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Table of Contents


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC  20549
FORM 10-Q
Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended September 30, 2023, or
Transition report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934
Commission File Number 1-13374
Image2.jpg
REALTY INCOME CORPORATION
(Exact name of registrant as specified in its charter)
Maryland
33-0580106
(State or Other Jurisdiction of Incorporation or Organization)
(IRS Employer Identification Number)
11995 El Camino Real, San Diego, California 92130
(Address of Principal Executive Offices)
Registrant’s telephone number, including area code: (858) 284-5000
Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading Symbol(s)Name of Each Exchange On Which Registered
Common Stock, $0.01 Par ValueONew York Stock Exchange
1.125% Notes due 2027O27ANew York Stock Exchange
1.875% Notes due 2027O27BNew York Stock Exchange
1.625% Notes due 2030O30New York Stock Exchange
4.875% Notes due 2030O30ANew York Stock Exchange
1.750% Notes due 2033O33ANew York Stock Exchange
5.125% Notes due 2034O34New York Stock Exchange
2.500% Notes due 2042O42New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes       No 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes      No 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," “accelerated filer,” "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes      No 
There were 723,923,644 shares of common stock outstanding as of November 3, 2023.


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REALTY INCOME CORPORATION
Index to Form 10-Q
September 30, 2023
Page
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Table of Contents


PART 1. FINANCIAL INFORMATION
Item 1: Financial Statements
REALTY INCOME CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts) (unaudited)
September 30, 2023December 31, 2022
ASSETS
Real estate held for investment, at cost:
Land$14,408,324 $12,948,835 
Buildings and improvements33,606,951 29,707,751 
Total real estate held for investment, at cost48,015,275 42,656,586 
Less accumulated depreciation and amortization(5,781,056)(4,904,165)
Real estate held for investment, net42,234,219 37,752,421 
Real estate and lease intangibles held for sale, net19,927 29,535 
Cash and cash equivalents344,129 171,102 
Accounts receivable, net678,441 543,237 
Lease intangible assets, net5,089,293 5,168,366 
Goodwill3,731,478 3,731,478 
Other assets, net3,239,433 2,276,953 
Total assets$55,336,920 $49,673,092 
LIABILITIES AND EQUITY
Distributions payable$187,288 $165,710 
Accounts payable and accrued expenses660,366 399,137 
Lease intangible liabilities, net1,426,264 1,379,436 
Other liabilities786,437 774,787 
Line of credit payable and commercial paper858,260 2,729,040 
Term loan, net1,287,995 249,755 
Mortgages payable, net824,240 853,925 
Notes payable, net17,482,652 14,278,013 
Total liabilities23,513,502 20,829,803 
Commitments and contingencies (Note 17)
Stockholders’ equity:
Common stock and paid in capital, par value $0.01 per share, 1,300,000 shares authorized, 723,894 and 660,300 shares issued and outstanding as of September 30, 2023, and December 31, 2022, respectively
38,031,829 34,159,509 
Distributions in excess of net income(6,416,534)(5,493,193)
Accumulated other comprehensive income41,849 46,833 
Total stockholders’ equity31,657,144 28,713,149 
Noncontrolling interests166,274 130,140 
Total equity31,823,418 28,843,289 
Total liabilities and equity$55,336,920 $49,673,092 
The accompanying notes to consolidated financial statements are an integral part of these statements.
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Table of Contents


REALTY INCOME CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(in thousands, except per share amounts) (unaudited)
Three months ended
September 30,
Nine months ended
September 30,
 2023202220232022
REVENUE
Rental (including reimbursable)$1,008,862 $825,946 $2,929,440 $2,426,311 
Other30,242 11,323 73,268 28,720 
Total revenue1,039,104 837,269 3,002,708 2,455,031 
EXPENSES
Depreciation and amortization495,566 419,016 1,419,321 1,232,215 
Interest184,121 117,409 522,110 333,933 
Property (including reimbursable)70,981 52,719 235,081 157,241 
General and administrative35,525 34,096 106,521 100,934 
Provisions for impairment16,808 1,650 59,801 16,379 
Merger and integration-related costs2,884 3,746 4,532 12,994 
Total expenses805,885 628,636 2,347,366 1,853,696 
Gain on sales of real estate7,572 42,883 19,675 93,611 
Foreign currency and derivative (loss) gain, net(2,813)(22,893)4,957 (16,003)
Gain on extinguishment of debt 240  367 
Equity in income and impairment of investment in unconsolidated entities (662)411 (6,335)
Other income, net7,235 2,249 12,985 6,907 
Income before income taxes245,213 230,450 693,370 679,882 
Income taxes(11,336)(10,163)(36,218)(35,802)
Net income233,877 220,287 657,152 644,080 
Net income attributable to noncontrolling interests(404)(720)(3,248)(1,937)
Net income available to common stockholders$233,473 $219,567 $653,904 $642,143 
Amounts available to common stockholders per common share:
Net income, basic and diluted$0.33 $0.36 $0.96 $1.06 
Weighted average common shares outstanding:
Basic709,165 617,512 681,419 604,464 
Diluted709,543 617,957 682,129 604,836 
Net income available to common stockholders$233,473 $219,567 $653,904 $642,143 
Total other comprehensive loss
Foreign currency translation adjustment(61,401)(89,231)(3,605)(148,929)
Unrealized gain (loss) on derivatives, net7,193 41,914 (1,379)119,058 
Total other comprehensive loss$(54,208)$(47,317)$(4,984)$(29,871)
Comprehensive income available to common stockholders$179,265 $172,250 $648,920 $612,272 
The accompanying notes to consolidated financial statements are an integral part of these statements.

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Table of Contents


REALTY INCOME CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EQUITY 
(in thousands) (unaudited)
Three months ended September 30, 2023, and 2022
Shares of
common
stock
Common
stock and
paid in
capital
Distributions
in excess of
net income
Accumulated
other
comprehensive income (loss)
Total
stockholders’
equity
Noncontrolling
interests
Total
equity
Balance, June 30, 2023
708,773 $37,149,380 $(6,102,226)$96,057 $31,143,211 $167,932 $31,311,143 
Net income— — 233,473 — 233,473 404 233,877 
Other comprehensive loss— — — (54,208)(54,208)— (54,208)
Distributions paid and payable— — (547,781)— (547,781)(2,497)(550,278)
Share issuances, net of costs15,122 876,253 — — 876,253 — 876,253 
Contributions by noncontrolling interests— — — — — 435 435 
Share-based compensation, net
(1)6,196 — — 6,196 — 6,196 
Balance, September 30, 2023
723,894 $38,031,829 $(6,416,534)$41,849 $31,657,144 $166,274 $31,823,418 
Balance, June 30, 2022
617,564 $31,303,383 $(4,999,150)$22,379 $26,326,612 $76,267 $26,402,879 
Net income— — 219,567 — 219,567 720 220,287 
Other comprehensive loss— — — (47,317)(47,317)— (47,317)
Distributions paid and payable— — (461,429)— (461,429)(1,070)(462,499)
Issuance of common partnership units— — — — — 51,221 51,221 
Share issuances, net of costs9,582 694,708 — — 694,708 — 694,708 
Share-based compensation, net— 4,978 — — 4,978 — 4,978 
Balance, September 30, 2022
627,146 $32,003,069 $(5,241,012)$(24,938)$26,737,119 $127,138 $26,864,257 
Nine months ended September 30, 2023 and 2022
Shares of
common
stock
Common
stock and
paid in
capital
Distributions
in excess of
net income
Accumulated
other
comprehensive
income (loss)
Total
stockholders’
equity
Noncontrolling
interests
Total
equity
Balance, December 31, 2022660,300 $34,159,509 $(5,493,193)$46,833 $28,713,149 $130,140 $28,843,289 
Net income— — 653,904 — 653,904 3,248 657,152 
Other comprehensive loss— — — (4,984)(4,984)— (4,984)
Distributions paid and payable— — (1,577,245)— (1,577,245)(7,108)(1,584,353)
Share issuances, net of costs63,348 3,858,347 — — 3,858,347 3,858,347 
Contributions by noncontrolling interests— — — — — 39,994 39,994 
Share-based compensation, net246 13,973 — — 13,973 — 13,973 
Balance, September 30, 2023
723,894 $38,031,829 $(6,416,534)$41,849 $31,657,144 $166,274 $31,823,418 
Balance December 31, 2021591,262 $29,578,212 $(4,530,571)$4,933 $25,052,574 $76,826 $25,129,400 
Net income— — 642,143 — 642,143 1,937 644,080 
Other comprehensive loss— — — (29,871)(29,871)— (29,871)
Distributions paid and payable— — (1,352,584)— (1,352,584)(2,846)(1,355,430)
Issuance of common partnership units— — — — — 51,221 51,221 
Share issuances, net of costs35,715 2,415,281 — — 2,415,281 — 2,415,281 
Share-based compensation, net169 9,576 — — 9,576 — 9,576 
Balance, September 30, 2022
627,146 $32,003,069 $(5,241,012)$(24,938)$26,737,119 $127,138 $26,864,257 
The accompanying notes to consolidated financial statements are an integral part of these statements.
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REALTY INCOME CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands) (unaudited)
Nine months ended
September 30,
20232022
CASH FLOWS FROM OPERATING ACTIVITIES
Net income$657,152 $644,080 
Adjustments to net income:
Depreciation and amortization1,419,321 1,232,215 
Amortization of share-based compensation20,154 16,742 
Non-cash revenue adjustments(51,272)(37,538)
Gain on extinguishment of debt (367)
Amortization of net premiums on mortgages payable(9,597)(10,418)
Amortization of net premiums on notes payable(45,647)(47,185)
Amortization of deferred financing costs19,498 11,116 
(Loss) gain on interest rate swaps(5,390)2,181 
Foreign currency and unrealized derivative gain, net10,188 16,003 
Gain on sales of real estate(19,675)(93,611)
Equity in income and impairment of investment in unconsolidated entities(411)6,335 
Distributions from unconsolidated entities 1,605 
Provisions for impairment on real estate59,801 16,379 
Change in assets and liabilities
Accounts receivable and other assets(17,538)207,838 
Accounts payable, accrued expenses and other liabilities161,527 (32,009)
Net cash provided by operating activities2,198,111 1,933,366 
CASH FLOWS FROM INVESTING ACTIVITIES
Investment in real estate(6,702,140)(4,980,159)
Improvements to real estate, including leasing costs(47,107)(66,047)
Proceeds from sales of real estate92,772 414,688 
Return of investment from unconsolidated entities3,927 1,401 
Net proceeds from sale of unconsolidated entities 107,621 
Proceeds from note receivable 5,867 
Insurance proceeds received15,177 16,046 
Non-refundable escrow deposits(1,188)(28,556)
Net cash used in investing activities(6,638,559)(4,529,139)
CASH FLOWS FROM FINANCING ACTIVITIES
Cash distributions to common stockholders(1,555,679)(1,342,695)
Borrowings on line of credit and commercial paper programs33,021,401 19,644,724 
Payments on line of credit and commercial paper programs(34,909,165)(19,147,386)
Proceeds from term loan 1,029,383  
Proceeds from notes payable issued3,263,294 1,405,570 
Principal payments on mortgages payable(20,842)(311,083)
Proceeds from common stock offerings, net 3,849,963 2,404,092 
Proceeds from dividend reinvestment and stock purchase plan8,382 8,708 
Distributions to noncontrolling interests(5,585)(2,658)
Net receipts on derivative settlements2,191 7,474 
Debt issuance costs(35,014)(27,732)
Other items, including shares withheld upon vesting(6,181)(4,685)
Net cash provided by financing activities4,642,148 2,634,329 
Effect of exchange rate changes on cash and cash equivalents2,083 (82,012)
Net increase (decrease) in cash, cash equivalents and restricted cash203,783 (43,456)
Cash, cash equivalents and restricted cash, beginning of period226,881 332,369 
Cash, cash equivalents and restricted cash, end of period$430,664 $288,913 
For supplemental disclosures, see note 15, Supplemental Disclosures of Cash Flow Information.

The accompanying notes to consolidated financial statements are an integral part of these statements.
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REALTY INCOME CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2023
(unaudited)
1.    Basis of Presentation
Realty Income Corporation (“Realty Income,” the “Company,” “we,” “our” or “us”) was founded in 1969 and is organized as a Maryland corporation. We invest in commercial real estate and have elected to be taxed as a real estate investment trust ("REIT"). We are listed on the New York Stock Exchange ("NYSE") under the symbol “O”.
As of September 30, 2023, we owned or held interests in a diversified portfolio of 13,282 properties located in all 50 states of the United States ("U.S."), Puerto Rico, the United Kingdom ("U.K."), Spain, Italy, and Ireland, with approximately 262.6 million square feet of leasable space.
Our accompanying unaudited consolidated financial statements were prepared from our books and records in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). In the opinion of management, all adjustments (consisting of only normal recurring accruals) necessary to present a fair statement of results for the interim periods presented have been included. Operating results for the three and nine months ended September 30, 2023 are not necessarily an indication of the results that may be expected for the entire year. Readers of this quarterly report should refer to our audited consolidated financial statements for the year ended December 31, 2022, which are included in our 2022 Annual Report on Form 10-K, as certain disclosures that would substantially duplicate those contained in the audited financial statements have not been included in this report. The U.S. dollar (“USD”) is our reporting currency. Unless otherwise indicated, all dollar amounts are expressed in USD.
For our consolidated subsidiaries whose functional currency is not the USD, we translate their financial statements into USD at the time we consolidate those subsidiaries’ financial statements. Generally, assets and liabilities are translated at the exchange rate in effect at the balance sheet date. The resulting translation adjustments are included in 'Accumulated other comprehensive income' ("AOCI") in the consolidated balance sheets. Certain balance sheet items, primarily equity and capital-related accounts, are reflected at the historical exchange rate. Income statement accounts are translated using the average exchange rate for the period.
We and certain of our consolidated subsidiaries have intercompany and third-party debt that is not denominated in our functional currency. When the debt is remeasured to the functional currency of the entity, a gain or loss can result. The resulting adjustment is reflected in 'Foreign currency and derivative (loss) gain, net' in the consolidated statements of income and comprehensive income. Intercompany accounts and transactions are eliminated in consolidation.
Principles of Consolidation. These consolidated financial statements include the accounts of Realty Income and all other entities in which we have a controlling financial interest. We evaluate whether we have a controlling financial interest in an entity in accordance with Accounting Standards Codification ("ASC") 810, Consolidation.
Voting interest entities are entities considered to have sufficient equity at risk and which the equity holders have the obligation to absorb losses, the right to receive residual returns and the right to make decisions about the entity’s activities. We consolidate voting interest entities in which we have a controlling financial interest, which we typically have through holding of a majority of the entity’s voting equity interests.
Variable interest entities ("VIEs") are entities that lack sufficient equity at risk or where the equity holders either do not have the obligation to absorb losses, do not have the right to receive residual returns, do not have the right to make decisions about the entity’s activities, or some combination of the above. A controlling financial interest in a VIE is present when an entity has a variable interest, or a combination of variable interests, that provides the entity with (i) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. An entity that meets both conditions above is deemed the primary beneficiary and consolidates the VIE. We reassess our initial evaluation of whether an entity is a VIE when certain reconsideration events occur. We reassess our determination of whether we are the primary beneficiary of a VIE on an ongoing basis based on current facts and circumstances.

At September 30, 2023, Realty Income, L.P. and certain investments, including investments in joint ventures, are considered VIEs in which we were deemed the primary beneficiary based on our controlling financial interests.
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Below is a summary of selected financial data of consolidated VIEs included in the consolidated balance sheets at September 30, 2023, and December 31, 2022 (in thousands):
September 30, 2023December 31, 2022
Net real estate
$2,494,915$920,032 
Total assets
$3,161,113$1,082,346 
Total liabilities
$119,552$60,127 
The portion of a consolidated entity not owned by us is recorded as a noncontrolling interest. Noncontrolling interests are reflected on our consolidated balance sheets as a component of equity. Noncontrolling interests that were created or assumed as part of a business combination or asset acquisition were recognized at fair value as of the date of the transaction (see note 9, Noncontrolling Interests).
Reclassification. Certain prior period amounts have been reclassified to conform to the current year presentation.
Value-added tax receivable is included in 'Other assets, net', in the consolidated balance sheets. Previously, this was categorized as 'Accounts receivable, net' in the consolidated balance sheets.
Use of Estimates. The consolidated financial statements were prepared in conformity with U.S. GAAP, which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Segment Reporting. We report our results in a single reportable segment, which reflects how our chief operating decision maker allocates resources and assesses our performance.
Income Taxes. We have elected to be taxed as a REIT, under the Internal Revenue Code of 1986, as amended. We believe we have qualified and continue to qualify as a REIT. Under the REIT operating structure, we are permitted to deduct dividends paid to our stockholders in determining our taxable income. Assuming our dividends equal or exceed our taxable net income in the U.S., we generally will not be required to pay U.S. income taxes on such income. Accordingly, no provision has been made for federal income taxes in the accompanying consolidated financial statements, except for federal income taxes of our taxable REIT subsidiaries ("TRS"). A TRS is a subsidiary of a REIT that is subject to federal, state and local income taxes, as applicable. Our use of TRS entities enables us to engage in certain business activities while complying with the REIT qualification requirements and to retain any income generated by these businesses for reinvestment without the requirement to distribute those earnings. For our international territories, we are liable for taxes in the United Kingdom and Spain. Accordingly, provisions have been made for U.K. and Spain income taxes. Therefore, the income taxes recorded on our consolidated statements of income and comprehensive income represent amounts accrued or paid by Realty Income and its subsidiaries for U.S. income taxes on our TRS entities, city and state income and franchise taxes, and income taxes for the U.K. and Spain.
Earnings and profits that determine the taxability of distributions to stockholders differ from net income reported for financial reporting purposes primarily due to differences in the estimated useful lives and methods used to compute depreciation and the carrying value (basis) of the investments in properties for tax purposes, among other things.
We regularly analyze our various international, federal and state filing positions and only recognize the income tax effect in our financial statements when certain criteria regarding uncertain income tax positions have been met. We believe that our income tax positions would more likely than not be sustained upon examination by all relevant taxing authorities. Therefore, no provisions for uncertain tax positions have been recorded on our consolidated financial statements.
Lease Revenue Recognition and Accounts Receivable. The majority of our leases are accounted for as operating leases. Under this method, leases that have fixed and determinable rent increases are recognized on a straight-line basis over the lease term. Any rental revenue contingent upon our client’s sales, or percentage rent, is recognized only after our client exceeds their sales breakpoint. Rental increases based upon changes in the consumer price indexes are recognized only after the changes in the indexes have occurred and are then applied according to the lease agreements. Contractually obligated rental revenue from our clients for recoverable real estate taxes and operating expenses are included in contractually obligated reimbursements by our clients, a component of rental revenue, in the period when such costs are incurred. Taxes and operating expenses paid directly by our clients are recorded on a net basis.
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Other revenue includes certain property-related revenue not included in rental revenue and interest income recognized on financing receivables for certain leases with above-market terms.
We assess the probability of collecting substantially all of the lease payments to which we are entitled under the original lease contract as required under Topic 842, Leases. We assess the collectability of our future lease payments based on an analysis of creditworthiness, economic trends and other facts and circumstances related to the applicable clients. If we conclude the collection of substantially all lease payments under a lease is less than probable, rental revenue recognized for that lease is limited to cash received going forward, existing operating lease receivables, including those related to straight-line rental revenue, must be written off as an adjustment to rental revenue, and no further operating lease receivables are recorded for that lease until such future determination is made that substantially all lease payments under that lease are now considered probable. If we subsequently conclude that the collection of substantially all lease payments under a lease is probable, a reversal of lease receivables previously written off is recognized.
Concentration of Credit Risk. There were no clients who accounted for more than more than 10% of our total revenue for each of the nine months ended September 30, 2023, and 2022.
Recent Accounting Pronouncements. The Company reviewed all recently issued accounting pronouncements and concluded that they were either not applicable or not expected to have a significant impact on our consolidated financial statements.
2.    Supplemental Detail for Certain Components of Consolidated Balance Sheets (in thousands):
A.
Accounts receivable, net, consist of the following at:September 30, 2023December 31, 2022
Straight-line rent receivables, net$484,423 $363,993 
Client receivables, net194,018 179,244 
$678,441 $543,237 
B.
Lease intangible assets, net, consist of the following at:
September 30, 2023December 31, 2022
In-place leases
$5,680,498 $5,324,565 
Accumulated amortization of in-place leases
(1,857,044)(1,409,878)
Above-market leases
1,820,105 1,697,367 
Accumulated amortization of above-market leases
(554,266)(443,688)
$5,089,293 $5,168,366 
C.
Other assets, net, consist of the following at:
September 30, 2023December 31, 2022
Financing receivables$1,638,967 $933,116 
Right of use asset - financing leases675,512 467,920 
Right of use asset - operating leases, net595,148 603,097 
Value-added tax receivable95,462 24,726 
Impounds related to mortgages payable45,224 18,152 
Derivative assets and receivables – at fair value44,753 83,100 
Prepaid expenses42,220 28,128 
Restricted escrow deposits41,311 37,627 
Credit facility origination costs, net13,497 17,196 
Corporate assets, net13,407 12,334 
Investment in sales type lease6,030 5,951 
Non-refundable escrow deposits1,188 5,667 
Other items26,714 39,939 
$3,239,433 $2,276,953 
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D.
Accounts payable and accrued expenses consist of the following at:
September 30, 2023December 31, 2022
Notes payable - interest payable$182,603 $129,202 
Accrued costs on properties under development87,672 26,559 
Property taxes payable87,316 45,572 
Derivative liabilities and payables – at fair value78,344 64,724 
Value-added tax payable64,197 23,375 
Accrued income taxes46,378 22,626 
Accrued property expenses42,366 25,290 
Mortgages, term loans, and credit line - interest payable8,188 5,868 
Other items63,302 55,921 
$660,366 $399,137 
E.
Lease intangible liabilities, net, consist of the following at:
September 30, 2023December 31, 2022
Below-market leases
$1,737,936 $1,617,870 
Accumulated amortization of below-market leases
(311,672)(238,434)
$1,426,264 $1,379,436 
F.
Other liabilities consist of the following at:
September 30, 2023December 31, 2022
Lease liability - operating leases, net$426,575 $440,096 
Rent received in advance and other deferred revenue 296,567 269,645 
Lease liability - financing leases42,251 49,469 
Security deposits21,044 15,577 
$786,437 $774,787 
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3.    Investments in Real Estate
A.    Acquisitions of Real Estate
Below is a summary of our acquisitions for the nine months ended September 30, 2023:

Number of
Properties
Leasable
Square Feet
(in thousands)
Investment
($ in millions)
Weighted
Average
Lease Term
(Years)
Initial
Weighted
Average Cash
Lease Yield (1)
Acquisitions - U.S. 802 14,730 $3,708.9 15.96.9 %
Acquisitions - Europe
80 8,608 2,191.6 15.67.1 %
Total acquisitions882 23,338 $5,900.5 15.87.0 %
Properties under development (2)
305 7,269 910.0 16.26.7 %
Total (3)
1,187 30,607 $6,810.5 15.86.9 %
(1)The initial weighted average cash lease yield for a property is generally computed as estimated contractual first year cash net operating income, which, in the case of a net leased property, is equal to the aggregate cash base rent for the first full year of each lease, divided by the total cost of the property. Since it is possible that a client could default on the payment of contractual rent (defined as the monthly aggregate cash amount charged to clients, inclusive of monthly base rent receivables), we cannot provide assurance that the actual return on the funds invested will remain at the percentages listed above. Contractual net operating income used in the calculation of initial weighted average cash lease yield includes approximately $3.7 million received as settlement credits as reimbursement of free rent periods for the nine months ended September 30, 2023.
In the case of a property under development or expansion, the contractual lease rate is generally fixed such that rent varies based on the actual total investment in order to provide a fixed rate of return. When the lease does not provide for a fixed rate of return on a property under development or expansion, the initial weighted average cash lease yield is computed as follows: estimated cash net operating income (determined by the lease) for the first full year of each lease, divided by our projected total investment in the property, including land, construction and capitalized interest costs.
(2)Includes £32.6 million of investments in four U.K. development properties and €25.9 million of investment in two Spain development properties, converted at the applicable exchange rates on the funding dates.
(3)Our clients occupying the new properties are 89.7% retail, 10.0% industrial, and 0.3% other property types based on annualized contractual rent. Approximately 25% of the annualized contractual rent generated from acquisitions during the nine months ended September 30, 2023 is from investment grade rated clients, their subsidiaries, or affiliated companies.
The aggregate purchase price of the assets acquired during the nine months ended September 30, 2023 has been allocated as follows (in millions):
Acquisitions - USDAcquisitions - SterlingAcquisitions - Euro
Land (1)
$727.7 £434.7 17.3 
Buildings and improvements2,640.0 824.8 24.2 
Lease intangible assets (2)
371.9 122.2 15.6 
Other assets (3)
560.3 326.1 1.6 
Lease intangible liabilities (4)
(110.2)(11.0)(0.8)
Other liabilities (5)
(8.7)(1.8) 
$4,181.0 £1,695.0 57.9 

(1)Sterling-denominated land includes £3.2 million of right of use assets under long-term ground leases.
(2)The weighted average amortization period for acquired lease intangible assets is 9.7 years.
(3)USD-denominated other assets consist entirely of financing receivables with above-market terms. Sterling-denominated other assets consist of £135.3 million of financing receivables with above-market terms and £190.8 million of right-of-use assets accounted for as finance leases.
(4)The weighted average amortization period for acquired lease intangible liabilities is 11.1 years.
(5)USD-denominated other liabilities consist entirely of deferred rent on certain below-market leases.
The properties acquired during the nine months ended September 30, 2023 generated total revenues of $174.4 million and net income of $91.6 million during the nine months ended September 30, 2023.
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B.    Investments in Existing Properties
During the nine months ended September 30, 2023, we capitalized costs of $43.6 million on existing properties in our portfolio, consisting of $36.5 million for non-recurring building improvements, $6.9 million for re-leasing costs, and $0.2 million for recurring capital expenditures. In comparison, during the nine months ended September 30, 2022, we capitalized costs of $70.6 million on existing properties in our portfolio, consisting of $63.7 million for non-recurring building improvements, $3.9 million for re-leasing costs, and $3.0 million for recurring capital expenditures.
C.    Properties with Existing Leases
The value of the in-place and above-market leases is recorded to 'Lease intangible assets, net' on our consolidated balance sheets, and the value of the below-market leases is recorded to 'Lease intangible liabilities, net' on our consolidated balance sheets.
The values of the in-place leases are amortized as depreciation and amortization expense. The amounts amortized to expense for all of our in-place leases, for the nine months ended September 30, 2023, and 2022 were $489.2 million and $476.8 million, respectively.
The values of the above-market and below-market leases are amortized over the term of the respective leases, including any bargain renewal options, as an adjustment to rental revenue in the consolidated statements of income and comprehensive income. The amounts amortized as a net decrease to rental revenue for capitalized above-market and below-market leases for the nine months ended September 30, 2023 and 2022 were $48.6 million and $41.2 million, respectively. If a lease was to be terminated prior to its stated expiration, all unamortized amounts relating to that lease would be recorded to revenue or expense, as appropriate.
The following table presents the estimated impact during the next five years and thereafter related to the amortization of the above-market and below-market lease intangibles and the amortization of the in-place lease intangibles at September 30, 2023 (dollars in thousands):
Net increase
(decrease) to
rental revenue
Increase to
amortization
expense
2023$(15,270)$159,999 
2024(55,582)580,180 
2025(48,736)499,404 
2026(41,027)444,691 
2027(32,426)385,298 
Thereafter353,466 1,753,882 
Totals$160,425 $3,823,454 
D.    Gain on Sales of Real Estate
The following table summarizes our properties sold during the periods indicated below (dollars in millions):
Three months ended
September 30,
Nine months ended
September 30,
2023202220232022
Number of properties24 35 79 139 
Net sales proceeds$32.3 $142.4 $92.8 $414.7 
Gain on sales of real estate$7.6 $42.9 $19.7 $93.6 

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4.    Revolving Credit Facility and Commercial Paper Programs
A.    Credit Facility
We have a $4.25 billion unsecured revolving multicurrency credit facility that matures in June 2026, includes two six-month extensions that can be exercised at our option, and allows us to borrow in up to 14 currencies, including USD. Our revolving credit facility also has a $1.0 billion expansion option, which is subject to obtaining lender commitments. Under our revolving credit facility, our current investment grade credit ratings provide for USD borrowings at the Secured Overnight Financing Rate ("SOFR"), plus 0.725% with a SOFR adjustment charge of 0.10% and a revolving credit facility fee of 0.125%, for all-in pricing of 0.95% over SOFR, British Pound Sterling at the Sterling Overnight Indexed Average (“SONIA”), plus 0.725% with a SONIA adjustment charge of 0.0326% and a revolving credit facility fee of 0.125%, for all-in pricing of 0.8826% over SONIA, and Euro Borrowings at one-month Euro Interbank Offered Rate (“EURIBOR”), plus 0.725%, and a revolving credit facility fee of 0.125%, for all-in pricing of 0.85% over one-month EURIBOR.
As of September 30, 2023, we had a borrowing capacity of $3.8 billion available on our revolving credit facility (subject to customary conditions to borrowing) and an outstanding balance of $481.5 million, comprised of £372.0 million Sterling and €26.0 million Euro borrowings, as compared to an outstanding balance at December 31, 2022 of $2.0 billion, comprised of 1.8 billion Euro and £70.0 million Sterling borrowings.
The weighted average interest rate on outstanding borrowings under our revolving credit facility was 4.8% and 1.7% during the nine months ended September 30, 2023, and 2022, respectively. At September 30, 2023, our weighted average interest rate on borrowings outstanding under our revolving credit facility was 5.9%. Our revolving credit facility is subject to various leverage and interest coverage ratio limitations, and at September 30, 2023, we were in compliance with the covenants under our revolving credit facility.
As of September 30, 2023, credit facility origination costs of $13.5 million are included in other assets, net, as compared to $17.2 million at December 31, 2022, on our consolidated balance sheets. These costs are being amortized over the remaining term of our revolving credit facility.
B.    Commercial Paper Programs
We have a USD-denominated unsecured commercial paper program, under which we may issue unsecured commercial paper notes up to a maximum aggregate amount outstanding of $1.5 billion, as well as a Euro-denominated unsecured commercial paper program, which permits us to issue additional unsecured commercial notes up to a maximum aggregate amount of $1.5 billion (or foreign currency equivalent). Our Euro-denominated unsecured commercial paper program may be issued in USD or various foreign currencies, including but not limited to, Euros, Sterling, Swiss Francs, Yen, Canadian Dollars, and Australian Dollars, in each case, pursuant to customary terms in the European commercial paper market.
The commercial paper ranks on a parity in right of payment with all of our other unsecured senior indebtedness outstanding from time to time, including borrowings under our revolving credit facility, our term loans and our outstanding senior unsecured notes. Proceeds from commercial paper borrowings are used for general corporate purposes.
As of September 30, 2023, the balance of borrowings outstanding under our commercial paper programs was $376.8 million, consisting entirely of Euro borrowings, as compared to $701.8 million outstanding commercial paper borrowings, including €361.0 million of Euro-denominated borrowings, at December 31, 2022. The weighted average interest rate on outstanding borrowings under our commercial paper programs was 4.7% and 1.3% for the nine months ended September 30, 2023, and 2022, respectively. As of September 30, 2023, our weighted average interest rate on outstanding borrowings under our commercial paper programs was 4.0%. We use our $4.25 billion revolving credit facility as a liquidity backstop for the repayment of the notes issued under the commercial paper programs. The commercial paper borrowings generally carry a term of less than a year.
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5.    Term Loans
In January 2023, we entered into a term loan agreement, permitting us to incur multicurrency term loans, up to an aggregate of $1.5 billion in total borrowings. As of September 30, 2023, we had $1.0 billion in multicurrency borrowings, including $90.0 million, £705.0 million, and €85.0 million in outstanding borrowings. The 2023 term loans initially mature in January 2024 and include two 12-month maturity extensions that can be exercised at our option, with an anticipated repayment date of January 2026. Our A3/A- credit ratings provide for a borrowing rate of 80 basis points over the applicable benchmark rate, which includes adjusted SOFR for USD-denominated loans, adjusted SONIA for Sterling-denominated loans, and EURIBOR for Euro-denominated loans. In conjunction with our 2023 term loans, we entered into interest rate swaps which fix our per annum interest rate. As of September 30, 2023, the effective interest rate, after giving effect to the interest rate swaps, was 5.0%.
We also have a $250.0 million senior unsecured term loan, which matures in March 2024. In conjunction with this term loan, we also entered into an interest rate swap. As of September 30, 2023, the effective interest rate on this term loan, after giving effect to the interest rate swap, was 3.8%.
At September 30, 2023, deferred financing costs of $2.3 million are included net of the term loans principal balance, as compared to $0.2 million related to our $250.0 million term loan at December 31, 2022, on our consolidated balance sheets. These costs are being amortized over the remaining term of the term loans. As of September 30, 2023, we were in compliance with the covenants contained in the term loans.
6.    Mortgages Payable
During the nine months ended September 30, 2023, we made $20.8 million in principal payments, including the full repayment of two mortgages for $17.4 million. No mortgages were assumed during the nine months ended September 30, 2023. Assumed mortgages are secured by the properties on which the debt was placed and are considered non-recourse debt with limited customary exceptions which vary from loan to loan.
Our mortgages contain customary covenants, such as limiting our ability to further mortgage each applicable property or to discontinue insurance coverage without the prior consent of the lender. At September 30, 2023, we were in compliance with these covenants.
The balance of our deferred financing costs, which are classified as part of 'Mortgages payable, net', on our consolidated balance sheets, was $0.6 million at September 30, 2023 and $0.8 million at December 31, 2022. These costs are being amortized over the remaining term of each mortgage.
The following table summarizes our mortgages payable as of September 30, 2023 and December 31, 2022 (dollars in millions):

As Of
Number of
Properties (1)
Weighted
Average
Stated
Interest
Rate (2)
Weighted
Average
Effective
Interest
Rate (3)
Weighted
Average
Remaining
Years Until
Maturity
Remaining
Principal
Balance
Unamortized
Premium
and Deferred
Financing Costs
Balance, net
Mortgage
Payable
Balance
September 30, 20231314.8 %3.3 %0.7$822.0 $2.3 $824.2 
December 31, 20221364.8 %3.3 %1.4$842.3 $11.6 $853.9 
(1)At September 30, 2023, there were 16 mortgages on 131 properties and at December 31, 2022, there were 18 mortgages on 136 properties. With the exception of one Sterling-denominated mortgage which is paid quarterly, the mortgages require monthly payments with principal payments due at maturity. At September 30, 2023 and December 31, 2022, all mortgages were at fixed interest rates.
(2) Stated interest rates ranged from 3.0% to 6.9% at September 30, 2023 and December 31, 2022, respectively.
(3) Effective interest rates ranged from 1.3% to 6.6% and 2.7% to 6.6% at September 30, 2023 and December 31, 2022, respectively.

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The following table summarizes the maturity of mortgages payable as of September 30, 2023, excluding $2.3 million related to unamortized net premiums and deferred financing costs (dollars in millions):
Year of Maturity
Principal
2023$1.3
2024740.5
202542.4
202612.0
202722.3
Thereafter3.5
Totals
$822.0
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7.    Notes Payable
A.    General
At September 30, 2023, our senior unsecured notes and bonds are USD-denominated, Sterling-denominated, and Euro-denominated. Foreign-denominated notes are converted at the applicable exchange rate on the balance sheet date. The following are sorted by maturity date (in thousands):
Carrying Value (USD) as of
Maturity DatesPrincipal (Currency Denomination)September 30, 2023December 31, 2022
4.600% Notes due 2024
February 6, 2024$499,999 $499,999 $499,999 
3.875% Notes due 2024
July 15, 2024$350,000 350,000 350,000 
3.875% Notes due 2025
April 15, 2025$500,000 500,000 500,000 
4.625% Notes due 2025
November 1, 2025$549,997 549,997 549,997 
5.050% Notes due 2026
January 13, 2026$500,000 500,000  
0.750% Notes due 2026
March 15, 2026$325,000 325,000 325,000 
4.875% Notes due 2026
June 1, 2026$599,997 599,997 599,997 
4.125% Notes due 2026
October 15, 2026$650,000 650,000 650,000 
1.875% Notes due 2027 (1)
January 14, 2027£250,000 305,075 301,225 
3.000% Notes due 2027
January 15, 2027$600,000 600,000 600,000 
1.125% Notes due 2027 (1)
July 13, 2027£400,000 488,120 481,960 
3.950% Notes due 2027
August 15, 2027$599,873 599,873 599,873 
3.650% Notes due 2028
January 15, 2028$550,000 550,000 550,000 
3.400% Notes due 2028
January 15, 2028$599,816 599,816 599,816 
2.200% Notes due 2028
June 15, 2028$499,959 499,959 499,959 
4.700% Notes due 2028
December 15, 2028$400,000 400,000  
3.250% Notes due 2029
June 15, 2029$500,000 500,000 500,000 
3.100% Notes due 2029
December 15, 2029$599,291 599,291 599,291 
4.850% Notes due 2030
March 15, 2030$600,000 600,000  
3.160% Notes due 2030
June 30, 2030£140,000 170,842 168,686 
4.875% Notes due 2030 (1)
July 6, 2030550,000 582,120  
1.625% Notes due 2030 (1)
December 15, 2030£400,000 488,120 481,960 
3.250% Notes due 2031
January 15, 2031$950,000 950,000 950,000 
3.180% Notes due 2032
June 30, 2032£345,000 421,004 415,691 
5.625% Notes due 2032
October 13, 2032$750,000 750,000 750,000 
2.850% Notes due 2032
December 15, 2032$699,655 699,655 699,655 
1.800% Notes due 2033
March 15, 2033$400,000 400,000 400,000 
1.750% Notes due 2033 (1)
July 13, 2033£350,000 427,105 421,715 
4.900% Notes due 2033
July 15, 2033$600,000 600,000  
2.730% Notes due 2034
May 20, 2034£315,000 384,395 379,544 
5.125% Notes due 2034 (1)
July 6, 2034550,000 582,120  
5.875% Bonds due 2035
March 15, 2035$250,000 250,000 250,000 
3.390% Notes due 2037
June 30, 2037£115,000 140,335 138,563 
2.500% Notes due 2042 (1)
January 14, 2042£250,000 305,075 301,225 
4.650% Notes due 2047
March 15, 2047$550,000 550,000 550,000 
Total principal amount$17,417,897 $14,114,156 
Unamortized net premiums, deferred financing costs, and cumulative basis adjustment on fair value hedge (2)
64,755 163,857 
 $17,482,652 $14,278,013 
(1) Interest paid annually. Interest on the remaining senior unsecured notes and bond obligations included in the table is paid semi-annually.
(2) In January 2023, in conjunction with the pricing of these senior unsecured notes due January 2026, we entered into three-year, fixed-to-variable interest rate swaps, which are accounted for as fair value hedges. See Note 11, Derivative Instruments for further details.
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The following table summarizes the maturity of our notes and bonds payable as of September 30, 2023, excluding $64.8 million related to unamortized net premiums, deferred financing costs, and basis adjustment on interest rate swaps designated as fair value hedges (dollars in millions):
Year of Maturity
Principal
2023$ 
2024850.0 
20251,050.0 
20262,075.0 
20271,993.1 
Thereafter11,449.8 
Totals
$17,417.9 
As of September 30, 2023, the weighted average interest rate on our notes and bonds payable was 3.7%, and the weighted average remaining years until maturity was 6.6 years.
Interest incurred on all of the notes and bonds was $159.7 million and $107.9 million for the three months ended September 30, 2023, and 2022, respectively, and $434.1 million and $314.0 million for the nine months ended September 30, 2023, and 2022, respectively.
Our outstanding notes and bonds are unsecured; accordingly, we have not pledged any assets as collateral for these or any other obligations.
All of these notes and bonds contain various covenants, including: (i) a limitation on incurrence of any debt which would cause our debt to total adjusted assets ratio to exceed 60%; (ii) a limitation on incurrence of any secured debt which would cause our secured debt to total adjusted assets ratio to exceed 40%; (iii) a limitation on incurrence of any debt which would cause our debt service coverage ratio to be less than 1.5 times; and (iv) the maintenance at all times of total unencumbered assets not less than 150% of our outstanding unsecured debt. At September 30, 2023, we were in compliance with these covenants.
B.    Note Issuances
During the nine months ended September 30, 2023, we issued the following notes and bonds (in millions):
Date of IssuanceMaturity DatePrincipal amountPrice of par valueEffective yield to maturity
5.050% Notes
January 2023January 2026$500.0 
(1)
99.618 %5.189 %
4.850% Notes
January 2023March 2030$600.0 98.813 %5.047 %
4.700% Notes
April 2023December 2028$400.0 98.949 %4.912 %
4.900% Notes
April 2023July 2033$600.0 98.020 %5.148 %
4.875% Notes
July 2023July 2030550.0 99.421 %4.975 %
5.125% Notes
July 2023July 2034550.0 99.506 %5.185 %

(1)    In January 2023, we issued $500 million of 5.05% senior unsecured notes due January 13, 2026, which are callable at par on January 13, 2024.


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8.    Issuances of Common Stock
A.    At-the-Market ("ATM") Program
In August 2023, we replaced our prior ATM program with a new ATM program, pursuant to which we may offer and sell up to 120.0 million shares of common stock (1) by us to, or through, a consortium of banks acting as our sales agents or (2) by a consortium of banks acting as forward sellers on behalf of any forward purchasers contemplated thereunder, in each case by means of ordinary brokers' transactions on the NYSE under the ticker symbol "O" at prevailing market prices or at negotiated prices. Upon settlement, subject to certain exceptions, we may elect, in our sole discretion, to cash settle or net share settle all or any portion of our obligations under any forward sale agreement, in which cases we may not receive any proceeds (in the case of cash settlement) or will not receive any proceeds (in the case of net share settlement), and we may owe cash (in the case of cash settlement) or shares of our common stock (in the case of net share settlement) to the relevant forward purchaser. Of the 120.0 million shares of our common stock available for sale under the prior ATM program at its inception, a total of 101.8 million of those shares were sold, the remainder of which were terminated. As of September 30, 2023, we had 102.7 million shares remaining for future issuance under our new ATM program. We anticipate maintaining the availability of our ATM program in the future, including the replenishment of authorized shares issuable thereunder.

The following table outlines common stock issuances pursuant to our ATM programs (dollars in millions):
Three months ended
September 30,
Nine months ended
September 30,
2023202220232022
Shares of common stock issued under the ATM program(1)
15,070,3429,532,85363,209,97335,506,034
Gross proceeds$883.0 $696.6 $3,880.4 $2,424.1 
Sales agents' commissions and other offering expenses(9.7)(5.2)(30.4)(20.0)
Net proceeds$873.3 $691.4 $3,850.0 $2,404.1 

(1) During the three and nine months ended September 30, 2023, 23.5 million and 69.7 million shares were sold, respectively, and 15.1 million and 63.2 million shares were settled pursuant to forward sale confirmations, respectively. In addition, as of September 30, 2023, 13.3 million shares of common stock subject to forward sale confirmations have been executed, but not settled, at a weighted average initial gross price of $56.61 per share. We currently expect to fully settle forward sale agreements outstanding by December 31, 2023, representing $749.3 million in net proceeds, for which the weighted average forward price at September 30, 2023 was $56.47 per share.

B.    Dividend Reinvestment and Stock Purchase Plan ("DRSPP")
Our DRSPP, provides our common stockholders, as well as new investors, with a convenient and economical method of purchasing our common stock and reinvesting their distributions. Our DRSPP also allows our current stockholders to buy additional shares of common stock by reinvesting all or a portion of their distributions. Our DRSPP authorizes up to 26.0 million common shares to be issued. At September 30, 2023, we had 11.0 million shares remaining for future issuance under our DRSPP program.
The following table outlines common stock issuances pursuant to our DRSPP program (dollars in millions):
Three months ended
September 30,
Nine months ended
September 30,
2023202220232022
Shares of common stock issued under the DRSPP program51,951