Real Estate (Tables)

9 Months Ended

Sep. 30, 2021

Real Estate [Abstract]

Real Estate Portfolio

Real Estate Portfolio – NNN's real estate consisted of the following at (dollars in thousands):

	September 30, 2021			December 31, 2020
Land and improvements(1)	$	2,533,379		$	2,489,243
Buildings and improvements		6,331,216			6,009,797
Leasehold interests		355			355
		8,864,950			8,499,395
Less accumulated depreciation and amortization		(1,434,760	)		(1,317,407	)
		7,430,190			7,181,988
Work in progress for buildings and improvements		8,551			26,673
Accounted for using the operating method		7,438,741			7,208,661
Accounted for using the direct financing method		3,732			3,994
	$	7,442,473		$	7,212,655

(1) Includes $8,844 and $8,421 in land for Properties under construction at September 30, 2021 and December 31, 2020, respectively.

Rental Income

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

	Quarter Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Rental income from operating leases	$	175,833	$	153,825	$	522,787	$	481,858
Earned income from direct financing leases		154		161		469		487
Percentage rent		195		160		530		728
Real estate expense reimbursement from     tenants		3,842		3,719		13,440		12,818
	$	180,024	$	157,865	$	537,226	$	495,891

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):

	September 30, 2021			December 31, 2020
Intangible lease assets (included in other assets):
Above-market in-place leases	$	15,389		$	15,474
Less: accumulated amortization		(10,699	)		(10,271	)
Above-market in-place leases, net	$	4,690		$	5,203
In-place leases	$	123,470		$	118,416
Less: accumulated amortization		(72,510	)		(68,695	)
In-place leases, net	$	50,960		$	49,721
Intangible lease liabilities (included in other liabilities):
Below-market in-place leases	$	41,932		$	41,101
Less: accumulated amortization		(27,217	)		(26,486	)
Below-market in-place leases, net	$	14,715		$	14,615

Real Estate Held for Sale

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

	September 30, 2021			December 31, 2020
Land and improvements	$	9,272		$	3,841
Building and improvements		14,463			4,971
		23,735			8,812
Less accumulated depreciation and amortization		(4,249	)		(2,536	)
Less impairment		(9,777	)		(605	)
	$	9,709		$	5,671

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,
	2021			2020			2021			2020
	# 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	27	$	9,473	3	$	148	53	$	17,935	25	$	13,637

Real Estate Commitments

These construction commitments, as of September 30, 2021, are outlined in the table below (dollars in thousands):

Total commitment(1)	$	39,122
Less amount funded		17,395
Remaining commitment	$	21,727

(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 September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Total real estate impairments, net of recoveries	$	4,781	$	5,695	$	14,647	$	33,062
Number of Properties:
Vacant		5		1		19		10
Occupied		2		—		10		13