Realty Income Q3 AFFO per Share Rises to $1.12

Realty Income Corp. (NYSE: O) reported higher third-quarter 2026 earnings and adjusted funds from operations, supported by revenue growth and an expanding global property portfolio, while the real estate investment trust continued to diversify its funding through private-capital partnerships and joint ventures.

AFFO, a non-GAAP measure commonly used by REITs, rose to $1.06 billion from $994.3 million a year earlier. Diluted AFFO per share increased 3.7% to $1.12 from $1.08, as growth in total AFFO outpaced an increase in the weighted-average diluted share count to 948.8 million from 917.9 million.

Net income available to common stockholders climbed to $403.9 million from $315.8 million in the third quarter of 2025. Total revenue excluding reimbursements increased 9.3% to $1.52 billion, including rental revenue excluding reimbursements of $1.38 billion and other revenue of $137.8 million.

Adjusted EBITDA rose to $1.45 billion from $1.31 billion, while the non-GAAP adjusted EBITDA margin widened to 95.4% from 94.3%. The quarter included $111.6 million of real estate impairment provisions, compared with $75.4 million a year earlier, and a $113.9 million gain on property sales, up from $49.1 million.

Portfolio Remains Highly Occupied

Realty Income ended September with 15,536 properties covering about 357 million square feet and serving 1,842 clients across 96 industries. Portfolio occupancy was 98.8%, and annualized base rent totaled approximately $5.4 billion. The weighted-average remaining lease term was 8.5 years, with only 0.7% of annualized base rent scheduled to expire during the remainder of 2026.

Retail properties generated 77% of annualized base rent, followed by industrial assets at 17%, gaming at 3%, other properties at 2% and data centers at 1%. The United States accounted for 79.6% of annualized base rent, the United Kingdom contributed 15.1% and continental Europe represented 5.3%.

The company reported a 103% rent recapture rate on third-quarter re-leasing activity. From 2020 through the third quarter of 2026, renewals achieved approximately 104% recapture, while properties leased to new clients recorded about 107%.

Realty Income deployed $6.9 billion of capital during the first nine months of 2026 after sourcing $122.3 billion of potential transactions, implying that it completed about 6% of the volume reviewed. International markets have become a larger part of the platform: the company invested $2.6 billion in Europe during the period and now owns 696 properties across the U.K. and continental Europe. Those assets produce roughly $1.1 billion of annualized base rent, or about 20% of the total.

Private Capital Broadens Funding Options

Management is emphasizing Realty Income Investment Management, its private-capital platform, as a way to generate recurring management fees, access investments with different return profiles and reduce reliance on public equity issuance. The platform includes funds, strategic joint ventures and separately managed mandates.

The company said its U.S. Core Plus Fund has raised $1.7 billion of equity. It also formed strategic partnerships with Apollo and KKR during 2026, generating $1.0 billion and €528 million of equity proceeds, respectively. Realty Income retains 51% ownership in each joint venture and receives management fees on the ventures’ assets.

Realty Income is also extending its net-lease model into data centers through a programmatic joint venture with Cloud Capital. The partnership has a transaction value of more than $6 billion and initially includes three Northern Virginia data-center assets that are leased or pre-leased to investment-grade hyperscale tenants. Realty Income holds a 45% interest and expects to invest up to $1.4 billion of equity over time as the assets stabilize, subject to approvals, closing conditions and development milestones.

The company’s other capital initiatives during the year included two convertible bond issuances totaling about $1.86 billion, a municipal prepayment transaction and expanded revolving-credit and commercial-paper capacity.

Leverage Holds at 5.4 Times

Net debt totaled $31.37 billion at September 30, up from $28.26 billion a year earlier. Net debt to annualized pro forma adjusted EBITDAre was 5.4 times, unchanged from the second quarter and compared with 5.3 times in the prior-year period. Fixed-charge coverage was 4.6 times.

About 97.1% of debt was unsecured and 94.4% carried fixed rates, with a weighted-average term to maturity of 5.1 years. Realty Income had approximately $1.8 billion outstanding under its revolving-credit facilities and commercial-paper programs at quarter-end. Its long-term unsecured debt ratings were A3 from Moody’s, A- from S&P and A from Fitch, all with stable outlooks.

Realty Income had declared 676 consecutive monthly dividends as of October 2026 and set its annualized dividend at $3.258 per share. The company has increased its dividend in each of its more than 32 years as a publicly traded company.

The presentation did not provide new earnings guidance. Management’s plans depend on access to debt, public equity and private capital, as well as the execution of acquisitions, developments and joint ventures. Realty Income also identified interest-rate and currency fluctuations, inflation, tenant defaults or bankruptcies, real estate impairments, development and joint-venture risks, and changing economic or capital-market conditions as factors that could cause results to differ from current expectations.