8-K
NNN REIT, INC. (NNN)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 11, 2025
NNN REIT, INC.
(exact name of registrant as specified in its charter)
| Maryland | 001-11290 | 56-1431377 |
|---|---|---|
| (State or other jurisdiction of<br><br>incorporation or organization) | (Commission<br><br>File Number) | (I.R.S. Employment<br><br>Identification No.) |
450 South Orange Avenue, Suite 900, Orlando, Florida 32801
(Address of principal executive offices, including zip code)
(407) 265-7348
(Registrant’s telephone number, including area code)
Not applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| --- | --- |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of exchange on which registered |
|---|---|---|
| Common Stock, $0.01 par value | NNN | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition
period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition.
On February 11, 2025, NNN REIT, Inc. (the "Company"), issued a press release announcing its results of operations and financial condition for the quarter and year ended December 31, 2024. The press release is attached hereto as Exhibit 99.1 to this report and the supplemental data is attached hereto as Exhibit 99.2 to this report. The press release and the supplemental data are available on the Company's website.
The information in this Form 8-K is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), as amended, or otherwise subject to the liabilities of such section, nor shall such information be deemed to be incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
| Item 9.01. | Financial Statements and Exhibits. |
|---|---|
| (d) Exhibits. | |
| 99.1 | Press Release, dated February 11, 2025, of NNN REIT, Inc. |
| 99.2 | Annual Supplemental Data, dated February 11, 2025, of NNN REIT, Inc. |
| 104.1 | Cover Page Interactive Data File (the Cover Page Interactive Data File is embedded within the Inline XBRL document) |
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| NNN REIT, Inc. | ||
|---|---|---|
| Dated: February 11, 2025 | By: | /s/ Kevin B. Habicht |
| Kevin B. Habicht | ||
| Executive Vice President and Chief Financial Officer |
EX-99.1
Exhibit 99.1
| NEWS RELEASE | |
|---|---|
| For information contact: | |
| Kevin B. Habicht | |
| Chief Financial Officer | |
| (407) 265-7348 | FOR IMMEDIATE RELEASE |
| February 11, 2025 |
2024 Annual Results and 2025 Guidance
Announced By NNN REIT, Inc.
Orlando, Florida, February 11, 2025 – NNN REIT, Inc. (NYSE: NNN), a real estate investment trust, today announced operating results for the quarter and year ended December 31, 2024. Highlights include:
Operating Results:
- Revenues and net earnings, FFO, Core FFO and AFFO and diluted per share amounts:
| Quarter Ended | Year Ended | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| December 31, | December 31, | |||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||
| (in thousands, except per share data) | ||||||||||
| Revenues | $ | 218,482 | $ | 216,231 | $ | 869,266 | $ | 828,111 | ||
| Net earnings | $ | 97,894 | $ | 96,682 | $ | 396,835 | $ | 392,340 | ||
| Net earnings per share | $ | 0.52 | $ | 0.53 | (1) | $ | 2.15 | $ | 2.16 | (1) |
| FFO | $ | 152,689 | $ | 151,712 | $ | 610,501 | $ | 589,074 | ||
| FFO per share | $ | 0.82 | $ | 0.83 | (1) | $ | 3.32 | $ | 3.24 | (1) |
| Core FFO | $ | 152,731 | $ | 154,281 | $ | 611,169 | $ | 592,528 | ||
| Core FFO per share | $ | 0.82 | $ | 0.85 | (1) | $ | 3.32 | $ | 3.26 | (1) |
| AFFO | $ | 154,057 | $ | 148,997 | $ | 616,613 | $ | 591,523 | ||
| AFFO per share | $ | 0.82 | $ | 0.82 | $ | 3.35 | $ | 3.26 | ||
| (1) | During the quarter ended December 31, 2023, one tenant was reclassified to accrual basis for accounting purposes due to their improved qualitative and quantitative credit factors, which resulted in an increase of accrued rent in the amount of $5,573. Excluding such, net earnings per share would have been $0.50 and $2.13, FFO per share would have been $0.80 and $3.21 and Core FFO would have been $0.82 and $3.23 for the quarter and year ended December 31, 2023, respectively. | |||||||||
| --- | --- |
2024 Highlights:
- FFO per share increased 2.5% over prior year results
- Core FFO per share increased 1.8% over prior year results
- AFFO per share increased 2.8% over prior year results
2024 Highlights (continued):
- Dividend yield of 5.6% at December 31, 2024
- Annual dividend per common share increased to $2.29 marking the 35th consecutive year of annual dividend increases - the third longest record of consecutive annual dividend increases of all public REITs
- Maintained high occupancy levels at 98.5%, with a weighted average remaining lease term of 9.9 years, at December 31, 2024 as compared to 99.3% at September 30, 2024, and 99.5% at December 31, 2023
- $565.4 million in property investments, including the acquisition of 75 properties with aggregate gross leasable area of approximately 1,486,000 square feet at an initial cash cap rate of 7.7%, with a weighted average remaining lease term of 18.5 years
- Sold 41 properties for $148.7 million, producing $42.3 million of gains on sales, at a cap rate of 7.3%
- Raised $214.3 million in net proceeds from issuance of 4,716,754 common shares
- Issued $500 million principal amount of 5.500% senior unsecured notes due 2034
- Redeemed $350 million principal amount of 3.900% senior unsecured notes due 2024
- Expanded line of credit borrowing capacity from $1.1 billion to $1.2 billion and extended maturity to April 2028
- Maintained sector leading 12.1 year weighted average debt maturity
- Total average annual shareholder returns (11.1% for the past 30 years) exceed industry equity averages for the past 3-, 15-, 20-, 25- and 30-years
Fourth Quarter 2024 Highlights:
- $216.8 million in property investments, including the acquisition of 31 properties with an aggregate gross leasable area of approximately 305,000 square feet at an initial cash cap rate of 7.6%, with a weighted average remaining lease term of 19.8 years
- Sold 12 properties for $42.8 million, producing $12.1 million of gains on sales
NNN has initiated eviction proceedings for 64 properties leased to a mid-western restaurant operator. As of December 31, 2024, NNN had taken back possession of 33 of those properties of which 28 properties have been re-leased to another restaurant operator with rent commencing May 1, 2025. NNN is working to take possession of the remainder of the properties in the first quarter of 2025. Additionally, during the fourth quarter of 2024, NNN took possession of 32 properties previously leased to a southeast U.S. furniture retailer that had filed for bankruptcy. As of December 31, 2024, NNN had sold six of these properties generating net proceeds of $21.8 million and re-leased five of these properties.
The company announced 2025 Core FFO guidance of $3.33 to $3.38 per share. The 2025 AFFO is estimated to be $3.39 to $3.44 per share. The Core FFO guidance equates to net earnings of $1.97 to $2.02 per share, plus $1.36 per share of expected real estate depreciation and amortization and excludes any gains from the sale of real estate, charges for impairments and executive retirement costs. The guidance is based on current plans and assumptions and subject to risks and uncertainties more fully described in this press release and the company's reports filed with the Securities and Exchange Commission.
Steve Horn, Chief Executive Officer, commented: "In 2024, we executed more than $560 million in acquisitions with minimal reliance on capital markets and ended the year with a zero balance on our revolving credit facility. With the full $1.2 billion available on our line of credit and approximately $200 million in free cash flow, we are in a strong position to drive property acquisitions and capitalize on relationship opportunities in 2025."
NNN REIT invests primarily in high-quality retail properties subject generally to long-term, net leases. As of December 31, 2024, the company owned 3,568 properties in 49 states with a gross leasable area of approximately 36.6 million square feet and a weighted average remaining lease term of 9.9 years. NNN is one of only three publicly traded real estate investment trusts to have increased annual dividends for 35 or more consecutive years. For more information on the company, visit www.nnnreit.com.
Management will hold a conference call on February 11, 2025, at 10:30 a.m. ET to review these results. The call can be accessed on the NNN REIT website live at http://www.nnnreit.com. For those unable to listen to the live broadcast, a replay will be available on the company’s website. In addition, a summary of any earnings guidance given on the call will be posted to the company’s website.
Statements in this press release that are not strictly historical are “forward-looking” statements. These statements generally are characterized by the use of terms such as "believe," "expect," "intend," "may," "estimated," or other similar words or expressions. Forward-looking statements involve known and unknown risks, which may cause the company’s actual future results to differ materially from expected results. These risks include, among others, general economic conditions, including inflation, local real estate conditions, changes in interest rates, increases in operating costs, the preferences and financial condition of the company's tenants, the availability of capital, risks related to the company's status as a real estate investment trust ("REIT") and the potential impacts of an epidemic or pandemic on the company's business operations, financial results and financial position on the world economy. Additional information concerning these and other factors that could cause actual results to differ materially from these forward-looking statements is contained from time to time in the company’s Securities and Exchange Commission (the “Commission”) filings, including, but not limited to, the company’s Annual Report on Form 10-K. Copies of each filing may be obtained from the company or the Commission. Such forward-looking statements should be regarded solely as reflections of the company’s current operating plans and estimates. Actual operating results may differ materially from what is expressed or forecast in this press release. NNN REIT, Inc. undertakes no obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date these statements were made.
Funds From Operations, commonly referred to as "FFO", is a relative non-GAAP financial measure of operating performance of an equity REIT in order to recognize that income-producing real estate historically has not depreciated on the basis determined under GAAP. FFO is defined by the National Association of Real Estate Investment Trusts (“Nareit”) and is used by the company as follows: net earnings (computed in accordance with GAAP) plus depreciation and amortization of assets unique to the real estate industry, excluding gains (or including losses), any applicable taxes and noncontrolling interests on the disposition of certain assets, the company’s share of these items from the company’s noncontrolling interests and any impairment charges on a depreciable real estate asset, net of recoveries.
FFO is generally considered by industry analysts to be the most appropriate measure of performance of real estate companies. FFO does not necessarily represent cash provided by operating activities in accordance with GAAP and should not be considered an alternative to net earnings as an indication of the company’s performance or to cash flow as a measure of liquidity or ability to make distributions. Management considers FFO an appropriate measure of performance of an equity REIT because it primarily excludes the assumption that the value of the real estate assets diminishes predictably over time, and because industry analysts have accepted it as a performance measure. The company’s computation of FFO may differ from the methodology for calculating FFO used by other equity REITs, and therefore, may not be comparable to such other REITs. A reconciliation of net earnings (computed in accordance with GAAP) to FFO, as defined by Nareit, is included in the financial information accompanying this release.
Core Funds From Operations (“Core FFO”) is a non-GAAP measure of operating performance that adjusts FFO to eliminate the impact of certain GAAP income and expense amounts that the company believes are infrequent and unusual in nature and/or not related to its core real estate operations. Exclusion of these items from similar FFO-type metrics is common within the REIT industry, and management believes that presentation of Core FFO provides investors with a potential metric to assist in their evaluation of the company’s operating performance across multiple periods and in comparison to the operating performance of its peers because it removes the effect of unusual items that are not expected to impact the company’s operating performance on an ongoing basis. Core FFO is used by management in evaluating the performance of the company’s core business operations and is a factor in determining management compensation. Items included in calculating FFO that may be excluded in calculating Core FFO may include items such as transaction related gains, income or expense, impairments on land, executive retirement costs, or other non-core amounts as they occur. The company’s computation of Core FFO may differ from the methodology for calculating Core FFO used by other equity REITs, and therefore, may not be comparable to such other REITs. A reconciliation of net earnings (computed in accordance with GAAP) to Core FFO is included in the financial information accompanying this release.
Adjusted Funds From Operations (“AFFO”) is a non-GAAP financial measure of operating performance used by many companies in the REIT industry. AFFO adjusts FFO for certain non-cash items that reduce or increase net income in accordance with GAAP. AFFO should not be considered an alternative to net earnings, as an indication of the company's performance or to cash flow as a measure of liquidity or ability to make distributions. Management considers AFFO a useful supplemental measure of the company’s performance. The company’s computation of AFFO may differ from the methodology for calculating AFFO used by other equity REITs, and therefore, may not be comparable to such other REITs. A reconciliation of net earnings (computed in accordance with GAAP) to AFFO is included in the financial information accompanying this release.
Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate as defined by Nareit (“EBITDA”) is a metric established by Nareit and commonly used by real estate companies. The measure is a result of net earnings (computed in accordance with GAAP), plus interest expense, income tax expense, depreciation and amortization, excluding any gains (or including any losses) on disposition of real estate, any impairment charges and after adjustments for income and losses attributable to noncontrolling interests. Management considers the non-GAAP measure of EBITDA to be an appropriate measure of the company's performance and should be considered in addition to, net earnings or loss, as a measure of the company's operating performance. The company’s computation of EBITDA may differ from the methodology for calculating EBITDA used by other equity REITs, and therefore, may not be comparable to such other REITs. A reconciliation of net earnings (computed in accordance with GAAP) to EBITDA, as defined by Nareit, is included in the company’s Annual Supplemental Data accompanying this release.
NNN REIT, Inc.
Income Statement Summary
(dollars in thousands, except per share data)
(unaudited)
| Quarter Ended | Year Ended | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31, | December 31, | |||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||
| Revenues: | ||||||||||||||
| Rental income | $ | 218,348 | $ | 215,178 | $ | 867,468 | $ | 826,090 | ||||||
| Interest and other income from real estate transactions | 134 | 1,053 | 1,798 | 2,021 | ||||||||||
| 218,482 | 216,231 | 869,266 | 828,111 | |||||||||||
| Operating expenses: | ||||||||||||||
| General and administrative | 8,705 | 10,530 | 44,287 | 43,746 | ||||||||||
| Real estate | 11,142 | 8,237 | 32,317 | 28,378 | ||||||||||
| Depreciation and amortization | 63,194 | 60,079 | 249,681 | 238,625 | ||||||||||
| Leasing transaction costs | 24 | 76 | 99 | 299 | ||||||||||
| Impairment losses – real estate, net of recoveries | 3,724 | 2,315 | 6,632 | 5,990 | ||||||||||
| Executive retirement costs | 42 | 2,569 | 668 | 3,454 | ||||||||||
| 86,831 | 83,806 | 333,684 | 320,492 | |||||||||||
| Gain on disposition of real estate | 12,083 | 7,263 | 42,290 | 47,485 | ||||||||||
| Earnings from operations | 143,734 | 139,688 | 577,872 | 555,104 | ||||||||||
| Other expenses (revenues): | ||||||||||||||
| Interest and other income | (1,040 | ) | (383 | ) | (2,980 | ) | (1,134 | ) | ||||||
| Interest expense | 46,880 | 43,389 | 184,017 | 163,898 | ||||||||||
| 45,840 | 43,006 | 181,037 | 162,764 | |||||||||||
| Net earnings | $ | 97,894 | $ | 96,682 | $ | 396,835 | $ | 392,340 | ||||||
| Weighted average shares outstanding: | ||||||||||||||
| Basic | 186,449,345 | 181,425,202 | 183,688,562 | 181,200,040 | ||||||||||
| Diluted | 186,833,150 | 181,932,133 | 184,043,841 | 181,689,723 | ||||||||||
| Net earnings per share: | ||||||||||||||
| Basic | $ | 0.52 | $ | 0.53 | $ | 2.16 | $ | 2.16 | ||||||
| Diluted | $ | 0.52 | $ | 0.53 | (1) | $ | 2.15 | $ | 2.16 | (1) | ||||
| (1) | During the quarter ended December 31, 2023, one tenant was reclassified to accrual basis for accounting purposes due to their improved qualitative and quantitative credit factors, which resulted in an increase of accrued rent in the amount of $5,573. Excluding such, net earnings per common share would have been $0.50 and $2.13 for the quarter and year ended December 31, 2023, respectively. | |||||||||||||
| --- | --- |
NNN REIT, Inc.
(dollars in thousands, except per share data)
(unaudited)
| Quarter Ended | Year Ended | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31, | December 31, | |||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||
| Funds From Operations ("FFO") Reconciliation: | ||||||||||||||
| Net earnings | $ | 97,894 | $ | 96,682 | $ | 396,835 | $ | 392,340 | ||||||
| Real estate depreciation and amortization | 63,154 | 59,978 | 249,324 | 238,229 | ||||||||||
| Gain on disposition of real estate | (12,083 | ) | (7,263 | ) | (42,290 | ) | (47,485 | ) | ||||||
| Impairment losses – depreciable real estate, net of recoveries | 3,724 | 2,315 | 6,632 | 5,990 | ||||||||||
| Total FFO adjustments | 54,795 | 55,030 | 213,666 | 196,734 | ||||||||||
| FFO | $ | 152,689 | $ | 151,712 | $ | 610,501 | $ | 589,074 | ||||||
| FFO per share: | ||||||||||||||
| Basic | $ | 0.82 | $ | 0.84 | $ | 3.32 | $ | 3.25 | ||||||
| Diluted | $ | 0.82 | $ | 0.83 | (1) | $ | 3.32 | $ | 3.24 | (1) | ||||
| Core Funds From Operations ("Core FFO") Reconciliation: | ||||||||||||||
| Net earnings | $ | 97,894 | $ | 96,682 | $ | 396,835 | $ | 392,340 | ||||||
| Total FFO adjustments | 54,795 | 55,030 | 213,666 | 196,734 | ||||||||||
| FFO | 152,689 | 151,712 | 610,501 | 589,074 | ||||||||||
| Executive retirement costs | 42 | 2,569 | 668 | 3,454 | ||||||||||
| Total Core FFO adjustments | 42 | 2,569 | 668 | 3,454 | ||||||||||
| Core FFO | $ | 152,731 | $ | 154,281 | $ | 611,169 | $ | 592,528 | ||||||
| Core FFO per share: | ||||||||||||||
| Basic | $ | 0.82 | $ | 0.85 | $ | 3.33 | $ | 3.27 | ||||||
| Diluted | $ | 0.82 | $ | 0.85 | (1) | $ | 3.32 | $ | 3.26 | (1) | ||||
| (1) | During the quarter ended December 31, 2023, one tenant was reclassified to accrual basis for accounting purposes due to their improved qualitative and quantitative credit factors, which resulted in an increase of accrued rent in the amount of $5,573. Excluding such, FFO per common share would have been $0.80 and $3.21 and Core FFO would have been $0.82 and $3.23 for the quarter and year ended December 31, 2023, respectively. | |||||||||||||
| --- | --- |
NNN REIT, Inc.
(dollars in thousands, except per share data)
(unaudited)
| Quarter Ended | Year Ended | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31, | December 31, | ||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||
| Adjusted Funds From Operations ("AFFO") Reconciliation: | |||||||||||||
| Net earnings | $ | 97,894 | $ | 96,682 | $ | 396,835 | $ | 392,340 | |||||
| Total FFO adjustments | 54,795 | 55,030 | 213,666 | 196,734 | |||||||||
| Total Core FFO adjustments | 42 | 2,569 | 668 | 3,454 | |||||||||
| Core FFO | 152,731 | 154,281 | 611,169 | 592,528 | |||||||||
| Straight-line accrued rent, net of reserves | (302 | ) | (5,957 | ) | (294 | ) | (7,453 | ) | |||||
| Net capital lease rent adjustment | 58 | 75 | 222 | 319 | |||||||||
| Below-market rent amortization | (144 | ) | (82 | ) | (495 | ) | (431 | ) | |||||
| Stock based compensation expense | 2,775 | 2,592 | 11,816 | 10,846 | |||||||||
| Capitalized interest expense | (1,061 | ) | (1,912 | ) | (5,805 | ) | (4,286 | ) | |||||
| Total AFFO adjustments | 1,326 | (5,284 | ) | 5,444 | (1,005 | ) | |||||||
| AFFO | $ | 154,057 | $ | 148,997 | $ | 616,613 | $ | 591,523 | |||||
| AFFO per share: | |||||||||||||
| Basic | $ | 0.83 | $ | 0.82 | $ | 3.36 | $ | 3.26 | |||||
| Diluted | $ | 0.82 | $ | 0.82 | $ | 3.35 | $ | 3.26 | |||||
| Other Information: | |||||||||||||
| Rental income from operating leases(1) | $ | 212,565 | $ | 209,037 | $ | 846,653 | $ | 805,136 | |||||
| Earned income from direct financing leases(1) | $ | 115 | $ | 133 | $ | 468 | $ | 560 | |||||
| Percentage rent(1) | $ | 189 | $ | 241 | $ | 1,536 | $ | 1,631 | |||||
| Real estate expenses reimbursed from tenants(1) | $ | 5,479 | $ | 5,767 | $ | 18,811 | $ | 18,763 | |||||
| Real estate expenses | (11,142 | ) | (8,237 | ) | (32,317 | ) | (28,378 | ) | |||||
| Real estate expenses, net of tenant reimbursements | $ | (5,663 | ) | $ | (2,470 | ) | $ | (13,506 | ) | $ | (9,615 | ) | |
| Amortization of debt costs | $ | 1,455 | $ | 1,295 | $ | 5,993 | $ | 4,943 | |||||
| Scheduled debt principal amortization (excluding <br> maturities) | $ | — | $ | — | $ | — | $ | 173 | (2) | ||||
| Non-real estate depreciation expense | $ | 43 | $ | 105 | $ | 370 | $ | 409 | |||||
| (1) | For the quarters ended December 31, 2024 and 2023, the aggregate of such amounts is $218,348 and $215,178, respectively, and $867,468 and $826,090, for the year ended December 31, 2024 and 2023, respectively, and is classified as rental income on the income statement summary. | ||||||||||||
| --- | --- | ||||||||||||
| (2) | In April 2023, NNN repaid the remaining mortgages payable principal balance of $9,774. |
NNN REIT, Inc.
2025 Earnings Guidance:
Guidance is based on current plans and assumptions and subject to risks and uncertainties more fully described in this press release and the company's reports filed with the Commission.
| 2025 Guidance | |
|---|---|
| Net earnings per share excluding any gains on disposition of real <br> estate, impairment charges, and executive retirement costs | $1.97 - $2.02 per share |
| Real estate depreciation and amortization per share | $1.36 per share |
| Core FFO per share | $3.33 - $3.38 per share |
| AFFO per share | $3.39 - $3.44 per share |
| General and administrative expenses | $47 - $48 Million |
| Real estate expenses, net of tenant reimbursements | $15 - $16 Million |
| Acquisition volume | $500 - $600 Million |
| Disposition volume | $80 - $120 Million |
NNN REIT, Inc.
Balance Sheet Summary
(dollars in thousands)
(unaudited)
| December 31,<br>2023 | |||
|---|---|---|---|
| Assets: | |||
| Real estate portfolio, net of accumulated depreciation and amortization | 8,746,168 | $ | 8,535,851 |
| Cash and cash equivalents | 8,731 | 1,189 | |
| Restricted cash and cash held in escrow | 331 | 3,966 | |
| Receivables, net of allowance of 617 and 669, respectively | 2,975 | 3,649 | |
| Accrued rental income, net of allowance of 4,156 and 4,168, respectively | 34,005 | 34,611 | |
| Debt costs, net of accumulated amortization of 27,002 and 23,952, respectively | 8,958 | 3,243 | |
| Other assets | 71,560 | 79,459 | |
| Total assets | 8,872,728 | $ | 8,661,968 |
| Liabilities: | |||
| Line of credit payable | — | $ | 132,000 |
| Notes payable, net of unamortized discount and unamortized debt costs | 4,373,803 | 4,228,544 | |
| Accrued interest payable | 29,699 | 34,374 | |
| Other liabilities | 106,951 | 109,593 | |
| Total liabilities | 4,510,453 | 4,504,511 | |
| Total equity | 4,362,275 | 4,157,457 | |
| Total liabilities and equity | 8,872,728 | $ | 8,661,968 |
| Common shares outstanding | 187,540,929 | 182,474,770 | |
| Gross leasable area, Property Portfolio (square feet) | 36,557,000 | 35,966,000 |
All values are in US Dollars.
NNN REIT, Inc.
Debt Summary
As of December 31, 2024
(dollars in thousands)
(unaudited)
| Unsecured Debt | Principal | Principal,<br>Net of<br>Unamortized<br>Discount | Stated<br>Rate | Effective<br>Rate | Maturity <br>Date | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Line of credit payable | $ | — | $ | — | SOFR + 87.5bps | — | April 2028 | |||||
| Unsecured notes payable: | ||||||||||||
| 2025 | 400,000 | 399,900 | 4.000 | % | 4.029 | % | November 2025 | |||||
| 2026 | 350,000 | 349,128 | 3.600 | % | 3.733 | % | December 2026 | |||||
| 2027 | 400,000 | 399,490 | 3.500 | % | 3.548 | % | October 2027 | |||||
| 2028 | 400,000 | 398,778 | 4.300 | % | 4.388 | % | October 2028 | |||||
| 2030 | 400,000 | 399,286 | 2.500 | % | 2.536 | % | April 2030 | |||||
| 2033 | 500,000 | 489,579 | 5.600 | % | 5.905 | % | October 2033 | |||||
| 2034 | 500,000 | 494,112 | 5.500 | % | 5.662 | % | June 2034 | |||||
| 2048 | 300,000 | 296,219 | 4.800 | % | 4.890 | % | October 2048 | |||||
| 2050 | 300,000 | 294,561 | 3.100 | % | 3.205 | % | April 2050 | |||||
| 2051 | 450,000 | 442,228 | 3.500 | % | 3.602 | % | April 2051 | |||||
| 2052 | 450,000 | 440,282 | 3.000 | % | 3.118 | % | April 2052 | |||||
| Total | 4,450,000 | 4,403,563 | ||||||||||
| Total unsecured debt(1) | $ | 4,450,000 | $ | 4,403,563 | ||||||||
| Debt costs | $ | (43,820 | ) | |||||||||
| Accumulated amortization | 14,060 | |||||||||||
| Debt costs, net of accumulated amortization | (29,760 | ) | ||||||||||
| Notes payable, net of unamortized discount and <br> unamortized debt costs | $ | 4,373,803 | ||||||||||
| (1) | Unsecured debt has a weighted average interest rate of 4.1% and a weighted average maturity of 12.1 years. | |||||||||||
| --- | --- |
NNN REIT, Inc.
Debt Summary - Continued
As of December 31, 2024
(unaudited)
Credit Facility and Notes Covenants
The following is a summary of key financial covenants for the company's unsecured credit facility and notes, as defined and calculated per the terms of the facility's credit agreement and the notes' governing documents, respectively, which are included in the company's filings with the Commission. These calculations, which are not based on U.S. GAAP measurements, are presented to investors to show that as of December 31, 2024, the company believes it is in compliance with the covenants.
| Key Covenants | Required | December 31, 2024 |
|---|---|---|
| Unsecured Bank Credit Facility: | ||
| Maximum leverage ratio | < 0.60 | 0.37 |
| Minimum fixed charge coverage ratio | > 1.50 | 4.28 |
| Maximum secured indebtedness ratio | < 0.40 | — |
| Unencumbered asset value ratio | > 1.67 | 2.70 |
| Unencumbered interest ratio | > 1.75 | 4.23 |
| Unsecured Notes: | ||
| Limitation on incurrence of total debt | ≤ 60% | 40.0% |
| Limitation on incurrence of secured debt | ≤ 40% | — |
| Debt service coverage ratio | ≥ 1.50 | 4.2 |
| Maintenance of total unencumbered assets | ≥ 150% | 250% |
NNN REIT, Inc.
Property Portfolio
As of December 31, 2024
Top 20 Lines of Trade
| As of December 31, | |||
|---|---|---|---|
| Lines of Trade | 2024(1) | 2023(2) | |
| 1. | Convenience stores | 17.0% | 16.4% |
| 2. | Automotive service | 16.9% | 15.6% |
| 3. | Restaurants – limited service | 8.4% | 8.5% |
| 4. | Restaurants – full service | 7.8% | 8.7% |
| 5. | Family entertainment centers | 7.2% | 6.4% |
| 6. | Recreational vehicle dealers, parts and accessories | 5.1% | 4.6% |
| 7. | Theaters | 4.0% | 4.1% |
| 8. | Health and fitness | 3.9% | 4.5% |
| 9. | Equipment rental | 3.2% | 3.0% |
| 10. | Wholesale clubs | 2.4% | 2.5% |
| 11. | Automotive parts | 2.4% | 2.5% |
| 12. | Drug stores | 2.2% | 2.4% |
| 13. | Home improvement | 2.1% | 2.2% |
| 14. | Medical service providers | 1.7% | 1.7% |
| 15. | General merchandise | 1.4% | 1.4% |
| 16. | Furniture | 1.3% | 2.0% |
| 17. | Pet supplies and services | 1.3% | 1.1% |
| 18. | Consumer electronics | 1.3% | 1.4% |
| 19. | Travel plazas | 1.2% | 1.3% |
| 20. | Home furnishings | 1.1% | 1.3% |
| Other | 8.1% | 8.4% | |
| Total | 100.0% | 100.0% |
Top 10 States
| State | % of Total(1) | State | % of Total(1) | ||
|---|---|---|---|---|---|
| 1. | Texas | 18.8% | 6. | Tennessee | 3.8% |
| 2. | Florida | 8.7% | 7. | North Carolina | 3.7% |
| 3. | Illinois | 5.1% | 8. | Indiana | 3.6% |
| 4. | Georgia | 4.5% | 9. | Arizona | 3.2% |
| 5. | Ohio | 4.2% | 10. | Virginia | 3.2% |
As a percentage of annual base rent, which is the annualized base rent for all leases in place.
| (1) | $860,562,000 as of December 31, 2024. |
|---|---|
| (2) | $818,749,000 as of December 31, 2023. |
NNN REIT, Inc.
Property Portfolio - Continued
As of December 31, 2024
Top 20 Tenants
| Tenant | # of <br>Properties | % of <br>Total(1) | |
|---|---|---|---|
| 1. | 7-Eleven | 146 | 4.5% |
| 2. | Mister Car Wash | 121 | 4.1% |
| 3. | Dave & Buster's | 34 | 3.8% |
| 4. | Camping World | 48 | 3.8% |
| 5. | GPM Investments (convenience stores) | 148 | 2.8% |
| 6. | Flynn Restaurant Group (Taco Bell/Arby's) | 204 | 2.7% |
| 7. | AMC Theatres | 20 | 2.6% |
| 8. | LA Fitness | 26 | 2.5% |
| 9. | BJ's Wholesale Club | 13 | 2.4% |
| 10. | Mavis Tire Express Services | 140 | 2.2% |
| 11. | Couche Tard (Pantry) | 91 | 2.2% |
| 12. | Kent Distributors (convenience stores) | 38 | 2.1% |
| 13. | Chuck E. Cheese | 53 | 1.8% |
| 14. | Walgreens | 49 | 1.8% |
| 15. | Sunoco | 53 | 1.8% |
| 16. | Casey's General Stores (convenience stores) | 62 | 1.7% |
| 17. | United Rentals | 49 | 1.6% |
| 18. | Tidal Wave Auto Spa | 35 | 1.3% |
| 19. | Super Star Car Wash | 33 | 1.3% |
| 20. | Lifetime Fitness | 3 | 1.3% |
Lease Expirations(2)
| % of<br>Total(1) | # of<br>Properties | Gross Leasable<br>Area (3) | % of<br>Total(1) | # of<br>Properties | Gross Leasable<br>Area (3) | ||
|---|---|---|---|---|---|---|---|
| 2025 | 3.2% | 132 | 874,000 | 2031 | 7.0% | 184 | 2,655,000 |
| 2026 | 4.2% | 204 | 1,981,000 | 2032 | 5.1% | 183 | 1,804,000 |
| 2027 | 7.6% | 231 | 3,401,000 | 2033 | 4.6% | 134 | 1,398,000 |
| 2028 | 5.8% | 255 | 2,306,000 | 2034 | 5.8% | 182 | 2,398,000 |
| 2029 | 4.6% | 143 | 2,083,000 | Thereafter | 47.7% | 1,711 | 14,840,000 |
| 2030 | 4.4% | 154 | 2,086,000 | ||||
| (1) | Based on the annual base rent of $860,562,000, which is the annualized base rent for all leases in place as of December 31, 2024. | ||||||
| --- | --- | ||||||
| (2) | As of December 31, 2024, the weighted average remaining lease term is 9.9 years. | ||||||
| (3) | Square feet. |
EX-99.2
Exhibit 99.2
ANNUAL SUPPLEMENTAL DATA
As of December 31, 2024
TABLE OF CONTENTS
| PAGE | |
|---|---|
| Financial Summary | |
| Income Statement Summary | 4 |
| Funds From Operations (FFO) | 5 |
| Core Funds From Operations (Core FFO) | 6 |
| Adjusted Funds From Operations (AFFO) | 7 |
| Other Information | 8 |
| EBITDA | 8 |
| Balance Sheet Summary | 9 |
| Debt Summary | 10 |
| Credit Metrics | 11 |
| Credit Facility and Note Covenants | 11 |
| Long-Term Dividend History | 12 |
| Transaction Summary | |
| Property Acquisitions | 13 |
| Property Dispositions | 13 |
| Property Portfolio | |
| Lease Expirations | 14 |
| Top 20 Lines of Trade | 15 |
| Top 10 States | 15 |
| Portfolio By Region | 16 |
| Top Tenants | 17 |
| Same Store Rental Income | 18 |
| Leasing Data | 18 |
| Other Property Portfolio Data | 19 |
| Earnings Guidance | 19 |
Statements in this annual supplemental data that are not strictly historical are “forward-looking” statements. These statements generally are characterized by the use of terms such as "believe," "expect," "intend," "may," "estimated," or other similar words or expressions. Forward-looking statements involve known and unknown risks, which may cause the company’s actual future results to differ materially from expected results. These risks include, among others, general economic conditions, including inflation, local real estate conditions, changes in interest rates, increases in operating costs, the preferences and financial condition of the company's tenants, the availability of capital, risks related to the company's status as a real estate investment trust ("REIT") and the potential impacts of an epidemic or pandemic on the company's business operations, financial results and financial position and on the world economy. Additional information concerning these and other factors that could cause actual results to differ materially from these forward-looking statements is contained from time to time in the company’s Securities and Exchange Commission (the “Commission”) filings, including, but not limited to, the company’s Annual Report on Form 10-K for the year ended December 31, 2024.
Copies of each filing may be obtained from the company or the Commission. Such forward-looking statements should be regarded solely as reflections of the company’s current operating plans and estimates. Actual operating results may differ materially from what is expressed or forecast in this press release. NNN REIT, Inc. undertakes no obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date these statements were made.
| INCOME STATEMENT SUMMARY |
|---|
(dollars in thousands, except per share data)
(unaudited)
| Quarter Ended | Year Ended | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31, | December 31, | |||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||
| Revenues: | ||||||||||||||
| Rental income | $ | 218,348 | $ | 215,178 | $ | 867,468 | $ | 826,090 | ||||||
| Interest and other income from real estate transactions | 134 | 1,053 | 1,798 | 2,021 | ||||||||||
| 218,482 | 216,231 | 869,266 | 828,111 | |||||||||||
| Operating expenses: | ||||||||||||||
| General and administrative | 8,705 | 10,530 | 44,287 | 43,746 | ||||||||||
| Real estate | 11,142 | 8,237 | 32,317 | 28,378 | ||||||||||
| Depreciation and amortization | 63,194 | 60,079 | 249,681 | 238,625 | ||||||||||
| Leasing transaction costs | 24 | 76 | 99 | 299 | ||||||||||
| Impairment losses – real estate, net of recoveries | 3,724 | 2,315 | 6,632 | 5,990 | ||||||||||
| Executive retirement costs | 42 | 2,569 | 668 | 3,454 | ||||||||||
| 86,831 | 83,806 | 333,684 | 320,492 | |||||||||||
| Gain on disposition of real estate | 12,083 | 7,263 | 42,290 | 47,485 | ||||||||||
| Earnings from operations | 143,734 | 139,688 | 577,872 | 555,104 | ||||||||||
| Other expenses (revenues): | ||||||||||||||
| Interest and other income | (1,040 | ) | (383 | ) | (2,980 | ) | (1,134 | ) | ||||||
| Interest expense | 46,880 | 43,389 | 184,017 | 163,898 | ||||||||||
| 45,840 | 43,006 | 181,037 | 162,764 | |||||||||||
| Net earnings | $ | 97,894 | $ | 96,682 | $ | 396,835 | $ | 392,340 | ||||||
| Weighted average shares outstanding: | ||||||||||||||
| Basic | 186,449,345 | 181,425,202 | 183,688,562 | 181,200,040 | ||||||||||
| Diluted | 186,833,150 | 181,932,133 | 184,043,841 | 181,689,723 | ||||||||||
| Net earnings per share: | ||||||||||||||
| Basic | $ | 0.52 | $ | 0.53 | $ | 2.16 | $ | 2.16 | ||||||
| Diluted | $ | 0.52 | $ | 0.53 | (1) | $ | 2.15 | $ | 2.16 | (1) | ||||
| (1) | During the quarter ended December 31, 2023, one tenant was reclassified to accrual basis for accounting purposes due to their improved qualitative and quantitative credit factors, which resulted in an increase of accrued rent in the amount of $5,573. Excluding such, net earnings per common share would have been $0.50 and $2.13 for the quarter and year ended December 31, 2023, respectively. | |||||||||||||
| --- | --- |
| FUNDS FROM OPERATIONS ("FFO")(1) |
|---|
(dollars in thousands, except per share data)
(unaudited)
| Quarter Ended | Year Ended | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31, | December 31, | |||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||
| Net earnings | $ | 97,894 | $ | 96,682 | $ | 396,835 | $ | 392,340 | ||||||
| Real estate depreciation and amortization | 63,154 | 59,978 | 249,324 | 238,229 | ||||||||||
| Gain on disposition of real estate | (12,083 | ) | (7,263 | ) | (42,290 | ) | (47,485 | ) | ||||||
| Impairment losses – depreciable real estate, net of recoveries | 3,724 | 2,315 | 6,632 | 5,990 | ||||||||||
| Total FFO adjustments | 54,795 | 55,030 | 213,666 | 196,734 | ||||||||||
| FFO | $ | 152,689 | $ | 151,712 | $ | 610,501 | $ | 589,074 | ||||||
| FFO per share: | ||||||||||||||
| Basic | $ | 0.82 | $ | 0.84 | $ | 3.32 | $ | 3.25 | ||||||
| Diluted | $ | 0.82 | $ | 0.83 | (2) | $ | 3.32 | $ | 3.24 | (2) | ||||
| (1) | FFO is a non-GAAP financial measure. Please reference the Earnings Release for the quarter and year ended December 31, 2024 for the company's definition and explanation of how the company utilizes this metric. | |||||||||||||
| --- | --- | |||||||||||||
| (2) | During the quarter ended December 31, 2023, one tenant was reclassified to accrual basis for accounting purposes due to their improved qualitative and quantitative credit factors, which resulted in an increase of accrued rent in the amount of $5,573. Excluding such, FFO per common share would have been $0.80 and $3.21 for the quarter and year ended December 31, 2023, respectively. |
| CORE FUNDS FROM OPERATIONS ("Core FFO")(1) |
|---|
(dollars in thousands, except per share data)
(unaudited)
| Quarter Ended | Year Ended | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| December 31, | December 31, | |||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||
| Net earnings | $ | 97,894 | $ | 96,682 | $ | 396,835 | $ | 392,340 | ||
| Total FFO adjustments | 54,795 | 55,030 | 213,666 | 196,734 | ||||||
| FFO | 152,689 | 151,712 | 610,501 | 589,074 | ||||||
| Executive retirement costs | 42 | 2,569 | 668 | 3,454 | ||||||
| Total Core FFO adjustments | 42 | 2,569 | 668 | 3,454 | ||||||
| Core FFO | $ | 152,731 | $ | 154,281 | $ | 611,169 | $ | 592,528 | ||
| Core FFO per share: | ||||||||||
| Basic | $ | 0.82 | $ | 0.85 | $ | 3.33 | $ | 3.27 | ||
| Diluted | $ | 0.82 | $ | 0.85 | (2) | $ | 3.32 | $ | 3.26 | (2) |
| (1) | Core FFO is a non-GAAP financial measure. Please reference the Earnings Release for the quarter and year ended December 31, 2024 for the company's definition and explanation of how the company utilizes this metric. | |||||||||
| --- | --- | |||||||||
| (2) | During the quarter ended December 31, 2023, one tenant was reclassified to accrual basis for accounting purposes due to their improved qualitative and quantitative credit factors, which resulted in an increase of accrued rent in the amount of $5,573. Excluding such, Core FFO would have been $0.82 and $3.23 for the quarter and year ended December 31, 2023, respectively. |
| ADJUSTED FUNDS FROM OPERATIONS ("AFFO")(1) |
|---|
(dollars in thousands, except per share data)
(unaudited)
| Quarter Ended | Year Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31, | December 31, | |||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||
| Net earnings | $ | 97,894 | $ | 96,682 | $ | 396,835 | $ | 392,340 | ||||
| Total FFO adjustments | 54,795 | 55,030 | 213,666 | 196,734 | ||||||||
| Total Core FFO adjustments | 42 | 2,569 | 668 | 3,454 | ||||||||
| Core FFO | 152,731 | 154,281 | 611,169 | 592,528 | ||||||||
| Straight-line accrued rent, net of reserves | (302 | ) | (5,957 | ) | (294 | ) | (7,453 | ) | ||||
| Net capital lease rent adjustment | 58 | 75 | 222 | 319 | ||||||||
| Below-market rent amortization | (144 | ) | (82 | ) | (495 | ) | (431 | ) | ||||
| Stock based compensation expense | 2,775 | 2,592 | 11,816 | 10,846 | ||||||||
| Capitalized interest expense | (1,061 | ) | (1,912 | ) | (5,805 | ) | (4,286 | ) | ||||
| Total AFFO adjustments | 1,326 | (5,284 | ) | 5,444 | (1,005 | ) | ||||||
| AFFO | $ | 154,057 | $ | 148,997 | $ | 616,613 | $ | 591,523 | ||||
| AFFO per share: | ||||||||||||
| Basic | $ | 0.83 | $ | 0.82 | $ | 3.36 | $ | 3.26 | ||||
| Diluted | $ | 0.82 | $ | 0.82 | $ | 3.35 | $ | 3.26 | ||||
| (1) | AFFO is a non-GAAP financial measure. Please reference the Earnings Release for the quarter and year ended December 31, 2024 for the company's definition and explanation of how the company utilizes this metric. | |||||||||||
| --- | --- |
| OTHER INFORMATION |
|---|
(dollars in thousands)
(unaudited)
| Quarter Ended | Year Ended | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31, | December 31, | ||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||
| Rental income from operating leases(1) | $ | 212,565 | $ | 209,037 | $ | 846,653 | $ | 805,136 | |||||
| Earned income from direct financing leases(1) | $ | 115 | $ | 133 | $ | 468 | $ | 560 | |||||
| Percentage rent(1) | $ | 189 | $ | 241 | $ | 1,536 | $ | 1,631 | |||||
| Real estate expenses reimbursed from tenants(1) | $ | 5,479 | $ | 5,767 | $ | 18,811 | $ | 18,763 | |||||
| Real estate expenses | (11,142 | ) | (8,237 | ) | (32,317 | ) | (28,378 | ) | |||||
| Real estate expenses, net of tenant reimbursements | $ | (5,663 | ) | $ | (2,470 | ) | $ | (13,506 | ) | $ | (9,615 | ) | |
| Amortization of debt costs | $ | 1,455 | $ | 1,295 | $ | 5,993 | $ | 4,943 | |||||
| Scheduled debt principal amortization (excluding maturities) | $ | — | $ | — | $ | — | $ | 173 | (2) | ||||
| Non-real estate depreciation expense | $ | 43 | $ | 105 | $ | 370 | $ | 409 | |||||
| (1) | For the quarters ended December 31, 2024 and 2023, the aggregate of such amounts is $218,348 and $215,178, respectively, and $867,468 and $826,090, for the year ended December 31, 2024 and 2023, respectively, and is classified as rental income on the income statement summary. | ||||||||||||
| --- | --- | ||||||||||||
| (2) | In April 2023, NNN repaid the remaining mortgages payable principal balance of $9,774. | ||||||||||||
| EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION FOR REAL ESTATE ("EBITDA")(1) | |||||||||||||
| --- |
(dollars in thousands)
(unaudited)
| Quarter Ended | Year Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31, | December 31, | |||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||
| Net earnings | $ | 97,894 | $ | 96,682 | $ | 396,835 | $ | 392,340 | ||||
| Interest expense | 46,880 | 43,389 | 184,017 | 163,898 | ||||||||
| Depreciation and amortization | 63,194 | 60,079 | 249,681 | 238,625 | ||||||||
| Gain on disposition of real estate | (12,083 | ) | (7,263 | ) | (42,290 | ) | (47,485 | ) | ||||
| Impairment losses – real estate, net of recoveries | 3,724 | 2,315 | 6,632 | 5,990 | ||||||||
| EBITDA | $ | 199,609 | $ | 195,202 | $ | 794,875 | $ | 753,368 | ||||
| (1) | EBITDA is non-GAAP financial measure. Please reference the Earnings Release for the quarter and year ended December 31, 2024 for the company's definition and explanation of how the company utilizes this metric. | |||||||||||
| --- | --- |
| BALANCE SHEET SUMMARY |
|---|
(dollars in thousands)
(unaudited)
| December 31,<br>2023 | |||
|---|---|---|---|
| Assets: | |||
| Real estate portfolio, net of accumulated depreciation and amortization | 8,746,168 | $ | 8,535,851 |
| Cash and cash equivalents | 8,731 | 1,189 | |
| Restricted cash and cash held in escrow | 331 | 3,966 | |
| Receivables, net of allowance of 617 and 669, respectively | 2,975 | 3,649 | |
| Accrued rental income, net of allowance of 4,156 and 4,168, respectively | 34,005 | 34,611 | |
| Debt costs, net of accumulated amortization of 27,002 and 23,952, respectively | 8,958 | 3,243 | |
| Other assets | 71,560 | 79,459 | |
| Total assets | 8,872,728 | $ | 8,661,968 |
| Liabilities: | |||
| Line of credit payable | — | $ | 132,000 |
| Notes payable, net of unamortized discount and unamortized debt costs | 4,373,803 | 4,228,544 | |
| Accrued interest payable | 29,699 | 34,374 | |
| Other liabilities | 106,951 | 109,593 | |
| Total liabilities | 4,510,453 | 4,504,511 | |
| Total equity | 4,362,275 | 4,157,457 | |
| Total liabilities and equity | 8,872,728 | $ | 8,661,968 |
| Common shares outstanding | 187,540,929 | 182,474,770 | |
| Gross leasable area, Property Portfolio (square feet) | 36,557,000 | 35,966,000 |
All values are in US Dollars.
| DEBT SUMMARY |
|---|
As of December 31, 2024
(dollars in thousands)
(unaudited)
| Unsecured Debt | Principal | Principal,<br>Net of<br>Unamortized<br>Discount | Stated<br>Rate | Effective<br>Rate | Maturity <br>Date | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Line of credit payable | $ | — | $ | — | SOFR + 87.5bps | — | April 2028 | |||||
| Unsecured notes payable: | ||||||||||||
| 2025 | 400,000 | 399,900 | 4.000 | % | 4.029 | % | November 2025 | |||||
| 2026 | 350,000 | 349,128 | 3.600 | % | 3.733 | % | December 2026 | |||||
| 2027 | 400,000 | 399,490 | 3.500 | % | 3.548 | % | October 2027 | |||||
| 2028 | 400,000 | 398,778 | 4.300 | % | 4.388 | % | October 2028 | |||||
| 2030 | 400,000 | 399,286 | 2.500 | % | 2.536 | % | April 2030 | |||||
| 2033 | 500,000 | 489,579 | 5.600 | % | 5.905 | % | October 2033 | |||||
| 2034 | 500,000 | 494,112 | 5.500 | % | 5.662 | % | June 2034 | |||||
| 2048 | 300,000 | 296,219 | 4.800 | % | 4.890 | % | October 2048 | |||||
| 2050 | 300,000 | 294,561 | 3.100 | % | 3.205 | % | April 2050 | |||||
| 2051 | 450,000 | 442,228 | 3.500 | % | 3.602 | % | April 2051 | |||||
| 2052 | 450,000 | 440,282 | 3.000 | % | 3.118 | % | April 2052 | |||||
| Total | 4,450,000 | 4,403,563 | ||||||||||
| Total unsecured debt(1) | $ | 4,450,000 | $ | 4,403,563 | ||||||||
| Debt costs | $ | (43,820 | ) | |||||||||
| Accumulated amortization | 14,060 | |||||||||||
| Debt costs, net of accumulated amortization | (29,760 | ) | ||||||||||
| Notes payable, net of unamortized discount and <br> unamortized debt costs | $ | 4,373,803 |
(1) Unsecured debt has a weighted average interest rate of 4.1% and a weighted average maturity of 12.1 years.
| CREDIT METRICS (1) |
|---|
Ratings: Moody's Baa1; S&P BBB+
| 2020 | 2021 | 2022 | 2023 | 2024 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt / Total assets (gross book) | 34.4 | % | 39.9 | % | 40.4 | % | 42.0 | % | 40.5 | % | |||||
| Debt + preferred / Total assets (gross book) | 38.4 | % | 39.9 | % | 40.4 | % | 42.0 | % | 40.5 | % | |||||
| Debt / EBITDA (last quarter annualized) | 5.0 | 5.2 | 5.4 | 5.5 | 5.5 | ||||||||||
| Debt + preferred / EBITDA (last quarter annualized) | 5.6 | 5.2 | 5.4 | 5.5 | 5.5 | ||||||||||
| EBITDA / Interest expense (cash) | 4.6 | 4.7 | 4.7 | 4.5 | 4.2 | ||||||||||
| EBITDA / Fixed charges (cash) | 4.0 | 4.3 | 4.7 | 4.5 | 4.2 |
(1) Debt amounts used in calculations are net of cash balances.
| CREDIT FACILITY AND NOTES COVENANTS |
|---|
The following is a summary of key financial covenants for the company's unsecured credit facility and notes, as defined and calculated per the terms of the facility's credit agreement and the notes' governing documents, respectively, which are included in the company's filings with the Commission. These calculations, which are not based on U.S. GAAP measurements, are presented to investors to show that as of December 31, 2024, the company believes it is in compliance with the covenants.
| Key Covenants | Required | December 31, 2024 |
|---|---|---|
| Unsecured Bank Credit Facility: | ||
| Maximum leverage ratio | < 0.60 | 0.37 |
| Minimum fixed charge coverage ratio | > 1.50 | 4.28 |
| Maximum secured indebtedness ratio | < 0.40 | — |
| Unencumbered asset value ratio | > 1.67 | 2.70 |
| Unencumbered interest ratio | > 1.75 | 4.23 |
| Unsecured Notes: | ||
| Limitation on incurrence of total debt | ≤ 60% | 40.0% |
| Limitation on incurrence of secured debt | ≤ 40% | — |
| Debt service coverage ratio | ≥ 1.50 | 4.2 |
| Maintenance of total unencumbered assets | ≥ 150% | 250% |
| LONG-TERM DIVIDEND HISTORY |
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| PROPERTY ACQUISITIONS |
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(dollars in thousands)
| Year Ended December 31, | ||||||
|---|---|---|---|---|---|---|
| 2024 | 2023 | |||||
| Total dollars invested(1) | $ | 565,416 | $ | 819,710 | ||
| Number of Properties | 75 | 165 | ||||
| Gross leasable area (square feet)(2) | 1,486,000 | 1,281,000 | ||||
| Cap rate (3) | 7.7 | % | 7.3 | % | ||
| Weighted average lease term | 18.5 | 18.8 | ||||
| (1) | Includes dollars invested in projects under construction or tenant improvements for each respective year. | |||||
| --- | --- | |||||
| (2) | Includes additional square footage from completed construction on existing Properties. | |||||
| (3) | The cap rate is a weighted average, calculated as the initial cash annual base rent divided by the total purchase price of the Properties. | |||||
| PROPERTY DISPOSITIONS | ||||||
| --- |
(dollars in thousands)
| Year Ended December 31, | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2024 | 2023 | |||||||||||||||
| Occupied | Vacant | Total | Occupied | Vacant | Total | |||||||||||
| Number of properties | 27 | 14 | 41 | 24 | 21 | 45 | ||||||||||
| Gross leasable area (square feet) | 640,000 | 209,000 | 849,000 | 177,000 | 116,000 | 293,000 | ||||||||||
| Acquisition costs | $ | 117,556 | $ | 30,276 | $ | 147,832 | $ | 69,790 | $ | 25,036 | $ | 94,826 | ||||
| Net book value | $ | 84,212 | $ | 22,294 | $ | 106,506 | $ | 55,098 | $ | 13,133 | $ | 68,231 | ||||
| Net sale proceeds | $ | 115,923 | $ | 32,735 | $ | 148,658 | $ | 97,822 | $ | 17,894 | $ | 115,716 | ||||
| Cap rate(1) | 7.3 | % | — | 7.3 | % | 5.9 | % | — | 5.9 | % | ||||||
| (1) | The cap rate is a weighted average, calculated as the cash annual base rent divided by the total gross proceeds received for the properties. | |||||||||||||||
| --- | --- |
| LEASE EXPIRATIONS(1) | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| % of<br>Total(2) | # of<br>Properties | Gross Leasable<br>Area (3) | % of<br>Total(2) | # of<br>Properties | Gross Leasable<br>Area (3) | ||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 2025 | 3.2% | 132 | 874,000 | 2031 | 7.0% | 184 | 2,655,000 | ||||
| 2026 | 4.2% | 204 | 1,981,000 | 2032 | 5.1% | 183 | 1,804,000 | ||||
| 2027 | 7.6% | 231 | 3,401,000 | 2033 | 4.6% | 134 | 1,398,000 | ||||
| 2028 | 5.8% | 255 | 2,306,000 | 2034 | 5.8% | 182 | 2,398,000 | ||||
| 2029 | 4.6% | 143 | 2,083,000 | Thereafter | 47.7% | 1,711 | 14,840,000 | ||||
| 2030 | 4.4% | 154 | 2,086,000 | ||||||||
| (1) | As of December 31, 2024, the weighted average remaining lease term is 9.9 years. | ||||||||||
| --- | --- | ||||||||||
| (2) | Based on the annual base rent of $860,562,000, which is the annualized base rent for all leases in place as of December 31, 2024. | ||||||||||
| (3) | Square feet. |
| TOP 20 LINES OF TRADE | |||||
|---|---|---|---|---|---|
| As of December 31, 2024 | As of December 31, 2023 | ||||
| --- | --- | --- | --- | --- | --- |
| Lines of Trade | % of Total(1) | # of Properties | % of Total(2) | # of Properties | |
| 1. | Convenience stores | 17.0% | 678 | 16.4% | 661 |
| 2. | Automotive service | 16.9% | 641 | 15.6% | 629 |
| 3. | Restaurants – limited service | 8.4% | 618 | 8.5% | 610 |
| 4. | Restaurants – full service | 7.8% | 399 | 8.7% | 417 |
| 5. | Family entertainment centers | 7.2% | 98 | 6.4% | 94 |
| 6. | Recreational vehicle dealers, parts and accessories | 5.1% | 70 | 4.6% | 62 |
| 7. | Theaters | 4.0% | 33 | 4.1% | 33 |
| 8. | Health and fitness | 3.9% | 31 | 4.5% | 33 |
| 9. | Equipment rental | 3.2% | 105 | 3.0% | 99 |
| 10. | Wholesale clubs | 2.4% | 13 | 2.5% | 13 |
| 11. | Automotive parts | 2.4% | 139 | 2.5% | 144 |
| 12. | Drug stores | 2.2% | 61 | 2.4% | 66 |
| 13. | Home improvement | 2.1% | 48 | 2.2% | 50 |
| 14. | Medical service providers | 1.7% | 82 | 1.7% | 79 |
| 15. | General merchandise | 1.4% | 71 | 1.4% | 72 |
| 16. | Furniture | 1.3% | 45 | 2.0% | 75 |
| 17. | Pet supplies and services | 1.3% | 52 | 1.1% | 51 |
| 18. | Consumer electronics | 1.3% | 16 | 1.4% | 17 |
| 19. | Travel plazas | 1.2% | 24 | 1.3% | 24 |
| 20. | Home furnishings | 1.1% | 12 | 1.3% | 13 |
| Other | 8.1% | 332 | 8.4% | 290 | |
| Total | 100.0% | 3,568 | 100.0% | 3,532 | |
| As a percentage of annual base rent, which is the annualized base rent for all leases in place. | |||||
| --- | --- | --- | |||
| (1) | $860,562,000 as of December 31, 2024. | ||||
| (2) | $818,749,000 as of December 31, 2023. | ||||
| TOP 10 STATES | |||||
| --- | |||||
| State | % of Total(1) | State | % of Total(1) | ||
| --- | --- | --- | --- | --- | --- |
| 1. | Texas | 18.8% | 6. | Tennessee | 3.8% |
| 2. | Florida | 8.7% | 7. | North Carolina | 3.7% |
| 3. | Illinois | 5.1% | 8. | Indiana | 3.6% |
| 4. | Georgia | 4.5% | 9. | Arizona | 3.2% |
| 5. | Ohio | 4.2% | 10. | Virginia | 3.2% |
| As a percentage of annual base rent, which is the annualized base rent for all leases in place. | |||||
| --- | --- | --- | |||
| (1) | $860,562,000 as of December 31, 2024. |
| PORTFOLIO BY REGION |
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As a percentage of annual base rent - December 31, 2024
| Based on the annual base rent of $860,562,000, which is the annualized base rent for all leases in place as of December 31, 2024. |
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| TOP TENANTS |
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Creditworthy Retailers
- 14.4% of annual base rent is from tenants with investment grade rated debt
- 72.2% of annual base rent is from tenants that are publicly traded and/or have rated debt
- Top 20 tenants (48.0% of annual base rent) operate an average of 1,533 stores each
Top 20 Tenants
| Tenant | # of <br>Properties | % of <br>Total(1) | |
|---|---|---|---|
| 1. | 7-Eleven | 146 | 4.5% |
| 2. | Mister Car Wash | 121 | 4.1% |
| 3. | Dave & Buster's | 34 | 3.8% |
| 4. | Camping World | 48 | 3.8% |
| 5. | GPM Investments (convenience stores) | 148 | 2.8% |
| 6. | Flynn Restaurant Group (Taco Bell/Arby's) | 204 | 2.7% |
| 7. | AMC Theatres | 20 | 2.6% |
| 8. | LA Fitness | 26 | 2.5% |
| 9. | BJ's Wholesale Club | 13 | 2.4% |
| 10. | Mavis Tire Express Services | 140 | 2.2% |
| 11. | Couche Tard (Pantry) | 91 | 2.2% |
| 12. | Kent Distributors (convenience stores) | 38 | 2.1% |
| 13. | Chuck E. Cheese | 53 | 1.8% |
| 14. | Walgreens | 49 | 1.8% |
| 15. | Sunoco | 53 | 1.8% |
| 16. | Casey's General Stores (convenience stores) | 62 | 1.7% |
| 17. | United Rentals | 49 | 1.6% |
| 18. | Tidal Wave Auto Spa | 35 | 1.3% |
| 19. | Super Star Car Wash | 33 | 1.3% |
| 20. | Lifetime Fitness | 3 | 1.3% |
| (1) | Based on the annual base rent of $860,562,000, which is the annualized base rent for all leases in place as of December 31, 2024. | ||
| --- | --- |
| SAME STORE RENTAL INCOME |
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(dollars in thousands)
| Properties (Cash Basis) (1) | |||
|---|---|---|---|
| Number of properties | 3,327 | ||
| Year ended December 31, 2024 (2) | $ | 758,489 | |
| Year ended December 31, 2023 (2) | $ | 759,119 | |
| Change (in dollars) | $ | (630 | ) |
| Change (percent) (3) | (0.1 | )% | |
| (1) | Includes all properties owned for current and prior year period excluding any properties under development or re-development. | ||
| --- | --- | ||
| (2) | Excludes any rent deferral payments from the COVID-19 rent deferral lease amendments. | ||
| (3) | Excluding impact of Frisch's Restaurants and Badcock Furniture bankruptcy, change would have been 0.8% | ||
| LEASING DATA | |||
| --- |
(dollars in thousands)
| Year Ended December 31, 2024 | Renewals With<br>Same Tenant(1) | Vacancy Re-Lease<br>To New Tenant | Releasing<br>Totals | |||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Number of leases | 94 | 57 | 151 | |||||||
| New cash rents | $ | 25,400 | $ | 8,216 | $ | 33,616 | ||||
| Prior cash rents | $ | 25,924 | $ | 11,868 | $ | 37,792 | (2) | |||
| Recovery rate | 98.0 | % | 69.2 | % | 89.0 | % | ||||
| Tenant improvements | $ | 2,900 | $ | 5,897 | $ | 8,797 | ||||
| (1) | Long-term renewal rate for the period of 2010 through 2024 was 83.2%. | |||||||||
| --- | --- | |||||||||
| (2) | Represents 4.4% of total annualized base rent as of December 31, 2024. |
| OTHER PROPERTY PORTFOLIO DATA |
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As of December 31, 2024
Tenant Financials
| # of <br>Properties | % of Annual<br>Base Rent (1) | |||
|---|---|---|---|---|
| Property level financial information | 2,982 | 82% | ||
| Tenant corporate financials | 2,773 | 79% | ||
| Rent Increases | % of Annual Base Rent (1) | |||
| --- | --- | --- | --- | --- |
| Annual | Five Year | Other | Total | |
| CPI | 37% | 44% | 1% | 82% |
| Fixed | 2% | 11% | 1% | 14% |
| No increases | — | — | 4% | 4% |
| 39% | 55% | 6% | 100% |
Lease Structure - as a percentage of the company's annual base rent(1)
- 92.9% is from triple net leases
- 95.4% is from triple net leases or double net leases (with roof warranty)
- 30.8% is from master leases
- 98.1% is from leases containing future lease renewal options
- 0.5% is from leases containing purchase options
| (1) | Based on the annual base rent of $860,562,000, which is the annualized base rent for all leases in place as of December 31, 2024. |
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| EARNINGS GUIDANCE | |
| --- |
Guidance is based on current plans and assumptions and subject to risks and uncertainties more fully described in this press release and the company's reports filed with the Commission.
| 2025 Guidance | |
|---|---|
| Net earnings per share excluding any gains on disposition of real <br> estate, impairment charges, and executive retirement costs | $1.97 - $2.02 per share |
| Real estate depreciation and amortization per share | $1.36 per share |
| Core FFO per share | $3.33 - $3.38 per share |
| AFFO per share | $3.39 - $3.44 per share |
| General and administrative expenses | $47 - $48 Million |
| Real estate expenses, net of tenant reimbursements | $15 - $16 Million |
| Acquisition volume | $500 - $600 Million |
| Disposition volume | $80 - $120 Million |