Realty Income Corporation raised its 2026 adjusted funds from operations (AFFO) forecast after stronger third-quarter per-share results, but lowered net income guidance, giving investors a mixed view of the property trust’s earnings outlook.
The company now expects AFFO of $4.45 to $4.46 per diluted common share, compared with its previous range of $4.44 to $4.45. Its net income per-share forecast fell to $1.55 to $1.56 from $1.59 to $1.60. The Nov. 2 results release did not explain why net income guidance fell while AFFO guidance rose.
AFFO per share reached $1.12 in the quarter ended Sept. 30, up from $1.08 a year earlier. For the first nine months of 2026, it was $3.35, compared with $3.19 in the same period of 2025. Realty Income classifies AFFO as a non-GAAP measure and says it adjusts funds from operations for revenue and expense items the company considers unique. It also reports net income and earnings per share.
Quarterly revenue increased to $1,621.6 million from $1,470.6 million. Net income available to common stockholders rose to $403.9 million, or $0.43 per share, from $315.8 million, or $0.35 per share.
The quarter's investments had a 6.8% initial cash yield on a weighted average basis; Realty Income's pro-rata share was $2,230.3 million of the $2,566.4 million total. Investment volume for the first nine months totaled $7,901.5 million. The company retained its $10 billion target for 2026, stated at 100% of investment volume.
The quarter’s European activity included a newly formed, euro-denominated joint venture. KKR invested €528 million for a 49% equity interest in the venture, which holds 54 stabilized net lease properties across four European countries.
At Sept. 30, Realty Income owned or held interests in 15,536 properties leased to 1,842 clients across 96 industries. Occupancy was 98.8%, the weighted average remaining lease term was about 8.5 years, and net debt to annualized pro forma Adjusted EBITDAre was 5.4x. President and Chief Executive Officer Sumit Roy said the company funded investments at a realized leverage-neutral spread of about 170 basis points and had prefunded its equity needs for the rest of 2026. He cited economic and cost-of-capital volatility.
