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Realty Income Completes $1 Billion In 2011 Acquisitions

Realty Income Corporation (Realty Income), the Monthly Dividend Company ®, (NYSE:O), announced today that during 2011, the Company invested $1 billion in 164 properties. The properties are located in 26 states and are 100% leased to 22 tenants in 17 different industries, with an initial average lease yield of approximately 7.8%.

Commenting on these acquisitions, Tom A. Lewis, Chief Executive Officer stated, “We are pleased with this record year of property acquisitions, which are leased to a diverse group of tenants. These immediately accretive acquisitions will further diversify our property portfolio and provide us with increased lease revenue from which to pay monthly dividends.”

Property Portfolio Update

On January 10, 2012, Friendly’s Ice Cream (“Friendly’s”), one of Realty Income’s tenants, announced that it was emerging from voluntary reorganization under Chapter 11 Federal Bankruptcy Laws (which they had filed for on October 5, 2011). Friendly’s accepted 102 of their 121 leases with Realty Income. Friendly’s rejected 19 leases, representing approximately $1.8 million of annualized rent. These properties, returned to Realty Income, are immediately available for re-lease to other tenants. Overall, post-bankruptcy, assuming re-lease of the 19 rejected properties and rent concessions on some other properties, Realty Income estimates that it will recover approximately 80% of the $16.1 million of annualized rent that Friendly’s was paying the Company before the bankruptcy filing.

On January 18, 2012, Buffets Holdings, Inc. (“Buffets”), one of Realty Income’s tenants, announced that it filed for voluntary reorganization under Chapter 11 Federal Bankruptcy Laws. Buffets leases 86 properties from Realty Income that, as of December 31, 2011, represented approximately $18.2 million, or 3.9% of Realty Income’s rental revenue. The Company anticipates that Buffets will reject the leases on 7 of Realty Income’s 86 properties, representing approximately $1.8 million of annualized rent. These properties, to be returned to Realty Income, will be immediately available for re-lease to other tenants. Realty Income and Buffets have also already reached a preliminary agreement (subject to court approval) regarding modifications to some of Buffets other leases with the Company. Overall, post-bankruptcy, assuming re-lease of the 7 rejected properties and rent concessions on some other properties, Realty Income estimates that it will recover approximately 65% of the $18.2 million of annualized rent that Buffets was paying the Company before the bankruptcy filing.

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