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): May 2, 2023
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)
National Retail Properties, Inc.
(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 May 2, 2023, NNN REIT, Inc. (the "Company") issued a press release announcing its results of operations and financial condition for the quarter ended March 31, 2023. The press release is attached hereto as Exhibit 99.1. The press release is 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”) 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 May 2, 2023, 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: May 2, 2023 | By: | /s/ Kevin B. Habicht |
| Kevin B. Habicht | ||
| Executive Vice President and Chief Financial Officer |
EX-99
Exhibit 99.1
NEWS RELEASE
For information contact:
Kevin B. Habicht
Chief Financial Officer
| (407) 265-7348 | FOR IMMEDIATE RELEASE |
|---|
May 2, 2023
FIRST QUARTER 2023 OPERATING RESULTS
ANNOUNCED BY NNN REIT, INC.
Orlando, Florida, May 2, 2023 – NNN REIT, Inc. (NYSE: NNN), a real estate investment trust, today announced its operating results for the quarter ended March 31, 2023. Highlights include:
Operating Results:
• Revenues and net earnings, FFO, Core FFO and AFFO available to common stockholders and diluted per share amounts:
| Quarter Ended<br>March 31, | ||||||
|---|---|---|---|---|---|---|
| 2023 | 2022 | |||||
| (dollars in thousands, <br>except per share data) | ||||||
| Revenues | $ | 204,108 | $ | 190,279 | ||
| Net earnings available to common stockholders | $ | 90,167 | $ | 81,372 | ||
| Net earnings per common share | $ | 0.50 | $ | 0.46 | ||
| FFO available to common stockholders | $ | 145,549 | $ | 131,593 | ||
| FFO per common share | $ | 0.80 | $ | 0.75 | ||
| Core FFO available to common stockholders | $ | 145,972 | $ | 135,187 | ||
| Core FFO per common share | $ | 0.80 | $ | 0.77 | ||
| AFFO available to common stockholders | $ | 148,166 | (1) | $ | 138,721 | (1) |
| AFFO per common share | $ | 0.82 | (1) | $ | 0.79 | (1) |
| (1) | Amounts include $9 and $1,780 of net straight-line accrued rent from net rent deferral repayments from the COVID-19 rent deferral lease amendments for the quarters ended March 31, 2023 and 2022, respectively. Excluding such would have no affect on AFFO per common share for the quarter ended March 31, 2023, and would have resulted in AFFO per common share of $0.78 for the quarter ended March 31, 2022. | |||||
| --- | --- |
First Quarter 2023 Highlights:
• FFO per share increased 6.7% over prior year results
• Core FFO per share increased 3.9% over prior year results
• AFFO per share increased 3.8% over prior year results
• Maintained high occupancy levels at 99.4%, with a weighted average remaining lease term of 10.3 years, at March 31, 2023 as compared to 99.4% at December 31, 2022 and 99.2% at March 31, 2022
• $156.2 million in property investments, including the acquisition of 43 properties with an aggregate gross leasable area of approximately 275,000 square feet at an initial cash cap rate of 7.0%
• Sold six properties for $11.9 million, producing $6.3 million of gains on sales at a cap rate of 6.6%
• Raised $16.9 million net proceeds from the issuance of 367,569 common shares
• Maintained sector leading 12.9 year weighted average debt maturity for unsecured debt
Steve Horn, Chief Executive Officer, commented: "NNN had a solid start to 2023 with just over $155 million in property acquisitions with an initial cap rate of seven percent and a 19 year weighted average lease term. Additionally, NNN continued to maintain high occupancy levels in the portfolio. The 3.9 percent Core FFO growth over the prior year results coupled with wider investment cap rates on acquisitions and steady balance sheet management, allows NNN to strive to provide long-term shareholder value as we progress in 2023."
NNN REIT invests primarily in high-quality retail properties subject generally to long-term, net leases. As of March 31, 2023, the company owned 3,449 properties in 49 states with a gross leasable area of approximately 35.3 million square feet and with a weighted average remaining lease term of 10.3 years. NNN is one of only three publicly traded REITs to have increased annual dividends for 33 or more consecutive years. For more information on the company, visit www.nnnreit.com.
Management will hold a conference call on May 2, 2023, at 10:30 a.m. ET to review its results of operations. 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," "in position," "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 REIT, and the potential impacts of COVID-19, or any 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 (i) Annual Report on Form 10-K for the year ended December 31, 2022 and (ii) Quarterly Report on Form 10-Q for the quarter ended March 31, 2023. 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.
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 or commercial mortgage residual interests, preferred stock redemption costs, executive retirement costs, loss on early extinguishment of debt 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.
NNN REIT, Inc.
(dollars in thousands, except per share data)
(unaudited)
| Quarter Ended<br>March 31, | ||||||
|---|---|---|---|---|---|---|
| 2023 | 2022 | |||||
| Income Statement Summary | ||||||
| Revenues: | ||||||
| Rental income | $ | 203,630 | $ | 189,763 | ||
| Interest and other income from real estate transactions | 478 | 516 | ||||
| 204,108 | 190,279 | |||||
| Operating expenses: | ||||||
| General and administrative | 12,251 | 11,042 | ||||
| Real estate | 6,846 | 7,198 | ||||
| Depreciation and amortization | 59,148 | 52,680 | ||||
| Leasing transaction costs | 75 | 88 | ||||
| Impairment losses – real estate, net of recoveries | 2,640 | 1,632 | ||||
| Executive retirement costs | 423 | 3,594 | ||||
| 81,383 | 76,234 | |||||
| Gain on disposition of real estate | 6,300 | 3,992 | ||||
| Earnings from operations | 129,025 | 118,037 | ||||
| Other expenses (revenues): | ||||||
| Interest and other income | (33 | ) | (35 | ) | ||
| Interest expense | 38,891 | 36,699 | ||||
| 38,858 | 36,664 | |||||
| Net earnings | 90,167 | 81,373 | ||||
| Earnings attributable to noncontrolling interests | — | (1 | ) | |||
| Net earnings available to common stockholders | $ | 90,167 | $ | 81,372 | ||
| Weighted average common shares outstanding: | ||||||
| Basic | 180,845,503 | 174,772,243 | ||||
| Diluted | 181,434,345 | 174,911,213 | ||||
| Net earnings per share available to common stockholders: | ||||||
| Basic | $ | 0.50 | $ | 0.46 | ||
| Diluted | $ | 0.50 | $ | 0.46 |
NNN REIT, Inc.
(dollars in thousands, except per share data)
(unaudited)
| Quarter Ended<br>March 31, | ||||||
|---|---|---|---|---|---|---|
| 2023 | 2022 | |||||
| Funds From Operations (FFO) Reconciliation: | ||||||
| Net earnings available to common stockholders | $ | 90,167 | $ | 81,372 | ||
| Real estate depreciation and amortization | 59,042 | 52,581 | ||||
| Gain on disposition of real estate | (6,300 | ) | (3,992 | ) | ||
| Impairment losses – depreciable real estate, net of recoveries | 2,640 | 1,632 | ||||
| Total FFO adjustments | 55,382 | 50,221 | ||||
| FFO available to common stockholders | $ | 145,549 | $ | 131,593 | ||
| FFO per common share: | ||||||
| Basic | $ | 0.80 | $ | 0.75 | ||
| Diluted | $ | 0.80 | $ | 0.75 | ||
| Core Funds From Operations (Core FFO) Reconciliation: | ||||||
| Net earnings available to common stockholders | $ | 90,167 | $ | 81,372 | ||
| Total FFO adjustments | 55,382 | 50,221 | ||||
| FFO available to common stockholders | 145,549 | 131,593 | ||||
| Executive retirement costs | 423 | 3,594 | ||||
| Total Core FFO adjustments | 423 | 3,594 | ||||
| Core FFO available to common stockholders | $ | 145,972 | $ | 135,187 | ||
| Core FFO per common share: | ||||||
| Basic | $ | 0.81 | $ | 0.77 | ||
| Diluted | $ | 0.80 | $ | 0.77 |
NNN REIT, Inc.
(dollars in thousands, except per share data)
(unaudited)
| Quarter Ended<br>March 31, | ||||||||
|---|---|---|---|---|---|---|---|---|
| 2023 | 2022 | |||||||
| Adjusted Funds From Operations (AFFO) Reconciliation: | ||||||||
| Net earnings available to common stockholders | $ | 90,167 | $ | 81,372 | ||||
| Total FFO adjustments | 55,382 | 50,221 | ||||||
| Total Core FFO adjustments | 423 | 3,594 | ||||||
| Core FFO available to common stockholders | 145,972 | 135,187 | ||||||
| Straight-line accrued rent, net of reserves | (469 | ) | 1,096 | |||||
| Net capital lease rent adjustment | 79 | 75 | ||||||
| Below-market rent amortization | (112 | ) | (140 | ) | ||||
| Stock based compensation expense | 3,101 | 2,601 | ||||||
| Capitalized interest expense | (405 | ) | (98 | ) | ||||
| Total AFFO adjustments | 2,194 | 3,534 | ||||||
| AFFO available to common stockholders | $ | 148,166 | (1) | $ | 138,721 | (1) | ||
| AFFO per common share: | ||||||||
| Basic | $ | 0.82 | (1) | $ | 0.79 | (1) | ||
| Diluted | $ | 0.82 | (1) | $ | 0.79 | (1) | ||
| Other Information: | ||||||||
| Rental income from operating leases(2) | $ | 198,183 | $ | 184,311 | ||||
| Earned income from direct financing leases(2) | $ | 144 | $ | 151 | ||||
| Percentage rent(2) | $ | 763 | $ | 701 | ||||
| Real estate expense reimbursement from tenants(2) | $ | 4,540 | $ | 4,600 | ||||
| Real estate expenses | (6,846 | ) | (7,198 | ) | ||||
| Real estate expenses, net of tenant reimbursements | $ | (2,306 | ) | $ | (2,598 | ) | ||
| Amortization of debt costs | $ | 1,199 | $ | 1,171 | ||||
| Scheduled debt principal amortization (excluding maturities) | $ | 173 | (3) | $ | 165 | |||
| Non-real estate depreciation expense | $ | 109 | $ | 102 | ||||
| (1) | Amounts include $9 and $1,780 of net straight-line accrued rent from net rent deferral repayments from the COVID-19 rent deferral lease amendments for the quarters ended March 31, 2023 and 2022, respectively. Excluding such had no affect on AFFO per common share for the quarter ended March 31, 2023, and would have resulted in AFFO per common share of $0.78 for the quarter ended March 31, 2022. | |||||||
| --- | --- | |||||||
| (2) | For the quarters ended March 31, 2023 and 2022, the aggregate of such amounts is $203,630 and $189,763, respectively, and is classified as rental income on the income statement summary. | |||||||
| (3) | In April 2023, NNN repaid the remaining mortgages payable principal balance of $9,774 which was due in July 2023. No penalty was incurred as a result of this repayment. |
NNN REIT, Inc.
2023 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.
| 2023 Guidance | |
|---|---|
| Net earnings per common share excluding any gains on disposition <br> of real estate, impairment charges, and executive retirement costs | $1.87 - $1.93 per share |
| Real estate depreciation and amortization per share | $1.27 per share |
| Core FFO per share | $3.14 - $3.20 per share |
| AFFO per share | $3.19 - $3.25 per share |
| General and administrative expenses | $43 - $45 Million |
| Real estate expenses, net of tenant reimbursements | $8 - $10 Million |
| Acquisition volume | $500 - $600 Million |
| Disposition volume | $100 - $120 Million |
NNN REIT, Inc.
(dollars in thousands)
(unaudited)
| December 31,<br>2022 | |||
|---|---|---|---|
| Balance Sheet Summary | |||
| Assets: | |||
| Real estate portfolio, net of accumulated depreciation and amortization | 8,111,622 | $ | 8,020,814 |
| Cash and cash equivalents | 3,240 | 2,505 | |
| Restricted cash and cash held in escrow | 2,086 | 4,273 | |
| Receivables, net of allowance of 701 and 708, respectively | 2,568 | 3,612 | |
| Accrued rental income, net of allowance of 3,851 and 3,836, respectively | 28,145 | 27,795 | |
| Debt costs, net of accumulated amortization of 22,235 and 21,663, respectively | 4,830 | 5,352 | |
| Other assets | 85,623 | 81,694 | |
| Total assets | 8,238,114 | $ | 8,146,045 |
| Liabilities: | |||
| Line of credit payable | 209,000 | $ | 166,200 |
| Mortgages payable, including unamortized premium and net of unamortized debt cost | 9,774 | 9,964 | |
| Notes payable, net of unamortized discount and unamortized debt costs | 3,740,945 | 3,739,890 | |
| Accrued interest payable | 58,218 | 23,826 | |
| Other liabilities | 85,305 | 82,663 | |
| Total liabilities | 4,103,242 | 4,022,543 | |
| Stockholders' equity of NNN | 4,134,872 | 4,123,502 | |
| Total liabilities and equity | 8,238,114 | $ | 8,146,045 |
| Common shares outstanding | 182,087,429 | 181,424,670 | |
| Gross leasable area, Property Portfolio (square feet) | 35,251,000 | 35,010,000 |
All values are in US Dollars.
NNN REIT, Inc.
Debt Summary
As of March 31, 2023
(dollars in thousands)
(unaudited)
| Unsecured Debt | Principal | Principal,<br>Net of<br>Unamortized<br>Discount | Stated<br>Rate | Effective<br>Rate | Maturity Date | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Line of credit payable | $ | 209,000 | $ | 209,000 | SOFR + <br>87.5 bps | 5.675 | % | June 2025 | ||||
| Unsecured notes payable: | ||||||||||||
| 2024 | 350,000 | 349,900 | 3.900 | % | 3.924 | % | June 2024 | |||||
| 2025 | 400,000 | 399,710 | 4.000 | % | 4.029 | % | November 2025 | |||||
| 2026 | 350,000 | 348,401 | 3.600 | % | 3.733 | % | December 2026 | |||||
| 2027 | 400,000 | 399,195 | 3.500 | % | 3.548 | % | October 2027 | |||||
| 2028 | 400,000 | 398,278 | 4.300 | % | 4.388 | % | October 2028 | |||||
| 2030 | 400,000 | 399,069 | 2.500 | % | 2.536 | % | April 2030 | |||||
| 2048 | 300,000 | 296,077 | 4.800 | % | 4.890 | % | October 2048 | |||||
| 2050 | 300,000 | 294,322 | 3.100 | % | 3.205 | % | April 2050 | |||||
| 2051 | 450,000 | 441,926 | 3.500 | % | 3.602 | % | April 2051 | |||||
| 2052 | 450,000 | 439,896 | 3.000 | % | 3.118 | % | April 2052 | |||||
| Total | 3,800,000 | 3,766,774 | ||||||||||
| Total unsecured debt(1) | $ | 4,009,000 | $ | 3,975,774 | ||||||||
| Debt costs | $ | (38,145 | ) | |||||||||
| Accumulated amortization | 12,316 | |||||||||||
| Debt costs, net of accumulated amortization | (25,829 | ) | ||||||||||
| Notes payable, net of unamortized discount and <br> unamortized debt costs | $ | 3,740,945 | ||||||||||
| (1) | Unsecured debt has a weighted average interest rate of 3.8% and a weighted average maturity of 12.9 years. | |||||||||||
| --- | --- | |||||||||||
| Mortgages Payable | Principal<br>Balance | Interest<br>Rate | Maturity Date | |||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | |||||
| Mortgage(1) (2) | $ | 9,774 | 5.230 | % | July 2023 | |||||||
| Debt costs | (147 | ) | ||||||||||
| Accumulated amortization | 147 | |||||||||||
| Debt costs, net of accumulated amortization | — | |||||||||||
| Mortgages payable, including unamortized<br> premium and net of unamortized debt costs | $ | 9,774 | ||||||||||
| (1) | Includes unamortized premium | |||||||||||
| --- | --- | |||||||||||
| (2) | In April 2023, NNN repaid the remaining mortgages payable principal balance of $9,774 which was due in July 2023. No penalty was incurred as a result of this repayment. |
As of March 31, 2023, Debt / EBITDA based on current quarter EBITDA annualized is 5.3x.
NNN REIT, Inc.
Debt Summary – Continued
As of March 31, 2023
(unaudited)
Credit Facility and Note 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 March 31, 2023, the company believes it is in compliance with the covenants.
| Unsecured Credit Facility Key Covenants | Required | March 31, 2023 |
|---|---|---|
| Maximum leverage ratio | < 0.60 | 0.36 |
| Minimum fixed charge coverage ratio | > 1.50 | 4.78 |
| Maximum secured indebtedness ratio | < 0.40 | 0.001 |
| Unencumbered asset value ratio | > 1.67 | 2.79 |
| Unencumbered interest ratio | > 1.75 | 4.82 |
| Unsecured Notes Key Covenants | Required | March 31, 2023 |
| Limitation on incurrence of total debt | ≤ 60% | 39.8% |
| Limitation on incurrence of secured debt | ≤ 40% | 0.1% |
| Debt service coverage ratio | ≥ 1.50 | 4.7 |
| Maintenance of total unencumbered assets | ≥ 150% | 251% |
NNN REIT, Inc.
Property Portfolio
Top 20 Lines of Trade
| As of March 31, | |||
|---|---|---|---|
| Lines of Trade | 2023(1) | 2022(2) | |
| 1. | Convenience stores | 16.3% | 17.5% |
| 2. | Automotive service | 14.4% | 12.6% |
| 3. | Restaurants – full service | 9.0% | 9.7% |
| 4. | Restaurants – limited service | 8.9% | 9.2% |
| 5. | Family entertainment centers | 5.8% | 6.2% |
| 6. | Health and fitness | 4.8% | 5.0% |
| 7. | Theaters | 4.3% | 4.4% |
| 8. | Recreational vehicle dealers, parts and accessories | 4.1% | 4.1% |
| 9. | Equipment rental | 3.1% | 3.1% |
| 10. | Automotive parts | 2.6% | 3.0% |
| 11. | Wholesale clubs | 2.6% | 2.4% |
| 12. | Drug stores | 2.6% | 1.2% |
| 13. | Home improvement | 2.3% | 2.4% |
| 14. | Furniture | 2.1% | 2.4% |
| 15. | Medical service providers | 1.9% | 2.0% |
| 16. | General merchandise | 1.5% | 1.6% |
| 17. | Home furnishings | 1.4% | 1.5% |
| 18. | Consumer electronics | 1.4% | 1.5% |
| 19. | Travel plazas | 1.3% | 1.5% |
| 20. | Automobile auctions, wholesale | 1.2% | 1.3% |
| Other | 8.4% | 7.4% | |
| Total | 100.0% | 100.0% |
Top 10 States
| State | % of <br>Total(1) | State | % of <br>Total(1) | ||
|---|---|---|---|---|---|
| 1. | Texas | 17.0% | 6. | North Carolina | 4.0% |
| 2. | Florida | 8.8% | 7. | Indiana | 3.8% |
| 3. | Illinois | 5.3% | 8. | Tennessee | 3.8% |
| 4. | Ohio | 5.1% | 9. | Virginia | 3.5% |
| 5. | Georgia | 4.6% | 10. | California | 3.5% |
| As a percentage of annual base rent, which is the annualized base rent for all leases in place. | |||||
| --- | --- | --- | |||
| (1) | $781,909,000 as of March 31, 2023. | ||||
| (2) | $732,042,000 as of March 31, 2022. |
NNN REIT, Inc.
Property Portfolio – Continued
Top 20 Tenants
| Tenant | # of <br>Properties | % of <br>Total(1) | |
|---|---|---|---|
| 1. | 7-Eleven | 138 | 4.6% |
| 2. | Mister Car Wash | 121 | 4.3% |
| 3. | Camping World | 47 | 3.9% |
| 4. | LA Fitness | 30 | 3.4% |
| 5. | GPM Investments (Convenience Stores) | 152 | 3.1% |
| 6. | Flynn Restaurant Group (Taco Bell/Arby's) | 204 | 2.9% |
| 7. | Dave & Busters | 28 | 2.9% |
| 8. | AMC Theatre | 20 | 2.8% |
| 9. | BJ's Wholesale Club | 13 | 2.6% |
| 10. | Couche Tard (Pantry) | 91 | 2.3% |
| 11. | Mavis Tire Express Services | 134 | 2.2% |
| 12. | Sunoco | 61 | 2.1% |
| 13. | Walgreens | 49 | 2.0% |
| 14. | Chuck-E-Cheese | 53 | 1.9% |
| 15. | United Rentals | 52 | 1.8% |
| 16. | Frisch's Restaurants | 68 | 1.7% |
| 17. | Fikes (Convenience Stores) | 59 | 1.6% |
| 18. | Life Time Fitness | 3 | 1.4% |
| 19. | Best Buy | 16 | 1.4% |
| 20. | Bob Evans | 106 | 1.4% |
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) | ||
|---|---|---|---|---|---|---|---|
| 2023 | 0.9% | 55 | 500,000 | 2029 | 3.0% | 85 | 1,093,000 |
| 2024 | 2.8% | 88 | 1,408,000 | 2030 | 3.5% | 107 | 1,207,000 |
| 2025 | 5.4% | 188 | 2,011,000 | 2031 | 7.7% | 187 | 2,711,000 |
| 2026 | 5.1% | 217 | 2,152,000 | 2032 | 6.3% | 220 | 2,352,000 |
| 2027 | 8.6% | 240 | 3,637,000 | 2033 | 5.1% | 141 | 1,440,000 |
| 2028 | 5.5% | 201 | 1,996,000 | Thereafter | 46.1% | 1,698 | 14,512,000 |
| (1) | Based on the annual base rent of $781,909,000, which is the annualized base rent for all leases in place as of March 31, 2023. | ||||||
| --- | --- | ||||||
| (2) | As of March 31, 2023, the weighted average remaining lease term is 10.3 years. | ||||||
| (3) | Square feet. |
NNN REIT, Inc.
Rent Deferral Lease Amendments
The following table outlines the rent deferred and corresponding scheduled repayment of the COVID-19 rent deferral lease amendments executed as of March 31, 2023 (dollars in thousands):
| Deferred | Scheduled Repayment | |||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Accrual<br>Basis | Cash<br>Basis | Total | % of<br>Total | Accrual<br>Basis | Cash<br>Basis | Total | % of<br>Total | Cumulative<br>Total | ||||||||||||||
| 2020 | $ | 33,594 | $ | 18,351 | $ | 51,945 | 91.7 | % | $ | 3,239 | $ | 20 | $ | 3,259 | 5.8 | % | 5.8 | % | ||||
| 2021 | 990 | 3,732 | 4,722 | 8.3 | % | 25,935 | 5,841 | 31,776 | 56.1 | % | 61.9 | % | ||||||||||
| 2022 | — | — | — | — | 5,391 | 9,108 | 14,499 | 25.6 | % | 87.5 | % | |||||||||||
| 2023 | Q1 | — | — | — | — | 9 | 1,697 | 1,706 | 3.1 | % | 90.6 | % | ||||||||||
| Q2 | — | — | — | — | 10 | 537 | 547 | 1.0 | % | 91.6 | % | |||||||||||
| Q3 | — | — | — | — | — | 536 | 536 | 0.9 | % | 92.5 | % | |||||||||||
| Q4 | — | — | — | — | — | 536 | 536 | 0.9 | % | 93.4 | % | |||||||||||
| — | — | — | — | 19 | 3,306 | 3,325 | 5.9 | % | 93.4 | % | ||||||||||||
| 2024 | Q1 | — | — | — | — | — | 476 | 476 | 0.8 | % | 94.2 | % | ||||||||||
| Q2 | — | — | — | — | — | 476 | 476 | 0.8 | % | 95.0 | % | |||||||||||
| Q3 | — | — | — | — | — | 476 | 476 | 0.8 | % | 95.8 | % | |||||||||||
| Q4 | — | — | — | — | — | 476 | 476 | 0.9 | % | 96.7 | % | |||||||||||
| — | — | — | — | — | 1,904 | 1,904 | 3.3 | % | 96.7 | % | ||||||||||||
| 2025 | — | — | — | — | — | 1,904 | 1,904 | 3.3 | % | 100.0 | % | |||||||||||
| $ | 34,584 | $ | 22,083 | $ | 56,667 | $ | 34,584 | $ | 22,083 | $ | 56,667 |