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Real Estate (Tables)
12 Months Ended
Dec. 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 December 31 (dollars in thousands):

 

 

 

2022

 

 

2021

 

Land and improvements (1)

 

$

2,669,498

 

 

$

2,527,483

 

Buildings and improvements

 

 

6,985,394

 

 

 

6,375,583

 

Leasehold interests

 

 

355

 

 

 

355

 

 

 

 

9,655,247

 

 

 

8,903,421

 

Less accumulated depreciation and amortization

 

 

(1,660,308

)

 

 

(1,470,062

)

 

 

 

7,994,939

 

 

 

7,433,359

 

Work in progress and improvements

 

 

21,737

 

 

 

7,277

 

Accounted for using the operating method

 

 

8,016,676

 

 

 

7,440,636

 

Accounted for using the direct financing method

 

 

3,352

 

 

 

3,653

 

Classified as held for sale

 

 

786

 

 

 

5,557

 

 

 

$

8,020,814

 

 

$

7,449,846

 

 

(1)
Includes $22,356 and $8,979 in land for Properties under construction as of December 31, 2022 and 2021, respectively.
Rental Income, Operating Leases

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

 

 

 

2022

 

 

2021

 

 

2020

 

Rental income from operating leases

 

$

751,680

 

 

$

703,865

 

 

$

639,265

 

Earned income from direct financing leases

 

 

595

 

 

 

623

 

 

 

647

 

Percentage rent

 

 

1,541

 

 

 

706

 

 

 

842

 

Real estate expense reimbursement from tenants

 

 

17,802

 

 

 

18,665

 

 

 

18,039

 

 

 

$

771,618

 

 

$

723,859

 

 

$

658,793

 

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, 2022 (dollars in thousands):

 

2023

 

$

710,244

 

2024

 

 

693,766

 

2025

 

 

667,220

 

2026

 

 

624,196

 

2027

 

 

577,884

 

Thereafter

 

 

4,121,325

 

 

 

$

7,394,635

 

 

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):

 

 

 

2022

 

 

2021

 

Intangible lease assets (included in other assets):

 

 

 

 

 

 

Above-market in-place leases

 

$

15,356

 

 

$

15,335

 

Less: accumulated amortization

 

 

(11,477

)

 

 

(10,821

)

Above-market in-place leases, net

 

$

3,879

 

 

$

4,514

 

 

 

 

 

 

 

 

In-place leases

 

$

124,198

 

 

$

122,069

 

Less: accumulated amortization

 

 

(79,675

)

 

 

(73,345

)

In-place leases, net

 

$

44,523

 

 

$

48,724

 

 

 

 

 

 

 

 

Intangible lease liabilities (included in other liabilities):

 

 

 

 

 

 

Below-market in-place leases

 

$

41,371

 

 

$

41,705

 

Less: accumulated amortization

 

 

(28,121

)

 

 

(27,447

)

Below-market in-place leases, net

 

$

13,250

 

 

$

14,258

 

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, 2022 (dollars in thousands):

 

 

 

Above-Market
and Below-
Market
In-Place
Lease
Intangibles
(1)

 

 

In-Place Lease
Intangibles
(2)

 

2023

 

$

460

 

 

$

6,834

 

2024

 

 

457

 

 

 

6,146

 

2025

 

 

443

 

 

 

5,427

 

2026

 

 

452

 

 

 

4,840

 

2027

 

 

470

 

 

 

4,023

 

Thereafter

 

 

7,089

 

 

 

17,253

 

 

 

$

9,371

 

 

$

44,523

 

 

 

 

 

 

 

 

Weighted average amortization period (years)

 

 

17.2

 

 

 

9.1

 

 

(1)
Recorded as a net increase to rental income over the life of the lease.
(2)
Amortized as an increase to amortization expense.
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):

 

 

 

2022

 

 

2021

 

 

2020

 

 

 

# of Sold
Properties

 

 

Gain

 

 

# of Sold
Properties

 

 

Gain

 

 

# of Sold
Properties

 

 

Gain

 

Gain on disposition of real estate

 

 

33

 

 

$

17,443

 

 

 

74

 

 

$

23,094

 

 

 

38

 

 

$

16,238

 

Remaining Funding Commitments These construction commitments, at December 31, 2022, are outlined in the table below (dollars in thousands):

 

Total commitment(1)

 

$

117,640

 

Less amount funded

 

 

(44,093

)

Remaining commitment

 

$

73,547

 

 

(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 real estate assets, including identifiable intangible assets, NNN recognized real estate impairments, net of recoveries as summarized in the table below (dollars in thousands):

 

 

2022

 

 

2021

 

 

2020

 

Total real estate impairments, net of recoveries

 

$

8,309

 

 

$

21,957

 

 

$

37,442

 

Number of Properties:

 

 

 

 

 

 

 

 

 

Vacant

 

 

9

 

 

 

30

 

 

 

14

 

Occupied

 

 

7

 

 

 

12

 

 

 

17