Realty Income, KKR Establish European Joint Venture

Realty Income Corporation and KKR have formed a euro-denominated joint venture that is expected to own a diversified portfolio of existing European net lease real estate assets contributed by Realty Income, spanning four markets and a broad mix of industries and tenants. Capital accounts advised by KKR intend to make an initial investment of €528 million (approximately US$609 million) to acquire a 49% equity interest in the JV, with Realty Income retaining a 51% ownership interest and continuing to manage the portfolio through its European operating platform.

“This transaction marks another important step in Realty Income’s evolution as the leading global net lease platform,” said Sumit Roy, Realty Income’s president and CEO. “Building on the private capital foundation we have established in the U.S., our strategic partnership with KKR extends this strategy into Europe and demonstrates both the portability of our competitive advantages across borders and the confidence that leading institutional investors have in our platform.”

The transaction is expected to close on Sept. 30. Lazard acted as financial advisor and DLA Piper served as legal advisor to Realty Income. Citi served as financial advisor and Latham & Watkins LLP served as legal advisor to KKR.