ESCONDIDO, CA-Realty Income Corp., a REIT that specializes in net lease investments, has signed purchase agreements to acquire up to 33 single-tenant, retail, distribution, office and manufacturing properties under long-term net leases for approximately $544 million. The company anticipates that the majority of the properties will close during the first half of 2011, subject to closing conditions. The REIT says that, assuming the transaction is completed as planned, it has sufficient liquidity from cash on hand and availabile under its revolving credit facility to fund the transaction.

The portfolio has approximately $291 million of existing mortgage debt. Realty Income says that it anticipates paying off approximately $223 million of the mortgage debt at, or shortly after, acquiring the properties. "We anticipate paying off the remaining $68 million as soon as prepayment penalties and other costs make it economically feasible to do so," the company said.

The properties to be acquired are located in 17 different states and consist of approximately 3.8 million square feet of leasable space. The majority of the lease revenue from these single-tenant properties is generated from investment grade tenants, or their operating subsidiaries, in 11 different industries.

The single-tenant distribution properties representing 34% of the lease revenue include; Aviall Services, Caterpillar, FedEx Corp. and International Paper. The single-tenant retail properties representing 33% of the lease revenue include; AMC Theaters, Cinemark Theaters, Regal Cinemas, and Walgreens. The single-tenant office properties representing 25% of the lease revenue include; Fiserv, Inc., Novus International, Solae and T-Mobile USA.

The single-tenant manufacturing properties representing 8% of the lease revenue include; Coca-Cola and MeadWestvaco Corp. The average remaining lease term of the properties is over 11 years, which is consistent with the average remaining lease term of Realty Income’s existing portfolio of approximately 2,500 net leased properties.

Commenting on this transaction, Realty Income CEO Tom A. Lewis said in a prepared statement that the acquisition "should provide us with the additional lease revenue from which we pay increasing monthly dividends to our shareholders." While the vast majority of Realty Income's assets in are retail properties, the acquisition "continues the expansion of our portfolio into additional single-tenant, net-lease, asset types," Lewis said.

Among the other diverse types of properties owned by the REIT is winery acreage. The company, as reported on GlobeSt.com, bought 2,000 acres of Diageo Chateau & Estate wineries in the Napa Valley for $269 million in a sale-leaseback last year.