Realty Income Corporation (NYSE:O) Q3 2019 Earnings Conference Call - Final Transcript

Nov 05, 2019 • 02:30 pm ET


Realty Income Corporation (NYSE:O) Q3 2019 Earnings Conference Call - Final Transcript


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Ladies and gentlemen, thank you for standing by and welcome to the Realty Income Third Quarter 2019 Operating Results Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session.

[Operator Instructions]

Please be advised that today's conference is being recorded.

[Operator Instructions]

I would now like to hand the conference over to your speaker today, Andrew Crum, Senior Associate, Realty Income. You may begin.

Andrew Crum

Thank you all for joining us today for Realty Income's third quarter 2019 operating results conference call. Discussing our results will be Sumit Roy, President and Chief Executive Officer; and Paul Meurer, Chief Financial Officer and Treasurer. During this conference call we will make certain statements that may be considered forward-looking statements under federal securities law .

The company's actual future results may differ significantly from any of the matters discussed in any forward-looking statements. We will disclose in greater detail the factors that may cause such differences in the company's Form 10-Q. We will be observing a two question limit during the Q&A portion of the call in order to give everyone the opportunity to participate. If you would like to ask an additional question, you may re-enter the queue.

I will now turn the call over to our CEO, Sumit Roy.

Sumit Roy

Thanks, Andrew. Welcome everyone. We are pleased to complete another solid quarter. We remain on track for a very strong 2019 and are well positioned as we look towards 2020 with a robust investment pipeline and strong liquidity. During the quarter, we invested approximately $412 million in high quality real estate at investment spreads well above our historical average, which brings us to approximately $2 billion invested as we entered the fourth quarter.

Our investment activity during the quarter included our second international acquisition in the UK. Additionally, our investments during the quarter were 51% industrial by rent, with approximately $234 million invested through three separate transactions with three new investment grade rated tenants, including our first ever distribution facility leased to a large e-commerce retailer. Including the previously announced portfolio acquisition from CIM Real Estate Finance Trust, we have announced over $3 billion in acquisitions year-to-date.

As a reminder, the CIM transaction is expected to close in various tranches, with the acquisition of most of the properties in the portfolio expected to close in 2019. To fund our activity, we raised $572 million in equity capital during the quarter, ending the quarter with $236 million of cash on hand and positioning our balance sheet favorably for the remainder of the year and as we look towards 2020.

Our portfolio continues to be diversified by tenant, industry, geography, and to a certain extent, property type, which contributes to the stability of our cash flow. At quarter end, our properties were leased to 274 commercial tenants in 49 different industries, located in 49 states, Puerto Rico and the UK. 82.7% of our rental revenue is from our traditional retail properties.

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