Crystallizing Value Creation & Market Overview
REALTY
INCOME
Capital-Light Real Estate Portfolio
is a Differentiating Factor vs Other
Property Types
"HIDDEN" COST OF SUPPORTING PORTFOLIO REVENUE:
RARELY CAPTURED IN NAREIT-DEFINED FFO MULTIPLES....
NAREIT-DEFINED FUNDS FROM OPERATIONS (FFO)
(NOT INTENDED TO MEASURE CASH GENERATION OR DIVIDEND
PAYING CAPACITY)
Recurring Capital Expenditures as % of NOI:
Realty Income vs. Competing Real Estate Sectors (1)
Less than 1% of Realty Income's
NOI is spent on recurring capex
9.2%
Generally used as primary valuation multiple for other
Real Estate sectors and excludes recurring Capex
associated with maintaining revenue-generating
capacity of portfolio
0.6%
5.2%
7.6%
7.2%
6.9%
Healthcare
Shopping Center
Office
Industrial
Mall
Source: SNL, Company Filings.
(1) Analysis represents simple average of 52 representative companies across five property types. Based on annual data between
2012 and 2020.
....BUT IS BETTER REFLECTED IN AFFO MULTIPLES
ADJUSTED FFO (AFFO)
(CLOSE PROXY FOR RECURRING CASH EARNINGS)
Generally used as a valuation metric for net lease
sector and includes impact of recurring Capex (defined
by Realty as mandatory and repetitive landlord capex
obligations that have a limited useful life)
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