Realty Income, KKR Form €528M European Joint Venture

Realty Income and KKR are forming a €528 million euro-denominated joint venture spanning 54 European properties, extending Realty Income's private capital platform abroad while providing KKR a 49% equity stake.

The transaction contributes a diversified, stabilized European net lease portfolio originating from Realty Income to the new venture. KKR-advised capital accounts are funding €528 million for their minority share, while Realty Income retains a controlling 51% interest, according to a Stock Titan filing.

"This transaction marks another important step in Realty Income's evolution as the leading global net lease platform," said Sumit Roy, Realty Income's President and Chief Executive Officer.

Portfolio Metrics and Regional Distribution

The joint venture encompasses 140 operational units spread across Spain, Ireland, Poland, and the Netherlands. The assets were contributed at an effective 5.9% initial cap rate after accounting for recurring asset management fees.

Year 1 cash net operating income for the portfolio is projected at €67.7 million. The underlying real estate carries a weighted average remaining lease term of 7.2 years, with 59% of the rent exposure derived from investment-grade tenants.

Deal Structure and Call Option Terms

The agreement includes a structured call option mechanism allowing Realty Income to redeem KKR's 49% interest. The redemption window opens after year 10 and extends through year 17.

The future purchase price is structured to cap KKR's internal rate of return at between 6.3% and 6.5%, determined at the time of closing. Both companies expect the transaction to finalize on September 30, 2026, pending customary closing conditions.

"We are proud to support Realty Income as it extends its private capital strategy into Europe through this bespoke capital solution, designed with the flexibility to expand in line with the company's evolving needs," said Christopher Sheldon, KKR Partner.

Strategic Expansion Into European Real Estate

The partnership establishes a permanent vehicle for institutional capital deployment into European net lease assets. KKR leadership highlighted the defensive qualities of the underlying real estate.

"We are pleased to invest alongside Realty Income, one of the world's largest net lease REITs, in a diversified portfolio of high-quality, hard-to-replace assets across key markets in Europe, supported by strong underlying real estate fundamentals," said Seb d'Avanzo, Co-Head of European Real Estate Equity at KKR.

In public markets, Realty Income (NYSE: O) shares traded at $58.56, down 0.26% from a previous close of $58.71, as of September 16, 2026, according to Finnhub market data.