Investment Research report

Realty Income Corp.

NYSE:
O
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Realty Income Corp.
O No, Growth Gone Negative
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Research Overview

INDEX:
S&P 500
Sector:
Real Estate
Position:
Short
Date:
Feb 7, 2018

After conducting a forensic financial and accounting review, Spruce Point believes Realty Income Corp (NYSE: O), a real estate investment trust company, has deceptive same-store property reporting, tenant quality deterioration with the changing retail landscape, and will face an interest rate tightening cycle headwind. Based on our investigation, we estimate 30% to 40% downside risk, or $28- $35 per share.

The report highlights several key concerns with the company, including:

  • Evidence of deceptive same store rent reporting which is masking declining performance
  • We find that the tenant qualities of the Company are deteriorating as the retail landscape changes
  • Data shows that interest rates will likely experience a tightening cycle
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