1Q 2017 RETAIL INVESTOR PRESENTATION

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Dennis Fletcher
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1 1Q 2017 RETAIL INVESTOR PRESENTATION

Contents Company Overview & Historical Risk/Reward 2 Dependable Dividends 6 Portfolio Diversification 10 Asset and Portfolio Management 15 Investment Strategy 18 Capital Structure & Scalability 22

Forward-looking statements involve known and unknown risks, which may cause the company s actual future results to differ materially from expected results.

2 Contents Company Overview & Historical Risk/Reward 2 Dependable Dividends 6 Portfolio Diversification 10 Asset and Portfolio Management 15 Investment Strategy 18 Capital Structure & Scalability Guidance & Business Plan 26 Statements in this investor presentation that are not strictly historical are "forward-looking" statements. Forward-looking statements involve known and unknown risks, which may cause the company s actual future results to differ materially from expected results. These risks include, among others, general economic conditions, local real estate conditions, tenant financial health, the availability of capital to finance planned growth, continued volatility and uncertainty in the credit markets and broader financial markets, property acquisitions and the timing of these acquisitions, charges for property impairments, and the outcome of any legal proceedings to which the company is a party, as described in the company's filings with the Securities and Exchange Commission. Consequently, forward-looking statements should be regarded solely as reflections of the company's current operating plans and estimates. Actual operating results may differ materially from what is expressed or forecast in this investor presentation. The company undertakes 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 these statements were made. All data as of March 31, 2017 unless otherwise specified 1

3 Company Overview: The Monthly Dividend Company Leading real estate company: Largest net lease REIT with 4,980 properties and $22.14 billion enterprise value Founded in 1969; NYSE listing in 1994 (NYSE ticker O ) Member of S&P 500 index Member of S&P High-Yield Dividend Aristocrats index (1) Consistent track record: 16.9% compound average annual shareholder return since NYSE listing in % dividend yield, paid monthly 4.7% compound average annual growth in dividend since NYSE listing 78 consecutive quarters of dividend increases (1) The S&P High Yield Dividend Aristocrats index is designed to measure the performance of companies within the S&P Composite 1500 that have followed a managed-dividends policy of consistently increasing dividends every year for at least 20 years. 2

4 Our Approach as The Monthly Dividend Company Generate lease revenue to support the payment of growing monthly dividends Remain disciplined in our acquisition underwriting Execute long-term net lease agreements Actively manage the portfolio to maintain high occupancy Target well-located, Freestanding, single-tenant, commercial properties Support and grow monthly dividends for shareholders Maintain a conservative balance sheet 3

5 Differentiated Business Model from Traditional Retail REITs Lease structure and growth drivers support predictable revenue stream relative to other forms of retail real estate Realty Income leases freestanding properties on a triple-net basis (tenant pays for taxes, insurance and maintenance) Shopping Centers and Malls Initial Length of Lease 15+ Years < 10 Years Remaining Avg Term ~ 10 Years ~ 5-7 Years Responsibility for Property Expenses Tenant Landlord Gross Margin > 98% ~ 75% Volatility of Rental Revenue Low Modest / High Maintenance Capital Expenditures Low Modest / High Reliance on Anchor Tenant(s) None High Average Retail Property Size / Fungibility 11k sf / High 150k 850k sf / Low Realty Income growth opportunities through acquisitions Shopping Centers and Malls Target Markets Many Few External Acquisition Opportunities High Low Institutional Buyer Competition Modest High 4

Annualized Total Return Since '94 Standard Deviation of Total Returns Since '94 O O Equity REIT Index DJIA S&P 500 Nasdaq Standard

6 Safety: Lowest Volatility, Highest Return Relative to Market Indices Long-term performance exceeds widely followed benchmark indices Since 1994 NYSE listing, Realty Income shares have outperformed benchmark indices while exhibiting lower volatility Annualized Total Return Since '94 Standard Deviation of Total Returns Since '94 O O Equity REIT Index DJIA S&P 500 Nasdaq Standard deviation of total returns measures deviation from average annual total returns since 1994 and uses annualized total returns for YTD period 5

7 DEPENDABLE DIVIDENDS 6

8 Dividends Matter to Long-Term Investor Returns In a low-growth, low-yield environment, consistent dividend growth generates significant value for investors S&P 500 Index Returns: With and Without Dividends (Oct 18, 1994 (1) March 31, 2017) Total Return % Price Change % 679% 405% 40% of S&P 500 Index returns from 1994 through 1Q17 were attributed to dividends Oct-94 Apr-95 Oct-95 Apr-96 Oct-96 Apr-97 Oct-97 Apr-98 Oct-98 Apr-99 Oct-99 Apr-00 Oct-00 Apr-01 Oct-01 Apr-02 Oct-02 Apr-03 Oct-03 Apr-04 Oct-04 Apr-05 Oct-05 Apr-06 Oct-06 Apr-07 Oct-07 Apr-08 Oct-08 Apr-09 Oct-09 Apr-10 Oct-10 Apr-11 Oct-11 Apr-12 Oct-12 Apr-13 Oct-13 Apr-14 Oct-14 Apr-15 Oct-15 Apr-16 Oct-16 Apr-17 Realty Income Index Returns: With and Without Dividends (Oct 18, 1994 (1) March 31, 2017) 3181% Total Return % Price Change % 80% of Realty Income returns from 1994 NYSE listing through 1Q17 were attributed to dividends 644% Oct-94 Apr-95 Oct-95 Apr-96 Oct-96 Apr-97 Oct-97 Apr-98 Oct-98 Apr-99 Oct-99 Apr-00 Oct-00 Apr-01 Oct-01 Apr-02 Oct-02 Apr-03 Oct-03 Apr-04 Oct-04 Apr-05 Oct-05 Apr-06 Oct-06 Apr-07 Oct-07 Apr-08 Oct-08 Apr-09 Oct-09 Apr-10 Oct-10 Apr-11 Oct-11 Apr-12 Oct-12 Apr-13 Oct-13 Apr-14 Oct-14 Apr-15 Oct-15 Apr-16 Oct-16 Apr-17 (1) October 18, 1994 = Realty Income NYSE Listing Source: SNL 7

Consistent Dividends That Grow Over Time Steady dividend track record supported by inherently stable business model, disciplined execution 78 consecutive quarterly increases Strong Dividend Track

7% compound average annualized growth rate since NYSE listing 0 dividend cuts since 1994 NYSE listing $2.19 $2.20 $2.43 $2.29 $2.

9 Consistent Dividends That Grow Over Time Steady dividend track record supported by inherently stable business model, disciplined execution 78 consecutive quarterly increases Strong Dividend Track Record 91 total increases since 1994 NYSE listing ~83.5% Annualized AFFO payout (midpoint of 2017 guidance) 4.7% compound average annualized growth rate since NYSE listing 0 dividend cuts since 1994 NYSE listing $2.19 $2.20 $2.43 $2.29 $2.532 One of only five REITs included in S&P High Yield Dividend Aristocrats index $1.52 $1.40 $1.32 $1.08 $1.11 $1.14 $1.17 $1.20 $0.90 $0.93 $0.945 $0.96 $1.02 $1.64 $1.70 $1.72 $1.73 $1.75 $ YTD As of April 2017 dividend declaration Annualized dividend amount reflects the December declared dividend per share annualized, with the exception of 2017, which reflects the April 2017 declared dividend annualized 8

The Magic of Rising Dividends: Yield on Cost, Dividend Payback Long-term, yield-oriented investors have been rewarded with consistent income 31.7% 29.6% 22.5% 21.

7% 10.0% 11.7% 9.1% 9.4% 10.9% 9.8% 7.4% 7.2% 6.3% 6.8% 5.3% 4.9% 4.

10 The Magic of Rising Dividends: Yield on Cost, Dividend Payback Long-term, yield-oriented investors have been rewarded with consistent income 31.7% 29.6% 22.5% 21.2% 19.9% 20.4% Yield on Cost Reflects yield on cost as of 3/31/2017 assuming shareholder bought shares 24.6% at end of each corresponding year 20.4% 17.2% 14.5%12.7% 10.0% 11.7% 9.1% 9.4% 10.9% 9.8% 7.4% 7.2% 6.3% 6.8% 5.3% 4.9% 4.4% 420% 389% 288% 262% 239% 236% 275% Dividend Payback Reflects percentage of original investment made at each corresponding year-end period paid back through dividends (as of 3/31/2017) 219% 178% 143% 119% 89% 98% 71% 67% 72% 57% 38% 33% 24% 20% 11% 6% 1% 9

11 PORTFOLIO DIVERSIFICATION 10

Portfolio Diversification: Tenant Diverse tenant roster, investment grade concentration reduces overall portfolio risk Top 20 Tenants represent: 53% of annualized rental revenue 11 different

12 Portfolio Diversification: Tenant Diverse tenant roster, investment grade concentration reduces overall portfolio risk Top 20 Tenants represent: 53% of annualized rental revenue 11 different industries Nine Investment grade rated tenants 2.6% 2.6% 2.3% 2.3% 2.2% 1.9% 1.9% 1.9% 1.9% 1.8% 1.8% 1.8% 1.6% 1.2% 1.2% 4.1% 3.8% 3.7% 5.4% 6.8% Investment grade rated (1) (1) Investment grade tenants are defined as tenants with a credit rating of Baa3/BBB- or higher from one of the three major rating agencies (Moody s/s&p/fitch). 45% of our annualized rental revenue is generated from properties leased to investment grade tenants, including approximately 8% from properties leased to subsidiaries of investment grade companies. 11

13 Portfolio Diversification: Industry No industry represents more than 11.1% of rent Exposure to defensive industries: Top 10 industries represent strong diversification, significant exposure to non-discretionary, low price-point, service-oriented industries Industry Drug Stores Retail Characteristics Non-Discretionary 11.1% Convenience Stores Service-Oriented 9.9% Dollar Stores Health and Fitness Non-Discretionary, Low Price Point Non-Discretionary, Service-Oriented 7.5% 8.0% Transportation Services Quick-Service Restaurants Theaters N/A (Non-Retail Exposure) Low Price Point, Service-Oriented Low Price Point, Service-Oriented 5.0% 4.6% 5.4% Casual Dining Restaurants Grocery Stores Wholesale Clubs Service-Oriented Low Price Point Non-Discretionary 3.6% 3.3% 3.8% 12

Portfolio Diversification: Geography Balanced presence in 49 states and Puerto Rico 1.0 9.

1 1.9 4.5 2.1 2.8 % of Rental Revenue Texas 9.7% California 9.4% PUERTO RICO 5.

14 Portfolio Diversification: Geography Balanced presence in 49 states and Puerto Rico % of Rental Revenue Texas 9.7% California 9.4% PUERTO RICO 5.9 Florida 5.9% Illinois 5.5% Ohio 5.2% Represents percentage of rental revenue % Georgia 4.5% 13

Portfolio Diversification: Property Type Roots

mission-critical industrial properties RETAIL

Leasable Square Feet 11,614 221,918 77,345

15 Portfolio Diversification: Property Type Roots in retail with growing exposure to mission-critical industrial properties RETAIL INDUSTRIAL OFFICE AGRICULTURE Percentage of Rental Revenue 79.5% 12.9% 5.3% 2.3% Number of Properties 4, Average Leasable Square Feet 11, ,918 77,345 12,300 Percentage of Rental Revenue from Investment Grade Tenants 37.2% 79.6% 90.9% - 14

16 ASSET AND PORTFOLIO MANAGEMENT 15

17 Active Management: Leasing and Dispositions Proven track record of value creation, cash flow preservation and risk mitigation Portfolio Management Largest department in the company Distinct management verticals Retail Non-Retail Leasing & dispositions Healthy Leasing Results 99% recapture of expiring rents since 1996 Over 2,300 rollovers Includes renewals and re-leases to new tenants YTD 2017 lease rollover activity Re-leased 49 properties with expiring leases 46 re-leased to same tenant (94%) 3 re-leased to new tenant (6%) Recaptured 104% of expiring rent Asset Management Maximizing value of real estate Strategic and opportunistic dispositions Value-creating development Risk mitigation Favorable Returns, Lower Portfolio Risk $531 million of dispositions since : 6.9% cap rate / 11.6% unlevered IRR 2015: 7.6% cap rate / 12.1% unlevered IRR 2016: 7.3% cap rate / 8.5% unlevered IRR YTD 2017: 8.3% cap rate / 9.8% unlevered IRR 16

Consistency: Steady Portfolio, Solid Fundamentals Consistent occupancy, same-store rent growth reflect limited operational volatility Consistent Occupancy Levels, Never Below 96% 99.1% 99.2% 99.5% 98.

18 Consistency: Steady Portfolio, Solid Fundamentals Consistent occupancy, same-store rent growth reflect limited operational volatility Consistent Occupancy Levels, Never Below 96% 99.1% 99.2% 99.5% 98.4% 97.7% 98.2% 97.7% 98.1% 97.9% 98.5% 98.7% 97.9% 97.0% 96.8% 96.6% 96.7% 97.2% 98.2% 98.4% 98.4% 98.3% 98.3% Q17 Based on % of properties occupied Sustained High Occupancy Rates Careful underwriting at acquisition Solid retail store performance Strong underlying real estate quality Favorable tenant industries Prudent disposition activity Proactive management of rollover Steady Same-Store Rent Growth 1.8% 1.7% 1.5% 1.5% 1.1% 1.3% 1.4% 1.4% 1.4% 1.5% 1.1% 1.3% 1.3% 1.4% 1.6% 1.1% 0.9% Annual same-store rent growth run rate of 1.0% - 1.2% Long lease terms limit annual volatility 17

19 INVESTMENT STRATEGY 18

Investment Strategy: Underwriting Approach Real estate focused / Motivated to exceed long-term cost of capital Retail Strong unit-level cash flow coverage (specific to each industry) Tenants with

people) and/or mission critical locations Primarily industrial and distribution properties leased to Fortune 1000, investment grade rated tenants Long lease duration Property attributes Quality of

Replacement cost, market rents, initial cash yield, IRR over initial lease term Property due diligence Site visits, vehicle traffic, industry, property type, title, environmental, etc.

20 Investment Strategy: Underwriting Approach Real estate focused / Motivated to exceed long-term cost of capital Retail Strong unit-level cash flow coverage (specific to each industry) Tenants with service, nondiscretionary, and/or low price point component to their business Favorable sales and demographic trends Non-Retail (principally Industrial) Significant markets (generally MSAs of 350,000 people) and/or mission critical locations Primarily industrial and distribution properties leased to Fortune 1000, investment grade rated tenants Long lease duration Property attributes Quality of real estate, age, size, fungibility Market review Strategic locations critical to generating revenue Demographic analysis Five-mile population density, household income, unemployment trends Valuation Replacement cost, market rents, initial cash yield, IRR over initial lease term Property due diligence Site visits, vehicle traffic, industry, property type, title, environmental, etc. REAL ESTATE ANALYSIS CREDIT ANALYSIS Financial review and analysis Tenant research Reliable, sustainable cash flow Industry research Defensive, resilient to macroeconomic volatility Discussion with key management representatives 19

Investment Strategy: Results of Conservative Underwriting Industry exposure reflects defensive,

and/or low price point component Top non-retail tenants: Comprised primarily of investment grade

Point E-COMMERCE RESILIENT DEFENSIVE CONSUMER RESILIENT Health & Fitness Theaters Convenience

21 Investment Strategy: Results of Conservative Underwriting Industry exposure reflects defensive, cycle-resilient business models Over 90% of retail portfolio: Has service, non-discretionary and/or low price point component Top non-retail tenants: Comprised primarily of investment grade tenants such as FedEx, Boeing, GE, Diageo, Walgreens Service-Oriented Non-Discretionary Low Price Point E-COMMERCE RESILIENT DEFENSIVE CONSUMER RESILIENT Health & Fitness Theaters Convenience Stores Drug Stores Grocery Stores Automotive Services Dollar Stores Wholesale Clubs Quick Service Restaurants 20

22 Investment Strategy: Disciplined Execution Consistent, selective underwriting philosophy on strong sourced volume Key Metrics Since 2010 (Excluding $3.2 billion ARCT transaction): $9.3 billion in property-level acquisition volume $3.6 billion in non-investment grade retail acquisitions Broad blend of one-off, portfolio and entity-level deals (Ex- ARCT) 80% of volume associated with retail properties 60% of volume leased to Investment grade tenants Relationship-driven >80% of closed volume since YTD Investment Volume $714 mil $1.02 bil $1.16 bil $1.51 bil $1.40 bil $1.26 bil $1.86 bil $371 mil # of Properties Initial Avg. Cap Rate 7.9% 7.8% 7.2% 7.1% 7.1% 6.6% 6.3% 6.1% Initial Avg. Lease Term (yrs) % Investment Grade 46% 40% 64% 65% 66% 46% 64% 68% % Retail 57% 60% 78% 84% 86% 87% 86% 99% Sourced Volume $6 bil $13 bil $17 bil $39 bil $24 bil $32 bil $28 bil $11 bil Selectivity 12% 8% 7% 4% 6% 4% 7% 3% Relationship Driven 76% 96% 78% 66% 86% 94% 81% 85% 21

23 CAPITAL STRUCTURE AND SCALABILITY 22

24 Conservative Capital Structure Modest leverage, low cost of capital, ample liquidity provides financial flexibility Common Stock: $16.28 billion 73.5% Shares/Units outstanding million Debt: $5.86 billion 26.5% Debt 26.5% Unsecured Notes/Bonds - $4.7 billion Unsecured Term Loans - $320 million Unsecured Ratings - BBB+/Baa1/BBB+ Mortgages - $458 million Revolving Credit Facility - $0 Class F Preferred Shares - $409 million 1 (Subject to Mandatory Redemption) Common Stock 73.5% Total Capitalization: $22.14 billion 1 Redeemed with borrowings on our revolving credit facility in April

Well-Laddered Debt Maturity Schedule Limited re-financing and variable interest rate risk throughout debt maturity schedule $1,400 Laddered Maturity Schedule with Primarily Unsecured Investment Grade

9% 4.1% of 4.15% (1) on debt Staggered, 8.1-year weighted average term for notes/bonds Ample liquidity with >$1.6B available on revolver (L+90bps) $200 Free cash flow of ~$120mm/yr $0 5.

25 Well-Laddered Debt Maturity Schedule Limited re-financing and variable interest rate risk throughout debt maturity schedule $1,400 Laddered Maturity Schedule with Primarily Unsecured Investment Grade Rated Debt Key Metrics (2) Weighted average interest rate (1) 93% fixed rate debt $1, % Weighted average rate Debt Maturities ($mm) $1,000 $800 $600 $ % 2.2% 4.7% 3.2% 5.7% 3.6% 4.6% 3.9% 4.1% of 4.15% (1) on debt Staggered, 8.1-year weighted average term for notes/bonds Ample liquidity with >$1.6B available on revolver (L+90bps) $200 Free cash flow of ~$120mm/yr $0 5.8% Unsecured Notes Mortgages Revolver Term Loan (1) Weighted average interest rates reflect variable-tofixed interest rate swaps on term loans (2) As of April 7, 2017 (pro forma for Series F Preferred Stock redemption in April 2017 with borrowings on revolving line of credit) 24

26 Efficient Business Model with Economies of Scale Lease structure and scalability of business model contributes to high margins Lowest G&A expenses (as % of rental revenue) in the net lease industry G&A efficiency and EBITDA margins have improved as company has grown larger Current EBITDA margin of 93%; never lower than 90% since 1998 G&A as % of Rental Revenue 1 5.8% 4.7% Adjusted EBITDA per Employee ($000s) $7,124 $2,211 1 G&A includes acquisition transaction costs; percentage of rental revenue calculation excludes tenant reimbursements from denominator YTD figures represent MRQ annualized, where applicable 25

3% growth) $3.00 - $3.06 (4.2% - 6.3% growth) Key Assumptions Acquisitions Dispositions $1.

27 2017 Guidance Consistent earnings growth while maintaining conservative leverage metrics Earnings FFO/sh AFFO/sh (proxy for cash earnings) $ $3.06 (4.2% - 6.3% growth) $ $3.06 (4.2% - 6.3% growth) Key Assumptions Acquisitions Dispositions $1.0 billion $75 million - $100 million Occupancy 98% Same-store revenue growth 1.0% - 1.2% Target capital structure 65% common equity 35% debt & preferred equity 26

investment strategy Maintain high occupancy through active portfolio management Maintain a

28 Business Plan Pay 12 monthly dividends Raise the dividend Remain disciplined in our acquisitions underwriting approach Acquire additional properties according to our selective investment strategy Maintain high occupancy through active portfolio management Maintain a conservative balance sheet Continue to grow investor interest in The Monthly Dividend Company NYSE: O 27

1Q 2017 RETAIL INVESTOR PRESENTATION

1Q 2017 RETAIL INVESTOR PRESENTATION Contents Company Overview & Historical Risk/Reward 2 Dependable Dividends 6 Portfolio Diversification 10 Asset and Portfolio Management 16 Investment Strategy 19 Capital