8-KRegulation FDExhibits & Filings

REALTY INCOME CORP 8-K Report, Regulation FD Disclosure (Oct 6, 2011)

Filed October 6, 2011For Securities:O

Summary

Realty Income Corporation (O) reported significant third-quarter 2011 investment activity, deploying approximately $462 million across 89 properties. These new acquisitions are diversified across 15 states and leased to nine tenants in seven industries, boasting an initial average lease yield of 8.1%. This robust investment pace positions the company to likely exceed its full-year 2011 acquisition target of $850 million, with an anticipated average lease yield of 8.0% for the year. Furthermore, the company addressed the Chapter 11 bankruptcy filing of one of its tenants, Friendly Ice Cream Corporation. While Friendly's leases 121 properties, representing 3.6% of rental revenue, only 15 leases were rejected. Realty Income anticipates minimal impact on its operations and dividend payment capacity, with most properties expected to remain leased and vacated spaces available for re-leasing. The press release also included updated 2011 and 2012 earnings guidance.

Key Highlights

  • 1Invested approximately $462 million in 89 properties during Q3 2011.
  • 2New acquisitions are 100% leased to nine tenants across seven industries.
  • 3Initial average lease yield on Q3 acquisitions was approximately 8.1%.
  • 4Company anticipates exceeding $850 million in real estate portfolio acquisitions for 2011.
  • 5Average lease yield for 2011 acquisitions is projected to be around 8.0%.
  • 6Tenant Friendly Ice Cream Corporation filed for Chapter 11 bankruptcy, rejecting leases on only 15 of 121 properties.
  • 7Minimal impact is expected from the Friendly's bankruptcy filing on company operations and dividend.

Frequently Asked Questions

Realty Income invested approximately $462 million in 89 properties during the third quarter of 2011. These properties are located in 15 states and are 100% leased to nine tenants across seven different industries, with an initial average lease yield of approximately 8.1%.

Friendly Ice Cream Corporation, a tenant leasing 121 properties (representing 3.6% of rental revenue), filed for Chapter 11 bankruptcy. However, they only rejected leases on 15 properties. Realty Income expects the majority of properties to remain under lease and anticipates no material impact on its operations or its ability to pay and increase monthly dividends. Vacated properties will be available for re-leasing.

The company anticipates that its real estate portfolio acquisitions for 2011 will exceed $850 million. The initial average lease yield for these projected full-year acquisitions is estimated to be approximately 8.0%.

Yes, as part of the press release announcing these updates, Realty Income included its 2011 and 2012 earnings guidance.