Real Estate (Tables)

12 Months Ended

Dec. 31, 2023

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):

	2023			2022
Land and improvements (1)	$	2,878,400		$	2,669,498
Buildings and improvements		7,368,873			6,985,394
Leasehold interests		355			355
		10,247,628			9,655,247
Less accumulated depreciation and amortization		(1,863,451	)		(1,660,308	)
		8,384,177			7,994,939
Work in progress and improvements		144,068			21,737
Accounted for using the operating method		8,528,245			8,016,676
Accounted for using the direct financing method		3,033			3,352
Classified as held for sale(2)		4,573			786
	$	8,535,851		$	8,020,814

(1)Includes $96,464 and $22,356 in land for Properties under construction as of December 31, 2023 and 2022, respectively.

(2)As of December 31, 2023, one Property was classified as held for sale. The two properties classified as held for sale as of December 31, 2022 were sold during the year ended December 31, 2023.

Rental Income, Operating Leases

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

	2023		2022		2021
Rental income from operating leases	$	805,136	$	751,680	$	703,865
Earned income from direct financing leases		560		595		623
Percentage rent		1,631		1,541		706
Rental revenues		807,327		753,816		705,194
Real estate expense reimbursement from tenants		18,763		17,802		18,665
	$	826,090	$	771,618	$	723,859

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, 2023 (dollars in thousands):

2024	$	765,337
2025		744,061
2026		701,437
2027		655,268
2028		604,084
Thereafter		4,286,914
	$	7,757,101

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):

	2023			2022
Intangible lease assets (included in other assets):
Above-market in-place leases	$	15,297		$	15,356
Less: accumulated amortization		(12,080	)		(11,477	)
Above-market in-place leases, net	$	3,217		$	3,879
In-place leases	$	122,802		$	124,198
Less: accumulated amortization		(85,332	)		(79,675	)
In-place leases, net	$	37,470		$	44,523
Intangible lease liabilities (included in other liabilities):
Below-market in-place leases	$	41,244		$	41,371
Less: accumulated amortization		(29,117	)		(28,121	)
Below-market in-place leases, net	$	12,127		$	13,250

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, 2023 (dollars in thousands):

	Above-Market and Below- Market In-Place Lease Intangibles(1)		In-Place Lease Intangibles(2)
2024	$	451	$	6,139
2025		437		5,421
2026		448		4,835
2027		468		4,010
2028		642		3,566
Thereafter		6,464		13,499
	$	8,910	$	37,470
Weighted average amortization period (years)		16.3		8.5

(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):

	2023				2022				2021
	# of Sold Properties		Gain		# of Sold Properties		Gain		# of Sold Properties		Gain
Gain on disposition of real estate		45	$	47,485		33	$	17,443		74	$	23,094

Remaining Funding Commitments

These construction commitments, at December 31, 2023, are outlined in the table below (dollars in thousands):

Total commitment(1)	$	379,674
Less amount funded		(240,532	)
Remaining commitment	$	139,142

(1) Includes land, construction costs, tenant improvements, lease costs, capitalized interest and third-party costs.

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):

	2023		2022		2021
Total real estate impairments, net of recoveries	$	5,990	$	8,309	$	21,957
Number of Properties:
Vacant		11		9		30
Occupied		3		7		12