ri8k_q209.htm

Exhibit 99.1

CONTACT:

Tere Miller

Vice President, Corporate Communications

760-741-2111 ext. 1177

REALTY INCOME ANNOUNCES SECOND QUARTER

AND MID-YEAR OPERATING RESULTS

ESCONDIDO, CALIFORNIA, July 29, 2009...Realty Income Corporation (Realty Income), The Monthly Dividend Company® (NYSE: O) today announced operating results for the second quarter ended June 30, 2009. All per share amounts presented in this press release are on a diluted per common share basis, unless stated otherwise.

COMPANY HIGHLIGHTS:

(For the quarter ended June 30, 2009,

as compared to the same quarterly period in 2008)

● Revenue decreased slightly to $81.6 million from $82.1 million

● Funds from Operations (FFO) available to common stockholders increased 0.9% to $47.2 million

● FFO per share decreased 2.1% to $0.46 from $0.47

● FFO per share (before Crest’s contribution) was unchanged at $0.45

● Net income available to common stockholders per share was $0.26

● Portfolio occupancy increased to 96.6%

● Same store rents increased 0.5% to $75.3 million

● Dividends paid per common share increased 3.4%

● Increased the monthly dividend for the 47th consecutive quarter to an annualized amount of $1.7085 per share

Financial Results

Revenue

Realty Income’s revenue, for the quarter ended June 30, 2009, decreased slightly to $81.6 million as compared to $82.1 million for the same quarter in 2008. Revenue, for the six months ended June 30, 2009, was relatively unchanged at $164.5 million as compared to $164.6 million for the same period in 2008. Overall, comparing 2009 to 2008, revenue has been generally flat thus far this year, primarily because the Company has sold several properties and has not acquired additional new properties.

Net Income Available to Common Stockholders

Net income available to common stockholders, for the quarter ended June 30, 2009, was $26.5 million as compared to $27.0 million for the same quarter in 2008. Net income per share for the quarter was $0.26 as compared to $0.27 for the same quarter in 2008.

Net income available to common stockholders, for the six months ended June 30, 2009, was $50.5 million as compared to $50.7 million for the same period in 2008. Net income per share for the quarter was $0.49 as compared to $0.50 for the same period in 2008.

The calculation to determine net income for a real estate company includes impairments and/or gains from the sales of investment properties. The amount of impairments and/or gains on property sales varies from quarter to quarter. This variance can significantly impact net income.

During the second quarter of 2009, income from continuing operations available to common stockholders was $0.23 per share as compared to $0.22 per share for the same quarter in 2008.

During the first six months of 2009 and 2008, income from continuing operations available to common stockholders was unchanged at $0.46 per share.

FFO Available to Common Stockholders

FFO, for the quarter ended June 30, 2009, increased 0.9% to $47.2 million as compared to $46.8 million for the same quarter in 2008. FFO per share, for the quarter ended June 30, 2009, decreased 2.1% to $0.46 as compared to $0.47 for the same quarter in 2008. FFO per share before Crest’s contribution was unchanged at $0.45 as compared to the same quarter in 2008. Crest Net Lease, Inc. (Crest) is a wholly-owned subsidiary of Realty Income.

FFO, for the six months ended June 30, 2009, increased 1.3% to $93.9 million as compared to $92.7 million for the same period in 2008. FFO per share, for the six months ended June 30, 2009, decreased 1.1% to $0.91 as compared to $0.92 for the same period in 2008. FFO before Crest’s contribution, for the six months ended June 30, 2009, was unchanged at $0.91 as compared to the same period in 2008. For a calculation of FFO before Crest’s contribution, see pages 6 and 7.

The Company considers FFO to be an appropriate supplemental measure of a Real Estate Investment Trust’s (REIT’s) operating performance as it is based on a net income analysis of property portfolio performance that excludes non-cash items such as depreciation. FFO is an alternative, non-GAAP measure that is also considered to be a good indicator of a company’s ability to generate income to pay dividends. Realty Income defines FFO consistent with the National Association of Real Estate Investment Trust’s (NAREIT’s) definition as net income available to common stockholders plus depreciation and amortization of real estate assets, reduced by gains on sales of investment properties and extraordinary items. See reconciliation of net income available to common stockholders to FFO on pages 6 and 7.

Dividend Information

In June 2009, Realty Income announced the 47th consecutive quarterly increase and the 54th increase in the amount of the dividend since the Company’s listing on the New York Stock Exchange in 1994. The annualized dividend amount, as of June 30, 2009, was $1.7085 per share. The amount of the monthly dividends paid, during the first half of 2009, increased 3.5% to $0.851 per share from $0.822 per share for the same period in 2008. Through June 30, 2009, the Company has paid 467 consecutive monthly dividends and continues its 40-year history of declaring and paying dividends every month.

Real Estate Portfolio Update

As of June 30, 2009, Realty Income’s portfolio of freestanding, single-tenant, retail properties consisted of 2,338 properties located in 49 states, leased to 118 retail chains doing business in 30 retail industries. The properties are leased under long-term, net leases with a weighted average remaining lease term of approximately 11.6 years.

Portfolio Management Activities

The Company’s portfolio of retail real estate, owned primarily under 15- to 20-year net leases, continues to perform well and provide dependable lease revenue supporting the payment of monthly dividends. As of June 30, 2009, portfolio occupancy was 96.6% with 79 properties available for lease out of a total of 2,338 properties in the portfolio.

Rent Increases

During the three months ended June 30, 2009, same store rents on 2,095 properties under lease increased 0.5% to $75.34 million, as compared to $74.99 million for the same quarter in 2008. Excluding 104 properties leased to Buffets, Inc. (for which rents were renegotiated in September 2008), for the quarter ended June 30, 2009, same store rents on 1,991 properties under lease increased 1.5% to $70.42 million, as compared to $69.39 million for the same quarter in 2008.

During the six months ended June 30, 2009, same store rents on 2,095 properties under lease increased 0.3% to $150.94 million, as compared to $150.47 million for the same period in 2008. Excluding 104 properties leased to Buffets, Inc. (for which rents were renegotiated in September 2008), for the six months ended June 30, 2009, same store rents on 1,991 properties under lease increased 1.3% to $141.09 million, as compared to $139.26 million for the same period in 2008.

Property Acquisitions

During the second quarter of 2009, Realty Income acquired no new properties. During the six months ended June 30, 2009, Realty Income invested $1.3 million in previously acquired properties. Crest did not acquire any properties during the first six months of 2009.

Realty Income maintains a $355 million unsecured acquisition credit facility, which is used to fund property acquisitions in the near term. There is currently no outstanding balance on the Company’s acquisition credit facility, and the full $355 million is available to fund new property acquisitions. In addition, the Company had cash and cash equivalents of $35.8 million at June 30, 2009.

Property Dispositions

Realty Income continued to successfully execute its asset disposition program in 2009. The objective of this program is to sell assets when the Company believes the reinvestment of the sales proceeds will generate higher returns, enhance the credit quality of the Company's real estate portfolio, increase the average lease length, or decrease tenant or industry concentration.

During the quarter ended June 30, 2009, Realty Income sold nine properties for $5.3 million, which resulted in a gain on sales of $2.2 million.

During the six months ended June 30, 2009, Realty Income sold ten properties for $6.4 million, which resulted in a gain on sales of $2.4 million.

Other Activities

Crest Net Lease

Crest is focused on acquiring and subsequently marketing net-leased properties for sale. Crest did not acquire or sell any properties during the first half of 2009. At June 30, 2009, Crest’s property inventory consisted of five properties valued at $5.7 million.

Crest’s contribution to Realty Income’s FFO (and net income) depends on the timing and number of property sales, if any, in a given quarter. Therefore, Crest’s contribution can fluctuate and add volatility to Realty Income’s reported FFO and net income on a comparable quarterly and annualized basis. During the second quarter of 2009, Crest contributed less than $0.01 per share to Realty Income’s FFO per share, as compared to $0.01 per share during the same quarter in 2008. During the six months ended June 30, 2009, Crest contributed less than $0.01 per share to Realty Income’s FFO per share, as compared to $0.01 per share during the same period in 2008.

CEO Comments on Operating Results

Commenting on Realty Income’s financial results and real estate operations, Chief Executive Officer, Tom A. Lewis said, “We are pleased with our results given the ongoing challenges in the credit markets and overall economy. Core FFO per share (before Crest) was flat, compared with the same period one year ago, which we consider to be positive given the fact that we have sold a number of properties and have not acquired additional assets over the past year. Our focus during the second quarter continued to be on maintaining substantial liquidity and managing our portfolio to maximize occupancy and ongoing cash flow.”

“We are fortunate to be in a very liquid position with over $35 million of cash on hand, at the end of the quarter, and no balance on our $355 million credit facility. The Company also has no mortgages on any of its 2,338 properties and no debt maturities for four years, or until 2013. Additionally, we have no properties under development, no joint ventures and no off balance sheet assets or liabilities of any kind.”

“At June 30, occupancy increased to 96.6%, as compared to 96.4% at the end of the first quarter and same store rents increased 0.05% compared to the same quarter one year ago. Given the ongoing softness in the retail industry, we are pleased with this slightly increasing occupancy on a sequential quarterly basis.”

“With respect to real estate acquisitions, we are beginning to see a more attractive environment that could lead to acquisition activity in the second half of the year. As expected, property prices have declined and initial investment yields have increased. We believe we will now begin to benefit from having waited for property prices to adjust over the last 18 months. We continue to review acquisition opportunities and perform due diligence on a number of properties. Given our substantial liquidity position, we have funds on hand to invest should attractively priced acquisitions emerge during the next six months.”

“Our conservative operations during a challenging economic and retail environment allowed us to increase the amount of the monthly dividend for the 54th time since our listing on the New York Stock Exchange in 1994, to an annualized amount of $1.7085 per share. We have been fortunate to own a strong portfolio of good properties that have remained profitable to our retailers, which is key to the profitability of our tenant’s business. We believe this has kept occupancy high and, when coupled with our conservative balance sheet and strong liquidity, is providing us with a solid foundation during the current economic downturn.”

FFO Commentary

Realty Income’s FFO per share has historically tended to be stable and fairly predictable because of the long-term leases that are the primary source of the Company’s revenue. There are, however, several factors that can cause FFO per share to vary from levels that have been anticipated by the Company. These factors include, but are not limited to, changes in interest rates, occupancy rates, periodically accessing the capital markets, the level and timing of property acquisitions and dispositions, lease rollovers, the general real estate market, the economy, charges for property impairments, and the operations of Crest.

2009 Estimates

Management estimates that FFO per share for 2009 should range from $1.83 to $1.86, which represents annual FFO per share growth of approximately 0.0% to 1.6%, as compared to 2008 FFO per share of $1.83. FFO for 2009 is based on an estimated net income per share range of $1.00 to $1.03, adjusted (in accordance with NAREIT’s definition of FFO) for estimated real estate depreciation of $0.88 and potential gain on sales of investment properties of $0.05 per share.

Management notes that, given the volatility in the markets, it is more challenging than usual to estimate a number of factors that will impact the Company’s future results. For example, new property acquisition levels could vary depending on the number of opportunities, capitalization rates and the availability of attractively priced permanent financing. As such, management would add that the $1.83 FFO per share estimate assumes no new property acquisitions for 2009. The $1.86 FFO per share estimate assumes property acquisitions of approximately $250 million in 2009.

Management further estimates that Crest could contribute between $0.00 and $0.01 per share to Realty Income’s FFO during 2009. Crest’s primary business is the purchase and sale of properties for a profit. These sales may occur at various times during the course of the year and could cause FFO, in certain quarters, to fluctuate on a comparable quarterly and annualized basis.

About Realty Income

Realty Income is The Monthly Dividend Company®, a New York Stock Exchange real estate company dedicated to providing shareholders with dependable monthly income. As of June 30, 2009, the Company had paid 467 consecutive monthly dividends throughout its 40-year operating history. The monthly income is supported by the cash flows from 2,338 retail properties owned under long-term lease agreements with leading regional and national retail chains. The Company is a buyer of net-leased retail properties nationwide.

Forward-Looking Statements

Statements in this press release that are not strictly historical are “forward-looking” statements. Forward-looking statements involve known and unknown risks, which may cause the Company’s actual future results to differ materially from expected results. These risks include, among others, general economic conditions, local real estate conditions, the availability of capital to finance planned growth, continued volatility and uncertainty in the credit markets and broader financial markets, property acquisitions and the timing of these acquisitions, charges for property impairments, the outcome of any legal proceedings to which the Company is a party, and the profitability of Crest, the Company’s subsidiary, as described in the Company’s filings with the Securities and Exchange Commission. Consequently, such forward-looking statements should be regarded solely as reflections of the Company’s current operating plans and estimates. Actual operating results may differ materially from what is expressed or forecast in this press release. The Company undertakes no obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date these statements were made.

Note to Editors: Realty Income press releases are available at no charge by calling our toll-free investor hotline number: 888-811-2001, or via the internet at http://www.realtyincome.com/Investing/News.html.

CONSOLIDATED STATEMENTS OF INCOME

For the three and six months ended June 30, 2009 and 2008

(dollars in thousands, except per share amounts)

	Three Months Ended 6/30/09			Three Months Ended 6/30/08			Six Months Ended 6/30/09			Six Months Ended 6/30/08
REVENUE
Rental	$	81,553		$	81,982		$	163,650		$	163,094
Other		85			80			839			1,528
		81,638			82,062			164,489			164,622
EXPENSES
Depreciation and amortization		22,961			22,752			45,887			44,803
Interest		21,367			23,929			42,777			47,315
General and administrative		5,006			5,924			10,956			11,467
Property		1,884			1,086			4,110			2,317
Income taxes		308			218			610			615
		51,526			53,909			104,340			106,517
Income from continuing operations		30,112			28,153			60,149			58,105
Income from discontinued operations:
Real estate acquired for resale by Crest		226			1,259			102			330
Real estate held for investment		2,222			3,639			2,394			4,378
		2,448			4,898			2,496			4,708

Net income		32,560			33,051			62,645			62,813
Preferred stock cash dividends		(6,063	)		(6,063	)		(12,127	)		(12,127	)
Net income available to common stockholders	$	26,497		$	26,988		$	50,518		$	50,686

Funds from operations available to common stockholders (FFO)	$	47,180		$	46,812		$	93,915		$	92,749

Per share information for common stockholders:
Income from continuing operations: Basic and diluted	$	0.23		$	0.22		$	0.46		$	0.46
Net income: Basic	$	0.26		$	0.27		$	0.49		$	0.51
Diluted	$	0.26		$	0.27		$	0.49		$	0.50
FFO, basic and diluted(1)
FFO before Crest contribution	$	0.45		$	0.45		$	0.91		$	0.91
Crest Net Lease	$	0.00		$	0.01		$	0.00		$	0.01
Total FFO	$	0.46		$	0.47		$	0.91		$	0.92

Cash dividends paid	$	0.426		$	0.412		$	0.851		$	0.822

(1) The above FFO per share amounts have been rounded to the nearest two decimals and, as such, the individual amounts may not add up to the “Total FFO” amount.

FUNDS FROM OPERATIONS

(dollars in thousands, except per share amounts)

	Three Months Ended 6/30/09			Three Months Ended 6/30/08			Six Months Ended 6/30/09			Six Months Ended 6/30/08

Net income available to common stockholders	$	26,497		$	26,988		$	50,518		$	50,686
Depreciation and amortization:
Continuing operations		22,961			22,752			45,887			44,803
Discontinued operations		40			203			106			1,126
Depreciation of furniture, fixtures & equipment		(79	)		(79	)		(160	)		(157	)
(Gain) loss on sales of investment properties: Continuing operations		--			203			--			(236	)
Discontinued operations		(2,239	)		(3,255	)		(2,436	)		(3,473	)
Funds from operations available to common stockholders	$	47,180		$	46,812		$	93,915		$	92,749

FFO per common share, basic and diluted	$	0.46		$	0.47		$	0.91		$	0.92

Dividends paid to common stockholders	$	44,464		$	41,756		$	88,826		$	83,310

FFO in excess of dividends paid to common stockholders	$	2,716		$	5,056		$	5,089		$	9,439

Weighted average number of common shares used for computation per share:
Basic		103,446,949			100,346,512			103,475,185			100,326,039
Diluted		103,450,457			100,394,431			103,479,897			100,420,692

CONTRIBUTIONS BY CREST TO FUNDS FROM OPERATIONS

(dollars in thousands, except per share amounts)

Crest acquires properties with the intention of reselling them rather than holding them as investments and operating the properties. Consequently, we typically classify properties acquired by Crest as held for sale at the date of acquisition and do not depreciate them. The operations of Crest’s properties are classified as “income from discontinued operations, real estate acquired for resale”.
	Three Months Ended 6/30/09			Three Months Ended 6/30/08			Six Months Ended 6/30/09			Six Months Ended 6/30/08
Gain on sales of real estate acquired for resale	$	--		$	1,737		$	--		$	4,444
Rental revenue		66			598			132			1,634
Other revenue		351			138			703			208
Interest expense		(149	)		(433	)		(322	)		(1,065	)
General and administrative expense		(83	)		(126	)		(168	)		(287	)
Property expenses		(34	)		(53	)		(68	)		(65	)
Provisions for impairment		--			(953	)		(311	)		(3,347	)
Income taxes		75			387			136			(421	)
Funds from operations contributed by Crest	$	226		$	1,295		$	102		$	1,101

Crest FFO per common share, basic and diluted	$	0.00		$	0.01		$	0.00		$	0.01

Total FFO	$	47,180		$	46,812		$	93,915		$	92,749
Less FFO contributed by Crest		(226	)		(1,295	)		(102	)		(1,101	)
FFO before Crest contribution	$	46,954		$	45,517		$	93,813		$	91,648

FFO before Crest contribution per common share, basic and diluted	$	0.45		$	0.45		$	0.91		$	0.91

We define FFO, a non-GAAP measure, consistent with the National Association of Real Estate Investment Trust’s definition, as net income available to common stockholders, plus depreciation and amortization of real estate assets reduced by gains on sales of investment properties and extraordinary items.

HISTORICAL FUNDS FROM OPERATIONS

(dollars in thousands, except per share amounts)



For the three months ended June 30,	2009			2008			2007			2006			2005

Net income available to common stockholders	$	26,497		$	26,988		$	30,873		$	24,289		$	22,315
Depreciation and amortization		22,922			22,876			18,472			14,774			11,214
Gain on sales of investment properties		(2,239	)		(3,052	)		(585	)		(1,441	)		(2,655	)
Total FFO	$	47,180		$	46,812		$	48,760		$	37,622		$	30,874

Total FFO per diluted share	$	0.46		$	0.47		$	0.49		$	0.43		$	0.39

Total FFO	$	47,180		$	46,812		$	48,760		$	37,622		$	30,874
Less FFO contributed by Crest		(226	)		(1,295	)		(4,282	)		(537	)		(296	)
FFO before Crest contribution	$	46,954		$	45,517		$	44,478		$	37,085		$	30,578

FFO components, per diluted share(1):
FFO before Crest contribution	$	0.45		$	0.45		$	0.44		$	0.42		$	0.38
Crest FFO contribution	$	0.00		$	0.01		$	0.04		$	0.01		$	0.00

Total FFO	$	0.46		$	0.47		$	0.49		$	0.43		$	0.39

Cash dividends paid per share	$	0.426		$	0.412		$	0.381		$	0.351		$	0.332
Diluted shares outstanding		103,450,457			100,394,431			100,246,112			88,466,024			79,676,168



For the six months ended June 30,	2009			2008			2007			2006			2005

Net income available to common stockholders	$	50,518		$	50,686		$	61,133		$	46,826		$	43,467
Depreciation and amortization		45,833			45,772			36,557			28,289			22,046
Gain on sales of investment properties		(2,436	)		(3,709	)		(2,391	)		(2,193	)		(3,477	)
Total FFO	$	93,915		$	92,749		$	95,299		$	72,922		$	62,036

Total FFO per diluted share	$	0.91		$	0.92		$	0.95		$	0.85		$	0.78

Total FFO	$	93,915		$	92,749		$	95,299		$	72,922		$	62,036
Less FFO contributed by Crest		(102	)		(1,101	)		(6,030	)		(1,416	)		(1,129	)
FFO before Crest contribution	$	93,813		$	91,648		$	89,269		$	71,506		$	60,907

FFO components, per diluted share(1):
FFO before Crest contribution	$	0.91		$	0.91		$	0.89		$	0.83		$	0.76
Crest FFO contribution	$	0.00		$	0.01		$	0.06		$	0.02		$	0.01

Total FFO	$	0.91		$	0.92		$	0.95		$	0.85		$	0.78

Cash dividends paid per share	$	0.851		$	0.822		$	0.761		$	0.699		$	0.662
Diluted shares outstanding		103,479,897			100,420,692			100,304,617			85,988,206			79,667,812

(1) The above FFO per share amounts have been rounded to the nearest two decimals and, as such, the individual amounts may not add up to the “Total FFO” amount.

CONSOLIDATED BALANCE SHEETS

As of June 30, 2009 and December 31, 2008

(dollars in thousands, except per share amounts)

	2009			2008
ASSETS
Real estate, at cost:
Land	$	1,156,488		$	1,157,885
Buildings and improvements		2,245,443			2,251,025
		3,401,931			3,408,910
Less accumulated depreciation and amortization		(593,621	)		(553,417	)
Net real estate held for investment		2,808,310			2,855,493
Real estate held for sale, net		7,007			6,660
Net real estate		2,815,317			2,862,153
Cash and cash equivalents		35,823			46,815
Accounts receivable, net		10,419			10,624
Goodwill		17,206			17,206
Other assets, net		53,793			57,381
Total assets	$	2,932,558		$	2,994,179

LIABILITIES AND STOCKHOLDERS’ EQUITY
Distributions payable	$	16,868		$	16,793
Accounts payable and accrued expenses		36,557			38,027
Other liabilities		10,296			14,698
Line of credit payable		--			--
Notes payable		1,350,000			1,370,000
Total liabilities		1,413,721			1,439,518

Stockholders’ equity:
Preferred stock and paid in capital, par value $1.00 per share, 20,000,000 shares authorized, 13,900,000 issued and outstanding		337,790			337,790
Common stock and paid in capital, par value $1.00 per share, 200,000,000 shares authorized, 104,281,597 and 104,211,541 shares issued and outstanding as of June 30, 2009 and December 31, 2008, respectively		1,627,180			1,624,622
Distributions in excess of net income		(446,133	)		(407,751	)
Total stockholders’ equity		1,518,837			1,554,661
Total liabilities and stockholders’ equity	$	2,932,558		$	2,994,179

Industry Diversification

The following table sets forth certain information regarding Realty Income’s property portfolio (excluding properties owned by Crest) classified according to the business of the respective tenants, expressed as a percentage of our total rental revenue:

	Percentage of Rental Revenue(1)
	For the Quarter			For the Years Ended
Industries	Ended June 30, 2009			Dec 31, 2008			Dec 31, 2007			Dec 31, 2006			Dec 31, 2005			Dec 31, 2004			Dec 31, 2003
Apparel stores		1.1	%		1.1	%		1.2	%		1.7	%		1.6	%		1.8	%		2.1	%
Automotive collision services		1.1			1.0			1.1			1.3			1.3			1.0			0.3
Automotive parts		1.5			1.6			2.1			2.8			3.4			3.8			4.5
Automotive service		4.7			4.8			5.2			6.9			7.6			7.7			8.3
Automotive tire services		7.1			6.7			7.3			6.1			7.2			7.8			3.1
Book stores		0.2			0.2			0.2			0.2			0.3			0.3			0.4
Business services		*			*			0.1			0.1			0.1			0.1			0.1
Child care		7.5			7.6			8.4			10.3			12.7			14.4			17.8
Consumer electronics		0.8			0.8			0.9			1.1			1.3			2.1			3.0
Convenience stores		16.9			15.8			14.0			16.1			18.7			19.2			13.3
Crafts and novelties		0.3			0.3			0.3			0.4			0.4			0.5			0.6
Distribution and office		1.0			1.0			0.6			--			--			--			--
Drug stores		4.3			4.1			2.7			2.9			2.8			0.1			0.2
Entertainment		1.3			1.2			1.4			1.6			2.1			2.3			2.6
Equipment rental services		0.2			0.2			0.2			0.2			0.4			0.3			0.2
Financial services		0.2			0.2			0.2			0.1			0.1			0.1			--
General merchandise		0.8			0.8			0.7			0.6			0.5			0.4			0.5
Grocery stores		0.7			0.7			0.7			0.7			0.7			0.8			0.4
Health and fitness		5.8			5.6			5.1			4.3			3.7			4.0			3.8
Home furnishings		1.3			2.4			2.6			3.1			3.7			4.1			4.9
Home improvement		1.9			1.9			2.1			3.4			1.1			1.0			1.1
Motor vehicle dealerships		2.9			3.1			3.1			3.4			2.6			0.6			--
Office supplies		1.0			1.0			1.1			1.3			1.5			1.6			1.9
Pet supplies and services		0.9			0.8			0.9			1.1			1.3			1.4			1.7
Private education		0.9			0.8			0.8			0.8			0.8			1.1			1.2
Restaurants		21.1			21.8			21.2			11.9			9.4			9.7			11.8
Shoe stores		--			--			--			--			0.3			0.3			0.9
Sporting goods		2.3			2.3			2.6			2.9			3.4			3.4			3.8
Theaters		9.2			9.0			9.0			9.6			5.2			3.5			4.1
Travel plazas		0.2			0.2			0.2			0.3			0.3			0.4			0.3
Video rental		1.0			1.1			1.7			2.1			2.5			2.8			3.3
Other		1.8			1.9			2.3			2.7			3.0			3.4			3.8
Totals		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%

* Less than 0.1%

(1)	Includes rental revenue for all properties owned by Realty Income at the end of each period presented, including revenue from properties reclassified to discontinued operations.

Lease Expirations

The following table sets forth certain information regarding Realty Income’s property portfolio (excluding properties owned by Crest) regarding the timing of the lease term expirations (excluding extension options) on our 2,249 net leased, single-tenant retail properties as of June 30, 2009 (dollars in thousands):

	Total Portfolio							Initial Expirations(3)							Subsequent Expirations(4)
Year	Total Number of Leases Expiring(1)		Rental Revenue for the Quarter Ended June 30, 2009(2)		% of Total Rental Revenue			Number of Leases Expiring		Rental Revenue for the Quarter Ended June 30, 2009		% of Total Rental Revenue			Number of Leases Expiring		Rental Revenue for the Quarter Ended June 30, 2009		% of Total Rental Revenue
2009		105	$	2,245		2.8	%		23	$	508		0.6	%		82	$	1,737		2.2	%
2010		98		2,072		2.6			47		1,111		1.4			51		961		1.2
2011		106		3,260		4.1			59		2,114		2.7			47		1,146		1.4
2012		124		2,759		3.5			77		1,855		2.3			47		904		1.2
2013		140		5,001		6.3			98		4,043		5.1			42		958		1.2
2014		71		2,513		3.2			38		1,799		2.3			33		714		0.9
2015		112		2,937		3.7			85		2,332		2.9			27		605		0.8
2016		114		2,052		2.6			112		2,008		2.5			2		44		0.1
2017		48		1,654		2.1			39		1,469		1.9			9		185		0.2
2018		42		1,828		2.3			34		1,629		2.1			8		199		0.2
2019		97		4,908		6.2			91		4,557		5.8			6		351		0.4
2020		77		3,000		3.8			73		2,928		3.7			4		72		0.1
2021		179		7,734		9.8			178		7,679		9.7			1		55		0.1
2022		100		2,928		3.7			99		2,880		3.6			1		48		0.1
2023		246		7,942		10.0			244		7,869		9.9			2		73		0.1
2024		60		1,574		2.0			60		1,574		2.0			--		--		--
2025		70		5,404		6.8			66		5,336		6.7			4		68		0.1
2026		118		6,757		8.6			116		6,699		8.5			2		58		0.1
2027		152		4,612		5.8			151		4,595		5.8			1		17		*
2028		83		4,132		5.2			81		4,083		5.1			2		49		0.1
2029		46		1,131		1.4			45		1,116		1.4			1		15		*
2030		20		921		1.2			20		921		1.2			--		--		--
2031		27		648		0.8			27		648		0.8			--		--		--
2032		2		57		0.1			2		57		0.1			--		--		--
2033		7		460		0.6			7		460		0.6			--		--		--
2034		2		230		0.3			2		230		0.3			--		--		--
2037		2		354		0.5			2		354		0.5			--		--		--
2043		1		13		*			--		--		--			1		13		*
Totals		2,249	$	79,126		100.0	%		1,876	$	70,854		89.5	%		373	$	8,272		10.5	%

* Less than 0.1%

(1)	Excludes ten multi-tenant properties and 79 vacant unleased properties, one of which is a multi-tenant property. The lease expirations for properties under construction are based on the estimated date of completion of those properties.

(2)	Includes rental revenue of $53 from properties reclassified to discontinued operations and excludes revenue of $2,480 from ten multi-tenant properties and from 79 vacant and unleased properties at June 30, 2009.

(3)	Represents leases to the initial tenant of the property that are expiring for the first time.

(4)	Represents lease expirations on properties in the portfolio, which have previously been renewed, extended or re-tenanted.

Geographic Diversification

The following table sets forth certain state-by-state information regarding Realty Income’s property portfolio (excluding properties owned by Crest) as of June 30, 2009 (dollars in thousands):

State	Number of Properties		Percent Leased			Approximate Leasable Square Feet		Rental Revenue for the Quarter Ended June 30, 2009(1)		Percentage of Revenue
Alabama		63		97	%		425,300	$	1,906		2.3	%
Alaska		2		100			128,500		277		0.3
Arizona		79		99			392,700		2,478		3.0
Arkansas		18		89			98,500		382		0.5
California		64		98			1,160,700		4,383		5.4
Colorado		52		98			478,900		1,855		2.3
Connecticut		24		96			276,600		1,181		1.4
Delaware		17		100			33,300		429		0.5
Florida		167		93			1,437,300		6,696		8.2
Georgia		131		97			919,400		3,973		4.9
Idaho		12		100			80,700		336		0.4
Illinois		74		97			877,800		4,230		5.2
Indiana		82		96			689,600		3,234		4.0
Iowa		22		95			296,100		1,010		1.2
Kansas		33		91			573,500		1,106		1.3
Kentucky		22		100			110,600		675		0.8
Louisiana		33		97			190,400		892		1.1
Maine		3		100			22,500		160		0.2
Maryland		29		97			271,200		1,599		2.0
Massachusetts		65		100			577,800		2,601		3.2
Michigan		52		100			257,300		1,255		1.5
Minnesota		21		100			392,100		1,545		1.9
Mississippi		71		96			347,600		1,478		1.8
Missouri		62		95			640,100		2,095		2.6
Montana		2		100			30,000		76		0.1
Nebraska		19		95			196,300		497		0.6
Nevada		15		93			191,000		742		0.9
New Hampshire		14		100			109,900		563		0.7
New Jersey		33		100			261,300		1,929		2.4
New Mexico		8		100			56,400		181		0.2
New York		40		93			502,300		2,344		2.9
North Carolina		96		98			548,300		2,845		3.5
North Dakota		6		100			36,600		60		0.1
Ohio		137		96			852,700		3,347		4.1
Oklahoma		25		96			145,900		584		0.7
Oregon		18		100			297,300		853		1.0
Pennsylvania		99		98			683,800		3,507		4.3
Rhode Island		3		100			11,000		57		0.1
South Carolina		100		100			374,400		2,216		2.7
South Dakota		9		100			24,900		102		0.1
Tennessee		134		97			629,300		2,920		3.6
Texas		212		94			2,230,500		7,669		9.4
Utah		4		100			25,200		87		0.1
Vermont		4		100			12,700		124		0.2
Virginia		104		99			637,100		3,505		4.3
Washington		35		91			230,300		703		0.9
West Virginia		2		100			23,000		121		0.1
Wisconsin		20		90			248,100		780		1.0
Wyoming		1		100			4,200		18		*
Totals/Average		2,338		97	%		19,041,000	$	81,606		100.0	%

* Less than 0.1%

(1)	Includes rental revenue for all properties owned by Realty Income at June 30, 2009, including revenue from properties reclassified to discontinued operations of $53.

Realty Income Performance vs. Major Stock Indices

			Equity						NASDAQ
	Realty Income		REIT Index(1)		DJIA		S&P 500		Composite
	Dividend	Total	Dividend	Total	Dividend	Total	Dividend	Total	Dividend	Total
	Yield	Return(2)	Yield	Return(3)	Yield	Return(3)	Yield	Return(3)	Yield	Return(4)

1995	8.3%	42.0%	7.4%	15.3%	2.4%	36.9%	2.3%	37.6%	0.6%	39.9%
1996	7.9%	15.4%	6.1%	35.3%	2.2%	28.9%	2.0%	23.0%	0.2%	22.7%
1997	7.5%	14.5%	5.5%	20.3%	1.8%	24.9%	1.6%	33.4%	0.5%	21.6%
1998	8.2%	5.5%	7.5%	(17.5%)	1.7%	18.1%	1.3%	28.6%	0.3%	39.6%
1999	10.5%	(8.7%)	8.7%	(4.6%)	1.3%	27.2%	1.1%	21.0%	0.2%	85.6%
2000	8.9%	31.2%	7.5%	26.4%	1.5%	(4.7%)	1.2%	(9.1%)	0.3%	(39.3%)
2001	7.8%	27.2%	7.1%	13.9%	1.9%	(5.5%)	1.4%	(11.9%)	0.3%	(21.1%)
2002	6.7%	26.9%	7.1%	3.8%	2.6%	(15.0%)	1.9%	(22.1%)	0.5%	(31.5%)
2003	6.0%	21.0%	5.5%	37.1%	2.3%	28.3%	1.8%	28.7%	0.6%	50.0%
2004	5.2%	32.7%	4.7%	31.6%	2.2%	5.6%	1.8%	10.9%	0.6%	8.6%
2005	6.5%	(9.2%)	4.6%	12.2%	2.6%	1.7%	1.9%	4.9%	0.9%	1.4%
2006	5.5%	34.8%	3.7%	35.1%	2.5%	19.0%	1.9%	15.8%	0.8%	9.5%
2007	6.1%	3.2%	4.9%	(15.7%)	2.7%	8.8%	2.1%	5.5%	0.8%	9.8%
2008	7.3%	(8.2%)	7.6%	(37.7%)	3.6%	(31.8%)	3.2%	(37.0%)	1.3%	(40.5%)
YTD 2Q 2009	7.8%	(1.6%)	5.9%	(12.2%)	3.4%	(2.0%)	2.4%	3.2%	0.9%	16.4%
Compounded Average Annual Total Return(5)		15.6%		7.2%		7.7%		6.6%		6.1%

Note: All of these Dividend Yields are calculated as annualized dividend based on last dividend paid in applicable time period divided by closing price as of period end. Dividend Yield sources: NAREIT website and Bloomberg.

(1) FTSE NAREIT US Equity REIT Index, as per NAREIT website.

(2) Calculated as closing stock price as of period end plus dividends paid in period divided by closing stock price as of end of previous period. Does not include reinvestment of dividends.

(3) Includes reinvestment of dividends. Sources: NAREIT website and Factset.

(4) Price only index, does not include dividends. Source: Factset.

(5) All of these Compounded Average Annual Total Return rates are calculated in the same manner: from Realty Income's NYSE listing on October 18, 1994 through June 30, 2009, and assuming reinvestment of dividends. Past performance does not guarantee future performance. Realty Income presents this data for informational purposes only and makes no representation about its future performance or how it will compare in performance to other indices in the future.

Maryland	1-13374	33-0580106
(State or Other Jurisdiction of Incorporation or Organization)	(Commission File Number)	(IRS Employer Identification No.)

Dated: July 29, 2009	REALTY INCOME CORPORATION
	By:	/s/ MICHAEL R. PFEIFFER
		Michael R. Pfeiffer
		Executive Vice President, General Counsel and Secretary