Is Realty Income Still a Prime REIT Pick Amid Economic Headwinds?

Realty Income (O) faces renewed scrutiny as macroeconomic conditions challenge its historical appeal. The REIT's 15,600-property portfolio spanning 100 industries and seven countries now contends with elevated interest rates and retail sector volatility. Its signature 5.6% monthly dividend yield - a hallmark of its tax-advantaged structure - remains compelling but requires deeper analysis.

Market observers note the widening gap between commercial real estate financing costs and cap rates. While Realty Income's triple-net leases provide insulation, the sustainability of its acquisition pipeline in a 6% interest rate environment warrants examination. The company's European expansion offers geographic diversification, though currency risks linger.

Investors weighing passive income opportunities must now balance Realty Income's operational scale against potential compression in funds from operations. The REIT's investment thesis increasingly hinges on its ability to maintain occupancy above 98% while navigating tenant credit quality concerns.