Realty Income Corporation and Apollo announced that Apollo-managed funds and affiliates intend to provide a USD 1.0 billion investment to Realty Income to acquire a 49% interest in a new joint venture entity that is expected to own a diversified portfolio of single-tenant retail properties subject to long-term net leases. Realty Income will continue to manage the portfolio, which includes approximately 500 retail assets that benefit from stable, contractual cash flows and are supported by Realty Income's operating platform and long-standing asset management expertise. The joint venture represents a cornerstone component of Realty Income's private capital initiative, which is designed to diversify the Company's sources of capital and complement its access to the public equity markets.
Realty Income expects the long-term partnership with Apollo to provide a scalable source of equity to support investment activity in long-duration, stabilized assets, while maintaining balance sheet strength and financial flexibility. The transaction is expected to close on March 31, 2026, subject to finalization and execution of the documentation, and customary closing conditions. Under the terms of the transaction, Realty Income is expected to receive USD 1,000 million of gross proceeds in exchange for Apollo's acquisition of a 49% interest in a joint venture that indirectly owns a diversified net lease portfolio comprised entirely of single-tenant retail properties.
Realty Income will manage the properties under a long-term management agreement. Realty Income will retain the right to exercise a call option to redeem Apollo's equity interest after year 7 and through year 15 of the joint venture, with the future call price calculated to ensure a capped IRR of 6.875% to Apollo during its ownership period. Key portfolio metrics of the anticipated portfolio, as of December 31, 2025, are as follows: Number of U.S. retail properties: approximately 500; Cash annualized base rent: USD 140 million; Weighted average remaining lease term: 9.1 years; Investment grade exposure (as percentage of total portfolio base rent): 28%; Compound annual contractual growth rate: 1.0%; Top five industries: Dollar Stores (9.9%), Quick Service Restaurants (8.3%), Drug Stores (7.9%), Grocery (7.7%), Health & Fitness (7.5%).
Portfolio metrics are subject to finalization and may change based on the final composition of the portfolio.
