Q2 2024 Realty Income Corp Earnings Call Transcript
Key Points
- Realty Income Corp (O) reported a robust 6% growth in AFFO per share, reaching $1.06.
- The company achieved a total operational return of over 11%, combining AFFO growth and a dividend yield exceeding 5%.
- Realty Income Corp (O) invested $805.8 million in high-quality opportunities across the US and Europe, with a blended initial cash yield of 7.9%.
- Occupancy rose to 98.8%, a 20 basis point increase from the prior quarter.
- The company maintained strong balance sheet metrics with leverage at 5.3 times and A3/A- credit ratings from Moody's and S&P.
- Exposure to potential lost rent from clients like Rite Aid, Red Lobster, Walgreens, and Dollar Tree, which could impact AFFO per share by approximately $0.02.
- The company recognized approximately $6.2 million in AR reserves from a client in the convenience store industry, impacting same-store rent growth.
- Investment grade tenants represented only 10% of acquisitions, the lowest since Q3 2017.
- The transaction market remains volatile, with potential competition from private equity if interest rates decline.
- Realty Income Corp (O) faces challenges in maintaining investment spreads due to potential cap rate compression.
Good day, and welcome to the Realty Income second-quarter 2024 earnings conference call. (Operator Instructions) Please note, this event is being recorded.
I would now like to turn the conference over to Steve Bakke, Senior Vice President, Corporate Finance. Please go ahead.
Thank you all for joining us today for Realty Income's second-quarter operating results conference call. Discussing our results will be Sumit Roy, President and Chief Executive Officer and Jonathan Pong, Chief Financial Officer and Treasurer.
During this conference call, we will make statements that may be considered forward-looking statements under federal securities law. The company's actual future results may differ significantly from the matters discussed in any forward-looking statements. We will disclose in greater detail the factors that may cause such differences in the company's Form 10-Q. We will be observing a two-question limit during the Q&A portion of the call in order to give
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