FIRST QUARTER 2018 INSTITUTIONAL INVESTOR PRESENTATION€¦ · Diversified “Net Lease” Portfolio 5,326 commercial real estate properties 81% of rent generated from retail properties

INSTITUTIONAL INVESTOR PRESENTATIONFIRST QUARTER 2018

Contents

Company Overview & 1Q18 Results 4

Investment Thesis 6

Portfolio Diversification 15

Defensive Retail Portfolio 20

Asset and Portfolio Management 25

Investment Strategy 28

Capital Structure and Scalability 35

Dependable Dividends 39

Summary 41

Appendix 42

All data as of March 31, 2018 unless otherwise specified2

Safe Harbor For Forward-Looking Statements

Statements in this investor presentation that are not strictly historical are "forward-looking"statements. Forward-looking statements involve known and unknown risks, which may cause thecompany‘s actual future results to differ materially from expected results. These risks include,among others, general economic conditions, local real estate conditions, tenant financial health,the availability of capital to finance planned growth, continued volatility and uncertainty in thecredit markets and broader financial markets, property acquisitions and the timing of theseacquisitions, charges for property impairments, and the outcome of any legal proceedings to whichthe company is a party, as described in the company's filings with the Securities and ExchangeCommission. Consequently, forward-looking statements should be regarded solely as reflections ofthe company's current operating plans and estimates. Actual operating results may differ materiallyfrom what is expressed or forecast in this investor presentation. The company undertakes noobligation to publicly release the results of any revisions to these forward-looking statements thatmay be made to reflect events or circumstances after the date these statements were made.

3

Company Overview

S&P 500 Real Estate Company

$21 billion enterprise value

Member of S&P High-Yield Dividend Aristocrats® index

One of 9 (1) U.S. REITs with at least one “A” rating (Moody’s: A3)

Diversified “Net Lease” Portfolio

5,326 commercial real estate properties

81% of rent generated from retail properties

254 commercial tenants, 47 industries, 49 states represented

Strong returns with low volatility

15.7% compound average annual total return since ’94

0.4 monthly beta since ‘94

Positive AFFO/sh growth in 21 of 22 years (2)

1 of only 2 REITs in both categories

4(1) Excludes companies without rated unsecured debt outstanding

(2) Excludes earnings from Crest Net Lease, a subsidiary of Realty Income, as earnings do not reflect recurring business operations

Our Approach and 1Q18 Results

(1) Acquire well-located commercial properties

(2) Remain disciplined in our acquisition underwriting

(3) Execute long-term net lease agreements

(4) Actively manage portfolio to maintain high occupancy

(5) Maintain a conservative balance sheet

$510 million in acquisitions

Acquired 5% of sourced volume

Ended quarter at 98.6% occupancy

Recaptured 100.4% of expiring rent

Remain only net lease REIT with an “A” credit rating

Grow per share earnings and dividends

AFFO/sh growth: +3.9% | Dividend/sh growth: +4.3%

5

Earnings Growth Outperformance

Consistency

Investment Thesis

(1) Consistent Earnings Growth

(2) Predictable Business Model

(3) Track Record of TSR Outperformance

Consistent Annual Earnings Growth Since NYSE ListingPositive earnings growth(1) in 21 out of 22 years as a public company

5.1%

6.8%6.4%

6.0%

1.6%

3.2%

5.4% 5.1% 4.9%

6.0%

9.4%

3.4%

4.4%

-2.1%

0.5%

8.1%

2.5%

17.0%

6.6% 6.6%

5.1%

6.3%

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

(1) AFFO / Excludes earnings from Crest Net Lease, a subsidiary of Realty Income, as earnings do not reflect recurring business operations(2) FFO / Includes all REITs currently included in MSCI REIT Index with earnings history since 2000 / Source: SNL

Historical Earnings Growth Rates (Median)

Realty Income (1): 5.2%

Current REITs (2): 3.7%

Compares favorably to REIT

median growth rates:

2008: -5.1%

2009: -6.9%

2010: -8.1%

7

1.5%

1.1%1.3%

1.8%

1.5% 1.4% 1.4%

1.7%

1.4% 1.5%

1.1%1.3% 1.3% 1.4%

1.1%0.9%

1.6%

0.4%

1.0% 1.0% 1.0%

Consistency: Steady Portfolio, Solid FundamentalsFocus on quality underwriting and real estate supports predictable cash flow generation

Consistent Occupancy Levels, Never Below 96%

Steady Same-Store Rent Growth

˃ Careful underwriting at acquisition

˃ Solid retail store performance

˃ Strong underlying real estate quality

˃ Healthy tenant industries

˃ Prudent disposition activity

˃ Proactive management of rollovers

Tenets of Consistency:

Annual same-store rent growth run rate of ~1.0%

Long lease terms limit annual volatility

8

Investment Spreads Maintain Even with Rising Interest RatesRising interest rates do not pose a significant earnings headwind to the net lease business model

2%

4%

6%

8%

10%

12%

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Acquisition Cap Rate

Avg US 10Y Yield

R2 = 0.89

Acquisition cap rates highly correlated to changing interest rates…

…which contributes to strong earnings growth during periods of rising rates

5.1%6.8% 6.4% 6.0%

1.6%3.2%

5.4% 5.1% 4.9%6.0%

9.4%

3.4%4.4%

-2.1%

0.5%

8.1%

2.5%

17.0%

6.6% 6.6%5.1%

6.3%

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Annual AFFO/sh

Growth Rate(1):

(1) Excludes earnings from Crest Net Lease, a subsidiary of Realty Income, as earnings do not reflect recurring business operations9

Snapshot vs. S&P 500 REIT Peers

Tenets of Consistency:

Superior stability: Favorable occupancy, dividend growth, credit rating and total return metrics

98.2%96.6%

93.3%

90.4%

Historical Median Lowest Year-End

Portfolio Occupancy

O S&P 500 REIT Median

0%

4.7%

9%

3.3%

% of Years w/ Negative

Growth

Dividend CAGR

Dividend Growth

O S&P 500 REIT Median

Moody’s Credit Rating

Baa3

Baa2

Baa1

A3

A2

● ● S&P 500 REIT Peer

0

1

2

3

4

5

6

7

# of Years with TSR < -10% (1)

S&P 500 REIT Peer●●

Sources: SNL, FactSet | Excludes specialty REITs (i.e. infrastructure, timber, information services)(1) Excludes REITs with fewer years of history than Realty Income (23)

10

Track Record of Favorable Risk-Adjusted Returns to Shareholders Since 1994 NYSE listing, Realty Income shares have outperformed benchmark indices while exhibiting lower volatility

15.7%

10.6% 10.3%9.9% 9.8%

O DJIA Equity REIT Index Nasdaq S&P 500

16.0% 16.3%

18.3%18.9%

29.1%

O DJIA S&P 500 Equity REIT

Index

Nasdaq

Standard Deviation of

Annual Returns Since 1994

Compound Average Annual Total

Shareholder Return Since 1994

Standard deviation of total returns measures deviation from average annual total returns since 1994 11

Attractive Risk/Reward vs. S&P 500 CompaniesHigher returns and lower volatility than majority of S&P 500 companies since 1994 NYSE listing

Realty Income return per

unit of market risk in the

98th percentile of all S&P

500 companies(1):

Beta: 0.39

Return: 16.4%

(1) n=341 / Excludes companies without trading histories dating to 1994 Beta measured using monthly frequency

Source: FactSet

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

0.00.30.50.81.01.31.51.82.02.3

Tota

l R

etu

rn C

AG

R

Beta

Realty Income return per unit of market risk is in the 97th

percentile of all S&P 500 companies (1)::

Return: 15.7%Beta: 0.38

12

O

JNJ

WMT

XOM

AAPL

INTC

WFC

REITs

MSFT

T

S&P 500

JPM

BAC

0%

5%

10%

15%

20%

25%

0.00.20.40.60.81.01.21.41.61.82.0

Tota

l R

etu

rn C

AG

R

Beta

Attractive Risk/Reward vs. Blue Chip S&P 500 Equities

Realty Income: Greater

return per unit of

market risk than each

of top 10 largest S&P

constituents(1) since

1994 NYSE listing

(1)Excludes companies without trading histories since 10/18/1994 / Constituents plotted include S&P 500 and FTSE NAREIT US Equity REIT Index

Beta measured using monthly frequency

Source: FactSet

Historically, more return per unit of risk vs. the 10 largest S&P 500 constituents

13

Attractive Risk/Reward vs. Blue Chip REITsHistorically, more return per unit of risk vs. S&P 500 REITs

OPSA

ESS

HCN

FRT

SPGAVB

VTR

EQR

HCP

REGVNO

AIV

KIM

MACGGP

WYHST

UDR

MAA

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

0.00.20.40.60.81.01.21.41.61.82.0

Tota

l R

etu

rn C

AG

R

Beta

(1) Excludes companies without trading histories since 10/18/1994

Beta measured using monthly frequency

Source: FactSet

Realty Income: Greater

return per unit of

market risk than S&P

500 REITs(1) since

1994 NYSE listing

14

PORTFOLIO DIVERSIFICATION

Portfolio Diversification: TenantDiverse tenant roster, investment grade concentration reduces overall portfolio risk

1.2%1.3%1.4%1.5%1.7%1.8%1.9%2.0%2.0%2.0%2.2%2.4%

3.0%3.5%3.5%3.6%3.8%3.8%

5.0%

6.7%

(1) Investment grade tenants are defined as tenants with a credit rating of Baa3/BBB- or higher from one of the

three major rating agencies (Moody’s/S&P/Fitch). 51% of our annualized rental revenue is generated from

properties leased to investment grade tenants, including approximately 9% from properties leased to

subsidiaries of investment grade companies.

54% of annualized rental revenue 11 different

industries 11 investment grade rated tenants

Investment

grade rated (1)

Top 20 tenants represent:

16

Service-Oriented

Non-Discretionary

N/A (Non-Retail Exposure

Portfolio Diversification: IndustryExposure to 47 industries enhances predictability of cash flow (See Appendix for Industry Theses)

Exposure to defensive industries:94% of total portfolio rent is protected against retail e-commerce threats and economic downturns

Non-Discretionary

Service-Oriented

Non-Discretionary, Low Price Point

Low Price Point

❶ Drug Stores: 10.5%Non-discretionary

❷ Convenience Stores: 9.1%Service-oriented

❹ Dollar Stores: 7.5%Non-discretionary, Low price point

❸ Health & Fitness: 7.6%Non-discretionary, Service-oriented

❺Theaters: 5.8%Low price point, Service-oriented

❻ Quick-Service Restaurants: 5.3%Low price point, Service-oriented

❼ Transportation Services: 5.2%Non-retail exposure

17

75% of Total Rent:

Retail with at least one of the following components:

Non-Discretionary(Counter-cyclical)

Low Price-Point(Low cash flow volatility)

Service-Oriented(E-commerce resilient)

19%Non-retail

(E-commerce resilient)6% Other

Portfolio Diversification: GeographyBalanced presence in 49 states and Puerto Rico

<1

<1

<1

<1

<1

<1

<1

2.2

<1

1.8

<1

<1

<1

1.6

1.5

3.3

1.4

2.7

<1

1.6

1.5 1.9 4.3

2.6

3.0

3.3

2.32.2

2.8

1.4

2.7

<12.7

<1

Puerto Rico <1

<1<1<1

1.2

<1

<1

1.9

<1

1.6

9.0

9.4

6.3

5.2

4.8

5.7

Texas 9.4%

California 9.0%

Illinois 6.3%

Florida 5.7%

Ohio 5.2%

New York 4.8%

Top 6 States

% of Rental Revenue

Figures represents percentage of rental revenue

18

Portfolio Diversification: Property TypeCore exposure in retail and industrial single-tenant freestanding net lease properties

RETAIL INDUSTRIAL AGRICULTURE

80.9% 12.6% 4.4% 2.1%

Number of Properties

Percentage of Rental Revenue

5,153 116 42 15

Average Leasable Square Feet

11,844 224,340 73,921 12,300

Percentage of Rental Revenue from Investment Grade Tenants

45.5% 82.2% 87.2% -

OFFICE

19

DEFENSIVE RETAIL PORTFOLIO

Top 20 Tenants Highly Insulated from Changing Consumer Behavior

19 of top 20 tenants fall in at least one category (Service, Non-Discretionary, Low Price Point Retail or Non-Retail)

Service / Experiential Non-Discretionary

Low Price Point

Non-Retail

Walmart represented by Neighborhood Markets and Sam’s Club 21

Top Tenant Exposure: 2009 vs. TodayTop 15 tenants represent higher quality credit, less cyclical industries and greater diversification vs. 2009

Tenant Industry % of Rent

Hometown Buffet Casual Dining 6.0%

Kerasotes Showplace Theatres Theatres 5.3%

L.A. Fitness Health & Fitness 5.3%

The Pantry Convenience Stores 4.3%

Friendly’s Casual Dining 4.1%

Rite Aid Drug Stores 3.4%

La Petite Academy Child Care 3.3%

TBC Corporation Auto Tire Services 3.2%

Boston Market QSR 3.1%

Couche-Tard / Circle K Convenience Stores 3.0%

NPC / Pizza Hut QSR 2.6%

FreedomRoads / Camping World Sporting Goods 2.6%

KinderCare Child Care 2.5%

Regal Cinemas Theatres 2.3%

Sports Authority Sporting Goods 2.0%

Total % of Rent - Top 15 Tenants 53.0%

Investment Grade % - Top 15 Tenants 3.2%

#1 Industry – Restaurants 21.3%

#2 Industry – Convenience Stores 17.0%

Tenant Industry % of Rent

Walgreens Drug Stores 6.7%

FedEx (Non-Retail) Transportation 5.0%

Dollar General Dollar Stores 3.8%

LA Fitness Health & Fitness 3.8%

7-Eleven Convenience Stores 3.6%

Dollar Tree / Family Dollar Dollar Stores 3.5%

AMC Theaters Theaters 3.5%

Walmart / Sam’s Club Grocery / Wholesale 3.0%

Couche-Tard / Circle K Convenience Stores 2.4%

BJ’s Wholesale Clubs Wholesale Clubs 2.2%

Treasury Wine Estates (Non-Retail) Beverages 2.0%

CVS Pharmacy Pharmacy 2.0%

Life Time Fitness Health & Fitness 2.0%

Regal Cinemas Theaters 1.9%

Super America (Andeavor) Convenience Stores 1.8%

Total % of Rent - Top 15 Tenants 47.2%

Investment Grade % - Top 15 Tenants 31.8%

#1 Industry – Drug Stores 10.5%

#2 Industry – Convenience Stores 9.1%

Top 15 Tenants as of YE 2009

Bold tenants represent investment-grade rated credit

Top 15 Tenants as of 1Q 2018

22

Differentiated Business Model from “Traditional” Retail REITsLease structure and growth drivers support predictable revenue stream relative to other forms of retail real estate

Initial Length of Lease 15+ Years < 10 Years

Remaining Avg Term ~ 10 Years ~ 5-7 Years

Responsibility for Property Expenses Tenant Landlord

Gross Margin > 98% ~ 75%

Volatility of Rental Revenue Low Modest / High

Maintenance Capital Expenditures Low Modest / High

Reliance on Anchor Tenant(s) None High

Average Retail Property Size / Fungibility 12k sf / High 150k–850k sf / Low

Target Markets Many Few

External Acquisition Opportunities High Low

Institutional Buyer Competition Modest High

Ample external growth opportunities

Unique “net lease” structure drives lower cash flow volatility Shopping Centers

and Malls

Shopping Centers

and Malls

23

Realty Income Not Materially Impacted by Recent Retailer Bankruptcies

Retail Industry Retailer BankruptcyRealty Income

Exposure

Apparel (11 companies)True Religion| Wet Seal| BCBG Max Azria| Limited Stores| Rue21|

Gymboree| Vanity Shop| Papaya Clothing| Alfredo Angelo| Styles for

Less | A’gaci

0%

Sporting Goods (4)Eastern Outfitters / Bob’s Stores| Gander Mountain| MC Sports |

Remington Outdoor< 1%

Specialty (3) Perfumania| Vitamin World | Kiko 0%

Jewelry / Accessories (2) Charming Charlie| Claire’s 0%

Consumer Electronics (2) RadioShack | hhgregg 0%

Shoe Stores (4) Aerosoles| The Walking Company | Nine West | Payless ShoeSource < 1%

Grocery (3) Tops Market | Marsh Supermarkets | Southeastern Grocers < 1%

General Merchandise (2) Gordmans | Bon-Ton 0%

Toy Stores (1) Toys ‘R’ Us 0%

Casual Dining (2) Macaroni Grill | Bertucci’s 0%

Total Realty Income Exposure (% of Rent) : < 1%

28 of 34 retailer bankruptcies since 2017 associated with companies lacking a non-discretionary, low price point, and/ or service-oriented component to their business

Red retailers represent businesses lacking either a non-discretionary, low price point and/or service-oriented component24

ASSET AND PORTFOLIO MANAGEMENT

Active Real Estate Management: Re-leasing ExperienceSince 1996, Realty Income has achieved 99.6% recapture of prior rent on re-leasing activity

Recapture vs. Prior Rent: (All Re-Leasing Activity)

101.9%

95.6%

95.9%

2013 - Present

2006 - 2012

1996 - 2005

2,687Lease Expirations since 1996

2,342Re-Leased at 99.6% rent recapture (1)

345Sold and proceeds reinvested into higher

quality assets

(1) Reflects cash rent recapture inclusive of tenant improvement spend (immaterial) 26

Active Management: Leasing and DispositionsProven track record of value creation, cash flow preservation and risk mitigation

Portfolio Management

Largest department in the company

Distinct management verticals

Retail

Non-Retail

Leasing & dispositions

Asset Management

Maximizing value of real estate

Strategic and opportunistic dispositions

Value-creating development

Risk mitigation

Healthy Leasing Results

Favorable Returns on Dispositions

6.9%7.6% 7.3% 7.1%

6.6%

11.6% 12.1%

8.5%9.9%

7.3%

2014 2015 2016 2017 1Q18

Cap Rate on Occupied Dispositions

Unlevered IRR on All Dispositions

27

16.4%

83.6%

% Re-leased to Existing Tenants

% Re-leased to New Tenants

Blended rent recapture

rate of 100.4% on

expiring leases

1Q18

Renewal / New Lease Split

INVESTMENT STRATEGY

Investment Strategy: Key ConsiderationsCost of capital advantage, size, track record represent competitive advantage

LOWEST COST OF CAPITAL

Supports investment selectivity

Drives faster earnings growth (wider margins)

Critical in industry reliant on external growth

SIZE AND TRACK RECORD

Ability to buy “wholesale” (at a discount)

without creating tenant concentration issues

Access to liquidity ($2 billion revolver)

Relationships developed since 1969

Competitive Advantages vs. Net Lease Peers

29

Investment Strategy: Aim to Exceed Long-Term WACCCost of capital viewpoint balances near-term earnings per share growth with long-term value accretion

“Nominal” 1st-Year Weighted Average Cost of CapitalLong-Term Weighted Average Cost of Capital

• Drives investment decision-making at the property level

• Considers required “growth” component of equity returns

• Long-term unlevered IRR must exceed long-term WACC

• Focus on higher long-term IRR discourages risk-taking

Key Assumptions & Calculation – Long-Term Cost of Equity

Historical Beta (vs. S&P 500) 0.38

Assumed long-term 10-year U.S. yield 4.0%

Equity market risk premium 4.8%

Long-Term Cost of Equity (CAPM methodology) 5.8%

Dividend yield 5.0%

Compound average annual dividend growth since 1994 listing 4.7%

Long-Term Cost of Equity (Yield + Growth methodology) 9.7%

Long-Term Cost of Equity (Average of two methodologies) 7.8%

Key Assumptions & Calculation – Long-Term WACC

65% Weight: Long-Term cost of equity 7.8%

35% Weight: Cost of debt (10-year, fixed-rate unsecured) 4.2%

Long-Term WACC 6.5%

• Used to measure initial (year one) earnings accretion

• Higher stock price (lower cost) supports faster growth

• Lower WACC allows greater investment options

• Unwilling to sacrifice quality to generate wider spreads

Key Assumptions & Calculation – Nominal 1st-Year WACC

58% Equity: AFFO Yield (Midpoint of 2018 guidance) 6.2%

9% Free Cash Flow(1): Free cash flow reinvested 0%

33% Debt: 10-year, fixed-rated unsecured 4.2%

Nominal 1st-Year WACC 5.0%

Cost of capital information uses illustrative assumptions only (as of 3/31/2018)(1) 9% FCF weight assumes high end of current acquisition guidance ($1.0 - $1.5 billion)

Low nominal WACC supports ability to spread invest with high-quality acquisitions

Long-term WACC considers growth requirements of equity and supports focus on residual value of acquisitions

30

1.5%

1.9%

2.4%

2.8%

3.2%

3.7%

4.1%

4.5%

4.9%

5.4%

5.8%

6.2%

6.7%

7.1%

0%

1%

2%

3%

4%

5%

6%

7%

8%0 b

ps

25 b

ps

50 b

ps

75 b

ps

100 b

ps

125 b

ps

150 b

ps

175 b

ps

200 b

ps

225 b

ps

250 b

ps

275 b

ps

300 b

ps

325 b

ps

An

nu

alize

d A

FFO

/sh

Gro

wth

Investment Spread vs. Nominal 1st-Year WACC

Lower cost of capital

Wider spreads

Higher growth

rate

Higher stock price

Investment Strategy: Benefits of Low Cost of CapitalLow cost of capital is the most important competitive advantage in the net lease industry

Assumptions and Footnotes:

1) Assumes $1.5 billion in acquisition volume

2) Growth based on 2017 AFFO ($3.06/sh)

3) Growth rates include organic same-store rent growth of ~1.0% (unlevered)

Cost of capital information uses illustrative assumptions only

Reduces need to pursue lower-

quality, higher-yielding investments

to generate growth

31

5.0%

5.5%

6.0%

6.5%

7.0%

7.5%

8.0%

4.0

0%

4.2

5%

4.5

0%

4.7

5%

5.0

0%

5.2

5%

5.5

0%

5.7

5%

6.0

0%

6.2

5%

Acq

uis

itio

n C

ap

Ra

te t

o A

ch

ieve

15

0 b

ps S

pre

ad

s

Nominal 1st-Year WACC

Lower cost of capital allows Realty

Income to invest in higher quality

opportunities to derive the same spread

“High Quality” Investment Characteristics (lower cap rates):

• At or below-market rents

• Strong credit / proven sponsors & tenants

• Above-average rent coverage

• Flexible alternative use

• Long lease terms

• Stable industries

Investment Strategy: Utilizing Low Cost of Capital AdvantageLow cost of capital allows Realty Income to acquire the highest quality assets in the net lease industry

Cost of capital information uses illustrative assumptions only 32

“High Yield” Investment Characteristics (higher cap rates):

• Above-market rents / financially-engineered cap rates

• Poor credit or limited credit availability and track record

• Thin industry-specific rent coverage

• Poor real estate (low residual value)

• Short lease terms

• Volatile industries

Higher cost of capital forces

companies to invest in riskier

investment opportunities to

derive 150 bps of spread

Investment Strategy: The Importance of Market RentsRealty Income avoids lease structures with above-market rents, which can often inflate initial cap rates

Higher Risk & Cap Rate Lower Risk & Cap Rate

Buyer and Seller Motivations:1) Maximize proceeds for seller

2) Maximize cap rate for buyer

1) Maximize EBITDAR rent coverage

2) Match purchase price w/ replacement cost

Implied Sale Price (000s) $42,000 $35,000

Implied Cap Rate 7.5% 6.5%

Implied Rent (000s) $3,150 $2,267

Implied Rent (psf) $18.00 $12.95

Premium/(Discount) to Market Rent 20% (14%)

Implied EBITDAR rent coverage 2.7x 3.75x

Implied premium to replacement cost 20% 0%

Results:

• Above-market rents

• Lower rent coverage

• Lower residual value

• Higher default risk

• Lower long-term IRR

• Below-market rents

• Higher rent coverage

• Higher residual value

• Lower default risk

• Higher long-term IRR

Illustrative Sale-Leaseback ExampleAssumptions

Annual EBITDAR (000s) $8,500 Replacement cost (psf) $200

Total square footage (000s) 175 Market rent (psf) $15

Assuming identical real estate portfolio, consider two different lease structure scenarios….

Lower cap rates often

imply lower purchase

price and lower risk

33

$11 billionin property-level acquisition volume

$4.3 billionin non-investment grade

retail acquisitions

83%of volume associated with

retail properties

59%of volume leased to

Investment grade tenants

Investment Strategy: Disciplined ExecutionConsistent, selective underwriting philosophy on strong sourced volume

2010 2011 20122013

(Ex-ARCT)2014 2015 2016 2017 YTD 2018

Investment Volume $714 mil $1.02 bil $1.16 bil $1.51 bil $1.40 bil $1.26 bil $1.86 bil $1.52 bil $510 mil

# of Properties 186 164 423 459 507 286 505 303 174

Initial Avg. Cap Rate 7.9% 7.8% 7.2% 7.1% 7.1% 6.6% 6.3% 6.4% 6.2%

Initial Avg. Lease Term

(yrs)15.7 13.4 14.6 14.0 12.8 16.5 14.7 14.4 14

% Investment Grade 46% 40% 64% 65% 66% 46% 64% 48% 85

% Retail 57% 60% 78% 84% 86% 87% 86% 95% 100%

Sourced Volume $6 bil $13 bil $17 bil $39 bil $24 bil $32 bil $28 bil $30 bil $9.5 bil

Selectivity 12% 8% 7% 4% 6% 4% 7% 5% 5%

Relationship Driven 76% 96% 78% 66% 86% 94% 81% 88% 92%

Key Metrics Since 2010 (Excluding $3.2 billion ARCT transaction):

34Low selectivity metrics reflect robust opportunity set, disciplined investment

parameters, and cost of capital advantage

CAPITAL STRUCTURE AND SCALABILITY

Conservative Capital StructureModest leverage, low cost of capital, ample liquidity provides financial flexibility

Common Stock: 69%

Debt: 31%

Common Stock: $14.7 billion – 69%

• Shares/Units outstanding – 285 million

Debt: $6.6 billion – 31%

• Unsecured Notes/Bonds - $5.4 billion(1)

• Unsecured Term Loans - $320 million

• Mortgages - $308 million

• Revolving Credit Facility - $588 million(1)

Total Capitalization: $21.4 billion

Unsecured Debt Ratings: Moody’s A3 | S&P BBB+ (Positive) | Fitch BBB+

36(1) Reflects pro-forma effect of $500 million 7-year bond offering closed on April 3, 2018 (net proceeds of ~$494 million used to pay down revolver)

Numbers may not foot due to rounding

Well-Laddered Debt Maturity ScheduleLimited re-financing and variable interest rate risk throughout debt maturity schedule

Key Metrics (1)

• 91% fixed rate debt

• Weighted average rate

of 3.9% on debt

• Staggered, 9.5-year weighted

average term for notes/bonds

• Ample liquidity with $1.4 bil

available on revolver (L+85bps)

• Free cash flow of ~$135mm/yr3.1%

2.8%

3.2% 5.7%

3.4%

4.6%

3.9%

3.9%

4.1%3.0%

3.7%

5.0%

$0

$200

$400

$600

$800

$1,000

$1,200

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029+

Unsecured Notes Mortgages Revolver Term Loan

Weighted average interest rate(1)

De

bt

Ma

turi

ties

($m

m)

(1) Weighted average interest rates reflect variable-to-

fixed interest rate swaps on term loans and revolver

interest rate as of 3/31/2018

37(1) Reflects pro-forma effect of $500 million 7-year bond offering closed on April 3, 2018 (net proceeds of ~$494 million used to pay down revolver)

Scalability as a Competitive AdvantageLeaders in the net lease industry in efficiency and ability to buy in bulk

5.8%

5.1%

G&A as % of Rental Revenue(1)

(1) G&A includes acquisition transaction costs | percentage of rental revenue calculation excludes tenant reimbursements

64 bps

42 bps

G&A as % of Gross RE Book Value (bps)

92.4% 93.2%

Adjusted EBITDA Margin

Larger Size Drives Superior Overhead Efficiency

38

Larger Size Provides Growth Optionality

$100 $200 $300 $400 $500 $1,000

$200 3% 6% 9% 12% 14% 25%

$400 2% 3% 5% 6% 8% 14%

$600 1% 2% 3% 4% 5% 10%

$800 1% 2% 2% 3% 4% 8%

$1,000 1% 1% 2% 3% 3% 6%

$1,200 1% 1% 2% 2% 3% 5%

Transaction Size & Impact(2) to Rent Concentration

Current

Rent

Size allows Realty Income to pursue large sale-

leaseback transactions without compromising prudent

tenant and industry diversification metrics

(2) Assumes 6.5% cap rate

in millions

Current Net Lease Peer Median: 9.1%

Current Net Lease Peer Median: 89.2%

Current Net Lease Peer Median: 81 bps

DEPENDABLE DIVIDENDS

Dependable Dividends That Grow Over TimeSteady dividend track record supported by inherently stable business model, disciplined execution

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

YTD

$0.90 $0.91 $0.931 $0.95 $0.98 $1.04

$1.09 $1.12 $1.15 $1.18

$1.24

$1.35

$1.44 $1.56

$1.66 $1.71 $1.72

$1.74 $1.77

$2.15 $2.19

$2.27

$2.39

$2.53 $2.63

Strong Dividend Track Record

82 consecutive quarterly increases

96 total increases since 1994 NYSE listing

83% AFFO payout (based on midpoint of 2018 AFFO guidance)

4.7% compound average annualized growth rate since NYSE listing

One of only five REITs included in S&P High Yield Dividend Aristocrats® index

Data is as of April 2018 dividend declaration (annualized) 40

Summary

˃ Long term-focused business strategy

˃ Diversified and actively managed portfolio

˃ Proven and disciplined relationship-driven acquisition strategy

˃ Conservative capital structure able to withstand economic volatility

˃ Precedent of outperforming S&P 500 and REITs since 1994 listing

˃ Attractive risk/reward vs. other REITs and blue chip equities

˃ Dependable monthly dividends with long track record of growth

41

APPENDIX

42

Drug Stores (10.5% of Rent)Industry tailwinds, high barriers to entry, key real estate presence

Industry Considerations

(1) Consumer preference skews towards physical drug stores:

Prescription volumes have shifted away from mail order

(2) Positive brick-and-mortar fundamentals: 20 consecutive

quarters of positive pharmacy SS sales growth for Walgreens (2)

(3) High barriers to entry: Difficult for new entrants to achieve

necessary scale and PBM partnerships to compete on price

(4) Bundled service partnerships and vertical integration

among incumbents insulates industry from outside threats

(5) Real estate presence matters: Estimated 80% of U.S.

population lives within 5-mile radius of Walgreens or CVS (2)

28% 28%20%

5%

(21%)Chain

Drugstores

Mass

Merchants

Supermarkets Independent

Pharmacies

Mail

Pharmacies

Δ in 30-day Prescriptions by Pharmacy Format

(2011 – 2016) (1)

(1) Source: Pembroke Consulting(2) Source: Company Documents

2.0%

6.4%7.2%

5.8%6.3%

7.8%8.1%

9.7%9.1%

9.3%9.3%

3.7%

6.0%5.0%

2.0%

4.2%

5.8% 5.6%

7.4%

5.1%3

Q1

3

4Q

13

1Q

14

2Q

14

3Q

14

4Q

14

1Q

15

2Q

15

3Q

15

4Q

15

1Q

16

2Q

16

3Q

16

4Q

16

1Q

17

2Q

17

3Q

17

4Q

17

1Q

18

2Q

18

Walgreens: 20 Consecutive Quarters of Positive

Same-Store Pharmacy Sales Growth (2)

43

Convenience Stores (9.1% of Rent)Quality real estate locations with strong store-level performance

Industry Considerations

(1) Strong performance independent of gas sales: ~70% of

inside sales are generated by customers not buying gas (1)

(2) Larger-format stores provide stability: Larger format stores

(average size ~3,200 sf) allow for increased food options

which carry higher margins

(3) Electric vehicles’ market penetration presents minimal risk

• EVs = Only 0.2% of all vehicles in US and 1.1% of new

sales(2)

• Cost, limited infrastructure/range present headwinds

$31.1 $45.8

$63.3 $78.1 $15.7

$23.5

$26.0

$31.9

2001 2006 2011 2016

Convenience Store Gross Profit (1)

(in billions)Fuel (4.8% CAGR since 2001)

Inside Sales (6.3% CAGR since 2001)

70% of gross profit generated from inside sales which is generally not impacted by gasoline demand

(1)Source: National Association of Convenience Stores(2) Nanalyze 44

Health & Fitness (7.6% of Rent)E-commerce resilient supported by favorable demographic trends

Industry Considerations

(1) Favorable consumer trends and demographic tailwinds:

Growing market as consumers increasingly value health / Baby

Boomer age group has the highest attendance frequency

(2) E-Commerce resilient: Service-oriented business model

makes the core real estate essential to operations

(3) Attractive margin of safety, top operators: Average CFC of

portfolio(1) allows for 40% sales drop to breakeven. Top

exposure is with #1 operator (L.A. Fitness) and premium

provider that performed well during recession (Life Time

Fitness)

Original

EconomicsΔ

New

Economics

Revenues 100 (50%) 50

Staffing Costs (20) (20)

Repairs and Maintenance (5) (5)

EBITDAR 75 25

Rent 25 25

EBITDAR Coverage 3.0x 1.0x

Illustrative Gym Rent Coverage Sensitivity Life Time Fitness: Same-Center Revenue Growth Thru Downturn(2)

7.7% 7.3%6.1%

2.8%

(3.1%)

5.0% 5.1%4.3% 4.0%

2005 2006 2007 2008 2009 2010 2011 2012 2013

For stores open 13 months or longer

Modest revenue volatility during

economic downturns provides

ample margin of safety to landlord

45(1) Average CFC of portfolio based on locations who report sales(2) Life Time Fitness 10-K

Dollar Stores (7.5% of Rent)Counter-cyclical protection and E-commerce resilient

Industry Considerations

(1) Consistent long-term performance: 28 and 12 consecutive

years of positive same-store sales growth for Dollar General and

Dollar Tree / Family Dollar, respectively

(2) E-commerce resilient:

• 75% of US population lives within 5 miles of a Dollar General

• Average basket size is $11 - $12

• Dollar store consumers primarily pay with cash

(3) Well-performing locations: Average CFC of dollar store

portfolio is above total portfolio average

0.9%

7.3%

5.7%

4.0%

3.2%

2.0%

3.3%

2.1%

9.0%

9.5%

4.9%

6.0%

4.7%

3.3%2.8%

2.8%

0.9%

2.7%

Dollar General: 28 Consecutive Years of Positive

Same-Store Sales Growth

5.7%

0.1%

1.0%

2.9%

0.5%

-0.8%

4.6%

2.7%

4.1%

7.2%

6.3%6.0%

3.4%

2.4%

4.3%

2.1%1.8%1.9%

Dollar Tree / Family Dollar: 12 Consecutive Years

of Positive Same-Store Sales Growth

Recession

Counter-cyclical sales growth trends supports portfolio during recessionary periods

Source: Company Filings 46

Theaters (5.8% of Rent)Stability throughout economic cycles / Experiential component supports E-commerce resiliency

Industry Considerations

(1) Historical U.S. box office receipts illustrate stability: 3.7%

CAGR since 1981 / no year worse than -7.0%

(2) High variable cost structure limits rent coverage volatility:

Theaters in our portfolio require ~40% drop in sales to reach

breakeven on rent coverage

(3) Premium video on demand (PVOD) threat is minimal:

• Studios hesitant to cannibalize theatrical window

• Concentrated industry preserves negotiating leverage

• 90% of box office revenue made within 45 days of release

• PVOD offering lacks experiential component of theaters

7.9%

16.4%

9.1%

7.0%

-7.0%

0.8%

12.6%

4.8%

12.9%

-0.2%

-4.4%

1.4%

5.8%4.7%

1.8%

7.6%7.7%9.2%

7.2%

2.9%

9.8%8.8%

0.9%1.5%

-5.8%

4.2%4.9%

-0.3%

10.0%

-0.3%

-3.7%

6.5%

0.8%

-5.2%

7.4%

2.2%

-2.7%

Annual Growth in U.S. Box Office Receipts: Stability through economic cycles

Growth During Recession

Record U.S.

box office

Source: Box Office Mojo47

E.T.

BatmanIndiana Jones

Titanic

Harry Potter

Lord of the Rings

Spider-Man

Star Wars Episode II

Avatar

Transformers Star Wars

Jurassic World

Industry is structurally healthy / Strong content drives annual growth

Quick-Service Restaurants (5.3% of Rent)High-quality real estate, reliable sales growth

Industry Considerations

(1) Consistent demand: Approximately 75 million Americans

eat fast food every day(1) / positive trend of same-store sales

growth supported by value-seeking consumers

(2) Fungibility of real estate: Positive re-leasing results on QSR

locations due to convenience of real estate location and

modest space footprint

(3) Less volatility than higher price point concepts: Weakness

during economic downturns limited due to “trade down” effect

from casual dining consumers

0.2% 0.0%

-1.4%-1.8%

-2.3%-2.8%-3.0%

-3.9%

-1.2%

0.0%

1.1%

2.7% 2.4% 2.6% 2.7%

4.3%5.1%

4.7%4.2%

3.6%

2.5%3.1%

2.3%1.6% 1.8%

2.9%

3.9%

5.2%

6.3%

4.3%3.9%

3.1%2.3%

1.6% 1.7%1.2%

-0.3%0.5% 0.4%

-0.4%-0.5%

-3.8%

-5.8%-5.5%-6.1%

-6.6%

-4.1%

-0.8%-0.1%

2.2% 2.2%2.7% 3.0%

2.6%3.2% 3.3%

1.5%2.1%

1.0%

-0.1%

1.6%

-0.7%-0.1%0.2%

0.7%1.3%

2.0% 2.3%

1.2%

0.1%-0.5%

-0.1%

-1.7%-1.5%-2.0%

-1.2%-0.6%

-2.4%QSR SSS Growth

Casual Dining SSS Growth

Same-Store Sales Growth Trends: QSR Industry Exhibits Lower Downside Volatility, Stronger Growth vs. Casual Dining(2)

(1) Source: Statista(2) Represents average same-store sales growth for constituents in each group ; Source: Restaurant Research LLC, FactSet

48

Industrial Transportation Services (5.2% of Rent)Offers property diversification and exposure to E-commerce tailwinds

Industry Considerations

(1) Realty Income primarily exposed to blue chip operator:

FedEx (5.0% of rent) controls 23% share of E-commerce

parcel delivery market(1) / 33% share of U.S. Ground

market(2)

(2) FedEx E-commerce clientele well-diversified: Amazon

accounts for only 3% of FedEx revenues(2)

(3) High barriers to entry: Extensive shipping networks of

existing operators very challenging and costly to replicate

0%

5%

10%

15%

20%

25%

30%

35%

40%

1Q

05

2Q

05

3Q

05

4Q

05

1Q

06

2Q

06

3Q

06

4Q

06

1Q

07

2Q

07

3Q

07

4Q

07

1Q

08

2Q

08

3Q

08

4Q

08

1Q

09

2Q

09

3Q

09

4Q

09

1Q

10

2Q

10

3Q

10

4Q

10

1Q

11

2Q

11

3Q

11

4Q

11

1Q

12

2Q

12

3Q

12

4Q

12

1Q

13

2Q

13

3Q

13

4Q

13

1Q

14

2Q

14

3Q

14

4Q

14

1Q

15

2Q

15

3Q

15

4Q

15

1Q

16

2Q

16

3Q

16

4Q

16

1Q

17

2Q

17

3Q

17

4Q

17

1Q

18

2Q

18

3Q

18

(1) Source: A.T. Kearney Report(2) Source: FedEx Company Reports(3) Periods reflect fiscal calendar (May YE) ; Source: FedEx Statistical Book

FedEx Ground: Average Daily Y/Y Package Growth Rate Has Been Positive Every Quarter Since FY 2005(3)

Y/Y package growth has averaged

10% since FedEx began reporting

statistic in FY 2005

49