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Real Estate (Tables) | 12 Months Ended
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Dec. 31, 2019
Real Estate [Abstract] |
Classification of Investment Property Leases | The following outlines key information for NNN’s leases at December 31, 2019:
Lease classification: |
Operating | 3,143 |
Direct financing | 6 |
Weighted average remaining lease term (years) | 11.2 |
Summary of Real Estate Subject to Operating Leases | Real estate subject to operating leases consisted of the following at December 31 (dollars in thousands):
| 2019 |  | 2018
Land and improvements (1) | $ | 2,492,984 |  |  | $ | 2,369,014 |
Buildings and improvements | 5,917,525 |  |  | 5,470,968 |
Leasehold interests | 355 |  |  | 3,630 |
| 8,410,864 |  |  | 7,843,612 |
Less accumulated depreciation and amortization | (1,148,277 | ) |  | (1,006,183 | )
| 7,262,587 |  |  | 6,837,429 |
Work in progress - improvements | 27,438 |  |  | 8,017 |
| $ | 7,290,025 |  |  | $ | 6,845,446 |
(1) Includes $16,930 and $5,571 in land for Properties under construction as of December 31, 2019 and 2018, respectively.
Rental Income, Operating Leases | NNN recognized the following revenues in rental income for the years ended December 31 (dollars in thousands):
| 2019 |  | 2018 |  | 2017
Rental income from operating leases | $ | 650,112 |  |  | $ | 602,131 |  |  | $ | 565,405 |
Earned income from direct financing leases | 798 |  |  | 923 |  |  | 978 |
Percentage rent | 1,310 |  |  | 1,561 |  |  | 1,700 |
Real estate expense reimbursement from tenants | 16,789 |  |  | 16,784 |  |  | 15,512 |
| $ | 669,009 |  |  | $ | 621,399 |  |  | $ | 583,595 |
Rental Income, Direct Financing Leases | NNN recognized the following revenues in rental income for the years ended December 31 (dollars in thousands):
| 2019 |  | 2018 |  | 2017
Rental income from operating leases | $ | 650,112 |  |  | $ | 602,131 |  |  | $ | 565,405 |
Earned income from direct financing leases | 798 |  |  | 923 |  |  | 978 |
Percentage rent | 1,310 |  |  | 1,561 |  |  | 1,700 |
Real estate expense reimbursement from tenants | 16,789 |  |  | 16,784 |  |  | 15,512 |
| $ | 669,009 |  |  | $ | 621,399 |  |  | $ | 583,595 |
Schedule of Future Minimum Lease Payments for Capital Leases | The following is a schedule of undiscounted cash flows to be received on noncancellable operating leases as of December 31, 2019 (dollars in thousands):
2020 | $ | 664,571 |
2021 | 648,405 |
2022 | 618,646 |
2023 | 590,642 |
2024 | 569,865 |
Thereafter | 4,458,973 |
| $ | 7,551,102 |
Net Investment in Direct Financing Leases | The following lists the components of net investment in direct financing leases at December 31 (dollars in thousands):
| 2019 |  | 2018
Minimum lease payments to be received | $ | 9,356 |  |  | $ | 10,899 |
Estimated unguaranteed residual values | 1,227 |  |  | 4,395 |
Less unearned income | (6,379 | ) |  | (7,225 | )
Net investment in direct financing leases | $ | 4,204 |  |  | $ | 8,069 |
Schedule of Future Minimum Lease Receivables for Financing Leases | The following is a schedule of undiscounted cash flows to be received on direct financing leases held for investment as of December 31, 2019 (dollars in thousands):
2020 | $ | 900 |
2021 | 920 |
2022 | 897 |
2023 | 895 |
2024 | 896 |
Thereafter | 4,848 |
| $ | 9,356 |
Disclosure of Long Lived Assets Held-for-sale | Real estate held for sale consisted of the following as of December 31 (dollars in thousands):
| 2019 |  | 2018
Land and improvements | $ | 4,996 |  |  | $ | 13,597 |
Building and improvements | 6,511 |  |  | 32,658 |
| 11,507 |  |  | 46,255 |
Less accumulated depreciation and amortization | (3,390 | ) |  | (10,088 | )
Less impairment | (1,107 | ) |  | (14,250 | )
| $ | 7,010 |  |  | $ | 21,917 |
Disclosure of Long Lived Assets Held-for-sale, Gains Recognized | The following table summarizes the Properties sold and the corresponding gain recognized on the disposition of Properties for the years ended December 31 (dollars in thousands):
| 2019 |  | 2018 |  | 2017
# of Sold Properties |  | Gain |  | # of Sold Properties |  | Gain |  | # of Sold Properties |  | Gain
Gain on disposition of real estate | 59 |  | $ | 32,463 |  |  | 61 |  | $ | 65,070 |  |  | 48 |  | $ | 36,655 |
Remaining Funding Commitments | These construction commitments, at December 31, 2019, are outlined in the table below (dollars in thousands):
Total commitment(1) |  | $ | 75,927 |
Less amount funded |  | 44,368 |
Remaining commitment |  | $ | 31,559 |
(1) Includes land, construction costs, tenant improvements, lease costs and capitalized interest.
Intangible Assets, Lease Liabilities, and Related Amortization | The following is a schedule of the amortization of acquired above-market and below-market in-place lease intangibles and the amortization of the in-place lease intangibles as of December 31, 2019 (dollars in thousands):
| Above-Market and Below-Market In-Place Lease Intangibles(1) |  | In-Place Lease Intangibles(2)
2020 | $ | 695 |  |  | $ | 7,502 |
2021 | 590 |  |  | 6,800 |
2022 | 466 |  |  | 6,339 |
2023 | 383 |  |  | 5,833 |
2024 | 379 |  |  | 5,138 |
Thereafter | 7,262 |  |  | 23,316 |
| $ | 9,775 |  |  | $ | 54,928 |
Weighted average amortization period (years) | 18.0 |  |  | 10.3 |
(1) | Recorded as a net increase to rental income.
(2) Amortized as an increase to amortization expense. In accordance with purchase accounting for the acquisition of real estate subject to a lease, NNN has recorded intangible assets and lease liabilities that consisted of the following at December 31 (dollars in thousands):
|  | 2019 |  | 2018
Intangible lease assets (included in other assets): |  |  |  |
Above-market in-place leases |  | $ | 15,754 |  |  | $ | 15,175 |
Less: accumulated amortization |  | (9,897 | ) |  | (9,239 | )
Above-market in-place leases, net |  | $ | 5,857 |  |  | $ | 5,936 |
In-place leases |  | $ | 119,846 |  |  | $ | 104,871 |
Less: accumulated amortization |  | (64,918 | ) |  | (60,797 | )
In-place leases, net |  | $ | 54,928 |  |  | $ | 44,074 |
Intangible lease liabilities (included in other liabilities): |  |  |  |
Below-market in-place leases |  | $ | 41,767 |  |  | $ | 41,554 |
Less: accumulated amortization |  | (26,135 | ) |  | (25,258 | )
Below-market in-place leases, net |  | $ | 15,632 |  |  | $ | 16,296 |

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