Realty Income Corporation reported its fourth‑quarter and full‑year 2025 results on February 24, 2026. Adjusted Funds from Operations (AFFO) per share for the quarter was $1.08, exactly matching the consensus estimate, while total revenue reached $1.49 billion, surpassing the $1.46 billion consensus by $30 million.
Revenue growth was driven by a 98.9% portfolio occupancy and a 104.9% rent‑recapture rate on re‑leased properties. The company invested $2.4 billion in new assets during the quarter, a 7.1% initial cash yield, and $6.3 billion over the full year, a 7.3% yield. These investments, combined with strong demand for retail and office space, lifted revenue above expectations despite a modest $100 million increase in interest expense that partially offset earnings gains.
AFFO of $1.08 per share matched the $1.08 consensus, a result of disciplined cost management and the high‑margin mix of its portfolio. Compared with Q4 2024, AFFO rose from $1.05 to $1.08, and revenue climbed from $1.34 billion to $1.49 billion, a 11% year‑over‑year increase. The beat in revenue was largely attributable to the company’s ability to maintain high occupancy and capture rent growth, while the EPS met expectations thanks to effective expense control and the stability of its dividend‑paying portfolio.
For 2026, Realty Income guided AFFO per share in the range $4.38 to $4.42, slightly below the $4.43 consensus. CEO Sumit Roy noted that the company’s “fourth‑quarter investment volume of $2.4 billion represents a meaningful acceleration in activity, and our active pipeline for 2026 is reflected in our initial investment volume guidance of approximately $8.0 billion.” CFO Jonathan Pong described 2025 as a “foundational year” for capital diversification, highlighting the launch of the company’s first U.S. open‑end fund.
Operational highlights include a 98.9% occupancy rate, rent‑recapture of 104.9% on re‑leased properties, and a net debt to annualized pro‑forma adjusted EBITDA ratio of 5.4×. The company also entered the Mexican market with a $200 million industrial portfolio commitment and launched a U.S. perpetual life open‑end Core Plus fund with $1.5 billion in commitments. The board approved its 113th consecutive quarterly dividend increase, underscoring the company’s commitment to returning value to shareholders.
Investor reaction was muted. While revenue beat and EPS met expectations, the slightly lower 2026 AFFO guidance tempered enthusiasm, and the market had largely priced in the results. The company’s strong occupancy, rent‑recapture, and investment activity suggest continued resilience, but the guidance indicates a cautious outlook amid rising interest costs.
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