Realty Income Corporation

From Wikipedia, the free encyclopedia
Jump to: navigation, search
Realty Income Corporation
Type Public (NYSEO)
Genre Real Estate/Finance
Founded 1969
Headquarters Escondido, California, USA
Area served Nationwide
Key people John P. Case, CEO[1]
Revenue $ 778.4 million (2013).[2]
Website www.realtyincome.com

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 Escondido, California. As of January 2014, the company owns over 3,800 commercial real estate properties in 49 states, with total assets of approximately $12.6 billion and net income of $203.6 million.[2]

History[edit]

Realty Income Corporation was founded in 1969 by William E. Clark and Evelyn J. Clark.[3] 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.[4] 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.[5]

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.[6] William E. Clark, Jr., retired as CEO in 1997, succeeded by Thomas A. Lewis. 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.[7] In 2010 the company expanded its real estate holdings to include wineries in the Napa Valley.[8] In 2013 Realty Income saw its revenues rise more than 61.2% as compared to 2012.[9]

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 December 2013, it has paid 521 dividends in the 45 years since its founding in 1969, and has increased the dividend 74 times since the company was listed on the NYSE in 1994, with total payouts to shareholders exceeding $2.7 billion.[10] The dividends are supported by the cash flow from the company's long-term lease agreements.[11]

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,[12] convenience/gas stations, and distribution centers leased to tenants like Fed Ex. As of its February 2014 Form 10-K filing, the company owned 3,896 properties in 49 states with over 62.6 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 September 2012 Realty Income Corporation moved to acquire American Realty Capital Trust, a publicly traded REIT founded by Nicholas Schorsch, for $1.9 billion; the acquisition was completed in January 2013.[13][14] The total value of the transaction was set at about $3.2 billion by the end of January 2013, increasing the enterprise value of Realty Income at that time to $12.4 billion with an equity market capitalization of $8.4 billion.[15]

Ratings and Awards[edit]

Realty Income Corporation was listed by Forbes Magazine as one of the “100 Most Trustworthy Companies” for 2009. [16] 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.[17]

See also[edit]

References[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. ^ "Realty Income Corp · 424B5 · On 5/2/97". Retrieved May 7, 2013. 
  4. ^ "Spotlight on Realty Income Corporation". Retrieved May 7, 2013. 
  5. ^ Eric Wolff (December 8, 2010). "REAL ESTATE: Local company ready to reap the bubble's remains". Union-Tribune San Diego. Retrieved May 7, 2013. 
  6. ^ John McCloud (July 1, 1998). "Realty Income stands tall with freestanding holdings". Retrieved May 7, 2013. 
  7. ^ "Realty Income Corp (O:New York)". Bloomberg Businessweek. Retrieved March 29, 2012. 
  8. ^ Kevin McCallum (June 24, 2010). "Iconic Napa wineries part of $269 million sale-lease deal". Press Democrat. Retrieved May 7, 2013. 
  9. ^ "Realty Income Reports Record Results for 1st Quarter". San Diego Business Journal. April 29, 2013. Retrieved May 7, 2013. 
  10. ^ "Realty Income Corporation Dividend History". NASDAQ. Retrieved February 20, 2014. 
  11. ^ Brad Thomas (May 10, 2012). "Insider Q&A With CEO of a Dividend Powerhouse". The Street. Retrieved May 7, 2013. 
  12. ^ Mike Freeman (October 28, 2010). "Realty Income Buys Two Napa Wineries". Union Tribute San Diego. Retrieved May 7, 2013. 
  13. ^ Brian Louis (September 6, 2012). "Realty Income to Acquire American Realty for $1.9 Billion". Bloomberg. Retrieved March 7, 2013. 
  14. ^ "Google Finance". Retrieved February 20, 2014. 
  15. ^ "Shareholders Approve $3 Billion Acquisition By Realty Income". San Diego Business Journal. January 17, 2013. Retrieved March 7, 2013. 
  16. ^ "Forbes.com". 2009-04-02. Retrieved 2011-11-30. 
  17. ^ "Fast Facts". Retrieved March 7, 2013. 

External links[edit]