Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2019 | Oct. 29, 2019 | |
Cover page. | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2019 | |
Document Transition Report | false | |
Entity File Number | 1-13374 | |
Entity Registrant Name | REALTY INCOME CORPORATION | |
Entity Central Index Key | 0000726728 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
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 | |
Title of 12(b) Security | Common Stock, $0.01 Par Value | |
Trading Symbol | O | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 325,919,119 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Real estate, at cost: | ||
Land | $ 5,085,951 | $ 4,682,660 |
Buildings and improvements | 13,062,209 | 11,858,806 |
Total real estate, at cost | 18,148,160 | 16,541,466 |
Less accumulated depreciation and amortization | (3,017,204) | (2,714,534) |
Net real estate held for investment | 15,130,956 | 13,826,932 |
Real estate held for sale, net | 15,770 | 16,585 |
Net real estate | 15,146,726 | 13,843,517 |
Cash and cash equivalents | 236,064 | 10,387 |
Accounts receivable | 163,444 | 144,991 |
Lease intangible assets, net | 1,313,798 | 1,199,597 |
Goodwill | 14,503 | 14,630 |
Other assets, net | 305,369 | 47,361 |
Total assets | 17,179,904 | 15,260,483 |
LIABILITIES AND EQUITY | ||
Distributions payable | 74,735 | 67,789 |
Accounts payable and accrued expenses | 163,154 | 133,765 |
Lease intangible liabilities, net | 326,172 | 310,866 |
Other liabilities | 260,357 | 127,109 |
Line of credit payable | 0 | 252,000 |
Term loans, net | 498,936 | 568,610 |
Mortgages payable, net | 282,053 | 302,569 |
Notes payable, net | 6,256,400 | 5,376,797 |
Total liabilities | 7,861,807 | 7,139,505 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Common stock and paid in capital, par value $0.01 per share, 740,200,000 shares authorized, 325,910,281 shares issued and outstanding as of September 30, 2019 and 370,100,000 shares authorized, 303,742,090 shares issued and outstanding as of December 31, 2018 | 12,294,138 | 10,754,495 |
Distributions in excess of net income | (2,987,120) | (2,657,655) |
Accumulated other comprehensive loss | (13,599) | (8,098) |
Total stockholders’ equity | 9,293,419 | 8,088,742 |
Noncontrolling interests | 24,678 | 32,236 |
Total equity | 9,318,097 | 8,120,978 |
Total liabilities and equity | $ 17,179,904 | $ 15,260,483 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2019 | Dec. 31, 2018 |
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) | 740,200,000 | 370,100,000 |
Common stock and paid in capital, issued (in shares) | 325,910,281 | 303,742,090 |
Common stock and paid in capital, outstanding (in shares) | 325,910,281 | 303,742,090 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
REVENUE | ||||
Rental (including reimbursable) | $ 372,312 | $ 337,252 | $ 1,090,601 | $ 980,365 |
Other | 1,935 | 829 | 3,461 | 4,897 |
Total revenue | 374,247 | 338,081 | 1,094,062 | 985,262 |
EXPENSES | ||||
Depreciation and amortization | 149,424 | 136,967 | 437,367 | 402,069 |
Interest | 73,410 | 69,342 | 215,918 | 195,385 |
General and administrative | 16,460 | 16,332 | 50,153 | 49,970 |
Property (including reimbursable) | 20,354 | 15,806 | 63,332 | 48,594 |
Income taxes | 1,822 | 1,302 | 4,422 | 3,733 |
Provisions for impairment | 13,503 | 6,862 | 31,236 | 25,034 |
Total expenses | 274,973 | 246,611 | 802,428 | 724,785 |
Gain on sales of real estate | 1,674 | 7,813 | 15,828 | 18,818 |
Foreign currency and derivative gains, net | 327 | 0 | 463 | 0 |
Net income | 101,275 | 99,283 | 307,925 | 279,295 |
Net income attributable to noncontrolling interests | (226) | (284) | (740) | (753) |
Net income available to common stockholders | $ 101,049 | $ 98,999 | $ 307,185 | $ 278,542 |
Amounts available to common stockholders per common share: | ||||
Net income, basic (in dollars per share) | $ 0.32 | $ 0.34 | $ 0.99 | $ 0.97 |
Net income, diluted (in dollars per share) | $ 0.32 | $ 0.34 | $ 0.98 | $ 0.97 |
Weighted average common shares outstanding: | ||||
Basic (in shares) | 319,945,932 | 290,664,368 | 311,556,279 | 286,599,191 |
Diluted (in shares) | 320,263,017 | 291,207,186 | 311,865,410 | 287,105,285 |
Other comprehensive income: | ||||
Net income available to common stockholders | $ 101,049 | $ 98,999 | $ 307,185 | $ 278,542 |
Foreign currency translation adjustment | (359) | 0 | (365) | 0 |
Unrealized gain (loss) on derivatives, net | 1,357 | 0 | (5,136) | 0 |
Comprehensive income available to common stockholders | $ 102,047 | $ 98,999 | $ 301,684 | $ 278,542 |
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 loss | Noncontrolling interests |
Balance at Dec. 31, 2017 | $ 7,390,708 | $ 7,371,501 | $ 9,624,264 | $ (2,252,763) | $ 0 | $ 19,207 | |
Balance (in shares) at Dec. 31, 2017 | 284,213,685 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | 279,295 | 278,542 | 278,542 | 753 | |||
Distributions paid and payable | (571,088) | (569,631) | (569,631) | (1,457) | |||
Share issuances, net of costs | 587,566 | 587,566 | 587,566 | ||||
Share issuances, net of costs (in shares) | 10,761,688 | ||||||
Issuance of common partnership units and contributions by noncontrolling interests | 18,848 | 18,848 | |||||
Redemption of common units | 0 | 2,829 | 2,829 | (2,829) | |||
Redemption of common units (in shares) | 88,182 | ||||||
Reallocation of equity | 0 | (492) | (492) | 492 | |||
Share-based compensation, net | 5,925 | 5,925 | 5,925 | ||||
Share-based compensation, net (in shares) | 81,977 | ||||||
Balance at Sep. 30, 2018 | 7,711,254 | 7,676,240 | 10,220,092 | (2,543,852) | 0 | 35,014 | |
Balance (in shares) at Sep. 30, 2018 | 295,145,532 | ||||||
Balance at Jun. 30, 2018 | 7,512,469 | 7,475,750 | 9,925,543 | (2,449,793) | 0 | 36,719 | |
Balance (in shares) at Jun. 30, 2018 | 290,024,275 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | 99,283 | 98,999 | 98,999 | 284 | |||
Distributions paid and payable | (193,686) | (193,058) | (193,058) | (628) | |||
Share issuances, net of costs | 289,451 | 289,451 | 289,451 | ||||
Share issuances, net of costs (in shares) | 5,093,354 | ||||||
Redemption of common units | 0 | 1,361 | 1,361 | (1,361) | |||
Redemption of common units (in shares) | 28,182 | ||||||
Share-based compensation, net | 3,737 | 3,737 | 3,737 | ||||
Share-based compensation, net (in shares) | (279) | ||||||
Balance at Sep. 30, 2018 | 7,711,254 | 7,676,240 | 10,220,092 | (2,543,852) | 0 | 35,014 | |
Balance (in shares) at Sep. 30, 2018 | 295,145,532 | ||||||
Balance at Dec. 31, 2018 | 8,120,978 | 8,088,742 | 10,754,495 | (2,657,655) | (8,098) | 32,236 | |
Balance (in shares) at Dec. 31, 2018 | 303,742,090 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | 307,925 | 307,185 | 307,185 | 740 | |||
Other comprehensive income (loss) | (5,501) | (5,501) | (5,501) | ||||
Distributions paid and payable | (637,630) | (636,650) | (636,650) | (980) | |||
Share issuances, net of costs | 1,540,930 | 1,540,930 | 1,540,930 | ||||
Share issuances, net of costs (in shares) | 22,109,297 | ||||||
Issuance of common partnership units and contributions by noncontrolling interests | 6,286 | 6,286 | |||||
Redemption of common units | (21,123) | (6,866) | (6,866) | (14,257) | |||
Reallocation of equity | 0 | (653) | (653) | 653 | |||
Share-based compensation, net | 6,232 | 6,232 | 6,232 | ||||
Share-based compensation, net (in shares) | 58,894 | ||||||
Balance at Sep. 30, 2019 | 9,318,097 | 9,293,419 | 12,294,138 | (2,987,120) | (13,599) | 24,678 | |
Balance (in shares) at Sep. 30, 2019 | 325,910,281 | ||||||
Balance at Jun. 30, 2019 | 8,862,594 | 8,837,502 | 11,722,036 | (2,869,937) | (14,597) | 25,092 | |
Balance (in shares) at Jun. 30, 2019 | 318,218,713 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | 101,275 | 101,049 | 101,049 | 226 | |||
Other comprehensive income (loss) | 998 | 998 | 998 | ||||
Distributions paid and payable | (218,624) | (218,232) | (218,232) | (392) | |||
Share issuances, net of costs | 569,617 | 569,617 | 569,617 | ||||
Share issuances, net of costs (in shares) | 7,693,184 | ||||||
Redemption of common units | (898) | 3 | 3 | (901) | |||
Reallocation of equity | 0 | (653) | (653) | 653 | |||
Share-based compensation, net | 3,135 | 3,135 | 3,135 | ||||
Share-based compensation, net (in shares) | (1,616) | ||||||
Balance at Sep. 30, 2019 | $ 9,318,097 | $ 9,293,419 | $ 12,294,138 | $ (2,987,120) | $ (13,599) | $ 24,678 | |
Balance (in shares) at Sep. 30, 2019 | 325,910,281 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income | $ 307,925 | $ 279,295 |
Adjustments to net income: | ||
Depreciation and amortization | 437,367 | 402,069 |
Amortization of share-based compensation | 10,478 | 12,527 |
Non-cash revenue adjustments | (6,508) | (5,781) |
Amortization of net premiums on mortgages payable | (1,061) | (1,167) |
Amortization of deferred financing costs | 6,378 | 5,337 |
Loss (gain) on interest rate swaps | 2,058 | (3,064) |
Foreign currency and derivative gains, net | (463) | 0 |
Gain on sales of real estate | (15,828) | (18,818) |
Provisions for impairment on real estate | 31,236 | 25,034 |
Change in assets and liabilities | ||
Accounts receivable and other assets | (7,886) | (1,540) |
Accounts payable, accrued expenses and other liabilities | 14,010 | (4,050) |
Net cash provided by operating activities | 777,706 | 689,842 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Investment in real estate | (2,019,666) | (1,437,377) |
Improvements to real estate, including leasing costs | (15,834) | (22,432) |
Proceeds from sales of real estate | 72,601 | 83,024 |
Insurance proceeds received | 0 | 7,121 |
Collection of loans receivable | 0 | 5,267 |
Non-refundable escrow deposits | (7,173) | (3,275) |
Net cash used in investing activities | (1,970,072) | (1,367,672) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Cash distributions to common stockholders | (629,658) | (564,747) |
Borrowings on line of credit | 1,619,282 | 1,670,000 |
Payments on line of credit | (1,871,282) | (1,006,000) |
Principal payment on term loan | (70,000) | (125,866) |
Proceeds from notes and bonds payable issued | 895,774 | 497,500 |
Principal payment on notes payable | 0 | (350,000) |
Principal payments on mortgages payable | (19,495) | (14,608) |
Proceeds from common stock offerings, net | 845,061 | 0 |
Proceeds from dividend reinvestment and stock purchase plan | 6,259 | 6,966 |
Proceeds from At-the-Market (ATM) program, net | 689,641 | 588,860 |
Redemption of common units | (21,123) | 0 |
Distributions to noncontrolling interests | (1,027) | (1,391) |
Debt issuance costs | (7,996) | (4,436) |
Other items, including shares withheld upon vesting | (4,245) | (14,862) |
Net cash provided by financing activities | 1,431,191 | 681,416 |
Effect of exchange rate changes on cash and cash equivalents | (607) | 0 |
Net increase in cash, cash equivalents and restricted cash | 238,218 | 3,586 |
Cash, cash equivalents and restricted cash, beginning of period | 21,071 | 12,142 |
Cash, cash equivalents and restricted cash, end of period | $ 259,289 | $ 15,728 |
Management Statement
Management Statement | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Management Statement | Management Statement 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, 2018 , which are included in our 2018 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. Unless otherwise indicated, all dollar amounts are expressed in United States (U.S.) dollars. At September 30, 2019 we owned 5,964 properties, located in 49 U.S. states, Puerto Rico and the United Kingdom (U.K.), consisting of over 100.5 million leasable square feet. |
Summary of Significant Accounti
Summary of Significant Accounting Policies and Procedures and Recent Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies and Procedures and Recent Accounting Pronouncements | Summary of Significant Accounting Policies and Procedures and Recent Accounting Pronouncements A. The accompanying consolidated financial statements include the accounts of Realty Income and other subsidiaries for which we make operating and financial decisions (i.e., control), after elimination of all material intercompany balances and transactions. We consolidate entities that we control and record a noncontrolling interest for the portion that we do not own. Noncontrolling interest that was created or assumed as part of a business combination was recognized at fair value as of the date of the transaction (see note 10). We have no unconsolidated investments. B. 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, we generally will not be required to pay federal corporate income taxes on such income. Accordingly, no provision has been made for federal income taxes in the accompanying consolidated financial statements, except for federal income taxes of our taxable REIT subsidiaries. The income taxes recorded on our consolidated statements of income and comprehensive income represent amounts paid by Realty Income and its subsidiaries for city and state income and franchise taxes and for U.K. income taxes. C. We assign a portion of goodwill to our applicable property sales, which results in a reduction of the carrying amount of our goodwill. In order to allocate goodwill to the carrying amount of properties that we sell, we utilize a relative fair value approach based on the original methodology for assigning goodwill. As we sell properties, our goodwill will likely continue to gradually decrease over time. Based on our analysis of goodwill during the second quarters of 2019 and 2018, respectively, we determined there was no impairment on our existing goodwill. D. In February 2016, the FASB issued ASU 2016-02 (Topic 842, Leases ), which amended Topic 840, Leases . Under this amended topic, the accounting applied by a lessor is largely unchanged from that applied under Topic 840, Leases . The large majority of our leases remain classified as operating leases, and we continue to recognize lease income on a generally straight-line basis over the lease term. Although primarily a lessor, we are also a lessee under several ground lease arrangements. We adopted this standard effective as of January 1, 2019 using the effective date method, and elected the practical expedients available for implementation under the standard. As a result, we recognize lease obligations for ground leases designated as operating and financing leases with corresponding right of use assets and liabilities (see note 3). Additionally, above-market rents on certain of our leases under which we are a lessor are accounted for as financing receivables amortizing over the lease term, and below-market rents on certain of our leases under which we are a lessor are accounted for as prepaid rent (see note 3). Also, as a result of the adoption of this standard, tenant reimbursable revenue and property expenses are now presented on a gross basis as both tenant reimbursement revenue included in rental revenue, and as a reimbursable expense included in property expenses, respectively, on our consolidated statements of income and comprehensive income. Property taxes and insurance paid directly by the lessee to a third party will continue to be presented on a net basis. These presentation changes had no impact on our results of operations. As a result, there was no restatement of prior issued financial statements and, similarly, no cumulative effect adjustment to opening equity; however, we have elected to aggregate prior period tenant reimbursement revenue within rental revenue to be consistent with the current period presentation within the statements of income and comprehensive income. E. In connection with our acquisition of properties in the U.K. during the second quarter of 2019, we adopted accounting guidance applicable under Topic 830, Foreign Currency Matters . The functional currency of the U.K. subsidiaries holding the acquired properties is the British pound sterling. Assets and liabilities from our foreign-owned subsidiaries are translated into U.S. dollars using the exchange rate in effect at the consolidated balance sheet date. Equity accounts are translated at historical rates, except for retained earnings, whereas the impact is calculated via the income statement translation process. Revenue and expense accounts are translated using the weighted average exchange rates during the period. The cumulative translation adjustments from our U.K. subsidiaries are recorded in accumulated other comprehensive income in the consolidated statements of equity. We have intercompany debt denominated in the British pound sterling, which is the same currency as the functional currency of our U.K. subsidiaries. When this debt is remeasured against the functional currency of the Company, which is the U.S. dollar, a gain or loss can result. Such transaction gains or losses realized upon settlement of a foreign currency transaction, which may include intercompany transactions, are included in net income under the caption ‘Foreign currency and derivative gains (losses), net'. |
Supplemental Detail for Certain
Supplemental Detail for Certain Components of Consolidated Balance Sheets | 9 Months Ended |
Sep. 30, 2019 | |
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. Lease intangible assets, net, consist of the following at: September 30, 2019 December 31, 2018 In-place leases $ 1,439,816 $ 1,321,979 Accumulated amortization of in-place leases (613,053 ) (546,573 ) Above-market leases 677,257 583,109 Accumulated amortization of above-market leases (190,222 ) (158,918 ) $ 1,313,798 $ 1,199,597 B. Other assets, net, consist of the following at: September 30, 2019 December 31, 2018 Right of use asset - operating leases, net $ 122,754 $ — Financing receivables 54,022 — Right of use asset - financing leases 36,901 — Credit facility origination costs, net 12,339 14,248 Prepaid expenses 14,126 11,595 Derivative assets and receivables - at fair value 13,617 3,100 Impounds related to mortgages payable 11,751 9,555 Restricted escrow deposits 11,474 1,129 Value-added tax receivable 10,303 — Non-refundable escrow deposits 7,173 200 Corporate assets, net 5,331 5,681 Other items 5,578 1,853 $ 305,369 $ 47,361 C. Distributions payable consist of the following declared distributions at: September 30, 2019 December 31, 2018 Common stock distributions $ 74,630 $ 67,636 Noncontrolling interests distributions 105 153 $ 74,735 $ 67,789 D. Accounts payable and accrued expenses consist of the following at: September 30, 2019 December 31, 2018 Notes payable - interest payable $ 65,522 $ 73,094 Property taxes payable 24,334 14,511 Derivative liabilities and payables - at fair value 17,674 7,001 Value-added tax payable 13,168 — Accrued costs on properties under development 7,259 8,137 Mortgages, term loans, and credit line - interest payable 1,097 1,596 Other items 34,100 29,426 $ 163,154 $ 133,765 E. Lease intangible liabilities, net, consist of the following at: September 30, 2019 December 31, 2018 Below-market leases $ 434,771 $ 404,938 Accumulated amortization of below-market leases (108,599 ) (94,072 ) $ 326,172 $ 310,866 F. Other liabilities consist of the following at: September 30, 2019 December 31, 2018 Lease liability - operating leases, net $ 124,349 $ — Rent received in advance and other deferred revenue 123,854 115,380 Security deposits 6,286 6,093 Lease liability - financing leases 5,868 — Capital lease obligation — 5,636 $ 260,357 $ 127,109 |
Investments in Real Estate
Investments in Real Estate | 9 Months Ended |
Sep. 30, 2019 | |
Real Estate Investments, Net [Abstract] | |
Investments in Real Estate | Investments in Real Estate We acquire land, buildings and improvements necessary for the successful operations of commercial tenants. A. Acquisitions During the First Nine Months of 2019 and 2018 Below is a summary of our acquisitions for the nine months ended September 30, 2019 : Number of Properties Square Feet Investment Weighted Average Lease Term (Years) Initial Average Cash Lease Yield Nine months ended September 30, 2019 (1) Acquisitions - U.S. (in 38 states) 214 6.2 $ 1,412.9 15.7 6.5 % Acquisitions - U.K. (2) 13 1.2 576.8 15.0 5.2 % Total Acquisitions 227 7.4 1,989.7 15.5 6.1 % Properties under Development - U.S. 14 0.4 36.0 16.0 7.4 % Total (3) 241 7.8 $ 2,025.7 15.5 6.2 % (1) None of our investments during 2019 caused any one tenant to be 10% or more of our total assets at September 30, 2019 . All of our 2019 investments in acquired properties are 100% leased at the acquisition date. (2) Represents investments of £ 456.1 million during the nine months ended September 30, 2019 multiplied by the applicable exchange rate on the date of acquisition. (3) The tenants occupying the new properties operate in 19 industries, and are 89.6% retail and 10.4% industrial, based on rental revenue. Approximately 25% of the rental revenue generated from acquisitions during the first nine months of 2019 is from investment grade rated tenants and their subsidiaries. The $2.0 billion invested during the first nine months of 2019 was allocated as follows: $477.8 million to land, of which $17.4 million was related to right of use assets under long-term ground leases, $1.29 billion to buildings and improvements, $226.1 million to intangible assets related to leases, $54.4 million to financing receivables related to certain leases with above-market terms, $33.5 million to intangible liabilities related to below-market leases, and $8.5 million to prepaid rent related to certain leases with below-market terms. There was no contingent consideration associated with these acquisitions. The properties acquired during the first nine months of 2019 generated total revenues of $47.1 million and net income of $21.9 million during the nine months ended September 30, 2019 . Below is a summary of our acquisitions for the nine months ended September 30, 2018: Number of Properties Square Feet Investment Weighted Average Lease Term (Years) Initial Average Cash Lease Yield Nine months ended September 30, 2018 (1) Acquisitions - U.S. (in 37 states) 580 3.2 $ 1,395.7 14.6 6.3 % Properties under Development - U.S. 11 1.1 69.7 10.9 6.8 % Total (2) 591 4.3 $ 1,465.4 14.4 6.3 % (1) All of our 2018 investments were 100% leased upon acquisition. (2) The tenants occupying the new properties operated in 20 industries, and the property types consisted of 96.1% retail and 3.9% industrial, based on rental revenue. Approximately 67% of the rental revenue generated from acquisitions during the first nine months of 2018 was from investment grade rated tenants and their subsidiaries. The $1.47 billion invested during the first nine months of 2018 was allocated as follows: $528.8 million to land, $854.9 million to buildings and improvements, $115.6 million to intangible assets related to leases, and $34.0 million to intangible liabilities related to certain leases with below-market terms. There was no contingent consideration associated with these acquisitions. The properties acquired during the first nine months of 2018 generated total revenues of $31.4 million and net income of $16.8 million during the nine months ended September 30, 2018 . 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 base rent for the first full year of each lease, divided by the total cost of the property. Since it is possible that a tenant 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. 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 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. B. Investments in Existing Properties During the first nine months of 2019 , we capitalized costs of $11.0 million on existing properties in our portfolio, consisting of $1.9 million for re-leasing costs, $577,000 for recurring capital expenditures and $8.5 million for non-recurring building improvements. In comparison, during the first nine months of 2018 , we capitalized costs of $12.3 million on existing properties in our portfolio, consisting of $2.8 million for re-leasing costs, $529,000 for recurring capital expenditures, and $8.9 million for non-recurring building improvements. C. Properties with Existing Leases Of the $2.0 billion we invested during the first nine months of 2019 , approximately $1.23 billion was used to acquire 100 properties with existing leases. In comparison, of the $1.47 billion we invested during the first nine months of 2018 , approximately $307.5 million was used to acquire 147 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 liabilities, 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 first nine months of 2019 and 2018 were $84.5 million and $79.8 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 on our 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 first nine months of 2019 and 2018 were $14.3 million and $12.4 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 September 30, 2019 (dollars in thousands): Net decrease to rental revenue Increase to amortization expense 2019 $ (5,497 ) $ 26,439 2020 (21,304 ) 102,681 2021 (20,145 ) 94,527 2022 (18,603 ) 82,915 2023 (17,175 ) 72,497 Thereafter (78,139 ) 447,704 Totals $ (160,863 ) $ 826,763 |
Credit Facility
Credit Facility | 9 Months Ended |
Sep. 30, 2019 | |
Credit Facility | |
Debt | |
Debt | Credit Facility In August 2019, we amended and restated our unsecured credit facility, or our credit facility, in order to allow borrowings in multiple currencies under our revolving credit facility. The amended and restated credit agreement is otherwise substantively consistent with the prior credit agreement entered into in October 2018. Our credit facility consists of a $3.0 billion unsecured revolving credit facility with an initial term that expires in March 2023 and includes, at our option, two six-month extensions and a $250.0 million unsecured term loan due March 2024. The revolving credit facility allows us to borrow in up to 14 currencies, including U.S. dollars, and has a $1.0 billion expansion option. Under our credit facility, our investment grade credit ratings as of September 30, 2019 provide for financing at the London Interbank Offered Rate, commonly referred to as LIBOR, plus 0.775% with a facility commitment fee of 0.125% , for all-in drawn pricing of 0.90% over LIBOR . The borrowing rate is subject to an interest rate floor and may change if our investment grade credit ratings change. We also have other interest rate options available to us under our credit facility. Our credit facility is unsecured and, accordingly, we have not pledged any assets as collateral for this obligation. At September 30, 2019 and December 31, 2018, credit facility origination costs of $12.3 million and $14.2 million , respectively, are included in other assets, net on our consolidated balance sheet. These costs are being amortized over the remaining term of our credit facility. At September 30, 2019 , we had no outstanding balance on our $3.0 billion revolving credit facility, as compared to an outstanding balance of $252.0 million at December 31, 2018 . The weighted average interest rate on outstanding borrowings under our revolving credit facility was 3.2% during the first nine months of 2019 and 2.8% during the first nine months of 2018 . At December 31, 2018, the weighted average interest rate on outstanding borrowings under our revolving credit facility was 3.2% . Our credit facility is subject to various leverage and interest coverage ratio limitations, and at September 30, 2019 , we were in compliance with the covenants on our credit facility. |
Term Loans
Term Loans | 9 Months Ended |
Sep. 30, 2019 | |
Term Loans | |
Debt | |
Debt | Term Loans In October 2018, in conjunction with entering into our credit facility, we entered into a $250.0 million senior unsecured term loan, which matures in March 2024. Borrowing under this term loan bears interest at the current one-month LIBOR, plus 0.85% . In conjunction with this term loan, we also entered into an interest rate swap which effectively fixes our per annum interest on this term loan at 3.89% . The terms of this term loan were not impacted by the amendment and restatement of our credit agreement in August 2019. In June 2015, in conjunction with entering into our previous credit facility, we entered into a $250.0 million senior unsecured term loan maturing in June 2020. Borrowing under this term loan bears interest at the current one-month LIBOR , plus 0.90% . In conjunction with this term loan, we also entered into an interest rate swap which effectively fixes our per annum interest rate on this term loan at 2.62% . The terms of this term loan were not impacted by the amendment and restatement of our credit agreement in August 2019. In January 2013, in conjunction with our acquisition of American Realty Capital Trust, Inc., or ARCT, we entered into a $70.0 million senior unsecured term loan with an initial maturity date of January 2018. Borrowing under this term loan bore interest at the current one-month LIBOR , plus 1.10% . In conjunction with this term loan, we also entered into an interest rate swap, which, until the interest rate swap's termination in January 2018, effectively fixed our per annum interest rate on this term loan at 2.05% . In 2018, we entered into two separate six –month extensions of this loan, during which periods the interest was born at the current one-month LIBOR , plus 0.90% . In January 2019, we paid off the outstanding principal and interest on this term loan. Deferred financing costs of $1.2 million incurred in conjunction with the $250.0 million term loan maturing June 2020 and $1.1 million incurred in conjunction with the $250.0 million term loan maturing March 2024 are being amortized over the remaining terms of each respective term loan. The net balance of these deferred financing costs, which was $1.1 million at September 30, 2019 , and $1.4 million at December 31, 2018 , is included within term loans, net on our consolidated balance sheets. |
Mortgages Payable
Mortgages Payable | 9 Months Ended |
Sep. 30, 2019 | |
Mortgages Payable | |
Debt | |
Debt | Mortgages Payable During the first nine months of 2019 , we made $19.5 million in principal payments, including the repayment of one mortgage in full for $15.8 million . During the first nine months of 2018 , we made $14.6 million in principal payments, including the repayment of one mortgage in full for $11.0 million . No mortgages were assumed during the first nine months of 2019 or 2018 . Assumed mortgages are secured by the properties on which the debt was placed and are considered non-recourse debt with limited customary exceptions for items such as solvency, bankruptcy, misrepresentation, fraud, misapplication of payments, environmental liabilities, failure to pay taxes, insurance premiums, liens on the property, violations of the single purpose entity requirements, and uninsured losses. 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 September 30, 2019 , 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 $143,000 at September 30, 2019 and $183,000 at December 31, 2018 . These costs are being amortized over the remaining term of each mortgage. The following table summarizes our mortgages payable as of September 30, 2019 and December 31, 2018 , respectively (dollars in thousands): As Of Number of Properties (1) Weighted Average Stated Interest Rate (2) Weighted Average Effective Interest Rate (3) Weighted Average Remaining Years Until Maturity Remaining Principal Balance Unamortized Premium and Deferred Financing Costs Balance, net Mortgage Payable Balance 9/30/2019 59 5.2 % 4.6 % 2.6 $ 278,882 $ 3,171 $ 282,053 12/31/2018 60 5.1 % 4.6 % 3.2 $ 298,377 $ 4,192 $ 302,569 (1) At September 30, 2019 , there were 25 mortgages on 59 properties. At December 31, 2018 , there were 26 mortgages on 60 properties. The mortgages require monthly payments with principal payments due at maturity. At September 30, 2019 , the mortgages were at fixed interest rates, except for one variable rate mortgage on one property totaling $7.1 million , which has been subsequently swapped to a fixed interest rate. At December 31, 2018 , the mortgages were at fixed rates, except for two mortgages on two properties totaling $23.3 million . After factoring in arrangements which limit our exposure to interest rate risk and effectively fix our per annum interest rates, our mortgage debt subject to variable rates totaled $16.0 million at December 31, 2018 . (2) Stated interest rates ranged from 3.8% to 6.9% at September 30, 2019 and December 31, 2018 . (3) Effective interest rates ranged from 3.8% to 7.7% at September 30, 2019 , while effective interest rates ranged from 1.1% to 7.7% at December 31, 2018 . The following table summarizes the maturity of mortgages payable, excluding net premiums of $3.3 million and deferred financing costs of $143,000 , as of September 30, 2019 (dollars in millions): Year of Maturity Principal 2019 $ 1.2 2020 82.4 2021 67.0 2022 109.7 2023 6.7 Thereafter 11.9 Totals $ 278.9 |
Notes Payable
Notes Payable | 9 Months Ended |
Sep. 30, 2019 | |
Notes payable | |
Debt | |
Debt | Notes Payable A. General Our senior unsecured notes and bonds consist of the following, sorted by maturity date (dollars in millions): September 30, 2019 December 31, 2018 5.750% notes, issued in June 2010 and due in January 2021 $ 250 $ 250 3.250% notes, $450 issued in October 2012 and $500 issued in December 2017, both due in October 2022 950 950 4.650% notes, issued in July 2013 and due in August 2023 750 750 3.875% notes, issued in June 2014 and due in July 2024 350 350 3.875% notes, issued in April 2018 and due in April 2025 500 500 4.125% notes, $250 issued in September 2014 and $400 issued in March 2017, both due in October 2026 650 650 3.000% notes, issued in October 2016 and due in January 2027 600 600 3.650% notes, issued in December 2017 and due in January 2028 550 550 3.250% notes, issued in June 2019 and due in June 2029 500 — 2.730% notes, issued in May 2019 and due in May 2034 (1) 387 — 5.875% bonds, $100 issued in March 2005 and $150 issued in June 2011, both due in March 2035 250 250 4.650% notes, $300 issued in March 2017 and $250 issued in December 2017, both due in March 2047 550 550 Total principal amount 6,287 5,400 Unamortized net original issuance premiums and deferred financing costs (31 ) (23 ) $ 6,256 $ 5,377 (1) Represents the principal balance (in U.S. dollars) of the Sterling-denominated private placement of £315.0 million based on the applicable exchange rate on September 30, 2019 . The following table summarizes the maturity of our notes and bonds payable as of September 30, 2019 , excluding net unamortized original issuance premiums and deferred financing costs (dollars in millions): Year of Maturity Principal 2021 $ 250 2022 950 2023 750 Thereafter 4,337 Totals $ 6,287 As of September 30, 2019 , the weighted average interest rate on our notes and bonds payable was 3.9% and the weighted average remaining years until maturity was 8.5 years . All of our outstanding notes and bonds payable have fixed interest rates and contain various covenants, with which we remained in compliance as of September 30, 2019 . Additionally, interest on all of our senior unsecured note and bond obligations is paid semiannually. B. Note Repayment In January 2018, we repaid our $350 million of outstanding 2.000% notes, plus accrued and unpaid interest upon maturity. C. Note Issuances In May 2019, we issued £315 million of 2.730% senior unsecured notes due May 2034, or the 2034 Notes, through a private placement. In June 2019, we issued $500 million of 3.250% senior unsecured notes due June 2029, or the 2029 Notes. The public offering price for the 2029 Notes was 99.36% of the principal amount, for an effective yield to maturity of 3.326% and net proceeds of approximately $492.2 million . In April 2018, we issued $500 million of 3.875% senior unsecured notes due 2025, or the 2025 Notes. The public offering price for the 2025 Notes was 99.50% of the principal amount, for an effective yield to maturity of 3.957% and net proceeds of approximately $493.1 million . The net proceeds from these offerings were used to repay borrowings outstanding under our credit facility, to fund investment opportunities, and for other general corporate purposes. |
Issuances of Common Stock
Issuances of Common Stock | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Issuances of Common Stock | Issuances of Common Stock A. Issuance of Common Stock in an Overnight Underwritten Public Offering In May 2019, we issued 12,650,000 shares of common stock in an overnight underwritten public offering. After deducting underwriting discounts and other offering costs of $31.0 million , the net proceeds of $845.1 million were used to repay borrowings under our credit facility, to fund investment opportunities, and for other general corporate purposes. B. 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. The following table outlines common stock issuances pursuant to our DRSPP program (dollars in millions): Three Months Ended September 30, Nine Months Ended September 30, Inception to Date 2019 2018 2019 2018 Shares of common stock issued under the DRSPP program 29,801 38,011 89,219 131,072 14,319,029 Gross proceeds $ 2.1 $ 2.2 $ 6.3 $ 7.0 $ 677.2 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 first nine months of 2019 or 2018 . C. At-the-Market (ATM) Program Under our "at-the-market" equity distribution plan, or our ATM program, shares of common stock may be offered and sold (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 NYSE at prevailing market prices or at negotiated prices. Our ATM program authorizes up to 28,961,855 common shares to be issued. At September 30, 2019 , we had 11,083,783 shares remaining for future issuance under our ATM program. We anticipate maintaining the availability of our ATM program in the future, including through replenishing the authorized shares issuable thereunder. The following table outlines the common stock issuance pursuant to our ATM program (dollars in millions): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Shares of common stock issued under the ATM program 7,663,383 5,055,343 9,370,078 10,630,616 Gross proceeds $ 570.3 $ 290.9 $ 694.4 $ 588.9 |
Noncontrolling Interests
Noncontrolling Interests | 9 Months Ended |
Sep. 30, 2019 | |
Noncontrolling Interest [Abstract] | |
Noncontrolling Interests | Noncontrolling Interests In January 2013, we completed our acquisition of ARCT. Equity issued as consideration for this transaction included common and preferred partnership units issued by Tau Operating Partnership, L.P., or Tau Operating Partnership, the consolidated subsidiary which owns properties acquired through the ARCT acquisition. In January 2019, we redeemed all 317,022 remaining common units of Tau Operating Partnership for cash, and paid off the outstanding balance and interest on the $70.0 million senior unsecured term loan entered in January 2013 in conjunction with our acquisition of ARCT. Following the redemption, we hold 100% of the ownership interests of Tau Operating Partnership and continue to consolidate the entity. As part of this transaction, our taxable REIT subsidiary, Crest Net Lease, obtained a 0.11% interest in Tau Operating Partnership. In June 2013, we completed the acquisition of a portfolio of properties by issuing common partnership units in Realty Income, L.P. as consideration for the acquisition. Additionally, in March 2019 and in March and April 2018, we completed the acquisitions of additional properties, by paying both cash and by issuing additional common partnership units in Realty Income, L.P as consideration for the acquisitions. At September 30, 2019 , the remaining units from these issuances represent a 1.9% ownership in Realty Income, L.P. We hold the remaining 98.1% interests in this entity and consolidate the entity. Neither of the common partnership units have voting rights. Both common partnership units are entitled to monthly distributions equal to the amount paid to common stockholders of Realty Income, and are redeemable in cash or Realty Income common stock, at our option, and at a conversion ratio of one to one, subject to certain exceptions. Noncontrolling interests with redemption provisions that permit the issuer to settle in either cash or common stock, at the option of the issuer, were evaluated to determine whether temporary or permanent equity classification on the balance sheet was appropriate. We determined that the units meet the requirements to qualify for presentation as permanent equity. In 2016, we completed the acquisition of two properties by acquiring a controlling interest in two separate entities. In December 2018, we acquired all of the outstanding minority ownership interests associated with one of these entities. In July 2019, we acquired all of the outstanding minority ownership interest associated with the remaining entity. The following table represents the change in the carrying value of all noncontrolling interests through September 30, 2019 (dollars in thousands): Tau Operating Partnership units (1) Realty Income, L.P. units (2) Other Noncontrolling Interests Total Carrying value at December 31, 2018 $ 13,356 $ 17,912 $ 968 $ 32,236 Reallocation of equity — 653 — 653 Redemptions (13,356 ) — (901 ) (14,257 ) Shares issued in conjunction with acquisition — 6,286 — 6,286 Distributions — (904 ) (76 ) (980 ) Allocation of net income — 731 9 740 Carrying value at September 30, 2019 $ — $ 24,678 $ — $ 24,678 (1) 317,022 Tau Operating Partnership units were issued on January 22, 2013. No units remained outstanding as of September 30, 2019 , and 317,022 units remained outstanding as of December 31, 2018 . (2) 534,546 Realty Income, L.P. units were issued on June 27, 2013, 242,007 units were issued on March 30, 2018, 131,790 units were issued on April 30, 2018, and 89,322 units were issued on March 28, 2019. 463,119 and 373,797 remained outstanding as of September 30, 2019 and December 31, 2018 , respectively. At December 31, 2018 , Tau Operating Partnership, Realty Income, L.P., and an entity acquired during 2016 were considered variable interest entities, or VIEs, in which we were deemed the primary beneficiary based on our controlling financial interests. In January 2019, we redeemed all 317,022 remaining Tau Operating Partnership units held by nonaffiliates for $20.2 million and recorded the excess over carrying value of $6.9 million as a reduction to common stock and paid in capital. Following the redemption, we hold 100% of the ownership interests of Tau Operating Partnership, L.P., and continue to consolidate the entity. In July 2019, we purchased the remaining interest in the entity acquired during 2016 for $900,000 . At September 30, 2019 , Realty Income, L.P. is the only remaining VIE. Below is a summary of selected financial data of consolidated VIEs at September 30, 2019 and December 31, 2018 (in thousands): September 30, 2019 December 31, 2018 Net real estate $ 617,517 $ 2,903,093 Total assets 700,156 3,259,495 Total debt — 191,565 Total liabilities 87,797 320,800 |
Financial Instruments and Fair
Financial Instruments and Fair Value Measurements | 9 Months Ended |
Sep. 30, 2019 | |
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 disclosure for assets and liabilities measured at fair value requires allocation to a three-level valuation hierarchy. This valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. Categorization within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement. We believe that the carrying values reflected in our consolidated balance sheets reasonably approximate the fair values for cash and cash equivalents, accounts receivable, escrow deposits, loans receivable, line of credit payable, term loans and all other liabilities, due to their short-term nature or interest rates and terms that are consistent with market, except for our mortgages payable assumed in connection with acquisitions and our senior notes and bonds payable, which are disclosed as follows (dollars in millions): September 30, 2019 Carrying value Estimated fair value Mortgages payable assumed in connection with acquisitions (1) $ 278.9 $ 289.5 Notes and bonds payable (2) 6,287.1 6,839.7 December 31, 2018 Carrying value Estimated fair value Mortgages payable assumed in connection with acquisitions (1) $ 298.4 $ 305.7 Notes and bonds payable (2) 5,400.0 5,430.0 (1) Excludes non-cash net premiums recorded on the mortgages payable. The unamortized balance of these net premiums was $3.3 million at September 30, 2019 , and $4.4 million at December 31, 2018 . Also excludes deferred financing costs of $143,000 at September 30, 2019 and $183,000 at December 31, 2018 . (2) Excludes non-cash original issuance premiums and discounts recorded on notes payable. The unamortized balance of the net original issuance premiums was $6.6 million at September 30, 2019 , and $10.5 million at December 31, 2018 . Also excludes deferred financing costs of $37.3 million at September 30, 2019 and $33.7 million at December 31, 2018 . 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. 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. We record interest rate swaps on the consolidated balance sheet at fair value. Prior to our adoption of hedge accounting in October 2018, the change in fair value of interest rate swaps was recognized through interest expense. Following adoption, changes to fair value are recorded to accumulated other comprehensive income, or AOCI. In May 2019, we entered into four cross-currency swaps to exchange £130 million 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. Gains and losses, representing hedge components excluded from the assessment of effectiveness, are recognized in earnings over the life of the hedges on a systematic and rational basis, as documented at hedge inception in accordance with our accounting policy election. The earnings recognition of excluded components is presented in foreign currency and derivative gains, net on our consolidated statements of income and comprehensive income, which is the same caption item as the hedged transactions. The following table summarizes the terms and fair values of our derivative financial instruments at September 30, 2019 and December 31, 2018 (dollars in millions): Derivative Type Hedge Designation Notional Amount Strike Effective Date Maturity Date Fair Value - asset (liability) September 30, December 31, September 30, December 31, 2019 2018 2019 2018 Interest rate swap Cash flow $ 7.1 $ 7.2 6.03% 09/25/2012 09/03/2021 $ (0.3 ) $ (0.2 ) Interest rate swap Cash flow 250.0 250.0 1.72% 06/30/2015 06/30/2020 — 3.0 Interest rate swap Cash flow 250.0 250.0 3.04% 10/24/2018 03/24/2024 (17.4 ) (6.8 ) Cross-currency swap (1) Cash flow 41.6 — (2) 05/20/2019 05/22/2034 2.9 — Cross-currency swap (1) Cash flow 41.6 — (3) 05/20/2019 05/22/2034 2.9 — Cross-currency swap (1) Cash flow 41.6 — (4) 05/20/2019 05/22/2034 2.4 — Cross-currency swap (1) Cash flow 41.6 — (5) 05/20/2019 05/22/2034 2.2 — $ 673.5 $ 507.2 $ (7.3 ) $ (4.0 ) (1) Represents British Pound Sterling, or GBP, United States Dollar, or USD, cross-currency swap. (2) GBP fixed rates initially at 4.82% and escalating to 10.96% , and USD fixed rate at 9.800% . (3) GBP fixed rates initially at 4.82% and escalating to 10.96% , and USD fixed rate at 9.803% . (4) GBP fixed rates initially at 4.82% and escalating to 10.96% , and USD fixed rate at 9.745% . (5) GBP fixed rates initially at 4.82% and escalating to 10.96% , and USD fixed rate at 9.755% . 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 swap agreements to manage interest rate risk and cross-currency swaps 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. 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 September 30, 2019 and December 31, 2018, 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 on the three-level valuation hierarchy. Unrealized gains and losses in AOCI are reclassified to interest expense in the case of interest rate swaps and to foreign currency gains and losses, net in the case of cross-currency swaps, when the related hedged items are recognized. During the three and nine months ended September 30, 2019 , we reclassified $890,000 and $2.0 million , respectively, from AOCI as an increase to interest expense for our interest rate swaps and $5.7 million and $7.1 million for the three and nine months ended September 30, 2019 for cross-currency swaps into foreign exchange gains. During the first nine months of 2018, there were no outstanding derivatives designated as hedges and accounted for through AOCI. As a result, there were no amounts to reclassify from AOCI during the first nine months of 2018. We expect to reclassify $5.7 million from AOCI as an increase to interest expense relating to interest rate swaps and $1.9 million |
Operating Leases
Operating Leases | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Operating Leases | Operating Leases A. At September 30, 2019 , we owned 5,964 properties in 49 U.S. states, Puerto Rico, and the U.K. Of the 5,964 properties, 5,934 , or 99.5% , are single-tenant properties, and the remaining are multi-tenant properties. At September 30, 2019 , 102 properties were available for lease or sale. Substantially all of our leases are net leases where the tenant 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 a tenants’ gross sales, or percentage rents, for the third quarter of 2019 and 2018 was $407,000 and $454,000 , respectively. Percentage rents for the first nine months of 2019 and 2018 were $4.5 million and $4.3 million , respectively. At September 30, 2019 , minimum future annual rents to be received on the operating leases for the next five years and thereafter are as follows (dollars in thousands): 2019 $ 358,249 2020 1,420,029 2021 1,376,492 2022 1,309,148 2023 1,227,605 Thereafter 8,346,953 Total $ 14,038,476 B. Major Tenants - No individual tenant’s rental revenue, including percentage rents, represented more than 10% of our total revenue for each of the nine months ended September 30, 2019 and 2018. |
Gain on Sales of Real Estate
Gain on Sales of Real Estate | 9 Months Ended |
Sep. 30, 2019 | |
Gain (Loss) on Sale of Investments [Abstract] | |
Gain of Sales of Real Estate | Gain on Sales of Real Estate The following table summarizes our properties sold during the periods indicated below (dollars in millions): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Number of properties 27 20 64 60 Net sales proceeds $ 21.5 $ 35.5 $ 72.6 $ 83.0 Gain on sales of real estate $ 1.7 $ 7.8 $ 15.8 $ 18.8 |
Impairments
Impairments | 9 Months Ended |
Sep. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Impairments | Impairments We review long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. A provision is made for impairment if estimated future operating cash flows (undiscounted and without interest charges) plus estimated disposition proceeds (undiscounted) are less than the current book value of the property. Key factors that we utilize in this analysis include projected rental rates, estimated holding periods, historical sales and re-leases, capital expenditures and property sales capitalization rates. If a property is classified as held for sale, it is carried at the lower of carrying cost or estimated fair value, less estimated cost to sell, and depreciation of the property ceases. The following table summarizes our provisions for impairment during the periods indicated below (dollars in millions): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Total provisions for impairment $ 13.5 $ 6.9 $ 31.2 $ 25.0 Number of properties: Classified as held for sale 9 — 9 — Classified as held for investment 2 1 4 3 Sold 16 18 28 36 |
Distributions Paid and Payable
Distributions Paid and Payable | 9 Months Ended |
Sep. 30, 2019 | |
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 first nine months of 2019 and 2018 : Month 2019 2018 January $ 0.2210 $ 0.2125 February 0.2255 0.2190 March 0.2255 0.2190 April 0.2260 0.2195 May 0.2260 0.2195 June 0.2260 0.2195 July 0.2265 0.2200 August 0.2265 0.2200 September 0.2265 0.2200 Total $ 2.0295 $ 1.9690 At September 30, 2019 , a distribution of $0.227 per common share was payable and was paid in October 2019. |
Net Income per Common Share
Net Income per Common Share | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Net Income per Common Share | Net Income per Common Share Basic 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 September 30, Nine months ended September 30, 2019 2018 2019 2018 Weighted average shares used for the basic net income per share computation 319,945,932 290,664,368 311,556,279 286,599,191 Incremental shares from share-based compensation 317,085 225,796 309,131 189,072 Weighted average partnership common units convertible to common shares that were dilutive — 317,022 — 317,022 Weighted average shares used for diluted net income per share computation 320,263,017 291,207,186 311,865,410 287,105,285 Unvested shares from share-based compensation that were anti-dilutive 7,892 261 6,529 1,378 Weighted average partnership common units convertible to common shares that were anti-dilutive 463,119 397,690 434,981 271,890 |
Supplemental Disclosures of Cas
Supplemental Disclosures of Cash Flow Information | 9 Months Ended |
Sep. 30, 2019 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Disclosures of Cash Flow Information | Supplemental Disclosures of Cash Flow Information Cash paid for interest was $214.2 million in the first nine months of 2019 and $197.2 million in the first nine months of 2018 . Interest capitalized to properties under development was $549,000 in the first nine months of 2019 and $234,000 in the first nine months of 2018 . Cash paid for income taxes was $3.6 million in the first nine months of 2019 and $4.0 million in the first nine months of 2018 . The following non-cash activities are included in the accompanying consolidated financial statements: A. As a result of the adoption of ASU 2016-02 on January 1, 2019, we recorded $132.0 million of lease liabilities and related right of use assets as lessee under operating leases. B. During the first nine months of 2019 , we issued 89,322 common partnership units of Realty Income, L.P. totaling $6.3 million , as partial consideration for an acquisition of properties. C. During the first nine months of 2018 , we issued 373,797 common partnership units of Realty Income, L.P. as partial consideration for an acquisition of properties, totaling $18.8 million . D. During the first nine months of 2018 , we completed the acquisition of a property using $7.5 million in funds that were held in a non-refundable escrow account. Per the requirements of ASU 2016-18 (Topic 230, Statement of Cash Flows ), 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): September 30, 2019 September 30, 2018 Cash and cash equivalents shown in the consolidated balance sheets $ 236,064 $ 6,666 Restricted escrow deposits (1) 11,474 1,533 Impounds related to mortgages payable (1) 11,751 7,529 Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows $ 259,289 $ 15,728 (1) Included within other assets, net on the consolidated balance sheets (see note 3). 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. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information We evaluate performance and make resource allocation decisions on an industry by industry basis. For financial reporting purposes, we have grouped our tenants into 49 activity segments. All of the properties are incorporated into one of the applicable segments. Unless otherwise specified, all segments listed below are located within the U.S. Because almost all of our leases require the tenant to pay operating expenses, rental revenue is the only component of segment profit and loss we measure. The following tables set forth certain information regarding the properties owned by us, classified according to the business of the respective tenants (dollars in thousands): Assets, as of: September 30, 2019 December 31, 2018 Segment net real estate: Automotive service $ 283,422 $ 210,668 Automotive tire services 232,712 238,939 Beverages 280,427 284,910 Child care 208,788 151,640 Convenience stores 1,717,039 1,756,732 Dollar stores 1,123,086 1,117,250 Drug stores 1,447,853 1,490,261 Financial services 394,771 414,613 General merchandise 471,376 317,424 Grocery stores - U.S. (1) 865,039 774,526 Grocery stores - U.K. (1) 449,200 — Health and fitness 995,315 882,515 Home improvement 487,219 424,494 Restaurants-casual dining 529,316 559,616 Restaurants-quick service 1,008,276 964,980 Theaters 889,931 555,990 Transportation services 735,020 758,133 Wholesale club 402,478 412,203 Other non-reportable segments 2,625,458 2,528,623 Total segment net real estate 15,146,726 13,843,517 Intangible assets: Automotive service 58,974 61,951 Automotive tire services 7,474 8,696 Beverages 1,573 1,765 Child care 20,448 12,277 Convenience stores 104,901 108,714 Dollar stores 48,294 48,842 Drug stores 155,827 165,558 Financial services 17,843 20,426 General merchandise 60,080 43,122 Grocery stores - U.S. (1) 170,231 144,551 Grocery stores - U.K. (1) 108,863 — Health and fitness 68,738 71,609 Home improvement 72,128 57,928 Restaurants-casual dining 16,944 18,153 Restaurants-quick service 52,662 54,448 Theaters 35,989 25,811 Transportation services 64,758 73,577 Wholesale club 24,150 26,484 Other non-reportable segments 223,921 255,685 Goodwill: Automotive service 436 437 Automotive tire services 862 862 Child care 4,825 4,863 Convenience stores 1,978 1,983 Restaurants-casual dining 1,794 1,841 Restaurants-quick service 1,040 1,052 Other non-reportable segments 3,568 3,592 Other corporate assets 704,877 202,739 Total assets $ 17,179,904 $ 15,260,483 Three months ended September 30, Nine months ended September 30, Revenue 2019 2018 2019 2018 Segment rental revenue: Automotive service $ 8,505 $ 7,120 $ 23,735 $ 21,150 Automotive tire services 7,766 7,460 23,517 22,607 Beverages 7,988 7,908 23,819 23,581 Child care 7,837 5,255 23,425 16,172 Convenience stores 41,286 39,384 123,932 101,254 Dollar stores 25,213 23,903 75,311 70,390 Drug stores 31,902 32,431 97,414 97,206 Financial services 7,585 7,850 22,997 21,741 General merchandise 9,594 7,453 25,115 21,613 Grocery stores - U.S. (1) 17,673 16,095 51,009 47,433 Grocery stores - U.K. (1) 6,618 — 9,533 — Health and fitness 26,437 23,754 78,915 70,812 Home improvement 10,950 9,678 31,430 28,261 Restaurants-casual dining 10,939 12,355 33,614 34,344 Restaurants-quick service 21,880 18,673 65,124 52,035 Theaters 24,002 17,479 62,567 52,814 Transportation services 16,109 16,105 48,327 47,653 Wholesale club 9,468 9,345 28,525 28,218 Other non-reportable segments and tenant reimbursements 80,560 75,004 242,292 223,081 Rental (including reimbursable) 372,312 337,252 1,090,601 980,365 Other 1,935 829 3,461 4,897 Total revenue $ 374,247 $ 338,081 $ 1,094,062 $ 985,262 (1) During 2019, we acquired 13 grocery stores located in the U.K. Grocery stores in the U.S. and U.K. are managed as two separate operating segments. |
Common Stock Incentive Plan
Common Stock Incentive Plan | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Common Stock Incentive Plan | Common Stock Incentive Plan In 2012, our Board of Directors adopted and stockholders approved the Realty Income Corporation 2012 Incentive Award Plan, or the 2012 Plan, to enable us to motivate, attract and retain the services of directors and employees considered essential to our long-term success. The 2012 Plan offers our directors and employees an opportunity to own our stock or rights that will reflect our growth, development and financial success. Under the terms of the 2012 plan, the aggregate number of shares of our common stock subject to options, restricted stock, stock appreciation rights, restricted stock units and other awards, will be no more than 3,985,734 shares. The 2012 Plan has a term of ten years from the date it was adopted by our Board of Directors. The amount of share-based compensation costs recognized in general and administrative expense on our consolidated statements of income and comprehensive income was $3.2 million during the third quarter of 2019 , $3.9 million during the third quarter of 2018 , $10.5 million during the first nine months of 2019 and $12.5 million during the first nine months of 2018 . A. Restricted Stock During the first nine months of 2019 , we granted 81,927 shares of common stock under the 2012 Plan. This included 32,000 total shares of restricted stock granted to the independent members of our Board of Directors in connection with our annual awards in May 2019, 20,000 shares of which vested immediately, 8,000 shares of which vest in equal parts over a three -year service period, and 4,000 shares of which vest over a one -year service period. With the exception of shares granted to our independent directors, shares granted to employees vest over a four-year service period. As of September 30, 2019 , the remaining unamortized share-based compensation expense related to restricted stock totaled $11.3 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 first nine months of 2019 , we granted 115,137 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 first nine months of 2019 , we also granted 5,482 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 September 30, 2019 , the remaining share-based compensation expense related to the performance shares and restricted stock units totaled $10.6 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 restricted stock units are being recognized on a straight-line basis over the service period. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies In 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 September 30, 2019 , we had commitments of $9.8 million for re-leasing costs, recurring capital expenditures, and non-recurring building improvements. In addition, as of September 30, 2019 , we had committed $23.5 million under construction contracts related to development projects, which is expected to be paid in the next twelve months. We have certain properties that are subject to ground leases which are accounted for as operating leases. At September 30, 2019 , minimum future rental payments for the next five years and thereafter are as follows (dollars in millions): Ground Leases (1) Ground Leases (2) Total 2019 $ 0.4 $ 3.4 $ 3.8 2020 1.5 13.5 15.0 2021 1.3 13.2 14.5 2022 1.2 13.1 14.3 2023 1.2 13.1 14.3 Thereafter 19.9 82.1 102.0 Total $ 25.5 $ 138.4 $ 163.9 Present value adjustment for remaining lease payments (3) (39.6 ) Lease liability - operating leases, net $ 124.3 (1) Realty Income currently pays the ground lessors directly for the rent under the ground leases. (2) Our tenants, who are generally sub-tenants under the ground leases, are responsible for paying the rent under these ground leases. In the event a tenant fails to pay the ground lease rent, we are primarily responsible for the rent payment. (3 ) The range of discount rates used to calculate the present value of the lease payments is 3.09% to 5.50% . At September 30, 2019 , the weighted average discount rate is 4.29% and the weighted average remaining lease term is 12.5 years . The discount rates are derived using a hypothetical corporate credit curve for the ground leases based on our outstanding senior notes and relevant market data. The discount rates are specific for individual leases primarily based on the lease term. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events In October 2019, we declared a dividend of $0.227 per share to our common stockholders, which will be paid in November 2019. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies and Procedures and Recent Accounting Pronouncements (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | A. The accompanying consolidated financial statements include the accounts of Realty Income and other subsidiaries for which we make operating and financial decisions (i.e., control), after elimination of all material intercompany balances and transactions. We consolidate entities that we control and record a noncontrolling interest for the portion that we do not own. Noncontrolling interest that was created or assumed as part of a business combination was recognized at fair value as of the date of the transaction (see note 10). We have no unconsolidated investments. |
Income Taxes | B. 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, we generally will not be required to pay federal corporate income taxes on such income. Accordingly, no provision has been made for federal income taxes in the accompanying consolidated financial statements, except for federal income taxes of our taxable REIT subsidiaries. The income taxes recorded on our consolidated statements of income and comprehensive income represent amounts paid by Realty Income and its subsidiaries for city and state income and franchise taxes and for U.K. income taxes. |
Goodwill | C. We assign a portion of goodwill to our applicable property sales, which results in a reduction of the carrying amount of our goodwill. In order to allocate goodwill to the carrying amount of properties that we sell, we utilize a relative fair value approach based on the original methodology for assigning goodwill. As we sell properties, our goodwill will likely continue to gradually decrease over time. |
Recent Accounting Pronouncements | D. In February 2016, the FASB issued ASU 2016-02 (Topic 842, Leases ), which amended Topic 840, Leases . Under this amended topic, the accounting applied by a lessor is largely unchanged from that applied under Topic 840, Leases . The large majority of our leases remain classified as operating leases, and we continue to recognize lease income on a generally straight-line basis over the lease term. Although primarily a lessor, we are also a lessee under several ground lease arrangements. We adopted this standard effective as of January 1, 2019 using the effective date method, and elected the practical expedients available for implementation under the standard. As a result, we recognize lease obligations for ground leases designated as operating and financing leases with corresponding right of use assets and liabilities (see note 3). Additionally, above-market rents on certain of our leases under which we are a lessor are accounted for as financing receivables amortizing over the lease term, and below-market rents on certain of our leases under which we are a lessor are accounted for as prepaid rent (see note 3). Also, as a result of the adoption of this standard, tenant reimbursable revenue and property expenses are now presented on a gross basis as both tenant reimbursement revenue included in rental revenue, and as a reimbursable expense included in property expenses, respectively, on our consolidated statements of income and comprehensive income. Property taxes and insurance paid directly by the lessee to a third party will continue to be presented on a net basis. These presentation changes had no impact on our results of operations. As a result, there was no restatement of prior issued financial statements and, similarly, no cumulative effect adjustment to opening |
Foreign Currency | E. In connection with our acquisition of properties in the U.K. during the second quarter of 2019, we adopted accounting guidance applicable under Topic 830, Foreign Currency Matters . The functional currency of the U.K. subsidiaries holding the acquired properties is the British pound sterling. Assets and liabilities from our foreign-owned subsidiaries are translated into U.S. dollars using the exchange rate in effect at the consolidated balance sheet date. Equity accounts are translated at historical rates, except for retained earnings, whereas the impact is calculated via the income statement translation process. Revenue and expense accounts are translated using the weighted average exchange rates during the period. The cumulative translation adjustments from our U.K. subsidiaries are recorded in accumulated other comprehensive income in the consolidated statements of equity. We have intercompany debt denominated in the British pound sterling, which is the same currency as the functional currency of our U.K. subsidiaries. When this debt is remeasured against the functional currency of the Company, which is the U.S. dollar, a gain or loss can result. Such transaction gains or losses realized upon settlement of a foreign currency transaction, which may include intercompany transactions, are included in net income under the caption ‘Foreign currency and derivative gains (losses), net'. |
Supplemental Detail for Certa_2
Supplemental Detail for Certain Components of Consolidated Balance Sheets (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Disclosure Text Block Supplement [Abstract] | |
Schedule of acquired lease intangible assets, net | A. Lease intangible assets, net, consist of the following at: September 30, 2019 December 31, 2018 In-place leases $ 1,439,816 $ 1,321,979 Accumulated amortization of in-place leases (613,053 ) (546,573 ) Above-market leases 677,257 583,109 Accumulated amortization of above-market leases (190,222 ) (158,918 ) $ 1,313,798 $ 1,199,597 |
Schedule of other assets, net | B. Other assets, net, consist of the following at: September 30, 2019 December 31, 2018 Right of use asset - operating leases, net $ 122,754 $ — Financing receivables 54,022 — Right of use asset - financing leases 36,901 — Credit facility origination costs, net 12,339 14,248 Prepaid expenses 14,126 11,595 Derivative assets and receivables - at fair value 13,617 3,100 Impounds related to mortgages payable 11,751 9,555 Restricted escrow deposits 11,474 1,129 Value-added tax receivable 10,303 — Non-refundable escrow deposits 7,173 200 Corporate assets, net 5,331 5,681 Other items 5,578 1,853 $ 305,369 $ 47,361 |
Schedule of distributions payable | C. Distributions payable consist of the following declared distributions at: September 30, 2019 December 31, 2018 Common stock distributions $ 74,630 $ 67,636 Noncontrolling interests distributions 105 153 $ 74,735 $ 67,789 |
Schedule of accounts payable and accrued expenses | D. Accounts payable and accrued expenses consist of the following at: September 30, 2019 December 31, 2018 Notes payable - interest payable $ 65,522 $ 73,094 Property taxes payable 24,334 14,511 Derivative liabilities and payables - at fair value 17,674 7,001 Value-added tax payable 13,168 — Accrued costs on properties under development 7,259 8,137 Mortgages, term loans, and credit line - interest payable 1,097 1,596 Other items 34,100 29,426 $ 163,154 $ 133,765 |
Schedule of acquired lease intangible liabilities, net | E. Lease intangible liabilities, net, consist of the following at: September 30, 2019 December 31, 2018 Below-market leases $ 434,771 $ 404,938 Accumulated amortization of below-market leases (108,599 ) (94,072 ) $ 326,172 $ 310,866 |
Schedule of other liabilities | F. Other liabilities consist of the following at: September 30, 2019 December 31, 2018 Lease liability - operating leases, net $ 124,349 $ — Rent received in advance and other deferred revenue 123,854 115,380 Security deposits 6,286 6,093 Lease liability - financing leases 5,868 — Capital lease obligation — 5,636 $ 260,357 $ 127,109 |
Investments in Real Estate (Tab
Investments in Real Estate (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Real Estate Investments, Net [Abstract] | |
Schedule of acquisitions | Below is a summary of our acquisitions for the nine months ended September 30, 2019 : Number of Properties Square Feet Investment Weighted Average Lease Term (Years) Initial Average Cash Lease Yield Nine months ended September 30, 2019 (1) Acquisitions - U.S. (in 38 states) 214 6.2 $ 1,412.9 15.7 6.5 % Acquisitions - U.K. (2) 13 1.2 576.8 15.0 5.2 % Total Acquisitions 227 7.4 1,989.7 15.5 6.1 % Properties under Development - U.S. 14 0.4 36.0 16.0 7.4 % Total (3) 241 7.8 $ 2,025.7 15.5 6.2 % (1) None of our investments during 2019 caused any one tenant to be 10% or more of our total assets at September 30, 2019 . All of our 2019 investments in acquired properties are 100% leased at the acquisition date. (2) Represents investments of £ 456.1 million during the nine months ended September 30, 2019 multiplied by the applicable exchange rate on the date of acquisition. (3) The tenants occupying the new properties operate in 19 industries, and are 89.6% retail and 10.4% industrial, based on rental revenue. Approximately 25% of the rental revenue generated from acquisitions during the first nine months of 2019 is from investment grade rated tenants and their subsidiaries. Below is a summary of our acquisitions for the nine months ended September 30, 2018: Number of Properties Square Feet Investment Weighted Average Lease Term (Years) Initial Average Cash Lease Yield Nine months ended September 30, 2018 (1) Acquisitions - U.S. (in 37 states) 580 3.2 $ 1,395.7 14.6 6.3 % Properties under Development - U.S. 11 1.1 69.7 10.9 6.8 % Total (2) 591 4.3 $ 1,465.4 14.4 6.3 % (1) All of our 2018 investments were 100% leased upon acquisition. (2) The tenants occupying the new properties operated in 20 industries, and the property types consisted of 96.1% retail and 3.9% industrial, based on rental revenue. Approximately 67% of the rental revenue generated from acquisitions during the first nine months of 2018 was from investment grade rated tenants and their subsidiaries. |
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 September 30, 2019 (dollars in thousands): Net decrease to rental revenue Increase to amortization expense 2019 $ (5,497 ) $ 26,439 2020 (21,304 ) 102,681 2021 (20,145 ) 94,527 2022 (18,603 ) 82,915 2023 (17,175 ) 72,497 Thereafter (78,139 ) 447,704 Totals $ (160,863 ) $ 826,763 |
Mortgages Payable (Tables)
Mortgages Payable (Tables) - Mortgages Payable | 9 Months Ended |
Sep. 30, 2019 | |
Debt | |
Summary of mortgages payable | The following table summarizes our mortgages payable as of September 30, 2019 and December 31, 2018 , respectively (dollars in thousands): As Of Number of Properties (1) Weighted Average Stated Interest Rate (2) Weighted Average Effective Interest Rate (3) Weighted Average Remaining Years Until Maturity Remaining Principal Balance Unamortized Premium and Deferred Financing Costs Balance, net Mortgage Payable Balance 9/30/2019 59 5.2 % 4.6 % 2.6 $ 278,882 $ 3,171 $ 282,053 12/31/2018 60 5.1 % 4.6 % 3.2 $ 298,377 $ 4,192 $ 302,569 (1) At September 30, 2019 , there were 25 mortgages on 59 properties. At December 31, 2018 , there were 26 mortgages on 60 properties. The mortgages require monthly payments with principal payments due at maturity. At September 30, 2019 , the mortgages were at fixed interest rates, except for one variable rate mortgage on one property totaling $7.1 million , which has been subsequently swapped to a fixed interest rate. At December 31, 2018 , the mortgages were at fixed rates, except for two mortgages on two properties totaling $23.3 million . After factoring in arrangements which limit our exposure to interest rate risk and effectively fix our per annum interest rates, our mortgage debt subject to variable rates totaled $16.0 million at December 31, 2018 . (2) Stated interest rates ranged from 3.8% to 6.9% at September 30, 2019 and December 31, 2018 . (3) Effective interest rates ranged from 3.8% to 7.7% at September 30, 2019 , while effective interest rates ranged from 1.1% to 7.7% at December 31, 2018 . |
Schedule of maturity of debt, net | The following table summarizes the maturity of mortgages payable, excluding net premiums of $3.3 million and deferred financing costs of $143,000 , as of September 30, 2019 (dollars in millions): Year of Maturity Principal 2019 $ 1.2 2020 82.4 2021 67.0 2022 109.7 2023 6.7 Thereafter 11.9 Totals $ 278.9 |
Notes Payable (Tables)
Notes Payable (Tables) - Notes and bonds payable | 9 Months Ended |
Sep. 30, 2019 | |
Debt | |
Schedule of unsecured notes and bonds | Our senior unsecured notes and bonds consist of the following, sorted by maturity date (dollars in millions): September 30, 2019 December 31, 2018 5.750% notes, issued in June 2010 and due in January 2021 $ 250 $ 250 3.250% notes, $450 issued in October 2012 and $500 issued in December 2017, both due in October 2022 950 950 4.650% notes, issued in July 2013 and due in August 2023 750 750 3.875% notes, issued in June 2014 and due in July 2024 350 350 3.875% notes, issued in April 2018 and due in April 2025 500 500 4.125% notes, $250 issued in September 2014 and $400 issued in March 2017, both due in October 2026 650 650 3.000% notes, issued in October 2016 and due in January 2027 600 600 3.650% notes, issued in December 2017 and due in January 2028 550 550 3.250% notes, issued in June 2019 and due in June 2029 500 — 2.730% notes, issued in May 2019 and due in May 2034 (1) 387 — 5.875% bonds, $100 issued in March 2005 and $150 issued in June 2011, both due in March 2035 250 250 4.650% notes, $300 issued in March 2017 and $250 issued in December 2017, both due in March 2047 550 550 Total principal amount 6,287 5,400 Unamortized net original issuance premiums and deferred financing costs (31 ) (23 ) $ 6,256 $ 5,377 (1) Represents the principal balance (in U.S. dollars) of the Sterling-denominated private placement of £315.0 million based on the applicable exchange rate on September 30, 2019 . |
Schedule of maturity of debt, net | The following table summarizes the maturity of our notes and bonds payable as of September 30, 2019 , excluding net unamortized original issuance premiums and deferred financing costs (dollars in millions): Year of Maturity Principal 2021 $ 250 2022 950 2023 750 Thereafter 4,337 Totals $ 6,287 |
Issuances of Common Stock (Tabl
Issuances of Common Stock (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Schedule of common stock issuances pursuant to our DRSPP program | The following table outlines common stock issuances pursuant to our DRSPP program (dollars in millions): Three Months Ended September 30, Nine Months Ended September 30, Inception to Date 2019 2018 2019 2018 Shares of common stock issued under the DRSPP program 29,801 38,011 89,219 131,072 14,319,029 Gross proceeds $ 2.1 $ 2.2 $ 6.3 $ 7.0 $ 677.2 |
Schedule of common stock issuance pursuant to our ATM program | The following table outlines the common stock issuance pursuant to our ATM program (dollars in millions): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Shares of common stock issued under the ATM program 7,663,383 5,055,343 9,370,078 10,630,616 Gross proceeds $ 570.3 $ 290.9 $ 694.4 $ 588.9 |
Noncontrolling Interests (Table
Noncontrolling Interests (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
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 September 30, 2019 (dollars in thousands): Tau Operating Partnership units (1) Realty Income, L.P. units (2) Other Noncontrolling Interests Total Carrying value at December 31, 2018 $ 13,356 $ 17,912 $ 968 $ 32,236 Reallocation of equity — 653 — 653 Redemptions (13,356 ) — (901 ) (14,257 ) Shares issued in conjunction with acquisition — 6,286 — 6,286 Distributions — (904 ) (76 ) (980 ) Allocation of net income — 731 9 740 Carrying value at September 30, 2019 $ — $ 24,678 $ — $ 24,678 (1) 317,022 Tau Operating Partnership units were issued on January 22, 2013. No units remained outstanding as of September 30, 2019 , and 317,022 units remained outstanding as of December 31, 2018 . (2) 534,546 Realty Income, L.P. units were issued on June 27, 2013, 242,007 units were issued on March 30, 2018, 131,790 units were issued on April 30, 2018, and 89,322 units were issued on March 28, 2019. 463,119 and 373,797 remained outstanding as of September 30, 2019 and December 31, 2018 , respectively. |
Summary selected financial data of consolidated VIEs | Below is a summary of selected financial data of consolidated VIEs at September 30, 2019 and December 31, 2018 (in thousands): September 30, 2019 December 31, 2018 Net real estate $ 617,517 $ 2,903,093 Total assets 700,156 3,259,495 Total debt — 191,565 Total liabilities 87,797 320,800 |
Financial Instruments and Fai_2
Financial Instruments and Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value by balance sheet groupings | We believe that the carrying values reflected in our consolidated balance sheets reasonably approximate the fair values for cash and cash equivalents, accounts receivable, escrow deposits, loans receivable, line of credit payable, term loans and all other liabilities, due to their short-term nature or interest rates and terms that are consistent with market, except for our mortgages payable assumed in connection with acquisitions and our senior notes and bonds payable, which are disclosed as follows (dollars in millions): September 30, 2019 Carrying value Estimated fair value Mortgages payable assumed in connection with acquisitions (1) $ 278.9 $ 289.5 Notes and bonds payable (2) 6,287.1 6,839.7 December 31, 2018 Carrying value Estimated fair value Mortgages payable assumed in connection with acquisitions (1) $ 298.4 $ 305.7 Notes and bonds payable (2) 5,400.0 5,430.0 (1) Excludes non-cash net premiums recorded on the mortgages payable. The unamortized balance of these net premiums was $3.3 million at September 30, 2019 , and $4.4 million at December 31, 2018 . Also excludes deferred financing costs of $143,000 at September 30, 2019 and $183,000 at December 31, 2018 . (2) Excludes non-cash original issuance premiums and discounts recorded on notes payable. The unamortized balance of the net original issuance premiums was $6.6 million at September 30, 2019 , and $10.5 million at December 31, 2018 . Also excludes deferred financing costs of $37.3 million at September 30, 2019 and $33.7 million at December 31, 2018 . |
Schedule of derivative financial instruments | The following table summarizes the terms and fair values of our derivative financial instruments at September 30, 2019 and December 31, 2018 (dollars in millions): Derivative Type Hedge Designation Notional Amount Strike Effective Date Maturity Date Fair Value - asset (liability) September 30, December 31, September 30, December 31, 2019 2018 2019 2018 Interest rate swap Cash flow $ 7.1 $ 7.2 6.03% 09/25/2012 09/03/2021 $ (0.3 ) $ (0.2 ) Interest rate swap Cash flow 250.0 250.0 1.72% 06/30/2015 06/30/2020 — 3.0 Interest rate swap Cash flow 250.0 250.0 3.04% 10/24/2018 03/24/2024 (17.4 ) (6.8 ) Cross-currency swap (1) Cash flow 41.6 — (2) 05/20/2019 05/22/2034 2.9 — Cross-currency swap (1) Cash flow 41.6 — (3) 05/20/2019 05/22/2034 2.9 — Cross-currency swap (1) Cash flow 41.6 — (4) 05/20/2019 05/22/2034 2.4 — Cross-currency swap (1) Cash flow 41.6 — (5) 05/20/2019 05/22/2034 2.2 — $ 673.5 $ 507.2 $ (7.3 ) $ (4.0 ) (1) Represents British Pound Sterling, or GBP, United States Dollar, or USD, cross-currency swap. (2) GBP fixed rates initially at 4.82% and escalating to 10.96% , and USD fixed rate at 9.800% . (3) GBP fixed rates initially at 4.82% and escalating to 10.96% , and USD fixed rate at 9.803% . (4) GBP fixed rates initially at 4.82% and escalating to 10.96% , and USD fixed rate at 9.745% . (5) GBP fixed rates initially at 4.82% and escalating to 10.96% , and USD fixed rate at 9.755% . |
Operating Leases (Tables)
Operating Leases (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Schedule of minimum future annual rents to be received on operating leases | At September 30, 2019 , minimum future annual rents to be received on the operating leases for the next five years and thereafter are as follows (dollars in thousands): 2019 $ 358,249 2020 1,420,029 2021 1,376,492 2022 1,309,148 2023 1,227,605 Thereafter 8,346,953 Total $ 14,038,476 |
Gain on Sales of Real Estate (T
Gain on Sales of Real Estate (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Gain (Loss) on Sale of Investments [Abstract] | |
Schedule of properties sold | The following table summarizes our properties sold during the periods indicated below (dollars in millions): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Number of properties 27 20 64 60 Net sales proceeds $ 21.5 $ 35.5 $ 72.6 $ 83.0 Gain on sales of real estate $ 1.7 $ 7.8 $ 15.8 $ 18.8 |
Impairments (Tables)
Impairments (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of provisions for impairment | The following table summarizes our provisions for impairment during the periods indicated below (dollars in millions): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Total provisions for impairment $ 13.5 $ 6.9 $ 31.2 $ 25.0 Number of properties: Classified as held for sale 9 — 9 — Classified as held for investment 2 1 4 3 Sold 16 18 28 36 |
Distributions Paid and Payable
Distributions Paid and Payable (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Dividends [Abstract] | |
Summary of monthly distributions paid | The following is a summary of monthly distributions paid per common share for the first nine months of 2019 and 2018 : Month 2019 2018 January $ 0.2210 $ 0.2125 February 0.2255 0.2190 March 0.2255 0.2190 April 0.2260 0.2195 May 0.2260 0.2195 June 0.2260 0.2195 July 0.2265 0.2200 August 0.2265 0.2200 September 0.2265 0.2200 Total $ 2.0295 $ 1.9690 |
Net Income per Common Share (Ta
Net Income per Common Share (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of 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 | 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 September 30, Nine months ended September 30, 2019 2018 2019 2018 Weighted average shares used for the basic net income per share computation 319,945,932 290,664,368 311,556,279 286,599,191 Incremental shares from share-based compensation 317,085 225,796 309,131 189,072 Weighted average partnership common units convertible to common shares that were dilutive — 317,022 — 317,022 Weighted average shares used for diluted net income per share computation 320,263,017 291,207,186 311,865,410 287,105,285 Unvested shares from share-based compensation that were anti-dilutive 7,892 261 6,529 1,378 Weighted average partnership common units convertible to common shares that were anti-dilutive 463,119 397,690 434,981 271,890 |
Supplemental Disclosures of C_2
Supplemental Disclosures of Cash Flow Information (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Supplemental Cash Flow Information [Abstract] | |
Schedule of reconciliation of cash, cash equivalents and restricted cash | Per the requirements of ASU 2016-18 (Topic 230, Statement of Cash Flows ), 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): September 30, 2019 September 30, 2018 Cash and cash equivalents shown in the consolidated balance sheets $ 236,064 $ 6,666 Restricted escrow deposits (1) 11,474 1,533 Impounds related to mortgages payable (1) 11,751 7,529 Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows $ 259,289 $ 15,728 (1) Included within other assets, net on the consolidated balance sheets (see note 3). 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. |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Schedule of reconciliation of assets from segment to consolidated | The following tables set forth certain information regarding the properties owned by us, classified according to the business of the respective tenants (dollars in thousands): Assets, as of: September 30, 2019 December 31, 2018 Segment net real estate: Automotive service $ 283,422 $ 210,668 Automotive tire services 232,712 238,939 Beverages 280,427 284,910 Child care 208,788 151,640 Convenience stores 1,717,039 1,756,732 Dollar stores 1,123,086 1,117,250 Drug stores 1,447,853 1,490,261 Financial services 394,771 414,613 General merchandise 471,376 317,424 Grocery stores - U.S. (1) 865,039 774,526 Grocery stores - U.K. (1) 449,200 — Health and fitness 995,315 882,515 Home improvement 487,219 424,494 Restaurants-casual dining 529,316 559,616 Restaurants-quick service 1,008,276 964,980 Theaters 889,931 555,990 Transportation services 735,020 758,133 Wholesale club 402,478 412,203 Other non-reportable segments 2,625,458 2,528,623 Total segment net real estate 15,146,726 13,843,517 Intangible assets: Automotive service 58,974 61,951 Automotive tire services 7,474 8,696 Beverages 1,573 1,765 Child care 20,448 12,277 Convenience stores 104,901 108,714 Dollar stores 48,294 48,842 Drug stores 155,827 165,558 Financial services 17,843 20,426 General merchandise 60,080 43,122 Grocery stores - U.S. (1) 170,231 144,551 Grocery stores - U.K. (1) 108,863 — Health and fitness 68,738 71,609 Home improvement 72,128 57,928 Restaurants-casual dining 16,944 18,153 Restaurants-quick service 52,662 54,448 Theaters 35,989 25,811 Transportation services 64,758 73,577 Wholesale club 24,150 26,484 Other non-reportable segments 223,921 255,685 Goodwill: Automotive service 436 437 Automotive tire services 862 862 Child care 4,825 4,863 Convenience stores 1,978 1,983 Restaurants-casual dining 1,794 1,841 Restaurants-quick service 1,040 1,052 Other non-reportable segments 3,568 3,592 Other corporate assets 704,877 202,739 Total assets $ 17,179,904 $ 15,260,483 |
Schedule of reconciliation of revenue from segments to consolidated | Three months ended September 30, Nine months ended September 30, Revenue 2019 2018 2019 2018 Segment rental revenue: Automotive service $ 8,505 $ 7,120 $ 23,735 $ 21,150 Automotive tire services 7,766 7,460 23,517 22,607 Beverages 7,988 7,908 23,819 23,581 Child care 7,837 5,255 23,425 16,172 Convenience stores 41,286 39,384 123,932 101,254 Dollar stores 25,213 23,903 75,311 70,390 Drug stores 31,902 32,431 97,414 97,206 Financial services 7,585 7,850 22,997 21,741 General merchandise 9,594 7,453 25,115 21,613 Grocery stores - U.S. (1) 17,673 16,095 51,009 47,433 Grocery stores - U.K. (1) 6,618 — 9,533 — Health and fitness 26,437 23,754 78,915 70,812 Home improvement 10,950 9,678 31,430 28,261 Restaurants-casual dining 10,939 12,355 33,614 34,344 Restaurants-quick service 21,880 18,673 65,124 52,035 Theaters 24,002 17,479 62,567 52,814 Transportation services 16,109 16,105 48,327 47,653 Wholesale club 9,468 9,345 28,525 28,218 Other non-reportable segments and tenant reimbursements 80,560 75,004 242,292 223,081 Rental (including reimbursable) 372,312 337,252 1,090,601 980,365 Other 1,935 829 3,461 4,897 Total revenue $ 374,247 $ 338,081 $ 1,094,062 $ 985,262 (1) During 2019, we acquired 13 grocery stores located in the U.K. Grocery stores in the U.S. and U.K. are managed as two separate operating segments. |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Minimum Future Rental Payments | We have certain properties that are subject to ground leases which are accounted for as operating leases. At September 30, 2019 , minimum future rental payments for the next five years and thereafter are as follows (dollars in millions): Ground Leases (1) Ground Leases (2) Total 2019 $ 0.4 $ 3.4 $ 3.8 2020 1.5 13.5 15.0 2021 1.3 13.2 14.5 2022 1.2 13.1 14.3 2023 1.2 13.1 14.3 Thereafter 19.9 82.1 102.0 Total $ 25.5 $ 138.4 $ 163.9 Present value adjustment for remaining lease payments (3) (39.6 ) Lease liability - operating leases, net $ 124.3 (1) Realty Income currently pays the ground lessors directly for the rent under the ground leases. (2) Our tenants, who are generally sub-tenants under the ground leases, are responsible for paying the rent under these ground leases. In the event a tenant fails to pay the ground lease rent, we are primarily responsible for the rent payment. (3 ) The range of discount rates used to calculate the present value of the lease payments is 3.09% to 5.50% . At September 30, 2019 , the weighted average discount rate is 4.29% and the weighted average remaining lease term is 12.5 years . The discount rates are derived using a hypothetical corporate credit curve for the ground leases based on our outstanding senior notes and relevant market data. The discount rates are specific for individual leases primarily based on the lease term. |
Management Statement - Narrativ
Management Statement - Narrative (Details) ft² in Millions | Sep. 30, 2019ft²stateproperty |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of properties owned | property | 5,964 |
Number of U.S. states where properties are owned (states) | state | 49 |
Leasable square feet (sq ft) | ft² | 100.5 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies and Procedures and Recent Accounting Pronouncements - Narrative (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Accounting Policies [Abstract] | ||
Impairment on existing goodwill | $ 0 | $ 0 |
Supplemental Detail for Certa_3
Supplemental Detail for Certain Components of Consolidated Balance Sheets - Lease Intangible Assets, Net (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Lease intangible assets, net | ||
Total acquired lease intangible assets, net | $ 1,313,798 | $ 1,199,597 |
In-place leases | ||
Lease intangible assets, net | ||
Lease intangible assets, gross | 1,439,816 | 1,321,979 |
Accumulated amortization of lease intangible assets | (613,053) | (546,573) |
Above-market leases | ||
Lease intangible assets, net | ||
Lease intangible assets, gross | 677,257 | 583,109 |
Accumulated amortization of lease intangible assets | $ (190,222) | $ (158,918) |
Supplemental Detail for Certa_4
Supplemental Detail for Certain Components of Consolidated Balance Sheets - Other Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 | Sep. 30, 2018 |
Other assets, net | ||||
Right of use asset - operating leases, net | $ 132,000 | |||
Financing receivables | $ 54,022 | $ 0 | ||
Right of use asset - financing leases | 36,901 | |||
Credit facility origination costs, net | 12,339 | 14,248 | ||
Prepaid expenses | 14,126 | 11,595 | ||
Derivative assets and receivables - at fair value | 13,617 | 3,100 | ||
Impounds related to mortgages payable | 11,751 | 9,555 | $ 7,529 | |
Restricted escrow deposits | 11,474 | 1,129 | $ 1,533 | |
Value-added tax receivable | 10,303 | 0 | ||
Non-refundable escrow deposits | 7,173 | 200 | ||
Corporate assets, net | 5,331 | 5,681 | ||
Other items | 5,578 | 1,853 | ||
Total other assets, net | 305,369 | $ 47,361 | ||
Other assets, net | ||||
Other assets, net | ||||
Right of use asset - operating leases, net | $ 122,754 |
Supplemental Detail for Certa_5
Supplemental Detail for Certain Components of Consolidated Balance Sheets - Distributions Payable (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Distributions payable | ||
Distributions payable | $ 74,735 | $ 67,789 |
Noncontrolling interests | ||
Distributions payable | ||
Distributions payable | 105 | 153 |
Common stock | ||
Distributions payable | ||
Distributions payable | $ 74,630 | $ 67,636 |
Supplemental Detail for Certa_6
Supplemental Detail for Certain Components of Consolidated Balance Sheets - Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Accounts payable and accrued expenses consist of the following at: | ||
Property taxes payable | $ 24,334 | $ 14,511 |
Derivative liabilities and payables - at fair value | 17,674 | 7,001 |
Value-added tax payable | 13,168 | 0 |
Accrued costs on properties under development | 7,259 | 8,137 |
Other items | 34,100 | 29,426 |
Total accounts payable and accrued expenses | 163,154 | 133,765 |
Notes payable | ||
Accounts payable and accrued expenses consist of the following at: | ||
Interest payable | 65,522 | 73,094 |
Mortgages, term loans, and credit line | ||
Accounts payable and accrued expenses consist of the following at: | ||
Interest payable | $ 1,097 | $ 1,596 |
Supplemental Detail for Certa_7
Supplemental Detail for Certain Components of Consolidated Balance Sheets - Lease Intangible Liabilities, Net (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Lease intangible liabilities, net, consist of the following at: | ||
Below-market leases | $ 434,771 | $ 404,938 |
Accumulated amortization of below-market leases | (108,599) | (94,072) |
Total lease intangible liabilities, net | $ 326,172 | $ 310,866 |
Supplemental Detail for Certa_8
Supplemental Detail for Certain Components of Consolidated Balance Sheets - Other Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Other liabilities consist of the following at: | |||
Lease liability - operating leases, net | $ 124,349 | $ 132,000 | |
Rent received in advance and other deferred revenue | 123,854 | $ 115,380 | |
Security deposits | 6,286 | 6,093 | |
Lease liability - financing leases | 5,868 | ||
Capital lease obligation | 5,636 | ||
Total other liabilities | $ 260,357 | $ 127,109 |
Investments in Real Estate - Sc
Investments in Real Estate - Schedule of Acquisitions (Details) £ in Millions, ft² in Millions, $ in Millions | 9 Months Ended | ||
Sep. 30, 2019GBP (£)ft²stateproperty | Sep. 30, 2019USD ($)ft²stateproperty | Sep. 30, 2018USD ($)ft²property | |
Real Estate [Line Items] | |||
Number of properties | property | 241 | 241 | 591 |
Square feet (sq ft) | ft² | 7.8 | 7.8 | 4.3 |
Investment | $ | $ 2,025.7 | $ 1,465.4 | |
Weighted average lease term (years) | 15 years 6 months | 15 years 6 months | 14 years 4 months 24 days |
Initial average cash lease yield (percent) | 6.20% | 6.20% | 6.30% |
New properties | |||
Real Estate [Line Items] | |||
Number of properties, new | property | 227 | 227 | |
Square feet (sq ft) | ft² | 7.4 | 7.4 | |
Investment | $ | $ 1,989.7 | ||
Weighted average lease term (years) | 15 years 6 months | 15 years 6 months | |
Initial average cash lease yield (percent) | 6.10% | 6.10% | |
New properties | U.S. | |||
Real Estate [Line Items] | |||
Number of properties, new | property | 214 | 214 | 580 |
Number of states | 38 | 38 | 37 |
Square feet (sq ft) | ft² | 6.2 | 6.2 | 3.2 |
Investment | $ | $ 1,412.9 | $ 1,395.7 | |
Weighted average lease term (years) | 15 years 8 months 12 days | 15 years 8 months 12 days | 14 years 7 months 6 days |
Initial average cash lease yield (percent) | 6.50% | 6.50% | 6.30% |
New properties | U.K. | |||
Real Estate [Line Items] | |||
Number of properties, new | property | 13 | 13 | |
Square feet (sq ft) | ft² | 1.2 | 1.2 | |
Investment | £ 456.1 | $ 576.8 | |
Weighted average lease term (years) | 15 years | 15 years | |
Initial average cash lease yield (percent) | 5.20% | 5.20% | |
Properties under development | U.S. | |||
Real Estate [Line Items] | |||
Number of properties, under development | property | 14 | 14 | 11 |
Square feet (sq ft) | ft² | 0.4 | 0.4 | 1.1 |
Investment | $ | $ 36 | $ 69.7 | |
Weighted average lease term (years) | 16 years | 16 years | 10 years 10 months 24 days |
Initial average cash lease yield (percent) | 7.40% | 7.40% | 6.80% |
Investments in Real Estate - Ac
Investments in Real Estate - Acquisitions Narrative (Details) £ in Millions | 9 Months Ended | |||
Sep. 30, 2019GBP (£)property_investmentindustry | Sep. 30, 2019USD ($)property_investmentindustry | Sep. 30, 2018USD ($)industry | Jan. 01, 2019USD ($) | |
Investments in real estate properties | ||||
Number of investments in properties that caused any tenant to be 10% of more of total assets | property_investment | 0 | 0 | ||
Rental revenue generated from acquisitions from investment grade tenants (as a percent) | 25.00% | 25.00% | 67.00% | |
Value of properties acquired during the period | $ 2,025,700,000 | $ 1,465,400,000 | ||
Right-of-use assets | $ 132,000,000 | |||
Industrial | ||||
Investments in real estate properties | ||||
Property type acquired based on rental revenue (as a percent) | 3.90% | |||
Land | ||||
Investments in real estate properties | ||||
Right-of-use assets | $ 17,400,000 | |||
New and under development | ||||
Investments in real estate properties | ||||
Leased area (as a percent) | 100.00% | 100.00% | ||
New properties | ||||
Investments in real estate properties | ||||
Number of industries in which tenants operate | industry | 19 | 19 | 20 | |
Value of properties acquired during the period | $ 1,989,700,000 | |||
New properties | Retail | ||||
Investments in real estate properties | ||||
Property type acquired based on rental revenue (as a percent) | 89.60% | 89.60% | 96.10% | |
New properties | Industrial | ||||
Investments in real estate properties | ||||
Property type acquired based on rental revenue (as a percent) | 10.40% | 10.40% | ||
Real Estate Investment | ||||
Investments in real estate properties | ||||
Value of properties acquired during the period | $ 2,000,000,000 | $ 1,470,000,000 | ||
Property investments allocated to land | 477,800,000 | 528,800,000 | ||
Property investments allocated to buildings and improvements | 1,290,000,000 | 854,900,000 | ||
Property investments allocated to lease-related intangible assets | 226,100,000 | 115,600,000 | ||
Property investments allocated to financing receivables | 54,400,000 | |||
Property investments allocated to lease-related intangible liabilities | 33,500,000 | 34,000,000 | ||
Property investments allocated to prepaid rent related to certain below-market leases | 8,500,000 | |||
Contingent consideration associated with acquisition | 0 | 0 | ||
Revenue generated from acquired properties during the period | 47,100,000 | 31,400,000 | ||
Net income generated from acquired properties during the period | 21,900,000 | $ 16,800,000 | ||
U.K. | New properties | ||||
Investments in real estate properties | ||||
Value of properties acquired during the period | £ 456.1 | $ 576,800,000 |
Investments in Real Estate - In
Investments in Real Estate - Investments in Existing Properties (Details) - Investments in existing properties - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Investments in real estate properties | ||
Improvements | $ 11,000 | $ 12,300 |
Re-leasing costs | 1,900 | 2,800 |
Recurring capital expenditures | 577 | 529 |
Nonrecurring building improvements | $ 8,500 | $ 8,900 |
Investments in Real Estate - Pr
Investments in Real Estate - Properties with Existing Leases Narrative (Details) $ in Millions | 9 Months Ended | |
Sep. 30, 2019USD ($)property | Sep. 30, 2018USD ($)property | |
Real Estate Properties [Line Items] | ||
Value of properties acquired during the period | $ 2,025.7 | $ 1,465.4 |
Number of properties acquired during the period | property | 241 | 591 |
Rental Revenue | ||
Real Estate Properties [Line Items] | ||
Amortization of above and below market Leases | $ 14.3 | $ 12.4 |
In-place leases | ||
Real Estate Properties [Line Items] | ||
Depreciation and amortization expense | 84.5 | 79.8 |
Real Estate Investment | ||
Real Estate Properties [Line Items] | ||
Value of properties acquired during the period | 2,000 | 1,470 |
Real Estate Investment | Properties with existing leases | In-place leases | ||
Real Estate Properties [Line Items] | ||
Value of properties acquired during the period | $ 1,230 | $ 307.5 |
Number of properties acquired during the period | property | 100 | 147 |
Investments in Real Estate - Es
Investments in Real Estate - Estimated Impact of Amortization of Lease Intangibles (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Net decrease to rental revenue | |
2019 | $ (5,497) |
2020 | (21,304) |
2021 | (20,145) |
2022 | (18,603) |
2023 | (17,175) |
Thereafter | (78,139) |
Totals | (160,863) |
Increase to amortization expense | |
2019 | 26,439 |
2020 | 102,681 |
2021 | 94,527 |
2022 | 82,915 |
2023 | 72,497 |
Thereafter | 447,704 |
Totals | $ 826,763 |
Credit Facility - Narrative (De
Credit Facility - Narrative (Details) | 1 Months Ended | 9 Months Ended | ||
Oct. 31, 2018USD ($) | Sep. 30, 2019USD ($)extension | Sep. 30, 2018currency | Dec. 31, 2018USD ($) | |
Credit facility | ||||
Credit facility origination costs | $ 12,339,000 | $ 14,248,000 | ||
Outstanding balance | 0 | 252,000,000 | ||
Unsecured debt | Revolving Credit Facility | ||||
Credit facility | ||||
Maximum borrowing capacity | $ 3,000,000,000 | |||
Number of extensions | extension | 2 | |||
Term of extension option | 6 months | |||
Number of currencies allowable per facility | currency | 14 | |||
Accordion expansion option | $ 1,000,000,000 | |||
Outstanding balance | 0 | $ 252,000,000 | ||
Current borrowing capacity | $ 3,000,000,000 | |||
Weighted average borrowing rate during the period (as a percent) | 3.20% | 2.80% | ||
Weighted average interest rate at the end of the period (as a percent) | 3.20% | |||
Unsecured debt | Revolving Credit Facility | Other assets, net | ||||
Credit facility | ||||
Credit facility origination costs | $ 12,300,000 | $ 14,200,000 | ||
Unsecured debt | Revolving Credit Facility | LIBOR | ||||
Credit facility | ||||
Basis spread on variable rate (as a percent) | 0.775% | |||
Commitment fee (as a percent) | 0.125% | |||
All-in drawn variable interest rate (as a percent) | 0.90% | |||
Term Loans | $250 million senior unsecured term loan due March 2024 | ||||
Credit facility | ||||
Face amount of loan | $ 250,000,000 | $ 250,000,000 | ||
Basis spread on variable rate (as a percent) | 0.85% |
Term Loans - Narrative (Details
Term Loans - Narrative (Details) - Term Loans | 1 Months Ended | 12 Months Ended | |||
Oct. 31, 2018USD ($) | Jun. 30, 2015USD ($) | Jan. 31, 2013USD ($) | Dec. 31, 2018USD ($)extension | Sep. 30, 2019USD ($) | |
Debt | |||||
Deferred finance costs balance | $ 1,400,000 | $ 1,100,000 | |||
$250 million senior unsecured term loan due March 2024 | |||||
Debt | |||||
Face amount of loan | $ 250,000,000 | $ 250,000,000 | |||
Basis spread on variable rate (as a percent) | 0.85% | ||||
Effective yield (as a percent) | 3.89% | ||||
Deferred financing costs incurred | $ 1,100,000 | ||||
$250 million senior unsecured term loan due June 2020 | |||||
Debt | |||||
Face amount of loan | $ 250,000,000 | ||||
Basis spread on variable rate (as a percent) | 0.90% | ||||
Effective yield (as a percent) | 2.62% | ||||
Deferred financing costs incurred | $ 1,200,000 | ||||
$70 million senior unsecured term loan | |||||
Debt | |||||
Face amount of loan | $ 70,000,000 | ||||
Basis spread on variable rate (as a percent) | 1.10% | 0.90% | |||
Effective yield (as a percent) | 2.05% | ||||
Number of optional extension periods | extension | 2 | ||||
Loan extension period | 6 months |
Mortgages Payable - Narrative (
Mortgages Payable - Narrative (Details) - Mortgages Payable $ in Thousands | 9 Months Ended | ||
Sep. 30, 2019USD ($)mortgageproperty | Sep. 30, 2018USD ($)mortgage | Dec. 31, 2018USD ($)mortgageproperty | |
Debt | |||
Principal amount repaid | $ 19,500 | $ 14,600 | |
Number of mortgages assumed | mortgage | 0 | 0 | |
Deferred financing costs | $ 143 | $ 183 | |
Number of mortgages | mortgage | 25 | 26 | |
Number of properties with mortgages | property | 59 | 60 | |
Total principal amount | $ 278,882 | $ 298,377 | |
Effective yield (as a percent) | 4.60% | 4.60% | |
Minimum | |||
Debt | |||
Stated interest rate (as a percent) | 3.80% | 3.80% | |
Effective yield (as a percent) | 3.80% | 1.10% | |
Maximum | |||
Debt | |||
Stated interest rate (as a percent) | 6.90% | 6.90% | |
Effective yield (as a percent) | 7.70% | 7.70% | |
Mortgages repaid in full | |||
Debt | |||
Principal amount repaid | $ 15,800 | $ 11,000 | |
Number of mortgages repaid | mortgage | 1 | 1 | |
Variable rate mortgages | |||
Debt | |||
Number of mortgages | mortgage | 1 | 2 | |
Number of properties with mortgages | property | 1 | 2 | |
Total principal amount | $ 7,100 | $ 23,300 | |
Variable rate mortgages after interest rate arrangements | |||
Debt | |||
Total principal amount | $ 16,000 |
Mortgages Payable - Summary of
Mortgages Payable - Summary of Mortgages Payable (Details) - Mortgages Payable $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019USD ($)property | Dec. 31, 2018USD ($)property | |
Debt | ||
Number of properties | property | 59 | 60 |
Weighted Average Stated Interest Rate (as a percent) | 5.20% | 5.10% |
Weighted Average Effective Interest Rate (as a percent) | 4.60% | 4.60% |
Weighted Average Remaining Years Until Maturity | 2 years 7 months 6 days | 3 years 2 months 12 days |
Remaining Principal Balance | $ 278,882 | $ 298,377 |
Unamortized Premium and Deferred Finance Costs Balance, net | 3,171 | 4,192 |
Net payable amount | $ 282,053 | $ 302,569 |
Mortgages Payable - Summary o_2
Mortgages Payable - Summary of Maturities (Details) - Mortgages Payable - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Debt | ||
Unamortized net premiums | $ 3,300 | |
Deferred financing costs | 143 | $ 183 |
Maturity of mortgages payable, excluding net premiums | ||
2019 | 1,200 | |
2020 | 82,400 | |
2021 | 67,000 | |
2022 | 109,700 | |
2023 | 6,700 | |
Thereafter | 11,900 | |
Totals | $ 278,882 | $ 298,377 |
Notes Payable - Narrative (Deta
Notes Payable - Narrative (Details) - Notes and bonds payable | 9 Months Ended |
Sep. 30, 2019 | |
Debt | |
Weighted average interest rate (as a percent) | 3.90% |
Weighted average remaining years until maturity | 8 years 6 months |
Notes Payable - General (Detail
Notes Payable - General (Details) - Notes and bonds payable | Sep. 30, 2019GBP (£) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | May 31, 2019GBP (£) | Dec. 31, 2018USD ($) | Apr. 30, 2018USD ($) | Dec. 31, 2017USD ($) | Mar. 31, 2017USD ($) | Sep. 30, 2014USD ($) | Oct. 31, 2012USD ($) | Jun. 30, 2011USD ($) | Mar. 31, 2005USD ($) |
Debt | ||||||||||||
Total principal amount | $ 6,287,000,000 | $ 5,400,000,000 | ||||||||||
Unamortized net original issuance premiums and deferred financing costs | (31,000,000) | (23,000,000) | ||||||||||
Net payable amount | 6,256,000,000 | 5,377,000,000 | ||||||||||
5.750% notes, issued in June 2010 and due in January 2021 | ||||||||||||
Debt | ||||||||||||
Total principal amount | $ 250,000,000 | $ 250,000,000 | ||||||||||
Interest rate (as a percent) | 5.75% | 5.75% | 5.75% | |||||||||
3.250% notes, $450 issued in October 2012 and $500 issued in December 2017, both due in October 2022 | ||||||||||||
Debt | ||||||||||||
Total principal amount | $ 950,000,000 | $ 950,000,000 | ||||||||||
Interest rate (as a percent) | 3.25% | 3.25% | 3.25% | |||||||||
3.250% notes, issued in October 2012 and due in October 2022 | ||||||||||||
Debt | ||||||||||||
Face amount of notes | $ 450,000,000 | |||||||||||
3.250% notes, issued in December 2017 and due in October 2022 | ||||||||||||
Debt | ||||||||||||
Face amount of notes | $ 500,000,000 | |||||||||||
4.650% notes, issued in July 2013 and due in August 2023 | ||||||||||||
Debt | ||||||||||||
Total principal amount | $ 750,000,000 | $ 750,000,000 | ||||||||||
Interest rate (as a percent) | 4.65% | 4.65% | 4.65% | |||||||||
3.875% notes, issued in June 2014 and due in July 2024 | ||||||||||||
Debt | ||||||||||||
Total principal amount | $ 350,000,000 | $ 350,000,000 | ||||||||||
Interest rate (as a percent) | 3.875% | 3.875% | 3.875% | |||||||||
3.875% notes, issued in April 2018 and due in April 2025 | ||||||||||||
Debt | ||||||||||||
Total principal amount | $ 500,000,000 | $ 500,000,000 | ||||||||||
Interest rate (as a percent) | 3.875% | 3.875% | 3.875% | 3.875% | ||||||||
Face amount of notes | $ 500,000,000 | |||||||||||
4.125% notes, $250 issued in September 2014 and $400 issued in March 2017, both due in October 2026 | ||||||||||||
Debt | ||||||||||||
Total principal amount | $ 650,000,000 | $ 650,000,000 | ||||||||||
Interest rate (as a percent) | 4.125% | 4.125% | 4.125% | |||||||||
4.125% notes, issued in September 2014 and due in October 2026 | ||||||||||||
Debt | ||||||||||||
Face amount of notes | $ 250,000,000 | |||||||||||
4.125% notes, issued in March 2017 and due in October 2026 | ||||||||||||
Debt | ||||||||||||
Face amount of notes | $ 400,000,000 | |||||||||||
3.000% notes, issued in October 2016 and due in January 2027 | ||||||||||||
Debt | ||||||||||||
Total principal amount | $ 600,000,000 | $ 600,000,000 | ||||||||||
Interest rate (as a percent) | 3.00% | 3.00% | 3.00% | |||||||||
3.650% notes, issued in December 2017 and due in January 2028 | ||||||||||||
Debt | ||||||||||||
Total principal amount | $ 550,000,000 | $ 550,000,000 | ||||||||||
Interest rate (as a percent) | 3.65% | 3.65% | 3.65% | |||||||||
3.250% notes, issued in June 2019 and due in June 2029 | ||||||||||||
Debt | ||||||||||||
Total principal amount | $ 500,000,000 | $ 0 | ||||||||||
Interest rate (as a percent) | 3.25% | 3.25% | 3.25% | |||||||||
Face amount of notes | $ 500,000,000 | |||||||||||
2.730% notes, issued in May 2019 and due in May 2034 | ||||||||||||
Debt | ||||||||||||
Total principal amount | £ 315,000,000 | $ 387,000,000 | 0 | |||||||||
Interest rate (as a percent) | 2.73% | 2.73% | 2.73% | |||||||||
Face amount of notes | £ | £ 315,000,000 | |||||||||||
5.875% bonds, $100 issued in March 2005 and $150 issued in June 2011, both due in March 2035 | ||||||||||||
Debt | ||||||||||||
Total principal amount | $ 250,000,000 | $ 250,000,000 | ||||||||||
Interest rate (as a percent) | 5.875% | 5.875% | 5.875% | |||||||||
5.875% bonds, issued in March 2005 and due in March 2035 | ||||||||||||
Debt | ||||||||||||
Face amount of notes | $ 100,000,000 | |||||||||||
5.875% bonds, issued in June 2011 and due in March 2035 | ||||||||||||
Debt | ||||||||||||
Face amount of notes | $ 150,000,000 | |||||||||||
4.650% notes, $300 issued in March 2017 and $250 issued in December 2017, both due in March 2047 | ||||||||||||
Debt | ||||||||||||
Total principal amount | $ 550,000,000 | $ 550,000,000 | ||||||||||
Interest rate (as a percent) | 4.65% | 4.65% | 4.65% | |||||||||
4.650% notes, issued in March 2017 and due in March 2047 | ||||||||||||
Debt | ||||||||||||
Face amount of notes | $ 300,000,000 | |||||||||||
4.650% notes, issued in December 2017 and due in March 2047 | ||||||||||||
Debt | ||||||||||||
Face amount of notes | $ 250,000,000 |
Notes Payable - Maturities (Det
Notes Payable - Maturities (Details) - Notes and bonds payable - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Maturity of notes and bonds payable | ||
2021 | $ 250 | |
2022 | 950 | |
2023 | 750 | |
Thereafter | 4,337 | |
Totals | $ 6,287 | $ 5,400 |
Notes Payable - Note Repayment
Notes Payable - Note Repayment (Details) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended | |
Jan. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Debt | |||
Principal payments on notes payable | $ 0 | $ 350,000 | |
Notes payable | 2.000% notes, issued in October 2012 and due in January 2018 | |||
Debt | |||
Principal payments on notes payable | $ 350,000 | ||
Interest rate (as a percent) | 2.00% |
Notes Payable - Note Issuances
Notes Payable - Note Issuances (Details) | 1 Months Ended | 9 Months Ended | ||||
Jun. 30, 2019USD ($) | Apr. 30, 2018USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | May 31, 2019GBP (£) | Dec. 31, 2018 | |
Debt | ||||||
Proceeds from notes payable | $ 895,774,000 | $ 497,500,000 | ||||
Notes payable | 2.730% notes, issued in May 2019 and due in May 2034 | ||||||
Debt | ||||||
Face amount of notes | £ | £ 315,000,000 | |||||
Stated interest rate (as a percent) | 2.73% | 2.73% | ||||
Notes payable | 3.250% notes, issued in June 2019 and due in June 2029 | ||||||
Debt | ||||||
Face amount of notes | $ 500,000,000 | |||||
Stated interest rate (as a percent) | 3.25% | 3.25% | ||||
Offering price (percent) | 99.36% | |||||
Effective yield (as a percent) | 3.326% | |||||
Proceeds from notes payable | $ 492,200,000 | |||||
Notes payable | 3.875% notes, issued in April 2018 and due in April 2025 | ||||||
Debt | ||||||
Face amount of notes | $ 500,000,000 | |||||
Stated interest rate (as a percent) | 3.875% | 3.875% | 3.875% | |||
Offering price (percent) | 99.50% | |||||
Effective yield (as a percent) | 3.957% | |||||
Proceeds from notes payable | $ 493,100,000 |
Issuances of Common Stock - Iss
Issuances of Common Stock - Issuance of Common Stock in Overnight Underwritten Public Offering (Details) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended | |
May 31, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | |
Class of Stock [Line Items] | |||
Proceeds from share issuances, net | $ 845,061 | $ 0 | |
Common stock | Overnight Underwritten Public Offering | |||
Class of Stock [Line Items] | |||
Shares of common stock issued (in shares) | 12,650,000 | ||
Underwriting discounts and other offering costs | $ 31,000 | ||
Proceeds from share issuances, net | $ 845,100 |
Issuances of Common Stock - Div
Issuances of Common Stock - Dividend Reinvestment and Stock Purchase Plan (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 103 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | |
Dividend Reinvestment and Stock Purchase Plan | |||||
Gross proceeds | $ 6,259 | $ 6,966 | |||
Common stock | Dividend Reinvestment and Stock Purchase Plan | |||||
Dividend Reinvestment and Stock Purchase Plan | |||||
Authorized common shares to be issued (in shares) | 26,000,000 | ||||
Shares of common stock issued (in shares) | 29,801 | 38,011 | 89,219 | 131,072 | 14,319,029 |
Gross proceeds | $ 2,100 | $ 2,200 | $ 6,300 | $ 7,000 | $ 677,200 |
Issuances of Common Stock - At-
Issuances of Common Stock - At-the-Market (ATM) Program (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
At-the-Market (ATM) Program | ||||
Gross proceeds | $ 689,641 | $ 588,860 | ||
ATM Program | ||||
At-the-Market (ATM) Program | ||||
Shares remaining for future issuance (in shares) | 11,083,783 | 11,083,783 | ||
Common stock | ATM Program | ||||
At-the-Market (ATM) Program | ||||
Shares of common stock issued (in shares) | 7,663,383 | 5,055,343 | 9,370,078 | 10,630,616 |
Gross proceeds | $ 570,300 | $ 290,900 | $ 694,400 | $ 588,900 |
Common stock | ATM Program | Maximum | ||||
At-the-Market (ATM) Program | ||||
Authorized common shares to be issued (in shares) | 28,961,855 | 28,961,855 |
Noncontrolling Interests - Narr
Noncontrolling Interests - Narrative (Details) $ in Thousands | 1 Months Ended | 9 Months Ended | 12 Months Ended | |||
Jul. 31, 2019USD ($) | Jan. 31, 2019USD ($)shares | Dec. 31, 2018entity | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Dec. 31, 2016propertyentity | |
Noncontrolling interests | ||||||
Conversion ratio | 1 | |||||
Number of properties acquired | property | 2 | |||||
Number of joint ventures controlling interest acquired | entity | 2 | |||||
Number of entities in which all outstanding minority interests were acquired | entity | 1 | |||||
Redemption of partnership units | $ 21,123 | $ 0 | ||||
Term Loans | $70 million senior unsecured term loan | ||||||
Noncontrolling interests | ||||||
Repayments of long-term debt | $ 70,000 | |||||
Tau Operating Partnership | ||||||
Noncontrolling interests | ||||||
Number of partnership units redeemed (in units) | shares | 317,022 | |||||
Ownership interest (as a percent) | 100.00% | |||||
Third-party partnership ownership interest (as a percent) | 0.11% | |||||
Redemption of partnership units | $ 20,200 | |||||
Excess of redemption of units over carrying value as reduction to common stock and paid in capital | $ 6,900 | |||||
Realty Income, L.P. | ||||||
Noncontrolling interests | ||||||
Ownership interest (as a percent) | 98.10% | |||||
Third-party partnership ownership interest (as a percent) | 1.90% | |||||
Other Noncontrolling Interest One | ||||||
Noncontrolling interests | ||||||
Redemption of partnership units | $ 900 |
Noncontrolling Interests - Chan
Noncontrolling Interests - Change in Carrying Value (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Mar. 28, 2019 | Dec. 31, 2018 | Apr. 30, 2018 | Mar. 30, 2018 | Jun. 27, 2013 | Jan. 22, 2013 | |
Change in the carrying value of all noncontrolling interests | ||||||||||
Carrying value at beginning of the period | $ 32,236 | |||||||||
Reallocation of equity | $ 0 | 0 | $ 0 | |||||||
Redemptions | (898) | $ 0 | (21,123) | 0 | ||||||
Shares issued in conjunction with acquisition | 6,286 | 18,848 | ||||||||
Allocation of net income | 226 | $ 284 | 740 | $ 753 | ||||||
Carrying value at end of the period | $ 24,678 | $ 24,678 | ||||||||
Tau Operating Partnership | ||||||||||
Change in the carrying value of all noncontrolling interests | ||||||||||
Number of partnership units issued (in units) | 317,022 | |||||||||
Number of partnership units outstanding (in units) | 0 | 0 | 317,022 | |||||||
Realty Income, L.P. | ||||||||||
Change in the carrying value of all noncontrolling interests | ||||||||||
Number of partnership units issued (in units) | 89,322 | 373,797 | 89,322 | 373,797 | 89,322 | 131,790 | 242,007 | 534,546 | ||
Number of partnership units outstanding (in units) | 463,119 | 463,119 | 373,797 | |||||||
Noncontrolling interests | ||||||||||
Change in the carrying value of all noncontrolling interests | ||||||||||
Carrying value at beginning of the period | $ 32,236 | |||||||||
Reallocation of equity | $ 653 | 653 | $ 492 | |||||||
Redemptions | (901) | $ (1,361) | (14,257) | (2,829) | ||||||
Shares issued in conjunction with acquisition | 6,286 | $ 18,848 | ||||||||
Distributions | (980) | |||||||||
Allocation of net income | 740 | |||||||||
Carrying value at end of the period | 24,678 | 24,678 | ||||||||
Noncontrolling interests | Tau Operating Partnership | ||||||||||
Change in the carrying value of all noncontrolling interests | ||||||||||
Carrying value at beginning of the period | 13,356 | |||||||||
Reallocation of equity | 0 | |||||||||
Redemptions | (13,356) | |||||||||
Shares issued in conjunction with acquisition | 0 | |||||||||
Distributions | 0 | |||||||||
Allocation of net income | 0 | |||||||||
Carrying value at end of the period | 0 | 0 | ||||||||
Noncontrolling interests | Realty Income, L.P. | ||||||||||
Change in the carrying value of all noncontrolling interests | ||||||||||
Carrying value at beginning of the period | 17,912 | |||||||||
Reallocation of equity | 653 | |||||||||
Redemptions | 0 | |||||||||
Shares issued in conjunction with acquisition | 6,286 | |||||||||
Distributions | (904) | |||||||||
Allocation of net income | 731 | |||||||||
Carrying value at end of the period | 24,678 | 24,678 | ||||||||
Noncontrolling interests | Other Noncontrolling Interests | ||||||||||
Change in the carrying value of all noncontrolling interests | ||||||||||
Carrying value at beginning of the period | 968 | |||||||||
Reallocation of equity | 0 | |||||||||
Redemptions | (901) | |||||||||
Shares issued in conjunction with acquisition | 0 | |||||||||
Distributions | (76) | |||||||||
Allocation of net income | 9 | |||||||||
Carrying value at end of the period | $ 0 | $ 0 |
Noncontrolling Interests - Vari
Noncontrolling Interests - Variable Interest Entities (Details) - Primary Beneficiary - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Variable interest entity | ||
Net real estate | $ 617,517 | $ 2,903,093 |
Total assets | 700,156 | 3,259,495 |
Total debt | 0 | 191,565 |
Total liabilities | $ 87,797 | $ 320,800 |
Financial Instruments and Fai_3
Financial Instruments and Fair Value Measurements - Summary or Fair Value (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Carrying value | ||
Fair value of financial assets and liabilities | ||
Mortgages payable assumed in connection with acquisitions | $ 278,900 | $ 298,400 |
Notes and bonds payable | 6,287,100 | 5,400,000 |
Estimated fair value | ||
Fair value of financial assets and liabilities | ||
Mortgages payable assumed in connection with acquisitions | 289,500 | 305,700 |
Notes and bonds payable | 6,839,700 | 5,430,000 |
Mortgages Payable | ||
Fair value of financial assets and liabilities | ||
Unamortized balance of non-cash net premiums | 3,300 | 4,400 |
Remaining balance of deferred financing costs at period end | 143 | 183 |
Notes and bonds payable | ||
Fair value of financial assets and liabilities | ||
Unamortized balance of non-cash net premiums | 6,600 | 10,500 |
Remaining balance of deferred financing costs at period end | $ 37,300 | $ 33,700 |
Financial Instruments and Fai_4
Financial Instruments and Fair Value Measurements - Derivative Financial Instruments (Details) - Cash flow hedge £ in Millions, $ in Millions | Sep. 30, 2019USD ($) | May 31, 2019GBP (£) | May 31, 2019USD ($) | Dec. 31, 2018USD ($) |
Designated as hedging instrument | ||||
Derivative [Line Items] | ||||
Notional Amount | $ 673.5 | $ 507.2 | ||
Fair Value - asset (liability) | (7.3) | (4) | ||
Interest rate swap, maturity Sep 2021 | Designated as hedging instrument | ||||
Derivative [Line Items] | ||||
Notional Amount | $ 7.1 | 7.2 | ||
Strike (percent) | 6.03% | |||
Fair Value - asset (liability) | $ (0.3) | (0.2) | ||
Interest rate swap, maturity Jun 2020 | Designated as hedging instrument | ||||
Derivative [Line Items] | ||||
Notional Amount | $ 250 | 250 | ||
Strike (percent) | 1.72% | |||
Fair Value - asset (liability) | $ 0 | 3 | ||
Interest rate swap, maturity Mar 2024 | Designated as hedging instrument | ||||
Derivative [Line Items] | ||||
Notional Amount | $ 250 | 250 | ||
Strike (percent) | 3.04% | |||
Fair Value - asset (liability) | $ (17.4) | (6.8) | ||
Cross-currency swap, maturity May 2034 1 | Designated as hedging instrument | ||||
Derivative [Line Items] | ||||
Notional Amount | 41.6 | 0 | ||
Fair Value - asset (liability) | $ 2.9 | 0 | ||
Cross-currency swap, maturity May 2034 1 | Designated as hedging instrument | GBP | Minimum | ||||
Derivative [Line Items] | ||||
Strike (percent) | 4.82% | |||
Cross-currency swap, maturity May 2034 1 | Designated as hedging instrument | GBP | Maximum | ||||
Derivative [Line Items] | ||||
Strike (percent) | 10.96% | |||
Cross-currency swap, maturity May 2034 1 | Designated as hedging instrument | USD | ||||
Derivative [Line Items] | ||||
Strike (percent) | 9.80% | |||
Cross-currency swap, maturity May 2034 2 | Designated as hedging instrument | ||||
Derivative [Line Items] | ||||
Notional Amount | $ 41.6 | 0 | ||
Fair Value - asset (liability) | $ 2.9 | 0 | ||
Cross-currency swap, maturity May 2034 2 | Designated as hedging instrument | GBP | Minimum | ||||
Derivative [Line Items] | ||||
Strike (percent) | 4.82% | |||
Cross-currency swap, maturity May 2034 2 | Designated as hedging instrument | GBP | Maximum | ||||
Derivative [Line Items] | ||||
Strike (percent) | 10.96% | |||
Cross-currency swap, maturity May 2034 2 | Designated as hedging instrument | USD | ||||
Derivative [Line Items] | ||||
Strike (percent) | 9.803% | |||
Cross-currency swap, maturity May 2034 3 | Designated as hedging instrument | ||||
Derivative [Line Items] | ||||
Notional Amount | $ 41.6 | 0 | ||
Fair Value - asset (liability) | $ 2.4 | 0 | ||
Cross-currency swap, maturity May 2034 3 | Designated as hedging instrument | GBP | Minimum | ||||
Derivative [Line Items] | ||||
Strike (percent) | 4.82% | |||
Cross-currency swap, maturity May 2034 3 | Designated as hedging instrument | GBP | Maximum | ||||
Derivative [Line Items] | ||||
Strike (percent) | 10.96% | |||
Cross-currency swap, maturity May 2034 3 | Designated as hedging instrument | USD | ||||
Derivative [Line Items] | ||||
Strike (percent) | 9.745% | |||
Cross-currency swap, maturity May 2034 4 | Designated as hedging instrument | ||||
Derivative [Line Items] | ||||
Notional Amount | $ 41.6 | 0 | ||
Fair Value - asset (liability) | $ 2.2 | $ 0 | ||
Cross-currency swap, maturity May 2034 4 | Designated as hedging instrument | GBP | Minimum | ||||
Derivative [Line Items] | ||||
Strike (percent) | 4.82% | |||
Cross-currency swap, maturity May 2034 4 | Designated as hedging instrument | GBP | Maximum | ||||
Derivative [Line Items] | ||||
Strike (percent) | 10.96% | |||
Cross-currency swap, maturity May 2034 4 | Designated as hedging instrument | USD | ||||
Derivative [Line Items] | ||||
Strike (percent) | 9.755% | |||
Cross-currency swaps | ||||
Derivative [Line Items] | ||||
Notional Amount | £ 130 | $ 166 |
Financial Instruments and Fai_5
Financial Instruments and Fair Value Measurements - Derivatives Narrative (Details) $ in Thousands, £ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019USD ($) | Sep. 30, 2019USD ($) | May 31, 2019GBP (£)derivative | May 31, 2019USD ($)derivative | |
Interest rate swaps | ||||
Derivative [Line Items] | ||||
Interest rate swap unrealized loss expected to be reclassified within next twelve months | $ 5,700 | $ 5,700 | ||
Interest rate swaps | Interest expense | ||||
Derivative [Line Items] | ||||
Unrealized gains (losses) reclassified to income statement | (890) | (2,000) | ||
Interest rate swaps | Foreign exchange gains | ||||
Derivative [Line Items] | ||||
Unrealized gains (losses) reclassified to income statement | 5,700 | 7,100 | ||
Cross-currency swaps | ||||
Derivative [Line Items] | ||||
Cross-currency swap unrealized gains expected to be reclassified within next twelve months | $ 1,900 | $ 1,900 | ||
Cross-currency swaps | Cash flow hedge | ||||
Derivative [Line Items] | ||||
Number of derivative instruments | derivative | 4 | 4 | ||
Swap exchange notional amount | £ 130 | $ 166,000 |
Operating Leases - Narrative (D
Operating Leases - Narrative (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019USD ($)stateproperty | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)stateproperty | Sep. 30, 2018USD ($) | |
Operating Leases | ||||
Number of properties owned | 5,964 | 5,964 | ||
Number of U.S. states where properties are owned (states) | state | 49 | 49 | ||
Percentage rent received | $ | $ 407 | $ 454 | $ 4,500 | $ 4,300 |
Single-tenant properties | ||||
Operating Leases | ||||
Number of properties owned | 5,934 | 5,934 | ||
Single-tenant properties as percentage of total properties | 99.50% | 99.50% | ||
Properties available for lease or sale | ||||
Operating Leases | ||||
Number of properties owned | 102 | 102 |
Operating Leases - Minimum Futu
Operating Leases - Minimum Future Annual Rents to be Received (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Minimum Future Annual Rents to be Received | |
2019 | $ 358,249 |
2020 | 1,420,029 |
2021 | 1,376,492 |
2022 | 1,309,148 |
2023 | 1,227,605 |
Thereafter | 8,346,953 |
Total | $ 14,038,476 |
Gain on Sales of Real Estate (D
Gain on Sales of Real Estate (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019USD ($)property | Sep. 30, 2018USD ($)property | Sep. 30, 2019USD ($)property | Sep. 30, 2018USD ($)property | |
Gain (Loss) on Sale of Investments [Abstract] | ||||
Number of properties | property | 27 | 20 | 64 | 60 |
Net sales proceeds | $ 21,500 | $ 35,500 | $ 72,601 | $ 83,024 |
Gain on sales of real estate | $ 1,674 | $ 7,813 | $ 15,828 | $ 18,818 |
Impairments - (Details)
Impairments - (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019USD ($)property | Sep. 30, 2018USD ($)property | Sep. 30, 2019USD ($)property | Sep. 30, 2018USD ($)property | |
Provisions for impairment | ||||
Provisions for impairment | $ | $ 13,503 | $ 6,862 | $ 31,236 | $ 25,034 |
Number of impaired properties held for sale | 9 | 0 | 9 | 0 |
Number of impaired properties held for investment | 2 | 1 | 4 | 3 |
Number of impaired properties sold | 16 | 18 | 28 | 36 |
Distributions Paid and Payabl_2
Distributions Paid and Payable - Distributions to Common Stockholders (Details) - $ / shares | 1 Months Ended | 9 Months Ended | |||||||||||||||||||
Oct. 31, 2019 | Sep. 30, 2019 | Aug. 31, 2019 | Jul. 31, 2019 | Jun. 30, 2019 | May 31, 2019 | Apr. 30, 2019 | Mar. 31, 2019 | Feb. 28, 2019 | Jan. 31, 2019 | Sep. 30, 2018 | Aug. 31, 2018 | Jul. 31, 2018 | Jun. 30, 2018 | May 31, 2018 | Apr. 30, 2018 | Mar. 31, 2018 | Feb. 28, 2018 | Jan. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Distributions Paid and Payable | |||||||||||||||||||||
Distributions paid per common share (in dollars per share) | $ 0.2265 | $ 0.2265 | $ 0.2265 | $ 0.2260 | $ 0.2260 | $ 0.2260 | $ 0.2255 | $ 0.2255 | $ 0.2210 | $ 0.2200 | $ 0.2200 | $ 0.2200 | $ 0.2195 | $ 0.2195 | $ 0.2195 | $ 0.2190 | $ 0.2190 | $ 0.2125 | $ 2.0295 | $ 1.9690 | |
Distributions payable (in dollars per share) | $ 0.227 | $ 0.227 | |||||||||||||||||||
Subsequent event | |||||||||||||||||||||
Distributions Paid and Payable | |||||||||||||||||||||
Distributions paid per common share (in dollars per share) | $ 0.227 |
Net Income per Common Share - R
Net Income per Common Share - Reconciliation of denominator in net income per share computation (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Earnings Per Share [Abstract] | ||||
Weighted average shares used for the basic net income per share computation (in shares) | 319,945,932 | 290,664,368 | 311,556,279 | 286,599,191 |
Incremental shares from share-based compensation (in shares) | 317,085 | 225,796 | 309,131 | 189,072 |
Weighted average partnership common units convertible to common shares that were dilutive (in shares) | 0 | 317,022 | 0 | 317,022 |
Weighted average shares used for diluted net income per share computation (in shares) | 320,263,017 | 291,207,186 | 311,865,410 | 287,105,285 |
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) | 7,892 | 261 | 6,529 | 1,378 |
Convertible common partnership units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from computation (in shares) | 463,119 | 397,690 | 434,981 | 271,890 |
Supplemental Disclosures of C_3
Supplemental Disclosures of Cash Flow Information - Narrative (Details) - USD ($) $ in Thousands | 9 Months Ended | ||||||
Sep. 30, 2019 | Sep. 30, 2018 | Mar. 28, 2019 | Jan. 01, 2019 | Apr. 30, 2018 | Mar. 30, 2018 | Jun. 27, 2013 | |
Supplemental Disclosures of Cash Flow Information | |||||||
Cash paid for interest | $ 214,200 | $ 197,200 | |||||
Cash paid for income taxes | 3,600 | 4,000 | |||||
Non-cash activities | |||||||
Lease liabilities | 124,349 | $ 132,000 | |||||
Right-of-use assets | $ 132,000 | ||||||
Acquisition of property using funds held in non-refundable escrow account | 7,500 | ||||||
Properties under development | |||||||
Supplemental Disclosures of Cash Flow Information | |||||||
Interest capitalized to properties under development | $ 549 | $ 234 | |||||
Realty Income, L.P. | |||||||
Non-cash activities | |||||||
Number of partnership units issued (in units) | 89,322 | 373,797 | 89,322 | 131,790 | 242,007 | 534,546 | |
Shares issued in conjunction with acquisition | $ 6,300 | ||||||
Value of partnership units issued | $ 18,800 |
Supplemental Disclosures of C_4
Supplemental Disclosures of Cash Flow Information - Reconciliation of Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2017 |
Reconciliation of cash,cash equivalents, and restricted cash | ||||
Cash and cash equivalents shown in the consolidated balance sheets | $ 236,064 | $ 10,387 | $ 6,666 | |
Restricted escrow deposits | 11,474 | 1,129 | 1,533 | |
Impounds related to mortgages payable | 11,751 | 9,555 | 7,529 | |
Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows | $ 259,289 | $ 21,071 | $ 15,728 | $ 12,142 |
Segment Information - Assets (D
Segment Information - Assets (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019USD ($)segment | Dec. 31, 2018USD ($) | |
Segment Reporting [Abstract] | ||
Number of activity segments | segment | 49 | |
Reconciliation of assets from segment to consolidated | ||
Net real estate | $ 15,146,726 | $ 13,843,517 |
Intangible assets | 1,313,798 | 1,199,597 |
Goodwill | 14,503 | 14,630 |
Other corporate assets | 704,877 | 202,739 |
Total assets | 17,179,904 | 15,260,483 |
Automotive service | ||
Reconciliation of assets from segment to consolidated | ||
Net real estate | 283,422 | 210,668 |
Intangible assets | 58,974 | 61,951 |
Goodwill | 436 | 437 |
Automotive tire services | ||
Reconciliation of assets from segment to consolidated | ||
Net real estate | 232,712 | 238,939 |
Intangible assets | 7,474 | 8,696 |
Goodwill | 862 | 862 |
Beverages | ||
Reconciliation of assets from segment to consolidated | ||
Net real estate | 280,427 | 284,910 |
Intangible assets | 1,573 | 1,765 |
Child care | ||
Reconciliation of assets from segment to consolidated | ||
Net real estate | 208,788 | 151,640 |
Intangible assets | 20,448 | 12,277 |
Goodwill | 4,825 | 4,863 |
Convenience stores | ||
Reconciliation of assets from segment to consolidated | ||
Net real estate | 1,717,039 | 1,756,732 |
Intangible assets | 104,901 | 108,714 |
Goodwill | 1,978 | 1,983 |
Dollar stores | ||
Reconciliation of assets from segment to consolidated | ||
Net real estate | 1,123,086 | 1,117,250 |
Intangible assets | 48,294 | 48,842 |
Drug stores | ||
Reconciliation of assets from segment to consolidated | ||
Net real estate | 1,447,853 | 1,490,261 |
Intangible assets | 155,827 | 165,558 |
Financial services | ||
Reconciliation of assets from segment to consolidated | ||
Net real estate | 394,771 | 414,613 |
Intangible assets | 17,843 | 20,426 |
General merchandise | ||
Reconciliation of assets from segment to consolidated | ||
Net real estate | 471,376 | 317,424 |
Intangible assets | 60,080 | 43,122 |
Grocery stores - U.S. | ||
Reconciliation of assets from segment to consolidated | ||
Net real estate | 865,039 | 774,526 |
Intangible assets | 170,231 | 144,551 |
Grocery stores - U.K. | ||
Reconciliation of assets from segment to consolidated | ||
Net real estate | 449,200 | 0 |
Intangible assets | 108,863 | 0 |
Health and fitness | ||
Reconciliation of assets from segment to consolidated | ||
Net real estate | 995,315 | 882,515 |
Intangible assets | 68,738 | 71,609 |
Home improvement | ||
Reconciliation of assets from segment to consolidated | ||
Net real estate | 487,219 | 424,494 |
Intangible assets | 72,128 | 57,928 |
Restaurants-casual dining | ||
Reconciliation of assets from segment to consolidated | ||
Net real estate | 529,316 | 559,616 |
Intangible assets | 16,944 | 18,153 |
Goodwill | 1,794 | 1,841 |
Restaurants-quick service | ||
Reconciliation of assets from segment to consolidated | ||
Net real estate | 1,008,276 | 964,980 |
Intangible assets | 52,662 | 54,448 |
Goodwill | 1,040 | 1,052 |
Theaters | ||
Reconciliation of assets from segment to consolidated | ||
Net real estate | 889,931 | 555,990 |
Intangible assets | 35,989 | 25,811 |
Transportation services | ||
Reconciliation of assets from segment to consolidated | ||
Net real estate | 735,020 | 758,133 |
Intangible assets | 64,758 | 73,577 |
Wholesale club | ||
Reconciliation of assets from segment to consolidated | ||
Net real estate | 402,478 | 412,203 |
Intangible assets | 24,150 | 26,484 |
Other non-reportable segments | ||
Reconciliation of assets from segment to consolidated | ||
Net real estate | 2,625,458 | 2,528,623 |
Intangible assets | 223,921 | 255,685 |
Goodwill | $ 3,568 | $ 3,592 |
Segment Information - Revenue (
Segment Information - Revenue (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)propertysegment | Sep. 30, 2018USD ($) | |
Segment revenue information | ||||
Rental (including reimbursable) | $ 372,312 | $ 337,252 | $ 1,090,601 | $ 980,365 |
Other | 1,935 | 829 | 3,461 | 4,897 |
Total revenue | 374,247 | 338,081 | $ 1,094,062 | 985,262 |
Number of operating segments | segment | 49 | |||
Automotive service | ||||
Segment revenue information | ||||
Rental (including reimbursable) | 8,505 | 7,120 | $ 23,735 | 21,150 |
Automotive tire services | ||||
Segment revenue information | ||||
Rental (including reimbursable) | 7,766 | 7,460 | 23,517 | 22,607 |
Beverages | ||||
Segment revenue information | ||||
Rental (including reimbursable) | 7,988 | 7,908 | 23,819 | 23,581 |
Child care | ||||
Segment revenue information | ||||
Rental (including reimbursable) | 7,837 | 5,255 | 23,425 | 16,172 |
Convenience stores | ||||
Segment revenue information | ||||
Rental (including reimbursable) | 41,286 | 39,384 | 123,932 | 101,254 |
Dollar stores | ||||
Segment revenue information | ||||
Rental (including reimbursable) | 25,213 | 23,903 | 75,311 | 70,390 |
Drug stores | ||||
Segment revenue information | ||||
Rental (including reimbursable) | 31,902 | 32,431 | 97,414 | 97,206 |
Financial services | ||||
Segment revenue information | ||||
Rental (including reimbursable) | 7,585 | 7,850 | 22,997 | 21,741 |
General merchandise | ||||
Segment revenue information | ||||
Rental (including reimbursable) | 9,594 | 7,453 | 25,115 | 21,613 |
Grocery stores - U.S. | ||||
Segment revenue information | ||||
Rental (including reimbursable) | 17,673 | 16,095 | 51,009 | 47,433 |
Grocery stores - U.K. | ||||
Segment revenue information | ||||
Rental (including reimbursable) | 6,618 | 0 | $ 9,533 | 0 |
Number of properties acquired | property | 13 | |||
Health and fitness | ||||
Segment revenue information | ||||
Rental (including reimbursable) | 26,437 | 23,754 | $ 78,915 | 70,812 |
Home improvement | ||||
Segment revenue information | ||||
Rental (including reimbursable) | 10,950 | 9,678 | 31,430 | 28,261 |
Restaurants-casual dining | ||||
Segment revenue information | ||||
Rental (including reimbursable) | 10,939 | 12,355 | 33,614 | 34,344 |
Restaurants-quick service | ||||
Segment revenue information | ||||
Rental (including reimbursable) | 21,880 | 18,673 | 65,124 | 52,035 |
Theaters | ||||
Segment revenue information | ||||
Rental (including reimbursable) | 24,002 | 17,479 | 62,567 | 52,814 |
Transportation services | ||||
Segment revenue information | ||||
Rental (including reimbursable) | 16,109 | 16,105 | 48,327 | 47,653 |
Wholesale club | ||||
Segment revenue information | ||||
Rental (including reimbursable) | 9,468 | 9,345 | 28,525 | 28,218 |
Other non-reportable segments and tenant reimbursements | ||||
Segment revenue information | ||||
Rental (including reimbursable) | $ 80,560 | $ 75,004 | $ 242,292 | $ 223,081 |
Grocery stores | ||||
Segment revenue information | ||||
Number of operating segments | segment | 2 |
Common Stock Incentive Plan - S
Common Stock Incentive Plan - Summary (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
General and administrative expense | ||||
Common Stock Incentive Plan | ||||
Share-based compensation costs recognized | $ 3.2 | $ 3.9 | $ 10.5 | $ 12.5 |
2012 Plan | ||||
Common Stock Incentive Plan | ||||
Plan term from the date of adoption | 10 years | |||
2012 Plan | Maximum | ||||
Common Stock Incentive Plan | ||||
Authorized shares | 3,985,734 | 3,985,734 |
Common Stock Incentive Plan - R
Common Stock Incentive Plan - Restricted Stock (Details) - Restricted Stock $ in Millions | 9 Months Ended |
Sep. 30, 2019USD ($)shares | |
Common Stock Incentive Plan | |
Shares granted in period (in shares) | 81,927 |
Unamortized share-based compensation expense | $ | $ 11.3 |
Board of Directors | |
Common Stock Incentive Plan | |
Shares granted in period (in shares) | 32,000 |
Board of Directors | Vest immediately | |
Common Stock Incentive Plan | |
Shares granted in period (in shares) | 20,000 |
Board of Directors | Vest over one-year service period | |
Common Stock Incentive Plan | |
Shares granted in period (in shares) | 4,000 |
Vesting period (in years) | 1 year |
Board of Directors | Vest over three-year service period | |
Common Stock Incentive Plan | |
Shares granted in period (in shares) | 8,000 |
Vesting period (in years) | 3 years |
Employees | Vest over four-year service period | |
Common Stock Incentive Plan | |
Vesting period (in years) | 4 years |
Common Stock Incentive Plan - P
Common Stock Incentive Plan - Performance Shares and Restricted Stock Units (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2019USD ($)shares | |
Performance Shares and Restricted Stock Units | |
Common Stock Incentive Plan | |
Unamortized share-based compensation expense | $ | $ 10.6 |
Performance Shares | |
Common Stock Incentive Plan | |
Shares granted in period (in shares) | 115,137 |
Vesting rights percentage | 50.00% |
Vesting period (in years) | 3 years |
Restricted Stock Units | |
Common Stock Incentive Plan | |
Shares granted in period (in shares) | 5,482 |
Vesting period (in years) | 4 years |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) $ in Millions | Sep. 30, 2019USD ($) |
Re-leasing costs, recurring capital expenditures, and non-recurring building improvements | |
Commitments and Contingencies [Line Items] | |
Other commitments | $ 9.8 |
Construction contracts | |
Commitments and Contingencies [Line Items] | |
Other commitments | $ 23.5 |
Commitments and Contingencies_2
Commitments and Contingencies - Minimum Future Rental Payments Due on Ground Leases (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Jan. 01, 2019 |
Minimum Future Rental Payments Due | ||
2019 | $ 3,800 | |
2020 | 15,000 | |
2021 | 14,500 | |
2022 | 14,300 | |
2023 | 14,300 | |
Thereafter | 102,000 | |
Total | 163,900 | |
Present value adjustment for remaining lease payments | (39,600) | |
Lease liability - operating leases, net | $ 124,349 | $ 132,000 |
Weighted average discount rate (percent) | 4.29% | |
Weighted average remaining lease term | 12 years 6 months | |
Ground Leases Paid by Realty Income | ||
Minimum Future Rental Payments Due | ||
2019 | $ 400 | |
2020 | 1,500 | |
2021 | 1,300 | |
2022 | 1,200 | |
2023 | 1,200 | |
Thereafter | 19,900 | |
Total | 25,500 | |
Ground Leases Paid by Our Tenants | ||
Minimum Future Rental Payments Due | ||
2019 | 3,400 | |
2020 | 13,500 | |
2021 | 13,200 | |
2022 | 13,100 | |
2023 | 13,100 | |
Thereafter | 82,100 | |
Total | $ 138,400 | |
Minimum | ||
Minimum Future Rental Payments Due | ||
Discount rate used to present value lease payments (percent) | 3.09% | |
Maximum | ||
Minimum Future Rental Payments Due | ||
Discount rate used to present value lease payments (percent) | 5.50% |
Subsequent Events - Narrative (
Subsequent Events - Narrative (Details) | 1 Months Ended |
Oct. 31, 2019$ / shares | |
Subsequent event | |
Subsequent Event [Line Items] | |
Common stock dividend declared (in dollars per share) | $ 0.227 |