Realty Income Corporation and Apollo Global Management have entered into a joint venture agreement involving a large portfolio of U.S. retail properties, with a targeted closing date of March 31, 2026.
The transaction will provide Realty Income with approximately $1 billion in gross proceeds in exchange for a 49% equity interest in the joint venture. The portfolio includes approximately 500 retail properties operated under long-term net lease agreements.
Deal Structure
Realty Income will retain a 51% ownership stake in the joint venture and continue to manage the portfolio under a long-term management agreement.
The agreement also includes a call option that allows Realty Income to repurchase Apollo’s interest between years 7 and 15. The structure includes provisions that limit Apollo’s internal rate of return (IRR) to approximately 6.875%.
The transaction remains subject to final documentation and customary closing conditions.
Portfolio Overview
As of December 31, 2025, the portfolio generates approximately $140 million in annualized base rent.
Key metrics include:
- Approximately 500 properties across the United States
- Weighted average lease term of 9.1 years
- Approximately 28% of rent from investment-grade tenants
- 1.0% compound annual rent growth rate
The portfolio is diversified across several retail categories. The largest industry exposures include:
- Dollar stores (9.9%)
- Quick-service restaurants (8.3%)
- Drug stores (7.9%)
- Grocery (7.7%)
- Health and fitness (7.5%)
Strategic Context
The transaction is part of Realty Income’s broader private capital strategy, which involves partnering with institutional investors to fund real estate assets.
Capital raised through this structure is treated as 100% permanent equity by rating agencies such as Moody’s Investors Service and S&P Global Ratings.
Company executives said the structure could serve as a template for future large-scale co-investment transactions in U.S. real estate.
Advisory Roles
Goldman Sachs acted as financial advisor to Realty Income. Wells Fargo served as financial advisor to Apollo.
Market Context
The transaction reflects the continued use of joint venture structures in commercial real estate to combine asset management platforms with institutional capital.
The portfolio is focused on retail categories that include dollar stores, quick-service restaurants, grocery stores, and drug stores, which are commonly associated with long-term net lease strategies.
The structure of the agreement combines operational control by Realty Income with capital participation from Apollo through a minority stake.
This joint venture highlights how large real estate companies are structuring partnerships to access capital while maintaining control of assets.
