WPC - Triple Net Lease Face-Off: National Retail Properties Vs. Realty Income

• Realty Income and National Retail Properties are two similar triple net lease REITs, but National Retail Properties earns the buy rating.
• Historically, Realty Income often trades at the same multiple of AFFO or a slightly higher multiple of AFFO compared to National Retail Properties.
• Current estimates suggest an unlikely divergence in AFFO per share for the two companies. This may reflect some non-recurring impacts during the year.
• If investors accept those values for AFFO per share, then NNN should see a much better growth rate over the next few years because it would set such a low bar for the REIT.
• Be wary of the exceptionally high volatility in estimates today. EPR provides a clear example of the extreme volatility in consensus estimates.

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