REALTY INCOME CORPORATION

Red flags

• The top 20 clients represented 35.8% of annualized base rent, while only 32.2% of total annualized base rent came from investment-grade clients, leaving meaningful exposure to tenant credit deterioration.
• Growth remains dependent on external capital: Realty Income raised $2.4 billion from common-stock issuance in 2025, had 12.6 million shares under forward-sale agreements for expected proceeds of approximately $708.5 million, and may issue up to 150.0 million shares under its new ATM program.
• Dividend growth is modest relative to the headline income profile: dividends per share increased 2.9% in 2025, to $3.2170 from $3.1255, despite five increases during the year.
• The loan portfolio expanded to $1.72 billion of principal with a $30.5 million allowance, including $1.25 billion of senior secured notes receivable; credit losses and valuation risk are higher than in a pure property-rent model.
• The company sold 425 properties for $744.0 million of net proceeds versus $6.3 billion of investments, underscoring the scale of capital required to sustain growth and the risk of unfavorable acquisition or disposition markets.