Realty Income vs. Agree Realty: A Net Lease REIT Showdown

Realty Income (O -0.56%) and Agree Realty (ADC 0.20%) are locked in a competitive battle within the net lease REIT sector. While Realty Income remains 25% below its pre-pandemic highs, Agree Realty has clawed back losses and now sits just 10% off its peak. The divergence reflects fundamental differences that make each suitable for distinct investor profiles.

Net lease structures—where tenants shoulder most property costs—form the Core of both businesses. These sale-leaseback deals allow companies to monetize real estate while maintaining operational control. For REITs, the model offers stable tenants, low-maintenance assets, and built-in rent escalators. Profitability hinges on capitalizing the spread between acquisition yields and funding costs.

Both REITs concentrate on retail properties, but their recovery trajectories highlight varying risk appetites. Agree's quicker rebound suggests market confidence in its portfolio composition, while Realty Income's deeper discount may present a value opportunity for patient capital.