Realty Income Corporation

From Wikipedia, the free encyclopedia
Jump to: navigation, search
Realty Income Corporation
Public (NYSEO)
Genre Real Estate/Finance
Founded 1969
Area served
Key people
John P. Case, CEO[1]
Revenue $ 933.5 million (2014).[2]
Slogan The Monthly Dividend Company

Realty Income Corporation (NYSEO) is a real estate investment trust known as "The Monthly Dividend Company" for its practice of paying investor dividends on a monthly rather than quarterly basis. It is chartered in the state of Maryland and has its headquarters in San Diego, California. As of December 31, 2014, the company owns over 4,300 commercial real estate properties in 49 states, with a total market capitalization of approximately $16.1 billion.[2] In March 2015, the company was added to the S&P 500.[3]


Realty Income Corporation was founded in 1969 by William E. Clark and Evelyn J. Clark.[4] Its first acquisition was a Taco Bell restaurant in early 1970. Initially, the company focused on acquiring properties from the Clarks’ development company, which engaged in land acquisition, construction, leasing, and sales of fast food restaurant properties.[5] The company used cash to purchase the land needed for stores that required real estate to run, and then leased the property to the stores long term. The company did not use mortgages, and focused on picking chain stores and restaurants that had positive long-term prospects in terms of staying open.[6]

By 1992 the company had formed 22 partnerships, which controlled 628 properties and involved 68,000 individual partners. In 1994, Realty Income Corporation merged its various partnerships into a publicly traded company, listed on the New York Stock Exchange with the single letter "O" as its symbol. The company did not issue an IPO, but rather rolled all of its partnerships into one entity and issued stock to its partnership base. Only a few hundred partners chose not to participate.[7] William E. Clark, Jr., retired as CEO in 1997, succeeded by Thomas A. Lewis, who was in turn succeeded by John Case in 2013. Clark remained as chairman until 2009 and was followed by Donald R. Cameron and then Michael D. McKee who is the current Chairman of the Board.[8][9] In 2010 the company expanded its real estate holdings to include wineries in the Napa Valley.[10]

In 2012, the company announced the acquisition of American Realty Capital Trust (NASDAQ:ARCT) for $1.9B.[11] The deal closed in January 2013.[12]

Realty Income saw its 2013 revenues rise more than 61.2% as compared to 2012.[13] In 2015 the company was included on the S&P High Yield Dividend Aristocrats Index, for boosting its dividend 79 times over twenty years, and in seventy consecutive quarters.[14] In March 2015, the company was added to the S&P 500.[15]

The Monthly Dividend Company[edit]

The Monthly Dividend Company is a trademarked slogan used to describe Realty Income's business model. In 2002, Realty Income Corporation received a registered trademark for the phrase, "The Monthly Dividend Company," emphasizing its practice of paying investor dividends on a monthly, rather than quarterly, basis. As of February 2015, it has paid 535 dividends in the 46 years since its founding in 1969, and has increased the dividend 79 times since the company was listed on the NYSE in 1994, with total payouts to shareholders exceeding $3.3 billion.[16] The dividends are supported by the cash flow from the company's long-term lease agreements.[17]

Properties and Portfolio Management[edit]

The company primarily acquires commercial properties that are freestanding, single-tenant locations, and that are leased to regional and national commercial enterprises under long-term net-lease agreements. Types of properties owned include theaters, fitness clubs,[18] convenience/gas stations, and distribution centers leased to tenants like Fed Ex. As of its February 2015 Form 10-K filing, the company owned 4,327 properties in 49 states with over 70.7 million square feet of leasable space. The company’s portfolio management strategy includes seeking contractual rent increases on existing leases, rent increases at the termination of existing leases (market permitting), and active management of portfolio properties.[2] In January 2013 Realty Income Corporation acquired American Realty Capital Trust, a publicly traded REIT founded by Nicholas Schorsch, for $3.2 billion.[19][20] The enterprise value of Realty Income at that time increased to $12.4 billion with an equity market capitalization of $8.4 billion.[21]

Ratings and Awards[edit]

Realty Income Corporation was listed by Forbes Magazine as one of the "100 Most Trustworthy Companies" for 2009.[22] It was also named to the list of Mergent Dividend Achievers beginning in 2005. It has earned investment grade credit ratings from Moody’s Investor Services, Standard & Poors, and Fitch Rating Agency.[23]

See also[edit]


  1. ^ "John P. Case profile". Businessweek. Retrieved February 20, 2014. 
  2. ^ a b c "Realty Income Corporation Form 10K for FY 2013". Securities and Exchange Commission. Retrieved February 20, 2014. 
  3. ^
  4. ^ "Realty Income Corp · 424B5 · On 5/2/97". Retrieved May 7, 2013. 
  5. ^ "Spotlight on Realty Income Corporation". Retrieved May 7, 2013. 
  6. ^ Eric Wolff (December 8, 2010). "REAL ESTATE: Local company ready to reap the bubble's remains". Union-Tribune San Diego. Retrieved May 7, 2013. 
  7. ^ John McCloud (July 1, 1998). "Realty Income stands tall with freestanding holdings". Retrieved May 7, 2013. 
  8. ^ "Realty Income Corp (O:New York)". Bloomberg Businessweek. Retrieved March 29, 2012. 
  9. ^ "REalty Income Names New CEO". September 3, 2013. Retrieved August 20, 2014. 
  10. ^ Kevin McCallum (June 24, 2010). "Iconic Napa wineries part of $269 million sale-lease deal". Press Democrat. Retrieved May 7, 2013. 
  11. ^ "Realty Income to Acquire American Realty for $1.9 Billion". 2012-09-06. Retrieved 2014-11-13. 
  12. ^ "Realty Income Closes American Realty Capital Trust" (PDF). 2013-01-22. Retrieved 2014-11-13. 
  13. ^ "Realty Income Reports Record Results for 1st Quarter". San Diego Business Journal. April 29, 2013. Retrieved May 7, 2013. 
  14. ^ Charles Sizemore (February 22, 2015). "Another Solid (And Boring) Quarter From The Most Predictable Stock On Wall Street". Forbes Magazine. Retrieved March 26, 2015. 
  15. ^
  16. ^ "Realty Income Corporation Dividend History". NASDAQ. Retrieved February 20, 2014. 
  17. ^ Brad Thomas (May 10, 2012). "Insider Q&A With CEO of a Dividend Powerhouse". The Street. Retrieved May 7, 2013. 
  18. ^ Mike Freeman (October 28, 2010). "Realty Income Buys Two Napa Wineries". Union Tribute San Diego. Retrieved May 7, 2013. 
  19. ^ Brian Louis (September 6, 2012). "Realty Income to Acquire American Realty for $1.9 Billion". Bloomberg. Retrieved March 7, 2013. 
  20. ^ "Google Finance". Retrieved February 20, 2014. 
  21. ^ "Shareholders Approve $3 Billion Acquisition By Realty Income". San Diego Business Journal. January 17, 2013. Retrieved March 7, 2013. 
  22. ^ "". 2009-04-02. Retrieved 2011-11-30. 
  23. ^ "Fast Facts" (PDF). Retrieved March 7, 2013. 

External links[edit]