Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2022 | Jul. 29, 2022 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 1-13374 | |
Entity Registrant Name | REALTY INCOME CORPORATION | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 33-0580106 | |
Entity Address, Address Line One | 11995 El Camino Real | |
Entity Address, City or Town | San Diego | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 92130 | |
City Area Code | 858 | |
Local Phone Number | 284-5000 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 617,577,455 | |
Entity Central Index Key | 0000726728 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Common Stock, $0.01 Par Value | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Common Stock, $0.01 Par Value | |
Trading Symbol | O | |
Security Exchange Name | NYSE | |
1.125% Notes due 2027 | ||
Document Information [Line Items] | ||
Title of 12(b) Security | 1.125% Notes due 2027 | |
Trading Symbol | O27A | |
Security Exchange Name | NYSE | |
1.875% Notes due 2027 | ||
Document Information [Line Items] | ||
Title of 12(b) Security | 1.875% Notes due 2027 | |
Trading Symbol | O27B | |
Security Exchange Name | NYSE | |
1.625% Notes due 2030 | ||
Document Information [Line Items] | ||
Title of 12(b) Security | 1.625% Notes due 2030 | |
Trading Symbol | O30 | |
Security Exchange Name | NYSE | |
1.750% Notes due 2033 | ||
Document Information [Line Items] | ||
Title of 12(b) Security | 1.750% Notes due 2033 | |
Trading Symbol | O33A | |
Security Exchange Name | NYSE | |
2.500% Notes due 2042 | ||
Document Information [Line Items] | ||
Title of 12(b) Security | 2.500% Notes due 2042 | |
Trading Symbol | O42 | |
Security Exchange Name | NYSE |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Real estate held for investment, at cost: | ||
Land | $ 11,605,933 | $ 10,753,750 |
Buildings and improvements | 26,101,185 | 25,155,178 |
Total real estate held for investment, at cost | 37,707,118 | 35,908,928 |
Less accumulated depreciation and amortization | (4,387,878) | (3,949,798) |
Real estate held for investment, net | 33,319,240 | 31,959,130 |
Real estate and lease intangibles held for sale, net | 66,336 | 30,470 |
Cash and cash equivalents | 172,849 | 258,579 |
Accounts receivable, net | 500,384 | 426,768 |
Lease intangible assets, net | 5,154,994 | 5,275,304 |
Goodwill | 3,731,478 | 3,676,705 |
Investment in unconsolidated entities | 113,562 | 140,967 |
Other assets, net | 1,893,075 | 1,369,579 |
Total assets | 44,951,918 | 43,137,502 |
LIABILITIES AND EQUITY | ||
Distributions payable | 153,966 | 146,919 |
Accounts payable and accrued expenses | 353,573 | 351,128 |
Lease intangible liabilities, net | 1,346,648 | 1,308,221 |
Other liabilities | 740,357 | 759,197 |
Line of credit payable and commercial paper | 1,169,121 | 1,551,376 |
Term loan, net | 249,656 | 249,557 |
Mortgages payable, net | 947,112 | 1,141,995 |
Notes payable, net | 13,588,606 | 12,499,709 |
Total liabilities | 18,549,039 | 18,008,102 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Common stock and paid in capital, par value $0.01 per share, 1,300,000,000 and 740,200,000 shares authorized, 617,564,272 and 591,261,991 shares issued and outstanding as of June 30, 2022, and December 31, 2021, respectively | 31,303,383 | 29,578,212 |
Distributions in excess of net income | (4,999,150) | (4,530,571) |
Accumulated other comprehensive income | 22,379 | 4,933 |
Total stockholders’ equity | 26,326,612 | 25,052,574 |
Noncontrolling interests | 76,267 | 76,826 |
Total equity | 26,402,879 | 25,129,400 |
Total liabilities and equity | $ 44,951,918 | $ 43,137,502 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Common stock and paid in capital, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock and paid in capital, authorized (in shares) | 1,300,000,000 | 740,200,000 |
Common stock and paid in capital, issued (in shares) | 617,564,272 | 591,261,991 |
Common stock and paid in capital, outstanding (in shares) | 617,564,272 | 591,261,991 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
REVENUE | ||||
Rental (including reimbursable) | $ 800,800 | $ 460,256 | $ 1,600,365 | $ 899,621 |
Other | 9,619 | 3,042 | 17,397 | 5,931 |
Total revenue | 810,419 | 463,298 | 1,617,762 | 905,552 |
EXPENSES | ||||
Depreciation and amortization | 409,437 | 187,789 | 813,199 | 365,774 |
Interest | 110,121 | 73,674 | 216,524 | 146,749 |
Property (including reimbursable) | 52,180 | 31,734 | 104,522 | 60,233 |
General and administrative | 34,139 | 21,849 | 66,838 | 42,645 |
Provisions for impairment | 7,691 | 17,246 | 14,729 | 19,966 |
Merger and integration-related costs | 2,729 | 13,298 | 9,248 | 13,298 |
Total expenses | 616,297 | 345,590 | 1,225,060 | 648,665 |
Gain on sales of real estate | 40,572 | 14,901 | 50,728 | 23,302 |
Foreign currency and derivative gain, net | 7,480 | 400 | 6,890 | 1,204 |
Gain (loss) on extinguishment of debt | 127 | 0 | 127 | (46,473) |
Equity in income and impairment of investment in unconsolidated entities | (6,627) | 0 | (5,673) | 0 |
Other income, net | 2,806 | 984 | 4,658 | 1,534 |
Income before income taxes | 238,480 | 133,993 | 449,432 | 236,454 |
Income taxes | (14,658) | (9,225) | (25,639) | (15,450) |
Net income | 223,822 | 124,768 | 423,793 | 221,004 |
Net income attributable to noncontrolling interests | (615) | (289) | (1,217) | (585) |
Net income available to common stockholders | $ 223,207 | $ 124,479 | $ 422,576 | $ 220,419 |
Amounts available to common stockholders per common share: | ||||
Net income, basic (in dollars per share) | $ 0.37 | $ 0.33 | $ 0.71 | $ 0.59 |
Net income, diluted (in dollars per share) | $ 0.37 | $ 0.33 | $ 0.71 | $ 0.59 |
Weighted average common shares outstanding: | ||||
Basic (in shares) | 601,672,201 | 374,236,424 | 597,778,173 | 372,879,165 |
Diluted (in shares) | 602,030,666 | 374,341,023 | 598,140,702 | 372,971,744 |
Other comprehensive income: | ||||
Net income available to common stockholders | $ 223,207 | $ 124,479 | $ 422,576 | $ 220,419 |
Foreign currency translation adjustment | (48,992) | (49) | (59,698) | (308) |
Unrealized gain (loss) on derivatives, net | 33,454 | (10,833) | 77,144 | 35,576 |
Comprehensive income available to common stockholders | $ 207,669 | $ 113,597 | $ 440,022 | $ 255,687 |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands | Total | Total stockholders’ equity | Shares of common stock | Common stock and paid in capital | Distributions in excess of net income | Accumulated other comprehensive income (loss) | Noncontrolling interests |
Balance (in shares) at Dec. 31, 2020 | 361,303,445 | ||||||
Balance at Dec. 31, 2020 | $ 11,017,730 | $ 10,985,483 | $ 14,700,050 | $ (3,659,933) | $ (54,634) | $ 32,247 | |
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | 221,004 | 220,419 | 220,419 | 585 | |||
Other comprehensive income (loss) | 35,268 | 35,268 | 35,268 | ||||
Distributions paid and payable | (529,610) | (528,819) | (528,819) | (791) | |||
Share issuances, net of costs (in shares) | 18,747,415 | ||||||
Share issuances, net of costs | 1,124,576 | 1,124,576 | 1,124,576 | ||||
Contributions by noncontrolling interests | 2,106 | 2,106 | |||||
Share-based compensation, net (in shares) | 123,182 | ||||||
Share-based compensation, net | 2,605 | 2,605 | 2,605 | ||||
Balance (in shares) at Jun. 30, 2021 | 380,174,042 | ||||||
Balance at Jun. 30, 2021 | 11,873,679 | 11,839,532 | 15,827,231 | (3,968,333) | (19,366) | 34,147 | |
Balance (in shares) at Mar. 31, 2021 | 373,509,822 | ||||||
Balance at Mar. 31, 2021 | 11,567,013 | 11,534,872 | 15,371,016 | (3,827,660) | (8,484) | 32,141 | |
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | 124,768 | 124,479 | 124,479 | 289 | |||
Other comprehensive income (loss) | (10,882) | (10,882) | (10,882) | ||||
Distributions paid and payable | (265,541) | (265,152) | (265,152) | (389) | |||
Share issuances, net of costs (in shares) | 6,629,021 | ||||||
Share issuances, net of costs | 452,355 | 452,355 | 452,355 | ||||
Contributions by noncontrolling interests | 2,106 | 2,106 | |||||
Share-based compensation, net (in shares) | 35,199 | ||||||
Share-based compensation, net | 3,860 | 3,860 | 3,860 | ||||
Balance (in shares) at Jun. 30, 2021 | 380,174,042 | ||||||
Balance at Jun. 30, 2021 | 11,873,679 | 11,839,532 | 15,827,231 | (3,968,333) | (19,366) | 34,147 | |
Balance (in shares) at Dec. 31, 2021 | 591,261,991 | ||||||
Balance at Dec. 31, 2021 | 25,129,400 | 25,052,574 | 29,578,212 | (4,530,571) | 4,933 | 76,826 | |
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | 423,793 | 422,576 | 422,576 | 1,217 | |||
Other comprehensive income (loss) | 17,446 | 17,446 | 17,446 | ||||
Distributions paid and payable | (892,931) | (891,155) | (891,155) | (1,776) | |||
Share issuances, net of costs (in shares) | 26,133,030 | ||||||
Share issuances, net of costs | 1,720,573 | 1,720,573 | 1,720,573 | ||||
Share-based compensation, net (in shares) | 169,251 | ||||||
Share-based compensation, net | 4,598 | 4,598 | 4,598 | ||||
Balance (in shares) at Jun. 30, 2022 | 617,564,272 | ||||||
Balance at Jun. 30, 2022 | 26,402,879 | 26,326,612 | 31,303,383 | (4,999,150) | 22,379 | 76,267 | |
Balance (in shares) at Mar. 31, 2022 | 601,566,581 | ||||||
Balance at Mar. 31, 2022 | 25,578,725 | 25,502,179 | 30,236,374 | (4,772,112) | 37,917 | 76,546 | |
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | 223,822 | 223,207 | 223,207 | 615 | |||
Other comprehensive income (loss) | (15,538) | (15,538) | (15,538) | ||||
Distributions paid and payable | (451,139) | (450,245) | (450,245) | (894) | |||
Share issuances, net of costs (in shares) | 15,961,222 | ||||||
Share issuances, net of costs | 1,060,529 | 1,060,529 | 1,060,529 | ||||
Share-based compensation, net (in shares) | 36,469 | ||||||
Share-based compensation, net | 6,480 | 6,480 | 6,480 | ||||
Balance (in shares) at Jun. 30, 2022 | 617,564,272 | ||||||
Balance at Jun. 30, 2022 | $ 26,402,879 | $ 26,326,612 | $ 31,303,383 | $ (4,999,150) | $ 22,379 | $ 76,267 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income | $ 423,793 | $ 221,004 |
Adjustments to net income: | ||
Depreciation and amortization | 813,199 | 365,774 |
Amortization of share-based compensation | 11,643 | 8,169 |
Non-cash revenue adjustments | (25,332) | (8,233) |
(Gain) loss on extinguishment of debt | (127) | 46,473 |
Amortization of deferred financing costs | 7,081 | 5,490 |
Loss on interest rate swaps | 1,446 | 1,447 |
Foreign currency and derivative gain, net | (6,890) | (1,204) |
Gain on sales of real estate | (50,728) | (23,302) |
Equity in income and impairment of investment in unconsolidated entities | 5,673 | 0 |
Distributions from unconsolidated entities | 1,490 | 0 |
Provisions for impairment on real estate | 14,729 | 19,966 |
Change in assets and liabilities | ||
Accounts receivable and other assets | 134,019 | (67,970) |
Accounts payable, accrued expenses and other liabilities | (34,921) | 14,143 |
Net cash provided by operating activities | 1,256,561 | 581,134 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Investment in real estate | (3,166,063) | (2,102,042) |
Improvements to real estate, including leasing costs | (29,654) | (3,997) |
Proceeds from sales of real estate | 272,245 | 91,616 |
Return of investment from unconsolidated entities | 746 | 0 |
Insurance proceeds received | 16,046 | 0 |
Non-refundable escrow deposits | (13,815) | (11,153) |
Net cash used in investing activities | (2,920,495) | (2,025,576) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Cash distributions to common stockholders | (884,109) | (524,056) |
Borrowings on line of credit and commercial paper program | 9,366,868 | 5,403,699 |
Payments on line of credit and commercial paper program | (9,724,268) | (4,097,909) |
Proceeds from notes and bonds payable issued | 1,405,691 | 0 |
Principal payment on notes payable | 0 | (950,000) |
Principal payments on mortgages payable | (225,951) | (42,590) |
Payments upon extinguishment of debt | 0 | (47,235) |
Proceeds from dividend reinvestment and stock purchase plan | 5,731 | 5,322 |
Proceeds from common stock offerings, net | 1,712,696 | 1,119,254 |
Distributions to noncontrolling interests | (1,776) | (791) |
Net receipts on derivative settlements | 7,474 | 1,650 |
Debt issuance costs | (27,272) | 0 |
Other items, including shares withheld upon vesting | (4,899) | (5,564) |
Net cash provided by financing activities | 1,630,185 | 861,780 |
Effect of exchange rate changes on cash and cash equivalents | (24,955) | (1,032) |
Net decrease in cash, cash equivalents and restricted cash | (58,704) | (583,694) |
Cash, cash equivalents and restricted cash, beginning of period | 332,369 | 850,679 |
Cash, cash equivalents and restricted cash, end of period | 273,665 | 266,985 |
Mortgages payable | ||
Adjustments to net income: | ||
Amortization of net premiums | (7,091) | (485) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Principal payments on mortgages payable | (226,000) | (42,600) |
Notes payable | ||
Adjustments to net income: | ||
Amortization of net premiums | $ (31,423) | $ (138) |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The consolidated financial statements of Realty Income Corporation (“Realty Income,” the “Company,” “we,” “our” or “us”) were prepared from our books and records without audit and include all adjustments (consisting of only normal recurring accruals) necessary to present a fair statement of results for the interim periods presented. Readers of this quarterly report should refer to our audited consolidated financial statements for the year ended December 31, 2021, which are included in our 2021 Annual Report on Form 10-K , as certain disclosures that would substantially duplicate those contained in the audited financial statements have not been included in this report. The U.S. Dollar (“USD”) is our reporting currency. Unless otherwise indicated, all dollar amounts are expressed in United States USD. For our consolidated subsidiaries whose functional currency is not the U.S. dollar, we translate their financial statements into U.S. dollars at the time we consolidate those subsidiaries’ financial statements. Generally, assets and liabilities are translated at the exchange rate in effect at the balance sheet date. The resulting translation adjustments are included in 'Accumulated other comprehensive income', or AOCI, in the consolidated balance sheets. Certain balance sheet items, primarily equity and capital-related accounts, are reflected at the historical exchange rate. Income statement accounts are translated using the average exchange rate for the period. We and certain of our consolidated subsidiaries have intercompany and third-party debt that is not denominated in our functional currency. When the debt is remeasured to the functional currency of the entity, a gain or loss can result. The resulting adjustment is reflected in 'Foreign currency and derivative gain, net' in the consolidated statements of income and comprehensive income. At June 30, 2022, we owned 11,427 properties, located in all 50 U.S. states, Puerto Rico, the United Kingdom (U.K.), and Spain, consisting of approximately 218.5 million leasable square feet. |
Summary of Significant Accounti
Summary of Significant Accounting Policies and Procedures and New Accounting Standards | 6 Months Ended |
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies and Procedures and New Accounting Standards | Summary of Significant Accounting Policies and Procedures and New Accounting Standards Principles of Consolidation. These consolidated financial statements include the accounts of Realty Income and all other entities in which we have a controlling financial interest. We evaluate whether we have a controlling financial interest in an entity in accordance with Accounting Standards Codification (“ASC”) 810, Consolidation. Voting interest entities are entities considered to have sufficient equity at risk and which the equity holders have the obligation to absorb losses, the right to receive residual returns and the right to make decisions about the entity’s activities. We consolidate voting interest entities in which we have a controlling financial interest, which we typically have through holding of a majority of the entity’s voting equity interests. Variable interest entities (“VIEs”) are entities that lack sufficient equity at risk or where the equity holders either do not have the obligation to absorb losses, do not have the right to receive residual returns, do not have the right to make decisions about the entity’s activities, or some combination of the above. A controlling financial interest in a VIE is present when an entity has a variable interest, or a combination of variable interests, that provides the entity with (i) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. An entity that meets both conditions above is deemed the primary beneficiary and consolidates the VIE. We reassess our initial evaluation of whether an entity is a VIE when certain reconsideration events occur. We reassess our determination of whether we are the primary beneficiary of a VIE on an ongoing basis based on current facts and circumstances. The portion of a consolidated entity not owned by us is recorded as a noncontrolling interest. Noncontrolling interests are reflected on our consolidated balance sheets as a component of equity. Noncontrolling interest that was created or assumed as part of a business combination or asset acquisition was recognized at fair value as of the date of the transaction (see note 11, Noncontrolling Interests ). Income Taxes. We have elected to be taxed as a real estate investment trust, or REIT, under the Internal Revenue Code of 1986, as amended. We believe we have qualified and continue to qualify as a REIT. Under the REIT operating structure, we are permitted to deduct dividends paid to our stockholders in determining our taxable income. Assuming our dividends equal or exceed our taxable net income in the US, we generally will not be required to pay U.S. income taxes on such income. However, we are liable for taxes in the United Kingdom and Spain. Accordingly, a provision has been made for U.K. and Spain income taxes, as well as U.S. income taxes on our taxable REIT subsidiaries, but no provision was made for U.S. income taxes for our U.S. REIT parent. Lease Revenue Recognition and Accounts Receivable. The COVID-19 pandemic and the measures taken to limit its spread have negatively impacted the economy across many industries, including the industries in which some of our clients operate. These impacts may continue as the duration and severity of the pandemic increases. As a result, we have closely monitored the collectability of our accounts receivable and continue to evaluate the potential impacts of the COVID-19 pandemic and the measures taken to limit its spread on our business and industry segments as the situation continues to evolve and more information becomes available. We continue to assess the probability of collecting substantially all of the lease payments to which we are entitled under the original lease contract as required under Topic 842, Leases . We assess the collectability of our future lease payments based on an analysis of creditworthiness, economic trends (including trends arising from the COVID-19 pandemic) and other facts and circumstances related to the applicable clients. If we conclude the collection of substantially all lease payments under a lease is less than probable, rental revenue recognized for that lease is limited to cash received going forward, existing operating lease receivables, including those related to straight-line rental revenue, must be written off as an adjustment to rental revenue, and no further operating lease receivables are recorded for that lease until such future determination is made that substantially all lease payments under that lease are now considered probable. If we subsequently conclude that the collection of substantially all lease payments under a lease is probable, a reversal of lease receivables previously written off is recognized. The majority of concessions granted to our clients as a result of the COVID-19 pandemic have been rent deferrals with the original lease term unchanged. In accordance with the guidance provided by the Financial Accounting Standards Board (FASB) staff, we have elected to account for these leases as if the right of deferral existed in the lease contract and therefore continue to recognize lease revenue in accordance with the lease contract in effect. In limited circumstances, the undiscounted cash flows resulting from deferrals granted increased significantly from original lease terms, which required us to account for these as lease modifications and resulted in an insignificant impact to consolidated rental revenue. Similarly, rent abatements granted, which are also accounted for as lease modifications, have impacted our rental revenue by an insignificant amount. As of June 30, 2022, other than the information related to the reserves recorded to date, we do not have any further client specific information that would change our assessment that collection of substantially all of the future lease payments under our existing leases is probable. However, since the conversations regarding rent collections for our clients affected by the COVID-19 pandemic are ongoing and we do not currently know the types of future concessions, if any, that will ultimately be granted, there may be impacts in future periods that could change this assessment as the situation continues to evolve and as more information becomes available. Investment in Unconsolidated Entities. We account for our investment in unconsolidated entity arrangements using the equity method of accounting as we have the ability to exercise significant influence, but not control, over operating and financing policies of these investments. We have determined that none of the unconsolidated entities would be considered VIEs under the applicable accounting guidance. Our equity method investments were acquired in our merger with VEREIT. As a result, the investments were recorded at fair value and subsequently will be adjusted for our share of equity in the entities' earnings and distributions received. The step-up in fair value was allocated to the individual investment assets and liabilities and is being amortized over the estimated useful life of the respective underlying tangible real estate assets, the lease term of the intangible real estate assets, and the remaining term of the assumed debt. The carrying value of our investment is included in 'Investment in unconsolidated entities' in the accompanying consolidated balance sheets. We record our proportionate share of net income from the unconsolidated entities in 'Equity in income and impairment of investment in unconsolidated entities' in the consolidated statements of income and comprehensive income. Segment Reporting. During the second quarter of 2022, a re-evaluation of our business and management structure led to a change in identification of operating and reportable segments. As we have grown in size and scale over recent years, including through the acquisition of VEREIT in November 2021, management has shifted its focus from managing primarily through identification of concentrations of risk from exposure to client industries or geographies, to now focused on seeking investments with attractive yields and risk adjusted returns regardless of client industry or geography. As a result, we have reorganized our business activities into one operating and reportable segment. ASC Topic 280, Segment Reporting , establishes standards for the manner in which enterprises report information about operating segments. We are engaged in a single business activity, which is the leasing of property to clients, generally on a net basis (whereby clients are responsible for property taxes, insurance and maintenance costs). That business activity spans various geographic boundaries and includes property types and clients engaged in various industries, but ultimately all business activity involves similar economic characteristics of owning and leasing commercial properties under long-term, net lease agreements. Therefore, we aggregate these business activities for reporting purposes and operate in one operating and reportable segment. This segmental presentation is consistent with the information provided to our chief operating decision maker to make decisions about allocating resources and assessing our performance. Newly Issued Accounting Standards. In March 2020, the FASB issued ASU 2020-04 establishing Topic 848, Reference Rate Reform . ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance is optional and is effective between March 12, 2020, and December 31, 2022. The guidance may be elected over time as reference rate reform activities occur. As, of June 30, 2022, all of our debt and derivative instruments have been converted from LIBOR to SOFR. The interest rate swap on our term loan, which was converted to a SOFR benchmark from LIBOR during June 2022, continues to be accounted for as a cash flow hedge. The adoption of this guidance had no impact on our consolidated financial statements. |
Merger with VEREIT, Inc.
Merger with VEREIT, Inc. | 6 Months Ended |
Jun. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Merger with VEREIT, Inc. | Merger with VEREIT, Inc. Merger with VEREIT On November 1, 2021, we completed our merger with VEREIT, Inc. For further details, see note 3. Merger with VEREIT, Inc. and Orion Office REIT Inc. Divestiture , to our consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2021. Our merger with VEREIT has been accounted for using the acquisition method of accounting in accordance with ASC 805, Business Combinations , with Realty Income as the accounting acquirer, which requires, among other things, that the assets acquired, and liabilities assumed be recognized at their acquisition date fair value. The fair value of the consideration transferred on the date of the acquisition is as follows (in thousands, except share and per share data): Shares of VEREIT common stock and VEREIT Operating Partnership, L.P. ("OP") common units exchanged (1) 229,304,035 Exchange Ratio 0.705 161,659,345 Less: Fractional shares settled in cash (1,545) Shares of Realty Income common stock and Realty Income L.P. units issued 161,657,800 Adjusted opening price of Realty common stock on November 1, 2021 (2) $ 71.236 Fair value of Realty common stock issued to former holders of VEREIT common stock and VEREIT OP common units $ 11,515,855 Fair value of VEREIT's equity-based compensation awards attributable to pre-combination services (3) 44,020 Total non-cash consideration 11,559,875 Cash paid for fractional shares 110 VEREIT indebtedness paid off in connection with the merger (4) 500,414 Consideration transferred $ 12,060,399 (1) Includes 229,152,001 shares of VEREIT common stock and 152,034 VEREIT OP common units outstanding as of November 1, 2021. Under the Merger Agreement, these shares and units were converted to Realty Income common stock, or in certain instances, Realty Income L.P. units, at an Exchange Ratio of 0.705 per share of VEREIT common stock or VEREIT OP common unit, as applicable. (2) The fair value of Realty Income common stock issued to former holders of VEREIT common stock and VEREIT OP common units is based on the per share opening price of Realty Income common stock of $71.00 on November 1, 2021, adjusted for the monthly dividend of $0.236 per share that former holders of VEREIT common stock and VEREIT OP common units were eligible to receive when such dividend was paid on November 15, 2021. (3) Represents the fair value of fully vested deferred stock unit awards of VEREIT common stock (“VEREIT DSU Awards”) which were converted into Realty Income common stock upon our merger with VEREIT, as well as the estimated fair value of the Realty Income replacement employee and executive stock options and restricted stock units that were granted at the closing date of our merger with VEREIT and which were attributable to pre-combination services. (4) Represents the outstanding balance of the VEREIT revolving credit facility repaid by Realty Income in connection with the closing of the merger. The amount shown in the table above was based upon the balance outstanding immediately prior to November 1, 2021. A. Preliminary Purchase Price Allocation The following table summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed at the date of acquisition (in thousands): ASSETS Land $ 3,021,906 Buildings 8,677,467 Total real estate held for investment 11,699,373 Cash and cash equivalents 128,411 Accounts receivable 53,355 Lease intangible assets (1) 3,204,773 Goodwill 3,717,620 Investment in unconsolidated entities 175,379 Other assets 308,910 Total assets acquired $ 19,287,821 LIABILITIES Accounts payable and accrued expenses $ 139,836 Lease intangible liabilities (2) 949,349 Other liabilities 320,893 Mortgages payable 869,027 Notes payable 4,946,965 Total liabilities assumed $ 7,226,070 Net assets acquired, at fair value $ 12,061,751 Noncontrolling interests $ 1,352 Total purchase price $ 12,060,399 (1) The weighted average amortization period for acquired lease intangible assets is 9.3 years. (2) The weighted average amortization period for acquired lease intangible liabilities is 25.5 years. The assessment of fair value is preliminary and is based on information that was available to management at the time the consolidated financial statements were prepared. Measurement period adjustments will be recorded in the future period in which they are determined, as if they had been completed at the acquisition date. The finalization of our purchase accounting assessment could result in changes in the valuation of assets acquired and liabilities assumed up to a year after the date of our merger with VEREIT, which could be material. As of June 30, 2022, we have recorded measurement period adjustments resulting in a net increase to Goodwill from the initial valuation of $54.8 million, which is reflected in the table above. Due to the timing and complexity of the merger, we recorded the assets acquired and liabilities assumed at their preliminary estimated fair values. As of June 30, 2022, we had not finalized the determination of fair values allocated to certain assets and liabilities, including land, buildings, lease intangible assets, lease intangible liabilities, and the allocation of goodwill. The preliminary purchase price allocation is subject to change as we complete our analysis of the fair value of real estate assets and associated intangible assets and liabilities at the date of the transactions, which could have an impact on our consolidated financial statements. A preliminary estimate of approximately $3.72 billion has been allocated to goodwill. Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired and liabilities assumed. The recognized goodwill is attributable to expected synergies and benefits arising from the merger transaction, including anticipated financing and overhead cost savings, potential economies of scale benefits in both customer and vendor relationships and the employee workforce onboarded from VEREIT following the closing of the merger. None of the goodwill recognized is expected to be deductible for tax purposes. B. Merger and Integration-related Costs C. Unaudited Pro Forma Financial Information Our consolidated results of operations for the three and six months ended June 30, 2022, include $255.2 million and $513.5 million of revenues, respectively, and $9.0 million and $26.0 million of net income associated with the results of operations of VEREIT OP. The following unaudited pro forma information presents a summary of our combined results of operations for the three and six months ended June 30, 2021, as if our merger with VEREIT had occurred on January 1, 2020 (in millions, except per share data). There are no pro forma adjustments for the three and six months ended June 30, 2022, as the merger was completed November 1, 2021. Amounts for the three and six months ended June 30, 2022 are presented for comparative purposes. The following pro forma financial information is not necessarily indicative of the results of operations had the acquisition been effected on the assumed date, nor is it necessarily an indication of trends in future results for a number of reasons, including, but not limited to, differences between the assumptions used to prepare the pro forma information, basic shares outstanding and dilutive equivalents, cost savings from operating efficiencies, potential synergies, and the impact of incremental costs incurred in integrating the businesses. In accordance with ASC 805, Business Combinations , the following information excludes the impact of the spin-off of office assets to Orion Office REIT Inc. Three months ended June 30, Six months ended June 30, 2022 2021 2022 2021 Total revenues $ 810.4 $ 765.3 $ 1,617.8 $ 1,507.8 Net income $ 223.8 $ 186.7 $ 423.8 $ 376.0 Basic and diluted earnings per share $ 0.37 $ 0.35 $ 0.71 $ 0.70 |
Supplemental Detail for Certain
Supplemental Detail for Certain Components of Consolidated Balance Sheets | 6 Months Ended |
Jun. 30, 2022 | |
Disclosure Text Block Supplement [Abstract] | |
Supplemental Detail for Certain Components of Consolidated Balance Sheets | Supplemental Detail for Certain Components of Consolidated Balance Sheets (dollars in thousands): A. Accounts Receivable, net, consist of the following at: June 30, 2022 December 31, 2021 Straight-line rent receivables, net $ 287,891 $ 231,943 Client receivables, net 212,493 194,825 $ 500,384 $ 426,768 B. Lease intangible assets, net, consist of the following at: June 30, 2022 December 31, 2021 In-place leases $ 4,962,053 $ 4,791,846 Accumulated amortization of in-place leases (1,102,772) (804,050) Above-market leases 1,665,374 1,591,382 Accumulated amortization of above-market leases (369,661) (303,874) $ 5,154,994 $ 5,275,304 C. Other assets, net, consist of the following at: June 30, 2022 December 31, 2021 Right of use asset - operating leases, net $ 598,385 $ 631,515 Financing receivables 521,729 323,921 Right of use asset - financing leases 442,092 218,332 Derivative assets and receivables – at fair value 124,011 29,593 Restricted escrow deposits 100,098 68,541 Prepaid expenses 28,347 18,062 Credit facility origination costs, net 19,663 4,352 Non-refundable escrow deposits 13,815 28,560 Corporate assets, net 12,209 10,915 Investment in sales type lease 5,902 7,492 Note receivable 5,867 4,455 Impounds related to mortgages payable 718 5,249 Other items 20,239 18,592 $ 1,893,075 $ 1,369,579 D. Accounts payable and accrued expenses consist of the following at: June 30, 2022 December 31, 2021 Notes payable - interest payable $ 123,853 $ 108,227 Property taxes payable 40,543 36,173 Value-added tax payable 34,730 11,297 Accrued property expenses 25,877 27,344 Accrued costs on properties under development 22,893 19,665 Derivative liabilities and payables – at fair value 18,899 70,617 Accrued income taxes 16,653 19,152 Mortgages, term loans, and credit line - interest payable 3,347 3,874 Merger and integration-related costs 1,165 10,699 Other items 65,613 44,080 $ 353,573 $ 351,128 E. Lease intangible liabilities, net, consist of the following at: June 30, 2022 December 31, 2021 Below-market leases $ 1,540,274 $ 1,460,701 Accumulated amortization of below-market leases (193,626) (152,480) $ 1,346,648 $ 1,308,221 F. Other liabilities consist of the following at: June 30, 2022 December 31, 2021 Lease liability - operating leases, net $ 436,120 $ 461,748 Rent received in advance and other deferred revenue 243,102 242,122 Lease liability - financing leases 49,738 43,987 Security deposits 11,397 11,340 $ 740,357 $ 759,197 |
Investments in Real Estate
Investments in Real Estate | 6 Months Ended |
Jun. 30, 2022 | |
Real Estate [Abstract] | |
Investments in Real Estate | Investments in Real Estate We acquire land, buildings and improvements necessary for the successful operations of commercial clients. A. Acquisitions During the Six Months Ended June 30, 2022, and 2021 Below is a summary of our acquisitions for the six months ended June 30, 2022: Number of Leasable Investment Weighted Initial Weighted Average Cash Lease Yield (1) Six months ended June 30, 2022 (2) Acquisitions - U.S. 289 5,551 $ 1,492.0 13.9 5.7 % Acquisitions - Europe 51 5,391 1,471.2 9.0 5.6 % Total acquisitions 340 10,942 $ 2,963.2 11.5 5.7 % Properties under development (3) 83 2,721 267.9 15.9 5.7 % Total (4) 423 13,663 $ 3,231.1 11.9 5.7 % (1) The initial average cash lease yield for a property is generally computed as estimated contractual first year cash net operating income, which, in the case of a net leased property, is equal to the aggregate cash base rent for the first full year of each lease, divided by the total cost of the property. Since it is possible that a client could default on the payment of contractual rent, we cannot provide assurance that the actual return on the funds invested will remain at the percentages listed above. Contractual net operating income used in the calculation of initial average cash yield includes approximately $6.8 million received as settlement credits as reimbursement of free rent periods for the six months ended June 30, 2022. In the case of a property under development or expansion, the contractual lease rate is generally fixed such that rent varies based on the actual total investment in order to provide a fixed rate of return. When the lease does not provide for a fixed rate of return on a property under development or expansion, the initial weighted average cash lease yield is computed as follows: estimated cash net operating income (determined by the lease) for the first full year of each lease, divided by our projected total investment in the property, including land, construction and capitalized interest costs. (2) None of our investments during the six months ended June 30, 2022, caused any one client to be 10% or more of our total assets at June 30, 2022. (3) Includes two U.K. development properties that represent an investment of £14.9 million Sterling during the six months ended June 30, 2022, converted at the applicable exchange rate on the funding date. (4) Our clients occupying the new properties are 87.4% retail and 12.6% industrial, based on rental revenue. Approximately 33% of the rental revenue generated from acquisitions during the six months ended June 30, 2022, is from investment grade rated clients, their subsidiaries or affiliated companies. The acquisitions during the six months ended June 30, 2022, which had no associated contingent consideration, were allocated as follows (in millions): Acquisitions - U.S. Acquisitions - U.K. Six months ended June 30, 2022 (USD) (£ Sterling) Land (1) $ 480.3 £ 476.7 Buildings and improvements 843.9 368.2 Lease intangible assets (2) 185.0 179.4 Other assets (3) 214.7 166.2 Lease intangible liabilities (4) (27.3) (50.2) Other liabilities (5) (21.1) — $ 1,675.5 £ 1,140.3 (1) U.K. land includes £33.2 million of right of use assets under long-term ground leases. (2) The weighted average amortization period for acquired lease intangible assets is 10.3 years. (3) U.S. other assets consists of $182.6 million of financing receivables with above-market terms and $32.1 million of right-of-use assets accounted for as finance leases. U.K. other assets consists of £3.8 million of financing receivables with above-market terms and £162.4 million of right-of-use assets accounted for as finance leases. (4) The weighted average amortization period for acquired lease intangible liabilities is 11.4 years. (5) U.S. other liabilities consists of $14.6 million of deferred rent on certain below-market leases and $8.6 million of lease liabilities under financing leases, offset by $2.1 million of mortgage discounts. The properties acquired during the six months ended June 30, 2022, which were all accounted for as asset acquisitions, generated total revenues of $37.5 million and net income of $13.4 million during the six months ended June 30, 2022. Below is a summary of our acquisitions for the six months ended June 30, 2021: Number of Leasable Investment Weighted Initial Weighted Average Cash Lease Yield (1) Six months ended June 30, 2021 (2) Acquisitions - U.S. 173 4,485 $ 1,052.3 13.7 5.5 % Acquisitions - Europe 41 3,133 994.8 9.8 5.6 % Total acquisitions 214 7,618 $ 2,047.1 11.8 5.5 % Properties under development - U.S. 40 2,016 114.8 15.6 5.7 % Total (3) 254 9,634 $ 2,161.9 12.0 5.5 % (1) Contractual net operating income used in the calculation of initial average cash yield includes approximately $850,000 received as settlement credits as reimbursement of free rent periods for the six months ended June 30, 2021. (2) None of our investments during the six months ended June 30, 2021, caused any one client to be 10% or more of our total assets at June 30, 2021. (3) Our clients occupying the new properties are 75.8% retail and 24.2% industrial, based on rental revenue. Approximately 47% of the rental revenue generated from acquisitions during the six months ended June 30, 2021, was from investment grade rated clients, their subsidiaries or affiliated companies. The acquisitions during the six months ended June 30, 2021, which had no associated contingent consideration, were allocated as follows (in millions): Acquisitions - U.S. Acquisitions - U.K. Six months ended June 30, 2021 (USD) (£ Sterling) Land (1) $ 384.5 £ 219.7 Buildings and improvements 539.5 375.4 Lease intangible assets (2) 171.8 125.6 Other assets (3) 38.5 — Lease intangible liabilities (4) (14.4) (5.3) Other liabilities (5) (21.6) (0.3) $ 1,098.3 £ 715.1 (1) U.K land includes £1.3 million of right of use assets under long-term ground leases. (2) The weighted average amortization period for acquired lease intangible assets is 12.7 years. (3) U.S. other assets consists entirely of financing receivables with above-market terms and a right-of-use asset accounted for as a finance lease. (4) The weighted average amortization period for acquired lease intangible liabilities is 14.0 years. (5) U.S. other liabilities consists of deferred rent on certain below-market leases. U.K other liabilities consists entirely of a GBP mortgage premium. The properties acquired during the six months ended June 30, 2021, which were all accounted for as asset acquisitions, generated total revenues of $24.9 million and net income of $6.1 million during the six months ended June 30, 2021. B. Investments in Existing Properties During the six months ended June 30, 2022, we capitalized costs of $37.8 million on existing properties in our portfolio, consisting of $3.2 million for re-leasing costs, $2.8 million for recurring capital expenditures, and $31.8 million for non-recurring building improvements. In comparison, during the six months ended June 30, 2021, we capitalized costs of $4.3 million on existing properties in our portfolio, consisting of $827,000 for re-leasing costs, $51,000 for recurring capital expenditures, and $3.4 million for non-recurring building improvements. C. Properties with Existing Leases Of the $3.23 billion we invested during the six months ended June 30, 2022, approximately $267.9 million related to development. Of the $2.96 billion invested outside of development, $2.21 billion was used to acquire 168 properties with existing leases. In comparison, of the $2.16 billion we invested during the six months ended June 30, 2021, $114.8 million related to development. Of the $2.05 billion invested outside of development, $1.81 billion was used to acquire 143 properties with existing leases. The value of the in-place and above-market leases is recorded to 'Lease intangible assets, net' on our consolidated balance sheets, and the value of the below-market leases is recorded to 'Lease intangible assets, net' on our consolidated balance sheets. The values of the in-place leases are amortized as depreciation and amortization expense. The amounts amortized to expense for all of our in-place leases, for the six months ended June 30, 2022, and 2021 were $318.3 million and $77.5 million, respectively. The values of the above-market and below-market leases are amortized over the term of the respective leases, including any bargain renewal options, as an adjustment to rental revenue in the consolidated statements of income and comprehensive income. The amounts amortized as a net decrease to rental revenue for capitalized above-market and below-market leases for the six months ended June 30, 2022, and 2021 were $48.6 million and $19.7 million, respectively. If a lease was to be terminated prior to its stated expiration, all unamortized amounts relating to that lease would be recorded to revenue or expense, as appropriate. The following table presents the estimated impact during the next five years and thereafter related to the amortization of the above-market and below-market lease intangibles and the amortization of the in-place lease intangibles at June 30, 2022 (dollars in thousands): Net increase (decrease) to rental revenue Increase to amortization expense 2022 $ (29,835) $ 306,632 2023 (58,837) 545,532 2024 (52,621) 484,561 2025 (46,411) 415,549 2026 (38,118) 370,236 Thereafter 276,757 1,736,771 Totals $ 50,935 $ 3,859,281 D. Gain on Sales of Real Estate The following table summarizes our properties sold during the periods indicated below (dollars in millions): Three months ended June 30, Six months ended June 30, 2022 2021 2022 2021 Number of properties 70 42 104 69 Net sales proceeds $ 150.0 $ 56.9 $ 272.2 $ 91.6 Gain on sales of real estate $ 40.6 $ 14.9 $ 50.7 $ 23.3 E. Investment in Unconsolidated Entities The following is a summary of our investments in unconsolidated entities as of June 30, 2022 (in thousands): Ownership % (1) Number of Properties Carrying Amount of Investment as of (2) Equity in income and impairment of investment in unconsolidated entities for the six months ended (2)(3) Investment June 30, 2022 June 30, 2022 December 31, 2021 June 30, 2022 June 30, 2021 Industrial Partnerships 20 % 7 $ 113,562 $ 140,967 $ (5,673) $ — (1) Our ownership interest reflects legal ownership interest. Legal ownership may, at times, not equal our economic interest in the listed properties because of various provisions in certain entity agreements regarding capital contributions, distributions of cash flow based on capital account balances, allocations of profits and losses and payments of preferred returns. As a result, our actual economic interest (as distinct from its legal ownership interest) in certain of the properties could fluctuate from time to time and may not wholly align with legal ownership interests. (2) The total carrying amount of the investments was greater than the underlying equity in net assets by $74.1 million as of June 30, 2022. The difference relates to a step-up in fair value of the investment net assets acquired in connection with the merger with VEREIT on November 1, 2021. The step up in fair value was allocated to the individual investment assets and liabilities and is being amortized over the estimated useful life of the respective underlying tangible real estate assets, the lease term of the intangible real estate assets, and the remaining term of the mortgages payable. Prior to November 1, 2021, we did not own any unconsolidated entities. (3) As of June 30, 2022, the seven assets held by our Industrial Partnerships were under agreement of sale. As the portion of the net proceeds applied to our investment basis that we expect to receive at closing was less than our $121.4 million carrying amount of investment in unconsolidated entities, we recognized an other than temporary impairment of $7.8 million , which is included in 'Equity in income and impairment of investment in unconsolidated entities' in the consolidated statements of income and comprehensive income for the three and six months ended June 30, 2022. The aggregate debt outstanding for unconsolidated entities was $431.8 million as of June 30, 2022, and December 31, 2021, all of which is non-recourse to us with limited customary exceptions which vary from loan to loan. Each of us and our unconsolidated entity partners are subject to the provisions of the applicable entity agreements for our unconsolidated partnerships, which include provisions for when additional contributions may be required to fund certain cash shortfalls. |
Revolving Credit Facility and C
Revolving Credit Facility and Commercial Paper Program | 6 Months Ended |
Jun. 30, 2022 | |
Debt | |
Debt | Mortgages Payable During the six months ended June 30, 2022, we made $226.0 million in principal payments, including the full repayment of seven mortgages for $223.9 million. During the six months ended June 30, 2021, we made $42.6 million in principal payments, including the full repayment of five mortgages in for $40.9 million. We assumed eight mortgages on 17 properties totaling $45.1 million during the six months ended June 30, 2022, as compared to the assumption of one Sterling-denominated mortgage on one property totaling £31.0 million for the six months ended June 30, 2021. Assumed mortgages are secured by the properties on which the debt was placed and are considered non-recourse debt with limited customary exceptions which vary from loan to loan. Our mortgages contain customary covenants, such as limiting our ability to further mortgage each applicable property or to discontinue insurance coverage without the prior consent of the lender. At June 30, 2022, we were in compliance with these covenants. The balance of our deferred financing costs, which are classified as part of 'Mortgages payable, net', on our consolidated balance sheets, was $1.0 million at June 30, 2022, and $790,000 at December 31, 2021. These costs are being amortized over the remaining term of each mortgage. The following table summarizes our mortgages payable as of June 30, 2022, and December 31, 2021, respectively (dollars in thousands): As Of Number of Properties (1) Weighted Average Stated Interest Rate (2) Weighted Average Effective Interest Rate (3) Weighted Remaining Unamortized Premium and Deferred Financing Costs Balance, net Mortgage 6/30/2022 158 4.8 % 3.3 % 1.8 $ 928,943 $ 18,169 $ 947,112 12/31/2021 267 4.8 % 3.5 % 1.8 $ 1,114,129 $ 27,866 $ 1,141,995 (1) At June 30, 2022, there were 23 mortgages on 158 properties. At December 31, 2021, there were 22 mortgages on 267 properties. With the exception of one Sterling-denominated mortgage which is paid quarterly, the mortgages require monthly payments with principal payments due at maturity. At June 30, 2022, and December 31, 2021, all mortgages were at fixed interest rates. (2) Stated interest rates ranged from 3.0% to 6.9% at each of June 30, 2022, and December 31, 2021. (3) Effective interest rates ranged from 2.6% to 6.6% and 2.6% to 6.0% at each of June 30, 2022, and December 31, 2021, respectively. The following table summarizes the maturity of mortgages payable, excluding net premiums of $19.2 million and deferred financing costs of $1.0 million, as of June 30, 2022 (dollars in millions): Year of Maturity Principal 2022 $ 45.5 2023 62.8 2024 740.5 2025 42.3 2026 11.9 Thereafter 26.0 Totals $ 929.0 |
Revolving Credit Facility and Commercial Paper Program | |
Debt | |
Debt | Revolving Credit Facility and Commercial Paper Program A. Credit Facility In April 2022, we entered a new $4.25 billion unsecured credit facility to amend and restate our previous $3.0 billion unsecured revolving credit facility, which was due to expire in March 2023. The new multicurrency credit facility matures in June 2026, includes two six-month extensions that can be exercised at our option and allows us to borrow in up to 14 currencies, including U.S dollars. Similar to our previous revolving credit facility, the new revolving credit facility also has a $1.0 billion expansion option, which is subject to obtaining lender commitments. Under the new revolving credit, our current investment grade credit ratings provide for financing on U.S. Dollar borrowings at the Secured Overnight Financing Rate ("SOFR"), plus 0.725% with a SOFR adjustment charge of 0.10% and a revolving credit facility fee of 0.125%, for all-in pricing of 0.95% over SOFR and British Pound Sterling at the Sterling Overnight Indexed Average (“SONIA”), plus 0.725% with a SONIA adjustment charge of 0.0326% and a revolving credit facility fee of 0.125%, for all-in pricing of 0.8826% over SONIA. At June 30, 2022, credit facility origination costs of $19.7 million are included in other assets, net, as compared to $4.4 million at December 31, 2021, on our consolidated balance sheets. These costs are being amortized over the remaining term of our revolving credit facility. At June 30, 2022, we had a borrowing capacity of $4.03 billion available on our revolving credit facility (subject to customary conditions to borrowing) and an outstanding balance of $219.1 million, as compared to an outstanding balance at December 31, 2021, of $650.0 million. The weighted average interest rate on outstanding borrowings under our revolving credit facility was 1.5% during the six months ended June 30, 2022, and 0.9% during the six months ended June 30, 2021. At June 30, 2022, our weighted average interest rate on borrowings outstanding under our revolving credit facility was 2.2%. Our revolving credit facility is subject to various leverage and interest coverage ratio limitations, and at June 30, 2022, we were in compliance with the covenants on our revolving credit facility. B. Commercial Paper Program We have a U.S. dollar-denominated unsecured commercial paper program. Under the terms of the program, we were permitted to issue unsecured commercial paper notes up to a maximum aggregate amount outstanding of $1.0 billion. The commercial paper ranks on a parity in right of payment with all of our other unsecured senior indebtedness outstanding from time to time, including borrowings under our revolving credit facility, our term loan and our outstanding senior unsecured notes. Proceeds from commercial paper borrowings are used for general corporate purposes. As of June 30, 2022, the balance of borrowings outstanding under our commercial paper program was $950.0 million as compared to $901.4 million outstanding commercial paper borrowings at December 31, 2021. The weighted average interest rate on outstanding borrowings under our commercial paper program was 0.8% for the six months ended June 30, 2022, and 0.3% for the six months ended June 30, 2021. As of June 30, 2022, our weighted average interest rate on outstanding borrowings under our commercial paper program was 1.8%. We use our $4.25 billion revolving credit facility as a liquidity backstop for the repayment of the notes issued under the commercial paper program . The commercial paper borrowings generally carry a term of less than a year. During July 2022, the U.S. dollar-denominated unsecured commercial paper program was amended, and we entered into a new European unsecured commercial paper program. See Note 19, Subsequent Events . |
Term Loans
Term Loans | 6 Months Ended |
Jun. 30, 2022 | |
Debt | |
Debt | Mortgages Payable During the six months ended June 30, 2022, we made $226.0 million in principal payments, including the full repayment of seven mortgages for $223.9 million. During the six months ended June 30, 2021, we made $42.6 million in principal payments, including the full repayment of five mortgages in for $40.9 million. We assumed eight mortgages on 17 properties totaling $45.1 million during the six months ended June 30, 2022, as compared to the assumption of one Sterling-denominated mortgage on one property totaling £31.0 million for the six months ended June 30, 2021. Assumed mortgages are secured by the properties on which the debt was placed and are considered non-recourse debt with limited customary exceptions which vary from loan to loan. Our mortgages contain customary covenants, such as limiting our ability to further mortgage each applicable property or to discontinue insurance coverage without the prior consent of the lender. At June 30, 2022, we were in compliance with these covenants. The balance of our deferred financing costs, which are classified as part of 'Mortgages payable, net', on our consolidated balance sheets, was $1.0 million at June 30, 2022, and $790,000 at December 31, 2021. These costs are being amortized over the remaining term of each mortgage. The following table summarizes our mortgages payable as of June 30, 2022, and December 31, 2021, respectively (dollars in thousands): As Of Number of Properties (1) Weighted Average Stated Interest Rate (2) Weighted Average Effective Interest Rate (3) Weighted Remaining Unamortized Premium and Deferred Financing Costs Balance, net Mortgage 6/30/2022 158 4.8 % 3.3 % 1.8 $ 928,943 $ 18,169 $ 947,112 12/31/2021 267 4.8 % 3.5 % 1.8 $ 1,114,129 $ 27,866 $ 1,141,995 (1) At June 30, 2022, there were 23 mortgages on 158 properties. At December 31, 2021, there were 22 mortgages on 267 properties. With the exception of one Sterling-denominated mortgage which is paid quarterly, the mortgages require monthly payments with principal payments due at maturity. At June 30, 2022, and December 31, 2021, all mortgages were at fixed interest rates. (2) Stated interest rates ranged from 3.0% to 6.9% at each of June 30, 2022, and December 31, 2021. (3) Effective interest rates ranged from 2.6% to 6.6% and 2.6% to 6.0% at each of June 30, 2022, and December 31, 2021, respectively. The following table summarizes the maturity of mortgages payable, excluding net premiums of $19.2 million and deferred financing costs of $1.0 million, as of June 30, 2022 (dollars in millions): Year of Maturity Principal 2022 $ 45.5 2023 62.8 2024 740.5 2025 42.3 2026 11.9 Thereafter 26.0 Totals $ 929.0 |
Term loans | |
Debt | |
Debt | Term LoanIn October 2018, in conjunction with entering into our current revolving credit facility, we entered into a $250.0 million senior unsecured term loan, which matures in March 2024. Prior to April 2022, borrowing under this term loan bore interest at the current one-month LIBOR, plus 0.85%. In connection with entering into our new unsecured credit facility in April 2022, the previous LIBOR benchmark rate was replaced with daily SOFR, based on a five day lookback period, and, due to our current credit ratings, is not subject to a credit spread adjustment. In conjunction with this term loan, we also entered into an interest rate swap, which was based off the one-month LIBOR through June 30, 2022. As of June 30, 2022, the interest rate swap was also converted to SOFR and the effective interest rate on this term loan, after giving effect to the interest rate swap, is 3.73%. At June 30, 2022, deferred financing costs of |
Mortgages Payable
Mortgages Payable | 6 Months Ended |
Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
Debt | Mortgages Payable During the six months ended June 30, 2022, we made $226.0 million in principal payments, including the full repayment of seven mortgages for $223.9 million. During the six months ended June 30, 2021, we made $42.6 million in principal payments, including the full repayment of five mortgages in for $40.9 million. We assumed eight mortgages on 17 properties totaling $45.1 million during the six months ended June 30, 2022, as compared to the assumption of one Sterling-denominated mortgage on one property totaling £31.0 million for the six months ended June 30, 2021. Assumed mortgages are secured by the properties on which the debt was placed and are considered non-recourse debt with limited customary exceptions which vary from loan to loan. Our mortgages contain customary covenants, such as limiting our ability to further mortgage each applicable property or to discontinue insurance coverage without the prior consent of the lender. At June 30, 2022, we were in compliance with these covenants. The balance of our deferred financing costs, which are classified as part of 'Mortgages payable, net', on our consolidated balance sheets, was $1.0 million at June 30, 2022, and $790,000 at December 31, 2021. These costs are being amortized over the remaining term of each mortgage. The following table summarizes our mortgages payable as of June 30, 2022, and December 31, 2021, respectively (dollars in thousands): As Of Number of Properties (1) Weighted Average Stated Interest Rate (2) Weighted Average Effective Interest Rate (3) Weighted Remaining Unamortized Premium and Deferred Financing Costs Balance, net Mortgage 6/30/2022 158 4.8 % 3.3 % 1.8 $ 928,943 $ 18,169 $ 947,112 12/31/2021 267 4.8 % 3.5 % 1.8 $ 1,114,129 $ 27,866 $ 1,141,995 (1) At June 30, 2022, there were 23 mortgages on 158 properties. At December 31, 2021, there were 22 mortgages on 267 properties. With the exception of one Sterling-denominated mortgage which is paid quarterly, the mortgages require monthly payments with principal payments due at maturity. At June 30, 2022, and December 31, 2021, all mortgages were at fixed interest rates. (2) Stated interest rates ranged from 3.0% to 6.9% at each of June 30, 2022, and December 31, 2021. (3) Effective interest rates ranged from 2.6% to 6.6% and 2.6% to 6.0% at each of June 30, 2022, and December 31, 2021, respectively. The following table summarizes the maturity of mortgages payable, excluding net premiums of $19.2 million and deferred financing costs of $1.0 million, as of June 30, 2022 (dollars in millions): Year of Maturity Principal 2022 $ 45.5 2023 62.8 2024 740.5 2025 42.3 2026 11.9 Thereafter 26.0 Totals $ 929.0 |
Notes Payable
Notes Payable | 6 Months Ended |
Jun. 30, 2022 | |
Debt | |
Debt | Mortgages Payable During the six months ended June 30, 2022, we made $226.0 million in principal payments, including the full repayment of seven mortgages for $223.9 million. During the six months ended June 30, 2021, we made $42.6 million in principal payments, including the full repayment of five mortgages in for $40.9 million. We assumed eight mortgages on 17 properties totaling $45.1 million during the six months ended June 30, 2022, as compared to the assumption of one Sterling-denominated mortgage on one property totaling £31.0 million for the six months ended June 30, 2021. Assumed mortgages are secured by the properties on which the debt was placed and are considered non-recourse debt with limited customary exceptions which vary from loan to loan. Our mortgages contain customary covenants, such as limiting our ability to further mortgage each applicable property or to discontinue insurance coverage without the prior consent of the lender. At June 30, 2022, we were in compliance with these covenants. The balance of our deferred financing costs, which are classified as part of 'Mortgages payable, net', on our consolidated balance sheets, was $1.0 million at June 30, 2022, and $790,000 at December 31, 2021. These costs are being amortized over the remaining term of each mortgage. The following table summarizes our mortgages payable as of June 30, 2022, and December 31, 2021, respectively (dollars in thousands): As Of Number of Properties (1) Weighted Average Stated Interest Rate (2) Weighted Average Effective Interest Rate (3) Weighted Remaining Unamortized Premium and Deferred Financing Costs Balance, net Mortgage 6/30/2022 158 4.8 % 3.3 % 1.8 $ 928,943 $ 18,169 $ 947,112 12/31/2021 267 4.8 % 3.5 % 1.8 $ 1,114,129 $ 27,866 $ 1,141,995 (1) At June 30, 2022, there were 23 mortgages on 158 properties. At December 31, 2021, there were 22 mortgages on 267 properties. With the exception of one Sterling-denominated mortgage which is paid quarterly, the mortgages require monthly payments with principal payments due at maturity. At June 30, 2022, and December 31, 2021, all mortgages were at fixed interest rates. (2) Stated interest rates ranged from 3.0% to 6.9% at each of June 30, 2022, and December 31, 2021. (3) Effective interest rates ranged from 2.6% to 6.6% and 2.6% to 6.0% at each of June 30, 2022, and December 31, 2021, respectively. The following table summarizes the maturity of mortgages payable, excluding net premiums of $19.2 million and deferred financing costs of $1.0 million, as of June 30, 2022 (dollars in millions): Year of Maturity Principal 2022 $ 45.5 2023 62.8 2024 740.5 2025 42.3 2026 11.9 Thereafter 26.0 Totals $ 929.0 |
Notes payable | |
Debt | |
Debt | Notes Payable A. General Our senior unsecured notes and bonds are U.S. dollar denominated and Sterling denominated. Foreign denominated notes are converted at the applicable exchange rate on the balance sheet date. The following are sorted by maturity date (in millions): Principal Amount (Currency Denomination) Carrying Value (USD) as of June 30, 2022 December 31, 2021 4.600% notes, $500 issued February 2014, of which $485 was exchanged in November 2021, both due in February 2024 (1) $ 500 $ 500 $ 500 3.875% notes, issued in June 2014 and due in July 2024 $ 350 350 350 3.875% notes, issued in April 2018 and due in April 2025 $ 500 500 500 4.625% notes, $550 issued October 2018, of which $544 was exchanged in November 2021, both due in November 2025 (1) $ 550 550 550 0.750% notes, issued December 2020 and due in March 2026 $ 325 325 325 4.875% notes, $600 issued June 2016, of which $596 was exchanged in November 2021, both due in June 2026 (1) $ 600 600 600 4.125% notes, $250 issued in September 2014 and $400 issued in March 2017, both due in October 2026 $ 650 650 650 1.875% notes, issued in January 2022 and due in January 2027 £ 250 304 — 3.000% notes, issued in October 2016 and due in January 2027 $ 600 600 600 1.125% notes, issued in July 2021 and due in July 2027 £ 400 486 541 3.950% notes, $600 issued August 2017, of which $594 was exchanged in November 2021, both due in August 2027 (1) $ 600 600 600 3.650% notes, issued in December 2017 and due in January 2028 $ 550 550 550 3.400% notes, $600 issued June 2020, of which $598 was exchanged in November 2021, both due in January 2028 (1) $ 600 600 600 2.200% notes, $500 issued November 2020, of which $497 was exchanged in November 2021, both due in June 2028 (1) $ 500 500 500 3.250% notes, issued in June 2019 and due in June 2029 $ 500 500 500 3.100% notes, $600 issued December 2019, of which $596 was exchanged in November 2021, both due in December 2029 (1)(2) $ 599 599 599 3.160% notes, issued in June 2022 and due in June 2030 £ 140 170 — 1.625% notes, issued in October 2020 and due December 2030 £ 400 486 541 3.250% notes, $600 issued in May 2020 and $350 issued in July 2020, both due in January 2031 $ 950 950 950 3.180% notes, issued in June 2022 and due in June 2032 £ 345 419 — 2.850% notes, $700 issued November 2020, of which $699 was exchanged in November 2021, both due in December 2032 (1) $ 700 700 700 1.800% notes, issued in December 2020 and due in March 2033 $ 400 400 400 1.750% notes, issued in July 2021 and due in July 2033 £ 350 425 474 2.730% notes, issued in May 2019 and due in May 2034 £ 315 382 427 5.875% bonds, $100 issued in March 2005 and $150 issued in June 2011, both due in March 2035 $ 250 250 250 3.390% notes, issued in June 2022 and due in June 2037 £ 115 140 — 2.500% notes, issued in January 2022 and due in January 2042 £ 250 304 — 4.650% notes, $300 issued in March 2017 and $250 issued in December 2017, both due in March 2047 $ 550 550 550 Total principal amount $ 13,390 $ 12,257 Unamortized net premiums and deferred financing costs 198 243 $ 13,588 $ 12,500 (1) Carrying Value (USD) includes the portion of the VEREIT OP notes that remained outstanding, totaling $39.1 million in the aggregate at each of June 30, 2022, and December 31, 2021, that were not exchanged in the exchange offers commenced by us with respect to the outstanding bonds of VEREIT OP in connection with the consummation of the merger with VEREIT (the "Exchange Offers"). (2) These notes were originally issued by VEREIT OP in December of 2019 for the principal amount of $600 million. The amount of Realty Income debt issued through the Exchange Offers was $599 million, resulting from cancellations due to late tenders that forfeited the early participation premium of $30 per $1,000 principal amount and cash paid in lieu of fractional shares. The following table summarizes the maturity of our notes and bonds payable as of June 30, 2022, excluding net unamortized premiums of $257.0 million and deferred financing costs of $58.7 million (dollars in millions): Year of Maturity Principal 2024 $ 850 2025 1,050 2026 1,575 Thereafter 9,915 Totals $ 13,390 As of June 30, 2022, the weighted average interest rate on our notes and bonds payable was 3.2% and the weighted average remaining years until maturity was 7.6 years. Interest incurred on all of the notes and bonds was $103.0 million and $62.7 million for the three months ended June 30, 2022 and June 30, 2021, respectively, and $206.1 million and $125.9 million for the six months ended June 30, 2022 and June 30, 2021, respectively. Our outstanding notes and bonds are unsecured; accordingly, we have not pledged any assets as collateral for these or any other obligations. Interest on our £400 million of 1.625% senior unsecured notes issued in October 2020, our £400 million of 1.125% senior unsecured notes issued in July 2021, our £350 million of 1.750% senior unsecured notes also issued in July 2021, our £250 million of 1.875% senior unsecured notes issued in January 2022, and £250 million of 2.500% senior unsecured notes also issued in January 2022 is paid annually. Interest on our remaining senior unsecured note and bond obligations is paid semiannually. All of these notes and bonds contain various covenants, including: (i) a limitation on incurrence of any debt which would cause our debt to total adjusted assets ratio to exceed 60%; (ii) a limitation on incurrence of any secured debt which would cause our secured debt to total adjusted assets ratio to exceed 40%; (iii) a limitation on incurrence of any debt which would cause our debt service coverage ratio to be less than 1.5 times; and (iv) the maintenance at all times of total unencumbered assets not less than 150% of our outstanding unsecured debt. At June 30, 2022, we were in compliance with these covenants. B. Note Repayment In January 2021, we redeemed all $950.0 million in principal amount of our outstanding 3.250% notes due October 2022, plus accrued and unpaid interest. As a result of the early redemption, we recognized a $46.5 million loss on extinguishment of debt in the consolidated statements of income and comprehensive income for the six months ended June 30, 2021. There were no comparable repayments for the six months ended June 30, 2022. C. Note Issuances During the six months ended June 30, 2022, we issued the following notes and bonds (in millions): 2022 Issuances Date of Issuance Maturity Date Principal amount used Price of par value Effective yield to maturity 1.875% Notes January 2022 January 2027 £ 250 99.487 % 1.974 % 2.500% Notes January 2022 January 2042 £ 250 98.445 % 2.584 % 3.160% Notes June 2022 June 2030 £ 140 100.000 % 3.160 % 3.180% Notes June 2022 June 2032 £ 345 100.000 % 3.180 % 3.390% Notes June 2022 June 2037 £ 115 100.000 % 3.390 % There were no comparable note issuances during the six months ended June 30, 2021. |
Issuances of Common Stock
Issuances of Common Stock | 6 Months Ended |
Jun. 30, 2022 | |
Equity [Abstract] | |
Issuances of Common Stock | Issuances of Common Stock A. Issuances of Common Stock in Underwritten Public Offerings In January 2021, we issued 12,075,000 shares of common stock in an underwritten public offering, including 1,575,000 shares purchased by the underwriters upon the exercise of their option to purchase additional shares. After deducting underwriting discounts of $19.3 million, the net proceeds of $669.6 million were used to fund property acquisitions and for general corporate purposes and working capital. There were no comparative offerings during the six months ended June 30, 2022. B. At-the-Market (ATM) Program In June 2022, we replaced our prior "at-the-market" program, or our prior ATM program, which authorized us to offer and sell up to 69,088,433 shares of common stock, with a new "at-the-market" equity distribution program, or our ATM program, pursuant to which we may offer and sell up to 120,000,000 shares of common stock (1) by us to, or through, a consortium of banks acting as our sales agents or (2) by a consortium of banks acting as forward sellers on behalf of any forward purchasers contemplated thereunder, in each case by means of ordinary brokers' transactions on the New York Stock Exchange ("NYSE: O") at prevailing market prices or at negotiated prices. At June 30, 2022, we had 120,000,000 shares remaining for future issuance under our ATM program. We anticipate maintaining the availability of our ATM program in the future, including the replenishment of authorized shares issuable thereunder. The following table outlines common stock issuances pursuant to our prior ATM program (dollars in millions): Three months ended June 30, Six months ended June 30, 2022 2021 2022 2021 Shares of common stock issued under the ATM program (1) 15,899,972 6,589,598 25,973,181 6,589,598 Gross proceeds $ 1,067.3 $ 454.8 $ 1,727.5 $ 454.8 Sales Agents' Commissions (7.0) (4.6) (10.9) (4.6) Other Offering Expenses (3.7) (0.2) (3.9) (0.3) Net proceeds $ 1,056.6 $ 450.0 $ 1,712.7 $ 449.9 (1) During the three and six months ended June 30, 2022 15,899,972 shares were sold pursuant to forward sale confirmations. As of June 30, 2022, there were no open forward sale confirmations and 120,000,000 shares remained available for future issuance. No shares were sold pursuant to forward sale confirmations during the three and six months ended June 30, 2021. C. Dividend Reinvestment and Stock Purchase Plan Our Dividend Reinvestment and Stock Purchase Plan, or our DRSPP, provides our common stockholders, as well as new investors, with a convenient and economical method of purchasing our common stock and reinvesting their distributions. Our DRSPP also allows our current stockholders to buy additional shares of common stock by reinvesting all or a portion of their distributions. Our DRSPP authorizes up to 26,000,000 common shares to be issued. At June 30, 2022, we had 11,250,748 shares remaining for future issuance under our DRSPP program. The following table outlines common stock issuances pursuant to our DRSPP program (dollars in millions): Three months ended June 30, Six months ended June 30, 2022 2021 2022 2021 Shares of common stock issued under the DRSPP program 43,260 39,423 84,631 82,817 Gross proceeds $ 2.9 $ 2.7 $ 5.7 $ 5.3 Our DRSPP includes a waiver approval process, allowing larger investors or institutions, per a formal approval process, to purchase shares at a small discount, if approved by us. We did not issue shares under the waiver approval process during the six months ended June 30, 2022, or 2021. |
Noncontrolling Interests
Noncontrolling Interests | 6 Months Ended |
Jun. 30, 2022 | |
Noncontrolling Interest [Abstract] | |
Noncontrolling Interests | Noncontrolling Interests There are four entities with noncontrolling interests that we consolidate, including an operating partnership, Realty Income, L.P., a joint venture acquired in 2019, and two development joint ventures, one acquired in 2020 and one acquired in May 2021. The following table represents the change in the carrying value of all noncontrolling interests through June 30, 2022 (dollars in thousands): Realty Income, L.P. units (1) Other Noncontrolling Interests Total Carrying value at December 31, 2021 $ 62,416 $ 14,410 $ 76,826 Distributions (1,624) (152) (1,776) Allocation of net income 1,095 122 1,217 Carrying value at June 30, 2022 $ 61,887 $ 14,380 $ 76,267 (1) 1,060,709 units were outstanding as of both June 30, 2022 and December 31, 2021. At June 30, 2022, Realty Income, L.P. and certain of our joint venture investments are considered VIEs in which we were deemed the primary beneficiary based on our controlling financial interests. Below is a summary of selected financial data of consolidated VIEs included on our consolidated balance sheets at June 30, 2022, and December 31, 2021 (in thousands): June 30, 2022 December 31, 2021 Net real estate $ 705,322 $ 688,229 Total assets $ 804,027 $ 795,670 Total liabilities $ 59,033 $ 57,057 |
Financial Instruments and Fair
Financial Instruments and Fair Value Measurements | 6 Months Ended |
Jun. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Financial Instruments and Fair Value Measurements | Financial Instruments and Fair Value Measurements Fair value is defined as the price that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (the exit price). ASC 820, Fair Value Measurements and Disclosures , sets forth a fair value hierarchy that categorizes inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities and lowest priority to unobservable inputs. Categorization within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement. • Level 1 – Unadjusted quoted prices in active markets Financial instruments are classified as Level 1 if their value is observable in an active market. Such instruments are valued by reference to unadjusted quoted prices for identical assets or liabilities in active markets where the quoted price is readily available, and the price represents actual and regularly occurring market transactions. An active market is one in which transactions occur with sufficient volume and frequency to provide pricing information on an ongoing basis. • Level 2 – Valuation Technique Using Observable Inputs Financial instruments classified as Level 2 are valued using quoted prices for identical instruments in markets that are not considered to be active, or quoted prices for similar assets or liabilities in active markets, or valuation techniques in which all significant inputs are observable or can be corroborated by observable market data for substantially the entire contractual term of the financial asset or liability. • Level 3 – Valuation Technique Using Significant Unobservable Inputs Financial instruments are classified as Level 3 if their valuation incorporates significant inputs that are not based on observable market data (unobservable inputs). Such inputs are generally determined based on observable inputs of a similar nature, historical observations on the level of the inputs, or other analytical techniques. We evaluate our hierarchy disclosures each quarter and depending on various factors, it is possible that an asset or liability may be classified differently from period to period. Changes in the type of inputs may result in a reclassification for certain assets. We have not historically had changes in classifications and do not expect that changes in classifications between levels will be frequent. Financial Instruments Not Measured at Fair Value on the Consolidated Balance Sheets The fair value of short-term financial instruments such as cash and cash equivalents, accounts receivable, escrow deposits, loans receivable, accounts payable, distributions payable, line of credit payable and commercial paper borrowings, and other liabilities approximate their carrying value in the accompanying consolidated balance sheets, due to their short-term nature. The fair value of our term loan approximates carrying value due to the frequent repricing of the variable interest rate charged on the borrowing, which is based on the daily SOFR. The fair value of our financial instruments not carried at fair value are disclosed as follows (in millions): June 30, 2022 Carrying value Estimated fair value Mortgages payable assumed in connection with acquisitions (1) $ 928.9 $ 906.6 Notes and bonds payable (2) $ 13,390.3 $ 12,377.8 December 31, 2021 Carrying value Estimated fair value Mortgages payable assumed in connection with acquisitions (1) $ 1,114.1 $ 1,154.7 Notes and bonds payable (2) $ 12,257.3 $ 13,114.5 (1) Excludes non-cash net premiums recorded on the mortgages payable. The unamortized balance of these net premiums was $19.2 million at June 30, 2022, and $28.7 million at December 31, 2021. Also excludes deferred financing costs of $1.0 million at June 30, 2022, and $790,000 at December 31, 2021. (2) Excludes non-cash premiums and discounts recorded on notes payable. The unamortized balance of the net premiums was $257.0 million at June 30, 2022, and $295.5 million at December 31, 2021. Also excludes deferred financing costs of $58.7 million at June 30, 2022, and $53.1 million at December 31, 2021. The estimated fair values of our mortgages payable assumed in connection with acquisitions and private senior notes payable have been calculated by discounting the future cash flows using an interest rate based upon the relevant forward interest rate curve, plus an applicable credit-adjusted spread. Because this methodology includes unobservable inputs that reflect our own internal assumptions and calculations, the measurement of estimated fair values related to our mortgages payable is categorized as level three on the three-level valuation hierarchy. The estimated fair values of our publicly-traded senior notes and bonds payable are based upon indicative market prices and recent trading activity of our senior notes and bonds payable, including the senior notes and bonds payable assumed in the debt exchange offer on November 9, 2021, in connection with our merger with VEREIT. Because this methodology includes inputs that are less observable by the public and are not necessarily reflected in active markets, the measurement of the estimated fair values related to our notes and bonds payable is categorized as level two on the three-level valuation hierarchy. Financial Instruments Measured at Fair Value on a Recurring Basis For derivative assets and liabilities, we may utilize interest rate swaps and forward-starting swaps to manage interest rate risk, and cross-currency swaps, currency exchange swaps, foreign currency forwards and foreign currency collars to manage foreign currency risk. The valuation of these instruments is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves, spot and forward rates, as well as option volatility . Derivative fair values also include credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of our derivative contracts for the effect of nonperformance risk, we have considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees. Although we have determined that the majority of the inputs used to value our derivatives fall within level two on the three-level valuation hierarchy, the credit valuation adjustments associated with our derivatives utilize level three inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by ourselves and our counterparties. However, at June 30, 2022, and December 31, 2021, we assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our derivative positions and determined that the credit valuation adjustments are not significant to the overall valuation of our derivatives. As a result, we determined that our derivative valuations in their entirety are classified as level two. Items Measured at Fair Value on a Non-Recurring Basis Certain financial and nonfinancial assets and liabilities are measured at fair value on a non-recurring basis and are subject to fair value adjustments only under certain circumstances, such as when an impairment write-down occurs. The following table summarizes our provisions for impairment on real estate investments during the periods indicated below (dollars in millions): Three months ended June 30, Six months ended June 30, 2022 2021 2022 2021 Carrying value prior to impairment $ 64.5 $ 45.6 $ 98.2 $ 59.2 Less: total provisions for impairment (7.7) (17.2) (14.7) (20.0) Carrying value after impairment $ 56.8 $ 28.4 $ 83.5 $ 39.2 Number of properties: Classified as held for sale 9 1 23 1 Classified as held for investment 3 5 3 6 Sold 32 31 49 44 Derivative Designated as Hedging Instruments In order to hedge the foreign currency risk associated with interest payments on intercompany loans denominated in British Pound Sterling, or GBP, we initiated a hedging strategy to enter into foreign currency forward contracts to sell GBP and buy U.S. Dollars, or USD. These foreign currency forwards are designated as cash flow hedges. Forward points on the forward contracts are included in the assessment of hedge effectiveness. Amounts reported in other comprehensive income (loss) related to foreign currency derivative contracts will be reclassified to other gain and (loss) in the same period during which the hedged forecasted transactions affect earnings. In May 2019, we entered into four cross-currency swaps to exchange £130 million Sterling for $166 million maturing in May 2034, in order to hedge the foreign currency risk associated with our Sterling-denominated intercompany loan receivable from our consolidated foreign subsidiaries. These cross-currency swaps were designated as cash flow hedges on their trade date. In June 2022, following the early prepayment of our Sterling-denominated intercompany loan receivable from our consolidated foreign subsidiaries, we terminated the four cross-currency swaps used to hedge the foreign currency exposure of the intercompany loan. As the hedge relationship has been terminated and the future principal and interest associated with the prepaid intercompany loan will not occur, $20.0 million has been reclassified from AOCI to Foreign currency and derivative gain, net during the three months ended June 30, 2022. As of June 30, 2022, we had one interest rate swap in place on our $250.0 million unsecured term loan. Our objective in using derivatives is to add stability to interest expense and to manage our exposure to interest rate movements. We designated this interest rate swap as a cash flow hedge in accordance with Topic 815, Derivatives and Hedging . This interest rate swap is recorded on the consolidated balances sheets at fair value. Changes to fair value are recorded to accumulated other comprehensive income (loss), or AOCI, and subsequently reclassified into interest expense in the same periods during which the hedged transaction affects earnings. The following table summarizes the amount of unrealized gain (loss) on derivatives in other comprehensive income during the periods indicated below (in thousands): Three months ended June 30, Six months ended June 30, Derivatives in Cash Flow Hedging Relationships 2022 2021 2022 2021 Currency swaps $ (6,986) $ 5,598 $ (5,091) $ 3,978 Interest rate swaps 30,386 (20,353) 69,391 27,676 Foreign currency forwards 10,054 3,922 12,844 3,922 Total unrealized gain on derivatives $ 33,454 $ (10,833) $ 77,144 $ 35,576 The following table summarizes the amount of gain (loss) on derivatives reclassified from accumulated other comprehensive income (loss) during the periods indicated below (in thousands): Three months ended June 30, Six months ended June 30, Derivatives in Cash Flow Hedging Relationships Location of Gain (Loss) Recognized in Income 2022 2021 2022 2021 Currency swaps Foreign currency and derivative gain, net $ 21,527 $ (235) $ 27,641 $ (1,386) Interest rate swaps Interest expense (2,153) (2,578) (4,683) (5,119) Net increase (decrease) to net income $ 19,374 $ (2,813) $ 22,958 $ (6,505) We expect to reclassify $2.7 million from AOCI as an increase to interest expense relating to interest rate swaps and $8.5 million from AOCI to foreign currency gain relating to foreign currency forwards within the next twelve months. Derivatives Not Designated as Hedging Instruments Based on our potential exposure to changes in foreign currency exchange rate, primarily in British Pound Sterling and, to a lesser extent, the Euro, we initiated a program in the third quarter of 2021 to enter into foreign currency collars. A foreign currency collar consists of a written call option and a purchased put option to sell the foreign currency at a range of predetermined exchange rates. A foreign currency collar guarantees that the exchange rate of the currency will not fluctuate beyond the range of the options’ strike prices. Our foreign currency collars generally have maturities of five months or less and are not designated as hedge instruments for accounting purposes. The gain or loss on these derivative contracts are recognized in 'Foreign currency and derivative gain, net' in the consolidated statements of income and comprehensive income based on the changes in fair value. In addition, we enter into foreign currency exchange swap agreements to reduce the effects of currency exchange rate fluctuations between the British Pound Sterling and Euro. These derivative contracts generally mature within one The following table details our foreign currency and derivative gain, net included in income (in thousands): Three months ended June 30, Six months ended June 30, 2022 2021 2022 2021 Realized foreign currency and derivative gain (loss), net: Gain on the settlement of undesignated derivatives $ 79,308 $ — $ 76,628 $ — Gain (loss) on the settlement of designated derivatives reclassified from AOCI 21,527 (235) 27,641 (1,386) Gain (loss) on the settlement of transactions with third parties 1,004 (104) 952 (104) Total realized foreign currency and derivative gain (loss), net $ 101,839 $ (339) $ 105,221 $ (1,490) Unrealized foreign currency and derivative gain (loss), net: Gain on the change in fair value of undesignated derivatives $ 37,274 $ — $ 59,995 $ 3,724 Gain (loss) on remeasurement of certain assets and liabilities (131,633) 739 (158,326) (1,030) Total unrealized foreign currency and derivative gain (loss), net $ (94,359) $ 739 $ (98,331) $ 2,694 Total foreign currency and derivative gain, net $ 7,480 $ 400 $ 6,890 $ 1,204 The following table summarizes the terms and fair values of our derivative financial instruments at June 30, 2022, and December 31, 2021 (dollars in millions): Derivative Type Number of Instruments (1) Accounting Classification Notional Amount as of Weighted Average Strike Rate (2) Maturity Date (3) Fair Value - asset (liability) as of Derivatives Designated as Hedging Instruments June 30, 2022 December 31, 2021 June 30, 2022 December 31, 2021 Interest rate swap 1 Derivative $ 250.0 $ 250.0 2.88% March 2024 $ 0.4 $ (11.9) Cross-currency swaps (4) — Derivative — 166.3 — — — (13.8) Foreign currency forwards 36 Derivative 177.5 176.1 (5) Jul 2022 - Aug 2024 20.4 7.6 Forward-starting swaps (6) 4 Derivative 300.0 300.0 1.86% Nov 2032 - Jun 2033 31.2 (3.2) Forward-starting swaps (6) 2 Hybrid Debt 200.0 200.0 1.93% Nov 2032 - Jun 2033 16.2 (5.1) $ 927.5 $ 1,092.4 $ 68.2 $ (26.4) Derivatives not Designated as Hedging Instruments Currency exchange swaps (7) 5 Derivative 833.2 1,639.5 (8) Jul 2022 - Nov 2022 36.9 (14.7) Total of all Derivatives $ 1,760.7 $ 2,731.9 $ 105.1 $ (41.1) (1) This column represents the number of instruments outstanding as of June 30, 2022. (2) Weighted average strike rate is calculated using the current notional value as of June 30, 2022. (3) This column represents maturity dates for instruments outstanding as of June 30, 2022. (4) In June 2022, we terminated the four British Pound Sterling, or GBP, cross-currency swaps with notional amount of $166.3 million. (5) Weighted average forward GBP-USD exchange rate of 1.40. (6) There were five treasury rate locks entered into during February 2020 that were terminated in June 2020 and converted into six forward starting interest rate swaps through a cashless settlement. (7) Represents three GBP currency exchange swaps with notional amount of $564.9 million and two Euro, or EUR, currency exchange swaps with notional amount of $268.3 million. (8) Weighted average Forward GBP-USD exchange rate of 1.26 and Weighted Average Forward EUR-USD exchange rate of 1.11. We measure our derivatives at fair value and include the balances within other assets and accounts payable and accrued expenses on our consolidated balance sheets. We have agreements with each of our derivative counterparties containing provisions under which we could be declared in default on our derivative obligations if repayment of our indebtedness is accelerated by the lender due to our default. We utilize interest rate swaps and forward-starting swaps to manage interest rate risk and cross-currency swaps, currency exchange swaps, foreign currency forwards and foreign currency collars to manage foreign currency risk. The valuation of these instruments is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves, spot and forward rates, as well as option volatility. To comply with the provisions of ASC 820, Fair Value Measurement , we incorporate credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of our derivative contracts for the effect of nonperformance risk, we have considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees. |
Operating Leases
Operating Leases | 6 Months Ended |
Jun. 30, 2022 | |
Leases [Abstract] | |
Operating Leases | Operating Leases A. At June 30, 2022, we owned 11,427 properties in all 50 U.S. states, Puerto Rico, the U.K. and Spain. Of the 11,427 properties, 11,289, or 98.8%, are single-client properties, and the remaining are multi-client properties. At June 30, 2022, 132 properties were available for lease or sale. Substantially all of our leases are net leases where our client pays or reimburses us for property taxes and assessments, maintains the interior and exterior of the building and leased premises, and carries insurance coverage for public liability, property damage, fire and extended coverage. Rent based on a percentage of our client's gross sales, or percentage rent, for the three months ended June 30, 2022, and 2021 was $2.2 million and $596,000, respectively. Percentage rents for the six months ended $6.0 million and $1.6 million, respectively. B. Major Clients - No individual client’s rental revenue, including percentage rents, represented more than 10% of our total revenue for each of the six months ended June 30, 2022, and 2021. |
Distributions Paid and Payable
Distributions Paid and Payable | 6 Months Ended |
Jun. 30, 2022 | |
Dividends [Abstract] | |
Distributions Paid and Payable | Distributions Paid and Payable We pay monthly distributions to our common stockholders. The following is a summary of monthly distributions paid per common share for the six months ended June 30, 2022, and 2021: Month 2022 2021 January $ 0.2465 $ 0.2345 February 0.2465 0.2345 March 0.2465 0.2345 April 0.2470 0.2350 May 0.2470 0.2350 June 0.2470 0.2350 Total $ 1.4805 $ 1.4085 At June 30, 2022, a distribution of $0.2475 per common share was payable and was paid in July 2022. |
Net Income per Common Share
Net Income per Common Share | 6 Months Ended |
Jun. 30, 2022 | |
Earnings Per Share [Abstract] | |
Net Income per Common Share | Net Income per Common ShareBasic net income per common share is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding during each period. Diluted net income per common share is computed by dividing net income available to common stockholders, plus income attributable to dilutive shares and convertible common units for the period, by the weighted average number of common shares that would have been outstanding assuming the issuance of common shares for all potentially dilutive common shares outstanding during the reporting period. The following is a reconciliation of the denominator of the basic net income per common share computation to the denominator of the diluted net income per common share computation: Three months ended June 30, Six months ended June 30, 2022 2021 2022 2021 Weighted average shares used for the basic net income per share computation 601,672,201 374,236,424 597,778,173 372,879,165 Incremental shares from share-based compensation 358,465 104,599 362,529 92,579 Weighted average shares used for diluted net income per share computation 602,030,666 374,341,023 598,140,702 372,971,744 Unvested shares from share based compensation that were anti-dilutive 16,039 161,359 16,437 148,342 Weighted average partnership common units convertible to common shares that were anti-dilutive 1,060,709 463,119 1,060,709 463,119 |
Supplemental Disclosures of Cas
Supplemental Disclosures of Cash Flow Information | 6 Months Ended |
Jun. 30, 2022 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Disclosures of Cash Flow Information | Supplemental Disclosures of Cash Flow Information The following table summarizes our supplemental cash flow information during the periods indicated below (dollars in thousands): Six months ended June 30, 2022 2021 Supplemental disclosures: Cash paid for interest $ 229,929 $ 139,389 Cash paid for income taxes $ 30,091 $ 9,726 Non-cash activities: Net increase in fair value of derivatives $ 146,181 $ 60,414 Mortgages assumed at fair value $ 45,079 $ 43,779 The following table provides a reconciliation of cash and cash equivalents reported within the consolidated balance sheets to the total of the cash, cash equivalents and restricted cash reported within the consolidated statements of cash flows (dollars in thousands): June 30, 2022 June 30, 2021 Cash and cash equivalents shown in the consolidated balance sheets $ 172,849 $ 231,164 Restricted escrow deposits (1) 100,098 34,636 Impounds related to mortgages payable (1) 718 1,185 Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows $ 273,665 $ 266,985 (1) Included within other assets, net on the consolidated balance sheets (see note 4). These amounts consist of cash that we are legally entitled to, but that is not immediately available to us. As a result, these amounts were considered restricted as of the dates presented. |
Common Stock Incentive Plan
Common Stock Incentive Plan | 6 Months Ended |
Jun. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Common Stock Incentive Plan | Common Stock Incentive Plan In March 2021, our Board of Directors adopted, and in May 2021, stockholders approved, the Realty Income 2021 Incentive Award Plan, or 2021 Plan. This note should be read in conjunction with the more complete discussion of our 2021 Plan included in note 16 to our consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2021. The amount of share-based compensation costs recognized in 'General and administrative' in the consolidated statements of income and comprehensive income was $6.6 million and $4.5 million during the three months ended June 30, 2022 and 2021, respectively and $11.6 million and $8.2 million during the six months ended June 30, 2022 and 2021, respectively. A. Restricted Stock During the six months ended June 30, 2022, we granted 153,105 shares of common stock under the 2021 Plan. This included 40,000 total shares of restricted stock granted to the independent members of our Board of Directors in connection with our annual awards in May 2022, 20,000 shares of which vested immediately and 20,000 shares of which vest in equal parts over a three-year service period. Our restricted stock awards granted to employees vest in equal parts over a four-year service period. As of June 30, 2022, the remaining unamortized share-based compensation expense related to restricted stock totaled $14.6 million, which is being amortized on a straight-line basis over the service period of each applicable award. The amount of share-based compensation is based on the fair value of the stock at the grant date. We define the grant date as the date the recipient and Realty Income have a mutual understanding of the key terms and conditions of the award, and the recipient of the grant begins to benefit from, or be adversely affected by, subsequent changes in the price of the shares. B. Performance Shares and Restricted Stock Units During the six months ended June 30, 2022, we granted 154,840 performance shares, as well as dividend equivalent rights, to our executive officers. The performance shares are earned based on our Total Shareholder Return (TSR) performance relative to select industry indices and peer groups as well as achievement of certain operating metrics, and vest 50% on the first and second January 1 after the end of the three-year performance period, subject to continued service. During the six months ended June 30, 2022, we also granted 24,456 restricted stock units, all of which vest over a four-year service period. These restricted stock units have the same economic rights as shares of restricted stock. As of June 30, 2022, the remaining share-based compensation expense related to the performance shares and restricted stock units totaled $24.0 million. The fair value of the performance shares were estimated on the date of grant using a Monte Carlo Simulation model. The performance shares are being recognized on a tranche-by-tranche basis over the service period. The amount of share-based compensation for the restricted stock units is based on the fair value of our common stock at the grant date. The expense amortization period for restricted stock units is the lesser of the four-year service period or the period over which the awardee reaches the qualifying retirement age. For employees who have already met the qualifying retirement age, restricted stock units are fully expensed at the grant date. C. Stock Options We did not grant any stock options during the six months ended June 30, 2022. During the six months ended June 30, 2022, we recorded $47,000 of expense related to stock options. There was no comparable expense for the six months ended June 30, 2021. As of June 30, 2022, there was no unamortized expense relating to our outstanding stock options. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and ContingenciesIn the ordinary course of business, we are party to various legal actions which we believe are routine in nature and incidental to the operation of our business. We believe that the outcome of the proceedings will not have a material adverse effect upon our consolidated financial position or results of operations.At June 30, 2022, we had commitments of $49.0 million for re-leasing costs, recurring capital expenditures, and non-recurring building improvements. In addition, as of June 30, 2022, we had committed $678.6 million under construction contracts related to development projects, which is expected to be paid in the next twelve months. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events A. Dividends In July 2022, we declared a dividend of $0.2475 per share to our common stockholders, which will be paid in August 2022. B. Commercial Paper Program During July 2022, our U.S. Dollar-denominated unsecured commercial paper program was amended to increase the maximum aggregate amount of outstanding notes from $1.0 billion to $1.5 billion. We also established a new Euro-denominated unsecured commercial paper program, which permits us to issue additional unsecured commercial notes up to a maximum aggregate amount of $1.5 billion (or foreign currency equivalent), which may be issued in U.S. Dollars or various other foreign currencies, including but not limited to, Euros, Sterling, Swiss Francs, Yen, Canadian Dollars, and Australian Dollars, in each case, pursuant to customary terms in the European commercial paper note market. The notes offered under our European commercial paper program will rank pari passu with all of our other unsecured senior indebtedness, including borrowings under our revolving credit facility and our term loan, and our outstanding senior notes, including under our U.S. Dollar-denominated commercial paper program. C. Sale of Unconsolidated Joint Ventures |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies and Procedures and New Accounting Standards (Policies) | 6 Months Ended |
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation. These consolidated financial statements include the accounts of Realty Income and all other entities in which we have a controlling financial interest. We evaluate whether we have a controlling financial interest in an entity in accordance with Accounting Standards Codification (“ASC”) 810, Consolidation. Voting interest entities are entities considered to have sufficient equity at risk and which the equity holders have the obligation to absorb losses, the right to receive residual returns and the right to make decisions about the entity’s activities. We consolidate voting interest entities in which we have a controlling financial interest, which we typically have through holding of a majority of the entity’s voting equity interests. |
Principles of Consolidation, Variable Interest Entities | Variable interest entities (“VIEs”) are entities that lack sufficient equity at risk or where the equity holders either do not have the obligation to absorb losses, do not have the right to receive residual returns, do not have the right to make decisions about the entity’s activities, or some combination of the above. A controlling financial interest in a VIE is present when an entity has a variable interest, or a combination of variable interests, that provides the entity with (i) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. An entity that meets both conditions above is deemed the primary beneficiary and consolidates the VIE. We reassess our initial evaluation of whether an entity is a VIE when certain reconsideration events occur. We reassess our determination of whether we are the primary beneficiary of a VIE on an ongoing basis based on current facts and circumstances. |
Income Taxes | Income Taxes. We have elected to be taxed as a real estate investment trust, or REIT, under the Internal Revenue Code of 1986, as amended. We believe we have qualified and continue to qualify as a REIT. Under the REIT |
Lease Revenue Recognition and Accounts Receivable | Lease Revenue Recognition and Accounts Receivable. The COVID-19 pandemic and the measures taken to limit its spread have negatively impacted the economy across many industries, including the industries in which some of our clients operate. These impacts may continue as the duration and severity of the pandemic increases. As a result, we have closely monitored the collectability of our accounts receivable and continue to evaluate the potential impacts of the COVID-19 pandemic and the measures taken to limit its spread on our business and industry segments as the situation continues to evolve and more information becomes available. We continue to assess the probability of collecting substantially all of the lease payments to which we are entitled under the original lease contract as required under Topic 842, Leases . We assess the collectability of our future lease payments based on an analysis of creditworthiness, economic trends (including trends arising from the COVID-19 pandemic) and other facts and circumstances related to the applicable clients. If we conclude the collection of substantially all lease payments under a lease is less than probable, rental revenue recognized for that lease is limited to cash received going forward, existing operating lease receivables, including those related to straight-line rental revenue, must be written off as an adjustment to rental revenue, and no further operating lease receivables are recorded for that lease until such future determination is made that substantially all lease payments under that lease are now considered probable. If we subsequently conclude that the collection of substantially all lease payments under a lease is probable, a reversal of lease receivables previously written off is recognized. The majority of concessions granted to our clients as a result of the COVID-19 pandemic have been rent deferrals with the original lease term unchanged. In accordance with the guidance provided by the Financial Accounting Standards Board (FASB) staff, we have elected to account for these leases as if the right of deferral existed in the lease contract and therefore continue to recognize lease revenue in accordance with the lease contract in effect. In limited circumstances, the undiscounted cash flows resulting from deferrals granted increased significantly from original lease terms, which required us to account for these as lease modifications and resulted in an insignificant impact to consolidated rental revenue. Similarly, rent abatements granted, which are also accounted for as lease modifications, have impacted our rental revenue by an insignificant amount. As of June 30, 2022, other than the information related to the reserves recorded to date, we do not have any further client specific information that would change our assessment that collection of substantially all of the future lease payments under our existing leases is probable. However, since the conversations regarding rent collections for our clients affected by the COVID-19 pandemic are ongoing and we do not currently know the types of future concessions, if any, that will ultimately be granted, there may be impacts in future periods that could change this assessment as the situation continues to evolve and as more information becomes available. |
Investment in Unconsolidated Entities | Investment in Unconsolidated Entities. We account for our investment in unconsolidated entity arrangements using the equity method of accounting as we have the ability to exercise significant influence, but not control, over operating and financing policies of these investments. We have determined that none of the unconsolidated entities would be considered VIEs under the applicable accounting guidance. Our equity method investments were acquired in our merger with VEREIT. As a result, the investments were recorded at fair value and subsequently will be adjusted for our share of equity in the entities' earnings and distributions received. The step-up in fair value was allocated to the individual investment assets and liabilities and is being amortized over the estimated useful life of the respective underlying tangible real estate assets, the lease term of the intangible real estate assets, and the remaining term of the assumed debt. The carrying value of our investment is included in 'Investment in unconsolidated entities' in the accompanying consolidated balance sheets. We record our proportionate share of net income from the unconsolidated entities in 'Equity in income and impairment of investment in unconsolidated entities' in the consolidated statements of income and comprehensive income. |
Segment Reporting | Segment Reporting. During the second quarter of 2022, a re-evaluation of our business and management structure led to a change in identification of operating and reportable segments. As we have grown in size and scale over recent years, including through the acquisition of VEREIT in November 2021, management has shifted its focus from managing primarily through identification of concentrations of risk from exposure to client industries or geographies, to now focused on seeking investments with attractive yields and risk adjusted returns regardless of client industry or geography. As a result, we have reorganized our business activities into one operating and reportable segment. ASC Topic 280, Segment Reporting |
Newly Issued Accounting Standards | Newly Issued Accounting Standards. In March 2020, the FASB issued ASU 2020-04 establishing Topic 848, Reference Rate Reform . ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance is optional and is effective between March 12, 2020, and December 31, 2022. The guidance may be elected over time as reference rate reform activities occur. As, of June 30, 2022, all of our debt and derivative instruments have been converted from LIBOR to SOFR. The interest rate swap on our term loan, which was converted to a SOFR benchmark from LIBOR during June 2022, continues to be accounted for as a cash flow hedge. The adoption of this guidance had no impact on our consolidated financial statements. |
Merger with VEREIT, Inc. (Table
Merger with VEREIT, Inc. (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of fair value of the consideration transferred on the date of the acquisition | The fair value of the consideration transferred on the date of the acquisition is as follows (in thousands, except share and per share data): Shares of VEREIT common stock and VEREIT Operating Partnership, L.P. ("OP") common units exchanged (1) 229,304,035 Exchange Ratio 0.705 161,659,345 Less: Fractional shares settled in cash (1,545) Shares of Realty Income common stock and Realty Income L.P. units issued 161,657,800 Adjusted opening price of Realty common stock on November 1, 2021 (2) $ 71.236 Fair value of Realty common stock issued to former holders of VEREIT common stock and VEREIT OP common units $ 11,515,855 Fair value of VEREIT's equity-based compensation awards attributable to pre-combination services (3) 44,020 Total non-cash consideration 11,559,875 Cash paid for fractional shares 110 VEREIT indebtedness paid off in connection with the merger (4) 500,414 Consideration transferred $ 12,060,399 (1) Includes 229,152,001 shares of VEREIT common stock and 152,034 VEREIT OP common units outstanding as of November 1, 2021. Under the Merger Agreement, these shares and units were converted to Realty Income common stock, or in certain instances, Realty Income L.P. units, at an Exchange Ratio of 0.705 per share of VEREIT common stock or VEREIT OP common unit, as applicable. (2) The fair value of Realty Income common stock issued to former holders of VEREIT common stock and VEREIT OP common units is based on the per share opening price of Realty Income common stock of $71.00 on November 1, 2021, adjusted for the monthly dividend of $0.236 per share that former holders of VEREIT common stock and VEREIT OP common units were eligible to receive when such dividend was paid on November 15, 2021. (3) Represents the fair value of fully vested deferred stock unit awards of VEREIT common stock (“VEREIT DSU Awards”) which were converted into Realty Income common stock upon our merger with VEREIT, as well as the estimated fair value of the Realty Income replacement employee and executive stock options and restricted stock units that were granted at the closing date of our merger with VEREIT and which were attributable to pre-combination services. (4) Represents the outstanding balance of the VEREIT revolving credit facility repaid by Realty Income in connection with the closing of the merger. The amount shown in the table above was based upon the balance outstanding immediately prior to November 1, 2021. |
Schedule of preliminary estimated fair values of the assets acquired and liabilities assumed at the date of acquisition | The following table summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed at the date of acquisition (in thousands): ASSETS Land $ 3,021,906 Buildings 8,677,467 Total real estate held for investment 11,699,373 Cash and cash equivalents 128,411 Accounts receivable 53,355 Lease intangible assets (1) 3,204,773 Goodwill 3,717,620 Investment in unconsolidated entities 175,379 Other assets 308,910 Total assets acquired $ 19,287,821 LIABILITIES Accounts payable and accrued expenses $ 139,836 Lease intangible liabilities (2) 949,349 Other liabilities 320,893 Mortgages payable 869,027 Notes payable 4,946,965 Total liabilities assumed $ 7,226,070 Net assets acquired, at fair value $ 12,061,751 Noncontrolling interests $ 1,352 Total purchase price $ 12,060,399 (1) The weighted average amortization period for acquired lease intangible assets is 9.3 years. |
Schedule of pro forma information | The following unaudited pro forma information presents a summary of our combined results of operations for the three and six months ended June 30, 2021, as if our merger with VEREIT had occurred on January 1, 2020 (in millions, except per share data). There are no pro forma adjustments for the three and six months ended June 30, 2022, as the merger was completed November 1, 2021. Amounts for the three and six months ended June 30, 2022 are presented for comparative purposes. The following pro forma financial information is not necessarily indicative of the results of operations had the acquisition been effected on the assumed date, nor is it necessarily an indication of trends in future results for a number of reasons, including, but not limited to, differences between the assumptions used to prepare the pro forma information, basic shares outstanding and dilutive equivalents, cost savings from operating efficiencies, potential synergies, and the impact of incremental costs incurred in integrating the businesses. In accordance with ASC 805, Business Combinations , the following information excludes the impact of the spin-off of office assets to Orion Office REIT Inc. Three months ended June 30, Six months ended June 30, 2022 2021 2022 2021 Total revenues $ 810.4 $ 765.3 $ 1,617.8 $ 1,507.8 Net income $ 223.8 $ 186.7 $ 423.8 $ 376.0 Basic and diluted earnings per share $ 0.37 $ 0.35 $ 0.71 $ 0.70 |
Supplemental Detail for Certa_2
Supplemental Detail for Certain Components of Consolidated Balance Sheets (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Disclosure Text Block Supplement [Abstract] | |
Schedule of accounts receivable, net | A. Accounts Receivable, net, consist of the following at: June 30, 2022 December 31, 2021 Straight-line rent receivables, net $ 287,891 $ 231,943 Client receivables, net 212,493 194,825 $ 500,384 $ 426,768 |
Schedule of lease intangible assets, net | B. Lease intangible assets, net, consist of the following at: June 30, 2022 December 31, 2021 In-place leases $ 4,962,053 $ 4,791,846 Accumulated amortization of in-place leases (1,102,772) (804,050) Above-market leases 1,665,374 1,591,382 Accumulated amortization of above-market leases (369,661) (303,874) $ 5,154,994 $ 5,275,304 |
Schedule of other assets, net | C. Other assets, net, consist of the following at: June 30, 2022 December 31, 2021 Right of use asset - operating leases, net $ 598,385 $ 631,515 Financing receivables 521,729 323,921 Right of use asset - financing leases 442,092 218,332 Derivative assets and receivables – at fair value 124,011 29,593 Restricted escrow deposits 100,098 68,541 Prepaid expenses 28,347 18,062 Credit facility origination costs, net 19,663 4,352 Non-refundable escrow deposits 13,815 28,560 Corporate assets, net 12,209 10,915 Investment in sales type lease 5,902 7,492 Note receivable 5,867 4,455 Impounds related to mortgages payable 718 5,249 Other items 20,239 18,592 $ 1,893,075 $ 1,369,579 |
Schedule of accounts payable and accrued expenses | D. Accounts payable and accrued expenses consist of the following at: June 30, 2022 December 31, 2021 Notes payable - interest payable $ 123,853 $ 108,227 Property taxes payable 40,543 36,173 Value-added tax payable 34,730 11,297 Accrued property expenses 25,877 27,344 Accrued costs on properties under development 22,893 19,665 Derivative liabilities and payables – at fair value 18,899 70,617 Accrued income taxes 16,653 19,152 Mortgages, term loans, and credit line - interest payable 3,347 3,874 Merger and integration-related costs 1,165 10,699 Other items 65,613 44,080 $ 353,573 $ 351,128 |
Schedule of lease intangible liabilities, net | E. Lease intangible liabilities, net, consist of the following at: June 30, 2022 December 31, 2021 Below-market leases $ 1,540,274 $ 1,460,701 Accumulated amortization of below-market leases (193,626) (152,480) $ 1,346,648 $ 1,308,221 |
Schedule of other liabilities | F. Other liabilities consist of the following at: June 30, 2022 December 31, 2021 Lease liability - operating leases, net $ 436,120 $ 461,748 Rent received in advance and other deferred revenue 243,102 242,122 Lease liability - financing leases 49,738 43,987 Security deposits 11,397 11,340 $ 740,357 $ 759,197 |
Investments in Real Estate (Tab
Investments in Real Estate (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Real Estate [Abstract] | |
Schedule of acquisitions | Below is a summary of our acquisitions for the six months ended June 30, 2022: Number of Leasable Investment Weighted Initial Weighted Average Cash Lease Yield (1) Six months ended June 30, 2022 (2) Acquisitions - U.S. 289 5,551 $ 1,492.0 13.9 5.7 % Acquisitions - Europe 51 5,391 1,471.2 9.0 5.6 % Total acquisitions 340 10,942 $ 2,963.2 11.5 5.7 % Properties under development (3) 83 2,721 267.9 15.9 5.7 % Total (4) 423 13,663 $ 3,231.1 11.9 5.7 % (1) The initial average cash lease yield for a property is generally computed as estimated contractual first year cash net operating income, which, in the case of a net leased property, is equal to the aggregate cash base rent for the first full year of each lease, divided by the total cost of the property. Since it is possible that a client could default on the payment of contractual rent, we cannot provide assurance that the actual return on the funds invested will remain at the percentages listed above. Contractual net operating income used in the calculation of initial average cash yield includes approximately $6.8 million received as settlement credits as reimbursement of free rent periods for the six months ended June 30, 2022. In the case of a property under development or expansion, the contractual lease rate is generally fixed such that rent varies based on the actual total investment in order to provide a fixed rate of return. When the lease does not provide for a fixed rate of return on a property under development or expansion, the initial weighted average cash lease yield is computed as follows: estimated cash net operating income (determined by the lease) for the first full year of each lease, divided by our projected total investment in the property, including land, construction and capitalized interest costs. (2) None of our investments during the six months ended June 30, 2022, caused any one client to be 10% or more of our total assets at June 30, 2022. (3) Includes two U.K. development properties that represent an investment of £14.9 million Sterling during the six months ended June 30, 2022, converted at the applicable exchange rate on the funding date. (4) Our clients occupying the new properties are 87.4% retail and 12.6% industrial, based on rental revenue. Approximately 33% of the rental revenue generated from acquisitions during the six months ended June 30, 2022, is from investment grade rated clients, their subsidiaries or affiliated companies. Below is a summary of our acquisitions for the six months ended June 30, 2021: Number of Leasable Investment Weighted Initial Weighted Average Cash Lease Yield (1) Six months ended June 30, 2021 (2) Acquisitions - U.S. 173 4,485 $ 1,052.3 13.7 5.5 % Acquisitions - Europe 41 3,133 994.8 9.8 5.6 % Total acquisitions 214 7,618 $ 2,047.1 11.8 5.5 % Properties under development - U.S. 40 2,016 114.8 15.6 5.7 % Total (3) 254 9,634 $ 2,161.9 12.0 5.5 % (1) Contractual net operating income used in the calculation of initial average cash yield includes approximately $850,000 received as settlement credits as reimbursement of free rent periods for the six months ended June 30, 2021. (2) None of our investments during the six months ended June 30, 2021, caused any one client to be 10% or more of our total assets at June 30, 2021. (3) Our clients occupying the new properties are 75.8% retail and 24.2% industrial, based on rental revenue. Approximately 47% of the rental revenue generated from acquisitions during the six months ended June 30, 2021, was from investment grade rated clients, their subsidiaries or affiliated companies. |
Schedule allocation of acquisitions | The acquisitions during the six months ended June 30, 2022, which had no associated contingent consideration, were allocated as follows (in millions): Acquisitions - U.S. Acquisitions - U.K. Six months ended June 30, 2022 (USD) (£ Sterling) Land (1) $ 480.3 £ 476.7 Buildings and improvements 843.9 368.2 Lease intangible assets (2) 185.0 179.4 Other assets (3) 214.7 166.2 Lease intangible liabilities (4) (27.3) (50.2) Other liabilities (5) (21.1) — $ 1,675.5 £ 1,140.3 (1) U.K. land includes £33.2 million of right of use assets under long-term ground leases. (2) The weighted average amortization period for acquired lease intangible assets is 10.3 years. (3) U.S. other assets consists of $182.6 million of financing receivables with above-market terms and $32.1 million of right-of-use assets accounted for as finance leases. U.K. other assets consists of £3.8 million of financing receivables with above-market terms and £162.4 million of right-of-use assets accounted for as finance leases. (4) The weighted average amortization period for acquired lease intangible liabilities is 11.4 years. (5) U.S. other liabilities consists of $14.6 million of deferred rent on certain below-market leases and $8.6 million of lease liabilities under financing leases, offset by $2.1 million of mortgage discounts. The acquisitions during the six months ended June 30, 2021, which had no associated contingent consideration, were allocated as follows (in millions): Acquisitions - U.S. Acquisitions - U.K. Six months ended June 30, 2021 (USD) (£ Sterling) Land (1) $ 384.5 £ 219.7 Buildings and improvements 539.5 375.4 Lease intangible assets (2) 171.8 125.6 Other assets (3) 38.5 — Lease intangible liabilities (4) (14.4) (5.3) Other liabilities (5) (21.6) (0.3) $ 1,098.3 £ 715.1 (1) U.K land includes £1.3 million of right of use assets under long-term ground leases. (2) The weighted average amortization period for acquired lease intangible assets is 12.7 years. (3) U.S. other assets consists entirely of financing receivables with above-market terms and a right-of-use asset accounted for as a finance lease. (4) The weighted average amortization period for acquired lease intangible liabilities is 14.0 years. |
Schedule of future impact related to amortization of above-market, below-market and in-place lease intangibles | The following table presents the estimated impact during the next five years and thereafter related to the amortization of the above-market and below-market lease intangibles and the amortization of the in-place lease intangibles at June 30, 2022 (dollars in thousands): Net increase (decrease) to rental revenue Increase to amortization expense 2022 $ (29,835) $ 306,632 2023 (58,837) 545,532 2024 (52,621) 484,561 2025 (46,411) 415,549 2026 (38,118) 370,236 Thereafter 276,757 1,736,771 Totals $ 50,935 $ 3,859,281 |
Schedule of properties sold | The following table summarizes our properties sold during the periods indicated below (dollars in millions): Three months ended June 30, Six months ended June 30, 2022 2021 2022 2021 Number of properties 70 42 104 69 Net sales proceeds $ 150.0 $ 56.9 $ 272.2 $ 91.6 Gain on sales of real estate $ 40.6 $ 14.9 $ 50.7 $ 23.3 |
Schedule of investment in unconsolidated entities | The following is a summary of our investments in unconsolidated entities as of June 30, 2022 (in thousands): Ownership % (1) Number of Properties Carrying Amount of Investment as of (2) Equity in income and impairment of investment in unconsolidated entities for the six months ended (2)(3) Investment June 30, 2022 June 30, 2022 December 31, 2021 June 30, 2022 June 30, 2021 Industrial Partnerships 20 % 7 $ 113,562 $ 140,967 $ (5,673) $ — (1) Our ownership interest reflects legal ownership interest. Legal ownership may, at times, not equal our economic interest in the listed properties because of various provisions in certain entity agreements regarding capital contributions, distributions of cash flow based on capital account balances, allocations of profits and losses and payments of preferred returns. As a result, our actual economic interest (as distinct from its legal ownership interest) in certain of the properties could fluctuate from time to time and may not wholly align with legal ownership interests. (2) The total carrying amount of the investments was greater than the underlying equity in net assets by $74.1 million as of June 30, 2022. The difference relates to a step-up in fair value of the investment net assets acquired in connection with the merger with VEREIT on November 1, 2021. The step up in fair value was allocated to the individual investment assets and liabilities and is being amortized over the estimated useful life of the respective underlying tangible real estate assets, the lease term of the intangible real estate assets, and the remaining term of the mortgages payable. Prior to November 1, 2021, we did not own any unconsolidated entities. (3) As of June 30, 2022, the seven assets held by our Industrial Partnerships were under agreement of sale. As the portion of the net proceeds applied to our investment basis that we expect to receive at closing was less than our $121.4 million carrying amount of investment in unconsolidated entities, we recognized an other than temporary impairment of $7.8 million , which is included in 'Equity in income and impairment of investment in unconsolidated entities' in the consolidated statements of income and comprehensive income for the three and six months ended June 30, 2022. |
Mortgages Payable (Tables)
Mortgages Payable (Tables) - Mortgages payable | 6 Months Ended |
Jun. 30, 2022 | |
Debt | |
Summary of mortgages payable | The following table summarizes our mortgages payable as of June 30, 2022, and December 31, 2021, respectively (dollars in thousands): As Of Number of Properties (1) Weighted Average Stated Interest Rate (2) Weighted Average Effective Interest Rate (3) Weighted Remaining Unamortized Premium and Deferred Financing Costs Balance, net Mortgage 6/30/2022 158 4.8 % 3.3 % 1.8 $ 928,943 $ 18,169 $ 947,112 12/31/2021 267 4.8 % 3.5 % 1.8 $ 1,114,129 $ 27,866 $ 1,141,995 (1) At June 30, 2022, there were 23 mortgages on 158 properties. At December 31, 2021, there were 22 mortgages on 267 properties. With the exception of one Sterling-denominated mortgage which is paid quarterly, the mortgages require monthly payments with principal payments due at maturity. At June 30, 2022, and December 31, 2021, all mortgages were at fixed interest rates. (2) Stated interest rates ranged from 3.0% to 6.9% at each of June 30, 2022, and December 31, 2021. (3) Effective interest rates ranged from 2.6% to 6.6% and 2.6% to 6.0% at each of June 30, 2022, and December 31, 2021, respectively. |
Schedule of maturity of debt, net | The following table summarizes the maturity of mortgages payable, excluding net premiums of $19.2 million and deferred financing costs of $1.0 million, as of June 30, 2022 (dollars in millions): Year of Maturity Principal 2022 $ 45.5 2023 62.8 2024 740.5 2025 42.3 2026 11.9 Thereafter 26.0 Totals $ 929.0 |
Notes Payable (Tables)
Notes Payable (Tables) - Notes and bonds payable | 6 Months Ended |
Jun. 30, 2022 | |
Debt | |
Schedule of unsecured notes and bonds | Our senior unsecured notes and bonds are U.S. dollar denominated and Sterling denominated. Foreign denominated notes are converted at the applicable exchange rate on the balance sheet date. The following are sorted by maturity date (in millions): Principal Amount (Currency Denomination) Carrying Value (USD) as of June 30, 2022 December 31, 2021 4.600% notes, $500 issued February 2014, of which $485 was exchanged in November 2021, both due in February 2024 (1) $ 500 $ 500 $ 500 3.875% notes, issued in June 2014 and due in July 2024 $ 350 350 350 3.875% notes, issued in April 2018 and due in April 2025 $ 500 500 500 4.625% notes, $550 issued October 2018, of which $544 was exchanged in November 2021, both due in November 2025 (1) $ 550 550 550 0.750% notes, issued December 2020 and due in March 2026 $ 325 325 325 4.875% notes, $600 issued June 2016, of which $596 was exchanged in November 2021, both due in June 2026 (1) $ 600 600 600 4.125% notes, $250 issued in September 2014 and $400 issued in March 2017, both due in October 2026 $ 650 650 650 1.875% notes, issued in January 2022 and due in January 2027 £ 250 304 — 3.000% notes, issued in October 2016 and due in January 2027 $ 600 600 600 1.125% notes, issued in July 2021 and due in July 2027 £ 400 486 541 3.950% notes, $600 issued August 2017, of which $594 was exchanged in November 2021, both due in August 2027 (1) $ 600 600 600 3.650% notes, issued in December 2017 and due in January 2028 $ 550 550 550 3.400% notes, $600 issued June 2020, of which $598 was exchanged in November 2021, both due in January 2028 (1) $ 600 600 600 2.200% notes, $500 issued November 2020, of which $497 was exchanged in November 2021, both due in June 2028 (1) $ 500 500 500 3.250% notes, issued in June 2019 and due in June 2029 $ 500 500 500 3.100% notes, $600 issued December 2019, of which $596 was exchanged in November 2021, both due in December 2029 (1)(2) $ 599 599 599 3.160% notes, issued in June 2022 and due in June 2030 £ 140 170 — 1.625% notes, issued in October 2020 and due December 2030 £ 400 486 541 3.250% notes, $600 issued in May 2020 and $350 issued in July 2020, both due in January 2031 $ 950 950 950 3.180% notes, issued in June 2022 and due in June 2032 £ 345 419 — 2.850% notes, $700 issued November 2020, of which $699 was exchanged in November 2021, both due in December 2032 (1) $ 700 700 700 1.800% notes, issued in December 2020 and due in March 2033 $ 400 400 400 1.750% notes, issued in July 2021 and due in July 2033 £ 350 425 474 2.730% notes, issued in May 2019 and due in May 2034 £ 315 382 427 5.875% bonds, $100 issued in March 2005 and $150 issued in June 2011, both due in March 2035 $ 250 250 250 3.390% notes, issued in June 2022 and due in June 2037 £ 115 140 — 2.500% notes, issued in January 2022 and due in January 2042 £ 250 304 — 4.650% notes, $300 issued in March 2017 and $250 issued in December 2017, both due in March 2047 $ 550 550 550 Total principal amount $ 13,390 $ 12,257 Unamortized net premiums and deferred financing costs 198 243 $ 13,588 $ 12,500 (1) Carrying Value (USD) includes the portion of the VEREIT OP notes that remained outstanding, totaling $39.1 million in the aggregate at each of June 30, 2022, and December 31, 2021, that were not exchanged in the exchange offers commenced by us with respect to the outstanding bonds of VEREIT OP in connection with the consummation of the merger with VEREIT (the "Exchange Offers"). |
Schedule of maturity of debt, net | The following table summarizes the maturity of our notes and bonds payable as of June 30, 2022, excluding net unamortized premiums of $257.0 million and deferred financing costs of $58.7 million (dollars in millions): Year of Maturity Principal 2024 $ 850 2025 1,050 2026 1,575 Thereafter 9,915 Totals $ 13,390 |
Schedule of note issuances | During the six months ended June 30, 2022, we issued the following notes and bonds (in millions): 2022 Issuances Date of Issuance Maturity Date Principal amount used Price of par value Effective yield to maturity 1.875% Notes January 2022 January 2027 £ 250 99.487 % 1.974 % 2.500% Notes January 2022 January 2042 £ 250 98.445 % 2.584 % 3.160% Notes June 2022 June 2030 £ 140 100.000 % 3.160 % 3.180% Notes June 2022 June 2032 £ 345 100.000 % 3.180 % 3.390% Notes June 2022 June 2037 £ 115 100.000 % 3.390 % |
Issuances of Common Stock (Tabl
Issuances of Common Stock (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
ATM Program | |
Class of Stock [Line Items] | |
Schedule of common stock issuances | The following table outlines common stock issuances pursuant to our prior ATM program (dollars in millions): Three months ended June 30, Six months ended June 30, 2022 2021 2022 2021 Shares of common stock issued under the ATM program (1) 15,899,972 6,589,598 25,973,181 6,589,598 Gross proceeds $ 1,067.3 $ 454.8 $ 1,727.5 $ 454.8 Sales Agents' Commissions (7.0) (4.6) (10.9) (4.6) Other Offering Expenses (3.7) (0.2) (3.9) (0.3) Net proceeds $ 1,056.6 $ 450.0 $ 1,712.7 $ 449.9 |
DRSPP | |
Class of Stock [Line Items] | |
Schedule of common stock issuances | The following table outlines common stock issuances pursuant to our DRSPP program (dollars in millions): Three months ended June 30, Six months ended June 30, 2022 2021 2022 2021 Shares of common stock issued under the DRSPP program 43,260 39,423 84,631 82,817 Gross proceeds $ 2.9 $ 2.7 $ 5.7 $ 5.3 |
Noncontrolling Interests (Table
Noncontrolling Interests (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Noncontrolling Interest [Abstract] | |
Schedule of the change in the carrying value of all noncontrolling interests | The following table represents the change in the carrying value of all noncontrolling interests through June 30, 2022 (dollars in thousands): Realty Income, L.P. units (1) Other Noncontrolling Interests Total Carrying value at December 31, 2021 $ 62,416 $ 14,410 $ 76,826 Distributions (1,624) (152) (1,776) Allocation of net income 1,095 122 1,217 Carrying value at June 30, 2022 $ 61,887 $ 14,380 $ 76,267 |
Summary selected financial data of consolidated VIEs | Below is a summary of selected financial data of consolidated VIEs included on our consolidated balance sheets at June 30, 2022, and December 31, 2021 (in thousands): June 30, 2022 December 31, 2021 Net real estate $ 705,322 $ 688,229 Total assets $ 804,027 $ 795,670 Total liabilities $ 59,033 $ 57,057 |
Financial Instruments and Fai_2
Financial Instruments and Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value by balance sheet groupings | The fair value of our financial instruments not carried at fair value are disclosed as follows (in millions): June 30, 2022 Carrying value Estimated fair value Mortgages payable assumed in connection with acquisitions (1) $ 928.9 $ 906.6 Notes and bonds payable (2) $ 13,390.3 $ 12,377.8 December 31, 2021 Carrying value Estimated fair value Mortgages payable assumed in connection with acquisitions (1) $ 1,114.1 $ 1,154.7 Notes and bonds payable (2) $ 12,257.3 $ 13,114.5 (1) Excludes non-cash net premiums recorded on the mortgages payable. The unamortized balance of these net premiums was $19.2 million at June 30, 2022, and $28.7 million at December 31, 2021. Also excludes deferred financing costs of $1.0 million at June 30, 2022, and $790,000 at December 31, 2021. (2) Excludes non-cash premiums and discounts recorded on notes payable. The unamortized balance of the net premiums was $257.0 million at June 30, 2022, and $295.5 million at December 31, 2021. Also excludes deferred financing costs of $58.7 million at June 30, 2022, and $53.1 million at December 31, 2021. |
Schedule of provisions for impairment | The following table summarizes our provisions for impairment on real estate investments during the periods indicated below (dollars in millions): Three months ended June 30, Six months ended June 30, 2022 2021 2022 2021 Carrying value prior to impairment $ 64.5 $ 45.6 $ 98.2 $ 59.2 Less: total provisions for impairment (7.7) (17.2) (14.7) (20.0) Carrying value after impairment $ 56.8 $ 28.4 $ 83.5 $ 39.2 Number of properties: Classified as held for sale 9 1 23 1 Classified as held for investment 3 5 3 6 Sold 32 31 49 44 |
Schedule of gain (loss) recognized on derivatives in other comprehensive income | The following table summarizes the amount of unrealized gain (loss) on derivatives in other comprehensive income during the periods indicated below (in thousands): Three months ended June 30, Six months ended June 30, Derivatives in Cash Flow Hedging Relationships 2022 2021 2022 2021 Currency swaps $ (6,986) $ 5,598 $ (5,091) $ 3,978 Interest rate swaps 30,386 (20,353) 69,391 27,676 Foreign currency forwards 10,054 3,922 12,844 3,922 Total unrealized gain on derivatives $ 33,454 $ (10,833) $ 77,144 $ 35,576 |
Summary of gain (loss) on derivatives reclassified from accumulated other comprehensive income (loss) | The following table summarizes the amount of gain (loss) on derivatives reclassified from accumulated other comprehensive income (loss) during the periods indicated below (in thousands): Three months ended June 30, Six months ended June 30, Derivatives in Cash Flow Hedging Relationships Location of Gain (Loss) Recognized in Income 2022 2021 2022 2021 Currency swaps Foreign currency and derivative gain, net $ 21,527 $ (235) $ 27,641 $ (1,386) Interest rate swaps Interest expense (2,153) (2,578) (4,683) (5,119) Net increase (decrease) to net income $ 19,374 $ (2,813) $ 22,958 $ (6,505) |
Schedule of foreign currency and derivative gains (losses) | The following table details our foreign currency and derivative gain, net included in income (in thousands): Three months ended June 30, Six months ended June 30, 2022 2021 2022 2021 Realized foreign currency and derivative gain (loss), net: Gain on the settlement of undesignated derivatives $ 79,308 $ — $ 76,628 $ — Gain (loss) on the settlement of designated derivatives reclassified from AOCI 21,527 (235) 27,641 (1,386) Gain (loss) on the settlement of transactions with third parties 1,004 (104) 952 (104) Total realized foreign currency and derivative gain (loss), net $ 101,839 $ (339) $ 105,221 $ (1,490) Unrealized foreign currency and derivative gain (loss), net: Gain on the change in fair value of undesignated derivatives $ 37,274 $ — $ 59,995 $ 3,724 Gain (loss) on remeasurement of certain assets and liabilities (131,633) 739 (158,326) (1,030) Total unrealized foreign currency and derivative gain (loss), net $ (94,359) $ 739 $ (98,331) $ 2,694 Total foreign currency and derivative gain, net $ 7,480 $ 400 $ 6,890 $ 1,204 |
Schedule of derivative financial instruments | The following table summarizes the terms and fair values of our derivative financial instruments at June 30, 2022, and December 31, 2021 (dollars in millions): Derivative Type Number of Instruments (1) Accounting Classification Notional Amount as of Weighted Average Strike Rate (2) Maturity Date (3) Fair Value - asset (liability) as of Derivatives Designated as Hedging Instruments June 30, 2022 December 31, 2021 June 30, 2022 December 31, 2021 Interest rate swap 1 Derivative $ 250.0 $ 250.0 2.88% March 2024 $ 0.4 $ (11.9) Cross-currency swaps (4) — Derivative — 166.3 — — — (13.8) Foreign currency forwards 36 Derivative 177.5 176.1 (5) Jul 2022 - Aug 2024 20.4 7.6 Forward-starting swaps (6) 4 Derivative 300.0 300.0 1.86% Nov 2032 - Jun 2033 31.2 (3.2) Forward-starting swaps (6) 2 Hybrid Debt 200.0 200.0 1.93% Nov 2032 - Jun 2033 16.2 (5.1) $ 927.5 $ 1,092.4 $ 68.2 $ (26.4) Derivatives not Designated as Hedging Instruments Currency exchange swaps (7) 5 Derivative 833.2 1,639.5 (8) Jul 2022 - Nov 2022 36.9 (14.7) Total of all Derivatives $ 1,760.7 $ 2,731.9 $ 105.1 $ (41.1) (1) This column represents the number of instruments outstanding as of June 30, 2022. (2) Weighted average strike rate is calculated using the current notional value as of June 30, 2022. (3) This column represents maturity dates for instruments outstanding as of June 30, 2022. (4) In June 2022, we terminated the four British Pound Sterling, or GBP, cross-currency swaps with notional amount of $166.3 million. (5) Weighted average forward GBP-USD exchange rate of 1.40. (6) There were five treasury rate locks entered into during February 2020 that were terminated in June 2020 and converted into six forward starting interest rate swaps through a cashless settlement. (7) Represents three GBP currency exchange swaps with notional amount of $564.9 million and two Euro, or EUR, currency exchange swaps with notional amount of $268.3 million. (8) Weighted average Forward GBP-USD exchange rate of 1.26 and Weighted Average Forward EUR-USD exchange rate of 1.11. |
Distributions Paid and Payable
Distributions Paid and Payable (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Dividends [Abstract] | |
Summary of monthly distributions paid per common share | The following is a summary of monthly distributions paid per common share for the six months ended June 30, 2022, and 2021: Month 2022 2021 January $ 0.2465 $ 0.2345 February 0.2465 0.2345 March 0.2465 0.2345 April 0.2470 0.2350 May 0.2470 0.2350 June 0.2470 0.2350 Total $ 1.4805 $ 1.4085 |
Net Income per Common Share (Ta
Net Income per Common Share (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of reconciliation of the denominator of the diluted net income per common share computation | The following is a reconciliation of the denominator of the basic net income per common share computation to the denominator of the diluted net income per common share computation: Three months ended June 30, Six months ended June 30, 2022 2021 2022 2021 Weighted average shares used for the basic net income per share computation 601,672,201 374,236,424 597,778,173 372,879,165 Incremental shares from share-based compensation 358,465 104,599 362,529 92,579 Weighted average shares used for diluted net income per share computation 602,030,666 374,341,023 598,140,702 372,971,744 Unvested shares from share based compensation that were anti-dilutive 16,039 161,359 16,437 148,342 Weighted average partnership common units convertible to common shares that were anti-dilutive 1,060,709 463,119 1,060,709 463,119 |
Supplemental Disclosures of C_2
Supplemental Disclosures of Cash Flow Information (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Supplemental Cash Flow Information [Abstract] | |
Schedule of supplemental cash flow information | The following table summarizes our supplemental cash flow information during the periods indicated below (dollars in thousands): Six months ended June 30, 2022 2021 Supplemental disclosures: Cash paid for interest $ 229,929 $ 139,389 Cash paid for income taxes $ 30,091 $ 9,726 Non-cash activities: Net increase in fair value of derivatives $ 146,181 $ 60,414 Mortgages assumed at fair value $ 45,079 $ 43,779 |
Schedule of reconciliation of cash, cash equivalents and restricted cash | The following table provides a reconciliation of cash and cash equivalents reported within the consolidated balance sheets to the total of the cash, cash equivalents and restricted cash reported within the consolidated statements of cash flows (dollars in thousands): June 30, 2022 June 30, 2021 Cash and cash equivalents shown in the consolidated balance sheets $ 172,849 $ 231,164 Restricted escrow deposits (1) 100,098 34,636 Impounds related to mortgages payable (1) 718 1,185 Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows $ 273,665 $ 266,985 (1) Included within other assets, net on the consolidated balance sheets (see note 4). These amounts consist of cash that we are legally entitled to, but that is not immediately available to us. As a result, these amounts were considered restricted as of the dates presented. |
Basis of Presentation (Details)
Basis of Presentation (Details) ft² in Millions | Jun. 30, 2022 ft² property state |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of properties owned | property | 11,427 |
Number of U.S. states where operating | state | 50 |
Leasable square feet (sq ft) | ft² | 218.5 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies and Procedures and New Accounting Standards (Details) | 6 Months Ended |
Jun. 30, 2022 segment | |
Accounting Policies [Abstract] | |
Number of reportable segments | 1 |
Number of operating segments | 1 |
Merger with VEREIT, Inc. - Fair
Merger with VEREIT, Inc. - Fair Value of Consideration (Details) - USD ($) $ / shares in Units, $ in Thousands | Nov. 01, 2021 | Jun. 30, 2022 | Dec. 31, 2021 |
Fair value of the consideration transferred on the date of the acquisition | |||
Common stock and paid in capital, outstanding (in shares) | 617,564,272 | 591,261,991 | |
VEREIT | |||
Fair value of the consideration transferred on the date of the acquisition | |||
Shares of VEREIT common stock and VEREIT Operating Partnership, L.P. ("OP") common units exchanged (in shares) | 229,304,035 | ||
Exchange Ratio | 70.50% | ||
Shares of VEREIT common stock and VEREIT OP common units after conversion (in shares) | 161,659,345 | ||
Less: Fractional shares settled in cash (in shares) | (1,545) | ||
Shares of Realty Income common stock and Realty Income L.P. units issued (in shares) | 161,657,800 | ||
Adjusted opening price of Realty common stock on November 1, 2021 (in dollars per share) | $ 71.236 | ||
Fair value of Realty common stock issued to former holders of VEREIT common stock and VEREIT OP common units | $ 11,515,855 | ||
Fair value of VEREIT's equity-based compensation awards attributable to pre-combination services | 44,020 | ||
Total non-cash consideration | 11,559,875 | ||
Cash paid for fractional shares | 110 | ||
VEREIT indebtedness paid off in connection with the merger | 500,414 | ||
Consideration transferred | $ 12,060,399 | ||
VEREIT Inc | |||
Fair value of the consideration transferred on the date of the acquisition | |||
Common stock and paid in capital, outstanding (in shares) | 229,152,001 | ||
VEREIT OP | |||
Fair value of the consideration transferred on the date of the acquisition | |||
Common units outstanding (in units) | 152,034 | ||
Realty Income | |||
Fair value of the consideration transferred on the date of the acquisition | |||
Share price (in dollars per share) | $ 71 | ||
Dividend adjustment on share price (in dollars per share) | $ 0.236 |
Merger with VEREIT, Inc. - Prel
Merger with VEREIT, Inc. - Preliminary Fair Values of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | 6 Months Ended | |||
Nov. 01, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
ASSETS | ||||
Goodwill | $ 3,731,478 | $ 3,676,705 | ||
LIABILITIES | ||||
Weighted average amortization period for acquired lease intangible assets | 10 years 3 months 18 days | 12 years 8 months 12 days | ||
Weighted average amortization period for acquired lease intangible liabilities | 11 years 4 months 24 days | 14 years | ||
VEREIT | ||||
ASSETS | ||||
Land | $ 3,021,906 | |||
Buildings | 8,677,467 | |||
Total real estate held for investment | 11,699,373 | |||
Cash and cash equivalents | 128,411 | |||
Accounts receivable | 53,355 | |||
Lease intangible assets | 3,204,773 | |||
Goodwill | 3,717,620 | |||
Investment in unconsolidated entities | 175,379 | |||
Other assets | 308,910 | |||
Total assets acquired | 19,287,821 | |||
LIABILITIES | ||||
Accounts payable and accrued expenses | 139,836 | |||
Lease intangible liabilities | 949,349 | |||
Other liabilities | 320,893 | |||
Total liabilities assumed | 7,226,070 | |||
Net assets acquired, at fair value | 12,061,751 | |||
Noncontrolling interests | 1,352 | |||
Total purchase price | $ 12,060,399 | |||
Weighted average amortization period for acquired lease intangible assets | 9 years 3 months 18 days | |||
Weighted average amortization period for acquired lease intangible liabilities | 25 years 6 months | |||
VEREIT | Mortgages payable | ||||
LIABILITIES | ||||
Mortgages and notes payable | $ 869,027 | |||
VEREIT | Notes payable | ||||
LIABILITIES | ||||
Mortgages and notes payable | $ 4,946,965 |
Merger with VEREIT, Inc. - Narr
Merger with VEREIT, Inc. - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Nov. 01, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Business Acquisition [Line Items] | |||||
Merger and integration-related costs | $ 2,729,000 | $ 13,298,000 | $ 9,248,000 | $ 13,298,000 | |
VEREIT | |||||
Business Acquisition [Line Items] | |||||
Net increase to goodwill | 54,800,000 | ||||
Preliminary allocation to goodwill | $ 3,720,000,000 | ||||
Goodwill expected to be deductible for tax purposes | $ 0 | ||||
Merger and integration-related costs | 2,700,000 | $ 13,300,000 | 9,200,000 | $ 13,300,000 | |
Revenues associated with VEREIT OP | 255,200,000 | 513,500,000 | |||
Net income associated with VEREIT OP | $ 9,000,000 | $ 26,000,000 |
Merger with VEREIT, Inc. - Pro
Merger with VEREIT, Inc. - Pro Forma Information (Details) - VEREIT - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Pro Forma Information | ||||
Total revenues | $ 810.4 | $ 765.3 | $ 1,617.8 | $ 1,507.8 |
Net income | $ 223.8 | $ 186.7 | $ 423.8 | $ 376 |
Basic earnings per share (in dollars per share) | $ 0.37 | $ 0.35 | $ 0.71 | $ 0.70 |
Diluted earnings per share (in dollars per share) | $ 0.37 | $ 0.35 | $ 0.71 | $ 0.70 |
Supplemental Detail for Certa_3
Supplemental Detail for Certain Components of Consolidated Balance Sheets - Accounts Receivable (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Accounts Receivable | ||
Straight-line rent receivables, net | $ 287,891 | $ 231,943 |
Client receivables, net | 212,493 | 194,825 |
Accounts receivable | $ 500,384 | $ 426,768 |
Supplemental Detail for Certa_4
Supplemental Detail for Certain Components of Consolidated Balance Sheets - Lease Intangible Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Lease intangible assets, net | ||
Total acquired lease intangible assets, net | $ 5,154,994 | $ 5,275,304 |
In-place leases | ||
Lease intangible assets, net | ||
Lease intangible assets, gross | 4,962,053 | 4,791,846 |
Accumulated amortization of lease intangible assets | (1,102,772) | (804,050) |
Above-market leases | ||
Lease intangible assets, net | ||
Lease intangible assets, gross | 1,665,374 | 1,591,382 |
Accumulated amortization of lease intangible assets | $ (369,661) | $ (303,874) |
Supplemental Detail for Certa_5
Supplemental Detail for Certain Components of Consolidated Balance Sheets - Other Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 | Jun. 30, 2021 |
Other assets, net | |||
Right of use asset - operating leases, net | $ 598,385 | $ 631,515 | |
Financing receivables | 521,729 | 323,921 | |
Right of use asset - financing leases | 442,092 | 218,332 | |
Derivative assets and receivables – at fair value | 124,011 | 29,593 | |
Restricted escrow deposits | 100,098 | 68,541 | $ 34,636 |
Prepaid expenses | 28,347 | 18,062 | |
Credit facility origination costs, net | 19,663 | 4,352 | |
Non-refundable escrow deposits | 13,815 | 28,560 | |
Corporate assets, net | 12,209 | 10,915 | |
Investment in sales type lease | 5,902 | 7,492 | |
Note receivable | 5,867 | 4,455 | |
Impounds related to mortgages payable | 718 | 5,249 | $ 1,185 |
Other items | 20,239 | 18,592 | |
Total other assets, net | $ 1,893,075 | $ 1,369,579 | |
Right-of-use asset, operating leases, balance sheet line item | Total other assets, net | Total other assets, net | |
Right-of-use asset, financing leases, balance sheet line item | Total other assets, net | Total other assets, net |
Supplemental Detail for Certa_6
Supplemental Detail for Certain Components of Consolidated Balance Sheets - Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Accounts payable and accrued expenses consist of the following at: | ||
Property taxes payable | $ 40,543 | $ 36,173 |
Value-added tax payable | 34,730 | 11,297 |
Accrued property expenses | 25,877 | 27,344 |
Accrued costs on properties under development | 22,893 | 19,665 |
Derivative liabilities and payables – at fair value | 18,899 | 70,617 |
Accrued income taxes | 16,653 | 19,152 |
Merger and integration-related costs | 1,165 | 10,699 |
Other items | 65,613 | 44,080 |
Total accounts payable and accrued expenses | 353,573 | 351,128 |
Notes payable | ||
Accounts payable and accrued expenses consist of the following at: | ||
Interest payable | 123,853 | 108,227 |
Mortgages, term loans, credit line | ||
Accounts payable and accrued expenses consist of the following at: | ||
Interest payable | $ 3,347 | $ 3,874 |
Supplemental Detail for Certa_7
Supplemental Detail for Certain Components of Consolidated Balance Sheets - Lease Intangible Liabilities, Net (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Lease intangible liabilities, net, consist of the following at: | ||
Below-market leases | $ 1,540,274 | $ 1,460,701 |
Accumulated amortization of below-market leases | (193,626) | (152,480) |
Total lease intangible liabilities, net | $ 1,346,648 | $ 1,308,221 |
Supplemental Detail for Certa_8
Supplemental Detail for Certain Components of Consolidated Balance Sheets - Other Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Other liabilities consist of the following at: | ||
Lease liability - operating leases, net | $ 436,120 | $ 461,748 |
Rent received in advance and other deferred revenue | 243,102 | 242,122 |
Security deposits | 11,397 | 11,340 |
Lease liability - financing leases | 49,738 | 43,987 |
Total other liabilities | $ 740,357 | $ 759,197 |
Lease liability, operating leases, balance sheet line item | Total other liabilities | Total other liabilities |
Lease liability, financing leases, balance sheet line item | Total other liabilities | Total other liabilities |
Investments in Real Estate - Ac
Investments in Real Estate - Acquisitions (Details) ft² in Thousands, $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 USD ($) ft² property | Jun. 30, 2021 USD ($) ft² property | |
Real Estate [Line Items] | ||
Number of properties | property | 423 | 254 |
Leasable square feet (sq ft) | ft² | 13,663 | 9,634 |
Investment | $ 3,231,100 | $ 2,161,900 |
Weighted average lease term (years) | 11 years 10 months 24 days | 12 years |
Initial weighted average cash lease yield (percent) | 5.70% | 5.50% |
Settlement credits as reimbursement for acquired rent free period | $ 6,800 | $ 850 |
Rental revenue generated from acquisitions from investment grade tenants (as a percent) | 33% | 47% |
Retail | ||
Real Estate [Line Items] | ||
Property type acquired based on rental revenue (as a percent) | 87.40% | 75.80% |
Industrial | ||
Real Estate [Line Items] | ||
Property type acquired based on rental revenue (as a percent) | 12.60% | 24.20% |
New properties | ||
Real Estate [Line Items] | ||
Number of properties, new | property | 340 | 214 |
Leasable square feet (sq ft) | ft² | 10,942 | 7,618 |
Investment | $ 2,963,200 | $ 2,047,100 |
Weighted average lease term (years) | 11 years 6 months | 11 years 9 months 18 days |
Initial weighted average cash lease yield (percent) | 5.70% | 5.50% |
New properties | U.S. | ||
Real Estate [Line Items] | ||
Number of properties, new | property | 289 | 173 |
Leasable square feet (sq ft) | ft² | 5,551 | 4,485 |
Investment | $ 1,492,000 | $ 1,052,300 |
Weighted average lease term (years) | 13 years 10 months 24 days | 13 years 8 months 12 days |
Initial weighted average cash lease yield (percent) | 5.70% | 5.50% |
New properties | Europe (UK) | ||
Real Estate [Line Items] | ||
Number of properties, new | property | 51 | 41 |
Leasable square feet (sq ft) | ft² | 5,391 | 3,133 |
Investment | $ 1,471,200 | $ 994,800 |
Weighted average lease term (years) | 9 years | 9 years 9 months 18 days |
Initial weighted average cash lease yield (percent) | 5.60% | 5.60% |
Properties under development | ||
Real Estate [Line Items] | ||
Number of properties, under development | property | 83 | 40 |
Leasable square feet (sq ft) | ft² | 2,721 | 2,016 |
Investment | $ 267,900 | $ 114,800 |
Weighted average lease term (years) | 15 years 10 months 24 days | 15 years 7 months 6 days |
Initial weighted average cash lease yield (percent) | 5.70% | 5.70% |
Investments in Real Estate - _2
Investments in Real Estate - Acquisitions Footnotes (Details) $ in Thousands, £ in Millions | 6 Months Ended | ||
Jun. 30, 2022 USD ($) property | Jun. 30, 2022 GBP (£) property | Jun. 30, 2021 USD ($) property | |
Real Estate [Line Items] | |||
Settlement credits as reimbursement for acquired rent free period | $ 6,800 | $ 850 | |
Value of properties acquired during the period | $ 3,231,100 | $ 2,161,900 | |
Rental revenue generated from acquisitions from investment grade tenants (as a percent) | 33% | 33% | 47% |
Properties under development | |||
Real Estate [Line Items] | |||
Number of properties, under development | property | 83 | 83 | 40 |
Value of properties acquired during the period | $ 267,900 | $ 114,800 | |
Retail | |||
Real Estate [Line Items] | |||
Property type acquired based on rental revenue (as a percent) | 87.40% | 87.40% | 75.80% |
Industrial | |||
Real Estate [Line Items] | |||
Property type acquired based on rental revenue (as a percent) | 12.60% | 12.60% | 24.20% |
U.K. | Properties under development | |||
Real Estate [Line Items] | |||
Number of properties, under development | property | 2 | 2 | |
Value of properties acquired during the period | £ | £ 14.9 |
Investments in Real Estate - _3
Investments in Real Estate - Acquisitions Allocation (Details) $ in Thousands, £ in Millions | 6 Months Ended | |||
Jun. 30, 2022 USD ($) | Jun. 30, 2022 GBP (£) | Jun. 30, 2021 USD ($) | Jun. 30, 2021 GBP (£) | |
Acquisitions | ||||
Weighted average amortization period for acquired lease intangible assets | 10 years 3 months 18 days | 10 years 3 months 18 days | 12 years 8 months 12 days | 12 years 8 months 12 days |
Weighted average amortization period for acquired lease intangible liabilities | 11 years 4 months 24 days | 11 years 4 months 24 days | 14 years | 14 years |
Real Estate Investment | U.S. | ||||
Acquisitions | ||||
Land | $ 480,300 | $ 384,500 | ||
Buildings and improvements | 843,900 | 539,500 | ||
Lease intangible assets | 185,000 | 171,800 | ||
Other assets | 214,700 | 38,500 | ||
Lease intangible liabilities | (27,300) | (14,400) | ||
Other liabilities | (21,100) | (21,600) | ||
Net | 1,675,500 | 1,098,300 | ||
Allocated to other assets, financing receivables with above-market terms | 182,600 | |||
Allocated to other assets, finance lease right-of-use assets | 32,100 | |||
Deferred rent on below market leases | 14,600 | |||
Lease liabilities under finance leases | 8,600 | |||
Mortgage discounts | $ 2,100 | |||
Real Estate Investment | U.K. | ||||
Acquisitions | ||||
Land | £ | £ 476.7 | £ 219.7 | ||
Buildings and improvements | £ | 368.2 | 375.4 | ||
Lease intangible assets | £ | 179.4 | 125.6 | ||
Other assets | £ | 166.2 | 0 | ||
Lease intangible liabilities | £ | (50.2) | (5.3) | ||
Other liabilities | 0 | $ (300) | ||
Net | £ | 1,140.3 | 715.1 | ||
Allocated to land, right of use assets under long-term ground leases | £ | 33.2 | £ 1.3 | ||
Allocated to other assets, financing receivables with above-market terms | £ | 3.8 | |||
Allocated to other assets, finance lease right-of-use assets | £ | £ 162.4 |
Investments in Real Estate - _4
Investments in Real Estate - Acquisitions Narrative (Details) - Real Estate Investment - USD ($) | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Investments in real estate properties | ||
Contingent consideration associated with acquisitions | $ 0 | $ 0 |
Revenue generated from acquired properties during the period | 37,500,000 | 24,900,000 |
Net income generated from acquired properties during the period | $ 13,400,000 | $ 6,100,000 |
Investments in Real Estate - In
Investments in Real Estate - Investments in Existing Properties Narrative (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Investments in real estate properties | ||
Capitalized costs on existing portfolio | $ 29,654 | $ 3,997 |
Investments in existing properties | ||
Investments in real estate properties | ||
Capitalized costs on existing portfolio | 37,800 | 4,300 |
Re-leasing costs | 3,200 | 827 |
Recurring capital expenditures | 2,800 | 51 |
Non-recurring building improvements | $ 31,800 | $ 3,400 |
Investments in Real Estate - Pr
Investments in Real Estate - Properties with Existing Leases Narrative (Details) $ in Millions | 6 Months Ended | |
Jun. 30, 2022 USD ($) property | Jun. 30, 2021 USD ($) property | |
Real Estate Properties [Line Items] | ||
Value of properties acquired during the period | $ 3,231.1 | $ 2,161.9 |
Number of properties acquired during the period | property | 423 | 254 |
Real Estate Investment | ||
Real Estate Properties [Line Items] | ||
Value of properties acquired during the period | $ 3,230 | $ 2,160 |
Properties under development | ||
Real Estate Properties [Line Items] | ||
Value of properties acquired during the period | 267.9 | 114.8 |
Properties under development | Real Estate Investment | ||
Real Estate Properties [Line Items] | ||
Value of properties acquired during the period | 267.9 | 114.8 |
New properties | ||
Real Estate Properties [Line Items] | ||
Value of properties acquired during the period | 2,963.2 | 2,047.1 |
New properties | Real Estate Investment | ||
Real Estate Properties [Line Items] | ||
Value of properties acquired during the period | 2,960 | 2,050 |
Properties with existing leases | Real Estate Investment | ||
Real Estate Properties [Line Items] | ||
Value of properties acquired during the period | $ 2,210 | $ 1,810 |
Number of properties acquired during the period | property | 168 | 143 |
In-place leases | ||
Real Estate Properties [Line Items] | ||
Depreciation and amortization expense | $ 318.3 | $ 77.5 |
Above and below market leases | ||
Real Estate Properties [Line Items] | ||
Amortization of above and below market Leases | $ 48.6 | $ 19.7 |
Investments in Real Estate - Es
Investments in Real Estate - Estimated Impact of Amortization of Lease Intangibles (Details) $ in Thousands | Jun. 30, 2022 USD ($) |
Above and below market leases | |
Net increase (decrease) to rental revenue | |
2022 | $ (29,835) |
2023 | (58,837) |
2024 | (52,621) |
2025 | (46,411) |
2026 | (38,118) |
Thereafter | 276,757 |
Totals | 50,935 |
In-place leases | |
Increase to amortization expense | |
2022 | 306,632 |
2023 | 545,532 |
2024 | 484,561 |
2025 | 415,549 |
2026 | 370,236 |
Thereafter | 1,736,771 |
Totals | $ 3,859,281 |
Investments in Real Estate- Gai
Investments in Real Estate- Gain on Sales of Real Estate (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 USD ($) property | Jun. 30, 2021 USD ($) property | Jun. 30, 2022 USD ($) property | Jun. 30, 2021 USD ($) property | |
Properties sold during the period | ||||
Number of properties | property | 70 | 42 | 104 | 69 |
Net sales proceeds | $ 150,000 | $ 56,900 | $ 272,200 | $ 91,600 |
Gain on sales of real estate | $ 40,572 | $ 14,901 | $ 50,728 | $ 23,302 |
Investments in Real Estate - _5
Investments in Real Estate - Investment in Unconsolidated Entities (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 USD ($) property | Jun. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) property | Jun. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | |
Investment in unconsolidated entities | |||||
Carrying Amount of Investment | $ 113,562 | $ 113,562 | $ 140,967 | ||
Equity in income and impairment of investment in unconsolidated entities | (6,627) | $ 0 | (5,673) | $ 0 | |
Unconsolidated entities | Non-recourse | |||||
Investment in unconsolidated entities | |||||
Non-recourse debt | $ 431,800 | $ 431,800 | 431,800 | ||
Industrial Partnerships | |||||
Investment in unconsolidated entities | |||||
Ownership Percentage | 20% | 20% | |||
Number of Properties | property | 7 | 7 | |||
Carrying Amount of Investment | $ 113,562 | $ 113,562 | $ 140,967 | ||
Equity in income and impairment of investment in unconsolidated entities | (5,673) | $ 0 | |||
Carrying amount of investments in excess of underlying equity in net assets | $ 74,100 | 74,100 | |||
Carrying amount of investment in unconsolidated entities | 121,400 | ||||
Other than temporary impairment | $ 7,800 |
Revolving Credit Facility and_2
Revolving Credit Facility and Commercial Paper Program (Details) | 1 Months Ended | 6 Months Ended | |||
Apr. 30, 2022 USD ($) currency extension | Jun. 30, 2022 USD ($) | Jun. 30, 2021 | Mar. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Credit facility | |||||
Credit facility origination costs | $ 19,663,000 | $ 4,352,000 | |||
Maximum aggregate capacity of commercial paper program | 1,000,000,000 | ||||
Commercial paper borrowings outstanding | $ 950,000,000 | 901,400,000 | |||
Weighted average interest rate at the end of the period (as a percent) | 1.80% | ||||
Revolving credit facility | Unsecured debt | |||||
Credit facility | |||||
Maximum borrowing capacity | $ 3,000,000,000 | ||||
Credit facility origination costs | $ 19,700,000 | 4,400,000 | |||
Current borrowing capacity | 4,030,000,000 | ||||
Outstanding balance | $ 219,100,000 | $ 650,000,000 | |||
Weighted average borrowing rate during the period (as a percent) | 1.50% | 0.90% | |||
Weighted average interest rate at the end of the period (as a percent) | 2.20% | ||||
Revolving credit facility | Unsecured debt | Multicurrency Credit Facility | |||||
Credit facility | |||||
Maximum borrowing capacity | $ 4,250,000,000 | ||||
Number of extensions | extension | 2 | ||||
Term of extension option | 6 months | ||||
Number of currencies allowable per facility | currency | 14 | ||||
Credit facility expansion option | $ 1,000,000,000 | ||||
Revolving credit facility | Unsecured debt | Sterling Overnight Indexed Average (SONIA) | Multicurrency Credit Facility | |||||
Credit facility | |||||
Basis spread on variable rate (as a percent) | 0.725% | ||||
Basis spread on variable rate, adjustment chare (as a percent) | 0.0326% | ||||
Commitment fee (as a percent) | 0.125% | ||||
All-in drawn variable interest rate (as a percent) | 0.8826% | ||||
Revolving credit facility | Unsecured debt | Secured Overnight Financing Rate (SOFR) | Multicurrency Credit Facility | |||||
Credit facility | |||||
Basis spread on variable rate (as a percent) | 0.725% | ||||
Basis spread on variable rate, adjustment chare (as a percent) | 0.10% | ||||
Commitment fee (as a percent) | 0.125% | ||||
All-in drawn variable interest rate (as a percent) | 0.95% | ||||
Commercial paper | |||||
Credit facility | |||||
Weighted average borrowing rate during the period (as a percent) | 0.80% | 0.30% |
Term Loans (Details)
Term Loans (Details) - Term loans - USD ($) | 1 Months Ended | |||
Oct. 31, 2018 | Jun. 30, 2022 | Dec. 31, 2021 | Oct. 01, 2018 | |
Debt | ||||
Deferred finance costs balance | $ 344,000 | $ 443,000 | ||
$250 million senior unsecured term loan due March 2024 | ||||
Debt | ||||
Face amount of loan | $ 250,000,000 | |||
Effective yield (as a percent) | 3.73% | |||
$250 million senior unsecured term loan due March 2024 | LIBOR | ||||
Debt | ||||
Basis spread on variable rate (as a percent) | 0.85% |
Mortgages Payable - Narrative (
Mortgages Payable - Narrative (Details) $ in Thousands, £ in Millions | 6 Months Ended | |||
Jun. 30, 2022 USD ($) mortgage property | Jun. 30, 2021 USD ($) mortgage property | Jun. 30, 2021 GBP (£) mortgage property | Dec. 31, 2021 USD ($) | |
Debt | ||||
Principal payments | $ 225,951 | $ 42,590 | ||
Number of mortgages assumed | property | 1 | 1 | ||
Mortgages payable | ||||
Debt | ||||
Principal payments | $ 226,000 | $ 42,600 | ||
Number of mortgages assumed | mortgage | 8 | 1 | 1 | |
Number of properties assumed | property | 17 | |||
Mortgages assumed at fair value | $ 45,079 | $ 43,779 | £ 31 | |
Deferred financing costs | 1,000 | $ 790 | ||
Unamortized net premiums | 19,200 | $ 28,700 | ||
Mortgages payable | Mortgages repaid in full | ||||
Debt | ||||
Principal payments | $ 223,900 | $ 40,900 | ||
Mortgages repaid in full | mortgage | 7 | 5 | 5 |
Mortgages Payable - Summary of
Mortgages Payable - Summary of Mortgages Payable (Details) - Mortgages payable $ in Thousands | Jun. 30, 2022 USD ($) property mortgage | Dec. 31, 2021 USD ($) property mortgage |
Debt | ||
Number of Properties | property | 158 | 267 |
Weighted Average Stated Interest Rate (as a percent) | 4.80% | 4.80% |
Weighted Average Effective Interest Rate (as a percent) | 3.30% | 3.50% |
Weighted Average Remaining Years Until Maturity | 1 year 9 months 18 days | 1 year 9 months 18 days |
Remaining Principal Balance | $ 928,943 | $ 1,114,129 |
Unamortized Premium and Deferred Financing Costs Balance, net | 18,169 | 27,866 |
Mortgage Payable Balance | $ 947,112 | $ 1,141,995 |
Number of mortgages | mortgage | 23 | 22 |
Number of Sterling-denominated mortgages paid quarterly | mortgage | 1 | |
Minimum | ||
Debt | ||
Weighted Average Effective Interest Rate (as a percent) | 2.60% | 2.60% |
Stated interest rate (as a percent) | 3% | 3% |
Maximum | ||
Debt | ||
Weighted Average Effective Interest Rate (as a percent) | 6.60% | 6% |
Stated interest rate (as a percent) | 6.90% | 6.90% |
Mortgages Payable - Summary o_2
Mortgages Payable - Summary of Maturities (Details) - Mortgages payable - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Maturity of mortgages payable | ||
2022 | $ 45,500 | |
2023 | 62,800 | |
2024 | 740,500 | |
2025 | 42,300 | |
2026 | 11,900 | |
Thereafter | 26,000 | |
Totals | $ 928,943 | $ 1,114,129 |
Notes Payable - General (Detail
Notes Payable - General (Details) - Notes and bonds payable | 1 Months Ended | ||||||||
Nov. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2022 GBP (£) | Jan. 31, 2022 GBP (£) | Dec. 31, 2021 USD ($) | Nov. 01, 2021 USD ($) | Jul. 31, 2021 GBP (£) | Oct. 31, 2020 GBP (£) | Dec. 31, 2019 USD ($) | |
Debt | |||||||||
Total principal amount | $ 13,390,000,000 | $ 12,257,000,000 | |||||||
Unamortized net premiums and deferred financing costs | 198,000,000 | 243,000,000 | |||||||
Net payable amount | $ 13,588,000,000 | 12,500,000,000 | |||||||
4.600% notes, $500 issued February 2014, of which $485 was exchanged in November 2021, both due in February 2024 | |||||||||
Debt | |||||||||
Interest rate (as a percent) | 4.60% | 4.60% | |||||||
Principal amount | $ 500,000,000 | ||||||||
Amount exchanged | $ 485,000,000 | ||||||||
Total principal amount | $ 500,000,000 | 500,000,000 | |||||||
3.875% notes, issued in June 2014 and due in July 2024 | |||||||||
Debt | |||||||||
Interest rate (as a percent) | 3.875% | 3.875% | |||||||
Principal amount | $ 350,000,000 | ||||||||
Total principal amount | $ 350,000,000 | 350,000,000 | |||||||
3.875% notes, issued in April 2018 and due in April 2025 | |||||||||
Debt | |||||||||
Interest rate (as a percent) | 3.875% | 3.875% | |||||||
Principal amount | $ 500,000,000 | ||||||||
Total principal amount | $ 500,000,000 | 500,000,000 | |||||||
4.625% notes, $550 issued October 2018, of which $544 was exchanged in November 2021, both due in November 2025 | |||||||||
Debt | |||||||||
Interest rate (as a percent) | 4.625% | 4.625% | |||||||
Principal amount | $ 550,000,000 | ||||||||
Amount exchanged | 544,000,000 | ||||||||
Total principal amount | $ 550,000,000 | 550,000,000 | |||||||
0.750% notes, issued December 2020 and due in March 2026 | |||||||||
Debt | |||||||||
Interest rate (as a percent) | 0.75% | 0.75% | |||||||
Principal amount | $ 325,000,000 | ||||||||
Total principal amount | $ 325,000,000 | 325,000,000 | |||||||
4.875% notes, $600 issued June 2016, of which $596 was exchanged in November 2021, both due in June 2026 | |||||||||
Debt | |||||||||
Interest rate (as a percent) | 4.875% | 4.875% | |||||||
Principal amount | $ 600,000,000 | ||||||||
Amount exchanged | 596,000,000 | ||||||||
Total principal amount | $ 600,000,000 | 600,000,000 | |||||||
4.125% notes, $250 issued in September 2014 and $400 issued in March 2017, both due in October 2026 | |||||||||
Debt | |||||||||
Interest rate (as a percent) | 4.125% | 4.125% | |||||||
Principal amount | $ 650,000,000 | ||||||||
Total principal amount | 650,000,000 | 650,000,000 | |||||||
4.125% notes, issued in September 2014 and due in October 2026 | |||||||||
Debt | |||||||||
Principal amount | 250,000,000 | ||||||||
4.125% notes, issued in March 2017 and due in October 2026 | |||||||||
Debt | |||||||||
Principal amount | $ 400,000,000 | ||||||||
1.875% notes, issued in January 2022 and due in January 2027 | |||||||||
Debt | |||||||||
Interest rate (as a percent) | 1.875% | 1.875% | 0.01875% | ||||||
Principal amount | £ | £ 250,000,000 | £ 250,000,000 | |||||||
Total principal amount | $ 304,000,000 | 0 | |||||||
3.000% notes, issued in October 2016 and due in January 2027 | |||||||||
Debt | |||||||||
Interest rate (as a percent) | 3% | 3% | |||||||
Principal amount | $ 600,000,000 | ||||||||
Total principal amount | $ 600,000,000 | 600,000,000 | |||||||
1.125% notes, issued in July 2021 and due in July 2027 | |||||||||
Debt | |||||||||
Interest rate (as a percent) | 1.125% | 1.125% | 0.01125% | ||||||
Principal amount | £ | £ 400,000,000 | £ 400,000,000 | |||||||
Total principal amount | $ 486,000,000 | 541,000,000 | |||||||
3.950% notes, $600 issued August 2017, of which $594 was exchanged in November 2021, both due in August 2027 | |||||||||
Debt | |||||||||
Interest rate (as a percent) | 3.95% | 3.95% | |||||||
Principal amount | $ 600,000,000 | ||||||||
Amount exchanged | 594,000,000 | ||||||||
Total principal amount | $ 600,000,000 | 600,000,000 | |||||||
3.650% notes, issued in December 2017 and due in January 2028 | |||||||||
Debt | |||||||||
Interest rate (as a percent) | 3.65% | 3.65% | |||||||
Principal amount | $ 550,000,000 | ||||||||
Total principal amount | $ 550,000,000 | 550,000,000 | |||||||
3.400% notes, $600 issued June 2020, of which $598 was exchanged in November 2021, both due in January 2028 | |||||||||
Debt | |||||||||
Interest rate (as a percent) | 3.40% | 3.40% | |||||||
Principal amount | $ 600,000,000 | ||||||||
Amount exchanged | 598,000,000 | ||||||||
Total principal amount | $ 600,000,000 | 600,000,000 | |||||||
2.200% notes, $500 issued November 2020, of which $497 was exchanged in November 2021, both due in June 2028 | |||||||||
Debt | |||||||||
Interest rate (as a percent) | 2.20% | 2.20% | |||||||
Principal amount | $ 500,000,000 | ||||||||
Amount exchanged | 497,000,000 | ||||||||
Total principal amount | $ 500,000,000 | 500,000,000 | |||||||
3.250% notes, issued in June 2019 and due in June 2029 | |||||||||
Debt | |||||||||
Interest rate (as a percent) | 3.25% | 3.25% | |||||||
Principal amount | $ 500,000,000 | ||||||||
Total principal amount | $ 500,000,000 | 500,000,000 | |||||||
3.100% notes, $600 issued December 2019, of which $596 was exchanged in November 2021, both due in December 2029 | |||||||||
Debt | |||||||||
Interest rate (as a percent) | 3.10% | 3.10% | |||||||
Principal amount | $ 599,000,000 | $ 599,000,000 | $ 600,000,000 | ||||||
Amount exchanged | 596,000,000 | ||||||||
Total principal amount | $ 599,000,000 | 599,000,000 | |||||||
Early participation premium per $1000 of principal | $ 30 | ||||||||
3.160% notes, issued in June 2022 and due in June 2030 | |||||||||
Debt | |||||||||
Interest rate (as a percent) | 3.16% | 3.16% | |||||||
Principal amount | £ | £ 140,000,000 | ||||||||
Total principal amount | $ 170,000,000 | 0 | |||||||
1.625% notes, issued in October 2020 and due in December 2030 | |||||||||
Debt | |||||||||
Interest rate (as a percent) | 1.625% | 1.625% | 0.01625% | ||||||
Principal amount | £ | £ 400,000,000 | £ 400,000,000 | |||||||
Total principal amount | $ 486,000,000 | 541,000,000 | |||||||
3.250% notes, $600 issued in May 2020 and $350 issued in July 2020, both due in January 2031 | |||||||||
Debt | |||||||||
Interest rate (as a percent) | 3.25% | 3.25% | |||||||
Principal amount | $ 950,000,000 | ||||||||
Total principal amount | 950,000,000 | 950,000,000 | |||||||
3.250% notes, issued in May 2020 and due in January 2031 | |||||||||
Debt | |||||||||
Principal amount | 600,000,000 | ||||||||
3.250% notes, issued in July 2020 and due in January 2031 | |||||||||
Debt | |||||||||
Principal amount | $ 350,000,000 | ||||||||
3.180% notes, issued in June 2022 and due in June 2032 | |||||||||
Debt | |||||||||
Interest rate (as a percent) | 3.18% | 3.18% | |||||||
Principal amount | £ | £ 345,000,000 | ||||||||
Total principal amount | $ 419,000,000 | 0 | |||||||
2.850% notes, $700 issued November 2020, of which $699 was exchanged in November 2021, both due in December 2032 | |||||||||
Debt | |||||||||
Interest rate (as a percent) | 2.85% | 2.85% | |||||||
Principal amount | $ 700,000,000 | ||||||||
Amount exchanged | $ 699,000,000 | ||||||||
Total principal amount | $ 700,000,000 | 700,000,000 | |||||||
1.800% notes, issued in December 2020 and due in March 2033 | |||||||||
Debt | |||||||||
Interest rate (as a percent) | 1.80% | 1.80% | |||||||
Principal amount | $ 400,000,000 | ||||||||
Total principal amount | $ 400,000,000 | 400,000,000 | |||||||
1.750% notes, issued in July 2021 and due in July 2033 | |||||||||
Debt | |||||||||
Interest rate (as a percent) | 1.75% | 1.75% | 0.0175% | ||||||
Principal amount | £ | £ 350,000,000 | £ 350,000,000 | |||||||
Total principal amount | $ 425,000,000 | 474,000,000 | |||||||
2.730% notes, issued in May 2019 and due in May 2034 | |||||||||
Debt | |||||||||
Interest rate (as a percent) | 2.73% | 2.73% | |||||||
Principal amount | £ | £ 315,000,000 | ||||||||
Total principal amount | $ 382,000,000 | 427,000,000 | |||||||
5.875% bonds, $100 issued in March 2005 and $150 issued in June 2011, both due in March 2035 | |||||||||
Debt | |||||||||
Interest rate (as a percent) | 5.875% | 5.875% | |||||||
Principal amount | $ 250,000,000 | ||||||||
Total principal amount | 250,000,000 | 250,000,000 | |||||||
5.875% bonds, issued in March 2005 and due in March 2035 | |||||||||
Debt | |||||||||
Principal amount | 100,000,000 | ||||||||
5.875% bonds, issued in June 2011 and due in March 2035 | |||||||||
Debt | |||||||||
Principal amount | $ 150,000,000 | ||||||||
3.390% notes due 2037 | |||||||||
Debt | |||||||||
Interest rate (as a percent) | 3.39% | 3.39% | |||||||
Principal amount | £ | £ 115,000,000 | ||||||||
Total principal amount | $ 140,000,000 | 0 | |||||||
2.500% notes, issued in January 2022 and due in January 2042 | |||||||||
Debt | |||||||||
Interest rate (as a percent) | 2.50% | 2.50% | 0.025% | ||||||
Principal amount | £ | £ 250,000,000 | £ 250,000,000 | |||||||
Total principal amount | $ 304,000,000 | 0 | |||||||
4.650% notes, $300 issued in March 2017 and $250 issued in December 2017, both due in March 2047 | |||||||||
Debt | |||||||||
Interest rate (as a percent) | 4.65% | 4.65% | |||||||
Principal amount | $ 550,000,000 | ||||||||
Total principal amount | 550,000,000 | 550,000,000 | |||||||
4.650% notes, issued in March 2017 and due in March 2047 | |||||||||
Debt | |||||||||
Principal amount | 300,000,000 | ||||||||
4.650% notes, issued in December 2017 and due in March 2047 | |||||||||
Debt | |||||||||
Principal amount | 250,000,000 | ||||||||
VEREIT OP notes not exchanged | |||||||||
Debt | |||||||||
Total principal amount | $ 39,100,000 | $ 39,100,000 |
Notes Payable - Maturities (Det
Notes Payable - Maturities (Details) - Notes and bonds payable - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Maturity of notes and bonds payable | ||
2024 | $ 850,000 | |
2025 | 1,050,000 | |
2026 | 1,575,000 | |
Thereafter | 9,915,000 | |
Totals | $ 13,390,000 | $ 12,257,000 |
Notes Payable - Narrative (Deta
Notes Payable - Narrative (Details) - Notes payable $ in Millions | 3 Months Ended | 6 Months Ended | |||||||
Jun. 30, 2022 USD ($) | Jun. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2021 USD ($) | Jun. 30, 2022 GBP (£) | Jan. 31, 2022 GBP (£) | Dec. 31, 2021 USD ($) | Jul. 31, 2021 GBP (£) | Oct. 31, 2020 GBP (£) | |
Debt | |||||||||
Unamortized net premiums | $ | $ 257 | $ 257 | $ 295.5 | ||||||
Deferred financing costs | $ | $ 58.7 | $ 58.7 | $ 53.1 | ||||||
Weighted average interest rate (as a percent) | 3.20% | 3.20% | 3.20% | ||||||
Weighted average remaining years until maturity | 7 years 7 months 6 days | ||||||||
Interest incurred on notes and bonds | $ | $ 103 | $ 62.7 | $ 206.1 | $ 125.9 | |||||
1.625% Notes due 2030 | |||||||||
Debt | |||||||||
Principal amount | £ 400,000,000 | £ 400,000,000 | |||||||
Interest rate (as a percent) | 1.625% | 1.625% | 1.625% | 0.01625% | |||||
1.125% Notes due 2027 | |||||||||
Debt | |||||||||
Principal amount | £ 400,000,000 | £ 400,000,000 | |||||||
Interest rate (as a percent) | 1.125% | 1.125% | 1.125% | 0.01125% | |||||
1.750% Notes due 2033 | |||||||||
Debt | |||||||||
Principal amount | £ 350,000,000 | £ 350,000,000 | |||||||
Interest rate (as a percent) | 1.75% | 1.75% | 1.75% | 0.0175% | |||||
1.875% Notes due 2027 | |||||||||
Debt | |||||||||
Principal amount | £ 250,000,000 | £ 250,000,000 | |||||||
Interest rate (as a percent) | 1.875% | 1.875% | 1.875% | 0.01875% | |||||
2.500% Notes due 2042 | |||||||||
Debt | |||||||||
Principal amount | £ 250,000,000 | £ 250,000,000 | |||||||
Interest rate (as a percent) | 2.50% | 2.50% | 2.50% | 0.025% | |||||
Maximum | |||||||||
Debt | |||||||||
Debt to total adjusted assets ratio (as a percent) | 60% | ||||||||
Secured debt to total adjusted assets ratio (as a percent) | 40% | ||||||||
Minimum | |||||||||
Debt | |||||||||
Debt service coverage ratio | 1.5 | ||||||||
Total unencumbered assets as a percentage of outstanding unsecured debt | 150% |
Notes Payable - Note Repayment
Notes Payable - Note Repayment Narrative (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
Jan. 31, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Debt | |||||
(Gain) loss on extinguishment of debt | $ (127,000) | $ 0 | $ (127,000) | $ 46,473,000 | |
Notes payable | 3.250% Notes due 2022 | |||||
Debt | |||||
Early redemption of notes | $ 950,000,000 | $ 0 | |||
Interest rate (as a percent) | 3.25% | ||||
(Gain) loss on extinguishment of debt | $ 46,500,000 |
Notes Payable - Note Issuances
Notes Payable - Note Issuances (Details) - Notes payable - GBP (£) | Jun. 30, 2022 | Jan. 31, 2022 |
1.875% Notes due 2027 | ||
Debt | ||
Interest rate (as a percent) | 1.875% | 0.01875% |
Principal amount | £ 250,000,000 | £ 250,000,000 |
Price of par value (as a percent) | 99.487% | |
Effective yield (as a percent) | 1.974% | |
2.500% Notes due 2042 | ||
Debt | ||
Interest rate (as a percent) | 2.50% | 0.025% |
Principal amount | £ 250,000,000 | £ 250,000,000 |
Price of par value (as a percent) | 98.445% | |
Effective yield (as a percent) | 2.584% | |
3.160% Notes due 2030 | ||
Debt | ||
Interest rate (as a percent) | 3.16% | |
Principal amount | £ 140,000,000 | |
Price of par value (as a percent) | 100% | |
Effective yield (as a percent) | 3.16% | |
3.180% Notes due 2032 | ||
Debt | ||
Interest rate (as a percent) | 3.18% | |
Principal amount | £ 345,000,000 | |
Price of par value (as a percent) | 100% | |
Effective yield (as a percent) | 3.18% | |
3.390% notes due 2037 | ||
Debt | ||
Interest rate (as a percent) | 3.39% | |
Principal amount | £ 115,000,000 | |
Price of par value (as a percent) | 100% | |
Effective yield (as a percent) | 3.39% |
Issuances of Common Stock - Iss
Issuances of Common Stock - Issuance of Common Stock in Underwritten Public Offering (Details) - USD ($) $ in Thousands | 1 Months Ended | 6 Months Ended | |
Jan. 31, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Class of Stock [Line Items] | |||
Proceeds from share issuances, net | $ 669,600 | $ 1,712,696 | $ 1,119,254 |
Underwritten public offering | |||
Class of Stock [Line Items] | |||
Underwriting discounts | $ 19,300 | ||
Common stock | Underwritten public offering | |||
Class of Stock [Line Items] | |||
Shares of common stock issued (in shares) | 12,075,000 | 0 | |
Common stock | Underwriter option | |||
Class of Stock [Line Items] | |||
Shares of common stock issued (in shares) | 1,575,000 |
Issuances of Common Stock - At-
Issuances of Common Stock - At-the-Market (ATM) Program (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
Jan. 31, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 29, 2022 | |
At-the-Market (ATM) Program | ||||||
Proceeds from common stock offerings, net | $ 669,600 | $ 1,712,696 | $ 1,119,254 | |||
ATM Program | ||||||
At-the-Market (ATM) Program | ||||||
At-the-Market equity distribution program, authorized shares (in shares) | 120,000,000 | 120,000,000 | 69,088,433 | |||
Shares remaining for future issuance (in shares) | 120,000,000 | 120,000,000 | ||||
Proceeds from common stock offerings, net | $ 1,056,600 | $ 450,000 | $ 1,712,700 | $ 449,900 | ||
Forward Sale Confirmations | ||||||
At-the-Market (ATM) Program | ||||||
Shares remaining for future issuance (in shares) | 0 | 0 | ||||
Common stock | ATM Program | ||||||
At-the-Market (ATM) Program | ||||||
Shares of common stock issued (in shares) | 15,899,972 | 6,589,598 | 25,973,181 | 6,589,598 | ||
Gross proceeds | $ 1,067,300 | $ 454,800 | $ 1,727,500 | $ 454,800 | ||
Sales Agents' Commissions | (7,000) | (4,600) | (10,900) | (4,600) | ||
Other Offering Expenses | $ (3,700) | $ (200) | $ (3,900) | $ (300) | ||
Common stock | Forward Sale Confirmations | ||||||
At-the-Market (ATM) Program | ||||||
Shares of common stock issued (in shares) | 15,899,972 | 0 | 15,899,972 | 0 |
Issuances of Common Stock - Div
Issuances of Common Stock - Dividend Reinvestment and Stock Purchase Plan (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Dividend Reinvestment and Stock Purchase Plan | ||||
Gross proceeds | $ 5,731 | $ 5,322 | ||
DRSPP | ||||
Dividend Reinvestment and Stock Purchase Plan | ||||
Dividend Reinvestment and Stock Purchase Plan, authorized shares (in shares) | 26,000,000 | 26,000,000 | ||
Shares remaining for future issuance (in shares) | 11,250,748 | 11,250,748 | ||
Common stock | DRSPP | ||||
Dividend Reinvestment and Stock Purchase Plan | ||||
Shares of common stock issued (in shares) | 43,260 | 39,423 | 84,631 | 82,817 |
Gross proceeds | $ 2,900 | $ 2,700 | $ 5,700 | $ 5,300 |
Common stock | DRSPP waiver approval process | ||||
Dividend Reinvestment and Stock Purchase Plan | ||||
Shares of common stock issued (in shares) | 0 | 0 |
Noncontrolling Interests - Narr
Noncontrolling Interests - Narrative (Details) | 1 Months Ended | 12 Months Ended | |
May 31, 2021 joint_venture | Dec. 31, 2020 joint_venture | Jun. 30, 2022 noncontrolling_interest joint_venture | |
Noncontrolling Interest [Abstract] | |||
Number of noncontrolling interests consolidated | noncontrolling_interest | 4 | ||
Number of development joint ventures | 2 | ||
Number of development joint ventures acquired | 1 | 1 |
Noncontrolling Interests - Chan
Noncontrolling Interests - Change in Carrying Value (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Change in the carrying value of all noncontrolling interests | |||||
Carrying value at beginning of the period | $ 76,826 | ||||
Allocation of net income | $ 615 | $ 289 | 1,217 | $ 585 | |
Carrying value at end of the period | $ 76,267 | $ 76,267 | |||
Realty Income, L.P. | |||||
Change in the carrying value of all noncontrolling interests | |||||
Number of partnership units outstanding (in units) | 1,060,709 | 1,060,709 | 1,060,709 | ||
Noncontrolling interests | |||||
Change in the carrying value of all noncontrolling interests | |||||
Carrying value at beginning of the period | $ 76,826 | ||||
Distributions | (1,776) | ||||
Allocation of net income | 1,217 | ||||
Carrying value at end of the period | $ 76,267 | 76,267 | |||
Noncontrolling interests | Realty Income, L.P. | |||||
Change in the carrying value of all noncontrolling interests | |||||
Carrying value at beginning of the period | 62,416 | ||||
Distributions | (1,624) | ||||
Allocation of net income | 1,095 | ||||
Carrying value at end of the period | 61,887 | 61,887 | |||
Noncontrolling interests | Other Noncontrolling Interests | |||||
Change in the carrying value of all noncontrolling interests | |||||
Carrying value at beginning of the period | 14,410 | ||||
Distributions | (152) | ||||
Allocation of net income | 122 | ||||
Carrying value at end of the period | $ 14,380 | $ 14,380 |
Noncontrolling Interests - Vari
Noncontrolling Interests - Variable Interest Entities (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Variable interest entity | ||
Net real estate | $ 33,319,240 | $ 31,959,130 |
Total assets | 44,951,918 | 43,137,502 |
Total liabilities | 18,549,039 | 18,008,102 |
Primary Beneficiary | ||
Variable interest entity | ||
Net real estate | 705,322 | 688,229 |
Total assets | 804,027 | 795,670 |
Total liabilities | $ 59,033 | $ 57,057 |
Financial Instruments and Fai_3
Financial Instruments and Fair Value Measurements - Financial Instruments Not Carried at Fair Value (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Fair value of financial assets and liabilities | |||||
Provisions for impairment on real estate | $ 7,691 | $ 17,246 | $ 14,729 | $ 19,966 | |
Buildings and improvements | 26,101,185 | 26,101,185 | $ 25,155,178 | ||
Carrying value | |||||
Fair value of financial assets and liabilities | |||||
Mortgages payable assumed in connection with acquisitions | 928,900 | 928,900 | 1,114,100 | ||
Notes and bonds payable | 13,390,300 | 13,390,300 | 12,257,300 | ||
Estimated fair value | |||||
Fair value of financial assets and liabilities | |||||
Mortgages payable assumed in connection with acquisitions | 906,600 | 906,600 | 1,154,700 | ||
Notes and bonds payable | 12,377,800 | 12,377,800 | 13,114,500 | ||
Mortgages payable | |||||
Fair value of financial assets and liabilities | |||||
Unamortized net premiums | 19,200 | 19,200 | 28,700 | ||
Deferred financing costs | 1,000 | 1,000 | 790 | ||
Notes and bonds payable | |||||
Fair value of financial assets and liabilities | |||||
Unamortized net premiums | 257,000 | 257,000 | 295,500 | ||
Deferred financing costs | $ 58,700 | $ 58,700 | $ 53,100 |
Financial Instruments and Fai_4
Financial Instruments and Fair Value Measurements - Items Measured at Fair Value on a Non-Recurring Basis (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 USD ($) property | Jun. 30, 2021 USD ($) property | Jun. 30, 2022 USD ($) property | Jun. 30, 2021 USD ($) property | |
Provisions for impairment | ||||
Less: total provisions for impairment | $ (7,691) | $ (17,246) | $ (14,729) | $ (19,966) |
Number of impaired properties held for sale | property | 9 | 1 | 23 | 1 |
Number of impaired properties held for investment | property | 3 | 5 | 3 | 6 |
Number of impaired properties sold | property | 32 | 31 | 49 | 44 |
Properties impaired 2022 | ||||
Provisions for impairment | ||||
Carrying value prior to impairment | $ 64,500 | $ 45,600 | $ 98,200 | $ 59,200 |
Less: total provisions for impairment | (7,700) | (17,200) | (14,700) | (20,000) |
Carrying value after impairment | $ 56,800 | $ 28,400 | $ 83,500 | $ 39,200 |
Financial Instruments and Fai_5
Financial Instruments and Fair Value Measurements - Narrative (Details) £ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||||
Jun. 30, 2022 USD ($) derivative | Jun. 30, 2022 USD ($) derivative | Jun. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) derivative | Jun. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | May 31, 2019 USD ($) derivative | May 31, 2019 GBP (£) derivative | Oct. 01, 2018 USD ($) | |
Derivative [Line Items] | |||||||||
Notional Amount | $ 1,760,700,000 | $ 1,760,700,000 | $ 1,760,700,000 | $ 2,731,900,000 | |||||
Amount reclassified from AOCI | 19,374,000 | $ (2,813,000) | 22,958,000 | $ (6,505,000) | |||||
Term loans | Term loan due March 2024 | |||||||||
Derivative [Line Items] | |||||||||
Principal amount | $ 250,000,000 | ||||||||
Cash flow hedge | Designated as hedging instrument | |||||||||
Derivative [Line Items] | |||||||||
Notional Amount | $ 927,500,000 | 927,500,000 | $ 927,500,000 | 1,092,400,000 | |||||
Cross-currency swaps | |||||||||
Derivative [Line Items] | |||||||||
Number of derivative instruments terminated | derivative | 4 | ||||||||
Amount reclassified from AOCI | $ 20,000,000 | ||||||||
Cross-currency swaps | Cash flow hedge | |||||||||
Derivative [Line Items] | |||||||||
Number of derivative instruments | derivative | 4 | 4 | |||||||
Notional Amount | $ 166,000,000 | £ 130 | |||||||
Cross-currency swaps | Cash flow hedge | Designated as hedging instrument | |||||||||
Derivative [Line Items] | |||||||||
Number of derivative instruments | derivative | 0 | 0 | 0 | ||||||
Notional Amount | $ 0 | $ 0 | $ 0 | 166,300,000 | |||||
Interest rate swap | |||||||||
Derivative [Line Items] | |||||||||
Interest rate swap unrealized loss expected to be reclassified within next twelve months | $ 2,700,000 | $ 2,700,000 | $ 2,700,000 | ||||||
Interest rate swap | Cash flow hedge | |||||||||
Derivative [Line Items] | |||||||||
Number of derivative instruments | derivative | 1 | 1 | 1 | ||||||
Interest rate swap | Cash flow hedge | Designated as hedging instrument | |||||||||
Derivative [Line Items] | |||||||||
Number of derivative instruments | derivative | 1 | 1 | 1 | ||||||
Notional Amount | $ 250,000,000 | $ 250,000,000 | $ 250,000,000 | 250,000,000 | |||||
Foreign currency forwards | |||||||||
Derivative [Line Items] | |||||||||
Cross-currency swap unrealized gains expected to be reclassified within next twelve months | $ (8,500,000) | $ (8,500,000) | $ (8,500,000) | ||||||
Foreign currency forwards | Cash flow hedge | Designated as hedging instrument | |||||||||
Derivative [Line Items] | |||||||||
Number of derivative instruments | derivative | 36 | 36 | 36 | ||||||
Notional Amount | $ 177,500,000 | $ 177,500,000 | $ 177,500,000 | 176,100,000 | |||||
Foreign currency collars | Not designated as hedging instrument | Maximum | |||||||||
Derivative [Line Items] | |||||||||
Remaining maturities | 5 months | ||||||||
Currency exchange swaps | Not designated as hedging instrument | |||||||||
Derivative [Line Items] | |||||||||
Number of derivative instruments | derivative | 5 | 5 | 5 | ||||||
Notional Amount | $ 833,200,000 | $ 833,200,000 | $ 833,200,000 | $ 1,639,500,000 | |||||
Currency exchange swaps | Not designated as hedging instrument | Maximum | |||||||||
Derivative [Line Items] | |||||||||
Remaining maturities | 3 months | ||||||||
Currency exchange swaps | Not designated as hedging instrument | Minimum | |||||||||
Derivative [Line Items] | |||||||||
Remaining maturities | 1 month |
Financial Instruments and Fai_6
Financial Instruments and Fair Value Measurements - Unrealized Gain (Loss) on Derivatives in Other Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Unrealized gain (loss) on derivatives, net | $ 33,454 | $ (10,833) | $ 77,144 | $ 35,576 |
Cross-currency swaps | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Unrealized gain (loss) on derivatives, net | (6,986) | 5,598 | (5,091) | 3,978 |
Interest rate swap | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Unrealized gain (loss) on derivatives, net | 30,386 | (20,353) | 69,391 | 27,676 |
Foreign currency forwards | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Unrealized gain (loss) on derivatives, net | $ 10,054 | $ 3,922 | $ 12,844 | $ 3,922 |
Financial Instruments and Fai_7
Financial Instruments and Fair Value Measurements - Unrealized Gain (Loss) on Derivatives and Amounts Reclassified (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Gain (loss) on the settlement of designated derivatives reclassified from AOCI | $ 19,374 | $ (2,813) | $ 22,958 | $ (6,505) |
Currency swaps | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Gain (loss) on the settlement of designated derivatives reclassified from AOCI | 20,000 | |||
Currency swaps | Foreign currency and derivative gain, net | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Gain (loss) on the settlement of designated derivatives reclassified from AOCI | 21,527 | (235) | 27,641 | (1,386) |
Interest rate swap | Interest expense | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Gain (loss) on the settlement of designated derivatives reclassified from AOCI | $ (2,153) | $ (2,578) | $ (4,683) | $ (5,119) |
Financial Instruments and Fai_8
Financial Instruments and Fair Value Measurements - Foreign Currency and Derivative Gains (Losses), Net (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Realized foreign currency and derivative gain (loss), net: | ||||
Gain on the settlement of undesignated derivatives | $ 79,308 | $ 0 | $ 76,628 | $ 0 |
Gain (loss) on the settlement of designated derivatives reclassified from AOCI | 21,527 | (235) | 27,641 | (1,386) |
Gain (loss) on the settlement of transactions with third parties | 1,004 | (104) | 952 | (104) |
Total realized foreign currency and derivative gain (loss), net | 101,839 | (339) | 105,221 | (1,490) |
Unrealized foreign currency and derivative gain (loss), net: | ||||
Gain on the change in fair value of undesignated derivatives | 37,274 | 0 | 59,995 | 3,724 |
Gain (loss) on remeasurement of certain assets and liabilities | (131,633) | 739 | (158,326) | (1,030) |
Total unrealized foreign currency and derivative gain (loss), net | (94,359) | 739 | (98,331) | 2,694 |
Total foreign currency and derivative gain, net | $ 7,480 | $ 400 | $ 6,890 | $ 1,204 |
Financial Instruments and Fai_9
Financial Instruments and Fair Value Measurements - Summary of Derivative Financial Instruments (Details) £ in Millions, $ in Millions | Jun. 30, 2022 USD ($) derivative Rate | Dec. 31, 2021 USD ($) | Feb. 29, 2020 derivative | May 31, 2019 GBP (£) derivative | May 31, 2019 USD ($) derivative |
Derivative [Line Items] | |||||
Notional Amount | $ 1,760.7 | $ 2,731.9 | |||
Fair Value - asset (liability) | 105.1 | (41.1) | |||
Designated as hedging instrument | Cash flow hedge | |||||
Derivative [Line Items] | |||||
Notional Amount | 927.5 | 1,092.4 | |||
Fair Value - asset (liability) | $ 68.2 | (26.4) | |||
Interest rate swap | Cash flow hedge | |||||
Derivative [Line Items] | |||||
Number of Instruments | derivative | 1 | ||||
Interest rate swap | Designated as hedging instrument | Cash flow hedge | |||||
Derivative [Line Items] | |||||
Number of Instruments | derivative | 1 | ||||
Notional Amount | $ 250 | 250 | |||
Weighted Average Strike Rate | 2.88% | ||||
Fair Value - asset (liability) | $ 0.4 | (11.9) | |||
Cross-currency swaps | Cash flow hedge | |||||
Derivative [Line Items] | |||||
Number of Instruments | derivative | 4 | 4 | |||
Notional Amount | £ 130 | $ 166 | |||
Cross-currency swaps | Designated as hedging instrument | Cash flow hedge | |||||
Derivative [Line Items] | |||||
Number of Instruments | derivative | 0 | ||||
Notional Amount | $ 0 | 166.3 | |||
Fair Value - asset (liability) | $ 0 | (13.8) | |||
GBP cross-currency swaps | Designated as hedging instrument | Cash flow hedge | |||||
Derivative [Line Items] | |||||
Number of Instruments | derivative | 4 | ||||
Notional Amount | $ 166.3 | ||||
Foreign currency forwards | Designated as hedging instrument | Cash flow hedge | |||||
Derivative [Line Items] | |||||
Number of Instruments | derivative | 36 | ||||
Notional Amount | $ 177.5 | 176.1 | |||
Fair Value - asset (liability) | $ 20.4 | 7.6 | |||
Weighted average forward exchange rate | Rate | 140% | ||||
Forward-starting swaps | Designated as hedging instrument | Cash flow hedge | |||||
Derivative [Line Items] | |||||
Number of Instruments | derivative | 6 | ||||
Forward-starting swap, derivative | Designated as hedging instrument | Cash flow hedge | |||||
Derivative [Line Items] | |||||
Number of Instruments | derivative | 4 | ||||
Notional Amount | $ 300 | 300 | |||
Weighted Average Strike Rate | 1.86% | ||||
Fair Value - asset (liability) | $ 31.2 | (3.2) | |||
Forward-starting swaps, hybrid debt | Designated as hedging instrument | Cash flow hedge | |||||
Derivative [Line Items] | |||||
Number of Instruments | derivative | 2 | ||||
Notional Amount | $ 200 | 200 | |||
Weighted Average Strike Rate | 1.93% | ||||
Fair Value - asset (liability) | $ 16.2 | (5.1) | |||
Currency exchange swaps | Not designated as hedging instrument | |||||
Derivative [Line Items] | |||||
Number of Instruments | derivative | 5 | ||||
Notional Amount | $ 833.2 | 1,639.5 | |||
Fair Value - asset (liability) | $ 36.9 | $ (14.7) | |||
GBP currency exchange swap | Not designated as hedging instrument | |||||
Derivative [Line Items] | |||||
Number of Instruments | derivative | 3 | ||||
Notional Amount | $ 564.9 | ||||
Weighted average forward exchange rate | Rate | 126% | ||||
EUR currency exchange swap | Not designated as hedging instrument | |||||
Derivative [Line Items] | |||||
Number of Instruments | derivative | 2 | ||||
Notional Amount | $ 268.3 | ||||
Weighted average forward exchange rate | Rate | 111% | ||||
Treasury rate locks | Designated as hedging instrument | Cash flow hedge | |||||
Derivative [Line Items] | |||||
Number of Instruments | derivative | 5 |
Operating Leases (Details)
Operating Leases (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 USD ($) property state | Jun. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) property state | Jun. 30, 2021 USD ($) | |
Operating Leases | ||||
Number of properties owned | 11,427 | 11,427 | ||
Number of U.S. states where operating | state | 50 | 50 | ||
Percentage rent received | $ | $ 2,200 | $ 596 | $ 6,000 | $ 1,600 |
Single-client properties | ||||
Operating Leases | ||||
Number of properties owned | 11,289 | 11,289 | ||
Single-client properties as percentage of total properties | 98.80% | 98.80% | ||
Properties available for lease or sale | ||||
Operating Leases | ||||
Number of properties owned | 132 | 132 |
Distributions Paid and Payabl_2
Distributions Paid and Payable (Details) - $ / shares | 1 Months Ended | 6 Months Ended | |||||||||||||
Jul. 31, 2022 | Jun. 30, 2022 | May 31, 2022 | Apr. 30, 2022 | Mar. 31, 2022 | Feb. 28, 2022 | Jan. 31, 2022 | Jun. 30, 2021 | May 31, 2021 | Apr. 30, 2021 | Mar. 31, 2021 | Feb. 28, 2021 | Jan. 31, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Distributions Paid and Payable | |||||||||||||||
Distributions paid per common share (in dollars per share) | $ 0.2470 | $ 0.2470 | $ 0.2470 | $ 0.2465 | $ 0.2465 | $ 0.2465 | $ 0.2350 | $ 0.2350 | $ 0.2350 | $ 0.2345 | $ 0.2345 | $ 0.2345 | $ 1.4805 | $ 1.4085 | |
Distributions payable (in dollars per share) | $ 0.2475 | $ 0.2475 | |||||||||||||
Subsequent event | |||||||||||||||
Distributions Paid and Payable | |||||||||||||||
Distributions paid per common share (in dollars per share) | $ 0.2475 |
Net Income per Common Share (De
Net Income per Common Share (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Earnings Per Share [Abstract] | ||||
Weighted average shares used for the basic net income per share computation (in shares) | 601,672,201 | 374,236,424 | 597,778,173 | 372,879,165 |
Incremental shares from share-based compensation (in shares) | 358,465 | 104,599 | 362,529 | 92,579 |
Weighted average shares used for diluted net income per share computation (in shares) | 602,030,666 | 374,341,023 | 598,140,702 | 372,971,744 |
Unvested shares from share-based compensation | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from computation (in shares) | 16,039 | 161,359 | 16,437 | 148,342 |
Common units convertible to common shares | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from computation (in shares) | 1,060,709 | 463,119 | 1,060,709 | 463,119 |
Supplemental Disclosures of C_3
Supplemental Disclosures of Cash Flow Information - Summary (Details) $ in Thousands, £ in Millions | 6 Months Ended | ||
Jun. 30, 2022 USD ($) | Jun. 30, 2021 GBP (£) | Jun. 30, 2021 USD ($) | |
Supplemental disclosures: | |||
Cash paid for interest | $ 229,929 | $ 139,389 | |
Cash paid for income taxes | 30,091 | 9,726 | |
Mortgages | |||
Non-cash activities: | |||
Mortgages assumed at fair value | 45,079 | £ 31 | 43,779 |
Derivative | |||
Non-cash activities: | |||
Net increase in fair value of derivatives | $ 146,181 | $ 60,414 |
Supplemental Disclosures of C_4
Supplemental Disclosures of Cash Flow Information - Reconciliation of Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 | Jun. 30, 2021 | Dec. 31, 2020 |
Reconciliation of cash,cash equivalents, and restricted cash | ||||
Cash and cash equivalents shown in the consolidated balance sheets | $ 172,849 | $ 258,579 | $ 231,164 | |
Restricted escrow deposits | 100,098 | 68,541 | 34,636 | |
Impounds related to mortgages payable | 718 | 5,249 | 1,185 | |
Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows | $ 273,665 | $ 332,369 | $ 266,985 | $ 850,679 |
Common Stock Incentive Plan - S
Common Stock Incentive Plan - Summary (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
General and administrative expense | ||||
Common Stock Incentive Plan | ||||
Share-based compensation costs recognized | $ 6.6 | $ 4.5 | $ 11.6 | $ 8.2 |
Common Stock Incentive Plan - R
Common Stock Incentive Plan - Restricted Stock (Details) - Restricted stock - USD ($) $ in Millions | 1 Months Ended | 6 Months Ended |
May 31, 2022 | Jun. 30, 2022 | |
Common Stock Incentive Plan | ||
Shares granted in period (in shares) | 153,105 | |
Vesting period (in years) | 4 years | |
Remaining unamortized share-based compensation expense | $ 14.6 | |
Independent directors | ||
Common Stock Incentive Plan | ||
Shares granted in period (in shares) | 40,000 | |
Independent directors | Vest immediately | ||
Common Stock Incentive Plan | ||
Shares granted in period (in shares) | 20,000 | |
Independent directors | Vest over service period | ||
Common Stock Incentive Plan | ||
Shares granted in period (in shares) | 20,000 | |
Vesting period (in years) | 3 years |
Common Stock Incentive Plan - P
Common Stock Incentive Plan - Performance Shares and Restricted Stock Units (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2022 USD ($) shares | |
Performance shares and Restricted stock units | |
Common Stock Incentive Plan | |
Remaining unamortized share-based compensation expense | $ | $ 24 |
Performance shares | |
Common Stock Incentive Plan | |
Shares granted in period (in shares) | 154,840 |
Vesting rights percentage | 50% |
Vesting period (in years) | 3 years |
Restricted stock units | |
Common Stock Incentive Plan | |
Shares granted in period (in shares) | 24,456 |
Vesting period (in years) | 4 years |
Common Stock Incentive Plan -_2
Common Stock Incentive Plan - Stock Options (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Common Stock Incentive Plan | ||
Options granted (in shares) | 0 | |
Remaining unamortized share-based compensation expense | $ 0 | |
Stock options | ||
Common Stock Incentive Plan | ||
Share-based compensation costs recognized | $ 47,000 | $ 0 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | Jun. 30, 2022 USD ($) |
Re-leasing costs, recurring capital expenditures, and non-recurring building improvements | |
Commitments and Contingencies [Line Items] | |
Other commitments | $ 49 |
Construction contracts | |
Commitments and Contingencies [Line Items] | |
Other commitments | $ 678.6 |
Subsequent Events (Details)
Subsequent Events (Details) | 1 Months Ended | 3 Months Ended | |
Jul. 31, 2022 USD ($) property $ / shares | Sep. 30, 2022 USD ($) | Jun. 30, 2022 USD ($) property | |
Subsequent Event [Line Items] | |||
Maximum aggregate capacity of commercial paper program | $ 1,000,000,000 | ||
Industrial Partnerships | |||
Subsequent Event [Line Items] | |||
Number of Properties | property | 7 | ||
Forecast | Industrial Partnerships | |||
Subsequent Event [Line Items] | |||
Proceeds from sale of properties | $ 905,000,000 | ||
Forecast | Industrial Partnerships | |||
Subsequent Event [Line Items] | |||
Proceeds related to sale of equity interest | $ 120,000,000 | ||
Subsequent event | |||
Subsequent Event [Line Items] | |||
Common stock dividend declared (in dollars per share) | $ / shares | $ 0.2475 | ||
Maximum aggregate capacity of commercial paper program | $ 1,500,000,000 | ||
Subsequent event | Commercial paper | Euro Unsecured Commercial Paper Program | |||
Subsequent Event [Line Items] | |||
Maximum aggregate capacity of commercial paper program | $ 1,500,000,000 | ||
Subsequent event | Industrial Partnerships | |||
Subsequent Event [Line Items] | |||
Number of properties sold | property | 6 | ||
Number of Properties | property | 7 |