Crystallizing Value Creation & Market Overview
Credit Valuation Arbitrage:
Acquiring Cash Flow from Blue-Chip Operators
at Attractive Real Estate Spreads
NET LEASE ACQUISITIONS GENERATE PREMIUM
INCOME STREAM RELATIVE TO BONDS
Top 50 Clients Represent (2)
~70%
of total annual
rent
~40%
of total annual rent from
clients with public ~10-yr
notes outstanding
-60%
of Top 50 clients
have an investment
grade credit rating(3)
Walgreens 7-ELEVEN. CIRCLE K
BBB-/Baa3
weighted average
credit rating
❤CVS pharmacy LOWE'S
THE
HOME
DEPOT
FedEx. DOLLAR GENERAL
amcor
TESCO
TSC
TRACTOR
SUPPLY CO
Kroger
DOLLAR TREE
O'Reilly Walmart TBC
Advance
Auto Parts
AUTO PARTS
CORPORATION
Source: Bloomberg
(1) Weighted average (by rent) ~10-year bond yields as of 9/30/2021.
(2) As of 9/30/2021.
(3) As measured by rent. -15% of clients (by rent) are not rated. Investment grade clients are clients with a credit rating of
Baa3/BBB- or higher from one of the three major rating agencies (Moody's/S&P/Fitch).
Realty Income's
acquisitions generate
~300 bps spread over
comparable bond yields
246 bps
550 bps
(1)
Top 50 Client 10-Year Bond Yields
3Q21 Acquisition Cap Rate
REALTY
INCOME
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