Realty Income's Strategic Partnerships: Will it Boost Growth?

Realty Income O announced that it has established a strategic partnership with GIC. The partnership includes the formation of a programmatic joint venture (JV) primarily focused on build-to-suit development of high-quality logistics real estate, pre-leased long-term to investment-grade tenants in the United States.

The JV will have more than $1.5 billion of combined capital commitments from both companies. Realty Income will majority-own purchased assets, while GIC serves as a cornerstone investor in Realty Income’s U.S. Core Plus fund.

The deal expands Realty Income's footprint in Mexico through a $200 million commitment. This includes construction financing and a takeout purchase upon completion for a USD-denominated industrial portfolio.

This partnership is designed to be long-term and programmatic, forming part of Realty Income's private capital initiative. It seeks to broaden funding sources beyond public capital markets and extend the investable universe to core investment opportunities offering compelling long-term returns.

Beyond this, Realty Income has selectively expanded into alternative assets. High-profile investments in gaming properties such as Encore Boston Harbor and Bellagio Las Vegas, along with its partnership with Digital Realty DLR in data centers, highlight a strategy aimed at capturing long-term growth opportunities beyond core retail.

Where Do Other Retail REITs See Growth Opportunities?

Simon Property Group SPG is expanding its portfolio through development, redevelopment and acquisitions. Simon Property acquired Phillips Place in the heart of the SouthPark neighborhood of Charlotte, NC, which is an open-air retail center with nearly 134,000 square feet of space. It is well known for its specialty retail and restaurants. Earlier, Simon Property acquired the remaining 12% interest in the Taubman Realty Group.

Kimco Realty KIM is driving growth through redevelopments, selective acquisitions and asset recycling. During the third quarter, Kimco acquired the remaining 85% ownership interest in Tanasbourne Village for a pro-rata purchase price of $65.9 million. Kimco sold two shopping centers, namely Gresham Town Fair, located at Gresham, OR, for $31.8 million and Southfield Plaza, located at Southfield, MI, for $14.4 million.

O’s Price Performance, Valuation and Estimates

Shares of Realty Income have increased 0.4% over the past six months compared to the industry’s rise of 3.5%.

From a valuation standpoint, O trades at a forward 12-month price-to-FFO of 13.31, below the industry but close to its one-year median of 13.22. It carries a Value Score of D.

While the Zacks Consensus Estimate for O’s 2025 FFO per share has been revised southward over the past 60 days, the same for 2026 has been tweaked northward over the past 90 days.

At present, Realty Income carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research