Realty Income and KKR plan to form a euro-denominated joint venture in which KKR will invest €528 million for a 49% stake, while Realty Income keeps 51% and continues managing the assets. The venture will hold 54 stabilized net lease properties across Spain, Ireland, Poland and the Netherlands, expected to generate €67.7 million of first-year cash net operating income, with 59% of base rent tied to investment-grade tenants and a 7.2-year weighted average remaining lease term. The portfolio is being contributed at a 5.9% initial cap rate after recurring management fees paid to Realty Income, KKR's return is expected to be capped at an internal rate of return of 6.3%-6.5%, and Realty Income can redeem KKR's stake between years 10 and 17. The deal extends a private-capital strategy that already reduced Realty Income's dependence on public equity, with public equity funding just 18% of investment volume in the first half of 2026 versus an average of 47% over the prior three years, and management fee income reaching $3.2 million in the second quarter. Realty Income raised its 2026 investment guidance to $10 billion from $9.5 billion after investing $5.3 billion in the first half, and the KKR venture is expected to close on Sept. 30.
KKR & Co. Inc.KKR invests €528 million for a 49% stake in a euro-denominated net lease JV with Realty Income, deploying capital into a stabilized portfolio.
