San Diego’s Realty Income to Acquire Rival, Creating $50 Billion Real Estate Investment Trust

Realty Income Corp. Headquarters in the Carmel Valley. Courtesy of the company

San Diego-based Realty Income announced Thursday that it will merge with Phoenix-based rival VEREIT to create a $ 50 billion real estate investment trust.

VEREIT shareholders will receive 0.705 Realty Income shares for each VEREIT share they own. The deal is valued at $ 11 billion.

Upon completion, the office properties of both companies will be outsourced to a separate listed property investment trust. Realty Income will then focus on retail and industrial real estate with a single tenant and net leases in the US and UK.

“We believe that the merger with VEREIT will result in immediate profit growth and value creation for Realty Income shareholders while enhancing our ability to execute our ambitious growth initiatives,” said Sumit Roy, President and Chief Executive Officer of Realty Income.

“Together, our company will grow in size, scope and diversification, and Realty Income will continue to distance itself as a leader in the net rental industry,” he added. “VEREIT’s real estate portfolio complements our portfolio very well. We believe this will further improve the consistency and durability of our cash flows. “

Following the transaction, Realty Income will own a portfolio of 10,300 commercial real estate rentals, primarily single tenants and net leases, located in all 50 states, Puerto Rico and the United Kingdom. Key customers include Walgreens, Dollar General, FedEx, 7-Eleven, LA Fitness, and Walmart.

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