O: Thoughts on Datacenter JV

Research evidence excerpt

O: Thoughts on Datacenter JV

EQUITY RESEARCH QUICK TAKE

RBC Capital Markets, LLC

Brad Heffern, CFA (Analyst)

Michael Carroll, CFA (Head of US Real Estate

Research)

Patrick Fox, CFA (AVP)

June 30, 2026

Realty Income Corporation

Thoughts on Datacenter JV

NYSE: O | USD 61.96 | Outperform | Price Target USD 71.00

Sentiment: Neutral

News: O announced a programmatic JV with Cloud Capital and an unnamed global institutional investor to acquire a three-asset

hyperscale datacenter portfolio in Northern Virginia. O expects to invest up to $1.4B for a 45% equity stake, with initial funding of

~$700mm in 2Q-3Q26 for a stabilized datacenter and the remaining capital deployed as two development assets are completed in

coming years. The portfolio is 100% leased/pre-leased to investment-grade hyperscale tenants under 15-20 year triple-net leases

with embedded annual rent escalators.

Our View: The $700mm of funding in 2026 (out of $1.4B total) represents ~7% of O's $9.5B investment volume guidance for the

year. O noted "attractive cash-on-cash yields consistent with Realty Income's targets," which we expect will translate to cap rates at

the lower end of O's typical range, but higher escalators. The programmatic JV structure is notable, providing O a scalable platform

for future U.S. and European datacenter investments. The datacenter opportunity set is obviously substantial, but investment from

O has been sporadic to date. We view more consistent acquisitions in the space positively, although generating positive going-in

cap rates (if not strong IRRs) will likely remain challenging.

All values in USD unless otherwise noted. Priced as of prior trading day's market close, EST (unless otherwise noted).

Disseminated: Jun 30, 2026 20:01EDT; Produced: Jun 30, 2026 20:01EDT