Realty Income CEO Sees Continued Acquisition Opportunities

John Case, CEO of Realty Income Corp. (NYSE: O), joined Nareit for a video interview at REITworld 2017.

Realty Income owns more than 5,000 properties, located throughout 49 states and Puerto Rico, which are leased to tenants under long-term net lease agreements.

Case said the company continues to find “really good” investment opportunities and is on target to acquire $1.5 billion in properties this year. The company has sourced about $24 billion in acquisition opportunities year to date and is closing on about 4 percent of those, he noted.

“We’re being very selective and focusing on quality,” Case said. Acquisitions growth is contributing to the 6 percent earnings per share growth that Realty Income is anticipating for 2017, he added.

Case said he expects the occupancy rate to remain at 98 percent into 2018. While the company is facing a rollover schedule of about 3.2 percent next year, “we think the quality of the portfolio will ensure that the occupancy remains high and that the releasing rates remain favorable,” he noted.

As for the threat of e-commerce, Case pointed out that the portfolio has fared well on both an absolute and relative basis.

Meanwhile, Case highlighted Realty Income’s access to attractively-priced capital as a key competitive advantage. It allows the company to focus on the highest quality net lease properties and create attractive investment spreads, he explained.