Apollo To Invest $1B In 500 Realty Income Single-Tenant Properties

Asset manager Apollo Global Management, through managed funds and affiliates, will invest $1B for a 49% interest in a new joint venture with Realty Income Corp. to own a portfolio of single-tenant retail properties with long-term net leases.

Realty Income will continue managing the portfolio, which includes approximately 500 retail assets, according to a Realty Income press release. 

"We expect this partnership will serve as a template for a multi-billion-dollar, programmatic co-investing relationship in the U.S.," Realty Income President and CEO Sumit Roy said in a statement. 

Apollo partner Jamshid Ehsani echoed that the partnership represents "long-term alignment and repeatable capital deployment over time."

In the 12 months ending in June, the sale of net-leased assets was up 37% year-over-year as investors sought stability while global trade was the source of uncertainty and disruption.

Now, with questions around the conflict in Iran and where interest rates may be headed among the sources of unpredictability, it seems investors are once again reaching for reliable property types. 

Retail overall has seen an uptick in interest, from gas stations to car washes and convenience stores. 

The Apollo-Realty Income JV is an example of the net lease REIT’s private capital initiative, which seeks to diversify Realty Income's sources of capital and enhance its access to public equity markets. 

The deal with Apollo is expected to close March 31, according to Realty Income. 

In January, Realty Income Corp. launched a joint venture with GIC, Singapore’s sovereign wealth fund, focused on build-to-suit logistics properties with long-term net leases. That partnership sought to deploy more than $1.5B.