Crystallizing Value Creation & Market Overview
Benefits of Size and Scale
Capacity to Buy in Bulk at “Wholesale" Prices While
Maintaining Diversification
LARGER SIZE PROVIDES GROWTH OPTIONALITY
TRANSACTION SIZE & IMPACT(1)
TO RENT CONCENTRATION
TOTAL
ABR
$100
$200
$300 $400
$500
$1,000
$200
3%
6%
8%
11%
13%
23%
$400
1%
3%
4%
6%
7%
13%
$600
1%
2%
3%
4%
5%
9%
$800
1%
1%
2%
3%
4%
7%
$1,000
1%
1%
2%
2%
3%
6%
$1,900
<1%
<1%
<1%
1%
<2%
3%
$2,800(2)
<1%
<1%
<1%
<1%
1%
2%
$2.8 BILLION ABR
Increased scale post merger allows Realty Income
to pursue even larger sale-leaseback transactions
without compromising prudent client and industry
diversification metrics
(1) Assumes 6.0% cap rate | in millions.
(2) Estimated ABR post merger.
$1.2B
portfolio transaction
SCALE AND SIZE BENEFITS ILLUSTRATED
REALTY INCOME
Peers with smaller
denominators lack
ability to buy in bulk
without incurring
material
diversification risk
CIM Transaction (Dec 2019)
at ~7% cap rate
•
444
single-client
properties
~9.5Y
•
Realty Income estimates cap rate represented a
portfolio discount relative to sum-of-the-parts valuation
Top 3 client concentration - Dollar General, Walgreens,
Dollar Tree / Family Dollar
Negligible impact to key portfolio concentrations:
Dollar General
3.8%
4.4%
WALT
Dollar Tree / Family Dollar
3.1%
3.5%
Walgreens
5.7%
6.1%
58%
Dollar Stores
7.1%
8.0%
investment-grade
clients
Walgreens
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