[Letterhead of Ballard Spahr Andrews & Ingersoll]
FILE NUMBER
872800
July 29, 1999
Realty Income Corporation
220 West Crest Street
Escondido, California 92025
Re: Registration Statements on Form S-3
Registration Nos. 333-34311 and 333-80821
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Ladies and Gentlemen:
We have served as special Maryland counsel to Realty Income
Corporation, a Maryland corporation (the "Company"), in connection with certain
matters of Maryland law arising out of the Company's registration statements on
Form S-3 (Nos. 333-34311 and 333-80821), and all amendments thereto
(collectively, the "Registration Statement"), previously declared effective by
the Securities and Exchange Commission (the "Commission") under the Securities
Act of 1933, as amended (the "1933 Act"), relating to the proposed public
offering of Securities of the Company that may be offered and sold by the
Company from time to time as set forth in the prospectus dated July 14, 1999
which forms a part of the Registration Statement (the "Base Prospectus"). This
opinion is rendered in connection with the registration, sale and issuance of up
to 1,380,000 shares (including 180,000 shares subject to an over-allotment
option) of the Company's 9-1/2% Class C Cumulative Redeemable Preferred Stock,
$1.00 par value per share (the "Shares"), as described in a Prospectus
Supplement dated July 27, 1999 (the "Prospectus Supplement" and, together with
the Base Prospectus, the "Prospectus").
In connection with our representation of the Company, and as a basis
for the opinion hereinafter set forth, we have examined originals, or copies
certified or otherwise identified to our satisfaction, of the following
documents (hereinafter collectively referred to as the "Documents"):
Realty Income Corporation
July 29, 1999
Page 2
1. The Registration Statement and the related form of Prospectus in
the form in which it was transmitted to the Commission, under the 1933 Act;
2. The charter of the Company (the "Charter"), certified as of a
recent date by the State Department of Assessments and Taxation of Maryland (the
"SDAT");
3. The Bylaws of the Company (the "Bylaws"), certified as of a
recent date by its Secretary;
4. Resolutions (the "Board Resolutions") adopted by the Board of
Directors of the Company (the "Board"), relating to the registration, sale and
issuance of the Shares, certified as of a recent date by the Secretary of the
Company;
5. Resolutions (the "Committee Resolutions") adopted by the
Preferred Stock Terms Committee of the Board, relating to the terms of the
Shares, including the dividend rate and price thereof, certified as of a recent
date by the Secretary of the Company;
6. Articles Supplementary for the Company's, 9-1/2% Class C
Cumulative Redeemable Preferred Stock (the "Articles Supplementary"), to be
filed with the SDAT on July 29, 1999;
7. A certificate of the SDAT as to the good standing of the Company,
dated as of a recent date; and
8. Such other documents and matters as we have deemed necessary or
appropriate to express the opinion set forth in this letter, subject to the
assumptions, limitations and qualifications stated herein.
In expressing the opinion set forth below, we have assumed the
following:
1. Each individual executing any of the Documents, whether on behalf
of such individual or another person, is legally competent to do so.
2. Each individual executing any of the Documents on behalf of a
party (other than the Company) is duly authorized to do so.
Realty Income Corporation
July 29, 1999
Page 3
3. Each of the parties (other than the Company) executing any of the
Documents has duly and validly executed and delivered each of the Documents to
which such party is a signatory, and such party's obligations set forth therein
are legal, valid and binding and are enforceable in accordance with all stated
terms.
4. All Documents submitted to us as originals are authentic. The
form and content of the Documents submitted to us as unexecuted drafts do not
differ in any respect relevant to this opinion from the form and content of such
Documents as executed and delivered. All Documents submitted to us as certified
or photostatic copies conform to the original documents. All signatures on all
such Documents are genuine. All public records reviewed or relied upon by us or
on our behalf are true and complete. All statements and information contained
in the Documents are true and complete. There has been no oral or written
modification or amendment to any of the Documents, and there has been no waiver
of any provision of any of the Documents, by action or omission of the parties
or otherwise.
5. The Articles Supplementary will be filed with and accepted for
record by the SDAT before any Shares are issued.
Based upon the foregoing, and subject to the assumptions, limitations
and qualifications stated herein, it is our opinion that:
1. The Company is a corporation duly incorporated and existing under
and by virtue of the laws of the State of Maryland and is in good standing with
the SDAT.
2. The issuance of the Shares has been duly authorized, and the
Shares, when sold and delivered against payment therefor in accordance with the
Board Resolutions, the Committee Resolutions and the Prospectus, will be validly
issued, fully paid and nonassessable.
The foregoing opinion is limited to the substantive laws of the State
of Maryland and we do not express any opinion herein concerning any other law.
We express no opinion as to the applicability or effect of any federal or state
securities laws, including the securities laws of the State of Maryland, or as
to federal or state laws regarding fraudulent transfers. To the extent that any
matter as to which our opinion is expressed
Realty Income Corporation
July 29, 1999
Page 4
herein would be governed by any jurisdiction other than the State of Maryland,
we do not express any opinion on such matter.
We assume no obligation to supplement this opinion if any applicable
law changes after the date hereof or if we become aware of any fact that might
change the opinion expressed herein after the date hereof.
This opinion is being furnished to you for your submission to the
Commission as an exhibit to the report on form 8-K, to be filed by the Company
with the Commission as of the date hereof (the "8-K") and incorporation by
reference into the Registration Statement and, accordingly, may not be relied
upon by, quoted in any manner to, or delivered to any other person or entity
(other than Latham & Watkins, counsel to the Company, in connection with opinion
to be issued by it in connection with the sale of the Shares) without, in each
instance, our prior written consent.
We hereby consent to the filing of this opinion as an exhibit to the
8-K and to the use of the name of our firm therein. In giving this consent, we
do not admit that we are within the category of persons whose consent is
required by Section 7 of the 1933 Act.
Very truly yours,
/s/ Ballard Spahr Andrews & Ingersoll