Curating Best-in-Class Portfolio
Net Lease Investment Opportunity Set
is Not Constrained by Property Type
Diageo Transaction in 2010: Template for Creative Sale-Leaseback Opportunities
REALTY INCOME
REALTY INCOME
INVESTMENT CRITERIA
Triple Net Lease
LEASE
Long Lease Term
REAL ESTATE
CLIENT
Single-Client
Commercial Property
Strategic Location
Investment Grade Rated
Strong Financial Position
Industry Leader
DIAGEO PORTFOLIO
ATTRIBUTES
Triple Net, Sale-Leaseback
Transaction
20-year term with extension options
for up to 60 years
17 Vineyards leased to Diageo
Napa Valley
A-/A3/A-
Low leverage, strong coverage ratios,
and solid free cash flow generation
Diageo is a leading global premium
drink company (brands include
Smirnoff, Baileys, Don Julio,
Tanqueray and Guinness)
QUANTIFYING VALUE OF THE
INVESTMENT GRADE CREDIT
In 2016-2017, Diageo paid $75 mm for a
release of the guarantee, reducing Realty
Income's cost basis by ~25% and resulting in
a 10% adjusted cap rate. Treasury Wine Estates,
which has lower corporate leverage but no
public debt outstanding, assumed the
corporate guarantee.
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