Sumit Roy
President & Chief Executive Officer at Realty Income
Thanks, Julie. Welcome, everyone. As I reflect on the past year at Realty Income, I remain inspired by the dedication of our colleagues who continue to relentlessly pursue numerous profitable growth initiatives while contributing to a record year of acquisitions for our company. During the fourth quarter, we closed on the merger with VEREIT, welcoming many talented new colleagues that will further help drive our ambitious goals while amplifying our competitive position in the industry. We are committed to a seamless and successful transition as we collectively work to integrate our one team, processes and systems. We remain on track to achieve over 75% of our annualized G&A cost synergies in year one post merger, as we outlined upon announcing the merger in April of last year.
Specifically, we have achieved over $42 million of our $37.5 million targeted synergies in year one, representing full year 2022, with over $50 million in G&A synergies expected in year two, representing full year 2023. Also, I continue to be impressed by the talent and dedication of our new team members as we work to integrate our two platforms and further strengthen our one team. And while we creatively bring together the best practices of VEREIT and Realty Income with our integration efforts to productively scale our operations, I'm encouraged by our integration work completed to date and our journey ahead. Beyond the merger, our business set a quarterly record for investment volume in the fourth quarter. During the quarter, we strengthened our foothold in Spain through additional high-quality acquisitions, including our second acquisition of properties leased to a key partner in Carrefour, one of the world's leading grocery retailers. Our strategic expansion into Continental Europe meaningfully increases our total addressable universe, as we estimate the total addressable market in Europe to be $8 trillion, nearly double that of the U.S.
We expect our investment activity in Europe to continue contributing to our competitive cost of capital as we look to further hedge our currency risk with debt priced at meaningfully lower yields than in the U.S. Looking forward, we are well positioned to continue creating value by capitalizing on our portable competitive advantages globally to deliver favorable risk-adjusted returns for our shareholders. With regards to recent developments, as previously disclosed this month, we announced our intent to acquire the Encore Boston Harbor, the East Coast's leading integrated resort and casino located less than five miles from downtown Boston. The $1.7 billion acquisition is being consummated at a 5.9% cash cap rate with a 30-year initial lease term. The property represents our first investment in the gaming industry and would represent less than 3.5% of our pro forma annual rent. While the property type is new, the lens we use to pursue the merits of the transaction is not. Our investment strategy centers around partnership with best-in-class operators occupying high-quality real estate locations, which is particularly important when entering a new business vertical and geography.
We followed this strategy with the Diageo sale leaseback in 2010 when executing our first transaction in the Vineyard space, with the Sainsbury's sale leaseback in 2019 when expanding our business internationally. And more recently, with the Carrefour sale leaseback when we entered into Spain last year. Our debut transaction in the gaming industry with Wynn Resorts represents the same commitment to partnering with the premier leaders in the respective industries together with a commitment to our overall investment strategy. The Encore Boston Harbor acquisition will add further diversification to our industry and client roster. After closing this transaction, we expect Wynn Resorts will become one of our top 10 clients. Our capacity to pursue and absorb a transaction of this size with a single client was supported by the enhanced size and scale that we gained through the VEREIT merger. And it is a testament to our ability to complete large-scale transactions without significantly impacting our prudent portfolio diversification metrics. The Encore Boston Harbor transaction meets our key investment criteria and illustrates that our investment opportunity set is not constrained by a particular property type.
The merits of this transaction are first, the real estate. We're acquiring 3.1 million square feet of high-quality real estate strategically located on the banks of the Mystic River. After opening in 2019, the property is still ramping but already generates $210 million in annual EBITDAR, resulting in 2.1 times rent coverage initially. Second, the client lease. We are entering into a 30-year triple net lease with attractive annual rent escalators at 1.75% annually for the first 10 years and the greater of 1.75% or CPI thereafter capped at 2.5%. Wynn Resorts is one of the largest premier gaming operators in the U.S. with an enterprise value of approximately $20 billion. They maintain a healthy balance sheet, moderate leverage and significant liquidity. Third, the industry performance. The gaming industry in the U.S. has recovered to pre-COVID levels. And in Massachusetts, gaming revenues grew 17% in the fourth quarter of 2021 as compared to the fourth quarter of 2019, outperforming the aggregate regional gaming market that grew 8% during the same time frame.
Pending regulatory procedures, we expect to close the transaction in the fourth quarter of 2022. Craig and his team have been a pleasure to work with, and we are pleased to cultivate this new relationship with Wynn Resorts as we expand our universe of net lease investments across many industries. Now turning to the results for the quarter. We are pleased with the continued strength of our core operations. We ended the quarter with our portfolio at 98.5% occupancy based on property count. Bolstered by the inherent quality of our real estate and enhanced by the proactive efforts of our talented and experienced asset management team, we re-leased 232 leases this quarter, recapturing 101.8% of expiring rent and bringing our full year 2021 recapture rate to 103.4%. Since our public listing in 1994, we have executed over 4,100 re-leases or sales on expiring leases, recapturing over 100% of rent on those re-leased contracts. We continue to report our quarterly recapture rates and believe this is one of the most objective ways to measure underlying portfolio quality in the net lease industry and is a testament to the merit of our asset management team.
After closing the VEREIT merger, we look forward with an enhanced key competitive advantage of size and scale. With an enterprise value of more than $57 billion, our portfolio now includes over 11,100 properties leased to approximately 1,040 clients in the United States and Europe across a diversified set of 60 distinct industries. Our total portfolio annualized contractual rent increased by over 50% since the end of the third quarter, ending the year at over $2.9 billion. With our expanded size and scale, we have greater client and industry diversification, which further improves our competitive positioning to pursue large portfolio or sale-leaseback transactions in the fragmented net lease industry and be a one-stop solution for multibillion-dollar opportunities. Since the end of the third quarter, our top 10 client concentration has decreased to 29.1% from 34.8%, and we believe it represents one of the highest quality portfolios in the net lease industry. Additionally, our top industry concentration has decreased, creating additional investment capacity.
Our top five industries now comprise 40% of our annualized contractual rent compared to over 43% at the end of the third quarter and a top industry exposure, which includes convenience stores and grocery stores have declined meaningfully. With the growth in concentration of our targeted industries, theater and health and fitness industry concentrations have naturally declined. In terms of the casual dining contribution from our VEREIT merger, the majority of their concentration is with Red Lobster that has experienced improved operating performance is now owned by Thai Union an established strong financial sponsor. Our international geographic concentration also declined pursuant to our VEREIT transaction, providing further room to achieve profitable growth in Europe and beyond. We have already started to see the benefits of our expanded platform through increased sourcing and acquisition volume. In 2021, we sourced approximately $84.5 billion of acquisition opportunities and approximately 39% was sourced from international markets. Reflecting our stringent investment criteria, we closed on approximately 8% of the total opportunities, bringing our total 2021 property level acquisitions to $6.4 billion, an annual record for our company.
Of the $6.4 billion invested in 2021, over 40% or approximately $2.6 billion was invested during the fourth quarter. Over $1 billion of our volume in the fourth quarter was the result of international investments, bringing our total international portfolio to nearly $4.3 billion of invested capital at the end of the year. We believe the market is efficient, and we're experiencing a competitive environment for high-quality assets leased to strong operators. Accordingly, the quality of our acquisition is reflected in our average initial cash cap rate during the fourth quarter of 5.4% and 5.5% for the year. The largest industries represented in our fourth quarter acquisition were European grocery stores and U.S. automotive services, which represent a continued investment in industries well positioned to perform in a variety of economic cycles, given its necessity-based retail proposition for consumers. The weighted average remaining lease term of assets added to our portfolio during the quarter was 14.2 years.
We continue to generate healthy investment spreads of approximately 140 basis points during the quarter and 150 basis points during the year, consistent with our historical average, while acquiring, in our view, the highest quality product in the marketplace. Inflation has been an important topic to investors in the last few months. I want to emphasize that we believe our business is, by design, well positioned to drive shareholder value in this climate. From a balance sheet perspective, having a well-staggered fixed-rate debt maturity schedule with no corporate bond maturities until 2024, limits our debt refinancing risk in a potentially rising rate environment. And we believe we actually benefit from an inflationary environment given our lease expiration schedule and our proven ability to recapture more than the value of expiring rent upon re-leasing. Finally, the value of our business is largely tied to current income as a recurring cash flow vehicle, which makes the value proposition of owning realty income comparatively more attractive during inflationary periods, as compared to other sectors in the marketplace whose value is high to growth in future years.
At this time, I'll pass it over to Christie, who will further discuss results from the quarter.
