This Iconic Real Estate Stock Just Threw Investors a Curve Ball

Realty Income (NYSE: O) completed its acquisition of VEREIT in late 2021, dramatically increasing its portfolio size to over 11,000 properties. That transaction provided it with a scale that none of its net lease peers can match. Now, in early 2022, it has announced a new acquisition that again changes the dynamics of the company's portfolio, only in a different way. Here's how investors should think about Realty Income's $1.7 billion Encore Boston Harbor deal.

Realty Income is a bellwether net lease real estate investment trust (REIT). Net lease REITs own single-tenant properties for which tenants are responsible for most of the operating costs of the assets they occupy. Although any single property is a high-risk proposition given that there's only one tenant, a large portfolio can offset any single-unit vacancies. With more than 11,000 properties in Realty Income's portfolio, most of which are retail focused (roughly 83% of rent), the risks here are fairly low.

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Source Fool.com