Sumit Roy
President & Chief Executive Officer at Realty Income
Thank you, Steve. Welcome, everyone. Fourth quarter and 2023 full-year results demonstrate the unique platform value that Realty Income has built, which differentiates us as a real estate partner to the world's leading companies. During the year, we accomplished several milestones which illustrate the benefits bestowed to us by our size, scale, and relationships. First, we set an annual high in property level in investment volume, closing on over $9.5 billion in high quality diversified investments across eight different countries and through 271 discrete transactions at a weighted average cash yield of 7.1%.
The year was punctuated with a particularly active fourth quarter as we closed on $2.7 billion of investments at a weighted average cash yield of 7.6%. Our fourth quarter activity included a $527 million sale leaseback transaction with Decathlon, one of the world's leading investment grade-rated sporting goods retailers, and included properties located in Germany, France, Spain, Italy, and Portugal. Despite a volatile capital markets environment, we achieved an investment spread of approximately 115 basis points in the fourth quarter and approximately 120 basis points in 2023. We were able to achieve these spreads without sacrificing our focus on the quality of real estate or security of cash flow, which is a testament to our experienced team and the merits that sophisticated sellers see in transacting with our platform.
Second, during the year, we established a presence in the data center sector through a build to suit development joint venture with digital realty, and we incubated new relationships with blue chip partners such as Blackstone and the EG Group through large scale investments, including the $950 million investment for a 21.9% stake in the Bellagio and the $1.5 billion sale leaseback involving primarily Cumberland farm convenience stores. Third, and in addition to the achievements noted above, we also announced the $9.3 billion merger with Spirit Realty Capital in an all stock transaction in October, which closed subsequent to year end on January 23.
These accomplishments contributed to our 2023 AFFO per share of $4, representing an approximately 7% total operational return for the year and, importantly, together with the Spirit merger set us up to deliver a compelling earnings growth backdrop in 2024. We believe that the close of the Spirit merger last month, along with meaningful debt and equity capital raising activity completed at attractive prices in December and January that Jonathan will describe in more detail, leave us well positioned to deliver robust growth in 2024. We herein initiated an AFFO per share guidance range of $4.13 to $4.21 per share for 2024, which represents an annual growth rate of 4.3% at the midpoint. We believe we can achieve this growth rate without the selling of additional public equity. Inclusive of our dividend this positions us to deliver a total operational return of more than 10% at the midpoint of the guidance range based on the trading price of our common stock as of February 20, 2024.
In addition to the $9.3 billion spirit merger, we're also providing 2024 acquisitions guidance of approximately $2 billion, which is expected to be fully funded via a combination of our portfolio's internally generated cash flow now exceeding $800 million after dividend payments on an annualized basis, as well as approximately $605 million of unsettled ATM proceeds and our $3.7 billion of cash and unutilized availability on our revolving credit facility as of year end. While we continue to source and review high quality investment opportunities, we remain highly selective, deploying capital only into attractive, risk adjusted return opportunities that meet both our near term and long term investment spread requirements.
Off our 2 billion initial investment volume forecast approximately half is expected to come in the form of development financing, the vast majority of which is already identified. To reiterate, our favorable return profile in 2024 carries very little execution risk from an investment standpoint, allowing us the flexibility to remain patient, disciplined, and opportunistic from a capital deployment standpoint. That said, as we demonstrated during the height of the pandemic, our platform affords us the opportunity to pivot quickly back into growth mode should market conditions change. While we intend to remain disciplined in our investments to ensure appropriate risk adjusted returns for our investors, we continue to highlight why we are best positioned to capitalize on compelling opportunities over the long term.
First, the opportunity to consolidate the fragmented net lease real estate market is vast. We estimate a $14 trillion total addressable market in the US and Europe across traditional net lease and emerging verticals like data centers and gaming. Second, we have firmly demonstrated our capabilities deploying capital, having invested $9 billion or more, including public M&A, in each of the last three years since exiting the pandemic year of 2020. Over this time, we have generated annualized AFFO per share growth of approximately 6% and we have provided a total operational return to stockholders of approximately 10% per year. Looking to 2024 and beyond we are on track to achieve similar capital deployment and AFFO per share growth objectives this year, and we are particularly energized by the prospect to participate meaningfully in verticals like data centers and gaming, where we are seeing opportunities to earn healthy initial yields with attractive contractual rent escalators.
Third, the Spirit merger deepens our ability to access capital markets through increased trading volume in our publicly listed stock, which has averaged more than $400 million of daily trading volume since the Spirit transaction was announced. This places us in the top 150 of S&P 500 companies and is more than seven times the net lease peer average over the same time frame, leaving us even better situated to fund our business in a highly efficient and non-disruptive manner through our ATM equity program. Fourth, our real estate portfolio is becoming increasingly diversified over time and consists of properties leased to relationship clients representing some of the world's leading companies in their respective industries.
Diversified exposure to these clients reinforces the stability of our platform and accordingly, our growing monthly dividend payments. Finally, the power of our platform is a crucial differentiator as we leverage our expertise across ownership of over 15,400 properties globally, inclusive of the spirit portfolio. Our experience managing over 5900 lease outcomes since 1996 provides learnings that feed into analytic AI tools that provide actionable insights, enabling us to more accurately identify acquisition opportunities and to maximize the value of our existing holdings.
Continuing with our key operational results from the fourth quarter investment volume of approximately $2.7 billion was allocated to high quality investments at a weighted average cash yield of approximately 7.6%. We completed $1.1 billion of total investment volume internationally at a weighted average cash yield of 7.8%. Investments were made across 119 distinct transactions, including 29 sale lease back transactions equating to $884 million of volume. Our full year investment activity was $9.5 billion, of which 35% was derived internationally, serving as a testament to the value of our investment platform's global footprint.
Included in fourth quarter volume was a loan we made to ASDA stores in the UK at a 10.9% yield. The loan is backed by ownership interests and properties containing grocery stores and supermarkets and was extended as part of a sale leaseback transaction with ASDA. In addition, fourth quarter volume included our previously announced $650 million of preferred equity investment in the Bellagio JV with Blackstone, which earns an 8.1% yield. Similar to the loan investment in ASDA that Bellagio preferred equity investment was paired with investment in high quality real estate.
For both investments, our ability to offer a broadened suite of capital solutions to clients granted us access to high quality net lease real estate investments at superior risk adjusted returns than we could have otherwise achieved. These transactions serve as templates for future sale lease back transactions. Also in the fourth quarter, we made our initial investment in a data center development JV with Digital Realty. The initial $200 million investment represents an 80% equity investment in the venture and is expected to generate a 6.9% initial cash yield, 2% annual rent escalators, and a long term triple net lease with an S&P 100 investment grade client upon completion.
Turning to portfolio operations, same store rent grew 2.6% in the fourth quarter and 1.9% for the year, benefiting in part from lower net bad debt expense compared to the prior year. On a normalized basis, our contractual rent growth approximates 1.5% on an annual basis. Based on the current composition of our portfolio. This amount is up over 50 basis points from just five years ago and is a result of an intentional push by our team to generate enhanced organic growth. We remain committed to walking this growth rate higher over time through our deliberate underwriting strategy. Our diligent asset management efforts led to a recapture rate of 103.6% during the quarter and 104.1% for the year excluding the impact of the Cineworld bankruptcy.
At year end, occupancy was 98.6%, a 20 basis point decline from the prior quarter as a result of expected client moveouts. I will now turn it over to Jonathan who will add further color to the quarter.