Realty Income (O +0.65%) has an elite track record. The real estate investment trust (REIT) has increased its monthly dividend every year since its public market listing in 1994. It has also delivered a positive total operational return (dividend income plus adjusted funds from operations (AFFO) per share growth) every year during that time frame. The company's remarkable consistency is a testament to its durable portfolio and resilient growth strategy.
The REIT delivered solid results in 2025. It increased its monthly dividend each quarter and achieved a total operational return of more than 8%, hitting the low end of its 8% to 12% historical range despite continued headwinds from higher interest rates. Realty Income expects to deliver even higher returns this year, driven by an anticipated acceleration in its investment volume.
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Leaning into its best investment opportunities
Realty Income initially expected to invest around $4 billion last year, putting it on track to grow its AFFO to a range of $4.22 to $4.28 per share. The REIT would go on to invest $6.3 billion last year, enabling it to achieve the high end of its AFFO range (2.1% growth compared to 2024). It capitalized on opportunities to raise capital at attractive rates and leveraged the flexibility of its diversified platform to secure compelling new investments.
Realty Income sourced a record $121 billion of investment volume last year, nearly triple 2024's level. However, it closed only 5% of those opportunities, remaining highly selective and advancing only the best investments. For example, it closed $1.6 billion in credit investments last year at an initial weighted-average cash yield of 8.2%. It also invested $537.7 million into development projects (7.4% yield) and spent $3.7 billion on acquisitions in Europe (7.4% yield). It focused on these areas because they offered a higher yield than U.S. investments (7.3%).
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Key Data Points
Accelerating in 2026
Realty Income aspires to be the real estate partner to the world's leading companies. One aspect of its partnership is buying properties from companies through sale-leaseback transactions to help them unlock the value of their real estate. Additionally, the REIT is increasingly forming strategic alliances with other leading real estate investors. Last year, the company launched its U.S. Private Fund Business, which has already raised $1.5 billion. Realty Income also formed a strategic partnership with GIC, including a joint venture that will invest over $1.5 billion in build-to-suit logistics real estate developments.
The REIT's increasingly diversified capital sources position it to meaningfully accelerate its investment volume this year. Realty Income initially expects to invest $8 billion into new properties. That supports its guidance of growing AFFO to a range of $4.38 to $4.42 per share, a 2.8% increase at the midpoint. With its monthly dividend currently yielding 4.9%, the REIT is on track to deliver a nearly 9% total operational return this year.
The steady growth will continue
"The momentum in our business is palpable," stated CEO Sumit Roy in the fourth-quarter earnings press release. The real estate giant expects to meaningfully accelerate its investment volume this year, setting the stage for faster earnings growth. That positions the REIT to continue increasing its high-yielding monthly dividend, maintaining its appeal as a top-tier income investment.
