Realty Income and KKR announce a euro-denominated joint venture to own a diversified European net lease portfolio contributed by Realty Income, spanning Spain, Ireland, Poland, and the Netherlands.

As of mid-2026, the joint venture shows a weighted average remaining lease term of 7.2 years, with 59% of base rent exposed to investment-grade tenants and a projected 1.6% annual contractual growth rate.

KKR will invest about €528 million for a 49% equity stake, while Realty Income holds 51% and continues to manage the portfolio.

In Q2 2026, Realty Income reported AFFO per share of USD 1.09, up 3.8% year over year, and raised full-year AFFO guidance to USD 4.44–USD 4.45 per share.

The company declared its 674th consecutive monthly dividend and 136th monthly increase as of early September, with the latest dividend of USD 0.2715 per share, implying an annualized yield around 5.2%–5.3% at recent prices.

The deal is expected to close by September 30, 2026, subject to customary closing conditions, with Lazard and Citi serving as financial advisors and DLA Piper and Latham & Watkins as legal advisers for Realty Income and KKR respectively.

Management views the closing as part of a broader strategy to grow Realty Income’s euro-denominated portfolio.

Realty Income will oversee ongoing asset management under a long-term agreement, with an implied initial cap rate of 5.9% after management fees.

The asset-management-driven results are supported by growth in external capital management, as management fees from the U.S. Core Plus Fund rose notably in the first half of 2026.

Investor takeaway: the venture, updated AFFO guidance, growing dividend, and expanding asset-management platform collectively reinforce Realty Income’s diversified growth narrative despite broader real estate headwinds.

The deal expands Realty Income’s international footprint and aims to grow fee-based income from managing third-party capital, leveraging its European platform.

The partnership focuses on high-quality, scalable European net lease assets under Realty Income’s operating framework, signaling potential regional growth.