Realty Income Corp. has entered into a partnership with Apollo under which Apollo-managed funds and affiliates will invest $1 billion for a 49 percent stake in a new joint venture. The venture will own a diversified portfolio of approximately 500 single-tenant retail properties subject to long-term net leases, and Realty Income will continue to manage the assets.
The structure is the result of extensive collaboration and creativity between the two parties, particularly with respect to the treatment of capital. “Something like this is highly bespoke and structured, and we took extra time to ensure the rating agencies were comfortable treating the investment as equity, with certain structural protections provided to Apollo,” said Jonathan Pong, CFO of Realty Income Corp. “This moved at a deliberate pace, but we endeavor to be methodical and intentional when doing something new.”
