Here's Why Realty Income Isn't Chasing After Investment-Grade Tenants
Realty Income (NYSE: O) is roughly three times as large as its next closest competitor in the net lease niche of the real estate investment trust (REIT) sector. That gives it a scale advantage and sets it up as an industry consolidator. It bought VEREIT in 2021, and just recently has agreed to buy Spirit Realty (NYSE: SRC). But big acquisitions lead to portfolio changes. There's one change that Realty Income wishes investors would stop worrying about.
Realty Income owns a bit over 13,000 properties. Spirit has roughly 2,000 assets in its portfolio. Put the two together and Realty Income's scale will grow to more than 15,000 properties. That's gigantic relative to the company's net lease REIT peers. A net lease requires the tenant to pay for most property-level operating costs.
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Source Fool.com
