|
Maryland
|
|
33-0580106
|
|
|
(State or Other Jurisdiction of
Incorporation or Organization)
|
|
(IRS Employer Identification
Number)
|
|
Title of Each Class
|
Trading Symbol(s)
|
Name of Each Exchange On Which Registered
|
Common Stock, $0.01 Par Value
|
O
|
New York Stock Exchange
|
Large accelerated filer
|
☒
|
|
Accelerated filer
|
☐
|
|
Non-accelerated filer
|
☐
|
|
Smaller reporting company
|
☐
|
|
|
|
|
|
|
|
|
|
|
|
Emerging growth company
|
☐
|
|
|
|
|
|
|
|
|
|
Page
|
||
|
||
|
|
|
|
||
|
||
|
||
|
||
|
||
|
|
|
|
||
|
|
|
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
September 30, 2019
|
|
|
December 31, 2018
|
|
||
ASSETS
|
(unaudited)
|
|
|
|
|||
Real estate, at cost:
|
|
|
|
||||
Land
|
$
|
5,085,951
|
|
|
$
|
4,682,660
|
|
Buildings and improvements
|
13,062,209
|
|
|
11,858,806
|
|
||
Total real estate, at cost
|
18,148,160
|
|
|
16,541,466
|
|
||
Less accumulated depreciation and amortization
|
(3,017,204
|
)
|
|
(2,714,534
|
)
|
||
Net real estate held for investment
|
15,130,956
|
|
|
13,826,932
|
|
||
Real estate held for sale, net
|
15,770
|
|
|
16,585
|
|
||
Net real estate
|
15,146,726
|
|
|
13,843,517
|
|
||
Cash and cash equivalents
|
236,064
|
|
|
10,387
|
|
||
Accounts receivable
|
163,444
|
|
|
144,991
|
|
||
Lease intangible assets, net
|
1,313,798
|
|
|
1,199,597
|
|
||
Goodwill
|
14,503
|
|
|
14,630
|
|
||
Other assets, net
|
305,369
|
|
|
47,361
|
|
||
Total assets
|
$
|
17,179,904
|
|
|
$
|
15,260,483
|
|
|
|
|
|
||||
LIABILITIES AND EQUITY
|
|
|
|
||||
Distributions payable
|
$
|
74,735
|
|
|
$
|
67,789
|
|
Accounts payable and accrued expenses
|
163,154
|
|
|
133,765
|
|
||
Lease intangible liabilities, net
|
326,172
|
|
|
310,866
|
|
||
Other liabilities
|
260,357
|
|
|
127,109
|
|
||
Line of credit payable
|
—
|
|
|
252,000
|
|
||
Term loans, net
|
498,936
|
|
|
568,610
|
|
||
Mortgages payable, net
|
282,053
|
|
|
302,569
|
|
||
Notes payable, net
|
6,256,400
|
|
|
5,376,797
|
|
||
Total liabilities
|
7,861,807
|
|
|
7,139,505
|
|
||
Commitments and contingencies
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Common stock and paid in capital, par value $0.01 per share, 740,200,000 shares authorized, 325,910,281 shares issued and outstanding as of September 30, 2019 and 370,100,000 shares authorized, 303,742,090 shares issued and outstanding as of December 31, 2018
|
12,294,138
|
|
|
10,754,495
|
|
||
Distributions in excess of net income
|
(2,987,120
|
)
|
|
(2,657,655
|
)
|
||
Accumulated other comprehensive loss
|
(13,599
|
)
|
|
(8,098
|
)
|
||
Total stockholders’ equity
|
9,293,419
|
|
|
8,088,742
|
|
||
Noncontrolling interests
|
24,678
|
|
|
32,236
|
|
||
Total equity
|
9,318,097
|
|
|
8,120,978
|
|
||
Total liabilities and equity
|
$
|
17,179,904
|
|
|
$
|
15,260,483
|
|
|
Three months ended September 30,
|
|
|
Nine months ended September 30,
|
|
||||||||||
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
||||
REVENUE
|
|
|
|
|
|
|
|
|
|
||||||
Rental (including reimbursable)
|
$
|
372,312
|
|
|
$
|
337,252
|
|
|
$
|
1,090,601
|
|
|
$
|
980,365
|
|
Other
|
1,935
|
|
|
829
|
|
|
3,461
|
|
|
4,897
|
|
||||
Total revenue
|
374,247
|
|
|
338,081
|
|
|
1,094,062
|
|
|
985,262
|
|
||||
|
|
|
|
|
|
|
|
||||||||
EXPENSES
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization
|
149,424
|
|
|
136,967
|
|
|
437,367
|
|
|
402,069
|
|
||||
Interest
|
73,410
|
|
|
69,342
|
|
|
215,918
|
|
|
195,385
|
|
||||
General and administrative
|
16,460
|
|
|
16,332
|
|
|
50,153
|
|
|
49,970
|
|
||||
Property (including reimbursable)
|
20,354
|
|
|
15,806
|
|
|
63,332
|
|
|
48,594
|
|
||||
Income taxes
|
1,822
|
|
|
1,302
|
|
|
4,422
|
|
|
3,733
|
|
||||
Provisions for impairment
|
13,503
|
|
|
6,862
|
|
|
31,236
|
|
|
25,034
|
|
||||
Total expenses
|
274,973
|
|
|
246,611
|
|
|
802,428
|
|
|
724,785
|
|
||||
Gain on sales of real estate
|
1,674
|
|
|
7,813
|
|
|
15,828
|
|
|
18,818
|
|
||||
Foreign currency and derivative gains, net
|
327
|
|
|
—
|
|
|
463
|
|
|
—
|
|
||||
Net income
|
101,275
|
|
|
99,283
|
|
|
307,925
|
|
|
279,295
|
|
||||
Net income attributable to noncontrolling interests
|
(226
|
)
|
|
(284
|
)
|
|
(740
|
)
|
|
(753
|
)
|
||||
Net income available to common stockholders
|
$
|
101,049
|
|
|
$
|
98,999
|
|
|
$
|
307,185
|
|
|
$
|
278,542
|
|
|
|
|
|
|
|
|
|
||||||||
Amounts available to common stockholders per common share:
|
|
|
|
|
|
|
|
||||||||
Net Income:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.32
|
|
|
$
|
0.34
|
|
|
$
|
0.99
|
|
|
$
|
0.97
|
|
Diluted
|
$
|
0.32
|
|
|
$
|
0.34
|
|
|
$
|
0.98
|
|
|
$
|
0.97
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
319,945,932
|
|
|
290,664,368
|
|
|
311,556,279
|
|
|
286,599,191
|
|
||||
Diluted
|
320,263,017
|
|
|
291,207,186
|
|
|
311,865,410
|
|
|
287,105,285
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Other comprehensive income:
|
|
|
|
|
|
|
|
||||||||
Net income available to common stockholders
|
$
|
101,049
|
|
|
$
|
98,999
|
|
|
$
|
307,185
|
|
|
$
|
278,542
|
|
Foreign currency translation adjustment
|
(359
|
)
|
|
—
|
|
|
(365
|
)
|
|
—
|
|
||||
Unrealized gain (loss) on derivatives, net
|
1,357
|
|
|
—
|
|
|
(5,136
|
)
|
|
—
|
|
||||
Comprehensive income available to common stockholders
|
$
|
102,047
|
|
|
$
|
98,999
|
|
|
$
|
301,684
|
|
|
$
|
278,542
|
|
|
|
Shares of
common stock |
|
|
Common
stock and paid in capital |
|
|
Distributions
in excess of net income |
|
|
Accumulated other comprehensive loss
|
|
|
Total
stockholders’ equity |
|
|
Noncontrolling
interests |
|
|
Total
equity |
|
||||||
Balance, June 30, 2019
|
|
318,218,713
|
|
|
$
|
11,722,036
|
|
|
$
|
(2,869,937
|
)
|
|
$
|
(14,597
|
)
|
|
$
|
8,837,502
|
|
|
$
|
25,092
|
|
|
$
|
8,862,594
|
|
Net income
|
|
—
|
|
|
—
|
|
|
101,049
|
|
|
—
|
|
|
101,049
|
|
|
226
|
|
|
101,275
|
|
||||||
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
998
|
|
|
998
|
|
|
—
|
|
|
998
|
|
||||||
Distributions paid and payable
|
|
—
|
|
|
—
|
|
|
(218,232
|
)
|
|
—
|
|
|
(218,232
|
)
|
|
(392
|
)
|
|
(218,624
|
)
|
||||||
Share issuances, net of costs
|
|
7,693,184
|
|
|
569,617
|
|
|
—
|
|
|
—
|
|
|
569,617
|
|
|
—
|
|
|
569,617
|
|
||||||
Redemption of common units
|
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
(901
|
)
|
|
(898
|
)
|
||||||
Reallocation of equity
|
|
—
|
|
|
(653
|
)
|
|
—
|
|
|
—
|
|
|
(653
|
)
|
|
653
|
|
|
—
|
|
||||||
Share-based compensation, net
|
|
(1,616
|
)
|
|
3,135
|
|
|
—
|
|
|
—
|
|
|
3,135
|
|
|
—
|
|
|
3,135
|
|
||||||
Balance, September 30, 2019
|
|
325,910,281
|
|
|
$
|
12,294,138
|
|
|
$
|
(2,987,120
|
)
|
|
$
|
(13,599
|
)
|
|
$
|
9,293,419
|
|
|
$
|
24,678
|
|
|
$
|
9,318,097
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance, June 30, 2018
|
|
290,024,275
|
|
|
$
|
9,925,543
|
|
|
$
|
(2,449,793
|
)
|
|
$
|
—
|
|
|
$
|
7,475,750
|
|
|
$
|
36,719
|
|
|
$
|
7,512,469
|
|
Net Income
|
|
—
|
|
|
—
|
|
|
98,999
|
|
|
—
|
|
|
98,999
|
|
|
284
|
|
|
99,283
|
|
||||||
Distributions paid and payable
|
|
—
|
|
|
—
|
|
|
(193,058
|
)
|
|
—
|
|
|
(193,058
|
)
|
|
(628
|
)
|
|
(193,686
|
)
|
||||||
Share issuances, net of costs
|
|
5,093,354
|
|
|
289,451
|
|
|
—
|
|
|
—
|
|
|
289,451
|
|
|
—
|
|
|
289,451
|
|
||||||
Redemption of common units
|
|
28,182
|
|
|
1,361
|
|
|
—
|
|
|
—
|
|
|
1,361
|
|
|
(1,361
|
)
|
|
—
|
|
||||||
Share-based compensation, net
|
|
(279
|
)
|
|
3,737
|
|
|
—
|
|
|
—
|
|
|
3,737
|
|
|
—
|
|
|
3,737
|
|
||||||
Balance, September 30, 2018
|
|
295,145,532
|
|
|
$
|
10,220,092
|
|
|
$
|
(2,543,852
|
)
|
|
$
|
—
|
|
|
$
|
7,676,240
|
|
|
$
|
35,014
|
|
|
$
|
7,711,254
|
|
|
|
Shares of
common stock |
|
|
Common
stock and paid in capital |
|
|
Distributions
in excess of net income |
|
|
Accumulated other comprehensive loss
|
|
|
Total
stockholders’ equity |
|
|
Noncontrolling
interests |
|
|
Total
equity |
|
||||||
Balance, December 31, 2018
|
|
303,742,090
|
|
|
$
|
10,754,495
|
|
|
$
|
(2,657,655
|
)
|
|
$
|
(8,098
|
)
|
|
$
|
8,088,742
|
|
|
$
|
32,236
|
|
|
$
|
8,120,978
|
|
Net income
|
|
—
|
|
|
—
|
|
|
307,185
|
|
|
—
|
|
|
307,185
|
|
|
740
|
|
|
307,925
|
|
||||||
Other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,501
|
)
|
|
(5,501
|
)
|
|
—
|
|
|
(5,501
|
)
|
||||||
Distributions paid and payable
|
|
—
|
|
|
—
|
|
|
(636,650
|
)
|
|
—
|
|
|
(636,650
|
)
|
|
(980
|
)
|
|
(637,630
|
)
|
||||||
Share issuances, net of costs
|
|
22,109,297
|
|
|
1,540,930
|
|
|
—
|
|
|
—
|
|
|
1,540,930
|
|
|
—
|
|
|
1,540,930
|
|
||||||
Issuance of common partnership units
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,286
|
|
|
6,286
|
|
||||||
Redemption of common units
|
|
—
|
|
|
(6,866
|
)
|
|
—
|
|
|
—
|
|
|
(6,866
|
)
|
|
(14,257
|
)
|
|
(21,123
|
)
|
||||||
Reallocation of equity
|
|
—
|
|
|
(653
|
)
|
|
—
|
|
|
—
|
|
|
(653
|
)
|
|
653
|
|
|
—
|
|
||||||
Share-based compensation, net
|
|
58,894
|
|
|
6,232
|
|
|
—
|
|
|
—
|
|
|
6,232
|
|
|
—
|
|
|
6,232
|
|
||||||
Balance, September 30, 2019
|
|
325,910,281
|
|
|
12,294,138
|
|
|
(2,987,120
|
)
|
|
$
|
(13,599
|
)
|
|
$
|
9,293,419
|
|
|
$
|
24,678
|
|
|
$
|
9,318,097
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance, December 31, 2017
|
|
284,213,685
|
|
|
$
|
9,624,264
|
|
|
$
|
(2,252,763
|
)
|
|
$
|
—
|
|
|
$
|
7,371,501
|
|
|
$
|
19,207
|
|
|
$
|
7,390,708
|
|
Net income
|
|
—
|
|
|
—
|
|
|
278,542
|
|
|
—
|
|
|
278,542
|
|
|
753
|
|
|
279,295
|
|
||||||
Distributions paid and payable
|
|
—
|
|
|
—
|
|
|
(569,631
|
)
|
|
—
|
|
|
(569,631
|
)
|
|
(1,457
|
)
|
|
(571,088
|
)
|
||||||
Share issuances, net of costs
|
|
10,761,688
|
|
|
587,566
|
|
|
—
|
|
|
—
|
|
|
587,566
|
|
|
—
|
|
|
587,566
|
|
||||||
Contributions by noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18,848
|
|
|
18,848
|
|
||||||
Redemption of common units
|
|
88,182
|
|
|
2,829
|
|
|
—
|
|
|
—
|
|
|
2,829
|
|
|
(2,829
|
)
|
|
—
|
|
||||||
Reallocation of equity
|
|
—
|
|
|
(492
|
)
|
|
—
|
|
|
—
|
|
|
(492
|
)
|
|
492
|
|
|
—
|
|
||||||
Share-based compensation, net
|
|
81,977
|
|
|
5,925
|
|
|
—
|
|
|
—
|
|
|
5,925
|
|
|
—
|
|
|
5,925
|
|
||||||
Balance, September 30, 2018
|
|
295,145,532
|
|
|
$
|
10,220,092
|
|
|
$
|
(2,543,852
|
)
|
|
$
|
—
|
|
|
$
|
7,676,240
|
|
|
$
|
35,014
|
|
|
$
|
7,711,254
|
|
|
Nine Months Ended
September 30,
|
||||||
|
2019
|
|
|
2018
|
|
||
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
||||
Net income
|
$
|
307,925
|
|
|
$
|
279,295
|
|
Adjustments to net income:
|
|
|
|
||||
Depreciation and amortization
|
437,367
|
|
|
402,069
|
|
||
Amortization of share-based compensation
|
10,478
|
|
|
12,527
|
|
||
Non-cash revenue adjustments
|
(6,508
|
)
|
|
(5,781
|
)
|
||
Amortization of net premiums on mortgages payable
|
(1,061
|
)
|
|
(1,167
|
)
|
||
Amortization of deferred financing costs
|
6,378
|
|
|
5,337
|
|
||
Loss (gain) on interest rate swaps
|
2,058
|
|
|
(3,064
|
)
|
||
Foreign currency and derivative gains, net
|
(463
|
)
|
|
—
|
|
||
Gain on sales of real estate
|
(15,828
|
)
|
|
(18,818
|
)
|
||
Provisions for impairment on real estate
|
31,236
|
|
|
25,034
|
|
||
Change in assets and liabilities
|
|
|
|
||||
Accounts receivable and other assets
|
(7,886
|
)
|
|
(1,540
|
)
|
||
Accounts payable, accrued expenses and other liabilities
|
14,010
|
|
|
(4,050
|
)
|
||
Net cash provided by operating activities
|
777,706
|
|
|
689,842
|
|
||
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
||||
Investment in real estate
|
(2,019,666
|
)
|
|
(1,437,377
|
)
|
||
Improvements to real estate, including leasing costs
|
(15,834
|
)
|
|
(22,432
|
)
|
||
Proceeds from sales of real estate
|
72,601
|
|
|
83,024
|
|
||
Insurance proceeds received
|
—
|
|
|
7,121
|
|
||
Collection of loans receivable
|
—
|
|
|
5,267
|
|
||
Non-refundable escrow deposits
|
(7,173
|
)
|
|
(3,275
|
)
|
||
Net cash used in investing activities
|
(1,970,072
|
)
|
|
(1,367,672
|
)
|
||
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
||||
Cash distributions to common stockholders
|
(629,658
|
)
|
|
(564,747
|
)
|
||
Borrowings on line of credit
|
1,619,282
|
|
|
1,670,000
|
|
||
Payments on line of credit
|
(1,871,282
|
)
|
|
(1,006,000
|
)
|
||
Principal payment on term loan
|
(70,000
|
)
|
|
(125,866
|
)
|
||
Proceeds from notes and bonds payable issued
|
895,774
|
|
|
497,500
|
|
||
Principal payment on notes payable
|
—
|
|
|
(350,000
|
)
|
||
Principal payments on mortgages payable
|
(19,495
|
)
|
|
(14,608
|
)
|
||
Proceeds from common stock offerings, net
|
845,061
|
|
|
—
|
|
||
Proceeds from dividend reinvestment and stock purchase plan
|
6,259
|
|
|
6,966
|
|
||
Proceeds from At-the-Market (ATM) program, net
|
689,641
|
|
|
588,860
|
|
||
Redemption of common units
|
(21,123
|
)
|
|
—
|
|
||
Distributions to noncontrolling interests
|
(1,027
|
)
|
|
(1,391
|
)
|
||
Debt issuance costs
|
(7,996
|
)
|
|
(4,436
|
)
|
||
Other items, including shares withheld upon vesting
|
(4,245
|
)
|
|
(14,862
|
)
|
||
Net cash provided by financing activities
|
1,431,191
|
|
|
681,416
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(607
|
)
|
|
—
|
|
||
Net increase in cash, cash equivalents and restricted cash
|
238,218
|
|
|
3,586
|
|
||
Cash, cash equivalents and restricted cash, beginning of period
|
21,071
|
|
|
12,142
|
|
||
Cash, cash equivalents and restricted cash, end of period
|
$
|
259,289
|
|
|
$
|
15,728
|
|
1.
|
Management Statement
|
A.
|
Lease intangible assets, net, consist of the following at:
|
September 30, 2019
|
|
|
December 31, 2018
|
|
||
|
In-place leases
|
$
|
1,439,816
|
|
|
$
|
1,321,979
|
|
|
Accumulated amortization of in-place leases
|
(613,053
|
)
|
|
(546,573
|
)
|
||
|
Above-market leases
|
677,257
|
|
|
583,109
|
|
||
|
Accumulated amortization of above-market leases
|
(190,222
|
)
|
|
(158,918
|
)
|
||
|
|
$
|
1,313,798
|
|
|
$
|
1,199,597
|
|
B.
|
Other assets, net, consist of the following at:
|
September 30, 2019
|
|
|
December 31, 2018
|
|
||
|
Right of use asset - operating leases, net
|
$
|
122,754
|
|
|
$
|
—
|
|
|
Financing receivables
|
54,022
|
|
|
—
|
|
||
|
Right of use asset - financing leases
|
36,901
|
|
|
—
|
|
||
|
Credit facility origination costs, net
|
12,339
|
|
|
14,248
|
|
||
|
Prepaid expenses
|
14,126
|
|
|
11,595
|
|
||
|
Derivative assets and receivables - at fair value
|
13,617
|
|
|
3,100
|
|
||
|
Impounds related to mortgages payable
|
11,751
|
|
|
9,555
|
|
||
|
Restricted escrow deposits
|
11,474
|
|
|
1,129
|
|
||
|
Value-added tax receivable
|
10,303
|
|
|
—
|
|
||
|
Non-refundable escrow deposits
|
7,173
|
|
|
200
|
|
||
|
Corporate assets, net
|
5,331
|
|
|
5,681
|
|
||
|
Other items
|
5,578
|
|
|
1,853
|
|
||
|
|
$
|
305,369
|
|
|
$
|
47,361
|
|
E.
|
Lease intangible liabilities, net, consist of the following at:
|
September 30, 2019
|
|
|
December 31, 2018
|
|
||
|
Below-market leases
|
$
|
434,771
|
|
|
$
|
404,938
|
|
|
Accumulated amortization of below-market leases
|
(108,599
|
)
|
|
(94,072
|
)
|
||
|
|
$
|
326,172
|
|
|
$
|
310,866
|
|
F.
|
Other liabilities consist of the following at:
|
September 30, 2019
|
|
|
December 31, 2018
|
|
||
|
Lease liability - operating leases, net
|
$
|
124,349
|
|
|
$
|
—
|
|
|
Rent received in advance and other deferred revenue
|
123,854
|
|
|
115,380
|
|
||
|
Security deposits
|
6,286
|
|
|
6,093
|
|
||
|
Lease liability - financing leases
|
5,868
|
|
|
—
|
|
||
|
Capital lease obligation
|
—
|
|
|
5,636
|
|
||
|
|
$
|
260,357
|
|
|
$
|
127,109
|
|
4.
|
Investments in Real Estate
|
|
Number of Properties
|
|
|
Square Feet
(in millions) |
|
|
Investment
($ in millions) |
|
|
Weighted Average Lease Term (Years)
|
|
Initial Average Cash Lease Yield
|
|
|
Nine months ended September 30, 2019 (1)
|
|
|
|
|
|
|
|
|
|
|||||
Acquisitions - U.S. (in 38 states)
|
214
|
|
|
6.2
|
|
|
$
|
1,412.9
|
|
|
15.7
|
|
6.5
|
%
|
Acquisitions - U.K. (2)
|
13
|
|
|
1.2
|
|
|
576.8
|
|
|
15.0
|
|
5.2
|
%
|
|
Total Acquisitions
|
227
|
|
|
7.4
|
|
|
1,989.7
|
|
|
15.5
|
|
6.1
|
%
|
|
Properties under Development - U.S.
|
14
|
|
|
0.4
|
|
|
36.0
|
|
|
16.0
|
|
7.4
|
%
|
|
Total (3)
|
241
|
|
|
7.8
|
|
|
$
|
2,025.7
|
|
|
15.5
|
|
6.2
|
%
|
(1)
|
None of our investments during 2019 caused any one tenant to be 10% or more of our total assets at September 30, 2019. All of our 2019 investments in acquired properties are 100% leased at the acquisition date.
|
(2)
|
Represents investments of £456.1 million during the nine months ended September 30, 2019 multiplied by the applicable exchange rate on the date of acquisition.
|
(3)
|
The tenants occupying the new properties operate in 19 industries, and are 89.6% retail and 10.4% industrial, based on rental revenue. Approximately 25% of the rental revenue generated from acquisitions during the first nine months of 2019 is from investment grade rated tenants and their subsidiaries.
|
|
Number of Properties
|
|
|
Square Feet
(in millions) |
|
|
Investment
($ in millions) |
|
|
Weighted Average Lease Term (Years)
|
|
Initial Average Cash Lease Yield
|
|
|
Nine months ended September 30, 2018 (1)
|
|
|
|
|
|
|
|
|
|
|||||
Acquisitions - U.S. (in 37 states)
|
580
|
|
|
3.2
|
|
|
$
|
1,395.7
|
|
|
14.6
|
|
6.3
|
%
|
Properties under Development - U.S.
|
11
|
|
|
1.1
|
|
|
69.7
|
|
|
10.9
|
|
6.8
|
%
|
|
Total (2)
|
591
|
|
|
4.3
|
|
|
$
|
1,465.4
|
|
|
14.4
|
|
6.3
|
%
|
(1)
|
All of our 2018 investments were 100% leased upon acquisition.
|
(2)
|
The tenants occupying the new properties operated in 20 industries, and the property types consisted of 96.1% retail and 3.9% industrial, based on rental revenue. Approximately 67% of the rental revenue generated from acquisitions during the first nine months of 2018 was from investment grade rated tenants and their subsidiaries.
|
|
Net
decrease to
rental revenue
|
|
Increase to
amortization
expense
|
|
||
2019
|
$
|
(5,497
|
)
|
$
|
26,439
|
|
2020
|
(21,304
|
)
|
102,681
|
|
||
2021
|
(20,145
|
)
|
94,527
|
|
||
2022
|
(18,603
|
)
|
82,915
|
|
||
2023
|
(17,175
|
)
|
72,497
|
|
||
Thereafter
|
(78,139
|
)
|
447,704
|
|
||
Totals
|
$
|
(160,863
|
)
|
$
|
826,763
|
|
5.
|
Credit Facility
|
6.
|
Term Loans
|
7.
|
Mortgages Payable
|
As Of
|
|
Number of
Properties (1)
|
|
Weighted
Average
Stated
Interest
Rate (2)
|
|
|
Weighted
Average
Effective
Interest
Rate (3)
|
|
|
Weighted
Average
Remaining
Years Until
Maturity
|
|
Remaining
Principal
Balance
|
|
|
Unamortized
Premium
and Deferred
Financing Costs
Balance, net
|
|
|
Mortgage
Payable
Balance
|
|
|||
9/30/2019
|
|
59
|
|
5.2
|
%
|
|
4.6
|
%
|
|
2.6
|
|
$
|
278,882
|
|
|
$
|
3,171
|
|
|
$
|
282,053
|
|
12/31/2018
|
|
60
|
|
5.1
|
%
|
|
4.6
|
%
|
|
3.2
|
|
$
|
298,377
|
|
|
$
|
4,192
|
|
|
$
|
302,569
|
|
(1)
|
At September 30, 2019, there were 25 mortgages on 59 properties. At December 31, 2018, there were 26 mortgages on 60 properties. The mortgages require monthly payments with principal payments due at maturity. At September 30, 2019, the mortgages were at fixed interest rates, except for one variable rate mortgage on one property totaling $7.1 million, which has been subsequently swapped to a fixed interest rate. At December 31, 2018, the mortgages were at fixed rates, except for two mortgages on two properties totaling $23.3 million. After factoring in arrangements which limit our exposure to interest rate risk and effectively fix our per annum interest rates, our mortgage debt subject to variable rates totaled $16.0 million at December 31, 2018.
|
Year of Maturity
|
|
Principal
|
|
|
2019
|
|
$
|
1.2
|
|
2020
|
|
82.4
|
|
|
2021
|
|
67.0
|
|
|
2022
|
|
109.7
|
|
|
2023
|
|
6.7
|
|
|
Thereafter
|
|
11.9
|
|
|
Totals
|
|
$
|
278.9
|
|
8.
|
Notes Payable
|
|
September 30, 2019
|
|
|
December 31, 2018
|
|
||
5.750% notes, issued in June 2010 and due in January 2021
|
$
|
250
|
|
|
$
|
250
|
|
3.250% notes, $450 issued in October 2012 and $500 issued in December 2017, both due in October 2022
|
950
|
|
|
950
|
|
||
4.650% notes, issued in July 2013 and due in August 2023
|
750
|
|
|
750
|
|
||
3.875% notes, issued in June 2014 and due in July 2024
|
350
|
|
|
350
|
|
||
3.875% notes, issued in April 2018 and due in April 2025
|
500
|
|
|
500
|
|
||
4.125% notes, $250 issued in September 2014 and $400 issued in March 2017, both due in October 2026
|
650
|
|
|
650
|
|
||
3.000% notes, issued in October 2016 and due in January 2027
|
600
|
|
|
600
|
|
||
3.650% notes, issued in December 2017 and due in January 2028
|
550
|
|
|
550
|
|
||
3.250% notes, issued in June 2019 and due in June 2029
|
500
|
|
|
—
|
|
||
2.730% notes, issued in May 2019 and due in May 2034 (1)
|
387
|
|
|
—
|
|
||
5.875% bonds, $100 issued in March 2005 and $150 issued in June 2011, both due in March 2035
|
250
|
|
|
250
|
|
||
4.650% notes, $300 issued in March 2017 and $250 issued in December 2017, both due in March 2047
|
550
|
|
|
550
|
|
||
Total principal amount
|
6,287
|
|
|
5,400
|
|
||
Unamortized net original issuance premiums and deferred financing costs
|
(31
|
)
|
|
(23
|
)
|
||
|
$
|
6,256
|
|
|
$
|
5,377
|
|
(1)
|
Represents the principal balance (in U.S. dollars) of the Sterling-denominated private placement of £315.0 million based on the applicable exchange rate on September 30, 2019.
|
Year of Maturity
|
|
Principal
|
|
|
2021
|
|
$
|
250
|
|
2022
|
|
950
|
|
|
2023
|
|
750
|
|
|
Thereafter
|
|
4,337
|
|
|
Totals
|
|
$
|
6,287
|
|
9.
|
Issuances of Common Stock
|
|
Three Months Ended September 30,
|
|
|
Nine Months Ended September 30,
|
|
|
Inception to Date
|
|
|||||||||||
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
|
|||||||
Shares of common stock issued under the DRSPP program
|
29,801
|
|
|
38,011
|
|
|
89,219
|
|
|
131,072
|
|
|
14,319,029
|
|
|||||
Gross proceeds
|
$
|
2.1
|
|
|
$
|
2.2
|
|
|
$
|
6.3
|
|
|
$
|
7.0
|
|
|
$
|
677.2
|
|
|
Three Months Ended September 30,
|
|
|
Nine Months Ended September 30,
|
|
||||||||||
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
||||
Shares of common stock issued under the ATM program
|
7,663,383
|
|
|
5,055,343
|
|
|
9,370,078
|
|
|
10,630,616
|
|
||||
Gross proceeds
|
$
|
570.3
|
|
|
$
|
290.9
|
|
|
$
|
694.4
|
|
|
$
|
588.9
|
|
|
Tau Operating
Partnership units (1)
|
|
|
Realty Income, L.P.
units (2)
|
|
|
Other
Noncontrolling
Interests
|
|
|
Total
|
|
||||
Carrying value at December 31, 2018
|
$
|
13,356
|
|
|
$
|
17,912
|
|
|
$
|
968
|
|
|
$
|
32,236
|
|
Reallocation of equity
|
—
|
|
|
653
|
|
|
—
|
|
|
653
|
|
||||
Redemptions
|
(13,356
|
)
|
|
—
|
|
|
(901
|
)
|
|
(14,257
|
)
|
||||
Shares issued in conjunction with acquisition
|
—
|
|
|
6,286
|
|
|
—
|
|
|
6,286
|
|
||||
Distributions
|
—
|
|
|
(904
|
)
|
|
(76
|
)
|
|
(980
|
)
|
||||
Allocation of net income
|
—
|
|
|
731
|
|
|
9
|
|
|
740
|
|
||||
Carrying value at September 30, 2019
|
$
|
—
|
|
|
$
|
24,678
|
|
|
$
|
—
|
|
|
$
|
24,678
|
|
|
September 30, 2019
|
|
|
December 31, 2018
|
|
||
Net real estate
|
$
|
617,517
|
|
|
$
|
2,903,093
|
|
Total assets
|
700,156
|
|
|
3,259,495
|
|
||
Total debt
|
—
|
|
|
191,565
|
|
||
Total liabilities
|
87,797
|
|
|
320,800
|
|
September 30, 2019
|
Carrying value
|
|
|
Estimated fair value
|
|
||
Mortgages payable assumed in connection with acquisitions (1)
|
$
|
278.9
|
|
|
$
|
289.5
|
|
Notes and bonds payable (2)
|
6,287.1
|
|
|
6,839.7
|
|
December 31, 2018
|
Carrying value
|
|
|
Estimated fair value
|
|
||
Mortgages payable assumed in connection with acquisitions (1)
|
$
|
298.4
|
|
|
$
|
305.7
|
|
Notes and bonds payable (2)
|
5,400.0
|
|
|
5,430.0
|
|
(1)
|
Excludes non-cash net premiums recorded on the mortgages payable. The unamortized balance of these net premiums was $3.3 million at September 30, 2019, and $4.4 million at December 31, 2018. Also excludes deferred financing costs of $143,000 at September 30, 2019 and $183,000 at December 31, 2018.
|
(2)
|
Excludes non-cash original issuance premiums and discounts recorded on notes payable. The unamortized balance of the net original issuance premiums was $6.6 million at September 30, 2019, and $10.5 million at December 31, 2018. Also excludes deferred financing costs of $37.3 million at September 30, 2019 and $33.7 million at December 31, 2018.
|
Derivative Type
|
Hedge Designation
|
Notional Amount
|
Strike
|
Effective Date
|
Maturity Date
|
Fair Value - asset (liability)
|
||||||||||
|
|
September 30,
|
December 31,
|
|
|
|
September 30,
|
December 31,
|
||||||||
|
|
2019
|
2018
|
|
|
|
2019
|
2018
|
||||||||
Interest rate swap
|
Cash flow
|
$
|
7.1
|
|
$
|
7.2
|
|
6.03%
|
09/25/2012
|
09/03/2021
|
$
|
(0.3
|
)
|
$
|
(0.2
|
)
|
Interest rate swap
|
Cash flow
|
250.0
|
|
250.0
|
|
1.72%
|
06/30/2015
|
06/30/2020
|
—
|
|
3.0
|
|
||||
Interest rate swap
|
Cash flow
|
250.0
|
|
250.0
|
|
3.04%
|
10/24/2018
|
03/24/2024
|
(17.4
|
)
|
(6.8
|
)
|
||||
Cross-currency swap (1)
|
Cash flow
|
41.6
|
|
—
|
|
(2)
|
05/20/2019
|
05/22/2034
|
2.9
|
|
—
|
|
||||
Cross-currency swap (1)
|
Cash flow
|
41.6
|
|
—
|
|
(3)
|
05/20/2019
|
05/22/2034
|
2.9
|
|
—
|
|
||||
Cross-currency swap (1)
|
Cash flow
|
41.6
|
|
—
|
|
(4)
|
05/20/2019
|
05/22/2034
|
2.4
|
|
—
|
|
||||
Cross-currency swap (1)
|
Cash flow
|
41.6
|
|
—
|
|
(5)
|
05/20/2019
|
05/22/2034
|
2.2
|
|
—
|
|
||||
|
|
$
|
673.5
|
|
$
|
507.2
|
|
|
|
|
$
|
(7.3
|
)
|
$
|
(4.0
|
)
|
(1)
|
Represents British Pound Sterling, or GBP, United States Dollar, or USD, cross-currency swap.
|
(2)
|
GBP fixed rates initially at 4.82% and escalating to 10.96%, and USD fixed rate at 9.800%.
|
(3)
|
GBP fixed rates initially at 4.82% and escalating to 10.96%, and USD fixed rate at 9.803%.
|
(4)
|
GBP fixed rates initially at 4.82% and escalating to 10.96%, and USD fixed rate at 9.745%.
|
(5)
|
GBP fixed rates initially at 4.82% and escalating to 10.96%, and USD fixed rate at 9.755%.
|
2019
|
$
|
358,249
|
|
2020
|
1,420,029
|
|
|
2021
|
1,376,492
|
|
|
2022
|
1,309,148
|
|
|
2023
|
1,227,605
|
|
|
Thereafter
|
8,346,953
|
|
|
Total
|
$
|
14,038,476
|
|
|
Three Months Ended September 30,
|
|
|
Nine Months Ended September 30,
|
|
||||||||||
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
||||
Number of properties
|
27
|
|
|
20
|
|
|
64
|
|
|
60
|
|
||||
Net sales proceeds
|
$
|
21.5
|
|
|
$
|
35.5
|
|
|
$
|
72.6
|
|
|
$
|
83.0
|
|
Gain on sales of real estate
|
$
|
1.7
|
|
|
$
|
7.8
|
|
|
$
|
15.8
|
|
|
$
|
18.8
|
|
|
Three Months Ended September 30,
|
|
|
Nine Months Ended September 30,
|
|
||||||||||
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
||||
Total provisions for impairment
|
$
|
13.5
|
|
|
$
|
6.9
|
|
|
$
|
31.2
|
|
|
$
|
25.0
|
|
Number of properties:
|
|
|
|
|
|
|
|
||||||||
Classified as held for sale
|
9
|
|
|
—
|
|
|
9
|
|
|
—
|
|
||||
Classified as held for investment
|
2
|
|
|
1
|
|
|
4
|
|
|
3
|
|
||||
Sold
|
16
|
|
|
18
|
|
|
28
|
|
|
36
|
|
Month
|
2019
|
|
|
2018
|
|
||
January
|
$
|
0.2210
|
|
|
$
|
0.2125
|
|
February
|
0.2255
|
|
|
0.2190
|
|
||
March
|
0.2255
|
|
|
0.2190
|
|
||
April
|
0.2260
|
|
|
0.2195
|
|
||
May
|
0.2260
|
|
|
0.2195
|
|
||
June
|
0.2260
|
|
|
0.2195
|
|
||
July
|
0.2265
|
|
|
0.2200
|
|
||
August
|
0.2265
|
|
|
0.2200
|
|
||
September
|
0.2265
|
|
|
0.2200
|
|
||
Total
|
$
|
2.0295
|
|
|
$
|
1.9690
|
|
|
Three months ended September 30,
|
|
|
Nine months ended September 30,
|
|
||||||
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
Weighted average shares used for the basic net income per share computation
|
319,945,932
|
|
|
290,664,368
|
|
|
311,556,279
|
|
|
286,599,191
|
|
Incremental shares from share-based compensation
|
317,085
|
|
|
225,796
|
|
|
309,131
|
|
|
189,072
|
|
Weighted average partnership common units convertible to common shares that were dilutive
|
—
|
|
|
317,022
|
|
|
—
|
|
|
317,022
|
|
Weighted average shares used for diluted net income per share computation
|
320,263,017
|
|
|
291,207,186
|
|
|
311,865,410
|
|
|
287,105,285
|
|
Unvested shares from share-based compensation that were anti-dilutive
|
7,892
|
|
|
261
|
|
|
6,529
|
|
|
1,378
|
|
Weighted average partnership common units convertible to common shares that were anti-dilutive
|
463,119
|
|
|
397,690
|
|
|
434,981
|
|
|
271,890
|
|
|
September 30, 2019
|
|
|
September 30, 2018
|
|
||
Cash and cash equivalents shown in the consolidated balance sheets
|
$
|
236,064
|
|
|
$
|
6,666
|
|
Restricted escrow deposits (1)
|
11,474
|
|
|
1,533
|
|
||
Impounds related to mortgages payable (1)
|
11,751
|
|
|
7,529
|
|
||
Total cash, cash equivalents, and restricted cash shown in the consolidated
statements of cash flows
|
$
|
259,289
|
|
|
$
|
15,728
|
|
Assets, as of:
|
September 30, 2019
|
|
|
December 31, 2018
|
|
||
Segment net real estate:
|
|
|
|
||||
Automotive service
|
$
|
283,422
|
|
|
$
|
210,668
|
|
Automotive tire services
|
232,712
|
|
|
238,939
|
|
||
Beverages
|
280,427
|
|
|
284,910
|
|
||
Child care
|
208,788
|
|
|
151,640
|
|
||
Convenience stores
|
1,717,039
|
|
|
1,756,732
|
|
||
Dollar stores
|
1,123,086
|
|
|
1,117,250
|
|
||
Drug stores
|
1,447,853
|
|
|
1,490,261
|
|
||
Financial services
|
394,771
|
|
|
414,613
|
|
||
General merchandise
|
471,376
|
|
|
317,424
|
|
||
Grocery stores - U.S.(1)
|
865,039
|
|
|
774,526
|
|
||
Grocery stores - U.K.(1)
|
449,200
|
|
|
—
|
|
||
Health and fitness
|
995,315
|
|
|
882,515
|
|
||
Home improvement
|
487,219
|
|
|
424,494
|
|
||
Restaurants-casual dining
|
529,316
|
|
|
559,616
|
|
||
Restaurants-quick service
|
1,008,276
|
|
|
964,980
|
|
||
Theaters
|
889,931
|
|
|
555,990
|
|
||
Transportation services
|
735,020
|
|
|
758,133
|
|
||
Wholesale club
|
402,478
|
|
|
412,203
|
|
||
Other non-reportable segments
|
2,625,458
|
|
|
2,528,623
|
|
||
Total segment net real estate
|
15,146,726
|
|
|
13,843,517
|
|
||
Intangible assets:
|
|
|
|
||||
Automotive service
|
58,974
|
|
|
61,951
|
|
||
Automotive tire services
|
7,474
|
|
|
8,696
|
|
||
Beverages
|
1,573
|
|
|
1,765
|
|
||
Child care
|
20,448
|
|
|
12,277
|
|
||
Convenience stores
|
104,901
|
|
|
108,714
|
|
||
Dollar stores
|
48,294
|
|
|
48,842
|
|
||
Drug stores
|
155,827
|
|
|
165,558
|
|
||
Financial services
|
17,843
|
|
|
20,426
|
|
||
General merchandise
|
60,080
|
|
|
43,122
|
|
||
Grocery stores - U.S.(1)
|
170,231
|
|
|
144,551
|
|
||
Grocery stores - U.K.(1)
|
108,863
|
|
|
—
|
|
||
Health and fitness
|
68,738
|
|
|
71,609
|
|
||
Home improvement
|
72,128
|
|
|
57,928
|
|
||
Restaurants-casual dining
|
16,944
|
|
|
18,153
|
|
||
Restaurants-quick service
|
52,662
|
|
|
54,448
|
|
||
Theaters
|
35,989
|
|
|
25,811
|
|
||
Transportation services
|
64,758
|
|
|
73,577
|
|
||
Wholesale club
|
24,150
|
|
|
26,484
|
|
||
Other non-reportable segments
|
223,921
|
|
|
255,685
|
|
||
Goodwill:
|
|
|
|
||||
Automotive service
|
436
|
|
|
437
|
|
||
Automotive tire services
|
862
|
|
|
862
|
|
||
Child care
|
4,825
|
|
|
4,863
|
|
||
Convenience stores
|
1,978
|
|
|
1,983
|
|
||
Restaurants-casual dining
|
1,794
|
|
|
1,841
|
|
||
Restaurants-quick service
|
1,040
|
|
|
1,052
|
|
||
Other non-reportable segments
|
3,568
|
|
|
3,592
|
|
||
Other corporate assets
|
704,877
|
|
|
202,739
|
|
||
Total assets
|
$
|
17,179,904
|
|
|
$
|
15,260,483
|
|
|
Three months ended September 30,
|
|
|
Nine months ended September 30,
|
|
||||||||||
Revenue
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
||||
Segment rental revenue:
|
|
|
|
|
|
|
|
||||||||
Automotive service
|
$
|
8,505
|
|
|
$
|
7,120
|
|
|
$
|
23,735
|
|
|
$
|
21,150
|
|
Automotive tire services
|
7,766
|
|
|
7,460
|
|
|
23,517
|
|
|
22,607
|
|
||||
Beverages
|
7,988
|
|
|
7,908
|
|
|
23,819
|
|
|
23,581
|
|
||||
Child care
|
7,837
|
|
|
5,255
|
|
|
23,425
|
|
|
16,172
|
|
||||
Convenience stores
|
41,286
|
|
|
39,384
|
|
|
123,932
|
|
|
101,254
|
|
||||
Dollar stores
|
25,213
|
|
|
23,903
|
|
|
75,311
|
|
|
70,390
|
|
||||
Drug stores
|
31,902
|
|
|
32,431
|
|
|
97,414
|
|
|
97,206
|
|
||||
Financial services
|
7,585
|
|
|
7,850
|
|
|
22,997
|
|
|
21,741
|
|
||||
General merchandise
|
9,594
|
|
|
7,453
|
|
|
25,115
|
|
|
21,613
|
|
||||
Grocery stores - U.S.(1)
|
17,673
|
|
|
16,095
|
|
|
51,009
|
|
|
47,433
|
|
||||
Grocery stores - U.K.(1)
|
6,618
|
|
|
—
|
|
|
9,533
|
|
|
—
|
|
||||
Health and fitness
|
26,437
|
|
|
23,754
|
|
|
78,915
|
|
|
70,812
|
|
||||
Home improvement
|
10,950
|
|
|
9,678
|
|
|
31,430
|
|
|
28,261
|
|
||||
Restaurants-casual dining
|
10,939
|
|
|
12,355
|
|
|
33,614
|
|
|
34,344
|
|
||||
Restaurants-quick service
|
21,880
|
|
|
18,673
|
|
|
65,124
|
|
|
52,035
|
|
||||
Theaters
|
24,002
|
|
|
17,479
|
|
|
62,567
|
|
|
52,814
|
|
||||
Transportation services
|
16,109
|
|
|
16,105
|
|
|
48,327
|
|
|
47,653
|
|
||||
Wholesale club
|
9,468
|
|
|
9,345
|
|
|
28,525
|
|
|
28,218
|
|
||||
Other non-reportable segments and tenant reimbursements
|
80,560
|
|
|
75,004
|
|
|
242,292
|
|
|
223,081
|
|
||||
Rental (including reimbursable)
|
372,312
|
|
|
337,252
|
|
|
1,090,601
|
|
|
980,365
|
|
||||
Other
|
1,935
|
|
|
829
|
|
|
3,461
|
|
|
4,897
|
|
||||
Total revenue
|
$
|
374,247
|
|
|
$
|
338,081
|
|
|
$
|
1,094,062
|
|
|
$
|
985,262
|
|
|
|
Ground Leases
Paid by Realty Income (1) |
|
|
Ground Leases
Paid by Our Tenants (2) |
|
|
Total
|
|
|||
2019
|
|
$
|
0.4
|
|
|
$
|
3.4
|
|
|
$
|
3.8
|
|
2020
|
|
1.5
|
|
|
13.5
|
|
|
15.0
|
|
|||
2021
|
|
1.3
|
|
|
13.2
|
|
|
14.5
|
|
|||
2022
|
|
1.2
|
|
|
13.1
|
|
|
14.3
|
|
|||
2023
|
|
1.2
|
|
|
13.1
|
|
|
14.3
|
|
|||
Thereafter
|
|
19.9
|
|
|
82.1
|
|
|
102.0
|
|
|||
Total
|
|
$
|
25.5
|
|
|
$
|
138.4
|
|
|
$
|
163.9
|
|
Present value adjustment for remaining lease payments (3)
|
|
|
|
|
|
(39.6
|
)
|
|||||
Lease liability - operating leases, net
|
|
|
|
|
|
$
|
124.3
|
|
(1)
|
Realty Income currently pays the ground lessors directly for the rent under the ground leases.
|
(2)
|
Our tenants, who are generally sub-tenants under the ground leases, are responsible for paying the rent under these ground leases. In the event a tenant fails to pay the ground lease rent, we are primarily responsible for the rent payment.
|
•
|
Our anticipated growth strategies;
|
•
|
Our intention to acquire additional properties and the timing of these acquisitions;
|
•
|
Our intention to sell properties and the timing of these property sales;
|
•
|
Our intention to re-lease vacant properties;
|
•
|
Anticipated trends in our business, including trends in the market for long-term, net leases of freestanding, single-tenant properties; and
|
•
|
Future expenditures for development projects.
|
•
|
Our continued qualification as a real estate investment trust;
|
•
|
General local and foreign business and economic conditions;
|
•
|
Competition;
|
•
|
Fluctuating interest and currency rates;
|
•
|
Access to debt and equity capital markets;
|
•
|
Continued volatility and uncertainty in the credit markets and broader financial markets;
|
•
|
Other risks inherent in the real estate business including tenant defaults, potential liability relating to environmental matters, illiquidity of real estate investments, and potential damages from natural disasters;
|
•
|
Impairments in the value of our real estate assets;
|
•
|
Changes in income tax laws and rates;
|
•
|
The outcome of any legal proceedings to which we are a party or which may occur in the future; and
|
•
|
Acts of terrorism and war.
|
•
|
Of 5,964 properties;
|
•
|
With an occupancy rate of 98.3%, or 5,862 properties leased and 102 properties available for lease;
|
•
|
Leased to 274 different commercial tenants doing business in 49 separate industries;
|
•
|
Located in 49 U.S. states, Puerto Rico and the United Kingdom (U.K.);
|
•
|
With over 100.5 million square feet of leasable space;
|
•
|
With a weighted average remaining lease term (excluding rights to extend a lease at the option of the tenant) of approximately 9.3 years; and
|
•
|
With an average leasable space per property of approximately 16,852 square feet; approximately 11,873 square feet per retail property and 237,668 square feet per industrial property.
|
•
|
Properties that are freestanding, commercially-zoned with a single tenant;
|
•
|
Properties that are in significant markets or strategic locations critical to generating revenue for our tenants (i.e. they need the property in which they operate in order to conduct their business);
|
•
|
Properties that we deem to be profitable for the tenants and/or can generally be characterized as important to the successful operations of the company’s business;
|
•
|
Properties that are located within attractive demographic areas relative to the business of our tenants, generally fungible, and have good visibility and easy access to major thoroughfares;
|
•
|
Properties with real estate valuations that approximate replacement costs;
|
•
|
Properties with rental or lease payments that approximate market rents; and
|
•
|
Properties that can be purchased with the simultaneous execution or assumption of long-term, net lease agreements, offering both current income and the potential for future rent increases.
|
•
|
Tenants with reliable and sustainable cash flow;
|
•
|
Tenants with revenue and cash flow from multiple sources;
|
•
|
Tenants that are willing to sign a long-term lease (10 or more years); and
|
•
|
Tenants that are large owners and users of real estate.
|
•
|
The aforementioned overall real estate characteristics, including demographics, replacement cost and comparative rental rates;
|
•
|
Industry, tenant (including credit profile), and market conditions;
|
•
|
Store profitability for retail locations if profitability data is available; and
|
•
|
The importance of the real estate location to the operations of the tenants’ business.
|
•
|
Rent increases at the expiration of existing leases, when market conditions permit;
|
•
|
Optimum exposure to certain tenants, industries, and markets through re-leasing vacant properties and selectively selling properties;
|
•
|
Maximum asset-level returns on properties that are re-leased or sold;
|
•
|
Additional value creation from the existing portfolio by enhancing individual properties, pursuing alternative uses, and deriving ancillary revenue; and
|
•
|
Investment opportunities in new asset classes for the portfolio.
|
•
|
Generate higher returns;
|
•
|
Enhance the credit quality of our real estate portfolio;
|
•
|
Extend our average remaining lease term; and/or
|
•
|
Strategically decrease tenant, industry, or geographic concentration.
|
2019 Dividend increases
|
Month
Declared
|
Month
Paid
|
Dividend
per share
|
|
Increase
per share
|
|
||
1st increase
|
Dec 2018
|
Jan 2019
|
$
|
0.2210
|
|
$
|
0.0005
|
|
2nd increase
|
Jan 2019
|
Feb 2019
|
$
|
0.2255
|
|
$
|
0.0045
|
|
3rd increase
|
Mar 2019
|
Apr 2019
|
$
|
0.2260
|
|
$
|
0.0005
|
|
4th increase
|
Jun 2019
|
Jul 2019
|
$
|
0.2265
|
|
$
|
0.0005
|
|
5th increase
|
Sep 2019
|
Oct 2019
|
$
|
0.2270
|
|
$
|
0.0005
|
|
|
Number of Properties
|
|
|
Square Feet
(in millions)
|
|
|
Investment
($ in millions)
|
|
|
Weighted Average Lease Term (Years)
|
|
|
Initial Average Cash Lease Yield
|
|
|
Three months ended September 30, 2019 (1)
|
|
|
|
|
|
|
|
|
|
||||||
Acquisitions - U.S. (in 23 states)
|
39
|
|
|
2.0
|
|
|
$
|
372.0
|
|
|
15.1
|
|
|
5.7
|
%
|
Acquisitions - U.K. (2)
|
1
|
|
|
0.1
|
|
|
27.6
|
|
|
20.6
|
|
|
4.8
|
%
|
|
Total Acquisitions
|
40
|
|
|
2.1
|
|
|
399.6
|
|
|
15.4
|
|
|
5.7
|
%
|
|
Properties under Development - U.S.
|
11
|
|
|
0.4
|
|
|
11.9
|
|
|
15.0
|
|
|
7.7
|
%
|
|
Total (3)
|
51
|
|
|
2.5
|
|
|
$
|
411.5
|
|
|
15.4
|
|
|
5.7
|
%
|
|
|
|
|
|
|
|
|
|
|
||||||
Nine months ended September 30, 2019 (1)
|
|
|
|
|
|
|
|
|
|
||||||
Acquisitions - U.S. (in 38 states)
|
214
|
|
|
6.2
|
|
|
$
|
1,412.9
|
|
|
15.7
|
|
|
6.5
|
%
|
Acquisitions - U.K. (2)
|
13
|
|
|
1.2
|
|
|
576.8
|
|
|
15.0
|
|
|
5.2
|
%
|
|
Total Acquisitions
|
227
|
|
|
7.4
|
|
|
1,989.7
|
|
|
15.5
|
|
|
6.1
|
%
|
|
Properties under Development - U.S.
|
14
|
|
|
0.4
|
|
|
36.0
|
|
|
16.0
|
|
|
7.4
|
%
|
|
Total (4)
|
241
|
|
|
7.8
|
|
|
$
|
2,025.7
|
|
|
15.5
|
|
|
6.2
|
%
|
(1)
|
None of our investments during 2019 caused any one tenant to be 10% or more of our total assets at September 30, 2019. All of our 2019 investments in acquired properties are 100% leased at the acquisition date.
|
(2)
|
Represents investments of £22.2 million during the three months ended September 30, 2019 and £456.1 million during the nine months ended September 30, 2019 multiplied by the applicable exchange rate on the date of acquisition.
|
(3)
|
The tenants occupying the new properties operate in 13 industries, and are 48.7% retail and 51.3% industrial, based on rental revenue. Approximately 56% of the rental revenue generated from acquisitions during the third quarter of 2019 is from investment grade rated tenants and their subsidiaries.
|
(4)
|
The tenants occupying the new properties operate in 19 industries, and are 89.6% retail and 10.4% industrial, based on rental revenue. Approximately 25% of the rental revenue generated from acquisitions during the first nine months of 2019 is from investment grade rated tenants and their subsidiaries.
|
Properties available for lease at June 30, 2019
|
102
|
|
Lease expirations
|
50
|
|
Re-leases to same tenant (1)
|
(26
|
)
|
Re-leases to new tenant (1)(2)
|
(3
|
)
|
Dispositions
|
(21
|
)
|
Properties available for lease at September 30, 2019
|
102
|
|
(1)
|
The annual new rent on these re-leases was $6.96 million, as compared to the previous annual rent of $6.86 million on the same properties, representing a rent recapture rate of 101.5% on the properties re-leased during the quarter ended September 30, 2019.
|
(2)
|
Re-leased to one new tenant after a period of vacancy, and two new tenants without vacancy
|
Properties available for lease at December 31, 2018
|
80
|
|
Lease expirations
|
260
|
|
Re-leases to same tenant (1)
|
(174
|
)
|
Re-leases to new tenant (1)(2)
|
(12
|
)
|
Dispositions
|
(52
|
)
|
Properties available for lease at September 30, 2019
|
102
|
|
(1)
|
The annual new rent on these re-leases was $48.52 million, as compared to the previous annual rent of $47.53 million on the same properties, representing a rent recapture rate of 102.1% on the properties re-leased during the quarter ended September 30, 2019.
|
(2)
|
Re-leased to six new tenants after a period of vacancy, and six new tenants without vacancy.
|
|
Three Months Ended September 30,
|
|
|
Nine Months Ended September 30,
|
|
|
% Increase (decrease)
|
||||||||||||||
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
|
Three months
|
|
|
Nine months
|
|
||||
Net income available to common stockholders (1)
|
$
|
101.0
|
|
|
$
|
99.0
|
|
|
$
|
307.2
|
|
|
$
|
278.5
|
|
|
2.0
|
%
|
|
10.3
|
%
|
Net income per share (2)
|
$
|
0.32
|
|
|
$
|
0.34
|
|
|
$
|
0.98
|
|
|
$
|
0.97
|
|
|
(5.9
|
)%
|
|
1.0
|
%
|
Gain on sales of real estate
|
$
|
1.7
|
|
|
$
|
7.8
|
|
|
$
|
15.8
|
|
|
$
|
18.8
|
|
|
(78.2
|
)%
|
|
(16.0
|
)%
|
Provisions for impairment
|
$
|
13.5
|
|
|
$
|
6.9
|
|
|
$
|
31.2
|
|
|
$
|
25.0
|
|
|
95.7
|
%
|
|
24.8
|
%
|
FFO available to common stockholders
|
$
|
262.0
|
|
|
$
|
234.6
|
|
|
$
|
759.2
|
|
|
$
|
685.5
|
|
|
11.7
|
%
|
|
10.8
|
%
|
FFO per share (2)
|
$
|
0.82
|
|
|
$
|
0.81
|
|
|
$
|
2.43
|
|
|
$
|
2.39
|
|
|
1.2
|
%
|
|
1.7
|
%
|
AFFO available to common stockholders
|
$
|
265.4
|
|
|
$
|
236.2
|
|
|
$
|
768.0
|
|
|
$
|
687.7
|
|
|
12.4
|
%
|
|
11.7
|
%
|
AFFO per share (2)
|
$
|
0.83
|
|
|
$
|
0.81
|
|
|
$
|
2.46
|
|
|
$
|
2.40
|
|
|
2.5
|
%
|
|
2.5
|
%
|
•
|
Shares of our common stock outstanding of 325,910,281, plus total common units outstanding of 463,119, multiplied by the last reported sales price of our common stock on the NYSE of $76.68 per share on September 30, 2019, or $25.03 billion;
|
•
|
Outstanding mortgages payable of $278.9 million, excluding net mortgage premiums of $3.3 million and deferred financing costs of $143,000;
|
•
|
Outstanding borrowings of $500.0 million on our term loans, excluding deferred financing costs of $1.1 million; and
|
•
|
Outstanding senior unsecured notes and bonds of $6.29 billion, excluding net unamortized original issuance premiums of $6.6 million and deferred financing costs of $37.3 million.
|
|
Three Months Ended September 30,
|
|
|
Nine Months Ended September 30,
|
|
||||||||||
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
||||
Shares of common stock issued under the ATM program
|
7,663,383
|
|
|
5,055,343
|
|
|
9,370,078
|
|
|
10,630,616
|
|
||||
Gross proceeds
|
$
|
570.3
|
|
|
$
|
290.9
|
|
|
$
|
694.4
|
|
|
$
|
588.9
|
|
|
Three Months Ended September 30,
|
|
|
Nine Months Ended September 30,
|
|
|
Inception to Date
|
|
|||||||||||
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
|
|||||||
Shares of common stock issued under the DRSPP program
|
29,801
|
|
|
38,011
|
|
|
89,219
|
|
|
131,072
|
|
|
14,319,029
|
|
|||||
Gross proceeds
|
$
|
2.1
|
|
|
$
|
2.2
|
|
|
$
|
6.3
|
|
|
$
|
7.0
|
|
|
$
|
677.2
|
|
5.750% notes, issued in June 2010 and due in January 2021
|
$
|
250
|
|
3.250% notes, $450 issued in October 2012 and $500 issued in December 2017, both due in October 2022
|
950
|
|
|
4.650% notes, issued in July 2013 and due in August 2023
|
750
|
|
|
3.875% notes, issued in June 2014 and due in July 2024
|
350
|
|
|
3.875% notes, issued in April 2018 and due in April 2025
|
500
|
|
|
4.125% notes, $250 issued in September 2014 and $400 issued in March 2017, both due in October 2026
|
650
|
|
|
3.000% notes, issued in October 2016 and due in January 2027
|
600
|
|
|
3.650% notes, issued in December 2017 and due in January 2028
|
550
|
|
|
3.250% notes, issued in June 2019 and due in June 2029
|
500
|
|
|
2.730% notes, issued in May 2019 and due in May 2034 (1)
|
387
|
|
|
5.875% bonds, $100 issued in March 2005 and $150 issued in June 2011, both due in March 2035
|
250
|
|
|
4.650% notes, $300 issued in March 2017 and $250 issued in December 2017, both due in March 2047
|
550
|
|
|
Total principal amount
|
$
|
6,287
|
|
Unamortized net original issuance premiums and deferred financing costs
|
(31
|
)
|
|
|
$
|
6,256
|
|
Note Covenants
|
Required
|
Actual
|
|
Limitation on incurrence of total debt
|
< 60% of adjusted assets
|
37.7
|
%
|
Limitation on incurrence of secured debt
|
< 40% of adjusted assets
|
1.5
|
%
|
Debt service coverage (trailing 12 months) (1)
|
> 1.5x
|
4.7x
|
|
Maintenance of total unencumbered assets
|
> 150% of unsecured debt
|
268.4
|
%
|
Net income available to common stockholders
|
$
|
392,257
|
|
Plus: interest expense, excluding the amortization of deferred financing costs
|
277,533
|
|
|
Plus: provision for taxes
|
6,029
|
|
|
Plus: depreciation and amortization
|
575,078
|
|
|
Plus: provisions for impairment
|
32,471
|
|
|
Plus: pro forma adjustments
|
76,847
|
|
|
Less: gain on sales of real estate
|
(21,653
|
)
|
|
|
|
||
Income available for debt service, as defined
|
$
|
1,338,562
|
|
|
|
||
Total pro forma debt service charge
|
$
|
287,645
|
|
|
|
||
Debt service and fixed charge coverage ratio
|
4.7
|
|
Year of
Maturity
|
Credit
Facility (1)
|
|
Notes
and
Bonds (2)
|
|
Term
Loan (3)
|
|
Mortgages
Payable (4)
|
|
Interest (5)
|
|
Ground
Leases Paid by
Realty Income (6)
|
|
Ground
Leases Paid
by Our
Tenants (7)
|
|
Other (8)
|
|
Totals
|
|
|||||||||
2019
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
1.2
|
|
$
|
59.6
|
|
$
|
0.4
|
|
$
|
3.4
|
|
$
|
8.3
|
|
$
|
72.9
|
|
2020
|
—
|
|
—
|
|
250.0
|
|
82.4
|
|
272.1
|
|
1.5
|
|
13.5
|
|
25.0
|
|
644.5
|
|
|||||||||
2021
|
—
|
|
250.0
|
|
—
|
|
67.0
|
|
256.1
|
|
1.3
|
|
13.2
|
|
—
|
|
587.6
|
|
|||||||||
2022
|
—
|
|
950.0
|
|
—
|
|
109.7
|
|
245.3
|
|
1.2
|
|
13.1
|
|
—
|
|
1,319.3
|
|
|||||||||
2023
|
—
|
|
750.0
|
|
—
|
|
6.7
|
|
210.5
|
|
1.2
|
|
13.1
|
|
—
|
|
981.5
|
|
|||||||||
Thereafter
|
—
|
|
4,337.1
|
|
250.0
|
|
11.9
|
|
1,252.8
|
|
19.9
|
|
82.1
|
|
—
|
|
5,953.8
|
|
|||||||||
Totals
|
$
|
—
|
|
$
|
6,287.1
|
|
$
|
500.0
|
|
$
|
278.9
|
|
$
|
2,296.4
|
|
$
|
25.5
|
|
$
|
138.4
|
|
$
|
33.3
|
|
$
|
9,559.6
|
|
(1)
|
The initial term of the credit facility expires in March 2023 and includes, at our option, two six–month extensions.
|
(2)
|
Excludes non-cash original issuance discounts and premiums recorded on notes payable of $6.6 million and deferred financing costs of $37.3 million at September 30, 2019.
|
(3)
|
Excludes deferred financing costs of $1.1 million.
|
(4)
|
Excludes both non–cash net premiums recorded on the mortgages payable of $3.3 million and deferred financing costs of $143,000 at September 30, 2019.
|
(5)
|
Interest on the term loans, notes, bonds, mortgages payable, and credit facility has been calculated based on outstanding balances as of September 30, 2019 through their respective maturity dates.
|
(6)
|
Realty Income currently pays the ground lessors directly for the rent under the ground leases.
|
(7)
|
Our tenants, who are generally sub-tenants under ground leases, are responsible for paying the rent under these ground leases. In the event a tenant fails to pay the ground lease rent, we are primarily responsible.
|
(8)
|
“Other” consists of $23.5 million of commitments under construction contracts and $9.8 million for re-leasing costs, recurring capital expenditures, and non-recurring building improvements.
|
|
Three Months Ended September 30,
|
|
|
Nine Months Ended September 30,
|
|
|
Increase (decrease)
|
||||||||||||||||
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
|
Three months
|
|
|
Nine months
|
|
||||||
REVENUE
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Rental (excluding reimbursable)
|
$
|
356,789
|
|
|
$
|
324,773
|
|
|
$
|
1,041,327
|
|
|
$
|
945,191
|
|
|
$
|
32,016
|
|
|
$
|
96,136
|
|
Rental (reimbursable)
|
15,523
|
|
|
12,479
|
|
|
49,274
|
|
|
35,174
|
|
|
3,044
|
|
|
14,100
|
|
||||||
Other
|
1,935
|
|
|
829
|
|
|
3,461
|
|
|
4,897
|
|
|
1,106
|
|
|
(1,436
|
)
|
||||||
Total revenue
|
$
|
374,247
|
|
|
$
|
338,081
|
|
|
$
|
1,094,062
|
|
|
$
|
985,262
|
|
|
$
|
36,166
|
|
|
$
|
108,800
|
|
•
|
The 231 properties (7.5 million square feet) we acquired in 2019, which generated $26.1 million of rent in the third quarter of 2019;
|
•
|
The 753 properties (4.8 million square feet) we acquired in 2018, which generated $28.3 million of rent in the third quarter of 2019, compared to $19.7 million in the third quarter of 2018, an increase of $8.6 million;
|
•
|
Same store rents generated on 4,836 properties (83.6 million square feet) during the third quarter of 2019 and 2018, increased by $3.6 million, or 1.2%, to $293.73 million from $290.18 million; partially offset by
|
•
|
A net decrease in straight-line rent and other non-cash adjustments to rent of $1.3 million in the third quarter of 2019 as compared to the third quarter of 2018;
|
•
|
A net decrease of $3.7 million relating to properties sold during 2019 and 2018 that were reported in continuing operations; and
|
•
|
A net decrease of $1.2 million relating to the aggregate of (i) rental revenue from properties (134 properties comprising 3.2 million square feet) that were available for lease during part of 2019 or 2018, (ii) rental revenue for ten properties under development, and (iii) lease termination settlements. In aggregate, the revenues for these items totaled $5.6 million in the third quarter of 2019, compared to $6.8 million in the third quarter of 2018.
|
•
|
The 231 properties (7.5 million square feet) we acquired in the first nine months of 2019, which generated $44.9 million of rent in the first nine months of 2019;
|
•
|
The 753 properties (4.8 million square feet) we acquired in 2018, which generated $84.3 million of rent in the first nine months of 2019, compared to $29.7 million in the first nine months of 2018, an increase of $54.6 million; and
|
•
|
Same store rents generated on 4,836 properties (83.6 million square feet) during the first nine months of 2019 and 2018, increased by $12.4 million or 1.4%, to $882.53 million from $870.16 million; partially offset by
|
•
|
A net decrease in straight-line rent and other non-cash adjustments to rent of $2.3 million in the first nine months of 2019 as compared to the first nine months of 2018;
|
•
|
A net decrease of $11.4 million relating to properties sold in the first nine months of 2019 and during 2018 that were reported in continuing operations; and
|
•
|
A net decrease of $2.0 million relating to the aggregate of (i) rental revenue from properties (134 properties comprising 3.2 million square feet) that were available for lease during part of 2019 or 2018, (ii) rental revenue for ten properties under development, and (iii) lease termination settlements. In aggregate, the revenues for these items totaled $17.9 million in the first nine months of 2019 compared to $19.9 million in the first nine months of 2018.
|
•
|
Base rent increases tied to a consumer price index (typically subject to ceilings);
|
•
|
Percentage rent based on a percentage of the tenants’ gross sales;
|
•
|
Fixed increases; or
|
•
|
A combination of two or more of the above rent provisions.
|
|
Three Months Ended
September 30,
|
|
|
Nine months Ended
September 30,
|
|
|
Increase
|
||||||||||||||||
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
|
Three months
|
|
Nine months
|
||||||||
EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Depreciation and amortization
|
$
|
149,424
|
|
|
$
|
136,967
|
|
|
$
|
437,367
|
|
|
$
|
402,069
|
|
|
$
|
12,457
|
|
|
$
|
35,298
|
|
Interest
|
73,410
|
|
|
69,342
|
|
|
215,918
|
|
|
195,385
|
|
|
4,068
|
|
|
20,533
|
|
||||||
General and administrative
|
16,460
|
|
|
16,332
|
|
|
50,153
|
|
|
49,970
|
|
|
128
|
|
|
183
|
|
||||||
Property (excluding reimbursable)
|
4,831
|
|
|
3,327
|
|
|
14,058
|
|
|
13,420
|
|
|
1,504
|
|
|
638
|
|
||||||
Property (reimbursable)
|
15,523
|
|
|
12,479
|
|
|
49,274
|
|
|
35,174
|
|
|
3,044
|
|
|
14,100
|
|
||||||
Income taxes
|
1,822
|
|
|
1,302
|
|
|
4,422
|
|
|
3,733
|
|
|
520
|
|
|
689
|
|
||||||
Provisions for impairment
|
13,503
|
|
|
6,862
|
|
|
31,236
|
|
|
25,034
|
|
|
6,641
|
|
|
6,202
|
|
||||||
Total expenses
|
$
|
274,973
|
|
|
$
|
246,611
|
|
|
$
|
802,428
|
|
|
$
|
724,785
|
|
|
$
|
28,362
|
|
|
$
|
77,643
|
|
Total revenue (1)
|
358,724
|
|
|
325,602
|
|
|
1,044,788
|
|
|
950,088
|
|
|
|
|
|
|
|
||||||
General and administrative expenses as a percentage of total revenue (1)
|
4.6
|
%
|
|
5.0
|
%
|
|
4.8
|
%
|
|
5.3
|
%
|
|
|
|
|
|
|
||||||
Property expenses (excluding reimbursable) as a percentage of total revenue (1)
|
1.3
|
%
|
|
1.0
|
%
|
|
1.3
|
%
|
|
1.4
|
%
|
|
|
|
|
|
|
(1)
|
Excludes rental revenue (reimbursable).
|
|
Three Months Ended
September 30,
|
|
|
Nine Months Ended
September 30,
|
|
||||||||||
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
||||
Interest on our credit facility, term loans, notes, mortgages and interest rate swaps
|
$
|
69,889
|
|
|
$
|
67,556
|
|
|
$
|
206,247
|
|
|
$
|
192,517
|
|
Credit facility commitment fees
|
958
|
|
|
639
|
|
|
2,844
|
|
|
1,896
|
|
||||
Amortization of debt origination and deferred financing costs
|
2,552
|
|
|
2,083
|
|
|
6,930
|
|
|
6,168
|
|
||||
Loss (gain) on interest rate swaps
|
694
|
|
|
(265
|
)
|
|
2,058
|
|
|
(3,064
|
)
|
||||
Amortization of net mortgage premiums
|
(354
|
)
|
|
(354
|
)
|
|
(1,061
|
)
|
|
(1,167
|
)
|
||||
Amortization of net note premiums
|
(211
|
)
|
|
(291
|
)
|
|
(784
|
)
|
|
(964
|
)
|
||||
Obligations related to financing lease liabilities
|
78
|
|
|
78
|
|
|
233
|
|
|
233
|
|
||||
Interest capitalized
|
(196
|
)
|
|
(104
|
)
|
|
(549
|
)
|
|
(234
|
)
|
||||
Interest expense
|
$
|
73,410
|
|
|
$
|
69,342
|
|
|
$
|
215,918
|
|
|
$
|
195,385
|
|
|
|
|
|
|
|
|
|
||||||||
Credit facility, term loans, mortgages and notes
|
|
|
|
|
|
|
|
||||||||
Average outstanding balances (dollars in thousands)
|
$
|
7,171,012
|
|
|
$
|
6,933,288
|
|
|
$
|
6,991,532
|
|
|
$
|
6,604,422
|
|
Average interest rates
|
3.88
|
%
|
|
3.89
|
%
|
|
3.93
|
%
|
|
3.88
|
%
|
•
|
Term loans outstanding of $500.0 million (excluding deferred financing costs of $1.1 million) was 3.3%;
|
•
|
Mortgages payable of $278.9 million (excluding net premiums totaling $3.3 million and deferred financing costs of $143,000 on these mortgages) was 5.2%;
|
•
|
Notes and bonds payable of $6.29 billion (excluding net unamortized original issue premiums of $6.6 million and deferred financing costs of $37.3 million) was 3.9%; and
|
•
|
Combined outstanding notes, bonds, mortgages and term loans of $7.07 billion (excluding all net premiums and deferred financing costs) was 3.9%.
|
|
Three Months Ended September 30,
|
|
|
Nine Months Ended September 30,
|
|
||||||||||
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
||||
Total provisions for impairment
|
$
|
13.5
|
|
|
$
|
6.9
|
|
|
$
|
31.2
|
|
|
$
|
25.0
|
|
Number of properties:
|
|
|
|
|
|
|
|
||||||||
Classified as held for sale
|
9
|
|
|
—
|
|
|
9
|
|
|
—
|
|
||||
Classified as held for investment
|
2
|
|
|
1
|
|
|
4
|
|
|
3
|
|
||||
Sold
|
16
|
|
|
18
|
|
|
28
|
|
|
36
|
|
|
Three Months Ended September 30,
|
|
|
Nine Months Ended September 30,
|
|
||||||||||
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
||||
Number of properties sold
|
27
|
|
|
20
|
|
|
64
|
|
|
60
|
|
||||
Net sales proceeds
|
$
|
21.5
|
|
|
$
|
35.5
|
|
|
$
|
72.6
|
|
|
$
|
83.0
|
|
Gain on sales of real estate
|
$
|
1.7
|
|
|
$
|
7.8
|
|
|
$
|
15.8
|
|
|
$
|
18.8
|
|
|
Three Months Ended September 30,
|
|
|
Nine Months Ended September 30,
|
|
|
% Increase (decrease)
|
||||||||||||||
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
|
Three months
|
|
|
Nine months
|
|
||||
Net income available to common stockholders
|
$
|
101.0
|
|
|
$
|
99.0
|
|
|
$
|
307.2
|
|
|
$
|
278.5
|
|
|
2.0
|
%
|
|
10.3
|
%
|
Net income per share (1)
|
$
|
0.32
|
|
|
$
|
0.34
|
|
|
$
|
0.98
|
|
|
$
|
0.97
|
|
|
(5.9
|
)%
|
|
1.0
|
%
|
|
Three Months Ended
September 30,
|
|||||
|
2019
|
|
2018
|
|
||
Net income
|
$
|
101,275
|
|
$
|
99,283
|
|
Interest
|
73,410
|
|
69,342
|
|
||
Income taxes
|
1,822
|
|
1,302
|
|
||
Depreciation and amortization
|
149,424
|
|
136,967
|
|
||
Provisions for impairment
|
13,503
|
|
6,862
|
|
||
Gain on sales of real estate
|
(1,674
|
)
|
(7,813
|
)
|
||
Foreign currency and derivative gains, net
|
(327
|
)
|
—
|
|
||
Quarterly Adjusted EBITDAre
|
$
|
337,433
|
|
$
|
305,943
|
|
|
|
|
||||
Annualized Adjusted EBITDAre (1)
|
$
|
1,349,732
|
|
$
|
1,223,772
|
|
Net Debt
|
$
|
6,801,325
|
|
$
|
6,772,993
|
|
Net Debt/Adjusted EBITDAre
|
5.0
|
|
5.5
|
|
(1)
|
We calculate Annualized Adjusted EBITDAre by multiplying the Quarterly Adjusted EBITDAre by four.
|
|
Three Months Ended September 30,
|
|
|
Nine Months Ended September 30,
|
|
|
% Increase
|
||||||||||||||
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
|
Three months
|
|
|
Nine months
|
|
||||
FFO available to common stockholders
|
$
|
262.0
|
|
|
$
|
234.6
|
|
|
$
|
759.2
|
|
|
$
|
685.5
|
|
|
11.7
|
%
|
|
10.8
|
%
|
FFO per share (1)
|
$
|
0.82
|
|
|
$
|
0.81
|
|
|
$
|
2.43
|
|
|
$
|
2.39
|
|
|
1.2
|
%
|
|
1.7
|
%
|
|
Three Months Ended September 30,
|
|
|
Nine Months Ended September 30,
|
|
||||||||||
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
||||
Net income available to common stockholders
|
$
|
101,049
|
|
|
$
|
98,999
|
|
|
$
|
307,185
|
|
|
$
|
278,542
|
|
Depreciation and amortization
|
149,424
|
|
|
136,967
|
|
|
437,367
|
|
|
402,069
|
|
||||
Depreciation of furniture, fixtures and equipment
|
(136
|
)
|
|
(166
|
)
|
|
(438
|
)
|
|
(493
|
)
|
||||
Provisions for impairment
|
13,503
|
|
|
6,862
|
|
|
31,236
|
|
|
25,034
|
|
||||
Gain on sales of real estate
|
(1,674
|
)
|
|
(7,813
|
)
|
|
(15,828
|
)
|
|
(18,818
|
)
|
||||
FFO adjustments allocable to noncontrolling interests
|
(135
|
)
|
|
(299
|
)
|
|
(327
|
)
|
|
(820
|
)
|
||||
FFO available to common stockholders
|
$
|
262,031
|
|
|
$
|
234,550
|
|
|
$
|
759,195
|
|
|
$
|
685,514
|
|
FFO allocable to dilutive noncontrolling interests
|
362
|
|
|
217
|
|
|
1,032
|
|
|
667
|
|
||||
Diluted FFO
|
$
|
262,393
|
|
|
$
|
234,767
|
|
|
$
|
760,227
|
|
|
$
|
686,181
|
|
|
|
|
|
|
|
|
|
||||||||
FFO per common share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.82
|
|
|
$
|
0.81
|
|
|
$
|
2.44
|
|
|
$
|
2.39
|
|
Diluted
|
$
|
0.82
|
|
|
$
|
0.81
|
|
|
$
|
2.43
|
|
|
$
|
2.39
|
|
|
|
|
|
|
|
|
|
||||||||
Distributions paid to common stockholders
|
$
|
216,248
|
|
|
$
|
191,703
|
|
|
$
|
629,658
|
|
|
$
|
564,747
|
|
FFO available to common stockholders in excess of distributions paid to common stockholders
|
$
|
45,783
|
|
|
$
|
42,847
|
|
|
$
|
129,537
|
|
|
$
|
120,767
|
|
Weighted average number of common shares used for computation per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
319,945,932
|
|
|
290,664,368
|
|
|
311,556,279
|
|
|
286,599,191
|
|
||||
Diluted
|
320,726,136
|
|
|
291,207,186
|
|
|
312,300,391
|
|
|
287,105,285
|
|
|
Three Months Ended September 30,
|
|
|
Nine Months Ended September 30,
|
|
|
% Increase
|
||||||||||||||
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
|
Three months
|
|
|
Nine months
|
|
||||
AFFO available to common stockholders
|
$
|
265.4
|
|
|
$
|
236.2
|
|
|
$
|
768.0
|
|
|
$
|
687.7
|
|
|
12.4
|
%
|
|
11.7
|
%
|
AFFO per share (1)
|
$
|
0.83
|
|
|
$
|
0.81
|
|
|
$
|
2.46
|
|
|
$
|
2.40
|
|
|
2.5
|
%
|
|
2.5
|
%
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|
||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
||||
Net income available to common stockholders
|
$
|
101,049
|
|
$
|
98,999
|
|
$
|
307,185
|
|
$
|
278,542
|
|
Cumulative adjustments to calculate FFO (1)
|
160,982
|
|
135,551
|
|
452,010
|
|
406,972
|
|
||||
FFO available to common stockholders
|
262,031
|
|
234,550
|
|
759,195
|
|
685,514
|
|
||||
Amortization of share-based compensation
|
3,187
|
|
3,870
|
|
10,478
|
|
12,527
|
|
||||
Amortization of deferred financing costs (2)
|
1,299
|
|
1,014
|
|
3,471
|
|
2,872
|
|
||||
Amortization of net mortgage premiums
|
(354
|
)
|
(354
|
)
|
(1,061
|
)
|
(1,167
|
)
|
||||
Loss (gain) on interest rate swaps
|
694
|
|
(265
|
)
|
2,058
|
|
(3,064
|
)
|
||||
Straight-line payments from cross-currency swaps (3)
|
1,754
|
|
—
|
|
2,553
|
|
—
|
|
||||
Leasing costs and commissions
|
(851
|
)
|
(379
|
)
|
(1,880
|
)
|
(2,831
|
)
|
||||
Recurring capital expenditures
|
(406
|
)
|
(382
|
)
|
(577
|
)
|
(529
|
)
|
||||
Straight-line rent
|
(7,642
|
)
|
(6,575
|
)
|
(19,735
|
)
|
(18,207
|
)
|
||||
Amortization of above and below-market leases
|
5,486
|
|
4,655
|
|
13,227
|
|
12,426
|
|
||||
Other adjustments (4)
|
157
|
|
61
|
|
297
|
|
203
|
|
||||
Total AFFO available to common stockholders
|
$
|
265,355
|
|
$
|
236,195
|
|
$
|
768,026
|
|
$
|
687,744
|
|
AFFO allocable to dilutive noncontrolling interests
|
368
|
|
227
|
|
1,064
|
|
692
|
|
||||
Diluted AFFO
|
$
|
265,723
|
|
$
|
236,422
|
|
$
|
769,090
|
|
$
|
688,436
|
|
|
|
|
|
|
||||||||
AFFO per common share:
|
|
|
|
|
||||||||
Basic
|
$
|
0.83
|
|
$
|
0.81
|
|
$
|
2.47
|
|
$
|
2.40
|
|
Diluted
|
$
|
0.83
|
|
$
|
0.81
|
|
$
|
2.46
|
|
$
|
2.40
|
|
|
|
|
|
|
||||||||
Distributions paid to common stockholders
|
$
|
216,248
|
|
$
|
191,703
|
|
$
|
629,658
|
|
$
|
564,747
|
|
|
|
|
|
|
||||||||
AFFO available to common stockholders in excess of distributions paid to common stockholders
|
$
|
49,107
|
|
$
|
44,492
|
|
$
|
138,368
|
|
$
|
122,997
|
|
Weighted average number of common shares used for computation per share:
|
|
|
|
|
||||||||
Basic
|
319,945,932
|
|
290,664,368
|
|
311,556,279
|
|
286,599,191
|
|
||||
Diluted
|
320,726,136
|
|
291,207,186
|
|
312,300,391
|
|
287,105,285
|
|
(1)
|
See reconciling items for FFO presented under “Funds from Operations Available to Common Stockholders (FFO).”
|
(2)
|
Includes the amortization of costs incurred and capitalized upon issuance of our notes payable, assumption of our mortgages payable and upon issuance of our term loans. The deferred financing costs are being amortized over the lives of the respective mortgages and term loans. No costs associated with our credit facility agreements or annual fees paid to credit rating agencies have been included.
|
(3)
|
Straight-line payments from cross-currency swaps represent quarterly payments in U.S. dollars received by us from counterparties in exchange for associated foreign currency payments. These USD payments are fixed and determinable for the duration of the associated hedging transaction.
|
(4)
|
Includes adjustments allocable to noncontrolling interests, obligations related to financing lease liabilities, and foreign currency gains and losses as a result of intercompany debt and remeasurement transactions.
|
•
|
Of 5,964 properties;
|
•
|
With an occupancy rate of 98.3%, or 5,862 properties leased and 102 properties available for lease;
|
•
|
Leased to 274 different commercial tenants doing business in 49 separate industries;
|
•
|
Located in 49 U.S. states, Puerto Rico and the U.K.;
|
•
|
With over 100.5 million square feet of leasable space; and
|
•
|
With an average leasable space per property of approximately 16,852 square feet; approximately 11,873 square feet per retail property and 237,668 square feet per industrial property.
|
Percentage of Rental Revenue (excluding reimbursable) by Industry
|
|||||||||||||||||||||||
|
For the
Quarter Ended
September 30, 2019
|
|
|
|
For the Years Ended
|
||||||||||||||||||
|
|
|
Dec 31,
2018
|
|
|
|
Dec 31,
2017
|
|
|
|
Dec 31,
2016
|
|
|
|
Dec 31,
2015
|
|
|
|
Dec 31,
2014
|
|
|
||
U.S.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Aerospace
|
0.8
|
%
|
|
|
0.8
|
%
|
|
|
0.9
|
%
|
|
|
1.0
|
%
|
|
|
1.1
|
%
|
|
|
1.2
|
%
|
|
Apparel stores
|
1.1
|
|
|
|
1.3
|
|
|
|
1.6
|
|
|
|
1.9
|
|
|
|
2.0
|
|
|
|
2.0
|
|
|
Automotive collision services
|
1.2
|
|
|
|
0.9
|
|
|
|
1.0
|
|
|
|
1.0
|
|
|
|
1.0
|
|
|
|
0.8
|
|
|
Automotive parts
|
1.5
|
|
|
|
1.7
|
|
|
|
1.3
|
|
|
|
1.3
|
|
|
|
1.4
|
|
|
|
1.3
|
|
|
Automotive service
|
2.4
|
|
|
|
2.2
|
|
|
|
2.2
|
|
|
|
1.9
|
|
|
|
1.9
|
|
|
|
1.8
|
|
|
Automotive tire services
|
2.2
|
|
|
|
2.4
|
|
|
|
2.6
|
|
|
|
2.7
|
|
|
|
2.9
|
|
|
|
3.2
|
|
|
Beverages
|
2.2
|
|
|
|
2.5
|
|
|
|
2.7
|
|
|
|
2.6
|
|
|
|
2.7
|
|
|
|
2.8
|
|
|
Child care
|
2.2
|
|
|
|
1.7
|
|
|
|
1.8
|
|
|
|
1.9
|
|
|
|
2.0
|
|
|
|
2.2
|
|
|
Consumer appliances
|
0.5
|
|
|
|
0.5
|
|
|
|
0.5
|
|
|
|
0.5
|
|
|
|
0.6
|
|
|
|
0.5
|
|
|
Consumer electronics
|
0.3
|
|
|
|
0.3
|
|
|
|
0.3
|
|
|
|
0.3
|
|
|
|
0.3
|
|
|
|
0.3
|
|
|
Consumer goods
|
0.6
|
|
|
|
0.7
|
|
|
|
0.8
|
|
|
|
0.9
|
|
|
|
0.9
|
|
|
|
0.9
|
|
|
Convenience stores
|
11.6
|
|
|
|
11.2
|
|
|
|
9.6
|
|
|
|
8.7
|
|
|
|
9.2
|
|
|
|
10.1
|
|
|
Crafts and novelties
|
0.6
|
|
|
|
0.7
|
|
|
|
0.6
|
|
|
|
0.6
|
|
|
|
0.6
|
|
|
|
0.6
|
|
|
Diversified industrial
|
0.7
|
|
|
|
0.8
|
|
|
|
0.9
|
|
|
|
0.9
|
|
|
|
0.8
|
|
|
|
0.5
|
|
|
Dollar stores
|
7.1
|
|
|
|
7.5
|
|
|
|
7.9
|
|
|
|
8.6
|
|
|
|
8.9
|
|
|
|
9.6
|
|
|
Drug stores
|
8.9
|
|
|
|
10.2
|
|
|
|
10.9
|
|
|
|
11.2
|
|
|
|
10.6
|
|
|
|
9.5
|
|
|
Education
|
0.2
|
|
|
|
0.3
|
|
|
|
0.3
|
|
|
|
0.3
|
|
|
|
0.3
|
|
|
|
0.4
|
|
|
Electric utilities
|
0.1
|
|
|
|
0.1
|
|
|
|
0.1
|
|
|
|
0.1
|
|
|
|
0.1
|
|
|
|
0.1
|
|
|
Entertainment
|
0.4
|
|
|
|
0.4
|
|
|
|
0.4
|
|
|
|
0.5
|
|
|
|
0.5
|
|
|
|
0.5
|
|
|
Equipment services
|
0.4
|
|
|
|
0.4
|
|
|
|
0.4
|
|
|
|
0.6
|
|
|
|
0.5
|
|
|
|
0.6
|
|
|
Financial services
|
2.1
|
|
|
|
2.3
|
|
|
|
2.4
|
|
|
|
1.8
|
|
|
|
1.7
|
|
|
|
1.8
|
|
|
Food processing
|
0.5
|
|
|
|
0.5
|
|
|
|
0.6
|
|
|
|
1.1
|
|
|
|
1.2
|
|
|
|
1.4
|
|
|
General merchandise
|
2.7
|
|
|
|
2.3
|
|
|
|
2.0
|
|
|
|
1.8
|
|
|
|
1.7
|
|
|
|
1.5
|
|
|
Government services
|
0.7
|
|
|
|
0.9
|
|
|
|
1.0
|
|
|
|
1.1
|
|
|
|
1.2
|
|
|
|
1.3
|
|
|
Grocery stores
|
5.0
|
|
|
|
5.0
|
|
|
|
4.4
|
|
|
|
3.1
|
|
|
|
3.0
|
|
|
|
3.0
|
|
|
Health and beauty
|
0.3
|
|
|
|
0.2
|
|
|
|
*
|
|
|
|
*
|
|
|
|
*
|
|
|
|
*
|
|
|
Health and fitness
|
7.4
|
|
|
|
7.4
|
|
|
|
7.5
|
|
|
|
8.1
|
|
|
|
7.7
|
|
|
|
7.0
|
|
|
Health care
|
1.4
|
|
|
|
1.5
|
|
|
|
1.4
|
|
|
|
1.5
|
|
|
|
1.7
|
|
|
|
1.8
|
|
|
Home furnishings
|
0.7
|
|
|
|
0.8
|
|
|
|
0.9
|
|
|
|
0.8
|
|
|
|
0.9
|
|
|
|
0.9
|
|
|
Home improvement
|
3.1
|
|
|
|
3.0
|
|
|
|
2.6
|
|
|
|
2.5
|
|
|
|
2.4
|
|
|
|
1.7
|
|
|
Insurance
|
*
|
|
|
|
0.1
|
|
|
|
0.1
|
|
|
|
0.1
|
|
|
|
0.1
|
|
|
|
0.1
|
|
|
Jewelry
|
*
|
|
|
|
0.1
|
|
|
|
0.1
|
|
|
|
0.1
|
|
|
|
0.1
|
|
|
|
0.1
|
|
|
Machinery
|
0.1
|
|
|
|
0.1
|
|
|
|
0.1
|
|
|
|
0.1
|
|
|
|
0.1
|
|
|
|
0.2
|
|
|
Motor vehicle dealerships
|
1.7
|
|
|
|
1.9
|
|
|
|
2.1
|
|
|
|
1.9
|
|
|
|
1.6
|
|
|
|
1.6
|
|
|
Office supplies
|
0.2
|
|
|
|
0.2
|
|
|
|
0.2
|
|
|
|
0.3
|
|
|
|
0.3
|
|
|
|
0.4
|
|
|
Other manufacturing
|
0.6
|
|
|
|
0.7
|
|
|
|
0.8
|
|
|
|
0.8
|
|
|
|
0.7
|
|
|
|
0.7
|
|
|
Packaging
|
1.0
|
|
|
|
1.1
|
|
|
|
1.0
|
|
|
|
0.8
|
|
|
|
0.8
|
|
|
|
0.8
|
|
|
Paper
|
0.1
|
|
|
|
0.1
|
|
|
|
0.1
|
|
|
|
0.1
|
|
|
|
0.1
|
|
|
|
0.1
|
|
|
Pet supplies and services
|
0.6
|
|
|
|
0.5
|
|
|
|
0.6
|
|
|
|
0.6
|
|
|
|
0.7
|
|
|
|
0.7
|
|
|
Restaurants - casual dining
|
3.1
|
|
|
|
3.2
|
|
|
|
3.8
|
|
|
|
3.9
|
|
|
|
3.8
|
|
|
|
4.3
|
|
|
Restaurants - quick service
|
6.1
|
|
|
|
5.7
|
|
|
|
5.1
|
|
|
|
4.9
|
|
|
|
4.2
|
|
|
|
3.7
|
|
|
Shoe stores
|
0.3
|
|
|
|
0.5
|
|
|
|
0.6
|
|
|
|
0.7
|
|
|
|
0.7
|
|
|
|
0.9
|
|
|
Sporting goods
|
0.8
|
|
|
|
1.1
|
|
|
|
1.4
|
|
|
|
1.6
|
|
|
|
1.8
|
|
|
|
1.6
|
|
|
Telecommunications
|
0.5
|
|
|
|
0.6
|
|
|
|
0.6
|
|
|
|
0.6
|
|
|
|
0.7
|
|
|
|
0.7
|
|
|
Theaters
|
6.7
|
|
|
|
5.5
|
|
|
|
5.0
|
|
|
|
4.9
|
|
|
|
5.1
|
|
|
|
5.3
|
|
|
Transportation services
|
4.6
|
|
|
|
5.0
|
|
|
|
5.4
|
|
|
|
5.5
|
|
|
|
5.4
|
|
|
|
5.2
|
|
|
Wholesale clubs
|
2.7
|
|
|
|
3.0
|
|
|
|
3.3
|
|
|
|
3.6
|
|
|
|
3.8
|
|
|
|
4.1
|
|
|
Other
|
0.1
|
|
|
|
0.1
|
|
|
|
0.1
|
|
|
|
0.2
|
|
|
|
0.2
|
|
|
|
0.2
|
|
|
Total U.S.
|
98.1
|
%
|
|
|
100.0
|
%
|
|
|
100.0
|
%
|
|
|
100.0
|
%
|
|
|
100.0
|
%
|
|
|
100.0
|
%
|
|
U.K.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Grocery Stores
|
1.9
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Total U.K.
|
1.9
|
%
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Totals
|
100.0
|
%
|
|
|
100.0
|
%
|
|
|
100.0
|
%
|
|
|
100.0
|
%
|
|
|
100.0
|
%
|
|
|
100.0
|
%
|
|
*
|
Less than 0.1%
|
Property Type
|
Number of
Properties
|
Approximate
Leasable
Square Feet (1)
|
Rental Revenue for the
Quarter Ended
September 30, 2019 (2)
|
|
Percentage of
Rental Revenue
|
|
|
Retail
|
5,787
|
68,708,100
|
$
|
295,202
|
|
82.7
|
%
|
Industrial
|
120
|
28,520,100
|
41,395
|
|
11.6
|
|
|
Office
|
42
|
3,091,500
|
13,418
|
|
3.8
|
|
|
Agriculture
|
15
|
184,500
|
6,708
|
|
1.9
|
|
|
Totals
|
5,964
|
100,504,200
|
$
|
356,723
|
|
100.0
|
%
|
(1)
|
Includes leasable building square footage. Excludes 3,300 acres of leased land categorized as agriculture at September 30, 2019.
|
(2)
|
Includes rental revenue for all properties owned at September 30, 2019. Excludes revenue of $66 from sold properties and rental revenue (reimbursable) of $15,523.
|
Tenant
|
Number of
Leases
|
|
% of Rental
Revenue (1)
|
|
Walgreens
|
215
|
|
5.7
|
%
|
7-Eleven
|
398
|
|
5.1
|
%
|
FedEx
|
42
|
|
4.4
|
%
|
Dollar General
|
609
|
|
3.8
|
%
|
LA Fitness
|
55
|
|
3.6
|
%
|
AMC Theatres
|
34
|
|
3.2
|
%
|
Dollar Tree / Family Dollar
|
469
|
|
3.1
|
%
|
Regal Cinemas
|
41
|
|
3.1
|
%
|
Wal-Mart / Sam's Club
|
54
|
|
2.8
|
%
|
Lifetime Fitness
|
14
|
|
2.3
|
%
|
Circle K (Couche-Tard)
|
287
|
|
2.1
|
%
|
Sainsbury's
|
13
|
|
2.0
|
%
|
BJ's Wholesale Clubs
|
15
|
|
1.9
|
%
|
Treasury Wine Estates
|
17
|
|
1.8
|
%
|
CVS Pharmacy
|
84
|
|
1.7
|
%
|
Kroger
|
22
|
|
1.7
|
%
|
Super America (Marathon)
|
137
|
|
1.5
|
%
|
GPM Investments / Fas Mart
|
208
|
|
1.5
|
%
|
TBC Corp
|
159
|
|
1.4
|
%
|
Home Depot
|
17
|
|
1.3
|
%
|
Totals
|
2,890
|
|
54.0
|
%
|
(1)
|
Excludes rental revenue (reimbursable).
|
|
Retail Rental Revenue for the Quarter Ended
September 30, 2019 (1)
|
|
Percentage of Retail Rental Revenue
|
|
|
Tenants Providing Services
|
|
|
|||
Automotive collision services
|
$
|
4,293
|
|
1.5
|
%
|
Automotive service
|
8,505
|
|
2.9
|
|
|
Child care
|
7,864
|
|
2.7
|
|
|
Education
|
827
|
|
0.3
|
|
|
Entertainment
|
1,327
|
|
0.5
|
|
|
Equipment services
|
114
|
|
*
|
|
|
Financial services
|
6,561
|
|
2.2
|
|
|
Health and fitness
|
26,359
|
|
8.9
|
|
|
Health care
|
2,086
|
|
0.7
|
|
|
Telecommunications
|
80
|
|
*
|
|
|
Theaters
|
23,972
|
|
8.1
|
|
|
Transportation services
|
250
|
|
0.1
|
|
|
Other
|
197
|
|
0.1
|
|
|
|
82,435
|
|
28.0
|
|
|
Tenants Selling Goods and Services
|
|
|
|||
Automotive parts (with installation)
|
1,704
|
|
0.6
|
|
|
Automotive tire services
|
7,766
|
|
2.6
|
|
|
Convenience stores
|
41,152
|
|
13.9
|
|
|
Health and beauty
|
13
|
|
*
|
|
|
Motor vehicle dealerships
|
6,033
|
|
2.0
|
|
|
Pet supplies and services
|
1,240
|
|
0.4
|
|
|
Restaurants - casual dining
|
10,264
|
|
3.5
|
|
|
Restaurants - quick service
|
21,880
|
|
7.4
|
|
|
|
90,052
|
|
30.4
|
|
|
Tenants Selling Goods
|
|
|
|||
Apparel stores
|
4,001
|
|
1.4
|
|
|
Automotive parts
|
3,380
|
|
1.1
|
|
|
Book stores
|
113
|
|
*
|
|
|
Consumer electronics
|
1,112
|
|
0.4
|
|
|
Crafts and novelties
|
1,908
|
|
0.6
|
|
|
Dollar stores
|
25,209
|
|
8.5
|
|
|
Drug stores
|
30,390
|
|
10.3
|
|
|
General merchandise
|
7,239
|
|
2.5
|
|
|
Grocery stores
|
17,662
|
|
6.0
|
|
|
Grocery stores - UK
|
6,525
|
|
2.2
|
|
|
Home furnishings
|
2,167
|
|
0.7
|
|
|
Home improvement
|
9,624
|
|
3.3
|
|
|
Jewelry
|
175
|
|
0.1
|
|
|
Office supplies
|
569
|
|
0.2
|
|
|
Shoe stores
|
185
|
|
0.1
|
|
|
Sporting goods
|
2,988
|
|
1.0
|
|
|
Wholesale clubs
|
9,468
|
|
3.2
|
|
|
|
122,715
|
|
41.6
|
%
|
|
Totals
|
$
|
295,202
|
|
100.0
|
%
|
*
|
Less than 0.1%
|
(1)
|
Includes rental revenue for all retail leases for properties owned at September 30, 2019. Excludes revenue of $61,521 from non-retail leases, $66 from sold properties, and $15,523 of rental revenue (reimbursable).
|
Total Portfolio(1)
|
|||||||||
|
Expiring
Leases
|
Approx.
Leasable
Sq. Feet
|
|
Rental Revenue for
the Quarter Ended
September 30, 2019
|
|
% of
Rental
Revenue
|
|
||
Year
|
Retail
|
Non-Retail
|
|||||||
2019
|
49
|
4
|
383,400
|
|
$
|
1,729
|
|
0.5
|
%
|
2020
|
216
|
10
|
2,962,500
|
|
10,424
|
|
2.9
|
|
|
2021
|
327
|
16
|
5,288,900
|
|
15,297
|
|
4.3
|
|
|
2022
|
410
|
22
|
9,332,000
|
|
21,145
|
|
5.9
|
|
|
2023
|
541
|
23
|
9,973,300
|
|
30,687
|
|
8.6
|
|
|
2024
|
389
|
16
|
6,632,100
|
|
21,267
|
|
6.0
|
|
|
2025
|
365
|
16
|
6,582,500
|
|
23,736
|
|
6.7
|
|
|
2026
|
310
|
4
|
4,861,900
|
|
15,747
|
|
4.4
|
|
|
2027
|
523
|
5
|
6,318,000
|
|
21,977
|
|
6.1
|
|
|
2028
|
340
|
14
|
9,330,300
|
|
22,924
|
|
6.4
|
|
|
2029
|
422
|
7
|
8,413,100
|
|
23,832
|
|
6.7
|
|
|
2030
|
176
|
14
|
3,822,700
|
|
19,064
|
|
5.4
|
|
|
2031
|
313
|
25
|
6,176,200
|
|
28,141
|
|
7.9
|
|
|
2032
|
109
|
4
|
3,369,900
|
|
13,204
|
|
3.7
|
|
|
2033
|
275
|
1
|
3,239,600
|
|
16,955
|
|
4.8
|
|
|
2034-2044
|
987
|
6
|
11,902,800
|
|
70,008
|
|
19.7
|
|
|
Totals
|
5,752
|
187
|
98,589,200
|
|
$
|
356,137
|
|
100.0
|
%
|
(1)
|
The lease expirations for leases under construction are based on the estimated date of completion of those projects. Excludes revenue of $586 from 120 expired leases, $66 from sold properties, and $15,523 of rental revenue (reimbursable) at September 30, 2019. Leases on our multi-tenant properties are counted separately in the table above.
|
Location
|
Number of Properties
|
|
Percent Leased
|
|
Approximate Leasable
Square Feet
|
Rental Revenue
for the Quarter Ended
September 30, 2019 (1)
|
|
Percentage of Rental
Revenue
|
|
|
Alabama
|
170
|
|
97
|
%
|
1,594,400
|
$
|
5,973
|
|
1.7
|
%
|
Alaska
|
3
|
|
100
|
|
274,600
|
535
|
|
0.1
|
|
|
Arizona
|
119
|
|
100
|
|
1,823,200
|
7,296
|
|
2.1
|
|
|
Arkansas
|
86
|
|
100
|
|
919,900
|
2,460
|
|
0.7
|
|
|
California
|
200
|
|
99
|
|
6,394,800
|
31,428
|
|
8.8
|
|
|
Colorado
|
97
|
|
95
|
|
1,554,800
|
5,894
|
|
1.7
|
|
|
Connecticut
|
21
|
|
95
|
|
1,378,200
|
3,279
|
|
0.9
|
|
|
Delaware
|
18
|
|
100
|
|
93,000
|
661
|
|
0.2
|
|
|
Florida
|
399
|
|
98
|
|
4,360,300
|
19,362
|
|
5.4
|
|
|
Georgia
|
285
|
|
97
|
|
4,402,200
|
13,881
|
|
3.9
|
|
|
Idaho
|
12
|
|
100
|
|
87,000
|
398
|
|
0.1
|
|
|
Illinois
|
280
|
|
99
|
|
6,227,600
|
21,898
|
|
6.1
|
|
|
Indiana
|
192
|
|
99
|
|
2,353,400
|
9,409
|
|
2.6
|
|
|
Iowa
|
39
|
|
95
|
|
3,028,500
|
4,400
|
|
1.2
|
|
|
Kansas
|
112
|
|
96
|
|
2,097,500
|
5,883
|
|
1.6
|
|
|
Kentucky
|
84
|
|
99
|
|
1,721,700
|
4,885
|
|
1.4
|
|
|
Louisiana
|
120
|
|
97
|
|
1,682,700
|
5,410
|
|
1.6
|
|
|
Maine
|
18
|
|
100
|
|
203,700
|
1,225
|
|
0.3
|
|
|
Maryland
|
38
|
|
100
|
|
1,494,000
|
5,236
|
|
1.5
|
|
|
Massachusetts
|
58
|
|
91
|
|
782,100
|
3,851
|
|
1.1
|
|
|
Michigan
|
195
|
|
99
|
|
2,224,200
|
7,819
|
|
2.2
|
|
|
Minnesota
|
166
|
|
98
|
|
2,261,100
|
10,613
|
|
3.0
|
|
|
Mississippi
|
172
|
|
98
|
|
1,892,900
|
5,509
|
|
1.5
|
|
|
Missouri
|
176
|
|
95
|
|
2,837,900
|
9,136
|
|
2.6
|
|
|
Montana
|
12
|
|
100
|
|
89,100
|
552
|
|
0.2
|
|
|
Nebraska
|
46
|
|
100
|
|
708,800
|
1,763
|
|
0.5
|
|
|
Nevada
|
24
|
|
96
|
|
1,196,900
|
2,147
|
|
0.6
|
|
|
New Hampshire
|
13
|
|
100
|
|
313,100
|
1,404
|
|
0.4
|
|
|
New Jersey
|
75
|
|
99
|
|
1,051,300
|
5,866
|
|
1.6
|
|
|
New Mexico
|
36
|
|
100
|
|
375,100
|
1,277
|
|
0.4
|
|
|
New York
|
127
|
|
99
|
|
2,868,800
|
15,736
|
|
4.4
|
|
|
North Carolina
|
191
|
|
99
|
|
3,183,200
|
10,773
|
|
3.0
|
|
|
North Dakota
|
5
|
|
100
|
|
95,700
|
178
|
|
*
|
|
|
Ohio
|
312
|
|
98
|
|
7,649,200
|
17,414
|
|
4.9
|
|
|
Oklahoma
|
183
|
|
99
|
|
2,247,000
|
7,655
|
|
2.1
|
|
|
Oregon
|
28
|
|
100
|
|
591,500
|
2,338
|
|
0.7
|
|
|
Pennsylvania
|
222
|
|
98
|
|
2,226,900
|
10,962
|
|
3.1
|
|
|
Rhode Island
|
3
|
|
100
|
|
158,000
|
815
|
|
0.2
|
|
|
South Carolina
|
179
|
|
96
|
|
1,791,200
|
8,181
|
|
2.3
|
|
|
South Dakota
|
18
|
|
100
|
|
203,700
|
476
|
|
0.1
|
|
|
Tennessee
|
249
|
|
99
|
|
3,676,800
|
11,497
|
|
3.2
|
|
|
Texas
|
720
|
|
99
|
|
10,815,700
|
39,237
|
|
11.0
|
|
|
Utah
|
22
|
|
100
|
|
933,000
|
2,267
|
|
0.6
|
|
|
Vermont
|
2
|
|
100
|
|
88,000
|
365
|
|
0.1
|
|
|
Virginia
|
212
|
|
99
|
|
3,134,900
|
10,242
|
|
2.9
|
|
|
Washington
|
49
|
|
98
|
|
896,800
|
3,106
|
|
0.9
|
|
|
West Virginia
|
26
|
|
100
|
|
427,300
|
1,463
|
|
0.4
|
|
|
Wisconsin
|
125
|
|
98
|
|
2,834,400
|
7,484
|
|
2.1
|
|
|
Wyoming
|
8
|
|
100
|
|
60,800
|
317
|
|
0.1
|
|
|
Puerto Rico
|
4
|
|
100
|
|
28,300
|
149
|
|
*
|
|
|
U.K.
|
13
|
|
100
|
|
1,169,000
|
6,618
|
|
1.9
|
|
|
Totals\Average
|
5,964
|
|
98
|
%
|
100,504,200
|
$
|
356,723
|
|
100.0
|
%
|
*
|
Less than 0.1%
|
(1)
|
Includes rental revenue for all properties owned at September 30, 2019. Excludes revenue of $66 from sold properties and $15,523 of tenant reimbursement revenue.
|
•
|
Powering down office equipment at the end of the day;
|
•
|
Implementing file-sharing technology and automatic “duplex mode” to limit paper use;
|
•
|
Adopting electronic approval systems;
|
•
|
Encouraging employees to carpool to our headquarters; and
|
•
|
Recycling paper waste.
|
•
|
Our Board of Directors is currently comprised of nine directors, eight of whom are independent, non-employee directors;
|
•
|
In accordance with our continued focus on board refreshment, in July 2018, we added two new independent, non-employee directors;
|
•
|
Our Board of Directors is elected on an annual basis with a majority vote standard;
|
•
|
Our Directors conduct annual self-evaluations and participate in orientation and continuing education programs;
|
•
|
An Enterprise Risk Management evaluation is conducted annually to identify and assess company risk;
|
•
|
Each committee within our Board of Directors is comprised entirely of independent directors; and
|
•
|
We adhere to all other corporate governance principles outlined in our Corporate Governance Guidelines. These guidelines, as well as our bylaws, committee charters and other governance documents may be found on our website.
|
Year of Maturity
|
Fixed rate
debt
|
|
Weighted average rate
on fixed rate debt
|
|
|
2019
|
$
|
1.2
|
|
5.61
|
%
|
2020
|
332.4
|
|
3.21
|
|
|
2021
|
317.0
|
|
5.73
|
|
|
2022
|
1,059.7
|
|
3.43
|
|
|
2023
|
756.7
|
|
4.65
|
|
|
Thereafter
|
4,599.0
|
|
3.81
|
|
|
Totals (1)
|
$
|
7,066.0
|
|
3.90
|
%
|
Fair Value (2)
|
$
|
7,629.2
|
|
|
(1)
|
Excludes net premiums recorded on mortgages payable, net original issuance premiums recorded on notes payable and deferred financing costs on mortgages payable, notes payable, and term loans. At September 30, 2019, the unamortized balance of net premiums on mortgages payable is $3.3 million, the unamortized balance of net original issuance premiums on notes payable is $6.6 million, and the balance of deferred financing costs on mortgages payable is $143,000, on notes payable is $37.3 million, and on term loans is $1.1 million.
|
(2)
|
We base the estimated fair value of the publicly-traded fixed rate senior notes and bonds at September 30, 2019 on the indicative market prices and recent trading activity of our senior notes and bonds payable. We base the estimated fair value of our fixed rate and variable rate mortgages and private senior notes payable at September 30, 2019 on the relevant forward interest rate curve, plus an applicable credit-adjusted spread. We believe that the carrying value of the credit facility balance and term loans balance reasonably approximate their estimated fair values at September 30, 2019.
|
•
|
160 shares of stock, at a weighted average price of $68.03, in July 2019;
|
•
|
88 shares of stock, at a weighted average price of $69.67, in August 2019; and
|
•
|
428 shares of stock, at a weighted average price of $75.96, in September 2019.
|
Exhibit No.
|
|
Description
|
Articles of Incorporation and Bylaws
|
||
2.1
|
|
|
2.2
|
|
|
3.1
|
|
|
3.2
|
|
|
3.3
|
|
|
3.4
|
|
|
3.5
|
|
|
3.6
|
|
|
3.7
|
|
|
3.8
|
|
|
3.9
|
|
|
3.10
|
|
|
3.11
|
|
|
3.12
|
|
|
3.13
|
|
|
Instruments defining the rights of security holders, including indentures
|
||
4.1
|
|
|
4.2
|
|
|
4.3
|
|
|
4.4
|
|
|
4.5
|
|
|
4.6
|
|
|
4.7
|
|
|
4.8
|
|
|
4.9
|
|
4.10
|
|
|
4.11
|
|
|
4.12
|
|
|
4.13
|
|
|
4.14
|
|
|
4.15
|
|
|
4.16
|
|
|
4.17
|
|
|
4.18
|
|
|
4.19
|
|
|
4.20
|
|
|
4.21
|
|
|
4.22
|
|
|
4.23
|
|
|
4.24
|
|
|
4.25
|
|
|
4.26
|
|
|
4.27
|
|
|
Material Contracts
|
||
10.1
|
|
|
Certifications
|
||
*31.1
|
|
|
*31.2
|
|
|
*32
|
|
|
Interactive Data Files
|
||
*101
|
|
The following materials from Realty Income Corporation’s Quarterly Report on Form 10-Q for the period ended September 30, 2019 formatted in Inline Extensible Business Reporting Language: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Income and Comprehensive Income, (iii) Consolidated Statements of Stockholders' Equity, (iv) Consolidated Statements of Cash Flows, and (v) Notes to Consolidated Financial Statements.
|
*104
|
|
The cover page from the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2019, formatted in Inline Extensible Business Reporting Language.
|
* Filed herewith.
|
|
REALTY INCOME CORPORATION
|
|
|
Date: November 5, 2019
|
/s/ SEAN P. NUGENT
|
|
Sean P. Nugent
|
|
Senior Vice President, Controller
|
|
(Principal Accounting Officer)
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: November 5, 2019
|
|
/s/ SUMIT ROY
|
|
|
Sumit Roy
|
|
|
President, Chief Executive Officer
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
Date: November 5, 2019
|
|
/s/ PAUL M. MEURER
|
|
|
Paul M. Meurer
|
|
|
Executive Vice President, Chief Financial Officer and Treasurer
|
(i)
|
the accompanying quarterly report on Form 10-Q of the Company for the quarter ended September 30, 2019 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended (the “Act”); and
|
(ii)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
|
/s/ SUMIT ROY
|
|
|
Sumit Roy
|
|
|
President, Chief Executive Officer
|
|
|
/s/ PAUL M. MEURER
|
|
|
Paul M. Meurer
|
|
|
Executive Vice President, Chief Financial Officer and Treasurer
|