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Realty Income

Realty IncomeOEarnings & Financial Report

NYSE · Real Estate · Retail REITs

Realty Income Corporation is a real estate investment trust that invests in free-standing, single-tenant commercial properties in the United States, the United Kingdom, and six other countries in Europe. These properties are subject to NNN Leases. The company is organized in Maryland with its headquarters in San Diego, California.

What changed in Realty Income's 10-K — 2024 vs 2025

Top changes in Realty Income's 2025 10-K

591 paragraphs added · 564 removed · 437 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

191 edited+69 added−56 removed100 unchanged
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 gain (loss), net' in our consolidated statements of income and comprehensive income.
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) gain, net' in our consolidated statements of income and comprehensive income.
When the lease does not provide for a fixed rate of return on a property under development or expansion, the initial weighted average cash lease yield is computed as follows: estimated cash net operating income (determined by the lease) for the first full year of each lease, divided by our projected total investment in the property, including land, construction and capitalized interest costs.
When the lease does not provide for a fixed rate of return on a property under development or expansion, the initial weighted average cash yield is computed as follows: estimated cash net operating income (determined by the lease) for the first full year of each lease, divided by our projected total investment in the property, including land, construction and capitalized interest costs.
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 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.
Bellagio Las Vegas Joint Venture Interests The joint venture we formed with Blackstone Real Estate Income Trust owns a 95.0% equity interest in the real estate of The Bellagio Las Vegas.
Bellagio Las Vegas Joint Venture Interests The joint venture we formed with Blackstone Real Estate Income Trust ("Blackstone") owns a 95.0% equity interest in the real estate of The Bellagio Las Vegas.
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 gain (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.
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) gain, 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.
All of these 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.
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.
Since it is possible that a client could default on the payment of contractual rent (defined as the monthly aggregate cash amount charged to clients, inclusive of monthly base rent receivables), we cannot provide assurance that the actual return on the funds invested will remain at the percentages listed above.
Since it is possible that a client could default on the payment of base rent (defined as the monthly aggregate cash amount charged to clients, inclusive of monthly base rent receivables), we cannot provide assurance that the actual return on the funds invested will remain at the percentages listed above.
Merger-related Transaction Costs In conjunction with the Merger, we incurred $86.7 million of merger-related transaction costs during the year ended December 31, 2024, primarily consisting of employee severance, post-combination share-based compensation, transfer taxes, and various professional fees directly attributable to the Merger. C.
Merger-related Transaction Costs In conjunction with the Merger, during the year ended December 31, 2024, we incurred $86.7 million of merger-related transaction costs primarily consisting of employee severance, post-combination share-based compensation, transfer taxes, and various professional fees directly attributable to the Merger.
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 potentially dilutive common shares outstanding during the reporting 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.
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. B.
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 number of performance shares that vest for each of the three years is based on the achievement of the following performance goals: Weighting for year granted Annual Performance Awards Metrics 2024 2023 2022 Total shareholder return (“TSR”) ranking relative to MSCI US REIT Index 50 % 55 % 55 % Dividend per share growth rate 25 % 20 % 20 % Net Debt-to-Pro Forma Adjusted EBITDA re Ratio 25 % 25 % 25 % The annual performance shares 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.
The number of performance shares that vest for each of the three years is based on the achievement of the following performance goals: Weighting for year granted Annual Performance Awards Metrics 2025 2024 2023 Total shareholder return (“TSR”) ranking relative to MSCI US REIT Index 50 % 50 % 55 % Dividend per share growth rate 25 % 25 % 20 % Net Debt-to-Pro Forma Adjusted EBITDA re Ratio 25 % 25 % 25 % The annual performance shares 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.
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, currency exchange swaps, and foreign currency forwards to manage foreign currency risk.
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.
Key assumptions that we utilize in this analysis include projected rental rates, estimated holding periods, capital expenditures and property sales capitalization rates. For further details, see note 12, Fair Value Measurements. Provisions for Impairment - Goodwill. Goodwill is not amortized, but is subject to impairment reviews annually, or more frequently if necessary.
Key assumptions that we utilize in this analysis include projected rental rates, estimated holding periods, capital expenditures and property sales capitalization rates. For further details, see note 13, Fair Value Measurements. Provisions for Impairment - Goodwill. Goodwill is not amortized, but is subject to impairment reviews annually, or more frequently if necessary.
(2) Other includes all other property types in our portfolio. No individual client’s revenue represented more than 10% of our total revenue for each of the years ended December 31, 2024, 2023, and 2022. Long-lived assets include items such as property, plant, equipment and right-of-use assets subject to operating and finance leases.
(2) Other includes all other property types in our portfolio. No individual client’s revenue represented more than 10% of our total revenue for each of the years ended December 31, 2025, 2024, and 2023. Long-lived assets include items such as property, plant, equipment and right-of-use assets subject to operating and finance leases.
The fair value of the consideration transferred on the date of the acquisition is as follows (in thousands, except share and per share data): Shares of Spirit common stock exchanged (1) 142,136,567 Exchange Ratio 0.762 Shares of Realty Income common stock issued 108,308,064 Opening price of Realty Income common stock on January 23, 2024 $ 55.80 Fair value of Realty Income common stock issued to the former holders of Spirit common stock $ 6,043,590 Shares of Realty Income Series A Preferred Stock issued in exchange for Spirit Series A Preferred Stock 6,900,000 Opening price of Realty Income Series A Preferred Stock on January 23, 2024 $ 24.26 Fair value of Realty Income Series A Preferred Stock issued to the former holders of Spirit Series A Preferred Stock $ 167,394 Cash paid for fractional shares $ 51 Less: Fair value of Spirit restricted stock and performance awards attributable to post-combination costs (2) $ (24,751) Consideration transferred $ 6,186,284 (1) Includes 142.1 million shares of Spirit common stock outstanding as of January 23, 2024, which were converted into Realty Income common stock at the Effective Time at an Exchange Ratio of 0.762 per share of Spirit common stock.
The fair value of the consideration transferred on the date of the acquisition is as follows (in thousands, except share and per share data): Shares of Spirit common stock exchanged (1) 142,136,567 Exchange Ratio 0.762 Shares of Realty Income common stock issued 108,308,064 Opening price of Realty Income common stock on January 23, 2024 $ 55.80 Fair value of Realty Income common stock issued to the former holders of Spirit common stock $ 6,043,590 Shares of Realty Income Series A Preferred Stock issued in exchange for Spirit Series A Preferred Stock (2) 6,900,000 Opening price of Realty Income Series A Preferred Stock on January 23, 2024 $ 24.26 Fair value of Realty Income Series A Preferred Stock issued to the former holders of Spirit Series A Preferred Stock $ 167,394 Cash paid for fractional shares $ 51 Less: Fair value of Spirit restricted stock and performance awards attributable to post-combination costs (3) $ (24,751) Consideration transferred $ 6,186,284 (1) Includes 142.1 million shares of Spirit common stock outstanding as of January 23, 2024, which were converted into Realty Income common stock at the effective time of the Merger (the “Effective Time”) at an Exchange Ratio of 0.762 per share of Spirit common stock.
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.
Categorization within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement. 79 Table of Contents • 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.
Derivatives Not Designated as Hedging Instruments We enter into foreign currency exchange swap agreements to reduce the effects of currency exchange rate fluctuations between the USD, our reporting currency, and GBP and EUR. These derivative contracts generally mature within one year and are not designated as hedge instruments for accounting purposes.
Derivatives Not Designated as Hedging Instruments We enter into foreign currency exchange swap agreements to reduce the effects of currency exchange rate fluctuations between the USD, our reporting currency, and GBP, EUR, and Polish Zloty. These derivative contracts generally mature within one year and are not designated as hedge instruments for accounting purposes.
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 three inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by ourselves and our counterparties.
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.
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 11, Noncontrolling Interests . Use of Estimates.
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 12, Noncontrolling Interests . Use of Estimates.
As of December 31, 2024, our investment balance includes preferred interests classified as equity securities without a readily determinable fair value, for which we elect to apply the measurement alternative and record the value of the investment at cost, less any applicable impairment. Goodwill.
As of December 31, 2025, our investment balance includes preferred interests classified as equity securities without a readily determinable fair value, for which we elect to apply the measurement alternative and record the value of the investment at cost, less any applicable impairment. Goodwill.
(“VEREIT”) in 2021 and unexchanged Spirit bonds, including borrowings under our revolving credit facility, 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.
(“VEREIT”) in 2021 and unexchanged 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.
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. 83 Table of Contents B.
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. 89 Table of Contents B.
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. 85 Table of Contents 20. Segment and Geographic Information A.
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. 91 Table of Contents 20. Segment and Geographic Information A.
We perform our annual goodwill impairment assessment as of June 30. During the years ended December 31, 2024, 2023, and 2022, there were no impairments of goodwill. Provisions for Impairment - Investment in Unconsolidated Entities.
We perform our annual goodwill impairment assessment as of June 30. During the years ended December 31, 2025, 2024, and 2023, there were no impairments of goodwill. Provisions for Impairment - Investment in Unconsolidated Entities.
The allowance for credit losses, which is recorded as a reduction to loans receivable and financing receivable within 'Other assets, net' on our consolidated balance sheets, is measured using a probability of default method based on our clients' respective credit ratings, our historical experience, and the expected value of the underlying collateral upon its repossession.
The allowance for credit losses, which is recorded as a reduction to loans receivable and financing receivable within 'Other assets, net' on our consolidated balance sheets, is using a probability of default method based on our clients respective credit ratings, our historical experience, and the expected value of the underlying collateral upon its repossession.
The investment is then reduced to its estimated fair value if conclusions indicate the impairment is other than temporary. Equity Offering Costs. Underwriting commissions and offering costs have been reflected as a reduction of additional paid-in-capital on our consolidated balance sheets. Derivative and Hedging Activities .
The investment is then reduced to its estimated fair value if conclusions indicate the impairment is other than temporary. Equity Offering Costs. Underwriting commissions and offering costs have been reflected as a reduction of additional paid-in-capital on our consolidated balance sheets. 64 Table of Contents Derivative and Hedging Activities .
The estimated fair values of our mortgage loan receivable, unsecured loan receivable, 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.
The estimated fair values of our mortgage loan receivable, unsecured and other loans, private senior secured loans receivable, 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.
The value of in-place leases, exclusive of the value of above-market and below-market 57 Table of Contents in-place leases, is amortized to depreciation and amortization expense over the remaining periods of the respective leases. If a lease is terminated prior to its stated expiration, all unamortized amounts relating to that lease are recorded to revenue or expense as appropriate.
The value of in-place leases, exclusive of the value of above-market and below-market in-place leases, is amortized to depreciation and amortization expense over the remaining periods of the respective leases. If a lease is terminated prior to its stated expiration, all unamortized amounts relating to that lease are recorded to revenue or expense as appropriate.
The unconsolidated entity had total debt outstanding of $3.0 billion as of December 31, 2024, all of which was non-recourse to us with limited customary exceptions.
The unconsolidated entity had total debt outstanding of $3.0 billion as of December 31, 2025, all of which was non-recourse to us with limited customary exceptions.
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 13, Derivative Instruments . C.
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 14, Derivative Instruments . C.
Segment Information Our business is characterized as 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. The Company's chief operating decision maker ("CODM") is its President, Chief Executive Officer.
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.
(2) Weighted average strike rate is calculated using the notional value as of December 31, 2024. (3) This column represents maturity dates for instruments outstanding as of December 31, 2024.
(2) Weighted average strike rate is calculated using the notional value as of December 31, 2025. (3) This column represents maturity dates for instruments outstanding as of December 31, 2025.
The allocation of tangible assets (which includes land and buildings/improvements) of an acquired property with an in-place lease is based upon fair value. Land is typically valued utilizing the sales comparison (or market) approach. Buildings and improvements are typically valued under the replacement cost approach.
The allocation of tangible assets (which includes land and buildings/improvements) of an acquired property with an in-place lease is based upon fair value. Land is typically valued utilizing the sales comparison (or market) approach. 62 Table of Contents Buildings and improvements are typically valued under the replacement cost approach.
During the years ended December 31, 2024 and 2023, we recognized interest income of $52.8 million and $13.0 million for 8.1% preferential cumulative distributions, included within 'Other' revenue in our consolidated statements of income and comprehensive income.
During the years ended December 31, 2025, 2024, and 2023, we recognized interest income of $52.7 million, $52.8 million, and $13.0 million, respectively, for 8.1% preferential cumulative distributions, included within 'Other' revenue in our consolidated statements of income and comprehensive income.
Our mortgages contain customary covenants, such as limiting our ability to further mortgage each applicable property or to discontinue insurance coverage without the prior consent of the lender. At December 31, 2024, we were in compliance with these covenants.
Our mortgages contain customary covenants, such as limiting our ability to further mortgage each applicable property or to discontinue insurance coverage without the prior consent of the lender. As of December 31, 2025, we were in compliance with these covenants.
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, term loans, line of credit payable and commercial paper borrowings, and other liabilities approximate their carrying value in the accompanying consolidated balance sheets, due to their short-term nature.
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.
Performance Shares During 2024, 2023, and 2022, we granted annual performance share awards, as well as dividend equivalent rights, to our executive officers.
Performance Shares During 2025, 2024, and 2023, we granted annual performance share awards, as well as dividend equivalent rights, to our executive officers.
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. 76 Table of Contents 13.
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. 82 Table of Contents 14.
Interest income on the financing receivable is recognized using the interest rate implicit in the leaseback and presented within 'Other' revenue in our consolidated statements of income and comprehensive income. Allowance for Credit Losses .
Interest income on the financing receivable is recognized using the interest rate implicit in the leaseback and presented within 'Other' revenue in our consolidated statements of income and comprehensive income. 61 Table of Contents Allowance for Credit Losses .
We have elected to be taxed as a real estate investment trust ("REIT"), under the Internal Revenue Code of 1986, as amended. 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.
We have elected to be taxed as a real estate investment trust ("REIT"), under the Code, as amended. 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.
Unaudited Pro Forma Financial Information The following unaudited pro forma information presents a summary of our combined results of operations for the years ended December 31, 2024 and 2023, respectively, as if the Merger had occurred on January 1, 2023 (in millions, except per share data).
Unaudited Pro Forma Financial Information The following unaudited pro forma information presents a summary of our combined results of operations for the year ended December 31, 2024, as if the Merger had occurred on January 1, 2023 (in millions, except per share data).
Investments in Existing Properties During the year ended December 31, 2024, we capitalized costs of $122.9 million on existing properties in our portfolio, consisting of $113.9 million for non-recurring building improvements, $8.6 million for re-leasing costs, and $0.4 million for recurring capital expenditures.
In comparison, during the year ended December 31, 2024, we capitalized costs of $122.9 million on existing properties in our portfolio, consisting of $113.9 million for building improvements, $8.6 million for re-leasing costs, and $0.4 million for recurring capital expenditures. C.
Merger, transaction, and other costs, net include (i) merger-related transaction costs, primarily consisting of employee severance, post-combination share-based compensation, transfer taxes, and various professional fees directly attributable to a merger, (ii) organization costs for potential strategic ventures and business lines, (iii) corporate facilities lease termination costs, and (iv) other costs that do not align with the ongoing operations of our business.
Merger, transaction, and other costs, net include (i) merger-related transaction costs, primarily consisting of employee severance, post-combination share-based compensation, transfer taxes, and various professional fees directly attributable to a merger, (ii) organization costs for potential strategic ventures and business lines, (iii) placement fees incurred in fundraising of the Fund, (iv) corporate facilities lease termination costs, and (v) other costs that do not align with the ongoing operations of our business.
At December 31, 2024, 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.
As of December 31, 2025, 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.
Additionally, amounts essential to the development of the property, such as pre- 58 Table of Contents construction, development, construction, interest and other costs incurred during the period of development are capitalized.
Additionally, amounts essential to the development of the property, such as pre-construction, development, construction, interest and other costs incurred during the period of development are capitalized.
However, at December 31, 2024 and 2023, 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.
However, as of December 31, 2025 and 2024, 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.
Years ended December 31, 2024 2023 Total revenues $ 5,319.1 $ 4,868.2 Net income $ 945.9 $ 893.2 Basic and diluted earnings per share $ 1.10 $ 1.12 Our consolidated results of operations for the year ended December 31, 2024 include $762.7 million of revenues and $103.1 million of net income, respectively, associated with the results of operations of Spirit from the closing of the Merger on January 23, 2024 to December 31, 2024. 3.
Year ended December 31, 2024 Total revenues $ 5,319.1 Net income $ 945.9 Basic and diluted earnings per share $ 1.10 Our consolidated results of operations for the year ended December 31, 2024 include $762.7 million of revenues and $103.1 million of net income, respectively, associated with the results of operations of Spirit from the closing of the Merger on January 23, 2024 to December 31, 2024. 3.
In connection with our merger with VEREIT in 2021, shares which remained available for issuance under the VEREIT, Inc. 2021 Equity Incentive Plan immediately prior to the closing of the merger (as adjusted by the Exchange Ratio) may be used for awards under the 2021 Plan and will not reduce the shares authorized for grant under the 2021 Plan, to the extent that awards using such shares (i) are permitted without stockholder approval under applicable stock exchange rules, (ii) are made only to VEREIT service providers or individuals who become Realty Income service providers following the date of the consummation of the merger, and (iii) are only granted under the 2021 Plan during the period commencing on the date of the consummation of the merger and ending on June 2, 2031.
The 2021 Plan provides for the award to our directors, employees, and consultants of up to 8.9 million shares. 88 Table of Contents In connection with our merger with VEREIT in 2021, shares which remained available for issuance under the VEREIT, Inc. 2021 Equity Incentive Plan immediately prior to the closing of the merger (as adjusted by the Exchange Ratio) may be used for awards under the 2021 Plan and will not reduce the shares authorized for grant under the 2021 Plan, to the extent that awards using such shares (i) are permitted without stockholder approval under applicable stock exchange rules, (ii) are made only to VEREIT service providers or individuals who become Realty Income service providers following the date of the consummation of the merger, and (iii) are only granted under the 2021 Plan during the period commencing on the date of the consummation of the merger and ending on June 2, 2031.
As of December 31, 2024, the remaining share-based compensation expense related to the restricted stock units totaled $1.4 million and is being recognized on a straight-line basis over the service period. The amount of share-based compensation for the restricted stock units is based on the fair value of our common stock at the grant date.
As of December 31, 2025, the remaining share-based compensation expense related to the restricted stock units totaled $2.8 million and is being recognized on a straight-line basis over the service period. The amount of share-based compensation for the restricted stock units is based on the fair value of our common stock at the grant date.
For further details, see note 2, Merger with Spirit Realty Capital, Inc. Deferred Financing Costs. Deferred financing costs represent commitment fees, legal fees and other costs associated with obtaining or originating financing.
For further details, see note 2, Merger with Spirit Realty Capital, Inc. 63 Table of Contents Deferred Financing Costs. Deferred financing costs represent commitment fees, legal fees and other costs associated with obtaining or originating financing.
General At December 31, 2024, our senior unsecured notes and bonds are USD-denominated, GBP-denominated, and EUR-denominated. Foreign-denominated notes are converted at the applicable exchange rate on the balance sheet date.
General As of December 31, 2025, our senior unsecured notes and bonds are USD-denominated, GBP-denominated, and EUR-denominated. Foreign-denominated notes are converted at the applicable exchange rate on the balance sheet date.
For each of the years ended December 31, 2024, 2023, and 2022, we granted 40,000 shares of restricted stock to the independent members of our Board of Directors in connection with our annual awards in May of each year.
For the years ended December 31, 2025, 2024, and 2023, we granted 29,056, 40,000, and 40,000 shares of restricted stock, respectively, to the independent members of our Board of Directors in connection with our annual awards in May of each year.
Changes in our allowance for credit losses are presented in 'Provisions for impairment' in our consolidated statements of income and comprehensive income. For further details, see note 6, Investments in Loans and Financing Receivables. 56 Table of Contents Merger, Transaction, and Other Costs, Net.
Changes in our allowance for credit losses are presented in 'Provisions for impairment' in our consolidated statements of income and comprehensive income. For further details, see note 7, Investments in Loans and Financing Receivables. Merger, Transaction, and Other Costs, Net.
The accompanying notes to consolidated financial statements are an integral part of these statements. 53 Table of Contents REALTY INCOME CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 1.
The accompanying notes to consolidated financial statements are an integral part of these statements. 58 Table of Contents REALTY INCOME CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2025 1.
In connection with shares granted in each respective year, 16,000, 20,000, and 20,000 shares vested immediately and 28,000, 20,000, and 20,000 shares vest in equal parts over a three-year service period.
In connection with shares granted in each respective year, 14,528, 16,000, and 20,000 shares vested immediately and 17,927, 28,000, and 20,000 shares vest in equal parts over a three-year service period.
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 December 31, 2024, the total principal amount of foreign currency debt obligations designated as net investment hedges was $59.9 million.
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 December 31, 2025, the total principal amount of foreign currency debt obligations designated as net investment hedges was $148.2 million.
The commercial paper borrowings generally carry a term of less than a year. We review our credit facility and commercial paper programs and may seek to extend, renew, or replace our credit facility and commercial paper programs, to the extent we deem appropriate. 8.
The commercial paper borrowings generally carry a term of less than a year. We regularly review our credit facilities and commercial paper programs and may seek to extend, renew, or replace our credit facilities and commercial paper programs, to the extent we deem appropriate. D.
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 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 intercompany receivables and third-party debt.
Interest incurred on all of the notes and bonds was $840.3 million, $598.6 million, and $431.3 million for the years ended December 31, 2024, 2023, and 2022, respectively. Our outstanding notes and bonds are unsecured; accordingly, we have not pledged any assets as collateral for these or any other obligations.
Interest incurred on the notes and bonds was $938.1 million, $840.3 million, and $598.6 million for the years ended December 31, 2025, 2024, and 2023, respectively. Our outstanding notes and bonds are unsecured; accordingly, we have not pledged any assets as collateral for these or any other obligations.
Rent based on a percentage of our clients' gross sales, or percentage rent, for the years ended December 31, 2024, 2023, and 2022 was $16.0 million, $14.8 million, and $14.9 million respectively.
Rent based on a percentage of our clients' gross sales, or percentage rent for the years ended December 31, 2025, 2024, and 2023 was $18.2 million, $16.0 million, and $14.8 million, respectively.
As of December 31, 2024, the remaining unamortized share-based compensation expense related to restricted stock totaled $19.7 million, which is being amortized on a straight-line basis over the service period of each applicable award.
As of December 31, 2025, the remaining unamortized share-based compensation expense related to restricted stock totaled $20.6 million, which is being amortized on a straight-line basis over the service period of each applicable award.
The following table disaggregates domestic and international total long-lived assets (in millions): As of December 31, 2024 2023 U.S. U.K. Other (1) Total U.S. U.K.
The following table disaggregates domestic and international total long-lived assets (in millions): December 31, 2025 December 31, 2024 U.S. U.K. Other (1) Total U.S. U.K.
The amounts amortized as a net decrease to rental revenue for capitalized above-market and below-market leases for the years ended December 31, 2024, 2023, and 2022 were $34.7 million, $61.5 million, and $55.6 million, respectively.
The amounts amortized as a net decrease to rental revenue for capitalized above-market and below-market leases for the years ended December 31, 2025, 2024, and 2023 were $19.0 million, $34.7 million, and $61.5 million, respectively.
Dividends In January 2025, we declared a dividend of $0.2640 per share to our common stockholders, which was paid in February 2025. In addition, in February 2025, we declared a dividend of $0.2680, which will be paid in March 2025. B.
Dividends In January 2026, we declared a dividend of $0.2700 per share to our common stockholders, which was paid in February 2026. In addition, in February 2026, we declared a dividend of $0.2700, which will be paid in March 2026. B .
In May 2024, we acquired a senior secured note, maturing in May 2030, with a principal amount of £300.0 million, equivalent to $375.6 million as of December 31, 2024. The interest-only note bears interest at a fixed rate of 8.125% and is callable at par beginning in May 2026.
In May 2024, we acquired a senior secured note, maturing in May 2030, with a principal amount of £300.0 million. The interest-only note bears interest at a fixed rate of 8.125% and is callable at par beginning in May 2026.
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.
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 amounts amortized to expense for all of our in-place leases, for the years ended December 31, 2024, 2023, and 2022 were $870.2 million, $651.1 million, and $634.9 million, respectively.
The amounts amortized to expense for all of our in-place leases for the years ended December 31, 2025, 2024, and 2023 were $885.7 million, $870.2 million, and $651.1 million, respectively.
In September 2024, we completed the acquisition of 42 properties by paying cash and by issuing 730,020 common partnership units in Realty Income, LP. At December 31, 2024, we are considered the primary beneficiary of Realty Income, L.P. and other VIEs. For further information, see note 1, Summary of Significant Accounting Policies. 12.
In September 2024, we completed the acquisition of 42 properties by paying cash and by issuing 730,020 common partnership units in Realty Income, LP. As of December 31, 2025, we are considered the primary beneficiary of the U.S. Private Fund Business, Realty Income, L.P. and other VIEs. For further information, see note 1, Summary of Significant Accounting Policies. 13.
Contractual net operating income used in the calculation of initial weighted average cash lease yield includes approximately $1.5 million received as settlement credits as reimbursement of free rent periods for the year ended December 31, 2024.
Contractual net operating income used in the calculation of initial weighted average cash yield includes approximately $6.5 million received as settlement credits as reimbursement of free rent period for the year ended December 31, 2025.
The following table outlines common stock issuances pursuant to our ATM programs (dollars in millions, shares in thousands): Years ended December 31, 2024 2023 2022 Shares of common stock issued under the ATM program (1) 30,169 91,699 68,608 Gross proceeds $ 1,760.1 $ 5,483.2 $ 4,599.4 Sales agents' commissions and other offering expenses (17.3) (43.7) (43.4) Net proceeds $ 1,742.8 $ 5,439.5 $ 4,556.0 (1) During the year ended December 31, 2024, 25.8 million shares were sold and 30.2 million shares were settled pursuant to forward sale confirmations.
The following table outlines common stock issuances pursuant to our ATM programs (dollars in millions, shares in thousands): Years ended December 31, 2025 2024 2023 Shares of common stock issued under the ATM program (1) 41,971 30,169 91,699 Gross proceeds $ 2,398.3 $ 1,760.1 $ 5,483.2 Sales agents' commissions and other offering expenses (34.2) (17.3) (43.7) Net proceeds $ 2,364.1 $ 1,742.8 $ 5,439.5 (1) During the year ended December 31, 2025, 52.8 million shares were sold, and 42.0 million shares were settled pursuant to forward sale confirmations.
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.
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.
The weighted average interest rate on outstanding borrowings under our commercial paper programs was 4.6% and 4.8% for the years ended December 31, 2024 and 2023, respectively. We use our $4.25 billion revolving credit facility as a liquidity backstop for the repayment of the notes issued under the commercial paper programs.
The weighted average interest rate on outstanding borrowings under our commercial paper programs was 2.3% and 4.6% for the years ended December 31, 2025 and 2024, respectively. We use our revolving credit facilities as a liquidity backstop for the repayment of the notes issued under the commercial paper programs.
Deferred financing costs were $2.2 million at December 31, 2024 and are included net of the term loans' principal balance, as compared to $0.1 million related to our 2023 term loans at December 31, 2023 on our consolidated balance sheets. These costs are being amortized over the remaining term of the term loans.
Deferred financing costs were $9.4 million as of December 31, 2025 and are included net of the term loans' principal balance, as compared to $2.2 million as of December 31, 2024 on our consolidated balance sheets. These costs are being amortized over the remaining term of the term loans.
At-the-Market ("ATM") Program Under our current ATM program, which we entered into in August 2023, we may offer and sell up to 120.0 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.
At-the-Market ("ATM") Program In November 2025, 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.
As of December 31, 2024, the remaining share-based compensation expense related to the performance shares totaled $19.6 million and is being recognized on a tranche-by-tranche basis over the service period. 84 Table of Contents 18.
As of December 31, 2025, the remaining share-based compensation expense related to the performance shares totaled $21.9 million and is being recognized on a tranche-by-tranche basis over the service period. 90 Table of Contents 18.
The following table summarizes our mortgages payable as of December 31, 2024 and December 31, 2023 (dollars in millions): As Of Number of Properties (1) Weighted Average Stated Interest Rate Weighted Average Effective Interest Rate Weighted Average Remaining Years Until Maturity Remaining Principal Balance Unamortized Discount and Deferred Financing Costs Balance, net Mortgage Payable Balance December 31, 2024 17 4.0 % 4.5 % 1.4 $ 81.3 $ (0.5) $ 80.8 December 31, 2023 131 4.8 % 3.3 % 0.4 $ 822.4 $ (0.8) $ 821.6 (1) At December 31, 2024, there were 11 mortgages on 17 properties and at December 31, 2023, there were 16 mortgages on 131 properties.
The following table summarizes our mortgages payable as of December 31, 2025 and 2024 (dollars in millions): As Of Number of Properties (1) Weighted Average Stated Interest Rate Weighted Average Effective Interest Rate Weighted Average Remaining Years Until Maturity Remaining Principal Balance Unamortized Discount and Deferred Financing Costs Balance, net Mortgages Payable Balance December 31, 2025 14 4.9 % 5.9 % 1.8 $ 37.9 $ (0.1) $ 37.8 December 31, 2024 17 4.0 % 4.5 % 1.4 $ 81.3 $ (0.5) $ 80.8 (1) As of December 31, 2025, there were eight mortgages on 14 properties and as of December 31, 2024, there were 11 mortgages on 17 properties.
As of December 31, 2024, we had 55.5 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.
As of December 31, 2025, we had 141.1 million shares remaining for future issuance under our new ATM program. We anticipate maintaining the availability of our ATM program in the future, including the replenishment of authorized shares issuable thereunder.
These issuances with redemption provisions that permit the issuer to settle in either cash or common stock, at the option of the issuer, were evaluated to determine whether temporary or permanent equity classification on the balance sheet was appropriate.
These issuances with redemption provisions that permit the issuer to settle in either cash or common stock, at the option of the issuer, were evaluated to determine whether temporary or permanent equity classification on the balance sheet was appropriate. We determined that the units meet the requirements to qualify for presentation as permanent equity.
The following table outlines common stock issuances pursuant to our DRSPP program (dollars in millions, shares in thousands): Years ended December 31, 2024 2023 2022 Shares of common stock issued under the DRSPP program 212 198 176 Gross proceeds $ 11.8 $ 11.5 $ 11.7 16.
The following table outlines common stock issuances pursuant to our DRSPP program (dollars in millions, shares in thousands): Years ended December 31, 2025 2024 2023 Shares of common stock issued under the DRSPP program 211 212 198 Gross proceeds $ 12.0 $ 11.8 $ 11.5 17.
Thirty-six properties were classified as held for sale at December 31, 2024. If circumstances arise that we previously considered unlikely and, as a result, we decide not to sell a property previously classified as held for sale, we will reclassify the property as held for investment.
Sixty-four properties were classified as held for sale as of December 31, 2025. If circumstances arise that we previously considered unlikely and, as a result, we decide not to sell a property previously classified as held for sale, we will reclassify the property as held for investment.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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In addition, we are subject to a 4% nondeductible excise tax to the extent that we fail to distribute during any calendar year at least the sum of 85% of our ordinary income for that calendar year, 95% of our capital gain net income for the calendar year, and any amount of that income that was not distributed in prior years.
In addition, we are subject to a 4% nondeductible excise tax to the extent that we fail to distribute during any calendar year at least the sum of 85% of our ordinary income for that calendar year, 95% of our capital gain net income for that calendar year and any amount of that income that was not distributed in prior years.
We cannot provide any assurances that we will be successful in consummating future mergers and acquisitions or acquisitions on favorable terms or that we will realize expected cash yields, integration results, operating efficiencies, cost savings, revenue enhancements, synergies, or other benefits.
We cannot provide any assurances that we will be successful in consummating future mergers and acquisitions on favorable terms or that we will realize expected cash yields, integration results, operating efficiencies, cost savings, revenue enhancements, synergies or other benefits.
Our portfolio includes properties leased to operators of convenience stores that sell petroleum-based fuels, to operators of oil change and tune-up facilities, and operators that use chemicals and other waste products.
Our portfolio includes properties leased to operators of convenience stores that sell petroleum-based fuels, operators of oil change and tune-up facilities and operators that use chemicals and other waste products.
These facilities and some other of our properties, use, or may have used in the past, underground lifts or storage tanks for the storage of petroleum-based or waste products, which could create a potential for the release of hazardous substances.
These facilities and some of our other properties use, or may have used in the past, underground lifts or storage tanks for the storage of petroleum-based or waste products, which could create a potential for the release of hazardous substances.
Our business is subject to risks associated with climate change. Our business is subject to risks associated with the effects of climate change, and a market shift to a lower carbon economy, and may be subject to further risks in the future.
Our business is subject to risks associated with the effects of climate change and a market shift to a lower carbon economy and may be subject to further risks in the future.
Natural disasters, terrorist attacks, other acts of violence or war, or other unexpected events may affect the value of our debt and equity securities, the markets in which we operate and our results of operations.
Natural disasters, terrorist attacks, acts of violence or war or other unexpected events may affect the value of our debt and equity securities, the markets in which we operate and our results of operations.
Disruptions in the financial markets could affect our ability to obtain financing on reasonable terms and have other adverse effects on us, the market price of our common stock, and may make it more difficult or costly for us to raise capital.
Disruptions in the financial markets could affect our ability to obtain financing on reasonable terms and have other adverse effects on us and the market price of our common stock and may make it more difficult or costly for us to raise capital.
A prolonged downturn in the equity or credit markets may cause us to refinance at higher rates, seek alternative sources of potentially less attractive financing, and may require us to adjust our business plan accordingly.
A prolonged downturn in the equity or credit markets may cause us to refinance at higher rates, cause us to seek alternative sources of potentially less attractive financing and require us to adjust our business plan accordingly.
We expect that we will continue to use our current and any new revolving credit facilities we may enter into (in each case as the same may be expanded, amended or restated, if applicable, from time to time), as a liquidity backstop for the repayment of notes issued under our current or any new commercial paper programs that we may maintain from time to time.
We expect that we will continue to use our current and any new revolving credit facilities we may enter into (in each case as the same may be expanded, amended or restated, if applicable, from time to time), as a liquidity backstop for the repayment of notes issued under our current or any new commercial paper programs.
Moreover, if a client’s leases are not terminated as the result of its bankruptcy, we may be required or elect to reduce the rent payable under those leases or provide other concessions, reducing amounts we receive under those leases. As a result, client bankruptcies may have a material adverse effect on our results of operations and financial condition.
If a client’s leases are not terminated as the result of its bankruptcy, we may be required or elect to reduce the rent payable under those leases or provide other concessions, reducing amounts we receive under those leases. As a result, client bankruptcies may have a material adverse effect on our results of operations and financial condition.
Often these estimates require the use of market data values and involve estimates of future performance or receivables collectability all of which can be difficult to accurately predict. Although management believes it has been prudent and used reasonable judgment in making these estimates, it is possible actual results may differ from these estimates.
Often these estimates require the use of market data values and involve estimates of future performance or receivables and collectability, all of which can be difficult to accurately predict. Although management believes it has been prudent and used reasonable judgment in making these estimates, it is possible that actual results may differ from these estimates.
Additionally, any such new development, speculative development, or expansion project may not operate at designed capacity or may cost more to operate than we expect. The inability to successfully complete development, speculative development, expansion or other value-added projects or to complete them on a timely basis could adversely affect our business and results of operations.
Additionally, any such new development, speculative development, or expansion project may not operate at designed capacity or may cost more to operate or construct than we expect. The inability to successfully complete development, speculative development, expansion or other value-added projects or to complete them on a timely basis could adversely affect our business and results of operations.
Effective internal controls can provide only reasonable assurance with respect to financial statement and disclosure accuracy and safeguarding of assets. Failures in our internal controls could result in adverse consequences in our financial reporting and operations, including delays, additional costs, impairment of our ability to access capital, adverse impacts to investor confidence, regulatory review, or litigation.
Effective internal controls can provide only reasonable assurance with respect to financial statement and disclosure accuracy and safeguarding of assets. Failures in our internal controls could result in adverse consequences in our financial reporting and operations, including delays, additional costs, impairment of our ability to access capital, adverse impacts to investor confidence, regulatory investigation and review and/or litigation.
Leases that are renewed and new leases for properties that are re-leased, or leases that we assume as part of portfolio acquisitions or strategic mergers and acquisitions can have terms that are less economically favorable than expiring lease terms or leases that we negotiate directly, may require us to incur significant costs such as renovations improvements, or lease transaction costs.
Leases that are renewed and new leases for properties that are re-leased, or leases that we assume as part of portfolio acquisitions or strategic mergers and acquisitions can have terms that are less economically favorable than expiring terms or leases that we negotiate directly, may require us to incur significant costs such as renovations, or lease transaction costs.
If we are unable to comply with laws and regulations on climate change or implement effective sustainability strategies, our reputation among our clients and investors may be damaged and we may incur fines and/or penalties. Tenants of net-leased properties are typically responsible for maintenance and other day-to-day management of the properties.
If we are unable to comply with laws and regulations on climate change or implement effective sustainability strategies, our reputation among our clients and investors may be damaged and we may incur fines and/or penalties. Clients of net-leased properties are typically responsible for maintenance and other day-to-day management of the properties.
If events like these were to occur, they could materially interrupt our business operations, cause consumer confidence and spending to decrease or result in increased volatility in the U.S. and worldwide financial markets and economy. They also could result in or prolong an economic recession in the U.S. or abroad.
If events like these were to occur, they could materially interrupt our operations, cause consumer confidence and spending to decrease or result in increased volatility in the U.S. and worldwide financial markets and economy. They also could result in or prolong an economic recession in the U.S. or abroad.
In addition, these factors may make it more difficult for us to buy or sell properties, may adversely affect the price we purchase or receive for properties, as we and prospective buyers may experience increased costs of financing or difficulties in obtaining financing.
These factors may make it more difficult for us to buy or sell properties and may adversely affect the price we purchase or receive for properties, as we and prospective buyers may experience increased costs of financing or difficulties in obtaining financing.
Our business operations may not generate the cash needed to make distributions on our capital stock or to service our indebtedness. Our ability to make distributions on our common stock and any outstanding preferred stock and payments on our indebtedness, and to fund planned acquisitions and capital expenditures will depend on our ability to generate cash in the future.
Our business operations may not generate the cash needed to make distributions on our capital stock or to service our indebtedness. Our ability to make distributions on our common stock and any outstanding preferred stock and payments on our indebtedness, and to fund acquisitions and capital expenditures will depend on our ability to generate cash in the future.
We are subject to risks and liabilities in connection with forming and attracting third-party investment in our anticipated fund business, investing in new or existing co-investment ventures or funds, and managing properties through our anticipated fund business or other co-investment ventures.
We are subject to risks and liabilities in connection with forming and attracting third-party investment in our fund business, investing in new or existing co-investment ventures or funds and managing properties through our fund business or other co-investment ventures.
Our inability to consummate one or more acquisitions on such terms, our failure to adequately underwrite and identify risks and obligations when acquiring properties, or our failure to realize the intended benefits from one or more acquisitions, could have a significant adverse effect on our business, liquidity, financial position and/or results of operations, including as a result of our incurrence of additional indebtedness and related interest expense and our assumption of unforeseen contingent liabilities in connection with completed acquisitions.
Our inability to consummate acquisitions on such terms, our failure to adequately underwrite and identify risks and obligations when acquiring properties or our failure to realize the intended benefits from acquisitions, could have a significant adverse effect on our business, liquidity, financial position and/or results of operations, including as a result of our incurrence of additional indebtedness and related interest expense and our assumption of unforeseen contingent liabilities in connection with completed acquisitions.
Furthermore, we have made and may continue to make investments that fall outside of our historical focus on acquiring freestanding, single-client, net-lease retail properties located in the U.S. As a result, we are exposed to a variety of new risks by expanding into new investments, co-investment ventures, development, industries, property types, revenue-generating activities and/or new jurisdictions outside the U.S.
Furthermore, we have made and may continue to make investments that fall outside of our historical focus on acquiring freestanding, single-tenant, net lease retail properties located in the U.S. As a result, we are exposed to a variety of new risks by expanding into new investments, co-investment ventures, development, industries, property types, revenue-generating activities and/or new jurisdictions outside the U.S.
In addition, the same factors that may impact the valuation of our existing portfolio, as otherwise discussed in this Annual Report on Form 10-K, may also impact the portfolios to be held by the funds or co-investment ventures and could result in other than temporary impairment of our investment and a reduction in fee revenues, if any.
In addition, the same factors that may impact the valuation of our existing portfolio, as otherwise discussed in this Annual Report on Form 10-K, may also impact the portfolios to be held by the Fund or co-investment ventures and could result in other than temporary impairment of our investment and a reduction in fee revenues, if any.
If we fail to satisfy the environmental, social, and governance expectations of investors, tenants and other stakeholders, our initiatives are not executed as planned, or we do not satisfy our goals, then our third-party ratings, reputation and financial results could be adversely affected.
If we fail to satisfy the environmental, social, and governance expectations of investors, clients and other stakeholders, our initiatives are not executed as planned, or we do not satisfy our goals, then our third-party ratings, reputation and financial results could be adversely affected.
Our acquisition of additional properties may have a significant effect on our business, liquidity, financial position and/or results of operations. Our future success will depend, in part, upon our ability to manage our mergers and acquisitions, acquisitions, and expansion opportunities under prevailing market conditions. We are regularly engaged in the process of identifying, analyzing, underwriting, and negotiating possible acquisition transactions.
Our acquisition of additional properties may have a significant effect on our business, liquidity, financial position and/or results of operations. Our future success will depend, in part, upon our ability to manage our mergers and acquisitions, and expansion opportunities under prevailing market conditions. We regularly engage in the process of identifying, analyzing, underwriting and negotiating possible transactions.
In addition, while we may enter into hedging and other derivatives instruments to mitigate our exposure to fluctuations in borrowing and currency rates, we may not realize the anticipated benefits from these arrangements or they may be insufficient to mitigate our exposure.
While we may enter into hedging and other derivatives instruments to mitigate our exposure to fluctuations in borrowing and currency rates, we may not realize the anticipated benefits from these arrangements or they may be insufficient to fully mitigate our exposure.
Those attacks and incidents may be due to intentional or unintentional acts by employees, contractors or third-parties, who seek to gain unauthorized access to our or our service providers’ systems to disrupt operations, corrupt data, or steal confidential information through malware, computer viruses, ransomware, social engineering (e.g., phishing attachments to e-mails) or other vectors.
Those cyberattacks and security incidents may be due to intentional or unintentional acts by employees, contractors or third parties, who seek to gain unauthorized access to our or our service providers’ systems to disrupt operations, corrupt data or steal confidential information through malware, computer viruses, ransomware, social engineering (e.g., phishing attachments to e-mails) or other vectors.
We could be subject to liability, including strict liability, by virtue of our ownership interest for environmental contamination. Further, laws and regulations governing environmental contamination change and we have been, and in the future may be, subject to additional liability by virtue of these changes.
We could be subject to liability, including strict liability, by virtue of our ownership interest, for environmental contamination. Laws and regulations governing environmental contamination change and we have been, and in the future may be, subject to liability by virtue of these changes.
For instance, while we have historically predominantly owned and leased commercial properties under long-term, net lease agreements, as we expand into new verticals, the composition of our lease portfolio may include a higher concentration of alternative lease structures, under which we may be primarily 12 Table of Contents responsible for other expenses and liabilities with respect to the property, including property taxes, insurance and maintenance costs.
While we have historically predominantly owned and leased commercial properties under long-term, net lease agreements, as we expand into new verticals, the composition of our lease portfolio may include a higher concentration of alternative lease structures, under which we may be primarily responsible for other expenses and liabilities with respect to the property, including property taxes, insurance and maintenance costs.
Our clients, joint venture partners, investors or other third parties with whom we do business may themselves become subject to cyberattacks or security incidents, over which we may have no control, and which could have an indirect adverse impact on them, us or our business relationship.
Our clients, joint venture partners, investors or other third parties with whom we do business may, themselves, become subject to cyberattacks or security incident which we may have no control, and which could have an indirect adverse impact on them, us or our business relationship.
We have made and may continue to make acquisitions of properties (including through the use of alternative lease and acquisition structures such as joint ventures, partnerships, fund and other structures) or engage in other revenue-generating businesses, that fall outside our historical focus on wholly-owned freestanding, single-client, net lease retail locations in the U.S.
We have made and may continue to make acquisitions of properties (including through the use of alternative lease and acquisition structures such as joint ventures, partnerships, funds and other structures) or engage in other revenue-generating businesses that fall outside our historical focus on wholly owned, freestanding, single-tenant, net lease retail locations in the U.S.
Similarly, we may be required to incur or maintain debt we would otherwise not incur so we can allocate the debt to the contributors to maintain their tax bases. In the event we take any action that causes taxable gain to be allocated to these contributors, we may be required to indemnify them under tax protection agreements.
Similarly, we may be required to incur or maintain debt we would otherwise not incur so we can allocate the debt to the contributors to maintain their tax bases. If we take any action that causes taxable gain to be allocated to these contributors, we may be required to indemnify them under tax protection agreements.
If a property manager or third party fails to meet its obligations or terminates its services, we may need to find a replacement; however, these services may be on less favorable terms and conditions, or we may not be able to find a suitable replacement in a timely manner or at all.
If such a third party fails to meet its obligations or terminates its services, we may need to find a replacement; however, these services may be on less favorable terms and conditions, or we may not be able to find a suitable replacement in a timely manner or at all.
Claims we have for unpaid past rent, if any, may not be paid in full, or at all. Client bankruptcies affecting a given property may also adversely impact our ability to quickly re-lease that property at favorable terms, or at all.
Claims for unpaid past rent, if any, may not be paid in full, or at all. Client bankruptcies affecting a property may also adversely impact our ability to quickly re-lease that property at favorable terms, or at all.
If we fail to qualify as a REIT, it could adversely impact us, and the amount of dividends we are able to pay would decrease, which could adversely affect the market price of our capital stock and could adversely affect the value of our debt securities.
Risks Related to Our REIT Structure If we fail to qualify as a REIT, it could adversely impact us, and the amount of dividends we are able to pay would decrease, which could adversely affect the market price of our capital stock and the value of our debt securities.
Were a tenant unable to continue to perform under a lease, because of the highly regulated nature of the industry, it may be difficult to re-lease gaming properties.
Were a client unable to continue to perform under a lease because of the highly regulated nature of the industry, it may be difficult to re-lease gaming properties.
If any such event of default under the applicable credit agreements (or under any other credit agreement or debt instrument with similar terms that we may in the future enter into or be subject to) were to occur, it would likely have a material adverse effect on the market price of our outstanding common stock and any outstanding preferred stock and on the market value of our debt securities which could limit the amount of dividends or other distributions payable to holders of our common stock and any outstanding preferred stock or the amount of interest and principal we are able to pay on our indebtedness, or prevent us from paying those dividends, other distributions, interest or principal altogether, and may adversely affect our ability to qualify, or prevent us from qualifying, as a REIT.
If such an event of default were to occur (including under any other credit agreement or debt instrument with similar terms that we may, in the future, enter into or be subject to), it would likely have a material adverse effect on the market price of our outstanding common stock and any outstanding preferred stock and on the market value of our debt securities which could limit 20 Table of Contents the amount of dividends or other distributions payable to holders of our common stock and any outstanding preferred stock or the amount of interest and principal we are able to pay on our indebtedness, or prevent us from paying those dividends, other distributions, interest or principal altogether, and may adversely affect our ability to qualify, or prevent us from qualifying, as a REIT.
Real estate property investments are illiquid. We may not be able to acquire or dispose of properties when desired or on favorable terms. Real estate investments are relatively illiquid.
Real estate investments are illiquid. We may not be able to acquire or dispose of properties when desired or on favorable terms. Real estate investments are illiquid.
No assurances can be given that we will recognize full value, at a price and at terms that are acceptable to us, for any property that we are required to sell or contribute for liquidity reasons. Our inability to respond rapidly to changes in the performance of our investments could adversely affect our financial condition and results of operations.
No assurances can be given that we will recognize full value, at a price and terms acceptable to us, for any property we sell or contribute. Our inability to respond rapidly to changes in the performance of our investments could adversely affect our financial condition and results of operations.
We, like all businesses, are subject to cyber-attacks and security incidents, which threaten the confidentiality, integrity, and availability of our systems and information resources. Cyber-attacks are malicious cyber activity and a security incident is a successful cyber-attack that has the potential to expose sensitive data, internal systems, or otherwise disrupt business operations.
We, like all businesses, are subject to cyberattacks and security incidents, which threaten the confidentiality, integrity and availability of our systems and information resources. Cyberattacks are malicious cyber activity and a security incident is a successful cyberattack that has the potential to expose sensitive data, internal systems or otherwise disrupt business operations.
The risk of a cybersecurity breach or operational disruption, particularly through a cyber incident, including by computer hackers, foreign governments and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased, particularly as remote working has become more common.
The risk of a cybersecurity breach or operational disruption, including by computer hackers, foreign governments and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks (including through the use of artificial intelligence) and intrusions from around the world have increased, particularly as remote working has become more common.
We can face such liability regardless of our knowledge of the contamination; the timing of the contamination; the cause of the contamination; or the party responsible for the contamination of the property. There may be environmental conditions associated with our properties of which we are unaware.
We can face such liability regardless of our knowledge of the contamination, the timing of the contamination, the cause of the contamination or the party responsible for the contamination of the property. 11 Table of Contents There may be environmental conditions associated with our properties of which we are unaware.
General Risk Factors The market value of our capital stock and debt securities could be substantially affected by various factors.
General Risk Factors The market value and trading volume of our capital stock and debt securities could be substantially affected by various factors.
Our international investments are subject to additional risks, including: • The laws, rules and regulations applicable in such jurisdictions outside of the U.S., including those related to property ownership and control by foreign entities; • Complying with a wide variety of foreign laws, including corruption, employment, data protection, energy usage, health, safety, environmental regulations which may require capital expenditures to maintain or bring our foreign properties into compliance with applicable regulations and/or may require disclosure of various environmental, social and governance matters, and the compliance risks and costs related thereto; • Fluctuations in exchange rates between foreign currencies and the U.S. dollar (including risks related to their impact on our results of operations, hedging and other derivative arrangements used to mitigate our exposure to fluctuations in foreign currency rates, translational reporting risks, and exchange controls); • As we may not have or have only a limited number of properties within a jurisdiction, our experience in that market and with local business may be limited, and our operating costs may be disproportionately higher until the number of properties within a jurisdiction grows; • We may face challenges with expanding into current or new jurisdictions, such as identifying and securing investment opportunities, hiring and retaining employees, extended time periods for acquiring or disposing of investments, which may increase the cost of funding an investment, and potentially experiencing different cultural and business practices related to employees, rent adjustments, ground leases, and property ownership requirements and limitations; • Challenges in establishing effective systems, infrastructure, controls and procedures to manage and regulate operations in different regions and to monitor and ensure compliance with applicable regulations, such as applicable laws related to corrupt practices, employment, licensing, construction, energy usage, climate change or environmental compliance; • Unexpected, new or other changes in regulatory requirements (including disclosure requirements), tax, tariffs, trade barriers and other laws within jurisdictions outside the U.S. or between the U.S. and such jurisdictions; • Potentially adverse tax consequences with respect to our properties and/or investment vehicles; • Initial limited investments within certain regions or countries may result in industry or client concentration risks; • The impact of regional or country-specific business cycles, inflation and economic instability, including deterioration in political relations with the U.S., instability in, or further withdrawals from, the European Union or other international trade alliances or agreements; and • Political instability, uncertainty over property rights, civil unrest, acts of war, drug trafficking, political activism or the continuation or escalation of terrorist or gang activities.
Our international investments and operations are subject to additional risks, including: • The laws, rules and regulations applicable in such jurisdictions outside of the U.S., including those related to property ownership, control by foreign entities and the enforcement of our rights and remedies which could be significant; • Complying with a wide variety of foreign laws, including anti-financial crime, employment, data protection, such as the General Data Protection Regulation, energy usage, health, safety, environmental regulations which may require capital expenditures to maintain or bring our foreign properties into compliance with applicable regulations and/or may require disclosure of various environmental, social and governance matters and the compliance risks and costs related thereto; • Fluctuations in exchange rates between foreign currencies and the USD (including risks related to their impact on our results of operations, hedging and other derivative arrangements used to mitigate our exposure to fluctuations in foreign currency rates, translational reporting risks and exchange controls); • As we may not have or have only a limited number of properties within a jurisdiction, our experience in that market and with local business may be limited, and our operating costs may be disproportionately higher; • We may face challenges with expanding into current or new jurisdictions, such as identifying and securing investment opportunities, hiring and retaining employees, extended time periods for acquiring or disposing of investments, which may increase the cost of funding an investment, and potentially experiencing different cultural and business practices related to employees, rent adjustments, ground leases and property ownership requirements and limitations; • Challenges in establishing effective systems, infrastructure, controls and procedures to manage and regulate operations in different regions and to monitor and ensure compliance with applicable regulations, such as applicable laws related to corrupt practices, employment, licensing, construction, energy usage, climate change or environmental compliance; • Unexpected, new or other changes in regulatory requirements (including disclosure requirements) within jurisdictions outside the U.S., trade disputes between the U.S. and other countries, the possibility of changes to some international trade agreements and other government regulatory actions, including the imposition of tariffs, trade barriers or other protectionist actions; • Potentially adverse tax consequences with respect to our properties and/or investment vehicles; • Initial limited investments within certain regions or countries may result in industry or client concentration risks; • The impact of regional or country-specific business cycles, inflation and economic instability, including deterioration in political relations with the U.S., instability in, or further withdrawals from, the European Union or other international trade alliances or agreements; and • Political instability, uncertainty over property rights, civil unrest, acts of war, drug trafficking, political activism or the continuation or escalation of terrorist or gang activities.
In addition, we have historically engaged in, and may again in the future engage in strategic acquisitions of operating businesses, in which case we would be subject to risks related to our ability to successfully underwrite such target's businesses effectively and to combine such target's operations with ours in a manner that permits the combined company to achieve operating efficiencies (including with the integration of information technology systems), cost savings and efficiencies, revenues, synergies or other benefits either in the time frame anticipated or at all.
We have historically engaged in, and may again in the future engage in strategic acquisitions of operating businesses, in which case we would be subject to risks related to our ability to successfully underwrite such target's businesses effectively and to combine such target's operations with ours in a manner that permits the combined company to achieve operating efficiencies, cost savings, revenues, synergies or other benefits either in the time frame anticipated or at all.
The primary risks that could directly result from the occurrence of a cyber attack or security incident include operational interruption, damage to our relationship with our clients, reputational damage, and private data exposure.
The primary risks that could directly result from the occurrence of a cyberattack or security incident include operational interruption, damage to our relationship with our clients, reputational damage and private data exposure.
Item 1A: Risk Factors This “Risk Factors” section contains references to our “capital stock” and to our “stockholders.” Unless expressly stated otherwise, the references to our “capital stock” represent our common stock and any class or series of preferred stock that may be outstanding from time to time, while the references to our “stockholders” represent holders of our common stock and any class or series of preferred stock that may be outstanding from time to time.
This “Risk Factors” section contains references to our “capital stock” and to our “stockholders.” Unless expressly stated otherwise, the references to our “capital stock” represent our common stock and any class or series of preferred stock that may be outstanding from time to time, while the references to our “stockholders” represent holders of our common stock and any class or series of preferred stock that may be outstanding from time to time.
Additionally, we have obtained blanket liability, flood and earthquake (subject to substantial deductibles) and property damage insurance policies to protect us and our properties against loss should the indemnities and insurance policies provided by the clients fail to restore the properties to their condition prior to a loss.
Additionally, we have 15 Table of Contents obtained blanket liability, flood and earthquake, and property damage insurance policies (subject to substantial deductibles) to protect us and our properties against loss should the indemnities and insurance policies provided by the clients fail to restore the properties to their condition prior to a loss.
Increased scrutiny and changing expectations from regulators and other stakeholders regarding sustainability practices and reporting could impact our business practices, cause us to incur additional costs and expose us to new risks.
Changing and increasing expectations from regulators and other stakeholders regarding sustainability practices and reporting could impact our business practices, cause us to incur additional costs and expose us to new risks.
We invest and may continue to invest in new or different assets or enter into new transaction structures that may or may not be closely related to our current business and which could require new or additional processes, controls, systems and personnel.
We invest and may continue to invest in new or different assets or enter into new transaction structures that may or may not be closely related to our current business and which could require new or additional processes, controls, systems and personnel, thereby increasing investment expense.
Also, the law relating to the tax treatment of other entities, or an investment in other entities, could change, making an investment in such other entities more attractive relative to an investment in a REIT.
Also, 17 Table of Contents the law relating to the tax treatment of other entities, or an investment in other entities, could change, making an investment in such other entities more attractive relative to an investment in a REIT.
While we may enter into hedging and other derivatives instruments to mitigate our exposure to fluctuations in foreign 14 Table of Contents exchange rates, we may not realize the anticipated benefits from these arrangements or these arrangements may be insufficient to mitigate our exposure.
While we may enter into hedging and other derivatives instruments to mitigate our exposure to fluctuations in foreign exchange rates, we may not realize the anticipated benefits from these arrangements, or these arrangements may be insufficient to mitigate our exposure.
We have and may continue to make investments and utilize transaction structures that are outside of our traditional business, including entering into new asset classes, such as casinos and vertical farms, and entering into (or expanding our use of) new transaction structures, such as strategic co-investment ventures, joint ventures, funds, lending, and increased exploration of sale-leaseback transactions.
We have and may continue to make investments and utilize transaction structures that are outside of our traditional business, including entering into new asset classes, such as casinos, data centers, power centers, retail parks, loans, and vertical farms, and entering into (or expanding our use of) new transaction structures, such as strategic co-investment ventures, joint ventures, funds, lending, and increased exploration of sale-leaseback transactions.
This is particularly so because attack methodologies change frequently or are not recognized until launched, and we also may be unable to investigate or remediate incidents 19 Table of Contents because attackers are increasingly using techniques and tools designed to circumvent controls, to avoid detection, and to remove or obfuscate forensic evidence.
This is particularly so because cyberattack methodologies change frequently or are not recognized until launched, and we also may be unable to investigate or remediate incidents because attackers are increasingly using techniques and tools designed to circumvent controls, to avoid detection and to remove or obfuscate forensic evidence.
In such event, we may be subject to foreign exchange rate volatility. While we may enter into hedging and other derivatives instruments to mitigate our exposure to fluctuations in foreign exchange rates, we may not realize the anticipated benefits from these arrangements or these arrangements may be insufficient to mitigate our exposure.
While we may enter into hedging and other derivatives instruments to mitigate our exposure to fluctuations in foreign exchange rates, we may not realize the anticipated benefits from these arrangements or these arrangements may be insufficient to mitigate our exposure.
Our information technology (“IT”) networks and related systems are essential to the operation of our business and our ability to perform day-to-day operations and, in some cases, may be critical to the operations of certain of our clients.
Our IT networks and related systems are essential to the operation of our business and our ability to perform day-to-day operations and, in some cases, may be critical to the operations of certain of our clients.
Downturns in any of the industries in which our clients operate could adversely affect our clients, which in turn could also have a material adverse effect on our financial position, results of operations and our ability to pay the principal of and interest on our debt securities and other indebtedness and to make distributions on our common stock and any outstanding preferred stock.
Downturns in any of the industries in which our clients operate as well as high interest rates, inflation and the imposition of tariffs, could adversely affect our clients, which in turn could also have a material adverse effect on our financial position, results of operations and our ability to pay the principal of and interest on our debt securities and other indebtedness and to make distributions on our common stock and any outstanding preferred stock.
We are subject to additional risks from our international investments and debt. We have acquired and may continue to make investments outside of the U.S. These investments may expose us to a variety of risks that are different from and in addition to those commonly found in the U.S.
We have acquired and may continue to make investments outside of the U.S. These investments may expose us to a variety of risks that are different from and in addition to those commonly found in the U.S.
We are organized and have operated, and we intend to continue to operate, so as to qualify as a REIT under Sections 856 through 860 of the Code.
We are organized and have operated, and we intend to continue to operate, so as to qualify as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the "Code").
At December 31, 2024, we also had a total of $22.9 billion of outstanding unsecured senior debt securities (excluding unamortized net original issuance premiums, deferred financing costs and basis adjustments on interest rate swaps designated as fair value hedges), including approximately $5.0 billion denominated in Sterling (of which $1.1 billion is related to our privately placed Sterling notes), $1.1 billion denominated in Euro thereunder, and approximately $81.3 million of outstanding mortgage debt (excluding unamortized net discounts and deferred financing costs).
As of December 31, 2025, we also had a total of $25.3 billion of outstanding unsecured senior debt securities (excluding unamortized net original issuance premiums, deferred financing costs and basis adjustments on interest rate swaps designated as fair value hedges), including approximately $5.4 billion denominated in Sterling (of which $1.2 billion is related to our privately placed Sterling notes), $2.8 billion denominated in Euro thereunder, and approximately $37.9 million of outstanding mortgage debt (excluding unamortized net discounts and deferred financing costs).
As a result of these and other factors, investors who purchase our capital stock and debt securities may experience a decrease, which could be substantial and rapid, in the market value of our capital stock and debt securities, including decreases unrelated to our operating performance or prospects. 18 Table of Contents Litigation risks could affect our business.
As a result of these and other factors, investors who purchase our capital stock and debt securities may experience a decrease in the market value of our capital stock and debt securities, which could be substantial and rapid, including decreases unrelated to our operating performance or prospects.
However, there can be no assurance that we will be able to form our anticipated fund business and co-investment ventures on the timeline expected, or at all, attract third-party investment or that additional investments in our anticipated fund business or other co-investment ventures to develop or acquire properties in the future will be successful, or that such anticipated fund business or other co-investment ventures will improve our consolidated financial position or results of operations.
However, there can be no assurance that our efforts to grow the Fund or these other joint ventures will be successful, that we will be able to form further co-investment ventures on the timeline expected, or at all, that we will successfully attract third-party investments or that additional investments in the Fund or other co-investment ventures to develop or acquire properties in the future will be successful, or that the Fund, the joint venture relationships or other such anticipated fund business or other co-investment ventures will improve our consolidated financial position or results of operations.
Future issuances of equity securities could dilute the interest of holders of our common stock. Our future growth will depend, in large part, upon our ability to raise additional capital. Raising capital through the issuance of equity securities, including securities exchangeable into our equity securities or convertible debt securities, can dilute the interests of holders of our common stock.
Our future growth will depend upon our ability to raise additional capital. Raising capital through the issuance of equity securities, including securities exchangeable into our equity securities or convertible debt securities, can dilute the interests of holders of our common stock.
Our financial results may be negatively impacted by any such attacks and incidents or any resulting negative media attention. Further, while we carry cyber liability insurance, such insurance may not be adequate to cover all losses related to such events.
Our financial results may be negatively impacted by any such cyberattacks and security incidents or any resulting negative media attention. Although we carry cyber liability insurance, such insurance may not be adequate to cover all losses related to such events.
Negative market conditions or adverse events affecting our existing or potential clients, or the industries in which they operate, could have an adverse impact on our ability to attract new clients, re-lease space, collect rent or renew leases, which could adversely affect our cash flow from operations and inhibit growth.
Negative market conditions, global economic and political uncertainties or adverse events affecting our existing or potential clients or the industries in which they operate, could have an adverse impact on our ability to attract new clients, re-lease space, collect rent or renew leases, which could adversely affect our cash flow from operations, our ability to maintain or increase our current dividend levels and inhibit growth.
These changes could also expose us to significant fines, government investigations, litigation and reputational harm, all of which could be costly, result in distractions for management, adversely impact our operational results, and could alter our ability to execute on our strategic plans. All of these impacts could materially adversely affect our business, reputation, results of operations and financial condition.
These changes could also expose us to significant fines, government investigations, litigation and reputation harm, all of which could be costly, result in distractions for management, adversely impact our operational results and could alter our ability to execute on our strategic plans.
Increased inflation or anticipated inflationary periods, such as the period in which we are currently in, could have a more pronounced negative impact on any variable rate debt we incur in the future and on our results of operations.
Inflation (including prolonged inflationary periods) may adversely affect our results of operations, financial condition and liquidity. Increased inflation or anticipated inflationary periods, such as the period in which we are currently in, could have a more pronounced negative impact on any variable rate debt we incur in the future and on our results of operations.
If that happens, our claim against the bankrupt client for unpaid future rent would be subject to statutory limitations that most likely would result in payments that would be substantially less than the remaining rent we are owed under the leases (it is also possible that we may not receive any unpaid 7 Table of Contents future rent under terminated leases) or we may elect not to pursue claims against a client for terminated leases.
If that happens, our claim against the bankrupt client for unpaid future rent would be subject to statutory limitations that most likely would result in payments substantially less than the remaining rent we are owed under the leases or we may elect not to pursue claims against a client for terminated leases.
The expiration of these incentive programs or the inability of potential clients or users to be eligible for or to obtain governmental approval of the incentives, or the inability to remain compliant with such programs, may have an adverse effect on the value of our investment, cash flow and net income, and may result in impairment charges.
The expiration of these incentive programs or the inability of potential clients or users to be eligible for or to obtain governmental approval of the incentives, or the inability to remain compliant with such programs, may have an adverse effect on the value of our investment, cash flow and net income, and may result in impairment charges. 16 Table of Contents Our business is subject to risks associated with climate change.
Our anticipated fund business or other co-investment ventures are expected to involve certain additional risks that we do not currently otherwise face, including the risks inherent in owning, operating and managing one or more funds, risks related to our ability to negotiate third-party investments, such as valuation, operational limitations, 13 Table of Contents management fee structures and other incentive fees, on terms that are beneficial to us, and the inherent conflicts that may exist in allocating investment opportunities effectively between us and the fund or such other co-investment ventures.
The Fund or other co-investment ventures are expected to involve additional risks, including compliance risks and additional regulatory risks, that we would not otherwise face, including the risks inherent in owning, operating and managing one or more funds and co-investment ventures, risks related to our ability to negotiate third-party investments, such as valuation, operational limitations, management fee structures and other incentive fees, on terms that are beneficial to us, and the inherent conflicts that may exist in allocating investment opportunities effectively between us, the Fund, joint ventures and such other future co-investment ventures.
Certain of our other properties, including those leased for industrial purposes, may also involve operations or activities that could give rise to environmental liabilities or could have been built using asbestos or other building materials that require owners or operators to undertake special precautions including removal, abatement, or adequately train or inform those that come in contact with such materials.
Certain of our other properties, including those leased for industrial purposes, may also involve operations or activities that could give rise to environmental liabilities or could have been built using asbestos or other building materials that require owners or operators to undertake special precautions including removal, abatement, training or notices.
Cash flow from operations depends in part on our ability to lease space to our clients on economically favorable terms and to collect rent from our clients on a timely basis.
Cash flow from operations and our ability to maintain or increase our current dividend levels depends in part on our ability to lease space to our clients on economically favorable terms and to collect rent from our clients on a timely basis.
Our fund business may be subject to some or all of the risks more fully described in "We may engage in development, speculative development, or expansion projects or invest in new asset classes, which would subject us to additional risks that could negatively impact our operations." Such risks may adversely impact our anticipated fund business's or our other co-investment ventures' financial position or results of operation.
Our fund business and co-investment ventures may be subject to some, or all of the risks more fully described in "We may engage in development, speculative development, or expansion projects or invest in new asset classes, which would subject us to additional risks that could negatively impact our operations." Such risks may adversely impact the Fund or our other co-investment ventures' financial position or results of operation. 12 Table of Contents We are subject to additional risks from our international investments and debt.
Although we make efforts to maintain the security and integrity of these types of IT networks and related systems, and we have implemented various measures to manage the risk of a security breach or disruption (such as the implementation of systems and/or vendors that provide constant monitoring of our IT networks and related systems for cyber-attacks and incidents); however, there can be no assurance that our security efforts and measures will be effective or that attempted security breaches or disruptions would not be successful or damaging.
Although we make efforts to maintain the security and integrity of these types of IT networks and related systems, and we have implemented various measures to manage the risk of a security breach or disruption, there can be no assurance that our security efforts and measures will be effective or that attempted security breaches or disruptions would not be successful or damaging.
Our charter contains restrictions on ownership and transfer of our common stock intended to, among other purposes, assist us in maintaining our status as a REIT for U.S. federal and/or state income tax purposes.
These actions may reduce our income and amounts available for distribution to our stockholders. Our charter contains restrictions upon ownership of our common stock. Our charter contains restrictions on ownership and transfer of our common stock intended to, among other purposes, assist us in maintaining our status as a REIT for U.S. federal and/or state income tax purposes.
We have incurred and may continue to incur indebtedness that is denominated in local currencies to fund our international investments and operations. However, it is possible that such indebtedness may be insufficient or may 10 Table of Contents be on unacceptable terms requiring us to use non-local currency indebtedness.
We have incurred and may continue to incur indebtedness that is denominated in local currencies to fund our international investments and operations. However, it is possible that such indebtedness may be insufficient or may be on unacceptable terms requiring us to use non-local currency indebtedness. In such event, we may be subject to foreign exchange rate volatility.
We also engage external property managers and other third parties, who assist with managing our international properties.
We also engage external asset, fund and property managers, directors, trustees, contractors, and other third parties who assist with managing our international properties.
These restrictions could have anti-takeover effects and could reduce the possibility that a third party will attempt to acquire control of us, which could adversely affect the market price of our common stock.
These restrictions could have anti-takeover effects and could reduce the possibility that a third party will attempt to acquire control of us, which could adversely affect the market price of our common stock. Risks Related to Our Clients Our success is dependent on the financial stability of our clients.
We could be adversely affected by various facts and events over which we have limited or no control, such as: • Lack of demand in areas where our properties are located; • Inability to retain existing clients and attract new clients; • Oversupply of space and changes in market rental rates; • Declines in our clients’ creditworthiness and ability to pay rent, which may be affected by their operations (including as a result from changes in consumer behaviors or preferences impacting our clients' operations), economic downturns and competition within their industries from other operators; • Defaults by and bankruptcies of clients, failure of clients to pay rent on a timely basis, or failure of our clients to comply with their contractual obligations; • Changes in laws, rules or regulations that negatively impact us, our clients or our properties; • General economic, political and financial market conditions; • Epidemics, pandemics or outbreaks of illness, disease or virus that affect countries or regions in which our clients and their parent companies operate or in which our properties or corporate headquarters are located; • Changes in consumer behaviors (e.g., decrease in discretionary consumer spending), preferences or demographics impacting our clients' operations; • Supply chain disruptions; • Economic or physical decline of the areas where the properties are located; and • Deterioration of physical condition of our properties.
We may be adversely affected by various facts and events over which we have limited or no control, such as: • Lack of demand in areas where our properties are located; • Inability to retain existing clients and attract new clients; • Oversupply of space and changes in market rental rates; • Declines in our clients’ creditworthiness and ability to pay rent, which may be affected by their operations (including as a result from changes in consumer behaviors or preferences impacting our clients' operations), economic downturns and competition within their industries from other operators; • Defaults by and bankruptcies of clients, failure of clients to pay rent on a timely basis, or failure of our clients to comply with their contractual obligations; • Changes in laws, rules or regulations that negatively impact us, our clients or our properties; • Global economic (e.g., inflation, fluctuations in interest rates or foreign exchange rates, economic downturns or recessions), political and financial market conditions including as a result of geopolitical tensions and instability; 18 Table of Contents • Trade disputes, supply chain disruptions, the possibility of changes to international trade agreements, tariffs and other regulatory actions; • Epidemics or pandemics that affect regions in which our clients operate in; • Changes in consumer behaviors (e.g., decrease in discretionary consumer spending), preferences or demographics impacting our clients' operations; • Economic or physical decline of the areas where the properties are located; and • Deterioration of physical condition of our properties.
While the majority of our leases are under a net lease structure, some or all of such property taxes may not be collectible from our clients, and, as we continue to expand into new verticals, the concentration of our leases under which we are primarily responsible for property taxes may increase, enhancing our exposure to such risks. 15 Table of Contents We may face extensive regulations from gaming and other regulatory authorities regarding current and future gaming properties.
While the majority of our leases are under a net lease structure, some or all of such property taxes may not be collectible from our clients, and, as we continue to expand into new verticals, the concentration of our leases under which we are primarily responsible for property taxes may increase, enhancing our exposure to such risks.
These disruptions in the financial markets also may have a material adverse effect on the market value of our common stock and debt securities, the income we receive from our properties and the lease rates we can charge for our properties, as well as other unknown adverse effects on us or the economy in general. 20 Table of Contents Inflation (including prolonged inflationary periods) may adversely affect our results of operations, financial condition and liquidity.
These disruptions in the financial markets may also have a material adverse effect on the market value of our common stock and debt securities, the income we receive from our properties and the lease rates we can charge for our properties, as well as other unknown adverse effects on us or the economy in general.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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See “Risk Factors – We rely on information technology in our operations, and any material failure, inadequacy, interruption or security failure of that technology could harm our business.” Cybersecurity Governance The Board of Directors considers cybersecurity risk as part of its risk oversight function, and the Audit Committee of our Board oversees Realty Income's cybersecurity and other information technology risk exposures and the steps taken by management to monitor and control such exposures.
See “Risk Factors – We rely on information technology in our operations, and any material failure, inadequacy, interruption or security failure of that technology could harm our business.” Cybersecurity Governance The Board of Directors considers cybersecurity risk as part of its risk oversight function, and the Audit Committee of our Board of Directors oversees Realty Income's cybersecurity and other information technology risk exposures and the steps taken by management to monitor and control such exposures.
Our cybersecurity risk profile and cybersecurity program status are reported to the Audit Committee on a quarterly basis. In addition, management updates the Audit Committee, as necessary, regarding any material cybersecurity incidents, as well as any incidents with lesser impact potential.
Our cybersecurity risk profile and cybersecurity program status are reported to the Audit Committee on a quarterly basis. In addition, management updates the Audit Committee, as necessary, regarding any significant cybersecurity incidents, as well as any incidents with lesser impact potential.
The Audit Committee reports to the full Board regarding its activities, including those related to cybersecurity, and the full Board also receives briefings from management on our cybersecurity risk management program, as appropriate.
The Audit Committee reports to the full Board of Directors regarding its activities, including those related to cybersecurity, and the full Board of Directors also receives briefings from management on our cybersecurity risk management program, as appropriate.
Our management team supervises efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include briefings from internal security personnel; threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us; and alerts and reports produced by security tools deployed in the IT environment.
Our Senior Vice President of Information Technology works closely with our management team to keep them informed about and to monitor the Company’s efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include briefings from internal security personnel; threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us; and alerts and reports produced by security tools deployed in the IT environment.
Our cybersecurity program and designated incident response team are comprised of key employees, and third-party information security experts from leading cybersecurity incident response firms, who are responsible for efficiently and effectively responding to cybersecurity incidents.
Our cybersecurity program and designated incident response team are comprised of key employees, and third-party information security experts from leading cybersecurity incident response firms, who are responsible for efficiently and effectively responding to cybersecurity incidents. We have established comprehensive incident response and recovery plans and continue to evaluate the effectiveness of those plans.
We have established comprehensive incident response and recovery plans and continue to evaluate the effectiveness of those plans. 21 Table of Contents We have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected us, including our operations, business strategy, results of operations, or financial condition.
We have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected us, including our operations, business strategy, results of operations, or financial condition.
The program is integrated within our enterprise risk management system and addresses our IT networks and related systems that are essential to the operation of our business.
The program is integrated within our enterprise risk management system and addresses our IT networks and related systems that are essential to the operation of our business. We maintain controls and procedures, including third-party oversight procedures, and cybersecurity training for all employees on an annual basis.
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We maintain controls and procedures, including third-party oversight procedures, and cybersecurity training for all employees on an annual basis, which are designed to ensure prompt escalation of cybersecurity incidents so that decisions regarding public disclosure and reporting of such incidents can be made by management in a timely manner.
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Our Senior Vice President of Information Technology is primarily responsible for assessing and managing our material risks from cybersecurity threats, including our overall cybersecurity risk management program, and supervises both our internal cybersecurity personnel and our retained external cybersecurity consultants.
Removed
Our management team, including the Cybersecurity Risk Committee chaired by our Head of IT and comprised of executive leaders across the Company, provides oversight, direction and guidance related to the cybersecurity risk management decisions and is responsible for assessing and managing our material risks from cybersecurity threats.
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Our Senior Vice President of Information Technology has served in IT roles for the Company since 2007, and has led the department since 2020. He has over 20 years of experience implementing and operating cybersecurity technologies, policies, and procedures throughout various industries.
Removed
The team has primary responsibility for our overall cybersecurity risk management program and supervises both our internal cybersecurity personnel and our retained external cybersecurity consultants. Our management team has extensive experience implementing and operating cybersecurity technologies, policies, and procedures throughout various industries and includes a Certified Information Systems Security Professional with ISC2.
Removed
Item 2: Properties Information pertaining to our properties can be found under Item 1. Item 3: Legal Proceedings Information regarding legal proceedings is included in note 21 , Commitments and Contingencies, to the consolidated financial statements. Item 4: Mine Safety Disclosures None. PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Item 5: Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock is traded on the New York Stock Exchange (“NYSE”) under the ticker symbol “O.” Holders There were approximately 13,200 registered holders of record of our common stock as of January 30, 2025.
Item 5: Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock is traded on the NYSE under the ticker symbol “O.” Holders There were approximately 12,700 registered holders of record of our common stock as of January 30, 2026.
This figure does not reflect the beneficial ownership of shares of our common stock. 22 Table of Contents Repurchases of Equity Securities During the three months ended December 31, 2024, the following shares of stock 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 "2021 Plan"): Period Total Number of Shares Purchased Average Price Paid per Share October 1, 2024 — October 31, 2024 221 $ 62.95 November 1, 2024 — November 30, 2024 1,234 $ 56.96 December 1, 2024 — December 31, 2024 8,485 $ 53.50 Total 9,940 $ 54.14 Item 6: Reserved 23 Table of Contents
Company/Index Base Period 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 12/31/2025 Realty Income $ 100.00 $ 124.07 $ 114.95 $ 109.69 $ 107.37 $ 120.47 S&P 500 $ 100.00 $ 128.68 $ 105.36 $ 133.03 $ 166.28 $ 195.98 FTSE Nareit Equity REITs $ 100.00 $ 141.31 $ 106.18 $ 118.22 $ 124.03 $ 126.82 27 Table of Contents Repurchases of Equity Securities The following table presents the number and average price of shares purchased during the three months ended December 31, 2025: Period Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Program (2) Maximum Dollar Value of Shares that May be Repurchased Under the Program October 1, 2025 — October 31, 2025 802 $ 60.17 — $ 2,000,000,000 November 1, 2025 — November 30, 2025 1,100 $ 57.01 — $ 2,000,000,000 December 1, 2025 — December 31, 2025 266 $ 57.42 — $ 2,000,000,000 Total 2,168 $ 58.23 — (1) All 2,168 shares of common stock purchased during the three months ended December 31, 2025 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 "2021 Plan").
Added
This figure does not reflect the beneficial ownership of shares of our common stock.
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Stock Performance Graph The line graph below compares the cumulative total stockholder return of Realty Income’s common stock from December 31, 2020 to December 31, 2025 with the cumulative total returns of the S&P 500 Index and the Financial Times and Stock Exchange ("FTSE") Nareit Equity REITs Index.
Added
The graph illustrates the performance of a $100 investment in our common stock and in each index (with reinvestment of all dividends as required by the SEC) from December 31, 2020 until December 31, 2025. Historical stock price performance should not be relied upon as an indication of future stock price performance.
Added
The withholding of common stock by us could be deemed a purchase of such common stock. (2) In February 2025, our Board of Directors authorized a share repurchase program for up to $2.0 billion in shares of our common stock, which will expire in January 2028. Item 6: [ Reserved] 28 Table of Contents

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Excess of Redemption Value over Carrying Value of Preferred Shares Redeemed In September 2024, we redeemed all 6.9 million of Realty Income Series A Preferred Stock outstanding.
In September 2024, we redeemed all 6.9 million of Realty Income Series A Preferred Stock outstanding. Excess of Redemption Value Over Carrying Value of Preferred Shares Redeemed In September 2024, we redeemed all 6.9 million of Realty Income Series A Preferred Stock outstanding.
Long-Term Liquidity Requirements Our goal is to deliver dependable monthly dividends to our 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.
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.
These calculations, which are not based on 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.
These calculations, which are not based on U.S. GAAP measurements, 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.
We believe Annualized Pro Forma Adjusted EBITDA re 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 rent from investments acquired during the quarter.
We believe Annualized Pro Forma Adjusted EBITDA re 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.
If events should occur that require us to reduce the carrying value of our real estate by recording provisions for impairment, they could have a material impact on our results of operations. 37 Table of Contents NON-GAAP FINANCIAL MEASURES Adjusted Earnings before Interest, Taxes, Depreciation and Amortization for Real Estate ("Adjusted EBITDA re ") Nareit established an EBITDA metric for real estate companies (i.e., EBITDA for real estate, or EBITDA re ) it believed would provide investors with a consistent measure to help make investment decisions among REITs.
If events should occur that require us to reduce the carrying value of our real estate by recording provisions for impairment, they could have a material impact on our results of operations. 42 Table of Contents NON-GAAP FINANCIAL MEASURES Adjusted Earnings before Interest, Taxes, Depreciation and Amortization for Real Estate ("Adjusted EBITDA re ") Nareit established an EBITDA metric for real estate companies (i.e., EBITDA for real estate, or EBITDA re ) it believed would provide investors with a consistent measure to help make investment decisions among REITs.
We define Annualized Pro Forma Adjusted EBITDA re as Annualized Adjusted EBITDA re , subject to certain adjustments to incorporate Adjusted EBITDA re from investments we acquired or stabilized during the applicable quarter and to remove Adjusted EBITDA re from investments we disposed of during the applicable quarter, and include transaction accounting adjustments in accordance with U.S.
We define Annualized Pro Forma Adjusted EBITDA re as Annualized Adjusted EBITDA re , subject to certain adjustments to incorporate Adjusted EBITDA re from investments we acquired or stabilized during the applicable quarter and Adjusted EBITDA re from investments we disposed of during the applicable quarter, and include transaction accounting adjustments in accordance with U.S.
The use of different assumptions in the allocation of the purchase price of the acquired properties and liabilities assumed could affect the timing of recognition of the related revenue and expenses. 36 Table of Contents Provisions for Impairment - Real Estate Assets Management must make significant judgment as to if, and when, impairment losses should be taken on our properties when events or a change in circumstances indicate that the carrying amount of the asset may not be recoverable.
The use of different assumptions in the allocation of the purchase price of the acquired properties and liabilities assumed could affect the timing of recognition of the related revenue and expenses. 41 Table of Contents Provisions for Impairment - Real Estate Assets Management must make significant judgment as to if, and when, impairment losses should be taken on our properties when events or a change in circumstances indicate that the carrying amount of the asset may not be recoverable.
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 EBITDA re differently than we do.
Our Adjusted EBITDA re may not be comparable to Adjusted EBITDA re reported by other companies or as defined by Nareit, and other companies may interpret or define Adjusted EBITDA re differently than we do.
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 facility and commercial paper programs.
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.
(2) 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. (3) We currently pay the ground lessors directly for the rent under certain ground lease arrangements.
(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.
As of December 31, 2024, we were 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 and Standard & Poor’s Ratings Group has assigned a rating of A- with a “stable” outlook.
As of December 31, 2025, we were 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 and Standard & Poor’s Ratings Group has assigned a rating of A- with a “stable” outlook.
For a discussion of the year ended December 31, 2023 compared to the year ended December 31, 2022, please refer to Part II, Item 7. "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, 2023.
For a discussion of the year ended December 31, 2024 compared to the year ended December 31, 2023, please refer to Part II, Item 7. "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, 2024.
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.
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. U.S.
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, 43 Table of Contents so comparisons with other REITs may not be meaningful.
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.
Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis reflect our financial condition and results of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis reflect our financial condition and results of operations for the year ended December 31, 2025 compared to the year ended December 31, 2024.
In addition, our credit facility provides for a facility commitment fee based on our credit ratings, which ranges from: (i) 0.30% for a rating lower than BBB-/Baa3 or unrated, and (ii) 0.10% for a credit rating of A/A2 or higher.
In addition, our credit facilities provide for a facility commitment fee based on our credit ratings, which ranges from: (i) 0.30% for a rating lower than BBB-/Baa3 or unrated, and (ii) 0.10% for a credit rating of A/A2 or higher.
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 Internal Revenue Code of 1986, as amended, our debt service requirements, and any other factors the Board of Directors may deem relevant.
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 Code, our debt service requirements, and any other factors the Board of Directors may deem relevant.
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 January 1, 2024, nor does it purport to reflect our debt service coverage ratio for any future period.
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 four-quarter period, nor does it purport to reflect our debt service coverage ratio for any future period.
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) provisions for impairment, (v) merger, transaction, and other costs, net, (vi) gain on sales of real estate, (vii) foreign currency and derivative gain and loss, net, and (viii) our proportionate share of adjustments from unconsolidated entities.
We define Adjusted EBITDA re , 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) provisions for impairment, (v) merger, transaction, and other costs, net, (vi) gain on sales of real estate, (vii) foreign currency and derivative gain and loss, net, and (viii) our proportionate share of adjustments from unconsolidated entities and consolidated entities with noncontrolling interests.
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 $303.1 million, $274.2 million, and $184.7 million for the years ended December 31, 2024, 2023, and 2022, respectively.
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 $340.4 million, $303.1 million, and $274.2 million for the years ended December 31, 2025, 2024, and 2023, respectively.
Approximately 91% of our annualized retail contractual rent as of December 31, 2024, was derived from our clients with a service, non-discretionary, and/or low price point component to their business.
Approximately 91% of our annualized retail base rent as of December 31, 2025, was derived from our clients with a service, non-discretionary, and/or low price point component to their business.
In addition, we were assigned the following ratings on our commercial paper at December 31, 2024: Moody's Investors Service has assigned a rating of P-2 and Standard & Poor's Ratings Group has assigned a rating of A-2.
In addition, we were assigned the following ratings on our commercial paper as of December 31, 2025: Moody's Investors Service has assigned a rating of P-2 and Standard & Poor's Ratings Group has assigned a rating of A-2.
GAAP, giving pro forma effect to all transactions as if they occurred at the beginning of the applicable period. Our calculation includes all adjustments consistent with the requirements to present Adjusted EBITDA re on a pro forma basis in accordance with Article 11 of Regulation S-X.
GAAP, giving pro forma effect to all transactions as if they occurred at the beginning of the applicable quarter, and adjusted for our pro-rata share. Our calculation includes all adjustments consistent with the requirements to present Adjusted EBITDA re on a pro forma basis in accordance with Article 11 of Regulation S-X.
See notes to the accompanying consolidated financial statements contained in this annual report for additional information regarding our indebtedness. Property Expenses (excluding reimbursable) Property expenses (excluding reimbursable) 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.
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.
Investments in Unconsolidated Entities As of December 31, 2024, our pro-rata share of secured debt of unconsolidated entities was approximately $659.2 million. 30 Table of Contents DIVIDEND POLICY Distributions are paid monthly to holders of shares of our common stock.
Investments in Unconsolidated Entities As of December 31, 2025, our pro-rata share of secured debt of unconsolidated entities was approximately $659.2 million. DIVIDEND POLICY Distributions are paid monthly to holders of shares of our common stock.
GAAP, consist of adjustments to incorporate the Adjusted EBITDA re from investments we acquired or stabilized during the applicable quarter and remove Adjusted EBITDA re 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 period, consistent with the requirements of Article 11 of Regulation S-X.
GAAP and adjusted for our pro-rata share, consist of adjustments to incorporate the Adjusted EBITDA re from investments we acquired or stabilized during the applicable quarter and Adjusted EBITDA re 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 periods, consistent with the requirements of Article 11 of Regulation S-X.
In 2024, our cash distributions to common stockholders totaled $2.69 billion, or approximately 126.1% of our estimated taxable income of $2.13 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.
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.
The actual amounts as of December 31, 2024, are: Note Covenants Required Actual Limitation on incurrence of total debt 60% of adjusted assets 41.1 % Limitation on incurrence of secured debt 40% of adjusted assets 0.3 % Debt service and fixed charge coverage (trailing 12 months) (1) > 1.5x 4.7x Maintenance of total unencumbered assets > 150% of unsecured debt 244.5 % (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) incurred 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 had in each case occurred on January 1, 2024 and subject to certain additional adjustments.
The actual amounts as of December 31, 2025, are: 34 Table of Contents Note Covenants Required Actual Limitation on incurrence of total debt 60% of adjusted assets 41.4 % 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 242.7 % (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.
Rent based on a percentage of our clients' gross sales, or percentage rent, was $16.0 million and $14.8 million for the years ended December 31, 2024 and 2023, respectively. Percentage rent represents less than 1% of rental revenue.
Rent based on a percentage of our clients' gross sales, or percentage rent, was $18.2 million and $16.0 million for the years ended December 31, 2025 and 2024, respectively. Percentage rent represents less than 1% of rental revenue.
(3) Relates to the aggregate of (i) rental revenue from 315 properties that were available for lease during part of 2024 or 2023 for the year ended December 31, 2024, and (ii) rental revenue for 50 properties under development or completed developments that do not meet our same store pool definition for the year ended December 31, 2024.
(3) Relates to the aggregate of (i) rental revenue from 294 properties that were available for lease during part of 2025 or 2024 for the year ended December 31, 2025, respectively and (ii) rental revenue for 126 properties under development or completed developments that do not meet our same store pool definition for the years ended December 31, 2025, respectively.
In addition, our credit facility provides that the interest rates can range between: (i) SOFR/SONIA/EURIBOR, plus 1.40% if our credit rating is lower than BBB-/Baa3 or our senior unsecured debt is unrated and (ii) SOFR/SONIA/EURIBOR, plus 0.70% if our credit rating is A/A2 or higher.
In addition, our credit facilities provide that the interest rates can range between: (i) SOFR/SONIA/Euro Interbank Offered Rate (“EURIBOR”), plus 1.40% if our credit rating is lower than BBB-/Baa3 or our senior unsecured debt is unrated and (ii) SOFR/SONIA/EURIBOR, plus 0.70% if our credit rating is A/A2 or higher.
As of December 31, 2024, approximately 32.4% of our total portfolio annualized contractual rent came from properties leased to our investment grade clients, their subsidiaries or affiliated companies.
As of December 31, 2025, approximately 32.2% of our total portfolio annualized base rent came from properties leased to our investment grade clients, their subsidiaries or affiliated companies.
Depreciation and Amortization Depreciation and amortization increased by $500.4 million for the year ended December 31, 2024 as compared with the same period in 2023, primarily due to the Merger and the acquisitions of properties in 2023 and 2024, which were partially offset by property dispositions.
Depreciation and Amortization Depreciation and amortization increased by $128.6 million for the year ended December 31, 2025 as compared to the same period in 2024, primarily due to the acquisitions of properties in 2024 and 2025, which were partially offset by property dispositions.
Of the 16,694 in-place leases in the portfolio, 13,734, or 82.3%, 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.
Of the 17,204 in-place leases in the portfolio, 13,860, or 80.6%, 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.
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.
Our property-level occupancy rate excludes properties with ancillary leases only, such as cell towers and billboards, and properties with possession pending, and includes properties owned by unconsolidated joint ventures.
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 revolving credit facility or commercial paper programs, which are backstopped by our credit facility; • Short-term loans; • Asset dispositions; and • Credit investment repayments In addition to these sources of liquidity, we are exploring various capital diversification initiatives, including the establishment of a third-party private capital open-end fund.
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.
The following summarizes our AFFO (in millions, except per share data): Years ended December 31, 2024 2023 % Change AFFO available to common stockholders $ 3,621.4 $ 2,774.9 30.5 % AFFO per common share (1) $ 4.19 $ 4.00 4.8 % (1) All per share amounts are presented on a diluted per common share basis.
The following summarizes our AFFO (in millions, except per share data): Years ended December 31, 2025 2024 % Change AFFO available to common stockholders $ 3,885.9 $ 3,621.4 7.3 % AFFO per common share (1) $ 4.28 $ 4.19 2.1 % (1) All per share amounts are presented on a diluted per common share basis.
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. 26 Table of Contents Impact of Real Estate and Capital Markets In the commercial real estate market, property prices generally continue to fluctuate.
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.
Management also uses our ratios of Net Debt/Annualized Adjusted EBITDA re and Net Debt/Annualized Pro Forma Adjusted EBITDA re as measures of leverage in assessing our financial performance, which is calculated as net debt (which we define as total debt per the consolidated balance sheets, excluding deferred financing costs and net premiums and discounts, but including our proportionate share of debt from unconsolidated entities, less cash and cash equivalents), divided by annualized quarterly Adjusted EBITDA re and annualized Pro Forma Adjusted EBITDA re , respectively. 38 Table of Contents The following is a reconciliation of net income (which we believe is the most comparable U.S.
Management also uses our ratios of Net Debt/Annualized Adjusted EBITDA re and Net Debt/Annualized Pro Forma Adjusted EBITDA re as measures 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 cash and cash equivalents, at our pro-rata share), divided by Annualized Adjusted EBITDA re and Annualized Pro Forma Adjusted EBITDA re , respectively. 43 Table of Contents The following is a reconciliation of net income (which we believe is the most comparable U.S.
Debt Financing Activities At December 31, 2024, our total outstanding borrowings of revolving credit facility, commercial paper, term loans, mortgages payable, and senior unsecured notes and bonds were $26.5 billion, with a weighted average maturity of 5.8 years and a weighted average interest rate of 3.9%.
Debt Financing Activities As of December 31, 2025, our total outstanding borrowings of credit facilities, commercial paper, term loans, mortgages payable, and senior unsecured notes and bonds were $29.1 billion, with a weighted average maturity of 5.5 years and a weighted average interest rate of 3.9%.
Total capitalization consisted of $47.8 billion of common equity (based on the December 31, 2024 closing price on the NYSE of $53.41 and assuming the conversion of 2.7 million common units of Realty Income, L.P.), and total outstanding borrowings of $27.2 billion on our revolving credit facility, commercial paper, term loans, mortgages payable, senior unsecured notes and bonds, and our proportionate share of unconsolidated entities' debt (excluding unamortized deferred financing costs, discounts, and premiums).
Total capitalization consisted of $52.8 billion of common equity (based on the December 31, 2025 closing price on the NYSE of $56.37 and assuming the conversion of 2.7 million common units of Realty Income, L.P.), and total outstanding borrowings of $29.7 billion on our credit facilities, commercial paper, term loans, mortgages payable, and senior unsecured notes and bonds and our proportionate share of joint venture debt (excluding unamortized deferred financing costs, discounts, and premiums).
As of December 31, 2024, our top 20 clients (based on percentage of total portfolio annualized contractual rent) represented approximately 36.4% of our annualized rent and 10 of these clients had investment grade credit ratings or were subsidiaries or affiliates of investment grade companies.
As of December 31, 2025, our top 20 clients (based on percentage of total portfolio annualized base rent) represented approximately 35.8% of our annualized base rent and 11 of these clients had investment grade credit ratings or were subsidiaries or affiliates of investment grade companies.
The following table summarizes our Annualized Pro Forma Adjustments related to our Annualized Pro Forma Adjusted EBITDA re calculation for the periods indicated below (in thousands): Three months ended December 31, 2024 2023 Annualized pro forma adjustments from investments acquired or stabilized $ 82,848 $ 77,012 Annualized pro forma adjustments from investments disposed (3,705) (2,093) Annualized Pro Forma Adjustments $ 79,143 $ 74,919 39 Table of Contents FUNDS FROM OPERATIONS AVAILABLE TO COMMON STOCKHOLDERS ("FFO") AND NORMALIZED FUNDS FROM OPERATIONS AVAILABLE TO COMMON STOCKHOLDERS ("Normalized FFO") 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.
The following table summarizes our Annualized Pro Forma Adjustments related to our Annualized Pro Forma Adjusted EBITDA re calculation for the period indicated below (in thousands): Three months ended December 31, 2025 Annualized pro forma adjustments from investments acquired or stabilized $ 116,680 Annualized pro forma adjustments from investments disposed (64,869) Annualized Pro Forma Adjustments $ 51,811 44 Table of Contents 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.
GENERAL Realty Income (NYSE: O), an S&P 500 company, is real estate partner to the world's leading companies. Founded in 1969, we invest in diversified commercial real estate and, as of December 31, 2024, have a portfolio of over 15,600 properties in all 50 U.S. states, the U.K., and six other countries in Europe.
GENERAL 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 December 31, 2025, we have a portfolio of over 15,500 properties in all 50 U.S. states, the U.K., and eight other countries in Europe.
We distributed $3.126 per share to stockholders during the year ended December 31, 2024, representing 74.6% of our diluted Adjusted Funds from Operations Available to Common Stockholders ("AFFO") per share of $4.19.
We distributed $3.22 per share to stockholders during the year ended December 31, 2025, representing 75.2% of our diluted Adjusted Funds from Operations Available to Common Stockholders ("AFFO") per share of $4.28.
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.
(“Spirit”) properties, which were not included in our financial statements prior to the close of the merger (the "Merger") with Spirit on January 23, 2024. 37 Table of Contents 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.
As of December 31, 2024, approximately 96% of our total debt was fixed rate debt. See notes 7 through 10 to the consolidated financial statements contained in this annual report for additional information about our outstanding debt, along with our debt financing activities during the year ended December 31, 2024 below.
As of December 31, 2025, approximately 93% of our total debt was fixed rate debt. See notes 8 through 11 to the consolidated financial statements for additional information about our outstanding debt, along with our debt financing activities during the year ended December 31, 2025 below.
At December 31, 2024, our portfolio of 15,621 properties was 98.7% leased with 205 properties available for lease or sale, as compared to 98.6% leased with 193 properties available for lease at December 31, 2023.
As of December 31, 2025, our portfolio of 15,511 properties was 98.9% leased with 173 properties available for lease or sale, as compared to 98.7% leased with 205 properties available for lease as of December 31, 2024.
RECENT DEVELOPMENTS Increases in Monthly Dividends to Common Stockholders We have continued our 56-year history of paying monthly dividends. In addition, we have increased the dividend five times during 2024 and twice during 2025.
RECENT DEVELOPMENTS Increases in Monthly Dividends to Common Stockholders We have continued our 57-year history of paying monthly dividends by increasing the dividend five times during 2025 and once during 2026.
Below is a summary of our portfolio activity for the periods indicated below: Three months ended December 31, 2024 Properties available for lease at September 30, 2024 196 Lease expirations (1) 286 Re-leases to same client (197) Re-leases to new client (24) Vacant dispositions (56) Properties available for lease at December 31, 2024 205 Year ended December 31, 2024 Properties available for lease at December 31, 2023 193 Lease expirations (1) 928 Re-leases to same client (638) Re-leases to new client (56) Vacant dispositions (222) Properties available for lease at December 31, 2024 205 (1) Includes scheduled and unscheduled expirations (including leases rejected in bankruptcy), as well as future expirations resolved in the periods indicated above.
Below is a summary of our portfolio activity for the periods indicated below: Three months ended December 31, 2025 Properties available for lease as of September 30, 2025 204 Lease expirations (1) 378 Re-leases to same client (285) Re-leases to new client (9) Vacant dispositions (115) Properties available for lease as of December 31, 2025 173 Year ended December 31, 2025 Properties available for lease as of December 31, 2024 205 Lease expirations (1) 1,317 Re-leases to same client (963) Re-leases to new client (52) Vacant dispositions (334) Properties available for lease as of December 31, 2025 173 (1) Includes scheduled and unscheduled expirations (including leases rejected in bankruptcy), as well as future expirations resolved in the periods indicated above.
For asset acquisitions, we allocate the cost of real estate acquired, inclusive of transaction costs, to: (1) land, (2) building and improvements, and (3) identified intangible assets and liabilities, based in each case on their relative estimated fair values. For business combinations, all assets acquired and liabilities assumed are recorded at fair value.
When acquiring a property for investment purposes, we allocate the cost of real estate acquired, inclusive of transaction costs, to: (1) land, (2) building and improvements, and (3) identified intangible assets and liabilities, based in each case on their relative estimated fair values.
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. 32 Table of Contents Rental Revenue (reimbursable) A number of our leases provide for contractually obligated reimbursements from clients for recoverable real estate taxes and operating expenses.
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.
As of December 31, 2024, there were approximately 1.8 million shares of unsettled common stock subject to forward sale confirmations through our ATM program, representing approximately $91.8 million in expected net proceeds, which have been executed at a weighted average price of $51.80 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).
As of December 31, 2025, we had outstanding forward-sale agreements under our ATM program for a total of 12.6 million shares of common stock, representing approximately $708.5 million in expected net proceeds, which have been executed at a weighted average price of $56.26 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).
As of December 31, 2024, we owned or held interests in 15,621 properties, with approximately 339.4 million square feet of leasable space leased to 1,565 clients doing business in 89 separate industries. Of the 15,621 properties in our portfolio as of December 31, 2024, 15,316, or 98.0%, were single-client properties, and the remaining were multi–client properties.
As of December 31, 2025, we owned or held interests in 15,511 properties, with approximately 355.0 million square feet of leasable space leased to 1,761 clients doing business in 92 separate industries. Of the 15,511 properties in our portfolio as of December 31, 2025, 15,167, or 97.8%, were single-tenant properties, and the remaining were multi–tenant properties.
During the three months ended December 31, 2024, the new annualized contractual rent on re-leases was $52.5 million, as compared to the previous annual rent of $48.9 million on the same units, representing a rent recapture rate of 107.4% on the units re-leased.
During the three months ended December 31, 2025, the new annualized base rent on re-leased units was $88.30 million, as compared to the previous annual rent of $84.21 million on the same units, representing a rent recapture rate of 104.9% on the re-leased units.
Years ended December 31, 2024 2023 Net income available to common stockholders $ 847,893 $ 872,309 Cumulative adjustments to calculate Normalized FFO (1) 2,716,058 1,964,293 Normalized FFO available to common stockholders 3,563,951 2,836,602 Excess of redemption value over carrying value of preferred shares redeemed 5,116 — Amortization of share-based compensation 32,741 26,227 Amortization of net debt discounts (premiums) and deferred financing costs 15,361 (44,568) Amortization of acquired interest rate swap value (2) 13,935 — Non-cash change in allowance for credit losses (3) 106,801 4,874 Leasing costs and commissions (8,558) (9,878) Recurring capital expenditures (402) (331) Straight-line rent and expenses, net (171,887) (141,130) Amortization of above and below-market leases, net 55,870 79,101 Deferred tax expense 3,552 — Proportionate share of adjustments for unconsolidated entities (2,078) 932 Other adjustments (4) 7,035 23,041 AFFO available to common stockholders $ 3,621,437 $ 2,774,870 AFFO allocable to dilutive noncontrolling interests 6,599 5,540 Diluted AFFO $ 3,628,036 $ 2,780,410 AFFO per common share: Basic $ 4.20 $ 4.01 Diluted $ 4.19 $ 4.00 Distributions paid to common stockholders $ 2,691,719 $ 2,111,793 AFFO available to common stockholders in excess of distributions paid to common stockholders $ 929,718 $ 663,077 Weighted average number of common shares used for computation per share: Basic 862,959 692,298 Diluted 865,842 694,819 (1) See reconciling items for Normalized FFO presented under “Funds from Operations Available to Common Stockholders ("FFO") and Normalized Funds from Operations Available to Common Stockholders ("Normalized FFO")".
Years ended December 31, 2025 2024 Net income available to common stockholders $ 1,058,590 $ 847,893 Cumulative adjustments to calculate Normalized FFO (1) 2,825,947 2,716,058 Normalized FFO available to common stockholders 3,884,537 3,563,951 Debt-related non-cash items: Amortization of net debt discounts and deferred financing costs 36,705 15,361 Amortization of acquired interest rate swap value (2) 11,048 13,935 Capital expenditures from operating properties: Leasing costs and commissions (9,481) (8,558) Recurring capital expenditures (335) (402) Other non-cash items: Non-cash change in allowance for credit losses 36,838 106,801 Amortization of share-based compensation 30,770 32,741 Straight-line rent and expenses, net (169,217) (171,887) Amortization of above and below-market leases, net 47,228 55,870 Deferred tax expense 603 3,552 Proportionate share of adjustments for unconsolidated entities (2,991) (2,078) Excess of redemption value over carrying value of preferred shares redeemed — 5,116 Other adjustments (3) 20,193 7,035 AFFO available to common stockholders $ 3,885,898 $ 3,621,437 AFFO allocable to dilutive noncontrolling interests 9,323 6,599 Diluted AFFO $ 3,895,221 $ 3,628,036 AFFO per common share: Basic $ 4.28 $ 4.20 Diluted $ 4.28 $ 4.19 Distributions paid to common stockholders $ 2,920,895 $ 2,691,719 AFFO after distributions $ 965,003 $ 929,718 Weighted average number of common shares used for AFFO: Basic 907,169 862,959 Diluted 911,015 865,842 (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".
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.
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.
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.
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.
The increase of $14.6 million in income taxes for the year ended December 31, 2024 as compared with the same period in 2023 is primarily attributable to higher taxable income in the U.K. 35 Table of Contents Preferred Stock Dividends The increase in preferred stock dividends of $7.8 million for the year ended December 31, 2024 as compared with the same period in 2023 is due to the issuance of Realty Income Series A Preferred Stock in connection with the Merger.
Preferred Stock Dividends The decrease in preferred stock dividends of $7.8 million for the year ended December 31, 2025 as compared to the same period in 2024 is due to the issuance of Realty Income Series A Preferred Stock during the year ended December 31, 2024 in connection with the Merger.
Gain on Sales of Real Estate The following summarizes our property dispositions (dollars in millions): Years ended December 31, 2024 2023 Number of properties sold 294 121 Net sales proceeds $ 589.5 $ 117.4 Gain on sales of real estate $ 117.3 $ 25.7 Foreign Currency and Derivative Gain (Loss), Net We borrow in the functional currencies of the countries in which we invest.
Gain on Sales of Real Estate The following summarizes our property dispositions (dollars in thousands): Years ended December 31, 2025 2024 Change Number of properties sold 425 294 131 Net sales proceeds $ 744,014 $ 589,450 $ 154,564 Gain on sales of real estate $ 177,640 $ 117,275 $ 60,365 Foreign Currency and Derivative (Loss) Gain, Net We borrow in the functional currencies of the countries in which we invest.
The following summarizes our FFO and Normalized FFO (in millions, except per share data): Years ended December 31, 2024 2023 % Change FFO available to common stockholders $ 3,467.7 $ 2,822.1 22.9 % FFO per common share (1) $ 4.01 $ 4.07 (1.5) % Normalized FFO available to common stockholders $ 3,564.0 $ 2,836.6 25.6 % Normalized FFO per common share (1) $ 4.12 $ 4.09 0.7 % (1) All per share amounts are presented on a diluted per common share basis. 40 Table of Contents The following is a reconciliation of net income available to common stockholders (which we believe is the most comparable U.S.
The following summarizes our FFO and Normalized FFO (in millions, except per share data): Years ended December 31, 2025 2024 % Change FFO available to common stockholders $ 3,860.3 $ 3,467.7 11.3 % FFO per common share (1) $ 4.25 $ 4.01 6.0 % Normalized FFO available to common stockholders $ 3,884.5 $ 3,564.0 9.0 % Normalized FFO per common share (1) $ 4.27 $ 4.12 3.6 % (1) All per share amounts are presented on a diluted per common share basis.
(4) Includes non-cash foreign currency losses (gains) from remeasurement to USD, mark-to-market adjustments on investments and derivatives that are non-cash in nature, straight-line payments from cross-currency swaps, obligations related to financing lease liabilities, adjustments allocable to noncontrolling interests, and gains and losses on the sale of loans receivable.
(2) Includes the amortization of the purchase price allocated to interest rate swaps acquired in the Merger. (3) Includes 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. 48 Table of Contents
The following is our calculation of debt service and fixed charge coverage at December 31, 2024 (in thousands, for trailing twelve months): Net income attributable to the Company $ 860,772 Plus: interest expense, excluding the amortization of deferred financing costs 993,848 Plus: provision for taxes 66,601 Plus: depreciation and amortization 2,395,644 Plus: provisions for impairment 425,833 Plus: pro forma adjustments 212,913 Less: gain on sales of real estate (117,275) Income available for debt service, as defined $ 4,838,336 Total pro forma debt service charge $ 1,027,604 Debt service and fixed charge coverage ratio 4.7x 29 Table of Contents Credit Agency Ratings The borrowing interest rates under our revolving credit facility are based upon our ratings assigned by credit rating agencies.
The following is our calculation of debt service and fixed charge coverage as of December 31, 2025 (in thousands, for trailing twelve months): Net income attributable to the Company $ 1,058,590 Plus: interest expense, excluding the amortization of deferred financing costs 1,106,037 Plus: provision for taxes 85,346 Plus: depreciation and amortization 2,524,200 Plus: provisions for impairment 471,335 Plus: pro forma adjustments 211,434 Less: gain on sales of real estate (177,640) Income available for debt service, as defined $ 5,279,302 Total pro forma debt service charge $ 1,121,370 Debt service and fixed charge coverage ratio 4.7x Credit Agency Ratings The borrowing interest rates under our revolving credit facilities are based upon our ratings assigned by credit rating agencies.
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). Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications had no impact on previously reported 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).
Foreign currency and derivative gain (loss), net was a $3.4 million gain for the year ended December 31, 2024 as compared $13.4 million loss with the same period in 2023, primarily due to the impact of foreign currency fluctuations on the remeasurement of intercompany debt.
Foreign currency and derivative (loss) gain, net was a $28.7 million loss for the year ended December 31, 2025, compared to a $3.4 million gain for the same period in 2024, 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.
(2) For purposes of comparability, same store rental revenue is presented on a constant currency basis using the exchange rate as of December 31, 2024. None of the properties in France, Germany, Ireland, or Portugal met our same store pool definition for the periods presented.
(2) For purposes of comparability, same store rental revenue is presented on a constant currency basis using the exchange rate as of December 31, 2025.
During the year ended December 31, 2024, the new annualized contractual rent on re-leases was $184.0 million, as compared to the previous annual rent of $174.2 million on the same units, representing a rent recapture rate of 105.6% on the units re-leased.
During the year ended December 31, 2025, the new annualized base rent on re-leased units was $301.99 million, as compared to the previous annual rent of $290.61 million on the same units, representing a rent recapture rate of 103.9% on the re-leased units.
As of February 2025, we have paid 109 consecutive quarterly dividend increases and increased the dividend 129 times since our listing on the NYSE in 1994. 2024 Dividend increases Month Declared Month Paid Monthly Dividend per share Increase per share 1st increase Dec 2023 Jan 2024 $ 0.2565 $ 0.0005 2nd increase Mar 2024 Apr 2024 $ 0.2570 $ 0.0005 3rd increase May 2024 Jun 2024 $ 0.2625 $ 0.0055 4th increase Jun 2024 Jul 2024 $ 0.2630 $ 0.0005 5th increase Sep 2024 Oct 2024 $ 0.2635 $ 0.0005 2025 Dividend increases 1st increase Dec 2024 Jan 2025 $ 0.2640 $ 0.0005 2nd increase Feb 2025 Mar 2025 $ 0.2680 $ 0.0040 24 Table of Contents The dividends paid per share during the year ended December 31, 2024 totaled $3.126, as compared to $3.051 during the year ended December 31, 2023, an increase of $0.075, or 2.5%.
As of February 2026, we have paid 113 consecutive quarterly dividend increases and increased the dividend 133 times since our listing on the NYSE in 1994. 2025 Dividend increases Month Declared Month Paid Monthly Dividend per share Increase per share 1st increase Dec 2024 Jan 2025 $ 0.2640 $ 0.0005 2nd increase Feb 2025 Mar 2025 $ 0.2680 $ 0.0040 3rd increase Mar 2025 Apr 2025 $ 0.2685 $ 0.0005 4th increase Jun 2025 Jul 2025 $ 0.2690 $ 0.0005 5th increase Sep 2025 Oct 2025 $ 0.2695 $ 0.0005 2026 Dividend increase 1st increase Dec 2025 Jan 2026 $ 0.2700 $ 0.0005 The dividends paid per share during the year ended December 31, 2025 totaled $3.2170, as compared to $3.1255 during the year ended December 31, 2024, an increase of $0.0915, or 2.9%. 29 Table of Contents The monthly dividend of $0.2700 per share represents a current annualized dividend of $3.240 per share, and an annualized dividend yield of 5.7% based on the last reported sale price of our common stock on the NYSE of $56.37 on December 31, 2025.
Investments During the year ended December 31, 2024, we invested $3.9 billion at an initial weighted average cash yield of 7.4%, including an investment in 546 properties, properties under development or expansion, and investments in loans.
Investments During the year ended December 31, 2025, we invested $6.3 billion at an initial weighted average cash yield of 7.3%, including investments in 380 properties, properties under development or expansion, unconsolidated entities, a preferred equity investment, and loans. See notes 4 through 7 to the consolidated financial statements for further details.
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 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.
The difference between the purchase consideration and the aggregated fair value is recognized as goodwill or a gain on bargain purchase. Intangible assets and liabilities consist of above-market or below-market lease value and the value of in-place leases, as applicable.
Intangible assets and liabilities consist of above-market or below-market lease value and the value of in-place leases, as applicable.
We anticipate maintaining the availability of our ATM program in the future, including the replenishment of authorized shares issuable thereunder.
Additionally, as of December 31, 2025, we had 141.1 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.
Merger, Transaction, and Other Costs, Net During the year ended December 31, 2024, we incurred $96.3 million of merger, transaction, and other costs, net consisting of $86.7 million of transaction and integration-related costs related to Spirit, which largely consisted of employee severance, post-combination share-based compensation, transfer taxes, and various professional fees directly attributable to the Merger, as well as $5.1 million related to the lease termination of a legacy corporate facility, and $4.5 million of organization costs incurred related to our private fund.
During the year ended December 31, 2024, we incurred $96.3 million of merger, transaction, and other costs, net consisting primarily of transaction and integration-related costs related to Spirit, $5.1 million related to the lease termination of a legacy corporate facility, and $4.5 million related to the establishment of the Fund.
Property expenses (reimbursable) increased by $28.9 million for the year ended December 31, 2024 as compared with the same period in 2023 primarily due to an increase in portfolio size, resulting in higher common area maintenance, property taxes, and insurance expenses paid on behalf of our clients.
Property expenses (reimbursements) increased by $37.3 million for the year ended December 31, 2025 as compared to the same period in 2024, primarily due to higher reimbursable property taxes and maintenance due to growth in our portfolio.
Real estate assets acquired in the Merger contributed an additional $413.4 million of depreciation and amortization for the year ended December 31, 2024. 33 Table of Contents Interest Expense The following is a summary of the components of our interest expense (in thousands): Years ended December 31, 2024 2023 Interest on our credit facility, commercial paper, term loans, mortgages, senior unsecured notes and bonds, and interest rate swaps $ 1,018,445 $ 788,344 Credit facility commitment fees 5,401 5,357 Amortization of debt origination and deferred financing costs 23,939 26,670 Gain on interest rate swaps (7,180) (7,189) Amortization of net mortgage premiums and discounts 30 (12,803) Amortization of net note premiums and discounts (3,309) (60,657) Capital lease obligation 2,025 1,509 Interest capitalized (22,396) (10,808) Interest expense $ 1,016,955 $ 730,423 Credit facility, commercial paper, term loans, mortgages and senior unsecured notes and bonds Average outstanding balances $ 25,508,037 $ 20,537,222 Weighted average interest rates 4.07 % 3.83 % Interest expense increased by $286.6 million for the year ended December 31, 2024 as compared with the same period in 2023, primarily due to higher average borrowings and weighted average interest rates.
Interest Expense The following is a summary of the components of our interest expense (in thousands): Years ended December 31, 2025 2024 Change Interest on our revolving credit facilities, commercial paper, term loans, mortgages, senior unsecured notes and bonds, and interest rate swaps $ 1,114,048 $ 1,018,445 $ 95,603 Credit facility commitment fees 6,052 5,401 651 Amortization of debt origination and deferred financing costs 29,652 23,939 5,713 Gain on interest rate swaps (7,322) (7,180) (142) Amortization of net mortgage and note discounts (premiums) 7,069 (3,279) 10,348 Capital lease obligation 2,414 2,025 389 Interest capitalized (17,034) (22,396) 5,362 Interest expense $ 1,134,879 $ 1,016,955 $ 117,924 Revolving credit facilities, commercial paper, term loans, mortgages and senior unsecured notes and bonds Average outstanding balances $ 28,319,680 $ 25,508,037 $ 2,811,643 Weighted average interest rates 3.93 % 4.07 % Interest expense increased by $117.9 million, or 11.6%, for the year ended December 31, 2025 as compared to the same period in 2024, primarily due to higher average borrowings in 2025, as well as higher amortization of net note discounts (premiums) and deferred financing costs.
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. 41 Table of Contents ADJUSTED FUNDS FROM OPERATIONS AVAILABLE TO COMMON STOCKHOLDERS ("AFFO") 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.
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. 45 Table of Contents 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.
Since our founding, we have declared 656 consecutive monthly dividends and are a member of the S&P 500 Dividend Aristocrats ® index for having increased our dividend for the last 30 consecutive years.
Since our listing on the NYSE in 1994, we have had 133 dividend increases and are a member of the S&P 500 Dividend Aristocrats ® index for having increased our dividend for over 31 consecutive years.
During the year ended December 31, 2024, we settled approximately 30.2 million shares of common stock previously sold pursuant to forward sale agreements through our ATM program for approximately $1.7 billion of net proceeds. As of December 31, 2024, we had 55.5 million shares remaining for future issuance under our ATM program.
See note 23 , Subsequent Events , to the consolidated financial statements for further details. ATM Program During the year ended December 31, 2025, we settled approximately 42.0 million shares of common stock previously sold pursuant to forward sale agreements through our ATM program for approximately $2.4 billion of net proceeds.
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 (dollars in thousands, except per share amounts): Years ended December 31, 2024 2023 Net income available to common stockholders $ 847,893 $ 872,309 Depreciation and amortization 2,395,644 1,895,177 Depreciation of furniture, fixtures and equipment (2,857) (2,239) Provisions for impairment of real estate 319,032 82,208 Gain on sales of real estate (117,275) (25,667) Proportionate share of adjustments for unconsolidated entities 29,124 4,205 FFO adjustments allocable to noncontrolling interests (3,902) (3,855) FFO available to common stockholders $ 3,467,659 $ 2,822,138 FFO allocable to dilutive noncontrolling interests 6,611 5,552 Diluted FFO $ 3,474,270 $ 2,827,690 FFO available to common stockholders $ 3,467,659 $ 2,822,138 Merger, transaction, and other costs, net 96,292 14,464 Normalized FFO available to common stockholders $ 3,563,951 $ 2,836,602 Normalized FFO allocable to dilutive noncontrolling interests 6,611 5,552 Diluted Normalized FFO $ 3,570,562 $ 2,842,154 FFO per common share: Basic $ 4.02 $ 4.08 Diluted $ 4.01 $ 4.07 Normalized FFO per common share: Basic $ 4.13 $ 4.10 Diluted $ 4.12 $ 4.09 Distributions paid to common stockholders $ 2,691,719 $ 2,111,793 FFO available to common stockholders in excess of distributions paid to common stockholders $ 775,940 $ 710,345 Normalized FFO available to common stockholders in excess of distributions paid to common stockholders $ 872,232 $ 724,809 Weighted average number of common shares used for FFO and Normalized FFO: Basic 862,959 692,298 Diluted 865,842 694,819 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.
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): Years ended December 31, 2025 2024 Net income available to common stockholders $ 1,058,590 $ 847,893 Depreciation and amortization 2,524,200 2,395,644 Depreciation of furniture, fixtures and equipment (2,622) (2,857) Provisions for impairment of real estate 434,497 319,032 Gain on sales of real estate (177,640) (117,275) Proportionate share of adjustments for unconsolidated entities 33,345 29,124 FFO adjustments allocable to noncontrolling interests (10,047) (3,902) FFO available to common stockholders $ 3,860,323 $ 3,467,659 FFO allocable to dilutive noncontrolling interests 9,396 6,611 Diluted FFO $ 3,869,719 $ 3,474,270 FFO available to common stockholders $ 3,860,323 $ 3,467,659 Merger, transaction, and other costs, net (1) 24,214 96,292 Normalized FFO available to common stockholders $ 3,884,537 $ 3,563,951 Normalized FFO allocable to dilutive noncontrolling interests 9,396 6,611 Diluted Normalized FFO $ 3,893,933 $ 3,570,562 FFO per common share: Basic $ 4.26 $ 4.02 Diluted $ 4.25 $ 4.01 Normalized FFO per common share: Basic $ 4.28 $ 4.13 Diluted $ 4.27 $ 4.12 Distributions paid to common stockholders $ 2,920,895 $ 2,691,719 FFO after distributions $ 939,428 $ 775,940 Normalized FFO after distributions $ 963,642 $ 872,232 Weighted average number of common shares used for FFO and Normalized FFO: Basic 907,169 862,959 Diluted 911,015 865,842 (1) During the year ended December 31, 2025, we incurred $24.2 million of merger, transaction, and other costs, net, consisting primarily of placement fees incurred in fundraising for the Fund.
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.
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. 36 Table of Contents 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.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

9 edited+4 added−2 removed6 unchanged
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 issue long-term notes and bonds, primarily at fixed rates.
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.
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 December 31, 2024. This information is presented to evaluate the expected cash flows and sensitivity to interest rate changes.
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 December 31, 2025. This information is presented to evaluate the expected cash flows and sensitivity to interest rate changes.
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. 45 Table of Contents
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. 50 Table of Contents
Interest Rates We are exposed to interest rate changes primarily as a result of our credit facility 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.
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.
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. 44 Table of Contents At December 31, 2024, our outstanding mortgages payable, notes, and bonds had fixed interest rates.
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. 49 Table of Contents As of December 31, 2025, our outstanding mortgages payable, notes, and bonds had fixed interest rates.
We base the estimated fair value of the publicly traded fixed rate senior notes and bonds at December 31, 2024, on the indicative market prices and recent trading activity of our senior notes and bonds payable.
We base the estimated fair value of the publicly traded fixed rate senior notes and bonds as of December 31, 2025, on the indicative market prices and recent trading activity of our senior notes and bonds payable.
(3) We base the estimated fair value of our fixed rate mortgages and private senior notes payable at December 31, 2024, on the relevant forward interest rate curve, plus an applicable credit-adjusted spread.
(2) We base the estimated fair value of our fixed rate mortgages and private senior notes payable as of December 31, 2025, on the relevant forward interest rate curve, plus an applicable credit-adjusted spread.
Interest on our credit facility and commercial paper borrowings and term loans is variable. However, the variable interest rate feature on our term loans have been mitigated by interest rate swap agreements. At December 31, 2024, a 1% change in interest rates on our variable-rate debt would change our interest rate costs by $11.3 million.
Interest on our credit facilities and commercial paper borrowings and term loans is variable. However, the variable interest rate feature on our term loans has been mitigated by interest rate swap agreements. As of December 31, 2025, a 1% change in interest rates on our variable-rate debt would change our interest rate costs by $20.2 million.
We believe that the carrying values of the line of credit, commercial paper borrowings, and term loans reasonably approximate their estimated fair values at December 31, 2024. The table above incorporates only those exposures that exist as of December 31, 2024. It does not consider those exposures or positions that could arise after that date.
We believe that the carrying values of the credit facilities, commercial paper borrowings, and term loans reasonably approximate their estimated fair values as of December 31, 2025. (3) Calculated as the weighted average interest rate as of December 31, 2025.
Removed
Expected Maturity Data The following table summarizes the maturity of our debt as of December 31, 2024 (dollars in millions): Year of Principal Due Fixed rate debt Weighted average rate on fixed rate debt Variable rate debt Weighted average rate on variable rate debt 2025 $ 1,893.4 4.22 % $ 67.3 3.05 % 2026 3,447.6 (1) 4.33 % 1,062.9 4.41 % 2027 2,835.9 2.85 % — — 2028 2,501.0 3.19 % — — 2029 2,388.8 3.94 % — — Thereafter 12,313.9 4.07 % — — Total (2) $ 25,380.6 3.88 % $ 1,130.2 4.33 % Fair Value (3) $ 24,034.1 $ 1,130.2 (1) In January 2024, we entered into interest rate swaps on our 2023 term loans, which fixed our per annum interest rate at 4.9% until January 2026.
Added
Expected Maturity Data The following table summarizes the maturity of our debt as of December 31, 2025 (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 $ — $ 12.0 $ 2,375.0 $ 2,387.0 $ — $ — $ 516.8 $ 2,903.8 4.09% 2.34% 2027 500.0 22.3 2,374.5 2,896.8 823.5 — — 3,720.3 2.80 4.07 2028 1,211.0 1.3 2,499.8 3,712.1 — — — 3,712.1 3.72 — 2029 — 1.3 2,820.3 2,821.6 501.1 182.0 — 3,504.7 3.96 3.86 2030 — 1.0 2,472.3 2,473.3 — — — 2,473.3 3.73 — Thereafter — — 12,801.9 12,801.9 — — — 12,801.9 4.15 — Total (1) $ 1,711.0 $ 37.9 $ 25,343.8 $ 27,092.7 $ 1,324.6 $ 182.0 $ 516.8 $ 29,116.1 3.88% 3.55% Fair Value (2) $ 1,711.0 $ 37.6 $ 24,647.5 $ 26,396.1 $ 1,324.6 $ 182.0 $ 516.8 $ 28,419.5 (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.
Removed
(2) Excludes net premiums and discounts recorded on mortgages payable, net premiums and discounts recorded on notes payable, and deferred financing costs on term loans, mortgages payable, notes payable.
Added
The weighted average interest rates reflect the effective fixed rate for floating rate debt that is fixed through interest rate swaps.
Added
(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.
Added
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. The table above incorporates only those exposures that exist as of December 31, 2025. It does not consider those exposures or positions that could arise after that date.

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