Realty Income Corporation (O) Earnings Call Transcript & Summary

We appreciate you being here for Realty Income's conference call covering results from the first quarter of 2026. On today's call, we have with us Sumit Roy, who serves as President and Chief Executive Officer; Jonathan Pong, our Chief Financial Officer and Treasurer; Neil Abraham, Chief Strategy Officer and President of Realty Income International; and Mark Hagan, our Chief Investment Officer. At points during this call, we may offer statements that federal securities law could classify as forward-looking. It's possible the company's actual results in the future will end up substantially different from whatever gets addressed in those forward-looking statements. The factors that might lead to such differences will be laid out more thoroughly in the Form 10-Q the company submitted today to the SEC. To make sure everyone gets a chance to take part, we're going to stick to a limit of one question plus one follow-up while we handle Q&A. So with all of that said, I'd like to hand things over now to Sumit Roy, our CEO.

Thanks, Alex, and hello everyone. We came into 2026 carrying solid momentum, and the results for our first quarter show movement on the fronts that count most for Realty Income: putting capital to work with discipline, keeping portfolio performance steady, and growing our private capital platform further. During Q1, AFFO per share came in at $1.13, which is 6.6% higher than the same period a year earlier, and we put roughly $2.8 billion to work, or $2.6 billion pro rata, at an initial weighted average cash yield of 7.1%. Our investing stayed evenly split between North America and Europe, and on top of that we allocated about $1 billion toward credit and structured investments. That robust beginning to 2026 backs our choice to lift the midpoint of our full year AFFO per share guidance by $0.025, which works out to about 60 basis points at the midpoint. Jonathan will take you through the quarter and our revised guidance in greater depth. Going forward, what we expect for 2026 shows an acceleration relative to 2025, as we draw on our scale and our data-driven, sturdy platform in pursuit of consistent double-digit total operational returns for shareholders. Let me pause briefly and set our recent announcements within the wider strategic picture at Realty Income. Across the last few months, we have moved purposefully to construct a private capital ecosystem aimed at diversifying where our permanent equity comes from, widening the set of investments available to us, and supporting value creation over the long term, while staying rooted in the very same underwriting discipline, credit standards, and emphasis on durable, growing cash flow that have characterized Realty Income from the very beginning. Three key achievements illustrate this. To start, we finished our $1.7 billion cornerstone capital raise for the Perpetual Life U.S. Core+ fund. Next, we established a strategic partnership with GIC centered mainly on construction financing and takeout commitments for build-to-suit industrial properties in the U.S. and Mexico. Finally, we brought in $1 billion of equity from Apollo through a programmatic venture that aims to eventually bring Realty Income's dependable income to the enormous insurance and annuity market. Considered together, these efforts amount to what we see as a significant evolution of the Realty Income platform, built on years of deliberate planning to bolster how we fund growth and put capital to work through cycles. Some years back, we spotted a possible concentration risk in depending largely on public equity markets, where pricing can sometimes drift away from underlying operating performance, with that gap lasting for extended stretches. That insight brought us to a basic question: in what ways do we diversify capital sources so we can better leverage a platform built to deploy billions of dollars each year, while aiming to generate long-term value for public shareholders? These partnerships mark the early phase of our private capital journey, and we anticipate continuing to add accretive sources of permanent capital as time goes on. At present, we see private capital not as one single strategy, but rather as an ecosystem made up of separate, non-overlapping verticals suited to varying geographies, property types, and investment mandates. This strategy has widened the pool of investors we attract, improved the quality of our returns by way of asset-light fee income, and substantially enlarged the set of opportunities available to us. What matters most is that it lets us put money to work in different kinds of property and at various levels of the real estate capital stack, all while keeping intact the essential character of Realty Income. Every one of these vehicles is built to work hand in hand with our public REIT model and to add to long-term value on a per share basis. Against that background, the way our global platform has developed fueled deal activity throughout the third quarter. With investment volume of about $2.8 billion, we posted one of the stronger quarters for deployment we've seen in recent years, helped by steady execution spanning geographies, property types and investment structures. We reviewed investment opportunities totaling roughly $31 billion in the first quarter, which speaks to how deep our global relationships run and how large our platform has become. Because of that sourcing, we could stay very picky, completing deals on about 9% of everything we looked at, all while holding the line on yield structure and credit. Some 94% of those opportunities came through relationships, which underscores how durable our origination engine is. Our European platform remains a major competitive edge. Those markets are still more fragmented and see less crowding than the U.S., which lets us find tailored, portfolio-oriented deals with appealing duration and credit, and shift capital toward especially compelling opportunities. Here in the U.S., transaction markets stay busy and competitive, especially for smaller one-off assets. We still find meaningful value creation in bigger, more structured investments, where our relationships give us scale and our underwriting capabilities give us an edge; we placed $1 billion into credit investments around the world, among them 2 mezzanine transactions. The first consisted of a $375 million loan alongside a sovereign capital investment firm, backed by a portfolio of high-quality logistics assets leased to a strong investment-grade e-commerce client, with a right of first offer on the underlying real estate. The second was a $190 million loan supporting development of a data center campus in Virginia, pre-leased to an investment-grade hyperscale tenant. Being able to invest across owned real estate, loans, preferred equity and structured investments gives us the flexibility to stay disciplined and selective, especially when macro conditions are volatile. Our global platform, long-duration leases and conservative balance sheet leave us positioned to remain active while keeping underwriting rigor. The advantages of our platform kept producing strong operating results, and we closed the quarter with robust occupancy and reported recapture. By managing assets and properties proactively, our teams stayed focused on generating AFFO per share growth from the core portfolio. We paired deep familiarity with our assets and clients, proprietary predictive analytics and disciplined credit underwriting to get the best risk-adjusted economics on re-leasing and renewal outcomes. That work produced outsized lease termination income of $40.2 million during the first quarter. And given what we can currently see, we've raised our full year termination income outlook range to $45 million to $50 million. All in all, we believe Realty Income today stands out more and is set up better for long-term growth than at any other moment in our history. Having said that, I'll now hand things over to Jonathan.

Thanks, Sumit, and hello everybody on the line this afternoon. The first quarter was a busy one for us, featuring multiple new capital partnerships that widen our financial flexibility and strengthen our reach into long-term oriented private capital. Alongside the public market access we've already built, these efforts expand our investment buy box and underpin continued global growth; on a pro rata basis, we closed out the quarter with roughly $3.9 billion of liquidity. After the quarter ended, we brought in another $174 million of forward equity, which lifts our present ATM unsettled balance to about $1.4 billion. Our net debt to annualized pro forma adjusted EBITDA stood at 5.2x, which falls inside our targeted leverage range; and if you include our outstanding forward equity, leverage would come in at 4.9x. After quarter end, we issued $800 million of 4.75% senior unsecured notes due 2033, and we swapped $500 million of that into euros for a blended yield of 4.44%. Beyond diversifying where our equity comes from, we're also working to widen our reach into distinctive sources of debt capital. During the first quarter, we put in place a new kind of debt financing via a 10-year unsecured term loan with an affiliate of Goldman Sachs. This capital raise gave Realty Income the chance to partner with the local community through San Diego Community Power, supporting that organization's long-term energy procurement objectives for San Diego residents. To make this arrangement work, San Diego Community Power used a well-established municipal prepay structure that lets a public agency issue municipal bonds and apply proceeds to prepay for future electricity deliveries while effectively lending a portion of the proceeds — in this instance, $694 million — to Realty Income; in exchange, we agreed to pay a fixed annual interest rate of 4.91% through the Goldman Sachs term loan. We then swapped $500 million of the notes to euros through a cross-currency swap, producing a 4.34% all-in blended cost of debt. What Realty Income gains strategically is a deep pool of new debt capital at attractive pricing that can complement our access to the public unsecured debt market. Our European operations keep delivering incremental low-cost financing flexibility. Euro-denominated debt is priced approximately 100 basis points inside comparable tenor U.S. dollar debt and works as both a natural currency hedge and a tool to offset higher cost U.S. refinancings while staying leverage neutral. With such a strong start to the year, we are raising full year investment volume guidance to $9.5 billion at 100% ownership and lifting the AFFO per share guidance range to between $4.41 and $4.44. As Sumit noted, we are also raising the expected lease termination income guidance range to between $45 million and $50 million as we become increasingly proactive with our asset management platform; and finally, we are lowering our credit loss outlook to approximately 40 basis points of rental revenue, which reflects improved visibility and performance across the portfolio. As Sumit highlighted, we now have 3 distinct and intentionally structured private capital vehicles through our partnerships with Apollo, GIC and the Perpetual Life U.S. And then there's the Core+ Fund. Every one of these vehicles has its own distinct investment mandate, and each is built to give Realty Income three fresh, separately sourced pools of equity oriented toward the long term. With Apollo, the strategic partnership we announced most recently, the aim is a repeatable supply of property-level equity at a low cost, and we keep operational control at the same time. To our way of thinking, that structure pairs compellingly with traditional public equity, and we anticipate that pricing and availability under it will fluctuate relatively less. A net lease portfolio that is diversified and at scale fits naturally alongside Apollo's perpetual capital AUM, and that perpetual capital makes up a significant majority of their total AUM. In our first transaction together with Apollo, the result was a $1 billion equity investment in a retail portfolio that is highly granular, well diversified and long duration, made up of roughly 500 single-tenant properties contributed off our balance sheet. Within the joint venture there is a call option exercisable between years 7 and 15, which caps this equity's cost at 6.875% for the duration of Apollo's ownership period. Because contractual rent growth compounds as time passes, that structure delivers meaningful long-term optionality, widening the spread against our long-term cost of equity and allowing incremental investment volume at lower return hurdles; partnering with one of the world's leading asset managers pleases us, and our intention is to scale this relationship past this initial product. The partnership is well aligned, with Apollo supplying long-term equity capital and Realty Income bringing sourcing, underwriting and asset management capabilities via our global net lease platform. Following the January announcement of our build-to-suit development JV with GIC, the Apollo partnership stands as our second programmatic private capital joint venture. Last, in the first quarter we finished the cornerstone fundraising round for our U.S. Core+ open-ended fund, bringing in $1.7 billion of institutional capital, mostly from state, city and employee pension plans. This vehicle is designed so that we can invest alongside high-quality institutional partners and assets that carry lower initial yields yet strong long-term growth characteristics, while producing high-margin, capital-light fee income. Equally important, the intent is to broaden our buy box and boost day 1 accretion by matching capital to opportunity more efficiently. With that, I'll hand it back to Sumit.

Thanks, Jonathan. The private capital efforts we've launched are a logical outgrowth of how Realty Income has operated for years. Through them, we anticipate a stronger capacity to put money to work across market cycles, better efficiency in our cost of capital, and a more compelling long-term value story for shareholders. What's been achieved so far gives us reason for optimism, and we're eager to keep that momentum going. Operator, let's open it up for Q&A.

Dan here, on behalf of Jana. Could you give us additional color regarding that $40 million of lease termination income we booked in the quarter? Specifically, did a handful of tenants account for it, or was it spread widely, and did those spaces get re-leased or sold off?

Sure — clearly, this fell within the guidance we'd already put out to the Street. As you may remember, we'd issued a range of $40 million to $45 million. Our expectation was that it would land early. Given the momentum we're seeing, we've raised that range to $45 million to $50 million. So no single tenant dominated it; it came from all over. And once more, the thinking behind it hasn't changed. Our entire focus is on building and maximizing the total return profile of our investments. If we believe we can recover the rest of the rent and get those properties leased to different tenants who fit those sites better, that's a key reason we do this. The other reason: instead of sitting around until an asset goes vacant 3 to 4 years down the road, we can redeploy that capital right now and build a value proposition for our clients who aren't long-term occupiers of that asset — again, a win-win; so it's really about us leaning into our analytics and being far more proactive in capturing these kinds of opportunities across our portfolio that's driving this. And even though it was pretty much all front loaded, the true bump in lease termination is just $5 million.

As a quick follow-up, would you mind explaining why there's a $40 million addition back to AFFO tied to credit loss?

That adjustment to AFFO for credit loss is essentially a noncash mechanism. We hold loans in which we put money. These represent noncash reserves for loan losses, entirely consistent with the approach we've taken to comparable circumstances previously.

By coincidence, those two figures match, though one represents a noncash CECL-related add-back while the other reflects an actual cash payment made to us, which of course factors into AFFO.

At this point you clearly possess those different private capital vehicles. You want them to expand, no doubt. So I'd like to know, in the years ahead, how do you expect the mix between private capital investing and traditional investing to break down?

Brad, what we're discussing carries forward a topic we've been bringing up over roughly the past 18 months, during which we once reported nearly every quarter certain deals we chose not to pursue, purely because they failed to satisfy what our public shareholders require — namely day 1 accretion, or spread investing, while also clearing a long-term hurdle rate; and one reason we're pursuing this course is so we can keep capitalizing on transactions we believe genuinely fit the long-term return profile; these are quite strong investments, and a segment of private capital is extremely eager to capitalize on that; so that's essentially what gave rise to our beginning to examine these opportunities; and when you consider the 3 buckets of capital we hold and attempt to dig in and assess where strategies might potentially overlap, there is almost none, truthfully. The first involves a potentially lower initial yield, yet paired with higher growth, which suits our open-ended fund. Insurance capital tends to be far more steady-eddie, featuring low-growth investments that don't necessarily clear the long-term hurdles, yet deliver very solid, predictable cash flow streams, which functions extremely well for insurance capital; and the third is a build-to-suit arrangement with GIC where we enter intending to supply debt capital and afterward hold a path toward ownership later on should we decide to exercise it; so I'd say these are 3 separate strategies, and when you consider them in the traditional meaning of the term and how we could or could not record earnings across these 3 distinct buckets and in certain instances, not even complete these transactions, it now permits us to carry out those 3 strategies, and it rests mostly on third-party capital. And the manner in which it becomes a positive for our public shareholders comes via a predictable permanent fee income stream, letting us record development investments we undertake plus interest income throughout development, something we could not do previously, and satisfying a need from insurance capital that doesn't truly function long term on our balance sheet, yet lets us generate a fee income stream by leveraging our platform; so that's how the strategy we've now begun to implement and will keep expanding is going to advantage our shareholders — basically monetizing the platform we've built.

All right. And it seemed as though a loan for data center development got done by you during that quarter. Clearly, you completed that transaction with Digital a few years ago, and there hasn't been much steady deployment into data centers. What I'd like to know is how the competitive landscape appears for O in that segment right now. Also, does it resemble data center lending more? Or could a transaction similar to the one you closed with Digital possibly return to being appealing when it comes to pricing?

Yeah. So the thinking behind this is, once more, whenever we put money to work in credit, we want to end up owning the property, or at minimum have a route toward ownership. And regarding our data center allocation, what we've communicated is that we're extremely picky about which operator we bring in. I'm delighted to report that our partner is among the finest private operators in the market. We're equally selective when it comes to where these properties are situated. Again, that means Virginia, which I've previously called the heart of the data center industry, in order to tackle the remaining risk tied to these properties. Beyond that, the property in question, meaning the lease, has to align with our investment approach: a single-tenant property, a long-term lease yielding growth well beyond what we've achieved in the retail portion of our operations, and it satisfies every one of those criteria. So my expectation is that this marks our second investment alongside this specific developer, and the goal is to establish a route toward genuine ownership of these properties. Meanwhile, we're putting our balance sheet to work as a lender. We're earning quite attractive yields from these investments, which should eventually let us take ownership of the real estate.

Michael, you brought up those private credit vehicles in your opening comments. You also noted that we're still fairly early in this process. So I'm wondering — do you see it as, look, we've completed 3 of these, and there are another 3 coming over the next 24 months? Or is the right way to view this a longer-term effort? I'm simply trying to gauge how much additional activity you anticipate along this path going forward.

Thanks, Michael — fair question. Let me pull back for a moment and tell you that whenever we look into bringing in third-party capital, the one aim was always to increase earnings per share for the public shareholders we serve. If that outcome doesn't materialize, we have no business bringing in third-party capital. So we can leave it at that. Run any choice we make through the lens of how it drives growth, and if the connection isn't obvious, then that source of capital won't be something we chase. That principle governs everything we do. The reason I've stated that what lies ahead for us is still not settled is this: we've essentially taken care of what's needed here in the U.S., and our build-to-suit arrangement with GIC covers Mexico too. That said, we do operate in additional geographies, and other capital providers are reaching out to us. Should we be able to design a separate approach that won't get in the way of our capacity to keep purchasing on balance sheet and genuinely adds to what we're accomplishing on balance sheet, then those kinds of choices and those kinds of avenues are ones we'll keep examining, keep weighing, and possibly fold into the ecosystem we've built. The same way we've diversified asset categories and diversified geographically on our investment side, we're attempting to do that with capital as well. Jonathan has performed wonderfully at diversifying on the fixed income side. We're still doing that now through this muni prepay structure he described. Yet we had one single point of failure regarding our equity capital, and that's the thing we're working to diversify right now. With luck, this is how we reach the double-digit total return profile that we're all solely focused on.

Understood. And one more thing to add on — it looks like these credit investments are becoming a bigger part of what you're doing. So what's the right way for us to think about how long some of these investments last? And the WALT looks shorter than what we might have seen previously. So could you just spend a moment on what that means for the portfolio as we move forward?

Absolutely. And once more, that's a terrific question, Michael. Part of what we invested in was tied to this build-to-suit located in Mexico. It's a textbook illustration of the way we are in effect providing financing through the construction period, intending to take ownership of the asset after it reaches full stabilization. That falls under our credit investment. The other, larger credit investment related to this data center project. Once again, what we intend is to provide capital to a partner we've concluded is the correct one for our data center strategy moving ahead. What we hope for, and what we think will occur, is that at the back end we end up as the owners of these data center assets. And in effect, what this lets us accomplish is capturing a significantly better yield at the front end of the — on the development side, which can subsequently offset what might be only a nominal yield at the point when we're actually acquiring the assets onto balance sheet. And so once more, this is a strategy. Yes, we begin with the credit side of the business, but it leads toward what we consider the real estate, and that was the intent behind why we set up this credit investment strategy in the first place. So a comparable story sits behind each credit investment we make. And we're very conscious that these usually carry shorter duration, which, incidentally, is intentional. Shorter duration is what we want. so that later we can make the call on whether, when it reaches its end, we take ownership of the real estate or we don't — or at minimum build relationships with clients or with developers who can then supply us with far more product further down the line, but we're beginning that relationship building on the development side. So that's genuinely the thesis behind why we're doing credit investments.

I wanted to ask a follow-up about the credit investments, or that loan portfolio, since we clearly see this with some other companies we track, and honestly it looks like a solid method to develop relationships and eventually wind up owning real estate. Is there, I suppose, some kind of cap, a maximum, on how much you'd be prepared to accumulate in this book? Right now it appears to be slightly above $1 billion. Or where might that figure stand in the coming 2, 3 years, as certain of those initial loans begin to mature and you presumably swap in new ones?

That's a fair question, Smedes. Clearly, this won't all at once come to dominate our activities. We hold our capital in very high regard; allocating it properly matters a great deal to us. And look, we decline far more credit investments than the ones we actually pursue. So even with the abundance of chances on the credit side, we remain extremely choosy. As for how large it might grow? That will depend on the total scale of our platform. Currently we're at $90 billion, give or take; our loan book is modest. Yet once more, that's intentional — these loans have short duration, and the expectation is that the very same capital then gets directed toward acquiring the real estate permanently. Therefore, if we're unable to establish that obvious pathway, we won't push hard into it, unlike a credit — an actual credit firm whose entire business is putting money into loans; regarding percentages, I genuinely don't have a figure, Smedes. This will be opportunity-led. It will be shaped by the approach I've described.

And next, I’d like to ask you as well, perhaps only slightly, just a broader view. I mean, clearly you raised the investment volume outlook for this year by a fair amount; that’s also something we’re seeing in a lot of the reports this quarter. Could you speak in a general way about what you’re observing? I mean, I presume one part of this is that you can tap these other capital pools, which is creating opportunity; but just a broader view of the market regarding how competition is developing or simply the U.S. compared with Europe, a broader view.

Yes. Look, we are — clearly, we have a lot of confidence in what our pipeline looks like. It’s mostly driven by the pipeline and by our capacity to forecast what that will mean for the full year. That’s what has allowed us to lift our figure from $8 billion to $9.5 billion. And what I’d say is we completed about — it was split evenly between the U.S; and Europe. And this is something we began discussing last quarter, when we had started to notice somewhat more momentum in the U.S. than we had observed during the prior 3 quarters in 2025, when Europe was dominating what we were getting across the finish line. And so I believe that trend, we continue to see plenty of opportunities in Europe, and that will keep driving a great deal of the volume. But we are beginning to see a comparable effect in the U.S., which is a positive thing, which is why it gives us the confidence to boost the investment to $9.5 billion. And the other element is what you mentioned, Smedes. I mean the reality remains that having these various sources of capital will let us complete transactions that we wouldn’t have completed previously; and again, why are we doing all of this? It is to help increase our earnings per share; and so that’s what we are seeing. From a competition standpoint, public markets in the U.S., I think that hasn’t shifted much. There is definitely far more competition on the private side in the U.S. I think our product is now well understood, and it’s very appealing to private sources of capital to pursue. So we do see that competition, but an elevated interest rate environment will keep being a benefit for us because debt capital remains elevated. And so for these private sources of capital to reach their return hurdles, it’s going to be somewhat more of a challenge. Europe continues to be a very interesting area for us. I mean, I’ve said this before, and I’ll say it once more. In my view, Neil and the team have excelled at turning us into the first name people think of for net lease, particularly in the U.K.; and before long that same reputation is carrying over into mainland Europe, where a large number of our deals are off-market — negotiated privately and then closed. And because we've come through for so many clients in that region, repeat business keeps fueling a substantial share of the volume we manage to complete. As I recall, roughly 94% of this quarter's activity came from relationship-based business. So that, I'd say, is how the competitive picture stands.

I've got something about the U.K. At the moment, are you fairly active there when it comes to investing, or in what you have lined up? What I'd like to know is how volatility in the bond market is affecting the gap between bids and asks, and whether there might be some chances to take advantage of the pipeline there?

Let me kick things off, and Neil, if I leave anything out, feel free to chime in. It's definitely the case that the U.K. bond market is pretty elevated. At the same time, though, cap rates are coming in higher for us as a result of the cost of capital situation over there. Even more significantly, we're going after deals, and we're offering solutions, since our retail footprint keeps drawing a lot of interest from prospective clients, and that opens the door for us to put money to work alongside them, whether that's through a sale-leaseback or by repositioning assets, and the fact that we keep bringing in those clients is something that really helps. Beyond all that, Neil, if you have anything further to mention regarding the market and what you're observing, that would be terrific.

Appreciate that, Sumit. What I'd say is that within the U.K., we're still looking at a really strong pipeline. Because of the higher rate environment, yields are either expanding now or are set to expand before long. On top of that, the pattern we've seen historically — where funds are forced to divest simply due to redemptions or because they've reached end of life — is still playing out, which makes right now a great moment for us to consolidate that market.

With the asset management team stepping up its efforts around collecting lease termination fees, does it make sense to assume that yearly revenue from those fees could settle into a range of 85 to 95 basis points of ABR, which is roughly what the '26 guidance implies?

I wouldn't treat what we're doing now, what happened during 2025, or what we intend to do in 2026 as some kind of new standard for lease terminations. Jim, what I think we're really attempting to accomplish is making sure that whenever opportunities emerge with particular clients, with particular assets, we address them immediately. And the intent here is sort of — look, over the past 4 years we completed 2 very large-scale M&A deals. And clearly we picked up plenty of assets that didn't fit well with the long-term hold strategy we generally apply to anything we pursue organically. So this gives us a tool to reposition those assets alongside the right clients, or to speed up rent collection and sell those assets, allowing us to reach a portfolio profile that will fall within that long-term hold strategy; therefore I don't expect $45 million to $50 million, which is what we currently forecast, to keep going forever under our strategy moving forward. This is far more episodic and far more tied to what we're seeing in our portfolio right now. And I explained the reasoning behind that; it stems mostly from those M&A transactions.

That reasoning around M&A and the cleanup really holds together. Now I understand.

Mike here, joining Haendel from Mizuho. I'd like to ask about the schedule for getting the entire $1.7 billion U.S. Core+ Fund raise invested. And what amount of management fee income might come from that each year?

Appreciate it, Mike. Well, we're extremely close. During our opening remarks, I believe we noted the $1.7 billion has been raised, matching what we told the market to expect. Getting everything invested is nearly done. It's our expectation that by our next earnings call of this kind, that entire equity capital will be put to work. Beyond that, since the structure today is mostly unlevered, we'll still hold dry powder allowing further investment past the $1.7 billion, reaching a ZIP code of $3.5 billion to $4 billion in assets under management. I believe we also share — Jonathan, would you like to address the management fee point?

Yeah. When it comes to annualized management fees, once everything's fully drawn down, we're looking at slightly more than $10 million per year. And every bit of that is base management fees — there's nothing in there for promote accruals or anything like that.

Sumit, I believe you spent quite a bit of time discussing the debt and the reasoning behind it, along with all the deal activity. But looking at this year — that $9.5 billion — do you have any sense of how much of it will probably end up being debt? And then regarding the remainder, how should we think about your share, just to pull it all together?