John Case, president and CEO of Realty Income Corp. (NYSE: O), joined REIT.com for a CEO Spotlight video interview at REITWorld 2014: NAREIT’s Annual Convention for All Things REIT at the Atlanta Marriott Marquis.
Realty Income, which pays its shareholders a monthly dividend, owns commercial properties in 49 states and Puerto Rico. Case highlighted Realty Income’s 45-year history of paying a dividend. Since the company went public in 1994, Realty Income has increased its dividend every year at a compounded average annual growth rate of close to 5 percent, Case said.
Most of the decisions within the business “are based upon the sustainability and durability of that dividend. It guides all of our investment principles,” he noted.
Case also gave an overview of the company’s acquisition platform. The acquisition market continues to be very active, according to Case, noting that Realty Income has sourced $21 billion in acquisition opportunities in 2014. Of that amount, $1.24 billion in acquisitions have been closed at a yield of 7.1 percent. For 2014 as a whole, Case said the company expects to close on approximately $1.4 billion in acquisitions, making this year the company’s second most active year in its history for closed acquisitions.
Meanwhile, Case explained how Realty Income’s portfolio appeals to the driving demographic force of the baby boomer generation. Two of Realty Income’s biggest tenants are club stores and dollar stores, which offer affordable products geared toward consumers who live on fixed incomes, Case said. Realty Income’s third-largest tenant category is drug stores, a retail sector that is actively used by the baby boomer generation.
At the same time, the smaller footprint of many of the company’s retail tenants is easier for the baby boomers to navigate, according to Case.