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Real Estate (Tables)

12 Months Ended

Dec. 31, 2014

Real Estate Investments, Net [Abstract]

Classification of Investment Property Leases

The following outlines key information for NNN’s leases at December 31, 2014:



Lease classification:
Operating	2,083
Direct financing	12
Building portion – direct financing/land portion – operating	1
Weighted average remaining lease term	12 years

Summary of Real Estate Subject to Operating Leases

Real estate subject to operating leases consisted of the following as of December 31 (dollars in thousands):



	2014			2013
Land and improvements	$	1,784,494		$	1,652,304
Buildings and improvements	3,414,691			2,960,845
Leasehold interests	1,290			1,290
	5,200,475			4,614,439
Less accumulated depreciation and amortization	(511,703		)	(415,774		)
	4,688,772			4,198,665
Work in progress	28,908			60,719
	$	4,717,680		$	4,259,384

Schedule of Future Minimum Lease Payments for Capital Leases

The following is a schedule of future minimum lease payments to be received on noncancellable operating leases at December 31, 2014 (dollars in thousands):



2015	$	432,369
2016	427,152
2017	417,412
2018	392,925
2019	375,013
Thereafter	3,025,217
	$	5,070,088

Net Investment in Direct Financing Leases

The following lists the components of net investment in direct financing leases at December 31 (dollars in thousands):



	2014			2013
Minimum lease payments to be received	$	17,376		$	20,469
Estimated unguaranteed residual values	8,274			8,274
Less unearned income	(8,676		)	(10,401		)
Net investment in direct financing leases	$	16,974		$	18,342

Schedule of Future Minimum Lease Receivables for Financing Leases

The following is a schedule of future minimum lease payments to be received on direct financing leases held for investment at December 31, 2014 (dollars in thousands):



2015	$	2,956
2016	2,873
2017	2,035
2018	2,007
2019	1,513
Thereafter	5,992
	$	17,376

The above table does not include future minimum lease payments for renewal periods, potential variable CPI rent increases or contingent rental payments that may become due in future periods (see Real Estate Portfolio – Accounted for Using the Operating Method).

Disclosure of Long Lived Assets Held-for-sale

Real estate held for sale consisted of the following as of (dollars in thousands):



	2014			2013
Land and improvements	$	3,246		$	5,751
Building and improvements	4,644			8,067
	7,890			13,818
Less accumulated depreciation and amortization	(1,473		)	(2,362		)
Less impairment	(1,022		)	(2,132		)
	$	5,395		$	9,324

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):



	2014					2013					2012
	# of Sold Properties	Gain				# of Sold Properties	Gain				# of Sold Properties	Gain
Gain on disposition of real estate	25	$	11,587			—	$	173			—	$	—
Income tax expense		(318		)			(66		)			—
		11,269					107					—
Gain on disposition of real estate included in discontinued operations	2	155			⁽¹⁾	35	6,272			⁽¹⁾	34	10,956		⁽¹⁾
Income tax expense		—					(784		)			—
		$	11,424				$	5,595				$	10,956

⁽¹⁾ Amount includes the recognition of deferred gains on previously sold properties.

Remaining Funding Commitments

These construction commitments, as of December 31, 2014, are outlined in the table below (dollars in thousands):



Number of properties	26
Total commitment⁽¹⁾	$	110,081
Amount funded	$	57,465
Remaining commitment	$	52,616


⁽¹⁾	Includes land, construction costs, tenant improvements and lease costs.

Real Estate Impairments

As a result of the Company’s review of long lived assets, including identifiable intangible assets, NNN recognized the following real estate impairments for the years ended December 31 (dollars in thousands):



	2014		2013		2012
Continuing operations	$	760	$	3,565	$	4,070
Discontinued operations	63		541		6,242
	$	823	$	4,106	$	10,312