Realty Income Delivers 14th Consecutive Year of Growth with Strong Q4 Results
Realty Income, a leading commercial real estate investment company, has delivered its 14th consecutive year of growth in 2024. The company reported AFFO per share growth of 4.8% and a total operational return of 10.2% for the year.
In a conference call on February 25, Realty Income's President and Chief Executive Officer, Sumit Roy, highlighted the company's proven track record of results and returns. 'Our 2024 results are a testament to the platform we have built,' he said. 'One that is able to deliver against a variety of macroeconomic backdrops, underscored by positive AFFO per share increases every year in our 30-year history as a public company save one.'
Realty Income's strong Q4 results were driven by its disciplined capital allocation strategy, which saw the company invest $3.9 billion at a 7.4% weighted average initial cash yield. The investments were funded with attractively priced capital, resulting in a 243 basis point investment spread exceeding the company's historical average of 150 basis points.
During the quarter, Realty Income delivered AFFO per share of $1.05, representing growth of 4%. The company invested $1.7 billion into high-quality opportunities at a 7.1% weighted average initial cash yield or a 7.5% straight line yield assuming CPI growth of 2%. Approximately 57% of the annualized cash income generated was from investment-grade clients.
Realty Income completed 73 discrete transactions during the quarter, including six transactions with total considerations over $50 million. These transactions highlighted the company's unparalleled depth and breadth of its sourcing and acquisition platform.
In the U.S., Realty Income invested $1.1 billion at a 6.4% weighted average initial cash yield and weighted average lease term of approximately 14 years. In Europe, the company invested $650 million at an 8.2% weighted average initial cash yield and weighted average lease term of approximately 7 years.
Realty Income's diversified portfolio of over 15,600 properties has proven resilient through various economic cycles and continues to deliver stable returns. The company ended the quarter with 98.7% portfolio occupancy in line with the prior quarter. Its rent recapture rate on 266 lease renewals was 107.4%, generating approximately $52 million in new annualized cash rent.
Since 1996, Realty Income has successfully resolved over 5,800 expiring leases at a 103% recapture rate. The company continues to expand and develop its predictive analytics platform, which is an important component in the analysis of acquisitions and increasingly drives the strategy on dispositions through its ongoing capital recycling strategy.
