Realty Income To Buy $269M Of Vineyard Property From Diageo

24th Jun 2010 14:11

DOW JONES NEWSWIRES Realty Income Corp. (O) said it will acquire about $269 million of Napa Valley winery and vineyard properties from a subsidiary of Diageo PLC (DEO) and lease them back to the alcohol giant. Realty Income, a real-estate investment trust known for paying monthly dividends, also lowered its full-year guidance for funds from operations--a key statistic for REITs--and gave 2011 guidance in line with analysts' expectations. According to the terms of the deal, Diageo Chateau & Estate Wines--a wine producer and distributor--will continue to manage and operate the properties and will keep ownership and marketing of their wine brands. With the deal, Diageo will become Realty Income's second-biggest tenant. Realty Income is acquiring about 2,000 acres of vineyard properties as well as winery, production, retail and visitor center buildings of two wineries. The company said the majority of the property acquisitions are set to close during the second quarter. In light of acquisitions and current operations, Realty Income now expects 2010 funds from operations of $1.84 to $1.86 a share, down from its April forecast of $1.86 to $1.92. American depositary shares of Diageo fell 6 cents in pre-market trading to $65.04. Shares of Realty Income closed Wednesday at $31.01 and were inactive pre-market. Its stock has risen 38% the past year. -By Nathan Becker, Dow Jones Newswires; 212-416-2855; [email protected]; (END) Dow Jones Newswires June 24, 2010 09:11 ET (13:11 GMT)