NPC International Agrees to $59 Million Sale Leaseback of 89 Pizza Hut Restaurants

MarketWatch / Business Wire - August 25, 2006

Realty Income Corporation today announced that it has entered into an agreement to acquire a portfolio of 89 Pizza Hut properties for $59 million from NPC International, Inc.

The Company will acquire 89 existing stores subject to long-term, triple-net lease agreements. The restaurants have, on average, approximately 3,000 leasable square feet situated on an average lot size of approximately 37,000 square feet with an average purchase price for each property of approximately $663,000. The 89 properties are located in 13 states. Realty Income plans to hold approximately $58 million in its core portfolio as long-term investments and will place approximately $1 million in its Crest Net Lease, Inc. subsidiary for future sale. Realty Income also intends to acquire an additional 11-unit Pizza Hut property portfolio sometime subsequent to the closing of this transaction.

NPC International is the largest Pizza Hut franchisee and the largest franchisee of any restaurant concept in the world. Founded in 1962, the company currently operates approximately 800 stores in the Midwest, South and Southeast. NPC stores comprise approximately 13% of the domestic Pizza Hut restaurant system and 17% of the domestic Pizza Hut franchised restaurant units.

The stores being acquired by Realty Income represent prime retail locations within the Pizza Hut retail system and are seasoned stores that provide strong unit level cash flow rent coverages. Sphere: Related Content