1 Thing Everyone Gets Wrong About Realty Income
Realty Income (NYSE: O) is a bellwether net lease real estate investment trust (REIT). Basically, with more than 10,000 properties, it is the 800-pound gorilla in the sector. With an impressive history behind it, investors tend to afford it a premium price. And this is where my mistaken thinking led me to sell it when I shouldn't have. This is what I, and many others, got wrong about Realty Income.
Net lease REITs own single-tenant properties for which the lessees are responsible for most of the operating costs of the properties they occupy. Any single property has a material amount of risk, given that there's just one tenant. However, over a large portfolio that risk is diminished and, in fact, the overall risk is quite low. As noted, Realty Income today owns over 10,000 properties. It is huge.
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Source Fool.com