Core Viewpoint - Realty Income (O) has achieved an 11.6% year-to-date gain, leading to discussions about its valuation and whether it is a good time for investment [1][8] Performance Summary - Realty Income has outperformed peers in the free-standing retail space, including Agree Realty Corporation (ADC) and NNN REIT, Inc. (NNN), while also surpassing the broader Zacks REIT and Equity Trust - Retail industry, although it lags behind the S&P 500 composite [1][8] Growth and Expansion - The company is expanding in the U.S. and Europe, which supports its long-term growth outlook, and a recent dividend increase has positively impacted investor sentiment [2][8] - Realty Income owns over 15,600 properties across the U.S. and Europe, with a tenant mix focused on non-discretionary retail and service categories, contributing to stable cash flows [4][10] - The company has a disciplined acquisition strategy, maintaining a historical median occupancy rate of 98.3%, with current occupancy at 98.6% as of June 30, 2025 [5][10] Financial Strength - Realty Income has $5.1 billion in liquidity and maintains investment-grade credit ratings, with a dividend yield of 5.47% [10][18] - The company has increased its dividend for 112 consecutive quarters, with the most recent hike being its 132nd since its 1994 listing [10][18] Valuation Insights - Realty Income's stock is trading at a forward 12-month price-to-FFO of 13.53X, which is below the retail REIT industry average of 15.05X but above its one-year median of 13.15X [15] - The valuation is relatively favorable compared to Agree Realty Corporation, which trades at 15.89X, while NNN trades at 11.91X [15] Investment Outlook - Realty Income is recognized as a leading dividend-focused REIT, valued for its consistent payouts and long-term growth profile, with a diversified tenant base providing resilience during economic uncertainty [17][18] - The company’s strategic expansion in Europe and strong financial position suggest a solid foundation for long-term growth, although new investors may exercise caution until market conditions stabilize [18]

Financial Data and Key Metrics Changes - The company reported cash NOI of $41.9 million for Q2 2025, a 1.7% increase from Q2 2024, primarily driven by acquisitions [12] - AFFO was $0.54 per diluted share for Q2 2025, reflecting a 1.7% increase from Q2 2024, despite a 2.7% decrease year-over-year due to higher interest expenses [13][15] - The liquidity position at the end of the quarter was $568.8 million, with a net debt to EBITDAre ratio of 3.6 times [17] Business Line Data and Key Metrics Changes - The average EBITDARM coverage ratio improved to 5.31 times, up from 4.64 times in the previous year, indicating stronger tenant performance [16] - The company maintained a strong tenant base, with 40% associated with investment-grade rated tenants, up from 36.4% year-over-year [16] Market Data and Key Metrics Changes - The company closed on a two-property medical outpatient building portfolio for approximately $16.2 million, enhancing its operational synergies [20] - Year-to-date acquisitions totaled approximately $75 million, with over $70 million of properties under exclusive LOI [21] Company Strategy and Development Direction - The company focuses on necessity-based healthcare solutions, aiming to capitalize on the aging population and limited competition in its markets [5][19] - A strategic decision was made to demolish the Stoughton asset to halt expense leakage and maximize future land value [10][39] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to grow despite macroeconomic uncertainties, emphasizing a prudent capital allocation strategy [4][11] - The company aims to maintain a healthy dividend while pursuing growth through acquisitions and share repurchases [17] Other Important Information - The board approved a three-year share repurchase program for up to $75 million, with a cap of $25 million per year [15] - The company is currently under exclusive LOI for additional acquisitions, indicating a robust pipeline for future growth [21] Q&A Session Summary Question: What types of assets are included in the $70 million LOIs? - Management confirmed that the properties under LOI are consistent with their current portfolio and have long lease durations [25][26] Question: What is the current status of the Stoughton facility? - Management indicated that the demolition process is underway and will significantly reduce carrying costs [39][57] Question: How does the company evaluate share repurchases versus acquisitions? - Management stated that share repurchases are viewed as a tool, and decisions are based on the perceived disconnect between share price and intrinsic value [30][41] Question: What are the expectations for lease expirations in the near term? - Management is optimistic about renewing nearly all leases expiring in 2025 and 2026, with only minor exposures expected [42][46]

Financial Data and Key Metrics Changes - The company reported distributable earnings (DE) of $151 million or $0.43 per share, while GAAP net income was $130 million or $0.38 per share [4] - Capital deployment for the first six months of the year reached $5.5 billion, surpassing the total for all of 2024 [4] - The adjusted debt to undepreciated equity ratio ended the quarter at 2.5 times, slightly increasing from the previous quarter [14] Business Line Data and Key Metrics Changes - Commercial and residential lending contributed DE of $174 million for the quarter, with a loan portfolio growth of $946 million, bringing the total to $15.5 billion [5] - The residential lending portfolio ended the quarter at $2.3 billion, with $60 million in repayments [9] - The infrastructure lending segment contributed DE of $21 million, with a record $700 million of loans committed [12] Market Data and Key Metrics Changes - The company’s active servicing portfolio ended the quarter at $10.3 billion, with $1 billion of new transfers dominated by office properties [11] - The CMBS portfolio increased by $55 million due to new purchases [12] - The weighted average risk rating of the portfolio remained stable at 2.9 [7] Company Strategy and Development Direction - The acquisition of Fundamental Income Properties for $2.2 billion is expected to enhance the company’s capabilities in the net lease sector, with a focus on leveraging existing expertise [13][18] - The company aims to grow its diversified business model, reducing reliance on CRE loans, which now represent only 52% of total assets compared to 65% in 2022 [22] - The strategy includes optimizing the balance sheet by refinancing at lower spreads and maintaining a strong liquidity position [14][23] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the potential for lower interest rates and a recovery in the real estate market, which could lead to increased transaction volumes [29][30] - The company is well-positioned to navigate challenges and is focused on becoming investment grade, with plans to grow earnings materially over time [41][36] - The management highlighted the importance of maintaining a fortress balance sheet and the benefits of diversification in sustaining dividends [35][36] Other Important Information - The company received recognition from rating agencies for its diversity, leverage profile, liquidity position, and stable earnings [14] - The company has maintained its dividend for 47 consecutive quarters, reflecting its commitment to shareholder returns [22] Q&A Session Summary Question: Expectations for CRE loan growth and impact of Fed rate cuts - Management expects to end the year close to $10 billion in CRE loans, with lower rates likely accelerating loan growth and refinancing opportunities [46][48] Question: Ramp up of the net lease portfolio business - The company is optimistic about growing the net lease portfolio, with potential for larger acquisitions as the pipeline rebuilds [56][60] Question: Sustainability of spreads in the infrastructure business - Management indicated that while spreads have widened, they are maintaining margins through more direct deals and expect continued growth in infrastructure origination [62][71] Question: Credit portfolio stabilization and hotel exposure - Management believes credit in the portfolio has stabilized, with no significant losses in the hotel sector, which comprises 6% of the overall asset base [78][82]

Financial Performance & Strategic Objectives - GNL reduced net debt by $748 million in Q2 2025, decreasing Net Debt to Adjusted EBITDA to 66x[10] - GNL increased the low end of its AFFO per Share guidance to a new range of $092 to $096[22] - GNL reaffirms its Net Debt to Adjusted EBITDA range of 65x to 71x[22] - GNL's liquidity totaled $10 billion in Q2 2025[36] Portfolio Transformation & Leasing Activity - GNL completed the final phases of the ~$18 billion Multi-Tenant Portfolio Sale, transforming into a pure-play net-lease REIT[11] - GNL achieved 60% renewal spreads and increased occupancy to 98% across the portfolio[12] - GNL's total non-core dispositions reach over $30 billion[24] - GNL repurchased 102 million shares for a total of $77 million[13] Balance Sheet & Credit Rating - S&P upgraded GNL's corporate credit rating to BB+ from BB[12] - GNL reduced net debt by $20 billion since Q2'24[13, 29] - GNL refinanced its Revolving Credit Facility, extending weighted average debt maturity to 37 years[11, 13]

Company Overview - Realty Income is the 6th largest global REIT with approximately $61 billion in gross real estate value[7] - The company has 15,606 commercial real estate properties[6] - Approximately 34% of rent comes from investment-grade clients[6] - The company's annualized base rent is approximately $5.17 billion[13] Portfolio Diversification - Approximately 90% of the total rent is resilient to economic downturns and/or isolated from e-commerce pressures[9] - Non-Discretionary, Low Price Point and/or Service-Oriented Retail accounts for 73% of the annualized base rent[9] - The company has 1,630 clients across 91 industries[9] Financial Performance and Guidance - The company has a strong dividend track record with over 30 consecutive years of rising dividends and a 4.2% CAGR[10] - The company is increasing its 2025 investment volume guidance to approximately $5.0 billion[22] - The company expects AFFO per share in the range of $4.24 to $4.28 for 2025[22] Investment and Capital Strategy - The company invested $1.2 billion in the second quarter of 2025 at an initial weighted average cash yield of 7.2%[22] - The company sourced $43 billion of volume in the second quarter of 2025, reflecting a 2.7% selectivity rate[22] - The company has sourced ~$66B in volume year-to-date, including $43B in 2Q alone[64]

Group 1 - The theme of the day is creativity in business, emphasizing the complexity and dynamic nature of running a business [1] - Businesses are often praised for adhering to their core mission rather than diversifying into unrelated areas, with Berkshire Hathaway cited as a notable example [1]

Core Viewpoint - Realty Income and W.P. Carey are both prominent players in the net-lease REIT sector, offering similar business models and dividend yields, but they differ significantly in size, portfolio composition, and growth strategies [1][5][12]. Group 1: Similarities - Both Realty Income and W.P. Carey operate in the net-lease space, owning single-tenant properties where tenants cover most property-level expenses [2]. - They have exposure to similar asset classes, including retail, warehouse, and industrial properties, with portfolios spanning North America and Europe [2]. - Both companies have long histories in the net lease market, with W.P. Carey being a pioneer in this area [3]. Group 2: Differences - Realty Income has a market capitalization of approximately $50 billion, while W.P. Carey is valued at just under $14 billion, making Realty Income the industry giant [6]. - Realty Income owns over 15,600 properties compared to W.P. Carey's roughly 1,600 properties, indicating a significant difference in portfolio size [6]. - W.P. Carey has a greater focus on industrial and warehouse assets, which are typically larger, whereas Realty Income emphasizes retail properties, which are generally smaller [7]. Group 3: Dividend Policies - Realty Income has a track record of increasing its dividend for 30 consecutive years, while W.P. Carey recently reduced its dividend in late 2023 after exiting the office sector [9]. - Realty Income pays dividends monthly, while W.P. Carey pays on a quarterly basis, which may appeal differently to investors [9]. - W.P. Carey has resumed increasing its dividend quarterly, with a recent increase of approximately 1.1% (3.5% annualized), while Realty Income's last increase was a modest 0.2% (2.3% annualized) [10][11]. Group 4: Investment Appeal - Realty Income is characterized as a stable, slow-moving giant, appealing to conservative investors, while W.P. Carey is seen as more aggressive and capable of faster growth, attracting more risk-tolerant income investors [12]. - A combined investment in both REITs could provide a balanced approach, leveraging the strengths of each [8].

Q1 2025 QUARTERLY SUPPLEMENTAL INFORMATION Broadstone Net Lease, Inc. (NYSE: BNL) is an industrial- focused, diversified net lease real estate investment trust (REIT) that invests in single-tenant commercial real estate properties that are net leased on a long-term basis to a diversified group of tenants. www.broadstone.com Table of Contents | Section | Page | | --- | --- | | About the Data | 3 | | Company Overview | 4 | | Quarterly Financial Summary | 5 | | Balance Sheet | 6 | | Income Statement Summary | ...