Real Estate (Tables)

3 Months Ended

Mar. 31, 2022

Real Estate [Abstract]

Summary of Real Estate Subject to Operating Leases

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

	March 31, 2022			December 31, 2021
Land and improvements(1)	$	2,556,405		$	2,527,483
Buildings and improvements		6,536,540			6,375,583
Leasehold interests		355			355
		9,093,300			8,903,421
Less accumulated depreciation and amortization		(1,517,047	)		(1,470,062	)
		7,576,253			7,433,359
Work in progress for buildings and improvements		11,811			7,277
Accounted for using the operating method		7,588,064			7,440,636
Accounted for using the direct financing method		3,579			3,653
	$	7,591,643		$	7,444,289

(1) Includes $8,070 and $8,979 in land for Properties under construction at March 31, 2022 and December 31, 2021, respectively.

Rental Income, Operating Leases

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

	Quarter Ended March 31,
	2022		2021
Rental income from operating leases	$	184,311	$	173,583
Earned income from direct financing leases		151		158
Percentage rent		701		104
Real estate expense reimbursement from tenants		4,600		5,353
	$	189,763	$	179,198

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):

	March 31, 2022			December 31, 2021
Intangible lease assets (included in other assets):
Above-market in-place leases	$	15,335		$	15,335
Less: accumulated amortization		(10,993	)		(10,821	)
Above-market in-place leases, net	$	4,342		$	4,514
In-place leases	$	121,431		$	122,069
Less: accumulated amortization		(74,480	)		(73,345	)
In-place leases, net	$	46,951		$	48,724
Intangible lease liabilities (included in other liabilities):
Below-market in-place leases	$	41,160		$	41,705
Less: accumulated amortization		(27,214	)		(27,447	)
Below-market in-place leases, net	$	13,946		$	14,258

Real Estate Held for Sale

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

	March 31, 2022			December 31, 2021(1)
Land and improvements	$	546		$	6,440
Building and improvements		1,192			4,313
		1,738			10,753
Less accumulated depreciation and amortization		(714	)		(1,331	)
Less impairment		(462	)		(3,865	)
	$	562		$	5,557
Number of Properties		2			2

(1) Both properties classified as held for sale as of December 31, 2021 were sold during the quarter ended March 31, 2022.

Gains on Dispositions of Properties

The following table summarizes the Properties sold and the corresponding gain recognized on the disposition of Properties (dollars in thousands):

	Quarter Ended March 31,
	2022			2021
	# of Sold Properties	Net Gain		# of Sold Properties	Net Gain
Gain on disposition of real estate	10	$	3,992	11	$	4,281

Remaining Funding Commitments

These construction commitments, as of March 31, 2022, are outlined in the table below (dollars in thousands):

Total commitment(1)	$	38,889
Less amount funded		19,881
Remaining commitment	$	19,008

(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 March 31,
	2022		2021
Total real estate impairments, net of recoveries	$	1,632	$	2,131
Number of Properties:
Vacant		3		6
Occupied		2		1