| Type | Public (NYSE: O) |
|---|---|
| Genre | Real Estate/Finance |
| Founded | 1969 |
| Headquarters | Escondido, California, USA |
| Area served | Nationwide |
| Key people | Thomas A. Lewis, CEO |
| Revenue | $ 193.7 million (2010).[1] |
| Website | www.realtyincome.com |
Realty Income Corporation (NYSE: O) is a real estate investment trust known as “The Monthly Dividend Company®” for its practice of paying investor dividends on a monthly rather than quarterly basis. It is chartered in the state of Maryland and has its headquarters in Escondido, California. As of 2010, the company owns approximately 2,600 commercial real estate properties in 49 states, with total assets of approximately $4.1 billion and net income of $130 million.[1]
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Realty Income Corporation was founded in 1969 by William E. Clark and Evelyn J. Clark. Its first acquisition was a Taco Bell restaurant in early 1970. Initially, the company focused on acquiring properties from the Clarks’ development company, which engaged in land acquisition, construction, leasing, and sales of fast food restaurant properties.
Unlike many real estate investments, which were structured and sold as tax shelters, the various Clark partnerships used investor cash to purchase and hold properties without loans or encumbrances. The partnerships received monthly rent from the tenants, deducted a management fee, and distributed the balance to investors on a monthly basis.
As a result of changes in the commercial development market in the early 1970s as well as changes in the tax code, by 1977 the Clarks shut down their development company to concentrate fully on the operations of Realty Income partnerships. By the early 1980s, the company was raising over $50 million per year.
The Tax Reform Act of 1986 (TRA) put significant limitations on tax shelters, especially for real estate investments, which reduced the market for forming real estate partnerships. In October 1994, Realty Income Corporation merged its various partnerships into a publicly-traded company, listed on the New York Stock Exchange with the single letter “O” as its symbol.
William E. Clark, Jr., retired as CEO in 1997, succeeded by Thomas A. Lewis. Clark remained as chairman until 2009 and was followed by Donald R. Cameron who is the current Chairman of the Board.
In 2002, Realty Income Corporation received a registered trademark for the phrase, “The Monthly Dividend Company®,” emphasizing its practice of paying investor dividends on a monthly, rather than quarterly, basis. As of December 2011, it has paid 497 dividends in the 42 years since its founding in 1969, and has increased the dividend 63 times since the company was listed on the NYSE in 1994, with total payouts to shareholders exceeding $2.1 billion.[2]
The company primarily acquires properties that are freestanding, single-tenant locations, and that are leased to regional and national commercial enterprises under long-term net-lease agreements. Types of properties owned include theaters, fitness clubs, convenience/gas stations, and distribution centers leased to tenants like Fed Ex As of its December 2010 Form 10-K filing, the company owned 2,496 properties in 49 states with over 21.2 million square feet of leasable space.
The company’s portfolio management strategy includes seeking contractual rent increases on existing leases, rent increases at the termination of existing leases (market permitting), and active management of portfolio properties.[1]
Realty Income Corporation was listed by Forbes Magazine as one of the “100 Most Trustworthy Companies” for 2009. [3] It was also named to the list of Mergent Dividend Achievers beginning in 2005. It has earned investment grade credit ratings from Moody’s Investor Services, Standard & Poors, and Fitch Rating Agency.