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Real Estate | 9 Months Ended
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Sep. 30, 2025
Real Estate [Abstract] |
Real Estate | ## Note 2 – Real Estate: Real Estate – Portfolio Leases. At September 30, 2025, NNN's real estate portfolio had a weighted average remaining lease term of 10.1 years and consisted of 3,622 leases classified as operating leases and an additional four leases accounted for as direct financing leases. The following is a summary of the general structure of the leases in the Property Portfolio, although the specific terms of each lease can vary significantly. Typically, the Property leases provide for initial terms of 10 to 20 years and a triple-net lease structure, pursuant to which the tenant bears responsibility for operating expenses of the Property, including utilities, real estate taxes and assessments, property and liability insurance, maintenance, repairs and capital expenditures. Certain Properties are subject to leases under which NNN retains responsibility for specific costs and expenses associated with the Property. NNN's leases provide for annual base rental payments (payable in monthly installments), the majority of which include negotiated increases in rent as a result of increases in the Consumer Price Index or set fixed increases. NNN's leases often provide the tenant with one or more multi-year renewal options, subject to the same terms and conditions provided under the initial lease term, including rent increases. NNN's lease term is based on the non-cancellable base term unless economic incentives make it reasonably certain that an option period to extend the lease will be exercised, in which event NNN includes the renewal options. Some of the leases also provide that in the event NNN wishes to sell the Property subject to that lease, NNN first must offer the lessee the right to purchase the Property on the same terms and conditions as any offer which NNN intends to accept for the sale of the Property. Real Estate Portfolio. NNN's real estate consisted of the following at (dollars in thousands):
|  | September 30, 2025 |  |  | December 31, 2024 |
Land and improvements(1) |  | $ | 3,042,105 |  |  | $ | 2,919,976 |
Buildings and improvements |  |  | 8,310,558 |  |  |  | 7,805,939 |
Leasehold interests |  |  | 355 |  |  |  | 355 |
|  |  | 11,353,018 |  |  |  | 10,726,270 |
Less accumulated depreciation and amortization |  |  | (2,216,029 | ) |  |  | (2,065,316 | )
|  |  | 9,136,989 |  |  |  | 8,660,954 |
Work in progress and improvements |  |  | 42,509 |  |  |  | 82,411 |
Accounted for using the operating method |  |  | 9,179,498 |  |  |  | 8,743,365 |
Accounted for using the direct financing method |  |  | 2,336 |  |  |  | 2,520 |
Classified as held for sale(2) |  |  | 22,863 |  |  |  | 283 |
|  | $ | 9,204,697 |  |  | $ | 8,746,168 |
(1) | Includes $21,784 and $34,356 in land for Properties under construction at September 30, 2025 and December 31, 2024, respectively.
(2) | As of September 30, 2025, 15 Properties were classified as held for sale. The two properties classified as held for sale as of December 31, 2024 were sold during the nine months ended September 30, 2025.
NNN recognized the following revenues in rental income (dollars in thousands):
|  | Quarter Ended September 30, |  |  | Nine Months Ended September 30, |
|  | 2025 |  |  | 2024 |  |  | 2025 |  |  | 2024 |
Rental income from operating leases |  | $ | 225,053 |  |  | $ | 213,447 |  |  | $ | 670,823 |  |  | $ | 634,088 |
Earned income from direct financing leases |  |  | 111 |  |  |  | 116 |  |  |  | 337 |  |  |  | 353 |
Percentage rent |  |  | 211 |  |  |  | 200 |  |  |  | 1,381 |  |  |  | 1,347 |
Rental revenues |  |  | 225,375 |  |  |  | 213,763 |  |  |  | 672,541 |  |  |  | 635,788 |
Real estate expenses reimbursed from tenants |  |  | 4,398 |  |  |  | 4,392 |  |  |  | 14,304 |  |  |  | 13,332 |
|  | $ | 229,773 |  |  | $ | 218,155 |  |  | $ | 686,845 |  |  | $ | 649,120 |
Some leases provide for a free rent period or scheduled rent increases throughout the lease term. Such amounts are recognized on a straight-line basis over the terms of the leases. For the nine months ended September 30, 2025 and 2024, NNN recognized $715,000 and ($8,000), respectively, of net straight-line accrued rental income, net of reserves, of which $631,000 and $123,000 of such income, net of reserves was recorded during the quarters ended September 30, 2025 and 2024, respectively. Real Estate – Intangibles 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):
|  | September 30, 2025 |  |  | December 31, 2024 |
Intangible lease assets (included in other assets): |  |  |  |  |  |
Above-market in-place leases |  | $ | 14,355 |  |  | $ | 14,753 |
Less: accumulated amortization |  |  | (11,084 | ) |  |  | (12,159 | )
Above-market in-place leases, net |  | $ | 3,271 |  |  | $ | 2,594 |
In-place leases |  | $ | 116,282 |  |  | $ | 116,549 |
Less: accumulated amortization |  |  | (82,407 | ) |  |  | (85,741 | )
In-place leases, net |  | $ | 33,875 |  |  | $ | 30,808 |
Intangible lease liabilities (included in other liabilities): |  |  |  |  |  |
Below-market in-place leases |  | $ | 37,375 |  |  | $ | 39,869 |
Less: accumulated amortization |  |  | (27,902 | ) |  |  | (28,946 | )
Below-market in-place leases, net |  | $ | 9,473 |  |  | $ | 10,923 |
The amounts amortized as a net increase to rental income for above-market and below-market leases for the nine months ended September 30, 2025 and 2024, were $1,781,000 and $351,000, respectively, of which $68,000 and $109,000 were recorded during the quarters ended September 30, 2025 and 2024, respectively. The value of in-place leases amortized to expense for the nine months ended September 30, 2025 and 2024 was $6,545,000 and $4,687,000, respectively, of which $1,279,000 and $1,457,000 was recorded for the quarters ended September 30, 2025 and 2024, respectively. Real Estate – Dispositions The following table summarizes the properties sold and the corresponding gain recognized on the disposition of properties (dollars in thousands):
|  | Quarter Ended September 30, |  |  | Nine Months Ended September 30, |
|  | 2025 |  |  | 2024 |  |  | 2025 |  |  | 2024 |
|  | # 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 |  | 23 |  | $ | 12,570 |  |  | 9 |  | $ | 7,765 |  |  | 56 |  | $ | 32,581 |  |  | 29 |  | $ | 30,207 |
Real Estate – Commitments NNN has committed to fund construction on 19 Properties. The improvements on such Properties are estimated to be completed within 12 to 18 months. These construction commitments, as of September 30, 2025, are outlined in the table below (dollars in thousands):
Total commitment(1) |  | $ | 114,030 |
Less amount funded |  |  | (64,293 | )
Remaining commitment |  | $ | 49,737 |
(1) | Includes land, construction costs, tenant improvements, lease costs, capitalized interest and third-party costs.
Real Estate – Impairments NNN periodically assesses its long-lived real estate assets for possible impairment whenever certain events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. As a result of NNN's review of long-lived real estate assets, including identifiable intangible assets, NNN recognized real estate impairments, net of recoveries as summarized in the table below (dollars in thousands):
|  | Quarter Ended September 30, |  |  | Nine Months Ended September 30, |
|  | 2025 |  |  | 2024 |  |  | 2025 |  |  | 2024 |
Total real estate impairments, net of recoveries |  | $ | 7,195 |  |  | $ | 760 |  |  | $ | 13,242 |  |  | $ | 2,908 |
Number of Properties: |  |  |  |  |  |  |  |  |  |  |  |
Vacant |  |  | 14 |  |  |  | — |  |  |  | 22 |  |  |  | 2 |
Occupied |  |  | 1 |  |  |  | 2 |  |  |  | 2 |  |  |  | 5 |
The valuation of impaired assets is determined using widely accepted valuation techniques including discounted cash flow analysis, income capitalization, analysis of recent comparable sales transactions, actual sales negotiations and bona fide purchase offers received from third parties, which are Level 3 inputs. NNN may consider a single valuation technique or multiple valuation techniques, as appropriate, when estimating the fair value of its real estate.

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- Definition The entire disclosure for certain real estate investment financial statements, real estate investment trust operating support agreements, real estate owned, retail land sales, time share transactions, as well as other real estate related disclosures. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 974 -SubTopic 720 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org/1943274/2147477728/974-720-50-1 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 976 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/976/tableOfContent Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 978 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/978/tableOfContent Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 970 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/970/tableOfContent Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 972 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/972/tableOfContent Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 974 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/974/tableOfContent + Details
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