Real Estate (Tables)

9 Months Ended

Sep. 30, 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):

	September 30, 2022			December 31, 2021
Land and improvements(1)	$	2,616,920		$	2,527,483
Buildings and improvements		6,779,242			6,375,583
Leasehold interests		355			355
		9,396,517			8,903,421
Less accumulated depreciation and amortization		(1,610,018	)		(1,470,062	)
		7,786,499			7,433,359
Work in progress for buildings and improvements		32,183			7,277
Accounted for using the operating method		7,818,682			7,440,636
Accounted for using the direct financing method		3,429			3,653
Classified as held for sale		4,181			5,557
	$	7,826,292		$	7,449,846

(1) Includes $21,543 and $8,979 in land for Properties under construction at September 30, 2022 and December 31, 2021, respectively.

Rental Income, Operating Leases

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

	Quarter Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Rental income from operating leases	$	188,840	$	175,833	$	558,942	$	522,787
Earned income from direct financing leases		148		154		449		469
Percentage rent		235		195		1,231		530
Real estate expense reimbursement from tenants		3,879		3,842		12,779		13,440
	$	193,102	$	180,024	$	573,401	$	537,226

Intangible Assets, Lease Liabilities, and Related Amortization

Real Estate – Intangibles

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, 2022			December 31, 2021
Intangible lease assets (included in other assets):
Above-market in-place leases	$	15,410		$	15,335
Less: accumulated amortization		(11,339	)		(10,821	)
Above-market in-place leases, net	$	4,071		$	4,514
In-place leases	$	124,310		$	122,069
Less: accumulated amortization		(77,992	)		(73,345	)
In-place leases, net	$	46,318		$	48,724
Intangible lease liabilities (included in other liabilities):
Below-market in-place leases	$	41,371		$	41,705
Less: accumulated amortization		(27,830	)		(27,447	)
Below-market in-place leases, net	$	13,541		$	14,258

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 September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
	# 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	8	$	5,889	27	$	9,473	26	$	10,656	53	$	17,935

Real Estate Commitments

These construction commitments, as of September 30, 2022, are outlined in the table below (dollars in thousands):

Total commitment(1)	$	103,875
Less amount funded		(53,726	)
Remaining commitment	$	50,149

(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,
	2022		2021		2022		2021
Total real estate impairments, net of recoveries	$	971	$	4,781	$	7,221	$	14,647
Number of Properties:
Vacant		2		5		8		19
Occupied		1		2		6		10