||||
Interest and dividend income on loans and preferred equity investments | ||||||||
Other | ||||||||
Total revenue | $ | |||||||
2025 | ||||||||
U.S. | U.K. | Other (1) | Total | |||||
Retail | $ | $ | $ | $ | ||||
Industrial | ||||||||
Other (2) | ||||||||
Rental (including reimbursements) | $ | $ | $ | $ | ||||
Interest income on financing receivables | ||||||||
Interest and dividend income on loans and preferred equity investments | ||||||||
Other | ||||||||
Total revenue | $ | |||||||
Six months ended June 30, | ||||||||
2026 | ||||||||
U.S. | U.K. | Other (1) | Total | |||||
Retail | $ | $ | $ | $ | ||||
Industrial | ||||||||
Other (2) | ||||||||
Rental (including reimbursements) | $ | $ | $ | $ | ||||
Interest income on financing receivables | ||||||||
Interest and dividend income on loans and preferred equity investments | ||||||||
Other | ||||||||
Total revenue | $ | |||||||
2025 | ||||||||
U.S. | U.K. | Other (1) | Total | |||||
Retail | $ | $ | $ | $ | ||||
Industrial | ||||||||
Other (2) | ||||||||
Rental (including reimbursements) | $ | $ | $ | $ | ||||
Interest income on financing receivables | ||||||||
Interest and dividend income on loans and preferred equity investments | ||||||||
Other | ||||||||
Total revenue | $ | |||||||
(1) Other includes rental revenue generated from all other European countries we operate in.
(2) Other includes all other property types in our portfolio.
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No individual client’s revenue represented more than 10% of our total revenue for each of the three and six months
ended June 30, 2026 and 2025.
Long-lived assets include items such as property, plant, equipment and right-of-use assets subject to operating and
finance leases. The following table disaggregates domestic and international total long-lived assets (in millions):
June 30, 2026 | December 31, 2025 | |||||||||||||||
U.S. | U.K. | Other (1) | Total | U.S. | U.K. | Other (1) | Total | |||||||||
Long-lived assets | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||
Remaining assets | ||||||||||||||||
Total assets | $ | $ | ||||||||||||||
18.Commitments and Contingencies
In the ordinary course of business, we are party to various legal actions which we believe are routine in nature and
incidental to the operation of our business. We believe that the outcome of the proceedings will not have a material
adverse effect upon our consolidated financial position or results of operations.
As of June 30, 2026, we had $729.4 million of commitments under construction contracts related to development
projects, which have estimated rental revenue commencement dates between July 2026 and December 2028. In
addition, we had commitments of $81.1 million for tenant improvements, recurring capital expenditures, and building
improvements, and had accrued $11.5 million in contingent consideration obligations related to leasing activities at
estimable as of June 30, 2026.
In June 2026, we entered into an agreement with a joint venture to fund approximately $243.0 million for our equity
interest in the joint venture, among other costs. This purchase obligation is expected to close during the third
quarter of 2026.
As of June 30, 2026, we had approximately $375.4 million of unfunded loan commitments related to certain loan
investments, under which we are committed to provide funding upon borrower request, subject to satisfaction of
customary conditions. These commitments may be funded over the contractual commitment period and are
generally intended to support the financing needs of the borrowers, including project development costs, operational
expenditures, and interest obligations. These commitments are secured by the underlying real estate collateral or
pledges of equity interests in the borrowing entities.
In March 2026, we closed on a mezzanine loan entered into with a joint venture with a principal balance of
$375.0 million. As of June 30, 2026, we have an obligation to fund up to $135.6 million over the term of the
guarantee on third-party debt related to this loan, in the event of default. The guarantee is effective through the term
of the related loan, which matures in March 2029 and has two 12 -month extension options available. The guarantee
requires fair value measurement. As such, we recorded the measured amount of $4.0 million as a liability at
inception, which is included in 'Other liabilities' on our consolidated balance sheets.
19.Subsequent Events
A.Dividends
In July 2026, we declared a dividend of $0.2710 per share to our common stockholders, which will be paid in August
2026.
B. Credit Facility Amendment
On July 10, 2026, we amended and restated our unsecured revolving credit facility to increase the borrowing
capacity to $5.5 billion, among other things. The revolving credit facility is bifurcated into two $2.75
which initially mature on April 29, 2029 and July 10, 2030, respectively, before giving effect to two six-month
extension options. Pursuant to the terms of the revolving credit facility, the credit ratings at the time of the
amendment provided for a borrowing rate of 67.5 basis points over the SOFR for USD borrowings, with a facility
commitment fee of 12.5 basis points, for all-in drawn pricing of 80 basis points over SOFR, a reduction of 5.0 basis
points from the prior revolving credit facilities.
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C. Commercial Paper Program
On July 10, 2026, in conjunction with the closing of the updated revolving credit facility, we also expanded our global
unsecured commercial paper programs to a total combined capacity of $5.5 billion, including an upsized
$2.75 billion U.S. commercial paper program and a $2.75 billion European commercial paper program. The notes
will be sold under customary terms in the United States and European commercial paper note markets, respectively,
and will rank pari passu with all of our other unsecured senior indebtedness, including our outstanding senior notes
and borrowings under our multicurrency revolving credit facilities.
D. U.S. Core Plus Fund
On July 1, 2026, we called an additional $265.7 million of capital from third-party investors, resulting in an indirect
ownership of 23.6 % in the Fund.
E. ATM Forward Offerings
As of August 5, 2026, we had outstanding forward sale agreements under our ATM program for a total of 22.5
million shares of common stock, representing expected net proceeds of approximately $1.3 billion (assuming full
physical settlement of such agreements), of which 1.4 million shares were sold in July 2026.
F. Note Issuance
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Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations
FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q, including the documents incorporated by reference, contains forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. When used in this
quarterly report, the words “estimate,” “anticipate,” “assume,” “expect,” “believe,” “intend,” “continue,” “should,”
“may,” “likely,” “plan,” “seek,” and similar expressions are intended to identify forward-looking statements. Forward-
looking statements include discussions of our business, strategy, plans, and the intentions of management; joint
ventures, partnerships, and portfolio including management thereof; our platform; growth and capital strategies
including our private capital business, investment pipeline and intentions to acquire or dispose of properties
(including geographies, timing, partners, clients and terms); re-leases, re-development and speculative
development of properties and expenditures related thereto; operations and results; our share repurchase program;
settlement of shares of common stock sold pursuant to forward sale confirmations under our At-the-Market (“ATM”)
program; dividends, including the amount, timing and payments of dividends; and macroeconomic and other
business trends, including interest rates and trends in the market for long-term leases of freestanding, single-client
properties. Forward-looking statements are subject to risks, uncertainties, and assumptions about us which may
cause our actual future results to differ materially from expected results. Some of the factors that could cause actual
results to differ materially are, among others, our continued qualification as a real estate investment trust; general
domestic and foreign business, economic, or financial conditions; competition; fluctuating interest and currency
rates; inflation and its impact on our clients and us; access to debt and equity capital markets and other sources of
funding (including the terms, structure and partners of such funding); volatility and uncertainty in the credit and
financial markets; other risks inherent in real estate, private capital, credit and mezzanine investments, and joint
ventures or co-investment ventures, including solvency, defaults under leases, bankruptcies, potential liability
relating to environmental matters, illiquidity of real estate investments (including rights of first refusal or rights of first
offer), and potential damages from natural disasters; impairments in the value of our real estate assets; volatility and
changes in domestic and foreign laws and the application, enforcement or interpretation thereof (including with
respect to tax laws and rates); property ownership through co-investment ventures, funds, joint ventures,
partnerships and other arrangements which, among other things, may transfer or limit our control of the underlying
investments; epidemics or pandemics; the loss of key personnel; the threat and outcome of any legal proceedings
to which we are a party or which may occur in the future; acts of terrorism and war; and the anticipated benefits
from mergers, acquisitions, co-investment ventures, funds, joint ventures, partnerships and other arrangements.
Additional factors that may cause risks and uncertainties include those discussed in the sections entitled “Business,”
“Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our
annual report on Form 10-K, for the year ended December 31, 2025.
Readers are cautioned not to place undue reliance on forward-looking statements. These forward-looking
statements are not guarantees of future plans and performance and speak only as of the date this quarterly report
was filed with the Securities and Exchange Commission (the "SEC"). Past operating results and performance are
provided for informational purposes and are not a guarantee of future results. There can be no assurance that
historical trends will continue. Actual plans and results may differ materially from what is expressed or forecasted in
this quarterly report and forecasts made in the forward-looking statements discussed in this quarterly report might
not materialize. We do not undertake any obligation to update forward-looking statements or publicly release the
results of any forward-looking statements that may be made to reflect events or circumstances after the date these
statements were made or to reflect the occurrence of unanticipated events.
OVERVIEW
Realty Income (NYSE: O), an S&P 500 company, is real estate partner to the world's leading companies®. Founded
in 1969, we serve our clients as a full-service real estate capital provider. As of June 30, 2026, we have a portfolio of
over 15,500 properties in all 50 states of the United States ("U.S."), the United Kingdom ("U.K."), and eight other
countries in Europe. We are known as “The Monthly Dividend Company®” and have a mission to invest in people
and places to deliver dependable monthly dividends that increase over time. Since our founding, we have declared
673 consecutive monthly dividends and are a member of the S&P 500 Dividend Aristocrats® index for having
increased our dividend for over 31 consecutive years.
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As of June 30, 2026, we owned or held interests in 15,588 properties, with approximately 353.2 million square feet
of leasable space leased to 1,798 clients doing business in 92 separate industries. Of the 15,588 properties in our
portfolio as of June 30, 2026, 15,218, or 97.6%, were single-tenant properties, and the remaining were multi–client
properties. Our total portfolio of properties as of June 30, 2026 had a weighted average remaining lease term
(excluding rights to extend a lease at the option of the client) of approximately 8.6 years. Total portfolio annualized
base rent (defined as our pro-rata share of contractual monthly base rent for all leases in place and exchange rates
as of the balance sheet date, multiplied by 12) on our leases as of June 30, 2026 was $5.28 billion.
As of June 30, 2026, approximately 34.3% of our total portfolio annualized base rent comes from properties leased
to our investment grade clients, their subsidiaries or affiliated companies. As of June 30, 2026, our top 20 clients
(based on percentage of total portfolio annualized base rent) represented approximately 34.8% of our annualized
base rent and 13 of these clients have investment grade credit ratings or are subsidiaries or affiliates of investment
grade companies. Approximately 91% of our annualized retail base rent as of June 30, 2026, is derived from our
clients with a service, non-discretionary, and/or low price point component to their business.
Unless otherwise specified, references to rental revenue in the Management's Discussion and Analysis of Financial
Condition and Results of Operations are exclusive of reimbursements from clients for recoverable real estate taxes
and operating expenses totaling $91.1 million and $87.4 million for the three months ended June 30, 2026 and
2025, respectively, and $188.6 million and $174.8 million for the six months ended June 30, 2026 and 2025,
respectively.
RECENT DEVELOPMENTS
Increases in Monthly Dividends to Common Stockholders
We have continued our 57-year history of paying monthly dividends by increasing the dividend three times during
2026. As of August 2026, we have paid 115 consecutive quarterly dividend increases and increased the dividend
135 times since our listing on the New York Stock Exchange (“NYSE”) in 1994.
2026 Dividend increases | Month Declared | Month Paid | Monthly Dividend per share | Increase per share | |||
1st increase | Dec 2025 | Jan 2026 | $0.2700 | $0.0005 | |||
2nd increase | Mar 2026 | Apr 2026 | $0.2705 | $0.0005 | |||
3rd increase | Jun 2026 | Jul 2026 | $0.2710 | $0.0005 |
The dividends paid per share during the six months ended June 30, 2026 totaled $1.6215, as compared to $1.6015
during the six months ended June 30, 2025, an increase of $0.020, or 1.2%.
The monthly dividend of $0.2710 per share represents a current annualized dividend of $3.252 per share, and an
annualized dividend yield of 5.2% based on the last reported sale price of our common stock on the NYSE of
$61.96 on June 30, 2026. Although we expect to continue our policy of paying monthly dividends, we cannot
guarantee that we will maintain our current level of dividends, that we will continue our pattern of increasing
dividends per share, or what our actual dividend yield will be in any future period.
Investments
During the three months ended June 30, 2026, we invested $2.6 billion; our pro-rata share was $2.1 billion at an
initial weighted average cash yield of 7.3%, including investments in 144 properties, properties under development
or expansion, unconsolidated entities, and loans.
During the six months ended June 30, 2026, we invested $5.3 billion; our pro-rata share was $4.7 billion at an initial
weighted average cash yield of 7.2%, including investments in 338 properties, properties under development or
expansion, unconsolidated entities, and loans.
See notes 3, Investments in Real Estate, 4, Investments in Unconsolidated Entities, and 5, Investments in Loans
and Financing Receivables to the consolidated financial statements for further details.
Establishment of Joint Venture with Cloud Capital
In June 2026, we announced a strategic joint venture with Cloud Capital and its affiliates (“Cloud Capital”) to invest
in hyperscale data centers, which we expect to invest up to $1.4 billion for a 45% stake in a three-asset Northern
Virginia portfolio valued at more than $6.0 billion, with leases running 15 to 20 years. Subsequent to June 30, 2026,
we closed on the first stabilized data center asset and expect to acquire the following two development assets upon
stabilization.
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Establishment of Joint Venture with Apollo
In March 2026, we established our Managed Insurance and Retirement Annuity investment platform as a vehicle to
pursue various co-investment opportunities with institutional investors. In connection with this initiative, on March
31, 2026 we closed a $1.0 billion strategic investment from Apollo in exchange for a 49% interest in a newly formed
joint venture which owns an existing portfolio of 492 retail properties contributed by the Company.
Dispositions
During the three months ended June 30, 2026, we sold 80 properties with total net proceeds received of $160.7
million. During the six months ended June 30, 2026, we sold 177 properties with total net proceeds received of
$348.6 million.
Equity Capital Raising
During the three months ended June 30, 2026, we raised $843.0 million of proceeds from the sale of common
stock, at a weighted average of $61.52, primarily through the settlement of 13.7 million shares of common stock
under our ATM program. As of August 5, 2026, we had outstanding forward sale agreements under our ATM
program for a total of 22.5 million shares of common stock, representing expected net proceeds of approximately
$1.3 billion, of which 1.4 million shares were sold in July 2026 (assuming full physical settlement of such
agreements).
Note Issuance
In July 2026, we issued €600.0 million of 3.625% senior unsecured notes due July 2032. See note 19, Subsequent
Events, to the consolidated financial statements for further details.
In April 2026, we issued $800.0 million of 4.750% senior unsecured notes due April 2033. In connection with the
offering, we executed a $500 million U.S. Dollar-to-Euro 7-year cross currency swap, resulting in approximately
€436 million of proceeds and a blended coupon rate of 4.16%.
Term Loan Issuance
In March 2026, we closed a $693.9 million unsecured term loan due January 2036 at a fixed rate of 4.91% and
executed a cross-currency swap on $500.0 million of proceeds for approximately €431.0 million, achieving an
effective blended borrowing rate of 4.34%.
Convertible Bond Issuance
In January 2026, we issued $862.5 million principal amount of 3.500% convertible senior notes due January 2029 in
a private offering, resulting in net proceeds of approximately $845.1 million. We used approximately $101.9 million
of the net proceeds to repurchase approximately 1.8 million shares of our common stock concurrently with the
pricing of the offering.
Expanded Revolving Credit Facilities and Commercial Paper Programs
In July 2026, we closed on the recast and expansion of our $5.5 billion multicurrency unsecured revolving credit
facilities, upsized from the prior $4.0 billion capacity. In addition, we also announced an expanded combined
capacity of $5.5 billion for our global commercial paper programs, upsized from the prior $3.0 billion combined
capacity.
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Portfolio Discussion
Leasing Results
As of June 30, 2026, we had 188 properties available for lease or sale out of 15,588 properties in our portfolio,
which represents a 98.8% occupancy rate based on the number of properties in our portfolio. Our property-level
occupancy rates exclude properties with ancillary leases only, such as cell towers and billboards, and properties
with possession pending, and include properties owned by unconsolidated joint ventures. Below is a summary of
our portfolio activity for the periods indicated below:
Three months ended June 30, 2026 | |
Properties available for lease as of March 31, 2026 | 172 |
Lease expirations (1) | 480 |
Re-leases to same client | (385) |
Re-leases to new client | (34) |
Vacant dispositions | (45) |
Properties available for lease as of June 30, 2026 | 188 |
Six months ended June 30, 2026 | |
Properties available for lease as of December 31, 2025 | 173 |
Lease expirations (1) | 800 |
Re-leases to same client | (605) |
Re-leases to new client | (57) |
Vacant dispositions | (123) |
Properties available for lease as of June 30, 2026 | 188 |
(1)Includes scheduled and unscheduled expirations (including leases rejected in bankruptcy), as well as future expirations resolved in the periods
indicated above.
During the three months ended June 30, 2026, the new annualized base rent on re-leased units was $110.3 million,
as compared to the previous annual rent of $107.4 million on the same units, representing a rent recapture rate of
102.7% on the re-leased units.
During the six months ended June 30, 2026, the new annualized base rent on re-leased units was $183.5 million, as
compared to the previous annual rent of $178.2 million on the same units, representing a rent recapture rate of
103.0% on the re-leased units.
As part of our re-leasing costs, we pay leasing commissions to unrelated, third-party real estate brokers consistent
with the commercial real estate industry standard, and sometimes provide rent concessions to our clients. We do
not consider the collective impact of the leasing commissions or rent concessions to our clients to be material to our
financial position or results of operations.
Impact of Inflation
Leases generally provide for limited increases in rent as a result of fixed increases, increases in the consumer price
index, retail price index in the case of certain leases in the U.K. (typically subject to ceilings), or increases in clients’
sales volumes. We expect that inflation will cause these lease provisions to result in rent increases over time.
During times when inflation is greater than increases in rent, as provided for in the leases, rent increases may not
keep up with the rate of inflation and other costs.
Moreover, our strategic focus on the use of net lease agreements reduces our exposure to rising property expenses
due to inflation because the client is responsible for property expenses. Even though the utilization of net leases
reduces our exposure to rising property expenses due to inflation, substantial inflationary pressures and increased
costs may have an adverse impact on our clients if increases in their operating expenses exceed increases in
revenue, which may adversely affect our clients' ability to pay rent. Additionally, inflationary periods may cause us to
experience increased costs of financing, make it difficult to refinance debt at attractive rates or at all, and may
adversely affect the properties we can acquire if the cost of financing an acquisition is in excess of our anticipated
earnings from such property, thereby limiting the properties that can be acquired.
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Impact of Real Estate and Capital Markets
In the commercial real estate market, property prices generally continue to fluctuate. Likewise, during certain
periods, the global capital markets have experienced significant price volatility, dislocations, and liquidity disruptions,
which may impact our access to and cost of capital. We continually monitor the commercial real estate and global
capital markets carefully and, if required, will make decisions to adjust our business strategy accordingly.
Impact of Current Macroeconomic Conditions
We monitor developments related to macroeconomic factors that could have an adverse impact on our business
and our clients. Our clients face challenges that may differ from or be additional to challenges we face, including
potential changes in consumer confidence levels, behavior and spending and increased operational expenses,
including potential impacts from changes in global trade policies. The extent of the future effects on our business,
results of operations, cash flows, and growth strategies is highly uncertain and will ultimately depend on future
developments, none of which can be predicted.
LIQUIDITY AND CAPITAL RESOURCES
Our primary cash obligations are included in the “Material Cash Requirements” table, which is presented later in this
section. We expect to fund our operating expenses and other short-term liquidity requirements, including property
acquisitions and development costs, payment of principal and interest on our outstanding indebtedness, property
improvements, re-leasing costs, and cash distributions to common stockholders, primarily through a combination of
the following:
•Cash and cash equivalents;
•Future cash flows from operations;
•Issuances of common stock or debt, or other securities offerings;
•Additional borrowings under our credit facilities or commercial paper programs, which are backstopped by our
credit facilities;
•Short-term loans;
•Asset dispositions; and
•Credit investment repayments.
In addition to these sources of liquidity, we manage and own an interest in our perpetual life U.S. Core Plus Fund
(the "Fund"). During the six months ended June 30, 2026, within our Fund, we called an aggregate $948.0 million of
capital from third-party investors and redeemed an aggregate $591.9 million of the Company's units, resulting in our
indirect ownership interest of 26.8% in the Fund. On July 1, 2026, within our Fund, we called an additional
$265.7 million of capital from third-party investors, resulting in our indirect ownership interest of 23.6% in the Fund.
We seek to hold additional closings during the life of the Fund. In January 2026, we established a strategic
relationship with GIC, a leading global institutional investor, including the formation of a build-to-suit development
joint venture. In March 2026, we established a strategic relationship with Apollo, a high-growth, global alternative
asset manager, and closed on $1.0 billion of gross proceeds in exchange for Apollo’s acquisition of a 49% interest in
a joint venture that indirectly owns a diversified net lease portfolio comprised entirely of single-tenant retail
properties.
We intend to evaluate other opportunities to raise private capital in the future, including potentially through additional
funds and/or joint venture opportunities.
We believe that our cash and cash equivalents on hand, cash provided from operating activities, and borrowing
capacity are sufficient to meet our liquidity needs for the next twelve months. We intend, however, to use permanent
or long-term capital to fund property acquisitions and to repay future borrowings under our credit facilities and
commercial paper programs.
Long-Term Liquidity Requirements
Our primary goal is to deliver dependable monthly dividends to stockholders that increase over time. Historically, we
have met our principal short-term and long-term capital needs, including the funding of high-quality real estate
acquisitions, investments in loans to clients, property development, and capital expenditures by issuing common
stock, long-term unsecured notes, and term loan borrowings. While the issuance of common stock has historically
been an important component of our capital structure, we continue to broaden and diversify our sources of capital to
reduce reliance on the public capital markets. This approach enhances capital availability across market cycles,
improves cost‑of‑capital certainty, and increases financial flexibility. However, there can be no assurance that our
efforts will be successful.
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Capitalization
As of June 30, 2026, our total capitalization was $90.0 billion. Total capitalization consisted of $58.8 billion of
common equity (based on the June 30, 2026 closing price on the NYSE of $61.96 and assuming the conversion of
2.7 million common units of Realty Income, L.P.), and total outstanding borrowings of $31.2 billion of our pro-rata
share of total debt principal.
Share Repurchase Program
We are authorized to repurchase up to $2.0 billion in shares of our common stock under our share repurchase
program, which will expire in January 2028. Repurchases under the repurchase program may be made at
management’s discretion from time to time using a variety of methods, which may include open market purchases,
privately negotiated transactions, Rule 10b5-1 plans or otherwise, all in accordance with the rules of the SEC and
other applicable legal requirements. The repurchase program does not obligate us to acquire any particular amount
of common stock, and the repurchase program may be suspended or discontinued at any time at our discretion. In
January 2026, we repurchased 1.8 million shares of our common stock for $101.9 million under the repurchase
program.
ATM Program
During the three and six months ended June 30, 2026, we settled approximately 13.7 million shares of common
stock previously sold pursuant to forward sale agreements through our ATM program for approximately $824.3
million of net proceeds. As of June 30, 2026, we had outstanding forward-sale agreements under our ATM program
for a total of 21.1 million shares of common stock, representing approximately $1.2 billion in expected net proceeds,
which have been executed at a weighted average price of $58.34 per share (assuming full physical settlement of all
outstanding shares of common stock, subject to such forward sale agreements and certain assumptions made with
respect to settlement dates). In May 2026, we entered into a new ATM equity program that provides for the offer and
sale of up to 150.0 million shares of common stock pursuant to forward sale agreements. As of June 30, 2026, we
had 138.9 million shares remaining for future issuance under our ATM program. We anticipate maintaining the
availability of our ATM program in the future, including the replenishment of authorized shares issuable thereunder.
Debt Financing Activities
As of June 30, 2026, our total outstanding borrowings of credit facilities, commercial paper, term loans, mortgages
payable, and senior unsecured notes and bonds were $31.0 billion, with a weighted average maturity of 5.1 years
and a weighted average interest rate of 3.9%. As of June 30, 2026, approximately 91% of our total debt was fixed
rate debt. See notes 6 through 8 to the consolidated financial statements for additional information about our
outstanding debt, along with our debt financing activities during the six months ended June 30, 2026 below.
Term Loan Issuance
In March 2026, we closed a $693.9 million unsecured term loan due January 2036 with an affiliate of The Goldman
Sachs Group, Inc. at a fixed rate of 4.91% and executed a cross-currency swap on $500.0 million of proceeds for
approximately €431.0 million, achieving an effective blended borrowing rate of 4.34%.
Convertible Bond Issuance
In January 2026, we issued $862.5 million principal amount of 3.500% convertible senior notes due January 2029 in
a private offering, resulting in net proceeds of approximately $845.1 million. We used approximately $101.9 million
of the net proceeds to repurchase approximately 1.8 million shares of our common stock concurrently with the
pricing of the offering. The notes are senior, unsecured obligations of Realty Income and accrue interest at a rate of
3.500% per annum, payable semi-annually in arrears. The notes will mature on January 15, 2029, unless earlier
repurchased, redeemed or converted.
Note Issuance
In July 2026, we issued €600.0 million of 3.625% senior unsecured notes due July 2032. See note 19, Subsequent
Events, to the consolidated financial statements for further details.
In April 2026, we issued $800.0 million of 4.750% senior unsecured notes due April 2033. In connection with the
offering, we executed a $500 million U.S. Dollar-to-Euro 7-year cross currency swap, resulting in approximately
€436 million of proceeds and a blended coupon rate of 4.16%.
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Note Repayments
During the six months ended June 30, 2026, we repaid the following notes, plus accrued and unpaid interest, upon
maturity:
2026 Repayments | Date of Issuance | Maturity Date | Principal amount (in millions) | |||
5.050% Notes | January 2023 | January 2026 | $500.0 | |||
0.750% Notes | December 2020 | March 2026 | $325.0 | |||
4.875% Notes | June 2016 | June 2026 | $600.0 |
Credit Facilities and Commercial Paper Programs
On July 10, 2026, we amended and restated our unsecured revolving credit facility to increase the borrowing
capacity to $5.5 billion, among other things. The revolving credit facility is bifurcated into two $2.75 billion tranches,
which initially mature on April 29, 2029 and July 10, 2030, respectively, before giving effect to two six-month
extension options. Pursuant to the terms of the revolving credit facility, the credit ratings at the time of the
amendment provided for a borrowing rate of 67.5 basis points over the SOFR for USD borrowings, with a facility
commitment fee of 12.5 basis points, for all-in drawn pricing of 80 basis points over SOFR, a reduction of 5.0 basis
points from the prior revolving credit facilities.
In conjunction with the closing of the updated revolving credit facility, we also expanded our global unsecured
commercial paper programs to a total combined capacity of $5.5 billion, including an upsized $2.75 billion U.S.
commercial paper program and a $2.75 billion European commercial paper program. The notes will be sold under
customary terms in the United States and European commercial paper note markets, respectively, and will rank pari
passu with all of our other unsecured senior indebtedness, including our outstanding senior notes and borrowings
under our multicurrency revolving credit facilities. We expect to use our $5.5 billion multicurrency revolving credit
facilities as a liquidity backstop for the repayment of notes issued under the programs.
Note Covenants
The following is a summary of the key financial covenants for our senior unsecured notes, as defined and calculated
per the terms of our senior notes and bonds. These calculations, which are not based on accounting principles
generally accepted in the United States of America ("U.S. GAAP"), are presented to investors to show our ability to
incur additional debt under the terms of our senior notes and bonds as well as to disclose our current compliance
with such covenants and are not measures of our liquidity or performance. The actual amounts as of June 30, 2026,
are:
Note Covenants | Required | Actual |
Limitation on incurrence of total debt | < 60% of adjusted assets | 41.5% |
Limitation on incurrence of secured debt | < 40% of adjusted assets | 0.2% |
Debt service and fixed charge coverage (trailing 12 months) (1) | > 1.5x | 4.7x |
Maintenance of total unencumbered assets | > 150% of unsecured debt | 242.2% |
(1) Our debt service coverage ratio is calculated on a pro forma basis for the preceding four-quarter period on the assumptions that: (i) the
incurrence of any Debt (as defined in the covenants) by us since the first day of such four-quarter period and the application of the proceeds
therefrom (including to refinance other Debt since the first day of such four-quarter period), (ii) the repayment or retirement of any of our Debt
since the first day of such four-quarter period, and (iii) any acquisition or disposition by us of any asset or group since the first day of such four
quarters and subject to certain additional adjustments. Such pro forma ratio has been prepared on the basis required by that debt service
covenant, reflects various estimates and assumptions and is subject to other uncertainties, and therefore does not purport to reflect what our
actual debt service coverage ratio would have been had transactions referred to in clauses (i), (ii) and (iii) of the preceding sentence occurred
as of the first day of the four-quarter period, nor does it purport to reflect our debt service coverage ratio for any future period. Fixed charge
coverage is calculated in the same manner as the debt service coverage. The following is our calculation of debt service and fixed charge
coverage as of June 30, 2026 (in thousands, for trailing twelve months):
Net income attributable to the Company | $1,267,577 |
Plus: interest expense, excluding the amortization of deferred financing costs | 1,152,933 |
Plus: provision for taxes | 97,628 |
Plus: depreciation and amortization | 2,542,368 |
Plus: provisions for impairment | 402,094 |
Plus: pro forma adjustments | 265,422 |
Less: provisions for gains from sales or joint ventures | (190,441) |
Income available for debt service, as defined | $5,537,581 |
Total pro forma debt service charge | $1,173,688 |
Debt service and fixed charge coverage ratio | 4.7x |
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Credit Agency Ratings
The borrowing interest rates under our revolving credit facilities are based upon our ratings assigned by credit rating
agencies. We are currently assigned the following investment grade corporate credit ratings on our senior
unsecured notes and bonds: Moody’s Investors Service has assigned a rating of A3 with a “stable” outlook,
Standard & Poor’s Ratings Group has assigned a rating of A- with a “stable” outlook, and on August 3, 2026, we
received a credit rating of A with a "stable" outlook from Fitch Ratings. In addition, we are assigned the following
ratings on our commercial paper: Moody's Investors Service has assigned a rating of P-2, Standard & Poor's
Ratings Group has assigned a rating of A-2, and Fitch Ratings has assigned a rating of F1.
Effective September 1, 2026, our current investment grade ratings provide for a borrowing rate of 0.650% over the
SOFR for USD borrowings, with a facility commitment fee of 0.100%, for all-in drawn pricing of 75 basis points over
SOFR. Prior to the credit rating by Fitch Ratings, financing under the credit facility was 5 basis points higher.
In addition, if our credit rating is lower than BBB-/Baa3 or our senior unsecured debt is unrated, credit ratings
provide for a borrowing rate 1.350% over the SOFR for USD borrowings, with a facility fee of 0.300%. If our credit
rating is A/A2 or higher, credit ratings provide for a borrowing rate of 0.6250% over the SOFR for USD borrowings,
with a facility fee of 0.100%.
We also issue senior debt securities from time to time and our credit ratings can impact the interest rates charged in
those transactions. If our credit ratings or ratings outlook change, our cost to obtain debt financing could increase or
decrease. The credit ratings assigned to us could change based upon, among other things, our results of operations
and financial condition. These ratings are subject to ongoing evaluation by credit rating agencies, and we cannot
assure you that our ratings will not be changed or withdrawn by a rating agency in the future if, in its judgment,
circumstances warrant. Moreover, a rating is not a recommendation to buy, sell or hold our debt securities or
common stock.
Material Cash Requirements
The following table summarizes the maturity of each of our obligations as of June 30, 2026 (in millions):
2026 | 2027 | 2028 | 2029 | 2030 | Thereafter | Total | ||||||||
Credit Facilities (1) | $— | $1,039.7 | $— | $281.5 | $— | $— | $1,321.2 | |||||||
Commercial Paper (2) | 1,441.4 | — | — | — | — | — | 1,441.4 | |||||||
Unsecured Term Loans | — | 500.0 | 1,571.9 | — | 4.1 | 698.9 | 2,774.9 | |||||||
Mortgages Payable | 11.1 | 22.3 | 1.3 | 1.3 | 1.0 | — | 37.0 | |||||||
Senior Unsecured Notes and Bonds | 950.0 | 2,360.7 | 2,499.8 | 3,675.3 | 2,442.5 | 13,487.8 | 25,416.1 | |||||||
Interest (3) | 640.2 | 1,071.3 | 891.4 | 807.9 | 664.4 | 3,138.3 | 7,213.5 | |||||||
Ground Leases Paid by the Company (4) | 6.2 | 13.7 | 11.5 | 12.8 | 13.4 | 569.3 | 626.9 | |||||||
Ground Leases Paid by Our Clients (5) | 15.6 | 29.8 | 26.9 | 24.6 | 23.1 | 308.7 | 428.7 | |||||||
Other (6) | 681.2 | 255.4 | 122.3 | 1.5 | — | 4.2 | 1,064.6 | |||||||
Total | $3,745.7 | $5,292.9 | $5,125.1 | $4,804.9 | $3,148.5 | $18,207.2 | $40,324.3 |
(1) The initial terms of the RI Credit Facilities expire in April 2027 and April 2029 and include, at our option, two six-month extensions. The initial
term of the Fund Credit Facilities expires in April 2029 and includes, at our option, two six-month extensions.
(2) Commercial paper programs outstanding were $1.4 billion, maturing between July 2026 and August 2026.
(3) Interest on the commercial paper programs, term loans, mortgages payable, and senior unsecured notes and bonds has been calculated
based on outstanding balances at period end through their respective maturity dates.
(4) We currently pay the ground lessors directly for the rent under certain ground lease arrangements.
(5) Our clients, who are generally sub-tenant clients under ground leases, are responsible for paying the rent under these ground leases.
(6) “Other” consists of $729.4 million of commitments under construction contracts, $243.0 million for our equity interest in a joint venture, among
other costs, $81.1 million for tenant improvements, recurring capital expenditures, and building improvements, and $11.5 million in contingent
purchase consideration obligations related to leasing activities at four U.K. retail park properties acquired in 2026.
As of June 30, 2026, we had approximately $375.4 million of unfunded loan commitments related to certain loan
investments. These commitments are not reflected in the table above, as the timing of the funding is dependent on
borrower request and the satisfaction of customary conditions, and therefore cannot be reasonably estimated by
period. See Note 18, Commitments and Contingencies to the consolidated financial statements for further details.
Investments in Unconsolidated Entities
As of June 30, 2026, our pro-rata share of secured debt of unconsolidated entities was approximately $659.2
million.
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DIVIDEND POLICY
Distributions are paid monthly to holders of shares of our common stock.
Distributions are paid monthly to the limited partners holding common units of Realty Income, L.P., each on a per
unit basis that is equal to the amount paid per share to our common stockholders (subject to the adjustment factor
applicable to those units at the time of such distribution).
In order to maintain our status as a real estate investment trust ("REIT") for federal income tax purposes, we
generally are required to distribute dividends to our stockholders aggregating annually at least 90% of our taxable
income (excluding net capital gains), and we are subject to income tax to the extent we distribute less than 100% of
our taxable income (including net capital gains). In 2025, our cash distributions to common stockholders totaled
$2.92 billion, or approximately 159.0% of our estimated taxable income of $1.84 billion. Certain measures are
available to us to reduce or eliminate our tax exposure as a REIT, and accordingly, no provision for U.S. federal
income taxes, other than our taxable REIT subsidiaries (each, a "TRS"), has been made. Our estimated taxable
income reflects non-cash deductions for depreciation and amortization. Our estimated taxable income is presented
to show our compliance with REIT dividend requirements and is not a measure of our liquidity or operating
performance. We intend to continue to make distributions to our stockholders that are sufficient to meet this dividend
requirement and that will reduce or eliminate our exposure to income taxes. Furthermore, we believe our cash on
hand and funds from operations are sufficient to support our current level of cash distributions to our stockholders.
We distributed $1.62 per share to stockholders during the six months ended June 30, 2026, representing 73.0% of
our diluted Adjusted Funds from Operations Available to Common Stockholders ("AFFO") per share of $2.22.
Future distributions will be at the discretion of our Board of Directors and will depend on, among other things, our
results of operations, Funds from Operations Available to Common Stockholders ("FFO"), Normalized Funds from
Operations Available to Common Stockholders ("Normalized FFO"), AFFO, cash flow from operations, financial
condition, capital requirements, the annual distribution requirements under the REIT provisions of the U.S. Internal
Revenue Code of 1986, as amended (the “Code”), our debt service requirements, and any other factors the Board
of Directors may deem relevant. In addition, our RI Credit Facilities contain financial covenants that could limit the
amount of distributions payable by us in the event of a default, and which prohibit the payment of distributions on
our common stock in the event that we fail to pay when due (subject to any applicable grace period) any principal or
interest on borrowings under our RI Credit Facilities.
Distributions of our current and accumulated earnings and profits for federal income tax purposes generally will be
taxable to stockholders as ordinary income, except to the extent that we recognize capital gains and declare a
capital gains dividend, or that such amounts constitute “qualified dividend income” subject to a reduced rate of tax.
The maximum tax rate of non-corporate taxpayers for “qualified dividend income” is generally 20%. In general,
dividends payable by REITs are not eligible for the reduced tax rate on qualified dividend income, except to the
extent that certain holding requirements have been met with respect to the REIT’s stock and the REIT’s dividends
are attributable to dividends received from certain taxable corporations (such as our TRSs) or to income that was
subject to tax at the corporate or REIT level (for example, if we distribute taxable income that we retained and paid
tax on in the prior taxable year). However, non-corporate stockholders, including individuals, generally may deduct
up to 20% of dividends from a REIT, other than capital gain dividends and dividends treated as qualified dividend
income.
Distributions in excess of earnings and profits generally will first be treated as a non-taxable reduction in the
stockholders’ basis in their stock, but not below zero. Distributions in excess of that basis generally will be taxable
as a capital gain to stockholders. Approximately 33.6% of the distributions to our common stockholders, made or
deemed to have been made in 2025, were classified as a return of capital for federal income tax purposes.
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RESULTS OF OPERATIONS
The following is a comparison of our results of operations for the three and six months ended June 30, 2026
and 2025.
Total Revenue
The following summarizes our total revenue (in thousands):
Three months ended June 30, | Six months ended June 30, | ||||||||||
2026 | 2025 | Change | 2026 | 2025 | Change | ||||||
Rental (excluding reimbursements) | $1,335,334 | $1,250,764 | $84,570 | $2,678,666 | $2,476,443 | $202,223 | |||||
Rental (reimbursements) | 91,133 | 87,424 | 3,709 | 188,618 | 174,802 | 13,816 | |||||
Interest income on financing receivables | 32,024 | 32,382 | (358) | 64,154 | 65,017 | (863) | |||||
Interest and dividend income on loans and preferred equity investments | 88,517 | 39,480 | 49,037 | 158,627 | 74,216 | 84,411 | |||||
Other | 703 | 328 | 375 | 6,373 | 405 | 5,968 | |||||
Total revenue | $1,547,711 | $1,410,378 | $137,333 | $3,096,438 | $2,790,883 | $305,555 | |||||
Rental Revenue (excluding reimbursements)
The table below summarizes the increase in rental revenue (excluding reimbursements) in the three and six months
ended June 30, 2026 and 2025 (dollars in thousands):
Three months ended June 30, | |||||||
Number of Properties | 2026 | 2025 | Change | ||||
Properties acquired during 2026 & 2025 | 565 | $113,168 | $23,639 | $89,529 | |||
Same store rental revenue | 14,619 | 1,194,013 | 1,179,819 | 14,194 | |||
Constant currency adjustment (1) | N/A | 3,804 | 1,000 | 2,804 | |||
Properties sold during and prior to 2026 | 609 | 2,059 | 20,615 | (18,556) | |||
Straight-line rent and other non-cash adjustments | N/A | (7,605) | (6,397) | (1,208) | |||
Vacant rents, development and other (2) | 404 | 28,101 | 22,542 | 5,559 | |||
Other excluded revenue (3) | N/A | 1,794 | 9,546 | (7,752) | |||
Total | $1,335,334 | $1,250,764 | $84,570 | ||||
Six months ended June 30, | |||||||
Number of Properties | 2026 | 2025 | Change | ||||
Properties acquired during 2026 & 2025 | 565 | $190,660 | $29,533 | $161,127 | |||
Same store rental revenue | 14,619 | 2,384,705 | 2,360,352 | 24,353 | |||
Constant currency adjustment (1) | N/A | 8,619 | (9,243) | 17,862 | |||
Properties sold during and prior to 2026 | 609 | 8,136 | 43,559 | (35,423) | |||
Straight-line rent and other non-cash adjustments | N/A | (12,023) | (9,689) | (2,334) | |||
Vacant rents, development and other (2) | 404 | 56,429 | 50,975 | 5,454 | |||
Other excluded revenue (3) | N/A | 42,140 | 10,956 | 31,184 | |||
Total | $2,678,666 | $2,476,443 | $202,223 | ||||
(1)For purposes of comparability, same store rental revenue is presented on a constant currency basis using the exchange rate as of June 30,
2026.
(2)Relates to the aggregate of (i) rental revenue from 301 properties that were available for lease during part of 2026 or 2025 for the three and six
months ended June 30, 2026, respectively and (ii) rental revenue for 103 properties under development or completed developments that do
not meet our same store pool definition for the three and six months ended June 30, 2026, respectively.
(3)"Other excluded revenue" primarily consists of reimbursements related to lease termination fees and other settlement income.
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For purposes of determining the same store rent property pool, we include all properties that were owned for the
entire year-to-date period, for both the current and prior year, except for properties during the current or prior year
that: (i) were vacant at any time, (ii) were under development or redevelopment, or (iii) were involved in eminent
domain and rent was reduced. Each of the exclusions from the same store pool are separately addressed within the
applicable sentences above, explaining the changes in rental revenue for the period.
Of the 17,440 in-place leases in the portfolio, 13,918, or 79.8%, were under leases that provide for increases in
rents through: base rent increases tied to inflation (typically subject to ceilings), percentage rent based on a
percentage of the clients’ gross sales, fixed increases, or a combination of two or more of the aforementioned rent
provisions.
Rent based on a percentage of our clients' gross sales, or percentage rent, was $4.0 million and $2.8 million for the
three months ended June 30, 2026 and 2025, respectively. Rent based on a percentage of our clients' gross sales,
or percentage rent, was $8.2 million and $8.6 million for the six months ended June 30, 2026 and 2025,
respectively. Percentage rent represents less than 1% of rental revenue.
As of June 30, 2026, our portfolio of 15,588 properties was 98.8% leased with 188 properties available for lease or
sale, as compared to 98.6% leased with 212 properties available for lease as of June 30, 2025. It has been our
experience that approximately 1% to 4% of our property portfolio will be available for lease at any given time;
however, it is possible that the number of properties available for lease or sale could increase in the future, given
the nature of economic cycles and other unforeseen global events.
Rental Revenue (reimbursements)
A number of our leases provide for contractually obligated reimbursements from clients for recoverable real estate
taxes and operating expenses. Contractually obligated reimbursements by our clients increased by $3.7 million and
$13.8 million for the three and six months ended June 30, 2026 as compared to the same periods in 2025,
respectively, primarily due to higher reimbursable property taxes and maintenance due to growth in our portfolio.
Interest Income on Financing Receivables
Interest income on financing receivables decreased by $0.4 million and $0.9 million for the three and six months
ended June 30, 2026 as compared to the same periods in 2025, respectively, primarily due to lower average
financing receivable balances outstanding.
Interest and Dividend Income on Loans and Preferred Equity Investments
Interest and dividend income on loans and preferred equity investments increased by $49.0 million and $84.4
million for the three and six months ended June 30, 2026 as compared to the same periods in 2025, respectively,
due to the growth in our loan and preferred equity portfolio. Our loans receivable and preferred equity investments
increased by approximately $2.8 billion compared to the same period in 2025 due to acquisitions.
Other Revenue
Other revenue increased by $0.4 million and $6.0 million for the three and six months ended June 30, 2026 as
compared to the same periods in 2025, respectively, primarily due to higher solar electricity tax credits received in
the first quarter of 2026.
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Expenses
The following summarizes our total expenses (in thousands):
Three months ended June 30, | Six months ended June 30, | ||||||||||
2026 | 2025 | Change | 2026 | 2025 | Change | ||||||
Depreciation and amortization | $644,677 | $647,849 | $(3,172) | $1,274,952 | $1,256,784 | $18,168 | |||||
Interest | 312,083 | 283,824 | 28,259 | 604,023 | 552,198 | 51,825 | |||||
Property (excluding reimbursements) | 21,306 | 19,998 | 1,308 | 40,664 | 39,301 | 1,363 | |||||
Property (reimbursements) | 91,133 | 87,424 | 3,709 | 188,618 | 174,802 | 13,816 | |||||
General and administrative | 57,605 | 49,329 | 8,276 | 116,490 | 93,373 | 23,117 | |||||
Provisions for impairment of real estate | 54,185 | 142,255 | (88,070) | 144,350 | 239,673 | (95,323) | |||||
Provisions for credit losses on loans and financing receivables | 7,258 | 1,108 | 6,150 | 46,361 | 20,279 | 26,082 | |||||
Merger, transaction, and other costs, net | 2,058 | 331 | 1,727 | 12,845 | 610 | 12,235 | |||||
Total expenses | $1,190,305 | $1,232,118 | $(41,813) | $2,428,303 | $2,377,020 | $51,283 | |||||
Total revenue (1) | $1,456,578 | $1,322,954 | $2,907,820 | $2,616,081 | |||||||
General and administrative expenses as a percentage of total revenue (1) | 4.0% | 3.7% | 4.0% | 3.6% | |||||||
Property expenses (excluding reimbursements) as a percentage of total revenue (1) | 1.5% | 1.5% | 1.4% | 1.5% | |||||||
(1) Excludes client reimbursements.
Depreciation and Amortization
Depreciation and amortization decreased by $3.2 million for the three months ended June 30, 2026 and increased
by $18.2 million for the six months ended June 30, 2026 as compared to the same periods in 2025, as a result of
accelerated amortization of in-place leases in the prior year period relating to certain properties leased to clients in
bankruptcy, partially offset by higher depreciation expense due to growth in our portfolio for the three and six months
ended June 30, 2026, respectively.
Interest Expense
The following is a summary of the components of our interest expense (in thousands):
Three months ended June 30, | Six months ended June 30, | ||||||||||
2026 | 2025 | Change | 2026 | 2025 | Change | ||||||
Interest on our revolving credit facilities, commercial paper, term loans, mortgages, senior unsecured notes and bonds, and interest rate swaps | $296,836 | $279,407 | $17,429 | $576,118 | $546,018 | $30,100 | |||||
Credit facility commitment fees | 1,644 | 1,508 | 136 | 3,270 | 2,836 | 434 | |||||
Amortization of debt origination and deferred financing costs | 9,122 | 7,162 | 1,960 | 17,945 | 13,082 | 4,863 | |||||
Gain on interest rate swaps | (1,849) | (1,873) | 24 | (3,703) | (3,778) | 75 | |||||
Amortization of net note and mortgage and note discounts | 8,394 | 981 | 7,413 | 14,714 | 1,698 | 13,016 | |||||
Capital lease obligation | 1,198 | 533 | 665 | 2,415 | 1,057 | 1,358 | |||||
Interest capitalized | (3,262) | (3,894) | 632 | (6,736) | (8,715) | 1,979 | |||||
Interest expense | $312,083 | $283,824 | $28,259 | $604,023 | $552,198 | $51,825 | |||||
Revolving credit facilities, commercial paper, term loans, mortgages and senior unsecured notes and bonds | |||||||||||
Average outstanding balances | $30,309,546 | $28,813,067 | $1,496,479 | $29,779,625 | $28,264,598 | $1,515,027 | |||||
Weighted average interest rates | 3.97% | 3.88% | 3.92% | 3.87% | |||||||
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Interest expense increased by $28.3 million or 10.0%, and $51.8 million, or 9.4%, for the three and six months
ended June 30, 2026 as compared to the same periods in 2025, respectively, primarily due to higher average
borrowings in 2026, as well as higher amortization of mortgage and note premiums and discounts and deferred
financing costs. See notes to the accompanying consolidated financial statements for additional information
regarding our indebtedness.
Property Expenses (excluding reimbursements)
Property expenses (excluding reimbursements) consist of costs associated with properties available for lease, non-
net-leased properties and general portfolio expenses and include, but are not limited to, property taxes,
maintenance, insurance, utilities, property inspections and legal fees.
Property expenses (excluding reimbursements) increased by $1.3 million and $1.4 million for the three and six
months ended June 30, 2026 as compared to the same periods in 2025, respectively, primarily due to higher
property taxes of $5.9 million and $7.4 million, partially offset by lower repairs and maintenance costs of $3.3 million
and $4.4 million.
Property Expenses (reimbursements)
Property expenses (reimbursements) consist of property taxes and operating costs paid on behalf of our clients.
Property expenses (reimbursements) increased by $3.7 million and $13.8 million for the three and six months ended
June 30, 2026 as compared to the same periods in 2025, respectively, primarily due to higher reimbursable property
taxes and maintenance due to growth in our portfolio.
General and Administrative Expenses
General and administrative expenses are expenditures related to the operations of our company, including
employee-related costs, professional fees, and other general overhead costs associated with running our business.
General and administrative expenses increased by $8.3 million and $23.1 million for the three and six months
ended June 30, 2026 as compared to the same periods in 2025, respectively, primarily due to higher employee
costs as we continue to invest in our people and our platform.
Provisions for Impairment of Real Estate
Provisions for impairment of real estate decreased by $88.1 million and $95.3 million during the three and six
months ended June 30, 2026 as compared to the same periods in 2025, respectively. The decrease is primarily due
to larger impairments recorded in 2025 related to properties leased to clients in bankruptcy.
Provisions for Credit Losses on Loans and Financing Receivables
Provisions for credit losses increased by $6.2 million and $26.1 million for the three and six months ended June 30,
2026 as compared to the same periods in 2025, respectively. For the six months ended June 30, 2026, the increase
is primarily due to initial expected credit losses on loans acquired during the period. For the three months ended
June 30, 2026, the increase was due to initial expected credit losses on loans acquired during the period, partially
offset by favorable changes in estimated credit losses for existing loans.
Merger, Transaction, and Other Costs, Net
Merger, transaction, and other costs, net increased by $1.7 million and $12.2 million for the three and six months
ended June 30, 2026 as compared to the same periods in 2025, respectively, primarily due to placement fees
incurred in fundraising for the Fund and certain strategic venture formation costs incurred in the current year.
Gain on Sales of Real Estate
The following summarizes our property dispositions (dollars in thousands):
Three months ended June 30, | Six months ended June 30, | ||||||||||
2026 | 2025 | Change | 2026 | 2025 | Change | ||||||
Number of properties sold | 80 | 73 | 7 | 177 | 128 | 49 | |||||
Net sales proceeds | $160,655 | $116,841 | $43,814 | $348,634 | $209,414 | $139,220 | |||||
Gain on sales of real estate | $38,260 | $38,566 | $(306) | $73,902 | $61,103 | $12,799 | |||||
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Foreign Currency and Derivative Loss, Net
We borrow in the functional currencies of the countries in which we invest. Net foreign currency gain and loss are
primarily related to the remeasurement of intercompany debt from foreign subsidiaries and outstanding borrowings
denominated in the local currencies we invest in. Derivative gain and loss are primarily related to mark-to-market
adjustments on derivatives that do not qualify for hedge accounting and settlement of designated derivatives
reclassified from Accumulated Other Comprehensive Income ("AOCI").
Foreign currency and derivative loss, net increased by $4.4 million and $18.9 million, for the three and six months
ended June 30, 2026 as compared to the same periods in 2025, respectively, primarily due to the impact of foreign
currency fluctuations on our foreign-denominated assets and liabilities, as well as derivative instruments we
executed to reduce the effect of these fluctuations.
Equity in Earnings of Unconsolidated Entities
Equity in earnings of unconsolidated entities decreased by $1.1 million and $2.8 million for the three and six months
ended June 30, 2026 as compared to the same periods in 2025, respectively, primarily attributable to lower income
within our data center joint venture due to a gain on sale from an easement recorded in 2025 with no comparable
gain recorded in 2026, in addition to an adjustment to straight-line rent recognized in the prior year.
Other Income, Net
Other income, net decreased by $0.1 million for the three months ended June 30, 2026 and increased by $7.8
million for the six months ended June 30, 2026 as compared to the same periods in 2025, primarily due to a non-
recurring insurance commutation gain realized during the first quarter of 2026.
Income Taxes
Income taxes primarily consist of international income taxes accrued or paid by us and our subsidiaries, as well as
state and local taxes. The increase of $1.7 million and $12.3 million in income taxes for the three and six months
ended June 30, 2026 as compared to the same periods in 2025, respectively, is primarily attributable to higher
taxable income in the U.K. and Europe, offset with lower state franchise and income taxes in the U.S.
Net Income Attributable to Noncontrolling Interests
Net income attributable to noncontrolling interests increased by $24.5 million and $32.0 million for the three and six
months ended June 30, 2026 as compared to the same periods in 2025, respectively, primarily attributable to the
launches of our U.S. Core Plus Fund and Apollo joint venture, which contributed to increases of $24.6 million and
$32.5 million for the three and six months ended June 30, 2026.
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NON-GAAP FINANCIAL MEASURES
Adjusted Earnings before Interest, Taxes, Depreciation and Amortization for Real Estate ("Adjusted
EBITDAre")
Nareit established an EBITDA metric for real estate companies (i.e., EBITDA for real estate, or EBITDAre) it
believed would provide investors with a consistent measure to help make investment decisions among certain
REITs. Our definition of “Adjusted EBITDAre” is generally consistent with the Nareit definition, other than our
adjustment to remove foreign currency and derivative gain and loss and merger, transaction, and other costs, net.
We define Adjusted EBITDAre, a non-GAAP financial measure, for the most recent quarter as earnings (net income)
before (i) interest expense, (ii) income taxes, (iii) depreciation and amortization, (iv) executive severance charge,
(v) provisions for impairment of real estate, (vi) provisions for credit losses on loans and financing receivables, (vii)
merger, transaction, and other costs, net, (viii) gain on sales of real estate, (ix) foreign currency and derivative gain
and loss, net, and (x) equity in earnings of unconsolidated entities. Our Adjusted EBITDAre may not be comparable
to Adjusted EBITDAre reported by other companies or as defined by Nareit, and other companies may interpret or
define Adjusted EBITDAre differently than we do. Management believes Adjusted EBITDAre to be a meaningful
measure of a REIT’s performance because it provides a view of our operating performance, analyzes our ability to
meet interest payment obligations before the effects of income tax, depreciation and amortization expense,
provisions for impairment, provisions for credit losses on loans and financing receivables, gain on sales of real
estate and other items, as defined above, that affect comparability, including the removal of non-recurring and non-
cash items that industry observers believe are less relevant to evaluating the operating performance of a company.
In addition, EBITDAre is widely followed by industry analysts, lenders, investors, rating agencies, and others as a
means of evaluating the operating performance of business activities prior to servicing debt obligations.
Management also believes the use of an Annualized Adjusted EBITDAre metric, which is calculated by multiplying
Adjusted EBITDAre for the applicable quarter by four, is meaningful because it represents our current earnings run
rate for the period presented. Adjusted EBITDAre should be considered along with, but not as an alternative to net
income as a measure of our operating performance. We define Annualized Pro Forma Adjusted EBITDAre as
Annualized Adjusted EBITDAre, subject to certain adjustments to incorporate Adjusted EBITDAre from investments
we acquired or stabilized during the applicable quarter and Adjusted EBITDAre from investments we disposed of
during the applicable quarter, and include transaction accounting adjustments in accordance with U.S. GAAP, giving
pro forma effect to all transactions as if they occurred at the beginning of the applicable quarter. Our calculation
includes all adjustments consistent with the requirements to present Annualized Adjusted EBITDAre on a pro forma
basis in accordance with Article 11 of Regulation S-X. We believe Annualized Pro Forma Adjusted EBITDAre is a
useful non-GAAP supplemental measure, as it excludes investments that were no longer owned at the balance
sheet date and includes the annualized base rent from investments acquired during the quarter. Management also
uses our ratio of Net Debt/Annualized Pro Forma Adjusted EBITDAre as a measure of leverage in assessing our
financial performance, which is calculated as net debt (which we define as total debt, excluding deferred financing
costs and net discounts, less consolidated cash and cash equivalents), divided by Annualized Pro Forma Adjusted
EBITDAre. The ratio of our net debt to our Annualized Pro Forma Adjusted EBITDAre is also used to determine
vesting of performance share awards granted to our executive officers.
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The following is a reconciliation of net income (which we believe is the most comparable U.S. GAAP measure) to
Adjusted EBITDAre and Annualized Pro Forma Adjusted EBITDAre calculations for the period indicated below
(dollars in thousands):
Three months ended June 30, | |
2026 | |
Net income | $370,513 |
Interest | 312,083 |
Income taxes | 25,808 |
Depreciation and amortization | 644,677 |
Executive severance charge | 255 |
Provisions for impairment of real estate | 54,185 |
Provisions for credit losses on loans and financing receivables | 7,258 |
Merger, transaction, and other costs, net | 2,058 |
Gain on sales of real estate | (38,260) |
Foreign currency and derivative loss, net | 8,824 |
Equity in earnings of unconsolidated entities | (2,204) |
Adjusted EBITDAre | $1,385,197 |
Annualized Adjusted EBITDAre | $5,540,788 |
Annualized Pro Forma Adjustments | $111,889 |
Annualized Pro Forma Adjusted EBITDAre | $5,652,677 |
Total debt per the consolidated balance sheets, excluding deferred financing costs and net discounts | $30,990,552 |
Less: Cash and cash equivalents | (552,648) |
Net Debt | $30,437,904 |
Net Debt/Annualized Pro Forma Adjusted EBITDAre | 5.4x |
As described above, the Annualized Pro Forma Adjustments, which include transaction accounting adjustments in
accordance with U.S. GAAP, consist of adjustments to incorporate the Adjusted EBITDAre from investments we
acquired or stabilized during the applicable quarter and Adjusted EBITDAre from investments we disposed of during
the applicable quarter, giving pro forma effect to all transactions as if they occurred at the beginning of the
applicable quarter, consistent with the requirements of Article 11 of Regulation S-X. The following table summarizes
our Annualized Pro Forma Adjustments related to our Annualized Pro Forma Adjusted EBITDAre calculation for the
period indicated below (in thousands):
Three months ended June 30, | |
2026 | |
Annualized pro forma adjustments from investments acquired or stabilized | $121,946 |
Annualized pro forma adjustments from investments disposed | (10,057) |
Annualized Pro Forma Adjustments | $111,889 |
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FUNDS FROM OPERATIONS AVAILABLE TO COMMON STOCKHOLDERS AND NORMALIZED FUNDS FROM
OPERATIONS AVAILABLE TO COMMON STOCKHOLDERS
We define FFO, a non-GAAP measure, consistent with the National Association of Real Estate Investment Trusts'
definition, as net income available to common stockholders, plus depreciation and amortization of real estate
assets, plus provisions for impairments of depreciable real estate assets, and reduced by gain on property sales.
We define Normalized FFO, a non-GAAP financial measure, as FFO excluding merger, transaction, and other costs,
net. We define diluted FFO and diluted normalized FFO as FFO and normalized FFO adjusted for dilutive
noncontrolling interests.
The following summarizes our FFO and Normalized FFO (in millions, except per share data):
Three months ended June 30, | Six months ended June 30, | ||||||||||
2026 | 2025 | % Change | 2026 | 2025 | % Change | ||||||
FFO available to common stockholders | $996.6 | $955.7 | 4.3% | $1,990.2 | $1,893.4 | 5.1% | |||||
FFO per common share (1) | $1.07 | $1.06 | 0.9% | $2.13 | $2.11 | 0.9% | |||||
Normalized FFO available to common stockholders | $998.7 | $956.1 | 4.5% | $2,003.0 | $1,894.0 | 5.8% | |||||
Normalized FFO per common share (1) | $1.07 | $1.06 | 0.9% | $2.14 | $2.11 | 1.4% | |||||
(1) All per share amounts are presented on a diluted per common share basis.
We consider FFO and Normalized FFO to be appropriate supplemental measures of a REIT’s operating
performance as they are based on a net income analysis of property portfolio performance that adds back items
such as depreciation and impairments for FFO, and adds back merger, transaction, and other costs, net, for
Normalized FFO. The historical accounting convention used for real estate assets requires straight-line depreciation
of buildings and improvements, which implies that the value of real estate assets diminishes predictably over time.
Since real estate values historically rise and fall with market conditions, presentations of operating results for a
REIT, using historical accounting for depreciation, could be less informative.
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The following is a reconciliation of net income available to common stockholders (which we believe is the most
comparable U.S. GAAP measure) to FFO and Normalized FFO. Also presented is information regarding
distributions paid to common stockholders and the weighted average number of common shares used for the basic
and diluted computation per share (in thousands, except per share amounts):
Three months ended June 30, | Six months ended June 30, | ||||||
2026 | 2025 | 2026 | 2025 | ||||
Net income available to common stockholders | $343,955 | $196,919 | $655,721 | $446,734 | |||
Depreciation and amortization | 644,677 | 647,849 | 1,274,952 | 1,256,784 | |||
Depreciation of furniture, fixtures and equipment | (802) | (604) | (1,589) | (1,142) | |||
Provisions for impairment of real estate | 54,185 | 142,254 | 144,350 | 239,672 | |||
Gain on sales of real estate | (38,260) | (38,566) | (73,902) | (61,103) | |||
Proportionate share of adjustments for unconsolidated entities | 9,021 | 9,085 | 18,499 | 15,340 | |||
FFO adjustments allocable to noncontrolling interests | (16,176) | (1,189) | (27,830) | (2,882) | |||
FFO available to common stockholders | $996,600 | $955,748 | $1,990,201 | $1,893,403 | |||
FFO allocable to dilutive noncontrolling interests | 2,344 | 2,417 | 4,377 | 4,842 | |||
Diluted FFO | $998,944 | $958,165 | $1,994,578 | $1,898,245 | |||
FFO available to common stockholders | $996,600 | $955,748 | $1,990,201 | $1,893,403 | |||
Merger, transaction, and other costs, net | 2,058 | 331 | 12,845 | 610 | |||
Normalized FFO available to common stockholders | $998,658 | $956,079 | $2,003,046 | $1,894,013 | |||
Normalized FFO allocable to dilutive noncontrolling interests | 2,344 | 2,417 | 4,377 | 4,842 | |||
Diluted Normalized FFO | $1,001,002 | $958,496 | $2,007,423 | $1,898,855 | |||
FFO per common share： | |||||||
Basic | $1.07 | $1.06 | $2.14 | $2.11 | |||
Diluted | $1.07 | $1.06 | $2.13 | $2.11 | |||
Normalized FFO per common share: | |||||||
Basic | $1.07 | $1.06 | $2.15 | $2.11 | |||
Diluted | $1.07 | $1.06 | $2.14 | $2.11 | |||
Distributions paid to common stockholders | $756,779 | $727,450 | $1,514,811 | $1,439,274 | |||
FFO after distributions | $239,821 | $228,298 | $475,390 | $454,129 | |||
Normalized FFO after distributions | $241,879 | $228,629 | $488,235 | $454,739 | |||
Weighted average number of common shares used for FFO and Normalized FFO: | |||||||
Basic | 932,307 | 902,966 | 932,133 | 897,338 | |||
Diluted | 937,344 | 906,398 | 937,117 | 900,797 | |||
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ADJUSTED FUNDS FROM OPERATIONS AVAILABLE TO COMMON STOCKHOLDERS
We define AFFO, a non-GAAP measure, as FFO adjusted for unique revenue and expense items, which we believe
are not as pertinent to the measurement of our ongoing operating performance. We define diluted AFFO as AFFO
adjusted for dilutive noncontrolling interests.
The following summarizes our AFFO (in millions, except per share data):
Three months ended June 30, | Six months ended June 30, | ||||||||||
2026 | 2025 | % Change | 2026 | 2025 | % Change | ||||||
AFFO available to common stockholders | $1,022.1 | $947.5 | 7.9% | $2,079.7 | $1,897.2 | 9.6% | |||||
AFFO per common share (1) | $1.09 | $1.05 | 3.8% | $2.22 | $2.11 | 5.2% | |||||
(1) All per share amounts are presented on a diluted per common share basis.
We consider AFFO to be an appropriate supplemental measure of our performance. Most companies in our industry
use a similar measurement, but they may use the term “CAD” (for Cash Available for Distribution), “FAD” (for Funds
Available for Distribution) or other terms. Our AFFO calculations may not be comparable to AFFO, CAD or FAD
reported by other companies, and other companies may interpret or define such terms differently than we do.
We believe the non-GAAP financial measure AFFO provides useful information to investors because it is a widely
accepted industry measure of the operating performance of real estate companies that is used by industry analysts
and investors who look at and compare those companies. In particular, AFFO provides an additional measure to
compare the operating performance of different REITs without having to account for differing depreciation
assumptions and other unique revenue and expense items which are not pertinent to measuring a particular
company’s on-going operating performance. Therefore, we believe that AFFO is an appropriate supplemental
performance metric, and that the most appropriate U.S. GAAP performance metric to which AFFO should be
reconciled is net income available to common stockholders. Presentation of the information regarding FFO,
Normalized FFO, and AFFO is intended to assist the reader in comparing the operating performance of different
REITs, although it should be noted that not all REITs calculate FFO, Normalized FFO, and AFFO in the same way,
so comparisons with other REITs may not be meaningful. Furthermore, FFO, Normalized FFO, and AFFO are not
necessarily indicative of cash flow available to fund cash needs and should not be considered as alternatives to net
income as an indication of our performance. FFO, Normalized FFO, and AFFO should not be considered as
alternatives to reviewing our cash flows from operating, investing, and financing activities. In addition, FFO,
Normalized FFO, and AFFO should not be considered as measures of liquidity, our ability to make cash
distributions, or our ability to pay interest payments.
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The following is a reconciliation of net income available to common stockholders (which we believe is the most
comparable U.S. GAAP measure) to Normalized FFO and AFFO. Also presented is information regarding
distributions paid to common stockholders and the weighted average number of common shares used for the basic
and diluted computation per share (in thousands, except per share amounts).
Three months ended June 30, | Six months ended June 30, | ||||||
2026 | 2025 | 2026 | 2025 | ||||
Net income available to common stockholders | $343,955 | $196,919 | $655,721 | $446,734 | |||
Cumulative adjustments to calculate Normalized FFO (1) | 654,703 | 759,160 | 1,347,325 | 1,447,279 | |||
Normalized FFO available to common stockholders | 998,658 | 956,079 | 2,003,046 | 1,894,013 | |||
Debt-related non-cash items: | |||||||
Amortization of net debt discounts and deferred financing costs | 17,696 | 8,257 | 33,074 | 14,890 | |||
Amortization of acquired interest rate swap value (2) | 1,530 | 3,555 | 3,061 | 7,266 | |||
Capital expenditures from operating properties: | |||||||
Leasing costs and commissions | (1,944) | (1,985) | (3,298) | (2,865) | |||
Recurring capital expenditures | — | (221) | (170) | (240) | |||
Other non-cash items: | |||||||
Provisions for credit losses on loans and financing receivables | 7,258 | 1,109 | 46,361 | 20,280 | |||
Amortization of share-based compensation | 9,268 | 8,110 | 20,651 | 14,009 | |||
Straight-line rent and expenses, net | (39,536) | (30,226) | (79,046) | (74,038) | |||
Amortization of above and below-market leases, net | 16,883 | 6,287 | 30,763 | 21,613 | |||
Deferred tax expense | 281 | 413 | 1,718 | 309 | |||
Proportionate share of adjustments for unconsolidated entities | (320) | (1,678) | (774) | (1,641) | |||
Executive severance charge (3) | 255 | — | 1,846 | — | |||
Other adjustments (4) | 12,091 | (2,209) | 22,441 | 3,611 | |||
AFFO available to common stockholders | $1,022,120 | $947,491 | $2,079,673 | $1,897,207 | |||
AFFO allocable to dilutive noncontrolling interests | 2,338 | 2,401 | 4,772 | 4,802 | |||
Diluted AFFO | $1,024,458 | $949,892 | $2,084,445 | $1,902,009 | |||
AFFO per common share: | |||||||
Basic | $1.10 | $1.05 | $2.23 | $2.11 | |||
Diluted | $1.09 | $1.05 | $2.22 | $2.11 | |||
Distributions paid to common stockholders | $756,779 | $727,450 | $1,514,811 | $1,439,274 | |||
AFFO after distributions | $265,341 | $220,041 | $564,862 | $457,933 | |||
Weighted average number of common shares used for AFFO: | |||||||
Basic | 932,307 | 902,966 | 932,133 | 897,338 | |||
Diluted | 937,344 | 906,398 | 937,117 | 900,797 | |||
(1)See reconciling items for Normalized FFO presented under “Funds from Operations Available to Common Stockholders and Normalized Funds
from Operations Available to Common Stockholders".
(2)Includes the amortization of the purchase price allocated to interest rate swaps acquired in the merger with Spirit.
(3)The executive severance charge reflects certain benefits related to our Chief Legal Officer's expected departure in September 2026.
(4)Includes primarily non-cash foreign currency losses (gains) from remeasurement to USD, mark-to-market adjustments on investments and
derivatives that are non-cash in nature, obligations related to financing lease liabilities, and adjustments allocable to noncontrolling interests.
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PROPERTY PORTFOLIO INFORMATION
As of June 30, 2026, most of the properties in our portfolio were leased under net lease agreements. A net lease
typically requires the client to be responsible for monthly rent and certain property operating expenses including
property taxes, insurance, and maintenance. In addition, clients of our properties typically pay rent increases based
on: (1) fixed increases, (2) increases tied to inflation (typically subject to ceilings), or (3) additional rent calculated as
a percentage of the clients' gross sales above a specified level.
We define total portfolio annualized base rent as our pro-rata share of contractual monthly base rent for all leases in
place and exchange rates as of the balance sheet date, multiplied by 12, and excluding percentage rent and income
on loans and preferred equity investments. If there is a rent abatement, we annualize the first monthly contractual
base rent following the free rent period. Total annualized base rent has not been reduced to reflect reserves
recorded as reductions to GAAP rental revenue in the periods presented. We believe total annualized base rent is a
useful supplemental operating measure, as it excludes properties that were no longer owned at the balance sheet
date and includes the annualized rent from properties acquired during the quarter.
Top 20 Industry Concentrations
We are engaged in a single business activity, which is the leasing of property to clients, generally on a net lease
basis. That business activity spans various geographic boundaries and includes property types and clients engaged
in various industries. Even though we have a single segment, we believe our investors continue to view
diversification as a key component of our investment philosophy and so we believe it remains important to present
certain information regarding our property portfolio classified according to the business of the respective clients,
expressed as a percentage of our total portfolio annualized base rent:
Percentage of Total Portfolio Annualized Base Rent by Industry | ||||
As of | ||||
June 30, 2026 | December 31, 2025 (1) | |||
Grocery | 11.1% | 11.1% | ||
Convenience Stores | 9.4 | 9.5 | ||
Home Improvement | 6.4 | 6.4 | ||
Dollar Stores | 6.0 | 6.1 | ||
Restaurants-Quick Service | 4.8 | 4.8 | ||
Automotive Service | 4.2 | 4.3 | ||
Health and Fitness | 4.2 | 4.4 | ||
Drug Stores | 4.1 | 4.3 | ||
General Merchandise | 3.7 | 3.5 | ||
Restaurants-Casual Dining | 3.6 | 3.8 | ||
Gaming | 3.1 | 3.1 | ||
Home Furnishings | 3.0 | 2.8 | ||
Transportation Services | 3.0 | 2.9 | ||
Health Care | 2.7 | 2.7 | ||
Apparel Stores | 2.7 | 2.6 | ||
Sporting Goods | 2.5 | 2.4 | ||
Wholesale Clubs | 2.1 | 2.2 | ||
Motor Vehicle Dealerships | 2.0 | 1.7 | ||
Entertainment | 1.8 | 1.9 | ||
Theaters | 1.8 | 1.9 | ||
(1) Annualized Base Rent percentages have been recast to conform to the current period presentation.
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Property Type Composition
The following table sets forth certain property type information regarding our property portfolio as of June 30, 2026
(dollars and square footage in thousands):
Property Type | Number of Properties | Leasable Square Feet (1) | Annualized Base Rent | Percentage of Annualized Base Rent | ||||
Retail | 14,913 | 216,919 | $4,132,195 | 78.3% | ||||
Industrial | 604 | 127,032 | 856,311 | 16.2 | ||||
Gaming | 2 | 5,053 | 165,629 | 3.1 | ||||
Other (2) | 69 | 4,216 | 126,265 | 2.4 | ||||
Total | 15,588 | 353,220 | $5,280,400 | 100.0% |
(1)Represents leasable building square footage, which includes our portfolio of unconsolidated joint ventures based on ownership percentage
and deducts noncontrolling interests. Excludes 2,962 acres of leased land categorized as agriculture as of June 30, 2026.
(2)"Other" primarily includes 27 properties classified as agriculture with $35.8 million in annualized base rent, 15 properties classified as office
with $33.4 million in annualized base rent, 21 properties classified as country clubs with $28.0 million in annualized base rent, and three
properties classified as data centers with $25.0 million in annualized base rent, as well as one land parcel under development.
Client Diversification
The following table sets forth the 20 largest clients in our property portfolio, expressed as a percentage of total
portfolio annualized base rent, which does not give effect to deferred rent or interest earned on loans and preferred
equity investments, as of June 30, 2026:
Client | Number of Leases | Percentage of Total Portfolio Annualized Base Rent (1) | ||
Dollar General | 1,855 | 3.3% | ||
7-Eleven | 802 | 3.1 | ||
Walgreens | 391 | 3.0 | ||
Family Dollar | 1,253 | 2.6 | ||
Life Time Group | 43 | 2.1 | ||
(B&Q) Kingfisher | 72 | 2.0 | ||
Wynn Resorts | 1 | 2.0 | ||
EG Group | 414 | 2.0 | ||
Asda | 41 | 1.6 | ||
Sainsbury's | 42 | 1.6 | ||
Tesco | 30 | 1.5 | ||
BJ's Wholesale Club | 45 | 1.5 | ||
Tractor Supply | 258 | 1.4 | ||
FedEx | 60 | 1.3 | ||
MGM (Bellagio) | 1 | 1.1 | ||
CVS Pharmacy | 206 | 1.1 | ||
Carrefour | 43 | 1.0 | ||
Home Depot | 41 | 0.9 | ||
Walmart / Sam's Club | 62 | 0.9 | ||
Decathlon | 85 | 0.9 | ||
Total | 5,745 | 34.8% |
(1)Amounts for each client are calculated independently; therefore, the individual percentages may not sum to the total.
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Lease Expirations
The following table sets forth certain information regarding the timing of the lease term expirations in our portfolio
(excluding rights to extend a lease at the option of the client) and their contribution to total portfolio annualized base
rent as of June 30, 2026 (dollars in thousands):
Total Portfolio (1) | |||||||
Expiring Leases | Annualized Base Rent | Percentage of Annualized Base Rent | |||||
Year | Retail | Non-Retail | |||||
2026 | 386 | 13 | $78,172 | 1.5% | |||
2027 | 1,370 | 50 | 308,889 | 5.8 | |||
2028 | 1,766 | 73 | 407,284 | 7.7 | |||
2029 | 1,916 | 52 | 452,829 | 8.6 | |||
2030 | 1,345 | 52 | 371,413 | 7.0 | |||
2031 | 1,292 | 78 | 458,310 | 8.7 | |||
2032 | 1,462 | 55 | 382,140 | 7.2 | |||
2033 | 1,074 | 37 | 326,834 | 6.2 | |||
2034 | 819 | 41 | 361,023 | 6.8 | |||
2035 | 740 | 32 | 240,747 | 4.6 | |||
2036 | 701 | 40 | 276,869 | 5.2 | |||
2037 | 564 | 25 | 153,170 | 2.9 | |||
2038 | 425 | 24 | 149,872 | 2.8 | |||
2039 | 543 | 9 | 148,326 | 2.8 | |||
2040 | 415 | 8 | 163,006 | 3.1 | |||
2041-2143 | 1,897 | 127 | 1,001,516 | 19.1 | |||
Total | 16,715 | 716 | $5,280,400 | 100.0% | |||
(1)Leases on our multi-tenant properties are counted separately in the table above.
Geographic Diversification
The following table sets forth certain geographic information regarding our property portfolio as of June 30, 2026
(square footage in thousands):
Location | Number of Properties | Percent Leased | Approximate Leasable Square Feet | Percentage of Annualized Base Rent | |||
Alabama | 505 | 100% | 6,059 | 1.7% | |||
Alaska | 16 | 94 | 623 | 0.2 | |||
Arizona | 286 | 99 | 4,344 | 1.7 | |||
Arkansas | 309 | 99 | 3,260 | 0.9 | |||
California | 364 | 99 | 14,204 | 4.4 | |||
Colorado | 201 | 100 | 3,714 | 1.3 | |||
Connecticut | 57 | 100 | 2,638 | 0.6 | |||
Delaware | 26 | 96 | 283 | 0.1 | |||
Florida | 1,072 | 99 | 12,864 | 4.7 | |||
Georgia | 720 | 99 | 10,866 | 3.3 | |||
Hawaii | 22 | 100 | 48 | 0.1 | |||
Idaho | 40 | 98 | 415 | 0.2 | |||
Illinois | 600 | 100 | 14,554 | 4.2 | |||
Indiana | 479 | 99 | 12,569 | 2.4 | |||
Iowa | 121 | 99 | 4,303 | 0.7 | |||
Kansas | 201 | 98 | 5,187 | 0.8 | |||
Kentucky | 454 | 100 | 6,430 | 1.4 |
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Location | Number of Properties | Percent Leased | Approximate Leasable Square Feet | Percentage of Annualized Base Rent | |||
Louisiana | 379 | 100 | 5,814 | 1.6 | |||
Maine | 112 | 99 | 1,304 | 0.5 | |||
Maryland | 101 | 98 | 4,014 | 1.1 | |||
Massachusetts | 210 | 100 | 7,782 | 3.7 | |||
Michigan | 584 | 100 | 8,563 | 2.5 | |||
Minnesota | 283 | 97 | 5,468 | 1.5 | |||
Mississippi | 338 | 100 | 5,412 | 1.1 | |||
Missouri | 424 | 98 | 6,387 | 1.6 | |||
Montana | 32 | 100 | 407 | 0.2 | |||
Nebraska | 84 | 100 | 1,294 | 0.3 | |||
Nevada | 81 | 100 | 4,699 | 1.8 | |||
New Hampshire | 68 | 96 | 1,265 | 0.4 | |||
New Jersey | 151 | 93 | 2,717 | 1.1 | |||
New Mexico | 149 | 100 | 2,219 | 0.7 | |||
New York | 376 | 99 | 6,642 | 2.5 | |||
North Carolina | 493 | 98 | 9,900 | 2.5 | |||
North Dakota | 26 | 100 | 595 | 0.2 | |||
Ohio | 827 | 98 | 23,045 | 4.1 | |||
Oklahoma | 389 | 100 | 5,466 | 1.5 | |||
Oregon | 42 | 100 | 698 | 0.3 | |||
Pennsylvania | 379 | 95 | 7,501 | 1.9 | |||
Rhode Island | 35 | 97 | 415 | 0.2 | |||
South Carolina | 385 | 98 | 5,975 | 1.7 | |||
South Dakota | 40 | 98 | 603 | 0.2 | |||
Tennessee | 582 | 100 | 9,717 | 2.3 | |||
Texas | 1,826 | 97 | 34,788 | 9.5 | |||
Utah | 55 | 100 | 2,531 | 0.5 | |||
Vermont | 21 | 100 | 208 | 0.1 | |||
Virginia | 418 | 99 | 8,415 | 2.4 | |||
Washington | 86 | 100 | 2,132 | 0.7 | |||
West Virginia | 109 | 100 | 949 | 0.3 | |||
Wisconsin | 327 | 99 | 7,922 | 1.7 | |||
Wyoming | 25 | 100 | 215 | 0.1 | |||
Puerto Rico | 6 | 100 | 59 | * | |||
U.S. Virgin Islands | 1 | 100 | 38 | * | |||
France | 45 | 98 | 2,703 | 0.5 | |||
Germany | 6 | 100 | 1,935 | 0.3 | |||
Ireland | 24 | 100 | 2,534 | 0.8 | |||
Italy | 88 | 100 | 4,150 | 1.1 | |||
Netherlands | 2 | 100 | 2,915 | 0.5 | |||
Poland | 6 | 100 | 3,834 | 0.6 | |||
Portugal | 8 | 100 | 474 | 0.1 | |||
Spain | 102 | 98 | 8,865 | 1.6 | |||
United Kingdom | 390 | 99 | 38,290 | 15.0 | |||
Total/average | 15,588 | 99% | 353,220 | 100.0% | |||
*Less than 0.1% |
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IMPACT OF RECENT ACCOUNTING PRONOUNCEMENTS
For information on the impact of new accounting standards on our consolidated financial statements, see note 1,
Summary of Significant Accounting Policies, to our Consolidated Financial Statements.
CRITICAL ACCOUNTING POLICIES
Our consolidated financial statements have been prepared in accordance with U.S. GAAP and are the basis for our
discussion and analysis of financial condition and results of operations. Preparing our consolidated financial
statements requires us to make a number of estimates and assumptions that affect the reported amounts and
disclosures in the consolidated financial statements. We believe that we have made these estimates and
assumptions in an appropriate manner and in a way that accurately reflects our financial condition. We continually
test and evaluate these estimates and assumptions using our historical knowledge of the business, as well as other
factors, to ensure that they are reasonable for reporting purposes. However, actual results may differ from these
estimates and assumptions. There have been no material changes to the Critical Accounting Policies disclosed in
our annual report on Form 10-K for the year ended December 31, 2025. This summary should be read in
conjunction with the more complete discussion of our accounting policies and procedures included in note 1,
Summary of Significant Accounting Policies, to our consolidated financial statements in our annual report.
Item 3: Quantitative and Qualitative Disclosures about Market Risk
We are exposed to economic risks from interest rates and foreign currency exchange rates. A portion of these risks
is hedged, but the risks may affect our financial statements.
Interest Rates
We are exposed to interest rate changes primarily as a result of our revolving credit facilities and commercial paper
programs, term loans, mortgages payable, and long-term notes and bonds used to maintain liquidity and expand
our real estate investment portfolio and operations. Our interest rate risk management objective is to limit the impact
of interest rate changes on earnings and cash flow and to lower our overall borrowing costs. To achieve these
objectives, we primarily issue long-term notes and bonds, primarily at fixed rates.
In order to mitigate and manage the effects of interest rate risks on our operations, we may utilize a variety of
financial instruments, including interest rate swaps, interest rate swaptions, interest rate locks and caps. The use of
these types of instruments to hedge our exposure to changes in interest rates carries additional risks, including
counterparty credit risk, the enforceability of hedging contracts and the risk that unanticipated and significant
changes in interest rates will cause a significant loss of basis in the contract. To limit counterparty credit risk, we will
seek to enter into such agreements with major financial institutions with favorable credit ratings. There can be no
assurance that we will be able to adequately protect against the foregoing risks or realize an economic benefit that
exceeds the related amounts incurred in connection with engaging in such hedging activities. We do not enter into
any derivative transactions for speculative or trading purposes.
The following table presents, by year of expected maturity, the principal amounts, average interest rates and
estimated fair values of our fixed and variable rate debt as of June 30, 2026. This information is presented to
evaluate the expected cash flows and sensitivity to interest rate changes.
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Expected Maturity Data
The following table summarizes the maturity of our debt as of June 30, 2026 (dollars in millions):
Consolidated Fixed Rate Debt | Consolidated Variable Rate Debt | End of Period Interest Rate (3) | |||||||||||||||||
Year Principal Due | Unsecured Term Loans | Mortgages Payable | Senior Unsecured Notes and Bonds | Subtotal | RI Credit Facilities | Fund Credit Facilities | Commercial Paper | Total Consolidated Debt Principal | Fixed Rate Debt (4) | Variable Rate Debt | |||||||||
2026 | $— | $11.1 | $950.0 | $961.1 | $— | $— | $1,441.4 | $2,402.5 | 4.24% | 3.46% | |||||||||
2027 | 500.0 | 22.3 | 2,360.7 | 2,883.0 | 1,039.7 | — | — | 3,922.7 | 2.81 | 3.27 | |||||||||
2028 | 1,571.9 | 1.3 | 2,499.8 | 4,073.0 | — | — | — | 4,073.0 | 3.66 | — | |||||||||
2029 | — | 1.3 | 3,675.3 | 3,676.6 | — | 281.5 | — | 3,958.1 | 3.85 | 4.66 | |||||||||
2030 | 4.1 | 1.0 | 2,442.5 | 2,447.6 | — | — | — | 2,447.6 | 3.73 | — | |||||||||
Thereafter | 698.9 | — | 13,487.8 | 14,186.7 | — | — | — | 14,186.7 | 4.19 | — | |||||||||
Total (1) | $2,774.9 | $37.0 | $25,416.1 | $28,228.0 | $1,039.7 | $281.5 | $1,441.4 | $30,990.6 | 3.89% | 3.51% | |||||||||
Fair Value (2) | $2,804.2 | $36.7 | $24,529.1 | $27,370.0 | $1,039.7 | $281.5 | $1,441.4 | $30,132.6 | |||||||||||
(1)Excludes net discounts recorded on mortgages payable, net discounts recorded on notes payable, and deferred financing costs on term loans,
mortgages payable, and notes payable.
(2)We base the estimated fair value of our 2026 Term Loan Facility, mortgages and private senior notes payable as of June 30, 2026, on the
relevant forward interest rate curve, plus an applicable credit-adjusted spread. We base the estimated fair value of the publicly traded fixed
rate senior notes and bonds, and other term loans as discussed in note 7, Term Loans as of June 30, 2026, on the indicative market prices
and recent trading activity of our senior notes and bonds payable. We believe that the carrying values of the credit facilities, and commercial
paper borrowings reasonably approximate their estimated fair values as of June 30, 2026.
(3)Calculated as the weighted average interest rate as of June 30, 2026. The weighted average interest rates reflect the effective fixed rate for
floating rate debt that is fixed through interest rate swaps.
(4)In connection with our merger with Spirit in January 2024, we effectively assumed Spirit’s existing term loans and fixed rate swaps, which carry
a weighted average fixed interest rate of 3.3% for our term loan maturing in August 2027. In November 2025, we entered into interest rate
swaps, which fixed our per annum interest rate at 4.3% for our term loan initially maturing in January 2028. In March 2026, we closed a
$693.9 million unsecured term loan due January 2036 at a fixed rate of 4.9%. Concurrently, we executed a cross-currency swap on
$500.0 million of proceeds for approximately €431.0 million, achieving an effective blended borrowing rate of 4.34%. In June 2026, the Fund
fully drew on its $380.0 million unsecured delayed draw term loan, which initially matures in April 2028, and is subject to interest rate swaps
that fix the effective interest rate at 4.92%.
The table above incorporates only those exposures that exist as of June 30, 2026. It does not consider those
exposures or positions that could arise after that date. As a result, our ultimate realized gain or loss, with respect to
interest rate fluctuations, would depend on the exposures that arise during the period, our hedging strategies at the
time, and interest rates.
As of June 30, 2026, our outstanding mortgages payable, notes, and bonds had fixed interest rates. Interest on our
credit facilities and commercial paper borrowings and term loans is variable. However, the variable interest rate
feature on certain term loans has been mitigated by interest rate swap agreements, while one term loan bears a
fixed contractual rate. As of June 30, 2026, a 1% change in interest rates on our variable-rate debt would change
our interest rate costs by $27.6 million.
Foreign Currency Exchange Rates
We are exposed to foreign currency exchange variability related to investments in and earnings from our foreign
investments. Foreign currency market risk is the possibility that our results of operations or financial position could
be better or worse than planned because of changes in foreign currency exchange rates. We primarily hedge our
foreign currency risk by borrowing in the currencies in which we invest thereby providing a natural hedge. We
continuously evaluate and manage our foreign currency risk through the use of derivative financial instruments,
including currency exchange swaps, and foreign currency forward contracts with financial counterparties where
practicable. Such derivative instruments are viewed as risk management tools and are not used for speculative or
trading purposes. Additionally, our inability to redeploy rent receipts from our international operations on a timely
basis subjects us to foreign exchange risk.
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Item 4: Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") that are designed to ensure that information required to be
disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods
specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated
and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as
appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure
controls and procedures, management recognizes that any controls and procedures, no matter how well designed
and operated, can provide only reasonable assurance of achieving the desired control objectives, and management
necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and
procedures.
We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and
procedures as of June 30, 2026, under the supervision and with the participation of management, including our
Chief Executive Officer and Chief Financial Officer.
Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that as of June 30, 2026
our disclosure controls and procedures were effective and were operating at a reasonable assurance level.
Changes in Internal Controls
There have been no changes in our internal control over financial reporting that occurred during the quarter ended
June 30, 2026, that have materially affected, or are reasonably likely to materially affect, our internal control over
financial reporting.
Limitations on the Effectiveness of Controls
Internal control over financial reporting cannot provide absolute assurance of achieving financial reporting objectives
because of its inherent limitations. Internal control over financial reporting is a process that involves human
diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures.
Internal control over financial reporting also can be circumvented by collusion or improper management override.
Because of such limitations, there is a risk that material misstatements may not be prevented or detected on a
timely basis by internal control over financial reporting. However, these inherent limitations are known features of
the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not
eliminate, this risk.
PART II. OTHER INFORMATION
Item 1A: Risk Factors
You should carefully consider the risks described in "Item 1A, Risk Factors" in Part I of our annual report on
Form 10-K for the year ended December 31, 2025, as our business, financial condition and results of operations
could be adversely affected by any of the risks and uncertainties described therein. There have been no material
changes to the risk factors disclosed in our annual report on Form 10-K for the year ended December 31, 2025.
Item 2: Unregistered Sales of Equity Securities and Use of Proceeds
The following table presents the number and average price of shares purchased during the three months ended
June 30, 2026:
Period | Total Number of Shares Purchased (1) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Program (2) | Average Price Paid per Share | Maximum Dollar Value of Shares that May be Repurchased Under the Program | |||||
April 1, 2026 — April 30, 2026 | 204 | $61.88 | — | $— | $1,898,091,440 | |||||
May 1, 2026 — May 31, 2026 | 448 | $62.85 | — | $— | $1,898,091,440 | |||||
June 1, 2026 — June 30, 2026 | 351 | $61.99 | — | $— | $1,898,091,440 | |||||
Total | 1,003 | $62.35 | — | $— |
(1)All 1,003 shares of common stock purchased during the three months ended June 30, 2026 were withheld for state and federal payroll taxes
on the vesting of employee stock awards, as permitted under the Realty Income 2021 Incentive Award Plan. The withholding of common stock
by us could be deemed a purchase of such common stock.
(2)We are authorized to repurchase up to $2.0 billion in shares of our common stock under our share repurchase program, which will expire in
January 2028.
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Item 5: Other Information
(a) None.
(b) None.
(c) Director and Officer Trading Arrangements
During the three months ended June 30, 2026, none of our officers or directors adopted terminated
instruction or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative
defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement.”
Item 6: Exhibits
Exhibit No. | Description | |
Instruments defining the rights of security holders, including indentures | ||
4.1 | Indenture dated October 28, 1998 between the Company and The Bank of New York (filed as exhibit 4.1 to the Company’s Form 8-K, filed on October 28, 1998 (File No. 001-13374) and incorporated herein by reference). | |
4.2 | Form of 4.750% Note due 2033 issued on April 7, 2026 (filed as exhibit 4.2 and contained in exhibit 4.3 to the Company’s Form 8-K, filed on April 7, 2026 (File No. 001-13374) and incorporated herein by reference). | |
4.3 | Officers' Certificate dated April 7, 2026, pursuant to Sections 201, 301 and 303 of the Indenture dated as of October 28, 1998 between the Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee, establishing the terms of a new series of debt securities entitled “4.750% Notes due 2033” and including the forms of debt security (filed as Exhibit 4.3 to the Company's Form 8-K, filed on April 7, 2026 (File No. 001-13374) and incorporated herein by reference). | |
4.4 | Form of 3.625% Note due 2032 issued on July 7, 2026 (filed as exhibit 4.2 and contained in exhibit 4.3 to the Company’s Form 8- K, filed on July 7, 2026 (File No. 001-13374) and incorporated herein by reference). | |
4.5 | Officers' Certificate dated July 7, 2026 pursuant to Sections 201, 301 and 303 of the Indenture dated as of October 28, 1998 between the Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee, establishing the terms of a new series of debt securities entitled “3.625% Notes due 2032” and including the forms of debt security (filed as Exhibit 4.3 to the Company's Form 8-K, filed on July 7, 2026 (File No. 001-13374) and incorporated herein by reference). | |
Material Contracts | ||
10.1 | Fifth Amended and Restated Credit Agreement, dated as of July 10, 2026, by and among Realty Income Corporation, as US borrower, RI UK Finance Ltd, as UK borrower, and Realty Income Euro Finance B.V., as Netherlands borrower, the lenders party thereto, Wells Fargo Bank, National Association, as Administrative Agent, and the other parties named therein (filed as Exhibit 10.1 to the Company's Form 8-K, filed on July 13, 2026 (File No. 001-13374) and incorporated herein by reference). | |
Certifications | ||
31.1* | Certification of the Principal Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
31.2* | Certification of the Principal Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
32** | Section 1350 Certifications as furnished by the Principal Executive Officer and the Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
Interactive Data Files | ||
101.INS* | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |
101.SCH* | Inline XBRL Taxonomy Extension Schema Document. | |
101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |
101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document. | |
101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |
101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document. | |
104* | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | |
*Filed herewith. | ||
**Furnished herewith. | ||
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused
this report to be signed on its behalf by the undersigned, thereunto duly authorized.
REALTY INCOME CORPORATION | |
Date: August 5, 2026 | /s/ NEALE REDINGTON |
Neale Redington | |
Senior Vice President, Chief Accounting Officer | |
(Duly Authorized Officer and Principal Accounting Officer) |