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Realty Income Corp O

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Realty Income's Q4 Results in Line With Expectations; 2021 Guidance Implies Rebound in Operations

Kevin Brown Equity Analyst

Analyst Note

| Kevin Brown |

Operations for Realty Income in the fourth quarter were in line with our expectations. As a result, we are maintaining our $65 fair value estimate for the no-moat company. Economic occupancy fell another 20 basis points sequentially to 98.3%, though re-leasing spreads rebounded to positive territory, up 30 basis points in the fourth quarter. Rent collection has stabilized at 93.6% for the quarter with no month more than 10 basis points off that figure. Tenants in the theater segment, which represents 5.6% of all contractual rents, are still struggling and are responsible for most of the uncollected rent in the quarter. Same-store revenue was down 3.2% year over year in the fourth quarter, though that is an improvement from the 4.4% decline in the third quarter. Due to the drop in same-store operations, adjusted funds from operations were down 2.8% year over year to $0.83 per share in the fourth quarter but up 1.5% over the third quarter's figure.

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Company Profile

Business Description

Realty Income owns roughly 6,500 properties, most of which are freestanding, single-tenant, triple-net-leased retail properties. Its properties are located in 49 states and Puerto Rico and are leased to 250 tenants from 47 industries. Recent acquisitions have added industrial, office, manufacturing, and distribution properties, which make up roughly 18% of revenue.

11995 El Camino Real
San Diego, CA, 92130
T +1 858 284-5000
Sector Real Estate
Industry REIT - Retail
Most Recent Earnings Dec 31, 2020
Fiscal Year End Dec 31, 2020
Stock Type Hard Assets
Employees 210