ESCONDIDO, CA-Locally based NNN specialist Realty Income Corp. has agreed to acquire 2,000 acres of Diageo Chateau & Estate wineries in the Napa Valley for $269 million in a sale-leaseback. The properties are all under 20-year NNN leases with Diageo Chateau & Estate Wines that are guaranteed by Diageo Plc, one of the world's largest purveyors of spirits, wine and beer, listed on the New York and London stock exchanges.
The properties, located throughout the Napa Valley in Napa County, include vineyards that have been in production for between 25 and 100 years, as well as the winery, production, retail and visitor center buildings of both the Sterling Vineyards winery and the Beaulieu Vineyards winery, with combined leasable space of approximately 400,000 square feet.
Realty Income expects to close the acquisition in the second quarter, after which Diageo will become Realty Income’s second largest tenant, producing approximately 5.7% of the company’s revenue.
Realty Income CEO Tom Lewis, commenting about the transaction in a prepared statement, said that the company believes that the operating expertise and investment grade credit strength of Diageo "will make this an excellent investment for our shareholders for many years to come." It will diversify the company's portfolio and "will provide us with increased lease revenue from which to pay monthly dividends.”
Dividends are a top priority at Realty Income, which has declared 480 consecutive monthly dividend payments throughout its 41-year operating history and increased the dividend 58 times since its listing on the New York Stock Exchange in 1994. The monthly income is supported by the cash flow from more than 2,300 properties located in 48 states owned under long-term lease agreements with leading regional and national chains and other corporate entities.
Continue Reading for Free
Register and gain access to:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
