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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 2000
Commission File Number 1-13318
REALTY INCOME CORPORATION
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(Exact name of registrant as specified in its charter)
Maryland 33-0580106
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(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
220 West Crest Street, Escondido, California 92025
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(Address of principal executive offices)
Registrant's telephone number, including area code: (760)741-2111
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Securities registered pursuant to Section 12 (b) of the Act:
Name of Each Exchange
Title of Each Class On Which Registered
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Common Stock, $1.00 Par Value New York Stock Exchange
Preferred Stock Purchase Rights
Class B Preferred Stock, $1.00 Par Value New York Stock Exchange
Class C Preferred Stock, $1.00 Par Value New York Stock Exchange
8.25% Monthly Income Senior Notes,
due 2008 New York Stock Exchange
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Securities registered pursuant to Section 12 (g) of the Act: None
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Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes [ X ] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ X ]
At March 1, 2001 the aggregate market value of the Registrant's shares of
common stock, $1.00 par value, held by non-affiliates of the Registrant was
$653,059,000, at the New York Stock Exchange closing price of $25.27.
As of March 1, 2001, the number of common shares outstanding was
26,612,778, the number of Class B preferred shares outstanding was
2,745,700 and the number of Class C preferred shares outstanding was
1,380,000.
Documents incorporated by reference: Part III, Item 10, 11 and 12
incorporate by reference certain specific portions of the definitive proxy
statement for Realty Income Corporation's Annual Meeting to be held on
May 9, 2001, to be filed pursuant to Regulation 14A. Only those portions
of the proxy statement which are specifically incorporated by reference
herein shall constitute a part of this Annual Report.
FORWARD-LOOKING STATEMENTS
--------------------------
This annual report on Form 10-K, including documents incorporated by
reference, contain forward-looking statements within the meaning of Section
27A of the Securities Act and Section 21E of the Exchange Act. When used
in this annual report, the words estimated, anticipated and similar
expressions are intended to identify forward-looking statements. Forward-
looking statements are subject to risks, uncertainties, and assumptions
about Realty Income Corporation, including, among other things:
- Our anticipated growth strategies;
- Our intention to acquire additional properties;
- Anticipated trends in our business, including trends in the market
for long-term net leases of freestanding, single-tenant retail
properties;
- Future expenditures for development projects; and
- Profitability of our subsidiary, Crest Net Lease, Inc.
Future events and actual results, financial and otherwise, may differ
materially from the results discussed in the forward-looking statements.
In particular, some of the factors that could cause actual results to
differ materially are:
- Our continued qualification as a real estate investment trust;
- General business and economic conditions;
- Competition;
- Interest rates;
Page 2
- Accessibility of debt and equity capital markets; and
- Other risks inherent in the real estate business including tenant
defaults, potential liability relating to environmental matters and
illiquidity of real estate investments.
Additional factors that may cause risks and uncertainties include those
discussed in the sections entitled "Business" and "Management's Discussion
and Analysis of Financial Condition and Results of Operations" in this
annual report.
Readers are cautioned not to place undue reliance on forward-looking
statements, which speak only as of the date that this annual report was
filed with the Securities and Exchange Commission. We undertake no
obligation to publicly release the results of any revisions to these
forward-looking statements that may be made to reflect events or
circumstances after the date of this annual report or to reflect the
occurrence of unanticipated events. In light of these risks and
uncertainties, the forward-looking events discussed in this annual report
might not occur.
Page 3
<TABLE>
REALTY INCOME CORPORATION
Index To Form 10-K
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Page
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PART I
Item 1: Business......................................... 5
Item 2: Properties....................................... 29
Item 3: Legal Proceedings................................ 29
Item 4: Submission of Matters to a
Vote of Security Holders......................... 29
PART II
Item 5: Market for the Registrant's Common
Equity and Related Stockholder Matters........... 30
Item 6: Selected Financial Data.......................... 31
Item 7: Management's Discussion and Analysis
of Financial Condition and Results of
Operations....................................... 33
Item 7A: Quantitative and Qualitative Disclosures about
Market Risk...................................... 45
Item 8: Financial Statements and Supplementary Data...... 47
Item 9: Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure........... 73
PART III
Item 10: Directors and Executive Officers
of the Registrant................................ 73
Item 11: Executive Compensation........................... 73
Item 12: Security Ownership of Certain
Beneficial Owners and Management................. 73
Item 13: Certain Relationships and Related
Transactions..................................... 73
PART IV
Item 14: Exhibits, Financial Statement Schedules
and Reports on Form 8-K.......................... 74
SIGNATURES.................................................... 78
EXHIBIT INDEX................................................. 80
Schedule III: Real Estate and Accumulated Depreciation....... F-1
</TABLE>
Page 4
PART I
======
ITEM 1: BUSINESS
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THE COMPANY
===========
Realty Income Corporation, "The Monthly Dividend Company", a Maryland
corporation ("Realty Income", the "Company", "us", "our" or "we") is
organized to operate as an equity real estate investment trust ("REIT").
We are a fully integrated, self-administered real estate company with in-
house acquisition, leasing, legal, retail and real estate research,
portfolio management and capital markets expertise. As of December 31,
2000, we owned a diversified portfolio of 1,068 retail properties located
in 46 states with over 9.0 million square feet of leasable space leased to
72 different retail chains doing business in 23 separate retail industries.
Of the 1,068 properties in the portfolio, 1,063 are single-tenant retail
properties with the remainder being multi-tenant properties. As of
December 31, 2000, 1,038, or 97.6%, of the 1,063 single-tenant properties
were leased with an average remaining lease term (excluding extension
options) of approximately 7.8 years.
Our primary business objective is to generate dependable monthly dividends
from a consistent and predictable level of funds from operations ("FFO")
per share. Additionally, we seek to increase distributions to stockholders
and FFO per share through both active portfolio management and the
acquisition of additional properties.
Our portfolio management focus includes:
- Contractual rent increases on existing leases;
- Rental increases at the termination of existing leases when market
conditions permit; and
- The active management of our property portfolio, including
selective sales of properties.
Our acquisition of additional properties adheres to a focused strategy of
acquiring primarily:
- Freestanding, single-tenant, retail properties;
- Properties leased to regional and national retail chains; and
- Properties under long-term, net-lease agreements.
We typically acquire, then lease back, retail store locations from chain
store operators, providing capital to the operators for continued expansion
and other corporate purposes. Our acquisitions and investment activities
are concentrated in well-defined target markets and focus generally on
middle-market retailers providing goods and services that satisfy basic
consumer needs.
Our net-lease agreements generally:
- Are for initial terms of 10 to 20 years;
- Require the tenant to pay a minimum monthly rent and property
operating expenses (taxes, insurance and maintenance); and
Page 5
- Provide for future rent increases (typically subject to ceilings)
based on increases in the consumer price index, fixed increases, or
additional rent calculated as a percentage of the tenant's gross
sales above a specified level.
Realty Income commenced operations as a REIT on August 15, 1994 through the
merger of 25 public and private real estate limited partnerships with and
into the Company. Each of the partnerships was formed between 1970 and
1989 for the purpose of acquiring and managing long-term, net-leased
properties.
The five senior officers of the Company, who have each managed our
properties and operations for between three and 15 years, owned 0.8% of the
Company's outstanding common stock with a market value of $5.1 million as
of March 1, 2001. The directors and five senior officers of the Company,
as a group, owned 2.9% of the Company's outstanding common stock with a
market value of $19.2 million as of March 1, 2001.
Realty Income's common stock is listed on The New York Stock Exchange
("NYSE") under the ticker symbol "O". Our central index key ("CIK") number
is 726728 and cusip number is 756109-104.
Realty Income's Class B cumulative redeemable preferred stock is listed on
the NYSE under the ticker symbol "OprB" and its cusip number is 756109-302.
Realty Income's Class C cumulative redeemable preferred stock is listed on
the NYSE under the ticker symbol "OprC" and its cusip number is 756109-500.
Realty Income's 8.25% Monthly Income Senior Notes due 2008 are listed on
the NYSE under the ticker symbol "OUI". The cusip number of these notes is
756109-203.
Realty Income has 49 employees as of March 1, 2001.
RECENT DEVELOPMENTS
===================
Property Acquisitions
During 2000, we acquired 13 additional properties (the "New Properties")
located in nine states. During 2000, we invested $70.0 million in the New
Properties and properties under development, excluding estimated unfunded
development costs at December 31, 2000 of $874,000.
The weighted average annual unleveraged return on the $70.0 million
invested in 2000 is estimated to be 10.8%, computed as estimated
contractual net operating income (which in the case of a net leased
property is equal to the base rent or, in the case of properties under
construction, the estimated base rent under the lease) for the first year
Page 6
of each lease, divided by the estimated total costs. Since it is possible
that a tenant could default on the payment of contractual rent, we cannot
assure you that the actual return on the funds invested will not differ
from the foregoing percentage.
The New Properties will contain approximately 676,100 leasable square feet
and are 100% leased under net leases, with an average initial lease term of
18.3 years. As of December 31, 2000, two of the New Properties were pre-
leased and under construction, pursuant to contracts under which the
tenants have agreed to develop the properties (with development costs
funded by Realty Income) and both begin generating rent in March 2001.
Formation of Crest Net Lease
In January 2000, we acquired 95% of the common stock of Crest Net Lease,
Inc., all of which is non-voting. Certain members of our management and
Crest Net Lease management own 5% of the common stock, all of which is
voting stock. Crest Net Lease was created to buy, own and sell properties,
primarily to buyers using tax-deferred exchanges under Section 1031 of the
Internal Revenue Code of 1986, as amended (the "Code").
During 2000, we invested $8.6 million in Crest Net Lease common stock. In
February 2000, we entered into a $25 million, revolving credit facility
with Crest Net Lease. The financial statements of Crest Net Lease have
been consolidated into Realty Income's financial statements. All material
intercompany transactions have been eliminated in consolidation.
During 2000, Crest Net Lease invested $28.6 million in nine retail
properties. Estimated unfunded development costs on two properties under
construction at December 31, 2000 totaled $1.2 million. These nine
properties will contain approximately 398,100 leasable square feet and were
100% leased, with an average initial lease term of 19.0 years.
During 2000, Crest Net Lease sold two properties for $6.2 million and we
recognized a gain of $766,000, before income taxes. The seven properties
held for sale by Crest Net Lease at December 31, 2000 are anticipated to be
sold within six months.
Sales of Investment Properties
During 2000, we sold or exchanged 21 properties for a total of $45.2
million and recognized a gain of $6.7 million. Included in the 21
properties are two properties leased by one of our tenants that we
exchanged for two other properties owned by that tenant for no gain.
We have an active portfolio management program that incorporates the sale
of assets when we believe the reinvestment of the sales proceeds will
generate higher returns, enhance the credit quality of our real estate
portfolio or extend our average remaining lease term. As of December 31,
Page 7
2000, we classified real estate with a carrying amount of $33.1 million as
held for sale. Additionally, we anticipate selling properties from our
portfolio, which have not yet been specifically identified. We anticipate
we will receive up to $50 million in proceeds from the sale of properties
during the next 12 months. We intend to invest these proceeds into new
property acquisitions.
Stock and Senior Debt Repurchase Program
In January 2000, our Board of Directors authorized the purchase of up to
$10 million of our outstanding common and preferred shares and senior debt
securities. During 2000, we purchased 284,500 shares of our common stock
at an average price of $21.87 per share and 14,300 shares of our Class B
preferred stock at an average price of $19.27 per share, for a total
investment of $6.5 million. The purchases were funded from excess cash
flow.
Increases in Monthly Distributions to Common Stockholders
In April, July and October 2000, and January 2001, the monthly
distributions to common stockholders were increased $0.00125 to $0.18125,
$0.1825, $0.18375 and $0.185 per common share, respectively. We are
committed to our policy of paying monthly distributions to common
stockholders. During 2000, we paid three distributions of $0.18 per common
share, three distributions of $0.18125 per common share, three
distributions of $0.1825 per common share, and three distributions of
$0.18375 per common share. Common stock distributions for 2000 totaled
$2.1825 per share. In December 2000, January 2001 and February 2001, we
declared distributions of $0.185 per common share, which were paid on
January 16, 2001, February 15, 2001 and March 15, 2001, respectively. The
monthly distribution of $0.185 per common share represents a current
annualized distribution of $2.22 per share, and an annualized distribution
yield of approximately 8.8% based on the last reported sale price of our
common stock on the NYSE of $25.27 on March 1, 2001. Although we expect to
continue our policy of paying monthly distributions, there can be no
assurance that the current level of distributions per share will be
maintained by the Company, that we will continue our pattern of increasing
distributions per share, or as to the actual distribution yield for any
future period.
Unsecured Revolving Credit Facilities
We have a $200 million acquisition credit facility that expires in December
2002. In February 2000, we entered into a $25 million, three-year,
revolving unsecured credit facility with the Bank of Montreal, which
expires in February 2003. These credit facilities have been and are
expected to be used for the acquisition of property and for making capital
contributions to subsidiaries for the purpose of acquiring properties.
Page 8
BUSINESS PHILOSOPHY AND STRATEGY
================================
Investment Philosophy
We believe that the long-term ownership of an actively managed, diversified
portfolio of retail properties under long-term, net-lease agreements
produces consistent, predictable income. Under a net-lease agreement, the
tenant agrees to pay a minimum monthly rent and property operating expenses
(taxes, maintenance, and insurance) plus, typically, future rent increases
(generally subject to ceilings) based on increases in the consumer price
index, fixed increases or additional rent calculated as a percentage of the
tenant's gross sales above a specified level. We believe that long-term
leases, coupled with the tenant's responsibility for property expenses,
generally produce a more predictable income stream than many other types of
real estate portfolios, while continuing to offer the potential for growth
in rental income.
Investment Strategy
In identifying new properties for acquisition, we focus on providing
expansion capital to retail chains by acquiring, then leasing back, their
retail store locations. We classify retail tenants into three categories:
venture, middle market, and upper market. Venture companies are those
which typically offer a new retail concept in one geographic region of the
country and operate between five and 50 retail outlets. Middle market
retail chains are those that typically have 50 to 500 retail outlets,
operations in more than one geographic region, have been successful through
one or more economic cycles, and have a proven, replicable concept. The
upper market retail chains typically consist of companies with 500 or more
stores, operating nationally in a proven mature retail concept. Upper
market retail chains generally have strong operating histories and access
to several sources of capital.
Realty Income primarily focuses on acquiring properties leased to middle
market retail chains which we believe are attractive for investment
because:
- They generally have overcome many of the operational and managerial
obstacles that tend to adversely affect venture retailers;
- They typically require capital to fund expansion but have more
limited financing options;
- They generally have provided us with attractive risk-
adjusted returns over time since their financial strength has, in
many cases, tended to improve as their businesses have matured;
- Their relatively large size allows them to spread corporate expenses
across a greater number of stores; and
- Middle market retailers typically have the critical mass to survive
if a number of locations have to be closed due to underperformance.
Page 9
We also focus on and have selectively made investments in properties of
upper market retail chains. We believe upper market retail chains can be
attractive for investment because:
- They typically are of a higher credit quality;
- They are usually larger brand name, public and private retailers;
- They utilize a larger building ranging in size from 10,000 to 50,000
square feet; and
- They are able to grow because access to capital facilitates
larger transaction sizes.
While our investment strategy focuses primarily on acquiring properties
leased to middle and upper market retail chains, we also selectively seek
incremental investment opportunities with venture market retail chains.
Periodically, venture market opportunities arise where we feel that the
real estate used by the tenant is of high quality and can be purchased at
prices that are favorable in the marketplace. To meet our stringent
investment standards, however, venture retail companies must have a well-
defined retailing concept and strong financial prospects. These
opportunities are examined on a case by case basis, and we are highly
selective in making investments in this area.
The Internet has become an important delivery channel for many retail
businesses, and our investment strategy has positioned us to compete in
such an environment. Many research analysts and experts in retail trends
believe that bricks and mortar retail businesses will successfully co-exist
with Internet retail businesses. Many brick and mortar retailers have set
up Internet sale sites to compliment their businesses. We believe that the
companies most vulnerable, and possibly subject to the greatest impact from
the Internet, are retail chains that sell books, consumer electronics,
music, office supplies, and, possibly, pharmaceuticals.
Our exposure to these types of retail chains is minimal. We believe retail
chains that provide services rather than goods, such as child care centers
and auto service stores, as well as those that provide a service with their
products, such as restaurants, convenience stores and home improvement
stores, have tended to be less vulnerable to competition from the Internet
than retailers that only sell goods. Historically, our investment focus
has been on retail industries that have a service component because we
believe the lease revenue from these types of businesses is more stable.
Because of this investment focus, as of January 1, 2001, over 77% of our
annualized revenue is derived from retailers with a service component in
their business. We believe these service-oriented businesses would be
difficult to duplicate over the Internet and, as a result, our property
portfolio should be fairly well positioned for competition from Internet
businesses.
Page 10
Credit Strategy
We principally provide sale-leaseback financing primarily to less than
investment grade retail chains. From 1970 through December 31, 2000, we
have acquired and leased back to regional and national retail chains 1,067
properties (including 51 properties that have been sold) and have collected
approximately 98% of the original contractual rent obligations on those
properties. We believe that within this market we can achieve an
attractive risk-adjusted return on the financing that we provide to
retailers.
We believe that the primary financial obligations of most retailers
typically include their bank and other debt, payment obligations to
suppliers and real estate lease obligations. Because we own the land and
buildings on which the tenant conducts its retail business, we believe that
the risk of default on the retailers' lease obligations is less than the
retailers' unsecured general obligations. It has been our experience that
since retailers must retain their profitable retail locations in order to
survive in the event of reorganization, they are less likely to reject a
lease for a profitable location, which would terminate their right to use
the property. Thus, as the property owner, we believe we will fare better
than unsecured creditors of the same retailer in the event of
reorganization. If a property is rejected by the tenant during the
reorganization, we own the property and can either lease it to a new tenant
or sell the property. In addition, we believe that the risk of default on
the real estate leases can be further mitigated by monitoring the
performance of the retailers' individual unit locations and selling those
units that are weaker performers.
In order to qualify for inclusion in our portfolio, new property
acquisitions must meet stringent investment and credit requirements. The
properties must generate attractive current yields, and the tenant must
meet our credit standards. We have established a three-part analysis that
examines each potential investment based on:
- Industry, company, market conditions and credit profile;
- Location profitability, if profitability data is available; and
- Overall real estate characteristics, value, and comparative rental
rates.
Companies that have been approved for acquisitions are generally those with
fifty or more retail stores which are located in highly visible areas, with
easy access to major thoroughfares and attractive demographics.
Page 11
Acquisition Strategy
We seek to invest in industries in which several, well-organized, regional
and national chains are capturing market share through service, quality
control, economies of scale, mass media advertising, and the selection of
prime retail locations. We execute our acquisition strategy by acting as a
source of capital to regional and national retail chain stores in a variety
of industries by acquiring, then leasing back their retail store locations.
We undertake thorough research and analysis to identify appropriate
industries, tenants, and property locations for investment.
Our research expertise is applied to uncover net-lease opportunities in
markets where our real estate financing program adds value. In selecting
real estate for potential investment, we generally seek to acquire
properties that have the following characteristics:
- Freestanding, commercially zoned property with a single tenant;
- Properties that are important retail locations for regional and
national retail chains;
- Properties that are located within attractive demographic areas
relative to the business of their tenants, with high visibility and
easy access to major thoroughfares; and
- Properties that can be purchased with the simultaneous execution or
assumption of long-term, net-lease agreements, providing the
opportunity for both current income and future rent increases.
Portfolio Management Strategy
The active management of the property portfolio is an essential component
of our long-term strategy. We continually monitor our portfolio for
changes that could affect the performance of the industries, tenants, and
locations in which we have invested. The portfolio is analyzed on an
ongoing basis with a view towards optimizing returns and enhancing the
credit quality of the portfolio. Realty Income's investment committee
meets frequently and is made up of our Chief Executive Officer and two
Executive Vice Presidents. Our investment committee reviews industry
research, tenant research, property due diligence, and significant
portfolio management activities. This monitoring typically includes
ongoing review and analysis of:
- The performance of various retail industries;
- The operation, management, business planning, and financial
condition of the tenants; and
- The health of the individual markets in which we own properties,
from both an economic and real estate standpoint.
We have an active portfolio management program that incorporates the sale
of assets when we believe the reinvestment of the sales proceeds will
generate higher returns, enhance the credit quality of our real estate
portfolio or extend our average remaining lease terms. As of December 31,
Page 12
2000, we classified real estate with a carrying amount of $33.1 million as
held for sale. Additionally, we anticipate selling properties from our
portfolio, which have not yet been specifically identified. We anticipate
we will receive up to $50 million in proceeds from the sale of properties
during the next 12 months. We intend to invest these proceeds into new
property acquisitions.
Capital Markets Strategy
We believe that we are best served by a conservative capital structure,
with a majority of our capital consisting of equity. As of March 1, 2001,
our total outstanding credit facility borrowings and outstanding notes were
$387.3 million or approximately 33.3% of our total capitalization of $1.2
billion (defined as shares of our common stock outstanding multiplied by
the last reported sales price of the common stock on the NYSE on March 1,
2001 of $25.27 per share plus the issuance value of the Class B Preferred
Stock, the Class C Preferred Stock, the outstanding borrowings on the
credit facilities and outstanding notes at March 1, 2001).
We have a $200 million revolving, unsecured acquisition credit facility
that expires in December 2002 and a $25 million revolving, unsecured credit
facility that expires in February 2003. As of March 1, 2001, the
outstanding balance on the $200 million credit facility was $142.9 million
with an effective interest rate of approximately 7.4%. At March 1, 2001,
the outstanding balance on the $25 million credit facility was $14.4
million with an effective interest rate of approximately 7.6%. A
commitment fee of 0.225% per annum accrues on the total credit commitment
of each credit facility. The credit facilities have been and are expected
to be used to acquire additional retail properties leased to regional and
national retail chains under long term net lease agreements. The credit
facilities have also been used to make capital contributions to
subsidiaries for the purpose of funding the acquisition of properties.
We use our credit facilities as a vehicle for the short-term financing of
the acquisition of new properties. When outstanding borrowings under the
$200 million credit facility reach a certain level (generally in the range
of $75 to $175 million) and capital is available on acceptable terms, we
generally seek to refinance those borrowings with the net proceeds of long-
term or permanent financing, which may include the issuance of common
stock, preferred stock, convertible preferred stock, debt securities or
convertible debt securities. We cannot assure you, however, that we will
be able to obtain any such refinancing or that market conditions prevailing
at the time of refinancing will enable us to issue equity or debt
securities upon acceptable terms. We intend to pay off borrowings on our
$25 million credit facility with proceeds from the sale of properties
acquired by us or our subsidiaries.
Page 13
We received investment grade credit ratings from Fitch IBCA Duff & Phelps;
Moody's Investor Service, Inc.; and Standard & Poor's Rating Group in
December 1996. Currently, Fitch IBCA Duff & Phelps has assigned a rating
of BBB, Moody's has assigned a rating of Baa3, and Standard & Poor's has
assigned a rating of BBB- to our senior unsecured debt. These ratings
could change based upon, among other things, our results of operations and
financial condition.
We have also received credit ratings from the same rating agencies on our
preferred stock. Fitch IBCA Duff & Phelps has assigned a rating of BBB-,
Moody's Investor Service, Inc. has assigned a rating of Ba1, and Standard &
Poor's Rating Group has assigned a rating of BB+. These ratings could
change based upon, among other things, our results of operations and
financial condition.
Historically, we have met our long-term capital needs through the issuance
of common stock, preferred stock and investment grade long-term unsecured
debt. We believe the majority of our future securities issuances should be
in the form of common stock. We will issue common stock when we believe
that the share price of our common stock is at a level that allows for the
proceeds of any offering to be invested on an accretive basis into
additional properties or to pay down any short-term borrowings on our
credit facilities. In addition, we seek to maintain a conservative debt
level on our balance sheet, which should result in conservative interest
and fixed charge coverage ratios. We do not anticipate issuing significant
amounts of additional debt until additional equity can also be issued to
offset the increase in debt. If the share price levels do not increase and
we do not issue additional equity or debt, we will reduce our level of
property acquisitions. Under these circumstances, we intend to achieve our
growth objectives by investing excess cash flow in additional retail
properties or purchases of our outstanding securities. In addition, we
intend to strategically sell properties when we believe the investment of
the sale proceeds will generate higher returns or enhance the credit
quality of our property portfolio.
Competitive Strategy
We believe that, to utilize our investment philosophy and strategy most
successfully, we must seek to maintain the following competitive
advantages:
- Size and Type of Investment Properties: We believe that smaller
($500,000 to $10,000,000) retail net-leased properties represent an
attractive investment opportunity in today's real estate environment.
Due to the complexities of acquiring and managing a large portfolio of
relatively small assets, we believe that these types of properties have
not experienced significant institutional participation or the
corresponding yield reduction experienced by larger income producing
properties. We believe the less intensive day to day property
management required by net-lease agreements, coupled with the active
Page 14
management of a large portfolio of smaller properties, is an
effective investment strategy. The tenants of our freestanding retail
properties generally provide goods and services which satisfy basic
consumer needs. In order to grow and expand, they generally need
capital. Since the acquisition of real estate is typically the single
largest capital expenditure of many of these retailers, our method of
purchasing the property and then leasing it back under a net-lease
arrangement allows the retail chain to free up capital.
- Investment in New Retail Industries: Though we specialize in single-
tenant properties, we will seek to further diversify our portfolio
among a variety of retail industries. We believe that diversification
will allow us to invest in retail industries that are currently growing
and have characteristics we find attractive. These characteristics
include, but are not limited to, retail industries dominated by local
operators where regional and national chain operators can gain market
share and dominance through more efficient operations, as well as
industries taking advantage of major demographic shifts in the
population base. As of December 31, 2000, the properties in our
portfolio were leased to retail tenants operating in 23 industries.
- Diversification: Diversification of the portfolio by retail industry
type, tenant and geographic location is key to our objective of
providing predictable investment results for our stockholders. We
continuously seek to further diversify our portfolio. As of
December 31, 2000, the properties in our portfolio were leased to 72
retail chains. These retail chains operate 957 of our properties
located in 46 states.
- Management Specialization: We believe that our management's
specialization in single-tenant retail properties operated under net-
lease agreements is important to meeting our objectives. We plan to
maintain this specialization and will seek to employ and train high-
quality professionals in this specialized area of real estate ownership,
finance and management.
- Technology: We intend to stay at the forefront of technology in our
efforts to efficiently and economically carry out our operations. We
maintain a sophisticated information system that allows us to analyze
our portfolio's performance and actively manage our investments. We
believe that technology and information-based systems will play an
increasingly important role in our competitiveness as an investment
manager and source of capital to a variety of industries and tenants.
Page 15
PROPERTIES
==========
As of December 31, 2000, we owned a diversified portfolio of 1,068
properties located in 46 states with over 9.0 million square feet of
leasable space. In addition to our real estate portfolio, our subsidiary
Crest Net Lease owned seven properties. Our property portfolio is leased
to 72 retail chains doing business in 23 retail industries. At December
31, 2000, 1,038 or 97.2% of the 1,068 properties were under net-lease
agreements. Net leases typically require the tenant to be responsible for
minimum monthly rent and property operating expenses including property
taxes, insurance and maintenance plus, typically, future rent increases
(generally subject to ceilings) based on increases in the consumer price
index, fixed increases or additional rent calculated as a percentage of the
tenant's gross sales above a specified level.
Our net-leased retail properties are primarily leased to regional and
national retail chain store operators. The average leasable retail space
of the 1,068 properties is approximately 8,400 square feet on approximately
60,200 square feet of land. Generally, buildings are single-story
properties with adequate parking on site to accommodate peak retail traffic
periods. The properties tend to be on major thoroughfares with relatively
high traffic counts and adequate access, egress and proximity to a
sufficient population base to constitute a suitable market or trade area
for the retailer's business.
Page 16
The following table sets forth-certain information regarding our properties
classified according to the business of the respective tenants:
<TABLE>
Percentage of Historical Rental Revenue
for the Years Ended (1)
----------------------------------------------------
Dec 31, Dec 31, Dec 31, Dec 31, Dec 31, Dec 31,
Industry 2000 1999 1998 1997 1996 1995
-------------------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Apparel Stores 2.4% 3.8% 4.1% 0.7% --% --%
Automotive Parts 8.3 8.6 7.8 9.1 10.5 11.4
Automotive Service 5.8 6.6 7.5 6.4 4.8 3.7
Book Stores 0.5 0.5 0.6 0.5 -- --
Business Services 0.1 0.1 * -- -- --
Child Care 24.7 25.3 29.2 35.9 42.0 45.6
Consumer Electronics 4.9 4.4 5.4 6.5 0.9 --
Convenience Stores 8.4 7.2 6.1 5.5 4.6 2.4
Craft and Novelty 0.4 0.4 * -- -- --
Drug Stores 0.2 0.2 0.1 -- -- --
Entertainment 2.0 1.2 -- -- -- --
General Merchandise 0.6 0.6 * -- -- --
Grocery Stores 0.6 0.5 * -- -- --
Health and Fitness 2.4 0.6 0.1 -- -- --
Home Furnishings 5.8 6.5 7.8 5.6 4.4 2.9
Home Improvement 2.0 3.6 * -- -- --
Office Supplies 2.3 2.6 3.0 1.7 -- --
Pet Supplies and
Services 1.5 1.1 0.6 0.2 -- --
Private Education 1.4 1.2 0.9 -- -- --
Restaurants 12.3 13.3 16.2 19.8 24.4 24.7
Shoe Stores 0.8 1.1 0.8 0.2 -- --
Theaters 2.7 0.6 -- -- -- --
Video Rental 3.9 4.3 3.8 0.6 -- --
Other 6.0 5.7 6.0 7.3 8.4 9.3
-------------------- ------- ------- ------- ------- ------- -------
Totals 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
==================== ======= ======= ======= ======= ======= =======
</TABLE>
* Less than 0.1%
[FN]
(1) Does not include properties owned by Crest Net Lease which are held
for sale. Crest Net Lease is a subsidiary of Realty Income.
Of the 1,068 properties in the portfolio at January 1, 2001, 1,063 were
single-tenant properties with the remaining properties being multi-tenant
properties. As of January 1, 2001, 1,038 of the 1,063 single-tenant
properties, or 97.6%, were leased with an average remaining lease term
(excluding extension options) of approximately 7.8 years.
Page 17
The following table sets forth certain information regarding the timing of
the initial lease term expirations (excluding extension options) on our
1,038 net leased, single-tenant retail properties as of January 1, 2001
(dollars in thousands).
<TABLE>
Number of Percent of
Leases Annualized Annualized
Year Expiring (1) Rent (1)(2) Rent
------ ------------ -------------- ----------
<S> <C> <C> <C>
2001 77 5,780 5.1%
2002 81 6,672 5.9
2003 73 6,196 5.5
2004 117 10,005 8.9
2005 84 6,457 5.7
2006 28 2,573 2.3
2007 94 6,425 5.7
2008 66 5,766 5.1
2009 31 3,460 3.1
2010 44 3,811 3.4
2011 39 5,837 5.2
2012 49 5,714 5.1
2013 75 12,746 11.3
2014 40 6,597 5.9
2015 37 4,294 3.8
2016 13 1,260 1.1
2017 11 4,130 3.7
2018 16 1,616 1.4
2019 50 8,667 7.7
2020 9 2,920 2.6
2033 2 1,118 1.0
2034 2 570 0.5
------- ---------- -------
Totals 1,038 $112,614 100.0%
======= ========== =======
</TABLE>
[FN]
(1) This table does not include five multi-tenant properties and 25
vacant, unleased single-tenant properties owned by the Company and seven
properties owned by Crest Net Lease. The lease expirations for properties
under construction are based on the estimated date of completion of such
properties.
(2) Annualized Rent is calculated by multiplying the monthly contractual
base rent as of January 1, 2001 for each of the properties by 12 and adding
the previous 12 month's historic percentage rent, which totaled $2.0
million (i.e., additional rent calculated as a percentage of the tenant's
gross sales above a specified level.) For properties under construction,
an estimated contractual base rent based upon the estimated total costs of
each property is used.
</FN>
Page 18
The following table sets forth certain state-by-state information regarding
Realty Income's portfolio at January 1, 2001 (dollars in thousands).
<TABLE>
Approximate Percent of
Number of Percent Leasable Annualized Annualized
State Properties(1) Leased Square Feet Rent(1)(2) Rent
---------- ------------- ------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Alabama 9 100% 120,100 $ 883 0.8%
Alaska 1 100 70,600 285 0.2
Arizona 29 97 182,500 2,753 2.3
Arkansas 5 100 36,700 614 0.5
California 56 98 962,500 13,370 11.3
Colorado 44 100 267,600 3,978 3.4
Connecticut 10 100 223,800 2,983 2.5
Delaware 1 100 5,400 72 0.1
Florida 87 91 966,600 11,854 10.0
Georgia 60 95 428,400 5,675 4.8
Idaho 11 100 52,000 780 0.7
Illinois 35 100 259,100 3,755 3.2
Indiana 29 97 170,400 2,194 1.9
Iowa 10 100 67,900 703 0.6
Kansas 22 100 235,600 2,609 2.2
Kentucky 13 100 43,500 1,105 0.9
Louisiana 5 100 39,600 508 0.4
Maryland 8 100 48,300 747 0.6
Massachusetts 8 100 53,900 1,102 0.9
Michigan 10 100 68,100 986 0.8
Minnesota 25 96 261,500 2,551 2.2
Mississippi 16 100 152,100 1,287 1.1
Missouri 33 100 204,700 2,585 2.2
Montana 2 100 30,000 286 0.2
Nebraska 10 90 98,400 1,091 0.9
Nevada 6 86 81,300 1,253 1.1
New Hampshire 1 100 6,400 133 0.1
New Jersey 4 100 45,400 668 0.6
New Mexico 5 80 46,000 180 0.2
New York 20 100 253,300 4,850 4.1
North Carolina 32 94 171,400 2,829 2.4
North Dakota 1 100 22,000 65 0.1
Ohio 67 100 382,200 5,571 4.7
Oklahoma 17 100 102,200 1,311 1.1
Oregon 19 100 210,800 2,081 1.8
Pennsylvania 23 100 168,300 2,310 2.0
South Carolina 48 100 147,000 3,987 3.4
South Dakota 2 100 12,600 172 0.2
Tennessee 25 96 221,300 2,678 2.3
Texas 154 97 1,284,000 13,961 11.8
(table continued next page)
Page 19
(table continued)
Number of Percent Leasable Annualized Annualized
State Properties(1) Leased Square Feet Rent(1)(2) Rent
---------- ------------- ------- ----------- ---------- ----------
Utah 8 88 51,700 634 0.5
Virginia 30 97 268,900 4,601 3.9
Washington 43 100 284,500 3,492 3.0
West Virginia 2 100 16,800 158 0.1
Wisconsin 18 100 167,700 2,057 1.7
Wyoming 4 100 20,100 265 0.2
------ ------ --------- ---------- -------
Totals/Average 1,068 98% 9,013,200 $118,012 100.0%
====== ====== ========= ========== =======
</TABLE>
[FN]
(1) Does not include seven properties owned by Crest Net Lease which are
held for sale. Crest Net Lease is a subsidiary of Realty Income
Corporation.
(2) Annualized rent is calculated by multiplying the monthly contractual
base rent as of January 1, 2001 for each of the properties by 12 and adding
the previous 12 month's historic percentage rent, which totaled $2.0
million (i.e., additional rent calculated as a percentage of the tenant's
gross sales above a specified level). For the properties under
construction, an estimated contractual base rent based upon the estimated
total costs of each property is used.
</FN>
Page 20
The following table sets forth certain information regarding the properties
owned by Realty Income as of January 1, 2001, classified according to the
business of the respective tenants (dollars in thousands).
<TABLE> Percent of
Number of Annualized Annualized
Industry Properties (1) Rent (1)(2) Rent
-------- ------------- ------------ ----------
<S> <C> <C> <C>
Tenants providing services
--------------------------
Automotive Service 100 $ 6,814 5.8%
Child Care 333 28,868 24.5
Entertainment 6 1,808 1.5
Health and Fitness 7 3,940 3.4
Private Education 6 1,703 1.4
Theaters 10 5,209 4.4
Other 9 6,868 5.8
---------- ---------- ----------
471 55,210 46.8
---------- ---------- ----------
Tenants selling goods and services
----------------------------------
Automotive Parts 63 5,505 4.7
Business Services 1 124 0.1
Convenience Stores 103 9,885 8.4
Home Improvement 15 187 0.2
Pet Supplies and Services 6 1,231 1.0
Restaurants 172 14,170 12.0
Video Rental 35 4,510 3.8
---------- ---------- ----------
395 35,612 30.2
---------- ---------- ----------
Tenants selling goods
---------------------
Apparel Stores 4 2,799 2.4
Automotive Parts 78 4,483 3.8
Book Stores 2 572 0.5
Consumer Electronics 37 4,982 4.2
Craft and Novelty 2 425 0.4
Drug Stores 1 235 0.2
General Merchandise 11 687 0.6
Grocery Stores 2 726 0.6
Home Furnishings 38 7,070 6.0
Home Improvement 13 1,377 1.1
Office Supplies 8 2,476 2.1
Pet Supplies 2 468 0.4
Shoe Stores 4 890 0.7
---------- ---------- ----------
202 27,190 23.0
---------- ---------- ----------
TOTALS 1,068 $ 118,012 100.0%
========== ========== ==========
</TABLE> Page 21
[FN]
(1) Does not include seven properties owned by Crest Net Lease which are
held for sale. Crest Net Lease is a subsidiary of Realty Income
Corporation.
(2) Annualized rent is calculated by multiplying the monthly contractual
base rent as of January 1, 2001 for each of the properties by 12 and adding
the previous 12 month's historic percentage rent, which totaled $2.0
million (i.e., additional rent calculated as a percentage of the tenant's
gross sales above a specified level). For the properties under
construction, an estimated contractual base rent based upon the estimated
total costs of each property is used.
</FN>
Description of Leasing Structure
At December 31, 2000, 1,038 or 97.2% of the Company's 1,068 properties were
leased pursuant to net leases. In most cases, the leases:
1. Were for initial terms of from 10 to 20 years with the tenant having an
option to extend the initial term;
2. Require the tenant to pay property taxes, insurance, and expenses of
maintaining the property;
3. Provide for a minimum base rent plus future increases (typically
subject to ceilings) based on increases in the consumer price index,
additional rent based upon the tenant's gross sales above a specified level
(i.e., percentage rent) or fixed increases. Where leases provide for rent
increases based on increases in the consumer price index, generally these
increases permanently become part of the base rent. Where leases provide
for percentage rent, this additional rent is typically payable only if the
tenant's gross sales for a given period (usually one year) exceed a
specified level, and then is typically calculated as a percentage of only
the amount of gross sales in excess of that level.
Matters Pertaining to Certain Properties and Tenants
----------------------------------------------------
Twenty-five of our properties were available for lease as of January 1,
2001, all of which are single-tenant properties. Two of the properties had
been previously leased to an automotive service facility operator, four to
a child care operator, one to an entertainment facility operator, one to a
home furnishings store operator, 13 to home improvement operators, three to
restaurant operators and one to a shoe store operator. As of January 1,
2001, 17 of our properties under lease were available for sublease by the
tenants, all of which were current with their rent and other obligations.
Page 22
Our two largest tenants are Children's World Learning Centers and La Petite
Academy, which accounted for approximately 12.7% and 10.6%, respectively,
of our rental revenue for the year ended December 31, 2000. No other
tenant comprised 10% or more of our rental revenue. In general, a downturn
in the industry represented by these tenants, whether nationwide or limited
to specific sectors of the United States, could adversely affect tenants in
this industry, which in turn could materially adversely affect our
financial position and results of operations and our ability to make
distributions to stockholders and debt service payments. In addition, a
substantial number of our properties are leased to middle market retail
chains which generally have more limited financial and other resources than
certain upper market retail chains, and therefore are more likely to be
adversely affected by a downturn in their respective business or in the
regional or national economy generally.
Our tenants in the child care and restaurant industries accounted for
approximately 24.7% and 12.0%, respectively, of our rental revenue for the
year ended December 31, 2000. A downturn in any of these industries
generally, whether nationwide or limited to specific sectors of the United
States, could adversely affect tenants in those industries, which in turn
could materially adversely affect our financial position and results of
operations and our ability to make distributions to stockholders and debt
service payments.
During the first half of 2000 we successfully resolved a situation involving
the vacancy of 11 of our 34 properties leased to Econo Lube 'N Tune. This
situation had nominal impact on our operating results during 2000. We
believe we will complete the re-leasing of the remaining two properties
during the first half of 2001 and will ultimately obtain 90% or more of the
lease revenue previously derived from Econo Lube 'N Tune.
During the last six months, we made progress in the re-lease of the 21
properties formerly occupied by Flooring America that became vacant during
the third quarter of 2000. As of March 1, 2001, transactions were underway
or completed on 11 of the 21 properties, which leaves us with just 10
properties to be re-leased or sold. The Flooring America stores are
generally in excellent retail locations that lend themselves to a wide
variety of retail uses. In addition, the rents previously received on these
properties were mainly at prevailing market rents. We believe we will
complete the re-leasing of the remaining 10 properties during the first half
of 2001 and will ultimately obtain 90% or more of the lease revenue
previously derived from Flooring America.
Development of Certain Properties
Of the 13 properties we acquired in 2000 and nine properties acquired by
Crest Net Lease in 2000, all but one were occupied as of March 1, 2001.
The remaining property was pre-leased and under construction pursuant to a
contract under which the tenant has agreed to develop the properties (with
development costs funded by Crest Net Lease) with rent commencing when the
premises open for business. In the case of development properties, we
Page 23
either enter into an agreement with a retail chain where the retailer
retains a contractor to construct the improvements and we fund the costs of
that development, or we fund a developer who constructs the improvements.
In either case, there is an executed lease and there is a requirement to
complete the construction on a timely basis, generally within eight months
after we purchase the land. Generally, the tenant or developer is required
to pay construction cost overruns to the extent they exceed the
construction budget by more than a predetermined amount. We also enter
into a lease with the tenant at the time we purchase the land, which
generally requires that the tenant begin paying base rent, calculated as a
percentage of our acquisition cost for the property, including construction
costs and capitalized interest, when the premises open for business.
During 2000, we acquired two development properties, and Crest Net Lease
acquired two development properties, three of which have been completed,
were operating and generating rent as of March 1, 2001. Both Realty Income
and Crest Net Lease will continue to seek to acquire land for development
under similar arrangements.
DISTRIBUTION POLICY
===================
Distributions are paid to our common stockholders and Class C Preferred
stockholders on a monthly basis and paid to our Class B Preferred
stockholders on a quarterly basis if, as and when declared by our Board of
Directors. The Class B Preferred stockholders receive cumulative
distributions at a rate of 9.375% per annum on the $25 per share
liquidation preference (equivalent to $2.3436 per annum per share). The
Class C Preferred stockholders receive cumulative distributions at a rate
of 9.5% per annum on the $25 per share liquidation preference (equivalent
to $2.3748 per annum per share).
The March 2001 distribution of $0.185 per common share represents a current
annualized distribution of $2.22 per share, and an annualized distribution
yield of approximately 8.8% based on the last reported sale price of $25.27
of our common stock, on the NYSE on March 1, 2001. In order to maintain
our tax status as a REIT for federal income tax purposes, we are generally
required to distribute dividends to our stockholders aggregating annually
at least 95% (90% beginning in 2001) of our REIT taxable income (determined
without regard to the dividends paid deduction and by excluding net capital
gains). In 2000, our distributions totaled approximately 119.0% of our
REIT taxable income. We intend to continue to make distributions to our
stockholders that are sufficient to meet this requirement.
Future distributions by us will be at the discretion of our Board of
Directors and will depend on, among other things, our results of
operations, financial condition and capital requirements, the annual
distribution requirements under the REIT provisions of the Code, our debt
service requirements and other factors as the Board of Directors may deem
relevant. In addition, our credit facilities contain financial covenants
which could limit the amount of distributions payable by us in the event of
Page 24
a deterioration in the results of operations or financial condition of the
Company, and which prohibit the payment of distributions on the common or
preferred stock in the event that we fail to pay when due (subject to any
applicable grace period) any principal or interest on borrowings under our
credit facilities.
Distributions by us to the extent of our current and accumulated earnings
and profits for federal income tax purposes generally will be taxable to
stockholders as ordinary income. Distributions in excess of earnings and
profits generally will be treated as a non-taxable reduction in the
stockholders' basis in its stock to the extent of that basis, and
thereafter as a capital gain. Approximately 19.0% of the distributions
made or deemed to have been made in 2000 were classified as a return of
capital for federal income tax purposes. We are unable to predict the
portion of 2001 or future distributions that may be classified as a return
of capital since the amount depends on our taxable income for the entire
year.
OTHER ITEMS
===========
Competition for Acquisition of Real Estate
We face competition in the acquisition, operation and sale of property. We
expect competition from:
- Businesses;
- Individuals;
- Fiduciary accounts and plans; and
- Other entities engaged in real estate investment.
Some of these competitors are larger than we are and have greater financial
resources. This competition may result in a higher cost for properties
that we wish to purchase.
The tenants leasing our properties generally face significant competition
from other operators. This competition may adversely impact:
- That portion, if any, of the rental stream to be paid to us based on
a tenant's revenues; and
- The tenants' results of operations or financial condition.
Environmental Liabilities
Investments in real property can create a potential for environmental
liability. An owner of property can face liability for environmental
contamination created by the presence or discharge of hazardous substances
on the property. We face such liability regardless of:
- Our knowledge of the contamination;
- The timing of the contamination;
Page 25
- The cause of the contamination; or
- The party responsible for the contamination of the property.
We are not aware of any material environmental problems at this time;
however, there may be environmental problems associated with our properties
of which we are unaware. In that regard, a number of our properties are
leased to operators of oil change and tune-up facilities, and convenience
stores that sell petroleum-based fuels. These facilities, or other of our
properties, use, or may have used in the past, underground tanks for the
storage of petroleum-based or waste products which could create a potential
for release of hazardous substances.
The presence of hazardous substances on a property may adversely affect our
ability to sell that property, and we may incur substantial remediation
costs. Although our leases generally require our tenants to operate in
compliance with all applicable federal, state and local laws, ordinances
and regulations and to indemnify us against any environmental liabilities
arising from the tenants' activities on the property, we could nevertheless
be subject to strict liability by virtue of our ownership interest, and
there can be no assurance that our tenants would satisfy their
indemnification obligations under the leases.
We believe that our properties comply in all material respects with all
federal, state and local laws, ordinances and regulations regarding
hazardous or toxic substances or petroleum products.
We have not been notified by any governmental authority, and are not
otherwise aware, of any material noncompliance, liability or claim relating
to hazardous or toxic substances or petroleum products in connection with
any of our present properties. Nevertheless, if environmental
contamination should exist, we could be subject to strict liability by
virtue of our ownership interest.
Since December 1996, the Company has maintained an environmental insurance
policy on the property portfolio. The limit of the policy is $5 million
per occurrence and $25 million in the aggregate, subject to a $100,000 self
insured retention per occurrence. There is a sublimit on properties with
underground storage tanks of $1 million per occurrence and $5 million in
the aggregate, subject to a $25,000 self insured retention per occurrance.
Taxation of the Company
We believe that we have operated, and we intend to continue to operate, so
as to qualify as a REIT under Sections 856 through 860 of the Code,
commencing with our taxable year ended December 31, 1994. Although we
believe that we are in compliance with all REIT qualification rules and we
are organized and operate as a REIT, we can not completely assure you that
we will continue to be so organized or that we will be able to operate in a
manner so as to qualify or remain so qualified.
Page 26
Qualification as a REIT involves the satisfaction of numerous requirements
under highly technical and complex Code provisions for which there are only
limited judicial and administrative interpretations, and the determination
of various factual matters and circumstances not entirely within our
control.
We cannot assure you that legislation, new regulations, administrative
interpretations or court decisions will leave unchanged the tax laws with
respect to qualification as a REIT or the federal income tax consequences
of that qualification.
If we were to fail to qualify as a REIT in any taxable year:
- We would be subject to federal income tax (including any applicable
alternative minimum tax) on our taxable income at regular corporate
rates;
- We would not be allowed a deduction in computing our taxable income
for amounts distributed to our stockholders;
- We would be disqualified from treatment as a REIT for the four
taxable years following the year during which qualification is lost.
This treatment would substantially reduce our net earnings available
for investment or distribution to stockholders because of the
additional tax liability for the years involved; and
- We would no longer be required to make distributions to
stockholders.
Even if we qualify for and maintain our REIT status, we are subject to
certain federal, state and local taxes on our income and property. For
example, if we have net income from a prohibited transaction, that income
will be subject to a 100% tax. Our subsidiary Crest Net Lease is subject
to federal and states taxes at the applicable tax rates on its income and
property.
Effect of Distribution Requirements
To maintain our status as a REIT for federal income tax purposes, we
generally are required to distribute to our stockholders at least 95% (90%
beginning in 2001) of our taxable income each year. This taxable income is
determined without regard to the dividends paid deduction and by excluding
net capital gains.
We are also subject to tax at regular corporate rates to the extent that we
distribute less than 100% of our taxable income (including net capital
gains) each year.
In addition, we are subject to a 4% nondeductible excise tax on the amount,
if any, by which certain distributions paid by us with respect to any
calendar year are less than the sum of 85% of our ordinary income for that
calendar year, 95% of our capital gain net income for the calendar year,
and any amount of that income that was not distributed in prior years.
Page 27
We intend to continue to make distributions to our stockholders to comply
with the distribution requirements of the Code and to reduce exposure to
federal income taxes and the nondeductible excise tax.
Differences in timing between the receipt of income and the payment of
expenses in arriving at taxable income and the effect of required debt
amortization payments could require us to borrow funds on a short-term
basis to meet the distribution requirements that are necessary to achieve
the tax benefits associated with qualifying as a REIT.
Dilution of Common Stock
Our future growth will depend in large part upon our ability to raise
additional capital. If we were to raise additional capital through the
issuance of equity securities, we could dilute the interests of holders of
common stock. Likewise, our Board of Directors is authorized to cause us to
issue preferred stock of any class or series (with dividend, voting and
other rights as determined by the Board of Directors). Accordingly, the
Board of Directors may authorize the issuance of preferred stock with
voting, dividend and other similar rights that could dilute, or otherwise
adversely affect, the interests of holders of Common Stock.
Real Estate Ownership Risks
We are subject to all of the general risks associated with the ownership of
real estate. In particular, we face the risk that rental revenue from the
properties will be insufficient to cover all corporate operating expenses
and debt service payments on indebtedness we incur. Additional real estate
ownership risks include:
- Adverse changes in general or local economic conditions;
- Changes in supply of or demand for similar or competing properties;
- Changes in interest rates and operating expenses;
- Competition for tenants;
- Changes in market rental rates;
- Inability to lease properties upon termination of existing leases;
- Renewal of leases at lower rental rates;
- Inability to collect rents from tenants due to financial hardship,
including bankruptcy, and sales declines due to the impact from
Internet commerce;
- Changes in tax, real estate, zoning and environmental laws that may
have an adverse impact upon the value of real estate;
- Uninsured property liability;
- Property damage or casualty losses;
- Unexpected expenditures for capital improvements or to bring
properties into compliance with applicable federal, state and local
laws; and
- Acts of God and other factors beyond the control of our management.
Page 28
Dependence On Key Personnel
We depend on the efforts of our executive officers and key employees. The
loss of the services of our executive officers and key employees could have
a material adverse effect on our operations.
ITEM 2: PROPERTIES
-------------------
Information pertaining to our properties can be found under Item 1.
ITEM 3: LEGAL PROCEEDINGS
--------------------------
The Company is subject to certain claims and lawsuits, the outcome of which
are not determinable at this time. In the opinion of management, any
liability that might be incurred by the Company upon the resolution of
these claims and lawsuits will not, in the aggregate, have a material
adverse effect on the Company's consolidated financial statements taken as
a whole.
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
------------------------------------------------------------
No matters were submitted to stockholders during the fourth quarter of the
fiscal year.
Page 29
PART II
=======
ITEM 5: MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
----------------------------------------------------------
A. The common stock of the Company is traded on the New York Stock
Exchange under the ticker symbol "O." The following table shows the high
and low sales prices per share for our common stock as reported by the New
York Stock Exchange composite tape, and distributions declared per share of
common stock by us for the periods indicated.
<TABLE> Price Per Share
of Common Stock
------------------- Distributions
2000 High Low Declared (1)
-----------------------------------------------------------------
<S> <C> <C> <C>
First quarter $22.0000 $19.2500 $0.54125
Second quarter 24.6250 19.3750 0.54500
Third quarter 24.5000 22.1250 0.54875
Fourth quarter 25.5000 22.5000 0.55250
--------
$2.18750
========
</TABLE>
[FN]
(1) Common stock distributions currently are declared monthly by us based
on financial results for the prior months. At December 31, 2000 a
distribution of $0.185 per common share had been declared and was paid on
January 16, 2001.
</FN>
<TABLE> Price Per Share
of Common Stock
------------------- Distributions
1999 High Low Declared
-----------------------------------------------------------------
<S> <C> <C> <C>
First quarter $24.8750 $20.3750 $0.5125
Second quarter 25.0000 20.8125 0.5200
Third quarter 24.3125 22.3125 0.5275
Fourth quarter 23.6250 20.0000 0.5350
-------
$2.0950
=======
</TABLE>
B. There were approximately 12,800 holders of record of Realty Income's
shares of common stock as of March 1, 2001.
Page 30
ITEM 6: SELECTED FINANCIAL DATA
--------------------------------
(not covered by Independent Auditors' Report)
<TABLE> As of or for the years ended December 31,
(dollars in thousands, except per share data)
--------------------------------------------------
2000 1999 1998 1997 1996
========== ========== ========== ========== ==========
<S> <C> <C> <C> <C> <C>
Total assets
(book value) $ 934,766 $ 905,404 $ 759,234 $ 577,021 $ 454,097
Cash and cash
equivalents 3,815 773 2,533 2,123 1,559
Lines of credit and
notes payable 404,000 349,200 294,800 132,600 70,000
Total
liabilities 419,197 370,573 309,025 143,706 79,856
Stockholders'
equity 515,569 534,831 450,209 433,315 374,241
Net cash provided
by operating
activities 56,590 72,154 64,645 52,692 48,073
Net change in
cash and cash
equivalents 3,042 (1,760) 410 564 (91)
Total revenue 118,310 104,510 85,132 67,897 56,957
Income from
operations 48,076 45,295 41,004 33,688 30,768
Gain on sales
of properties 6,712 1,301 526 1,082 1,455
Extraordinary item -- (355) -- -- --
Cumulative effect of
change in accounting
principle -- -- (226) -- --
Net income 54,788 46,241 41,304 34,770 32,223
Preferred stock
dividends (9,712) (5,229) -- -- --
Net income available
to common
stockholders 45,076 41,012 41,304 34,770 32,223
Distributions
paid to common
stockholders 58,262 55,925 52,301 44,367 48,079
(table continued on next page)
Page 31
(table continued)
As of or for the years ended December 31,
(dollars in thousands, except per share data)
--------------------------------------------------
2000 1999 1998 1997 1996
========== ========== ========== ========== ==========
Ratio of earnings to
fixed charges (1) 2.6x 2.7x 3.8x 5.1x 13.7x
Ratio of earnings to
combined fixed
charges and
preferred stock
dividends (1) 2.0x 2.3x 3.8x 5.1x 13.7x
Basic and diluted
net income per
common share 1.69 1.53 1.55 1.48 1.40
Distributions
paid per common
share (2) 2.1825 2.085 1.965 1.893 2.093
Distributions
declared per common
share 2.1875 2.095 1.975 1.895 1.710
Basic weighted
average number
of common shares
outstanding 26,684,598 26,822,285 26,629,936 23,568,831 22,976,789
Diluted weighted
average number
of common shares
outstanding 26,700,806 26,826,090 26,638,284 23,572,715 22,977,837
</TABLE>
[FN]
(1) Ratio of Earnings to Fixed Charges is calculated by dividing earnings
by fixed charges. For this purpose, earnings consist of net income before
interest expense. Fixed charges are comprised of interest costs (including
capitalized interest) and the amortization of debt issuance costs.
(2) 1996 distributions paid per common share includes a special
distribution of $0.23 per share.
</FN>
Page 32
ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
----------------------------------------------------------
GENERAL
-------
Realty Income Corporation, "The Monthly Dividend Company", a Maryland
corporation ("Realty Income", the "Company", "us", "we" or "our") is
organized to operate as an equity real estate investment trust ("REIT").
We are a fully integrated self-administered real estate company with in-
house acquisition, leasing, legal, retail research, real estate research,
portfolio management and capital markets expertise. As of December 31,
2000, we owned a diversified portfolio of 1,068 retail properties located
in 46 states with over 9.0 million square feet of leasable space.
Our primary business objective is to generate dependable monthly dividends
from a consistent and predictable level of funds from operations ("FFO")
per share. Additionally, we generally will seek to increase distributions
to stockholders and FFO per share through both active portfolio management
and the acquisition of additional properties.
LIQUIDITY AND CAPITAL RESOURCES
-------------------------------
Cash Reserves
Realty Income is organized for the purpose of operating as an equity REIT
which acquires and leases properties and distributes to stockholders, in
the form of monthly cash distributions, a substantial portion of its net
cash flow generated from leases on its retail properties. We intend to
retain an appropriate amount of cash as working capital. At December 31,
2000, we had cash and cash equivalents totaling $3.8 million.
We believe that our cash and cash equivalents on hand, cash provided from
operating activities and borrowing capacity are sufficient to meet our
liquidity needs for the foreseeable future. We intend, however, to use
additional sources of capital to fund property acquisitions and to repay
our credit facilities.
Capital Funding
We have a $200 million, three-year revolving, unsecured acquisition credit
facility that expires in December 2002 and a $25 million, three-year
revolving, unsecured credit facility that expires in February 2003. The
credit facilities currently bear interest at 1.225% over the London
Interbank Offered Rate, or LIBOR, and offer us other interest rate options.
As of March 1, 2001, borrowing capacity of $67.7 million was available on
our credit facilities. At that time, the outstanding balance on the credit
facilities was $157.3 million with an effective interest rate of 7.4%.
Page 33
These credit facilities have been and are expected to be used to acquire
additional retail properties leased to national and regional retail chains
under long-term lease agreements. Any additional borrowings will increase
our exposure to interest rate risk.
In June 1999, we filed a universal shelf registration statement with the
Securities and Exchange Commission covering up to $400 million in value of
common stock, preferred stock and debt securities. Through March 1, 2001,
we have issued $34.5 million of common stock, preferred stock and debt
securities under the universal shelf registration statement.
We believe that our shareholders are best served by a conservative capital
structure. As of March 1, 2001, our total outstanding credit facility
borrowings and outstanding notes were $387.3 million or approximately 33.3%
of our total capitalization of $1.2 billion (defined as shares of our
common stock outstanding multiplied by the last reported sales price of the
common stock on the NYSE on March 1, 2001 of $25.27 per share plus the
liquidation value of the Class B Preferred Stock, the Class C Preferred
Stock, the outstanding borrowings on the credit facilities and outstanding
notes at March 1, 2001).
Historically, we have met our long-term capital needs through the issuance
of common stock, preferred stock and investment grade long-term unsecured
debt. We believe that the Company should have the majority of its future
issuances of securities be in the form of common stock. We will issue
common stock when we believe that the share price of our common stock is at
a level that allows for the proceeds of any offering to be invested on an
accretive basis into additional properties or to pay down any short-term
borrowings on our credit facilities. In addition, we seek to maintain a
conservative debt level on our balance sheet, which should result in solid
interest and fixed charge coverage ratios. We do not anticipate issuing
significant amounts of additional debt until additional equity can also be
issued to offset the increase in debt. If the share price levels do not
increase and we do not issue additional equity or debt, we will reduce our
level of property acquisitions. Under these circumstances, we intend to
achieve our growth objectives by investing excess cash flow in additional
retail properties and repurchases of our outstanding securities. In
addition, we intend to strategically sell properties when we believe the
investment of the sale proceeds will generate higher returns or enhance the
credit quality of our property portfolio.
We received investment grade corporate credit ratings on our senior
unsecured debt from Fitch IBCA Duff & Phelps; Moody's Investor Service,
Inc.; and Standard & Poor's Rating Group in December 1996. Currently,
Fitch IBCA Duff & Phelps has assigned a rating of BBB, Moody's has assigned
a rating of Baa3, and Standard & Poor's has assigned a rating of BBB- to
our senior debt. These ratings could change based upon, among other
things, our results of operations and financial condition.
We have also received credit ratings from the same rating agencies on our
preferred stock. Fitch IBCA Duff & Phelps has assigned a rating of BBB-,
Moody's Investor Service, Inc. has assigned a rating of Ba1, and Standard &
Page 34
Poor's Rating Group has assigned a rating of BB+. These ratings could
change based upon, among other things, our results of operations and
financial condition.
Stock and Senior Debt Repurchase Program
In January 2000, our Board of Directors authorized the purchase of up to
$10 million of our outstanding common and preferred shares and senior debt
securities. During 2000, we purchased 284,500 shares of our common stock
at an average price of $21.87 and 14,300 shares of our Class B preferred
stock at an average price of $19.27, for a total investment of $6.5
million. The purchases were funded from excess cash flow.
Property Acquisitions
During 2000, we acquired 13 additional properties (the "New Properties")
located in nine states. During 2000, we invested $70.0 million in the New
Properties, which includes investments of $16.8 million for properties
under development during 2000. Estimated unfunded development costs on
properties under construction at December 31, 2000 totaled $874,000.
During 2000, we capitalized $308,000 for re-leasing costs and $90,000 for
building improvements on existing properties in our portfolio.
The weighted average annual unleveraged return on the $70.1 million
invested in 2000 is estimated to be 10.8%, computed as estimated
contractual net operating income (which in the case of a net leased
property is equal to the base rent or, in the case of properties under
construction, the estimated base rent under the lease) for the first year
of each lease, divided by the estimated total costs. Since it is possible
that a tenant could default on the payment of contractual rent, we cannot
assure you that the actual return on the funds invested will not differ
from the foregoing percentage.
The New Properties will contain approximately 676,100 leasable square feet
and are 100% leased under net leases, with an average initial lease term of
18.3 years. As of December 31, 2000, two of the New Properties are pre-
leased and under construction, pursuant to contracts under which the
tenants have agreed to develop the properties (with development costs
funded by Realty Income) and both began paying rent in March 2001.
During 1999, we acquired 110 additional properties (the "1999 Properties")
and invested $181.4 million in the 1999 Properties and properties under
development. During 1999, we also paid $242,000 for lease commissions and
$148,000 for building improvements on existing properties in our portfolio.
The weighted average annual unleveraged return on the $181.4 million
invested in 1999 is estimated to be 10.5%, computed in the same manner as
2000's estimated weighted average annual unleveraged return. These 110
properties contain approximately 948,000 leasable square feet and are 100%
leased under net leases, with an average initial lease term of 17.4 years.
Page 35
Formation of Crest Net Lease
In January 2000, we acquired 95% of the common stock of Crest Net Lease,
Inc., all of which is non-voting. Certain members of our management and
Crest Net Lease management own 5% of the common stock, all of which is
voting stock. Crest Net Lease was created to buy, own and sell properties,
primarily to buyers using tax-deferred exchanges, under Section 1031 of the
Internal Revenue Code of 1986, as amended.
During 2000, we invested $8.6 million in Crest Net Lease common stock. In
February 2000, we entered into a $25 million, revolving credit facility
with Crest Net Lease. The financial statements of Crest Net Lease have
been consolidated into Realty Income's financial statements. All material
intercompany transactions have been eliminated in consolidation.
During 2000, Crest Net Lease invested $28.6 million in nine retail
properties. Estimated unfunded development costs on two properties under
construction at December 31, 2000 totaled $1.2 million. These nine
properties will contain approximately 398,100 leasable square feet and were
100% leased, with an average initial lease term of 19.0 years.
During 2000, Crest Net Lease sold two properties for $6.2 million and we
recognized a gain of $766,000, before income taxes. The seven properties
held for sale by Crest Net Lease at December 31, 2000 are anticipated to be
sold within six months.
The following is a summary of Crest Net Lease's balance sheet as of
December 31, 2000 (dollars in thousands):
<TABLE>
<S> <C>
Real estate held for sale $ 23,619
Other assets 284
--------
Total assets $ 23,903
========
Liabilities $ 14,390
Stockholders' equity 9,513
--------
Total liabilities and
stockholders' equity $ 23,903
========
</TABLE>
Page 36
The following is a summary of Crest Net Lease's statement of net income for
the year ended December 31, 2000 (dollars in thousands):
<TABLE>
Year
ended
12/31/00
-------
<S> <C>
Rent & other revenue $ 1,874
Expenses 1,029
Income taxes 332
-------
Net income $ 513
=======
</TABLE>
Distributions
We pay monthly distributions to our common stockholders. We paid cash
distributions to our common stockholders of $58.3 million in 2000, $55.9
million in 1999 and $52.3 million in 1998.
We pay quarterly distributions to our Class B preferred stockholders. We
paid cash distributions to our Class B preferred stockholders of $6.4
million in 2000 and $3.9 million in 1999. Our Class B preferred stock was
issued in May 1999.
We pay monthly distributions to our Class C preferred stockholders. We
paid cash distributions to our Class C preferred stockholders of $3.3
million in 2000 and $1.4 million in 1999. Our Class C preferred stock was
issued in July 1999.
FUNDS FROM OPERATIONS ("FFO")
-----------------------------
FFO for 2000 increased by $1.3 million or 2.0% to $67.2 million versus
$65.9 million during 1999. FFO during 1998 was $62.8 million. The
following is a reconciliation of net income available to common
stockholders to FFO and information regarding distributions paid and the
diluted weighted average number of shares outstanding for 2000, 1999 and
1998 (dollars in thousands):
Page 37
<TABLE> 2000 1999 1998
-------- -------- --------
<S> <C> <C> <C>
Net income available to common
stockholders $ 45,076 $ 41,012 $ 41,304
Plus:
Depreciation and amortization 29,003 25,952 21,935
Extraordinary item -- 355 --
Cumulative effect of change in
accounting principle -- -- 226
Less:
Depreciation of furniture, fixtures
and equipment and amortization of
organization costs (128) (101) (140)
Gain on sales of investment
properties (6,712) (1,301) (526)
-------- -------- --------
Funds from operations $ 67,239 $ 65,917 $ 62,799
======== ======== ========
Distributions paid to
common stockholders $ 58,262 $ 55,925 $ 52,301
FFO in excess of distributions
to common stockholders $ 8,977 $ 9,992 $ 10,498
Diluted weighted average
number of shares outstanding 26,700,806 26,826,090 26,638,284
</TABLE>
We consider FFO to be an appropriate measure of the performance of an
equity REIT. Financial analysts use FFO in evaluating REITs and FFO can be
one measure of a REIT's ability to make cash distribution payments.
Presentation of this information provides the reader with an additional
measure to compare the performance of different REITs, although it should
be noted that not all REITs calculate FFO the same way so comparisons with
other REITs may not be meaningful.
We define FFO as net income available to common stockholders, plus
depreciation and amortization of assets uniquely significant to the real
estate industry, reduced by gains and increased by losses on (i) sales of
investment property and (ii) extraordinary and "unusual" items.
FFO is not necessarily indicative of cash flow available to fund cash needs
and should not be considered as an alternative to net income as an
indication of Realty Income's performance. In addition, FFO should not be
considered as an alternative to reviewing our cash flows from operating,
investing, and financing activities as a measure of liquidity, of our
ability to make cash distributions or our ability to pay interest payments.
Page 38
RESULTS OF OPERATIONS
---------------------
The Following is a Comparison of Our Results of Operations for the Year
Ended December 31, 2000 to the Year Ended December 31, 1999.
Revenue
Rental revenue was $117.2 million for 2000 versus $104.3 million for 1999,
an increase of $12.9 million, or 12.4%. The increase in rental revenue was
primarily due to the acquisition of 110 properties during 1999. These
properties generated revenue of $15.4 million in 2000 compared to $6.9
million in 1999, an increase of $8.5 million. Included in rental revenue
for 2000 is $1.2 million from properties owned by Crest Net Lease, which
are held for sale.
Of the 1,068 properties in the portfolio as of December 31, 2000, 1,063 are
single-tenant properties with the remaining properties being multi-tenant
properties. Of the 1,063 single-tenant properties, 1,038, or 97.6%, were
net leased with an average remaining lease term (excluding extension
options) of approximately 7.8 years. Of our 1,038 leased single-tenant
properties, 1,027 or 98.9% were under leases that provide for increases in
rents through:
- Base rent increases tied to a consumer price index with adjustment
ceilings;
- Overage rent based on a percentage of the tenants' gross sales; or
- Fixed increases.
Some leases contain more than one of these clauses. Percentage rent, which
is included in rental revenue, was $2.0 million during 2000 and $1.7
million during 1999. Same store rents generated on 894 leased properties
owned during all of both 2000 and 1999 increased by $1.5 million or 1.7%,
to $91.0 million from $89.5 million.
Many of our leases call for rent increases every five years. Over the past
four years we have acquired approximately $587 million in new properties
that now represent approximately 54% of our portfolio, excluding Crest Net
Lease properties. Many of these properties are due to generate their
initial rent increases from 2002 to 2004. As such, we believe our same
store rent growth is likely to accelerate with the onset of rent increases
from the newer properties over the next few years.
Our portfolio of quality retail real estate owned under 10-20 year net
leases continues to perform well and provide dependable lease revenue
supporting the payment of monthly dividends. At December 31, 2000, our
property portfolio of 1,068 properties was 97.7% leased with only 25
properties available for lease.
Of the 25 properties not leased at December 31, 2000, transactions to lease
or sell 10 properties were underway or completed. We anticipate these
transactions to be completed during the first half of 2001; although we
Page 39
cannot assure you that all of these properties can be sold or leased within
this period.
During the first half of 2000 we successfully resolved a situation involving
the vacancy of 11 of our 34 properties leased to Econo Lube 'N Tune. This
situation had nominal impact on our operating results during 2000. We
believe we will complete the re-leasing of the remaining two properties
during the first half of 2001 and will ultimately obtain 90% or more of the
lease revenue previously derived from Econo Lube 'N Tune.
During the last six months, we made progress in the re-lease of 21
properties formerly occupied by Flooring America that became vacant during
the third quarter. As of March 1, 2001, transactions were underway or
completed on 11 of the 21 properties, which leaves us with just 10
properties to be re-leased or sold. The Flooring America stores are
generally in excellent retail locations that lend themselves to a wide
variety of retail uses. In addition, the rents previously received on these
properties were mainly at prevailing market rents. We believe we will
complete the re-tenanting of the remaining 10 properties during the first
half of 2001 and will ultimately obtain 90% or more of the lease revenue
previously derived from Flooring America.
During 2000, Crest Net Lease sold two properties for $6.2 million and we
recognized a gain on the sales of $766,000, before income taxes. As of
December 31, 2000, Crest Net Lease has $23.6 million invested in seven
properties held for sale. It is Crest Net Lease's intent to carry an
average inventory of between $20.0 to $25.0 million in real estate on an
ongoing basis. Crest generates an earnings spread on the differential
between the lease payments it receives and the cost of capital used to
acquire the properties. It is our belief that at this level of inventory,
these earnings will more than cover the ongoing operating expenses of Crest
Net Lease.
Expenses
The following is a summary of the five components of interest expense for
2000 and 1999 (dollars in thousands):
<TABLE> 2000 1999 Net Change
------- ------- ----------
<S> <C> <C> <C>
Interest on outstanding
loans and notes $ 30,259 $ 24,254 $ 6,005
Amortization of settlements
on treasury lock agreements 756 756 --
Credit facility commitment fees 508 268 240
Amortization of credit facility
origination costs and deferred
bond financing costs 1,072 839 233
Interest capitalized (1,048) (1,644) 596
-------- -------- --------
Interest expense $ 31,547 $ 24,473 $ 7,074
======== ======== ========
Page 40
Credit facilities and
notes outstanding
(dollars in thousands)
Years ended, December 31, 2000 1999 Net Change
---------------------------- -------- -------- ----------
Average outstanding balances $384,921 $325,564 $59,357
Average interest rates 7.86% 7.45%
</TABLE>
Interest on outstanding loans and notes was $6.0 million higher in 2000
than in 1999 primarily due to an increase of $59.4 million in the average
outstanding balances and an increase of 41 basis points in our average
interest rate. The average borrowing rate on our credit facilities during
2000 was 7.67%, or 150 basis points higher than our average borrowing rate
during 1999. During 2000, LIBOR increased, which increased the average
borrowing rate on our credit facilities. During January 2001, the Federal
Reserve decreased the federal funds rate twice by a total of 100 basis
points. Correspondingly, LIBOR has declined which is anticipated to have a
positive impact on our 2001 average borrowing rate and FFO.
Our debt service coverage ratio for the year ended December 31, 2000 and
1999 was 3.5 times and 3.9 times, respectively. Debt service coverage ratio
is calculated as follows: earnings (income from operations) before
interest, taxes and depreciation and amortization (EBITDA) divided by
interest expense. Our EBITDA for the year ended December 31, 2000 and 1999
was $109.4 million and $96.2 million, respectively. This information
should not be considered as an alternative to any measure of performance as
promulgated under GAAP. Our calculation of EBITDA may be different from
the calculation used by other companies and, therefore, comparability may
be limited.
Depreciation and amortization was $29.0 million in 2000 versus $26.0
million in 1999. The increase in 2000 was primarily due to depreciation of
the properties acquired in 1999.
General and administrative expenses increased by $301,000 to $6.8 million
in 2000 versus $6.5 million in 1999. General and administrative expenses as
a percentage of revenue decreased to 5.8% in 2000 as compared to 6.3% in
1999. Included in general and administrative expenses for 2000 are
$305,000 of expenses attributable to Crest Net Lease.
Property expenses are broken down into costs associated with non-net leased
multi-tenant properties, unleased single-tenant properties and general
portfolio expenses. Expenses related to the multi-tenant and unleased
single-tenant properties include, but are not limited to, property taxes,
maintenance, insurance, utilities, property inspections, bad debt expense
and legal fees. General portfolio costs include, but are not limited to,
insurance, legal, property inspections and title search fees. At
December 31, 2000, 25 properties were available for lease, as compared to
17 at December 31, 1999.
Page 41
Property expenses were $2.0 million in 2000 and $1.8 million in 1999. The
$210,000 increase in property expenses is primarily attributable to costs
associated with properties available for lease.
Other expenses were $813,000 in 2000 and $430,000 in 1999. Other expenses
are Crest Net Lease income taxes and Realty Income state and local income
taxes. The increase in 2000 is primarily attributable to Crest Net Lease
state and federal income taxes of $332,000.
We review long-lived assets for impairment whenever events or changes in
circumstances indicate that the carrying amount of the asset may not be
recoverable. We did not take a provision for impairment in 2000, 1999 or
1998.
During 2000, we sold 21 properties for a total of $45.2 million and
recognized a gain of $6.7 million. Included in the 21 properties sold
during 2000, are two properties leased by one of our tenants that we
exchanged, valued at $22.7 million, for two other properties owned by that
tenant. During 1999, we sold three properties for $9.4 million and
recognized a gain of $1.3 million.
We have an active portfolio management program that incorporates the sale
of assets when we believe the reinvestment of the sales proceeds will
generate higher returns, enhance the credit quality of our real estate
portfolio or extend our average remaining lease terms. As of December 31,
2000, we classified real estate with a carrying amount of $33.1 million as
held for sale. Additionally, we anticipate selling properties from our
portfolio, which have not yet been specifically identified. We anticipate
we will receive up to $50 million in proceeds from the sale of properties
during the next 12 months. We intend to invest these proceeds into new
property acquisitions.
In December 1999, our $170 million credit facility was canceled
simultaneously with the execution of our $200 million credit facility.
Unamortized fees of $355,000 relating to the $170 million credit facility
were charged in 1999 as extraordinary loss on early extinguishment of the
credit facility.
We paid preferred stock dividends of $9.7 million in 2000 and $5.2 million
in 1999. Our outstanding preferred stock was issued during the second and
third quarters of 1999.
Net Income Available to Common Stockholders
In 2000, our net income available to common stockholders increased 10.0%,
to $45.1 million versus $41.0 million in 1999.
The calculation to determine net income available to common stockholders
includes gains and losses from the sale of investment properties. The
Page 42
amount of gain and losses varies from year to year based on the timing of
property sales and can significantly impact net income available to common
stockholders. The gain recognized from property sales during 2000 was $5.4
million greater than the gain recognized from property sales during 1999.
The Following is a Comparison of Our Results of Operations for the Year
Ended December 31, 1999 to the Year Ended December 31, 1998.
Revenue
Rental revenue was $104.3 million for 1999 versus $84.9 million for 1998,
an increase of $19.4 million, or 22.9%. The increase in rental revenue was
primarily due to the acquisition of 110 properties during 1999 and 149
properties during 1998. These properties generated revenue of $26.87
million in 1999 compared to $7.53 million in 1998, an increase of $19.34
million.
Of the 1,076 properties in the portfolio as of December 31, 1999, 1,069
were single-tenant properties with the remaining properties being multi-
tenant properties. Of the 1,069 single-tenant properties, 1,052, or 98.4%,
were net leased with an average remaining lease term (excluding extension
options) of approximately 8.7 years.
Percentage rent, which is included in rental revenue, was $1.7 million
during both 1999 and 1998. Same store rents generated on 789 leased
properties owned during all of both 1999 and 1998 increased by $618,000 or
0.8%, to $74.34 million from $73.72 million.
Expenses
The following is a summary of the five components of interest expense for
1999 and 1998 (dollars in thousands):
<TABLE>
1999 1998 Net Change
------- ------- ----------
<S> <C> <C> <C>
Interest on outstanding
loans and notes $ 24,254 $ 13,666 $ 10,588
Amortization of settlements
on treasury lock agreements 756 38 718
Credit facility commitment fees 268 232 36
Amortization of credit facility
origination costs and deferred
bond financing costs 839 447 392
Interest capitalized (1,644) (660) (984)
-------- -------- --------
Interest expense $ 24,473 $ 13,723 $ 10,750
======== ======== ========
Page 43
Credit facilities and
notes outstanding
(dollars in thousands)
Years ended, December 31, 1999 1998 Net Change
---------------------------- -------- -------- ----------
Average outstanding balances $325,564 $184,728 $140,836
Average interest rates 7.45% 7.40%
</TABLE>
Interest on outstanding loans and notes was $10.6 million higher in 1999
than in 1998 primarily due to an increase of $140.8 million in the average
outstanding balances and a higher average interest rate. The higher
average interest rate was due to the notes issued in October 1998 and
January 1999.
Our debt service coverage ratio for the year ended December 31, 1999 and
1998 was 3.9 times and 5.6 times, respectively. Our EBITDA for the year
ended December 31, 2000 was $96.2 million and $77.0 million, respectively.
Depreciation and amortization was $26.0 million in 1999 versus $21.9
million in 1998. The increase in 2000 was primarily due to depreciation of
the properties acquired in 1998 and 1999.
General and administrative expenses increased by $147,000 to $6.5 million
in 1999 versus $6.4 million in 1998. The increase in general and
administrative expenses was primarily due to a one-time charge taken during
1999 that was associated with the retirement of our former President.
General and administrative expenses as a percentage of revenue decreased to
6.3% in 1999 as compared to 7.5% in 1998.
Property expenses were $1.8 million in 1999 and 1998. Savings on our
general portfolio insurance offset increases in vacant property costs in
1999.
Other expenses were $430,000 in 1999 and $289,000 in 1998. Other expenses
are Realty Income state and local income taxes.
During 1999, we sold three properties for $9.4 million and recognized a
gain of $1.3 million. During 1998, we sold five properties for $2.8
million and recognized a gain of $526,000.
In October 1998, we adopted SOP 98-5, "Reporting on the Costs of Start-Up
Activities" ("SOP 98-5"). SOP 98-5 requires that costs incurred during
start-up activities, including organization costs, be expensed as incurred.
Prior to October 1998, we amortized organization costs over 60 months. In
October 1998, the unamortized balance of organization costs of $226,000 was
expensed. This is reported on the statements of income as a cumulative
effect of a change in accounting principle.
In 1999, we paid preferred stock dividends of $5.2 million. No preferred
stock was outstanding prior to 1999.
Page 44
Net Income Available to Common Stockholders
In 1999, our net income available to common stockholders decreased 0.7%, to
$41.0 million versus $41.3 million in 1998.
IMPACT OF INFLATION
-------------------
Tenant leases generally provide for limited increases in rent as a result
of increases in the tenant's sales volumes, increases in the consumer price
index, and/or fixed increases. We expect that inflation will cause these
lease provisions to result in increases in rent over time. During times
when inflation is greater than increases in rent as provided for in the
leases, however, rent increases may not keep up with the rate of inflation.
Approximately 97.2% or 1,038 of the properties in the portfolio are leased
to tenants under net leases in which the tenant is responsible for property
costs and expenses. These features in the leases reduce our exposure to
rising property expenses due to inflation. Inflation and increased costs
may have an adverse impact on our tenants if increases in our tenant's
operating expenses exceed increases in revenue.
IMPACT OF ACCOUNTING PRONOUNCEMENTS
-----------------------------------
In June 1998, the Financial Accounting Standards Board issued statement of
Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities" ("Statement No. 133"). Statement No.
133 establishes accounting and reporting standards for derivative
instruments. Statement No. 133, as amended, is effective for all fiscal
quarters of all fiscal years beginning after June 15, 2000. We anticipate
that the adoption of Statement No. 133 will not have a material effect on
our financial position, result of operations or liquidity.
ITEM 7a: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
====================================================================
We are exposed to interest rate changes primarily as a result of our credit
facilities and long-term debt used to maintain liquidity and expand our
real estate investment portfolio and operations. Our interest rate risk
management objective is to limit the impact of interest rate changes on
earnings and cash flows and to lower our overall borrowing costs. To
achieve our objectives we borrow our long term debt primarily at fixed
rates and may selectively enter into derivative financial instruments such
as interest rate lock agreements, interest rate swaps and caps in order to
mitigate our interest rate risk on a related financial instrument. We are
not a party to any derivative financial instruments at December 31, 2000.
We do not enter into any transactions for speculative or trading purposes.
Page 45
Our interest rate risk is monitored using a variety of techniques. The
table below presents the principal amounts, weighted average interest
rates, fair values and other terms required by year of expected maturity to
evaluate the expected cash flows and sensitivity to interest rate changes
(dollars in table in millions).
<TABLE>
Expected Maturity Data
-----------------------
There- Fair
2002 2003 after Total Value (2)
---- ---- ------ ------ ---------
<S> <C> <C> <C> <C> <C>
Fixed rate
debt -- -- $230.0(1) $230.0 $212.2
Average
interest rate -- -- 7.99% 7.99%
Variable
rate debt $149.9 $24.1 -- $174.0 $174.0
Average
interest rate 7.82% 7.87% -- 7.83%
</TABLE>
[FN]
(1) $110 million matures in 2007, $100 million matures in 2008 and $20
million matures in 2009.
(2) We base the fair value of the fixed rate debt at December 31, 2000 on
the closing market price or indicative price per each note. The fair value
of the variable rate debt approximates its carrying value because its terms
are similar to those available in the market place.
</FN>
The table incorporates only those exposures that exist as of
December 31, 2000, it does not consider those exposures or positions that
could arise after that date. As a result, our ultimate realized gain or
loss with respect to interest rate fluctuations would depend on the
exposures that arise during the period, our hedging strategies at the time,
and interest rates.
Page 46
ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
----------------------------------------------------
<TABLE>
Table of Contents Page
----------------- ----
<S> <C>
A. Independent Auditors' Report............................. 48
B. Consolidated Balance Sheets,
December 31, 2000 and 1999............................. 49
C. Consolidated Statements of Income,
Years ended December 31, 2000, 1999 and 1998........... 51
D. Consolidated Statements of Stockholders' Equity,
Years ended December 31, 2000, 1999 and 1998........... 53
E. Consolidated Statements of Cash Flows,
Years ended December 31, 2000, 1999 and 1998........... 55
F. Notes to Consolidated Financial Statements............... 57
G. Consolidated Quarterly Financial Data,
(unaudited) for 2000 and 1999.......................... 72
H. Schedule III Real Estate and Accumulated
Depreciation is attached to this report. Reference
is made to page F-1 of this report for Schedule III.... F-1
</TABLE>
Schedules not filed: All schedules, other than that indicated in the Table
of Contents, have been omitted as the required information is inapplicable
or the information is presented in the financial statements or related
notes.
Page 47
Independent Auditors' Report
----------------------------
The Board of Directors and Stockholders
Realty Income Corporation:
We have audited the consolidated financial statements of Realty Income
Corporation and subsidiaries as listed in the accompanying table of
contents. In connection with our audits of the consolidated financial
statements, we also have audited the financial statement schedule III
listed in the accompanying table of contents. These consolidated financial
statements and financial statement schedule are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements and financial statement schedule based on
our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Realty
Income Corporation and subsidiaries as of December 31, 2000 and 1999, and
the results of their operations and their cash flows for each of the years
in the three-year period ended December 31, 2000, in conformity with
accounting principles generally accepted in the United States of America.
Also in our opinion, the related financial statement schedule III, when
considered in relation to the basic consolidated financial statements taken
as a whole, presents fairly, in all material respects, the information set
forth therein.
/s/KPMG LLP
San Diego, California
January 24, 2001
Page 48
REALTY INCOME CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
===========================
December 31, 2000 and 1999
(dollars in thousands, except per share data)
<TABLE>
2000 1999
========= =========
<S> <C> <C>
ASSETS
Real estate, at cost:
Land $ 368,057 $ 338,489
Buildings and improvements 705,470 678,763
--------- ---------
1,073,527 1,017,252
Less accumulated depreciation
and amortization (212,379) (179,421)
--------- ---------
Net real estate held for investment 861,148 837,831
Real estate held for sale, net 33,130 29,262
--------- ---------
Net real estate 894,278 867,093
Cash and cash equivalents 3,815 773
Accounts receivable 5,053 3,407
Goodwill, net 18,130 19,053
Other assets 13,490 15,078
--------- ---------
Total assets $ 934,766 $ 905,404
========= =========
(table continued next page)
Page 49
(table continued)
REALTY INCOME CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
===========================
December 31, 2000 and 1999
(dollars in thousands, except per share data)
2000 1999
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Distributions payable $ 4,914 $ 4,828
Accounts payable and accrued expenses 5,969 12,792
Other liabilities 4,314 3,753
Lines of credit payable 174,000 119,200
Notes payable 230,000 230,000
--------- ---------
Total liabilities 419,197 370,573
--------- ---------
Commitments and contingencies
Stockholders' equity:
Preferred stock and paid in capital,
par value $1.00 per share, 20,000,000
shares authorized, 4,125,700 and
4,140,000 shares issued and
outstanding in 2000 and 1999,
respectively 99,368 99,679
Common stock and paid in capital,
par value $1.00 per share, 100,000,000
shares authorized, 26,563,519 and
26,822,164 shares issued and outstanding
in 2000 and 1999, respectively 630,932 636,611
Distributions in excess of net income (214,731) (201,459)
--------- ---------
Total stockholders' equity 515,569 534,831
--------- ---------
Total liabilities and
stockholders' equity $ 934,766 $ 905,404
========= =========
</TABLE>
The accompanying notes to consolidated financial statements
are an integral part of these statements.
Page 50
REALTY INCOME CORPORATION AND SUBSIDIARIES
Consolidated Statements of Income
=================================
Years Ended December 31, 2000, 1999 and 1998
(dollars in thousands, except per share data)
<TABLE>
2000 1999 1998
========== ========== ==========
<S> <C> <C> <C>
REVENUE
Rental $ 117,190 $ 104,270 $ 84,876
Gain on sales of real estate
acquired for resale 766 -- --
Interest and other 354 240 256
---------- ---------- ----------
118,310 104,510 85,132
---------- ---------- ----------
EXPENSES
Interest 31,547 24,473 13,723
Depreciation and
amortization 29,003 25,952 21,935
General and administrative 6,839 6,538 6,391
Property 2,032 1,822 1,790
Other 813 430 289
---------- ---------- ----------
70,234 59,215 44,128
---------- ---------- ----------
Income from operations 48,076 45,295 41,004
Gain on sales of investment
properties 6,712 1,301 526
---------- ---------- ----------
Income before extraordinary
item and cumulative
effect of change in
accounting principle 54,788 46,596 41,530
Extraordinary loss on
early extinguishment of
credit facility -- (355) --
Cumulative effect of change
in accounting principle -- -- (226)
---------- ---------- ----------
Net income 54,788 46,241 41,304
Preferred stock dividends (9,712) (5,229) --
---------- ---------- ----------
Net income available to
common stockholders $ 45,076 $ 41,012 $ 41,304
========== ========== ==========
(table continued next page)
Page 51
(table continued)
REALTY INCOME CORPORATION AND SUBSIDIARIES
Consolidated Statements of Income
=================================
Years Ended December 31, 2000, 1999 and 1998
(dollars in thousands, except per share data)
2000 1999 1998
========== ========== ==========
Basic and diluted amounts per
common share:
Income before extraordinary
item and cumulative
effect of change in
accounting principle $ 1.69 $ 1.54 $ 1.56
Extraordinary item -- (0.01) --
Cumulative effect of change
in accounting principle -- -- (0.01)
---------- ---------- ----------
Net income per common share $ 1.69 $ 1.53 $ 1.55
========== ========== ==========
(/TABLE>
The accompanying notes to consolidated financial statements
are an integral part of these statements.
Page 52
REALTY INCOME CORPORATION AND SUBSIDIARIES
Consolidated Statements of Stockholders' Equity
========================================================
Years Ended December 31, 2000, 1999 and 1998
(dollars in thousands)
</TABLE>
<TABLE>
Preferred Common Distri-
Shares of stock stock butions
---------------------- and and in excess
Preferred Common paid in paid in of net
Stock Stock capital capital income Totals
========== ========== ======== ======== ========= ========
<S> <C> <C> <C> <C> <C> <C>
Balance,
December 31,
1997 -- 25,698,464 $ -- $608,148 $(174,833) $433,315
Net income -- -- -- -- 41,304 41,304
Distributions
paid and
payable -- -- -- -- (52,748) (52,748)
Shares issued
in stock
offering, net
of offering
costs of $122 -- 1,123,267 -- 28,379 -- 28,379
Shares issued -- 15,933 -- 400 -- 400
Shares forfeited -- (20,561) -- (441) -- (441)
---------- ---------- -------- -------- --------- --------
Balance,
December 31,
1998 -- 26,817,103 -- 636,486 (186,277) 450,209
Net income -- -- -- -- 46,241 46,241
Distributions
paid and
payable -- -- -- -- (61,423) (61,423)
Shares issued
in stock
offering, net
of offering
costs of
$3,821 4,140,000 -- 99,679 -- 99,679
Shares issued -- 5,600 -- 139 -- 139
Shares forfeited -- (539) -- (14) -- (14)
---------- ---------- -------- -------- --------- --------
Balance,
December 31,
1999 4,140,000 26,822,164 99,679 636,611 (201,459) 534,831
(table continued next page)
Page 53
(continued)
REALTY INCOME CORPORATION AND SUBSIDIARIES
Consolidated Statements of Stockholders' Equity
========================================================
Years Ended December 31, 2000, 1999 and 1998
(dollars in thousands)
Preferred Common Distri-
Shares of stock stock butions
---------------------- and and in excess
Preferred Common paid in paid in of net
Stock Stock capital capital income Totals
========== ========== ======== ======== ========= ========
Net income -- -- -- -- 54,788 54,788
Distributions
paid and
payable -- -- -- -- (68,060) (68,060)
Shares
repurchased (14,300) (284,500) (276) (6,223) -- (6,499)
Shares issued -- 27,800 -- 593 -- 593
Shares forfeited -- (1,945) -- (49) -- (49)
Stock offering
costs -- -- (35) -- -- (35)
---------- ---------- -------- -------- --------- ---------
Balance,
December 31,
2000 4,125,700 26,563,519 $ 99,368 $630,932 $(214,731) $515,569
========== ========== ======== ======== ========= ========
</TABLE>
The accompanying notes to consolidated financial statements
are an integral part of these statements.
Page 54
REALTY INCOME CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
=====================================
Years Ended December 31, 2000, 1999 and 1998
(dollars in thousands)
<TABLE>
2000 1999 1998
======== ======== ========
<S> <C> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES
Net income $ 54,788 $ 46,241 $ 41,304
Adjustments to net income:
Depreciation and amortization 29,003 25,952 21,935
Acquisition of real estate
acquired for resale (28,577) -- --
Proceeds from sales of real
estate acquired for resale 6,215 -- --
Gain on sales of real estate
acquired for resale (766) -- --
Gain on sales of investment
properties (6,712) (1,301) (526)
Extraordinary item -- 355 --
Cumulative effect of change in
accounting principle -- -- 226
Changes in assets and liabilities:
Accounts receivable and
other assets 485 25 144
Accounts payable, accrued expenses
and other liabilities 2,154 882 1,562
-------- -------- --------
Net cash provided by
operating activities 56,590 72,154 64,645
-------- -------- --------
CASH FLOWS FROM
INVESTING ACTIVITIES
Proceeds from sales of
investment properties 22,536 9,431 2,770
Acquisition of and additions to
real estate (56,142) (174,056) (192,588)
Increase in other assets (450) -- --
Payment of other liabilities -- (1,713) --
-------- -------- --------
Net cash used in
investing activities (34,056) (166,338) (189,818)
-------- -------- --------
(table continued next page)
Page 55
(table continued)
REALTY INCOME CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
=====================================
Years Ended December 31, 2000, 1999 and 1998
(dollars in thousands)
2000 1999 1998
======== ======== ========
CASH FLOWS FROM
FINANCING ACTIVITIES
Borrowings from lines of credit 157,700 221,200 224,900
Payments under lines of credit (102,900) (186,800) (162,700)
Distributions to common
stockholders (58,262) (55,925) (52,301)
Distributions to preferred
stockholders (9,712) (5,229) --
Proceeds from preferred stock
offerings, net of offering costs (35) 99,679 --
Proceeds from common stock
offerings, net of offering costs -- -- 28,379
Proceeds from notes issued,
net of costs in 1999 and 1998
of $501 and $12,764 respectively -- 19,499 87,236
Repurchase of stock (6,499) -- --
Proceeds from other stock issuances 216 -- 69
-------- -------- --------
Net cash provided by (used in)
financing activities (19,492) 92,424 125,583
-------- -------- --------
Net increase (decrease) in cash
and cash equivalents 3,042 (1,760) 410
Cash and cash equivalents,
beginning of year 773 2,533 2,123
-------- -------- --------
Cash and cash equivalents,
end of year $ 3,815 $ 773 $ 2,533
======== ======== ========
</TABLE>
For supplemental disclosures, see note 15.
The accompanying notes to consolidated financial statements
are an integral part of these statements.
Page 56
REALTY INCOME CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
==========================================
December 31, 2000, 1999 and 1998
1. Organization and Operation
Realty Income Corporation ("Realty Income", the "Company", "we" or "our")
is organized as a Maryland corporation. We invest in commercial retail
real estate and have elected to be taxed as a real estate investment trust
("REIT"). As of December 31, 2000, we owned 1,068 properties in 46 states
containing over 9.0 million leasable square feet, excluding seven
properties owned by our subsidiary, Crest Net Lease, Inc.
2. Summary of Significant Accounting Policies and Procedures
Principles of Consolidation - The accompanying consolidated financial
statements include the accounts of Realty Income, Crest Net Lease, Inc. and
entities we control (subsidiaries) after elimination of all material
intercompany balances and transactions.
Cash Equivalents - We consider all short-term, highly liquid investments
that are readily convertible to cash and have an original maturity of three
months or less at the time of purchase to be cash equivalents.
Depreciation and Amortization - Depreciation of buildings and improvements,
and amortization of goodwill are computed using the straight-line method
over an estimated useful life of 25 years. Amortization of goodwill for
each of the years ended December 31, 2000, 1999 and 1998 was $924,000.
Leases - All leases are accounted for as operating leases. Under this
method, lease payments are recognized as revenue over the term of the
lease.
Federal Income Taxes - We have elected to be taxed as a REIT under the
Internal Revenue Code of 1986, as amended ("IRS Code"). We believe Realty
Income has qualified and continues to qualify as a REIT and therefore will
be permitted to deduct distributions paid to its stockholders, eliminating
the federal taxation of income represented by those distributions at the
Company's level. Accordingly, no provision has been made for federal
income taxes in the accompanying consolidated financial statements, except
for federal income taxes of $264,000 on Crest Net Lease's 2000 taxable net
income, which are included in other expenses.
Distributions Paid and Payable - Realty Income pays distributions monthly
to our common stockholders. The following is a summary of monthly cash
distributions paid per common share for the years ended December 31, 2000,
1999 and 1998.
Page 57
2. Summary of Significant Accounting Policies (continued)
<TABLE>
Month 2000 1999 1998
----- -------- ------- ------
<S> <C> <C> <C>
January $0.18000 $0.1700 $0.1600
February 0.18000 0.1700 0.1600
March 0.18000 0.1700 0.1600
April 0.18125 0.1725 0.1625
May 0.18125 0.1725 0.1625
June 0.18125 0.1725 0.1625
July 0.18250 0.1750 0.1650
August 0.18250 0.1750 0.1650
September 0.18250 0.1750 0.1650
October 0.18375 0.1775 0.1675
November 0.18375 0.1775 0.1675
December 0.18375 0.1775 0.1675
-------- ------- -------
Totals $2.18250 $2.0850 $1.9650
======== ======= =======
</TABLE>
The following presents the federal income tax characterization of
distributions paid or deemed to be paid to common stockholders for the
years ended December 31:
<TABLE>
2000 1999 1998
-------- ------- -------
<S> <C> <C> <C>
Ordinary income $1.76796 $1.8468 $1.8895
Return of capital 0.41454 0.1986 0.0755
Capital gain -- 0.0396 --
-------- ------- -------
Totals $2.18250 $2.0850 $1.9650
======== ======= =======
</TABLE>
In May 1999, we issued 2,760,000 shares of 9 3/8% Class B cumulative
redeemable preferred stock (the "Class B Preferred"). Dividends on the
Class B Preferred are paid quarterly in arrears. For the years ended
December 31, 2000 and 1999, dividends of $6.4 million and $3.9 million,
respectively, were paid on the Class B Preferred.
In July 1999, we issued 1,380,000 shares of 9 1/2% Class C cumulative
redeemable preferred stock (the "Class C Preferred"). Dividends on the
Class C Preferred are paid monthly in arrears. For the years ended
December 31, 2000 and 1999, dividends of $3.3 million and $1.4 million,
respectively, were paid on the Class C Preferred.
Page 58
2. Summary of Significant Accounting Policies (continued)
The following presents the federal income tax characterization of dividends
paid or deemed to be paid to Class B Preferred and Class C Preferred
stockholders for the year ended December 31, 2000 and 1999:
<TABLE>
Class B Class C
Preferred Preferred
--------------------- ---------------------
<S> <C> <C> <C> <C>
2000 1999 2000 1999
-------- -------- -------- --------
Ordinary income $ 2.3436 $ 1.3731 $ 2.3748 $ 0.9707
Capital gains -- 0.0266 -- 0.0188
-------- -------- -------- --------
Totals $ 2.3436 $ 1.3997 $ 2.3748 $ 0.9895
======== ======== ======== ========
</TABLE>
Provision for Impairment Losses - We review long-lived assets, including
goodwill, for impairment whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be recoverable.
Generally, a provision is made for impairment loss if estimated future
operating cash flows (undiscounted and without interest charges) plus
estimated disposition proceeds (undiscounted) are less than the current
book value. If a property is held for sale, it is carried at the lower of
cost or estimated fair value, less costs to sell. No provision for
impairment loss was charged in 2000, 1999 or 1998.
Net Income Per Common Share - Basic net income per common share is computed
by dividing net income available to common stockholders by the weighted
average number of common shares outstanding during each period. Diluted
net income per common share is computed by dividing the amount of net
income available to common stockholders for the period by the number of
common shares that would have been outstanding assuming the issuance of
common shares for all potentially dilutive common shares outstanding during
the reporting period.
Page 59
2. Summary of Significant Accounting Policies (continued)
The following is a reconciliation of the denominator of the basic net
income per common share computation to the denominator of the diluted net
income per common share computation, for the years ended
December 31, 2000, 1999 and 1998:
<TABLE>
2000 1999 1998
---------- ---------- ----------
<S> <C> <C> <C>
Weighted average shares used for
basic net income per share
computation 26,684,598 26,822,285 26,629,936
Incremental shares from the
assumed exercise of stock
options 16,208 3,805 8,348
---------- ---------- ----------
Adjusted weighted average shares
used for diluted net income
per share computation 26,700,806 26,826,090 26,638,284
========== ========== ==========
</TABLE>
In 2000, 1999 and 1998, 296,653, 186,181 and 25,000 stock options,
respectively, that were anti-dilutive have been excluded from the
incremental shares from the assumed exercise of stock options.
Stock Option Plan - We account for our stock option plan in accordance with
the provisions of Accounting Principles Board ("APB") Opinion No. 25,
"Accounting for Stock Issued to Employees", and related interpretations.
As such, compensation expense would be recorded on the date of grant only
if the current market price of the underlying stock exceeded the exercise
price. Statement of Financial Accounting Standards No. 123, "Accounting
for Stock-Based Compensation" ("SFAS No. 123"), permits entities to
recognize as expense over the vesting period, the fair value of all stock-
based awards on the date of grant. Alternatively, SFAS No. 123 allows
entities to continue to apply the provisions of APB Opinion No. 25 and
provide pro forma net income and pro forma earnings per share disclosures
for employee stock option grants made after 1994, as if the fair-value
based method defined in SFAS No. 123 had been applied. We have elected to
continue to apply the provisions of APB Opinion No. 25 and provide the pro
forma disclosure provisions of SFAS No. 123.
Derivative Financial Instruments - In two instances, we used interest rate
treasury lock agreements to protect against the possibility of rising
interest rates. These instruments each met the requirement for hedge
accounting, including a high correlation to a specific transaction.
Accordingly, the amount received and paid under the terms of the agreements
is recognized in income when interest expense related to the hedge item is
recognized.
Page 60
2. Summary of Significant Accounting Policies (continued)
Change in Accounting Principle - In October 1998, we adopted Statement of
Position 98-5, "Reporting on the Costs of Start-Up Activities" ("SOP 98-
5"). SOP 98-5 requires that costs incurred during start-up activities,
including organization costs, be expensed as incurred. Prior to October
1998, we amortized organization costs over 60 months. In October 1998, the
unamortized balances of organization costs were written off as a cumulative
effect of a change in accounting principle.
Use of Estimates - The preparation of the consolidated financial statements
in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities, the disclosure of contingent assets and
liabilities at the date of the financial statements and the reported
amounts of revenue and expenses during the reporting period. Actual
results could differ from those estimates.
Reclassifications - Certain of the 1999 and 1998 balances have been
reclassified to conform to the 2000 presentation.
3. Investment in Subsidiary
In January 2000, we formed Crest Net Lease, Inc., of which we own 95% of
the common stock, all of which is non-voting, and certain members of our
management and Crest Net Lease management own 5% of the common stock, all
of which is voting stock. Crest Net Lease was created to actively acquire
and resell properties, primarily to buyers using tax-deferred exchanges,
under Section 1031 of the IRS Code.
The financial statements of Crest Net Lease have been consolidated. All
intercompany transactions have been eliminated in consolidation.
4. Credit Facilities Available for Acquisitions
A. In December 1999, we entered into a $200 million, three-year,
revolving, unsecured acquisition credit facility, which expires in December
2002. The $200 million credit facility is from The Bank of New York, as
administrative agent, and several U.S. and non-U.S. banks. As of
December 31, 2000 and 1999, the outstanding balances on the credit facility
were $149.9 million and $119.2 million, respectively, with an effective
interest rate of approximately 7.82% and 7.35%, respectively. Our $170
million credit facility was canceled simultaneously with the execution of
the $200 million credit facility in December 1999. Unamortized fees of
$355,000 relating to our $170 million credit facility were charged in 1999
as an extraordinary loss on early extinguishment of the credit facility.
The $200 million credit facility currently bears interest at 1.225% over
the London Interbank Offered Rate ("LIBOR") and offers us other interest
rate options. A facility fee of 0.225%, per annum, accrues on the total
commitment of the credit facility.
Page 61
4. Credit Facilities Available for Acquisitions (continued)
B. In February 2000, we entered into a $25 million, three-year, revolving,
unsecured credit agreement with the Bank of Montreal, which expires in
February 2003. As of December 31, 2000, the outstanding balance on the
credit facility was $24.1 million with an effective interest rate of
approximately 7.87%. The $25 million credit facility bears interest at
1.225% over LIBOR. A facility fee of 0.225%, per annum, accrues on the
total commitment of the credit facility.
C. The average borrowing rate on our credit facilities during 2000 was
7.67%, or 150 basis points higher than our average borrowing rate during
1999 of 6.17%. Our credit facilities are subject to various leverage and
interest coverage ratio limitations. The Company is and has been in
compliance with these limitations.
In 2000, 1999 and 1998, interest of $1.0 million, $1.6 million and
$660,000, respectively, was capitalized with respect to properties under
development.
5. Notes Payable
In January 1999, we issued $20 million of 8.0% senior notes due 2009 (the
"1999 Notes"). The 1999 Notes are unsecured and were sold at 98.757% of
par to yield 8.1%. Interest on the 1999 Notes is payable semiannually.
In October 1998, we issued $100 million of 8.25% Monthly Income Senior
Notes due 2008 (the "1998 Notes"). The 1998 Notes are unsecured and were
sold at par ($25.00). After taking into effect the results of a treasury
interest rate lock agreement (see note 6), the effective rate to us on the
1998 Notes is 9.12%. Interest on the 1998 Notes is payable monthly.
In May 1997, we issued $110 million of 7.75% senior notes due 2007 (the
"1997 Notes"). The 1997 Notes are unsecured and were sold at 99.929% of
par to yield 7.76%. After taking into effect results of a treasury
interest rate lock agreement (see note 6), the effective interest rate to
us on the 1997 Notes is 7.62%. Interest on the 1997 Notes is payable
semiannually.
Interest incurred on the 1999 Notes, 1998 Notes and 1997 Notes collectively
for the years ended December 31, 2000, 1999 and 1998 was $18.4 million,
$18.3 million and $10.0 million, respectively.
6. Derivative Financial Instruments
In May 1998, we entered into a treasury interest rate lock agreement
associated with the 1998 Notes (see note 5). In settlement of the
agreement, we made a payment of $8.7 million in October 1998. The payment
on the agreement is being amortized over 10 years (the life of the 1998
Notes) as a yield adjustment to interest expense.
Page 62
6. Derivative Financial Instruments (continued)
In December 1996, we entered into a treasury interest rate lock agreement
associated with the 1997 Notes (see note 5). In settlement of the
agreement, we received $1.1 million in June 1997. The payment received on
the agreement is being amortized over 10 years (the life of the 1997 Notes)
as a yield adjustment to interest expense.
Our only involvement with derivative financial instruments was the two
aforementioned treasury interest rate lock agreements and we have not used
derivative financial instruments for trading purposes.
7. Property Acquisitions
A. During 2000 we invested $70.0 million in 13 new retail properties and
properties under development with an average initial contractual lease rate
of 10.8%. During 1999 we invested $181.4 million in 110 new retail
properties and properties under development with an average initial
contractual lease rate of 10.5%.
B. During 2000, Crest Net Lease invested $28.6 million in nine new retail
properties. Two of these properties were sold and seven properties are
held for sale.
8. Repurchases of Realty Income Securities
In January 2000, our Board of Directors authorized the repurchase of up to
$10 million of our outstanding common stock, preferred stock and senior
debt securities. During 2000, we repurchased 284,500 shares of common
stock at an average price of $21.87 per share and 14,300 shares of our
Class B preferred stock at an average price of $19.27 per share, for a
total investment of $6.5 million.
9. Common Stock Offerings
A. In March 1998, we issued 372,093 shares of common stock to a unit
investment trust at a net price to us of $25.531 per share, based on a 5%
discount to the market price at the time of issuance of $26.875 per share.
The net proceeds of $9.5 million were used to repay bank borrowings of $7.9
million and to acquire additional properties.
B. In February 1998, we issued 751,174 shares of common stock to a unit
investment trust at a net price to us of $25.295 per share, based on a 5%
discount to the market price at time of issuance of $26.625 per share. The
net proceeds of $18.9 million were to be used to repay bank borrowings.
Page 63
10. Preferred Stock Offerings
A. In May 1999, we issued 2,760,000 shares of Class B Preferred stock at a
price of $25.00 per share. The net proceeds of $66.5 million were used to
repay bank borrowings.
B. In July 1999, we issued 1,380,000 shares of Class C Preferred stock at
a price of $25.00 per share. The net proceeds of $33.2 million were used
to repay bank borrowings.
11. Operating Leases
A. General - At December 31, 2000, we owned 1,068 properties in 46 states,
excluding properties owned by Crest Net Lease. Of these 1,068 properties,
1,063 are single-tenant and the remainder are multi-tenant. At December
31, 2000, 25 properties were vacant and available for lease or sale.
Substantially all leases are net leases whereby the tenant pays property
taxes and assessments, maintains the interior and exterior of the building,
and carries insurance coverage for public liability, property damage, fire,
and extended coverage.
Percentage rent for 2000, 1999 and 1998 was $2.0 million, $1.7 million and
$1.7 million, respectively.
At December 31, 2000, minimum annual rents to be received on the operating
leases are as follows (dollars in thousands):
<TABLE>
Minimum annual rents for the years ending December 31,
======================================================
<S> <C> <C>
2001 $ 113,128
2002 105,743
2003 97,457
2004 90,238
2005 81,388
Thereafter 628,981
----------
TOTAL $1,116,935
==========
</TABLE>
B. Major Tenants - The following schedule presents rental revenue,
including percentage rents, from tenants representing more than 10% of our
total revenue for the years ended December 31, 2000, 1999 or 1998 (dollars
in thousands):
Page 64
11. Operating Leases (continued)
<TABLE>
Tenants 2000 1999 1998
========================= ======= ======= =======
<S> <C> <C> <C>
Children's World
Learning Centers, Inc. $14,698 $14,371 $14,111
La Petite Academy, Inc. 12,233 10,730 9,445
</TABLE>
12. Gain on Sales of Real Estate Acquired for Resale
During 2000, Crest Net Lease sold two properties for $6.2 million and we
recognized a gain on sale of real estate acquired for resale of $766,000.
13. Gain on Sales of Investment Properties
In 2000, we sold or exchanged 21 properties for $45.2 million and
recognized a gain of $6.7 million. Included in the 21 properties are two
properties leased by one of our tenants that we exchanged for two other
properties owned by that tenant for no gain (see note 15A). In 1999, we
sold three properties for $9.4 million and recognized a gain of $1.3
million. In 1998, we sold five properties for a total of $2.8 million and
recognized a gain of $526,000.
In November 1999, we approved a plan to sell three of our multi-tenant
locations. The carrying value of the three properties at December 31, 1999
was $29.3 million. In December 2000, we canceled our plan to sell the
three locations and the properties were no longer classified as held for
sale. These properties are included in the other non-reportable segment in
note 19.
14. Fair Value of Financial Instruments
We believe that the carrying values reflected in the consolidated balance
sheets at December 31, 2000 and 1999 reasonably approximate the fair values
for cash and cash equivalents, accounts receivable, and all liabilities
except the lines of credit payable and notes payable. In making these
assessments, we used estimates. The fair value of the lines of credit
payable approximates its carrying value because its terms are similar to
those available in the market place. The fair value of the notes payable at
December 31, 2000 and 1999 is estimated to be $212.2 million and $199.4
million, respectively, based upon the closing market price per note or
indicative price per each note at December 31, 2000 and 1999, respectively.
Page 65
15. Supplemental Disclosures of Cash Flow Information
Interest paid during 2000, 1999 and 1998 was $29.8 million, $22.4 million
and $12.5 million, respectively.
The following non-cash investing and financing activities are included in
the accompanying consolidated financial statements:
A. In 2000, we exchanged two properties leased by one of our tenants for
two other properties owned by that tenant. The properties relinquished
resulted in the following non-cash changes (in thousands):
Land $( 5,964)
Building $(17,336)
Accumulated depreciation $ 645
The properties received in the exchange resulted in the following non-cash
changes (in thousands):
Land $ 3,933
Building $ 18,722
B. In 1999 and 1998, the acquisition of properties resulted in the
following non-cash changes (dollars in thousands):
<TABLE>
1999 1998
------ ------
<S> <C> <C>
Increases in:
Building $9,057 $1,347
Other liabilities 9,057 1,347
</TABLE>
C. In 1998, the former shareholders of the R.I.C. Advisor, Inc., or the
Advisor, returned 20,279 shares to the Company. This fulfilled the
obligation of the Advisor's shareholders to the Company under an
indemnification agreement entered into by these parties. This transaction
resulted in the following non-cash changes in 1998 (dollars in thousands):
<TABLE>
<S> <C>
Decrease in:
Due from affiliates $ 350
Common stock 20
Paid in capital in excess of par value 413
Increase in:
Interest revenue $ 83
</TABLE>
Page 66
16. Employee Benefit Plan
We have a 401(k) plan covering substantially all of our employees. Under
our 401(k) plan, employees may elect to make contributions to the plan up
to a maximum of 15% of their compensation, subject to limits established by
the IRS Code. We match 50% of the participants' contributions up to a
maximum of six percent of a participant's annual compensation. Our
aggregate matching contributions each year have been immaterial to our
results of operations.
17. Stock Incentive Plan
In 1993, our board of directors approved a stock incentive plan (the "Stock
Plan") designed to attract and retain directors, officers and employees of
the Company by enabling those individuals to participate in the ownership
of the Company. The Stock Plan authorizes the issuance in each calendar
year of up to 3% of the total shares outstanding at the end of such year.
The Stock Plan provides for grants of up to 1,950,308 shares. The Stock
Plan provides for the award (subject to ownership limitations) of a broad
variety of stock-based compensation alternatives such as nonqualified stock
options, incentive stock options, restricted stock and performance awards.
Stock options are granted with an exercise price equal to the underlying
stock's fair market value at the date of grant. Stock options expire 10
years from the date they are granted and vest over service periods of one,
three, four and five years. Prior to December 31, 2000, 618,186 stock
options and 45,372 restricted shares of common stock had been granted and
are outstanding under the Stock Plan.
The following table summarizes our stock option activity for the years
ended December 31, 2000, 1999 and 1998:
<TABLE> 2000 1999
----------------------- -----------------------
Weighted Weighted
Average Average
Number Exercise Number Exercise
of shares Price of Shares Price
-----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Outstanding,
beginning of year 647,848 $24.73 438,604 $24.77
Options granted 142,000 20.65 220,371 24.67
Options exercised (10,000) 21.63 -- --
Options canceled (161,662) 25.02 (11,127) 25.16
--------- ------- --------- -------
Outstanding,
end of year 618,186 $23.77 647,848 $24.73
========= ======= ========= =======
Page 67
17. Stock Incentive Plan (continued)
</TABLE>
<TABLE> 2000 1999
------- -------
Options exercisable,
end of year 438,437 380,064
Weighted average fair
value of each option
granted during the year $1.65 $2.23
1998
-----------------------
Weighted
Average
Options Number Exercise
Outstanding of shares Price
-----------------------------------------------
<S> <C> <C>
Outstanding,
Beginning of year 139,500 $23.09
Options granted 305,413 25.54
Options exercised (2,933) 23.62
Options canceled (3,376) 25.44
------ ------
Outstanding,
end of year 438,604 $24.77
======= ======
Options exercisable,
end of year 196,397
Weighted average fair
value of each option
granted during the year $2.58
</TABLE>
At December 31, 2000, the options exercisable under the Stock Plan had
exercise prices ranging from $20.00 to $26.06 with a weighted average price
of $24.21, and expiration dates ranging from August 2004 to February 2010
with a weighted average remaining term of 7.2 years.
The fair value of each stock option grant was estimated at the date of
grant using the binomial option-pricing model with the following
assumptions:
<TABLE>
2000 1999 1998
------------- -------- --------
<S> <C> <C> <C>
Expected dividend yield 9.70% 7.66% 8.86%
Risk-free interest rate 6.30% 5.04% 5.75%
Volatility 15.00% 15.20% 17.90%
Expected life of options 10 years 10 years 10 years
</TABLE>
Page 68
17. Stock Incentive Plan (continued)
We apply APB Opinion No. 25 in accounting for our Stock Plan and,
accordingly, no compensation cost has been recognized for our stock options
in the consolidated financial statements. Had we determined compensation
cost based on the fair value at the grant date for its stock options under
SFAS No. 123, our net income and diluted net income per common share would
have been as follows:
<TABLE> 2000 1999 1998
-------- -------- --------
<S> <C> <C> <C>
Net income available to common
stockholders (dollars in
thousands)
As reported $ 45,076 $ 41,012 $ 41,304
Pro forma 44,983 40,536 40,914
Diluted net income per common share
As reported $ 1.69 $ 1.53 $ 1.55
Pro forma 1.68 1.51 1.54
</TABLE>
18. Stockholder Rights Plan
In 1998, our board of directors adopted a Stockholder Rights Plan (the
"Rights Plan") that will expire in July 2008. The Rights Plan assigns one
right (a "Right") to purchase one one-hundredth (1/100th) of a share of our
Class A Junior Participating Preferred Stock, par value $1.00 per share
(the "Preferred Stock"), for each share of common stock owned on or issued
after July 1, 1998. Currently, the Rights are not exercisable and do not
trade separately from our common stock.
Under specified circumstances, stockholders will be able to exercise their
Rights if a person or group acquires 15% of our common stock or makes a
tender offer to acquire 15% or more of our common stock. In these
circumstances, stockholders other than the acquirer would be able to
exercise the Rights to purchase our common stock or, in some situations,
the acquirer's stock at a 50% discount.
19. Segment Information
We evaluate performance and make resource allocation decisions on a
property by property basis. For financial reporting purposes, we have
grouped our tenants into 11 reportable segments based upon the business the
tenants are in, except for properties owned by Crest Net Lease that are
grouped in a separate segment. The Crest Net Lease segment is included in
"other non-reportable segments". All of the properties have been acquired
separately and are incorporated into one of the applicable segments.
Revenue is the only component of segment profit and loss we measure. The
accounting policies of the segments are the same as those described in note
2.
Page 69
19. Segment Information (continued)
The following tables set forth certain information regarding the properties
owned by us, classified according to the business of the respective tenants
as of December 31, 2000 (dollars in thousands):
<TABLE>
Revenue
----------------------------------
For the years ended December 31, 2000 1999 1998
-------- -------- --------
<S> <C> <C> <C>
Segment rental revenue:
Automotive parts $ 9,633 $ 8,971 $ 6,686
Automotive service 6,765 6,776 6,052
Child care 28,591 26,428 24,765
Consumer electronics 5,728 5,794 5,676
Convenience stores 9,679 7,557 5,175
Health and fitness 2,806 639 126
Home furnishings 6,741 7,021 6,010
Home improvement 2,276 3,130 46
Restaurants 14,310 13,785 13,768
Theaters 3,175 582 --
Video rental 4,514 4,444 3,185
Other non-reportable segments 22,972 19,143 13,387
Reconciling items:
Gain on sale of real estate
acquired for resale 766 -- --
Interest and other 354 240 256
-------- -------- --------
Total revenue $118,310 $104,510 $ 85,132
======== ======== ========
Page 70
19. Segment Information (continued)
Assets
---------------------
As of December 31, 2000 1999
-------- --------
Segment net real estate:
Automotive parts $ 75,279 $ 75,149
Automotive service 46,811 50,499
Child care 149,838 156,617
Consumer electronics 40,820 49,966
Convenience stores 81,639 83,227
Health and fitness 34,918 26,079
Home furnishings 70,140 67,597
Home improvement 31,687 33,441
Restaurants 82,402 86,904
Theaters 48,003 22,428
Video rental 39,598 40,712
Other non-reportable segments 193,143 174,474
------- -------
Total net real estate 894,278 867,093
Non-real estate assets 40,488 38,311
-------- --------
Total assets $934,766 $905,404
======== ========
</TABLE>
20. Commitments and Contingencies
In the ordinary course of our business, we are party to various legal
actions which we believe are routine in nature and incidental to the
operation of our business. We believe that the outcome of the proceedings
will not have a material adverse effect upon our consolidated statements
taken as a whole.
Page 71
REALTY INCOME CORPORATION
AND SUBSIDIARIES
CONSOLIDATED QUARTERLY FINANCIAL DATA
(dollars in thousands, except per share data)
(not covered by Independent Auditors' Report)
<TABLE>
First Second Third Fourth
Quarter Quarter Quarter Quarter Year
======= ======= ======= ======= =======
<S> <C> <C> <C> <C> <C>
2000
====
Total revenue $28,355 $28,441 $29,885 $31,629 $118,310
Interest expense 7,158 7,471 8,184 8,734 31,547
Depreciation and
amortization
expense 6,748 6,844 6,913 8,498 29,003
Other expenses 2,199 2,201 2,668 2,616 9,684
Income from
operations 12,250 11,925 12,120 11,781 48,076
Net income 12,912 12,863 12,351 16,662 54,788
Net income
available to
common stock-
holders 10,484 10,435 9,923 14,234 45,076
Basic and diluted
net income per
common share 0.39 0.39 0.37 0.54 1.69
Dividends paid per
common share 0.54000 0.54375 0.54750 0.55125 2.18250
1999
====
Total revenue $23,986 $24,902 $26,900 $28,722 $104,510
Interest expense 5,880 6,045 6,100 6,448 24,473
Depreciation and
amortization
expense 6,090 6,237 6,660 6,965 25,952
Other expenses 2,087 2,192 2,232 2,279 8,790
Income from
operations 9,929 10,428 11,908 13,030 45,295
Extraordinary item -- -- -- (355) (355)
Net income 9,929 10,428 13,144 12,740 46,241
Net income
available to
common stock-
holders 9,929 9,799 10,981 10,303 41,012
Basic and diluted
net income per
common share 0.37 0.37 0.41 0.38 1.53
Dividends paid per
common share 0.5100 0.5175 0.5250 0.5325 2.0850
</TABLE> Page 72
ITEM 9: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
---------------------------------------------------------
We have had no disagreements with our independent auditors' on accountancy
or financial disclosure.
PART III
========
ITEM 10: DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
------------------------------------------------------------
The information set forth under the captions "Director Nominees" and
"Officers Of The Company" and "Compliance With Federal Securities Laws" in
the definitive proxy statement for the Annual Meeting of Stockholders
presently scheduled to be held on May 9, 2001, to be filed pursuant to
Regulation 14A.
ITEM 11: EXECUTIVE COMPENSATION
--------------------------------
The information set forth under the caption "Executive Compensation" in the
definitive proxy statement for the Annual Meeting of Stockholders presently
scheduled to be held on May 9, 2001, to be filed pursuant to Regulation
14A.
ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
-------------------------------------------------------------
The information set forth under the caption "Security Ownership of Certain
Beneficial Owners And Management" in the definitive proxy statement for the
Annual Meeting of Stockholders presently scheduled to be held on May 9,
2001, to be filed pursuant to Regulation 14A.
ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
--------------------------------------------------------
The information set forth under the caption "Certain Transactions" in the
definitive proxy statement for the Annual Meeting of Stockholders presently
scheduled to be held on May 9, 2001, to be filed pursuant to Regulation
14A.
Page 73
PART IV
=======
ITEM 14: EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8-K
----------------------------------------------------------------
A. The following documents are filed as part of this report.
1. Financial Statements (see Item 8)
a. Independent Auditors' Report
b. Consolidated Balance Sheets,
December 31, 2000 and 1999
c. Consolidated Statements of Income,
Years ended December 31, 2000, 1999 and 1998
d. Consolidated Statements of
Stockholders' Equity,
Years ended December 31, 2000, 1999 and 1998
e. Consolidated Statements of Cash Flows,
Years ended December 31, 2000, 1999 and 1998
f. Notes to Consolidated Financial Statements
g. Consolidated Quarterly Financial Data,
(unaudited) for 2000 and 1999
2. Financial Statement Schedule is attached to this report. Reference
is made to page F-1 of this report for Schedule III Real Estate and
Accumulated Depreciation.
Schedules not Filed: All schedules, other than those indicated in
the Table of Contents, have been omitted as the required
information is inapplicable or the information is presented in the
financial statements or related notes.
3. Exhibits
2.1 Agreement and Plan of Merger dated as of May 15, 1997 between
Realty Income Corporation, a Delaware corporation, and Realty
Income Maryland, Inc., a Maryland corporation (incorporated by
reference to the Company's Form 8-B12B dated July 29, 1997
("Form 8-B") and incorporated herein by reference).
3.1 Articles of Incorporation of the Company (filed as Appendix B
to the Company's Proxy Statement dated March 28, 1997 ("1997
Proxy Statement") and incorporated herein by reference).
3.2 Bylaws of the Company (filed as Appendix C to the Company's
1997 Proxy Statement and incorporated herein by reference).
Page 74
3.3 Articles Supplementary of the Class A Junior Participating
Preferred Stock of Realty Income Corporation (filed as an
exhibit to Realty Income's registration statement on Form 8-A,
dated June 26, 1998, and incorporated herein by reference).
3.4 Articles Supplementary to the Articles of Incorporation
of Realty Income Corporation classifying and designating
the Class B Preferred Stock (filed as exhibit 4.1 to the
Company's Form 8-K dated May 24, 1999 and incorporated
herein by reference).
3.5 Articles Supplementary to the Articles of Incorporation
of Realty Income Corporation classifying and designating
the Class C Preferred Stock (filed as exhibit 4.1 to the
Company's Form 8-K dated July 29, 1999 and incorporated
herein by reference).
4.1 Pricing Committee Resolutions and Form of 7.75% Notes due 2007
(filed as Exhibit 4.2 to the Company's Form 8-K dated May 5,
1997 and incorporated herein by reference).
4.2 Indenture dated as of May 6, 1997 between the Company and The
Bank of New York (filed as Exhibit 4.1 to the Company's Form
8-K dated May 5, 1997 and incorporated herein by reference).
4.3 First Supplemental Indenture dated as of May 28, 1997, between
the Company and The Bank of New York (filed as Exhibit 4.3 to
the Company's Form 8-B and incorporated herein by reference).
4.4 Rights Agreement, dated as of June 25, 1998, between Realty
Income Corporation and The Bank of New York (filed as an
exhibit to the Company's registration statement on Form 8-A,
dated June 26, 1998, and incorporated herein by reference).
4.5 Pricing Committee Resolutions (filed as an exhibit
to Realty Income's Form 8-K, dated October 27, 1998
and incorporated herein by reference).
4.6 Form of 8.25% Notes due 2008 (filed as an exhibit to
Realty Income's Form 8-K, dated October 27, 1998 and
incorporated herein by reference).
4.7 Indenture dated as of October 28, 1998 between Realty Income
and The Bank of New York (filed) as an exhibit to Realty
Income's Form 8-K, dated October 27, 1998 and incorporated
herein by reference).
4.8 Pricing Committee Resolutions and Form of 8% Notes due 2009
(filed as exhibit 4.2 to Realty Income's Form 8-K, dated
January 21, 1999 and incorporated herein by reference).
Page 75
10.1 $200 million Revolving Credit Agreement dated December 14,
1999 (filed as exhibit 10.1 to the Company's Form 10-K dated
December 31, 1999 and incorporated herein by reference).
10.2 First Amendment dated January 21, 2000 to the $200 million
Revolving Credit Agreement dated December 14, 1999 (filed as
exhibit 10.2 to the Company's Form 10-K dated December 31,
1999 and incorporated herein by reference).
10.3 $25 million Revolving Credit Agreement dated February 1, 2000
(filed as exhibit 10.3 to the Company's Form 10-K dated
December 31, 1999 and incorporated herein by reference).
10.4 First Amendment dated March 24, 2000 to the $25 million
Revolving Credit Agreement dated February 1, 2000
(filed as exhibit 10.3 to the Company's Form 10-Q dated
March 31, 2000 and incorporated herein by reference).
10.5 1994 Stock Option and Incentive Plan (filed as Exhibit
4.1 to the Company's Registration Statement on Form S-8
(registration number 33-95708) and incorporated herein
by reference).
10.6 First Amendment to the 1994 Stock Option and Incentive
Plan, dated June 12, 1997 (filed as Exhibit 10.9 to the
Company's Form 8-B and incorporated herein by reference).
10.7 Second Amendment to the 1994 Stock Option and Incentive
Plan, dated December 16, 1997, (filed as Exhibit 10.9 to the
Company's Form 10-K dated December 31, 1997 and incorporated
herein by reference).
10.8 Management Incentive Plan, filed as Exhibit 10.10 to the
Company's Form 10-K dated December 31, 1997 and incorporated
herein by reference).
10.9 Form of Nonqualified Stock Option Agreement for Independent
Directors, (filed as Exhibit 10.11 to the Company's Form 10-K
dated December 31, 1997 and incorporated herein by reference).
10.10 Form of Indemnification Agreement entered into between
the Company and the executive officers of the Company
(filed as Exhibit 10.1 to the Company's Form 8-K dated
November 21, 1997 and incorporated herein by reference).
10.11 Form of Indemnification Agreement entered into between
the Company and each director on the board of directors
of the Company (filed as Exhibit 10.2 to the Company's
Form 8-K dated November 21, 1997 and incorporated herein
by reference).
Page 76
10.12 Form of Employment Agreement between the Company and its
Executive Officers (incorporated by reference to the
Company's Form 8-B12B dated July 29, 1997 and incorporated
herein by reference).
10.13 $25 million Demand Promissory Note dated February 1, 2000
between Realty Income Corporation and Crest Net Lease, Inc.
(filed as exhibit 10.1 to the Company's Form 10-Q dated
March 31, 2000 and incorporated herein by reference).
10.14 Master Management Agreement dated January 1, 2000 between
Realty Income Corporation and Crest Net Lease, Inc.
(filed as exhibit 10.2 to the Company's Form 10-Q dated
March 31, 2000 and incorporated herein by reference).
12.1 Statement re computation of ratios, filed herein.
21.1 Subsidiaries of the Company as of January 1, 2001, filed
herein.
23.1 Consent of KPMG LLP, filed herein.
B. The Registrant filed no reports on Form 8-K during the last quarter of
the period covered by this report.
Page 77
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
REALTY INCOME CORPORATION
By: /s/THOMAS A. LEWIS
------------------------------------
Thomas A. Lewis
Vice Chairman of the Board of Directors,
Chief Executive Officer and President
Date: March 28, 2001
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons on behalf of the registrant
and in the capacities and on the dates indicated.
By: /s/WILLIAM E. CLARK
------------------------------------
William E. Clark
Chairman of the Board of Directors
Date: March 28, 2001
By: /s/THOMAS A. LEWIS
------------------------------------
Thomas A. Lewis
Vice Chairman of the Board of Directors,
Chief Executive Officer and President
(Principal Executive Officer)
Date: March 28, 2001
By: /s/DONALD R. CAMERON
------------------------------------
Donald R. Cameron
Director
Date: March 28, 2001
Page 78
SIGNATURES (continued)
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons on behalf of the registrant
and in the capacities and on the dates indicated.
By: /s/ROGER P. KUPPINGER
------------------------------------
Roger P. Kuppinger
Director
Date: March 28, 2001
By: /s/MICHAEL D. MCKEE
------------------------------------
Michael D. McKee
Director
Date: March 28, 2001
By: /s/WILLARD H. SMITH JR
------------------------------------
Willard H. Smith Jr
Director
Date: March 28, 2001
By: /s/Kathleen R. Allen, Ph.D.
------------------------------------
Kathleen R. Allen, Ph.D.
Director
Date: March 28, 2001
By: /s/GARY MALINO
------------------------------------
Gary Malino
Executive Vice President, Chief Financial Officer and Treasurer
(Principal Financial Officer)
Date: March 28, 2001
Page 79
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons on behalf of the registrant
and in the capacities and on the dates indicated.
By: /s/GREGORY J. FAHEY
------------------------------------
Gregory J. Fahey
Vice President, Controller
(Principal Accounting Officer)
Date: March 28, 2001
EXHIBIT INDEX
=============
Exhibit No. Description
----------- -----------
12.1 Statement re computation of ratios
21.1 Subsidiaries of the Company as of January 1, 2001
23.1 Consent of KPMG LLP
Page 80
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
<TABLE>
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
----------------------- ----------------------
Buildings,
Improvements
and
Description Acquisition Carrying
(Note 1) Land Fees Improvements Costs
------------------- --------- ----------- ------------ ------
Apparel Stores
--------------
<S> <C> <C> <C> <C>
Danbury CT 1,083,296 6,217,688 None None
Manchester CT 1,250,464 5,917,037 None None
Manchester CT 771,660 3,653,539 None None
Staten Island NY 4,202,093 3,385,021 None None
Automotive Parts
----------------
Millbrook AL 108,000 517,941 None 65
Montgomery AL 254,465 502,350 None None
Blytheville AR 137,913 509,447 None None
Osceola AR 88,759 520,047 None None
Wynne AR 70,000 547,576 None None
Phoenix AZ 231,000 513,057 None None
Phoenix AZ 71,750 159,359 None None
Phoenix AZ 222,950 495,178 None None
Tucson AZ 194,250 431,434 None None
Tucson AZ 178,297 396,004 None None
Yuma AZ 120,750 268,190 None None
Grass Valley CA 325,000 384,955 None None
Jackson CA 300,000 390,849 None None
Sacramento CA 210,000 466,419 None None
Turlock CA 222,250 493,627 None None
Arvada CO 301,489 900,892 None None
Aurora CO 221,691 492,382 None None
Aurora CO 353,283 1,110,170 None None
Canon City CO 66,500 147,699 None None
Colorado Springs CO 280,193 622,317 None None
Colorado Springs CO 192,988 433,542 None None
Denver CO 141,400 314,056 None None
Denver CO 315,000 699,623 None None
Denver CO 283,500 629,666 None None
Littleton CO 252,925 561,758 None None
Westminster CO 526,620 811,935 None None
Smyrna DE 232,273 472,855 None None
Tampa FL 427,395 472,030 None None
Council Bluffs IA 194,355 431,668 None None
Page F-1
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
------------------- ------------ ------------ ----------
Apparel Stores
--------------
Danbury CT 1,083,296 6,217,688 7,300,984
Manchester CT 1,250,464 5,917,037 7,167,501
Manchester CT 771,660 3,653,539 4,425,199
Staten Island NY 4,202,093 3,385,021 7,587,114
Automotive Parts
----------------
Millbrook AL 108,000 518,006 626,006
Montgomery AL 254,465 502,350 756,815
Blytheville AR 137,913 509,447 647,360
Osceola AR 88,759 520,047 608,806
Wynne AR 70,000 547,576 617,576
Phoenix AZ 231,000 513,057 744,057
Phoenix AZ 71,750 159,359 231,109
Phoenix AZ 222,950 495,178 718,128
Tucson AZ 194,250 431,434 625,684
Tucson AZ 178,297 396,004 574,301
Yuma AZ 120,750 268,190 388,940
Grass Valley CA 325,000 384,955 709,955
Jackson CA 300,000 390,849 690,849
Sacramento CA 210,000 466,419 676,419
Turlock CA 222,250 493,627 715,877
Arvada CO 301,489 900,892 1,202,381
Aurora CO 221,691 492,382 714,073
Aurora CO 353,283 1,110,170 1,463,453
Canon City CO 66,500 147,699 214,199
Colorado Springs CO 280,193 622,317 902,510
Colorado Springs CO 192,988 433,542 626,530
Denver CO 141,400 314,056 455,456
Denver CO 315,000 699,623 1,014,623
Denver CO 283,500 629,666 913,166
Littleton CO 252,925 561,758 814,683
Westminster CO 526,620 811,935 1,338,555
Smyrna DE 232,273 472,855 705,128
Tampa FL 427,395 472,030 899,425
Council Bluffs IA 194,355 431,668 626,023
Page F-2
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which
in latest
Income
Accumulated Statement
Description Depreciation Date of Date is Computed
(Note 1) (Note 4) Construction Acquired (in Months)
------------------- ------------ ------------ -------- -----------
Apparel Stores
--------------
Danbury CT 818,323 09/30/97 300
Manchester CT 660,442 03/26/98 300
Manchester CT 407,769 03/26/98 300
Staten Island NY 377,683 03/26/98 300
Automotive Parts
----------------
Millbrook AL 40,510 12/10/98 01/21/99 300
Montgomery AL 51,071 06/30/98 300
Blytheville AR 51,792 06/30/98 300
Osceola AR 52,870 06/30/98 300
Wynne AR 40,950 11/10/98 02/24/99 300
Phoenix AZ 249,623 11/09/87 300
Phoenix AZ 77,534 11/19/87 300
Phoenix AZ 208,083 11/02/89 300
Tucson AZ 211,191 10/30/87 300
Tucson AZ 162,435 01/19/90 300
Yuma AZ 110,007 01/23/90 300
Grass Valley CA 178,871 05/20/88 300
Jackson CA 178,313 05/17/88 300
Sacramento CA 226,931 11/25/87 300
Turlock CA 238,702 12/30/87 300
Arvada CO 4,760 09/22/00 11/18/99 300
Aurora CO 201,968 01/29/90 300
Aurora CO -- 01/03/01 03/10/00 300
Canon City CO 71,862 11/12/87 300
Colorado Springs CO 255,265 01/23/90 300
Colorado Springs CO 136,280 05/20/93 300
Denver CO 152,800 11/18/87 300
Denver CO 327,954 05/16/88 300
Denver CO 295,161 05/27/88 300
Littleton CO 268,316 02/12/88 300
Westminster CO -- 01/12/01 01/18/00 300
Smyrna DE 44,922 08/07/98 300
Tampa FL 43,429 06/10/98 12/05/97 300
Council Bluffs IA 202,349 05/19/88 300
Page F-3
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
----------------------- ----------------------
Buildings,
Improvements
and
Description Acquisition Carrying
(Note 1) Land Fees Improvements Costs
------------------- --------- ----------- ------------ ------
Automotive Parts
----------------
Boise ID 158,400 351,812 None None
Boise ID 190,080 422,172 None None
Coeur D'Alene ID 165,900 368,468 None None
Lewiston ID 138,950 308,612 None None
Moscow ID 117,250 260,417 None None
Nampa ID 183,743 408,101 None None
Sioux Falls ID 332,979 498,108 None None
Twin Falls ID 190,080 422,172 None None
Brazil IN 183,952 453,831 None None
Princeton IN 134,209 560,113 None None
Vincennes IN 185,312 489,779 None None
Kansas City KS 185,955 413,014 None None
Kansas City KS 222,000 455,881 None None
Billerica MA 399,043 462,240 None None
Alma MI 155,000 600,282 None None
Lansing MI 265,000 574,931 None None
Sturgis MI 109,558 550,274 None None
Eagan MN 902,443 845,536 None None
Blue Springs MO 222,569 494,333 None None
Grandview MO 347,150 711,024 None None
Independence MO 210,643 467,844 None None
Kansas City MO 210,070 466,571 None None
Kansas City MO 168,350 373,910 None None
Kansas City MO 248,500 551,927 None None
Batesville MS 190,124 485,670 None None
Horn Lake MS 142,702 514,779 None None
Jackson MS 248,483 572,522 None None
Richland MS 243,565 558,645 None None
Missoula MT 163,100 362,249 None None
Concord NC 237,688 357,976 None 5,517
Kearney NE 173,950 344,393 None None
Omaha NE 196,000 435,321 None None
Omaha NE 199,100 412,042 None None
Omaha NE 253,128 810,922 None None
Albuquerque NM 80,500 178,794 None None
Rio Rancho NM 211,577 469,923 None None
Page F-4
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
------------------- ------------ ------------ ----------
Automotive Parts
----------------
Boise ID 158,400 351,812 510,212
Boise ID 190,080 422,172 612,252
Coeur D'Alene ID 165,900 368,468 534,368
Lewiston ID 138,950 308,612 447,562
Moscow ID 117,250 260,417 377,667
Nampa ID 183,743 408,101 591,844
Sioux Falls ID 332,979 498,108 831,087
Twin Falls ID 190,080 422,172 612,252
Brazil IN 183,952 453,831 637,783
Princeton IN 134,209 560,113 694,322
Vincennes IN 185,312 489,779 675,091
Kansas City KS 185,955 413,014 598,969
Kansas City KS 222,000 455,881 677,881
Billerica MA 399,043 462,240 861,283
Alma MI 155,000 600,282 755,282
Lansing MI 265,000 574,931 839,931
Sturgis MI 109,558 550,274 659,832
Eagan MN 902,443 845,536 1,747,979
Blue Springs MO 222,569 494,333 716,902
Grandview MO 347,150 711,024 1,058,174
Independence MO 210,643 467,844 678,487
Kansas City MO 210,070 466,571 676,641
Kansas City MO 168,350 373,910 542,260
Kansas City MO 248,500 551,927 800,427
Batesville MS 190,124 485,670 675,794
Horn Lake MS 142,702 514,779 657,481
Jackson MS 248,483 572,522 821,005
Richland MS 243,565 558,645 802,210
Missoula MT 163,100 362,249 525,349
Concord NC 237,688 363,493 601,181
Kearney NE 173,950 344,393 518,343
Omaha NE 196,000 435,321 631,321
Omaha NE 199,100 412,042 611,142
Omaha NE 253,128 810,922 1,064,050
Albuquerque NM 80,500 178,794 259,294
Rio Rancho NM 211,577 469,923 681,500
Page F-5
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which
in latest
Income
Accumulated Statement
Description Depreciation Date of Date is Computed
(Note 1) (Note 4) Construction Acquired (in Months)
------------------- ------------ ------------ -------- -----------
Automotive Parts
----------------
Boise ID 164,915 05/06/88 300
Boise ID 197,896 05/06/88 300
Coeur D'Alene ID 181,465 09/21/87 300
Lewiston ID 151,987 09/16/87 300
Moscow ID 128,252 09/14/87 300
Nampa ID 191,302 05/06/88 300
Sioux Falls ID 47,334 06/01/99 02/27/98 300
Twin Falls ID 197,896 05/06/88 300
Brazil IN 32,519 03/31/99 300
Princeton IN 40,136 03/31/99 300
Vincennes IN 35,095 03/31/99 300
Kansas City KS 193,605 05/13/88 300
Kansas City KS 213,624 05/16/88 300
Billerica MA 68,468 04/02/97 300
Alma MI 38,957 04/29/99 02/10/99 300
Lansing MI 43,153 04/30/99 12/03/98 300
Sturgis MI 44,916 12/30/98 300
Eagan MN 80,352 02/20/98 300
Blue Springs MO 211,405 07/31/89 300
Grandview MO 65,210 08/20/98 02/20/98 300
Independence MO 200,076 07/31/89 300
Kansas City MO 218,709 05/13/88 300
Kansas City MO 175,274 05/26/88 300
Kansas City MO 250,270 10/25/88 300
Batesville MS 47,758 07/27/98 300
Horn Lake MS 52,334 06/30/98 300
Jackson MS 25,775 11/16/99 300
Richland MS 23,292 12/21/99 300
Missoula MT 177,325 10/30/87 300
Concord NC 35,532 05/27/98 11/05/97 300
Kearney NE 137,269 05/01/90 300
Omaha NE 204,061 05/26/88 300
Omaha NE 191,607 05/27/88 300
Omaha NE 41,946 07/22/99 03/04/99 300
Albuquerque NM 87,522 10/29/87 300
Rio Rancho NM 224,451 02/26/88 300
Page F-6
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
----------------------- ----------------------
Buildings,
Improvements
and
Description Acquisition Carrying
(Note 1) Land Fees Improvements Costs
------------------- --------- ----------- ------------ ------
Automotive Parts
----------------
Sante Fe NM 70,000 155,473 None None
Las Vegas NV 161,000 357,585 None None
Reno NV 456,000 562,344 None None
Canton OH 396,560 597,553 None None
Hamilton OH 183,000 515,727 None None
Hubbard OH 147,043 481,217 None None
Oklahoma City OK 509,370 752,691 None None
Oklahoma City OK 404,815 771,625 None None
Albany OR 152,250 338,153 None 3
Beaverton OR 210,000 466,419 None 3
Corvallis OR 152,250 338,153 None 3
Eugene OR 194,880 432,837 None 1,333
Oak Grove OR 180,250 400,336 None 3
Portland OR 190,750 423,664 None 3
Portland OR 147,000 326,493 None 3
Portland OR 210,000 466,412 None 3
Salem OR 136,500 303,170 None 3
Tigard OR 164,500 365,361 None 3
Butler PA 339,929 633,078 None None
Dover PA 265,112 593,341 None None
Enola PA 220,228 546,026 None None
Hanover PA 132,500 719,511 None None
Harrisburg PA 327,781 608,291 None None
Harrisburg PA 283,417 352,473 None None
Lancaster PA 199,899 774,838 None None
New Castle PA 180,009 525,774 None None
Reading PA 379,000 658,722 None None
Columbia TN 273,120 431,716 None None
Memphis TN 197,708 507,647 None None
Amarillo TX 140,000 419,734 None None
Austin TX 185,454 411,899 None None
Dallas TX 191,267 424,811 None None
El Paso TX 66,150 146,922 None None
El Paso TX 56,350 125,156 None None
Garland TX 242,887 539,461 None None
Harlingen TX 134,599 298,948 None None
Page F-7
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
------------------- ------------ ------------ ----------
Automotive Parts
----------------
Sante Fe NM 70,000 155,473 225,473
Las Vegas NV 161,000 357,585 518,585
Reno NV 456,000 562,344 1,018,344
Canton OH 396,560 597,553 994,113
Hamilton OH 183,000 515,727 698,727
Hubbard OH 147,043 481,217 628,260
Oklahoma City OK 509,370 752,691 1,262,061
Oklahoma City OK 404,815 771,625 1,176,440
Albany OR 152,250 338,156 490,406
Beaverton OR 210,000 466,422 676,422
Corvallis OR 152,250 338,156 490,406
Eugene OR 194,880 434,170 629,050
Oak Grove OR 180,250 400,339 580,589
Portland OR 190,750 423,667 614,417
Portland OR 147,000 326,496 473,496
Portland OR 210,000 466,415 676,415
Salem OR 136,500 303,173 439,673
Tigard OR 164,500 365,364 529,864
Butler PA 339,929 633,078 973,007
Dover PA 265,112 593,341 858,453
Enola PA 220,228 546,026 766,254
Hanover PA 132,500 719,511 852,011
Harrisburg PA 327,781 608,291 936,072
Harrisburg PA 283,417 352,473 635,890
Lancaster PA 199,899 774,838 974,737
New Castle PA 180,009 525,774 705,783
Reading PA 379,000 658,722 1,037,722
Columbia TN 273,120 431,716 704,836
Memphis TN 197,708 507,647 705,355
Amarillo TX 140,000 419,734 559,734
Austin TX 185,454 411,899 597,353
Dallas TX 191,267 424,811 616,078
El Paso TX 66,150 146,922 213,072
El Paso TX 56,350 125,156 181,506
Garland TX 242,887 539,461 782,348
Harlingen TX 134,599 298,948 433,547
Page F-8
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which
in latest
Income
Accumulated Statement
Description Depreciation Date of Date is Computed
(Note 1) (Note 4) Construction Acquired (in Months)
------------------- ------------ ------------ -------- -----------
Automotive Parts
----------------
Sante Fe NM 76,106 10/29/87 300
Las Vegas NV 175,042 10/29/87 300
Reno NV 263,503 05/26/88 300
Canton OH 56,769 08/14/98 300
Hamilton OH 35,361 04/07/99 12/03/98 300
Hubbard OH 48,923 06/30/98 300
Oklahoma City OK 46,587 04/14/99 09/24/98 300
Oklahoma City OK 47,739 04/09/99 10/16/98 300
Albany OR 167,544 08/24/87 300
Beaverton OR 231,096 08/26/87 300
Corvallis OR 167,544 08/12/87 300
Eugene OR 206,738 02/10/88 300
Oak Grove OR 198,353 08/06/87 300
Portland OR 209,912 08/12/87 300
Portland OR 161,767 08/26/87 300
Portland OR 229,703 09/01/87 300
Salem OR 150,210 08/20/87 300
Tigard OR 181,025 08/26/87 300
Butler PA 60,144 08/07/98 300
Dover PA 60,322 06/30/98 300
Enola PA 46,418 11/10/98 300
Hanover PA 39,733 07/26/99 05/13/99 300
Harrisburg PA 61,842 06/30/98 300
Harrisburg PA 32,314 09/30/98 300
Lancaster PA 73,610 08/14/98 300
New Castle PA 53,452 06/30/98 300
Reading PA 40,766 06/09/99 12/04/98 300
Columbia TN 26,621 06/30/99 300
Memphis TN 46,538 09/30/98 300
Amarillo TX 191,548 09/12/88 300
Austin TX 167,759 02/06/90 300
Dallas TX 174,251 01/26/90 300
El Paso TX 71,920 10/27/87 300
El Paso TX 61,265 10/27/87 300
Garland TX 221,279 01/19/90 300
Harlingen TX 122,624 01/17/90 300
Page F-9
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
----------------------- ----------------------
Buildings,
Improvements
and
Description Acquisition Carrying
(Note 1) Land Fees Improvements Costs
------------------- --------- ----------- ------------ ------
Automotive Parts
----------------
Houston TX 151,018 335,417 None None
Leon Valley TX 178,221 395,834 None None
Lubbock TX 42,000 93,284 None None
Lubbock TX 49,000 108,831 None None
Midland TX 45,500 101,058 None None
Odessa TX 50,750 112,718 None None
Pasadena TX 107,391 238,519 None None
Plano TX 187,564 417,157 700 None
San Antonio TX 245,164 544,518 None None
Bountiful UT 183,750 408,115 None None
Provo UT 125,395 278,507 None None
Bellevue WA 185,500 411,997 None None
Bellingham WA 168,000 373,133 None None
Bothell WA 199,500 443,098 None None
Hazel Dell WA 168,000 373,135 None None
Kennewick WA 161,350 358,365 None None
Kent WA 199,500 443,091 None None
Lacey WA 171,150 380,125 None None
Marysville WA 168,000 373,135 None None
Moses Lake WA 138,600 307,831 None None
Pasco WA 161,700 359,142 None None
Puyallup WA 173,250 384,795 None None
Redmond WA 196,000 435,317 None None
Renton WA 185,500 412,003 None None
Richland WA 161,700 359,142 None None
Seattle WA 162,400 360,697 None None
Silverdale WA 183,808 419,777 None None
Spanaway WA 189,000 419,777 None None
Spokane WA 66,150 146,921 None None
Tacoma WA 187,111 415,579 None None
Tacoma WA 191,800 425,996 None None
Tacoma WA 196,000 435,324 None None
Vancouver WA 180,250 400,343 None None
Walla Walla WA 170,100 377,793 None None
Wenatchee WA 148,400 329,602 None None
Woodinville WA 171,500 380,908 None None
Page F-10
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
------------------- ------------ ------------ ----------
Automotive Parts
----------------
Houston TX 151,018 335,417 486,435
Leon Valley TX 178,221 395,834 574,055
Lubbock TX 42,000 93,284 135,284
Lubbock TX 49,000 108,831 157,831
Midland TX 45,500 101,058 146,558
Odessa TX 50,750 112,718 163,468
Pasadena TX 107,391 238,519 345,910
Plano TX 187,564 417,857 605,421
San Antonio TX 245,164 544,518 789,682
Bountiful UT 183,750 408,115 591,865
Provo UT 125,395 278,507 403,902
Bellevue WA 185,500 411,997 597,497
Bellingham WA 168,000 373,133 541,133
Bothell WA 199,500 443,098 642,598
Hazel Dell WA 168,000 373,135 541,135
Kennewick WA 161,350 358,365 519,715
Kent WA 199,500 443,091 642,591
Lacey WA 171,150 380,125 551,275
Marysville WA 168,000 373,135 541,135
Moses Lake WA 138,600 307,831 446,431
Pasco WA 161,700 359,142 520,842
Puyallup WA 173,250 384,795 558,045
Redmond WA 196,000 435,317 631,317
Renton WA 185,500 412,003 597,503
Richland WA 161,700 359,142 520,842
Seattle WA 162,400 360,697 523,097
Silverdale WA 183,808 419,777 603,585
Spanaway WA 189,000 419,777 608,777
Spokane WA 66,150 146,921 213,071
Tacoma WA 187,111 415,579 602,690
Tacoma WA 191,800 425,996 617,796
Tacoma WA 196,000 435,324 631,324
Vancouver WA 180,250 400,343 580,593
Walla Walla WA 170,100 377,793 547,893
Wenatchee WA 148,400 329,602 478,002
Woodinville WA 171,500 380,908 552,408
Page F-11
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which
in latest
Income
Accumulated Statement
Description Depreciation Date of Date is Computed
(Note 1) (Note 4) Construction Acquired (in Months)
------------------- ------------ ------------ -------- -----------
Automotive Parts
----------------
Houston TX 137,583 01/25/90 300
Leon Valley TX 162,366 01/17/90 300
Lubbock TX 45,663 10/26/87 300
Lubbock TX 53,274 10/29/87 300
Midland TX 49,468 10/27/87 300
Odessa TX 55,176 10/26/87 300
Pasadena TX 97,837 01/24/90 300
Plano TX 170,947 01/18/90 300
San Antonio TX 221,771 02/14/90 300
Bountiful UT 167,402 01/30/90 300
Provo UT 114,239 01/25/90 300
Bellevue WA 204,131 08/06/87 300
Bellingham WA 184,874 08/20/87 300
Bothell WA 219,541 08/20/87 300
Hazel Dell WA 171,453 05/23/88 300
Kennewick WA 177,559 08/26/87 300
Kent WA 219,537 08/06/87 300
Lacey WA 188,339 08/13/87 300
Marysville WA 184,877 08/20/87 300
Moses Lake WA 152,520 08/12/87 300
Pasco WA 177,943 08/18/87 300
Puyallup WA 189,508 09/15/87 300
Redmond WA 214,390 09/17/87 300
Renton WA 202,906 09/15/87 300
Richland WA 177,943 08/13/87 300
Seattle WA 178,714 08/20/87 300
Silverdale WA 206,735 09/16/87 300
Spanaway WA 207,985 08/25/87 300
Spokane WA 71,482 11/18/87 300
Tacoma WA 170,464 01/25/90 300
Tacoma WA 211,067 08/18/87 300
Tacoma WA 213,096 10/15/87 300
Vancouver WA 198,356 08/20/87 300
Walla Walla WA 187,184 08/06/87 300
Wenatchee WA 163,308 08/25/87 300
Woodinville WA 188,727 08/20/87 300
Page F-12
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
----------------------- ----------------------
Buildings,
Improvements
and
Description Acquisition Carrying
(Note 1) Land Fees Improvements Costs
------------------- --------- ----------- ------------ ------
Automotive Parts
----------------
Brown Deer WI 257,408 802,141 None None
Delafield WI 324,574 772,702 None None
Madison WI 452,630 811,977 None None
Oak Creek WI 420,465 852,408 None None
Automotive Service
------------------
Flagstaff AZ 144,821 417,485 None None
Chula Vista CA 313,293 409,654 None 16
Arvada CO 201,565 339,038 None 245
Broomfield CO 154,930 503,626 None 245
Denver CO 79,717 369,587 None None
Denver CO 341,726 433,341 None 274
Thornton CO 276,084 415,464 None None
Hartford CT 248,540 482,460 None None
Southington CT 225,882 672,910 None None
Ft. Lauderdale FL 254,090 465,890 None 822
Jacksonville FL 76,585 355,066 None None
Lakeland FL 500,000 645,402 None None
Lauderdale Lakes FL 65,987 305,931 None None
Seminole FL 68,000 315,266 None None
Sunrise FL 80,253 372,070 None None
Tampa FL 70,000 324,538 None None
Tampa FL 67,000 310,629 None None
Tampa FL 86,502 401,041 None None
Atlanta GA 55,840 258,889 None None
Atlanta GA 78,646 364,625 None None
Bogart GA 66,807 309,733 None None
Duluth GA 222,275 316,925 None None
Gainesville GA 53,589 248,452 None None
Marietta GA 60,900 293,461 None None
Marietta GA 69,561 346,024 None None
Riverdale GA 58,444 270,961 None None
Rome GA 56,454 261,733 None None
Anderson IN 232,170 385,661 None None
Indianapolis IN 231,384 428,307 None None
Olathe KS 217,995 367,055 None None
Page F-13
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
------------------- ------------ ------------ ----------
Automotive Parts
----------------
Brown Deer WI 257,408 802,141 1,059,549
Delafield WI 324,574 772,702 1,097,276
Madison WI 452,630 811,977 1,264,607
Oak Creek WI 420,465 852,408 1,272,873
Automotive Service
------------------
Flagstaff AZ 144,821 417,485 562,306
Chula Vista CA 313,293 409,670 722,963
Arvada CO 201,565 339,283 540,848
Broomfield CO 154,930 503,871 658,801
Denver CO 79,717 369,587 449,304
Denver CO 341,726 433,615 775,341
Thornton CO 276,084 415,464 691,548
Hartford CT 248,540 482,460 731,000
Southington CT 225,882 672,910 898,792
Ft. Lauderdale FL 254,090 466,712 720,802
Jacksonville FL 76,585 355,066 431,651
Lakeland FL 500,000 645,402 1,145,402
Lauderdale Lakes FL 65,987 305,931 371,918
Seminole FL 68,000 315,266 383,266
Sunrise FL 80,253 372,070 452,323
Tampa FL 70,000 324,538 394,538
Tampa FL 67,000 310,629 377,629
Tampa FL 86,502 401,041 487,543
Atlanta GA 55,840 258,889 314,729
Atlanta GA 78,646 364,625 443,271
Bogart GA 66,807 309,733 376,540
Duluth GA 222,275 316,925 539,200
Gainesville GA 53,589 248,452 302,041
Marietta GA 60,900 293,461 354,361
Marietta GA 69,561 346,024 415,585
Riverdale GA 58,444 270,961 329,405
Rome GA 56,454 261,733 318,187
Anderson IN 232,170 385,661 617,831
Indianapolis IN 231,384 428,307 659,691
Olathe KS 217,995 367,055 585,050
Page F-14
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which
in latest
Income
Accumulated Statement
Description Depreciation Date of Date is Computed
(Note 1) (Note 4) Construction Acquired (in Months)
------------------- ------------ ------------ -------- -----------
Automotive Parts
----------------
Brown Deer WI 65,570 12/15/98 07/16/98 300
Delafield WI 39,268 07/29/99 02/26/99 300
Madison WI 71,780 10/20/98 04/07/98 300
Oak Creek WI 75,355 08/07/98 03/20/98 300
Automotive Service
------------------
Flagstaff AZ 39,246 09/30/98 08/29/97 300
Chula Vista CA 75,786 05/01/96 01/19/96 300
Arvada CO 59,332 08/28/96 04/09/96 300
Broomfield CO 88,135 08/22/96 03/15/96 300
Denver CO 252,181 10/08/85 300
Denver CO 55,734 09/25/97 06/12/97 300
Thornton CO 65,624 12/31/96 10/31/96 300
Hartford CT 82,822 09/30/96 300
Southington CT 95,218 06/06/97 300
Ft. Lauderdale FL 47,444 05/13/98 12/24/97 300
Jacksonville FL 238,636 12/23/85 300
Lakeland FL 59,351 06/04/98 12/31/97 300
Lauderdale Lakes FL 203,302 02/19/86 300
Seminole FL 211,886 12/23/85 300
Sunrise FL 248,276 02/14/86 300
Tampa FL 218,118 12/27/85 300
Tampa FL 208,770 12/27/85 300
Tampa FL 258,885 07/23/86 300
Atlanta GA 174,972 11/27/85 300
Atlanta GA 245,060 12/18/85 300
Bogart GA 208,168 12/20/85 300
Duluth GA 37,939 10/24/97 06/20/97 300
Gainesville GA 166,980 12/19/85 300
Marietta GA 197,230 12/26/85 300
Marietta GA 225,653 06/03/86 300
Riverdale GA 181,087 01/15/86 300
Rome GA 175,906 12/19/85 300
Anderson IN 46,925 12/19/97 300
Indianapolis IN 73,526 09/27/96 300
Olathe KS 53,220 04/22/97 11/11/96 300
Page F-15
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
----------------------- ----------------------
Buildings,
Improvements
and
Description Acquisition Carrying
(Note 1) Land Fees Improvements Costs
------------------- --------- ----------- ------------ ------
Automotive Service
------------------
Louisville KY 56,054 259,881 None None
Newport KY 323,511 289,017 None None
Lenox MA 287,769 535,273 None None
Clinton MD 70,880 328,620 None None
Minneapolis MN 58,000 268,903 None 182
Independence MO 297,641 233,152 None None
Durham NC 354,676 361,203 None None
Durham NC 55,074 255,336 None None
Fayetteville NC 224,326 257,733 None None
Garner NC 218,294 319,334 None 443
Matthews NC 295,580 338,472 None 420
Pineville NC 254,460 355,630 None None
Raleigh NC 89,145 413,301 None None
Raleigh NC 398,694 263,621 None None
Albion NY 170,589 317,424 None None
Dansville NY 181,664 337,991 None None
East Amherst NY 260,708 484,788 None None
East Syracuse NY 250,609 466,264 None None
Johnson City NY 242,863 451,877 None None
Wellsville NY 161,331 300,231 None None
West Amherst NY 268,692 499,619 None None
Akron OH 139,126 460,334 None None
Beavercreek OH 205,000 492,538 None None
Centerville OH 305,000 420,448 None None
Cincinnati OH 293,005 201,340 None None
Columbus OH 71,098 329,627 None None
Columbus OH 75,761 351,247 None None
Columbus OH 245,036 470,468 None None
Dayton OH 70,000 324,538 None None
Eastlake OH 321,347 459,774 None None
Fairfield OH 323,408 235,024 None None
Findlay OH 283,515 397,004 None None
Hamilton OH 252,608 413,279 None None
Huber Heights OH 282,000 449,381 None None
Miamisburg OH 63,996 296,701 None None
Milford OH 353,324 269,997 None None
Page F-16
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
------------------- ------------ ------------ ----------
Automotive Service
------------------
Louisville KY 56,054 259,881 315,935
Newport KY 323,511 289,017 612,528
Lenox MA 287,769 535,273 823,042
Clinton MD 70,880 328,620 399,500
Minneapolis MN 58,000 269,085 327,085
Independence MO 297,641 233,152 530,793
Durham NC 354,676 361,203 715,879
Durham NC 55,074 255,336 310,410
Fayetteville NC 224,326 257,733 482,059
Garner NC 218,294 319,777 538,071
Matthews NC 295,580 338,892 634,472
Pineville NC 254,460 355,630 610,090
Raleigh NC 89,145 413,301 502,446
Raleigh NC 398,694 263,621 662,315
Albion NY 170,589 317,424 488,013
Dansville NY 181,664 337,991 519,655
East Amherst NY 260,708 484,788 745,496
East Syracuse NY 250,609 466,264 716,873
Johnson City NY 242,863 451,877 694,740
Wellsville NY 161,331 300,231 461,562
West Amherst NY 268,692 499,619 768,311
Akron OH 139,126 460,334 599,460
Beavercreek OH 205,000 492,538 697,538
Centerville OH 305,000 420,448 725,448
Cincinnati OH 293,005 201,340 494,345
Columbus OH 71,098 329,627 400,725
Columbus OH 75,761 351,247 427,008
Columbus OH 245,036 470,468 715,504
Dayton OH 70,000 324,538 394,538
Eastlake OH 321,347 459,774 781,121
Fairfield OH 323,408 235,024 558,432
Findlay OH 283,515 397,004 680,519
Hamilton OH 252,608 413,279 665,887
Huber Heights OH 282,000 449,381 731,381
Miamisburg OH 63,996 296,701 360,697
Milford OH 353,324 269,997 623,321
Page F-17
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which
in latest
Income
Accumulated Statement
Description Depreciation Date of Date is Computed
(Note 1) (Note 4) Construction Acquired (in Months)
------------------- ------------ ------------ -------- -----------
Automotive Service
------------------
Louisville KY 174,663 12/17/85 300
Newport KY 37,998 09/17/97 300
Lenox MA 38,350 03/31/99 300
Clinton MD 222,995 11/15/85 300
Minneapolis MN 180,727 12/18/85 300
Independence MO 37,693 12/20/96 300
Durham NC 47,515 08/29/97 03/31/97 300
Durham NC 173,268 11/13/85 300
Fayetteville NC 31,340 12/03/97 300
Garner NC 38,248 01/05/98 06/20/97 300
Matthews NC 30,049 08/28/98 02/27/98 300
Pineville NC 46,783 08/28/97 04/16/97 300
Raleigh NC 280,887 10/28/85 300
Raleigh NC 33,796 10/01/97 300
Albion NY 22,741 03/31/99 300
Dansville NY 24,215 03/31/99 300
East Amherst NY 34,735 03/31/99 300
East Syracuse NY 33,404 03/31/99 300
Johnson City NY 32,373 03/31/99 300
Wellsville NY 21,508 03/31/99 300
West Amherst NY 35,798 03/31/99 300
Akron OH 60,572 09/18/97 300
Beavercreek OH 74,701 02/13/97 09/09/96 300
Centerville OH 74,980 07/24/96 06/28/96 300
Cincinnati OH 26,439 09/17/97 300
Columbus OH 224,915 10/02/85 300
Columbus OH 238,714 10/24/85 300
Columbus OH 94,878 12/22/95 300
Dayton OH 220,561 10/31/85 300
Eastlake OH 92,721 12/22/95 300
Fairfield OH 30,887 09/17/97 300
Findlay OH 48,306 12/24/97 300
Hamilton OH 58,545 03/31/97 10/04/96 300
Huber Heights OH 71,151 12/03/96 07/18/96 300
Miamisburg OH 202,449 10/08/85 300
Milford OH 35,508 09/18/97 300
Page F-18
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
----------------------- ----------------------
Buildings,
Improvements
and
Description Acquisition Carrying
(Note 1) Land Fees Improvements Costs
------------------- --------- ----------- ------------ ------
Automotive Service
------------------
Mt. Vernon OH 216,115 375,357 None None
Northwood OH 65,978 263,912 None None
Norwalk OH 200,205 366,000 None None
Sandusky OH 264,708 404,011 None None
Springboro OH 191,911 522,902 None None
Toledo OH 91,655 366,621 None None
Toledo OH 73,408 293,632 None None
Midwest City OK 106,312 333,551 None None
The Village OK 143,655 295,422 None None
Bethel Park PA 299,595 331,264 None None
Bethlehem PA 275,328 389,067 None None
Bethlehem PA 229,162 310,526 None None
Philadelphia PA 858,500 877,744 None None
Springfield Twp. PA 82,740 383,601 None None
York PA 249,436 347,424 None None
Charleston SC 217,250 294,079 None None
Columbia SC 343,785 295,001 None None
Columbia SC 267,622 298,594 None None
Greenville SC 221,946 315,163 None None
Lexington SC 241,534 342,182 None 302
North Charleston SC 174,980 341,466 None None
Brentwood TN 305,546 505,728 None None
Nashville TN 342,960 227,440 None None
Dallas TX 234,604 325,951 None None
Houston TX 233,406 411,197 None 21
Houston TX 285,000 369,697 None None
Houston TX 195,000 424,651 None None
Lewisville TX 199,942 324,736 None None
San Antonio TX 198,828 437,422 None None
Roanoke VA 349,628 322,545 None None
Bremerton WA 261,172 373,080 None None
Milwaukee WI 173,005 499,244 None None
Milwaukee WI 152,509 475,480 None None
New Berlin WI 188,491 466,268 None None
Page F-19
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
------------------- ------------ ------------ ----------
Automotive Service
------------------
Mt. Vernon OH 216,115 375,357 591,472
Northwood OH 65,978 263,912 329,890
Norwalk OH 200,205 366,000 566,205
Sandusky OH 264,708 404,011 668,719
Springboro OH 191,911 522,902 714,813
Toledo OH 91,655 366,621 458,276
Toledo OH 73,408 293,632 367,040
Midwest City OK 106,312 333,551 439,863
The Village OK 143,655 295,422 439,077
Bethel Park PA 299,595 331,264 630,859
Bethlehem PA 275,328 389,067 664,395
Bethlehem PA 229,162 310,526 539,688
Philadelphia PA 858,500 877,744 1,736,244
Springfield Twp. PA 82,740 383,601 466,341
York PA 249,436 347,424 596,860
Charleston SC 217,250 294,079 511,329
Columbia SC 343,785 295,001 638,786
Columbia SC 267,622 298,594 566,216
Greenville SC 221,946 315,163 537,109
Lexington SC 241,534 342,484 584,018
North Charleston SC 174,980 341,466 516,446
Brentwood TN 305,546 505,728 811,274
Nashville TN 342,960 227,440 570,400
Dallas TX 234,604 325,951 560,555
Houston TX 233,406 411,218 644,624
Houston TX 285,000 369,697 654,697
Houston TX 195,000 424,651 619,651
Lewisville TX 199,942 324,736 524,678
San Antonio TX 198,828 437,422 636,250
Roanoke VA 349,628 322,545 672,173
Bremerton WA 261,172 373,080 634,252
Milwaukee WI 173,005 499,244 672,249
Milwaukee WI 152,509 475,480 627,989
New Berlin WI 188,491 466,268 654,759
Page F-20
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which
in latest
Income
Accumulated Statement
Description Depreciation Date of Date is Computed
(Note 1) (Note 4) Construction Acquired (in Months)
------------------- ------------ ------------ -------- -----------
Automotive Service
------------------
Mt. Vernon OH 45,669 12/30/97 300
Northwood OH 252,109 09/12/86 180
Norwalk OH 44,529 12/19/97 300
Sandusky OH 49,158 12/19/97 300
Springboro OH 79,148 03/07/97 300
Toledo OH 350,225 09/12/86 180
Toledo OH 280,500 09/12/86 180
Midwest City OK 31,768 08/06/98 08/08/97 300
The Village OK 32,019 03/06/98 07/29/97 300
Bethel Park PA 40,311 12/19/97 300
Bethlehem PA 47,342 12/19/97 300
Bethlehem PA 37,777 12/24/97 300
Philadelphia PA 297,062 05/19/95 12/05/94 300
Springfield Twp. PA 254,916 02/28/86 300
York PA 42,271 12/30/97 300
Charleston SC 39,651 07/14/97 03/13/97 300
Columbia SC 41,698 05/27/97 02/07/97 300
Columbia SC 32,396 03/31/98 11/05/97 300
Greenville SC 40,417 09/05/97 03/31/97 300
Lexington SC 23,544 02/03/99 09/24/98 300
North Charleston SC 32,456 08/06/98 03/12/98 300
Brentwood TN 59,837 03/13/98 05/28/97 300
Nashville TN 29,896 09/17/97 300
Dallas TX 57,041 08/09/96 02/19/96 300
Houston TX 18,750 09/07/99 03/26/98 300
Houston TX 47,405 08/08/97 08/08/97 300
Houston TX 19,343 10/01/99 06/12/98 300
Lewisville TX 56,829 08/02/96 02/14/96 300
San Antonio TX 92,588 09/15/95 300
Roanoke VA 39,248 12/19/97 300
Bremerton WA 61,166 03/19/97 07/24/96 300
Milwaukee WI 100,681 12/22/95 300
Milwaukee WI 81,624 09/27/96 300
New Berlin WI 94,031 12/22/95 300
Page F-21
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
----------------------- ----------------------
Buildings,
Improvements
and
Description Acquisition Carrying
(Note 1) Land Fees Improvements Costs
------------------- --------- ----------- ------------ ------
Book Stores
-----------
Tampa FL 998,250 3,696,707 None None
Matthews NC 768,222 843,401 None 126
Business Services
-----------------
Jackson MI 550,162 571,590 None None
Child Care
----------
Birmingham AL 63,800 295,791 None None
Huntsville AL 28,600 197,165 None 277
Mobile AL 78,400 237,671 None 277
Avondale AZ 242,723 1,129,139 None None
Chandler AZ 144,083 668,079 None None
Chandler AZ 291,720 647,923 None None
Chandler AZ 271,695 603,446 None None
Mesa AZ 297,500 660,755 None None
Mesa AZ 276,770 590,417 None None
Mesa AZ 308,951 1,025,612 None None
Peoria AZ 281,750 625,779 None None
Phoenix AZ 318,500 707,397 None None
Phoenix AZ 264,504 587,471 None None
Phoenix AZ 260,719 516,181 None None
Phoenix AZ 115,000 285,172 None 158
Scottsdale AZ 291,993 648,529 None None
Tempe AZ 292,200 648,989 None None
Tempe AZ 294,000 638,977 None None
Tucson AZ 304,500 676,303 None None
Tucson AZ 283,500 546,878 None None
Calabasas CA 156,430 725,248 None None
Carmichael CA 131,035 607,507 None None
Chino CA 155,000 634,071 None None
Chula Vista CA 350,563 778,614 None None
Corona CA 144,856 671,584 None None
El Cajon CA 157,804 731,621 None None
Encinitas CA 320,000 710,729 None None
Escondido CA 276,286 613,638 None None
Folsom CA 281,563 625,363 None None
Page F-22
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
------------------- ------------ ------------ ----------
Book Stores
-----------
Tampa FL 998,250 3,696,707 4,694,957
Matthews NC 768,222 843,527 1,611,749
Business Services
-----------------
Jackson MI 550,162 571,590 1,121,752
Child Care
----------
Birmingham AL 63,800 295,791 359,591
Huntsville AL 28,600 197,442 226,042
Mobile AL 78,400 237,948 316,348
Avondale AZ 242,723 1,129,139 1,371,862
Chandler AZ 144,083 668,079 812,162
Chandler AZ 291,720 647,923 939,643
Chandler AZ 271,695 603,446 875,141
Mesa AZ 297,500 660,755 958,255
Mesa AZ 276,770 590,417 867,187
Mesa AZ 308,951 1,025,612 1,334,563
Peoria AZ 281,750 625,779 907,529
Phoenix AZ 318,500 707,397 1,025,897
Phoenix AZ 264,504 587,471 851,975
Phoenix AZ 260,719 516,181 776,900
Phoenix AZ 115,000 285,330 400,330
Scottsdale AZ 291,993 648,529 940,522
Tempe AZ 292,200 648,989 941,189
Tempe AZ 294,000 638,977 932,977
Tucson AZ 304,500 676,303 980,803
Tucson AZ 283,500 546,878 830,378
Calabasas CA 156,430 725,248 881,678
Carmichael CA 131,035 607,507 738,542
Chino CA 155,000 634,071 789,071
Chula Vista CA 350,563 778,614 1,129,177
Corona CA 144,856 671,584 816,440
El Cajon CA 157,804 731,621 889,425
Encinitas CA 320,000 710,729 1,030,729
Escondido CA 276,286 613,638 889,924
Folsom CA 281,563 625,363 906,926
Page F-23
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which
in latest
Income
Accumulated Statement
Description Depreciation Date of Date is Computed
(Note 1) (Note 4) Construction Acquired (in Months)
------------------- ------------ ------------ -------- -----------
Book Stores
-----------
Tampa FL 560,600 03/11/97 300
Matthews NC 68,879 12/31/98 300
Business Services
-----------------
Jackson MI 42,993 01/15/99 09/25/98 300
Child Care
----------
Birmingham AL 219,429 10/31/84 300
Huntsville AL 197,327 06/15/82 180
Mobile AL 237,833 10/15/82 180
Avondale AZ 69,717 04/20/99 07/28/98 300
Chandler AZ 418,481 12/17/86 300
Chandler AZ 313,275 12/11/87 300
Chandler AZ 291,846 12/14/87 300
Mesa AZ 301,940 09/29/88 300
Mesa AZ 269,801 09/29/88 300
Mesa AZ 53,027 07/26/99 01/13/99 300
Peoria AZ 297,041 03/30/88 300
Phoenix AZ 323,254 09/29/88 300
Phoenix AZ 232,454 06/29/90 300
Phoenix AZ 195,299 12/26/90 300
Phoenix AZ 285,253 02/08/84 180
Scottsdale AZ 313,607 12/14/87 300
Tempe AZ 308,058 03/10/88 300
Tempe AZ 253,052 09/27/90 300
Tucson AZ 309,046 09/28/88 300
Tucson AZ 249,903 09/29/88 300
Calabasas CA 495,614 09/26/85 300
Carmichael CA 389,848 08/22/86 300
Chino CA 634,071 10/06/83 180
Chula Vista CA 381,141 10/30/87 300
Corona CA 492,973 12/19/84 300
El Cajon CA 491,711 12/19/85 300
Encinitas CA 343,685 12/29/87 300
Escondido CA 296,734 12/31/87 300
Folsom CA 307,207 10/23/87 300
Page F-24
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
----------------------- ----------------------
Buildings,
Improvements
and
Description Acquisition Carrying
(Note 1) Land Fees Improvements Costs
------------------- --------- ----------- ------------ ------
Child Care
----------
Mission Viejo CA 353,891 744,367 None None
Moreno Valley CA 304,489 676,214 None None
Oceanside CA 145,568 674,889 None None
Palmdale CA 249,490 554,125 None None
Rancho Cordova CA 276,328 613,733 None None
Rancho Cucamonga CA 471,733 1,047,739 None None
Roseville CA 297,343 660,411 None None
Sacramento CA 290,734 645,732 None None
Santee CA 248,418 551,748 None None
Simi Valley CA 208,585 967,055 None None
Valencia CA 301,295 669,185 None None
Walnut CA 217,365 1,007,753 None None
Aurora CO 141,811 657,497 None None
Aurora CO 287,000 637,440 None None
Aurora CO 301,455 655,610 None None
Broomfield CO 107,000 403,080 None None
Broomfield CO 155,306 344,941 None None
Colorado Springs CO 115,542 535,700 None None
Colorado Springs CO 58,400 271,217 None None
Colorado Springs CO 92,570 241,413 None None
Englewood CO 131,216 608,372 None None
Englewood CO 158,651 735,572 None None
Fort Collins CO 117,105 542,950 None None
Fort Collins CO 137,734 638,593 None None
Fort Collins CO 55,200 256,356 None 3,600
Greeley CO 58,400 270,755 None 227
Littleton CO 287,000 637,435 None None
Littleton CO 299,250 664,642 None None
Littleton CO 161,617 358,956 None None
Longmont CO 115,592 535,931 None None
Louisville CO 58,089 269,313 None None
Parker CO 153,551 341,042 None None
Westminster CO 306,387 695,737 None None
Bradenton FL 160,060 355,501 None None
Clearwater FL 42,223 269,380 None None
Jacksonville FL 38,500 228,481 None 226
Page F-25
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
------------------- ------------ ------------ ----------
Child Care
----------
Mission Viejo CA 353,891 744,367 1,098,258
Moreno Valley CA 304,489 676,214 980,703
Oceanside CA 145,568 674,889 820,457
Palmdale CA 249,490 554,125 803,615
Rancho Cordova CA 276,328 613,733 890,061
Rancho Cucamonga CA 471,733 1,047,739 1,519,472
Roseville CA 297,343 660,411 957,754
Sacramento CA 290,734 645,732 936,466
Santee CA 248,418 551,748 800,166
Simi Valley CA 208,585 967,055 1,175,640
Valencia CA 301,295 669,185 970,480
Walnut CA 217,365 1,007,753 1,225,118
Aurora CO 141,811 657,497 799,308
Aurora CO 287,000 637,440 924,440
Aurora CO 301,455 655,610 957,065
Broomfield CO 107,000 403,080 510,080
Broomfield CO 155,306 344,941 500,247
Colorado Springs CO 115,542 535,700 651,242
Colorado Springs CO 58,400 271,217 329,617
Colorado Springs CO 92,570 241,413 333,983
Englewood CO 131,216 608,372 739,588
Englewood CO 158,651 735,572 894,223
Fort Collins CO 117,105 542,950 660,055
Fort Collins CO 137,734 638,593 776,327
Fort Collins CO 55,200 259,956 315,156
Greeley CO 58,400 270,982 329,382
Littleton CO 287,000 637,435 924,435
Littleton CO 299,250 664,642 963,892
Littleton CO 161,617 358,956 520,573
Longmont CO 115,592 535,931 651,523
Louisville CO 58,089 269,313 327,402
Parker CO 153,551 341,042 494,593
Westminster CO 306,387 695,737 1,002,124
Bradenton FL 160,060 355,501 515,561
Clearwater FL 42,223 269,380 311,603
Jacksonville FL 38,500 228,707 267,207
Page F-26
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which
in latest
Income
Accumulated Statement
Description Depreciation Date of Date is Computed
(Note 1) (Note 4) Construction Acquired (in Months)
------------------- ------------ ------------ -------- -----------
Child Care
----------
Mission Viejo CA 244,002 06/24/93 300
Moreno Valley CA 347,178 02/11/87 300
Oceanside CA 453,582 12/23/85 300
Palmdale CA 253,214 09/14/88 300
Rancho Cordova CA 269,644 03/22/89 300
Rancho Cucamonga CA 506,653 12/30/87 300
Roseville CA 324,416 10/21/87 300
Sacramento CA 316,092 10/05/87 300
Santee CA 275,019 07/23/87 300
Simi Valley CA 649,945 12/20/85 300
Valencia CA 311,711 06/23/88 300
Walnut CA 646,694 08/22/86 300
Aurora CO 434,436 03/25/86 300
Aurora CO 308,244 12/31/87 300
Aurora CO 320,043 09/27/89 300
Broomfield CO 403,080 01/12/83 180
Broomfield CO 163,735 03/15/88 300
Colorado Springs CO 337,076 12/04/86 300
Colorado Springs CO 271,217 12/22/82 180
Colorado Springs CO 241,413 08/31/83 180
Englewood CO 382,803 12/05/86 300
Englewood CO 460,757 12/29/86 300
Fort Collins CO 358,749 03/25/86 300
Fort Collins CO 421,946 03/25/86 300
Fort Collins CO 257,436 12/22/82 180
Greeley CO 199,841 11/21/84 300
Littleton CO 291,284 09/29/88 300
Littleton CO 303,718 09/29/88 300
Littleton CO 173,577 12/10/87 300
Longmont CO 354,112 03/25/86 300
Louisville CO 203,801 06/22/84 300
Parker CO 167,531 10/19/87 300
Westminster CO 317,838 09/27/89 300
Bradenton FL 166,645 05/05/88 300
Clearwater FL 269,380 12/22/81 180
Jacksonville FL 228,481 12/22/81 180
Page F-27
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
----------------------- ----------------------
Buildings,
Improvements
and
Description Acquisition Carrying
(Note 1) Land Fees Improvements Costs
------------------- --------- ----------- ------------ ------
Child Care
----------
Jacksonville FL 48,000 243,060 None 226
Jacksonville FL 184,800 410,447 None None
Jupiter FL 78,000 360,088 None 200
Margate FL 66,686 309,183 None None
Melbourne FL 256,439 549,345 None None
Niceville FL 73,696 341,688 None None
Orlando FL 68,001 313,922 None None
Orlando FL 159,177 353,538 None None
Orlando FL 245,249 544,704 None None
Orlando FL 190,050 422,107 None None
Oviedo FL 166,409 369,598 None None
Panama City FL 69,500 244,314 None 304
Pensacola FL 147,000 326,492 None None
Royal Palm Beach FL 194,193 431,309 None None
Spring Hill FL 146,939 326,356 None None
St. Augustine FL 44,800 213,040 None None
Sunrise FL 69,400 246,671 None 181
Sunrise FL 245,000 533,280 None None
Tallahassee FL 66,000 232,010 None 565
Tampa FL 53,385 199,846 None None
Douglasville GA 54,000 250,356 None 1,631
Duluth GA 310,000 1,040,008 None None
Dunwoody GA 318,500 707,399 None None
Ellenwood GA 119,678 275,414 None None
Fayetteville GA 148,400 329,601 None 264
Lawrenceville GA 141,449 314,161 None None
Lilburn GA 116,350 539,488 None 226
Lithia Springs GA 187,444 363,358 None None
Lithonia GA 239,715 524,459 None None
Marietta GA 231,000 513,061 None None
Marietta GA 273,000 619,076 None None
Marietta GA 292,250 649,095 None None
Marietta GA 295,750 596,299 None None
Marietta GA 301,000 668,529 None None
Marietta GA 148,620 330,090 None None
Martinez GA 141,153 313,504 None None
Page F-28
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
------------------- ------------ ------------ ----------
Child Care
----------
Jacksonville FL 48,000 243,286 291,286
Jacksonville FL 184,800 410,447 595,247
Jupiter FL 78,000 360,288 438,288
Margate FL 66,686 309,183 375,869
Melbourne FL 256,439 549,345 805,784
Niceville FL 73,696 341,688 415,384
Orlando FL 68,001 313,922 381,923
Orlando FL 159,177 353,538 512,715
Orlando FL 245,249 544,704 789,953
Orlando FL 190,050 422,107 612,157
Oviedo FL 166,409 369,598 536,007
Panama City FL 69,500 244,618 314,118
Pensacola FL 147,000 326,492 473,492
Royal Palm Beach FL 194,193 431,309 625,502
Spring Hill FL 146,939 326,356 473,295
St. Augustine FL 44,800 213,040 257,840
Sunrise FL 69,400 246,852 316,252
Sunrise FL 245,000 533,280 778,280
Tallahassee FL 66,000 232,575 298,575
Tampa FL 53,385 199,846 253,231
Douglasville GA 54,000 251,987 305,987
Duluth GA 310,000 1,040,008 1,350,008
Dunwoody GA 318,500 707,399 1,025,899
Ellenwood GA 119,678 275,414 395,092
Fayetteville GA 148,400 329,865 478,265
Lawrenceville GA 141,449 314,161 455,610
Lilburn GA 116,350 539,714 656,064
Lithia Springs GA 187,444 363,358 550,802
Lithonia GA 239,715 524,459 764,174
Marietta GA 231,000 513,061 744,061
Marietta GA 273,000 619,076 892,076
Marietta GA 292,250 649,095 941,345
Marietta GA 295,750 596,299 892,049
Marietta GA 301,000 668,529 969,529
Marietta GA 148,620 330,090 478,710
Martinez GA 141,153 313,504 454,657
Page F-29
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which
in latest
Income
Accumulated Statement
Description Depreciation Date of Date is Computed
(Note 1) (Note 4) Construction Acquired (in Months)
------------------- ------------ ------------ -------- -----------
Child Care
----------
Jacksonville FL 243,060 12/22/81 180
Jacksonville FL 180,330 03/30/89 300
Jupiter FL 247,021 09/11/85 300
Margate FL 193,671 12/16/86 300
Melbourne FL 182,272 04/16/93 300
Niceville FL 214,993 12/03/86 300
Orlando FL 215,351 09/04/85 300
Orlando FL 176,220 07/02/87 300
Orlando FL 263,399 12/10/87 300
Orlando FL 185,453 03/30/89 300
Oviedo FL 179,818 11/20/87 300
Panama City FL 244,314 06/15/82 180
Pensacola FL 143,444 03/28/89 300
Royal Palm Beach FL 194,556 11/15/88 300
Spring Hill FL 158,779 11/24/87 300
St. Augustine FL 213,040 12/22/81 180
Sunrise FL 246,671 06/15/82 180
Sunrise FL 235,174 05/25/89 300
Tallahassee FL 232,575 06/15/82 180
Tampa FL 199,846 12/22/81 180
Douglasville GA 185,734 10/23/84 300
Duluth GA 50,316 08/25/99 06/07/99 300
Dunwoody GA 319,095 11/16/88 300
Ellenwood GA 124,234 11/16/88 300
Fayetteville GA 144,811 03/29/89 300
Lawrenceville GA 145,411 07/07/88 300
Lilburn GA 337,932 12/23/86 300
Lithia Springs GA 156,041 12/28/89 300
Lithonia GA 215,199 08/20/91 300
Marietta GA 243,537 03/18/88 300
Marietta GA 292,027 04/26/88 300
Marietta GA 290,889 12/02/88 300
Marietta GA 267,229 12/30/88 300
Marietta GA 299,597 12/30/88 300
Marietta GA 150,965 09/16/88 300
Martinez GA 151,597 12/31/87 300
Page F-30
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
----------------------- ----------------------
Buildings,
Improvements
and
Description Acquisition Carrying
(Note 1) Land Fees Improvements Costs
------------------- --------- ----------- ------------ ------
Child Care
----------
Smyrna GA 274,750 610,229 None None
Stockbridge GA 168,700 374,688 None None
Stone Mountain GA 316,750 703,512 None None
Stone Mountain GA 65,000 301,357 None 226
Valdosta GA 73,561 341,059 None 226
Cedar Rapids IA 194,950 427,085 None None
Iowa City IA 186,900 408,910 None None
Johnston IA 186,996 347,278 None None
Addison IL 125,780 583,146 None None
Algonquin IL 241,500 509,629 None None
Aurora IL 165,679 398,738 None None
Aurora IL 468,000 1,259,926 None None
Bartlett IL 120,824 560,166 None None
Bolingbrook IL 60,000 409,024 None None
Carol Stream IL 122,831 586,416 None None
Crystal Lake IL 400,000 1,259,424 None None
Elk Grove VillageIL 126,860 588,175 None None
Elk Grove VillageIL 214,845 477,181 None None
Glendale Heights IL 318,500 707,399 None None
Hoffman Estates IL 318,500 707,399 None None
Hoffman Estates IL 211,082 468,818 None 1,050
Lake in the HillsIL 375,000 1,127,678 None None
Lockport IL 189,477 442,018 None None
Naperville IL 425,000 1,230,654 None None
O'Fallon IL 141,250 313,722 None None
Orland Park IL 218,499 485,296 None None
Oswego IL 380,000 1,165,818 None 1,182
Palatine IL 121,911 565,232 None None
Roselle IL 297,541 561,037 None None
Schaumburg IL 218,798 485,955 None None
Vernon Hills IL 132,523 614,430 None None
Westmont IL 124,742 578,330 None None
Carmel IN 217,565 430,742 None None
Fishers IN 212,118 419,958 None None
Highland IN 220,460 436,476 None None
Indianapolis IN 245,000 544,153 None None
Page F-31
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
------------------- ------------ ------------ ----------
Child Care
----------
Smyrna GA 274,750 610,229 884,979
Stockbridge GA 168,700 374,688 543,388
Stone Mountain GA 316,750 703,512 1,020,262
Stone Mountain GA 65,000 301,583 366,583
Valdosta GA 73,561 341,285 414,846
Cedar Rapids IA 194,950 427,085 622,035
Iowa City IA 186,900 408,910 595,810
Johnston IA 186,996 347,278 534,274
Addison IL 125,780 583,146 708,926
Algonquin IL 241,500 509,629 751,129
Aurora IL 165,679 398,738 564,417
Aurora IL 468,000 1,259,926 1,727,926
Bartlett IL 120,824 560,166 680,990
Bolingbrook IL 60,000 409,024 469,024
Carol Stream IL 122,831 586,416 709,247
Crystal Lake IL 400,000 1,259,424 1,659,424
Elk Grove VillageIL 126,860 588,175 715,035
Elk Grove VillageIL 214,845 477,181 692,026
Glendale Heights IL 318,500 707,399 1,025,899
Hoffman Estates IL 318,500 707,399 1,025,899
Hoffman Estates IL 211,082 469,868 680,950
Lake in the HillsIL 375,000 1,127,678 1,502,678
Lockport IL 189,477 442,018 631,495
Naperville IL 425,000 1,230,654 1,655,654
O'Fallon IL 141,250 313,722 454,972
Orland Park IL 218,499 485,296 703,795
Oswego IL 380,000 1,167,000 1,547,000
Palatine IL 121,911 565,232 687,143
Roselle IL 297,541 561,037 858,578
Schaumburg IL 218,798 485,955 704,753
Vernon Hills IL 132,523 614,430 746,953
Westmont IL 124,742 578,330 703,072
Carmel IN 217,565 430,742 648,307
Fishers IN 212,118 419,958 632,076
Highland IN 220,460 436,476 656,936
Indianapolis IN 245,000 544,153 789,153
Page F-32
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which
in latest
Income
Accumulated Statement
Description Depreciation Date of Date is Computed
(Note 1) (Note 4) Construction Acquired (in Months)
------------------- ------------ ------------ -------- -----------
Child Care
----------
Smyrna GA 275,263 11/15/88 300
Stockbridge GA 164,619 03/28/89 300
Stone Mountain GA 317,342 11/16/88 300
Stone Mountain GA 209,321 06/19/85 300
Valdosta GA 214,595 12/03/86 300
Cedar Rapids IA 156,955 09/24/92 300
Iowa City IA 152,221 09/24/92 300
Johnston IA 123,405 08/19/91 300
Addison IL 385,310 03/25/86 300
Algonquin IL 203,044 07/10/90 300
Aurora IL 178,691 12/21/88 300
Aurora IL 52,587 10/26/99 06/14/99 300
Bartlett IL 370,125 03/25/86 300
Bolingbrook IL 409,024 10/18/82 180
Carol Stream IL 387,470 03/25/86 300
Crystal Lake IL 56,755 09/28/99 05/14/99 300
Elk Grove VillageIL 388,633 03/26/86 300
Elk Grove VillageIL 225,094 04/08/88 300
Glendale Heights IL 319,095 11/16/88 300
Hoffman Estates IL 310,795 03/31/89 300
Hoffman Estates IL 193,664 12/08/89 300
Lake in the HillsIL 50,823 09/03/99 05/14/99 300
Lockport IL 216,365 10/29/87 300
Naperville IL 51,360 10/06/99 05/19/99 300
O'Fallon IL 153,562 10/30/87 300
Orland Park IL 237,549 10/28/87 300
Oswego IL 56,401 08/18/99 06/30/99 300
Palatine IL 373,473 03/25/86 300
Roselle IL 251,427 12/30/88 300
Schaumburg IL 234,990 12/17/87 300
Vernon Hills IL 405,979 03/25/86 300
Westmont IL 382,127 03/25/86 300
Carmel IN 162,973 12/27/90 300
Fishers IN 158,893 12/27/90 300
Highland IN 165,142 12/26/90 300
Indianapolis IN 215,314 06/29/90 300
Page F-33
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
----------------------- ----------------------
Buildings,
Improvements
and
Description Acquisition Carrying
(Note 1) Land Fees Improvements Costs
------------------- --------- ----------- ------------ ------
Child Care
----------
Noblesville IN 60,000 278,175 None None
Zionsville IN 127,568 319,770 None None
Lenexa KS 318,500 707,399 None None
Olathe KS 304,500 676,308 None None
Overland Park KS 305,691 707,397 None None
Overland Park KS 357,500 1,115,171 None None
Shawnee KS 315,000 699,629 None None
Shawnee KS 288,246 935,875 None None
Wichita KS 209,890 415,549 None None
Wichita KS 108,569 401,829 None None
Lexington KY 210,427 420,883 None None
Acton MA 315,533 700,813 None None
Marlborough MA 352,765 776,488 None None
Westborough MA 359,412 773,877 None None
Ellicott City MD 219,368 630,839 None None
Frederick MD 203,352 1,017,109 None None
Olney MD 342,500 760,701 None None
Waldorf MD 130,430 604,702 None None
Waldorf MD 237,207 526,844 None None
Canton MI 55,000 378,848 None None
Apple Valley MN 113,523 526,319 None 165
Bloomington MN 124,113 575,416 None 165
Brooklyn Park MN 118,111 547,587 None 165
Brooklyn Park MN 112,823 523,073 None 165
Eagan MN 112,127 519,845 None 165
Eden Prairie MN 124,286 576,243 None 165
Maple Grove MN 111,691 517,822 None None
Maple Grove MN 313,250 660,149 None None
Minnetonka MN 146,847 680,842 None 165
Plymouth MN 134,221 622,350 None 165
W. Bloomington MN 40,000 468,484 None 165
White Bear Lake MN 260,750 579,133 None None
White Bear Lake MN 242,165 537,856 None None
Florissant MO 318,500 707,399 None None
Florissant MO 181,300 402,672 None None
Gladstone MO 294,000 652,987 None None
Page F-34
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
------------------- ------------ ------------ ----------
Child Care
----------
Noblesville IN 60,000 278,175 338,175
Zionsville IN 127,568 319,770 447,338
Lenexa KS 318,500 707,399 1,025,899
Olathe KS 304,500 676,308 980,808
Overland Park KS 305,691 707,397 1,013,088
Overland Park KS 357,500 1,115,171 1,472,671
Shawnee KS 315,000 699,629 1,014,629
Shawnee KS 288,246 935,875 1,224,121
Wichita KS 209,890 415,549 625,439
Wichita KS 108,569 401,829 510,398
Lexington KY 210,427 420,883 631,310
Acton MA 315,533 700,813 1,016,346
Marlborough MA 352,765 776,488 1,129,253
Westborough MA 359,412 773,877 1,133,289
Ellicott City MD 219,368 630,839 850,207
Frederick MD 203,352 1,017,109 1,220,461
Olney MD 342,500 760,701 1,103,201
Waldorf MD 130,430 604,702 735,132
Waldorf MD 237,207 526,844 764,051
Canton MI 55,000 378,848 433,848
Apple Valley MN 113,523 526,484 640,007
Bloomington MN 124,113 575,581 699,694
Brooklyn Park MN 118,111 547,752 665,863
Brooklyn Park MN 112,823 523,238 636,061
Eagan MN 112,127 520,010 632,137
Eden Prairie MN 124,286 576,408 700,694
Maple Grove MN 111,691 517,822 629,513
Maple Grove MN 313,250 660,149 973,399
Minnetonka MN 146,847 681,007 827,854
Plymouth MN 134,221 622,515 756,736
W. Bloomington MN 40,000 468,649 508,649
White Bear Lake MN 260,750 579,133 839,883
White Bear Lake MN 242,165 537,856 780,021
Florissant MO 318,500 707,399 1,025,899
Florissant MO 181,300 402,672 583,972
Gladstone MO 294,000 652,987 946,987
Page F-35
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which
in latest
Income
Accumulated Statement
Description Depreciation Date of Date is Computed
(Note 1) (Note 4) Construction Acquired (in Months)
------------------- ------------ ------------ -------- -----------
Child Care
----------
Noblesville IN 198,580 04/30/85 300
Zionsville IN 156,522 10/28/87 300
Lenexa KS 310,795 03/31/89 300
Olathe KS 309,048 09/28/88 300
Overland Park KS 323,254 09/28/88 300
Overland Park KS 57,654 07/23/99 05/14/99 300
Shawnee KS 317,646 10/27/88 300
Shawnee KS 70,231 12/29/98 08/24/98 300
Wichita KS 157,225 12/26/90 300
Wichita KS 235,873 12/16/86 300
Lexington KY 166,081 08/20/91 300
Acton MA 320,246 09/30/88 300
Marlborough MA 350,259 11/04/88 300
Westborough MA 349,079 11/01/88 300
Ellicott City MD 282,706 12/19/88 300
Frederick MD 100,016 07/06/98 300
Olney MD 367,849 12/18/87 300
Waldorf MD 450,856 09/26/84 300
Waldorf MD 254,762 12/31/87 300
Canton MI 378,848 10/06/82 180
Apple Valley MN 347,762 03/26/86 300
Bloomington MN 380,202 03/27/86 300
Brooklyn Park MN 361,813 03/26/86 300
Brooklyn Park MN 345,617 03/27/86 300
Eagan MN 343,483 03/31/86 300
Eden Prairie MN 380,749 03/27/86 300
Maple Grove MN 342,148 03/26/86 300
Maple Grove MN 263,784 07/11/90 300
Minnetonka MN 428,403 12/12/86 300
Plymouth MN 391,596 12/12/86 300
W. Bloomington MN 468,484 06/18/82 180
White Bear Lake MN 280,049 12/23/87 300
White Bear Lake MN 209,711 08/30/90 300
Florissant MO 310,795 03/30/89 300
Florissant MO 176,914 03/29/89 300
Gladstone MO 298,391 09/29/88 300
Page F-36
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
----------------------- ----------------------
Buildings,
Improvements
and
Description Acquisition Carrying
(Note 1) Land Fees Improvements Costs
------------------- --------- ----------- ------------ ------
Child Care
----------
Lee's Summit MO 313,740 939,367 None None
Lee's Summit MO 239,627 532,220 None None
Lee's Summit MO 330,000 993,787 None None
Liberty MO 65,400 303,211 None None
Manchester MO 287,000 637,435 None None
North Kansas CityMO 307,784 910,401 None None
St. Charles MO 259,000 575,246 None None
Pearl MS 121,801 270,524 None None
Cary NC 75,200 262,973 None 228
Chapel Hill NC 77,000 356,992 None 236
Charlotte NC 27,551 247,000 None 228
Charlotte NC 134,582 268,222 None None
Concord NC 32,441 190,859 None None
Durham NC 220,728 429,380 None None
Durham NC 238,000 471,201 None None
Hendersonville NC 32,748 186,152 None 228
Kernersville NC 162,216 316,300 None None
Morrisville NC 175,700 390,234 None None
Bellevue NE 60,568 280,819 None None
Omaha NE 60,500 280,491 None None
Omaha NE 53,000 245,720 None None
Omaha NE 142,867 317,315 None None
Londonderry NH 335,467 745,082 None None
Clementon NJ 279,851 554,060 None None
Las Vegas NV 201,250 446,983 None None
Sparks NV 244,752 543,605 None None
Beavercreek OH 179,552 398,786 None None
Centerville OH 174,519 387,613 None None
Cincinnati OH 165,910 368,486 None 176
Dublin OH 84,000 389,446 None 176
Englewood OH 74,000 343,083 None 176
Forest Park OH 170,778 379,305 None None
Gahanna OH 86,000 398,718 None 176
Huber Heights OH 245,000 544,153 None None
Loveland OH 206,136 457,829 None None
Maineville OH 173,105 384,468 None None
Page F-37
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
------------------- ------------ ------------ ----------
Child Care
----------
Lee's Summit MO 313,740 939,367 1,253,107
Lee's Summit MO 239,627 532,220 771,847
Lee's Summit MO 330,000 993,787 1,323,787
Liberty MO 65,400 303,211 368,611
Manchester MO 287,000 637,435 924,435
North Kansas CityMO 307,784 910,401 1,218,185
St. Charles MO 259,000 575,246 834,246
Pearl MS 121,801 270,524 392,325
Cary NC 75,200 263,201 338,401
Chapel Hill NC 77,000 357,228 434,228
Charlotte NC 27,551 247,228 274,779
Charlotte NC 134,582 268,222 402,804
Concord NC 32,441 190,859 223,300
Durham NC 220,728 429,380 650,108
Durham NC 238,000 471,201 709,201
Hendersonville NC 32,748 186,380 219,128
Kernersville NC 162,216 316,300 478,516
Morrisville NC 175,700 390,234 565,934
Bellevue NE 60,568 280,819 341,387
Omaha NE 60,500 280,491 340,991
Omaha NE 53,000 245,720 298,720
Omaha NE 142,867 317,315 460,182
Londonderry NH 335,467 745,082 1,080,549
Clementon NJ 279,851 554,060 833,911
Las Vegas NV 201,250 446,983 648,233
Sparks NV 244,752 543,605 788,357
Beavercreek OH 179,552 398,786 578,338
Centerville OH 174,519 387,613 562,132
Cincinnati OH 165,910 368,662 534,572
Dublin OH 84,000 389,622 473,622
Englewood OH 74,000 343,259 417,259
Forest Park OH 170,778 379,305 550,083
Gahanna OH 86,000 398,894 484,894
Huber Heights OH 245,000 544,153 789,153
Loveland OH 206,136 457,829 663,965
Maineville OH 173,105 384,468 557,573
Page F-38
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which
in latest
Income
Accumulated Statement
Description Depreciation Date of Date is Computed
(Note 1) (Note 4) Construction Acquired (in Months)
------------------- ------------ ------------ -------- -----------
Child Care
----------
Lee's Summit MO 45,449 09/08/99 06/30/99 300
Lee's Summit MO 223,510 09/27/89 300
Lee's Summit MO 51,375 07/26/99 06/17/99 300
Liberty MO 210,607 06/18/85 300
Manchester MO 308,242 12/22/87 300
North Kansas CityMO 73,828 09/28/99 08/21/98 300
St. Charles MO 278,171 12/23/87 300
Pearl MS 122,165 11/15/88 300
Cary NC 263,053 01/25/84 180
Chapel Hill NC 254,844 04/17/85 300
Charlotte NC 247,000 12/23/81 180
Charlotte NC 120,988 11/16/88 300
Concord NC 190,859 12/23/81 180
Durham NC 187,587 12/29/89 300
Durham NC 167,442 08/20/91 300
Hendersonville NC 186,232 12/23/81 180
Kernersville NC 139,489 12/14/89 300
Morrisville NC 171,448 03/29/89 300
Bellevue NE 175,903 12/16/86 300
Omaha NE 211,219 08/01/84 300
Omaha NE 182,959 10/11/84 300
Omaha NE 153,440 12/09/87 300
Londonderry NH 316,465 08/18/89 300
Clementon NJ 195,297 09/09/91 300
Las Vegas NV 176,865 06/29/90 300
Sparks NV 261,256 01/29/88 300
Beavercreek OH 199,966 06/30/87 300
Centerville OH 193,206 07/23/87 300
Cincinnati OH 186,977 04/29/87 300
Dublin OH 265,730 10/08/85 300
Englewood OH 233,164 10/23/85 300
Forest Park OH 187,658 09/28/87 300
Gahanna OH 269,475 11/26/85 300
Huber Heights OH 210,593 09/27/90 300
Loveland OH 233,682 03/20/87 300
Maineville OH 196,238 03/06/87 300
Page F-39
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
----------------------- ----------------------
Buildings,
Improvements
and
Description Acquisition Carrying
(Note 1) Land Fees Improvements Costs
------------------- --------- ----------- ------------ ------
Child Care
----------
Pickerington OH 87,580 406,055 None 176
Westerville OH 294,350 646,557 None None
Westerville OH 82,000 380,173 None 176
Broken Arrow OK 78,705 220,434 None 279
Midwest City OK 67,800 314,338 None 279
Oklahoma City OK 79,000 366,261 None 279
Oklahoma City OK 50,800 214,474 None 3,013
Yukon OK 61,000 282,812 None 196
Beaverton OR 135,148 626,647 None 3
Beaverton OR 115,232 534,301 None 3
Charleston SC 125,593 278,947 None None
Charleston SC 140,700 312,498 None None
Columbia SC 58,160 269,643 None 1,042
Elgin SC 160,831 313,600 None None
Goose Creek SC 61,635 192,905 None 292
Ladson SC 31,543 177,457 None 292
Lexington SC 55,869 274,742 None 741
Mt. Pleasant SC 40,700 180,400 None None
Summerville SC 44,400 174,500 None None
Sumter SC 56,010 268,903 None 1,007
Memphis TN 238,263 504,897 None None
Memphis TN 238,000 528,608 None None
Memphis TN 221,501 491,962 None None
Nashville TN 274,298 609,223 None None
Allen TX 177,637 394,538 None None
Arlington TX 70,000 324,538 18,424 1,215
Arlington TX 82,109 380,677 None None
Arlington TX 238,000 528,604 None None
Arlington TX 241,500 550,559 None None
Arlington TX 195,650 387,355 None None
Atascocita TX 278,915 1,034,868 None None
Austin TX 134,383 623,103 None None
Austin TX 236,733 528,608 None None
Austin TX 238,000 528,604 None None
Austin TX 103,600 230,532 None 75
Austin TX 88,872 222,684 None 75
Page F-40
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
------------------- ------------ ------------ ----------
Child Care
----------
Pickerington OH 87,580 406,231 493,811
Westerville OH 294,350 646,557 940,907
Westerville OH 82,000 380,349 462,349
Broken Arrow OK 78,705 220,713 299,418
Midwest City OK 67,800 314,617 382,417
Oklahoma City OK 79,000 366,540 445,540
Oklahoma City OK 50,800 217,487 268,287
Yukon OK 61,000 283,008 344,008
Beaverton OR 135,148 626,650 761,798
Beaverton OR 115,232 534,304 649,536
Charleston SC 125,593 278,947 404,540
Charleston SC 140,700 312,498 453,198
Columbia SC 58,160 270,685 328,845
Elgin SC 160,831 313,600 474,431
Goose Creek SC 61,635 193,197 254,832
Ladson SC 31,543 177,749 209,292
Lexington SC 55,869 275,483 331,352
Mt. Pleasant SC 40,700 180,400 221,100
Summerville SC 44,400 174,500 218,900
Sumter SC 56,010 269,910 325,920
Memphis TN 238,263 504,897 743,160
Memphis TN 238,000 528,608 766,608
Memphis TN 221,501 491,962 713,463
Nashville TN 274,298 609,223 883,521
Allen TX 177,637 394,538 572,175
Arlington TX 70,000 344,177 414,177
Arlington TX 82,109 380,677 462,786
Arlington TX 238,000 528,604 766,604
Arlington TX 241,500 550,559 792,059
Arlington TX 195,650 387,355 583,005
Atascocita TX 278,915 1,034,868 1,313,783
Austin TX 134,383 623,103 757,486
Austin TX 236,733 528,608 765,341
Austin TX 238,000 528,604 766,604
Austin TX 103,600 230,607 334,207
Austin TX 88,872 222,759 311,631
Page F-41
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which
in latest
Income
Accumulated Statement
Description Depreciation Date of Date is Computed
(Note 1) (Note 4) Construction Acquired (in Months)
------------------- ------------ ------------ -------- -----------
Child Care
----------
Pickerington OH 255,492 12/11/86 300
Westerville OH 255,413 09/26/90 300
Westerville OH 259,403 10/08/85 300
Broken Arrow OK 220,596 01/27/83 180
Midwest City OK 217,163 08/14/85 300
Oklahoma City OK 271,343 11/14/84 300
Oklahoma City OK 214,675 06/15/82 180
Yukon OK 200,808 05/02/85 300
Beaverton OR 392,527 12/17/86 300
Beaverton OR 334,682 12/22/86 300
Charleston SC 130,758 05/26/88 300
Charleston SC 137,296 03/28/89 300
Columbia SC 199,971 11/14/84 300
Elgin SC 138,298 12/14/89 300
Goose Creek SC 192,905 12/22/81 180
Ladson SC 177,628 12/22/81 180
Lexington SC 203,540 11/13/84 300
Mt. Pleasant SC 180,400 12/22/81 180
Summerville SC 174,500 12/22/81 180
Sumter SC 186,830 06/18/85 300
Memphis TN 230,718 09/29/88 300
Memphis TN 241,555 09/30/88 300
Memphis TN 191,817 08/31/90 300
Nashville TN 267,661 03/30/89 300
Allen TX 177,964 11/21/88 300
Arlington TX 230,833 05/08/85 300
Arlington TX 280,596 12/13/84 300
Arlington TX 241,552 09/26/88 300
Arlington TX 291,246 09/22/89 300
Arlington TX 144,326 02/07/91 300
Atascocita TX 53,498 07/19/99 05/14/99 300
Austin TX 390,308 12/23/86 300
Austin TX 241,555 09/27/88 300
Austin TX 230,695 04/06/89 300
Austin TX 230,576 10/29/82 180
Austin TX 222,710 01/12/83 180
Page F-42
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
----------------------- ----------------------
Buildings,
Improvements
and
Description Acquisition Carrying
(Note 1) Land Fees Improvements Costs
------------------- --------- ----------- ------------ ------
Child Care
----------
Austin TX 188,144 417,872 None None
Austin TX 191,636 425,629 None None
Austin TX 224,878 499,460 None None
Austin TX 217,878 483,913 None None
Bedford TX 241,500 550,559 None None
Carrollton TX 277,850 617,113 None None
Cedar Park TX 168,857 375,036 None None
Colleyville TX 250,000 1,070,360 None None
Colleyville TX 68,000 315,266 8,979 4,172
Converse TX 217,000 481,963 None None
Coppell TX 139,224 645,550 None None
Coppell TX 208,641 463,398 None None
Corinth TX 285,000 1,041,626 None None
DeSoto TX 86,000 398,715 29,103 2,027
Duncanville TX 93,000 431,172 None None
Euless TX 234,111 519,962 None None
Flower Mound TX 202,773 442,845 None None
Flower Mound TX 281,735 1,099,726 None None
Fort Worth TX 238,000 528,608 None None
Fort Worth TX 85,518 396,495 None None
Fort Worth TX 210,007 444,460 None None
Fort Worth TX 216,160 427,962 None None
Garland TX 211,050 468,749 None None
Grand Prairie TX 167,164 371,276 None None
Houston TX 219,100 486,631 None None
Houston TX 219,100 486,628 None None
Houston TX 149,109 323,314 None None
Houston TX 58,000 268,901 None 1,015
Houston TX 60,000 278,175 None 155
Houston TX 102,000 472,898 None 155
Houston TX 139,125 308,997 None 1,005
Houston TX 139,125 308,997 None 155
Houston TX 141,296 313,824 None None
Houston TX 294,582 919,276 None None
Katy TX 309,898 983,041 None None
Lewisville TX 79,000 366,264 None 1,245
Page F-43
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
------------------- ------------ ------------ ----------
Child Care
----------
Austin TX 188,144 417,872 606,016
Austin TX 191,636 425,629 617,265
Austin TX 224,878 499,460 724,338
Austin TX 217,878 483,913 701,791
Bedford TX 241,500 550,559 792,059
Carrollton TX 277,850 617,113 894,963
Cedar Park TX 168,857 375,036 543,893
Colleyville TX 250,000 1,070,360 1,320,360
Colleyville TX 68,000 328,417 396,417
Converse TX 217,000 481,963 698,963
Coppell TX 139,224 645,550 784,774
Coppell TX 208,641 463,398 672,039
Corinth TX 285,000 1,041,626 1,326,626
DeSoto TX 86,000 429,845 515,845
Duncanville TX 93,000 431,172 524,172
Euless TX 234,111 519,962 754,073
Flower Mound TX 202,773 442,845 645,618
Flower Mound TX 281,735 1,099,726 1,381,461
Fort Worth TX 238,000 528,608 766,608
Fort Worth TX 85,518 396,495 482,013
Fort Worth TX 210,007 444,460 654,467
Fort Worth TX 216,160 427,962 644,122
Garland TX 211,050 468,749 679,799
Grand Prairie TX 167,164 371,276 538,440
Houston TX 219,100 486,631 705,731
Houston TX 219,100 486,628 705,728
Houston TX 149,109 323,314 472,423
Houston TX 58,000 269,916 327,916
Houston TX 60,000 278,330 338,330
Houston TX 102,000 473,053 575,053
Houston TX 139,125 310,002 449,127
Houston TX 139,125 309,152 448,277
Houston TX 141,296 313,824 455,120
Houston TX 294,582 919,276 1,213,858
Katy TX 309,898 983,041 1,292,939
Lewisville TX 79,000 367,509 446,509
Page F-44
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which
in latest
Income
Accumulated Statement
Description Depreciation Date of Date is Computed
(Note 1) (Note 4) Construction Acquired (in Months)
------------------- ------------ ------------ -------- -----------
Child Care
----------
Austin TX 195,882 05/11/88 300
Austin TX 190,742 12/22/88 300
Austin TX 222,366 01/03/89 300
Austin TX 208,361 06/22/89 300
Bedford TX 291,246 09/22/89 300
Carrollton TX 298,416 12/11/87 300
Cedar Park TX 169,167 11/21/88 300
Colleyville TX 51,779 08/17/99 05/14/99 300
Colleyville TX 225,724 05/01/85 300
Converse TX 220,239 09/28/88 300
Coppell TX 404,368 12/17/86 300
Coppell TX 224,084 12/11/87 300
Corinth TX 57,284 06/04/99 05/19/99 300
Desoto TX 296,726 10/24/84 300
Duncanville TX 306,148 05/08/85 300
Euless TX 262,283 05/08/87 300
Flower Mound TX 224,707 04/20/87 300
Flower Mound TX 67,789 04/23/99 01/13/99 300
Fort Worth TX 241,555 09/26/88 300
Fort Worth TX 249,477 12/03/86 300
Fort Worth TX 183,715 02/01/90 300
Fort Worth TX 159,455 02/07/91 300
Garland TX 193,636 12/12/89 300
Grand Prairie TX 166,384 12/13/88 300
Houston TX 222,373 09/30/88 300
Houston TX 219,510 11/16/88 300
Houston TX 152,276 06/26/89 300
Houston TX 200,220 10/11/84 300
Houston TX 197,516 05/01/85 300
Houston TX 335,775 05/01/85 300
Houston TX 155,866 05/22/87 300
Houston TX 155,866 05/22/87 300
Houston TX 156,426 07/24/87 300
Houston TX 65,930 01/11/99 08/14/98 300
Katy TX 77,030 11/30/98 08/21/98 300
Lewisville TX 254,405 06/26/85 300
Page F-45
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
----------------------- ----------------------
Buildings,
Improvements
and
Description Acquisition Carrying
(Note 1) Land Fees Improvements Costs
------------------- --------- ----------- ------------ ------
Child Care
----------
Lewisville TX 192,777 428,121 None None
Lewisville TX 192,218 426,922 None None
Mansfield TX 181,375 402,839 None None
Mesquite TX 85,000 394,079 None 113
Mesquite TX 139,466 326,525 None None
Missouri City TX 221,025 437,593 None None
N. Richland HillsTX 238,000 528,608 None None
Pasadena TX 60,000 278,173 None 155
Plano TX 261,912 581,658 None None
Plano TX 250,514 556,399 None None
Plano TX 259,000 575,246 None None
Round Rock TX 80,525 373,347 None None
Round Rock TX 186,380 413,957 None None
San Antonio TX 130,833 606,596 None None
San Antonio TX 234,500 520,831 None None
San Antonio TX 217,000 481,967 None None
San Antonio TX 220,500 447,108 None None
San Antonio TX 102,512 475,288 None None
San Antonio TX 81,530 378,007 None None
San Antonio TX 139,125 308,997 None None
San Antonio TX 181,412 402,923 None None
San Antonio TX 162,161 360,166 None None
San Antonio TX 182,868 406,155 None None
Southlake TX 228,279 511,750 None None
Sugarland TX 193,800 430,437 None None
Sugarland TX 339,310 1,000,876 None None
The Woodlands TX 193,801 430,440 None None
Watauga TX 165,914 368,502 None None
Layton UT 136,574 269,008 None None
Sandy UT 168,089 373,330 None None
Centreville VA 371,000 824,003 None None
Chesapeake VA 190,050 422,107 None None
Glen Allen VA 74,643 346,060 None None
Portsmouth VA 171,575 381,073 None None
Richmond VA 269,500 598,567 None None
Richmond VA 71,001 327,771 None 322
Page F-46
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
------------------- ------------ ------------ ----------
Child Care
----------
Lewisville TX 192,777 428,121 620,898
Lewisville TX 192,218 426,922 619,140
Mansfield TX 181,375 402,839 584,214
Mesquite TX 85,000 394,192 479,192
Mesquite TX 139,466 326,525 465,991
Missouri City TX 221,025 437,593 658,618
N. Richland HillsTX 238,000 528,608 766,608
Pasadena TX 60,000 278,328 338,328
Plano TX 261,912 581,658 843,570
Plano TX 250,514 556,399 806,913
Plano TX 259,000 575,246 834,246
Round Rock TX 80,525 373,347 453,872
Round Rock TX 186,380 413,957 600,337
San Antonio TX 130,833 606,596 737,429
San Antonio TX 234,500 520,831 755,331
San Antonio TX 217,000 481,967 698,967
San Antonio TX 220,500 447,108 667,608
San Antonio TX 102,512 475,288 577,800
San Antonio TX 81,530 378,007 459,537
San Antonio TX 139,125 308,997 448,122
San Antonio TX 181,412 402,923 584,335
San Antonio TX 162,161 360,166 522,327
San Antonio TX 182,868 406,155 589,023
Southlake TX 228,279 511,750 740,029
Sugarland TX 193,800 430,437 624,237
Sugarland TX 339,310 1,000,876 1,340,186
The Woodlands TX 193,801 430,440 624,241
Watauga TX 165,914 368,502 534,416
Layton UT 136,574 269,008 405,582
Sandy UT 168,089 373,330 541,419
Centreville VA 371,000 824,003 1,195,003
Chesapeake VA 190,050 422,107 612,157
Glen Allen VA 74,643 346,060 420,703
Portsmouth VA 171,575 381,073 552,648
Richmond VA 269,500 598,567 868,067
Richmond VA 71,001 328,093 399,094
Page F-47
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which
in latest
Income
Accumulated Statement
Description Depreciation Date of Date is Computed
(Note 1) (Note 4) Construction Acquired (in Months)
------------------- ------------ ------------ -------- -----------
Child Care
----------
Lewisville TX 220,561 01/07/87 300
Lewisville TX 191,323 12/29/88 300
Mansfield TX 166,410 12/20/89 300
Mesquite TX 292,342 10/24/84 300
Mesquite TX 139,104 10/08/92 300
Missouri City TX 165,566 12/13/90 300
N. Richland HillsTX 241,555 09/26/88 300
Pasadena TX 206,359 10/23/84 300
Plano TX 300,378 01/06/87 300
Plano TX 269,055 12/10/87 300
Plano TX 262,866 09/27/88 300
Round Rock TX 233,863 12/16/86 300
Round Rock TX 180,660 04/19/89 300
San Antonio TX 400,803 03/24/86 300
San Antonio TX 251,856 12/29/87 300
San Antonio TX 218,824 10/14/88 300
San Antonio TX 196,438 03/30/89 300
San Antonio TX 299,056 12/03/86 300
San Antonio TX 237,845 12/11/86 300
San Antonio TX 155,866 05/22/87 300
San Antonio TX 200,837 07/07/87 300
San Antonio TX 179,525 07/07/87 300
San Antonio TX 182,016 12/06/88 300
Southlake TX 188,271 03/10/93 300
Sugarland TX 214,552 07/31/87 300
Sugarland TX 58,382 05/30/99 01/13/99 300
The Woodlands TX 213,269 08/11/87 300
Watauga TX 183,679 07/07/87 300
Layton UT 117,899 02/01/90 300
Sandy UT 152,050 02/01/90 300
Centreville VA 347,584 09/29/89 300
Chesapeake VA 185,453 03/28/89 300
Glen Allen VA 261,878 06/20/84 300
Portsmouth VA 170,775 12/21/88 300
Richmond VA 262,979 03/28/89 300
Richmond VA 224,852 09/04/85 300
Page F-48
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
----------------------- ----------------------
Buildings,
Improvements
and
Description Acquisition Carrying
(Note 1) Land Fees Improvements Costs
------------------- --------- ----------- ------------ ------
Child Care
----------
Virginia Beach VA 124,988 579,496 None None
Virginia Beach VA 69,080 320,270 None 656
Woodbridge VA 358,050 795,239 None None
Everett WA 120,000 540,363 None None
Federal Way WA 150,785 699,101 None None
Federal Way WA 261,943 581,782 None None
Kent WA 128,300 539,141 None None
Kent WA 140,763 678,809 None None
Kirkland WA 301,000 668,534 None None
Puyallup WA 195,552 434,327 None None
Redmond WA 279,830 621,513 None None
Renton WA 111,183 515,490 None None
Appleton WI 196,000 424,038 None None
Waukesha WI 233,100 461,500 None None
Waukesha WI 215,950 427,546 None None
Cheyenne WY 59,856 277,506 None 227
Consumer Electronics
--------------------
Oxford AL 323,085 406,655 None None
Tuscaloosa AL 204,790 585,115 None None
Bradenton FL 174,948 240,928 None None
Mary Esther FL 149,696 363,263 None None
Melbourne FL 269,697 522,414 None None
Merritt Island FL 309,652 482,459 None None
Ocala FL 339,690 543,504 None None
Pensacola FL 419,842 1,899,287 None None
Tallahassee FL 319,807 502,697 None None
Titusville FL 176,459 579,793 None None
Rome GA 254,902 486,812 None None
Smyrna GA 1,094,058 3,090,236 None None
Council Bluffs IA 255,217 117,792 None None
Des Moines IA 188,520 367,614 None None
Peoria IL 193,868 387,737 None None
Rockford IL 159,587 618,398 None None
Springfield IL 219,859 630,595 None None
Anderson IN 180,628 653,162 None None
Page F-49
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
------------------- ------------ ------------ ----------
Child Care
----------
Virginia Beach VA 124,988 579,496 704,484
Virginia Beach VA 69,080 320,926 390,006
Woodbridge VA 358,050 795,239 1,153,289
Everett WA 120,000 540,363 660,363
Federal Way WA 150,785 699,101 849,886
Federal Way WA 261,943 581,782 843,725
Kent WA 128,300 539,141 667,441
Kent WA 140,763 678,809 819,572
Kirkland WA 301,000 668,534 969,534
Puyallup WA 195,552 434,327 629,879
Redmond WA 279,830 621,513 901,343
Renton WA 111,183 515,490 626,673
Appleton WI 196,000 424,038 620,038
Waukesha WI 233,100 461,500 694,600
Waukesha WI 215,950 427,546 643,496
Cheyenne WY 59,856 277,733 337,589
Consumer Electronics
--------------------
Oxford AL 323,085 406,655 729,740
Tuscaloosa AL 204,790 585,115 789,905
Bradenton FL 174,948 240,928 415,876
Mary Esther FL 149,696 363,263 512,959
Melbourne FL 269,697 522,414 792,111
Merritt Island FL 309,652 482,459 792,111
Ocala FL 339,690 543,504 883,194
Pensacola FL 419,842 1,899,287 2,319,129
Tallahassee FL 319,807 502,697 822,504
Titusville FL 176,459 579,793 756,252
Rome GA 254,902 486,812 741,714
Smyrna GA 1,094,058 3,090,236 4,184,294
Council Bluffs IA 255,217 117,792 373,009
Des Moines IA 188,520 367,614 556,134
Peoria IL 193,868 387,737 581,605
Rockford IL 159,587 618,398 777,985
Springfield IL 219,859 630,595 850,454
Anderson IN 180,628 653,162 833,790
Page F-50
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which
in latest
Income
Accumulated Statement
Description Depreciation Date of Date is Computed
(Note 1) (Note 4) Construction Acquired (in Months)
------------------- ------------ ------------ -------- -----------
Child Care
----------
Virginia Beach VA 382,898 03/25/86 300
Virginia Beach VA 237,271 11/15/84 300
Woodbridge VA 363,395 09/29/88 300
Everett WA 540,363 11/22/82 180
Federal Way WA 437,913 12/17/86 300
Federal Way WA 262,425 11/21/88 300
Kent WA 539,141 06/03/83 180
Kent WA 425,202 12/17/86 300
Kirkland WA 317,335 03/31/88 300
Puyallup WA 194,639 12/06/88 300
Redmond WA 309,794 07/27/87 300
Renton WA 340,606 03/24/86 300
Appleton WI 170,063 07/10/90 300
Waukesha WI 174,610 12/13/90 300
Waukesha WI 161,764 12/13/90 300
Cheyenne WY 204,823 11/20/84 300
Consumer Electronics
--------------------
Oxford AL 67,098 11/26/96 300
Tuscaloosa AL 96,544 11/26/96 300
Bradenton FL 39,753 11/26/96 300
Mary Esther FL 59,938 11/26/96 300
Melbourne FL 86,198 11/26/96 300
Merritt Island FL 79,606 11/26/96 300
Ocala FL 89,678 11/26/96 300
Pensacola FL 313,382 11/26/96 300
Tallahassee FL 82,945 11/26/96 300
Titusville FL 95,666 11/26/96 300
Rome GA 80,324 11/26/96 300
Smyrna GA 437,669 06/09/97 300
Council Bluffs IA 19,436 11/26/96 300
Des Moines IA 60,656 11/26/96 300
Peoria IL 63,977 11/26/96 300
Rockford IL 102,036 11/26/96 300
Springfield IL 104,048 11/26/96 300
Anderson IN 107,767 11/26/96 300
Page F-51
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
----------------------- ----------------------
Buildings,
Improvements
and
Description Acquisition Carrying
(Note 1) Land Fees Improvements Costs
------------------- --------- ----------- ------------ ------
Consumer Electronics
--------------------
Muncie IN 148,901 645,235 None None
Richmond IN 93,999 193,753 None None
Topeka KS 974,960 3,472,226 None None
Columbus MS 144,908 463,707 None None
Greenville MS 144,588 433,764 None None
Gulfport MS 299,464 502,326 None None
Hattiesburg MS 198,659 457,379 None None
Jackson MS 405,360 656,296 None None
Meridian MS 181,156 515,598 None None
Tupelo MS 121,697 637,691 None None
Vicksburg MS 494,532 174,541 None None
Pineville NC 567,864 840,284 None 18,256
Lakewood NY 144,859 526,301 None None
Westbury NY 6,333,590 3,952,773 None None
Defiance OH 97,978 601,863 None None
Kettering OH 229,246 488,393 None None
Bristol TN 344,365 468,719 None None
Clarksville TN 290,775 395,870 None None
Vienna WV 324,797 526,670 None None
Convenience Stores
------------------
Manchester CT 118,262 305,510 None None
Vernon CT 179,646 319,372 None None
Westbrook CT 98,247 373,340 None None
Archer FL 296,238 578,145 None 51
Gainesville FL 515,834 873,187 None None
Gainesville FL 480,318 600,633 None None
Gainesville FL 347,310 694,859 None None
Gainesville FL 339,263 658,807 None None
Gainesville FL 351,921 552,557 None None
Gainesville FL 500,032 850,291 None None
Jacksonville Bch FL 522,188 371,885 None None
Orange Park FL 425,820 416,154 None None
Augusta GA 320,000 382,323 None None
Augusta GA 620,000 383,232 None None
Augusta GA 540,000 337,853 None None
Page F-52
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
------------------- ------------ ------------ ----------
Consumer Electronics
--------------------
Muncie IN 148,901 645,235 794,136
Richmond IN 93,999 193,753 287,752
Topeka KS 974,960 3,472,226 4,447,186
Columbus MS 144,908 463,707 608,615
Greenville MS 144,588 433,764 578,352
Gulfport MS 299,464 502,326 801,790
Hattiesburg MS 198,659 457,379 656,038
Jackson MS 405,360 656,296 1,061,656
Meridian MS 181,156 515,598 696,754
Tupelo MS 121,697 637,691 759,388
Vicksburg MS 494,532 174,541 669,073
Pineville NC 567,864 858,540 1,426,404
Lakewood NY 144,859 526,301 671,160
Westbury NY 6,333,590 3,952,773 10,286,363
Defiance OH 97,978 601,863 699,841
Kettering OH 229,246 488,393 717,639
Bristol TN 344,365 468,719 813,084
Clarksville TN 290,775 395,870 686,645
Vienna WV 324,797 526,670 851,467
Convenience Stores
------------------
Manchester CT 118,262 305,510 423,772
Vernon CT 179,646 319,372 499,018
Westbrook CT 98,247 373,340 471,587
Archer FL 296,238 578,196 874,434
Gainesville FL 515,834 873,187 1,389,021
Gainesville FL 480,318 600,633 1,080,951
Gainesville FL 347,310 694,859 1,042,169
Gainesville FL 339,263 658,807 998,070
Gainesville FL 351,921 552,557 904,478
Gainesville FL 500,032 850,291 1,350,323
Jacksonville Bch FL 522,188 371,885 894,073
Orange Park FL 425,820 416,154 841,974
Augusta GA 320,000 382,323 702,323
Augusta GA 620,000 383,232 1,003,232
Augusta GA 540,000 337,853 877,853
Page F-53
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which
in latest
Income
Accumulated Statement
Description Depreciation Date of Date is Computed
(Note 1) (Note 4) Construction Acquired (in Months)
------------------- ------------ ------------ -------- -----------
Consumer Electronics
--------------------
Muncie IN 106,464 11/26/96 300
Richmond IN 31,969 11/26/96 300
Topeka KS 561,343 12/27/96 300
Columbus MS 76,512 11/26/96 300
Greenville MS 71,571 11/26/96 300
Gulfport MS 82,884 11/26/96 300
Hattiesburg MS 75,468 11/26/96 300
Jackson MS 108,289 11/26/96 300
Meridian MS 85,074 11/26/96 300
Tupelo MS 105,219 11/26/96 300
Vicksburg MS 28,799 11/26/96 300
Pineville NC 69,224 12/31/98 300
Lakewood NY 86,840 11/26/96 300
Westbury NY 520,060 09/29/97 300
Defiance OH 99,307 11/26/96 300
Kettering OH 80,585 11/26/96 300
Bristol TN 77,339 11/26/96 300
Clarksville TN 65,319 11/26/96 300
Vienna WV 86,901 11/26/96 300
Convenience Stores
------------------
Manchester CT 70,777 03/03/95 300
Vernon CT 73,988 03/09/95 300
Westbrook CT 86,490 03/09/95 300
Archer FL 37,578 05/07/99 300
Gainesville FL 56,756 05/07/99 300
Gainesville FL 39,040 05/07/99 300
Gainesville FL 45,164 05/07/99 300
Gainesville FL 42,821 05/07/99 300
Gainesville FL 35,915 05/07/99 300
Gainesville FL 55,267 05/07/99 300
Jacksonville Bch FL 24,171 05/07/99 300
Orange Park FL 27,048 05/07/99 300
Augusta GA 22,299 07/22/99 300
Augusta GA 22,350 07/22/99 300
Augusta GA 19,704 07/22/99 300
Page F-54
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
----------------------- ----------------------
Buildings,
Improvements
and
Description Acquisition Carrying
(Note 1) Land Fees Improvements Costs
------------------- --------- ----------- ------------ ------
Convenience Stores
------------------
Augusta GA 510,000 392,929 None None
Augusta GA 180,000 422,020 None None
Augusta GA 260,000 392,171 None None
Dunwoody GA 545,462 724,254 None None
Hephzibah GA 580,000 523,535 None None
Lithonia GA 386,784 776,436 None None
Mabelton GA 491,069 355,957 None None
Martinez GA 450,000 402,777 None None
Norcross GA 384,162 651,273 None None
Stone Mountain GA 529,383 532,429 None None
Godfrey IL 374,586 733,190 None None
Granite City IL 362,287 737,255 None None
Madison IL 173,812 625,030 None None
New Albany IN 181,459 289,353 None None
New Albany IN 262,465 331,796 None None
Berea KY 252,077 360,815 None None
Elizabethtown KY 286,106 286,106 None None
Henderson KY 225,000 515,000 None None
Lebanon KY 158,052 316,105 None None
Louisville KY 216,849 605,697 None None
Louisville KY 198,926 368,014 None None
Mt. Washington KY 327,245 479,593 None None
Owensboro KY 360,000 590,000 None None
Seekonk MA 298,354 268,518 None None
Flint MI 194,492 476,504 None None
Cary NC 450,000 825,000 None None
Greensboro NC 700,000 655,000 None None
Greenville NC 330,000 515,000 None None
Greenville NC 225,000 405,000 None None
Jacksonville NC 150,000 530,000 None None
Kinston NC 550,000 1,057,833 None None
Kingston NY 257,763 456,042 None None
Atwater OH 118,555 266,748 None None
Columbus OH 273,085 471,693 None None
Columbus OH 147,296 304,411 None None
Cuyahoga Falls OH 297,982 357,579 None None
Page F-55
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
------------------- ------------ ------------ ----------
Convenience Stores
------------------
Augusta GA 510,000 392,929 902,929
Augusta GA 180,000 422,020 602,020
Augusta GA 260,000 392,171 652,171
Dunwoody GA 545,462 724,254 1,269,716
Hephzibah GA 580,000 523,535 1,103,535
Lithonia GA 386,784 776,436 1,163,220
Mabelton GA 491,069 355,957 847,026
Martinez GA 450,000 402,777 852,777
Norcross GA 384,162 651,273 1,035,435
Stone Mountain GA 529,383 532,429 1,061,812
Godfrey IL 374,586 733,190 1,107,776
Granite City IL 362,287 737,255 1,099,542
Madison IL 173,812 625,030 798,842
New Albany IN 181,459 289,353 470,812
New Albany IN 262,465 331,796 594,261
Berea KY 252,077 360,815 612,892
Elizabethtown KY 286,106 286,106 572,212
Henderson KY 225,000 515,000 740,000
Lebanon KY 158,052 316,105 474,157
Louisville KY 216,849 605,697 822,546
Louisville KY 198,926 368,014 566,940
Mt. Washington KY 327,245 479,593 806,838
Owensboro KY 360,000 590,000 950,000
Seekonk MA 298,354 268,518 566,872
Flint MI 194,492 476,504 670,996
Cary NC 450,000 825,000 1,275,000
Greensboro NC 700,000 655,000 1,355,000
Greenville NC 330,000 515,000 845,000
Greenville NC 225,000 405,000 630,000
Jacksonville NC 150,000 530,000 680,000
Kinston NC 550,000 1,057,833 1,607,833
Kingston NY 257,763 456,042 713,805
Atwater OH 118,555 266,748 385,303
Columbus OH 273,085 471,693 744,778
Columbus OH 147,296 304,411 451,707
Cuyahoga Falls OH 297,982 357,579 655,561
Page F-56
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which
in latest
Income
Accumulated Statement
Description Depreciation Date of Date is Computed
(Note 1) (Note 4) Construction Acquired (in Months)
------------------- ------------ ------------ -------- -----------
Convenience Stores
------------------
Augusta GA 22,916 07/22/99 300
Augusta GA 24,615 07/22/99 300
Augusta GA 22,873 07/22/99 300
Dunwoody GA 102,533 06/27/97 300
Hephzibah GA 30,534 07/22/99 300
Lithonia GA 109,938 06/27/97 300
Mabelton GA 50,379 06/27/97 300
Martinez GA 23,491 07/22/99 300
Norcross GA 92,204 06/27/97 300
Stone Mountain GA 75,367 06/27/97 300
Godfrey IL 103,804 06/27/97 300
Granite City IL 104,382 06/27/97 300
Madison IL 88,502 06/27/97 300
New Albany IN 67,033 03/03/95 300
New Albany IN 76,866 03/06/95 300
Berea KY 83,589 03/08/95 300
Elizabethtown KY 66,281 03/03/95 300
Henderson KY 110,725 08/25/95 300
Lebanon KY 73,231 03/03/95 300
Louisville KY 109,901 06/18/96 11/17/95 300
Louisville KY 85,256 03/03/95 300
Mt. Washington KY 79,164 10/28/96 05/31/96 300
Owensboro KY 126,850 08/25/95 300
Seekonk MA 62,207 03/03/95 300
Flint MI 96,095 12/21/95 300
Cary NC 177,375 08/25/95 300
Greensboro NC 31,658 10/27/99 300
Greenville NC 110,725 08/25/95 300
Greenville NC 87,075 08/25/95 300
Jacksonville NC 113,950 08/25/95 300
Kinston NC 135,682 10/24/97 300
Kingston NY 104,130 04/06/95 300
Atwater OH 61,797 03/03/95 300
Columbus OH 95,125 12/21/95 300
Columbus OH 70,522 03/03/95 300
Cuyahoga Falls OH 82,839 03/03/95 300
Page F-57
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
----------------------- ----------------------
Buildings,
Improvements
and
Description Acquisition Carrying
(Note 1) Land Fees Improvements Costs
------------------- --------- ----------- ------------ ------
Convenience Stores
------------------
Galion OH 138,981 327,597 None None
Groveport OH 277,198 445,497 None None
Perrysburg OH 211,678 390,680 None None
Streetsboro OH 402,988 533,349 None None
Tipp City OH 355,009 588,111 None None
Triffin OH 117,017 273,040 None None
Wadsworth OH 266,507 496,917 None None
Tulsa OK 126,545 508,266 None None
Aiken SC 320,000 432,527 None None
Aiken SC 330,000 472,679 None None
Aiken SC 560,000 543,588 None None
Aiken SC 360,000 542,982 None None
Aiken SC 540,000 388,058 None None
Aiken SC 250,000 251,770 None None
Belvedere SC 490,000 463,080 None None
Columbia SC 150,000 450,000 None None
Greenville SC 390,000 462,847 None None
Greenville SC 300,000 402,392 None None
Greenville SC 370,000 432,695 None None
Greenville SC 620,000 483,604 None None
Greenville SC 720,000 534,059 None None
Greenville SC 680,000 423,604 None None
Greer SC 400,000 502,879 None None
Jackson SC 170,000 632,626 None None
John's Isle SC 170,000 350,000 None None
Lexington SC 640,000 563,891 None None
Lexington SC 540,000 563,588 None None
Lexington SC 360,000 843,891 None None
Lexington SC 255,000 545,000 None None
Mauldin SC 490,000 412,879 None None
Myrtle Beach SC 140,000 590,000 None None
North Augusta SC 400,000 452,777 None None
North Augusta SC 350,000 352,323 None None
North Charleston SC 400,000 650,000 None None
Simpsonville SC 530,000 573,485 None None
Spartanburg SC 470,000 432,879 None None
Page F-58
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
------------------- ------------ ------------ ----------
Convenience Stores
------------------
Galion OH 138,981 327,597 466,578
Groveport OH 277,198 445,497 722,695
Perrysburg OH 211,678 390,680 602,358
Streetsboro OH 402,988 533,349 936,337
Tipp City OH 355,009 588,111 943,120
Triffin OH 117,017 273,040 390,057
Wadsworth OH 266,507 496,917 763,424
Tulsa OK 126,545 508,266 634,811
Aiken SC 320,000 432,527 752,527
Aiken SC 330,000 472,679 802,679
Aiken SC 560,000 543,588 1,103,588
Aiken SC 360,000 542,982 902,982
Aiken SC 540,000 388,058 928,058
Aiken SC 250,000 251,770 501,770
Belvedere SC 490,000 463,080 953,080
Columbia SC 150,000 450,000 600,000
Greenville SC 390,000 462,847 852,847
Greenville SC 300,000 402,392 702,392
Greenville SC 370,000 432,695 802,695
Greenville SC 620,000 483,604 1,103,604
Greenville SC 720,000 534,059 1,254,059
Greenville SC 680,000 423,604 1,103,604
Greer SC 400,000 502,879 902,879
Jackson SC 170,000 632,626 802,626
John's Isle SC 170,000 350,000 520,000
Lexington SC 640,000 563,891 1,203,891
Lexington SC 540,000 563,588 1,103,588
Lexington SC 360,000 843,891 1,203,891
Lexington SC 255,000 545,000 800,000
Mauldin SC 490,000 412,879 902,879
Myrtle Beach SC 140,000 590,000 730,000
North Augusta SC 400,000 452,777 852,777
North Augusta SC 350,000 352,323 702,323
North Charleston SC 400,000 650,000 1,050,000
Simpsonville SC 530,000 573,485 1,103,485
Spartanburg SC 470,000 432,879 902,879
Page F-59
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which
in latest
Income
Accumulated Statement
Description Depreciation Date of Date is Computed
(Note 1) (Note 4) Construction Acquired (in Months)
------------------- ------------ ------------ -------- -----------
Convenience Stores
------------------
Galion OH 75,893 03/06/95 300
Groveport OH 89,842 12/21/95 300
Perrysburg OH 63,511 01/10/96 09/01/95 300
Streetsboro OH 58,668 01/27/97 09/03/96 300
Tipp City OH 69,585 01/31/97 06/27/96 300
Triffin OH 63,254 03/07/95 300
Wadsworth OH 65,592 11/26/96 07/01/96 300
Tulsa OK 71,962 06/27/97 300
Aiken SC 25,227 07/22/99 300
Aiken SC 27,569 07/22/99 300
Aiken SC 31,704 07/22/99 300
Aiken SC 31,669 07/22/99 300
Aiken SC 22,632 07/22/99 300
Aiken SC 14,684 07/22/99 300
Belvedere SC 27,008 07/22/99 300
Columbia SC 96,750 08/25/95 300
Greenville SC 26,995 07/22/99 300
Greenville SC 23,469 07/22/99 300
Greenville SC 25,236 07/22/99 300
Greenville SC 28,205 07/22/99 300
Greenville SC 31,147 07/22/99 300
Greenville SC 24,705 07/22/99 300
Greer SC 29,330 07/22/99 300
Jackson SC 36,899 07/22/99 300
John's Isle SC 75,250 08/25/95 300
Lexington SC 32,888 07/22/99 300
Lexington SC 32,870 07/22/99 300
Lexington SC 49,221 07/22/99 300
Lexington SC 117,175 08/25/95 300
Mauldin SC 24,080 07/22/99 300
Myrtle Beach SC 126,850 08/25/95 300
North Augusta SC 26,408 07/22/99 300
North Augusta SC 20,549 07/22/99 300
North Charleston SC 139,750 08/25/95 300
Simpsonville SC 33,448 07/22/99 300
Spartanburg SC 25,247 07/22/99 300
Page F-60
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
----------------------- ----------------------
Buildings,
Improvements
and
Description Acquisition Carrying
(Note 1) Land Fees Improvements Costs
------------------- --------- ----------- ------------ ------
Convenience Stores
------------------
Summerville SC 115,000 515,000 None None
W. Columbia SC 410,000 693,574 None None
West Aiken SC 400,000 402,665 None None
La Vergne TN 340,000 650,000 None None
Shelbyville TN 200,000 465,000 None None
Hampton VA 433,985 459,108 None None
Midlothian VA 325,000 302,872 None None
Newport News VA 490,616 605,304 None None
Richmond VA 700,000 400,740 None None
Richmond VA 700,000 440,965 None None
Richmond VA 400,000 250,875 None None
Richmond VA 1,000,000 740 None None
Richmond VA 700,000 100,695 None None
Stafford VA 271,865 601,997 None None
Warrenton VA 515,971 649,125 None None
Yorktown VA 309,435 447,144 None None
Craft and Novelty
-----------------
Cutler Ridge FL 743,498 657,485 None 4,362
Stony Brook NY 980,000 1,801,586 None None
Drug Stores
-----------
Casselberry FL 1,075,020 1,664,284 None None
Entertainment
-------------
Vista CA 2,300,000 22 None None
Dania FL 8,272,080 1,713 None None
Roswell GA 3,383,780 1,126 None None
Flanders NJ 2,222,205 890 None 1,208
Brookhaven NY 1,500,000 745 None None
Riverhead NY 3,800,000 744 None None
General Merchandise
-------------------
Monte Vista CO 47,652 582,159 None None
Groveland FL 101,782 189,258 None None
Garnett KS 59,690 518,121 None None
Page F-61
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
------------------- ------------ ------------ ----------
Convenience Stores
------------------
Summerville SC 115,000 515,000 630,000
W. Columbia SC 410,000 693,574 1,103,574
West Aiken SC 400,000 402,665 802,665
La Vergne TN 340,000 650,000 990,000
Shelbyville TN 200,000 465,000 665,000
Hampton VA 433,985 459,108 893,093
Midlothian VA 325,000 302,872 627,872
Newport News VA 490,616 605,304 1,095,920
Richmond VA 700,000 400,740 1,100,740
Richmond VA 700,000 440,965 1,140,965
Richmond VA 400,000 250,875 650,875
Richmond VA 1,000,000 740 1,000,740
Richmond VA 700,000 100,695 800,695
Stafford VA 271,865 601,997 873,862
Warrenton VA 515,971 649,125 1,165,096
Yorktown VA 309,435 447,144 756,579
Craft and Novelty
-----------------
Cutler Ridge FL 743,498 661,847 1,405,345
Stony Brook NY 980,000 1,801,586 2,781,586
Drug Stores
-----------
Casselberry FL 1,075,020 1,664,284 2,739,304
Entertainment
-------------
Vista CA 2,300,000 22 2,300,022
Dania FL 8,272,080 1,713 8,273,793
Roswell GA 3,383,780 1,126 3,384,906
Flanders NJ 2,222,205 2,098 2,224,303
Brookhaven NY 1,500,000 745 1,500,745
Riverhead NY 3,800,000 744 3,800,744
General Merchandise
-------------------
Monte Vista CO 47,652 582,159 629,811
Groveland FL 101,782 189,258 291,040
Garnett KS 59,690 518,121 577,811
Page F-62
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which
in latest
Income
Accumulated Statement
Description Depreciation Date of Date is Computed
(Note 1) (Note 4) Construction Acquired (in Months)
------------------- ------------ ------------ -------- -----------
Convenience Stores
------------------
Summerville SC 110,725 08/25/95 300
W. Columbia SC 40,453 07/22/99 300
West Aiken SC 23,485 07/22/99 300
La Vergne TN 139,750 08/25/95 300
Shelbyville TN 99,975 08/25/95 300
Hampton VA 49,726 04/17/98 300
Midlothian VA 40,841 08/21/97 300
Newport News VA 36,232 04/17/98 300
Richmond VA 43,406 04/17/98 300
Richmond VA 47,762 04/17/98 300
Richmond VA 27,169 04/17/98 300
Richmond VA 73 04/17/98 300
Richmond VA 10,902 04/17/98 300
Stafford VA 97,322 12/20/96 300
Warrenton VA 104,942 12/20/96 300
Yorktown VA 48,425 04/17/98 300
Craft and Novelty
-----------------
Cutler Ridge FL 53,709 12/31/98 300
Stony Brook NY 141,113 01/08/99 300
Drug Stores
-----------
Casselberry FL 152,587 09/30/98 300
Entertainment
-------------
Vista CA 1 03/31/99 300
Dania FL 100 03/31/99 300
Roswell GA 66 06/30/99 300
Flanders NJ 59 06/29/99 300
Brookhaven NY 43 07/23/99 300
Riverhead NY 43 07/23/99 300
General Merchandise
-------------------
Monte Vista CO 47,556 12/23/98 300
Groveland FL 13,560 03/31/99 300
Garnett KS 42,327 12/23/98 300
Page F-63
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
----------------------- ----------------------
Buildings,
Improvements
and
Description Acquisition Carrying
(Note 1) Land Fees Improvements Costs
------------------- --------- ----------- ------------ ------
General Merchandise
-------------------
Caledonia MN 89,723 559,300 None None
Long Prairie MN 88,892 553,997 None None
Paynesville MN 49,483 525,406 None None
Spring Valley MN 69,785 579,238 None None
Warroad MN 70,000 580,000 None None
Mayville ND 59,333 565,562 None None
Bloomfield NM 59,559 616,252 None None
Colorado City TX 92,535 505,276 None None
Grocery
-------
Boulder CO 426,675 1,199,508 18,000 91,455
Sheboygan WI 1,513,216 4,426,578 None 279
Health and Fitness
------------------
Diamond Bar CA 3,038,879 4,338,665 None None
Norco CA 1,247,243 3,808,416 None None
Paramount CA 86,400 278,827 None None
Coral Springs FL 891,496 2,798,204 None None
Miami FL 3,115,101 4,438,567 None None
Pembroke Pines FL 1,714,388 3,649,751 None None
Fort Worth TX 1,445,901 5,177,204 None None
Home Furnishings
----------------
Cathedral City CA 1,006,923 2,293,077 None 3,843
Danbury CT 630,171 3,621,163 None None
Brandon FL 430,000 1,020,608 None None
Jupiter FL 1,698,316 3,209,801 None None
Tampa FL 685,000 885,624 None None
Tampa FL 494,763 767,737 None 1,854
West Palm Beach FL 347,651 706,081 None 412
Winter Park FL 1,979,598 3,382,402 None 1,526
Davenport IA 270,000 930,689 None None
Joilet IL 440,000 910,689 None None
Wichita KS 430,000 740,725 None None
Alexandria LA 400,000 810,608 None None
Monroe LA 450,000 835,608 None None
Page F-64
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
------------------- ------------ ------------ ----------
General Merchandise
-------------------
Caledonia MN 89,723 559,300 649,023
Long Prairie MN 88,892 553,997 642,889
Paynesville MN 49,483 525,406 574,889
Spring Valley MN 69,785 579,238 649,023
Warroad MN 70,000 580,000 650,000
Mayville ND 59,333 565,562 624,895
Bloomfield NM 59,559 616,252 675,811
Colorado City TX 92,535 505,276 597,811
Grocery
-------
Boulder CO 426,675 1,308,963 1,735,638
Sheboygan WI 1,513,216 4,426,857 5,940,073
Health and Fitness
------------------
Diamond Bar CA 3,038,879 4,338,665 7,377,544
Norco CA 1,247,243 3,808,416 5,055,659
Paramount CA 86,400 278,827 365,227
Coral Springs FL 891,496 2,798,204 3,689,700
Miami FL 3,115,101 4,438,567 7,553,668
Pembroke Pines FL 1,714,388 3,649,751 5,364,139
Fort Worth TX 1,445,901 5,177,204 6,623,105
Home Furnishings
----------------
Cathedral City CA 1,006,923 2,296,920 3,303,843
Danbury CT 630,171 3,621,163 4,251,334
Brandon FL 430,000 1,020,608 1,450,608
Jupiter FL 1,698,316 3,209,801 4,908,117
Tampa FL 685,000 885,624 1,570,624
Tampa FL 494,763 769,591 1,264,354
West Palm Beach FL 347,651 706,493 1,054,144
Winter Park FL 1,979,598 3,383,928 5,363,526
Davenport IA 270,000 930,689 1,200,689
Joilet IL 440,000 910,689 1,350,689
Wichita KS 430,000 740,725 1,170,725
Alexandria LA 400,000 810,608 1,210,608
Monroe LA 450,000 835,608 1,285,608
Page F-65
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which
in latest
Income
Accumulated Statement
Description Depreciation Date of Date is Computed
(Note 1) (Note 4) Construction Acquired (in Months)
------------------- ------------ ------------ -------- -----------
General Merchandise
-------------------
Caledonia MN 45,693 12/23/98 300
Long Prairie MN 45,258 12/23/98 300
Paynesville MN 42,923 12/23/98 300
Spring Valley MN 47,321 12/23/98 300
Warroad MN 47,367 12/23/98 300
Mayville ND 46,219 12/23/98 300
Bloomfield NM 50,341 12/23/98 300
Colorado City TX 41,278 12/23/98 300
Grocery
-------
Boulder CO 887,684 01/05/84 180
Sheboygan WI 243,478 06/03/99 08/24/98 300
Health and Fitness
------------------
Diamond Bar CA 209,186 03/21/00 09/29/98 300
Norco CA 118,615 12/13/00 06/29/99 300
Paramount CA 278,827 11/22/83 180
Coral Springs FL 246,128 11/03/98 03/30/98 300
Miami FL 102,607 05/19/00 06/07/99 300
Pembroke Pines FL 31,882 12/11/00 10/01/99 300
Fort Worth TX 123,410 06/02/00 06/30/99 300
Home Furnishings
----------------
Cathedral City CA 515,942 05/26/95 300
Danbury CT 476,544 09/30/97 300
Brandon FL 103,760 06/26/98 300
Jupiter FL 80,198 05/03/00 300
Tampa FL 90,036 06/26/98 300
Tampa FL 62,707 12/31/98 300
West Palm Beach FL 57,660 12/31/98 300
Winter Park FL 761,040 05/31/95 300
Davenport IA 94,618 06/26/98 300
Joilet IL 92,584 06/26/98 300
Wichita KS 75,305 06/26/98 300
Alexandria LA 82,410 06/26/98 300
Monroe LA 84,951 06/26/98 300
Page F-66
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
----------------------- ----------------------
Buildings,
Improvements
and
Description Acquisition Carrying
(Note 1) Land Fees Improvements Costs
------------------- --------- ----------- ------------ ------
Home Furnishings
----------------
Shreveport LA 525,000 725,642 None None
Battle Creek MI 485,000 895,689 None None
Eden Prairie MN 500,502 1,055,244 None None
Hattiesburg MS 300,000 660,608 None None
Ridgeland MS 281,867 769,890 None None
Omaha NE 1,956,296 3,949,402 None None
Henderson NV 1,268,655 3,109,995 None None
Staten Island NY 3,190,883 2,569,802 None None
Lancaster OH 250,000 830,689 None None
Altoona PA 455,000 745,694 None None
Erie PA 510,000 900,689 None None
Muncy PA 315,000 835,648 None None
Whitehall PA 515,525 1,146,868 None None
Columbia SC 600,000 900,725 None None
Jackson TN 380,000 750,608 None None
Memphis TN 804,262 1,432,520 None None
Abilene TX 400,000 680,616 None None
Arlington TX 475,069 1,374,167 None None
Cedar Park TX 253,591 827,237 None None
Houston TX 867,767 687,042 None None
San Antonio TX 323,451 637,991 None 1,835
Spring TX 1,794,872 1,810,069 None None
Webster TX 283,604 538,002 None None
Eau Claire WI 260,000 820,689 None None
La Crosse WI 372,883 877,812 None None
Home Improvement
----------------
Mesa AZ 619,035 867,013 None 374
Lawndale CA 667,007 1,238,841 None None
Los Angeles CA 902,494 1,676,204 None None
Los Angeles CA 163,668 304,097 None None
Van Nuys CA 750,293 1,393,545 None None
West Covina CA 311,040 577,733 None None
Boca Raton FL 355,000 864,800 None 345
Clearwater FL 476,179 725,023 None 233
Deerfield Beach FL 475,000 869,092 None 714
Page F-67
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
------------------- ------------ ------------ ----------
Home Furnishings
----------------
Shreveport LA 525,000 725,642 1,250,642
Battle Creek MI 485,000 895,689 1,380,689
Eden Prairie MN 500,502 1,055,244 1,555,746
Hattiesburg MS 300,000 660,608 960,608
Ridgeland MS 281,867 769,890 1,051,757
Omaha NE 1,956,296 3,949,402 5,905,698
Henderson NV 1,268,655 3,109,995 4,378,650
Staten Island NY 3,190,883 2,569,802 5,760,685
Lancaster OH 250,000 830,689 1,080,689
Altoona PA 455,000 745,694 1,200,694
Erie PA 510,000 900,689 1,410,689
Muncy PA 315,000 835,648 1,150,648
Whitehall PA 515,525 1,146,868 1,662,393
Columbia SC 600,000 900,725 1,500,725
Jackson TN 380,000 750,608 1,130,608
Memphis TN 804,262 1,432,520 2,236,782
Abilene TX 400,000 680,616 1,080,616
Arlington TX 475,069 1,374,167 1,849,236
Cedar Park TX 253,591 827,237 1,080,828
Houston TX 867,767 687,042 1,554,809
San Antonio TX 323,451 639,826 963,277
Spring TX 1,794,872 1,810,069 3,604,941
Webster TX 283,604 538,002 821,606
Eau Claire WI 260,000 820,689 1,080,689
La Crosse WI 372,883 877,812 1,250,695
Home Improvement
----------------
Mesa AZ 619,035 867,387 1,486,422
Lawndale CA 667,007 1,238,841 1,905,848
Los Angeles CA 902,494 1,676,204 2,578,698
Los Angeles CA 163,668 304,097 467,765
Van Nuys CA 750,293 1,393,545 2,143,838
West Covina CA 311,040 577,733 888,773
Boca Raton FL 355,000 865,145 1,220,145
Clearwater FL 476,179 725,256 1,201,435
Deerfield Beach FL 475,000 869,806 1,344,806
Page F-68
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which
in latest
Income
Accumulated Statement
Description Depreciation Date of Date is Computed
(Note 1) (Note 4) Construction Acquired (in Months)
------------------- ------------ ------------ -------- -----------
Home Furnishings
----------------
Shreveport LA 73,772 06/26/98 300
Battle Creek MI 91,059 06/26/98 300
Eden Prairie MN 79,107 02/26/99 300
Hattiesburg MS 67,160 06/26/98 300
Ridgeland MS 108,983 06/27/97 300
Omaha NE 585,603 04/04/97 300
Henderson NV 409,277 09/26/97 300
Staten Island NY 286,733 03/26/98 300
Lancaster OH 84,451 06/26/98 300
Altoona PA 75,810 06/26/98 300
Erie PA 91,568 06/26/98 300
Muncy PA 84,955 06/26/98 300
Whitehall PA 116,596 06/30/98 300
Columbia SC 91,571 06/26/98 300
Jackson TN 76,310 06/26/98 300
Memphis TN 202,805 06/30/97 300
Abilene TX 69,194 06/26/98 300
Arlington TX 208,286 03/26/97 300
Cedar Park TX 125,387 03/10/97 300
Houston TX 104,079 03/07/97 300
San Antonio TX 52,102 12/31/98 300
Spring TX 238,141 09/29/97 300
Webster TX 76,162 06/12/97 300
Eau Claire WI 83,434 06/26/98 300
La Crosse WI 89,242 06/26/98 300
Home Improvement
----------------
Mesa AZ 65,020 02/11/99 300
Lawndale CA 101,170 12/31/98 300
Los Angeles CA 136,888 12/31/98 300
Los Angeles CA 24,832 12/31/98 300
Van Nuys CA 113,804 12/31/98 300
West Covina CA 47,181 12/31/98 300
Boca Raton FL 43,763 08/03/99 01/29/99 300
Clearwater FL 59,203 12/31/98 300
Deerfield Beach FL 61,272 02/25/99 01/29/99 300
Page F-69
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
----------------------- ----------------------
Buildings,
Improvements
and
Description Acquisition Carrying
(Note 1) Land Fees Improvements Costs
------------------- --------- ----------- ------------ ------
Home Improvement
----------------
Jacksonville FL 478,314 618,348 None 266
Port Orange FL 500,000 1,212,813 None 63
Seminole FL 593,304 767,184 None 84
Tampa FL 347,794 905,248 None 501
West Palm Beach FL 698,664 1,223,504 None 2,100
Des Moines IA 225,771 682,604 None None
Broadview IL 345,166 641,739 None None
Indianapolis IN 350,000 671,472 None 59
Baltimore MD 171,320 318,882 None None
Huntersville NC 530,000 1,016,022 None 4
Albuquerque NM 684,036 874,914 None 104
Rochester NY 158,168 294,456 None None
Reading PA 201,569 375,056 None None
Pasadena TX 147,535 274,521 None None
Plano TX 363,851 676,249 None None
San Antonio TX 432,389 816,532 None 1,841
San Antonio TX 367,890 683,750 None None
Riverdale UT 346,861 694,612 None 194
Chesapeake VA 144,014 649,869 None 11,754
Office Supplies
---------------
Lakewood CA 1,398,387 3,098,607 None None
Riverside CA 1,410,177 1,659,850 None None
Hutchinson KS 269,964 1,704,013 None None
Salina KS 240,423 1,829,837 None None
Helena MT 564,241 1,503,118 None None
Asheboro NC 465,557 2,176,416 None None
Westbury NY 3,808,076 2,377,932 None None
New Philadelphia OH 726,636 1,650,672 None None
Pet Supplies and Services
-------------------------
Duluth GA 254,100 1,121,270 None None
Marrietta GA 350,000 1,079,379 None None
Indianapolis IN 427,000 1,296,901 None None
Sudbury MA 385,000 1,759,125 None None
Tyngsborough MA 312,204 1,222,522 None None
Page F-70
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
------------------- ------------ ------------ ----------
Home Improvement
----------------
Jacksonville FL 478,314 618,614 1,096,928
Port Orange FL 500,000 1,212,876 1,712,876
Seminole FL 593,304 767,268 1,360,572
Tampa FL 347,794 905,749 1,253,543
West Palm Beach FL 698,664 1,225,604 1,924,268
Des Moines IA 225,771 682,604 908,375
Broadview IL 345,166 641,739 986,905
Indianapolis IN 350,000 671,531 1,021,531
Baltimore MD 171,320 318,882 490,202
Huntersville NC 530,000 1,016,026 1,546,026
Albuquerque NM 684,036 875,018 1,559,054
Rochester NY 158,168 294,456 452,624
Reading PA 201,569 375,056 576,625
Pasadena TX 147,535 274,521 422,056
Plano TX 363,851 676,249 1,040,100
San Antonio TX 432,389 818,373 1,250,762
San Antonio TX 367,890 683,750 1,051,640
Riverdale UT 346,861 694,806 1,041,667
Chesapeake VA 144,014 661,623 805,637
Office Supplies
---------------
Lakewood CA 1,398,387 3,098,607 4,496,994
Riverside CA 1,410,177 1,659,850 3,070,027
Hutchinson KS 269,964 1,704,013 1,973,977
Salina KS 240,423 1,829,837 2,070,260
Helena MT 564,241 1,503,118 2,067,359
Asheboro NC 465,557 2,176,416 2,641,973
Westbury NY 3,808,076 2,377,932 6,186,008
New Philadelphia OH 726,636 1,650,672 2,377,308
Pet Supplies and Services
-------------------------
Duluth GA 254,100 1,121,270 1,375,370
Marrietta GA 350,000 1,079,379 1,429,379
Indianapolis IN 427,000 1,296,901 1,723,901
Sudbury MA 385,000 1,759,125 2,144,125
Tyngsborough MA 312,204 1,222,522 1,534,726
Page F-71
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which
in latest
Income
Accumulated Statement
Description Depreciation Date of Date is Computed
(Note 1) (Note 4) Construction Acquired (in Months)
------------------- ------------ ------------ -------- -----------
Home Improvement
----------------
Jacksonville FL 50,499 12/31/98 300
Port Orange FL 74,990 05/11/99 01/29/99 300
Seminole FL 62,646 12/31/98 300
Tampa FL 73,911 12/31/98 300
West Palm Beach FL 99,913 12/31/98 300
Des Moines IA 53,463 01/29/99 300
Broadview IL 52,419 12/31/98 300
Indianapolis IN 43,616 03/29/99 01/29/99 300
Baltimore MD 26,053 12/31/98 300
Huntersville NC 59,550 12/18/98 01/29/99 300
Albuquerque NM 71,429 12/31/98 300
Rochester NY 24,058 12/31/98 300
Reading PA 30,640 12/31/98 300
Pasadena TX 22,421 12/31/98 300
Plano TX 55,229 12/31/98 300
San Antonio TX 66,667 12/31/98 300
San Antonio TX 55,842 12/31/98 300
Riverdale UT 56,710 12/31/98 300
Chesapeake VA 419,380 12/22/86 300
Office Supplies
---------------
Lakewood CA 490,537 01/29/97 300
Riverside CA 218,481 09/17/97 300
Hutchinson KS 241,322 06/25/97 300
Salina KS 259,139 06/25/97 300
Helena MT 212,808 06/09/97 300
Asheboro NC 242,901 03/27/98 300
Westbury NY 312,847 09/29/97 300
New Philadelphia OH 239,239 05/30/97 300
Pet Supplies and Services
-------------------------
Duluth GA 80,369 01/27/99 09/29/98 300
Marrietta GA 60,275 05/28/99 09/29/98 300
Indianapolis IN 33,227 03/10/00 01/19/99 300
Sudbury MA 67,240 11/12/99 09/30/98 300
Tyngsborough MA 124,283 06/12/98 300
Page F-72
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
----------------------- ----------------------
Buildings,
Improvements
and
Description Acquisition Carrying
(Note 1) Land Fees Improvements Costs
------------------- --------- ----------- ------------ ------
Pet Supplies and Services
-------------------------
Matthews NC 610,177 1,394,743 None None
North Plainfield NJ 0 1,038,855 None None
Dickson City PA 659,790 1,880,722 None None
Private Education
-----------------
Coconut Creek FL 310,111 1,243,682 None None
North Lauderdale FL 1,050,000 2,567,811 None None
Las Vegas NV 1,080,444 3,346,772 None None
Centerville VA 688,917 2,339,688 None None
Springfield VA 300,000 1,191,381 None None
Tacoma WA 255,000 718,614 53,612 24,142
Restaurants
-----------
Siloam Springs AR 190,000 352,808 None None
Douglas AZ 75,000 347,719 None 312
Glendale AZ 624,761 895,976 None None
Tucson AZ 107,393 497,904 None None
Yuma AZ 236,121 541,651 None None
Barstow CA 689,842 690,204 None None
Diamond Bar CA 76,117 183,052 None 25,858
Hemet CA 106,164 199,179 11,922 7
Livermore CA 662,161 823,242 None None
Northridge CA -- -- None None
Rancho Cucamonga CA 230,733 481,225 None None
Rancho Cucamonga CA 95,192 441,334 None None
Red Bluff CA 136,740 633,984 None None
Riverside CA 90,000 170,394 None None
Sacramento CA 386,793 417,290 None None
San Dimas CA 240,562 445,521 None None
San Ramon CA 406,000 1,126,930 None None
Tustin CA -- -- None 73
Colorado Springs CO 152,000 704,736 None None
Colorado Springs CO 313,250 695,730 None None
Montrose CO 217,595 483,284 None None
Sterling CO 95,320 441,928 None None
Westminster CO 338,940 1,571,401 20,000 13,440
Page F-73
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
------------------- ------------ ------------ ----------
Pet Supplies and Services
-------------------------
Matthews NC 610,177 1,394,743 2,004,920
North Plainfield NJ 0 1,038,855 1,038,855
Dickson City PA 659,790 1,880,722 2,540,512
Private Education
-----------------
Coconut Creek FL 310,111 1,243,682 1,553,793
North Lauderdale FL 1,050,000 2,567,811 3,617,811
Las Vegas NV 1,080,444 3,346,772 4,427,216
Centerville VA 688,917 2,339,688 3,028,605
Springfield VA 300,000 1,191,381 1,491,381
Tacoma WA 255,000 796,368 1,051,368
Restaurants
-----------
Siloam Springs AR 190,000 352,808 542,808
Douglas AZ 75,000 348,031 423,031
Glendale AZ 624,761 895,976 1,520,737
Tucson AZ 107,393 497,904 605,297
Yuma AZ 236,121 541,651 777,772
Barstow CA 689,842 690,204 1,380,046
Diamond Bar CA 76,117 208,910 285,027
Hemet CA 106,164 211,108 317,272
Livermore CA 662,161 823,242 1,485,403
Northridge CA -- -- --
Rancho Cucamonga CA 230,733 481,225 711,958
Rancho Cucamonga CA 95,192 441,334 536,526
Red Bluff CA 136,740 633,984 770,724
Riverside CA 90,000 170,394 260,394
Sacramento CA 386,793 417,290 804,083
San Dimas CA 240,562 445,521 686,083
San Ramon CA 406,000 1,126,930 1,532,930
Tustin CA -- 73 73
Colorado Springs CO 152,000 704,736 856,736
Colorado Springs CO 313,250 695,730 1,008,980
Montrose CO 217,595 483,284 700,879
Sterling CO 95,320 441,928 537,248
Westminster CO 338,940 1,604,841 1,943,781
Page F-74
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which
in latest
Income
Accumulated Statement
Description Depreciation Date of Date is Computed
(Note 1) (Note 4) Construction Acquired (in Months)
------------------- ------------ ------------ -------- -----------
Office Supplies
---------------
Matthews NC 137,150 07/17/98 300
North Plainfield NJ 95,292 09/24/98 300
Dickson City PA 266,201 06/20/97 300
Private Education
-----------------
Coconut Creek FL 68,689 08/02/99 12/01/98 300
North Lauderdale FL 286,611 03/30/98 300
Las Vegas NV 373,627 03/04/98 300
Centerville VA 144,575 05/07/99 09/30/98 300
Springfield VA 26,114 11/08/99 300
Tacoma WA 551,313 11/06/84 300
Restaurants
-----------
Siloam Springs AR 44,090 11/20/97 300
Douglas AZ 235,008 11/27/85 300
Glendale AZ 171,729 03/06/96 300
Tucson AZ 335,372 01/17/86 300
Yuma AZ 56,870 05/28/98 300
Barstow CA 63,271 09/24/98 300
Diamond Bar CA 187,128 09/25/78 300
Hemet CA 195,423 04/15/77 300
Livermore CA 75,467 09/23/98 300
Northridge CA -- 04/01/70 N/A
Rancho Cucamonga CA 481,225 04/03/81 180
Rancho Cucamonga CA 296,614 12/20/85 300
Red Bluff CA 397,125 12/18/86 300
Riverside CA 167,720 12/09/76 300
Sacramento CA 41,034 07/31/98 300
San Dimas CA 445,521 03/12/81 180
San Ramon CA 1,126,930 12/08/83 180
Tustin CA -- 09/16/70 N/A
Colorado Springs CO 449,546 09/30/86 300
Colorado Springs CO 355,112 03/10/87 300
Montrose CO 233,700 12/17/87 300
Sterling CO 324,521 12/27/84 300
Westminster CO 1,222,592 06/28/84 300
Page F-75
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
----------------------- ----------------------
Buildings,
Improvements
and
Description Acquisition Carrying
(Note 1) Land Fees Improvements Costs
------------------- --------- ----------- ------------ ------
Restaurants
-----------
Casselberry FL 403,900 897,075 None None
Green Cove Sprgs FL 86,240 399,828 None 226
Jacksonville FL 150,210 693,445 None None
Jacksonville FL 143,299 664,373 None None
Orlando FL 230,000 1,066,339 None None
Orlando FL 209,800 972,679 None None
Orlando FL 600,000 949,489 None None
Oviedo FL 204,200 911,338 None None
Palm Bay FL 330,000 556,668 None None
Garden City GA 197,225 438,043 None None
Hinesville GA 89,220 413,644 None None
Hinesville GA 172,611 383,376 None None
Lithonia GA 89,220 413,647 None 226
Savannah GA 143,993 345,548 None None
Savannah GA 165,409 367,380 None None
Statesboro GA 201,250 446,983 None None
Stone Mountain GA 215,940 1,001,188 None 226
Ankeny IA 100,000 349,218 None None
Boone IA 76,000 386,170 None None
Boise ID 190,894 423,981 None None
Boise ID 161,352 334,041 None None
Nampa ID 74,156 343,820 None None
Rexburg ID 90,760 420,787 None None
Alton IL 225,785 419,315 None None
Dixon IL 230,090 511,036 None None
Salem IL 213,815 474,892 None None
Anderson IN 197,523 438,706 None None
Bedford IN 311,815 692,543 None None
Decatur IN 181,020 385,618 None None
Goshen IN 115,000 533,165 None None
Muncie IN 136,400 632,380 8,000 13,335
Muncie IN 67,156 149,157 None None
New Castle IN 246,192 320,572 None None
Shelbyville IN 128,820 597,263 None None
South Bend IN 133,200 617,545 None 19,211
Westfield IN 213,341 477,300 None None
Page F-76
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
------------------- ------------ ------------ ----------
Restaurants
-----------
Casselberry FL 403,900 897,075 1,300,975
Green Cove Sprgs FL 86,240 400,054 486,294
Jacksonville FL 150,210 693,445 843,655
Jacksonville FL 143,299 664,373 807,672
Orlando FL 230,000 1,066,339 1,296,339
Orlando FL 209,800 972,679 1,182,479
Orlando FL 600,000 949,489 1,549,489
Oviedo FL 204,200 911,338 1,115,538
Palm Bay FL 330,000 556,668 886,668
Garden City GA 197,225 438,043 635,268
Hinesville GA 89,220 413,644 502,864
Hinesville GA 172,611 383,376 555,987
Lithonia GA 89,220 413,873 503,093
Savannah GA 143,993 345,548 489,541
Savannah GA 165,409 367,380 532,789
Statesboro GA 201,250 446,983 648,233
Stone Mountain GA 215,940 1,001,414 1,217,354
Ankeny IA 100,000 349,218 449,218
Boone IA 76,000 386,170 462,170
Boise ID 190,894 423,981 614,875
Boise ID 161,352 334,041 495,393
Nampa ID 74,156 343,820 417,976
Rexburg ID 90,760 420,787 511,547
Alton IL 225,785 419,315 645,100
Dixon IL 230,090 511,036 741,126
Salem IL 213,815 474,892 688,707
Anderson IN 197,523 438,706 636,229
Bedford IN 311,815 692,543 1,004,358
Decatur IN 181,020 385,618 566,638
Goshen IN 115,000 533,165 648,165
Muncie IN 136,400 653,715 790,115
Muncie IN 67,156 149,157 216,313
New Castle IN 246,192 320,572 566,764
Shelbyville IN 128,820 597,263 726,083
South Bend IN 133,200 636,756 769,956
Westfield IN 213,341 477,300 690,641
Page F-77
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which
in latest
Income
Accumulated Statement
Description Depreciation Date of Date is Computed
(Note 1) (Note 4) Construction Acquired (in Months)
------------------- ------------ ------------ -------- -----------
Restaurants
-----------
Casselberry FL 364,223 12/29/89 300
Green Cove Sprgs FL 293,605 12/19/84 300
Jacksonville FL 475,709 09/13/85 300
Jacksonville FL 448,331 12/13/85 300
Orlando FL 720,690 11/18/85 300
Orlando FL 626,909 08/15/86 300
Orlando FL 61,938 05/27/99 12/18/98 300
Oveido FL 29,012 08/24/99 300
Palm Bay FL 40,016 02/17/99 12/29/98 300
Garden City GA 191,172 04/20/89 300
Hinesville GA 303,749 12/20/84 300
Hinesville GA 185,389 12/22/87 300
Lithonia GA 303,340 01/04/85 300
Savannah GA 167,096 12/22/87 300
Savannah GA 177,653 12/22/87 300
Statesboro GA 185,945 11/14/89 300
Stone Mountain GA 634,819 10/30/86 300
Ankeny IA 349,218 07/28/83 180
Boone IA 386,170 12/27/83 180
Boise ID 198,745 05/17/88 300
Boise ID 151,661 10/07/88 300
Nampa ID 215,367 12/31/86 300
Rexburg ID 284,392 11/25/85 300
Alton IL 190,378 10/18/88 300
Dixon IL 247,105 12/28/87 300
Salem IL 232,465 10/30/87 300
Anderson IN 204,352 03/25/88 300
Bedford IN 345,198 07/15/87 300
Decatur IN 196,824 03/31/87 300
Goshen IN 345,664 07/07/86 300
Muncie IN 422,566 03/18/86 300
Muncie IN 70,801 03/30/88 300
New Castle IN 163,133 01/07/87 300
Shelbyville IN 374,122 12/18/86 300
South Bend IN 420,263 04/28/86 300
Westfield IN 195,281 12/21/89 300
Page F-78
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
----------------------- ----------------------
Buildings,
Improvements
and
Description Acquisition Carrying
(Note 1) Land Fees Improvements Costs
------------------- --------- ----------- ------------ ------
Restaurants
-----------
Derby KS 96,060 445,359 None None
El Dorado KS 87,400 405,206 None None
Great Bend KS 95,800 444,154 None None
Wichita KS 98,000 454,350 None None
Lexington KY 122,200 490,200 None None
Alexandria LA 143,000 662,985 None 15,000
Jennings LA 107,120 496,636 None None
La Plata MD 120,140 557,000 None None
Flint MI 827,853 -- None None
Sturgis MI 210,560 467,659 None None
Albert Lea MN 213,150 473,412 None 165
Red Wing MN 248,325 551,541 None 165
Roseville MN 281,600 1,305,560 None None
Belton MO 89,328 418,187 None 234
Blue Springs MO 111,440 516,665 None 234
Carthage MO 85,020 394,175 None None
Chillicothe MO 81,080 375,908 None 234
Fulton MO 210,199 466,861 None None
Hannibal MO 266,011 590,822 None 234
Hazelwood MO 157,117 725,327 None 12,930
Jackson MO 210,199 466,860 None None
Mt. Vernon MO 160,000 282,586 None None
Nevada MO 222,552 494,296 None 234
Ozark MO 140,000 292,482 None None
Sedalia MO 269,798 599,231 None None
St. Charles MO 695,121 1,001,878 None 1,001
St. Charles MO 175,413 809,791 None 10,000
St. Joseph MO 107,648 496,958 None None
Sullivan MO 85,500 396,400 None 234
Clinton MS 100,000 337,371 None None
Southaven MS 263,900 582,303 None None
Fayetteville NC 116,240 538,919 None None
Wilkesboro NC 183,050 406,562 None None
Omaha NE 629,592 1,051,244 None 2,826
Amherst NY 935,355 896,819 5,342 54,045
Fulton NY 294,009 653,006 None None
Page F-79
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
------------------- ------------ ------------ ----------
Restaurants
-----------
Derby KS 96,060 445,359 541,419
El Dorado KS 87,400 405,206 492,606
Great Bend KS 95,800 444,154 539,954
Wichita KS 98,000 454,350 552,350
Lexington KY 122,200 490,200 612,400
Alexandria LA 143,000 677,985 820,985
Jennings LA 107,120 496,636 603,756
La Plata MD 120,140 557,000 677,140
Flint MI 827,853 -- 827,853
Sturgis MI 210,560 467,659 678,219
Albert Lea MN 213,150 473,577 686,727
Red Wing MN 248,325 551,706 800,031
Roseville MN 281,600 1,305,560 1,587,160
Belton MO 89,328 418,421 507,749
Blue Springs MO 111,440 516,899 628,339
Carthage MO 85,020 394,175 479,195
Chillicothe MO 81,080 376,142 457,222
Fulton MO 210,199 466,861 677,060
Hannibal MO 266,011 591,056 857,067
Hazelwood MO 157,117 738,257 895,374
Jackson MO 210,199 466,860 677,059
Mt. Vernon MO 160,000 282,586 442,586
Nevada MO 222,552 494,530 717,082
Ozark MO 140,000 292,482 432,482
Sedalia MO 269,798 599,231 869,029
St. Charles MO 695,121 1,002,879 1,698,000
St. Charles MO 175,413 819,791 995,204
St. Joseph MO 107,648 496,958 604,606
Sullivan MO 85,500 396,634 482,134
Clinton MS 100,000 337,371 437,371
Southaven MS 263,900 582,303 846,203
Fayetteville NC 116,240 538,919 655,159
Wilkesboro NC 183,050 406,562 589,612
Omaha NE 629,592 1,054,070 1,683,662
Amherst NY 935,355 956,206 1,891,561
Fulton NY 294,009 653,006 947,015
Page F-80
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which
in latest
Income
Accumulated Statement
Description Depreciation Date of Date is Computed
(Note 1) (Note 4) Construction Acquired (in Months)
------------------- ------------ ------------ -------- -----------
Restaurants
-----------
Derby KS 302,673 10/29/85 300
El Dorado KS 267,322 04/10/86 300
Great Bend KS 326,153 12/26/84 300
Wichita KS 292,836 08/08/86 300
Lexington KY 308,446 12/03/86 300
Alexandria LA 455,830 01/17/86 300
Jennings LA 337,522 10/17/85 300
La Plata MD 375,875 12/03/85 300
Flint MI -- 04/13/95 300
Sturgis MI 227,533 11/12/87 300
Albert Lea MN 228,939 12/16/87 300
Red Wing MN 266,683 12/30/87 300
Roseville MN 958,707 12/18/84 300
Belton MO 307,087 12/18/84 300
Blue Springs MO 379,401 12/28/84 300
Carthage MO 265,996 12/03/85 300
Chillicothe MO 276,040 12/26/84 300
Fulton MO 232,707 07/30/87 300
Hannibal MO 294,495 07/30/87 300
Hazelwood MO 502,536 08/28/85 300
Jackson MO 232,707 07/30/87 300
Mt. Vernon MO 35,313 11/20/97 300
Nevada MO 246,382 07/30/87 300
Ozark MO 36,550 11/20/97 300
Sedalia MO 259,740 07/31/89 300
St. Charles MO 201,375 12/22/95 03/16/95 300
St. Charles MO 562,529 08/28/85 300
St. Joseph MO 340,913 09/04/85 300
Sullivan MO 291,086 12/27/84 300
Clinton MS 337,371 07/28/83 180
Southaven MS 293,730 05/11/87 300
Fayetteville NC 395,742 12/20/84 300
Wilkesboro NC 202,652 07/24/87 300
Omaha NE 233,026 06/02/95 02/24/95 300
Amherst NY 185,191 12/21/95 05/31/95 300
Fulton NY 314,972 12/24/87 300
Page F-81
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
----------------------- ----------------------
Buildings,
Improvements
and
Description Acquisition Carrying
(Note 1) Land Fees Improvements Costs
------------------- --------- ----------- ------------ ------
Restaurants
-----------
Watertown NY 139,199 645,355 None None
Akron OH 723,347 17 None None
Ashland OH 120,740 559,801 None 11
Celina OH 207,060 459,841 None None
Stow OH 317,546 712,455 None None
Troy OH 130,540 605,238 None None
Wash. Courthouse OH 123,120 570,836 None 176
Wilmington OH 119,320 553,217 None 176
Broken Arrow OK 245,000 369,002 None None
Norman OK 734,335 -- None None
Oklahoma City OK 759,826 -- None None
Owasso OK 247,450 549,597 None None
Ponca City OK 234,990 521,923 None None
Corvallis OR 172,788 383,766 None 3
Hermiston OR 85,560 396,675 None None
Lake Oswego OR 175,899 815,508 None 3
Milwaukie OR 179,174 830,689 None 3
Salem OR 198,540 440,964 None 3
Connellsville PA 264,670 587,843 None None
Waynesburg PA 222,285 493,704 None None
Pierre SD 251,790 559,232 None None
Memphis TN 405,274 1,060,680 None 1,749
Nashville TN 484,975 1,192,627 20,000 31,098
Allen TX 165,000 306,771 None None
Athens TX 245,245 544,700 None None
Bedford TX 919,303 98,231 None None
Beeville TX 250,490 556,349 None None
Brownwood TX 288,225 640,160 None None
Crockett TX 90,780 420,880 None None
Dallas TX 742,507 -- None None
Dallas TX 242,025 479,170 None None
El Campo TX 98,060 454,631 None None
Ennis TX 173,250 384,793 None None
Fort Worth TX 223,195 492,067 None None
Fort Worth TX 423,281 382,059 None None
Gainesville TX 89,220 413,644 None None
Page F-82
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
------------------- ------------ ------------ ----------
Restaurants
-----------
Watertown NY 139,199 645,355 784,554
Akron OH 723,347 17 723,364
Ashland OH 120,740 559,812 680,552
Celina OH 207,060 459,841 666,901
Stow OH 317,546 712,455 1,030,001
Troy OH 130,540 605,238 735,778
Wash. Courthouse OH 123,120 571,012 694,132
Wilmington OH 119,320 553,393 672,713
Broken Arrow OK 245,000 369,002 614,002
Norman OK 734,335 -- 734,335
Oklahoma City OK 759,826 -- 759,826
Owasso OK 247,450 549,597 797,047
Ponca City OK 234,990 521,923 756,913
Corvallis OR 172,788 383,769 556,557
Hermiston OR 85,560 396,675 482,235
Lake Oswego OR 175,899 815,511 991,410
Milwaukie OR 179,174 830,692 1,009,866
Salem OR 198,540 440,967 639,507
Connellsville PA 264,670 587,843 852,513
Waynesburg PA 222,285 493,704 715,989
Pierre SD 251,790 559,232 811,022
Memphis TN 405,274 1,062,429 1,467,703
Nashville TN 484,975 1,243,725 1,728,700
Allen TX 165,000 306,771 471,771
Athens TX 245,245 544,700 789,945
Bedford TX 919,303 98,231 1,017,534
Beeville TX 250,490 556,349 806,839
Brownwood TX 288,225 640,160 928,385
Crockett TX 90,780 420,880 511,660
Dallas TX 742,507 -- 742,507
Dallas TX 242,025 479,170 721,195
El Campo TX 98,060 454,631 552,691
Ennis TX 173,250 384,793 558,043
Fort Worth TX 223,195 492,067 715,262
Fort Worth TX 423,281 382,059 805,340
Gainesville TX 89,220 413,644 502,864
Page F-83
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which
in latest
Income
Accumulated Statement
Description Depreciation Date of Date is Computed
(Note 1) (Note 4) Construction Acquired (in Months)
------------------- ------------ ------------ -------- -----------
Restaurants
-----------
Watertown NY 414,136 08/18/86 300
Akron OH 2 12/22/94 300
Ashland OH 350,655 12/19/86 300
Celina OH 237,470 01/02/87 300
Stow OH 343,853 12/31/87 300
Troy OH 380,831 12/05/86 300
Wash. Courthouse OH 357,568 12/19/86 300
Wilmington OH 346,533 12/31/86 300
Broken Arrow OK 44,893 12/12/97 300
Norman OK -- 09/29/95 06/05/95 300
Oklahoma City OK -- 07/06/95 300
Owasso OK 265,768 12/28/87 300
Ponca City OK 252,385 12/30/87 300
Corvallis OR 185,577 12/22/87 300
Hermiston OR 291,288 12/18/84 300
Lake Oswego OR 620,150 05/16/84 300
Milwaukie OR 633,931 05/08/84 300
Salem OR 188,933 05/23/89 300
Connellsville PA 291,258 08/17/87 300
Waynesburg PA 244,614 08/17/87 300
Pierre SD 270,426 12/01/87 300
Memphis TN 231,582 06/30/95 03/17/95 300
Nashville TN 1,231,602 05/20/83 180
Allen TX 17,895 07/09/99 05/28/99 300
Athens TX 263,399 12/01/87 300
Bedford TX 98,231 12/27/94 300
Beeville TX 277,313 07/31/87 300
Brownwood TX 309,458 12/28/87 300
Crockett TX 282,869 12/17/85 300
Dallas TX -- 04/13/95 300
Dallas TX 173,024 06/25/91 300
El Campo TX 307,265 11/25/85 300
Ennis TX 186,074 12/28/87 300
Fort Worth TX 187,180 06/26/91 300
Fort Worth TX 89,784 02/10/95 300
Gainesville TX 303,749 12/18/84 300
Page F-84
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
----------------------- ----------------------
Buildings,
Improvements
and
Description Acquisition Carrying
(Note 1) Land Fees Improvements Costs
------------------- --------- ----------- ------------ ------
Restaurants
-----------
Hewitt TX 120,240 207,216 None None
Hillsboro TX 75,992 352,316 None None
Houston TX 194,994 386,056 None None
Houston TX 184,175 364,636 None None
Killeen TX 262,500 583,014 None 14,398
Lufkin TX 105,904 490,998 None None
Mesquite TX 729,596 120,820 None None
Mesquite TX 134,940 625,612 None None
Mexia TX 93,620 434,046 None None
New Braunfels TX 185,500 411,997 None None
Orange TX 93,560 433,768 None None
Plainview TX 125,000 350,767 None None
Port Lavaca TX 244,759 543,619 None None
Porter TX 227,067 333,031 None None
Rowlett TX 126,933 585,986 None None
Santa Fe TX 304,414 623,331 None None
Sealy TX 197,871 391,753 None None
Stafford TX 214,024 423,733 None None
Temple TX 302,505 291,414 None None
Vidor TX 90,618 420,124 None None
Waxahachie TX 326,935 726,137 None None
Cedar City UT 130,000 296,544 None None
Orem UT 516,129 1,004,608 None None
Sandy UT 635,945 884,792 None None
Norfolk VA 251,207 575,250 None 12,983
Virginia Beach VA 314,790 699,161 None None
Auburn WA 301,595 669,851 None None
Marysville WA 276,273 613,612 None None
Oak Harbor WA 275,940 612,874 None None
Redmond WA 610,334 1,262,104 None None
Spokane WA 479,531 646,719 None None
Tacoma WA 198,857 921,947 None 653
Grafton WI 149,778 332,664 None None
Monroe WI 193,130 428,947 None 279
Portage WI 199,605 443,328 None 279
Shawano WI 205,730 456,932 None 279
Page F-85
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
------------------- ------------ ------------ ----------
Restaurants
-----------
Hewitt TX 120,240 207,216 327,456
Hillsboro TX 75,992 352,316 428,308
Houston TX 194,994 386,056 581,050
Houston TX 184,175 364,636 548,811
Killeen TX 262,500 597,412 859,912
Lufkin TX 105,904 490,998 596,902
Mesquite TX 729,596 120,820 850,416
Mesquite TX 134,940 625,612 760,552
Mexia TX 93,620 434,046 527,666
New Braunfels TX 185,500 411,997 597,497
Orange TX 93,560 433,768 527,328
Plainview TX 125,000 350,767 475,767
Port Lavaca TX 244,759 543,619 788,378
Porter TX 227,067 333,031 560,098
Rowlett TX 126,933 585,986 712,919
Santa Fe TX 304,414 623,331 927,745
Sealy TX 197,871 391,753 589,624
Stafford TX 214,024 423,733 637,757
Temple TX 302,505 291,414 593,919
Vidor TX 90,618 420,124 510,742
Waxahachie TX 326,935 726,137 1,053,072
Cedar City UT 130,000 296,544 426,544
Orem UT 516,129 1,004,608 1,520,737
Sandy UT 635,945 884,792 1,520,737
Norfolk VA 251,207 588,233 839,440
Virginia Beach VA 314,790 699,161 1,013,951
Auburn WA 301,595 669,851 971,446
Marysville WA 276,273 613,612 889,885
Oak Harbor WA 275,940 612,874 888,814
Redmond WA 610,334 1,262,104 1,872,438
Spokane WA 479,531 646,719 1,126,250
Tacoma WA 198,857 922,600 1,121,457
Grafton WI 149,778 332,664 482,442
Monroe WI 193,130 429,226 622,356
Portage WI 199,605 443,607 643,212
Shawano WI 205,730 457,211 662,941
Page F-86
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which
in latest
Income
Accumulated Statement
Description Depreciation Date of Date is Computed
(Note 1) (Note 4) Construction Acquired (in Months)
------------------- ------------ ------------ -------- -----------
Restaurants
-----------
Hewitt TX 13,466 05/28/99 300
Hillsboro TX 265,307 08/01/84 300
Houston TX 139,401 06/25/91 300
Houston TX 131,667 06/25/91 300
Killeen TX 298,296 05/29/87 300
Lufkin TX 335,023 10/08/85 300
Mesquite TX 120,820 12/23/94 300
Mesquite TX 413,369 03/20/86 300
Mexia TX 291,718 12/18/85 300
New Braunfels TX 210,289 03/26/87 300
Orange TX 292,715 12/10/85 300
Plainview TX 350,767 01/24/84 180
Port Lavaca TX 270,968 07/30/87 300
Porter TX 78,262 02/09/95 300
Rowlett TX 401,987 09/06/85 300
Santa Fe TX 69,547 03/23/98 300
Sealy TX 141,458 06/25/91 300
Stafford TX 153,006 06/26/91 300
Temple TX 68,482 02/09/95 300
Vidor TX 316,367 08/01/84 300
Waxahachie TX 351,081 12/29/87 300
Cedar City UT 296,544 08/04/83 180
Orem UT 202,596 12/13/95 300
Sandy UT 178,433 12/22/95 300
Norfolk VA 288,804 10/15/87 300
Virginia Beach VA 344,330 09/03/87 300
Auburn WA 323,918 12/16/87 300
Marysville WA 304,026 08/27/87 300
Oak Harbor WA 305,487 07/16/87 300
Redmond WA 1,262,104 12/10/82 180
Spokane WA 72,164 03/27/98 300
Tacoma WA 701,155 05/29/84 300
Grafton WI 162,843 10/29/87 300
Monroe WI 207,424 12/17/87 300
Portage WI 214,364 12/23/87 300
Shawano WI 220,944 12/17/87 300
Page F-87
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
----------------------- ----------------------
Buildings,
Improvements
and
Description Acquisition Carrying
(Note 1) Land Fees Improvements Costs
------------------- --------- ----------- ------------ ------
Restaurants
-----------
Sturgeon Bay WI 214,865 477,221 None 279
Oak Hill WV 85,860 398,069 None None
Laramie WY 210,000 466,417 None None
Riverton WY 216,685 481,267 None None
Sheridan WY 117,160 543,184 None None
Shoe Stores
-----------
Little Rock AR 1,079,232 2,594,956 None None
Maplewood MN 785,023 2,715,629 None 687
Houston TX 1,096,376 2,300,690 None None
Midland TX 544,075 1,322,431 None None
Theaters
--------
Fairbanks AK 2,586,879 9,575 None None
Huntsville AL 2,810,868 14,308 None None
Naples FL 2,618,441 8,979,199 None None
Chamblee GA 4,329,404 10,222 None None
Akron OH 1,511,018 1,386 None None
Hillsboro OR 4,915,032 16,377 None None
Portland OR 2,793,001 9,942 None None
Glen Allen VA 1,314,065 9,748,457 None None
Sterling VA 4,546,305 19,295 None None
Marysville WA 1,988,142 -- None None
Video Rental
------------
Birmingham AL 392,795 865,115 None None
Southington CT 399,562 1,009,125 None None
Port St. Lucie FL 612,695 701,759 None None
Tampa FL 401,874 933,768 None None
Atlanta GA 652,551 763,360 None None
Brunswick GA 290,369 788,880 None None
Norcross GA 431,284 724,037 None None
Plainfield IN 453,645 908,485 None None
Topeka KS 285,802 966,286 None None
Wichita KS 289,714 797,856 None None
Winchester KY 355,474 929,177 None None
Page F-88
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
------------------- ------------ ------------ ----------
Restaurants
-----------
Sturgeon Bay WI 214,865 477,500 692,365
Oak Hill WV 85,860 398,069 483,929
Laramie WY 210,000 466,417 676,417
Riverton WY 216,685 481,267 697,952
Sheridan WY 117,160 543,184 660,344
Shoe Stores
-----------
Little Rock AR 1,079,232 2,594,956 3,674,188
Maplewood MN 785,023 2,716,316 3,501,339
Houston TX 1,096,376 2,300,690 3,397,066
Midland TX 544,075 1,322,431 1,866,506
Theaters
--------
Fairbanks AK 2,586,879 9,575 2,596,454
Huntsville AL 2,810,868 14,308 2,825,176
Naples FL 2,618,441 8,979,199 11,597,640
Chamblee GA 4,329,404 10,222 4,339,626
Akron OH 1,511,018 1,386 1,512,404
Hillsboro OR 4,915,032 16,377 4,931,409
Portland OR 2,793,001 9,942 2,802,943
Glen Allen VA 1,314,065 9,748,457 11,062,522
Sterling VA 4,546,305 19,295 4,565,600
Marysville WA 1,988,142 -- 1,988,142
Video Rental
------------
Birmingham AL 392,795 865,115 1,257,910
Southington CT 399,562 1,009,125 1,408,687
Port St. Lucie FL 612,695 701,759 1,314,454
Tampa FL 401,874 933,768 1,335,642
Atlanta GA 652,551 763,360 1,415,911
Brunswick GA 290,369 788,880 1,079,249
Norcross GA 431,284 724,037 1,155,321
Plainfield IN 453,645 908,485 1,362,130
Topeka KS 285,802 966,286 1,252,088
Wichita KS 289,714 797,856 1,087,570
Winchester KY 355,474 929,177 1,284,651
Page F-89
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which
in latest
Income
Accumulated Statement
Description Depreciation Date of Date is Computed
(Note 1) (Note 4) Construction Acquired (in Months)
------------------- ------------ ------------ -------- -----------
Restaurants
-----------
Sturgeon Bay WI 230,768 12/01/87 300
Oak Hill WV 292,313 12/28/84 300
Laramie WY 187,250 03/12/90 300
Riverton WY 232,725 12/01/87 300
Sheridan WY 365,068 12/31/85 300
Shoe Stores
-----------
Little Rock AR 255,171 07/21/98 300
Maplewood MN 185,562 04/02/99 300
Houston TX 302,840 09/05/97 300
Midland TX 151,967 02/02/98 300
Theaters
--------
Fairbanks AK -- 09/27/00 300
Huntsville AL -- 09/27/00 300
Naples FL 104,734 09/27/00 300
Chamblee GA -- 09/27/00 300
Akron OH -- 09/27/00 300
Hillsboro OR -- 09/27/00 300
Portland OR -- 09/27/00 300
Glen Allen VA 113,690 09/27/00 300
Sterling VA -- 09/27/00 300
Marysville WA -- 07/27/00 300
Video Rental
------------
Birmingham AL 113,848 09/30/97 300
Southington CT 82,416 12/29/98 300
Port St. Lucie FL 55,148 12/09/98 09/08/98 300
Tampa FL 113,606 12/23/97 300
Atlanta GA 62,362 12/18/98 300
Brunswick GA 95,975 12/31/97 300
Norcross GA 92,854 10/01/97 300
Plainfield IN 107,389 01/30/98 300
Topeka KS 117,563 12/19/97 300
Wichita KS 67,833 11/23/98 300
Winchester KY 94,463 06/30/98 300
Page F-90
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
----------------------- ----------------------
Buildings,
Improvements
and
Description Acquisition Carrying
(Note 1) Land Fees Improvements Costs
------------------- --------- ----------- ------------ ------
Video Rental
------------
Warren MI 356,348 903,351 None None
Centerville OH 601,408 758,192 None None
Dayton OH 401,723 698,872 None None
Forest Park OH 328,187 921,232 None None
Franklin OH 337,572 777,943 None None
Springboro OH 261,916 897,489 None None
Oklahoma City OK 307,658 474,096 None None
Tulsa OK 318,441 1,004,663 None None
Bartlett TN 420,000 674,437 None None
Clarksville TN 499,885 840,869 None None
Columbia TN 466,469 716,723 None None
Hendersonville TN 333,677 938,592 None None
Jackson TN 381,076 857,261 None None
Memphis TN 381,265 900,580 None None
Murfreesboro TN 406,056 886,293 None None
Murfreesboro TN 385,437 782,396 None None
Smyrna TN 302,372 836,214 None None
Austin TX 407,910 885,113 None None
Beaumont TX 293,919 832,154 None None
Hurst TX 373,084 871,163 None None
Lubbock TX 266,805 857,492 None None
Woodway TX 372,487 835,198 None None
Hampton VA 373,499 836,071 None None
Virginia Beach VA 551,588 797,260 None None
Other
-----
Escondido CA -- -- 13,901 None
Fresno CA 428,900 3,434,562 None 624
San Diego CA 5,797,411 15,473,497 89,943 29,020
San Diego CA 2,485,160 8,697,822 46,053 20,115
San Diego CA 3,745,000 8,885,351 55,353 23,815
Venice FL 259,686 362,562 None None
Cherry Hill NJ 1,074,640 1,032,304 None 64,400
Humble TX 106,000 545,518 14,289 7,336
Plano TX 565,000 6,935,000 None 174,263
Misc. Investments 18,814,107 4,314,335 None None
Page F-91
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
------------------- ------------ ------------ ----------
Video Rental
------------
Warren MI 356,348 903,351 1,259,699
Centerville OH 601,408 758,192 1,359,600
Dayton OH 401,723 698,872 1,100,595
Forest Park OH 328,187 921,232 1,249,419
Franklin OH 337,572 777,943 1,115,515
Springboro OH 261,916 897,489 1,159,405
Oklahoma City OK 307,658 474,096 781,754
Tulsa OK 318,441 1,004,663 1,323,104
Bartlett TN 420,000 674,437 1,094,437
Clarksville TN 499,885 840,869 1,340,754
Columbia TN 466,469 716,723 1,183,192
Hendersonville TN 333,677 938,592 1,272,269
Jackson TN 381,076 857,261 1,238,337
Memphis TN 381,265 900,580 1,281,845
Murfreesboro TN 406,056 886,293 1,292,349
Murfreesboro TN 385,437 782,396 1,167,833
Smyrna TN 302,372 836,214 1,138,586
Austin TX 407,910 885,113 1,293,023
Beaumont TX 293,919 832,154 1,126,073
Hurst TX 373,084 871,163 1,244,247
Lubbock TX 266,805 857,492 1,124,297
Woodway TX 372,487 835,198 1,207,685
Hampton VA 373,499 836,071 1,209,570
Virginia Beach VA 551,588 797,260 1,348,848
Other
-----
Escondido CA -- 13,901 13,901
Fresno CA 428,900 3,435,186 3,864,086
San Diego CA 5,797,411 15,592,460 21,389,871
San Diego CA 2,485,160 8,763,990 11,249,150
San Diego CA 3,745,000 8,964,519 12,709,519
Venice FL 259,686 362,562 622,248
Cherry Hill NJ 1,074,640 1,096,704 2,171,344
Humble TX 106,000 567,143 673,143
Plano TX 565,000 7,109,263 7,674,263
Misc. Investments 18,814,107 4,314,335 23,128,442
Page F-92
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which
in latest
Income
Accumulated Statement
Description Depreciation Date of Date is Computed
(Note 1) (Note 4) Construction Acquired (in Months)
------------------- ------------ ------------ -------- -----------
Video Rental
------------
Warren MI 106,789 01/09/98 300
Centerville OH 77,080 06/30/98 300
Dayton OH 71,050 06/29/98 300
Forest Park OH 115,137 11/14/97 300
Franklin OH 94,573 12/30/97 300
Springboro OH 82,278 09/21/98 300
Oklahoma City OK 51,332 04/23/98 300
Tulsa OK 132,222 09/26/97 300
Bartlett TN 42,115 05/12/99 02/23/99 300
Clarksville TN 74,284 10/02/98 300
Columbia TN 94,313 09/26/97 300
Hendersonville TN 114,194 12/10/97 300
Jackson TN 112,827 09/26/97 300
Memphis TN 100,503 03/31/98 300
Murfreesboro TN 116,640 09/26/97 300
Murfreesboro TN 56,043 03/11/99 300
Smyrna TN 110,054 09/02/97 300
Austin TX 107,686 12/01/97 300
Beaumont TX 109,521 09/05/97 300
Hurst TX 85,664 07/29/98 300
Lubbock TX 115,695 08/29/97 300
Woodway TX 101,616 12/16/97 300
Hampton VA 101,720 12/19/97 300
Virginia Beach VA 91,587 02/23/98 300
Other
-----
Escondido CA 718 08/01/92 N/A
Fresno CA 3,434,562 10/29/82 180
San Diego CA 7,388,219 01/20/89 08/05/87 300
San Diego CA 4,422,448 01/23/89 09/19/86 300
San Diego CA 5,746,262 03/08/86 03/25/86 300
Venice FL 59,823 11/26/96 300
Cherry Hill NJ 223,377 01/26/95 300
Humble TX 446,192 03/25/86 300
Plano TX 1,409,049 05/26/95 300
Misc. Investments -- Various N/A
Page F-93
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Cost Capitalized
Subsequent
Initial Cost to Company to Acquisition
----------------------- ----------------------
Buildings,
Improvements
and
Description Acquisition Carrying
(Note 1) Land Fees Improvements Costs
------------------- --------- ----------- ------------ ------
Other
-----
Misc. Investments -- 398,245 None 53,227
----------- ----------- ------- -------
389,505,187 720,744,095 413,621 818,906
=========== =========== ======= =======
Page F-94
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Gross Amount at Which Carried
at Close of Period (Notes 2, 3 and 5)
Buildings,
Improvements
and
Description Acquisition
(Note 1) Land Fees Total
------------------- ------------ ------------ ----------
Other
-----
Misc. Investments -- 451,472 451,472
----------- ----------- -------------
389,505,187 721,976,622 1,111,481,809
=========== =========== =============
Page F-95
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Life on
which
in latest
Income
Accumulated Statement
Description Depreciation Date of Date is Computed
(Note 1) (Note 4) Construction Acquired (in Months)
------------------- ------------ ------------ -------- -----------
Other
-----
Misc. Investments 315,299 Various Various
-----------
217,204,145
===========
</TABLE>
Page F-96
REALTY INCOME CORPORATION AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
Note 1. One thousand sixty-four of the properties are single unit retail
outlets. One grocery property located in Sheboygan, WI and three other
properties located in San Diego, CA are multi-tenant commercial properties.
All properties were acquired on an all cash basis except one; no
encumbrances were outstanding for the periods presented.
Note 2. The aggregate cost for federal income tax purposes is
$1,022,515,010.
Note 3. Reconciliation of total real estate carrying value for the three
years ended December 31, 2000 are as follows:
<TABLE>
2000 1999 1998
----------- ----------- -----------
<S> <C> <C> <C>
Balance at beginning of
period 1,062,479,130 889,835,701 699,797,446
Additions during period:
Acquisitions 98,558,750 181,375,766 193,436,163
Equipment -- -- 14,685
Improvements, etc. 90,502 147,976 79,790
Other (leasing costs) 307,556 241,980 168,425
------------- ----------- -----------
Total additions 98,956,808 181,765,722 193,699,063
------------- ------------- -----------
Deductions during period:
Cost of real estate sold 49,850,903 9,109,061 3,520,108
Cost of equipment sold -- -- 58,000
Other (fully amortized
commissions) 103,226 13,232 82,700
Other (provision for
impairment losses) -- -- --
------------- ------------- -----------
Total deductions 49,954,129 9,122,293 3,660,808
------------- ------------- -----------
Balance at close of period: 1,111,481,809 1,062,479,130 889,835,701
============= ============= ===========
(table continued)
Page F-97
(continued)
Note 4. Reconciliation of accumulated depreciation for the three years
ended December 31, 2000 are as follows:
2000 1999 1998
----------- ----------- -----------
Balance at beginning of period: 195,386,310 171,555,267 152,206,136
Additions during period -
provision for depreciation 27,845,368 24,823,759 20,766,430
Deductions during period:
Accumulated depreciation
of real estate and
equipment sold 5,924,307 979,484 1,334,599
Other (fully amortized
commissions) 103,226 13,232 82,700
----------- ----------- -----------
Balance at close of period 217,204,145 195,386,310 171,555,267
=========== =========== ===========
</TABLE>
Note 5. No provision for impairment loss was made in 2000, 1999 or 1998.
Page F-98
160
</TEXT>
</DOCUMENT>