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Real Estate (Tables) | 6 Months Ended
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Jun. 30, 2023
Real Estate [Abstract] |
Summary of Real Estate Subject to Operating Leases | Real Estate Portfolio – NNN's real estate consisted of the following at (dollars in thousands):
|  | June 30, 2023 |  |  | December 31, 2022 |
Land and improvements(1) |  | $ | 2,765,263 |  |  | $ | 2,669,498 |
Buildings and improvements |  |  | 7,166,833 |  |  |  | 6,985,394 |
Leasehold interests |  |  | 355 |  |  |  | 355 |
|  |  | 9,932,451 |  |  |  | 9,655,247 |
Less accumulated depreciation and amortization |  |  | (1,766,177 | ) |  |  | (1,660,308 | )
|  |  | 8,166,274 |  |  |  | 7,994,939 |
Work in progress and improvements |  |  | 49,823 |  |  |  | 21,737 |
Accounted for using the operating method |  |  | 8,216,097 |  |  |  | 8,016,676 |
Accounted for using the direct financing method |  |  | 3,191 |  |  |  | 3,352 |
Classified as held for sale |  |  | 1,904 |  |  |  | 786 |
|  | $ | 8,221,192 |  |  | $ | 8,020,814 |
(1) | Includes $63,991 and $22,356 in land for Properties under construction at June 30, 2023 and December 31, 2022, respectively.
Rental Income, Operating Leases | NNN recognized the following revenues in rental income (dollars in thousands):
|  | Quarter Ended June 30, |  |  | Six Months Ended June 30, |
|  | 2023 |  |  | 2022 |  |  | 2023 |  |  | 2022 |
Rental income from operating leases |  | $ | 197,629 |  |  | $ | 185,791 |  |  | $ | 395,812 |  |  | $ | 370,102 |
Earned income from direct financing leases |  |  | 143 |  |  |  | 150 |  |  |  | 287 |  |  |  | 301 |
Percentage rent |  |  | 291 |  |  |  | 295 |  |  |  | 1,054 |  |  |  | 996 |
Real estate expense reimbursement from tenants |  |  | 4,363 |  |  |  | 4,300 |  |  |  | 8,903 |  |  |  | 8,900 |
|  | $ | 202,426 |  |  | $ | 190,536 |  |  | $ | 406,056 |  |  | $ | 380,299 |
Intangible Assets, Lease Liabilities, and Related Amortization | 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 (dollars in thousands):
|  | June 30, 2023 |  |  | December 31, 2022 |
Intangible lease assets (included in other assets): |  |  |  |  |  |
Above-market in-place leases |  | $ | 15,356 |  |  | $ | 15,356 |
Less: accumulated amortization |  |  | (11,816 | ) |  |  | (11,477 | )
Above-market in-place leases, net |  | $ | 3,540 |  |  | $ | 3,879 |
In-place leases |  | $ | 123,468 |  |  | $ | 124,198 |
Less: accumulated amortization |  |  | (82,845 | ) |  |  | (79,675 | )
In-place leases, net |  | $ | 40,623 |  |  | $ | 44,523 |
Intangible lease liabilities (included in other liabilities): |  |  |  |  |  |
Below-market in-place leases |  | $ | 41,267 |  |  | $ | 41,371 |
Less: accumulated amortization |  |  | (28,634 | ) |  |  | (28,121 | )
Below-market in-place leases, net |  | $ | 12,633 |  |  | $ | 13,250 |
Gains on Dispositions of Properties | The following table summarizes the properties sold and the corresponding gain recognized on the disposition of properties (dollars in thousands):
|  | Quarter Ended June 30, |  |  | Six Months Ended June 30, |
|  | 2023 |  |  | 2022 |  |  | 2023 |  |  | 2022 |
|  | # of Sold Properties |  | Net Gain |  |  | # of Sold Properties |  | Net Gain |  |  | # of Sold Properties |  | Net Gain |  |  | # of Sold Properties |  | Net Gain |
Gain on disposition of real estate |  | 7 |  | $ | 13,930 |  |  | 8 |  | $ | 775 |  |  | 13 |  | $ | 20,230 |  |  | 18 |  | $ | 4,767 |
Remaining Funding Commitments | These construction commitments, as of June 30, 2023, are outlined in the table below (dollars in thousands):
Total commitment(1) |  | $ | 268,159 |
Less amount funded |  |  | (113,814 | )
Remaining commitment |  | $ | 154,345 |
(1) | Includes land, construction costs, tenant improvements, lease costs and capitalized interest.
Real Estate Impairments | As a result of NNN's review of long-lived assets, including identifiable intangible assets, NNN recognized real estate impairments, net of recoveries as summarized in the table below (dollars in thousands):
|  | Quarter Ended June 30, |  |  | Six Months Ended June 30, |
|  | 2023 |  |  | 2022 |  |  | 2023 |  |  | 2022 |
Total real estate impairments, net of recoveries |  | $ | 34 |  |  | $ | 4,618 |  |  | $ | 2,674 |  |  | $ | 6,250 |
Number of Properties: |  |  |  |  |  |  |  |  |  |  |  |
Vacant |  |  | — |  |  |  | 3 |  |  |  | 3 |  |  |  | 6 |
Occupied |  |  | — |  |  |  | 3 |  |  |  | 1 |  |  |  | 5 |

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