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Real Estate (Tables)

6 Months Ended

Jun. 30, 2019

The following outlines key information for NNN’s leases:



	June 30, 2019
Lease classification:
Operating	3,062
Direct financing	7
Building portion – direct financing/land portion – operating	1
Weighted average remaining lease term (years)	11.4

Real Estate Subject to Operating Leases

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



	June 30, 2019			December 31, 2018
Land and improvements⁽¹⁾	$	2,455,201		$	2,371,925
Buildings and improvements	5,717,692			5,476,416
Leasehold interests	3,630			3,630
	8,176,523			7,851,971
Less accumulated depreciation and amortization	(1,083,623		)	(1,008,772		)
	7,092,900			6,843,199
Work in progress for buildings and improvements	17,698			8,017
	$	7,110,598		$	6,851,216

⁽¹⁾ Includes $14,686 and $5,571 in land for Properties under construction at June 30, 2019 and December 31, 2018,

respectively.

Lease Income

NNN recognized the following revenues in rental income (dollars in thousands):



	Quarter Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Rental income from operating leases	$	160,234	$	150,969	$	318,632	$	298,798
Earned income from direct financing leases	208		225		420		455
Percentage rent	300		189		722		734
Real estate expense reimbursement from tenants	3,854		3,770		7,848		7,928
	$	164,596	$	155,153	$	327,622	$	307,915

Undiscounted Cash Flows - Operating Leases

The following is a schedule of undiscounted cash flows to be received on noncancellable operating leases as of June 30, 2019 (dollars in thousands):



2019	$	312,588
2020	637,801
2021	619,480
2022	589,653
2023	561,588
Thereafter	4,648,975
	$	7,370,085

Components of Net Investment in Direct Financing Leases

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



	June 30, 2019			December 31, 2018
Minimum lease payments to be received	$	10,234		$	10,899
Estimated unguaranteed residual values	3,632			4,395
Less unearned income	(6,814		)	(7,225		)
Net investment in direct financing leases	$	7,052		$	8,069

Undiscounted Cash Flows - Direct Financing Leases

The following is a schedule of undiscounted cash flows to be received on direct financing leases held for investment as of June 30, 2019 (dollars in thousands):



2019	$	734
2020	1,045
2021	920
2022	897
2023	895
Thereafter	5,743
	$	10,234

Real Estate Held for Sale

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



	June 30, 2019			December 31, 2018
Land and improvements	$	2,207		$	10,808
Building and improvements	1,655			27,802
	3,862			38,610
Less accumulated depreciation and amortization	(619		)	(7,499		)
Less impairment	(2,955		)	(14,964		)
	$	288		$	16,147

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 June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
	# of Sold Properties	Gain		# of Sold Properties	Gain		# of Sold Properties	Gain		# of Sold Properties	Gain
Gain on disposition of real estate	13	$	13,002	13	$	4,106	30	$	23,447	28	$	42,702

Real Estate Commitments

These construction commitments, as of June 30, 2019, are outlined in the table below (dollars in thousands):



Total commitment⁽¹⁾	$	75,188
Less amount funded	32,384
Remaining commitment	$	42,804
⁽¹⁾ Includes land, construction costs, tenant improvements, lease costs and capitalized interest.