Realty Income Corporation, the net-lease REIT known for its monthly dividend, reported second-quarter 2026 adjusted funds from operations of $1.09 per share, up 3.8% year over year, and raised full-year guidance as it pushes into data centers and a new institutional private-capital fund, according to the company’s earnings release.
Revenue for the quarter reached $1.55 billion, up from $1.41 billion a year earlier. The company raised its full-year 2026 AFFO-per-share guidance to a range of $4.44 to $4.45, roughly 4% growth at the midpoint, and reaffirmed investment volume guidance of $10 billion for the year. Portfolio occupancy stood at 98.8% as of June 30, across 15,588 properties leased to 1,798 clients in 92 industries; the company recaptured 102.7% of prior rent on units it re-leased during the quarter.
“Our results reflect the strength of our diversified platform and disciplined capital allocation approach,” said CEO Sumit Roy, adding that the company is leveraging its “scale, relationships, and track record to access new sources of growth.”
The board raised the monthly dividend to $0.812 per share, an annualized $3.252 β the 115th consecutive quarterly increase for a REIT that has built much of its investor following around dividend reliability.
A $6 billion bet on data centers
The most consequential news in the quarter was strategic rather than purely financial: Realty Income disclosed a $6 billion hyperscale data center joint venture, part of a broader pivot into new property types beyond its traditional single-tenant retail base. On the earnings call, Roy said the company now sizes the global data center opportunity at more than $1 trillion on its own, one of five core segments the company believes collectively represent a $15 trillion addressable market for its capital-deployment platform.
Roy described the data center investment product as “largely defined,” while the financing side is still evolving β the company is building what he called an “ecosystem” designed to attract low-cost equity capital and generate recurring fee income, rather than funding every data center investment purely off its own balance sheet.
A new institutional fund
To help finance that expansion, Realty Income is launching its first evergreen, open-end institutional private-capital fund, targeting pensions, sovereign wealth funds, endowments, foundations and large insurance companies as investors. The move mirrors a broader trend among large net-lease and alternative-asset managers of raising third-party institutional capital alongside their own balance-sheet investing, generating fee revenue in addition to property-level returns β a strategy that has also fueled record fundraising at alternative-asset managers like KKR this year. Of the $10 billion in total 2026 investment volume the company now targets, roughly $9 billion is expected to remain on Realty Income’s own balance sheet, with the fund’s initial cornerstone equity already fully deployed.
Second-quarter investment activity totaled $2.6 billion, or $2.1 billion at Realty Income’s pro-rata share, at a 7.3% initial weighted-average cash yield β in line with the higher-yield environment net-lease investors have navigated through 2026’s elevated interest rates.
On the capital-markets side, Realty Income issued β¬600 million of 3.625% senior notes in July and expanded its revolving credit facility to $5.5 billion. Fitch Ratings assigned the company an “A” rating with a stable outlook in August.
What it means
Realty Income’s move into data centers puts one of the largest and most conservative net-lease REITs squarely into the same asset class driving record capital flows across commercial real estate this year, alongside dedicated data center operators and diversified asset managers like the developers now competing with homebuilders for land in fast-growing corridors. For a REIT built on the predictability of drugstore and convenience-store leases, a $6 billion hyperscale data center venture and an institutional fund business represent a meaningful diversification of both its property mix and its capital sources.
The $15 trillion addressable-market figure is Realty Income’s own characterization of its opportunity set across five segments, not an independently verified market-sizing estimate, and investors should treat it as a statement of strategic ambition rather than a near-term financial target. Whether the new fund and the data center venture translate into the kind of fee income and yield the company is describing will become clearer as the fund raises capital and the joint venture’s first projects move from announcement to construction.
