Realty Income (O -3.09%) was the first real estate investment trust, or REIT, that I ever bought in my personal stock portfolio. I started buying shares over a decade ago and have added to my position more than a dozen times since then, and that's not including shares I've bought through automatic dividend reinvestment.

The simple explanation of why I own Realty Income is that it is a big part of my retirement income strategy. It has a strong history of market-beating performance, pays its dividend in monthly installments, and has increased its payout well over 100 times since listing on the New York Stock Exchange in 1994, and with absolutely no dividend cuts along the way.

Over the past year, Realty Income has seen its share price decline by about 20%, and several friends have asked me if I'm rethinking my position. And the short answer is that I'm certainly thinking about it -- but not about reducing the size of my investment. In fact, if the current share price holds, I'm planning to buy even more.

Realty Income's stock is having a rough year

As mentioned, Realty Income's stock price has fallen by 20% over the past year, and while this might not sound like a big move compared to some of the most popular tech stocks, this is a big drop for Realty Income. After all, not only does Realty Income have a nearly 30-year track record of producing market-beating long-term performance, but it has done so while averaging half of the volatility of the typical S&P 500 stock.

However, it's important to point out that Realty Income's stock performance over the past year has little to do with the business itself.

Rising interest rates are likely the main reason for the underperformance. Income-focused stocks like REITs tend to be highly sensitive to rising rates. Without going too deep into the weeds on an economics lesson, the simple explanation is that when the yields investors can get from risk-free instruments like Treasuries and CDs rise, yields from stocks like Realty Income tend to rise along with them. Since yield and stock price have an inverse relationship, this can put downward pressure on the stock. In addition, rising rates makes it more expensive for REITs to borrow money, which can cause growth to slow significantly.

The business is performing quite well

Despite the poor stock performance, Realty Income's business continues to do exactly what it's supposed to.

If you aren't familiar, Realty Income is a real estate investment trust, or REIT, that specializes in single-tenant, net-leased properties. Most are leased to retail tenants, but there are also industrial, agricultural, and gaming tenants as well. At the end of the second quarter, Realty Income owned more than 13,100 properties throughout the U.S. and in a few countries in Europe.

The business is designed to produce steady and predictable income growth over time. Most of its tenants are in recession-resistant businesses, sign long-term leases, and pay the property taxes, insurance, and maintenance expenses on the properties.

Despite the rising-rate environment and widespread recession fears, Realty Income continues to produce steady growth. In the second quarter, the company's adjusted funds from operations (FFO) per share grew by more than 3% year over year. The company increased its dividend for the 121st time in less than 30 years in June, and although interest rates are significantly higher than a couple of years ago, Realty Income's size and financial strength allows it to still get relatively low-cost capital, including two separate debt issuances with interest rates below 5% in the fourth quarter.

It's also worth mentioning that just because Realty Income is one of the largest REITs in the market doesn't mean that it can't get much larger from here. It's tough to quantify Realty Income's addressable market opportunity because it invests in multiple types of commercial properties, but just the net-lease retail and service real estate markets have been estimated at several trillion dollars in size in the United States alone. Realty Income has grown from a single Taco Bell location in 1969 to more than 13,000 properties today, but it could easily grow to several times its current size in the years ahead.

My first REIT, and one I plan to keep buying

At the current stock price, Realty Income offers a dividend yield of 5.6% that is more than covered by the company's FFO (the REIT version of "earnings"). With a resilient business model, lots of room to grow, and a stellar track record of providing steady income and strong returns, I plan to keep building my position in Realty Income for many years to come.