Realty Income Deploys $2.8B in Q1 2026, Forms $1.0B Apollo Retail Joint Venture

SAN DIEGO — Realty Income Corp (NYSE: O) reported $2.8 billion in total investments for the three months ended March 31, 2026, including the formation of a strategic partnership with Apollo Global Management involving an initial $1.0 billion investment in an existing portfolio of Realty Income retail assets, as the net lease real estate investment trust posted a 6.6% year-over-year increase in adjusted funds from operations per share and raised its full-year investment guidance, the company announced May 6, 2026.

The results reflect continued momentum in commercial real estate acquisition activity and an accelerating push by the San Diego-based REIT to diversify its capital sources beyond public equity markets.

Q1 2026 Financial Results

Realty Income reported total revenue of $1.548 billion for the first quarter of 2026, up from $1.381 billion in the same period a year earlier. Net income available to common stockholders was $311.8 million, or $0.33 per diluted share, compared to $249.8 million, or $0.28 per share, in Q1 2025.

Adjusted funds from operations (AFFO), a key non-GAAP metric for net lease REITs, reached $1.057 billion, or $1.13 per share, representing a 6.6% increase from $1.06 per share in the prior-year period. Funds from operations (FFO) totaled $993.6 million, or $1.06 per share, compared to $937.7 million, or $1.05 per share, in Q1 2025.

Net debt to annualized pro forma adjusted EBITDAre stood at 5.2x as of March 31, 2026.

Based on the quarter's results, the company raised its full-year 2026 AFFO per share guidance range to $4.41 to $4.44, reflecting projected annual per share growth of 3.0% to 3.7%. Full-year investment guidance was increased to $9.5 billion from a prior target of $8 billion.

"Our first quarter results underscore the strength and resiliency of our global investment and operating platforms," said Sumit Roy, Realty Income's Chief Executive Officer. "Importantly, we demonstrated significant progress towards a key strategic goal of diversifying our sources of permanent equity beyond the public markets. These new private capital vehicles allow us to grow with deep and stable pockets of capital, enhancing our financial returns for shareholders and expanding our ability to invest in an ever-broadening range of high-quality net lease opportunities and geographies."

Apollo Retail Joint Venture and Private Capital Strategy

Among the quarter's headline transactions was the formation of a strategic partnership with Apollo, involving an initial $1.0 billion investment in an existing portfolio of Realty Income retail assets. The partnership represents a component of the company's stated strategy to access private institutional capital as a complement to public market equity issuance.

The Apollo partnership was announced alongside a separate partnership with GIC and the completion of a $1.7 billion cornerstone capital raise for Realty Income's U.S. Core Plus fund during the quarter.

"The partnerships with Apollo and GIC, together with the completion of the $1.7 billion cornerstone capital raise for our U.S. Core Plus fund during the quarter, represent very meaningful advancements in our private capital strategy and establish new programmatic capital relationships with leading institutions," Roy said.

Commercial Real Estate Investment Activity

Realty Income's $2.8 billion in total Q1 2026 investments — with a pro-rata share of $2.6 billion — spanned real estate acquisitions, development projects, and other investments including loans across the U.S. and Europe, at an initial weighted average cash yield of 7.1%.

Real estate acquisitions totaled $1.580 billion (pro-rata: $1.433 billion) across 152 properties, at an initial weighted average cash yield of 6.7% and a weighted average lease term of 8.3 years. The acquisition mix by cash income was 63.9% retail, 33.6% industrial, and 2.5% other property types. Approximately 41% of annualized cash income from acquired properties came from investment-grade-rated clients.

Properties under development totaled $155.8 million (pro-rata: $155.2 million) across 42 properties, at an initial weighted average cash yield of 7.4% and a weighted average lease term of 12.4 years. Other investments — primarily loans across the U.S. and Europe and construction loans in Mexico related to the GIC partnership — totaled $1.032 billion at a 7.8% initial weighted average cash yield.

U.S. and other investment volume reached $1.334 billion at a 7.3% initial weighted average cash yield, while European volume totaled $1.286 billion at a 7.0% yield.

The company sold 97 properties during the quarter, generating net sales proceeds of $188.0 million and a gain on sales of real estate of $35.6 million.

Portfolio Metrics and Occupancy

As of March 31, 2026, Realty Income owned or held interests in 15,571 properties leased to 1,786 clients across 92 industries. The portfolio carried a weighted average remaining lease term of approximately 8.7 years and an occupancy rate of 98.9%, unchanged from December 31, 2025 and up from 98.5% as of March 31, 2025.

During the quarter, 320 leases expired. Of those, 220 were re-leased to the same client and 23 to new clients, while 78 properties were disposed of as vacant. The company achieved a rent recapture rate of 103.4% on re-leased units, with new annualized base rent of $73.3 million compared to $70.9 million on the same units under prior leases.

Same-store rental revenue for 14,738 properties increased 0.8% to $1.193 billion in Q1 2026 from $1.183 billion in Q1 2025, measured on a constant-currency basis.

Commercial Real Estate Financing and Capital Markets Activity

As of March 31, 2026, Realty Income reported total available liquidity of $3.9 billion at its pro-rata share, comprised of $388.4 million in cash and cash equivalents, $2.714 billion in revolving credit facility availability, and $1.218 billion in unsettled at-the-market (ATM) forward equity agreements, net of $414.9 million in commercial paper borrowings.

Subsequent to quarter-end, in April 2026, the company issued $800 million of 4.750% senior unsecured notes due April 2033, priced at 98.261% of par for an effective yield to maturity of 5.047%. In connection with the offering, Realty Income executed a $500 million U.S. Dollar-to-Euro seven-year cross-currency swap, resulting in approximately €436 million of proceeds and a blended coupon rate of approximately 4.16%.

As of May 6, 2026, approximately 23.6 million shares of common stock subject to ATM forward sale agreements remained unsettled, representing approximately $1.4 billion in expected net proceeds at a weighted average initial gross price of $60.33 per share.

In March 2026, Realty Income declared its 114th consecutive quarterly dividend increase — the 134th increase since its NYSE listing in 1994. The annualized dividend as of March 31, 2026 was $3.246 per share, with monthly dividends of $0.810 per share in Q1 2026, representing 71.7% of diluted AFFO per share.