Realty Income's Q4 AFFO Meets Estimates, Revenues Beat & Rise Y/Y

Realty Income Corporation O reported fourth-quarter 2025 adjusted funds from operations (AFFO) per share of $1.08, which met the Zacks Consensus Estimate. The reported figure compared favorably with the prior-year quarter’s AFFO of $1.05.

Results displayed year-over-year growth in the top line. The company benefited from improved occupancy and higher rents. However, a rise in interest expenses affected the results to some extent.

Total revenues were $1.49 billion, which surpassed the Zacks Consensus Estimate of $1.46 billion. The top line rose 11% year over year.

In 2025, Realty Income reported AFFO per share of $4.28, which outpaced the Zacks Consensus Estimate of $4.27. The figure compared favorably with the year-ago number of $4.19. Revenues of $5.75 billion jumped 9.1% year over year and topped the consensus mark of $5.72 billion.

O’s Q4 in Detail

In the fourth quarter, same-store rental revenues of $1.15 billion from 14,345 properties under lease witnessed a rise of 1.1% from the prior-year period.

The portfolio occupancy of 98.9% as of Dec. 31, 2025 increased 20 basis points sequentially, as well as year over year. In the reported quarter, the company achieved a rent recapture rate of 104.9% on re-leasing properties.

Interest expenses were up 7.5% year over year to $288.2 million in the reported quarter.

In the reported quarter, O acquired 114 properties for an aggregate value of $1.42 billion and invested $165.1 million in 49 properties under development.

The company sold 157 properties in the quarter, with net sales proceeds of $319.8 million and $67.4 million of gain on the sale of real estate.

O’s Balance Sheet

Realty Income exited the fourth quarter of 2025 with $4.12 billion of liquidity. This comprised cash and cash equivalents of $419.4 million, unsettled At-The-Market forward equity of $708.5 million and $3.51 billion of availability under its revolving credit facility.

Net debt to annualized pro-forma adjusted EBITDAre was 5.4X.

2026 Guidance by Realty Income

Management expects its 2026 AFFO per share to be in the band of $4.38-$4.42. The Zacks Consensus Estimate is pegged at $4.43, which is above the company’s guided range.

Full-year projections assume same-store rent growth of 1-1.3% and occupancy of around 98.5%. O now expects a full-year investment volume of approximately $8 billion.

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

Realty Income Corporation Price, Consensus and EPS Surprise

Realty Income Corporation price-consensus-eps-surprise-chart | Realty Income Corporation Quote

Performance of Other Retail REITs

Simon Property Group, Inc.’s SPG fourth-quarter 2025 real estate funds from operations (FFO) per share of $3.49 surpassed the Zacks Consensus Estimate of $3.47. This compared favorably with the real estate FFO of $3.35 in the prior-year period.

Results reflected an increase in revenues, backed by a rise in the base minimum rent per square foot. SPG issued its guidance for 2026 real estate FFO per share.

Regency Centers Corporation REG reported fourth-quarter 2025 NAREIT FFO per share of $1.17, in line with the Zacks Consensus Estimate. The figure increased 7.3% from the prior-year quarter.

REG’s results reflected healthy leasing activity. It witnessed a year-over-year improvement in the same-property NOI and base rents during the quarter. The company issued its 2026 NAREIT FFO per share outlook.

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.

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

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