Realty Income Partners With KKR to Expand Capital Platform
Realty Income launched a data center venture and partnered with KKR to grow its asset base following Federal Reserve interest rate hikes.
The Federal Reserve System recently raised interest rates, driving 10-year Treasury yields above 5%. This high-yield environment has prompted Realty Income, an S&P 500 real estate investment trust, to adjust its strategy to remain a growth-oriented alternative for passive income investors.
To access capital and expand its asset base amid higher borrowing costs, Realty Income entered into a joint venture with investment firm KKR to grow its private capital platform. The company, which manages a diversified portfolio of more than 15,500 properties and has increased common stock dividends 136 times since 1994, is also diversifying into the technology sector.
As part of this expansion, Realty Income launched a data center joint venture. The new venture begins with over $6 billion in initial seed assets, a move designed to give the real estate trust direct exposure to the artificial intelligence sector.
