- 2025 AFFO Performance Full-year AFFO per share reached $4.28, with Q4 at $1.08, reflecting consistent cash flow stability.
- Capital Deployment $6.3 billion invested in 2025 (7.3% initial cash yield), including a $800 million Las Vegas CityCenter equity stake and $1.5 billion GIC joint venture for industrial build-to-suit projects.
- Capital Raising Success Launched a debut open-end fund, securing $1.5 billion in third-party equity from 40+ institutional investors, enhancing capital flexibility.
- 2026 Guidance Targets $8 billion in investments and $4.38–$4.42 AFFO/share, with 150–155 bps spread expectation and $740 million in dispositions.
Investment Strategy and Portfolio Quality
The company continued to diversify its portfolio, investing across various channels, including Europe, the U.S., and its partnership with Blackstone. Notably, it made an $800 million perpetual preferred equity investment in Las Vegas CityCenter. The company also sold 425 properties for approximately $744 million, enhancing portfolio quality. Additionally, Realty Income expanded into Mexico alongside GIC and Hines, marking a strategic entry into a new market.
Capital Raising and Partnerships
On the capital raising front, Realty Income launched its debut open-end fund, raising over $1.5 billion in third-party equity from over 40 institutional investors. The company also formed a programmatic joint venture with GIC, a sovereign wealth fund, with an initial commitment of $1.5 billion for net lease investments. These partnerships are expected to contribute to the company's growth and create pathways for recurring compounding growth over time.
Guidance and Outlook
For 2026, the company guides for AFFO per share of $4.38 to $4.42 and $8 billion in investments. The guidance assumes healthy underlying portfolio fundamentals, credit-related losses of 40 to 50 basis points, and lease termination income of $30 million to $40 million. The company's growth strategy over the next 3 to 5 years involves leveraging its size and scale to achieve a growth profile commensurate with its historical average.
Valuation and Metrics
With a P/E Ratio of 56.4 and a Dividend Yield of 4.89%, Realty Income's valuation reflects its stable cash flows and growth prospects. The company's ROE of 2.7% and ROIC of 24.52% indicate its ability to generate returns on its investments. Analysts estimate next year's revenue growth at 6.3%, which is expected to be driven by the company's continued investment activity and portfolio quality.