Real Estate (Tables)

12 Months Ended

Dec. 31, 2021

Real Estate [Abstract]

Summary of Real Estate Subject to Operating Leases

Real Estate Portfolio – NNN's real estate consisted of the following at December 31 (dollars in thousands):

	2021			2020
Land and improvements (1)	$	2,527,483		$	2,489,243
Buildings and improvements		6,375,583			6,009,797
Leasehold interests		355			355
		8,903,421			8,499,395
Less accumulated depreciation and amortization		(1,470,062	)		(1,317,407	)
		7,433,359			7,181,988
Work in progress – improvements		7,277			26,673
Accounted for using the operating method		7,440,636			7,208,661
Accounted for using the direct financing method		3,653			3,994
	$	7,444,289		$	7,212,655

(1)Includes $8,979 and $8,421 in land for Properties under construction as of December 31, 2021 and 2020, respectively.

Rental Income, Operating Leases

NNN recognized the following revenues in rental income for the years ended December 31 (dollars in thousands):

	2021		2020		2019
Rental income from operating leases	$	703,865	$	639,265	$	650,112
Earned income from direct financing leases		623		647		798
Percentage rent		706		842		1,310
Real estate expense reimbursement from tenants		18,665		18,039		16,789
	$	723,859	$	658,793	$	669,009

Undiscounted Cash Flows to be Received on Noncancellable Operating Leases

The following is a schedule of undiscounted cash flows to be received on noncancellable operating leases as of December 31, 2021 (dollars in thousands):

2022	$	654,927
2023		632,473
2024		613,371
2025		586,751
2026		543,893
Thereafter		3,895,027
	$	6,926,442

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 December 31 (dollars in thousands):

	2021			2020
Intangible lease assets (included in other assets):
Above-market in-place leases	$	15,335		$	15,474
Less: accumulated amortization		(10,821	)		(10,271	)
Above-market in-place leases, net	$	4,514		$	5,203
In-place leases	$	122,069		$	118,416
Less: accumulated amortization		(73,345	)		(68,695	)
In-place leases, net	$	48,724		$	49,721
Intangible lease liabilities (included in other liabilities):
Below-market in-place leases	$	41,705		$	41,101
Less: accumulated amortization		(27,447	)		(26,486	)
Below-market in-place leases, net	$	14,258		$	14,615

The following is a schedule of the amortization of acquired above-market and below-market in-place lease intangibles and the amortization of the in-place lease intangibles as of December 31, 2021 (dollars in thousands):

	Above-Market and Below- Market In-Place Lease Intangibles(1)		In-Place Lease Intangibles(2)
2022	$	524	$	7,021
2023		443		6,547
2024		440		5,859
2025		426		5,140
2026		435		4,553
Thereafter		7,476		19,604
	$	9,744	$	48,724
Weighted average amortization period (years)		17.7		9.7

(1)Recorded as a net increase to rental income over the life of the lease.

(2)Amortized as an increase to amortization expense.

Real Estate Held for Sale

Real estate held for sale consisted of the following as of December 31 (dollars in thousands):

	2021			2020
Land and improvements	$	6,440		$	3,841
Building and improvements		4,313			4,971
		10,753			8,812
Less accumulated depreciation and amortization		(1,331	)		(2,536	)
Less impairment		(3,865	)		(605	)
	$	5,557		$	5,671

Gains on Dispositions of Properties

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):

	2021			2020			2019
	# of Sold Properties	Gain		# of Sold Properties	Gain		# of Sold Properties	Gain
Gain on disposition of real estate	74	$	23,094	38	$	16,238	59	$	32,463

Remaining Funding Commitments

These construction commitments, at December 31, 2021, are outlined in the table below (dollars in thousands):

Total commitment(1)	$	40,991
Less amount funded		16,256
Remaining commitment	$	24,735

(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):

	2021		2020		2019
Total real estate impairments, net of recoveries	$	21,957	$	37,442	$	31,992
Number of Properties:
Vacant		30		14		27
Occupied		12		17		12